Report and Recommendation of the President to the Board of Directors
Project Number: 40005 November 2009
Proposed Loan India: Jharkhand State Roads Project
CURRENCY EQUIVALENTS (as of 3 November 2009)
Currency Unit – Indian rupee/s (Re/Rs)
Re1.00 = $0.02118 $1.00 = Rs47.205
ABBREVIATIONS
ADB – Asian Development Bank CSC – construction supervision consultant DFID – Department for International Development of the United Kingdom EA – executing agency EIRR – economic internal rate of return EMP – environmental management plan FYP – Five Year Plan GOJH state government of Jharkhand IEE – initial environmental examination LIBOR – London interbank offered rate NGO – nongovernment organization NHAI – National Highways Authority of India NHDP – National Highway Development Program NH2 – National Highway 2 PIC – project implementation cell PPTA – project preparatory technical assistance RCD – Road Construction Department SAPE – sector assistance program evaluation TA – technical assistance
NOTES
(i) The fiscal year (FY) of the Government of India begins on 1 April. FY before a calendar year denotes the year in which the fiscal year begins, e.g., FY2009 begins on 1 April 2009.
(ii) In this report, "$" refers to US dollars.
Vice-President X. Zhao, Operations 1 Director General K. Senga, South Asia Department (SARD) Director S. Widowati, Officer-In-Charge, Transport and Communications Division, SARD
Team leader H. Iwasaki, Principal Transport Specialist, SARD Team members D. K. Lee, Transport Specialist, SARD R. Nagpal, Counsel, Office of the General Counsel L. M. Tai, Transport Specialist, SARD O. Tonkonojenkov, Transport Specialist, SARD
In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
CONTENTS Page
LOAN AND PROJECT SUMMARY i MAP I. THE PROPOSAL 1 II. RATIONALE: SECTOR PERFORMANCE, PROBLEMS, AND OPPORTUNITIES 1 A. Performance Indicators and Analysis 1 B. Analysis of Key Problems and Opportunities 2 III. THE PROPOSED PROJECT 6 A. Impact and Outcome 6 B. Outputs 6 C. Special Features 6 D. Project Investment Plan 7 E. Financing Plan 8 F. Implementation Arrangements 9 IV. PROJECT BENEFITS, IMPACTS, ASSUMPTIONS, AND RISKS 11 V. ASSURANCES 15 VI. RECOMMENDATION 17 APPENDIXES 1. Design and Monitoring Framework 18 2. State Road Subsector in India 20 3. External Assistance to the Road Sector 29 4. Project Roads and Summary of Design Standards 32 5. Detailed Cost Estimates and Financing Plan 33 6. Organizational Structure for Project Implementation 34 7. Implementation Schedule 35 8. Procurement Plan 36 9. Summary Poverty Reduction and Social Strategy 38 10. Summary Resettlement Plan 41
SUPPLEMENTARY APPENDIXES (available on request) A. Economic Assessment B. Summary Initial Environmental Examination C. Executing Agency Procurement Capacity Assessment Report and Recommendations
LOAN AND PROJECT SUMMARY
Borrower India
Classification Targeting classification: General intervention Sector (subsector): Transport and information and communication technology (road transport) Themes (subthemes): Economic growth (widening access to markets and economic opportunities), capacity development (institutional development) Location impact: Rural (high), urban (medium), and national (low)
Environment Category B Assessment
Project Description The Jharkhand State Roads Project will rehabilitate and improve a 311 kilometer (km) state road from Govindpur to Sahebganj (via Jamtara, Dumka, and Barhet) to a two-lane standard. The improved road will become a backbone of the northeastern part of the state, and connect it to National Highway 2 (NH2), the state’s main highway, and to the larger national highway network.
The Project will also enhance the project management skills of the officials of the Road Construction Department (RCD) of the state government of Jharkhand (GOJH) through involvement in activities that are central to project management, such as project design, implementation planning, procurement, land acquisition, resettlement and rehabilitation, environmental management, utility shifting, contract management, and financial management. This will be replicated by RCD for future road improvement projects.
Rationale Jharkhand is one of four states in India with a poverty incidence above 40%. It was created in 2000 out of the southern half of the state of Bihar, and a high proportion of its population is tribal. Socioeconomic indicators reveal that significant improvements are needed in terms of income, literacy, health, and access to basic amenities.
Jharkhand has prominent industrial cities, due to its abundant natural and mineral resources, but also has the highest rural poverty incidence in India. Industrial activities are concentrated in the area south of NH2, which connects Delhi to Kolkata and forms part of the core national transport network called the “golden quadrilateral.” The area to the north of NH2 lacks major industrial activities despite its rich mineral reserves. The poor quality of the road infrastructure is one factor constraining the development of this part of the state.
The Project proposes to address the disparities within Jharkhand by providing a good transportation network in a hitherto neglected area, and will contribute to reducing interstate disparities in India, ii
which is one of the key goals of the Government’s 11th Five Year Plan for 2007–2012.
Impact and Outcome The Project will improve transport connectivity in the state of Jharkhand through improvement of a key state road section in one of the state’s least developed but resource-rich areas. This will contribute to expansion of economic opportunities and poverty reduction in the area that the project road serves, and in turn improve the overall economic wellbeing of the state. Since Jharkhand is one of the least-developed states (as measured by social and economic indicators), this development is expected to contribute to the overall reduction of interstate disparities in India. The Project’s immediate outcome will be improved transport connectivity in the project area resulting from reduction in vehicle operating costs and travel time on the project road.
Project Investment Plan The Project’s investment cost is estimated at $240.0 million, including taxes and duties of about $21 million.
Financing Plan A loan of $200,000,000 from the ordinary capital resources of the Asian Development Bank (ADB) will be provided under ADB’s London interbank offered rate (LIBOR)-based lending facility. The loan will have a 25-year term including a grace period of 5 years, an interest rate determined in accordance with ADB’s LIBOR- based lending facility, a commitment charge of 0.15% per annum, and such other terms and conditions set forth in the draft loan and project agreements.
Allocation and Relending The Government of India will provide the loan proceeds in local Terms currency to the state government of Jharkhand on the same terms and conditions as received from ADB. The state government will bear the foreign exchange risk on the loan.
Period of Utilization Until 31 December 2014
Estimated Project 30 June 2014 Completion Date
Executing Agency The state government of Jharkhand, through RCD
Implementation A dedicated project implementation cell (PIC) established within Arrangements RCD will be responsible for overall project management throughout the Project implementation period. The PIC is headed by a director reporting to the RCD secretary, and will have enough staff to handle duties related to consulting services, civil works, land acquisition and resettlement, environment, and financial management (disbursement, accounting, and internal auditing). The PIC finance and accounts wing will handle project payments and accounting. For each civil works contract package, the PIC will have a project implementation unit headed by an assistant director (at the level of assistant engineer) to interact on a daily iii
basis with the civil works contractor and construction supervision consultant (CSC).
Two project-related committees were established in December 2008: (i) a high-level project coordination committee (chaired by the chief secretary of GOJH), which will facilitate preconstruction activities concerning different GOJH line departments; and (ii) a project monitoring committee, chaired by the secretary of RCD, to monitor project implementation.
Procurement All procurement to be financed under the proposed ADB loan will be carried out in accordance with ADB’s Procurement Guidelines (2007, as amended from time to time). International competitive bidding will be used for all civil works contracts. Shopping will be used for supply contracts less than $100,000. Advanced contracting and retroactive financing will be used to facilitate rapid implementation.
Consulting Services Consultants under the Project will be recruited in accordance with ADB’s Guidelines on the Use of Consultants (2007, as amended from time to time). RCD will hire a consulting firm as CSC, which will assume the role of the “Engineer” for the civil works contracts. The CSC will be selected using quality- and cost-based selection procedure with a quality–cost ratio of 80:20.
Project Benefits and The Project aims to redress the sharp urban–rural divide by Beneficiaries improving a key state road in one of the state’s underdeveloped areas. The improvement to the road infrastructure will contribute to expansion of economic activities and poverty reduction in the area that the road serves, and in turn improve the overall economic wellbeing of the state.
The direct beneficiaries will be the poor living in the project area, who are primarily farmers engaged in subsistence farming. The expected reduction in transport time and cost will generate opportunities for farmers to expand production and market agriculture produce outside their own villages. They will also have better employment opportunities outside agriculture, both through improved access to economic centers and increased industrial activities in the project area resulting from improved transport connectivity.
Enhancement of the project management skills of RCD officials will benefit all road users through long-term improvements in the condition of the overall state road network.
Risks and Assumptions The risk of initial delays has already been largely mitigated through RCD’s advance actions and support provided by ADB for various preconstruction activities. District-level task forces have been formed for interdepartmental coordination. Training on procurement and safeguard requirements was provided to RCD iv
staff and staff of other concerned departments to mitigate the risk of initial delays due to lack of coordination, and poor understanding of ADB requirements.
The risks related to obtaining the statutory environmental and forest clearance could also delay the civil works and could lead to increased construction costs and delays in project completion. To mitigate these risks, RCD has taken advance actions to obtain the requisite clearances. An environmental clearance has already been obtained from the Ministry of Environment and Forest. Proposals for forest clearance have also been submitted to the district forest offices. The high-level project coordination committee chaired by the chief secretary is closely monitoring progress on the needed clearances.
Project roads were identified in accordance with the state's road development priorities. The Project will entail land acquisition due to proposed road widening and construction of bypasses to avoid built-up areas. Detailed planning of land acquisition and resettlement actions has been carried out with assistance from ADB and its consultants, and through extended consultations with the project-affected communities.
The risk of an unrealistic sector reform agenda has been mitigated by reflecting the state context in the planned institutional strengthening, which takes into account both the actions already taken by GOJH, and the availability of resources.
In Jharkhand, the road maintenance budget allocation almost tripled from FY2003 to FY2007. Actual spending has also increased steadily, but is still well below the allocated budget. Securing maintenance funds is not an immediate concern. Parallel capacity development TA is to be provided under a TA cluster for Advanced Project Preparedness for Poverty Reduction in India. Consequently, the Project will focus on improving RCD's road asset management capability for better and more efficient usage of allocated funds.
o 84 o 00'E 87 00'E
I N D I A JHARKHAND STATE ROADS PROJECT
Sahebganj
B I H A R G Barhet an ga o Barharwa R o iv 25 00'N 25 00'N Godda er Pakur
Amrapara
Kodarma Deoghar Dumka U T T A R Madhupur P R A D E S H Barhi Giridih Chatra Garhwa Jamtara Daltonganj Hazaribagh Govindpur Gumia Dhanbad Kumardhubi Saunda Bokaro Ramgarh Patratu Gola N Lohardaga RANCHI W E S T Silli B E N G A L 0 20 40 60 80 Khunti C H H A T T I S G A R H Gumla Kilometers Mango
Jamshedpur State Capital Chakradharpur City/Town Ghatshila Simdega Chaibasa Project Road Chakulia National Highway Bahalda Hat Gamaharia Other Road Noamundi Railway o o 22 00'N River 22 00'N State Boundary Boundaries are not necessarily authoritative.
0 O R I S S A 9 - 0 7 8 9
H 84 o 00'E 87 o 00'E R
I. THE PROPOSAL
1. I submit for your approval the following report and recommendation on a proposed loan to India for the Jharkhand State Roads Project.
II. RATIONALE: SECTOR PERFORMANCE, PROBLEMS, AND OPPORTUNITIES
A. Performance Indicators and Analysis
2. India's achievement in economic growth and poverty reduction in recent years has been remarkable. The reforms initiated in 1991 are widely considered to have resulted in more rapid economic growth. India's per capita income grew at a moderate rate of 3.8% per annum in FY1992–FY2002, and increased more rapidly at a rate of 7.0% per annum in FY2003–FY2008. The poverty incidence fell from 36% in FY1993 to 27.5% in FY2004.1 However more than 300 million people still live below the poverty line. Regional imbalances and disparities in income and poverty persist. While the poverty incidence is less than 15% in some northwestern and southern states, in many central eastern states more than 40% of the population remains below the poverty line.
3. Jharkhand is one of four Indian states with a poverty incidence above 40%.2 It was created in 2000 from the southern half of the state of Bihar. Jharkhand’s population is about 26.9 million (26% of which is tribal), with an area of 79,714 km2. Compared to the current state of Bihar, Jharkhand is less-densely populated, and its population is still highly rural.3 While the state’s socioeconomic indicators are generally better than those of Bihar, they still lag behind the average for India in terms of income, literacy, health, and access to basic amenities.
4. On the other hand, the state is one of the richest in India in terms of natural and mineral resources. Forest cover is high (about 30%), and the state has extensive mineral resources, with India’s largest deposits of iron ore, copper ore, mica, and uranium; second-largest deposits of chrome; and third-largest deposits of coal and bauxite. This has produced a number of highly industrialized cities, such as Jamshedpur, Bokaro, and Dhanbad.
5. The state’s recent economic development has been impressive, due to the increasing demand for raw materials. Per capita income increased by 85% from the creation of Jharkhand in 2000 to 2006, compared with the average national increase of 54% over the same period. However, in absolute terms, the state’s per capita income is still 27% below the average for India.
6. The state is along the main transport corridor connecting New Delhi (the capital) and Kolkata (India’s third largest city). The state's industrial areas are concentrated in the central and eastern parts of Jharkhand, and are fairly well served by both the railway network and national highways. The state's two airports (at Ranchi and Jamshedpur) also serve these areas. Roads are the main means of transport in the rest of the rural areas, where 78% of the state's population lives.
7. Jharkhand’s road network includes 1,844 kilometers (km) of national highways, 1,886 km of state highways, 4,155 km of major district roads, and about 6,300 km of rural roads.4
1 Government of India, Planning Commission. 2008. Eleventh Five Year Plan 2007-2012. New Delhi. 2 The other three states are Bihar (41.4%), Chhattisgarh (40.9%), and Orissa (46.4%). Figures are as of FY2004. Government of India, Ministry of Finance. 2008. Economic Survey 2007–2008. Delhi. 3 When Bihar was divided, Jharkhand received 46% of the state’s land but just 25% of the population. 4 Including other district roads and village roads. 2
Jharkhand has 58 km of road per 100,000 population (compared to the average for India of 257 km per 100,000 population), and a road density of 18 km per 100 square km (km2), (compared to the average for India of 75 km per 100 km2). The state’s road penetration is inadequate, with some 74% of communities not connected with all-weather roads.
8. The condition of the roads in Jharkhand is very poor. In 2002, 60% of the state's national highways and state highways were in bad condition, with half of them barely drivable. The situation has improved little in the last 6 years, and can be attributed to longstanding underinvestment in road construction and maintenance; this has contributed to the poor state of road infrastructure in many other Indian states as well.
9. Three organizations are involved in the management of road infrastructure in Jharkhand. The National Highways Authority of India is entrusted to maintain and improve, under the National Highway Development Program, key sections of national highways including a 190 km stretch of National Highway 2 (NH2) forming part of the Delhi–Kolkata link of the “Golden Quadrilateral.” Other national highways, state highways, and district roads (totaling about 6,900 km) are the responsibility of the Road Construction Department (RCD) of the state government of Jharkhand (GOJH). Other district roads and village roads are under the Rural Works Department, which executes the rural roads improvement scheme under the Pradhan Mantri Gram Sadak Yojana (PMGSY).5
10. RCD is the nodal department in the state for overall development of road infrastructure. Recognizing the importance of road infrastructure for the state's economic development and reduction of poverty, GOJH has steadily increased the budgetary allocation to RCD from $65 million in FY2003 to $187 million in FY2008. The share of the budget allocated to road maintenance ranged from 10% to 15% of the overall budget during this period. Budget utilization for capital investment improved significantly in FY2008, but has been stagnant for maintenance, at around 85%. Considering the relatively small size of its road network and the lean structure of RCD, the constraints on road maintenance appear to be related to RCD’s institutional capacity to utilize allocated funds efficiently, rather than the size of the budget allocation.
