Document of The World Bank
FOR OFFICIAL USE ONLY Public Disclosure Authorized
Report No: 30085-IN
PROJECT APPRAISAL DOCUMENT
ON A Public Disclosure Authorized
PROPOSED LOAN
IN THE AMOUNT OF US$620 MILLION
TO THE
GOVERNMENT OF INDIA
FOR THE
LUCKNOW-MUZAFFARPURNATIONAL HIGHWAY PROJECT Public Disclosure Authorized
November 29,2004
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World
Public Disclosure Authorized Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective November 29,2004) Currency Unit = INR INR 1.00 = US$ 0.022 US$ 1.00 = INR45.0 1 Lakh = 100,000 1 Crore = 10,000,000 FISCAL YEAR April 1 - March31
ABBREVIATIONS AND ACRONYMS
ABP Allahabad Bypass Project IS0 Intemational Standards Organisation ADB Asian Development Bank LMNHP Lucknow-Muzaffarpur National Highway Project BOT Build, Operate and Transfer MIS Management Information System BOQ Bill ofQuantity MOEF Ministry ofEnvironment and Forests CAS Country Assistance Strategy MORTH Ministry ofRoad Transport and Highways CAG Comptroller and Auditor General MTR Mid Term Review CRF Central Road Fund NGO NonGovernmental Organization CWIP Cost ofWork in Progress NHAI National Highways Authority ofIndia DEA Department ofEconomic Affairs of NHDP National Highway Development Government ofIndia Project DLC District Level Committee NPV Net Present Value EA Environmental Assessment O&M Operation and Maintenance EMP Environmental Management Plan PAFIT Project Affected FamilyiPerson EOP End ofProject PCU Passenger Car Units ERR Economic Rate ofRetum PFMS Project Financial Management System ESW Economic and Sector Work PIU Project Implementation Unit FBS Fixed Budget Selection RAP Resettlement Action Plan FMR Financial Monitoring Report RIS Road Information System FMS Financial Management System ROB Road Over Bridge (for railway) GO1 Government ofIndia ROW Right ofWay GQ Golden Quadrilateral R&R Resettlement and Rehabilitation GM General Manager SIA Social Impact Assessment GRC Grievance Redressal Committee SOE Statement ofExpenditure GTRIP Grand Trunk Road Improvement Project SPCB State Pollution Control Board ha Hectare SPV Special Purpose Vehicle HDM Highway Design and Maintenance Model STD Sexually Transmitted Disease ICB Intemational Competitive Bidding TNHP Third National Highway Project ICR Implementation Completion Report UP Uttar Pradesh IFY Indian Fiscal Year voc Vehicle Operating Cost
Vice President: Praful C. Pate1 Country Director: Michael F. Carter Sector Manager: Guang Z. Chen Task Team Leader: Piers A. Vickers FOR OFFICIAL USE ONLY
INDIA Lucknow-Muzaffarpur National Highway Project
CONTENTS Page A . STRATEGIC CONTEXT AND RATIONALE ...... 1 1. Country and sector issues...... 1 2 . Rationale for Bank involvement ...... 1 3 . Higher level objectives to which the project contributes ...... 2 B. PROJECT DESCRTPTION...... 3 1. Lending instrument ...... 3 2 . Program objective and phases ...... 3 3 . Project development objective and key indicators...... 4 4 . Project components ...... 4 5 . Lessons learned and reflected in the project design ...... 5 6 . Altematives considered and reasons for rejection ...... 5 C . IMPLEMENTATION...... 6 1. Partnership arrangements ...... 6 2 . Institutional and implementation arrangements ...... 6
3 . Monitoring and evaluation (M&E) ofoutcomes/results A ...... 7 * .. 4 . Sustainability...... 8 5 . Critical risks and possible controversial aspects ...... 9 6 . Loadcredit conditions and covenants ...... 10 D. APPRAISAL SUMMARY ...... 10 1. Economic and financial analyses ...... 10 2 . Technical ...... 11 3 . Fiduciary ...... 12 4 . Social...... 12 5 . Environment ...... 14 6 . Safeguard policies ...... 15 7 . Policy Exceptions and Readiness ...... 15
~ This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization. Annex 1: Country and Sector or Program Background ...... 16 Annex 2: Major Related Projects Financed by the Bank andor other Agencies ...... 19 Annex 3 : Results Framework and Monitoring...... 20 Annex 4: Detailed Project Description ...... 23 Annex 5: Project Costs ...... 24 Annex 6: Implementation Arrangements ...... 25 Annex 7: Financial Management and Disbursement Arrangements ...... 28 Annex 8: Procurement ...... 33 Annex 9: Economic and Financial Analysis ...... 37 Annex 10: Safeguard Policy Issues...... 43 Annex 11 : Project Preparation and Supervision ...... 48 Annex 12: Documents in the Project File ...... 49 Annex 13: Statement of Loans and Credits ...... 50 Annex 14: Country at a Glance...... 54
MAP@) IBRD No. 33344 INDIA
LUCKNOW-MUZAFFARPUR NATIONAL HIGHWAY PROJECT
PROJECT APPRAISAL DOCUMENT
SOUTH ASIA
SASE1
Date: November 29,2004 Team Leader: Piers A. Vickers Country Director: Michael F. Carter Sectors: Roads and highways (100%) Sector Manager: Guang Z. Chen Themes: Infrastructure services for private sector development (P) Project ID: PO77856 Environmental screening category: Full Assessment Lending Instrument: Specific Investment Loan Safeguard screening category: Significant
[XI Loan [ 3 Credit [ ] Grant [ ] Guarantee [ ] Other:
RECONSTRUCTION AND DEVELOPMENT Total: 582.78 223.19 805.97
Borrower: GOVERNMENT OF INDIA
1 Responsible Agency: NATIONAL HIGHWAYS AUTHORITY OF INDIA
Mr. B. P. Kukrety, Chief General Manager (EW) National Highways Authority of India NHAI, Plot No. G5&G6 Sector 10, Dwarka New Delhi, India
Tel: 91 11 2509 3527 Fax: 91 11 2508 0360 bpkukretyanhai .org Expected effectiveness date: May 3 1, 2005 Expected closing date: June 30,2010
Does the project depart from the CAS in content or other significant respects? [ ]Yes [XINO Re$ PAD A.3 Does the project require any exceptions from Bank policies? Re$ PAD D. 7 [ ]Yes [XINO Have these been approved by Bank management? [ ]Yes [ IN0 Is approval for any policy exception sought from the Board? [ ]Yes [ IN0 Does the project include any critical risks rated “substantial” or “high”? [XIYes []No Re$ PAD C.5 Does the project meet the Regional criteria for readiness for implementation? [XIYes [ ]No Re$ PAD D. 7 Project development objective Re$ PAD B.2, Technical Annex 3
The project development objective is for road users to benefit from an improved journey between Lucknow and Muzaffarpur.
Project description [one-sentence summary of each component] Re$ PAD B.3.a, Technical Annex 4
Upgrading of a 483 km section ofNational Highway No. 28 between Lucknow and Muzaffarpur, including supervision consultancy, environmental and social management measures.
Which safeguard policies are triggered, if any? Re$ PAD D.6, Technical Annex 10
Environmental Assessment Involuntary Resettlement Cultural Property
Significant, non-standard conditions, if any, for:
Board presentation: Nil.
Loan effectiveness: Nil
Covenants applicable to project implementation: See section C.6 A. STRATEGIC CONTEXT AND RATIONALE 1. Country and sector issues By the late 199O’s, lack of investment and inadequate management coupled with sharply increasing rates of motorization had resulted in high levels of congestion, slow speeds, high vehicle operating costs and a bad safety record on the Indian national highways (NH) network. Recognizing that the poor performance ofthis network was becoming a major drag on growth, the Government of India (GOI) made investment and reform ofthe NH system an important foundation oftheir overall strategy to invigorate the economy and integrate the country. In 1998, the GO1 initiated a National Highway Development Project (NHDP) to strengthen and widen to four lane standard the core national highway network of about 14,300 km in a phased manner over ten years. The total cost for the NHDP is estimated to be US$ 14 billion. Ofthis, about US$ 5.2 billion has been spent so far, with 4,200 km offour laning completed, 3,300 km ongoing and the balance being procured. The program is being financed through a mixture ofincreased user charges in the form of a dedicated fuel cess and tolls plus debt from domestic and international development banks as well as private investment, the latter limited to date to a few financially viable sections. A number ofactions have been taken to facilitate the delivery ofthe NHDP. In 2000, a Central Road Fund Act was passed that generates additional revenue through applying a new levy on motor fuels dedicated for road development including on national highways. The National Highways Act was also amended to further facilitate private financing ofhighways. Institutional reform has also been a part ofthe GOI’s sector strategy. Before 1998, nearly all NH responsibilities, from policy and planning to construction and maintenance, lay with the Ministry ofRoad Transport and Highways (MORTH). However, the GO1 decided to separate policy from implementation for the NHDP assigning the latter to the National Highways Authority of India (NHAI), a statutory body established under the National Highways Authority Act of 1988l. This represented a major step towards more commercial management ofthe network. NHAI’s mandate is to develop, maintain and manage those national highways entrusted to it by the GOI. NHAI has managed to maintain a lean organization by outsourcing design, supervision and construction activities to the private sector. As stretches ofthe NHDP are completed, NHAI is now starting to turn towards the task ofbetter management ofthe operation and maintenance of the upgraded NH network. In early 2004, the GO1 announced that a further 10,000 km of NH is to be entrusted to NHAI for development. Annex 1 provides further background details on the highways sector and NHAI. 2. Rationale for Bank involvement The proposed project is the fourth Bank loan that supports the delivery ofthe NHDP. The rationale for Bank involvement is that it can provide: (i)a means for bringing global knowledge to help GO1 improve the institutional, policy, financing and implementation environment in the sector; (ii)a comprehensive perspective in integrating economic, social, and environmental analysis in project design; (iii)convening powers to help facilitate the exchange ofinformation between stakeholders from central government, states and the private sector; and (iv) long term financing at competitive interest rates to help bridge the sector funding gap and thereby delay the imposition ofhigher user chargindtaxes necessary to build and sustain the
Available at littp://www.idiai. orgiacl 19 88.htni
1 network in the long run. Many ofthe procedures which have been put in place as part ofBank funded projects have now been adopted by NHAI for all ofits projects; for example in the areas of procurement, environmental and social impact management, construction supervision and dispute resolution practices. Given the long term nature ofthe investment under the NHDP, it is important that the Bank demonstrate its ongoing commitment to the GOI’s sector strategy by continuing to support what the GO1 clearly considers to be one ofthe foundations for growth. The Asian Development Bank (ADB) also has a significant program ofsupport to NHAI which is consistent with the support provided by the Bank. Annex 2 provides a list of completed and ongoing Bank and other donor projects in the highways sector. 3. Higher level objectives to which the project contributes The project is consistent with the major policy goals for the transport sector as set down in the Tenth Plan covering 2002-2007 including: (i)meeting the transport demand generated by a higher rate ofGDP growth; (ii)ensuring transport development is balanced, with special attention to remote regions such as the North-East; (iii)capacity augmentation, quality and productivity improvements through technology upgrading; and (iv) greater emphasis on safety, energy efficiency, environmental conservation and managing social impacts2. The project is also consistent with the Bank Group’s Country Strategy for India discussed by the Executive Directors on 26 August, 2004. This identifies highway bottlenecks as one of the major constraints to poverty reduction and private sector-led growth and states the Bank’s intention to remain fully engaged in supporting GO1 efforts in the highways sector, both in terms offunding necessary investment as well as facilitating sector management and financing reforms. The loan size is about 20% larger than stated in the Country Strategy due to higher unit costs ofconstruction arising from more detailed estimation during appraisal, design changes and raw material inflation since the project concept review. The project road passes through some ofthe poorest districts ofBihar and Uttar Pradesh (UP),and forms a part of the national trunk road linking the remote, less developed north-eastern states ofIndia. By decreasing transport costs, the competitiveness of exported goods from the region is expected to improve. In addition to facilitating inter-city travel and transport ofgoods, proximity to the highway is expected to have a significant positive influence on many aspects of the socio-economic well being of the rural population in the adjoining areas. A recent baseline poverty impact study commissioned by the NHAI was conducted using a sample of3,200 households across 200 villages in UP, Bihar and Jharkhand, which are within 5 km from National Highway Number 23. This revealed a strong correlation between household’s proximity to the national highway and various social and economic indicators. For example, proximity to the highway decreases the chances ofa household being poor by 17 percent, increases its access to work by 32 percent and increases overall school enrolment by 40 percent. Thus, investment in highways can be expected to provide significant secondary effects on poverty alleviation in adjacent areas as well as the primary effects ofreducing the cost and time ofmoving goods and people between the major population centers.
2 See http:, ~www.plaii~iin~co~ii~~ssioll.nic.i~~~~l~ns/plan~~l/~v~y~/~Oth/voliinie2 ‘vZ-cli8 3 .pdf “Socio-economic Impact of National Highways on Rural Population”, Asian Institute of Transport Development for NHAI, 2003
2 B. PROJECT DESCRIPTION 1. Lending instrument A specific investment loan (SIL) has been chosen. The instrument is appropriate because it meets the Borrower’s requirement of funding discrete sections ofhighway which have been pre-identified on a program basis. Bank funds can be made available in the most straightforward way as and when preparation is over and works are ready for tendering. The Borrower has chosen the financial terms ofthe Loan on the basis oftheir expectations of future exchange and interest rate changes. 2. Program objective and phases The National Highway Development Project (NHDP), being implemented by the National Highways Authority ofIndia (NHAI), has the long term objective of connecting the country together through an arterial network offour lane highways built to an international standard. The NHDP has two main phases.
0 Phase 1, the Golden Quadrilateral (GQ) of5,846 km that links the main metropolitan centers ofDelhi, Kolkata, Chennai and Mumbai, programmed for completion by the end of2004 at a cost ofabout US$ 5.3 billion, plus another about 1,100 km of connections to ports and other important roads.
0 Phase 2, the North-South Corridors and East-West Corridor (NS EW) of7,300 km that connects the four corners ofthe country from Assam to Gujarat and Kashmir to Tamil Nadu, programmed for completion by the end of2007 at a cost of about US$ 6.6 billion. The East West Corridor runs for 3,490 km from Silchar in Assam in the north east ofthe country to Porbander on the west coast in Gujarat. 147 km ofthis corridor has already been four- laned, 143 km is currently under implementation, and the balance is in various states of readiness for tendering. The corridor is proposed to be financed through ADB for about 1,100 km, World Bank for 483 km and the balance by the GO1 itself. Previous Bank loans that largely fund the NH-2, Delhi to Kolkata, section ofthe Golden Quadrilateral ofthe NHDP are:
0 Third National Highway Project (TNHP), US$ 516 million, Board in June 2000; Grand Trunk Road Improvement Project (GTRIP), US$589 million, Board in June 2001; and Allahabad Bypass Project (ABP), US$240 million, Board in September 2003. This project will finance the upgrading ofthe majority ofthe stretch ofNH 28 between Lucknow in Uttar Pradesh and Muzaffarpur in Bihar on the East-West Corridor. As such, it represents a repeat investment in the national highways sector to further build on earlier projects whose design and implementation have been proven to be generally satisfactory. All four projects have a similar development objective, performance indicators and implementation procedures. The design ofthis project, having a single component, is somewhat more simple than the earlier projects as it is able to take advantage ofthe broader array of activities funded under previous loans.
