1. Enable Procurement Agencies to Fulfill their Roles Push Smooth Implementation of Project Procurement Foreign Debts Management Center, Hebei Provincial Department of Finance Sept. 6 2012

2. As instructed by ADB, we would like to share with you our practices and experiences from the following three aspects: As instructed by ADB, we would like to share with you our practices and experiences from the following three aspects: 1 An introduction to the loan projects managed by HPMO 2 Procurement agencies provide strong support to project procurement 3 Our practices and experiences

3. 1 An introduction to the loan projects managed by HPMO ◆ Established in 1998, HPMO is a division affiliated to Hebei Provincial Department of Finance with13 staffs, dedicating to the management of international financial institution funded projects. ◆ Established in 1998, HPMO is a division affiliated to Hebei Provincial Department of Finance with13 staffs, dedicating to the management of international financial institution funded projects. ◆ Up to date two projects have been successfully completed: World Bank funded Hebei Urban Environment project and ADB funded Hebei province wastewater management Project. And now ADB funded Hebei Small Cities and Towns Development Demonstration Sector Project is being implemented. ◆ Up to date two projects have been successfully completed: World Bank funded Hebei Urban Environment project and ADB funded Hebei province wastewater management Project. And now ADB funded Hebei Small Cities and Towns Development Demonstration Sector Project is being implemented. ◆ Above mentioned projects have a total loan amount of 330 million dollars involving urban infrastructures such as water supply, wastewater treatment, solid waste management, heating, etc.

4. 1 An introduction to the loan projects managed by HPMO ◆ ADB funded Hebei Small Cities and Towns project has 53 contracts including 1 consulting service contract, two grant contracts, which were all procured by our engaged PAs. Now 64% of contracts under the Project was awarded. ◆ ADB funded Hebei Small Cities and Towns project has 53 contracts including 1 consulting service contract, two grant contracts, which were all procured by our engaged PAs. Now 64% of contracts under the Project was awarded. ◆ Two PAs were engaged for the Project, which provided effective solutions to: - Numerous subprojects and heavy load of procurement - Numerous subprojects and heavy load of procurement - Tightened implementation schedule - Tightened implementation schedule - Experience sharing and knowledge complements between PAs - Experience sharing and knowledge complements between PAs ◆ Out of 18 subprojects: 7 Subprojects were completed, 5 got underway, much faster than other similar ADB funded projects across the country. ◆ Out of 18 subprojects: 7 Subprojects were completed, 5 got underway, much faster than other similar ADB funded projects across the country.

5. 2 Procurement agencies provide strong support to project procurement ◆ Procurement is one of the most vital aspects of project management ◆ Procurement under ADB funded project must abide by Procurement Guideline which is a set of complicated, rigid, standardized rules and procedures ◆ Per The Bidding Law of PRC: A tenderee shall have the right to choose, on his own, a PA and authorize it to carry out the tender, or may carry out the tender by itself on the condition that it has the capability of preparing tender documents and organizing bid evaluation. ◆ Practically, If a tenderee carries out the tender by itself for a project subject to tender according to law, on one hand it has to report to the relevant department for administrative supervision for the record, on other hand its tendering capacity shall be assessed by ADB during project preparation. It all takes lengthy time.

6. 2 Procurement agencies provide strong support to project procurement Moreover ， the advantages of engaging a PA are obvious : - Generally, PA has a profound knowledge and understanding about ADB’s procurement rules and procedures - Strong technical and professional capacity enable it to have a better control about the quality of bidding document and bid evaluation process - Adequate English proficiency - Provide timely and professional advice to IAs in dealing with complaints

7. 2 Procurement agencies provide strong support to project procurement Responsibilities of PAs: ◆ P roviding early stage advice, for instance, assistant in preparing procurement plan ◆ Preparation of prequalification documents and tendering documents in both Chinese and English except for technical parts ◆ Submission of Prequalification and bidding document report and bid evaluation Report ◆ Coordination of contract signing

8. 3 Our practices and experiences 3 Our practices and experiences The following measures are important to enable and facilitate PAs to fulfill their roles: Firstly, provide training with the help of PAs during project preparation and implementation. Secondly, r equire PAs to help EAs prepare procurement plan. Thirdly, support PAs in coordinating various parties involving in procurement Fourthly, require and support PAs to strictly follow the rules and procedures of ADB procurement guideline

9. 3 Our practices and experiences Our experiences in engaging PAs are as follows: Firstly, select and engage PAs as early as possible. Secondly, select and engage PAs in an open and competitive manner by following relevant government regulations and ADB guidelines. Thirdly, establish mutual supervision scheme. Fourthly, service agreement with clearly defined responsibilities and rights for both parties must be signed, and the payment for the service must be made on time.

10. Thank You! Thank You!