11. The Project will be the first major road infrastructure development since the creation of Jharkhand in 2000. A design and monitoring framework for the Project is in Appendix 1.
B. Analysis of Key Problems and Opportunities
1. Main Sector Issues
a. In-State Disparities
12. Jharkhand has a few prominent industrial centers, dense forest that covers 30% of the land area, and mostly unirrigated agricultural land. The incidence of urban poverty is 23%, which is much lower than neighboring Bihar and Orissa, but the rural poverty incidence is 49% (the highest in India), pointing to a sharp urban–rural divide.
13. Industrial activities in Jharkhand are concentrated in the area south of NH2, which links Delhi to Kolkata. The area northeast of NH2 (called Santhal Parganas) lacks major industrial activities despite its rich mineral reserves. It is heavily forested, and its rural population is mainly engaged in subsistence farming. There are no major national highways or high-standard state highways connecting Santhal Parganas to NH2, to the state capital (Ranchi) or to outside
5 Meaning "Prime Minister's Rural Roads Program." 3 economic centers. Rail service in this area is also marginal. Poor transport has been a factor constraining the development of this part of the state. Jharkhand needs to significantly improve its road network to reduce intrastate disparities and accelerate the pace of economic growth and poverty reduction.
b. Institutional Capacity
14. Jharkhand’s RCD is a new organization created out of the old (pre-Jharkhand) Bihar RCD. The road network in Jharkhand comprises about one-third (in terms of length) of the national and state highways and major district roads in the former undivided state of Bihar, but the allocation of RCD staff to Jharkhand was not proportional. With the exception of executive engineers for works implementation, Jharkhand’s RCD has far fewer engineers of all types.6 The staff shortage is particularly acute at RCD headquarters, where planning and management takes place.
15. The lean structure and recent formation of Jharkhand’s RCD has some limited but important positive impacts. RCD’s staff outsources all works—including maintenance works—to civil works contractors. Supervision consultants are used for larger contracts. RCD has been freed of the financial burden and inefficiency of engaging laborers directly to carry out works on its own. Staff costs, which equaled 20.2% of RCD expenditures in FY2008, are declining, and do not place a major burden on the budget.
16. Some mid-level RCD staff have experience in externally funded projects from their involvement in the World Bank-financed Bihar Plateau Development Project in the 1990s. This experience has facilitated the project team's policy dialogue with GOJH. Overall Jharkhand’s RCD is more receptive to new ideas and the adoption of international best practices than its older, better-staffed peer organizations in other states.
2. Strategies of the Central Government and GOJH
17. Addressing regional disparities is a pillar of the Government of India’s 11th Five Year Plan (FYP) for 2007–2012. 7 Poor infrastructure is widely recognized as one of the biggest constraints to poverty reduction. The 11th FYP maintains the same emphasis on development of infrastructure and continues the national programs initiated in 10th FYP, such as the National Highway Development Program and Bharat Nirman,8 while introducing various fiscal incentives and directly targeted programs to remove infrastructure bottlenecks.
18. State roads in India are the responsibility of the state governments, and the Government has historically limited its involvement to transferring financial resources to the state governments for general road maintenance and removal of specific bottlenecks, such as bridges. However, these transfers have been insufficient, and additional problems have arisen including (i) financial resources thinly spread for too many projects; (ii) delays in preconstruction activities; (iii) weak management by contractors; and (iv) poor implementation capacity, as acknowledged by the Government in its 11th FYP. The result is the generally poor condition of state highways found throughout India.
6 For example, Jharkhand RCD has only three chief engineers and 11 superintending engineers. Bihar RCD has seven chief engineers and 28 superintending engineers. Jharkhand RCD has only seven executive engineers for survey, planning and design, whereas Bihar RCD has 21 for these functions. 7 Government of India, Planning Commission. 2008. Eleventh Five Year Plan 2007-2012. New Delhi. 8 Bharat Nirman (meaning "build India") is a comprehensive rural infrastructure development scheme begun in 2005 that consists of six components, including irrigation, rural housing, rural drinking water, rural electrification, rural telecommunication, and rural roads. 4
19. To assist with state roads, direct intervention has been sought from external financing institutions such as the Asian Development Bank (ADB) and the World Bank. Since 2001 ADB has extended assistance for state roads to Bihar, Chhattisgarh, Madhya Pradesh, Uttarakhand, and West Bengal states. Jharkhand will be the sixth state to receive ADB assistance for its state roads.
20. GOJH has initiated several reforms, based on lessons from other states in India that have received external assistance. The Jharkhand Highway Act was enacted in 2006 to provide a legal framework for overall highway corridor management by GOJH and future establishment of a highway authority. Rules under the act came into force in 2007. RCD has drafted its own Public Works Department (PWD) code to replace the Bihar PWD code that is currently in use. RCD also entered into a project development agreement with Infrastructure Leasing & Financial Services to identify highway schemes and projects that could be undertaken under public– private partnership options. A special-purpose vehicle has been formed for this purpose. GOJH has been proactive in creating an enabling environment for private sector participation.
3. External Assistance and ADB Strategy
21. Substantial external assistance has been provided to India for roads. ADB has provided about $3.7 billion in loans and technical assistance (TA), and the World Bank has provided loans and grants totaling $5.6 billion for upgrading national highways, improving state highways, and upgrading rural roads. The Japan Bank for International Cooperation (JBIC) (currently known as Japan International Cooperation Agency [JICA]) has provided five loans for a total of $0.33 billion to upgrade national highways and construct bridges. The Department for International Development (DFID) of the United Kingdom has provided TA to support the sector, including financing for project preparatory TA (PPTA) for the Project. 9 A TA for institutional strengthening is being processed as part of a TA cluster—also to be financed by DFID—for poverty reduction in India. ADB support has been developed in close collaboration with these key development partners—ADB and DFID hold regular coordination meetings, and active coordination has been undertaken with the World Bank. Mini-retreats for transport operations in South Asia have become a regular practice for ADB headquarters staff, while a broad-based sector collaboration mechanism has been instituted to facilitate the exchange of information between key sector coordinators of the resident missions of both ADB and the World Bank. Cooperation with the Government of Japan has also been active, particularly for the railway and urban subsectors.
22. Since 2001, ADB has provided six loans to improve India’s state road network (to West Bengal in 2001,10 Madhya Pradesh in 200211 and 2007,12 Chhattisgarh in 2003,13 Uttarakhand
9 Project preparatory technical assistance for State Roads Projects in Chhattisgarh and Jharkhand, processed in 2007 as a component technical assistance under ADB. 2006. Technical Assistance Cluster to India for Project Processing and Capacity Development. Manila (TA 4814-IND, financed by the Government of the United Kingdom). 10 ADB. 2001. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to India for the West Bengal Corridor Development Project. Manila (Loan 1870-IND). 11 ADB. 2002. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grant to India for the Madya Pradesh State Roads Sector Development Program. Manila (Loan 1958/1959-IND). 12 ADB. 2007. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grant to India for the Madya Pradesh State Roads Sector Project II. Manila (Loan 2330-IND). 13 ADB. 2003. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to India for the Chhattisgarh State Roads Development Sector Project. Manila (Loan 2050-IND). 5 in 2006, 14 and Bihar in 2008) 15 . Typically, ADB’s assistance in this subsector comprises capacity development to enhance the project and asset management capacity of the executing agency (EA), along with financial assistance for physical investment to improve the state road network. ADB facilitates experience sharing by holding workshops during project preparation utilizing TA resources. The tripartite portfolio review meetings—in which representatives of the EAs from ADB-assisted states gather and review the progress of their respective projects and discuss sector issues—have been an important forum for cross-learning.16
23. An ongoing World Bank-financed rural roads project in Jharkhand is supporting PMGSY to improve road connectivity in rural areas. 17 The Jharkhand State Roads Project will complement the World Bank rural roads project by addressing intrastate disparities, and will also contribute to reducing interstate disparities in India, which is a key goal of the 11th FYP. The latest country partnership strategy has been developed to support the goals of the 11th FYP. The Project is relevant to achieving the result of the country partnership strategy. An analysis of India's state road subsector is in Appendix 2. A summary of external assistance to the roads sector is in Appendix 3.
4. Lessons
24. Key recommendations of ADB’s 2007 sector assistance program evaluation (SAPE) include the following: (i) work closely with the EA to identify and resolve problems that lead to implementation delay; (ii) give equal emphasis to good portfolio management and the volume of loan approvals; and (iii) take into account local variations in implementation capabilities and make better use of past experience to improve the design of future projects. 18 These recommendations were fully considered in designing and implementing PPTA for the Project. A simple project design based on a project lending modality to focus on proper execution of core RCD functions has been adopted, in consideration of RCD's relatively low staffing level and limited exposure to externally assisted projects. Detailed action plans have been drawn up for preconstruction activities, and form the basis for ongoing support in safeguard, procurement, and financial management by ADB consultants and missions. A unit has been created within RCD for project formulation and implementation, and key positions have been filled by officials who have undergone ADB training on project management. ADB will provide TA to continue project management support and assist RCD in strengthening its core technical functions.
25. The 2007 SAPE also recommends further support for private sector participation. The implementation of public–private partnership projects has faced roadblocks in Jharkhand as a result of a lack of investor interest.19 This was considered in developing the Project's financing and execution modality. The Project will be the first major infrastructure development project
14 ADB. 2006. Report and Recommendation of the President to the Board of Directors on a Proposed Multitranche Financing Facility to India for the Uttaranchal State- Road Investment Program. Manila (MFF 010-IND). 15 ADB. 2008. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to India for the Bihar State Highways Project. Manila (Loan 2443-IND). 16 The quarterly tripartite portfolio review meeting is co-organized by the Department of Economic Affairs of the Ministry of Finance and the ADB India Resident Mission. 17 The World Bank. 2004. Project Appraisal Document on a Proposed Credit in the Amount of SDR 206 million (US$ 300 million equivalent) and Proposed Loan in the Amount of US$ 100 million to the Government of India for a Rural Roads Project. Washington DC. 18 ADB. 2007. Sector Assistance Program Evaluation, Transport Sector in India—Focusing on Results. Manila. 19 The National Highways Authority of India invited tenders for the Ranchi–Barhi road (one of the state’s highest traffic corridors) three times on a build–operate–transfer basis, with no response from the private sector. To attract investors to the highway portions, the National Highways Authority of India has recast these build–operate–transfer projects on an annuity basis, in which contractors that are awarded projects would be paid a guaranteed amount in installments, thus eliminating the risk of investors recovering their investment through tolls. 6 involving external financiers and following international competitive bidding procedures, which are themselves new challenges for the state. The Project will showcase the adoption of international best practices in a local context, and aim to instill confidence in the private sector in entering into a longer-term partnership that is not limited to project’s design and construction phases.
26. The 2007 SAPE further recommends that policy dialogue be strengthened regarding road safety, sector governance and corruption, and achieving socially inclusive objectives. Road safety has been addressed by adopting a wider right-of-way that provides adequate space outside the roadway for pedestrians and nonmotorized traffic. The detailed design was reviewed from a road safety viewpoint and changes made to improve road geometry. A full-fledged finance and accounting unit for project implementation, staffed with qualified officials and equipped with internal audit mechanisms, has been largely established, with rules and procedures for the unit already in place. The selection of the project location is in itself an expression of GOJH's focus on socially inclusive development. In the course of social analysis and resettlement plan preparation, project communities were consulted on the project design through intensive stakeholder consultation.20
III. THE PROPOSED PROJECT
A. Impact and Outcome
27. The Project will improve transport connectivity in the state of Jharkhand through improvement of a key state road section in one of the state’s least developed but resource-rich areas. This will contribute to expansion of economic opportunities and poverty reduction in the area that the project road serves, and in turn lead to balanced development and overall economic well-being of the state. Since Jharkhand is one of the least-developed states in terms of social and economic indicators, this development is expected to contribute to the overall reduction of interstate disparities in India.
28. The Project’s immediate outcome will be improved transport connectivity in the project area resulting from reduction in vehicle operating costs and travel time on the project road.
B. Outputs
29. The Project will rehabilitate and improve a 311 km state road from Govindpur to Sahebganj (via Jamtara, Dumka, and Barhet) to a two-lane standard. The improved road will become a backbone of the northeastern part of the state, and connect this part to NH2, and to the larger national highway network. A description of the project roads and a summary of design standards are in Appendix 4.
30. The Project will also enhance project management skills of the officials of RCD through involvement under the Project in activities that are central to project implementation, such as project design, implementation planning, procurement, land acquisition, resettlement and rehabilitation, environmental management, utility shifting, contract management, and financial management. Systems to enhance project management skills—such as a management information system and a quality assurance system—will be developed as part of this exercise. This approach will be replicated by RCD for future road improvement projects.
20 During the course of social assessment, 14 focus group discussions were organized. Resettlement plans based on a complete (100% coverage) census of affected persons are already in place. Preparation of the plans involved 17 block-level meetings. 7
C. Special Features
31. This is the first ADB intervention in the transport sector in Jharkhand, which is a newly- created state. Jharkhand’s RCD has had no experience with externally financed projects since separating from Bihar’s RCD. A simple design has therefore been adopted for the Project, which will allow RCD to concentrate on its core mandate: improving and maintaining the assets it is responsible for in a good state. The Project will adopt international best practices in procurement and contract management, e.g., international competitive bidding, Fédération Internationale des Ingénieurs-Conseils (FIDIC)-based contracts, and outsourcing of construction supervision. It is expected that these arrangements will facilitate participation of qualified contractors. Contracts will be provided in large packages to experienced and qualified contractors who will transfer the necessary technical and managerial skills to local contractors through association-type subcontracts. RCD officials will be exposed to international best practices in project management through the use of a computerized financial management system and a management information system, which will be linked to a quality assurance system to be established by the construction supervision consultant (CSC).
32. ADB will continue its assistance to RCD in preconstruction activities under a newly approved TA for Capacity Development to Enhance Project Readiness and Results Monitoring for Transport Projects, financed by the Government of Japan.21 Assistance will be provided for procurement, social safeguard, and environmental impact management.
33. To further strengthen its project management capacity, a capacity development TA for institutional strengthening of Jharkhand road sector has been developed in the amount of $750,000, which is included in a TA cluster for Advanced Project Preparedness for Poverty Reduction in India, financed by the Government of the United Kingdom.22 Consultants to be engaged under the TA will assist the RCD in (i) improving its business procedure for project management and asset management; (ii) adopting best practices and tools for project planning, design, road asset management, and road safety; and (iii) enhancing its staff's skills through dedicated, structured training on these issues.
34. The scope of the TA may also include assistance in (i) establishing Jharkhand’s state engineering academy, (ii) strengthening RCD’s central design office, and (iii) establishing a central testing laboratory. Advisory assistance will be provided under the grant-financed TA, while necessary equipment and facilities will be financed out of ADB loan proceeds.
D. Project Investment Plan
35. The project investment cost is estimated at $240.0 million, including taxes and duties of about $21 million. The total cost includes physical and price contingencies, and interest and other charges during implementation (Table 1). Detailed cost estimates and a financing plan are in Appendix 5.
36. ADB will finance the local taxes and duties, estimated at $21 million. On average, taxes and duties, which amount to 9%–13% of project costs for construction of state highways in India, are considered reasonable, transparent, and nondiscriminatory.
