LOAN NUMBER 8171-CN Project Agreement (Chongqing Urban Rural Integration Project II-Health) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and CHONGQING MUNICIPALITY Dated )n (/ ,2012 7 PROJECT AGREEMENT AGREEMENT dated .P** / , 2012, entered into between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank") and Chongqing Municipality ("Project Implementing Entity") ("Project Agreement") in connection with the Loan Agreement ("Loan Agreement") of same date between PEOPLE'S REPUBLIC OF CHINA ("Borrower") and the Bank. The Bank and the Project Implementing Entity hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to the Loan Agreement) constitute an integral part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the Loan Agreement or the General Conditions. ARTICLE H - PROJECT 2.01. The Project Implementing Entity declares its commitment to the objectives of the Project. To this end, the Project Implementing Entity shall carry out the Project in accordance with the provisions of Article V of the General Conditions, and shall provide promptly as needed, the funds, facilities, services and other resources required for the Project. 2.02. Without limitation upon the provisions of Section 2.01 of this Agreement, and except as the Bank and the Project lifiplementing Entity shall otherwise agree, the Project Implementing Entity shall carry out the Project in accordance with the provisions of the Schedule to this Agreement and the POM. ARTICLE III - REPRESENTATIVE; ADDRESSES 3.01. The Project Implementing Entity's Representative is its Mayor or Vice Mayor. 3.02. The Bank's Address is: International Bank for Reconstruction and Development 1818 H Street, NW Washington, DC 20433 United States of America Cable: Telex: Facsimile: INTBAFRAD 248423(MCI) or 1-202-477-6391 Washington, D.C. 64145(MCI) -2- 3.03. The Project Implementing Entity's Address is: Chongqing Municipal Project Management Office of the World Bank's Capital Utilization 14 Floor Sun of Asia Mansion, 248 Renmin Road, Chongqing, 40015 People's Republic of China Facsimile: 86-23-63877822 AGREED at Beijing, People's Republic of China, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By k rized Representative Name: I10U 3 Title: _____ '____ CHONGQING MUNICIPALITY By Authorized Representative Name: Title: IX .0 - C-C4bV /~~- -3- SCHEDULE Execution of the Project Section I. Implementation Arrangements A. Institutional Arrangements 1. The Project Implementing Entity shall maintain, or cause to be maintained, throughout the implementation of the Project: (a) a Project Steering Committee, chaired by a Vice Mayor and comprising senior officials from the municipal government, CQDRC, CQFB, CQHB, the Human Resources and Social Security, and the Foreign Affairs Office, all to be collectively responsible for providing general oversight and policy guidance to the Project; (b) a CQPMO, under the Project Steering Committee, to be responsible for the overall coordination and management of the project design and implementation, in particular for the management of Part B of the Project, including procurement, financial management, preparing for consolidated financial and project progress reports, consolidating of project monitoring and evaluation data under the Project; (c) a HBPMO to be responsible for the preparation and implementation of Part A of the Project: and (d) at each Project Hospital, a PIU, with qualified staff in adequate number, to coordinate or to carry out the activities at Project Hospital level. 2. The Project Implementing Entity shall ensure that, throughout the implementation of the Project, the CQPMO, HBPMO and PIUs, at all times, maintain qualified and exper!enced staff in adequate numbers. 3. The Project Implementing Entity shall: (i) by no later than August 30, 2012, adopt a POM, in form and substance agreed with the Bank; (ii) implement the Project in accordance with the POM; and (iii) except as the World Bank shall otherwise agree, shall not amend or waive any provision thereof if, in the opinion of the World Bank, such amendment or waiver may materially and adversely affect the implementation of the Project. 