Mongolia: Urban Development Sector Project

Sovereign Project | 37697-013

Summary

The objectives of the Project is to improve the living conditions and the quality of life of the urban population.

The Project follows a sector lending approach and supports sector policies on urban development, including the Government's Action Plan for 2004-2008 and program to provide 40,000 households with opportunities to live in housing with improved basic services. The Project will consist of four components: (i) A: improvement of basic urban services, (ii) B: urban road improvement, (iii) C: small loans for water connections and on-plot facility improvements, and (iv) D: institutional development and training.

Latest Project Documents

Consulting Notices

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Procurement Notices

See also: Operational Procurement

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Procurement Documents

Title Document Date
Urban Development Sector Project Jan 2013

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Project Name Urban Development Sector Project
Project Number 37697-013
Country Mongolia
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2301-MON: Urban Development Sector Project
Asian Development Fund US$ 28.20 million
Loan 2301-MON: Urban Development Sector Project (use of surplus funds)
Asian Development Fund US$ 7.03 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change
Sector / Subsector Finance - Inclusive finance
Transport - Urban roads and traffic management
Water and other urban infrastructure and services - Urban policy, institutional and capacity development - Urban sewerage - Urban solid waste management - Urban water supply
Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The objectives of the Project is to improve the living conditions and the quality of life of the urban population.

The Project follows a sector lending approach and supports sector policies on urban development, including the Government's Action Plan for 2004-2008 and program to provide 40,000 households with opportunities to live in housing with improved basic services. The Project will consist of four components: (i) A: improvement of basic urban services, (ii) B: urban road improvement, (iii) C: small loans for water connections and on-plot facility improvements, and (iv) D: institutional development and training.

Project implementation will start with two core subprojects: (i) improvement of the Hailaast road section in Ulaanbaatar; and (ii) water supply, sanitation, and solid waste management in Erdenet. The remaining subprojects will be identified and formulated during project implementation in accordance with rigorous procedures for screening, identification, selection, and appraisal of the subprojects. The Asian Development Bank (ADB) reviewed the two core subprojects and found that they are viable from a technical, institutional, social, financial, economic, and environmental perspective. For each of the remaining subprojects, the Ulaanbaatar municipal government and concerned aimag (province) governments and public urban services organizations (PUSOs) will prepare a feasibility study, including a resettlement plan and environmental impact assessment. For the water supply subcomponent, concerned aimag governments will be required to indicate strong political commitment to implement the tariff reforms to ensure repayment to the Government.

Project Rationale and Linkage to Country/Regional Strategy

Mongolia experienced rapid urbanization during the second half of the 20th century, mainly because of rural-to-urban migration. The urban population is now 60% of the national population of 2.56 million. Urban areas in Mongolia present two very different and distinct patterns of residential accommodation: apartment areas and ger (traditional tent) areas. Apartment areas are formally laid out to include permanent housing based on socialist planning practices and featuring multi-family housing surrounded by (vaguely defined) open space. These areas have the benefit of full utility services, including heating and hot water. By contrast, ger areas are typically long strips of large, unserviced plots with wide unpaved roads on one or two sides. Both types of layout are found in virtually all of the country's urban settlements. Following the withdrawal of Soviet support at the start of the 1990s, there has been relatively little extension of apartment areas but ger areas have experienced continued growth in most cities as most in-migrants live in ger areas.

Urban areas in Ulaanbaatar are growing rapidly because of substantial population migration from rural areas. The total population in Ulaanbaatar is estimated at over 1 million, including about 80,000 students and 60,000 non-registered residents. Some 60% of the total population lives in ger areas. In 2004, Ulaanbaatar;s road network totaled about 376 kilometers (km), comprising 77 km (20.5%) of national roads, 190 km (50.5%) of city roads, and 109 km (29.0%) of district or municipal roads. Road construction has been increasing slowly by 1.2% per annum for the past 5 years. Most roads in Ulaanbaatar are poorly maintained asphalt or gravel roads. About 288 km of roads in the city need to be reconstructed or rehabilitated. Only 10% of the city roads have drainage systems, which often are clogged with trash.