21 ADB. 2009. Technical Assistance to India for Capacity Development to Enhance Project Readiness and Results Monitoring for Transport Projects. Manila (TA 7252-IND). 22 Capacity development technical assistance for Jharkhand State Roads Sector, processed in 2009 as a component technical assistance under ADB. 2009. Technical Assistance Cluster to India for Advanced Project Preparedness for Poverty Reduction. Manila (financed by the Government of the United Kingdom).
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Table 1: Project Investment Plan ($ million) Item Amounta A. Base Costb 1. Right of Way 18.06 2. Road Improvement 171.63 3. Project Management 8.57 Subtotal (A) 198.26
B. Contingenciesc 30.05
C. Financing Charges During Implementationd 11.70 Total (A+B+C) 240.01 a Includes taxes and duties of $21 million. b In mid-2008 prices. c Physical contingencies computed at 8% for base cost components. Price contingencies computed at 2.5% on foreign exchange costs and 5% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. d Includes interest and commitment charges. Financing charges have been computed with interest during construction at the 5-year forward London interbank offered rate plus an effective contractual spread of 0.20%, and commitment charges at 0.15%. Source: Asian Development Bank estimates.
E. Financing Plan
37. The Government has requested a loan of $200,000,000 from ADB’s ordinary capital resources to help finance the Project. The loan will have a 25-year term, including a grace period of 5 years, an interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility, a commitment charge of 0.15% per annum, and such other terms and conditions set forth in the draft loan and project agreements. The Government has provided ADB with (i) the reasons for its decision to borrow under ADB’s LIBOR-based lending facility on the basis of these terms and conditions, and (ii) an undertaking that these choices were its own independent decision and not made in reliance on any communication or advice from ADB.
38. The Government will provide the loan proceeds in local currency to GOJH on the same terms and conditions as received from ADB. GOJH will bear the foreign exchange risk on the loan. The financing plan for the Project is in Table 2.
Table 2: Financing Plan Amount Share of Source ($ million) Total (%) Asian Development Bank 200.0 83.3 Government of Jharkhand 40.0 16.7 Total 240.0 100.0 Source: Asian Development Bank estimates.
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F. Implementation Arrangements
1. Project Management
39. Jharkhand’s RCD will be the EA for the Project. A dedicated project implementation cell (PIC)23 established within RCD will be responsible for overall project management throughout the Project implementation period. The PIC is headed by a director reporting to the RCD secretary, and will have enough staff to handle duties related to consulting services, civil works, land acquisition and resettlement, environment, and financial management (disbursement, accounting, and internal auditing). The PIC finance and accounts wing will handle project payments and accounting. For each civil works contract package, the PIC will have a project implementation unit headed by an assistant director (at the level of assistant engineer) to interact on a daily basis with the civil works contractor and CSC.
40. Two project-related committees were established in December 2008: (i) a high-level project coordination committee, chaired by the GOJH chief secretary, to facilitate preconstruction activities concerning different GOJH line departments; and (ii) a project monitoring committee, chaired by the RCD secretary, to monitor project implementation. The organizational structure for project implementation is in Appendix 6.
41. Task forces were formed in October 2007, at the start of the PPTA, in each of the five districts along the project road to coordinate project formulation and preconstruction activities among different district-level functionaries. Each of the task forces is chaired by the deputy commissioner and includes district-level representatives from the forest, land, and program departments. The executive engineer of RCD serves as secretary of the task forces. The task forces have served as effective vehicles to facilitate project formulation, and will remain in place during project implementation.
2. Implementation Period
42. The Project will be implemented over 5 years, inclusive of preconstruction activities in 2009, and a defects notification period of 1 year. The construction part of the civil works contract will be for 36 months (June 2010 to May 2013), followed by a 1-year defects notification period. The CSC will be engaged 2 months prior to commencement of civil works to assist RCD in preparatory activities, and continue to be engaged until the expiry of the 12-month defects notification period in May 2014. An indicative implementation schedule is in Appendix 7.
3. Procurement
43. All procurement to be financed under the proposed ADB loan will be carried out in accordance with the ADB Procurement Guidelines (2007, as amended from time to time). International competitive bidding will be used for all civil works contracts. Shopping will be used for goods with supply contracts estimated at less than $100,000. Advance contracting and retroactive financing will be used to facilitate rapid implementation. A procurement plan is in Appendix 8.
4. Consulting Services
44. Consultants under the Project will be recruited in accordance with ADB’s Guidelines on the Use of Consultants (2007, as amended from time to time). RCD will select and engage a
23 The PIC was established in March 2008. 10 consulting firm as CSC, which will assume the role of the “engineer” for the civil works contracts. The CSC will be selected using quality- and cost-based selection procedure with a quality–cost ratio of 80:20.
5. Advance Contracting and Retroactive Financing
45. ADB approved advance contracting of civil works in July 2008. An EA procurement capacity assessment was carried out during loan processing with positive findings on both organizational and procedural aspects (Supplementary Appendix C). It is expected that RCD’s procurement activities for works, equipment, and consulting services will progress to an advanced stage in which contracts may be ready to be awarded before loan effectiveness. Based on this, the Government and GOJH requested that the scope of advance contracting be enlarged to cover procurement of equipment and retroactive financing for works, equipment and consulting services. Up to 20% of the loan proceeds will be eligible for retroactive financing, provided that expenditures are incurred on works, equipment, and consulting services for the Project (i) prior to loan effectiveness but not earlier than 12 months prior to signing of the loan agreement; and (ii) in accordance with ADB's Procurement Guidelines, Guidelines on the Use of Consultants, and safeguard policies. The Government and GOJH have been informed that approval of advance contracting and retroactive financing does not in any way commit ADB to finance the Project.
6. Anticorruption Policy
46. ADB's Anticorruption Policy (1998, as amended to date) was explained to and discussed with the Government and GOJH. Consistent with its commitment to good governance, accountability, and transparency, ADB reserves the right to review and examine, directly or through its agents, any alleged corrupt, fraudulent, collusive, or coercive practices relating to the Project. To support these efforts, relevant provisions of ADB’s Anticorruption Policy (1998, as amended to date) are included in the loan regulations and the bidding documents for the Project. In particular, all contracts financed by ADB in connection with the Project will include provisions specifying the right of ADB to audit and examine the records and accounts of the EA and all contractors, suppliers, consultants, and other service providers as they relate to the Project.
47. GOJH will also (i) establish a separate finance and accounts wing within the PIC; (ii) introduce a financial management system prior to commencement of project implementation, for which a firm of consultants has been appointed under GOJH financing; (iii) engage an internal auditor to be placed in PIC for verification of records and reports; (iv) post signboards at the worksites furnishing relevant contract details; and (v) provide information on procurement and progress of project implementation on its website. In addition, GOJH will assign a senior finance and accounts officer from its accountant general's office to the PIC to ensure proper recording of financial matters.
7. Disbursement Arrangements
48. Loan disbursements will be in accordance with ADB’s Loan Disbursement Handbook (2007, as amended from time to time). Reimbursement procedures will be used for civil works, consulting services, and equipment. The statement of expenditures procedure will be used to reimburse eligible expenditures not exceeding $100,000 equivalent per individual payment.
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8. Accounting, Auditing, and Reporting
49. RCD will maintain separate records and accounts adequate to identify the goods and services financed from the loan proceeds, expenditures incurred, and the use of local funds under the project components. The accounts will be set up in accordance with sound accounting principles. Independent auditors, acceptable to ADB, will audit the accounts and related financial statements annually. The Government will submit consolidated annual audited reports and related financial statements to ADB within 6 months from the end of the previous fiscal year. The annual audit report will include an audit of the statement of expenditure procedures and will include a separate audit opinion on the use of loan proceeds and compliance with statement of expenditure procedures.
50. RCD will prepare and provide ADB with quarterly project progress reports, including any changes to the implementation schedule, problems or difficulties encountered and remedial actions taken, anticipated problems and the proposed remedial measures, and work to be undertaken in the following period. RCD will submit the quarterly progress reports to ADB within 45 days from the close of each quarter. These reports will include a summary financial account for each contract, expenditures to date, reports on performance monitoring, and results of monitoring of social and environmental impacts.
51. RCD will prepare and provide ADB with a project completion report within 3 months of completion of transactions under the Project. This report will provide a detailed evaluation of the design, costs, contractors’ and consultants’ performance, social and economic impact, economic rate of return, and other details relating to the Project as may be requested by ADB.
9. Project Performance Monitoring and Evaluation
52. A project performance monitoring system for the Project has been developed under the PPTA in consultation with the RCD. Baseline data have also been collected under the PPTA, as part of social assessment and traffic survey for economic analysis. The system will be further refined during the inception stage of the Project with the assistance of the CSC.
10. Project Review
53. ADB and RCD will meet regularly as required to discuss the progress of the Project and any changes to implementation arrangements or remedial measures required to achieve the project objectives. They will undertake a midterm review focusing on issues related to implementation arrangements, and agree on changes, if needed, to achieve the project objectives.
IV. PROJECT BENEFITS, IMPACTS, ASSUMPTIONS, AND RISKS
A. Project Economic and Financial Justification
54. The approach used to evaluate the Project follows the standard practice of comparing investment costs and road user costs with and without the Project, using net present value with a 12% discount rate and economic internal rate of return (EIRR) as decision criterion. The Highway Development and Management Model (HDM-4) was used for the analysis. The analysis focuses on savings in direct transport costs in terms of vehicle operating costs and value of passenger time. Value added from better transport links resulting in new industries and employment are not quantified in this analysis but are partially captured through benefits to 12 generated traffic. Other benefits such as flood mitigation, crop spoilage savings and safety are also not quantified, so the results presented here can be considered conservative.
55. The proposed improvements of the project road are economically viable yielding an overall EIRR of 21%. Among the four contract packages, three have EIRRs above 20% and one has an EIRR of 17.6%. The Project is very robust with a high economic rate of return and satisfies the economic efficiency criterion.
56. The sensitivity of the EIRR for the project road was analyzed with respect to changes in the benefit and cost streams. The following sensitivity test cases were examined: (i) construction costs increase by 15%; (ii) no time savings; (iii) benefits decrease by 15%; and (iv) costs increase by 15%, and benefits decrease by 15%. The results show that the quantified economic benefits are robust to various sensitivity tests and all road sections have an EIRR of more than 12% in all sensitivity tests. In the worst case scenario, the EIRR for the Project as a whole is 17% and the lowest EIRR of any individual contract package is 14%. More details of the economic assessment are in Supplementary Appendix A.
57. As the Project is non-revenue-generating, the FIRR was not calculated.
B. Social Aspects
58. Poverty Reduction and Social Impact. According to the National Human Development Report 2001, 24 the state of Jharkhand, along with the neighboring states of Bihar, Orissa, and Uttar Pradesh, consistently ranks among the poorest performers in terms of nearly all of 21 indicators (including demographic, health care, education, unemployment, poverty, and social deprivation indicators). Although Jharkhand has many natural resources (e.g., coal, iron, and forests), 80% of the population is engaged in a combination of low-skilled occupations such as subsistence agriculture, nonagricultural labor and small business or petty trade. Due to the small size of average landholdings (0.4–0.8 hectares), having more than one livelihood is necessary to supplement the basic income and subsistence harvests generated through rain- fed agriculture.
59. Jharkhand lags behind most other Indian states in terms of road connectivity, resulting in high transportation costs and long travel times to traverse even short distances within the state. 25 A poverty and social assessment was undertaken during project preparation. The assessment indicated that by rehabilitating the proposed Govindpur–Sahebganj road, travel time will be reduced by as much as half. Reduced travel times and costs will mean better access for local communities to markets and social services such as education and health. These improvements will lead to increased human, physical, financial, and social capital within the project districts, thereby helping to reduce poverty and promote inclusive growth. A summary poverty reduction and social strategy report is in Appendix 9.
60. Gender. In Jharkhand, the gender ratio of the population is 941 females for every 1,000 males (2001 census). The literacy rate for females (38.9%) is low in comparison to the national level (53.7%, in the 2001 census). A gender analysis was undertaken during the social study to assess the impact of the Project. Six focus group discussions were undertaken with women belonging to different socioeconomic groups, such as the scheduled tribes and the scheduled castes. The discussions revealed that women in the project area are engaged mainly in
24 Government of India, Planning Commission. 2001. National Human Development Report 2001. New Delhi. 25 It currently takes 6 hours to travel by 4-wheel-drive vehicle along the project road from Govindpur to Dumka, a distance of only 145 km. 13 household chores and farming. At the primary level, the enrollment ratio of male and female students is about equal, but as the school level increases female enrollment begins to decrease. The dropout rate for girls is especially high after middle school due to (i) lack of higher education opportunities within the villages they inhabit, and (ii) difficulties involved in traveling back and forth to such schools located outside the villages. Access to health facilities is also nearly impossible for many women at night and during the rainy season, jeopardizing the lives of both mother and child in emergencies during childbirth. Women at the focus group discussions said that the Project would considerably improve their access to higher education, better health care services outside their villages, and markets, and would provide access to better employment opportunities for both women and men.
61. Involuntary Resettlement. The Project was developed with a view to minimizing the need for land acquisition. A census survey based on the detailed design was undertaken from January to August 2008 to assess the resettlement impacts. On average, the existing road will be widened to 30–45 meters, and a total of 150 hectares of private land needs to be acquired. The census identified a total of 4,515 households whose assets will be impacted, including 4,143 agricultural plots, 1,489 residential structures and 680 commercial or commercial-cum- residential structures. In 93% of all cases involving land, these impacts will affect less than 10% of the area of the plot. In terms of structures, 56% of impacts will affect only boundary walls, gates and gardens with little or no impacts on the main structures.
62. Four resettlement plans were prepared in accordance with the Government's National Rehabilitation and Resettlement Policy 2007, Land Acquisition Act (1894), and ADB’s Involuntary Resettlement Policy (1995) to address the losses of people affected by the Project. Details of compensation rates for the loss of land and structures at replacement cost, shifting assistance, transitional assistance, and income restoration assistance are provided in the entitlement matrix of the resettlement plans. Additional support provisions for affected people belonging to vulnerable groups are also included in the resettlement plans. The total cost for resettlement is estimated at $16.2 million. A summary of the resettlement plans is in Appendix 10.
63. Indigenous People. The project road runs through a part of Jharkhand known as Santhal Parganas. All six project-affected districts have Santhal populations. The Santhals are one of the largest tribal communities in India and are distributed widely throughout the states of West Bengal, Bihar, Jharkhand, Assam, and Orissa. Taking into account the significant presence of scheduled tribes in the project area, detailed social assessments were undertaken to study the potentially different impacts of the Project on tribal and nontribal households. The results clearly showed that tribal households in the project area have similar socioeconomic characteristics to the overall population and are largely assimilated into the local communities. It is not expected that the Project will have any differential impacts on tribal population. However, specific provisions have been incorporated in the entitlement matrix of the resettlement plans to mitigate project impacts on tribal households.
64. HIV/AIDS and Human Trafficking. The state of Jharkhand has been categorized as a “low prevalence state,” with 258 officially reported cases of HIV/AIDS infection as of August 2006.26 Similarly, interactions with stakeholders at the district and block levels revealed that no cases of either HIV/AIDS or human trafficking were reported during the course of the social assessments. Awareness campaigns and programs are organized in villages on a monthly basis. However, RCD will ensure that all civil works contractors disseminate information at worksites on the risks of sexually transmitted diseases and HIV/AIDS for those employed during
26 National AIDS Control Organization, Ministry of Health and Family Welfare. 2007. HIV Fact Sheets. Delhi. 14 construction. All civil works contracts will include specific clauses on these undertakings, and RCD, with support from the CSC, will strictly monitor compliance during project implementation.
