India Appraisal of the Second Calcutta R LL Urban Development Project

ReportNo. 1662a-IN India Appraisalof theSecond Calcutta r LL UrbanDevelopment Project Public Disclosure Authorized

November23, 1977 Urban ProjectsDepartment

FOR OFFICIAL USE ONLY U Public Disclosure Authorized Public Disclosure Authorized

Public Disclosure Authorized Document of the World Bank

This document hasa restricteddistribution and may be used by recipients only in the performanceof their official duties.Its contents may not otherwise be disclosedwithout World Bankauthorization. CURRENCY EQUIVALENTS

Except where otherwise indicated, all figures are quoted in Indian Rupees (Rs)

US$1.00 = Rs 8.6 Rs 1.00 5 = US$0.12 Rs 1 lakh (10 = US$11,630 Rs 1 crore (10 ) = US$1.16 million

MEASURES AND EQUIVALENTS

1 millimeter = 0.39 inches (in) 1 meter (m) 2 = 39.37 inches (in) or 3.28 ft 1 square meter ( ) = 10.8 square feet (sq ft) 1 cubic meter (m ) = 35.3 cubic feet (cu ft) 1 kilometer (km) 2 = 0.62 miles (mi) 1 square kilometer (km ) = 0.386 square miles 1 hectare (ha) = 2.47 acres (ac) or 10,00 square meters 1 liter (1) = 1.057 quarts liquid or 0.26 US gallon (gal) or 0.908 quart dry (qt) 1 liter per capita per day (lcd) = 0.26 US gallons per capita per day 1 cubic metSr per second (m /sec) = 86.4 million liters per day or 22 million US gallons per day I million liters per day (mld) = 0.01 cubic meters per second I million liters per hour (ml/hr) = 0.24 cubic meters per second

PRINCIPAL ABBREVNIATIONSAND ACRONYMS

GOI Government of India GOWB Government of West Bengal CMDA Calcutta Metropolitan Development Authority CC Calcutta Corporation CIT Calcutta Improvement Trust HIT Howrah Improvement Trust CWMSA Calcutta Metropolitan Water and Sanitation Authority WBHB West Bengal Housing Board WIBSIC West Bengal Small Industries Corporation CSSI Government of West Bengal - Directorate of Cottage and Small-Scale Industries I and W Government of West Bengal - Irrigation and Waterways Directorate SSE Small-scale enterprises DMS Department of Municipal Services

FISCAL YEAR

April 1 - March 31

./ FOR OFFICIAL USE ONLY INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Table of Contents

Page No.

SUMMARY AND CONCLUSIONS ...... i-vi

I. INTRODUCTION ...... 1

II. BACKGROUND ...... I A. Urban Development in West Bengal ...... 1...... B. Calcutta Metropolitan District ...... 2

III. THE PROJECT ...... 4 A. Main Features ...... 5 B. Capacity to Implement the Second Project; Risks and Uncertainties ...... 8 C. Detailed Description ...... 9

IV. PROJECT COSTS, EXECUTION AND FINANCING ...... 19 A. Cost Estimates ...... 19 B. Execution ...... 20 C. Financing ...... 22 D. Cost Recovery and Service Pricing ...... 24 E. Procurement and Disbursement ...... 27 F. Supervision ...... 29

V. ORGANIZATION, MANAGEMENT & FINANCES OF CMDA, CALCUTTA CORPORATION AND LOCAL BODIES ...... 29 A. Calcutta Metropolitan Development Authority ..... 29 B. Municipal Administration and Finance in the CMD ...... 34

VI. JUSTIFICATION ...... 40

VII. RECOMMENDATIONS ...... 45

This report is based on the findings of Messrs. D.B. Cook (Chief of Mission), Ms. C. Gochenour, J. Pettigrew, S. Whitehead and K. Willen assisted by K. Huddart, F. Flintoff and B. Menezes (consultants) who visited India to commence the appraisal of this project in December 1976. A follow-up mission in February/March 1977 consisting of D.B. Cook, M. Mould, L. Casazza, W. Schaefer, F. Kahnert, K. Willen, W. Bertelsmeier, assisted by F. Flintoff, B. Menezes, K. Huddart and H. Lubell (consultants) completed the appraisal.

This document has a restricteddistribution and may be used by recipients only in the performance of their officialduties. Its contents may not otherwise be disclosed without World Bank authorization. -2-

ANNEXES TITLE Page No.

1. Area Development ...... 0 48 2. Bustee Improvement ...... 78 3. Water Supply, Sewerage and Drainage ..o..o ...... 86 4. Solid Wastes Management and Sanitary Latrines ...o ...... 97 5. Primary School Construction, Health and Small-Scale Enterprise Components ...... 107 6. Municipal and Anchal Development ...... 133 7. Traffic and Transportation ...... o ...... 137 8. Consulting Services, Technical Assistance and Training .... 152 9. Municipal Administration and Finances in the CMD ...... 156 10. Calcutta Metropolitan Development Authority ...... 166 11. Disbursement Schedule, Project Implementation Schedule, and Key Administrative, Financial, Legislative and Technical Assistance Actions ...... 175 12. Detailed Cost Estimates, Five-Year Investment Program, Equipment to be Financed and Executing Agencies ...... 182

CHARTS

17580 CMDA - Proposed Organizational Structure .... 186

PHOTOGRAPHS

1. Existing Conditions for Washerman, East Calcutta ...... 187 2. Street Flooding in Low-Lying CMD Area ...... 188 3. Loading Solid Wastes from an Overflowing Street Dump .... o...... 189 4. Typical Bustee Conditions ...... 189 5. Congestion in the Howrah Fish Market ...... 190

SKETCHES

17572 Economically Weaker Sections I & II - Rental Housing ...... 191 17573 Economically Weaker Section III - Ownership Housing .o ... 192 17574 Economically Weaker Section IV - Ownership Housing ... o.... 193 17575 Lower Income Group - Ownership Housing ...... o...... 194 17576 Isometric of Cluster of Core Houses of Types EWS III, EWS IV and LIG .. 195 17577-8 Howrah Fish and Pan Market Development (2) ...... 196/197

MAPS

12873 State Districts within Calcutta Metropolitan District 12874 Transportation and Traffic Improvement Schemes 12875 Typical Bustee Improvement Plan 12876 Primary School Coverage in Calcutta Corporation Area 12877 Institutional Health Services in Calcutta Corporation Area 12878 CMDA Water Supply Service Districts and Major Facilities 12879 CMD Drainage Basins and Sewerage Zones 13016 East Calcutta Area Development 13017 Typical Four Hectare Residential Cluster INDIA

SECOND CALCUTTA URBAN DEVELOPMENTPROJECT

SUMMARYAND CONCLUSIONS i. The Government of India (GOI) has sought IDA assistance for a second urban development project in Calcutta to assist the Government of West Bengal (GOWB) to improve institutions responsible for delivering, maintaining and operating urban services and systems, to improve fiscal policy and management, and to institute an effective system for monitoring urban investments in the Calcutta Metropolitan District (CMD). Through the project, existing municipal services would be rehabilitated by management and system reforms; prior investments would be better utilized by the construction of secondary and tertiary systems to improve access to urban services, including housing; and employment opportunities would be created for small-scale enterprises. The project would be instrumental in identifying affordable project designs for developing new areas in accordance with the governzent s policy of spacial decentralization and in mobilizing private capital.

ii. Nearly 10 million people now inhabit Calcutta, a 70 km long metropolis. It is the pre-eminent city of eastern India, capital of West Bengal and a metropolis to the 150 million who live and work in the nine states that comprise the least urbanized of India's major regions. From Orissa to the south in a great arc through Tripura to the east, one-quarter of India's total population lives in a largely rural landscape. Of the 21 million of them who live in urban areas, 46% live in the CM[, the remainder in the small cities and towns that dot the 640,000 square kilometers of the region. Approximately 5.5 million people living in the CMD reside in slums and the whole area is characterized by deficient urban services. Only two river bridges serve motorized vehicles, trams and pedestrians and the economic development of the CMD is thereby severely constrained. Facilities for pedestrians, the dominant travel mode, are very poor.

iii. The population growth rate in Calcutta is quite moderate compared with other cities in developing countries. Nevertheless, the provision of urban services has not kept pace with demand, particularly for low-income groups. The existing housing programs of GOWB are small and serve mainly middle-income groups. The role of the informal business sector, which probably accounts for over 50% of employment in the ClMD, is not well understood. Current health programs remain fragmented, uncoordinated and are not linked to the curative facilities. There are serious deficiencies in the provision of primary school facilities and only 66% of eligible children are currently enrolled.

iv. The proposed credit would be the second to assist in Calcutta's development. The $35 million credit under the first Calcutta project (427-IN) of 1973 responded to the need to rapidly increase and coordinate urban investments in the CMD in order to start to address the serious deficiencies in all urban services. It supported about 40 out of 130 schemes being implemented by Calcutta Metropolitan Development Authority (C14DA)and represented 34% of CMDA's budget for the period 1973-76. - ii -

The proposed second project differs from the first in many ways. It is large and, together with the remaining portion of the first credit, represents over 77% of CMDA's identified program for 1977/78-1981/82. About 55% of expenditures made during the period 1973-1976 were allocated to utility infrastructure; this reduces to about 33% under the proposed second project. The changes allow a larger proportion to be spent on low income area development schemes, bustee improvement, primary school and health facilities, small-scale enterprise programs, traffic engineering and on solid wastes management, all of which will facilitate project benefits reaching the urban poor. The proposed second project places a much greater emphasis on operations and maintenance and it aims to considerably improve maintenance of water supply facilities, sewers and drains, roads and footways and solid wastes management, particularly in the Calcutta Corporation (CC) area. v. The project would provide:

(a) residential, industrial and commercial sites and services development involving a low-cost integrated approach to providing accommodation, community facilities and employment opportunities. Residential accommodation will be provided for about 45,400 people, 70% of whom belong to families earning less than the average family income;

(b) redevelopment of the howrah fish and pan (betel leaf) market;

(c) participation in an ongoing bustee improvement program which provides basic infrastructure services in approximately 420 slums covering 1,400 ha and serving about 1,104,000 people, at a cost of US$40.6 per capita;

(d) construction of 40 new primary schools and the remodelling and extension of 400 existing schools;

(e) training, equipment and buildings for a pilot health program serving 175,000 people;

(f) US$3.5 million equivalent of institutional credit 1/ and studies to assist approximately 4,800 very small- scale businessmen, i.e. an average loan of US$725;

(g) fringe area and municipal water supplies to provide 90 lcd to about 900,000 persons; improvement to tubewell supplies in the central area; and renovation of the Palta- Tallah water system to supply 730 Mld to Calcutta Corpora- tion;

1/ To be provided by selected commercial banks. - iii -

(h) provision of sewers, including house connections, to some areas of Calcutta Corporation and Howrah presently served by bucket latrines; cleaning of 650 km of partially blocked sewers in Calcutta Cor- poration area; improvement of storm water drains; and installation of over 12,000 prefabricated sanitary latrines to replace bucket latrines;

(i) rehabilitation of the system of refuse collection, street cleaning and nightsoil collection in Calcutta Corporation area, population 3.15 million people; and pilot projects to develop long-term solutions to solid wastes management;

(j) provision of water supply, drainage and sanitation and road works in the rural fringe (anchal) areas of the CMD;

(k) traffic engineering with emphasis on pedestrians and slow-moving vehicles, new roads and road improvements to facilitate economic development;

(1) technical assistance to State Government agencies, Calcutta Corporation and the Calcutta Metropolitan Development Authority.

Related key management and financial reforms in both CMDA and municipal government are summarized in paras vi - x. vi. Progress under the first credit has been slow, primarily due to deficiencies in project budgeting, sanctioning and monitoring, civil engineering tendering procedures, delays in land acquisition and inadequate management information. The first project was redefined in 1976 and is now expected to be about 90% completed in 1979 instead of 1976 as envisaged at the time of original appraisal. CMDA, however, has been operating for only six years in an urban environment that was completely run-down and a political environment that has forced the Authority to stretch its program until it became too thin. The problem is essentially one of program management, and throughout 1976 GOWBand IDA have had a continuing dialogue concerning this problem. GOWB has introduced senior management changes and a Chief Executive and a top management team consisting of Directors of Planning, Operations, Finance and Administration have been appointed. In addition, GOWB has permitted CMDA to develop a five year (1977-82) investment program and is encouraging the development by CMDA of modern project appraisal, monitoring, long-term budgeting and budget control techniques. vii. The municipal corporations and municipalities (local authorities) in CMD are responsible for development, operation and maintenance of most urban infrastructure services. Their organization, management and finances are in serious disorder. Property tax, their principal fiscal base, has - iv -

been eroded by adverse legislation, litigation and inefficiency, so that many authorities have no adequate means of supporting their services. The first project included steps to initiate municipal reform, and the proposed second project includes further measures which are urgently needed to upgrade the technical and financial capability of municipal bodies to operate and maintain services and facilities, particularly those created under the CMDA program. In Calcutta Corporation, the departments responsible for solid wastes management and road maintenance will be strengthened; a water and sewerage fund will be established; water and sewerage charges will be delinked from the consolidated property tax system and the operation and maintenance of these services put on a rational footing; and studies will be commenced to improve the management and financial systems and stores handling and control procedures. viii. The State Government has decided to take over responsibility for property assessment. A Central Valuation Board will be established for the whole state, and will commence by evaluating properties in the CMD. The first revaluation should be completed by March 31, 1982 and financial benefits should be available in 1982/83. In the meantime, the GOWB will require local authorities to annually increase the proportion of local government expenditures financed from local revenues. The State Government will subvent any financial shortfall necessary to achieve a minimum satisfactory level of operation and maintenance of municipal services.

ix. The above measures will improve the performance of CMDA in planning, programming and delivering urban services and start a process of improvement in municipal administration and finance which will gradually improve urban management throughout metropolitan Calcutta. Recent changes and proposed actions by GOWB should enable CC to finance over 80% of local expenditures from local self-generated revenues by 1981/82, and at the same time, all other local authorities should be financing at least 50% by 1981/82. x. The extent of technical assistance and advisory services to be provided to CMDA, CC and the GOWB is considerable. The services to be provided include:

(a) assistance to the West Bengal Department of Municipal Services (DMS) for local government training and development of a central valuation system;

(b) assistance to CC in management and financial systems and the collection and disposal of solid wastes; and

(c) assistance to CMDA in management, planning and programming of capital projects; a ground water survey and study and assistance in the design of area development, roads, sewerage and traffic engineering schemes undertaken by CMDA. - v - xi. Project costs total about US$184 million, including contingencies. Land acquisition costs amount to approximately US$11.7 million 1/ and foreign exchange costs are estimated at about US$24 million or 13% of project costs. Cost estimates are based mostly on final engineering designs and on recent bids for similar works and equipment.

xii. The project will be executed by GOWB agencies (mainly CMDA), nominated commercial banks, Calcutta Corporation and other municipal agencies. Where inter-agency cooperation is required, e.g., in area development and small-scale enterprise support programs, the GOWB will establish inter-agency working groups. CMDA will be responsible for coordination and monitoring of project components.

xiii. The proposed IDA credit of US$87 million would finance 50% of total project cost, excluding taxes and duties (US$5.1 million) and the cattle compounds at East Calcutta 2/. The proceeds of the credit would be made to the Government of India which would pass the US$87 million on to GOWB on its standard terms and conditions. In addition, GOI will ensure that selected commercial banks will make US$3.5 million equivalent available as loans to small-scale entrepreneurs.

xiv. Contracts for equipment estimated at about US$13 million equivalent, net of taxes, will be awarded on the basis of international competitive bidding (ICB) in accordance with IDA guidelines. A 15% margin of preference or customs duty, whichever is lower, would be granted to local manufacturers when evaluating bids. Contracts for equipment that is unsuitable for international competitive bidding, estimated at about US$8.5 million equivalent net of taxes, will be awarded on the basis of competitive bidding advertised locally in accordance with procedures acceptable to IDA. Contracts for civil works amount to an estimated US$85.5 million equivalent. ICB will be sought for individual civil works contracts estimated to cost US$3 million equivalent or more and totalling about US$7.5 million equivalent. A 7-1/2% margin of preference would be granted to local contractors when comparing bids. Other contracts for civil works, with an estimated total value of about US$78 million equivalent will be awarded on the basis of local competitive bidding advertised on an all-India basis and in accordance with procedures acceptable to IDA, or undertaken by force account. These works tend to be small and scattered and would not be of interest to international contractors. Suit- able civil works will be "sliced and packaged" into contract packages of not less than US$1.1 million equivalent; works estimated to cost less than US$200,000 equivalent may be carried out by force account.

xv. Retroactive financing not exceeding US$5 million is recommended for (i) expenditures incurred from April 1, 1977, for detailed design work in area development (US$0.50 million) and solid wastes management (US$0.35 million), design and ongoing works for roads and traffic engineering (US$0.90 million), ongoing works in bustees (US$1.20 million) and in water supply (US$0.60 million);

1/ Net of contingencies.

