Document of The World Bank
Report No: ICR00003903
Public Disclosure Authorized IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-75770)
ON A
LOAN
IN THE AMOUNT OF US$163 MILLION
TO THE
REPUBLIC OF INDIA Public Disclosure Authorized FOR AN
ORISSA STATE ROADS PROJECT
February 17, 2017
Transport and ICT Global Practice South Asia Region
Public Disclosure Authorized Public Disclosure Authorized
CURRENCY EQUIVALENTS (Exchange Rate Effective 4 October 2016)
Currency Unit = Indian Rupees (INR) INR 1.00 = US$0.015 US$1.00 = INR 66.53
FISCAL YEAR April 1 – March 31
ABBREVIATIONS AND ACRONYMS AG Accountant General AMS Asset Management System CRN Core Road Network CSC Construction Supervision Consultant EA Environmental Assessment EIRR Economic Internal Rate of Return EMP Environmental Management Plan FM Financial Management GAAP Governance and Accountability Action Plan GOI Government of India GOO Government of Odisha HIV/AIDS Human Immunodeficiency Virus Infection/Acquired Immune Deficiency Syndrome HRD Human Resource Development ICR Implementation Completion and Results Report ICT Information and Communication Technology INT Integrity Group ISAP Institutional Strengthening Action Plan ISR Implementation Status Report IT Information Technology JV Joint Venture M&E Monitoring and Evaluation MIS Management Information System NGO Nongovernmental Organization OPWD Odisha Public Works Department OSRP Odisha State Roads Project OWD Odisha Works Department PAD Project Appraisal Document PAP Project Affected Person PDO Project Development Objective PIU Project Implementation Unit PMU Project Management Unit PPP Public-Private Partnership R&R Resettlement and Rehabilitation
RAM Road Asset Management RAMS Road Asset Management System RAP Resettlement Action Plan RPDAC Rehabilitation and Periphery Advisory Committee RSID Road Sector Institutional Development RTI Right to Information SLEC State-Level Empowerment Committee TOR Terms of Reference TDP Tribal Development Plan VLGC Village Level Grievance Redressal Committee
Senior Global Practice Director: Jose Luis Irigoyen Practice Manager: Karla Gonzalez Carvajal Project Team Leader: Rajesh Rohatgi ICR Team Leader: Olatunji Ahmed
INDIA Orissa State Roads Project CONTENTS
Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph
1. Project Context, Development Objectives and Design ...... 1 2. Key Factors Affecting Implementation and Outcomes ...... 7 3. Assessment of Outcomes ...... 15 4. Assessment of Risk to Development Outcome ...... 19 5. Assessment of Bank and Borrower Performance ...... 20
6. Lessons Learned...... 22 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners...... 24 Annex 1. Project Costs and Financing ...... 26 Annex 2. Outputs by Component...... 27 Annex 3. Economic and Financial Analysis ...... 29 Annex 4. Bank Lending and Implementation Support/Supervision Processes ...... 33 Annex 5. Beneficiary Survey Results ...... 35 Annex 6. Stakeholder Workshop Report and Results ...... 36 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ...... 40 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders ...... 52 Annex 9. Summary of Social Safeguards Activities ...... 53 Annex 10. List of Supporting Documents ...... 59 MAP ...... 61
DATASHEET
A. Basic Information
India Orissa State Roads Country: India Project Name: Project Project ID: P096023 L/C/TF Number(s): IBRD-75770 ICR Date: 10/17/2016 ICR Type: Core ICR Lending Instrument: Specific Investment Loan Borrower: Republic of India Original Total US$250.00 million Disbursed Amount: US$79.28 million Commitment: Revised Amount: US$163.00 million Cancelled Amount US$87.00 million Environmental Category: A Implementing Agencies: Orissa Works Department Cofinanciers and Other External Partners: None
B. Key Dates
Revised / Actual Process Date Process Original Date Date(s) Concept Review: 11/03/2005 Effectiveness: 04/15/2009 04/15/2009 01/31/2013 and Appraisal: 11/20/2007 Restructuring(s): - 06/24/2015 Approval: 09/30/2008 Mid-term Review: 10/31/2012 08/28/2014 Closing: 12/31/2014 06/30/2016
C. Ratings Summary
C.1 Performance Rating by ICR Outcomes: Moderately Unsatisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Unsatisfactory Borrower Performance: Unsatisfactory
C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Moderately Quality at Entry: Government: Unsatisfactory Unsatisfactory Moderately Implementing Quality of Supervision: Unsatisfactory Unsatisfactory Agency/Agencies: Overall Bank Moderately Overall Borrower Unsatisfactory Performance: Unsatisfactory Performance:
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C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments (if Indicators Rating Performance any) Potential Problem Project Quality at Entry No None at any time (Yes/No): (QEA): Problem Project at any Quality of Supervision Yes None time (Yes/No): (QSA): DO rating before Unsatisfactory Closing/Inactive status:
D. Sector and Theme Codes
Original Actual Sector Code (as % of total Bank financing) Public administration- Transportation 5 5 Rural and Inter-Urban Roads and Highways 95 95
Theme Code (as % of total Bank financing) Infrastructure services for private sector development 100 100
E. Bank Staff
Positions At ICR At Approval Vice President: Annette Dixon Isabel M. Guerrero Country Director: Junaid Kamal Ahmad Rachid Benmessaoud Practice Director/Manager: Pierre Guislain/K. Gonzalez Carvajal G. George Tharakan Project Team Leader: Rajesh Rohatgi Binyam Reja ICR Team Leader: Olatunji Ahmed ICR Primary Author: Arun Banerjee
F. Results Framework Analysis
Project Development Objectives (from Project Appraisal Document) The Project Development Objective (PDO) in the Project Appraisal Document (PAD) was to remove transport bottlenecks in targeted transport corridors for greater investment and economic and social development activities in the State of Orissa. The PDO will be achieved by (a) improving the performance, safety, and carrying capacity of priority roads in the state in an environmentally and socially sustainable way; (b) increasing the role of the private sector in road infrastructure financing and management; (c) assisting Government of Orissa (GOO) to establish conducive policy, institutional, and governance framework to improve road sector management, financing, and safety.
ii Revised Project Development Objectives (as approved by original approving authority)
(a) PDO Indicator(s)
Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years (a) PDO Indicators Indicator 1: Vehicle operating costs in project corridors reduced by 15% Value Cars - 4.29%; Cars - 3.62%; Trucks (quantitative or Trucks - 10.22%; - 8.77%; Buses - — No data qualitative) - Buses - 8.70% 7.10% (Unit - %) Date achieved 8/11/2008 8/11/2008 06/30/2016 Comments Not achieved. This indicator was dropped during the June 2015 project (incl. % restructuring, one year before extended project closing date. achievement) Indicator 2: Vehicle speed in project corridors increased by 36% Value (quantitative or Cars - 45 km/hr; Cars - 60 km/hr; Cars - 59.49 km/hr; qualitative) - Trucks - 35 km/hr; Trucks - 45 km/hr; — Trucks - 44.36 km/hr; (Unit - %) Buses - 40 km/hr; Buses - 55 km/hr; Buses - 54.37 km/hr; Date achieved 8/11/2008 8/11/2008 — June 30 2016 Comments Partially achieved. 32.5% increase in vehicle speed was achieved on the two road (incl. % links completed out of six road links planned (project component originally achievement) included three corridors of 461 km, out of which 150 km was completed). Favorable response by firms about the condition of road corridors improved under Indicator 3: the project (dropped) Value (quantitative or None None — — qualitative) Date achieved 8/11/2008 — — — Not assessed because there was neither a baseline nor target data to measure this Comments indicator. It was dropped during 2013 restructuring when it was clear that most of (incl. % the planned roads for rehabilitation would not be completed before project closing achievement) date. However, there was a user satisfaction survey in progress at the time of ICR preparation. Odisha Works Department (OWD) efficiency and transparency improved: (a) Operation and Maintenance arrangements for the Core Road Network (CRN) put Indicator 4: in place; (b) core business functions fully operational; and (c) OWD meets Right to Information (RTI) Act disclosure requirements and implements the Governance and Accountability Action Plan (GAAP). Value To be undertaken (quantitative or Not in place — In place in YR1 qualitative) Date achieved 8/11/2008 8/11/2008 — 6/30/2016
iii Comments Partially achieved. The efficiency part of the indicator was not measured, but all (incl. % other measures of transparency are being implemented. achievement) Indicator 5: Road User Satisfaction Index Improved Value (quantitative or 2.38 — — 2.44 qualitative) - (Unit - Number) Date achieved 5/15/2014 — — 6/30/2016 Comments Not assessed because no target was set. It was introduced as part of the January (incl. % 2013 restructuring. achievement) Improvement in Network Congestion Indices (%) (a) Congestion free CRN Indicator 6: (b) Congested CRN (c) Over Congested CRN (a) Congestion free CRN - (a) Congestion free Value 83.3%; CRN - 90.4%; (quantitative or (b) Congested (b) Congested CRN - — — qualitative) - CRN - 12.3%; 5.2%; (Unit - %) (c) Over (c) Over Congested Congested CRN - 4.4% CRN - 4.4% Date achieved 5/15/2014 — — 6/30/2016 Comments Not assessed due to unavailability of target data. This indicator was introduced as (incl. % part of the January 2013 restructuring. Congestion-free index on CRN improved achievement) by 7%. Indicator 7: Right to Information (RTI) Compliance Ratio of PMU maintained at 100% Value (quantitative or 0 100% — 100% qualitative) - (Unit - %) Date achieved 1/31/2013 — — 6/30/2016 Comments Achieved. OWD complied with RTI Act by (a) implementing the disclosure (incl. % policy, (b) maintaining vibrant website with up-to-date information, (c) utilizing achievement) well-trained staff to manage the website among other functions. (b) Intermediate Outcome Indicators
Indicator 8: 461 km of state highways widened and upgraded efficiently Value (quantitative or 0 461 310 150 qualitative) - (Unit - KM) Date achieved 8/11/2008 12/31/2014 1/31/2013 6/30/2016 Comments Partially achieved. Neither the original nor the revised targets of this indicator (incl. % were achieved. Only 150 km of the 460 km original targeted (32.5%) was achievement) completed.
iv Environmental Management Plan (EMP), including bio-diversity management Indicator 9: measures effectively implemented Value (quantitative or 0 461 310 150 qualitative) - (Unit - KM) Date achieved 8/11/2008 12/31/2014 1/31/2013 6/30/2016 Achieved. All the project affected persons (PAPs) were resettled and rehabilitated. Comments The project successfully implemented EMP and biodiversity management (incl. % measures on all the project corridors (including on corridors where originally achievement) planned works were not carried out). Percentage of project-displaced households and/or businesses enabled to Indicator 10: reestablish their shelter and/or businesses Value (quantitative or 0 100% — >95% qualitative) - (Unit - %) Date achieved 8/11/2008 12/31/2014 — 6/30/2016 Comments Achieved. The project successfully implemented the resettlement action plan with (incl. % minimal complaints from those affected. achievement) Component 2 (PPP Enabling, OWD Modernization, and Policy and Institutional Framework) One road identified for Public-Private Partnership (PPP) was to be concessioned to Indicator 11: the private sector. Value One road was (quantitative or None One — concessioned out qualitative) Date achieved - 12/31/2014 11/08/2013 Comments Achieved. However, the PPP support activity was dropped during the 2013 (incl. % restructuring following the Government’s request. achievement) Road Asset Management System (RAM), Road Safety (RS) and Environment and Indicator 12: Social (ES) Management functions operational in OWD RAMS/PPP/ES/Road RAMS/Road Safety Value Safety Cell Cell Operational. (quantitative or None Operational and — IT/ICT/MIS Strategy qualitative) IT/ICT/MIS 100% prepared rollout Date achieved 8/11/2008 12/31/2014 — 6/30/2016 Partially achieved. RAM system and Road Safety Cells established and Comments operational within OWD. The information technology/information and (incl. % communication technology/management information system (IT/ICT/MIS) achievement) strategy was prepared but is not yet operational. Indicator 13: Milestones in GAAP and ISAP met Value (quantitative or None 100% n.a. 100% qualitative) - (Unit - %) Date achieved 8/11/2008 12/31/2014 6/30/2016
v Comments Fully achieved. All the milestones were fully achieved. These included (a) actions (incl. % to reduce collusion, fraud, and corruption, (b) actions to enhance transparency and achievement) road user inputs, and (c) actions to enhance quality and sustainability. Indicator 14: Improved Road Policy and Legislative Framework put in place Draft Road Policy Value Approval of the and Draft Legal (quantitative or Road Policy and None — Framework prepared qualitative) - Legal Framework by by GOO but approval (Unit - Text) GOO pending. Date achieved 8/11/2008 12/31/2014 — 6/30/2016 Comments Partially achieved. Road Policy and Legal Framework prepared and in the (incl. % process of adoption by the Government of Odisha (GOO). achievement) Indicator 15: Sustainable road maintenance financing options developed Road Value Road Maintenance GOO has made Maintenance (quantitative or Financing Option decision to adopt new None Financing qualitative) - suitably Road Maintenance Options (Unit - Text) implemented Financing option(s) developed Date achieved 8/11/2008 12/31/2014 6/18/2015 6/30/2016 Comments Partially achieved. The GOO has agreed to create a state road fund; the process to (incl. % make it functional is under way. achievement) Indicator 16: Road Safety Action Plan put in place New Safety Policy GOO approved new approved; safety policy; Value institutional institutional (quantitative or Not in place arrangement put in — arrangement put in qualitative) - place and Action place and Action (Unit - Text) Plan Implementation Plan implementation started started Date achieved 8/11/2008 12/31/2014 — 6/30/2016 Comments Achieved. A New Road Safety Policy, Action Plan, and supporting institutional (incl. % arrangements have been developed and are operational. achievement)
G. Ratings of Project Performance in ISRs Date ISR Actual Disbursements No. DO IP Archived (US$, millions) 1 05/16/2009 Satisfactory Satisfactory 0.00 2 10/31/2009 Moderately Satisfactory Moderately Unsatisfactory 8.39 3 05/20/2010 Moderately Satisfactory Moderately Unsatisfactory 14.01 4 12/03/2010 Moderately Satisfactory Moderately Unsatisfactory 14.01 5 04/09/2011 Unsatisfactory Moderately Unsatisfactory 14.01 6 05/29/2011 Unsatisfactory Unsatisfactory 19.44 7 12/10/2011 Unsatisfactory Unsatisfactory 19.44 8 06/21/2012 Unsatisfactory Unsatisfactory 19.44
vi 9 12/11/2012 Moderately Unsatisfactory Moderately Unsatisfactory 21.27 10 03/18/2013 Moderately Unsatisfactory Moderately Unsatisfactory 27.75 11 10/15/2013 Moderately Unsatisfactory Moderately Unsatisfactory 38.08 12 11/25/2013 Moderately Satisfactory Moderately Satisfactory 38.08 13 06/04/2014 Moderately Satisfactory Moderately Satisfactory 50.28 14 11/16/2014 Moderately Satisfactory Moderately Satisfactory 50.28 15 02/03/2015 Moderately Unsatisfactory Moderately Unsatisfactory 50.28 16 07/15/2015 Unsatisfactory Unsatisfactory 64.10 17 12/30/2015 Unsatisfactory Unsatisfactory 64.10 18 06/29/2016 Unsatisfactory Unsatisfactory 72.41
H. Restructuring (if any) ISR Ratings at Amount Board Restructuring Restructuring Disbursed at Reason for Restructuring and Approved PDO Date(s) Restructuring Key Changes Made Change DO IP in US$, millions Reduction in project scope following new priorities of the Government (road length was reduced from 461 km to 303 km and ‘PPP Enabling Support’ was 01/31/2013 MU MU 21.27 dropped); revision of results framework and extension of project closing date by 18 months from December 31, 2014, to June 30, 2016. Cancellation of loan amount of US$33 million which was gained 06/24/2015 U U 64.10 because of favorable currency fluctuations
I. Disbursement Profile
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1. Project Context, Development Objectives and Design
1.1 Context at Appraisal
1. The State of Odisha, located on the east coast of India, has lagged behind the rest of the country on key economic and human development indicators. State per capita gross domestic product is about a third of the all India average. Poverty remains widespread and nearly half of the state population lives below the official poverty line, compared to 26 percent nationwide.
2. The quality of Odisha’s road network is poorer than other comparable states in India. Only 22 percent of the state’s 231,000 km of roads is paved, compared to 58 percent in India as a whole. The main road network, managed by the Odisha Works Department (OWD), comprises about 18,000 km and 86 percent of these roads are single and intermediate lane roads. At least half of the main road network is in poor condition, with rough riding quality and poor safety alignment. To support the massive mining and manufacturing-based development programs being undertaken in Odisha, before the project, the Government of Odisha (GOO) began a road network improvement program and substantial national and state financial resources have been allocated to provide this support.
3. On the institutional side, the GOO finalized an Institutional Strengthening Action Plan (ISAP) and a Governance and Accountability Action Plan (GAAP) to underpin its strategy to improve the policy, institutional, and governance framework in the sector and modernize the OWD. Both the ISAP and the GAAP provide time-bound interventions to achieve the expected outputs and outcomes in institutional capacity and performance. The GAAP, synergized with the ISAP, has also been designed to incorporate relevant provisions of Odisha’s anti-corruption plan in the OWD.
