OPERATIONS MANUAL (APMDP) Andhra Pradesh Municipal Development Project
Andhra Pradesh Municipal Development Project (APMDP) OPERATIONS MANUAL Government of Andhra Pradesh July 02, 2009 APMDP Operations Manual ABREVIATIONS AND ACRONYMS APMDP LoA Letter of Acceptance APUSP Andhra Pradesh Municipal Development Project Andhra Pradesh Urban Services JNNURM APUIF APUP CEAP CEC AP Urban Infrastructure Fund AP Urban Project Capacity Enhancement Action Plan Capacity Enhancement Cell LOI LCB MoA MEPMA CDMA Commissioner and Director of Municipal Administration Capacity Enhancement Needs Assessment Central Social & Welfare Board Centre for Good Governance Consultants’ Qualifications M&E Jawaharlal Nehru National Urban Renewal Mission Letter of Invitation Limited Competitive Bidding Memorandum of Agreement Mission for Elimination of Poverty in Municipal Areas Monitoring and Evaluation MRAP MSU NCB Municipal Administration and Urban Development Municipal Reform Action Plan Municipal Strengthening Unit National Competitive Bidding Department of Town and Country Planning Designated Account Detailed Project Reports Empowered Committee Environment and Social Report Financial Advisor Financial and Operating Plan NPV Net Present Value OM CAPART PD PHED PPP PCBP Fixed Budget Geographic Information System Governance and Accountability Action Plan Government of Andhra Pradesh Government Order Grievance Redressal and Monitoring System PAC PFS PMRs Operations Manual Peoples Action and Rural Technology Personal Deposit Public Health Engineering Department Public-Private Partnerships Procurement Capacity Building Program Project Appraisal Committee Project Financial Statements Project Monitoring Reports PWD QCBS QBS Public Works Department Quality and Cost-Based Selection Quality-Based Selection Request for Proposal Schedule of Rates Single Source Selection Social and Environment Management Framework Technical Assistance Urban Infrastructure Development Scheme for Small and Medium Towns Urban Local Bodies Urban Management Capacity Withdrawal Applications CENA CSWB CGG CQS DTCP DA DPRs EC ESR FA FOP FB GIS GAAP GoAP GO GRMS MAUD IPP ISR ITC Initial Project Proposal Initial Screening Report Instructions to Consultants RFP SoRS SSS SEMF IUFR IRR Interim Unaudited Financial Reports Internal Rate of Return TA UIDSSMT ICB ITQ International Competitive Bidding Invitation to Quote ULBs UMC LCS Least Cost Selection WA i APMDP Operations Manual Table of Contents Sl. No. 1 Subject Pg. No. Introduction 1–7 2 8 – 12 3 Chapter 1: Component A: State Level Policy and Institutional Development Chapter 2: Component B: Capacity Enhancement 4 Chapter 3: Component C: Urban Infrastructure Investment 17 – 30 5 Chapter 4: Component D: Project Management Technical Assistance 31 – 32 6 Chapter 5: Financing Framework for Sub-projects 33 – 35 7 Chapter 6: Management Structure 36 – 41 8 Chapter 7: Governance and Accountability Action Plan (GAAP) 42 – 47 9 Chapter 8: Monitoring & Evaluation 48 – 55 10 Annexure-1- 56 – 89 11 Annexure-2– 12 Annexure-3- Procurement Framework and Procedures Sub-project Cycle 13 – 16 90 – 90 Functions of working groups at ULB level 91 – 143 1. Annexure – 3(A) – Process for preparation of Initial Project Proposal 2. Annexure – 3(B) - Municipal Reforms Action Plan 3. Annexure – 3(C) – Capacity Enhancement Action Plan (CEAP) 4. Annexure – 3(D) – Basic Data of ULB 5. Annexure – 3(E) – Data required for preparation of town wide Infrastructure Improvement proposals. 6. Annexure – 3(F) – Operation and Maintenance Plan. 13 Annexure-4- Initial Project Proposal 144 – 156 14 Annexure-5- Initial Screening Report-Sample 157 – 158 15 Annexure-6- ULB and CDMA/MSU Agreement (MOA) 159 – 163 16 Annexure-7- Subproject Preparation Process, DPR Guidelines 164 – 173 17 Annexure-8- Appraisal Note-Sample 174 – 180 18 Annexure-9- Model Loan/Grant Sanction Letter 181 – 182 ii APMDP Operations Manual 19 Annexure-10- Model Sub-Loan/Grant Agreement 20 Annexure-11- Model Loan Disbursement Format 215 – 218 21 Annexure-12- Government Orders 219 – 284 10 Annexure-13- 11 Annexure-14- 12 Annexure-15- 28 Annexure-16- 15 Annexure-17- 20 Annexure 18 - Format of Progress Report 297 – 299 21 Annexure 19- 300 – 311 22 Annexure 20- HR Policy: Remuneration and Allowances to Project Personnel Procurement Plan for Consultancies 23 Annexure 21- Procurement Plan for Works 316 – 330 24 Annexure 22- 331 – 340 25 Annexure 23- Correspondences of importance with regard to the Project Costs and Retroactive Funding Memorandum of Agreement for the State Institute of Urban Management and Academy Flow of Funds & Claim Procedure Sub-Project implementation monitoring & (Reporting) Staffing of MSU under APMDP; Staffing at the APUIF office IUFR Format (TO BE ADDED DURING NEGOTIATIONS) Financial Management and Disbursements 183 – 214 285 – 285 286 – 286 287 – 288 289 – 289 290 – 296 312 – 315 341 - 374 Note: This Operations Manual needs to be read together with: 1. Approved Social and Environment Management Framework (SEMF) for APMDP, including Social / Environment Manuals 2. Bank Procurement Guidelines iii APMDP Operations Manual Introduction 1.1 The Andhra Pradesh Municipal Development Project (APMDP) is a US $ 387.3 million project being implemented by Government of Andhra Pradesh (GoAP) with support from World Bank (Bank loan of US$ 300 million). 1.2 The project development objective is to help improve i) high-priority urban services in selected ULBs of AP, and ii) the capacity of ULBs to develop and manage urban services. Urban services to improve will be chosen and implemented by eligible ULBs who self select themselves in a demand driven manner based on access criteria established under the project which would be approved by the Steering Committee in the Government of AP. The project will support improvements in the financial, technical, and management capacities of all ULBs of AP through TA and as a condition for infrastructure financing. The project will also pursue improvement of the state-level framework that defines ULBs’ autonomy, accountability, and incentives for performance, as well as GoAP’s capacity to monitor, and provide policy and technical support for, ULBs performance and development. The project will also lay the groundwork for capacity building of the urban poor through studies and community training centers. Project Components 1.3 The four major components of the APMDP are as follows: State Level Policy and Institutional Development Support, Component A, (cost US $ 9.2 million of which US $ 7.6 from Bank): This component includes support for improving the State’s policy and institutional framework to support service delivery and capacity building by ULBs. Activities include; studies and TA to help evaluate options to improve GoAP’s systems of urban finance, studies and TA to help draft and implement streamlined town planning procedures, establishment of a Geographic Information System (GIS) to support monitoring and planning of urban development at the state level, and to support the establishment of similar systems at ULBs, establishment of an AP Urban Academy and preparation of a detailed program to implement the MEPMA Municipal Capacity Enhancement, Component B, (US $ 14 million of which US$ 12.6 million from Bank): This component provides aims at enhancing the financial and technical capacity and operating systems of all ULBs (currently 124). Activities included are: professionalization of ULB management: mainly through training of ULB staff in finance, management, Poverty alleviation, planning, procurement, and engineering, technical assistance for preparation and implementation of institutional, financial and operational improvements tailored to individual ULBs and preparation of GIS maps and General Towns Plans for about 30 ULBs. Urban Infrastructure Investment, Component C, (US $ 342 million of which US$ 259 million from Bank): This component provides investment support (loans, project support grants and guarantees) accessible to ULBs on the principles of self-selection for upgrading urban services, such as water supply (improvements), solid waste management, urban roads, street lighting, slum upgradation, and other select obligatory and discretionary municipal services and approved by the Steering Committee in Government of AP. The investments 1 APMDP Operations Manual would be structured to complement the on-going JNNURM and UIDSSMT programs of GOI, which support a significant number of ULBs, and the DFID funded AP Urban Services Project (APUSP) that focused on improving slums in large cities. To be eligible, ULBs need adequate financial capacity to sustainably finance and operate the facilities and an adequate and feasible plan to improve their financial and management capacity. This component will be funded through the AP Urban Infrastructure Fund (APUIF), which is a Trust registered under the Indian Trust Act. The APUIF is an intermediate entity which will receive funds from the CDMA, and will fund the sub-projects at the ULB level by providing sub-loans and capital grants to them. The component will also include establishment of Multipurpose Community Resource Centers targeted for the urban poor. Project Management Technical Assistance, Component D, (US $22.1 million of which US$ 19.9 million from Bank): Under APMDP, Andhra Pradesh Urban Infrastructure Fund (APUIF) will provide funds with an aim to ensure the quality of subproject preparation, implementation, and monitoring. Preparation and supervision and coordination of implementation of urban investment sub-projects at ULBs will be done by the MSU under CDMA to assist ULBs and procure as per Bank guidelines. There shall be regular individual consultants at MSU to coordinate procurements of services, of works and RFP and tender designs. This will also include assistance to prepare and manage public-private partnership schemes. A Sub-project Technical Assistance Facility (earlier known as PDAF) will support the MSU and CDMA for subproject appraisal, monitoring and quality control, as well as monitoring and support for implementation of reform and Governance and Accountability Action Plan (GAAP) through individual consultants on regular basis at MSU and DPR designs and finalizations through consultant firms / agencies as per procurement guidelines of this manual. Technical Assistance to the implementing agencies like DTCP, MEPMA, APUIF, PHED, ULBs including MSU would be provided under project management through MSU / CDMA as per the government orders and / or Steering Committee approvals. Table 1A provides the costing under the three project components, in US Dollar terms. The dollar-rupee conversion rate applicable to this project is 1US dollar = Rs.51.75 as on 2 nd March, 2009 (date of debt-sustainability certificate from department of expenditure, Ministry of Finance, Government of India) (Annexure-23) as per Government of Andhra Pradesh Finance (PMU) Department Note No.797/Finance PMU/2008, dated 17.01.09 (also in Annexure-23). As per this dollar rate in rupee terms, the funding of project is as on Table1B. 1.4 Institutional Arrangements and Project Management Overall Responsibility: The state Municipal Administration and Urban Development (MAUD) will oversee the overall project including the development of state-level policies and institutions and the support for ULBs, mainly through the CDMA under it. To assist CDMA to carry out this responsibility, GoAP established a MSU with 44 full-time staff including 15 professional level officers. Additional assistance may be provided to MSU or APUIF or other implementing agencies as per the provisions of the GO upon Steering Committee and Finance (SMPC) Department approval. For local infrastructure component, CDMA, through MSU, will collect sub-project proposals from the ULBs, coordinate the appraisal, and will the release the funds as per the approval of the Steering Committee as per the GO. The state- 2 APMDP Operations Manual level policy and institutional development component will involve various subcomponents under the direction of CDMA, the Department of Town and Country Planning (DTCP also under MAUD), and the AP Department of Finance. CDMA will be responsible for coordination and reporting of these activities. CDMA will also establish a “Complaint Cell” and a Public Information Office to complement local public information and Grievance Redressal systems to handle the concerns of project-affected people, ULBs, and contractors. The Andhra Pradesh Urban Infrastructure Fund (APUIF), established as a Trust in February 2005, will act as GoAP’s fiscal agent and asset manager for the portion of Bank financing allocated for infrastructure investment, under a contribution agreement. The role of APUFIDC shall be advisory to APUIF. Further details on project management are in Chapter 6. Institutional Responsibilities: APMDP involves extensive coordination between CDMA, MSU, APUIF, DTCP, PHED and ULBs. The agencies responsible for executing works, and procuring goods/services and monitoring progress under APMDP are detailed in Table 2. All important decisions including appraisal of sub-projects shall be taken by the Project Appraisal Committee consisting of heads of above departments upon coordination by the Project Director, MSU and approved by the Steering Committee at the government level which is in turn constituted with the same heads of departments including Finance Department. 3 APMDP Operations Manual Table - 1A APMDP: Detailed Project Costs Component Cost (US$ mn) Bank Share (%) Bank Financing (US $ mn) GoAP Financing (US$ mn) State Level Policy and Institutional Development -Study for modernization of planning legislation 0.2 90% 0.1 0 -Urban Finance related studies (including for APUIF) 2.5 90% 2.3 0.3 -Urban Training Academy (works + studies) 4.5 77% 3.5 1.1 -Studies for preparation of Urban Poor Program 1.5 90% 1.4 0.2 -Study for preparation of a Urban PPP framework 0.5 90% 0.5 0.1 Sub-total 9.2 7.8 1.7 Capacity enhancement - Capacity Building for professionalization of urban management and operations, including related to urban poor programs -TA for Institutional and Financial improvements at ULBs -GIS Mapping for select ULBs + support cell at DTP Sub-Total 6 90% 5.4 0.6 4 90% 3.6 0.4 4 90% 3.6 0.4 12.6 1.4 259.2 81.9 259.2 81.9 14 Urban Infrastructure Investments -Sub-loans and Sub-Grants to ULBs for urban services (US$ 40 mn for original first year projects + US$ 277 mn for new urban sub-projects + US$ 25mn for Community training centres at ULBs) 341.3 Sub-Total 341.3 76% Project Management -Monitoring & Evaluation system (CDMA / APUIF) 1.5 90% 1.4 0.2 3.5 90% 3.2 0.4 17.1 90% 15.4 1.7 20 2.3 0.75 - 300 87 -Support to CDMA & APUIF for management (incremental operating costs, consultants, technical assistance, audits, etc.) -Sub-project Technical Assistance Facility- preparation and implementation support to ULBs (under CDMA) Sub-Total 22.1 Front-end Fee 0.75 Grand Total 100% 386.6 Disbursement Schedule (US$ million) Annual Cumulative FY10 30 30 Totals may differ due to rounding off 4 FY11 50 80 FY12 65 145 FY13 78 223 FY14 77 300 APMDP Operations Manual Table – 1B APMDP: Detailed Project Costs Component Cost (Rs. in crores) Bank Share (%) Bank Financing (Rs. in crores) GoAP Financing (Rs. in crores) -Study for modernization of planning legislation 1.0 90% 0.5 0.1 -Urban Finance related studies (including for APUIF) 12.9 90% 11.9 1.6 -Urban Training Academy (works + studies) 23.3 77% 18.1 5.7 -Studies for preparation of Urban Poor Program 7.8 90% 7.2 1.0 -Study for preparation of a Urban PPP framework 2.6 90% 2.6 0.5 Sub-total 47.6 40 1.7 3.1 2.1 State Level Policy and Institutional Development Capacity enhancement - Capacity Building for professionalization of urban management and operations, including related to urban poor programs -TA for Institutional and Financial improvements at ULBs 31.1 20.7 90% 27.9 18.6 -GIS Mapping for select ULBs + support cell at DTP 20.7 90% 18.6 2.1 Sub-Total 72.5 65.2 7.2 90% Urban Infrastructure Investments -Sub-loans and Sub-Grants to ULBs for urban services (US$ 40 mn for original first year projects + US$ 277 mn for new urban sub-projects + US$ 25mn for Community training centres at ULBs) Sub-Total 423.8 76% 1766.2 1341.4 1766.2 1341.4 423.8 7.2 1.0 16.6 2.1 79.7 8.8 103.0 3.9 11.4 1553 450 Project Management -Monitoring & Evaluation system (CDMA / APUIF) 90% 7.8 -Support to CDMA & APUIF for management (incremental operating costs, consultants, technical assistance, audits, etc.) -Sub-project Technical Assistance Facility- preparation and implementation support to ULBs (under CDMA) Sub-Total 90% 18.1 90% 88.5 Front-end Fee 114.4 3.9 Grand Total 2004 Disbursement Schedule (Rs. in crores) Annual Cumulative Totals may differ due to rounding off 5 100% - FY10 FY11 FY12 FY13 FY14 155 259 336 404 398 155 414 750 1154 1553 APMDP Operations Manual Table 2 Component-wise Executing and Procurement Agencies for APMDP Component Implementation Procurement Reporting Study for modernization of planning legislation CDMA/MSU/DTCP/ULBs MSU CDMA/ MSU Urban Finance related studies (including for APUIF) CDMA/MSU/APUIF/ULBs MSU CDMA/ MSU CDMA/MSU/PHED/ULBs MSU CDMA/ MSU CDMA/MSU/MEPMA/ULBs MSU CDMA/MSU MSU CDMA/MSU / APUIF CDMA/ MSU A. State Level Policy and Institutional Development Urban Training Academy (works + studies) Studies for preparation of Urban Poor Program Study for preparation of a Urban PPP framework CDMA/MSU/APUIF/ULBs B. Capacity Enhancement TA for Institutional and Financial improvements at ULBs Capacity Building for professionalization of urban management and operations, including related to urban poor programs MSU/ULBs MSU CDMA / MSU/MEPMA/ULBs MSU GIS Mapping for select ULBs + support cell at DTP MSU/ULBs/DTCP/ULBs MSU CDMA/ MSU CDMA/ MSU ULB ULB/MSU CDMA/MSU/ APUIF C. Urban Infrastructure Investment Works D. Project Management Sub-project preparation and implementation support to ULBs (under CDMA) -Support to CDMA & APUIF for management (incremental operating costs, consultants, technical assistance, audits, etc.) Monitoring & Evaluation MSU CDMA/MSU CDMA / MSU/ULBs CDMA / MSU / APUIF/MEPMA/PHED/DTCP/ULBs CDMA / MSU / APUIF/ CDMA/APUIF CDMA/APUIF CDMA/ APUIF CDMA/ APUIF 1.5 Decision-Making: While APUIF and MSU are the proposed managers of infrastructure investment and other components respectively, decision-making with regard to the project (APMDP) would be through the three committees at different levels- Project Appraisal Committee, Steering Committee and an Empowered Committee (EC) constituted by the Government of Andhra Pradesh. Details of the committees are presented in Chapter 6. Decisions and approvals regarding financial appraisal of sub-projects under Urban Infrastructure Investment Component shall lie with the CDMA/ MSU through the Project Appraisal Committee for which the approvals are accorded by the Steering Committee as defined in the GO No 288 of 21st April 09 (appended in Annexure – 12). Decisions pertaining to Project Management Technical Assistance with reference to day-to-day executive and administrative requirements will lie with the CDMA subject to the Management Agreement and policy guidelines approved and delegated by the Steering Committee. 6 APMDP Operations Manual Purpose of the Operations Manual 1.6 This manual is intended to provide ULBs, APUIF, MSU, and the APMDP management team with policies and procedures to be followed during project implementation. The manual is divided into seven chapters: (i) Chapter 1 deals with State Level Policy and Institutional Development Component; (ii) Chapter 2 deals with Institutional Capacity Enhancement; (iii) Chapter 3 deals with specific guidelines for project beneficiaries for sub-project processes and activities under the Urban Infrastructure Investment Component of APMDP ; (iv) Chapter 4 deals with the Project Management related Technical Assistance Component; (v) Chapter 5 deals with the APMDP Financing Framework for investment support to ULBs under Component C; (vi) Chapter 6 deals with the implementation structure and management procedures related to APMDP; (vii) Chapter 7 deals with Governance and Accountability Action Plan (GAAP); and (viii) Chapter 8 deals with Monitoring & Evaluation. This Operations Manual (OM) which forms a part of the negotiations of the project with the World Bank and Department of Economic Affairs (DEA), Govt. of India as well as the project agreement, would be reviewed from time to time and adapted / modified as necessary during implementation, subject to concurrence of the Bank and approved as per the government orders by the Steering Committee. 7 APMDP Operations Manual Chapter 1 Component A: State Level Policy and Institutional Development Component State Level Policy and Institutional Development Reform Activities 2.1 The State Level Policy and Institutional Development Component of APMDP (US $ 9.2 million) is targeted at supporting state level urban reforms with Technical Assistance for Studies/activities covering the following: (a) AP Urban Academy (Cost US $ 4.5 million): to set up an urban training and knowledge centre at Hyderabad, mainly to serve as the center of sustained monitoring and analysis of urban development and management in AP and to provide training to urban sector officials in the state at both the ULB and state level, including elected representatives. It is envisaged that this academy would build upon its core staff at the beginning in order to fully deiver its objectives during the period of the project. Initially it would depend on panel of external experts to develop the knowledge base and deliver training supported by the project. This subcomponent includes an initial study and planning of the Academy, construction and initial operations and its support can be from other sub-components. The Academy would fall under the GoAP’s MAUD / own resources for future on-going operations. An indicative Memorandum of Association (MoA) is annexed as Annexure-23 for the academy as the State Institute of Urban Management (SIUM) proposed as an autonomous institute functioning under a society registered under the AP Societies Registration Act, 2001. (b) Urban Policy and Finance TA (Cost US $ 2.7 million): will support key policy studies, workshops, training, and associated computer equipments, networking, preparation and engagement of technical assistants on a regular basis for Financial and Technical Management Information Systems, to improve the urban planning framework, urban finance framework, monitoring, evaluation, and support of urban and ULB performance development. The e-Suvidha applications with suitable improvements, modifications and support from this project may be utilized for delivery of better citizen services and administrative monitoring. This will include: (i) review of existing planning rules in the state and drafting a new act to simplify land use planning processes, increased devolutions to the ULBs; (ii) review of intergovernmental fiscal structure and rules for ULB finances and recommending revisions to improve the capacity, accountability and performance incentives of ULBs; and (iii) review of options to improve urban development financing including the role of market-based financing and APUIF, strengthening of the latter, and preparation of a Public Private Partnership (PPP) framework for urban sector. ( (c) Preparation of Urban Poverty Alleviation Program (Cost US$1.5 million), to implement GoAP’s Mission for Elimination of Poverty in Municipal Areas (MEPMA), mainly through the support for job training, microfinance, self-help groups, and poverty alleviation support capacity building at ULBs. (d) Development of PPP framework and subprojects (cost US$0.5 m). GoAP has established an enabling legal framework for public-private partnership for infrastructure, and a PPP cell at the state level. The project would support further development and implementation of the framework through the establishment guidelines and benchmarks for local PPPs as well as innovative pilot PPP schemes for ULBs possibly for water supply and energy 8 APMDP Operations Manual conservation, some of which can be financed under the project. No procurement of PPP will be done unless specifically agreed by the Bank. 2.2 Institutional Responsibility The Municipal Strengthening Unit (MSU) in CDMA office will oversee the State Level Policy and Institutional Development Component in collaboration with APUIF, MEPMA and DTCP and other departments of GoAP as necessary. The MSU will be assisted by a Technical Support Service Consultant (Institutional Consultant on regular basis), who shall be responsible for: 1. Identification of the Scope of all Sub-Components/Activities in discussion with the concerned. 2. Preparation of Terms of Reference for all the Sub-Components/Activities under the State Level Policy and Institutional Development, assisting MSU in working out the Deliverables. 3. Facilitation for Studies/Activities undertaken by Consultants. 4. Organization of Workshops/Seminars/Study Tours/Field Visits, etc. 5. Assisting MSU in the Maintenance of these Accounts Sub-Component-wise 6. Quality Assurance for the Deliverables 7. Assisting MSU in reporting to the Government/World Bank 8. Publication and Dissemination of Reports 2.3 Staffing of AP Urban Academy / State Institute of Urban Management (SIUM) The following basic minimal staff at the AP Urban Academy would be funded initially by the project for its duration with remunerations and allowances as in Annexure-19. Any additional staffing that may be required by the academy / institute as per the terms of the proposed draft MoA in Annexure 23 would be funded from its own funds: (1) Posts on deputation (on their own pay) (i) Director General one (ii) Executive Director one (iii) Additional Director one (iv) Assistant Director one (v) Head IT cell one (vi) Private Sec. to DG one (vii) Librarian one (viii) Accountant one (ix) Sr. Assistant two (x) Jr. Assistant one - Senior Post of IAS Junior post of IAS/equivalent AD cadre officer from Municipal Dept. Ass. Dir. Cadre from Municipal Dept. District officer rank with IT experience Secretarial Staff of equivalent rank Secretarial staff of experience Ministerial service employee of GoAP Ministerial service employee of GoAP Ministerial service employee of GoAP (2) Permanent Faculty Posts in SIUM (on UGC pay scale) (i) Professor (ii) Associate Professor (iii) Assistant Professor - three one three - asper qualification in Annexure-23 -do-do- 9 APMDP Operations Manual (3) Support Staff on Contract (as per remuneration in Annexure-19) (i) Stenographer and PS (ii) Typist and PA (iii) Data Entry Operator (iv) System Administrator (v) Training Assitants (vi) Attenders/Messengers (vii) Watchmen (viii) Staff Vehicle Drivers (ix) Receptionist/Tel. op. (x) Machine Operator (xi) Gardener cum sweeper (xii) Draughtsman - two (for DG & ED) two (for DG & ED) eight (for IT cell/Admn. /Training cells) one (for IT cell) three (for Training cell) four two eight one one four one The constitution and membership of the society for State Institute of Urban Management requisited under the AP Society Registration Act, 2001 and of the Governing Council are indicated in the draft Memorandum of Agreement (MoA) in Annexure-23. The Governing Council shall formulate/ cause to be formulated the bye-laws of the institute for its approval. The institute apart from being funded initially for its core staff during the project period under APMDP would also have other source of funds as in the MoA. The institute would also conduct trainings through domain specialists as resource persons on piece-rate contract basis. The support to the permanent faculty would largely be built upon and funded from the project/consultancies handled by the institute. 2.4 Contribution of FMIS Cell at MSU and ULBs with sub-projects At MSU Level: (a) Finance Manager (on deputation) (b) FMIS Coordinator (on individual consultant) (c) Technical Infrastructure Analyst (on individual consultant) (d) Municipal Accounting and Financial Assistants (3 nos on outsourcing) (e) Accounting and data – entry assistants (3 nos on outsourcing) At each ULB Level with APMDP sub-projects: (a) Municipal Accounting and Financial Assistant (MAFA) (1 no. on outsourcing) (b) Technical infrastructure assistant (1 no. on outsourcing) The above team at ULB level shall contribute the FMIS cell at the municipality and will report directly to the Municipal Commissioner. The consultants / assistants who shall report to the Municipal Commissioner and assist him in the Project Monitoring would fall under the overall administrative supervision of the CDMA / PD, MSU of APMDP through Finance Manager for FMIS coordination and would be reimbursed under project costs. The MAFA will work with Accounting Staff within each municipality and carry out the following tasks: (1) Preparation and Maintenance of accounts pertaining to the releases made from the projects and their expenditure. 10 APMDP Operations Manual (2) Maintain all the relevant project related account books like Cash Book, check issue register, payment register, Bank Statement Register and vouchers etc. (3) Submit daily income and expenditure statement (4) Monthly reconciliation of accounts with Banks (5) Submission of accounting and financial information to the Project Office as and when required. (6) Any other accounting task as assigned by MSU. The technical infrastructure assistant within the FMIS cell within each municipality shall also report to the Municipal Commissioner for technical update of data required in FMIS. He will also fall under the overall administrative supervision of the CDMA / PD of APMDP through Finance Manager and technical using of MSU and work in close coordination with the technical and engineering staff within each municipality to collect and maintain the required works records and data for monitoring in FMIS. He should carry out the following tasks: (1) Maintain works progress register with reference to the verified MBs, Contract documents, (2) Maintain Assests Register. (3) Reporting to the Project Office on Physical progress of work and inform about deviations in the Work execution. (4) Maintain quality control certification information with respect to execution of works. (5) Prepare and maintain the status of procurement related information at ULB (6) Coordinate with the Financial and Accounting specialist to verify the payments made with respect to the works progress. As all the funds of the project are designed to flow first from the GoAP budget to the PD Account of CDMA before being transferred for project component-C to the APUIF, additional assistance to the Disbursement Analyst in MSU and to the DDO of the CDMA office shall be provided for reporting FMIS data to MSU in the form of two MAFA (1 each to DA and DDO) and two Accountants / Data Entry Operators (1 each to DA and DDO) on outsourcing contract for the project period. In addition to report FMIS data on regular basis to MSU, 1 MAFA and 1 Data Entry Operator / Accountant shall be provided to each Implementing Agency. 2.5 Procurement Procedures MSU shall be responsible for handholding of procurement at ULBs for the Project Component C and procurements in the other components. Key areas being: Maintaining and ensuring plan as agreed with the World Bank 11 APMDP Operations Manual Handholding ULBs for procurement of works and ensuring all Bank requirements have been met. Carrying out all other procurements during the project. Facilitating World Bank review (prior and post) and replying to Bank queries The procurement procedures for procurement related to aforesaid technical assistance activities shall be as per Bank procurement guidelines and per the procurement framework / procedures described in Annexure 1. 12 APMDP Operations Manual Chapter 2 Component B: Capacity Enhancement Component 3.1 This component (US $ 14 million) addresses the need for improved municipal management by institutionalizing the training and introducing a certification system for senior government and municipal managers and functionaries. It also addresses the needs of community / stakeholder groups to better manage their interface with local government. It also addressees the skill development needs of the elected representatives of the local bodies. The component also includes the element of skills transfer at the ULB level to enable proper preparation, processing, operation and maintenance of sub-projects. (a) GIS Mapping and Spatial Planning (US$ 4.0 million) will prepare new GIS base mapping including property and Utility mapping and General Town Plans for about 30ULBs whose plans are lacking or badly out of date, with full participation of local authorities and residents. The already existing GIS maps under APUSP shall be utilized and further improved in addition to GIS capacity development in all the newly selected ULBs. This sub-component shall include consultancies for comprehensive GIS module designing, implementation and integration with relevant e-Suvidha modules. The technical assistance in terms of hiring of professional services, equipments, networking, specific trainings, etc. shall be included and procured as per the relevant methods in Annexure - 1. (b) Capacity building (US$10.0 million): will include (i) training of staff at local and state levels as well as elected representatives at ULBs, and (ii) design and management of ULB financial and institutional strengthening programs. The subcomponent is based on a ULB capacity building needs assessment (CENA document prepared by CGG) in 2003, which will be updated and adjusted in consultation with all ULBs by incorporating midcourse corrections whenever and wherever necessary, and coordinated by the Capacity Enhancement Specialist at MSU. In-depth TA in terms of equipments, professional and support services engagement on hiring, logistics, etc. for design and management of ULB strengthening program would be provided to ULBs which participate in Urban Infrastructure sub-loan component funding . For regular training programmes as a short term focus, the training program will be delivered in the form of classroom learning in training institutions, workshops, seminars or by visiting trainers, on-the-job training, and study visits within the country or abroad including Training of Trainers (TOT), identifying individual trainers and institutions and compiling and preparing the training material. In the long term the capacity needs shall be addressed through Academic and Professional Institutions which have experience in formulating and conducting the training programmes of the government in general and local self governments in particular aimed at improving Urban Management. Upon the institutionalization of the Urban Academy the trainings at the academy and other support would be from this component. Apart from the above support to the training programmes at all ULBs, the capacity building component also supports specific initiatives including logistics, technical assistance, support to bridge the institutional, social, environmental, O&M gaps, etc. to improve and build capacity at the ULBs where the works are taken up in the project to build works related capacity as per the approved DPRs by the Project Appraisal Committee / Steering Committee. The training will cover three different types of subjects and trainees: 13 APMDP Operations Manual (a) Professionalization of urban management through professional certification programs for ULB specialist staff in: financial management, public health management, municipal and environmental engineering, social development and anti-poverty support, urban planning and building regulation – provided through recognized specialist institutions; (b) Training in Local Governance and Urban Management for elected officials and senior ULB staff (c) Training in various operational skills and systems such as accounting, physical facility operation, public information management, etc. (d) general skill developments, etc 3.2 A Capacity Enhancement Cell (CEC) forms a part of MSU which will operationalise and implement Professionalization of Urban Management Capacity framework to institutionalize, mainstream and guide institutional as well as human resource capacity enhancement for urban management in the State. This cell will be responsible for implementing a host of training and skill development programmers through the Consultants procured for implementing this component. The CEC would be responsible for: assisting in the development of a state-level Urban Management Capacity (UMC) framework to institutionalize, mainstream and guide institutional as well as human resource capacity enhancement for urban management in the state; establishing roaster of training institutions within and outside the state specializing in select functional areas from whom State, ULB and related organizations can receive training; designing and implementing information system for monitoring and evaluation of urban sector institutional and human resource Capacity Enhancement activities in the State. Institutional Responsibility 3.3 The Capacity Enhancement Cell will be mainly responsible for moving the agenda on Capacity Enhancement in coordination with other members of MSU. CDMA will oversee the implementation of Capacity Enhancement. The cell shall comprise of the following personnel: (a) Capacity Enhancement Specialist (on deputation as per existing GO) (b) Training Cell Coordinator (2 nos) (as individual consultant) (for State / Regional /District level trainings) (one shall be transferred to SIUM / academy upon its commissioning) (c) Training Assistants (8 nos.) for curriculam development, documentation, reprography, logistics including study visits, etc and general support (on outsourcing contract) (these shall be transferred upon project completion or upon its commissioning to the academy) (d) Poverty Alleviation Specialist (1 no.) (at MEPMA) (on outsourcing) (e) Urban GIS specialists (2 nos at DTCP and 1 no.at e-Suvidha), (as individual consultants) (f) Other domain specialists (on piece-rate contract as resource persons / expert / eminent faculty) and work related specialists including Urban Infrastructure Specialist at ULB or MSU level as per the approved DPRs. 14 APMDP Operations Manual Capacity Enhancement Specialist: The Capacity Enhancement Cell will be headed by the Capacity Enhancement Specialist and he will be involved the implementation of Capacity Building activities undertaken in the Project. He shall coordinate and liaison the project requirements with regard to capacity building activities and funds between MSU and the Academy / SIUM, other institutes, regions, ULBs. He shall also take lead and initiative to fulfill the project related objectives with regard to sub-project related trainings and capacity building and also carry out on behalf of MSU all other general activities related to the subject of capacity building. Training Cell Coordinator: The duties of the Training coordinator are as follows: Coordinates with ULBs for scheduling training programmes and documentation Coordination activities with reputed institutions for scheduling faculty for training (Invitation, Logistics and payments),dissemination of training related information,monitoring and reporting of the work of training assistants to the CES. Scheduling of classes, based on availability of classrooms, equipment, and instructors. Coordinate with faculty for development of curricula & make training material available to the trainees Perform other duties as assigned by CDMA / Project Director, APMDP Training Assistants: The duties of the Training Assistants are as follows: To help the training cell coordinator in day- to- day operations. Maintenance of office records of training programmes and reporting the same to the Training Coordinator. Assist the Training Cell Coordinator in the preparation of training material Arrangement of logistics and accommodation to trainees Arrangement of training aids, classrooms and other infrastructure for conduct for training. Any other duties as assigned by CDMA / PD, APMDP Poverty Alleviation Specialist: Interact with the ULBs, other government departments, external agencies, NGOs with regard to development, implementation of poverty alleviation schemes and programmes. Any other duties as assigned by the CDMA / PD,APMDP. Urban GIS Specialist: Meet with users to define data needs, project requirements, required outputs, or to develop applications. 15 APMDP Operations Manual Conduct Research to locate and obtain existing databases. Gather, analyze, and integrate spatial data from staff and determine how best the information can be displayed using GIS. Preparation of GIS related DPRs, tenders and RFPs. Guide the ULBs in the implementation of GIS application Providing capacity building support to the ULBs and MSU in terms of identifying needs, preparing training material training of trainers and exchange visits, etc. Any other duties as assigned by the CDMA / PD,APMDP. Urban Infrastructure Specialist: Provide guidance and hands-on support to the ULBs and MSU on establishing effective and efficient monitoring, quality control, and evaluation systems with respect to Urban Infrastructure. Perform regular financial, technical, and progress reviews of the on-going program implementation. Make regular and as needed visits to the field to observe and review implementation, and write back to office reports highlighting progress and issues along with agreed actions; Interact with clients, consultants, contractors and beneficiaries to provide technical guidance and support in implementation; Document various aspects of the projects/programs/activities for dissemination and sharing purposes; Any other duties as assigned by the CDMA / PD,APMDP. Procurement Procedures 3.4 The procurement procedures for procurement related to aforesaid technical assistance activities shall be as per Bank procurement guidelines and per the procurement framework / procedures described in Annexure 1. 16 APMDP Operations Manual Chapter 3 Component C: Urban Infrastructure Investment Component 4.1 This part of the manual deals with framework related to investment support for urban sub-projects and covers initial sub-project formulation and proposals, their review, appraisal and sanction processes and subsequent procurement and implementation under the Project The guidelines include following: (i) (ii) (iii) (iv) (v) (vi) eligibility criteria to access funds, sub-project proposal from ULBs eligible sub-project prioritization activity, preparation of subproject documents-Reform Action Plan and Infrastructure Improvement Plan; sub-project appraisal by Appraisal Committee/line departments sub-project implementation Eligibility criteria to access funds 4.2 The eligibility criteria for ULBs to access funds under APMDP for investment support are mentioned below. Access Criteria for ULBs Access Criteria ULB has an operating surplus and has borrowing / investment capacity to meet debt service obligations and O&M expenses, after accounting for existing debt service and other operating expenditures. Compliance to be assessed based on Finalized accounts of last 3 Financial Years and upon consideration of reduction of burden of salaries upon ULB funds as per the recent GO. Audit of municipal accounts is satisfactory (with no significant unresolved audit issues of the earlier years) and up to date. Accounts to have been finalized and audited within 6 months of close of FY. For the first year projects the agreed audit completion with the World Bank is 2007-08 before issue of work order. Formal agreement to carry out an action plan for municipal reform, financial and service performance improvement satisfactory to CDMA, including but not limited to capacity to operate and maintain the facilities built with the sub-loan / sub-grant. Formal agreement to carry out an action plan for capacity enhancement, including ULB organization, enhancement of ULB own revenues / taxes / tariffs, installation of key staff, etc. Reform Action Plan Capacity Enhancement Action Plan (CEAP) 4.3 Framework for Sub-Project Identification, preparation, sanction and implementation The overall flowchart for the framework is presented in Annexure 2. The flowchart specifies that although the work tender procurement process can be initiated after the administrative and technical sanction but the work order to the approved contractor cannot be issued until the completion of all audit requirements and agreement of funds with APUIF. 17 APMDP Operations Manual Nature and Eligibility of Sub-projects All urban sector sub-projects will be eligible including city roads, sewerage, water supply, sanitation, solid waste management, street lighting, energy efficiency improvement, and community centers mainly to host self-help groups and job training for the poor, subject to the framework presented below: (i) The subprojects will be lumpy investments for city-wide impacts, costing at least Rs 5 crore (about $1.1 million) in general. The exceptions will be those for: Solid waste management, which require relatively small investments individually but aggregate to a sizable amount state-wide and has been mandated by the 11th State Finance Commission. In such cases, the investments shall be channeled to achieve comprehensive improvements at ULB level covering: (a) Primary Collection; (b) Transportation; (c) Treatment; and (d) Disposal. Based on an overall plan so developed, the funding from the Project can contribute to implement a portion of such a plan along with other finances available to GoAP, or to the full scale plan. The cluster based approach followed by GoAP will also be supported under the project. Civic centers mainly for job training and SHG for the poor, as one of the initial investments to implement MEPMA; Energy or operational efficiency improvements; and Sub-projects were appraised in 2005 for initial implementation. A batch of small subprojects prepared and appraised when the project’s proposed focus was on improving conditions in poor areas. While many of the appraised subprojects have already been completed, some remain to be implemented. (ii) Economic evaluation, which needs to demonstrate economic rate of return of over 12% for subprojects estimated to cost over Rs 15 crore or cost-effectiveness in cases where economic benefits are not quantifiable. (iii) (iv) Adequate environmental and social safeguard measures, consistent with the agreed Social and Environment Management Framework (SEMF) / Manuals for APMDP. Adequate operations and financing plan. Note: Throughout the sub-project preparation, approval and implementation process steps as outlined below, the social and environment assessments, mitigation plans and implementation of social and environment safeguard measures shall be as per SEMF / Social & Env. manuals agreed for APMDP. The same are separate documents and need to be additionally referred to besides this OM. 4.3.1 Step-1: Identifying and Proposing Sub-Projects by ULBs The ULBs have to identify and propose their infrastructure improvement needs in the municipalities along with related institutional capacities and reforms required for sustainable planning, implementation and O&M of that infrastructure. The preparation of the project for infrastructure and Municipal Reforms has to be carried out through a participatory and consultative process to ensure ownership and greater involvement of all stakeholders including poor and civil society. This shall happen through setting up of a 18 APMDP Operations Manual Municipal Development Committee (MDC, for strategic guidance) at the ULB level, and two working groups to assist MDC in formulating the plans at the ULB level. The MDC will have to have representation from both political and administrative side, along with representation from the poor. Two Working Groups have to be constituted in such a way to ensure that they represent various stakeholders and particularly the civil society organizations and the poor. Details of composition of the MDC and the working groups and their detailed functions are indicated in Annexure 3. The key functions of these groups are the following: MDC MDC will be responsible to the following: a) Provide policy and strategic inputs for Council decision making; b) Constitute committees and groups for specific works c) Oversee, guide and coordinate the work of Working groups d) Review, integrate and approve reports and proposals of working groups e) Oversee, review and monitor implementation of development plans f) Coordinate city-wide planning with various sections for the municipality. Working Groups Working Group 1 (WG-1) on Municipal Reforms and Capacity Enhancement: responsible for reforms and municipal performance improvement. Working Group 2 (WG-2) on Infrastructure Improvements: responsible for identifying priority infrastructure investments in the city for which investment support is being sought in under APMDP. The Working Groups will prepare an Initial Project Proposal consisting of two plans and as below and submit to MDC. Initial Project Proposal: The Working Groups will prepare an Initial Project Proposal consisting of three plans as stated below and submit to MDC for review and approval. Initial Project Proposal: a) Preliminary Municipal Reform Action Plan (MRAP) b) Preliminary Capacity Enhancement Action Plan (CEAP) c) Preliminary Infrastructure Improvement Plan (IIP) The process for preparation of IIP and procedure for function of MDC and Working Groups is indicated in Annexure -3 (A) 19 APMDP Operations Manual Municipal Reforms Action Plan The WG-1 will prepare MRAP and CEAP The municipal reforms already initiated by the ULBs are in different stages of implementation. Therefore, under the Municipal Reforms part, the ULBs shall prepare plans consisting of any additional support covering the following broad reform agenda as Municipal Reforms Action Plan (MRAP). MRAP shall be prepared as indicated in Annexure3(B). Adoption of Accrual based Double entry Accounting System in ULBs i. ii. iii. iv. v. vi. vii. Reforms in taxes and non-taxes to improve coverage and collection of taxes and nontaxes and improvement of finances. Levy of reasonable user charges. Expenditure management Systems improvement. Overall Municipal capacity enhancement including human resources development and general training requirements as available from Capacity Enhancement Needs Assessment (CENA) prepared by the MSU need to be updated and revised with inputs from ULBs. Empowerment of urban poor. Community Interface improvement and Public grievances redressal mechanism Capacity Enhancement Action Plan:Under the Capacity Enhancement Action Plan (CEAP), the ULBs will prepare an assessment of institutional options for service delivery, related capacity building measures, O&M plans and Financial Improvement Plans. The CEAP will include detailed plans to build this capacity in terms of i) the preferred institutional option for maintenance of the infrastructure (self / outsourcing), if self – the structure of the unit; ii) the TA /capacity building measures for this option; iii) the institutional strengthening measures for O&M such as procuring additional maintenance equipment / vehicles, facilities or establishing laboratories etc; iv) associated costs, revenue mobilization plans including present and proposed tariffs, with proposed cross subsidies if any. The CEAP shall be prepared as indicated in Annexure 3(C ). Preparation of IPP:The WG 2 shall assess the service levels in the municipality discuss in detail the town wide needs of infrastructure / service improvement needs in a consultative manner and propose the priority areas of the ULBs for service improvement along with indicative requirement of investments. This shall be captured under an Infrastructure Improvement Plan. The Working Groups together will prepare an Initial Project Proposal (IPP) consisting of the aforesaid three Action Plans. MDC will review the IPP and clears it. Following this, the ULBs will obtain council Resolution on this IPP. After this, the commissioner shall forward the IPP (as per the format in Annexure 4) to MSU for consideration under the Project. 20 APMDP Operations Manual The MDC and the two Working Groups continue to remain in existence at the ULB throughout till they are reconstituted at the time of every cycle of MPDP project duly assessing the performance of the committees. 4.3.2 Step-2: Review and Assessment of Initial Project Proposals by MSU / APUIFC / PHED MSU compiles all the IPPs received from the ULBs regularly, evaluates them based on the criteria outlined above regarding ULB and sub-project eligibility, their level of readiness for implementation, and short-lists the sub-projects eligible for financing out of the IPPs submitted by the ULBs. In parallel, the Municipal Reform Action Plan (MRAP) and Capacity Enhancement Action Plan (CEAP) would also be evaluated. All this would be led by MSU in collaboration with APUIF and PHED. Based on this assessment, MSU will prepare an Initial Screening Report (ISR) (as per the format in Annex 5) including the updated audit status and put it up to the Project Appraisal Committee for approval. The subprojects from the qualifying IPPs would join the pipeline of sub-projects under the Project and the CEC will formulate a yearly Training and Capacity Building Plan at the state level. After its screening and approval by the Steering Committee, MSU would inform the ULB about the clearance of sub-projects / reform action plans / capacity enhancement action plans for implementation under the Project, along with approved technical assistance under the project, with any suggestions for improvement in the Plans and with a request to prepare full project documents. CDMA / MSU would enter into a Memorandum of Agreement (MoA) with the ULB at this stage capturing the aforesaid by way of a formal agreement (as per format in Annexure-6). 4.3.3 Step-3: Preparation and Submission of subproject documents In this step, the ULBs prepare the detailed subproject documents in order to move ahead for implementation. There are three main documents required at this stage: i) ii) iii) Detailed Project Report (DPR) and Final Municipal Reform Action Plan Final Capacity Enhancement Action Plan (CEAP) for the proposed infrastructure/services. The working Groups 1 and 2 respectively would manage preparation of these documents and be the focal points during appraisal by the MSU. DPR DPR preparation shall be preceded by a Technical Feasibility Analysis, which would analyze the feasibility of different technical alternatives, suggested alternative, financial and 21 APMDP Operations Manual economic assessments, Social and Environmental Screening for the preferred alternative. Guidelines on these issues are given in Annexure-7. The DPRs shall include, for the preferred option, detailed designs, detailed engineering drawings, detailed cost estimates, bid documents, procurement and implementation plans, social and environmental assessments, economic and financial assessments. MRAP The MRAP would outline the key institutional and financial reforms (improvement in tax revenues, collection efficiencies, new tariffs, etc.) that the ULB commits to undertake along with year-wise indicators that would be achieved along-side sub-project implementation. CEAP It is necessary that the infrastructure proposed shall be maintained efficiently and sustainably so that the service improvements do happen within the municipalities and the citizen do benefit for the long term. For this to happen, along with the proposed infrastructure, the ULBs have to improve their institutional capacity and finances for operation and maintenance and service improvement of the proposed services. Therefore, in parallel with the DPRs, under the Capacity Enhancement Action Plan (CEAP), the ULBs will prepare an assessment of institutional options for service delivery, related capacity building measures, O&M plans and Financial Improvement Plans. The CEAP will include detailed plans to build this capacity in terms of i) the preferred institutional option for maintenance of the infrastructure (self / outsourcing), if self – the structure of the unit; ii) the TA /capacity building measures for this option; iii) the institutional strengthening measures for O&M such as procuring additional maintenance equipment / vehicles, facilities or establishing laboratories etc; iv) associated costs, revenue mobilization plans including present and proposed tariffs, with proposed cross subsidies if any. Guidelines A set of simplified guidelines is prepared (Annex-7) for the purpose of preparation of subprojects, comprehensively covering technical, environmental, social, financial and institutional aspects; which need to be covered under the above two documents. Submission to MSU / APUIF The ULBs shall submit to MSU / CDMA & APUIF, the following: A) DPR consisting of the following along with forwarding notes: 1. i) preferred option with justification; ii) the difference that the subproject makes in terms of service levels (base line vs. proposed in various phases) with respect to standard indicators ii) detailed designs, drawings, technical specification and detailed cost estimates; (iii) Environmental and Social Screening, Resettlement Action Plans and Environmental Management Plans (where required) for subprojects as required under SEMF for APMDP; (iv) economic assessment as per the guidelines; (iv) Contract Packaging, procurement plans; (v) project execution 22 APMDP Operations Manual schedules (Gantt Charts); (v) project cash flow schedules and financial assessments to establish ULB’s capacity; (vi) Operational plans of the proposed infrastructure (how the facilities would have to be operated to deliver the outputs as planned, in various planning phases); (vii) Conclusions regarding present financial position of the ULB, including a set of key financial indicators (operating surplus, debt servicing as a % of revenue / operating surplus, collection efficiency, etc.), as well as a clear action plan for improvement of finances over the medium term (5 years); (viii) A Financial and Operating Plan (FOP) for the ULB as a whole, including 10-15 year financial projections separately for both the operating and capital budgets (a capital investment plan), taking into account also the likely impact of the prioritized subproject proposed to be undertaken over the medium term. (ix) In case of water supply / sewerage sub-projects, a 10-year business plan for the water and sewerage operations of the ULB on a “stand-alone” basis, including financial projections of operating and capital budgets, tariff analysis under various scenarios, such that water supply and sewerage operations are able meet O&M expenses from user charges and begin to meet capital servicing as well over the medium term (3-4 years). B) Final Municipal Reform Action Plan (MRAP). C) Final CEAP in support of the proposals D) Council Resolution approving the sub-projects and request for sub-loan / sub-grant; E) Updated Project Proposal (Loan / Grant Application or updated IPP) with supporting financial data sheets / continuing compliance with access criteria. F) Other government approvals (Administrative sanction, technical sanctions, environment clearances, etc.) Monitoring of Preparation Quality and Process of preparation of these two documents would be monitored by CDMA (in collaboration with PHED and APUIF for all sub-projects and additionally with MEPMA for community centers) as part of its pre-appraisal process – by providing necessary TA support to the ULBs and through regular interaction, monitoring and site visits to the ULBs. PHED will have given its technical sanction for the project at this stage. MSU / CDMA reviews the proposals for compliance with safeguard policies, verifies the ULB's continued eligibility to access APMDP funds and gives clearance for taking up the sub projects. MSU / CDMA then also forward the proposals to APUIF for financial appraisal. 4.3.4 Step-4: Appraisal by the MSU / APUIF / PHED and sanction by PAC Appraisal process There is a Project Appraisal Committee (PAC) set up to clear the project appraisals and Sanction. 23 APMDP Operations Manual The committee shall be ultimately responsible for clearing the appraisal, from the angle of: (i) (ii) (iii) (iv) (v) (vi) Technical feasibility Planning designs as per standard Financial Assessments Social & Environmental Safeguards Institutional Capabilities Procurement and implementation planning The in-depth appraisal of sub-projects will be done by the following units for recommending to the PAC. The main areas of focus for appraisal in each case are as follows: a) Technical Appraisal: by PHED Selection and justification of preferred option at the conceptual stage Service levels – base line vs. those achievable in various phases Technical options and technologies, specifications, standards, quality control systems, cost estimates, Optimal rehabilitation of existing infrastructure and improving its efficiency; Service provision to the poor / low income areas, and its integration with the main network Economic evaluation, which needs to demonstrate economic rate of return of over 12% or cost-effectiveness in cases where economic benefits are not quantifiable. Contract packaging rationale, contractors’ availability and capacity Procurement and implementation planning, implementation constraints, material availability constraints Permissions from various authorities, Adequate O&M plan a) from the technical side – i.e., Operational plans of the proposed infrastructure in various phases; sensibility of the proposed plan; provisions made (such as bulk meters, energy efficiency measures, removal of distribution lines from trunk mains etc) to optimally maintain the infrastructure; b) from institutional capacity side - having necessary data base of networks; tools, plant, operators, staff, vehicles, laboratories, equipment etc. to maintain the infrastructure, c) from costing side – cost of O&M As part of this technical appraisal process by PHED, it would also accord technical sanction to the project. b) Financial Appraisal: by APUIF The financial sustainability shall be assessed based on 10-15 year financial projections for the ULB (also called the “Financial and Operating Plan”). Such a business / financial plan can be considered sustainable if: (i) The ULB has an operating surplus for at least two of past three years and also for each year of future financial projections; (ii) Annual debt servicing (including interest and principal repayments, as also existing debt + proposed additional borrowings) do not exceed 50% of such operating surplus in each of the projected years. While drawing up such projections, the following factors are important: 24 APMDP Operations Manual c) The financial projections to take into account both revenue as well as cost (capital _ O&M) impact of proposed sub-projects (whether funded by APMDP or by other sources / programs). For instance if it is a new sewerage system, then some additional revenues would accrue to the ULB due to new sewerage tariffs, etc. and on other hand, ULB would also incur additional O&M expenditures. One possible basis for projections of revenues and costs could be past ULB performance (over last 3-5 years). In addition, such projections can also take into account special revenue improvement measures (provided they are already underway at the ULB or about to be taken up) such as increasing assessed properties, regularizing connections, new taxes, tariffs being imposed, etc.; Initial steps of key revenue and cost related actions (such as having a tariff hike every 3 years, etc.) would need to be carried out before subproject and the subsequent steps captured as covenants as part of the sub-loan or grant agreements. While ULBs usually do not borrow on their own (except for the largest corporations), borrowings for capital expenditures are usually on their behalf by a state level entity (such APUIF) based on state government guarantee and such loans are repaid by GoAP through intercepts of state devolutions to ULBs. The same shall also be taken into account in the analyses as also other such intercepts for electricity dues, etc. The loan / grant mix proposed for financing of sub-project needs to be taken into account – if there is a higher grant component, then accordingly the sustainable financial capacity would also go up. All other areas: MSU with active involvement of CEC Process and quality of consultation by the Working Groups and MDC Consent by the Municipal Council Environmental and social safeguard measures consistent with Social and Environment Frameworks; and inclusion of required measures in the project documents Service provision to the Poor Proposed institutional option for O&M, Staffing, TA, capacity building and institutional development needs tariff levels and revenue mobilization plans based on cost of O&M, Service levels – base line vs. those achievable in various phases, as cleared through PHED, to be captured in the Monitoring system MSU would put up an appraisal note for approval of the Project Appraisal Committee in the format presented in Annexure-8. Sanction Process by Steering Committee After formal approval of appraisal by the PAC, the proposal will be put up for requisite administrative approvals of Steering Committee, based on which MSU / APUIF will inform the ULBs about the sanction based on the format in Annexure 9 for inviting the ULB for subloan funding agreement. Funding Agreement with the ULBs 25 APMDP Operations Manual After receiving the Sanction, ULBs will sign a Funding Agreement with APUIF, agreeing to implement the project as per standards and the Project requirements. Annexure-10 provides the format of this Funding Agreement. At this stage, ULB would also provide a council resolution as per format in sanction letter and also update / finalize the MRAP and CEAP. Preparation of bid documents Once the project is sanctioned and the Funding Agreement and MoU is signed, ULBs would prepare the necessary bid documents as per the contract package plan proposed with assistance of MSU, by incorporating all the technical measures, specifications, drawings, Bill of Quantities, measures required for implementing the Environmental Management Plans etc. The bid documents so prepared shall be submitted to MSU for clearance. MSU will vet these documents with the help of PHED and approve them. It has been agreed with the World Bank that for the first year sub-projects the bid-documents may be prepared and bidding process commenced after the technical sanction to save delay prior to the MoU and agreement with the APUIF for funding the ULB. However, in such case the work order cannot be issued without entering into agreement with the APUIf by the ULB and updating the audit requirements. World Bank’s No Objection The following documents shall be sent to the Bank for prior clearance. First two DPRs in every urban sub-sector, and subsequently for all sub-projects costing above US$ 5 million. Environmental Management Plans and Resettlement Action Plans as per SEMF for APMDP Procurement Documents as per prior-review thresholds identified in the Procurement Annex (Annexure 1). Preparing for implementation After the agreement is signed, the ULBs would initiate building capacities for Procurement and Implementation. The ULBs would also establish systems for public disclosure, and grievance redressal. 4.3.5 Step-5: Procurement Process Once the bid documents are cleared, ULBs, with support from MSU will initiate procurement as per the procedures given in Procurement Annex (Annexure 1) with support from MSU / PHED. MSU will closely monitor procurement process. The BER & contract award and final draft contract document will be confirmed by the MSU to ensure these comply with Bank regulations. The MSU shall develop a monitoring information system to track the procurements at MSU through its Procurement Specialist. Assessment of the agency’s capacity to implement procurement: i The procurement capacity assessment was done at two levels: MSU assessment of 26 APMDP Operations Manual capacity of various ULBs, and the Bank’s assessment of MSU capacity. The former assessment was done through questionnaires sent to all ULBs, followed by a workshop attended by ULB representatives. Through this assessment, it was agreed that the capacity of most ULBs needs to be developed in a structured manner before they can conduct their own procurements in line with the Bank requirements. It has been agreed between DMA and the Bank that during the first two years of implementation, (i) a procurement capacity building program (PCBP) will be carried out as a key subcomponent of the project; (ii) MSU will build capacity to support the procurements under various sub-projects with active involvement of the ULBs; and (iii) once the contract is signed by the ULB, MSU will provide close monitoring and support to ensure effective contract management. Contract management software should be developed for this purpose. ii The Bank conducted a capacity assessment of the MSU during pre-appraisal covering the organizational structure of MSU, existing processes and persons involved in sub-project identification, preparation, financial and technical sanctions, and those responsible for procurement and contract administration. The MSU currently relies upon the PHED Engineer in Chief’s office for technical appraisal, procurement, and monitoring. Given that there will be many sub-projects that will be appraised during the project duration; this capacity will be added to MSU to avoid any delays in evaluating DPRs and providing procurement and technical support to the ULBs. A core procurement team is being set up under the MSU for managing the project procurement and PCBP. This team will be led by two officers at the level of superintending engineer, who will report to the project director. There shall be one exclusive post of Executive Engineer and two exclusive posts of Dy. Executive Engineers (on deputation) meant and dedicated towards the work of procurement coordination at ULBs and MSU. They shall be at the MSU and shall report to the Procurement Specialist. iii One of the PHED superintending engineers deputed to MSU has been designated as Procurement Specialist (Goods and Works) since most procurement is that of works under infrastructure sub-projects. The second Superintending Engineer will be responsible for hiring of consultants, and monitoring the progress of the contract implementation, including the collection of monthly progress reports from the ULBs based on which funds will be released to the ULBs. The existing posts at MSU of Dy. EEs and AEs shall continue with the SE. She/He will also be responsible for establishing a complaint monitoring system which will capture all complaints received either by the PMU or by the ULBs. The complaint redressal will be done in coordination with the Procurement Specialist or ULB commissioner as the case may be. This system will be monitored by the Project Director once every month. iv During the first two years the responsibility of the procurement manager and his team will be to: Prepare and maintain the procurement plan. Manage the design of the procurement packages for the approved DPRs in consultation with the DPR design consultants and ULB (Municipal Engineer). Initiate the procurement for various packages as per the agreed procurement procedures (preparation of tender notice and advertisement, bidding documents, receiving bids, bid evaluation and recommendation for award). Lead the bid evaluation committees which will include appropriate ULB representatives. The evaluation committee will make its recommendation for award 27 APMDP Operations Manual to the tender committee, which will comprise ULB chairperson or commissioner, Project Director, Chief Engineer and Superintending Engineer. v After the initial two year period, or sooner if it is judged that sufficient capacity for procurement has been developed, the leading role will be turned over to the ULBs and the MSU procurement team will turn to a supporting role in the above steps. From the beginning, ULBs will exercise their legal authority as owners of the subprojects. ULB commissioner will issue the letter of acceptance (LOA) after the contract award recommendation is approved by the tender committee, sign the contract, and issue the work order for commencement of the works. The procurement specialist will monitor and ensure that the LOA and that the contract is signed within specified time limits, and the contract implementation is supervised and managed properly. vi A key challenge during implementation will be balancing the accountability and risks in ULB procurement. The issue is likely to diminish over time, but to remain at least for some (smaller) ULBs even in advanced stages of implementation. In the steady state, MSU will be responsible for managerial oversight and review, and drive reforms at the ULB level. In the initial 24 months, as ULB capacity needs to be built, MSU will play a leading role with active involvement of the ULB at each stage of procurement. While MSU will retain the right for final clearance throughout the project, the roles and responsibilities of the ULBs will increase once they are trained in Bank procurement procedures and once their capacities have been assessed. Procurement capacity building program: Since the objective of the project is to build ULB capacities, extensive procurement capacity building program will be implemented by the MSU to bring ULBs’ capacity to conduct its own procurement. This program will first target ULBs with subprojects to be implemented immediately after the project start, and other ULBs will be added subsequently. i MSU will hire a consulting firm who will design and deliver the program. The consultant will design the training modules to cater to ULB managers (Commissioners) focused on monitoring and coordination, ULB Engineers (focused on execution) and ULB Accountants. A plan for training these in all ULBs with initial subprojects will be implemented in the first two years of implementation. The consultant will report to the Project Director who will measure the effectiveness of the training, identify gaps and help prepare gap closure plans. Under the PCBP, workshops will be organized periodically for sharing best practices. After the first two years, the consultant’s training contract may be extended or the MSU core procurement team may take over the large part of the training. Use of eProcurement: i AP has a state wide eProcurement system which is presently used for government funded contracts. This system is being assessed by the World Bank and is expected to be piloted by end 2009. APMDP will also participate in the pilot and the procurement team of MSU will undergo training for eProcurement. Upon successful completion of the pilot (monitored by the Bank), the system is expected to be used for all NCB works contracts. The e-Procurement system will be critical in providing inputs to the procurement monitoring indicators described above. 28 APMDP Operations Manual Procurement monitoring and audit: i Given the large number of entities involved, there is a need for an effective monitoring system to ensure proper conduct of procurement. For this purpose, an initial set of seven indicators has been proposed which will be monitored on a monthly basis at the level of the CDMA and Project Director. These indicators are: number of contractors applied/participated/qualified, tender premiums (lowest bid price over estimate), bid and contract completion times vs. planned time, number of tenders rebid, number of contracts with insufficient bids, and extension of bid validity. ii All procurement transactions under the project will be subject to procurement audit. This is planned to be included in the scope of the audit conducted by the auditor general and the revisions in the ToR are being finalized. 4.3.6. Step-6: Implementation After procurement, sub-project implementation would start in various ULBs. The ULBs would report sub-project progress regularly to MSU and APUIF, as per the proceduresand in formats provided by MSU and / or APUIF from time to time. Necessary capacity building measures under Component B would be implemented by MSU, strategically intervening different stages of project implementation. The following issues are monitored by the MSU: a) b) c) d) e) physical and financial progress contract management adequacy of public disclosure, consultation grievance redressal Achievement of outputs and outcomes Third Party Quality Supervision consultants would be hired for all investments by APUIF to help monitor and supervise the quality and progress of subprojects jointly with MSU. Quality Certification from the ULB/Supervision consultant would be necessary before releasing the payments to contractors. The ULBs and MSU/CDMA shall ensure compliance with the required environmental and social safeguards in sub-project, as per the agreed procedures in the EMPs or RAPs. Procurement Types and ProcessIt was agreed that during the first two years of implementation, procurement capacity building program (PCBP), as a part of the CEAP, should be one of the focus areas of the project to build capacity of ULBs in a structured manner. In the interim, to ensure that implementation activities are not affected, MSU will build capacity to support the procurements under various sub-projects with active involvement of the ULBs. Once the contract is signed by the ULB, the role of MSU will be to handhold them to ensure effective contract management and monitoring. i Given the large number of entities involved, there is also a need for an effective monitoring system to ensure proper conduct of procurement. For this purpose, an initial set 29 APMDP Operations Manual of seven indicators has been proposed which will be monitored on a monthly basis at the level of the CDMA and Project Director. These indicators are: number of contractors applied/participated/qualified, tender premiums (lowest bid price over estimate), bid and contract completion times vs. planned time, number of tenders rebid, number of contracts with insufficient bids, and extension of bid validity. For further details Refer to the Procurement Annex (Annexure 1). 4.4 Municipal Financial/Reform Compliance: The ULB shall submit to APUIF through MSU quarterly statements of municipal fiscal status and financial performance, in the format provided in Annex 18 and / or which may be revised from time to time. The ULB shall make such submissions through the term of the loan. Social and Environmental Compliance 4.5 The ULBs and MSU/CDMA shall ensure compliance with the required environmental and social safeguards in sub-project and DPR preparation, procurement and execution processes as specified in the Social and Environmental Manuals / SEMF for APMDP for ULBs and for Project Managers, respectively. Operational Status of Ongoing Works 4.6 Under the APURMSP now renamed as APMDP, upon negotiations in June 2005, a total of 1157 works in about 80 ULBs were sanctioned for an amount of Rs. 303 crores (approximately USD 60 million) out of which 505 works for Rs. 125 crores (approximately USD 25 million) were grounded. Out of this 382 works for Rs. 88 crores (approx. USD 18 million) were completed with the balance under various stages of progress and retendering due to cost escalation. The government had released an amount of Rs. 147.63 crores (USD 30 million approx.) out of which an expenditure of Rs. 105 crores (approx. USD 21 million) has been incurred until 2008-09 with expenditure in 2008-09 about Rs. 18 crores (USD 4 million approx.). The works which could not be grounded, of whose agreements were pending at ULB or APUFIDC or which were held up for more than one month without causing inconvenience to public were permitted for dropping as per the Government Memo No. 5121/UBS/2008, MA & UD (UBS) Department, dated 25th March, 2008 (copy in Annexure-12). During the reappraisal, the World Bank has indicated its difficulty to fund by reimbursements the expenditure incurred prior to one year from the project sign-off. This already incurred expenditure by the government (which thus would not be reimbursed) would be compensated by adjusting the same through increase in the loan component in the APMDP detailed cost table 1, if agreed during the negotiations. The works which were commenced or under retendering as per the original appraisal by the World Bank may be continued and completed and these would be reimbursed. During appraisal the World Bank indicated to complete the audit update requirements for these ULBs where the works are ongoing in order for this expenditure to be eligible for reimbursements. The MA & UD department insisted that the building of capacity for accounting in the first year at many ULBs would be necessary and hence the requirement of audit completed and updated may be kept for future line of sub-projects and not for the ongoing projects. The matter may be discussed and resolved during negotiations. 30 APMDP Operations Manual Chapter 4 Component D: Project Management Technical Assistance 5.1 The Project Management Component accounts for US$ 10.02 million (US$ 9.02 million from IBRD) under the APMDP. This component includes Sub-project Technical Assistance aimed at providing comprehensive technical assistance, accessible to all ULBs on a loan / grant basis, to address the low level of ULBs' capacity in formulation, design and implementation of sub-projects. PDAF would be managed by MSU / CDMA. 5.2 Eligible Components and Projects (a) Project Management (cost US$ 5.0 mn) support for GoAP’s state level agencies responsible for implementing or coordinating APMDP. This includes financing a portion of the incremental operating expenses of state level agencies involved in day-to-day management of the project, primarily the CDMA-MSU and APUIF. This will also include finance consultant services and systems for Monitoring and Evaluation (detailed overview of M&E is provided in Chapter 8), oversight and operational management, various audits (procurement, FM, technical, etc.) and implementation of GAAP (detailed overview of GAAP is provided in Chapter 7) and other general expenditures including in implementation of SEAMF, SECAP and the provisions of Social and Environment Manuals that would be incurred as per the relevant procurement guidelines of Annexure-1. (b) Subproject preparation and implementation (cost US$ 17.1 mn): This technical assistance facility is aimed at helping ULBs undertake high quality preparation and implementation of investment subprojects under the Urban Infrastructure Investments component (Component C) and Project Development Advisory Facility (PDAF) process as appraised by the World Bank. This facility will primarily finance technical, financial, economic, environmental & social assessment and detailed engineering studies for preparing specific sub-projects; preparation of bid documents as well as external consultant support for management and supervision of subprojects during implementation. It will also support City Development Plans or Capital Investment Planning studies and all works related capacity building at the ULB and state level as approved in sub-project DPRs including technical assistance, logistics, support to bridge the identified gaps at the institutional, O&M, Social, Environmental, R&R, etc. through CEC coordination at MSU This TA will be delivered mainly through consultant pools administered (including procurement) by the office of CDMA, but ULBs that wish to retain their own consultants will be given the grant financing proportionate to the size of subprojects, subject to consultant procurement rules applicable to the project. The CEC will: assist ULBs to articulate training demands through consultative workshops; particularly during various phases of subproject development such as planning, preparation, implementation and monitoring; Coordinate with MSU and ULBs to prepare Capacity Enhancement Action Plan as part of subproject proposals approved in DPRs, ensure its quality and ensure implementation during various phases of subproject, and Help MSU in improving the existing monitoring system (in e-SUVIDHA) for subproject preparation and implementation monitoring. 31 APMDP Operations Manual 5.3 In parallel CDMA will provide TA support for the other ULBs to enhance their capacity for subprojects to meet the eligibility criteria. This includes further assessments and capacity building support to ULBs to enhance their knowledge / skills. The support shall be provided under the Technical Assistance Component of the project. This facility will primarily finance technical, financial, economic, environmental & social assessment and detailed engineering studies for preparing specific sub-projects; preparation of bid documents as well as external consultant support for management and supervision of subprojects during implementation. It will also support City Development Plans or Capital Investment Planning studies. This TA will be delivered mainly through consultant pools administered (including procurement) by the office of CDMA / MSU, but ULBs that wish to retain their own consultants will be given the grant financing proportionate to the size of subprojects, subject to consultant procurement rules applicable to the project. 32 APMDP Operations Manual Chapter 5 APMDP: FUNDING POLICIES AND PROCEDURES 6.1 General Policies of APUIF: (1) Liquidity: The APUIF is a medium and long term lender and as such will avoid excessive short term borrowing/lending. Cash flow forecasts will be maintained in order to ensure the optimum use of liquid funds. The Fund will match the terms of its loans and borrowings in order to minimize its exposure to interest rate fluctuations. (2) Security: Security will be taken wherever possible. Escrow account with first charge to APUIF for repayment of loan and interest under APDMP on the revenues of the ULB including tax, user fees, tariffs, etc. (3) Loan Coverage: As per financing policy outlined in Table 1 below. (4) Default: Borrowers from whom semiannual interest and/or principal installment remain overdue for a period of more than 90 days will need to clear arrears / reach agreements on revised repayment schedule before further releases of sub-loans / sub-grants. 6.2 Funding Criteria / Financing Policies: The APUIF/Fund Manager shall ensure that a project and borrower that sponsors such a project, in respect of which a loan application or requests made to the APUIF, shall meet the following eligibility criteria. (1) Eligible Sub-Borrowers: Eligible sub-borrowers would include all ULBs (as defined under state municipal and relevant acts) and the Statutory Boards that are involved in directly operating & maintaining / providing urban services to urban residents in Andhra Pradesh and meeting the Access Criteria outlined in Chapter 3 of this OM. (2) Eligible Sub-Projects: As outlined in Chapter 3 of this OM. (3) Eligible Items for the APUIF Financing: The APUIF will finance the costs of civil works, services, goods and materials. The APUIF will not finance the land acquisition costs and the working capital. Table 1: Terms of Financing for urban investments Issue ULB funding Terms of Financing 10% of subproject cost; this will be granted by GoAP for solid waste management subprojects State Grant funding to ULBs 20% of cost for transportation subprojects in all ULBs; 60% for other subprojects, in three largest Municipal Corporations; 70% in other ULBs Sub Loan Funding to ULBs The balance of cost after the self-financing and grant, at an interest rate at least 1% higher than cost of borrowing by GoAP, for a tenor of 15 years with a 3-year moratorium on principal repayments (no moratorium on interest payments). Debt servicing of Sub Loans: Semi-annually from the ULBs to the Trust (APUIF). In the case of Use of intercepts of state arrears over 12 months, APUIF shall: revise repayment schedule, devolutions with appropriate additional interest charges; and failing that, approach GoAP to clear arrears and penalties through intercepts 33 APMDP Operations Manual Issue Terms of Financing of state devolutions to ULBs. In addition, all the borrowers should have the institutional capacity to implement the project and to operate and maintain the constructed facilities in a satisfactory manner. In case where the institutional capacity of the borrower is not adequate, the APUIF would require the project sponsor to procure the technical assistance services. 6.3 Disbursement Procedures: (4) Sanction/disbursements/Operation of Bank Account: Based on the appraisal report and approval of SC, the funds will be released to APUIF bank account from PD account of CDMA. The APUIF will maintain a separate bank account for APMDP funds. Once the proposed loan is sanctioned by the APUIF or the delegated arrangements ordered by the Board, the funds will be transferred through a banking channel to ULBs bank account. Typically, the conditions of sanction would also specify the nature of collateral, if applicable, and the methods of repayments, such as escrow accounts, if needed, etc. The conditions may require that the borrower shall take out and maintain with responsible insurers such insurance, against such risks and in such amount, as shall be consistent with normal business practice. Disbursements would be made to the borrowers as detailed below: The funding amount (Loan and Grant) will be disbursed in equal installments with grants being disbursed first to reduce interest liability and would done on a pro-rata basis along with ULB own contributions. 6.4 Initial disbursement: Based on the recommendation of the MSU, with the approval of Secretary-APUIF, the grant and loan components of the funding agreement will be released to the ULB as per the disbursement schedule. Disbursal of funds to the ULBs from APUIF will be through transfer of funds from the Bank account of APUIF to the Bank account of the ULB through electronic transfer. The first installment of the funds will be released to the ULB after receipt of the following documents. 1. Certified copy of the Council Resolution from the ULB for implementation of the Project under APDMP and also to receive grants and borrow money for the project from APUIF. 2. Details of Bank account opened exclusively for APURMS Project with the Banker of APUIF. 3. Authorization / Mandate letter from ULB addressed to the Banker of APUIF to link the ULB’s project bank account to the APUIF bank account with a view option, for facilitating the on-line monitoring of the utilization of funds in the account by APUIF. 4. Funding agreement duly executed by the ULB 5. Approved Reform Action Plan. 6.5 Subsequent disbursals: Subsequent disbursals will be made to the ULB on the submission of the following documents. 34 APMDP Operations Manual Action taken on approved Reform Action Plan. Latest Progress Report – Physical and Financial. Third Party Quality Control Report. Schedule-3 and Annexes 1,2,3&4 of Schedule-3 of Loan Agreement. Copy of Payment vouchers along with all enclosures for the payments made under APURMS Project. Certified Bank statement from the beginning of the bank account maintained exclusively for APURMS Project. Details of utilization of 10% ULB Contribution Inspection Reports Photographs relating to works undertaken under APURMS Project. Standard disbursement letters / formats are presented in Annexure 11. 