2/ Being financed by the Netherlands Government. and (ii) expendituresincurred from October 1, 1977, for ongoing works in municipal and anchal development (US$0.25 million), the sanitary latrine component (US$0.10 million), sewerage and drainage (US$0.75 million), and technical assistance (US$0.35million). These activities are necessary to ensure program continuity and to secure expeditious project implementation. xvi. The project would alleviate urban poverty by reducing costs and improving access to basic services. The small-scale enterprise support component will create about 8,500 jobs with a 15 year minimum life at a cost, including extension services and other costs, of approximatelyUS$425 per job. Investments in civil works will employ approximately40,000 persons at a capital cost of US$1,125 per job. xvii. The economic rate of return is estimated at 20% on the average for those components of the project for which benefits could be quantified. For the remaining components, the project ensures that the investmentspro- posed are the least cost. Both the first project and the proposed second project form part of ongoing programs and it is not easy for them to be seen as discrete projects which can be justified in isolation. Certain investments based on studies undertaken in the 1960's are already committed or partially completed and it is necessary to finish them. As far as can be ascertained, however, the compositionand size of individual components are as near an optimal mix as is possible, taking into account the previous planning effort, Calcutta's needs, Government and Bank Group objectives, institutionalcapa- bilities and financial constraints. xviii. The project is suitable for an IDA credit of US$87 million equivalent. INDIA

SECOND CALCUTTAURBAN DEVELOPMENTPROJECT

I. INTRODUCTION

1.01 The Government of India (GOI) has sought IDA assistance for a second urban development project in Calcutta to assist the Government of West Bengal (GOWB) to improve institutions responsible for delivering, maintaining and operating urban services and systems, to improve fiscal policy and management, and to institute an effective system for monitoring urban investments in the Calcutta Metropolitan District (CMD). Through the project, existing municipal services would be rehabilitated by management and system reforms; prior investments would be better utilized by the construction of secondary and tertiary systems to improve access to urban services, including housing; and employment opportunities would be created for small-scale enterprises. The project would be instrumental in identifying affordable project designs for developing new areas in accordance with the government s policy of spacial decentralization and in mobilizing private capital. This would be the third IDA Credit for urban development in India and the second credit for assistance to Calcutta. The first credit to assist Calcutta was made in 1973 and the other credit, to help finance urban development in Madras, was approved in March 1977. A Bank loan was made in 1976 to the Bombay Metropolitan Region Development Authority to improve bus transport and metropolitan planning in Greater Bombay.

1.02 The proposed project was first suggested in 1975 by the GOI and GOWB and was prepared by the Calcutta Metropolitan Development Authority (CMDA) assisted by state and local government agencies. It continues the work already started under the first credit and expands the CMDA program into employment creation, health services and primary school construction.

1.03 This report is based on the findings of Messrs. D.B. Cook (Chief of Mission), Ms. C. Gochenour, J. Pettigrew, S. Whitehead and K. Willen assisted by F. Flintoff, K. Huddart and B. Menezes (consultants) who visited India to commence the appraisal of this project in December 1976. A follow-up mission in February/March 1977 consisting of D.B. Cook, M. Mould, L. Casazza, W. Schaefer, F. Kahnert, K. Willen, W. Bertelsmeir assisted by F. Flintoff, K. Huddart, H. Lubell and B. Menezes (consultants) completed the appraisal.

II. BACKGROUND

A. Urban Development in India and West Bengal

2.01 India's present urban population of 130 million, about 21% of the total population of 625 million, is expected to approach 300 million by -2- the year 2000, representing annual rates of increase of 3R-3.5%. Some 4.3 million persons are now added to the urban population annually. Compared with an urban population growth rate of 5.5% for the world as a whole, the present Indian growth rate of 3.3% is low. However, the growth is impressive in absolute terms. Much of the growth is taking place in the 133 medium-sized cities with populations of 100,000 or more, which grew at an average rate of 6.6% annually between 1961-71 and which account for 52% of all urban population. If present trends continue, there would be 43 Indian cities with populations of more than one million by the year 2000. The nine largest cities with populations of more than one million are growing at an average rate of 3.3%.

2.02 A national policy to deal with rapid urban growth and to explicitly incorporate urban development into a broader economic development framework is still at an early stage of discussion and is largely based on physical concepts. Prime responsibility for urban development rests at the state level and many states, including West Bengal, are making serious efforts to develop strategies for the sector. However, local government institutions and planning mechanisms are generally weak. Inadequate resource mobilization at the local government level has resulted in serious deficiencies in the provision and maintenance of urban service facilities.

2.03 West Bengal, with a population of 44.3 million in 1971, is the second most densely populated state in India after Kerala. In 1976 its population approximated to 49 million with about 13 million (or 27%) living in urban areas. Calcutta, the capital of West Bengal, is the largest city in India and the population living in the CMD in 1977 is approaching 10 million or over 70% of West Bengal's urban population.

B. Calcutta Metropolitan District

Perspective

2.04 The CMD, stretching north and south for almost 70 km along both sides of the Hooghly River, is not a single administrative unit, but it has been delineated as a planning region through executive action by GOWB. It remains the dominant urban center in eastern India, which comprises nine states with a population of about 150 million. The estimated 9.7 million people living in the CMD represent 46% of the total urban population of the region; the remainder live in the small cities and towns that dot the 640,000 square kilometers of the region. The CMD is the slowest growing metropolis in India, yet it continues to add about 200,000 persons annually to its population in spite of continuing serious deficiences in environment, infrastructure, public services and employment. Most of the CMD population is concentrated east of the Hooghly River with over 3 million people living within the Calcutta Corporation (CC) administrative area. The west bank population is about 2.3 million concentrated mainly in the Howrah and Bally municipalities opposite CC. Population gross density in the CC area aver- ages about 330 persons per ha (reaching densities of 3,000 persons/ha in parts), compared with 150-180 in municipalities close to CC and 20-25 in smaller towns and rural areas on the fringe of the CMD. -3-

2.05 Manufacturing and service activities predominate in the CMD. In the manufacturing sector, a major shift has taken place over recent decades, from dominance by the jute industry to dominance by the engineering industry. Service activities proliferate throughout the area, particularly in transport, storage and communications. In the CMD as a whole, employment in 1971 was about 2.6 million, a modest increase over the 1961 figure of 2.4 million, with about 1.4 million in services, 1 million in manufacturing and 0.2 million in agriculture and mining. At present, the estimated labor force participation rate in the CMD is about 33%, and the unemployment rate 10%, resulting in about 320,000 unemployed persons, disregarding an unknown number of marginal and part-time employees.

2.06 A significant part of the CMD's population are migrants mainly from eastern India and refugees from the former East Pakistan. The majority of the migrants are young men seeking employment. Refugees, who have become permanent residents and comprise middle class families with much higher education and literacy levels than other migrants, seek clerical, managerial and professional employment. The influx of migrants has abated in recent years, and the present increase is estimated at 0.6% per annum. This increase is more or less balanced by outward migration from the CMD.

The Bustee (Slum) Problem

2.07 Approximately 5.5 million people or 57% of the CMD population presently live in unserviced conditions. In Howrah/Bally, for example, the entire area of 7,500 ha suffers from a lack of sewerage facilities. The GOWB through CMDA has commenced two programs to improve the physical conditions of bustees (Annex 2) and refugee (displaced persons) colonies (para 2.08). Not all the unserviced areas are officially classified as slums, and hence are not covered under these programs. About 2.15 million people living in blighted unserviced areas, outside bustees or displaced persons settlements, who do not qualify for assistance under the existing programs because their housing structures are of permanent materials.

2.08 Refugee settlements are scattered throughout the CMD. The GOI has undertaken various programs aimed at settling the refugees, but there still remains an "officially recognized" residual problem. This has recently been subject to review, and a report prepared in 1976 indicated that at the end of the fourth 5-year plan (March 1974), only 111 urban and rural colonies of displaced persons had been improved (by the provision of minimal services) or developed, out of a total of 1,570 settlements in the state of West Bengal.

The Planning and Programming Effort

2.09 The present effort to rehabilitate and augment basic urban services in the CND was triggered by a major cholera epidemic in 1958. WHO/UNDP cooperation produced in 1966 a "Master Plan for Water Supply, Sewerage and Drainage - Calcutta Metropolitan District, 1966-2001." Concurrently, the Calcutta Metropolitan Planning Organization, with the support of the Ford - 4 -

Foundation, produced a series of studies on other urban sectors in the CMD, including studies of the administration. These studies, including the WHO Master Plan, were consolidated in 1966 in a "Basic Development Plan for the Calcutta Metropolitan District 1966-86" (BDP).

2.10 No serious effort to implement the BDP was made until 1971, when C`DA was established with a Rs 160 crores four-year budget. In the six years to date, CMDA has endeavored to respond to the needs and challenges of Calcutta and has constructed an impressive number of schemes. The bulk of the work done to date, however, has gone into major works and until recently, little attention has been given to combining secondary and tertiary systems with primary infrastructure. An attempt has been made to undertake some social programs using voluntary agencies to complement CMDA's infrastructural activities, but the social programs have never been properly funded or adequately coordinated and have had little impact.

2.11 The BDP proposed a 'bi-polar' metropolis with modest expansion of the existing core at Calcutta and Howrah and new investment to the north at Kalyani and Bansberia where the land is higher, drainage better and where ample supplies of groundwater are available. Unfortunately, major investments in a new town at Kalyani have produced underutilized housing and infrastructure. The first five years of CMDA investments have given this investment little support.

2.12 CMDA established its own Directorate of Planning and in 1976 published a "Development Perspective and Investment Plan." This document addressed the questions of urban expansion, economic activity and employment infrastructure and, discarding the 'bi-polar' proposal, recommended instead a poly-centric strategy. It proposed a balanced distribution of population and employment and greater diversity in employment opportunities to support recent initiatives to stimulate the economy of this region. The multi- sectoral approach embodied in the CMDA program is designed to allow the city to perform its metropolitan and regional level functions and is seen as an important component of the efforts towards revival of the region as a whole. Future planning efforts will be in two parts; one will concentrate on the slum problems and service deficiencies, the other will address the problem posed by growth. The necessary planning analyses resulting from this work will also enable other related issues to be quantified and programs for their alleviation developed, i.e., in the areas of employment, health, education and shelter.

III. THE PROJECT

3.01 The objectives of the project are to improve institutions responsible for delivering, maintaining and operating urban services and systems, to improve fiscal policy and management, and to institute an effective system for monitoring urban investments in the CMD. Through the project, existing municipal services would be rehabilitated by management and system reforms; - 5 - prior investmentswould be more efficientlyutilized by the constructionof secondary and tertiary systems to improve access to urban services, including housing; and employment opportunitieswould be created for small-scaleenterprises. The project would be instrumentalin identifyingand implementing affordableproject designs for developing new areas in accordancewith the government'spolicy of spatial decentralizationand in mobilizing private capital. The project seeks to develop solutions to some of the broader problems of the urban poor particularlyin the sectors of shelter, employment and basic services and represents a significantnext step in the development of CMD. Nevertheless,it will not be possible to achieve satisfactory standards of urban service provision and management during the period of the proposed project, and the ongoing process of rectifying the infrastructural, urban management and fiscal deficienciesin CMD will need to continue for some considerabletime.

A. Main Features

3.02 To achieve these objectives,the project comprises in the period July 1977 to March 1982, the following subcomponents:

(a) Residential,industrial and commercial sites and services development involving a low-cost integrated approach to providing accommodation,community facilities and employment opportunities. Residential accommodationwill be provided for about 45,400 people, 70% of whom belong to families earning less than the average family income in the CMD;

(b) redevelopmentof the Howrah fish and pan (betel leaf) market;

(c) participationin an ongoing bustee improvementprogram which provides basic infrastructureservices in approximately 420 slums covering 1,400 ha and serving over 1,104,000people, at a cost of US$40.6 per capita; 1/

(d) constructionof 40 new primary schools and the remodelling and extension of 400 existing schools;

(e) training, equipment and buildings for a pilot health program serving 175,000 low-income people;

1/ Including contingenciesand design costs. -6-

(f) US$3.5 million equivalent of institutional credit 1/ and studies to assist approximately 4,800 very small- scale businessmen in bustees and area development components of the project, i.e. an average loan of US$725;

(g) improved fringe area and municipal water supplies to provide 90 lcd to over 900,000 people, improvement of tubewell supplies in the central area and additional renovation works for the Palta-Tallah water system to supply 730 mld to Calcutta Corporation;

(h) provision of sewers, including house connections to some areas of Calcutta Corporation and Howrah presently served by bucket latrines; cleaning of 650 km of partially blocked sewers in Calcutta Corporation area; improvement of storm water drains; installation of over 12,000 prefabricated sanitary latrines to replace bucket latrines;

(i) rehabilitation of the system of refuse collection, street cleaning and nightsoil collection in Calcutta Corporation area, population 3.15 million people; pilot projects to develop long-term solutions to solid wastes management;

(j) provision of water supply, drainage and sanitation and road works in the fringe (anchal) areas of the CND;

(k) traffic engineering with emphasis on pedestrians and slow-moving vehicles, new roads and road improvements to facilitate economic development; and

(1) technical assistance to State Government agencies, Calcutta Corporation and the Calcutta Metropolitan Development Authority.