3 3. Project development objective and key indicators The project development objective is for road users to benefit from an improved journey between Lucknow and Muzaffarpur. The performance indicators and targets to measure the achievement ofthis development objective are, by the end ofproject (see Annex 3), for: (i) vehicle travel time along the project road to be reduced by at least 20 per cent; (ii) truck operating costs along the project road to be reduced by at least 10 per cent; (iii) number of fatal road accidents along the project road to be reduced by 10 per cent; and
(iv) user satisfaction with national highways in the region to be improved. 4. Project components The project has only one component ofhighways upgrading, the sub-components of which are given below. Existing Bank funded NHDP projects have three components each - highway upgrading, corridor management and institutional development4. The rationale for having a single component for this project is that the existing projects already provide sufficient funding, available until 2009, for the technical assistance and piloting of new road management approaches necessary to build capacity in this area. Highway upgrading. (see Annexes 4 and 5 for further details) This component contributes to removing the capacity constraints on the NH network by providing for the upgrading to 4-lane divided carriageway standard of483 km out ofthe total 5 13 km continuous stretch ofNH28 between Lucknow and Muzaffarpur. The primary target group is the road users, ofwhom about 65 percent are commercial, and the secondary target group is those living adjacent to the road. The Lucknow to Muzaffarpur stretch ofthe EW corridor can be divided into five homogenous sections: (i.)Lucknow-Ayodhya (126 km); (ii.)Ayodhya-Gorakhpur (117 km); (iii.) Gorakhpur-Gopalganj (106 km); (iv.) Gopalganj-Muzaffarpur (134 km), and (v.) Gorakhpur Bypass (30 km). For road sections (i)to (iv) inclusive, the project will finance: The upgrading ofthe 483 km section ofthe NH-28 highway to a four lane standard and associated environmental management actions procured in twelve packages through International Competitive Bidding (ICB); construction supervision by four teams ofinternationally recruited consultants; delivery ofentitlements under a Resettlement Action Plan to project affected people; and ancillary activities such as afforestation, monitoring and evaluation activities as well as road safety and HIV awareness programs. The construction ofthe Gorakhpur Bypass will be financed by the NHAI itself. This is a green-field site entailing higher unit costs. Its implementation timeframe and financing options are therefore different to the other four main sections making the bypass more amenable to a standalone project approach. However, as the Gorakhpur Bypass is an integral part ofthe stretch
GTRIP also has a Public Private Partnership component.
4 between Lucknow and Muzaffarpur, the preparation and implementation of environmental and social safeguard management have been and will be identical to the Bank financed sections. 5. Lessons learned and reflected in the project design The design ofthe project reflects experience gained on ongoing projects in Lndia (see Annex 2), recent Analytical and Advisory services provided by the Bank as well as relevant Implementation Completion Reports (ICRs) and an Operations Evaluation Department (OED) sector review from 2001. Some ongoing NHAI projects, both Bank and non Bank financed, have suffered from slow implementation due to delayed completion ofpre-construction activities and law and order problems. These constraints place a high premium on pre-construction readiness. The level of implementation readiness has been further raised for LMNHP (see Annex 6). Initiation ofthe land acquisition and RAP implementation process has been further brought forward with NGOs already mobilized nine months ahead ofthe expected time ofcontract award and a milestone approach, reflected in the bidding documents, adopted for site hand over. The package sizes have been decreased by about 20 percent in value in comparison with TNHP and GTRIP to increase competition and diversify the risk ofpoor contractor performance. Early mobilization of supervision consultants will also facilitate a focus on preparing and agreeing contractors’ construction programs, so that both parties are clear from the start on their respective obligations. The four supervision consultants teams also include skills and experiences in contract dispute resolution. NHAI is already managing a large number oftechnical assistance activities, funded both by the Bank and other multilaterals. This project does not include further technical assistance to allow space for NHAI senior management to focus on effectively completing ongoing studies and then implementing their various recommendations, for which resources are already available as required under existing Bank loans. Lessons have also been learnt on stronger integration ofHIV/AIDS concerns into highway projects. NHAI collaborates with the National AIDS Control Organization for technical advice and anti-AIDS material supplies. Learning from similar operational experience from Africa Region, this project will include an expanded preventive program to cover other high risk groups such as truckers and sex workers along the project links. It will also include additional road specific road safety awareness campaigns to help bring into effect the GOI’s strategy in this field. The ICR for the Second National Highway Project (1992-2002) emphasized the importance ofbetter project management arrangements, stricter pre-qualification for Joint Ventures to avoid sham arrangements, greater procurement and implementation readiness, improved safeguard management and quicker payment to contractors. These recommendations have been taken up in the detailed preparation ofthe project. Lastly, the 2001 OED sector review concluded that the Bank should focus on highways, especially the interstate system, and that while efforts should be made to encourage private funding, a substantial public fbnding program was justified. 6. Alternatives considered and reasons for rejection Public vs. private sectorfinancing. In taking the decision in the mid 1990’s to rely largely on public funding for the implementation ofthe NHDP, the GO1 took into account the following
5 factors: (i)the very large value ofthe investment to be made in a relatively short space oftime in a strategic national asset; (ii)the relatively high existing levels of taxation on the sector (about 15 percent ofall public revenue is derived from the road sector) such that the imposition of direct tolling was a sensitive issue with users; (iii)the lack ofsolid evidence demonstrating the benefits of private hnding ofroads where the concessionaire did not rely largely on direct tolls for their revenue; (iv) the relative inexperience ofthe concession industry in India; and (v) the possibility of deriving some economies ofscale by having centralized resource mobilization through the Central Road Fund and common standards in design and construction. These factors implied that the majority ofthe NHDP be publicly funded, although certain links have been, at least partly, privately financed (see Annex 9). Bank involvement in the NHDP has so far been restricted to the purely publicly financed portions ofthe network as NHAI preferred to focus Bank support here. However, the GO1 is looking to increase the level ofprivate funding for a third phase ofinvestment in 10,000 km ofNHs and the Bank is currently exploring ways with GO1 ofbest supporting this. Four-Zaning vs. expressway. According to the current levels oftraffic on the project road, 4- laning is considered to be more economically viable than a full access controlled expressway design. Traffic counts indicate that the daily traffic volumes for the four project sections range from 13,500 to 25,000 passenger car units5(PCU), estimated to grow at 7-8 percent per year for the foreseeable future. These are inadequate levels to justify any more than the four lane standards currently envisaged for the project. However, GO1 isjust starting the detailed planning process for making expressways on at least 2,000 km ofthe most busy routes, for which implementation may start in the 1lth Plan period spanning 2007-2012. National highways vs. state highways. To meet the future growth ofroad transport demand, additional capacity is required for both national and state highway networks. This project focuses on the national highways. However, the Bank also supports state highway projects in seven Indian states (Andhra Pradesh, Guj arat, Karnataka, Kerala, Mizoram, Uttar Pradesh, and Tamil Nadu). Encompassing only 2 percent ofthe total road network but carrying about 40 percent ofall road traffic, the national highways are a critical economic asset. On average, capacity augmentation for the national highways is expected to have a relatively more significant impact than for state highways on the improvement of India's overall investment climate.
C. IMPLEMENTATION 1. Partnership arrangements The proposed project is one section ofthe East West Corridor ofthe NHDP. The ADB is also providing about US$ 720 million to help hnd about 1,100 km ofthe corridor in Gujarat, Rajasthan, Madhya Pradesh, Uttar Pradesh and Assam. The Bank is coordinating its activities with ADB wherever applicable and the latter's policy reform agenda with NHAI as well as project implementation procedures are similar. 2. Institutional and implementation arrangements Following the arrangements under TNHP, GTRIP and ABP, the project has been prepared and will be implemented by NHAI with extensive outsourcing to the private sector and
1 car = 1 PCU, 1 truck (9 tomes) = 2.5 PCUs
6 close coordination with relevant agencies ofthe two States in which the project is to be implemented. The GO1 has fully delegated authority to the Board ofNHAI for all contract decisions on the NHDP. Within NHAI, the civil works under LMNHP will be the direct responsibility of a Chief General Manager for the eastern section ofthe EW corridor under the general guidance ofone ofthe NHAI Board Members (Technical). It will be managed in the field by three on-site Project Implementation Units (PIU) at Lucknow, Gorakhpur and Muzaffarpur. High-level State Project Coordination Committees in Uttar Pradesh and Bihar have been functioning for the past few years to coordinate with NHAI on matters relating to land acquisition, resettlement, utility shifting, tree cutting and re-plantation under the on-going projects. Responsibility for land acquisition, resettlement and financing ofall project-related costs will remain with NHAI. Annex 6 has more detail. Funds Flow. The Ministry ofRoad Transport and Highways (MORTH), the parent ministry for NHAI, sanctions money to NHAI for the project in its budget each year. Thereafter, funds flow from MORTH to NHAI quarterly in advance. Other than the initial authorized allocation to the Special Account, reimbursements from the Bank to NHAI occur only after project expenditures have been incurred. There have been no funds flow difficulties between MORTH and NHAI in the past. However, ongoing projects have experienced delays in NHAI claiming reimbursement (see section D3 and Annex 7). Accounting and Internal Control. NHAI has decentralized accounting arrangements. Its on- site project implementation units input data into a computerized Project Financial Management System (PFMS) and prepare monthly trial balances which are sent to headquarters. Accounts are prepared on an accrual basis and relevant accounting policies and statutory requirements are set out in a recently updated Financial Management Manual. All projects are supervised by independent supervision consultants. Contractors’ bills are first approved by supervision consultants, and then verified by NHAI technical and accounts staff before payments are made to contractors. Reimbursement claims from the Bank will be made at least quarterly, with one Finance Manager from the three field PIUs responsible for consolidating and submitting such claims for the project. Internal audit is outsourced to the private sector. Statutory audit is carried out by the Comptroller and Auditor General (CAG). 3. Monitoring and evaluation (M&E) of outcomes/results NHAI already operates a satisfactory Management Information System (MIS) for the NHDP as a whole, providing monthly reports to sector stakeholders, including the Bank, on physical and financial progress for all sections/contracts under the program. Much ofthis data is available on the web6.NHAI is also in the process ofhrther strengthening this MIS through hiring of additional staff into the MIS cell, investment in new software, hardware (including a Wide Area Network to be completed by mid 2006) and training, all ofwhich is partially being supported under existing Bank loans. For this project, the main onus for primary data collection lies with the supervision consultants, whose terms ofreference adequately reflect this requirement. Where additional costs for M&E are required (e.g. user satisfaction surveys, RAP impact assessment) these have been reflected in the project cost. The proposed indicators and targets are shown in Annex 3.
See www.nhai.org.
7 NHAI is also in the process ofobtaining data on the more strategic impacts ofthe NHDP including on direct poverty reduction, natural resource use, pollution and the economy at large. These efforts are being supported by the Bank under existing loans and will help quantify the broader development outcomes being derived from the GOI’s investment as well as the value of Bank’s lending into the NHDP. 4. Sustainability The NHDP was proposed by the Prime Minister’s Taskforce in 1998, and is GOI’s top priority infrastructure investment program. Both the GQ and the NS/EW projects have been approved by the GO1 Cabinet. A new fuel cess was put in place in 1998/99,32 percent ofwhich is allocated to the NHDP, the balance funding works on state highways and rural roads. This cess was raised by 50 percent in 2002 as absorption capacity increased. Between US$450 to US$560 million has been passed annually to NHAI for the NHDP from this source, a high and sustained resource transfer that demonstrates GO1 commitment to the program. So far, all civil work contracts for the first phase ofNHDP (Le. the Golden Quadrilateral), and some contracts for the second phase (Le. North-South and East-West Corridors) have been awarded. The first phase is unlikely to be fully completed as scheduled by the end of2004. However, the GO1 and NHAI have demonstrated a strong commitment to implement the NHDP. While there are significant delays on a number ofthe packages on the Delhi-Kolkata and Kolkata-Chennai arms ofthe GQ, much ofthis delay is due to construction industry/supply side constraints as a result ofthe huge increase in road building in the past few years, poor law and order as well as the NHAI’s legally constrained capacity to enforce a strict schedule on state revenue, forest and utility departments for pre-construction activities. The GO1 and NHAI, however, are taking action to try to mitigate these problems. As traffic volumes increase, the key factor in sustaining project benefits will be satisfactory arrangements to manage and fund the operation and maintenance ofthe completed NHDP. The GO1 has decided that NHAI should rely on toll receipts to fund maintenance as well as existing debt servicing. The specific implementation arrangements for this policy are still being determined. Assuming this direct charging policy is adopted, the issue will be on how best to collect tolls, with NHAI keen to move from the current manual system towards electronic tolling over time. A pilot in this area is expected in next 12-18 months. Furthermore, NHAI has already entered into term maintenance contracts on about 1,600 km ofhighways and is now ready to experiment with new contracting arrangements for corridor management. About a further 600 km ofcompleted GQ will shortly be tendered using three year term performance based contracts supervised by independent consultants. To implement this strategic shift, the NHAI is converting existing PIUs who have been managing the now completed new construction projects to corridor management units (CMUs). Currently, six CMUs are operational while 55 PIUs continue to undertake new construction work. It is expected that the operation and maintenance ofall sections ofthe NHDP will be outsourced as the construction of new sections is completed. These reforms are being partly supported through technical assistance provided under ongoing Bank supported national highway projects.
8 5. Critical risks and possible controversial aspects
Risk Risk Mitigation Measure Risk Rating after Mitigation From Outputs to Objective Newly increased traffic capacity is not Secured maintenance funding and Modest efficiently managed and maintained. strengthened maintenance practice through Corridor Management Units, with the transition from “project” to “corridor” management being partly supported by the Bank under TNHP, GTRIP and ABP. GOI’s commitment to funding and Programmatic lending approach that Modest better managing maintenance of promotes long term dialogue, technical NHDP weakens. assistance being provided under ongoing loans. Traffic growth diverges significantly Proper feasibility study, use of service lanes Modest from predictions. in urban areas where necessary to avoid congestion. From Components to Outputs High staff turnover and inadequate Implementation ofproposed reforms to Modest staffing in NHAI. human resource policy is shortly to start within NHAI with Bank funded technical assistance. Delays in procurement and award of Procurement front loaded. About 90 Modest contracts. percent ofproject will be contractually committed within first year. Delays in removing utilities and trees Adequate staffing at PIUs and close Substantial and obtaining necessary clearances. monthly monitoring ofprogress. State level committees in place. Unduly harsh impacts on affected Early appointment ofNGOs, early process Modest persons due to delay shncomplete of land acquisition, adequate training of implementation ofRAP. responsible staff, close supervision. Unsatisfactory contractor Revised pre-qualification criteria and Substantial performance, construction delays, package size, inclusion ofcontracts and material shortages, quality problems, environment specialists in consultant team, cost overrun, poor environmental enforcement ofproper preparation of management, contract disputes. contract work program at contract signing, upfront training ofcontractor and consultant teams. Poor law and order. Remedial actions have been taken by Substantial Government ofBihar to respond to High Court order on Public Interest Litigation including static and mobile police unit deployment. Overall Risk Rating Modest
9 6. Loadcredit conditions and covenants Effectiveness Standard effectiveness conditions only apply Loan/Project Agreement NHAI shall: Maintain in each project State a high level Project Coordination Committee to coordinate and resolve issues relating to land acquisition, R&R, environmental clearances, shifting of utilities, local dispute resolution, law and order and materials availability; Ensure that the project is implemented under the overall responsibility of a team at Headquarters and in three field Project Implementation Units and that these teams are provided with adequate resources and suitably qualified stafe Ensure that in each project district, there shall be established and maintained (i)District level committees to facilitate RAP implementation and provide guidance on land acquisition and R&R issues and (ii)a Grievance Redress Committee to resolve complaints brought by PAPs; Take all necessary measures to implement the project in accordance with the EA and EMPs and implement the RAP for the entire stretch ofNH 28 from Lucknow to Muzaffarpur, including the Gorakhpur bypass; Carry out two impact assessments of implementation ofthe RAP, the first by December 3 1, 2006 and the second by December 3 1, 2007 to measure changes in living standards ofPAPs and monitor progress against achievement ofrelevant targets; and Submit to the Bank (i)project quarterly progress reports with content and format satisfactory to the Bank and (ii)a mid term review report with content and format satisfactory to the Bank by December 3 1 2006.
