Nepal India Regional Trade and Transport Project (NIRTTP) (IDA Credit 5273-NP and IDA Grant H-863-NP) Implementation Support Review, January 7-31, 2019 Aide Memoire 1. During January 7-31, 20191, a Bank Team2 led by Deepak Shrestha carried out an Implementation Support Review of the Nepal-India Regional Trade and Transport Project (NIRTTP). This Aide Memoire (AM) summarizes the findings on the status of project implementation, and agreements reached during the review. The AM was discussed at the wrap-up meeting chaired by Mr. Chandra Kumar Ghimire3, Secretary, Ministry of Industry, Commerce and Supplies (MoICS), and a separate debriefing meeting with Mr. Shreekrishna Nepal, Joint Secretary, Ministry of Finance, on January 11, 2019. The Bank team also met the new Secretary Mr. Kedar Bahadur Adhikari, MoICS on January 30, 2019. As agreed during the review, this AM will be classified as a public document in accordance with the World Bank’s Access to Information Policy. OVERALL STATUS AND KEY PROJECT DATA 2. The likelihood of achievement of Project Development Objective and Implementation Progress have both been downgraded to “Moderately Unsatisfactory” due to two critical issues: (i) start of works for construction of Kathmandu Inland Container/Clearance Depot (ICD) at Chobhar with help of security personnel despite of unresolved grievances of locals regarding the legacy land issues of earlier Himal Cement Factory; and (ii) substantial delay in the procurement process for National Single Window (NSW) leading to fourth and final bid validity extension up to February 24, 2019. Program Data Program Performance Ratings Board approval: 28-Jun-2013 Current Consideration Last Rating Trend Rating Effectiveness date: 10-Sep-2013 Achievement of PDO MS MU ▼ Original closing date: 31-Dec-2019 Implementation Progress MS MU ▼ Component A1/A2-MoICS MS MS ◄► Mid-term review date 13-Feb-2017 Component A3-DoTM S S ◄► Component B1-TEPC HS HS ◄► Original IDA amount US$ 99.0 m Component B1- DoC U U ◄► IDA Grant US$30.0 m Component B2-MoALD MS MS ◄► IDA Credit US$69.0 m Component B3-PCO MS MS ◄► Component C1-DoR S S ◄► Component C2-NITDB MS MU ▼ Component C3-NITDB MS MS ◄► Project Management MS MU ▼ Procurement MS MU ▼ Financial Management MS MS ◄► Amount disbursed: USD 59.29 m (Jan 9, 2019) (48.52%) Safeguards MS MU ▼ M&E MS MS ◄► Counterpart Funding S S ◄► Overall Project Rating MS MU ▼ Notes: S- satisfactory; MS – moderately satisfactory; MU - moderately unsatisfactory; U – unsatisfactory; ▲ improving trends; ▼ deteriorating trends; ◄► static 1 Originally planned for January 7-11; Due to quick developments on the issues related to the Inland Clearance Depot at Chobhar the review period was extended to January 31, 2019 for further consultations. 2 Deepak Shrestha (TTL, Senior Transport Specialist), Erik Nora (co-TTL, Sr. Operations Officer), Charles Kunaka (Lead Trade Economist), Sri Kumar Tadimalla (Senior Transport Specialist), Josefo Tuyor(Senior Environmental Specialist); Prakash Awasthi (Environmental Consultant), Jun Zeng (Senior Social Development Specialist), Hari Bhattarai (Social Safeguards Consultant), Shambhu Uprety (Sr. Procurement Specialist), Ramesh Bista (Procurement consultant), Yogesh Bom Malla (Sr. Financial Management Specialist), Pradip Shrestha (Financial consultant), Surendra Joshi (Implementation Consultant), Kamal Pande (Consultant), Sunil Poudyal (Consultant) and Bibash Shrestha (Program Assistant). 3 The Secretary Mr. Ghimire was transferred and replace by Mr. Kedar Bahadur Adhikari during the review period. 1 KEY POINTS DISCUSSED AND AGREED ACTIONS 3. This section summarizes the key issues and actions in each project component. Detail description of progress status for each component is provided in Annex 3. 4. Component A1: Technical Assistance (TA) to Modernize Bilateral and Regional Transit Regime: The program of analytical and technical assistance activities implemented under the Project has been used to support several new trade facilitation initiatives with India. One of the significant developments has been the opening up to Nepali traffic of the transit corridor from the port of Vishakhapatnam. Operations have been designed with the use of an electronic cargo tracking system (ECTS), though still on a pilot basis. Program of analytical and technical assistance activities totaling US$800,000 is under implementation. As requested earlier by the government, the remaining US$3.7 million will be reallocated to components that are short of funds. 5. Component A2: Electronic Data Interchange between Nepal and India. During the 18th Customs Director General meeting in October 2017 the Governments of Nepal and India had agreed to work on Customs Transit Document (CTD) automation. Taking cognizance of the fact that the ECTS pilot is a bilateral initiative between India and Nepal, the team urged the government to draw up a plan for drafting of Standard Operating Procedure for the system, its scaling up and extension to the Kolkata corridor. The results framework indicator on the CTD, “Percentage of transit goods cleared through electronic CTD”, may have to be dropped when there is a light restructuring of the project. 6. Component A3: Support to the Road Transport Regulatory Authority. Key agreed activities include (i) Dissemination of this bus route survey information and guidelines to the province level transport offices;( ii) launch the Road Accident Information Management System (RAIMS) officially for Kathmandu valley and proceeding forward to implement in Kathmandu Birgunj corridor traffic police offices; (iii) restart the process of Expression of Interest (EOI) for the operation and maintenance of existing Kathmandu Vehicle Fitness Testing Centre (VFTC) facilities; (iv) plan to construct a smaller scale of weigh bridge station in completed section of Narayanghat Mugling Road; (v) complete the study for the proposed VFTC facilities in Province level; and (vi) start planning to implement the GPS based tracking system in the public vehicles. Considering already executed and planned activities under the Project, the Department of Transport Management (DoTM) will need additional budget of US$1-US$1.5 million to implement all planned activities. It has been agreed that the unused and unallocated funds for Component A can be allocated to DoTM for this purpose. Component B1 – Nepal National Single Window and Trade Information Portal (NNSW/NTIP). 7. Nepal Trade Information Portal (NTIP). The Consultant Ms. Infinite Computer Solutions (India) and Info Developers (Nepal) has prepared a System Design document to develop and enhance the core World Bank NTIP. Accordingly, an updated NTIP core system is being hosted in the Nepal Government cloud. TEPC has initiated process for hiring two individuals, one National and one International IT expert to support their team to review and accept the system. Also, procurement for some additional hardware and solar backup will restart after necessary budget approval for this fiscal year. The Project Coordination Unit agreed to initiate necessary approval of budget and change in the annual program, if any. 8. National Single Window (NSW). There continues to be substantial delay in the implementation of this sub-component. The bids received on March 21, 2018 are still under evaluation process. After the last review in June 2018, the Government communicated interest in continuing with the implementation of the NSW, and also requested to extend the Project closing date for one year mainly for this component. The Bank has provided the fourth and final no objection for extension of the bid validity period up to February 24, 2019. Department of Customs (DoC) team together with assistance from the Procurement Specialist in the PCU (MoICS) has completed the technical evaluation but still need to finalize the evaluation and award before February 24, 2019. The Government has committed to closely monitor the 2 timelines for award of contract within the bid validity period to avoid the situation of possible cancellation of this component. In case of award of NSW contract, the DoC team need to (i) seek services of the Project Monitoring and Quality Advisory (PMQA) services consultant; and (ii) reconstitute the National Single Window Working Group for monitoring and coordination. 