RECORD OF DISCUSSIONS
BETWEEN THE JAPAN INTERNATIONAL COOPERATION AGENCY
AND AUTHORITIES CONCERNED OF THE GOVERNMENT
OF THE REPUBLIC OF THE PHILIPPINES
ON JAPANESE TECHNICAL COOPERATION
FOR THE SMALL WATER DISTRICTS IMPROVEMENT PROJECT

With regard to the Minutes of Meeting of the Preparatory Study signed on February 14, 2005, the Japan International Cooperation Agency (hereinafter referred to as "JICA") had a series of discussions through the Resident Representative of JICA Philippine Office with the Philippine authorities concerned on measures to be taken by JICA and the Government of the Republic of Philippines for the successful implementation of the Small Water Districts Improvement Project.

As a result of the discussions, JICA and the Philippine authorities concerned agreed on the matters referred to in the document attached hereto.

Manila, April 15, 2005

SHOZO MATSUURA Resident Representative, Japan International Cooperation Agency,Philippine Office

LORENZO H. JAMORA Administrator, Local Water Utilities Administration,Republic of the Philippines

THE ATTACHED DOCUMENT

1. The Government of the Republic of the Philippines will implement the Small Water Districts Improvement Project (hereinafter referred to as "the Project") in cooperation with JICA.

2. The Project will be implemented in accordance with the Master Plan, which is given in Annex I.

II. MEASURES TO BE TAKEN BY JICA

In accordance with the laws and regulations in force in Japan, JICA will take, at its own expense, the following measures according to the normal procedures under the Colombo Plan Technical Cooperation Scheme.

1. DISPATCH OF JAPANESE EXPERTS
JICA will provide the services of the Japanese experts as listed in Annex II.

2. PROVISION OF EQUIPMENT AND NECESSARY EXPENSE
JICA will provide necessary equipment and other materials (hereinafter referred to as "the Equipment") as listed in Annex III. The Equipment will become the property of the Government of the Republic of the Philippines upon being delivered C.I.F. (cost, insurance and freight) to Philippine authorities concerned at the ports and/or airports of disembarkation.

JICA will likewise provide necessary expense for the implementation of urgent rehabilitation and expansion works for the selected water districts and for training program during the Project period.

3. OTHERS
JICA may provide other forms of assistance mutually agreed upon that are necessary for the implementation of the Project.

III. MEASURES TO BE TAKEN BY THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES

1. The Government of the Republic of the Philippines will take necessary measures to ensure that the self-reliant operation of the Project will be sustained during and after the period of Japanese technical cooperation, through full and active involvement in the Project by all related authorities, beneficiary groups and institutions.

2. The Government of the Republic of the Philippines will ensure that the technologies and knowledge acquired by the Philippine nationals as a result of Japanese technical cooperation will contribute to the economic and social development of the Philippines.

3. The Government of the Republic of the Philippines will grant in Philippine privileges, exemptions and benefits to the Japanese experts referred to in II-1 above and their families, which are no less favorable than those accorded to experts of third countries working in the Philippines under the Colombo Plan Technical Cooperation Scheme.

4. The Government of the Republic of the Philippines will ensure that the Equipment referred to in II-2 above will be utilized effectively for the implementation of the Project in consultation with the Japanese experts referred to in Annex II.

5. In accordance with the laws and regulations in force in the Philippines, The Government of the Republic of the Philippines will take necessary measures to provide at its own expense:

(1) Services of the Philippines counterpart personnel and administrative personnel as listed in Annex IV;

(2) Land, buildings and facilities as listed in Annex V;

(3) Supply or replacement of machinery, equipment, instruments, vehicles, tools, spare parts and any other materials necessary for the implementation of the Project other than the Equipment provided by JICA under II-2 above;

(4) Assistance to find suitably furnished accommodation for the Japanese experts and their families.

6. In accordance with the laws and regulations in force in the Philippines, The Government of the Republic of the Philippines will take necessary measures to meet:

(1) Expenses necessary for transportation within the Philippines of the Equipment referred to in II-2 above as well as for the installation, operation and maintenance thereof;

(2) Customs duties, internal taxes and any other charges, imposed in the Philippines on the Equipment referred to in II-2 above; and

(3) Running expenses necessary for the implementation of the Project.

IV. ADMINISTRATION OF THE PROJECT

1. The LWUA Administrator, as the Project Director, will bear overall responsibility for the administration and implementation of the Project. The LWUA Deputy Administrator who will act as the Project Deputy Director will assist the Project Director.

2. The LWUA Head Counterpart of the Project, as the Project Manager, will be responsible for the managerial and coordination matters of the Project.

3. The LWUA Other Counterpart of the Project, as the Project Staff, will be responsible for the technical matters of the Project.

4. General Managers of the Water Districts, as the target group of the Project, will actively participate in the implementation of project activities.

5. The Japanese experts will provide necessary recommendations and advice to the Project Director, the Project Deputy Director, the Project Manager, the Project Staff and the General Managers of Water Districts on any matters pertaining to the implementation of the Project.

6. For the effective and successful implementation of technical cooperation for the Project, a Joint Coordinating Committee will be established whose functions and composition are described in Annex VI.

V. JOINT EVALUATION

Evaluation of the Project will be conducted jointly by JICA and the Philippine authorities concerned, at the middle and during the last six months of the cooperation term in order to examine the level of achievement.

