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SPECIFIC TERMS OF REFERENCE

Technical Audit to be performed during implementation of the project

Bonaire Sewerage and Sanitation System

(Delegation Agreement CRIS ref.: FED/2008/199103; FED/2008/199104)

FWC BENEFICIARIES 2009 - LOT 2: Transport and Infrastructures

EuropeAid/127054/C/SER/multi

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TECHNICAL AUDIT BONAIRE SEWERAGE AND SANITATION PROJECT: SPECIFIC TERMS OF REFERENCE

1. ASSIGNMENT CONTEXT AND BACKGROUND INFORMATION...............................3 1.1. Beneficiary country ......................................................................................................3 1.2. Contracting Authority...................................................................................................3 1.3. Project Description .......................................................................................................3 1.4. Definitions ....................................................................................................................6

2. OBJECTIVE AND EXPECTED RESULTS OF THE TECHNICAL AUDIT................6 2.1. Objective.......................................................................................................................6 2.2. Expected Results...........................................................................................................7

3. SCOPE OF WORK ...............................................................................................................7 3.1. Specific activities..........................................................................................................7 3.2. Project management....................................................................................................10

4. LOGISTICS AND TIMING ...............................................................................................11 4.1. Location ......................................................................................................................11 4.2. Commencement date & Period of implementation.....................................................11

5. REQUIREMENTS ..............................................................................................................12 5.1. Personnel ....................................................................................................................12 5.2. Office accommodation................................................................................................13 5.3. Facilities to be provided by the Consultant ................................................................13 5.4. Equipment...................................................................................................................13 5.5. Documents ..................................................................................................................14

6. REPORTS ............................................................................................................................14 6.1. Reporting requirements ..............................................................................................14 6.2. Submission and approval of progress reports .............................................................14

7. SPECIAL REQUIREMENTS ............................................................................................15 7.1. Documents ..................................................................................................................15 7.2. Human resources ........................................................................................................15 7.3. Professional secrecy....................................................................................................15 7.4. Independence ..............................................................................................................15

8. ADMINISTRATIVE INFORMATION.............................................................................15 8.1. Methodology...............................................................................................................15 8.2. Others remarks............................................................................................................15

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1. ASSIGNMENT CONTEXT AND BACKGROUND INFORMATION

1.1. Beneficiary country

Bonaire, Special Entity (as overseas territory) within the Kingdom of the Netherlands.

1.2. Contracting Authority

1.2.1. The Contracting Authority for the present contract is the European Union Delegation in Guyana

1.2.2: The Contracting Authority in the context of the project being audited is the Stichting Ontwikkeling Nederlandse Antillen (SONA) represented by Uitvoeringsorganisatie Stichting Ontwikkeling Nederlandse Antillen (USONA)

1.3. Project Description

Bonaire Sewerage and Sanitation System (BSSS). a. Design History As early as 1992, a study for the possible Bonaire Sewerage and Sanitation project was presented by the Netherlands Antilles to the European Commission for financing, which finally resulted in a positive reply and the financing of a Pre-Feasibility Study under the 7th EDF. As this study was not satisfactorily carried out in the opinion of both the TAO and the European Commission, a new feasibility study, complete with a design report, setup of management organization for the sewerage and sanitation, and preparation of tender documents was submitted under the 8th EDF. After a cancelled tender in 1999 for Technical Design & Tender dossier preparation, Dorsch Consult was contracted in 2002 to perform the feasibility study for the setting up of a waste water collection system, a storm water system and a waste water treatment system in the hotel zone of Bonaire, part of the Netherlands Antilles. A master plan and a feasibility study were written by Dorsch, recommending a vacuum sewerage network, a storm water drainage system and a central waste water treatment plant. These recommendations were elaborated on in 2004 and 2005, resulting in a Detailed Design and corresponding Tender Documents. As stated above, in 2006 the report “Critical Review of the Proposed Irrigation and Effluent Standards”, issued by Alterra1, recommended tighter nitrogen standards for the effluent of the Waste Water Treatment Plant that is used for irrigation in the sensitive coastal hotel area. The nitrogen standard for effluent to be used for agricultural activities remained at a maximum of 28 mg N/l. Therefore, Dorsch was asked in 2007 to extend the design for the Waste Water Treatment Plant with a Nutrient Removal Tertiary Treatment system to fulfill these new requirements and to update the design for the vacuum sewerage network and the Waste Water Treatment Plant with the new tourist and population numbers. The design of the storm water system was still accurate and did not