9. Component B2 – Improvement of Trade-Related Laboratories. Construction of the new Sanitary and Phyto-Sanitary (SPS) Laboratory at Harihar Bhawan is in progress. As an effect of federalism and organizational changes, the team noted that now Plant Quarantine and Pesticide Management Office (PQPMO), responsible for the SPS laboratory management, is responsible for this particular component. The team noted that the earlier agreed activity to develop web-based national pest surveillance database has been dropped. Instead, some specific lab equipment, study for the organization in the changed scenario of federalism, and some trainings have been agreed to be included. Under the same component, Department of Customs has procured a gas-liquid chromatography & mass spectrometry analyzer, and is in the process of procuring an X-ray radiography examination equipment to support the Customs Lab in Kathmandu 10. Component B3 – PCO and NTTFC Strengthening. The PCO has been continuing to coordinate and support the multiple trade related agencies under the Project. Technical advisors, procurement specialist, and environmental specialist services has been continued to be engaged to support the MoICS, NTTFC, MoALD, DoTM, NITDB and other project implementation. It has been noted that the PCO is also supporting to conduct various studies in the trade related activities to support the discussions and decision process in the Ministry. 11. Component C1 – Narayanghat-Mugling (N-M) Road Improvement Works. The improvement works on the 33km of N-M Road has been substantially completed however, the followings are agreed to complete the remaining residual works as; (i) implement the remaining traffic safety measures considering increasing traffic volume and vehicle speed; (ii)appoint design consultant, investigate and finalize the designs for slope works, and complete implementation of measures before monsoon 2019; (iii) finalize the details of construction method including traffic management and safety in the Jalbire bridge; and (iv) assess and finalize the approach and safety related issues in all the four bridges being built in parallel to existing bridges by end of February 2019. 12. Kathmandu-Naubise-Mugling (KNM) Road preparation. Feasibility, detailed design, and environmental and social safeguards studies have been completed. Government’s request for funding for existing road improvement and one bypass namely, Sisne khola – Dharke (12 km) received. Considering the project preparation point of view the following were considered as next actions: (i) Design review and finalization of scope of works in the improvement and new bypass, (ii) preparing the bid documents with due considerations of the traffic management, construction safety, operation and maintenance. As such, lessons learned from implementation of N-M road should be incorporated in the planning and implementation. (iii) retrofitting of ESIA report for these road sections as per new Environmental Social Framework (ESF) requirement, and (iv) preparation of Project Procurement Strategy for Development (PPSD) as per the New Procurement Framework. 13. Component C2. Development of Inland Container/Clearance Depot in Kathmandu at Chobhar. Following the complaint letter received from Chobhar Conservation Committee on 29th August, 2018, the Bank requested the Ministry to review the issues raised in the grievances and advise the Bank about its action plan to resolve it. Despite regular follow up, various consultation meetings with the NITDB and the Ministry, the Bank team has not received any action plan. In the meantime, the foundation stone laying ceremony by the Prime Minister was held on January 17, 2019 when about 55 agitating locals has been reported to be detained and released later by the police. The media report suggests the works has started in the presence of security personnel. The Bank team, during follow up meetings with the Ministry, highlighted that the grievances of locals need to be resolved as per applicable safeguard policies. On this the Ministry agreed (i) to form a high level committee and continue this throughout the project period; (ii) include in the TOR that the grievances to be dealt as per the safeguards requirements for the Project; (iii) 3 to communicate their latest plan of action for addressing this grievance, including the formation and TOR of high level committee; and (iv) develop formal mechanism for fortnightly meetings between the Ministry and the Bank Team to jointly review the progress on this regard. 14. Component C3. Improvement of Bhairahawa and Birgunj ICDs: Bhairahawa ICD pavement works completed in April 2016. Birgunj ICD shed completed more than 95% . Physically, the shed and concrete flooring is complete with minor works remain are floor top finish, electrification, and fire hydrant. The team noted that the Consultant shall issue completion certificate when substantially complete. Liquidated damages is already applied due to substantial delay. The activity of shifting and improvement of existing railway tracks at Birgunj ICD shall be cancelled. 15. Results Monitoring and Evaluation (M&E). The M&E rating is maintained as Moderately Satisfactory. First cycle of data collection in December 2018 is complete and reported on transit time between Birgunj and Kolkata. Available data suggest a significant improvement in transit and border clearance time (Annex 5). The NITDB has a vehicle entry and exist system in place that can be used to measure the dwell time of trucks inside the ICP. Based on the latest data, the dwell time is an average of 26 hours though the new Birgunj-Raxaul Integrated Check Post (ICP). The time from Raxaul to entry into the Nepal ICP, including queuing time, was estimated at 0.4 days based on December 2018/January 2019 data, down from 3.5 days when the facility first opened in April 2018. The transit time from Kolkata to Birgunj was assessed at 3.3 days by rail and 4.2 days by road. Due to delay in the procurement of CMEDMS the Team urged NITDB to start with data that it already has access to, including new data streams such as from the Birgunj ICP tracking system and the ECTS pilot. It was agreed that the full build of the CMEDMS as originally conceived may be realized only in the medium term. FIDUCIARY COMPLIANCE 16. Procurement Management. The team assessed the implementation status of the procurement plan. No progress has been made yet on the procurement process of the major procurement activity for development and implementation of NNSW System. The second stage bids received on 21st March 2018 are still under final evaluation process under DOC causing fourth time bid validity extension for up to 24th February 2019. Considering the Government’s commitment to establish and implement “NSW System”, on an exceptional basis, the Bank has agreed the fourth and final extension. In case of Chobhar ICD works contracts, the team would like to draw the Project’s attention to resolve the grievances/ issues as soon as possible as continuation of such issues may risk the contract completion within the project period. Because of the substantial delay in the procurement process of NSW and unresolved grievances/ issues of Chobhar ICD, procurement performance rating is downgraded to “Moderately Unsatisfactory”. 