Uttarakhand State-Road Investment Program (Project 1)

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Uttarakhand State-Road Investment Program (Project 1) Project Administration Memorandum Project Number: 38255 Loan Number: 2308-IND May 2008 India: Uttarakhand State-Road Investment Program (Project 1) The project administration memorandum is an active document, progressively updated and revised as necessary, particularly following any changes in project or program costs, scope, or implementation arrangements. This document, however, may not reflect the latest project or program changes. CURRENCY EQUIVALENTS (as of 30 April 2008) Currency Unit – Indian rupee/rupees (Re/Rs) Re 1.00 = $0.024 $1.00 = Rs40.15 ABBREVIATIONS ADB – Asian Development Bank AP – Affected person EARF – environmental assessment and review framework EIRR – economic internal rate of return EMP – environmental management plan FFA – framework financing agreement FY – fiscal year IEE – initial environmental examination IPDF – indigenous peoples development framework km – kilometer LIBOR – London interbank offered rate MFF – multitranche financing facility MIPMS – management information and project management system NCB – national competitive bidding NHDP – national highway development program PBC – performance-based contract PFR – periodic financial request PIU – project implementation unit PMGSY – Pradhan Mantri Gram Sadak Yojana PMU – project management unit PWD – Public Works Department RDP – road development plan RF – resettlement framework RP – resettlement plan SRTC – State Road Transport TA – technical assistance NOTES (i) The fiscal year (FY) of the Government and its agencies ends on 31 March. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2006 ends on 31 March 2007. (ii) In this document, "$" refers to US dollars. This document was prepared by N. Zhang (Senior Transport Specialist), SATC and A. Garrovillas (Assistant Project Analyst) CONTENTS LOAN PROCESSING HISTORY i DESIGN AND MONITORING FRAMEWORK ii I. PROJECT DESCRIPTION 1 A. Project Area and Location 1 B. Investment Program Objective and Scope 1 C. Project Components 1 D. Special Feature 2 II. COST ESTIMATES AND FINANCING PLAN 3 A. Investment Program Cost Estimates 3 B. Investment Program Financing Plan 3 C. Project 1 Cost Estimates and Financing Plan 4 III. IMPLEMENTATION ARRANGEMENTS 5 A. Program and Project Management 5 B. Project Preparation and Appraisal 5 IV. IMPLEMENTATION SCHEDULE 6 V. CONSULTANT RECRUITMENT 6 A. Design and Supervision of Works 6 B. Program Support 6 C. Infrastructure Management 6 VI. PROCUREMENT 7 VII. DISBURSEMENT PROCEDURES 7 VIII. PROJECT MONITORING AND EVALUATION 8 A. Performance Monitoring and Evaluation 8 B. Reviews 8 C. Stakeholder Participation and Consultation 8 IX. REPORTING REQUIREMENTS 9 X. AUDITING REQUIREMENTS 9 XI. MAJOR LOAN COVENANTS 9 XII. KEY PERSONS INVOLVED IN THE PROJECT 10 A. Asian Development Bank 10 B. Resident Mission Error! Bookmark not defined. C. Executing Agency 10 XIII. ANTICORRUPTION MEASURES 11 APPENDICES 1 Institutional Assessment and Capacity Development Plan 12 2 Detailed Cost Estimates 20 3 Selection Criteria and Approval Process for Projects 23 4 Implementation Schedule 26 5 Outline Terms of Reference for Design and Construction Consulting Services 27 6 Outline Terms of Reference for Program Support Consulting Services 31 7 Outline Terms of Reference for Infrastructure Management Consulting Services 36 8 Procurement Plan 40 9 Disbursement Letter 44 10 Disbursement Procedures 48 11 Proforma of Executing Agency’s Project Progress Report 53 12 Project Completion Report 58 13 Audit Letter 60 14 Loan Covenants 64 15 Financial Management Assessment 68 i LOAN PROCESSING AND ADMINISTRATION HISTORY Chronology of Important Events Activity Date(s) A. Processing of the Multitranche Financing Facility 1. Approval of PPTA 4607-IND: Uttaranchal State Roads 1 July 2005 2. Feasibility Study 3. Fact-finding Mission 18-28 April 2006 4. Management Review Meeting (First) 31 May 2006 5. Pre-Appraisal Mission 19-29 June 2006 6. Consultation mission 18-25 August 2006 7. Management Review Meeting (Second) 18 September 2006 8. Frameworks Financing Agreement negotiations 13-14 November 2006 9. RRP Board circulation 27 November 2006 10. Board consideration and approval of $550 million for the Investment 18 December 2006 Program B. Processing of the First Loan 1. First Periodic Financing Request received from Government for an 14 November 2006 indicative amount of $50 million. 