C. Environmental Aspects
65. The Project is classified as environment category B in accordance with the ADB Environmental Assessment Guidelines (2003). The Project is also classified as a category B project in accordance with the Government of India’s environmental impact assessment requirements. However, expansion of the carriageway requires some forest land to be converted as part of the right of way. The Forest Act requires that forest clearance be obtained from the regional office of the Ministry of Environment and Forest. An assistant director has been added to the PIC to deal with the environmental aspects of the Project, which include obtaining the forest clearance, implementing any conditions attached to forest clearance, as well as implementing the overall environmental management plan, and conducting environmental monitoring.
66. Based on the project categorization, an environmental assessment study was carried out under the PPTA. The findings of the environmental assessment study, which are presented in the initial environmental examination (IEE) report, indicate that the Project is not expected to present any major environmental and ecological concerns. Most impacts will be temporary, and occur during construction. The main causes are land clearing for widening the roadway, earthwork involving cut and fill, and quarrying and transportation of construction materials to support construction activities. After the opening of the improved roads, direct local impacts will be mostly related to road accidents. The IEE report details mitigation measures to minimize these adverse impacts presented in an environmental management plan (EMP) to guide implementation of the mitigation measures by civil works contractors, CSC, and RCD. To ensure strict implementation of the EMP by the civil works contractors, the EMP will be included in the bidding document. The PIC, assisted by the CSC, will supervise and monitor implementation by the contractor of the mitigation measures stated in the EMP. In addition, the PIC, in close coordination with relevant state agencies (such as the Forest Department and Jharkhand Pollution Control Board) will be responsible for carrying out environmental monitoring and preparing an environmental monitoring report on behalf of RCD. A summary IEE report is in Supplementary Appendix B.
D. Risks
67. The SAPE identified issues relating to state road projects in India, including (i) initial implementation delays, (ii) risk of incomplete network development resulting from avoiding areas that require involuntary resettlement and are environmentally sensitive, (iii) appropriateness of the sector development framework, and (iv) a need for government discipline to efficiently and effectively secure the maintenance budget.
68. The risk of initial delays has already been largely mitigated through RCD’s advance actions and support provided by ADB under the PPTA (footnote 9) and the newly approved capacity development TA (footnote 21) for various preconstruction activities. District-level task forces have been formed for interdepartmental coordination. Training on procurement and safeguard requirements was provided to RCD staff and staff of other concerned departments to mitigate the risk of initial delays due to lack of coordination, and poor understanding of ADB requirements.
69. The risks related to obtaining the statutory environmental and forest clearance could also delay the civil works and could lead to increased construction costs and delays in project 15 completion. To mitigate these risks, RCD has taken advance actions to obtain the requisite clearances. An environmental clearance has already been obtained from the Ministry of Environment and Forest. Proposals for forest clearance have also been submitted to the district forest offices. The high-level project coordination committee chaired by the chief secretary is closely monitoring progress on the needed clearances.
70. Project roads were identified in accordance with the state's road development priorities. The Project will entail land acquisition due to proposed road widening and construction of bypasses to avoid built-up areas. Detailed planning of land acquisition and resettlement actions has been carried out with assistance from ADB and its consultants, and through extended consultations with the project-affected communities.
71. The risk of an unrealistic sector reform agenda has been mitigated by reflecting the state context in the planned institutional strengthening, which takes into account both the actions already taken by GOJH, and the availability of resources.
72. In Jharkhand, the road maintenance budget allocation almost tripled from FY2003 to FY2008. Actual spending has also increased steadily, but is still well below the allocated budget. Securing maintenance funds is not an immediate concern. Parallel capacity development TA is to be provided under the TA cluster for Advanced Project Preparedness for Poverty Reduction in India. Consequently, the Project will focus on improving RCD's road asset management capability for better and more efficient usage of allocated funds (footnote 22).
V. ASSURANCES
73. In addition to the standard assurances, the governments of India and Jharkhand have given the following assurances, which will be incorporated in the legal documents:
74. Implementation. The Government will ensure that GOJH provides timely and adequate counterpart funds and facilities for the Project, including the funds needed for implementing the environmental management plans and resettlement plans.
75. The Government will ensure that GOJH implements the recommendations of ADB’s TA for Institutional Strengthening of Jharkhand Road Sector during project implementation.
76. GOJH will cause RCD to establish a dedicated PIC within RCD, throughout the Project implementation period, headed by a director reporting to the secretary, RCD, to be responsible for Project management. The PIC shall comprise the PIC director, deputy director, the officer supervising the implementation of the EMP, and the officer supervising the implementation of the resettlement plans. GOJH will also cause RCD to appoint requisite staff in the PIC to handle consulting services, civil works, land acquisition and resettlement, environment and financial management, including disbursement, accounting and internal auditing.
77. GOJH will cause RCD to establish four field PIUs as part of the PIC, each headed by an assistant director (at the level of assistant engineer) for each works contract to interact on a day-to-day basis with the civil works contractor and CSC.
78. GOJH will cause RCD to (i) create a separate finance and accounts wing within the PIC; (ii) introduce a financial management system prior to commencement of project implementation; (iii) engage an internal auditor to be placed in PIC for verification of records and reports; (iv) post signboards at the work sites furnishing relevant details of the contract; and (v) provide 16 information on procurement and progress of project implementation on its website. In addition, GOJH will assign a senior finance and accounts officer to RCD from its accountant general's office to ensure proper recording of financial matters.
79. Road Maintenance Financing. The Government will cause GOJH to ensure that adequate and timely funding is provided to RCD for maintenance of the roads improved under the Project.
80. GOJH will ensure that a dedicated state-level road fund is created by the end of the second fiscal year commencing after the loan effectiveness, in order to provide sufficient funds for the maintenance of the roads under the Project and the GOJH's road assets in general.
81. Environment. The Government through GOJH will cause RCD to ensure that (i) the Project is designed, constructed, operated, and maintained in accordance with the environmental laws and regulations of the Government, GOJH, and ADB’s Environment Policy (2002); (ii) the EMP and mitigation measures included therein, as specified in the IEE, are properly implemented; (iii) the EMP is incorporated into the bidding documents and civil works contracts, and updated, if necessary, during project implementation with prior approval of ADB; (iv) all environmental permits, licenses, and clearances are obtained in a timely manner prior to commencement of civil works in the relevant section of the project roads; (v) any adverse impact on the environment that may arise from project implementation is promptly mitigated or minimized in accordance with the EMP; (vi) implementation of the EMP, including any safety breaches, violation of environmental standards, and corrective measures taken in respect thereof are reported semiannually to ADB; and (vii) reports and information are provided to ADB on request to enable it to verify that the goods, works, and consulting services, if any, financed out of the proceeds of the loan, have been produced in a responsible manner with a view to resource efficiency, waste minimization, and other environmental considerations.
82. GOJH will cause RCD to report to ADB any change in the alignment of any project road, so as to determine if additional environmental assessment study is necessary.
83. Involuntary Resettlement. The Government through GOJH will cause RCD to ensure that (i) the Project is implemented in accordance with ADB’s Involuntary Resettlement Policy (1995) and Policy on Indigenous Peoples (1998), the Government's relevant laws and policies, and the resettlement plans; (ii) all affected people are given adequate opportunity to participate in resettlement planning and implementation; (iii) the resettlement plans are disclosed to the affected people, who are compensated and assisted prior to displacement from their houses, land, and 17
assets; and before commencement of civil works in the relevant section of the project road; (iv) affected people receive priority for wage employment in project construction; (v) additional assistance is provided for vulnerable groups; (vi) resettlement plans are updated, if necessary, in the course of project implementation, disclosed to the affected people, and submitted to ADB for approval and disclosure on its website; (vii) implementation of the resettlement plans is monitored by the PIC, which shall report the results quarterly to ADB; and (viii) affected people have an opportunity to express grievance at appropriate levels, and local officials are instructed to resolve disputes and implement measures promptly. 84. Execution of Civil Works. The Government through GOJH will ensure that (i) subject to compliance with the requirements of the related resettlement plans and IEE/EMP, and the applicable laws and regulations of the Government and GOJH, RCD will make available land and rights in land, free from any encumbrances, and clear the utilities, trees, and any obstruction on such land, in a timely manner, as required for commencement of construction activities relating to each road or section of a road in the works contract; and (ii) subsequent to award of a contract package to a contractor, roads or sections of roads in that package are not handed over to the contractor unless all applicable provisions of the related resettlement plans and IEE/EMP are satisfied.
VI. RECOMMENDATION
85. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Asian Development Bank (ADB) and, acting in the absence of the President, under the provisions of Article 35.1 of the Articles of Agreement of ADB, I recommend that the Board approve the loan of $200,000,000 to India for the Jharkhand State Roads Project from ADB’s ordinary capital resources, with interest to be determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility; a term of 25 years, including a grace period of 5 years; and such other terms and conditions as are substantially in accordance with those set forth in the draft Loan and Project Agreements presented to the Board.
C. Lawrence Greenwood, Jr. Vice-President (Operations 2)
11 November 2009
18 Appendix 1
DESIGN AND MONITORING FRAMEWORK
Data Sources and/or Design Performance Targets and/or Reporting Assumptions Summary Indicators Mechanisms and Risks Impact Risks Improved surface- The number of blocks and district National and state Other complementary transport headquarters connected by transport sector transport sector investment accessibility in the surfaced two-lane roads and statistics schemes (national state of Jharkhand villages connected with all- highways, rural roads, and weather roads railways) are not implemented as planned.
Outcome Assumptions Improved mobility Measured traffic growth rates Post-implementation Delivery of the project is and accessibility in surpass the growth rates used in classified traffic counts timely. the project area the economic analysis (including occupancy The state allocates and trip purpose) by sufficient funds for Travel time on the project roads construction maintenance. reduced by 20%–40%, with the supervision consultant overall travel time from Govindpur Funds allocated for to Sahebganj reduced from the Data collected through maintenance works are current 8–10 hours to about 5 the road asset properly utilized to maintain hours management system to the project road so that the be developed under the international roughness Vehicle operating costs on the institutional index is below 4 (compared project roads reduced by 12%– strengthening TA with 5–12 in 2008). 30% for two-axle trucks and by 15%–35% for passenger buses Transport service providers after completion are available and provide better services on the project roads
Outputs Assumptions 1. Rehabilitated Approximately 311 km of state Progress reports of the PIC staff turnover will be and improved state highways rehabilitated or executing agency minimal during the project roads upgraded to two lanes by 2013 period. ADB review missions Safeguard policies follow 2. Systems for A financial management system, ADB procedures and improved project a management information Project performance requirements. management system, and a quality assurance monitoring system system for improved project Qualified and experienced management in place Project completion contractors and consultants report show interest.
Procurement is effective and efficient. Civil works are implemented on schedule.
Appendix 1 19
Activities with Milestones Inputs
1. Project Readiness Enhancement For 1.1 and 1.2 1.1 Consultants under TA for Capacity Development to Enhance Project (i) ADB: part of $1.5 million Readiness and Results Monitoring for Transport Projects (TA 7252-IND) from TA 7252 financed by mobilized by August 2009 the Government of Japan 1.2 Consulting services to enhance readiness continue until the first quarter of (ii) Government: in-kind 2010 contribution for 1.3 Land acquisition, resettlement and rehabilitation, environmental mitigation, administrative cost and utility shifting to be completed prior to the award of the civil works contract (expected by the second quarter of 2010) For 1.3, 2, and 3.3: (i) ADB: $200 million 2. Road Improvement (ii) Government: 2.1 Recruitment of construction supervision consultant completed by the first $40.0 million quarter of 2010 2.2 Procurement of civil works completed by the second quarter of 2010 For 3.1 and 3.2: 2.3 Construction of all civil works completed by the second quarter of 2013 (i) Government of the United Kingdom: $0.75 million 3. Institutional Strengthening (ii) Government: 3.1 Processing of the institutional strengthening TA under the TA Cluster for $0.19 million in-kind Advanced Project Preparedness for Poverty Reduction by September 2009 contribution 3.2 Engagement of the institutional strengthening consultant by the end of 2009 3.3 Equipment procured by mid-2010 based on the recommendations of the institutional strengthening consultant
ADB = Asian Development Bank, TA = technical assistance.
20 Appendix 2
STATE ROAD SUBSECTOR IN INDIA
A. Road Sector Overview
1. The Road Network
1. India’s road network mainly consists of three categories of roads: (i) about 60,000 kilometers (km) of national highways, (ii) a secondary system comprising about 600,000 km of state highways and major district roads, and (iii) a tertiary system consisting of 2.7 million km of mainly rural roads. The total road length is estimated to be about 3.4 million km. The national highways are high-density interstate linkages, which comprise just 2% of the network but carry about 40% of the traffic. State highways link national highways with district headquarters, important towns, and minor ports, while major district roads run within districts, connecting areas of production with markets, and rural areas to district headquarters, and state and national highways. The secondary system comprises about 18% of the network and carries about 40% of the traffic. Rural roads link rural communities with the highway network, providing access to higher agricultural incomes, employment opportunities, and social services. They represent about 80% of the network and carry about 20% of traffic.
2. Sustained underinvestment in road infrastructure in India has affected all levels of the road network.1 National highways and the secondary system have proven inadequate to meet the rapid growth in traffic. In the last decade, road-based freight traffic increased at about 12% per year and passenger traffic at about 8% annually, leading to congestion, road deterioration, and high transport costs. Widespread overloading of freight vehicles damages the road surface, while mixed use of the roadway by both motorized and nonmotorized vehicles (bicycles, animal- drawn vehicles, etc.) causes congestion and high levels of traffic accidents. Rural areas are home to 70% of India’s population, and many villages continue to rely on (i) earthen tracks that are unsuitable for motorized traffic and become impassable during the rainy season due to the poorly finished road surface; (ii) missing bridges; and (iii) an inadequate, defective, or nonexistent drainage structure. Even where all-weather connections have been provided, the standard of rural roads is low, maintenance is poor, and many roads are in need of rehabilitation.
2. Government Strategy and Asian Development Bank Involvement
3. Two major national initiatives for road infrastructure development were initiated at the turn of the century. The National Highway Development Program (NHDP) was launched in 1998 for the upgrading and widening of the national highway network. For rural roads, Pradhan Mantri Gram Sadak Yojana (PMGSY)2 was initiated in 2000 as a centrally-financed scheme. This was later subsumed within Bharat Nirman. 3 To meet the funding requirements, the Government established the Central Road Fund under the Central Road Fund Act in 2000 as a mechanism for using fuel tax proceeds exclusively for road development in the country.4 An explicit tax on
1 Since the Sixth Five-Year Plan, 1980–1985, annual investments in roads varied at 0.6%–1.5% of gross domestic product, with an average of 1.1%. 2 Meaning " Prime Minister's Rural Roads Program." 3 Bharat Nirman (meaning "build India") is a comprehensive rural infrastructure development scheme begun in 2005, and consisting of six components (irrigation, rural housing, rural drinking water, rural electrification, rural telecommunication, and rural roads). 4 The tax was initially set at Rs1 per liter, for both gasoline and diesel, and then increased to Rs1.50 per liter (about $0.03 per liter) in 2003. In 2004, $438 million from the Central Road Fund went to the construction and maintenance of national highways, $222 million to state highways, and $511 million to rural roads (Source: Ministry of Finance).
Appendix 2 21
fuel (gasoline and high-speed diesel oil) provides the funds for the Central Road Fund, and collects around $1.23 billion yearly. The tax is first deposited in the Consolidated Fund of India and is then transferred into the Central Road Fund with the approval of Parliament. The Central Road Fund is controlled by the Ministry of Finance. Its funds are allocated for national, state, and rural roads as defined in the act. Central Road Fund allocations for the national highways are earmarked for implementing the NHDP. This assured revenue stream has enabled the National Highways Authority of India (NHAI) to raise debt funds to finance its program. The corresponding allocations for state highways and rural roads are significant additional resources for these subsectors.
