social monitoring report (external)

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Social Monitoring Report (External) November 2020 Loan Number 3419/3420 2 nd Safeguards Compliance Monitoring Report (Period Covering: July 2019 to August 2020) MFF-2-PAK: Second Power Transmission Enhancement Investment Program - Tranche 1 Prepared by External Monitoring Consultant of National Transmission and Despatch Company (NTDC) for the Asian Development Bank. This document is made publicly available in accordance with ADB’s Access to Information Policy and as agreed between ADB and the borrower.

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Social Monitoring Report (External)

November 2020

Loan Number 3419/3420

2nd Safeguards Compliance Monitoring Report (Period Covering: July

2019 to August 2020)

MFF-2-PAK: Second Power Transmission Enhancement Investment Program - Tranche 1

Prepared by External Monitoring Consultant of National Transmission and Despatch Company

(NTDC) for the Asian Development Bank. This document is made publicly available in

accordance with ADB’s Access to Information Policy and as agreed between ADB and the borrower.

NOTES

(i) The fiscal year (FY) of the Government of the Islamic Republic of Pakistan and its

agencies ends on 30 June.

(ii) In this report “$” refer to US dollars.

This social monitoring report is a document of the borrower. The views expressed herein do not

necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature.

In preparing any country program or strategy, financing any project, or by making any designation

of or reference to a particular territory or geographic area in this document, the Asian

Development Bank does not intend to make any judgments as to the legal or other status of any

territory or area.

NATIONAL TRANSMISSION AND DESPATCH COMPANY NTDC PAKISTAN

Second Power Transmission Enhancement Investment Program (PTEIP 2) Funded by Asian Development Bank (ADB) through Multi-

tranche Financing Facility 2 (MFF 2)

2ndSafeguards Compliance Monitoring Report, July 2019-August 2020

Subprojects of Tranche 1, Loan Number Loan Number 3419/3420

Revised Report Submitted to ADB on 10 September 2020

Prepared By: Abdul Hameed, External Monitoring Consultant (EMC) for National Transmission and Dispatch Company (NTDC), Environment & Social Impact Cell

(ESIC), WAPDA House, Lahore.

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Contents

1 Introduction .................................................................................................................1

Project Background .....................................................................................................1

2 External Social Monitoring - Monitoring Indicators and Methodology ...........................3

3 Status of Implementation of LARPs .............................................................................7

500kV Guddu-Muzaffargarh TL project ..................................................................... 11

Employment Opportunities ........................................................................................ 13

4 Implementation Analysis ........................................................................................... 14

5 Conclusion and Recommendations ........................................................................... 24

Annexure –I:NTDC Policy and Procedures regarding Grievance redress mechanism ..................................................................................................... 26

Annexure – II: Letter to ADB from MD NTDCEnsuring Safeguards Compliance ... 33

Annexure – III: NTDC letter for stoppage work at ADB 105 ................................... 34

Annex-IV: Status of Compensation Payment ........................................................ 35

Annex-V: NTDC Replies on the comments on updated LARP of ADB-105 ........... 40

Tables with page numbers

Table 1.1: Tranche 1 List of Subprojects and Contract Packages ………………………9

Table 2.1: Set of Indicators Used for Verification of NTDC’s Monitoring Information……1111

Table 3.1: Overall Status of Implementation of LARPs…………………………………….15 Table 3.2: Status of Employment at the Project…………………………………………….211

Table 4.1: Detail of status of complaints logged in the Project Area……………………25

Table 4.2: Responses of the Contacted DPs………………………………………………26

Figures

Figure 1.1: Route MAP of 500kV Faisalabad West TL Sub-project……………………………10 Figure 1.2: Route Map of 500KV Guddu – Muzaffargarh TL Subproject……………………...10

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Abbreviation Description

ADB Asian Development Bank

DP Displaced Person

EMC External Monitoring Consultant

ESIC Environment and Social Impact Cell

FMC Facility Management Consultant

GRC Grievance Redress Committee

GRM Grievance Redress Mechanism

LAA Land Acquisition Act 1894

LAR Land Acquisition and Resettlement

LARF Land Acquisition and Resettlement Framework

LARP Land Acquisition and Resettlement Plan

MFF Multi-Tranche Financing Facility

NTDC National Transmission and Despatch Company

PKR PAK Rupees

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PMU Project Management Unit

PTEIP Power Transmission Enhancement Investment Program

ROW Right of Way

SPS Safeguard Policy Statement 2009

SMR Safeguards Monitoring Report

TL Transmission Line

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Glossary Affected Household: All members of a project affected household residing together and operating as a single economic unit, who are adversely affected by the Project or any of its components; may consist of a single nuclear family or an extended family group.

Compensation: Money or payment in kind to which the affected masses are entitled in order to replace the lost asset, resource or income.

Cut-off-Date: The completion date of the census of project-displaced persons is usually considered the cut-off date. A cut-off date is normally established by the borrower government procedure that establishes the eligibility for receiving compensation and resettlement assistance by the project displaced persons. In the absence of such procedures, the borrower/client will establish a cut-off date for eligibility. Displaced Persons: In the context of involuntary resettlement, displaced persons are those who are physically displaced (relocation, loss of residential land, or loss of shelter) and/or economically displaced (loss of land, assets, access to assets, income sources, or means of livelihoods) as a result of (i) involuntary acquisition of land, or (ii) involuntary restrictions on land use or on access to legally designated parks and protected areas. Entitlement: Range of measures comprising compensation, income restoration, transfer assistance, income substitution, and relocation which are due to displaced persons (DPs), depending on the nature of their losses, to restore their economic and social base. Meaningful Consultations: is a process that (i) begins early in the project preparation stage and is carried out on an ongoing basis throughout the project cycle; (ii) provides timely disclosure of relevant and adequate information that is understandable and readily accessible to affected people; (iii) is undertaken in an atmosphere free of intimidation or coercion: (iv) gender inclusive and responsive, and tailored to the needs of disadvantaged and vulnerable groups; and (v) enables the incorporation of all relevant views of affected people and other stakeholders into decision making, such as project design, mitigation measures, the sharing of development benefits and opportunities, and implementation issues. Replacement Cost: The rate of compensation for acquired housing, land and other assets will be calculated at full replacement costs. The calculation of full replacement cost will be based on the following elements: (i) fair market value; (ii) transaction costs; (iii) interest accrued, (iv) transitional and restoration costs; and (v) other applicable payments, if any. In applying this method of valuation, depreciation of structures and assets should not be considered. Land Acquisition and Resettlement plan: A resettlement plan elaborates displaced persons’ entitlements, the income and livelihood restoration strategy, institutional arrangements, monitoring and reporting framework, budget, and time-bound implementation schedule. Vulnerable groups: Distinct group of people who may suffer disproportionately from resettlement effects. The policy defines vulnerable groups as households below the poverty line, the elderly, those without legal title to assets, landless, women, children and indigenous people.

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EXECUTIVE SUMMARY

1. About the Report: This 2nd social monitoring report (external) has been completely restructured to address ADB’s comments concerning implementation of LARPs of tranche 1 and safeguards noncompliance which resulted out due to deviation from the agreed safeguard requirements and procedures of tranche loan. 2. The report has been restructured into 4 Chapters. Chapter one encompasses transmission enhancement program 2 and presents the tranche 1 subprojects with contract packages and TL sections or lots for clear understanding of the scope of tranche 1 projects. Chapter two presents the monitoring methodology and monitoring indicators that have bene studied and investigated by EMC for reaching to the conclusion whether NTDC has complied with safeguards of loan and safeguards noncompliance has been addressed in tranche 1. Chapter three presents an overall status of implementation of LARPs with detailed evidence of implementation and payments to DPs. Chapter 4 presents a deep analysis of implementation of LARPs and steps and actions NTDC is taking to address further noncompliance in subsequent tranches of the MFF while last chapter which is Chapter 5 provides conclusions and recommendations indicating how noncompliance is addressed in tranche 1 and how noncompliance could be prevented or avoided in subsequent tranches with help of recommendations made therein.

3. Introduction of Investment Program: The National Transmission and Dispatch Company (NTDC) is presently implementing the 2nd Power Transmission Enhancement Investment Program (PTEIP 2) with funding from Asian Development Bank (ADB) through the 2nd Multi-tranche Financing Facility (MFF 2). The objective of the program is to improve Pakistan’s power transmission infrastructure and its management through new transmission lines and grid stations. Tranche 1 of MFF comprises of 5 subprojects, two of which involve installation of new transmission lines (TL) while remaining three involve only augmentation and rehabilitation of existing grid stations (GS). The two TL projects further involved construction of 354 towers and installation of 294 km long new TL which resulted in temporary impacts to cropped area removal of trees coming under towers and transmission lines. Table 1.1 in section 1 of this report provides a list of subprojects but details about impacts (estimated and actual as per draft and updated LARPs) is provided in Section 3, Table 3.1 below. 4. Summary of temporary LAR impacts (estimated and actual) and entitlements as per LARF and LARPs: According to draft LARPs of two new TL projects, a total of 374 DPs (including 3 vulnerable) was needed to be compensated due to temporary impact on 2,059 acres of cropped area and removal of 832 wood trees. However, after completing the TL route survey and commencement of construction work the crop impacted area and number of trees increased slightly to 2,185.5 acres of cropped area and removal of 866 trees but the number of DPs increased very significantly from 350 to 1769 (including 5 vulnerable DPs). The reasons for this substantial increase in DPs number is due to the additional crop area and additional DPs of stringing stage of transmission lines who were not identified during the preparation of draft LARPs. 5. While final impacts of the two TL projects remained limited to temporary impacts of crops and removal of trees under towers and transmission lines, the land acquisition and resettlement framework (LARF) of MFF and loan agreement schedule 5 and covenants related to social safeguards required (i) updating of draft LARPs based on the final survey of TL routes (ii) disbursement of compensation and all other entitlements to all DPs before start of each of the three phases of TL work i.e. construction of towers foundation; erection of towers and stringing

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of wires, and (iii) issuance of external social monitoring report validating payment of compensation and entitlements to DPs by the external monitoring consultant. All of this was required to be fulfilled before commencement of construction work in full or sectional right-of-way (ROW). 6. Status of compensation disbursement: The NTDC’s external monitoring consultant reviewed the NTDC’s internal monitoring systems ad reports of LARPs, held meetings with NTDC officials, consultants and contractors, met with DPs in the field and crosschecked NTDC’s record of compensation disbursement to DPs and confirmed that all 1769 DPs of both TL projects have been fully paid an amount of Rs. 73.74 million as payment of compensation and vulnerability allowance for the actual/final temporary impacts of both TL projects that are limited to only to 2,185.5 acres of cropped area and removal of 866 wood trees. The construction work in one of the two TL projects (i.e. Guddu-Muzaffargarh TL project) has been completed while in the second TL project (i.e. Faisalabad West-Gatti TL project) the construction work has remained suspended since February 28, 2020 due to safeguards noncompliance discussed in the subsection 4.1-O (i) in the main text of the report below.

7. Status of compliance with safeguard requirements: As mentioned in para 3 of this executive summary that the loan agreement and social covenants, LARF and draft LARPs and award of the construction contract, all required draft LARPs updated and approved by ADB, payment of compensation paid to all DPs before the start of phased construction work, and payment of compensation validated by EMC before the start of construction work but this could not be achieved prior to construction work and EMC discovered continual noncompliance of covenanted safeguard requirements in both TL projects. The EMC further probed NTDC officials, consultants, and contractors for their deviation from the safeguard requirements and analyzed the NTDC’s institutional setup and capacity in safeguards management and found the following key reasons as fundamental reasons for noncompliance in tranche 1.

8. Reasons for Safeguards Noncompliance: Key reasons that led to safeguards noncompliance in tranche 1 can be easily attributed to a combination of issues across NTDC’s institutional arrangements, safeguards capacity, monitoring and supervision procedural flaws or gaps that are required to ensure safeguards compliance, particularly updating of LARP, payment of compensation prior to construction work and ADB’s no objection to initiation of construction work based on EMC’s validated confirmation of payment to DPs. Within these limitations or deficiencies following are the basic reasons contributing noncompliance: (i) contractor’s lack of understanding of the safeguard requirements as part of construction contract (ii) lack of inter and intra-agency coordination and clarity about roles and responsibilities specific to safeguards requirement and compliance, lack of outreach and field supervision by NTDC’s Environment & Social Impacts Cell (ESIC), Directorate of Land and Facility Management Consultants (FMC) and weak safeguards capacity (technical and nontechnical-inadequate resources) and lack of safeguards training, and more specifically (iii) absence of procedures required to ensuring compliance with LARP preparation, updating and approval, ensuring ROW compensation prior to construction, safeguard requirements and timelines in bidding and contract award, procedures for assessment/determination of compensation at replacement costs and delivery of compensation well before construction commencement, procedures for obtaining ADB’s no-objection to initiation of construction work (full and section handover of ROW) together with EMC’s validation report on compensation disbursement and the LARP and monitoring requirements for sectional handover of ROW. 9. Actions needed to prevent noncompliance in subsequent tranches: While all 1769 DPs of both TL projects have been fully compensated for final/actual impacts and in accordance

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with the entitlement matrix of LARF and LARPs, the safeguards non-compliance has been fixed in tranche 1. However, NTDC is still in the process of devising SOPs on LARP preparation, updating and approval, and payment of compensation at replacement costs before the start of construction and its validation by EMC. Further to this end and to prevent safeguards noncompliance, NTDC has already revitalized the Directorate of Land and initiated monthly coordination and field monitoring activities with FMC, PIUs and contractors staff to ensure that no work commences anywhere in ROW of subprojects under tranche 2 and 3 unless LARPs are updated and approved by ADB and payment of compensation and entitlements are fully achieved in full or partial ROW before it can be handed over for construction. Safeguards training program and FMC staff has also been deployed to all projects under tranche 2 and 3 but the delivery of the training program is on hold due to the COVID-19 pandemic. NTDC assured completion of SOPs within this year and make the procedures part of the updated LARF. However, EMC recommends that safeguards training to contractors must be delivered and SOPs and LARF finalized and endorsed and all LARPs accordingly updated and implemented before starting construction work anywhere in tranche 2 and 3 subprojects to prevent further non-compliance.