D. APPRAISAL SUMMARY 1. Economic and financial analyses Economic Analysis. Economic analysis for the project was based on a conventional life-cycle cost benefit methodology using the established highway project evaluation model Highway Design and Maintenance Model 4 (HDM-4) developed by a number ofparties including the World Bank. The improvement options considered included rigid and flexible pavement alternatives and the most economically feasible alternative was adopted. The base cost included the cost ofconstruction, land acquisition, resettlement and rehabilitation measures, environmental mitigation measures and utility relocation. The expected benefits accrued from the net reduction in total transportation costs, primarily from reduced vehicle operating costs and travel time savings. Existing traffic volume in the corridor ranges from 13,500 Passenger Car Units (PCU) to 25,000 PCUs per day ofwhich about 65 to 85 percent is commercial traffic. The economic internal rate ofreturn for the most preferred alternative base cases varied from 16 to 34 percent across the construction packages with an overall rate ofreturn of26 percent and a net present value ofUS$1,018 million. Further details are available in Annex 9.
10 Financial Requirements. The NHDP is the major expenditure program for the national highway system (NH) till 2009. It involves upgrading of about 14,300 km ofNH at a total estimated cost ofUS$ 14 billion. Furthermore, as sections are completed, the financial requirements for asset operation and maintenance will grow from about US$45 milliodyear in 2004 to US$ 780 milliodyear in 2010. NHAI’s uses offunds therefore include (i)payments to suppliers for works/services for both new construction and maintenance, (ii)domestic and multilateral debt and BOT/annuity payment servicing, and (iii)its own administrative overheads capped at 1 percent ofthe value ofnew works and 9 percent ofmaintenance works. Sources ofFunds. The NHDP is being financed through a mixture ofincreased user charges in the form ofa dedicated fuel cess and tolls plus debt from domestic and international banks as well as private investment, the latter limited to date to a few viable sections. Its primary source ofrevenue is the fixed share grant allocation from the Central Road Fund, amounting to US$ 690 million in the Indian Fiscal Year (IFY) 03/04 and is expected to increase further as traffic and fuel consumption grows, to roughly US$ 890 milliodyear in 2010, assuming no change in the level or allocation of the cess. For extemally funded projects which currently represents about 35 percent oftotal sources of funds, NHAI receives 80 percent from GO1 as grant and the balance as a loan to be repaid to GOI. NHAI has also borrowed on its own and so far raised about US$ 3 10 million through three bond issues and has signaled its intention to issue a further US$ 1.4 billion ofbonds. NHAI aims to service its various debts primarily from toll revenues. In IFY 2004, tolls amounted to US$ 82 million imposed on 1,456 km of completed sections. This revenue is expected to rise to about US$ 560 milliodyear in IFY 2010 on the whole NHDP. Pro-forma financial statements and recent financial figures and ratios for NHAI are shown in Annex 9. Fiscal Impact. The fiscal impact ofthe project is unlikely to be negative and may well be positive. As the core highway asset base for the foreseeable future, the GQ and NS/EW corridors have significant revenue raising potential - whether through direct tolling or through indirect user charging using a fuel cess - as 40 percent of all road traffic runs on the NH network and much of this on these corridors. The high levels oftraffic on these sections can be expected to generate sufficient revenue to service the debts incurred in their construction plus their ongoing maintenance. The risk does remain, however, that either the political will to collect tolls/fuel cess does not continue and/or the revenues generated on the enhanced network are diverted to other uses allowing the network to deteriorate and thereby fail to deliver the anticipated economic and financial benefits. 2. Technical The existing two lane carriageway will be widened to four lane carriageway with paved shoulders and divided by a predominantly 5 meter median. This will increase the capacity and safety ofthe project road substantially. For the most part, the road passes through the Indo- Gangetic flood plains. The design of drainage has been undertaken with particular care and embankment heights raised wherever necessary. Bypasses, service roads, grade separated intersections, embankments, pedestrian and vehicular underpasses, provision for dedicated slow traffic and pedestrian movement have been included to suit local conditions and after discussion with local residents. Sufficient verge/earthen shoulders as well as guard rails have been provided to enhance safety. During project preparation, alternatives were considered for rigid and flexible pavement for the new carriageway and based on the life cycle cost benefit analyses and technical
11 feasibility, rigid pavements were adopted for about 60 percent (280 km out of 482 km) ofthe new sections ofroad. Flexible pavement is proposed for the remaining 40 percent ofnew carriageway sections. Flexible overlay is proposed for the existing retained flexible carriageway portions. Intemational standards were adopted in the pavement design and enhancements were built into the design and cost estimate to take advantage ofmodem construction methods and availability ofhigh capacity construction machinery. An independent road safety audit following the procedure set down in the MORTH Road Safety Design Manual, itself based on good international practice, is near completion. Any necessary revisions to the detailed designs will be undertaken by the supervision consultants as provided for in their terms ofreference at the time ofimplementation. 3. Fiduciary NHAI's fiduciary capacity has been substantially strengthened through the preparation and implementation ofthe TNHP, GTRIP, and ABP. Three on-site Project Implementing Units (PIUs) have been established, each with a Project Director and at least two technical managers plus a Finance Manager. In the past, inadequacy ofstaff in NHAI in general has posed periodic problems in terms ofdelays in procurement and lack of site supervision. However, NHAI is working to address systemic staffing issues through implementation ofan improved human resource management framework which is expected to reduce this problem. There have also been delays in the delivery of entity audit reports. However, with the spread ofthe computerized Financial Management System to most PIUs and the instigation of concurrent audit by CAG staff seconded to NHAI, the delay was reduced last FY. Disbursement delays have been a problem on ongoing Bank funded projects, partly due to delayed implementation but also partly due to delays in NHAI claiming reimbursement - a persistent lag ofabout 6 months. However, there has been an improvement during 2003. Remedial training of NHAI's own staff in implementing the reimbursement process, particularly for staff from the PIUs from where most invoices originate, has been and will be periodically carried out. One Finance Manager from the three field PIUs will be responsible for consolidating and submitting reimbursement claims for the project. Overall there has been no material violation ofBank fiduciary standards on the ongoing projects. Fiduciary capacity is therefore considered satisfactory (see Annexes 7 and 8). 4. Social Social development outcomes. The project will provide better physical access to basic infrastructure facilities such as schools, health care and other govemment services. Markets for agriculture produce are expected to develop further and access to inputs and sale ofproduce at competitive prices will improve the socioeconomic conditions ofcommunities adjacent to the road. All things being equal, the quality of life ofthe adversely affected population should improve once the support and assistance provided under the entitlement framework is actually delivered. Impact on people and land. The project road passes through a total of527 villages and 12 districts in two states, Uttar Pradesh and Bihar. The project includes by-passes at Ayodhya (12.4 km), Katra Chowk which is ajunction of SH and NH (minor realignment), Barabanki (1 1.7 km) and Ram Sanehighat (7.6 km). Since the legal Right ofWay (ROW) varies between 18 - 90 meters, additional land will be acquired to meet the design specifications - 401 ha ofprivate land
12 will be acquired and 41 ha will be transferred from other government departments. The land acquisition and affects on structures, both of titleholders and non-titleholders, will have an adverse impact on about 33,880 families totaling about 150,000 people. Approximately 6,998 families will be displaced, out ofwhich 1,352 will become landless. Existing incomes of affected families will be significantly affected by the loss ofagriculture land and access to commercial activities (see Annex 10 for further details). Sexually transmitted diseases (STDs). There is a risk ofSTD infections due mainly to increased truck traffic and migrant construction labor. A survey on this topic was carried out at sensitive locations such as interstate check points, urban areas and truckers' parking lots. This concluded that the level ofawareness on STDIHIV was low both among truckers and adjacent residents. Road safety Traffic on the project road is typically very mixed with slow moving traffic such as cyclists, bullock carts and agricultural equipment fighting for space with faster motorized through traffic. In many locations, regular markets and cattle fairs are organized close to the road. Pedestrian flows are high due to significant linear development. Collectively, these factors make for a highly dangerous road. Consultation with stakeholders. Consultation, designed to enhance positive and manage negative impacts from the project, took place between June 2001 and August 2003 during the Social Impact Assessment (SIA). Over 100 village-level consultations were conducted during 2001 and 2002. Follow-up consultations were organized in late 2003. Key stakeholders such as project affected persons, opinion makers, elected representatives and different department personnel were consulted both through individual discussions and public consultations. Findings of these consultations were considered in deciding on the selection ofpreferred alignments, locations ofunderpasses, service roads, drainage facilities as well as the method ofwidening (concentric or eccentric) in semi-urban and urban locations. Consultations revealed that the majority ofthe people in the project area were supportive ofthe proposed bypasses. These consultations facilitated the minimization ofadverse social impacts and the development of realistic mitigation plans. For continued and sustainable participation, the Resettlement Action Plan proposes a continuous consultation process throughout project implementation, Management of Social Risks. The project Resettlement and Rehabilitation (R&R) framework, that builds on the frameworks agreed for earlier Bank funded projects, specifies the nature of entitlements to be given to all affected people including squatters and vulnerable encroachers. Additional support will be extended to vulnerable groups to achieve poverty reduction and equity. In accordance with the agreed R&R framework, before civil works are initiated in any particular locality, NHAI will ensure that to the extent feasible (i.)affected titleholders will receive compensation based on market values and additional assistance to meet replacement costs will be paid out within three months ofreceiving compensation (rental allowance is payable during the transition) and (ii.)non-titleholders will receive their entire assistance. A time bound Resettlement Action Plan (RAP) has been prepared to ensure resettlement and rehabilitation ofthe displaced and affected people. A milestone approach is being adopted that allows for at least 10 km ofeach package to be given to contractors initially and the remaining sections as all encumbrances are removed and land acquired. Even though the cost of construction ofthe Gorakhpur by-pass will be borne by NHAI, the same R&R framework will be applied and implemented with the Bank reimbursing for R&R assistance as for the rest ofthe project.
13 Monitoring of social impacts. A detailed census conducted in 2002 and 2003 forms the benchmark ofproject affected people. Suitable progress and process monitoring indicators are included in the RAP to assess achievement ofthe desired social development outcomes such as improvements in quality oflife and increase in the ownership of assets. Two independent studies will be made to assess the effectiveness ofthe RAP delivery and identify remedial measures as necessary. 5. Environment Environmental Assessment. An Environmental Assessment (EA) carried out during project preparation has determined the potential adverse environmental impacts ofthe proposed road widening during construction and operation phases. Appropriate management as well as structural mitigation measures to protect people fiom air and noise pollution have been included in Environmental Management Plans (EMPs) whose provisions are incorporated into the contract conditions, drawings and specifications. An environmental specialist position has been included in the Engineer’s team to help ensure that the various stipulations in the EMP are implemented during construction. For the operation phase, in addition to periodic monitoring of environmental quality, NHAI will also co-ordinate with other line departments at various levels ofgovernment to prevent uncontrolled induced development, especially along bypasses being built under the project. Environmental assessment ofthe project has included an independent review of the project EA documents prior to their finalization. Cultural Property. Kushinagar, a World Heritage Site, and some related smaller sites lie about 0.5-2.0 km from the edge ofthe road. Appropriate environmental mitigation measures have been devised to minimize any negative impacts to these sensitive sites. The following special measures are included in the EMP: (i)restricting the timing of construction activities to avoid the pilgrim season; (ii)the protection of structures from vibration and dust; and (iii)enhancements to site access. Bilateral grant funds from Japan are currently being made available to improve the environs ofthe site in general, including better parking and accommodation facilities. Since there is a possibility of finds ofartifacts during the excavations, construction in this stretch will proceed according to a plan pre-agreed with the relevant archaeological authorities. These measures have been developed in consultation with experts in archaeology from the State government during the preparation ofEA documents. Due to the distance between the protected sites and the project road, clearance from the Archeological Survey ofIndia is not required under the terms ofrelevant legislation. Forests. The project alignment passes for 1 km adjacent to a designated ‘Reserved Forest’. The stretch is heavily influenced by human presence and only common faunal species like jackals were reported during consultations with forest officials and locals. The project is funding the installation of a fence at the edge ofthe ROW for this stretch within the “Reserved Forest” area to help prevent unauthorized access. No forest land is being diverted nor tree being felled in this stretch. Tree Plantation. A total of 74,358 trees are expected be cut in the project. Compensatory afforestation will include the planting of about 630,000 trees in block plantations away from the road, within the highway median and in the ROW beyond the corridor ofimpact. Environmental Capacity. Since this is the fourth project to be implemented by NHAI with Bank assistance, substantial safeguard management capacity has been built in HQ. A small Environment and Social Development Unit (ESDU) has been created to inform policy and
14 coordinate with relevant line departments, including those dealing with archaeological properties at State and GO1 levels, and other project stakeholders and local NGOs. NHAI has recently procured consultants to help standardize the environmental management practices across all NHAI activities, with the expectation that this will lead to certification to IS0 14000 standard within 18-24 months. Disclosure. The ENSIA and RAPs/EMPs were made available in the Infoshop from February 2004 and the ENRAP summary has been publicly available in the project areas - Block HQ and District Magistrates’ offices - since March 2004. The Executive Summary ofthe ENSIA was circulated to the Bank’s Board on 28 February 2004. 6. Safeguard policies Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.01) Natural Habitats (OP/BP 4.04) Pest Management (OP 4.09) Cultural Property (OPN 11.03, being revised as OP 4.1 1) Involuntary Resettlement (OPBP 4.12) Indigenous Peoples (OD 4.20, being revised as OP 4.10) Forests (OP/BP 4.36) Safety ofDams (OPBP 4.37) Projects in Disputed Areas (OP/BP/GP 7.60) Projects on International Waterways (OP/BP/GP 7.50) [I
OP4.01, OP4.11. The environmental safeguard category ofthe project is A. A full assessment has been carried out and a suitable management instrument prepared. The provisions ofthe instrument have been incorporated in the works bidding documents. Implementation will be overseen by independent Supervision Consultants as well as NHAI.
OP 4.12. The social safeguard category ofthe project is S1. NHAI has prepared, on the basis of a detailed social impact assessment, a Resettlement and Rehabilitation (R&R) Framework and Resettlement Action Plan (RAP) consistent with the OP. Adequate implementation arrangements are in place to deliver the provisions ofthese instruments.
7. Policy Exceptions and Readiness There are no policy exceptions being sought. About 90 percent ofproject value is expected to be contractually committed by the time of loan effectiveness and contractors and consultants mobilized in the first half of2005. NHAI is an established highways agency and there is adequate fiduciary, safeguard and project management capacity to implement the project. Pre- construction activities are under way (see Annex 6).
