IMPROVING TRANSPARENCY AND ACCOUNTABILITY IN PUBLIC-PRIVATE PARTNERSHIPS DISCLOSURE DIAGNOSTIC REPORT: ISLAMIC REPUBLIC OF AFGHANISTAN © 2020 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. 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Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org Table of Contents ACRONYMS ...................................................................................................................................................................................... 2 LIST OF FIGURES ............................................................................................................................................................................ 3 LIST OF TABLES .............................................................................................................................................................................. 3 ACKNOWLEDGMENTS .................................................................................................................................................................. 4 EXECUTIVE SUMMARY ................................................................................................................................................................ 5 1. INTRODUCTION..................................................................................................................................................................... 9 2. TRANSPARENCY AND OPENNESS IN AFGHANISTAN ............................................................................................... 11 3. PPP EXPERIENCE IN AFGHANISTAN .............................................................................................................................. 16 4. LEGAL AND INSTITUTIONAL FRAMEWORK FOR PPPs.............................................................................................. 27 5. LEGAL AND POLICY FRAMEWORK FOR PPP DISCLOSURE ..................................................................................... 33 6. DISCLOSURE IN PRACTICE AND KEY CHALLENGES ................................................................................................ 40 7. GAP ASSESSMENT .............................................................................................................................................................. 44 8. RECOMMENDATIONS ........................................................................................................................................................ 47 9. KEY MATERIALS REVIEWED................................................................................................................................................. 49 ANNEX A: SUGGESTED AMENDMENT OF ARTICLE 24 OF PPP LAW 2018 ...................................................................... 50 ANNEX B: FRAMEWORK FOR PUBLIC-PRIVATE PARTNERSHIPS DISCLOSURE ........................................................... 52 ANNEX C: SUGGESTED TEMPLATE FOR DISCLOSURE ....................................................................................................... 58 ANNEX D: SAMPLE CONTRACTUAL PROVISIONS ............................................................................................................... 61 ANNEX E: COMPARISON OF THE WORLD BANK FRAMEWORK, CURRENT DISCLOSURE PRACTICE, AND AGREED FRAMEWORK FOR AFGHANISTAN ......................................................................................................................... 68 1 Acronyms ACAA Afghanistan Civil Aviation Authority AGEOPS Afghanistan Government Electronic and Open Procurement System CE Contracting Entity CPA Central Partnership Authority EOI Expression of Interest ESIA Environment and Social Impact Assessment GMAF Geneva Mutual Accountability Framework HEC High Economic Council ICT Information Communication Technology IPP Independent Power Producer MoCIT Ministry of Communications and Information Technology MoF Ministry of Finance NPA National Procurement Authority PPP Public-Private Partnership RFP Request for proposals RFQ Request for qualifications SPV Special purpose vehicle USP Unsolicited proposal VfM Value for money 2 List of Figures FIGURE 1: ONLINE PROCUREMENT TOOLS .................................................................................................................... 13 FIGURE 2: E-TENDERING DASHBOARD.......................................................................................................................... 15 FIGURE 3: PPP PROJECT CYCLE PROCESS ..................................................................................................................... 29 FIGURE 4: CENTRAL PARTNERSHIP AUTHORITY WEBSITE............................................................................................ 41 FIGURE 5: CENTRAL PARTNERSHIP AUTHORITY PROJECT PORTAL .............................................................................. 41 FIGURE 6: ELEMENTS OF THE WORLD BANK’S RECOMMENDED DISCLOSURE FRAMEWORK FOR PPPS ....................... 48 List of Tables TABLE ES.1: SNAPSHOT OF RECOMMENDED DISCLOSURE ............................................................................................. 7 TABLE 1: DISCLOSURE ENVIRONMENT IN AFGHANISTAN ............................................................................................... 9 TABLE 2: PROPOSED E-GOVERNMENT SERVICES IN AFGHANISTAN .............................................................................. 13 TABLE 3: PROJECTS CONSIDERED BY THE CPA FOR POTENTIAL INCLUSION IN THE PPP PROJECT PIPELINE (AS OF JULY 2020) ........................................................................................................................................ 19 TABLE 4: PPP LAW: KEY FEATURES............................................................................................................................. 27 TABLE 5: SUMMARY OF INSTITUTIONAL ROLES AND RESPONSIBILITIES ...................................................................... 31 TABLE 6: LEGAL FRAMEWORK FOR DISCLOSURE AND IMPLICATIONS FOR PPP DISCLOSURE ...................................... 35 TABLE 7: SCOPE OF DISCLOSURE IN SELECTED SOUTH ASIAN COUNTRIES .................................................................. 37 TABLE 8: GAP ASSESSMENT ......................................................................................................................................... 44 TABLE B.1: SUMMARY OF SPECIFIC DISCLOSURES ....................................................................................................... 55 3 Acknowledgments This Public-Private Partnerships (PPPs) Disclosure Diagnostic Report for Afghanistan has been prepared by a team consisting of Shyamala Shukla, Senior PPP Specialist, Infrastructure Finance, PPPs and Guarantees (IPG), World Bank Group, and Task Team Leader for the Global Project on Transparency and Accountability in Public-Private Partnerships; Suhail Kassim, Senior Private Sector Specialist; Adetoun Adetona, PPP Specialist (IPG); Andrew Jones, Senior PPP Consultant (IPG), Prashant Sharma, Senior Consultant (IPG) and Abimifoluwa Ajala, Consultant (IPG). Henry Kerali, Country Director, Afghanistan; Homa-Zahra Fotouhi, Country Manager, Afghanistan; Imad N. Fakhoury, Director (IPG); Fatouma Toure Ibrahima, Practice Manager (IPG); and Tobias Haque, Senior Economist, provided valuable guidance during the course of this work. The World Bank team thanks Sandra Gain (Consultant, IPG) for editing this document and Pablo Armando Alfaro Chavez (Consultant, IPG) for the cover, layout, and formatting. The World Bank team is grateful to the Central Partnership Authority (CPA) and the Ministry of Finance, Government of the Islamic Republic of Afghanistan, and several other ministries (as below) for providing valuable inputs and information in the implementation of this project. The team acknowledges the invaluable input provided by Talha Hidayat, Technical Director, CPA; Lema Khurram, Policy and Development Director, CPA; and other staff of the CPA. The team thanks the following individuals who provided excellent technical inputs during various meetings and stakeholder consultations: Afghanistan Chamber of Commerce and Industry: Sayed Zaman Hashemi Afghanistan Civil Aviation Authority: Qais Zahery, Amanzeb Ansari Afghanistan International Bank: Anthony Barned Audit Office: Mohammad Naim Haqmal, Fazel Hadi Fazel Central Partnership Authority: Talha Hidayat, Lema Khurram, Sayed Ahmed Mansoor Azizi CoST- The Infrastructure Transparency Initiative: Sebghatullah Karimi Da Afghanistan Breshna Sherkat: Mojtaba Hoshmand Investment Facilitation Unit, Administrative Office of the President: Atta Nasib Ministry of Energy and Water: Faridullah Sharafmal Ministry of Finance: Zarlasht Masoom Ministry of Industry and Commerce: Mahdi Mohammadi National Procurement Authority: Abdul Raoof Umary This is a joint product of the Government of the Islamic Republic of Afghanistan and the World Bank Group. Funding for this product was provided by Harakat - Afghanistan Investment Climate Facility and the Public-Private Infrastructure Advisory Facility. 4 Executive Summary In May 2016, the World Bank published a Framework for Disclosure of Information in Public-Private Partnerships (PPPs), which provides a template for the preparation of a PPP Disclosure Diagnostic that assesses the transparency and accountability of PPP programs based on the disclosure of information. Between March 2020 and October 2020, a joint Government of the Islamic Republic of Afghanistan and World Bank team conducted a study on PPP disclosure in Afghanistan, using the World Bank’s PPP Disclosure Diagnostic template. This study led to the preparation of a PPP Disclosure Diagnostic Report (hereinafter “Diagnostic Report”) for Afghanistan. The Diagnostic Report examines the political, legal, and institutional environment for the disclosure of information on PPPs in Afghanistan. Based on these findings, benchmarked against the World Bank’s disclosure framework, the Diagnostic Report provides a gap assessment of the environment for PPP disclosure in Afghanistan. It makes specific recommendations to improve disclosure, including recommended customized guidelines for PPP disclosure in Afghanistan. The findings suggest that there has been some movement toward greater transparency and openness in all areas of government in Afghanistan, but that there is still scope for further progress given that relevant legal reforms are relatively new and still to be fully institutionalized. Article 50 of the 2004 Constitution of Afghanistan ensures that citizens “have the right of access to information” from public institutions. This principle was enhanced substantially with the enactment of the Access to Information Law in 2014,1 which was subsequently revised in 2019.2 The law further guarantees access to information and aims to “ensure transparency, strengthen the culture of provision of information, promote people’s participation in good governance, ensure accountability in the conduct of institutions, and combat corr uption”. The legal and institutional frameworks for PPPs in Afghanistan are relatively recent, and these frameworks are still in the process of being institutionalized. Their impact on improving PPP disclosure is therefore not significant. Afghanistan’s PPP legislation was initiated in 2016 through the PPP Law,3 issued by Presidential Decree. The National PPP Policy was subsequently issued in 2017, 4 and the PPP Law was revised in 2018. Draft PPP Regulations have been prepared but are yet to be approved. Although these documents contain comprehensive guidance on most aspects of the PPP project cycle, there is limited information on disclosure. Despite references to a disclosure policy and an approach to confidentiality that reflects international best practices, there is limited practical guidance on the specific project information that should be disclosed or kept confidential. Moreover, given that the PPP program in Afghanistan is just beginning, contracting entities have limited PPP capacity and experience and no specific experience on PPP disclosure. The Public-Private Infrastructure Database5 indicates that seven PPP projects, with a total investment commitment of US$259.5 million, reached financial closure between 2003 and 2019 in Afghanistan. These include two telecom projects that date back to 2005 and 2006, prior to the enactment of PPP legislation. More recently, four energy generation projects have been developed since 2017 and there are approximately 150 additional 1 https://www.refworld.org/pdfid/5b165b2b4.pdf. 2 https://www.rti-rating.org/wp-content/uploads/2020/01/Afghan.RTI_.Decree.May18.Amend_.Oct19.pdf. 3 https://mof.gov.af/sites/default/files/2019-02/PPPLawOfficialEnglish263201710202518553325325.pdf. 4 http://mof.gov.af/Content/files/ApprovedPPPPolicyEng.pdf. 5 https://ppi.worldbank.org/. 5 projects at various stages of development in the PPP pipeline across the energy, transport, and health sectors. There is limited PPP-related information available in the public domain in Afghanistan. The Central Partnership Authority (CPA) recently launched a new website (not yet fully populated), there is some PPP- related information published on the Ministry of Finance website, and procurement information is published on the National Procurement Authority website. Further, sector-specific information related to energy generation projects is available through the website of Da Afghanistan Breshna Sherkat, the national power utility. In part, the lack of aggregated, organized information on the PPP program reflects the challenges to effective PPP disclosure identified in this report. These include limited disclosure guidance within the PPP legal framework, limited human and financial resources for records management and to collate PPP disclosure information (for example, to populate and run the CPA’s website), and lack of enforcement of sanctions for non-disclosure of information.6 Given these findings, it is necessary to develop a synergized framework and process for optimal PPP disclosure practices. This Diagnostic Report recommends a systematic structure for proactively disclosing information through customized guidelines for disclosure in PPPs in Afghanistan, including the type of project information to be disclosed, the form of disclosure, and the timelines and responsibilities for disclosure. The report suggests the use of predefined standards, tools, and mechanisms, to facilitate and encourage adherence to the disclosure framework in accordance with existing legislation. It provides recommendations to improve the 2018 PPP Law to strengthen disclosure-related clauses and guidance for further disclosure clauses in the PPP Regulations that are currently being drafted. The report also proposes standard contract clauses on disclosure that could be incorporated within future PPP contracts. The Government of the Islamic Republic of Afghanistan intends to use this framework as a tool to improve the transparency and accountability of its PPP program. Robust disclosure of PPP information can significantly improve PPP governance and performance and help the PPP program achieve better value for money. The implementation of the recommended disclosure framework supports the government’s objective of a sustainable PPP program. Recommended Disclosure Framework The recommended design for Afghanistan follows the World Bank’s standard disclosure framework but is subject to and intended to be implemented within the structure of Afghanistan’s legal system. It is hierarchical and includes a logical framework that moves from a high-level mandate to disclose toward the basic elements that need to be disclosed as part of the preparation and implementation of PPP projects. Table ES.1 provides a snapshot of the recommended features of the suggested guidelines for Afghanistan. 6 https://www.amnesty.org/en/latest/news/2020/02/afghanistan-implement-access-to-information-law/. 6 TABLE ES.1: SNAPSHOT OF RECOMMENDED DISCLOSURE AREA DESCRIPTION Application of disclosure guidelines to strengthen the regulatory mandate, including recommendations on legislative amendments to the PPP Act 2018 to enhance disclosure. Specifically, expand the legislative mandate as follows to LEGISLATIVE provide greater force and stability and for more effective implementation of the MANDATE PPP Law: (i) introduce clauses that provide a clear, proactive disclosure mandate for PPPs; (ii) introduce time bound obligations for proactive disclosure; and (iii) widen the legislative mandate of the Supreme Audit Office to include performance audits of PPPs. Applicability of legislation to contracts and project information Elements of disclosure during the various phases of the PPP project process Timelines for disclosure DETAILED GUIDANCE Details of confidentiality provisions Template for disclosure Standard contract clauses DISCLOSURE Basic project information DURING PROJECT Project progress tracker IDENTIFICATION Pre-feasibility study AND PREPARATION Pre-tender: Brief description of the project, services, estimated investment value, DISCLOSURE likely sources of revenue, and tentative procurement dates DURING Tender: request for qualifications, shortlisted bidders, request for proposals, PROCUREMENT feasibility study, and award Basic project information Project summary Reasons for choice of PPP DISCLOSURE Financing structure FOLLOWING Guarantees, grants, annuity and availability payment schedule, land and asset CONTRACT SIGNING transfers, other support, and revenue share AND CONTRACT Tariffs MANAGEMENT Actual performance against targets, performance failures, links to independent engineer, audit, and special purpose vehicle reports Termination and handback provisions Renegotiations or changes Areas or elements that could be considered confidential (subject to overarching CONFIDENTIAL law and project-specific circumstances), where the competitiveness of the private INFORMATION provider may be jeopardized Exceptions and exemptions to the confidentiality clause Records, documents, and other information the private provider should maintain STANDARD and submit to the contracting authority; timelines for submission and disclosure. CONTRACT Language on what constitutes confidential information, format for listing PROVISIONS confidential information, and clause for disclosure of confidential information in public interest A single platform with a user-friendly, integrated back end for use by multiple entities, with a hierarchy of roles related to uploading, validation, and disclosure of PLATFORM information; and a user-friendly front end, with structured content and regular updates to registered users 7 Basic project information Within 10 working days of approval of concept Project milestones Upon each status change Procurement documents Request for Qualifications Immediately after approval List of short-listed bidders Immediately after shortlist Bid award Immediately after approval Full request for proposals Upon close of bid submissions Disclosure of other documents Feasibility study Report Upon award Value-for-money analysis report Upon approval Project summary (including basic project information, parties to the PPP contract, amount and type of government support provided to TIMELINES the project, project value, tariffs, Within 10 working days of signature of contract and pricing, termination clauses, (commercial close) handback provisions, key performance indicators with agreed target levels, duration of project, and implementation structure (SPV and any subcontractors) Financial information Within 10 working days of financial close All nonconfidential project documents within 10 Project documents (including VfM working days of contract signing (after redaction of report for the project) confidential information). Within 10 working days of the signature of the Renegotiations renegotiated agreement. Where execution of the project agreement (commercial close) Within 10 working days of decision takes place but the project does not reach financial close Within one year of financial close, updated Performance information Annually. A simple template with details of elements to be disclosed at various project phases TEMPLATE AND Consistent, structured, machine-readable, and exploitable information DATA STANDARDS Disclosure of information and data should be compliant with the Open Contracting Data Standard. Note: PPP = Public-Private Partnership; SPV = Special Purpose Vehicle; VfM = Value for Money. 