4. The rationale for the World Bank support to Odisha’s road sector is an extension of the World Bank’s overall engagement in the Odisha Socio-economic Development Program and the World Bank’s continued support to modernize India’s road sector. Reforms implemented under the Odisha Socio-economic Development Program have created substantial fiscal space for the state to undertake productive investments in the social and infrastructure sectors. The project was intended to assist Odisha to meet its capital investment goals in a sector considered important for sustainable economic growth and poverty reduction.
1.2 Original Project Development Objectives (PDO) and Key Indicators
5. The PDO was to remove transport bottlenecks in targeted transport corridors for greater investment and economic and social development activities in the State of Odisha. The PDO would be achieved by (a) improving the performance, safety, and carrying capacity of priority roads in the state in an environmentally and socially sustainable way; (b) increasing the role of the private sector in road infrastructure financing and management; and (c) assisting the GOO to establish a conducive policy, institutional, and governance framework to improve road sector management, financing, and safety.
6. Key outcome indicators. Outcomes would be monitored by the following indicators:
Vehicle operating costs in project corridors reduced by 15 percent.
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Vehicle speed in project corridors increased by 36 percent.
Favorable response by firms about the condition of the transport corridors improved under the project.
The OWD efficiency and transparency improved through (a) operation and maintenance arrangement for Core Road Network (CRN) put in place; (b) core business functions being fully operational; (c) the OWD meets right to information (RTI) disclosure requirements and implements the GAAP; and (d) a Road Safety Action Plan put in place.
1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification
7. The original PDO did not change during project implementation. However, the project was restructured twice in January 2013 and June 2015 because of a continued lack of progress in project implementation and the need to reduce project scope. During restructuring, some of the key and intermediate indicators were either dropped, reworded for clarity, or revised to reflect the changes in project components. The changes were also intended to streamline and clarify the results framework to improve overall monitoring. The revised indicators and rationale for the revision are reflected in Table 1.
Project Restructuring
8. The first restructuring on January 31, 2013, included (a) changes in the scope of the Road Corridor Improvement Component, including the removal of two major road works, thereby reducing the total length of project roads from 450 km to 310 km, and removal of one minor bridge from phase II works; (b) dropping of Public-Private Partnership (PPP) enabling support from Component B; (c) cancellation of US$54 million from the loan; (d) changes in the results monitoring framework and indicators (see Table 1); and (e) extension of loan closing date by 18 months from December 31, 2014, to June 30, 2016.
9. The second restructuring, approved on June 18, 2015, included (a) changes in the results framework (see Table 1) and (b) cancellation of project savings of US$33 million resulting from appreciation of the U.S. dollar against the Indian rupee, with the appropriate modifications to the financing plan. Thus, the project amount was reduced from US$196 million to US$163 million.
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Table 1. Key Result Indicators (Original and as Revised in 2013 and 2015) Sl. No. Original Indicators (PAD) Revised Indicators Rationale for Change PDO Restructuring January 2013 Restructuring June 2015 Remove transport bottlenecks in priority No change to PDO No change to PDO transport corridors for greater investment and economic and social development activities PDO indicators 1 Vehicle operating costs (at 2006 constant Reduction in vehicle operating Dropped with new The original indicator was prices) in project corridors reduced as follows: costs on project corridors indicator introduced; reworded in 2013 for clarity Cars/LMV: From INR 4.3 to INR 3.6 per Improved road policy and and ease of measurement but vehicle-km (15%) legislative framework put was later replaced in 2015. Trucks: From INR 10.2 to INR 8.8 per in place. vehicle-km (14%) Buses: From INR 8.7 to INR 7.1 per vehicle- km (18%) 2 Vehicle speed in project corridors increased as Increase in vehicle speed on No change Reworded in 2013 for clarity follows: project corridors and ease of measurement Cars/LMV: 45 to 60 kmph (33%) Trucks: From 35 to 45 kmph (29%) Buses: From 40 to 55 kmph (38%) 3 Favorable response by firms about the Dropped This indicator was dropped condition of road corridors improved under the to reflect change in project project Component B. (PPP Enabling Support was dropped.) 4 The OWD efficiency and transparency Dropped and replaced by three These indicators were improved: new indicators: revised to improve overall (a) Operation and maintenance arrangement (a) Improvement in Road User monitoring of the PDO. for the CRN put in place Satisfaction Index (b) Core business functions fully operational (b) Improvement in Network (c) The OWD meets RTI disclosure Congestion Indices requirements and implements GAAP (c) RTI compliance ratio of the PMU Sl. No. Intermediate Outcomes and Indicators Revised Indicators Rationale for Change 1 Three priority corridors improved in socially No revisions The number of kilometers and environmentally sustainable way was reduced following two
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major roads that qualified for 461 km of state highways widened and 310 km of state highways funding under the upgraded efficiently widened, upgraded efficiently Government of India (GOI) program. Environmental Management Plans (EMPs) EMP, including biodiversity effectively implemented management measures effectively implemented
Social safeguard measures (R&R, TDP, Percentage of project displaced HIV/AIDS Mitigation, and Road Safety households and/or business Awareness Program) effectively implemented enabled to reestablish their shelter in project corridors and/or businesses 2 PPP in the road sector introduced; Dropped This indicator was no longer One road identified for PPP concessioned to relevant because of change in the private sector the Government priorities. The PPP subcomponent was dropped. 3 The OWD core business units/cells fully No revision The revision was necessary functional; RAM, road safety, and to reflect the drop in the PPP Road Asset Management (RAM), PPP environment and social subcomponent, while the transactions, road safety and environment and management operational and remaining part of the social management operational and execute IT/ICT/MIS operational indicator was reworded for annual business programs and IT/ICT/MIS clarity. operational; No change Milestones in GAAP and ISAP met 4 Conducive Road Sector Policy put in place to No change No change govern the management, financing, and safety of the road network; Improved policy and legislative framework in No change place; Sustainable road maintenance financing No change options studied and suitable implemented; Road Safety Action Plan established and being implemented Note: HIV/AIDS = human immunodeficiency virus infection/acquired immune deficiency syndrome; IT/ICT/MIS = information technology/information and communication technology/management information system; LMV = light motor vehicle; PAD = Project Appraisal Document; PMU = Project Management Unit; RAM = Road Asset Management; R&R = Resettlement and Rehabilitation; TDP = Tribal Development Plan.
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1.4 Main Beneficiaries
10. The beneficiaries included populations living near the newly improved roads and those with business interests around the project corridors—owners of small businesses, shops, producers of agricultural products, and so on. The improvement of roads enhanced property values along corridors and adjacent roads because of increased connectivity to markets, health care, education, and social facilities. Increased connectivity also provided easy access to public transport, and easier transport of goods, resulting in increased income, convenience, and social benefits. Owners of public transport, including truckers, benefited because of increased movement of people, products, and consumer goods. Potential beneficiaries also included tourists with better and easier access to various social, religious, and ecological attractions, as well as businesses benefitting from tourism. Finally, the GOO and the OWD benefited from the project because of increased capacity and systemic efficiencies gained under the project.
11. Individuals and organizations benefitting from the project are highlighted in table 2.
Table 2. Beneficiary Analysis Sl. No. Beneficiary Primary Benefits 1. GOO, OWD Improved overall management - efficiency and effectiveness Enhanced productivity Increased employment opportunities Capacity building for staff of the agencies 2. Transport service users Reduced travel time Reduced travel costs Reduced operating costs 3. General traffic Reduced congestion along project corridor, allowing time and cost savings 4. GOO Favorable fiscal surpluses on the GOO’s budget 5. Population along corridor Improved accessibility and mobility to social services such as schools, hospitals, and markets Generation of employment opportunities during construction The poor and tribal communities living along the road corridors 6 Contractors, consultants, Job opportunities and gain in experience nongovernmental organizations (NGOs)
1.5 Original Components
12. The project had two main components (A) Road Corridor Improvement and (B) PPP Enabling Support, Sector Policy and Institutional Development, and Implementation Support. Total project cost was US$322.5 million (IBRD US$250 million; GOO US$72.5 million). Details of the two components are as follows:
Component A: Road Corridor Improvement - Total cost: US$306.0 million (IBRD US$236.2 million and GOO US$69.8 million)
13. Component A comprised the improvement of three major transport corridors by widening, strengthening, and selective realignment of about 461 km of existing roads to double lane standard.
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In addition to the physical works, the project would finance costs associated with supervision consultants, implementation of EMPs, R&R, Indigenous People TDP, awareness on HIV/AIDS, and road safety awareness campaign. The GOO would pay the cost of land acquisition (LA) and shifting of utilities.
Component B: PPP Enabling Support, Sector Policy and Institutional Development, and Implementation Support - Total cost: US$15.9 million (IBRD US$ 12.7 million and GOO US$3.2 million)
14. This component included assistance to the GOO to (a) introduce private sector participation in financing and management in the road sector; (b) modernize the OWD organization and capacity; (c) improve policy, institutional, and legal framework of the state road sector; and (d) cost of implementation and monitoring of the project. Under PPP enabling support, the project was to finance the costs of a transaction adviser and engineering consultancy services to help the state upgrade and widen high traffic mining/industrial roads on a PPP basis in the first phase. The second activity was to provide technical assistance and advisory services for the OWD to (a) establish a Road Asset Management System (RAMS); (b) develop and implement a strategy for modernizing the OWD financial management (FM), managing records, facilitating public information access, and introducing e-procurement; (c) strengthen the OWD capacity in core business functions, including environment and social management, road safety, and RAM; (d) revise and update the Public Works Department Codes and Manual to improve contract management and procurement practices; and (e) provide training and capacity building for the OWD staff. The institutional development support included technical assistance and advisory services to assist the GOO to improve its Road Sector Policy, institutional, and legal framework. Finally, the component was to finance costs incurred by the PMU for the operation and maintenance of facilities, vehicles, and equipment used for project implementation; expansion of office space; and salaries and allowances of incremental staff assigned to the PMU.
1.6 Revised Components
15. There was no change in the project components. However, the scope and activities in each of the two components were modified with some activities dropped while some funds were either cancelled or reallocated, as described in paragraphs 8 and 9.
1.7 Other significant changes
16. There were no other changes in project design and implementation arrangement. However, there was reduction in project scope because of implementation delays, change in the Government policy, and dropping of some roads for other programs. This led to a significant reduction in project amount, from US$250 million at Board approval to US$163 million at project closure.
17. Project funding allocation. The total funds allocated for the project changed during the implementation period in phases. Some funds from the World Bank loan were cancelled in January 2013 because of reduction in project scope and further cancellation of the loan amount in June 2015 because of the change in exchange rate between the U.S. dollar and the Indian rupee. The total funding sources are shown in table 3.
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Table 3. Project Funding Allocation (US$, millions) At Approval on Changed on Changed on June Source of Funds September 30, Amount Disbursed January 15, 2013 18, 2015 2008 Borrower 72.50 69.00 69.17 54.94 IBRD 250.00 196.00 163.00 79.28 Total 322.50 265.00 232.17 134.22
2. Key Factors Affecting Implementation and Outcomes
2.1 Project Preparation, Design and Quality at Entry
18. The project design reflected the World Bank’s Country Strategy for India (FY05–FY08) and supported the GOO’s efforts to reduce poverty and enhance growth through improving investment climate to help the State of Odisha explore its mining, industrial, and tourism potential. The need for adequate infrastructure to support economic growth comprises a substantial portion, 94 percent, of the loan allocated to road improvement. Three important corridors selected for the project targeted 30 percent of the mining, industrial, and tourism potential areas. Within the framework, project design was in line with the general principles governing these types of project in a difficult environment such as Odisha–develop adequate sector governance instruments and suitable implementation arrangement.
19. Project preparation seems comprehensive but did not meet the readiness criteria before it was presented for Board approval. The bidding documents for the three roads in phase I of road corridor improvement were prepared with the associated EMPs developed. To improve governance, anticorruption, and accountability, a GAAP was developed to implement Odisha’s Anti-Corruption Action Plan in the OWD and help the OWD meet the requirement of India’s RTI Act. In addition, an ISAP was prepared to improve the sector policy, institutional, and governance framework. These are not enough to justify that the project was ready. For instance the PIU was not staffed at preparation. Positions for managing procurement, IT-ICT, MIS, and RAM within the PMU were created without skilled staff. It took up to 18 months into project implementation before the required skills were recruited. Furthermore, the issues on LA lingered for such a long time that it delayed project implementation. These were supposed to have been addressed at preparation. Besides, OWD was not adequately prepared for enormous requirement for implementation of World Bank financed project, especially that OWD had no such experience before. In this regard, the project could not have been proclaimed ready for presentation to the Board.
20. The key lessons from previous highway projects in India highlighted the importance of incorporating measures to ensure good procurement/contract management, LA, and resettlement activities in the project design. In view of the consensus that the state’s overall political and economic environment was a significant risk, special provisions were made for quality assurance in the areas of procurement, FM, and technical audits through support of third-party monitoring mechanism during implementation. Overall, the components in the project were designed to improve transport connectivity in the selected corridors and introduce incremental institutional reforms with phased actions to modernize and strengthen core roads management functions within the OWD.
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21. However, the minimum preconstruction activities required to start civil works contracts on schedule were not achieved during project preparation. Prolonged delays of the activities in LA, R&R of project affected persons (PAPs), clearing of trees, and relocation of utilities had a negative impact on project implementation. Perhaps, accomplishing preconstruction activities should have been included as a project risk. Furthermore, the contracts were awarded without considering the World Bank-GOI project readiness filter that requested preconstruction activities for about 25 percent of civil contracts should be reasonably ready before contract award. However, the spiral effect was overall delay in project implementation.
22. The road corridor improvement works were well thought-out but implementation could not progress because of the inability of the OWD to hand over road sections to contractors where resettlement issues had been fully resolved in accordance with the project agreement. The design activities in the PPP Enabling Support, Sector Policy, and Institutional Development were very good to modernize the OWD and improve its management as well as efficiency. Although the PPP subcomponent was dropped following the request of the GOO, the initial achievement before it was dropped provided the necessary foundation for the success recorded in PPP activity in the road sector in the state. Furthermore, the inability to complete four of the six corridor roads contributed significantly to the failure of the project.
23. Quality at entry. There was no ‘quality at entry’ assessment carried out by the Quality Assurance Group for this project.
Risk Assessment and Mitigation
24. The risks that were identified were reasonably comprehensive. Questions can, however, be raised about the adequacy of the mitigation measures proposed, particularly as they relate to the inadequate procurement capacity of the implementing agency and in regard to the capacity of the contractors and consultants employed during project execution (including risks related to corruption and collusion among contractors). As a result, the ‘Overall’ Residual Risk Rating of ‘Moderate’ for the project as a whole proved to be optimistic. While some measures taken to train and improve capacity were adequate and partly successful,1 the GOO mitigation measures were insufficient when it came to the selection of good consultants and contractors and their management; the proper and timely management of preconstruction activities; and in areas related to the timely completion of activities related to LA. In retrospect, given the World Bank’s long experience in India’s road sector, these problems could have been anticipated and appropriate mitigation measures suggested, but this was not the case.
25. Furthermore, the project also faced unexpected challenges that affected implementation, such as the introduction of new and restrictive laws related to quarrying for construction materials and especially the devastating cyclone and the resultant floods that struck Odisha. Following such unexpected events, risk ratings on the project should been revised and new mitigation measures should have been instituted much earlier in project implementation. This lack of capacity, along with the failure to adapt to changing conditions, all had an adverse effect on project implementation.
1 Even though the PPP component was eventually dropped, the technical assistance mobilized for this activity proved very effective and provided useful and essential guidance to the GOO/OWD and has today been mainstreamed in Odisha for PPPs.
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2.2 Implementation
26. Key areas of project implementation were rated Unsatisfactory for much of the project. The Road Corridor Improvement Component that constituted the largest portion of the loan performed poorly. Long delays in staffing the PMU were detrimental, and in addition, the Project Director was not empowered to take decisions, which contributed to poor management. Neither the civil works contractors nor the construction supervision consultant (CSC) performed to expectation, leading to contract cancellations. Consequently, only 150 km of the 461 km originally marked for widening and upgrading was completed. This had a severe impact on the project’s outcome and achievement of the PDO.
27. There was one area of project implementation that showed a fair amount of progress, which was the sector policy and institutional development component, despite initial delays in the procurement process. Many of the reform studies were completed before project closure, while several became operational. It should be noted, however, that there is some risk that some of the reform activities may be discontinued now that the project has closed, especially those that have not yet become operational.
28. Road corridor improvement. The three contracts in phase I were awarded on schedule but suffered protracted delays and were later terminated. The long delay was because of the inability of the OWD/PMU to complete preconstruction activities on time and hand over project sites to contractors where resettlement issues had been fully resolved. Once they were provided access to the site, contractor performance was poor. In addition, the PMU lacked capacity for contract management, and as mentioned, was inadequately staffed, which caused delays in the decision-making process, among other failures. The three different lead partners on the civil works contracts deserted the project sites, leaving the contract execution to the local partners in all three contracts. This should have been anticipated at the time of preparation with appropriate mitigation measures.