15 Annex 1: Country and Sector or Program Background INDIA: Lucknow-Muzaffarpur National Highway Project Background Road transport plays a significant role in India's economy, carrying 80 percent ofthe land transport demand. The national highway network has a total length of about 65,000 km which accounts for less than 2 percent ofthe total road network but carries over 40 percent ofthe road traffic. With steady economic growth during the last 12 years, traffic on the national highways has grown relentlessly by 6 to 7.5 percent per year. The network is divided into two parts: (i)a core network managed by the National Highways Authority ofIndia (NHAI) which includes the 14,300 km long National Highway Development Project (NHDP) plus a further 10,000 km which is currently being put under NHAI control; and (ii)the rest ofthe network (about 41,000 km), which is managed by the Ministry ofRoad Transport & Highways (MORTH) who has long been responsible for the national highways mainly through delegating implementation to state-level Public Works Departments (PWDs) on an agency basis. NHAI is an implementing agency established by the GO1 under the NHAI Act of 1988. In 1998, GO1 entrusted the implementation of the NHDP to NHAI, including projects financed by ADB, the Japanese Bank for International Cooperation, and the World Bank. Sector Issues Despite the importance of national highways in India's economy, the network's performance has been poor by international standards. This is due primarily to the following main sector issues. Serious road capacity constraint on the core national highway network. With steady traffic growth, national highways are increasingly congested. Over 90 percent of the national highways are two-lane or narrower roads. Capacity constraints on the core network will remain until the completion ofNHDP and on some sections even beyond. Moreover, the network connectivity to the Northeastern states is especially inadequate. Management of road infrastructure services. The level ofservice on national highways is not only limited by physical capacity constraints, but also made worse by the mixed traffic offast and slow vehicles, encroachments on the right-of-way (especially those passing through urban areas), and state border checkposts (for commodity permit inspection and tax collection) that often hold up trucks for many hours. Truck and bus speeds on national highways average 30-40 km per hour, though the expected average is twice this figure. Poor driving conditions, especially through densely populated urban areas, are a major contributing factor to a high level oftraffic accidents. The death rate per 10,000 vehicles in India is around 10 times the levels seen in European Union, and 38 per cent ofthe road accidents in India occur on national highways. Institutional capacity for the development, management and operation of national highways. While institutional capacity has been significantly developed during the last several years, the sector would benefit from further policy and institutional reforms. For example, it is unclear what long-term role NHAI will play after the completion ofNHDP. The future institutional arrangement among MORTH, NHAI, and state PWDs for the management ofnational highways
16 is yet to be thoroughly examined, and the functional responsibilities ofthese agencies need to be resolved. Within NHAI, there is scope to strengthen further Operation and Maintenance (O&M) policy and management, monitoring and evaluation, and capacity to address legal and contracting issues arising from land acquisition and law and order on highways. Limited private sector participation in roadfinancing. The financial requirements for increasing the national highway capacity are enormous, and exceed the funds that could be raised by the public sector through current toll or user charge receipts. Currently, the major public funding comes from a dedicated Central Road Fund (CRF) with revenues from a fuel cess (tax). The allocation to national highways amounts to about US$ 700 million a year, still far below the funding level required. Private sector financing is evolving but still limited. Few projects can be financially viable for a stand-alone BOT (Build, Operate, and Transfer) scheme, and most would require some form ofPublic-Private Partnership (PPP) to become viable. While NHAI has reached financial closure for some annuity-based, BOT and Special Purpose Vehicle funded projects, various modalities ofprivate sector financing and PPP need to be tested and applied to cover more ofthe network. Government strategy Recognizing that the poor performance ofthe national highways has been a major drag on economic growth, GO1 initiated in 1998 the NHDP to strengthen and widen the core national highways. Total cost for the program is estimated to be US$ 14 billion over ten years, and funding sources include government grants, fuel levies, tolls, bonds, private investments, and loans from international development banks. In addition, GO1recently announced that an additional 10,000 km national highways would be upgraded during the 10th Five Year Plan (2002-07), at an estimated costs ofUS$ 12.6 billion with the expectation that an increased share ofthe requisite funding come from the private sector. Institutional reforms to improve the effectiveness ofpublic road agencies to deliver road infrastructure services are also part ofthe government strategy. Before 1998, nearly all national highway responsibilities, from policy and planning to civil work implementation and maintenance, were vested with MORTH. GOI’s entrusting the NHDP implementation to NHAI was a major step towards the separation ofimplementation from the policy making functions. The NHAI Act requires NHAI to discharge its functions on business principles as far as possible. The agency has managed to maintain a lean organization by outsourcing most of its activities to the private sector. Through a variety ofreforms partly supported under the Bank and ADB projects in recent years, NHAI has taken significant steps to develop and strengthen its institutional capacity in a more commercial direction. Through the Control ofNational Highways (Land and Traffic) Act, 2003, the GO1 has recently significantly empowered MORTH, and NHAI on behalf of MORTH, to look after its assets. This seeks to regulate traffic as well as the ROW ofNational Highways. The main provisions are to:
0 establish highway administrations and authorize their officers to enforce the provisions of the Act; 0 establish tribunals for hearing appeals against the orders ofthe highway administrations; e provide for prevention ofunauthorized occupation ofhighway land; 0 provide for removal ofencroachments; 0 provide for control ofaccess points to the National Highways;
17 e regulate different types oftraffic permitted on the National Highways; and e provide for control ofuse ofroad land for public utilities and drains. Bank Support to Date to NHAI The three ongoing loans made to NHAI all have corridor management and institutional development components designed to help NHAI shift from an implementing agency to a sustainable asset management agency. This fourth project is able to benefit from these earlier initiatives. Ongoing. The following activities are already under implementation, financed through existing loans
e Development of an embryonic Road Information System (RIS) at HQ, expected to be complete by early 2005, that acts as the main repository for inventory, construction history, location reference, condition and traffic data. The system has a Geographic Information System interface and is also being connected to other decision making and reporting systems.
e Development and pilot implementation of a corridor management strategy on the GQ (see Annex 9), currently starting its implementation support phase on pilot projects on 600 lun ofcompleted sections.
e Preparation and support to implementation of an institutional reform program for NHAI. A corporate plan has been prepared and endorsed by NHAI. To implement the plan, the technical assistance is currently helping in the areas ofhuman resource management, reorganization of business units, improvement in the interface between NHAI and road sector stakeholders and supplier management. The support is proving effective and is expected to be complete by early 2006.
e Standardization ofsafeguard management procedures and measures on all NHAI works with a view to obtaining IS014001 and SA 8001 certification for the whole entity. The work has recently started and is expected to be completed by the end of2005.
e Training oftrainers and dissemination ofthe MORTH Road Safety in Design Manual to be completed over the next 18 months.
e ,Baseline poverty survey/impact assessment completed in 2003, with follow up in 2006.
e Cross border efficiency study, to be complete by the end of 2004.
e Baseline user satisfaction survey on the Golden Quadrilateral, to be completed by early in 2005. Future. The following activities are currently being procured under ongoing loans.
e Further asset inventorization and conditiodtraffic to be incorporated in the RIS of all completed sections ofthe NHDP. To be completed by the end of2006.
e Web enablement ofcomputerized financial management system, linkage to road information database, training of all PIU staff in its use and ongoing maintenance support. To be completed by mid 2006.
e Construction industry review to be completed by end of2005.
18 Issue Project Latest Supervision Ratings
Bank-financed, completed or ongoing Implementation Development Progress Objective Capacity expansion of national Second National Highways Project (Ln.3470, Cr.2365- S S highways and institutional IN), strengthening Of MoRTH and Third National Highways Project (Ln.4559-IN), S S NHAI
Grand Trunk Road Improvement Project (Ln.4622-IN) u7 S Allahabad Bypass Project (Ln.4719-IN) S S Enhancement of institutional State Roads Infrastructure Development Technical S S capacity to prepare projects at the Assistance (Ln.4114-IN) state-level Capacity expansion, maintenance Andhra Pradesh State Highways Project (Ln.4192-IN) S S and institutional development of state road agencies Gujarat State Highway Project (Ln.4577-IN) S S Kamataka State Highways Improvement Project S S (Ln.4606-IN) Kerala State Transport Project (Ln.4563-IN) S S Mizoram State Roads Project (Ln.3618-IN) S S Uttar Pradesh State Roads Project (Ln.4685-IN) U S Tamil Nadu Road Sector Project (Ln.4706-IN) S S Widening and strengthening of Infrastructure Leasing & Financial Services (Ln.3992- S S two state roads in Gujarat in a IN; Cr.2838-IN) commercial format: Vadodara - Halo1 SH and Ahmedabad - Mahesana SH, Delhi NoidaToll Bridge Other development agencies, completed, ongoing and planned
ADB- Capacity expansion of First Highway Project, Second Highway Project, Completed I national highways and institutional National Highway Project strengthening of NHAIIMORTH Japanese Bank for International Yamuna Bridge Project, National Highway Project Completed Cooperation (formerly OECF) - Capacity expansion of national ------+ highways and institutional strengthening ofNHAIIMORTH ADB - Capacity expansion of NH National Highway Corridor I,Surat-Manor Tollway Ongoing and SH and institutional Project, Chattisgarh State Roads Project, strengthening of agencies ADB - Capacity expansion of NH National Highway Corridor 11, MP State Roads Project Planned and SH and institutional I strengthening of agencies
’ Unsatisfactory since mid 2004 due to delayed procurement oftwo components (Corridor Management and Public Private Partnership). The project is expected to be rated satisfactory by early 2005.
19 Annex 3: Results Framework and Monitoring INDIA: Lucknow-Muzaffarpur National Highway Project
Results Framework
~ PDO Outcome Indicators Use of Outcome Information Road users to benefit from an (i)vehicle travel time on project Yr. 3 and 5 to determine improved journey from Lucknow to road achievement ofdevelopment Muzaffarpur (ii)truck operating costs on project objective road (iii)number offatal road accidents on project road (iv) user satisfaction in region ~~ Intermediate Results Results Indicators for Each Use of Results Monitoring One per Component Component Component One: Component One: Component One: Cost effective delivery ofenhanced (i)Average cost overrun for physical (i)and (ii)Yr. 1-5 to identify need capacity and quality on section of contingencies, percent vs. original for remedial measures with respect East West Corridor contract to delay in works implementation (ii)Average time overrun, in months andor poor cost control, vs. original contractual work (iii)Yr. 5 to determine effectiveness program oftree planting strategy (iii)Survival rate of afforested trees, (iv) Yr. 5 to determine overall as percentage economic value ofthe project (iv) Ex post ERRS,percent
20 2 i L -t
1
1 5
2 i
Y
52
f S L 0 > i
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Im Y
ij Annex 4: Detailed Project Description INDIA: Lucknow-Muzaffarpur National Highway Project
Project Component 1 - US$802.87 million, including contingencies (a) Civil works (US$ 709.28 million) Upgrading ofa 483 km section ofthe NH-28 highway to a four lane standard, including 3 major bridges (>60 metres long), as well as about 82 minor bridges (<60 metres long), 9 flyovers at major junctions, 68 underpasses, 20 bus and truck bays, 10 Road Over Bridges (ROBS), service roads, toll booths and construction related environmental management measuredtree plantation as necessary.
(b) Construction Supervision (US$ 24.36 million)
(c) Land Acquisition, R&R implementation, additional environmental enhancements not related to the road itself and utility relocation (US$ 60.03 million) as follows: (i) land acquisition (US$ 26.41 million) and utility relocation (US$ 2.24 million) to be financed by NHAI; (ii) R&R assistance (US$25.75 million) will be paid to beneficiaries through a consultative process, with payments to be made from the Project Director’s office, and the Bank share (US$ 25.75 million) to be reimbursed on the basis of SOE; (iii) R&R implementation support, training and monitoring (US$ 0.64 million); and (iv) additional tree plantation implemented as deposit works through the respective State Forest Departments to be financed by NHAI (US$4.99 million).
(d) Awareness campaigns for road safety (US$0.25 million) and HIV/AIDS (US$0.25 million). The awareness programs will be delivered to those using, living or working adjacent to the East West Corridor throughout the construction period. This will help implement the recommendations ofbroader strategies in the road safety and HIV/AIDS prevention areas that have been developed with previous Bank support.
(e) Services to support improvements to the NHAI management information system, including on cement concrete pavements performance (US$ 0.5 million), road users’ satisfaction survey at the end ofthe project (US$0.25 million) and RAP impact assessment.
(0 NHAI incremental operating costs (US$ 7.95 million) to be financed by NHAI.
23 Annex 5: Project Costs INDIA: Lucknow-Muzaffarpur National Highway Project
Local Foreign Total Project Cost By Component andor Activity US$ million US$ million US$ million 1, EW Corridor Construction on 483 km and all 519.92 196.02 715.94 associated pre construction and management measures
Total Baseline Cost 519.92 196.02 715.94 Physical Contingencies' 25.43 9.73 35.16 Price Contingencies" - 37.44 14.33 51.77 Total Project Costs'_. 582.78 220.09 802.87 Front-end Fee" 3.10 3.10 P Total Financing Required 582.78 223.19 805.97
' Identifiable taxes and duties are US$ 80.30 million, and the total project cost, net oftaxes, is US$ 722.57 million. Therefore, the Bank's share of the project cost net oftaxes is 86 percent.
Works at 5% Other than Works at 4% loWorks at 7% Other than Works at 6% The Board ofthe World Bank has approved a 50BP waiver ofthe front-end fee for IBRD loans for Bank Fiscal Year 2005. Assuming the loan is approved by the Board within FY 2005, the waiver will apply to this loan. Accordingly the fee is shown as only 0.5 percent above and in the Loan Agreement.
24 Annex 6: Implementation Arrangements INDIA: Lucknow-Muzaffarpur National Highway Project General The standard implementation arrangements that have been working satisfactorily for ongoing Bank funded projects will largely continue for this project. A list ofproject activities and responsible agencies is shown in Table 2 overleaf. Implementation Readiness at the Field Level Land Acquisition. Wherever land is to be acquired, the provisions ofthe National Highways Act of 1956 will apply for the purpose of defining the applicable administrative procedures'2. This mandates a relatively less cumbersome set ofprocedures than those given under the Land Acquisition Act of 1894. Most ofthe land required is to widen to the minimum desirable ROW of 45 meters rather than for the main corridor of impact of about 37 meters which is already in public ownership. Hence, acquiring land for the most part should not impede work progress. However, the initial notification under Section 3A which gives land owners 21 days to object to the purchase oftheir land has already been made for all project districts. The detailed documentation required to make the declaration ofaward (section 3D) is under preparation and is expected by the end of CY 2004. In regards to all aspects ofcompensation and resettlement issues, the provisions ofthe R&R Policy Framework and RAP for the project will apply. Preparation of R&R Micro-plans. Four Non Government Organizations (NGOS)'~ are currently helping to verify the Project Affected Persons (PAP) and determine associated entitlements. The finalization ofthe micro plans for Non Titleholders is expected to be substantially complete by the end ofDecember 2004. After declaration of award, the micro-plans for Titleholders will be finalized. After finalization, the PIUs will start making payments to PAPSunder the terms of the micro-plans with day to day implementation support to be provided by the NGOs. UtiZities/community assets. The joint verification ofpoles to be shifted by the concerned electricity department and NHAI is complete in all 12 packages. NHAI is currently depositing the requisite amounts to cover the shifting costs with the concerned local offices ofthe power distribution companies (see Table 1 below). Thereafter, the concerned PIUs will be responsible for pursuing with the respective local offices to ensure that actual shifting takes place in an orderly fashion before contractors mobilize. Notwithstanding the desire to see all the poles shifted by the end of2004, NHAI will encourage the electricity departments to proceed with the removal ofpoles in the priority of sections to be handed over to contractors. There are no water pipelines to be shifted under the project. Telephone poles and Optical Fiber Cable are to be shifted at the expense of the respective companies. No joint verification is required for such items and all the respective local offices have been instructed by NHAI to shift their assets out of the corridor of impact by the end of2004. There are 3,869 community assets to be relocated. Provision for their removal and replacement is made in the main works contract with a stipulation that the contractor must start building the new asset within 15 days ofinstruction. Table 1 Power Cable Relocation Cost (In Rs. Million)
Package I I I I1 I I11 I IV I VIVI I VI1 I VI11 I IX I XIXI I XI1 1 Total Rs. m I 2.67 I 3.26 I 3.78 1 2.74 I 5.67 I 5.92 I 12.95 1 12.65 1 10.13 I 7.26 1 9.24 1 13.53 1 89.80
l2Available at http: ,:www.nhai.org/act 195 6.hlm l3A fifth NGO is working on the Gorakhpur Bypass
25 Settlement ofdisputes in relation to R&R Grievance redress committee constituted on request ofNHAI Identify, develop and rehabilitate borrow areas and quarries Contractor with Engineer’s assent Supervise and monitor contractual provisions on progress, quality, Supervision consultant environmental, safety and traffic management Implement environmental and traffic management measures Main contractors as BOQ item Certify monthly and final payments to contractors Supervision consultant Release payment to contractors PIUS Procurement ofroad safetyiHIV awareness services GM (EWIII) and GM (EM) respectively ofNHAI On site supervision ofroad safetylHIV awareness services PIUS Collection ofdata for progress reports and performance indicators Supervision consultants Preparation ofquarterly progress reports GM (EWIII) ofNHAI Procurement ofcement concrete study GM (EWIII) ofNHAI Technical supervision ofcement concrete study Committee ofNHAI, MORTH, IRC
26 Tree Removal. The joint verification by the concerned Forest Department and NHAI oftrees to be cut is complete in all 12 packages. NHAI has deposited most ofthe requisite amounts to cover compensation and afforestation with the concerned District Forest Offices and the remainder will be deposited by the end of2004. The actual felling oftrees is included as part of the contractors’ scope ofwork to avoid the risk ofcreating claims for extension oftime and facilitate implementation. Some trees may also be cut by the concerned Forest Departments or their contractors. Clearance of Road Over Bridge (ROB) Designs. Indian Railways has approved all ofthe General Arrangement Drawings and about half the detailed designs for the 10 ROBSon the project. PIUs are following up to obtain the outstanding approvals.
