fbpx 39370-022: Agriculture Market Infrastructure Project (formerly Commercial Agriculture Development Project) | Asian Development Bank

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

Sovereign (Public) Project | 39370-022 Status: Closed

ADB is helping Afghanistan improve facilities and standards in the livestock and horticulture industries. The project will put up two slaughterhouses in Kabul and three in the provinces; small-scale packing, sorting, grading, drying, and cold storage facilities; and product certification laboratories. It will strengthen product standards and marketing, and sanitary and phytosanitary regulations.

Project Details

Project Officer
Ayubi, Mohammad Hanif Central and West Asia Department Request for information
Country
  • Afghanistan
Modality
  • Grant
Sector
  • Agriculture, natural resources and rural development
 
Project Name Agriculture Market Infrastructure Project (formerly Commercial Agriculture Development Project)
Project Number 39370-022
Country Afghanistan
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0126-AFG: Agriculture Market Infrastructure Project (formerly Commercial Agriculture Development Project)
concessional ordinary capital resources lending / Asian Development Fund US$ 30.00 million
Grant 0437-AFG: Agriculture Market Infrastructure Project - Additional Financing
Afghanistan Infrastructure Trust Fund US$ 11.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
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 Agricultural growth increased
Project Outcome
Description of Outcome More efficient horticulture and livestock agribusiness industries
Progress Toward Outcome

It was anticipated that by March 2017 the construction works of the slaughterhouses (SH) and Public Privat Partnership (PPP) activities would be completed but due to unexpected delays during the implementation of the project, the said activities have not been completed. There were many delays during project implementation such as finalization of the detailed design of the SHs, BRT issue, slow tax exemption, the late handover of sites (land) to Dogus Makina (DM), the contractor for SHs, security and financial and contract management problem of the DM. After technical evaluation of the contract and DM's request for additional financing technical team came with a proposal to extend the contract of SH up to end of May 2018. During the course of the technical evaluation, the technical team proposed 11 million additional funds for rectification of the design deficiencies of the SH and cost overrun. To cover the financial gap, the government requested ADB to provide additional financing. ADB subsequently obtained a confirmation from the Department for International Development of the Government of United Kingdom (DFID) to provide $11.0 million for the project through ADB-administered Afghanistan Infrastructure Trust Fund (AITF). The proposed additional financing was for the government to complete the project's component 1, with the scope and scale as originally envisaged, and to enable the project to deliver the intended development outcomes. At the end of Sept 2015 ADB board approved additional financing of $11 million. During Q2 contractor restarted and resumed some activities in all five sites.

Parallel to the construction works of the SH, the PPP process and selection of the private operator are in progress.

The work plan for the PPP for SH has been developed in close coordination and consultation with the central PPP unit of the Ministry of Finance. The concept paper and the feasibility study report for PPP of the SH which were produced by an international consultant in 2017 were approved recently by High Economic Council (HEC) of the government. Draft of the prequalification documents for PPP are prepared and will be subject to further review by an international consultant. An international PPP specialist will be soon on board to review the documents. The actual activities of the PPP will take effect after physical completion and handover of the SH. The SHs are anticipated to be completed by end of 2018.

Despite the additional financing was provided to the SH contract and DM in 2015, the implementation progress/status did not significantly change. DM was suffering from financial constraint which could not help the implementation status and such affected the project further. In order to cope with and get rid of this condition, MAIL assigned the remaining activities of the slaughter-houses in prior agreement with the contractor to a local financially capable firm. The new assignee for implementation of the contract is on board and has started the activities. Since the assignment of the SH activities, the performance on the SH sites has been changed positively. The works of one SH will be completed and handed over in October 2018.

Implementation Progress
Description of Project Outputs

1.1 Slaughterhouses constructed and operational

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

2. Effective project management and capacity support

1. Improved marketing infrastructure

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

The contract for the design and construction of five modern slaughterhouses in four provinces of the country was awarded on 24 Sep 2011. Since the award there have been many delays during project implementation such as finalization of the detailed design of the SHs, BRT issue, slow tax exemption, the late handover of sites (land) to Dogus Makina (DM), the contractor for SHs, security and financial and contract management problem of the DM which have delayed achievement of this target. In 2014 DM requested additional fund for completion of the SHs, which was then evaluated by the implementing agency, the ministry of agriculture irrigation and livestock. After technical evaluation of the contract and DM's request for additional financing technical team came with a proposal to extend the contract of SH up to end of May 2018. During the course of the technical evaluation, the technical team proposed 11 million additional funds for rectification of the design deficiencies of the SH and cost overrun. To cover the financial gap, the government requested ADB to provide additional financing. ADB subsequently obtained a confirmation from the Department for International Development of the Government of United Kingdom (DFID) to provide $11.0 million for the project through ADB-administered Afghanistan Infrastructure Trust Fund (AITF). The proposed additional financing was for the government to complete the project's component 1, with the scope and scale as originally envisaged, and to enable the project to deliver the intended development outcomes. At the end of Sept 2015 ADB board approved additional financing of $11 million. During Q2 contractor restarted and resumed some activities in all five sites. Despite the additional financing was provided to the SH contract and DM in 2015, the implementation progress/status did not significantly change. DM was suffering from financial constraint which could not help the implementation status and such affected the project further. In order to cope with and get rid of this condition, MAIL assigned the remaining activities of the slaughter-houses in prior agreement with the contractor to a local financially capable firm. The new assignee for implementation of the contract is on board and has started the activities. Since the assignment of the SH activities, the performance on the SH sites has been changed positively. The works of one SH will be completed and handed over in October 2018, the SHs are anticipated to be operational in Q1 2019.