Relationship and Comparison with the First Calcutta Urban Development Project

3.03 The $35 million credit (427-IN) under the first Calcutta project responded to the need to rapidly increase and coordinate urban investments in the CMD in order to start to address the serious deficiencies in all urban services. It supported about 40 out of the 130 schemes in the CMDA program which were sanctioned during the period 1969/70-1973/74. Progress under the first project has been slow, mainly because of inexpeditious procedures for project sanctioning, budgeting and monitoring, and civil works tendering, land acquisition problems and deficiencies in program management (paras 5.01 - 5.10). The first project was redefined in 1976 and several schemes have yet to be completed. The project is now expected to be about 90% completed in 1979 instead of 1976 as envisaged at the time of original appraisal.

I/ To be provided by selected commercial banks. -7-

3.04 The proposed second project differs from the first project in many respects. It is large and, together with the first project, represents over 77% of identified works in CMDA's program for 1977/78-1981/82. The remaining 23% consists largely of water supply works, not considered for inclusion in the proposed project because of an international dispute which existed at the time of appraisal between India and Bangladesh concerning the Farakka Barrage; real estate development at Sealdah and Salt Lake, where the development can attract funds from commercial banks; and a miscellaneous group of minor schemes. The percentage mix of works executed in the period 1973- 1976 1/ as compared with the proposed second project is set out below.

CMDA Program Proposed Second 1973-1976 Calcutta Project (%) (%)

Area Development 7 10 Bustee and Refugee Colony Improvement 7 15 Primary Schools and Health 5 1 Small Enterprise Support - 2 Water Supply 15 7 Sewerage and Drainage 17 14 Solid Wastes Management 1 6 Sanitary Latrines 2/ 1 1 Municipal and Anchal Development - 4 Roads 23 12 Traffic Engineering - 4 Road Maintenance Equipment - 2 Technical Assistance and Training 1 2 Sub-total 77 80

Contingencies Physical 8 6 Price 15 14 Total 100 100

In the above period, about 55% of expenditures were allocated to schemes for water supply, sewerage and drainage and roads, and this reduces to about 33% under the proposed second project. The change accommodates area development schemes, bustee improvement and municipal and anchal development, school building, health facilities, small-scale enterprise programs, traffic engineering and increased spending on solid wastes management and technical assistance, all of which will facilitate project benefits reaching the urban poor. The proposed second project places a much greater emphasis on operation

1/ Originally estimated implementation period for first project.

2/ Villages and rural fringe areas. - 8 - and maintenance and system reforms to be implemented during the course of project implementation and will considerably improve maintenance of water supply facilities, sewers and drains, roads and footways and solid wastes management, primarily in the CC area.

3.05 Subprojects have been carefully scrutinized to assess their capacity to respond to the dominant problems of Calcutta which can be put under two broad headings -- residual and growth. Residual problems are those associated with the existing situation i.e. slums, environmental sanitation, unemployment, health, education and urban management (including operation and maintenance). Growth problems refer to the issues which arise in absorbing 200,000 persons per annum.

B. Capacity to Implement the Second Project; Risks and Uncertainties

3.06 Forecast annual project expenditures, at 1977 prices, for the total CMDA program (IDA I, IDA II and non-IDA projects) during the next five years are:

1977/78 1978/79 1979/80 1980/81 1981/82 …------RsCrores ------

38 47 50 48 40

This compares with CMDA's program expenditures which in 1971/72 and 1972/73 amounted to over 50 crores at 1977 prices.

3,07 In the period 1973/74-1976/77 the CMDA program was expanded in an attempt to mobilize widespread public support but as a result of inadequate planning, programming and monitoring systems, and because of budget constraints, the earlier momentum could not be maintained and annual project expenditures decreased (para 5.01).

3.08 In order to overcome these problems in program management and coordination, critical management and systems reforms will be instituted under the proposed second project. CMDA has reorganized its top management structure; established specialized cells to improve supervision of individual components in the proposed project; and has agreed to install new management information, accounting and financial control systems. The Management Infor- mation and Monitoring Unit in CMDA is preparing performance measures in order to closely monitor physical and financial performance under the project. CMDA's annual final accounts will be submitted to independent audit and the auditor's report would be provided to IDA. In addition, GOI and GOWB has authorized the introduction of a five-year investment program to ensure continuity in program financing; improved civil works procurement procedures will be instituted (para 4.23); and CMDA has agreed to utilize the services of local consultants as required. - 9 -

3.09 Nevertheless, almost half the land required for project implementation (mainly for area development) has not yet been acquired, though most of this has been notified under the land acquisition acts of 1894 and 1948. Moreover, certain aspects of the project--especially area development, small- scale enterprise support, solid wastes management and traffic engineering--are new to the CMDA program and will require careful planning and supervision and the amount of technical assistance required will be substantial. However, GOI, GOWB and CMDA consider the proposed project to be of strategic importance to the development of CMD, and have demonstrated an earnest concern to improve performance in program implementation by the expeditious institution of reforms in program management outlined above. In view of this, it is felt that the whole effort will receive sustained political support at both the federal and state levels.

C. Detailed Description

Area Development

3.10 Sites and Services. As part of the sites and services component of the project, one new center will be developed at East Calcutta, and another site at West Howrah will be acquired and filled to facilitate future development. The development of these two areas will commence the process of giving physical expression to the poly-centric development strategy in the CMD, which in the long term envisages the development of some 22 'nodal points' on both sides of the river to relieve congestion in the central core area. West Howrah is approximately 8 km from the Central Business District (CBD) and adjacent to an established small-scale industrial community. East Calcutta is also strategically located about 7 km from the CBD and presents an excellent opportunity to provide facilities for washermen, cattlemen and 5,000 buffalo. The opportunity will also be taken to explore fish farming on the lakes formed from excavations needed to provide land fill, and methane gas will be produced from buffalo wastes (Annex 1).

3.11 About 302 ha of land will be filled, and about 118 ha will be developed at East Calcutta. The component includes:

(i) residential lots and rental units for a target population of about 45,400 persons: Preparation of 8,187 residential plots serviced with access roads, drainage and individual water and sewer connections. Seven different lot sizes will be available to correspond to the effective demand of the target population. Approximately 5,840 core housing units provided with toilet, plinth wall and service connections at a unit cost of Rs 2,000 1/ (US$230) will be available to families with incomes between Rs 150 - Rs 600 per

1/ Excluding supervision costs and contingencies. - 10 -

month. 684 fully built dormitory units with shared sanitary facilities for the lowest income groups are proposed together with serviced sites for 483 rental units 1/; the latter are to be reserved for a small percentage of the higher income population who are expected to prefer this type of accommodation.

(ii) industrial and commercial plots and facilities: Preparation and servicing of 10 ha of industrial land and 3 ha of commercial land together with the provision of 50 industrial sheds. The project will provide 200-400 loans up to Rs 20,000 for assistance to the small-scale entrepreneurs. Financing for larger-scale entrepreneurs will be available through normal commercial channels. About 16 ha of land 2! will also be made available at East Calcutta for the tanks, drying areas and cattle compounds required to secure the commercial needs of 1,700 washermen and 500 milkmen.

(iii) community facilities: Construction of 13 double-shift primary and two secondary schools. Three health centers and a multi- purpose center, market, police, fire and postal facilities, together with areas of open space, will be developed.

(iv) trunk infrastructure: Water supply will initially be from on-site tubewells and storage tanks; the distribution networks will eventually be connected to the trunk distribution system. At East Calcutta sewage will be pumped to oxidation ponds and gravitate via lakes formed from borrow-pits to drainage canals. Surface and storm water drainage will discharge into existing canals. Additional distribution lines will be provided at East Calcutta for electric supply.

3.12 Almost the whole range of income groups will be addressed by providing serviced plots and rental units. The emphasis on strategic development of commercial and industrial areas, combined with differential land pricing within the project on the basis of location and plot size, permits the EWS I and II 3/ rental units to be rented at Rs 20 per month and the smallest

1/ The structure costs of the middle and higher income rental units are not included in the project.

2/ In addition to purely residential requirements, and net of borrow-pits.

3/ EWS I and II are the lowest income groups in the Economically Weaker Section (EWS) of the population. - 11 - lots (44 m ) with sanitary cores and building loans to be sold at a price of about Rs 3,150 (US$366) each, with full recovery of allocated costs still being achieved. Eighty percent of the lots and rental units will be allocated to the lower income groups (LIG) and below; the remainder are to be provided to middle and higher income groups thus promoting social interaction and greater variety.

3.13 It is envisaged that bed spaces will be available for subrental in the EWS I and II rental units and in this way the project should reach down to households below the 10th percentile on the income curve. A 99-year lease will be sold for the serviced lots, and after an initial downpayment of approximately 5-10%, payments will be spread over a period of 20 years at an interest rate of 8.5%, which is the existing rate of interest throughout West Bengal for low-income housing.

3.14 Redevelopment of Howrah Fish and Pan (Betel Leaf) Markets. This subcomponent consists of the redevelopment of approximately 2.32 ha of prime location land transversed by the new Buckland Road Bridge, adjacent to Howrah Railway Station and the adjoining bus and tram terminals. Fifty percent of all land uses in the area are fish and pan markets together with related services such as ice and fish packing. The markets receive fish and pan originating in Bihar, Uttar Pradesh, Tamil Nadu, Orissa and West Bengal, which are hand carried from Howrah Station. The area houses approximately 3,500 mainly low-income people, and other land uses include mixed commercial, industrial, hotels, warehouses, institutional and religious. Approximately one-half of the land is used for car/truck repair, buffalo compounds, hawkers, garbage disposal, alleys, roadways and open space. Redevelopment of the market would eliminate the extremely unsanitary and congested environment which presently results in a major health hazard not only to the occupants directly but to the city residents as a whole. Redevelopment will also be instrumental in creating direct and indirect employment opportunities in this prime location whereas relocation of the markets would disrupt established trading patterns and transport linkages and cause extreme economic distress to a poorer section of society.

3.15 Redevelopment of the whole site is to be carried out in three phases at a cost of approximately Rs 15 crores. 1/ Phase 1 is estimated to cost Rs 5.21 crores, but IDA's participation would be restricted to a partial involvement covering basic infrastructure and the redevelopment of the fish and pan markets, in a first phase sub-project costing Rs 1.56 crores. This should provide the basis for participation of the commercial banks in the completion of the scheme.

Bustee Improvement

3.16 The bustee improvement component involves participation in an ongoing program begun in 1970. Under the first phase of the program which

1/ Includes contingencies. - 12 - ended in 1973/74, 1,144,000 persons 1/ were covered. A four--year second-phase program commenced in 1974/75 and the project proposes to extend this to 1981/82 to serve an additional 1,104,000 persons in over 420 bustees, occupying 1,400 ha of land. Of this additional bustee population, about 880,000 persons will be directly served under the project.

3.17 The proposed improvements include:

(a) water supply, with one tap or standpipe for each hutment (5-10 huts);

(b) bathing facilities, with one bathing facility per hutment;

(d) pre-cast concrete sanitary latrines with septic tanks or sewer connections on the basis of one latrine to 25 persons;

(e) security lighting; and

(f) filling of unhygienic ponds and rebuilding of garbage vats.

The very large infrastructure investments now being made will require extensive and continuous maintenance. Assurances were obtained during negotiations that GOWB, in consultation with CMDA and appropriate local bodies in CMB, will (i) prepare or cause to be prepared by December 31, 1978, a detailed plan of operation for bustee maintenance and (ii) implement it or cause it to be implemented from April 1, 1979 (see Annex 2).

Primary School Construction and Remodelling

3.18 This component is designed to help redress the imbalance which exists in primary school provision between the State of West Bengal (80% coverage), the CMD (66% coverage) and bustees (below 60% coverage), as against the national target of 88% primary school enrollment.

3.19 Under this component approximately 40 new primary schools, average size 300 pupils, will be built and 400 recognized and/or unrecognized 2/

1/ This figure includes approximately 300,000 persons living in refugee colonies.

2/ Recognized schools are those funded by GOWB or Calcutta Corporation. Unrecognized schools are those funded privately or supported by voluntary agencies. 20 of the new schools will be five-room structures costing Rs I lakh each and 20 will be ten-room structures costing Rs 2 lakhs each. - 13 - schools will be remodeled and extended (usually by the addition of two or three classrooms). The low coverage of primary school facilities in the CMD and Calcutta Corporation is not only a function of limited land, but is also influenced by child employment. The locations of the new and upgraded schools still remains to be established; there is ample evidence of deficiencies but this needs to be correlated with demand and land availability. The criteria on which the location of schools will be selected have been agreed with CMDA.

Health

3.20 This project subcomponent would provide a project headquarter unit, located in the Health Directorate, GOWB, two primary health centers and 10 subsidiary health centers and integrate outreach and ongoing environmental sanitation, nutrition and family planning programs with an improved patient referral system to serve a target population of 175,000. The following services will be provided:

(a) Periodic Health Examinations: Regular health care examination, curative and, in more serious cases, referral services to poly-clinics 1/ and to hospitals;

(b) Outreach Services: Community volunteers (nine per subsidiary health center) organized by the medical officer in charge and working through local leaders, who will post and update family health records by routine home visits (one every four months);

(c) Family Planning and Maternal and Child Health Services: IUD insertion, vasectomies, distribution of pills, etc. Routine antenatal and postnatal care and follow-up services for mothers and children;

(d) Immunization: The entire target population of 175,000 will be immunized against smallpox, diphtheria, tetanus, whooping cough, typhoid and polio;

(e) Nutrition: All malnourished cases will be identified and referred to the nearest feeding centers where nutrition education will also be available. No food will be distributed directly through the proposed health facilities.

3.21 The primary health centers will be buildings of approximately 200 m floor area costing Rs 3.0 lakhs each, including land and equipment, and

1/ Poly-clinics have been built or planned on the basis of 1:750,000 population. They are equipped with laboratories and an x-ray unit. They have four beds for short-stay patients and are staffed by doctors trained in various medical subspecialties. - 14 -

subsidiary health centers will be buildings of approximately 80 m floor area costing Rs 1 lakh each, including land and equipment, to be located within three miles of a primary health center. Each subsidiary health center and primary health center will be assigned to its nearest poly-clinic and hospital for referral purposes. Primary health centers and subsidiary health centers will be sited in areas where none exist at present, but where there are improved water and sanitary facilities and where there is an ongoing nutrition feeding program.