6.6 Retroactive Funding:- The World Bank has indicated applicability of retroactive funding only from one year prior to the date of signing the project agreement. The Government of Andhra Pradesh has released a total of Rs.147.63 crores from 2004-05 to 2007-08 to APURMSP (now named as APMDP) under the budget head of grants-in-aid. Subsequently the World Bank in its letter March 16, 2009 (Annexure 22) indicated that whatever may not be retroactively financed by the World Bank would be compensated in the form of increase in the loan amount by the bank and corresponding decrease in the Andhra Pradesh government share out of the total agreed project cost. Therefore the funds released as grants-in-aid out of Rs.147.63 crores which cannot be converted to loan under retroactive funding would be so compensated to Government of Andhra Pradesh by the World Bank but cannot imply any loan liability to the state or the ULBs. Therefore the GoAP may decide in respect of the revision of ULB sub-loan agreements for this non-retroactive funding amount for conversion as grants to ULBs. With regard to the ongoing works under the above released amount of Rs.147.63 crores, the government issued G.M.No.5121/UBS/2008, MA & UD (UBS) Department, Dt. 25th March 2008 (Annexure-12) to drop the works which are not grounded, pending agreement at ULB level or APUFIDC or which are held up for more than one month and the action is being taken to close such works and to complete the balance. The World Bank has further indicated that rebidding permission should be granted for revised cost only upon certification of up to date audits of the ULBs so as to be eligible for reimbursements. 6.7 Financial Implifications upon GoAP: The total project cost is the financial burden upon the Government of Andhra Pradesh with the sub-loan amount refunded to APUIF by ULBs over 20 years period being utilized by APUIF as revolving fund under the provisions of GO.MS.No.72, MAUD (UBS) Department, Dt.18.2.2005 (Annexure-12). 35 APMDP Operations Manual Chapter 6 APMDP – Institutional Structure and Funds Flow 7.1 This section of the manual deals with APMDP management and institutional structure and comprises (i) an overview of the organizational structure managing APMDP (at EC, CDMA and APUF), (ii) job specifications/descriptions of team members, (iii) human resource management procedures, (iv) APMDP financial management, and (v) systems and procedures to manage APMDP, including record keeping and reporting and internal controls and audits. 7.2 The overall responsibility of APMDP will be with the Municipal Administration & Urban Development Department (MAUD) of Andhra Pradesh, acting through its various agencies and committees. These are outlined with fund flow arrangements in the GO Ms. No. 288, MA&UD Dept.(UBS), dated 21st April, 2009 presented in Annexure 12. The agreed implementation arrangements component-wise are as follows: a) Components A [Policy and Institutional Development Support], B [Local Capacity Enhancement], and D [Project Management Technical Assistance] : The CDMA/MSU in collaboration with other line departments (DTCP, MEPMA, APUIF, PHED) will implement all these components and will be responsible for complying with all the financial management requirements in respect of these components, including the GoAP and Bank reporting requirements. The CDMA will receive funds through a budget allocation under the MAUD, as per regular financial and fund flow procedures of the GoAP, and will maintain accounts, procure and receive goods and services under this component. b) Component C [Urban Infrastructure Investment]: This component will be funded through the AP Urban Infrastructure Fund (APUIF), which is a Trust registered under the Indian Trust Act. The APUIF is an intermediate entity which will receive funds from the CDMA, and will fund the sub-projects at the ULB level by providing sub-loans and capital grants to them. 7.3 The flow of funds for Technical Assistance and Infrastructure Investment Component is shown in Annexure 13 through MSU Bank Accounts. MSU shall open separate Bank Account for expenditure to be incurred by various Implementing Agencies like DTCP, MEPMA, PHED and APUIF. 7.4 All performance reporting from the ULBs upwards will be through MSU and APUIF. The channel of flow of performance reports is shown in Annexure 14. Team Organization MSU / CDMA Role and Team 7.5 The CDMA / MSU retains the central role in APMDP with responsibility to ensure satisfactory implementation of the project in collaboration other departments, agencies and ULBs as necessary, including APUIF, DTCP, MAUD, MEPMA and PHED. In addition, APUIF also has a critical role to play, being the channelizing agency for all investment funds to ULBs. The CDMA/MSU will establish a Monitoring and Evaluation System (outlined in Chapter 8) 36 APMDP Operations Manual which will provide the basis of performance monitoring and reporting for the entire project and its components..CDMA / MSU will manage the Technical Assistance and will have responsibility for periodic reporting to Bank for the entire project. MSU will also assist ULBs in central procurement. The existing (approved) staffing of the MSU at CDMA / APUIF is presented in Annexure-15. MSU may outsource activities as and when needed, especially those where specific skill set is required and is available only from the market. This needs to be coupled with a good remuneration package commensurate with that of the market. The incremental operating expenses of MSU will be met under the APMDP Project Management Component. Project Appraisal Committee Role 7.6 The sub-projects Detailed Project Reports prepared under the Project by the implementing agencies concerned shall be scrutinized by the MSU under the Commissioner and Director of Municipal Administration and placed before the Project Appraisal Committee for appraisal from the perspective of environment, social development, financial and other perspectives as agreed under the World Bank project. The Committee shall meet as and when required or once in a month. 1 2 3 4 5 6 Commissioner and Director of Municipal Administration Secretary, APUIF Mission Director, IKP-Urban (MEPMA) Engineer-in-Chief, Public Health Deptt. Director of Town and Country Planning Project Director, MSU, APDMP Chairman Member Member Member Member Member, Convener Steering Committee Role 7.7 In supersession of the orders issued in G.O. Rt. No. 1240 Municipal Administration and Urban Development (UBS) Department dated 29.08.2008 the Steering Committee is reconstituted with the following members. 1 2 3 4 5 6 7 8 9 Secretary to Government, MA&UD Department Commissioner and Director, Municipal Administration Special Secretary to Government / Additional Secretary to Government/ Joint Secretary to Government, MA & UD Dept. Additional Secretary / Joint Secretary to Government, Finance Department Managing Director, APUFIDC Ltd Mission Director , MEPMA Engineer-in-Chief Public Health Director, Town and Country Planning Project , MSU, APDMP Chairman Vice-Chairman Member Member Member Member Member Member Member-Convener 7.8 The Steering Committee shall approve the annual action plan including of subprojects Detailed Project Reports (DPRs) appraised by the Project Appraisal Committee (PAC), approve the operational guidelines under the Project , accord approval to engage subject specialists on outsourcing basis including their remuneration , approve the operations manual, resolve issues of coordination among the different Heads of Departments who are implementing agencies or stakeholders in the project, review and 37 APMDP Operations Manual monitor the implementation of the Project . The Committee shall meet once in two months or whenever deemed necessary for the implementation of the project. Empowered Committee Role 7.9 The Empowered Committee (EC) shall review and direct the APDMP at the highest level, resolve inter departmental issues. The Committee shall meet once in 6 months or as and when required. The Empowered committee shall consists of the following members 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Chief Secretary Principal Secretary (Finance) Principal Secretary(Revenue), Principal Secretary,(Transport), Principal Secretary(EFST) Principal Secretary (Irrigation) Principal Secretary (IT), Principal Secretary (Rural Development), Commissioner and Director , Municipal Administration Managing Director, APUFIDC / Secretary APUIF Principal Secretary (MAUD), Secretary (MAUD), Chairman Member Member Member Member Member Member Member Member Member Member Member-Convener APUIF Role 7.10 The APUIF will be the Implementing Agency with APUFIDC as its Fund Manager, for the largest component of the projectUrban Infrastructure Investment (with an allocation of nearly 85% of the loan). Project funds will be transferred from the Personal Deposit (PD) account of the CDMA to the designated bank account of APUIF as per procedure approved by the GoAP finance department, as reflected in the GOs related to the project. The bank account of APUIF will be operated in accordance with the relevant circulars and guidelines of the GoAP which will also detail the amounts to be released and their periodicity. APUFIDC Role 7.11 APUFIDC is a state level entity set up by the GoAP to foster urban development and its main areas of focus are Public-Private Partnerships (PPPs) and urban financing, including access by ULBs to market based finance. The APUIF with APUFIDC as its Fund Manager shall implement the PPP studies sub-component. APUFIDC however , is not involved in the financing of the Bank project, but will play an advisory and technical support to the project APMDP: Personnel Management 7.12 Personnel involved in managing APMDP will be government employees, augmented as necessary, through external consultants. Specifically for management of sub-projects, sub-borrowers/ULBs should ensure adequate presence of finance and procurement personnel to manage the sub-projects under APMDP. APMDP: Financial Management 7.13 MSU/CDMA will consolidate the actual expenditure information for all project components into the Interim Unaudited Financial Reports (IUFR) and for seeking 38 APMDP Operations Manual reimbursements. The Municipal Strengthening Unit will be responsible for all reporting requirements including those to the Bank. The IUFRs are purely financial reporting documents, on the basis of which disbursement will be made. It will report on the “actual expenditure” component wise, as certified by the internal auditors. There will be no cash based forecasts, or contract management information in the IUFRs - these can be part of the project monitoring reports (PMRs). The format of the IUFRs is presented in Annexure 16. The IUFRs should broadly address: i. Physical progress will be a part of the Project monitoring reports, IUFRs are purely financial data to be used for disbursement purposes. Responsibility of same lies with MSU. ii. Reconciliation of expenditures/sub-loans claimed from the Bank with expenditures/subloans made annually; iii. Sub-borrowers’ (ULBs and/or Statutory Boards) quarterly financial reports reflecting the physical and financial progress achieved in implementing sub-projects; and iv. Annual financial statement of ULBs/Statutory Boards within three months of the fiscal year end – the ULB finances is subject to audit by the Director, State Local Fund Audit or an agency appointed by GoAP for this purpose. The first IUFR for the project will be submitted to the Bank within 45 days of the end of the first quarter from the date of loan effectiveness. Systems and Procedures 7.14 Internal Control for State Level Policy and Institutional Development: According to the current audit arrangement, DMA shall affect internal controls of the State Level Policy and Institutional Development through the existing mechanism in the office CDMA. The personnel shall carry out pre-audit functions and certify every bill/invoice before a payment is made. Internal Control for Investment Component 7.15 A reputed and experienced CA firm or firms will be appointed as the Internal Auditor for the entire project and they will be responsible for concurrent audit of the project, as per TORs agreed with the Bank. The internal auditor will certify each quarter, the “actual expenditure” incurred by the CDMA and the APUIF on all the Components, and this information will feed into the IUFRs. As part of their duties, the internal auditors will also review the sub-loan portfolio of the APUIF and examine if the grants and lending to the ULBs comply with relevant agreements signed between the APUIF and the ULB. The auditors will also confirm that the relevant GoAP rules and procedures and applicable GOs are followed in respect of operation of all the PD accounts and Bank accounts maintained under the project. They will also review that the eligibility criteria for selection of ULBs have been fully complied with. In each audit cycle the firm will also select and visit a sample of ULBs and verify that the ULBs are utilizing the moneys as per the conditions of the sub-loan and -grant agreements, and for the purposes for which the funding is given, and conduct a physical verification of assets created through the sub-loans and Grants. They will also review and verify that the expenditures incurred under other components and sub-components of the project are in accordance with the internal financial rules and procedures of GoAP (the AP 39 APMDP Operations Manual Finance Code and Delegation powers, etc). Internal Control for TA Component 7.16 The internal control for TA component will rest with the MSU at CDMA. MSU shall ensure that the accounting practices followed for activities under the TA component conform to the statutory and donor requirements. External Audit 7.17 The CAG of India (through the office of the Accountant General, AP) will be responsible for statutory audit of project financial statements (PFS). TORs for the audit have been shared with CDMA, who will seek the agreement of the CAG on these TORs. APUIF will be audited by a CA firm acceptable to the Bank, while the ULBs will be audited by the State Audit Department, as required under their Act. The Bank will review the CAG’s audit report of the project financial statements and that of the APUIF. Audit reports of the individual ULBs receiving loans and grants under the project will be reviewed by the Project Director and the CDMA. The Bank will be informed of any significant observations by the ULB audits. The following audit reports will be received by the Bank within six months from the close of the financial year (due date for receipt of audit reports is 30 Sept of the year) and monitored in ARCS. : An external audit of the project shall also include the audit of the State level implementing agencies including PD account of the Commissioner and Director, Municipal Administration by the Accountant General, Andhra Pradesh as per the generic Terms of References as agreed with the World Bank. Implementing entity APUIF Audit Report Audited by Entity audit report (with detailed Schedule of usage of Project funds as sub-loans and Grants to ULBs under Component C) Firm of Chartered Accountants acceptable to the Bank CAG/ Accountant General, AP CAG of India CDMA Audit of Project Financial Statements for the APMDP DEA/ GOI Special Account MSU reporting to MAUD 7.18 Based on the executing agencies’ report, MSU will receive reports from all Implementing Agencies including ULBs and APUIF and produce a consolidated progress report, to be submitted to the MAUD and the World Bank, within one month of the end of the relevant quarter. The contents of the progress report are mentioned in Monitoring and Evaluation Section of the manual. ULB Reporting to APUIF 7.19 APUIF shall make their sub-borrowers submit quarterly FMRs, in the agreed format, to reflect the financial and physical progress achieved in implementing the approved subprojects. In addition, the participating ULBs will also be required to submit the annual financial statement within three months of the fiscal year end, which will be subject to audit by the statutory auditor of APUIF. Procurement Arrangements 7.20 Sub-borrowers should ensure adequate staffing regarding sub-project procurement and financial management. All procurement under APMDP shall be carried out in accordance with the procedures defined in the relevant sections of the Operations Manual. 40 APMDP Operations Manual Disbursement Methods 7.21 Disbursements will be based on actual expenditures incurred under each component, as reflected in the quarterly IUFRs.as per formats presented in Annexure 16. A detailed overview of financial management aspects in presented in Annexure 17. 41 APMDP Operations Manual Chapter 7: Governance and Accountability Action Plan (GAAP) 8.1 Purpose of the GAAP The GAAP explicitly specifies a set of specific measures to ensure good governance and accountability, by improving the effectiveness of the project activities, increasing transparency and managing risks of fraud and corruption. It includes measures to: 8.2 Ensure effective implementation of project elements directly relevant to improving governance and accountability, Guard against and reduce fiduciary risks, especially those of fraud and corruption, Enable beneficiary and general citizen to receive and provide information about the project transactions and performance, Safeguard the credibility of implementing agencies. Development of the APMDP GAAP The development of GAAP for APMDP involved the following: Frank consultations with civil society organizations and beneficiaries, proposed project implementing agencies, government officials at all levels, contractors and industry experts to identify, assess and prioritize risks of fraud and corruption which could dilute the intended outcomes of investments; Review of lessons learnt from recent sector experience, in particular, the DFIDsupported Andhra Pradesh Urban Services for the Poor (APUSP), 2000-2006, which prescribed: - mandatory quality assurance and overview of asset creation and maintenance and project implementation at ULB level by third parties, including citizens, NGO and knowledgeable and interest groups. - rigorous review of financial and procurement processes and insistence of clear procedures to reduce opportunities for mismanagement, fraud and corruption; - assignment of specific accountabilities for GAAP implementation, including clear terms of reference, training and budgets for implementation, as consistently described in all project documents (appraisal report, financial, procurement and operational manuals); - systematic and independent procedures to check compliance and implementation of mitigation measures as needed; - application of positive and negative incentives for compliance, deterrence and management of risks of fraud and corruption. - Development of a Supervision and Monitoring Plan to get reasonable assurance of the proper working of GAAP and project controls. These consultation and reviews were led the Center for Good Governance, Hyderabad. The Bank has supplemented the GAAP thus developed with several additional measures based on Bank-wide review of experiences and good practices. 42 APMDP Operations Manual Governance and Accountability Action Plan (GAAP) Matrix Issue A. Will and Capacity for Implementation B. Sub-project identification and Design C. Procurement Risk and Rating Mitigating Actions Already Taken or Included (and Estimated Cost*) Agreement reached with senior government officials on development objectives Necessary TA built in the project ($17 million) ULB eligibility designed to reinforce performance Additional Mitigation Actions Proposed, Responsible Agency (and Estimated Cost*) Explicit covenants on critical actions 2. Inadequate staffing and training (Moderate) Key professional staff, including a capacity building specialist in place 1. ULBs that do not fit project approaches are given subloans and grants for political reasons (Moderate) 2. Design specifications tailored to benefit particular constituents or contractors Clear selection criteria have been agreed, including reform commitment, existing financial capacity, audit compliance Hire competent independent consultants, supervised by MSU, to prepare Detailed Project Reports (DPRs) ($7.8 million) Detailed technical appraisal of specifications by the Engineerin-Chief Wide publicity is given in newspapers Additional positions with competitive terms have been authorized Training plans are in place ($200,000) CDMA to apply the criteria and Bank team to review all selections 1. Commitment for reform and capacity building can waver (Moderate) 1. Collusion among bidders to seek higher prices, e.g. bids significantly higher than the 43 Continuous dialogue with and support for state and local officials Schedule and Milestones of GAAP Actions* On-going. The first policy workshop to be held on reform monitoring and design in progress in 2009. Continuing series of policy workshops; official resolutions and legislation expected from Yr 3 Advertisement of key positions within a month of Board approval The criteria clearly agreed and documented by negotiations Consultants hired for independent review ($1.2 million) Public disclosure of DPRs The consultants and public disclosure to be in place from the project start The Bank will review at least 50% of DPRs at least for the first two years Initially hire consultants to help manage the procurement process ($450,000); Training of key MSU staff by effectiveness; Broad ULB, PHED, and APMDP Operations Manual Issue Risk and Rating ECE; similar names and addresses of different bidders; bids received from ‘shell’ companies which then outsource work to local contractors (Moderate) 2. Lack of competition; coercion to prevent potential bidders purchasing bidding documents (High) 3. Framing of specifications and selection criteria to favor particular suppliers (Moderate) 4. Delayed, inadequate or improper bid evaluation to Mitigating Actions Already Taken or Included (and Estimated Cost*) Tender notices published in different offices Advertising in broadly circulated newspapers Additional bidder workshops to publicize the opportunities and procedures Designers alerted to such risks; Review by MSU, PHED, and Bank Detailed evaluation procedures are in place 44 Additional Mitigation Actions Proposed, Responsible Agency (and Estimated Cost*) Train ULB, PHED, and MSU staff to manage procurement, detect evidence of collusion and coercion by bidders as part of the Capacity Enhancement component Package contracts to attract national (higher) level bidders; Provide oversight by reputable technical panel ; Publish bid awards and trends; Use of debarment provisions Modify qualification criteria in bid doc; Establish register of potential bidders and send bid notices; ($90,000) Make bidding documents available on the website; Study the contracting industry ($120,000) e-Procurement as soon as the Bank-recommended modifications are made; Enhance use of Complaints line Train designers in minimizing risks Review by third party specialists ($1.2 M incl. in #1) Include consultants and reputable CSO representatives Schedule and Milestones of GAAP Actions* MSU staff training to be implemented from year 1 The procedures to be established and provided to design consultants from year 1 Make bid documents available on websites from the start Contracting Industry Study Yr 1-2 Starting from Yr 1 Training started using the national-level training APMDP Operations Manual Issue Risk and Rating favor particular suppliers (Moderate) 5. Delay or refusal of ULBs to award contracts to successful bidders (Low) D. Supervision and management of contracts 1. Deliberate delays in payments to contractors, leading to corruption and/or inadequate contract performance (Moderate) 2. Unjustified payments made for incomplete and/or substandard work, or substandard quality of goods delivered (Moderate) E. Financial Management System and Internal 1. Delayed and incomplete reporting of expenditures by multiple implementing agencies, leading to poor Mitigating Actions Already Taken or Included (and Estimated Cost*) Bid records are maintained, including evaluation records Additional Mitigation Actions Proposed, Responsible Agency (and Estimated Cost*) as evaluators; Training of ULB and PHED engineers to help in evaluation; Use of consultants to help evaluation ($200,000) Detailed bid records will be required for CDMA clearance and project financing Procedures specify time limits Enforce performance for contract award standards on timeliness of contract processing, at the penalty of refusal to finance ULBs authorized to process Independent inspectors match partial payments when progress and payments ($1.2 portions of the work is done; M); Implement a transparent MSU scrutinizes and match dispute resolution system at monthly physical and financial CDMA upon grievances filed progress reports by contractors Qualified and experienced Responsibilities of PHED engineers will be provided and (engineers on deputation) and held to strict rules that they consultants (for inspection) ensure that payments match will be tightly defined and quality of work done, or enforced; products purchased Third party consultants will be engaged for quality assurance ($1.2 M) Monthly reporting system is Closer follow-up and mandated at the ULB level monitoring from CDMA (principal implementing agency); Supervision 45 Schedule and Milestones of GAAP Actions* institute in Hyderabad as well as Bank specialists In Yr 1 and 2 consultants will be utilized heavily The procedures will be articulated as part of subloan contracts from project start Independent inspectors start work from the start of first subproject; Grievance Redressal mechanism to be operational in Yr 1. Consultants and thirdparty inspectors will be hired as a pool at MSU from the project start This procedure will be made a part of subloan contracts from project start APMDP Operations Manual Issue Controls Risk and Rating Mitigating Actions Already Taken or Included (and Estimated Cost*) planning and control (High) 2. External auditors (CAG) provide an audit certificate but do not provide independent audit opinion nor identify internal control issues as part of the certification exercise (High) This is a systematic issue for the country as a whole and its resolution will continue be sought at the national level 3. Delayed ULB audits and the neglect of key audit observations (High) Only those ULBs that have upto-date audits with key audit observations addressed will be eligible to participate in the project and receive subloans and grants 4. Failure of project progress reports to match financial disbursements with physical progress (Moderate) F. Compliance with Environmental and Social Safeguards Non-compliance with environmental and social framework safeguards, causing adverse impacts and non-sustainability of the sub- Social and environmental safeguard framework to be distributed to implementation agencies and design consultants 46 Additional Mitigation Actions Proposed, Responsible Agency (and Estimated Cost*) consultants to help report; suspension of disbursement when reports overdue Private auditors will be hired for ULB audits (approx. $500,000); management consultants hired under the Capacity Enhancement components will be asked to provide observations and recommendations on control issues ($3 M) CDMA to help hiring and management of CA firms ($500,00) Internal auditors or third party inspectors will certify concurrently the expenditure incurred by the ULBs and verify physical progress. (part of $1.2 M). ULBs will address audit findings promptly, or risk suspension. Safeguard specialists at MSU. Capacity building for the ULB / MSU staff on environmental and social safeguards; Environmental and social Schedule and Milestones of GAAP Actions* Private auditors already being hired. The TA to start in year 1 This has been agreed and is being applied. Third party inspectors will be hired upon start of project. Safeguard specialists to be on board by negotiations; GRMS system to become operational in Yr 1. APMDP Operations Manual Issue Risk and Rating Mitigating Actions Already Taken or Included (and Estimated Cost*) projects (Moderate) G. Communication, Participation, and Feedback Mechanisms 1. Lack of relevant information or their limited accessibility limits citizens engagement and hence project benefits, safeguards, and deterrence against noncompliance and corruption (Substantial) 2. Inaccessible and ineffective complaints and grievance system limiting the broad input for better project management (Moderate) Rights to Information Act, Community Participation Law, and Public Disclosure Policies are actively enforced in AP Environmental and social safeguards framework has been disclosed Implementation of the public disclosure and participation will be monitored as part of progress reports Grievance Redressal and Monitoring System (GRMS) available on line Additional Mitigation Actions Proposed, Responsible Agency (and Estimated Cost*) audits to identify remedial measures; Strict monitoring by MSU and independent inspectors; Invite citizen participation in public consultation and Grievance Redressal System A proactive public disclosure system and communications strategy will be implemented to make information available in accessible languages, on websites and ULB offices or citizen centers, and to conduct effective public hearings ($350,000) GRMS will also be available at offices of ULB, PHED, and DMA ($$1.2 M) The GRMS and dispute resolution system will be overseen by MAUD Schedule and Milestones of GAAP Actions* Broad capacity building to be part of Capacity Enhancement TA An initial version of the communication strategy will be put into effect at start of project and refined during project. On-line GRMS now operational. Off-line GRMS to be established by end of Yr 1. * Most of the technical and institutional actions to mitigate risks are part of the Capacity Enhancement and Project Management Support Components, with total costs of $14.5 million and $22.1 million, respectively. Other measures are conditions of financing. 47 APMDP Operations Manual Chapter 8: Monitoring & Evaluation (M&E) 9.1 MSU will be responsible for the overall project monitoring and evaluation (M&E), based on reports from executing agencies and its own evaluation. The baseline and output indicators will be included in the DPR in the case of infrastructure subprojects and in the consultant reports in the case of policy and capacity development components. Eventual outcomes will be reported by responsible ULBs and departments, and evaluated by CDMA-MSU. These outcomes will be compared to the Results Monitoring Framework (detailed in Table 1 below). Each executing agency will submit to CDMA quarterly progress reports covering the physical and financial progress of their respective activities, except the ULBs which would submit monthly reports to the CDMA of progress in urban investment sub-projects (format as presented in Annexure 18). CDMA will review these reports as well as output or outcome indicators, identify the issues and interventions needed, and produce quarterly project implementation reports to be provided to MAUD and the Bank. 9.2 For ULB capacity building, MSU has employed a Capacity Enhancement Specialist dedicated to intensively support and M&E of reform actions and TA. Issues encountered by ULBs in planning and managing the infrastructure subprojects as well as TA will also be used as an input for M&E of capacity building. The M&E findings and recommendations will be reported to CDMA and used for modification of OM and on-going TA. 9.3 The Bank will monitor and support the implementation through the review of the reports by CDMA and consultants, along with field visits at least twice a year. The team will include economic, financial, engineering, governance and procurement specialists. In the initial two years additional field visits will be made by engineering and fiduciary specialists. A midterm review will be conducted in about October 2011 with participation of independent evaluators. Urban Service Delivery Indicators 9.4 Monitoring urban service delivery outcomes is a critical part of the overall M&E system for APMDP. The urban service delivery indicators that will be monitored under APMDP will be consistent with the JNNURM framework for indicators. Tracking service delivery outcomes in a systematic manner will require two main steps: (i) Baseline indicators to be collected / compiled when a ULB initially submits the Initial Project Proposal (IPP). A number of instruments can be adopted for measuring baseline including secondary information, ULB databases, surveys, etc. (ii) Service delivery outcomes to be measured after completion of the sub-project at the ULB. This should be done through both the ULB as well as independent surveys / consultants. 48 APMDP Operations Manual Table 1: Results Framework PDO The project’s specific development objectives are to: Improve key urban services in selected cities; and Improve the capacity of Urban Local Bodies (ULBs) to develop and manage urban services Outcome Indicators Local residents’ satisfaction with urban services increase by at least 15%; Subproject-specific indicators such as hours of water supply Use of Outcome Information From Yr 3: Modify OM to increase relevance or quality of subprojects Participating ULBs increase revenues at least by 20% on average by Yr 3; At least 30 ULBs prepare and improve municipal services status report and improvement plans. From Yr 4: Conduct further policy dialogue and modify capacity enhancement TA 49 APMDP Operations Manual Intermediate Outcomes Urban Academy produces pertinent analysis of and recommendations for urban development, and trains officials Improvements in the state’s urban finance policy framework Increased clarity and efficiency in procedures of urban planning 30 ULBs improve urban planning frameworks Urban sector human resources in the state acquire improved skills Progress and outputs of urban infrastructure subprojects ULBs carry out measures to strengthen financial and technical capacities ULBs and CDMA develop improved capacity for financial management and control, and project monitoring and management Intermediate Outcome Indicators Media reports or State Assembly discussion of Urban Academy’s analyses and recommendations from Yr 4; At least 75% of officials trained report acquiring useful knowledge from Yr 4 Completion of reports on ULB fiscal autonomy and urban capital financing framework by Yr 3; their review by GoAP and adoption of half or more of recommendations by Yr 5 Reduction in the number of steps and files required for urban plan preparation and development approvals from Yr 4 GIS maps and revised General Towns Plans completed and formally adopted by at least 24 participating ULBs by Yr 4 At least 75% of staff and officials trained report gaining new useful skills or knowledge; at least 50% report using it on the job Physical and financial progress at ULBs; Targets for specific subprojects achieved, such as the added water supply capacity No. of ULBs taking specific actions to increase revenue, improve O&M and financial management, etc.; and Their aggregate effects from Yr 3 Implementation progress and evaluation reports are submitted on time, at least 80% from Yr 2, 90% from Yr 4; At least 80% of participating ULB accounts audited on time and without qualification from Yr 3 50 Use of Intermediate Outcome Indicators Identify areas of weakness and direct further consultant and Bank assistance. Monitor consultant reports and policy workshops to strengthen relevance and commitment, and provide supplemental TA The results fed back as recommendations for further reform Identify main areas of improvement and disseminate results to other ULBs; Identify areas of dissatisfaction with revised Plans and provide assistance for further corrective work Identify areas of weakness and adjust the advisory and training programs Refinement of procedures; increase or adjustment of design and implementation assistance Consider project measures – such as the strengthening of subproject conditions, or additional TA - to strengthen the efforts or effects Increase or adjust technical assistance and training if needed APMDP Operations Manual Approach to Monitoring and Evaluation 9.5 Two Types of Monitoring and Evaluation (M&E) will be carried out: Project Implementation Monitoring of progress and quality of implementation of project components, by the implementing agencies as well as the Bank, to: Facilitate timely and satisfactory implementation through identification and analysis of delays, failures or constraints; and Ensure fiduciary accountability and progress on implementation Governance and Accountability Action Plan (GAAP). Outcome Monitoring, to assess outcomes against objectives of each subcomponent, would be undertaken after the subcomponent is completed, mostly after Mid Term Review. In some cases the outputs would be the primary target of monitoring. The targets and types of indicators for outcome monitoring are presented in Table 2 below. 9.6 Institutional Arrangements for M&E: CDMA-MSU will be responsible for project M&E, collecting data on its own but mainly through implementing and supporting agencies (ULB, DTCP, PHED, etc.) coordinated by the Capacity Enhancement Specialist / PD of MSU with support of one Individual Consultant for M&E. It would provide various regular reports to MAUD, APUIF, and the Bank in a timely manner. The necessary management information system for M&E, including formats and guidelines for data collection will be instituted within the first six months of implementation of APMDP. CDMA-MSU will engage consultants to develop the M&E information system, augment and develop its own M&E capacity through Technical Assistance under the Project Management Component and carry out special surveys, analysis, and evaluation. 9.7 Data Collection and Reporting: will be conducted mainly through the following types of instruments: ULBs to MSU: ULB level Monthly Reports of physical and financial progress on (i) urban investment subproject implementation (in the format presented in Annexure 18) (ii) implementation status of MRAP; (iii) implementation status of CEAP. Other agencies to CDMA-MSU: Quarterly Progress reports from other agencies (DTCP, APUIF, PHED, etc) to CDMA / MSU on status of implementation of APMDP CDMA / MSU to Bank: Quarterly Project Monitoring Reports (PMR), compiled and submitted by CDMA / MSU, will include: Summary and consolidation of ULB monthly reports and progress reports of state-level components; Quarterly IUFRs required by Bank (format presented in Annexure 16); Select results indicators; Identification and analysis of issues; Revised implementation plan for the next 12 months Data on procurement done by ULBs as per Bank format agreed 51 APMDP Operations Manual Concurrent audits for fiduciary purposes (FM and Procurement), carried out semiannually by consultants hired by CDMA / MSU, will cover performance of implementing agencies with regard to procurement and FM aspects Outcomes monitoring and evaluation will be done mostly through external consultants engaged by CDMA / MSU, starting from the Mid-Term Review. 52 APMDP Operations Manual Table 2: Arrangements for Results Monitoring Outcome Indicators for each Objective Baseline local residents’ satisfaction with urban services increase by at least 15% Varies by ULB YR1 YR2 Target Values YR3 YR4 +10% Data Collection and Reporting Frequency and Data ResponsiReports Collection bility Instruments At the time of Household ULB and subproject and business CDMA proposal, and Survey 1-2 years after completion ULB, PHED, Operating and CDMA reports YR5 +15% Subproject-specific indicators such as hours of water supply; volume of waste safely disposed Specific to subprojects Participating ULBs increase the revenues Vary by ULB +20% Municipal services report of the status assessment and improvement plans 0 10 or more, for key services Plan approved +35% Annual Budget and audit reports ULB and CDMA 20 or more 30 or more; 10 updated or expanded Prepared at the time of subproject, updated and expanded in 23 years ULB and consultant reports ULB and CDMA Staff placed Training started Analytical and policy notes submitted Quarterly Progress / Consultant reports CDMA Interim reports Draft final reports GoAP signs-off on final report GoAP adopts part of recommen dations Quarterly Progress / Consultant reports CDMA Final Revision Implement Quarterly Progress, and CDMA, - Outcome Indicators for Each Component State level institutional and policy development support Urban Academy operational becomes GoAP carries out urban finance framework studies and adopt part of recommendations Streamlining planning rules Draft 53 APMDP Operations Manual Outcome Indicators for each Objective Baseline GIS Unit operational Capacity Enhancement Local officials and staff receiving training in new skills and knowledge. 0 ULBs prepare and implement capacity building program 0 Participating ULBs increase revenues 0 YR2 Target Values YR3 YR4 YR5 Data Collection and Reporting Frequency and Data ResponsiReports Collection bility Instruments Consultant DTCP reports Quarterly Progress / CDMA, Consultant DTCP reports report report of rules new rules Plan approved Procurement complete Data collection starts At least 30 GIS maps and analyses for ULBs and GoAP At least 60 GIS maps and analyses provided for ULBs and GoAP At least 100 trained At least 200 trained; at least 70% using skill At least 400 trained; at least 70% using skills Quarterly Progress reports; consultant reports; survey CDMA At least 20 certified At least 50 certified At least 75 certified Quarterly At least 40 ULBs At least 60 ULBs 20% or more in at least 20 ULBs Complete for at least 10 ULBs 25% or more in at least 30 ULBs Complete for at least 20 ULBs 35% or more in at least 50 ULBs Complete for 30 ULBs Annual Progress, and Consultant reports Progress, and Consultant reports Progress, and Consultant reports CDMA At least 30 ULBs At least 500 trained; at least 70% using the skills At least 100 certified At least 80 ULBs Progress, and Consultant reports CDMA, DTCP 0 ULB staff receiving professional certification General town plans prepared or revised with GIS and resident participation YR1 At least 20 ULBs 54 Quarterly Quarterly CDMA CDMA APMDP Operations Manual Outcome Indicators for each Objective Baseline YR1 YR2 Target Values YR3 YR4 YR5 Urban Infrastructure Investment Subproject-specific indicators and targets such as: Increased number of households with municipal connection or easy access to public stand post; Increased number of households with access to improved sanitation such as sewers and septic tanks Reduction in flooding Increase in volume of sewage or solid waste safely collected and disposed of Number of the poor receiving job training or other livelihood support Project Management Support Complete and timely progress reports Number of DPRs meeting agreed standard and criteria within the first sub Development of Public-Private Partnership urban investments Third-party and social audit of procurement, implementation, and disbursement vs. official reports At subproject start, and 1, 2, 3 years after completion Survey, Consultant reports CDMA, PHED Monthly, Quarterly Progress reports, Consultant reports Appraisal summaries in Progress report, and Bank review Progress reports, Consultant reports CDMA, PHED Progress reports, Consultant reports CDMA, PHED More than 80% on time More than 90% on time More than 90% on time More than 95% on time More than 70% satisfy. More than 80% satisfactory More than 80% satisfactory More than 80% satisfactory As DPRs are submitted to CDMA and Bank Subproject s at least $10m worth started Less than 5% find material discrepancy Annual Subprojec ts at least $10m worth planned Less than 10% find material discrepancy 55 More than 95% on time Data Collection and Reporting Frequency and Data ResponsiReports Collection bility Instruments Less than 5% find material discrepancy Annual CDMA, PHED, Bank CDMA, APUFIDC APMDP Operations Manual Annexures (Templates where presented are indicative and would be adapted as necessary during implementation) APMDP Operations Manual ANNEXURE 1 PROCUREMENT FRAMEWORK AND PROCEDURES APMDP Operations Manual Annexure 1: Procurement Framework and Procedures CHAPTER- I INTRODUCTION 1.1 GENERAL The project objectives are to help improve urban services, and the capacities at State and local levels to sustain and expand such improvements. Procurement under the proposed project would be carried out in accordance with the World Bank’s "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004 (Revised October 2006); and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004 (Revised October 2006), and the provisions stipulated in the project’s Legal Agreement. Procurement arrangements for various items under different expenditure categories are described below. 1.2 OBJECTIVE Under the aforesaid background and scenario, the Procurement Manual has been prepared setting forth the procedures and guidelines for procurement of works, goods and services by the program partners, conducive to the program environment. 1.3 SCOPE OF THE MANUAL Manual contains procedures to be followed for procurement of goods, works, and services at different levels. Sample drafts of tender notice, Invitation to Quote (ITQ)/Bid, contract formats, market survey format, format for keeping accounts of material, performance security format, bank guarantee format, supply order format and work order formats etc. are given in the Manual. Checks and controls required to maintain transparency in the procurement process have been covered and as far as permissible, clauses for exercising in-built checks and controls have been inserted by fixing value threshold of tenders at different levels of stakeholder. 1.4 LIMITATIONS OF THE MANUAL The Manual is limited to the efficient use by all stake holders of the project; like the MAUD, DMA, MSU, PHED and the ULBs. The Manual shall be a reference tool for the project partners and related agencies and changes, if any, will be subject to approval of the World Bank. 1.5 REFERENCE TO THE WORLDBANK The terms “World Bank’ or ‘Bank’ have been used in this manual and wherever any clearance requirements or other references have been made. 56 APMDP Operations Manual CHAPTER - II PROCUREMENT POLICY, PLAN AND STRATEGY 2.1 GENERAL The aim of procurement is to obtain right quality of works, goods or services at reasonable and competitive prices, giving equal opportunities to those individuals/companies/ firms/manufacturers/builders who are capable of delivering the goods, works and services. Procurement policy also needs to provide incentive and encouragement for development of national institutions, consultancy firms, manufacturers, contractors etc. Following are the main principles universally accepted and followed: 2.2 Need for economy and efficiency Need for high quality services Fair opportunity to all eligible bidders Development of domestic contracting, manufacturing and consulting firms Transparency in the procurement process PROCUREMENT PLAN Procurement plans/ schedules including the description of goods, works and services to be procured along with their value and consistent with technically and administratively approved estimate, are required to be prepared for the first and subsequent years, in accordance with the budgetary provisions. The actual procurement is to follow the approved plans. During preparation of the procurement plans/ schedules, packaging should be appropriately done. Items of similar nature, which can be supplied by same set of firms, should be packaged together to achieve economies of scale. They should be evaluated on slice cum package basis after taking into account cross discounts offered. Aggregate value of total package will form the basis for determining the procurement method as well as the review requirement of the World Bank. The initial project procurement plan dt. __________________ has been approved by the World Bank. 2.3 METHODS OF PROCUREMENT Following methods will be used based on the value and nature of purchase:(a) Goods, Works and Services (Other than Consultancy Services): International Competitive Bidding (ICB) National Competitive Bidding (NCB) Limited Competitive Bidding (LCB) Shopping Direct Contracting (b) Consultancy Services: Quality and Cost - Based Selection (QCBS) 57 APMDP Operations Manual 2.4 Quality - Based Selection [QBS] Selection Under a Fixed Budget (FBS) Least - Cost Selection (LCS) Selection Based on the Consultants’ Qualification (CQS) Single Source Selection (SSS) Selection of Individual Consultants INTERNATIONAL COMPETITIVE BIDDING (ICB) AND SELECTION OF CONSULTANTS FOR SERVICES WHERE FOREIGN CONSULTANTS ARE INVOLVED In case of any ICB procurement, World Bank guidelines and Standard Bidding Documents/ Standard Request for Proposal as applicable will be followed. 2.5 DELEGATION OF AUTHORITY Particulars Final Appraisal of DPRs Approval of DPRs Approval for variation in rates at the time of procurement of individual items in DPR Procurement approval for Goods, Works & Services (other than consultancy services) Procurement approval for Consultancy Services 2.6 Value All values All Values All values Competent Authority Project Appraisal Committee Steering Committee Steering Committee All values Steering Committee All values Steering Committee PROCUREMENT AUDIT Procurement audit refers to post auditing of procurement files and documents relating to contracts for procurement of goods, works and consultancy services. It will be conducted by an independent agency along with financial audit. The TOR of financial audit will include sufficient points to cover issues on procurement by all stakeholders. Procurement audit is basically carried out to ascertain whether the procurement procedures were correctly and completely followed, both in letter and spirit. It brings out omissions/commissions and lapses, whether on account of poor or inadequate understanding of the procedures or willful negligence including likely fraud/ corruption evidenced during the audit. The report and observations of procurement audit therefore, also serve as a guide for taking remedial measures to streamline and improve the procurement system. The TOR for the financial and procurement audit will be required to be cleared with the World Bank before hiring the agencies. GoAP will share all reports of the above-mentioned external audits with the Bank during the supervision missions. Cases of non-compliance will be reported to the relevant authorities for necessary remedial actions. In addition, the World Bank will carry out its own post review of contracts. 58 APMDP Operations Manual 2.7 MISPROCUREMENT The Bank does not finance expenditures for goods, works and consultancy services, which have not been procured/ contracted in accordance with the agreed provisions of the loan agreement and as further elaborated in Procurement Plan agreed with the Bank. In such cases, the Bank will declare misprocurement and it is the policy of the Bank to cancel that portion of credit allocated to the goods, works, and consultancy services that have been misprocured. The Bank may, in addition, exercise other remedies provided for under the Loan Agreement. Even when the contract is awarded after obtaining “no objection” from the Bank, the Bank may still declare misprocurement, if it concludes that the “no objection” was issued on the basis of incomplete, inaccurate, or misleading information furnished by the Borrower or the terms and conditions of the contract had been modified without Bank’s prior approval. 2.8 COMPLAINT HANDLING MECHANISM In order to deal with the complaints received from contractors/suppliers effectively, a complaint handling mechanism is available at the level of Project Director. On receipt of complaints, immediate action is initiated to redress grievances. All complaints are dealt with at levels higher than those at which the procurement process is being undertaken. Complaints and the allegations made in the complaints are thoroughly enquired into and if found correct, appropriate remedial measures are taken by the appropriate authorities. In cases where an individual staff is found responsible, suitable disciplinary proceedings are to be initiated against such staff under the Civil Services Conduct Rules at the State level. The receipt of any illegal gratification by staff is to be considered as misconduct and results in disciplinary proceedings against such staff, in addition to penalties under the law. The existing provisions under the law, the discipline and appeal rules and the directives of the Central Vigilance Commission are to be strictly followed in dealing with the complaints of contractors/suppliers. If a bidder complains to the Bank, the Bank may examine the complaint in consultation with the project authorities. The Bank may also require a bidder to be debriefed, if the bidder wishes to ascertain the grounds on which its bid was not selected. 2.9 FREQUENCY OF PROCUREMENT SUPERVISION MISSION PROPOSED Procurement supervision shall, generally, be part of the Bank’s periodic Supervision/ Review missions, and will be undertaken once every six months or as deemed necessary by the Bank. 59 APMDP Operations Manual CHAPTER- III PROCUREMENT OF CONSULTANCY SERVICES 3.1 GENERAL Services are defined as providers of systematic organized activities that may carry out a training programme, workshop, IEC activities, feasibility studies, environmental studies, detailed design of structures, preparation of technical schemes, preparation of data, construction supervision of engineering works, advisory services etc. Following considerations are generally followed in designing the procedures and guidelines for procurement of various services as described above. I. II. III. IV. V. Quality Economy and efficiency Opportunity to qualified experts Encourage and develop national/ local consultants Transparency in selection process The employer should first assess the need of assignment and then prepare the Terms of Reference and estimated cost consistent with objectives of the assignment so that cost of assignment may be estimated considering the fee and remuneration of specialist & support staff on man-months basis, reimbursable costs and miscellaneous expenses. 3.2 CONTRACT TYPES FOR PROCUREMENT OF CONSULTANCY SERVICES Three types of contracts are currently in use for contracting services of Consultants as described below: (a) (b) (c) 3.3 A lump sum contract for assignments where scope of work, duration of work are clearly defined. Payment is indicated to be made upon delivery of outputs as specified. Such contracts are suitable for feasibility studies, detailed design of civil structures etc. Time based: Assignments like construction supervision of engineering works, training assignments, advisory services etc. where scope of work and duration could not be defined are contracted on time-based type of contract where payment is decided to be made at hourly, daily or monthly rates plus reimbursable expenses using actual expenses or agreed upon unit prices. Percentage contract: Architectural services, engineering services, procurement services etc are suitable to be contracted on percentage basis where payment is agreed upon with the consultants to be paid at certain percentage of the actual cost of the project or goods as per market norm or standard practice of the industry. STEPS FOR HIRING OF CONSULTANTS Steps taken for hiring of consultants under different methods are explained in the following paras and also listed in Appendix-III. World Bank guidelines for procurement of consultancy services will be 60 APMDP Operations Manual referred for details and the Bank’s standard bidding documents shall be used for hiring of consultancy services. 3.4 PROCEDURE FOR PROCUREMENT OF CONSULTANCY SERVICES UNDER DIFFERENT METHODS 3.4.1 Quality and Cost-Based Selection (QCBS) (i) The Selection Process QCBS uses a competitive process among short-listed firms that takes into account the quality of the proposal and the cost of the services in the selection of the successful firm. Cost as a factor of selection shall be used judiciously. The relative weight to be given to the quality and cost shall be determined for each case depending on the nature of the assignment. The selection process shall include the following steps: (a) preparation of the TOR; (b) preparation of cost estimate and the budget; (c) advertising; (d) preparation of the short list of consultants; (e) preparation and issuance of the RFP [which should include: the Letter of Invitation (LOI); Instructions to Consultants (ITC); the TOR and the proposed draft contract]; (f) receipt of proposals; (g) evaluation of technical proposals: consideration of quality; (h) public opening of financial proposals; (i) evaluation of financial proposal; (j) final evaluation of quality and cost; and (k) negotiations and award of the contract to the selected firm. (ii) Terms of Reference (TOR) MSU shall be responsible for preparing the TOR for the assignment. TOR shall be prepared by a person(s) or a firm specialized in the area of the assignment. The scope of the services described in the TOR shall be compatible with the available budget. TOR shall define clearly the objectives, goals, and scope of the assignment and provide background information (including a list of existing relevant studies and basic data) to facilitate the consultants’ preparation of their proposals. If transfer of knowledge or training is an objective, it should be specifically outlined along with details of number of staff to be trained, and so forth, to enable consultants to estimate the required resources. TOR shall list the services and surveys necessary to carry out the assignment and the expected outputs (for example, reports, data, maps, surveys). However, TOR should not be too detailed and inflexible, so that competing consultants may propose their own methodology and staffing. Firms shall be encouraged to comment on the TOR in their proposals. The borrower’s and consultants’ respective responsibilities should be clearly defined in the TOR. (iii) Cost Estimate (Budget) Preparation of a well-thought-through cost estimate is essential if realistic budgetary resources are to be earmarked. The cost estimate shall be based on the Borrower’s assessment of the resources needed to carry out the assignment: staff time, logistical support, and physical inputs (for example, vehicles, laboratory equipment). Costs shall be divided into two broad categories: (a) fee or 61 APMDP Operations Manual remuneration (according to the type of contract used) and (b) reimbursable, and further divided into foreign and local costs. The cost of staff time shall be estimated on a realistic basis for foreign and national personnel. (iv) Advertising: For all projects the Borrower is required to prepare and submit to the Bank a draft General Procurement Notice. The Bank will arrange for its publication in UNDB online and in the dgMarket. To obtain expressions of interest, the Borrower shall advertise a request for expressions of interest for each contract for consulting firms in the national gazette or a national newspaper or in an electronic portal of free access. In addition, contracts expected to cost more than US$ 200,000 equivalent shall be advertised in UNDB online and in dgMarket. Borrowers may also advertise requests for expressions of interest in an international newspaper or a technical magazine. The information requested should be the minimum required to make a judgment on the firm’s suitability and not be so complex as to discourage consultants from expressing interest. Not less than 14 days from date of posting on UNDB online shall be provided for responses, before preparation of the short list. (v) Short List of Consultants: The Borrower is responsible for preparation of the short list. The Borrower shall give first consideration to those firms expressing interest that possess the relevant qualifications. Short lists shall comprise six firms with a wide geographic spread; with no more than two firms from any one country and at least one firm from a developing country, unless qualified firms from developing countries are not identified. The Bank may agree to short lists comprising a smaller number of firms in special circumstances, for example, when only a few qualified firms have expressed interest for the specific assignment or when the size of the contract does not justify wider competition. For the purpose of establishing the short list, the nationality of a firm is that of the country in which it is registered or incorporated and in the case of Joint Venture, the nationality of the firm appointed to represent the Joint Venture. The Bank may agree with the Borrower to expand or reduce a short list; however, once the Bank has issued a ‘no objection’ to a short list, the Borrower shall not add or delete names without the Bank’s approval. Firms that expressed interest, as well as any other firm that specifically so request shall be provided the final short list of firms. The short list may comprise entirely national consultants (firms registered or incorporated in the country), if the assignment is below $ 500,000 equivalent, a sufficient number of qualified firms is available for having a short list of firms with competitive costs, and when competition including foreign consultants is prima facie not justified or foreign consultants have not expressed interest. However, if foreign firms express interest, they shall be considered. The nature of the shortlist will be established in the procurement plan and agreed with the Bank. The short list should preferably comprise consultants of the same category, similar capacity, and business objectives. Consequently, the short list should normally be composed of firms of similar experience or of not-for-profit organizations (NGOs, Universities, UN Agencies, etc.) acting in the same field of expertise. If mixing is used, the selection should be made using Quality-Based Selection (QBS) or Selection Based on the Consultants’ Qualifications (CQS) (for small assignments). The short list shall not include Individual Consultants. 62 APMDP Operations Manual (vi) Preparation and Issuance of the Request for Proposals (RFP): The RFP shall include (a) a Letter of Invitation, (b) Information to Consultants, (c) the TOR, and (d) the proposed contract. Borrowers shall use the applicable standard RFPs issued by the Bank with minimal changes, as necessary to address project specific conditions. Borrowers shall list all the documents included in the RFP. The Borrower may use an electronic system to distribute the RFP, provided that the Bank is satisfied with the adequacy of such system. If the RFP is distributed electronically, the electronic system shall be secure to avoid modifications to the RFP and shall not restrict the access of short-listed consultants to the RFP. (vii) Letter of Invitation (LOI): The LOI shall state the intention of the Borrower to enter into a contract for the provision of consulting services, the source of funds, the details of the client and the date, time, and address for submission of proposals. (viii) Instructions to Consultants (ITC): The ITC shall contain all necessary information that would help consultants prepare responsive proposals, and shall bring as much transparency as possible to the selection procedure by providing information on the evaluation process and by indicating the evaluation criteria and factors and their respective weights and the minimum passing quality score. The ITC shall indicate an estimate of the level of key staff inputs (in staff time) required of the consultants or the total budget, but not both. Consultants, however, shall be free to prepare their own estimates of staff time to carry out the assignment and to offer the corresponding cost in their proposals. The ITC shall specify the proposal validity period, which should be adequate for the evaluation of proposals, decision on award, Bank review, and finalization of contract negotiations. A detailed list of the information that should be included in the ITC is provided in the Bank Guidelines for Selection and Employment of Consultants. (ix) Contract: The Bank Guidelines describe the most common types of contracts. Borrowers shall use the appropriate Standard Form of Contract issued by the Bank with minimum changes, acceptable to the Bank, as necessary to address specific project issues. Any such changes shall be introduced only through Contract Data sheets or through Special Conditions of Contract included in the Bank’s Standard Form. These forms of contract cover the majority of consulting services. When these forms are not appropriate (for example, for pre shipment inspection, procurement services, training of students in universities, advertising activities in privatization, or twinning) Borrowers shall use other contract forms acceptable to the Bank. (x) Receipt of Proposals: The Borrower shall allow enough time for the consultants to prepare their proposals. The time allowed shall depend on the assignment, but normally shall not be less than four weeks or more than three months (for example, for assignments requiring establishment of a sophisticated methodology, preparation of a multidisciplinary master plan). During this interval, the firms may request clarifications about the information provided in the RFP. The Borrower shall provide these clarifications in writing and copy them to all firms on the short list (who intend to submit proposals). 63 APMDP Operations Manual If necessary, the Borrower shall extend the deadline for submission of proposals. The technical and financial proposals shall be submitted at the same time. No amendments to the technical or financial proposal shall be accepted after the deadline. To safeguard the integrity of the process, the technical and financial proposals shall be submitted in separate sealed envelopes. The technical envelopes shall be opened immediately by a committee of officials drawn from the relevant departments (technical, finance, legal, as appropriate), after the closing time for submission of proposals. The financial proposals shall remain sealed and shall be deposited with a reputable public auditor or independent authority until they are opened publicly. Any proposal received after the closing time for submission of proposals shall be returned unopened. Borrowers may use electronic systems permitting consultants to submit proposals by electronic means, provided the GoAP and the World Bank are satisfied with the adequacy of the system, including, inter alia, that the system is secure, maintains the confidentiality and authenticity of proposals submitted, uses an electronic signature system or equivalent to keep consultants bound to their proposals, and only allows proposals to be opened with due simultaneous electronic authorization of the consultant and the Borrower. In this case, consultants shall continue to have the option to submit their proposals in hard copy. (xi) Evaluation of Proposals: Consideration of Quality and Cost: The evaluation of the proposals shall be carried out in two stages: first the quality, and then the cost. Evaluators of technical proposals shall not have access to the financial proposals until the technical evaluation, is concluded. Financial proposals shall be opened only thereafter. The evaluation shall be carried out in full conformity with the provisions of the RFP. (xii) Evaluation of the Quality: The Borrower shall evaluate each technical proposal (using an evaluation committee of three or more specialists in the sector), taking into account several criteria: (a) the consultant’s relevant experience for the assignment, (b) the quality of the methodology proposed, (c) the qualifications of the key staff proposed, (d) transfer of knowledge, if required in the TOR, and (e) the extent of participation by nationals among key staff in the performance of the assignment. Each criterion shall be marked on a scale of 1 to 100. Then the marks shall be weighted to become scores. The following weights are indicative. The actual percentage figures to be used shall fit the specific assignment and shall be within the ranges indicated below, except with the approval of the Bank. The proposed weights shall be disclosed in the RFP. Consultant’s specific experience: 0 to 10 points Methodology: 20 to 50 points Key personnel: 30 to 60 points Transfer of knowledge: 0 to 10 points Participation by nationals: 0 to 10 points Total: 100 points The Borrower shall normally divide these criteria into sub-criteria. For example, sub-criteria under methodology might be innovation and level of detail. However, the number of sub-criteria should be kept to the essential. The Bank recommends against the use of exceedingly detailed lists of subcriteria that may render the evaluation a mechanical exercise more than a professional assessment of the proposals. The weight given to experience can be relatively modest, since this criterion has 64 APMDP Operations Manual already been taken into account when short-listing the consultant. More weight shall be given to the methodology in the case of more complex assignments (for example, multidisciplinary feasibility or management studies). Evaluation of only the key personnel is recommended. Since key personnel ultimately determine the quality of performance, more weight shall be assigned to this criterion if the proposed assignment is complex. The Borrower shall review the qualifications and experience of proposed key personnel in their curricula vitae, which must be accurate, complete, and signed by an authorized official of the consulting firm and the individual proposed. The individuals shall be rated in the following three subcriteria, as relevant to the task: (a) general qualifications: general education and training, length of experience, positions held, time with the consulting firm as staff, experience in developing countries, and so forth; (b) adequacy for the assignment: education, training, and experience in the specific sector, field, subject, and so forth, relevant to the particular assignment; and (c) experience in the region: knowledge of the local language, culture, administrative system, government organization, and so forth. Borrowers shall evaluate each proposal on the basis of its responsiveness to the TOR. A proposal shall be considered unsuitable and shall be rejected at this stage if it does not respond to important aspects of the TOR or it fails to achieve a minimum technical score specified in the RFP. At the end of the process, the Borrower shall prepare a Technical Evaluation Report of the “quality” of the proposals and in case of contracts subject to prior review, submit it to the Bank for its review and no objection. The report shall substantiate the results of the evaluation and describe the relative strengths and weaknesses of the proposals. All records relating to the evaluation, such as individual mark sheets, shall be retained until completion of the project and its audit. (xiii) Evaluation of Cost After the evaluation of quality is completed and the Bank has issued its no objection, the Borrower shall inform the consultants who have submitted proposals, the technical points assigned to each consultant and shall notify those consultants whose proposals did not meet the minimum qualifying mark or were considered non-responsive to the RFP and TOR that their financial proposals will be returned unopened after the signature of the contract. The Borrower shall simultaneously notify the consultants that have secured the minimum qualifying mark, the date, time, and place set for opening the financial proposals. The opening date shall be defined allowing sufficient time for consultants to make arrangements to attend the opening of the financial proposals. The financial proposals shall be opened publicly in the presence of representatives of the consultants who choose to attend (in person or online). The name of the consultant, the technical points, and the proposed prices shall be read aloud (and posted online when electronic submission of proposals is used) and recorded when the financial proposals are opened. The Borrower shall also prepare the minutes of the public opening and a copy of this record shall be promptly sent to all consultants who submitted proposals. The Borrower shall then review the financial proposals. If there are any arithmetical errors, they shall be corrected. For the purpose of comparing proposals, the costs shall be converted to a single currency selected by the Borrower (local currency or fully convertible foreign currency) as stated in the RFP. The Borrower shall make this conversion by using the selling (exchange) rates for those 65 APMDP Operations Manual currencies quoted by an official source (such as the Central Bank) or by a commercial bank or by an internationally circulated newspaper for similar transactions. The RFP shall specify the source of the exchange rate to be used and the date of that exchange rate, provided that the date shall not be earlier than four weeks prior to the deadline for submission of proposals, nor later than the original date of expiration of the period of validity of the proposal. For the purpose of evaluation, “cost” shall exclude local identifiable indirect taxes on the contract and income tax payable to the country of the Borrower on the remuneration of services rendered in the country of the Borrower by non-resident staff of the consultant. The cost shall include all consultants’ remuneration and other expenses such as travel, translation, report printing, or secretarial expenses. The proposal with the lowest cost may be given a financial score of 100 and other proposals given financial scores that are inversely proportional to their prices. Alternatively, a directly proportional or other methodology may be used in allocating the marks for the cost. The methodology to be used shall be described in the RFP. (xiv) Combined Quality and Cost Evaluation: The total score shall be obtained by weighting the quality and cost scores and adding them. The weight for the “cost” shall be chosen, taking into account the complexity of the assignment and the relative importance of quality. Except for the type of services specified in paras 3.4.2 to 3.4.7, the weight for cost shall normally be 20 points out of a total score of 100. The proposed weightings for quality and cost shall be specified in the RFP. The firm obtaining the highest total score shall be invited for negotiations. (xv) Negotiations and Award of Contract: Negotiations shall include discussions of the TOR, the methodology, staffing, Borrower’s inputs, and special conditions of the contract. These discussions shall not substantially alter the original TOR or the terms of the contract, lest the quality of the final product, its cost, and the relevance of the initial evaluation be affected. Major reductions in work inputs should not be made solely to meet the budget. The final TOR and the agreed methodology shall be incorporated in “Description of Services,” which shall form part of the contract. The selected firm should not be allowed to substitute key staff, unless both parties agree that undue delay in the selection process makes such substitution unavoidable or that such changes are critical to meet the objectives of the assignment. If this is not the case and if it is established that key staff were included in the proposal without confirming their availability, the firm may be disqualified and the process continued with the next ranked firm. The key staff proposed for substitution shall have qualifications equal to or better than the key staff initially proposed. Financial negotiations shall include clarification of the consultants’ tax liability in the Borrower’s country (if any) and how this tax liability has been or would be reflected in the contract. As Lump-Sum Contracts payments are based on delivery of outputs (or products), the offered price shall include all costs (staff time, overhead, travel, hotel, etc.). Consequently, if the selection method for a Lump-sum contract included price as a component, this price shall not be negotiated. In the case of Time-based Contracts, payment is based on inputs (staff time and reimbursable) and the offered price shall include staff rates and an estimation of the amount of reimbursable. When the selection method includes price as a component, negotiations of staff rates should not take place, 66 APMDP Operations Manual except in special circumstances, like for example, staff rates offered are much higher than typically charged rates by consultants for similar contracts. Consequently, the prohibition of negotiation does not preclude the right of the Borrower to ask for clarifications, and, if fee are very high, to ask for change of fees. Reimbursable are to be paid on actual expenses incurred at cost upon presentation of receipts and therefore are not subject to negotiations. However, if the Borrower wants to define ceilings for unit prices of certain reimbursable (like travel or hotel rates), they should indicate the maximum levels of those rates in the RFP or define a per diem in the RFP. If the negotiations fail to result in an acceptable contract, the Borrower shall terminate the negotiations and invite the next ranked firm for negotiations. The consultant shall be informed of the reasons for termination of the negotiations. Once negotiations are commenced with the next ranked firm, the Borrower shall not reopen the earlier negotiations. After negotiations are successfully completed and the Bank has issued its no objection to the initialed negotiated contract, the Borrower shall promptly notify other firms on the short list that they were unsuccessful. (xvi) Publication of the Award of Contract: After the award of contract, the Borrower shall publish in UNDB online and in dgMarket (a) the names of all consultants who submitted proposals; (b) the technical points assigned to each consultant; (c) the evaluated prices of each consultant; (d) the final point ranking of the consultants; (e) the name of the winning consultant and the price, duration, and summary scope of the contract. The same information shall be sent to all consultants who have submitted proposals. (xvii) Debriefing: In the publication of contract award referred to in above paragraph the Borrower shall specify that any consultant who wishes to ascertain the grounds on which its proposal was not selected, should request an explanation from the Borrower. The Borrower shall promptly provide the explanation as to why such proposal was not selected, either in writing and/or in a debriefing meeting, at the option of the consultant. The requesting consultant shall bear all the costs of attending such a debriefing. (xviii) Rejection of All Proposals, and Reinvitation: The Borrower will be justified in rejecting all proposals only if all proposals are non-responsive because they present major deficiencies in complying with the TOR or if they involve costs substantially higher than the original estimate. In the latter case, the feasibility of increasing the budget, or scaling down the scope of services with the firm should be investigated in consultation with the Bank. Before all the proposals are rejected and new proposals are invited, the Borrower shall notify the Bank, indicating the reasons for rejection of all proposals, and shall obtain the Bank’s no objection before proceeding with the rejection and the new process. The new process may include revising the RFP (including the short list) and the budget. These revisions shall be agreed upon with the Bank. (xix) Confidentiality: Information relating to evaluation of proposals and recommendations concerning awards shall not be disclosed to the consultants who submitted the proposals or to other persons not officially concerned with the process, until the award of contract. 67 APMDP Operations Manual 3.4.2 OTHER METHODS OF SELECTION General: This section describes the selection methods other than QCBS, and the circumstances under which they are acceptable. All the relevant provisions of Section on (QCBS) shall apply whenever competition is used. 3.4.3 Quality-Based Selection (QBS): QBS is appropriate for the following types of assignments: (a) complex or highly specialized assignments for which it is difficult to define precise TOR and the required input from the consultants, and for which the Borrower expects the consultants to demonstrate innovation in their proposals (for example, country economic or sector studies, multisectoral feasibility studies, design of a hazardous waste remediation plant or of an urban master plan, financial sector reforms); (b) assignments that have a high downstream impact and in which the objective is to have the best experts (for example, feasibility and structural engineering design of such major infrastructure as large dams, policy studies of national significance, management studies of large government agencies); and (c) assignments that can be carried out in substantially different ways, such that proposals will not be comparable (for example, management advice, and sector and policy studies in which the value of the services depends on the quality of the analysis). In QBS, the RFP may request submission of a technical proposal only (without the financial proposal), or request submission of both technical and financial proposals at the same time, but in separate envelopes (two-envelope system). The RFP shall provide either the estimated budget or the estimated number of key staff time, specifying that this information is given as an indication only and that consultants shall be free to propose their own estimates. If technical proposals alone were invited, after evaluating the technical proposals using the same methodology as in QCBS, the Borrower shall ask the consultant with the highest ranked technical proposal to submit a detailed financial proposal. The Borrower and the consultant shall then negotiate the financial proposal28 and the contract. All other aspects of the selection process shall be identical to those of QCBS, including the publication of the Award of Contract as described in above paragraphs except that only the price of the winning firm is published. If consultants were requested to provide financial proposals initially together with the technical proposals, safeguards shall be built in as in QCBS to ensure that the price proposal of only the selected firm is opened and the rest returned unopened, after the negotiations are successfully concluded. 3.4.4 Selection under a Fixed Budget (FBS): This method is appropriate only when the assignment is simple and can be precisely defined and when the budget is fixed. The RFP shall indicate the available budget and request the consultants to 68 APMDP Operations Manual provide their best technical and financial proposals in separate envelopes, within the budget. TOR should be particularly well prepared to make sure that the budget is sufficient for the consultants to perform the expected tasks. Evaluation of all technical proposals shall be carried out first as in the QCBS method. Then the price proposals shall be opened in public and prices shall be read out aloud. Proposals that exceed the indicated budget shall be rejected. The Consultant who has submitted the highest ranked technical proposal among the rest shall be selected and invited to negotiate a contract. The publication of the Award of Contract shall be as described in para 3.4.1(xvi). 3.4.5 Least-Cost Selection (LCS): This method is only appropriate for selecting consultants for assignments of a standard or routine nature (audits, engineering design of noncomplex works, and so forth) where well- established practices and standards exist. Under this method, a “minimum” qualifying mark for the “quality” is established. Proposals, to be submitted in two envelopes, are invited from a short list. Technical proposals are opened first and evaluated. Those securing less than the minimum qualifying mark are rejected, and the financial proposals of the rest are opened in public. The firm with the lowest price shall then be selected. Under this method, the minimum qualifying mark shall be established, understanding that all proposals above the minimum compete only on “cost.” The minimum qualifying mark shall be stated in the RFP. 3.4.6 Selection Based on the Consultants’ Qualifications (CQS): This method may be used for small assignments for which the need for preparing and evaluating competitive proposals is not justified. In such cases, the Borrower shall prepare the TOR, request expressions of interest and information on the consultants’ experience and competence relevant to the assignment, establish a short list, and select the firm with the most appropriate qualifications and references. The selected firm shall be asked to submit a combined technical-financial proposal and then be invited to negotiate the contract. The Borrower shall publish in UNDB and in dgMarket the name of the consultant to which the contract was awarded, and the price, duration and scope of the contract. This publication may be done quarterly and in the format of a summarized table covering the previous period. 3.4.7 Single-Source Selection (SSS): Single-source selection of consultants does not provide the benefits of competition in regard to quality and cost, lacks transparency in selection, and could encourage unacceptable practices. Therefore, single-source selection shall be used only in exceptional cases. The justification for singlesource selection shall be examined in the context of the overall interests of the Borrower and the project, and the Bank’s responsibility to ensure economy and efficiency and provide equal opportunity to all qualified consultants. Single-source selection may be appropriate only if it presents a clear advantage over competition: (a) for tasks that represent a natural continuation of previous work carried out by the firm (see next paragraph), (b) in emergency cases, such as in response to disasters and for consulting services required during the period of time immediately following the emergency, (c) for very small 69 APMDP Operations Manual assignments (less than $ 500 equivalent or Rs. 25,000), or (d) when only one firm is qualified or has experience of exceptional worth for the assignment. When continuity for downstream work is essential, the initial RFP shall outline this prospect, and, if practical, the factors used for the selection of the consultant shall take the likelihood of continuation into account. Continuity in the technical approach, experience acquired, and continued professional liability of the same consultant may make continuation with the initial consultant preferable to a new competition subject to satisfactory performance in the initial assignment. For such downstream assignments, the Borrower shall ask the initially selected consultant to prepare technical and financial proposals on the basis of TOR furnished by the Borrower, which shall then be negotiated. If the initial assignment was not awarded on a competitive basis or was awarded under tied financing or if the downstream assignment is substantially larger in value, a competitive process shall normally be followed in which the consultant carrying out the initial work is not excluded from consideration if it expresses interest. The Bank will consider exceptions to this rule only under special circumstances and only when a new competitive process is not practicable. Various formats, steps and time taken for different method of procurement of consultancy services are described in Appendix III. 3.5 PROCUREMENT OF SERVICES OF INDIVIDUAL CONSULTANT Individual consultants are employed on assignments for which (a) teams of personnel are not required, (b) no additional outside (home office) professional support is required, and (c) the experience and qualifications of the individual are the paramount requirement. When coordination, administration, or collective responsibility may become difficult because of the number of individuals, it would be advisable to employ a firm. Individual consultants are selected on the basis of their qualifications for the assignment. Consultants shall be selected through comparison of qualifications of at least three candidates among those who have expressed interest in the assignment or have been approached directly by the Borrower. Individuals considered for comparison of qualifications shall meet the minimum relevant qualifications and those selected to be employed by the Borrower shall be the best qualified and shall be fully capable of carrying out the assignment. Capability is judged on the basis of academic background, experience, and, as appropriate, knowledge of local conditions such as local language, culture, administrative system and government organization. From time to time, permanent staff or associates of a consulting firm may be available as individual consultants. In such cases, the conflict of interest provisions described in the Bank’s guidelines shall apply to the parent firm. Individual consultants may be selected on a sole source basis with due justification in exceptional cases such as: (a) tasks that are a continuation of previous work that the consultant has carried out and for which the consultant was selected competitively; (b) assignments with total expected duration of less than six months; (c) emergency situations resulting from natural disasters; and (d) when the individual is the only consultant qualified for the assignment. 