Azerbaijan: Water Supply and Sanitation Investment Program - Tranche 2

Sovereign Project | 42408-033

Summary

Project 2 of the Investment Program will improve WSS services in Agdash, Beylagan, Goychay, and Nakhchivan. The outcome of project 2 is improved access to WSS infrastructure in Agdash, Beylagan, Goychay, and Nakhchivan.

Outputs:

Component A: Water Supply and Sanitation Infrastructure Development

The first component will support infrastructure investments to rehabilitate, improve, and expand WSS systems and construct STPs in Agdash, Beylagan, Goychay, and Nakhchivan, which will benefit over 183,000 persons by the end of the project period. This translates to about 37% of the population benefited by the investment program. Project 2 includes construction of 460 kilometers of water supply network, 7000 cubic meters of storage reservoirs, 424 kilometers of sewer lines, and four STPs of 83 MLD capacity.

Component B: Institutional Effectiveness

Latest Project Documents

Consulting Notices

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Procurement Notices

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Procurement Documents


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Project Name Water Supply and Sanitation Investment Program - Tranche 2
Project Number 42408-033
Country Azerbaijan
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2842-AZE: Water Supply and Sanitation Investment Program - Tranche 2
Ordinary capital resources US$ 300.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector Water and other urban infrastructure and services - Urban policy, institutional and capacity development - Urban sewerage - Urban water supply
Gender Equity and Mainstreaming Effective gender mainstreaming
Description

Project 2 of the Investment Program will improve WSS services in Agdash, Beylagan, Goychay, and Nakhchivan. The outcome of project 2 is improved access to WSS infrastructure in Agdash, Beylagan, Goychay, and Nakhchivan.

Outputs:

Component A: Water Supply and Sanitation Infrastructure Development

The first component will support infrastructure investments to rehabilitate, improve, and expand WSS systems and construct STPs in Agdash, Beylagan, Goychay, and Nakhchivan, which will benefit over 183,000 persons by the end of the project period. This translates to about 37% of the population benefited by the investment program. Project 2 includes construction of 460 kilometers of water supply network, 7000 cubic meters of storage reservoirs, 424 kilometers of sewer lines, and four STPs of 83 MLD capacity.

Component B: Institutional Effectiveness

The second component will improve the operational efficiency of Agdash JSC and Beylagan Sukanal through a twinning program. Twinning programs under project 1 and 2 will be implemented together and shall engage a water utility from a developed member country of ADB. The investment program will also include implementation of a POP targeting school children and teachers to disseminate better hygiene and sanitation practices to the communities, as well as to provide information on the benefits of the projects. AZERSU plans to appoint UNICEF to implement the POP in Agdash and Beylagan. Tranche 2 loan will finance the twinning program and POP in Agdash and Beylagan.

UNICEF's planned participation in project 2 will further strengthen the consultative and participatory approaches plan under the project, and will help the government comply with the facility undertakings. The POP will target schools and address the child friendly school concept promoted by UNICEF. In addition, the POP will assess girl child development in schools and how drop-out rates could be reduced by providing better environmental sanitation. UNICEF has ongoing water and sanitation for health programs in the country and has experience of exceptional worth for the POP assignment. Tasks under the POP are a natural continuation of their ongoing work with schools, teachers, children, and local community in the hygiene and sanitation sector, thereby providing enough justification why UNICEF should be appointed using a single-source selection method to conduct the POP.

Component C: Program Management Facility

Supervision of civil works construction in Agdash, Beylagan, and Goychay will be carried out by the IPMC under AZERSU, which is financed by the tranche 1 loan. Supervision of civil works in Nakhchivan under project 2 will be overseen by a design and supervision consultant (DSC) appointed by SAWMC and financed by the tranche 2 loan. The DSC will develop detailed engineering designs for the WSS network in peri-urban Nakhchivan, which will be financed by a subsequent tranche.

Project Rationale and Linkage to Country/Regional Strategy

Delivering improved urban WSS services is a key priority of the government, as it is essential to improving the quality of life, attracting investment, and raising productivity and competitiveness. The challenges faced by Azerbaijan in delivering quality WSS services are discussed in the RRP and Appendix 2 for the facility. Recognizing the need to overcome the current problems and constraints, the government's State Program on Poverty Reduction and Sustainable Development (State Program) for 2008 2015 commits to improving access to basic services and targets improved WSS coverage and service quality by 2015. This includes 100% coverage with 24-hour water supply in the capital city Baku and 80 85% coverage in Azerbaijan's secondary towns and villages. Sustainable environmental management, good governance and institutional effectiveness are also key strategic goals of the State Program.

Road Map Implementation: Physical Investments. The government is currently focusing on improving access to WSS services by reconstructing and expanding the infrastructure. Out of the total urban WSS investment requirement of $3.5 billion, ADB's support accounts for 18%, World Bank's 14%, and JICA's 12%. The quality of WSS infrastructure in the Nakhchivan Autonomous Republic (NAR) has improved since 2009 but infrastructure provision in areas outside NAR has been slow because:

" Bidding under project 1 of the investment program was delayed due to cancellation of the Goychay WSS network contract resulting from significantly high bid prices;

" Bidding under a World Bank loan was cancelled after AZERSU received high bid prices for WSS networks contracts using the design-build modality; and

" AZERSU's project management capacity and ability to manage engineering designs, cost estimation, and bidding processes was weak.