Small-Scale Enterprises Component

3.22 In 1976, the CMDA decided that its traditional function of providing physical infrastructure should be complemented by efforts to support the economic activities of the slum population in order to directly raise their employment opportunities and incomes. Therefore, CMDA undertook surveys/ studies to prepare a program which would cater to small-scale enterprises (SSEs). The target group would be limited to the very small entrepreneurs who do not have adequate access to technical and financial assistance currently provided by government institutions and commercial banks and who are located in (i) the surveyed selected ten bustees (i.e. manufacturing units and services such as shops, restaurants and rickshaw pullers), (ii) the five selected industrial subsectors (i.e. light engineering, garment workers, small leather tanners, veneer makers and clay modellers) and (iii) the proposed industrial estate in East Calcutta. The maximum capital employed per eligible SSE would be limited to Rs 100,000 (US$11,600), which is less than one-tenth the official Indian small-scale industry definition, and the maximum loan size to Rs 20,000 (US$2,325). Survey results revealed that the surveyed units fulfill all criteria for a desirable target group: (i) they belong to the lowest income groups in Calcutta; the average annual per capita income in the slums was about Rs 720 (US$84) in 1976; (ii) these units are labor-intensive with capital employed per worker ranging from Rs 1,000 to Rs 10,000; (iii) the operations of these units are profitable (profit on capital employed ranged from 2% to 15% per month); and (iv) many units cited lack of finance for working capital as a major constraint in their operations.

3.23 The objectives of the proposed SSE component of Rs 30 million, which would be largely experimental, are: (i) to provide financial and technical assistance, now available mainly to the larger units of the small- scale sector, to the existing smaller units primarily in the informal sector, particularly through provision of working capital finance; (ii) to identify new entrepreneurs; and (iii) to gather experience and information through a monitoring program for a second phase SSE project which, through additional studies, would concentrate on an enlarged target group and subsector-specific support programs. The CMDA surveys permitted the formulation of an SSE project component which is summarized with its institutional framework: -15 -

Subcomponents Responsible Institutions

A. Loans totalling Rs 30 million, Four nationalizedcommercial mainly for working capital but banks, i.e. Allahabad Bank, State also for fixed capital, to Bank of India, United Commercial approximately4,800 borrowers Bank, and United Bank of India, (average loan size of Rs 6,250, would make loans available from US$725) over a three-year period. own sources upon directive by GOI. Commercial banks would make available these loans from their own funds and charge 10-12% to subborrowers.

B. SSE extension service of 20 Department of Cottage and Small extensionworkers costing Scale Industries (CSSI) in close about Rs I million over three cooperationwith the social ser- years 1/. Such extension vice organizationKalikata service, which does not exist Bustee Pragati Sangstha (KBPS) in CMD, is essential to serve which have executed some of the as a catalyst between the in- surveys and have the trust of stitutions catering to the SSE the slum population. sector, including commercial banks, and the slum population which is often illiterate and ignorant of these institutions and their services.

C. Studies of the SSE potential CNDA through consultants. in Calcutta, of specific SSE subsectors,and survey of SSEs in all of CMD's slum areas (costing about Rs 0.6 million) for preparationof a second phase SSE project.

D. Performancemonitoring of CMDA, together with social and borrowers, commercial banks, extensionworkers. extension service, and coordinating committee.

3.24 A coordinatingcommittee to be chaired by CMDA would assure adequate coordination. This would be a first phase experimentalproject component limited to the already surveyed population. The proposed studies would mainly prepare a second phase project with a larger geographicalcoverage and with industry specific technical support programs.

1/ To be funded by GOWB Department of Cottage and Small-ScaleIndustries (CSSI). - 16 -

Water Supply

3.25 The first project assigned priority in water supply to works in CC and these projects are generally well advanced. The emphasis under the proposed second project has been shifted towards improving water supplies in the fringe areas and in some municipalities where increasing population densities are overtaking the supply system already in existence. The central areas, Calcutta and Howrah, have not been neglected, however, as part of the project is aimed at renovating the existing intake treatment plant, pumping and storage arrangements at Palta and Tallah, the system which provides the Corporation's principal water supply. In addition, provision is being made for improvement to the central tubewell supplies.

Sewerage and Drainage

3.26 The sewerage and drainage component envisages participation in 12 sub-projects including 8 which continue work started under the first project. The component includes the following:

(a) removal of water-logging in the Calcutta City and suburban systems areas;

(b) drainage improvements in North and Southeast Tollygunge, Manicktala, Cossipore and Howrah;

(d) cleaning and renovation of 650 km of existing sewers in CC.

(e) construction of branch and lateral sewers and provision of house connections and primary treatment and pumping facilities in an area of Howrah of about 1,240 ha where trunk sewers were constructed under the first project;

(f) outfall improvement schemes for bustee and anchal area drainage; and

(g) rehabilitation of 9.2 km of the Bagjola Canal to improve surface water drainage in a 50 square km area on the eastern river bank.

Solid Wastes Management

3.27 The current population of almost ten million persons produce between 4,000 and 6,000 metric tons of solid wastes per day, together with a large quantity of sludge from nightsoil collection, open drains and sewer cleaning. None of the wastes are disposed of efficiently; the open dumping - 17 - grounds pollute the surrounding area and destroy the value of the land they occupy. Serious health hazards arise from the deficiencies in handling nightsoil. Except in the case of nightsoil collection, there is no system for the collection of wastes directly from the source; most wastes are thrown into the street, picked up, transported to vats by hand cart, loaded in lorries, and off loaded (mainly by hand) at the tipping sites.

3.28 The current rate of expenditure on solid waste management by CC is over Rs 6 crores annually, equivalent to almost US$2 per inhabitant per year. This is adequate to finance a first class service. However, failure to effectively control the labor force of over 14,500 employees, inadequate vehicle maintenance, and lack of a vehicle renewal fund, combined with an unsuitable management structure have resulted in a wasteful and inefficient system. Expenditures in the remainder of the CMD approach US$0.70 per person per annum, less than half the sum probably required to provide services of the necessary standard.

3.29 The solid wastes management subcomponent addresses these issues. An improved organizational structure has been agreed with CC (see Annex 4, para 20) and the component is designed to achieve reliable operation of the existing systems within CC in the short term and to develop a solid wastes management system with metropolitan area-wide application, through:

(a) construction of 80 ward depots, 400 masonary vats and 10 trailer sites;

(b) purchase of 8,000 handcarts, 81 tipping trucks, 12 tractors and 25 trailers;

(c) purchase of two cesspool emptiers, 26 tanker lorries, renovation of existing nightsoil disposal areas and construction of additional discharge points;

(d) improvement of existing vehicle maintenance facilities including purchase of vehicles and equipment;

(e) construction of access roads and purchase of bulldozers and other plant to introduce sanitary landfill methods at the major disposal sites; and

(f) provision of training, studies and pilot projects to test alternative methods of storage, collection and disposal of solid wastes.

Sanitary Latrines

3.30 In the period 1971 to March 1977 CMDA replaced approximately 10,000 bucket latrines (outside the bustee areas) with sanitary latrines 1/. The

1/ Flush toilets. - 18 - project allows for continuing this program with the provision of a further 12,300 in the period to March 1982. The latrines are constructed in pre- cast concrete, and where no direct connection to a sewer is possible, they are built on top of a pre-cast concrete septic tank, which then discharges to a surface water drain. The latrines are installed at the request of a property owner and on payment of one-quarter of the installed cost. The balance is met from GOWB funds.

Municipal and Anchal Development

3.31 The component is designed to improve access to basic services in the rural fringe areas of the CMD and will, by March 1982, conclude the first phase of a program of works which started in 1970 and sought to initiate improvements in all anchals and municipalities in the CMD. The component would provide low-cost water supply, drainage, sanitation and road works to be included on the basis of agreed selection criteria (Annex 6).

Traffic and Transportation

3.32 This component is designed to rationalize travel patterns, improve circulation in the central urban core area, open up areas for early development, provide a link to an important bridge currently under construction and improve road and footway maintenance in CC. The elements included are:

(a) Traffic Operation and Management Improvement and Road Repair:

To facilitate the movement of all modes of traffic in the central area of CMD and obviate the need for excessive expenditures on road works, this component provides for:

(i) traffic operation improvements on over 140 km of roads and footways;

(ii) traffic engineering and control equipment; and

(iii) road and footpath maintenance equipment for CC.

(b) Road Improvement Projects and Terminal Facilities:

(i) widening and improvement of about 10.0 km of existing highway in Howrah Municipality and CC;

(ii) provision of a flyover in Acharya Jagadish Chandra Bose Road outside Sealdah Station, to segregate 750,000 commuters, who daily cross this busy road, from through traffic. Pedestrians will cross at grade and through traffic will pass overhead; and

(iii) rationalization of space for pickup/setdown points for minibuses, taxis and hackney carriages near Howrah Station. - 19 -

- the Eastern Metropolitan (EM) Bypass with two connectors;

- the Kona Expressway; and

- the Barrakpore-KalyaniExpressway

These are important links designed to improve movements in the CMD as a whole, to open up access to the West Howrah and East Calcutta area development schemes (para 3.10) and for connecting up a new river crossing under construction.

Technical Assistance and Training

3.33 Technical assistance is needed to improve (i) management performance in CMDA and CC, (ii) the fiscal base of CMD by assisting the proposed Central Valuation Board (CVB) and the GOWB Department of Municipal Services (DMS), (iii) traffic engineering techniques;and (iv) solid wastes collection and disposal methods; and to assist in forward planning and feasibility studies for future projects. 2,038 man/months of external asssistance is proposed, made up of 1,965 man/months of local consulting services and 73 man/months of foreign consulting services costing about Rs 2 crores (US$2.3million) (see Annex 8).

3.34 Extensive staff training in the key implementingagencies will also be required. A sum of Rs 75 lakhs (US$0.87 million) has been included in the project and these funds will be channelled and administeredthrough CMDA in order that this authority can monitor and coordinate training activities. CMDA will prepare the report by September 30, 1978, and assurances were received that GOWB will commence implementationof training programs by December 31, 1978.

IV. PROJECT COSTS, EXECUTION AND FINANCING

A. Cost Estimates

4.01 The total project cost is estimated at Rs 158.0 crores 1/ (US$183.71 million) including taxes of Rs 4.38 crores (US$5.08million), with a foreign exchange component of Rs 20.51 crores (US$23.84million) or about 13% of project cost. Land acquisition costs included are about Rs 10.06 2/

1/ Excluding Rs 3 crores (US$3.5million) for loans to small entrepreneurs, to be provided by selected commercial banks.

2/ Excluding contingencies. - 20 -

crores (US$11.7 million). Cost estimates are detailed in Annexes 1-8 for each component and are summarized in Annex 12 and below. An IDA Credit of $87 million (Rs 74.82 crores) would finance approximately 50% of project costs excluding duties and taxes, the cattle compounds in East Calcutta 1/ and loans for small-scale enterprises to be provided by commercial banks (para 3.23). Disbursements would not be made against land acquisition costs, though these costs have been included in the disbursement base.

4.02 Cost estimates are based on:

(a) detailed engineering designs for most of the water supply, sewerage and drainage and road components;

(b) preliminary engineering designs for the area development, bustee improvement, solid wastes management, traffic engineering, health and school construction components;

(c) US$7,000 2/ plus local expenses of Rs 7,000 per man/month for foreign consultants and Rs 7,000 per man/month for local consultants.

4.03 All costs are expressed in April 1977 prices. Physical contingencies of 10% have been included except for area developments and bustee improvement, where 15% has been used. Price contingencies are estimated, in accordance with current IDA estimates, at 6% to 7-1/2% per year for equipment and 8% for civil works.

4.04 In order to avoid the delays experienced under the first project due to land acquisition problems, over 50% of the land needed has already been acquired and most of the remainder has been notified under the land acquisition acts of 1894 and 1948. The Khatal 3/ Removal Program currently being funded with bilateral assistance from the Netherlands Government (Annex 1, para 56), will considerably assist in releasing land for use as ward depots, health centers and schools included in the project, particularly in CC. Assurances were given by GOWB that all land required for carrying out the project will be acquired in accordance with a schedule that has been agreed between GOWB and IDA.

B. Execution

4.05 The project will be executed, and the facilities operated and maintained by CMDA and other GOWB agencies, nominated commercial banks, CC

1/ Being financed by the Netherlands Government.

2/ Average costs include local taxes on foreign consultants.

3/ Buffalo and milk cattle compounds. INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Summary Cost Estimates

Percent Percent PROJECT COMPONENTS TO Rs Crores US$ Million of Foreign BE FINANCED THROUGH CMDA_ Local Foreign Total Local Foreign Total Total Exchange

Area Development & Housing Loans-213.61 1.48 15.09 15.83 1.72 17.55 10 10 Bustee Improvement 19.47 3.00 22.47 22.64 3.49 26.13 15 13 Schools 2.03 0.26 2.29 2.36 0.30 2.66 2 11 Health Facilities 0.19 0.01 0.20 0.22 0.01 0.23 - 4 Water Supply 10.33 0.98 11.31 12.01 1.14 13.15 7 9 Sewerage & Drainage 19.61 1.79 21.40 22.80 2.08 24.88 14 8 Solid Wastes Management 7.84 1.75 9.59 9.12 2.03 11.15 6 18 Sanitary Latrines 1.97 0.14 2.11 2.29 0.16 2.45 1 7 v Municipal & Anchal Development 5.57 0.85 6.42 6.48 0.99 7.47 4 13 Traffic & Transportation 24.07 3.91 27.98 27.98 4.55 32.53 18 14

Traffic Engineering 4.63 1.58 6.21 5.38 1.84 7.22 25 Road Maintenance 1.87 0.57 2.44 2.17 0.66 2.83 23 Road Schemes 17.36 1.76 19.12 20.19 2.05 22.24 9 Terminals 0.21 - 0.21 0.24 - 0.24

Technical Assistance & Training 2.09 0.66 2.75 2.43 0.77 3.20 2 24 Contingencies - physical 8.22 1.56 9.78 9.56 1.81 11.37 6 16 - price 19.49 4.12 23.61 22.66 4.79 27.45 15 17

Subtotal/3 134.49 20.51 155.00 156.38 23.84 180.22 100 13

PROJECT COMPONENTTO BE FINANCED THROUGHCONMERCIAL BANKS

Small Entrepreneur Loans 3.00 - 3.00 3.49 - 3.49

TOTAL 137.49 20.51 158.00 159.87 23.84 183.71

/1 Includes estimated cost for CMDA design and supervision totalling Rs 6.97 crores, or US$8.1 million equivalent. /2 Includes housing loans amounting to Rs 1.45 crores. /3 Includes taxes and duties at US$4.82 million equivalent. - 22 -

and other municipal agencies. A list of the various executing agencies is given in Annex 12. All agencies have the necessary capability to carry out their obligations under the project. Many of the agencies, i.e. Calcutta Improvement Trust and Howrah Improvement Trust, have performed satisfactorily under the first project and the opportunity is being taken to include well established specialist agencies in the second project particularly to provide housing finance and small-scale enterprise support. Where necessary, technical assistance is provided under the project to upgrade the technical capability of executing agencies and ensure effective coordination by CMDA for program implementation. Where inter-agency cooperation is required e.g. in area development and small-scale enterprise support programs, GOWB will establish inter-agency working groups. During negotiations GOWB agreed that CMDA will be designated as the representative of GOWB to coordinate project implementation.

4.06 The project will be implemented over the period 1977/78-1981/82. The closing date for the credit will be March 31, 1983. A project implementation schedule is given in Annex 11 along with a detailed schedule of key administrative, financial, legislative and technical assistance actions.