4. The Project Implementing Entity shall: (i) prepare and furnish to the Bank, by no later than December 15 of each year, for its review and approval, the AWPB for the following year; and (ii) incorporate the Bank's views and comments before carrying out said AWPB. -4- B. Anti-Corruption The Project Implementing Entity shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines, including the provisions thereof that are applicable to the recipients of Loan proceeds other than the Borrower. C. Safeguards 1. The Project Implementing Entity shall implement, or shall cause the Project Counties to implement, the RAPs and the EMP, respectively, all in a manner and substance satisfactory to the Bank. Without limitation on the foregoing, the Project Implementing Entity shall: (a) take all necessary actions to minimize to the extent possible the acquisition of land or assets of people, any involuntary loss by persons of shelter, productive assets or access to productive assets or income or means of livelihood, temporarily or permanently, and the displacement of said people in the carrying out the Project or any Part thereof; (b) where the acquisition of land or assets or the displacement of people is unavoidable, make available to such people compensation in accordance with the RAP, before the carrying out of the works which would result in such acquisition or displacement, all in a manner satisfactory to the Bank; (c) in carrying out the Project or any part thereof, apply the EMP in a manner satisfactory to the Bank; (d) ensure that each contract for works financed with the proceeds of the Loan shall include the obligations of the work contractors and any sub- contractor to comply with the relevant provision of the EMP. 2. The Project Implementing Entity shall not, amend, suspend, or waive the RAPs, or the EMP, or any provision thereof, without the prior written concurrence of the Bank. 3. The Project Implementing Entity shall maintain policies and procedures adequate to enable it to monitor and evaluate, in accordance with guidelines acceptable to the Bank, the implementation of the RAPs, and the EMP. -5- 4. Without limitation to the provisions of paragraphs 1 through 3 of this Part C or the provisions of paragraph I of Part A of Section II below, the Project Implementing Entity shall take all measures necessary on its part to regularly collect, compile, and submit to the Bank, as part of the Project Reports, information on the status of compliance with the RAPs and the EMP, giving details of: (a) measures taken in furtherance thereof; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementaticn thereof; and (c) remedial measures taken or required to be taken to address such conditions. 5. In the event of any inconsistency between the provisions of the RAPs and the EMP and the provisions of this Agreement or the Loan Agreement, the provisions of this Agreement and the Loan Agreement shall prevail. 6. The Project Implementing Entity shall maintain until the completion of the Project, a medical wastewater engineer/medical waste management expert with experience and qualifications satisfactory to the Bank to (a) review and evaluate the design of medical wastewater facility; (b) review and inspect the compliance of the Project civil works and maintenance procedures with the related national regulations and relevant provisions of the EMP. D. Financing Arrangement The Project Implementing Entity shall allocate to each of the Project Counties a portion of the Loan, under on-lending arrangements satisfactory to the Bank, which shall include, without limitation, the following principal terms: (a) The Project Implementing Entity shall make available the principal amount, which has been allocated, from time to time, to each of the respective Project Counties (on the date, or respective dates, of withdrawal from the Loan Account) of the value of -the currency or currencies so withdrawn on account of the implementation of Project by the respective Project Counties. (b) The Project Implementing Entity shall recover such principal amount so made available (including the fee paid pursuant to Section 2.03 of the Loan Agreement and the amount of the Premium paid pursuant to Section 2.07(c) of this Agreement) over a period of twenty-five (25) years, inclusive of a grace period of six (6) years. -6- (c) The Project Implementing Entity shall charge interest on such principal amount, withdrawn and outstanding from time to time at a rate equal to the rate of interest applicable from time to time to the Loan pursuant to Section 2.04 of the Loan Agreement. 2. Without limitation to the provision of paragraph I above, no disbursement against the allocation to a Project County shall be made by the Bank, unless the on-lending arrangement between the Project Implementing Entity and the Project County, referred to in paragraph 1 above, has been reviewed and cleared by the Bank. Section II. Project Monitoring, Reporting and Evaluation A. Project Reports 1 . The Project Implementing Eatity shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 5.08(b) of the General Conditions and on the basis of the indicators set forth in the Annex to this Schedule. Each such Project Report shall cover the period of one (1) calendar semester, and shall be furnished to the Borrower not later than March 15 and September 15 1ach year, commencing March 15, 2013. 