29. Suspension of loan disbursements. The OWD/PMU failure to implement the project according to the legal covenants and Loan Agreement eventually led to the World Bank suspending loan disbursements. Poor implementation performance was an indication of the government’s weak commitment toward the project and its development objective. The World Bank set out eight actions that the GOO/OWD needed to meet before the suspension could be lifted. It took 17 months (May 2011 to October 2012) before the GOO was able to substantially comply with the conditions. (The nine actions and their status when the suspension was lifted are detailed in annex 6.)
30. A case for payment that was not provided for completion of a civil works contract was reported to the World Bank, and further to the World Bank Integrity Vice presidency (INT). Other complaints were reported to INT throughout the course of implementation, and INT has been investigating the complaints.
Actions under the GOO’s Control
31. Delays in execution of preconstruction activities was a big challenge, delayed progress of works, and thus has a negative impact on disbursement of project funds and the World
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Bank loan. There was a long delay in completing the LA process and payment for compensation to PAPs necessary to allow road construction works. For over nine months in the first year of the project, road contractors could not take possession of the sites because of these issues. Furthermore, noncompliance and lapses in implementing environmental, health, and safety measures in line with EMP requirements became another impediment to the progress of works. Because of these issues, it took a substantial part of the project implementation period to accomplish the works.
32. Long delays by the PMU also affected project management. Key staff such as the procurement officer, safeguard officer, and engineers were not recruited on time and did not adequately manage the project. The GOO’s processes and the weak coordination among its departments and units added to the overall problems. The GOO/OWD management also took an inordinate amount of time to make essential decisions despite repeated requests and reminders from the World Bank team. The GOO/OWD staff also had to become familiar with the World Bank’s processes and requirements, which took longer than expected. Together, these issues resulted in inadequate project management, including failure to monitor contractor progress and to take timely actions with respect to poorly performing contracts; failure to properly administer consultant contracts and monitor their activities and provide them timely guidance and advice; and lack of sufficient control over the works on project sites resulting in frequent changes, requests for variation of orders, and disputes—all of which caused further delays. These issues not only affect in delays and contract management issues but also ultimately affected the quality of the civil works. For instance, the decision to change the granular sub base without proper recourse to contract management procedures caused long delays in works contracts. Furthermore, the inability of the PMU/OWD to enforce contract provision on poor performance of contractors and consultants affected all the contracts. While the lead joint venture (JV) partners did not report to the site, the GOO did not apply the legal/contractual remedies to ensure active participation by the lead JV partners. The GOO also delayed implementation of independent third-party review regarding quality. There were substantial deficiencies in implementation of environmental management safeguards, particularly related to regulatory compliance, work site management, traffic management during the construction, and construction camps’ management. There was a lack of attention by the supervision consultants and the contractors on implementing the EMPs, which were eventually corrected after World Bank intervention.
33. The necessary support required from the GOO/OWD for the project was lacking at the beginning of project implementation. The GOO delayed in giving necessary assistance to the contractors in obtaining various statutory clearances for locating/operating quarry sites as well as permits for plants and machinery. There were delays in taking major decisions on the project because of the lack of GOO-level decisions when they were needed. There were also delays in the State-Level Empowerment Committee (SLEC) functioning. For over one year the committee did not meet; thus, decisions were either delayed or not taken, further affecting project implementation.
34. As mentioned, the disbursement suspension set nine actions as a condition for lifting the suspension. The nine actions included completing long overdue activities necessary for progress such as recruitment of staff into the PMU, completion of preconstruction activities, recruitment of third-party monitoring consultants, and invoking of condition of contract on nonparticipation of lead partners in the JV firms in civil works contracts. While comprising a significant period of the project implementation, the decision to suspend disbursement led to improved project management. The GOO/OWD became more committed to the project, and
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activities in such areas as LA, the pace of procurement and mobilization of consultants for various institutional strengthening activities, and third-party monitoring of quality in the civil works contracts were achieved during the suspension period.
35. There was satisfactory progress in the range of policy and institutional reforms. The activities on institutional development included preparation of the Odisha Road Sector Policy, preparation of various funding options for road development, including creation of a road fund, road safety, and vehicle axle load regulation and management. In addition, the OWD underwent reorganization and strengthening. Other achievements included training and capacity-building programs and the computerization of the Odisha RAMS. Most importantly, the support of the OWD/GOO to the reform program was helpful.
Force Majeure Beyond the Control of the PMU
36. The progress of works was also hampered by Cyclone Phailin that struck Odisha State in 2013. The resultant floods affected the civil works contractors and the roads under construction. The torrential rains across the state not only interrupted construction activities but also damaged contractors’ camp and equipment and washed away construction materials. The damages to equipment and loss of materials were heavy and it took substantial time for the contractors to recover. Another unpredictable development was a judgment by the Supreme Court placing restrictions on the licensing of the quarrying of granite, a major road construction material. The ruling delayed acquisition of the critical material, thereby adding to the delays.
Other Actions
37. The World Bank’s deployment of three consultants to supervise on its behalf did not yield the expected results. As part of the supervision plan, the World Bank hired three consultants to help in project supervision, focusing on engineering/quality, environment, and social safeguards. However, this was misunderstood by the OWD who took it as interference and micromanagement of project activities. Thus, the OWD became less enthusiastic in project management and developed a strained relationship with the supervision team. Consequently, the consultants were withdrawn. It took some time before confidence between the World Bank and the OWD could be restored and activities could resume. Although the intention behind this strategy was a good one, the PMU/OWD did not understand the roles and responsibilities of these consultants and thus pushed back. Better communication and foreknowledge of such arrangements are required before deployment of such consultants.
2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization
Monitoring Design
38. The M&E framework designed for the project included various indicators to monitor the achievement of the PDO. The original performance indicators were precise, measurable, and closely linked to the PDO. The indicators that monitor transport bottlenecks, such as travel time and speed of vehicles, were included in the M&E framework. The PMU/OWD was responsible for data collection and updating of respective indicators. Overall, the design of the M&E system was substantial, appropriate, and comprehensive. However, the indicators were revised during project restructuring (see section 1.3) largely in response to changes in project scope.
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Implementation and Utilization
39. Implementation. In the initial period of project implementation, the M&E indicators were monitored and evaluated routinely and discussed and reviewed during missions. However, soon after, the project encountered serious implementation issues, resulting in slow progress of work, poor contract management, and low disbursements, culminating in the suspension of disbursements of the World Bank loan in May 2011. During this period, M&E faltered. Data on critical components, such as traffic on CRN, were either not collected or collection frequency was not as outlined in the PAD.
40. The OWD was assisted in the data collection by consultants for construction supervision and management, environmental and social safeguards management, construction quality, and road safety teams. Although there were some human capacity issues initially, the monitoring led to the identification of various problems so that corrective measures could be initiated on time. For instance, owing to social safeguard issues affecting the PPP component under the project, the World Bank and the OWD mutually agreed to exclude it from the project scope. It also allowed the formulation of alternative outcome measurement indicators at the time of project restructuring. Project monitoring reports were regularly reported in Aide Memoires and Implementation Status and Results Reports (ISR).
41. Utilization. Most of the baseline data for monitoring was collected by the time of Board approval of the project and arrangements were in place to collect the remaining data. Following their revision, the selected indicators were relevant and were utilized in M&E of the operational performance of the road, port, and airport subsectors.
2.4 Safeguard and Fiduciary Compliance
Safeguards
42. The Safeguards ISR rating was Moderately Satisfactory at the close of the project. The project was classified as Category ‘A’ and the safeguards policies triggered include Environmental Assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.04), Forests (OP/BP 4.36), Indigenous Peoples (OP/BP 4.10), Physical Cultural Resources (OPN 11.03 or OP/BP 4.11), and Involuntary Resettlement (OP/BP 4.12). However, during implementation it was concluded that the OP/BP 4.10 was not in fact required.
43. The EA studies completed during project preparation provided a good background for implementation of safeguards on the project. There were EA studies, including public consultations for all project corridors. The appropriate reports were disclosed at the World Bank’s InfoShop and the state and local level (websites and libraries, respectively), as required. The reports of the studies informed the project design and the recommendations were integrated into the engineering design and contract documents of the project. Corridor-specific EMPs, in response to issues identified during the EA, including construction-stage and operation-stage impacts, were prepared. Furthermore, a Biodiversity Assessment Study (including management plan preparation) dealing with protection, avoidance, and minimization of adverse impact on forests, wildlife, and designated protected areas was also prepared. A Social Impact Assessment was carried out for all
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road corridors and covered LA, EMP, resettlement action plan (RAP), R&R plan, and institutional arrangements to implement all the plans.
44. LA and involuntary resettlement proved to be challenging and adversely affected project implementation. The PMU had a very elaborate and transparent process for the R&R process, which involved detailed public consultations to explain the R&R Entitlement Framework and distributing it in Odhia (local language). Focus group discussions were carried out, particularly with women and vulnerable sectors and business groups. NGOs assisted with social mobilization and organizing and operationalizing Village-Level Grievance Redressal Committees (VLGCs). The PMU has a file for each PAP with all necessary details including family status, whether titled or nontitle, assets lost, and payments made into joint accounts, and so on. Although the R&R process has been completed satisfactorily, it is not yet possible to assess the impact of the process on those who were affected with regard to improvement in quality of houses and commercial structures, access to services, and facilities such as health care, education, and increased sustainable income. The PMU has already awarded the commissioning of the study of social safeguards and social development impacts, which is expected to be finalized in March 2017. After all setbacks were overcome, more than 90percent of PAPs were resettled and rehabilitated on all the road corridors. The remaining resettlement issues are being considered in the remaining ongoing construction financed by the OWD.
45. FM performance was generally Moderately Satisfactory, which can largely be attributed to the design of the FM arrangements, which mainstreamed the project into the OWD’s accounting system and entailed the following: (a) budgeting: the main project components were incorporated into the state’s annual budget; (b) fund flows followed the standard OWD Letter of Credit mechanism, with the Finance Department providing monthly Letters of Credit as per the OWD’s fund requirements; (c) all project-related payments were centralized at the PMU level and new e- banking technologies were used to make timely payments; (d) as per the OWD procedures, summary monthly accounts were submitted to the Office of the Accountant General (AG) for compilation into monthly State Appropriation Reports; (e) information on project-related expenditures by components were obtained from the existing monthly financial reports prepared for the AG’s Office—activity-level details of the expenditures were captured at the project level in a manner that allowed project management to monitor financial progress against the annual work plans; and (f) the PMU maintained a commitment/payments register, tracking all contracts. This provided the project with information required on pending payments and helped track project progress. In subsequent developments, an online web-based gateway was established for all payments against budgetary allocations and project expenditures were obtained on a real-time basis. This allowed harmonization of the accounting and reporting processes for the project with the state’s own systems. The quarterly reports for the project prepared on the basis of the AG’s monthly appropriation accounts were by and large timely and facilitated the annual audit process. The project FM arrangements have been considered as ‘good practice’ and emulated in several other projects in the World Bank’s India portfolio.
46. Procurement. The midterm review rated procurement Moderately Satisfactory. All the major year 1 contracts were awarded before project effectiveness, following the World Bank’s International Competitive Bidding method of procurement. The three contracts were awarded to three JVs that had the same local contractor. The contract provisions held both partners in the JV jointly liable. For many months after contract award there was very slow progress because of lack
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of resources to execute the work. The lead firm of the JV refused to participate in the contracts, while the local partner lacked the resources and capacity to carry out the works. Consequently, the three contracts were terminated after a protracted period of delay. One contractor requested for termination of his contract because of inability to continue, while the GOO terminated the other two contracts for lack of performance.
47. This decision to terminate the contracts was an important step in the project and paved the way for fresh bidding of all the contracts. To increase participation of local contractors, the National Competitive Bidding threshold was increased from US$10 million to US$20 million while the sizes of contracts were strategically repackaged according to a recommendation from a workshop that assessed local contractor capacity. Subsequently, this strategy resulted in good competition with an average six bidders per package and completion of procurement activities within four to five months. Furthermore, the procurement process for other goods and services was also delayed at points during implementation because of inadequate capacity at the PMU. This inadequate capacity was addressed through training of the procurement staff and support from the World Bank. In general, the delays in civil works contracts performance were largely because of poor contract/project management, as noted in previous sections, rather than procurement issues. Furthermore, the termination of the three contracts and subsequent repackaging into six contracts led to substantial delay in project implementation.
48. Disbursement. The original loan amount of US$250 million was reduced to US$196 million in January 2013, primarily because of the reduction in the scope of project roads originally envisaged. The loan amount was further reduced to US$163 million in June 2015 because of a change in the rate of exchange between the U.S. dollar and the Indian rupee. By the time of project closing, only US$77 million had been disbursed from the loan as many of the remaining road contracts could not be completed. The GOO has decided to finance these roads from its own resources.
2.5 Post-completion Operation/Next Phase
49. A substantial portion of the roads originally planned to be improved under the project had to be dropped because of implementation delays and even some of the roads among the reduced project scope could not be completed by the time of project closing. The GOO/OWD, however, claims to be fully committed to complete all of these roads. As such, soon after the closure of the World Bank loan, the GOO submitted a proposal to the GOI to request the World Bank to make a new loan of about INR 13,000 million (about US$200 million) which would retroactively finance the remaining roads that were already started under the Odisha State Roads Project (OSRP) but could not be completed before the closure of the World Bank project (worth about INR 7, 000 million) and upgrade of additional roads (worth about INR 6,000 million) which are part of Odisha’s overall road development plans. This request has not been officially communicated to the World Bank.
50. The GOO further observed that to process a possible future World Bank loan and to avail the retroactive finance for the ongoing OSRP works, the PMU should continue to function with the existing institutional and operational arrangements for at least one year. The operational cost of the PMU, including the services of the FM specialist, Social development adviser, and NGOs, have been extended for one year. Implementation of social and environmental safeguards as well
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as all contract-related activities was also to continue, as also activities under the Institutional Strengthening Component. All expenditure after June 30, 2016, including maintenance of the roads completed under the OSRP, was to be met out of the OWD’s budget.
3. Assessment of Outcomes
3.1 Relevance of Objectives, Design and Implementation
Relevance of Objectives: High
51. The PDO remains highly relevant to the current national priorities in the road sector in Odisha as well as the World Bank’s overall assistance strategy to the country. The PDO was consistent with the World Bank’s Country Strategy and the GOO’s strategy for sustainable enhanced growth through improving the investment climate in mining, industrial, and tourism in the state. The PDO is consistent with the GOI’s development priorities focusing on the poorer and less developed states in India, and Odisha is among those states deserving priority attention. While physical implementation of this project faced delays, the institutional development aspects promoted the large-scale participation of the private sector in the roads sector, developed a RAMS which is now being used for both capital and operation and maintenance budgeting, improved FM and public access to sector-related information, strengthened the OWD capacity in environmental and social management, developed a Road Safety Action Plan, developed codes to improve procurement and contract management practices in the OWD, introduced a revised road network classification system, and developed a state-level axle-load control and implementation strategy. All of these have been either partially or fully introduced and might indeed be the lasting and sustainable legacy of this project.
Relevance of Design: Substantial
52. The design of the OSRP was consistent with the PDO with regard to rehabilitating trunk roads in targeted economic corridors of the state. The six roads in three economic potential corridors constitute 30 percent of the area where the private sector indicated a development interest. Improvement of roads in these corridors could help the realization of the intention of improving the mining sector and economic activities in the state. The institutional subcomponents sought to improve inclusion of the private sector, operational efficiency, and governance in the management of roads. Implementation arrangements were appropriate, though they needed some modification to maximize facilitation aspects for improved implementation.
3.2 Achievement of Project Development Objectives Overall Rating: Moderate
53. The PDO was to remove transport bottlenecks in targeted transport corridors for greater investment and economic and social development activities in the State of Odisha. This was to be achieved by (a) improving the performance, safety, and carrying capacity of priority roads in the state in an environmentally and socially sustainable way; (b) increasing the role of the private sector in road infrastructure financing and management; and (c) assisting the GOO to establish a conducive policy, institutional, and governance framework to improve road sector management, financing, and safety. Achievement will thus be assessed against these sub-objectives.
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Sub-objective 1: Improving the performance, safety, and carrying capacity of priority roads in the state in an environmentally and socially sustainable way - Not achieved
54. The implementation of road corridor improvement is moderately unsatisfactory. Originally, the project intended to improve 461 km of roads in three major corridors within the state. However, the length of roads was reduced to 303 km because of poor performance, while only 150 km (less than 40 percent of the original target) was completed at project closing date. Six priority roads in three targeted transport corridors were identified for widening and strengthening to remove transport bottlenecks. The improvement was expected to improve performance, safety, and carrying capacity of the roads. However, only two roads (Bhawnipatna-Khariar with four bridges over river Tel vide and Berhampur to Taptapani road) in one corridor were completed. Two other roads (Taptapani-Raipanka road and Raipanka- JK Pur road with Bansadhra Bridge) were removed from the project following request of the GOO, while construction was ongoing on the remaining two roads (Chandabali-Bhadrak-Anandapur road and Jagatpur to Dehuria road) at project closing date. The PDO indicators associated with this objective, namely vehicle operational cost, vehicle speed, and congestion, were not achieved. In addition, two other PDO indicators—the satisfaction survey and the response of firms to road conditions—could either not be measured or were dropped. The failure to carry out this fundamental part of the project substantially affected the achievement of the development objective.