The major issues in the urban development sector in Mongolia are (i) deficiency in the quality of urban infrastructure and services, especially in ger areas; (ii) lack of community participation in the management and operation of urban services; (iii) lack of cost recovery and inadequate financial management in public services; (iv) lack of financial and organizational autonomy of the PUSOs; (v) lack of capacity of local governments, through the PUSOs, to provide and operate urban infrastructure and facilities; (vi) reluctance of the Government to acknowledge the permanent status of gers or hashaas (residential plots); (vii) inadequate urban roads in Ulaanbaatar; (viii) poor management and maintenance of urban roads in Ulaanbaatar; and (ix) health problems and associated economic loss.

Impact Improve the living conditions and quality of life of the urban population in the project towns.
Project Outcome
Description of Outcome Upgraded basic urban services, urban roads, and on-plot facilities.
Progress Toward Outcome In 2014, project completed significant civil works contracts and exceeded annual contract awards and disbursement targets. As of 31 Dec 2014, 141 km water supply, 24 km sewerage, 36.4 km heating supply and 20.9 km hot water pipelines are constructed under the project. These facilities will support the Mongolia in achieving national MDG targets, support inclusive development in provincial towns, support financial sustainability of private utility operators and increase access to social services for remote and poorer communities. Small loans are being made available to households for individual water supply, sewerage and heating supply connections and on-plot improvements and are being distributed through the selected commercial banks. Demand for small loans for on-plot improvements remains high.
Implementation Progress
Description of Project Outputs

1.1 Water supply facilities

1.2 Sewerage facilities

1.3 Solid waste management facilities

2.1 Roads improvement

3.1 Small loans

4.1 Implementation agency staff trained

4.2 People trained in health and environment

Status of Implementation Progress (Outputs, Activities, and Issues)

Implementation of the Project is on track and the progress is assessed in November 2014 by the ADB Loan Review Mission as highly satisfactory. In 2014, the project made a significant progress in awarding and implementing contracts for civil works and supply of equipment and in preparing for the selection of participating financing institutions (PFIs) for the Project's Component C: small loans for on-plot facilities improvements. This is achieved as a result of the improved performance by PMU and the support extended by local governments in Orkhon, Uvurkhangai, Bayankhongor, Tuv, Bulgan and Dundgovi aimags in implementing subprojects in respective aimags.

As the Project enters the final months of implementation, it is important to maintain the Project's good performance to ensure effective, efficient and timely closing of the loan on 1 July 2015.

Geographical Location Mongolia
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

Initial environmental examinations (IEEs) were carried out for the core subprojects in accordance with ADB's Environment Policy (2002) and Environmental Assessment Guidelines. It was determined that the Project will not have significant adverse environmental impacts. The Project will not adversely affect natural resources and will greatly improve community health and living conditions. The Project will reduce environmental pollution. No detrimental effects will be caused on the flora and fauna. On a per capita basis, the Project will decrease the demands on energy resources by replacing truck water tankers with a piped system. Negative environmental impact may occur during construction, but its extent will be minimized by careful design and specification of project construction through mitigation measures identified in the IEE. The adoption of composting toilets will reduce groundwater pollution and, with correct management, will produce organic compost for small farmers. Improvement of the urban roads will reduce dust and noise. The summary IEE includes the environmental assessment and review procedures.

Project staff and consultants regularly monitor contractors' compliance with environment action plans. Independent environmental monitoring is in place.

Necessary mitigation measures to minimize negative environmental impacts were implemented adequately by civil work contractors' staff responsible for occupational health and safety and environmental issues. No complains or comments were received with regard to the construction of water supply and sewerage systems constructed under the project.

