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

Sovereign Project | 39370-022 Status: Active

Summary

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.

Latest Project Documents

Consulting Notices See also: CMS

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Procurement Notices See also: Operational Procurement

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Procurement Documents


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Project Name Agriculture Market Infrastructure Project (formerly Commercial Agriculture Development Project)
Project Number 39370-022
Country Afghanistan
Project Status Active
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 / 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 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

Slaughterhouses (S.Hs): The S.Hs contract implementation has been delayed due to many reasons such as: detailed design finalization and completion, BRT issue, slow tax exemption, late handover of land to contractor, security and financial problem of contractor due to prolonged implementation. After a detailed technical evaluation of contract and Dogus Makina (the contractor) request for additional financing, technical team came with a proposal to extend contract until end of March 2017and provide additional fund of around 11 million to rectify design deficiencies and cost overrun. These design modifications and cost overrun, increased the cost of component 1 by $16 million in excess of the original cost estimates. After evaluation of the request, ADB, in order to fund the additional financing, obtained confirmation from the Department for International Development of the Government of United Kingdom to provide $11.0 million for the project through ADB-administered Afghanistan Infrastructure Fund. The proposed additional financing was for the government to complete the project S.Hs, component 1, with the scope and scale as originally envisaged, and to enable the project deliver the intended development outcomes.

At the end of Sept 2015 ADB board approval received for additional financing and grant was added to S.H, package. The performance of the contractor moved forward somehow, but the progress again hampered after short, due to financial problems and constraints of the contractor. Recently, the Ministry of Agriculture Irrigation and Livestock (MAIL) has decided to assign a considerable number of the remaining activities, in agreement with the contractor, to a local financially strong partner to help accelerate the progress on all sites. In order to utilize this approach (to bring a local partner and assign activities) extension of time to S.H package will be required to evaluate the capacity of ensure on-time completion of the remaining work without further delays.

Farm Level Collection Centers FLCCs:

The FLCC contract was awarded in early 2014 to a local firm though a transparent procurement process. The construction works of all 19 FLCCs under the contract has been completed. To ensure the quality of the product to gain a good market place, Food Safety Grade and Standard Specialist has provided his view through a report on compliance of the FLCCs with international grades standard that will finally lead to greater value addition and improvement of the quality of the product processed ;and increase export of the horticulture product.

As per the scope, the capacity of FLCC operators will be built through providing trainings in the areas of operation and management of the FLCCs. For this purpose, during Q2 2016 thirty MAIL/DAIL staff and two marketers of fruits and vegetables have received three weeks trainings in Quality Management, HACCP system development and Good Manufacturing Practices for FLCCs. Further, other trainings were also provided namely, post-harvest management, supply chain management and business administration. The trained people through the abovementioned program will be providing training at province level to FLCC operators and will be supervising their day today activities. The subject trainings were also provided to staff of Agroindust (operator of 12 FLCCs) during Q4 2016.

Product Standard Development and laboratories:

Progress under this subcomponent of the project has been affected by uncertainty about the legal status of the MoCI Raisin Institute which is identified by the project document to receive support under the project. Finally MoCI sent a letter to MAIL and MoF in stating its agreement with utilization of the funds for the MAIL quality control department, During the Project Steering Committee meeting dated 20 August 2014 the sub-activities of lab upgrading and equipment has been discussed and it was greed to remove said activities from scope of work due to following reasons:

During reporting time five remaining standards also got approval from ANSA and accepted as national standards. so totally 9 standard have been developed by the project

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 implementation of Construction of slaughterhouses has been affected by the financial constraints of the contractor. Recently as decided by MAIL a new approach will be hired to help the financial status of the contractor by assigning a considerable amount of the remaining work to a local contractor, in agreement with the contractor. As per PPP unit requirements most of the documents are prepared and submitted to PPP unit for approval.

The targets will be met and achieved when the S.Hs construction is completed and fully operational. The target date for this output was March 2017, but looking at the current status of the project it will not be completed on the said the date and may need extension, since the new approach of assigning a considerable portion of the works to another partner, needs detailed assessment and review (financial and technical capacity of the local partner)

Achievement of the target of waste reduction will be made when the S.Hs construction is completed. The target date for this output is 2017. During evaluation the capacity of waste water treatment plant increased from 40m3 to 150m3 in order to meet the demand of slaughterhouse. Also fund is allocated for pre-feasibility study and design of bio-gas plant.

The works are moving but not as much in good pace as required. The five slaughterhouses are in various stages of construction the civil work progress is: (i) Reshkor, 73%; (ii) Shakar Dara, 60%; (iii) Herat, 58%; (iv) Kunduz, 44%; and (v) Mazar-i-Sharif, 48%. Progress has been slow due to delays in commencement of construction work due to changes in the slaughterhouse sites over the land ownership dispute, delay in finalization of drawing and specifications, late mobilization of consultants, delays in release of construction equipment from the customs, securiity threats in few sites , contractor financial problem due to prolong implementation and due to design changes and additional work.

Construction of all 19 FLCCs completed in Q1 2016 and seven FLCCS in Herat and Kandahar have been handed over to cooperatives and operation and management contract of 12 remaining FLCCs has been signed with private company, Agroindust and handover of these centers to said company is going on.

during Q2 2016 thirty MAIL/DAIL staff and two marketers of fruits and vegetables have received three weeks trainings in Quality Management, HACCP system development and Good Manufacturing Practices for FLCCs. Further, other trainings were also provided namely, post-harvest management, supply chain management and business administration. The trained people through the abovementioned program will be providing training at province level to FLCC operators and will be supervising their day today activities. The subject trainings were also provided to staff of Agroindust (operator of 12 FLCCs) during Q4 2016.

Project has provided technical support to ANSA and MAIL on the development and adoption of the standards, up to now 9 standards for the 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.

Target is feasible; Project 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 is already functioning.

Quarterly and Annual progress reports have been submitted regularly.

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 EMR and EMP have been sent for Oct 2014 to ADB and were accepted for disclosure.

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 and construction work completed in Q1 2016.

Construction work of all 19 FLCCs is completed in Q1 2016.

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 Staff

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 27 Mar 2017

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 2017 -
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 29.91 0.00 100%
Counterpart 1.00 Cumulative Disbursements
Cofinancing 0.00 21 Nov 2008 24.25 0.00 81%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory 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 - -
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 10.53 96%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 11.00 25 Sep 2015 0.00 1.11 10%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory

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.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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