4. India’s 11th Five Year Plan (FYP) for 2007–2012 continues to emphasize the development of physical infrastructure as the key to promoting broad-based economic growth, developing agriculture and the rural economy, and enhancing the competitiveness of Indian industry and services. While the infrastructure development programs initiated during the 9th and 10th FYPs (including both the NHDP and Bharat Nirman) will continue, the Government plans to supplement these by setting up special economic zones and special economic regions to promote focused infrastructure development. 5 The public sector would take the lead in making infrastructure investment in the lagging parts of India. In tandem, the Government is also promoting the use of public–private partnership (PPP) in areas such as highways, urban infrastructure, mass rapid-transit systems, and tourism infrastructure. To mobilize long-term funds for infrastructure development, the 11th FYP will aim to develop and tap the insurance and pension industry. In addition, long-term funding from development partners such as ADB would continue to be important, especially in view of the current financial and economic crisis.
Table A2.1: Government Strategy and ADB Assistance Secondary Network: State Item Primary Network: Highways and Major District Tertiary Network: National Highways Roads Rural Roads Length (km) 60,000 600,000 2,700,000 Government NHDP I (Golden Special Accelerated Road PMGSY: connect all Scheme and Quadrilateral) by 2007 Development Program for the habitations with population Immediate North-Eastern Region (SARDP- of 1,000 and above (500 in Target NHDP II (north–south and NE) to complete by 2012 the case of hilly or tribal east–west corridors) by areas) by 2009 2009 For other states, allocation of financial support to capital NHDP III 1st phase by 2009 investment and maintenance SARDP-NE phase A to complete by 2012 Length 6,000 under NHDP I 2,500 in the northeastern region 370,000 under PMGSY Targeted for under SARDP-NE Improvement 7,300 under NHDP II
(km) 10,000 under NHDP III 3,251 under SARDP-NE Funding NHDP I and II: $15.1 billion $2.7 billion for SARDP-NE $11 billion by 2009 Requirements for capital financing to Meet (including national highway) Immediate NHDP III: $12.5 billion Target $2.7 billion for SARDP-NE (including secondary roads)
5 Special economic regions differ from special economic zones in that they are not eligible for export tax benefits.
22 Appendix 2
Secondary Network: State Item Primary Network: Highways and Major District Tertiary Network: National Highways Roads Rural Roads Government Earmarked cess on petrol Earmarked cess on petrol and Earmarked cess on petrol Funding and diesel diesel and other budgetary and diesel Strategy support Tolls Multilateral funding for State budgetary allocation 10 core states Multilateral funding Tolls Market borrowing by states Market borrowing (proposed) Multilateral funding
Market borrowing Ongoing ADB For NHDP II West Bengal: $79.2 million Rural Roads Sector I: Assistance (2001) $400 million (2003, East–West Corridor: Chhattisgarh and Madhya $320 million (2002) Madhya Pradesh: $150 million Pradesh) (2002) National Highway Corridor Rural Roads Sector II (Sector): $400 million (2003) Chhattisgarh: $180 million Investment Program: (2003) National Highway Sector II: $750 million MFF (2005; $400 million (2004) Uttaranchal: $550 million MFF Assam, Orissa, and West (2006) Bengal) National Highway Corridor (Sector) – supplementary: Madhya Pradesh II: $320 million $100 million (2009) (2007) Bihar: $420 million (2008)
Sources: Government of India, Planning Commission. 2008. Eleventh Five Year Plan 2007-12. New Delhi, and Asian Development Bank.
B. The State Road Subsector—Issues
5. The secondary network is the responsibility of the state governments. Upkeep of the state roads and districts roads are normally entrusted to state government public works departments (or their equivalent). The Government’s strategy has been to provide financial support to the state governments from the earmarked tax on gasoline and diesel oil, or through budgetary allocation. The 12th Finance Commission recommended additional grants of Rs150 billion for maintenance of roads and bridges from FY2006 through FY2009. Despite the substantial central assistance, funds have been inadequate and generally poorly managed. Half of the secondary network has a poor-quality road surface.
6. Following the launch of the NHDP and PMGSY, with strong central backing for funding and project management, the secondary network is now seen as the weakest link of the overall road network in India. In addition to funding shortages, the 11th FYP lists the following as key constraints in the state road subsector:
(i) Inadequate resources. More projects are sanctioned than can be undertaken using available resources, leading to available funds being spread too thinly, and resulting in time and cost overruns.
Appendix 2 23
(ii) Preconstruction activity delays. Work has at times been awarded without acquisition of all the land required for the project, affecting acquisition of the environmental clearance and the shifting/removal of utilities.
(iii) Weak management by contractors. Several measures have been taken by the contracting industry to acquire state-of-the-art equipment and procure good technical and managerial staff, but considerable scope exists for improving project management, and scheduling of human resources and equipment.
(iv) Poor implementation capacity. The state public works departments are required to be capable of meeting current needs, in terms of modern technology and commercial management principles. In many states there is a need to improve their capacity for planning, designing, and executing works to meet the transport demands of users. Considerable scope also exists for enhancing the training arrangements for engineering personnel. Improvement is also required in the contracting industry and consultancy sector.
C. Jharkhand Road Sector—Overview
1. Background
7. The state of Jharkhand, which was created in November 2000 by dividing the state of Bihar, has an area of around 79,700 square km (km2). It is surrounded by Bihar (to the north), West Bengal (to the east), Orissa (to the south), Chhattisgarh (to the southwest), and Uttar Pradesh (to the west). The 2001 census recorded a population of 26.9 million, 26% of which was tribal.
8. The main transport corridor connecting New Delhi (the capital) and Kolkata runs through the state. Industry is concentrated in the central and eastern parts of the state, which are fairly well-served by both the railway network and national highways. The state's two airports (at Ranchi and Jamshedpur) also primarily serve these areas. Roads are the primary form of transport in rural areas, where 78% of the state's population lives.
2. The Road Network and Administration
9. The road network in Jharkhand in 2008 is described in Table A2.2. Jharkhand has 58 km of road per 100,000 population (compared to the average for India of 257 km per 100,000 population), and a road density of 18 km per 100 km2, (compared to the average for India of 75 km per 100 km2). The state’s road penetration is inadequate, with some 74% of habitations not connected with all-weather roads.
10. There are three organizations involved in the management of road infrastructure in Jharkhand. NHAI is entrusted to maintain and improve, under NHDP, key sections of national highways including 190 km of National Highway 2 (NH2), which forms part of the Delhi–Kolkata link of the “golden quadrilateral”. Other national highways, state highways, and district roads totaling about 6,900 km are the responsibility of the Road Construction Department (RCD) of the state government of Jharkhand (GOJH). Other district roads and village roads are under the Rural Works Department, which executes the rural roads improvement scheme under PMGSY.
11. RCD is the primary state department involved in development of road infrastructure, and is responsible for construction and maintenance of roads on behalf of GOJH. Its organizational
24 Appendix 2
structure is typical for public works departments in Indian states. It is headed by a politically appointed minister. A secretary, who reports to the minister, is responsible for assisting with framing and implementing state policy, monitoring the progress of road works and overall departmental performance. The engineer-in-chief reports to the secretary and is in charge of the implementation of works program. The engineer-in-chief is supported by three chief engineers— one each for communication, central design organization, and national highways—who are all based in Ranchi.
Table A2.2: Roads in Jharkhand Length Allocation of Ownership and Responsibility of No. Class of Road (km) Development and Maintenance 1. National Highways 1,844 Government of India through Ministry of Shipping, Road Transport and Highways. Works are executed by NHAI and RCD. 2. State Highways 1,886 State Government. Works are executed by RCD. Some financial assistance is available out of Central Road Fund. 3. Major District 4,155 State Government. Works are executed by RCD. Some Roads financial assistance is available out of Central Road Fund. 4. Other District 6,323 State Government. Works are executed by the Rural Roads and Village Engineering Organization of the state government. Roads Substantial financial assistance is available out of Central Road Fund under PMGSY. Total length 14,208 NHAI = National Highways Authority of India, PMGSY = Pradhan Mantri Gram Sadak Yojana (Prime Minister's Rural Roads Program), RCD = Road Construction Department. Sources: Government of India, Ministry of Shipping, Road Transport and Highways; State Government of Jharkhand, Road Construction Department. 2008.
12. The chief engineers are supported by superintending engineers, who oversee “circles”, under which there are divisions headed by executive engineers. Executive engineers are the basic operations units and are responsible for management of works including contracts and payment for works. In every division, subdivisions are headed by assistant engineers who manage and supervise works within their subdivision. This involves design and contract management including quality control and testing. Assistant engineers are required to check the quality and quantity of works. Under every subdivision are sections headed by junior engineers who are the basic field functionaries and responsible for managing actual construction activity in the field, taking measurements, giving day-to-day guidance, and reporting to the assistant engineer. The overall staff strength of RCD includes, in addition to the engineer-in-chief and the three chief engineers, 16 superintending engineers, 43 executive engineers, 255 assistant engineers and approximately 800 junior engineers. These are sanctioned positions and actual staffing levels are lower.
13. The chief engineer (communication) is responsible for all state highways and major district roads, under five circles and 23 divisions across the state. In addition, a superintending engineer (mechanical) based in Ranchi is responsible for rollers, hot-mix plants, and other departmental equipment, which was reserved for use on departmental works. However, the department currently does not carry out its own works, and contractors are supposed to mobilize their own equipment, meaning this wing is now defunct. The chief engineer (national highways) is supported by two superintending engineers, one each at Ranchi and Dhanbad. These superintending engineers in turn supervise seven divisions across the state.
14. The central design organization prepares, checks, and clears the design of roads and bridges under the state's responsibility and has been outsourcing the detailed project report
Appendix 2 25
preparation to consultants since 2002. The original reports for the Govindpur–Sahebganj road were also prepared by consultants.
3. Road Expenditures
15. The budget allocation for both the plan (capital expenditure) and non-plan (recurrent expenditure) budget has increased steadily.6 The budget allocation for RCD increased by a factor of 2.5 from FY2003 to FY2007, while the budget expenditure increased by only a factor of 1.8. Much of the underspending comes under the plan budget.7 Compared to the historically low spending ratio under plan budget, the maintenance budget is better utilized (about 85% of the budget allocation for FY2007 was used). Table A2.3 summarizes the plan and non-plan budget allocations and expenditures.
Table A2.3: Road Construction Department Budget Allocation and Expenditure (Rs million) Item FY2003 FY2004 FY2005 FY2006 FY2007 Budget Allocation Plan 1,950.0 2,600.0 3,000.0 5,240.0 5,469.6 Non-plan 1,108.5 1,380.6 1,929.6 1,970.3 2,300.1 Wages and Salaries 688.5 880.6 1,189.6 1,230.3 1,120.9 Maintenance of 420.0 500.0 740.0 740.0 1,179.2 Roads and Bridges Total 3,058.5 3,980.6 4,929.6 7,210.3 7,769.7 Expenditure Plan 1,680.0 2,210.0 2,370.0 1,452.1 3,005.1 Non-plan 1,101.7 1,078.6 1,715.7 1,801.1 2,015.2 Wages and Salaries 688.4 689.0 1,064.1 1,226.3 989.5 Maintenance of 413.3 389.6 651.6 574.8 1,025.7 Roads and Bridges Total 2,781.7 3,288.6 4,085.7 3,253.2 5,020.3 Source: State Government of Jharkhand.
D. Jharkhand Road Sector—Issues and Government Approach
16. The constraints identified in the 11th FYP self-assessment are also present in Jharkhand and are much more pronounced. However, Jharkhand's state road sector has several unique features that would necessitate adjustments to the approach adopted by ADB in designing interventions in other states.
1. Underdeveloped Road Network
17. Except for West Bengal, the states receiving ADB financial assistance for the state road sector are those which were divided in 2000: Madhya Pradesh and Chhattisgarh were created from the former Madhya Pradesh; Uttarakhand (formerly Uttaranchal) occupies the hilly portion of the former Uttar Pradesh; and the present-day Bihar occupies the plain areas of the former undivided Bihar (Jharkhand was created by dividing Bihar). Of these five bifurcated states,
6 Recurrent expenditure includes expenditure for road maintenance and wages and salaries. 7 A preliminary figure from FY2008 shows a significant improvement, with 94% of the allocated plan budget utilized.
26 Appendix 2
Uttarakhand is a hill state, and its road network differs from those of the four flatter plain states. Comparison of the four plain states reveals stark differences between the road network in Jharkhand and the other three states.
18. Jharkhand’s road network is much smaller and less dense than those of the other three plain states. In 2002, the overall road length was less than one-third that of Chhattisgarh, which had a smaller population, and an area not more than double that of Jharkhand. The total length of surfaced roads was approximately one-tenth that of Chhattisgarh. In terms of the size and quality of the road network, Jharkhand was severely underdeveloped. Since it was formed in 2000, Jharkhand has not implemented any major road investments that alter the nature of its road network. Considering the relative progress made in the other three states, Jharkhand's present standing among these states may have slipped even further since 2002. 8
Table A2.4: Comparison of Road Network in ADB-Financed States Item Madhya Pradesh Chhattisgarh Bihar Jharkhand Population (2001 census) 60,348,023 20,833,803 82,998,509 26,945,829 Land Area (km2) 308,252 135,237 94,164 79,714 Road Length (km, in 2002) 160,968 35,372 76,065 11,486 Of which sealed (km, in 2002) 78,191 24,476 32,858 2,840 Sealed Road Density (km/km2) 0.254 0.181 0.348 0.036 Source: Road Lengths from Ministry of Shipping, Road Transport and Highways.
19. A 2002 RCD study (Road Infrastructure in Jharkhand—Vision 2010) identified five major corridors for focused investment, including the Govindpur–Sahebganj road, which is proposed for improvement under the Project. To expand the state's road network, four stretches of road totaling 554 km were newly declared as national highways, increasing the national highway length in Jharkhand to 1,844 km. These attempts have not yet resulted in any visible improvement to the state's road network, however. RCD expects that the proposed Project will become a breakthrough for sustained improvement of its road network.
2. Smaller Organization
20. Jharkhand’s RCD has a much smaller staff than the Bihar RCD, with just 43 sanctioned executive engineer positions, compared to 378 in Bihar. The Jharkhand RCD is responsible for 6,900 km of road, and the Bihar RCD for 14,000 km, meaning the staff strength of Jharkhand RCD is not proportional to its responsibility.
21. Staff costs in Jharkhand RCD accounted for 20.5% of the RCD budget allocation in FY2007 (a decrease from 24.7% in FY2003). During this period staff costs increased by 1.4 times, while works executed by Jharkhand RCD doubled. RCD suffers less from the financial burden posed by the staff costs, which often divert non-plan resources away from road maintenance in other public works departments.
3. Road Construction Department Receptive to New Ideas
22. RCD has been outsourcing construction works, in part because of its small staff size. It also outsources detailed project report preparation and supervision of larger construction works. RCD has also initiated several reforms, based on lessons from other states in India. The Jharkhand Highway Act was enacted in 2006 and provides a legal framework for overall
8 For consistency and ease of comparison, the data on road lengths was obtained from the website of the Ministry of Road Transport and Highways (http://morth.nic.in/index2.asp?sublinkid=376&langid=2).
Appendix 2 27
highway corridor management by GOJH, and future establishment of a highway authority. Rules under the act came into force in 2007. RCD has drafted its own public works department code to replace the public works department code of Bihar that is currently in use. RCD also entered into a project development agreement with Infrastructure Leasing & Financial Services to identify highway schemes and projects that could be undertaken under public–private partnership options. A special purpose vehicle has been formed for this purpose.
