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Al-qasim
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Saad Hasan



Joined: 12 May 2009
Last Visit: 04 Sep 2010
Posts: 7
Location: San Francisco
PostPosted: Mon Aug 03, 2009 3:01 pm    Post subject: Feedback on contract Reply with quote

Project Team,

First of guys, fantastic work driving the project this far, laying out things so cleanly in the contract, and driving this to a finish. We have appended some consolidated comments on the contract from the EC call this weekend, so let us know your thoughts, and once we have incorporated this round of edits we should be ready to move on to signing and funding.



1. Budget

a. Update with latest costing estimates per Ahmedís file on the forum

2. Phasing

a. Currently structured as 2 phase of 1 plant, then 14

b. Can we structure as 3 phases - 1 plant, 4 plants, then 10 plants?

3. Milestones

a. Between Phase I & II

i. Photos of plant and list of beneficiaries after phase I

ii. Is there any way to talk briefly with the beneficiaries to get a sense of whether the plant is useful/working well?

b. Between phase II and III

i. Photos and list (same as 3ai)

ii. Site visit from ADP

1. Ensure enough demand in valley for 10 more plants before disbursement of phase III

4. Metrics & Tracking

a. Do we think daily tracking is realistic or are we more likely to get weekly?

b. Can we set minimum production targets in contract for them to hit for weekly production of gas so after phase I and phase II when we review, we know what to compare to make sure plants are functioning well?

i. We had done work around this already in terms of ideal/full potential output I think

c. Can we add the # of beneficiaries target in contract

i. I think they had mentioned reaching 24 people per plant ie 3 families

5. ROI

a. What metrics do we have to hit as a project team to be happy?

b. Would be good just to have for ADP data point what the implied ROI is from the project. There are a lot of soft benefits (health, electrification, prevention of deforestation), but perhaps we can just state the retail price of gas saved by using bio gas plants to get to at least one form of ROI on the 7lacs we put into the project (assuming all goes to plan)

6. Other

a. When do we start construction given the monsoon issue?

b. Once we get above points finalized, we can move on walking the NGO through the contract and their responsibilities, signing, and then finally money transfer

c. Letís also discuss the plan for fund-raising for the remaining plants once the contract is signed and the first plant is on its way


Please let us know your thoughts on the above. Again, thanks so much for your dedication and high quality work so far.



Best,

Saad
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Nida Alavi



Joined: 01 May 2009
Last Visit: 25 Feb 2010
Posts: 5
Location: Karachi, Pakistan
PostPosted: Thu Sep 17, 2009 10:46 am    Post subject: Response to EC comments from PT Reply with quote

Hey Folks
Sadia was having some trouble accessing the forum so uploading this on her behalf for the good of the order.

Dear EC,

For starters let me apologise for a very late reply, but we were all travelling and didn't get a chance to put our thoughts together about your queries until recently.

The following is a detailed reply to all your questions/comments. It would be great if you could please mull over these suggestions and let us know if you agree with the changes we've suggested so that the contract can be updated as required. Could you also please answer some basic questions (see below) that we were confused about.


Hope this helps!


Many Thanks,

Sadia A


1. Budget

a. Update with latest costing estimates per Ahmedís file on the forum

∑ The contract has to be updated with the latest cost estimates.

∑ However, Al-Qasim has agreed to bear the inflation costs (if any), during construction, on the bases of being reimbursed later. What is ADPís stand on providing funds in the context of inflation and fluctuating prices? Do we fund the cost at the time of signing contracts or take responsibility for fluctuations in price during construction?
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2. Phasing

a. Current structured as 2 phase of 1 plant, then 14

b. Can we structure as 3 phases - 1 plant, 4 plants, then 10 plants

∑ Al-Qasim wants to begin with at least 2 plants. This makes sense, as it will be easier to measure the social outcome and see the returns.

∑ Thus, the PT suggests the construction and funding be done in 3 phases: 2 plants, 4plants, 5 plants, 4 plants (contingent on construction capacity and need)?

∑ The 3rd phase of construction will have 2 parts: 5plants in the first phase and 4 plants in the second. The logic for 2 parts to the third construction phase instead of two separate phases altogether is that by this point weíll have a good enough idea of the legitimacy and returns on the investments weíre making. Therefore, funds for the remaining 9 plants can be approved collectively but disbursed in two parts since Al-Qasim is unlikely to be constructing 9 plants simultaneously.


