ReportNo. 1320a-IN FILE COPY India Appraisalof the MadrasUrban Public Disclosure Authorized DevelopmentProject February15, 1977 Urban ProjectsDepartment FOR OFFICIAL USE ONLY Public Disclosure Authorized U Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank This document hasa restricteddistribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosedwithout World Bankauthorization. CURRENCY EQUIVALENTS (As of May 15, 1976) Currency Unit = Rupees (Rs) US$1.00 = Rs 9.0 Rs 1.00 5= US$0.11 Rs 1 lakh (10 = US$11,110 Rs 1 crore (10 ) = US$1.11 million MEASURES AND EQUIVALENTS 1 meter (mt = 39.37 inches (in) or 3.28 ft 1 square meter (m3 ) 10.8 square feet (sq ft) 1 cubic meter (m ) = 35.3 cubic feet (cu ft) 1 kilometer (km} = 0.62 mile (mi) 1 square kilometer (km ) 0.386 sq miles 1 hectare (ha) = 2.47 acres (ac) or 10,000 sq meters 1 liter (1) = 1.057 quarts liquid or 0.26 US gallon (gal) or 0.908 quart dry (qt) 1 liter per capita per day (lcd) 0.26 US gallon per capita per day (gcd) I cubic meter 3 per second (m /sec) = 86.4 million liters per day or 22 million US gallons per day 1 million liters per day (mld) = 0.01 cubic meters per second PRINCIPAL ABBREVIATIONS AND ACRONYMS DHRW Department of Highways and Rural Works DSW Department of Social Welfare EWS Economically Weaker Sections GOI Government of India GTN Government of Tamil Nadu LIG Lower Income Group MC Madras Corporation MIG Middle Income Group MMA Madras Metropolitan Area MMDA Madras Metropolitan Development Authority MUA Madras Urban Agglomeration PTC Pallavan Transport Corporation SIDCO Small Industries Development Corporation SISI Small Industry Services Institute TIIC Tamil Nadu Industrial Investment Corporation TNHB Tamil Nadu Housing Board TNHDC Tamil Nadu Handicrafts Development Corporation TNSCB Tamil Nadu Slum Clearance Board TWAD Tamil Nadu Water Supply and Drainage Board UNDP United Nations Development Program WHO World Health Organization FOR OFFICIAL USE ONLY INDIA APPRAISAL OF MADRASURBAN DEVELOPMENTPROJECT Table of Contents Page No. SUMMARY AND CONCLUSIONS ......................... i - iii I. INTRODUCTION ....... .............................. 1 II. BACKGROUND . .............. e............s.*. 1 A. Urban Development in India and Tamil Nadu 1.... B. Madras Metropolitan Area ............. .. 2 C. Institutions .............. 5 III. THE PROJECT ....................... 6 A. Objectives .................................. 6 B. Main Features ......................... 6 C. Detailed Description. 8 IV. PROJECT COSTS, EXECUTION AND FINANCING . .14 A. Cost Estimates . .14 B. Execution. 16 C. Financing . .18 D. Cost Recovery . .20 E. Procurement and Disbursement . .24 F. Accounts and Audit .......... 25 G. Supervision ..... 25 V. ORGANIZATION, MANAGEMENT AND FINANCE .............. 25 A. Madras Metropolitan Development Authority .... 25 B. Madras Corporation ........................... 26 C. Pallavan Transport Corporation .... .......... 28 D. Other Executing Agencies ..... ............... 29 E. Long-Term Improvement Programs for Madras' Poor 29 VI. JUSTIFICATION ................... 30 VII. RECOMMENDATIONS ...... ............................ 32 This report is based on the findings of Messrs. S. Sandstrom, D. Cook, I. Sud, and A. Van Nimmen (IDA), and A. Bertaud, J. Cooper, and K. Huddart (consultants) who visited Madras in May 1976 to appraise the project. This document has a restricted distributionand maybe used by recipientsonly in the performance of their officialduties. Its contentsmay not otherwisebe disclosedwithout World Bank authorization. ANNEXES 1. Profile of Madras Metropolitan Area 2. Sites and Services 3. Slum Improvement 4. Small-Scale Business 5. Maternal and Child Health 6. Water Supply and Sewerage 7. Road and Traffic Improvements 8. Bus Transport 9. Technical Assistance 10. Key Implementation Actions 11. Schedule of Estimated Disbursements 12. Madras Corporation: Organization and Finance 13. Madras Metropolitan Development Authority: Objectives, Work Program, Organization and Staffing CHARTS 1. Madras Household Income Distribution 2. Implementation Schedule (Physical Elements) 3. Present Organization of Madras Metropolitan Development Authority 4. Proposed Organization of Madras Metropolitan Development Authority 5. Organization of Madras Corporation 6. Organization of Pallavan Transport Corporation 7. Organization of Tamil Nadu Housing Board 8. Organization of Tamil Nadu Slum Clearance Board 9. Organization of Small Industries Development Corporation 10. Organization of Department of Highways and Rural Works 11. Project Impact on the Growth of Madras' Slum Population SKETCHES 1. Plot and Core Options 2. Possible Evolution of Plots A and B 3. Plot C Cluster 4. Typical Improvement of