C. Financing

4.07 The proposed IDA credit of US$87 million will finance 50% of project costs excluding taxes and duties, the cost of cattle compounds in East Calcutta which are being financed by the Netherlands Government and loans for small-scale enterprises to be provided by commercial banks (para 3.23). The proceeds of the credit will be made available to GOI. Disbursements will be made on the basis of approved expenditures incurred by CMDA and its executing agencies (see Annex 12). GOI will make the proceeds of the credit available to GOWB in accordance with the GOI's standard arrangements for developmental assistance to the States of India, and the GOWB will pass on the proceeds of the credit to CMDA on standard terms and conditions applicable to development projects. CMDA will in turn provide the development finance for project works undertaken by its executing agencies. In addition, GOI will cause selected commercial banks to make available loans totalling not less than Rs 3 crores (US$3.5 million) to provide finance for small-scale enterprises (para 4.12).

4.08 Retroactive financing not exceeding US$5 million is recommended for (i) expenditures incurred from April 1, 1977, for detailed design work in area development (US$0.50 million) and solid wastes management (US$0.35 million), design and ongoing works for roads and traffic engineering (US$0.90 million), ongoing works in bustees (US$1.20 million) and in water supply (US$0.60 million); and (ii) expenditures incurred from October 1, 1977, for ongoing works in municipal and anchal development (US$0.25 million), the sanitary latrine component (US$0.10 million), sewerage and drainage (US$0.75 million), and technical assistance (US$0.35 million). These activities are necessary to ensure program continuity and to secure expeditious project implementation. - 23 -

Financing Plan

4.09 The following table summarizes the detailed CMDA cash flows given in Annex 10. All project funds will be channeled through CMDA.

April 1977 - March 1982 US$ million Rs crores equivalent Application of Funds

CMDA Program Expenditures /1

First Project - balance of works 36.06 41.93 Proposed Second Project /2 155.00 180.23 Other Schemes - identified /3 57.29 66.62 - unidentified 22.35 25.99 Capital Expenditures on Operating Assets 3.90 4.33

Sub-total 274.60 319.30 Debt Service

Interest 36.57 42.52 Sinking Fund Contributions 28.07 32.64 Other Expenditures

Working Capital 2.42 2.82 Increase in Cash Balances 3.09 3.59

TOTAL 344.75 400.87

Financed by: /4

Loans - Open Market Borrowings 55.00 63.95 - GOWB /5 75.96 88.33 Grants - GOI 52.50 61.05 - GOWB 78.50 91.28 Octroi Tax Receipts 48.11 55.94 Sinking Fund Investments 7.27 8.45 Other Income 27.41 31.87 TOTAL 344.75 400.87

/1 Includes CMDA design and supervision costs. /2 Includes Rs 1.55 crores (US$1.80 million) Netherlands Government aid for cattle removal schemes (para 4.04). /3 Includes Rs 5.57 crores (US$6.46 million ) Netherlands Government aid for cattle removal schemes (para 4.04). /4 The IDA credit will be passed on through GOI grants and GOWB grants and loans. /5 Includes Rs 7.12 crores (US$8.26 million ) Netherlands Government aid for cattle removal schemes (para 4.04). - 24 -

4.10 CMDA is responsible for financing all the above works, even where executed by other agencies, e.g. housing by West Bengal Housing Board (WBHB), to ensure that the appropriate specifications and standards and effective performance monitoring are achieved. Schemes not included in the proposed project but which will be implemented during the period 1977-1982 require expenditures of Rs 79.64 crores (US$92.6 million). These include identified schemes amounting to Rs 57.29 crores (US$66.67 million) which can attract commercial finance (para 3.04) and a notional estimate for expenditures in FY 1981/82 on schemes not yet identified. CMDA has established a five-year investment program for the period 1977/78 - 1981/82 (Annex 12) and has agreed to consult with IDA on any major changes therein.

4.11 GOWB loans are to be made available through CMDA for revenue- earning projects only, e.g. area development and water supply. Interest at the standard rate charged by GOWB for such projects is likely to be about 6% per annum for 20 years 1/ plus a surcharge interest rate of up to 2% to recover the equivalent charge of interest during construction which will not be chargeable to CMDA during the period of construction. Grace periods on repayment of principal, of about three years, will approximate to construction periods. Revenue-producing assets will be turned over on completion to the operating agency, which will commence servicing the debt to GOWB directly. Where CMDA provides the finance only, e.g. WBHB for housing construction, the executing agency will service the debt to GOWB on expiration of the grace period. Assurances were obtained that (i) GOWB will provide CMDA with adequate and timely funds to complete its investment program for fiscal years 1977/78 through 1981/82; and that (ii) GOWB will ensure that operational agencies assume debt service obligations related to revenue earning schemes commissioned under the project by April 1, 1982.

4.12 The selected banks (para 4.07) will be required by GOI to provide Rs 3 crores (US$3.5 million). Commercial bank finance amounting to a further Rs 10 crores will also be required to fund loans to entrepreneurs and construct rental property on sites and services schemes and to complete the first phase of the Howrah Fish and Pan Market. GOI and GOWB have indicated that the forecast amount of about Rs 13 crores will be available.

D. Cost Recovery and Service Pricing

4.13 CMDA and agencies which operate revenue-producing assets will levy charges to beneficiaries in the form of mortgage payments, rents or service charges. During negotiations GOWB agreed that such beneficiary charges will be designed to achieve full cost recovery in area development

1/ Including a grace period on the repayment of principal. - 25 -

schemes (paras 4.14-4.17). In order to sustain improved municipal services, service and other municipal charges are to be increased over time as part of the municipal fiscal reforms proposed by GOWB (paras 5.26 - 5.32).

Area Development

4.14 WBHB will sell 99-year leases, or charge rents to recover the cost of on-site infrastructure, housing cores or housing, and washing slabs. Loan repayment schedules will be designed to recover the principal amounts of loans advanced together with interest chargeable, administration expenses and a reasonable provision for bad and doubtful debts.

Charge for Unit or Average TotalNumber of Sale Price/ Target IncomeLevels Size Lots or RentalUnits Lot (Incld.) Down Monthly Percentiles Type of Lot Cm2) Lots RentalUnits Cores& Bldg.) PaymentPayment Rs/Month Reached (Rs) (Rs) (Rs)

EWS I & II 32 684 2,175 - 20 below 150 0 - 20 EWS III 44 1,530 3,045 160 26 151 - 200 21 - 31 EWS IV 50 2,535 4,950 255 42 201 - 350 32 - 61 LIG 60 1,776 8,835 455 75 351 - 600 62 - 82 MIG I 125 741 18,040/2 1,915 150 601 -1,000 83 - 93 MIG I (R) /1 82 274 18,274/2 225 601 -1,00083 - 93 MIG II 173 254 30,400/2 3,200 250 1,001-1,500 94 - 97 MIG II (R)/1115 115 26,242/2 350 1,001-1,500 94 - 97 RIG 243 184 44,200/2 4,750 372 over 1,500 over 97 RIG (R) 165 94 43,038/2 500 over 1,500 over 97

TOTALS 7,020 1,167

/1 (Rs)refers to rentalunits.

/2 Structurefinanced outside CMDA programby WBRB.

4.15 The down payments and monthly payments shown in the above table are considered to be affordable by the income groups shown. Full-cost recovery for each site will be achieved by charging differential rates for lot size and locational advantages. Mortgages, rentals and loans for building materials will be based on annuity charges over 20 years at not - 26 - less than 8.5% interest per annum for residential beneficiaries and 11.5% for industrial and commercial beneficiaries. Washermen will have to pay about Rs 10 each per month for provided facilities to recoup the forecast costs.

4.16 The cost of on-site infrastructure for industrial lots and the provision of cattle compounds and milk-processing equipment will be recovered by the West Bengal Small Industries Corporation (WBSIC) and the GOWB Animal Husbandry Directorate. A charge for milk processing of Rs 0.15 per liter and for cattle sheds of Rs 20 per month per head of cattle will be necessary. These charges are considered to be sustainable by the estimated demand for these facilities. Industrial and commercial land will be sold at average prices of about Rs 90 and Rs 150 per sq m respectively in East Calcutta. This compares to the average cost of Rs 52 per- sq m of developed land in these schemes. Preference in allocating residential, commercial and industrial lots will be given to persons and businesses displaced by CNDA programs. Assurances were received on beneficiary selection criteria for all forms of development in the project including income levels and repayment capacity.

Howrah Fish and Pan Markets

4.17 CMDA is in the process of acquiring the site and should complete acquisition by December 31, 1977. First phase construction will be completed by March 31, 1984 and CMDA will manage the property. The scheme Is fully self-financing and financial data are set out and reviewed in Annex 1. The development will consist of shops, kiosks, stall areas, offices, dormitories and car parking, all of which will b2 leased or rented at rates initially ranging from about Rs 130 per m per year for small shops to about Rs 540 per m per year for offices; and Rs 0.5 per bed/day in the dormitories. Rent reviews and increases will be required at three yearly intervals. During negotiations GOWB agreed that CMDA will adopt satisfactory estate management practices and recover the full costs of property maintenance, debt service and administration of the Fish and Pan Markets.

Bustee Improvement

4.18 The bustee improvement program in Calcutta has always been funded by grants initially from GOI up to 1973/74, but lately by GOWB. Calcutta bustees have proved difficult to administer or service for many years and were sources of civil unrest, often by reason of their unsanitary and decrepit nature. CC and CMDA have had difficulty in tracing owners and occupiers. Thus, effective and fair cost-recovery for improvements have not been and will not be possible. The proposed program will therefore be financed by GOWB grants. However, CC has had some success in recovering property taxes, and any bustee which is improved will be - 27 - revalued for property taxation purposes. The proposed improvements are expected to effect a 40% increase in bustee property values, but as property values in the bustees are low, increased property tax rd'ceiptswill not be substantial.

Small-Scale Enterprises

4.19 The selected commercial banks (para 3.23) will make loans to small entrepreneurs at 10-12% for a maximum term of 10 years. Most lending would be for short periods as working capital with flexible repayment schedules. A high risk of defaults exists because of the probable large number of small loans (average estimated at Rs 6,250). However, the commercial banks are becoming experienced in financing such enterprises. The component is limited to providing financial and technical assistance in selected areas where surveys/studies have been undertaken and it is felt that a considerable demand also exists for this type of financial and technical assistance in other areas of the CMD.

Operation and Maintenance

4.20 Many of the facilities commissioned under the CMDA program will be transferred on completion to local authorities and other agencies to operate and maintain. However, the present financial condition of many municipal bodies does not allow adequate operation and maintenance of existing municipal services. Projections have therefore been made (Annex 9, Tables I and 2) for these municipal bodies, of the expenditure responsibilities, including operation and maintenance of facilities and services transferred by CMDA, and their likely fiscal resources in order to determine the extent of any GOWB financial support required. The fiscal reforms now being implemented or proposed to date will enable CC to better discharge its responsibilities, but continued GOWB financial support will be necessary for all municipal bodies and sufficient funds will be provided to secure adequate operation and maintenance of facilities provided under the CMDA program (para 5.31).

E. Procurement and Disbursement

4.21 Contracts for about US$13 million equivalent for equipment will be awarded by CMDA and other executing agencies on the basis of international competitive bidding in accordance with IDA guidelines. A 15% margin of preference or customs duty, whichever is lower, is proposed to be granted to domestic manufacturers when evaluating bids. Contracts for about US$8.5 million equivalent for equipment would be either of small sizes and unattrac- tive to foreign suppliers, or unsuitable for international competitive bidding by reasons of high transportation costs and/or high damage risk, e.g., concrete and stoneware pipes. These equipment contracts would be awarded by CMDA and other executing agencies on the basis of competitive bidding advertised locally in accordance with procedures acceptable to IDA (See Annex 3, table 3). - 28 -

4.22 The total value of civil works under the project is estimated at about US$85.5 million, net of contingencies, and excluding in many instances the cost of heavy construction equipment which is issued by CMDA to the contractors. However, the major part of these works, distributed over 11 sectors, is widely dispersed over area and time. Based on a program prepared by CMDA, it has been estimated that over 1,350 works will require about 1,750 contracts, after suitable grouping. In bustee improvement alone, there will be about 1,000 contracts in about 420 bustees; in water supply, sewerage and drainage, and municipal and anchal development, works will be executed in traffic-congested areas, necessitating splitting of works into small contracts.

4.23 Wherever feasible, however, CMDA will award large civil works contracts. Two road contracts, estimated to cost more than US$3 million each, which is the lowest value considered to interest foreign contractors, will be awarded by CMDA on the basis of international competitive bidding. A 7 1/2% margin of preference will be granted to local contractors when comparing bids. CMDA and other implementing agencies will award contracts for other works on the basis of competitive bidding advertised on an all-India basis in accordance with procedures acceptable to IDA. Suitable civil works will be "sliced and packaged" into contract packages of not less than US$1.1 million. Works estimated to cost less than US$200,000 equivalent may be carried out by force account.

4.24 A schedule of disbursements of the IDA credit is given in Annex 11. Disbursements will be made as follows:

(a) 75% of total expenditures for civil works contracts awarded on the basis of international competitive bidding, and 70% of expenditures on other civil works;

(b) 100% of foreign expenditures of directly imported equipment or 100% of local expenditures (ex-factory) of locally manufactured equipment procured through ICB and 75% for other locally procured items;

(d) 100% of expenditures on consulting services, technical assistance and training.

Disbursements under (a), (b) and (d) would be fully documented with the following exceptions:

Payments made under civil works contracts for one or more progress payments not exceeding Rs. 50,000 and expenditures for locally procured items of equipment costing Rs. 20,000 or less would be made against certified statements of expenditure. Disbursements against (c) would be made against certified statements of expenditure, the documentation of which would be - 29 -

retained and available for inspection by IDA during the course of project review missions. Independent auditors will be employed to audit all certificates of expenditure incurred in periods not exceeding six months and GOWB will furnish the audit report to the Association promptly thereafter.

F. Supervision

4.25 About 350 man/weeks of IDA supervision will be required over the project implementation period with about 120 man/weeks during the first year. Key implementation actions on which supervision should focus are listed in Annex 11.

V. ORGANIZATION, MANAGEMENT & FIN4ANCES OF CMDA, CALCUTTA CORPORATION AND LOCAL BODIES

A. Calcutta Metropolitan Development Authority

Background

5.01 CMDA is a GOWB agency charged primarily with planning, design and construction of public works in CMD. The authority consists of a chairman (the Chief Minister, GOWB or his nominee), vice-chairman and 6 members, including three senior state government officials and 3 persons representing the east and west bank local authorities and CC. Though empowered to execute directly any of its projects, CMDA initially delegated executory responsibility to other existing agencies with available staff and facilities. In this way it was anticipated that CMDA would be capable of supervising some 150 projects in 11 sectors to be executed by a total of 54 agencies. This arrangement considerably increased the level of public investment in the CMD. However, it proved to be unsatisfactory as a means of integrating a large and diverse development effort, and the initial impetus could not be maintained.