70 APMDP Operations Manual For hiring of consultant job description, qualification and experience required and terms of engagement should be finalized. The consultants for the assignment must be called through advertisement in the newspaper. Individual should meet all relevant qualifications and should be fully capable of carrying out the assignment. The qualified individuals will be called for interview/discussions prior to offering the assignment. Based on the above a list of candidates shall be prepared for each assignment separately and the top listed candidate shall be offered the job. 3.6 PROCUREMENT OF SERVICES OF NGO SHORTLISTING OF NGOS: Short listing of NGOs shall be based on the criteria given below: Regulatory requirement: NGO should be validly registered under Societies Registration Act of the Government or have other corporate status. NGO should be validly registered to work in the particular geographic locality NGO’s Article of Association or Bye laws permit, operation in the project sector NGO should be non political Should not have been blacklisted by the Central Social & Welfare Board (CSWB) or Council for the Advancement of Peoples Action & Rural Technology (CAPART) or by Central or any State Governments in India. Human and physical measures: Committed leadership at the top supported by adequate service level leadership Existence of adequate skilled staff in relation to needs of the assignment NGO should have necessary physical resource base like accessible office space, vehicles, and communication facilities and so on. Financial Capacity: Should have required financial strength and stability (Last three years turn over and audited balance sheet should be examined) Should have facilities to maintain separately, records and accounting of funds allocated for the assignment. Relevant Sectoral and operational experience: Should have prior experience in related sectors Should have adequate experience in Participatory Rural Appraisal Must have been functioning for at least three years in similar type of assignments. RFP should be issued to short listed NGOs and their bids are obtained for the concerned services. Technical and Financial Proposals are evaluated and contract agreement signed after following the same procedure as for other consultants. Where large areas are involved for conducting IEC and community mobilization the requirement of number of NGOs may fall short of their availability. In such cases single source selection method may be used with prior approval of the Bank. 71 APMDP Operations Manual CHAPTER-IV PROCESS DESCRIPTION OF MODES OF PROCUREMENT 4.1 PROCUREMENT PLAN AND PROCEDURES Before undertaking procurement, specific budget provision should be available for meeting the expenditure in the financial year in which it is to be incurred. A) PROCUREMENT PLAN B) Preparation of a procurement plan is an essential requirement. Procurement plan covering civil works, equipment, goods, consultancy services and resource support shall be prepared on a firm basis for the first year of the program and on a tentative basis for the subsequent years. Procurement plan shall be prepared every year for proper monitoring and execution. Procurement plan shall be prepared contract wise. Method of purchase shall be based on the aggregate value of the package/lots, urgency of the demand, type of goods/services and availability of different sources of supply etc. Limit of aggregate value of package/lots applicable to the particular procurement procedure shall be strictly adhered to. It shall be ensured that the procurement is based strictly on actual need. PROCUREMENT STEPS The procurement procedure for procurement of goods and works broadly consists of the following Steps: 72 APMDP Operations Manual PROCUREMENT STEPS Assessment of requirements Deciding procurement strategy Mode of procurement Preparation of bidding documents Advertising – Invitation For Bids Issue/sale of bidding documents Opening of bids Evaluation of the bids Award of contract and publication of Award Inspection and testing Notification of delivery Receipt of consignment 73 APMDP Operations Manual 4.2 FORECASTING: ASSESSMENT OF THE REQUIREMENT Bulk requirement of the stores for centralized procurement and the procurement at the level of ULBs should be assessed prior to the beginning of the financial year. In order to obtain competitive prices, procurement action should be initiated in accordance with the purchase procedures. While forecasting the requirement, following factors should be considered: Average time period required in complete procurement cycle (4 months). Longer procurement cycle in exceptional circumstances The trends in usage at the time of requirement. Current stock of the store, where the stock is located, when is the product due to reach the expiry date and what is the projected time scale for distribution. Storage capacity for receiving the bulk consignment. In case the storage capacity is limited, it would be necessary that the procurement/supply of commodities is phased over time rather than being received as a single consignment. List of consignees and their storage capacity. The problems if any, encountered in the past. Consolidating several procurement requirements can offer potential savings through price discounts and reduces the purchaser's administrative cost associated with having to process multiple bids and contracts. 4.3 PROCUREMENT STRATEGY It is important to agree on the procurement strategy before initiating the procurement process. For civil works, options like work contract on lump-sum basis or based on bill of quantities can be explored. The procurement strategy should cover: Key objectives of the procurement for the project; Chosen procurement option; Chosen procurement route (Open, Restricted, Single Source) Key milestones (check that enough time is allowed) Key documents e.g. requirement specifications. Key factors influencing the procurement strategy relate to the degree of complexity, innovation and uncertainty about the requirement, together with the time needed to achieve a successful outcome. 4.4 MODE OF PROCUREMENT The methods of procurement normally followed are:i. ii. iii. iv. International Competitive Bidding (ICB) National Competitive Bidding (NCB) Shopping Single tender/Direct Contracting The EPC method of procurement aould also be added upon finalization of agreed bid document between the bank and GoAP. 74 APMDP Operations Manual Slicing/packaging/lots shall be appropriately reviewed to avoid fragmentation to the extent practicable. Whenever bids are invited concurrently for several contracts in a package and cross discounts are invited, the aggregate value of the total package will form the basis to determine the procurement method as well as the review requirement. 4.4.1 INTERNATIONAL COMPETITIVE BIDDING (ICB) This method is generally adopted where the supplies need import and foreign firms are expected to participate irrespective of the value. In case of APURMS procurement this method is adopted where the estimated value of procurement is more than US $ 500,000 equivalent per contract for goods and US $ 5,000,000 equivalent per contract for works. 75 APMDP Operations Manual REQUIREMENT: For projects that include ICB, the Borrower is required to prepare and submit to the Bank a draft General Procurement Notice. The Bank will arrange for its publication in the UNDB online and in the dgMarket. Apart from wide publicity nationally, invitation to bid shall also be published in UNDB online and in dgMarket and shall be forwarded to Embassies and trade representatives of the countries of likely suppliers/contractors of the goods and works and also to those who have expressed interest in response to the general procurement notice Use of Standard Bidding Documents. Sale of bidding documents should start only after publication of invitation to bid Bidding period should be 45 to 90 days from the date of start of the sale of bidding document Other procedure for ICB will broadly be as specified in the Standard Bidding Documents and Procurement Guidelines of the Bank. 4.4.2 NATIONAL COMPETITIVE BIDDING (NCB) i. NCB is the competitive bidding procedure normally used for public procurement in the country and may be the most efficient and economic way of procuring goods or works. The procedures shall provide for adequate competition in order to ensure reasonable prices. The method to be used in the evaluation of tenders and the award of contracts shall be made known to all bidders and shall not be applied arbitrarily. ii. NCB is adopted normal1y where the contract value is between US $ 20,000 and US $ 500,000 for goods and between US $ 20,000 and US $ 5,000,000 for works in case of APURMS procurement. iii. Civil works, and also goods, could be procured under contracts awarded in accordance with the procedures prescribed under NCB. iv. Various steps involved in procurement under NCB procedure have been enumerated in para 4.1 (B). v. Notification/Advertising: Timely notification of bidding opportunities is essential in competitive bidding: (a) (b) Invitation to bid shall be published in at least one English newspaper with nation wide circulation and one regional language daily. If the advertisement is for more than one item, it should also be indicated whether the evaluation would be itemwise or as a package. The advertisement should also be placed on the website of the department. If it is a condition in the invitation for tender that Bid Security is to be submitted by the supplier/ contractor, the bid of a supplier/ contractor not complying with this requirement, shall be rejected. The acceptable forms of bid security will be mentioned in the bidding document. The amount of bid security shall be decided, taking into account all the items in a package. Once it is decided that the contract is for a package, the bid security for that package is to be indicated and will not be changed according to each item subsequently. 76 APMDP Operations Manual (c) (d) (e) vi. The last date for receipt of bids shall be the day following the date for close of the sale of tender documents. Bidding period shall not be less than 30 days from the date of start of sale of tender documents. Bids can be sold from different places but shall be received at one place only. Bids should normally be opened half an hour after the deadline for submission. Bidding Documents: Sample bidding documents for different varieties of works, to be used under the World Bank aided projects are available on the website of the World Bank. These documents are complete in them and can be used after slight changes according to the requirement of procuring units. Sale of bidding document should begin only after the publication of Invitation For Bids in the newspapers. The bidding documents shall furnish all information necessary for a prospective bidder to prepare its bid for the goods and works to be provided. Bidding documents should be made available to all bidders regardless of their registration status. Clarity of Bidding Documents: Bidding documents shall clearly and precisely specify the work to be carried out, location of the work, goods to be supplied, place of delivery or installation, schedule for delivery or completion, technical specifications, minimum performance requirement, warranty and maintenance requirements, and method of evaluation. The basis for bid evaluation and selection of the lowest technically suitable and responsive bidder shall be clearly outlined in the Instructions to Bidders. Bidding documents should state clearly whether the bid prices will be fixed or price adjustments will be allowed to reflect any changes in major cost components of the contract. vii. Standards and Technical Specifications: The implementing agency shall specify the generally accepted standards of technical specifications. Unbiased technical specifications shall be prepared with no mention of brand names and catalogue numbers. In case the item to be procured is not covered under BIS and specifications are to be framed, specifications may be prepared by a committee of experts associating the trade, if required. The functional performance, design, quality, packaging and additional requirements should be clearly spelt out in the specifications. The specifications should be generic and should not appear to favour a particular brand or supplier. Technical specifications, bill of quantities and civil drawings should be prepared before start of the bidding process.. Specifications for the articles to be procured should be drawn up in every case with clarity. No deviations from the specifications after opening of tender should be allowed. viii. Validity of Tender: Bidders shall be required to submit bids valid for the period specified in the bidding documents. Normally, the bid validity period shall not exceed 90 days. Bid Security: Bid security of normally about 2% of the estimated cost of the item or works shall be the appropriate amount, which should be indicated, as a specific amount. The bid security shall be in the form of a demand draft/ banker's cheque/ bank guarantee from a scheduled bank, which should be valid for 45 days beyond the validity period of the bid. The bid security of unsuccessful bidders shall be refunded soon after the finalization of bidding process. The bid security shall be forfeited in the event of withdrawal of the bid within the original validity or if the successful bidder fails to execute necessary agreement within the period specified. ix. 77 APMDP Operations Manual x. xi. xii. xiii. Pre-bid Conference: A pre-bid conference (date/ venue to be indicated in the bid documents) may be arranged if required, wherein potential bidders may meet the purchaser, copy of minutes of the pre-bid conference should also be supplied along with the bid document sold to the parties purchasing the documents subsequent to the pre-bid conference. Terms and Methods of Payment: Payment terms shall be in accordance with the specific goods and works. Tender documents should specify the payment method and terms offered. Conditions of Contract: The contract documents shall clearly define the scope of work to be performed, the goods to be supplied, the rights and obligations of the implementing agency and of the supplier or contractor and the functions and authority of the engineer, architect or construction manager, (if one is employed by the implementation agency) in the supervision and administration of the contract. Special conditions related to specific items/ cases should be clearly included in the tender documents. Performance Security: a. Bidding document for works and goods shall require security in an amount sufficient to protect the implementation agency in case of breach of contract by the contractor. This shall be in the form of a bank guarantee or any other instrument specified in the bidding document. The amount of performance guarantee shall normally be 5 % of contract price valid upto 28 days after the date of expiry of defects liability period/ warranty period, as applicable. b. The performance security deposit shall be refunded within one month of the completion of supply of goods/works or expiry of guarantee/warranty/defect liability period (as mentioned above). c. The performance security deposit shall be forfeited in case any terms and conditions of the contract are infringed or the bidder fails to make complete supply satisfactorily or complete the work within the delivery/ completion period. xiv. Retention Money: In contracts for works, normally 5-10 % of contract price shall be recovered as retention money. 50 % of such retention money shall be retained till completion of the whole of the works and 50 % shall be retained till the end of defects liability period. xv. Liquidated Damages: Provision for liquidated damages shall be included in the conditions of contract to guard against delays in delivery of goods or completion of works. xvi. Bid Opening: The time for bid opening should not be more than half an hour after the deadline for submission of bids Bids shall be opened in public. The bidders or their representatives shall be allowed to be present at the time of opening of bids. All bids received should be opened. No bid should be rejected at bid opening time except for late bids. Late bids shall be returned to the bidders unopened. The name of the bidder and total amount of each bid along with important conditions like excise duty, sales tax, delivery terms, delivery period, special conditions, if any, shall be read out at the time of bid opening. Spot comparative statement (minutes of bid opening) shall be prepared by the bid opening officials and should be signed. 78 APMDP Operations Manual xvii. Confidentiality: After the public opening of bids, information relating to the examination, clarification, and evaluation of bids and recommendations concerning awards shall not be disclosed to bidders or other persons not officially concerned with this process until the successful bidder is notified of the award of the contract. xviii. Examination of tenders: a. The implementing agency shall ascertain whether the bids Meet the eligibility requirements specified; Have been properly signed; Are accompanied by the required earnest money valid for the period specified in the tender documents; Are substantially responsive to the bidding documents; and Have the technical and financial capability to successfully execute the contract. For ensuring technical and financial capacity, a minimum turnover requirement and specific experience requirement should be prescribed in bidding documents. Are otherwise generally in order. b. If a bid is not substantially responsive, that is, it contains material deviations from or reservations to the terms, conditions and specifications in the tender documents, it shall not be considered further. The bidder shall not be permitted to correct or withdraw material deviations or reservations once bids have been opened. xix. Extension of validity of bids: As far as possible contract should be finalized within the original validity of the bids. An extension of bid validity, if justified by exceptional circumstances with the approval of next higher authority and after obtaining World Bank’s no objection where required, shall be requested in writing from all the bidders (of valid bids only) before the expiry date. Bidders shall have the right to refuse to grant such an extension without forfeiting their bid security, but those who are willing to extend the validity of their bid shall also be required to provide a suitable extension of bid security. xx. Bid evaluation and Comparison: The purpose of bid evaluation is to determine the cost to the implementing agency of each bid in a manner that permits a comparison based on evaluated cost. The bid with the lowest evaluated cost and substantially responsive, but not necessarily with the lowest submitted price, should be selected for award. The bid price read out at the bid opening shall be adjusted to correct any arithmetical errors for the purpose of evaluation. Evaluation of bids should be made strictly in terms of the provisions in the bidding documents to ensure compliance with the commercial and technical aspects. Conditional discounts offered by the bidders shall not be taken into account for evaluation. Cross discounts shall be taken into account to determine the lowest cost combination of the contracts. The past performance of the suppliers/ contractors should also be taken into account while evaluating the bids. (The method of taking the past performance into account should be indicated in 79 APMDP Operations Manual bidding documents). The implementing agency shall prepare a detailed report on the evaluation and recommendations for the award of the contract. xxi. Post-qualification of Bidders: If bidders have not been pre-qualified, the implementing agency shall determine whether the bidder whose bid has been determined to be the lowest evaluated bid, has the capability and resources to effectively carry out the contract, and if the bidder does not meet the specified criteria, the bid shall be rejected. In such an event, the implementing agency shall make a similar determination for the next-lowest evaluated bidder and so on. xxii. Rejection of All Tenders: Bidding documents usually provide that implementing agency may reject all bids. Rejection of all bids is justified when none of the bids are substantially responsive. However, lack of competition shall not be determined solely on the basis of the number of bidders. If all bids are rejected, the implementing agency shall review the causes, justifying the rejection and consider making revisions to the conditions of contract, design and specifications, scope of the contract, or a combination of these, before inviting fresh tenders. If the rejection of all bids is due to lack of competition, wider advertising shall be considered. If the rejection is due to most or all of the bids being non-responsive, fresh bids may be invited. Rejection of all bids and re-inviting new bids, irrespective of value shall always be after approval of the competent authority as per delegation of authority attached and with the approval of the World Bank. 4.4.3 SHOPPING Shopping is a procurement method based on comparing price quotations obtained from several suppliers, usually at least three to ensure competitive prices. Under International Shopping quotations should be solicited from at least three suppliers in two different countries. Format as per Appendix I may be used to invite quotations. Goods estimated to cost below the financial ceiling mentioned in the table titled “Threshold Values” in Chapter VI per contract may be procured under the Shopping. It is an appropriate method for procuring readily available off-the-shelf goods or standard specification commodities that are small in value and are ordinarily available from more than one source. Approval of competent authority may be obtained for items to be purchased along with specifications, estimated costs and agencies from whom quotations should be invited. The requests for quotations shall be made indicating the description, specifications, quantity time and place of delivery. If the quotations are called for more than one item, it should also be indicated whether the evaluation would be item-wise or as a package. 80 APMDP Operations Manual 4.4.4 SINGLE BID / DIRECT CONTRACTING The Single Bid System may be adopted in case of articles which are specifically certified as of proprietary nature or in case of extreme emergency. The single bid system without competition shall be an appropriate method under the following circumstances: extension of an existing contract for goods or works awarded in accordance with the prescribed procedure for additional goods or works; Standardization of equipment or spare parts to be compatible with existing equipment may justify additional purchases from the original supplier; The required item is proprietary and obtainable only from one source; Need for early delivery to avoid costly delays; In exceptional cases, such as in response to natural disasters; and The estimated cost of procurement lies within the threshold value for Direct Contracting. 4.5 AWARD OF CONTRACT Implementing agency shall award the contract, within the original period of the validity of bids, to the bidder who meets the bidding conditions in all aspects, has the necessary technical capability and financial resources and whose bid is substantially responsive to the bidding documents and has the lowest evaluated cost. The purchaser can, if it so desires, satisfy itself that the manufacturer to whom the contract is proposed to be awarded, has the capability to produce the required quantity and also of required standards. Single bid should also be considered for award, if it is determined that publicity was adequate, bid specification/ conditions were not restrictive or unclear, and bid price is considered reasonable. 4.6 RESOLUTION OF DISPUTES The dispute resolution methodology should be very clearly indicated in the contract document. As far as possible, disputes may be resolved with mutual agreement between purchaser and buyer through alternate dispute resolution methods to avoid going through arbitration and litigation stage. There are a number of possible causes of disputes during the execution of contract. These may involve: 4.7 Interpretation of the terms and conditions of the contract Delay in delivery/ completion of the works Delay in release of payment Condition of the items on arrival at consignee end and after delivery Rate of the items, variation in quantity in civil works contracts etc. Design/ specification issues. LAWS GOVERNING THE CONTRACT The contract shall be governed by the laws of India in force The court of the place from where the acceptance of bid has been issued shall alone have jurisdiction to decide any dispute arising out of or in respect of the contract. 81 APMDP Operations Manual 4.8 Irrespective of the place of delivery, the place of performance or place of payment under the contract or the place of issue of advance intimation of acceptance of tender, the contract shall be deemed to have been made at the place from where the acceptance of the tender has been issued. ARBITRATION (TO BE REVIEWED AND MODIFIED TO INCLUDE UNICTRAL FOR FOREIGN BIDDERS) In the event of any question, dispute or difference arising under the contract conditions or any special conditions of contract or in connection with the contract (except as to any matters the decision of which is specially provided for by these or the special conditions), the same shall be referred to the sole arbitration of an officer, from the department other than the department who has decided the contract. The arbitrator should be having sufficient knowledge of law and shall be appointed as per the laid down procedure. The award of the arbitrator shall be final and binding on the parties to this contract. ii. In the event of the arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, or his award being set aside by the court for any reason, it shall be lawful for the purchaser to appoint another arbitrator in place of the outgoing arbitrator in the manner aforesaid. iii. It is further a term of the contract that no person other than the person appointed by the purchaser as aforesaid should act as arbitrator and that, if for any reason that is not possible, the matter shall be referred to President, Institution of Engineers, India, for nominating an arbitrator. iv. The arbitrator may from time, with the consent of all parties to the contract, enlarge the time for making the award. v. Upon every and any such reference, the assessment of the costs incidental to the reference and award respectively shall be at the discretion of the arbitrator vi. Subject to as aforesaid, The Arbitration and Conciliation Act, amended up to date and the rules there under and any statutory modifications thereof for the time being in force, shall be deemed to apply to the Arbitration proceedings under this clause. vii. If the value of the claim in a reference exceeds Rs. 1 lakh the arbitrator shall give a reasoned award viii. The venue of arbitration shall be the place from which formal acceptance of tender is issued or such other place as the purchaser at his discretion may determine. ix. Suitable clause may be incorporated in the tender enquiry to obtain the consent of the bidder to accept the arbitration clause. i. 4.9 EXTENSION OF CONTRACT Normally contract once awarded should not be extended. Under exceptional circumstances, extension of existing contracts up to 25% of the original contract value may be considered, if it is justifiable on economic grounds, subject to approval of the competent Authority as per the Schedule of Delegation of Powers and with the prior approval of the Bank wherever required. 4.10 COMPLAINT REDRESSAL MECHANISM (ALSO APPLICABLE TO PROCUREMENT OF SERVICES) In order to deal with the complaints received from the contractors/ suppliers effectively, a complaint handling mechanism should be available at the MSU level as well as at ULB level, and immediate 82 APMDP Operations Manual action should be initiated on receipt of complaints to redress the grievances. All complaints should be handled at a level higher than that of the level at which the procurement process is being undertaken and the allegations made in the complaints should be thoroughly enquired into, and if found correct, appropriate remedial measure should be taken by the appropriate authorities. In case any individual staff is found responsible, suitable disciplinary proceedings should be initiated against such staff under the applicable government conduct rules. The existing provisions under the Indian law including the instructions of central vigilance commission should be followed in this regard. 83 APMDP Operations Manual CHAPTER- V PROCUREMENT OF WORKS, GOODS AND SERVICES (OTHER THAN CONSULTANCY SERVICES) AT MSU& ULB LEVEL 6.1 GENERAL PROCUREMENT CELL The procurement at MSU, ULB levels needs to be closely supervised and monitored at each stage of procurement. In order to ensure transparency, effective control for timely supply of goods and services and delivery of the Project within the stipulated period, a Procurement Cell has been established at MSU. One of the PHED superintending engineers deputed to MSU has been designated as Procurement Specialist (Goods and Works) since most procurement is that of works under infrastructure sub-projects. The second Superintending Engineer will be responsible for hiring of consultants, and monitoring the progress of the contract implementation, including the collection of monthly progress reports from the ULBs based on which funds will be released to the ULBs. S/he will also be responsible for establishing a complaint monitoring system which will capture all complaints received either by the PMU or by the ULBs. The complaint redressal will be done in coordination with the Procurement Specialist or ULB commissioner as the case may be. This system will be monitored by the Project Director once every month. Groups will be formed under the Procurement Specialist, to manage procurement for approximately 20 ULBs each. Each group will consist of three people of the rank of one executive engineer and two deputy executive engineers. The procurement cell will guide and monitor the process of procurement of all goods, works and services required under the Project. It will be responsible for dissemination of information and the trainings required for procurement. The procurement cell shall ensure the following: (i) (ii) (iii) (iv) (v) The specification of the type, quality and quantity of goods to be procured, keeping in view the specific needs of the consumer. The specifications so worked out should meet the basic needs without including superfluous and non-essential features, which may result in unwarranted expenditure. Care should also be taken to avoid purchasing quantities in excess of the requirement to avoid carrying costs and wastages. Bids should be invited following a fair, transparent and reasonable procedure. The procuring authority should be satisfied that the bid of the selected bidder is responsive both technically and commercially and adequately meets the requirement in all respects. The procuring authority should be satisfied that the price of the selected bid is reasonable and consistent with the quality required. At each stage of procurement the concerned procuring authority must place on record, in precise terms, the considerations, which weighed with it while taking the particular procurement decision. Specific areas for dissemination of information by procurement cell are: 84 APMDP Operations Manual (i) (ii) (iii) (iv) (v) (vi) (vii) Compilation of list of items to be procured with full nomenclature, specifications and brand names only if unavoidable and in such cases bids should be invited to ‘brand names or equivalents’. Compilation of list of manufactures and their authorized dealers in the State. Circulation of rates at which non-local items are being purchased by various ULBs. Circulation of established rates of non-local items. Circulation of cases of poor performance of suppliers/contractors Suspension of business dealings or black listing [see note below] of suppliers/ contractors in appropriate cases, such as fraud, corruption, non performance, misrepresentation, collusive bidding, etc. Circulation of cases of supply of sub-standard quality of material/works and rejections. Note: NCB - The World Bank, may accept the debarment of a domestic firm from bidding on a Bank financed NCB tender on the basis of a previous debarment by the national authorities provided that (i) the debarment was enacted at least as part of the agreed NCB provisions, and (ii) the Bank has satisfied itself that the procedure followed to debar the firm afforded the firm reasonable due process and the grounds thereof. ICB – The World Bank does not generally accept national debarment for debarring under ICB. However, in exceptional circumstances decided on case-by-case basis, the Bank may rely on the borrower’s representation to agree to exclude a nationally debarred firm from participation in a Bank financed ICB tender on the basis of the firm’s lack of qualifications. Training Activities: (i) (ii) Train Project Managers, Accounts Managers and other staff involved in procurement functions. Train ULB staff and officers in the procurement procedures. The trainings shall be carried out by the Capacity Enhancement Cell as per the proposal of the Procurement Cell. Support to ULBs During the first two years the responsibility of the procurement manager and his team will be to: (i) Prepare and maintain the procurement plan. (ii) Manage the design of the procurement packages for the approved DPRs in consultation with the DPR design consultants and ULB (Municipal Engineer). (iii) Initiate the procurement for various packages as per the agreed procurement procedures (preparation of tender notice and advertisement, bidding documents, receiving bids, bid evaluation and recommendation for award) (iv) Lead the bid evaluation committees which will include appropriate ULB representatives. The evaluation committee will make its recommendation for award to the tender committee, which will comprise ULB chairperson or commissioner, Project Director, Chief Engineer and Superintending Engineer. Since the objective of the project is to build ULB capacities, extensive procurement capacity building program will be implemented by the MSU to bring ULBs’ capacity to conduct its own procurement. 85 APMDP Operations Manual This program will first target ULBs with subprojects to be implemented immediately after the project start, and other ULBs will be added subsequently. MSU will hire a consulting firm who will design and deliver the program. The consultant will design the training modules to cater to ULB managers (Commissioners) focused on monitoring and coordination, ULB Engineers (focused on execution) and ULB Accountants. A plan for training these in all ULBs with initial subprojects will be implemented in the first two years of implementation. The consultant will report to the Project Director who will measure the effectiveness of the training, identify gaps and help prepare gap closure plans. Under the PCBP, workshops will be organized periodically for sharing best practices. After the first two years, the consultant’s training contract may be extended or the MSU core procurement team may take over the large part of the training. After the initial two year period, or sooner if it is judged that sufficient capacity for procurement has been developed, the leading role will be turned over to the ULBs and the MSU procurement team will turn to a supporting role in the above steps. From the beginning, ULBs will exercise its legal authority as the owner of the subprojects. ULB chairperson or commissioner will issue the letter of acceptance (LOA) after the contract award recommendation is approved by the tender committee, sign the contract, and issue the work order for commencement of the works. The procurement manager will monitor and ensure that the LOA and that the contract is signed within specified time limits, and the contract implementation is supervised and managed properly. A key challenge during implementation will be balancing the accountability and risks in ULB procurement. The issue is likely to diminish over time, but to remain at least for some (smaller) ULBs even in advanced stages of implementation. In the steady state, MSU will be responsible for managerial oversight and review, and drive reforms at the ULB level. In the initial 24 months, as ULB capacity needs to be built, MSU will play a leading role with active involvement of the ULB at each stage of procurement. While MSU will retain the right for final clearance throughout the project, the roles and responsibilities of the ULBs will increase once they are trained in Bank procurement procedures and once their capacities have been assessed. 6.2 PROCUREMENT PLAN The procurement plan will indicate contract wise procurement of goods, works and services for the year keeping in view the availability of funds in accordance with budget provision for the year and also for the subsequent year consistent with future requirement. The plan shall be scheduled according to priority as fixed by the committee. The prioritized procurement schedule shall be estimated item-wise, value of each contract displayed in the prescribed format as below: Organisation Sl. No. Package No. For goods & works:Description of Works/Goods 1 2 3 4 Estimate Estimate Methods of Design/Invest Review Expected Prepared & d Cost Procurement igation by Bank Bid Sanctioned (Rs. In ICB/NCB/Othe Completed (Prior/P Opening (Date and Lakhs) rs (Date) ost) Date Value) 5 6 7 86 8 9 10 APMDP Operations Manual Organisation Sl. No. Package No. For Consultancy Services:Description of Services 1 2 3 4 Estimated Advertisement Review by Cost Methods of for Short Expected Proposal Bank (Rs. In Selection listing (EOI) Submission Date (Prior/Post) Lakhs) (Date) 5 6 7 8 9 No procurement will be undertaken unless it is a part of the procurement plan. The initial procurement plan dt. ________________ has been approved by the World Bank. Any subsequent changes will need to be agreed with the Bank during supervision missions. 6.3 POWERS OF APPROVAL FOR AWARD OF CONTRACTS Lowest evaluated responsive bids valued upto Rs. 10 lakhs (USD 20,000 equivalent limit for shopping/DGS&D) shall be approved by Procurement Committee at MSU level subject to the recommended prices being within 10% above the estimated value of the goods, works and services subject to prior review of the World Bank, wherever required. Above this limit, the tenders shall be submitted to Steering Committee for approval. The Procurement Committee at MSU shall prepare the comparative statement and submit it along with the tender documents price bids etc. to the Steering Committee with its recommendations for approval. The Steering Committee shall have full powers for approval of rates for procurement of goods, works and services. Rates of works, goods and services administratively approved shall be the guideline for approval of rates received against tenders. After the rates are approved, Director MSU shall promptly execute the contract Agreement with the successful bidder as per terms and conditions of Contract in the standard format of the Bank. Bid documents shall form part of such Contracts. Chapter III & IV may be referred to, for procedures for notice inviting tender, preparation of bid documents, opening of tenders, evaluation, and tender award and signing of contract etc. 6.3.1 RATE CONTRACT Rate Contracts of DGS&D may be operated for speedy procurement of goods as per procedure outlined below; A. For procurement of goods valued upto the threshold for shopping shown in para 6.6. Rate Contracts of DGS&D shall be acceptable as an alternative to Shopping procedure. B. For procurement of goods valued upto the threshold for Direct Contracting shown in para 6.6. Rate Contracts of DGS&D may be used for procurement of such items also. 6.3.2 PRINTING /PUBLISHING/MISCELLANEOUS WORKS Printers have devised their units of printing charges for text, figures, drawings, photographs etc. Shopping procedures shall be adopted for such procurement if value of each contract is expected to be within the shopping threshold limit for good. The MSU shall give their requirements of printing matter including figures, writings, photographs etc. design of brochures, cover design of books / reports etc. to obtain sealed quotations from the printers. Procedures and guidelines 87 APMDP Operations Manual given in Chapter IV shall be followed for Shopping for the printing, publishing and other such miscellaneous procurements for the services, technical assistance, project management and capacity enhancement components. 6.3.3 HIRING OF VEHICLES: Vehicles shall be hired on daily/ monthly/ yearly basis as per requirement. Quotations shall be called from at least three travel agencies under shopping procedures provided the estimated value is below the Shopping threshold. 6.3.4 Other procurements Procurement of Consultants Procurement of NGOs Procurement of goods for office use Procurement of individual Consultant - As given in Chapter III As given in Chapter III As given in Chapter IV As given in Chapter III 6.4 POWERS FOR PROCUREMENT OF GOODS, WORKS AND SERVICES Under the services components of the project the HR Policy alongwith the limits and powers of sanction of remunerations and allowances are mentioned in Annexure 19. With regard to works and goods the procurements for all works at ULBs would be done by ULBs with the inspection of MSU and all other procurement of works and funds would be by MSU of APUIF as per Table 2 on Chapter 1 of this manual, irrespecitive of financial limit and as per the World Bank procuremet procedure only. 6.5 POWER OF APPROVAL FOR AWARD OF CONTRACT Powers for award of contracts shall rest with Director MSU/CDMA. MSU shall process the tender documents and send the comparative statement along with all the papers and their recommendation to CDMA/Director MSU/PMU for approval of award of contract as per the limit mentioned in table 2.5. After approval by the CDMA/Director, PMU, designated officer at PMU/MSU under the orders of CDMA shall properly enter into agreement with the successful bidder. The process of tendering shall be followed as per procedure outlined in Chapters III & IV of the Manual. 6.6 THRESHOLD VALUES (a) Threshold values for works and goods under different methods of procurement are given below: ICB, contracts above US $ 5 million equivalent per contract for works and US $ 500,000 equivalent per contract for goods in each case. NCB, contracts up to US $ 5 million equivalent per contract for works and up to US $ 500,000 equivalent per contract for goods in each case. Direct Contracting, proprietary items, such as spare parts, software, books, periodicals etc. up to US $ 500 equivalent per contract meeting requirements stated in the Procurement manual and petty items costing up to US $ 500 equivalent per contract may be procured through Direct Contracting up to a cumulative value of US $ 5,000 88 APMDP Operations Manual Note: Slicing/Packaging/Lots shall be appropriately reviewed to avoid fragmentation to the extent practicable. Whenever bids are invited concurrently for several contracts in a package and cross discounts are invited, the aggregate value of the total package will form the basis to determine the procurement method as well as the review requirement, (b) Threshold values for consultancy: As per the procurement plan agreed with the Bank. (c) Review Requirements: Prior Review: Goods and Works: All ICB contracts for goods estimated to cost above $ 300,000 per contract and above $ 5 million for works shall be subject to prior review. Consultancy Services: All contracts valued over US$ 500,000 equivalent for firms including NGO services and above US$ 200,000 equivalent for individuals. Post Review: All contracts not covered under prior review will be subject to post award review. The Terms of Reference for the auditors, to be engaged by the GoAP, would also include procurement review of selected contracts. The Bank on its part will review the reports of the Auditors in addition to conducting its own post review on sample basis. 89 APMDP Operations Manual ANNEXURE 2: SUB-PROJECT CYCLE APMDP Operations Manual ANNEXURE 2: Sub-project Cycle Cycle Issue of Work Order upon Audit Update Agreement by APUIF with ULBs Work Procurements by ULB (with assistance from ULBs) Empowered Committee Approval by Steering Committee APUIF – Financial appraisal Technical Sanction by PHED Finalizing DPRs & Bid • Line Dept.clearance • Council Resolution • Other necessary clearances TA-Technical,Social, Environmental and OM Appraisal Initial Screening Report PAC / Steering Committee Approval MSU - CDMA Initial Project proposals by ULBs TA process- Preparation of detailed design & estimates, Social / Environmental / Financial / Economical Analysis/ Project formulation and consultation at ULB level 90 APMDP Operations Manual ANNEXURE 3: FUNCTIONS OF WORKING GROUPS AT THE ULB LEVEL APMDP Operations Manual Annexure 3: Composition and Functions of MDC and Working Groups at the ULB Level 1.1. Municipal Development Committee The Municipal Development Committee (MDC) shall comprise of a maximum of 22 members. The recommended composition of the Committee is as follows:a. Mayor / Municipal Chairperson (Chairperson) b. Local MPs c. Local MLAs d. Vice-Chairperson of Urban Development Authority, where existing e. Deputy Mayor / Vice-Chairperson f. Standing Committee Chairperson (in case of Municipal Corporations) g. All leaders of the major opposition parties in the Council h. Three councilors in proportion to their party strength i. Two to five representatives of TLF/SLF. j. Commissioner (Member – Convener) 1.2. Functions a. The MDC shall provide the strategic guidance and support required to the MTF and Working Groups to carry out their tasks for preparation and implementation of the project. It’s most important function is to articulate methods to mainstream and sustain the initiatives of APURMSP. The MDC should ensure that the principles of the project listed below are not compromised at any stage. In particular functions of MDC include: a. Participatory and consultative approach to planning and implementation b. Focus on bridging the deficiencies in urban services and environmental infrastructure development. c. Reforms to support and sustain performance improvement and poverty reduction d. Convergence of programmes and resources available for social development 1.3 Working Group 1 (WG 1) :WG 1 shall comprise of a maximum of 25 members. The recommended composition of the group is as follows: a. b. c. d. e. f. g. h. Mayor / Chairperson – Chairperson Five or six councilors (in proportion to party strength) Two women Councillors nominated by all the women Councillors. Two representatives of local higher educational institutions Three representatives of TLF/SLF. Two representatives of colony welfare associations Two professionals like Advocates, Doctors, Charted Accountants, Bankers, etc. Commissioner 91 APMDP Operations Manual i. Municipal Engineer and one other officer to be nominated by the Commissioner j. Town project officer / poverty resource person k. Municipal Commissioner or an officer nominated by the Commissioner – Member – Convener. 1.4 Functions :The WG 1 is basically responsible for reforms and municipal performance improvement. In particular functions of WG 1 include: a. Review over all municipal performance and progress of self-funded, State or Central Government funded and reforms; review the reform action plans that may have been prepared earlier; b. Articulate short term and long term priority reform areas c. Preparation of Capacity Enhancement Plan d. Determine mechanisms and resources for the project proposals e. Associate and support appraisal process. f. Provide guidance and support for programme implementation g. Review and suggest methods to strengthen participatory process h. Monitor implementation of reform proposals. i. Review poverty reduction programmers implemented by the project town j. Ensure convergence in implementation of poverty reduction programmers k. 1.5 Working Group 2 (WG 2):WG 2 comprises of a maximum of 25 members. The recommended composition of the Committee is as follows: a. b. c. d. e. f. g. h. i. j. Mayor / Chairperson – Chairman Commissioner – Co-Chairman Six Councillors ( in proportion to party strength) Two to four representatives of TLF/SLF SE (PHED) or representative of PHED Town Project Officer / Community Organizer nominated by the Commissioner Town Planning Officer Two expert engineers (not employees of municipality) Special invitees – not more than 5 Municipal Engineer – Member – Convener. 1.6 Functions :The WG 2 is responsible for aspects relating to the infrastructure provision and its operation and maintenance. In particular its functions include: a. Review of municipal infrastructure data base for planning and appraisal b. Review of progress of infrastructure provision in project town as a whole c. Review environmental statement and impacts 92 APMDP Operations Manual d. e. f. g. h. Review and plan Town-wide infrastructure projects Oversee preparation of O & M plan along with budget Associate with project appraisal process Monitor implementation of infrastructure projects and O & M activities Ensure convergence in planning and implementation of infrastructure project with other components 93 APMDP Operations Manual Annexure – 3(A) Process for preparation of Initial Project Proposal:20. The initial project proposal comprises of preparation of three separate plans as shown hereunder:a. Municipal Reforms Action Plan (MRAP) b. Municipal Capacity Enhancement Action Plan (MCEAP) c. Municipal Infrastructure Improvement Plan (MIIP) Municipal Reforms Action Plan (MRAP):21. The reform proposals already initiated are in different stages of implementation. The municipality shall prepare the MRAP, consisting of the following reform agenda i. Adoption of accrual based double entry system of Accounting in ULBs. ii. Reforms in taxes and non-taxes to improve coverage and collection of taxes and non-taxes and improvement of finances. iii. Levy of reasonable user charges. iv. Implementation of Citizen Charter and establishment of Call Center v. Empowerment of urban poor. The Reform Action plan shall be prepared in check list of reforms as indicated in annexure 3(B) by the working group 1. Municipal Capacity Enhancement Action Plan (MCEAP) 22. It is considered necessary that the infrastructure created under the project shall be maintained efficiently and sustainably so that the service improvements do happen within the Municipalities and the citizens do benefit in the long run. To achieve this objective ULBs have to improve their institutional capacity and finances for O&M and service improvement of the proposed infrastructure services. 23. ULBs have to prepare capacity enhancement action plan covering the following items:i. ii. iii. iv. Institutional option for maintenance of the infrastructure Capacity building measures for this option Institutional strengthening measures for O&M Revenue mobilization plan 24. Working group 1 shall prepare Municipal Capacity Enhancement Action Plan (MCEAP) as indicated in Annexure 3(c ). Working group 1 shall meet four to five times for preparation of MRAP, MCEAP. Municipal Infrastructure Improvement Plan (MIIP):25. Improvement of Town-wide Urban Infrastructure is one of the objectives of APMDP. Environmental infrastructure improvement includes provision of roads, drains, water supply, solid waste management, sanitation, street lighting and community centers. The prioritization will be based on the criteria prescribed. The infrastructure improvements shall be prioritized on the following parameters:- 94 APMDP Operations Manual a. b. c. d. e. f. High priority sectoral deficiencies. Approved by Government or has high political support. Maximizes beneficiaries to costs Can be implemented quickly Complements other ongoing or proposed projects. Rehabilitates infrastructure In drought prone and water scarcity towns, the priority shall be given for water supply. Proposals:26. The WG 2 shall meet at least five times and review the needs of infrastructure provision in the town Town wide critical Infrastructure :27. The WG 2 shall discuss in detail the town wide needs of infrastructure and assess the indicative requirement of investments. The funds from various sources like Central and State Governments, municipality and public contributions including loans from various institutions shall also be considered and based on this exercise proposals shall be made under APMDP. The process of identifying the improvements to infrastructure is given below:Data collection:28. Collection of data on existing infrastructure and service provision is first requirement in preparing improvements to infrastructure. This is needed to access deficiencies and prioritize infrastructure requirements. The underlying causes of service deficiencies shall be analyzed. The service deficiencies can be caused by various factors like lack of investment in capital works, poor operation and maintenance etc. 29. Soon after orientation of the officials, the ULB shall collect data in basic sheets as indicated in Annexure 3(D). The data required for preparation of infrastructure improvement include:a. General information about the town b. Information on plans and maps of the town, and c. Infrastructure details. Infrastructure Requirement:30. The requirement of infrastructure and projects shall be identified based on the following aspects:a. Existing infrastructure deficiencies in the town, and b. Future needs based on projected population Data required for preparation of town –wide infrastructure proposals is indicated in Annexure – 3(E). 95 APMDP Operations Manual 31. The projects proposed may, however, address existing infrastructure deficiencies as well as meet the future needs. For example, construction of a new elevated service reservoir may alleviate existing deficiencies and serve new areas. Table 4 of Annexure 3(E) contains pro-forma tables to assist in analyzing the main deficiencies in the town. These tables shall be completed and used during discussions with working group. The same shall be included in the initial project proposal as well as indicated in Annexure 3(E). Assessment of Deficiencies:32. The identification of service and infrastructure deficiencies is critical to prepare infrastructure improvements. This shall be done by carrying out an infrastructure audit by analyzing the data compiled. Existing coverage and levels of service are the main outputs. The data shall be analyzed to determine where services are below standard or do not exist. For example, this shall help in identification of those parts of the town, which do not have piped water supply, or where the per capita water supply is very low. 33. The causes for the poor service shall be determined through a participatory process involving various stakeholders. Immediate and underlying causes for poor services shall be assessed. The municipal engineer shall facilitate the process. The main problem of the service sectors in the town shall be listed. The next step shall be to identify the causes of the problems. The various causes, which shall be looked into include: a. Beyond designed project life i.e. too old b. Overuse i.e. too inadequate for current needs c. Inadequate design d. Inappropriate construction e. Improper operation and maintenance f. Resource constraints, such as insufficient sources for water supply, and g. All, or a combination of the above 34. In order to arrive at the causes of infrastructure and service deficiency, different methods like matrix method, cause and effect diagram, problem tree diagram etc. may be used depending upon their suitability. Table 4 of Annexure 3(E) depicts the matrix method for identification of causes of infrastructure deficiency. Assessment of Future Needs:35. As mentioned earlier, the future needs shall be assessed to arrive at suitable projects and their specifications. Under the future needs, the growth of the town and identification of areas where infrastructure provision can guide growth shall be studied. This shall be done by projecting total future town-wide infrastructure needs based upon a range of growth scenarios. 96 APMDP Operations Manual Design Horizon:36. The future infrastructure requirements shall be assessed on the basis of projected population and service levels. For the infrastructure, the design milestone years shall be 2011, 2021 and 2031. The projections shall be realistic taking into account present coverage, affordability etc. For example, if existing piped water supply coverage is only 30% it is difficult to achieve 100% in 2011 particularly in an ULB with limited resources. Table 2 and 3 of Annexure 3(E) provided guidance for planning future coverage and service levels based on the existing situation. Project Identification:37. For the infrastructure improvement, various projects shall be identified from the following sources:a. b. c. d. Main infrastructure deficiencies identified Development needs of the town Any studies or plans for the town, and Potential projects identified during the process Feasibility Assessment :38. The long list of proposed projects shall be assessed to ensure its feasibility. Each project shall be assessed on various criteria. A brief description of the feasibility criteria is as follows: a. Existing deficiencies : The project address identified service or infrastructure deficiencies b. Future needs: The project addresses the future requirements and guides growth. c. Conformity with plans: The project conforms to environments, land use or town plans and regulations for the area. d. Socially sound: The project provided access to urban infrastructure and services for lowincome as well other disadvantaged groups and improves income generation opportunities through encouraging more investment e. Environmentally sound: The project improves the environment, with minimum negative impacts and complements other proposed environmental improvements. f. Technically feasible: The project is implementable with the proposed design and will be functional on completion. g. Sustainable: The project is sustainable in terms of operational cost and capacity of the agency to maintain. h. Short gestation: The project is executable within a time frame (preferably up to two years) and is free from major litigations. i. Appropriate service levels: The level of service satisfies functional requirements, facilitates implementation and allows effective operation and maintenance. 97 APMDP Operations Manual 39. A set of criteria shall be used to screen potential projects and ensure that projects are technically sound and feasible from environmental, social and institutional aspects. All projects satisfying the feasibility criteria can be included for town-wide critical infrastructure. 40. While some projects may look feasible from these criteria, they may require detailed investigation and designing. There are instances where large drains constructed did not solve the drainage problems, as investigation and design were not properly carried out. In particular, care has to be taken for storm water drainage proposals. Projects requiring detailed studies and be included in town-wide critical infrastructure, but shall be given low priority for the first year. Prioritization of Projects :41. In view of limited resources and affordability of the ULBs, the list of feasible projects shall be prioritized. This shall also take into account management capacity of the ULBs. 42. The feasible projects shall be prioritized on the following criteria:a. High priority sectoral deficiencies: The project which helps in alleviation of high priority problems, such as water supply or storm water drainage, shall be given priority. b. Committed project: The committed project which has the approval of the Government but was not taken up for want of resources shall be given priority. c. Per capita cost: The project with low per capita cost shall be given priority. Costs shall not only include capital cost, but also operation and maintenance and total life cost. d. Short gestation: The project, which can be built within the existing institutional framework; does not involve any major land acquisition and resettlement requirements; and does not require any studies to be carries out etc., shall be given priority e. Complements other projects: The project, which supports other ongoing projects, shall be given priority. f. Rehabilitation of existing infrastructure: Rehabilitation project shall be given priority in view of its cost effectiveness. 43. The projects shall be scored against selected criteria on a scale of 1 to 3. The individual scores for different criteria shall be added to get consolidated score. Project, which stores the highest, shall be first priority and rest in the order of scoring. By applying these criteria to the eligible projects, the prioritized list shall be prepared. The scoring guidelines form project prioritization given in table 7 and 9 of Annexure 3(E) shall be used for prioritization of feasible sub-projects. In case of a tie continues, per capita cost of the sub-projects would be taken into consideration for prioritization. Affordability :44. Once the prioritized list of projects is prepared, affordability is another major consideration. Affordability analysis of the ULB shall be carried out for the recipient, implementing line agency and 98 APMDP Operations Manual the proposed beneficiaries. For practical reasons, at the time of prioritization, per capita cost is used which also works as proxy indicator for affordability. 45. Financial and operating plan (FOP) of the ULB is generally used to arrive at its affordability. However, for the ULBs where detailed FOP is not readily available, affordability analysis shall be carried out separately. 46. The FOP determines the financial soundness of the town. Data on receipts and expenditure is required to develop FOP and make projections. Future capital investment as well as increased operations and maintenance expenditure shall also be considered while arriving at the affordability of the ULB. The FOP eventually develops financial ratios, which look at expenditure against revenue and also debt servicing coverage. Draft infrastructure proposals:47. The infrastructure Improvement plan shall comprise of three sections. The first section shall contain information on preparation of the infrastructure proposals and annexes detailing engineering information. The second section shall contain details of projects proposed under infrastructure including line estimate. Third section shall comprise of additional information required for projects proposed for first phase of funding. (Tables for preparation of infrastructure proposals are enclosed as Annexure 3(E)). Operation and Maintenance Plan:48. In order to improve service delivery and citizen satisfaction, it is important that operation and maintenance, which is a neglected subject in the towns is brought to the forefront. Preparation of O & M plan of the town is therefore a thrust area of reform. It is expected that the WG 2 would get sensitized to the need of O&M plan and make provision for technical assistance to prepare O&M plan. A sample O&M table is given in Annexure 3(F). Convergence :49. Convergence with other programmes and schemes is very essential for rational use of funds and better targeting. The programmes under implementation shall be explained to the communities so that they are able to make informed choices. The Project Formulation Process :50. Under APMDP, the preparation of initial project proposal as discussed earlier adopts the following process involving different stages:a. Preparatory steps b. Orientation and review workshop c. Preparation of draft proposals 99 APMDP Operations Manual d. e. f. g. Stakeholders consultative workshop Finalize draft report Appraisal and approval MOU and Implement Preparatory Steps :51. Preparatory steps involve three distinct activities viz., data compilation and updation, constitution of committees and orientation workshops on project process. The town shall update the data relating to different aspects of municipal performance as well as implementation of proposals under different schemes. The formats for data compilation are enclosed at Annexure 3(D). 52. The town shall constitute MDC and 2 Working Groups. The composition and functions have already been indicated. 53. Understanding of the project process and procedures is important and therefore, all members of CBOs and civil society at the town level shall be oriented. The project provides the basic orientation initially and this shall be followed by further orientation and support as required. Review :54. Second stage in the project process is review of already initiated reforms and implementation of other schemes. If there are any bottlenecks, they shall analyze the causes and find solutions to overcome them. Similarly, if technical assistance is required to move forward suitable proposals should be articulated. Orientation and Review Workshop:55. To facilitate better understanding of the APMDP process, funding pattern and other details an orientation workshop shall be organized at each of the towns. Councillors, members of committees, representatives of CBOs, SHGs and civil society consisting of 100-125 members may be invited to the orientation workshop. Apart from orientation of APMDP processes, findings of review of reforms and other schemes shall be presented in a workshop to facilitate better understanding of the municipal performance by the civil society as well as to ensure accountability of the municipality. Based on review, the Working Groups shall identify broad areas for Reforms, Capacity Enhancement and Requirement of Infrastructure. The details may also be presented in a workshop to facilitate discussion and to get feedback. This is critical for proper identification of proposals under APMDP. The Working Groups shall also indicate the prioritized Reforms, Infrastructure and other inputs under APMDP. 100 APMDP Operations Manual Draft Proposals Preparation:56. The Working Groups shall meet to articulate the proposals for incorporation in the APMDP. The WGs 1, 2 based on review shall identify Reforms, Capacity Enhancement and Infrastructure Improvement Proposals. Stakeholders Consultative Workshop:57. The second workshop, consisting broadly the same members who attended the earlier orientation and review workshop, is aimed at sharing the proposals with them by the Working Groups. Each WG presents the proposals followed by discussions and consensus building on the proposals. The participants are encouraged to make suggestions. The working groups shall take into consideration the suggestions from the stakeholders and examine them in light of basic principles of the APMDP. Finalize Initial project proposal:58. Based on the feedback and suggestions, the working groups shall finalize the initial proposals for Reforms, Capacity Enhancement, Infrastructure Provision. The said initial project proposal shall be placed before the MDC for review and approval. After their approval it shall be submitted to the Municipal Council as initial project proposal for approval 101 APMDP Operations Manual Annexure 3(B) Andhra Pradesh Municipal Development Project Municipal Reforms Action Plan – (Check List of Reforms) Name of the ULB:- I. Adoption of accrual based double entry system of Accounting in ULBs DESIRED OBJECTS: Note: APMDP requires certain reforms to be undertaken by Urban Local Bodies (ULBs) with an objective to improve urban governance , enhance the capacity of state, local and community based organization and general improvement in service delivery. CURRENT STATUS: I-1. Please provide a short note on the present method of accounting system being followed in your city/ town. I-2. Year Please provide the status of completion and adoption of accounts, and if they have been audited and published in the last 5 years. In case of pending of preparation of Accounts and/or Audit prior to 2003, please mention the no. of years and they year by which Audit will be completed. Preparation of accounts Completion of Audit In case of pendency, time by which it will be completed. Prior to 2003 2003-04 2004-05 2005-06 2006-07 2007-08 I-3. Please state whether ULB is adopting NMAM (Please ‘’ in the appropriate box) i. without modification ii. with modification If NMAM is to be adopted with modifications, please state this 102 APMDP Operations Manual I-4. I-5. Please provide current status of implementations of double-entry accrual system. TIME LINE FOR ACTION ON REFORMS (Please ‘’ in the appropriate box) I-5-1) Resolution by Urban Local Body (ULB)expressing commitment to establishment modern municipal account system. 2009-10 I-5-2) Adoption of manual Year 1 Year 2 Year 3 Year 4 Year 5 I-5-3) Commencement of training of personnel Year 1 Year 2 I-5-4) Placing Consultant at the ULB for roll out Year 3 Year 4 Year 1 Year 2 I-5-5) Adoption of Cut off date for migrating to the double-entry accounting system. Year 1 Year 2 Year 5 Year 3 Year 4 Year 3 Year 4 Year 5 Year 5 I-5-6) Valuation of assets and liabilities Year 1 Year 2 Year 3 Year 4 Year 5 I-5-7) Drawing up of opening balance sheet (OBS) : (Please ‘’ in the appropriate box) 2009-10 I-5-7-i) Provisional OBS Year 1 Year 2 I-5-7-ii) Adoption of Provisional OBS Year 3 Year 4 Year 1 I-5-8) Finalization of OBS Year 1 103 Year 5 Year 2 Year 2 Year 3 Year 4 Year 3 Year 4 Year 5 Year 5 APMDP Operations Manual I-5-9) Full migration to double-entry accounting system Year 1 Year 2 Year 3 Year 4 Year 5 I-5-10) Production of financial statements (income-expenditure accounts for various services such as water supply, sanitation and preparation of balance sheet) Year 1 Year 2 Year 3 Year 4 Year 5 104 APMDP Operations Manual Municipal Reforms Action Plan II. Reforms in taxes and non-taxes to improve coverage and collection of taxes and non-taxes. Name of the ULB:II-1. Property Tax DESIRED OBJECTIVES: Note: APMDP a reform oriented project requires certain reforms to be undertaken by ULBs in Assessment and collection of taxes and non-taxes, with a broad objective of establishing a simple, transparent, non-discretionary and equitable property tax regime that encourages voluntary compliance. ULBs need to ensure that their desirable objectives for reforms include these reforms, but need not restrict themselves to these items. CURRENT STATUS II-1-1. Please indicate if Property tax is currently levied on the following types of properties: (Please ‘’ in the appropriate box) i) Residential ii) Commercial iii) Industrial II-1- 2. Please indicate the Amount of Property tax collected for year-ending 2007-08 and 2008-09 2007–08 2008-09 (Rs. in lakhs) (Rs. in lakhs) i) Residential ii) Commercial iii) Industrial 105 APMDP Operations Manual II-1-3. Please Provide the Method of Property Tax Assessment being followed: (Please ‘’ in the appropriate box) (Give short note, if necessary) i. Self assessment ii. Demand-based II-1-4. Please provide the below information on current coverage. (Rs. in lakhs) No.of No.of Estimated properties Properties Coverage Type of Demand Demand Collection No. No.of in the paying ratio Property raised Collected percentage Properties records of property (3) / (2) the ULB tax (1) (2) (3) (4) (5) (6) (7) (8) 1 2 3 II-1-5. Please list the Exemptions given to property owners No. Type of Exemption Qualifying institution/individual Revenue implication of exemption 1 2 II-1-6. Please provide the basis to determine property tax. 1. Capital Value 2. Rateable Value 3. Unit Area 4. Other (please specify) II-1-7. Please provide the use of technology in property tax management II-1-7-i. GIS of Property records 106 APMDP Operations Manual II-1-7- ii. Electronic database of property records iii. Any software for compliance II-1-8. Please provide the last updation of property records. I-1-8-i. Last updation of property records I-1-8- ii. Last revision of guidance values I-1-8- iii. Frequency of revision of guidance values I-1-8-iv. Please indicate whether the information from appropriate authorities on new building construction, or additions to existing buildings is being captured; if so, how (e.g. Development authority etc.,) Yes No I-1-8-v. Please indicate whether the information from appropriate authorities on change of ownership and land valuation is being captured; if so, how (e.g. Dept. of Stamps and Registration) Yes No TIMELINE FOR ACTION ON REFORMS: Please provide timelines for the following action items: II-1-9) Extension of Property tax regime to all properties (100% coverage) (Please indicate the coverage gap to be filled up in percentage year-wise) 2009-10 Year 1 Year 2 Year 3 Year 4 Year 5 107 APMDP Operations Manual II-1-10) Achievement of 90% Collection Ratio Year 1 Year 2 Year 3 Year 4 Year 5 (Specify target increase for each year of the project in percentage) II-2. Municipal Reforms Action Plan Vacant land tax: CURRENT STATUS II-2-1. Please indicate the Amount of tax being collected for year-ending 2007-08 and 2008-09 Rs. in lakhs II-2-2. Please provide the Method of Tax Assessment being followed (Give short note, if necessary) II-2-3. Please provide the below information on Current coverage (please use additional rows if necessary) No.of Coverage Estimated properties in No.of ratio Demand No.of the records of Properties No. raised properties the paying tax municipality (3) / (2) (2) (3) (4) (5) (6) II-2-4. Please provide the last updation of tax records and guidance values. i) Last updation of records ii) Last revision of guidance values TIMELINE FOR ACTION ON REFORMS Please provide time lines for the following action items: 108 Rs.in lakhs Demand Collection Collected Ratio (7) (8) APMDP Operations Manual II-2-5) Extension of Property tax regime to all properties (vacant lands) (80% coverage) (please indicate the coverage gap to be filled up in percentage year-wise) 2009-10 Year 1 Year 2 Year 3 Year 4 Year 5 II-2-6) Achievement of 90% Collection Ratio (Specify target for each year of the project) Year 1 Year 2 Year 3 Year 4 Year 5 109 APMDP Operations Manual Municipal Reforms Action Plan Advertisement tax: II-3. CURRENT STATUS II-3-1. Please indicate the Amount of tax being collected for year-ending 2007-08 and 200809 Rs. in lakhs II-3-2. Please provide the Method of Tax Assessment being followed (Give short note, if necessary) II-3-3. Please provide the below information on Current coverage No. of Estimated No. Advertisements No. of No. of in the records Advertisements Advertisements of the paying tax municipality (2) (3) (4) Coverage ratio Demand Demand Collection raised Collected Ratio (3) / (2) (5) (6) (7) (8) II-3-4. Please provide the information on fixing of rates of Advertisement tax. i) Year in which the rates of tax are fixed II-3-5. whether the collection of Advertisement tax is outsourced Yes No TIMELINE FOR ACTION ON REFORMS Please provide time lines for the following action items: 2009-10 II-3-6) Extension of tax regime to all Advertisements Year 1 (Please indicate the coverage gap to be filled up 110 Year 2 Year 3 Year 4 Year 5 APMDP Operations Manual in percentage year-wise) II-3-7) Achievement of 90% Collection Ratio Year 1 Year 2 Year 3 Year 4 Year 5 (Specify target for each year of the project in percentage) Municipal Reforms Action Plan NON -TAXES II-4. D & O Trades: CURRENT STATUS II-4-1. Please indicate the Amount of Trade Licence fee collected for year-ending 2007-08 and 2008-09 (Rs. in lakhs) II-4-2. Please provide the procedure of fixation of trade license fee (Give short note, if necessary) II-4-3. Please provide the below information on current coverage: Rs. In lakhs No. Estimated No. of D&O Trades (2) No. of Trades in the records of the municipality (3) No. of Trades paying license fee Coverage ratio (3) / (2) (5) (4) 111 Demand raised Demand Collected Collection Ratio (6) (7) (8) APMDP Operations Manual II-4-4. Please provide. II-4-4-i) Previous year in which Trade License fee is revised II-4-4-ii) Periodicity for revision of trade license fee . TIMELINE FOR ACTION ON REFORMS Please provide time lines for the following action items: 2009-10 II-4-5) Extension of issue of license to all D&O Trades Year 1 Year 2 Year 3 Year 4 Year 2 Year 3 Year 4 Year 5 (Please indicate the coverage gap to be filled up in percentage year-wise) II-4-6) Achievement of 90% Collection Ratio Year 1 Year 5 (Specify target for each year of the project in percentage) Municipal Reforms Action Plan NON -TAXES II-5. Market fees and shop rooms rents: CURRENT STATUS II-5-1. Please indicate the amount of market fee and shop room rents being collected for year ending 2007-08 and 2008-09 Rs. in lakhs II-5-2. Please provide the method of fixing market fees and shop room rents. (Give short note, if necessary) II-5-3. Please provide the below information on Current coverage. 112 APMDP Operations Manual No. Demand raised (6) No. of Markets and No. of shop rooms (2) Demand collected (7) Collection Percentage (8) 1 II-5-4. Please provide the last revision of market fee and shop room rents. II-5-5. Frequency of revision . Market Shops TIMELINE FOR ACTION ON REFORMS Please provide time lines for the following action items: (Please ‘’ in the appropriate box) 2009-10 II-5-6) Revision of market fees. Year 1 II-5-7) Revision of shop room rents Year 1 Year 2 Year 3 Year 4 Year 5 Year 2 Year 3 Year 4 Year 5 II-5-8) Achievement of 90% Collection Ratio (Specify target for each year of the project in percentage) Year 1 Year 2 113 Year 3 Year 4 Year 5 APMDP Operations Manual Municipal Reforms Action Plan III. Levy of reasonable user charges Name of the ULB:DESIRED OBJECTIVES: Note: APMDP requires certain reforms to be undertaken by ULB on different Municipal services with an objective of securing effective linkages between asset creation and asset maintenance and ultimately leading to self sustaining delivery of urban services: CURRENT STATUS: III-1. Please provide a list of services being delivered by municipalities and the status of tariff / user charges for each. Type of Service Tariff Structure Last Revision of Tariff Water supply Sewerage Solid waste management Parks III-2. Please furnish the costs for providing the following services and the amount recovered in 2008-09 O & M Cost (Please specify the unit) Service Total Cost Per annum (Rs.) (1) Water supply Sewerage Solid waste management Parks (2) Unit Cost (Rs.) (3) Amount recovered (Please specify the unit) Total Recovery Per annum (Rs) (4) (Including conservancy component in Property Tax) Note: Unit=Kilolitres i.e., 1000 Litres SWM=Metric Tonnes. III-3. Please provide current service levels. Item Estimated Quantity of waste generated per day in MT Quantity of waste collected, (MT/day) 114 Percentage of recovery of O&M cost Gap in recovery of O&M cost in percentage (6) (7) Unit Recovery (Rs.) (5) APMDP Operations Manual Collection efficiency (%) Frequency of waste collection No. of Garbage collection centers Average spacing of dustbins, (meters) No. of sweepers (excludes Jawans & Scavengers ) Number of open collections points III-4. Water Supply: (Liter per capita per day) LPCD Coverage through proper supply Hrs. of supply Quality Existing no. HSCs Existing no. of commercial connections Existing no PSPs No. of Connections having water meters Please provide the following information: III-5.Present requirement of O&M expenditure per annum (Rs. In lakhs) i.e.2009-10 III-6. Present O&M allocation per annum (Rs. In lakhs) III-7. Gap between requirement of O&M expenditure and allocation per annum (Rs. In lakhs) TIMELINE FOR ACTION ON REFORMS :Note: The ULB must formulate and adopt a policy on user charges which should include proper targeting of subsidies, if any, for all services; ensuring the full realization of O&M cost by the end of the project period i.e. 2013-14 III-8. Establishment of proper accounting system for each service so as to determine the O&M cost separately. Please specify the timeline for each service separately 2009-10 III-8-1. Water supply Year 1 Year 2 Year 3 Year 4 Year 5 115 APMDP Operations Manual III-8-2. Sewerage Year 1 Year 2 Year 3 Year 4 Year 5 III-8-3. Solid waste management Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5 III-8-4. Parks III-9. Time table to achieve improved recovery of O&M costs from user charges from Solid waste management to fill-up the gap shown in column III-2 in percentage. Year 1 Year 2 Year 3 Year 4 Year 5 III-10. Time table to achieve improved recovery of O&M costs from user charges from water supply to fill-up the gap shown in column III-2 in percentage Year 1 Year 2 Year 3 Year 4 Year 5 III-11. Time table to achieve improved recovery of O&M costs from user charges from sewerage to fill-up the gap shown in column III-2 in percentage Year 1 Year 2 Year 3 Year 4 Year 5 III-12. Time table for improved recovery of O&M costs from user charges from Parks to fill-up the gap shown in column III-2 in percentage Year 1 Year 2 Year 3 Year 4 Year 5 116 APMDP Operations Manual III-13. Time table for bridging the gap between O &M requirement & allocation (Rs. In lakhs) Year 1 Year 2 Year 3 Year 4 Year 5 III-14. Time table for providing meters to all non-domestic water supply connections (percentage to be indicated) Year 1 Year 2 Year 3 Year 4 Year 5 117 APMDP Operations Manual Municipal Reforms Action Plan IV. Implementation of Citizen Charter and Establishment of Call Centre Name of the ULB:Objectives:Note: APMDP requires certain reforms to be undertaken by ULBs with an objective to improve urban governance and general improvement in service delivery. Current status:IV-1. Whether citizen’s service center is actually functioning : Yes / No IV-2. Whether citizen’s service center is actually functioning in circle offices also where circle offices are established: Yes / No IV-3. centers Whether brochures are available for all services rendered at service centers & e-seva Yes / No IV-4. Whether a call center is established for disposal of public grievances: Yes / No IV-5. Describe briefly mechanism for redressal of public grievances: Timeline for action on reforms:IV-6. Time required for establishment and functioning of service center where it is not actually functioning now 118 APMDP Operations Manual IV-7. Time required for making brochures available at citizen center & e-seva centers for the following urban services (Year to be indicated) IV-8. IV-7-i. Property tax assessment and allotment of door no. IV-7-ii. Vacant land tax assessment and issue of special notice IV-7-iii. Transfer of title of property in municipal records IV-7-iv. Water supply connection IV-7-v. Sewerage connection IV-7-vi. Building permission IV-7-vii. Change of land use in master plan IV-7-viii. Registration of births and deaths and issue of birth and death certificates IV-7-ix. Trade license IV-7-x. Valuation certificate IV-7-xi. Permission for establishment of factory / industry Time required for introduction of Online Grievance Redressal Tracking System (OGRTS i.e. Municipal Call Center) (year to be mentioned) 119 APMDP Operations Manual Municipal Reforms Action Plan V. Empowerment of Urban Poor Name of the ULB:Desired objectives: APMDP requires certain reforms to be undertaken by ULBs with an objective to improve Urban Governance, enhance the capacity of state, local and community groups and general improvement in service delivery. V-1.Please provide a short note on Urban Poverty Alleviation in your city / town. V-2.Please provide the following information. V-2-1. Population (as per 2001 census) V-2-2. Present estimate population ( March, 2009) V-2-3. PL Population V-2-4. Percentage of BPL Population V-2-5. Status of organization of the poor and empowerment (as on March, 2009) V-2-5-1.No. of SHGs formed. V-2-5-2.BPL Population covered under SHGs V-2-5-3.Percentage of BPL population covered under SHGs V-2-5-4.No. of SHGs having their own Book Keepers V-2-5-5.No. of SHGs holding weekly meetings V-2-5-6.No. of slum level federations (SLF) formed V-2-5-7.No. of SHGs having membership in SLFs V-2-5-8.No. of Urban CRPs / Nagaradeepikas ( social capital) trained V-2-5-9.No. of SHGs of persons with disabilities, formed V-2-6. V-2-6-1. V-2-6-2. V-2-6-3. Status on access to credit/ bank linkage provided to SHGs (as on March, 2009) No. of SHGs availed bank linkage Per capita bank linkage availed Percentage of re-payment V-2-7. V-2-7.a. V-2-7.b. tatus on livelihoods (as on March, 2009) No. of un-employed given skill trainings No. of urban poor helped in setting up of micro enterprises. V-2-8. V-2-8-a. V-2-8-b. Status on social security (as on March, 2009) No. of poor covered under insurance. No. of poor covered under other social security schemes. Timeline for action on reforms in empowerment of the urban poor V-3. No. of SHGs to be formed to cover all BPL population. Specify targets for each year Year 1 Year 2 2009-10 Year 3 120 Year 4 Year 5 APMDP Operations Manual V-4. No. of Book Keepers to be trained to cover all SHGs. Specify targets for each year Year 1 Year 2 Year 3 Year 4 Year 5 V-5. No. of SHGs to be transformed in to weekly meeting SHGs. (to cover 100% SHGs with weekly meetings) Specify targets for each year Year 1 Year 2 Year 3 Year 4 Year 5 V-6. No. of slum level federations (SLF) to be formed to cover all Slums. Specify targets for each year Year 1 Year 2 Year 3 Year 4 Year 5 V-7. No. of SHGs of persons with disabilities, to cover all disabled in ULB Specify targets for each year Year 1 Year 2 Year 3 121 Year 4 Year 5 APMDP Operations Manual V-8. No. of SHGs to be covered under bank linkage Specify targets for each year Year 1 Year 2 Year 3 Year 4 Year 5 V-9. Amount under bank linkage - Per capita bank linkage to be increased. Specify targets for each year Year 1 Year 2 Year 3 Year 4 Year 5 Year 4 Year 5 Year 4 Year 5 V-10. Repayment percentage to be increased. Specify targets for each year Year 1 Year 2 Year 3 V-11.No. of un-employed to be covered under skill trainings Specify targets for each year Year 1 Year 2 Year 3 V-12. No. of urban poor to be covered under setting up of micro enterprises. Specify targets for each year Year 1 Year 2 Year 3 Year 4 Year 5 Year 4 Year 5 V-13. No. of urban poor to be covered under social security Specify targets for each year Year 1 Year 2 Year 3 122 APMDP Operations Manual Annexure :-3(c ) Andhra Pradesh Municipal Development Project Capacity Enhancement Action Plan (CEAP) Name of the ULB:Objectives:- The objective of the plan is to maintain the infrastructure proposed in the project efficiently and sustainably so that service improvements do happen within the ULBs and citizens do benefit in the long run. 1) Institutional option preferred for maintenance of the infrastructure: a) Water supply b) Sewerage /Storm water drains c) Street lights Outsourcing Departmental : : : d) Solid Waste Management : Departmental Outsourcing Departmental Outsourcing Departmental Outsourcing 2) In case of Departmental maintenance furnish structure of the unit (Indicate details of officers and staff working in the unit) Sl. No. 1 Name of the infrastructure Water supply 2 Sewerage /Storm water drains 3 4 Solid Waste Management Street lights Category of officer/ staff 123 Nos. APMDP Operations Manual 3) Capacity building measures for the officers and staff indicated in each unit Sl. No 1 Name of the training programme 1. 