17. Financial Management and Disbursement. Financial Management remains “Moderately Satisfactory” while counterpart funding is Satisfactory. In this fiscal year, the Project has incurred total expenditures of NPR 265.55 million (13.51% of the total approved budget of NPR 1,965.80 million) in the six months. MoICS PCO has incurred expenditures of NPR 85.11 million (5.71% of approved budget) and DoR has incurred expenditures of NPR 180.44 million (38.07% of approved budget). The required disbursement from the Bank for ICD in Kathmandu has not been made due to non-compliance of Section IV B 1(b) of Financing Agreement with respect to provision of the ESMF. NITDB has deposited liquidated damage of NPR 15.05 million recovered from ZIEC - Pappu JV to government revenue. The Project has maintained books of accounts, ledgers, and payment vouchers as required. There are no pending agreed actions except submission of the audit report of FY 2017/18 which is now overdue. 18. Disbursement. Total disbursement as of January 31, 2019 is US$ 59.29 million including initial deposit of US$8.00 million, which is 48.52% of the total allocation. DOR ad MoICS are yet to document US$1.97 million and US$ 1.80 million, respectively for amounts paid from the Designated Account. Estimated disbursement for the remaining period of this fiscal year is US$ 6.5million. Delayed implementation of Chobhar ICD and National Single Window have adversely impacted the disbursement. 4 SAFEGUARDS MANAGEMENT 19. Environmental and Social Safeguards. The environmental and social safeguards performance is rated “Moderately Unsatisfactory” mainly due to pending resolution of complaints coming from some local stakeholders on Chobhar ICD. There is also lack of progress on the actions agreed to be implemented from the last review and the follow up review in October 2018, and January 2019 for the Narayanghat Mugling (NM)Road. More specifically, the following works and environmental, social and health & safety measures remain outstanding for the NM Road: slope stabilization and protection works in seven active slips; road safety improvements and corrections; cleanup and restoration of work areas; improvements of wildlife water holes, plantation of live fences along wildlife passes, and reinstatement of community structures; Meanwhile ESHS staffing for DOR, NITDB and both ICB & NCB Contractors for the Chobhar ICD also remains outstanding. Annex 4 provides detailed assessment of the safeguard performance of the Project and E & S action plan. NEXT STEPS AND REVIEW. The next implementation support review is tentatively planned for June 2019. The Bank team will carry out interim reviews in February/March to reassess progress of the NSW and issues on ICD at Chobhar. Summary of Key Agreed Actions are listed below. Detail lists prioritized actions agreed during the review is presented in Annex 2. 20. Summary of Key Agreed Actions S. No. Actions Responsibility Timeline 1 Complete evaluation and award contract for Nepal National DOC/MoICS by February 24, Single window (NSW) 2019 2 Formation and functioning of High level Committee to resolve NITDB/ February 10, grievances in Chobhar ICD MoICS 2019 3. Complete design and implementation of remaining slope DOR/ MoPIT May 31, 2019 protection and stabilization measures in Narayanghat Mugling road 4 Submit the outstanding audit report of FY 2017/18 DOR and PCU, Asap MoICS Annexes Annex 1. List of Persons Met Annex 2. List of Priority Actions Annex 3. Details on Progress of Project Components Annex 4. Environmental and Social Safeguards Assessment Annex 5. Project Results Framework Annex 6: Updated Project Estimated Costs 5 Annex 1 List of Persons Met Ministry of Commerce (MoICS) 1. Mr. Kedar Bahadur Adhikari, Secretary Department of Roads 2. Mr. Chandra Kumar Ghimire, Secretary 29. Mr. Rabindra Nath Shrestha, Director General 3. Mr. Rabi Shanker Sainju, Joint Secretary and 30. Mr. Keshab Kumar Sharma, Deputy Director NIRTTP Project Director General 4. Mr. Yogendra Prasad Pandeya, Under 31. Mr. Rohit Bisural, Sr. Divisional Engineer Secretary/Project Coordinator 32. Mr. Shiva Raj Adhikari, Unit Chief, GESU 5. Mr. Buddhi Prasad Upadhaya, Under Secretary 33. Mr. Prem Prakash Khatri, SDE 6. Mr. Murari Prasad Gautam Upadhya, International 34. Ms. Meera Joshi Environmental Specialist, Trade Development Adviser GESU 7. Mr. Himal Thapa, Trade Facilitation Adviser 35. Ms. Rama Shrestha, Social Specialist, GESU 8. Mr. Janardan Prasad Badal, Finance Manager 36. Mr. Manoj Aryal, Environment Inspector 9. Mr. Rikesh Chitrakar, Environmental Safeguard 37. Mr. Trilok Nath Ghimire, Engineer Specialist 10. Mr. Shankar Yadav, Procurement Consultant Department of Transport Management 38. Mr. Lawanya Kumar Dhakal, Director National Planning Commission General 11. Er. Sushil Bhatta, Member 39. Mr. Prem KumarSingh, Director, 40. Mr. Padma Bahadur Shahi, Technical Adviser Ministry of Finance (MoF) 41. Mr. Ram Chandra Poudel, Under Secretary 12. Mr. Shreekrishna Nepal, Joint Secretary, IECCD 42. Mr. Shailendra Chaudhari, Engineer 13. Mr. Harish Chandra Dhakal, Under Secretary 43. Ms. Sitan Shrestha, Engineer 14. Mr. Khim Bahadur Kunwar, Under Secretary 44. Ms. Nisha Thakur, Engineer Department of Customs (DoC) Department of Agriculture 15. Mr. Toyam Roya, DG 45. Mr. Dilli Ram Sharma, Program Director, 16. Ms. Manmaya Bhattarai Pangeni, Deputy Director Plant Quarantine and Pesticides Management General Center 17. Mohan Khajum Chongbang, Director, IT 46. Mr. Ram Krishna Subedi, Senior Plant 18. Mr. Basanta Das, Computer Officer Protection Officer, Plant Quarantine and Pesticides Management Center Trade & Export Promotion Center (TEPC) Japan International Cooperation Agency 19. Mr. Sarad Rana, Executive Director 47. Mr. Sourab Rana 20. Mr. Surendra Gongal, Director Nepal Intermodal Transport Development Board (NITDB) 21. Mr. Rabi Shanker Sainju, Executive Director 22. Mr. Chandra Kumar Subedi, Technical Advisor 23. Mr. Hare Krishna Mishra, Engineer 24. Mr. Pramod Acharya, Engineer 25. Mr. Humanath Khanal, Sr. Infrastructure Engineer 26. Mr. Ramesh Koirala, Account officer 27. Mr. Kamal Prasad Joshi, Engineer 28. Mr. Ram Chandra Paudel, Engineer 6 Annex 2 Agreed Action during current review Agreed Action Responsible Current Agreed Agency Timelines Overall Project Implementation and Management 1. i. Form High level committee and issue TOR to NITDB/ 10 February, 2019 address/ resolve grievances in Chobhar ICD MoICS 2. i. Identify suitable site and get clearance from DOR DoTM/ MoPIT 15 February 2019 to construct a small scale weigh bridge along N-M road 15 March 2019 ii. Prepare engineering design, cost estimate, and bid documents for weighbridge installation 28 February 2019 iii. Launch Road Accident Information Management System (RAIMS) for Kathmandu valley 31 March 2019 iv. Complete the study and report on VFTC establishment 15 February 2019 v. Prepare implementation plan for use of GPS tracking to monitor and control public vehicles 3. i. Design and execute the slope protection and DOR/ MoPIT end May 2019 stabilization measures at remaining seven active slips, 15 February 2019 ii. finalize the revised design for the Jalbire bridge right bank , 28 February 2019 iii. finalize the traffic management and safety plan for operation of 4 bridges under construction, 15 March 2019 iv. complete the remaining traffic safety measures for N-M road 4. i. Appoint the IT (National and International) TEPC/ MoICS 15 March 2019 experts to support review and quality assurance for development of Trade portal 5. i. Award contract for Nepal National Single window DOC/MoICS 24 February 2019 (NNSW), ii. start process to acquire services of Quality 15 February 2019 assurance and Advisory Services for implementation of NNSW, 15 February 2019 iii. reconstitute the National Single Window working group for monitoring and coordination Finance 1. Submit the pending audit report of FY 2017/18 (due DOR, PCU/ Asap since January 14, 2019) MoICS 7 Environmental and Social 1. Hire of an Environmental Health and Safety Specialist DOR 15 February 2019 and a Social Specialist to monitor the ESMP implementation of the NM Road and the NM Bridges 2. Wildlife watering holes – construct drain to divert DOR 28 February 2019 surface runoff away from the watering holes at Dhyangre Khola 3. Wildlife passes – implement enhancement and/or DOR 28 February 2019 corrective measures to optimize the use of wildlife passes including: (i) complementing the wire fence with live fence using plant species abundant in the area to avoid deer from crossing over the fence and straying into the NM road; (ii) clearing of earth piles at the Northern entrance of Aaptari 01 to ease animal movement; (iii) decreasing swampiness & water logging at the Ramnagar site; and, (iv) maintaining greenery/vegetation inside and outside underpasses to provide natural appearance 4. Work and agree with Division of Forest Office, DOR 28 February 2019 Barandhabar Community Forest User Groups, CBOs and Truck Associations to stop the throwing of trashes around wildlife pass at the Ramnagar area 5. Complete the slope protection and stabilization DOR 30 April 2019 measures at the seven active slips before the monsoon season 6. Improve road safety by (i) enforcing prohibition of DOR 28 February, 2019 using headphones while driving; (ii) painting bridge railings with retro reflecting paints to improve visibility at night; (iii) improving road signages to make them visible at night and to place them in right places and distances enough to warn the motorists. 