23. RCD established a dedicated project implementation cell well in advance of the start of loan processing, and has increased its staff size. The required organizational setup for project implementation is in place, including the high-level project coordination committee (chaired by the chief secretary) and district-level task forces comprising district-level officers from all the concerned state departments. These are functional and helping RCD meet the readiness requirements listed in the checklist developed by the Government’s Ministry of Finance.
E. Jharkhand Road Sector—ADB Approach
24. ADB's past assistance in India's state road subsector was designed to improve the physical condition of road infrastructure while introducing various reforms to state-level road administration. The results are mixed, as ADB’s 2007 sector assistance program evaluation (SAPE) points out.9 One of the SAPE's key recommendations was to take into account local variations in implementation capabilities and make better use of past experience to improve the design of future projects. In this regard, review of the two loans provided in 2002–2003 to the newly bifurcated states is useful.
25. The recently completed Madhya Pradesh State Roads Sector Development Program was generally seen as a successful intervention.10 Under the program loan, Madhya Pradesh Road Development Corporation was created out of the Public Works Department with a lean organizational structure and many features of a modern organization for road infrastructure management. Under the Chhattisgarh State Roads Development Sector Project, similar institutional changes were attempted but the envisaged creation of a dedicated road authority has not taken place.11 The policy action plan for institutional reform is being restructured to address the changed scenario under which a special purpose vehicle was created in 2007 that can function as a dedicated road authority.
26. In the case of Jharkhand, policy decisions and enabling legislation for efficient development and management of road infrastructure and greater private sector participation are already in place. However, other factors—notably the frequent changes in the state's government12—have not encouraged or been conducive to the commencement of major road sector projects with private sector participation. NHAI invited tenders for the Ranchi–Barhi road (one of the state’s highest traffic corridors) three times on a build–operate–transfer basis with no response from the private sector. How the recently formed special purpose vehicle will interest the private sector remains to be seen.
9 ADB. 2007. Sector Assistance Program Evaluation, Transport Sector in India—Focusing on Results. Manila. 10 ADB. 2002. Report and Recommendation of the President to the Board of Directors on Proposed Loans and Technical Assistance Grant to India for the Madhya Pradesh State Roads Sector Development Program. Manila (Loan 1958/1959-IND). 11 ADB. 2003. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to India for the Chhattisgarh State Roads Development Sector Project. Manila (Loan 2050-IND). 12 In the 8 years since it was created, six governments have been formed in Jharkhand.
28 Appendix 2
27. The Project is carefully designed to address the constraints identified in the 11th FYP. Jharkhand will focus external financing resources on the highest-priority corridor under its jurisdiction, with (i) advance actions taken with respect to all preconstruction activities, (ii) large civil works contract packages to attract qualified contractors, and (iii) a project implementation organization created exclusively for the Project.
28. ADB provided project preparatory technical assistance13 to RCD and helped design the Project, which has a simple design and clear decision-making requirements for ADB loan processing. By strictly adhering to these requirements, all the necessary institutional changes are expected to be in place before the start of the Project. This will allow RCD to focus its scarce human resources on discharging its responsibility as the “employer” of the FIDIC-based civil works contracts, to effectively deliver the Project outputs and outcome.
13 Project preparatory technical assistance for State Roads Projects in Chhattisgarh and Jharkhand, processed in 2007 as a component technical assistance under ADB. 2006. Technical Assistance Cluster to India for Project Processing and Capacity Development. Manila (TA 4814-IND, financed by the Government of the United Kingdom).
Appendix 3 29
EXTERNAL ASSISTANCE TO THE ROAD SECTOR
Table A3.1: ADB Technical Assistance
Amount No. Project Name Type ($’000) Date Approved 0955 Road Improvement PP 75 24 Feb 1988 1058 Pavement Management A&O 490 3 Jan 1989 1059 Expressway System Planning A&O 260 3 Jan 1989 1164 Second Road PP 100 9 Jun 1999 1325 Vadodara–Bombay Expressway PP 600 15 Jun 1990 1402 Pavement Management for National Highways A&O 760 30 Oct 1990 1403 Private Sector Participation in Expressway Financing, A&O 500 30 Oct 1990 Construction and Operation 1404 Road Construction Industry A&O 340 30 Oct 1990 1325 Vadodara–Bombay Expressway (Supplementary) PP 250 19 Mar 1991 1678 Third Road PP 250 26 Mar 1992 1942 Faridabad–Noida–Ghaziabad Expressway PP 550 27 Aug 1993 1951 Bombay–Vadodara Expressway TA Project Environmental PP 90 10 Sep 1993 Impact Assessment 2001 Road Safety A&O 210 29 Nov 1993 2002 Environmental Management of Road Projects A&O 240 29 Nov 1993 2003 Technical Standards of Highway Concrete Structures A&O 350 29 Nov 1993 2986 Western Transport Corridor─Facilitating Private Participation PP 1,000 9 Feb 1998 3142 North–South Corridor Development in West Bengal PP 1,000 23 Dec 1998 3361 Capacity Building for Contract Supervision and Management in A&O 600 22 Dec 1999 the National Highways Authority of India 3365 Capacity Building for Social Development A&O 800 23 Dec 1999 3445 Establishing a Public–Private Joint Venture for the West A&O 150 25 May 2000 Bengal North–South Economic Corridor Development 3538 Preliminary Engineering for the West Bengal Corridor PP 150 13 Nov 2000 Development 3539 Resettlement and Environmental Assessment for the West PP 150 13 Nov 2000 Bengal Corridor Development 3540 Economic and Poverty Analysis for the West Bengal Corridor PP 150 13 Nov 2000 Development Project 3724 Enhancing the Corporate Finance Capability of National A&O 700 20 Sep 2001 Highways Authority of India 3751 Madhya Pradesh State Road Sector Development PP 600 29 Oct 2001 3752 National Highway Corridor and Public–Private Partnership PP 700 29 Oct 2001 3845 Madhya Pradesh State Road Development PP 1,000 14 Mar 2002 3914 Economic Studies for the Rural Roads Sector Development PP 150 3 Sep 2002 3915 Engineering Studies for the Rural Roads Sector Development PP 150 3 Sep 2002 3916 Environmental Analysis for the Rural Roads Sector PP 100 3 Sep 2002 Development 3917 Institutional and Policy Development Studies for the Rural PP 150 3 Sep 2002 Roads Sector Development 3918 Social Analysis for the Rural Roads Sector Development PP 150 3 Sep 2002 3995 Chhattisgarh State Roads Sector Development PP 800 21 Nov 2002 4013 Institutional Strengthening and Capacity Building for Madhya A&O 1,500 5 Dec 2002 Pradesh State Road Sector 4036 National Highway Corridor (Sector) PP 500 16 Dec 2002 4152 National Highway Sector II PP 300 21 Jul 2003 4220 Rural Roads Sector II PP 1,000 20 Nov 2003 4271 Development of High-Density Corridors under the Public– A&O 700 18 Dec 2003 Private Partnership 4355 High Priority National Highways PP 1,000 8 Jul 2004 4378 Northeastern State Roads PP 800 23 Aug 2004 4013 Institutional Strengthening and Capacity Building for Madhya A&O 600 29 Apr 2005 Pradesh State Road Sector (Supplementary) 4697 Development of Road Agencies in the North Eastern States AD 900 23 Nov 2005
30 Appendix 3
Amount No. Project Name Type ($’000) Date Approved 4814 TA Cluster for Project Processing and Capacity Development 15,000 30 Jun 2006 4934 Institutional Strengthening of Madhya Pradesh Public Works AD 1,000 31 May 2007 Department 7048 Jammu and Kashmir State Roads Investment Program PP 1,000 17 Dec 2007 3995 Chhattisgarh State Roads Sector Development PP 990 26 Jun 2008 7130 Institutional Strengthening of the Bihar Road Sector AD 1,000 18 Sep 2008 7134 Preparing and Enhancing Readiness of Proposed North PP 800 23 Sep 2008 Eastern State Roads Investment Program 7198 Bihar State Highways II PP 700 10 Dec 2008 7207 Dedicated Freight Corridor PP 1,500 10 Dec 2008 7237 Rural Roads Sector III PP 1,000 20 Feb 2009 7252 Capacity Development to Enhance Project Readiness and CD 1,500 18 Mar 2009 Results Monitoring for Transport Projects 7324 Karnataka State Highway Network Improvement Strategy AD 1,500 3 Aug 2009 AD = Advisory, A&O = advisory and operational, CD = Capacity Building, PP = project preparatory. Source: Asian Development Bank.
Table A3.2: ADB Loans from Ordinary Capital Resources
Amount No. Project Name ($ million) Date Approved 0918 Road Improvement 198 10 Nov 1988 1041 Second Road 250 30 Oct 1990 1274 National Highways 245 29 Nov 1993 1747 Surat–Manor Tollway 180 27 July 2000 1839 Western Transport Corridor 240 20 Sep 2001 1870 West Bengal Corridor Development 210 11 Dec 2001 1944 East–West Corridor 320 26 Nov 2002 1958 Madhya Pradesh State Roads Sector Development (Program Loan) 30 5 Dec 2002 1959 Madhya Pradesh State Roads Sector Development (Project Loan) 150 5 Dec 2002 2018 Rural Roads Sector I 400 20 Nov 2003 2029 National Highway Corridor (Sector) I 400 4 Dec 2003 2050 Chhattisgarh State Roads Development Sector 180 15 Dec 2003 2154 National Highway Sector II 400 21 Dec 2004 MFF Rural Roads Sector II Investment Program 750 20 Dec 2005 2248 MFF: Rural Roads Sector II Investment Program—Project 1 180 31 Jul 2006 MFF Uttarakhand State Road Investment Program 550 18 Dec 2006 2308 MFF: Uttarakhand State Road Investment Program—Project 1 50 2 Jan 2007 2330 Madhya Pradesh State Roads Sector II 320 31 May 2007 2414 MFF: Rural Roads Sector II Investment Program—Project 2 77.65 17 Mar 2008 2443 Bihar State Highways 420 18 Sep 2008 2445 MFF: Rural Roads Sector II Investment Program—Project 3 130 26 Sep 2008 2458 MFF: Uttarakhand State Road Investment Program—Project 2 140 22 Oct 2008 2527 National Highway Corridor (Sector I)—Supplementary Loan 100 30 Jun 2009 2535 MFF: Rural Roads Sector II Investment Program—Project 4 185 7 Aug 2009 MFF = multitranche financing facility. Source: Asian Development Bank.
Table A3.3: Other Funding Sources—Japan International Cooperation Agency Project Loan Amount Equivalent Region/State Project Name Length (km) (¥ million) ($ million) Uttar Pradesh Mathura–Agra 51 4,855 43.3 Uttar Pradesh Allahabad–Naini Bridge 5 10,037 89.6 Andhra Pradesh Chilakaluripet–Vijayawada 83 11,360 101.4 Orissa Jagatput–Chandikhol 33 5,836 52.1 Uttar Pradesh Ghaziabad–Hapur 33 4,827 43.0 Andra Pradesh, Hyderabad Hyderabad Outer Ring Road metropolitan area (Phase 2) 33 42,047 436.03 Source: Japan International Cooperation Agency.
Appendix 3 31
Table A3.4: Other Funding Sources—World Bank Group
Amount ($ million) Date Location Project Name IBRD IDA Approved Countrywide Roads 72.11 1 Jun 1961 Bihar Bihar Rural Roads 35.00 1 Nov 1980 Countrywide National Highway 200.00 1 May 1985 Gujarat Gujarat Rural Roads 119.60 1 Feb 1987 Countrywide State Roads 80.00 1 Oct 1988 Countrywide State Roads 170.00 1 Oct 1988 Countrywide Second National Highways 153.00 1 May 1992 Countrywide Second National Highways 153.00 1 May 1992 Countrywide State Road Infrastructure Development 51.50 1 Dec 1996 Technical Assistance Andhra Pradesh State Highways 350.00 1 Jun 1997 Countrywide Third National Highways 516.00 12 May 2000 Countrywide Gujarat State Highways 381.00 15 Sep 2000 Countrywide Grand Trunk Road Development 589.00 21 Jun 2001 Karnataka Karnataka State Highways Improvement 360.00 24 May 2001 Kerala Kerala State Transport 255.00 14 Mar 2002 Mizoram Mizoram State Roads 60.00 14 Mar 2002 Uttar Pradesh Uttar Pradesh State Roads 488.00 19 Dec 2002 Tamil Nadu Tamil Nadu Road Sector 348.00 17 Jun 2003 Himachal Pradesh, Jharkhand, Rural Roads 99.50 300.00 23 Sep 2004 Rajasthan, Uttar Pradesh Uttar Pradesh, Bihar Lucknow–Muzaffarpur National Highway 465.00 21 Dec 2004 Punjab Punjab State Roads Project 250.00 5 Dec 2006 Mizoram Mizoram Roads—Additional Financing 18.00 22 May 2007 Himachal Pradesh Himachal Pradesh State Roads Project 220.00 5 Jun 2007 Orissa India Orissa State Roads Project 250.00 30 Sep 2008 Andhra Pradesh Andhra Pradesh Road Sector Project 320.00 19 Sep 2009 IBRD = International Bank for Reconstruction and Development, IDA = International Development Association. Source: World Bank.
32 Appendix 4
PROJECT ROADS AND SUMMARY OF DESIGN STANDARDS
Table A4: Project Roads and Current Conditions Carriageway Number of Shoulder Pavement Package Section Length (km) Width (m) Lanes width (m) Condition 1 Govindpur–Jamtara 80.7 Govindpur–Jamtara 69.7 3 1 1.5 Very poor Jamtara Bypass 11.0 New Construction 2 Jamtara–Dumka Jamtara–Bagdaha More 20.6 7 2 1.5 Fair Bagdaha More–Dumka 54.9 3 1 1.5 Very poor Dumka Bypass 6.5 New Construction 3 Dumka–Barhet 98.1 Dumka–Amrapara 48.0 6.5/3.5 2/1 2 Fair Amrapara–Littipara 23.0 6.5/3.5 2/1 2 Poor Littipara–Barhet 27.1 3 1 1.5 Very poor 4 Barhet–Sahebganj 49.9 Barhet–Borio 20.0 3 1 1.5 Very poor Borio–Sahebganj 29.9 3 1 2 Very poor Total 310.7 Source: Road Construction Department, State Government of Jharkhand.
The original detailed project reports for these roads were prepared in 2002–2003. The design standards and general design considerations adopted were as follows:
Geometric design standards adopted were as per Indian Road Congress 73-1980 for rolling and mountainous terrain as applicable to state highways. The following other parameters were also used:
(i) Road classification State highway (ii) Lane Width (m) 2 x 3.5 asphalt concrete surface (iii) Shoulder Width (m) 2 x 2.5 earthen (paved in built-up area) (iv) Ruling design speed 100/80 km/h (v) Minimum design 80/65 km/h (with 50 km/h in some areas) speed (vi) Absolute minimum 40 km/h (except that 20 km/h was retained in some design speed areas where realignment was severely constrained by dense development and/or steep gradients) (vii) Right of way width for 30 m minimum in general but 45 m in bypass areas and future provision on sections of major realignment (where development is not presently a constraint) (viii) Ruling Gradient 3.3/6.0% (rolling/mountainous terrain) (ix) Limiting Gradient 5.0/7.0% (rolling/mountainous terrain) (x) Exceptional Gradient 6.7/8.0% (rolling/mountainous terrain)
All works are to be in compliance with the relevant Indian Road Congress/ Ministry of Road Transport and Highways structural guidelines. Seismic design code changes since 2002–2003 have been incorporated for better disaster preparedness.