5.02 CMDA expanded its direct executory responsibility in an attempt to maintain momentum in CMD improvements but annual investments have fallen. A substantial staff build-up after 1973/74 coming mainly from executing agencies in water supply, sewerage and drainage is due to this policy. The following table illustrates CMDA's performance. In a situation where CMDA sought public support for an apparently widespread program it was relatively common for priorities to change, often to the detriment of schemes forming part of the First Project, which represented only 34% of the CMDA program for the period 1973-1976. Moreover, the failure of CMDA to complete works led to GOI and GOWB reducing future annual budgetary allocations. CNDA found them- selves by 1975 in a situation with many incomplete schemes, insufficient - 30 - capital, and pressures to do more work in all sectors including completing the First project.

Table of CMDA Investments at 1977 Prices

(Rs crores)

1971/72 1972/73 1973/74 1974/75 1975/76 1976/77

Forecast CMDA Program Investments 51.0 55.9 41.1 28.7 34.4 36.6

Actual CMDA Program Expenditures 42.4 41.9 34.8 26.3 33.0 36.7

Improvements to Program Management

5.03 The nucleus of the professional staff in CMDA are engineers deputed from GOWB Public Works Department (PWD). CMDA has retained outdated tendering and contracting procedures particularly for civil works, and persisted in an annual planning and capital budgeting system without long-term planning and forecasting. Furthermore, in spite of somewhat improved monitoring procedures introduced under the first project, coordination between interrelated and interdependent sector components remained inadequate, particularly where CMDA delegated executory responsibility.

5.04 GOWB and IDA have had a continuous dialogue for about two years on CMDA management deficiencies, which appear to be the basic problem. GOWB has recently introduced major senior management changes. A new senior management team consisting of a Chief Executive and four Directors of Oper- ations, Planning, Administration and Finance have been appointed. A Manage- ment Information and Monitoring Unit will be attached to the Chief Executive. However, each division (water supply, roads, etc.) in the Operations Direc- torate will have its own monitoring system linked to the Chief Executive's unit and to the Finance Director. A Project Appraisal Unit will serve the management team through the Chief Executive.

5.05 The Operations Directorate has adequate staff to design and supervise construction of the basic infrastructure works (roads, drainage, water supply) but may need to hire short-term consultants to meet peak loads relating to new types of projects, e.g. traffic engineering. Staff of this directorate will need substantial training in project monitoring and use of management information systems, and induction into revised budgeting and contracting procedures.

5.06 The Planning Director will have two principal fields of activity, i.e. (i) project planning and design of area development schemes; and (ii) long-range development and area planning, with development control in CMD, and preparation of a development plan and feasibility reports (for projects - 31 - to be constructed in the period 1981-86) by September 30, 1980. The current Planning Director is sufficiently experienced and qualified and the Planning Directorate has been strengthened by the establishment and staffing of specialist divisions to plan, design, evaluate and implement traffic schemes, sewerage and drainage, area development, solid wastes management, social welfare and economic and community development schemes. However, technical consultant's services may be required, particularly for design of area development schemes. Assurances were received at negotiations that CMDA, in consultation with IDA, will hire suitable consultants to (a) assist in the design of (i) area development; (ii) traffic management; (iii) roads; and (iv) other schemes as necessary and (b) prepare and provide IDA with a development plan for the period 1981-86.

5.07 The Administration Directorate will become actively involved in the proposed management information system (para 5.09) and will need to liaise closely with the key GOWBdepartments and agencies involved in project implementation. A separate legal unit is to be established to expedite contracting and claims procedures.

5.08 The Director of Finance will carry the rank of Accountant General and his responsibilities will be considerably widened as a result of the revised budgeting, accounting and financial management systems. The new systems will not be fully operational until 1979/80 and consultant assistance has been engaged to ensure continuity in the quality of accounting and financial control and to review manpower and training requirements.

5.09 The accounting system to be installed in CMDA should give effective financial management and control of projects by providing financial information to line management on a regular basis and enabling project accounts to be prepared within an acceptable period. The contract for this work is being extended to include management information systems. CMDA has, in addition, engaged a firm of qualified accountants to undertake an annual independent commercial audit of their financial accounts and the audit for 1975/76 has already been completed.

5.10 Assurances have been obtained that CMDA will install and operate:

(a) by April 1, 1979, a project budgeting and accounting system; (b) by April 1, 1979, a management information system; (c) by July 1, 1978, a project appraisal system; and (d) by April 30, 1978, a project monitoring system.

Assurances have also been obtained that CMDA will appoint an independent auditor satisfactory to IDA to audit its accounts and financial statements for each fiscal year commencing 1977/78 and furnish to IDA the audited statements and auditor's report not later than nine months after the close of each financial year. - 32 -

5.11 The CMWSA was instituted in 1966 to plan, design, construct, operate and maintain water supply and sewerage systems in the CMD. However, it was not politically acceptable and did not develop into an effective agency. In 1975 it was merged into CMDA. CMWSA will become responsible for a significant proportion of the sector's facilities outside CC. CMWSA is presently supervising studies which have recently commenced to review standards of operation and maintenance and the financial arrangements for this sector and to design a model accounting system. The studies are expected to be completed around September 1978. GOWB has agreed that the manpower of the agency should be upgraded and strengthened as a matter of urgency and assurances were obtained at negotiations that GOWBwill develop and implement by April 1, 1980, proposals for institutional responsibilities for water and sewerage revenue collection in CMD.

Other Agencies

5.12 (a) The West Bengal Housing Board (WBHB) is experienced in estate management and will take over the land developed in East Calcutta for residential and commercial use, sell serviced lots, provide mortgage loans and construct and manage rental properties. WBHB was established as a state government agency in 1972 to build and sell houses and provide mortgage finance. Funding is obtained from GOI through the Housing and Urban De- velopment Corporation (HUDCO), GOWB and open market borrowings. WBHB has built and sold over 42,000 1/ houses and flats to date but will need to develop operational policies and procedures to administer leased and rental properties proposed under the project, and assurances to this effect were obtained at negotiations.

(b) The West Bengal Small Industries Corporation (WBSIC) was established in 1961 as a public limited company registered under the Companies Act of 1956. WBSIC is wholly owned by the West Bengal Government with a paid-in capital of Rs 85 lakhs as of January 1977. WBSIC's objectives are to aid, assist and promote small-scale industry throughout the State. Since 1973 WBSIC has successfully developed four industrial estates and one commercial estate. It has a staff of approximately 300, 100 of whom operate in the CMD. The development of the industrial site at East Calcutta will be handled by WBSIC which will lease serviced industrial lots, provide mortgage loans and rent work sheds.

Financing the CMDA Program

5.13 CMDA obtains its financing primarily from GOI and GOWB grants and loans and from a local octroi tax on goods imported into the CMD (see Annex 10). The serious decline in program performance through 1975/76 has been due in part to CMDA's resource position which has remained stagnant since 1973, primarily because of cutbacks in State Plan funds allocated to the

1/ Some of which were built by the Housing and Urban Development Corpora- tion (HUDCO), a national agency. - 33 -

CMDA program. CMDA's annual receipts from octroi tax, its only independent source of finance, are intended to cover full debt service (interest and sinking fund obligations) on open market borrowings. Furthermore, constituent bodies do not have the financial resources to satisfactorily operate, maintain and service loan charges on assets transferredon completion. Considerable reform to the mechanisms by which the CMDA program is financed was therefore considered necessary if program performance is to be improved and completed facilities brought into service. These improvements are outlined below.

5.14 Open Market Borrowings. GOI and GOWB have determined that open market loans contracted from 1975/76 will be 'rolled over' on maturity and will not therefore require repayment of principal through annual sinking fund contributions. 1/

5.15 GOI and GOWB Loans. All these loans made to CMDA to March 31, 1976 have been converted to grants and thereafter all GOI and GOWB assistancewill be in the form of grants except for revenue-earning schemes (water supply, area development). Proposed cost recovery systems for area development schemes (paras 4.13-4.17) will ensure financing of debt service on these works. CC, CMWSA or any municipality to which other loan-financed assets are transferred should be capable of meeting debt-service obligations from 1982/83 (paras 5.11, 5e28 and 5.32). The authorities responsible for operation and maintenance of assets will take these over on commissioning by CMDA and will take over and service the debt transferred by CMDA on behalf of GOWB by not later than April 1, 1982 (para 4.11).

Maintenance of Area Development Schemes

5.16 The area development schemes will ultimately by administered as Government townships in accordance with the principles set out in the Gov- ernment Township Act of 1975. Assurances were obtained that CMDAwill make administrative and financial arrangements for operation and maintenance functions of these schemes until Government townships are established and become operational.

Monitoring and Evaluation

5.17 Monitoring and evaluation of different sectoral programs including the small-scale enterprise component will be an important function for CMDA in revising/updating the development priorities of the CMDA and in preparing future programs. The Management Information and Monitoring Unit reporting directly to the Chief Executive of CMDA will have overall responsibility for monitoring the project in association with the Planning Direc- torate, and each of the cells, units, directorates or agencies implementing

1/ Up to 1974/75 CMDA raised Rs 61.6 crores by issuing 12-year maturity bonds at 6.5% interest. - 34 -

the project. A program planner will be appointed for each principal sector to work closely with the program engineer and will report to the Management and Information Officer. Specific activities to be undertaken are:

(a) develop a system of project implementation reporting for each of the executing agencies (by November 1977);

(b) prepare quarterly progress reports detailing physical and financial performance of project elements and comparing actual performance with established targets;

(c) develop performance indicators for each individual component of the project to assess the impact of the project (by November 1977); and

(d) prepare annual project evaluation reports assessing the success of the project in meeting its objectives and proposing any changes necessary in the strategy (by April 1978 and annually thereafter).

B. Municipal Administration and Finance in the CMD

5.18 The CMD is not a single administrative unit but comprises four district administrations, 35 municipal authorities, 61 non-municipal areas and 500 semi-rural units. CC and Howrah Municipality are the two largest authorities, with populations of 3.15 million and 740,000, respectively. The Calcutta Municipal Act prescribed a tripartite organization for the city including the Corporation (i.e. the City Council); nine standing committees; and a Commissioner. The elected councils of the CC and many municipalities have been superceded and will be reinstated only following popular elections ordered by GOWB. 1/ Following supercession in 1972, a GOWB appointed adminis- trator took over the functions of the elected representatives but the powers and duties of the Chief Executive Officer continue to be exercised by the Commissioner. Provision of most municipal services in CMD has for some time been seriously deficient. The financial conditions of CC and constituent local bodies is such that even the present substandard services can be sustained only on the basis of considerable GOWB financial assistance. Grants-in-aid presently finance about 38% of recurrent expenditures in CC and about 437. for all other local bodies (Annex 9). The IDA I project pointed to the urgent need for institutional, organizational and fiscal reforms in these authorities to secure adequate operation and maintenance of urban services in the CMD.

1/ GOWB anticipates holding elections for Calcutta Corporation in March 1978 and for all other constituent authorities in CMD in November/December 1977. - 35 -

5.19 Achievement of this project's principal objectives (para 3.01) will be the second co-ordinated operation between GOI, GOWB and IDA on institutional, fiscal and administrative reform in the CMD (Annex 9). It will not be possible to achieve satisfactory long-term standards during this project period. Emphasis has been placed, therefore, on improving the CMD taxation base (para 5.27); achieving maximum possible improvements to CC which is the largest authority (paras 5.28-32, 5.35-37) taking initial steps to improve other authorities (paras 5.29-34, 5.37); and strengthening the GOWB Department of Municipal Services (DMS) to enable it to better fulfill its role of regulating, advising and monitoring performances of local bodies and planning the next phase of municipal reforms and improvements (para 5.33).

Fiscal Management in CMD

5.20 In India in 1974 adequate municipal services required expenditures of about Rs 110 per capita 1/. At that time CC was spending about Rs 55 per capita compared to about Rs 70 in Ahmedabad, Rs 80 in Delhi and Rs 120 in Bombay. Outside CC per capita municipal expenditures averaged less than Rs 30 throughout the CMD (para 5.22). During the period 1971/72 to 1975/76 the self-generated revenues of CC increased by about 64%. Recurrent expenditures, however, increased by about 87% and the annual current account deficit presently represents about 20% of current revenues 2/ and is financed by GOWB subventions. Water supply and sewerage services represent about 45% of total current expenditures, but revenues notionally earmarked for these services presently finance only about 30% of service costs.

5.21 Property-related taxes are the dominant revenue source for CC and represent 75% of self-generated revenues, a much higher proportion than for other major Indian cities. However, a comparison with Bombay shows the revenues from property taxes in CC to be extremely low, due primarily to the undervaluation 3/ of the majority of properties (Annex 9). Legislation allows local bodies discretion in setting tax rates within prescribed maxima and many local bodies have sought to maintain tax rates much lower than can be justified on the basis of service costs.

5.22 The fiscal performance of many of the other municipalities in the CMD has been worse than that of CC, even though in general their expenditure responsibilities are less. Average per capita expenditures in 1975/76 were Rs 27.7 (US$3.2) varying from Rs 6.8 (US$0.8) to Rs 66.4 (US$7.7) and because of a more stagnant economy, revenue receipts have been increasing even more slowly than in CC.

1/ GOI Committee on Budgetary Reforms in the Municipal Administration.

2/ Including octroi receipts but excluding grants.

3/ A comparison with Bombay shows that in 1973/74 rateable value of property per head in CC was Rs 27 compared to Rs 61 for Bombay. - 36 -

Fiscal Reform

5.23 Following the establishment of CMDAin 1971, with the implementation of its large infrastructure development program, fiscal reform in local bodies in the CMD became urgent. Various local bodies were nominated to be responsible for operation and maintenance of newly created assets. However, existing services and facilities were deteriorating for lack of satisfactory operation and maintenance and without increased financial resources and improved technical capability these authorities would have been unable to adequately maintain facilities commissioned under the CMDA program. A condition was therefore attached to the first credit requiring GOWB to formulate a plan i/ for improving the financial performance of agencies and municipalities in the CMD to better sustain the development program and to mobilize additional resources for further development. Specifically, the plan was required to define a system of beneficiary taxes and betterment levies, introduce commercial accounting systems and improve the financial mechanisms of revenue sharing to improve the financing arrangements and the quality of financial management of program implementation.

5.24 The plan, prepared by a joint GOI/GOWB Working Party and provided to IDA in September 1975, proposed major fiscal reforms primarily to the arrangements for financing water supply and sewerage services and to the existing system for assessment and levy of property taxes, and recommended the amalgamation of constituent local bodies in the CMD (Annex 9). However, the Plan was not fully responsive to the initial objectives and they may not have been achievable in the time allowed. There was no specified fiscal strategy for urban public investment and servicing in the CMD, nor any identified specific relationship between resources and needs based on ascribed functional responsibilities. The sources of funds to achieve and maintain this relationship were not identified nor the criteria defined for devolution of funds from higher levels of government. The impact of the numerous fiscal, administrative and institutional reforms recommended had not been adequately assessed. Nevertheless, the plan was viewed as a first step toward developing an effective institutional structure and viable fiscal systems for the CMD.

