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Cost of MUTP and Bank Financing by Component

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Cost of MUTP and Bank Financing by Component Report No. 34725 Public Disclosure Authorized Public Disclosure Authorized Investigation Report India: Mumbai Urban Transport Project (IBRD Loan No. 4665-IN; IDA Credit No. 3662-IN) Public Disclosure Authorized December 21, 2005 Public Disclosure Authorized About The Panel The Inspection Panel was created in September 1993 by the Board of Executive Directors of the World Bank to serve as an independent mechanism to ensure accountability in Bank operations with respect to its policies and procedures. The Inspection Panel is an instrument for groups of two or more private citizens who believe that they or their interests have been or could be harmed by Bank-financed activities to present their concerns through a Request for Inspection. In short, the Panel provides a link between the Bank and the people who are likely to be affected by the projects it finances. Members of the Panel are selected “on the basis of their ability to deal thoroughly and fairly with the request brought to them, their integrity and their independence from the Bank’s Management, and their exposure to developmental issues and to living conditions in developing countries.”1 The three-member Panel is empowered, subject to Board approval, to investigate problems that are alleged to have arisen as a result of the Bank having ignored its own operating policies and procedures. Processing Requests After the Panel receives a Request for Inspection it is processed as follows: · The Panel decides whether the Request is prima facie not barred from Panel consideration. · The Panel registers the Request—a purely administrative procedure. · The Panel sends the Request to Bank Management, which has 21 working days to respond to the allegations of the Requesters. · The Panel then conducts a short 21 working-day assessment to determine the eligibility of the Requesters and the Request. · If the Panel does not recommend an investigation, and the Board of Executive Directors accepts that recommendation, the case is considered closed. The Board, however, may approve an investigation against the Panel’s recommendation if warranted. · Three days after the Board decides on whether or not an investigation should be carried out, the Panel’s Report (including the Request for Inspection and Management’s Response) is publicly available at the Bank’s Info Shop and the respective Bank Country Office. · If the Panel recommends an investigation, and the Board approves it, the Panel undertakes a full investigation, which is not time-bound. 1 IBRD Resolution No. 93-10; IDA Resolution No. 93-6. i · When the Panel completes an investigation, it sends its findings and conclusions on the matters alleged in the Request for Inspection to the Board as well as to Bank Management. · The Bank Management then has six weeks to submit its recommendations to the Board on what actions the Bank would take in response to the Panel’s findings and conclusions. · The Board then takes the final decision on what should be done based on the Panel's findings and the Bank Management's recommendations. · Three days after the Board’s decision, the Panel’s Report and Management’s Recommendation are publicly available through the Panel’s website and Secretariat, the Bank’s Project website, the Bank’s Info Shop and the respective Country Office. ii Table of Contents ABOUT THE PANEL ...................................................................................................................................................I TABLE OF CONTENTS .......................................................................................................................................... III FIGURES, TABLES, BOXES AND PICTURES ................................................................................................ VI ACKNOWLEDGEMENTS .................................................................................................................................. VIII ABBREVIATIONS AND ACRONYMS ...............................................................................................................IX EXECUTIVE SUMMARY .......................................................................................................................................XI PART I: INTRODUCTION..........................................................................................................................................1 CHAPTER 1 INTRODUCTION.........................................................................................................................2 A. EVENTS LEADING TO THE INVESTIGATION..........................................................................................2 1. Requests for Inspection..............................................................................................................................2 2. Management Response..............................................................................................................................8 3. Eligibility of the Request.........................................................................................................................12 4. The Board Decision..................................................................................................................................13 B. DESCRIPTION OF THE PROJECT............................................................................................................13 1. The Setting .................................................................................................................................................13 2. The Project Objectives.............................................................................................................................14 3. Financing and Legal Structure of the Project.....................................................................................15 4. The Project Design...................................................................................................................................16 5. Resettlement under the Rail Component..............................................................................................21 6. Resettlement under the Road Component............................................................................................22 C. APPLICABILITY OF BANK OPERATIONAL POLICIES AND PROCEDURES TO THE PROJECT.....23 D. THE INVESTIGATIO N...............................................................................................................................24 PART II: SOCIAL COMPLIANCE..........................................................................................................................25 CHAPTER 2 THE PROJECT HISTORY AND FRAMEWORK...........................................................26 A. RETROSPECTIVE VIEW ON THE HISTORY OF THE PROJECT..........................................................26 1. Two Projects for Mumbai: the Resettlement Project and the Infrastructure Project...................26 2. Recommendation and Decision to Merge the Two Projects .............................................................40 3. Conclusion.................................................................................................................................................46 4. Public Consultation and Information Regarding the Merger Decision..........................................47 5. Issues Regarding Information Given to the Bank’s Executive Directors .......................................47 5.1 Differing Estimates of Number of People to be Resettled..................................................................... 47 5.2 Basis for Merging the Two Projects....................................................................................................... 49 5.3 Non-Disclosure of Resettlement Risks................................................................................................... 49 6. Insufficient Risk Analysis........................................................................................................................51 7. Downsizing the Organizational Set-Up for Resettlement..................................................................51 B. THE CURRENT POLICY AND INSTITUTIONAL FRAMEWORK..........................................................54 1. The R&R Policy Framework for MUTP and the Link with the Slum Rehabilitation Provisions54 2. The Resettlement Action Plan.................................................................................................................57 3. Differences between Rail and Road Components of Project ............................................................57 4. Institutional Capacity and Delegation of Responsibilities to NGOs ...............................................58 CHAPTER 3 PLANNING FOR DISPLACEMENT AND RESETTLEMENT...................................62 A. SURVEYS OF PROJECT AFFECTED PEOPLE, BASELINE INCOME AND IMMOVABLE ASSETS ...62 1. The Surveys................................................................................................................................................62 2. Entities Conducting the Surveys............................................................................................................64 3. Methodology Used for Surveys ..............................................................................................................64 iii 4. Consequences of Problems in Methodology........................................................................................70 4.1 Conflicting Descriptions
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