Low-Density Slum 5. Typical Improvement of High-Density Slum PHOTOGRAPHS 1. Typical Slum Conditions (1) 2. Typical Slum Conditions (2) MAPS 1. Madras Metropolitan Area and the Location of Major Project Components (IBRD 12401) 2. Road and Traffic Improvement Component (IBRD 12402) 3. Arumbakkam Sites and Services Component (IBRD 12403) 4. Villivakkam Sites and Services Component (IBRD 12404) 5. Kodungaiyur Sites and Services Component (IBRD 12405) 6. Existing Water Supply Sources for Madras (IBRD 12407) 7. Water Supply and Sewerage Component (IBRD 12408) INDIA APPRAISAL OF MADRASURBAN DEVELOPMENTPROJECT SUMMARYAND CONCLUSIONS i. IDA assistance is sought for an urban development project in Madras. Its main objective is to develop and promote low-cost solutions to Madras' problems in the sectors of shelter, employment, water supply, sewerage and transport, and particularly to make the investments responsive to the needs of the urban poor. To ensure replicability, the project will introduce full cost recovery for key investments for which costs have traditionally not been fully recovered. The project will also strengthen metropolitan planning and capital programming and budgeting. The investments proposed are aimed to directly benefit the poorer segments of the population in the Madras metropolitan area. ii. Madras metroplitan area is characterized by low per capita incomes (US$95 in 1970-71), a large and rapidly increasing population (4.4 million, growing at 5.0% per annum), and serious deficiencies in important urban serv- ices with levels of services deteriorating. Per capita water supply averages less than 70 liters per day (lcd) but many domestic consumers, particularly ip the poorest areas, receive less than 40 lcd. Comparable average figures for Bombay and Calcutta are 138 lcd and 145 lcd, respectively. The critical water supply situation was highlighted during the 1974/75 drought, when supplies dwindled to less than 10 lcd (water was rationed to 20 lcd once every three days). In transport, pedestrians and bicyclists account for close to half of all person trips but facilities for these low-cost transport modes have been neglected, and road investments have benefitted mainly motor vehicle traffic. iii. The provision of serviced land and housing has not kept up with the need, particularly of low-income groups. Existing Government of Tamil Nadu programs in the housing sector are primarily aimed at middle-income groups. The slum population of Madras has consequently been increasing more rapidly than the total population and now accounts for more than 30% of the total, or about 1.2 million persons. Programs to alleviate the plight of the slum population have so far emphasized slum clearance and resettlement at high cost, rather than slum improvement. While the slum population is increasing by some 14,000 households annually, only about 3,000 resettlement units are being constructed each year. iv. The project would provide: (a) sites and services, with about 13,500 serviced residential plots and about 21 ha of serviced land for small industry and commercial uses; (b) infrastructure improvements in 85 slums covering about 185 ha with a population of 23,000 households, plus provision of open plots in and around the slums for an additional 7,500 households; (c) work sheds, equipment, training and finance to generate about 4,000 jobs in small industry and about 5,000 jobs in cottage industry in the sites and services and slum improvement areas; (d) training, equipment, and sheds to provide supplementary nutrition, health examinations, immunization, health and nutrition education, and functional literacy training in the sites and services and slum improvement areas; (e) rehabilitation of existing water supply and sewerage systems; (f) road and traffic improvements with emphasis on footpaths and cycle tracks; (g) replacement of 285 buses and construction of bus depots, bus terminals and passenger shelters; and (h) technical assist- ance, mainly to the Madras Metropolitan Development Authority. v. Related key policy measures include: (a) the provision of security of tenure (freehold titles) to the inhabitants of the improved slums, and cost recovery through the sale of the land on a hire-purchase basis (Govern- ment of Tamil Nadu orders to this effect were issued in August 1976); (b) the imposition of a ceiling on expenditures for slum clearance; (c) the establishment of revolving funds for financing of future sites and services and slum improvement programs from all cost recoveries from such schemes under the proposed project; (d) the establishment of a permanent unit in the M4adras Corporation to carry out improvement and construction of footpaths and cycle tracks; (e) raising