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Mongolia: Southeast Gobi Urban and Border Town Development Project

Sovereign (Public) Project | 42184-022 Status: Active

ADB is helping Mongolia improve urban infrastructure and services in the booming mining and border towns of Omnogovi and Dornogovi provinces in Southeast Gobi. The project will support reforms in infrastructure services, institutional development, and capacity building.  It will improve water supply and sanitation services, efficiency and coverage of district heating services, and road networks.

 
Project Name Southeast Gobi Urban and Border Town Development Project
Project Number 42184-022
Country Mongolia
Project Status Active
Project Type / Modality of Assistance Grant
Loan
Technical Assistance
Source of Funding / Amount
Grant 0204-MON: Southeast Gobi Urban and Border Town Development Project
concessional ordinary capital resources lending / Asian Development Fund US$ 15.00 million
Loan 3388-MON: Southeast Gobi Urban and Border Town Development Project Additional Financing
concessional ordinary capital resources lending / Asian Development Fund US$ 19.43 million
TA 9100-MON: Management and Reuse of Sewage Sludge from On-Site Sanitation Facilities and Decentralized Wastewater Treatment Plants
Bill and Melinda Gates Foundation US$ 1.00 million
Loan 3713-MON: Southeast Gobi Urban and Border Town Development Project (Additional Financing) II
Ordinary capital resources US$ 20.00 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Private sector development
Sector / Subsector

Energy / Energy utility services

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 objective of the Project is to maximize benefits from development of mining and border trade activities in the region.
Project Rationale and Linkage to Country/Regional Strategy

The aimags (provinces) of Omnogovi and Dornogovi (Southeast Gobi) are poised to experience a rapid increase in economic activity as a result of rapid growth in mining and cross-border trade. The influx associated with these economic activities is projected to more than double urban populations in the project towns by 2020. For some soum (district) centers in Southeast Gobi, population is expected to increase by an order of magnitude by 2020.

The provision of urban infrastructure and services is currently poor and is not keeping pace with population growth. Many services are either inadequate or absent. There are low levels of access to water supply and sanitation, and smaller urban areas do not have piped networks. Insufficient and unreliable urban services add to business and household costs, damage the urban environment and diminish quality of life, and decrease the attractiveness of towns to further potential investment. Investment and capacity development are required to enable government to expand the coverage and improve the quality and reliability of urban services. Local governments are ill-equipped to meet the joint challenges posed by increased demand for scarce water resources.

Maximizing the benefits to existing and future residents of Southeast Gobi from mining investments, trade growth, and associated economic development opportunities depends on effective urban planning, management, and service delivery policies and structures being in place. Strengthening the provision of basic urban services will require institutions and policies that provide incentives for performance while also ensuring affordability. Services are currently provided by utilities that are largely owned by local government, and are delivered at a loss due to unwillingness of local government councils to raise tariffs to cost-recovery levels. This is costly in terms of the resources spent on untargeted subsidies and foregone opportunities to attract private sector expertise and financing.

Impact Economic development and livability in aimag centers (mining and border towns in Southeast Gobi) enhaced.
Project Outcome
Description of Outcome Urban governance improved and access to sustainable infrastructure and services expanded in urban places in Southeast Gobi and other aimags.
Progress Toward Outcome

Grant 0204: implementation was completed in November 2019 and the grant was financially closed in March 2020.

Loan 3388: As of 1 March 2021, the overall project implementation progress was 85% against 84% of the elapsed implementation period. The project implementation is satisfactory. The progress of Output 1 for construction of wastewater collection and treatment systems was 80% and of Output 2 for capacity building in project management, strategic planning, and accounting systems was 94.3%. Project complies with the financial and safeguards monitoring and reporting requirements. Performance of the EA, contractors and consultants is satisfactory.

Loan 3713: The project implementation is satisfactory. As of 15 March 2021, overall project implementation progress was 72% against 63% of the elapsed implementation period. Progress of the project's Output 1 was 71.4% and of Output 2 was 24.5%. Project complies with the progress, financial and safeguards planning and reporting requirements. Performance of the EA, contractors and consultants is satisfactory.