Sub-objective 2: Increase the role of the private sector in road infrastructure financing and management – Partially achieved
55. The ‘PPP Enabling Support’ designed to provide technical assistance to prepare PPP transactions was removed from the project because of noncompliance by the GOO to World Bank safeguards policies. Although, the project had supported the GOO to hire a transaction adviser, funding of the consultant continued from the government resources. The GOO was able to close a PPP road transaction on their own with the support of Government funded transaction advisor. This is a good achievement. It should also be noted that the asset management system (AMS) that was developed and being implemented in the OWD has helped improve budgetary allocation to road maintenance. Further, the study to create the road fund has been completed, although the process of implementation remains under administrative and legislative processing. However, there is potential for private participation in funding and financing road management in the future, which would be a benefit from the project.
Sub-objective 3: Assist the GOO to establish conducive policy, institutional, and governance framework to improve road sector management, financing, and safety - Partially achieved
56. Most of the Road Sector Institutional Development (RSID) activities and deliverables envisaged under this component have been completed and/or are in advanced stages of finalization, approval, and/or implementation. The development of the AMS has been a key achievement of this project. The AMS is being used to prepare financial budgeting and planning for road maintenance in Odisha. The maintenance plans for roads and bridges and finalization of road works for 2015–2016 were also prepared using the software applications. The AMS cell is fully staffed and field offices have been trained in data collection. The Odisha Public Works Department (OPWD) Code and Manual has been approved by the ISAP Review Committee and is awaiting concurrence by the GOO to become operational. The Road Sector Policy has been prepared and
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was undergoing legislative process of approval. The IT-ICT-MIS strategy report has been finalized and submitted to the GOO for approval. A comprehensive training plan for the OWD for 2016– 2017 was developed, which aims to facilitate training, learning opportunities through study visits, and knowledge sharing by trained participants to officials of the OWD on specific areas. Operational guidelines were developed for planning, management, knowledge management, training specific FM, and procurement of facilities and services. The Road Network Master Plan has been prepared. However, the level of deployment of the new framework and operationalization of others may be at risk of reversal on project closure. There is a need for the GOO/OWD to increase the level of commitment to the implementation of the reform framework.
3.3 Efficiency Rating: Modest
57. The ex-ante economic analysis of the project was done for improvement of the three corridors selected to strengthen the highway infrastructure to accelerate socioeconomic development in the state. However, two of the three corridors were not carried out under the project. The ex post economic analysis was performed for two roads: (a) Khariar to Bhawanipatna and (b) Berhampur to Taptapani, widened and strengthened under the OSRP to assess the economic benefits with reference to the economic cost and whether these benefits are similar to those estimated at the appraisal stage. The Khariar to Bhawanipatna road is 68 km and is the same road evaluated at appraisal as Corridor 2, which yielded an Economic Internal Rate of Return (EIRR) of 22.3 percent at appraisal. The Berhampur to Taptapani road is 38 km and is a section of the Berhampur-Bangi Jn road (139 km) that was part of Corridor 3 evaluated at appraisal, which yielded an EIRR of 15.4 percent at appraisal. The actual upgrading unit costs in INR million per kilometer, are higher than the ones estimated at appraisal. For the Khariar to Bhawanipatna road, the actual upgrading unit costs are 1.60 times higher, and for the Berhampur to Taptapani road, the actual upgrading unit costs are 1.81 times higher. However, the actual annual traffic growth rates are higher than the ones estimated at appraisal. For the Khariar to Bhawanipatna road, the actual annual traffic growth is 11.7 percent, that is, 1.73 times higher, and for the Berhampur to Taptapani road, the actual annual traffic growth is 19.8 percent, that is, 2.93 times higher. The traffic growth compensates for the increase in actual cost.
58. For the Khariar to Bhawanipatna road, the ex post EIRR is 19.4 percent and for the Berhampur to Taptapani road, the ex post EIRR is 18.6 percent. The overall ex post EIRR for both roads is 18.6 percent, which is slightly higher than the EIRR estimated at appraisal for both roads (17.7 percent). Overall, the increase in the upgrading costs was compensated by the increase in the traffic compared with the appraisal estimates. Table 4 compares the ex-ante and ex post EIRRs. Taking into account the actual upgrading costs and the actual annual traffic growth rates of the project roads, and keeping all other economic analysis assumptions adopted at appraisal, the ex post economic analysis yields satisfactory economic evaluation results with calculated ex post EIRRs higher than the adopted 12 percent discount rate; thus, the economic efficiency of the project is rated Substantial.
59. However, given that only two of the six project roads were completed, and taking into account the total amount of funds disbursed, as well as completion of the other institutional activities, the rating for efficiency is deemed Modest.
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Table 4. Ex Post and Ex Ante EIRRs Road EIRR (%) at Appraisal EIRR (%) at Completion Bhawanipatna-Khariar 22.30 19.40 Berhampur-Taptapani 15.40 18.30 Overall 17.70 18.60
3.4 Justification of Overall Outcome Rating Rating: Moderately Unsatisfactory
60. The objectives of the project remained highly relevant to the country’s needs, consistent with the World Bank’s strategy, and are absolutely essential for the twin objectives of economic development and poverty alleviation. (The relevance of design was Substantial.) The objectives, however, were expected to be achieved mainly by removing the transport bottlenecks in priority road corridors and improving the economic, social development activities and the state’s investment climate. Almost 90 percent of the project’s resources was devoted to physical improvements and the project only managed to achieve about one-third of its targets. About two- thirds of the original World Bank loan was not disbursed. However, the project made substantial progress in the areas of policy, institution building, and human resource development (HRD) and the economic returns on the limited number of roads that were improved were also acceptable. The project also supported the initial work on introduction of the concept of PPP in the state’s road sector. The AMS and PPP units in OWD have been institutionalized. On balance, however, the substantial failure in the achievement of physical targets and the modest efficiency combine to an overall project outcome rating of Moderately Unsatisfactory.
3.5 Overarching Themes, Other Outcomes and Impacts
(a) Poverty Impacts, Gender Aspects, and Social Development
61. Poverty impacts. The project mainly centered on restoration of income of PAPs to their pre-displacement status. This was done through payment of R&R assistance, including site allowances and through training for skill development for alternative sources of income. Enabling PAPs to continue with their previous small businesses or start new businesses in relocated commercial sites was an important factor for income restoration through implementation of RAPs. The other major source of poverty reduction was the construction of roads under the project that provided temporary employment and better and enhanced sources of access to farmers and owners of small businesses to market raw material, goods, and services.
62. Gender aspects. In addition to project-affected women and their families who benefited from R&R efforts of the project, as explained in the preceding paragraph on poverty reduction, the major gender aspect of the project was addressing the concerns of women who used the ponds/tanks adjoining the roads to bathe and wash their clothes. As the level of the roads increased because of construction of project roads, the level of these ponds/tanks were below the roads and this raised the women’s concern for privacy. To ensure privacy to women, the project constructed retention walls and renovated 74 bathing ghats, 37 changing rooms, and 37 toilets in consultation with women who use these ghats. The relocated and reconstructed religious structures also have become a center for women’s social and cultural activities.
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63. Social development. The major social development outcome of the project has been the payment of compensation and R&R assistance to both titled and nontitled agricultural PAPs. The payment of this compensation and R&R assistance including site allowance had helped the PAPs to at least maintain their pre-displacement conditions and as time goes by to improve their standards of living. The relocation and resettlement of nontitled PAPs have facilitated their relocation and the process of income restoration from sites for which they have now been provided titles. This means that they are no longer encroached upon and are instead titleholders and owners of their structures—homesteads as well as commercial structures. Such ownership provides them a platform on which they can not only build their sources of income but also achieve an independent status and more stable place in society.
(b) Institutional Change/Strengthening
64. Of the project’s two main components - improvement of the road corridors and institutional development - the achievements in the institutional development area have been substantial in a number of areas and the results show some possibility of being maintained, albeit, the Government will need to provide critical support in some areas.
(c) Other Unintended Outcomes and Impacts (positive or negative)
65. None.
3.6 Summary of Findings of Stakeholder Workshop
66. The OWD organized a workshop in August 2016 with members of all implementing agencies, contractors, consultants, and representatives of areas along the project road corridors to understand participants’ opinions and gather lessons learned during project implementation. Participants’ comments are in annex 6. There was general agreement on the good impacts of completed roads and compensations to PAPs. The representatives of project areas were concerned about completion of the works that remained unfinished at project closure. The integration of environmental aspects is now being done in all projects in Odisha, which was acknowledged as a positive benefit. The OWD has become motivated toward creating a green state and this concept is now becoming a part of the state environment program. The OWD provided a long list of issues on which the guidance from the World Bank was considered inadequate, for example, (a) readiness filters of the World Bank were not explained adequately; (b) there were delays in the preparation of terms of reference (TOR) for new components; (c) additional bank guidance was required in the handling of supervision consultants; (d) too much interference and shadow control by the World Bank missions; (e) contractors also indicated that engineering designs were often inadequate; (f) community consultations should have been carried out before the changes in design were initiated; and (g) contractors quoted very low rates without considering the local availability of materials.
4. Assessment of Risk to Development Outcome Rating: Moderate
67. The OSRP failed to achieve its expected development outcomes, particularly its physical objectives and targets. On the other hand, it did manage to make good progress in many of its institutional strengthening objectives to a significant extent. Because the long-term impacts of these institutional measures are believed to be substantial and long lasting, on balance therefore,
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the risk of sustainability of the overall development outcomes over the life of the project investments is rated Moderate. This rating is based on an objective evaluation of the threats to the achievements under the project: (a) the GOO has already committed to continuing the funding for all the policy and institutional changes made under the project and (b) the GOO has also decided to continue funding all the physical improvements that were envisaged under the OSRP and is also planning to request the World Bank for another loan which would fund both the civil works currently being funded by the GOO on a retroactive basis and additional roads prioritized in the Road Master Plan. In spite of the problems faced under this project, the OWD staff and other project stakeholders are enthusiastic about the OSRP’s achievements and appear committed to the long-term developments in the road sector in Odisha, which augurs well for the future and mitigates some of the sustainability risks. This commitment notwithstanding, the GOO needs to be vigilant and ensure that all policies under approval process are completed quickly and start implementation as soon as possible. There is, however, risk of slippage in progress and abandonment of some of the policies if the expected funds from the World Bank are not realized.
5. Assessment of Bank and Borrower Performance
5.1 Bank Performance
(a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Unsatisfactory
68. The project did not meet many of the readiness criteria before it was taken for Board approval. While the project design with regard to strategic relevance and approach to technical, financial and economic analysis seem adequate, the team rushed project preparation without adequate attention to reediness conditions. This later hunt during implementation resulting in delays. While the PIU was well defined with all the required cells, the key staff as Procurement officer, Safeguards officer and other technical staff were not in position by appraisal. The use of ‘alternate’ staff in these positions was a desperate attempt that later show the deficit skills and delayed project implementation. It took substantial period of 18 months before the appropriate skilled staff were recruited during implementation. Furthermore, it was obvious that project management was a potential risk to implementation. This risk was not identified at preparation stage with adequate mitigation measures. Project Management consultant should have started working with OWD from preparation stage. In addition, the bids for the phase 1 were supposed to have been received prior to negotiation and award finalised prior to Board approval. This was not met. Besides, while the studies on LA and R&R were completed during preparation, the criteria to complete the physical LA, R&R such as tree cuttings, utility shifting for 25% of the by negotiation was not met. Land was not made ready for civil works. The arrangement to use NGOs as part of LA and R&R was very cumbersome and didn’t commence at preparation. Furthermore, there was no exist strategy for likely delay in land acquisition as required. All these were carried over to implementation, which delayed the project for up to two years. These impacted heavily on project implementation.
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(b) Quality of Supervision Rating: Moderately Unsatisfactory
69. The World Bank’s missions visited Odisha regularly on an average of twice a year as planned during preparation. The World Bank missions spent an appropriate amount of time in the field. The supervision team engaged in candid exchanges of ideas with the PMU and the GOO, providing regular feedback; however, most of the agreed actions and suggestion by the World Bank were not implemented for lengthy periods. The supervision team seemed to be overly optimistic that implementation would improve and that the PMU, the consultants, and the contractors would be able to act upon the mitigation measures that were agreed. While this optimism on the World Bank’s part is not unusual, the project ultimately failed to meet both its development objectives and implementation schedule because of prolonged inactions and actions of the GOO/OWD and overall delays in project implementation. The issues continued to reoccur without the supervision team proactively changing course or making major adjustments. The later actions taken to enforce project provisions and covenants (suspension of loan disbursement) came too late and had less impact than expected. It took 17 months for the GOO/OWD to implement the project covenants and get the suspension lifted.
70. While the team did face difficult unforeseen challenges, such as the effects of the destructive cyclone and the legal issues surrounding quarrying, key actions could have been taken sooner. Importantly, the two major restructurings could have been done far earlier in the life of the project. The first restructuring 2013 was when the loan suspension had just been lifted and also included an extension of the closing date by 18 months. At that point, the project effectively had three and a half years to carry out the remaining activities. Although it became clear almost at once that the GOO was not effectively managing the project, it took another two years before a second restructuring was carried out. It does not seem that another suspension or project cancellation was considered.
(c) Justification of Rating for Overall Bank Performance Rating: Moderately Unsatisfactory
71. The Moderately Unsatisfactory rating for the overall World Bank’s performance results from a lack of proactivity during implementation, particularly with regard to the Road Corridor Improvement Component, which was fundamental to achieving the PDO. At key junctures, the World Bank team did not respond on a timely basis nor did they take decisive action that might have helped get the project back on track.
5.2 Borrower Performance
(a) Government Performance Rating: Unsatisfactory
72. The GOO’s commitment during project preparation appeared better than during the implementation period. Most preparation activities were completed with little delays. However, the support required to implement the project was not readily forthcoming from the GOO/OWD. There were delays in staffing the PMU and, by extension, the project activities received inadequate attention. The Project Director was not empowered to make decisions. The PMU seemed to have
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been isolated at the beginning of the project and did not get the sufficient support from the GOO/OWD. The GOO was not able to make decisions on urgent matters. For example, the civil work contractors were not provided support in their requests to obtain quarry licenses necessary for road construction. Furthermore, late decisions caused delays in recruitment of a third-party monitoring entity, which affected quality of works. In addition, late engagement of NGOs for implementation of R&R for PAPs delayed implementation of the EMP and, by extension, handing over land to contractors. This lack of attention cumulatively accounted for an inability to deliver on project outputs and, by extension, affected the achievement of the PDO. Although the situation improved somewhat as implementation progressed, it took substantial time and a loan disbursement suspension before the GOO became responsive to the project—and even then, problems continued when the suspension was lifted.
(b) Implementing Agency Performance Rating: Unsatisfactory
73. The implementing agency, the OWD, was confronted with the task of implementing a project which was spread over a large geographical area and financed by the World Bank with its unique terms and conditions with which the OWD was not fully familiar. The project also had to meet extensive environmental and social safeguards requirements because of the large amount of land that had to be acquired and its consequent impact on the PAPs. While a PMU was created to assist the OWD, its staffing was not always adequate or stable, and the quality of its outputs was not consistent. The performance of the consulting firm in supporting the OWD was also not satisfactory and the firm did not do an adequate job in advising the OWD in selecting good contractors and supervising their performance. The OWD management also failed to take timely decisions to correct the many problems pointed out by the successive World Bank missions. Unfortunately, there was no decisive action on the state by the Department of Economic Affairs EA that represented the borrower. One positive aspect of the OWD’s performance was its willingness and enthusiasm in undertaking many policy reforms, organizational and institutional changes, and HRD activities. On the whole, however, the OWD’s shortcomings ultimately led to implementation delays, substantially reduced project scope, and led to the non-utilization of two- thirds of the original loan amount.
(c) Justification of Rating for Overall Borrower Performance Rating: Unsatisfactory
74. Considering all of these factors, there were significant shortcomings in the performance of the borrower and the implementing agency. This made it impossible to achieve the PDOs; caused significant delays, leading to a prolonged suspension of disbursements and two project restructurings; and finally led to the cancellation of over two-thirds of the original World Bank loan amount. The overall performance of the borrower is therefore rated Unsatisfactory.
6. Lessons Learned
75. Alternative method for LA on civil works could expedite the LA process and reduce delay in construction implementation. The approach of LA through private negotiations with an innovative approach to valuation has proven to be effective in previous projects in India. Private negotiations bring benefits of knowledge in current land value and innovative process. Such
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knowledge and innovation can give confidence to landowners, simplify the process, and facilitate faster payment of compensation for the land acquired. It can also eliminate court reference cases, avoid litigations, and eliminate additional costs to the Government and thus save considerable time through reduction in the LA process. Thus, the lessons highlighted in a World Bank dissemination note2 are valuable and should be a reference for future projects.
76. Adequate staff and empowered leadership of the Project Implementation Unit (PIU) is necessary for successful project implementation. Adequate staff at PIU is an important readiness criteria that should be addressed at preparation. It is not enough to just create the PIU; it is important to recognize that the staffing with appropriate skill mix makes the unit. This should be addressed as early as the project preparation stage. The PIU and its leadership should be empowered to take decision to ensure all key sections have staff with requisite qualification and experience. The different result in the two components of this project could be an indication of different skills used for their implementation. The delay in some activities occurred where ‘alternate’ staff were used to manage such activities.
