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Mongolia: Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3

Sovereign (Public) Project | 45007-009 Status: Active

Ulaanbaatar city is home to more than 1.44 million people. The central city core with comprehensive utility services is surrounded by vast, substandard, and unserved ger areas of about 100 square kilometers. Ger areas accommodate about 60% of the city's population (about 840,000 inhabitants) and have spread and expanded through successive waves of migration. These settlements of low- and medium-income households are characterized by loosely aligned plots, creating irregular unpaved pathways. The majority of households living here have land tenure. Lack of basic urban infrastructure and services in ger areas has caused severe pollution that threatens city residents' health. Obsolete household coal stoves for heating, and traffic congestion caused by unplanned road networks have helped generate some of the highest levels of air pollution in the world.

 
Project Name Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3
Project Number 45007-009
Country Mongolia
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3946-MON: Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3
Ordinary capital resources US$ 25.05 million
Loan 3947-MON: Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3
concessional ordinary capital resources lending / Asian Development Fund US$ 18.60 million
Loan: Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3
European Investment Bank US$ 18.65 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Education / Education sector development

Transport / Urban roads and traffic management

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

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

Ulaanbaatar city is home to more than 1.44 million people. The central city core with comprehensive utility services is surrounded by vast, substandard, and unserved ger areas of about 100 square kilometers. Ger areas accommodate about 60% of the city's population (about 840,000 inhabitants) and have spread and expanded through successive waves of migration. These settlements of low- and medium-income households are characterized by loosely aligned plots, creating irregular unpaved pathways. The majority of households living here have land tenure. Lack of basic urban infrastructure and services in ger areas has caused severe pollution that threatens city residents' health. Obsolete household coal stoves for heating, and traffic congestion caused by unplanned road networks have helped generate some of the highest levels of air pollution in the world. Households exclusive reliance on open pit latrines and a poor solid waste collection system has led to poor sanitation, along with limited access to water supplied by water kiosks. There is a lack of basic social and public facilities, such as green spaces, parks, sports centers, kindergartens, and primary health centers. The upgrading of ger areas is constrained by inadequate urban infrastructure, lack of urban planning, poor urban services, and limited public spaces and facilities.

On 12 December 2013, the Asian Development Bank (ADB) approved the Ulaanbaatar Urban Services and Ger Areas Development Investment Program using multitranche financing facility (MFF) modality, comprising three tranches. On 16 April 2020, the President approved the extension of the MFF availability period from 9 years to 10 years (or from 31 December 2022 to 11 December 2023) to ensure the timely implementation of tranche 3. The total program cost is $320.00 million, of which $163.70 million will be financed by ADB; $96.00 million by the Municipality of Ulaanbaatar (MUB); and up to 50.00 million euros ($60.30 million equivalent at the time of approval) parallel cofinancing by the European Investment Bank. This program is the result of a successful policy dialogue between ADB and the MUB that catalyzed the (i) integration of ger areas in the Ulaanbaatar city master plan for the first time in December 2013, and (ii) adoption of a priority service and economic hubs (subcenters) development strategy in ger areas as a catalyst for more polycentric and inclusive city development. Under this program, a road map has been developed to establish a network of well-developed city subcenters to provide jobs, housing, and economic opportunities with reduced soil and air pollution. The program has introduced a paradigm shift and replicable mechanism to systematically extend modern infrastructure and key social facilities to ger area. The framework financing agreement was signed on 9 December 2013 and ratified by the Mongolian Parliament on 23 May 2014.

Tranche 3 of the MFF will align with the program strategic road map to support the redevelopment of two additional subcenters in the eastern and western ger areas (Sharkhad and Tolgoit).