7. Complete implementation of remaining DOR Before issue of EMP/measures, including site decommissioning, Completion cleanup & restoration works of all work areas, leveling off and compacting and/or disposal of spoils materials lying on the roadsides, closure of camps, etc. 8. Reinstatement of community infrastructures/structures DOR Before issue of Completion 9. Conduct walk over survey to assess and record in detail DOR Before issue of outstanding issues along NM Road and ensure that Completion pending issues and defects are rectified 10. Submit a full report detailing the process of consulting NITDB 15 February 2019 the aggrieved parties, addressing and resolving the grievances at the Chobhar ICD 11. Hire a full time Environmental Specialist, a full Social NITDB 28 February 2019 Development Specialist and a full time Social Mobilizer to supervise and monitor the implementation of ESMP at the Chobhar ICD and SPS Laboratory 12. ICB Contractor to get on board qualified Social Officer NITDB & ICB 15 February 2019 and an Environmental Health & Safety Officer Contractor 13. NCB Contractor to get on board a qualified NITDB & NCB 15 February 2019 Environmental Health & Safety Officer Contractor 8 14. Submit EMAPs and all 12 environment-related plans NITDB 15 February 2019 for ICB and NCB contracts to the Bank 15. improve working conditions, health & safety and PQPMC & 15 February 2019 housekeeping at the SPS Laboratory construction site Contractor 16. Amend the TORs for amending/retrofitting the ESIA, World Bank & 15 February 2019 RAP and VCDP for the KNM Road by identifying DOR gaps, additional studies and documentation and expertise to make the documents compliant with the Bank’s new ESF 17. Amend and extend the contract of the ESIA, RAP and DOR 20 February 2019 VCDP consultants according to the amended TORs 9 Annex: 3 Details on Progress of Project Components 1. Component A1: Technical Assistance (TA) to Modernize Bilateral and Regional Transit Regime: The program of analytical and technical assistance activities implemented under the Project has been used to support several new trade facilitation initiatives with India. One of the significant developments has been the opening up to Nepali traffic of the transit corridor from the port of Vishakhapatnam. Operations have been designed with the use of an electronic cargo tracking system (ECTS), though still on a pilot basis. With ECTS there are limited steps to clear and remove cargo from the port of Vishakhapatnam which is then shipped by rail to Raxaul/Birgunj. The shipping lines do not impose demurrage charges on containers on the corridor. There is therefore potential for significant savings for Nepal from not having to pay charges for delays in returning containers to the port. However, while the new route has some distinct advantages, there is need for detailed cost comparisons as Vishakhapatnam is further away from Birgunj than Kolkata and therefore has higher direct transport costs. The other development is the planned extension at five different points of Indian railway lines into Nepal. The extension will open up new railway routes for Nepal traffic. However, as the Railway Services Agreement mentions only one route (between Kolkata and Birgunj), there is still a need for it to be amended to in order to recognize the new routes. Program of analytical and technical assistance activities totaling US$800,000 is under implementation. As requested earlier by the government, the remaining US$3.7 million will be reallocated to components that are short of funds. 2. Component A2: Electronic Data Interchange between Nepal and India. During the 18th Customs Director General meeting in October 2017 the Governments of Nepal and India had agreed to work on Customs Transit Document (CTD) automation. However, the initiative had since been paused while the pilot on ECTS was being implemented. ECTS embeds similar functionality to CTD automation. The emerging ECTS pilot results suggest that it can be a viable and more efficient system for transit shipments across India, consistent with examples from other parts of the world where ECTS-type systems have been successfully used for similar purposes. Taking cognizance of the fact that the ECTS pilot is a bilateral initiative between India and Nepal, the team urged the government to draw up a plan for drafting of Standard Operating Procedure for the system, its scaling up and extension to the Kolkata corridor. The results framework indicator on the CTD, “Percentage of transit goods cleared through electronic CTD”, may have to be dropped when there is a light restructuring of the project. 3. Component A3: Support to the Road Transport Regulatory Authority. . This component has achieved significant progress in key activities and considered satisfactory. Key achievements include: (i) study on Road Transport Safety and Axle Load control completed and various nine guidelines developed to manage the transport safety and axle load control of public vehicles. These guidelines will be useful to the province level transport offices as well. (ii) The bus route and vehicle standard surveys for all major highways and feeder roads have been completed. The bus route survey information and guidelines now need to be disseminated to the provincial level transport offices. DoTM agreed to conduct necessary workshops and trainings to the provincial offices on the various nine guidelines including on the bus route licensing. (ii) DoTM has regularly conducted the axle load survey in specific main trade routes using the mobile axle load weighbridge units. The first analyses and report of this axle load survey report is prepared and disseminated; (iv) Road Accident Information Management System (RAIMS) software development and procurement of hardware/tablets has been completed. System installation, training, and deployment of tablets to 37 police offices in Kathmandu Valley has been also completed and the system has been under trial implementation since November 2018. Soon, the DoTM is planning to launch the system officially for Kathmandu Valley and proceeding forward to implement in the Kathmandu-Birgunj corridor traffic police offices. (v) The procurement of services from the old contractor for maintenance and operational service for Kathmandu Vehicle Fitness Testing Centre (VFTC) has been cancelled. DoTM agreed to restart the 10 procurement process for the operation and maintenance of existing facilities. However, it is noted that the DoTM is using the VFTC facility to conduct regular inspection of vehicles. (vi) Though the DoTM has proposed to construct a fixed axle load weighbridge station in leased land at Gajuri this was not feasible due to inadequate availability of land. Instead, a smaller weighbridge facility will be built along a completed section of Narayanghat-Mugling road. It is agreed that