Mongolia : Ulaanbaatar Urban Services and Ger Areas Development Investment Program

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

Ulaanbaatar's urban fabric has two distinct components: (i) the city core, which largely consists of apartment blocks with comprehensive utility services including dedicated heating, hot water, and sanitation; and (ii) the peri-urban ger areas, which exist for almost 50 years and are characterized by expanding, unplanned settlements of low and medium income households with land ownership, unserviced plots, unpaved roads, and scant facilities. Forty percent of Ulaanbaatar's 1.3 million inhabitants live in the city core while 60% (approximately 800,000 people or 30% of the national population) live in ger areas. The ongoing in-migration of households to Ulaanbaatar has accelerated the growth of these ger areas.

Despite their size, ger areas have been considered as merely temporary settlements and therefore never been formally integrated in the city development process and infrastructure programming. Thus, the continuing ger area densification and sprawl is putting tremendous pressure in the urban environment. Challenges associated with ger area upgrading are well documented and the huge gap between services in the formal and ger areas remains one of the most difficult challenges for the government. Underinvestment in urban services and operation and maintenance raise the cost of doing business for small enterprises in ger areas, and restrict access for ger area residents to jobs and services. The lack of employment opportunities and basic urban services create undue pressures on the city center which has reached an unprecedented level of congestion. Nevertheless, ger areas continue to grow, putting the whole city at risk. Retrofitting urban infrastructure services will become increasingly difficult and costly.

Numerous initiatives from the government and development partners have already brought a considerable amount of progress in the ger situation, from community building, cadastre implementation to water kiosk networks. However, because of their sector approaches, they did not succeed to design a sustainable and acceptable vision and future plan for the peri-urban development of the city.

Fortunately, Mongolia's economic prospects are looking positive and the socioeconomic status of ger areas is likely to improve substantially over the next decade. Ger tents are now being increasingly replaced by permanent houses and urban development is occurring around existing subcenters. The land market is expected to expand, recently strengthened by government commitments to citizens regarding the ownership of households on their plot. The increased demand for serviced land parcels is already noticeable. Government officials, local governments (districts and sub districts-Khoroo government) and residents are highly motivated to see improvements and are fully committed to support the development of ger areas. There is a strong incentive to provide services to ger areas where there is development potential. The provision of water, wastewater, and heating services is identified as a key priority to promote livelihood opportunities and economic growth.

The municipality of Ulaanbaatar (MUB) will be the executing and implementing agency for components one, two, and four. The MUB needs consulting support, strategic advice, and capacity development to define an ensuing project that will be prepared under the project preparatory technical assistance (PPTA). The PPTA will be implemented over a period of 13 months and is expected to start in April 2012 and to be completed by the end of March 2013. The PPTA will finance consulting services, workshops, training, field work, and survey costs. It will require an estimated 107 person-months of consulting services - 37 person-months of international consultants and 70 person-months of national consultants. The main fields of expertise will be urban planning, municipal infrastructure, water and sanitation, safeguards, finance and economics, and private sector participation. The proceeds of the PPTA will be disbursed in accordance with ADB's Technical Assistance Disbursement Handbook (2010, as amended from time to time).

The consultants will be engaged through a consulting firm in accordance with ADB's Guidelines on the Use of Consultants (2010, as amended from time to time). A consulting firm will be recruited for 37 person-months of international consultancy supported by 70 person-months of national consultancy. The firm will be selected based on the quality- and cost- based selection method, using a 90:10 ratio. The heavy weighting on the quality of the proposal is considered appropriate because of the complexity of the environment for strategic options in the delivery and financing of basic urban services. ADB's full technical proposal will be used to select and engage the consultants. The equipment for PPTA implementation will be procured in accordance with ADB's Procurement Guidelines (2010, as amended from time to time) and in line with JFPR 2011 Policy Guidelines for TA and Grants for Eligible Expenditures and for Ineligible Expenditures and will be turned over to MUB after completion of the PPTA.

Provision will be made for supplementary individual consultants to either consolidate the expertise already available or supplement the needed expertise. Individual consultants will provide an estimated 3 person-months of consultancy, distributed as 1 person-month of international consultancy supported by 2 person-months of national consultancy. The consultants will be engaged by ADB in accordance with its Guidelines on the Use of Consultants (2010, as amended from time to time).