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1 Introduction

10. The ADB Safeguard Policy Statement 2009 (SPS) and loan agreement of tranche 1 and LARF require that NTDC projects involving significant LAR impacts be monitored internally by NTDC and externally by an independent external monitoring consultant (EMC) on a semiannual basis. NTDC provides the internal monitoring reports of the implementation of resettlement plans which are reviewed and validated by EMC based on the monitoring and evaluation indicators provided in the LARF and LARPs and the scope of monitoring further specified in the terms of reference of EMC issued by NTDC. Thus, in accordance with monitoring indicators of external monitoring of LARPs, the purpose of this 2nd safeguards compliance monitoring report (1 July 2019-31 August 2020) is to (i) verify NTDC’s monitoring reports to assess whether compensation and other entitlements have been delivered to DPs in accordance with entitlement matrix of LARF and subproject-specific LARPs prior to construction and whether payment of compensation to DPs is timely and adequate and whether resettlement objectives have been achieved and livelihoods and living standards of DPs have been restored or enhanced, including those of the non-titled displaced persons, (ii)assess compliance with safeguard requirements of loan and covenants related to land acquisition and resettlement impacts, (iii) any deviation, gaps or noncompliance with agreed safeguard requirements and (iv) recommend steps and actions to address noncompliance and through corrective action plans and additional mitigation measures including any additional procedures required to ensure compliance.

Project Background 11. The MFF 2, PTEIP 2is currently under implementation with financing from ADB. The objective of the Program is to improve Pakistan’s power transmission infrastructure and its management. The National Transmission and Dispatch Company (NTDC) is the implementing agency which will implement the entire program through various tranches of MFF 2. Each tranche constitutes a project, which, in turn, is divided into several sub-projects involving the construction/up gradation of power grid stations (or sub-stations) and installation of new power transmission lines.

12. The Tranche 1Loan 3419/3420 was signed in November 2016. It became effective in February 2017and will complete in December 2020. The loan comprises five subprojects (see table below) two of which involve construction of two new transmission lines in Punjab and Sindh provinces while remaining three subprojects entail extension and augmentation of existing substations in Punjab. The two new TL projects involve temporary impacts to crops and cutting down of trees while extension of existing grid station is completely free of any kind of LARP impacts. The support component of loan 3420 financed a Facility Management Consultant (FMC) to strengthen the safeguards management capacity of NTDC. The table 1.1 below presents five subprojects and contract packages while figures 1.1 and 1.2provide route map of the two new transmission lines:

Table 1.1: Tranche 1 List of Subprojects and Contract Packages

Serial No.

Subprojects and their scope

A. Extension and Augmentation of Existing Grid Stations/Substations not involving any LAR impacts

1

Subproject 1: Extension of 600 MVA, 500/220kV Auto Transformer at 500kV Sahiwal Substation. Contract package ADB 100: Procurement of plant, design, supply, installation, testing & commissioning of 500/220kV auto transformer bay at 500kV Sahiwal substation. Contract was signed in December 2018 and will be completed in February 2020.

2 Subproject 2: Extension of 1x250 MVA, 220/132kV Auto Transformer at 500kV Rawat Substation (Original Scope). Revised: Procurement of 4 Nos. 220/132kV, 250 MVA Auto transformers.

2

Contract package ADB 101A: Procurement of 4 Nos. 220/132kV, 250 MVA Auto transformers. BER submitted to ADB on 24th July 2019. Comments of GM (P&CM) are still awaited. Contract is yet to be awarded.

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Subproject 3: Rehabilitation of protection equipment at 11 Substations of South area along with installation of 22 MVAR shunt reactor at 500kV Dadu (South Area). Two contract packages as below: Contract package ADB 102: Procurement of plant, design, supply, installation, testing & commissioning of 22 MVAR shunt reactor at 500kV substation Daddu. Contract package ADB 103: Procurement of plant, design, supply, installation, testing & commissioning of protection relays, fault recorders, fault locators & event recorders at 11 substations in south area. Contract was signed in August 2018 and completion is in March 2020.

B. New Transmission Lines in Punjab and Sindh Provinces

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Subproject 4: New 500kVFaisalabad West Transmission Line (Phase-II) i) 500kV D/C T/L in/out of 500kV Multan – Gatti at 500kV Faisalabad West (36km) ii) 220kV D/C T/L Faisalabad West – Lalian (80km).

Contract package ADB 105:Procurement of plant, design, supply, installation, testing & commissioning of 500 kV Q/B Transmission Line for Looping In & Out of existing 500 kV Multan – Gatti SC Transmission Line at 500 kV Faisalabad West Substation (Approx. 40km).Contract was signed in September 2018 and completion is in January 2020 (equipment shifting ongoing).Contract package 105R not signed.

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Subproject 5: New 500kV Guddu – Muzaffargarh T/Line 118.7 km for dispersal of Power from 747 MW Power Plant at Guddu. Has two contract packages and multiple lots as below: Contract packages 106, lot I: Civil works, erection, testing & commissioning of 500kV T/L Guddu-Muzaffargarh (74KM) Location No.1 – 199.Contract signed in Jan 2017 and completed in Dec 2018. Contract package 108, lot I: Civil works, erection, testing & commissioning of 500KV T/L Guddu – Muzaffargarh Location No. 597 to 664 (22.7km). Contract signed in Dec 2017, completion Dec 2018. Contract package 108 lot II:Civil works, erection, testing & commissioning of 500KV S/C T/L(i) 500kV S/C T/L Guddu – Muzaffargarhfrom Location No. 664 to 725 (22km), (ii) 500 kVD/C T/L In-Outof DG Khan, Multan T/L (7.6+7.6 km) and Interfacingof 500 kV circuit at Muzaffargarh.Contract signed in Dec 2017 and completion in Oct 2018.

Figure 1.1: Route MAP of 500kV Faisalabad West TL Sub-project.

Figure 1.2: Route Map of 500KV Guddu – Muzaffargarh Subproject

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2 External Social Monitoring - Monitoring Indicators and Methodology

13. In order to maintain independence, objectiveness, fairness and neutrality during the monitoring process, the EMC adopted a pragmatic methodology in undertaking field monitoring of LARPs and holding discussions with NTDC officials, consultants, contractors and DPs. First and the foremost field monitoring was carried out to ascertain whether key compliance requirement of all DPs fully compensated prior to commencement of civil work was achieved in accordance with safeguard requirements set forth in the loan agreement, the MFF’s LARF and subproject specific LARPs; verify NTDC’s monitoring information to assess whether objectives of LARPs have been achieved, and identify safeguard compliance issues during implementation and recommend appropriate corrective actions to NTDC to implement to correct any gaps in implementation and avoid further safeguards noncompliance. Further to achieve this, EMC used the following monitoring indicators of LARF and tranche 1 LARPs during the field monitoring and verification work:

a. Payment of compensation, adequacy on budget and timeliness of payment.

b. Adequacy of institutional arrangements.

c. Inventory of lost asset and record keeping.

d. Consultation and information dissemination.

e. Delivery of entitlement, relevance and adequacy.

f. Preparation and adequacy of relocation arrangement.

g. Provision of employment for DPs, its adequacy and income levels.

h. Grievance redresses mechanism. Effectiveness of GRM in receiving

documenting and resolving grievances.

i. Gender impact.

j. Identification and rehabilitation of vulnerable groups.

k. Provision of transition allowances.

l. Quality, effectiveness, efficiency, and sustainability of the resettlement efforts.

m. Major problems being faced and limitations of implementing the LARP,

emerging LAR issues during project implementation, and corrective measures

needed to implement resettlement effectively.

14. In addition to the above monitoring indicators of LARF and LARPs, the EMC also used the following set of indicators for verification of the monitoring information provided by NTDC in the internal monitoring reports and related documents:

Table 2.1: Set of Indicators Used for Verification of NTDC’s Monitoring Information

Monitoring Indicator Basis for Indicator

Basic information on displaced persons’ households (gender disaggregated).

Location of the project. Composition and structure, ages, educational, and skill levels. Gender of household head. Ethnic group. Access to health, education, utilities, and other social services. Housing type. Land and other resource-owning and resource-using patterns. Occupations and employment patterns. Income sources and levels. Agricultural production data (for rural households). Participation in neighborhood or community groups. Access to cultural sites and events.

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Valuation of all assets.

Restoration of living standards.

Were house compensation payments made free of depreciation, fees, or transfer costs to the displaced persons? Have displaced persons adopted the housing options developed? Have perceptions of community been restored? Have displaced persons achieved replacement of key social and cultural elements?

Restoration of livelihoods.

Were compensation payments free of deductions for depreciation, fees, or transfer costs to the displaced persons? Were compensation payments sufficient to replace lost assets? Was sufficient replacement land available of suitable standard? Did income substitution allow for reestablishment of enterprises and production? Have affected enterprises received sufficient assistance to reestablish themselves? Have vulnerable groups been provided income-earning opportunities? Are these opportunities effective and sustainable? Do jobs provided restore pre-project income levels and living standards?

Levels of displaced persons’ satisfaction

How much do the displaced persons know about resettlement procedures and entitlements? Do the displaced persons know their entitlements? Do they know whether these have been met? How do the displaced persons assess the extent to which their own living standards and livelihoods have been restored? How much do the displaced persons know about grievance procedures and conflict resolution procedures?

Effectiveness of resettlement planning

Effectiveness of resettlement planning. Were the displaced persons and their assets correctly enumerated? Was the time frame and budget sufficient to meet objectives, were there institutional constraints? Were entitlements too generous? Were vulnerable groups identified and assisted? How did resettlement implementers deal with unforeseen problems?

15. Keeping in view these monitoring indicators and the objectives of external monitoring, the EMC adopted the following monitoring methodology for this external monitoring report;

a. Desk Review and Analysis of Project Documents: Three due diligence reports (DDRs) prepared for extension and augmentation of existing grid stations/substations (see part A of table 1.1 and 1.2 above), both the SMR- internal covering the period from July – December, 2019 and January - June, 2020, special external monitoring report prepared in April, 2020 for the village of Chak, 90 to assess the compensation payment of 15 DPs of stringing phase of ADB-105 and compensation payment data provided by NTDC/FMC, contract packages and contract awards of Tranche 1, two draft land acquisition and resettlement plans (LARPs) prepared by NTDC in 2016 for two new transmission line sub-projects and Corrective Action Plans (CAPs) prepared by NTDC in 2018 for ADB 106 and ADB 108, updated LARP for ABD-105, project maps and list of vulnerable DPs. The review was made to know what was actually done in the field as compared to what was reflected in the approved documents and reasoning of affecting the schedule and non-compliance and what measures NTDC followed for the way forward for subsequent tranches.

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b. Consultation Meetings: The consultation meetings were held with the DPs in all three contracts, ADB 105, ADB 106 and ADB 108. The meetings were followed the discussions with Contractor/Sub contractor, NTDC staffs, ESIC and FMC to know about the status of LARP implementation and in case of non-compliance what preventive measures were adopted to keep the LARP implementation on track.

c. Sample Survey: Using the stratified random sampling technique, EMC randomly interviewed about 9% of DPs keeping in view the COVID-19 SOPs and restrictions-imposed on field movement and physical interaction. The random sample survey covered all three contract packages of two TL projects ADB 105, ADB 106 and ADB 108 with the aim to determine whether phased implementation of LARPs complied with the requirement of upfront compensation payments to DPs before start of construction work. The random sample survey also helped to know about the adequacy and status of compensation payment, and effectiveness of the grievance redress system and level of APs participation (through consultation meetings) in resettlement implementation. Additionally, it was also assessed the number and nature of the impediments impeded in smooth functioning of project activities. A total of 182 people was contacted during the field visits. Among the total, 151 were the DPs (Annex-IV), 6 were from the general public, 4 were the local people who got the jobs from the project, 7 were from the contractor side, 1 was from the project management consultant (NESPAK), 3 were from the FMC and 10 were the NTDC’s staff. All the contacted DPs (151) have received their complete compensation payment.

d. Field Visits: The EMC visited the subprojects and sites1, first, on 17 – 20 January 2020, while follow up visit to ADB 105 was conducted on 28 February 2020 to recheck and reconfirm suspension of construction work on-the-site, whereas visit to ADB 106 was conducted on 1st March 2020 to validate the completion of payments to DPs. In additional due to COVID-19 pandemic related lock down situation in the country, the EMC contacted 40DPs telephonically by keeping the social distance. This can be further verified through physical site visits after the lock down is lifted and there is a need for further verification.

e. Semi Structured Interviews: The semi structured Interviews were conducted from the DPs regarding their satisfaction about the Inventory of lost asset, Payment of compensation, and timeliness of payment, Consultation and information dissemination& grievance redress mechanism, and provision of employment for DPs, its adequacy and income levels. This methodology was useful for studying about challenges, pending issues, about complaints and non-compliance hence based on which recommendations were made to ensure the safeguard compliance as per approved LARPs and ADB’s SPS, 2009.

f. Direct Observation Method: The direct observation was made during the field visit to project site that helped to find out the reliability and accuracy in the data and information presented in the internal SMRs and LARPs, compensation data provided by the FMC and specially to verify the status of suspension of civil work

1 Two subprojects of two new transmission line sections (i) Faisalabad West to Gatti (contract package ADB 105) and (ii) Guddu-Muzaffargarh (contract package ADB 106 and 108, Lots I and II). EMC could not visit ADB 106 package in January 2020 due to security problems but later on visited the site area on 1st March 2020 during follow up site visits to ADB 105 and 106.