5.25 A study undertaken in 1974 to determine the fiscal impact of the CMDA program on local bodies through 1978/79 has recently been revised and forecasts prepared to 1980/81 in order to refocus attention on the fiscal management problems of local bodies in the CMD.

5.26 GOWB has thus far considered the fiscal problems of Calcutta as the most pressing and improvements instituted since 1975 relate primarily to the Corporation. However, personnel management reforms which impact on all local bodies have also been effected. In 1976/77, GOWB enacted laws which are expected to increase local revenues by about Rs 4.5 crores a year initially

1/ Financial and Institutional Plan to secure improved performance of municipal and other local government units concerned with the development program in Metropolitan Calcutta. - 37 - for Calcutta Corporationand about Rs 2 crores for other local bodies (see Annex 9).

Property Valuation in the CMD

5.27 Assurances were obtained that (i) a GOWB Central Valuation Board (CVB) will be establishedby December 31, 1978 to reform the existing system for assessment and levy of property taxes throughout the CMD, and (ii) a complete revaluationof properties in CC and other areas in the CMD is to be completedby March 31, 1982. This project contains provision for up to 175 man/months of consultingservices and training to assist GOWB to establish and operate the CVB.

Water and Sewerage Charges

5.28 The CC municipal fund currently receives all receipts of the Cor- poration including consolidatedrate (propertytax); taxes on vehicles, businesses and professions;octroi allocationsfrom GOWB and subventions from GOWB. There are no separate service taxes, but limited user charges are levied, including metered water consumption. To achieve long-term financialviability of water supply and sewerage services, assuranceswere obtained that the CC will (i) establish from April 1, 1978 a separate water supply and sewerage fund controlled by suitable financial regulations;(ii) from April 1, 1978 meet all deficits of the fund from revenues of the municipal fund; and (iii) from April 1, 1981 de-link water supply and sewerage taxes from the consolidatedtax and meet not less than 84% of the expenditure of the fund from such taxes and water supply and sewerage charges for fiscal year 1981/82 and thereafter.

5.29 On-going studies under the first project, which are due for completion in late 1978, will define standards and costs of satisfactorywater supply and sewerage service levels and recommend tariffs and appropriateaccounting systems for these services. Arising from these studies will be the need to review, in particular, the feasibilityof recovering sewerage costs through water charges or sewerage surcharges,firstly to industrial and commercial premises, and subsequentlyto domestic properties in CND. There may be problems associatedwith new charging systems, given the large number of local bodies and poor accountingsystems, and GOWB will consult with IDA on the consultants'proposals. In the meantime, GOWB has eliminated"free water" concessions in existing water charges systems. Private ownership of deep tubewells is to be discouragedand water metering expanded. To ensure a planned program and to determineadditional revenue proposals from sewerage surcharges and private wells, assurances were given that GOWB will:

(a) commission studies to be completedby March 31, 1979 to advise on the regulationand licensing if necessary of tubewells and use of groundwater in CMD; - 38 -

(b) develop proposals for institutional responsibilities for water and sewerage revenue collection in the CMD by December 31, 1978, and implement such proposals by April 1, 1980; and

(c) by September 1, 1978 draw up a program of metering of water connections from April 1, 1979 through March 31, 1982 and implement such program.

GOWB Supplementary Financial Assistance to Local Authorities

5.30 The present system of "general financial subventions" by GOWB does not represent a satisfactory basis for augmenting municipal revenues and GOWB is concerned that financial assistance should be more closely related to specific services, should be based on a sensitive analysis of local needs and resources and should be linked to local performance in service provision and management efficiency. The GOWBproposes to review the present system of providing financial assistance to local bodies as a means of developing concepts of economic efficiency in municipal finance. Relationships between service costs and service charges will be reviewed annually. In this way, grants will become an important instrument in the fiscal management of the CMD.

5.31 Assurances have been obtained that GOWB will:

(a) prepare by March 31, 1979, a revised grant structure for local bodies in the CMD, which would be designed to promote local efficiency and improved local fiscal participation;

(b) take all necessary steps to implement the grant system in (a) by April 1, 1980;

(c) require CC to collect not less than 70% in 1978/79, 80% in 1979/80 and 90% in 1980/81 in respect of: (i) each year's property tax collection due, plus (ii) amounts due and not collected on the first day of each year but excluding receivables due for more than five years (Annex 9, table 2); and

(d) provide the CC, the CMWSA and other local bodies within the CMD with sufficient funds to operate and maintain adequately (i) existing municipal services; and (ii) facilities and services created by CMDA investments and transferred to the local municipal authorities upon commissioning.

5.32 However, GOWB does not wish to commit itself to permanently increasing subventions to local bodies in CMD. While willing to provide subsidies - 39 - in the short-term to ensure satisfactory operations and maintenance of facilities, and until the full effect of the possible new grant system is introduced (para 5.31), GOWBconsiders that the local bodies should reverse the trend of an increasing ratio of expenditure to revenues and begin to improve their revenue yields from 1978/79. The methods of achieving this trend reversal will be determined in consultation, between GOWB and the local bodies concerned. Detailed proposals for improvements for CC and for the municipalities are set out in Annex 9, paras 13 and 14, and assurances were given that these proposals will require that: (i) all authorities will achieve satisfactory standards of operation and maintenance; and (ii) each authority will achieve not less than annual specified target ratios of expenditure to income, so that by 1981/82 and thereafter:

(a) Calcutta Corporation will finance not less than 84% of its expenditures from local revenues; and

(b) all other authorities will individually finance not less than 50% of expenditures, from local revenues.

Institutional and Administrative Reforms

5.33 GOWB is in course of reorganizing DMS to promote effective development and organization of local government services in West Bengal, and, in particular in the CMD. DMS will include directorates to administer planning, engineering and fiscal operations. The report should be finalized by December 1977 and the necessary reorganization completed by March 1979. Assurances were given at negotiations that GOWB will complete an appropriate reorganization of DMS by March 31, 1979.

5.34 Reform of the municipalities presents numerous problems. Local authorities' staff have no effective cadre system and little opportunity for advancement either within local government or to the public service at the state level. The serious lack of financial and technical resources at the municipal level militates against large-scale institutional mergers. GOWB therefore proposes, as an experiment, to use state level public service employees together with municipal employees to operate local services in an area of four or five adjoining authorities. This would involve higher quality staff in,the operation of municipal services and at the same time provide state-level staff with direct exposure to the problems presently experienced by local bodies in the CMD. Assurances have been received that GOWB would by April 1, 1978, nominate the areas and local authorities within CMD which would have the benefit of state level public service employees in the operation of municipal services; and prepare and implement a feasibility report on the organization, operation and financing of the appropriate arrangement by not later than December 31, 1978. - 40 -

Calcu -a irporai on Management Structure

5.35 GOWB proposes to improve the top management structure of CC. This should not be delayed if maximum benefit is to be obtained from the large- scale CMDA infrastructure investments and the Corporation's proposed investment in consulting services. Assurances were given at negotiations that GOWB

Accounts and Audit

5.36 CC will become responsible for operating and maintaining a considerable proportion of the works to be undertaken through the project, particularly in the roads, bustee improvement, solid wastes management, water supply, sewerage and drainage sectors. The Corporation's accounting system is completely inadequate and the accounts have not been closed since 1967/68. The GOWB and CC have agreed to a consultant study, as part of the second project, to review existing procedures and design accounting, stores and financial control systems. Functional accounting is to be introduced for the purposes of the GOWB annual review of service pricing and taxation policies in general, and of water and sewer charges in particular. Assurances were given during negotiations that GOWB and CC will:

(a) appoint management and accounting consultants to design and install line management, accounting, stores and financial control systems for CC; and

(b) appoint an independent auditor satisfactory to IDA to audit CC's accounts and financial statements for each fiscal year commencing 1977/78 and furnish to IDA the audited statements and auditor's report not later than nine months after the close of each fiscal year.

Training, Municipal Administration and Finance

5.37 Extensive training of staff at all levels and in all sectors of local bodies in the CMD and in DMS following its reorganization (para 5.33) will be required during the project period. Funds have been provided in the project for technical assistance and training (Annex 8). GOWB will engage, or require the responsible authorities to engage consultants to prepare by September 30, 1978, five-year training programs for staff of (i) CC, (ii) the proposed new local government unit in the CMD, (iii) other local bodies in the CMD and (iv) CMDA. Assurances were received that GOWB will commence implementation of such training programs by December 31, 1978.

VI. JUSTIFICATION

6.01 The project would be the second urban development project for Calcutta and aims to improve institutions responsible for delivering, - 41 - operating and m-'alntainingurban systems and services; to improve fiscal policy and manacairent; and to institute an effective system for monitoring urban investmrents in the.CkD. Through the project, existing municipal services-ouls d be - hab`litated by management and system reforms; prior investmentt p ti-mzed by the construction of secondary and tertiary systems _ ova access to urban services, including housing, on an affordo1-le si and employment opportunities would be created for small-scale enterprises. The project would be instrumental in identifying affordable project designs for developing new areas in accordance with the government's policy of spacia. decentralization and in mobilizing private

C5p 4ta .

6302 The a-ea de;velopment component of the project introduces an inte- -prviding azncamodation which is sensitive to housing designs bv the low-income groups, community facilities and employ- men.- c.p or:he.i-_-2A 'aaproject will generate a wide range of benefits, includLng betLer health and an improved environment through investment in physical i!f-astr-=cnure. The schemes included in the project are designed to be selffinancing and incorporate differential prices for different land uses and plot sizes 0 Approximately45,400 people will be accommodated, about 70% of whom belong to families which earn less thanithe average family monthly income of Rs 400. The target population comprises 80% from economically weaker sec-ions and low income groups and 20% from middle and higher income groups. This will encourage balanced community development and, together with industrial and commercial beneficiaries, will provide cross-subsidies within the szhemes. The lowest income groups, 10% of the total, are to be provided with dormitory rental accommodation. In allocating units, preference will be given to families and small businesses relocated by works in the CMDA program. Tlhe econormic benefits of area development at East Calcutta are based on the inputed rental value of- the serviced residential plots and the market value of the industrial and commercial land provided. On this basis, the economic rate of return for the housing element alone is estimated at 17% and for the combined housing and commercial/industrial development also at 18%.

6.03 Area development also includes a component for redevelopment of tte fish and pan markets at Howrah. This project would help eliminate the present unsanitary conditions affecting mainly the lower income groups who depend upon the markets for their livelihood and would help alleviate the lifficlt- traffic conditions of the area. The project would also create employment opportunities and help to improve land management policies. Measurement of the economic benefits of the component is derived from the possible inc.creases in rental values of the fish, pan and ice packing shops and actual payments made by the renters of the other shops and offices, as this wo,Uld ind4fiate the willingness to pay. The rate of return is estimated to be 17%.

6.04 The bustee improvement component will directly benefit approximately 880,000 1/ bustee dwellers (176,000 families) within the CMD. By

co? -.orms part of an ongoing program which started in 1975 under whrcki approximately 1,104,000 persons will benefit. integrating physical infrastructure with programs of social and economic support, the component represents a considerable improvement in the services previously provided to the low-income bustee population. This component will generate employment opportunities for about 4,000 laborers, most of whom will be recruited from the areas being upgraded. The physical improvements will be made at a per capita cost of about US$41, At present the program is funded by GOWB grant, but increased property taxes and water and sewer charges will begin to finance a part of the cost of these improvements. The economic benefit of bustee improvement stems from the increase in property values which result from provision of infrastructure and other services; the economic rate of return is estimated at 16%.

6.05 The primary school construction component will increase the availability of primary school facilities, mainly for the slum population. Cur- rently, less than 60% of eligible children living in bustees attend primary school, which is far below the city-wide average. Forty new schools will be constructed and 400 existing schools will be rehabilitated or expanded to increase enrollment capacity and improve facilities. The project will provide places for approximately 20,000 students in the new schools and increase enrollment capacity by about 40,000 in the upgraded schools. It is expected also that attendance rates in the upgraded schools will increase as a result of the improvements. The health component aims to remedy the deficiencies in the existing health delivery system in the bustees by providing, through a pilot program, comprehensive health care including nutrition and family planning services to a target population of 175,000 predominantly bustee inhabitants at a per capita cost of about US$1.50. The project will help to relieve the excessive overloading of hospital outpatient facilities and improve the utilization of peripheral health facilities. It represents Calcutta's first attempt to systematize patient referral, introduce community-based outreach workers and integrate preventive, promotive and curative health services at the home level. The benefits of these two programs, although not quantifiable, will be substantial in improving the health and nutrition of the beneficiaries, increased productivity of the employed popUlation and increased responsiveness to education.

6.06 The small-scale enterprise (SSE) rcomponent is designed to provide loans to approximately 4,800 cottage industry and small business enterpreneurs in the bustee areas and to assist approximately 300 small-scale entrepreneurs in the two new areas to be developed. Assistance would be provided to entrepreneurs for loan management, procurement of machinery, equipment, and raw materials, production techniques and marketing. The component will be closely monitored to help reduce the risks associated with new and inexperienced businesses. The project will bridge the credit gap between the formal and informal markets, make more efficient use of capital, and improve the efficiency of the lending market through competition with moneylenders. It is not possible to quantify the economic benefits of the component, but the project could result in increased incomes and employment of the target group through reduction of seasonal slacks in the use of their productive assets, expansion of individual efficient SSEs and establishment of new efficient SSEs. - 43 -

6.07 The program of investmentsin water supply aims to augment the level of service in municipalitieswhere supplies are below minimum standards and to provide new water supplies in fringe areas of high population potential where reticulationsystems cannot be economicallyextended. These new supplies will be drawn from deep tube wells which will be protected and chlorinated, thus reducing the risk of contamination and disease. Major rehabilitation and expansion of the main water treatment plant will prevent further deterioration of the per capita quantity of treated supply. Laying of secondary grid systems will optimize existing investments of trunk infrastructure in densely populated areas, and the connectionswill be underground, thus reducing the risk of damage and pollution. The projects will result in substantial improvementsin the quality and treatment of supplies. The economic benefits of the project are not quantifiable;an attempt was made to employ an indirect test of the reasonablenessof the investment,and it was estimated that increases in incomes and productivityof the beneficiaries due to reduced absenteeism from sickness by only one day would yield a rate of return of 26%. This saving is not unreasonableand there is reason to believe that the impact will be greater.

6.08 The sewerage and drainage component proposes to provide sewerage services in areas still served by septic tanks and bucket latrines and to rehabilitate existing drainage systems to relieve severe flooding. Improvements to storm water drainage will affect an area serving about two million people. Branch and lateral sewers will be connected to existing trunk sewers and allow house connections,thereby optimizingprevious investments. Although the economic benefits resultingfrom these works are not quantifiable, the project will significantlyimprove the health of the beneficiaries and have a considerable impact on environmentalsanitation. This is especially critical during the monsoon periods, when the inadequate existing system overflows causing damage to property and public infrastructure;serious disruption to traffic, particularlyin the central area; and a considerableincrease in the risk of spreading disease.