a proper facility shall be included in the design of the proposed project for improvement of Kathmandu-Naubise-Mugling road. (vi) The hiring process for an international consultant for the study on establishing VFTC facilities at the provincial levels is completed and the consultant is expected to join on 27 January, 2019. (vii) Regarding the LED TV screens that distributed to the various Transport Management Office and Traffic Police to display road safety education materials the DoTM was reminded to monitor and keep records. (viii) Considering the increase in speeding and corresponding increase in road accidents, the DoTM is now using Global Positioning System (GPS) technology to monitor and control public vehicles (routes and speed). DoTM has agreed to coordinate with the DOR and Traffic police offices to fix the limit of speed for each segment of major highway and implement the limitation. Considering already executed and planned activities under the Project, the Department of Transport Management (DoTM) will need additional budget of US$1-US$1.5 million to implement all planned activities. It has been agreed that the unused and unallocated funds for Component A can be allocated to DoTM for this purpose. Component B1 – Nepal National Single Window and Trade Information Portal (NNSW/NTIP). 4. Nepal Trade Information Portal (NTIP). Infinite Computer Solutions (India) and Info Developers (Nepal) have been engaged since October 6, 2017 to develop and implement a range of new features and enhancements to the core World Bank NTIP software toolkit. Several of the enhancements will require real time data exchange with the Department of Customs (DoC) and this is expected to be facilitated by an already signed Memorandum of Understanding between Trade Export Promotion Centre (TEPC) and DoC. The Consultant’s System Design document has been already approved and accordingly have further submitted User’s Acceptance Test and Operational Acceptance Test reports. The updated NTIP core system is already hosted in the Nepal Government cloud which is being tested. TEPC has initiated process for hiring two individuals, one National and one International IT expert to support their team to review and accept the system. Also, procurement for some additional hardware and solar backup will restart after necessary budget approval for this fiscal year. The Project Coordination Unit agreed to initiate necessary approval of budget and change in the annual program, if any. 5. National Single Window (NSW). There continues to be substantial delay in the implementation of this sub-component. The bids received on March 21, 2018 are still under evaluation process. After the last review in June 2018, the Government communicated interest in continuing with the implementation of the NSW, and also requested to extend the Project closing date for one year mainly for this component. The Bank has provided the fourth and final no objection for extension of the bid validity period up to February 24, 2019. Department of Customs team together with assistance from the Procurement Specialist in the PCU (MoICS) has completed the technical evaluation but still need to finalize the evaluation and award before February 24, 2019. The Government has committed to closely monitor the timelines for award of contract within the bid validity period to avoid the situation of possible cancellation of this component. 6. In case of award of NSW contract for implementation, the team highlighted the need to (i) seek services of the Project Monitoring and Quality Advisory (PMQA) services consultant; and (ii) reconstitute the National Single Window Working Group for monitoring and coordination. 7. Component B2 – Improvement of Trade-Related Laboratories. Construction of the new Sanitary and Phyto-Sanitary (SPS) Laboratory at Harihar Bhawan has started and about 15% physical progress has been achieved. Physically the foundation pile works and concrete raft works has been completed. As an effect of federalism and organizational changes, the team noted that now Plant Quarantine and Pesticide Management Office (PQPMO), responsible for the Sanitary and Phyto-Sanitary (SPS) laboratory management is responsible for this particular component. 11 8. The earlier agreed activity to develop web-based national pest surveillance database has been dropped. Instead, some specific lab equipment, study for the organization in the changed scenario of federalism, and some trainings have been agreed to be included. Under the same component, Department of Customs has procured a gas-liquid chromatography & mass spectrometry analyzer, and is in the process of procuring an X-ray radiography examination equipment to support the Customs Lab in Kathmandu. 9. Component B3 – PCO and NTTFC Strengthening. The PCO has been continuing to coordinate and support the multiple trade related agencies under the Project. Technical advisors, procurement specialist, and environmental specialist services has been continued to be engaged to support the MoICS, NTTFC, MoALD, DoTM, NITDB and other project implementation. It has been noted that the PCO is also supporting to conduct various studies in the trade related activities to support the discussions and decision process in the Ministry. 10. Component C1 – Narayanghat-Mugling (N-M) Road Improvement Works. The expansion and improvement works on the 33km of N-M Road has been achieved including the traffic safety measures. DoR also conducted a month long road safety awareness program in this section focusing on drivers, local road side residents, women’s group, and the school children. However, considering increasing traffic volume and vehicle speed in this road, the team recommends to conduct close monitoring and continue to check and implement the remaining traffic safety measures at earliest. 11. Completed specialized works for slope stabilization measures consisting of rock netting with iron nails, drainages, and bio engineering were found to be highly effective and showed no further failures at those locations. The road closures due to slope failures during last monsoon 2018 has significantly reduced from the year 2017. However, there are still few untreated slope failures are causing short road closures. Two major road subsidence at km 17 and 26 mainly due to failure of the old earth anchored structures (built in year 2004-2005) is causing available of single lane road and threats for road closure, if not attended before monsoon 2019. These road slopes need immediate geotechnical investigation and design of suitable measures. DOR has started selection process for the appointment of design consultant and agreed to complete adequate measures before monsoon 2019. 12. Two bridge works contracts namely, contract NCB 4 and NCB 5 progress is reported 52% and 28%, respectively. Jalbire bridge (NCB 5) works progress is very slow against 70% of time elapse. Regarding the technical issue in end span abutment at right bank and staging works at central span the DOR agreed to engage the Bridge Expert and finalize the details of construction method including traffic management and safety. It was also agreed by the DOR will finalize the use of these new bridges being built parallel to the existing bridges. The alignment, level differences and whether the two parallel bridges will be used for one-way traffic or not to be finalized based on the assessment of from Bridge expert and Traffic safety engineer, by end of February 2019. With regards to the remaining 14 bridges the Bank has already advised that these 14 bridges can be funded under the Bank-financed BIMP II Project. 13. Kathmandu-Naubise-Mugling (KNM) Road preparation. Feasibility, detailed design, and environmental and social safeguards studies have been completed. Though the consultant informed most of the comments and suggestions have been incorporated in the final report it is recommended that the design of bridges and others need to be vetted by DOR team for finalization of design and scope. An independent ESIA for the proposed two bypass and improvement of existing road is also prepared and reported to be submitted to the Ministry of Forest and Environment for necessary approval. 