27 Annex 7: Financial Management and Disbursement Arrangements INDIA: Lucknow-MuzaffarpurNational Highway Project
Implementing Entity NHAI was established by the NHAI Act of 1988. The Act requires the Authority to operate on business principles and hence NHAI has maintained a lean organizational structure by outsourcing most ofits functions to the private sector. While the construction ofroads is carried out by civil contractors, the supervision ofconstruction, materials quality and billing is done by independent consultants. At the field level, the activities ofNHAI are carried out by Project ImplementingUnits (PIUs) which are decentralised administrative and accounting units. PIUs manage contracts and expenditure under projects, coordinate day to day project activities, account for project transactions, perfonn Financial Management System (FMS) data entry, as well as authorize and make payments. This project will be implemented through three existing PIUs at Lucknow, Gorakhpur and Muzaffarpur. Staffing. At HQ, the finance team is headed by a Member (Finance) who is supported by General Manager (Finance). The General Manager (GM) is supported by 3 Deputy General Managers (Accounts), 3 Managers, 3 Accounts Officers, 6 Accountants and a Cashier. The GM handles all proposals for release ofpayments, scrutinizes the finance aspects of contracts, approves variations, grants time extensions and supervises the submission ofaccounts to audit. The PIUs are staffed with a Manager Finance and an Accountant, both ofwhom report to the GM (Finance) at the HQ. The Managers Finance at the PIUs are responsible for vetting the final bills ofcivil contractors and also for managing the funds ofthe PIU. Funds Flow. MORTH will sanction money to NHAI for the project in its budget each year. Thereafter, funds will flow from MORTH to NHAI quarterly in advance. Reimbursements from the Bank to NHAI will be retrospective after project expenditures have been incurred. There have been no funds flow difficulties between MORTH and NHAI in the past. The process of funds flow to the PIUs from NHAI headquarters has also worked smoothly for ongoing Bank funded projects. NHAI transfers funds to its PIUs based on quarterly forecasted cash requirements submitted by them. Funds transferred to PIUs are specifically identified to the project for which these have been transferred. Although PIUs operate common bank accounts for all the projects that they execute, the sources and uses offunds are clearly distinguishable in the accounts ofeach PIU. Accounting policies and procedures. NHAI follows double entry accrual accounting based on accounting standards issued by the Institute ofChartered Accountants ofIndia. It has an accounting manual that sets out standard procedures for maintenance ofaccounts and for transaction entry into a computerized system FMS as per Indian Accounting Standards and NHAI Rules (1997). This manual has recently been revised and updated. Project accounts are maintained by PIUs using a computerized Financial Management System (FMS), and cover all sources (including donor contributions) and uses of funds. Financial statements are generated automatically from the FMS. Project codes are assigned to all ofthe Authority’s projects and are used when transaction data entry is made in the system. Project-wise accounting system facilitates the capture and retrieval ofinformation on receipts and payments by projects. Payments relating to eligible expenditures are authorised and
28 Agency Audit Report Audited by NHAI Project / SOE CAG NHAI Entity CAG GOI, Department of Special Account CAG Economic Affairs
In accordance with the Bank policies for submission ofa separate financial statement for the entity as a whole for all revenue earning bodies, NHAI will submit entity audit reports and statements ofaccounts within nine months ofthe close ofthe financial year. In the past, there
29 has been a delay in providing the entity audit reports. However, NHAI has taken adequate action to improve this.
Internal Audit. Internal audit ofNHAI is carried out by independent chartered accountants. The internal auditors will cover all three PrUs and their report will be made available to the Bank upon request. The internal audit will be carried out in accordance with International Standards of Auditing.
Reporting and Monitoring. Financial Monitoring Reports (FMRs), covering financial, physical and procurement progress, will be submitted on a quarterly basis from the implementing PXJs to the HQ at NHAI and from NHAI to the Bank. The first FMR for LMNHP will be submitted to the Bank within 45 days ofthe end ofthe first quarter from the date ofloan effectiveness. The format for the FMR is the same as used on ongoing projects, or as modified from time to time in agreement between the NHAI and Bank.
The FMS has the capacity to link financial information with the project’s physical progress. This is done through a report which maps, for each civil construction package being executed, the actual and budgeted physical targets derived from the Bill of Quantities (BOQ) and actual and budgeted financial targets based on expenditures made.
Disbursement Arrangements. Disbursements from the loan will initially be made in the traditional system (replenishment and reimbursement with hll documentation and against statement of expenditure) which could later be converted to the Financial Monitoring Report based disbursements at the option ofthe GOI. A Special Account will be maintained in the Reserve Bank ofIndia operated by the Department ofEconomic Affairs (DEA) ofGOI. The authorized allocation of the Special Account has been determined on the basis ofrepresenting the peak level of estimated disbursements from the loan over a three month period. The Special Account will be operated in accordance with the Bank’s operational policies. NHAI will submit withdrawal applications to the Controller ofAid, Accounts and Audit (CAA&A) in DEA for onward submission to the Bank for replenishment ofthe Special Account or reimbursement. R&R Assistance. R&R assistance will be reimbursed by the Bank for expenditure on productive asset grants, rental allowances, transitional allowances, training allowances, economic rehabilitation grants and shifting allowances, including for such expenditure on the Gorakhpur Bypass. This expenditure will be accounted for in the overall accounts ofthe project as well as laid out in the micro-plans prepared by NHAI prior to the disbursement under this category. A joint bank account will be opened with one representative ofthe implementation support NGO and the designated officer in the PIU as joint signatories. A separate register will be opened for each Project Affected Person (PAP), and assistance will be transferred by a cheque or cheques, drawn on the joint account in the name of the PAP as “account payee cheques”, against productive goods/works/services, as specified in the micro-plans. Receipts for the assets and/or services and utilization certificates provided by the PAPSwill be maintained by NHAI and will be subject to statutory and internal audit. Use of statements of expenditures (SOEs). Disbursements will be made on the basis of Statements ofExpenditure for: (a) civil works contracts not exceeding US$ 3,000,000; (b) goods contracts not exceeding US$ 500,000; (c) consultant contracts not exceeding US$200,000 for firms and US$ 50,000 for individuals; and (d) all R&R and training costs.
30 Retroactive Financing. This will be available for expenses incurred after 3 1 May 2004 but before loan signing, procured in accordance with Bank procedures, up to a maximum ofUS$ 62,000,000 to cover civil works, services and R&R packages. Allocation of Loan Proceeds. Category Amount Bank Funding Share
US$ million YO I 1. 1 Civil Works I 567.42 I 80 I ~~ 2a. Consultant Services 22.60 90 2b. Not for Profit Services 1.13 100 1 3. 1 R&R Packages I 25.75 1 100 I
Supervision Plan. The project will be supervised for financial management on a bi-annual basis along with the main supervision mission. The supervision plan will include review ofthe project FMRs and financial statements for the PIU and NHAI. Strengths. The project has the following strengths in the area offinancial management:
0 NHAI has been involved in the implementation ofGTRIP, TNHP and ABP since 2000 and has been adequately exposed to the Bank’s FM procedures; 0 a budgeting and accounting system has been established and is operational; 0 staff are trained to carry out basic accounting functions at all levels including PIUs; 0 a system of periodic financial reporting from the PIUs to the HQ is operational; and 0 a project financial management manual is in use at NHAI and its PIUs, setting down in detail accounting and financial reporting policies, procedures and processes, operation of the project financial management system and reporting arrangements.
31 Finan cia1 management risk analysis. Risk Flags Rating Mitigation Project Complexity. The project implementing Low Not required. structure is simple and a similar structure has been used to implement other Bank projects in the past. Funds Flow. Funds flow between MORTH and Low Not required. NHAI and that between NHAI and its PIUs have worked well in the past. Disbursement Arrangements. There have been delays Medium This risk will be monitored closely during in the past at NHAI in submitting reimbursement supervision by both NHAI and the Bank. In claims. The delays have been caused by slow addition, remedial training ofNHAI’s own processing at NHAI HQ and field units, partly due to staff will be carried out. NHAI has assigned a the fragmentation ofresponsibility for the claims single senior finance officer responsible for process between the finance and administrative ensuring that all reimbursable expenditures departments ofNHAI. are claimed in a timely manner. Borrower Staffing. NHAI has adequate numbers of Low Not required. well trained and qualified staff at HQ and PIUs who are well versed with Bank procedures. Internal Control and Accounting System. The Low Not required, quality ofexisting FM systems including internal controls is good. Internal controls are strengthened by an internal audit which is carried out concurrently throughout the year. Quality offollow up ofaudit issues has been comprehensive and prompt. Audit Arrangements. There has been an issue of Medium NHAI is implementing an action plan to timeliness ofthe entity audit report of NHAI which has enable it to meet the Bank’s deadline. been delaved for three vears in a row. Overall FM Risk Rating Medium SigniJicant weaknesses in the FM arrangements. Weakness Mitigation NHAI’s accounting practice of loading project cost For the purpose ofBank projects, the Agency Commission with a 1 percent charge ofAgency Commission to be amount will be met from counterpart funding and this will be included in project cost is atypical. certified by the CAG or NHAI’s internal auditors. The accounting policy ofNHAI to record the highways MORTH is moving towards accrual accounting and that it builds and controls as Capital Work in Progress capitalization ofall NH network and NHAI is expected to (CWIP) rather than capitalize and depreciate. follow suit. MORTH is currently hiring consultants to recommend how to resolve basic policy issues such on whose balance sheet fixed assets should be capitalized and what depreciation methods to use. CAG has also raised this concern with NHAI management and is pursuing a resolution. The internal auditors point out that payments to Central CAG advise that this be accounted as an advance and NHAI and State govemment agencies for works like shifting has agreed. ofutilities etc. have been accounted for as CWIP, although utilization certificates have not been obtained. The GO1 has been shown as a debtor in the books of This issue has been taken up with NHAI, and is under NHAI for maintenance expenditure despite the fact that consideration by NHAI management. The MORTH has there has been no dialogue with nor acknowledgment initiated the conversion ofall its accounts to an accrual basis, of this debt from GOI. This is contrary to accepted which is expected to help resolve outstanding financial accounting practices. reporting issues.
32 Annex 8: Procurement INDIA: Lucknow-Muzaffarpur National Highway Project
A) General Procurement for the proposed project has been and will be carried out in accordance with the World Bank’s “Guidelines: Procurement Under IBRD Loans and IDA Credits” dated May 2004; and “Guidelines: Selection and Employment ofConsultants by World Bank Borrowers” dated May 2004, and the provisions stipulated in the Legal Agreements. The general description ofvarious items under different expenditure categories is described below. For each contract to be financed by the Loan, the procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame have been agreed and are laid out in the Procurement Plan. B. Procurement Methods B.1 Works (US$ 716.52 million) International Competitive Bidding (ICB): US$ 709.28 million equivalent including contingencies: The works relating to the upgrading ofthe Lucknow Muzaffarpur highway will be implemented in 12 contract packages ranging from US$ 49.30 to US$ 75.65 million. Pre- qualification is complete and tenders have been invited. The Bank’s standard bidding documents are being used for tendering updated in line with the provisions ofthe May 2004 Guidelines. Preference will be given to domestic contractors in accordance with Appendix 2 ofthe Bank’s procurement guidelines. Forest Plantation: US$4.99 million equivalent: Afforestation (not Bank financed) will be undertaken by force account andor direct contract through the respective State Forest Departments on a deposit basis from NHAI. Utility Shifting: US$2.24 million equivalent: Shifting ofelectricity poles and transformers (not Bank financed) will be implemented through respective State power distribution companies through specialized contractors as deposit works. B2. Procurement by Beneficiaries of R&R Assistance (US$25.75 million equivalent including contingencies) R&R assistance (US$25.75 million consisting ofsmall civil works, small goods, rental/shifting allowances and training) will be paid to beneficiaries for each package through a consultative process. Payments will be made from the three project directors’ offices, and the Bank share (US$ 25.75 million) will be reimbursed on the basis ofStatement ofExpenditure (SOE). R&R assistance to individual PAPSwill be on average US$ 700-1000, will unlikely exceed US$2,000 equivalent per family, and procurement will include productive items such as landscaping, buildings for residences and stores, livestock, agricultural implements, seedlings, hand tools, mopeds, training and other services. These will be procured individually by the beneficiaries as per commercial practices, following shopping or direct contracting procedures as appropriate.
33 B3. Services (US$26.24 million equivalent including contingencies) Consultancy services will be procured for construction supervision, NGO services for R&R implementation, public awareness campaigns and various monitoring and evaluation activities. Shortlists of consultants for services estimated to cost less than US$ 500,000 equivalent per contract may be composed entirely ofnational consultants in accordance with the provisions ofparagraph 2.7 ofthe Consultant Guidelines. Sole sourcing ofconsultants may be required for small assignments ofdata collection or analysis in accordance with paragraphs 3.9 to 3.13 ofthe Guidelines. C. Capacity Assessment Procurement activities ofthe project will be undertaken by National Highway Authority ofIndia (NHAI) under the Ministry ofRoad Transport and Highways. NHAI carries out procurement of works, goods and services in-house by a division headed by a Chief General Manager. NHAI has prior experience ofexecution oflarge externally aided projects using loan funds from ADB and JBIC. Procurement assessments have been carried out during three appraisal missions for ongoing Bank funded projects. Each time, it has been determined that NHAI has the institutional capacity to carry out the project. Procurement decision making on all works and services packages for this project will be undertaken through (i)an Evaluation Committee, chaired by the Chief General Manager (EW 111) and composed of four NHAI staff plus one representative from the Ministry ofRoad Transport and Highways (ii)the NHAI Board which takes executive decisions on key procurement milestones as recommended by the Evaluation Committee. The NHAI Board has fully delegated authority for award and subsequent contractual decisions for all contracts without any limitation ofvalue. While a significant number ofstaff ofNHAI are familiar with the Bank’s procurement procedures, given a relatively high level ofstaff tumover, NHAI staff will attend appropriate procurement seminar conducted in India as necessary so that those working on the Bank project are fully conversant with Bank requirements. NHAI has a web-site www .iihai.org that provides procurement information. The overall project risk with respect to procurement is considered average. D, Procurement Plan The Borrower has prepared a Procurement Plan which outlines the procurement methods for the project and proposed procurement for the first 18 months ofthe project. This plan was agreed between the Borrower and the Bank during negotiations and is available at NHAI. It will also be available in the project files and in the Bank’s external website after Board approval. The Procurement Plan will be updated in agreement with the Bank annually or as required to reflect actual project implementation needs.
E. Frequency of Procurement Supervision Procurement supervision will be initially be high as the overwhelming majority ofworks and services contracts currently under procurement are subject to prior review. Thereafter, however, procurement supervision will occur as and when required.