8 1. Introduction Based on research and analysis over recent years, the World Bank Infrastructure, Public-Private Partnerships and Guarantees Group has created a Framework for Disclosure in Public-Private Partnerships (the “Framework”),7 which suggests a systematic structure for disclosing information proactively at different phases of the PPP process. To complement the Framework and provide further background, guidance, and resources, two documents have been developed: Jurisdictional Studies8 and Good Practice Cases.9 The Framework has undergone a public consultation process and been implemented in several countries, including Ghana, Honduras, Kenya, Nigeria, Tanzania, and Uganda. The Framework recommends the initiation of work with this Diagnostic Report. The objective of the Diagnostic Report is to help public-private partnership (PPP) policy makers and practitioners assess the status of PPP disclosure in the relevant jurisdiction and identify customized PPP disclosure solutions to enable better disclosure. The Diagnostic includes an examination of the following areas: • Preliminary overview of the general transparency environment • History and outlook for PPP disclosure • Political environment for disclosure • Legal and policy framework • Process and institutions • Guidance on confidential information • Information systems • Technology and data standards The Diagnostic Report lays out key questions and provides analysis and techniques for assessing gaps, resources for learning more, and tools for establishing a customized PPP disclosure framework and guidelines for the jurisdiction. The relevance of each of the areas varies based on country context. This Diagnostic Report is structured around the key themes that are relevant to Afghanistan’s disclosure environment, as summarized in table 1. TABLE 1: DISCLOSURE ENVIRONMENT IN AFGHANISTAN THEME KEY QUESTIONS SECTION TRANSPARENCY AND Is there a transparent and open governance environment 2 OPENNESS IN GOVERNANCE in Afghanistan? Does the government have substantial experience in PPP EXPERIENCE PPPs? 3 Does the government have an ongoing PPP program? 7 http://pubdocs.worldbank.org/en/143671469558797229/FrameworkPPPDisclosure-071416.pdf. 8 http://pubdocs.worldbank.org/en/910311448299077946/Disclosure-in-PPPs-Jurisdictional-Studies.pdf. 9 http://pubdocs.worldbank.org/en/610581448292161621/Disclosure-in-PPPs.pdf. 9 LEGAL AND INSTITUTIONAL What are the institutions supporting the preparation, 4 ENVIRONMENT FOR PPPS procurement, and implementation of PPPs? Is the legal and regulatory environment sufficiently conducive to PPP disclosure? Is there right to information legislation that supports proactive disclosure? Do PPP legislation/regulations provide clarity on the elements, timing, institutional structure, and processes for disclosure? LEGAL AND INSTITUTIONAL Do other related legislation and regulations support FRAMEWORK FOR PPP disclosure? 5 DISCLOSURE Are there guidelines and processes in place to guide disclosure? Are there standardized disclosure contract clauses and templates? Is there a web portal(s) available with a user-friendly backend and frontend design in machine-readable format, and compliant with the Open Contracting Data Standard? DISCLOSURE IN PRACTICE What information is disclosed in practice? 6 AND KEY CHALLENGES What are the key challenges to disclosure? Note: PPP = Public-Private Partnership. Based on the findings in sections 2 to 6, section 7 assesses the gaps in the political, legislative, and institutional contexts for disclosure, and section 8 provides recommendations on how to address these gaps in Afghanistan. Annex A provides suggested amendments to the PPP legal framework. Annex B provides suggested text for the Disclosure Framework for PPPs in Afghanistan. Annexes C and D contain a template for disclosure and suggested standard contractual clauses, respectively. Annex E presents a comparison of the World Bank’s Framework for Disclosure, current disclosure practice in Afghanistan, and the proposed disclosure guidelines for Afghanistan. 10 2. Transparency and Openness in Afghanistan 2.1 Overview Access to information is a constitutional right for Afghan citizens, guaranteed under Article 50 of the 2004 Constitution of Afghanistan. The Constitution ensures that citizens “have the right of access to information” from public institutions unless access to information is harmful to others’ rights or risks public security. This constitutional right to access to information was strengthened with strong enabling legislation through the enactment of the Access to Information Law in 2014, which was subsequently revised in 2019 and is ranked as the strongest access to information law in the world by the Global Right to Information Rating.10 The law guarantees access to information for all natural and legal persons and aims to “ensure transparency, strengthen the culture of provision of information, promote people’s participation in good governance, ensure accountability in the conduct of institutions, and combat corruption”. It also aligns Afghanistan with Article 19 of the International Covenant on Civil and Political Rights. The Access to Information Law is supported by the Afghan National Access to Information Strategy 2017-2020,11 prepared by the Access to Information Oversight Committee established under the Access to Information Law (the Committee was modified to become the Access to Information Commission based on the 2019 revision of the law). The strategy identifies three areas to support the implementation of the law, cultivate demand, and build capacity for citizens to exercise their right to information: • Advocacy: encourage the Government of the Islamic Republic of Afghanistan to adopt primary amendments to the law and secondary implementing regulations to strengthen the legal framework for access to information in Afghanistan. • Awareness raising: raise general public awareness about the right to information and how rightsholders can make requests for information that would be useful for them. • Capacity development: provide training programs for key government decision makers and civil society actors to cultivate public demand for information, make effective use of the law, and build the knowledge and skills of public officials on their obligations under the law. In addition to the Access to Information Law, several other laws apply principles of transparency and accountability to governance. The Public Finance and Expenditure Management Law (2005) provides for transparent organization of government financial affairs, protection of public assets, preparation of the national budget, and management of public expenditure. The Supreme Audit Office Law (2013) establishes the powers and functions of the Supreme Audit Office to conduct external audits on all government revenues and expenditures, to ensure transparency in the implementation of the national budget and collection of revenues to support the economic efficiency of public expenditures. The Procurement Law (2017)12 was revised to increase transparency and value for money in the government’s procurement of goods, services, and construction works. Anti-corruption efforts in Afghanistan have been further strengthened by the publication of the Afghanistan National Strategy for Combatting Corruption (2017) and enactment of the Anti-Corruption Law (2018). Finally, the PPP Law (2018) includes a chapter on accountability and transparency as key governance principles for the procurement and implementation of PPPs in Afghanistan. 10 https://www.rti-rating.org/country-data/Afghanistan/. 11 https://aic.gov.af/sites/default/files/2019-11/OCAI__National%20Strategy%20on%20ATI__English__web.pdf. 12 http://cms.npa.gov.af/files/Documents/ProcurementLaw/1512889031-1.pdf. 11 In addition, Afghanistan has ratified several international instruments that promote the right of access to information, such as the Universal Declaration of Human Rights, the International Convention on Civil and Political Rights, and the United Nations Convention against Corruption. Afghanistan also became a member of the Open Government Partnership in 2017.13 2.2 Transparency, Corruption, and Rule of Law Ratings Despite the strength of the Access to Information Law and other complementary legislation, Afghanistan performs poorly across broad measures of a country’s transparency, corruption, and rule of law. Afghanistan was placed 122 of 128 countries assessed (the lowest in South Asia) on the World Justice Project’s 2020 Rule of Law Index,14 a general societal and business freedom analysis reflecting accountability, respect for fundamental rights, access to justice, and similar aspects. Afghanistan’s low ranking was mainly driven by the impact of four decades of war, lack of order and security, weak regulatory enforcement, and access to civil and criminal justice. Corruption also remains high. Afghanistan was ranked 173 of 180 countries in Transparency International’s 2019 Corruption Perceptions Index, 15 with a score of 16 out of 100. 2.3 Open Data and e-Government Initiatives The Government of the Islamic Republic of Afghanistan has made significant progress in addressing some of the issues that have negatively impacted the country’s performance in the above-mentioned ranking indexes. In particular, the government has focused on increasing access to information and improving service delivery through information technology. The Ministry of Communications and Information Technology (MoCIT) has a mandate to provide high-quality communications, information technology, and postal services to Afghan citizens and connect citizens to knowledge and resources that enable them to improve the quality of their lives. MoCIT’s vision is to “transform Afghanistan into an information society”.16 One of MoCIT’s core initiatives has been the development of e-government systems. An e-Government Strategy was drafted in 2011,17 providing a long-term vision to support “quality public services delivered equitably by a trusted government to an empowered citizenry” . To facilitate implementation of the e-government initiatives, an E-Government Directorate was established within MoCIT in 2013. The directorate’s mandate includes making access to information more convenient, consistent, and reliable, including through the modernization of government websites and development of mobile applications across several sectors, such as health, finance, agriculture, and education. Subsequently an e-Government Services Plan was prepared in 2016,18 with support from the U.S. Agency for International Development (USAID), that outlines 10 priority e-government services to be rolled out over a planned three-year period (table 2). 13 https://www.opengovpartnership.org/members/afghanistan/. 14 https://worldjusticeproject.org/sites/default/files/documents/WJP-ROLI-2020-Online_0.pdf. 15 https://www.transparency.org/en/cpi/2019/results/afg. 16 https://mcit.gov.af/node/6949. 17 https://mcit.gov.af/sites/default/files/2018-12/EGOV%20AF%20- %20Electronic%20Government%20%20Strategy%20in%20Afghanistan.pdf. 18 https://mcit.gov.af/sites/default/files/2018-12/E-Government%20Services%20Plan_Final_April%202016.pdf. 12 TABLE 2: PROPOSED E-GOVERNMENT SERVICES IN AFGHANISTAN PROPOSED SERVICE DESCRIPTION e-Jobs Single, unified repository to select and apply for government employment opportunities e-Procurement Single point of access for all public procurement information e-Voice Service to enable citizens to report, read about, or discuss problems with local and central government entities e-Library Online portal for the collections managed the National Library of Afghanistan and other libraries affiliated with government ministries e-Prescriptions Service to enable paperless, accurate, and hassle-free prescriptions e-Vaccinations Service to help citizens to keep their inoculations up to date e-Payments Service for payment of national or local government fees and taxes e-Births Service to provide official registration and certification of the births of Afghan citizens e-Marketplace Service to stimulate agriculture and related economic activities e-Hajj Service to allow citizens to register and apply online for Hajj pilgrimage Implementation of the e-Government Services Plan had an ambitious timeline of completion within three years, and it is still ongoing. On PPPs and disclosure, the most important proposed service relates to e- procurement. In 2018, the National Procurement Authority (NPA) launched the Afghanistan Government Electronic and Open Procurement System (AGEOPS) with the aim of streamlining and easing the procurement process. AGEOPS includes various procurement tools and publishes procurement plans six months ahead of tenders. Since the establishment of AGEOPS, the NPA has developed several online procurement tools, including the Afghanistan Contract Progress and Monitoring System, Afghanistan Vendor Registration and Classification System, and Afghanistan Procurement Plan Management System. Access to these tools is publicly available on the AGEOPS website,19 as shown in figure 1. FIGURE 1: ONLINE PROCUREMENT TOOLS 19 https://ageops.net/en/home/bi. 13 In January 2020, Afghanistan’s Independent Joint Anti-Corruption Monitoring and Evaluation Committee prepared a ministry-wide assessment of vulnerability to corruption in public procurement in Afghanistan.20 This was the first comprehensive analysis of the corruption vulnerabilities in the Afghan public procurement system. The assessment focused on four areas: (i) legal, regulatory, and policy framework; (ii) organizational capacity building and public procurement; (iii) procurement processing and operations; and (iv) transparency and openness in procurement. The assessment found that transparency in public procurement in Afghanistan is currently hindered by several factors that are relevant to PPP disclosure, including poor recordkeeping and file management, lack of enforcement of sanctions on corrupt officials, and lack of clarity on the process of appeals, dispute resolution, and debarment. The tenure of the Monitoring and Evaluation Committee Members expired in March 2020, and new members are yet to be appointed.21 The Monitoring and Evaluation Committee assessment highlighted the lack of e-tendering capability in Afghanistan. In July 2020, addressing this concern, the NPA inaugurated its online e-Tendering system via AGEOPS.22 This system forms part of the Government of the Islamic Republic of Afghanistan’s commitments under the Geneva Mutual Accountability Framework23. At the launch ceremony, Alham Omar Hotaki, the chief executive officer of the NPA, noted that the new online system was designed to “accelerate the procurement process and make the system as transparent as possible” . The system also enables the public to view the procurement process at any time. The first procurement project launched under the e-Tendering system was for the construction of a bridge in Takhar province, under the remit of the Ministry of Rural Rehabilitation and Development.24 Following the pilot phase, it is expected that public procurements for all public institutions will be implemented via the e-Tendering system, including PPPs. The e-Tendering dashboard is shown in figure 2. Users can filter searches for public procurements by procurement type, project status, procurement entity, and province/location. 20 Ministry-Wide Vulnerability to Corruption Assessment of Public Procurement, Independent Joint Anti-Corruption Monitoring and Evaluation Committee, January 2020. 21 https://mec.af/about-us-2/. 22 https://tenders.ageops.net/en/procurement-process. 23 The Geneva Mutual Accountability Framework (GMAF) was agreed following the outcome of the Geneva Conference in November 2018, co-hosted by the Government of the Islamic Republic of Afghanistan and the United Nations. The GMAF outlines measurable reform objectives and commitments for the Government of Afghanistan and the international community for 2019-2020. 24 Information taken from the minutes of the 218th National Procurement Commission Meeting, July 20, 2020. 