2 Procurement capacity building programme 2. Water supply systems 3. Water transmission and distribution 4. O&M of water supply 5. Energy study of water supply systems 6. Sewerage systems 7. O&M of sewerage system 8. Solid waste management 9. Designing and maintenance of street lights Category of officers to be No. of officers Cost of training for 3 Year by which trained to be trained in days (Rs. 3000/- per training will (i.e. SE, EE, Dy.EE, AAE) each category participant per day) completed 3 4 124 5 6 the be APMDP Operations Manual 4) Institutional strengthening measures for O&M of Urban services Sl. No. Additional maintenance equipment 1. Procurement of water tankers 2. Procurement of vehicles for road maintenance 3. Procurement of vehicles for transportation of solid wastes 4. Procurement of vehicles for street lighting maintenance 5. Procurement of safety equipment for SWM 6. Procurement of safety equipment for street lighting 7. Establishment of laboratory for testing of water supply 8. Establishment of quality control lab for street lighting 9. Establishment of quality control lab for roads & buildings No. of vehicles / equipment available Additional no. of vehicles / equipment required 125 Time frame for procurement Cost of procurement (Rs. In lakhs) APMDP Operations Manual 5) Operation and maintenance plan Sl. No. Name of the sector 1 2 Water supply 1. Regular maintenance Operation of power bores by community / 2. privatization 3. Repairs of platforms and new constructions Solid waste management 1. Regular maintenance 2. Procurement of safety equipments Street lighting 1. Regular maintenance 2. Procurement of wireless sets/cell phones 3. Procurement of safety equipments 4. Establishment of quality control lab 5. Training to the workers Roads 1. Regular maintenance 2. Repairs of roads 3. Resurfacing of BT roads Drains 1. Regular maintenance 2. Awareness camps Sanitation (including UGD) 1. Regular maintenance 2. Repairs of manholes 3. Safety equipments 4. Separate maintenance squad 5. Awareness camps Estimated cost (Rs. In lakhs) 3 126 Immediate actions year 1 4 Medium and long term actions Year 2 Year 3 Year 4 Year 5 5 6 7 8 APMDP Operations Manual 6) Municipal Staff Capacity Enhancement Current status:1) No. of Municipal Functionaries to be trained VI-1-a. No. of Elected Representatives VI-1-b. No. of Officials VI-1-c. No. of Municipal staff 2) No. of Municipal Functionaries already trained VI-2-a. No. of Elected Representatives VI-2-b. No. of Officials VI-2-c. No. of Municipal staff Time line for action:Time table for training of all Municipal functionaries 2009-10 VI-3. Training of officers (Number to be trained each year) Year 1 Year 2 Year 3 Year 4 Year 5 VI-4. Training of Municipal staff (Number to be trained each year) Year 1 Year 2 Year 3 Year 4 Year 5 VI-5. Training of elected representatives(Number to be trained each year) Year 1 Year 2 Year 3 Year 4 Year 5 VI-6. Training in professional certification programme for specialists staff in Financial Management, Public Health Management, Municipal & Environmental Engineering, UPA, Urban Planning and Building Regulation (number to be trained each year) Year 1 Year 2 Year 3 Year 4 127 Year 5 APMDP Operations Manual Annexure – 3(D) Basic Data of ULB Name of the ULB:Table 3.1 Municipality at a Glance General Area Population Total Households 2001 census Literacy Literacy Literacy Male Female Total Infrastructure Water supply Protected water supply reservoirs : Total installed capacity of protected: Water Supply House service connections : Public stand posts : Length of distribution pipeline : Unserved population : Water supply through bore wells : Power bores : Hand bores : Roads C.C.roads length : B.T roads length : WBM roads length : Kutcha roads length : Unserved population : Total length of Roads : Drains Pucca drains length : Kutcha drains length : Storm water drains length : Unserved population : Total length of Drains : Street lighting High mast lights : Central lighting : SV lamps 150 Watts : SV lamps 250 Watts : MV lamps : Tube lights 40 watts : Unserved population : Total number of Street lights : Sanitation Garbage generation / day : Garbage lifted/day : Service deficiency : Area available for dump site : : : : : : Slum Population (2004 SJSRY survey): Yearly income (incl.grants) (2003-04) : Yearly expenditure (2003-04) : Hospitals No.of Government hospitals : No.of Urban health centres : Schools No.of Government schools : No.of High schools : No. of Upper primary schools : No. of primary schools : Other assets Burial grounds : Vegetable markets : Parks : Play grounds : 128 APMDP Operations Manual Table 3.2 Infrastructure Coverage Details Unit % % % % Hours LPCD Households with HSCs Households served by PSPs Total Households with piped water supply Households served by tankers Average supply time per day Average per capital supply Average percentage losses in system (NRW, UFW) Dry Season % B. Sewerage & Sanitation Type Unit Households with sanitary latrines (individual and community Households connected to sewers Households with unsanitary latrines Households with no facility C. Storm water drainage Main areas of town prone to flooding Frequency of flooding Extent of damage (Financial in Rs. Extent of damage(Physical area/Nos) Availability of storm water drainage master plan D. Roads Estimated percfentage of all roads per habituated area Estimated percentage of pucca roads per habituated area Is there a roads or traffic plan? E. Street lights Average spacing of street lights on main roads Average spacing of street lights on all roads 129 % % % % A. Water Supply West Season APMDP Operations Manual Table 3.3 Projected data Municipality ______________ Basic data Area Habitated area Population 2001 Census Density 1981 Census 1991 Census 2001 Census Decadal growth 81-91 Decadal growth 91-01 BPL population Slum population Municipal wards Slums Notified Slums Non-notified Civil Society Organisations CDSs NHCs NHGs SHGs CMEY groups Colony welfare associations Civic exnora societies NGOs District ______________ Date : Units Sq.Km Sq.Km Number Persons per sq.km Number Number Number % % % % No. No. No. Details No. No. No. No. No. No. No. No. Table 3.4 Plans status Plans Prepared by Base map Ward map with boundaries Contour plan Master plan Roads network plan Water supply system UGD system Drainage system Others (specify) 130 Date Scale APMDP Operations Manual Name of the study Studies sponsored (Name of Executive body) Municipality DTCP PHED/HMWSSB UDA APUSP DMA Others (specify) Prepared by Date Status Table 3.5 Studies Status Table 3.6 Projects Sectors taken up during last five years Sl.No. Project name Scope of work Cost Funding agency Start date Completion date Physical improvement made Remarks 1 2 3 4 5 6 7 Table 3.7 Water Supply ( Headworks including Wells) Sl.No. Location Date of construction Type of source Distance from city/town Approximately yield (MLD) Dry 1 2 3 4 5 6 7 Wet Table 3.8 Treatment Plants (Filter Beds) Sl. No Name & Location Total area Year of constru ction Built up area of plant Installed capacity (MLD) Current capacity (MLD) 1 2 3 4 5 6 7 131 Type of treatment Chlori nation type Quality of effluent List main proble ms APMDP Operations Manual Table 3.9 Water Supply (Transmission and Distribution) Mains Transmission Length Diameter Distribution Length Diameter Age Age Total length RCC PCC CI/MS HDPE AC PVC Other name Total Estimated % losses Table 3.10 Storage Storage Year of construction Number Capacity MLD Whether functional or not ELSR GLSR Summer storage Total Table 3.11 Water Supply (Pumps and Finance) Pumps excluding / hand borewells Number Installed capacity Present capacity Estimated efficiency of pumps and motors Average monthly power consumption Average monthly power charge (April 2003 to March 2004) Unit Number m3/hr m3/hr % KVh Rs.in lakhs Raw water Clear water Booster Table 3.12 Pump House Pump house No. Type Age Table 3.13 Sanitation (Human waste disposal) Annual income & expenditure of Sewerage system Item Cost of sewer connection Domestic Commercial 132 Rs.in lakhs Total APMDP Operations Manual Monthly tariff Annual income (if any) Annual power costs Establishment costs Equipment and material costs Total annual expenditure List main problems Summarise any proposals Table 3.14 Solid Waste Management (Garbage Collection & Disposal) Solid Waste Management Details Collection per day Frequency Garbage generated per day Percentage collected Land fill site Area Distance Unit Town centre Markets Suburbs/ Colonies Slums Total MTs No/week MTs % Sq.Km Km Table 3.15 Collection & disposal of Solid Wastes Collection Transportation Number Cycle rickshaws No.of tractor and trailers No. of trucks No.of Dumper places No. bullock carts Disposal / processing Landfill Site used area in Sq.Km Site identified in Sq.Km Disposal Staffing Management No.of staff for solid waste No. of staff for street sweeping Privatisation Area of the town, sweeping privatized Area of the town, drain cleaning privatized Annual expenditure Annual expenditure on vehicles Establishment costs for street sweeping Establishment costs for drain cleaning Avg. Capacity Dumping Condition Composting Supervisors Labour Percentage Rs. In lakhs 133 Other APMDP Operations Manual Cost of consumables per year Payment to private contractors Total annual expenditure on solid waste Annual income (if any) List main problems Summarise any proposals Table 3.16 Roads Type of road R&B roads/National High Way BT CC ULB roads BT CC WBM Kutcha Length in Km Condition On main roads On side roads No. of bridges of ULB No.of culverts of ULB No. of bridges R&B/NH No. of culverts R&B/NH No. of junctions R&B/NH No.of junctions of ULB Condition of Junctions of R&B/ NH Condition of Junctions of ULB List main problems (including Areas prone to flooding with extent and frequency) Summarise any proposals Table 3.17 Drains Drainage type (sullage and storm water Item Length of drains Kutcha Disposal Where do the main drains outfall? List main problems Summarise any proposals Annual expenditure Pucca Description Rs.in lakhs 134 APMDP Operations Manual Table 3.18 Costing for Maintenance of Roads and Drains Item Establishment costs Equipment and material costs Total annual expenditure Roads Drains Table 3.19 Receipts during Last 4 years and Projections Sl. Receipts No. Head I – Taxes 1 Property tax & VLT 2 Advertisement tax 3 Other taxes Total taxes II – Non Taxes 1 Water Charges 2 D & O Trades 3 Encroachment fee 4 Betterment charges 5 Building permission fee 6 Layout fee 7 Building regularization scheme 8 Miscellaneous receipts 9 Others Total Non- Taxes III – Assigned Revenues 1 Entertainment tax 2 Surcharge on stamp duty 3 Other assigned revenue 4 Profession tax compensation 5 Per capita grant 6 M.V. tax compensation Total assigned revenues IV – Total Plan Grants 1 State Govt. programmes 2 Neeru-Meeru 3 Clean and green 4 NSDP 5 ILCS 6 SJSRY 7 MPLADS 8 Eco conservatory project 9 Urdu ghar / shadi khana 10 Road grant 2001-02 Actual 2002-03 135 2003-04 (Rs. In lakhs) Projected figures 2004-05 2005-06 2006-07 APMDP Operations Manual 11 12 13 14 15 16 Drainage grant Janma bhoomi Water supply CM special grants Drought relief grant Other central govt programmes Total plan grants 17 Total taxes 18 Total Non-taxes 19 Total assigned revenues 20 Total plan grants 21 Loans Grand Total Table 3.20 Expenditure for Last 3 years and Projections Sl. Item No. I – Establishment 1 Pay and allowances of municipal employees & non teaching staff 2 Pensionary benefits II Maintenance of Services 1 Roads 2 Drains 3 Buildings 4 Sanitation 5 Water supply 6 Lighting III Capital Works 1 Roads 2 Drains 3 Buildings 4 Sanitation 5 Water supply 6 Lighting IV Office Maintenance V Others (remunerative enterprises, loan repayment, contribution, town planning acquisition of lands and buildings, law charges etc.) Total 2001-02 Actual 2002-03 136 2003-04 (Rs. In lakhs) Projected figures 2004-05 2005-06 2006-07 APMDP Operations Manual Annexure – 3(E) Data required for preparation of town wide infrastructure improvement proposals Table 1 Municipal Expenditure on Infrastructure Provision 2004-2009 Type of Expenditure in poor settlements on Expenditure in town on infrastructure Infrastru infrastructure provision provision (including poor settlement) cture Length/ Pop HH Amt Length/ Pop HH Amt Units Covered Covered spent Units Covered Covered spent 2 3 4 5 6 7 8 9 10 Sl. No 1 1 2 3 4 5 Grand Total (Amount) Sl.No. 1 2 3 Table 2 Proposed Future Coverage and Levels of Service Sector Item Existing 2011 Water Supply Households covered by piped <30 60 water supply-house service 30-50 75 connections 50-70 90 70-100 100 Households by group taps 0-20 30-50 Households covered by PSPs >50 <30 Sewerage Households covered by <30 60 sanitary items 30-70 80 >70 100 Households covered by sewer 10-40 50 connections 40-70 75 >70 90 Solid Waste Area covered <50 80 50-75 100 >75 100 2021 80 100 100 100 30-50 <15 90 100 100 70 90 100 100 100 100 2031 100 100 100 100 30-50 <5 100 100 100 100 100 100 100 100 100 Table 3 Population Growth and Demand Projections A. Water Supply Households with house service connections Per capita supply (including Units % Existing LPCD 137 2011 2021 2031 APMDP Operations Manual losses) Households served by stand Per capita supply (including losses) Total domestic supply Non-domestic supply Total water requirements B. Sanitation & Sewerage Households with sanitary latrine Households connected to sewers % LPCD KLD KLD KLD % % C. Solid Waste Management Generation per day MTs Collection per day MTs Land fill site area Area Sq.k D. Storm Water Drainage Details Do new developments consider drainage issues? Are they on land prone to flooding? Could drain construction create developable land? E. Roads Details Are any parts of the town unserved by pucca roads? Would bridge or culvert construction improve access to developable areas? Proposed length of roads in Km required to serve new development in 10 years Road widening requirements 138 APMDP Operations Manual Table 4 Deficiency of Infrastructure and its Causes Sl. No. 1 1 2 3 4 5 6 Sector 2 Water supply Drainage Sewerage Roads Street lighting Solid waste Existing Status Deficie ncy Beyond project life Over use Inadequ ate design 3 4 5 6 7 Inappro Impro priate per constru O&M ction 8 9 Reso Others urce (Please const specify) raints 10 11 Prop osal 12` management Table 5 List of infrastructure Proposals Identified with Justification Sl.N o. 1 2 3 4 5 6 Sector Name of the Project Cost Rs.in lakhs Population to be identified Area to be covered Justification Water supply Drainage Sewerage Roads Street lighting Solid waste management Table 6 Process of Selection of Proposals for infrastructure Scope Eligible projects Water supply Main roads Drains etc. Ineligible projects Local or tertiary infrastructure Town halls etc Feasibility Feasible projects Meet deficiencies Confirm with plans Socially sound Environmentally sound Technically feasible Sustainable Short gestation Appropriate service levels Non-feasible projects Projects which do not satisfy the above criteria 139 Priority High priority projects Sectoral deficiencies Committed projects Low per capita cost Short gestation Complements others projects Rehabilitation Low priority projects Long gestation High per capita cost APMDP Operations Manual Table 7 Project Prioritization Scoring Guide Sl.No. 1 Criteria 2 High priority sectoral deficiencies Committed project 3 4 5 6 3 Highest priority Score 2 Second priority In master plan Per capita cost Short gestation By council or Government Lowest third Less than 4 months Complements other projects Rehabilitation Required to support other projects >80% Converges with another project 30% to 80% Medium third 4 to 9 months 1 Not a priority Not in Master plan Highest third More than 9 months (study or LA required) No convergence <30% Table 8 List of feasible infrastructure Sub projects (Rs.in lakhs) Item/Sl.No. Name of the proposal Length Water Supply 1 2 3 4 Drains 1 2 3 4 Roads 1 2 3 4 140 Estimated Cost Remarks APMDP Operations Manual Table 9 Prioritization of feasible sub-projects under infrastructure Sl.N o. Name of sub project Population covered 1 2 3 Required to support other projects (3) 12 Sectoral deficiency Medium priority (2) 5 High priority (3) 4 Complement with project Converg ence No with converge another nce (1) project (2) 13 14 Low priority (1) 6 Rehabilitation Score Above 80%(3) 7 30 to 80%(2) 8 9 Polilcy Commitment Score Council/G ovt(3) Master plan (2) Not in Master (1) 15 16 17 18 Below 30% (1) Score 10 11 Gestation Score Below 4 months (3) 4 to 9 months (2) More than 9 months LA required 19 20 21 22 Per Capita Score Lowest(3) Medium(2) Highest(1) Score 23 24 25 26 27 Total Score (7+11+15+19+23+27) 28 SOLID WASTE MANAGEMENT (Rs.in lakhs) Name of the proposal Estimated Cost Remarks Table 10 Abstract infrastructure sub projects (Rs.in lakhs) Sector Water supply Under ground drainage Roads Drains Solid waste Parks, play grounds Total Required infrastructure 141 Indicative cost APMDP Operations Manual Table 11 Phasing of Projects Sl.No. Name of the Project Estimated cost Rs. in lakhs Year 1 1 2 3 142 Year 2 Year 3 Year 4 Year 5 APMDP Operations Manual Annexure – 3(F) Operation and Maintenance Plan (Rs. In lakhs) Sl. N o Sector Existing infrastructure Capital cost O&M cost in 200910 Deficiency in service 1 1 2 3 4 5 6 7 2 Water Supply Sanitation Drains Roads Street lights Vehicles Buildings 3 4 5 6 143 Funds reqd for O&M in budget 2009-10 7 Allocatio Gap O&M req. n for (7-8) O&M in Amt Source budget 2009-10 8 9 10 APMDP Operations Manual ANNEXURE 4 INITIAL PROJECT PROPOSAL (IPP) 144 APMDP Operations Manual Annexure 4 : Initial Project Proposal (IPP) Template Date: Name of Urban Local Body : District : Region : Address of the ULB : Name : Street, etc : Town / City & Pin Code : Phone : Fax : Mobile : (Postal Address, telephone, fax, mobile numbers and E-mail address) Section 1: General Information of the ULB 1. Grade of the Municipality / Corporation : 2. Area of Urban Local Body in Sq. Kms : 3. Number of Wards / Divisions : 4. Number of Notified / Non-notified Slums : 5. Population & Decadal growth rates : Census Report Men Population Women Total % Growth BPL population 1971 1981 1991 2001 6. Total slum population in the U.L.B 7. Total below poverty line (BPL) population1 (both slum and non-slum areas) 1. 1 : : Definition of urban poor as specified by the Government of Andhra Pradesh 145 APMDP Operations Manual 8. Total SC & ST population : 9. Main economic activities of the ULB : (Agro-processing / industrial / commercial / education centres / transportation, etc) 10. Potential areas of economic growth in the ULB : (Explain the strengths, opportunities, and constraints) 11. List the measures taken to stimulate economic growth: 1) : 12. 2) : 3) : How does the proposed investment contribute to economic growth: Section 2. 13. Details of existing/ proposed Roads: a. b. c. d d. 14. 15. 16. Status of Infrastructure Particulars WBM Roads BT Roads CC Roads Earthen Roads Others Existing ( in kms) Proposed ( in Kms) Length of roads in the ULB maintained by : a) Municipality : b) State High ways : c) National High ways : d) Others : Length of storm water drains : a) Kutcha drains : b) Pucca drains : c). Incomplete drains : Length of roads covered with Water Distribution System 146 : APMDP Operations Manual 17. Length of roads covered with Under Ground Sewerage System : 18. Existing critical gaps in the road infrastructure : 19. Details for Water Supply: a. b. c. d. e. f. g. h. i. j. Source (s) of drinking water : (provide details of the sources) Total water production per day : Per capita supply of water at present : Per capital water requirement in 2010 : Status of water distribution system : Percentage of water leakage from the system Percentage of ULB area provided with drinking water: No of slums with piped water supply : percentage of slum area covered with drinking water: Connections : Category Existing connections Proposed new connections in the ULB Yr 1 Yr 2 Yr 3 Domestic (non-slum) Domestic (Slum) Public Stand Posts Commercial Industrial Others 20. Existing Critical Gaps in Water Supply a) Deficiencies in the Source b) Deficiencies in the Trunk lines c) Deficiencies in the distribution network : : : : 21. Measures proposed to address the gaps: : 1. 2. 3. 4. 22. : Goals proposed to be achieved by 2010 : a. source augmentation : b. Percentage reduction of leakage : c. Modernisation of distribution network : 147 Y4 Total connections expected by 2010 APMDP Operations Manual 23. 1. 2. Replacement of pipeline Laying of new pipeline 3. New Connections (Slum / Non-slum) : 4. Reduction in the number of Public stand posts Tariff and Deposit Category : : : Existing Tariff Proposed Tariff Existing Deposit Domestic Commercial Industrial Others 24. c. Existing Tariff is in force from __________________ d. Proposed Tariff with effect from _________________ e. Existing Deposit is in force from__________________ f. Proposed Deposit with effect from ________________ Details of Solid Waste Management Project: a) Waste Generation per day (in Tonnes) : b) Waste Collection per day ( in Tonnes) : c) Is Compost yard/ Land fill available : d) If yes, details thereof : e) Average distance to compost yard from town : f) Conveyance System : g) No. of tricycles : h) No. of tipper lorries : i) No. of Dumber placers : j) Other means of transport : k) No. Bins : l) O & M cost of Vehicle m) O & M cost of compost yard n) Please specify if ULB has any other Vehicle or equipments: o) Public – Private Partnership, if any and details : : 148 : Proposed deposit APMDP Operations Manual 25. Critical Gaps in Solid Waste Management : 26. Goals proposed to be achieved by 2010 : 1. 2. 3. 4. 149 APMDP Operations Manual 27. Under-ground Sewerage System a. Connections : Category If UG is existing connections served Proposed new connections in the scheme area Year 1 Year 2 Year 3 Year 4 Total of Existing and Projections Domestic Non-Slum Slum Areas Commercial Industrial Others b. Tariff and Deposit Category : Existing Tariff Proposed Tariff Existing Deposit Domestic Commercial Industrial Others c. Existing Tariff is in force from __________________ d. Proposed Tariff with effect from _________________ e. Existing Deposit is in force from__________________ f. Proposed Deposit with effect from ________________ 150 Proposed Deposit APMDP Operations Manual Section 3: 28. Financial Performance Financial Performance during the past five years (Rs. in lakhs) Financial Year 1 Revenue Receipts I Ii Iii Iv V Vi Vii Property Tax Water charges Professional Tax Library Cess Other Taxes Fees Assigned Revenues Viiii Ix SFC Devolutions Education Grant X Xi 1 Street Light Maintenance Grant Other Non-tax Income Total Revenue Receipts (TRR) II Recurrent Expenditure I Ii Iii Establishment and Administration Roads and Transportation Street Lights - Maintenance Iv V Vi Vii Viii Ix X II Total Electricity Charges Water Supply Public Health, sanitation and Hygiene Education Other Obligatory Services Sewerage Maintenance Miscellaneous Expenditure Total Recurrent Expenditure (TRE) III Net Revenue Surplus / Deficit 151 : APMDP Operations Manual IV I Ii Iii Iv V Vi Vii Viii Ix X Xi Xii Xiii Xiv Xv Xvi Xviii Xviii Xix Xx Xxi V I Ii Iii Iv V Vi Vii Viii X Xi Xii V VI VII VIII Capital Receipts APUSP Decentralised Planning grants 11 Finance Commission grants 12 Finance Commission grants School Building Drought Relief Fund Flood Relief Fund MLA Constituency Fund MP Constituency Fund NSDP SJSRY City Challenge Fund IDSMT ILCS River Conservation Project Other Capital grants Special Grants from the Government Special grants for roads Loans from HUDCO for water supply Contributions from public / NGOs Any other Income Total Capital Receipts Capital Expenditure Water Supply Roads and Transport Street Lights Storm Water Drainage Sewage Disposal Solid Waste Management Health and Hygiene Education Buildings Sanitation Miscellaneous Total Capital Expenditure Total Receipts (Revenue and Capital) Total Expenditure (II + V) % Expenditure / Receipts (VI/V) % Admin &Establishment (II.i /II) 152 APMDP Operations Manual IX Loans and Other Liabilities I Ii Iii Loans outstanding Annuity (A = Principal + Interest) Other Liabilities 29. Analysis of the financial health of the ULB based on above information : (Discuss the reasons for increase / decrease in incomes, expenditures, debt servicing, etc in detail). 30. Analysis of the above income and expenditure and debt servicing capacity etc (along with supporting information). 31. Number of Property Tax assessments : Existing Projection* Residential Commercial Industrial Other Total * If the increase in property tax is more than 10% please state reasons. 32. AUDIT Up to date – Details : 33. Debt as on date (Rs. in lakhs) : S.N Source of Loan Projec t Year Principal HUDCO APUIF Other 34.Composition of MDC and Working Groups:1. Municipal Development Committee i. ii. iii. iv. Sri Sri Sri Sri 153 Interest % Repayment Balance APMDP Operations Manual v. vi. Sri Sri Working Group 1 i. ii. iii. iv. v. vi. Sri Sri Sri Sri Sri Sri Working Group 2 i. ii. iii. iv. v. vi. 35. Sri Sri Sri Sri Sri Sri Details of planning and consultative process for arriving at IPP: MDC and Working Group Meeting Details Meetings First MDC Orientation on MDP WG 1 Orientation on MDP Second Third Fourth Fifth 36. Planning Process 154 WG 2 Orientation on MDP APMDP Operations Manual 37. Preparation of Infrastructure Improvement Plan (Summary of the process, inputs and outputs) – Enclose a copy of IIP 38. Municipal Reform Action Plan (MRAP) (Detail the proposed reforms in the order of priority, time-frame for implementation, inputs and outputs, performance indicators, as well as achievements to date) – Enclose a copy of the Reform Action Plan) 39. Capacity Enhancement Action Plan (CEAP) (Detail the proposed capacity enhancement measures in the order of priority, timeframe for implementation, inputs and outputs, performance indicators, as well as achievements to date) – Enclose a copy of the Capacity Enhancement Action Plan) 40. Approval of MRAP & CEAP: by the Council (date and resolution No) by CDMA (date and proceedings No) 41. 42. Critical gaps in the infrastructure : First Priority : Second Priority : Third Priority : Fourth Priority : Priority sub-projects for which loan is being sought under APMDP : (Mention all the works are per priority and the estimated cost of each) Abstract of infrastructure sub projects (Rs.in lakhs) Sector Water supply Under ground drainage Roads Drains Solid waste Parks, play grounds Total Required infrastructure 155 Indicative cost APMDP Operations Manual Phasing of Projects Sl.No. Name of the Project Estimated cost Rs. in lakhs Year 1 Rationale for the project proposals : 1 2 3 43. 156 Year 2 Year 3 Year 4 Year 5 APMDP Operations Manual ANNEXURE 5: INITIAL SCREENING REPORT APMDP Operations Manual Annexure 5: Initial Screening Report 1.ISR on the application of : (Name of ULB) 2.Date of receipt of application: 3. Aggregate Loan / Grant Sought: 4. Existing Debt (as on date) Overdues (as on date) (Rs. in lakhs): (Rs. in lakhs) Govt : HUDCO: JNNURM: APUIF: Others: Total: : 5. Summary of Key Urban service issues at city level: a. b. c. 6. Summary of Past Financials (Rs. in lakhs) 1996-97 PARTICULARS Total Op Revenues (TR) Total Op Expenditure (TE) Surplus / Deficit Annuity % of TE/TR DS/TR 1997-98 : 1998-99 1999-00 7. Compliance with Access Criteria: Access Criteria ULB has an operating surplus and has borrowing / investment capacity to meet debt service obligations and O&M expenses, after accounting for existing debt service and other operating expenditures. Audit of municipal accounts is satisfactory (with no significant unresolved audit issues of the earlier years) and up to date. Reform Action Plan Capacity Enhancement Action Plan (CEAP) 157 Status of Compliance Reform Areas / Commitments from ULB: Capacity Enhancement / Commitments from ULB: APMDP Operations Manual 8. Tentative (Indicative) List of Priority Sub-projects) and Financing sought: Sl. No 1 2 3 4 5 Item of Works Total project Cost Loan Grant (all values in Rs. lakhs) ULB Contribution Water Supply Sewerage & Sanitation Solid Waste Management Urban Roads Social Infrastructure Total 15. Environmental and Social Impacts: The environmental / social risk category of sub-project is classified as follows: Sub-project 1 – E2 / S2, Sub-project 2 – E1 / S1 Recommendation: Encl: Initial Project Proposal from ULB 158 APMDP Operations Manual ANNEXURE 6: Memorandum of Agreement (MOA) Between MSU, Office of C&DMA And Municipality and Municipal Corporation APMDP Operations Manual Annexure 6: ULB and CDMA/MSU Agreement (MOA) Sample Memorandum of Agreement (MoA) ANDHRA PRADESH MUNCIPAL DEVLOPMENT PROJECT (APDMP) Draft Memorandum of Agreement (MoA) Between Project Director, Municipal Strengthening Unit on behalf of the Commissioner and Director of Municipal Administration Government of Andhra Pradesh And The Urban Local Body represented by the Municipal Commissioner, Bapatla Municipality, Bapatla. Dated .............................. THIS AGREEMENT is made on this 27th day of June' 06 between the Project Director, Municipal Strengthening Unit on behalf of the Commissioner and Director of Municipal Administration, Municipal Administration and Urban Development Department, Government of .Andhra Pradesh, Part-1 AND 159 APMDP Operations Manual The Urban Local Body represented by Sri. S. Siva Rama Krishna. S /o Subba Rao, Municipal Commissioner, Bapatla Municipality, Bapatla or its authorized person, of the Part II. WHEREAS the Part II seeks financial assistance under Andhra Pradesh Municipal Development Project (APDMP) AND WHEREAS the Part II have undertaken to implement the reform action plan, as per the timeline indicated therein, fully detailed in Attachment – I along with Capacity Enhancement Action plan detailed in Attachment – II. AND WHEREAS the Part I has considered the documents mentioned in Attachment I, II, and found then consistent with the goals and objectives of APDMP. NOW THE PARTIES WITNESSED as follows: 1. That the Part I shall recommend for release of the first installment upon signing of the Memorandum of Agreement (MOA) and submission of the documents i.e., Attachment I & II. 2. That the Part I shall recommend for release of the second, third and final installment upon submission of satisfactory Progress Report indicating the progress achieved as per the timeframe agreed for each item in Attachment – I 3. That the Part I or an Institution nominated by it, shall undertake a site visit to ascertain the progress achieved for the agreed reforms action plan and Capacity Enhancement Action Plan through designated representatives periodically; 4. That apart from the Progress Report, the Part 11 shall submit a Quarterly Report of the progress achieved for the agreed reforms action plan and Capacity Enhancement Action Plan to the Part I. In case Part 11 fails to submit such a report, it will be recommended to withhold the further installment of loan until such submission; 5. That Part II shall submit a complete report regarding the outcome of the APDMP on the completion of the project; 6. That the Parties to the agreement have further covenant that in case of a dispute between the parties the matter will be resolved within the provisions of the Arbitration and Conciliation Act, 1996 and the rules framed there under and amended from time to time. 7. That in case of delay in implementation of the reforms action plan and Capacity Enhancement Action Plan or submission of any periodic reports, etc. by the Part 11 due to circumstances beyond its control i.e., Force Majeure or any other reason, the decision on the matter of extension of time for the implementation of the goals and objectives of the APURMS Project shall be at the discretion of Part I. 160 APMDP Operations Manual 8. That in case of any breach regarding the implementation of reforms action plan and Capacity Enhancement Action Plan of the APMDP Project, the Part I shall be entitled to recommending for withholding the subsequent installments of grant on giving 30 clays notice to the Part II. However, the decision taken by Part I will be final and binding on the Part II, though, before making such orders, opportunity of hearing shall be given to the Part II. IN WITNESS HEREOF all the parties have put their hands on these presents of Memorandum of Agreement in the presence of witnesses. WITTNESSES: 1. _________________________ Project director, Municipal Strengthening Unit on behalf of the Commissioner & Director of Municipal Administration. MA & UD Dept. (Government of Andhra Pradesh) (Part I) 2. _________________________ Municipal Commissioner, Bapatla (Part II) 161 APMDP Operations Manual Attachment 1: Initial Municipal Reform Action Plan (MRAP) 162 APMDP Operations Manual Attachment 2: Initial Capacity Enhancement Action Plan (CEAP) 163 APMDP Operations Manual ANNEXURE-7: SUBPROJECT PREPARATION PROCESS, DPR GUIDELINES / CHECKLIST APMDP Operations Manual Annexure-7: Subproject Preparation Process, DPR Guidelines / Checklist 1.1 Guidelines for preparation of DPRs:- The objective behind preparing DPRs is four fold: 1. first choose a feasible option to meet the objectives of desired infrastructure/service improvements; 2. for the preferred option, to produce detailed engineering designs, drawings and detailed cost estimates, social and environmental screening and assessments; 3. then, group the works into feasible tender packages, and for such packages, produce Bill of Quantities (BoQs) and tender documents along with procurement and implementation plans. 4. Undertake a final assessment on ULB’s finances to bear the cash flows required to implement the project; and to sustain O&M of the created assets. While preparing the sub-project and DPRs, the ULB shall apply the Social and Environmental Assessment and Management Framework contained in the Social and Environmental Manual for ULBs. Where required, the DPR shall include Resettlement Action Plans (RAPs) and Environmental Management Plans (EMPs). It shall also include Economic and Financial analyses, Engineering surveys, Socio-economic surveys, Household surveys, and other relevant surveys required to support identified sub-projects. 1.2. The following items should be part of DPR, and will be items of subproject appraisal: a. Base service levels and the proposed improvements after the project are defined clearly – with linkages to project output / outcome indicators; b. For water service improvement, the source should have adequate capacity to provide water for future, allocations to drinking water are clearly documented; c. Linkages between infrastructure development and city development plans shall be indicated; d. Local service improvements proposal should show the linkage with the trunk infrastructure e. Provisions shall be included to ensure or improve performance of the systems, such as bulk flow meters, Pressure Reducing/Control Valves; energy efficiency measures, etc.. f. Either in the DPR or by providing linkages to separate reports -- Environmental and Social Screening, Environmental and Social assessments, Compliance with Environmental mitigation measures and Resettlement Action Plans shall be indicated; g. Plan for work execution by contractors at their cost, such as: Compliance with quality control requirements; Compliance with Environmental Management Plans; Compliance with safety standards, traffic regulations, establishment of site offices, sanitation arrangements for labor, security provisions etc.; Addressing site constraints such as removal of utilities, dewatering, works execution in hard rock/rocky strata, marshy lands or other poor sub-soil conditions, narrow lanes etc., h. Procurement and implementation plan: contract packaging, procurement method and schedule, responsibilities, implementation schedule, i. Required implementation capacities shall be assessed and plans for building those capacities shall be indicated; j. A TA for Planning and Implementation of sub-projects shall be provided by CDMA to ULBs as required. 164 APMDP Operations Manual k. Monitoring plans shall be highlighted – who will oversee implementation progress (ULB itself / supervision consultant), environmental and social issues, works quality etc; Linkages to State level service improvement monitoring system shall be provided; l. O&M plans specifying: preventive maintenance activities, plans to manage crises, availability of repair facilities; necessary facilities (tools, plants, machinery, vehicles, buildings, computers, laboratories, software, MIS systems etc), outsourcing plan; m. O&M and rehabilitation costs; revenue projections if applicable along with cross subsidies and subsidies required, plans to improve revenues; n. Required O&M capacity building plan specifying manpower and training required and how to obtain them. o. Costs shall be estimated based on latest market rates; which shall include provisions for contractors’ work execution as per item (B) (h) above, as well as relevant taxes and duties, insurance provision requirements, contractors’ profit etc. 1.3. i. Preparation of DPR, among others, consists of the following activities Technical/Design: The technical component of the DPR should comprise detailed engineering designs and drawings for sub-projects. National and International standards shall be followed for all designs. Costing shall be based on Public Works Department (PWD) Schedule of Rates (SoRs) and locally available material. ii. Institutional Assessment: The institutional assessment component should review and evaluate existing arrangement for operation and maintenance of assets and additional requirement resulting from proposed investments or alternative means of operating and maintaining the services. If operation and maintenance is carried out by other agencies, the assessment should outline the obligations of parties in terms of functions and financial arrangements. iii. Economic Analysis: Economic analysis should be carried out for all investments under APMDP with quantitative cost-benefit analyses being carried out for all sub-projects above Rs. 15 crores and where economic benefits are quantifiable, using standard economic appraisal models methodologies. Individual sub-projects will be evaluated by either cost-benefit analysis (requiring a minimum ERR of 12%) or cost effectiveness analysis (applicable to sub-projects with nonquantifiable benefits. iv. Financial Analysis: The financial assessment methodology should focus on two aspects: a. Sub-project level financial viability: This would apply to only cost recovery sub-projects (water, waste-water, solid waste projects) and would see to ascertain sub-project level Net Present Value (NPV)/Internal Rate of Return (IRR); and b. Overall ULB Level Financial Sustainability. 1.4. Hence the scope of financial analyses will cover: i. Urban Finance Flows: The Consultant shall carry out an assessment of the ULB sources and uses of funds including revenues / expenditures / capital inflows / capital expenditures over the last 3-5 years, from various sources including state and GOI. This may require some extent of re-casting of the municipal books of accounts / budgets (for correct accounting of 165 APMDP Operations Manual revenue and capital items), as well as looking at financial flows directly to the ULB as well as to state level institutions on behalf of the ULB (state water board, etc.). ii. Devolutions / State Transfers: The analyses will also include a detailed review of the trends in devolutions to the ULB from the state / GOI, including predictability of flows, basis for devolutions, budgeting of such transfers at both the ULB and state level, etc. The assessment will also cover a detailed analysis of the various intercepts to state devolutions towards realization of outstanding dues, if any, of the ULB and how these are accounted for. iii. Key Own Revenue and Expenditure drivers: The Consultant shall carry out an analysis of the key ULB revenue (such as property tax, water charges) and expenditure drivers to understand the current situation and identify key constraints (financial, legal and institutional) in enhancing buoyancy of revenues, expenditure management, periodic revision of rates / tariffs, collection efficiency, etc. and its impact on ULB finances. iv. State and Central Plan (Capital) Schemes: The Consultant shall undertake a comprehensive assessment of various on-going state and GOI funded capital investment schemes being directly undertaken by the identified ULBs as well as through state level entities (water boards, slum clearance boards, etc.). This will include overall project cost, financing plan, analysis of borrowings and debt servicing, other financial commitments (including contingent liabilities of the state government), current payment arrangements and terms of debt (interest rates, tenure, security, etc.), cost incurred till date and current status of implementation. Further, for capital schemes, the study would specifically need to look at extent of cost recovery, guarantees, debt servicing, cross-subsidies and impact on service delivery levels of the projects. v. ULB Borrowing capacity Analysis / Financial and Operating Plan (FOP): For the identified ULBs and based on the above, the Consultant shall carry out an ULB-wise assessment of additional sustainable debt / investments that the ULBs can undertake. It may be mentioned that the borrowing structure would be on a “general obligation” basis by the ULBs. Such borrowing capacity analysis will take into account operating surplus, current levels of year-on-year debt servicing obligations (both explicit debt on ULB’s books as well as implicit debt), other obligations / liabilities (such un-paid electricity dues) and suitable debt service coverage ratios for the proposed debt and caps on annual debt servicing as a percentage of annual revenues. Such borrowing / investment capacity analyses shall include a “base case” scenario based on current levels of revenues, debt, etc. and evaluation of various other scenarios taking into account: Higher levels of tax rates / tariffs Enhanced levels of state devolutions Loan / Grant mix Improved collection efficiencies Cost efficiencies / savings In addition to the borrowing capacity analysis above, the output will include a Financial and Operating Plan (summary financial statements) of both the operating and capital budgets 166 APMDP Operations Manual for the ULB as a whole over a 10-15 year horizon, including key projected financial indicators that can be monitored over the period of implementation of GUDP. vi. 1.5. Prioritized Sub-projects: The above FOP will also be used a basis for arriving at a prioritized and sustainable set of sub-projects and so the aforesaid FOP will need to be factor in subproject level capital (based on preliminary engineering estimates) and operating costs as well as sub-project level revenues as part of the overall ULB’s FOP. This process is expected to be iterative to extent that the results of the FOP itself may be used to modify the set of prioritized sub-projects. Outputs Expected from Financial Assessment 1. Conclusions regarding present financial position of the ULB, including a set of key financial indicators (operating surplus, debt servicing as a % of revenue / operating surplus, collection efficiency, etc.), as well as a clear action plan for improvement of finances over the medium term (5 years); 2. A Financial and Operating Plan (FOP) for the ULB as a whole, including 10-15 year financial projections separately for both the operating and capital budgets (a capital investment plan), taking into account also the likely impact of the prioritized subproject proposed to be undertaken over the medium term. 3. Conclusions regarding present financial position of stand-alone water supply and sewerage operations of the ULB, including key financial indicators over the last 3 years; 4. A 10-year business plan for the water and sewerage operations of the ULB, including financial projections of operating and capital budgets, tariff analysis under various scenarios, such that water supply and sewerage operations are able meet O&M expenses from user charges and begin to meet capital servicing as well over the medium term (5 years). 5. Reform Action Plan: This task shall also include an action plan containing specific measures as well as an implementation plan for improving the finances of the city (such as improving collection efficiency, enhancing the tax base, updating consumer database, new taxes / tariffs, etc.) i Financial Management Systems: The FMS assessment should focus on ULB’s institutional capacity to handle APDMP sub-projects, which should comprise: a. b. c. d. Staffing for sub-project civil work procurement, and fund drawdown and application; Recording and reporting of sub-project physical and financial progress; Budgetary provision for APDMP-funded sub-projects; and Compliance with audit requirement under the project. ii Social Assessment: The SEMF for APMDP governs the social assessment of sub-projects and the assessment should comprise: a. Screening procedures for reviewing sub-projects in order to classify them as those having high or medium, or low resettlement impacts; b. Mechanisms for addressing resettlement issues at different stages of sub-project cycle; 167 APMDP Operations Manual c. Stakeholder consultations during preparation and involvement of local people during project implementation; d. R&R policy identifying likely impacts and entitlement framework for the persons affected by sub-projects; and e. Roles and responsibilities of different agencies such as APUIF, ULBs and other government agencies in addressing resettlement issues. iii Environmental Assessment: The SEMF for APMDP governs the environmental assessment of sub-projects and the assessment should comprise: a. National, state and local legal requirements on environmental issues that will be applicable to the urban sector sub-projects; b. Screening procedures for reviewing sub-projects in order to classify them as those having high or medium or low environmental impacts; c. Sub-project cycle and methods to address environmental considerations and assessments at different stages; d. Carry out documentation disclosure activities; e. Public/stakeholder consultation done and approach during project implementation; and f. Environmental roles, and responsibilities of different Government agencies such as APUIF and ULBs. 1.6 Social and Environmental safeguards / mitigation plans / management plans / Resettlement Action Plans will be prepared as the agreed SEMF for APMDP as part of the DPR. Attachment 1: Checklist for Collection of Data on Solid Waste Management (A) Operational Aspects Generation 1. Information on population for the past five decades. The population tables shall cover: (a) Area of the city (b) Total population (c) Decadal population growth rates (d) Physical area under slums (e) Slum population figures (f) Administrative boundaries for effective SWM (g) Major source of town/city economy 2. Current ward wise population and broad land use details covering: (a) Physical area (b) Number of households (c) Population (d) Break up of slum dwellings & population (e) Area under slums (f) Vegetable markets (designated and illegal market areas) (g) Hotels and restaurants (h) Commercial and institutional units (i) Hospitals (j) Industries 168 APMDP Operations Manual (k) Workshops 3. Ward wise waste generation figures with an approximate break up of waste quantities from residential, markets, commercial/institutional, construction debris and hotels/restaurants 4. 5. Total Waste received at the dump site Waste Characteristics with specific details on source of information, sampling location and sampling procedure Collection 6. Methods and mode of primary Collection in different neighbourhoods (under the following categories with specific details on institutional/organizational arrangements and controls): (a) Collection by Local Body/Municipality (b) Collection by neighborhood community through residential associations/NGOs (c) Private sector involvement through Local Body (d) Any other special arrangements from slum localities (e) Arrangements for construction and building debris * for all the above categories provide information on quantity of waste collected, type of waste collected, Manpower costs involved, inventory of equipment and capital and O&M cost of equipment use 7. Norms followed for primary collection and the indicators identified for assessing the performance standards 8. 9. Aggregate cost per ton of waste collection Deficiencies/gap in solid waste collection mechanism and the quantum of un-attended waste 10. Investment requirements (manpower & equipment) to meet the gap 11. In case of community initiatives: details of user fee (apart from property tax) amount per household/month. Also estimate the extent of total area in the city serviced with the user fee based structure 12. If the rag pickers are involved in primary collection of waste, what is the modus operandi? 13. Type of road network details with the break up on different types of roads 14. Information on sweepers currently involved in sanitary work, including: (a) (b) (c) Local body employees (temporary/permanent staff) and costs involved NGO/Voluntary organization manpower under income generation schemes Private contracts, percentage coverage and costs Transportation 15. Transportation (detailed information to be collected as attached): (a) Type and age of fleet (details like vehicles, compatibility with primary collection) operated by Local body and costs (with a break up of staff, fuel and O&M) thereof (b) Private sector and/or involvement of self-help (income generation groups), the performance parameters for monitoring (type of fleet, coverage, haulage norms etc.) and quantum of total waste attended through such arrangements and costs thereof 169 APMDP Operations Manual 16. Fleet logistic management and maintenance facility within the local body (provide detail account of how the transportation routing, vehicle maintenance aspects are managed and institutional arrangements thereof) 17. What are the deficiencies in transportation? What are the investment requirements: (a) Fleet upgradation considering the compatibility with the primary collection system (b) Additional staffing (c) O&M Costs 18. Is there any transfer station? if so provide the details covering: (a) Location of the transfer station (b) Management/organizational structure (c) Inventory of vehicles and equipment (d) Total cost of operating the transfer station with detailed break up (staffing, equipment, O&M etc.) Treatment 19. Information on Waste Treatment Followed (information in the relevant form as per Table 4 in Annexure 5): (e) Technology (f) Quantity of total waste treated Disposal 20. Disposal Site: (a) Type of disposal (if the disposal sites are sanitary landfills provide landfill details) (b) Methods of monitoring the quantum of waste disposal (c) Number of sites and their location (d) Area and physical details of the sites 21. Data on contamination due to un-secured landfill (air, water, soil) 22. Information on PILs on disposal sites 23. What are the ongoing efforts to provide a landfill facility: (a) Status (b) Mode of implementation (c) Financing structure (d) Private sector involvement (B) Financial Aspects (covering for five successive financial years) 1. Total Municipal Budget 2. Property tax structure for: residential, commercial, industrial and institutional 3. Total amount of property tax 4. Solid waste management Share in property tax 5. Total cost of municipal staff vs. cost of staff for solid waste management 6. Annual capital cost for Municipal vehicular fleet renovation with a break up for SWM fleet and other services 7. Break up of cost of SWM (per ton or waste as well as aggregate values): 170 APMDP Operations Manual (a) (b) (c) (d) (e) 8. Primary collection of waste i. staff costs ii. equipment costs (recurring annual capital investments) iii. O&M costs for maintaining the equipment iv. cost towards private contracts (with information on waste quantity collected) Secondary Storage: i. staff costs ii. recurring capital cost of dustbins iii. maintenance of dustbins Transportation: i. staff costs ii. fuel costs iii. cost of O&M iv. cost towards private contracts Treatment costs Disposal Break up of quantity of manures and fertilizers procured per annum for horticultural and maintenance of parks and landscaping and cost thereof (C) Institutional Set up 1.Organogram 2.Staffing and reporting system 3.Community liaison 4.Contracts to private companies and their management Table1: Bin to population Ratio SR. No. Ward/Zone Population Type of bins used No. of bins provided Bin/population ratio Distance between the bins Frequency of clearance Table 2: Road length-Sweeper ratio Sr. No Ward/zone Popul. Road length KM No. of sweepers for street sweeping No. of sweepers collection of waste and picking up No. of sweepers Total Table 3: Municipal Solid Waste Transportation Fleet Inventory Type Vehicle Kilometer Workers Zones/wards Age (yrs.) Travelled + Drivers covered 171 Sweeper / population ratio Capacity Road length sweeper ratio Mileage (Km/lit.) Work norms adopted – road length per sweeper APMDP Operations Manual Table 4: Information on Compost Plants2 Other Treatment Technologies-Similar Level of Information to be Provided 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Plant Location Name of the municipality/Town Authority Project Proponent Waste treatment company structure Project gestation period Designed plant capacity and range of operational load during different seasons: (a) Winter (b) Summer (c) Monsoon (a)Plot Area (Ha.) (b)Plant Area (Ha.) including storage and processing units Type of waste treated (composite waste or any specific type of waste) Waste to compost ratio and the quantum of rejects per ton of waste Does the facility includes landfill site for disposal of the rejects (if so please provide the basic details such as landfill area, type of disposal capital and O&M cost of the site) Capital Cost (plant, machinery and civil cost) Cost of waste segregation facility in the plant (% of total capital cost) Cost of technology transfer Land cost O&M Cost per ton of waste treated at different plant load factors Waste Collection/transportation Responsibility (if any): (a) Mode of transport (b) Haulage distance and cost of transport per ton of waste Royalty charges on waste provided (if any) Local Body’s role Financial structuring of the project (a)Debt : Equity Ratio (b)Debt provider and broad terms (c)Equity share by stakeholders (d)Government subsidy/grant funding (if any) (e)Concession period (f)Cost of production per ton of compost (f)Revenue per ton of compost (g) Tax benefits (h)Internal Rate of Return Compost Marketing (a) Mode of marketing (including type of marketing network/delivery depots/dealer arrangements, etc. ) (b) Consumer profile 172 APMDP Operations Manual 21 22 23 24 25 (c) Sale price – ex factory, at bulk delivery points for retailing (provide haulage distances (d) Marketing Constraints (e) Competing products Post treatment responsibilities (a) Haulage distance and cost of transporting the compost rejects to landfill site Public response (support/resistance/NIMBY, etc.) Constraints (institutional/organizational/financial/nature of waste, etc.) Technology limitations Felt need for support Note: (i) This information may be provided for the plants currently operating as well as plats that are non functional 173 APMDP Operations Manual ANNEXURE 8: APPRAISAL NOTE-SAMPLE TEMPLATE APMDP Operations Manual Annexure 8: Appraisal Note-Sample Template XXXXX CORPORATION (Improvement to Solid Waste Management Handling) --------------------------------------------------------------------------------------Sanction of Loan of INR 88.80 lacs. 1. Introduction: XXX Corporation is incorporated under the …..Act and is located in YYY District. The population of the town as per 2001 Census is 6,97,088 . The town is spread over an area of 91 Sq.Kms and is mainly a trading center. The Municipality has approached APP FI for a loan of INR 88.80 lacs for implementation of solid waste management program. The debt status, demand – supply situation, the project viability, implementation schedules and risk factors are summarized below. The summary ends with the appropriateness of this project with reference to APP FI ’s exposure norms / lending policies and procedures. The special conditions to be imposed on the Corporation for sanction of this loan is also attached. Summary information on the project can be seen in Annexure I . 2. Debt Status: XXX Corporation has a total debt of INR 2228.82 lacs (FI I – INR 261.01 lacs, GoAP loan INR 1290.83 lacs, IUDP loan INR 266.84 lacs and APP FI loan INR. 410.12 lacs) as on 31.03.2001. XXX Corporation is in the process of submitting loan application for its proposed water supply project at a cost of Rs.24.84 Crores. The likely loan for this project is 20.84 Crores. The repayment obligation on this is expected to start from 2004-05 and has been considered while projecting the financials of the Corporation. There are no loan arrears of APP FI loans. The analysis of the debt-service ratios reveal that the current surpluses provide adequate safety for future repayment after loans for the proposed project are factored in. The total revenue receipts have increased from INR 2840.60 lacs in 1996-97 to INR 3160.02 lacs in 2000-2001, registering a compounded annual growth rate of 3 % p.a. The major items of revenue receipts include property tax and professional tax amounting to INR 645.16 lacs (20.40 % of the total income), taxes collected by other agencies such as duty on transfer of property amounting to INR 714.23 lacs (22.60 % of the total income), Income from special services and other receipts (other than SFC devolution )contributed INR 797.49 lacs. The total revenue expenditure for the year 200001 amounted to INR 2337.11 lacs. The expenditure incurred towards payment of salary for all the employees (including water supply) amounted to INR. 1788.15 lacs ( 73.51%). The expenditure under the head obligatory services, sanitation, medical relief and pubic works were to the tune of INR.354.43 lacs (15.16 % of total expenditure). The ratio of TE/TR and DS/TR for the year 2000-01 were 0.79 and 0.05 respectively which are satisfactory. The SFC devolution during the year 2000-01 was INR. 1002.12 lacs and tenth finance commission grant was INR. 116.95 lacs. The revenue receipts for the year 2004-05 is projected at INR 5246.73 lacs and expenditure for the same period is projected at INR 3425.76 lacs. Revision of property tax 174 APMDP Operations Manual to be effected every fifth year has been factored in the projection. As such the projected DSCR is satisfactory. The Corporation has to pay around INR 381.19 lacs as annuity on the loan outstanding in its books. The annuity payable for the proposed loan works out to INR 14.82 lacs. The Municipality’s debt service capacity can be seen in Annexure II and is satisfactory. The Corporation has changed the accounting method from cash system to accrual system from 1999-2000. For comparison purposes and to study the trend in the growth of the income and expenditure, the salary and other expenses are separated for each head of expenditure for the F.Y.1996-97 to 1998-99. In respect of F.Y.1999-2000 and 2000-01 the accounting heads in the trial balance are regrouped in line with the heads of expenses as per the old accounting books. The observation is that greater care has been taken in classification of revenue and capital items. Since the Balance Sheet schedules does not show the movement in the capital account the actual capital receipt and expenditure are not ascertainable. Hence the net figure is shown in the workings. 3. Demand and Supply: The Corporation generates 400Mts.of garbage daily. The conservancy operations covers 496 kms. of roads. The Corporation has sufficient fleet of conservancy vehicles to transport the waste to the dumping yard. At present solid waste is handled manually by the staff, which results in more labor hours for loading and unloading of solid waste thereby increasing the cost of operations. Hence Salem Corporation has decided to buy 72 steel containers and 6 dumper placers for mechanical handling of the solid waste. As part of it efforts to implement source segregation of solid waste the Corporations plans to buy wheel barrows and molded plastic containers to be placed in all the 60 wards. With this the present average distance between bins will be brought down. 4. Contracting Procedure The suppliers and contractor(s) for undertaking the implementation of the schemes would be selected by the local body by following the procurement guidelines of Bank with assistance and approval of MSU. The local body would issue the tender notification after obtaining necessary clearances from MSU. The contract agreement would adhere to the World Bank format and would address all World Bank formats. 5. Cost Benefit Analysis: The expenditure on public health in the municipality is around Rs.1.96 Crores per year. The efficient disposal of municipal solid waste through the proposed purchase of dumper placers, containers and bins will lead to a reduction in accumulation of the waste and thereby result in a reduction of public health hazards. Indicative analysis of the cost benefits clearly establish an ERR exceeding 12%. At present the Corporation is handling the Municipal Solid Waste manually and with huge labor cost. With the implementation of this project the Corporation will be in a position to introduce source segregation of Municipal Solid waste into degradable and non degradable at source and will facilitate the private sector participation in composting. Salem Corporation is in process of identifying a BOT operator for MSW composting. Once the BOT operator is in place, the Corporation will save significant space in the dumping yard for future landfill requirements. The above mechanization of 175 APMDP Operations Manual MSW handling will result in savings of Rs.24.00 lacs a year on account of salary to sanitary staff. The Corporation will be able to recover the investment in 6 years. 6. Means of Finance The means of finance are as follows: Total Project Cost APUIF Loan Grant (GoAP) Own Contribution : Rs. : Rs. : Rs. : Rs. 148.00 88.80 44.40 14.80 lacs. lacs. lacs. lacs 7. Grant Finance The Grant applications submitted by the Corporation for sanction of Grant for the above project was examined as per G.O. Ms.No.with G.O.Ms. No xx dept. dated 3.2.1997 and G.O.Ms.No.61 dated 16.03.2001. The Municipality is to satisfy the following conditions to be eligible for sanction of Grant. For Bus Stand, Commercial projects and other revenue earning schemes financial assistance under the Grand Fund will be subject to the following conditions: (i) The financial resource of the Local Bodies and financial assistance given by Government should be in the ratio of 3:1 (ii) 80% of property tax should have been collected in the past three years prior to the project investment year. (iii) The local body should have repaid all loan dues for two years prior to the project investment year. For basic Services such as water supply, sewerage removal, Roads, streetlights, solid waste management grant assistance will be available if more than 30% of project beneficiaries are people living below the poverty line. In case of xxx Corporation solid waste management project, it benefits more than 30% of the people living below poverty line, and hence the Corporation is eligible for project grant. As per the guidelines in respect of projects costing less than Rs.10 crores, project grant equivalent to 30% of the project cost can be sanctioned. Accordingly in this case the maximum grant works out to Rs. 44.40 lacs. (30% of 148.00 lacs.). 8. Institutional Capacity to Implement the Project: a) APP FI has undertaken an assessment of the adequacy of internal controls. The systems provide for accurate and timely reports of the accounts (sources and uses of funds) of the project and the physical performance of the project. The ULB has been furnished with copy of format and guidelines on the project management reports. b) The Municipality will adopt the procurement guidelines of IBRD. The Municipality based on the recommendations of APP FI would select the contractors and suppliers. The Corporation would follow relevant formats for selection of contractors for works. 176 APMDP Operations Manual 9. Implementation Schedule: Implementation schedule would consist of the following: a. Obtaining Administrative and Technical Sanction. ( obtained ) b. Tender notification and receipt of bids. c. Evaluation of bids followed by award of work order. d. Supply and installation. The project execution period is 12 months. 10. Risks and Uncertainties: The main project risk anticipated is that of delay in implementation. APP FI has stipulated that the local body would on its own make necessary arrangements to meet the additional fund requirements on account of time and cost overruns. The normal financial risk is not achieving projected financial indicators will not seriously affect the repayment as the current surplus is adequate to cover the loan / interest repayments of the proposed loan. 11. Environmental and Social impacts: As per APP FI's ESR norms, deployment of more than 5 vehicles (dumper placers) for solid waste management are Environmentally categorized as E2. The Municipality has to implement the Environment Management Plan which is as follows: Type of Project Procurement and operation of Compost Vehicles 12. Environmental Issue Air quality, Public Nuisance Environment Management Plan Procurement Phase O & M Phase Conform to Ensure pollution IS12402:1988 for checks mobile containers Ensure proper of solid waste coverage with tarpaulins/fishnet/ metallic cover while transporting solid waste Recommendations. The total exposure of APP FI to xxx Corporation including the present loan would be INR.7.59 crores, which is 3.83 % of APP FI ’s net-worth. Hence, it is recommended that APP FI may sanction a loan of INR.88.80 lacs to xxx Corporation as per main terms and conditions stipulated below: General Rate of Interest Repayment Security The Municipality should enter into agreement with APP FI xx% p.a. Principal moratorium – 5 year Interest moratorium - nil Repayment period - 15 years Frequency of Installments – yearly Escrow account mechanism on own sources of 177 APMDP Operations Manual Pre-disbursement conditions Disbursement conditions Other Conditions revenue such as property tax, professional tax, fee and other income etc will be enforced. 1. Necessary statutory approvals including council resolution and administrative / technical sanction from Government should be obtained by Municipality. 2. Approval of bidding process / tender documents by APP FI . 3. Approval of specification by APP FI and other statutory authorities before purchase of vehicles. ( dumper placers ) 4. Opening an escrow account for own sources of revenue such as property tax, professional tax, fee and other income etc with a scheduled commercial bank or bank acceptable to APP FI . The terms and conditions of the operation of the escrow account will be as specified by APP FI and covered in a tripartite contract between the banker, the Municipality and the APPFI The Corporation to bring 10% contribution before the release of final installment. 1. Selection of contractors and procurement of plant and machinery / instruments should follow the existing IBRD guidelines and would need appropriate sanctions from statutory authorities. The Corporation would undertake the selection of contractors / suppliers only after APP FI approves the selection procedure. 2. The Corporation undertakes to provide quarterly progress reports and utilisation of funds (SOE) during the procurement in the format prescribed by APP FI . 3. APP FI reserves the right to inspect the vehicle and its accessories any time during the procurement process and provide suggestions for incorporation in the procurement, if APP FI deems fit. 4. The Corporation undertakes to meet any cost overrun from its own sources on account of delay in procurement of the vehicles or due to increase in prices of materials / labor. 5. The project is to be implemented according to the environmental and social guidelines prescribed in APP FI ’s Environment and Social Report ( ESR ) . 6. The Corporation would undertake not to avail of fresh loans from any other agency during the tenure of APP FI ’s loan without obtaining written approval from APP FI . 7. The Corporation has to hypothecate the vehicles in favour of APP FI and to get endorsement in the RC book from the concerned RTO. 178 APMDP Operations Manual Loan Summary 1. 2. 3. 4. 5.. Borrower : XXX Corporation Project : Procurement of dumper placers, steel containers and molded polythene containers with wheel boroughs for solid waste management. Cost Estimates (Rs.in lacs) : 148.00 lacs. Financing Plan (Rs. in lacs) : 1. APUIF loan 2. Grant ( GoAP ) 3. Own contribution - 14.80 Terms of Loan : 14.50% p.a., Principal Moratorium 5 year Interest moratorium – nil 15 annual installments Tenor of loan : 20 years. 6. ESR Status : E2/S3 7. FRR & ERR, if applicable : FRR NA ERR > 12% 8. Debt status (without proposed Loan) : INR 2228.80 lacs Exposure to APUIF (including proposed loan) : 3.83 % Financial Ratios (for 1999-00) (a) Total Expenditure : TE 9. 10. Required <1 Rs. in lacs 88.80 - 44.40 Actual 0.79 _____________________________________999_________________________________________ Total Revenue TR (b) Debt service (Interest+Principal) <0.3 0.05 ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------TR (C) DSCR: Net Revenue 27.64 ---------------------------------------------------------------------------------------------------------------------Debt service (Interest +Principal) 11. Implementation timetable 179 APMDP Operations Manual (from the date of loan approval) 12. : Finalisation of contract & Award of contract - 2 month Procurement / construction - 10 Other critical issues : Opening of Escrow account Name of the project 1. 2. 3. 4. : Solid Waste Management Purchase of dumper placers : 6 nos. Steel Containers for garbage collection : 72 nos. Moulded plastic containers : 900 nos. Purchase of Wheel boroughs : 900 nos. ---------- Means of financing (Rs. in lacs) APUIF – Loan Grant ( GoAP ) Own funds Others Total 88.80 44.40 14.80 Nil 148.00 180 months ANNEXURE 9: MODEL LOAN/GRANT SANCTION LETTER Annexure 9: Model Loan/Grant Sanction Letter Letter No…….. To The Commissioner, Xxxx urban local Body, Date Dear Sir / Madam, Ref:- Application for financial assistance. Please refer to your application and the subsequent correspondence and discussions your representatives had with us regarding financial assistance for [NAME OF THE PROJECTS] in your Urban Local Body area. We are agreeable, to provide the Urban Local Body the following financial assistance: Rupee term loan not exceeding Rs xxx.xx lacs (Rupees ……………………………….only) Rupee Grant not exceeding Rs xxx.xx lacs (Rupees ……………………………….only) 1. 2. 3. 4. 5. The Loan is subject to the special terms and conditions set out in Annexure-I of this letter. The Urban Local Body shall enter into a Funding Agreement with TRUST. Draft of the Rupee Loan Agreement covering the above assistance would be forwarded to the Urban Local Body by TRUST after the Urban Local Body has accepted the terms and conditions of this Letter of Intent. In case the above tentative terms and conditions are acceptable, please furnish within 30 days from the date of receipt of this letter two certified copies of the resolutions to this office duly passed by the council of your Urban Local Body. Please note that this communication should not be construed as giving raise to any binding obligation on the part of TRUST unless the Urban Local Body communicates to TRUST within 30 days from the date of receipt of this letter that the terms and conditions set out herein are acceptable to it and unless the Rupee Loan Agreement and other documents relating to the above assistance are executed by the Urban Local Body in such form as may be required by TRUST within 3 months from the date of this letter or such further time as may be allowed by TRUST in its absolute discretion. Please acknowledge receipt of this letter. Yours faithfully, Secretary, APUIF Cc: Commissioner and Director of Municipal Administration, GOAP. 181 Attachment Sample format for Council Resolution …………….. Municipality Council Resolution Preamble: In the C.R.No……, dt……….. the following works were approved to be taken up under APDMP Project Amount in Rupees S.No. Name of the work Value considered for Project Loan from APUIF Grant from APUIF ULB Share Council Resolution No.: Dt………. Resolved to avail the loan amount of Rs…… from APUIF as per terms and conditions stipulated by APUIF towards implementation of the above works under APURMS Project and that the Commissioner be and is hereby authorised to enter into necessary agreements and sign the related documents on behalf of the council and is also authorised to effect repayment/payment of the loan and interest to APUIF after payment of electrical charges. The council also resolves to contribute as its share of the costs. Sd/Chairperson, ……………. Municipality 182 ANNEXURE 10: MODEL SUB-LOAN/GRANT AGREEMENT Annexure 10: Model Sub-Loan/Grant Agreement AGREEMENT NO. - APMDP/TDR/00012/2009 AGREEMENT TEMPLATE BETWEEN ANDHRA PRADESH URBAN INFRASTRUCTURE FUND AND TANDUR MUNICIPALITY (TM) FOR FUNDING “PROVIDING WATER SUPPLY FACILITIES AND CONSTRCTION OF CC ROADS” PROJECT FROM THE APMDP FUNDS 183 RS 100 STAMP PAPER FUNDING AMOUNT: Rs. 121.53 Lakhs of including Rs.104.21 Lakhs as Loan. THIS AGREEMENT executed at Hyderabad on this _______day of Two thousand and Nine. BETWEEN (1) Andhra Pradesh Urban Infrastructure Fund ……*to be filled in+., represented by its Secretary, hereinafter also referred to as ‘Corporation’, which expression shall, unless it be repugnant to the subject or context thereof, include its successors, administrators and assignees of the ONE PART; AND Tandur Municipality, a statutory body constituted under the_____________________________________, having its office at_______________________________________Tandur. Represented by its Commissioner, hereinafter referred to as TM and unless it be repugnant to the subject or context thereof, include its successors-in-interest and administrators of the OTHER PART; WHEREAS 1. Government of Andhra Pradesh for the purpose of funding Infrastructure Projects in the State of Andhra Pradesh, (“Andhra Pradesh”) undertaken by Urban Local Bodies / Statutory Bodies / Public Sector Undertakings/ Private Investors has set up the “ANDHRA PRADESH URBAN INFRASTRUCTURE FUND” (“APUIF”), a Trust within the meaning of the Indian Trusts Act, 1882, duly constituted by the Trust Indenture dated 23 February, 2005 (“the Trust Deed”) registered as document No.83 of Bk IV/2005 in the Office of the Registrar, Hyderabad. 2. Government of Andhra Pradesh, the Settlor of APUIF, has constituted the Board of Trustees and appointed itself as the TRUSTEE of the APUIF in accordance with the provisions of G.O Ms. No. 72MA dated 18-02-2005 of MA&UD Department. 184 3. To ensure that the APUIF receives relevant professional and experienced advice and the expertise in project financing and fund management, the TRUSTEE has entered into a Management Agreement dated 20 April 2005 (the Management Agreement) with Corporation, for purposes, inter alia, of appointing Corporation as the fund manager to manage the Trust Fund and providing, inter alia, for the utilization of the Central and State Government Contribution under various schemes by Corporation. Consequently this Agreement is now being entered into by Corporation on behalf of APUIF. 4. In accordance with the guidelines of GOAP Contribution are to be utilized by Corporation for purposes, inter alia, of providing financial assistance to Urban Local Bodies (as defined hereinafter) in Andhra Pradesh for carrying out urban infrastructure subprojects and activities. 5. The TM has requested Corporation to provide financial assistance out of the State Government Contribution for the purposes of financing the project described in Schedule 1 of this Agreement [Sub project]. 6. Corporation has accepted the Recipient’s request and has agreed, in accordance with the provisions of the APURMSP, to fund the Recipient out of the proceeds of the Central and State Government Contribution upon terms and conditions set forth in this Agreement and in accordance with the financing plan as detailed in schedule 2 to this agreement. 185 NOW THEREFORE THIS AGREEMENT WITNESSETH AS FOLLOWS: In pursuance of the above said premises the parties mutually covenant as follows:ARTICLE –I: DEFINITIONS Section 1.1 Unless the context otherwise requires, the several terms defined in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: a) “Accrual Period” means a financial year beginning April 1 and ending March 31 of the following year or part period thereof ending on March 31. b) “Auditors” means any independent auditor(s) viz. one or more firms of chartered accountant(s) appointed by the Corporation from time to time. c) “Business Day” means the day on which the registered office of the Corporation is open for business. d) “Completion Date” means the date by which the TM is required to complete the Subproject, as set out in Schedule-9 to this Agreement. e) “Consent” means all authorization, consents, licenses, permits, waiver, privileges, acknowledgements, agreements, concessions, approvals from and filings with or applications submitted to any Government Agency or any Person. f) “Directives” means any present or future policy, requirement, instruction, direction, order, regulation or rule of any government Agency which is legally binding or which would customarily be observed by a reasonable and prudent person, and any modification, extension or replacement thereof from time to time in force. g) “Financing Plan” means the plan dated _______________of the TM, which provides for, inter alia, the sources and utilization of finances for the implementation of Subproject as set out in Schedule 2 of this Agreement; h) "GOAP" means the Government of Andhra Pradesh, as represented by the Secretary, Municipal Administration and Urban Development Department, having its administrative headquarters at the A.P. Secretariat, Hyderabad – 500 022 or any other representative and its successors and assignors; i) “Subproject Cost” means the total cost of the Subproject as set out in Schedule 1 of this Agreement; j) “Procurement Plan” means GOAP procurement plan containing the Guidelines for implementation. 186 Project Section 1.2: Interpretation and Construction: a. The Words: “thereof”, “herein”, “hereto”, “hereby” and “hereunder” refer to this entire Agreement. b. Every “request”, “requisition”, “order” “demand” “application”, “direction”, “notice”, “statement”, “certificate”, “consent”, or similar action hereunder shall, unless the form there of is specifically provided be in writing and shall be signed by an authorized representative in the case of the TM and by representative of Corporation in the case of Corporation. c. All words and terms importing the singular number shall where the context requires import the plural number and vice versa. d. Words importing the masculine gender shall include female and neutral Gender. e. The headings and sub-headings to this Agreement are inserted only for reference to the provisions hereof and shall not affect the construction of such provisions. ARTICLE - II 2 TERMS OF DISBURSEMENT: 2.1 The Corporation agrees to fund the TM of an amount equal to Rs.1,21,53,763/- (Rupees One Crore Twenty One Lakhs and Fifty Three thousands Seven Hundred and Sixty Three only) out of which Rs.1,04,21,793 /- (Rupees One Crore Four Lakhs Twenty One Thousands Seven Hundred and Ninety Three only) as Loan on the terms and conditions set forth in this Agreement, Special Account (a) (i) The Recipient shall open and maintain a special account in a scheduled Bank acceptable to the Corporation, including appropriate protection against set-off, seizures and attachment. (ii) Disbursements made by Corporation from APURMSP funds shall be deposited by the Recipient into the Special Account. (iii) Payments from the Special Account shall be made only in respect of expenditures for goods, works and services required for financing of the Subproject. (iv) Recipient shall maintain all records and documents in respect of the entries on the Special Account and shall furnish all such records and documents for verification by the Corporation, as requested from time to time. (v) The Recipient shall also authorize the scheduled bank where the Special Account is maintained to furnish to the Corporation, as and when requested by it, a certified true copy of the said account together with all necessary details and online access to view such account all at the expense of the TM. 187 (b) All disbursements by the Corporation shall be made through inter-bank transfers/authorizations/cheques, collection and remittance charges in respect of which shall be borne by the TM. 2.2 Interest: a) The TM shall pay to the Corporation for depositing into APURMSP funds, interest on the principal amount of the Funds disbursed from time to time at the rate and on the dates as indicated in Schedule 4 of this Agreement. The interest on the Funds disbursed shall accrue from the date of authorization /cheque issued by the Corporation to TM. b) All interest on the Funds disbursed and or all other monies accruing due under this Agreement shall, in case they are not paid on the respective due dates, carry additional interest and / or penal interest at the applicable rate under this agreement.. Such interest will be computed from the respective due dates and shall become payable upon the footing of compound interest with quarterly rests as provided in this agreement and shall be payable in the manner and on the dates specified in Schedule 5 of this Agreement as amended from time to time. 2.3 Costs and Charges: a) The Recipient shall during the currency of the Funds disbursed bear all such imports, duties and taxes (including interest and other taxes, if any) as may be levied from time to time by the Government or other authority pertaining to or in respect of the Funds disbursed b) The TM shall pay all other costs, charges, including cost of investigation of title to the TM’s properties and protection of the Corporation’s interests, and expenses in anyway incurred by the Corporation and such additional stamp duty, other duties, taxes charges and other penalties if and when the TM is required to pay according to the laws for the time being in force in the State in which its properties are situated or otherwise. c) In the event of the Recipient failing to pay the monies referred to in sub-clauses (a) and (b), the Corporation will be at liberty (but shall not be obliged) to pay the same. The TM shall reimburse all such sums paid by the Corporation in accordance with the provisions contained herein. d) TM shall ensure that any concessions/exemptions claimed by the contractors regarding any statutory payments are not for the benefit of the contractors. 2.4 Repayment: a) The TM undertakes to repay to the Corporation the principal amount (s) of the Funds disbursed together with interest thereon in accordance with the Amortization Schedule given in Schedule 5 of this Agreement as may be amended from time to time. 188 b) The Corporation may, in suitable circumstances, revise, vary or postpone the repayment of the principal amounts of the Funds disbursed or the balance outstanding for the time being or any instalment(s) of the said principal amounts of the Funds disbursed or any part thereof upon such terms and conditions as may be decided solely by the Corporation. c) In the event of any default in the payment of instalments of principal, any interest, and liquidated damages, postponement, if any, allowed by the Corporation shall be at the rate of interest as may be stipulated by the Corporation at the time of postponement. d) If, for any reason, the amount finally disbursed by the Corporation out of the Funds disbursed Account is less than the amount of the Funds agreed, the repayment of the Funds disbursed shall stand modified accordingly, but shall be payable on the due dates as specified in the Amortization Schedule set forth in Schedule 5 of this Agreement as amended from time to time. e) Notwithstanding any other provision of this Agreement, the TM agrees that the Funds disbursed shall be repayable on a demand being made by the Corporation at any time. 2.5 Computation of Interest and Other Charges: Interest and all other charges shall accrue from day to day and shall be computed on the basis of 365 days year and the actual number of days elapsed. 2.6 Adjustment of Overdue: The Corporation may deduct from sums to be disbursed by it to the TM any monies then remaining due and payable by the TM to the Corporation. 2.7 Acceleration of Repayment by the Corporation: If any of the following events shall occur and shall continue for the period specified below, then at any subsequent time during the continuance thereof, the Corporation, at its option, by notice to the TM, declare the principal amount of the Funds disbursed then outstanding to be due and payable immediately together with the interest thereon and other charges upon such declaration such principal, together with the interest thereon and other charges, shall become due and payable immediately: (a) A default occurs in the payment of the principal required under this Agreement. (b) A default occurs in the payment of the interest or any other payment required under this Agreement and such default continues for a period of thirty (30) days. (c) A default occurs in the performance of any other obligation on the part of the TM and such default shall continue for a period of 30 (thirty) days after notice thereof shall have been given by the Corporation to the TM. 189 (d) The TM has become unable to pay its debts as they mature or any action or proceeding shall have been by the TM or by others whereby any of the assets of the TM shall or may be distributed among its creditors. (e) Any action has been taken for the dissolution, disestablishment or suspension of operations of the TM. (f) The TM have ceased to exist in the same legal form as that prevailing as of the date of this Agreement. (g) Any information given by the TM in its application for the Funds disbursed or in the reports and other information furnished by the TM under this Agreement or the warranties given / deemed to have been given by the TM to the Corporation shall be found to be misleading or incorrect or contradictory in any material respect. (h) The TM has failed to adequately insure the properties and assets offered to the Corporation as security for the Funds disbursed or such properties and assets shall have depreciated in value to such an extent that, in the opinion of the Corporation, further security to the satisfaction of the Corporation shall have been given and despite notice from the Corporation, the TM shall have failed to furnish such additional security. (i) Without the prior approval of the Corporation, the TM has sold, disposed of, charged, encumbered, or alienated any land, buildings, structures, machinery, plant or other equipment or such buildings, structures, machinery, plant or other equipment have been removed, pulled down or demolished. (j) The other financial institution(s) or bank(s) with whom the TM has entered into agreements for financial assistance have refused to disburse its / their loan(s) or any part thereof or have recalled its / their loan(s) under their respective loan agreement(s) with the TM (k) An extraordinary circumstance has occurred which make it improbable for the Subproject to be carried out or for the TM to fulfil its obligations under this Agreement. 2.8. Without prejudice to the provisions of Section 2.7 above, if any of the events specified in the said Section shall have occurred then the Corporation shall have the right to: (a) enter upon and take possession of the assets of the TM; and (b) transfer the assets of the TM by way of lease or sale. 190 2.9. Expenses of Preservation of Assets of TM and of Collection: All expenses incurred by the Corporation after an event of default set out in paragraph 2.7 above in connection with: i) preservation of the TM’s assets (whether then or thereafter existing); and ii) collection of amounts due under this Agreement, shall be payable by the TM. 2.10 Premature Repayment: The TM shall not prepay the outstanding principal amounts of the Funds disbursed/s in full or in part, before the dates set out in Schedule 5 to this Agreement as amended from time to time, except with the prior written approval of the Corporation. 2.11 Due Date of Payment: If the due date in respect of any instalment of principal, interest and liquidated damages and all other monies payable under this Agreement falls on a Sunday or a day which is a bank holiday at the place where the payment is to be made, the immediately preceding working day shall be the due date for such payment. 2.12 Liquidated Damages on Defaulted Amounts: In case of default in payment of instalment of principal, interest and all other monies (except liquidated damages) on their respective due dates, the TM shall pay on the defaulted amounts, liquidated damages as indicated in Schedule 4 to this Agreement for the period of default. Liquidated damages shall be payable in the manner and on the dates as specified in this Agreement for payment of interest. 2.13 Reimbursement of Expenses: a) The TM shall reimburse all sums paid by the Corporation under the terms of this Agreement within 30 days from the date of notice of demand from the Corporation. All such sums shall be debited to the ‘Funds disbursed and Grant Account’ and shall carry interest from the date of payment till such reimbursement at the applicable rate for the loan. b) In case of default in making such reimbursement within 30 days from the date of notice of demand, the TM shall also pay on the defaulted amounts, liquidated damages as indicated in Schedule 4 to this Agreement from the expiry of 30 days from the date of notice of demand till reimbursement in accordance with this agreement. 191 2.14 Appropriation of Payment: a) Unless otherwise agreed by the Corporation, any payments due and payable under this Agreement and made by the TM shall be appropriated towards such dues in the following order, viz., i) Premium on prepayment; ii) Interest on costs, charges, expenses and other monies; iii) Penal interest and all liquidated damages on defaulted amounts payable in terms of this Agreement; iv) Interest, including additional interest, payable in terms of this Agreement; v) Costs, charges, expenses and other monies; vi) Repayment of instalments of principal due and payable under this Agreement. b) Notwithstanding anything contained in sub-clause (a) hereinabove, the Corporation may, in its sole discretion, appropriate such payments towards the dues, if any, payable by the TM in respect of other loan (s) availed of by the TM from the Corporation in the order specified in the relative Agreements. 2.15 Place and Mode of Payment and Credit therefore: All monies payable by the TM to the Corporation shall be paid to the Corporation in the Bank account of the Corporation as described in the Schedule -8 of this Agreement, as amended from time to time and shall be so paid as to enable the Corporation realise, at par, the amount on or before the respective due dates. OR Credit for all payments by local cheque/pay order will be given on the Corporation’s immediate next business day after the date of receipt of the instrument or the respective due date or the date of realisation, whichever is later. Credit for all payments by outstation cheque or bank draft will be given only on realisation or on the respective due date, whichever is later. 2.16. Notwithstanding anything contained in the Agreement and for the purpose of clarity, it is clarified that all the payments to be made by Municipality relating to the Loan like repayment of loan amounts, interest, costs and charges, liquidated damages etc. shall be deposited only in the APURMSP Fund Account maintained by the Corporation in Bank as detailed in Schedule 8.” 192 ARTICLE III. EXECUTION OF THE INVESTMENT SUBPROJECT 3.1 The TM declares its commitment to the objectives of the Subproject and, to this end, shall carry out the Subproject with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering practices, and environmental and social standards, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the Subproject. 3.2 Without limitation upon the provisions of Section 3.1 above of this Article III and except as the Corporation and the TM shall otherwise agree, the TM shall carry out the Subproject in accordance with the Implementation Program set out in the Schedule 6 of this Agreement. 3.3 Except as the Corporation shall otherwise agree, procurement of goods, works and services required for the Subproject shall be governed by the provisions of Schedule 7 of this Agreement, and the said provisions may be further elaborated in the Procurement Plan. ARTICLE IV 4.1 SECURITY Security for the Funds disbursed: The Funds disbursed together with all interest, liquidated damages, premia on prepayment or on redemption, costs, expenses and other monies whatsoever stipulated in this Agreement may be secured by an exclusive charge by way of hypothecation by the TM in favour of the Corporation of its immovable and movable assets more fully described in Schedule 8 to this Agreement. 4.2 Creation of Additional Security: If, at any time during the subsistence of this Agreement, the Corporation is of the opinion that the security provided by the TM has become inadequate to cover the balance of the Funds disbursed then outstanding, then, on the Corporation advising the TM to that effect, the TM shall provide and furnish to the Corporation, to the satisfaction of the Corporation such additional security as may be acceptable to the Corporation to cover such deficiency. ARTICLE V 5. : TM’S WARRANTIES: Except to the extent already disclosed in writing by the TM to the Corporation, the TM shall be deemed to have assured, confirmed and undertaken as follows: DUE PAYMENT OF PUBLIC AND OTHER DEMANDS:- 193 The TM is not in arrears of any dues to the State or Central Governments or any authority under law. ARTICLE VI 6. : CONDITIONS PRECEDENT TO DISBURSEMENT The obligation of the Corporation to make disbursements under this Agreement shall be subject to the TM performing all its obligations and undertakings under this Agreement and compliance with the following conditions: a) SECURITY IN FAVOUR OF THE CORPORATION The TM, as may be required by the Corporation, shall have created security as stipulated in this Agreement in favour of the Corporation. b) NON-EXISTENCE OF EVENT OF DEFAULT: The TM shall have satisfied the Corporation that no event of defaults as defined in this agreement and no event which, with the lapse of time or notice and lapse of time as specified in this agreement, would become an event of default, has happened and been continuing. c) COMPLIANCE WITH OBLIGATIONS The TM shall have complied with its obligations set out in Schedule 6 and else where in this agreement. d) UNDERTAKING FOR MEETING SHORTFALL: The TM shall have furnished or deemed to have been furnished an undertaking that it shall take the responsibility for making arrangements satisfactory to the Corporation for meeting the shortfall, if any, in the resources of the TM for completing the Investment Subproject. The funds brought in to meet the shortfall in the resources of the TM for completing the Investment Subproject shall be in such form and manner and on such terms as may be required by the Corporation. ARTICLE VII FINANCIAL MANAGEMENT AND REPORTING 7.1 The TM shall, and shall cause its agencies carrying out any activities under the Investment Subproject to: (a) (i) maintain a financial management system, including records and accounts, and prepare financial statements, in accordance with consistently applied accounting standards acceptable to the Corporation, adequate to reflect its operations and financial condition and to register separately the operations, resources and expenditures related to the activities set out in Schedule 1 to this Agreement; 194 (ii) have the financial statements referred to in paragraph (i) above, for each Fiscal Year audited, in accordance with consistently applied auditing standards acceptable to the Corporation, by independent auditors acceptable to the Corporation; (iii) furnish to the Corporation, as soon as available, but in any case not later than six months after the end of each such Fiscal Year, (A) certified copies of the financial statements referred to in sub paragraph (i) of this paragraph (a), for such Fiscal Year as so audited, and (B) an opinion on such statements by said auditors, in scope and detail satisfactory to the Corporation; and (iv) furnish to the Corporation, such other information concerning such records and accounts and the audit of such financial statements, and concerning said auditors, as the Corporation may from time to time reasonably request; (b) exchange views with and furnish all such information to the Corporation as may be reasonably requested by the Corporation, with regard to the progress of the activities set out in Schedule 1 to this Agreement; (c) prepare and submit to the Corporation, monthly reports on the progress of the activities set out in Schedule 1 to this Agreement all in a manner satisfactory to the Corporation; (d) assist the Corporation in updating the Procurement Plan. ARTICLE - VIII 8.1 The TM shall: (i) Promptly notify the Corporation of any proposed change in the nature or scope of the Investment Subproject and of any event or condition which might materially and adversely affect or delay completion of the Investment Subproject or result in substantial overrun in the original estimate of costs. Any proposed change in the nature or scope of the Investment Subproject shall not be implemented or funds committed thereof without the prior written approval of the Corporation: ii) Obtain prior concurrence of the Corporation to any material modification or cancellation of the TM’s agreements with its suppliers, and/or technical and other consultants; and iii) Promptly inform the Corporation of the circumstances and conditions that are likely to disable the TM from implementing the Investment Subproject or which are likely to delay its completion or compel the TM to abandon the same. 8.2 The TM shall not prepay any loan availed of by it from any other party without the prior approval of the Corporation. If for any reason, the TM is required to prepay any loan, it shall make proportionate prepayment to the Corporation as well as subject to such conditions as may be stipulated by the Corporation. 