34 F. Details of the Procurement Arrangement Goods and Works and non consulting services. (a) List of contract Packages which will be procured following ICB:
35 Consulting Services. (a) A list ofconsulting assignments with short-lists ofinternational firms is shown in the table
1 2 3 4 5 6 7 Ref, Description of Estimated Selection Review by Expected Comments No. Assignment cost US$ Method Bank (Prior / Proposals million Post) Submission Date 1 LMNHP-EW- 5.41 QCBS Prior 08-26-2004 Under II(WB)-SC1 evaluation 2 LMNHP-EW- 5.83 QCBS Prior 08-26-2004 Under II(WB)-SC2 evaluation 3 LMNHP-EW- 6.65 QCBS Prior 08-26-2004 Under II(WB)-SC3 evaluation 4 LMNHP-EW- 6.48 QCBS Prior 08-26-2004 Under II(WB)-SC4 evaluation 5 Concrete 0.50 QCBS Prior 03-31-2005 pavement applied research study I I I
(b) Consultancy services estimated to cost above US$200,000 for firms and NGOs per contract and Single Source selection ofconsultants for assignments estimated to cost above US$ 100,000 for firms and US$ 50,000 for individuals will be subject to prior review by the Bank.
36 Annex 9: Economic and Financial Analysis INDIA: Lucknow-Muzaffarpur National Highway Project
Analysis Process. Economic analysis was conducted during feasibility studies for each of the twelve highway upgradation packages. The total cost ofthe component, including contingencies, represents 99 percent ofthe total project cost. The improvement options considered included rigid and flexible pavement alternatives for the new two lanes and the most economically feasible solution was adopted. All analysis followed the conventional life cycle cost benefit methodology and was based on the established highway project evaluation model Highway Design and Maintenance Model 4 (HDM-4), the development ofwhich was partly supported by the World Bank. The Economic Internal Rate of Retum values computed for the most preferred alternative base cases varied from 16 to 34 percent. Table 9.1 Overall Economic Analysis
Present Value of Flows Fiscal Impact (US$ million) Economic Financial Taxes Subsidies Analysis Analysis Benefits: 1,506 Savings in road user (VOC and time) and maintenance costs
construction, land, resettlement and EMP
I Aggregate IRR: I I I
Summary ofBeneJits and Costs. The unit construction cost was based on the detailed cost estimates and Bill ofQuantities developed by design consultants. The base cost includes the cost ofland acquisition, R&R measures, environmental impact mitigation measures and utility relocation. The average cost is about US $ 1.5 million per km. Project benefits were evaluated using HDM-4. Using the model, the net reduction in total transportation costs was assessed over the analysis period, taking into account savings in road user costs primarily from reduced vehicle operating costs and travel time savings, along with changes in construction and maintenance costs. Existing traffic volume in the project corridor ranges from 13,500 Passenger Car Units (PCU) to about 25,000 PCUper day'4 and cost savings were attributed to the traffic stream on account ofreduced roughness, reduced traffic congestion and improved operating speeds. Due to lack ofdata on accident occurrence and costs, accident cost savings were not considered. However, based on similar studies elsewhere it is expected that accident cost savings will be relatively modest in comparison to other user cost savings.
l4 One car = 1 PCU and one 9 tonne truck = 2.5 PCUs.
37 Cases EIRR NPV % US$ million
Costs increased by 15% 24 945 Benefits decreased by 15% 23 793 Costs increased bv 15% and Benefits decreased bv 15% 21 719
Switching value of all critical items. The cost ofthe highway upgrading works would have to increase by 209 percent or the benefits to drop by 68 percent in order for the NPV to fall to zero. Distribution of benefits. Benefits accruing due to time savings typically account for about 20 percent ofthe total benefits and the balance is attributed to vehicle operating cost savings. About
38 Car Bus Truck Agricultural Motor Non motorized tractor trailer cycles vehicles 896 383 4,437 260 818 1,384
Financial Analysis Past Performance. Table 9.4 below provides some indicators ofrecent financial performance for NHAI. Note that the accounting policies ofthe NHAI have changed over this period so that the comparability across time is questionable. Generally, NHAI’s main thrust has so far been on rapid implementation ofthe NHDP; broader financial issues such as matching revenue with expenditure in the long run, improved disclosure, more closely linking budgeting with actual expenditure, treasury management and detailed analysis on reducing the cost of capital have been of secondary importance. However, as NHAI shifts from a project to a corridor management mode and gains more autonomy from the GOI, these aspects may be more emphasized. Table 9.4 Financial perfonnance of NHAI, FY98 to FY03, in Rs. Crore” Particular I FY98 I FY99 1 FY00 I FY01 I FY02 I FY 03” Total Income 1 50.4 I 77.9 j 105.8 I 35.8 I 55.3 1 64.8 1 Interest Income as % ofTotal Income 1 89.1 I 84.5 I 67.6 I 4.0 I 4.6 I 9.4 I
interest on user fees I I I I I Cash&Bankbalance as at 31 March I 757.05 1 802.91 I 1,823.77 I 3,511.00 I 3,997.70 1 8,847.87 * Not yet audited ** Agency charges are levied at 1 percent for all new works and 9 percent for maintenance works *** Will understate actual maintenance expenditure as all new works contracts include maintenance ofassets handed over to contractors.
15 Source “Final Report, Institutional Reforms and Computerized MIS in NHAI”, Price Waterhouse Coopers for NHAI, May 2004
39 Table 9.5 below provides details on the sources of funds for NHAI over the recent past. Table 9.5 Sources ofFunds, Rs Crore16 Source FY98 FY99 FYOO FYOl FY02 FY03 Capital (Schedule 1) 290.00 101.00 160.00 Capital Grant for EAP 337.79 163.17 491.60 460.80 886.76 1,202.00 Allocation from CRF - 1,032.00 1,800.00 2,100.00 2,000.00 Capital (Schedule 1) Loan from GO1 90.00 12.00 112.94 296.50 Loan from ADB 38.30 63.30 176.42 Bonds issued by NHAI 656.62 784.63 5,612.58 Total Funds raised 717.79 264.17 1,683.60 2,967.72 3,947.62 9,287.50 Total interest bearing debt 90.00 706.92 960.86 6,085.49
1 Debt as % oftotal funds 12.5 0 0 23.8 24.3 65.5 I raised during the FY
Type of Private funding Length, km Value of Assets, Cost to NHAI Rs. Billion Rs. Billion Annuity 476 23 3 Build Operate and Transfer 3 22 27 6
Special Purpose Vehicles 332 19 15 (SPVs) for port connectivity
Future Prospects. Making financial projections for NHAI is fraught with difficulty. With respect to the sources of funds, certain elements are reasonably predictable. For example, as the main implementing agency for new construction, it is expected that NHAI will continue to receive the bulk of the funds raised through the Central Road Fund (CRF) for national highways (which will increase in line with increased fuel consumption plus possibly raised tariffs). Further domestic and foreign borrowing can also be expected to continue at roughly the same levels as the past. There is more uncertainty, however, about the role that direct tolling may play in resource generation, as well as the level ofprivate funding, either toll or non toll based. Further, with respect to the uses offunds, the debt burden to date plus the Operation and Maintenance (O&M) expenses for the completed NHDP can be reasonably assessed. However, the quantum ofnew construction that the GO1 entrusts to NHAI is unpredictable. Historically, funding for new construction has tended to take precedence over funding for maintenance. Given the large backlog ofnew investment needed on the rest of the NH network, it is highly uncertain what expenditures that NHAI may be asked to make into the future'*.
l6Source, ibid 2004 " Source, 5 1" Monthly Report ofNHDP, IT and Planning Division ofNHAI, May 2004 '*Further recent analysis by the Bank on the funding of India's highways is available at wwu .liiglifi ayfinindia.org
40 With respect to maintaining the NHDP alone, the GO1 has decided that all completed four lane sections ofthe NHDP are to be tolled after opening to traffic using the toll rates as notified in 1998 by the MORTH under the National Highways Act of 1956. The GO1 has further decided that the revenue from tolling ofthe NHDP is to be used exclusively for two purposes: (i) to operate and maintain the NHDP; and (ii)to help discharge NHAI’s principle and interest payments for the 20 percent of externally aided projects that comes to it as a loan from GOI. NHAI’s projections for revenue and O&M expenses predict that tolling revenue should be adequate to meet these two requirements, although there will be some cross subsidy between the higher trafficked Golden Quadrilateral (GQ) and the North SoutWEast West (NS/EW) corridors as much of the latter is located in more remote and climatically harsh areas. Within this broad GO1 policy, NHAI is free to decide and then implement the operational modalities ofhow tolls are to be collected and used to operate and maintain the NHDP. With about 3,000 km of the GQ now complete and the remaining 2,500 km due for completion by end of 2005, there is now an imperative to determine and then implement an Operation, Maintenance and Tolling (OMT) plan for the GQ. Accordingly, NHAI has recently prepared a draft report on the “Tolling ofNational Highways - Estimates, Options and Strategies” dated May 2004 which is to be presented and approved by the Board. The broad thrust ofthis document is to recommend three categories of OMT mechanism to be applied to the GQ. (i) Ongoing BOT projects and other longer term concessions (about 1,000 km in all), for which procurement is already completed. (ii) Concessioning ofhigher trafficked sections ofbetween 500-800 km of corridor to OMT operators on a ten year basis, in aggregate at a zero net cost to NHAI (about 3,000 km in all). NHAI expects that they may be in a position to tender by early in 2005. (iii) Procurement of O&M contractors for 2-3 year periods, with toll collection outsourced to the same or a separate contractor, on shorter less heavily trafficked sections (about 1,600 km in all). The preparation ofbidding documents for about 600 km is now well advanced and NHAI intend to tender these by the end of2004”. With roughly 1,600 km ofcompleted sections already under maintenance by contract of one form or another, once the two latter categories are awarded, the immediate issue ofthe upkeep ofthe completed sections ofthe NHDP should be resolved. A decision on the modality for the NS/EW corridors is less urgent, with about 730 km complete (of which about 300 km is common with GQ) and only a further few hundred km planned for completion by the end of 2005. Pro-forma financial statements fkom FY 2005 to 2010 for NHAI are shown in Table 9.7 overleaf.
l9 The Bank is supporting the introduction of this form ofO&M contracting through the ongoing corridor management technical assistance project financed under TNHP.
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I:: ;; Annex 10: Safeguard Policy Issues INDIA: Lucknow-Muzaffarpur National Highway Project
Social Safeguard Management Assessment Process. The Resettlement and Rehabilitation (R&R) framework and Resettlement Action Plan (RAP) were prepared on the basis of a detailed Social Impact Assessment (SIA) that was carried out during project preparation. This comprised the following activities: (a) social screening and preliminary impact assessment; (b) feasibility studies; (c) census and baseline socio-economic survey ofthe potentially affected population; and (d) consultations at village and district levels. The SIA process began with social screening, undertaken, in conjunction with project feasibility studies. It provided inputs and guidance to the engineering design. The baseline census survey was undertaken in a 45 metre corridor to register and document the status (assets and sources of livelihoods) ofthe potentially affected population within the project impact area. A socio-economic survey was carried out to provide a baseline against which mitigation actions will be measured. It included a comprehensive examination ofpeople’s assets, incomes, important cultural sites, as well as other sources of support such as common property resources. The RAP relies on the proper enumeration ofproject affected people (PAP) with entitlement under the framework. The census survey established the cut-off date for entitlements to Non Titleholders under the project. For Titleholders, the cut off date is the date ofnotification under the applicable law. Social and environmental inputs were integrated to finalize the engineering designs. Social composition ofPAFs. A total of 33,880 families from 21,492 households will be affected by the project, out of which 6,998 families will be displaced. The social survey indicates that vulnerable group constitutes 38 percent of all titleholders - Scheduled Tribes account for less than 1 percent (6), Schedule Castes 9 percent (2,083), women-headed households 3 percent (612), and Below-Poverty-Line 26 percent (5,828). Public Consultation and Disclosure. The public consultations held at the community and district levels helped identify stakeholders, flesh out key social issues and formulate strategy. They also helped to: (i)provide options for minimizing displacement, reducing land acquisition and the number ofPAPS; (ii) make effective use ofcommunity knowledge in route alignments; (iv) raise awareness on road improvement and impacts; and (v) enhance involvement ofthe communities in the decision making process. In the formulation ofthe entitlement fi-amework, NHAI solicited the views and aspirations from the community through consultations. In addition, a separate survey carried out among truckers helped identify the prevalence of HIV/AIDS and presence of commercial sex workers on the project routes. Table 10.1 provides more detailed information on the consultations organized at different locations.
43 Project cycle stage No ofLocations Period (Dates) Feasibility Screening 9 31/06/2001 - 02/07/2001 Design Local/Village 110 15/12/2001 - 29/12/2002 District 3 11/01/2002 - 20/01/2002 RAP PreDaration State 1 25/2/2002
Project Impacts. Acquisition of agriculture land as well as residential and commercial structures will be required for upgrading and widening ofthe project road. This will lead to a loss ofproperty and income. A total of33,880 families will be affected, out ofwhich 15,683 will lose their agriculture land partially and 1,352 will become landless. Ofthe remaining 16,845 families, 5,646 will be displaced due to loss ofshelter or commercial structures and 11,199 families' structures will be partially affected. Relocation or resettlement is required for 3,869 common property structures such as schools, temples, mazhars, mosques, panchayat offices, police stations, hand pumps and wells. Minimization of adverse impacts. A primary consideration during project preparation was, within the limitations oftechnical requirements and cost effectiveness, to avoid or minimize negative impacts on people and their communities. Impacts have been avoided by careful shifting ofalignment depending upon the availability ofland. As far as feasible, concentric widening has been adopted in the built up stretches to minimize the impact on properties and land acquisition. Mitigation Plans. NHAI has prepared an R&R entitlement framework in accordance with the Bank's OP 4.12 (Involuntary Resettlement) to cover all affected people. This also recognizes the need to support sharecroppers, squatters, and vulnerable encroachers. The Resettlement Action Plan (RAP) is consistent with the R&R entitlement framework for the project. The framework addresses the nature ofentitlements to be given to Titleholders and Non-Titleholders. Resettlement will be required where residential and/or commercial buildings will be fully demolished or made uninhabitable. Rehabilitation will be required to improve or restore the standard ofliving. The RAP provides free plots for those willing to settle at resettlement sites and altemate arrangements for improving the livelihood ofaffected people. It also includes provisions for the relocation ofcommon property resources and enhancement ofexisting structures. Effective preventive plans for raising awareness on sexually transmitted disease, facilitating convergence ofnational and state health programs and road safety awareness will be implemented through contracting with suitable NGOs over the life ofthe project. Institutional Arrangements. The Environmental and Social Development Unit (ESDU) at NHAI's Corporate Office will coordinate the overall implementation and monitoring ofthe RAP. In the field, NHAI has set-up three Project Implementation Units. For each PIU, one Manager is responsible for the R&R process. NHAI has entered into contracts with five NGOs (including one for Gorakhpur Bypass) who mobilized in the first half of2004 to assist the PIUs in implementation ofthe RAP. District Level Committees (DLCs) have been set up to facilitate implementation ofthe RAP and to provide guidance on land acquisition and R&R issues. Representatives ofthe NGOs serve as members ofthe DLCs as well as the Grievance Redressal Committees (GRCs) to be set up in each district. Details on the institutional arrangements, roles and responsibilities ofimplementing staff, monitoring and evaluation ofthe project are provided
44 in the RAP. In addition, specific training modules on the management of social aspects throughout the project cycle have been included in the RAP. Monitoring & Reporting. Comprehensive indicators and reporting formats have been developed as part ofthe RAP, and will be applied during implementation. The proposed indicators relate to both progress and process monitoring by the NHAI. Internal monitoring will produce monthly and quarterly progress reports to be consolidated by one ofthe supervision consulting teams. External evaluators will be appointed at mid-term and before the end ofthe project to carry out independent impact evaluation. This will provide an independent assessment ofprogress made by the project to meet the objectives ofthe R&R framework. Budget. The budget for RAP implementation has been internalized into the total project costs. The following table shows: (i)the break up ofthe costs to be financed by the Bank and NHAI for the project and (ii)similar costs for land acquisition and RAP implementation on the Gorakhpur bypass, for which only R&R assistance is financed by the Bank. Table 10.2 RAP Base Costs for LMNHP and Gorakhpur Bypass, (Rs million)22
Environmental Management General. The project has undergone a full EA - environmental screening, environmental impact assessment, environmental management plans for each contract package, followed by an independent review to confirm that the preparation has complied with all relevant Bank requirements. OP4.01 on Environmental Assessment and OPNl1.03 on Cultural Properties have been triggered by the proposed project activities. The project has been designed and will be implemented in a manner that will ensure compliance with these policies. Consultations with various stakeholders have taken place during preparation and will continue well into the implementation phase ofthe project. These have taken the form ofone-on-one informal discussions, public meetings, and focus group discussions for disadvantaged groups. While the overall responsibility ofthe implementation as well as the compliance with the Bank’s safeguard policy rests with NHAI, supervision consultants in their capacity as Engineer will monitor and enforce environmental mitigation and enhancement measures during the day-to-day progress of works. Environmental Assessment. The EA began early in project preparation with environmental screening to feed into preliminary design. This helped decide on the best option under the