Project Rationale and Linkage to Country/Regional Strategy Ulaanbaatar city is home to over 1.44 million people. The central core of the city largely comprises apartment blocks with comprehensive utility services. Surrounding the central core is a vast, low density, about 100 square kilometers of peri-urban area (so-called ger areas) with poor infrastructure that accommodates about 54.5% of the city's population (approximately 800,000 inhabitants). Ger areas have spread and expanded through successive waves of migration. These settlements of low- and medium-income households are characterized by loosely aligned plots, creating irregular pathways that remain unpaved. The majority of households living here have land tenure. Lack of basic urban services causes severe pollution that threatens the city residents' health because of (i) unimproved individual coal stoves used by most ger area residents during winter which generate high air pollution; (ii) poor sanitation, since households almost exclusively rely on open pit latrines; (iii) poor solid waste collection which creates highly unsanitary living conditions, along with limited access to water supplied by water kiosks; and (iv) traffic congestion caused by unmanaged road network. The upgrading of ger areas is constrained by inadequate urban infrastructure, lack of urban planning, poor urban services and limited public spaces and facilities.
Impact Improved living conditions in Ulaanbaatar (Ulaanbaatar City Master Plan [2030])
Project Outcome
Description of Outcome A network of livable, competitive, and inclusive subcenters in Ulaanbaatar's ger areas
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Roads and urban services expanded within the targeted subcenters and connectivity between subcenters improved

Economic and public services in targeted subcenters improved

Institutional capacity for program management and urban development strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Ulaanbaatar
Safeguard Categories
Environment B
Involuntary Resettlement A
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The initial environmental examination and environmental management plan for tranche 3 were prepared based on the feasibility study report, and were disclosed on the ADB website on 8 April 2020. A general environmental impact assessment for tranche 3 was issued by the Ministry of Environment and Tourism in October 2019, which concluded that tranche 3 is subject to detailed environmental impact assessment (DEIA) pursuant to the requirements of the Mongolian Law on Environmental Impact Assessment (2012). The draft DEIA has been prepared and is expected to be approved by the Ministry of Environment and Tourism after public consultation meetings at the khoroo (municipal subdistrict) level are conducted. Approval of the DEIA is a prerequisite for starting the civil works. Public consultation meetings that identified environmental issues and concerns, and appropriate impact mitigations, were conducted in June 2019 in Sharkhad and Tolgoit. The environmental assessment and review framework prepared for the entire investment program was updated and disclosed on the ADB website on 8 April 2020. The project implementation consulting team will develop and deliver training courses to MUB and PMO staff to strengthen their capacity to oversee and monitor contractors' implementation of the environmental management plan.
Involuntary Resettlement The 2016 resettlement framework for the MFF has been updated based on the implementation experiences in tranche 1 and to reflect the changes in the national requirements. The updated resettlement framework for tranches 2 and 3 is compliant with ADB's Safeguard Policy Statement and does not lower the standards adopted in the 2016 resettlement framework. A land acquisition and resettlement plan (LARP) for the two tranche 3 subcenters has been prepared based on the feasibility designs and the updated resettlement framework. The LARP will be updated upon completion of the detailed designs of the subprojects. A total of 846 land parcels with a land area of 297,740 square meters will be affected, of which 474 will be fully affected. A total of 1,350 households will be affected, including 1,324 residential households and 26 business entities; 1,270 of the 1,350 affected households will experience major impacts. In addition to the 26 business entities, economic displacement impacts will occur to 87 residential households that have income-generating activities on their residential parcels. A total of 5,170 people are estimated to be affected. A social housing facility with 50 apartment units will be constructed under tranche 3 and will be utilized for relocation of affected households without legal title to the impacted properties. The institutional arrangements and grievance redress mechanisms for resettlement implementation established under tranche 1 will be continued for tranche 3, with adequate enhancements incorporating tranche 1 implementation experiences and lessons. While the PMO and MUB have the required capacity and staff with experience in implementing LARPs, ADB will continue its technical assistance programs for capacity building initiatives on livelihood restoration and the training of PMO, MUB, and Land Management Agency staff on the implementation of LARPs. The PMO will be supported by consultants on the preparation and implementation of LARPs. The MUB is committed to work closely with ADB to ensure compliance with ADB requirements on involuntary resettlement.
Indigenous Peoples The indigenous peoples safeguard requirements are not triggered, as the population in the project areas does not include communities that could be treated as such under ADB's Safeguard Policy Statement.
Stakeholder Communication, Participation, and Consultation
During Project Design Extensive consultation has been done to obtain all required data for feasibility study through quantitative and qualitative interviews, i.e., 4,500 households for socioeconomic survey; 724 households for willingness-to-pay survey; 485 residents for land acquisition and resettlement; 323 residents for initial environmental examination; and 237 community members for focus group discussions, including school boys and girls, and project stakeholders from various municipal departments and agencies. The CAP, SDAP, and SME development plans for Tranche 3 have been prepared and aim to ensure inclusion of views from a range of interested parties in developing and reviewing respective designs, plans, and activities; and help in the resolution of complex issues, gain consensus and support from stakeholders, reduce problems in implementation, improve project design, and increase impacts.
During Project Implementation The PMO with support of consultants will undertake consultations with key stakeholders as outlined in the stakeholders' communication plan. Communication with stakeholders will be managed by the PMO environmental and/or social safeguards specialist. The PMO will ensure local stakeholders are consulted, that information on the project is disseminated, and that questions and complaints are addressed quickly and effectively. The community participation component builds off the participation process initiated during the tranche 3 processing and has a focus on community-based planning. During implementation, the development of a framework with a transparent mechanism to regulate urban and land redevelopment will support continuous dialogue with the communities and will ensure the integration of the current resident into the urban redevelopment process.
Business Opportunities
Consulting Services All consultants will be recruited according to ADB's Guidelines on the Use of Consultants (2013, as amended from time to time).
Procurement