195 8.3 INSURANCE: a) Keep insured up to the replacement value thereof as approved by the Corporation (including surveyor’s and architect’s fees) the properties charged / to be charged to the Corporation and such other properties as may be stipulated by the Corporation, as are of an insurable nature against fire, theft, lightning, explosion, earthquake, riot, strike, civil commotion, storm, tempest, flood, marine risks, erection risks, war risks, and such other risks as may be specified by the Corporation and shall duly pay all premium and other sums payable for that purpose. The insurance in respect of the properties charged / to be charged to the Corporations shall be taken in the joint names of the TM and the Corporation and any other person or institution having an insurable interest in the properties of the TM and acceptable to the Corporation. The TM shall keep deposited with the Corporation the insurance policies and renewals thereof. b) Undertake insurance to cover hazards incidental to the acquisition, transportation and delivery of goods financed out of the proceeds of the Funds disbursed and Subgrant to the place of use or installation, in a manner satisfactory to the Corporation. c) Agree that, in the event of failure on the part of the TM to insure the properties and goods or to pay the insurance premium or other sums referred to above, the Corporation may get the properties and the goods insured at the TM’s cost. d) Promptly inform the Corporation of any loss or damage which the TM may suffer due to any force majeure circumstances or act of God, such as earthquake, flood, tempest or typhoon, etc. against which the TM may not have insured its properties / the project. 8.4 MANAGEMENT: Unless the Corporation otherwise agrees: (i) The TM shall, as and when required by the Corporation appoint and change to the satisfaction of the Corporation, suitable technical, financial and executive staff of proper qualifications and experience for the key posts. The terms of such appointments including any changes therein, shall be subject to prior approval of the Corporation. (ii) The Corporation shall have the right to appoint, whenever it considers necessary, any person, firm, company or association of persons engaged in technical, management or any other consultancy business to inspect and examine the working of the TM and its factory and to report to the Corporation. The Corporation shall have the right to appoint, whenever it considers necessary, any Chartered Accountants / Cost Accountants as auditors for carrying out any specific assignment(s) or to examine the financial or cost accounting system and procedures adopted by the TM working or as concurrent or internal auditors, or for conducting a special audit of the TM. The costs, charges and expenses including professional fees and travelling and other expenses of such consultants or auditors shall be payable by the TM. 196 (iii) The TM shall constitute such committees of its Corporation with such composition and functions as may be required by the Corporation for close monitoring of different aspects of its working. ARTICLE IX 9.1. INSPECTION The TM shall: a. PROJECT EXPENDITURE RECORDS:Maintain records showing expenditure incurred on the Investment Subproject, utilisation of the disbursements out of the Funds disbursed and progress of the Investment Subproject and the operations and financial conditions of the TM and such records shall be open to examination by the Corporation and its authorised representatives. b. TECHNICAL, FINANCIAL AND LEGAL INSPECTIONS: Permit the Corporation and its authorised representatives to carry out technical, quality, financial and legal inspections during the construction and operation periods of the Investment Subproject and to inspect all records, registers and accounts of the TM. Any such representative of the Corporation shall have free access at all reasonable times to any part of the TM’s premises and to its records, registers and accounts and to all schedules cost estimates, plans and specifications relating to the Investment Subproject and shall receive full cooperation and assistance from the employees of the TM. The cost of inspection, including travelling, all other expenses shall be payable by the TM to the Corporation in this behalf. 9.2. REVIEW OF THE INVESTMENT SUBPROJECT a. The Corporation may, at any time during the implementation of the Investment Subproject conduct a review on the progress thereof, of such scope and in such details as may be satisfactory to the Corporation. b. If as a result of such review, the Corporation determines that the TM is not implementing/or is not likely to implement the Investment Subproject in accordance with the provision of this Agreement, the Corporation may require the TM to take such measures as the Corporation shall determine, on terms and conditions satisfactory to the Corporation. ARTICLE X 10.1 CANCELLATION, SUSPENSION AND TERMINATION: CANCELLATIONS BY THE TM / INVESTMENT/GRANT RECIPIENT The TM, by notice in writing to the Corporation can cancel the Funds disbursed and grant or any part thereof, which the TM has not withdrawn prior to the giving of such notice. 197 10.2 SUSPENSION BY THE CORPORATION: If any of the following events shall have occurred and be continuing, the Corporation may, by notice to the TM suspend in whole or in part the right of the TM to make withdrawals from the Funds disbursed Account. a. Upon failure by the TM to carry out all or any of the terms of this Agreement or on the happening of any events set forth in paragraph 2.7 of Article II of this Agreement. b. If any extra ordinary situation makes it improbable that the TM would be able to perform its obligations under this Agreement. c. If any change in the TM’s set up has taken place which, in the opinion of the Corporation, would adversely affect the conduct of the TM’s business or the financial position or the execution and completion of the Investment Subproject. d. upon notice by the GOI/GOAP that it intends to exercise any of its remedies under General Law. e. upon notice by the TM that it intends to terminate this Agreement with the Corporation, or upon the actual termination of this Agreement, whichever occurs first. 10.3 The right of the TM to make withdrawals from the Funds disbursed shall continue to be suspended until the Corporation has notified the TM that the right to make withdrawals has been restored. 10.4 CANCELLATION BY THE CORPORATION If (a) the right of the TM has been suspended with respect to any amount of the Funds disbursed for a continuous period of thirty (30) days; or (b) at any time the Corporation determines, after consultation with the TM, that an amount of the Funds disbursed will not be required to finance the Investment Subproject’s costs to be financed out of the proceeds of the Funds disbursed or (c) at any time, the Corporation determines with respect to any contract to be financed out of the proceeds of the Funds disbursed that corrupt or fraudulent practices were engaged in by representatives of the TM, without the TM having taken timely and appropriate action satisfactory to the Corporation to remedy the situation, and establishes the amount of expenditures in respect of such contract which would otherwise have been eligible for financing out of the proceeds of the Funds disbursed or (d) at any time, the Corporation determines that the procurement of any contract to be financed out of the proceeds of the Funds disbursed is inconsistent with the procedures set forth in this Agreement and establishes the amount of expenditure in 198 respect of such contract which would otherwise have been eligible for financing out of the proceeds of the Funds disbursed or (e) after the date specified in Article 2.1 and Schedule-2 and Schedule-6 of this Agreement, any amount of the Funds disbursed shall remain unwithdrawn from the Funds disbursed and unutilised, the Corporation may, by notice to the TM terminate the right of the TM, to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Funds disbursed shall be cancelled and the Corporation shall have the right to recall such un withdrawn amount from the Bank. 10.5 EFFECTIVENESS OF PROVISIONS AFTER SUSPENSION OR CANCELLATION Notwithstanding any cancellation or suspension, all the provisions of this Agreement shall continue in full force and effect except as specifically provided in this Agreement. 10.6 TERMINATION If and when the entire principal amount of the Funds disbursed withdrawn from the Funds disbursed Account and all interest and other charges which shall have accrued in accordance with the provisions of this Agreement shall have been paid, this Agreement and all obligations of the parties there under shall forthwith terminate. ARTICLE XI 11.1 WAIVER WAIVER NOT TO IMPAIR THE RIGHTS OF THE CORPORATION: No delay in exercising or omission to exercise any right, power or remedy accruing to the Corporation upon any default under this Agreement, security documents or any other agreement or document shall impair any such right, power or remedy or shall be construed to be a waiver thereof or an acquiescence in such default, nor shall the action or inaction of the Corporation in respect of any default or any acquiescence by it in any default, affect or impair any right, power or remedy of the Corporation in respect of any other default. ARTICLE XII 12.1 MISCELLANEOUS SERVICE OF NOTICE: Any notice or request to be given or made to the Corporation or to the TM or to any other party shall be in writing. Such notice or request shall be deemed to have been given or made when it is delivered by hand or dispatched by mail or telegram to the party to which it is required to be given or made at such party’s designated address. 12.2 a) EVIDENCE OF DEBT:The Corporation shall maintain, in accordance with its usual practice accounts evidencing: 199 1) 2) 3) 4) b) 12.3 The amounts from time to time lent by and owing to APURMSP under this Agreement The amount of any advance made under this Agreement The amount of any principal or interest due or to become due from the TM to the Corporation under this Agreement. The amount of any sum received or recovered by the Corporation under this Agreement and / or security documents executed in favour of the Corporation. In any legal action or proceedings arising out of or in connection with this Agreement, the entries made in the accounts maintained pursuant to these clauses above shall be prima-facie evidence of the existence and amount of obligations of the TM as therein recorded. BENEFIT OF THIS AGREEMENT: This Agreement shall be binding upon and ensure to the benefit of each party thereto and its successors. 12.4 HEADINGS The headings of various Articles and Sections herein and in this Agreement are inserted for convenience of reference and are not deemed to affect the construction of the relative provisions. 12.5 CIVIL LITIGATION Any dispute or litigation or conflict arising out of this Agreement shall be resolved through mutual discussions and amicable negotiations. In case such mutual discussions fail, the dispute shall be referred to the Secretary to Government, Municipal Administration and Urban Development Department, GOAP. However, if litigation does become inevitable, the same shall be contested before a competent civil court having jurisdiction over Hyderabad, the headquarters of the Corporation. IN WITNESS WHEREOF the parties have executed this Agreement as follows:- SIGNED AND DELIVERED BY THE within named Corporation by the hand of Managing Director 200 Andhra Pradesh Urban Finance and Infrastructure Development Corporation Limited (Corporation) SIGNED AND DELIVERED BY THE within named TM by the hand of Shri Commissioner, TM an authorised official of the TM Witnesses: 1. 2. 201 SCHEDULE-1 (Rupees in Lakhs) Details of Sub Projects approved for Tandur Municipality Sl.No. 1 1 2 Scheme Name. 2 APURMSP APURMSP Sector Total Project Cost Loan Grant TM share 3 4 5 6 7 8 Water Supply Laying of water supply pipelines in Saipur, Valimikinagar, Gumasta Colony, seetharampet & other areas 86.64 60.65 17.32 8.66 CC Roads Laying of CC road from Syndicate polishing unit to MDO office and Chincholi road to existing C.C.road via DPEP School 48.40 43.56 0.00 4.84 135.05 104.21 17.32 13.50 Total Corporation Pattern of Finance Name of the Work 202 TM SCHEDULE 2 Financing Plan (Rupees in Lakhs) Package I - Water Supply Name of the work Date of Installment release of Installment 1 1st nd 2 rd 3 Funding Amount 2 01.03.2009 01.04.2009 01.05.2009 3 Grant 4 30.327 15.163 15.163 5 8.665 4.332 4.332 86.649 60.654 17.330 86.649 Total Loan Package III - CC Roads Funding Amount 8 Loan Grant 6 4.332 2.166 2.166 Total 7 43.324 21.662 21.662 8.665 86.649 Total of Package I & III ULB Share Total 9 21.782 10.891 10.891 10 0.000 0.000 0.000 11 2.420 1.210 1.210 48.404 43.564 0.000 4.840 48.404 48.404 ULB Share 12 24.202 12.101 12.101 Funding Amount 13 Loan ULB Share Grant 14 52.109 26.054 26.054 15 8.665 4.332 4.332 135.053 104.218 17.330 135.053 16 6.753 3.376 3.376 Total 17 67.526 33.763 33.763 13.505 135.053 Funding Value includes the ‘Contract Value’ and a fixed percentage of the Contract Value as detailed below: 1. 2. 3. 4. 5. Insurance Technical assistance Banker Charges VAT Advertisement Charges Corporation 0.52% 1% 0.2% 4% 1% 203 TM SCHEDULE 3 Schedule for Loan / Grant Withdrawal Date: From: The Commissioner TM ____________ District. To The Managing Director, APUFIDC, 2nd floor, Engineer-in-Chief (PH) Office Complex AC Guards, Hyderabad – 500 004 Letter No: Sir, Subject: Corporation / APURMSP - Grant/Loan – Withdrawal of Grant/Loan – Withdrawal Application No. Reference: Loan Agreement Number – APURMSP/ dated I am submitting the following documents for your review and consideration 1) 2) 3) 4) 5) Progress Report (in the format enclosed as Annexure – 1) Statement of Expenditure (in the format enclosed as Annexure-2) Grant Utilisation Details (Annexure-3) Utilisation Certificate for an amount of Rs. (Annexure-4) Resolution of the Council requesting for the release of Loan and/or/Grant from APURMSP funds . I request you to release the Grant/Loan from APURMSP funds for an amount of Rs._______________ as the ___________ installment of the funding Agreement referred above. Thank you and best regards, Commissioner TM Note: Delete whatever is not applicable. Withdrawal Applications (WA) should be numbered serially. Corporation 204 TM SCHEDULE 3 Annexure – 1 Progress Report TM: Period of Report: From : Withdrawal Application No. To : (Amount in Rupees) S Name of Descriptio No. the Work n of Work 1 2 3 Work Done Since Last Release of Funds Value of Work Done 4 5 APURMS P Grant/L oan Received till Date 6 Amount Spent Balance Availabl e Amount Request ed in this WA Remarks 7 8 9 10 I certify that I have personally verified the above information and confirm the authenticity of the same. The Council has been apprised of the progress. Commissioner, TM Corporation TM 205 SCHEDULE 3 Annexure – 2 Statement of Expenditure TM: Period of Report: Loan Agreement No. To From : : (Amount in Rupees) S Item of No. Expenditure 1 2 Value of Column (2) Voucher No. & Date Amount Paid Date of Payment Cheque No. 3 4 5 6 7 Payee Name and Address 8 Remarks 9 I certify that the above information is correct and true to the best of my knowledge. The Council has been apprised of this report. Commissioner, TM Corporation TM 206 SCHEDULE 3 Annexure – 3 Statement of Sub Loan / Sub Grant released & utilised from APURMSP Funds. TM: Date of Reporting: Current WA No. (Amount in Rupees) Grant Loan S Remarks No. Sanctioned Released Utilised Balance Sanctioned Released Utilised Balance 1 2 3 4 5 6 7 8 9 10 I certify that the above information is correct and true to the best of my knowledge. Commissioner, TM Corporation TM 207 SCHEDULE 3 Annexure – 4 Utilisation Certificate TM: Date of Reporting: Letter No. & Date MD, Corporation Amount Certified that out of Rs. of loan / grant sanctioned during the year in favour of Municipal Commissioner, TM, under APURMSP(Externally Aided Project) vide Letter No. given in the margin, a sum, of Rs. has been utilized for the purpose of execution of APURMSP works only. Lr.No. & Date: Loan Agreement No. & Date: Certified that I have satisfied myself that the conditions on which the loan / grant were sanctioned have been duly fulfilled / are being fulfilled and that I have exercised the following checks to see that the money was actually utilised for the purpose for which it was sanctioned. Kinds of checks exercised: 1. Vouchers (No. Dt. 2. Cheques (No. Dt. 3. M.Books ( ) ) ) Commissioner TM Corporation TM 208 SCHEDULE - 4 Interest and other Charges 1. The TM shall pay to the Corporation to be deposited into APURMSP funds an interest of seven and half percent (7.5%) per annum, or at a rate determined from time to time by the Corporation, whichever is higher, on the Principal amount of the Funds disbursed. The TM shall deposit the interest accrued on the Principal in the Account of the Corporation as referred to in the Schedule – 8 of this Agreement, on the last day of every quarter, as detailed in Schedule – 5 to this Agreement, duly reckoning the first day of the financial year, i.e., first of April of the calendar year, as the first day of the quarter. 2. The TM shall pay to the Corporation a documentation fee in an amount equal to half a percent (0.5%) of the amount of the loan, and a service fee in an amount equal to half a percent (0.5%) of the loan approved as referred to in the Article 2.1 of this Agreement. The Corporation shall deduct this amount from the loan disbursed to the loan Account by the TM. 3. In the event of default of payment of any installment of the loan and /or the interest in respect of the loan or different components of the loan on the due dates, the TM without prejudice to the right of the Corporation to suspend and / or cancel the Loan as provided at the Articles 10.2 and 10.3 of this Agreement respectively, shall pay an additional interest at the rate of two percent (2%) per annum, or such other rate as may be determined by the Corporation from time to time, on the amount due for payment from the TM. Corporation TM 209 SCHEDULE 5 Amortization Schedule Packages I & III Rs. In Lakhs Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Corporation TM Date of Payment 31-Mar-09 30-Jun-09 30-Sep-09 31-Dec-09 31-Mar-10 30-Jun-10 30-Sep-10 31-Dec-10 31-Mar-11 30-Jun-11 30-Sep-11 31-Dec-11 31-Mar-12 30-Jun-12 30-Sep-12 31-Dec-12 31-Mar-13 30-Jun-13 30-Sep-13 31-Dec-13 31-Mar-14 30-Jun-14 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 31-Mar-16 30-Jun-16 30-Sep-16 31-Dec-16 31-Mar-17 30-Jun-17 30-Sep-17 31-Dec-17 31-Mar-18 30-Jun-18 30-Sep-18 31-Dec-18 Interest @ 7.50% Principle 0.332 1.788 1.970 1.970 1.927 1.949 1.970 1.970 1.927 1.949 1.970 1.970 1.949 1.949 1.970 1.970 1.927 1.949 1.970 1.970 1.927 1.909 1.891 1.851 1.772 1.752 1.732 1.692 1.617 1.595 1.573 1.533 1.478 1.438 1.414 1.375 1.306 1.281 1.256 1.216 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 210 Total 0.332 1.788 1.970 1.970 1.927 1.949 1.970 1.970 1.927 1.949 1.970 1.970 1.949 1.949 1.970 1.970 1.927 1.949 1.970 1.970 4.027 4.009 3.991 3.951 3.872 3.852 3.832 3.792 3.717 3.695 3.673 3.633 3.578 3.538 3.514 3.475 3.406 3.381 3.356 3.316 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Total 1 31-Mar-19 30-Jun-19 30-Sep-19 31-Dec-19 31-Mar-20 30-Jun-20 30-Sep-20 31-Dec-20 31-Mar-21 30-Jun-21 30-Sep-21 31-Dec-21 31-Mar-22 30-Jun-22 30-Sep-22 31-Dec-22 31-Mar-23 30-Jun-23 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 30-Sep-24 31-Dec-24 31-Mar-25 30-Jun-25 30-Sep-25 31-Dec-25 31-Mar-26 30-Jun-26 30-Sep-26 31-Dec-26 31-Mar-27 30-Jun-27 30-Sep-27 31-Dec-27 31-Mar-28 30-Jun-28 30-Sep-28 31-Dec-28 1.151 1.124 1.097 1.057 0.995 0.967 0.938 0.898 0.840 0.810 0.779 0.739 0.692 0.653 0.620 0.581 0.529 0.496 0.462 0.422 0.374 0.359 0.344 0.325 0.299 0.284 0.268 0.248 0.224 0.208 0.191 0.172 0.150 0.132 0.115 0.096 0.075 0.057 0.038 0.019 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 2.100 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 1.011 3.251 3.224 3.197 3.157 3.095 3.067 3.038 2.998 2.940 2.910 2.879 2.839 2.792 2.753 2.720 2.681 2.629 2.596 2.562 2.522 1.385 1.370 1.355 1.336 1.310 1.294 1.278 1.259 1.235 1.219 1.202 1.183 1.160 1.143 1.126 1.106 1.086 1.068 1.049 1.030 88.784 104.218 193.002 The Sub loan for Package I and Package III is amortized over a period of twenty (20) years and fifteen (15) years respectively including five (5) years of moratorium for payment of principal. NOTE: The Interest as applicable in terms of this agreement shall be charged from the date of release of Loan component. Corporation TM 211 SCHEDULE 6 Implementation Programme The TM shall implement the sub project in accordance with the financing plan in Schedule 2 and time lines as per Schedule 9 including sub components. SCHEDULE 7 Procurement The TM shall follow the procurement procedures as laid down by the World Bank from time to time for procurement of Materials, Services etc. SCHEDULE 8 SECURITY The TM shall implement all such measures as prescribed by the Corporation from time to time to establish adequate security mechanism to ensure timely payment of interest and the principal due to the Corporation to be deposited into APURMSP funds and arrange the payment of Interest and the Principal due to the Corporation as stipulated in the Amortization Schedule referred to in Schedule 5 in the account of the Corporation described below: Name of the Bank Name of the Branch Bank Account Number Branch code No. Telephone Number Fax Number : State bank of Hyderabad : MCH Branch : 52082158169 : 2432 : 040-23225011 : 040-23220719 Schedule 9 Time schedule for commencement and completion of subproject (to be given by the TM and approval by the corporation.) Schedule 10 Environmental Related Mitigations measures and Social Management Plan 1. Quality Assurance:The Corporation reserves the right to inspect the implementation of the project any time during its progress and subsequently. Corporation TM 212 The Corporation shall reserve the right to appoint such agents the Corporation deems fit to supervise and monitor the quality and the timeframe of implementation of the Subproject and the borrower shall implement such suggestions that might be provided by the Corporation through its agents in this regard. 2. Environmental Related Mitigations The TM shall perform the following functions to reduce the adverse impact of the subproject on the environment: 1. shall identify alternative suitable sites before starting the excavation works to avoid the change in topography; 2. shall take all possible measures to avoid creation of borrow pits in and around the site that could lead to water logging in the vicinity of the worksite; 3. shall provide alternative route / bypass for traffic during construction work to avoid traffic congestion; 4. shall ensure that the appurtenances including the vehicles used for construction activities comply with standards of the CPCB; 5. shall undertake regular sprinkling of water required to settle the dust coming up during the construction job; 6. shall ensure alternative arrangement for ground water recharge; 7. shall monitor the noise levels on the road during operational phase and ensure proper maintenance of the roads during the operational phase, especially during monsoons; 8. shall implement property safety measures during the construction so that the water bodies are not polluted; and 9. shall employ safe engineering practices during construction. 3. Social Management Plan The TM shall implement all measures required to involve the community at large in the quality assurance and monitoring the implementation of the Investment Subproject. These measures include, inter alia, redressal of the grievances of people and management of any adverse social impact during construction, as the case may be; Corporation TM 213 Corporation TM 214 ANNEXURE 11: MODEL LOAN DISBURSEMENT FORMATS Annexure 11: Model Loan Disbursement Formats GOVERNMENT OF ANDHRA PRADESH ANDHRA PRADESH URBAN INFRASTRUCTURE FUND PRESENT: - SRI. CHANDAN MITRA, IFS. SECRETARY - APUIF Proceedings No. 030704/BPT/APDMP, Dated 31 January 2008 Sub: - APDMP- Release of 2nd installment of loan – Bapatla Municipality - Orders – issued. Read: - Sub loan / Sub grant Agreement No. APDMP /BPT/030704/1/2006, dt.27 June 2006. ORDER: 1. With the approval of MD, following is the table showing particulars of release of loan to Bapatla Municipality: Total sanctioned amount Loan(Rs.) Grant(Rs .) 1,50,51,02 35,81,48 2 8 2. Total releases made Being released now Loan(Rs.) Grant(Rs.) Loan(Rs.) 3891500 13,75,500 25,00,000 Grant(R s.) 0 Deductions (Rs.) Net release (Rs.) 75,255 75,255 as documentation fee (0.50%of total loan) and service fee (0.50% of total loan) 72,766 73,565 73,565 Interest on 38.915 L for th the quarters ended 30 th Jun 07, 30 Sep 07 and st 31 Dec 07. 21,29,594 The Commissioner of Bapatla Municipality is instructed to keep the amount now released in the Bank Account No. SB 237946 in Andhra Bank opened for APDMP. The amount should be utilized only for the purpose for which it is released and no part of it shall be diverted for any other purposes or invested in any form of FDs under any circumstance. Further, while incurring expenditure, the 215 procurement, contracting and other guidelines communicated should be complied with scrupulously. Monthly progress report indicating both physical and financial aspects should be sent to this office by 10 th of each succeeding month till the amount is exhausted and the works are completed in all respects. The commissioner is also requested to submit Utilization Certificate in the prescribed proforma on monthly basis or earlier, as the case may be, to the extent of expenditure incurred, along with copies of vouchers. Any deviation in this regard will result in the cancellation of loan /grant. Secretary - APUIF To The Commissioner, Bapatla Municipality. Copy to 1. C&DMA, Hyderabad. 2. Accounts section of APDMP. 216 GOVERNMENT OF ANDHRA PRADESH ANDHRA PRADESH URBAN INFRASTRUCTURE FUND From: To Sri Chandan Mitra, IFS, Secretary - APUIF. The Assistant General Manager, State Bank of Hyderabad, MCH Complex, Hyderabad. Lr.Roc.No. 030704/BPT/APDMP, dt: 31/01/2008. Sir, Sub: - APURMS Project – release of funds - request for transfer of funds by TT/Electronic Transfer – requested - Reg. Ref: Proceedings No.030704/BPT/APDMP, Dated 31 Jan 2008 of APUFIDC. Please arrange to transfer an amount of Rs.21,29,594/- (Rupees Twenty One Lakhs Twenty Nine Thousand Five Hundred and Ninety Four only) in favour of the Commissioner, Bapatla Municipality, Guntur District the details are furnished below. A Cheque bearing number 644460, dt.31.01.2008 is enclosed for effecting the above transfer. Name of the Account Holder Name of the Bank Name of the Branch Bank code Account No. Name of the Bank Manager Telephone No. of the Bank : Commissioner, Bapatla Municipality. : Andhra Bank : M.G.Road, Bapatla Branch. : 037 : Savings Account No.237946 : Sri S.Satyanarayana : 224037, 220199 2. It is also requested to communicate the confirmation for the above transaction for our records. Yours faithfully, Secretary - APUIF Copy to the Commissioner, Bapatla Municipality, Guntur District for information with a request to acknowledge the receipt of funds. 217 GOVERNMENT OF ANDHRA PRADESH ANDHRA PRADESH URBAN INFRASTRUCTURE FUND From: Sri Chandan Mitra IFS, Secretary - APUIF To The Commissioner, Bapatla Municipality. Lr.Roc.No.030704/BPT/APDMP, dt: 31/01/2008. Sir/Madam, Sub: - APURMS Project – Release of funds to the municipal Commissioner- Reg. Ref: - 1. Proceedings No.030704/BPT/APDMP, Dated 31 Jan 2008 of APUFIDC. 2. Lr.Roc.No. 030704/BPT/APDMP, dt: 31/01/2008 funds by TT / Electronic Transfer. I invite kind attention to the references cited, wherein an amount of Rs.25,00,000/- has been approved as 2nd installment of the loan component under APURMS Project to the Bapatla Municipality. In view of the above, vide reference second cited an amount of Rs.21,29,594/- has been transferred to, Andhra Bank, M.G.Road, Bapatla Branch , bank account No. 237946 by way of Telegraphic Transfer/Electronic Transfer to the Commissioner, Bapatla Municipality. While enclosing the references, request you to confirm if this amount has been deposited in your bank Account and acknowledge the receipt of the amount and send the report of utilization of funds directly to this office. These funds should be utilized only for the intended purpose. You are requested to furnish physical and financial progress report every month. Yours faithfully, Secretary - APUIF 218 ANNEXURE 12: GOVERNMENT ORDERS Annexure 12: Government Order GOVERNMENT OF ANDHRA PRADESH ABSTRACT Municipal Administration and Urban Development Department – Revival of World Bank assisted Andhra Pradesh Urban Reforms and Municipal Services Project (APURMSP) – Revised Implementation Arrangements – Orders – Issued. MUNICIPAL ADMINISTRATION & URBAN DEVELOPMENT (UBS) DEPARTMENT G.O.Ms.No. 288 1. 2. 3. 4. 5. 6. 7. Dated: 21.04.2009 Read the following: G.O.Rt.No.1119 MA&UD (UBS) Department dated 15.10.2004. G.O.Rt.No.1268 MA&UD (UBS) Department dated 19.11.2004. G.O.Ms.No 39 Finance (SMPC) Department dated 15.02.2005. G.O.Ms.No. 72 MA&UD (UBS) Department dated 18.02.2005. G.O.Ms.No. 61 Finance (SMPC) Department dated 14.03.2005. G.O.Ms.No. 317 Finance (SMPC) Department Dated 08.11.2006 G.O.Rt.No. 1240 MA&UD (UBS) Department dated 29.08.2008. ***** O R D E R: 1. Government have approved the Andhra Pradesh Urban Reforms and Municipal Services Project (APURMSP) with World Bank assistance for bringing about Urban Sector Reforms, improvement in civic infrastructure and Poverty reduction. 2. In the reference 4th read above Government issued orders constituting Andhra Pradesh Urban Infrastructure Fund (APUIF) to act as an asset management company (AMC) / fund manager and restructuring the Andhra Pradesh Urban Finance and Infrastructure Development Corporation Limited (APUFIDC) as the Principal Implementing Agency along with certain operational procedures for APURMSP . 3. In pursuance to the discussions with the World Bank as part of the revival and redesigning of APURMSP in 2008-09 (following repeal of the Urban Land Ceiling Act by the State Legislative Assembly in March, 2008), it emerged that audit of the APUFIDC relating to the last few years remains to be completed resulting in reservations on the designation of APUFIDC as the nodal Project Implementing Agency. This has necessitated certain consequential modifications as well as additional guidance in the implementation arrangements for the project. Based on the proposal of Commissioner and Director of Municipal Administration and detailed discussions with all the stakeholder organisations, Government sets out the following revised arrangements and associated guidance for project implementation: i. The Commissioner and Director, Municipal Administration is designated as Principal Implementing Agency and to that effect provisions of G.O.Ms.No. 72 stands amended. The Commissioner and Director, Municipal Administration assisted by the Municipal Strengthening Unit (MSU) shall co-ordinate Project preparation , implementation and monitoring including the actions required to mitigate the risks if required in the Governance 219 and Accountability Action Plan ( GAAP). The Commissioner and Director of Municipal Administration shall also manage the APURMSP Public Information Officer and Grievance Redressal and Dispute Resolution System to handle concerns of the Project affected people as well as disputes between the Urban Local Bodies and Contractors. The role of APUFIDC shall be advisory to APUIF. ii. For the infrastructure component of the Project, the Urban Local Bodies shall be designated as the implementing agency. The Municipal Strengthening Unit in the Office of the Commissioner and Director, Municipal Administration and Engineer-in-Chief, Public Health through their Engineers shall assist the Urban Local Bodies in preparation of Detailed Project Report, preparation and technical sanction of the sub-projects, recording and check measurement of works etc duly following the PHED Department Codes and Rules in practice. The MEPMA shall be responsible for co-ordination of the social development and pro-poor activities of the project by the Urban Local Bodies. iii. In order the effectively implement the APURMSP, Government hereby constitute the following Committees to appraise, approve and provide overall monitoring, coordination and guidance to the project: A. Project Appraisal Committee (PAC) The sub-projects Detailed Project Reports prepared under the Project by the implementing agencies concerned shall be scrutinized by the MSU under the Commissioner and Director of Municipal Administration and placed before the Project Appraisal Committee for appraisal from the perspective of environment, social development, financial and other perspectives as agreed under the World Bank project. The Committee shall meet as and when required or once in a month. Commissioner and Director of Municipal Admin.Chairman Secretary, APUIF Member Mission Director, IKP-Urban (MEPMA) Member Engineer-in-Chief, Public Health Deptt. Member Director of Town and Country Planning Member Project Director, MSU, APURMSP Member Convener B. Steering Committee: In supersession of the orders issued in G.O.Rt.No. 1240 Municipal Administration and Urban Development (UBS) Department dated 29.08.2008 the Steering Committee is reconstituted with the following members. Secretary to Government, MA&UD Chairman Department Commissioner and Director, Municipal Vice-Chairman Administration Special Secretary to Government / Member Additional Secretary to Government/ Joint Secretary to Government, MA & UD Department 220 Additional Secretary / Joint Secretary to Government, Finance Department Managing Director, APUFIDC Ltd Mission Director , MEPMA Engineer-in-Chief Public Health Director, Town and Country Planning Project , MSU, APURMSP Member Member Member Member Member Member-Convenor The Steering Committee shall approve the annual action plan including of sub-projects Detailed Project Reports (DPRs) appraised by the Project Appraisal Committee (PAC), approve the operational guidelines under the Project , accord approval to engage subject specialists on outsourcing basis including their remuneration , approve the operations manual, resolve issues of coordination among the different Heads of Departments who are implementing agencies or stakeholders in the project, review and monitor the implementation of the Project . The Committee shall meet once in two months or whenever deemed necessary for the implementation of the project. C. Empowered Committee. The Empowered Committee (EC) shall review and direct the APURMSP at the highest level , resolve inter departmental issues. The Committee shall meet once in 6 months or as and when required. The Empowered Committee will be chaired by the Chief Secretary, and the Secretary, Municipal Administration and Urban Development will be the member-convenor. The other members of the committee will include Principal Secretary (Finance), Principal Secretary (MAUD), Principal Secretary(Revenue), Principal Secretary,(Transport), Principal Secretary(EFST), Principal Secretary (Irrigation), Principal Secretary (IT), Principal Secretary (Rural Development), Commissioner and Director , Municipal Administration, Managing Director, APUFIDC / Secretary APUIF. Iv FINANCIAL MANAGEMENT AND FUND FLOW A. The Andhra Pradesh Urban Infrastructure Fund (APUIF) will act as the fiscal agent of Government of Andhra Pradesh (GoAP) as its fund manager. The funds under the urban infrastructure component of the project shall be transferred from the State budget to the PD account of Commissioner and Director of Municipal Administration and from there to the bank account of APUIF (authorized in the management agreement of APUIF in GO Ms. No. 72, MA & UD Department, dated 18-2-2005 under the listed powers of the fund manager), which will extend sub-loans and sub-grants to the Urban Local Bodies subject to GoAP’s treasury rules, procedures and limitations. The Project fund shall not be kept idle in the bank account of APUIF and C&DMA shall transfer the funds to APUIF only when APUIF is inturn ready to transfer them to respective ULBs immediately thereafter. The rules and procedures with regard to the operation of the bank account of APUIF shall be documented in the Operations Manual of the project. Further the funds relating to the other three components of the project, namely the state level policy development, capacity enhancement and project management components shall also be transferred from the State budget to the PD account of Commissioner and Director of Municipal Administration. The operations under the PD account of Commissioner and Director of Municipal Administration shall confirm to the existing financial rules and procedures of Government of Andhra Pradesh (GoAP) including the standing Government orders. B. The funds shall flow from the bank accounts of APUIF or the PD accounts of Commissioner and Director of Municipal Administration as above to the bank accounts of Urban Local Bodies and of 221 other implementing agencies including Municipal Strengthening Unit. Criteria for release of funds to the implementing agencies for various sub-projects will be detailed by the Commissioner and Director, Municipal Administration in the Operations Manual separately. C. APUIF which operates as a loan and investment company to the Urban Local Bodies while being governed by the Trust rules shall also adopt the best practices of Non Banking Finance Company (NBFC) in India. D. The Municipal Strengthening Unit / Commissioner and Director of Municipal Administration will consolidate the actual expenditure information for all project components into the Interim Unaudited Financial Reports (IUFR) and for seeking reimbursements. The Municipal Strengthening Unit will be responsible for all reporting requirements including those to the Bank. V. PROCUREMENT: The orders issued in the G.O.Rt.No.119 MA&UD (UBS) Department dated 15.10.2004 and G.O.Rt.No.1268 MA&UD (UBS) Department dated 19.11.2004 stand cancelled and the following procedure shall be adopted. A. The method of procurements of work, goods or services under APURMSP shall be in accordance with the guidelines for procurement agreed with the World Bank and as per the standard Model Bid Documents developed by the Government of India Task Force and agreed with the World Bank. APURMSP would participate in the e-Procurement pilot as per the Standard Bidding Documents. B. The Urban Local Bodies will process their procurements including contracting of sub-projects in Urban Infrastructure component of the project. For these subprojects, Municipal Strengthening Unit will assist Urban Local Bodies in all steps of procurements through its own procurement specialist, Public Health Engineering Department Engineers as well as consultants. The procurements in other components of the project would be processed by Municipal Strengthening Unit. C. The required technical assistance to the Project shall be engaged under relevant project components on outsourcing / contract basis as per procurement measures with the Terms of References and the details of remunerations, allowances etc documented in the Operations Manual with prior approval from Finance (SMPC) Department. Vi. A. AUDIT AND ACCOUNTING ARRANGEMENT The statement of receipts, payments and vouchers of a month from the first date of the month to the last shall be sent by the Urban Local Bodies and Implementing Agencies to APUIF and Municipal Strengthening Unit by 15 th of next month. The copy of the consolidated and final incorporated monthly accounts of APUIF shall be reconciled with Municipal Strengthening Unit by 28th of the next month. An on-line Financial Management Information System (FMIS) package shall be developed for regular statements of monthly accounting. B. The Municipal Strengthening Unit upon receipt of accounts from APUIF shall monitor the physical and financial progress of the project as per the action plan and recommend necessary corrective measures to the Implementing Agencies and Urban Local Bodies. The Municipal Strengthening Unit shall recommend the next quarterly financial releases to the Urban Local Bodies based upon the progress of works and expenditure in the previous quarter as per the action plan. 222 C. Vii The internal (concurrent) audit of all the participating Urban Local Bodies will be conducted by CDMA / MSU at least once a year through Chartered Accountants (CAs) and include verification of actual expenditures against the loans and advances to the subprojects. These actual expenditures will be reflected in the IUFRs and will form the basis for disbursement of sub-loans and grants. An external audit of the project shall also include the audit of the participating Urban Local Bodies by Andhra Pradesh State Audit Department and of the State level implementing agencies including PD account of the Commissioner and Director, Municipal Administration by the Accountant General, Andhra Pradesh as per the generic Terms of References as agreed with the World Bank. All the final and intermediate reports of audits, i.e., monthly internal pre-audit of accounts and external audits shall be received by Municipal Strengthening Unit for monitoring, evaluation and reporting in a consolidated manner to the World Bank latest by 30 th September of the close of Financial Accounts. ENVIRONMENTAL AND SOCIAL SAFEGUARDS Adequate environmental and social safeguards in the project preparation, procurement and actual execution process shall be ensured by the Urban Local Bodies. It shall be monitored by the Municipal Strengthening Unit as per the environment and social documentation included in Social and Environmental Assessment and Management Framework (SEAMF) and Social Management Plans for sub-projects of Urban Local Bodies. Viii REPORTING ARRANGEMENT: The Urban Local Bodies shall submit quarterly financial management report (FMR) in the prescribed form duly reflecting the physical and financial progress under approved sub-projects to the APUIF and Commissioner and Director, Municipal Administration. Similarly they shall also submit annual financial statement within three months of the close of the financial year which shall be subject to audit by the statutory audit of APUIF. The APUIF shall consolidate and forward the report to Municipal Strengthening Unit. The Municipal Strengthening Unit shall prepare a consolidated progress report duly taking the reports from other implementing agencies like MEPMA, ENC, CDMA and submit report to the Government and the World Bank within one month from the close of the Financial Year. 4. The Commissioner and Director, Municipal Administration, Hyderabad (PIA) shall immediately finalize the Detailed Operations Manual for Reporting Arrangement, Audit and Accounting, Procurement and Environmental and Social Safeguards, access criteria for APURMSP, Initial Project Proposal from Urban Local Bodies, detailed Project Report, Memorandum of Agreement between the APUIF and Urban Local Bodies and Municipal Strengthening Unit and Urban Local Bodies , outputs and compliance report in the Project Appraisal Committee and submit to Steering Committee for approval. 5. This order issues with the concurrence of the Finance (IF) Department vide their C. No. 209/Fin.PMU/09, dated 18.04.2009. (BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH) PUSHPA SUBRAHMANYAM SECRETARY TO GOVERNMENT & COMMISSIONER, UPA 223 To The Commissioner and Director of Municipal Administration, Hyd. All Urban Local Bodies. The Principal Secretary to Government, Finance Department. The Principal Secretary to Government, Planning Department. The Principal Secretary to Government, Housing Department. The Principal Secretary to Government, Irrigation Department. The Principal Secretary to Government, Rural Development Department. The Principal Secretary to Government, IT Department. The Secretary to Government, MA & UD Department. The Managing Director, APUFIDC Limited, Hyderabad. The Engineer-in-Chief (Public health), Hyderabad. The director of town and Country Planning, Hyderabad The Project Director, MSU, APURMS Project, Hyderabad. Copy to: The P.S. to Chief Secretary to Government. The Finance (Expr.M&F) Department. The Finance (BG) Department. The Public Enterprises Department. The P.S. to Hon’ble M(MA). The P.S. to Principal Secretary to Government, MA & UD Dept. The P.S. to Secretary to Government, MA & UD Dept. The P.A. to Special Secretary to Government, MA & UD Dept. SF/SC //FORWARDED BY ORDER// ASSISTANT DIRECTOR 224 GOVERNMENT OF ANDHRA PRADESH ABSTRACT Municipal Administration and Urban Development Department – Andhra Pradesh Urban Reform and Municipal Services (APURMS) Project proposed under World Bank assistance – Constitution of Andhra Pradesh Urban Infrastructure Fund, as a Trust under the Indian Trusts Act 1882 – Restructuring of Andhra Pradesh Urban Finance & Infrastructure Development Corporation Ltd., (APUFIDC) as the Fund Manager – Orders – Issued. MUNICIPAL ADMINISTRATION & URBAN DEVELOPMENT (UBS) DEPARTMENT G.O. Ms. No. 72, MA Dated: 18-02-2005 Read the following 1. G.O. Ms. No.386, MA & UD (E) Department, dated 17.7.1992. 2. From Commissioner and Director of Municipal Administration D.O. Roc. No.21034 / 04 / N3, Dated 30.11.2004. <>0<> ORDER: Municipal Administration and Urban Development Department (MA&UD) of the Government is in the process of preparing a project for Urban Sector Reforms and Poverty Reduction, which is proposed to be taken up with external assistance. As part of project preparation, a Study on the Design of Business Plan and Operating Procedures of Andhra Pradesh Urban Finance and Infrastructure Development Corporation Ltd., (APUFIDC) was conducted by the autonomous institution viz., Centre for Good Governance, Hyderabad. Government have perused the Report and noted the importance of strengthening the institutional framework for financing urban infrastructure projects which has been identified as one of the key components of the reform agenda. 2. The project development objective is to support the State and Local level urban reforms to improve city management and upgrade and expand municipal services with particular focus on reducing urban poverty. The project proposal has the following components, viz., (a) Legal and Institutional Reforms at State and Urban Local Bodies Levels; (b) Municipal Capacity Enhancement; (c) Urban Infrastructure Investment; and (d) Project Management. 3. The Constitution (74th Amendment) Act, 1992 mandates an institutional framework, in which the Urban Local Bodies (ULBs) are to function as effective democratic institutions to local selfgovernment, preparing and implementing plans for economic development and social justice. The Government's emphasis on improving the system of urban development financing is consistent with its objective of improving service delivery, augmenting resources to meet the infrastructure requirement and sustaining the developmental efforts over a longer period. 4. Since the development of urban infrastructure is the thrust area for achieving the overall economic growth of the State, Government have been in the process of identifying resources for such huge investments. The ability to access a package of credit from the World Bank would accelerate the development and implementation of urban infrastructure projects at the local bodies 225 level. Proposals have been sent to the World Bank, seeking financial assistance for the infrastructure projects in the State. 5. In this connection, in the reference 2 nd read above, in line with the recommendations of the Centre for Good Governance, Hyderabad, the Commissioner and Director of Municipal Administration, Hyderabad, has submitted proposals for establishment of AP Urban Infrastructure Fund (APUIF) as a Trust under the Indian Trust Act, 1882, and Restructuring of APUFIDC as an Asset Management Company (AMC)/Fund Manager. 6. Government after careful examination approve the formation of the new Financial Intermediary as a Trust i.e. the ANDHRA PRADESH URBAN INFRASTRUCTURE FUND (APUIF) and the Restructuring of Andhra Pradesh Urban Finance Infrastructure Development Corporation Ltd., (APUFIDC) as an Asset Management Company (AMC) / Fund Manager with the following covenants: I. Structure A. Institutional Framework The new institutional arrangement shall be a two-tier organizational structure viz., a TRUST that should hold the fund and an Asset Management Company as the FUND MANAGER of the Trust. (i) The Trust shall be settled in terms of the provisions of the Indian Trusts Act 1882 under the name and style of 'ANDHRA PRADESH URBAN INFRASTRUCTURE FUND' (APUIF) and the Trust shall be registered and function as a registered Trust. (ii) APUIF Trust Fund shall comprise the following components: a) b) c) d) e) Revolving Fund; Debt Service Reserve Fund; Loan Fund; Grant fund inclusive of Project Development Facility; Scheme Fund. (iii) A Debt-Service Fund shall be created under Commissioner and Director of Municipal Administration, Hyderabad. (iv) The Project Development Facility, under the APUIF shall provide grants for various components viz., Institutional development, Project Development and Advisory services. (v) APUIF shall facilitate the sustained development of urban infrastructure in the State by enabling urban local bodies and other local entities to have access to capital, by supporting urban sector reforms to make them creditworthy and eventually access the capital market on their own, and by facilitating public-private community initiative for building urban infrastructure. (vi) The main objectives of the Trust are as follows: 226 a) Fund urban infrastructure projects for improving the living standards of urban population, including the urban poor through a revolving fund. b) Assist urban local bodies and other agencies providing urban infrastructure in accessing the capital market, individually or jointly through pooled finance arrangements. c) Operate a complementary window, to assist urban local bodies and other agencies by way of grants, on issues relating to project design and management and in addressing the problems of the urban poor and the issues of environmental conservation. d) Facilitate private sector participation in infrastructure through joint ventures and through formats such as public-private-community partnerships. e) Capacity building, including financial management of urban local bodies to enable them to access debt finance from the market. (vii) Government appoint the following officials as the Board of Trustees for the APUIF (hereinafter referred to as the Trustee), who shall act as the Board of Management to administer the Fund. The Board of Trustees is appointed as the TRUSTEE for APUIF. Chief Secretary to Government of Andhra Pradesh Principal Secretary to Government, Finance Department Principal Secretary/Secretary to Government, MA & UD Department Principal Secretary to Government, Planning Department Principal Secretary to Government, Housing Department Commissioner and Director of Municipal Administration Managing Director, APUFIDC Chairman Trustee Trustee Trustee Trustee Trustee Secretary of Trust Principal Secretary to Government, Finance Department, is authorised to execute and sign the Trust Indenture on behalf of the Settlor and the Principal Secretary/Secretary, Municipal Administration and Urban Development Department, is authorised to execute and sign the Trust Indenture on behalf of the Board of Trustees. Annexure-1 provides the approved Trust Indenture. (viii) The Board of Trustees shall decide on the funding, lending and operating policies of APUlF. It shall also approve the business and financial plans proposed by the Fund Manager and supervise its implementation. It shall have overall supervision and control over the operation of the Fund Manager as per the Management Agreement. (Annexure-2) (ix) The initial settlement amount of the Trust shall be Rs.10,000/- (Rupees Ten thousand only) which shall be provided by the Government of Andhra Pradesh for establishing the Trust. Principal Secretary, Finance Department, is appointed as the Settlor of the Trust, on behalf of the Governor of Andhra Pradesh and is authorised to execute and sign the Trust Indenture on behalf of the Settlor. Principal Secretary/ Secretary, MA & UD Department is authorised to register, Andhra Pradesh Urban Infrastructure Fund (APUIF), as a Trust under the Indian Trusts Act, 1882. (x) Sanction is accorded for Rs 10,000/- (Rs. Ten thousand only) towards the settlement amount and for Rs 10,000/- (Rs. Ten thousand only) towards the registration charges and other expenses. (xi) An amount of Rs. 25 crores is sanctioned as the unit capital contribution to the Trust. Further contribution shall be brought in by the Government as and when needed and appropriate provision in the Budget shall be made. The units shall be allotted in favour of the Governor of Andhra Pradesh. 227 (xii) A Management Agreement shall be executed between APUIF and the Fund Manager. Annexure-2 provides the approved Management Agreement Document. Principal Secretary/Secretary to Government Municipal Administration and Urban Development is authorised to execute and sign the Management Agreement on behalf of the Board of Trustees of APUIF and the Managing Director/Head of the Fund Manager, on behalf of the Fund Manager. B. Restructuring of APUFIDC Ltd. (i) Andhra Pradesh Urban Finance and Infrastructure Development Corporation Ltd., (APUFIDC) has been incorporated on January 12, 1993, as a Government Company under Section 617 of the Companies Act, 1956. The Company is presently carrying on the agency function for channelising the funds under various schemes, being implemented by the urban local bodies. (ii) Andhra Pradesh Urban Finance and Infrastructure Development Corporation Ltd., is appointed as an Asset Management Company/Fund Manager for APUIF subject to approval of APUIF Board of Trustees. (iii) Andhra Pradesh Urban Finance & Infrastructure Development Corporation Ltd., shall be restructured as per the approved amendments to the Memorandum and Articles of Association of Andhra Pradesh Urban Finance & Infrastructure Development Corporation Ltd.,. (iv) The assets and liabilities of Andhra Pradesh Urban Finance & Infrastructure Development Corporation Ltd., shall be transferred to APUIF, after conducting appropriate due diligence with reference to valuation of assets, its quality and applying appropriate provisioning norms on the loan portfolio. Till such time the new financial intermediary viz., APUIF, becomes operational and the assets and liabilities are duly transferred, Andhra Pradesh Urban Finance & Infrastructure Development Corporation Ltd., shall continue to carry on the existing functions. (v) The Government appoint the following officials as the Board of Directors for the Andhra Pradesh Urban Finance & Infrastructure Development Corporation Ltd., (AMC): Principal Secretary to Government, Finance Department Principal Secretary/Secretary to Government, MA & UD Department Commissioner and Director of Municipal Administration Engineer-in-Chief (Public Health) Director, Town and Country Planning Representatives from Financial Institutions Managing Director, APUFIDC Chairman Director Director Director Director Director Managing Director (vi) Separate orders will be issued pertaining to the Staffing of Andhra Pradesh Urban Finance & Infrastructure Development Corporation including new Managing Director. II. Operational Procedures for Andhra Pradesh Urban Finance & Infrastructure Development Corporation Ltd., 228 i. APURMS Project Components shall have the following Components: a) Legal and Institutional Reform Component b) Municipal Capacity Enhancement Component, c) Urban Infrastructure Investment Component and d) Project Management Component. ii. Government also approve the Project Funds Access Criteria for ULBs as provided in Annexure-3. iii. Approval is also accorded for the Operational Procedures for APURMS Project as detailed in Annexure-4. Lending policy under the project will be issued separately. iv. III. Creation of Municipal Strengthening Unit under Commissioner and Director of Municipal Administration. i. ii. A Municipal Strengthening Unit (MSU) is constituted under the Commissioner and Director of Municipal Administration to coordinate reforms with all the Urban Local Bodies and concerned Government and Non-Government Agencies/Institutions. Separate orders will be issued for the Staffing of Municipal Strengthening Unit including appointment of a Project Director. 7. Secretary, Municipal Administration and Urban Development Department is authorised to undertake all actions incidental to the formation and registration of the Trust, Board of Trustees, Restructuring of Andhra Pradesh Urban Finance & Infrastructure Development Corporation Ltd., setting up a Municipal Strengthening Unit under Commissioner and Director of Municipal Administration and operationalising the Andhra Pradesh Urban Reform and Municipal Services Project. 8. This order issues with the concurrence of the Finance Department vide their C.No.493/PFS/2005, dated 14.2.2005. (BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH) VEENA ISH SECRETARY TO GOVERNMENT To The Commissioner and Director of Municipal Administration, Hyderabad. The Principal Secretary to Government, Finance Department. The Principal Secretary to Government, Planning Department. The Principal Secretary to Government, Housing Department. The Secretary to Government, MA & UD Department. The Managing Director, APUFIDC, Hyderabad. The Engineer-in-Chief (Public Health), Hyderabad. The Director of Town and Country Planning, Hyderabad. Copy to: The P.S. to Chief Secretary to Government. The Finance (Expr.M&F) Department. The Finance (BG) Department. The Public Enterprises Department. The P.S. to Hon’ble M(MA). The P.S. to Secretary to Government(S), MA & UD Department. 229 The P.S. to Secretary to Government(V), MA & UD Department. SF/SC //FORWARDED BY ORDER// ASSISTANT DIRECTOR ANNEXURE-1 (G.O.Ms.No.72, MA & UD (UBS) Department, dated 18.02.2005) ANDHRA PRADESH URBAN INFRASTRUCTURE FUND TRUST INDENTURE ARTICLE I ARTICLE II ARTICLE III ARTICLE IV ARTICLE V ARTICLE VI TABLE OF CONTENTS DEFINITIONS Section 1.1 Definitions Section 1.2 Interpretation and Construction NAME AND OBJECTIVES Section 2.1 Name of the Trust Section 2.2 Mission Statement Section 2.3 Objectives of the Trust APPOINTMENT AND DECLARATION Section 3.1 Appointment Section 3.2 Declaration THE TRUSTEE Section 4.1 Acceptance of the Trust Section 4.2 Responsibilities of the Trustee Section 4.3 Trustees’ Remuneration, Compensation and Indemnity Section 4.4 Trustee may rely on writings Section 4.5 Construction of ambiguous provisions Section 4.6 Term of office of the Trustee Section 4.7 Appointment of new Trustee Section 4.8 Discharge of Trustee Section 4.9 Merger of Trustee DUTIES OF THE TRUSTEE Section 5.1 Financing Section 5.2 Management Agreement Section 5.3 Due Diligence Section 5.4 Operations POWERS OF THE TRUSTEE Section 6.1 Description and Regulation Section 6.2 Restrictions and Release of Power Section 6.3 Delegation 230 2 ARTICLE VII RIGHTS OF THE TRUSTEE Section 7.1 Right to Advice Section 7.2 Charging Expenses Section 7.3 Protection against documents and certain acts ARTICLE VIII LIABILITY OF TRUSTEE Section 8.1 Acts done in good faith Section 8.2 Investment of Trust Fund Section 8.3 Negligence ACCOUNTS AND AUDIT Section 9.1 Accounts Section 9.2 Furnishing periodical statements Section 9.3 Audit Section 9.4 Appointment of Auditors, Remuneration, etc. TRUST FUND Section 10.1 Contributions Section 10.2 Additional Contribution Section 10.3 Borrowings Section 10.4 Apportioning Capital and Income Section 10.5 Distribution of Trust Fund STATUS OF THE TRUST Section 11.1 Tenor of the Trust Section 11.2 Extinction of the Trust Section 11.3 Revocability Section 11.4 Official Seal AMENDMENTS AND SUPPLEMENTS Section 12.1 With the written consent of the Settlor Section 12.2 Amendments by the Trustee SCHEDULES Section 13.1 Counterparts Section 13.2 Schedule MISCELLANEOUS PROVISIONS Section 14.1 Preliminary expenses Section 14.2 Overriding exceptions Section 14.3 Article ineffective or void Section 14.4 Overriding effect on provisions Section 14.5 No rights conferred on others Section 14.6 Invalid provisions disregarded Section 14.7 Notices to parties Section 14.8 Successors and Assigns Section 14.9 Headings for convenience Section 14.10 Applicable Law ARTICLE IX ARTICLE X ARTICLE XI ARTICLE XII ARTICLE XIII ARTICLE XIV 231 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND TRUST INDENTURE THIS TRUST INDENTURE EXECUTED AT HYDRABAD ON THIS____DAY OF __________TWO THOUSAND AND FIVE (Pursuant to G.O. No.72, of Municipal Administration and Urban Development (UBS) Department dated 18.02.2005) BY THE GOVERNOR OF ANDRA PRADESH, represented by the Principal Secretary to Government of Andhra Pradesh, Finance Department, having its administrative headquarters at the A.P. Secretariat,Hyderabad-500 022, hereinafter called “the SETTLOR”, OF THE ONE PART IN FAVOUR OF The following TRUSTEES of the other part, represented by the Principal Secretary/Secretary to Government of Andhra Pradesh, Municipal Administration and Urban Development Department which expression unless repugnant to or inconsistent with the context, mean and include its successor or occupying the post by designation Chief Secretary to Government of Andhra Pradesh Chairman Principal Secretary to Government, Finance Department Trustee Prl. Secretary / Secretary to Government, MA & UD Department Trustee Principal Secretary to Government, Planning Department Trustee Principal Secretary to Government, Housing Department Trustee Commissioner and Director of Municipal Administration Trustee Managing Director, APUFIDC Secretary of Trust The above Trustees shall be collectively called the Board of Trustees who would act as the Board of Management to administer the Fund (APUIF) WITNESSETH 1. WHEREAS the basic civic services in the urban areas are provided by the local bodies. The obligatory functions of the local bodies include provision of water supply, roads, drainage, Solid Waste Management, Street Light, Sewerage, Sewage disposal, health services etc. In order to bridge the widening gap between demand and supply for the civic services, large amount of investments on providing infrastructure are required. The local bodies are under considerable strain to maintain and augment the existing infrastructure level and they look forward to assistance from various sources. 232 2.WHEREAS, with the object of fulfilling the above said requirements, the SETTLOR for the purpose of financing infrastructure projects in the State of Andhra Pradesh undertaken by Urban Local Bodies, Statutory Bodies, Public Sector Undertakings and Private Investors has noted the need for providing cost effective finance for urban infrastructure, through direct loans, grants, equity and also provide for raising resources on a pooled basis, also provide new credit enhancements for achieving the objective of low cost finance for the urban sector. 3.WHEREAS the SETTLOR for this purpose has decided to set up a trust to serve the public purpose and as an entity not for private profit and for playing an important roll for common good. This trust shall be named as ANDHRA PREDESH URBAN INFRASTRUCTURE FUND 4 WHEREAS the SETTLOR being desirous of establishing the WSPF has placed under the control of the TRUSTEE the sum of Rs.10,000/- (Rupees ten thousand only), which sum is hereinafter referred to as the “INITIAL SETTLEMENT”. 5. WHEREAS the SETTLOR being the only contributor to the Trust, this Trust will be fully owned by the Government of Andhra Pradesh 6. WHEREAS the trust is established as a public trust under the Indian Trusts Act 1882 as an infrastructure development financial intermediary. 7. WHEREAS the GoAP has accorded approval for setting up the Trust under the Indian Trusts Act 1882 vide G.O.Ms.No. 72, dated: 18.2.2005 of Municipal Administration and Urban Development (UBS) Department. NOW THIS TRUST INDENTURE FURTHER WITNESSETH AS FOLLOWS: ARTICLE – I DEFINITIONS Section 1.1 Definitions: - In this Indenture (except as otherwise expressly provided for or unless the context otherwise requires) the terms used as defined terms in the recitals hereto shall have the same meanings throughout this Indenture and in addition the following terms shall have the meanings specified below. a. “Accrual Period” means a financial year beginning April 1 and ending March 31 of the following year or part period thereof ending on March 31. b. Asset Management Company: means any company or body or undertaking, appointed to manage the funds/assets of the Trust. c. “Auditors” means any independent auditor(s) viz. one or more firms of Chartered Accountant(s) appointed by the TRUSTEE from time to time. 233 d. “Beneficiaries/ Contributors ” means the Government of Andhra Pradesh and or any of the public sector undertakings, Government Agencies, authorised in this behalf by the Government of Andhra Pradesh. e. “Contribution” means any property paid or transferred or agreed to be paid or transferred to the Trust by the Contributors. f. “Contribution Fund” means (i) Contributions and (ii) any net income or surplus derived by the Trust pursuant to the provisions hereof. g. “Fund Manager” means the legal entity appointed by the Management Agreement for managing the Trust Fund. h. “ GoAP” means the Government of Andhra Pradesh. The Governor of Andhra Pradesh, is represented by the Secretary, Municipal Administration and Urban Development Department, having its administrative headquarters for the time being at the A.P. Secretariat, Hyderabad-500 022 and its successors. i. “Indenture” means this Indenture of Trust. This also means the Deed of Trust. j. “Infrastructure Projects” means and includes all infrastructure projects viz., utility infrastructure, economic and commercial infrastructure, social infrastructure, area development infrastructure, etc. a. b. c. d. e. f. g. h. i. j. k. l. m. Water supply Solid Waste Management (including waste recycling) Sanitation Storm Water Drains Roads Bridges (including Road Over Bridges, Road Under Bridges, causeways, pedestrian cross bridges etc) Street Lighting Drainage Sewerage Sewage Disposal Health Services Transportation Systems (Including LRTS and MRTS) Bus / Truck Terminals 234 n. Parking Lots o. Sites and Services p. Markets, Shopping Complexes, Industrial Parks, Trade Centres, Technology Parks, Tourism Infrastructure etc.) q. Parks , Play Grounds and Stadia r. Health, Educational and Recreational amenities s. Area Development (including new townships, growth centers,etc) t. Urban Forestry and protection of environment u. Slum improvement and upgradation v. Burial grounds Cremation Ghats/Grounds and Electric Crematoria w. other remunerative and non-remunerative urban infrastructure projects aimed at public utility. The Trust has its core objective of planning ,development and improvement of ULBs. k. “Investments” means monies lent / to be lent by the TRUST for Infrastructure Projects and includes monies placed by the Trust in instruments such as Government Promissory Notes or other Government Securities, stock or shares in any banking company or other Central or State public company, or stocks, funds, shares, debenture, debenture stock, commercial papers, financial papers, short term or long term corporate deposits, securitised debt, mortgage, bonds, obligations and securities of any description whatsoever. l. “Lender” means any person /s who has given monies to the Trust, by way of loan. m. “Loan” means the monies lent to the Trust and includes debentures/bonds/any other financial instruments . n. “Management Agreement/s” means the Management Agreement/s between the Asset Management Company /Funds Manager and the TRUSTEE o. “Net Income” means in relation to any Accrual Period, the Net Income earned by the Trust as shown in its audited statements of account for that Accrual Period, net off all costs, taxes and expenses, Fund Manager’s fees, remuneration and interest on the borrowals by the Trust. p. “Projects” means the infrastructure projects mentioned in (j) above q. “Property” means money and includes both initial as well as additional property hereto comprising of real, personal movable or immovable property of any description and wheresoever situate and in relation to rights and interests includes those rights and interests whether vested, contingent, or future. 235 r. “Rating Agency” means any recoganised credit rating agency maintaining a credit rating on the bonds or any other financial debt instruments s. “State” means the Government of Andhra Pradesh or the jurisdiction thereof. t. “the Regulations” means the Regulations as set out in the Schedule hereunder. u. “the Trust” means the Trust created by the Settlor v. “the Trust Fund” means and includes the aggregate of a) b) c) d) e) f) the Initial Settlement the Contribution Investments Loans Receivables and all other properties of the Trust. w. “the Trust Period” means the period from the date hereof until such date till it is reverted by the Settlor. x.“ Unit” means one unit of the nominal value of Rs.1,00,000/- (Rupees one lakh only) evidencing beneficial interest in the Trust Fund and includes a “Fraction Certificate” evidencing beneficial interest in the Trust Fund of the value stated therein but less than Rs.1,00,000/- (Rupees One lakh only). y.“APUIF Representative “ means the Chief Executive , Secretary or any other officer of APUIF or other person designated by certified resolution of the governing body of APUIF to act for any of the forgoing either generally or with respect to the execution of any particular document or other specified maters, a copy of which shall be on file with the Trustee Section 1.2 : Interpretation and Construction: f. The Words : ”hereof “, “herein”, “hereto”, “hereby” and “hereunder” refer to the entire Indenture. g. Every “request”, “requisiton”,”order”,”demand” ,”application”,”direction”, “notice”,”statement”, “certificate”,”consent”, or similar action hereunder shall, unless the form there of is specifically provided be in writing and shall be signed by a APUIF representative in the case of APUIF and by the authorised officer in the case of one of the borrowers. 236 h. All words and terms importing the singular number shall where the context requires import the plural number and vize versa d. Words importing the masculine gender shall include female and neutral gender e. The headings and sub-headings to this Indenture are inserted only for reference to the provisions hereof and shall not affect the construction of such provisions. ARTICLE - II NAME AND OBJECTS OF THE TRUST Section 2.1: Name The name of this Trust shall be ANDHRA PRADESH URBAN INFRASTRUCTURE FUND Section 2.2: Mission Statement APUIF would facilitate the sustained development of urban infrastructure in the State by enabling urban local bodies and other local entities to have access to low cost capita, by supporting urban sector reforms to make them creditworthy and eventually access the capital market on their own, and by facilitating public-private community initiative for building urban infrastructure. Section 2.3: Objects:The objects of the Trust are:The main objectives of the Trust will be as under apart from the objectives mentioned in the draft Trust Deed. a) Fund urban infrastructure projects, which improve the living standards of urban population, including the urban poor. b) Assist urban local bodies and other agencies providing urban infrastructure in accessing the capital market, individually or jointly through pooled finance arrangements. c) Operate a complementary window, to assist urban local bodies and other agencies by way of grants, in addressing the problems of the urban poor and the issues of environmental conservation. d) Facilitate private sector participation in infrastructure through joint ventures and through formats such as public-private-community partnerships. e) Capacity building, including financial management of urban local bodies to enable them to access debt finance from the market. In tune with the above, the objects in detail are as under: (i) To establish a financing structure. Which enables low cost urban projects in the Sate of Tamil Nadu. To mobilise resources for the infrastructure projects under pooled finance structure; to borrow, or raise monies or loans or receive grants or accept contributions in such manner and on such terms, conditions and securities as the Trustee in their discretion deem fit from time to time. 237 (ii) To provide financial assistance to Urban Local Bodies, Statutory Boards, Public Sector Undertakings for setting up infrastructure projects in the State of Tamil Nadu. The Trust may also provide sub-loans or take equity position in the infrastructure projects sponsored by Private Investors when the Infrastructure Projects are considered strategically important. The ultimate goal of the Trust is to mobilize and chanalise cost effective resources including private financing into urban infrastructure investment, contributing to the improved living standards of urban population. The Trust will only invest in Infrastructure Projects that at the time of the investment comply with all relevant State and Central Government legislation regarding environmental and social protection. (iii) to provide financial assistance in any manner for: (a). strengthening and upgradation of Urban Local Bodies’ financial, technical, managerial and service capabilities, training, and computerisation of municipal accounts and basic records e.g. birth and death register; (b) meeting of cost of Resettlement and Rehabilitation related to sub-project to be financed by the Trust; (c) financing projects which directly benefit urban low income populations such as water supply, sanitation, storm water drain, street lighting, sewerage systems etc. and (d) meeting cost of project report preparation for the projects to be financed by the Trust. (iv) To enable market access for ULBs, Statutory Board, Public Sector Undertakings, for setting up Infrastructure Projects in the State of Tamil Nadu with a cost effective finance, including pooled financing. (v) To guarantee the performance of any contract or obligations and the payment on any bond issue or mobilisation of resources under the resource raising structure. (vi) To subscribe for, underwrite, acquire, hold and dispose of shares, stocks, debentures, debenture stocks, bonds, mortgages, obligations, securities of any kind issued or guaranteed by any Company (body corporate or undertaking) of whatever nature and industry, Government, trust, Municipal, Local Authority or body of whatever nature. (vii) to encourage to facilitate, participate, in any manner and to contribute, fund partially or fully the infrastructure projects involving public private partnership and Build – Own- Operate - Transfer and similar other types of infrastructure projects. (viii) To invest any money of the Trust, in any investments as may be thought proper and as may be necessary. The income from such investments shall be utilised to fulfill the objectives of the Trust. (ix) To act as nodal or any other agencies on behalf of the Central and or the State Governments for water, sanitation and or any other infrastructure projects 238 (x) To do all other things necessary and conducive to the attainment of all these objects. (xi) To make grants from time to time to Urban Local Bodies either directly or through any of the Grant Funds fully owned by GoAP out of the Trust funds for meeting the objectives of those specified Grant Fund guidelines. ARTICLE - III APPOINTMENT AND DECLARATION Section 3.1: APPOINTMENT The SETTLOR hereby appoints the TRUSTEE as the Trustee of the Trust, which is hereby created, and the TRUSTEE accept such appointment on the terms and conditions mentioned herein. Section 3.2: DECLARATION The TRUSTEE shall stand possessed of the Trust Fund upon which and subject to the powers and provisions herein declared and contained concerning the same and the TRUSTEE shall have the power at any time or times during the Trust Period to accept any property whether of an onerous nature or not from any person or persons by the provisions of any other trust or otherwise to the intent that the same shall be held by or on behalf of the TRUSTEE as an accretion to the Trust Fund. ARTICLE - IV THE TRUSTEE Section 4.1: Acceptance of the Trust The Trustee accepts and agrees to execute the Trust hereby created. The Trustee shall not be required to any contribution to the Trust Fund Section 4.2: Responsibility of the Trustee The Trustee may exercise any of its trusts or powers and perform any duties required of it under this Indenture or under any of the loan agreements either directly or by through agents or attorneys and shall be entitled to the advice of counsel concerning all matters. The Trustee shall not be responsible for the default or misconduct of any such agent or attorney (excluding officers and employees of the Trustee) appointed by it with reasonable care. The Trustee shall be responsible for performing such duties and only such duties of the Trustee as are specifically provided in this Indenture and no implied duties or liabilities shall be read into this Indenture against the Trustee. The permissive rights of the Trustee to do things enumerated in this Indenture shall not be constructed as a duty. Provided that the Trustee shall have performed such duties as are specifically required of it in this Indenture, the Trustee shall not be liable for any action taken or omitted to be taken on the written advice of counsel selected by the Trustee with reasonable care. The Trustee shall not be answerable for the exercise of any discretionary power in good faith under this 239 Indenture, or for any error of judgement made in good faith by an officer of the Trustee in exercising such power, or for any discretionary action taken or omitted to be taken in good faith under this Indenture, excepting only its own misconduct or negligence. Section 4.3: Trustee’s remuneration, compensation and indemnity: The Trustee shall not be entitled to any remuneration. APUIF shall pay the Trustee reasonable compensation for its services hereunder, its reasonable expenses including its counsel fees and expenses, if any, throughout its tenure as shall be agreed upon by APUIF and the Trustee. Section 4.4: Trustee may rely on writings: The Trustee shall be protected and shall incur no liability in acting in good faith upon any requisition, resolution, notice, request, consent, certificate, statement, affidavit, or other document which it shall in good faith believe to be genuine and to have been passed or signed by the proper Board or persons or to have been prepared and furnished pursuant to any of the provisions of this Indenture and the Trustee shall be under no duty to make any investigation or inquiry as to any statement contained or matters referred to in any such instruments, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statement. Whenever in the administration of this Indenture, the Trustee deems it desirable that a matter be proved or established before it takes, suffers or omits any action, the Trustee may request and may rely upon an APUIF certificate or a certificate of any of the borrowers. No provision of this Indenture or the Loan Agreement shall require the trustee to expend or risk its own funds or otherwise inure any financial liability in the performance of its duties hereunder or under the loan agreement or in the exercise of any of its rights or powers. Section 4.5: Construction of Ambiguous Provisions: The Trustee may reasonably construe many of the provision of this Indenture insofar as the same may appear to be ambiguous or inconsistent with any other provisions hereof; and any construction f any such provisions thereof by the Trustee in good faith and on written advice of counsel. The Trustee shall give APUIF prompt notice of any intention to make such construction. Section 4.6: Term of office of the Trustee: The individual Trustee shall hold office till the official post is held or until the termination of the Trust or the discharge of the Trustee, whichever is earlier. The Individual trustee may resign , only with the prior approval of the GoAP. Section 4.7 - Appointment of new Trustee a. The Trustee may be removed and replaced by new Trustee by the Settlor. (Other than on official transfers of the posts held by them) b. Every new Trustee shall have the powers, authorities and discretions and shall in all respects act and be liable as if originally appointed as a Trustee under this Indenture. 240 Section 4.8 - Discharge of Trustee: The Trustee shall stand discharged from its office only on the orders of the Settlor. Section 4.9 – Merger of Trustee Any corporation or association into which the Trustee may be merged or with which it may consolidated, or any corporation or association resulting from any merger or consolidation to which the Trustee shall be a party, or any corporation or association to which the trustee shall sell or otherwise transfer all or substantially all of its corporate business, shall be the successor trustee under this Indenture, without the execution or filing of any paper or any further act on the part of the parties hereto, anything herein to the contrary notwithstanding; provided however that the trustee shall give APUIF at least 30 days prior written notice of the merger, consolidation, sale or other transfer and that at any time prior to such merger, consolidation, sale or other transfer APUIF may by written notice by the trustee, remove the trustee and appoint a successor. The above actions of the trustee shall be done with the prior approval of the Settler. ARTICLE - V DUTIES OF THE TRUSTEE Section 5.1 – Financing The Trustee shall provide financial assistance only in relation to Infrastructure Projects and also lay down policies relating to credit approval and investments, PROVIDED HOWEVER, if no Infrastructure Project has been identified for making investments and if the Trustee, deems it fit in the interest of the Beneficiaries, the Trustee may invest the Trust Fund, in such manner as the Trustee deems fit. Section 5.2 – Management Agreement The Trustee shall enter into the Management Agreement whereby the TRUSTEE shall delegate such of its powers, as it deems appropriate to the Fund Manager to enable the Fund Manager to manage the Trust Fund. Section 5.3 – Due diligence: The Trustee shall at all times exercise due diligence in carrying out its duties for protecting the interests of the Beneficiary. The Trustee shall ensure that all transactions entered into by the Fund Manager have been properly entered into in accordance with this Indenture of Trust. The Trustee shall supervise operations of the Fund Manager in relation to the Trust Fund. 241 Section 5.4 – Operations: The Trustee shall hold the Trust Fund in the name of the Trust and shall enable for opening and operating of bank accounts on behalf of the Trust, by the Fund Manager. ARTICLE - VI POWERS OF THE TRUSTEE Section 6.1 – Description: The Trustee shall have the power, discretion, rights and immunities set out in the Regulations given in the Schedule hereunder. Section 6.2 – Restriction and Release of Power: The Trustee shall have the power at any time or times by Indenture or Indentures; irrevocable or revocable during the Trust period to release or to any extent restrict the future exercise of any powers hereby or by Law conferred on it notwithstanding the fiduciary nature of any such powers. Section 6.3 – Delegation: The Trustee may, from time to time, delegate to any committee, or any other person any of its powers and duties under this Indenture, provided, however, the Trustee shall remain liable for any such delegate’s acts of omission or commission to the extent the Trustee themselves would have been liable for such acts. The Trustee may from time to time, authorise any of the Trustee to act on its behalf and sign documents. ARTICLE - VII RIGHTS OF THE TRUSTEE Section 7.1 – Right to Advice: The Trustee may, in the discharge of its duties, act upon any advice obtained from any bankers, accountants, brokers, lawyers or other consultants, professionals or experts acting as advisers to the Trustee. The Trustee shall not be bound to supervise the action of such advisers or verify the advice or information received from them and the Trustee shall not be liable for anything bonafide done or omitted to be done or suffered in reliance upon such advice or information nor be responsible for any loss occasioned by so acting nor for the consequences of any bonafide mistake, oversight or error of judgment on the part of such advisers. Section 7.2 – Charging of Expenses: The Trustee shall be entitled to charge the Trust Fund with the following expenses: 242 a. all expenses properly incurred in the operation or execution of the Trust and for the realisation, preservation or benefit of the investments and assets comprising the Trust Fund and for the protection of the interests of the Beneficiary. b. all expenses (including expenses incidental to execution and / or registration of any agreement or other Indentures) incurred by the Trustee for obtaining the Contributions and or Loans or any form of raising of resources. c. all expenses in connection with any legal proceedings by or against the Trust or concerning the affairs of the Trust including professional fees and costs of any legal adviser. d. all legal and statutory expenses incurred in the operation or execution of the Trust including all levies, duties and other charges paid / payable in connection with the issue of Units and the Unit Certificates; e. all expenses in connection with the holding of its meetings, and the fees of the Fund Manager. Section 7.3 – Protection against documents and certain acts: Any request or direction of APUIF mentioned herein shall be sufficiently evidenced by a certificate of a APUIF representative and any resolution shall be sufficiently evidenced by a resolution certified by a APUIF representative. a. The Trustee shall not be bound to make any investigation in to the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, direction, consent, order or other paper or document furnished to it by APUIF. The Trustee at its discretion may make further inquiry or investigation into such facts or matters as it may see fit , and if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled upon reasonable notice and during regular business hours, to examine the books and records of APUIF. b. Except as otherwise expressly provided herein, the Trustee shall not be required to give or furnish any notice, demand, report, reply, statement, advice or opinion to any person, and the trustee shall not incur any liability for its failure or refusal to give or furnish the same unless obligated or required to do so by express provisions hereof. c. In acting or omitting to act pursuant to any agreements, the Trustee shall be entitled to all of the rights and immunities accorded to it under this Indenture. d. The Trustee shall not be responsible for the use of any money disbursed by it to others in accordance with this Indenture. The Trustee shall have no responsibility to insure or to monitor the insuring of the project facilities. ARTICLE - VIII LIABILITY OF THE TRUSTEE Section 8.1 – Acts done in good faith: - 243 The Trustee shall not be liable on account of anything done in good faith, bonafide with due diligence. Section 8.2 - Investment of Trust Fund: The Trustee shall only be chargeable for such monies, stocks, funds and securities as the Trustee shall have actually received and shall not be liable or responsible for any banker, broker, custodian or other person in whose hands the same may be deposited or placed nor for the deficiency or insufficiency in the value of any investments of the Trust Fund nor otherwise for any involuntary loss. Section 8.3 – Negligence: The Trustee and every attorney or, agent appointed by the Trustee shall be entitled to be indemnified out of the Trust Fund in respect of all liabilities, losses and expenses incurred in execution of the Trust or any of the powers, authorities, and discretion’s vested in or delegated to them other than those arising out of gross negligence and / or willful misconduct, provided however, that, such indemnity shall not in any event exceed the total of the Contributions. ARTICLE – IX ACCOUNTS AND AUDIT Section 9.1 – Accounts: The Trustee shall maintain and / or cause to be maintained by the Fund Manager proper books of accounts, documents and records with respect to the Trust Fund to give a true and fair picture of the affairs of the Trust. Section 9.2 – Furnishing periodical financial statements: a. Unaudited financial statements of the Trust within 60 days of the conclusion of the Trust’s respective Accrual Period and b. Annual reports including audited financial statements of the Trust within 90 days of the conclusion of the Trust’s respective Accrual Period and c. Quarterly reports within 30 days of the end of each quarter providing narrative and unaudited summary financial information regarding the Trust’s operations. Section 9.3 – Audit: The accounts of the Trust shall be audited once a year by a qualified auditor. The audited annual accounts are required to be placed before the Trustee for adoption Section 9.4 – Appointment of Auditors, remuneration etc: - 244 The Trustee shall appoint an independent auditor viz., a firm of Chartered Accountants once a year for auditing the accounts of the trust for correctness and authenticity. This is notwithstanding that the Comptroller and Auditor General of India (C&AG) may also carry out a separate annual audit as per the relevant statutory provisions. a. The first auditors of the Trust shall be appointed by the Trustee, within one month from the date of execution of this Indenture. b. The auditors may be removed and replaced by the Trustee by giving them three months’ notice in writing. c. The remuneration of the auditors shall be fixed by the Trustee ARTICLE – X TRUST FUND Section 10.1 – Contributions: The Trust Fund consists of initial contribution made by the Settlor and the unit capital contribution made by the contributors to the Fund. Apart from this, any net income or surplus derived by the Trust will also form part of the contribution to the Fund, as reserves and surplus. Section 10.2 – Additional Contributions :The Trustee can accept additional unit contribution made by the Settlor and other contributors to the Fund. Section 10.3 – Borrowings :The Trust Fund shall also include all types of the borrowings viz., short term and long term and secured and unsecured. This also shall include market access by way of raising resources through bond/debenture issues. Section 10.4 – Apportioning between Income and Capital :The Trustee shall have the power to make such reserves out of the income or capital as the Trustee deems proper for expenses, taxes and other liabilities of the Trust to pay from income or from capital or to apportion between income and capital any expenses of making or changing investments and of selling, exchanging including brokers commissions and charges and generally to determine what part of the expenses of the Trust shall be charged to capital and what part to income and to determine as between separate funds and separate parts or shares the allocation of income, gains, profits, losses and distributions and so that any decisions of the Trustee whether made in writing or implied from its acts shall so far as the law may permit be conclusive and binding on the Beneficiary. 