14. Government’s request for funding for existing road improvement and one bypass namely, Sisne khola – Dharke (12 km) received. Considering the project preparation point of view the following were considered as next actions: (i) Design review and finalization of scope of works in the improvement and new bypass, (ii) preparing the bid documents with due considerations of the traffic management, construction safety, operation and maintenance. As such, lessons learned from implementation of N-M road should be incorporated in the planning and implementation. (iii) retrofitting of ESIA report for these road 12 sections as per new Environmental Social Framework (ESF) requirement, and (iv) preparation of Project Procurement Strategy for Development (PPSD) as per the New Procurement Framework. 15. Component C2. Development of Inland Container/Clearance Depot in Kathmandu at Chobhar. Two works contracts for ICD infrastructure and office buildings were awarded in July 2018. Though mobilized, both contract works were hindered by the local community since August 2018. Following the cancellation of first foundation laying ceremony on 15th August, 2018 the Bank received a complaint letter form Chobhar Conservation Committee on 29th August, 2018. The complain mainly states that the Government needs to (i) fulfill the 5 points agreement between the Himal Cement and Environment Struggle Committee dated 31 August, 2000, (ii) resolve land issues of then Himal Cement Factory, which is now transferred to the NITDB through a Cabinet decision, and (iii) pay 414 workers from the Himal Cement Factory for their salary as per court order and decision of the Ministry of Commerce, Industry and Supply. In addition, they demand to withdraw the dry port project at Chobhar and suggest implementing previous agreement to develop this area as a tourist destination. 16. The Bank requested the Ministry to review the issues raised in the grievances and advise the Bank about its action plan to resolve it. Despite regular follow up, various consultation meetings with the NITDB and the Ministry, the Bank team has not received any action plan. In the meantime, the foundation stone laying ceremony by the Prime Minister was held on January 17, 2019 when about 55 agitating locals has been reported to be detained and released later by the police. The media report suggests the works has started in the presence of security personnel. The Bank team, during follow up meetings with the Ministry, highlighted that the grievances of locals need to be resolved as per applicable safeguard policies. On this the Ministry agreed (i) to form a high level committee and continue this throughout the project period; (ii) include in the TOR that the grievances to be dealt as per the safeguards requirements for the Project; (iii) to communicate their latest plan of action for addressing this grievance, including the formation and TOR of high level committee; and (iv) develop formal mechanism for fortnightly meetings between the Ministry and the Bank Team to jointly review the progress on this regard. 17. Component C3. Improvement of Bhairahawa and Birgunj ICDs: Bhairahawa ICD pavement works completed in April 2016. Birgunj ICD shed completed more than 95% . Physically, the shed and concrete flooring is complete with minor works remain are floor top finish, electrification, and fire hydrant. The team noted that the Consultant shall issue completion certificate when substantially complete. Liquidated damages is already applied due to substantial delay. The activity of shifting and improvement of existing railway tracks at Birgunj ICD shall be cancelled. 13 Annex 4 Environmental and Social Safeguards Findings The review notes the little or lack of progress in implementing the agreed actions from the last implementation support review (June 19-24, 2018) and the follow on dedicated review on EHS on October 2018 and the interim safeguards review on December 4-5, 2018. NM Road and Bridges: The previous review and follow on missions identified a number of environmental, social and health & safety issues that need to be addressed before the issuance of works completion certificates to the contractors. Despite the follow ups, there was very little progress to address the issues. There was no action taken to complete the remaining slope stabilization and protection works in some sections of the road (e.g., km 17 and km 26) in time for the next monsoon season. The cleanup and site restoration of all work areas, including the workers’ camps and spoils disposal a reas, have not been completed to date. In some sections of the road, spoils are still lying on the road sides, which need to be levelled off and compacted or hauled to the disposal areas. There was very little progress made to improve road safety such as improving road signages and making them more visible and driver-friendly, correcting faulty designs, fencing of some sections and improving some intersections. There was no progress made on improving wildlife watering holes, wildlife passes and installation of live fences to avoid wildlife from straying into the road and collide with vehicles. There was also little progress on the reinstatement of community structures (public toilets and passenger sheds) along the NM Road. A total of 20 public structures (6 toilets (large size-3; small size-3) and 14 passenger shelters) were either be rehabilitated or built along the NM road. The status of the remaining works are as follows: The Passenger Shed at 2+500 chainage - in progress- near to completion The Passenger Shed at 6+500- Passenger Shed- in progress- near to completion The Passenger Shed at 9+000- Passenger Shed- in progress- near to completion The Passenger Shed at 12+100- Passenger Shed- in Progress- near to completion Public toilet (Large size) proposed at 6+000- Ramnagar- is not started yet Public toilet (small size) proposed at 10+400- Jugedi- is not started yet Public toilet (Large size) proposed at 19+950- Seti Dobhan- is not stared yet Public toilet (Large size) proposed at 35+400-Mugling- - in Progress-near to completion Project informed that the contractor agreed to start the remaining works by 10 January 2019 and all works will be completed by 31 March 2019 before DLP (end of May 2019). Though project already relocated 44 out of 45 households identified living under threat of landslide along the NM road alignment providing them compensation and resettlement and rehabilitation assistance as per agreed RAP, one household (20+000- Seti Dobhan) is still remaining to be relocated due to absence (currently in abroad) of its owner. Since the project has done some landslide protection works at the site, the Review Team advice project to assess the risks associated with safety of the household and revise the RAP accordingly. Similarly, the team advice to accomplish the remaining livelihood enhancement trainings for vulnerable households among 45 households identified living under threat of landslide. Khani Khola, Dasdhunga, Jalbire and Mauri Bridges are being constructed along the NM road. Among them, RAPs were prepared for Mauri and Dasdhunga bridges and Due Diligence Reports (DDRs) were prepared for Khani Khola and Jalbire bridges during design and preparation of DPR. Currently Only Mauri Bridge has issues of relocation of houses and all the houses have been relocated paying compensation and providing R& R assistance as per RAP. The Dasdhunga Bridge site has been shifted to downstream (originally it was proposed in upstream) within road ROW (25 meters) where relocation of houses is not 14 required. However, about 150- 200 square foot lands along with compound wall and entry gate owned by Presidency Resort Private Limited will be affected by bridge approach road. It is suggested that project should establish communication