Involuntary Resettlement It is anticipated that land acquisition and resettlement will not be very significant and can be avoided for many subprojects. Some houses, gers, and fences will need to be relocated to nearby plots of land. To ensure that ADB policies on involuntary resettlement will be applied and affected people compensated, a resettlement framework has been prepared which sets out (i) the resettlement policy and Mongolian legal framework for land acquisition and resettlement, (ii) compensation standards and entitlements, (iii) procedures for formulating RPs, (iv) implementation arrangements, (v) consultation and participation, (vi) eligibility provision, (vii) a grievance redress mechanism, (viii) monitoring and evaluation, and (ix) provision of the resettlement budget. The PMU will be responsible for overall resettlement management and coordination, internal monitoring, and quarterly reporting to ADB. The PIUs will take primary responsibility for any resettlement consultation, notices, implementation, and timely delivery of entitlements. Because of limited experience with involuntary resettlement, some training and capacity building will be conducted under component D, and it was endorsed by the Government and disclosed to the affected people.
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation Consultations with stakeholders and project beneficiaries are conducted on a regular basis by the project staff and consultants on the topics of public health and hygiene, gender, labor, resettlement and environmental impact mitigation action plan.
Business Opportunities
Consulting Services The Project will require a total of about 195 person-months of international and 82 person-months of national consulting services to support the PMU and PIUs in project implementation and management, feasibility study for the urban road improvement component, detailed design and survey, institutional development, and education and training. The ADB loan will finance 31 person-months of international and 82 person-months of national consultants. The international consultants will have expertise in (i) project management and procurement, (ii) finance and microfinance, (iii) institutional development and financial management, and (iv) sanitation. The national consultants will have expertise in (i) resettlement; (ii) environment; (iii) legal aspects; (iv) database development; (v) financial management; and (vi) construction supervision, feasibility studies for the remaining subprojects under component B, and detailed designs of components A and B. The consultants will be selected and engaged in accordance with ADB's Guidelines on the Use of Consultants (April 2006, as amended from time to time). All international consultants and the national consultants for project management will be selected and contracted individually. National consultants for feasibility studies and detailed designs will be selected and contracted as firms using ADB's quality- and cost-based selection procedure among short-listed national consulting firms. German development cooperation through DED will provide 144 person-months of long-term international experts in community engineering (2 positions) and community development and training. German development cooperation through GTZ will provide a maximum of 20 person-months of short-term experts. These experts will be assigned at the PMU and the PIUs, and will be guided by and report to the respective PMU and PIU directors. DED and GTZ will select these experts in accordance with their own guidelines.
Procurement The procurement of goods and works financed under the loan will be undertaken in accordance with ADB's Procurement Guidelines (April 2006, as amended from time to time). International competitive bidding (ICB) will be applied to supply contracts estimated to cost $500,000 or more. Supply contracts with a value less than $500,000 will follow national competitive bidding (NCB), and those less than $100,000 will follow shopping procedures as reflected by particular circumstances of the contract packages. ICB will be used for civil works contracts valued at $1 million or more. Civil works contracts valued less than $1 million will be procured using NCB procedures. The selection and engagement of contractors will be subject to ADB approval. Before commencement of NCB procurement, ADB and the Borrower will review the Borrower's procurement procedures to ensure consistency with ADB requirements. Any necessary modifications or clarifications to the Borrower's procedures will be documented in the procurement plan. The internationally tendered equipment packages will include the necessary technical support for ensuring proper installation, testing, commissioning, and training of operational staff as part of the related contracts. In accordance with ADB requirements, foreign contractors may participate in bidding for NCB contracts
Responsible ADB Officer Tuul Badarch
Responsible ADB Department East Asia Department
Responsible ADB Division Mongolia Resident Mission
Executing Agencies
Ministry of Construction and Urban DevelopmentMr. J. Bat-ErdeneBarilgachidyn talbai-3, State Property Building-5, Ulaanbaatar 211238
Min of Roads, Transportation, Const. & Urb DevtMr. J. Bat-ErdeneBarilgachidyn talbai-3, State Property Building-5, Ulaanbaatar 211238
Timetable
Concept Clearance 14 Oct 2005
Fact Finding 21 Mar 2005 to 28 Mar 2005
MRM 14 Aug 2006
Approval 19 Dec 2006
Last Review Mission -
PDS Creation Date 19 Jul 2006
Last PDS Update 27 Mar 2015