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until the compensation disbursement is fully made to all the DPs. The direct observation extremely helped the EMC to come up with the appropriate observations and conclusions about the LARP implementation.

g. Rapid Appraisal Methods: Rapid appraisal method was used to quickly gather the views and feedback of DPs and other relevant stakeholders. Rapid appraisal methods were included on: (i) key informant interview, (ii) focus group discussions, (iii) community group interview, iv) semi structured interviews of the DPs from various social classes to assess the impact of resettlement and (v) direct observation.

h. Participatory Approach: A participatory approach to consultations and communication was adopted that included at wo-way communication approach, the respondents were given the opportunity to express their views or any concerns about the project. Individual and group meetings were also be held to identify and list down the current status of payments and non-compliance.

i. Identify the Strengths and Weaknesses: The EMC identified the strength and weakness of the resettlement approaches, implementation strategies, including institutional issues and provided suggestions for improvements in future ADB-funded resettlement planning and implementation.

j. Data Processing and Analysis: The following steps were undertaken to ensure proper data review and analysis; data gathered during field visits and consultations was processed by category of indicators for analysis purposes, and all analyzed data was tabulated for interpretation and deriving conclusions and recommendations.

k. Project Results: The consultant documented the major project activities like, adequacy of the budget, status and timeline of compensation payment, consultation meetings, effectiveness of grievance redress mechanism, adequacy of institutional arrangements to manage the safeguard matters, causes of non-compliances including the suspension of civil work, and commitment and efforts made by the NDTC to achieve the safeguard compliance, Provision of employment for DPs, its adequacy and income levels; identification and rehabilitation of women and vulnerable DPs, quality, effectiveness, efficiency, and sustainability of the resettlement efforts; level of DPs satisfaction about the resettlement implementation, major problems being faced and limitations of implementing the LARP, emerging LAR issues during project implementation, and corrective measures needed to implement resettlement effectively.

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3 Status of Implementation of LARPs

16. Overall, tranche 1 consists of the following five subprojects: (i) extension of 600 MVA, 500/220kV Auto Transformer at 500kV Sahiwal Substation, (ii) procurement of 4 Nos. 220/132kV, 250 MVA Auto transformers at 500 kV Rawat Substation, and (iii) rehabilitation of protection equipment at 11 substations of south area along with installation of 22 MVAR shunt reactor at 500kV Daddu, and (iv) Guddu-Muzaffargarh and (v) Faisalabad West – Gatti TL projects. Subprojects i-iii did not entail any permanent or temporary LAR impacts whereas subprojects iv and v entailed temporary impacts to standing crops and removal of trees. For subprojects i-iii only due diligence reports of IR category C were prepared and cleared by ADB whereas for the two transmission line projects (subprojects iv and v) NTDC prepared two LARPs in 2016. Construction work of Guddu-Muzaffargarh TL project was completed without updating the draft LARP whereas draft LARP of Faisalabad west - Gatti TL project was updated during the construction work. The table 3.1 below presents the overall status of LAR and implementation of the two LARPs.

Table 3.1: Overall Status of Implementation of LARPs

S. No.

Sub-projects/contract packages

LAR impacts and DPs

Remarks Estimated based on draft

LARP or DDR of 2016 Actual based on final TL route &construction 2020

1 2 3 4 5

A. Extension and Augmentation of Existing Grid Stations/Substations not involving any LAR impacts.

1

Sahiwal Substation contract package ADB 100: Extension of 600 MVA, 500/220kV Auto Transformer.

No LAR impacts No LAR impacts

No LAR impacts: Extension and augmentation work GS/SS within existing substations. A DDR of IR category C was prepared and disclosed.

2

Rawat Substation, contract package ADB 101A: Extension of 1x250 MVA, 220/132kV Auto Transformer.

No LAR impacts No LAR impacts.

No LAR impacts: Extension and augmentation work GS/SS within existing substations. A DDR of IR category C was prepared and disclosed.

3

Substations South area Dadu, contract packages ADB 102 and 103.

No LAR impacts No LAR impacts.

No LAR impacts: Extension and augmentation work GS/SS within existing substations. A DDR of IR category C was prepared and disclosed.

B. New Transmission Lines Project involving temporary impacts to crops and removal of trees.

4

500kV TL from Faisalabad West to Gatti (36km).Contract package: ADB – 105).

Towers:115 Cropped area467.3 acres Area under towers:448.28 Area under lines:19 Trees: Fruit:9 Wood:74 Structures: Nil Total DPs:115 Foundation DPs 42 Erection DPs 42 Stringing DPs 115 Estimated LAR cost (Rs in millions):

Towers:127 Cropped area 555.3 acres Area under towers:293.72 Area under lines:261.6 Trees: Fruit:33 Wood:84 Structures: Nil Total DPs:245 Foundation DPs 95 Erection DPs 105 String DPs 140 Final LAR cost Rs in millions): Crops:18.4 Trees:0.183

Based on final route of TL and final impacts, actual number of DPs is 245 who are affected by a total of 127 towers and 36 km of TL. Total 245 DPs consist of 95 DPs affected by towers foundation work, 105 DPs affected by erection of towers (including 95 who were affected during foundation work also, plus additional 10who were affected only during the erection work), and another 140 DPs who were affected during the stringing work. Draft LARP had estimated only 115 DPs consisting of 42 expected to be affected during foundation and erection work and 73 expected to be

8

S. No.

Sub-projects/contract packages

LAR impacts and DPs

Remarks Estimated based on draft

LARP or DDR of 2016 Actual based on final TL route &construction 2020

1 2 3 4 5

Crops:20.272 Trees:0.15 Vulnerability allowance:0.11 Any other allowance Nil

Vulnerability allowance:0.26 Any other allowance Nil

affected during stringing work. Updated LARP recorded final 245 DPs of all three stages hence an increase of 130 additional DPs as compared with DPs of draft LARP.

Decrease in LAR cost is because of low value fodder crop which was, actually, affected during implementation. High value wheat crop was estimated to be affected but was, in fact, not affected.

Compensation rates and allowance are based on the net market value of affected crop and trees and official poverty line of 2020.

220kV D/C T/L Faisalabad West – Lalian (80km). Contract package ADB 105 R3-Not signed.

Towers :160 Affected crop area in acres:662.96 Area under towers:26.16 Area under lines:636.8 Trees: 531 Fruit:35 Wood:496 Structures: Nil Total DPs:197 DPs of foundation:142 DPs of erection: DPs of stringing:197 Estimated LAR cost (Rs in millions): Crops:32.7 Trees:1.77 Vulnerability Allowance:0.20 Any other: Allowance: Nil

Bidding documents submitted to ADB last year. Contract award on hold. LARP will be updated based on final route survey of TL after contract award and implemented before construction work.

Updated LARP after completion of route survey is expected in June 2021 if this subproject remains in tranche 1.

2From total, Rs. 0.44 million is crop compensation for government land. 3 Bidding documents were submitted to ADB last year. Contract will be signed after approval by ADB which is on hold. Updated LARP expected in June 2021 after completion of route survey and contract award.

9

S. No.

Sub-projects/contract packages

LAR impacts and DPs

Remarks Estimated based on draft

LARP or DDR of 2016 Actual based on final TL route &construction 2020

1 2 3 4 5

5

500kV T/L from Guddu to Muzaffargarh: Contract package ADB 106, Lot I, 74km towers 1-199.

Overall towers:717:4 Cropped area 1713 acres Area under towers:120 Area under lines:1593 Trees: 749 Fruit:15 Wood:734 Structures: Nil Total DPs 389 DPs of foundation:655 DPs of erection:65 DPs of stringing:259 Overall estimated LAR cost Rs 79.67 million Crops:78.15m Trees:1.52m Allowances: Nil

Towers:199 (Lot 1) Cropped area751 acres Area under towers:263.13 Area under lines:488.58 Total trees:124 Breakdown for fruit and wood trees not available. Structures: Nil Total DPs:9076 DPs of foundation:166 DPs of erection:257 DPs of stringing:484 Final LAR cost Rs 32.79m Crops:31.51m Trees:1.28m Any allowances including vulnerability: Nil

A draft LARP was prepared in 2016 without distinction of contract package and LAR data by contract package. The subproject was divided in three contract packages, i.e. ADB 106, Lot I, ADB 108, Lot I and ADB 108 Lot II but LARP was not updated even after completion of construction work. Data presented in column 4 of this table is by contract package and by lot or section of TL based on final route of TL and completion of construction work and payment to final DPs of actual temporary LAR impacts. Thus, a total of 907 DPs of ADB 106, Lot I have been fully compensated (for all three phases of construction) in accordance with the entitlements considered in LARF. Total DPs in column 4 include 166 affected by foundation, 257 affected by erection (including 166 DPs of foundation plus additional 91 DPs additional in erection stage), 907 DPs of stringing stage) and 484 DPs affected during the stringing work. LAR data by contract package and lot is not comparable with draft LARP as draft LARP did not differentiate LAR impacts and DPs by contract package and lots.

4There was only one draft LARP prepared for Guddu-Muzaffargarh TL project, contract packages 106 and 108. Thus, total number of towers and TL length and LAR impacts did not have distinction by contract packages and lots or sections of TL. Total towers, thus, were indicated as 717 in draft LARP of 2016. 5 65 DPs of foundation and erection are included in the total 259 DPs. 6 166 DPs of foundation and 257 DPs erection (including 166 DPs of foundation plus additional 91 DPs affected during erection work) and 484 DPs of stringing. Thus, total actual DPs are 907.

10

S. No.

Sub-projects/contract packages

LAR impacts and DPs

Remarks Estimated based on draft

LARP or DDR of 2016 Actual based on final TL route &construction 2020

1 2 3 4 5

6

500kV T/L from Guddu to Muzaffargarh: Contract package ADB 108, Lot I, 22.7km, towers 597-664

Draft LARP of 2016 does not contain LAR data and DPs by contract package and lots.

Towers:68 Cropped area 467.97 acres Area under towers:237.17 Area under lines:230.8 Trees:213 Structures: Nil Total DPs:4077 DPs of foundation:60 DPs of eErection:89 DPs of stringing:407 Final LAR cost Rs 13.81m Crops:12.97m Trees:0.84m Any allowances including vulnerability: Nil

A draft LARP was prepared in 2016 without distinction of contract package and LAR data by contract package. Subproject was divided in three contract packages but draft LARP was never updated even after completion of construction work. Data presented in column 4 of this table is by contract package and by lot or section of TL based on the final route of TL and completion of construction work and payment to final DPs of final or actual temporary LAR impacts. Thus, a total of 407 DPs of ADB 108, Lot I have been fully compensated (for all three phases of construction) in accordance with the entitlements considered in LARF. Total DPs in column 4 include 60affected by foundation work, 89affected by erection (including 60 affected during foundation work and additional 29 during erection work) and 258 affected by stringing work. LAR data by contract package and lot is not comparable with draft LARP as draft LARP did not differentiate LAR impacts and DPs by contract package and lots.

7

500kV T/L from Guddu to Muzaffargarh: Contract package 108, Lot II 22km, towers 664-725

LAR data and DPs not available in draft LARP

Towers:62 Cropped area 411 acres Area under towers:228.7 Area under lines:411 Trees:185 Structures: Nil Total DPs:210 DPs of foundation:55 DPs of erection:57 DPs of stringing:988 Final LAR cost Rs. Rs 8.2 m Crops:7.09 Trees:1.2 Allowances: Nil

Data presented in column 4 is based on actual. No comparators available in draft LARP. Total DPs of Lot II are 210 including 55 affected by foundation and 57 by erection (including 55 affected by foundation and additional 2 affected during erection work) and 98affected during stringing work. All DPs have been fully compensated in accordance with entitlements provided in LARF but based on current market rate.

17. The subprojects i-iii involved only extension and augmentation of existing grid stations/substations but without causing any permanent or temporary LAR impacts. The subprojects vi and v entailed installation of new transmission lines which caused temporary

7 60 DPs of foundation and 89 DPs of erection are included in the total 407 DPs. 8 DPs of 55 foundations and 57 erections are included in the total 210 DPs.