77. A better understanding of the psychology, strengths, and weaknesses of the client could guide the manner and type of supervision support to provide at different stages of the project cycle. It was clear at some point during project implementation that the GOO/OWD lost interest and was not implementing the project appropriately. In this regard, providing technical support may not be enough but understanding the reason for loss of interest and providing appropriate motivation to win the confidence and support of the client are required for successful implementation. Furthermore, the World Bank staff should be proactive in responding to issues. Correct solution at the wrong time cannot yield the desired result.
78. Red flags on project implementation should be monitored progressively to the end. A situation where a local firm is a partner in three different JVs for three contracts is a red flag for a perceived premeditated collusion. This was missed at the bid evaluation report review stage by the World Bank. A possible approach could have been to apply combined evaluation on the capacity of the local partner on the three contracts and/or increase performance security to one of the biggest contracts. Where the lead JVs absconded from the site and the junior partner did not have capacity to continue, the World Bank team could have compelled the client to invoke contractual provision on the poor performance by the JVs.
79. It is beneficial to have a significant size (up to 25 percent of continuous land) of preconstruction activities to be completed for more than half of a road project before contract signing. This is an important lesson that keeps causing delay in project implementation and sometimes project failure. These activities such as LA, R&R, and implementation of EMP should began as early as project preparation. Contracts should not be signed if encumbrance-free road sections are not available for immediate construction works. This should be agreed with the client ahead of implementation.
80. The need to stay the course on project with challenges could make a difference to the client. Implementation challenges observed on the project were enough to make the World Bank
2 “Success through Innovation and Negotiation: Land Acquisition in India,” South Asia Social Dissemination Unit, Dissemination Note. 2, January 2012.
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cancel the project a long time before project closure. However, the supervision team should be commended for staying the course and continuing to see how the poor performance could be turned around. Although the PDO was not achieved, both the World Bank and the client learned some lessons. The moderate achievement on the sector policy and institutional development could not have happened if the project did not run its full course. Furthermore, the renewed interest of the GOO/OWD on the World Bank–financed project is an achievement on its own. It suggests that the GOO/OWD will likely perform better in another World Bank–financed project.
81. The roles and the relationship between the CSC and the client should have been well defined to derive the maximum benefits of such an arrangement. The CSC sometimes over stepped their bounds while carrying out their responsibilities. They should have been called to order where this happened. Furthermore, the client required guidance on their authority over the CSC. The project would have benefitted more from having CSC on civil works where open communication, mutual respect and better understanding of roles and responsibilities of each party exists. This should have been entrenched in the project from preparation stage.
82. Project Readiness: It is clear that rushing preparation to meet a Board submission date will hurt project implementation. The Project team should have ensured all the readiness criteria were met and project management issues were addressed before Board submission. When project management issues did arise, a project management consultant should have been recruited to support the PIU. Furthermore, it is not enough to proclaim PIU formed without the skilled staff in place. Readiness criteria in procurement, safeguards and M&E are as important as financial management and project management.
7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners
(a) Borrower/implementing agencies
83. The draft ICR was shared with the borrower and the OWD. In response, the OWD made comments and suggestions and requested change in ratings of some PDO indicators (see details in annex 7b). The OWD has suggested that because of a number of factors beyond the control of the PMU and the OWD, the overall project rating be raised from Unsatisfactory to Moderately Satisfactory. While recognizing these factors, however, the ICR is designed to be a learning tool that measures achievement within a framework of specific criteria, such as original project targets and development objectives, as well as other issues discussed in the documents. This notwithstanding, given the additional information provided on the PPP Component, and other comments and suggestions provided by OWD, the overall project rating has been raised to Moderately Unsatisfactory. The other issues raised have been addressed in different parts of the documents. The following indicator and paragraphs were revised in the documents:
(a) Indicator 11 was revised upon additional information from the OWD.
(b) Paragraph 34 - a sentence is included to recognize the important roles of the GOO in the reform process.
(c) Paragraph 36 - the concern of the PMU/OWD over the roles and responsibilities of the consultants deployed to the project have been highlighted.
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(b) Co-financiers
84. Not applicable.
(c) Other partners and stakeholders
85. Not applicable.
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Annex 1. Project Costs and Financing
(a) Project Cost by Component (US$, millions equivalent)
Revised at Actual/Latest Appraisal Restructuring Percentage of Components Estimate Estimate on Appraisal June 18, 2015 June 30, 2016 Road Corridor Improvement 305.9 202.8 124.8 40.8
PPP Enabling Support, Sector Policy and 15.9 16.6 8.9 56.0 Institutional Development, and Implementation Support
Total Baseline Cost 321.8 219.4 133.7 41.5 Total Project Costs 321.8 219.4 133.7 41.5 Front-end Fee 0.6 0.6 0.6 100.0 Total Financing Required 322.4 220 134.3 41.7
(b) Financing
Appraisal Revised at Percentage Actual/Latest Estimate Restructuring of Source of Funds Estimate Remarks (US$, June 18, 2015 Appraisal (US$, millions) millions) (US$, millions) (%) Borrower 72.5 57.0 54.9 76 International Bank for Reconstruction 250.0 163.0 79.4 32 and Development
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Annex 2. Outputs by Component
Key Performance Indicators Actual Output at Components Revised at Restructuring End of Project Target Project Closing (June in January 2013 2016) Road Corridor 461 km of state highways 310 km of state highways 150 km of roads widened Improvement widened and upgraded widened and upgraded and upgraded efficiently efficiently EMPs effectively EMPs, including EMPs and biodiversity implemented biodiversity management management plans measures, effectively implemented over 150 implemented km
Social safeguard measures Percentage of project- All the social safeguard (R&R, TDP, HIV/AIDS displaced households and/or measures were Mitigation, and Road Safety businesses enabled to re- successfully implemented Awareness Program) establish their shelter and/or despite the slow start. effectively implemented in business Project displaced project corridors households were re- established. 5,730 PAPs were relocated. PPP Enabling Support, One road identified for PPP RAM, Road Safety, and The PPP component was Sector Policy and is concessioned out to the Environment and Social dropped from the project Institutional private sector Management functions during restructuring and Development, and operational and execute the work was taken up by Implementation Support annual business programs, the GOO. and IT/ICT/MIS functions RAMS and Road Safety and assets operational Cell has become operational. RAMS is used to prepare annual business plans and budgets.
IT/ICT/MIS Strategy prepared.
Environment and social management functions mainstreamed.
RAM, PPP transactions, Improved policy and Improved policy and road safety, and legislative framework in legislative framework environmental and social place prepared by the GOO and management functions awaiting formal approval. operational and execute annual business programs, and IT/ICT/MIS functions operational
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Key Performance Indicators Actual Output at Components Revised at Restructuring End of Project Target Project Closing (June in January 2013 2016) Milestones in GAAP and Sustainable road Sustainable road ISAP met maintenance financing financing options study options studied and suitably prepared and the GOO implemented has taken decisions.
Road Safety Action Plan Road Safety Policy and established and being Action Plan and implemented supporting institutional arrangements established and implemented
Improved policy and Road Sector Policy and legislative framework in Framework formulated. place Legislative approval was expected in 2017. Sustainable road Road maintenance maintenance financing financing options study options studied and suitably completed. The implemented recommendations are being reviewed for implementation.
Road Safety Action Plan Road Safety Policy Plan established and being has been approved. Road implemented Safety Fund established. Implementation is in progress.
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Annex 3. Economic and Financial Analysis
1. The ex-ante economic analysis of the project focused on the improvement of the three corridors selected to strengthen the highway infrastructure to accelerate socioeconomic development in the state, using the Highway Development and Management Model (HDM-4), which captured project benefits as savings in vehicle operating costs, travel time costs, distance for bypasses, and maintenance costs resulting from the road improvements. The three corridors covered 460 km of state highways and major district roads requiring US$245 million of investments. The cost-benefit analysis incorporated a 20-year evaluation period with a 12 percent discount rate, and indicated that the project economic benefits were satisfactory with an overall EIRR estimated to be 25.1 percent. The basic data of the corridors evaluated at appraisal are given in table 3.1.
Table 3.1. Road Corridors Evaluated at Appraisal
Motorized Financial Financial Economic Length C Road or Corridor Name Traffic Cost (US$, Cost (INR, Rate of (km) (AADT) millions) millions) Return (%)
1 Jagatpur-Kendrapada- 201 4,569 114 4,887 32.1 Chandbali-Bhadrak- Anandapur (a) Jagatpur-Kendrapada- 99 5,304 60 2,562 31.1 Chandbali (b) Chandbali-Bhadrak 53 3,588 28 1,196 21.1 (c) Bhadrak-Anandapur 49 4,144 26 1,129 41.7 2 Khariar-Bhawanipatna 68 1,485 27 1,143 22.3 (a) Khariar-Bhawanipatna 68 1,485 27 1,143 22.3 3 Berhampur-Bangi Jn- 192 1,961 104 4,455 14.9 Raygada (a) Berhampur-Bangi Jn 139 1,897 70 3,009 15.4 (b) Bangi Jn-Rayagada 53 2,132 34 1,446 13.7 Total 461 3,028 245 10,485 25.1 PAD Exchange Rate = INR 42.8 per US$ Note: AADT = Annual Average Daily Traffic
2. The ex post economic analysis was carried out for two of the planned road sections: (a) Khariar to Bhawanipatna and (b) Berhampur to Taptapani. Each was widened and strengthened as originally planned under the project and the analysis assessed the economic benefits with reference to the economic cost and whether these benefits were consistent with those estimated at the appraisal stage. The Khariar to Bhawanipatna road was the same 68 km section evaluated at appraisal as Corridor 2, which yielded, at appraisal, an EIRR of 22.3 percent. The Berhampur to Taptapani road was a 38 km section of the Berhampur-Bangi Jn road (total 139 km) that was part of Corridor 3 evaluated at appraisal, which yielded, at appraisal, an EIRR of 15.4 percent.
3. The ex post economic analysis was done by modifying the flow of net benefits obtained at appraisal for the project roads using HDM-4 and recalculating the EIRR, considering the actual investment unit costs on the project roads and the actual annual traffic growth observed on the
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project roads from 2006 to 2016. Table 3.2 presents the estimated unit financial costs at appraisal of the upgrading investments on the project roads, in INR million per kilometer.
Table 3.2. PAD Ex Ante Estimated Costs Financial Financial Cost Length Financial Cost Financial Cost (INR, Road Cost (US$, (US$, millions per (km) (INR, millions) millions per km) million) km) Bhawanipatna- 68 27 0.393 1,143 16.805 Khariar Berhampur- 139 70 0.506 3,009 21.646 Bangi Jn PAD Exchange Rate = INR 42.8 per US$
4. The actual cost incurred for widening and strengthening of the two roads (that is, improving and widening of the existing carriageway to a 7-m carriageway with earthen or paved shoulder) along with cost of project preparation, construction supervision, and pre-construction activities has been considered for the ex post economic evaluation. Table 3.3 presents the actual unit financial costs of the upgrading investments on the project roads, in INR million per kilometer.
Table 3.3. ICR Ex Post Actual Costs Length Financial Cost (INR, Financial Cost (INR, millions per Road (km) millions) km) Bhawanipatna-Khariar 68 1,830 26.919 Berhampur-Taptapani 39 1,529 39.195
5. The actual upgrading unit costs, in INR million per kilometer, are higher than estimated at appraisal. For the Khariar to Bhawanipatna road the actual upgrading unit costs are 1.60 times higher and for the Berhampur to Taptapani road the actual upgrading unit costs are 1.81 times higher (see table 3.4).
Table 3.4. Estimated and Actual Costs Comparison
Ex Ante Cost (INR, Ex Post Cost (INR, Ex Post per Road millions per km) millions per km) Ex Ante
Bhawanipatna-Khariar 16.805 26.919 1.60 Berhampur-Taptapani 21.646 39.195 1.81
6. The PAD indicates that the annual traffic growth projected in the ex-ante economic evaluation for the 20-year evaluation period varied from (a) 6.32 percent to 6.59 percent for cars and jeeps, (b) 3.93 percent to 4.1 percent for buses, (c) 9.49 percent to 9.72 percent for trucks, and (d) 6.32 percent to 6.59 percent for two-wheelers. Considering the typical traffic composition on the project roads given in the PAD, the average annual growth rate of the total vehicle fleet on the project roads estimated at appraisal was about 6.75 percent (see table 3.5).
Table 3.5. Estimated Annual Traffic Growth at Appraisal Traffic Annual Traffic Growth Vehicles Composition From To Average (%) (%) (%) (%)
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Car, jeep 29.5 6.32 6.59 6.46 Buses 5.3 3.93 4.10 4.02 Trucks 13.5 9.49 9.72 9.61 Two-wheelers 51.7 6.32 6.59 6.46 Total Fleet 100.0 6.62 6.88 6.75 7. Traffic on the project roads was measured during 2006 and 2016, which was used to estimate the actual average annual growth rate of the total vehicle fleet. The actual annual traffic growth rates are higher than the ones estimated at appraisal. For the Khariar to Bhawanipatna road, the actual annual traffic growth is 11.7 percent which is 1.73 times higher than at appraisal and for the Berhampur to Taptapani road, the actual annual traffic growth is 19.8 percent which is 2.93 times higher (see table 3.6).
Table 3.6. Actual Annual Traffic Growth Rates
Traffic 2006 Traffic 2016 2006 to 2016 Annual Road Vehicles (Vehicles/Day) (Vehicles/Day) Growth (%) Bhawanipatna- Motorcycle 422 1,807 15.7 Khariar Three-wheelers 2 34 30.1 Car, jeep, and taxi 207 329 4.8 Bus (20 passengers) 6 4 −4.5 Bus (40 passengers) 16 24 4.2 LCV, van, and light 64 133 7.6 truck Truck medium (2 110 112 0.1 axles) Truck heavy (3 30 122 15.1 axles) Truck articulated (5 15 174 27.6 axles) Agri tractor 106 209 7.0 Total fleet 978 2,946 11.7 Berhampur- Motorcycle 780 5,067 20.6 Taptapani Three-wheelers 79 811 26.3 Car, jeep, and taxi 137 691 17.5 Bus (20 passengers) 38 71 6.4 Bus (40 passengers) 86 227 10.2 LCV, van, and light 29 299 26.1 truck Truck medium (2 58 166 11.1 axles) Truck heavy (3 8 97 28.1 axles) Truck articulated (5 4 8 5.7 axles) Agri tractor 30 144 17.0 Total fleet 1,249 7,579 19.8
8. For the Khariar to Bhawanipatna road, the ex post EIRR is 19.4 percent and for the Berhampur to Taptapani road, the ex post EIRR is 18.6 percent. The overall ex post EIRR for both roads is 18.6 percent, which is slightly higher than the EIRR estimated at appraisal for both roads
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(17.6 percent). Overall, the increase in the upgrading costs was compensated by the increase in the traffic compared with the appraisal estimates. Table 3.7 compares the ex-ante and ex post EIRRs.
9. Considering the actual upgrading costs and the actual annual traffic growth rates on the project roads, and keeping all other economic analysis assumptions adopted at appraisal, the ex post economic analysis yields satisfactory economic evaluation results with calculated ex post EIRRs higher than the adopted 12 percent discount rate; thus, the economic efficiency of the two road sections is rated Substantial.
Table 3.7. Ex Post Economic Evaluation Results
Ex Ante Ex Post Road EIRR (%) EIRR (%)
Bhawanipatna- 22.3 19.4 Khariar Berhampur- 15.4 18.3 Taptapani Overall 17.6 18.6
10. However, given that only two of the six project roads were completed, and considering the total amount of funds disbursed, as well as completion of the other institutional activities, the rating for efficiency is deemed Modest.