Loan

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 9.00 Cumulative Contract Awards
ADB 0.00 - 0.00 0.00 %
Counterpart 9.00 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

Loan 2301-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
19 Dec 2006 27 Aug 2007 26 Feb 2008 30 Jun 2013 01 Jul 2015 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 44.23 Cumulative Contract Awards
ADB 35.23 19 Dec 2006 34.67 0.00 98%
Counterpart 9.00 Cumulative Disbursements
Cofinancing 0.00 19 Dec 2006 34.45 0.00 97%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory
Title Document Type Document Date
Urban Development Sector Project Procurement Plans Jan 2013
Project Agreement for Urban Development Sector Project between Asian Development Bank and Hovsgol Aimag Government dated 16 December 2011 Project/Program Agreement Dec 2011
Project Agreement for Urban Development Sector Project between Asian Development Bank and Bulgan AIMAG Government dated 12 October 2011 Project/Program Agreement Oct 2011
Project Agreement for Urban Development Sector Project between Asian Development Bank and TUV AIMAG Government dated 14 October 2011 Project/Program Agreement Oct 2011
Project Agreement for Urban Development Sector Project between Asian Development Bank and Arhangay AIMAG Government dated 29 September 2011 Combined Resettlement Plan and Indigenous Peoples Plans Sep 2011
Project Agreement for Urban Development Sector Project between Asian Development Bank and Bayanhongor Aimag Government dated 10 May 2011 Project/Program Agreement May 2011
Project Agreement for Urban Development Sector Project between Asian Development Bank and Ovorhangay Aimag Government dated 10 May 2011 Project/Program Agreement May 2011
Project Agreement for Urban Development Sector Project between Asian Development Bank and Suhbaatar Aimag Government dated 10 May 2011 Project/Program Agreement May 2011
Project Agreement for Urban Development Sector Project between Asian Development Bank and Gobi-Altai Aimag Government dated 18 February 2011 Project/Program Agreement Feb 2011
Amendment to the Loan Agreement for Urban Development Sector Project between Mongolia and Asian Development Bank dated 26 March 2010 Loan Agreement (Special Operations) Mar 2010
Urban Development Sector Project Loan Change in Scope, Amount, and Implementation Arrangements Oct 2009
Loan Agreement for Urban Development Sector Project between Mongolia and Asian Development Bank dated 27 August 2007 Loan Agreement (Special Operations) Aug 2007
Project Agreement for Urban Development Sector Project between Asian Development Bank and Orhon Aimag Government dated 27 August 2007 Project/Program Agreement Aug 2007
Project Agreement for Urban Development Sector Project between Asian Development Bank and Ulaanbaatar Municipal Government dated 27 August 2007 Project/Program Agreement Aug 2007
Urban Development Sector Project Project/Program Administration Manual Dec 2006
Urban Development Sector Project Reports and Recommendations of the President Nov 2006