TA9100: the TA implementation was completed in October 2020 and the TA was financially closed in January 2021.

Implementation Progress
Description of Project Outputs

1. Infrastructure services reforms, including perforamance-based contracts for urban services delivery implemented

2. Urban planning and policy making, including master plans for participating towns strengthened.

3. Cross-border cooperation established

4. Water source development, transmission, storage and distribution completed

5. Wastewater collection and treatment infrastructure constructed and operationalized

6. District heating infrastructure constructed and operationalized

7. Surfaced central roads network constructed

8. Improved solid waste collection and disposal enhanced

9. Stormwater drainage infrastructure constructed and operationalized

10. Strategic planning management, and cost recovery for wastewater management strengthened

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

1. Completed under G0204. Ongoing under L3388 and L3713.

2. Completed under G0204. Urban master plans for four soums were prepared, approved, and handed over to the respective aimag governments.

3. Completed under G0204.

4. Completed under G0204. Ongoing under L3388 and L3713.

5. Completed under G0204. Ongoing under L3388 and L3713. Of ten WWTPs to be constructed in nine aimag centers and one soum center under two loan projects: (i) testing and calibration of WWTPs in Uvurkhangai and Arkhangai aimag centers were completed and the plants have been transferred to the PUSOs for full custody; (ii) construction of the WWTPs in Umnugovi, Bulgan and Khuvsgul aimag centers was completed and a one-year testing and calibration of the plants will start by June 2021; and (iii) civil works of WWTPs in Dornogovi, Khentii, Sukhbaatar and Dundgovi aimag centers and in Khujirt soum are on-going and are scheduled for completion in Q3-Q4 2021.

