Afghanistan: Agriculture Market Infrastructure Project (formerly Commercial Agriculture Development Project)

Sovereign Project | 39370-022

Summary

The proposed Agriculture Market Infrastructure Project (the Project) will deliver the following key outputs: (i) improved agricultural marketing infrastructure and (ii) improved product

standards and certification systems.

The Project will invest in the following livestock processing and horticultural market facilities: (i) two slaughterhouses in Kabul and three in the provinces; (ii) small-scale packing, sorting, grading, drying, and cold storage facilities in horticultural production areas; and (iii) laboratories for product certification.

Technical support will be provided in the areas of market infrastructure design, product standards, laboratory systems and certification, and produce marketing.

Ministry of Agriculture, Irrigation, and Livestock (MAIL) capacity will be strengthened in sanitary and phytosanitary policy and regulations, product standards, and agricultural aspects of

accession to the World Trade Organization.

Latest Project Documents

Consulting Notices

See also: CMS

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Procurement Notices

See also: Operational Procurement

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Procurement Documents

Title Document Date
Agriculture Market Infrastructure Project Aug 2013

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Project Name Agriculture Market Infrastructure Project (formerly Commercial Agriculture Development Project)
Project Number 39370-022
Country Afghanistan
Project Status Approved
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0126-AFG: Agriculture Market Infrastructure Project (formerly Commercial Agriculture Development Project)
Asian Development Fund US$ 30.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector Agriculture, natural resources and rural development - Agriculture research and application - Agro-industry, marketing, and trade - Livestock
Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The proposed Agriculture Market Infrastructure Project (the Project) will deliver the following key outputs: (i) improved agricultural marketing infrastructure and (ii) improved product

standards and certification systems.

The Project will invest in the following livestock processing and horticultural market facilities: (i) two slaughterhouses in Kabul and three in the provinces; (ii) small-scale packing, sorting, grading, drying, and cold storage facilities in horticultural production areas; and (iii) laboratories for product certification.

Technical support will be provided in the areas of market infrastructure design, product standards, laboratory systems and certification, and produce marketing.

Ministry of Agriculture, Irrigation, and Livestock (MAIL) capacity will be strengthened in sanitary and phytosanitary policy and regulations, product standards, and agricultural aspects of

accession to the World Trade Organization.

Project Rationale and Linkage to Country/Regional Strategy

Agriculture is a key economic driver in Afghanistan. It accounts for 50% of the gross domestic product and is the major source of employment and income for most Afghans. Livestock and horticulture are the dominant commercial agricultural areas. While Afghanistan has a comparative advantage in these commodities, current sector performance is poor.

During the long period of conflict and recent droughts, production fell dramatically. Productivity and quality standards declined, and high postharvest losses of 30%-40% occurred because of lost market infrastructure, damage to irrigation systems, and limited access to technical and market services. Lower production and product quality has reduced export and domestic returns.

The destruction of livestock slaughterhouses has meant that animal slaughter is undertaken under unhygienic conditions, with resultant poor quality standards and product losses. There are serious risks to public health and adverse environmental impacts from untreated waste.

Investments since 2001 have allowed horticultural production to increase, and livestock numbers have risen. While these gains are considerable under the circumstances, the potential for growth in these industries will be lost without investment in basic market facilities and reform of the institutional regulatory environment. Such investments need to be undertaken relatively quickly.

Impact Agriculture growth and productivity increased
Project Outcome
Description of Outcome More efficient horticulture and livestock agribusiness industries
Progress Toward Outcome

Slaughterhouses: after some delays in the completion of detailed design for the construction of slaughterhouses, an 11-month contract extension was agreed. Based on the current work schedule, completion of construction of slaughterhouses and installation of machinery was expected to be completed by November 2014, but due to several reasons this target is not achievable. MAIL is working on the revised schedule and evaluation of the contractor request for additional funds and will officially request for the third extension of the package once the assessment is done. Parallel to the construction activities, O&M manuals and waste management plans are being prepared, and a modality for Public-Private-Partnership is being developed.

Farm Level Collection Centers (FLCC): Due to the delayed appointment of the consultant, surveys of the targeted seven agro-ecological zones of the country have incurred some delays. In the third quarter of 2012 a rapid assessment was completed and the potential areas for establishment of the interventions and the cooperatives were identified. Preliminary designs of the FLCCs were developed and design documents were finalized, improved and upgraded. The IFB was advertised on 28 August 2013. The BER has been reviewed and Procurement Review Sheet has been Finalized. ADB's no objection has been granted and contract being awarded with advance stage of progress at all sites by contractor against implementation schedule. Government lands for all 19 centers have been transferred and are ready for construction activities. Training and capacity building activities relevant to the operation and standards of the FLCCs are being prepared and will be provided.