245 Section 10.5 - Distribution of Trust Fund: The Trustee shall stand possessed of the Trust Fund and the net income thereof shall accrue upon the Trust for the benefit of the Beneficiary and the Trustee shall make distribution to the Beneficiary in their absolute discretion. Since the entire income accrue for the Beneficiary, GoAP, which is no income of the trust is taxable. ARTICLE – XI STATUS OF THE TRUST Section 11.1 – Tenor of the Trust: The period of the Trust shall commence from the date of this Indenture and it shall be a continuing Trust entity till such date it is reverted by the Settlor. Section 11.2 – Extinction of the Trust:The Trust is expected to be extinguished and liquidated its assets on the expiry of the Trust Period, as and when decided by the Settlor. Section 11.3 – Revocability: This Trust is revocable at the discretion of the Settlor. The Trust shall continues to exist till such time as me be decided by the GoAP. At the time of extinguishments of the trust, all the assets and liabilities of the Trust shall be transferred to GoAP. Section 11.4 – Official Seal: The Trustee may if it thinks fit provide a Seal for the purpose of the Trust and shall have power from time to time to destroy the same and substitute a new seal in lieu thereof, and the Trustee shall provide for the safe custody of the Seal for the time being and the Seal shall not be used except by the authority of the Trustee. The Seal shall be affixed to such documents and instrument as the Trustee may direct from time to time. ARTICLE – XII AMENDMENTS AND SUPPLIMENTS Section 12.1 – With the written consent of the Settlor: This Indenture may be amended or supplemented at any time and from time to time by a supplemental Indenture executed by the Trustee with the written consent of the Settlor broadly in respect of the following aspects: a. b. c. alter the objects of Trust, include any contributors and increase the Contributions, amend this Article 246 Section 12.2 – Amendment by the Trustee: In addition to any amendments otherwise authorised hereby, this Indenture may be amended from time to time by the Trustee as follows: a. b. c. d. e. f. to add to the representations, duties or obligations of the Fund Manager or surrender any rights or power granted to the Fund Manager herein; to cure any ambiguity or correct or supplement any provisions hereof which may be inconsistent with any other provision hereof or correct any printing, stenographic or clerical errors or omissions; or to reflect any change in the amount of Contribution in accordance with the terms of this Indenture. to make such provision in regard to matters or questions arising under this Indenture as may be necessary or desirable and which shall not adversely affect the interest of both the parties. to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to comply with any applicable laws of the Government of India or the State. any other amendment, in the opinion of the Trustee is required for better operation of the Trust. ARTICLE – XIII SCHEDULES Section 13.1 – Counterparts: This Indenture may be executed in any number of counterparts, each of which when so executed and delivered shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 13.2 - Schedule: The Schedule hereto shall form an integral part of this Indenture. ARTICLE – XIV MISCELLANEOUS PROVISONS Section 14.1 – Preliminary Expenses: The Trustee shall have power to pay out of the Trust Fund all expenses of whatever nature incidental to the creation of this Trust. Section 14.2 – Overriding Exceptions: - 247 Notwithstanding anything herein contained no power or provision hereby or by law conferred upon the Trustee shall be exercised in such a way as to infringe any rule against perpetuities, which may become applicable hereto Section 14.3 – Article Ineffective or Void: If any Article/s or any part thereof is or are declared to be ineffective, inoperative or void, the same shall not affect the validity of this Indenture or the other part of such Article/s as the case may be. Section 14.4 – Overriding Effect: In case of any conflict between the provisions of this Indenture and the Schedule hereunder or any other Indenture or document, the provisions of this Indenture shall prevail. Section 14.5 – No rights conferred on others:Nothing herein contained shall confer any rights upon any person other than the parties hereto. Section 14.6 – Invalid provisions disregarded: In case any provision in this Indenture or the Bonds shall for any reason be held invalid, unlawful, or unenforceable in any respect, this Indenture shall be construed as if such provision had never been contained herein. Section 14.7 – Notices to parties: Notice hereunder shall be effective upon receipt and shall be given in writing ( or by telephone confirmed by a writing received ) by facsimile transmission, personal service or electronic media mail, etc to Settlor for Andhra Pradesh Urban Infrastructure Fund The Principal Secretary to the GoAP Finance Department, A.P Secretariat Hyderabad – 500 022 The Trustee: Principal Secretary/Secretary to Government, MA & UD Department, A.P Secretariat Hyderabad – 500 022 Section 14.8 – Successors and Assigns: - 248 All the covenants, promises and agreements in this Indenture contained by or on behalf of APUIF, or by or on behalf of the Trustee, shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not. Section 14.9 – Headings and Convenience: The descriptive headings in this Indenture are inserted for convenience only and shall not control or affect the meaning or construction of any of the provision hereof. Section 14.10 – Applicable Law: The Indenture shall be governed by and construed in accordance with the laws of the Government of India and of the State. THE SCHEDULE herein below referred to as “REGULATIONS” 1. GENERAL POWER: SUBJECT always to any restrictions expressly contained in this Indenture the Trustee shall in relation to the Trust Fund have all the same powers as a natural person acting as the beneficial owner of such property and such powers shall not be restricted by any principle of construction or rule or requirement of the Proper Law relating to this Trust save to the extent that such is obligatory but shall operate according to the widest generality of which the foregoing words are capable notwithstanding that certain powers are hereinafter more particularly set forth. 2. POWERS OF INVESTMENT:The Trust Fund shall be managed by the Fund Manager in accordance with the investment objectives, policies and restrictions set forth in the Management Agreement. And in the exercise of the powers herein contained the Trustee shall not be under any duty to see that the value of the Trust Fund or any part or parts thereof is enhanced in any way nor shall the TRUSTEE be liable for any failure in that respect whatsoever. 3. TRUSTEE NOT BOUND TO INTERFERE IN BUSINESS OF URBAN LOCAL BODIES, STATUTORY BOARDS OR PUBLIC SECTOR UNDERTAKINGS OR PRIVATE INVESTORS IN WHICH TRUST IS INTERESTED: a. The Trustee shall leave the administration, management and conduct of the business and affairs of such Urban Local Boards or Statutory Boards or Public Sector Undertakings or Private Investors to the directors, officers and other persons authorised to take part in the administration, management or conduct thereof and the Trustee shall not be under any duty to supervise such, officers or other persons so long as the Trustee does not have actual knowledge of any dishonesty relating to such business and affairs on the part of any of them. 249 Notwithstanding such restrictions, the Trustee may advice the Urban Local Bodies / Statutory Boards to restructure their financial / operating parameters to enable the Urban Local Bodies / Statutory Boards to become creditworthy in the long run and enable the Urban Local Bodies / Statutory Boards to raise resources at market rates. In case of default by the borrowers the Trustee shall have the powers to take appropriate action. b. The Trustee shall not be liable in any way whatsoever for any loss to such Urban Local Boards or Statutory Boards or Public Sector Undertakings or Private Investors or the Trust Fund or the income thereof arising from any act or omission of its own, officers or other persons taking part (whether or not authorised) in the administration, management and conduct of the business or affairs of such Urban Local Bodies, Statutory Boards, Public Sector Undertakings or Private Investors (whether or not any such act or omission by any such foregoing persons shall be dishonest fraudulent negligent or otherwise) c. Without prejudice to the generality of the foregoing the Trustee shall not be rendered responsible in any way whatsoever for any default or other act or omission by the directors, officers or other persons referred to herein hereof by any express notice or intimation of such default or other act or omission and the Trustee shall not be obliged or required to make and enforce any claim in respect of such a default or other act or omission and no person who is or may become entitled hereunder shall be entitled to compel the making of such a claim. 4. POWER TO EMPLOY AGENTS: The Trustee shall have power instead of acting personally to employ and pay at the expense of the Trust any agent in any jurisdiction whether attorneys, solicitors, brokers, banks, trust companies or other agents whether associated or connected in any way with the Trustee or not without being responsible for the default of any agent if employed in good faith to transact any business or do any act required to be transacted or done in the execution of the trusts hereof including the receipt and payment of moneys and the execution of documents. 5. POWER TO EMPLOY INVESTMENT ADVISOR OR MANAGER: Without prejudice to the generality of the foregoing the Trustee may, from time to time and at any time employ, on such terms and on such payment, any person firm or company in any jurisdiction, whether associated or connected in any way with the Trustee or not, as Fund Manager for the purpose of managing the investment of the Trust Fund. 6. NOMINEES AND CUSTODIANS: The Trustee may permit any property comprised in the Trust Fund to be and remain deposited with any person or persons in any jurisdiction and permit any such property to be held or invested in the name of any person or persons in any jurisdiction instead of in the name of the Trustee. 250 7. POWER TO PAY DUTIES AND LEVIES: In the event of any taxes, or other duties or fees (and any interest or penalty chargeable thereon) whatsoever becoming payable in any jurisdiction in respect of the Trust Fund or any part thereof in any circumstances whatsoever the Trustee shall have power to pay the same. 8. POWER TO TAKE COUNSEL’S OPINION: The Trustee shall have power to take the opinion of legal counsel in any jurisdiction concerning any difference arising or in any way relating to this Indenture or to Trustee’ duties in connection with the Trust and to the extent that the Trustee acts in accordance with the opinion of such counsel the Trustee shall not be liable for any loss to the Trust Fund which may arise by or from so acting. 9. POWER TO BORROW, Etc.: The Trustee may, for and on behalf of the Trust, in exercise of any of the powers hereby or by law given to it sell, lend or buy any property or borrow / raise monies, in any form, on such terms and conditions as the Trustee may consider expedient and secure and discharge any debt or obligation binding on the Trust in such manner as may be thought fit, and in particular by mortgages of the undertaking(s) and all or any of the immovable and moveable property (present and future) of the Trust or by the creation and issue, on such terms as may be thought expedient, of bonds, debentures or debenture stock, perpetual or otherwise, or other securities of any description or without security. 10. POWER TO EFFECT COMPROMISE: The Trustee shall have power to: a. accept any property before the time at which it is transferable or payable b. pay or allow any debt or claim on any evidence that it thinks fit c..accept any composition or any security movable or immoveable for any debt or other property d.allow time of payment of any debt e.compromise, compound, abandon, submit to arbitration or otherwise settle any debt, account, claim or thing whatsoever relating to the Trust Fund or this Trust without being liable for any loss to the Trust thereby occurring. 11. POWER TO INSURE PROPERTY: The Trustee shall have power to insure against any loss or damage from any peril, any money or property forming part of the Trust Fund for any amount and to pay the premiums out the Trust Fund. 251 IN WITNESS whereof the parties hereto have executed this Trust Indenture (in TWO Sets) on the day and year first hereinbefore mentioned: - Signed and Delivered on behalf of the Settlor (Name) Principal Secretary, to Government of Andhra Pradesh Finance Department, A.P Secretariat Hyderabad – 500 022 Witness: (Name and Address) Signed and Delivered on behalf of the TRUSTEE (Name) Principal Secretary/Secretary to Government of Andhra Pradesh Municipal Administration and Urban Development Department A.P Secretariat Hyderabad – 500 022 Witness: (Name and Address) 252 ANNEXURE-2 (G.O.Ms.No.72, MA & UD (UBS) Department, dated 18.02.2005) MANAGEMENT AGREEMENT BETWEEN ANDHRA PRADESH URBAN INFRASTRUCTURE FUND AND ANDHRA PRADESH URBAN FINANCE AND INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED 253 MANAGEMENT AGREEMENT THIS MANAGEMENT AGREEMENT EXECUTED AT HYDERABAD ON THIS______DAY OF _______ TWO THOUSAND FIVE BETWEEN ANDHRAPRADESH URBAN INFRASTRUCTURE FUND (APUIF), a trust formed under the Indian Trusts Act 1882, having its Administrative Head Quarters at A.P. Secretariat Hyderabad – 500 022, represented by the Principal Secretary to Government of Andhra Pradesh, Municipal Administration and Urban Development Department, on behalf of the Board of Trustees, hereinafter referred to as the TRUSTEE, which expression unless repugnant to or inconsistent with the context, mean and include its successors-in-interest of the ONE PART. AND ANDHRAPRADESH URBAN FINANCE AND INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED, a public limited company incorporated under the provisions of the Companies Act 1956, having its Registered Office at Hyderabad 500 022, herein after called the “FUND MANAGER”, which expression shall, unless repugnant to or inconsistent with the context, mean and include its successors-in-interest of the OTHER PART. WHEREAS 1. Government of Andhra Pradesh for the purpose of financing Infrastructure Projects in the State of Andhra Pradesh, undertaken by Urban Local Bodies / Statutory Boards / Public Sector Undertakings/ Private Investors has set up the “ANDHRA PRADESH URBAN INFRASTRUCTURE FUND” (“APUIF”), a Trust within the meaning of the Indian Trusts Act, 1882, duly constituted by the Trust Indenture dated ___________, 2005 registered as document No.___________in the Office of the Registrar, Hyderabad. 2. Government of Andhra Pradesh, the Settlor of APUIF, has constituted the Board of Trustees and appointed it as the TRUSTEE of the APUIF. 3. To ensure that the APUIF receives relevant professional and experienced investment advice and the expertise in project financing and fund management, the TRUSTEE has decided to appoint ANDHRA PRADESH URBAN FINANCE AND INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED (APUFIDC), as the FUND MANAGER to manage the Trust Fund and the FUND MANAGER has agreed to be so appointed. 4. The Government of Andhra Pradesh (GoAP) has accorded approval for setting up the Trust under the Indian Trusts Act 1882 Vide G.O Ms No.72, dated 18.2.2005 of MA&UD (UBS) Department. 254 5. The parties have decided to reduce the terms and conditions agreed upon into writing through these presents: - NOW THIS MANAGEMENT AGREEMENT WITNESSETH AS FOLLOWS:ARTICLE – I DEFINITIONS Section 1.1. DEFINITIONS: In this MANAGEMENT AGREEMENT wherever the context permits the following word/s: a. “Accrual Period” means a financial year beginning April 1 and ending March 31 of the following year or part period thereof ending on March 31. b. Asset Management Company means any company or body or undertaking, appointed to manage the funds/assets of the Trust. c. “Auditors” means any independent auditor(s) viz. one or more firms of Chartered Accountant(s) appointed by the TRUSTEE from time to time. d. “Board” Means the Board of Management of the Trust as constituted by GoAP. d. ”Consents” means all authorizations, consents, licences, permits, waivers, privileges, acknowledgements, agreements, concessions, approvals from and filings with or applications submitted to any Government Agency or any Person. e. “Contribution” means any Property paid or transferred or agreed to be paid or transferred to the Trust by the Contributors. f. “Contribution Fund” means (i) Contributions and (ii) any net income or surplus derived by the Trust pursuant to the provisions hereof. 255 g. “Directives” means any present or future policy, requirement, instruction, direction, order, regulation or rule of any government Agency which is legally binding or which would customarily be observed by a reasonable and prudent person, and any modification, extension or replacement thereof from time to time in force. h. “Government Agency” means the Government of India, the Government of Andhra Pradesh or any regional or municipal authority thereof, or other legislature, ministry, department, Commission, Board, Authority, instrumentality, agency, political sub-division, Corporation or Commission under the direct or indirect control of the Government of India or Government of Andhra Pradesh or any political sub-division of either of them, as to matters of policy or otherwise, owned or controlled by the Government of India or the Government of Andhra Pradesh or any of their sub-divisions. I.” Government Authorizations” means all laws, ordinances, statutes, rules, orders, decrees, injections, licences, permits, approvals, authorizations, consents, waivers, privileges, agreements and regulations of any government Agency, as may be applicable, including Consents and Directives as such are in effect as of the date hereof or as may be amended, modified, enacted or revoked from time to time hereafter. j. "GoAP" means the Government of Andhra Pradesh. The Governor of Andhra Pradesh is represented by the Secretary, Municipal Administration and Urban Development Department, having its administrative headquarters at the A.P.Secretariat, Hyderabad – 500 022 and its successors and assigns k,“ Indenture” means the Deed of Trust of Andhra Pradesh Urban Infra structure Fund. l. “Infrastructure Projects” also refers to as “Projects” and means all physical structures and systems with associated works in such sectors as a. Water supply x. y. z. aa. bb. Solid Waste Management (including waste recycling) Sanitation Storm Water Drains Roads Bridges (including Road Over Bridges, Road Under Bridges, causeways, pedestrian cross bridges etc) cc. Street Lighting dd. Drainage ee. Sewerage ff. Sewage Disposal 256 gg. Health Services hh. Transportation Systems (Including LRTS and MRTS) ii. Bus / Truck Terminals jj. Parking Lots kk. Sites and Services ll. Markets, Shopping Complexes, Industrial Parks, Trade Centres, Technology Parks, Tourism Infrastructure etc.) mm. Parks , Play Grounds and Stadia nn. Health, Educational and Recreational amenities oo. Area Development (including new townships, growth centers,etc) pp. Urban Forestry and protection of environment qq. Slum improvement and upgradation rr. Burial grounds Cremation Ghats/Grounds and Electric Crematoria ss. other remunerative and non-remunerative urban infrastructure projects aimed at public utility. The Trust has its core objective of planning, development and improvement of ULBs. m. Investments” means monies lent / to be lent by the TRUST for Infrastructure Projects and includes monies placed by the Trust in instruments such as Government Promissory Notes or other Government Securities, stock or shares in any banking company or other Central or State public company, or stocks, funds, shares, debenture, debenture stock, commercial papers, financial papers, short term or long term corporate deposits, securitised debt, mortgage, bonds, obligations and securities of any description whatsoever. n. “Lender” means any person/s who has given monies to the Trust, by way of loan. o. “Loan” means the monies lent to the Trust and includes debentures /bonds/any other financial instruments p .“Management Agreement/s” means this Agreement. (i.e. ) the Management Agreement between APUIF and APUFIDC. Management Fee Means fees, charges, and such other remuneration/compensation as may be mutually agreed between the TRUSTEE and the Fund Manager to be paid/payable to the Fund Manager q. “Net Income” means in relation to any Accrual Period, the Net Income earned by the Trust as shown in its audited statements of account for that Accrual Period, net off all costs, taxes and expenses, including the TRUSTEE’s fees, Fund Manager’s remuneration and interest on borrowings by the Trust. r. “Projects” 257 means the infrastructure projects mentioned in (l) above s. “Property” means money and includes both initial as well as additional property hereto comprising of real, personal, movable or immovable property of any description and wheresoever situate and in relation to rights and interests includes those rights and interests whether vested, contingent or future. t. Rating Agency” means any recognised credit rating agency maintaining a credit rating on the bonds or any other financial debt instruments v. “the Trustee” means the Board of Management of the Trust w. “the Trust” means the Andhra Pradesh Urban Infrastructure Fund, a trust within the meaning of the Indian Trusts Act, 1882 , duly constituted by the Trust Indenture dated _____________, 2005 registered as document No._____________in the Office of the Registrar Hyderabad. x. “the Trust Fund” means and includes the aggregate of a) b) c) d) e) f) the Initial Settlement the Contribution Investments Loans Receivables and all other properties of the Trust. y. “the Trust Period” means the period from the date of the constitution of the Trust viz.,APUIF, until such date till it is reverted by GoAP. z. “Unit” means one unit of the nominal value of Rs.1,00,000/- (Rupees one lakh only) evidencing beneficial interest in the Trust Fund and includes a “Fraction Certificate” evidencing beneficial interest in the Trust Fund of the value stated therein but less than Rs.1,00,000/(Rupees one lakh only). aa. “APUIF Representative “ means the Chief Executive , Secretary or any other officer of APUIF or other person designated by certified resolution of the governing body of APUIF to act for any of the forgoing either generally or with respect to the execution of any particular document or other specified maters, a copy of which shall be on file with the Trustee. 258 ab. “APUIFDC Representative” means the Managing Director, Chief Executive , Secretary or any other officer of APUFIDC or other person designated by certified resolution of the Board of APUFIDC to act for any of the forgoing either generally or with respect to the execution of any particular document or other specified maters, a copy of which shall be on file with the Fund Manager. Section 1.2: Interpretation and Construction: i. The Words: ”hereof “, “herein”, “hereto”, “hereby” and “hereunder” refer to the entire Indenture. j. Every “request”, “requisiton”,”order”,”demand”,”application”,”direction”, “notice”,” statement”, “certificate”,” consent”, or similar action hereunder shall, unless the form there of is specifically provided be in writing and shall be signed by a APUIF representative in the case of APUIF and by a APUFIDC representative in the case of APUFIDC. k. All words and terms importing the singular number shall where the context requires import the plural number and vice versa. l. Words importing the masculine gender shall include female and neutral gender m. The headings and sub-headings to this Indenture are inserted only for reference to the provisions hereof and shall not affect the construction of such provisions. ARTICLE – II APPOINTMENT AND DECLARATION Section 2.1. Appointment of Fund Manager: The TRUSTEE hereby appoints the FUND MANAGER and the FUND MANAGER hereby accepts the appointment and agrees to provide and be responsible for day-to-day management and administrative services of the Trust in accordance with the provisions of this Agreement and any directions and instructions given by the TRUSTEE. Section 2.2. Declaration: The Fund Manager shall stand possessed of the Trust Fund upon which and subject to the powers and provisions herein declared and contained concerning the same and the Fund Manager shall have the power at any time or times during the period of this Agreement to accept any property whether of an onerous nature or not from any person or persons by the provisions of any other trust or otherwise to the intent that the same shall be held by or on behalf of the TRUST as an accretion to the Trust Fund. 259 ARTICLE – III POWERS OF THE FUND MANAGER Section 3.1. Powers of the Fund Manager The Powers of the FUND MANAGER shall be as provided for in the Schedule hereunder. ARTICLE – IV OBJECTIVES Section 4.1. Main Objectives: The main objectives of the Trust will be as under apart from the objectives mentioned in the Trust Indenture.. e) Fund urban infrastructure projects, which improve the living standards of urban population, including the urban poor. f) Assist urban local bodies and other agencies providing urban infrastructure in accessing the capital market, individually or jointly through pooled finance arrangements. g) Operate a complementary window, to assist urban local bodies and other agencies by way of grants, in addressing the problems of the urban poor and the issues of environmental conservation. h) Facilitate private sector participation in infrastructure through joint ventures and through formats such as public-private-community partnerships. Section 4.2 Objectives in Detail: i) The objectives in detail are as under: j) To establish viable and sustainable financing arrangements which enable creation, upgradation and maintenance of cost effective and quality civic infrastructure in the State. k) To mobilise resources for the infrastructure projects using various financing instruments and financial structures such as bonds/debentures, equity, pooled finance arrangements etc., l) to borrow, or raise monies or loans or receive grants or accept contributions in such manner and on such terms, conditions and securities as the Trustee in its discretion deem fit from time to time. m) To provide financial assistance in the form of loans, grants or a combination thereof to urban local bodies for taking up and implementation of infrastructure projects which create enduring community assets and improve living standards of the population in their areas. The Fund may also provide sub-loans or equity in the infrastructure projects sponsored by the Local Self Governments in association with non-Government agencies when the Infrastructure Projects are considered 260 n) o) p) q) r) s) t) u) strategically important provided that the Fund will only invest in Infrastructure Projects that at the time of the investment comply with all relevant State and Central Government legislation regarding environmental and social protection. To establish Grant Funds and provide grants from its own resources and to manage Grant Funds as the Government may constitute from time to time as per terms set forth for such grants so as to ensure continuous upgradation of standards of organisational, financial and technical capacities of ULBs, viable and sustainable infrastructure projects are put in place by the ULBs and the poor and disadvantaged sections of the society also access the benefits of such projects. To enable the ULBs to access capital markets, financial institutions and private investors for setting up Infrastructure Projects in the State either individually or through such arrangements as pooled financing, guarantees, securitisation etc To guarantee the performance of any contract or obligations and the payment for any bond issue or mobilisation of resources by the ULBs. To assist the urban local bodies in getting the participation of non-Government sector in creation and maintenance of civic infrastructure through joint ventures and other innovative partnerships. To subscribe for, underwrite, acquire, hold and dispose off shares, stocks, debentures, debenture stocks, bonds, mortgages, obligations, securities of any kind issued or guaranteed by any company (body corporate or undertaking) of whatever nature and industry, Government, Trust, Municipal, Local Authority or body of whatever nature. To invest any money of the Fund, in any investments as may be prudent and as may be necessary provided the income from such investments should be utilised to fulfill the objectives of the Fund. To act as nodal or nominated agencies on behalf of the Central and or the State Governments for infrastructure projects in the State. To do all other things necessary and conducive to the attainment of all these objects. ARTICLE – V INVESTMENTS Section 5.1. Investment Policies: The Trust intends to achieve its investment objectives by investing the Trust Fund in accordance with the investment strategy and investment policies and guidelines as may be laid down by the TRUSTEE, subject to the following restrictions:a. b. Eligible borrowers will include Urban Local Bodies, Statutory Boards, Public sector Undertakings and Private Investors, and other persons or entities included in Trust Indenture. Environmental, resettlement and social issues to confirm with the existing laws and regulations in India and Andhra Pradesh and in case of externally aided projects, as per relevant policies of external institutions such as World Bank, Asian Development Bank etc. 261 ARTICLE – VI INDEMNITY Section 6.1. Indemnity: The Trust will indemnify the FUND MANAGER, its subsidiaries, affiliates and personnel against claims, liabilities, costs and expenses, including legal fees, incurred by them by reason of their activities, other than those arising out of gross negligence and / or willful misconduct, on behalf of the Trust provided however that such indemnity in any event will not exceed the total of the Contribution at any point of time. ARTICLE – VII FUND MANAGEMENT Section 7.1. ADMINISTRATION: The FUND MANAGER shall monitor and supervise the Investments in accordance with the policy guidelines of the Trustee. Section 7.2. Follow –up: i. ii. The FUND MANAGER shall exercise all rights available to any creditor / investor with regard to the Investments of the Trust. The FUND MANAGER shall require each Borrower to provide reports of operating results, financial position, collection prospects, quarterly progress reports and completion reports as well as annual statements of accounts audited by a reputed auditing firm. ARTICLE – VIII FUND MANAGER’S FUNCTIONS AND BUSINESS Section 8.1. Functions: The functions and business of the Fund Manager will include and be:i. ii. iii. iv. to identify and source Infrastructure Projects, entrepreneurs, promoters and proposals for investment of the Trust Fund. to carry out appraisal and due diligence of such investment proposals. to engage professionally skilled and / or experienced personnel to provide the necessary advisory and investment managerial support and / or guidance and if necessary to assist in the administration of the Trust to provide the necessary advisory and investment managerial support and / or guidance and if necessary to assist the administration of Urban Local Bodies / Statutory Boards and restructure their financial / operating parameters to 262 enable the Urban Local Bodies / Statutory Boards to become creditworthy in the long run and enable the Urban Local Bodies / Statutory Boards to raise resources at reasonable and cost effective rates. Section 8.2. Collections: The FUND MANAGER shall collect all dividends, interest, property and other payments, forming part of and relating to the Trust, in cash or kind. Section 8.3. Distribution of Net Income: The FUND MANAGER shall within 90 (ninety) days after the decision of the TRUSTEE, distribute any part of the Net Income to the Beneficiary or Beneficiares. Section 8.4. Debt Service: The FUND MANAGER shall in accordance with the Agreement/s entered into between the Trust and its Lenders make payment to such Lenders. Section 8.5. Business Promotion: The FUND MANAGER shall undertake business promotional activities, and in this regard, shall conduct seminars, conferences, workshops, out reach programmes etc., to update the prospective borrowers, on the schemes of funding, the tenor and other terms. Section 8.6. Review: The FUND MANAGER shall review the pipeline of projects periodically and develop shelf of projects. The FUND MANAGER shall endeavour to co-ordinate and assist in speedy project implementation by the borrowers. ARTICLE – IX DUTIES OF THE FUND MANAGER Section 9.1. General Duties: The FUND MANAGER shall: i. ii. iii. act prudently as FUND MANAGER in accordance with the terms of this Agreement until its termination; exercise all care, skill and due diligence and vigilance in carrying out its duties and in protecting the rights and interest of the Trust prudently. bring in professional expertise and build a competent team in discharging the functions of the Trust for achieving its objectives. Section 9.2. Books of Accounts: The FUND MANAGER shall keep proper books of account for the Trust and make the books available to the Trust at any time. 263 Section 9.3. Furnishing Financial Statements: The FUND MANAGER shall provide the Contributor and the TRUSTEE with: a. b. c. unaudited financial statements of the trust within 90 days of the conclusion of the Trust’s respective Accrual Period and annual reports including audited financial statements of the Trust within 180 days of the conclusion of the Trust’s respective Accrual Period and quarterly reports within 30 days of the end of each quarter providing narrative and unaudited summary financial information regarding the Trust’s operations. Section 9.4. Identifiable Fund: The FUND MANAGER shall at all times ensure that the Trust Fund is kept segregated from the assets of the FUND MANAGER. Section 9.5. Devotion of Time: The FUND MANAGER shall devote to the Trust, such time as the FUND MANAGER reasonably determine shall be necessary to conduct the Trust’s affairs in an appropriate manner in accordance with this Agreement. ARTICLE – X DELEGATION OF DUTIES Section 10.1. Managers, Advisors, etc: The FUND MANAGER may with the prior written consent of TRUSTEE delegate to any entity previously approved by the TRUSTEE any or all its duties and powers under this Agreement and specifically may appoint managers or advisors to assist the FUND MANAGER in managing the Trust Fund. Section 10.2. Responsibility: Regardless of any such delegation, the FUND MANAGER shall remain responsible for all decisions and be liable for any delegate’s act of omission or commission as if the FUND MANAGER would itself have been liable under the Agreement for that act of omission or commission. ARTICLE – XI FEES AND EXPENSES 264 Section 11.1. Management Fee: The TRUSTEE shall pay to the FUND MANAGER such fees and incentives, on such terms and conditions, for the services, as may be decided by the Trustee and communicated in writing to the Fund Manager. Section 11.2. Payment of Fee: The Management Fee shall be payable out of income, or in the event of an insufficiency of income in any Accrual Period out of the Trust Fund. In the event that the Trust is unable for any reason, to pay any amount of the Management Fee when due, the FUND MANAGER may cause the Trust to incur short-term indebtedness to fund such payment. Section 11.3. Taxes etc.: The service tax on Management Fee shall be borne by the Trustee. Section 11.4. Reimbursement of Expenses: The FUND MANAGER shall be entitled to reimbursement of expenses incurred by the FUND MANAGER in connection with the management of the affairs of the Trust, including, but not limited to, amounts expended for accounting, legal (including the fees and expenses of counsel to the Trust), printing and clerical expenses, stamp duty and registration and filing fees of any kind, mailing and courier expenses and travel accommodation and communication expenses. The FUND MANAGER shall not receive any salary, profits, distributions or compensation from the Trust. ARTICLE – XII DURATION AND TERMINATION OF AGREEMENT Section 12.1. Period: This Agreement commences from the date hereof and automatically terminates on the expiry of the Trust Period unless it is otherwise terminated as specified herein below. Section 12.2. Notice: Either party may terminate this Agreement immediately by giving notice to the other party, if the other party becomes insolvent, bankrupt, goes into liquidation or otherwise ceases to exist. In any other event, either party may give 180 day’s notice for terminate of this Agreement. 265 Section 12.3. Action on Termination: Upon termination of this Agreement, the FUND MANAGER shall forth with transfer custody of the Trust Fund, to the TRUSTEE and shall forthwith deliver to the TRUSTEE all books of account, correspondence and records relating to the Trust which are in the possession, custody or control of the FUND MANAGER or an entity to which the FUND MANAGER may have delegated any of its duties under and in accordance with this agreement. ARTICLE – XIII REMOVAL OF THE FUND MANAGER Section 13.1. Removal: The FUND MANAGER shall be removed by the TRUSTEE, if the Contributor viz GoAP so decides. Section 13.2. Notice: The Contributor shall give 90 days notice in writing to the FUND MANAGER, prior to such decision on removal. ARTICLE-XIV AMENDMENTS AND SUPPLEMENTS Section14.1. Amendments: This Agreement may be modified and or altered and or amended and or supplemented at any time and from time to time with mutual consent by both the parties to the Agreement a supplemental Agreement executed and signed by the TRUSTEE and the FUND MANAGER. ARTICLE-XV SCHEDULES Section 15.1 – Counterparts: This Indenture may be executed in any number of counterparts, each of which when so executed and delivered shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 15.2 - Schedule: The Schedule hereto shall form an integral part of this Indenture. 266 ARTICLE – XVI MISCELLANEOUS PROVISONS Section 16.1 – Overriding Exceptions: Notwithstanding anything herein contained no power or provision hereby or by law conferred upon the TRUSTEE and the FUND MANAGER shall be exercised in such a way as to infringe any rule against perpetuities, which may become applicable hereto Section 16.2 – Article Ineffective or Void: If any Article/s or any part thereof is or are declared to be ineffective, inoperative or void, the same shall not affect the validity of this Indenture or the other part of such Article/s as the case may be. Section 16.3 – Overriding Effect: In case of any conflict between the provisions of this Indenture and the Schedule hereunder or any other Indenture or document, the provisions of this Indenture shall prevail. Section 16.4 – No rights conferred on others: Nothing herein contained shall confer any rights upon any person other than the parties hereto. Section 16.5 – Invalid provisions disregarded: In case any provision in this Agreement shall for any reason be held invalid, unlawful, or unenforceable in any respect, this Indenture shall be construed as if such provision had never been contained herein. Section 16.6 – Successors and Assigns: All the Articles, Covenants, and Promises in this Agreement contained by or on behalf of TRUSTEE and the FUND MANAGER, shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not. Section 16.7 – Headings and Convenience: The descriptive headings in this Indenture are inserted for convenience only and shall not control or affect the meaning or construction of any of the provision hereof. Section 16.8 – Applicable Law: The Agreement shall be governed by and construed in accordance with the laws of the Government of India and of the State. 267 Section 16.9– Notices to parties: Any notice, approval, direction or instruction given under this Agreement shall be in writing and delivered by hand, post, cable, facsimile, telex, or electronic media mail etc., to the Registered office of the addressee. Notice and instruction will be deemed served seven days after posting or upon receipt in the case of hand delivery, cable, telex facsimile or e-mail. The addresses of the parties to the Agreement, for the time being are furnished hereunder: THE TRUSTEE OF Andhra Pradesh Urban Infrastructure Fund The Principal Secretary/Secretary to the GoAP Municipal Administration and Urban Development Department, A.P Secretariat Hyderabad – 500 022. THE FUND MANAGER Andhra Pradesh Urban Finance and Infrastructure Development Corporation Limited A.P Secretariat Hyderabad – 500 022 SCHEDULE POWERS OF THE FUND MANAGER The TRUSTEE does hereby appoint, nominate, constitute, and grant to the FUND MANAGER as the true and lawful attorney of the Trust all powers and privileges except as otherwise limited under this Agreement and in its name or in its own name to do, execute and perform any or all the following acts, deeds and things for the management of the Trust, that is to say: (1) (2) (3) (4) (5) (6) (7) To invest the Trust Fund in accordance with the policies and procedures laid down by the TRUSTEE from time to time. To be responsible for the day to management of the Trust which shall be subject to any directions, instructions and guidelines provided by the TRUSTEE To take decisions as to investments, disinvestments, and distribution of Trust Fund only in accordance with the provisions of this Agreement. To invest the Trust Fund in Infrastructure projects and activities more specifically provided herein To sign loan agreements with sub-borrowers and other documents in connection therewith on behalf of the Trust. To exercise all powers, rights and privileges given to it by the Contribution Agreement. To manage the Trust Fund by doing or causing to be done all such acts or things as may be necessary to mobilize, invest, manage and to collect and receive by installments or otherwise all moneys due and owing to the Trust. 268 (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) (23) (24) To generally evolve, formulate and adopt from time to time such policies and procedure as may be conducive for the effective administration and management of the Trust and the attainment of its objectives as may be decided by the TRUSTEE To disseminate information, knowledge, data, details and the like related to or in respect of the Trust including the publication of any offer document, placement memoranda and / or brochures etc. or requests for assistance and to otherwise do all acts and things as may be necessary to promote the activities of the Trust. To apply for and obtain all necessary consents including from any Government Agency and other authorities and institutions for all activities, administration or management of the Trust. To comply with any directive or Government Authorization. To appraise or evaluate such applications, requests or proposals for establishing the viability of any Infrastructure Project and to ascertain the returns the Trust can earn on its investment and thereafter to approve, sanction or disapprove the investment. To advise Urban Local Bodies / Statutory Board and Public Undertakings to improve their creditworthiness and in the long run enable them to raise resources at market rates. To decide upon the amount or amounts to be invested in each Infrastructure Project and the mode, manner, terms and conditions for making such investments. To determine the forms of assistance including the return to be earned therefrom, and to realise such investments and income and distribute the same as per the terms contained herein To advance monies in relation to Infrastructure Projects, whether on interim disbursement or otherwise, upon such terms and conditions as deemed fit in anticipation of execution of any agreement or document or issue or allotment of shares or creation of security. To vary, alter, postpone, extend or cancel the terms and conditions of investment agreements, contracts, guarantees, indemnities, undertakings, as entered into in respect of the relevant Infrastructure Project. To sustain, cancel or terminate all or any assistance or recall the advances and recover any payments either by sale of shares or enforcement of security, guarantee or indemnity or otherwise. To accept premature cancellation of contracts and prepayment of assistance on such terms and conditions as the FUND MANAGER may deem fit and also to give effective discharge for the moneys so received. To exercise all the powers, rights and privileges under the agreement or contracts entered into on behalf of the Trust by the FUND MANAGER To receive Contributions from time to time. To distribute income to the contributors in accordance with the Contribution Agreement To collect all amounts due or that may become due to the Trust if necessary by allowing APUFIDC to have escrow power on revenues of UL:Bs from any of the revenue sources to recover loans advanced by APUFIDC. Such amounts due to the Trust would include but not limited to the sale of shares, dividends, enforcement of securities, indemnities, guarantees or undertakings, repayment of advances, interest, charges on sales, expenses such as legal, traveling, communication and accounting expenses as well as costs, liquidated damages, commitment charges, processing fees, upfront fees etc and acknowledge all type of receipts from whatever source relating to Trust Fund and to otherwise do all such acts, deeds and things as may be necessary to ensure such collection. To obtain the shares or other securities, wherever the trust Fund is invested in shares or securities in the name of the Trust, if so permitted by government authorization. 269 (25) (26) (27) (28) (29) (30) (31) (32) (33) (34) (35) (36) To exercise all the rights, power and privileges as of shareholders and other security holders in such investments. To decide upon the appropriate time, consideration, terms, mode and manner of divesting the shares or securities obtained and to divest the same in such manner as may be decided by the FUND MANAGER from time to time. To nominate or get appointed its nominee’s as directors/ members on the Board of Directors / governing body of any borrower in accordance with the terms and conditions agreed to by the Fund Manager or otherwise to protect the interests of the Trust in any manner it may deem fit. To convene, requisition, attend and vote at and otherwise take part in all meetings of the members or security holders and to sign proxies, powers of attorney at or for any other purpose connected therewith as fully and effectually as the Trust could do, including acting as the authorized representative of the Trust. To expend or agree to expend all or any money the FUND MANAGER shall receive on behalf of the Trust in the execution of the Powers conferred on the FUND MANAGER by this authority and paying the expenses and costs of whatever nature, as may be decided by the FUND MANAGER, in carrying out the acts, deeds and powers granted herein. To commence and prosecute any action or other proceedings in any court of law or through arbitration or in any other manner for recovery of debts or sums of money, right, title or interest, property, claim, matter or thing whatsoever now or hereafter to become due or payable or in anyway belonging to the Trust by any means or on any account whatsoever in respect of and pertaining to the investments made by the FUND MANAGER and to continue the same actions or proceedings or suits or to discontinue or settle as the same as the FUND MANAGER shall in its best judgement or discretion deem fit. To commence, institute, conduct, defend or abandon any action or legal proceedings for the purposes of the Trust and have for such purposes, powers to sign and verify all plaints, written statements, petitions, appeals, declarations, revisions and applications and have power to refer any claim to arbitration and to execute, perform, observe and challenge the awards. To appear in and defend or compromise any action or other proceedings now or hereafter to be instituted, commenced or prosecuted against or pertaining to the Trust in any court of law and if necessary through arbitration as aforesaid and to refuse and resists payment of any sum or sums or money or compliance with or fulfillment or any claim or demand or otherwise as the FUND MANAGER shall deem fit. To have legal Counsel, legal advisors and engage Advocates in connection with any suit or case filed by or against the Fund Manager, while acting as the Fund Manager of the Trust. To pay or satisfy or to compromise or compound upon such terms which the FUND MANAGER may deem expedient any debts or damages owing to or claimed by or from the Trust or for which the Trust may or may be alleged to be liable in respect of the transactions done by the FUND MANAGER. To initiate and complete proceedings in bankruptcy and / or winding up and other process against the estates of persons and / or as the case may require against promoters of such Infrastructure Project. To take part in the formation, management, supervision or control of any business or operations of any investment and for that purpose act as administrators, or in any other capacity if required as well as nominate and appoint any directors, administrators, consultants, investment or fund manager accountants or other experts to the Infrastructure Project and to remunerate them. 270 (37) (38) (39) (40) To provide counsel, consultancy, advice, services or assistance and help in obtaining such counsel, consultants, advice or other support services related to technology, finance, legal, commerce, accountancy, taxation, labour, public relations, statistics, science, computers, quality control, processing, production, marketing, Investment, Managerial or other fields in relation to Infrastructure Projects. To hold under the terms of the terms of this Agreement the Trust’s assets such as equity shares, security, contractual rights, leasehold rights, book debts, plant and machinery, technical know-how, movables, equipment and other goods or assets, tangible or intangible, property as defined herein and to hold, dispose of or deal with shares or securities of the Trust whether of fixed or variable character. To maintain or cause to be maintained if so authorized, such books of account in relation to the Trust as it shall deem necessary, and to present the same to the TRUSTEE on demand. To carry out the following activities, if so authorized by the TRUSTEE: (a) To open such bank accounts under the name and style suitable for the operations of the Trust with any bank and authorize officers of the FUND MANAGER to sign such forms, documents, and things, as may be necessary in this regard. (b) To withdraw and deal with any of the securities or documents of title which may be deposited with the bank in any manner the FUND MANAGER may deem fit. (c) To cause the accounts of the Trust, to be managed by the FUND MANAGER, to be audited by such auditors as the TRUSTEE may appoint in this behalf from time to time. (d) To cause periodical audit reports to be submitted to the TRUSTEE, and / or such other persons as may be notified by the TRUSTEE and to otherwise assist to ensure that the accounts of the Trust are properly audited. (41) (42) (43) (44) To do all other acts, deeds and things, as usual, desirable or expedient in the management of the affairs, or for the purpose of the Trust and to best expedite the carrying out its objects and to appoint and employ in and for the purpose of transactions and management of the investments of the Trust or otherwise for the purposes thereof such investment or fund managers, bankers, secretaries, brokers, engineers, contractors, assistants, and other servants, persons or employees as it shall deem proper and with such powers and duties and upon such terms as to duration of employment, remuneration or otherwise as it shall deem fit and, from time to time, avail of the assistance of legal advisers, chartered accountants or technical persons on such payments or remuneration as it considers appropriate for the business or affairs of the Trust. To register, file or cause to be registered or filed in any of the offices of Registrar of Companies or Sub-Registrar of assurance or any other Registrar or any court or with anybody or authority, corporation, Trust or person this power of attorney and all deeds, notices, memorials, contracts, instruments or documents which it may be necessary or expedient to register or file or if required by law. To file all such applications, forms, documents, petitions and other papers with/before any government agency and other similar forums as may be necessary from time to time in connection with obtaining any consents and / or in order to comply with any directive or government authorizations and for effective management of the Trust or to Trust Fund. And generally to do, execute and perform all other acts, deeds and things ancillary and incidental to the foregoing powers as are lawful and thought advisable and as fully and effectively in all respects as the Trust could do. 271 IN WITNESS whereof the parties hereto have executed this Agreement (in two sets) on the day, month and year first hereinabove mentioned. Singed Sealed and Delivered by Mr. On behalf of the Trustee In the presence of: 1. 2. Signed, Sealed and delivered by Mr. on behalf of the FUND MANGER in the presence of ;1. 2. MUNICIPAL BORROWING AND DEBT MANAGEMENT The challenge that most of Urban Local Bodies in the country face is to deliver better services to residents within a context of limited financial and human resources. The ultimate goal is to provide better quality of life to the residents on a sustainable basis. There has to be proper planning in place, which can address the civic, needs of the community and quantity the gaps in services. Due efforts should be taken to find various modes of funding to fill the gap. General borrowings for economic management have become an order for the day. It is an integral part of any organization either in the investment process – to install capital assets and derive enduring benefits on a long-term or on a short-term basis by way of working capital for operational purposes. There is a dire need to ensure that these borrowings are sustainable and the organization is able to service its debt without any hitch. The latter objective decides the appropriate debt management approaches that an organization has to undertake in order to make it credit worthy. One of the sources for Infrastructure functioning is contracting debt. Debt may in any of the following form: 1.Loan from Government. 2.Loan from Financial Institutions. 3.Debentures. The financing arrangement for urban development projects is the budgetary allocation from state Govt.which are due to the directed credit regime. But with the revenue deficit of state Govt. 272 necessitating diversion of capital receipt to meet revenue expenditure has forced ULBs to obtain loans from LIC and other development financial Institutions. But the financial institutions advance loan based on the respective state Govt. guarantees. Issue of Govt.guarantees ha its own limitations in that these are contingent liabilities on the state’s finances. The next option is to get line of credit form the multilateral agencies such a World Bank, Asian Development Bank etc. Again, any financial intermediaries will prefer not to get the forex fluctuations in its books. Thus, the loans are routed through GOI and the concerned State Govts. Market Access: With the passing of the 74th Constitutional Amendment Bill, the ULBs can access the capital markets for their fund requirements. This has opened a very good opportunity for the flow funds to the urban sector. The Govt. of India, Ministry of Urban Development and Poverty vide Office Memorandum dt.8.2.2001 on issue of tax-free Municipal Bonds, guidelines for issue of tax-free municipal bonds have been issued. As per guidelines, the local authorities can issue tax-free bonds to meet the capital requirement in: a. b. c. d. e. Sewerage and Sanitation. Drainage. Solid waste management. Roads, Bridges and Flyovers and Urban Transport (if this is a municipal function) The capital investments shall be for setting up new projects and also for expansion, augmentation or improvement of existing system. The maximum amount of tax-free municipal bonds as a percentage of total project cost (excluding interest during construction period) will be 33.33% or Rs.50. Crores whichever is lower. Borrowing from external sources has its own financial consequences. If the state is credit worthy, it maybe able to comer cheap source of funds for developmental purposes and also it can meet all its liabilities including the repayment of loans by way of levy of proper user charges. Otherwise the loan becomes costly and its liabilities cannot be converted into user charges. This means that the debt servicing capability is not there. The government has to see that such loans are kept to the minimum, in case it is not possible to pass on the relevant charges to the ultimate consumers. Of late, this has been the bane of the governments, as they do not want to increase the user charges for its services to public unduly. All the funds are diverted for provision of non-merit goods that too at implicit or explicit subsidized charges. These have created dents in the revenue receipts, while the revenue expenses mounted. A time has come where the Government alone cannot meet the capital needs. Another method of finding a source of capital for Urban projects is the user charges both for the capital funding and also to cover the operation and maintenance needs of the project. The rationale for levying user charges and the methods of fixing the user charge has many criteria. User charges can be imposed in several ways, but have traditionally been levied as a price per unit of services consumed. In general, a public service can be efficiently financed by user charges only if the benefits derived from consumptions of the service can be restricted to the individual who 273 purchases it (exclusively) and if consumption by one person diminishes the amount of services available to the others. Further more there must be some means to measure individual usage such as metering, so that billing can be appropriately done. In order for user charges to be imposed on public services, there must be a willingness to pay on the part of consumers. Normally the price paid by consumers to private operator is always more than what is charged by the public bodies. Debit management covers the policy aspects such as the sources of financing, the choice of debt instruments, the amount to be borrowed and the terms of debt service. It is also concerned with strategic aspects of restructuring the existing debt liability, including rescheduling and refinancing and ways of minimizing the risk of exposure. Any government is not an exception to this borrowing phenomenon in its endeavour to manage its economy well and also to provide quality service to its people. It does not desire to experience debt service problems. It would well advised to establish effective arrangements for monitoring and managing debt. Otherwise, it would be lead to a plan of reschedule entailing additional cost of debt, ultimately driving it to bankruptcy. At the same time it has to keep in mind that the debts are scarce and costly, if the organization is not viable and also not readily available in required quantity at the asking. It has many sources of financing. Its guarantee for debt service has an added weight. It can resort to bank finance or market loans. The savings effected through pension or provident fund reserves or small savings are also readily available. The Central Government also provides loan funds. And there is always the Reserve Bank of India as a lender of the last resort. Each of the sources has its interest burden and repayment schedule. The key elements in debt management are: A comprehensive inventory of all loans and liabilities-both private and public-on loan-toloan basis. Forecasting debt service payments. Monitoring loan utilization for efficiency and effectiveness. Policy guidelines to maintain an optimum structure of debt with regard to maturities and interest rates. Determining sustainable levels of borrowings, taking into account the source wise availability of funds. Resorting to debt restructuring including rescheduling and refinancing as a means of short term balancing. Minimising exposure to risk-action on revenue augmentation. PUBLIC FINANCE: “Large fiscal deficits fuelled increasingly by deficits in the revenue budgets have been the bane of government finances in India for nearly two decades” laments the 11 th Finance Commission. It goes on to add: ‘the structure of public finances in an economy is defined by the level and 274 composition of expenditure of the government (current and capital) and the instruments relied upon to finance them, VIZ., the tax and the non-tax revenue sources and borrowings. The excess of government expenditure over current revenues and other non-debt receipts gets reflected in fiscal deficits financed either by way of borrowings from internal and external sources of through seignorage, that is money printing. If expenditure persistently exceeds revenues, fiscal deficit, to the extent it is not covered by seignorage, steadily adds to outstanding debt, resulting in increased interest payments.’ To avoid this self-perpetuating spiral of debt and deficit, commensurate increase in revenue receipts must take place. Accumulation of debt reflects the outcome of the fiscal operations of Centre/States on the revenue and expenditure sides of their budgets. If expenditure, whether committed of discretionary, exceeds revenues, tax and non-tax, the excess can only be financed through fresh borrowings. If these borrowing are purely a temporary nature, then adjustments as to how to service them on a short-term basis can be worked out. But if this persists for a long period and also grows in volume, debt becomes unsustainable. Entry into a debt trap is a possibility. The remedy lies in identifying the structural deficiencies and the underlying reasons and taking appropriate corrective measures. ASSESSMENT OFSTATES’RESOURCES: Sl.No ITEM 1999-2000 B.E % To GDP 2000-2001 B.E % To GDP 2004-2005 B.E. % To GDP 1. Revenue receipts i) Tax Revenue 103648 5.37 108801 4.98 162224 4.56 18379 0.95 24799 1.14 30491 0.86 1711 0.09 1691 0.08 2265 0.06 123738 6.41 135291 6.20 194979 5.48 Plan 42889 2.22 315251 14.44 501670 14.09 Non-Plan Surplus / Deficit 197668 10.23 48665 2.23 76012 2.14 On Revenue Account Non-Plan Revenue Surplus / Deficit -116819 -6.05 -179960 -8.24 306691 -8.62 -73930 -3.83 -179960 -6.01 -230678 -6.48 ii) Non Tax Revenue Non-Plan 2. 3. 4. 5. Total (I –ii) Revenue Expenditure Estimated GDP at Current market prices 1931819 2182956 275 3559252 It is sent that both plan and non-plan revenue deficits are likely to increase substantially by the year 2004-2005. It is rather surprising that the tax and non-tax revenues are likely to decline considerably, indicating the dormant unwillingness on the part of the states to realistically attempt to restore balance in the budget. This requires a close look at the potential revenues-both tax and non-tax- in the years to come for each of the States and giving due consideration to State policies of revenue generation. The cursory analysis so far reveals the necessity to bring down the debt burden of states over a period of time. Four steps are needed for the purpose. 1. A comprehensive plan of providing debt relief for the existing total debt of more than Rs.4.0 lakhs of crores incurred by the States. 2. In order that the current burden of interest and repayment of loans are properly matched, the current revenue streams are devised in such a manner that the incremental revenue receipts meet the incremental interest charges; the pricing process is streamlined to ensure that the above also generates a surplus. 3. The surplus on revenue account is credited to a sinking fund to meet the future payment obligation. 4. The states must devise a sustainable revenue balance in future. CONCLUSION: It has been observed in many ULBs that a long term physical development plans along with investment plan are rarely worked out to provide a basis for projecting requirement of expenditures both for capital and revenue purposes over a period of time. Failure to effectively monitor the cash flow in ULBs has lead to unrealistic revenue projections and expenditure commitments. Since ULBs frequently encounter serious cash flow problems, they find themselves operating without sufficient operational capital and therefore often have to make ad-hoc decisions for adjustment in expenditure resort to using loan funds to finance the recurring expenditure. For effectingly determining the borrowing capacity and to supervise and monitor the debt situation a centrally located Debt Manager Cell could be established in respect of all Urban Local bodies. 276 Annexure – 3 (G.O.Ms.No.72, MA & UD (UBS) Department, dated 18.02.2005) APURMSP Funds Access Criteria (as per the World Bank Aide Memoire dated October 15, 2004) Access Criteria Compliance to be assessed based on ULB has an operating surplus and has Based on finalized accounts of last FY borrowing/investment capacity A ULB not satisfying this criteria can still access investment funds but only for those sub-projects that are financially viable on a stand-alone basis (Sub-project FIRR> cost of Funds) and provided other criteria (below) are met. Accounts of ULBs are upto date (finalised) and ULB undertakes to complete audit within one year of participation in APURMSP Property Tax Collection Efficiency > 75% Measurable progress already achieved by ULB with regard to atleast one area of reform Accounts to have been finalized within 6 months of close of FY During the Last FY This could include progress on any of the reforms related to urban governance including e-governance, computerisation, citizen charters, etc. Revenue Improvement Action Plan for ULB in Increase in municipal revenue during the place Project Period 277 Annexure –4 (G.O.Ms.No.72, MA & UD (UBS) Department, dated 18.02.2005) APURMSP Operational Procedures Initial Project Proposal from ULBs 1. The ULB will submit documents in the format prescribed which shall form part of the Initial Project Proposal (IPP) submitted to the MSU-CDMA. The ULB shall also submit all originals supporting the IPP. 2. MSU-CDMA, in the capacity of PDAF fund manager, will evaluate all IPP submissions based on a defined benchmark. The MSU-CDMA will come out with an Initial Screening Report, based on which the qualifying IPPs would join the pipeline of projects for preparation of Detailed Project Reports and Bid Documents by the Consultants engaged for the purpose. 3. The ULBs, based on the Consultant’s Report, shall submit to APUFIDC (i) detailed designs, drawings, technical specification and tender documents for sub-projects, (ii) RAP and EMP for sub-projects, and elements to be incorporated in PMS consultant’s TOR and as part of tender documents, (iii) project execution schedules (Gantt Charts), and (iv) project cash flow schedules. 4. Sub-projects need line department clearance before being submitted to APUFIDC. 5. The ULB, based on a Council Resolution, would then apply to APUFIDC for funding of the Project under the APURMSP Investment Component. 6. The PAC shall review the DPR and through MD, APUFIDC, submit a request to the EC through a Board Note seeking approval for on-lending and procurement of works. Prior to submission of DPRs to APUFIDC, the ULBs should have obtained all necessary approvals from competent authorities. Detailed Project Reports The objective behind preparing DPRs is to arrive at detailed engineering designs, drawings, Bill of Quantities (BoQs) and tender documents for approved sub-projects. The DPR shall also contain Resettlement Action Plans (RAPs) and Environmental Management Plans (EMPs), where required, and Economic and Financial analyses. Engineering surveys, socio-economic surveys, slum household surveys, and other relevant surveys required to support identified sub-projects should be carried out to support the DPR. i. Technical/Design: The technical component of the DPR should comprise detailed engineering designs and drawings for sub-projects. National and International standards shall be followed for all designs. Costing shall be based on Public Works Department (PWD) Schedule of Rates (SoRs) and locally available material. ii. Institutional Assessment: The institutional assessment component should review and evaluate existing arrangement for operation and maintenance of assets and additional requirement resulting from proposed investments or alternative means of operating and maintaining the 278 services. If operation and maintenance is carried out by other agencies, the assessment should outline the obligations of parties in terms of functions and financial arrangements. iii. Economic Analysis: Economic analysis should be carried out for investments above US$300,000 using standard appraisal models as per prescribed methodology. Individual sub-projects will be evaluated by either cost-benefit analysis (requiring a minimum ERR of 12%) or cost effectiveness analysis (applicable to sub-projects with non-quantifiable benefits or sub-projects costing less than US$300,000). iv. Financial Analysis: The financial assessment methodology should focus on two aspects: Sub-project level financial viability: This would apply to only cost recovery sub-projects (water, waste-water, solid waste projects) and would see to ascertain sub-project level Net Present Value (NPV)/Internal Rate of Return (IRR); and Overall ULB Level Financial Sustainability. v. Financial Management Systems: The FMS assessment should focus on ULB’s institutional capacity to handle APURMSP sub-projects, which should comprise: Staffing for sub-project civil work procurement, and fund drawdown and application; Recording and reporting of sub-project physical and financial progress; Budgetary provision for APURMSP-funded sub-projects; and Compliance with audit requirement under the project. vi. Social Assessment: The SEMF governs the social assessment of sub-projects and the assessment should comprise: Screening procedures for reviewing sub-projects in order to classify them as those having high or medium, or low resettlement impacts; Mechanisms for addressing resettlement issues at different stages of sub-project cycle; Stakeholder consultations during preparation and involvement of local people during project implementation; R&R policy identifying likely impacts and entitlement framework for the persons affected by subprojects; and Roles and responsibilities of different agencies such as APUFIDC, ULBs and other government agencies in addressing resettlement issues. vii. Environmental Assessment: The SEMF governs the environmental assessment of sub-projects and the assessment should comprise: National, state and local legal requirements on environmental issues that will be applicable to the urban sector sub-projects; Screening procedures for reviewing sub-projects in order to classify them as those having high or medium or low environmental impacts; Sub-project cycle and methods to address environmental considerations and assessments at different stages; Carry out documentation disclosure activities; Public/stakeholder consultation done and approach during project implementation; and Environmental roles, and responsibilities of different Government agencies such as APUFIDC and ULBs. 279 Memorandum of Agreement 1. The ULB shall enter into a Memorandum of Agreement (MoA) with the MSU-CDMA defining the service and financial targets it proposes to achieve during the project period and associated organisational structuring to achieve the targets. 2. In the case of ULBs, monitoring and evaluation will conform to the Memorandum of Agreement signed between each ULB and MSU-CDMA, which is signed prior to the release of APURMSP funds. The MoA will be tailored to the individual ULB’s requirement and covering at least: Commitment to follow the outputs of the CIP process as the basis for all investment decisions and as defined in the Performance Benchmark Report; Agreed action plans for reforms and revenue enhancement measures; and Borrowing limits for the participating ULB. 3. Satisfactory compliance to the MoA will be a condition precedent to access investment funds for subsequent investments. This compliance will be determined by an independent assessment, outsourced to a consultant by MSU-CDMA. Outputs and Compliance Report 1. Sub-project Implementation Monitoring Sub-project implementation will be monitored by a Consultant or through an independent supervision, subject to sub-project social and environment category. Monitoring shall cover physical progress and associated expenditures by sub-project. 2. Safeguards Monitoring On social and environmental issues, both internal and external monitoring mechanisms will be set up, and evaluation will be done at sub-project level and the project as a whole. Internal monitoring on social issues will be done at: ULB level – by the ULB and Resident Welfare Associations District level – Grievance Redress Committee State level – by MSU-CDMA The supervision consultants, using the RAP/EMP requirements as the basis, will report on social and environmental issues of sub-projects. Supervision consultants will submit regular monitoring reports to the ULBs and MSU-CDMA, which shall include necessary actions to correct any non-compliance and the follow-up on such actions. In turn, MSU-CDMA will assess and compile these sub-project monitoring reports on a quarterly basis and send them to the World Bank. In addition, APUFIDC’s internal audit reports shall cover social and environmental issues. The audit findings will include gaps/deficiencies and recommendations, which will be implemented by MSU-CDMA. 3. Sub-Project Completion and Operations Report Sub-Project Completion Status: The ULBs will submit completion reports to MSU-CDMA and APUFIDC comprising physical completion of the sub-project (with a commissioning report from the Consultant), loan drawdown and fund application statement for each sub-project, and social and environmental risk mitigation for each sub-project (based on category). The ULB shall carry out periodic evaluation of each sub-project to evaluate service performance, and report the performance 280 to MSU-CDMA and APUFIDC. Municipal Financial/Reform Compliance: The ULB shall submit to MSU-CDMA half-yearly statements of municipal fiscal status and financial performance, in the prescribed format. The ULB shall make such submissions through the term of the loan. Social and Environmental Compliance The ULB shall submit to MSU-CDMA, statements on mitigation measures adopted to overcome any social and/or environmental impacts during the sub-project operations period. The ULB shall indicate any expenditure incurred in implementing mitigation measures. Progress Report and Review The Progress Report on the utilisation of the PDAF will be prepared by MSU-CDMA on a half-yearly basis. Based on the Progress Report, the performance of the PDAF would be reviewed by the Principal Secretary, MA&UD on a half-yearly basis with special reference to: Number of consultancies resulting in procurement packages; and Number of consultancies resulting in award of contracts. Based on the review, the GoAP will consider, if necessary changes to this part of the manual in consultation with the World Bank. The ULBs shall submit to the MSU-CDMA, the PDAF sub-project implementation progress and performance monitoring indicators regarding urban basic services and municipal fiscal status. Performance Benchmark Report (PBR): The ULBs shall submit a Performance Benchmark Report (PBR) indicating service and fiscal baselines, and benchmarking improvements in service delivery and financial performance for identified investments through the APURMSP period. 4. ULB Reporting to APUFIDC APUFIDC shall make their sub-borrowers submit quarterly FMRs, in the agreed format, to reflect the financial and physical progress achieved in implementing the approved sub-projects. In addition, the participating ULBs will also be required to submit the annual financial statement within three months of the fiscal year end, which will be subject to audit by the statutory auditor of APUFIDC. Financial Management Reports (Role of APUFIDC) APUFIDC will consolidate Financial Management Reports (FMRs) in prescribed formats. The FMRs should provide actual versus budgeted expenditures/sub-loans, forecasts of cash requirements, physical and financial progress and procurement contract management information. The FMRs should broadly address: i. APURMSP physical progress juxtaposed against financial progress; ii. Reconciliation of expenditures/sub-loans claimed from the Bank with expenditures/sub-loans made annually; iii. Sub-borrowers’ (ULBs and/or Statutory Boards) quarterly financial reports reflecting the physical and financial progress achieved in implementing sub-projects; and 281 iv. Annual financial statement of ULBs/Statutory Boards within three months of the fiscal year end – the ULB finances is subject to audit by the Controller, State Accounts Department or an agency appointed by GoAP. The first FMRs for the project will be submitted to the Bank within 45 days of the end of the first quarter from the date of loan effectiveness. Reporting to MA&UD and World Bank APUFIDC Based on the executing agencies’ report, APUFIDC will produce a consolidated progress report, to be submitted to the MA&UD and the World Bank, within one month of the end of the relevant quarter. This consolidated report will include but will not be limited to the following: i. Information on APUFIDC financial operations and the institutional capacity to perform its current designated role and possible future functions (or exit strategy) MSU-CDMA i. The progress and aggregate development of the sub-project development technical assistance and training activities ii. Report APURMSP results framework and monitoring output to measure the impact of the investment and/or TA activities on achievement of the overall project development objective and results expected under each project component. iii. Report progress towards each of the policy objectives (including information on other institutional and policy reform activities). iv. Report participation of sub-project beneficiaries, problems arising from sub-project implementation, appropriate mitigation strategies & measures. 282 GOVERNMENT OF ANDHRA PRADESH MUNICIPAL ADMINISTRATION AND URBAN DEVELOPMENT (UBS) DEPARTMENT Memo No. 5121/UBS/2008. Date: 25 -03-2008. Sub:- APURMSP - MSU - Request to accord permission to drop out the ungrounded works taken up in various works taken up in various Municipalities / Municipal Corporations - Reg. Ref:- D.O.Lr.No.001105/FC/MSU/APURMSP/06, dated: 17-01-2008 received from CDMA, Hyderabad. *** With reference to the D.O. Letter cited Government hereby permit the Commissioner and Director of Municipal Administration to drop out the following works taken up under APURMSP Project. 193 works with cost of Rs.33.88 crores which could not be grounded for want of permission of World Bank for re-bidding. 7 works with cost of Rs.1.54 crores for which agreements pending at ULB level. Out of 696 grounded works some of works which are held up for more than one month and which are not likely to be taken up further for various factors without making inconvenience to the public. All the works of which where loan agreements have not been entered and have not concluded with APUFIDC Ltd., so far. Further, the Commissioner and Director of Municipal Administration is requested to take proper care will be taken that no work or works coming under the purview of the Hon’ble C.Ms. Assurances such as Rajeev Nagar Bata, are dropped or closed. PUSHPA SUBRAHMANYAM SECRETARY TO GOVERNMENT To The Commissioner and Director of Municipal Administration, Hyderabad. Copy to the Managing Director, APUFIDC Ltd., Hyderabad. ///FORWARDED BY ORDER\\\ 283 MOST IMPORTANT ANDHRA PRADESH URBAN REFORMS AND MUNICIPAL SERVICES PROJECT MUNICIPAL STRENGTHENING UNIT O/o Commissioner & Director of Municipal Administration Cir.No.001105/General/MSU/APURMSP/TU/2006, Dated:21.04.2008 Sub:- MSU-APURMSP-Drop out the unground works taken up in various Municipalities/Municipal Corporations – Reg. Ref:- Govt.Memo.No.5121/UBS/2008, Dated:25.03.2008 ***** With reference to the above cited, all the Commissioners of the ULBs who have taken up works under APURMSP are instructed to drop the following category of works taken up under APURMS Project: All the Works which could not be grounded for want of permission from World Bank for rebidding. All the works for which the agreements are pending at ULB level. All the works which are grounded, but held up for more than one month and which are not likely to be resumed further for various factors without causing inconvenience to the public. All the works where the loan agreements have not been entered and concluded with APUFIDC Ltd., so far. Further the Commissioners are informed that while considering the closure of the works, it should be ensured that no work or works which are coming under the purview of the Hon’ble C.M’s Assurances such as Rajeev Nagara Bata etc., are dropped or closed under any cost, for which the Commissioner will be held responsible. In view of the Government instructions stated above, all the Commissioners are requested to take urgent necessary action and inform this office accordingly. COMMISSIONER & DIRECTOR To All the Concerned Commissioners of Municipalities/ Mpl. Corporations Copy submitted to the Secretary to Govt., MA & UD Dept for favour of kind information. 284 ANNEXURE 13: FLOW OF FUNDS & CLAIM PROCEDURES Annexure 13: Flow of Funds & Claim Procedures Government funds through Budget CDMA PD Account APUIF Bank Account (Urban Investment Component) MSU Bank Accounts (other components) ULB Memorandum of Agreement Loan Agreement Claim Procedure MSU APUIF Financial Manager Govt. of AP CAAF, GOI World Bank 285 ULBs ANNEXURE 14 : SUB PROJECT IMPLEMENTATION MONITORING (REPORTING) Annexure 14 : Sub Project Implementation Monitoring (Reporting) World Bank Secy., MA&UD Consolidated progress report (within one month of relevant quarter) on APUFIDC financial operations & institutional capacity APUIF • Progress report on utilization of PDAF on half-yearly basis • Progress report on sub-project development, training activities and policy activities MSU - CDMA Sub-Project completion status Municipal Financial / Reform compliance Quarterly Financial Management Report Social Environmental Compliance Annual financial Statement PDAF Sub-Project implementation progress ULB 286 ANNEXURE 15: STAFFING OF MSU UNDER APMDP & STAFFING AT THE APUIF OFFICE Annexure 15: Approved staffing at MSU Office for APMDP Sl. No. 1. 2. 3. 4. 5. 6. 7. Designation No. of Posts Project Director (MSU) Junior Level IAS Officer/any other State Government Officers of the rank of Joint Director and above on deputation. 1 Capacity Enhancement Specialist Selection/Special grade M.C,/ Gazetted Officer from Govt. on deputation 1 Technical Unit Officer from Public Health Superintending Engineer Dy. Executive Engineer Assistant Engineer 1 2 4 Disbursement Analysis Selection/Special Grade Municipal Commissioner/ Gazetted Officer from Govt. on deputation. Procurement Managers, Specialists Gazetted Officer. Trained in World Bank procurement procedures (SE level or equivalent) 1 2 Managers and 6 specialist positions 1 Financial Manager / Specialist Qualified profession accountant 1 Accountant Supporting staff for Project Director 1. Spl. Category / Sr. Stenographer 2 Computer Operator 3. Driver 4. Class-IV 1 1 1 1 Supporting staff for each officer 1. Superintendent on deputation of Govt. of A.P, 2. Sr. Assistant on deputation from Govt-of A.P. 3. Computer Operator 4. Driver 5- Class-IV 5 5 5 5 5 10 Urban environmental specialist Social Scientist 1 1 11 Technical unit officer from DTCP JOINT DIRECTOR (on deputation) 1 8. 9. 287 Note: Functions of Joint Director:1. Coordinate between DTCP, MSU and ULBs for town planning components of the project and linking with e-Suvidha. 2. Providing technical assistance in preparation of GIS related DPRs, tenders and RFPs, 3. Guide the consultants in preparation of GIS mapping and general town plans, 4. Monitor and review the progress of preparation of GIS mapping including property & utility mapping and general town plan.Approved staffing at the APUIF Office for APMDP Sl. No. 1 2 Name of the Post Method of filling Company Secretary Finance Manger 3 4 5 6 7 8 9 10 11 12 13 Financial Analyst System Analyst Administration Manager Disbursement Analyst Project Manager-I Project Manager-II Assistant Project Manager Superintendent Senior Assistant Junior Assistant / Data Entry Operator Computer Programmer Out sourcing** Deputation * Outsourcing ** Outsourcing ** Outsourcing ** Deputation* Deputation* Deputation* Deputation* Deputation* Deputation* Deputation* Outsourcing** Outsourcing** No.of posts 1 1 1 1 1 1 1 1 1 1 1 1 1 * Deputation posts carry their own scale of pay ** Remuneration for outsourcing posts is shown against the post at column No.4 288 ANNEXURE 16: IUFR FORMAT (TO BE ADDED) Annexure 16: IUFR Format (To Be Added) Approximate 4 pages 289 ANNEXURE 17: FINANCIAL MANAGEMENT AND DISBURSEMENTS Annexure 17: Financial Management and Disbursement I. Project Components and Implementing Entities 1. The nodal Implementing Entity for the project will be the Municipal Administration and Urban Development Department (MAUD), and specifically the Directorate of Municipal Administration (DMA) headed by the Commissioner and Director of Municipal Administration (CDMA) The DMA will be the nodal agency for the project, managing and coordinating the project preparation, implementation and monitoring The Municipal Strengthening Unit (MSU) under the CDMA will be responsible for the day to day implementation arrangements. The agreed implementation arrangements are as follows: a) Components A [Policy and Institutional Development Support], B [Local Capacity Enhancement], and D [Project Management Technical Assistance] : The CDMA/MSU will be implement all these components and will be responsible for complying with all the financial management requirements in respect of these components, including the GoAP and Bank reporting requirements. The CDMA will receive funds through a budget allocation under the MAUD, as per regular financial and fund flow procedures of the GoAP, and will maintain accounts, procure and receive goods and services under this component. b) Component C [Urban Infrastructure Investment]: This component will be funded through the AP Urban Infrastructure Fund (APUIF), which is a Trust registered under the Indian Trust Act. The APUIF is an intermediate entity which will receive funds from the CDMA, and will fund the sub-projects at the ULB level by providing sub-loans and capital grants to them. II. Detailed functions and responsibilities of implementing entities: 2. CDMA/MSU (Components A, B, D): The CDMA/ MSU will be responsible for implementation and monitoring of Components A, B and D of the project. The GoAP finance department will release funds to the PD account of the CDMA in accordance with regular financial and fund flow procedures of the GoAP. These have been described in Government Order (GO) No 288 dt 21-4 2009 of the GoAP which details out the Implementation and fund flow arrangements for the AP Urban Project (APDMP). The PD account will be operated in accordance with the regular rules and procedures of the GoAP in respect of the PD accounts in the state, including the executive instructions/ GOs issued by the GoAP from time to time, and will be subject to the regular oversight mechanisms of the state government. In particular, the PD account will be subject to the provisions of the GO No 43 of April 2000 and GO No 113 of May 2007. The CDMA/MSU will itself make payments for expenditures related to these components and will be responsible for collecting and consolidating expenditure information in respect of project components and sub-components and preparing the Interim Un-audited Financial Reports (IUFRs) for seeking reimbursement. The CDMA/ MSU will follow regular GoAP procedures prescribed by the finance department and treasury, in respect of approvals, expenditure sanctions and bill payments, for these components. 