and provide details of the project impacts with the land and asset owner and search for an amicable solution as per project ESMF. In Jalbire Bridge site, it was observed and also is reported by project team and contractor's representative that access to temple will be blocked and some existing structures like statue, basil plant etc. will be affected by the new bridge construction. The Review Team suggests to relocate the affected temple structures (statue, basil plant etc.) with due consultation and agreement with temple management committee and priest and provision of stair/ramp to provide universal access to the devotees. It is also suggested to have provision for access (universal) from east side of the temple to facilitate devotee to enter into the temple during festive season without disturbing traffic. The ESHS supervision of the works on 4 NM bridges remains outstanding even when the works have already advanced and bridge works are almost complete. There was no progress on preparation of Action Plan for utilization of lands (OPEN SPACE) available during NM road construction. It was observed that local people have started to occupy the vacant lands (open space) available as a result of relocation of settlements at risks of landslide and road widening and upgrading and tipping sites (land available due to piling of tipping materials). In Kali Khola site, the relocated houses due to landslide risks again occupied the open space at the same landslide risk zone. They have erected temporary tents to continue their business. The Review team suggested to prepare a plan and start implementation immediately to utilize the available open space. The project can utilize the open space in various ways-- as vehicles sickbay, road side plantation, materials storage for emergency use and so on. The project agreed to prepare and submit a plan by 31 January 2019. Chobhar ICD: The Environmental Certificate/Permit for the Chobhar ICD had been obtained from the Ministry of Forest and Environment on January 4, 2019 and the relocation of 18 remaining earthquake victim households that temporarily occupied the Chobhar ICD site had been either completed or in final stage except for 1 household that is still in the process of shifting from the site. Works at the Chobhar ICD was stoppage since August 2018 because of the complaints from the Chobhar Conservation Committee regarding obligations of Himal Cement that used the land currently used for the Chobhar ICD. The Committee halted the works until the three grievances are fulfilled by the Government/NITDB, including (i) fulfilling the 5 points agreed between the Himal cement and Environment struggle committee dated 31 st August 2000; (ii) settlement of land issues acquired for Himal cement, which is now transferred to the NITDB through Cabinet decision; and (iii) salary compensation of 414 workers from the Himal cement as per court’s order and decision of the Ministry of Commerce, Industry and Supply. There is little progress on the resolution of the complaints and inadequate documentation on the process of resolving the complaints. A preliminary initial assessment of Chobhar ICD construction contracts showed a substantial risk for Gender Based Violence (GBV). The Bank team conducted a detail discussion on the GBV risk and why retrofitting is required with the project team including the consultants and contractors on 4th December 2018. Retrofitting of contracts is required to include necessary mitigation measures to minimize the risks related GBV. Sanitary and Phytosanitary Laboratory. Construction of the laboratory is ongoing but there is a need to improve health and safety and working conditions at the construction site. The details of what needs to be done had been communicated to the NITDB, PQPMC, CSC and the contractor in December 2018 and during this review. ESHS staffing of DOR, NITDB and contractors for Chobhar ICD remains outstanding. In the previous mission, it was agreed that DOR will hire an EHS Specialist to monitor the implementation of the EMP for the 4 bridges. Likewise, it was also agreed that NITDB will hire a full Environmental Specialist, a Social Specialist and a Social Mobilizer to supervise and support the works at the Chobhar ICD and secondarily at the SPS laboratory. The ICB contractor also was supposed to hire a Social Officer and an Environmental 15 Health & Safety Officer while the NCB contractor will hire an Environmental Health & Safety Officer. All these staffing commitments have not been delivered to date. Meanwhile the EMAPs and related environmental and social plans have yet to be finalized and submitted to the Bank before the resumption of works at the Chobhar ICD. Safeguards preparation of the KNM Road: The revised ESIA, RAP and VCDP for the proposed KNM Road were submitted to and reviewed by the Bank and comments were discussed in detail with the DOR and consultants during the mission. As agreed, the documents need to be retrofitted and finalized following the new Environmental and Social Framework (ESF) of the Bank that replaces the existing Safeguard Policies effective October 1, 2018. The terms of reference and timelines to retrofit the documents to the new ESF have been agreed with DOR. 16 Annex 5: Updated Results Framework and Monitoring South Asia: Nepal-India Regional Trade and Transport Project Project Development Objective The proposed Project Development Objective is to decrease transport time and logistics costs for bilateral trade between Nepal and India and transit trade along the Kathmandu-Kolkata Corridor for the benefit of traders by reducing key infrastructure bottlenecks in Nepal and by supporting the adoption of modern approaches to border management. . Project Development Objective Indicators Square brackets show the target values and red are the current values. Cumulative Values [Targets] Actuals Remarks Responsibility for Unit of YR6- Methodology Data Indicator Name Core Baseline YR1 YR2 YR3 YR4 YR5 Frequency Measure End Target Collection Indicator based on Doing Time associated with Business data for meeting meeting regulatory document and regulatory [ Original: 14] requirements for import, No Days [2.75] 4.05 [4.8]4.8 [4.8]4.8 [4.1]4.5 [3.1]4.5 [2.4] Annual requirements for import. DB PCO/MoICS Revised: 4.84 export and transit methodology was changed in activities(days) 2016 so baseline was recalculated. Border Crossing time at Semi- Indicator will be updated after Raxaul-Birgunj border No Days [2.3] [2.3] [2.3] [2.3] [1.5]2.8 [1.5]1.16 [1.5] NITDB annual. survey in early 2018. post. Total time between cargo Indicators to be updated after Road: Road: Road: Road: Road: offloading at Kolkata to receipt of report for survey in Road: [10] [10] [10] [9.0] [9.0] [8.0]4.27 Road: [8.0] Semi- arrive in Birgunj by road No Days September 2018. Value for road NITDB Rail: [22] Rail: Rail: Rail: Rail: Rail: Rail: [17.6] annual and rail, and Birgunj to is from Kolkata to Birgunj and is [22] [22] [20] [20] [17.6]3.38 Kathmandu for trucks for the end of the year. 4 Baseline was revised to utilize data collected by Doing Business – which is a more sustainable approach to data collection. The target values were then revised accordingly, consistent with the Doing Business estimates for time to meet documentary requirements and to fulfill procedures at the border. 5 Data from Doing Business report 2019 6 Based on survey of 24 trucks at Birgunj conducted by PCO in December 2018/January 2019. Customs only time for registration of declaration to release of goods is 0.5 days based on data from DoC ASYCUDA World System (58,600 records). 7 New ICP started operating in April 2018. Initially waiting in a queue on the India side was 3.5 days but is now less than half a day. 8 Based on data from CONCOR for 26 rakes in December 2018. 