Product Standard Development: Progress on this component is delayed which was mainly due to the decision on the appropriate agency to receive support under the project. MoF requested that the funds for product standardization be given to MAIL in lieu of MOCI. Irrespective of the delays in mobilization of the laboratory consultants and utilization of the project funds for the horticulture product testing, the project has started the development of the key grades and standards for sensitive products. Product standard laboratories establishment is anticipated to commence by Q2 2015.

During the PSC meeting it was agreed that the lab equipment and upgrading has to be removed from the scope of work of AMIP project. MAIL official request for removal of said activities has been sent to ADB which is under review.

Implementation Progress
Description of Project Outputs

1.2 Farm-level collection and marketing facilities set up and operational

1.3 Product standard laboratories established and operational

2.1 Project management

2.2 Farm market infrastructure

2.3 Product standards

1.1 Slaughterhouses constructed and operational

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

A total of 113 cooperatives are surveyed and 19 of them (including women cooperatives) selected for intervention.

Under one package the below provinces were identified as possible locations:

1. Kabul, Paktia and Nangarhar

2. Kunduz and Mazar

3. Herat and Kandahar

Training will be conducted once facilities are constructed and operational.

The rapid assessment methodology was developed in May 2012 to conduct the surveys in seven ecological zones.

Based on the methodology 3-4 districts of each province which has potential for establishment of the centers were surveyed. The assessment in seven provinces was completed in October 2012 and the consultant, based on the assessment provided the first draft of the FLCC design report in late December 2012.

The Design of the FLCCs was enhanced by the comments and advice of the MAIL line departments regarding grades and standards and suitability of the design. The FLCC designs were finalized in April 2013; BER was submitted to ADB for review and approval. No objection on award has been granted, with contract being awarded. The selection of the sites was initiated based on the centers' requirement and the transfer process initiated from Kabul province. Land for all 19 centers has been officially transferred and handed over to the contractor for establishment of the FLCCs. Progress is advanced after mobilization in December 2014, the current progress of the package is estimated at 40%.

During the MTR, MOCI had observed the legal status of the nuts and raisin institute and after several discussions MOCI has officially notified MAIL on 5 March 2013 that they agreed to the utilization of the funds through MAIL Quality Control Labs.

MoF notified ADB regarding the changes and ADB has further clarifications and is awaiting response from MAIL. During the recent PSC meeting it was also agreed that the lab equipment and upgrading has to be removed from scope of work of AMIP project. MAIL official request for removal of said activities has been sent to ADB which is under review.

PMO has been established and is already functioning.

Quarterly and Annual progress reports have been submitted.

Submission of project EMP delayed due to unavailability of the National Environmental Expert. Work resumed completing the report and the first draft was submitted to ADB in May 2013.

The revised versions of EMR and EMP have been sent by end of Jan 2014 to ADB and both of them were accepted, currently progress is ongoing on planned reports of the year.

The Project Monitoring Plan was submitted to ADB in May 2013, and has been kept updated

Consultant contract was signed on 21 Dec 2011.

S.Hs Contract was signed on 24 Sep 2011.

FLCC contract was signed on 29 October 2014.

Selection criteria have been adopted and a full package of designs was submitted to ADB in May 2013.

The Invitation for bids was advertised on 28 Aug 2013. The BER is being reviewed, PRS finalized with ADB no objection granted. The contract being awarded with good rate or progress.

Once the facilities are constructed the step toward training will be taken. Training manual and methodology have been developed. Some of the training sessions will be conducted before completion of construction work.

Project has provided technical support to ANSA and MAIL on the development and adoption of the standards, up to now 6 standards for the sensitive products (Almond, Pomegranate, shelled pistachio, unshelled, fresh and dried apricot) have been developed, after technical review by technical committee of ANSA sent to supreme council and have been accepted by said council as national standards. Two other standards (Hallal and meat cuts standards) are under review by ANSA and expected to be approved and accepted as national standard within Q2 2015.

Target is feasible; Project has developed SPS policy which is under review for further improvement. Other donors are also supporting this. MAIL proposed to recruit individual consultants to continue providing inputs with has been supported and approved by ADB.

After some delays in decision-making on the legal status of the MoCI Labs, and after completion of the ADB NOL for the change, the individual consultant will be mobilized to initiate works for supporting the MAIL Quality Control Labs. During the PSC meeting it was also agreed that the lab equipment and upgrading sub- activities have to be removed from scope of work of AMIP project. MAIL official request for removal of said activities has been sent to ADB for review and acceptance.

Work is ongoing with Q4 2014 progress being very slow mainly due to financial problem, current completion date of the package has been extended due to inability of the contractor to complete the works, where a detailed assessment of additional funds that has been requested by contractor is under review of MAIL technical team and will be reported soon.

In Q2 and Q3 2014 the work progress somewhat improved, particularly in Reshkhor site (75% of civil work completed and 50% of machineries have been installed). It is also worth mentioning that more than 75% of machinery for five sites have been delivered. While Q4 2014 had significantly delays in works and mainly due to financial problem of the contractor.