11

impacts to crops and required removal of tress from ROW. The status of implementation of two LARPs of these two subprojects is presented below: 18. 500kV TL from Faisalabad West to Gatti (36km). Contract package: ADB – 105): A draft LARP was prepared in 2016 but implementation started before its updating based on the TL route survey. Draft LARP notified 115 towers for construction affecting an estimated cropped area of 467.28 acres and 74 trees requiring removal from ROW. An estimated amount of Rs. 20.5 million was earmarked for compensation and allowances to an estimated total of 115 DPs. The contractors started construction work without updating the LARP and providing compensation to DPs which was stopped by NTDC after ADB came to know about this deviation from the agreed requirement of payment of compensation to DPs before start of construction work. While construction work still remains on hold, NTDC has updated the LARP based on the final route of TL and actual temporary LAR impacts. The updated LARP has been disclosed on ADB’s website on 24 July, 2020. Based on final route of TL, number of towers increased from estimated 115 to 127. Similarly, the temporary LAR impacts also increased in the following manner: total DPs increased from estimated 115 to final 245 DPs; cropped area increased from 467.28 acres to 555.32, affected trees increased from 74 to 84 but estimated amount of compensation decreased from Rs. 20.5 million to Rs. 18.84 million. The reason in decrease of LAR cost is due to the fact that only the fodder crop (less in value) was affected during construction work over the wheat crop (high value) estimated as likely to be Affected in the draft LARP.

19. The EMC reviewed the updated LARP and LARF for final entitlements of 245 DPs and the compensation record provided by NTDC and confirms that all 245 actual DPs (340 DPs if counted multiple times i.e. those affected by foundation as well as erection works95 DPs of foundation plus105 DPs of erection plus 140 DPs of stringing including 5 vulnerable DPs) have been fully compensated for eligible compensation and allowance Rs. 18.84 million) for all three phases of TL construction and installation work. The EMC confirms that payment of compensation for affected fodder crop and trees is based on the current year net market rate (without depreciation) as is required under LARF and updated LARP. Payment vulnerability allowance to 5 vulnerable DPs is also based on the current year official poverty-line of Rs. 17,500/. All 5 DPs individual received three-months OPL as vulnerability allowance. Identification of vulnerable DPs was based on the census of DPs. Thus, number of vulnerable DPs is actual not estimated.

20. 500kV Faisalabad West to Lalian (80km new TL section): This subproject has contract number of ADB 105R. A draft LARP has been prepared but no contract has been awarded as the bidding documents have not been cleared so far. The LARP will be updated based on the final route of TL which will be undertaken by the contractor if this subproject is still to be considered by NTDC.

500kV Guddu-Muzaffargarh TL project

21. Overall, Guddu Muzaffargarh TL project involved 717 constructions of towers and installation of 254 km long transmission lines. The towers and TL length has been divided into 4 lots by NTDC. The EMC crosschecked this with contractors, FMC and NTDC which confirmed that 118 km of total 254km long TL is funded by ADB while remaining area is financed by NTDC’s own resources. The area under ADB financing is further divided into two contract packages and three lots as below:

a. 500kV Guddu Muzaffargarh TL project, Contract package ADB 106 Lot I from towers 1 to 199 (74km).

12

b. 500kV Guddu Muzaffargarh TL project, Contract package ADB 108, Lot I from towers 597 to 664 (22.7km), and

c. 500kV Guddu Muzaffargarh TL project Contract package Lot II from location 664-725 (approximately 22km).

22. Contract Package ADB 106, Lot I:The draft LARP prepared in 2016 neither provided LAR data and DPs by contract package and by towers and TL sections bundled together in different contract lots nor was it updated after the award of contracts. The EMC had to make a substantial effort in obtaining the package wise and lot wise LAR data including list of final DPs and final impacts. The EMC visited the field and met with contractors, FMC and NTDC officials several times in December 2019, January-March 2020 and frequent discussions for further clarifications through virtual means from April to August 2020. Site visits and face-to-face meetings were also conducted with DPs whenever possible during December 2019 and January – March 2020 amidst COVID pandemics that disallowed field visits and face to face interaction in the field after March 2020.

23. The review of data of impacts and compensation payments, maintained by PIU and contractors and meetings with patwaris deputed to Guddu Muzaffargarh project indicated that a total 907 DPs were listed down as final DPs whose cropped area of 751 acres got temporarily affected besides removal of 124 trees from the ROW. All towers and TL lines passed through rural areas and thus, as per provision of Telegraphic Act of 1885 and entitlements in LARF) no land was acquired for towers foundation work but compensation of affected crops and trees under the towers footage and lines was fully paid to all DPs based on the current years market rates (without depreciation of crop and tree value deduction of any applicable fees or governmental taxes). Further review of payment record and discussions with contractors, and patwaris of FMC, PIU and contractors and DPs the EMC confirms that (a) 166 DPs got fully compensated for lost crops and trees under foundation work, 257 DPs got fully compensated for affected crops and trees under erection work and 484 DPs got fully compensated for affected crops and trees under stringing work. Thus, a total amount of Rs.32.79 million was paid to all 907 DPs. The construction work has been completed and DPs stand fully compensated based on the final impacts and this section of Guddu Muzaffargarh TL project now does not have any safeguards noncompliance issues remaining outstanding.

24. Contract Package ADB 108, Lot I: Draft LARP prepared in 2016 did not contain LAR and DPs data by contract package and Lots. The EMC made a substantial effort in obtaining the LAR and DPs data for this package after visiting the field and meeting with representatives of contractors and officials of NTDC, PIU and FMC and meeting with DPs in December 2019, January-March 2020 and through virtual means from April to August 2020 due to COVID 19 pandemics and its restriction on field visits and meetings. The review of data of impacts and compensation payments, maintained by PIU and contractors and meetings with patwaris deputed to Guddu Muzaffargarh project show that 68 towers were constructed in a TL length of about 22.7km under this contract package that affected a total of 407 DPs. They were affected by three phases of TL construction in the following manner: 60 DPs affected during foundation work, 89 DPs affected during erection of towers (including 60 affected during foundation plus additional 29 affected only during erection) and 258 DPs affected during stringing of wires.

25. A total of Rs. 13.81 million was to be paid to these DPs for an affected crop area of 476.97 acres and 213 trees. The payment record and verification by EMC confirms that all 407 DPs have been fully compensated in accordance with the entitlements provided in LARF but based on current year’s net market value of affected crops and trees and without value depreciation

13

and deduction of any applicable governmental fees. The construction work in ADB 108, Lot I has been completed and DPs have also been fully compensated based on the final impacts and current market value of affected crops and trees. Thus, this section of Guddu Muzaffargarh TL project does not have any safeguards noncompliance issues remaining outstanding.

26. Contract Package ADB 108, Lot II: Draft LARP of 2016 did not contain LAR and DPs data by contract package and lots. EMC made substantive effort in obtaining this data for this package after visiting the field and meeting with representatives of contractors and officials of NTDC, PIU and FMC and meeting with DPs in December 2019, January-March 2020 and through virtual means from April to August 2020 due to COVID 19 pandemics and its restriction on field visits and meetings. The review of data of impacts and compensation payments, maintained by PIU and contractors and meetings with patwaris deputed to Guddu Muzaffargarh project show that 62 towers were constructed in a TL length of about 22.km under this contract package that affected a total of 210 DPs. They were affected by three phases of TL construction in the following manner: 55 DPs affected during foundation work, 57 DPs affected during erection of towers (including 55 affected during foundation work plus additional 29 affected only during erection) and 98 DPs who were affected during the stringing work.

27. A total of Rs. 8.2 million was to be paid to these DPs for an affected crop area of 411 acres and 213 trees. The payment record and verification by EMC confirms that all 407 DPs have been fully compensated in accordance with the entitlements as provided in the LARF but based on the current year’s net market value of affected crop and trees and without value depreciation and deduction of any applicable governmental fees. The construction work in ADB 108, Lot II has been completed and DPs have also been fully compensated based on the final impacts and current market value of affected crops and trees. Thus, this section of Guddu Muzaffargarh TL project does not have any safeguards noncompliance issues remaining outstanding.

Employment Opportunities

28. The draft LARPs referred to skilled and unskilled jobs to be provided to locals including DPs. To ensure compliance with this provision, NTDC and contractors have provided jobs to 36 locals and DPs while 88 people have been engaged by contractors who used to come from different places. Common job categories to which they have been employed are drivers, security guards and laborers.

Table 3.2: Status of Employment at the Project

Contract Locals/DPs Outsiders Total Percentage of

DPs

ADB 105 9 26 35 26%

ADB 106 13 30 43 30%

ADB 108 14 32 46 30%

Total 36 88 124 29%

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4 Implementation Analysis

29. In addition to the monitoring indicators provided in section 2 of this report, the EMC also reviewed in detail the safeguard requirements of tranche 1 loan and the facility’s LARF, the safeguard requirements of bidding documents and contract awards of tranche 1. All these documents required (i) updating of draft LARPs based on the final routes of transmission lines, (ii) payment of compensation and applicable allowances to all DPs in accordance with entitlement matrix of LARF and subproject-specific LARPs but before start of construction work conditional to issuance/acceptance of external monitoring report validating full disbursement of three phases of compensation to all DPs for full or partial ROW before commencement of construction work. With these requirements requiring DPs to be fully compensated before construction work, the EMC compared the construction/implementation work with the agreed safeguard requirements but found that these requirements were not followed as agreed and construction work was completed in almost all cases without (i) updating LARPs and compensating DPs before start of construction work of all three phases, (ii) issuance and acceptance of EMC’s external monitoring report and based on that (iii) ADB’s no-objection to the initiation of construction work in full or sectional ROW.

30. The deviation from the agreed safeguard requirements caused safeguards noncompliance in both TL projects. ADB and EMC came to know about the safeguards noncompliance when construction work and payments to DPs were fully completed in Guddu Muzaffargarh TL project (ADB contract packages 106 and 108) whereas in the second TL project Faisalabad West to Gatti (ADB contract package 105) only first phase of construction work (towers foundation work) and payment to DPs was completed. The second phase of construction work (erection of towers) also commenced partially but without compensating DPs. Nevertheless, in case of both TL projects construction commenced prior to updating of LARPs and delivery of compensation to DPs. However, further construction work in the ongoing Faisalabad West to Gatti TL project was suspended until NTDC addressed all noncompliance in both TL projects and issued an independent compliance monitoring report confirming that all DPs have been fully compensated in accordance with entitlement matrix of LARF and draft or updated LARPs but based on the final or actual LAR impacts of construction.

31. The EMC held intensive discussions with NTDC, PIUs, FMC and contractors to find out the reasons about why they could not follow the agreed safeguard requirements and how safeguard noncompliance could be addressed or fixed in tranche 1 and completely avoided in subsequent tranches and subprojects. The EMC also tested the monitoring indicators of LARF and LARPs as part of EMC’s investigation of and analysis of noncompliance. The ensuing paragraphs present a detailed analysis of implementation of safeguard requirements including LARF, LARPs and two corrective action plans (CAPs) which were prepared by NTDC during implementation of Guddu Muzaffargarh project and factors which resulted in safeguards noncompliance.

4.1 Reasons for Safeguards noncompliance:

32. The EMC further analyzed the views and opinions of concerned officials and consultants of NTDC and the contractors (responsible for safeguards compliance) about safeguards noncompliance which can be safely placed in the following order:

a. Contractor’s ignorance about safeguard obligations of contract award: Biggest reason for contractors’ deviation from the agreed safeguard requirements is their ignorance about the safeguard obligations of contract award. This is further worsened due to unavailability of any social safeguard staff deployed by contractors to fulfil their safeguard obligations. Third reason for safeguards noncompliance by the contractors

15

is the unavailability of procedures that can bound contractors comply with the dated safeguard milestones before jumping on to construction work. The procedures missing in this regard are (i) survey of TL route and finalization, (ii) when and how to collaborate preparation and updating of draft LARF, LARP, DDR or a CAP (ii) procedure for approval of and availability/transfer of required LAR funds (non-land) and timing of payment to DPs-payment of compensation and allowances to DPs for non-land impacts is by contractors which NTDC liquidates later on through an invoice by the contractors (iii) procedure for payment to DPs by the contractors and (iv) procedure for partial or sectional updating of LARP and payments to DPs, and (v) procedure for preparation/issuance of compliance monitoring report and request for civil works (full or sectional) etc.

b. NTDC’s institutional setup, safeguards capacity and coordination issues: NTDC has adopted a well-structured institutional setup for safeguards compliance. This includes an environment and social impacts cell (ESIC) headed by a deputy director general well qualified in safeguards management. The cell is further assisted by the facility management consultants (FMC) that has a social team consisting of a senior resettlement specialist, a livelihood restoration expert, 4 revenue patwaris and two sociologists responsible for updating of safeguard documents, establishing/maintaining reliable LAR database system and internal monitoring or LARPs. Clarified/corrected as indicated. In addition to this, there are field based project implementation units that are headed by project directors who are assisted by assistant land acquisition officers and revenue patwaris who undertake assets evaluation and assist contractors in preparation of compensation cheques for DPs, further to this is the directorate of land that is headed by a D.G. and is assisted by patwaris in the matters related to land acquisition for new grid stations. With this robust institutional set up for safeguards management, major problem why projects slip into safeguards noncompliance is lack of inter and intra departmental coordination, clarity of roles and responsibilities about safeguards requirement and management before contractors are allowed to start construction work.