1 Critical review of the proposed irrigation and effluent standards for Bonaire. Alterra Report 1289, Wageningen, 2006

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need an update. In the Design Proposal report from August 2007, two alternatives have been described; option 1 comprises two nitrogen effluent standards (28 and 5.1 mg N(itrogen)/ l) and option 2: treatment of waste water to an effluent with a maximum load of 5.1 mg N/l. In the meetings of 1-3 August 2007 in the presence of all stakeholders including a representative of the Delegation of the European Commission, option 2 was chosen. Based on these decisions, Dorsch elaborated on an adapted design in which the Waste Water Treatment Plant was extended with a Nitrogen Removal Tertiary Treatment to decrease the concentration of nitrogen in the effluent from 28 mg/l to 5.1 mg/l. They also included new population data (growth), which led to a larger Waste Water Treatment Plant apt for both present and future use (design horizons for 2017 and 2031). Also extra vacuum network and a vacuum station in the “Airport and Industrial Area” were introduced. This resulted in a new design and corresponding new tender documents, which were then presented in December 2008. At this stage, the design and tender documents were taken over by SONA from the TAO office (by Delegation Agreement with the European Commission). The December 2008 tender documents were then put to tender by USONA. The forecast of this international, open tender procedure was published on January 2nd, 2009, followed by the Procurement Notice in March 4th, 2009 and the particulars on how tender documents could be obtained. On June 16th, the four offers received were opened in a public session. A large disparity between the tenderers’ offers for the different bill items was found. The difference between the lowest and the highest bidder was more than 16 million Euros. The conclusions were evident: in some cases a too low price estimate by Dorsch combined with high price settings of the contractors. Minor non-conformities were detected, but each of them with possibility of adding necessary documents later on. The considerable gap between the eligible offers (one bit was found not-eligible) and the engineering estimate forced USONA to cancel the tender and to proceed to adaptations in the design. Dorsch Consultants performed a thorough recalculation on pipe diameters for both the vacuum and the force main components. These and many other changes (materials and civil works) were incorporated into the design documents of January 2010, when Dorsch prepared a completely new set of design and contract documents. The storm water system was deleted from the original design, but the third stage treatment remained unchanged. b. Original design data and design changes defined during tender and construction The intervention area in Bonaire, comprising the originally designed network with the vacuum stations VS1 to VS6, is shown on Figure 1. This is the so-called “sensitive zone”, where most of the hotels are situated including the centre of Kralendijk. It runs from Hato to Punt Vierkant and is a 200 m to 500 m wide strip parallel to the coast. In Kralendijk this zone is at least 500 m wide. The vacuum system is divided into different independent networks, each of which is connected to a separate vacuum station. The distance from the vacuum station to the furthest house connection is limited by the maximum suction length of the vacuum stations (around 6 km). Dorsch Consultants performed a recalculation on pipe diameters for both the vacuum and the force main components. The general data on population (in equivalents, or p.e.) to be connected remained then unchanged. This recalculation was aimed at reducing inland areas to be sewered rather than coastal sections. The latter also brought about some rerouting (length reduction) of the force main line. During the negotiation stage of the procurement phase these changes were incorporated into the design documents of December 2009/ January 2010, for which Dorsch prepared a complete new set of design and contract documents.

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Figure 1. The Vacuum Network and its facilities (Vacuum stations 2 and 5 will not be constructed) On the basis of the above, and during the negotiation process with the remaining contractors a vacuum design, incorporating larger vacuum capacity of the vacuum lines, was proposed. This then eliminated the necessity for both Vacuum Stations 5 (Belnem) and 2 (Hato). During the negotiations with contractors USONA made it clear that these changes (larger vacuum capacity and elimination of Vacuumstations 2 and 5) only could be implemented when the contractor would assume complete design responsibility for the vacuum system to be installed and based on the 2031 design horizon.

The new developments in the Belnem area, including the population to be connected, made it clear that at time Vacuum Station 5 would be necessary. It was decided to only incorporate (the originally planned) Vacuum Station 5 in the system when the southern and more inland parts of the Belnem area will be sewered. The latter areas were officially introduced in September 2011 by the Bonaire TAO to the European Commission for 10th EDF funding. This awaits now further decision by the Commission.

The contractor did actualize (as part of the contract conditions) the data of the Feasibility Study (2004 and updated in 2009) made by Dorsch Consultants GmbH and, as a consequence of a growing population, some design parameters (capacity based) of both the sewerage and the

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treatment facility had to be adapted. This sewerage design update was ready early 2011 and has been implemented as such. At present (April 2013), nearly 2.5 years after the Commencement Order (October 15th, 2010) the contractor proceeds with the last parts of the works at the Treatment Plant. During 2012 is became clear that the contractor would not finish the project in the contractual 2 years performance time. This meant also that the contractual performance time of the supervision had to be extended. SONA and the TAO requested the Commission to extend the period of execution, as defined in the Financing Agreement (ANNEX II, Art. 3.2), with one year (till December 31st, 2013) which was granted by the Commission. The sewerage is now completed and the EME installations at the four vacuum stations and the booster station are being checked for energizing and functional testing. The concrete water retaining structures on the WWTP are built and await the final water tightness testing. Repair and maintenance manuals are almost all submitted for verification by the Supervisor. These form all part of the pre-commissioning phase. (Partial) commissioning is expected later in 2013 after which the one year maintenanance period starts. At the very moment the house connections are being installed (under a separate contract) to be connected with the main sewer lines. The connection works of the houses/commercial buildings (hotels) do not form part of the 8th /9th EDF Programme and are separately financed by the Dutch Ministry of Infrastructure and the Environment. However, the realization of the house/hotel connections is included as a Special Condition to the Financing Agreement for the EDF co-funded Bonaire Sewerage & Sanitation Programme. As long as no waste water can be collected from the houses/hotels the trial and performance testing which includes the monitoring of the treatment process cannot fully be executed. This is why the connection works are currently speeded up to minimize delays in this respect. At the very moment (April 2013) the first commercial plots are being connected to the sewer lines.