14 FIGURE 2: E-TENDERING DASHBOARD Detailed project information is included within the e-Tendering system, allowing users to view bidding information, track the progress of the procurement process, and access bid documents. However, for PPP procurement information, there is no separate PPP procurement section on the NPA or AGEOPS websites, and users cannot specifically search for or filter PPP procurement opportunities as a separate procurement type. 15 3. PPP Experience in Afghanistan 3.1 Overview The Public-Private Infrastructure Database indicates that seven PPP projects, with a total investment commitment of US$259.5 million, reached financial closure between 2003 and 2019 in Afghanistan. These projects were all in the energy and information and communications technology (ICT) sectors. The projects were all initiated prior to the enactment of the initial PPP Law in 2016 (subsequently revised in 2018), although the energy generation projects that were initiated just prior to the PPP Law have followed most aspects of the PPP Law. Following its establishment in 2016, the Central Partnership Authority (CPA) has taken responsibility for managing the PPP project pipeline. Almost 150 projects are currently in the pipeline at various stages of development across a variety of sectors, including energy, transport, water, agriculture, urban development, health, and education. As outlined in Afghanistan’s National Policy on PPPs, it is the policy of the government “to use PPPs as an alternative funding method in addition to the national budget to expand efficient service delivery and physical infrastructure at the national level for: • Attracting and utilizing private sector business expertise; • Effective use of public properties and assets; • Reducing reliance on foreign aid, and • Effective use of existing capital in the private sector and banks”.25 This policy is in line with commitments made by the Government of the Islamic Republic of Afghanistan under the “Self-Reliance through Mutual Accountability Framework” implemented with the international donor community in September 2015. These commitments include (among others) the development of PPP regulations and the preparation of an infrastructure development plan, which were met via the enactment of the PPP Law and the preparation of the National Infrastructure Plan 2017-2021.26 The government is building PPP capacity and developing a more systematized process for sector investment planning through integration of the public investment management and PPP processes. In recent years, several donors have supported the development of the PPP legislation, establishment/operationalization of the CPA, and development and preparation of PPP projects. In particular, the World Bank, the UK Department for International Development (DFID) (via Harakat), and the International Monetary Fund have supported the drafting of PPP legislation, and the World Bank Group, DFID, USAID, and other bilateral agencies have supported the preparation of PPP projects. This support has included the provision of subsidy grants (for example, USAID for the 2017 Kandahar Solar Project), financing (for example, the International Finance Corporation for the Mazar independent power producer (IPP) project), and guarantees (for example, the World Bank and the Multilateral Investment Guarantee Agency for the Mazar IPP project). The World Bank is also providing support for the development of a pipeline of PPP and traditional public procurement projects through the PPPs and Public Investment Advisory Project, which includes funding for feasibility studies. 25 http://mof.gov.af/Content/files/ApprovedPPPPolicyEng.pdf. 26 http://policymof.gov.af/home/wp-content/uploads/2019/01/Natioal-Infrastructure-NPP.pdf. 16 The following subsections provide brief descriptions of the current situation and past PPP experience across core infrastructure sectors in Afghanistan. 3.2 Energy Sector The energy sector is a priority sector for the Government of the Islamic Republic of Afghanistan given limited access to electricity in the country. Afghanistan currently imports around two-thirds of its total electricity from neighboring countries—Uzbekistan (450 megawatts (MW)), Tajikistan (450 MW), the Islamic Republic of Iran (164 MW), and Turkmenistan (110 MW). Increasing domestic generation capacity is therefore a priority for the Government of the Islamic Republic of Afghanistan to increase energy security as well as access for underserved provinces. Although demand is steadily increasing, 11 provinces still do not have access to electricity. The Government of the Islamic Republic of Afghanistan has made significant progress in developing PPPs in the energy sector in recent years. With the support of USAID, the 10 MW Kandahar Solar Project reached financial close in 2017 following a competitive tender, which will be the first privately built and operated power plant of this capacity in the country. The government has directly negotiated a number of additional energy generation projects, including the Mazar IPP (gas-to-power, 50 MW), Sheberghan IPP (gas-to- power, 40 MW), and a second Kandahar Solar Project (15 MW). These projects will help to ensure a sustainable energy generation source for Afghan citizens and generate tax revenues through domestic electricity and gas sales. They will also provide the government practical PPP experience and demonstrate to other investors that there is a track record for the success of PPP projects in Afghanistan. However, the initiation of all these projects preceded the enactment of the PPP Law; therefore, they were not developed according to all the processes within the PPP Law. Nevertheless, once it was established, the CPA provided technical support to facilitate the financial close of each project. There are several additional energy projects in the PPP pipeline that are progressing under the PPP Law. 3.3 Transport The legacy of conflict in Afghanistan has obliterated the country’s transport infrastructure. To restore the infrastructure and institutions, the Government of the Islamic Republic of Afghanistan and its development partners have invested more than US$4.5 billion in improving the sector since 2002. The transport sector is a significant contributor to competitiveness and economic growth and is essential for a dynamic business environment and expanding relations with neighboring countries. It is therefore a priority for the government to establish a safe and integrated transport network that ensures connectivity; reliable, low-cost movement of people; and efficient trade logistics (given that Afghanistan is landlocked). To date, no PPP projects in the transport sector have closed, but there is a strong pipeline, particularly in the aviation subsector. The country’s airports are all operated by the Afghanistan Civil Aviation Authority (ACAA), and the ACAA has ambitious plans to increase passenger and cargo capacity at the Hamid Karzai International Airport in Kabul. These plans include a new, larger international passenger terminal; a new airport hotel; cargo facilities; and an aircraft maintenance, repair, and overhaul facility. Outside the aviation sector, there are potential PPP opportunities in the roads sector, although there is no history of formal road tolling in Afghanistan and no tolling policy. Nevertheless, PPP opportunities include the construction of 17 new infrastructure assets (such as the Kabul Ring Road) and operation and maintenance of existing assets (such as the Salang Tunnel). 3.4 Water Afghanistan has limited infrastructure for access to water and sanitation. In Kabul, 80 percent of the population lacks access to safe drinking water and 95 percent does not have access to adequate, equitable, and safely managed sanitation facilities. Roughly three-quarters of the Afghan population live in rural areas where decades of chronic wartime violence have exacerbated the lack of basic infrastructure and service provision for water supply, sanitation, and hygiene. There has been significant donor investment in the sector to address unmet needs and improve the provision of services. This has included a joint USAID and United Nations Children’s Fund Rural Water, Sanitation, and Hygiene project, a US$30 million joint initiative that was launched in 2016, that has provided access to access basic drinking water services for more than 240,000 Afghans. To date, no PPP projects in the water sector have closed, but there are opportunities for PPPs to implement water supply, water distribution, and wastewater treatment, as well as water loss reduction projects in the country. 3.5 Information and Communications Technology The ICT sector has the potential to become a sustainable source of high growth for Afghanistan. The country has relatively up-to-date telecommunications infrastructure to provide internet access and connectivity, although continual updates in ICT technology, such as fiber optics, will require infrastructure updates to ensure that Afghanistan can fully benefit from these new technologies. A necessary step to take at this stage is to develop a pragmatic strategy to establish a national software and hardware development ecosystem, which will potentially generate direct and indirect employment and support the economy’s competitiveness. Development of the sector is also likely to increase the capacity of advanced skills among the population and redirect new sources of tax revenues for the government toward strengthening the country. The private sector can play a core role in providing the sector’s technology needs. Afghanistan has had prior positive PPP experience within the ICT sector, as demonstrated by the contracts awarded to Afghan Wireless, Roshan, and Etisalat. The contracts were competitively tendered and monitored by the regulatory authority and have produced more than US$2 billion in private investment over the life of the contracts, while at the same time lowering tariffs by 95 percent since 2002. Over 75 percent of the population can now subscribe to mobile services, with subscriptions increasing to more than 20 million, compared with fewer than 60,000 a few years ago. 3.6 Project Pipeline The CPA manages Afghanistan’s PPP pipeline through close coordina tion with line ministries, which remain the contracting entities for PPP projects. Table 3 provides information on the CPA’s current PPP pipeline, as of July 2020. 18 TABLE 3: PROJECTS CONSIDERED BY THE CPA FOR POTENTIAL INCLUSION IN THE PPP PROJECT PIPELINE (AS OF JULY 2020) ESTIMATED CONTRACTING PROJECT PROJECT NO. PROJECT NAME SECTOR ENTITY COST (US$, STATUS MILLIONS) 1 Special Economic Afghanistan Civil Transport 88 Feasibility Zone Aviation study Authority stage 2 O&M Contract Afghanistan Civil Transport No Concept Aviation information note stage Authority 3 Hamid Karzai Afghanistan Civil Transport 309 Feasibility International Airport Aviation study New Terminal Authority stage 4 Hamid Karzai Afghanistan Civil Transport 60.6 Feasibility International Airport Aviation study Cargo Operation Authority stage 5 Hamid Karzai Afghanistan Civil Transport No Concept International Airport Aviation information note stage Hotel Authority 6 Hamid Karzai Afghanistan Civil Transport No Concept International Airport Aviation information note stage Fuel Lease Authority 7 Hamid Karzai Afghanistan Civil Transport 8 Concept International Airport Aviation note stage Utilities Authority 8 Sheberghan Airport Afghanistan Civil Transport 15 Concept Runway Upgrade Aviation note stage Authority 9 Zabul Airport Runway Afghanistan Civil Transport 7.5 Concept Upgrade Aviation note stage Authority 10 Airplane Afghanistan Civil Transport 27 Concept Technical/Maintenance Aviation note stage Equipment Authority 11 Construction Material Afghanistan Urban 25 Concept Testing Laboratory National Development note stage Standards Authority 12 Kabul Districts 12 and Afghanistan Water 54.48 Concept 22 Water Supply Water Supply note stage and Sewerage Corporation 13 Maidan Shahar Central Office Urban 10 Concept Industrial Park for Capital Zone Development note stage Development 14 Sarobi Industrial and Central Office Urban 25 Concept Economic Park for Capital Zone Development note stage Development 15 Reconstruction of Central Office Urban 13.9 Concept Qala-Khatir, Bebe for Capital Zone Development note stage Mahro, and Qala-e- Development Musa 16 110 kv Transmission Da Afghanistan Energy 20 Concept Line from Chamtala to Breshna Sherkat note stage Industrial Parks 17 100 MW Capacity Da Afghanistan Energy 10 Concept Substation Breshna Sherkat note stage 18 Baghlan Exchange Da Afghanistan Energy 240 Concept Station Breshna Sherkat note stage 19 ESTIMATED CONTRACTING PROJECT PROJECT NO. PROJECT NAME SECTOR ENTITY COST (US$, STATUS MILLIONS) 19 20 MW Capacity Da Afghanistan Energy 44 Concept Substation for Naghlu Breshna Sherkat note stage Hydro 20 220 kv Transmission Da Afghanistan Energy 60 Concept Line from Arghandi to Breshna Sherkat note stage Jalalabad 21 Street Parking Kabul Urban 4.5 Feasibility Municipality Development study stage 22 Bus Stops Kabul Transport 1.2 Feasibility Municipality study stage 23 Kabul Solid Waste Kabul Solid Waste 23 Feasibility Management and Municipality study Waste Collection stage 24 Qargha Park Kabul Urban No Concept Municipality Development information note stage 25 Share Naw Park Kabul Urban 9.6 Concept Municipality Development note stage 26 Dry Fruit Complex Kabul Agriculture 2 Concept Municipality note stage 27 Waste to Energy Kabul Solid No Concept Municipality Waste/Energy information note stage 28 Samangan Trade Independent Urban 2.4 Concept Center Directorate of Development note stage Local Governance 29 Cold Storage Facility Ministry of Agriculture 5 Concept Agriculture, note stage Irrigation, and Livestock 30 4 Agricultural Markets Ministry of Agriculture 35 Concept Agriculture, note stage Irrigation, and Livestock 31 Agriculture Industrial Ministry of Agriculture 25 Concept Parks in 7 Provinces Agriculture, note stage Irrigation, and Livestock 32 Karizmir and 8 Cold Ministry of Agriculture 28 Feasibility Storage Facilities Agriculture, study Irrigation, and stage Livestock 33 Nangarhar Canal Ministry of Agriculture 10 Concept Agriculture, note stage Irrigation, and Livestock 34 Nangarhar Dairy Ministry of Agriculture No Concept Products Agriculture, information note stage Irrigation, and Livestock 35 5 Slaughterhouses Ministry of Agriculture 30 Feasibility Agriculture, study Irrigation, and stage Livestock 36 Agriculture farm Ministry of Agriculture 0.5 Concept Agriculture, note stage Irrigation, and Livestock 20 ESTIMATED CONTRACTING PROJECT PROJECT NO. PROJECT NAME SECTOR ENTITY COST (US$, STATUS MILLIONS) 37 Fruit Processing Ministry of Agriculture 30 Concept Center Agriculture, note stage Irrigation, and Livestock 38 Livestock Farm Ministry of Agriculture 1 Concept Agriculture, note stage Irrigation, and Livestock 39 Agricultural and Dairy Ministry of Agriculture 31 Concept Product Cold Storage Agriculture, note stage Irrigation, and Livestock 40 Agriculture Products Ministry of Agriculture 0.289 Concept Packaging Center Agriculture, note stage Irrigation, and Livestock 41 Dairy Farm Ministry of Agriculture 3.6 Concept Agriculture, note stage Irrigation, and Livestock 42 Aqina Dry Port Ministry of Transport 47 Concept Commerce and note stage Industry 43 IT City Ministry of Information and No Feasibility Communications Communications information study and Information Technology stage Technology 44 1600 km Fiber Optic Ministry of Information and No Concept Communications Communications information note stage and Information Technology Technology 45 TV Digitalization Ministry of Information and No Concept Communications Communications information note stage and Information Technology Technology 46 825 km Fiber Optic Ministry of Information and No Concept Communications Communications information note stage and Information Technology Technology 47 Fiber Optic Backup Ministry of Information and No Concept Communications Communications information note stage and Information Technology Technology 48 Fiber Optic Metro Ministry of Information and No Concept Communications Communications information note stage and Information Technology Technology 49 Internet Exchange Ministry of Information and No Concept Communications Communications information note stage and Information Technology Technology 50 Afghanistan Portal Ministry of Information and No Concept Communications Communications information note stage and Information Technology Technology 51 Internet Addressing Ministry of Information and No Concept System Communications Communications information note stage and Information Technology Technology 21 ESTIMATED CONTRACTING PROJECT PROJECT NO. PROJECT NAME SECTOR ENTITY COST (US$, STATUS MILLIONS) 52 Optical Fiber Network Ministry of Information and 100 Concept (FTTX) Communications Communications note stage and Information Technology Technology 53 Helmand Solar Ministry of Energy 12 Concept Energy and note stage Water 54 Qala-e-Mamai 450 Ministry of Energy 1,600 Feasibility MW Power Generation Energy and study Water stage 55 Ishpishta 100-300 MW Ministry of Energy 100-450 Concept Coal-Fired TPP Energy and note stage Water 56 Dara-e- Suf 800-1000 Ministry of Energy 600-800 Concept MW Coal TPP Energy and note stage Water 57 Sorubi II 180 MW HPP Ministry of Energy 300 Feasibility Energy and study Water stage 58 Khan Abad II 10 MW Ministry of Energy 12 Concept Hydro Energy and note stage Water 59 Badakhshan Irrigation Ministry of Energy No Concept and Power 27 MW Energy and information note stage Hydro Water 60 Kama Irrigation and Ministry of Energy No Concept Power 45 MW Hydro Energy and information note stage Water 61 Baghdara 200 MW Ministry of Energy 450 Feasibility HPP Energy and study Water stage 62 Naghlu 100 MW Solar Ministry of Energy 180 Feasibility Energy and study Water stage 63 Farah 12 MW Solar Ministry of Energy 16 Feasibility Energy and study Water stage 64 Herat Solar & Wind 2 Ministry of Energy 6 Concept MW Energy and note stage Water 65 Ningahar Industrial Ministry of Energy 60 Feasibility Park 40 MW Solar Energy and study Water stage 66 Herat 50 MW Wind MEW Ministry of Energy 90 Concept Energy and note stage Water 67 Mazar-Uljato 10 MW Ministry of Energy 45 Concept Wind Energy and note stage Water 68 Parwan 25 MW Wind Ministry of Energy 15 Concept Energy and note stage Water 69 Ghor 5 MW Solar Ministry of Energy 12 Concept Energy and note stage Water 70 Daykondi 5 MW Solar Ministry of Energy 12 Concept Energy and note stage Water 22 ESTIMATED CONTRACTING PROJECT PROJECT NO. PROJECT NAME SECTOR ENTITY COST (US$, STATUS MILLIONS) 71 Kabul Solar Rooftop Ministry of Energy 12 Concept 10 MW Energy and note stage Water 72 Paktika 5 MW Solar Ministry of Energy 12 Concept Energy and note stage Water 73 Nooristan 6 MW Solar Ministry of Energy 15 Concept & Hydro Energy and note stage Water 74 100 MW Solar Ministry of Energy 120 Concept Package Energy and note stage Water 75 125 Micro HPP Ministry of Energy No Concept Projects Energy and information note stage Water 76 5 MW Kabul Biomass Ministry of Energy 15 Concept Energy and note stage Water 77 10 MW GEIC Ministry of Energy 91 Feasibility Energy and study Water stage 78 5 MW Uruzgan Solar Ministry of Energy 15 Concept Energy and note stage Water 79 220 kv Transmission Ministry of Energy 29 Concept Lines from Jalalabad Energy and note stage to Kunar Water 80 220 kv Transmission Ministry of Energy 22 Concept Lines from Kajaki to Energy and note stage Uruzgan Water 81 220 kv Transmission Ministry of Energy 18 Concept Lines from Ghazni to Energy and note stage Sharan Water 82 220 kv Transmission Ministry of Energy 24.4 Concept Lines from Shindan to Energy and note stage Farah Water 83 Herat 30 MW Wind Ministry of Energy 45 Concept Project Energy and note stage Water 84 Nooristan 5 MW Solar Ministry of Energy 15 Concept Project Energy and note stage Water 85 Konar 5 MW Solar Ministry of Energy 15 Concept Project Energy and note stage Water 86 Nangarhar 100 MW Ministry of Energy 192 Concept Solar (Hesari Shahi) Energy and note stage Water 87 Khan Abad 102 MW Ministry of Energy No Concept Energy and information note stage Water 88 Alambagh 30*3 MW Ministry of