The safeguards capacity of these units is generally not up to the mark. Capacity of FMC’s social team requires a comprehensive safeguard training right from preparation and updating of draft LARF, LARP, and a reliable LAR database to preparation of internal monitoring reports, and to the sequence and timing of safeguards documentation and implementation with regards to the safeguards obligations of the contractors. Similarly, capacity of Directorate of Land in safeguards management is very weak. The staff needs a detailed training in social safeguard to effectively coordinate with ESIC, PIUs, FMC and contractors in the matters related to land acquisition, resolution of land related complaints and overall safeguards compliance.

Further field supervision by NTDC is resource constrained. Normally, ESIC supervises projects through field visits on a quarterly basis and through progress review meetings held at H/Q level. FMC provides assistance through the revenue staff during assessment of damages and preparation of compensation payments at field level, while social team led by resettlement specialist monitors the implementation of LARP and provides information from field level. This information is entered in the LAR database or Management Information System (MIS) to for retrieval and further analysis as needed. However, EMC found that NTDC faces lack of resources both human and logistic that weakens ESIC’s capacity to monitor and supervise safeguards implementation. This resource constraint can be addressed through deploying

16

sociologists with experience in safeguards management in ESIC and PIU and contractors.

c. Standard operating procedures for right-of-way compensation: Unavailability or lack of SOPs for “right of way compensation before start of construction work” is another major problem that NTDC encounters in ensuring compliance. National laws including the Telegraphic Act of 1885 and Land Acquisition Act of 1894 do not recognize SPS’s principles of IR policy which require payment of compensation to DPs (both titled and untitled) before start of construction work and at replacement costs. NTDC tries to meet these requirements through projects-based reconciliatory measures but faces serious objections from Pakistan’s Auditor General Department and the National Accountability Bureau. However, in order to address these systematic issues, NTDC has now prepared a set of SOPs which have been shared with IFIs including bilateral also. But so far only ADB has reviewed the SOPs and provided detailed comments for incorporation. The comments encompass integration of safeguards and steps and procedures, needed to ensure compliance, across procurement and construction implementation and monitoring. NTDC is following up with other IFIs for their feedback which once obtained will become part of the SOPs for circulation to NTDC and government’s legal departments and experts including the Auditor General and NAB. The SOPs thus finalized will become part of updated LARF of MFF for implementation.

While SOPs are still in the process of making, NTDC needs to agree on interim actions to ensure that no safeguards noncompliance occurs in subsequent tranches.

d. Limitations of Updated LARF and LARP of Faisalabad West: Although LARP has been updated based on the actual LAR impacts limited to crops and trees and few vulnerable DPs and compensated at current market rate but the long awaited procedures required for ensuring compensation prior to start of construction could not be seen either in LARF or LARP. The needed guidelines and adjustments in existing procedures of NTDC and ensuring replacement costs as the SPS’s standard of compensation have still been left to the SOP which according to NTDC’s advice will be made part of updated LARF of tranche 4 and subsequent LARPs of tranches 2-4 which will be updated and approval of ADB obtained before their implementation.

e. Grievance redress Management System: The project based GRM is generally responsive to the issues of compensation that are related to non-land assets, e.g. affected crops, trees, and any structures affected by TL. DPs generally have better access to field based GRM where their issues and concerns related to compensation of crops and trees and restoration of affected land are well addressed. Their common concern is delay in payment of compensation which can be addressed well through advance transferring the compensation amount to the contractors by NTDC to ensure timely payments to DPs. This is being addressed through the payment related procedures in the SOP. However, for land acquisition matters and fixation of land compensation, the GRM is not much effective due to the legal constraints or limitations which NTDC faces in unilaterally enhancing land compensation or land litigation cases for which LAA provides a legal course and DPs generally prefer to seek resolution through the court. Nevertheless, in the interest of projects and DPs, NTDC should explore complaints resolution through negotiation with DPs out of court.

In terms of complaint redressing status of subprojects, a total of 216 complaints (46 in ADB 105 contract, 99 in ADB 106 contract and 71 in ADB 108 contract) were logged in the project area and all have been resolved as reflected in Table 4.1 below. Notify to

17

mention is that most of the complaints were logged against the delay in payment in all three contracts. It is understood that the payments are made to DPs after the completion of work and the DPs have to wait a long so they registered a complaint against this specific category. Delay in payment to DPs is mainly due to the 3-5 months’ time which NTDC takes to approve the payment invoice of contractors from preparation of invoice by contractors and submission to NDTC and its approval. The good thing is that now all the complaints have been resolved and all the DPs are satisfied with it.

Nevertheless, few DPs’ shared concerns with EMC during field visits regarding the on-going assessment procedure. The DPs are not properly consulted which eventually lead to low compensation value. The DPs also shared their concerns that they are not communicated with the payment schedule, ultimately, they do the telephone calls to know the payment schedule or sometimes payment disbursement team do the surprised visit in the area resultantly few DPs could not get their payment during that particular visit.

Table 4.1: Detail of status of complaints logged in the Project Area

Contract package ADB 105

Nature of the complaints Total Resolved Un-resolved

Land Not Cleared 3 3 None

Delay in Payments 35 35 None

Reassessment - - None

Rate Issue 2 2 None

Damages & assessment 6 6 None

Contract package ADB-106

Category Total Resolved Un-resolved

Land Not Clear 8 8 None

Delay in payment 57 57 None

Reassessment - - None

Rate Issue 2 2 None

Damages & assessment 32 32 None

Contract package ADB-108

Land Not Clear 5 5 None

Delay in payment 38 38 None

Reassessment 10 10 None

Rate Issue 6 6 None

Damages & assessment 12 12 None

Sub-Total 71 71 None

EMC also observed during the field visit and during remotely validation of compensation payment that few DPs complained about the delay in compensation payment. NTDC reported that procedural improvement will be made through establishing SOPs and updating the LARF and apply in the subsequent tranches.

f. Public Consultations and Disclosure: A total of 14 consultation meetings were held with 72 DPs including 11 female DPs at ADB-105 in December 2019 for updating of

18

LARP. Virtual discussions were held with select DPs of ADB 106 and 108 due to COVID field restrictions to crosscheck disbursement of compensation although construction and compensation payments had been completed by NTDC without updating the draft LARP.

The EMC based on the field visits and consultations9 with NTDC field staffs and DPs confirms that consultations with DPs by FMC, PIUs and ESIC have been conducted well during the course of disbursement of compensation and any issues that they reported through the GRM. Consultations by PIUs and FMC with DPs have bene reported to have continued since preparation and implementation of LARPs with focus on compensation assessment and compensation disbursement process but little or no back up exist that can be tracked to validate such consultations. NTDC clarified that with FMC engaged to the projects, consultations with DPs are being held formally and minutes of the meetings will be recorded and reported in subsequent monitoring reports.

g. Stakeholders Consultations and DPs Feedback

The views of the DPs were assessed regarding the compensation assessment, payment disbursement, uses of the compensation amount, consultation and disclosure, presence of displaced persons committees and existing of grievance redress mechanism. A total of 182 people was contacted during the field visits. Among the total, 151 were the DPs (Annex-IV), 6 were from the general public, 4 were the local people who got the jobs from the project, 7were from the contractor side, 1 was from the project management consultant (NESPAK), 3 were from the FMC and 10 were the NTDC’s staff. All the contacted DPs (151) have received their complete compensation payment.

The DPs responses regarding the compensation payment, consultation, grievance redress mechanism and uses of compensation amount is discussed below in Table 4.2.

Table 4.2: Responses of the Contacted DPs

S# Indicators %

Response Respondents

1 Status of awareness regarding the compensation payment 74 112

2 Constructed the houses 20 18

3 Marriages 15 14

4 Households use (in routine expenses) 29 44

5 Purchased agriculture input and land rehabilitation 12 18

6 Enhance the business activities 09 14

7 Rehabilitate the land damaged by the contractor during foundation and concrete work

13 19

8 Miscellaneous use (loan paid back, buy motorbike, rickshaw,animal, livestock rearing and to perform the religious obligation)

22 33

9 Organizing consultation meetings 41 62

10 Awareness level about the GRM 0 0

9 February 17-18: Field visits and consultations contract package 108. January 20 & February 28: Field visit & follow up visit and consultations contract package ADB 105: February 29 – March 1: Field visit and consultations contract package ADB 106. In house discussions were held with FMC team, ESIC and NTDC’s management consultants NESPAK, PIU field staffs and contractors.

19

11 Awareness about the DPCs 0 0

Table indicates that 74% of the DPs have the awareness level regarding the amount of compensation, though all the DPs well understood that they will be compensated for the loss of their assets by NTDC. In term of uses the compensation amount, almost all the DPs made the good use of the compensation amount especially buying the agricultural input for increasing the agricultural productivity, make investment in business activities to improve their livelihood etc. Regarding the awareness level about the GRM, none of the DP (from all three contracts, 105, 106 & 108) know about the existing of any GRM or the presence of any register, however almost all the DPs reported that they logged the complaints to officials visiting them regarding the solution of their problems and usually managed to get it resolved. On asking the presence of GRM, NTDC field staff reported that they simply came to know about the GRM once the FMC started visiting them; however, they have the awareness about the complaint register placed in the contractor office and DPs complaints are logged there. During the follow up visits to sites on 28 February and 1st March 2020, the EMC also found that now the formal GRM is in place and also FMC staffs are on board and they are interacting with the PIU and DPs to provide the awareness about the GRM subsequently addressing their complaints. NTDC reported that GRM will be in proper functioning in the subsequent tranches as now the payment has been completed

It is also to notify that on exploring most of the DPs told that NTDC field staff including revenue staffs and contractor is visiting them for impact assessment, compensation disbursement and seeking their support for the construction of the civil work. On asking NTDC staffs told that no formal meetings are held while they are visiting them on frequent basis specially to take them under confidence regarding compensation assessment and payment. Few also reported that they did not inform them about the visit schedule and do the assessment through getting the information from the neighboring farmers eventually the payment is not assessed properly.

h. Meeting with the Contractors: The EMC held the meeting with both the contractors (Contract105, Contract 106 and contract 108) and following is the outcome of the meeting;

i. The contractor did not get any training on the safeguard compliance and LARP implementation, simply got one orientation on HSE.

ii. The contractors did not receive any instruction from the NTDC regarding the safeguard compliance.

iii. The contractors were familiar with the name of LARP and perceive it as an ADB’s document, but it is none of the contractor business, only relate with the NTDC.

iv. The contractors were aware about the contractual binding regarding the safeguard compliance.

v. Major hindrances in the civil work are delay in payment and they both were in the opinion that if the payment is made prior to civil work then the contractor job will become easier. The contractor of ADB 106 reported that he usually took the support of local representatives during the construction work for the smooth functioning of project activities. He specially quoted the name of Syed Agha Hussain, local representative of village Basti Shah Wali and got his support in project activities.

vi. Delay in liquidation of invoices submitted by contractors to NTDC for liquidation of compensation money paid to DPs. With streamline of

20

invoices separately for compensation money and construction work for liquidation by NTDC delay in liquidation to contractors will be well addressed.

i. Meeting with the NTDC staff

The EMC has the meeting with the NTDC staffs even the comments were raised and those are partially addressed, and comments matrix is reflected as annex-VIII and following are the outcome of the meetings.

i. NTDC field staff told that they knew about the LARP from the FMC who are used to visit the site for monitoring and database management purpose. NTDC staff also reported that they are sharing the compensation assessment and disbursement data to FMC.

ii. NTDC field staff did not get any training on the LAR requirements and ensuring the safeguard compliance.

iii. The NTDC field staff working on ADB 105 confirmed that they have received the instructions from the ESIC to suspend the on-going construction activities until the completion of compensation disbursement to all DPs of three construction phases.

iv. NTDC revenue staff makes the assessment for the expected losses and damages of DPs in his presence and in the absence of particular DP; the information is collected from the neighboring farmers. They also updated that they never worked out the cost for livelihood assistance, vulnerability, impact severity, women headed household and other assistance as per SPS requirements. Only in case of ADB 105 there were five vulnerable DPs who were paid vulnerability allowance in accordance with LARF and updated LARP.

v. However, ESIC reported that vulnerability is calculated as per LARP and there are 5 vulnerable DPs assessed at the stringing stage of contract 105.

vi. ESIC expressed the lack of coordination within the NTDC, limitation of safeguard staffs, delay in finalization of design , lack of the SOPs & legal coverage from Audit General office and Ministry of Finance (for advance payment to Contractor), and lack of commitment (to ensure the safeguard compliance) at the management level of NTDC are the main causes of safeguard non-compliance. Now the consultant (FMC) staffs are fully on board, SOPs are also in the finalization process and management also showed commitment (letter annexed (Annex-III in the report), hence LAR requirements will be met as per PAM and SPS, 2009.

j. Meeting with FMC

EMC held the meeting with the FMC staffs especially the database management specialist and following are the main points of the discussions.

i. PIU is not supportive and always showing reluctant in data accessibility.

Usually, give the data in pieces that eventually delays the database

activities.

ii. PIU did not share the compensation payment records of ADB-106 and

ADB-108 with FMC, that’s why the database is not established for the said contract.