All procurement of goods and works will be undertaken in accordance with ADB's Procurement Guidelines (2015, as amended from time to time). All procurement contracts will contain anticorruption provisions as specified by ADB. Procurement will be carried out by the PMO with support and guidance from the detailed design consultants and project implementation support consultants.

Civil works at $5,000,000 and above and goods at $2,000,000 and above will be procured using international competitive bidding (ICB) method. Civil works between $100,001 and $4,999,999, and goods between $100,001 and $1,999,999 will be procured using national competitive bidding (NCB) method. \Packages at $100,000 and below will be procured using shopping method. Before the start of any NCB procurement, ADB and the government will review the public procurement laws to ensure consistency with ADB's Procurement Guidelines (2015, as amended from time to time).

The procedures to be followed for national competitive bidding shall be those set forth in the Public Procurement Law of Mongolia of 1 December 2005, effective 1 February 2006, as amended on 6 February 2007, 16 July 2009, 10 June 2010, 9 June 2011, and December 2011 (referred to as PPLM), with the clarifications and modifications required for compliance with the provisions of ADB's Procurement Guidelines (2015, as amended from time to time).

Responsible ADB Officer Ramasubramanian, Viswanathan
Responsible ADB Department East Asia Department
Responsible ADB Division Urban and Social Sectors Division, EARD
Executing Agencies
Ulaanbaatar Municipal Government
Sukhbaatar Square-11
Ulaanbaatar-46, Mongolia
Timetable
Concept Clearance -
Fact Finding -
MRM 17 Apr 2020
Approval 26 Jun 2020
Last Review Mission -
Last PDS Update 30 Mar 2021

Loan 3946-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Jun 2020 30 Dec 2020 15 Mar 2021 11 Dec 2023 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 95.60 Cumulative Contract Awards
ADB 25.05 26 Jun 2020 0.00 0.00 0%
Counterpart 51.90 Cumulative Disbursements
Cofinancing 18.65 26 Jun 2020 0.00 0.00 0%

Loan 3947-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Jun 2020 30 Dec 2020 15 Mar 2021 11 Dec 2023 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 18.60 Cumulative Contract Awards
ADB 18.60 26 Jun 2020 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 26 Jun 2020 0.00 0.00 0%

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.

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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Tenders

Tender Title Type Status Posting Date Deadline
External land acquisition and resettlement monitoring Firm - Consulting Closed 11 Dec 2020 25 Dec 2020

Contracts Awarded

No contracts awarded for this project were found