2. ADB Management’s approval to proceed with negotiations of the first 6 October 2006 loan 3. First Loan Negotiations successfully concluded between Government of 14 November 2006 India and ADB in Manila 4. ADB approval of the Loan 18 December 2006 5. Signing of Loan Agreement and Project Agreements 25 October 2007 6. Loan Effectiveness 14 January 2008 C. Project Implementation 1. Loan Inception/Handover Mission 15-18 Sept 2008 2. Initial Disbursement to the Imprest Account 3. Loan Review Mission 4. Loan Review Mission 5. Loan Review Mission 6. Midterm Review Mission 7. Loan Review Mission 8. Loan Review Mission 9. Project Completion Review Mission ii DESIGN AND MONITORING FRAMEWORK Design Performance Data Sources/Reporting Assumptions Summary Targets/Indicators Mechanisms and Risks Impact Assumption Increased economic Households below the • National and state public • State transport service growth and reduced poverty line in Investment statistics regulations and taxes are poverty in Uttaranchal Program catchment areas • Reports of Center for relaxed further to decrease from 36% in Monitoring Indian encourage new entrants 2006 to 20% by 2017 Economy Pvt. Ltd. into the operator market Risk • State tourism and horticulture development programs are not advanced Outcomes Assumptions 1. Increased efficiency of 1.1 Increase in the • Post-implementation • State funds for road sector inter- and intrastate number of goods surveys are sustained at the level transport services vehicle permits • Facility and project required to maintain the issued from 660 to performance management network roads 750 per month by systems • PWD staff are provided 2012 adequate time to attend 1.2 Increase in SRTC training programs bus utilization rate from 200 to 250 km Risks per bus per day by • Rise in fuel prices and 2012 vehicle sales taxes 1.3 Increase in stage • Turnover of trained staff carriage permits • Environmental clearances issued from 15 to 20 and resettlement activities per month by 2012 are delayed 2. Enhanced 2.1 Routine maintenance sustainability of road cost reduced from network in good $1,400 to $1,000 per condition km through area-wide PBCs by 2012 2.2 Average service life of periodic maintenance works increased from 3 to 5 years by 2012 3. Increased operational Road Board transparency and functional by 1 governance of PWD January 2008 and holds formal meetings to discuss user concerns External audits of financial accounts including procurement indicate full compliance with agreed procedures iii Design Performance Data Sources/Reporting Assumptions Summary Targets/Indicators Mechanisms and Risks 4. National road 4.1 Share of roads in good development programs condition connected to synergized NHDP and PMGSY roads increased from 10% to 30% by 2010 Outputs Assumptions 1. Paved, repaired, or 1.1 At least 10,800 km of • Engineers’ progress • First loan is effective by rehabilitated state state roads are in reports and audit reports March 2007 roads good condition submitted to ADB • Advance procurement for (IRI<4.5) by 2015 Project 1 is completed by • Review missions and March 2007 2. Staff with improved At least 200 PWD project completion reports skills and revised staff trained in one or operating procedures more areas of Risk planning, quality • Shortage of qualified control, contract contractors administration, safeguard compliance, and MIPMS usage by 2010 State-wide programs and budgets after 2008 are prepared by PWD’s central planning unit MIPMS used for financial management and monitoring by 2008 PWD initiates procurement of all works under PBCs by 2012 Activities with Milestones Inputs 1.1 All improvement works under Project 1 are completed by 1 September 2008 • ADB $550 million 1.2 Preparatory activities of the last project to be financed under the Investment • India $280 million Program are completed and PFR submitted to ADB by 1 May 2012 1.3 All road works financed under the Investment Program are completed by 31 December 2017 1.4 Each road improved roads under the Investment Program is maintained according to predetermined performance standards for at least 3 years after the improvements 2.1 Implementation of MIMPS by 1 June 2007 2.2 Establishment of Road Board by 1 December 2007 2.3 Planning Unit operational by 1 December 2007 2.4 Training of PWD staff completed by 1 June 2008 2.5 Two new operational zones mobilized by 1 June 2008 ADB = Asian Development Bank; IRI = international roughness index; km = kilometers, MIPMS = management information and project management system; NHDP = National Highway Development Program; PBC = performance based contract; PFR = periodic financing request; PMGSY = Pradhan mantra Gram Sadak Yojana; PWD = Public Works Department; RDP = road development plan; SRTC = State Road Transportation Corporation. 1 I. PROJECT DESCRIPTION A. Project Area and Location 1. The Project is located in the state of Uttaranchal in India. The 54,000 square kilometer (km2) state of Uttaranchal was created as the 27th state of India by bifurcating the state of Uttar Pradesh in November 2000. Over 90% of its terrain is hilly with the highest point reaching 7,817 meters (m), and 62% is forest covered.
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