1.4. Definitions

The following definitions apply to these terms of reference:

• The Auditor or Technical Auditor: the party contracted to perform the present technical audit.

• The Contracting Authority: Stichting Ontwikkeling Nederlandse Antillen (SONA) represented by Uitvoeringsorganisatie Stichting Ontwikkeling Nederlandse Antillen (USONA)

• The Supervisor: Water en Energiebedrijf Bonaire NV (utility company Bonaire and future operator of sewerage system)

• The Supervising consultant or Supervisor's representative: Hydroplan GmbH, Worms, Germany

• The Contractor: MNO Vervat International b.v. Nieuw Vennep, the Netherlands.

2. OBJECTIVE AND EXPECTED RESULTS OF THE TECHNICAL AUDIT

2.1. Objective

The objective of the technical audit is to provide a factual report on the works carried out by the contractor in charge of the several works contract and the consultant in charge of the associated

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supervision, with regard to the organisational, technical, contractual and financial aspects, during the implementation of the project.

The auditor shall provide to the Contracting Authority, the Supervisor and the European Commission with a general review of the works execution based on the latest design and provide any recommendations to remedy errors that could have occurred or which can lead to improvements in implementation and report on the factual results of the project.

2.2. Expected Results

The expected result of the technical audit is a factual report - as specified at 2.1 above (objectives) - with regard to the following technical aspects of the: Preparation phase:

a. the correct application of the rules governing the procurement of the works contract. Implementation phase:

b. the steady execution of the works carried out under the projects, together with the associated supervision,

c. the sound organisation of the works execution,

d. the quality of the works carried out, in conformity with the contract’s technical specifications and in accordance with the best practice in the sector,

e. the project expenditures are justified and were foreseen in the project budget,

f. the sound management of the project, to ensure that each party duly meets its contractual obligations and to mitigate the risk of claims, litigation and/or disputes.

g. the project is implemented within budget allocation and completed within the contractual period of performance,

The auditor shall report any anomaly, error or risk that could affect these objectives and make the appropriate recommendations to prevent or remedy them. All experts working under the present contract must be independent and free from conflicts of interest in the responsibilities attributed to them.

3. SCOPE OF WORK

3.1. Specific activities

The technical auditor will examine and assess the following aspects of the implementation phase:

3.1.1. The conformity and quality of the contractual documents (works and supervision contracts). Checks shall focus in particular on:

• the consistency of the contractual documents,

• the existence and the compliance with the relevant procedures of contractual documents, such as: Administrative Orders, Addendums, Variation Orders, etc.

• works have been executed in accordance with the contractual basis (Administrative Orders, Addendums, Variation Orders, etc…).

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• During the first mission the team will investigate the quality of the project detailed design and the tender documents prepared during the formulation phase and the correct application of the rules governing the works tender evaluation phase of the formulation phase

3.1.2. Perform site visits, during which the auditor will in particular examine:

• the resources deployed on site(s) by the contractor(s) and the supervising consultant (human resources, equipments, means of control, etc.). In particular, the auditor will perform sample checks in order to verify that the equipment used by the contractor(s) is adequate and in relation to the approved programme(s) of work,

• the physical progress of the works to be compared with the contractual programme(s) of works, in order to uncover possible delays. In particular, the auditor will pay attention to the daily/weekly/monthly construction progress records in order to identify potential problems resulting in slow progress.

• the reality and the quality of the setting out of works and its/there adherence to the drawings; the consistency between the approved drawings, the works actually carried out and the quantities accounted in the interim payment certificates,

• the quality of the works in conformity with the contract(s) technical specifications,

• the compliance with the contractual requirements as regards implementation of the followings in accordance with the contract(s) requirements:

− environmental protection plan, − security plan, − quality control (including the checking of internal audit plans, where they exist),

• the project(s) management documents such as: work register, including the list of equipments used daily, relevant measurements books, calculation fiches and as-built drawings approved by the supervision team, minutes of site meetings, works planning , the topographical, geotechnical and every other intermediary tasks' acceptance reports, progress reports of the supervising consultant, any other contractual documents and administrative orders, site correspondence and all correspondences between the contractor(s), the supervising consultant(s) and the administration,

• the site management aspects such as: the quality and efficiency of the topographical and geotechnical teams' deliveries, the laboratory testing and also the adequacy and availability of equipment, etc, In particular, the auditor should inspect the laboratory equipment for calibration and check test procedures methodology for compliance with the project specifications.

• remaining works to be executed and financial forecast of the project,

• whether there are any pre-dispute situations which are likely to result in a claim from the contractor or a site shutdown (the auditor is not, however, a substitute for the claim experts of the supervising consultant(s)).

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The checks and verifications to be performed by the auditor will be carried out using appropriate methods and techniques including but not necessarily limited to: site surveys, measurements, photos and calculations to verify quantities on the basis of statements and documents produced by the contractor(s) and the supervising consultant(s). The auditor may recommend further in-depth measures if deemed necessary. The auditor shall have free access to the supervising consultant's laboratory where, upon approval of the Contracting Authority, he may ask the supervising consultant to carry out additional geotechnical tests. The contractor(s) shall be informed and associated to the process.