~~
22 Not including contingencies. 23 Financed under the main works contracts at 80 percent.
45 project constraints ofcarrying out improvements along the existing alignment as far as practicable. It identified any significant environmental issues to be addressed during design and construction. An environmental impact assessment carried out concurrently with design identified impacts and suggested mitigation measures for the chosen design option. In order to achieve effective mitigation while simplifying implementation, two part Environmental Management Plans (EMPs) have been prepared for the project. The first part is common for all contracts, while the second, tailored for each construction contract, details out the measures applicable for a particular works package. The EMPs will be executed in tandem with the road construction as they have been made a part ofthe main civil works contract. The cost ofmost of the mitigation measures has been included in main civil works contracts while a small part such as like monitoring ofpolluting activities bas been assigned a separate budget head. Cultural Properg. The Bank’s policy on cultural property has been triggered due to the undertaking ofearthworks in the vicinity ofthe ancient Buddhist pilgrimage center of Kushinagar, a World Heritage Site. Though the alignment is about 500 metres from the site designated as ‘protected’ by the Archaeological Department, the EA has proactively tried to minimize the impacts ofthe proposed improvements on the site. A short stretch ofthe boundary railing to be removed for the project will be replaced with an appropriate improvement. Enhancement plans to improve access to the complex has also been prepared. The EMP details out the precautions the contractor has to take while implementing the improvements along a 500 metre stretch ofthe road closest to the site. More generally, systematic procedures have been established for the contractor to deal with any ‘chance-finds’ during construction and have been included in the ‘generic’ EMPs. Several other less well-known cultural properties, which are locally important, are also included in the list of locations to be enhanced. The responsibility of monitoring the construction to ensure compliance with all the EMP requirements is with the Engineer, with any applicable official/governmental permission to be facilitated by the Employer . Forests. About 1 km ofthe road passes adjacent to the Zaidpur Reserved Forest in Uttar Pradesh. Most forests in the State, especially those in the plains ofthe east, have been affected by the presence and actions of human beings. This forest is no exception and no important floral or faunal species have been reported. However, the project seeks to protect whatever remains of this apparently degraded forest land. A fence has been proposed at the edge ofthe ROW to prevent any unauthorized access from the improved road. The cost ofproviding fencing has been included as an environmental management cost in the budget, Tree Plantation. A total of74,358 trees are expected be cut in the project. These include 67,962 trees (91 percent) from protected plantation, and 6,396 private trees (9 percent). Compensatory afforestation for the protected plantation will include planting ofabout 135,900 saplings by the Forest Departments ofUttar Pradesh and Bihar. The locations for block plantation and schedule will both be decided by the respective Forest Departments. NHAI has or will deposit upfront the cost ofthis compensatory afforestation, estimated at INR 120 million, with the respective Forest Departments. To offset the loss of private trees, and as per the NHAI highway landscape strategy, 159,750 saplings will be planted as avenue plantation at an estimated cost ofINR 80 million. A further 338,500 shrubshushes will be planted in the median, at estimated cost of INR 50 million. Median plantation (planting and maintenance for 3 years) will be included in the civil works contract. Avenue plantation (planting and maintenance for 3 years) will be through
46 separate arrangements with the Forest Departments ofUttar Pradesh and Bihar. NHAI will monitor the implementation of all plantation. Environment Capacity. NHAI has enhanced its environmental management capacity during the implementation ofthe NHDP, learning from both the implementation ofBank and non Bank funded projects. An environmental and social development unit is already functional at its headquarters with each ofthe implementing PIUS’staff including managers with responsibility for implementing environmental and social issues. Periodic reporting on progress of implementation also includes environmental management aspects. Using funds available under GTRIP, NHAI is in the process of establishing an Environmental Management System for the entire organization. Streamlined procedures for periodic monitoring and informing management decisions will be institutionalized as the system gets established. Environmental Clearances. The status ofrequisite clearances is shown in Table 10.3 below.
able 10.3 Status of hvironmental Clearances Clearance Relevant legislation
Environment Clearance Environmental Impact Assessment Ministry of Applied but for Ayodhya bypass Notification, 1994 issued under Environmental and not required Environmental Protection Act, 1986 Forest, GOI, New Delhi No objection certificate Environmental Impact Assessment Uttar Pradesh and Bihar Obtained for whole project Notification, 1994 issued under Pollution Control Boards Environmental Protection Act, 1986 Withdrawal of Ground Mandatory as per the notification of Water for construction Central Ground Water Authority Ground Water Boards
Sand Mining from river Environmental Protection Act, 1986 bed Department Felling of trees from Forests Conservation Act, 1980 Uttar Pradesh and Bihar Obtained ROW of existing NH-28 State Forest Department
47 Annex 11: Project Preparation and Supervision INDIA: Lucknow-Muzaffarpur National Highway Project
Planned Actual PCN review 06/16/2003 06/24/2003 Initial PID to PIC 06/2 6/2 00 3 06/24/2 0 0 3 Initial ISDS to PIC 06/25/2003 06/24/2003 Appraisal 05/03/2004 07/12/2004 Negotiations 08/02/2004 11/22/2004 Board/RVP approval 09/30/2004 Planned date of effectiveness 05/3 1/2005 Planned date ofmid-term review 03/3 1/2007 Planned closing date 06/3 0/20 10
Key institutions responsible for preparation of the project: Ministry ofRoad Transport and Highways National Highways Authority of India
Bank staff and consultants who worked on the project include:
Name Title Unit Anita Shrestha Program Assistant SASEI Amab Bandyopadhyay Transport Engineer SASEI Debabrata Chakraborti Procurement Specialist SARPS Gaurav Jo shi Consultant, Environment L.R. Kadiyali Consultant, Highway Engineer Mridula Singh Social Development Specialist SASES Piers Vickers Task Leader SASEI Priya Goel Financial Management Specialist SARFM Rajesh Singh Program Assistant SASEI Sangeeta Anand Program Assistant SASEI Sonia Chand Sandhu Environment Specialist SASES Sujit Das Highway Engineer SASEI Sushi1 Bahl Procurement Specialist SARPS Tapas Paul Environment Specialist SASES Venkat Rao Bayana Consultant, Social Development Zhi Liu Transport Economist EASIN
Bank funds expended to date on project preparation: 1, Bank resources: us$110,000 2. Trust funds: US$ 0 3. Total: us$110,000 Estimated Appraisal, Approval and Supervision costs: 1. Remaining costs to approval: US$35,000 2. Estimated annual supervision cost: US$ 85,000
48 Annex 12: Documents in the Project File INDIA: Lucknow-Muzaffarpur National Highway Project
Bank Staff Assessments
Financial Management Assessment of NHAI, June 2003
Preparation Mission Aide-Memoire - April 2003 Preparation Mission Aide-Memoire - November 2003
Appraisal Mission Aide Memoire - July 2004 India’s Transport Sector the Challenges Ahead, 2002 India: Financing Highways, 2004 India: Evaluating Bank Assistance for Transport Sector in the 1990’s, OED, 2001 Second National Highway Project, ICR, 2002
Other
NHAI Feasibility Studies for Four Laning ofNH28, October to December 2003 NHAI Detailed Project Reports for Four Laning ofNH28, October to December 2003 NHAI Independent Review and Consolidation of EIA, AMP and RAP for Lucknow to Ayodhya and Gorakhpur Bypass, August, 2004 NHAI Environment and Social Assessment Summary, Ayodhya to Muzaffarpur, July, 2004. NHAI Socio-economic Impact ofNational Highway on Rural Population, Asian Institute of Transport Development, for NHAI, 2003, ww\?i.aitd.net
49 Annex 13: Statement of Loans and Credits INDIA: Lucknow-Muzaffarpur National Highway Project
Difference between expected and actual Original Amount in US$ Millions disbursements
Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Ong. Frm. Rev’d
PO73370 2005 Madhya Pradesh Water Sector 396.00 0.00 0.00 0.00 0.00 394.02 0.00 0.00 Restructurin PO73651 2005 DISEASE SURVEILLANCE 0.00 68.00 0.00 0.00 0.00 68.81 0.00 0.00 PO77977 2005 Rural Roads Project 99.50 300.00 0.00 0.00 0.00 401.75 0.00 0.00 PO84632 2005 Hydrology I1 105.51 0.00 0.00 0.00 0.00 104.98 0.00 0.00 PO73776 2004 ALLAHABAD BYPASS 240.00 0.00 0.00 0.00 0.00 227.60 18.80 0.00 PO73369 2004 MAHAR RWSS 0.00 181.00 0.00 0.00 0.00 178.89 1.32 0.00 PO55459 2004 ELEMENTARY EDUCATION 0.00 500.00 0.00 0.00 0.00 415.20 66.09 0.00 PROJECT (SSA) PO50655 2004 RAJASTHAN HEALTH SYSTEMS 0.00 89.00 0.00 0.00 0.00 85.19 9.20 0.00 DEVELOPMENT PO82510 2004 Kamataka UWS Improvement Project 39.50 0.00 0.00 0.00 0.00 39.50 6.70 0.00 PO79865 2004 GEF Biosafety Project 0.00 0.00 0.00 1.oo 0.00 0.90 0.13 0.00 PO78550 2004 Uttar Wtrshed 0.00 69.62 0.00 0.00 0.00 69.53 0.00 0.00 PO75056 2003 Food & Drugs Capacity Building Project 0.00 54.03 0.00 0.00 0.00 55.59 9.32 0.00 PO71272 2003 AP RURAL POV REDUCTION 0.00 150.03 0.00 0.00 0.00 138.11 47.87 0.00 PO50649 2003 TN ROADS 348.00 0.00 0.00 0.00 0.00 332.99 21.89 0.00 PO67606 2003 UP ROADS 488.00 0.00 0.00 0.00 0.00 433.14 76.93 0.00 PO72123 2003 TechiEngg Quality Improvement Project 0.00 250.00 0.00 0.00 0.00 270.53 33.39 0.00 PO76467 2003 Chatt DRPP 0.00 112.56 0.00 0.00 0.00 117.10 -0.45 0.00 PO73094 2003 AP Comm Forest Mgmt 0.00 108.00 0.00 0.00 0.00 100.31 0.70 0.00 PO69889 2002 MIZORAM ROADS 0.00 60.00 0.00 0.00 0.00 53.82 6.00 0.00 PO40610 2002 RAJ WSRP 0.00 140.00 0.00 0.00 0.00 141.66 55.97 0.00 PO50668 2002 MUMBAIURBAN TRANSPORT 463.00 79.00 0.00 0.00 0.00 480.27 85.71 0.00 PROJECT PO71033 2002 KARN Tank Mgmt 0.00 98.90 0.00 0.00 0.00 109.41 25.56 0.00 PO72539 2002 KERALA STATE TRANSPORT 255.00 0.00 0.00 0.00 0.00 207.90 9.90 0.00 PO50647 2002 UP WSRP 0.00 149.20 0.00 0.00 0.00 160.49 92.32 0.00 PO50653 2002 KARNATAKA RWSS I1 0.00 151.60 0.00 0.00 0.00 162.25 45.22 0.00 PO74018 2002 Gujarat Emergency Earthquake 0.00 442.80 0.00 0.00 0.00 326.64 343.04 0.00 Reconstruct PO67216 2001 KAR WSHD DEVELOPMENT 0.00 100.40 0.00 0.00 0.00 104.56 66.96 0.00 PO38334 2001 RAJ POWER I 180.00 0.00 0.00 0.00 2.02 78.22 74.73 0.00 PO67543 2001 LEPROSY I1 0.00 30.00 0.00 0.00 0.00 3.01 9.63 0.00 PO71244 2001 Grand Trunk Road Improvement Project 589.00 0.00 0.00 0.00 0.00 422.63 265.63 0.00 PO70421 2001 KARN HWYS 360.00 0.00 0.00 0.00 0.00 262.13 104.13 0.00 PO50658 2001 TECHN EDUC I11 0.00 64.90 0.00 0.00 0.00 43.46 21.46 -0.75 PO55454 2001 KERALA RWSS 0.00 65.50 0.00 0.00 10.00 44.24 19.89 1.51 PO55455 2001 RAJ DPEP I1 0.00 74.40 0.00 0.00 0.00 50.06 10.14 0.00 PO35173 2001 POWERGRID I1 450.00 0.00 0.00 0.00 0.00 166.15 104.15 -6.16 PO59242 2001 MP DPIP 0.00 110.10 0.00 0.00 0.00 87.50 36.06 7.67 PO10566 2001 GUJARAT HWYS 381.00 0.00 0.00 0.00 0.00 237.42 167.42 44.64 PO09972 2000 NATIONAL HIGHWAYS I11 PROJECT 516.00 0.00 0.00 0.00 0.00 314.00 237.35 -6.00 PO49770 2000 REN EGY I1 80.00 50.00 0.00 0.00 0.00 86.83 53.26 10.63 PO10505 2000 RAJASTHAN DPIP 0.00 100.48 0.00 0.00 0.00 73.56 69.90 29.29 PO35172 2000 UP POWER SECTOR 150.00 0.00 0.00 0.00 0.00 10.56 10.56 0.00 RESTRUCTURING PROJECT PO45049 2000 AP DPIP 0.00 111.00 0.00 0.00 0.00 49.34 8.48 0.00 PO50657 2000 UP Health Systems Development Project 0.00 110.00 0.00 0.00 0.00 87.10 46.78 0.00 PO55456 2000 IN-Telecommunications Sector Reform 62.00 0.00 0.00 0.00 20.00 13.18 33.18 1.07 TA PO59501 2000 IN-TA for Econ Reform Project 0.00 45.00 0.00 0.00 0.00 40.07 9.90 5.07 PO50667 2000 UP DPEP 111 0.00 182.40 0.00 0.00 0.00 49.06 50.12 11.69 PO67330 2000 IMMUNIZATION STRENGTHENING 0.00 142.60 0.00 0.00 0.00 12.11 -75.97 0.00 PROJECT PO41264 1999 Wtrshd Mgmt Hills I1 85.00 50.00 0.00 0.00 0.00 20.50 23.03 0.00 PO45050 1999 RAJASTHAN DPEP 0.00 85.70 0.00 0.00 0.00 28.30 25.93 13.68 PO45051 1999 2ND NATL HIVIAIDS CO 0.00 191.00 0.00 0.00 0.00 58.88 56.69 0.00 PO50651 1999 MAHARASH HEALTH SYS 0.00 134.00 0.00 0.00 16.96 49.25 61.63 -1.56 PO50646 1999 UP Sodic Lands I1 0.00 194.10 0.00 0.00 0.00 73.89 63.41 0.00 PO50637 1999 TN URBAN DEV I1 105.00 0.00 0.00 0.00 0.00 15.97 15.97 10.32 PO38021 1998 DPEP 111 (BIHAR) 0.00 152.00 0.00 0.00 0.00 19.62 71.59 18.23 PO10496 1998 ORISSA HEALTH SYS 0.00 76.40 0.00 0.00 0.00 48.99 44.67 -2.52 PO 10561 1998 Natl Agr Technology 96.80 100.00 0.00 0.00 18.00 37.28 60.30 32.60 PO49385 1998 AP ECON RESTRUCTURIN 301.30 241.90 0.00 0.00 0.00 91.95 95.77 13.80 PO35827 1998 WOMEN & CHILD DEVLPM 0.00 300.00 0.00 0.00 0.00 178.01 168.71 4.15 PO10473 1997 TUBERCULOSIS CONTROL 0.00 142.40 0.00 0.00 13.04 47.93 65.97 19.57 PO44449 1997 RURAL WOMEN'S DEVELOPMENT 0.00 19.50 0.00 0.00 6.72 5.74 13.44 4.81 PO10511 1997 MALARIA CONTROL 0.00 164.80 0.00 0.00 46.50 40.46 87.12 40.73 Total: 5,790.61 6,042.32 0.00 1.00 133.24 8,094.54 3,133.60 252.47