PMO/MAIL is providing all the support in order to complete construction of the slaughterhouses and monitoring the progress of the contractor to ensure that anticipated works to be completed as per revised assessed scheduled and to remove any barrier towards implementation of the contract. The main reason for slow work progress is contractors financial status. MAIL also received request from Dogus Makina asking for increment in contract price. The request is under review.

Once MAIL technical team assess the request a revised work schedule to be produced where the firm implementation period to be determined.

Methodology and procedures for management of the contract have been prepared. The plan is that before the completion of construction of slaughterhouses, the actions will be undertaken.

The Operation & Management and Public-Private-Partnership experts have made progress towards development of the S.Hs operational manual, management modality, and compliance with the health and hygiene standards. The PPP Expert explored the legal bases to conduct the anticipated bidding process and also developed a template for the protocol between MAIL and the Operator(s). There is no PPP policy on government level to serve as basis for the preparation of the SH PPP methodology. Project team advised MAIL management that PPP policy has to be developed, otherwise we will not be able to complete it. In order to further provide support and finalize the project PPP activities, international individual consultant recruitment is ongoing which to be on board by Q1 2015.

A market survey questionnaire has been developed and survey conducted and collected data and information on the existing practices of meat value chain.

It is anticipated that before completion of the S.Hs contract, the prospective operator(s) will receive training on the use of the S.Hs by both the S.Hs contractor and Consultant.

Work progress has been slow. The contractor was not able to complete works by November 2014. The PSC was conducted on 20th of August 2014 and the extension of contract was agreed by the members of the committee and has been granted at the moment, while evaluation of the cost increment and firm period of remaining activities completion to be considered after MAIL's technical team review/assessment is done.

Work progress has been slow; the contractor was not able to complete the works by November 2014.

Geographical Location Regional locations were identified across the seven agro-ecological zones that are represented by the major regional centers (Herat, Jalalabad, Kabul, Kandahar, Kunduz, Gardez and Mazar)
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects An IEE conducted during project preparation confirmed that the Project will have positive environmental impacts. The Project is classified as category B, and a summary of the IEE is provided in Supplementary Appendix A. For the slaughterhouses constructed under the Project, wastewater management systems will be established as an integral aspect of their design and operation, with waste products to meet national and international standards, in line with ADB policy. Such regulations have yet to be established in Afghanistan.
Involuntary Resettlement No land acquisition or resettlement will be necessary for the planned physical infrastructure under the Project, as slaughterhouses and small buildings will be constructed on government land.
Indigenous Peoples No vulnerable groups were identified under the indigenous people definition of ADB's indigenous people's policy. The Project is classified as category C.
Stakeholder Communication, Participation, and Consultation
During Project Design Extensive consultations were undertaken during the preparation of the Project with all key stakeholders. The PPTA team undertook extensive consultations, workshops, and meetings at all regional centers involving the public and private sector and individuals working in the sector, community groups, NGOs, and producers, and conducted a detailed assessment when preparing the project.
During Project Implementation During project implementation, project working groups and representatives of associations and private enterprises are provided opportunities to raise concerns, propose and prioritize project activities, and comment on measures required to enhance the business environment. These groups need to include women and men, as well as representatives from different stakeholder groups and wealth categories.
Business Opportunities
Consulting Services

The Project will provide 116 person-months of international consulting services and 204 person-months of national consulting services.

The Project will engage contract employees to manage and implement the Project. This will cover all PMO professional and support staff. In addition, the Project will provide strategic business process and capacity development for the counterpart department of MAIL to facilitate implementation, etc. For these capacity development inputs, MAIL will engage consultants under individual contracts. For training, a number of small contracts will be undertaken under shopping and NCB. All recruitment of consultants and contract staff will be done on a competitive basis and in a fair and transparent manner in accordance with procedures acceptable to ADB.

Procurement All procurement will be carried out in accordance with ADB's Guidelines on Procurement (2007, as amended from time to time). ADB will finance civil works, vehicles, materials and equipment, and training.
Responsible ADB Officer Mohammad Hanif Ayubi
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Afghanistan Resident Mission
Executing Agencies
Ministry of FinanceMr. Omar Zakhilwalinfo@mof.gov.afPashtoonistan Watt, Kabul, Afghanistan
Timetable
Concept Clearance 30 Jul 2008
Fact Finding 15 Jun 2008 to 06 Jul 2008
MRM 07 Aug 2008
Approval 21 Nov 2008
Last Review Mission -
PDS Creation Date 30 Jan 2009
Last PDS Update 24 Mar 2015

Grant 0126-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
21 Nov 2008 01 Feb 2009 29 Apr 2009 30 Jun 2014 31 Dec 2015 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 31.00 Cumulative Contract Awards
ADB 30.00 21 Nov 2008 28.54 0.00 95%
Counterpart 1.00 Cumulative Disbursements
Cofinancing 0.00 21 Nov 2008 20.77 0.00 69%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory - Satisfactory Satisfactory

Evaluation Documents

See also: Independent Evaluation

No documents found.


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