6. Completed under G0204. Ongoing under L3388 and L3713.

7. Completed under G0204.

8. Completed under G0204.

9. Completed under G0204.

10. Completed under G0204. Ongoing under L3388 and L3713.

Geographical Location Dalandzadgad, Gurvantes, Saynshand, Tsogttsetsiy, Zamiin Uud
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The project is classified as environmental category B. Initial environmental examinations (IEEs) were carried out for all of the part B activities in accordance with ADB's Safeguard Policy Statement. In accordance with ADB's information and disclosure and consultation requirements, these subprojects and the potential environmental impacts were presented and discussed at stakeholder meetings and focus group discussions. Key environmental impacts during construction are largely temporary in nature, and include dust, gaseous emissions, noise, and some public inconvenience. Operational impacts might include gaseous emissions, contamination of water supply, improper treatment and disposal of sludge, or escape of leachate. The extent of these impacts will be mitigated with measures identified in the IEEs including careful project management and contractor compliance during construction with an environmental management plan integral to the contract documents. Key mitigation measures during operation are securing an adequate operational budget, implementing reforms to service institutions under the project, and developing (under the project) operation and maintenance (O&M) manuals for (i) water supply and wastewater management; (ii) solid waste management; and (iii) district heating that incorporate the conditions stipulated in the environmental permit, if necessary, and the proposed mitigation measures specified in the environmental management plan (EMP). The recipient's institutional capacity to manage environmental risks is limited, with a single trained full-time environmental staff member working at the aimag level and a single untrained environmental inspector covering all environmental matters in each soum. Aimag and soum environmental management and monitoring capacity will be strengthened with capacity development and training under part A, and the PIUs will be staffed and assisted with technical specialists and qualified consultants including environmental management specialists. The project will greatly improve community health and living conditions, reduce environmental pollution, and decrease per capita demand for energy resources by improving the efficiency of urban services. Priority infrastructure investments in solid-waste management will reduce groundwater pollution, and improved urban roads will reduce dust and noise. EMPs, including the Grievance Redress Mechanism (GRM), will be refined during the detailed design stage using a consultation process with affected persons and closely consulting project stakeholders. An environmental safeguard specialist will ensure revised IEEs and EMPs during detailed engineering design.The environmental monitoring report for 2012 was submitted to ADB in February 2013. The EA has recruited a local consulting company to undertake the environmental impact assessment of the project. The Mongolian version of the report was submitted to the Ministry in Q1 2013. The report will be submitted to ADB in Q4 2013 which is under translation into English.
Involuntary Resettlement It is anticipated that land acquisition and resettlement will not be significant and can be avoided for most activities. Some houses, gers, and fences will need to be relocated to nearby plots only in the proposed roads improvement priority infrastructure investment in Hanbogd. In accordance with ADB's Safeguard Policy Statement, a land acquisition and resettlement plan (LARP) has been prepared. To provide a framework for unanticipated land acquisition and resettlement as a result of changes in project sites prior to implementation, a land acquisition and resettlement framework (LARF) has also been prepared. The LARF sets out (i) the resettlement policy and Mongolian legal framework for land acquisition and resettlement, (ii) compensation standards and entitlements, (iii) implementation arrangements, (iv) consultation and participation, (v) eligibility provision, (vi) a grievance redress mechanism, (vii) monitoring and evaluation, and (viii) provision of the resettlement budget. The PIUs will be responsible for overall resettlement management and coordination, internal monitoring, and quarterly reporting to ADB. The PIUs will also take primary responsibility for resettlement consultation, notices, implementation, and timely delivery of entitlements. Because of limited experience with involuntary resettlement, training and capacity building will be conducted under part A. The PMU will review the remaining activities under part B before the award of the civil works contracts to ensure there are no involuntary resettlement effects that would require compensation and other assistance. If impacts are identified and cannot be avoided in other project activities, a LARP will be prepared in accordance with the provisions of the LARF and submitted to ADB. The Project's national resettlement consultant conducted a series of training sessions for the PMU and design contractors on ADB resettlement guidelines, and cooperated with design consultants to reduce the scope of involuntary resettlement. A land acquisition and resettlement plan for project sites will be finalized by Q4 2013.
Indigenous Peoples No indigenous peoples are living in the project area.
Stakeholder Communication, Participation, and Consultation
During Project Design The Project was developed with extensive consultation with stakeholders, including central and local governemnts, population of project aimags and soums, private sector and NGOs.
During Project Implementation Consultation meetings are organized on a regular basis with central and local government, communities and mining companies in urban planning of project towns and in designing infrastructure.
Business Opportunities
Consulting Services

Consultants will be selected and engaged using ADB's quality- and cost-based selection procedures, consultant qualification selection, and/or individual consultant selection procedures The Project will require a total of about 80 person-months of international and 350 person-months of national consulting services to support: (i) the PMU and PIUs in project implementation and management; (ii) development of structure plans for all project towns; (iii) an improved institutional and incentive framework for urban service delivery; (iv) improved local government capacity for urban planning, land management system planning, operations and maintenance; (v) enhanced cost recovery from services through metering and tariff reform; and (vi) improved local government revenues and financial management through the establishment of predictable recurrent financing and performance-based contracting and private sector participation. The ADB grant will finance 80 person-months of international and 350 person-months of national consultants.

The international consultants will have expertise in: (i) project management and procurement - including performance-based contracting; (ii) urban and regional planning; (iii) financial management; (iv) institutional and organizational development; and (v) capacity building and training. The national consultants will have expertise in: (i) water and wastewater engineering; (ii) resettlement; (iii) environmental management; (iv) legal aspects; (v) database development; (vi) financial management; and (vii) construction supervision and engineering design.