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
Urban Development Sector Project - Altai, Arvaiheer, Bayanhongor, Erdenet Public Urban Services Improvement Subprojects: Environmental Monitoring Report (December 2013) Environmental Monitoring Reports Dec 2013
Urban Development Sector Project - Hailaast, Baruunsalaa, Orbit Tahilt, Botanic Sharhad Road Improvement Subprojects in Ulaanbaatar: Environmental Monitoring Report (December 2013) Environmental Monitoring Reports Dec 2013
Urban Development Sector Project: Botanic-Sharkhad Road Subproject Resettlement Completion Report Social Monitoring Reports Oct 2013
Urban Development Sector Project: Resettlement Completion Report of Bulgan Subproject (December 2012) Resettlement Planning Documents Dec 2012
Urban Development Sector Project: Bulgan Subproject Resettlement Completion Report Social Monitoring Reports Dec 2012
Urban Development Sector Project: Baruun Salaa and Orbit-Tahilt Road Improvement Subproject in Ulaanbaatar: External Environmental Monitoring Report (July 2012) Environmental Monitoring Reports Jul 2012
Urban Development Sector Project: Water Supply, Sewage System and Wastewater Treatment Plant Improvement in Erdenet City, Orhon Aimag: External Environmental Monitoring Report (July 2012) Environmental Monitoring Reports Jul 2012
Urban Development Sector Project: Erdenet Subproject Resettlement Completion Report Social Monitoring Reports Mar 2012
Urban Development Sector Project: Altai, Arvaiheer, Bayanhongor, Erdenet Public Urban Services Improvement Subprojects (2011) Environmental Monitoring Reports Dec 2011
Urban Development Sector Project: Botanic Sharkhad Road Improvement Subproject in Ulaanbaatar (Монгол хэл) Resettlement Plans Nov 2011
Urban Development Sector Project: Botanic Sharkhad Road Improvement Subproject in Ulaanbaatar Resettlement Plans Nov 2011
Urban Development Sector Project: Govi-Altay Subproject Resettlement Monitoring Report Social Monitoring Reports Nov 2011
Project Agreement for Urban Development Sector Project between Asian Development Bank and Arhangay AIMAG Government dated 29 September 2011 Combined Resettlement Plan and Indigenous Peoples Plans Sep 2011
Urban Development Sector Project: Ovorkhangay and Bayanhongor Subprojects Resettlement Monitoring Report Social Monitoring Reports Jun 2011
Urban Development Sector Project: Improvement of Basic Urban Services in Orhon Aimag Resettlement Planning Documents Nov 2010
Urban Development Sector Project: Erdenet Basic Urban Services Improvement Subproject Resettlement Planning Documents Nov 2010
Хот байгуулалтын салбарын төсөл : Нүүлгэн шилжүүлэлтийн төлөвлөгөө - Орхон аймаг Resettlement Plans Nov 2010
Urban Development Sector Project: Land Acquisition and Resettlement Plan for Improvement of Basic Urban Services in Bayankhongor Aimag Resettlement Plans Nov 2010
Хот Байгуулалтын Салбарын төсөл: Нүүлгэн шилжүүлэлтийн төлөвлөгөө - Баянхонгор аймаг Resettlement Plans Nov 2010
Urban Development Sector Project: Improvement of Basic Urban Services in Bayankhongor Aimag Resettlement Plans Nov 2010
Urban Development Sector Project: Improvement of Basic Urban Services in Ovorkhangay Aimag Resettlement Planning Documents Oct 2010
Хот Байгуулалтын Салбарын төсөл: Нүүлгэн шилжүүлэлтийн төлөвлөгөө - Өвөрхангай аймаг Resettlement Plans Oct 2010
Urban Development Sector Project: Improvement of Basic Urban Services in Govi-Altay Aimag Resettlement Planning Documents Oct 2010
Хот байгуулалтын салбарын төсөл: Нүүлгэн шилжүүлэлтийн төлөвлөгөө – Говь-Алтай аймаг Resettlement Plans Oct 2010
Urban Development Sector Project: Hailaast, Baruun Salaa and Orbit-Tahilt Road Subprojects Resettlement Completion Report Social Monitoring Reports May 2010
Urban Development Sector Project: Baruun Salaa Road Improvement Subproject in Ulaanbaatar Resettlement Plans Oct 2009
Urban Development Sector Project: Khailaast Road Improvement Subproject in Ulaanbaatar Resettlement Plans Oct 2009
Urban Development Sector Project: Orbit-Tahilt Road Improvement Subproject in Ulaanbaatar Resettlement Plans Oct 2009
Urban Development Sector Project: Erdenet Basic Urban Services Improvement Subproject Resettlement Planning Documents Oct 2009
Хот Байгуулалтын Салбарын Төсөл: Нүүлгэн Шилжүүлэлтийн Төлөвлөгөө Resettlement Plans Oct 2009
Urban Development Sector Project: Land Acquisition and Resettlement Framework Resettlement Frameworks Jul 2009
Urban Development Sector Project: Resettlement Framework Resettlement Frameworks Oct 2006
Urban Development Sector Project: Construction of Road in the Hailaast Ger Area, Chingeltei District Resettlement Plans Oct 2006

Evaluation Documents

See also: Independent Evaluation

No documents found.


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