VI. CLAIMS AGAINST JAPANESE EXPERTS

The Government of the Republic of the Philippines undertakes to bear claims, if any arises, against the Japanese experts engaged in technical cooperation for the Project resulting from, occurring in the course of, or otherwise connected with the discharge of their official functions in the Philippines except for those arising from the willful misconduct or gross negligence of the Japanese experts.

VII. MUTUAL CONSULTATION

There will be mutual consultation between JICA and the Government of the Republic of the Philippines on any major issues arising from, or in connection with this Attached Document.

VIII. MEASURES TO PROMOTE UNDERSTANDING OF AND SUPPORT FOR THE PROJECT

For the purpose of promoting support for the Project among the people of the Philippines, The Government of the Republic of the Philippines will take appropriate measures to make the Project widely known to the people of the Philippines.

IX. TERM OF COOPERATION

The duration of the technical cooperation for the Project under this Attached Document will be from July 2005 to June 2010.

ANNEX I MASTER PLAN

ANNEX II LIST OF JAPANESE EXPERTS

ANNEX III LIST OF EQUIPMENT

ANNEX IV LIST OF PHILIPPINE COUNTERPARTS

ANNEX V LIST OF LAND, BUILDINGS AND FACILITIES

ANNEX VI JOINT COORDINATING COMMITTEE

1. Overall Goal
1) Selected water districts are able to provide safe and sufficient water to local communities in a sustainable way.

2) Water supply services and management of target water districts are improved.

3. Project Purpose
Water supply services and management of selected small and less financially viable water districts are improved.

4. Outputs
1) Profiles of target WDs are prepared and the WDs to be improved by the Project are selected.
2) Plans for improvement of management and services of selected WDs are prepared.
3) Water supply facilities of selected WDs are improved.
4) Management and Operation/Maintenance skills of water supply service of selected WDs are strengthened.
5) LWUA's technical support for target WDs is enhanced.

5. Activities
1-1) Prepare a long list of target WDs ("target WDs").
1-2) Conduct a fact-finding survey and analysis on target WDs.
1-3) Develop criteria to select the WDs to be improved by the Project.
1-4) Determine the WDs to be improved by the Project ("selected WDs").

2-1) Conduct a workshop for orientation and guideline for selected WDs to prepare management and facility improvement plan.
2-2) Assist selected WDs in the preparation of an improvement plan, including a monitoring plan to ensure the long-term financial viability of the WDs.

3-1) Conduct detailed design and prepare procurement plans in consultation with WDs.
3-2) Conduct tendering.
3-3) Construct water supply facilities in collaboration with WDs.

4-1) Conduct training courses for target WDs personnel on management and O/M skills.
4-2) Conduct on-the-job training for selected WDs personnel on planning, design, construction supervision, management and O/M.

5-1) Transfer effective technologies for the improvement of service and management condition of WDs through the entire project activities.
5-2) Advise LWUA on effective policy/program for the strengthening of target WDs.

ANNEX II
LIST OF JAPANESE EXPERTS

1. Japanese Experts
(1) Chief Advisor
(2) Coordinator
(3) Specialist for Management & Finance
(4) Specialist for Water Supply Facilities Design
(5) Specialist for Hydrogeological and Groundwater Development
(6) Specialist for O/M of Water Treatment Plant

* Other expert(s) will be dispatched when necessity arises for the effective implementation of the Project.

ANNEX III
LIST OF EQUIPMENT

1. Water quality test kit / equipment for selected WDs
2. P/Cs for tariff collection & management for selected WDs
3. Other necessary equipment and materials for technical cooperation

ANNEX IV
LIST OF PHILIPPINE COUNTERPART AND ADMINISTRATIVE PERSONNEL

1. Project Director
Administrator, LWUA

2. Project Deputy Director
Deputy Administrator, LWUA

3. Project Manager
LWUA Head Counterpart

4. Project Staff
LWUA Counterpart
l Specialist for Management & Finance
l Specialist for Water Supply Facilities Design
l Specialist for Hydrogeological and Groundwater Development
l Specialist for O/M of Water Treatment Plant
l Specialist for Training

5. Administrative personnel

ANNEX V
LIST OF LAND, BUILDING AND FACILITIES

1. Facilities such as laboratory and equipment necessary for Project activities

2. Office space and facilities necessary for JICA Experts

3. Land, buildings and necessary facilities in the water districts for the project activities

4. Other facilities mutually agreed upon as necessary

ANNEX VI
JOINT COORDINATING COMMITTEE

1. Functions
The Joint Coordinating Committee will meet at least once a year and whenever necessity arises, to:
(1) formulate the Annual Work Plan under the framework of the Project;
(2) review the overall progress and annual expenditures of the Project as well as the achievement of the Annual Work Plan mentioned above; and
(3) review and exchange views on the major issues arising from or in connection with the Project.

2. Composition
(1) Chair Person: Administrator, LWUA
(2) Members from Philippine side
- Administrator, LWUA (Project Director)
- Deputy Administrator, LWUA (Project Deputy Director)
- LWUA Head Counterpart (Project Manager)
- Representative, National Economic and Development Authority
- Personnel concerned to be decided by the Philippine side

(3) Members from Japanese side
- Japanese Experts
- Resident Representative, JICA Philippine Office
- Personnel concerned to be decided by the Japanese side

3. Note
(1) Officials of the Embassy of Japan and General Managers of selected Water Districts may attend a Joint Coordinating Committee meeting as observers.
(2) Persons who are invited by the Chairperson may attend a Joint Coordinating Committee meeting as observers.