Energy No Concept Energy and information note stage Water 89 Kabul Meli 30 MW Ministry of Energy 33 Concept Energy and note stage Water 23 ESTIMATED CONTRACTING PROJECT PROJECT NO. PROJECT NAME SECTOR ENTITY COST (US$, STATUS MILLIONS) 90 Parwan 25 MW Wind Ministry of Energy No Concept Energy and information note stage Water 91 Helmand 30 MW Solar Ministry of Energy 30 Concept Energy and note stage Water 92 10 MW Khost Solar Ministry of Energy 11.39 Concept Energy and note stage Water 93 Trade Center in Ministry of Urban 11.5 Concept Nangarhar Finance Development note stage 94 Boraq Market Ministry of Urban 1.3 Concept Finance Development note stage 95 Central Business Ministry of Urban 4 Concept Trade Center Finance Development note stage 96 Central Market Ministry of Urban 3 Concept Finance Development note stage 97 Gold Selling Market Ministry of Urban 2.4 Concept Finance Development note stage 98 Reconstruction of Ministry of Urban 6.1 Concept Customs and Finance Development note stage Revenues Offices 99 Kandahar Fruits Ministry of Agriculture No Concept Market Finance information note stage 100 Central Silo, Ministry of Agriculture No Concept Kandahar, Balkh, Finance information note stage Baghlan 101 Construction of Hajj Ministry of Hajj Urban 14 Concept Complex and Religious Development note stage Affairs 102 University Building Ministry of Education 3 Concept Complex Higher note stage Education 103 Kardan University Ministry of Education 21.5 Concept Development Higher note stage Education 104 Hiring of 30,000 Ministry of Education 1.5 Concept Female Teachers Higher note stage Education 105 Construction of Ministry of Security 26 Concept Security Command Interior note stage Centers for 45 Districts 106 Cement Factory Ministry of Urban 50 Concept Mines and Development note stage Petroleum 107 Gemstone Bourse Ministry of Mining 10 Feasibility Mines and study Petroleum stage 108 Cobble Stone Factory Ministry of Urban No Concept Mines and Development information note stage Petroleum 109 Afghanistan Public Ministry of Health 22.3 Concept Hospitals and Public Health note stage Pharmacies 110 Nangahar Kidney Ministry of Health No Concept Center Public Health information note stage 111 100 Bed Multi- Ministry of Health 12 Concept Operations Hospital Public Health note stage 24 ESTIMATED CONTRACTING PROJECT PROJECT NO. PROJECT NAME SECTOR ENTITY COST (US$, STATUS MILLIONS) 112 Jamhuryat Hospital Ministry of Health 54 Feasibility Public Health study stage 113 Jinnah Hospital Ministry of Health 13 Feasibility Public Health study stage 114 Diagnostic Centers in Ministry of Health 7 Feasibility Sheikh Zayed and Public Health study WMAK Hospitals stage 115 Narwan Pharmacy Ministry of Health 10.8 Concept Public Health note stage 116 Shafi Pharmacy Ministry of Health No Concept Public Health information note stage 117 Kabul Medicine Market Ministry of Health 7.5 Concept Public Health note stage 118 Roads O&M Ministry of Transport No Concept Public Works information note stage 119 High Tonnage Weigh Ministry of Transport No Concept Stations Public Works information note stage 120 Kabul Ring Road Toll Ministry of Transport No Concept Road Public Works information note stage 121 Salang Tunnel Ministry of Transport No Feasibility Public Works information study stage 122 Kabul to Logar Road Ministry of Transport 76 Concept Public Works note stage 123 Noristan to Kunar 25 Ministry of Transport 75 Concept km Road Public Works note stage 124 Feroz Koh to Chesht Ministry of Transport 109 Concept Sharif 183 km Road Public Works note stage 125 Kabul 95.24 km Ring Ministry of Transport 309 Concept Road Public Works note stage 126 Abshar District 25 km Ministry of Transport 16 Concept Road Public Works note stage 127 Talqan to Aikhanam 71 Ministry of Transport 35 Concept km Road Public Works note stage 128 Water Supply System Ministry of Rural Water 100 Concept for Aqcha, Faiz Abad, Rehabilitation note stage Murdejant Khanha, and and Manghak Development 129 Water Storage System Ministry of Rural Water 5.1 Concept for Qades, Khordak, Rehabilitation note stage and Badghees and Development 130 Water Supply System Ministry of Rural Water 5.1 Concept for Baghees Rehabilitation note stage and Development 131 Water Supply System Ministry of Rural Water 7 Concept for Kandahar Rehabilitation note stage and Development 132 Water Supply System Ministry of Rural Water 9 Concept for Qurmal Khan and Rehabilitation note stage Qarghan and Development 133 Highway Toll Ministry of Transport 50 Concept Collection USP Transport note stage 25 ESTIMATED CONTRACTING PROJECT PROJECT NO. PROJECT NAME SECTOR ENTITY COST (US$, STATUS MILLIONS) 134 Construction of 133 Ministry of Transport No Concept Cargo & Passenger Transport information note stage Terminals 135 Railway Management Ministry of Transport 10 Concept and Engineering Transport note stage Institute 136 Herat Khowf Railway Ministry of Transport 8 Concept Equipment Transport note stage 137 Construction of Admin Ministry of Urban No Concept Offices Urban Development information note stage Development and Housing 138 Kabul Mall Ministry of Urban No Concept Urban Development information note stage Development and Housing 139 Kabul Trade Center Ministry of Urban 6 Concept Urban Development note stage Development and Housing 140 Royal City Ministry of Urban 128 Concept Urban Development note stage Development and Housing 141 Balkh Trade Center Ministry of Urban 2.1 Concept Urban Development note stage Development and Housing 142 Taban Market Ministry of Urban 6 Concept Urban Development note stage Development and Housing 143 Mirwais Market Ministry of Urban 3.5 Concept Urban Development note stage Development and Housing 144 Golden Market Ministry of Urban No Concept Urban Development information note stage Development and Housing 145 Exchange Market Ministry of Urban 15.7 Concept Urban Development note stage Development and Housing 146 Zahirshahi and Madina Ministry of Urban 7 Concept Market Urban Development note stage Development and Housing 147 Sakhawat Paikar Ministry of Urban 1.5 Concept Trade Center Urban Development note stage Development and Housing 26 4. Legal and Institutional Framework for PPPs 4.1 Overview The Government of the Islamic Republic of Afghanistan has established a legal and institutional framework to support the development of a sustainable PPP program in Afghanistan. Currently, the country’s PPP legal framework consists of the PPP Law (the 2018 PPP Law replaced the 2016 PPP Law, which was repealed) and the National PPP Policy (2017). The CPA has also prepared draft PPP Regulations that are awaiting approval and finalization by the Cabinet. There is ongoing discussion about the institutional location of the CPA, which is currently housed within the Ministry of Finance (MoF). Any change in the institutional location of the CPA will require further revision to the PPP Law. 4.2 PPP Law (2018) Key Features The latest version of PPP Law (2018) requires that PPPs be implemented based on the rule of law, justice and fairness, transparency, and open competition. The PPP Law provides some clarity on key elements of the PPP framework in Afghanistan (table 4). TABLE 4: PPP LAW: KEY FEATURES ISSUE SUMMARY Article 6 confirms that all entities involved in financing projects through PPPs are subject to the Law, including in the following sectors: water, energy, transportation, communications, administrative buildings, SECTOR SCOPE housing, agriculture and irrigation, tourism, parks, sports, cultural, education, higher education, health, environment, mines, and other sectors where the provisions of the law allow. Articles 9 and 10 set out the role of the Cabinet and the High Economic Council in providing approvals at various stages of the PPP project cycle. Article 11 sets out the role of the Ministry of Finance in reviewing project documentation and providing approvals at various stages of the PPP project cycle. Articles 12 and 13 define the powers and functions of the Central Partnership Authority, clarifying its responsibilities, including financial INSTITUTIONAL ROLES27 review of projects. Article 14 makes provision for entities to establish sectoral PPP Units, and Article 15 defines the roles of entities in developing and implementing PPP projects. Article 16 establishes a Complaints Assessment Committee for stakeholders to register complaints about any aspect of the development and implementation of PPP projects. 27 Institutional roles are laid out in more detail in section 4.4. 27 Article 37 allows for different PPP models, with each available model to be regulated by the PPP Regulations. Articles 30-34 and 38 describe the PPP project cycle, including project selection criteria and the definition of the cycle’s four phases: DEVELOPMENT AND identification, preparation, procurement, and contract management. IMPLEMENTATION OF PPPS Article 46 defines available government financial support to PPP projects, and Articles 49 and 50 allow for the establishment of a Project Development Fund and a Viability Gap Fund, respectively. Article 45 confirms that dispute resolution procedures should be individually defined in each PPP contract. Articles 24 and 53-58 describe the principles of transparency through TRANSPARENCY which PPPs must be implemented to ensure fairness and value for money. Article 35 establishes the process for the submission and review of UNSOLICITED PROPOSALS unsolicited proposals. Note: PPP = Public-Private Partnership. 4.3 PPP Project Cycle According to Article 30 of the PPP Law, the four phases of the PPP project cycle are as follows: 1. Project identification: all activities, including project planning, conducting the pre-feasibility study, and approval of the concept note. 2. Project preparation: all activities, including conducting the feasibility study and drafting tender documents (bid documents and the draft PPP contract). 3. Project procurement: marketing the project, managing the bidding process, selecting preferred bidders, and carrying out the negotiation, award, and signing of the PPP contract. 4. Contract management: establishing contract management arrangements, monitoring and managing project delivery and performance, and contract amendments. Throughout the PPP project cycle, the CPA performs the formal role of project review and appraisal and coordinates the process of formal approval of PPP projects by each relevant approval authority. In addition, the CPA may support the contracting entity in development of the PPP project at each stage. The main activities during the phases up to contract signature are shown in figure 3. 28 FIGURE 3: PPP PROJECT CYCLE PROCESS Note: CPA = Central Partnership Authority; EOI = expression of interest; HEC = High Economic Council; PPP = Public-Private Partnership; RFP = request for proposals; USP = unsolicited proposal. The following paragraphs describe in more detail the phases within the PPP project cycle. This information is taken from the PPP Law and draft PPP Regulations. Information from the draft PPP Regulations may be subject to change prior to its finalization and approval by the Cabinet. Project Identification The identification and screening of projects by contracting entities is the start of the PPP project cycle process. The contracting entity identifies the public infrastructure and service delivery projects for which a private partner will be sought. The selected projects should be part of the government’s overall program of public infrastructure and service delivery. They should be prioritized based on the extent to which each project addresses existing supply and demand gaps; provides the expected industrial, economic, and social benefits; and demonstrates readiness for implementation. Article 31 of the PPP Law provides three additional criteria to be considered during the selection of potential PPP projects: (i) value for money, (ii) project affordability and financial sustainability, and (iii) appropriate risk transfer. For unsolicited proposals, Article 35 of the PPP Law further requires the projects to be “in the public interest and aligned with national development plans/sector plans”. The main output during this phase is the preparation of a concept note by the contracting entity, to be submitted to the CPA for review prior to its submission to the Minister of Finance for approval. This requirement is the same for unsolicited proposals. Article 30 of the PPP Law also references the preparation 29 of a pre-feasibility study, although no further information or requirements in terms of the content of this study are provided in the PPP Law or the draft PPP Regulations. Project Preparation Once a project is approved by the Minister of Finance to be developed as a PPP project, the contracting entity, or the private proponent in the case of unsolicited proposals, may proceed to prepare the project under Article 33 of the PPP Law (or Article 35 for unsolicited proposals). Project preparation takes place in the form of a feasibility study that is designed to provide a detailed technical, social, environmental, legal, financial, and economic analysis of the project; ascertain that the project is desirable, viable, and achievable; and assess whether government support is needed. Article 18 of the draft PPP Regulations provides comprehensive guidance on the required content for the feasibility study, which includes the following: the proposed PPP contractual model, value-for-money assessment, cost/benefit assessment, risk allocation, and procurement plan. The feasibility study is submitted, along with draft tender documents, by the contracting entity to the CPA for review prior to its submission to the Minister of Finance for approval. Under Article 12 of the draft PPP Regulations, any government support must be approved by the High Economic Council (HEC). Where the Minister of Finance does not approve the feasibility study or draft tender documents, it will return the report to the CPA with an explanation. The CPA will communicate the rejection and reasons to the contracting entity, and it is then the responsibility of the contracting entity to revise the documents as necessary for resubmission. Project Procurement Once a project is approved by the Minister of Finance to proceed to procurement, the procurement phase may begin under Article 34 of the PPP Law. Article 28 of the draft PPP Regulations allows for three types of procurement: (i) competitive procurement, (ii) competitive dialogue, and (iii) direct procurement. The objective of this phase is to select a preferred bidder for the project and execute the PPP contract. Basic guidance on the content of the PPP contract is included in Article 36 of the PPP Law, and more detailed guidance is in Article 22 of the draft PPP Regulations. Full procedures for the procurement process are laid out in Chapter 3 of the draft PPP Regulations. The contracting entity is responsible for managing pre-qualification and bid evaluation. Based on a technical and financial evaluation of the bids received, a preferred bidder will be determined and invited to negotiate the PPP contract with the contracting authority, subject to approval by the HEC. Following negotiation, a further approval is required by the HEC and the Cabinet before the PPP contract can be signed. Contract Management Once the PPP contract is signed and effective, the contracting authority has responsibility for ensuring effective implementation and performance of the PPP contract under Articles 38 and 44 of the PPP Law. Additional support can also be provided by the CPA. Under Article 10 of the PPP Law, the HEC is responsible for approving any amendments or extensions to PPP contracts under implementation. 30 4.4 Institutional Framework The PPP Law and draft PPP Regulations provide the framework for the preparation, procurement, and implementation of PPPs and define the institutional roles and responsibilities for PPPs in Afghanistan. The institutional framework is summarized in table 5. TABLE 5: SUMMARY OF INSTITUTIONAL ROLES AND RESPONSIBILITIES INSTITUTION RESPONSIBILITIES CABINET Approves PPP contracts prior to signature. Provides high-level guidance on the strategic objectives of the PPP program. Approves government commitments to PPP projects to ensure affordability and sustainability. HIGH ECONOMIC Approves the use of direct procurement in permitted circumstances. COUNCIL Approves the selection of the preferred bidder. Approves finalized PPP contracts prior to their submission to the Cabinet. Approves extensions or amendments to PPP contracts under implementation. Reviews and approves concept notes, pre-feasibility studies, feasibility studies, MINISTRY OF FINANCE and draft tender documents prior to the launch of the procurement phase. Provides advice on enhancing the policy, legal, and institutional frameworks for PPPs and acts as a centralized source of technical expertise and capacity building. Reviews and advises the Minister of Finance on approval of concept notes, pre-feasibility studies, feasibility studies, and draft tender documents prior to the launch of the procurement phase. CENTRAL PARTNERSHIP Analyzes requests for government support and assesses fiscal commitments AUTHORITY and contingent liabilities associated with PPP projects. Manages the provision of development funding from the Project Development Fund and any financial support provided through the Viability Gap Fund. Establishes the national registry of PPP projects, manages the PPP project database, and consolidates performance reports from contracting entities into an annual report. Responsible for identifying, preparing, procuring, and implementing PPP projects. Eligible contracting entities include ministries, authorities with independent organogram and budget, independent commissions, municipalities, state- CONTRACTING ENTITY owned enterprises, and financially autonomous public universities and corporations where the state’s share is more than 25 percent. Contracting entities may choose to set up individual PPP Units to support the development of PPPs in the sectors for which they are responsible. Supports the contracting entity through all phases of the PPP project cycle. Chaired by a representative of the contracting entity. Other members of the PROJECT ADVISORY committee include representatives from the Ministry of Economy, Ministry of COMMITTEE Commerce and Industry, Central Partnership Authority, and any other entities nominated by the Ministry of Finance. 