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Annex 4. Bank Lending and Implementation Support/Supervision Processes
(a) Task Team members
Responsibility/ Names Title Unit Specialty Lending Binyam Reja Lead Transport Specialist/Task Team GTI10 Transport Economist Leader Sri Kumar Tadimalla Sr. Transport Specialist/Co-Task Team GTI10 Transport Leader Sanjay Srivastava Lead Environmental Specialist GEN01 Environment Cordula Rastogi Senior Economist GTCTC Economics Rodrigo Archondo-Callao Sr Highway Engineer GTI03 Engineering Manvinder Mamak Sr Financial Management Specialist GGO24 Financial Management Swaminathan A K Consultant GTIDR Transport Specialist Mohammed Hasan Consultant GTI06 Social Development Ernst-August Huning Consultant GTIDR Institutional Development Vaikalathur J. Ravishankar Consultant GEDDR Economics Supervision/ICR Rajesh Rohatgi Sr Transport Specialist/TTL GTI01 Engineering Sri Kumar Tadimalla Sr Transport Specialist GTI06 Transport Olatunji Ahmed Sr. Transport Specialist GTI07 Transport Gennady Pilch Lead Counsel LEGOP Legal Yash Gupta Sr Procurement Specialist GGO08 Procurement Manvinder Mamak Sr Financial Management Specialist GGO24 Financial Management Neha Vyas Sr Environmental Specialist GEN06 Environment I. U. B. Reddy Sr Social Development Specialist GSU06 Social Development N.S. Srinivas Operations Analyst GTI06 Team Member Kumudni Choudhary Program Assistant SACIN Team Member Gizella Diaz Munoz Program Assistant GFA12 Team Member Genevieve Maria Dutta Program Assistant SACIN Team Member Samuel Thangaraj Consultant (Social Development) GTI06 Social Development Sujit Das Consultant (Highway Engineer) GTI06 Engineering Vinod Kumar Gautam Consultant (Environment) GTI06 Environment Arun Banerjee Consultant GTI06 ICR Author
(b) Staff Time and Cost
Staff Time and Cost (Bank Budget Only) Stage of Project Cycle US$, thousands (Including Travel No. of Staff Weeks and Consultant Costs) Lending FY06 19.95 107.91 FY07 38.74 150.37 FY08 42.56 154.62 FY09 11.54 37.73 Total: 112.79 450.63 Supervision/ICR FY09 20.66 122.44
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FY10 28.04 50.03 FY11 33.31 31.83 FY12 40.31 56.60 FY13 44.38 33.47 FY14 22.49 30.37 FY15 19.74 33.61 FY16 16.90 23.06 FY17 0.98 10.46 Total: 226.81 391.87 Grand Total: 339.60 842.50
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Annex 5. Beneficiary Survey Results
1. Not applicable.
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Annex 6. Stakeholder Workshop Report and Results
1. The World Bank team participated in an OWD-organized workshop with members of all implementing agencies, contractors, consultants, leaders, and representatives of areas along the project road corridors. The objective of the workshop was to provide the workshop participants with an opportunity to express their opinion about the various experiences during the project and to articulate the lessons learned. The discussions covered a wide variety of subjects. The highlights are summarized below under thematic headings.
Use of Standard Procurement Processes and Enhancement of Procurement Capacity
Members were very appreciative of the World Bank’s role in procurement and contract management and staff became more knowledgeable on good bidding practices.
Training in procurement for the OWD staff enhanced their knowledge and skills and built the capacity of the project procurement team.
OWD staff used the World Bank’s procurement/contracting processes as best practice for their own contracts in goods, works, and services.
The World Bank Standard document used on the project influenced the GOO to amend their policies for execution of contracts and adapt such documents for OWD use.
In terms of making procurement operational, OWD migrated to e-procurement and ensured speedy submission of bids and awarding of contracts.
FM Aspects
The comprehensive management system established by the World Bank was appreciated by the GOO and Comptroller and Auditor General. The World Bank also guided the OWD FM officials in setting up their own internal processes and assisted in the creation of the FM manual.
Computerization of the FM systems has reduced the burden on FM staff to manually prepare accounts.
With FM systems streamlined, it has become a standard practice to complete the audit in one day.
Role of Institutional Development
2. Implementation of the RSID component was considered satisfactory. Most of the activities and deliverables envisaged under the component have been satisfactorily completed by the consultants and the GOO has been requested to formalize most of the arrangements. The following specific activities were discussed :(a) Road Network Master Plan; (b) developing the OPWD Code and Manual; (c) Road Safety Action Plan; and (d) setting up the HRD and Training Cell.
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Introduction of GAAP
3. Under GAAP, the ‘Compliance’ handling system ran successfully and now the OWD is thinking of introducing it in other projects in the State of Odisha.
Road Safety Introduced in All Aspects of the Project
4. Following actions were noted:
Identification and removal of 79 black spots;
Road safety audit training in the OWD: 79 engineers completed this training and road safety auditors are performing the road safety functions;
Road safety audit of 2,500 km of state highways being done by CRRI and OWD staff;
Action plan for road improvement works (short and long term) undertaken.
Environment Management
Integration of environment aspects is being done in all projects in the state.
OWD officers ensure stringent actions on environment issues and consultants have been trained in environmental issues.
Biodiversity management measures: While cutting some trees was unavoidable, efforts were made to save trees. Compensatory plantation was carried out by Odisha Forest Development Corporation. 176,000 saplings were planted under this project, besides saving old trees through minor road realignment.
With World Bank encouragement, the OWD was motivated toward creating a green state and this concept is now becoming a part of the State Environment Program.
Access for wildlife movements such as reptile and wildlife passes constructed.
Bathing ghats on public ponds, women’s toilets near public ponds, sluice gates for draining excess water from public ponds, water harvesting structures, and safe access and guard post for schools close to the road have been constructed.
Social Issues
Comprehensive R&R Entitlement Framework developed.
LA carried out with adequate consultations; engineers actively involved in the process; District Collector involved in the acquisition of land.
Poor performance of the project was primarily due to delays in LA for which the time required was underestimated.
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Unclear Project Requirements
5. There were a number of issues on which the guidance received from the World Bank was considered inadequate. These included (a) readiness filters not explained adequately; (b) improper elaboration of project components; (c) introduction of new tasks (for example, GAAP, HIV/AIDS, and biodiversity) were not adequately explained; (d) mismatch between guidance and expectations; (e) provisions in the bid documents (mobilization advance, complete site handing over for effectiveness of contract, and so on) not properly explained by the World Bank (e) exceptionally long time taken in preparation of TORs; (f) required guidance from the World Bank about inclusion of pre-construction activities in the scope of civil works and how to handle supervision consultants not provided; (g) too much interference, conflicting opinions, and shadow control by World Bank Supervision Missions; (h) World Bank staff were interacting with PAPs and instigating them against the GOO officials.
Construction Supervision Consultants
6. Several issues were raised related to the performance of CSCs. These are (a) no penalty imposed on them for nonperformance leading to lot of disputes; (b) lack of experience and knowledge and understanding of the CSC staff; (c) lack of understanding of contract requirements including technical specifications, drawings, and standard practices; (d) the CSC required to undertake joint inspections and due diligence exercise with contractors to identify gaps in implementation of EMP; and (e) suggest formulation of a penalty clause for nonperformance.
Feedback from Road User Groups along Project Roads (Summarized)
Before the project, roads were narrow and the areas were very congested. Although there were some difficulties during construction, now roads have been improved and traffic flows smoothly.
Affected people have been compensated adequately and PAPs benefited.
NGOs have become active in the area and more interactive with the community.
The OWD responds to community complaints on time.
Livelihood training has been going on for some time but with limited impact.
Problems with drainage and slow progress of work in some built-up areas; suggest that contractors should speed up work.
Irrigation culverts running parallel to the road over which the community are having disputes.
Feedback from Contractors
7. The following main concerns were cited by contractors: (a) engineering designs were often inadequate and had to be modified due to site conditions; (b) no provision of vehicular under passes; (c) community consultations should be carried out before the changes in design are initiated
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(d) contractors quote very low rates and do not consider the availability of materials for which they are incurring additional costs; and (e) additional performance security should be taken.
Observation of Consultations with the Communities
Consultations which are held with the local community was adequate and widely shared by everyone by and large.
In the works contract, a clause should be added that contractors will also deal with social aspects on an ad hoc basis.
Quality of Work
Contractors happy with the support received from the OWD.
In larger projects, contractors queried about availability of materials from nearby larger quarries. All contractors voiced the difficulty of availability of materials from nearby quarries closest to the site. It was suggested that they identify such locations.
Also concerns were voiced on obtaining permits for mining from the quarries. It was suggested that they start the process of obtaining the permit in advance of receiving the contract award to avoid delays.
Payments were made on time.
Help was received from the World Bank on social issues and safety aspects; this raised their consciousness and sensitivity on social issues.
Progress of work is not as desired. The contractors shared a concern that they were not progressing well because of escalation in the cost of materials which was not inbuilt in the contracts.
New activities started by the World Bank under this project are being replicated in other projects all over Odisha: revolution has come to the OWD; engineers have learnt a lot and are replicating them in other projects. Methodology of construction, quality control, and safety measures are being followed in other projects.
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Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR
(a) Summary of Borrower’s ICR
1. The Odisha Road Sector Project (OSRP) has been implemented with World Bank assistance of $79.28 million. The Project Development Objective (PDO) has been to remove transport bottlenecks in targeted transport corridors and to achieve this, the project design had two major components Component A: Road Corridor Improvement Component, to support the corridor improvement of 303 km of existing roads to double-lane standards and Component B: Public Private Partnership Enabling Support, Sector Policy and Institutional Development and Implementation Support Component, to assist GOO to introduce private sector participation in financing and management in the road sector, modernize OWD organization and capacity, improve the policy, institutional, and legal framework of the State road sector, and implement and monitor the project.
Social and Environmental Safeguards
2. Land Acquisition: The process of acquisition of private Patta land has been completed as per prevailing Acts. A total of 116.244 acres have been acquired from 263 villages. The acquisition of land involved 7,564 cases and 6,336 awards for an amount totaling INR 604.6 million. Some Patta holders didn’t receive their compensation primarily due to lack of documents related to inheritance/succession etc. However, their due amount had been made as Civil Deposits (with legal court) after due notifications.
3. R&R Status: The process of R&R has been almost completed (September 30, 2016).A total of 7,947 PAPs (Project Affected Persons) were enumerated. Out of the eligible ones, 5,676 PAPs have been shifted by July 2016 and rest are in different stages of settlement. Implementation arrangement for consolidation of social safeguards are still continuing.
4. As far as R&R Assistance to agricultural land losers/Patta Holders is concerned, there were 7,283 eligible PAPs. Out of these 5,493 PAPs have been paid R&R assistance. Project is in the process of paying compensation and R&R assistance to the remaining PAPs (except those seeking legal settlement). This is nearing completion (as on December 31, 2016). In addition, vulnerable PAPs were trained in livelihood activities.
5. Regular awareness programmes on road safety and HIV/AIDS were undertaken for the benefit of affected communities. Project activities also managed religious and community structures in an acceptable manner to communities and also improved access and environment to affected schools.
Evaluation of Environmental Safeguards/Environmental Impact Management:
6. The institutional mechanism for implementation of EMP including required safeguards of all construction works included supervision by CSC, monitoring by PMU and guidance by WB. The contractors had their own environmental/safety professionals to support it.
7. All regulatory clearances and consents were undertaken in contract packages P0-1A, P0- 1B, P0-2 (SH 53), P0-3, P04A-1 and P04B, In P01A&P01B, construction camps are being
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demobilized and required environmental measures are being monitored. In package P03, various measures are being completed as per EMP.
8. In package P04A-2, Consent to Establish (CTE) and Consent to Operate (CTO) under respective Acts is being processed. .
9. In various contract packages, implementation of environmental enhancement measures (bathing ghats and ladies toilets near public ponds, sluice gate/spill way for drainage of excess water etc.) have been constructed or shall be constructed by OWD after public consultation.
Performance of Construction Supervision Consultant (CSC)
10. The performance of CSC raises various issues. The services of first CSC (SMEC) was terminated in Aug 2010 due to misrepresented facts. Following this, M/s Theme Engineering was engaged to provide manpower for supervision, to work under respective EEs. However, on insistence of WB, during Aug 2011, third party QA of above arrangement was pursues by using an academic institute (NIT, Rourkela) but no discrepancy was observed. Later, another CSC (M/s MSV International) was hired in March 2012 for P01, P02and P03 packages, whose contract was completed in March 2015.
11. During Nov 2013, another CSC (M/s LEA Associates) was engaged for P04-A and P04-B packages. The CSC was advised to focus and address technical aspects and adjusting the works to suit specific site conditions. Their overall performance was acceptable to Bank. Hence, they have been additionally assigned for the supervision of P01, P02 and P03 packages.
12. In nutshell, selection of CSC consultants involved substantial experimentation as per advice of WB. As per experience of Borrower, independent CSC lacked ownership and accountability in dispute resolutions and even suggestions of employer were considered as interference. With this, Contractors took advantage and moved for arbitration, where employer lacked information and CSC was not available to assist. In contrast, borrower found the engagement of manpower to assist them in Construction Supervision as more encouraging, as responsibility and accountability remained with OWD, thus addressing various issues/litigations.
Institutional Strengthening
13. The focus of institutional strengthening was to develop OWD to perform with high efficiency and effectiveness on a sustainable basis. This required development of various adoptable and implementable measures. It also had limited component of capacity building of OWD to make it competent to adopt and implement such measures. This included component development of Road Policy, Road Safety Policy, HRD Policy, IT Strategy, Road safety Action Plan and Road Network Master Plan of Odisha was undertaken.
14. Road Network Master Plan: A Road Network Master Plan (RNMP) has been developed and accepted by OWD in July 2014. This included a GIS based map of all roads of Odisha and prioritized annul and multi- year plans of road development. The RNMP has also suggested a road classification system and transfer of village roads, connecting two Gram Panchayat Head Quarters, to OWD for their upgradation to ODR over a 5 year period. The transfer is underway.
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15. The HRD policy highlighting targets for training of OWD personnel and a comprehensive Training Plan has been approved by OWD in February 2014. Simultaneously, the HRD Policy has been notified in June 2015.
16. Odisha Outdoor Advertisement and Hoarding Policy, 2015 has been approved and published to regulate all hoardings/advertisement on roads.
17. An IT-ICT-MIS Strategy for OWD has been finalized and same is with GoO for approval. It discusses implementation of future software solutions and need of a System Integrator (SI).
Structural Improvements
18. Based on the situational analysis, a forward looking organizational structure of OWD has been developed, which has been agreed in principle by OWD.
19. A Human Resource Development and Training Cell has been created in OWD.
20. A Planning and Asset Management Unit has been established in OWD with a mandate to use the RNMP to prioritize specific roads for construction in near future as well as to use “Asset Management System” to assess annual/periodic maintenance fund needs of road infrastructure.
21. A Road Safety Cell has been constituted in OWD to address road safety issues like identification and removal of black spots, conducting road safety audit, conducting Hoarding Audit, ensuring integration of road safety components in the new proposals.
Systems, Procedures and Tools
22. A revised OPWD Code and a new Works Manual have been developed by updating and incorporating various government orders, changing Codes of IRC, NBC, BIS etc., emerging technological development (IT, GIS) and external improvements. The revised OPWD Code is with Code Revision Committee of GOO for review and approval.
23. Standard bidding documents (SBDs) for Works, Goods and Services have been developed under the project. These are awaiting approval of GOO.
24. The development of Asset Management System (AMS) has been a key achievement. This is based on development of a road inventory, condition survey of roads and bridges etc. Most of required data have been collected. However, it requires considerable data collection on an annual basis, for which a number of field engineers have been trained. The maintenance plans for roads and finalization of road works for 2015-16 were prepared using the software applications.
HR and Institution
25. Following HRD Policy, a Comprehensive Training Plan for OWD for 2016-17 has been developed, which aims to facilitate systematic training to officials of OWD in specific areas (both technical and behavioral). Under this a number of trainings have been imparted to OWD staff. Further, capacity building of HRD Cell to implement HRD Policy is underway in OWD.
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26. As a part of institutional development, formation of an autonomous ORDC (Odisha Road Development Corporation) for mission mode execution of projects has been suggested. This may be constituted by transforming existing OBCC (Odisha Bridge Construction Corporation) into ORDC. This has been agreed in principle at higher levels in GOO.
Financial Management
27. A proposal for creation of a state road fund has been agreed by OWD and Transport and Commercial Taxes Department, GOO. This proposes to use part of cess/surcharge on petroleum fuels in short term. However, in medium term, based on the requirements, a dedicated State Road Fund with “dedicated budget allocations” may be made.
Governance
28. OSRP website has been developed, to regularly disseminate all major project related activities/actions and their status. OWD has already been adhering to provisions of RTI Act 2006. Further, it has fully adopted e-procurement system covering electronic publication of invitation for bids etc. It also has developed a robust complaint handling system and is having a CVO (Chief Vigilance officer), who is authorized to have an independent vigilance of the various proceedings.
29. To support governance and indirectly assess quality of infrastructure services, Borrower has undertaken an independent “Road User Satisfaction Survey” for the major roads of the project. Surveys have been conducted at the start (baseline) and during implementation of the construction packages. The surveys had indicated an increase in satisfaction level of road users.
Supporting Environment: PPP
30. With respect to PPP activity under the Bank’s loan component, the scope was limited to finance the PPP Transaction Advisory Consulting Services, who were engaged for techno- economic feasibility study of selected roads for possible implementation in PPP mode, which was complied with. Besides this project, PPP in the state has been well pursued by GOO.
Evaluation of the Borrower’s Own Performance
31. OWD officials actively participated during the preparation and implementation of the project. This has provided them an opportunity to interact with various domain experts of Bank. The sharing of their experiences and discussions have greatly benefitted the organization. The PMU officers were actively involved (directly or indirectly) during Project Execution, Land Acquisition and R&R activities, Inspection and Monitoring of Works, Environmental issues etc. This enhanced their knowledge, capability and capacity to manage associated issues and grievances in order to implement the project effectively. The Financial Management System developed under the project worked very well and was appreciated by both AG, Odisha and WB. Overall, the PMU has grown and gained confidence and enhanced its competencies in project management and in executing Externally Aided projects.
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Borrower’s Comments on ICR and Ranking Provided by Bank
32. The OWD expresses thanks for WB team for the ICRR for OSRP. It is an all-inclusive well-structured report covering the entire spectrum of the project from inception till closure of loan through the various stages such as project preparation, design, procurement and implementation highlighting performance of all key stakeholders such as the Bank’s Supervision Team and OWD’s operation team. During review of this ICRR, Borrower has observed certain points, as provided below, which the Bank may like to impress upon.