21

iii. PIU does not have sufficient knowledge about the social safeguard so take

least interest in this matter.

iv. PIU does not have data as per category of the impacts followed the

compensation payment for ADB-106 & ADB 108.

k. LAR database: The current system of FMC’s LAR database needs improvement as tracking of DPs by phases of TL construction and by types of impacts and compensation rates/amount is not available for comparison. They need to coordinate well with PIU, ESIC LAOs and patwaris for establishing a computerized list of DPs by types of impacts and payable compensation at net market rate/replacement costs.

l. Compensation disbursement as per entitlements and at market rates: Although construction work in Guddu Muzaffargarh TL project completed without updating the draft LARP,NTDC must strive to ensure that this deviation from the agreed safeguard requirements is completely avoided in the subsequent projects. With LARP not updated EMC reviewed the provisions of LARF and draft LARP for entitlements of DPs and the rate of compensation. Based on this review and available evidence of payments and compensation rates, EMC confirms that LAR impacts in Guddu Muzaffargarh are limited to only temporary impacts to crops and trees while only additional impact in Faisalabad West was 5 vulnerable DPs. All DPs of both TL projects have been compensated in accordance with the provisions of LARF and LARP as below:

a. Crop: compensation is based on the current market rate for one-year harvest of affected crops as per the entitlement matrix of draft LARPs and @ full market rate approved by the provincial agriculture department.

b. Fruit trees: Further as in approved LARF and draft LARPs, compensation for

mature fruit-bearing trees comprised on the market rate of the yearly crop yield multiplied by the number of years required to grow such a tree to the same production level it was cut, and for immature trees that are yet to bear fruit compensation based on the gross expense needed to reproduce the tree to the same age it was cut.

c. Timer Trees: were valued based on the market value of their dry wood volume.

The wood of the fallen tree has remained with the owner and its value was not deducted from the compensation.

d. Vulnerable Allowance: In term of vulnerability, the updated LARP identified a

total of 5 DPs as vulnerable based on the socio economic and census survey of 245 DPs of all three construction phases (foundation, erection and stringing) of ADB-105. They were considered as vulnerable due to their monthly income less than official poverty line of Rs. 17,500 for the year 2019-2020. Thus, they were compensated in cash amount worth of three months OPL Rs. 17,500/per month in accordance with LARP and updated LARP of LARP of Faisalabad West. No vulnerable DPs were found in the final list of DPs provided by NTDC for Guddu Muzaffargarh (ADB package 106 and 108).

m. Delay in payment of compensation by contractors: The LARPs seem silent about flow of LAR funds from NTDC to contractors even though payment of compensation to DPs is through contractors. While this is a practice adopted by NTDC, but contractors often face delay in receiving the LAR funds due to which DPs also complain about delay

22

in compensation. EMC discussed with NTDC how NTDC intends to address this issue. NTDC said that procedure for timely transfer of LAR fund to contractor is being proposed in the SOP which after approval by NTDC will address this issue and payment to DPs will become timely. The system of invoicing by contractors is also being revamped so that contractor submits a separate invoice of compensation payment to NTDC for liquidation. The current practice is invoicing civil works and compensation together that causes delay in liquidation by NTDC due to approval thresholds.

n. Acquisition of land under towers or towers footage: EMC reviewed the LARF of MFF and tranche 1 LARPs to see whether provisions and entitlements of LARF and LARPs are being fully followed in acquiring land for towers. Section 5.3 of Telegraphic Act 1885 requires compensating all land and land based assets, occupied by towers in urban areas at current market rates that commensurate full replacement costs; i) by avoiding land impacts in rural areas through the use of towers with sufficient vertical clearance to allow the continuation of unrestricted farming and animal grazing, and ii) compensating the land and assets in rural areas if the construction of such towers is impossible. NTDC even using the tower for 220 kV TL has sufficient vertical space that allow the unrestricted farming. While NTDC clarified that that NTDC does not follow practice of narrow dimension that disallow farming under towers, EMC also did not observe any towers installed in urban areas where the land could be acquired. The provision of LARF and LARP regarding land under towers is being strictly followed as it is. If any tower passes through urban areas, NTDC will consider acquiring land and compensating DP for land.

o. Efforts made by NTDC to fix noncompliance: EMC had detailed discussions with NTDC regarding their efforts and actions that they have taken or are considering to take to address the safeguard noncompliance in tranche 1 TL projects. EMC also reviewed electronic communication between ADB and NTDC regarding NTDC’s assurance and commitment about safeguards compliance and efforts being considered to avoid noncompliance in subsequent projects. Based on that, NTDC confirms for making the following efforts to ensure compliance with safeguard requirements, i.e. payment of compensation before starting with the subsequent phase.

i. As advised by ADB, NTDC issued instruction to PIU and contractor in package ADB 105 to suspend the construction work until DPs are fully paid and verified by EMC who confirmed during the follow up visit conducted on February 28, 2020 that the civil work was suspended.

ii. Managing Director of NTDC has submitted written commitment to ADB on January 14, 2020 to ensure compliance in further tranches of ADB (annexed in the report).

iii. NTDC prepared a draft SOP on right of way compensation to ensure payment of compensation to DPs before start of civil works/construction activities. The draft SOP was endorsed by NTDC in Dec 2019.

iv. NTDC is revising the LARF of MFF 2to adjust the mode of compensation by frontloading all payments for temporary impacts and entitlements before start of construction activities. Any residual impacts will also be captured and compensated through sectional handover procedure. Final updating or revisions will be made after NTDC management approved the SOP.

v. NTDC with technical support of ADB will organize safeguards training program in November, 2020 to enhance the capacity of NTDC’s staff including the management, contractor and sub-contractor on requirements of loan

23

agreement, contract bidding requirement and updated SOPs on addressing the LAR impacts as per SPS’s requirements. NTDC is required to apply the approved SOPs and updated LARF in updating the LARPs of tranche 2 and tranche 3 and accordingly pay compensation to DPs before start of construction work whether this construction of new grid station or three phases of TL construction. Approved SOPs and updated LARF will also be applied to tranche 4 when processed.

vi. NTDC strengthened the consultant team (FMC) from December 2019 to ensure the safeguard compliance and fully implementation of LARP. Now FMC has fully on board with one Resettlement specialist, livelihood specialist, two database sociologist and four Patwaris. The services of the Gender Specialist are also hired on intermittent basis.

vii. NTDC updated the LARP of ADB-105 and that was fully implemented.

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5 Conclusion and Recommendations

Conclusions

33. EMC reviewed the updated LARF and LARPs of tranche 1 TL projects and internal monitoring reports of NTDC critically assessed the implementation of both LARPs of two TL projects, payment record of NTDC and contractors and FMC’s LAR data base and visits to project sites and consultations with DPs where possible under the COVID pandemic and field restrictions and confirms the implementation of LARPs of tranche 1 in the following manner:

34. Although construction work commenced prior to fulfilling the safeguard requirements of tranche 1 loan, NTDC and contractors’ record of payment of compensation to DPs of both TL projects confirms that all 1769 DPs of both TL projects (245 DPs of ADB 105 and 1524 DPs of ADB 106 and 108) have been fully compensated based on the final TL routes and impacts that are limited to temporary impact to a combined cropped area of 2185.27 acres and 639 trees. A total of Rs. 63.64 million was payable to 1,769 DPs for affected crops and trees and 5 vulnerable DPs which have been fully paid out by NTDC through the contractors and no DPs remain unpaid. All compensation rates are based on the current year’s net market rates and no value depreciation or deduction of governmental fees is applied to any compensation item and unit rate. All entitlements are fully in accordance with entitlements provided in LARF and LARPs.

35. Construction work and payments to DPs in Guddu Muzaffargarh TL project has been achieved fully and nothing remains pending or outstanding in this TL project. Draft LARP of this project needed to be updated and fully implemented prior to start of construction work but NTDC could not fulfill this requirement although payment of compensation to 1524 DPs has been made based on the final/actual LAR impacts and compensation rates meeting the net market rates of current year. Since, both construction work and compensation payments has been fully achieved, the updating of LARP is not applicable now. Thus, this TL project can be concluded as compliant in terms of providing compensation to final DPs of final impacts based on net market rates and in accordance with entitlements provided in LARF and draft LARP.

36. The LARP of Faisalabad West has been updated and cleared by ADB based on the final route and design of TL. The final amount of compensation Rs. 18.85 million to final 245 DPs for final impacts to 555.3 acres of cropped area and 117 trees and 5 vulnerable DPs has been fully achieved in accordance with entitlements of updated LARP and LARF. Since updated LARP has been fully implemented and all 245 DPs have been fully compensated and verified by EMC, there remains no safeguards noncompliance in this TL project.

37. The key issue of advance payment of compensation to DPs prior to start of construction work is yet to be addressed systematically through the procedures that NTDC is still in the process of finalizing and seeking management and legal approvals. This is necessary for NTDC to achieve if safeguard noncompliance is to be completely avoided in subsequent tranches and subprojects. Right now, SOP is awaiting feedback from IFIs and will be updated by NTDC in light of IFIs feedback. Once approved by its management and legal departments of government of Pakistan, SOP will become part of the updated LARF and NTDC’s implementation systems towards safeguards compliance.

25

Recommendations

38. The EMC offers following recommendations and an action plan to prevent safeguards noncompliance in subsequent tranches and subprojects:

a. NTDC must conclude the SOPs for advance payment of compensation prior to construction. Obtain NTDC management and legal approval of the procedures and adjustments drafted in the SOP. Incorporate SOP in the update LARF and put both LARF and SOP in implementation before heading on for implementation of subsequent GS and TL projects.

b. Update LARF and LARPs of subsequent tranches in accordance with approved SOP and LARF and follow procedures adopted in SOP and LARF for advance or upfront payment of compensation to DPs before construction work and follow procedures for LARP monitoring and safeguards compliance before requesting ADB for issuance of no objection to construction work.

c. Impart safeguards training to the staff of contractors and consultants and relevant units of NTDC dealing with land acquisition and safeguards before moving onto the projects under tranche 2

d. Deploy sociologists with experience of safeguards implementation at PIUs, contractors and ESIC and improve their outreach to the field and DPs.

e. Devise coordination nodes with clear roles and responsibilities to ensure that all stakeholders; contractors, PIUs FMC and ESIC and directorate of land strictly adhere to the procedures required to undertaken TL route survey, update LARP, make payments to DPs based on updated LARP as approved by ADB, issue monitoring reports to validate payment of compensation to DPs and after fulfilling these requirements approach ADB for issuance of no objection to initiation of civil works.

f. Make sure that above is strictly followed. Increase field monitoring and supervision intensity to ensure that these procedures are well understood by contractors and followed without any slippage.

g. Prepare a reliable LAR database of final DPs and final impacts before starting disbursing compensation. Provide a session on LAR database to FMC during the safeguards training.

26

Annexure –I:NTDC Policy and Procedures regarding Grievance redress mechanism

27

NATIONAL TRANSMISSION &DESPATCH COMPANY (NTDC)

Grievance Redress Mechanism (GRM)

For

World Bank, Asian Development Bank and Other Foreign

Donor Funded Projects

Policy and Procedure

January2020

28

1. Introduction

This document provides policy and procedure, hereinafter to be referred as “The Grievance Redress Mechanism (GRM)”, outlining a process for documenting, addressing, responding and employing methods to resolve project grievances (and complaints) that may be raised by affected persons or community members regarding major project specific activities such as, environmental and social performance, the engagement process, land acquisition and resettlement and/or unanticipated social impacts resulting from project activities that are performed and/or undertaken by Project Authority. The document describes the scope and procedural steps and specifies roles and responsibilities of the parties involved.

For the purpose of this GRM an ‘Affected Person (AP)’means a person that is adversely affected temporarily or permanently as a result of the project undertaken by the Project Authority or works carried out there under.

Moreover, the term ‘Grievance/Compliant’ is confined to any formal communication made by an AP that expresses dissatisfaction and/or adversity about an action or lack of action, about the standard of service, works or policy, deficiency of service, works or policy of the project management and its implementation mechanism.

2. Principles

A GRM is proposed to address any complaints or grievances arising during the implementation period of the projects undertaken by Project Authority. Members of the public may perceive risks to themselves or their property or their legal rights or have concerns about the possible adverse environmental and social impact that a project may have. Any concerns or grievances should be addressed quickly and transparently, and without retribution to the AP or Complainant.

The primary principle is that any complaints or grievances are resolved as quickly as possible in a fair and transparent manner.

All minor complaints regarding land or property disputes that can be resolved should be resolved immediately on the site at the village level. In case the concerned parties are unable to resolve the said dispute on the site the AP may make a complaint to the Grievance Redressal Committee (GRC), the details of which are provided herein below. The focus of the GRM is to resolve issues in a customarily appropriate fashion and record details of the complaint, the Complainant and the resolution.

3. Objectives

The objectives of the GRM are to:

• develop an organizational framework to address and resolve the grievances of individual(s) or community(s), fairly and equitably;

• provide enhanced level of satisfaction to the aggrieved;

• provide easy accessibility to the aggrieved/affected individual or community for immediate grievance redressal;

• ensure that the targeted communities and individuals are treated fairly at all times;

29

• identify systemic flaws in the operational functions of the project and suggest corrective measures; and

• ensure that the operation of the project is in line with its conception and transparently to achieve the goals for sustainability of the project.