Change Management. Recognizing these shortcomings, the government restructured AZERSU. In February 2011, the government wrote off approximately $370 million equivalent accounts receivables from AZERSU's customers (non-debt liabilities). It appointed experienced project management and utility operation staff to improve AZERSU's operations, enabling it to deliver efficient services to the customers. The government also increased WSS tariffs on average by 40% across various customer groups on 1 February 2011. The government's efforts have begun to yield results and with support from development partners, it is now refining its approach to improve institutions, systems, and service delivery.

Road Map Implementation: Non-physical Investments. Both AZERSU and SAWMC have put in place programs to improve their accounting and financial management systems. Through an ongoing technical assistance supported by the World Bank, AZERSU will shortly adopt international financial reporting standards. From a technical perspective, the two key institutions have focused on international standards for designing WSS systems, and training on operation and maintenance of water treatment plants. AZERSU has recently initiated discussions with SUEZ, one of the world's largest private water companies, to set up a training center for AZERSU staff, and develop staff capacity for better system planning, preparation and implementation of WSS projects, asset management, and operations and maintenance.

Impact Improved water supply and sanitation services in the urban centers of Agdash, Beylagan, Goychay and Nakhchivan
Project Outcome
Description of Outcome Improved access to water supply and sanitation infrastructure in Agdash, Beylagan, Goychay and Nakhchivan
Progress Toward Outcome The project is on track and likely to achieve target outcome
Implementation Progress
Description of Project Outputs

Water supply system efficiency improved through rehabilitation and replacement, and coverage expanded

Sewerage and sanitation system efficiency improved through rehabilitation and reconstruction, and coverage expanded

Management information system developed

Management capacity of Sukanals and JSCs enhanced

Institutions improved for WSS delivery

Better hygiene and sanitation practices in the community

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

Civil works are ongoing

Civil works are ongoing

Civil works are ongoing

Works ongoing

Works ongoing

Works ongoing

Ongoing

SAWMC is in the process of selecting a twinning partner through single source selection method. Azersu is in the process identifying a twinning partner.

UNICEF engaged to undertake public outreach

UNICEF engaged to undertake public outreach

Geographical Location Nakhchivan,Agdash,Goychay,Beylagan
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects AZERSU and SAWMC endorsed the Environmental Assessment and Review Framework (EARF) that was prepared for the investment program. The EARF will be reviewed regularly and, if necessary, updated during later tranches of the MFF, if indicated by unanticipated new types of impacts (review of applicability and relevance). The eligibility and entitlement provisions of the EARF will not be lowered in subsequent revisions and updates.
Involuntary Resettlement AZERSU and SAWMC endorsed the Resettlement Framework (RF) that was prepared for the investment program. The RF will be reviewed regularly and, if necessary, updated during later tranches of the MFF, if indicated by unanticipated new types of impacts (review of applicability and relevance). The eligibility and entitlement provisions of the RF will not be lowered in subsequent revisions and updates. A resettlement plan has been prepared and approved by ADB.
Indigenous Peoples The Project will have no expected impact on Indigenous Peoples.
Stakeholder Communication, Participation, and Consultation
During Project Design Extensive consultations have been undertaken with stakeholders, including project towns, NGOs and community-based organizations, elected representatives, administrative departments, rayon (town) administrations, and representatives of various government ministries. Meetings, focus group discussions with NGOs, and structured interviews were undertaken with stakeholders.
During Project Implementation Consultations ongoing with beneficiaries during project implementation.
Business Opportunities
Consulting Services One consulting package using the quality-and cost- based selection method to recruit a DSC in Nakhchivan; two consulting services using a single source selection method to recruit a WSS utility to implement the twinning program, and UNICEF to implement the public outreach program. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is listed in Section C.
Procurement

The investment program will follow ADB's Procurement Guidelines (2010, as amended time to time) and tranche 2 loan includes: (i) five international competitive bids (ICBs) for procurement of civil works for water supply and sewerage network in Agdash, Beylagan, Goychay, and Nakchivan; (ii) four ICBs for procurement of civil works for sewage treatment plant in Agdash, Beylagan, Goychay, and Nakchivan.

Bidders eligibility will be determined in accordance with ADB's Procurement Guidelines (2010, as amended from time to time). Accordingly, no bidder or potential bidder shall be declared ineligible for ADB financed contracts for any reason other than those set out in ADB's Procurement Guidelines. For goods or services funded by loans from ADB's Special Fund resources, payments are limited to goods produced in, and services supplied by, developed member countries that have contributed to such resources and all developing member countries.