17 Intermediate Results Indicators Cumulative Values [Targets] Actuals Responsibility Data Source/ for Unit of YR6 - End Indicator Name Core Baseline YR1 YR2 YR3 YR4 YR5 Frequency Methodology Data Collection Measure Target Component 1: Modernize transport and transit arrangements between Nepal and India Percentage of transit Nepal Customs and goods cleared through No % 0 0 0 [20]0 [40]0 [50]0 [100] Semi-annual DoC Indian Customs electronic CTD Component 2: Strengthen Trade-Related Institutional Capacity in Nepal Growth in Hit Rate for MoICSS No % 0 0 0 Base Year [20]30 [30]30 [40] Semi-annual Website statistics Trade Portal (through TEPC) Project Implementation Agencies Integrated into No Number 0 0 0 [2]0 [3]0 [4]0 [5] Semi-annual Progress and Supervision DoC Single Window reports Project Implementation Labs Developed or No Number 0 0 0 [1]0 [1]0 [1]0 [1] Semi-annual Progress and Bank Site MoICS Improved and Operational Supervision reports Component 3: Improve Trade-Related Infrastructure Supervision Consultant and Km of Road Improved Yes Km 0 0 0 [33]0 [33]109 [33]3310 [33] Semi-annual Bank Site Supervision DoR reports Supervision Consultant and ICDs/CFSs Built or No Number 0 0 [1] [2]111 [2]1 [3]2 [3] Semi-annual Bank Site Supervision NITDB Improved reports 9 Status as at December 21, 2017 10 Status as at January 7, 2019 – road was 100% complete except few additional slope works remain. 11 Works at Bhairahawa were completed in 2016 and shed at Birgunj is substantially completed and in use as of December 2019. 18 Annex 6. Updated Project Estimated Costs Nepal-India Regional Trade and Transport Project (NIRTTP) Project Estimated Costs: Original vs. June 2018 Review Re-estimation Revised Original Estimated Cost Component Estimated Cost Comment (US$) January Difference (US$) 2019 now due to exchange rate fluctuation 99,000,000 TOTAL PROJECT total amount available is $91.83M, (now: 91,872,000) 96,530,141 only 69,000,000 CREDIT credit amount deficit about $7 M, (now: 64,049,000) 71,090,141 Grant amount surplus $2.24M. 30,000,000 GRANT contract for National single window is (now: 27, 829,000) 25,590,000 yet to happen. Component A: Modernize transport and transit arrangements between 7,000,000 3,300,000 3,700,000 Nepal and India 1. Introducing a modern and Estimated costs are for effective transit regime including studies/activities agreed with the WB technical assistance in enhancing the during Feb 2017 MTR. New amount 4,500,000 800,000 3,700,000 capacity to negotiate trade and transit for this sub-component is US$0.8 treaties. million. 3. Providing capacity support to the road transport regulatory authority in Budget increased to US$2.5m to fund Nepal within the Department of additional road safety activities and 1,500,000 Transport Management to strengthen 2,500,000 (1,000,000) higher than estimated costs for axle and modernize the regulation of load station international trucking services. i. consulting services for study on axle load and road transport safety 280,000 (280,000) ii. Axle load plate 40,000 (40,000) iii. Bus route survey studies 100,000 (100,000) iv consulting services for RAIMS 35,000 (35,000) v. Computer/ servers/ tablets for RAIMS 300,000 (300,000) vi. Various trainings / awareness programs 100,000 (100,000) vii. Axle load control station within (795,000) Narayanghat Mugling road section 795,000 viii. Technical advisors 150,000 (150,000) ix. VFTC study and improvement works 100,000 (100,000) x. study and pilot implementation on GPS 600,000 (600,000) This Unallocated amount may be Unallocated 1,000,000 - 1,000,000 reallocated to DOTM Component B: Strengthen Trade- Related Institutional Capacity in 710,000 23,000,000 22,290,000 Nepal 1. Trade Portal and Single Window System Development 17,350,000 16,640,000 710,000 a. Nepal Trade Information Portal 1,250,000 540,000 710,000 i. development consultant for the trade portal enhancement 350,000 ii. Furniture 10,000 iii computer 80,000 19 iv. Other services /training 100,000 b. Nepal Single Window System 14,400,000 - This sub-component remains the same 14,400,000 i. consulting service for Quality advisory and management consultant 2,227,500 ii. Development and implementation 12,000,000 iii individual consultants for support 172,500 Proposed to shift US$450k from DoC sub-component B1c to B3 for PCO to c. ICT Capability Enhancement for finance capacity development 1,700,000 - Nepal Department of Customs 1,700,000 (including US$300k of training for DoC) and inter-agency coordination activities. 2. Improvement of Trade-related - This sub-component remains the same Laboratories 3,000,000 3,000,000 i. cost for the design and supervision consultants 50,000 (50,000) ii. cost for the building for regional laboratory 1,610,000 (1,610,000) iii. lab equipment for the DOC lab 210,000 (210,000) iv. other studies 40,000 (40,000) v. lab equipment for the regional lab 500,000 (500,000) vi.trainings and other services 590,000 (590,000) 3. Institutional strengthening for Proposed to shift US$450k from DoC Interagency Coordination including sub-component B1c to B3 for PCO to 2,650,000 - financing of Project Coordination 2,650,000 finance capacity development and Office (PCO) inter-agency coordination activities. Component C: Improve Select Trade-Related Infrastructure 69,000,000 71,090,141 (2,090,141) 1. Expand and upgrade the Narayanghat-Mugling road section, US$ 727,700 is kept in Contingencies conduct studies and implement road 48,000,000 - due to possible need of additional 48,000,000 safety measures for improvement of slope works entire Birgunj-Kathmandu Corridor a. Works for Narayanghat-Mugling Road 37,368,000 36,100,000 1,268,000 Higher amount for Supervision Consultant due to expanded scope included feasibility and design studies b. Supervision Consultant 1,000,000 3,730,000 (2,730,000) for KNM road and road safety which was budgeted under Future Project Preparation sub-component (g) Higher amount due to increased c. Social and Environmental Expert 32,000 complexity and scope for 190,000 (158,000) environmental and social safeguards d. Supervision Vehicles (3 pickups) 200,000 162,300 37,700 The works budgeted here were e. Refurbishment of regional office 100,000 incorporated into one of the N-M building at Narayanghat - 100,000 roads contracts The budget of 100,000 has been f. Training 100,000 incorporated into subcomponent B3 - 100,000 which is grant g. Future Project Preparation and Implementation including road safety audit and selected road safety works 7,000,000 7,817,700 (817,700) along Birgunj-Kathmandu Corridor i. Studies (SESA, ESIA for KNM) 660,000 (660,000) ii. Geotechnical expert for NM 20,000 (20,000) 20 iii. Bridge supervision for 4 brdiges 100,000 (100,000) iv. Works for 4 bridges along Narayanghat-Mugling Road 3,660,000 (3,660,000) v. Consulting services for slope stabilization works 160,000 (160,000) vi. Slope stabilization works contract D1 and D2 completed 1,500,000 (1,500,000) vii. Slope stabilization works contract D3 after monsoon 2018 1,717,700 (1,717,700) - To be used for the additional slope h. Contingency 2,200,000 0 (2,000,000) stabilization works 2. Build a CFS or ICD in Need reallocation of US$4.4 million 15,500,000 Kathmandu 19,837,841 (4,337,841) for Kathmandu ICD a. Kathmandu ICD Design 200,000 Consultant 138,341 61,659 b. Kathmandu ICD Supervision Consultant 379,500 (379,500) c. ICB Works Contract for Construction of Kathmandu ICD 16,675,000 (1,375,000) 15,300,000 d. NCB Works Contract for Construction of Kathmandu ICD 2,645,000 (2,645,000) 3. Improve the infrastructure at This savings to be reallocated to 5,500,000 Birgunj and Bhairahawa ICDs 3,252,300 2,247,700 Kathmandu ICD/CFS development a. Extension of Storage Shed at 1,600,000 Birgunj ICD 1,695,000 (95,000) b. Railway Tracks Modification at 1,100,000 activity to be cancelled Birgunj ICD - 1,100,000 c. Pavement works at Bhairahawa 1,600,000 ICD 1,020,000 580,000 d. Design/Supervision Consultant 200,000 for Bhairahawa and Birgunj Shed 237,300 (37,300) e. Railway Tracks 200,000 activity will be cancelled Design/Supervision Engineer - 200,000 f. Monitoring System for NITDB 300,000 - 300,000 To be allocated to Kathmandu g. Contingency 500,000 - 500,000 ICD/CFS 21