2. Without limitation to the provision of paragraph I above, the Project Implementing Entity shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators set forth in the Annex to this Schedule, satisfactory to the Bank, the carrying out of the Project and the achievement of the objective thereof; (b) prepare, under terms of reference acceptable to the Bank and furnish to the Bank pursuant to Section IIA.I of Schedule 2 to the Loan Agreement: (i) semi-annual reports, not later than March 15 and September 15 in each year, beginning March 15, 2013, summarizing the monitoring and evaluation activities carried out by it pursuant to subparagraph (a) of this paragraph in respect of the preceding calendar semester, and setting forth the physical and financial progress in the implementation of the Project, both cumulatively, and in respe,-t of the said preceding calendar semester; and (ii) a mid-term report, not later than August 31, 2015, integrating the results of the monitoring and evaluation activities performed pursuant to Section II.A of this Schedule, on the progress -7- achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) promptly review with the Borrower and the Bank the reports referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said reports and the Borrower's and Bank's views on the matter. 3. The Project Implementing Entity shall provide to the Borrower not later than four (4) months after the Closing Date, for incorporation in the report referred to in Section 5.08(c) of the General Conditions (Implementation Completion Report), all such information as the Borrower or the Bank shall reasonably request for the purposes of that Section. B. Financial Management, Financial Reports and Audits 1 . The Project Implementing Entity shall maintain a financial management system and prepare financial statements in accordance with consistently applied accounting standards acceptable to the Bank, both in a manner adequate to reflect the operations and financial condition of the Project Implementing Entity, including the operations, resources and expenditures related to the Project. 2. The Project Implementing Entity shall have its financial statements referred to above audited by independent auditors acceptable to the Bank, in accordance with consistently applied auditing standards acceptable to the Bank. Each audit of these financial statements shall cover the period of one (1) fiscal year of the Project Implementing Entity. The Project Implementing Entity shall ensure that the audited financial statements for each period shall be: (a) furnished to the Borrower and the Bank not later than six(6) months after the end of the period; and (b) made publicly available in a timely fashion and in a manner acceptable to the Bank. Section I. Procurement A. General 1 . Goods, Works and Non-consulting Services. All goods, works and non- consulting services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Section. -8- 2. Consultants' Services. All consultants' services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Sections I and IV of the Consultant Guidelines and with the provisions of this Section. 3. Definitions. The capitalized terms used below in this Section to describe particular procurement methods or methods of review by the Bank of particular contracts refer to the corresponding method described in Sections II and III of the Procurement Guidelines, or Sections II, III, IV and V of the Consultant Guidelines, as the case may be. B. Particular Methods of Procurement of Goods, Works and Non-consulting Services 1 . International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods, works and non-consulting services shall be procured under contracts awarded on the basis of International Competitive Bidding. 2. Other Methods of Procurement of Goods, Works and Non-consulting Services. The following table specifies the methods of procurement, other than International Competitive Bidding, which may be used for goods, works and non-consulting services. The Procurement Plan shall specify the circumstances under which such methods may be used. Procurement Methods (a) National Competitive Bidding. In addition, the procedures to be followed for National Competitive Bidding shall be those set forth in the Law on Tendering and Bidding of the People's Republic of China promulgated by Order No. 21 of the President of the People's Republic of China on August 30, 1999, with the following clarifications required for compliance with the Procurement Guidelines: (i) All invitations to prequalify or to bid shall be advertised in a newspaper of national circulation in the Borrower's territory, except for civil works contracts that are estimated cost less than $2,000,000 equivalent each and for goods contracts that are estimated to cost less than $300,000 equivalent each, which may be advertised in a provincial daily newspaper. Such advertisement shall be made in sufficient time for prospective bidders to obtain prequalification or bidding documents and prepare and submit their responses. In any event, a minimum of thirty (30) days shall be given to bidders between the date of advertisement in such newspaper and the deadline for -9- submission of bids, and the advertisement and bidding documents shall specify the deadline for such submission. (ii) Qualification requirements of bidders and the method of evaluating the qualification of each bidder shall be specified in detail in the bidding documents. (iii) All bidders t.hat meet the qualification criteria set out in the pre- qualification document shall be allowed to bid and there shall be no limit on the number of pre-qualified bidders. (iv) All bidders shall be required to provide security in an amount sufficient to protect the Borrower or the Project Implementing Entity (Chongqing), as the case may be, in case of breach of contract by the contractor, and the bidding documents shall specify the required form and amount of such security. (v) Bidders wil' be allowed to submit bids by mail or by hand. The time for opening of all bids shall be the same as the deadline for receipt of sLch bids. (vi) All bids shall be opened in public; all bidders shall be offered an opportunity to be present (either in person or through their representatives) at the time of bid opening, but bidders shall not be required to be present at the bid opening. (vii) All bid evaluation criteria shall be disclosed in the bidding documents and quantified in monetary terms or expressed in the form of pass/fail requirements. (viii) No bid may be rejected solely on the basis that the bid price falls outside any standard contract estimate, or margin or bracket of average bids established by the Borrower or the Project Implementing Entity (Chongqing), as the case may be. (ix) Each contract shall be awarded to the lowest evaluated responsive bidder, that is, the bidder who meets the appropriate standards of capability and resources and whose bid has been determined (A) to be substantially responsive to the bidding documents; and (B) to offer the lowest evaluated cost. The winning bidder shall not be required, as a condition of award, to undertake responsibilities for work not stipulated in the bidding documents or otherwise to modify the bid as originally submitted. - 10 - (x) Each contract financed with the proceeds of the Loan shall provide that the suppliers and contractors shall permit the Bank, at its request, to inspect their accounts and records relating to the performance of the contract and to have said accounts and records audited by auditors appointed by the Bank. (xi) Government owned enterprises in the Borrower's country may be permitte. to bid or submit a proposal of goods and works if they can establish that they: (A) are legally and financially autonomous; (B) operate under commercial law; and (C) are not a dependent agency of the agency conducting the procurement. (xii) All bids should not be rejected solely because the number of bids is less than three (3), and rejection of all bids or rebidding shall not take place without the Bank's prior written concurrence. (xiii) The results of bid evaluation and contract award shall be published in the national press or provincial press (as provided under sub-paragraph (i) above) or official gazette or a free and open access website and shall identify the name and offered price of th. winning bidder, as well as the duration and summary scope of the awarded contract. (xiv) The Project Implementing Entity (Chongqing) shall have in place provisions for bidders to protest. (b) Shopping (c) Direct Contracting C. Particular Methods of Procurement of Consultants' Services 1 . Quality and Cost-based Selection. Except as otherwise provided in paragraph 2 below, consultants' services shall be procured under contracts awarded on the basis of Quality and Cost-based Selection. - 11 - Other Methods of Procurement of Consultants' Services. The following table specifies the methods of procurement, other than Quality-and Cost-based Selection, which may be used for consultants' services. The Procurement Plan shall specify the circumstances under which such methods may be used: Procurement Methods (a) Quality-Based Selection (b) Selection Based on Consultants' Qualifications (c) Selection of Individual Consultants (d) Single Source Selection (Firm and Individual) D. Review by the Bank of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Bank's Prior Review. All other contracts shall be subject to Post Review by the Bank. - 12 - Annex Indicators Results Framework PDO Performance Indicators Use of Project performance indicator Improve the access of 1 % of inpatient referred to upper level No.1 Tracking the improvement of population in selected' hospitals, disaggregated by gender; service delivery capacity of project non-metropolitan areas 2. Average length of stay in project hospitals. to county level hospital- hospitLS; based services, raise 3. # of project hospitals with No. 2, Tracking the efficiency the efficiency of service standa-clized cost accounting system improvement of project hospitals. production and improve producing departmental level unit the quality of care of cost data on a quarterly basis; No. 3 & 4 Tracking the quality targeted hospitals. 4. # of high ie 2 eand cost management conditons or diseases treated using improvement of project hospitals clinical pathways in project hospitals. These include Chengkou, Dianjiang, Torignan, Fuling, Qianjiang, Wanzhou, Wushan and Youyang. 2 It is expected that the 10 diseases/conditions using clinical pathway will account for 15% of the total admissions. - 13 - Intermediate Project Outcome Indicators Use of Project performance Outcomes indicator Part A: Strengthening 5. # of C-Cs and THCs having signed No. 5 Tracking progress on Service Delivery coordination and referral agreements coordination of care among Performance: with each project county hospital facilities at different levels (a) Institutional implementing coordinated care Readiness for package. No.6 Tracking progress on rational Reform 6. Decrease in the use of antibiotics as prescription of antibiotics (b) Training measured by the index of antibiotics (c) HMIS and intensi,y (Defined Daily Dose). No. 7 Tracking the progress of Telemedicine 7. Increase in quality assessment scores quality management of project in project hospitals implementing hospitals ContinPaous Quality Improvement (CQI) p)rogram.4 No. 8 Measuring the quality and 8. # of trainees who complete the quantity of training program under training as evidenced by completion the Project certificate or accreditation. 9. # of heilth staff trained. No. 9 World Bank Core Indicator 10. # of co nty hospitals included in annual hospital performance No. 10 Tracking the progress of assessment report. health bureaus in implementing 11. # of project hospitals using tele- hospital performance assessment medicine technology for tele- diagnosis according to established No. 11I Tracking the progress in protocc. implementing telemedicine 12. # of evaluations conducted on pre- technology reform packages No. 12 Measuring the progress in .project impact evaluation Part B: Improvement 13. # of project hospitals that meet or 13.14.15. Measuring the progress of County/District exceed the National Energy Saving in implementing energy efficient Level Health Facilities Standatd GB5o 189. standards in hospital construction. 14. % of the construction area with central heating! air conditioning 16. World Bank Core Indicator I system out of the total hospital 17. Measuring the progress in mDefined Daily Dose: used as an indec for antibiotics intensity which is measured in every hospital as required by the MOH in is efforts to control the inappropriate prescription of antibiotics. 1 Based on the difference between pre- and post-assessments, according to standardized survey instrument. This instrument, quality improvement implementation survey, was developed by Health Policy and Management, School of Public Health, University of California, Berkeley to. measure implementation and results of hospital-based CQI programs. Produced by the municipality and bastd on tracking system consisting of an agreed set of quality, production, efficiency and spenping indicators drawn from MOH guidelines. Indicators are validated and reviewed with hospital management, and actions agreed to raise performance. - 14 - construction area. capacity building on project 15. # of project hospitals with a cooling management and impact evaluation system that meets national standard (GB19577, GB19576 & GB21454) on eneigy consumption cap and energy efficiency category 16. # of health facilities constructed, renovated and/or equipped. 