Procurement Procurement financed from the ADB grant will be carried out in accordance with ADB's Procurement Guidelines (February 2007, 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. Any 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 Badarch, Tuul
Responsible ADB Department East Asia Department
Responsible ADB Division Mongolia Resident Mission
Executing Agencies
Ministry of Construction and Urban Development
Ulaanbaatar 211238
Barilgachdyn Talbai 3 Mongolia
Ministry of Roads, Transportation, Construction and Urban Development
J. Bat-Erdene
Ministry of Road, Transporation, Construction and Urban Development
Timetable
Concept Clearance 13 Nov 2009
Fact Finding 09 Nov 2009 to 26 Nov 2009
MRM 29 Jan 2010
Approval 19 Apr 2010
Last Review Mission -
PDS Creation Date 13 Apr 2010
Last PDS Update 25 Mar 2021

Grant 0204-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
19 Apr 2010 07 Jun 2010 30 Jul 2010 31 May 2015 30 Nov 2019 26 Mar 2020
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 21.90 Cumulative Contract Awards
ADB 15.00 19 Apr 2010 14.99 0.00 100%
Counterpart 6.90 Cumulative Disbursements
Cofinancing 0.00 19 Apr 2010 14.99 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory

Loan 3388-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Apr 2016 28 Apr 2016 05 Jul 2016 30 Jun 2020 31 Dec 2022 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 21.17 Cumulative Contract Awards
ADB 19.43 22 Apr 2016 17.54 0.00 89%
Counterpart 1.74 Cumulative Disbursements
Cofinancing 0.00 22 Apr 2016 15.60 0.00 79%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory

Loan 3713-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Sep 2018 20 Dec 2018 18 Feb 2019 30 Jun 2022 30 Jun 2023 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 21.75 Cumulative Contract Awards
ADB 20.00 26 Sep 2018 16.62 0.00 83%
Counterpart 1.75 Cumulative Disbursements
Cofinancing 0.00 26 Sep 2018 11.64 0.00 58%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory

TA 9100-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Apr 2016 09 Nov 2016 09 Nov 2016 31 Oct 2018 30 Oct 2020 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 1,000,000.00 0.00 0.00 0.00 0.00 1,000,000.00 22 Apr 2016 943,214.92
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - 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.

Title Document Type Document Date
Southeast Gobi Urban and Border Town Development Project: Audited Project Financial Statements (1 January 2019-26 March 2020) Audited Project Financial Statements May 2020
Southeast Gobi Urban and Border Town Development Project: Audited Project Financial Statements (January-December 2018) Audited Project Financial Statements Aug 2019
Southeast Gobi Urban and Border Town Development Project: Audited Project Financial Statements (January-December 2017) Audited Project Financial Statements Sep 2018
Southeast Gobi Urban and Border Town Development Project: Procurement Plan Procurement Plans Jun 2018
Project Agreement for Loan 3388-MON: Southeast Gobi Urban and Border Town Development Project (Additional Financing) - Umnugobi Project/Program Agreements May 2016
Project Agreement for Loan 3388-MON: Southeast Gobi Urban and Border Town Development Project (Additional Financing) - Uvurkhangai Project/Program Agreements May 2016
Project Agreement for Loan 3388-MON: Southeast Gobi Urban and Border Town Development Project (Additional Financing) - Arkhangai Project/Program Agreements May 2016
Project Agreement for Loan 3388-MON: Southeast Gobi Urban and Border Town Development Project (Additional Financing) - Dornogobi Project/Program Agreements May 2016
Loan Agreement (Special Operations) for Loan 3388-MON: Southeast Gobi Urban and Border Town Development Project (Additional Financing) Loan Agreement (Special Operations) Apr 2016
Southeast Gobi Urban and Border Town Development Project (Additional Financing): Report and Recommendation of the President Reports and Recommendations of the President Apr 2016
Southeast Gobi Urban and Border Town Development Project (Additional Financing): Project Administration Manual Project/Program Administration Manual Apr 2016
Southeast Gobi Urban and Border Town Development Project Project/Program Administration Manual Feb 2011
Grant Agreement for Southeast Gobi Urban and Border Town Development Project between Mongolia and Asian Development Bank dated 07 Jun 2010 Grant Agreement Jun 2010
Project Agreement for Southeast Gobi Urban and Border Town Development Project between Asian Development Bank and Aimag Government of Omnogovi and Aimag Government of Dornogovi dated 07 Jun 2010 Project/Program Agreements Jun 2010
Southeast Gobi Urban and Border Town Development Project Reports and Recommendations of the President Mar 2010
Southeast Gobi Urban and Border Town Development Project and Mainstreaming Managing for Development Results in Investment Planning and Public Funds Management: Final Report Consultants' Reports Nov 2009