The contract of Farm Level Collection Centers (FLCC) was signed on 29 October 2014. Construction work of all 19 FLCCs was completed in Q1 2016. seven of FLCCS in Herat and Kandahar have been handed over to cooperatives and operation and management contract of 12 remaining FLCCs signed with a private local company, Agroindust. The government is considering to assign the FLCCs to PPP, as the PPP law was recently passed.

During Q2 2015 thirty MAIL/DAIL staff and two marketers of fruits and vegetables received training for Quality Management which included HACCP system development, good manufacturing practices for the FLCCs. The training also covered sessions for post-harvest management, supply chain management, and business administration. It is worth mentioning that the trained people will provide training at province level to FLCC operators and will be supervising their day-to-day activities.

The project has provided technical support to the Afghanistan National Standards Authority (ANSA) and MAIL on the development and adoption of the standards. As of now nine standards for sensitive products (almond, pomegranate, shelled pistachio, unshelled, fresh and dried apricot, Hallal and meat cuts standards) have been developed and approved by ANSA as national standards. The project has also provided technical support in regard of Agri policy development and project has also developed SPS policy which is under review for further improvement.

PMO has been established and functioning. Quarterly and annual progress reports are submitted regularly.

Geographical Location Balkh, Gul Bagh, Herat, Herat, Kabul, Kabul, Kandahar, Karez-e Mir, Kunduz, Kunduz, Mazari Sharif, Nangarhar, Paktia
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 Ayubi, Mohammad Hanif
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Afghanistan Resident Mission
Executing Agencies
Ministry of Finance
Mr. Omar Zakhilwal
[email protected]
Pashtoonistan 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 26 Sep 2018

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 30 Sep 2019 08 Apr 2020
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 29.77 0.00 99%
Counterpart 1.00 Cumulative Disbursements
Cofinancing 0.00 21 Nov 2008 29.77 0.00 99%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Partly satisfactory Satisfactory Satisfactory Partly satisfactory Satisfactory Partly satisfactory

Grant 0437-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
25 Sep 2015 29 Nov 2015 14 Jan 2016 31 Dec 2017 30 Jun 2019 08 Apr 2020
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 11.00 Cumulative Contract Awards
ADB 0.00 25 Sep 2015 0.00 10.90 99%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 11.00 25 Sep 2015 0.00 10.90 99%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Partly satisfactory Satisfactory Satisfactory Partly satisfactory Satisfactory Partly satisfactory

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Agriculture Market Infrastructure Project: Environmental Monitoring Report (January-June 2019) Environmental Monitoring Reports Jun 2019
Agriculture Market Infrastructure Project: Environmental Monitoring Report (July-December 2018) Environmental Monitoring Reports Dec 2018
Agriculture Market Infrastructure Project: Bi-annual Environmental Monitoring Report Environmental Monitoring Reports Jun 2018
Agriculture Market Infrastructure Project: Environmental Monitoring Report (July-December 2017) Environmental and Social Monitoring Reports Dec 2017
Agriculture Market Infrastructure Project: Environmental Monitoring Report (January-June 2017) Environmental and Social Monitoring Reports Jun 2017
Agriculture Market Infrastructure Project: Environmental Monitoring Report (July-December 2016) Environmental Monitoring Reports Dec 2016
Agriculture Market Infrastructure Project: Environmental Monitoring Report (January-June 2016) Environmental Monitoring Reports Jun 2016
Agriculture Market Infrastructure Project: Biannual Environmental Monitoring Report (May–October 2015) Environmental Monitoring Reports Oct 2015
Agricultural Market Infrastructure Project (Additional Financing): Amendment to the Initial Environmental Examination Initial Environmental Examination Aug 2015
Agriculture Market Infrastructure Project: Biannual Environmental Monitoring Report (October 2014) Environmental Monitoring Reports Oct 2014
Agriculture Market Infrastructure Project: Environmental Monitoring Report (October 2013) Environmental Monitoring Reports Oct 2013
Agriculture Market Infrastructure Project: Due Diligence Report - Slaughterhouses Sub-component Safeguards Due Diligence Reports Aug 2012

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
International Slaughterhouse Waste Management Expert Individual - Consulting Closed 24 Jun 2018 30 Jun 2018
International Slaughterhouse Waste Management Expert Individual - Consulting Closed 12 Mar 2018 02 Apr 2018
International Supervision Engineer Individual - Consulting Closed 09 Jan 2018 15 Jan 2018
Agriculture Market Infrastructure Project (formerly Commercial Agriculture Development Project) Individual - Consulting Closed 24 Aug 2017 30 Aug 2017

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan