Maharashtra State Road Improvement Project

Project Administration Manual

Project Number: P52298-001 Loan Number: LXXXX March 2020

India: Maharashtra State Road Improvement Project

ABBREVIATIONS

ADB – Asian Development Bank APFS – audited project financial statements CRN – core road network EMP – environmental management plan EMOP – environmental monitoring plan EWCD – elderly–women–children–differently abled GAP – gender action plan GRM – grievance redress mechanism IEE – initial environmental examination km – kilometer LFIS – Loan Financial Information System MPWD – Maharashtra Public Works Department NGO – nongovernment organization PAM – project administration manual PIU – project implementation unit PMS – project management services PMU – project management unit SPS – Safeguard Policy Statement SOE – statement of expenditure TOR – terms of reference

CONTENTS I. PROJECT DESCRIPTION 1 II. IMPLEMENTATION PLANS 1 A. Project Readiness Activities 1 B. Overall Project Implementation Plan 3 III. PROJECT MANAGEMENT ARRANGEMENTS 4 A. Project Implementation Organizations: Roles and Responsibilities 4 B. Key Persons Involved in Implementation 5 C. Project Organization Structure 6 IV. COSTS AND FINANCING 7 A. Cost Estimates Preparation and Revisions 7 B. Key Assumptions 7 A. Detailed Cost Estimates by Expenditure Category 8 B. Allocation and Withdrawal of Loan Proceeds 9 C. Detailed Cost Estimates by Financier 10 D. Detailed Cost Estimates by Outputs 11 E. Detailed Cost Estimates by Year 12 F. Contract and Disbursement S-Curve 13 G. Fund Flow Diagram 14 V. FINANCIAL MANAGEMENT 15 A. Financial Management Assessment 15 B. Disbursement 16 C. Accounting 17 D. Auditing and Public Disclosure 18 VI. PROCUREMENT AND CONSULTING SERVICES 19 A. Advance Contracting and Retroactive Financing 19 B. Procurement of Goods, Works, and Consulting Services 19 C. Procurement Plan 20 D. Consultant's Terms of Reference 20 VII. SAFEGUARDS 20 A. Environmental Safeguards 20 B. Social Safeguards 21 C. Implementation Arrangements for Environment and Social Safeguards 22 D. Grievance Redress Mechanism 23 VIII. GENDER AND SOCIAL DIMENSIONS 24 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION 27 A. Project Design and Monitoring Framework 27 B. Monitoring 27 C. Evaluation 29 D. Reporting 29 E. Stakeholder Communication Strategy 30 X. ANTICORRUPTION POLICY 31 XI. ACCOUNTABILITY MECHANISM 31

XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL 31

APPENDIXES

A. Design and Monitoring Framework B. Procurement Plan C. Terms of Reference for Consulting Services: Authority Engineer D. Terms of Reference for Consulting Services: Project Management Services E. Terms of Reference for Consulting Services: Resettlement and Gender Action Plan Implementation F. Gender Action Plan Monitoring and Reporting Format

Project Administration Manual Purpose and Process

1. The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with the policies and procedures of the government and Asian Development Bank (ADB). The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM.

2. The Maharashtra Public Works Department (MPWD), through the project management unit, is wholly responsible for the implementation of ADB-financed projects, as agreed jointly between the borrower and ADB, and in accordance with the policies and procedures of the government and ADB. ADB staff is responsible for supporting implementation, including compliance by MPWD of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures.

3. At loan negotiations, the borrower and ADB have agreed to the PAM and ensured consistency with the loan agreement. Such agreement is reflected in the minutes of the loan negotiations. In the event of any discrepancy or contradiction between the PAM and the loan agreement, the provisions of the loan agreement shall prevail.

4. After ADB Board approval of the project’s report and recommendations of the President (RRP), changes in implementation arrangements are subject to agreement and approval pursuant to relevant government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval, they will be subsequently incorporated in the PAM.

I. PROJECT DESCRIPTION

1. The Government of India requested assistance from the Asian Development Bank (ADB) to support the improvement of state highways and major district roads in the state of Maharashtra. The project will upgrade and maintain about 450 kilometers (km) of state roads forming part of the core road network (CRN) in Maharashtra, which will enhance transport accessibility and efficiency, and improve the sustainability of the road network, in line with the state’s Road Development Plan 2001–2021.1 The project will involve upgrading state roads to a two-lane standard and performance-based maintenance contracts to maintain the improved road assets for 5 years after construction. The project also includes initiatives to build institutional capacity within the Maharashtra Public Works Department (MPWD), the project executing agency, focusing on strengthened sustainability and road safety practices.

2. The project is aligned with the following impacts: connectivity between industrial areas, agricultural areas, administrative headquarters, and economic centers of Maharashtra enhanced (footnote 1). The project will have the following outcome: transport accessibility, efficiency, sustainability, and safety of the CRN in Maharashtra improved.

3. Output 1: State highways and major district roads of the core road network upgraded and maintained. The project will (i) upgrade about 25 km of major district roads and 425 km of state highways with climate change adaptation features; (ii) commence road maintenance using performance-based contracts for 450 km of roads; and (iii) install road safety features friendly to the elderly, women, children, and people with disabilities at appropriate locations.

4. Output 2: Capacity in road safety and maintenance increased. The loan will finance (i) development and adoption of a maintenance planning methodology for the project roads and other CRN roads; (ii) piloting and establishment of a systematic approach to road safety audits for 200 km of state highways; (iii) training in climate change and disaster-resilient features applicable to road design for MPWD project staff, including women staff; (iv) training in road safety auditing for MWD project staff, including for women staff; and (v) increased road safety awareness among contractors’ personnel, including women personnel.

II. IMPLEMENTATION PLANS

A. Project Readiness Activities

5. Procurement of civil works and recruitment of authority engineer consultants and a project management services (PMS) consultant are being undertaken under advance contracting and retroactive financing to enhance project readiness. The project readiness activities and the indicative timelines are presented in Table 1.

Table 1: Project Readiness Activities Year Month Indicative Milestones Responsibility 2019 January Preparation of bidding documents and TOR for consulting services MPWD April Procurement of civil works MPWD Procurement of consulting services MPWD

1 Government of Maharashtra, Public Works Department. 2012. Road Development Plan 2001–2021. Mumbai.

Year Month Indicative Milestones Responsibility July Concept clearance ADB October Fact-finding mission ADB 2020 February Staff review meeting ADB March Loan negotiations ADB/GOI/MPWD Award of civil works contracts MPWD Award of authority engineer consulting services MPWD April ADB Board approval ADB

Loan signing ADB/GOI/MPWD

Award of all consulting services MPWD

Government legal opinion provided GOI/MPWD May Loan effectiveness ADB ADB = Asian Development Bank, GOI = Government of India, MPWD = Maharashtra Public Works Department, TOR = terms of reference. Source: Asian Development Bank.

B. Overall Project Implementation Plan

6. The project implementation chart recording key implementation activities on a quarterly basis is provided in Table 2. The activities will be updated annually and submitted to ADB with contract and disbursement projections for the following year.

Table 2: Gantt Chart of Implementation Activities

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Activities Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Project Preparation Project preparation, processing, and approval by ADB Loan signing and effectiveness

Output 1: State highways and major district roads of the core road network upgraded and maintained 1.1 Procurement of civil works 1.2 Resettlement and rehabilitation activities 1.3 Recruitment and implementation of authority engineera 1.4 Civil works construction 1.5 Commencement of road maintenance activitiesb Output 2: Capacity in road safety and maintenance increased 2.1 Recruitment and implementation of project management services consultants for road asset management, road safety, financial management and safeguards 2.2 Delivery of training on climate change and disaster resilient features 2.3 Completion and piloting of road safety audits 2.4 Delivery of capacity building in road safety auditing

Project Completion Project completion reporting Financial closure of loan account ADB = Asian Development Bank, Q = quarter. a Authority engineer inputs will be intermittent during the maintenance period. b Maintenance is fully funded by the Government of Maharashtra; activities commence during implementation and extend beyond the estimated loan closing date. Source: Asian Development Bank.

III. PROJECT MANAGEMENT ARRANGEMENTS

A. Project Implementation Organizations: Roles and Responsibilities

Table 3: Implementation Roles and Responsibilities

Project Implementation Organizations Management Roles and Responsibilities Executing agency (i) Overall coordination and supervision of project implementation activities Maharashtra Public Works (ii) Selection of subproject roads Department (iii) Procurement of civil works contracts (iv) Recruitment and administration of consulting services (v) Project sustainability at post implementation stage (vi) Preparation and submission of withdrawal applications (vii) Submission of the audited annual report and financial statements (viii) Submission of semi-annual monitoring reports on resettlement plan implementation (ix) Submission of semi-annual monitoring reports on environment (x) Maintaining project accounts and loan financial records (xi) Keeping supporting documents for project financial statements and project accounts (xii) Preparation of regular progress reports, monitoring reports, and a project completion report and their timely submission to ADB Implementing agency (i) Preparation of detailed project reports of subproject roads (ii) Day-to-day project preparation and supervision of project Project Management Unit in implementation activities the Maharashtra Public (iii) Administration of civil works contracts Works Department (iv) Quality assurance of works and services of consultants and counterpart staff (v) Compliance with safeguards requirements (vi) Involving beneficiaries, affected persons, and their representatives in all stages of project development and implementation (vii) Information disclosure (viii) Implementation of gender action plan (ix) Compliance with loan covenants (road safety, social and environment safeguards, financial, economic, others) (x) Preparation of regular progress reports and monitoring reports Asian Development Bank (i) Monitoring and review of overall project implementation in (ADB) consultation with the executing agency, including, but not limited to, progress toward the achievement of project outputs, progress of contract awards and disbursements, procurement and performance audits, and compliance with loan covenants (ii) Posting on the ADB website of updated project data sheets and safeguards documents as per the disclosure provision of the ADB Safeguard Policy Statement (2009) (iii) Ensuring compliance with loan covenants (road safety, social and environmental safeguards, financial, economic, and others) (iv) Timely processing of withdrawal applications and release of eligible funds Source: Asian Development Bank.

B. Key Persons Involved in Implementation

7. A dedicated project management unit (PMU) is established with the executing agency, consisting of a project director, deputy project director, assistant project manager, quality assurance and accounting staff, safeguards officers, and support staff. The PMU is supported by field offices situated in project districts.

Executing agency Maharashtra Public Works Prakash Ingole Department Position: Project Director Telephone: +91 94206 91943 Email address: [email protected] Office address: Office of the Chief Engineer (Konkan), Fourth Floor Bandhkam Bhavan, 25 Marzban Road, Fort, Mumbai 400001

Asian Development Bank South Asia Transport and Ravi Peri Communications Division Position: Director Telephone: +63 2 8683 1771 Email address: [email protected] Mission Leader Kirsty Rowan Marcus Position: Transport Specialist Telephone: +63 2 8632 4847 Email address: [email protected]

C. Project Organization Structure

Figure 1: Project Organization Structure

MPWD Additional Chief Secretary ADB (Inception, review, and midterm review missions) PMU (Mumbai) • Project director (1) Chief Engineer, Konkan Region PMS • Deputy project director (1) • Assistant project manager (1) • Senior account officer (1) • Focal safeguards and quality assurance officers (2) • Support staff (4)

PIU

Chief Engineer Konkan Chief Engineer Pune Chief Engineer Amravati Chief Engineer Amravati Field Office Field Office Field Office Field Office (Ratnagiri) (Solapur) (Amravati) (Yavatmal) Superintending Engineer Superintending Engineer Superintending Engineer Superintending Engineer (1) (1) (1) (1) Executive Engineer/ Executive Engineer/ Executive Engineer/ Executive Engineer/ Safeguards Officer (1) Safeguards Officer (2) Safeguards Officer (3) Safeguards Officer (1) Divisional Accounts Divisional Accounts Divisional Accounts Divisional Accounts Officer (1) Officer (2) Officer (3) Officer (1) Deputy Engineer/ Deputy Engineer/ Deputy Engineer/ Deputy Engineer/ Assistant Safeguards Assistant Safeguards Assistant Safeguards Assistant Safeguards Officer (4) Officer (3) Officer (6) Officer (1) Others (4) Others (3) Others (6) Others (1)

Authority engineer – Package 1 Authority Engineer – Package 2 (5 civil works packages) (4 civil works packages)

ADB = Asian Development Bank, MPWD = Maharashtra Public Works Department, PIU = project implementation unit, PMS = project management services, PMU = project management unit. Source: Asian Development Bank.

IV. COSTS AND FINANCING

8. The project is estimated to cost $255.99 million, inclusive of taxes and duties, physical and price contingencies, interest, and other charges during implementation (Table 4).

Table 4: Summary Cost Estimates ($ million) Item Amounta A. Base Costb 1. State highways and major district roads of the core road network upgraded and 211.55 maintained 2. Capacity in road safety and maintenance improved 7.68 Subtotal (A) 219.23 B. Contingenciesc 24.96 C. Financial Charges During Implementationd 11.80 Total (A+B+C) 255.99 a Numbers may not sum precisely because of rounding. Includes taxes and duties of $37.3 million funded by the government and the Asian Development Bank (ADB). The ADB share does not represent an excessive share of the project cost. b In prices as of October 2019. c Physical contingencies are computed at 5.0% for civil works. Price contingencies computed at average cost escalation factor of 4.0% on local currency costs. d Includes interest and commitment charges. Interest during construction for the ordinary capital resources loan has been computed at the 5-year United States dollar fixed swap rate plus an effective contractual spread of 0.50% and a maturity premium of 0.10%. Commitment charges for the ordinary capital resources loan are 0.15% per year to be charged on the undisbursed loan amount. Source: Asian Development Bank estimates.

9. The government has requested a regular loan of $177 million from ADB’s ordinary capital resources to help finance the project. ADB will finance part of the civil works and consulting services. The government will finance land acquisition, utility shifting, social and environmental mitigations, 5-year road maintenance contracts, and project management.

A. Cost Estimates Preparation and Revisions

10. The cost estimates were prepared by the MPWD. The project cost includes provisions for road safety and climate change adaptation measures. The project cost will be reviewed and updated during construction based on changing quantities and application of the price escalation clause in the civil works contract.

B. Key Assumptions

11. The following key assumptions underpin the cost estimates and financing plan:

(i) Exchange rate: ₹71.0435 = $1.00 (as of 13 October 2019). (ii) Price contingencies based on expected cumulative inflation over the implementation period are as follows:

Table 5: Escalation Rates for Price Contingency Calculation (%) Item 2020 2021 2022 2023 2024 Average Domestic rate of price inflation 4.0 4.0 4.0 4.0 4.0 4.0 Source: Asian Development Bank estimates.

A. Detailed Cost Estimates by Expenditure Category

Table 6: Detailed Cost Estimates by Expenditure Category Total Cost % of Total ($ million) Cost A. Investment Costs 1. Civil works 199.89 78.08 2. Maintenance 5.13 2.02 3. Utility shifting 2.63 1.04 4. Social mitigation and gender aspects 0.48 0.19 5. Environmental mitigation 0.24 0.10 6. Consultants a. Authority engineer 4.84 1.89 b. Project management services 4.72 1.84 c. Resettlement and gender action plan implementation 0.30 0.12 Subtotal (A) 218.23 85.25 B. Recurrent Costs 1. Project management (MPWD) 1.00 0.39 Subtotal (B) 1.00 0.39 Total Base Cost (A+B) 219.23 85.64 C. Contingencies 1. Price 13.96 5.45 2. Physical 11.00 4.30 Subtotal (C) 24.96 9.75 D. Financial Charges During Implementation 1. Interest during construction 10.80 4.22 2. Commitment charges 1.00 0.39 Subtotal (D) 11.80 4.61 Total Project Cost (A+B+C+D) 255.99 100.00 MPWD = Maharashtra Public Works Department. Note: Numbers may not sum precisely because of rounding. Source: Asian Development Bank estimates.

B. Allocation and Withdrawal of Loan Proceeds

12. Table 7 sets forth the categories of expenditure items to be financed out of the proceeds of the loan and the allocation amounts of the loan to each category.

Table 7: ADB Regular Ordinary Capital Resources Loan Category ADB Financing Amount Allocated Percentage and Basis for Withdrawal Number Item ($ million) from the Loan Account 1 Works 151,910,000 76% of total expenditure claimed 2 Consulting services 8,110,000 85% of total expenditure claimed 3 Unallocated 16,980,000 Total 177,000,000 ADB = Asian Development Bank. Source: Asian Development Bank.

C. Detailed Cost Estimates by Financier

Table 8: Detailed Cost Estimates by Financier ADB GOM % of Cost % of Cost Total Item Amount Amount Category Category Amount A. Investment Costs 1. Civil works 151.91 76.00 47.97 24.00 199.89 2. Maintenance - 0.00 5.13 100.00 5.13 3. Utility shifting - 0.00 2.63 100.00 2.63 4. Social mitigation and gender aspects - 0.00 0.48 100.00 0.48 5. Environmental mitigation - 0.00 0.24 100.00 0.24 7. Consulting services a. Authority engineer consultants 3.39 70.00 1.45 30.00 4.84 b. Project management services 4.72 100.00 - 0.00 4.72 c. Resettlement and gender action plan - 0.00 0.30 100.00 0.30

implementation

Subtotal (A) 160.02 73.33 58.21 26.67 218.23 B. Recurrent Costs 1. Project management (MPWD) - 0.00 1.00 100.00 1.00 Subtotal (B) - 0.00 1.00 100.00 1.00 Total Base Cost (A+B) 160.02 72.99 59.21 27.01 219.23 C. Contingencies 16.97 68.00 7.99 32.00 24.96 D. Financial Charges During Implementation - 0.00 11.80 100.00 11.80 Total Project Cost (A+B+C+D) 177.00 78.99 255.99

% Total Project Cost 69.14 30.86 100.00 ADB = Asian Development Bank, GOM = Government of Maharashtra, MPWD = Maharashtra Public Works Department. Notes: 1 Numbers may not sum precisely because of rounding. 2 Asian Development Bank will finance the taxes and duties for consulting services, while the Government of Maharashtra will finance the taxes and duties for civil works. Source: Asian Development Bank estimates. 11

D. Detailed Cost Estimates by Outputs

Table 9: Detailed Cost Estimates by Outputs ($ million)

Output 1 Output 2

Total % of Cost % of Cost Item Cost Amount Category Amount Category

A. Investment Costs 1. Civil works 199.89 198.97 99.54 0.91 0.46 2. Maintenance 5.13 3.08 60.00 2.05 40.00 3. Utility shifting 2.63 2.63 100.00 0.00 0.00 4. Social mitigation and gender aspects 0.48 0.48 100.00 0.00 0.00 5. Environmental mitigation 0.24 0.24 100.00 0.00 0.00 6. Consultants a. Authority engineer 4.84 4.84 100.00 0.00 0.00 b. Project management consultant 4.72 0.00 0.00 4.72 100.00 c. Resettlement and gender action plan 0.30 0.30 100.00 0.00 0.00 implementation Subtotal (A) 218.23 210.55 96.48 7.68 3.52

B. Recurrent Costs 1. Project management (MPWD) 1.00 1.00 100.00 0.00 0.00 Subtotal (B) 1.00 1.00 100.00 0.00 0.00 Total Base Cost (A+B) 219.23 211.55 96.50 7.68 3.50

C. Contingencies 1. Price 13.96 13.96 100.00 0.00 0.00 2. Physical 11.00 11.00 100.00 0.00 0.00 Subtotal (C) 24.96 24.96 100.00 0.00 0.00

D. Financial Charges During Implementation

1. Interest during construction 10.80 10.80 100.00 0.00 0.00 2. Commitment charges 1.00 1.00 100.00 0.00 0.00 Subtotal (D) 11.80 11.80 100.00 0.00 0.00 Total Project Cost (A+B+C+D) 255.99 248.31 97.00 7.68 3.00 MPWD = Maharashtra Public Works Department. Note: Numbers may not sum precisely because of rounding. Source: Asian Development Bank estimates.

E. Detailed Cost Estimates by Year

Table 10: Detailed Cost Estimates by Year ($ million) Total Item Cost 2020 2021 2022 2023 2024 A. Investment Costs 1. Civil works 199.89 5.92 59.97 59.97 43.98 29.98 2. Maintenance 5.13 0.15 1.54 1.54 1.13 0.77 3. Utility shifting 2.63 0.08 0.79 0.79 0.58 0.39 4. Land acquisition, social mitigation, and gender aspects 0.48 0.01 0.15 0.15 0.11 0.07 5. Environmental mitigation 0.24 0.01 0.07 0.07 0.05 0.04 6. Consultants a. Authority engineer consultants 4.84 0.14 1.45 1.45 1.07 0.73 b. Project management consultant 4.72 0.00 1.42 1.65 1.18 0.47 c. Resettlement plan and gender action plan 0.30 0.01 0.09 0.09 0.06 0.04 implementation Subtotal (A) 218.23 6.46 65.47 65.47 48.01 32.73 B. Recurrent Costs 1. Project management 1.00 0.03 0.30 0.30 0.22 0.15 Subtotal (B) 1.00 0.03 0.30 0.30 0.22 0.15 Total Project Cost (A+B) 219.23 6.49 65.77 65.77 48.23 32.88 C. Contingencies 24.96 0.74 7.49 7.49 5.49 3.74 D. Financial Charges During Implementation 11.80 0.35 3.54 3.54 2.60 1.77 Total Project Cost (A+B+C+D) 255.99 7.58 76.80 76.80 56.32 38.40 % Total Project Cost 100.00 3.00 30.00 30.00 22.0 15.00 Note: Numbers may not sum precisely because of rounding. Source: Asian Development Bank estimates.

F. Contract and Disbursement S-Curve

Table 11: Contract Awards and Disbursement Baseline Projections ($ million) Contract Award Disbursement Year Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total 2020 0.0 0.0 103.6 4.7 108.3 0.0 0.0 0.0 5.3 5.3 2021 0.0 68.7 0.0 0.0 68.7 13.3 13.3 13.3 13.3 53.1 2022 0.0 0.0 0.0 0.0 0.0 13.3 13.3 13.3 13.3 53.1 2023 0.0 0.0 0.0 0.0 0.0 9.7 9.7 9.7 9.7 38.9 2024 0.0 0.0 0.0 0.0 0.0 6.6 6.6 6.6 6.6 26.6 Total Contract Awards 177.0 Total Disbursements 177.0 Q = quarter. Source: Asian Development Bank estimates.

Figure 2: Contract Awards and Disbursement S-Curve

Q = quarter. Source: Asian Development Bank estimates.

G. Fund Flow Diagram

Figure 3: Fund Flow Diagram

ADB Government of Government of Maharashtra India

PMU/ Civil Works Contractors Mumbai Payment

IPC PIU Billing Division Office Certified (Executive by Authority Engineer) Engineer Ratnagiri (1) Solapur (2) Vouchers Land Amravati (3) Acquisition, Yavatmal (1) R&R, Shifting Payment Utilities Vouchers Consulting services, Payment equipment supplies, other expenditures Fund request Budget release

Withdrawal MPWD Application

ADB Ministry of Withdrawal Finance Budget Application allocation CAAA

Finance Department GOI of GOM Bank Account

Funds Flow Documents Flow

ADB = Asian Development Bank, CAAA = Controller of Aid Accounts and Audit, GOI = Government of India, GOM = Government of Maharashtra, IPC = interim payment certificate, MPWD = Maharashtra Public Works Department, PIU = project implementation unit, PMU = project management unit, R&R = resettlement and rehabilitation. Source: Asian Development Bank.

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

13. The financial management assessment (FMA) was conducted in September 2019 in accordance with ADB’s Guidelines for the Financial Management and Analysis of Projects and the Financial Due Diligence: A Methodology Note. The FMA considered the capacity of the PMU and PIU including funds-flow arrangements, staffing, accounting and financial reporting systems, financial information systems, and internal and external auditing arrangements. Based on the assessment, the key financial management risks identified are (i) the MPWD and the PMU have not implemented an ADB-supported project before, and (ii) the lack of an internal audit function within the PMU. It is concluded that the overall premitigation financial management risk of the PMU is moderate. The PMU has agreed to implement an action plan as key measure to address the deficiencies. The financial management action plan is provided in Table 12.

Table 12: Financial Management Action Plan Responsible Key Risks Risk Mitigating Activity Timeline Entity Lack of This is the implementing entity’s first Within 6 months ADB knowledge on ADB-financed project. Trainings will be of the project start ADB policies and conducted on ADB disbursement date procedure procedures and financial management requirements for all financial management staff of the PMU and field offices. Lack of finance A senior level person in the PMU will be Before March PMU/MPWD and accounts assigned the responsibility of overseeing 2020 staff the financial management of the project. For each PIU, one of the existing accounting staff of the field offices will be assigned financial management responsibilities on exclusive basis. The PMU will also engage a consulting firm for providing financial management support until the end of the project. Timely release of ADB disbursement will follow the Throughout the PMU/MPWD counterpart reimbursement procedure. Timely project period funds availability of funds will be ensured with proper annual budgeting for implementing the proposed funds-flow arrangements. The PMU will be responsible for submitting detailed budget proposals based on the project workplan on annual basis. The MPWD will ensure adequate budgetary allocations and timely release of funds for the project on annual basis. Accounting To ensure full compliance with ADB’s Before May 2020 PMU/MPWD policies and requirements at all levels, a policies and procedures procedures manual with project-specific require updating financial management procedures needs to be developed and implemented by the

Responsible Key Risks Risk Mitigating Activity Timeline Entity MPWD. Training will be provided to the PMU and PIU financial management staff on the manual. Absence of A chartered accountant firm, independent Hiring of internal PMS/PMU/MPWD internal audit of the firm and/or individuals responsible audit firm by April within the PMU for accounting and financial reporting of 2020 the PMU, will be engaged to conduct internal audits and report to the PMU Conduct internal project director and Secretary (Roads), audit semi- MPWD within 45 days after the end of the annually reporting period. throughout the project period Insufficient Submission to ADB of quarterly progress At project start PMU/MPWD reporting and reports, including physical and financial and throughout monitoring of the progress with variance analysis and the entire duration project’s disbursement reports, will take place from of the project financial the onset of the project. Reports will progress include reconciliation with the ADB LFIS system. Reports will be submitted within 45 days of the end of each quarter. Delayed Submission of project financial Annually PMU/MPWD submission of statements to the auditor will be within 3 APFS months of the end of the financial year and the APFS will be submitted to ADB within 6 months from the end of the fiscal year. The APFS will ensure compliance with audit TORs agreed with CAG in India. Improvements in The PMU will arrange a customized Before June 2020 PMU/MPWD financial financial reporting IT-based system for reporting preparing project financial statements. systems The system will preferably be integrated with existing accounting and budgeting systems (Accounts Management System and Budget Expenditure Accounts Management software) of the government. ADB = Asian Development Bank, APFS = audited project financial statement, CAG = Comptroller and Auditor General, FY = fiscal year, IT = information technology, LFIS = Loan Financial Information System, MPWD = Maharashtra Public Works Department, PD = project director, PMS = project management services, PMU = project management unit, TOR = terms of reference. Source: Asian Development Bank.

B. Disbursement

1. Disbursement Arrangements for ADB Funds

14. The loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2017, as amended from time to time),2 using reimbursement procedure and detailed

2 The handbook is available electronically from the ADB website: http://www.adb.org/documents/loan-disbursement- handbook.

arrangements agreed upon between the government and ADB. Online training for project staff on disbursement policies and procedures is available.3 Project staff are encouraged to avail of this training to help ensure efficient disbursement and fiduciary control.

15. Statement of expenditure (SOE) procedure.4 The SOE procedure may be used for reimbursement of eligible expenditures. The ceiling of the SOE procedure is the equivalent of $100,000 per individual payment. Supporting documents and records for the expenditures claimed under the SOE should be maintained and made readily available for review by ADB’s disbursement and review missions, upon ADB’s request for submission of supporting documents on a sampling basis, and for independent audit. Reimbursement of individual payments in excess of the SOE ceiling should be supported by full documentation when submitting the withdrawal application to ADB.

16. Before the submission of the first withdrawal application (WA), the borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the government, together with the authenticated specimen signatures of each authorized person. The minimum value per WA is stipulated in the Loan Disbursement Handbook (2017, as amended from time to time). Individual payments below such amount should be paid by the PMU and subsequently claimed to ADB through reimbursement. The borrower should ensure sufficient category and contract balances before requesting disbursements. Use of ADB’s Client Portal for Disbursements (CPD) system is mandatory for submission of withdrawal applications to ADB. The project staff is encouraged to obtain proper training on the use of the CPD platform.

2. Disbursement Arrangements for Counterpart Fund

17. The counterpart funds will be sufficiently allocated in the annual budget since the project is under reimbursement procedure. The PMU will prepare the disbursement projections and transmit these to the government to earmark the required funds for budgeting purposes. The PMU will be responsible for preparing disbursement projections and requesting budgetary allocations for the project, including counterpart funds to the PMU. The PMU will submit to ADB annual project contract awards and disbursement projections at least a month before the start of each financial year.

C. Accounting

18. The MPWD will maintain, or cause to be maintained, separate books and records by funding source for all expenditures incurred on the project following cash-based accounting principles and practices prescribed by the Government of India’s accounting laws and regulations.5 The MPWD will prepare project financial statements in accordance with the government’s accounting laws and regulations that are consistent with international accounting principles and practices. Project financial statements shall include at a minimum a statement of receipts and payments with accompanying notes and schedules. The template financial statements provided in the terms of reference for the audit of ADB-assisted projects, agreed with the Comptroller and Auditor General of India, Department of Economic Affairs, and ADB, can be referred to as a guide.

3 Disbursement eLearning: http://wpqr4.adb.org/disbursement_elearning. 4 SOE forms are available in Appendix 7B and 7D of ADB’s Loan Disbursement Handbook (2017, as amended from time to time). 5 Government laws and regulations, and following Indian Generally Accepted Accounting Principles.

D. Auditing and Public Disclosure

19. The MPWD will cause the detailed project financial statements to be audited in accordance with Government of India regulations and by an independent auditor acceptable to ADB. The audited project financial statements together with the auditor’s opinion will be presented by the MPWD in the English language to ADB within 6 months from the end of the fiscal year.

20. The audit report for the project financial statements will include a management letter and auditor’s opinions, which cover (i) whether the project financial statements present an accurate and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting standards; and (ii) whether the proceeds of the loan were used only for the purpose(s) of the project. The annual project financial statements should include withdrawal application-wise reconciliation between amounts reported in the project financial statements and disbursement amounts appearing in the Loan Financial Information System (LFIS) of ADB. The LFIS can be accessed online and ADB will provide LFIS access to project staff on request.

21. SOE records should be maintained and made readily available for review by ADB’s disbursement and review missions or upon ADB’s request for submission of supporting documents on a sampling basis, and for independent audit.

22. Compliance with financial reporting and auditing requirements will be monitored by review missions and during normal program supervision, and followed up regularly with all concerned, including the external auditor.

23. The government, the MPWD, and the PMU have been made aware of ADB’s approach to delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements.6 ADB reserves the right to require a change in the auditor (in a manner consistent with the constitution of the borrower), or for additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed. ADB reserves the right to verify the project’s financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures.

24. Public disclosure of the audited project financial statements, including the auditor’s opinion on the project financial statements, will be guided by ADB’s Public Communications Policy 2011.7 After the review, ADB will disclose the audited project financial statements and the opinion of the auditors on the project financial statements no later than 14 days of ADB’s confirmation of their

6 ADB’s approach and procedures regarding delayed submission of audited project financial statements: (i) When audited project financial statements are not received by the due date, ADB will write to the executing agency advising that (a) the audit documents are overdue; and (b) if they are not received within the next 6 months, requests for new contract awards and disbursement such as new replenishment of advance accounts, processing of new reimbursement, and issuance of new commitment letters will not be processed. (ii) When audited project financial statements are not received within 6 months after the due date, ADB will withhold processing of requests for new contract awards and disbursement such as new replenishment of advance accounts, processing of new reimbursement, and issuance of new commitment letters. ADB will (a) inform the executing agency of ADB’s actions; and (b) advise that the loan may be suspended if the audit documents are not received within the next 6 months. (iii) When audited project financial statements are not received within 12 months after the due date, ADB may suspend the loan. 7 Access to Information Policy: http://www.adb.org/documents/access-information-policy.

acceptability by posting them on ADB’s website. The management letter, additional auditor’s opinions, and audited entity financial statements will not be disclosed.8

25. In addition to the external audit described above, an audit firm will be hired to conduct semi-annual internal audits and reporting to the MPWD Secretary (Roads) after receiving comments from the Project Director, PMU within 45 days after the end of the reporting period. The scope of the internal audit will focus in particular on the financial activities carried out by the PMU and the PIUs. An outline of terms of reference for the internal audit firm to be hired is provided in Appendix D. The MPWD shall consider key issues pointed out by the auditors and ensure timely resolution of observations by the project management.

VI. PROCUREMENT AND CONSULTING SERVICES

A. Advance Contracting and Retroactive Financing

26. All advance contracting and retroactive financing will be undertaken in conformity with the ADB Procurement Policy (2017, as amended from time to time), and the Procurement Regulations for ADB Borrowers (2017, as amended from time to time). The issuance of invitations to bid under advance contracting and retroactive financing will be subject to ADB approval. The borrower, the MPWD, has been advised that approval of advance contracting and retroactive financing does not commit ADB to finance the project.

27. Advance contracting. Advance contracting will be undertaken for civil works and consulting services.

28. Retroactive financing. After loan effectiveness, withdrawals from the loan account may be made for the reimbursement of eligible expenditures in connection with civil works and consulting services up to $35.4 million, the equivalent of 20% of the total ADB loan, incurred before loan effectiveness, but not earlier than 12 months before the signing of the loan agreement.

B. Procurement of Goods, Works, and Consulting Services

29. All procurement of goods and works will be undertaken in accordance with ADB’s Procurement Policy (2017, as amended from time to time) and the Procurement Regulations for ADB Borrowers (2017, as amended from time to time).

30. Open competitive bidding with national advertisement will be used for civil works contracts estimated to cost less than $40,000,000. The state government’s electronic procurement system will be used.9

31. The MPWD will ensure consistency between the public procurement laws of the central and state governments to ensure consistency with ADB’s Procurement Policy (2017, as amended from time to time).

32. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is in Section

8 This type of information would generally fall under public communications policy exceptions to disclosure. ADB. 2018. Access to Information Policy. 9 The e-procurement system was approved by ADB on 30 April 2019.

33. All consultants and nongovernment organizations (NGO) will be recruited according to ADB’s Procurement Policy (2017, as amended from time to time) and the Procurement Regulations for ADB Borrowers (2017, as amended from time to time).10 The terms of reference for all consulting services are detailed in Section D.

34. The MPWD will recruit two international or national firms as the authority engineers to facilitate the implementation of nine civil works packages. The total time inputs of the authority engineers are estimated at 2,431 person-months for international and national experts. The MPWD will also recruit one national firm as the PMS to support the PMU in the overall monitoring of safeguard implementation, financial management and reporting, and capacity support for road safety and road maintenance. The total time inputs of the PMS are estimated at 114 person- months for national experts. Consulting firms will be engaged using the quality- and cost-based selection (QCBS) method with a standard quality–cost ratio of 90:10. NGOs will be recruited by the MPWD under government funding to support the resettlement plan implementation.

C. Procurement Plan

35. The procurement plan is in Appendix B and describes all procurement of works and consulting services to be undertaken.

D. Consultant’s Terms of Reference

36. The terms of reference (TOR) of the consultants engaged under the project are provided in the following appendices:

(i) TOR for Authority Engineer (for Packages 1 and 2): Appendix C (ii) TOR for Project Management Services Consultant: Appendix D (iii) TOR for Resettlement and Gender Action Plan Implementation NGO: Appendix E

VII. SAFEGUARDS

37. Prohibited investment activities. Pursuant to ADB’s Safeguard Policy Statement (SPS), 2009, ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the ADB SPS.

A. Environmental Safeguards

38. The project is categorized B in accordance with the ADB SPS. The project involves the improvement of two existing major district roads and 11 state highways, totaling about 450 km, from single or intermediate lane to two lanes. No significant, irreversible environmental impacts are anticipated and none of the roads are located inside any critical habitats. Two roads, SH 204 (Barshi–Solapur) and SH 68A (Korti–Awati portion), pass through patches of the Great Indian Bustard Sanctuary.11 The biodiversity assessment established that the sanctuary is not a critical

10 Checklists for actions required to contract consultants by method are available in the e-Handbook on Project Implementation at http://www.adb.org/documents/loan-disbursement-handbook. 11 The Great Indian Bustard Sanctuary (formerly Jawaharlal Nehru Bustard Sanctuary) is identified as an Important Bird and Biodiversity Area (IBA) by BirdLife International, although noted as unsuitable habitat for the Great Indian Bustard.

habitat for, nor will the road improvement impact, the endangered birds.12 No other roads pass through or are near any protected or environmentally sensitive areas. Mitigation measures were proposed in the initial environmental examination (IEE) for the observed movement of wildlife such as black bucks and other small mammals along this road. A consolidated IEE has been prepared for the project in accordance with the ADB SPS. The MPWD will not allow road construction to commence without obtaining the necessary permits and clearances.

39. Individual environmental management plans (EMP) have been prepared for each road covering mitigation measures for all anticipated environmental impacts during project construction and operation. The EMPs have been approved by ADB and included in the contract agreement with the respective civil works contractors. Specific mitigation measures with details on location, time, and responsible agency for implementation are given in these EMPs. Accompanying environmental monitoring plans (EMOP) for each road were also prepared to guide the monitoring of various environment quality parameters, such as air and water quality, noise and vibration, and checking the effectiveness of the EMP. The EMOP comprises activities on testing the quality of air and water through laboratory tests, measuring levels of noise and vibration, and physical monitoring of problems of soil erosion, tree plantations, and occupational health and safety issues.

B. Social Safeguards

40. Involuntary resettlement. The project is categorized B based on the ADB classification system. The project will require about 216 square meters of private land. The preferred approach to acquire private land and assets will be through direct purchase, following the provisions of Section 46 of India’s Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (2013), the Government of Maharashtra Direct Purchase Act (2016), and the ADB SPS.13 As per the ADB SPS requirement, the fairness and transparency of the direct purchase approach will be independently monitored by a third party. Should direct negotiations fail, the involuntary safeguards standard requirement will be triggered.14 Resettlement plans (nine) have been prepared and disclosed on the ADB website. The cost of direct purchase and resettlement and rehabilitation activities will be entirely borne by the Government of Maharashtra.

41. Indigenous people’s safeguards. The social impact assessment conducted by the MPWD indicates that the project will not affect indigenous people’s communities within the meaning of the SPS. Therefore, the project is categorized C based on the ADB classification system and no indigenous people’s plans have been prepared.

12 As assessed based on the International Finance Corporation’s Guidance Note 6 on Biodiversity Conservation and Sustainable Management of Living Natural Resources updated in 2019 and ADB SPS 2009. 13 SPS Appendix 2, paragraph 25, p. 48: “Safeguard Requirements 2 does not apply to negotiated settlements, unless expropriation would result upon the failure of negotiations. Negotiated settlements help avoid expropriation and eliminate the need to use governmental authority to remove people forcibly. The borrower and/or client is encouraged to acquire land and other assets through a negotiated settlement wherever possible, based on meaningful consultation with affected persons, including those without legal title to assets. A negotiated settlement will offer adequate and fair price for land and/or other assets. The borrower and/or client will ensure that any negotiations with displaced persons openly address the risks of asymmetry of information and bargaining power of the parties involved in such transactions. For this purpose, the borrower and/or client will engage an independent external party to document the negotiation and settlement processes. The borrower and/or client will agree with ADB on consultation processes, policies, and laws that are applicable to such transactions; third-party validation; mechanisms for calculating the replacement costs of land and other assets affected; and record-keeping requirements.” 14 Only one subproject road will require land acquisition by direct purchase. One private titleholder will lose 216 square meters of land in Pusad village.

C. Implementation Arrangements for Environment and Social Safeguards

42. The responsibilities of various agencies and parties for implementing environmental and social safeguards are provided in this section.

43. Project management unit. The PMU is headed by a project director and supported by a deputy project director, assistant project manager, and two focal safeguards officers. Four field offices have been established under the PIU to support the PMU operation. Each field office is headed by a superintending engineer and supported by one, two, or three executive engineers, deputy engineers, and junior engineers. The executive engineer will serve as the social and environmental safeguards focal at the site level. The PMU and field offices will be responsible for ensuring the timely processing of forestry clearances, tree cutting permits, and other similar clearances and permits required for the project. They will also ensure timely and effective planning and implementation of resettlement and social development activities. The PMU and the field offices will conduct at least bimonthly site visits and ensure the reports submitted by the contractor and the authority engineers are consistent with site conditions. The PMU with the support of the PMS will review all social and environmental monitoring reports prepared by the contractor and the authority engineers. The PMU will ensure that (i) semi-annual environmental monitoring reports, and (ii) semi-annual social monitoring reports are submitted within 3 calendar months from the end of the respective reporting period to ADB for disclosure on the ADB website.

44. Project management services. Project implementation support, including safeguards implementation, will be provided to the PMU by the PMS. The PMS team will include an environmental specialist whose role will be to support the PMU in monitoring the implementation of environmental safeguards under the project and the review of environmental monitoring reports submitted by the authority engineers and the contractor. The PMS will also carry out capacity building activities on the implementation of social and environmental safeguards, including sustainability and climate change adaptation measures, through training workshops and on-site training for the PMU, authority engineers, and contractor, as necessary. The PMS will have a gender and social development specialist to assist the PMU in overseeing the implementation of the resettlement plans, gender-related actions, and other social development activities. The PMS will prepare safeguards monitoring templates to be used by the authority engineers.

45. Authority engineers. Two authority engineer consultants are engaged under the project and will be responsible for supervising implementation of the EMP and EMOP by the contractor, and the resettlement and social development activities by the resettlement implementation NGOs.

46. Each authority engineer will include an environmental specialist who will be responsible for at least fortnightly site-level supervision and monitoring using the standard safeguards monitoring templates prepared by the PMS. All subplans such as the construction camp layout, waste management, borrow area management, traffic management, tree plantation, and others prepared by the contractor will be reviewed and approved by the authority engineer. The authority engineer will also provide guidance to the contractor on corrective measures that must be taken and monitor their compliance, and ensure that proposed climate and disaster risk adaptation measures are properly implemented. The environmental expert will review and verify all environmental reports prepared by each of the contractors. Based on site inspections and environmental reports from the contractors, the environmental expert will prepare quarterly environmental monitoring reports for submission to the PMU. The quarterly reports will be 23

consolidated into a semi-annual environmental monitoring report and submitted to the PMU for their review and endorsement for further submission to ADB.

47. Each authority engineer will also include a social development specialist. The specialist will be responsible for the following: (i) guide the implementation of the resettlement plans; (ii) help set up an internal monitoring system; (iii) participate and monitor the project-level grievance redress committee; and (iv) support the preparation of the semi-annual social monitoring reports.

48. Contractor. The contractor will prepare and implement the site-specific contractor’s EMP and EMOP based on the EMP and EMOP attached to the bidding documents. Qualified environmental health and safety experts will be recruited within 30 days of contract signing and maintained throughout the construction period. These personnel will have presence in all construction and campsites and ensure proper day-to-day implementation of the EMP. The EMOP will include data collection on air, water, noise, and vibration following protocols as provided in the IEE, to be done by approved laboratories and/or testing centers as verified by the authority engineer. Quarterly environmental monitoring reports will be prepared for review and approval by the authority engineer. For SH 204, the contractor will include wildlife movements and/or sightings in its monitoring reports. The contractor will coordinate closely with the authority engineer on climate and disaster risk adaptation measures.

49. Resettlement and gender action plan implementation nongovernment organization. Two resettlement implementation NGOs will be recruited to facilitate the implementation of the nine resettlement plans and the gender action plan (GAP). The NGOs will work as a link between the PMU’s field offices and the affected community, and conduct the following key tasks: (i) identify, verify, and update the census of affected households; (ii) develop micro plans in consultation with the project-affected persons and the PMU staff; (iii) educate project-affected persons on the entitlement matrix; (iv) assist affected households in identifying suitable alternate land for resettlement purpose; (v) prepare and distribute entitlement identity cards; (vi) assist affected persons in getting benefits from various government development programs; (vii) conduct the livelihood development program; (viii) help establish and set up the grievance redress committees; (ix) conduct ongoing consultations with affected persons with special attention to women and vulnerable groups; (x) set up and manage the internal monitoring system; (xi) assist with implementation of gender actions; (xii) implement, monitor, and report activities in the GAP; and (xiii) prepare formats to collect sex-disaggregated data.

D. Grievance Redress Mechanism

50. The detailed description of the grievance redress mechanism (GRM) is in the IEE and resettlement plans of all project roads. The purpose of the GRM will be to receive and facilitate the resolution of affected people’s concerns, complaints, and grievances about the social and environmental performance at the project level. The GRM will aim to provide a time-bound and transparent mechanism to voice and to resolve social and environmental concerns linked with the project. The project-specific GRM is not intended to bypass the government’s own redress process but to address project-affected people’s concerns and complaints promptly, making the GRM readily accessible to all segments of affected persons and scaled to the risks and impacts of the project. Hence, depending on the nature and significance of the grievances or complaints, the GRM will comprise procedures to address grievances at the project site, the PIU, and at the PMU level. More serious complaints that cannot be addressed at the PIU level will be forwarded to the PMU grievance redress committee. Complainants may access the formal legal system at any time.

51. Site-level grievance redressal will be handled by the authority engineer as the mediating party between the contractor and the aggrieved. The PIU-level grievance redress committee (GRC) will be chaired by the superintending engineer and composed of representatives from the contractor, authority engineer, PIU, women’s representative, local community, and local forestry authority as necessary. The PMU level will be chaired by the Project Director and comprise members from the MPWD, PMS, authority engineer, contractor, and women’s representative.

52. The local communities in the project area will be informed by the PIU of the grievance redress procedure and the contact persons for lodging complaints. Provisions shall also be made for lodging complaints at the respective MPWD offices. Contractors, the PIU, and the PMU will maintain logbooks and/or database of grievances and will report on formal and informal complaints and feedback received as part of regular safeguards reporting.

VIII. GENDER AND SOCIAL DIMENSIONS

53. Gender. The project is categorized as effective gender mainstreaming based on the Guidelines for Gender Mainstreaming Categories of ADB Projects (2012). A gender action plan (GAP) is attached to the project and outlines 10 activities and measurable indicators: (i) enhance women’s economic and human development opportunities; (ii) build institutional gender capacities; (iii) strengthen the technical and management capacities of women staff on climate adaptation and resilience features applicable to road design and road safety auditing; (iv) create spaces for women’s participation in decision-making and leadership; (v) support reduced time poverty; and (vi) promote gender responsive infrastructure by ensuring friendly road and bus shelter design features for the elderly, women, children, and differently-abled. This component will include a pilot initiative of additional design features, such as solar lights and information on women-centric schemes, women empowerment messages, and helpline numbers in select bus shelters. The project will maintain sex-disaggregated data on staff, consultants, construction workforce participation, labor, and project related trainings.

54. The PMU in the MPWD, with support from the gender consultants, will be responsible for GAP implementation and monitoring. To oversee and monitor GAP implementation, gender focal points will be nominated—one in MPWD and one in each of the PIU’s four field offices (Amravati, Ratnagiri, Solapur, and Yavatmal). The project will include and publish gender-specific information and sex-disaggregated data, as relevant. The budget for GAP implementation has been absorbed in cost items for civil works as well as resettlement and gender action plan implementation in Tables 6 to 10. Table 13 lists these measures and the institutions responsible for implementation.

Table 13: Gender Actions Activities Indicators/Targets Responsibility Timelines Output 1: State highways and major district roads of the core road network upgraded and maintained 1.1. Road upgraded 1. Road safety features friendly to MPWD, During infrastructure incorporate elderly people, women, children, Authority implementation EWCD-friendly design and and people with disabilities installed Engineers period safety measuresa at 50 appropriate locations (2019 baseline: 0) 1.2. EWCD-friendly bus 2. 50 (100%) bus shelters MPWD, During sheltersb constructed in constructed on state highways have Authority implementation state highways EWCD-friendly features Engineers period (2019 baseline: 0) 25

Activities Indicators/Targets Responsibility Timelines 1.3. Solar light provision 3. 50 (100%) of bus shelters MPWD, During included in bus shelters identified and fitted with solar lights Authority implementation close to educational and (2019 baseline: 0) Engineers period health facilities on a pilot basis 1.4. Information on 4. 50% bus shelters include MPWD, During women-specific schemes, information on women-specific Authority implementation women empowerment, schemes, women empowerment, Engineers period and helpline numbers and helpline numbers included in bus shelters (2019 baseline: 0) 1.5. Organize health 5. 10 health camps organized in all MPWD, During camps for women at roads for at least 30 EWCD persons Authority implementation different habitations per health camp Engineers period alongside the highway (Target: 50% women) with representation of 6. 5 health camps for 150 women women community on breast and cervical cancer members awareness and on road safety and sexually transmitted infections (including HIV) awareness (2019 baseline: 0) 1.6. Conduct gender- 7. Contractors provided with an MPWD, During based awareness for advisory on enhancing female Authority implementation contractors, especially on workforce participation and Engineers period engaging female maintaining sex-disaggregated data workforce and enhancing on construction workers their participation across (2019 baseline: not applicable) skilled and unskilled 8. At least 80% contractors’ categories personnel, including 80% eligible women personnel, report increased awareness in road safety and sexually transmitted infections (including HIV) (2019 baseline: not applicable) 9. Post-training survey conducted to assess enhanced awareness in road safety and sexually transmitted infections (including HIV) (2019 baseline: not applicable) Output 2: Capacity in road safety and maintenance increased 2.1. Organize technical and 10. At least 100 eligible MPWD staff, MPWD, During management capacity of which 20% are women (20 Authority implementation building trainings for MPWD women staff), report increased Engineers period project staff knowledge in climate adaptation and resilience features applicable to road design (2019 baseline: not applicable) 11. A post training assessment survey conducted to assess how participants evaluate acquired knowledge and skills (2019 baseline: not applicable) 12. At least eligible 50 staff, of which 20% are women (10 women staff),

Activities Indicators/Targets Responsibility Timelines report increased knowledge in technical capacity on road safety auditing (2019 baseline: not applicable) 13. A post training assessment survey conducted to assess how participants evaluate acquired knowledge and skills (2019 baseline: not applicable) 2.2. Organize gender 14. All (100%) MPWD project staff, MPWD During trainings and GAP including 90% women project staff, implementation orientation for MPWD project trained on GAP implementation, period staff monitoring, and reporting (2019 baseline: not applicable) 2.3. Project PMIS includes 15. Sex-disaggregated data on MPWD During gender-specific project staff, consultants, workforce implementation information and sex- participation, labor, and project period disaggregated data, as related orientation and training relevant programs are maintained and reported in progress reports 2.4. MPWD oversees 16. GAP progress monitored MPWD During implementation, monitoring, regularly and reported every quarter implementation and reporting of GAP with the project quarterly progress period reports (2019 baseline: not applicable) 17. Gender focal point designated in Year 1 the MPWD and each of the 4 PIUs (Amravati, Ratnagiri, Solapur, and Yavatmal) (2019 baseline: not applicable)

18. Gender specialist consultant is Year 1 recruited

(2019 baseline: not applicable)

19. Combined GAP completion report highlighting benefits of improved road infrastructure, reduced time poverty, and lessons learned submitted upon project completion (2019 baseline: not applicable) EWCD = elderly–women–children–differently abled, GAP = gender action plan, MPWD = Maharashtra Public Works Department, PIU = project implementation unit, PMIS = project management information system. a EWCD-friendly road-safety features include geometric improvement, introduction of safety and crash barriers, drainage improvement, rigid pavement in urban areas to reduce likelihood of potholes, and proper pavement markings. b EWCD-friendly bus shelter features include ramps and proper lighting. Source: Asian Development Bank.

55. HIV and human trafficking. The PMU shall ensure that community awareness campaigns about HIV and human trafficking prevention will be carried out along the project road corridors by the resettlement implementation and community awareness NGOs or agencies in coordination with existing local programs. Moreover, the PMU shall ensure that the works contracts under the project incorporate provisions that require contractors to (i) carry out HIV 27

awareness programs for labor, and (ii) disseminate information at worksites on the risks of sexually transmitted diseases and HIV as part of health and safety measures for those employed during construction. Such contracts will also include clauses for termination in case of any breach of the stated provisions by the contractors. The social experts from the authority engineers will monitor the implementation.

56. Labor standards. The Government of Maharashtra and the PMU shall ensure that the works contracts under the project follow all applicable labor laws of the Government of India and the Government of Maharashtra and that these further include provisions to the effect that contractors will (i) follow and implement all statutory provisions on labor (including not employing or using children as labor, equal pay for equal work), health, safety, welfare, sanitation, and working conditions. Such contracts will also include clauses for termination in case of any breach of the stated provisions by the contractors. The authority engineers will monitor the implementation.

57. Road safety. The PMU shall ensure that community awareness campaigns on road safety will be carried out by the resettlement implementation NGOs (in coordination with the PMS consultant) along the corridors of the project roads. The social experts from the authority engineers will monitor the implementation.

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION

A. Project Design and Monitoring Framework

58. The design and monitoring framework (DMF) for the project is in Appendix A.

B. Monitoring

59. Project performance monitoring. The achievement of the project performance targets will be assessed against the output and outcome indicators as stipulated in the DMF. The MPWD, assisted by the PMS, will establish and implement a project performance management system within 3 months of loan effectiveness, in form and substance acceptable to ADB for use throughout the project period.

60. The MPWD, assisted by the PMS, within 3 months of loan effectiveness, will establish disaggregated baseline data for performance indicators to be used for monitoring the achievement of project implementation. It will conduct annual evaluation surveys for each project road, in accordance with the project performance management system, to evaluate the scope, implementation arrangements, progress, and achievement of project objectives.

61. Compliance monitoring. Compliance with covenants will be monitored through ADB’s project administration missions—including the project inception mission to discuss and confirm the timetable for compliance with the loan covenants; the project review missions to review the borrower’s compliance with particular loan covenants and, where there is any noncompliance or delay, discuss proposed remedial measures with the government; and the midterm review mission, if necessary, to review covenants to assess whether they are still relevant or need to be changed, or waived due to changing circumstances.

62. Safeguards monitoring. Implementation of the EMP, resettlement plans, and social development measures will be monitored internally by the designated PMU officers and ADB

safeguards staff. An independent expert party will assess the fairness and transparency of the direct purchase process.

63. Environmental safeguards monitoring. Monthly reports on the implementation of the mitigation measures onsite will be maintained by the contractor. Based on these records and fortnightly spot checks by the authority engineer environmental specialist, monitoring reports will be compiled on a quarterly basis. These quarterly monitoring reports will be submitted for review and approval by the PMU with the support of the PMS. The PMS will consolidate the quarterly monitoring reports into semiannual environmental monitoring reports and submit these to the PMU for review and approval and further forward these to ADB within 3 calendar months from the end of the respective reporting period for disclosure on the ADB website. If there are any changes in the design or alignment or unanticipated environmental impacts for any road, the respective EMP will be updated to account for any additional or new environmental impacts. Further need for revising the initial environment examination report during project construction will also be reviewed and confirmed in discussion with ADB.

64. Social safeguard monitoring. The safeguards focal officers of the PMU will be responsible for overall monitoring and evaluation of the project progress for social development and safeguards. Social development and safeguards will also be monitored by a social development specialist from ADB’s South Asia Department.

65. Internal monitoring. An internal monitoring system will be established by the PMU and the resettlement implementation NGOs with the support of the authority engineer social development and gender specialist. A set of processes, outcomes, and baseline indicators will be developed by the PMS, and the baseline gathered at the onset of resettlement plan implementation. These indicators will include assessing whether resettlement goals have been achieved, whether livelihood and living standards have been restored, and provide recommendations for improvement. Monitoring will also ensure the recording of affected persons’ views on resettlement issues, such as the displaced peoples’ understanding of entitlement policies, options, and alternatives; site conditions; compensation valuation and disbursement; grievance redress procedures; and staff competencies. Moreover, the resettlement implementation NGOs will develop a system to manage land acquisition and resettlement data (records of compensation and disbursements) as well as to maintain records of consultations, grievances, and redress.

66. Third party monitoring. The PMU will recruit a third-party monitor to assess the fairness and transparency of the direct purchase process.

67. Gender and social dimensions monitoring. The PMU with support from the PMS will monitor GAP initiatives. The implementation NGOs and the PMS consultant will prepare monthly progress reports on GAP activities. The PMS and gender and/or social development experts will also provide inputs on the implementation of the GAP for the quarterly progress reports. GAP implementation progress will be reported every quarter, in accordance with the agreed GAP monitoring matrix and submitted to ADB as part of quarterly progress reports. The agreed GAP implementation monitoring matrix is in Appendix F. Sex-disaggregated data should be collected and reported in the semi-annual social monitoring reports.

68. Monitoring reports. Regular monitoring reports will be prepared and submitted to ADB within 3 calendar months from the end of the respective reporting period for disclosure. Table 14 provides more details on the required reports to be produced.

Table 14: Social Development Reporting Requirements Type of Report Content Frequency Responsibility Progress report Progress on land acquisition and resettlement Monthly Resettlement activities, progress on indicators, results, issues implementation NGO to affecting performance, constraints, variations submit to PMU from resettlement plans (if any) and reason for the same, and corrections recommended Social monitoring Progress on land acquisition and resettlement Semi-annually PMU to submit to ADB report activities, indicators, variations (if any) with explanation and outcome, recommended corrective actions

Progress on the implementation of community awareness activities on HIV, human trafficking, and road safety, and reporting on gender Third party Assessment of the fairness and transparency of As necessary Independent monitoring monitor of direct the direct purchase process and concerned team to submit to PMU; purchase owners’ satisfaction with the process PMU to submit to ADB Resettlement Overall narrative of the land acquisition and Once PMU to submit to ADB completion resettlement process, outputs, and outcomes of report indicators from baseline, key variations/changes, lessons learned ADB = Asian Development Bank, NGO = nongovernment organization, PMU = project management unit.

Note: 1The table lists all the reports related to the implementation of resettlement activities—even internal reports already included in the terms of reference of the resettlement plan implementing NGO or agency or external monitor. The list is not exclusive to the safeguards reports required to be disclosed as per the ADB Safeguard Policy Statement. Source: Asian Development Bank.

C. Evaluation

69. An ADB inception mission will be fielded within 3 months after the loan and project agreements for the project are declared effective; thereafter, regular reviews will follow at least annually. As necessary, special loan administration missions and a midterm review mission will be fielded, under which any changes in scope or implementation arrangement may be required to ensure the achievement of project objectives. Within 6 months of physical completion of the project, the MPWD will submit a project completion report to ADB.15

D. Reporting

70. The MPWD will provide ADB with (i) quarterly progress reports in a format consistent with ADB’s project performance reporting system, no later than 45 days after the end of each quarter. The quarterly progress reports should include the financial and disbursement report, variance analysis of physical and financial progress, details of utilization of funds and reconciliation with the ADB Loan Financial Information System (LFIS); (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator’s performance targets, (b) key implementation issues and solutions, (c) updated procurement plan, and (d) updated implementation plan for the next 12 months; and (iii) a project completion report within 6 months of physical completion of the project. To ensure that projects will continue to be both viable and sustainable, project accounts and the executing agency audited financial statement, together with the associated auditor’s report, should be adequately reviewed.

15 Project completion report format is available at http://www.adb.org/Consulting/consultants-toolkits/PCR-Public- Sector-Landscape.rar.

E. Stakeholder Communication Strategy

71. The project will follow ADB’s standard consultation and disclosure requirements and provide relevant information, including information from the safeguard documents, in a timely manner, in an accessible place, and in a form and languages understandable to all affected people and other stakeholders. If the affected people are illiterate, other appropriate communication methods must be used, such as direct verbal communications through one-on- one or other meetings, and grievance redress meetings. In addition, with the support of the resettlement implementation NGOs, the PMU will distribute leaflets outlining key project impacts and entitlements to affected persons, post the contact information about the grievance redress committee, conduct information sessions at the outset of project implementation, and follow up with consultation meetings to update road residents of civil work progress throughout the life of the project.

72. Salient information regarding the project, including scope, general progress status, beneficiaries, invitation for bid, and consultant recruitment notices, will be provided to the public. The information will be made available by the MPWD. The safeguard documents, i.e., initial environmental examination reports, including the EMP and the resettlement plans, and environmental and social monitoring reports, are posted on the ADB website.

73. Various information regarding the project—including scope, general progress status, beneficiaries, invitation for bids, and consultant recruitment notices—will be provided to the general public. The information will be made available and updated through the official MPWD website and ADB. ADB’s communication strategy is summarized in Table 15.

Table 15: Project Communication Strategy Means of Responsible Project Documents Communication Party Frequency Audience Project data sheet ADB website ADB Initial PDS no later than 30 General public calendar days from concept approval; quarterly updates afterward Design and monitoring ADB website ADB Draft DMF after fact-finding General public framework mission Initial environmental ADB website ADB Post fact-finding mission General public, examination report MPWD website PMU project-affected people in particular Resettlement plans ADB website ADB Post fact-finding mission General public, MPWD website PMU project-affected Panchayat offices people in particular Summary Poverty ADB website ADB Post fact-finding mission General public, Reduction and Social project-affected Strategy people in particular Legal agreements ADB website ADB No later than 14 days from General public Board approval of the project Project administration ADB website ADB After loan negotiations General public manual Social monitoring ADB website ADB Semi-annually General public, reports project-affected people in particular Environment ADB website ADB Semi-annually General public, monitoring report project-affected people in particular ADB = Asian Development Bank, DMF = design and monitoring framework, MPWD = Maharashtra Public Works 31

Department, PDS = project data sheet, PMU = project management unit. Source: Asian Development Bank.

X. ANTICORRUPTION POLICY

74. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the project.16 All contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the executing agency and all project contractors, suppliers, consultants, and other service providers. Individuals and/or entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-financed activity and may not be awarded any contracts under the project.17

75. To support these efforts, relevant provisions are included in the loan agreement and the bidding documents for the project.

XI. ACCOUNTABILITY MECHANISM

76. People who are, or may in the future be, adversely affected by the project may submit complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice, and seek a resolution of their problems, as well as report alleged violations of ADB’s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected people should make an effort in good faith to solve their problems by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.18

XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL

77. All revisions and/or updates during the course of implementation should be retained in this section to provide a chronological history of changes to implemented arrangements recorded in the PAM, including revision to contract awards and disbursement s-curves.

16 Anticorruption Policy: http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf. 17 ADB’s Integrity Office website: http://www.adb.org/integrity/unit.asp. 18 Accountability Mechanism: http://www.adb.org/Accountability-Mechanism/default.asp.

Appendix A to PAM

DESIGN AND MONITORING FRAMEWORK

Impact the Project is Aligned with Connectivity between industrial areas, agricultural areas, administrative headquarters, and economic centers of Maharashtra enhanced (Road Development Plan 2001–2021)a

Data Sources and Performance Indicators with Reporting Results Chain Targets and Baselines Mechanisms Risks Outcome By 2025: Transport accessibility, a. Average daily vehicle-km a–e. Post- Significant efficiency, sustainability traveled on project roads in the implementation downturn in the and safety of the CRN in first full year of operation increased surveys endorsed by state economy Maharashtra improved to 3.5 million average vehicle-km MPWD may reduce the per day (2019 baseline: 2.9 million traffic on project average vehicle-km per day) roads. b. Average travel time on project roads reduced by at least 15% for motorized transport (2019 baseline: 1.8 minutes per km for motorized transport) c. Vehicle operating cost (economic) on project roads reduced by 10% for both cars and heavy vehicles (2019 baseline: ₹7.13 per km for cars and ₹23.95 per km for heavy vehicles). d. At least 450 km of state roads maintained at roughness index of 2,000 India Road Congress standard (2019 baseline: Roughness index of 3,000 India Road Congress standard) e. Average number of fatalities per year in road accidents on the project roads reduced by at least 5% (2019 baseline: 29 fatalities)

Outputs By 2024: 1a–c. Progress Increase in 1. State highways and 1a. About 25 km of major district reports endorsed by prices of major district roads of the roads and 425 km of state MPWD construction CRN upgraded and highways upgraded with climate materials maintained change adaptation features (2019 beyond baseline: 0) (TI 1.3.1) projections may 1b. Roads maintenance affect the total commenced using 5-year length of roads performance-based maintenance to be contracts for 450 km of roads constructed. (2019 baseline: Not applicable)

33 Appendix A to PAM

Data Sources and Performance Indicators with Reporting Results Chain Targets and Baselines Mechanisms Risks 1c. Road safety features friendly to elderly people, women, children, and people with disabilities installed at 50 appropriate locationsb (2019 baseline: 0) (TI 2.4.1) 2. Capacity in road safety By 2024: Insufficient and maintenance 2a. Maintenance planning 2a. Annual funding for road increased methodology for the project roads maintenance maintenance and other MPWD CRN roads program of MPWD reduces developed and adopted project’s

(2019 baseline: Not applicable) sustainability.

2b. Systemized approach for road 2b. Post- safety audits and engineering implementation interventions in road designs in progress report MPWD established and piloted for endorsed by MPWD 200km of state highways

(2019 baseline: Not applicable) 2c–e. Post- 2c. At least 100 eligible MPWD implementation project staff, including all women surveys by trainer or project staff, reported increased subject-matter knowledge in climate change and expert, endorsed by disaster resilient features MPWD applicable to road design (2019 baseline: Not applicable). (TI 2.5.2) 2d. At least 50 eligible MPWD project staff, including all women project staff, reported increased knowledge in technical capacity on road safety auditing (2019 baseline: Not applicable) 2e. At least 80% contractors’ personnel, including all women personnel, report increased awareness in road safety (2019 baseline: Not applicable)

Key Activities with Milestones 1. State highways and major district roads of the core road network upgraded and maintained 1.1 Procure civil works by Q1 2020 and complete construction by Q4 2023. 1.2 Award and mobilize authority engineer by Q1 2020. 2. Capacity in road safety and maintenance increased 2.1 Recruit consultants for road asset management program by Q3 2020. 2.2 Complete training for road safety and sexually transmitted infections by Q4 2020. 2.3 Deliver training on climate change and disaster-resilient features applicable to road design by Q1 2021. 2.4 Complete and pilot road safety audits by Q1 2023. 2.5 Deliver capacity building in road safety auditing by Q2 2023. 2.6 Commence road maintenance activities by Q4 2023. Inputs Appendix A to PAM 34

Asian Development Bank: $177 million (loan) Government: $78.99 million Assumptions for Partner Financing Not applicable CRN = core road network, km = kilometer, MPWD = Maharashtra Public Works Department, Q = quarter, TI = tracking indicator. Note: Contribution to the ADB Results Framework: TI 1.3.1: Infrastructure assets established or improved (25 km of major district roads and 425 km of state highways) TI 2.4.1: Time-saving or gender-responsive infrastructure assets and/or services established or improved (50 locations) TI 2.5.2: Gender-inclusive climate and disaster resilience capacity development initiatives implemented (20 women) a Government of Maharashtra, Public Works Department. 2012. Road Development Plan 2001–2021. Mumbai. b Road safety features include geometric improvements, safety and crash barriers, improved drainage, pavement markings, well-marked crossings, safety signage, and pedestrian walkways. Source: Asian Development Bank.

Appendix B to PAM PROCUREMENT PLAN

Basic Data Project Name: Maharashtra State Road Improvement Project Project Number: 52298-001 Approval Number: Country: India Executing Government of Maharashtra, Public Works Agency: Department Project Procurement Classification: Category A Implementing Agency: Project Management Unit in the Public Works Department Project Procurement Risk: Low Project Financing Amount: $253,970,000 Project Closing Date: 30 June 2025 ADB Financing: $177,000,000 Cofinancing (ADB Administered): Non-ADB Financing: $76,970,000 Date of First Procurement Plan: 27 February 2019 Date of this Procurement Plan: 11 October 2019 Procurement Plan Duration (in months): 18 Advance Contracting: e-GP: Yes Yes https://mahatenders.gov.in

A. Methods, Review, and Procurement Plan

1. Except as the Asian Development Bank (ADB) may otherwise agree, the following methods shall apply to procurement of goods, works, and consulting services.

Procurement of Goods and Works Method Comments Open Competitive Bidding (OCB) for Goods For contract $100,000 and above Open Competitive Bidding (OCB) for Works No comments

Consulting Services Method Comments Quality- and Cost-Based Selection for Consulting Firm 90:10 Competitive for Individual Consultant No comments

B. Lists of Active Procurement Packages (Contracts)

2. The following table lists goods, works, and consulting services contracts for which the procurement activity is either ongoing or expected to commence within the procurement plan duration.

Goods and Works Advertisement Package General Estimated Procurement Bidding Review Date Comments Number Description Value ($) Method Procedure (quarter/year) EPC 1 Improvement of 11,420,000.00 OCB Prior 1S2E Q2 / 2019 Advertising: National NH-66 to Kante Tulsani Devrukh No. of Contracts: 1 Road (SH 174) (0/00 to 23/500) Prequalification of and Chafe Bidders: No Ganpatipule Road (MDR 55) Domestic Preference (0/00 to 10/350) Applicable: No in Ratnagiri District Advance Contracting: Yes

Bidding Document: Large Works e-GP: Yes

Comments: Engineering, Procurement,

36 Appendix B to PAM

Construction Contract

EPC 2 Improvement of 14,570,000.00 OCB Prior 1S2E Q2 / 2019 Advertising: National Dabhole Shiposhi Korle No. of Contracts: 1 Vatul Road (SH 175) (0/00 to Prequalification of 28/100) and Bidders: No Hatiwale Jaitapur Road Domestic Preference (SH 170) (0/00 Applicable: No to 23/700) in Ratnagiri District Advance Contracting: Yes

Bidding Document: Large Works

e-GP: Yes