Bhutan : Urban Infrastructure Project

Transport / Urban roads and traffic management

Water and other urban infrastructure and services / Urban policy, institutional and capacity development - Urban sewerage - Urban water supply

Unprecedented urban growth coupled with inadequate urban infrastructure has resulted in a shortfall of basic urban services for Bhutan's urban residents. Infrastructure requirements across urban centers vary, but access to water, sanitation, solid waste management, and urban transport are often inadequate. The government's Tenth Five-Year Plan identifies the need to invest in urban infrastructure and management in Bhutan's two major municipalities, Thimphu and Phuentsholing, and other larger urban centers to ensure sustainable urban management.

Thimphu Municipality is Bhutan's capital, with a population of 92,000 making up 40% of Bhutan's urban population. This population is expected to double by 2025. Thimphu's development strategy identifies four primary issues in the infrastructure and environment sector: (i) water supply; (ii) wastewater collection and treatment; (iii) drainage and flood protection; and (iv) solid waste collection and disposal. The completed Urban Infrastructure Development Project (UIDP) supported by the Asian Development Bank (ADB) covers water supply, solid waste management, and wastewater collection and treatment. The UIDP and Thimphu''s local area plan identifies wastewater management as a priority issue in Thimphu, with water pollution from wastewater discharge, solid waste, and effluent from workshops and industries degrading the urban environment.

Following Thimphu Municipality, Phuentsholing Municipality is the second largest urban center in Bhutan. The 2005 urban population of 21,000 is expected to increase to 32,000 by 2025. It is the busiest commercial hub where most of the country's cross-border trade takes place. Its urban development plan identifies congestion and poor urban mobility as a key issue that restricts the municipality''s growth. The UIDP has contributed to rehabilitating and improving roads and other municipal services in Phuentsholing but there are further investment needs.

SJM has been designated the fourth municipality of Bhutan. The urban population of 6,000 in 2005 is expected to almost triple by 2025. In addition, the satellite town of Deothang with a current population of about 2,000 was subsumed under SJM when it was designated a part of the municipality. While the municipality serves as the gateway to six districts of eastern Bhutan and is one of the oldest urban areas, there has been considerably less investment in urban infrastructure compared with the other three municipalities (Gelephu, Phuentsholing and Thimphu). This burdens existing infrastructure in an area that is rapidly expanding and has large growth potential as a trade node with the development of the Asian Highways Project and the proposed east-west transnational highway.

The project is consistent with government plans and strategies, and with the inclusive social development objective of ADB''s Bhutan country partnership strategy, which aims to improve urban infrastructure services, upgrade city planning, and strengthen the planning and management functions of municipalities. It is consistent with ADB''s Strategy 2020 as it contributes to regional outcomes in terms of Millennium Development Goal 7; Bhutan''s infrastructure, specifically urban infrastructure, which is one of ADB''s five core areas of specialization; and environmentally sustainable development. Lessons learned from past and ongoing urban projects and the country assistance program evaluation are incorporated in the project.

Balanced and sustainable development of human settlements in Phuentsholing, Samdrup Jongkhar and Thimphu ensured

Improved urban infrastructure for the residents of Phuentsholing, Samdrup Jongkhar and Thimphu municipalities (thromdes) provided.

Water supply and sanitation infrastructure in Samdrup Jongkhar and Thimphu thromdes improved.

Mobility in Phuentsholing thromde improved.

Urban management strengthened.

Capacity of urban public officials strengthened for public awareness in health and hygiene and project management and implementation.

Two ensuing urban sector projects supported.

Most of the procurement for the project are carried out by PMU with input from the PIUs. Goods, works and services, will be procured in accordance with ADB's Procurement Guidelines (February 2010, as amended from time to time). Procurement of works estimated to cost the equivalent of more than $1 million is carried out in accordance with international competitive bidding (ICB) procedures. Procurement of goods estimated to cost the equivalent of more than $500,000 is carried out using ICB procedures. Procurement of works estimated to cost less than $1 million is carried out using national competitive bidding (NCB) procedures. Procurement of goods is preferably grouped into packages equal to or larger than $500,000 to be suitable for ICB procedures. Goods that cannot be grouped into larger contracts and are estimated to cost less than $500,000 will be carried out using NCB procedures, and miscellaneous minor goods expected to cost under $100,000 equivalent are purchased using shopping procedures.

The Thimphu WWTP was procured as a DBO contract following ICB procedures. The DBO will have two parts. Part A includes the design, build component to be funded from the ADB loan and Part B for O&M will be funded by Thimphu Municipality.

A procurement capacity assessment was completed and procurement capacity was found to be sufficient. Procurement will be undertaken by the executing agency and implementing agencies. The executing agency and three of five implementing agencies have experience under UIDP and have developed capacity to issue tenders, evaluate bids and prepare bid evaluation reports. Newly formed PIUs will be trained through twinning arrangements providing on-the-job training from the PMU and DMSC. Further capacity will be built for all implementing agencies through the PMU and involving the executing agency and implementing agencies in annual in-country procurement seminars of ADB. Procurement accountability is provided through the Tender Opening, Tender Evaluation and Tender Award Committees. Each committee has to make a declaration of no conflict of interest . The 3-tier system provides due diligence. All government staff and consultants are subject to group and individual audits.