3. CDMA/MSU will also confirm the eligibility of ULBs to participate in the project, based on agreed eligibility criteria as indicated earlier in the OM and also reflected in Para 7 on ULBs. CDMA/MSU will appraise sub-project proposals received from the eligible ULBs, and accord approval to the APUIF for their financing (indicating the grant/loan mix). During subproject implementation, the CDMA/MSU will be responsible for monitoring the implementation of the sub-projects, 290 verification of assets created, financial reporting of "actual expenditure" incurred at the ULB level, and for monitoring the recovery of the loans (the loans and the recoveries will be reflected in the financial statements of the APUIF). 4. APUIF (Component C): The APUIF will be the Implementing Agency for the largest component of the project, Urban Infrastructure Investment (with an allocation of nearly 85% of the loan). Funds under this component will be transferred from the Personal Deposit (PD) account of the CDMA to the designated bank account of APUIF, which will extend sub-loans and sub-grants to the Urban Local Bodies subject to GoAP’s treasury rules, procedures and limitations. The Project fund shall not be kept idle in the bank account of APUIF, and CDMA shall transfer the funds to APUIF only when APUIF is in turn ready to transfer them to respective ULBs immediately thereafter. The rules and procedures with regard to the operation of the bank account of APUIF shall be documented in this Operations Manual, and will also describe the necessary oversight requirements. 5. The APUIF is a Trust under the Indian Trust Act, and is not a Government company that is regulated under the Companies Act and is under the supplementary audit of the CAG. In order to strengthen governance and accountability, the APUIF has agreed to adopt reporting and disclosure norms and prudential guidelines as prescribed by the Reserve Bank of India (RBI) for Non- Banking Finance Companies (NBFCs). APUIFs adoption of the NBFC norms as prescribed by the RBI will strengthen the Governance and Accountability environment under which the project funds would flow, and will help provide an enhanced level of oversight and disclosure in respect of APUIF and its operations, and on the usage of project funds. The NBFC requirements that the APUIF will adopt are additional disclosures in the Notes and Statement of Accounting Policies statement accompanying the financial statements. These relate to income recognition, income from investments and accounting for them, need for policy on demand/ call loans, asset classification, provisioning requirements and norms relating to infrastructure loans, and constitution of an audit committee. The APUIF will also make disclosures in the Balance Sheet relating to bad and doubtful debts as well as the provisions for depreciation in investments. These requirements have been reflected in the GO No 288 on the project. The Board of Trustees of the APUIF shall pass a resolution adopting the above NBFC norms by ……………(dated covenant). 6. APUFIDC: APUFIDC is a state level entity set up by the GoAP to foster urban development and its main areas of focus are Public-Private Partnerships (PPPs) and urban financing, including access by ULBs to market based finance. APUFIDC is currently in significant arrears in respect of accounts and audits, and compliance with statutory requirements. In view of this, it is not involved in the Bank project either financially or operationally, nor will funds flow through it, but will play an advisory role and provide technical support to the project. 7. ULBs: The overall eligibility criteria for the ULBs to participate in the Bank project have been agreed with the GoAP and documented in the PAD and the OM. A key FM eligibility criteria for ULBs to receive project funds is the availability of audited financial statements of the immediately preceding year (2007-08 as of now), with no significant unresolved audit issues of the earlier years. The compliance of the said ULB with these criteria will be certified by the CDMA before the ULB is eligible to receive project funds. An FM assessment of ULBs was conducted by requesting ULBs expected to participate in the first stage of the project to respond to a questionnaire. It was seen that most of the ULBs were in arrears of their audits for periods ranging from 1-3 years and more. It was also seen that most of the ULBs had varying levels of capacity to account for and report on Bank funds, and will require a lot of capacity building as part of the project. 291 III. Funds Flow, Disbursement and Retroactive financing 8. GoI will open a Designated Account (DA) in Reserve Bank of India (RBI), operated by the CAAA, to receive disbursements from the Bank. The Bank will deposit an initial advance (amount to be agreed at negotiations) into the DA. Reimbursements to the DA will be the amounts of actual expenditures incurred by the project, as reflected in the quarterly IUFRs. The “actual expenditures” are defined as the expenditures actually incurred under the various categories as reflected in the eligible expenditure categories table in the Loan Agreement. Advances to implementing entities or any transfers from the CDMA to sub-implementing entities will not constitute “actual expenditure” for the purposes of disbursement. The “Actual Expenditure” incurred on different components will be certified by the Internal Auditors each quarter before they are recorded in the IUFRs. The entire fund requirement for the project, including counterpart contribution, will be budgeted by the GoAP as a single annual budget line time item in the Demand for Grants of MAUD, and released to the Department through the mechanism of the state budget. This allocation will cover the fund requirements of all the project components and will be based on the annual work plans prepared by the Implementing Entities. 9. Funds for project components A, B, and D will be released by the MAUD department to the PD account of the CDMA. The GoAP finance department will release funds to the PD account of the CDMA in accordance with regular financial and fund flow procedures of the GoAP. These have been described in Government Order (GO) No 288 dt 21-4 2009 of the GoAP which details out the Implementation and fund flow arrangements for the AP Urban Project (APDMP). The PD account will be operated in accordance with the regular rules and procedures of the GoAP in respect of the PD accounts in the state, including the executive instructions/ GOs issued by the GoAP from time to time, and will be subject to the regular oversight mechanisms of the state government. In particular, the PD account will be subject to the provisions of the applicable GO and revisions issued from time to time.. The CDMA/MSU will itself make payments for expenditures related to these components and will be responsible for collecting and consolidating expenditure information in respect of project components and sub-components and preparing the Interim Un-audited Financial Reports (IUFRs) for seeking reimbursement. The CDMA/ MSU will follow regular GoAP procedures prescribed by the finance department and treasury, in respect of approvals, expenditure sanctions and bill payments, for these components. Funds for project component C will be released from the PD account of the CDMA to the commercial Bank account of the APUIF, as designated by the GoAP. The Project fund shall not be kept idle in the bank account of APUIF, and CDMA shall transfer the funds to APUIF only when APUIF is in turn ready to transfer them to respective ULBs immediately thereafter. The rules and procedures with regard to the operation of the bank account of APUIF shall be documented in this Operations Manual, and will also describe the necessary oversight requirements. Financial management and fund flow:10. The C&DMA is the principal implementing agency of Andhra Pradesh Municipal Development Project. CDMA shall send Annual Budget Estimates for budgeting based on the requirement of various components of the project to Finance Department through MA &UD Department. The Finance Department shall release the funds on quarterly basis upon submission of progress report on the both fronts i.e., Physical and Financial and utilization certificates obtained from the concerned implementing agencies. The MA&UD Department shall issue an administrative sanction Order. The Director of Treasuries and Accounts, A.P., Hyderabad shall issue an authorization for the amounts 292 sanctioned by the Government. The CDMA shall prefer a bill to the Pay &Accounts Officer, Hyderabad for issuance of a Letter of Credit. The Pay and Accounts Officer, Hyderabad shall issue a LoC for adjustment of these amounts in the PD Account of CDMA and the send the copies of LoC to the Treasury Bank, the DTO, Hyderabad(Urban) and to the o/o CDMA. The APUIF shall furnish the requirement of funds to Municipal Strengthening Unit(MSU) based on their readiness to transfer the funds to ULBs. Similarly, the other Implementing Agencies shall furnish their immediate requirement of funds to MSU. The drawing & Disbursing Officer in the Office of the CDMA shall draw and disburse funds with orders of the CDMA based on the requirement furnished by the MSU to APUIF and other Implementing Agencies through cheques. Further, reconciliation of receipts and payments shall be done once every month with Treasury Bank and Dist. Treasury Office, Hyderabad (Urban). Funds under the Urban Infrastructure component of the project shall be transferred from the PD A/c of C&DMA to the bank account of APUIF in terms of the orders issued in G.O.Ms.No.288 MA, dt.21.04.2009 of MA & UD Department and in accordance with instructions issued in G.O. Ms.No. 43, dt.22.04.2000 and G.O.Ms.No. 113, dt.10.05.2007 of Finance (W&M) Departmenet. APUIF will extend sub loans and sub grants to the local bodies subject to following the Treasury rules, procedures and limitations of Government of Andhra Pradesh. The funds shall not be kept idle in the bank account of APUIF. C&DMA shall transfer the funds to APUIF only when APUIF is in turn ready to transfer them to the respective ULBs immediately thereafter. 11. Further the funds relating to the other three components of the project namely the State Level Policy Development, Capacity Enhancement and Project Management shall also be transferred from the PD A/c of C&DMA to the bank accounts of the implementing agencies strictly in accordance with the existing financial rules and procedures of Government of Andhra Pradesh in terms of G.O.Ms.No.43, dated 22.04.2000 and G.O.Ms.No.113, dated 10.05.2007 of Finance (Ways & Means) Department and the Government Orders issued from time to time on this subject. The MSU shall recommend for release of funds to the other implementing agencies viz. MEMPA, DTCP and including MSU as and when required based on the Progress Report both physical and financial and also Utilization Certificate furnished by the concerned implementing agencies for the funds which were released earlier. 12. The criteria for release of APMDP funds to the ULBs is the Memorandum of Agreement between MSU and the participating ULB in respect of implementation of Reforms Action Plan and based on the progress on both fronts of Physical and Financial and subject to submission Utilization Certificate with voucher-wise details. The process of release of funds is as described below: 1. The MSU shall recommend for release of first installment upon signing of Memorandum of Agreement. 2. The MSU shall recommend for release of second, third and final installments upon submission of satisfactory progress report indicating the progress achieved as per the time frame agreed and also submission Utilization Certificate with voucher wise details on each item of expenditure. 3. The MSU or any other institution nominated by MSU shall undertake site visit to progress achieved for the agreed Reforms Action Plan in designated representatives periodically. 4. As part of the progress report, the ULB submit a quarterly report of the progress achieved for the agreed Reforms Action Plan to the MSU. In case the ULB fails to submit such report it will be recommended to withhold further installments of loan until such submission. 293 5. The ULB shall submit a complete report regarding outcome of the AP Municipal Development Project on completion of the project to the MSU. 13. The CDMA/MSU will be responsible for compiling the quarterly figures of “actual expenditure” for all the project components, prepare quarterly IUFRs and send these to the Bank for disbursement. These IUFRs will be certified by the CDMA, the Project Director and the Financial Advisor (FA) for the project. The MSU will receive the expenditure information on Component B from the APUIF and consolidate it with the overall project expenditure information received for other components. 14. Retroactive financing as agreed will be provided for expenditures, incurred after a specific date, on contracts which follow Bank procurement guidelines and have maintained component wise and category wise records of expenditure incurred. Retroactive financing of all expenditure, including sub-projects selected for Bank financing, would be based on a separate, stand-alone, audited IUFR which will report details of expenditures seeking to be reimbursed on contracts procured as per the Bank’s Procurement Guidelines. Under retroactive financing, the amounts sought for IBRD financing should correspond with disbursement by the project on the identified contracts. VI. Accounting and Financial Reporting 15. The CDMA/MSU will maintain project accounts on a cash basis for the components that it will implement. A separate account code will be created for the project in the department’s overall accounting system. An operations process note will be prepared by the Finance Officer of the CDMA. This note will detail the applicable accounting and financial policies and procedures to enable data to be captured and classified by expenditure center, project sub-components and disbursement categories, in the prescribed accounting formats of the department. Standard books of accounts (cash and bank books, journal, ledgers etc) will be maintained by the CDMA. Records of assets created under the project will be separately maintained and will be subject to verification by internal audit. The CDMA/ MSU will be responsible for preparation of IUFRs reflecting the “Actual expenditures” under each the project components and sub-components, as per the format agreed with the Bank. Actual expenditures for components A, B and D are defined as moneys actually spent on various project components and sub-components, as evidenced by payment vouchers, and will not include advances of any kind made by the CDMA or the MSU to any entity, for any purpose. The actual expenditures as reflected in the IUFRs will be the basis of disbursement of Bank funds to the GOI. The IUFRs for the project will be submitted to the Bank within 45 days at the end of the each quarter. 16. The eligible expenditure under Component C (Urban Infrastructure Investment) will be the actual amounts released by APUIF each quarter to the ULBs as loans/ grants for sub-projects. The financial statements of the APUIF will record the grants and loans provided to the ULBs for subprojects, and will be prepared on an accrual basis. Accounting policies to be followed and disclosures made will be in accordance with those mandated by the Indian Accounting Standards as applicable to companies (since there are no relevant separate standards for Trusts). The APUIF will prepare timely financial statements and get these audited by an auditor acceptable to the Bank. 294 17. Accounting for sub-projects will be done in the ULB’s overall accounts. ULB accounts shall be prepared on cash basis and these accounts will be audited by the Director of State Audit. A separate record of assets created under the sub projects will be maintained at the ULBs, and these will be physically verified by joint teams from the MSU and the APUIF. Although sub loan accounting will be done by the ULBs’ own accountants, it will be the responsibility of the Finance Manager at the APUIF and the Financial Advisor at the MSU/ CDMA to ensure that correct and up to date financial records are maintained. VII. Staffing 18. CDMA/MSU will have the responsibility for the overall reporting, disbursement and financial management arrangements on the project. Day to day operations will be the responsibility of the Project Director who will be appointed by the state government. The finance function of the Project will be headed by a senior officer, preferably on secondment from the GoAP finance department (Directorate of Treasuries or Directorate of Works Accounts) who has prior experience in the finance function in any “works” department of the GoAP. The officer will be supported by appropriate experienced staff and will be responsible for ensuring that actual expenditure information collected and consolidated in respect of all the project components/ sub-components, and quarterly IUFRs are prepared and sent to the Bank for disbursement. The officer will also be responsible for coordinating the internal and statutory audit activity under the project and maintaining oversight over the LFAs audit of the participating ULBs. The finance officer will be in place by negotiations. 19. APUIF will have an experienced professional accountant as Finance Manager to be responsible for all the financial management activities of APUIF, including compliance with statutory and reporting requirements (including NBFC norms). The Finance Manager will oversee maintenance of accounts, preparation of financial statements, and coordinating the annual audit of the APUIF. S/he will be supported by appropriate experienced staff. It will also be the responsibility of the Finance Manager to ensure that the ULBs follow appropriate accounting procedures with respect to the sub loans and grants, that all flows and balances relating to these funds are recorded suitably in their books of accounts, that ULBs submit quarterly expenditure reports, and that all ULB external audits (by the LFA) are completed in a timely manner. S/he will also review all the ULB audit reports and bring to the notice of the Project Director and the CDMA the observations and issues of significance, especially those related to the sub-projects being funded by the Bank, for their action. APUIF will prepare a consolidated statement of completion of audits and of significant observations in respect of all the ULBs participating in the project, and send a report to the Bank at the end of each half-year. 20. ULB. A trained accountant will be in place in each of the sub-loan receiving ULBs to ensure proper accounting and control for project money throughout the duration of the project. VIII. Internal Audit and Control 21. A reputed and experienced CA firm or firms will be appointed as the Internal Auditor for the entire project and they will be responsible for concurrent audit of the project, as per TORs agreed with the Bank. The internal auditor will certify each quarter, the “actual expenditure” incurred by the CDMA and the APUIF on all the Components, and this information will feed into the IUFRs. As part of their duties, the internal auditors will also review the sub-loan portfolio of the APUIF and 295 examine if the grants and lending to the ULBs comply with relevant agreements signed between the APUIF and the ULB. The auditors will also confirm that the relevant GoAP rules and procedures and applicable GOs are followed in respect of operation of all the PD accounts and Bank accounts maintained under the project. They will also verify that all the eligibility criteria for selection of ULBs have been fully complied with. In each audit cycle the firm will also select and visit a sample of ULBs and verify that the ULBs are utilizing the moneys as per the conditions of the sub-loan and -grant agreements, and for the purposes for which the funding is given, and conduct a physical verification of assets created through the sub-loans and Grants. They will also review and verify that the expenditures incurred under other components and sub-components of the project are in accordance with the internal financial rules and procedures of GoAP (including various finance codes of the GoAP). IX. Statutory (External) Audit 22. The CAG of India through the office of the Accountant General (Audit) AP will be the statutory auditor for the project. The CAG’s office will conduct an annual audit of the operations of the Project. The statutory audit of the project financial statements will be conducted in accordance with the generic TORs that have been agreed between the Bank and the Government of India (Ministry of Finance). The form of project financial statements will be prepared by the project in consultation with the Bank, and will be agreed at the negotiations. TORs for the audit have been shared with CDMA, who will seek the agreement of the CAG on these TORs. APUIF will be audited by a CA firm acceptable to the Bank, while the ULBs will be audited by the State Audit Department, as required under their Act. The Bank will review the CAG’s audit report of the project financial statements and the audit report of the APUIF. Audit reports of the individual ULBs receiving loans and grants under the project will be reviewed by the Project Director and the CDMA. The Bank will be informed of any significant audit observations by the ULB audits. The following audit reports will be received by the Bank within six months from the close of the financial year (due date for receipt of audit reports is 30 Sept of the year) and monitored in ARCS: Implementing entity APUIF Audit Report Audited by Entity audit report (with detailed Schedule of usage of Project funds as sub-loans and Grants to ULBs under Component C) Firm of Chartered Accountants acceptable to the Bank CDMA Audit of Project Financial Statements for the APMDP DEA/ GOI Special Account 296 CAG/ Accountant General, AP CAG of India ANNEXURE 18: FORMAT OF PROGRESS REPORT ANNEXURE 18: Format Of Progress Report Format of monthly Progress Report from ULB to CDMA / MSU MONTHLY PROGRES REPORT ON Infrastructure Improvement Plan FOR THE MONTH OF>>>> Name of the ULB: Amount Rs.in Crores Date of submition: Sl.No. 1 Work Name of Package Descriptio the No. n (name of awarded package in Contracto procureme r nt plan) 2 3 4 SC approved cost 5 Value of contract awarded (actual value) Year of Planned sanction completion time 6 7 Share of WB 8 297 GoAP 9 Amount Released by APUIF ULB 10 WB 11 GoAP 12 Total % physical % Value Payment progress of Work made by completed ULB Balance left with ULB 13 14 16 15 Monthly progress report on implementation of Municipal Reform Action Plan (MRAP) Name of the ULB:Sl. No. 1 Name of the Reform 2 Commitment as per the MoA for the current financial year 3 298 Progress made during the month 4 Cumulative progress made after the end of the month 5 Monthly progress report on implementation of Capacity Enhancement Action Plan (CEAP) Name of the ULB:Sl. No. 1 Name of the Capacity enhancement initiative 2 Commitment as per the MoA for the current financial year Progress made during the month Cumulative progress made after the end of the month 3 4 5 299 ANNEXURE-19 HR POLICY: REMUNERATIONS AND ALLOWANCES TO THE PROJECT PERSONNEL <><><><> I. REMUNERATIONS TO OUTSOURCED PERSONNEL The following remunerations shall be applicable to the project personnel employed in the World Bank aided APMDP depending on the skill level for the Management Information Systems, Technical Assistances and Consultancies, Capacity Building and Training Programmes, etc. (a) MIS / GIS and other consultants on contract: The following maximum monthly remunerations would be applicable to the outsourced personnel on Individual Contract depending on T&M basis as per the government orders for engaging outsourcing services in the IT Department of Government of AP in GO Ms. No. 23 IT & C Department, dated 02.11.2007 (copy appended). This remuneration shall be limited to the rates determined through the competitive World Bank procurement methods: (1) Team Members (Skill Level of 1-2 years) : (2) Module Leaders (Skill Level of 3-5 years) : (3) Project Managers (Skill Level of 6-10 years): Rs. 75,000/- (per person/month) Rs. 1,00,000/- (per person/month) Rs. 1,50,000/- (per person/month) (b) Permanent Faculty engaged in the AP Urban Academy / SIUM: The institute like other premier institutes of the state and the country like CGG, MCR-HRD, etc. would follow a flexible salary structure commensurate with the qualification and experience of the faculty desired and in order to attract the best talent. The compensations / remunerations of the faculty shall be minimum on UGC pay scales or as otherwise permitted by the Governing Council of the Institute in order to compete with the other institutes and private sector. The salary structure would be determined by the Governing Council to maintain a competitive edge in terms of highly qualified and talented manpower. (b) Outsourced and other Contractual Employees: GO Rt. No. 336 MA, MA & UD (UBS) Department, dated 01-03-2009, has extended the HR Policy as adopted in SERP (World Bank Aided) to personnel engaged in MEPMA. For uniformity of remunerations to the outsourced employees with other World Bank projects and departments within MA&UD employing outsourced employees on the project basis, the following payment structure to the sanctioned outsourced employees in APMDP at par with SERP would be applicable. For Municipal Accountantant and Financial Assistants, the compensation as existed in DFID aided APUSP would be applicable as following depending upon experience: 300 Sl. No. Designation 1. Municipal Accountant and Financial Assistants (MAFA) 2. Personal / Administrative Assistant / Steno / System Administrator / Training assistants 3. Computer Assistants / Data Entry Operators / Draughtsmen / Receptionist 4. Drivers / Machine Operators 5. Attender / Office Assistant / Watchman / Gardener - Sweeper Experience 0-2 years 2-3 years 3-5 years Above 5 years 0-2 years 2-3 years 3-5 years Above 5 years 0-2 years 2-3 years 3-5 years Above 5 years 0-2 years 2-3 years 3-5 years Above 5 years 0-2 years 2-3 years 3-5 years Above 5 years Remuneration (per month) Rs. 9,500/Rs. 10,750/Rs. 12,100/Rs. 14,500/Rs. 7,750/Rs. 8,000/Rs. 8,250/Rs. 8,500/Rs. 6,150/Rs. 6,400/Rs. 6,650/Rs. 6,900/Rs. 5,500/Rs. 5,750/Rs. 6,000/Rs. 6,250/Rs. 4,900/Rs. 5,150/Rs. 5,400/Rs. 5,650/- As in SERP, an Annual Grade Increment @ 6 % on above remuneration shall be given to outsourced employees who are working in APMDP at any office. As in SERP, all outsourced employees shall be eligible to avail 12 Casual Leaves, Maternity Leave (120 days up to two surviving children), Paternity Leave (15 days up to two surviving children). Upon completion of one year of employment, 18 annual leaves shall be added to the credit of the outsourced employee. The manpower agency firms who supply man-power would be required to extend appropriate Provident Fund facility as per the Labour Contract Laws in vogue II. ALLOWANCES The policies towards the allowances followed by the National Institute of Smart Governance funded by the Ministry of Information Technology to maintain the required HR policies and standards which are also followed by GoAP HRD institutes like CGG and other externally aided projects like of SERP are necessary to be followed herein in order to compete and attract the best personnel and services to meet the project objectives of the externally aided projects. The following allowances shall be applicable to personnel specifically and exclusively deputed, engaged or outsourced for the APMDP project including for the AP Urban Academy / State Institute of Urban Management funded from the project and including members of its state level committees as per the GO Ms. No. 288, MA&UD (UBS) Deptt., dated 21 st April, 2009: 301 1. Basic Principles 2. Official travel is not a source of profit Reasonable conditions of travel and stay Generally standard terms for all categories of officers Easy to understand and administer Scope for exercise of financial prudence by officer to reduce expenditure Use of services of approved travel agent to get best terms Combination of best practices in Government and in private sector Definition of Categories 3. Category 1 – Members of Steering Committee of the project including DG of the Academy Category 2 – Project related District Level Officers at MSU / ULBs / Implementing Agencies and Professors of the Academy Category 3 – Other project related government officers in MSU / ULBs / Implementing Agencies / other permanent or government staff at Urban Academy / Consultants and Individual Consultants on contract Category 4 – Other Contractual and outsourced staff of the project Mode of Travel on Tours 4. Domestic Bus travel: AC / Non-AC Bus travel for all categories as per prior sanction. Domestic Car travel: AC Taxi for category 1 and 2 and non-AC for Category 3. Domestic Rail travel: AC First Class for Category 1 and Category-2; AC 2-tier / 3-tier for Category -3; Non-AC Sleeper 3-tier for Category-4. International / Domestic Air travel: Business class for Category-1; Economy class for Category-2; Economy class with specific prior sanction for other categories. Lodging Charges Abroad: As in CGG, SERP maximum US $150/- per night for Category-1 (in case travel with Ministers/Secretaries or for conferences actual costs would be permissible); US $125/- for Category - II; US $ 100 for all other categories. India: As per the permitted actuals as per the World Bank procurement methods. Exceptions: Waiver of the above conditions with regard to eligibility in travel and lodging and in view of any special circumstances (like urgency and non-availability in the eligible class) shall rest with the sanctioning authority. 5. Subsistence Allowances India: At par with the rates in APUSP and personnel engaged in other Externally Aided Projects the following subsistence allowance shall be applicable for each completed hour at the place of temporary official duty in India (in USD / equivalent). 302 Aplicability of subsistency Allowance for Travel in India (per hour) Category-I Category-II Category-III Category-IV 6. Overseas: US $2/- for each completed hour at place of temporary official duty (All Categories) International Travel Documentation (Charges which are reimbursable) 7. Cost of passport services; Visa related charges; Cost of photographs/immunisation; Cost of medical insurance for hospitalisation abroad, and, Other such necessary expenses as permitted. Advances: 8. Advance of anticipated expenditure as approved by the Sanctioning Authority. Entertainment Allowance 9. At actuals for Category-I (Production of bills mandatory) City Compensatory Allowance 10. As in SERP, City Compensatory Allowance (CCA) shall be paid to the employees working in MSU office at Hyderabad over and above the remunerations @ Rs. 1250/- (Rupees One Thousand Two hundred and Fifty only) per month. Insurance Allowance 11. per hr. (in USD) $ 1.00 $ 0.75 $ 0.50 $ 0.25 Medical and Personal Accident Insurance shall be provided at par with SERP employees to all categories. Local Transport Policy: Vehicle Allotment As in CGG, SERP, etc., the project personnel are required to hire vehicles to be used for project purposes: 1. Category-I A/C vehicle, (Tata/ Mahindra/ Toyota or any other permitted vehicle. In view of early morning and late night work an additional vehicle would to be reserved. Log book to be maintained by PA) 303 2. Category-II A/C vehicle, (Tata/ Mahindra or any other permitted vehicle.) 3. Category-III and IV For late working hours (beyond 8 PM) based on certifications by the concerned reporting officer, eligibility of reimbursement of actual auto expenditure. Two pool vehicles shall be under the control of Disbursement Analyst in MSU and Academy for other category and two public transport vehicles on hire will be under the control of Capacity Enhancement Specialist for trainings. Log book to be maintained by the concerned assistants. Note: All travelling and lodging expenses will be reimbursed only against the paid bills/receipts from the shortlisted support agencies by EOI as per the World Bank procurement procedures. III. S.No. 1 2 3 4 5 6 7 IV. SANCTIONING AUTHORITY: For all levels, the following shall be the sanctioning authorities: LEVEL C&DMA, HODs, DG All other personnel of Academy / SIUM Project Director All other personnel of MSU All other project personnel of implementing department ULB Commissioner All project personnel at ULB MODE OF SANCTION Government DG CDMA Project Director Concerned HOD CDMA ULB Commissioner PROCEDURAL DETAILS: All the Officers and staff should invariably take necessary prior written sanction for the tour in order to claim the above allowances. The concerned sanctioning authority shall detail the necessary internal procedural rules by designating responsible officers within their units for the internal scrutiny and accounts. 304 GOVERNMENT OF ANDHRA PRADESH Abstract AP Portal Project- Updated Guidelines to departments for developing G2C, G2G and G2B applications and services and hosting them on Internet - Application Development, Maintenance, Implementation & Transaction/Subscription based charges on AP Online Orders - Issued. Information Technology & Communications Department E-Governance G.O.Ms.No.23 Dated: 2.11.2007 Read the following:- 1. G.O.Ms. No. 19 of IT&C Department, dated: 03.07.2004 2. G.O.Ms. No. 21 of IT&C Department, dated: 28.07.2005 3. G.O.Ms. No. 14 of IT&C Department, dated: 06.07.2006 ORDER: 1. Government of Andhra Pradesh wishes to improve the efficiency and productivity of operations of all departments in addition to being citizen centric. APOnline Ltd., a Joint Venture between Government of Andhra Pradesh and Tata Consultancy Services limited, is being revitalized to be made relevant to the growing IT needs of all departments. APOnline Ltd., also operates and maintains the official portal of the Government of Andhra Pradesh (http://www.aponline.gov.in) with a view to provide an electronic gateway to various services offered by the Government. The GO read above offers detailed guidelines for the development of application, services and websites and their hosting by APOnline. 2. With a view to enable Government departments to utilize the services of APONLINE LIMITED, in a speedy and convenient manner, the following guidelines are prescribed in supersession of the guidelines issued in the GO Ms No.19 read above. These guidelines willl come into force with effect from the date of issue and will be valid for a period of one year. The departments of the Government of Andhra Pradesh are permitted to entrust the work relating to development, implementation and maintenance of application software, and related activities to the APOnline Ltd without following any other selection process subject to the payment of the following charges. Alternatively, the departments are not restricted from pursuing a competitive bidding process for the procurement of these services. Rates for various services to be rendered by the ApOnline Portal are as follows: a. Charges for Development of Software Applications : S. No 1 Category of Application Cost (in Rs) Management Information System (Simple) 75,000 Functionality These applications include various simple reporting systems, which are reviewed at the level of Secretaries, HOD, Collector and Department Officers. The application shall have features to enable the following: 305 2 Management Information System (Complex) including online payment features. 3 Online application for Registration, Certificates, Admissions, Licenses, Benefits. (Applicable only wherever service charges are not collected from the citizens) 4 Application Development, Maintenance & Support (a) One data entry screen at the field levels like mandal & district (b) Three reports each at district & state levels (detailed, summary & exception reports) with options to view these reports mandal wise and district wise for any prescribed period. Examples: Monthly reports, quarterly reports etc. Which are reviewed by Secretaries/ HoD / Collector and Daily reports on revenue receipts by revenue earning departments etc. 1,50,000 These applications include various complex reporting systems which are reviewed at the level of Secretaries, HoD, Collector, District officers. The application shall have the features to enable the following:(a) Three data entry screens at the field levels like Mandal & District (b) Automatic consolidation at all levels (c) Four reports including drill-down and graphical options for each report as needed at district and state levels (detailed, summary and exception reports) for a specified period. Examples: MIS for Single Window Clearance, File Disposal System and Performance Monitoring System etc. 2,00,000 This application enables provision of interactive services through portal: (a) It enables the citizen to file an application seeking a registration or a certificate from a statutory authority like for caste/ birth certificate of applying for study centres, for scholarships by students applying for a license and applying for benefits under various Govt scheme etc. (b) Provides online acknowledgement (c) Enables tracking of the status of the application (d) Enables verification/printing of the certificate as and when the same has been issued by the statutory authority • For Team Pricing is on a T&M basis. Transition to a Fixed members at a Price skill level 1-2 Model can be adopted after a detailed study of years of of Exp- the Rs.75,000 per application. It is recommended that person month. Maintenance & Support work be entrusted 306 For Module Leaders & Architects at a skill level 3-5 years of of ExpRs.1,00,000 per person month. • For Project Leaders with 3-5 years of Exp – Rs.1,25,000 per person month. • For Project Managers with 6-10 years of experience Rs.1,50,000 per person month. initially on a T&M basis for a period of 6 months with an option to move to Fixed Price later. Price for a Fixed Price Model will be submitted separately by APOnline within a week after the completion of the study. Notes 1. This model can be employed by desirous departments for evaluating and reengineering (if required) their existing applications. 2. The composition of the Project Team will be decided by the concerned department in mutual agreement with APOnline. 3. In the event of the Project Team members being shared across various projects of the same department or different departments; the related costs will be apportioned accordingly. b. Charges for specialized skills, BPO & Call Center applications Government Departments can employ services of APOnline for areas requiring niche skills such as Data ware housing, SAP or to set up BPO and Call Centers. Prices can be mutually agreed up on between APOnline and the department for these services. c. Development, Hosting, Maintenance, Application Hosting and Data transfer charges of Website: (i) 1. The charges for development for a website consisting of up to 30 pages will be Rs.30,000/2. The charges for development of every additional web page will be Rs.300/- (ii). Many of the departments run their websites with different ISPs including some outside the country depending on convenience. It is felt desirable that the hosting of websites can be promoted through the framework of APOnline Portal by prescribing a uniform rate of hosting, as described below: Storage Space Upto 200 MB Upto 500 MB Upto 1 GB Upto 5 GB Upto 10 GB Upto 20 GB Annual Charges (in Rs.) 20,000/30,000/33,000/66,000/1,15,000/2,00,000/- For additional space and the data transfer, the following charges are applicable. Annual charge for additional space of 1GB is Rs.5,000 Minimum unit for charges will be a month 307 iii. For the application, which require significantly higher bandwidth, during a short period of less than 1 month, for example Exam results, Hall tickets, etc., charges would be levied as under: Storage Space Upto 200 MB Upto 500 MB Upto 1 GB Upto 5 GB Upto 10 GB Upto 20 GB Annual Charges (in Rs.) 30,000/40,000/43,000/76,000/1,25,000/2,10,000/- The above hosting charges include: I. II. III. IV. V. VI. Storage and setup charges, which implies that necessary memory space will be made available and the site should be ready for viewing on the Internet. Maintenance and Support of the website. Storage and setup charges, which implies that necessary memory space will be made available and the site should be ready for viewing on the Internet. Periodic updation of website as necessary. Regular reminder of URL registration / renewal to the Department. Any Data base should be supported. Conversion should be done by Aponline Ltd only d. Advertisements, Notifications, Notices, and Tenders: The departments are advised to place their respective advertisements, notifications, notices and tenders on APOnline Portal. The above will be hosted on the APOnline Portal for a period not exceeding one calendar month. e. Revenue sharing between APONLINE Limited, government Departments and other stakeholders: (a). There shall be a sharing of revenue arising out of any web- based application of any department or agency hosted on APOnline - in such a proporation which will reflect relative efforts involved in providing the services to the citizen, which could include a whole spectrum starting with backend computerization activity, middleware, hosting and front end services. The actual manner in which the revenue has to be shared will be decided through a SLA that will take into account the interests of the following stakeholders. 1. 2. 3. 4. 5. The department or agency that develops and implements the backend The agency that develops and maintains the middleware the Portal Joint Venture The owner of delivery mechanism namely kiosk or service center The payment gateway, if any (b). The above revenue sharing shall be worked out department – wise and service- wise, to be eventually incorporated into a SLA, after approval by a specially empowered committee to be appointed by the Government of Andhra Pradesh. f. Home Delivery Service on AP online: AP Online franchisees may offer services at the doorstep of the Citizen of Andhra Pradesh with a device that can connect in time to APOnline servers. For this service, the franchisee can charge Rs.5/- per transaction to be borne by citizen. 308 3. Payments to APONLINE LIMITED: a) GOAP Departments will forward all payments to APONLINE Limited towards their subscription, transaction, hosting and development charges by AP Online Limited. b) 50% of Software development charge shall be paid to the APONLINE Ltd. in advance. The remaining 50% of the amount shall be paid after successful implementation and stabilization of the application/service. For Maintenance & Support Projects on a T&M basis, the invoice will be presented on a monthly basis. For Maintenance & Support Projects on a Fixed Price Model, payment terms can be arrived through mutual agreement with the respective department. c) All payments shall be made by DD/Cheque in favor of APONLINE Limited, payable at Hyderabad. Within 15 days of presenting the invoice. d) Principal Secretary, IT&C will facilitate with the respective departments for any outstandings that are due to APOnline for invoices that are pending for over 3 months. All prices are exclusive of taxes. e) It is for the concerned department to workout specific time frame for execution of works with the APOnline. In case of any deficiency of service, the concerned department can withhold a part payment due to APOnline in consultation with IT&C Department. 4. Responsibilities of APONLINE LIMITED: The APONLINE LTD shall be responsible for the following: a) Ensure uptime of Portal servers at a service level of 99% on a monthly basis. Thus a high availability of online services to citizens/businesses would be ensured. Preventive maintenance schedules on Portal servers and the duration of maintenance and shut downs will be intimated well in advance to GOAP and information will be made available on AP portal. b) Ensure that the sufficient bandwidth is available at the server end, so that the time taken in viewing any page is reasonable, say less than 7 seconds. If the time to download any page exceeds the above stated time, APONLINE Limited shall ensure that internet bandwidth to the website is increased, so that the time of download comes down to below 7 seconds. In case the above service level is not maintained, (i) No amount will be payable to the APONLINE Ltd. by the Department. (ii)Amounts paid to APONLINE Ltd. as advance shall be recovered. (iii)Departments will be free to migrate to any other service Provider, duly indicating reasons therefore. 309 (c). Defects/bugs in software (if any) noticed by HODs will be attended promptly and depending on the severity of defect, time norms will be set for rectification and redeployment. The table below is indicative on the service levels for rectification of defects: SL.NO Nature of Defect 1. Critical: Service delivery is impaired Important: Service delivery is affected partially and causes dissatisfaction Service likely to be affected in future 2. 3. Severity Category High Fix Time Average 2 days Low 10 days 8 Hours (d) Provide technical support to Portal users through help desk facility. The help desk will function between 9.00 AM and 6.00 PM on all working days. (e) APONLINE Limited shall be responsible for security/ upkeep of data maintained on Portal servers located in its data center. Firewall protection and usage of Intruder Detection Systems will be provided. Back-ups of data will be taken twice in a week and maintained in a protected environment. (f) Impart training to select departmental users, on on-line services. I. II. III. Initial training on Portal Services & operations to Nodal Officers. Training to departmental functionaries. Training of staff at Government department counters. 5. Ownership: The ownership of the applications, websites developed in terms of para 2 (a), (b) & (c) above, as well as the data captured/hosted on the AP Online shall rest with the concerned department. AP Online shall handover a copy of the software to the departments concerned along with source code and documentation in respect of each version. 6. Responsibilities of Departments: 1. Each department/HOD shall identify the citizen services that can be offered at Kiosks / online through APOnline and finalize the dates by which the services should be offered through APOnline. 2. Each department/HOD shall appoint an officer who will be the single point contact for APONLINE LTD. Responsibilities of the nodal officer shall be to: Facilitate/liaise with APONLINE LTD on the organization’s services to citizens Provide access to forms, data and knowledge of business processes Ensure updating of information on the Portal about the organization Provide contact details of key functionaries at State/District/Mandal level including telephone numbers, e-mail Ids, addresses 3. All departments of Secretariat/ HODs shall make an effort to migrate their applications/website/services to APOnline 310 7. Contact Details: For any system access related issues, users may contact Name APonline Help Desk Telephone 66675612 Email ID [email protected] 8. This order issues with the concurrence U.O.No.5864/128/A2/Expr.GAD.II/07; dated: 6.8.2007 of Finance Department vide their 9. A copy of the G.O is available at http://www.aponline.gov.in/ and http://www.ap-it.com/ (BY ORDER IN THE NAME OF THE GOVERNOR OF ANDHRAPRADESH) S.K. JOSHI SECRETARY TO GOVERNMENT To All Departments in the Secretariat All HODs All District Collectors M/s. APONLINE Limited, Kohinoor ePark, No1, Jubilee Layout, Hyderabad-81. Copy to: The PS to Chief Secretary The PS to Secretary, IT&C Dept. //FORWARDED BY ORDER// SECTION OFFICER 311 ANNEXURE 20 PROCUREMENT PLAN FOR CONSULTANCIES 312 Annex-20: PROCUREMENT SCHEDULE FOR CONSULTANCY SERVICES (PROPOSAL) (Ist Year 18 months 01.06.2009 to 01.12.2010) Country: INDIA Borrower: GOVERNMENT OF ANDHRA PRADESH Project: ANDHRA PRADESH URBAN REFORMS AND MUNICIPAL SERVICES PROJECT Packag e No. Description Method of Quantity Procureme (Number) nt Procure ment Authority Estimated Estimate Review Firm/ National Cost d Cost by bank Individu /Interna (RS. In (Million prior/ al tional Million USD) post short list local currency) 1 State Level Policy and Institutional Development 1.1 Study for modernization of planning QCBS Single MSU 2.50 legislation (consultancy) 1.2 Urban Finance related services a) Consultancy for FMIS QCBS Support to FMIS including QCBS integration of Suvidha 1.3 Urban Training Academy Single MSU 5.0 0.05 Post Individ ual 0.10 Post Firm Consultancy for design and planning project TOR, EOI SPN and RFP drafted Estimate Prepared & Sanctioned Appraisal Revised Actual 1.8.2009 1.8.2009 18.8.2009 8.9.2009 25.09.2009 Appraisal Revised 1.6.2009 1.6.2009 17.06.2009 7.7.2009 1.4.2010 1.4.2010 16.04.2010 1.7.2009 1.7.2009 1.7.2009 Appraisal Revised Actual Appraisal Actual Appraisal b) a) Stage Evaluation of technical proposals and submission of report to the Bank Bank's No Objection to technical evaluation report Opening of Bank's no Contract Signed Publication of Contract Procurement Monitoring No. of Consultants Bid Contract financial objection to Contract Award Completed Applied particip Qualifie premiu Planned Actual proposals and contract award ated d m financial recommendatio evaluation ns 16.10.2009 23.10.2009 - 30.10.2009 4.12.2009 11.12.2009 28.7.2009 18.8.2009 25.8.2009 - 9.09.2009 8.10.2009 13.10.2009 7.5.2010 28.5.2010 18.6.2010 25.6.2010 - 9.07.2010 7.08.2010 13.08.2010 17.07.2009 7.8.2009 28.8.2009 18.9.2009 25.9.2009 - 9.10.2009 6.11.2009 13.11.2009 1.7.2009 17.07.2009 7.8.2009 28.8.2009 18.9.2009 25.9.2009 - 9.10.2009 6.11.2009 13.11.2009 1.4.2010 1.4.2010 16.4.2010 7.5.2010 28.5.2010 18.6.2010 25.6.2010 - 9.7.2010 7.8.2010 13.8.2010 1.9.2009 1.9.2009 17.9.2009 7.10.2009 21.10.2009 28.10.2009 18.11.2009 25.11.2009 - 9.12.2009 7.1.2010 14.1.2010 1.4.2010 1.4.2010 16.4.2010 7.5.2010 21.5.10 28.5.2010 18.6.2010 25.6.2010 2.7.10 9.7.2010 7.8.2010 13.8.2010 1.10.2009 1.10.2009 16.10.2009 7.11.2009 27.11.2009 18.12.2009 26.12.2009 - 2.1.2010 6.02.2010 15.02.2010 Revised Actual Single MSU 20.0 0.40 Post Firm Single MSU 5.0 0.10 Post Firm Revised Actual 10.0 0.20 Post Firm Appraisal Appraisal QCBS Bank’s No Publication of Preparation of Approval of Issue RFP to short Receipt of Objection to SPN in UNDB and shortlist shortlist/RFP by listed consultants proposals and TOR, EOI SPN, Newspapers Bank opening technical RFP Document proposals 1.4 Studies for preparation of Urban poor program a) Consultancy for preparation of urban poor strategy QCBS Single MSU Revised Actual 1.5 Study for preparation of QCBS Single MSU Urban PPP FrameworkConsutancy Enhancement 2 Capacity 2.1 Capacity building for professionalisation of urban management and operations including related to urban poor programme. a) b) Capacity building training, implementation of CENA and studies for furhter strategy formulation Training to Urban poor programme (Community) 10.00 0.20 Post Firm Revised Actual QCBS Single MSU 15.0 0.30 Post Firm QCBS Single MSU 40.0 0.80 Prior Firm MSU 15.0 0.30 Appraisal 9.4.2010 31.7.10 Revised Actual 2.2 Technical Assistance for Institutional and Financial improvements at ULBs a) Technical QCBS Assistance to ULBs Design of ULB institutional and financial management strategy programme Single Appraisal Revised Actual Post Firm 2.3 GIS Mapping for selected ULBs and support cell at DTP 313 No. of offers rebid No. of Extensio offers n of bid with validity insuffici ent bids a) b) c) d) e) TA Studies for design of simplified land use planning process, operations manual and new act TA for GIS base maps Appraisal QCBS Single MSU 7.5 0.15 Post Firm 1.7.2009 17.7.2009 7.8.2009 Appraisal 1.4.2010 1.4.2010 Revised Actual Appraisal 1.4.2010 Revised Actual Appraisal 28.8.2009 18.9.2009 25.9.2009 - 2.10.2009 09.4.2010 16.4.2010 7.5.2010 1.4.2010 9.4.2010 16.4.2010 1.4.2010 1.4.2010 9.4.2010 1.4.2009 1.4.2009 1.7.2009 1.7.2009 6.11.2009 13.11.2009 21.5.2010 28.5.2010 18.6.2010 25.6.2010 2.7.2010 9.7.2010 31.7.2010 7.8.2010 13.8.2010 7.5.2010 21.5.2010 28.5.2010 18.6.2010 25.6.2010 2.7.2010 9.7.2010 31.7.2010 7.8.2010 13.8.2010 16.4.2010 7.5.2010 21.5.2010 28.5.2010 18.6.2010 25.6.2010 2.7.2010 9.7.2010 31.7.2010 7.8.2010 13.8.2010 16.4.2009 7.5.2010 28.5.2010 18.6.2010 25.6.2010 - 09.07.2010 7.08.2010 13.08.2010 17.7.2009 7.8.2009 28.8.2009 18.9.2009 25.9.2009 2.10.2009 9.10.2009 6.11.2009 13.11.2009 Revised Actual QCBS Single MSU 32 0.64 Prior Firm QCBS Single MSU 74.5 1.49 Prior Firm TA for preparation of Master Plan QCBS Single MSU 43.0 0.86 Prior Firm Establishment of GIS Monitoring Cell within the Department of Town Planning QCBS TA for property and utility Mapping 1.7.2009 Revised Single MSU 9.5 0.19 Post Firm Actual Appraisal Revised Actual 4 Project Management 4.1 Monitoring & Evaluation system (CDMA/ APUFIDC) a) Consultancy for design development training and implementation plan Appraisal Revised QCBS Single MSU 25.00 0.5 Prior Firm Actual 10.7.2009 21.8.2009 20.10.2009 4.2 Support to CDMA & APUFIDC for management a) b) c) Procurement of experts for Technical Audit Procurement of experts for Procurement Audit Procurement of experts for Financial Management Audit (Internal & External) 1.7.2009 17.7.2009 7.8.2009 28.8.2009 18.9.2009 25.9.2009 - 2.10.2009 6.11.2009 13.11.2009 Single MSU 5.0 0.1 Post Firm Appraisal Revised Actual 1.7.2009 QCBS 1.7.2009 17.7.2009 7.8.2009 28.8.2009 18.9.2009 25.9.2009 - 2.10.2009 6.11.2009 13.11.2009 Single MSU 5.0 0.1 Post Firm Appraisal Revised Actual 1.7.2009 QCBS Appraisal 1.7.2009 1.7.2009 17.7.2009 7.8.2009 28.8.2009 18.9.2009 25.9.2009 - 2.10.2009 6.11.2009 13.11.2009 Revised Actual QCBS Single MSU 5.0 0.10 Post Firm 4.3 Sub-project preparation and implementation support to ULBs a) Revision of DPRs Group I ULBs Palasakasibugg a, Markapur QCBS 1.6.2009 17.6.2009 7.7.2009 28.7.2009 18.8.2009 25.8.2009 - 9.9.2009 8.10.2009 13.10.2009 12.11.2009 MSU 1.5 0.03 Post Firm Appraisal Revised Actual 1.6.2009 Single Group II ULBs Guntur & Malkajgiri 1.6.2009 17.6.2009 7.7.2009 28.7.2009 18.8.2009 25.8.2009 - 9.9.2009 8.10.2009 13.10.2009 12.11.2009 Single MSU 3.0 0.06 Post Firm Appraisal Revised Actual 1.6.2009 QCBS Group III ULBs Armoor, Kurnool 1.6.2009 17.6.2009 7.7.2009 28.7.2009 18.8.2009 25.8.2009 - 9.9.2009 8.10.2009 13.10.2009 12.11.2009 Single MSU 3.0 0.06 Post Firm Appraisal Revised Actual 1.6.2009 QCBS 314 b) c) Third Party Quality Assurance Consultants (TA) Group I ULBs Palasakasibugg MSU a, Markapur & QCBS Single Guntur Group II ULBs Malkajgiri, MSU Armoor & QCBS Single Kurnool Preparation of sub project DPRS by consultants. Group I ULBs Vizianagarm, Kakinada, Manuguru Group II ULBs Ananthapur, Chittor, Badvel d) e) Group III ULBs Rajendra Nagar(DPR is ready) Group IV ULBs Nizamabad, Kothagudem, Metpalli, Bhainsa, Narayanpet, Medak, Suryapet Group V ULBs Proddatur, Adoni, Hindupur, Srikalahasti Firm 1.8.2009 0.6 Prior Firm Appraisal Revised Actual 1.8.2009 30.0 18.8.2009 8.9.2009 10.8.09 18.8.2009 8.9.2009 25.9.2010 16.10.2009 23.10.2009 - 30.10.2009 22.09.2009 20.9.2009 19.10.2009 26.10.2009 3.11.2009 09.11.2009 4.12.2009 11.12.2009 30.11.2009 7.12.2009 14.12.2009 1.7.2009 10.7.2009 17.7.2009 7.8.2009 21.8.2009 28.8.2009 18.9.2009 25.09.2009 2.10.2009 9.10.2009 30.10.2009 6.11.2009 13.11.2009 5.2.2010 MSU 30.0 0.6 Prior Firm Appraisal Revised Actual 1.7.2009 Single 1.7.2009 10.7.2009 17.7.2009 7.8.2009 21.8.2009 28.8.2009 18.9.2009 25.09.2009 2.10.2009 9.10.2009 30.10.2009 6.11.2009 13.11.2009 5.2.2010 Single MSU 83.0 1.6 Prior Firm Appraisal Revised Actual 1.7.2009 QCBS 1.3.2010 17.3.2010 7.4.2010 28.4.2010 18.5.2010 25.5.2010 - 9.6.2010 6.7.2010 13.7.2010 19.50 0.4 Post Firm Appraisal Revised Actual 1.3.2010 MSU 1.3.2010 17.3.2010 7.4.2010 28.4.2010 18.5.2010 25.5.2010 - 9.6.2010 6.7.2010 13.7.2010 10.0 0.2 Post Firm Appraisal Revised Actual 1.3.2010 MSU 1.5.2010 17.5.2010 7.6.2010 28.6.2010 19.7.2010 26.7.2010 9.8.2010 6.9.2010 13.9.2010 6.12.2010 0.33 Post Firm Appraisal Revised Actual 1.5.2010 16.50 1.5.2010 17.5.2010 7.6.2010 28.6.2010 19.7.2010 26.7.2010 9.8.2010 6.9.2010 13.9.2010 6.12.2010 0.08 Post Firm Appraisal Revised Actual 1.5.2010 4.0 Appraisal Revised Actual 1.5.2010 1.5.2010 17.5.2010 7.6.2010 28.6.2010 19.7.2010 26.7.2010 2.8.2010 9.8.2010 6.9.2010 13.9.2010 6.12.2010 Appraisal Revised Actual 1.5.2010 1.5.2010 17.5.2010 7.6.2010 28.6.2010 19.7.2010 26.7.2010 - 9.8.2010 6.9.2010 13.9.2010 6.12.2010 QCBS Single Preparation of sub project DPRs by Consultants for 2nd year procurement of works Group I ULBs Amadalavalasa, Ongole, Jaggaiahpet, MSU QCBS Single Narsapur, Anakapally Group II ULBs Bobbili Amalapuram, Chilakaluripet (Revision of DPR) Post QCBS Third Party Quality Assurance Consultants (TA) Group I ULBs Vizianagarm, Kakinada, QCBS Single Manuguru Group II ULBs Ananthapur, Chittor, Badvel 1.8.2009 0.38 Appraisal Revised Actual 1.8.2009 19.0 QCBS Single MSU Firm QCBS Single MSU 25.0 0.5 Prior Firm QCBS Single MSU 18.0 0.36 Post Firm Total Appraisal Revised Actual 10.5.2010 21.6.2010 30.8.2010 591.50 11.78 PROJECT DIRECTOR MSU-APURMSP DATE VERSION NO. APPROVAL DATE: 315 ANNEXURE 21 PROCUREMENT PLAN FOR WORKS 316 PROCUREMENT PLAN I.General 1. Project information: State Name: Andhra Pradesh (APMDP) Agency responsible for preparing the procurement plan: MSU. 2. 3. Bank’s approval Date of the procurement Plan Draft Procurement Plan dated 6th May 2009 Revision 1 approved on ___________ 3. Date of General Procurement Notice: ……………….. 4. Period covered by this procurement plan: 18 months (From 01-06-2009 to 01-12-2010) Is there retro-financing proposed, if so that needs to reflect in the procurement plan II. Goods and Works and non-consulting services. 1 a) Procurement Methods and Thresholds Category Method of Procurement ICB NCB Shopping DC / Force Account Goods ICB (also applicable for non- NCB intellectual services and the Shopping services contracted on the Petty Purchases basis of performance of measurable physical outputs) Works 1(b) Prior Review Threshold Works/Goods: Services (Other than consultancy) Threshold (US$ Equivalent) > 5million $ 20,000$ < -< 5 m$ < 20,000 $ Based on Bank prior approval >5,00,000 $ 20,000$ < -< 5,00,000 $ < 20,000 $ $ 500 (Cummulative $5000) All con estimated $5million Equivalent; 2. 3. 4. Pre-qualification. Not applicable Reference to (if any) Project Operational/Procurement Manual: Please add Any Other Special Procurement Arrangements: NA 5. Procurement Packages with Methods and Time Schedule317 1(b) Prior Review Threshold Works/Goods: Services (Other than consultancy) All con estimated $5million Equivalent; 2. 3. 4. Pre-qualification. Not applicable Reference to (if any) Project Operational/Procurement Manual: Please add Any Other Special Procurement Arrangements: NA 5. Procurement Packages with Methods and Time Schedule- III. Selection of Consultants. 1(a) Selection Methods and Thresholds Category Method of Procurement Threshold (US$ Equivalent) Consultants Services CQS/QCBS/LCS Consultants’ Services. As per para 5.2 to 5.4 of the ( Individual) World Bank Guidelines. Services Delivery As per para 3.2.1 of the Contractors. World Bank Guidelines. 1 b) Prior Review Threshold 1.Study for modernization of Planning Legislation Services . 2. Urban finance related. 3. Urban raining Academy. Consultancy Servies: 4. Study of Urban poor Programme. 5. Study of Urban PPP fre. 6. Trains Capacity-blds. 7. GIS Mapping @DTP 8 Sub Project Preparation. 2. Any Other Special Selection Arrangements: 3. Reference to (if any) Project Operational/Procurement Manual: As in 1(b) as per Ann II 4. Consultancy Assignments with selection Methods and Time Schedule. Refer Annexure III enclosed. IV. Implementing Agency Capacity Building Activities with Time Schedule. Please mention as discussed. 318 Slice 1: Providing offtake arrangements at Regulapadu Off-shore Reservoir, Construction of sump cum pump houses at head water works, Providing submersible Slice 2: Construction of RG-filters . (Est Rs.1.59 Cr.) Slice 3: Construction of Balancing Reservoir and ELSRs. (Est cost Rs.1.91 Cr.) Revised 319 18 19 20 21 22 23 24 25 26 Completi on of contract ual obligatio ns 27 Procurement monitaring (Please use the monitoring indicators as mentioned in the consulting plan) 28 02-01-2011 17 11-01-2010 Appraisal 16 05-01-2010 1.09 15 ULB 50% 100% Loan work work Agt. complete complete With APFIDC 12-01-2009 5.63 14 Issue of contract award notice 11-01-2009 1 13 15-10-2009 ULB with support from MSU 12 30-09-2009 4 No. (as below) 11 ____ NCB 10 09-01-2009 9 Beginnin Opening Submissi Approva Signing g of Sale of Bids on of l of BER of the of Bid BER to contract documen Bank for t approval 08-01-2009 8 Publicati on of IFB in Newspap ers / UNDB 30-7-2009 7 Approva l of IFB and Bid documen ts by the World Bank ____ 6 Preparat ion of the Bid Docume nt 15/7/2009 5 ____ 4 07-01-2009 3 15/6/2009 I 2 Constuctionof Head Water Works Components at Regulapadu Reservoir source and providing submersible pumpsets and transformer etc., under Palasa Kasibugga Water Supply Improvments Scheme Preparat Technica Initiate Preparat ion of l preparat ion of DPR sanction ion of IFB and from Specifica submissi PHED tion and on to the Bid Bank Docume nt 06-01-2009 1 Prior/Po Stage st review post Review Annexure 21 : PROCUREMENT SCHEDULE FOR WORKS Country: INDIA Borrower: GOVERNMENT OF ANDHRA PRADESH Project: A.P.U.R.M.S.P. APMDP Palasakasibugga Municipality S.No/Pac Description Method of Schedule/ Slice Procure Quantity Estimate Estimated Cost kage No. Procureme ment (Number d Cost (Million USD) nt Authorit ) (Rs. y Crores) local currency ) Slice 4: Construction of Storm water drain from Palasa Kasibugga surplus weir alon g with service road to protect the head works site incuding approach road and Providing protection works around head works site, sercice reservoirs and roof covering works to existing open wells. (Est Actual Revised Slice 1: Providing DI Gravity main from Regulapadu reserviour to Proposed filtration plant for 14 Km Length. (Est. Rs.10.39 Cr.) 320 02-01-2011 11-01-2010 05-01-2010 12-01-2009 11-01-2009 15-10-2009 30-09-2009 ____ 09-01-2009 08-01-2009 30-7-2009 Appraisal ____ 3.80 15/7/2009 19.65 15/7/2009 1 07-01-2009 3 No. (as below) 15/6/2009 NCB 06-01-2009 II ULB with support from MSU post Review Actual Providing Gravity Mains, Pumping Main and Distribution System under Palasa Kasibugga Water Supply Improvments Scheme Slice 2: Providing Pumping main from sump cum pump house to Balancing Reservoir and Providing DI/HDPE gravity mains from balancing reservoir to individual service reservoirs. (Est. Rs.3.09 Cr.) Slice 3: Providing distribution system in extension areas and unserved areas including interconnection s (Est. Rs.6..17 Cr.) Revised Actual Date: Version No: Approved Date: 321 Annexure.II : PROCUREMENT SCHEDULE FOR WORKS 19 20 21 22 23 24 25 26 Slice 1: Remodell ing Distributi on System in Zone-I, Zone-II & ZoneIII areas of the town. (Est. cost Rs.8.62 Cr.) Slice 2: Providing Raw water pumping main, sump cum pump house, vertical turbine motors etc., from Gundlaka mma River to Treatmen t works. (Est cost Rs.2.10 Cr.) Revised Actual Version No: 322 Approved Date: Complet Procurement monitaring. ion of contract ual obligatio ns 27 28 1/2/2011 Appraisal 18 100% work complet e 1/11/2010 2.07 17 50% work complet e 1/5/2010 10.72 16 ULB Loan Agt. With APFIDC 1/12/2009 1 15 14 Issue of contract award notice 1/11/2009 ULB with support from MSU 13 15-10-2009 2 No. (as below) 12 30-09-2009 NCB 11 ____ 10 1/9/2009 9 Beginnin Opening Submissi Approva Signing g of Sale of Bids on of l of BER of the of Bid BER to contract documen Bank for t approval 1/8/2009 8 30-7-2009 7 Publicati on of IFB in Newspa pers / UNDB ____ 6 Approva l of IFB and Bid documen ts by the World Bank 15/7/2009 5 Preparat ion of the Bid Docume nt ____ 4 1/7/2009 Remodelling of Distribution System and providing Raw Water pumping main, construction of Pump House and Supply of Pumpsets under Markapur Water Supply Improvments 3 Preparat Technic Initiate Preparat ion of al preparat ion of DPR sanction ion of IFB and from Specific submissi PHED ation on to the and Bid Bank Docume nt 15/6/2009 I 2 Proir/Post Stage Review 1/6/2009 1 OF ANDHRA PRADESH Markapur Municipality Method Schedul Procure Quantity Estimate Estimated Cost of e/ Slice ment (Number d Cost (Million USD) Procure Authorit ) (Rs. ment y Crores) local currency ) Post Review Country: INDIA Borrower: GOVERNMENT Project: A.P.U.R.M.S.P. A.P.U.R.M.S.P. S.No/Pa Description ckage No. Annexure.II : PROCUREMENT SCHEDULE FOR WORKS 15 16 17 23 24 25 26 30-09-2009 15-10-2009 1/11/2009 1/12/2009 1/5/2010 1/11/2010 1/2/2011 30-09-2009 15-10-2009 1/11/2009 1/12/2009 1/5/2010 1/11/2010 1/2/2011 28 ____ 27 ____ 22 1/9/2009 21 1/9/2009 20 1/8/2009 19 1/8/2009 18 30-7-2009 Appraisal 14 Complet Procurement ion of monitaring contract ual obligatio ns 30-7-2009 6.39 13 100% work complet e _____ 33.05 12 50% work complet e 15/7/2009 1 11 ULB Loan Agt. With APFIDC _____ ULB with support from MSU 10 Issue of contract award notice 15/7/2009 9 Beginnin Opening Submissi Approva Signing g of Sale of Bids on of l of BER of the of Bid BER to contract documen Bank for t approval _____ 8 Publicati on of IFB in Newspa pers / UNDB _____ 7 Approva l of IFB and Bid documen ts by the World Bank 1/7/2009 6 Preparat ion of the Bid Docume nt 1/7/2009 4 No. (as below) 5 15/6/2009 ICB 4 Preparat Technic Initiate Preparat ion of al preparat ion of DPR sanction ion of IFB and from Specific submissi PHED ation on to the and Bid Bank Docume nt 15/6/2009 3 Stage 1/6/2009 I 2 Providing Pump sets, Transformers, Construction of ELSRs & Water Treatment Plant under Guntur Prior/ Post Review 1/6/2009 1 Procurem Quantity Estimate Estimated Cost ent (Number) d Cost (Million USD) Authority (Rs. Crores) local currency) Post Review Country: INDIA Borrower: GOVERNMENT OF ANDHRA PRADESH Project: A.P.U.R.M.S.P. A.P.U.R.M.S.P. Guntur Municipal Corporation S.No/Pa Description Method Schedule/ Slice ckage of No. Procure ment Slice 1: Providing Summer RW pump sets, Transformer at Undavalli , Transformer at Takkelapadu, pump sets at various locations at Takkelapadu, SJ Mudi, CW pumping station, Transformer at SJ Mudi, RW pump sets at SJ Mudi, RW pump sets at Mangalagiri, Raw Water pump sets at Takkella padu. (Est Rs.4.52 Cr.) Slice 2: Construction of two tier ELSR at Takkelalapadu HWW and ELSRs in various localities of the town.(Est Rs.21.94 Cr.) Slice 3: Construction of Rapid Gravity Filtration Plant at SJ Mudi, Installation of new pressure gauges and flow meters in existing installation such as filter house, pup houses etc. (Rs.4.20Cr.) Revised Slice 4: Construction of CW sump at HLR, sump at Nehru Nagar, RW sump at Mangalagiri, RW sump at Takkellapadu, pump house at Takkellapadu. (Est Rs.2.39Cr.) Actual Revised II ICB 3 No. (as below) ULB (With the Support of MSU) 1 70.70 13.66 Post Review Actual Providing Pumping Mains and Gravity Mains under Guntur Water Appraisal Slice 1: Providing Gravity Main from Takkelapadu new balancing tank to BR Stadium sump, Providing Gravity main from Vengalayapalem to HB colony (Rs.7.98Cr.) 323 Slice 2: Providing Pumping Main from BR Stadium to IPD colony sump, Pumping main from HLR sump to Sita Ram Nagar NGO colony, Pumping main from Nehru Nagar sump to HLR, Pumping main from SJ Mudi sump to HLR, Pumping main from RW sump to WTP at SJ Mudi, Pumping main from AT Agraharam sump to Venugopalnagar HB Colony, (Rs.18.59Cr.) Slice 3: Providing Pumping Main from Raw Water Pumping station at Mangalagiri to Takkellapadu raw water pump house ( Est Rs.44.13 Cr.) Revised Slice 1: Renovation and Modernisation of Distribution System by laying trunk mains in various zones (Rs.10.32Cr.) Slice 2: Providing Distribution lines in illserved and unserved areas (Rs.28.24Cr.) Revised Actual Date: Version No: No: 324 Approved Date: 1/3/2011 1/12/2010 1/6/2010 1/2/2010 1/1/2010 30/11/2009 30/10/2009 15/10/2009 25-9-2009 10/8/2009 Appraisal 7/8/2009 7.45 30/7/2009 38.56 15/7/2009 1 15/7/2009 ULB (With the Support of MSU) 1/7/2009 2 No. (as below) 15/6/2009 ICB 1/6/2009 III Prior Review Actual Renovation and Modernisation of Distribution system and Providing new Distribution pipeline System in illserved and unserved areas under Guntur Water Supply Improvements Scheme Annexure.21 : PROCUREMENT SCHEDULE FOR WORKS 18 19 20 21 22 23 24 25 26 Complet Procurement ion of monitaring. contract ual obligatio ns 27 28 1/2/2011 17 100% work complet e 1/11/2010 16 50% work complet e 1/5/2010 15 1/12/2009 Appraisal 14 1/11/2009 2.97 13 15-10-2009 15.36 12 30-09-2009 1 11 Submissi Approva Signing Issue of ULB on of l of BER of the contract Loan BER to contract award Agt. Bank for notice With approval APFIDC ____ ULB (With the Support of MSU) 10 1/9/2009 9 Beginnin Opening g of Sale of Bids of Bid documen t 1/8/2009 8 30-7-2009 7 Approva Publicati l of IFB on of and Bid IFB in documen Newspa ts by the pers / World UNDB Bank _____ - 6 Preparatio n of the Bid Document 15/7/2009 NCB 5 _____ I 4 1/7/2009 3 15/6/2009 2 Construction of ELSRs & GLSRs, pump houses including supplyand erection of pumpsets under comprehesive water supply scheme for Malkajgiri in GHMC area.Concerned to Yr. 2026 Preparat Technic Initiate Preparat ion of al preparation ion of DPR sanction of IFB and from Specificatio submissi PHED n and Bid on to the Document Bank 1/6/2009 1 Procure Quantity Estimate Estimated Cost Prior/Po Stage ment (Number) d Cost (Million USD) st Authorit (Rs. review y Crores) local currency) Post Review Country: INDIA Borrower: GOVERNMENT OF ANDHRA PRADESH Project: A.P.U.R.M.S.P. A.P.U.R.M.S.P. Malkajgiri (GHMC) S.No/Pa Description Method of Schedule/ Slice ckage Procurem No. ent Revised 15/7/2009 15/7/2009 30/7/2009 7/8/2009 10/8/2009 25-9-2009 15/10/2009 30/10/2009 30/11/2009 1/1/2010 1/2/2010 1/6/2010 1/12/2010 1/3/2011 15/7/2009 30/7/2009 7/8/2009 10/8/2009 25-9-2009 15/10/2009 30/10/2009 30/11/2009 1/1/2010 1/2/2010 1/6/2010 1/12/2010 1/3/2011 Appraisal 15/7/2009 8.09 1/7/2009 41.88 1/7/2009 1 15/6/2009 ULB (With the Support of MSU) 15/6/2009 - 1/6/2009 ICB 1/6/2009 II Prior Review Actual Providing Inlet mains & Outlet mains for the Water Supply requirements for the Year 2026 under comprehesive water supply scheme for Malkajgiri in GHMC area. Revised III ICB - ULB (With the Support of MSU) 1 115.34 22.29 Prior Review Actual Providing Distribution System to Malkajgiri hydraulic zone. Under Malkajgiri comp.water supply improvement scheme. Appraisal 325 Slice 1: Manufacture, supplying, lowering, laying, jointing, testing and commissioning of 500,450,400 mm, 350mm, 300mm, 250mm, 200mm, 150mm & 100 mm MS/BWSC/DI mains with cement mortar factory lining and outcoating for Vaypayee nagar ELSR zone in Malkajgiri. (Est. Rs. 12.91 Cr) Slice 2: Manufacture, supplying, lowering, laying, jointing, testing and commissioning of 500,450,400 mm, 350mm, 300mm, 250mm, 200mm, 150mm & 100 mm MS/BWSC/DI mains with cement mortar factory lining and outcoating for Vaypayee nagar GLSR zone in Malkajgiri. (Est. Rs. 23.01 Cr) Slice 3: Manufacture, supplying, lowering, laying, jointing, testing and commissioning of 500,450,400 mm, 350mm, 300mm, 250mm, 200mm, 150mm & 100 mm MS/BWSC/DI mains with cement mortar factory lining and outcoating for Chanakyapuri zone I in Malkajgiri. (Est. Rs. 7.42 Cr) Slice 4: Manufacture, supplying, lowering, laying, jointing, testing and commissioning of 500,450,400 mm, 350mm, 300mm, 250mm, 200mm, 150mm & 100 mm MS/BWSC/DI mains with cement mortar factory lining and outcoating for Defence colony zone in Malkajgiri. (Est. Rs. 11.14 Cr) Slice 5: Manufacture, supplying, lowering, laying, jointing, testing and commissioning of 500,450,400 mm, 350mm, 300mm, 250mm, 200mm, 150mm & 100 mm MS/BWSC/DI mains with cement mortar factory lining and outcoating for Chanakyapuri zone II in Malkajgiri. (Est. Rs. 4.85 Cr) 326 Slice 6: Manufacture, supplying, lowering, laying, jointing, testing and commissioning of 500,450,400 mm, 350mm, 300mm, 250mm, 200mm, 150mm & 100 mm MS/BWSC/DI mains with cement mortar factory lining and outcoating for Goutham nagar GLSR zone in Malkajgiri. (Est. Rs. 23.1 Cr) Slice 7: Manufacture, supplying, lowering, laying, jointing, testing and commissioning of 500,450,400 mm, 350mm, 300mm, 250mm, 200mm, 150mm & 100 mm MS/BWSC/DI mains with cement mortar factory lining and outcoating for Sainikpuri zone in Malkajgiri. (Est. Rs. 15.07 Cr) Slice 8: Manufacture, supplying, lowering, laying, jointing, testing and commissioning of 500,450,400 mm, 350mm, 300mm, 250mm, 200mm, 150mm & 100 mm MS/BWSC/DI mains with cement mortar factory lining and outcoating for Sainathpuram zone in Malkajgiri. (Est. Rs. 17.84 Cr) Revised Actual Version No: No: Date: 327 Approved Date: Annexure.21 : PROCUREMENT SCHEDULE FOR WORKS 10.47 Appraisal 18 19 20 21 22 23 24 25 26 27 1/3/2011 54.20 17 1/12/2010 1 16 1/6/2010 ULB (With the Support of MSU) 15 1/2/2010 3 No. (as below) 14 1/1/2010 ICB 13 30/11/2009 12 30/10/2009 11 15/10/2009 10 Complet Procurement ion of monitaring. contract ual obligatio ns 25-9-2009 9 100% work complet e 10/8/2009 8 50% work complet e 7/8/2009 7 Submissi Approva Signing Issue of ULB on of l of BER of the contract Loan BER to contract award Agt. Bank for notice With approval APFIDC 30/7/2009 6 Beginnin Opening g of Sale of Bids of Bid documen t 15/7/2009 5 Approva Publicati l of IFB on of and Bid IFB in documen Newspa ts by the pers / World UNDB Bank 15/7/2009 4 Preparat ion of the Bid Docume nt 1/7/2009 3 15/6/2009 I 2 Providing pumping main, Gravity mains and Distribution System in the town under Armoor Water Supply Improvments Scheme Preparat Technic Initiate Preparat ion of al preparat ion of DPR sanction ion of IFB and from Specific submissi PHED ation on to the and Bid Bank Docume nt 1/6/2009 1 Prior/Post Stage Review Prior Review Country: INDIA Borrower: GOVERNMENT OF ANDHRA PRADESH Project: A.P.U.R.M.S.P. A.P.U.R.M.S.P. Armoor Municipality(Grade III) S.No/Pa Description Method Schedule/ Slice Procure Quantity Estimate Estimated Cost ckage of ment (Number d Cost (Million USD) No. Procure Authorit ) (Rs. ment y Crores) local currency ) Slice 1: Providing punmping main from existitng SRSP canal to treatment plant at Narendhra Enclave (Est. Cost Rs.40.21 Cr) Slice 2: Providing Gravity Mains (i) from junction to overhead tank (ii) T.P. to hill (iii) Church to hill (iv) Jn. Point at open market land to over head tank (v) Babu Jagjeevanram statue to over head tank at hill (vi) Jn. to open market area (vii) Jn. at N.S.canal to over head tank (viii) Jn. at overhead tank at power bore (ix) Jn. to overhead tank (Est. Rs.2.84 Cr.) 328 28 Slice 3: Providing Distribution system in five zones of the town. (Est. Cost Rs.11.15 Cr) 1 2.55 Revised Actual Date: Version No: 329 Approved Date: 1/3/2011 1/12/2010 1/6/2010 1/2/2010 1/1/2010 25-9-2009 10/8/2009 7/8/2009 30/7/2009 15/7/2009 15/7/2009 1/7/2009 15/6/2009 1/6/2009 Appraisal 30/11/2009 - 0.49 30/10/2009 NCB ULB (With the Support of MSU) 15/10/2009 II Construction of Water Treatment Plant, Providing CI D/F pipe connectins including connecting main, Construction of clear water sump, construction of generator rooms, construction of watchman quarters, Providing Generators at all pumping stations and Electric SubStation near intake well. Prior Review Revised Actual 18 19 20 21 22 23 27 Revised Actual Date: Version No: 330 Approved Date: 25 26 Completio Procurement n of monitering contractua l obligation s 27 28 1/2/2011 17 100% work complet e 1/11/2010 16 50% work complet e 1/5/2010 15 1/12/2009 Appraisal 14 1/11/2009 3.86 13 15-10-2009 19.98 12 30-09-2009 1 11 Submissi Approva Signing Issue of ULB on of l of BER of the contract Loan BER to contract award Agt. Bank for notice With approval APFIDC ____ ULB with support from MSU 10 1/9/2009 9 Beginnin Opening g of Sale of Bids of Bid documen t 1/8/2009 8 30-7-2009 7 Approva Publicati l of IFB on of and Bid IFB in documen Newspa ts by the pers / World UNDB Bank _____ - 6 15/7/2009 NCB 5 Preparat ion of the Bid Docume nt _____ I 4 1/7/2009 3 15/6/2009 2 Laying of distrubution pipe lines in unserved areas of Kurnool Municipal Corporation Preparat Technic Initiate Preparat ion of al preparat ion of DPR sanction ion of IFB and from Specific submissi PHED ation on to the and Bid Bank Docume nt 1/6/2009 1 Estimate Prior/Post Stage d Cost Review (Million USD) Post Review Annexure.21 : PROCUREMENT SCHEDULE FOR WORKS Country: INDIA Borrower: GOVERNMENT OF ANDHRA PRADESH Project: A.P.U.R.M.S.P. A.P.U.R.M.S.P. Kurnool Municipal Corpoation S.No/Pa Description Method Schedul Procure Quantity Estimate ckage of e/ Slice ment (Number d Cost No. Procure Authorit ) (Rs. ment y Crores) local currency ) ANNEXURE-22 Correspondences of importance with regard to the Project Costs and Retroactive Funding 331 The World Bank 1818 H Street N.W. (202) 477-1234 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Washington, D.C. 20433 U.S.A. Cable Address: INTBAFRAD Cable Address: INDEVAS March 16,2009 Mr. Ashok Chawla Secretary Department of Economics Affairs (DEA) 130 North Block New Delhi 110 001 Dear Mr. Chawla: India: Join DEA/Bank Portfolio Performance Review: Urban/ Urban Water Sector (February 18, 2009) Summary of Agreed Actions between DEA, the Project Authorities and the Bank First of all, we would like to thank DEA and, through DEA, all the representatives from the state and central governments and the project implementing agencies for their participation and excellent contributions to the above review meeting. Please find attached a copy of our presentation along with a summary of the issues and agreed actions for each project for information and follow up on the part of the project authorities. I would like to take this opportunity to report on the outcome of the urban sector portfolio review. During the meeting, we reviewed only three projects, namely, Karnataka Municipal Reforms, Tamil Nadu Urban, and Karnataka Urban Water (Emergency Tsunami will be taken up later). The Karnataka Urban Water Improvement project continues to break new ground, with the only issue there being the delay in complying with the legal covenant related to establishment of a State Water Council and setting the water tariff. This was one of the grounds for extending the project, which has achieved its physical and financial targets otherwise. We are working with our counterpart in Karnataka on this long overdue legal covenant and hope to reach some agreement on the way forward. However, our prime concern is over the other two projects. The Tamil Nadu Urban project is in problem status for sometime due to the continued slow implementation of the urban transport component which constitutes 40% of the loan amount and which was dovetailed to the project at the last minute. Subsequent to the portfolio review meeting, we have received a formal proposal from the Government of Tamil Nadu through DEA for restructuring the project. We are currently reviewing the proposal and will be getting back to DEA and the Government of Tamil Nadu on this shortly. The Karnataka Municipal Reforms project was downgraded due, among other things, to weak interagency coordination, procurement bottlenecks including lack of competition, delays in land acquisition, and serious internal control weaknesses. Overall, the project is progressing very slowly, reflected in very slow disbursement (18% after 3 years). As you will notice, these are project-specific issues which are well within the capacity of the project authorities to resolve. We are therefore hoping that the concerns highlighted above will be addressed on priority in order that the ratings can he upgraded and the projects are able to achieve the desired outcomes. We will also take the opportunity of the upcoming portfolio review meetings in Karnataka and Tamil Nadu (dates to be determined) to bring these issues to the attention of the state governments and seek swift and decisive actions to take implementation forward. 332 We also briefly reviewed the status of preparation of the Andhra Pradesh Urban project. There were discussions regarding the modalities of possible Bank funding under retroactive financing beyond one year as per Bank policies. Subsequent to the meeting, we have reconsidered this matter internally and suggest to either go ahead with the option of increasing the loan size (possibly combined with a higher share of Bank financing) now or make a provision for additional financing if so desired during implementation (subject to due approval process in the Bank), but with retroactive financing limited up to one year before project signing. We have since had a state portfolio review meeting in Andhra Pradesh on March 12-13, 2009, where we shared our views above with the Government of Andhra Pradesh. Going forward, some of the challenges that face this growing sector are strengthening institutions, increasing competition, addressing the supply side constraints, and improving project readiness. We hope to work with you and our counterparts in the urban sector to address these issues and ensure the long-term sustainability of investments in this sector. With regards, Sincerely yours, Roberto Zagha Country Director, India Enclosure (s) cc: Dr. Alok Sheel, Joint Secretary, DEA Mr. D.K. Singh, Director, DEA M. Ramachandran, Secretary, Ministry of Urban Development, New Delhi Ms. Kiran Dhingra, Secretary, Ministry of Housing and Urban Poverty Alleviation, New Delhi Ms. Pushpa Subramanyam, Secretary, MAUD, GOAP, Hyderabad Mr. I.Y.R. Krishna Rao, Principal Secretary, Finance Department, GOAP, Hyderabad Mrs. Vasudha Misra, Principal Secretary, Finance Department, GOAP, Hyderabad Mr: Sunil Sharma, Commissioner and Director, Municipal Administration, Hyderabad Mr. D. Thangaraj, Principal Secretary, Urban Development Department, GoK Mr. Jawaid Akhtar, Secretary, Urban Development Department, GoK Mr. Arvind Srivastava, Managing Director, Karnataka Urban Infrastructure Development & Finance Corporation (KUIDFC) Mr. K. H. Gopala Krishne Gowda, Managing Director, Karnataka Urban Water Supply and Drainage Board Mr. Niranjan Mardi, Secretary, Municipal Administration and Water Supply Mr. Phanindra Reddy, MD & Chief Executive Officer, Tamil Nadu Urban Infrastructure Finance Ltd 333 Joint DEA/World Bank Sector Portfolio Performance Review Urban Sector February 18,2009 Summary of Agreed Actions Project Name 1 2 Third Tamil Nadu Urban Development Project (TNUDP-III) Karnataka Municipal Reform Project Issues Agreed Actions Restructuring of Chennai Urban Transport Sub-component: Agreements/ Discussions have been held on the revised scope as well as loan reallocations, formal proposal is yet to be received from GoTN via DEA;\ Subsequent to the meeting, a formal restructuring proposal has been received. Slow disbursement (above 50%of projections): Caused due to delays in completing procurement as per the (revised) procurement plan and in execution of on-going contracts under the ‘Line of Credit’ sub-component; GoTN /implementing agencies to follow-up-on implementation of remedial measures identified and agreed to earlier, including for on- going contract. Procurement (e.g. Delays in contract awards, Deviation from agreed procurement arrangements for post-review contracts). TNUIFSL to closely monitor other implementing agencies to expedite the award of remaining contracts by September 30, 2009. GoK /KUIDFC to: Slow implementation progress leading to also slow disbursement performance. This relates to mainly two components: 335 Municipal Investment component: Land acquisition related issues, delays in completing sub-project preparation and not enough capacity at KUIDFC to follow up; Greater Bangalore Sewerage component: Delay was mainly caused due to clearance of e-procurement and bidding docs. Procurement: Feedback on post procurement review is awaited as well as contracts related information. In addition, in response to complaint, a technical review of BBMP roads component has been conducted, and a draft report is in the process of being sent out. Weak monitoring and non availability of data on procurement indicators. Particular to BWSSB, delays have been partially due to: Accelerate implementation of this component through increased capacity for technical / operational follow-up of works and to coordinate implementation of other components backed up by strong M&E and project management systems. For Sewerage component, address concerns on poor bid response and ensure enhanced competition and comply with agreed procurement plan. KUIDFC to respond to this, at the earliest. The draft technical review report is being finalized within Bank and would be sent to GoK for comments shortly. GoK / KUIDFC to organize contractors’ conference on February 28, 2009( This has since been done as scheduled). Requests for dilution on qualification criteria not backed by facts (not approved by GoK Empowered Committee) Non compliance of Bank prior review requirements including changes in procurement methods/packaging without Bank no-objection Unable to carry out agreed action plan in a timely manner for improving competition leading to poor bid response and rebidding. Financial management Poor internal controls leading to double claims / excess claims; lack of coordination amongst three implementing 336 KUIDFC to provide full time professional FM staff for the project by march 31, 2009 KUIDFC to ensure that the FMS is agencies. Lack of timely and satisfactory Financial Monitoring Reports Poor implementation of agreed operation manual Issue in audit reports (reconciliation statements not attached): Auditor (Project audit) selection process needs strengthening 3 Karnataka Urban Water Sector Improvement Project (KUWASIP) 4 AP Urban Reform and Municipal Service Project (APUERMSP) Pending decisions on Sector Development Component : (I)approval of State Water supply Tariff framework and (ii)presentation for approval to appropriate level of establishment of State Water Council Delays in taking actions regarding final phase of implementation required, including extension of operator contract and movement to volumetric tariffs in demonstration areas of two cities. Procurement: Feedback on post-procurement review is awaited. FM: lack of timely and reconciled Financial Monitoring Reports: Delay in submission of audit reports and the quality of audit reports (which are not reconciled to claims) This project was originally negotiated in 2005 but not presented to the Board, pending a Board condition (repeal of Urban land Ceiling Act) which was met in March 2008. The project is being updated. Appraisal and negotiations are planned in February –Mar 2009 and Board presentation in April 2009. A few Financial Management (FM) related actions by GoAP are pending. During the portfolio review meeting GoAP requested that Bank considered retroactive financing beyond one year from 337 strengthened, operation manual is fully implemented to strengthen the internal controls and there is adequate oversight by management. Internal auditor (for the project) to be appointed, on agreed terms of reference, to strengthen internal controls by September 30, 2009 KUIDFC to agree on a selection process for external auditor. GoK to indicated dates for compliance with the above two legal covenants, along with decision and action plan for subsequent implementation. GoK /KUIDFC to extend operator’s contract up to December 2009 and reach final agreement with 2 ULBs to begin implementation of volumetric tariffs. KUIDFC to respond at the earliest. KUIDFC to ensure FM staffing and the oversight by the senior management on financial issues. Discussions have been held on the pending FM issues and mow an early response from GoAP is expected. Subsequent to the meeting, Bank has reconsidered the issue of retroactive financing internally and would prefer to go ahead with option of increasing Bank loan size (possibly combined with a higher share of Bank financing), but with retroactive financing limited to one year. the date of last negotiations help for the project in 2005. An alternative option of increasing the Bank’s share in the proposed project / loan size was also discussion in this context and it was agreed that Bank would revisit this issue internally. 338 GOVERNMENT OF ANDHRA PRADESH FINANCE (PMU) DEPARTMENT U.O.Note No. 797/Fin.PMU/08 Date:17.01.09 Sub: Externally Aided Projects – Proposal for revision of Project Cost in terms of local currency on a later date – Instructions – Issued – Reg. *** It is observed that a number of proposals are being received from the Project Implementing Authorities of Externally Aided Projects for altering the Project Cost in terms of local currency on the ground that the Indian Rupee is depreciated, when ever there is depreciation in India Currency Value. The debt sustainability is worked out in terms of Indian Currency only for every Externally Aided Project proposal, and that the cost of every Externally Aided Project will be arrived at in Indian currency with reference to RBI’s foreign Exchange Rate as on the date of obtaining Debt Sustainability certificate from Department of Expenditure, Ministry of Finance, Govt. of India, New Delhi. As such revision of Project Cost is not permissible as it will adversely affect the Debt Sustainability of the State which is already fixed in rupee terms. Therefore, project Implementing Authorities are requested to avoid sending such proposals for revision of Project Cost on the ground of depreciation of Rupee. I.Y.R. Krishna Rao Principal Finance Secretary to Govt. To All the Project Implementing Authorities All the Special Chief Secretaries/Prinicipal Secretaries/Secretaries to Govt. A.P. Secretariat, Hyderabad C.C. to: The P.S. to the Chief Secretary //FORWARDED BY ORDER\\ Deputy Financial Advisor 339 F.No: 4(8)/FRU/2005 Govt of India Ministry of Finance Department of Expenditure (Fiscal Reforms Unit) 5th Floor,Block-11 CGO-Complex Lodhi Road,New Delhi. Dated: 2nd March,2009. OFFICE MEMORANDUM Subject: Andhra Pradesh Urban Reforms and Municipal Services Project (APURMSP)clearance from debt sustainability angle The undersigned is directed to refer to DEA’s OM No: 14/10/99-FB-VI dated 19th December,2008 on the subject mentioned above and to convey that Govt of Andhra Pradesh does not fall under the category of “debt stressed State”. Hence, this Department has no objection to support the aforesaid project for World Bank assistance subject to the following conditions that: the clearances from Planning Commission and Ministry of Urban Development is obtained by the State Government. the financing of the project will remain within the respective annual borrowing limits fixed for the State. Project proposal should be included in the annual paln/XIth plan This issue with the approval of JS (PFI) (Nalini Pathak) Asst. Director Tel.24368543 Shri Rohit Mathur Under Secretary (FB-VI) Dept of Economic Affairs, North Block, New Delhi 340 Annexure-23 State Institute of Urban Management, Andhra Pradesh Memorandum of Association 341 State Institute of Urban Management, Andhra Pradesh Memorandum of Association Department of Municipal Administration and Urban Development Government of Andhra Pradesh 342 Memorandum of Association The State Institute of Urban Management, Andhra Pradesh shall be the Andhra Pradesh Urban Academy as envisaged in the first component of the World Bank funded “Andhra Pradesh Municipal Development Project” (APMDP). With an intention to establish an exclusive agency for training and research for Urban affairs in Andhra Pradesh, the institute has been conceptualized to be positioned as one of the premier institutes for training, research, policy support and information dissemination in the field of urban affairs. The State Institute of Urban Management, Andhra Pradesh,(SIUMAP) shall be constituted as a registered society under the Andhra Pradesh Societies Registration Act, 2001. 