3.1.3. The auditor will examine and assess, through appropriate audit methods and techniques, the correctness of the statements, and payment certificates (including requests for advance payments) issued by the works contractors, approved2 by the Supervisor's Representative(s), the Supervisor and the Contracting Authority. Checks shall focus in particular on:

• the measurements performed in accordance with the works contract(s) Special and General Conditions. In particular the auditor will examine whether the works carried out and all materials used on site are measured jointly by the supervising consultant(s) and the contractor(s) using mutually agreed methods and frequencies.

• the consistency of the quantities approved by the supervising consultant(s) in the interim payment certificates with the approved drawings and the quantities actually measured on site.

• the works carried out under "day work" checked by the supervising team(s) in daily record.

• the quality of the works in the various supervision's reports and the actual situation on site complies with the contract technical specifications,

• the built-up of the new unit prices approved during implementation of the works, on the basis of a detailed price breakdown.

• the application of financial penalties in accordance with the contract special and General Conditions.

3.1.4. The auditor will examine and assess, through appropriate audit methods and techniques, whether works supervision is carried out in accordance with the terms of reference of the supervision contract(s) and following standard works supervision procedures. Checks shall focus in particular on:

• the consultant(s)'s Management Information System put in place provides an appropriate basis to inform all parties concerned in a transparent and concise way about the progress of works, the financial situation of the project and about possible difficulties encountered.

• any defects to the works are properly documented by the consultant (site record, administrative order, etc…) and appropriate measures are taken in order to remedy them,

• the contractual delays (to reply to the contractor's queries or assess a claim, to perform joint measurement upon the contractor's request, to issue the interim payment certificates, etc…) are respected,

• the claims submitted by the contractor(s) during the course of the works are evaluated by the supervising consultant(s) in a timely manner and appropriate advice is given to the Supervisor on their validity

2 This task also includes documents which, at the time of the audit, have been issued by the contractor and are in the process of being approved/endorsed.

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3.1.5. The auditor will examine and asses, through appropriate audit methods and techniques, the correctness of the invoices (including the requests for advance payments) issued by the consultant(s) responsible for supervision of the works by virtue of its/there own contract and approved3 by the Supervisor and the Contracting Authority. Checks shall focus in particular on:

• verifying that the supervising consultant(s)' services are/were actually performed,

• the quantities claimed within the supervising consultant(s)'s invoice are consistent with the quantities actually deployed on site(s), in particular with respect to the number of man-hours or man-month worked and the number of monthly fixed-price services (vehicles, office equipment, etc.),

• the actual situation on site(s) (consultant's organisation, offices, laboratory, etc..) is compliant with the contract requirements and the consultant's tender offer,

• the application of financial penalties, if applicable, is in accordance with the contract(s)' Special and General Conditions.

3.1.6. The auditor is expected to propose, at all stages of his assignment, corrective measures that could affect positively the quality of the works and to inform as soon as possible the Contracting Authority and/or the European Commission of any anomalies detected.

3.2. Project management

3.2.1. Responsible body Under Article 23(6) of the Cotonou Agreement,4 the Commission is responsible for the management of the project. Via a Delegation Agreement the project implementation tasks are transferred by the Commission to Stichting SONA. 3.2.2. Management structure

The concerned parties are: • The Contracting Authority of the works contract is SONA/USONA • The Supervisor is The Public Entity of Bonaire. The European Commission (which is

financing this project), is represented by the European Commission Delegation in Guyana.

3 This task also includes documents which, at the time of the audit, have been issued by the office responsible for control of the works and are in the process of being approved/ endorsed.

4 (Article 302 of the Lomé Convention for the 8th EDF and previous EDFs.)

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4. LOGISTICS AND TIMING

4.1. Location

The operational base for the project i.e., the actual construction is on the island of Bonaire, Dutch Caribbean. However given that all files are kept at USONA's office in Curacao the consultant will need to spend part of his time during his missions in Curacao.

4.2. Commencement date & Period of implementation

The consultant shall undertake two (2) audit missions in total and as follows:

− One mission on notification of the contract (by June 2013). − One mission before provisional acceptance takes place now tentatively foreseen in the last

quarter of 2013/early 2014

The first mission will take place shortly after notification of the contract. Expected start date is June 2013.

The missions shall last on average 17 working days, depending on the composition of the team. The first mission can be extended to take account of the time needed for the team to acquaint itself with the project and operators. The head of mission has two days at the EU Delegation of Guyana to prepare the first mission.

An indicative timetable of the various visits is attached to the terms of reference (annex 2). The starting dates and duration of the audits are indicative and may be changed depending on the award of this contract, the commencement of the works and any changes to the performance of the works and service contracts. The auditor shall establish a provisional timetable for missions and their composition on notification of the contract.

The auditor shall confirm the dates and duration of the missions to the Commission for prior agreement at least 4 weeks before the commencement of the mission in question.