31 Manages the procurement phase on behalf of the contracting entity, including pre-qualification, bid evaluation, and contractual award. Chaired by a representative of the contracting entity. Other members of the EVALUATION PANEL committee include representatives from the Ministry of Economy, Ministry of Commerce and Industry, Central Partnership Authority, Ministry of Finance, Ministry of Justice, and any other entities nominated by the Ministry of Finance. The contracting entity is generally expected to contract an experienced and capable transaction advisor to assist in the development and procurement of a PPP project. TRANSACTION ADVISOR Supports the contracting entity in the preparation of the pre-feasibility study, feasibility study, and tender documents; assists with the procurement process; and supports contract negotiations. NATIONAL PPP transaction advisor and project procurements are advertised through the PROCUREMENT National Procurement Authority, although it has no formal role in the PPP AUTHORITY procurement process under the PPP Law. COMPLAINTS Assesses and addresses complaints about any aspect of the development and ASSESSMENT implementation of PPP projects. COMMITTEE Audits all government revenues and expenditures to ensure transparency in the implementation of the national budget. The Supreme Audit Office has no SUPREME AUDIT OFFICE formal role in PPPs under the PPP Law, but it may be able to audit government commitments to PPPs. PRIVATE PARTNER Establishes a project company to implement the PPP project. Note: PPP = Public-Private Partnership. 32 5. Legal and Policy Framework for PPP Disclosure 5.1 Disclosure under the Access to Information Law The Access to Information Law, enacted in 2014 and revised in 2019, defines information accessible to the public, provides a process for requesting information, and creates an institutional framework for its implementation. Article 3 of the law defines information as “any type of document s and recorded and registered information, including written, audio, visual, sample or model,” and requires that information requested by public institutions is disseminated in a manner that is “accessible to and usable by the public”. The process for requesting information by the public begins with the completion of an Information Request Form, to which the public institution is required to respond within 10 days of the request. To facilitate responses to information requests, Article 12 requires each public institution to establish a public information office, whose duties are further defined in Article 13. The law also provides for a complaints process, under Articles 32-34, in case the applicant is not satisfied with the information provided. For oversight and monitoring of the implementation of the law, Article 18 provides for the establishment of an Access to Information Commission (replacing the Oversight Committee from the 2014 version of the law). According to Article 19, membership on the Commission is open to candidates who fulfill the following criteria: Afghan citizenship, at least 30 years of age, bachelor’s degree, not sanctioned or convicted of serious crimes, five years of relevant work experience, good reputation, no political party membership, and does not hold appointed or elected office. The Commission currently has five members. The Access to Information Law also specifies the constitutional limitations to access to information under Article 16, which provides for situations where the provision of information can be prohibited. These include situations when the provision of information may jeopardize the following: • The country’s independence, national sovereignty, territorial integrity, national security, or public security • Afghanistan’s political, economic, and social relations with other countries • The life or property of an individual • Crime detection or prevention • The process of detection, investigation, and prosecution of a criminal suspect • The process of a fair trial and enforcement of a verdict • The privacy of an individual • Confidential commercial interests, private property, or bank accounts. However, these exemptions have a public interest override, whereby any information related to these categories could also be disclosed in the case of public interest. If a citizen is dissatisfied with the information provided, he/she can first seek redress through the public information office of the relevant public institution, and should he/she still be dissatisfied, through the Commission. 33 5.2 Disclosure under the PPP Law The PPP Law includes a chapter on accountability and transparency as key governance principles for the procurement and implementation of PPPs in Afghanistan. The PPP Law mandates the CPA to manage and disseminate information about PPP projects. Article 13(13) of the PPP Law requires the CPA to “put in place an information and technology usage policy” relating to PPPs, including the “establishment of an information center (database) ” for all phases of the PPP project cycle, PPP legislative documents, and other standard documentation. Article 13(15) of the PPP Law requires the CPA to “consolidate annual reports” from contracting entities and present them to “the authorities,” which is understood to be the Administrative Office of the President, HEC, and National Assembly. The CPA is yet to prepare a disclosure policy and does not currently have an operational website to publish project information and reports. Article 24 of the PPP Law concerns disclosure as it relates to the procurement process, establishing principles of fairness to achieve value for money and efficiency through the bid process. Article 24(3) also explicitly notes that “bidders and citizens shall have access to the Tender Process and commercially insensitive information”. This access is to be provided based on the legal framework of the country, that is, the Access to Information Law. Chapter 7 of the PPP Law, Articles 53 to 58, provides more detail on principles of fairness within the procurement process. The articles include guidance on nondiscrimination, anti-corruption, protection of the public interest and confidentiality, protection of proponent rights in the case of unsolicited proposals, conflict of interest, and debarment. Despite the references to transparency and accountability as key governance principles for the procurement and implementation of PPPs in Afghanistan, there is limited guidance within the PPP Law on how, what, and when to disclose project information. There is no specific guidance on the disclosure of PPP preparatory or contractual information, such as feasibility studies and performance reports, and no timeline to guide the disclosure on non-sensitive commercial information. There is also no specific guidance on disclosure of project performance information, beyond the annual report prepared by the CPA. The draft PPP Regulations contain no further guidance on these issues. 5.3 Disclosure under Other Laws In addition to the Access to Information Law, several other laws apply principles of transparency and accountability to governance and have an impact on PPP disclosure. The Public Finance and Expenditure Management Law (2005) provides for transparent organization of government financial affairs, protection of public assets, preparation of the national budget, and management of public expenditure. The Supreme Audit Office Law (2013) establishes the powers and functions of the Supreme Audit Office to conduct external audits on all government revenues and expenditures to ensure transparency in the implementation of the national budget and in the collection of revenues to support the economic efficiency of public expenditures. The Procurement Law (2017) ensures transparency and value for money in the government’s procurement of goods, services, and construction works. The law also established the National Procurement Commission and the NPA, which are housed within the Administrative Office of the President. Anti- corruption efforts in Afghanistan have been further strengthened by the publication of the Afghanistan National Strategy for Combatting Corruption (2017) and the enactment of the Anti-Corruption Law (2018). 34 Table 6 summarizes Afghanistan’s major laws that have an impact on PPP disclosure. TABLE 6: LEGAL FRAMEWORK FOR DISCLOSURE AND IMPLICATIONS FOR PPP DISCLOSURE ARTICLE TEXT IMPLICATION CONSTITUTION, 2004 Citizens, media, civil Article 34 Freedom of expression is inviolable. society, and so forth have a right to discuss any nonconfidential aspect of PPP performance. PPP records and Citizens shall have the right of access to information from Article 50 information can be public institutions. accessed by citizens. ACCESS TO INFORMATION LAW, 2019 This includes all Provides the right of access to information for all natural and contracting entities for Article 2(1 legal persons, from the government and nongovernmental PPPs and potentially all and 2) institutions, to ensure transparency and accountability. documentation related to PPP projects. Imposes proactive disclosure obligations on contracting authorities. The definition of institutions Listed types of institutions are responsible for providing Article 3 includes “any other body information to the applicants and the public. which undertakes a public function,” which would include project companies for PPP projects. Provides an avenue for Articles 32- Complaint mechanism. redress in instances of 34 non-disclosure. Could limit PPP disclosure, especially with respect to Article 16 Exemptions from disclosure. commercial elements of PPP contracts. Contracting entities have an obligation, via the Commission, to disclose to Access to Information Commission to publish an annual the President and the Article 22 report on disclosure for the President and the National National Assembly the Assembly. number of information requests they have obtained and what action was taken on the requests. 35 Individuals at contracting entities who do not provide information on PPPs face a Article 35 Penalties for non-disclosure. range of potential punishments, including salary deductions. PPP LAW, 2018 Central Partnership Authority to develop information policy and establish an information center (database) for PPP Central Partnership project information, legislation, and standard documents. Authority to publish Article 13 information on all phases (13 and 15) Central Partnership Authority to consolidate annual reports of PPP projects, including from the entities or PPP Project Units and present them to contractual performance. the authorities. Bid process must be made public in a fair, transparent, Article 24 (3) Bidders and citizens shall have access to the tender process and timely manner, and all and non-sensitive commercial information. non-sensitive commercial information should be made available. The contracting authority The contracting entity shall provide information to Article 53 has an on-demand stakeholders at all phases of a PPP project. disclosure obligation. PUBLIC FINANCE AND EXPENDITURE MANAGEMENT LAW, 2005 Ministry of Finance has an Ministry of Finance to submit a report on the financial affairs obligation to disclose public Article 6 and use of public money by public institutions to the National expenditures in PPP Assembly. projects. PROCUREMENT LAW, 2017 PPP projects will be advertised transparently Ensuring transparency in procurement proceedings. through the National Article 2 (2 Procurement and 5) Providing tender opportunities for participation of all eligible Authority/Afghanistan bidders. Government Electronic and Open Procurement System websites. Contracts for private investment in construction and/or The PPP procurement operation of public works and services against awarding process is regulated under Article 27 concessions for use (PPP) will be regulated by a separate the separate PPP legal regulation. framework. SUPREME AUDIT OFFICE LAW, 2013 Supreme Audit Office has Transparency in the accountability of government institutions power to transparently Article 2 (3) and other bodies that hold or utilize the public money and audit the financial activities property. of public institutions. Supreme Audit Office can Supreme Audit Office can audit the Administrative Office of audit government the President, National Assembly, Judiciary, line ministries contributions to PPP Article 5 and municipalities, independent directorates, independent projects, but cannot audit commissions, Attorney General’s office, state-owned private parties to PPP enterprises and corporations, and other public entities. contracts. 36 MASS MEDIA LAW, 2006 Afghan nationals, foreign diplomatic missions, The public can access Articles 3 international/inter-governmental organizations, and information about PPP and 8 nongovernmental organizations are entitled to establish and projects through media publish mass media. publications. Note: PPP = Public-Private Partnership. 5.4 Emerging Jurisprudence As PPPs and the PPP legal framework are relatively new in Afghanistan, there is currently no jurisprudence on PPPs with respect to transparency and disclosure. 5.5 PPP Disclosure in Other South Asian Countries Given that implementation of the legal framework for PPPs in Afghanistan is relatively nascent, table 7 summarizes the scope of PPP disclosure in other South Asian countries to provide a comparison of progress elsewhere in the region. TABLE 7: SCOPE OF DISCLOSURE IN SELECTED SOUTH ASIAN COUNTRIES RELEVANT COUNTRY DISCLOSURE IN PRACTICE LEGISLATION Bangladesh PPP Act of 2015 Office for PPP publishes PPP project information: mandates that laws, http://www.pppo.gov.bd/index.php. rules, regulations, model documents, and short Website has links to data rooms, available to the public, description and scope of containing all procurement documentation, and has regularly negotiated PPP projects updated basic project information for all projects. are made publicly available through Infrastructure Investment Facilitation Company provides a list various channels, of projects on which it has advised: including the internet, http://www.iifc.gov.bd/index.php. allowing each private investor to be able to The list states the project name, sector, agreement signing track online the status of date, and agency involved in the PPP. processing. Some government agencies have standard tender documents/clauses available on their websites, including the Roads and Highways Department: http://www.rhd.gov.bd/Documents/ConvDocs/Conditions%20of %20Contract.pdf. The Bangladesh Bridge Authority also publishes details on the ongoing, pipeline, and completed projects, including feasibility studies: http://www.bba.gov.bd. 37 India PPP Toolkit developed PPP Cell of the Ministry of Finance provides all basic project by the PPP Cell makes it information for each PPP undertaken by the federal compulsory for government: pppinindia.gov.in. It lists the project name, sponsoring agencies to location, sector, sponsoring authority, project cost, and publish all PPP contracts approval status. The website also provides policy guidelines, on their own or a related appraisal mechanisms, standardized bidding documents, and PPP authority’s website, toolkits that govern PPP projects, and has a list of concession to ensure transparency agreements of executed PPP projects collected from the in the PPP procurement project authorities. process. The Toolkit also allows the public to Central Public Procurement Portal publishes all PPP tenders: request a copy of the etenders.gov.in. contractual agreement from the sponsoring Government agencies have made available procurement agency. documents relating to PPP projects they sponsor, such as the Civil Aviation Authority: https://www.civilaviation.gov.in/en/agreements. Some states have set up websites to disclose PPP projects, including the states of Assam (http://assamppp.gov.in) and Bihar (https://www.idabihar.com), which have basic project information and all procurement information. Maldives N/A Ministry of Finance regulates public procurement and provides basic information on its website and procurement portal: beelan.egov.mv. The portal is under construction, but it offers a list of tenders, awarded projects, and pipeline public procurement projects. Pakistan Section 24 of the PPP The PPP Authority of Pakistan gives real-time basic information Authority Act provides on all PPP projects in the country, including ongoing, pipeline, for transparency and and completed projects: public disclosure. It http://www.pppa.gov.pk/index.php?cmd=nocompl. It states mandates all PPP implementing agencies, current status, and next steps for each agreements to be public project and publishes current and archived tenders for bids. documents, allowing the general public to obtain Some implementing agencies also provide progress reports on copies as needed. projects undertaken by the agencies on their websites. For example, the National Highway Authority provides information about each project undertaken in each region, stating the source of funds, contract costs, start date, completion date, progress report, financial progress, and the parties’ contact details. The National Highway Authority also publishes all procurement information: http://nha.gov.pk/en/nha-tender/all- tenders/. At the provincial level, the PPP Cells of the Punjab (https://ppp.punjab.gov.pk) and Sindh Public Procurement Regulatory Authorities (http://e.pprasindh.gov.pk) provide basic information about ongoing PPP projects, procurement information, and standard documents for download. At the municipal level, Balochistan, Khyber Pakhtunkhwa, and Punjab provinces all have PPP legislation that mandates PPP agreements to be public documents, available for public viewing. The Sindh Public Procurement Act has provisions for transparency in the disclosure of the procedures and results of the pre-qualification and bidding processes. 38 Sri Lanka Procurement Guidelines National Agency for Public-Private Partnership publishes basic of 1998 require that the information about ongoing and pipeline PPPs: relevant ministry https://www.nappp.gov.lk/projects. It lists each project’s name, announces the call for implementing agency, sector, and current status, and gives a proposals and request status update. for proposals widely Ministry of Finance has on its website standard bidding through foreign and local documents, procurement notices, and awards for some of the newspapers and PPP projects in the country. electronic media. Note: PPP = Public-Private Partnership. 39 6. Disclosure in Practice and Key Challenges 6.1 Overview The PPP program in Afghanistan is in its relative infancy. As a result, there is limited experience of disclosure in practice. The CPA is mandated as the main resource center for PPPs in the country. Article 13 of the PPP Law lays out the CPA’s powers and functions, which include the “establishment of an information center (database)” for procurement and other project information. The CPA is also required to prepare an annual report on PPP project performance, in coordination with the contracting entities. The CPA has recently re-operationalized its website to help fulfill its mandate under Article 13. 