4. Structure of Grievance Redress Mechanism

The project shall have multi-tier GRM with designated staff responsibilities at each level. These levels comprise the following:

Project Management Unit (PMU)/Project Implementation Unit (PIU) Level

The Project Authority shall constitute a Grievance Redressal Committee (GRC-P) at PMU/PIU level to resolve all grievances and complaints of the APs and the Complainants. The GRC-P shall comprise of the following members:

• Project Director (or his representative), NTDC as Convener of GRC

• Deputy Manager (Social & Environment), NTDC as Secretary of GRC

• Representative of Land Acquisition Collectors (LAC) as Member

• Independent Consultant10(a retired Land Acquisition Collector (LAC) (or equivalent who has knowledge of the land acquisition and process to resolve issues) as Member

• Representative from Consultant (male and female)11

• Any notable personality from the area to be nominated in writing by the relevant District Administration in consultation with the community.

Note: Representative from any other Department may be called as and when required by the GRC.

PIU will install a complaint box in the office and dedicate a telephone number for registration of any complaints. PIU will also designate a staff not below the rank of an Office Assistant who shall record the complaints and immediately report it in PIU and concerned officials.

The GRC-P, through an authorized representative, will acknowledge the Complainant about his complaint, scrutinize the record, explore the remedies available and request the Complainant to produce any record in favor of his claim. After thorough review and scrutiny of the available record on complaint, visit the field and collect additional information, if required. Once the investigations are completed, the GRC shall provide with a decision within 21 days of receipt of the complaint. If aggrieved person is not satisfied, he/she will be allowed to elevate the complaint to next level of GRM for resolution of his/her grievances within 07 days after communication of decision by the GRC-P.

NTDC Headquarter (HQ) Level

NTDC shall constitute a Grievance Redressal Committee (GRC-HQ) at HQ level. The committee will have following composition:

• General Managers Projects Delivery North/South (as relevant) as member, being the convener

• Additional Director General ESIC as member

10 PIU will hire this person as its consultant. 11 Once the consultant is hired. This representation can be from design, supervision, owner engineer or any other consultant depending upon the stage of project implementation.

30

• Gender Focal Point or NTDC female manager as member

• Representative of the Land Directorate as member

• Representative of the Legal Department as member

This GRC-HQ, through authorized representative, will acknowledge the complainant about his complaint, scrutinize the record of the GRC-P, investigate the remedies available and request the complainant to produce any record in favor of his claim. After thorough review and scrutiny of the available record on complaint, visit the field and collect additional information, if required. Once the investigations are completed, the GRC-HQ shall give decision within 21 days of receipt of the complaint. If the complainant is still dissatisfied with the decision, he can go to the court of law, if he/she wishes so

Gender representation will be ensured by inducting a female member in both GRCs. The mechanism will ensure the access of APs to a GRM that openly and transparently deals with the grievances and makes decision in consultation with all concerned that are consistent with Foreign Donor’s requirements and country safeguard system.

5. Grievance Redress Mechanism

The intention of GRM is to resolve a complaint as quickly and at as low a level as possible to avoid a minor issue becoming a significant grievance. Irrespective of the stage of the process, a Complainant has the option to pursue the grievance through the court as is his or her legal right in accordance with law. The details of the process are given below:

5.1 Grievance Redress Procedure

a. The grievance or complaint shall be addressed to the Convener of GRC-P/HQ with copy to DMD (AD&M). This can be launched in writing, through telephone or verbally at office. If the complaint is verbal, the office will arrange to convert verbal complaint in written form.;

b. A serial number will be assigned to it together with the date of receipt;

c. A written acknowledgement to a Complainant shall be sent promptly and in any case within not more than 3 working days. The acknowledgement shall contain:

i. The name and designation of the authorized representative (if the designated representative is in another office then the relevant address will also be included) who will deal with the grievance.

ii. Information that necessary action will be taken within the specified working days from the date of receipt of the grievance by the authorized representative concerned.

d. If the office receiving the grievance/complaint is not the one designated to consider and dispose it, the receiving office shall forward it to the designated office, but after having complied with the requirements at (b to c) above;

e. The GRC shall provide an opportunity of hearing to all the concerned parties and examine the relevant record before making the final decision;

f. The GRC or its representative designated to consider the matter shall make every effort to ensure that grievances/ appeals are considered and disposed off preferably within the stipulated period; and

g. The complete records of all activities shall be kept and filed into the grievance database maintained by the both GRCs. The GRCs shall also be responsible to compile records of the GRM and make quarterly reports to the Foreign Donor or any other concerned Authority.

5.2 Follow up/Closeout

The complaint shall be considered as disposed off and closed when:

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• The designated GRC has decided/disposed off the grievance/complaint;

• Where the Complainant has indicated acceptance of the response of the GRC in writing;

• Where the complainant has not responded to the Grievance Redress staff within one month of being intimated the final decision of the grievance officer on his grievance/complaint;

• Where the Complainant fails to attend the proceedings of the GRC within the stipulated period of the disposal of the complaint; and

• Where the Complainant withdraws his/her complaint.

5.3 Exclusions

The following allegations/complaints shall not be construed or taken up for consideration and disposal as ‘Grievances’:

• Anonymous complaints or frivolous cases in respect of which inadequate supporting details are provided;

• Cases involving decisions/policy matters in which the Complainant has not been affected directly/indirectly;

• Cases where quasi-judicial procedures are prescribed for deciding matters or cases that are subjudice;

• A grievance which has already been disposed off by GRC;

• Complaints of corruption should be lodged and dealt with separately.

5.4 Information Dissemination and Community Outreach

GRM will also develop an information dissemination system to inform the APs about their rights under the statute LAA, 1894, WB‟s policy and approved RAP for the project. The APs will be informed about the GRM, its functioning, complaint process.

5.5 Conclusion

This GRM is intended to be used for all World Bank, ADB and other foreign donor funded projects. It is intended that the GRM be reviewed if or when necessary to ensure that it can deal with a complex range of sub-projects in a manner that is appropriate and suits the social, cultural and legal situation in Pakistan.

32

Compliant & Grievance Form

Personal Details

Name: Date:

Address:

City: Phone:

Email Address:

Complaint Details

Receiving Mode: Previous Complaints:

Date ofIncident: Time ofIncident:

Location ofIncident:

Summary of theIncident:

Relief Sought:

For Internal Use

Initial Complaint To:

Case Assigned To:

Date Complaint Reviewed On:

Complainant Received By

33

Annexure – II: Letter to ADB from MD NTDCEnsuring Safeguards Compliance

34

Annexure – III: NTDC letter for stoppage work at ADB 105

35

Annex-IV: Status of Compensation Payment

Table 4.2: ADB 105: 500kV TL Faisalabad-Gatti – Phase-wise Status of Compensation Disbursement to DPs. Note: Contract ADB 105 covers only Faisalabad-Gatti TL section. It does not have multiple packages or lots.

Co

ns

tru

cti

on

Ph

as

e

Cate

go

ry o

f im

pa

ct

Qu

an

tity

a

ffe

cte

d

Pa

ya

ble

A

mo

un

t (P

KR

)

Am

ou

nt

Pa

id

(PK

R

Rem

ain

ing

A

mo

un

t (P

KR

)

To

tal

DP

s

(Mu

ltip

le

Pa

id D

Ps

Un

pa

id D

Ps

Rem

ark

s

Towers foundation work

Cropping Area 137.6acres and 83 trees

4,795,005 4,795,005 - 95 95 -

• All 95 DPs fully paid for foundation work and trees.

Sub-total (A) 137.67acres 4,795,005 4,795,005 - 95 95 - All 95 DPs fully paid for foundation phase impacts including trees.

Erection of towers

Cropping Area (Acres)

124.09 4,706,870 4,706,870 - 105 105 - • According to updated LARP provided by FMC and ESIC, total DPs of all three stages are 245. These include 95 affected by foundation work and 105 by erection and 140 by stringing work (245 is a multiple count).

• EMC confirms that payment of erection work has been made to all 105 DPs.

Total Trees - - - - - -

Allowances - - - - - - -

Others - - - - - - -

Sub-total (B) 124.09 acres

4,706,870 4,706,870 - 105 105 - All 105 DPs fully paid for erection work.

Stringing of wires

Cropping Area (Acres)

Not yet known

8,888,664 8,888,664 - 140 140 -

• All 140 DPs (including 5 vulnerable DPs) of stringing work are yet to be paid.

• While construction work has been suspended, they will be compensated before 31 July 2020. After validation of payment by EMC, construction work may resume.

Fruit Trees 33 55,308 55,308 - 18 18 -

Wood Trees 84 127,900 127,900 65 65 -

Vulnerability allowance to 5 DPs included 140 DPs of stringing.

- 262,5000 262,500 - 5 5 -

Others. - - - - - - -

Sub Total (C) 293.79 acres

9,334,372 93,334,372 - 228 228 - While amount of compensation for stringing work is yet to be paid to 140 DPs (including vulnerability allowance) and that NTDC will pay them before 31 March 2020. Construction is currently suspended but will resume after validation of payment to DPs by EMC.

Grand Total 555.55 acres

18,836,247 18,836,247 - 428 428 -

36

*These are same DPs who were affected by foundation work, erection work and stringing work on crop, trees and vulnerability, . Note: Contract package ADB 105R Faisalabad-Lalian TL section is yet to be awarded.

Table 4.3: ADB 106: 500kV TL Guddu – Muzaffargarh 74km TL Section from Tower Location 1-199– Phase-wise Status of Compensation Disbursement to DPs.

Co

ns

tru

cti

on

P

ha

se

Cate

go

ry o

f im

pac

t

Qu

an

tity

aff

ec

ted

Pa

ya

ble

Am

ou

nt

(PK

R)

Am

ou

nt

Pa

id (

PK

R

Rem

ain

ing

Am

ou

nt

(PK

R)

To

tal

DP

s

(m

ult

iple

co

un

t)

Pa

id D

Ps

Un

pa

id D

Ps

Rem

ark

s

Towers foundation work

Cropping Area 121.23 acres 4,445,693 4,445,693 - 166 166 -

• EMC confirms that payment of foundation work and trees have been paid to 166 DPs and 37 DPs respectively, as confirmed by ESIC and verified through compensation cheques.

Trees 116 423,800 423,800 - 37 37 -

Allowances - No provision of allowance is given in LARP

Sub-total (A) 121.23 acres

116 trees 4,869,493 4,869,493 - 203 203 - All 203 DPs fully paid for foundation phase and trees.

Erection of towers

Cropping Area (Acres)

141.19 6,164,826 6,164,826 - 257 257 -

• EMC confirms that payment of erection work for the loss of crop has been made to all 257 DPs. Total Trees - - - - - -

- - No provision of allowance is given in LARP

Sub-total (B) 141.19 6,164,826 6,164,826 - 257 257 - All 257 DPs fully paid for erection phase impacts

Stringing of wires

Cropping Area (Acres)

488.58 20,896,047 20,896,047 - 820 820 - • EMC confirms that payment of stringing work for the loss of crop has been made to all 820 DPs.

• EMC confirms that payment of stringing work for the loss of trees has been made to all 87 DPs.

Total Trees (No.)

235 860,751 860,751 - 87 87 -

- No provision of allowance is given in LARP

Sub Total (C) 488.58 acre 235 trees

21,756,798 21,756,798 - 907 907

• All 907 DPs fully paid for stringing phase impacts.

• All 1367 DPs fully paid for all three phases of construction/impacts. Grand Total

751 acres & 116 trees

32,791,117 32,791,117 - 1367 1367 -

37

Table 4.4: ADB 108 (Lot -1): 500kV TL Guddu – Muzaffargarh – Phase-wise Status of Compensation Disbursement to DPs.

Co

ns

tru

cti

on

P

ha

se

Cate

go

ry o

f im

pac

t

Qu

an

tity

aff

ec

ted

Pa

ya

ble

Am

ou

nt

(PK

R)

Am

ou

nt

Pa

id (

PK

R

Rem

ain

ing

Am

ou

nt

(PK

R)

To

tal

DP

s

Pa

id D

Ps

Un

pa

id D

Ps

Rem

ark

s

Towers foundation

work

Cropping Area 98.27 acres 1,548,172 1,548,172 - 60 60 -

• EMC confirms that payment of foundation work for the loss of crop has been made to all 60 DPs.

• EMC confirms that payment of foundation work for the loss of trees has been made to all 07 DPs.

Trees 22 59,000 59,000 - 07 07 -

Allowances - No provision of allowance is given in the LARP

Sub-total (A) 98.27 acres

22 Trees 1,607,172 1,607,172 - 67 67 - All 67 DPs fully paid for foundation phase impacts.

Erection of towers

Cropping Area (Acres)

138.90 2,356,440 2,356,440 - 89 89 -

• EMC confirms that payment of erection work for the loss of crop has been made to all 89 DPs.

• EMC confirms that payment of erection work for the loss of trees has been made to all 13 DPs.