INDIA STATEMENT OF IFC's Held and Disbursed Portfolio In Millions ofUS Dollars
Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 2005 AP Paper Mills 35.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2002103 ATL 1.oo 0.00 0.00 0.00 0.68 0.00 0.00 0.00 2003 Alok 17.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1994 Ambuja Cement 0.00 4.94 0.00 0.00 0.00 4.94 0.00 0.00 1992193 Arvind Mills 0.00 3.33 0.00 0.00 0.00 3.33 0.00 0.00 2003 BHF 10.37 0.00 10.37 0.00 2.16 0.00 2.16 0.00 2001/04 BILT 0.00 0.00 15.00 0.00 0.00 0.00 15.00 0.00 2001 BTVL 0.00 10.00 0.00 0.00 0.00 10.00 0.00 0.00 2003 Balrampur 15.12 0.00 0.00 0.00 15.12 0.00 0.00 0.00 2001 Basix Ltd. 0.00 0.98 0.00 0.00 0.00 0.98 0.00 0.00 198419 1 Bihar Sponge 0.00 0.05 0.00 0.00 0.00 0.05 0.00 0.00
51 2001/03 CCIL 1SO 0.00 0.00 0.00 0.59 0.00 0.00 0.00 1997 CEAT 8.50 0.00 0.00 0.00 8.50 0.00 0.00 0.00 1990192 CESC 16.36 0.00 0.00 36.48 16.36 0.00 0.00 36.48 2004 CGL 15.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2004 CMScomputers 10.00 10.00 2.50 0.00 5.00 0.00 0.00 0.00 2002 COSMO 7.50 0.00 0.00 0.00 7.50 0.00 0.00 0.00 2004 Caim Energy 40.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1995 Centurion Bank 0.00 0.77 0.00 0.00 0.00 0.77 0.00 0.00 2003 DQEL 0.00 1.50 1.50 0.00 0.00 1SO 1 SO 0.00 2003 Dewan 12.23 0.00 0.00 0.00 12.23 0.00 0.00 0.00 1997 EEPL 0.00 0.03 0.00 0.00 0.00 0.03 0.00 0.00 EXB-STG 0.31 0.00 0.00 0.00 0.31 0.00 0.00 0.00 1995 GE Capital 0.00 4.39 0.00 0.00 0.00 4.39 0.00 0.00 2001 GTF Fact 0.00 2.39 0.00 0.00 0.00 2.39 0.00 0.00 1994 GVK 0.00 7.45 0.00 0.00 0.00 7.45 0.00 0.00 1994198100 Global Trust 0.00 0.36 0.00 0.00 0.00 0.36 0.00 0.00 1994 Gujarat Ambuja 0.00 4.88 0.00 0.00 0.00 4.88 0.00 0.00 2003 HDFC 100.00 0.00 0.00 100.00 100.00 0.00 0.00 100.00 2001 HIWEL 0.00 1.64 0.00 0.00 0.00 1.64 0.00 0.00 1998 IAAF 0.00 1.45 0.00 0.00 0.00 1.29 0.00 0.00 1995100 ICICI-SPIC Fine 0.00 2.79 0.00 0.00 0.00 2.79 0.00 0.00 1998 IDFC 0.00 15.46 0.00 0.00 0.00 15.46 0.00 0.00 2001 IIEL 0.00 3.13 0.00 0.00 0.00 2.06 0.00 0.00 1990193198 IL & FS 0.00 3.12 0.00 0.00 0.00 3.12 0.00 0.00 1992195 IL&FS VC 0.00 0.60 0.00 0.00 0.00 0.60 0.00 0.00 2000 IndAsia Fund 0.00 14.39 0.00 0.00 0.00 0.00 0.00 0.00 1996 India Direct Fnd 0.00 6.33 0.00 0.00 0.00 5.84 0.00 0.00 1985190194 India Lease 0.00 0.30 0.00 0.00 0.00 0.30 0.00 0.00 2001 Indian Seamless 10.50 0.00 0.00 0.00 6.00 0.00 0.00 0.00 1993 Indo Rama 7.86 0.00 0.00 0.00 7.86 0.00 0.00 0.00 Indo Rama (IRTL) 0.00 0.71 0.00 0.00 0.00 0.71 0.00 0.00 1996 Indus I1 0.00 1.88 0.00 0.00 0.00 1.88 0.00 0.00 1992 Indus VC Mgt Co 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00 1992 Info Tech Fund 0.00 0.60 0.00 0.00 0.00 0.60 0.00 0.00 1992194 Ispat Industries 7.50 0.00 0.00 0.00 7.50 0.00 0.00 0.00 2001 Jetair 0.00 0.00 15.00 0.00 0.00 0.00 15.00 0.00 2003 L&T 50.00 0.00 0.00 0.00 50.00 0.00 0.00 0.00 1990193 M&M 0.00 0.03 0.00 0.00 0.00 0.03 0.00 0.00 2002 MMFSL 10.05 0.00 7.56 0.00 10.05 0.00 7.56 0.00 2003 MSSL 0.00 2.29 0.00 0.00 0.00 2.20 0.00 0.00 2001 MahInfra 0.00 10.00 0.00 0.00 0.00 0.70 0.00 0.00 2003 Max Healthcare 19.44 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1996199100 Moser Baer 24.20 9.68 0.00 0.00 24.20 9.68 0.00 0.00 1992196197 NICCO-UCO 1.88 0.13 0.00 0.00 1.88 0.13 0.00 0.00 2001 NIIT-SLP 6.05 0.00 0.00 0.00 0.04 0.00 0.00 0.00 2003104 NewPath 0.00 3.00 0.00 0.00 0.00 2.03 0.00 0.00 2003 Niko Resources 30.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 2001 Orchid 0.00 4.27 0.00 0.00 0.00 4.27 0.00 0.00 1997 Owens Coming 11.56 0.00 0.00 0.00 11.56 0.00 0.00 0.00
52 2004 Powerlinks 73.43 0.00 0.00 0.00 3.56 0.00 0.00 0.00 1995 Prism Cement 11.25 5.02 0.00 6.00 11.25 5.02 0.00 6.00 2004 RAK India 20.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1995104 Rain Calcining 10.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1997 SAPL 0.00 0.07 0.00 0.00 0.00 0.07 0.00 0.00 2001 SBI 50.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1997100 SREI 8.50 0.00 0.00 0.00 8.50 0.00 0.00 0.00 1995 Sara Fund 0.00 5.94 0.00 0.00 0.00 5.94 0.00 0.00 200 1/03 Spryance 0.00 1.oo 0.00 0.00 0.00 1.oo 0.00 0.00 2004 Sundaram Finance 43.19 0.00 0.00 0.00 43.19 0.00 0.00 0.00 2000/02 Sundaram Home 10.35 0.00 0.00 0.00 10.35 0.00 0.00 0.00 1998 TCW/ICICI 0.00 3.92 0.00 0.00 0.00 3.92 0.00 0.00 2002 TML 50.00 0.00 0.00 0.00 50.00 0.00 0.00 0.00 1989 UCAL 0.00 0.03 0.00 0.00 0.00 0.03 0.00 0.00 2004 UPL 17.50 0.00 0.00 0.00 17.50 0.00 0.00 0.00 1996 United Riceland 8.13 0.00 0.00 0.00 8.13 0.00 0.00 0.00 2002 Usha Martin 21.00 3.60 0.00 0.00 21.00 3.60 0.00 0.00 2001 Vysya Bank 0.00 3.66 0.00 0.00 0.00 3.66 0.00 0.00 1997 WIV 0.00 1.97 0.00 0.00 0.00 1.97 0.00 0.00 1997 Walden-Mgt India 0.00 0.02 0.00 0.00 0.00 0.02 0.00 0.00 Total portfolio: 792.78 158.11 51.93 142.48 481.02 121.64 41.22 142.48
Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 2005 AP Paper Mills 0.00 0.01 0.00 0.00 2000 APCL 0.01 0.00 0.00 0.00 2004 CGL 0.01 0.00 0.00 0.00 2004 CIFCO 0.00 0.00 0.02 0.00 2001 GI Wind Farms 0.01 0.00 0.00 0.00 2005 H&RJohnson 0.03 0.00 0.00 0.00 2003 Niko Resources 0.01 0.00 0.00 0.00 2004 Ocean Sparkle 0.00 0.00 0.00 0.00 2005 SW Ltd. 0.02 0.00 0.00 0.00 2004 Sealion Sparkle 0.01 0.00 0.00 0.00 2002 TML 0.02 0.00 0.00 0.00 2001 Vysya Bank 0.00 0.00 0.00 0.00 Total pending commitment: 0.12 0.01 0.02 0.00
53 Annex 14: Country at a Glance INDIA: Lucknow-Muzaffarpur National Highway Project
POVERTY and SOCIAL South Low- India Asia income Development diamond' 2003 Population, mid-year (millions) 1,064.4 1,425 2,310 Life expectancy GNI per capita (Atlas method, US$) 540 510 450 GNI (Atlas method, US$ billions) 569.8 726 1,038 T Average annual growth, 1997-03 I Population (%J 1.6 1.8 1.9 GNI Gross Labor force (%J 2.1 2.3 2.3 per Most recent estimate (latest year available, 1997-03) capita - enrollment Povertv (% of population below national poverty line) 29 I Urban population (% of total population) 28 28 30 Life expectancy at birth hears) 63 63 58 Infant mortality (per 1,000 live births) 65 68 82 Child malnutrition (% ofchildren under5) 47 48 44 Access to improved water source Access to an improved water source (% ofpopulation) 84 84 75 I Illiteracy (% ofpopulation age 75+J 39 41 39 Gross primary enrollment (% of school-age population) 99 95 92 India Low-income group Male 107 103 99 Female 90 88 85
KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1983 1993 2002 2003 Economic ratios. GDP (US$ billions) 212.3 273.9 510.2 603.3 Gross domestic investmenVGDP 19.7 21.3 22.8 23.8 Trade Exports of goods and servicedGDP 6.0 10.0 15.2 14.5 Gross domestic savingdGDP 17.6 22.5 24.2 22.2 Gross national savingslGDP 18.4 23.1 26.3 24.4 T Current account balancelGDP -1.7 -0.6 0.7 1.4 Interest pavments/GDP 0.4 1.3 0.7 18.3 Total debffGDP 15:l 34.4 20.6 19.6 Total debt servicelexports 16.5 25.2 13.9 18.3 1 Present value of debffGDP Present value of debffexports Indebtedness 1983-93 1993-03 2002 2003 2003-07 (average annual growth) x GDP~~ 5.4 5.9 4.6 8.3 6.0 India Low-income group GDP per capita 3.3 4 2 3.0 6.7 4.6
STRUCTURE of the ECONOMY 1983 1993 2002 2003 (% of GDP) Agriculture 366 310 227 222 Industry 258 263 266 266 Manufacturing 163 161 156 158 Services 376 428 507 512 04 Private consumption 71.8 67.4 65.0 64.9 98 99 00 01 02 10.6 11.4 12.5 12.8 General government consumption w*m'- GDI *GDP Imports of goods and services 8.1 10.0 15.6 16.0
(average annual growth) Agriculture 3.1 2.4 -5.2 9.1 30T I Industry 64 59 64 67 20 Manufacturing 61 60 62 73 lo Services 67 81 71 07 52 45 -0 8 76 Private consumption .lol98 99 00 01 02 03 General government consumption 56 71 31 99 Gross domestic investment Imports of goods and services
*The diamonds show four key indicators in the country (in bold) compared with its income-group average If data are missing, the diamond will be incomplete
54 India
PRICES and GOVERNMENT FINANCE 1983 1993 2002 2003 Domestic prices (X change) Consumer prices 14.4 5.0 4.1 3.7 Implicit GDP deflator 8.9 9.5 3.5 3.7 Government finance (% of GDP. includes current grants) Current revenue .. 17.5 17.5 18.7 i 98 99 00 01 02 Current budget balance .. -4.3 -6.0 -4.9 I ** GDPdeflator *CPI Overall surpiusideficit .. -8.3 -10.2 -9.3
TRADE 1983 1993 2002 2003 Export and import levels (US$ mill.) (US$ millions) Total exports (fob) 9,661 22,683 52,512 62,952 00.000 Tea 348 814 1,432 1,321 I Iron 434 888 1,996 2,341 75,000 4 I Manufactures 5,234 16,657 40,245 47,616 Total imports (ci0 16,575 26,739 65,422 79,658 Food 1,694 327 2,411 3,059 Fuel and energy 4,703 5,754 17,640 20,570 Capital goods 3,069 6,243 13,498 17,132 97 98 99 w 01 02 Export price index (1995=100) 101 104 88 93 import price index (1995=100) 106 96 96 100 0 Exports E8 Imports O3 Terms of trade (1995=100) 96 109 92 94 I
BALANCE of PAYMENTS 1983 1993 2002 2003 Current account balance to (Oh) (US$ millions) GDP Exports of goods and services 13,141 27,947 77,475 90,568 Imports of goods and services 18,767 31,468 83,620 96,590 'T Resource balance -5,626 -3,521 -6,145 -6,022 Net income -527 -3,270 -4,935 -4,703 Net current transfers 2,558 5,265 14,807 18,885 Current account balance -3,595 -1,526 3,727 8,160 Financing items (net) 2,777 10,160 13,253 8,820 Changes in net reserves 818 -8,634 -16,980 -16,980 Memo: Reserves including gold (US$ millions) 5,649 19,254 75.428 111,648 Conversion rate (DEC, iocal/US$) 10.3 31.4 48.4 46.0
EXTERNAL DEBT and RESOURCE FLOWS 1983 1993 2002 2003 (US$ millions) 1 Composition of 2003 debt (US$ mlll.) Total debt outstanding and disbursed 32,139 94,342 105,210 118,075 iBRD 1,779 10,123 5,141 4.128 IDA 7,820 16,192 21,642 22,632 Total debt service 2,618 8,345 13,042 20,545 iBRD 246 1,509 3,029 2,048 IDA 91 294 637 693 Composition of net resource flows Official grants 380 368 410 559 Official creditors 1,360 1,754 -3,657 -2,765 Private creditors 1,318 2,634 -1,861 -1,983 Foreign direct investment 0 668 3.61 1 3,137 Portfolio equity 0 3,567 944 11,355 World Bank program Commitments 1,072 929 1,523 1,169 A - IBRD E - Bilateral
Disbursements 1,345 1,716 1,465 1,557 B - IDA D ~ Other multilateral F - Private Principal repayments 120 964 3,196 2,403 C - IMF G - Short-term Net flows 1,225 753 -1,730 -846 Interest payments 216 838 470 338 Net transfers 1,009 -86 -2,200 -1,184
55