Outside his missions in Bonaire, the auditor's head of mission must always be contactable within 72 hours so that he can deliver any opinions requested within the required time.

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REQUIREMENTS

4.3. Personnel

4.3.1. Key experts

The following expert/working days will be required to carry out the audit missions on site:

Category Mission 1

Mission 2

Office Total

Senior Auditor Senior 12 12

Senior Civil/Structural Engineer, Team leader Senior 20 20 10 50

Quantity Surveyor Junior 20 20 6 46

Total 108

The profiles of the key experts for this contract are as follows:

Key expert 1: Senior Auditor

Qualifications and skills

He/she must have a a professional qualification such as ICAN/CIPFA/ACCA or equivalent with specific professional experience of at least ten (10) years in technical/forensic audits. Specific experience of at least eight (8) years is required in audits (forensic or technical) of public infrastructure.

He/she must have an excellent knowledge in assessing contractor's claim, arbitrations, pre-litigation and out of court settlement of international contract matters would be an advantage. Experience with EDF contract is also highly recommended. A very good knowledge of written and spoken English is compulsory. A passive understanding of the Dutch language would be an asset. He/she must be computer literate.

Key expert 2: Senior Civil/Structural Engineer


He/she must have a university degree in civil/structural engineering and general experience of at least ten (10) years in waster water treatment engineering. Specific experience of at least eight (8) years is required in the management, design or supervision of similar works projects, including at least three (3) years in developing countries.

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He/she must have an excellent knowledge of technical audit methods enabling him/her to work in the field of water system supply technology as well as of construction, geo-technology, topography and the site laboratory.

Experience with EDF contract is highly recommended. A very good knowledge of written and spoken English is compulsory. A passive understanding of the Dutch language would be an asset. He/she must be computer literate.

Key expert 3: Junior Quantity Surveyor


He/she must have university degree in civil engineering. Specific experience of at least three (3) years is required in measurement of major works contracts of similar character. Experience with EDF contracts is also highly recommended.

Experience with assessment of claims related measurement submissions would be considered an advantage.

A very good knowledge of written and spoken English is compulsory. A passive understanding of the Dutch language would be an asset. He/she must be computer literate.

4.3.2. Support staff & backstopping Backstopping and support staff costs must be included in the fee rates of the experts.

4.4. Office accommodation

Appropriate office accommodation is to be provided by the auditor. The costs of the office accommodation are to be covered by the fee rates of the experts.

4.5. Facilities to be provided by the Consultant

The auditor shall not accept any logistical arrangements – other than those provided for in this contract – offered to him by any party which would compromise his independence vis-à-vis the companies audited (works supervision offices and public works companies) or the confidentiality of his work.

The auditor shall be fully responsible for providing his staff with work and accommodation premises in Curacao and Bonaire to enable them to carry out their mission in the best possible logistical conditions. The auditor shall ensure that experts have the requisite equipment and resources, notably sufficient administrative, secretarial and interpreting provision to enable them to concentrate fully on their assignment.

4.6. Equipment

No equipment is to be purchased on behalf of the Contracting Authority / beneficiary country as part of this service contract or transferred to the Contracting Authority / beneficiary country at the end of this contract. Any equipment related to this contract which is to be acquired by the beneficiary country must be purchased by means of a separate supply tender procedure.

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4.7. Documents

The Contracting Authority and the Commission shall provide the auditor (free of charge) with any available studies, reports and information relating to the project(s) subject to this technical audit.

5. REPORTS

5.1. Reporting requirements

5.1.1. Reports

Reports shall be drawn up by the auditor without the need for a particular request other than these terms of reference, on a regular basis and in accordance with the timetable below (technical audit, visits report, final report).

At the end of each assignment the Auditor shall provide to the European Commission an end of mission aide mémoire on the results of the assignment and site visits. The aide mémoire shall be sent for information to the Contracting Authority.

5.1.2. Specific reports

Specific reports may be requested by the European Commission, according to Article 23(6) of Annex IV to the Cotonou Agreement,5 (e.g. on a draft addendum, on the origin of a reported anomaly, following a particular audit visit, on a claim submitted by the contractor, etc.). Specific reports which are not foreseen in the technical audit assignment will be paid for separately in proportion to the time spent, provide that prior agreement of the European Commission has been obtained. An amendment to the audit contract is foreseen to cover this eventuality.

6.1.3. Timetable and report content

Within 15 days of the end of each assignment, the auditor submits a detailed report containing:

• The findings of the technical audit, comments on the implementation of the project(s) and on the conformity of the operations inspected with the contracts, and the progress made in relation to previous technical audits;

• An analysis of the quality of the works and the rate of progress;

• A financial analysis of the expenditure incurred and the budget of the contracts;

• Recommendations for corrective/mitigation measures to be taken;

• Annexes including, among other things, photographic documentation, a statement of the measures taken on the site, and any other information the Auditor considers useful for his report.

5.2. Submission and approval of progress reports

Technical audit progress reports and final report: an electronic copy in *.pdf format and six (6) hard copies shall be submitted to the European Commission Delegation in Guyana, who shall send it to Contracting Authority (SONA).

5 (Article 302 of the Lomé Convention for the 8th EDF and previous EDFs.)