DETAILED COST ESTIMATES AND FINANCING PLAN ($ million) b Item Amounts ADB Financing Government Financing ADB Financing (%) Cost Share (%) A Base Costa 1 Right of Way 18.06 0.00 18.06 0.00 7.5 a. Resettlement and Rehabilitation and Utility Shifting 17.91 0.00 17.91 0.0 7.5 b. Environmental Mitigation 0.15 0.00 0.15 0.0 0.1
2 Govindpur-Jamtara- Dumka - Sahebganj Road 171.63 171.63 0.00 100.0 71.5 a. Govindpur-Jamtara (Package I) 46.75 46.75 0.00 100.0 19.5 b. Jamtara-Dumka (Package II) 46.77 46.77 0.00 100.0 19.5 c. Dumka-Barhet (Package III) 51.44 51.44 0.00 100.0 21.4 d. Barhet-Sahebganj (Package IV) 26.67 26.67 0.00 100.0 11.1
3 Capacity Development and Investment Program Management 8.57 6.85 1.72 80.0 3.6 a. Investment program management i. Consulting Services 6.00 6.00 0.00 100.0 2.5 ii. Project administartion 1.72 0.00 1.72 0.0 0.7 b. Equipment 0.85 0.85 0.00 100.0 0.4
Subtotal A 198.26 178.48 19.78 90.0 82.6
c B Contingencies 30.05 21.52 8.53 71.6 12.5
C Financing Charges During Implementationd 11.70 0.00 11.70 0.0 4.9
Total (A+B+C) 240.01 200.00 40.01 83.3 100.0
a Mid-2008 costs 5 Appendix b Includes taxes and duties estimated at $21 million c Physical contingencies computed at 8% for base cost components. Price contingencies computed at 2.5% for foreign exchanges and cost5% for local currency costs. d Includes (i) interest during construction computed at the 5-year forward London interbank offered rate (LIBOR) plus a spread 0.20%, of and (ii) commitment charges at 0.15% per annum on the unwithdrawn amount of the loan. Sources: Road Construction Department, State Government of Jharkhand and Asian Development Bank estimates 33
34
ORGANIZATIONAL STRUCTURE FOR PROJECT IMPLEMENTATION Appendix 6
High-Level Project Secretary, RCD, GOJH Asian Development Coordination Committee Bank (Chaired by Chief Secretary, GOJH) Engineer-in-Chief, RCD, GOJH
Project Implementation Cell (ADB Projects), RCD, GOJH Director Construction Supervision Consultant
Land Acquisition Joint Director Executive (management team Officer-cum-Grievance Engineer in Ranchi, and four Redressal and (Drawing and field offices, one for Information Officer Disbursing each civil works Officer, PIC) contract package)
Deputy Director-cum- Coordinating Officer Senior Finance Internal Auditora and Accounts Officer
Assistant Director Assistant Director Civil Works (Procurement) (Environment) Contractors
Finance Accounts Assistanta (four ICB contract Assistant/Cashier packages) Assistant Directors, Civil Works Packages 1-4a (based in field PIUs)
GOJH = state government of Jharkhand; ICB: international competitive bidding; PIC: project implementation cell; PIU: project implementation unit; RCD: Road Construction Department. a To be appointed. The rest of PIC staff is already appointed. Source: Road Construction Department, State Government of Jharkhand
Appendix 7 35
2014 2013 2012 2011 2010
2009 IMPLEMENTATION SCHEDULE SCHEDULE IMPLEMENTATION 2008 1234123412341234123412341234 ect implementation cell; TAtechnical = assistance. Item Project Preparatory Technical Assistance Technical Preparatory Project Pre-Construction Activities Construction Supervision Consultant Consultant Construction Supervision Civil Works (Packages I-III) Civil Works (PackageIV) Assistance Technical Building Capacity Administrative Approval by the (on 24 State December by 2008) Approval Administrative Strengthening Institutional PIC of Financial Management System Development Resettlement and Land Acquisition Clearance Forest 2009) 24 August (on Clearance Environmental Shifting Utiilty Works Civil Procurement (CSC) Consultant Supervision ofConstruction Recruitment Provision Service CSC Mobilization Contractor Construction Period Notification Defects Mobilization Contractor Construction Period Notification Defects Enhancement TA (under Readiness 7252-IND) Cluster) TA (under Strengthening Institutional Sources: Road Construction Department, State Governme nt of Jharkhand and Asian Development Bank estimates. CSC = construction supervision consultant; PIC = proj 36 Appendix 8
PROCUREMENT PLAN Basic Data Project Name: Proposed Jharkhand State Roads Project Country: India Executing Agency: Road Construction Department, Government of Jharkhand Loan Amount: $200 million Loan (Grant) Number: 40005 Date of First Procurement Plan: 28 July 2008 Date of this Procurement Plan: 27 October 2009
A. Process Thresholds, Review and 18-Month Procurement Plan
1. Project Procurement Thresholds
1. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works.
Procurement of Goods and Works Method Threshold
International Competitive Bidding (ICB) for Works $10,000,000 and above Shopping for Goods Below $100,000
2. ADB Prior or Post Review
2. Except as ADB may otherwise agree, the following prior or post review requirements apply to the various procurement and consultant recruitment methods used for the project.
Procurement Method Prior or Post Comments Procurement of Goods and Works ICB Works Prior Shopping for Goods Prior
Recruitment of Consulting Firms Quality- and Cost-Based Selection (QCBS) Prior
3. Goods and Works Contracts Estimated to Cost More Than $1 Million
3. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.
General Contract Procurement Prequalification Advertisement Description Value Method of Bidders (y/n) Date (quarter/year) Comments Civil Works $30–60 ICB No Q2 2009 ADB's single- (4 packages) million stage two- envelope procedure
4. Consulting Services Contracts Estimated to Cost More Than $100,000
4. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.
Appendix 8 37
Advertisement International or General Contract Recruitment Date National Description Value Method1 (quarter/year) Assignment Comments Construction $6.5 million QCBS with Q2 2009 International Supervision 80:20 quality– Consultant cost ratio
B. Indicative List of Packages Required Under the Project
5. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project. Contracts financed by the Borrower and others should also be indicated, with an appropriate notation in the comments section.
Estimated Domestic General Estimated Value Number of Procurement Preference Description (cumulative) Contracts Method Applicable Comments
Goods $0.82 million 10 Shopping No
Works $165 million 4 ICB Not applicable
Estimated General Estimated Value Number of Recruitment Description (cumulative) Contracts Method Type of Proposal Comments
Consulting $6.5 million 1 QCBS with Full technical Services 80:20 quality– proposal cost ratio
38 Appendix 9
SUMMARY POVERTY REDUCTION AND SOCIAL STRATEGY Country/Project Title: India: Jharkhand State Roads Project Lending/Financing Department/ South Asia Department Project Loan Modality: Division: Transport and Communications Division I. POVERTY ANALYSIS AND STRATEGY A. Linkages to the National Poverty Reduction Strategy and Country Partnership Strategy
Between 2002 and 2006, India’s gross domestic product (GDP) grew by an average of 8.6% (based on 1999 constant prices). Transportation and communication (including trade), agriculture, and manufacturing were particularly strong, with transportation, communication, and trade combined accounting for the highest share of the country’s GDP (25.6%). This performance is largely responsible for the country’s impressive economic growth, and for reducing poverty. Gains from economic growth have yet to be distributed equitably in some poor areas, however, including in the state of Jharkhand. In December 2008, the Asian Development Bank (ADB) approved the 2009 country operations business plan,a under which support for infrastructure development to promote inclusive growth will remain the core focus of ADB’s India assistance strategy. The Jharkhand State Roads Project, which aims to improve transport connectivity within the state, will be the first support by ADB for Jharkhand’s roads. The Project will augment transport capacity in a financially sustainable manner. Jharkhand is one of the least-developed states in India, and the Project is expected to have significant development impacts. Its short-term impacts on poverty reduction include employment of poor people in road construction and ensuing maintenance works. These opportunities will directly increase earnings, especially for those who are largely dependent on occasional and uncertain employment. Over the long term, the Project is expected to have a significant development impact—e.g., through expanded economic activities due to improvement of access to markets and other economic centers, and improved health and education caused by improved access to health and educational facilities—and thereby contribute to poverty reduction.
B. Poverty Analysis Targeting Classification: General Intervention 1. Key Issues
The state of Jharkhand (India’s 28th state) was created in November 2000 from the southern portion of the former undivided state of Bihar. It is bounded by five states: the (now smaller) state of Bihar to the north, West Bengal to the east, Orissa to the south and Chhattisgarh and Uttar Pradesh to the west. Jharkhand covers an area of 79,714 square kilometers, with 22 districts, 32,616 revenue villages and a population of 27 million (according to the 2001 census). A socioeconomic survey covering 20% of the affected population (1,243 household were interviewed) was conducted in August 2007, as well as community consultations and a focus group discussion. In addition, poverty analysis using primary and secondary data, and a review of government programs and schemes were conducted. The data revealed that Jharkhand has one of the highest levels of poverty in India, with a sharp contrast between rural and urban poverty. The poverty incidence in Jharkhand is 44%, compared with 26% for India as a whole. Although Jharkhand has extensive natural resources (mainly minerals and forests), the majority of its population (80%) resides in rural areas and remains largely dependant on agriculture and allied activities for their livelihoods. Agricultural activities are usually undertaken during the monsoon period, as this provides the only source of irrigation for most agricultural land. By rehabilitating the Govindpur–Sahebganj road, the Project will connect regional communities to the district and commercial centers. Some of the immediate benefits will be improved access to socioeconomic facilities, safe and comfortable journeys with reduced fuel consumption and vehicle operating costs, and development of the rural economy. II. SOCIAL ANALYSIS AND STRATEGY A. Findings of Social Analysis
The August 2007 socioeconomic survey revealed that only 1.45% of interviewed households reported agriculture as their main source of livelihood. Most (80%) reported having more than one livelihood, for example combining agriculture with nonagricultural labor and business or trade. The average landholding is small (1–2 acres or 0.4–0.8 hectares), necessitating multiple livelihoods to supplement the basic income and harvests generated through subsistence agriculture. The households interviewed felt that road improvements would lead to more frequent and more reliable bus services, thereby considerably reducing travel costs and times. Households engaged in wage labor viewed improved mobility as providing the opportunity to obtain better-paying jobs outside their villages. Labor opportunities in the Project’s road construction work were seen as additional immediate project benefits for wage laborers.
Appendix 9 39
B. Consultation and Participation 1. Provide a summary of the consultation and participation process during the project preparation.
Consultations and meetings with the project communities were organized during the course of the social analysis to ascertain their response to the construction of roads, their needs and demands from the Project, and any risks or concerns emerging from the Project. A total of 14 focus group discussions were organized during the course of the social assessment with local communities, and included men, women, farmers, indigenous people, Scheduled Castes, high-income groups, the poor, shopkeepers, truckers, etc., to ensure a comprehensive perspective was obtained on the Project and its impacts. Other key stakeholders, such as Panchayati Raj (local government) members (e.g., village head, village health workers, block development officers, health workers, and school teachers) were also consulted by means of key stakeholder discussions. In addition, consultations were also undertaken with the affected households and communities during the course of the resettlement census surveys undertaken for each of the Project’s four “packages”. Details of these consultations are provided in the respective resettlement plans.
2. What level of consultation and participation (C&P) is envisaged during the project implementation and monitoring? Information sharing Consultation Collaborative decision making Empowerment
3. Was a C&P plan prepared? Yes No
Information dissemination material such as brochures, pamphlets and posters detailing resettlement information including measurement of losses, detailed asset valuations, entitlements and special provisions, grievance procedures, timing of payments and displacement schedules will be printed for distribution to affected people. This will be carried out during implementation of resettlement plans by local nongovernment organizations.
C. Gender and Development Key Issues. During the social study a gender analysis was undertaken to assess the Project’s impact. Six focus group discussions were held with women belonging to different socioeconomic groups, such as scheduled tribes and castes. The discussions revealed that the women in the project area are engaged primarily in household chores and farming. The primary school enrollment ratio of males and females is about equal, but female enrollment decreases at higher education levels, with a sharp drop in female enrolment after middle school. One reason quoted for the drop in female enrolment was the lack of higher schools in and around villages, and the lack of access to higher education. Consequently, many households declined to send their girls to schools outside the village, because of concerns about security and the lack of mobility. It is also nearly impossible for many women to access health facilities at night and during the rainy season, jeopardizing the lives of both mother and child in emergencies during childbirth. Women said that the Project would considerably improve their access to better health care services outside their villages. They also voiced some concerns with regard to the safety of their children, as they were of the opinion that the widening and rehabilitating the road would increase the number of the vehicles, thereby increasing hazards for children, the elderly, and women.
2. Key Actions. Measures included in the design to promote gender equality and women’s empowerment—access to and use of relevant services, resources, assets, or opportunities and participation in decision-making process:
Gender plan Other actions/measures No action/measure
The Project will provide women with job opportunities and will offer men and women equal wages, particularly for work of equal value.
III. SOCIAL SAFEGUARD ISSUES AND OTHER SOCIAL RISKS Issue Significant/ Strategy to Address Issue Plan or Other Limited/ Measures Included No Impact in Design
Involuntary Significant A census of all affected persons was undertaken based Full Plan Resettlement on a detailed design that identifies all project-related Short Plan impacts. The survey found that the Project will impact the Resettlement assets (e.g., agricultural land, residential and commercial Framework assets, and trees) of 4,516 households Resettlement No Action plans have been prepared to mitigate and address all losses.
40 Appendix 9
Indigenous Limited Detailed social assessments were undertaken as part of Plan Peoples project preparation in order to assess any adverse impact Other Action on the tribal groups within the area of influence of the Indigenous project road. The results indicated the scheduled tribe/ Peoples indigenous households have similar characteristics to the Framework overall population and are largely assimilated into the No Action local communities. This can be attributed to the fact that the road to be improved under the Project has been in existence for many years, exposing both the scheduled tribes and non-scheduled-tribe households to the outside world. Consequently, the Project will not have any adverse or differential impacts on customary, tribal, social, cultural, economic or political behaviors or institutions, and indigenous peoples will benefit equally from the socioeconomic opportunities created by the Project.
The adverse impact of the Project on the scheduled tribes will be due to land acquisition. In most cases the impact would be on unirrigated agriculture land (generally 1%–5% of total household landholdings); in some cases the impact will be on structures. Adequate provisions have been incorporated into the entitlement matrix of the resettlement plans to mitigate and compensate for these impacts.
Labor No Impact Project construction is expected to generate employment Employment opportunities for local communities during the Plan opportunities construction phase. The Road Construction Department Other Action Labor (RCD), supported by the construction supervision No Action retrenchment consultant, will ensure that all civil works comply with all Core labor applicable labor laws, including equal pay for equal work standards and the effective abolition of child labor.
Affordability No Impact Road rehabilitation will reduce transport costs and Action increase the mobility of the local population in the project No Action areas. Other Risks Limited The social assessments undertaken have not identified Plan and/or any significant risks related to social issues such as Other Action Vulnerabilities gender, HIV/AIDS and human trafficking. However, RCD No Action HIV/AIDS will ensure that all civil works contractors disseminate Human information at worksites on the risks of sexually trafficking transmitted diseases and HIV/AIDS for those employed during construction. Contracts for all subprojects will Others(conflict, include specific clauses on these undertakings, and political RCD, supported by the construction supervision instability, etc), consultant, will strictly monitor compliance during project please specify implementation. IV. MONITORING AND EVALUATION
Are social indicators included in the design and monitoring framework to facilitate monitoring of social development activities and/or social impacts during project implementation? Yes No
Social indicators, such as the number of households below poverty line, and improved access of the rural poor to social services and markets, will be monitored as part of reporting requirements under the project performance monitoring system. a ADB. 2008. Country Operations Business Plan (2009): India. Manila.