6.2 As Things Stand: Current Disclosure and Audit Activities Disclosure The PPP Law allows for information about PPP procurement performance to be publicly available. However, the PPP Law and draft PPP Regulations provide limited guidance on the information to be publicly disclosed. The CPA has yet to publish a disclosure/information policy that would guide the disclosure of PPP information and an approach to sensitive commercial information. Audit The PPP Law contains limited information and guidance on the audit of PPPs. The Supreme Audit Office is not empowered to audit the performance of private companies, including private companies implementing PPPs. Given the infancy of the PPP program in Afghanistan, the Supreme Audit Office has yet to conduct ex-post auditing of PPPs and may lack the capacity to do so (given that this requires a specific skill set distinct from public infrastructure projects). Information Dissemination The CPA website has recently been re-operationalized and sits under the MoF website architecture. The CPA website is currently being fully populated, and as of October 2020, there is still only limited information about the current PPP pipeline and ongoing PPP projects. No PPP annual (or otherwise periodic) reports have yet been published. Figures 4 and 5 show the new CPA website and project portal. 40 FIGURE 4: CENTRAL PARTNERSHIP AUTHORITY WEBSITE FIGURE 5: CENTRAL PARTNERSHIP AUTHORITY PROJECT PORTAL For PPP procurement information, there is no separate PPP procurement section on the NPA or AGEOPS websites, and users cannot specifically search for or filter PPP procurement opportunities as a separate procurement type. Given the prevalence of energy projects within the current PPP portfolio, the Da Afghanistan Breshna Sherkat website contains a link to the PPP Law as well as an investment opportunities document28 that includes several of the energy projects in the PPP pipeline. 28 https://main.dabs.af/uploads/tenders/85e2de63212e25c2042672599b0a772c.pdf. 41 The full re-operationalization of the CPA’s website will be critical to publishing and disseminating PPP- related information and centralizing that information flow. 6.3 Challenges Implementation of the Access to Information Law The Access to Information Law, which was enacted to promote transparency and accountability in government, is ranked as the strongest law among 128 countries surveyed in the Global Right to Information Rating.29 The law accords the right to information to all natural and legal persons, and applies to institutions providing a public function, which would include project companies implementing PPP projects. However, media organizations have observed that the Access to Information Law is not being fully implemented or respected.30 This may make it difficult for applicants to hold the government or project companies accountable for PPP projects, especially with respect to project performance. Limitations of the Supreme Audit Office’s Ability to Audit PPPs General responsibility for oversight of public and Treasury funds in Afghanistan lies with the Supreme Audit Office, which conducts external audits on all government revenues and expenditures to ensure transparency in the implementation of the national budget and collection of revenues. However, the Supreme Audit Office is not empowered to audit the performance of private companies, and this extends to the audit of private companies implementing PPPs. This limits the ability of the Supreme Audit Office to audit the implementation of PPPs to ensure efficient use of government resources and performance of the projects in line with the private parties’ contractual obligations. Lack of Specific Guidance for Disclosure in the PPP Law and Draft PPP Regulations The PPP Law references the importance of transparency and accountability as a governing principle for PPPs and allows for access to the tender process and non-sensitive commercial information for bidders and citizens. However, there is no guidance or requirement to disclose specific pieces of PPP procurement or contractual information, such as feasibility studies and performance reports, and no timeline to guide the disclosure of non-sensitive commercial information. There is no information on disclosure of project information and performance during project implementation. The draft PPP Regulations contain no additional guidance, beyond the PPP Law, on disclosure. This may lead to lower levels of transparency. Absence of Regulations/Guidelines Beyond the PPP Law and draft PPP Regulations, the CPA has yet to prepare detailed rules of procedure or guidelines on PPP disclosure that would provide guidance on the information that should be disclosed at each stage of the PPP process and the procedure for such disclosure. Contracting entities are therefore at liberty to decide what information should be disclosed, or not, and at which point in the process. The absence of such guidance makes systematic disclosure of information for PPP projects difficult. 29 https://www.rti-rating.org/country-data/. 30 https://www.amnesty.org/en/latest/news/2020/02/afghanistan-implement-access-to-information-law/. 42 Institutional Challenges Given the limited PPP experience in Afghanistan and the lack of guidance on disclosure of PPP information, dissemination of PPP project information by contracting entities is constrained by a lack of capacity and a lack of understanding on what information can and should be disclosed and when. Contracting entities are not sufficiently empowered to access and disseminate information, and ultimately it will likely become the responsibility of the CPA to aggregate and disclose information. However, the CPA is constrained by a lack of staffing to improve dissemination, although the recent re-operationalization of the CPA website should help. Lack of Awareness about PPPs Most Afghan citizens are not well informed about PPPs and are therefore not fully aware of their rights with respect to information about PPP procurements and project information/performance. Afghanistan’s media and civil society community is increasingly vibrant and could help mitigate this limitation, even if their understanding of the PPP process remains limited. It will be critical for the government to communicate and educate the public, media, and civil society about the PPP program, particularly as more PPP projects enter implementation. 43 7. Gap Assessment TABLE 8: GAP ASSESSMENT COMPONENT RAPID REVIEW Y/N GAP ASSESSMENT Clear support from the highest Y There is support for disclosure at levels of government (national and the national level, and the legal subnational) for disclosure in and policy frameworks are general supportive of transparency and access to information. That said, Afghanistan continues to perform poorly on global transparency and corruption indexes. POLITICAL Agreement on PPP disclosure N Internal stakeholders agree on the ECONOMY among internal stakeholders need to disclose information, but in (ministries, agencies, and the absence of specific disclosure subnational governments) guidance in the PPP legal framework, there is no agreement on what information to disclose and when. Sufficient agreement on the need Y External stakeholders, for example to disclose and pressure to civil society organizations and the disclose among important external media, are strong advocates of stakeholders (political parties, disclosure. unions, private sector, end users, media, political commentators, The gap is moderate. think tanks, civil society organizations, and others) Are there laws, policies and procedures in place that include the following: Proactive disclosure by Y The Access to Information Law governments or agencies guides disclosure by public institutions. The importance of transparency and accountability is referenced in the PPP Law. LAW Coverage of proactive disclosure N The Access to Information Law relating to contracts or PPPs does not specifically reference PPPs and vice versa. There is therefore no specific guidance on the disclosure of PPP contractual information. High-level definition of confidential N The confidentiality of commercial information and protection of information is acknowledged by sensitive contract information internal and external stakeholders, but there is no specific guidance on its definition or policy toward it. 44 Timelines for disclosure Y The Access to Information Law provides timelines for public information requests. The draft PPP Regulations provide timelines LAW (Contd.) on PPP procurement stages. Are there any significant legislative N There are no significant or policy impediments or impediments, but neither is there constraints to PPP disclosure? sufficient guidance on PPP disclosure within the PPP legal and policy framework. The gap is moderate. Clearly established roles and Y The PPP Law assigns responsibilities on PPP disclosure responsibility for PPP reporting to contracting entities and the Central Partnership Authority. Processes and actions clearly N No clear guidance on processes established in guidance or internal for disclosure. orders Timelines for disclosure clearly N No clear guidance on timelines for established disclosure of PPP information in the PPP Law. Clear guidance available for N No clear guidance on identification officials on the identification and and treatment of confidential treatment of confidential information. GUIDANCE information, including the timeframe associated with confidentiality and factors to be considered as a test of commercial sensitivity or public interest There are penalties associated N No penalties in the PPP Law. with failure to disclose There is a penalty mechanism in the Access to Information Law. Mechanisms that monitor N No clear mechanisms on implementation of disclosure disclosure of PPP information. policies, internal and external Processes for checking the N No clear processes for validation of accuracy of information and information. validation, internal and external The gap is high. 45 Comprehensive and clear N template for disclosure that covers key pieces of pre- and post- procurement information, including financial and performance information The template is flexible enough to N cater to different kinds of PPPs and PPPs in different sectors The template is dynamic, that is, N suited to ongoing financial and performance disclosure TEMPLATE & Instructions for filling the template N STANDARD are included as required CONTRACT There are no templates covering PROVISIONS There are standard contract disclosure of PPP information. provisions that provide the following: The gap is high. Specific language for confidential N information Period for which the information N will be confidential Format for listing the specific N confidentiality clauses of each contract Clearly stated information that the N private provider is expected to maintain along with timelines for submission Audit mandate with the extent of N disclosure to audit Budget is available N No specific budget available. Skilled, trained labor is available N No specific staffing to manage disclosure issues. Technology and web platform/s Y The Central Partnership Authority RESOURCES compatible with easy upload and website has recently been re- download of information operationalized but is not yet fully populated with information. Security systems to prevent data N No security system. and information tampering The gap is high. Note: PPP = Public-Private Partnership. 46 8. Recommendations Afghanistan’s legal environment generally supports disclosure , but implementation is poor. The Constitution and Access to Information Law require public institutions to conduct themselves in a transparent manner and be accountable to citizens through the dissemination of information. In practice, however, there is limited implementation of this legal mandate. Public institutions have institutional challenges that hinder their ability to disclose information, such as poor record management and a lack of capacity, resources, and infrastructure to facilitate disclosure. Despite references to a potential disclosure/information policy and approach to confidentiality in the PPP Law that reflects international best practices, there is limited practical guidance within the current PPP legal framework on the specific project information that should be disclosed. The findings of the Diagnostic Report suggest that strengthening disclosure within the PPP legal framework requires the development of a Disclosure Policy or Guidelines. Given that the PPP Regulations are still in draft stage, they could serve as an entry point for the institutionalization of disclosure procedures (the alternative may require amendments to the PPP Law). This information will then need to be embedded in practice through standard contractual clauses and a dedicated web portal to facilitate improved PPP disclosure in practice. The disclosure policy should cover the following elements: a. Disclosure of key pre- and post-procurement information, including detailed guidance on: • Timeline for the disclosure of project approval • Bid process • Details of public investments • Projected fiscal commitments • Contingent liabilities • Project performance • Clear guidance on the recommended approach to confidential information b. Guidance on the treatment and reporting of contingent liabilities and other PPP fiscal commitments. The World Bank’s Framework for Disclosure in PPPs recommends a six-layer design (figure 6). 47 FIGURE 6: ELEMENTS OF THE WORLD BANK’S RECOMMENDED DISCLOSURE FRAMEWORK FOR PPPs Note: PPP = Public-Private Partnership; RFP = Request for Proposals 48 9. Key Materials Reviewed Laws, Regulations, and Policy Documents of the Government of the Islamic Republic of Afghanistan Access to Information Law, 2019 Afghan National Access to Information Strategy, 2017 Afghanistan National Strategy for Combatting Corruption, 2018 Constitution of Afghanistan, 2004 e-Government Services Plan, 2016 e-Government Strategy, 2011 Mass Media Law, 2006 National Infrastructure Plan, 2016 Procurement Law, 2017 Public Finance and Expenditure Management Law, 2005 Public-Private Partnerships Law, 2018 Public-Private Partnerships Policy, 2017 Public-Private Partnerships Regulations (draft), 2020 State Audit Office Law, 2013 Other Sources Afghanistan’s Access to Information Law: A Preliminary Review, Integrity Watch Afghanistan, 2015 Corruption Perceptions Index, Transparency International, 2019 Disclosure in Public-Private Partnerships: Jurisdictional Studies, 2015 Disclosure in Public-Private Partnerships: Good Practice Cases, 2015 Framework for Disclosure in Public-Private Partnerships, World Bank, 2016 Ministry-Wide Vulnerability to Corruption Assessment of Public Procurement, Independent Joint Anti- Corruption Monitoring and Evaluation Committee, 2020 Rule of Law Index, World Justice Project, 2020 49 Annex A: Suggested Amendment of Article 24 of PPP Law 2018 Proactive Publication of Certain Project Documents and Information 24. Publication of information concerning Partnership Contract Revised Article 24 (3): [(3) Subject to and without prejudice to the requirements of the Access to Information Law 2019, information in respect of a public-private partnership shall be provided to any citizen expeditiously at a reasonable cost upon request.] (4) The Entities shall publish in a designated website or in any other form specified in the guidelines issued under Article 13 (1) the following information: (a) basic project information; (b) actual dates of achievement of key project milestones; (c) procurement information; (d) project summary; (e) information relating to renegotiation; (f) project documents; (g) performance information. (5) No confidential information as stated in the Access to Information Law 2019 and as specified in the guidelines issued under Article 13 (1) shall be disclosed. (6) The Central Partnership Authority shall formulate in the guidelines issued in Article 13(1) rules that (a) specify details regarding the elements of information to be disclosed; (b) determine the point in time at which the Entities shall publish the respective elements of information; (c) define confidential information [including a list of items that qualify as confidential information]; (d) prescribe the method of disclosure; (e) delineate responsibilities for disclosure; (f) determine how the information is going to be validated prior to publication; (g) provide sample [standard] contractual provisions related to proactive disclosure. 50 [(h) identify appropriate governance and administrative arrangements for proactive disclosure of project information including creating a designated website for publishing public-private partnership information.] These guidelines will be reviewed and amended from time to time as appropriate. [(7) The Central Partnership Authority shall assist the Entities in connection with the exercise of their functions under this Law, including by providing training on information lodgment, handling, and publishing.] 51 Annex B: Framework for Public-Private Partnerships Disclosure 1. Introduction This document sets out the Disclosure Framework for the Government of the Islamic Republic of Afghanistan regarding the scope of information that it makes available to the public as a routine matter. The Framework comprises the commitment, roles, and responsibilities related to public-private partnership (PPP) disclosure. The government is committed to good governance of its PPP operations and its institutional obligations for enhancing the public’s trust and confidence in PPPs. The Public-Private Partnership Law 2018 (PPP Law) and National Policy on Public-Private Partnerships 2017 (PPP Policy) set out the legal framework for PPPs in Afghanistan. Article 20 of the PPP Law provides that PPP projects shall be regulated based on the principles of good governance and anti-corruption. The law also provides for the disclosure of PPP information to all stakeholders, provided it is nonconfidential information. Likewise, Section 12 of the PPP Policy provides that the Government of the Islamic Republic of Afghanistan shall ensure that information on the performance of the PPP program is publicly available. Disclosure is an essential underpinning of the awareness creation, and consensus building around a PPP that is required under the legal framework for PPPs. The Central Partnership Authority (CPA) was established by virtue of Article 12 of the PPP Law. The CPA is responsible for regulating government policy, proposing the legal framework, and promoting, advising, and coordinating PPP projects. Recognizing these responsibilities, the CPA seeks to pursue systematically coordinated measures aimed at enhancing transparency and accountability throughout the PPP life cycle. The CPA believes that disclosure of information is essential to achieving openness of the PPP procurement process and neutrality in the PPP process through clear, specific, and predictable disclosures. Publication of information is essential to building and managing public dialogue and increasing public awareness about PPPs. It is also critical for enhancing good governance of PPP projects. The CPA has prepared this Framework to assist entities, departments, and agencies to disclose information on projects procured through PPPs. The framework will be implemented by the CPA in close cooperation with relevant government entities and in compliance with other relevant laws and regulations. This Framework will also inform the private sector of the intent of the Government of the Islamic Republic of Afghanistan to disclose PPP information systematically. Since disclosure is an evolving area, this Framework will be revisited and revised every two to three years, if and as required. 