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Specific reports shall be sent to the European Commission Delegation in Guyana, who shall be responsible for distributing them. Unless otherwise indicated, specific reports shall be submitted in the same way as normal technical audit reports (i.e. in electronic and paper versions).

6. SPECIAL REQUIREMENTS

6.1. Documents

The auditor shall keep an inventory of all the documents made available to him by the Administration and/or by the supervising consultant and/or by the works contractor or produced in the course of the mission. These documents must be returned as soon as copies have been made. The auditor shall analyse and interpret the information provided, which must be treated as confidential.

6.2. Human resources

The auditor shall provide the staff indicated in his technical proposal. The Commission reserves the right, for the duration of the works, to refuse or have replaced any staff whose technical capacities or behaviour are deemed inadequate.

6.3. Professional secrecy

The firm shall be bound by the obligation of professional secrecy during and after its mission.

6.4. Independence

The auditor and his staff shall be completely independent of the parties awarded the works and supervision contracts and of any particular interest in the State of the Contracting Authority.

7. ADMINISTRATIVE INFORMATION

7.1. Methodology

For the purpose of the evaluation, the tenders are required to submit with their offer a succinct methodology (max 6 pages) detailing how they intend to carry out the assignment.

7.2. Others remarks

During contacts with the Bonaire authorities or any other organisation, the consultants will clearly identify themselves as independent consultant and not as an official representative of the European Union or its Programmes.

Annexes

Annex n°1: Engagement Context - Information for the Technical Audit

Annex no 2: Indicative Timetable

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Annex n°1 - Engagement Context - Information for the Technical Audit

1. Relevant country background Bonaire's location and its geological features led to the formation of a fringing reef around the island during the last million years. The island earned a reputation as a prime diving and snorkelling destination. The value of marine tourism to Bonaire Marine Park (BMP) was estimated by Dixon et al.(2000) at $US23.2 million in 1991. Tourism is the main economic pillar of the island.

Bonaire has recognised its marine environment as a natural resource and has, with the establishment of the Bonaire National Marine Park as a National Reserve, taken measures towards its protection.

Despite these attempts the quality of the coral reefs around Bonaire is declining, a trend which was observable throughout the last decade. Live coral cover has decreased and algae growth increased. Recent scientific investigations indicate that one of the main factors for reef declining is (among others factors such as increase of seawater temperature, coral bleaching etc) waste water infiltration from Bonaire's residential coastal plots and hotels.

Bonaire has a limited drainage system through natural and man-made drainage channels towards saliñas (coastal lakes) and directly towards the sea but has no sewage collection and treatment facility. Most households and commercial establishments use septic tanks, cesspits, and leach holes, while only few hotels have an on-site wastewater treatment plant installed (the efficiency of which is unclear). As a result, nutrients dissolved in the sewage may reach the coastal water via infiltration through the porous limestone underground or via run-off. The fringing reef surrounding Bonaire represents a delicate natural resource, which is particularly sensitive to even low levels of nutrients in the water.

Hotels (with a few exceptions) and some private households reuse untreated wastewater from the septic tanks in order to irrigate their gardens. This irrigation water is highly polluted with bacteria, organic content and nutrients and the irrigated gardens are too small to absorb the amount of wastewater which arises during the busy times. Near the coastal zones the surplus of nutrients drains underground and reaches the sea. Sometimes direct inflow from irrigation into the sea takes place because the irrigation system is not properly installed. It is furthermore probable that the wastewater storage capacities of the hotels cannot take up all this wastewater and the surplus runs directly into the sea. The intense algae growth and the appearance of Sphaerotilus in the harbour lagoons indicate this practice. Reef damage occurs as a consequence.

More than a decade ago the idea of counteract the degrading fringing reef was formulated. This resulted in a Financing Agreement signed between the European Commission and the former Netherlands Antilles, committing the remainders of the 8th EDF funds (transferred to the 9th EDF) to this project (approximately 19.6 million €). The government of the Netherlands, through the Ministry of Infrastructure & the Environment is contributing to the funding of the programme (5 million €) and the latter ministry is now (after the constitutional change) involved in both technical implementation issues and policies (legislation) regarding the management and exploitation of the sewerage system and the WWTP

2. Current state of affairs in the relevant sector Implementation of the Sewerage and the Treatment Facility, current state of affairs The contractor actualized (as part of the contract conditions) the Feasibility Study (2004 and updated in 2009) made by Dorsch Consultants GmbH and as a consequence of a growing population some design parameters of the sewerage and the treatment facility had to be adapted. This design update was ready early 2011 and was /is being implemented as such. At present (April 2013), nearly 2.5 years after the contract was signed (September 16th 2010) the contractor proceeds