Total Trees 43 90,300 90,300 - 13 13 -

Allowances - No provision of allowance is given in the LARP

Sub-total (B) 138.9 acres

43 Trees 2,446,740 2,446,746 - 102 102 - All 102 DPs fully paid for erection phase impacts

Stringing of wires

Cropping Area (Acres)

230.83 9,068, 273 9,068,273 - 355 355 - • EMC confirms that payment of stringing work for the loss of crop has been made to all 355 DPs.

• EMC confirms that payment of stringing work for the loss of trees has been made to all 52 DPs

Total Trees (NO.)

148 694,700 694,700 - 52 52 -

- - No provision of allowance is given in the LARP

38

Sub Total (C) 230.8 acres 148 Trees

9,762,973 9,762,973 - 407 407 - • All 407 DPs fully paid for stringing phase impacts

• All 576 DPs fully paid for all three phases of impacts

Grand Total (A+B+C) 468 acres 213 Trees

13,816,885 13,816,885 - 576 576 -

39

Table 4.5: ADB 108 (Lot -2): 500kV TL Guddu – Muzaffargarh – Phase-wise Status of Compensation Disbursement to DPs.

Co

ns

tru

cti

on

P

ha

se

Cate

go

ry

of

imp

ac

t

Qu

an

tity

a

ffe

cte

d

Pa

ya

ble

A

mo

un

t (P

KR

)

Am

ou

nt

Pa

id

(PK

R

Rem

ain

in

g

Am

ou

nt

To

tal

DP

s

Pa

id

DP

s

Un

pa

id

DP

s

Rem

ark

s

Towers foundation

work

Cropping Area

112.40 acres 1,358,522 1,358,522 - 55 55 - • EMC confirms that payment of foundation work for the loss of crop has been made to all 55 DPs.

• EMC confirms that payment of foundation work for the loss of trees has been made to all 08 DPs.

Trees 48 152,700 152,700 - 08 08 -

Allowances - No provision of allowance is given in the LARP

Sub-total (A) 112.4 acres

48 Trees 1,511,222 1,511,222 - 63 63 - All 63 DPs fully paid for foundation phase impacts.

Erection of towers

Cropping Area (Acres)

116.30 1,640,027 1,640,027 - 57 57 - • EMC confirms that payment of erection work for the loss of crop has been made to all 57 DPs.

• EMC confirms that payment of erection work for the loss of trees has been made to all 06 DPs

Total Trees 23 105,799 105,799 - 06 06 -

Allowances - No provision of allowance is given in the LARP

Sub-total (B) 116.3 acres

23 Trees 1,745,826 1,745,826 - 63 63 - All 63 DPs fully paid for erection phase impacts

Stringing of wires

Cropping Area (Acres)

182.30 4,095, 176 4,095,176 - 161 161 - • EMC confirms that payment of stringing work for the loss of crop has been made to all

161 DPs.

• EMC confirms that payment of stringing work for the loss of trees has been made to all 49 DPs

Total Trees (No.)

114 942,230 942,230 - 49 49 -

- - No provision of allowance is given in the LARP

Sub Total (C) 182.3 acres 114 Trees

5,037,406 5,037,406 - 210 210 -

• All 210 DPs fully paid for stringing phase impacts

• All 366 DPs fully paid for all three phases of impacts Grand Total (A+B+C)

411 acres/185

Trees 8,294,454 8,294,454 - 336 336 -

40

Annex-V: NTDC Replies on the comments on updated LARP of ADB-105

S.NO Comments on LARP NTDC Replies

1 Para 2,3, 19 and 30: Line route and profile drawings were approved in Oct-Nov 2018 and construction work started without updating the LARP and compensating DPs which is not in conformity with agreed safeguard requirements of the project loan, land acquisition and resettlement framework and draft land acquisition and resettlement plan (LARP) of 2016. Please share your feedback on this non-compliance?

The LARP could not be updated due to lack of coordination among PMU, PIU, ESIC, FMC and field staff of contractors and project director’s office, lack of understanding of contractors and PIU’s field staff about safeguard requirements of loan, LARF, LARP and contract award.

2

In the updated LARP of July 2020, NTDC provided multiple reasons for this safeguards noncompliance which included lack of coordination among PMU, PIU, ESIC, FMC and field staff of contractors and project director’s office, lack of understanding of contractors and PIU’s field staff about safeguard requirements of loan, LARF, LARP and contract award and lack of enabling environment such as SOP for compensation to DPs before construction startup and meaningful consultations with DPs at each stage of TL installation.

However, updated LARP does not provide any procedures to fix such noncompliance and prevent its reoccurrence. When the updated LARF and SOP will be ready for addressing the way forward regarding the safeguard compliance?

The Land Acquisition and Resettlement Framework (LARF) required for Tranche-3 of MFF-2 is prepared and under reviewed by ADB and not yet shared with NTDC.

The draft SOPs were shared with all funding agencies for review and feedback and provided feedback from ADB and World Bank is internally reviewed by NTDC. The final SOPs will ready by end of August 2020.

Table 1 indicates that number of DPs and total cropped area affected increased from 115 DPs and 467.3 acres to 245 DPs and 555.3 acres, which is a normal trend in all TL projects as estimated numbers tend to increase based on actual impacts during the construction work in the field.

Agreed

4 Legal and Policy Framework: Para 13 and 14 are somewhat repetitive.

Agreed

5 Institutional Arrangement: How ESIC supervises projects? Frequency of field visits per project in a year. How has FMC facilitated ESIC in implementation of LARPs. Any improvements due to FMC? If not why and what needs to be done to best utilize FMC and bring

Normally ESIC supervise the projects through field visits, on quarterly basis and through progress review meetings held at H/Q level.

FMC provides assistance through Revenue staff during assessment of

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about improvement in LARP implementation and monitoring?

damages and preparation of compensation payments at field level, while Social safeguard team monitor the implementation of LARP and provided information from field level are put in the Management Information System (MIS) to analyze the data.

6 Resettlement Budget and Financing:

Para 21 and 22 Do not specify who provides the budget and how is it made available to PIU and contractors for payments to DPs before construction. This mechanism has not been provided in the updated LARP but important to know to identify why payments to DPs are delayed and how timely payments can be ensured before construction to avoid noncompliance and delay in payments.

The estimated budget for land acquisition for Grid Stations is allocated in the PC-1. While for the Transmission line projects there is no allocation in the PC-1, but budget is provided in the contract agreement for payment of compensation.

7 Monitoring and Reporting:

Para 23-25 mentions internal and external monitoring system for LARP implementation. But due to data discrepancies, monitoring reports failed to present reliable data and issuance of reports which had been untimely. The improvements needed are being tried through streamlining the LAR database, which at the moment is under progress. When the database will be established?

Data base for the subprojects of TTranche-2 is being established.

8 Para 79-80 Gender Analysis and Mitigation Measures:

LARP promised jobs and skills training to women. A project level committee has been set up to address these issues. EMA to discuss this with NTDC and find out if a committee exists and whether any women got job or a skills training. If not ask why?

This type of activities will be done where the livelihood Restoration Plan has prepared and need assessment has done.

9 Para 80 Increase in number of DPs:

The reason provided for increase in number of DPs (from 115 to245) is (i) an increase in crops affected area under stringing by about 80 acres and this makes sense as stringing activity affects a larger area but (ii) distribution of compensation money among family members of a DP is something new that requires a transparent procedure for inclusion in LARF and

42

LARP. The procedure should clarify how members of a DP family can be treated as “DPs” without owning the affected crops and whether that is consistent with SPS’s definition of a DP?

10 Para 85 land under towers:

The land under tower footage is permanently affected but this is not recognized either in LARF or in updated LARP and thus no compensation provided (except in urban area). Compensation is provided only for the affected crops. During public consultations (table 4.3 serial # 4) people rightly demanded compensation for towers permanently installed in their land. However, this important feature of tower footage permanently affecting land is not recognized in the updated LARP but needs to be realized and addressed in accordance with SPS’s IR principles. Why under SPS, because Pakistan’s Telegraphic Act 1885 (amended 1975) does not take this impact into account for compensation.

11 Similarly, serial # 7 of table 4.3, people demanded compensation before construction, but this continues to be a major challenge as present procedures of NTDC does not allow advance payment but NTDC is yet to devise procedures for compensation before construction. Please share how NTDC is addressing this key compliance issue.

The SOPs has been prepared by NTDC and are being reviewed by stakeholders. Through final SOPs the issue will be addressed.

12 Para 111: Final LARP will be disclosed to women through meetings. Please share if this has been achieved by NTDC.

13 Para 126 Procedures for compensation before construction: In order to address the gaps in LAA 1894 and TA 1885/1975 Vs. SPS 2009, NTDC needs to adjust the mode of compensation by frontloading all payments for temporary impacts and entitlements before the start of construction activities and address/pay residual impacts through sectional handover procedure. However, draft SOP of NTDC and LARF is yet to draft the needed adjustments and procedures to ensure that compensation is provided to the DPs at full replacement costs for all direct and indirect losses before start of construction. Please the status of preparation of

This issue will be handled through SOPs.

43

the needed procedures and their inclusion in the SOP and LARF.

14 Para 128 Entitlements: All land-owning affected persons losing land or non-land assets, whether covered by legal title or customary land rights, whether for temporary or permanent

Acquisition. But land compensation is not provided to landowners for the land permanently affected under tower footage/foundation.Please share feedback?

Due to legal bindings NTDC can’t acquire the land but, the cost of land is covered under compensation payments.

15 Para 136. Management of resettlement budget: Compensation payments including crops, trees, and structures will be made by PIU through a contractor which sometimes causes delay in compensation payment to DPs. The contractor disburses the payments to DPs from his pocket and then claim compensation amount from NTDC in merged invoice of civil works and damages compensation, which delay the approval process. Contractor do not get payments on time which delay next stage of payments to the DPs. Updated LARF and project specific LARP needs to present clear procedures for funds management (PIU to Contractor to PIU) with timing and clear roles and responsibilities to ensure timely and advance payment of compensation to DPs (before construction) which at the moment is missing from the updated LARP.

The revenue staff of NTDC with the help of FMC makes the assessment of damages. The Assistant land acquisition collector will prepare the voucher.

The vouchers will be verified by the SDO than concerned XEN will counter signed.

The PD will issue the sanction order and send to Chief Engineer.

Chief Engineer will conduct pre-audit through Deputy Manager Corporate Account.

Chief Engineer will send the vouchers to PD for preparation of demand order.

PD will send the demand order to Chief Engineer.

Chief Engineer sends the demand order to General Manager and General Manager will sign the odder and send to Finance Director (F.D).

Finance Director will send the demand to concerned Bank for confirmation of funds availability and response to F.D.

F.D will get the approval from Managing Director through Deputy Managing Director and return the file to F.D.

F.D will transfer the funds to P.D and than PD will transfer the funds to concerned XEN.

44

XEN will issue the cheques to DPs.

In case of payments made by the contractor the approved voucher will be habded over to contractor for issuance of cheques. The contractor will issue the cheques to DPs and approve vouchers will get signed from the concerned DP.

In case if issuance of multiple cheques by the contractor the Bank verification is required for clearance of all due payments. Even if a single DP has not cashed the cheque the Bank will not issue the clearance to Contractor. Without clearance from Bank the contractor can’t submit the re-imburse invoice to NTDC.

This the whole procedure from assessment to payments.

16 Para 137: Procedure for payment to DPs through contractor and delays: Another reason of delay in payments to DPs is that NTDC’s code of conduct does not have a mechanism or provision for direct and advance payment to DPs. In order to avoid delay in payment to DPs by the contractor and reimbursement by NTDC to the contractor, NTDC needs to separate the compensation payment invoice from the civil works invoice and prepare approval process to avoid delays. Please share at which stage is the preparation of such procedures and when can these be available in approved SOP and updated LARF.

As above

17 Para 149 requires FMC to be part of GRM. How is this functioning in the field with any deficiencies and improvements needed.

18 Para 152 Safeguards Training: A detailed but customized safeguard management training is needed for a clear understanding of safeguard requirements, implementation, and monitoring. NTDC and FMC are already finalizing a safeguarding training that will bring clarity on safeguard requirements of turn-key contracts and procedures needed to ensure the right of way compensation before the start of construction and other safeguard requirements including sectional implementation and monitoring that are required to be fulfilled before

Training plan is shared with ADB for their comments. Training module will be prepared once topics are finalized from ADB.

45

construction work. Please share the status of training and analysis of training module whether it captures the causes of noncompliance and provides reliable procedures to prevent further noncompliance.

19 Para 162 LAR Coordination Committee: With the effective coordination of all concerned departments/ agencies, the assessment and valuation of losses will be carried out accordingly, payment of compensation will be made to eligible and entitled DPs. Timely payment to the DPs will ensure the smooth implementation of the project. This committee will be notified by the EA (PMUNTDC) to coordinate the updating and implementation of LARP and resolution of community/ DPs complaints & grievances. How effective has been this committee in addressing the coordination issues. When did the committee last met and what was discussed with issues and actions adopted for improvement?

20 Para 165 DPCs:Please share if any DPC meetings took place during LARP updating and during compensation disbursement.

DPC does not exist at ADB-105

21 Paras 179-188 Monitoring and Evaluation: Please share how NTDC is performing on monitoring indicators and find answers to all monitoring indicators (internal monitoring and external monitoring) and provide what is being implemented and what is not being implemented so well. What are the gaps or deficiency and what needs to be done to address them.