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
Southeast Gobi Urban and Border Town Development Project: Environmental Monitoring Report (January-December 2020) Environmental Monitoring Reports Dec 2020
Southeast Gobi Urban and Border Town Development Project: Environmental Monitoring Report (January-June 2020) Environmental Monitoring Reports Jun 2020
Southeast Gobi Urban and Border Town Development Project: Annual Environmental Monitoring Report (May 2018) Environmental Monitoring Reports May 2018
Southeast Gobi Urban and Border Town Development Project: Resettlement Interim Report Social Monitoring Reports Feb 2016
Southeast Gobi Urban and Border Town Development Project (Additional Financing): Initial Environmental Examination Initial Environmental Examination Jan 2016
Southeast Gobi Urban and Border Town Development Project: Annual Environmental Monitoring Report Environmental Monitoring Reports Nov 2015
Southeast Gobi Urban and Border Town Development Project: Dornogovi - Environmental Monitoring Report (December 2014) Environmental Monitoring Reports Dec 2014
Southeast Gobi Urban and Border Town Development Project: Omnogovi - Environmental Monitoring Report (December 2014) Environmental Monitoring Reports Dec 2014
Southeast Gobi Urban and Border Town Development Project: Resettlement Monitoring Report Social Monitoring Reports Oct 2014
Southeast Gobi Urban and Border Town Development: Dornogovi Initial Environmental Examination Feb 2010
Southeast Gobi Urban and Border Town Development: Omnogovi Initial Environmental Examination Feb 2010

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
Chemist / Microbiologist Individual - Consulting Closed 25 Sep 2020 02 Oct 2020
INSTITUTIONAL DEVELOPMENT AND CAPACITY BUILDING Firm - Consulting Closed 21 Feb 2020 04 Apr 2020

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
PACKAGE B2:INSTITUTIONAL DEVELOPMENT AND CAPACITY BUILDING FOR PUSOS Loan 3713 23 Mar 2021 JV OF SETSEN BILGUUN LLC AND IKH MYANG INJINE TEL: 99108481 EMAIL: [email protected] MONGOLIA Ministry of Construction and Urban Development CONSULTANCY 449,922.00 449,922.00
A1.2.2: WASTEWATER TREATMENT PLANT AND ANCILLARY S ERVICES IN SAINSHAND SOUM, DORNOGOVI AIMAG Loan 3388 11 Mar 2021 COMFORT IMPEX LLC MONGOLIA MONGOLIA MONGOLIA Ministry of Construction and Urban Development CONSTRUCTION 2,229,940.62 2,010,406.28
CONSULTING SERVICES FOR PROVISION OF ENGINEERING DESIGNS CONTRACT DOCUMENTATION PREPARARTION AND Grant 0204 29 Jan 2020 HANKUK ENGINEERING CONSULTANTS ANYANG MEGAVALLEY BLDG 801 799 GWAN YANG-DONG ANYANG CITY 431-767 KOREA REPUBLIC OF Ministry of Construction and Urban Development 936,660.99
SUKHBAATARWWTP AND ANCILLARY SERVICES Loan 3713 30 Dec 2019 JV KHURD JSC& HENAN BAIHUI SUKHBAATAR STR.71, KHOROO 6 CHINGELTEI DISTRICT, ULAANBAATAR MONGOLIA Ministry of Construction and Urban Development CONSTRUCTION 3,102,416.99 2,798,566.36
A1.2 DUNDGOVI WWTP AND ANCILLARY SERVICES Loan 3713 30 Dec 2019 JV SAIN CONSTRUCTION LLC & SAN LLC TOKYO STREET 6/5, KHOROO 1, BAYANZURKH DISTRICT, ULAANBAATAR MONGOLIA Ministry of Construction and Urban Development CONSTRUCTION 3,074,142.61 2,777,089.63

Procurement Plan