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with the last parts of the works at the Treatment Plant. During 2012 is became obvious that the contractor could not finish the project in the contractual 2 years performance time. This meant also that the contractual performance time of the supervision had to be extended. SONA and the TAO requested the Commission to extend the period of execution, as defined in the Financing Agreement (ANNEX II, Art. 3.2), with one year (till December 31st, 2013) which was granted by the Commission. The sewerage is now completed and the EME installations at the four vacuum stations and the booster station are being checked for energizing and functional testing. The concrete water retaining structures on the WWTP are built and await the final water tightness testing. Repair and maintenance manuals are almost all submitted for verification by the Supervisor. These form all part of the pre-commissioning phase. (Partial) commissioning is expected later in 2013 after which the one year maintenanance period starts. At the very moment the house connections are being installed (under a separate contract) to be connected with the main sewer lines. The connection works of the houses/commercial buildings (hotels) do not form part of the 8th /9th EDF Programme and are separately financed by the Dutch Ministry of Infrastructure and the Environment. The realization of the house/hotel connections is included as a Special Condition to the Financing Agreement for the EDF co-funded Bonaire Sewerage & Sanitation Programme. As long as no waste water can be collected from the houses/hotels the trial and performance testing which includes the monitoring of the treatment process cannot fully be executed. This is why the connection works are speeded up to minimize delays in this respect. 3. Related programmes and other donor activities EU cooperation objectives

According to Article 198 of the Treaty on the Functioning of the European Union (TFEU) the Association of the Overseas Countries and Territories, the objectives of the Association are to promote the economic and social development of the countries and territories and to establish close relationships between them and the Union as a whole.

The detailed arrangements of the association have been laid out in consecutive Council Decisions on the Association of the Overseas Countries and Territories (OAD) with the European Community. The policy agenda in Chapter 3 of the present single territorial programming document is in line with Article 15 e) of the above mentioned Council Decision, stipulating cooperation through support programmes in 'drinking water supply and sanitation services contributing directly to human resources development by improving the state of health, and this increasing the productivity of people who do not already have access to these services; the continuing need to extend basic services in water, sanitation and transport to both urban and rural populations must be addressed in environmentally sustainable ways' In line with the above mentioned article 15e the local government on Bonaire selected the present project on sanitation services

Bonaire's Government Programme is based on the principles of sustainable development of the island. It is currently completing its Integral Master Plan (that would cover the period up to 2025) and it plans to prepare a Tourism Master Plan. Although Bonaire formulated a Strategic Tourism Plan it still lacks a coordinated multi sector document for tourism linked to an overall development plan for the island. Considering the fact that the economy of Bonaire is mainly depending on Tourism, and in particular dive tourism, Bonaire's unique and protected coral reefs as well as the surrounding environment are Bonaire's main economic asset and tourist attraction. The increase of the number of tourists, including the rapid increase of cruise tourism further aggravated the stress on the environment (in particular because of untreated waste water). Therefore conservation of Bonaire's marine habitat is imperative and of utmost urgency and tackling its pollution problem would benefit both the tourism and the quality of living of the population on the island.

The Dutch Ministry of Infrastructure and the Environment has been lending assistance to development of the legal framework. This is expected is to include: VROM-BES framework law (expected to be in force in June, 2011), an Environmental Business code (March 2011), Building code (July 2011) and Waste Water and Irrigation (Island regulations). The business and building

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codes, drafted by Dutch Ministry will apply to Bonaire and deal with business- and hotel waste water. On Bonaire the private house waste water effluent is covered under the island regulations. All hotels and houses in the protected area on Bonaire will be obliged to connect to the new sewerage system. Some hotels have their own treatment plants, but these must be disconnected (semi-treated waste is not acceptable). Bonaire reserved some funds in its budgets for house connections and exploitation of the sanitation facilities as stated in the Financial Agreement for the 9th EDF as signed between Bonaire and the European Commission. However it is the received funding (2012) from the Dutch Ministry of Infrastructure and the Environment that made it possible to connect the premises in the coastal area and facilitate the future management organization WEB. This project is actually ongoing.

4. Project overall objective According to the Financing Agreement between the European Commission and the former Netherlands Antilles, which in turn is complemented by the Delegation Agreement, the overall and specific objectives of the project, as stated in the Logical Framework, are as follows: The overall objective of the Project is to safeguard Bonaire’s marine environment (coral reefs) in a sustainable way, which in turn provides an important contribution to the island’s economy (tourism). The special objectives are: - The safe and hygienic collection and treatment of sewage water followed by re-use of the effluent

for agricultural and horticultural purposes. - To enable the island government and a management company (WEB the Water and Electricity

Company of Bonaire and responsible for services in the water sector) to deliver suitable and timely services on a sustainable basis.

Budget restrictions which forced the Delegatee Body to a Negotiated Procedure, resulted in the reduction of the original “results to be expected”. The project’s implementation is now expected to achieve the following results: The results to be expected are: - A sustained, centralized sewer system with waste water treatment plant. - A vacuum network driven by 4 vacuum pump stations in 4 coastal catchment areas, serving more

than 4000 persons daily (787 households and 89 commercial parcels). - A return pressure pipeline with effluent to be used for irrigation purposes in the coastal zone. - Increased capability to manage the operation and maintenance of the new sewerage system. - Increased technical and organizational capacity and efficiency of the future Management

Company (possibly WEB, now in charge of the water services) for the future waste water treatment scheme.

- Increased public knowledge for all aspects of the project achieved by a comprehensive public information and awareness campaign.