33. There are certain indicators for which the comments have been provided as not achieved or partially achieved. As few indicators either have been dropped or have been modified during the restructuring, Bank, having recognized the efforts and commitment of OWD, may like to relook the assessment part.
34. It is well appreciated that ICRR reflects positive flares about the institutional reforms, sustainability measures and transparency. However, the rating on the PDO is only partially achieved. It is a fact that such systemic changes through institutionalization of reforms is always a long term and slow process with numerous bottlenecks, and what has been achieved by Odisha during the loan tenure is worth appreciating, and hence Bank may consider to encourage OWD for its actions through improved rating.
35. The monitoring indicators for PDOs/Outputs have been evaluated/compared against “expected outputs of original PDOs” and not against “outputs of PDOs of restructured loan agreement”. With this, the overall rating of Borrower has been provided as “unsatisfactory”. It is to bring to your notice that since some of indicators (Such as PPP etc.) were dropped during restructuring, may now not be considered for computation of rating.
36. Even under Corridor improvement, about 50% (150 km) road corridor has been successfully completed out of 303 km length agreed under “restructured loan agreement” and thus the performance level of “unsatisfactory/ not achieved” may not apply.
37. Under Corridor improvement component, Bank has acknowledged the accurate and transparent practices in procurement, LA, R&R, Complaint Handling and Environmental Management to improve living conditions of people in project corridor. Such actions must be considered positively towards the computation of overall ratings.
38. The weights provided to various PDO indicators/outputs for computing overall rating of Borrower are not known, and it appears that heuristic approach has been taken for the overall rating. Since all the sub-objectives of Corridor improvement has been achieved substantially (other than the corridor improvement in proper which has been 50% at the time of closer of loan) and the second objective of Institutional component has also been achieved considerably as agreed by the Bank, the overall rating may be reconsidered for upgradation.
39. In Section 3.2, Achievement of Project Objectives, the Overall rating has been provided as Negligible. As two of the sub tasks have been substantially achieved and one task is dropped, it will be rational and just to revisit and upgrade this rating. .
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40. In Para 35, the ICRR spells “The good performance on these activities can partially be attributed to the independent consultants that managed them”. The reforms were achieved by agreement and initiatives of OWD coupled with active involvement and persuasion with back-up efforts of RSID and AMS consultants, which were duly supported by the World Bank by highlighting the reform needs at higher levels within GoO during wrap-up meetings of WB supervision missions. Bank is requested to consider improvement of this statement.
41. In Para 37, regarding hiring of three Consultants by the Bank for improving supervision, it is expressed that scope of work of these consultants were not shared before-hand by Bank with OWD, and thus the initiative did not provide clarity on the purpose as well as the roles and responsibilities of the consultants. Secondly, actions of these consultants and the Bank team were generally in the form of interference and micro management, as explained during the workshop, and did not often result in level-playing.
42. Assessment of Bank’s Performance: section 5.1, (Bank’s Performance – Quality at Entry): This has been provided as “Moderately Satisfactory”. However, during project preparation, assessment of implementation challenge in relation to “anticipated time for LA” and “contractor capacities” was not up to the standards, thus leading to major bottlenecks in implementation.
43. With its wide experience in implementing such infrastructure projects across India, where LA has been observed to be a major hurdle, an assessment of very limited time for having encumbrance free land by Bank in the appraisal stage has been a serious omission. The delays have snowballed consequently, and thus the assessment of “Quality at Entry” as “Moderately Satisfactory” may require a second thought.
Contribution of the World Bank
44. The project has benefited from the contribution of various members of the WB Team who visited Odisha at different stages of implementation of the project. The WB support to the project has been encouraging. The Bank, during its supervision missions at regular intervals, has offered various suggestions to improve project implementation. The supervision mission members had required expertise and provided required advice on project specific issues, including technical, financial management, project implementation, procurement, social, environment etc. Further, Bank shared the Mission Field Visit Reports and Aide Memoires, which helped in realizing project outputs and to comply with agreed actions from time to time.
45. The WB financing supported achievement of PDOs, which resulted in creating not only road sector infrastructure but also supporting their sustainability by developing a conducive policy and reformist environment. The reimbursement of funds was smooth and timely.
46. The experience with Bank assisted state engineers to understand the role of engineering, social, environmental, safety and economic issues in engineering projects. The WB’s norms and guidelines for social, environmental and quality control mechanism were effective to improve quality of works as well as living of people. The Bank also guided the PMU and even the field engineers/staff from time to time to achieve quality in construction and implementation of social and environmental safeguards. Overall, Bank played a vital role of a facilitator and partner in development. On the environmental side, precautionary measures undertaken during pre-
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construction and construction activities have improved the quality of life on the road side, around the burrow areas, inside the construction camps and in the active construction stretches. Similarly, Safety was given utmost importance and due to which, there had been not a single accident in any of the project locations during the construction period.
47. Earlier, Borrower was using conventional wisdom approach and was not much of rational and scientific method of prioritizing the selection of roads. Under the project, the traffic and economic analysis was used for the road network and the selection has been undertaken based on rate of return from an investment. Overall, the importance of life cycle costing approach of Projects and prioritization of project selection has been imbibed in state engineers.
48. Under the project, international best practices were adopted for procurement of goods, works and services and both NCB and ICB procedures were adopted. Use of these procedures enlightened OWD Engineers on many facets of bidding parameters, contract conditions etc. This shall build confidence of business community at various levels. For smooth procurement process for future, SBDs have also been developed for goods, works and services.
49. On institutional issues, Bank provided valuable inputs and support. Their persistent persuasion assisted in taking various reform measures to higher levels in the GOO for approval.
Areas Needing Attention based on Experience on this WB Project
50. The project design had too tight timelines. In the beginning of the project in 2006, the Appraisal was proposed during August 2006 and Negotiations were proposed during October, 2006. At that time, there was no DPR, no Land Acquisition, no R&R, no environment clearance etc. were available. The timelines were unrealistic and impracticable. The Negotiations could finally be done in July 2008, and that too with a lot of handholding by the Bank. Fixing such timelines and making the OWD agree to it through the Aide Memoires was discouraging.
51. The major part of the Project funding has been for corridor improvement, which largely depended on Land Acquisition, Utility shifting and R&R of PAPs. Though, the Project Readiness Filters for Bank supported road projects, list LA as a necessary pre-condition for award of contracts, the Pre-appraisal Mission of Bank put forth a pre-condition for loan negotiation- receipt of bids for three first year contracts. As per the guidance of the Bank, OWD invited bids for three works identified as 1st Year roads, covering 204 kms, during October, 2007. Whereas by Dec 2007, GoO had issued notification for land acquisition for only 30% villages. The lengthy six stage LA process besides process of land possession generally takes + 2 years. The other pre-construction activities such as R&R and utility shifting can follow only after completion of LA. Thus, due to improper and inadequate guidance by the Pre-appraisal Mission based on which award of contracts were made, resulted in a loss of about 3 years (2009 to 2012). This has also been identified by the consultant engaged by the Govt. of India, Department of Economic Affairs, Ministry of Finance and by WB in 2011.
Other Actions by Bank Needing Improvements include:
(a) Provisions in Bid documents, as approved by Bank, were very stringent regarding issue of complete Mobilization Advance and handing over of complete site for effectiveness of Contract. As limited land was available to be handed over to the
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Contractor on the date of commencement, the Contractors took advantage of the situation and checkmated OWD and led to various disputes and litigations. Similarly, in the first set of bid documents, preconstruction activities such as utility shifting and cutting of trees were included under civil works, which was in conflict to the Contractual conditions of providing hindrance free site to contractors. The Contractor took benefit of such clause. Later, by convincing the Bank, this clause was rectified in subsequent biddings to overcome such situations.
(b) The project components were not elaborated properly in respect of Institutional Strengthening components, Social and Environment safeguards. It had been gradually elaborated and even added during various Bank missions, till the end of project. Further the Bank convinced OWD to include new tasks such as GAAP, HIV/AIDS, Bio-diversity etc. The project authorities took time to assess the complete tasks, resulting in delay.
(c) The components such as Institutional Strengthening, Asset Management, IT/ICT/MIS were new to OWD. The Bank Missions instructed the OWD to prepare the TORs by merely providing a broad outline. This lead to various suggestions on TOR from Bank and repeated modifications and then against pre-bid queries consuming considerable time. Realizing that the Borrower had less experience and knowledge of the area, the major responsibility of TOR development should have been taken up by the Bank.
(d) At times, Technical decisions of Project Director were not considered causing serious setback to the project. The technical decision of the Project Director in finalization of the GSB materials within the ambit of the Contractual framework and within the domain of the Loan Agreement , though initially accepted by the Bank Mission, was subsequently restrained after a month with imposition of additional investigations and external reviews, which resulted not only consuming about one year in decision making, but also kept the Project in a state of desolation leading to multiple disputes with the Contractors. It is pertinent to mention here that the decision of the Project Director was accepted by the third party expert, DRB as well as the Arbitration Tribunal and it has also been accepted by the Bank Mission in subsequent biddings.
(e) The project started with a R&R entitlement framework based on R&R policy of Odisha and Bank’s operational guidelines. Accordingly, public consultations and disseminations were undertaken in all project corridors. However, midway into the project, the Social Team from Bank insisted for changing the entitlement framework, creating interference at implementation level. The new components too had their own criticality and complexity. Addressing these issues for too many PAPs was a task in itself.
(f) The ROW limits for built-up and non-built-up sections adopted in the project are non- standard. The Bank insisted to reduce the widths under the garb of minimizing social and environmental impacts. A lot of problems were encountered during implementation due to reduction of ROW.
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(g) In-spite of following national competitive bidding procedures, Bank need to understand and integrate the socio-political environment of the state for operation of the contractors while developing packages.
(h) There should be more clarity in defining PAFs, PAPs especially while defining “displacement status”.
(i) To improve project implementation, an assessment of capacity of both borrower as well as support agencies is required. This should be used as the basis to include appropriate measures to avoid implementation delays.
(j) The views of the implementing agency is that the monitoring missions of Bank, many a times spent considerable time to identify and emphasize resolution of trivial issues, which should have been left to be resolved by PMU and/or field engineers.
(k) The verbal communication of Bank during Missions and subsequent Aide Memoirs were not coherent and consistent. This caused a serious time lag in undertaking required tasks. There should be clear guidelines on which Bank should rest its decision. Lack of it seems to be obvious reason of non-congruent and/or divergent views on some of the issues.
Lessons Learned
(a) Project Design needs to consider various factors: LA and RR time including capability and capacity of NGOs, Capacity of local contractor, Capacity of NGOs etc.
(b) While estimating time to provide encumbrance free land, sequencing of activities under LA, R&R and Utility Shifting should be estimated using historical data. They should be considered as (nearly) sequential activities rather than parallel activities. Adequate time provision for grievance management during above should be included.
(c) A well laid procedure for monitoring the performance of CSC should be evolved and penal provisions incorporated in the TOR of CSC.
(d) Experience of Borrower is that engagement of supervision professionals to assist an OWD Engineer in Construction Supervision is more encouraging an effective, as the responsibility and accountability remains within the ambit of OWD management. This arrangement could also address all future issues of litigation and audits.
(e) All efforts should be made to identify and involve suitable resource persons/officials in project design and efforts should be made to maintain their continuity to the best of availability.
(f) While designing road projects, social and environmental costs should be made as part of project cost and should be a factor in selecting a specific road alignment (DPR stage). Guidelines needs to be developed in early phase of the project implementation so as to deal with social, ethnic, heritage and religious issues during LA and R&R activities.
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(g) Appropriate institutional mechanisms should be in place for ensuring effective interdepartmental coordination at the District level from the inception stage.
(h) A risk management plan should be developed and updated at the start of each financial year.
(i) Establishment of a sound Financial Management system using sound accounting practices at the start of the project helps in improved financial monitoring/management.
(j) For project Implementation, capacity of local contractors should be assessed and integrated in project design (mainly construction packages). Even their capacity building may be included as a component, for implementation in the early phases of the project.
(k) Use of right bid and contract documents shall reduce litigations. Capacity building in Contract Management is highly essential in handling bigger contracts.
(l) For R&R activities, the ongoing practice the payment mechanism was modified for releasing it in phases in a joint account of PAP and the Package Manager (Executive Engineer of local R&B Division), which was certified by the respective NGOs. This has provided sustainability in resettlement of PAPs.
(m) While formulating DPR:
(i) Center line and width of road should be firmly finalized to have clarity in LA, facilitation of encumbrance free land and for preserving trees.
(ii) Proposed alignment of roads should as far as possible avoid dense habitations/ villages to avoid high time requirements and high cost in land acquisition.
(iii) Following provisions need to be included:
Trestles for water supply lines by consulting water supply agencies
Land for transformers etc. for electricity supply
(n) Proper traffic diversion and safety arrangements during construction of corridors generates higher satisfaction amongst road users.
(b) Comments on Draft ICR Report
52. The OWD expresses thanks for you and your team for the Implementation Completion & Result Report for OSRP. It is an all-inclusive well-structured report covering the entire spectrum of the project from inception till closer of loan through the various stages such as project preparation, design, procurement and implementation highlighting performance of all key stake holders such as the Bank’s Supervision Team and OWD’s operation team.
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53. During review of this ICRR, we observed certain points, as provided below, which the Bank may like to impress upon. There are certain indicators for which the comments have been provided as not achieved or partially achieved. As few indicators either have been dropped or have been modified during the restructuring, Bank having recognised the efforts and commitment of OWD, May like to relook the assessment part.
54. It is well appreciated that the ICRR reflects positive flares about the institutional reforms, sustainability measures and transparency. However, the rating on the PDO is only partially achieved. It is a fact that such systemic changes through institutionalization of reforms is always a long term and slow process with numerous bottlenecks, and what has been achieved by Odisha during the loan tenure is worth appreciating, and hence Bank may consider to encourage OWD for its actions through improved rating.
55. The monitoring indicators for PDOs/ Outputs have been evaluated/compared against “expected outputs of original PDOs” and not against “outputs of PDOs of restructured loan agreement”. With this, the overall rating of Borrower has been provided as “unsatisfactory”. It is to bring to your notice that since some of indicators (Such as PPP etc.) were dropped during restructuring, may now not be considered for computation of rating.
56. Even under Corridor improvement, about 50% (150 km) road corridor has been successfully completed out of 303 km length agreed under “restructured loan agreement” and thus the performance level of “unsatisfactory/ not achieved” may not apply.
57. Under Corridor improvement component, Bank has acknowledged the accurate and transparent practices in procurement, LA, R&R, Complaint Handling and Environmental Management to improve living conditions of people in project corridor of impact has been pursued in an transparent manner. Such actions must be considered positively towards the computation of overall ratings.
58. The weights provided to various PDO indicators/outputs for computing overall rating of Borrower are not known, and it appears that heuristic approach has been taken for the overall rating. Since all the sub-objectives of Corridor improvement has been achieved substantially (other than the corridor improvement in proper which has been 50% at the time of closer of loan) and the second objective of Institutional component has also been achieved considerably as agreed by the Bank, the overall rating may be reconsidered for upgradation.
59. In Section 3.2, Achievement of Project Objectives, the Overall rating has been provided as Negligible. As two of the sub tasks have been substantially achieved and one task is dropped, it will be rational and just to revisit this aspect.
60. In Para 35, the ICRR spells “The good performance on these activities can partially be attributed to the independent consultants that managed them”. The reforms were achieved by agreement and initiatives of OWD coupled with active involvement and persuasion with back-up efforts of RSID and AMS consultants, which were duly supported by the World Bank by highlighting the reform needs at higher levels within GOO during wrap-up meetings of WB supervision missions. Bank is requested to consider improvement of this statement.
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61. In Para 37 regarding hiring of three Consultants by the Bank for improving supervision, it is expressed that scope of work of these consultants were not shared before-hand by Bank with OWD, and thus the initiative did not provide clarity on the purpose as well as the roles and responsibilities of the consultants. Secondly, actions of these consultants and the Bank team were generally in the form of interference and micro management, as explained during the workshop, and did not often result in level-playing.
62. Assessment of Bank’s Performance: section 5.1 (Bank’s Performance – Quality at Entry): This has been provided as “Moderately Satisfactory”. However, during project preparation, assessment of implementation challenge in relation to “anticipated time for LA” and “contractor capacities” was not up to the standards, thus leading to major bottlenecks in implementation.
63. With its wide experience in implementing such infrastructure projects across India, where LA has been observed to be a major hurdle, an assessment of very limited time for having encumbrance free land by Bank in the appraisal stage has been a serious omission. The delays have snowballed consequently, and thus the assessment of “Quality at Entry” as “Moderately Satisfactory” may require a second thought.
64. It is requested that the ICRR Mission should strongly consider the above matter while finalizing the report.
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Annex 8. Comments of Co-financiers and Other Partners/Stakeholders
1. Not applicable.
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Annex 9. Summary of Social Safeguards Activities
1. The project, at the time of preparation, triggered the following three World Bank social safeguard policies: (a) Indigenous Peoples (OP/BP 4.10), (b) Physical Cultural Resources (OPN 11.03 or OP/BP 4.11), and (c) Involuntary Resettlement (OP/BP 4.12). Though the policy on Indigenous Peoples was triggered during project preparation, this policy was in fact not triggered during project implementation as explained below. Nevertheless, the project’s compliance with the policy on Indigenous Peoples was supervised and rated during project implementation support missions.