Responsible ADB Officer Lu Shen
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Urban Development and Water Division, CWRD
Executing Agencies
State Amelioration & Water Mgmt Committee(SAWMCNARNAXDMSTA@GMAIL.COMKhatai district, Nakhchivan City
Nakhchivan Autonomous Republic
Azerbaijan
AzerSu Joint Stock Company (AZERSU)67, Tbilisi av.
Baku AZ1012, Azerbaijan
Timetable
Concept Clearance 07 May 2009
Fact Finding -
MRM 29 Nov 2011
Approval 22 Dec 2011
Last Review Mission -
Last PDS Update 16 Mar 2015

Loan 2842-AZE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Dec 2011 06 Jun 2012 20 Sep 2012 30 Jun 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 410.00 Cumulative Contract Awards
ADB 300.00 22 Dec 2011 241.69 0.00 81%
Counterpart 110.00 Cumulative Disbursements
Cofinancing 0.00 22 Dec 2011 178.30 0.00 59%

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
Water Supply and Sanitation Investment Program - Tranche 2: Nakhchivan City Water Supply and Sewerage Subproject Biannual Environmental Monitoring Report (July-December 2014) Environmental Monitoring Reports Jan 2015
Water Supply and Sanitation Investment Program - Construction of Water Intake Facilities and Rehabilitation of Water Supply and Sewerage Networks in Agdash Town, Beylagan Town (Tranche 1 and Tranche 2) Environmental Monitoring Report (July-December 2014) Environmental Monitoring Reports Dec 2014
Water Supply and Sanitation Investment Program - Tranche 2: Agdash Town Water Supply and Sewerage Subproject Initial Environmental Examination Initial Environmental Examination Nov 2014
Water Supply and Sanitation Investment Program: Nakhchivan City Water Supply and Sewerage Subproject (Tranche 1 and Tranche 2): Environmental Monitoring Report (January-June 2014) Environmental Monitoring Reports Jul 2014
Water Supply and Sanitation Investment Program: Construction of Water Intake Facilities and Rehabilitation of Water Supply and Sewerage Networks in Agdash Town, Beylagan Town, and Goychay Town (Packages 1 and 2) (January-June 2014) Environmental Monitoring Reports Jul 2014
Water Supply and Sanitation Investment Program: Nakhchivan City Water Supply and Sewerage Subproject (Tranche 1 and Tranche 2): Environmental Monitoring Report (July-December 2013) Environmental Monitoring Reports Jan 2014
Water Supply and Sanitation Investment Program: Construction of Water Intake Facilities and Rehabilitation of Water Supply and Sewerage Networks in Agdash Town, Beylagan Town, and Goychay Town (Package 2) (July-December 2013) Environmental Monitoring Reports Dec 2013
Water Supply and Sanitation Investment Program: Construction of Water Intake Facilities and Rehabilitation of Water Supply and Sewerage Networks (Tranche 1 and Tranche 2) (January-June 2013) Environmental Monitoring Reports Sep 2013
Water Supply and Sanitation Investment Program: Nakhchivan City Water Supply and Sewerage Subproject (Tranche 1 and Tranche 2): Environmental Monitoring Report (January-June 2013) Environmental Monitoring Reports Jul 2013
Water Supply and Sanitation Investment Program: Construction of Water Intake Facilities and Rehabilitation of Water Supply and Sewerage Networks (Tranche 1 and Tranche 2) (July-December 2012) Environmental Monitoring Reports Dec 2012
Water Supply and Sanitation Investment Program: Nakhchivan City Water Supply and Sewerage Subproject (Tranche 1 and Tranche 2): Environmental Monitoring Report (July-December 2012) Environmental Monitoring Reports Dec 2012
Water Supply and Sanitation Investment Program – Nakhchivan City Water Supply and Sewerage Subproject (Tranche 1 and Tranche 2): Bi Annual Environmental Monitoring Report Period (01 January – 30 June 2012) Environmental Monitoring Reports Jul 2012
Water Supply and Sanitation Investment Program - Tranche 2: Updated Land Acquisition and Resettlement Framework Resettlement Frameworks Nov 2011
Water Supply and Sanitation Investment Program: Land Acquisition and Resettlement Plan for Subprojects Under Tranche 2 Resettlement Plans Nov 2011
Water Supply and Sanitation Investment Program - Tranche 2: Beylagan Town Water Supply and Sewerage Subproject Initial Environmental Examination Oct 2011
Water Supply and Sanitation Investment Program - Tranche 2: Nakhchivan City Water Supply and Sewerage Subproject Initial Environmental Examination Oct 2011
Water Supply and Sanitation Investment Program - Tranche 2: Nakhchivan City Wastewater Treatment Plant Project Initial Environmental Examination Sep 2011
Water Supply and Sanitation Investment Program - Tranche 2: Agdash Town Water Supply and Sewerage Subproject Initial Environmental Examination Aug 2011
Water Supply and Sanitation Investment Program - Tranche 2: Goychay Town Water Supply and Sewerage Subproject Initial Environmental Examination Jul 2011

Evaluation Documents

See also: Independent Evaluation

No documents found.


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