2. Application This Framework shall be applied to all PPP projects and Partnership Contracts, including solicited and unsolicited proposals in accordance with the PPP Law. 3. Specific Disclosures Specific disclosures will consist of the elements included in subsections a to g below and will follow the template provided in annex C. Confidential information as provided under section 4 below will be redacted before publication. 52 (a) Basic project information. Basic project information along with estimated dates for key milestones will be provided within 10 working days of approval of project concept. Basic project information will include project name, location, sector, contracting entity, investment value, project rationale, description of asset and services to be provided, indicative investment size, rationale for selecting the project for development as a PPP, and estimated demand to be served annually. The pre-feasibility study report (if any) will also be published. (b) Project progress tracking. Key milestones will be provided as the project progresses, in the form of a project progress tracker. (c) Environmental and social impact assessments. Environmental and Social Impact Assessments, resettlement plans, and related documents and reports will be disclosed within 10 working days after approval, with a translation of summaries into the local language in a culturally appropriate manner. They will also be disclosed on the website of the contracting entity. (d) Procurement information. Summary procurement information and key documents will be provided during the procurement process. The request for qualifications, list of shortlisted bidders, request for proposals, feasibility study, and award will be published immediately after approval for publication. (e) Contract summary. Summary information on the partnership contract and PPP agreement will be provided within 10 working days of signature of the contract. The project summary will include basic information, such as the parties to the contract, project scope, project value, amounts and types of government support provided to the project, information on tariffs and pricing, termination clauses, handback provisions, and key performance indicators with target levels. Information on the financial structure of the project company will be provided within 10 working days of financial close. (f) Renegotiations. Summary information relating to each renegotiation will be published within 10 working days of signature of the renegotiated contract. (g) Performance information. Information on the performance of the project company on 5 to 10 selected key performance indicators against agreed target levels will be published within one year of commissioning of the project, with annual updates. Performance information will include details relating to performance failures and be updated annually. Links to performance assessments, such as audit reports, private party reports (project company self-reporting), and independent engineer reports, will be provided and updated annually. 4. Treatment of Confidential Information As provided in Article 55 of the PPP Law, all confidential information will be redacted before publication. Confidential information refers to information (however it is conveyed or on whatever media it is stored) the publication of which would, or would be likely to, prejudice the commercial interests of any person, trade secrets, intellectual property rights, and know-how of either party, including all personal data and sensitive personal data. Confidential information includes bids, bid evaluations, trade secrets, and the base case financial model submitted by the preferred bidder. 53 For the purposes of this Framework, the following elements will be considered as confidential. However, these elements will be reviewed every two to three years for any modifications: (i) Bids (ii) Bid evaluations (iii) Trade secrets (iv) Base case financial model submitted by the preferred bidder. 5. Method of Disclosure All information and documents will be published on a web-based platform owned by the CPA and any other media platforms as required by extant laws. 6. Responsibilities for Disclosure (a) The onus for information generation will be shared by the Entity and the Private Party. The onus for uploading on the web-based platform will be retained by the CPA. (b) All information will be uploaded by the CPA on its website as provided in Section 3 after redacting confidential information. (c) The CPA will upload all information and documents to the web-based platform after validation and approval of the information for public disclosure. (d) Performance information and any other information as required by the CPA and the Entity will be provided by the Private Party to the contract from time to time. (e) The Entity and Private Party may disclose all nonconfidential information on the official project website or each entity’s website in accordance with this framework. 7. Validation of Information Prior to Disclosure All information shall be validated by the Director of Public-Private Partnership Policy of the CPA and/or any officer who has been delegated this responsibility before publication on the website. 8. Standard Contractual Provisions a. A section/chapter entitled “Transparency and Information Disclosure” shall be included in all draft contractual documentation included in the request for proposals and in all PPP and Partnership Contracts to be signed by the contracting entities. b. The section/chapter mentioned in 8.a. will contain clauses pertaining to the proactive disclosures to be carried out by the contracting entity, including disclosure of summary project and contract information, contract documents, including procurement documents, and ongoing performance information disclosure. c. The section/chapter mentioned in 8.a. will also contain the obligation of the Private Party to provide documents and information as and when required and in the format required by the Entity as part of its service obligations, with consequential payment deductions should there be a failure to provide information on the part of the Private Party. d. The section/chapter mentioned in 8.a will include a subsection dealing with confidential information and will list the items of confidential information in a schedule along with the date up to which the information will be considered confidential. 54 e. The Partnership Contract will be structured in a way such that confidential information can be easily removed before publication. f. Sample disclosure clauses for use in all draft Partnership Contracts included in the request for proposals and in all contracts are provided in annex D and its schedules. TABLE B.1: SUMMARY OF SPECIFIC DISCLOSURES NO. DOCUMENT CONTENTS CREATOR APPROVER TIME Disclosure of information at project identification, updated thereafter Project name Location Sector Within 10 Entity working days of Project value approval of the Project rationale project concept Description of asset by designated and services to be approving Basic project 1. provided Entity (CE) CPA authority and information Estimated demand to updated be served annually thereafter with Rationale for selecting each new the PPP mode milestone and Indicative investment annually. size (Pre-feasibility study report) CPA from project concept approval until execution of A section on the web- Within 10 PPP project Project based platform that working days of contract 2. progress will reflect actual dates CPA / CE each status (commercial tracking of achievement of key change close); CE milestones after commence ment of operations until end of contract Disclosure of information during project preparation Environmental Within 10 and Social working days of 3. Impact Complete assessment CE CPA approval of the Assessment ESIA (ESIA) Within 10 Value for working days of 4. Money Report Complete report CE CPA approval of the (VfM) VfM report 55 Disclosure of information during procurement Following 5. approval and RFQ Complete RFQ CE CPA publication of RFQ As soon as pre- qualification shortlisting is completed and List of 6. approved by shortlisted Complete list CE CPA the Contracting bidders Entity and pre- qualified bidders have been contacted Within 10 working days of 7. Full RFP CE CPA close of bid submissions Announcement Within 10 Details of the 8. of selected CE CPA working days of preferred bidder bidder approval Within 10 Feasibility 9. Complete study CE CPA working days of Study Report award Disclosure of information following execution of partnership contract (commercial close) Project scope and nature Parties to the PPP contract Within 10 Government support working days of Project value, tariffs execution of Project 10. and pricing CE CPA project contract Summary Termination clauses (commercial Handback provisions close) Key performance indicators with agreed target levels Debt and equity of the project Financing Debt and equity Within 10 11. structure of providers CE CPA working days of project GoIRA financial financial close. support / contribution Grant funding Within 10 working days of Project All nonconfidential execution of 12. CE CPA documents project documents project contract (commercial close) 56 Within 10 Summary information working days of 13. Renegotiations on each renegotiation CE CPA signature of renegotiated contract Where execution of project contract (commercial Summary explanation Within 10 14. close) takes of why financial close CE CPA working days of place but did not take place decision project does not reach financial close Performance disclosure throughout contract period Performance of the project company on Key Performance Indicators (KPIs) against agreed targets (including information on construction CE milestones, key financial information Within one year Audit report Performance and information on of financial 15. provided by CPA Information performance failures, close, updated the CPA if any) annually. Audit reports Audited Financial Statements Private party reports Extracts from Independent Expert reports Note: CE = contracting entity; CPA = Central Partnership Authority; ESIA = Environmental and Social Impact Assessment; PPP = Public-Private Partnership; RFP = Request for Proposals; RFQ = Request for Qualifications; SPV = special purpose vehicle; VfM = value for money. 57 Annex C: Suggested Template for Disclosure BASIC PROJECT INFORMATION (disclosed at the project identification stage within 10 working days of approval of the project concept by the Ministry of Finance or other designated authority, updated at signature of the partnership contract) • Project name • Location • Sector • Contracting entity • Project rationale • Investment value • Description of asset • Description of services • Rationale for selection of PPP mode • Estimated demand to be served annually • Indicative investment size • Pre-feasibility study report PROJECT MILESTONES (Published as they become available) • Project concept note received • Project concept note approved • Project pre-feasibility study approved • Request for Qualification (RFQ) • Request for Proposals (RFP) • Award • Commercial close • Financial close • Commencement of construction or development • Completion of construction or development • Commissioning • Contract expiry PROCUREMENT DOCUMENTS • RFQ (published immediately after approval) • List of shortlisted bidders (published as soon as bidders are shortlisted and approved) • RFP (published upon close of bids) • Announcement of selected bidder (published after approval of award) • Feasibility Study Report (published after award) PROJECT SUMMARY (Published within 10 working days of the execution of the partnership contract and updated in case of any change) • Entity: name of entity, name of representative, address, telephone, fax, e-mail • Private party: name of company or consortium, address, telephone, fax, e-mail 58 • Financial structure: (figure showing debt/ equity/proportion/ providers) (This will be published within 10 working days of financial close) 59 GOVERNMENT SUPPORT ITEM BRIEF DESCRIPTION Guarantees Grants Availability/annuity payment schedule Land leases, asset transfers Other support Revenue share, if any TARIFFS PARTY BRIEF DESCRIPTION OF EVENT OF DEFAULT Private Party Entity TERMINATION PROVISIONS PARTY BRIEF DESCRIPTION OF EVENT OF DEFAULT Private Party Entity HANDBACK TERMS AND CONDITIONS PROVISION BRIEF DESCRIPTION OF PROVISION Provision A RENEGOTIATIONS RENEGOTIATION 1 RENEGOTIATION 2 RENEGOTIATION 3 RENEGOTIATION 4 PERFORMANCE INFORMATION (to be updated annually) KEY Year 1 Year n PERFORMANCE Target Achievement Target Achievement INDICATORS PERFORMANCE YEAR FAILURES Category of failure Number of events Penalty or abatement provided in agreement Penalty or abatement imposed Penalty paid or abatement effected: Yes/No PERFORMANCE Links to audit reports (if any), SPV reports, IE reports ASSESSMENTS 60 Annex D: Sample Contractual Provisions Section [insert number]: Transparency and Information Disclosure Obligations Regarding Specific Disclosures 1. Access to Information 1.1 The [Private Party] acknowledges that the [Entity] is subject to the requirements of the Access to Information Law 2019 and the Public Private Partnership Law 2018 and may be entitled to disclose certain project-specific information without consulting or obtaining the consent of the [Private Party]. 1.2 The [Private Party] agrees to facilitate the [Entity’s] compliance with its disclosure requirements under the Access to Information Law 2019 and the Public Private Partnership Law 2018. 1.3 Where the [Entity] receives a request for information under the Access to Information Law 2019 or the PPP Law 2018 in relation to information that the [Private Party] is holding and which the [Entity] does not hold itself, the [Entity] shall refer to the [Private Party] such request for information that it receives as soon as practicable and in any event within [five] working days of receiving the request and the [Private Party] shall (a) Provide the [Entity] with a copy of all such information in the form the [Entity] requires as soon as practicable and in any event within [five] working days (or such other period as the [Entity] acting reasonably may specify) of the [Entity’s] request; and (b) Provide all necessary assistance as reasonably requested by the [Entity] in connection with any such information to enable the [Entity] to respond to a request for information within the time for compliance set out in the Access to Information Law 2019. 1.4 The [Private Party] shall ensure that all information held on behalf of the [Entity] is retained during the term of this Partnership Contract for at least [] years after the expiry or termination of the Partnership Contract and shall permit the [Entity] to inspect such information as requested from time to time. 1.5 Where the [Entity] receives a request for information under the Access to Information Law 2019 or the PPP Law 2018, the [Entity] shall be responsible for determining at its absolute discretion whether information is exempt from disclosure under the Access to Information Law 2019 or the PPP Law 2018 and for determining what information will be disclosed. 2. Public Relations and Publicity 2.1 The [Private Party] shall not by itself, its employees or agents communicate with representatives of the press, television, radio, or other communications media on any matter concerning this Partnership Contract without the prior written approval of the [Entity]. 2.2 The [Private Party] shall procure that its subcontractors shall not communicate with representatives of the press, television, radio, or other communications media on any matter concerning this Partnership Contract without the prior written approval of the [Entity]. 2.3 The [Private Party] may not represent the views of the [Entity] on any matter or use the name of the [Entity] in any written material provided to third parties, without the prior written consent of the [Entity]. 61 3. Publication of PPP Project Information 3.1 The parties agree that the [Entity], subject to Section 4 (Confidentiality) below, is entitled to disclose as detailed in Schedule [ ] the following information: (a) Procurement documents and information; (b) All project documents, including this PPP agreement and other associated documents (such as the Value for Money report); (c) Summary project information as set out in Schedule [ ] of this Partnership Contract; (d) Performance information related to this PPP agreement. 3.2 The [Private Party] acknowledges that the [Entity] will publish the information mentioned in Subsection 3.1 above, subject to Section 4 (Confidentiality), on a web-based platform owned and administered by the Central Partnership Authority, and any other media platforms as identified in the PPP Law 2018. 