Indigenous Peoples (OP/BP 4.10)
2. To quote the PAD of the project, “Since a number of project roads pass through tribal areas, a focused assessment was undertaken to identify the issues related to indigenous peoples (referred as tribal) and this included consultations with different groups of these communities. This assessment provided a basis for developing a tribal development strategy, which included measures to help tribal communities to access project benefits on par with other beneficiaries. Additional measures required to help tribal communities have been presented as a Tribal Development Plan (TDP) for each contract package, wherever tribal communities constitute a significant proportion of the local population. The TDP was included in the RAP and was implemented during the course of the project period through the institutional arrangement agreed for implementing the RAP.”
3. In spite of the fact that consultative processes were involved with a view to prepare the TDP to be added to each contract package, the policy on Indigenous Peoples was not triggered during project implementation. When project corridors for road construction were finalized, they were located in the districts listed in table 9.1.
Table 9.1. Project locations by Districts S/No. Corridors Districts 1 Bhawanipana-Khariar (PO-1) SH-16 Bolangir, Kalahandi Block in Bhawanipatna and Nuapads 2 Anandapur-Bhadrak (PO-2) SH-53 Bhadrak, Anandapur and Hatadhi Blocks in Keonjhar 3 Bhadrak-Bhandapali (PO2A&B) SH-9 Bhadrak 4 Berhampur-Taptapani (PO-3) SH-17 Gssnjsm 5 Jagatpur-Dhuria (PO-4A1and A2) Cuttack and Kendrapara 6 Dhuria-Chandabali (PO-B) Kendrapara and Bhadrak Note: Project (PO) = SH = State highway.
4. Though Bhawanipatna is a scheduled district where tribal communities live, Kalahandi Block covered by the project is not a scheduled tribal block. All other districts mentioned in table 9.1 where road constructions took place are also not scheduled areas as originally specified by the Scheduled Areas (Part A States) Order 1950 (Constitution Order, 9) dated January 23, 1950, and Scheduled Areas (Part B States) Order, 1950 (Constitution Order, 26) dated December 7, 1950, and respecified by the Scheduled Areas (States of Bihar, Gujarat, Madhya Pradesh, and Orissa) Order 1977 (Constitution Order 109) dated December 31, 1977, after rescinding the orders cited earlier in so far as related to the State of Odisha. It should also be pointed that the project districts
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are not covered by the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 and are also not considered as Scheduled Areas 5 and 6. This means neither the GOI’s nor the GOO’s development plans/schemes and programs such as tribal sub- plans are being implemented in districts covered by the project. This also means that the project has not triggered OP/BP 4.10 on Indigenous Peoples during project implementation. In spite of these, the Implementation Support Mission June 6–June 25, 2016, rated Safeguards implementation as Moderately Satisfactory.
5. However, it should be stated that the project had affected eight families in PO-4 and 19 families in PO-1 who are categorized as scheduled tribes. These families, scattered as they are outside the scheduled areas, are a part of other affected nontribal communities and have been provided with resettlement assistance including assistance for relocation—housing sites and house construction allowance. The quality of houses constructed at relocation sites that are very close to their earlier sites is superior to their previous dwellings and has access to potable water—which had not been available earlier.
Physical Cultural Resources (OP/BP 4.11)
6. The cultural properties affected by the project were places of worship built on roadsides in some urban, semi-urban, and rural areas of the project. While some places of worship were partly demolished, a large number were completely demolished. Demolition of places of worship and their relocation are a sensitive issue in India and Odisha is not an exception. Nevertheless, the project has managed to relocate all 88 religious structures in year 1 (PO-1A, PO-1B, PO-2, PO- 2A, PO-2B, and PO-3) and out of these 36 had been reconstructed in year 1. Similarly, 118 out of 121 religious structures in year 2 had been relocated out of which reconstruction of 56 structures had been completed. The payment for all structures had been made into the joint accounts maintained in the name of temple committees and the Tahasildars concerned. The release of funds was coordinated by an NGO and the Assistant Executive Engineer (R&B)-cum-Nodal Officer (R&R) on the basis of the progress of construction.
7. The project was able to successfully relocate these places of worship because of the participatory processes that were followed with regard to valuation of structures considering the ornamental and artistic work of temple structures, involving temple committees and facilitating formation of temple committees where they did not exist. Such an evaluation and timely payment contributed to successful relocation of religious structures and physical cultural resources affected by the project.
8. One of the positive outcomes regarding the relocation of religious structures is that these reconstructed temples have become community centers providing a platform for sociocultural activities, particularly for women. For example, in Beka, a village on Haladidha Bypass on SH-9 (PO-2A) the villagers had constructed a large temple and named it Bharat Mata (Mother India) temple as a symbol of national integration. This temple is used for worship and other sociocultural activities by project-affected families in 12 villages irrespective of their religious faith. Though the amount of compensation provided by the project was only INR 149,883, the villagers were able to collect more than INR 3 million so that the reconstructed temple could become a community development center that would benefit the community, including women and children.
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9. The Supreme Court of India stated in April 2016, “God never intended to obstruct footpaths or encroach upon public lands.” The court further warned chief secretaries of states and union territories of serious consequences if they did not comply with its orders directing removal of religious structures on public land after September 2011. The Supreme Court also stated on September 13, 2011, that it had undertaken the exercise primarily to ensure that “henceforth no public land, public park, or public street is encroached for constructing religious structures. All collectors and district magistrates in the country are directed to meticulously ensure that no further land is encroached upon in their respective districts.”
10. The project also facilitated the relocation and reconstruction of non-religious physical resources that included bus stops/shelters, public toilets, and affected government buildings and educational institutions. A total of 77 structures were relocated and out of these 49 had to be reconstructed. The educational institutions included the relocation of 17 schools out of 20 and there are 3 still remaining to be relocated.
Involuntary Resettlement (OP/BP 4.12)
Project Area
11. The project had four packages to construct 310 km of roads that cover 263 villages. In phase I, PO-1 covered the Bhawanipatna-Khariar road (NH-16) with a length of 68 km stretching through 46 villages; PO-2 covered the Anandapur-Bhadrak-Chandbali road (SH-9) with a length of 95 km stretching through 80 villages; and PO-3 covered the Berhampur-Taptapani road (SH- 17) with a length of 41 km stretching through 32 villages. Phase II covered the Jagatpur-Chandbali road under PO-4A and 4B with 105 villages stretched along 106 km.
Acquisition of Private Patta/Title Land
12. Acquisition of private Patta/title land had been done using the provisions of Land Acquisition Act, 1894, as amended in 1984 for acquisition completed by December 31, 2013, and under the provisions of RFCTLAR&R Act, 2013 for land acquired from January 1, 2014. Out of the total of 308,246 acres of land, 192,002 acres were acquired under the provisions of Land Acquisition Act, 1984, and 116,244 acres under the provisions of RFCTLAR&R Act, 2013. This means that the project has started implementing the provisions of RFCTLAR&R Act for acquisition of land.
13. The acquisitions involved 7,698 cases/awards out of which compensation had been paid to owners of land covered by 6,312 cases/awards. The total amount of compensation paid for these cases/awards amounted to INR 604,582,870. An amount of INR 110,740,687 is yet to be paid as compensation to awardees of 1,376 cases/awards. Of these awardees, 253 could not be paid as they had gone to various courts to seek judicial redress of their grievances related to various concerns including enhanced compensation. These awardees can only be paid after courts give their verdicts and the judicial process is concluded. Cases/awards concerning 84 awardees had been referred to Endowment Commissioner as they relate to temple land under dispute. The settlement of 84 cases/awards relate to administrative processes and the project has referred to the SLEC chaired by the Chief Secretary, GOO.
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14. An amount of INR 4,080,642 had been paid into civil deposits as the awardees had not come forward to collect their compensation for various reasons. According to the project, payment of compensation into civil deposits is as good as paying the compensation as they had paid the money into civil deposits as a last resort after repeated attempts to contact the awardees directly and indirectly through advertisements in local vernacular media. There are many reasons for the unwillingness and/or inability of awardees to receive compensation and they include lack of necessary documents including those related to inheritance, unwillingness to share compensation, and also unwillingness to travel from distant places including probably some places outside Odisha to collect compensation that is considered to be too small to justify costs involved in travel. The project is planning to undertake yet another series of public announcements through local media asking the awardees to come and collect the money due to them. Until then, the compensation will remain in civil deposits.
15. As far as payment of R&R assistance to land losers/Patta holders in year 1 was concerned, of the 4,995 eligible PAPs R&R assistance had been paid to 4,258 Patta holders by the land acquisition officers concerned. The remaining 737 will be paid when pending issues related to compensation are resolved. In year 2, there were 2,288 eligible Patta holders, out of which 1,235 had been paid. Of the remaining 1,053 PAPs, R&R assistance for 492 had been paid into civil deposits while payment to 561 was in progress as at ICR stage. The PMU had indicated that R&R assistance to all Patta holders except to those who are seeking judicial redress would be paid either directly to them in case of judicial decisions or into civil deposits by December 31, 2016.
Status of R&R
16. A total of 7,948 PAPs were enumerated and they included those whose residential structures were affected, whose commercial structures were affected, and whose kiosks were affected. These PAPs included those with title and those without title. Out of the 7,948 PAPs, only 6,050 were considered eligible and 1,890 were considered ineligible to be considered as PAPs. This is because some were outside the actual alignment after demarcation. Squatter tenants who were affected were considered ineligible for R&R assistance according to the approved R&R policy of the OSRP and similarly squatters who were partly affected were also considered ineligible in accordance with the R&R policy of the OSRP.
17. This means, only 6,058 PAPs were considered as eligible PAPs and out of these 5,730 had been relocated leaving a balance of 328 to be relocated. A total of 828 PAPs who lost their residential structures had to be relocated and out of them 730 (88 percent) had been relocated; of the relocated, 632 (76 percent) have reconstructed their residence. Of the 2,915 (93 percent), out of 3,130 whose commercial structures were affected and relocated, 2,700 (86 percent of 3130) have reconstructed their commercial structures. As far as PAPs losing their kiosks were concerned, 2,070 (99 percent) out of 2,100 were relocated and 98.5 percent (2,085 out of 2,100) had reconstructed their kiosks in the relocated sites outside the right-of-way along the roads. The project expects to complete the relocation of the remaining 328 PAPs by December 31, 2016. This means, the project has completed the process of R&R of PAPs very satisfactorily.
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Efforts to Avoid and/or Minimize Social Risks
18. One of the interesting aspects of the project’s efforts to comply with the World Bank’s safeguard policies was its efforts to avoid and/or minimize social risks. As explained earlier, though the PAD had indicated that the roads to be constructed would go through tribal areas, when the project roads were finally chosen, the roads in tribal areas were excluded. The project also rationalized built-up sections to accommodate the demands of PAPs on the basis of field reviews by the engineering and social safeguards wing of the PMU. This resulted in restricting the right- of-way to 16 m from 26 m in open built-up sections where there were major habitations and markets. Another example was in Aul 1B Junction (P-04B), the demand in public consultation for retention of existing alignment was accepted by proposing a bypass with additional safety measures. Yet another example is the consideration of high embankment at Pattamundai bypass (Chainage 69.750 to 71.500 of P-04B) after due consultation with local people. Cattle underpasses, construction of Reinforced Cement Concrete retention walls to minimize adverse impacts on water bodies and channels were other examples of efforts to avoid and/or minimize social risks. It should also be noted that the project had denotified proposals to acquire private land on the basis of public consultation and social/engineering interventions.
Process of R&R
19. The PMU and its social safeguards/social development team had put in place a very elaborate transparent and public process and this involved detailed public consultations to explain the R&R Entitlement Framework and distribute it in Odhia, focus group discussions including with women and vulnerable sections of affected communities and business groups, and social mobilization for organizing and operationalizing VLGCs to address issues related to R&R with the assistance of nodal NGOs. The representatives of VLGCs were also invited to attend the meetings of Rehabilitation and Periphery Advisory Committees (RPDACs). These RPDACs had been constituted in accordance with the GOO’s 2006 Resettlement Policy. These committees are chaired by the Revenue Divisional Commissioners and convened by the District Collectors concerned. These RPDACs play a critical role in addressing various issues related to R&R.
20. The PMU has a file for each PAP and the file has all necessary details related to the PAP, his/her family, status, whether titled or non-titled, assets lost, and payment paid in instalments into joint accounts, and so on. Though the process appears to be rather lengthy, it should be pointed that such a lengthy process is considered necessary to make the process transparent and accountable both to PAPs and also to the Government.
Institutional Arrangements
21. The institutional arrangements range from the VLGCs that had been constituted and operationalized during the preparation and implementation of RAPs to the SLEC chaired by the Chief Secretary to the GOI. Between these micro- and macro-level institutions, there are the District Compensation Advisory Committee under the chairmanship of the District Collector in each affected district and also the RPDAC chaired by the Revenue Division Commissioner in each revenue division that has affected districts. These institutional arrangements address various aspects of the process of R&R including issues related to LA and payment of compensation.
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22. At the project level, the process of LA, payment of compensation, rehabilitation assistance, and R&R is the responsibility of the PMU that has its own Social Development Unit. This unit includes two senior social safeguards/social development specialists, a nodal NGO, two field-level NGOs, one field officer, and one welfare extension officer. This Social Development Unit was established in 2010. If such a unit had been established at the beginning, the project would have done much better than it has, with regard to R&R. There is a feeling in the PMU that in the absence of such a unit and adequate and timely support from the task team, the R&R process, particularly the process of LA, had been delayed. It is necessary to point out that the tenure of this social development team has been extended till the end of June 2017 by the SLEC. This has been done to ensure that the team stays on to continue and complete the remaining works related to R&R and also to prepare for the next phase of the project.
Grievance Redress System
23. The grievance redress of the project centers on a Complaint Handling System, and access to RTI was an inherent aspect of the project’s GAAP. The Complaint Handling System had received 626 complaints between October 9, 2009, and August 15, 2016, and out of these 495 had been resolved. A total of 66 complaints are in the process of ‘hearing’ while 65 are ‘pending’. The complaints related to payment of compensation, rehabilitation assistance, inclusion of new PAPs, change of nature and use of structures to be relocated, and other aspects of R&R. A total of 15 petitions were received under the RTI and these petitions sought information related to payment of R&R assistance, a categorywise list of affected PAPs, delay in construction of the Anandapur- Bhadrak-Chandabali and Jagatpur to Chandabali roads, improvement of roads, and inclusion of new PAPs. Necessary information was provided to the petitioners in accordance with the provisions of RTI Act, 2005.
Impact of R&R
24. The process of R&R has been completed rather satisfactorily. Nevertheless, it is not possible to assess the impact of the process on those who had been affected with regard to improvement in the quality of reconstructed houses and commercial structures, access to services and facilities such as to health care and education, and increased sustainable income. The PMU had earlier completed a midterm evaluation of R&R by an external agency. The PMU has already initiated the evaluation of social safeguards and social development impacts of the process by Nabakrishna Choudhury Centre for Development Studies in Bhubaneswar. The draft report is expected to be submitted to the World Bank by October 31, 2016, and the final report by November 15, 2016.
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Annex 10. List of Supporting Documents
Bank Staff Assessments/Supervision/Project Documents
1. Aide-Memoires and Management Letters and Environmental/Social Notes of Various Preparation, Appraisal, Implementation and Supervision Missions, 2005 to 2016
2. Country Assistance Strategy for India, The World Bank Group, September 2004
3. Country Assistance Strategy for the Republic of India for the period FY2009–12, The World Bank Group, November 2008
4. Country Partnership Strategy for India 2013–2017
5. Project Appraisal Document for India: Orrisa State Roads Project, August 2008
6. Project Agreement for India: Orissa State Roads Project, January 2009
7. Loan Agreement for India: Orrisa State Roads Project, January 2009
8. Amendment to the Loan Agreement, Project Agreement and Supplemental letter for India: Orrisa State Roads Project, February 2013
9. Mid Term Review of Orrisa State Roads Project, August 2014.
10. Implementation Status and Results Report: Sequences 1–18 (May 16, 2009–June 29, 2016)
11. Restructuring Project Papers for India: Orrisa State Roads Project, January 2013 and June 2015
Other Documents
1. Borrower’s Completion Report - September/October 2016
2. Road User Satisfactory Survey
3. Draft IT-ICT MIS Strategy Report, November 2013
4. Road Safety Action Plan (Final Report), June 2014
5. Master Plan for Main Road Network in Odisha (Volume I and II), September 2014
6. Road Infrastructure Safety Management Review (Volume I and II)
7. Road Sector Institutional Development Report, February 2015
8. Road Sector Institutional Development OPWD Manual
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9. Road Sector Institutional Development Revised OPWD Code
10. Government of Odisha Road Sector Policy, 2014–2024
11. Road Safety Policy of Odisha by Commerce and Transport Department, 2015
12. HRD Policy for Works Department, 2015
13. Government of Odisha Outdoor Advertisement and Hoarding Policy, 2015
14. Summary of Institutional Strengthening Action Plan for the Road Sector (ISAP) 2008–2013 and Governance and Accountability Action Plan Matrix from OWD.
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MAP : Project Road Location Map
Source: World Bank
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