Appendix 10 41
SUMMARY RESETTLEMENT PLAN
A. Project Background
1. The Jharkhand State Roads Project will upgrade 310.7 kilometers of existing roads in one of the state’s least developed areas. The state of Jharkhand, formerly part of southern Bihar, became India’s 28th state in November 2000. The Project, which will be the first ADB intervention in Jharkhand’s road sector, aims to improve transport connectivity within the state to facilitate balanced development and reduce regional socioeconomic disparities. Under the Project, the existing road will be widened and converted into a two-lane state highway.1 The Project has been subdivided into four packages, with the detailed design of all alignments completed for all packages. Resettlement plans for each of these packages have been prepared based on these detailed designs. The details of the four road sections are listed in Table A10.1. Table A10.1: Project Road Packages
Length Package No. Name Districts Covered (km) I Govindpur–Jamtara Dhanbad, Jamtara 69.7 Jamtara Bypass 11.0 II Jamtara–Dumka Jamtara, Dumka, 75.5 Dumka Bypass Deoghar 6.5 III Dumka–Barhet Sahebganj, Dumka, 98.1 Pakur IV Barhet–Sahebganj Sahebganj 49.9 km = kilometer Source: Road Construction Department, State Government of Jharkhand
B. Land Acquisition and Resettlement Impacts
2. To assess the Project’s resettlement impacts, a census survey based on detailed road designs was undertaken from January to August 2008. The census revealed that despite having made considerable efforts to minimize resettlement impacts, a total of 150 hectares of private land will need to be acquired.2 The resettlement census found that 4,515 households will incur impacts on the following assets: 4,143 agricultural plots, 1,489 residential structures, and 680 commercial or commercial-cum-residential structures. In 93% of all cases involving land, these impacts will affect less than 10% of the area of the plot. Over half (56%) of the impacts to structures will affect only boundary walls, gates and gardens, with little or no impacts on the main structures. These project impacts are presented in Table A10.2.
1 Jharkhand state highway technical specifications call for an average width of 30–40 meters. In the case of Jamtara and Dumka bypasses, technical specifications call for a total widening of up to 60 meters in some places. 2 To minimize resettlement impacts (i) community bypasses will be constructed in several village areas, (ii) the project has been designed to largely follow the existing road alignment outside of developed areas, (iii) “toe” retaining walls will be introduced in some areas of high fill construction, and (iv) traffic will be managed during construction. 42 Appendix 10
Table A10.2: Summary of Project Impacts
No. of Type of Losses by Category and Number of Affected Assets Affected No. of Agricul- Residen- Commer- Residential / Total Package House- Affected tural tial cial Commercial Landb No. holds Persons Plots Structures Structures Structures Othera (acres) I 835 7,345 578 315 87 89 0 86.25 II 1,235 8,272 1,328 426 38 91 5 99.78 III 1,588 10,025 1,695 420 109 96 30 120.12 IV 857 5,620 542 328 43 127 7 55.57 Total 4,515 31,262 4,143 1,489 277 403 42 370.67 a Other losses include assets such as temples, cattle sheds, and garages. b Total land affected includes agricultural, residential, commercial and residential-cum-commercial land. Source: Census Survey, Jharkhand State Roads Project, 2008.
C. Resettlement Policy and Legal Framework 3. In accordance with the Jharkhand resettlement and rehabilitation norms for the Project, and incorporating the ADB Involuntary Resettlement Policy (1995) and Operations Manual section on involuntary resettlement,3 all affected households will be entitled to a combination of compensation measures and resettlement assistance, depending on the nature of their ownership rights over the affected assets and the scope of the impact, including the social and economic vulnerability of the affected persons. In general terms, the affected persons in the project will be entitled to six types of compensation and assistance: (i) compensation for loss of land, trees, etc. at replacement value; (ii) compensation for structures (residential/commercial) and other immovable assets at replacement value; (iii) assistance for loss of business/wage income; (iv) assistance for shifting; (v) rebuilding and/or restoration of community resources/facilities; and (vi) special additional assistance for vulnerable households. 4. Based on the inventory of losses conducted during the resettlement census carried out in consultation with affected households, an entitlement matrix (Table A10.3) has been developed. The matrix provides the basic tools and guidelines for preparation of compensation and resettlement benefits. Compensation rates and assistances have been fixed in consultation with state and local officials and other stakeholders.
3 ADB. 2006. Involuntary Resettlement. Operations Manual. OM F2/BP. Manila (25 September).
Appendix 10 43
Table A10.3: Entitlement Matrix Identification of Affected Type of Loss Households Entitlement Details A: Loss of land
1. Loss of Owner/Titleholder/ Cash a) Replacement land as per the law or cash compensation agricultural land traditional land compensation at at replacement cost as determined according to the formula rightsa of the Replacement cost proposed in Jharkhand Resettlement and Rehabilitation affected plot Norms for ADB Project- 2009.b
b) Affected persons (APs) with traditional title/occupancy rights will also be eligible for full compensation for land, plus the difference or additional grant.
c) If the residual plot(s) is (are) not viable, i.e., the AP becomes a marginal farmer, any of the following three options are to be given to the AP, subject to his/her acceptance: (i) The AP remains on the plot, and the compensation and assistance paid to the tune of required amount of land to be acquired. (ii) Compensation and assistance are to be provided for the entire plot including residual part, if the owner of such land wishes that his/her residual plot should also be acquired by the EA, EA will acquire the residual plot and pay the compensation for it.
d) All fees, stamp duties, taxes and other charges, as applicable under the relevant laws, incurred in the relocation and rehabilitation process, are to be borne by the EA.
2. Loss of Owner/Titleholder/ Compensation at a) Replacement of land or cash compensation at homestead land traditional land replacement cost replacement cost as determined according to the formula (residential and rightsa of the proposed in Jharkhand Resettlement and Rehabilitation commercial land) affected plot Norms for ADB Project - 2009.b
b) All fees, stamp duties, taxes and other charges, as applicable under the relevant laws, incurred in the relocation and rehabilitation process, are to be borne by the EA.
B. Loss of Residential, Commercial and Other Structures 3. Loss of structure Titleholder of • Compensation a) AP will be provided replacement value of the residential (residential and affected structure at structure, which will be calculated as per the latest commercial replacement prevailing basic schedule of rates (BSR) without structures) cost depreciation. • Transfer grant • Rental b) Affected person shall be allowed to take salvaged assistance material from the demolished structure at no costs.
c) A lump sum transfer grant of an amount of Rs10,000 per household for shifting households’ assets and other belonging to the new area.
d) Rental assistance as per the prevalent rate in the form of grant of Rs10,000 to cover maximum three month rental accommodation.
44 Appendix 10
Identification of Affected Type of Loss Households Entitlement Details Tenants • Rental a) Rental assistance for both residential and commercial assistance tenants at the rate of Rs10,000 in the form of grant to cover • Transfer grant maximum three month rentals. • Compensation (in case b) A lump sum transfer grant of an amount of Rs10,000 per additional household for shifting households’ assets and other structure belonging to the new area. erected) c) Additional structures erected by tenants will also be compensated and deducted from owner’s compensation amount.
d) Any advance deposited by the tenants to the landlord will be deducted from landlord/owners total compensation package on submission of documentary evidences.
e) Right to salvage material from demolished structure and frontage etc, erected by tenants. C: Loss of crops and trees 4. Loss of crops • Land owners Compensation at a) Advance notice to APs to harvest crops/fruits and and trees • Sharecroppers ‘market value’ remove trees. • Leaseholders b) In case of standing crops, cash compensation for loss of agricultural crops at current market value of mature crops based on average production.
c) Compensation for loss of timber trees at current market value of wood/timber or firewood depending on the kind of tree to be computed with assistance from horticulture department.
d) In case of fruit trees, compensation at average fruit production for next 15 years to be computed with assistance from horticulture department. D. Losses of Non-Titleholders 5. Loss of structure Encroachers No compensation a) Encroachers will be notified and given one month time to (immovable assets for land but remove their assets. constructed by assistance for squatters and assets to b) Compensation for affected structures to the vulnerablec encroachers) vulnerable groups households at below poverty line (BPL) non title holder shall be provided replacement value of affected structure or equivalent financial assistance benefit provided under Indira Awash Yojna scheme.
c) Right to salvage material from demolished structure at no cost. Squatters and No compensation a) Squatters will be notified and given one month time to informal settlers for land but remove their assets. compensation for c structure at b) Compensation for affected structures to the vulnerable replacement cost households at below poverty line (BPL) non title holder and other shall be provided replacement value of affected structure or assistance equivalent financial assistance benefit provided under Indira Awash Yojna scheme. c) A lump sum transfer grant of an amount of Rs10,000 for shifting households’ assets and other belonging to the new area.
Appendix 10 45
Identification of Affected Type of Loss Households Entitlement Details
d) Right to salvage material from demolished structure at no cost. E. Loss of Livelihood Source 6. Loss of primary Titleholders losing Rehabilitation a) APs losing strip of land (insignificant) due to acquisition source of income income through Assistance for will be eligible to ex-gratia payment of Rs20,000. for the titleholders agriculture income restoration b) Transitional allowance equivalent 250 days of Minimum Agricultural Waged (MAW) in the state at the time of Section 4 notification under Jharkhand Land Acquisition Act. He shall also be entitled for National/State level job card under National Rural Employment Programme. Titleholders losing Transitional a) Monthly subsistence allowance equivalent to three income through assistance months of his average business income. business 7. Loss of primary Non-titleholders Training a) One-time financial assistance for transitional income source of income namely squatters and Assistance for support equivalent to one time payment unskilled labour for the non- vulnerable income restoration entitled for one time payment of 250 days payment as fixed titleholders [wage encroachers lo sing by Government under minimum wages act job card under earning employees, primary source of National/State Employment Guarantee Program. agricultural labour, income. non-agricultural Wage earning Transitional a) This is valid for persons indirectly affected due to the labour, squatters employees indirectly assistance employer having being displaced, one time payment of 200 and vulnerable affected due to days of minimum wagesd as fixed by the government. encroachers] displacement of commercial structure b) Employment opportunity in the road construction work if desired so by them. F. Loss of Common Property Resources 8. Loss of Common Affected Cash a) Cash compensation at replacement cost or Property Resources community/Institution compensation/ reconstruction of the community structure in consultation responsible reconstruction with the community. G. Support to Vulnerable Sections 9. Additional Households One time Lump a) Additional one-time lump sum assistance of Rs10,000 assistance to categorized as sum assistance per household to vulnerable households. This will be over vulnerable groups vulnerable (BPL and above the other assistance/s as per this framework. households, female- headed households, SC/STs, disabled/ elderly) H. Other Unanticipated Impacts 11. Any Any unanticipated consequence of the project will be documented and mitigated based on the spirit of the unanticipated principles agreed upon in this norms framework. adverse impact due to project intervention BPL = below poverty line; EA = executing agency. a Traditional land rights refer to households with customary rights to land and shall be treated in a manner equivalent to titleholders. b As per the Jharkhand Resettlement and Rehabilitation Norms for ADB Project – 2009, once the registration cost of similar type of land at the time of notification is derived, 50% of the registration cost (of similar type of land) will be added to this cost. In addition, the land shall be acquired after paying 30% solatium on the rates as fixed above but whenever the land owner agrees to give the land voluntarily in that case 60%solatium shall be paid. c Population groups considered socially “vulnerable” comprise (i) those below the poverty line; (ii) those who belong to scheduled castes and scheduled tribes; (iii) female-headed households; (iv) elderly; and (v) disabled persons. d The minimum wage rate in Jharkhand as per the March 2008 notification is Rs91 per day.
46 Appendix 10
D. Public Consultation and Disclosure of Information
5. Local stakeholders were consulted during the social and poverty assessment. Similarly, community consultations were conducted during preparation of the resettlement plans. Summaries of the resettlement plans will be translated into Hindi and Santhali and will be made available for review and comments by means of four package-level disclosure workshops prior to loan negotiations. Copies of the summary resettlement plans will also be made available at local-level public offices (such as revenue offices and gram panchayat). The final resettlement plan endorsed by the executing agency (EA) will also be disclosed on the RCD and ADB websites. Furthermore, experienced and well-qualified nongovernmental organizations (NGOs) or agencies will be engaged to assist the EA in the effective, timely and efficient implementation of the resettlement plans for each road package. The NGOs and/or agencies will act as facilitators and serve to link the project implementation cell (PIC) within RCD and the affected communities. The NGOs and/or agencies will inform the affected persons regarding project- related land acquisition resettlement and rehabilitation measures and ensure proper compensation and assistance are extended to the affected persons under the resettlement and rehabilitation entitlement package.
E. Implementation Arrangements and Grievance Redress 6. The Jharkhand RCD is the EA and will be responsible for overall strategic guidance, technical supervision, project execution, and ensuring compliance with loan covenants. The PIC will be established in Ranchi (the state capital), headed by a full-time director who reports to the RCD secretary. The PIC will ensure internal monitoring and report any changes in the project design. The resettlement plan will be updated if design changes are made that have resettlement impacts. The PIC will also ensure that resettlement budgets are delivered on time for resettlement plan implementation. A field-based district implementation cell, headed by an executive engineer and assisted by a dedicated resettlement and rehabilitation officer will be responsible for the day-to-day implementation of the resettlement plan. The district implementation cell will be assisted by local NGOs/resettlement and rehabilitation implementation agencies. 7. A grievance redress cell comprising the executive engineer, local NGO representative, community leaders (nonpolitical), and representatives of affected persons (including women and vulnerable groups) will be established at the district level to address and resolve community grievances. To facilitate interdepartmental coordination and ensure speedy resolution of grievances, a task force chaired by the district collector and comprising the district land acquisition officer, district forest officer, executive engineer, and additional district magistrate and relief officer has been constituted at each district.
F. Resettlement Budget and Financing 8. The cost of resettlement plan implementation (including all costs related to land acquisition, compensation, resettlement assistance, transport, monitoring and evaluation) is $17.09 million. The EA will make the required funds available to cover all compensation and resettlement and rehabilitation costs.
G. Implementation Schedule 9. The proposed resettlement and rehabilitation activities are divided into three broad categories—the project preparation phase, resettlement plan implementation phase, and monitoring and evaluation—based on the stages of work and implementation process. The
Appendix 10 47 major activities to be performed during the preparation phase include establishment of PIC at project and subproject levels, submission of a resettlement plan for ADB’s approval, appointment of NGOs, and establishment of the grievance redress cell. An orientation and training in resettlement management will be provided under the Project by the ADB consultant to the NGOs/resettlement and rehabilitation implementing agencies. The information campaign and community consultation will be initiated at this stage and continue until the end of the Project. Implementation of the resettlement plan will follow the preparatory phase and includes (i) issuing of compensation and awards by the EA, (ii) payment of eligible assistance, (iii) relocation of affected persons, and (iv) initiation of economic rehabilitation measures. Subsequent activities include site preparation for delivering the site to contractors for construction, and commencement of civil works.
H. Monitoring and Evaluation 10. The resettlement plan will have both internal and external monitoring. Internal monitoring will be a regular activity for the PIC, which will oversee the timely implementation of resettlement and rehabilitation activities. Internal monitoring will be carried out by the PIC and its agents, such as the NGOs/resettlement and rehabilitation implementing agencies and will prepare monthly reports on the progress of resettlement plan implementation. External (or independent) monitors will be hired by ADB to provide an independent periodic assessment of resettlement implementation and impacts to verify internal monitoring, and to suggest adjustment of delivery mechanisms and procedures as required.