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5. Project indicators

Logical Framework

Intervention Logic Verifiable Indicators Sources of Verification Assumptions and Risks

Overall Objective

Safeguarding of Bonaire’s marine environment (coral reefs) by prohibiting inflow of waste water in the coastal zone and thereby sustaining the island’s economic base.

Nutrient influx in coastal sea water reduced from 15 ton N/yr in 2005 to 7 ton N/yr in 2017 for the sensitive (sewered) coastal zone. Reduction of more than 50% of the present N- load. Results of the 2006/2007 nutrient monitoring show that actual levels of Dissolved Inorganic Nitrogen (DIN) are higher than the value considered safe for coral reef environments. Values higher than this threshold (1 micromol/liter) have destroyed reefs in different areas of Hawaii and Bahamas. Note that due to an unexpected increase in population and tourism after 2006 the projected N loads are expected to be higher than the prognoses of 25% increase by 2017. The capacity of the main sewerage lines and inletstructure at the treatment plant should be adapted accordingly in order to obtain the target of 7 ton N/yr

- Alterra Wageningen UR, 2006 Critical Review of the Proposed Irrigation and Effluent Standards for Bonaire - M. Wieggers, 2007 Impact of Increased Nutrient Input on Coral reefs on Bonaire and Curacao - STINAPA Marine Park reports and monitoring data - Monitoring data of Local Government and the Dutch Ministry of Infrastructure and the Environment. - Reports from designer and local government on increase of population and visitors.

Waste water treatment of connected coastal zone households and hotels has a positive and quantifiable effect on the reef condition. Sea temperature rise (global warming) does not accelerate and destroy the reef

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Project Purpose

To implement the 9th EDF/ Dutch govt. financed sewerage and sanitation project in the sensitive coastal areas of Bonaire.

Installation of a HDPE irrigation pressure effluenet return line to the coastal zone for irrigation purposes

Installed Sewerage and Treatment facilities are operational. Effluent water is present and at the disposal of hotels.

Project evaluation and ROM reports.

Steering Committee minutes

Site visits

See hereunder in text

6. Assumptions and Risks underlying the project intervention Assumptions and risks The mayor assumption after the signing of the Works Contract was, that after startup delays, the contractor would be able to execute the complete project inclusive testing within the contractually defined execution time. At this moment (December 2012) the hotel/house connections are now being installed, which is an important prerogative for the success of the programme. Although this was a critical point in the execution of the programme it is now solved and it is expected that early 2014, after testing period, the complete works will be fully operational. As sustainability of the results of the Action requires budgetary and operational guarantees, it is of the utmost importance that the operation & maintenance budget, inclusive future amortization is available. A tariff system for sewerage connection water, based on a local ordinance, has to be in place. The VROM-BES law as prepared by the Dutch Ministry of Infrastructure and the Environment is now in force an the latter Ministry has provided funds allowing the final local ordinances on connection and tariffs to be drafted and hopefully be in place during 2013. Furthermore, it was also assumed that eventually the capacity building of the proposed management organization for the sewerage network and treatment plant would be effectuated. This assumption is now reality as the Dutch Ministry of Infrastructure and the Environment has also provided fund for the first yaer of operation of the sewerage and treatment facilities. Once the new environmental ordinances are in place, it is assumed that sewage control by the local authorities is such that the degradation of the reef by human actions will be stopped and that healthy conditions will prevail. The effect of the constitutional change in terms of new regulations enforced could not be foreseen at the moment of the signing of the Financing Agreement. USONA has discussed these items on several occasions with the Bonaire Administration and the responsible Dutch Ministries. Due to the recent funds obtained from the latter Dutch Ministry the obligations of the Beneficiary towards the European Commission can now and will now be resolved which will ensure a future sustainable operation of the sewerage and treatment facilities

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Annex no 2: Indicative Timetable Activity Place Duration

(working days) Dates Experts

Preparation Mission 1 Home base 2 Week 24 1 & 2

MISSION 1 • Including travel to Bonaire and

Guyana (both experts) • Briefing EU Delegation and NAO

site visits • Site investigation

Bonaire

20 days

Week 24/25 – 27/28

2 & 3

Preparation of the draft report Home based

3 days Week 27/28 1 (2 days), 2 & 3

Submission draft report on mission 1

10 working days after end of mission

Week 29/30

Comments from the EU Delegation, NAO and the Supervisor

10 working days Week 31/32

Finalisation final report mission 1 Home based

2 days

Week 31/32 1

Submission final report mission 1 5 working days after comments

Week 31/32

Preparation Mission 2 Home base 2 Mid-Dec 2013 to mid-Jan 2014

1 & 2

Mission 2 TENTATIVELY • Including travel to Bonaire • Site visit/investigation meetings

with stakeholders and project management

• Meeting with EU Delegation and stakeholders

Bonaire

20 days

2 & 3

Preparation of the draft report Home based

3 days 1 (2 days), 2 & 3

Submission draft report on mission 2

10 days after end of mission

to be decided

Comments from the EU Delegation, NAO and the Supervisor

10 working days to be decided

Finalisation final report mission 2

Home based

2 day to be decided 1

Submission final report mission 2 5 working days after comments

Week 31/32

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