3. Milestones

a. Between Phase I & II

i. Photos of plant and list of beneficiaries after phase I

* Al-Qasim will sending us photos of the construction process and of course, of the final plants after the completion of each phase.
* As for beneficiaries, we've got the complete report slated for post construction which covers the list of beneficiaries after each phase.


ii. Is there any way to talk briefly with the beneficiaries to get a sense of whether the plant is useful/working well?

* Maybe we can specify this in the site visit, conversations with the beneficiaries and their satisfaction will be included.


b. Between phase II and III

i. Photos and list (same as 3ai)

* As mentioned earlier, the contract requires Al-Qasim to send pictures of different phases in construction and of the final plant after every phase.

ii. Site visit from ADP

1. Ensure enough demand in valley for 10 more plants before disbursement of phase III

* Ahmad's first visit pretty much confirmed this, but it can be added as a formality into the follow up visit to further legitimize the last tract of funding.



4. Metrics & Tracking

a. Do we think daily tracking is realistic or are we more likely to get weekly?

* The daily tracking isnít anything too demanding. The purpose is more for them to document any anomalies along the way which may be affecting construction.
* Maybe we can have them document daily for the first phase and weekly for the rest since it'll become harder to document daily when they have multiple plants being constructed.


b. Can we set minimum production targets in contract for them to hit for weekly production of gas so after phase I and phase II when we review, we know what to compare to make sure plants are functioning well?

i. We had done work around this already in terms of ideal/full potential output I think

* Minimum production targets will not be an easy chore for them to measure or keep track of.
* However, we can measure minimum production by the number of beneficiaries?


c. Can we add the # of beneficiaries target in contract

i. I think they had mentioned reaching 24 people per plant ie 3 families

* Yes, but we should mention the number of individuals (i.e 24 people) rather than the number of families.


5. ROI

a. What metrics do we have to hit as a project team to be happy?

* The minimum number of beneficiaries should take care of this?

b. Would be good just to have for ADP data point what the implied ROI is from the project. There are a lot of soft benefits (health, electrification, prevention of deforestation), but perhaps we can just state the retail price of gas saved by using bio gas plants to get to at least one form of ROI on the 7lacs we put into the project (assuming all goes to plan)

* The chamber can hold up to 12 sq ft of gas and the price of commercial gas is around Rs. 80/kg.
* Ahmad is working on a spreadsheet for ROI that will be attached to the contract.




6. Other

a. When do we start construction given the monsoon issue?

∑ Construction can commence by mid-September.



b. Once we get above points finalized, we can move on walking the NGO through the contract and their responsibilities, signing, and then finally money transfer

∑ Yes, sounds good!


c. Letís also discuss the plan for fund-raising for the remaining plants once the contract is signed and the first plant is on its way

∑ Or, perhaps ask PDDC for help as they are experienced in funding bio-gas plants and are funded by the government.
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Nida Alavi



Joined: 01 May 2009
Last Visit: 25 Feb 2010
Posts: 5
Location: Karachi, Pakistan
PostPosted: Thu Sep 17, 2009 10:49 am    Post subject: And by that token it makes sense to post the EC's comments Reply with quote

Just incase someone would rather refer to the forum to stay abreast, Saad's comments on behalf of the EC.
Cheers, Nida.

Sadia,



Thanks so much for your comments below. I have appended a list of responses from the EC, and we were wondering if you guys had time to hop on a very quick call to discuss the below and finalize the contract such that we can move to disbursement. Please let us know what time works?



Best

Saad

1. Inflation - we have to have some sort of cap or process here for inflation.

a. We donít generally have inflation adjustment clauses in our contracts. It's usually a renegotiation if prices have gone up. I would probably leave it that way for now and add something like "Upon submission of updated quotes and actual expenses, ADP will consider modest increases to the budget for future phases to reflect the impact of inflation".

b. We normally don't account for inflation since the project will take months and not years

2. Phasing:

a. We like the idea of the split in phase 4; makes sense logistically

b. 2 plants may make sense if they are trying to get the building materials in bulk and labor may be cheaper. I am fine with the idea of 2 plants in the first phase but we need to be strict about result tracking and they provide us daily production stats using meter readings

3. Milestones

a. Letís try and get the list of beneficiaries for each plant. Therefore makes sense if they send one post-phase I vs post-project. We will also base our future funding on this (The thought here is just to have some discipline around this)

4. Metrics and tracking

a. We were slightly confused by the minimum production and the difficulty in tracking. We were thinking that this was the purpose of the gas meters we discussed on our call?
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