17. # of projects completed 60% of its annual physical progress plan. - 15 - Results Framework and Monitoring CHINA: CHONGQING URBAN RURAL INTEGRATION PROJECT 11-HEALTH Results Framework Project Development Objectives PDO Statement The Project Development Objective is to improve the access of populations in selected non-metropolitan areas to County/District level hospital-based services, raising the efficiency of service production and improving the quality of care in targeted hospitals. Project Development Objective Indicators (lumulative I arget values Data Source/ Responsibility for Indicator Name Core Unit of Measure Baseline YRI YR2 YR3 YR4 End Target Frequency Methodology Data Collection County Health Bureaus and Percent of inpatient Routine reporting Chongqing Health Bureau referred to upper level Percentage 8.00 7 50 7.00 6.50 6.00 Annual by hospitals Project Management Office for hospitals by gender collection and verification. County Health Bureaus and Chongqing Health Bureau Average length of stay in Days 9.80 9.50 9.20 8.80 8.50 Annual Routine reporting Project Management Office are project hospitals by hospitals responsible for collection and verification Number of project hospitals with County Health Bureaus and standardized cost Routine reporting Chongqing Health Bureau are accounting system Number 0.00 0.00 2.00 5.00 8.00 8.00 Annual by hospitals responsible for collection and producing departmental verification level unit cost data on a quarterly basis Number of high volume County Health Bureaus and inpatient conditions or Number 0.00 4.00 6.00 8.00 0.00 Routine reporting Chongqing Health Bureau diseases treated using .00 01 Annual Project Management Office cliicl pthaysin% o amisios 000 5% % 2% 5%by hospitals responsible for collection and project hospitals __________verification - 16 - Intermediate Results Indicators Cumulative Target Values 1)ata Source/ Responsibility for Indicator Name Core Unit of Measure Baseline YRI YR2 YR3 YR4 End Target Frequency Methodology Data Collection Number of Community Health Centers and Township Health Centers County Health Bureaus and having signed Chongqing Health Bureau coordination and referral Number 0.00 0.00 2.00 4.00 5 5 Annual Routine reporting Project Management Office agreements with each by hospitals responsible for collection and project/county hospital verification. implementing coordinated care package Decrease in the use of County Health Bureaus and antibiotics as measured Rotine reporting - r4r U1,1EUIU by the index of Percentage 0.00 0.00 5.00 10.00 15.00 20.00 Annual o Project Management Office antibiotics intensity responsible for collection and verification Increase in quality assessment scores in Chongqing Health project hospitalsNumber Annual Bureau Project Chongqing Health Bureau implementing continuous Management Project Management Office quality improvement Office program Number of trainees who Chongqing Health complete the training as Bureau Project Chongqing Health Bureau evidenced by completion Number 0.00 0.00 100.00 300.00 500.00 600.00 Annual Bureu Project Cn nget Bure cetiicteorManagement Project Management Office certificate or Ofc accreditation Office Chongqing Health Health personnel Number Annual Bureau Project Chongqing Health Bureau receiving training Management Project Management Office Office Number of county C hospitals included in Chongqing Health County Health Bureaus and annual hospital Number 0.00 0.00 1.00 3.00 5.00 8.00 Annual Bureau Project Chongqing Health Bureau performance assessment Maagement Project Management Office report -17- Number of project hospitals using County Health Bureaus and telemedicine tecnology Number 0.00 0.00 0.00 4.00 8.00 8.00 Annual Ro reporting Project Management Office according to established responsible for collection and protocols verification Number of project hospital buildings that . Collected and verified by meet or exceed the Number 0.00 0.00 0.00 0.00 3.00 8.00 Annual Routine reporting Chongqing Project Management National Energy Saving y ospitas Office Standard GB50189 Percent of the construction area with central heating/air Recnae .0b ot i ret ing Ollced n eiidb h conditioning system out Percentage 0.00 10.00 10.00 10.00 30.00 60.00 Annual Chporingg Projet angement of the total hospital construction area Number of project hospitals with a cooling system that meets national standard 8 Coetdnd rifed by (GB19577, GB19576, Number 0.00 0.00 0.00 0.00 3.00 8.00 Annual Routine hospital Coegqnd Pred by and GB21454) on energy reportmg Office consumption cap and energy efficiency category Health facliie r Collected and verified by constructed, renovated, Number 0.00 0.00 0.00 0.00 3.00 8.00 Annual Roti orting Chongqing Project Management Chnsngucing Projctvanagmen and/or equipped Office Number of evaluations Chongqing Health cNued on re-reior0 3.00 Annual Bureau Project Chongqing Health Bureau conducted on pre-reform Number 0.00 0.00 0.00 1.00 0.00 Management Project Management Office Office Numbertofeprojecti Collected and verified by hospertal petm 6 ubr 00 0 20 0 60 8.00 Annual Ruiereporting Chongqing Project Management hospitals completed 60 Number 0.00 0.00 2.00 4.00 6.00 by hospitals Office percent of its annual CogigPoetMngmn physical progress Planrk___