4. Confidentiality Confidential Information 4.1 For the purpose of this Partnership Contract, confidential information means, (a) The subset of confidential information included in column 1 of Schedule [ ] of this Partnership Contract, in each case for the period specified in column 2 of Schedule [ ]. (b) Any other information (however it is conveyed or on whatever media it is stored) that may fall under the definition of “confidentiality” under the Access to Informa tion Law, in particular where the information contains proprietary information, scientific or technical information, or information supplied in confidence by a bidder, and those specified in Article 16 (1) the Access to Information Law 2019 and Article 55 of the PPP Law. 4.2 Without prejudice to Section 4.3, the parties shall keep confidential all confidential information received by one party from the other party relating to this Partnership Contract and any other Partnership Contracts or the PPP project and shall use all reasonable endeavors to prevent their employees and agents from making any disclosure to any person of any such confidential information. Permitted Disclosure 4.3 As specified in Article 55 (2) of the PPP Law, Confidential information may be disclosed if: a. Disclosure of such confidential information is reasonably required by any person engaged in the performance of its obligations under the Partnership Contract for the performance of those obligations; b. A party can demonstrate that such confidential information is already, or becomes, generally available in the public domain legitimately otherwise than as a result of a breach of this clause; c. Such disclosure is necessary to enable a determination to be made under clause [insert reference to Dispute Resolution clause] or in connection with a dispute between the [Private Party] and any of its subcontractors; d. Such disclosure is required pursuant to (i) any statutory or legal obligation, (ii) any order of a court of competent jurisdiction, (iii) a parliamentary obligation placed upon the party making 62 the disclosure, (iv) the rules of any regulated stock exchange, or (v) any order from a governmental or regulatory authority concerned; e. The confidential information is already lawfully in the possession of the receiving party, prior to its disclosure by the disclosing party; f. The confidential information is provided to: Each party’s own professional advisers or insurance advisers; and/or the lenders or the lenders’ professional advisers or insurance advisers or, where it is proposed that a person should or may provide funds (whether directly or indirectly and whether by loan, equity participation, or otherwise) to the [Private Party] to enable it to carry out its obligations under the Partnership Contract, or may wish to acquire shares in the [Private Party] in accordance with the provisions of this Partnership Contract to that person or their respective professional advisers, but only to the extent reasonably necessary to enable a decision to be taken on the proposal; and/or International or bilateral financial institutions involved in the PPP project as lenders, political risk insurers, or guarantors; g. The disclosure of such confidential information by the [Entity] relates to the design, construction, operation, and maintenance of the PPP project and any disclosure of other confidential information as may be reasonably required for the purpose of conducting a due diligence exercise, to any proposed new private partner, its advisers, and lenders, should the [Entity] decide to retender the Partnership Contractor undertake any market testing; h. Such disclosure is required for any registration, filing, or recording of the required permits and property registration in connection with the PPP project; i. The disclosure of confidential information by the [Entity] to any other relevant authority or their respective advisers or to any person engaged in providing services to the [Entity] is necessary for any purpose related to or ancillary to the Partnership Contract; j. Such disclosure is necessary for the purpose of: i. The financial audit of the [Entity’s] or the [SPV] accounts by statutory bodies such as the Office of the Auditor General; ii. Any examination pursuant to [insert reference to any auditing obligations for public contracts] of the performance audit with which the [Entity] has used its resources; iii. Complying with a proper request from either party’s insurance adviser or insurer on placing or renewing any insurance policies or in relation to any insurance claim made; or iv. (Without prejudice to the generality of clause 4.3 (d), compliance with [insert reference to any laws requiring disclosure (for example, environmental laws)]. 4.4 When disclosure is permitted under clauses 4.3 (a), (c), (f), (g), and (i) above, the party providing the information shall ensure that the recipient of the information shall be subject to the same obligation of confidentiality as that contained in this Partnership Contract. The [Private Party] shall expressly inform any person to whom it discloses any information under this clause of the confidentiality restrictions set out in this clause and shall procure its compliance with the terms of this clause as if it were party to this Partnership Contract and the [Private Party] shall be responsible for any breach by any such person of the provisions of this clause. 4.5 The provisions of Section 4.3 are not applicable to [insert relevant exceptions for specific project] (for example, information related to defense, security, and international relations as specified in Article 16 of the Access to Information Law 2019). 63 Confidential Information Related to End Users 4.6 Where the [Private Party], in carrying out its obligations under the Partnership Contract, is provided with personal information relating to [end users (for example, road users, patients)], the [Private Party] shall not disclose or make use of any such information otherwise than for the purpose for which it was provided, unless the [Private Party] has obtained the prior written consent of that [end user] and has obtained the prior written consent of the [Entity]. 4.7 No later than [ ] days following termination or expiry of this agreement, the [Private Party] shall ensure that all documents and/or computer records in its possession, custody, or control, which contain personal information relating to [end users], including any documents in the possession, custody, or control of a subcontractor, are delivered to the [Entity]. 5. Reporting Obligations, Provision of Information, and Documents Obligation to Disclose Information, Documents, and Records upon Request 5.1 (a) The [Private Party] shall provide to the [Entity] all information, documents, records, and the like in the possession of, or available to, the [Private Party] as may reasonably be requested by the [Entity] for the purpose of complying with any of its statutory reporting obligations, including but not limited to its reporting obligations under the Public Finance Management Law, Access to Information Law 2019, PPP Law 2018. (b) To this end, the [Private Party] shall ensure that all such information in the possession of any subcontractor or other counterparty to any project agreement shall be available to the [Entity] and the [Private Party] has included, or shall include, appropriate provisions to this effect in all Partnership Contracts. Project Information 5.2 (a) The [Private Party] shall provide to the [Entity] summary project information as set out in Schedule [ ] of this Partnership Contract within [five] working days after signature of this Partnership Contract and an updated version including information on the financial structure as described in Schedule [ ] of this PPP agreement within [five] working days after [insert definition for financial close]. (b) In the event of any relevant change of the project information described in Subsection (a), the [Private Party] shall provide to the [Contracting Authority] the updated information and copies of the updated documents [five] working days after the relevant change has occurred. (c) In the event of renegotiation, the [Private Party] shall provide to the [Entity] information on the renegotiation as well as copies of the renegotiated Partnership Contract within [five] working days after signature of the renegotiated Partnership Contract. 64 Performance Information 5.3 The parties agree that the [Private Party] shall provide to the [Entity] information relating to performance as set out in Schedule [ ] of this Partnership Contract within one year of [insert definition for financial close]. This will include information on the performance of the Private Party on key performance indicators against agreed target levels, as well as copies of performance assessments (such as audit reports and/or audited financial statements, extracts from the private party reports (special purpose vehicle self-reporting), and extracts from independent expert reports). This information will be updated annually each year during the term of this Partnership Contract on [ ]. Calculation of Equity Internal Rate of Return 5.4 The [Private Party] shall provide to the [Entity] each year during the term of this [Partnership Contract] on [ ] and on [ ] a calculation of the actual equity internal rate of return and any other financial information submitted to any other authority including any regulators. Audited Financial Statements 5.5 The [Private Party] shall provide to the [Entity] audited financial statements annually and no later than [] days after the end of the fiscal year of the [Private Party]. Enforcement of Reporting and Information Obligations 5.6 The parties agree that the scope of services under this Partnership Contract includes obligations of the [Private Party] to provide information as set out in Section/Subsection [ ] of this Partnership Contract to the [Entity] and that any breach of this obligation shall be a failure in performance of the service, triggering deductions in accordance with the payment mechanism as set out in Schedule [ ] of this Partnership Contract. Schedule [ ] Format for submission of summary project information for disclosure Partnership Contract information (submitted within [seven] working days of execution of the project agreement (commercial close) and updated at financial close and in case of any change) • Entity: name of entity, name of representative, address, telephone, fax, e-mail • Private Party: name of company or consortium, name of representative, address, telephone, fax, e- mail, Project value, Project scope, Term • Key performance indicators with agreed target levels • Financial structure (figure showing debt/equity/proportion/providers) (provide link to company registry) (to be provided within [seven] working days of financial close) • Copies of project documents (including the value for money report) • Implementation structure (SPV and any subcontractors) 65 GOVERNMENT SUPPORT Guarantees Grants Availability/annuity payment schedule Land leases, asset transfers Other support Revenue share, if any TARIFFS Tariffs and pricing TERMINATION PROVISIONS PARTY BRIEF DESCRIPTION OF EVENT OF DEFAULT Private Party Entity Handback terms and conditions RENEGOTIATIONS Renegotiation 1 Renegotiation 2 Renegotiation 3 Renegotiation 4 66 Schedule [ ] Format for submission of performance information for public disclosure Performance information (key performance indicators and target summary to be submitted within one year of financial close and achievement and performance failure information, to be updated annually) KEY Year 1 Year (n) PERFORMANC Target Achievement Target Achievement E INDICATORS PERFORMANCE Year FAILURES Category of failure Number of events Penalty or abatement provided in contract Penalty or abatement imposed Penalty paid or abatement effected: Yes/No PERFORMANCE Copies of audit reports and/or audited financial statements, extracts from the ASSESSMENTS private party reports (SPV self-reporting, and extracts from independent expert reports) Payment deductions for noncompliance with the obligation to provide information Period of delay in compliance Payment deduction Schedule [ ] Confidential information Clauses/schedules Period for which information will remain confidential 67 Annex E: Comparison of the World Bank Framework, Current Disclosure Practice, and Agreed Framework for Afghanistan WORLD BANK FRAMEWORK CURRENT DISCLOSURE AGREED PRACTICE FRAMEWORK 1. BASIC PROJECT INFORMATION 1.1. Name N Y 1.2. Location N Y 1.3. Sector N Y 1.4. Sponsoring agency/department N Y 1.5. Estimated project value N Y 1.6. Project need: benefits provided, economic N Y and social (including specific information on the public interest aspect) 1.7. Stakeholder consultations N N 1.8. Reason for selection of PPP mode and type N Y in brief 1.9. Brief description of other modes analyzed and N N reasons for rejecting these 1.10. Technical description of the physical N Y infrastructure 1.11. Dates of various approvals N Y 1.12. High-level description of the services Y Y 1.13. Estimated demand to be served annually N Y 1.14. Project additionality N N 1.15. Name and deliverables of the transaction Y N advisor 2. CONTRACT MILESTONES AND DOCUMENTS 2.1. Date of execution of project agreement N Y (commercial close) 2.2. Date of financial close N Y 2.3. Date of commencement of construction or /N Y development 2.4. Date of completion of construction or N Y development 2.5. Date of commissioning N Y 2.6. Date of contract expiry N Y 68 WORLD BANK FRAMEWORK CURRENT DISCLOSURE AGREED PRACTICE FRAMEWORK 2.7. All contract documents (with appropriate N N redactions) 3. PARTIES TO THE CONTRACT WITH CONTACT DETAILS 3.1. Public authority: name of authority, name of N Y/N representative, address, telephone, fax, e- mail 3.2. Private party: name of company or N Y/N consortium, name of representative, address, telephone, fax, e-mail 3.3. Financiers: name of lead financial institution, N N other financial institutions, name of representative of lead financial institution, address, telephone, fax, e-mail 4. Procurement Information 4.1. Dates and summary details N Y 4.2. Final feasibility study N Y 4.3. Land acquisition, rehabilitation, social- N Y (including information on human rights impact assessment) and environmental assessment–related information 4.4. Reports of independent procurement auditors N NA (if any) 4.5. Procurement documents 4.5.1. Request for Qualifications N Y 4.5.2. Pre-qualification or short list Y Y 4.5.3. Request for Proposals Y Y Evaluation criteria: brief description with Y Y weightage Brief information on constitution of the N N evaluation committees Negotiation parameters: brief description of N N the parameters for negotiation with preferred proponent Minutes of pre-bid meetings N N 4.5.4. Selection of preferred bidder Y Y 5. RISK 5.1. Pre-construction risk: all risks up to financial N N close 5.2. Construction/completion N N 5.3. Cost risk: capital, operating N N 5.4. Refinancing risk N N 69 WORLD BANK FRAMEWORK CURRENT DISCLOSURE AGREED PRACTICE FRAMEWORK 5.5. Risk related to change in law, taxes, scope, N N technical standards, regulatory framework 5.6. Exchange rate risk N N 5.7. Operating risk N N 5.8. Commercial risk, market risk, demand risk N N 5.9. Performance risk N N 5.10. Financial risk N N 5.11. Force majeure risk N N 5.12. Environmental risk N N 5.13. Social risk N N 6. EVALUATION OF PPP OPTION (VALUE N Y FOR MONEY OR OTHER APPROACH USED) 6.1. Evaluation report (value for money or other) N Y 6.2. Rationale for doing the project as a PPP, N Y including any qualitative or quantitative value- for-money, final feasibility studies (including cost-benefit analysis, if any) or other analysis that might have been used, including nonfinancial benefits that have been quantified or considered 6.3. Discount rates used along with the risk N N premium used, if any, and an explanation for the rate of risk premium used, referring to guidance, if any, available in this regard or describing project-specific circumstances that justify the risk premium rate used 6.4. Risk comparison of other financing N N mechanisms 7. FINANCIAL INFORMATION N Y 7.1. Equity-debt ratio N Y 7.2. Share capital N Y 7.3. Shareholders with proportion held and voting N N rights 7.4. Details of any provisions related to contracts N N providing for caps on equity transfer in different stages of the contract, especially during the construction stage and for a few years thereafter 7.5. Commercial lenders, institutional investors, N N bilateral or multilateral lenders, public issue of bonds, supplier credit, other 7.6. Categorize senior debt, mezzanine debt, N N other 70 WORLD BANK FRAMEWORK CURRENT DISCLOSURE AGREED PRACTICE FRAMEWORK 7.7. Amount and tenor of each, fixed or floating N N rate 7.8. Security and step-in arrangements N N 7.9. Forecast internal rate of return N N 8. GOVERNMENT SUPPORT N Y 8.1. Guarantees (type and details of the N Y guarantees provided—both explicit and contingent guarantees) 8.1.1. Minimum revenue guarantee N Y 8.1.2. Exchange rate guarantee N Y 8.1.3. Debt repayment guarantee N Y 8.1.4. Other guarantees N Y 8.1.5. Fiscal commitments and contingent liability N Y disclosure reports 8.2. Grants N Y 8.2.1. Subsidy as a proportion of project value N Y 8.2.2. Capital subsidies paid during construction N Y with periodicity or milestones 8.2.3. Operating subsidies and their periodicity or N Y milestones 8.3. Service payments (payments made by the N Y public authority or purchaser to the private provider for infrastructure services (applicable in private finance initiative–type projects)) 8.3.1. Total payments and periodicity N Y 8.3.2. Methodology for calculating payments N Y 8.3.3. Indexation used N Y 8.4. Land leases, asset transfers N Y 8.4.1. Property numbers with the quantum of land N N transferred 8.4.2. Zoning information of land N N 8.4.3. Conditions of transfer of land N N 8.4.4. Equipment transfers: details of equipment N N with conditions of transfer 8.4.5. Human resources/personnel transfers: details N N and conditions of transfer 8.5. Other support N Y 8.5.1. Non-complete clauses N N 8.5.2. Provision for revenue shortfall loan N N 8.6. Revenue share, if any N 71 WORLD BANK FRAMEWORK CURRENT DISCLOSURE AGREED PRACTICE FRAMEWORK 8.6.1. Revenue share on base case N N 8.6.2. Revenue share on upside N N 8.6.3. Graphs: annual concessionaire payments to N Y government 9. TARIFFS N Y 9.1. Tariffs and pricing (where the infrastructure is N Y financed partly or fully through the levy of user charges) 9.1.1. Methodology for tariff setting/pricing N Y 9.1.2. Scope for reviews of tariff, pricing, regulatory N Y mechanisms 9.1.3. Graphs: tariff increases over time, consumer N Y price index movement 10. CONTRACT TERMINATION N 10.1. Concessionaire: events of default, termination N Y of payments made, methodology used for total payments 10.2. Authority: events of default, termination of N Y payments made, methodology used for total payments 11. RENEGOTIATIONS N 11.1. Nature of variation N Y 11.2. Rationale for variation N Y 11.3. Change in roles and responsibilities of the N Y parties due to the variation, if any 11.4. Change in original risk allocation due to the N Y variation, if any 11.5. Change in original fiscal commitments or N Y contingent liabilities of government due to the variation, if any 11.6. Change in capital or operational costs due to N Y the variation, if any 11.7. Change in tariffs or service levels due to the N Y variation, if any 11.8. Date of variation N Y 12. PERFORMANCE INFORMATION N 12.1. Annual demand levels N Y 12.2. Annual revenues (where revenue share N N clauses or other related clauses, such as minimum revenue guarantees, are present in the contract) 72 WORLD BANK FRAMEWORK CURRENT DISCLOSURE AGREED PRACTICE FRAMEWORK 12.3. Actual internal rate of return (where there is N N government equity investment or other form of government support that is substantial) 12.4. Performance (actual year-wise performance N Y against 10 to 12 identified key performance indicators) 12.5. Performance failures N Y 12.5.1. Year N Y 12.5.2. Category of failure N Y 12.5.3. Number of events N Y 12.5.4. Penalty or abatement provided in contract N Y 12.5.5. Penalty or abatement imposed N Y 12.5.6. Penalty paid or abatement effected N Y 12.6. Performance assessments N Y 12.6.1. Audit reports N Y 12.6.2. Independent performance assessments of N Y the independent engineer 12.6.3. Any other performance reports available for N Y the project 73