1) Preamble: The State Institute of Urban Management, Andhra Pradesh (SIUMAP) shall be an apex institute of Training and Research in the area of urban affairs. It shall evolve into a centre of excellence in urban affairs management to provide necessary support to the Municipal Administration and Urban Development (MA&UD) department and the Urban Local bodies in the state of Andhra Pradesh. Over a period of time, it is envisaged that the institute shall develop capacities of thought leadership in various fields of urban affairs like i) Policy formulation, ii) Development of program initiatives and implementation strategies for Urban Development, iii) Manpower planning and Human Resource Development, iv) Financial effectiveness and tax administration efficiency, v) Improved service delivery to citizens and vi) Research and dissemination of information through quality publications. The institute shall focus on three functional areas namely i) Training and Human Resource Development, ii) Research in Urban affairs and iii) Policy Support for state and local governments. By nature of its establishment, the institute shall be an autonomous body registered under the Andhra Pradesh State Societies Registration Act, 2001. 2) Definitions: In these articles, unless the context otherwise requires: a) “Area of operation” means areas where the Institute will operate or carry out its activities b) “Executive Committee” means the Executive Committee of the State Institute of Urban Management constituted under Article 7. c) “Financial Year” means the year commencing from 1st April and Ending 31st March of the following year d) “Government” means Government of Andhra Pradesh e) “Governing Body” means the Governing body of the SIUMAP constituted under Article 3. f) Institute means “State Institute of Urban Management” g) “Prescribed Rules” means guidelines/rules issued by the Executive Committee and approved by the Governing Body from time to time. 343 h) The State Institute of Urban Management, Andhra Pradesh, shall be referred as the following acronym namely “SIUMAP” or alternately as State Institute of Urban Management. 3) Name of the Society: The Society is named as State Institute of Urban Management, Andhra Pradesh 4) Registered Office of the Society: The Registered office of the Society shall be situated at the City manager’s training centre, Road No:12, Jubilee Hills, Hyderabad in the State of Andhra Pradesh. The Institute shall establish its own Regional or District level Centres in the State as per the training requirement upon approval of the Governing council. A new office building shall be developed with support of APMDP as per the project guidelines. 5) Aims of SIUMAP society: The aims of the State Institute of Urban Management, Andhra Pradesh and the proposed objectives bring a focus to the functions of SIUMAP which shall be based on three foundations namely, i) Training and Human Resource Development, ii) Research and iii) Consultancy and policy support. The functional foundations of SIUMAP are depicted in the figure below. Figure-1: SIUMAP- Key Foundations The aims of the SIUMAP are as follows. i) The State Institute of Urban Management aims to be an organization of excellence for Capacity building of Municipal bodies in the state. The mandate emanating from this aim of the institute shall mainly encompass training and conducting of human resource development initiatives for the staff of Municipal bodies and the elected representatives of the Municipal councils. The institute shall therefore function as apex training and Human resource development organization for the Department of Municipal Administration and Urban Development, Government of Andhra Pradesh. The institute shall conduct training courses and award certifications primarily to the functionaries of Urban Local Bodies. The institute may also conduct certification 344 courses and distance education programs for general applicants with interests in urban affairs. ii) Along with Human Resource Development, the institute shall also conduct research into policy issues relating to urbanization, urban development, urban local body management, urban poverty alleviation and urban governance. Through conduct of national and international conferences, seminars and symposia, the institute shall bring together experts and diverse stakeholders working in the field of Urban affairs to synergize policy for urban reform and resolution of urban developmental and management issues. The State Institute of Urban Management shall conduct original research in various thematic areas of urban affairs and shall produce quality publications and thought leadership articles. SIUMAP shall take up both internal and externally funded research projects and shall network with national and international institutes of repute to conduct collaborative research. The research platform of the SIUMAP shall also be a foundation for the conceptualization, design and development of training curricula and certification programs. iii) With strong academic and research foundations laid down by the objectives of the society, the State Institute of Urban Management, Andhra Pradesh aims to evolve into a thought leadership organization and a think tank for provision of policy support on various issues relating to urban management. The institute shall empanel experienced domain experts, consultants, academic and technical professionals and organizations in furtherance of the objectives of the society. iv) To support the above key mandated functional areas SIUMAP shall house the State Library for Urban Management and shall be an Information clearing house and repository. SIUMAP shall specialize in the production of a wide range of communication and training material in Telugu and English such as exercises, case studies, readers, films, manuals, journals, resource books, self-learning material, success stories, newsletters, brochures and pamphlets. These are an integral part of SIUMAP's research, training and Policy support activities. The publications of SIUMAP are therefore not produced in isolation but are inevitably linked to the objectives of the training and the goals of the larger research and policy support programmes. The training curricula and materials shall draw heavily on the Institute's rich research and strong domain expertise. SIUMAP aims to be a self-sustainable research and academic institution and policy support think tank for Urban affairs in future and shall focus its activities to that end. 6) Objectives of the SIUMAP society: The objectives of the SIUMAP, AP society are as follows, 1. To act as an autonomous, training, research and policy support organization to undertake, promote and coordinate studies on urbanization, urban reforms, urban management and urban development; 345 2. To act as a centre for advanced study of urban problems and challenges in Andhra Pradesh and to provide and promote the necessary training and human resource development facilities to various stakeholders; 3. To evaluate the social, administrative, financial and other aspects of the implementation of urban development plans and programmes in the state; 4. To design and conduct state of the art training programs and courses on various areas relating to Urban management in order to build capacities of the municipal functionaries including elected representatives. 5. To mobilize available expertise in the field of urban affairs and to offer and co-ordinate technical and consultancy services; 6. To provide professional certifications in urban management and governance to the various stakeholders. 7. To conduct research and engage in thought leadership to usher innovative strategies for urban reform and development and act as a think tank for Urban policy in the state of Andhra Pradesh. 8. To render professional assistance and consultancies in the field of Urban management with a focus on urban reform, poverty alleviation and infrastructure development. 9. To carry on operational and policy-oriented research, to evolve ideas and concepts appropriate to the local, state and national environment and to formulate policy alternatives. 10. To study and review policies and programs and prepare developmental plans with respect to balancing Infrastructure development with the growing needs of the urban population. 11. To research and study national and international best practices to be replicated for improvement of performance of Urban local bodies in Andhra Pradesh. 12. To act as a clearing house of information, and to operate a Library and Knowledge repository centre to disseminate information on urban affairs; 13. To constitute or cause to be constituted or give affiliation to regional, state or local centers to promote the purpose of the institute; 14. To organize and sponsor training courses, workshops and seminars in various fields; 15. To promote modern management science as a major instrument for development of economic and social activities of the Urban local bodies and other organizations of the State Government; 16. To develop managerial skills, organizational capability, leadership and decision-making ability for Urban development planning and efficiency in implementation of policies, programmes and projects in Urban Areas. 17. To identify appropriate technologies for various functional aspects of Urban management and facilitate transfer of such technologies to Urban local bodies. 18. To pursue independent inter-disciplinary studies and action research with special focus on citizen service delivery systems and administrative process improvement. 19. To act as an Information clearing house and to house the State repository and library for urban management studies. 20. To engage in publishing of original research articles, journals and other publications in furtherance of the objectives of the society. 346 21. To provide handholding support to urban local bodies, for strengthening administrative and financial processes on a pilot basis. 22. To collaborate and network with other organizations involved in research and training in urban affairs and to foster community based organizations in order to encourage citizen’s participation in local governance. 23. To offer fellowships, scholarships, prizes, stipends in the area of urban management of governance in furtherance to the objectives of the society. 24. To undertake and facilitate publication and distribution of books, research papers, monographs, a journal and other communication material pertaining to urban affairs. 7) Membership and General Body of the SIUMAP society: The SIUMAP society shall primarily be established through the Government funding. The founding members of the society shall be the members of the Empowered committee of the Andhra Pradesh Municipal Development Project. The society shall therefore have Government members as the members of the General body during its inception. The chairperson of the Empowered committee of APMDP shall be the President of the SIUMAP, Society. The SIUMAP society shall have a Governing council headed by the President of the SIUMAP society. The President of the society shall nominate two Vice Presidents who shall be Principal Secretaries to the Government of Andhra Pradesh, for Finance and MA&UD departments respectively. The Government shall appoint a senior officer of Indian Administrative Service as Director General of SIUMAP who shall head the SIUMAP as its chief executive authority. The Director General of the society shall be the Member Convener of the Governing council of the SIUMAP society. The society shall have a memorandum of association and the following membership structure. a. Founding members: All the Members of the Empowered Committee of the Andhra Pradesh Municipal Development Project shall be the Founder members of SIUMAP. The following are the founder members of the SIUMAP society. Member Designation Chief Secretary Principal Secretary (Finance) Principal Secretary(Revenue), Principal Secretary,(Transport), Principal Secretary(EFST) Principal Secretary (Irrigation) Principal Secretary (IT), Principal Secretary (Rural Development), Commissioner and Director , Municipal Administration Managing Director, APUFIDC / Secretary APUIF Principal Secretary (MAUD), Secretary (MAUD), Chairman Member Member Member Member Member Member Member Member Member Member Member-Convener b. Nominated Members: The General body shall also have six nominated members from the Government of India, Research and Academic institutions, and two Elected Chairperson representatives from Urban Local bodies. Two nominated members each shall be selected from, a) a Pool of Senior Government officials in working in the area of urban affairs and Finance from Government of India identified by the Governing council, ii) Pool of Chairpersons of Urban Local bodies identified by the Governing council, iii) Pool of eminent academicians and researchers working in Management and urban affairs identified as by the Governing council. The following are the nominated members to the General body of 347 SIUMAP, a) One Representative of Ministry of Urban affairs, Government of India, b) One Representative of Finance Department, Government of India, c) Two elected Chairpersons of an ULB in the state of Andhra Pradesh nominated by the C&DMA and d) Two eminent Researchers and/or academicians with extensive experience in Urban affairs and management as nominated by the Secretary MA&UD department. c. Patron Members: The Society shall also qualify and admit members from diverse stakeholders in the area of Urban affairs for a membership subscription fee. These patron members are basically various stakeholders in Urban affairs of Andhra Pradesh both from Government and otherwise. The members are admitted to the fold of SIUMAP society primarily to bring together diverse opinion and voice of various stakeholders and to make them part of Urban development policy formulation and also to contribute to various activities of the SIUMAP. The patron members can belong to different categories namely Individuals, Institutions, Corporate bodies National and international donor organizations, State governments, Central government departments and Urban local bodies, who shall be represented by their authorized representatives in the General body of SIUMAP. The Governing council is the executive body of the SIUMAP society and shall lay down guidelines on rules of membership to admit patron members into the society for an annual or a life time subscription fee. All the members of the society namely the Founding members, Ex-officio nominated members and the Admitted patron members shall form the General body of the Society. The initial terms and conditions applicable and the manner of receiving applications for admission of different categories of members shall be determined by a committee consisting of the President and Vice-Presidents of the Governing council of SIUMAP society and two or three founding members of the society. Subsequently after the constitution of the complete Governing council, the membership rules can be further amended as per the SIUMAP’s requirements. The patron members are non-executive members of the Society. Patron members shall get involved in all developmental activities of SIUMAP to strengthen the capacity enhancement initiatives undertaken by SIUMAP in furtherance of its objectives. Some of the activities identified for involvement of patron members are resource mobilization for training and research, sponsorship of research and training programs, mobilizing participation in urban development schemes, sponsoring fellowships and scholarships, etc. The Governing council of the General body of SIUMAP shall lay down the principles and guidelines for admission of patron members and their involvement in the affairs of the SIUMAP. The Annual membership of SIUMAP society is Rs 100000/- and Life time membership is Rs 500000/- for all Institutional members. The institutional members can nominate five representatives from each institution to General body meeting or any other meeting held by SIUMAP society. The Annual membership fee for Individuals is Rs 20000/- and life time membership for individuals is Rs 100000/-. All the Patron members shall receive the Annual report and other publications of the SIUMAP. i) Roll of Members: The Institute shall keep a Roll of Members giving their occupations and addresses and every member shall sign the same. If a member of the Institute changes his address, he/she shall notify his new address to be entered in the Roll of Members. If the member fails to notify his address, the address given in the Roll of Members shall be deemed to be his address. a. The Institute shall maintain a Roll of Members, who have been admitted and paid their subscription, stating their full address as given in the application for membership. 348 b. Whenever any member changes his address, he shall notify his new address to the executive authority of the Institute, but if he fails to notify the change, his address, as recorded in the RolI of Members, shall be deemed to be his address. c. The rights of Patron Members and Corporate Members shall be exercised by respective representatives, whose names are notified in writing to executive authority of the Institute (Director General of SIUMAP) from time to time. d. When a person is a Member of the Institute or its Governing Council by virtue of an office held by him, his membership shall terminate when he ceases to hold that office and the vacancy so caused shall be filled by his successor. e. A member of the Institute may resign by a letter addressed to the executive authority of the Institute, but his resignation shall take effect only on its acceptance by the Governing Council. f. In all proceedings of the Institute, no person shall be entitled to vote or be counted as. a member, whose subscription at that time has been in arrears for a period exceeding three months as per relevant section of the Act. g. A member of the Institute shall cease to be such a member if he becomes unsound of mind or insolvent or is convicted of a criminal offence involving moral turpitude. ii) Meetings of the Society: a) Annual General Meeting: The General Body of the Institute shall meet at least once a year at a time and place as may be determined by the President to transact the following business:i. to appoint Auditors each year; ii. to consider the Annual Report along with Annual Accounts of the Institute; iii. to consider any other matter of which seven days notice has been given in advance to the Director General, in writing and any other ancillary business as may be brought forth with the permission of the Chairman. b) Extraordinary General Meeting: The President may convene Extraordinary General Meeting of the Institute on the written requisition of not less than one-fifth of the members of the Institute. Every requisition so made by the members of the Institute shall express the objects for which the meeting is proposed to be called and shall be left at the address of the Director General or posted to his address. Upon receiving any such requisition, the Director General in consultation with the President shall forthwith convene a meeting of the Institute. At all Extraordinary General Body Meetings, no subject other than that stated in the notice of the requisition, shall be discussed, except with permission of the President. c) Notice: Every notice calling a meeting of the Institute shall state the date time and place at which such meeting shall be held and shall be served upon every member of the Institute not less than fifteen days before the day appointed for such a meeting. d) Quorum: Any ten members present in person shall form a quorum for any meeting of the General Body. e) President of the Meeting: The President and in his absence one of the Vice-Presidents and in their absence one of the members to be elected by those present shall preside at the meeting of the General Body. f) Decisions by Majority: All matters before the General Body of the Institute shall be decided by a majority of those present and voting and the presiding officer shall have a casting vote. iii) Office Bearers of the SIUMAP society 349 The office bearers of the Institute shall be:The Government of Andhra Pradesh shall appoint a Director General as the executive authority to head the State Institute of Urban Management, Andhra Pradesh. The term of his or her office and other conditions of service to be such as may be determined by the Governing Council, which shall be constituted by the Chairman of the Empowered committee (Founding members) of APMDP. The Chairperson of the Empowered Committee of APMDP shall become the Chairperson or President of the Governing Council of SIUMAP. The Principal Secretary (Finance) and Principal Secretary (MA&UD) shall be the Vice Presidents of the Governing council. The Director General of SIUMAP shall be the Member Convener of the Governing council. The President of the Governing council shall appoint other members of the Governing council. The members of the governing council shall form the Office bearers of SIUMAP society. iv) Body of the Institute at the Annual General meeting-GENERAL i. ii. No proceedings of the General Body of the Institute or the Governing Council shall be deemed to be invalid by reason merely of any Vacancy in or any defect in the constitution of the Institute or the Governing Council as the case may be. The income and property of the Institute however derived shall be solely applied towards the promotion of the objects of the Institute as set forth in the Memorandum of Association. No portion of the income and property of the Institute shall be paid or transferred directly or indirectly by way of dividends, bonus or otherwise howsoever by way of profit to persons who at any time are or have been members of the Institute or to any of them, or to any claiming through them or any of them, provided that nothing herein shall prevent the payment in good faith of remuneration to any members or other person in return for service rendered to the Institute or for traveling allowance, halting allowances and other similar charges. v) Service of Notice i. ii. A notice may be served upon any member of the Institute either personally or through the post at his/her addresses mentioned in the roll of members. Any notice so served by post shall be deemed to have been served on the day following that on which the letter, envelope or wrapper containing the same is posted and in proving such service it shall be sufficient to prove that the cover containing such notice was properly addressed and put into the Post Office. 8) Governing Council of SIUMAP, AP Society i) Composition of the Governing Council The Governing council is the Executive committee of the society which confers powers needed for execution of various duties for furtherance of the objectives of the society. The Governing council of the society shall be drawn from the General body of the Society The Chairperson of the Empowered committee of APMDP (Founding members), the Chief Secretary to the Government of Andhra Pradesh shall be the President of the Society and the chairperson of the Governing council, the Principal Secretary to the Government of Andhra Pradesh, MA&UD department shall be one of the Vice President of the Society and the Vice chairperson of the Governing council and the Principal Secretary to the Government of Andhra Pradesh, Finance department shall be the Vice chairperson of the Governing council and the Vice President of the society. The Government of Andhra Pradesh shall appoint a Director General for the SIUM society, who shall be the Secretary (member convener) of the society. The Director General shall be the chief executive 350 authority of the SIUMAP and shall be responsible to the Governing council of SIUMAP. The Director General shall be the Secretary of the Society and Member Convener of the Governing council. The Government of Andhra Pradesh shall appoint an Executive Director of SIUM, who shall assist the DG in the regular administration of the institute. The Executive Director shall hold the position of Treasurer of the SIUM society and shall be a member of Governing council. The Governing council shall have eleven executive official members and four nominated members. Five of the executive official members are President, two Vice Presidents, One Secretary cum Member Convener and One Treasurer shall be the office bearers of the Society. Six more members shall be nominated by the Chairperson of the council from the various heads of departments of stakeholder organizations in MA&UD department. Out of four nominated members two of them shall be Ex-officio members and two shall be Patron members admitted to the General body. The Chairperson of the council shall nominate two Patron members to the council to take into consideration the diverse opinion and understand the views of all the stakeholders. In total the Governing council shall have twelve members. The Governing council shall meet at least twice every year and review the performance of the SIUMAP. The Director General as Member Convener of the council shall be responsible for schedule of the meetings with the approval of the Chairperson. Annual Report of the previous year of SIUMAP shall be presented to the Governing body in the first meeting of the financial year by the Director General, SIUMAP which shall be approved for presentation in the Annual General Body meeting. The Governing Council shall review all strategic issues relating to SIUMAP and shall provide guidance and direction to the institute on various matters in addition to all approvals to the autonomous SIUM. The Chairperson shall also have powers to constitute different sub-committees and study panels from time to time for meeting the objectives of the society. The Chairperson shall constitute a Monitoring and Review (M&R) committee for review of the management of operational activities of SIUMAP. The M&R committee shall monitor, review and validate all the proposals of SIUMAP before they are put up before the Governing council or the Annual General body. The M&R committee shall play an advisory cum review role for SIUMAP, while upholding and facilitating its autonomy. ii) Functions of the Governing Council The Governing council shall have the following powers and functions, a. Observe the provisions of the memorandum of Association, Articles of Association and such instructions of the Government of Andhra Pradesh; b. Exercise general control and issue such directions for the efficient management and administration of the affairs of the Institute as may be necessary; c. Approve the annual budget of the Institute including addition or reduction of manpower with recommendation on allowances d. Consider the Annual Report and audited Annual Accounts, of the Institute for the immediately preceding financial year along with the Audit Certificate, the Audit Report, and replies of the Institute to the observations contained in the Audit Report; e. Add to, amend, vary or rescind, any of these rules mentioned in the Memorandum of Association; f. Perform such other functions as are entrusted to it under these rules. g. Approve bye-laws in its first meeting with any modifications/amendments which may be necessary. 351 iii) Terms of the Governing Council: a) The tenure of founding and ex-officio members of the Governing body shall be coterminous with their appointment in their posts and the nominated members shall have tenure of three years; b) The nominated Patron members of the Governing body shall be appointed by the Chairperson of the Governing council. The casual vacancies in the Governing Body due to death or resignation or otherwise shall be filled by the Government; c) The meeting of Governing council shall be held at such date, time and place as may be determined by the President; d) The Governing council shall meet at least once in six months duly giving notice of at least fourteen days; e) For the purpose of the preceding sub-rule, each year shall be deemed to commence on the first day of April and terminate on the thirty first day of March of the following Calendar Year; f) The Chairperson of the Governing council shall call a special meeting, if 1/3 rd of its members make written requisition. He may also call special meeting on his own accord whenever he thinks fit. In both cases, a notice of at least 6 days shall be given; g) In the absence of the chairperson, the senior Vice-chairperson shall preside; h) One-third of the members shall form the quorum for a meeting; i) Each member shall have one vote; j) The voice of majority shall prevail, if there is a difference of opinion; k) If there is equal division of votes on any matter, the President of the meeting shall have a casting vote; l) The chairperson may invite any person other than member, to attend a meeting of the Governing council, m)The Governing council shall function notwithstanding any vacancy therein and notwithstanding any defect in the appointment, nomination or election of any member and no act or proceedings of the Governing council shall be invalidated or nullified merely by reason of the existence of any vacancy therein or any defect in the appointment, nomination or election of any member; and n) Where for any reason it is not possible for the Governing council to meet, any business which it may be necessary for the Governing council to perform may be carried out by taking the approval of the Chairperson after due recommendation by the Monitoring and Review Committee, provided that the ex-post-facto approval of the Governing Council shall be obtained at its next meeting. 352 iv. Powers of the Governing Council The general superintendence, direction and control of affairs, funds, assets and properties of the Institute shall vest in the Governing Council, which shall exercise all powers and do all acts and things which may be necessary or expedient for the furtherance of the objects of the Institute. v.Legal powers The Governing Council may on behalf of the Institute sue and defend all legal proceedings through the Director or such other officer as may be designated for the purpose by the Governing Council in accordance with relevant section of Act. vi. Bye-laws The Governing Council shall formulate and approve bye-laws,as it deems fit for the regulation of the business of the Institute and in particular with reference to the appointment of the staff, their condition of service, preparation and sanction of budget estimates, the sanctioning of expenditure, entering into contracts and investment of the funds of the Institute provided that, (i) the structure of emoluments of posts, i.e. pay scales and allowances and revision thereof, and (ii) creation of additional posts above the pay level specified by the Department of Finance from time to time, shall come into effect only after the approval of the Department of Municipal Administration and Urban Development, Government of Andhra Pradesh in consultation with Department of Finance, Government of Andhra Pradesh. Provided, further, that, the approval of the Department Of Expenditure, may not be necessary for the creation of posts of Project Consultants as well as posts for projects sponsored by other organizations, required for specific periods, and also for the terms and conditions of appointment to such posts. vii. Acceptance of Endowments and Grants The Governing Council may accept the management of any endowment, trust or donation provided that it is unaccompanied by any condition inconsistent or in conflict with the objects of the Society. viii.Delegation of Powers The Governing Council may by Resolution delegate to the Chairperson, Director General or any officer or any Committee or Sub-Committee which may be formed, such of its powers for the conduct of business as it may deem fit. ix. Committees and Study Panels The Governing Council may by Resolution appoint:(a) Committees for such purposes and with such powers as the Governing Council may think fit, and lay down rules of procedure for such Committees; and (b) Specialists' Panels and Expert Working Groups, drawn if necessary from nonmembers, for studies and investigation in particular fields and make necessary provision for their functioning. x. Meetings of the Governing Council a. Method of Calling Meeting of Governing Council: The Chairperson himself can, or by requisition in writing signed by him may require the Director General to call a meeting of the Governing Council at any time and on the receipt of such requisition the Director shall forthwith call such meeting. 353 b. Notice of Meeting of Governing Council: Not less than seven clear days' notice of every Meeting of the Governing Council shall be given to each member of the Governing Council. c. Presiding Authority: Every meeting of the Governing Council shall be presided over by the Chairperson. If the Chairperson is not present at any meeting one of the ViceChairpersons and in their absence one of the members chosen by those present shall be the Chairman of the meeting. d. Quorum: Any six members out of twelve members of the Governing Council present in person shall form a quorum for any Meeting of the Governing Council. e. Decisions by Majority of Vote: All matters at a meeting of the Governing Council shall be decided by a majority of those present and voting and in case of an equality of votes, the Chairman shall have a casting vote provided further that, in the event of disagreement between the ex-officio member nominated in accordance with subclause (b) of clause (1) of Rule 9 and the Chairman of the Governing Council on any financial matter which is beyond the powers delegated to the Ministry of Urban Affairs & Employment, Govt. of India, the matter shall be referred to the Ministry of Urban Affairs & Employment and the Finance Minister for a decision. f. Business by Circulars: Any business which it may be necessary for the Governing Council to transact may be transacted by circulation among all its members and any reso1ution so circulated and approved by a majority of the members shall be as effectual and binding as if such resolution had been passed at a meeting of the Governing Council. xi. Names and Address of the Present members of the Governing Council (Executive Committee) of SIUMAP: SNo 1 2 3 4 5 6 7 8 9 10 11 Name in full Designation Address Chief Secretary to the Government Principal Secretary (Finance) Principal Secretary (MA & UD) Department Director General,SIUMAP Secretary(MA&UD) Commissioner and Special Officer, GHMC Commissioner and Director of Municipal Administration MD of HMMSWB MD of HMDA MD of APFUIDC Executive Director, SIUMAP Secretariat, Hyderabad Governing council position Chairperson Secretariat, Hyderabad Secretariat, Hyderabad Vice Chairperson Vice Chairperson SIUMAP, Hyderabad Secretariat, Hyderabad GHMC, Hyderabad Secretary Member Member Secretariat, Hyderabad Member HMMSWB, Hyderabad HMDA, Hyderabad APFUIDC, Hyderabad SIUMAP,Hyderabad Member Member Member Member *The names and addresses shall be filled at the time registration Within a fortnight of the Annual Meeting every year, a list of names, addresses and occupations of the members of the Governing council( Executive Committee) shall be filed with the Registrar of Societies under the provisions of the A.P. Societies Registration Act 2001 (Act 35 of 2001). 9. Thematic and Thrust Areas: 354 The main function of State Institute of Urban Management, Andhra Pradesh (SIUMAP, AP) is to design and impart state of the art training for the executive and legislative functionaries of the Urban Local Bodies (ULB) in Andhra Pradesh. The institute shall also conduct research in various areas of urban governance and development and shall aim at evolving as a Policy support organization for formulation of urban reform and developmental policy and as a nodal organization for advisory support for implementation of developmental schemes in urban areas. It is also envisaged that institute shall establish information clearing house and Knowledge repository and library in urban affairs for the state of Andhra Pradesh. The institute shall also produce high quality research publications and literature various thematic areas of Urban affairs. These thematic areas shall form a framework for identification of the thrust areas for design of training curricula and planning for training courses. The following are the core thematic areas of research at SIUMAP, AP. The three major thematic areas identified for SIUMAP under Urban affairs are i) Urbanization, Urban policy and Urban management, ii) Urban Governance and iii) Urban Poverty alleviation and generation of sustainable livelihoods. The three thematic areas shall have three Centres at SIUMAP and all the three centres shall be collectively called as Centre for Excellence in Urban Affairs. Each of these three centres shall be headed by a Professor and shall have other faculty to support Training, Research and policy support activities. The senior most professors among the three centres shall be the head of the Centre for excellence on Urban affairs and shall be conferred with Additional Director designation with responsibility of coordination of administration affairs. The below thrust areas under each thematic area are not exhaustive and can be redefined on a regular basis with the approval of the Governing council of SIUMAP, AP. a. Thematic Area:1- Urbanization, Urban Policy and Urban Management: This thematic area focuses mainly on development of Urban policy tailored to meet the growing needs of urbanization. The area shall explore the study, research, review and formulate urban policies for the development of urban management models to meet the growing needs and challenges of urbanization in the state of Andhra Pradesh. The thematic area shall be managed by the Centre for Urbanization, Urban Policy and Urban Management at SIUMAP, AP. This area shall broadly encompass the i) Urban planning and Infrastructure development, ii) Urban finance policy, iii) Enabling Technologies for Urban Development and iii) Urban Sanitation and Environment Management. An Urban Infrastructure and Planning Cell shall be part of this thematic area exclusively to study issues on Urban infrastructure development. Research and Publication activities in this thematic area shall form the major thrust for the design and development of training programs and curricula in this area. The main focus of such training programs in this area shall be on capacity building of senior level Department officials and the Legislative functionaries (Elected representatives of urban local bodies). The center shall also conduct policy level research and design training programs on technology enablers which improve urban management (both internal administration and citizen service delivery). The emphasis for technology based research and training programs shall primarily be on alignment of technologies to administrative process flows of the government. The following are the thrust areas under this thematic area on which research and training programs shall be based. i. Conceptualization, design and development of Urban infrastructure i. Performance improvement of functioning of Urban Local Councils 355 ii. Management of Urban Environment and new developments in Urban Sewerage management, solid waste management, sanitation and public health. iii. Information Technology and other enabling technologies for Management of Urban Services iv. Resource Mobilization implementation v. Privatization, Pricing and Cost Recovery with respect to Public Private Partnership and Shared Service models for improving efficiencies of Urban local bodies vi. Valuation and Assessment of Municipal Taxes and Municipal Tax administration-Revenue management and Procedural compliance vii. Project Formulation for Urban Infrastructure viii. Development of Suburban areas and Satellite townships ix. Utilities and Urban management policy x. Urban Transport mechanisms and Implementation policy xi. Paradigms of Urbanization and Urban Planning & Financing of Urban Infrastructure-urban planning and b. Thematic Area-2: Urban Governance The second thematic area shall primarily focus on strengthening the internal administration of urban local bodies and building capacities of the Municipal functionaries for improvement of services to citizens. This area shall have themes addressed for improvement of services for each section of the ULB administration. Based on the broad thematic areas, thrust areas for development of training courses and curriculum shall be developed for the following. The training programs under this thematic area shall be directed mostly for the ULB staff. Training for both senior and junior staff shall be part of this thematic area. i) Municipal Finances, Audit and Accounting-Standardization of procedures and enabling compliance. ii) Tax administration and Revenue management at ULBs. iii) Citizen Charter and Streamlining Citizen services iv) Technologies for improved Town planning and Building permission procedures v) Improved methods for Solid waste management and Urban Sanitation vi) Human Resource Development for Public managers(Commissioners and Senior officials) vii) Interdepartmental cooperation and Administrative procedures viii) Single window Service delivery mechanisms ix) Municipal Accounting, Book keeping and Audit x) Public/Municipal Finance Management xi) Project Management for Municipal Managers and Engineers xii) Assets and Inventory management at ULBs xiii) Procurement methodologies for Urban management. 356 c. Thematic Area-3: Urban Poverty alleviation and generation of sustainable livelihoods The third thematic area shall focus on the functioning and improvement of urban poverty alleviation and welfare schemes for generation of sustainable livelihoods in urban areas of Andhra Pradesh. Under this theme research shall be carried out in the following major thrust areas. The training programs based on the below thrust areas shall be for both Municipal Functionaries and the Elected representatives. i) Improvement of Program and Scheme management service delivery ii) Urban housing scheme management iii) Generation of employment and sustainable incomes for the urban poor iv) Slum area improvement programs v) Provision of Basic utilities (Clean drinking water, Cooking gas and electricity) for urban poor. vi) Community participation in Urban development vii) Urban thrift groups and financing micro-enterprises. viii) Urban Public health program monitoring and improvement ix) Alignment of Legislative goals to the executive functions for poverty alleviation. Organization of State Institute of Urban Management (SIUMAP), Andhra Pradesh SIUMAP aims to be a premier training institute for building strong capacities among the functionaries of Urban Local Bodies in Andhra Pradesh. In addition to Training ULB and departmental employees and elected representatives, SIUMAP shall engage in Policy support and Research to the Government of Andhra Pradesh to buttress and strengthen the Citizen Service delivery and urban poverty alleviation programmes. SIUMAP shall enter into partnership with various institutes of national and international repute for furtherance of its objectives in different areas. SIUMAP shall conduct training programmes and workshops for capacity building of Urban Local Body staff and administrators, community facilitators and elected representatives. The core activities of the Institute shall be carried out by an experienced and multidisciplinary in-house faculty team with experience in Urban reforms and development, Management sciences, Public policy, Engineering, Public health, Urban planning, Finance, Economics, Sociology, Information technology, Government affairs, etc. External faculty with strong domain experience in various thematic areas shall also be invited by the institute on a periodical basis as per the requirements. The Governing council of the SIUMAP society is the apex decision making body for the institute and the Institute shall be headed by the Director General, who is appointed by the President of the Governing council of SIUMAP. The Director General is the Chief executive authority of SIUMAP and shall be assisted by the staff of SIUMAP in deliverance of the duties as per the objectives and mandate of the SIUMAP society. The Director General shall be responsible for performance of all the activities and duties of SIUMAP. a) Monitoring and Review committee There shall be a Monitoring and Review Committee for SIUMAP which shall be constituted by the Governing council to bring together various government stakeholders in Urban affairs of Andhra 357 Pradesh to review the strategic/operational proposals and plans, Training, Research and Policy support activities and outcomes, Stakeholder/trainee feedback, budgets, partnerships and alliances and any other matters relating to SIUMAP before the same is put up before the Governing council’s final approval. The committee shall function under the general control and direction of the Governing council of the SIUMAP society to facilitate improvements in the functions of SIUMAP in the process of meeting the objectives. The committee shall oversee and review the functioning of SIUMAP in accordance with the memorandum of Association of the society and the rules and service bye-laws made there under for furtherance of the objectives of the society. The committee shall specifically review the training need assessment status, training program and the research output and effectiveness on a regular basis and shall review the institute’s budget before the final approval and sanction by the Governing council. The society shall be consisting of the following members. 1. The Director General of SIUMAP shall be the chairperson 2. The Commissioner and Director of Municipal Administration shall be the Vice-Chairman 3. Managing Director, APUIDC shall be the Member 4. Mission Director, MEPMA shall be the Member 5. Director of Town and Country Planning shall be the Member 6. Engineer – in – Chief, PH shall be the Member 7. The Nominee of Director General of MCRHRDTI/CGG shall be the Member 8. The Nominee of Commissioner and Special Officer GHMC 9. The Nominee of MD,HMDA 10. The Nominee of MD,HMWSSB 11. The Executive Director of the Institute shall be the Member-Secretary i) Functions and Powers of the Monitoring and Review Committee: The Chairman of the Monitoring and Review (M&R) Committee shall call the meeting of the Committee after giving a notice of at least three days. In case of emergency meeting, a notice of 24 hours shall be sufficient. The quorum shall be of half of the number of members. At least three meetings of the Committee shall be held in one year. The following are the functions of the M&R committee of SIUMAP. Subject to the general control and direction of the Governing Council, the M&R Committee shall be responsible for the management and administration of the affairs of the Institute in accordance with the rules and the Bye-laws made there under for the furtherance of the objectives of the SIUMAP and shall have all powersadministrative and financial which may be necessary or expedient for the stated purpose; The M&R Committee shall have the following powers and functions, namely to: a) Review and approve the detailed plans (annual and periodical) and programmes submitted by the Executive Director and Centres of Excellence on Urban Affairs for the furtherance of the objectives of the Institute; b) Review creation and recruitment of posts, and appointments for staff other than those for whose appointment, specific provision has been made elsewhere, as may be required for the efficient management of the affairs of the Institute and approve activities to regulate the terms and conditions of their services as per the Service byelaws before presenting the same for the approval of Governing council. c) Review the Budget proposals and fund status of the Institute and advise the Director General regarding specific requirements of the stakeholders; 358 d) Monitor the Earnings, Expenditure and Investments of SIUMAP and review the purchases, hire/lease/exchange and other transactions dealing with movable or immovable assets of the Institute provided. e) Review any issues relating to contracts, collaboration agreements, general/special instruments, service agreement, agreements containing arbitration clauses, indemnity bonds, and deeds in respect of or connected with sale/lease/license, mortgage, hypothecation or other deeds of a legal character of whatever description, powers of Attorney, enforce any other legal rights and incur legal expenses entered by the Institute. Provided that these powers are exercised for and on behalf of the Institute; f) Support the Director General in defense of all legal proceedings on behalf of the Institute; g) Appoint Committees, with or without the power to co-opt, for disposal of any business of the Institute or for advice in any matter pertaining to the Institute; Provided that in cases of emergency, the Chairman of the M&R Committee shall have the power to appoint such committees in consultation with the Director General of the institute; h) To accept the management of any endowment, trust, fund, subscription or donation; Provided that it is not attended by any condition inconsistent, or in conflict, with the objectives of the Institute; i) To prepare for the Governing council and General body meetings on all matters connected with the budget of the Institute; j) To incur expenditure subject to the provisions of the approved budget for specific purposes related to the conduct of the affairs of the SIUMAP society. Provided that where, in the opinion of the Chairperson, an immediate decision on any matter is essential, he/she may, within the ambit of operational necessity and efficiency or to meet an emergency, authorize the incurring of expenditure not covered by the provisions of the budget in consultation with the Director General of SIUMAP and Provided further that a report would be made to the Governing Body at its next meeting and its ex-post-facto approval obtained, wherever necessary; and k) To lay down terms and conditions governing scholarships, fellowships, deputations, grants-in-aid, research schemes and projects; The M&R Committee may by resolution delegate to its Chairperson, to any Committee, or to the Commissioner and Director of Municipal Administration or Director General or to any other officer of the Institute, such of its powers for the conduct of business as it may deem fit, subject, if deemed necessary to the condition that the action taken by the Director General or other officers under the powers of delegated shall be subject to confirmation at the next meeting of the Executive Committee. a. Powers and functions of the Director General of the Institute: The Director General shall be responsible for the over-all supervision of the affairs of the Institute under the direction and guidance of the Governing Council. He shall regulate the work of the Institute undertaken in furtherance of its objects as its technical and academic head. He shall be responsible for all administrative duties as the Chief Executive Officer of the Institute, control the academic, professional and other staff and perform all duties and exercise all powers assigned to him under these, rules or entrusted or delegated to him by the Governing Council. 359 (i) The Director General of the Institute as head of the institute shall be responsible for administration of the affairs of the Institute and shall exercise powers under the direction and guidance of the Executive Committee; (ii) It shall be the duty of the Director General to coordinate and exercise general supervision over all the activities of the Institute; b. Selection Committee: There shall be a minimum permanent In-house faculty of SIUMAP. Utmost care shall be taken in appointing the Researchers/Trainers/Faculty Members in the Institute. In order to attract the best talent on a competitive basis there shall be a Selection Committee to select the faculty and staff of the Institute including personnel to be appointed on deputation or contract basis. The Director General of the Institute shall be the Chairman of the ‘Selection Committee’. The other members of the Selection committee shall be nominated by the M&R Committee from time to time. Although initially the staff shall be recruited on deputation, faculty is recruited with UGC scales and contractual staff is recruited based on Government guidelines, SIUM shall develop a rationalized emoluments and benefits plan for all its employees under the guidance of Director General with the approval of the Governing council. After approval of the Emoluments and benefits plan, SIUM shall follow a flexible salary structure and emoluments, commensurate with qualifications and experience. The flexible salary structure shall be applicable for all the managerial staff, In-house faculty, Resource personnel and Consultants, administrative and contractual staff of SIUM. Thus the selection committee shall offer competitive pay and allowances to attract quality manpower and talent for all the human resources of SIUM. c. Operational Guidelines Handbook of the Institute: An Operational Manual for effective management of the Institute including the functions of various officers and staff of Institute shall be prepared separately and adopted after approval of the Executive Committee. d. Annual Report: The Annual Report of the proceedings of the Institute including all works undertaken and various achievements made, during a year together with the Audited Annual Accounts (viz., Receipts and Payments Accounts, Income and Expenditure Accounts and Balance Sheet) for the year, the Audit Certificate, the Audit Report and replies of the Institute to the observations contained in the Audit Report shall be placed before the Governing Body at its next annual general meeting through the Governing council. The Governing council shall cause a copy of the Audit Report along with its observations thereon to be submitted to the Government of Andhra Pradesh after the Annual General Meeting. e. Organization Structure The State Institute of Urban Management, Andhra Pradesh shall be headed by a Director General who shall be a senior officer of Indian Administrative Service. The Director General shall be Secretary and member convener of the Governing council of the SIUMAP and the Chairperson of the M&R committee of SIUMAP. The Director General shall also represent SIUMAP for all administrative 360 matters and in all events of national and international importance. The Director General shall belong to the Indian Administrative service and shall be appointed by the Government. The Director General shall be assisted by an Executive Director, who shall be responsible for day to day administration, training, Infrastructure maintenance and development and finance and any other powers delegated by the Director General. The Executive Director shall be an officer of Indian Administrative service or equivalent service who shall be responsible for day to day administration and maintenance of all the functions of the institute as assigned by the Director General of SIUMAP. The following units shall function under the leadership of the Director Genera which include the; i) Centre for excellence (CoE) in Urban Affairs comprising of a) Centre for Urbanization, Urban policy and Urban Management b) Centre for Urban Governance, c) Centre for Urban Poverty alleviation and sustainable livelihoods, and other Administrative, support and maintenance units such as i) Administrative, Accounts, Stores, Training cell and Establishment section, ii) IT cell and iii) Library, Documentation and Publications Unit. An Urban Infrastructure and Planning Cell as a specialized cell within the Centre of Urbanization ,Urban policy and Urban management and shall be a technical agency which shall produce all the relevant support in Urban infrastructure and town planning domain for meeting all the objectives of the institute. Similarly the IT cell shall not only provide IT infrastructure maintenance support, but also be a functional unit which shall provide information and training support on all matters relating to the use of Information and communication technologies and other technologies like GIS,GPS, etc at ULB offices as part of the meeting the objectives of the institute. The Administration, Accounts and Establishment section shall be responsible for General administration, Accounts management and regular upkeep, maintenance of institute’s infrastructure and management of logistics. As SIUMAP, AP is positioned as a premier academic and research organization, appropriate experienced merit based recruitment of staff shall be followed at all levels. The faculty of the institute shall mainly be involved in Research and Training functions. The Director General shall also invite eminent faculty for training and research functions. The personnel at Centres of Excellence shall be dedicated only for Research and training functions and all other units of the organization shall support their efforts under the guidance and leadership of the Director General of the institute. The head of the Centres for excellence in urban affairs shall be of an Additional Director rank and shall attend to the administrative activities for coordination of research and training initiatives and any other duties as assigned by Director General. It is envisaged that the quality of the research and training output of the Centres of Excellence is directly proportional to the success of the training programs and all other research and policy initiatives of the SIUMAP, AP. Therefore the institutional focus shall be more on the development of Centres of Excellence as advanced centres of learning and research. To meet this objective the faculty at Centres of excellence shall be supported adequately in terms of manpower and training grants to attract the best in the country. 361 f. Administrative and Governance set up The Institute's policies and directions are determined by the Governing council of the SIUMAP society which shall meet at least twice annually and review the functions of the SIUMAP. The M&R council of the institute shall provide assistance and support for the function of the Governing council meetings. While Governing council shall be involved in providing strategic guidance to SIUMAP, M&R committee shall be involved in providing both strategic and operational support to meet the institute’s objectives. An Operational guidelines Handbook for effective and efficient management of the Institute including the Service byelaws, functions of various officers and staff of Institute shall be prepared separately under the guidance of the Director General and shall be adopted after approval of the M&R Committee. Figure2: Organization structure of the State Institute of Urban Management, Andhra Pradesh g. Managerial Staff of the Institute The institute shall be started with core managerial staff members at the inception stage funded by APMDP during the project period with most of the Key Administrative staff to be appointed on deputation basis by the Government. During the initial phase operational, maintenance and support staff shall be outsourced and the faculty and other key functional staff shall be recruited by a selection committee constituted by the Director General and approved by the M&R committee. Other staff as approved subsequently by the Governing council shall be funded from the General funds of the Institute. The institute shall however from time to time source resource persons, Consultants, domain specialists and other professionals on piece rate basis for conducting Training programs and to meet other objectives of the institute. All the other operational and maintenance 362 staff shall be outsourced in the first year during the institute’s establishment. The key managerial staff of the institute who shall be initially recruited for establishment of the institute are as follows. The details of the Job description of the staff that shall be supported from APMDP for the duration of the project are as follows. SNo Staff Designation Director General’s Office 1 Director General Number Description of Qualifications One (On Deputation) Senior post of Indian Administrative Service or equivalent 2 Executive Director One (On A Junior post of Indian deputation) Administrative service or equivalent 3 Private Secretary to DG One (On On deputation(IT experience is Deputation) highly desirable) Administration and Establishment(Administration, Accounts, Stores, Training maintenance) Section 1 Additional Director One (On Senior officer from (Administration, Deputation) C&DMA/MA&UDD of Training and Additional Director cadre Infrastructure) 2 Assistant Director One (On Assistant Director cadre from (Administration and Deputation) the Municipal Department on Finance ) deputation with Experience in Finance section 3 Senior Assistant with IT One (On On deputation from MA&UDD experience for deputation) Administration and Stores 4 Senior Assistant with IT One (On On deputation from MA&UDD. experience for Training Deputation) cell 5 Accountant with IT One(On On deputation from MA&UDD. experience for Finance Deputation) and Accounts 6 Junior Assistant with IT One(On On deputation from MA&UDD. experience for Deputation) Infrastructure maintenance Centre for Excellence in Urban Affairs 1 Professors (One each Three (As In- One with PhD in Public policy for each of the three house faculty) Finance or Economics, or Public Centres) Administration, or Professors with 20 Management Sciences years of total background for heading the experience of research Centre for Urban Management. or academic work in -One with PhD in Urban training and research Economics, Public Finance, organizations of Public administration/policy, Government of India or Management Sciences for Andhra Pradesh. (–PhD heading Centre for Urban essential for a Governance professor post) -One with Developmental economics, Sociology, Psychology, Human Resource development background for heading Centre for Urban 363 Pay On their own pay On their own pay On their own pay Cell & Infrastructure On their own pay On their own pay On their own pay On their own pay On their own pay On their own pay UGC scales 2 Associate Professors- One (As Inhouse faculty) 3 Assistant ProfessorsPhD essential (One each for each CoE) -One with Architecture and/Or Civil Engineering background with experience in Urban Infrastructure -One with Public Finance and Accounting or Management sciences background -One with Social sciences or Management sciences background Three (As Inhouse faculty) IT cell 1 Head IT cell One (On Deputation) Library, Publication and Documentation Centre 1 Librarian One (On deputation) Contractual Staff Poverty alleviation The Senior most of the three professors shall be the head of the Centre for excellence in Urban affairs and shall be of Additional Director rank. He shall have certain administrative duties to perform mainly related to coordination between the centres of excellence and shall report to Executive Director on all operational issues. Associate Professors with 10 years experience. Should be a PhD or Post graduates with equivalent experience in Research and academics in urban affairs may also be considered. One with Architecture and/Or Civil Engineering background with experience in Urban Infrastructure who shall be incharge for the Urban Infrastructure and Planning cell at the Centre of Urban Management. Assistant Professors with 5 years experience UGC scales UGC scales District officer rank with Experience in IT sector projects for a minimum of three years on deputation On their own pay Librarian/Assistant cadre on deputation On their own pay librarian Pay decided by the Governing council as per approved 364 Government posts in similar institutes To assist different sections of the SIUMAP. Allocation of the contractual staff to various sections shall be based on the decision of the Director General. For contractual staff recruited as part of any research project deployment shall be as per project. To be outsourced through Manpower supply agencies. Training Assistants (3) System Administrator(1) Data entry operators (8) Personal Assistants cum typist (2-One each for DG and ED) Personal Secretary cum Stenographer (2One each for DG and ED) Attender cum Messengers (4) Chowkidars (2) Staff vehicle drivers (8) Receptionist cum telephone operators (1) Machine Operator (1) Gardener cum Sweepers (4) Draughtsman (1) The Director General of SIUMAP shall be the appointing authority of the above staff with the approval of M&R committee of SIUMAP and ratification of the Governing council. As an executive authority of the institute the Director General shall lead the administration and all the initiatives to meet the objectives of the society. An Executive Director shall be appointed by the Director General with the approval of the Governing council who shall assist the Director General in all Administration affairs on a regular basis for meeting the objectives of the institute. One Additional Director shall work as Incharge for Training cell and Infrastructure maintenance and administration of the SIUMAP. The Centre for Excellence in Urban affairs shall be the hub of activity for performing all the key training, and research functions of the SIUMAP. The Centre shall be headed by an Eminent Professor in Urban affairs who shall spearhead all the training, research and policy support initiatives of SIUMAP in consultation with the Director General of the institute. The Professor shall be of Additional Director designation and shall be responsible for setting the research and training agenda of the institute in consultation with the Director General. There shall be three centres for three thematic areas in Urban affairs. Each centre shall be headed by a Professor and shall have other faculty such as an Associate Professor and an Assistant Professor. The Professors of the Centres of Excellence shall be the In-house faculty of SIUMAP and shall be responsible for conduct of all the training programmes with the support of Additional Director (Admin, Training and Infrastructure). The Executive Director of the Institute shall coordinate the efforts of the faculty and administrative staff under the overall supervision of the Director General. 365 The Director General shall constitute the following sub-committees for smooth functioning of internal operational issues of the institute on a regular basis. i) Infrastructure maintenance committee (Under the chairmanship of Executive Director with Assistant Directors, Librarian and three Faculty members as members and Additional Director(Infra & Training) as Member Secretary) ii) Staff research council (Headed by Director General and Additional Director (Research and Policy support) as member Secretary,, three Faculty, Librarian as members and Administrative officer member secretary) iii) Training cell committee (Under the chairmanship of Executive Director and Additional Director (Training & Infra) as member Secretary, with Assistant Directors, Editor, Librarian and 3 faculty as members) iv) Staff welfare committee (Under the chairmanship of Executive Director with Additional Director (Training and infra)as member secretary and with Assistant Directors, Editor, Librarian and 3 faculty as members) v) Publication Committee Headed by Director General, three Faculty, Librarian as members and Additional Director (Research and Policy support),as member secretary) vi) Purchasing Committee Under the chairmanship of Executive Director, with Additional Director (Training and infra) as member Secretary, with Assistant Directors, Editor, Librarian and 3 faculty as members) vii) Other ad hoc committees as may be necessary The State Institute of Urban Management shall have the following functional units under it. 1. Centres for Excellence in Urban affairs with three sub-centres for three thematic areas namely i. Centre for Urban management, a. Urban Infrastructure and Planning Cell ii. Centre for Urban governance and iii. Centre for Urban poverty alleviation and sustainable livelihoods. 2. Administration, Finance, Stores, Training cell and Infrastructure maintenance section 3. Library, Publication and Documentation unit 4. IT cell The Centres for Excellence (CoEs) shall be headed by the Professor and Head of Urban affairs and Additional Director (Research and Policy).Rest of all the units shall be headed by the Additional Director (Administration, Training and Infrastructure). The Executive Director shall coordinate the activities of the Additional Directors and ensure smooth functioning of all the activities in the institute. The following is brief description of the functional units of the institute other than the centres of Excellence in Urban affairs. The description of Centres of Excellence in Urban affairs has been detailed in Chapter-2 of this document. i. Library, Publication and Documentation Unit The Institute shall have a state of the art Library and Knowledge repository centre which shall be the nodal information repository for urban affairs in the state. The Library of SIUMAP shall function as a State level library for Urban affairs and shall be an Information clearing house. The Library shall maintain latest publications and journals on Urban affairs and shall coordinate and seek help of National Institute of Urban affairs in establishment of online book and literature databases. The library shall have an annual budget and shall be prioritize the procurement process upon the 366 indenting from the faculty and Institute’s council. The Library shall be headed by a Librarian or an Assistant Librarian.. The publication unit shall work in close coordination with the Institute’s Library, Centres for Excellence, IT and the Training cell. The Unit shall be responsible for the production of all Published material from the institute. The Intellectual property rights for all such material shall rest with SIUMAP. The unit shall also house xerography, reprography and printing units. The unit shall primarily produce Annual Report and other reports, journals, monographs, Resource books, Training material, Brochures, Leaflets, Flyers, Training calendars, etc. for meeting the objectives of the institute. The Assistant Director (Admin) shall be responsible for maintenance and stores for the Publication unit which shall be managed in coordination with Librarian. ii. Administration and Establishment (Administration, Accounts, Stores, Training Cell and Infrastructure maintenance) The Administration and Establishment section shall be headed by the Assistant Director (Admin and Accounts) who shall report to the Additional Director (Administration, Training and Infrastructure). This section shall have five sub-sections namely i) General Administration ii) Accounts iii) Training cell (Logistics, Scheduling and Program management), iv) Stores and v) Infrastructure maintenance. Infrastructure maintenance shall also be part of this section. The main maintenance functions are i) Maintenance of the Institute’s physical infrastructure (Classrooms, Mess, Hostel, Auditorium, Conference hall, lecture halls, etc.), ii) maintenance of IT infrastructure, iii) Maintenance of vehicles and other assets of the institutes and iv) Any other maintenance activity as delegated by the Director General of the institute. The training cell shall be headed by Additional Director (Training & Infra) and shall be assisted by an Assistant Director (Admin and Accounts ) for planning, scheduling and design and conduct of training courses and programmes in close coordination with the faculty of the institute’s Centres for Excellence. The Training cell shall be responsible for management of all the training infrastructure including the Auditorium, Classrooms, Conference halls, hostel, outsourcing of vehicles, invitation of eminent faculty and arrangement of logistics and reception for all the trainees and the guests of the institute as deemed necessary. The Training cell head shall coordinate with IT cell, Administrative and Finance section, Publication unit in furtherance of the objectives of the institute. iii. Information Technology Cell There shall be an Information Technology Cell for the SIUMAP. The cell shall be headed by a District officer rank official. A SIUMAP LAN network shall be established and the cell shall be responsible for development and maintenance of SIUMAP website. The IT cell shall coordinate the management of IT infrastructure of the institute and shall be responsible for all IT related matters of the institute under the guidance of the Executive Director. The IT cell shall have a System Administrator and a Data base administrator and other staff as approved by the M&R committee of SIMAP. 367 10. Key Functional Activities The State Institute of Urban Management shall of three primary functional activities. They are i) Training ii) Research iii) Policy Support and consultancy Training shall be focused on development of courses targeted to both the Executive and Legislative functionaries of local bodies. The main aim of the training programs is to build the capacities of the ULBs in line with the objectives of enhancing the operational efficiency of ULB administration for improved delivery of services to the citizens. The Institute’s Training cell sub-committee and the Research and policy support sub-committee shall work in coordination to arrive at the Training plan and calendar every year which shall be approved by the M&R council. i) Training Areas and Courses The three functional areas of the State Institute of Urban Management shall drive one another to produce outcomes as per the objectives laid down in the Articles of Association of the institute. Capacity building of the ULB staff shall be core activity which shall be the foundation for planning and implementation of all the functional areas. As training is the key component of capacity building of ULB functionaries, all the training programs shall be planned broadly as per the thematic areas and specifically with reference to the thrust areas mentioned in chapter-2 of this document. The mode of training shall be classroom based lectures, seminars, workshops, Interactive sessions, hands-on workshop sessions, or by any other means approved by the M&R committee. Although courses shall be developed as per the key thematic and thrust areas, the Director General and the M&R committee shall continuously monitor and review the programs, training needs, curricula and propose new areas and courses if necessary. But broadly the training areas shall be functionally classified into the following areas namely, i) Training for Senior functionaries of ULBs and MA&UD department for improving Administration and decision making, Procedural aspects of administration, Project and Program management, Building skills in new technologies, etc., across all the thematic areas.[Mostly the mode of training in this area shall be in the form of 1-2 day workshops, Study tours, Seminars (1/2 day to 1 day) and interactive sessions (1-2 days) for courses in Information technology, GIS ,etc.] ii) Training programs for Elected Representatives of ULBs on Scheme implementation .(Mostly the mode of training in this area shall be in the form of 1-2 day workshops, Study tours, Seminars (1/2 day to 1 day) iii) Certification courses for Municipal staff on various functional domains based on thematic areas (The courses can be 2-7 day duration and shall be mostly based on classroom based lectures). iv) Certification courses for Technical staff (Engineering, Public Health, Town planning)(Interactive sessions of 2-3 day duration) 368 v) Provision of Online training material/videos and conducting online certification examinations for Municipal staff in various functional domains like Revenue, Engineering, Public Health and Sanitation, Engineering, Administration and Establishment, Accounts and Poverty alleviation. vi) Training programs on Accounts and Municipal Finance for Assistants, Senior Assistants, Superintendants, Managers, Accountants, etc.(3-5 day in-house training programs) vii) Training Programs on use of Information technology and other technologies for Assistants, Senior Assistants, Superintendants, Managers, Accountants, etc.(3-5 day in-house training programs) In addition to the above the areas, SIUMAP shall also conduct interactive training sessions, symposia, etc. involving various stakeholders involved in urban management like NGOs, citizen forum, Community organizers, etc. SIUMAP shall maintain a website with a link to a training portal for information dissemination and registration for training courses. ii) Research and Thought leadership in Urban Management The Centres of Excellence in Urban Affairs at SIUMAP shall nurture scholarship and advanced research towards solving various problems associated with Urban Development, Urban Governance and Urban poverty alleviation. The faculty of the institute shall conduct field based investigations and analytical studies into various challenges faced in urban areas. The research faculty shall liaise with institutes of national and international repute to exchange ideas and work on joint projects to develop long lasting solutions to the Urban challenges faced in Andhra Pradesh. SIUMAP shall take up both internal and external projects and shall also apply for competitive grants given by national and international funding agencies. Through original and peer-reviewed research, SIUMAP shall undertake though leadership publications in Urban management which shall help in dissemination of information on urban affairs within India and abroad. SIUMAP shall provide some of the thought leadership publications and articles free on its website to various researchers around the world. The executive staff of SIUMAP namely Director General, Executive Director, Additional Director (Admin, Training and Infra) who have long years of administrative experience may also participate in policy support, Research and Training activities as per Service rules. iii) Policy support for Implementation of Urban reforms and Urban Development Through its comprehensive training curricula, well designed training courses and strong research focus, SIUMAP is envisaged to specialize in urban management and governance issues of Andhra Pradesh and evolve as a think tank on urban affairs in the state and the country. The Director General of the institute in coordination with the in-house and external researchers and faculty shall foster policy research for finding solutions to the problems of Urban management. The institute shall develop strong linkages with institutes like NIUA-New Delhi, MCRHRDTI-Hyderabad, ASCI-Hyderabad, NIFPP-New Delhi, SIUD-Mysore, NIRD-Hyderabad, APPA, Hyderabad, AMR-APARD, Hyderabad, NAARM, Hyderabad, SVPNAP, Hyderabad, WALAMTARI, Hyderabad ,IITs, IIMs, SPA,New Delhi and other such academic and research institutes in India and abroad to jointly conduct research and policy design workshops, brain storming sessions, symposia, etc. to develop foundations for urban development policy formulation. The Institute shall also bring together diverse stakeholders on a common platform to understand various facets of the challenges and problems associated with Urban development, which shall help in development of comprehensive foundation for policy formulation for the government. Essentially the institute shall in its capacity of apex training and research body shall provide policy support to the state and local government and shall support the 369 governments in project and program implementation. The SIUMAP shall also partner with various consultant organizations and individual consultants for focusing on outcomes of policy support to the governments. 11. Resources, Budget Provisions and Sources of Funding i) Infrastructure and Resource Plan The institute shall be established in the premises of City Manager’s Training Institute Hyderabad and new infrastructure shall be developed based on Governing council’s approval. The infrastructure at the City managers training Centre, Jubilee Hills, and Hyderabad shall be utilized for the State Institute of Urban Management, Andhra Pradesh. SIUMAP aims to be a residential training institute and shall provide hostel accommodation facilities to all the trainees and guests of the institute. However accommodation, logistics, lodging, boarding and catering facilities shall also be procured from the open market based on the need and requirement as approved by the Governing council of the institute. The institute shall also house a Knowledge repository centre and State library on Urban management which shall function as the apex information repository for Urban affairs in the state of Andhra Pradesh. The institute shall be equipped with the latest Information Technology infrastructure, audio-visual aids and Multimedia set up and other enabling technologies for conduct of research projects, training programs, publication and other allied academic and research activities. SIUMAP shall also conduct programs at district and ULB level, details of which shall be detailed as per the directions of the Governing council. SIUMAP with the directions of the Governing council shall also establish Regional and district level training centres as per requirements of the Government and can conduct e-learning and other certification courses to reach wider target audiences as per the directions of the M&R council. ii) Funds of the Institute As the establishment and running of SIUMAP is funded as one of the component of the World Bank funded “Andhra Pradesh Municipal Development Project”, the initial funding for the institute during the implementation of APMDP shall be from the APMD project during the period of the project. As the institute shall developed as a Registered society which is a perpetual legal body, additional sources of funding for conduct of the institute affairs shall be explored and generated through various ways and means. All efforts with reference to fund management and financial planning of the institute shall be directed towards making the institute self-sustainable over a period of time. All the funds for SIUMAP shall be under the control of the Treasurer of the Society and Executive Director of the Institute who shall be assisted by the Assistant Director (Administration and Finance) The sources of funding for SIUM society are the following. a) grants made by the Government of India, any State government or planning and development authority; municipal corporation or other local bodies; b) donations and contributions from other sources; 370 c) d) e) f) Membership fees and subscriptions; fees and charges imposed by the Institute for services rendered by it; income from investment, properties and other assets; income and receipts from publication and other sources. To mobilize more resources the institute shall also seek endowments, sponsorships and grants from corporate bodies, NGOs, National and International donors and individual patrons. Such members provide grants or sponsor training and/or research programs or shall subscribe for annual or lifetime memberships of the Institute’s society. All such members shall be qualified and admitted to the society by the President on the recommendation of Director General. All members admitted into the society shall become part of the general body and are generally stakeholders in urban affairs with strong interests and qualified experience in management of Urban affairs. iii) Fund Administration a) The bankers of the Institute shall be any of the nationalized Public Sector bank or banks as decided by the Director General and approved by the Governing council. b) The Director General shall by order designate any of the officers of the of the Institute as Drawing & Disbursing Officer of the Institute, who shall be under the administrative control of the Treasurer of the Society/Executive Director of the institute. c) For the funds provided by the APMDP the rules under the operational manual of the APMDP under fund administration shall apply. a) Reserve Funds or Special Funds The Governing Council may set apart a Reserve Fund or Special Funds out of any income, endowments, loans, donations, grants and contributions for specified purposes and for progressive financing of the activities of the Institute. No part of such funds shall be utilized for purposes other than specified. b) Bankers, Accounts & Audit The bankers of the Institute shall be a duly constituted bank or banks designated for the purpose by the Governing Council from time to time. All money shall be paid into the Institute's account with the bank or banks so appointed and shall not be withdrawn except by means of cheques signed by the Director General or by such officer or officers of the Institute or by such of its members as may be decided by the Governing Council. i. The accounts of the Institute shall be audited by Auditors appointed by the General Body. The nature of audit to be applied and the detailed arrangements to be made in regard to the form of accounts and their maintenance and presentation of the account shall be determined by the Governing Council from time to time. ii. The annual account of the Institute together with the audit report thereon and a report of the proceedings on all work undertaken during the year shall be prepared by the Governing Council for the information of the members and shall be placed before the General iv) Audit of the Accounts a) The Institute shall cause regular accounts to be kept of all its money and properties in respect of is affairs. The accounts shall be maintained in such form as the Government may prescribe. 371 b) The accounts of the Institute shall be audited annually by the Charted Accountant besides regular audit done by the Comptroller and Auditor General of India or by any person authorized by him in this behalf and any expenditure incurred in connection with such audit shall be payable by the Institute to the Comptroller and Audit General of India/Chartered Accountant. c) The results of the Audit shall be communicated by the Auditor to the Director General. d) For the fund support of APMDP the auditors as appointed for the project under comprehensively defined Terms of Reference as decided by Governing council shall apply. 372 12. Miscellaneous i. Powers of the Government: The SIUMAP shall be an autonomous institute. As the founding member of the society and in the capacity of the official membership of the Governing council, the government shall have complete authority over monitoring the conduct of the affairs of the institute as per the set objectives. The Director General shall be responsible for execution of the powers vested in the position by the General body through Governing council for conducting the affairs of SIUMAP with the assistance of Executive Director. ii. Alteration or Extension of the purpose of the Institute: Subject to the provision of the A.P. Societies Registration Act 2001, the Governing Body may alter, extend or abridge any purpose or purposes for which the society is established. The Institute may alter or extend the purposes for which it is established: a) If the Governing Council shall submit a proposal for such alteration or extension as aforesaid to the members of the Institute in a written or printed report; b) if the Governing Council shall convene an Extraordinary General Body Meeting of the members of the Institute according to these Rules for the consideration of the said proposal; c) if such report be delivered or sent by post to every member of the institute fourteen clear days previous to such Extraordinary General Meeting as aforesaid; d) if such proposal be agreed to by the votes of three-fifths of the members of the Institute delivered in person at such Extraordinary General Meeting as aforesaid; and e) if such proposal be confirmed by the votes of three-fifths of the members of the Institute present at a second Extraordinary General Meeting convened by the Governing Council at an interval of one month after the former meeting. . iii. Amendment of the rule: These articles shall not be altered varied or cancelled unless passed by a special resolution voted by a 2/3rd strength of the members present and voting at a meeting of the Executive Committee, called for this purpose. The rules of the Institute may be altered at any time by Resolution passed by twothirds majority of members of the Governing Council present and voting at a meeting of the Council which shall have been specially convened for the purpose, and subject to confirmation at a meeting of the General Body of the Institute, duly convened for the purpose. iv. Change of Name of the Institute: The Institute may change its name by a Resolution passed by a majority of the members of the Institute present and voting at a meeting of the General Body of the Institute, which shall have been duly convened for the purpose. v. Legal Proceedings: The Institute may sue or be sued in the name of the Society. The jurisdiction of all suits for or against the Society shall be jurisdiction of the Hyderabad District. 373 vi. Dissolution a.The Institute may be dissolved subject to provisions of sections 24 of the A.P. Societies Registration Act 2001. If any property remains after the settlement of its debts and liabilities, it will be transferred to an Institute or organization of similar objectives chosen by the Governing Body by 3/4th of the members, but shall not, under any circumstances, be distributed among the members of the Institute. b. If on winding up or dissolution of the Institute there shall remain after the satisfaction of all its debts and liabilities any property whatsoever, the same shall not be paid to or distributed among the members of the Institute or any of them, but shall be transferred to the Government of Andhra Pradesh, “subject to the condition that the transfer shall take place to some other society having similar aims and objectives”. 13. Declaration: We the undersigned are desirous of forming a Society in pursuance of this Memorandum of Association. We, the undersigned being the members of the Executive Committee of the State Institute of Urban Management, do hereby, certify that the above is a correct copy of the Articles of Association of the said Institute unanimously adopted by the members of the Executive Committee present on the………………. of ………. 2008 in the meeting called for the purpose. S No Signature in full Address, Occupation and Designation 374 Witness (Full name and Signature)
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