6.09 The solid wastes management component will generate a wide range of benefits. As a result of improved supervision of manpower and the provision of modern collection and transportation equipment, it is expected that the productivity of the unskilled labor involved in collectionwill increase considerably. With more vehicles and improved maintenance, the operational efficiency of the collection fleet will improve. Immediate attention is to be given to removing the accumulated street refuse and the present systems of collection and disposal are to be rehabilitated,providing for a more efficient service at about the same per capita cost as at present. The studies and pilot projects will develop an indigenous technology of collection, transport, and disposal for application throughout the CMD. Further disposal is to be by sanitary land filling, which will provide new areas in prime locations for cultivation,industry and recreation. Benefits of the improved system of collection, transport and disposal are derived from the savings in operating costs per ton due to the improvementsin efficiency resulting from the project. The rate of return of the component is 27%.

6.10 The sanitary latrine component, 1% of total project cost, provides for the continuation of an ongoing program which aims to eliminate service - 44 -

privies in the CMD. 1/ About 12,300 sanitary latrines will be installed at a cost of US$178 2/ each, 25% of which will be recovered directly from the beneficiaries. The benefits are unquantifiable,but the compornent will considerablyimprove the health, hygiene and environment of the beneficiaries and produce savings in the cost of nightsoil collection.

6.11 The roads and traffic improvementsubprojects are designed to aid all modes of transport, but with particular emphasis on pedestrians, other slow-moving traffic and bus passengers. The present situation is characterizedby unsatisfactorytraffic control aggravated by a variety of heterogeneousmodes which compete for available road space and cause heavy congestion. Project emphasis is given to provision and repair of footpaths. At present pedestriansspill over onto the roads due to obstructionsand other impedimentsin the footways and thus slow down the movement of traffic even further. The benefits of the road improvement schemes are derived from travel time savings and savings in vehicle operating costs resulting from improved flows of traffic diverted from their present routes. Capacity is to be increased to accommodateexpected traffic growth and developmentof surroundingareas. The average economic rate of return for the three projects in this subcomponentis estimated to be 17% if time savings are valued and 14% if no value is attached to time savings. The three new highway projects will form along with existing highways a major ring system of the metropolitan core, linking into the regional highway network. Benefits of the B.K. Expressway are derived from savings in vehicle operatingcosts and time savings resultingfrom improved flows of traffic diverted from their present routes, of traffic on the existing parallel road and local and transriver generated traffic. Benefits of the E.M. Bypass and the Kona Expressway are derived from operating cost and travel time savings of the traffic generated by new areas of development,traffic by-passing existing north-south corridors, and local traffic resulting from new sub-centerand industrialdevelop- ment along the corridors, These highways will stimulate additional development of the surroundingareas and considerablyincrease the land values along the routes. These highways represent the least cost solution; their respective rates of return are 15%, 22% and 13% if time savings are valued and 12%. 20% and 11% if no value is attached to time savings. The Sealdah Hump proposal will alleviate very heavy congestionon the traffic corridor adjacent to Sealdah Station, one of the two most important railway terminalsof the CMD. Separation of motorized from slow-movingand pedestrian traffic will improve pedestrian access to the station, speed up traffic flows and result in fewer accidents.

6.12 The estimatedweighted average economic rate of return for those components of the total project for which benefits have been quantified,and which account for about 60% of the total project cost, is estimated to be about 20%.

1/ Excluding latrines provided for under Bustee Improvement Program.

2/ Excluding supervision costs. - 45 -

6.13 The project would alleviateurban poverty by reducing costs and improving access to basic services. Project componentsrelating to bustee improvement,school construction,health and nutrition are focused on the economicallyweaker sections and lower income groups and form part of continuing programs sponsored by GOWB. Proposed investments in area development, water supply, sewerage and drainage, solid wastes management and traffic engineering incorporatedesign standardswhich are affordable to the target group and are self-financingor require financial subventions at a level acceptableto GOWB. On this basis these facilities can be extended,where necessary, in order to service additional population growth in the target group.

6.14 On the production side, the small-scale enterprisessupport component will create about 8,500 jobs with a 15-year minimum life, which together with extension services and other costs amounts to approximatelyUS$425 per job. Investments in civil works will employ approximately40,000 persons. The constructionequipment and other incrementalcapital necessary to support this labor force is US$9.0 million, or US$1,125 of capital per job.

VII. RECOMMENDATIONS

7.01 During negotiations,understandings were reached on a consolidated land acquisitionand project implementationschedule, a five-yearinvestment program for CMDA, and a policy framework for loans to small-scaleentrepre- neurs. In addition,agreements were reached on the following points:

(a) With GOI:

(i) making the proceeds of the credit available to GOWB in accordancewith GOI's standard arrangementsfor developmentassistance to the States of India, for making these funds available to CMDA (para 4.07); and

(ii) causing selected commercialbanks to make not less than Rs 30 million available for loans to small-scale entrepreneursunder terms and conditions satisfactory to IDA (para 4.07).

(b) With GOWB:

(i) preparationand implementationof a detailed plan of operation for bustee maintenance (para 3.17); - 46 -

(ii) implementation of staff training programs for GOWB, CMDA, CC, local bodies in the CMD and the CMWSA (paras 3.34 and 5.37);

(iii) acquisition of land required for the project (para 4.04);

(iv) designation of CMDA as its representative to coordinate project implementation (para 4.05);

(v) providing CMDA with adequate and timely funds for completion of CMDA's investment program 1977/78 - 1981/82 (para 4.11);

(vi) debt-servicing obligations related to revenue earning schemes commissioned under the project (para 4.11);

(vii) causing CMDA and WBHB to determine and achieve full cost recovery in area development schemes under the project (para 4.13);

(viii) establishment of equitable beneficiary selection criteria for area development schemes under the project (para 4.16);

(ix) development and installation of appropriate operational policies and procedures, and satisfactory organizations, to administer area development schemes under the project (paras 4.17 and 5.12);

(x) establishment of a Central Valuation Board and revaluation of properties in the CMD (para 5.27);

(xi) causing the CC to (i) establish and operate a separate water supply and sewerage fund, (ii) delink water supply and sewerage taxes from the consolidated tax, and (iii) levy water supply and sewerage taxes sufficient to meet at least 84% of the CC's actual revenue expenditures (para 5.28);

(xii) requirement that the CC achieve established minimum revenue targets (para 5.28);

(xiii) commissioning of studies to advise on the regulation and licensing, if necessary, of tubewells and groundwater supplies in the CMD (para 5.29);

(xiv) development and implementation of proposals concerning institutional responsibilities for water and sewerage revenue collection in the CMD (para 5.29); - 47 -

(xvi) preparationand establishmentof a revised grant structure for local bodies in the CMD (para 5.31);

(xvii) providing the CC, the CMWSA and other local bodies in the CMD with sufficient funds to operate and maintain adequately (i) existing municipal services, and (ii) facilities and services created by CMDA investmentsand transferred to local municipal bodies on commissioning (para 5.31);

(xviii) causing the CC and other local bodies in the CMD to (i) provide satisfactorystandards of operation and maintenance of municipal services, and (ii) achieve annual specified revenue/expenditureratios by 1981/82 and thereafter (para 5.31);

(xix) reorganizationof DMS (para 5.33);

(xx) nomination of the areas and local authorities in the CND that would be subject to provision of services of State- level employees, and preparation and implementation of a feasibilityreport on the organization,operation and financing of appropriatearrangements (para 5.34);

(xxi) review and implementationof appropriate improvementsof the CC's management structure and accounting,stores and financial management (para 5.35);

(xxii) appointmentof suitable consultantsfor provision of accounting,stores and financial management systems for the CC (para 5.36); and

(xxiii) audit of the CC (para 5.36).

(i) consultation with IDA on the five-year investment program (para 4.10);

(ii) employment of consultants (para 5.06);

(iii) installationand operation of budgeting, accounting and management informationsystems, project appraisal, and monitoring systems (para 5.10);

(iv) audit of CMDA (para 5.10); and

(v) operation and maintenanceof area development schemes (para 5.16).

7.02 With the above agreements,the project is suitable for an IDA credit of US$87 million to the Government of India. - 48 -

ANNEX 1

INDIA

SECOND CALCUTTA URBAN DEVELOPMENTPROJECT

Area Development

Part One: Sites and Services Component

A. Design Population

'. In India, households are normally classified into four income groups: economically weaker sector (EWS); low-income group (LIG); middle- income group (MIG); and higher-income group (HIG). In Calcutta the EWS represents approximately 61% of the population. In order to establish significant design standards, a subdivision of this and the MIG categories has been chosen, as indicated in the following table, along with income ranges and percentiles on the income distribution curve:

Income/Rs month Percentile

EWS I & II less than 150 less than 20 EWS III 151 - 200 20 - 31 EWS IV 201 - 350 32 - 61 LIG 351 - 600 62 - 82 MIG I 601 - 1,000 83 - 93 MIG II 1,001 - 1,500 94 - 97 HIG above 1,500 above 97

Almost the whole range will be addressed by the sites and services component, except those groups at the extreme ends of the income curve.

2. It has been possible to provide affordable housing for the economically weake5 sections in the form of dormitory accommodation and small lots (down to 44 m ) by differentially loading part of the servicing costs on to industrial, commercial, and middle and higher income residential lots (paras 50 and 53). Eighty percent of the residential lots and rental units will be allocated to LIG and EWS groups including 7% to families with average monthly incomes below Rs 150.

J. It is anticipated that many of the EWS beneficiaries of the sites and services component will be drawn from the bustees or slums, where they presently live for lack of any affordable alternative. Preference will also be given to those households affected or displaced by other components of CMDA's projects. 1/

1/ Displacement will be kept to a minimum, but certain infrastructure projects, particularly road widening schemes, will affect households and business interests. To the extent possible affected persons will be provided with alternative accommodation near their present place of living or business, but where this is not possible, affected persons will be given priority in the sites and services schemes. - 49 -

ANNEX 1

B. Site Selection

4. The Basic Development Plan (BDP), published in 1966 by the Calcutta Metropolitan Planning Organization, recommended a bi-nodal development strategy for the CMD with a new center at Kalyani. The Planning Directorate in CMDA has reviewed the spatial strategy outlined in the BDP and concluded, some ten years later, than a polycentric policy could be more suitable to Calcutta's long-term needs and, in addition to Kalyani, has recommended that about 20 new centers be developed. The GOWB has accepted CMDA's position and is actively developing a government office complex at Salt Lake, one of the chosen growth centers. As part of the sites and services component of the project one new center will be developed at East Calcutta and another site at West Howrah will be acquired and filled to facilitate future development; both sites are on an east-west axis of the Central Business District (CBD).

5. The East Calcutta project area is located approximately 7 km southeast of the CBD. Construction of the Eastern Metropolitan (EM) Bypass together with two connections with the CBD, to be constructed under the proposed project, will provide excellent transport linkages for this land, strategically located close to the Calcutta City center. The site for the first phase is estimated to accommodate approximately 45,400 people. The total planning area of just over 3,300 ha is also served by five railway stations on the South Suburban line. The first phase of this development lies astride the proposed extensions of the East/West Rashbehari Avenue Connector and the intersection with EM Bypass 1/ (see map IBRD 13016).

6. The West Howrah site is located about 8 km from the CBD and lies between National Highway No. 6 and the existing built-up area of Howrah. 2/ The site will eventually be connected to the CBD by the Kona Expressway and the Howrah/Amta Road (Makardah Road), both of which will be constructed under the IDA II project (see Annex 7). The West Howrah site has locational advantages as a regional service center and will ultimately incorporate 40.5 ha of land for a wholesale center and trucking terminal.

7. The project proposals for East Calcutta and West Howrah are first phase projects within much larger planning areas as summarized below. In addition to residential development, East Calcutta will also contain land for industrial and commercial uses.

1/ The EM Bypass and the extension of the Rashbehari Avenue are included in the traffic and transportation component, Annex 7.

2/ Howrah is the twin city to Calcutta, located on the west bank of the Hooghly River. - 50 -

ANNEX I

Total Project Phase I Area /1 Phase I Area (ha) (ha) Design Population

East Calcutta west of EM Bypass 127.5 36,700 3,300 east of EM Bypass 45.3 8,700

West Howrah 840 239.0 -

TOTAL 4,140 411.8 45,400

/1 Includes working village for washermen, accommodation and facilities for 5,000 cattle and borrow-pit areas.

8. Both East Calcutta and West Howrah have escaped serious encroachment by legal or illegal settlement because of their low-lying nature and current use as paddy fields (rice growing). The ground level at both sites will, however, have to be built up above the flood level; approximately 1 meter of fill will be required.

9. A major innovation of both schemes is the planned acquisition of adjacent land to serve as "borrow-pits", which are ultimately to be integrated as a recreational and commercial resource. The excavation and filling will be carried out by labor-intensive methods and the pits have been designed to produce a number of interconnected water bodies which can be utilized for fish farming and recreational uses. Because of this, conventional public open space standards have been reduced. In East Calcutta parts of the borrow-pit area will also serve as a waste treatment ponding system as well as a source of soft water for the washermen.

10. The internal network of streets and pedestrian circulation has been connected with adjacent existing residential settlements and transportation routes. Pedestrian routes link up residential areas to existing and proposed focal points, i.e. bus stops, major transport arterials, employment areas and railway stations. It is envisaged that retail functions will be concentrated along these routes. Residential lots have been distributed on the site in a way to give higher vehicular accessibility to the larger lots, which will bear a greater part of the total infrastructure cost, thus permitting cross-subsidy to take place (see para 53).

11. The land use distribution for Phase I at East Calcutta and West Howrah are summarized below: - 51 -

ANNEX 1

Filled or Borrow-Pit Total Developed Area Ha_

East Calcutta west of EM Bypass 87.50 40.00 /1 127.50

east of Em Bypass 35.80 /2 9.50 45.30

West Howrah 184.40 /3 54.60 239.00

307.70 104.10 411.80

/1 The borrow-pits will be combined to yield 49.5 ha; they will be used in part as stabilization ponds and to provide water for washermen. /2 Includes washermen/milkmen villages and cattle areas.

/3 Excludes wholesale market and truck terminals.

12. East Calcutta is an area characterized by its residential demand, and the existing built-up area consists of intensive industrial uses in pockets of extreme congestion. The opportunity is being taken in Phase I to resettle 1,700 washermen who are currently operating nearby under difficult physical conditions. In addition, this site is one of the five locations designated for buffalo resettlement under the Khatal Removal Program (para 56) and will accommodate 5,000 buffalo. The land use distribution for the first phase development at East Calcutta divided between developments on the east and west sides of the EM Bypass is summarized in the following table: A. harketable Land to Which Costs Are Allocated

East Calcutta West of EM east of EM Total LAND USE Area (ha) 2 Area (ha) Z Area (ha) 2

Residential 49.00 56.0 6.50 18.2 55.50 45.0 Industrial 10.00 11.4 10.00 8.1 Commercial 3.00 3.4 3.00 2.4 Institutional 4.00 4.6 0.50 1.4 4.50 3.7 Washermen 3.50 9.8 3.50 2.8 Milkmen 18.00 50.3 18.00 14.6

Sub-total 66.00 75.4 28.50 79.7 94.50 76.6

D. Non-Marketable Land To Which Costs Are Allocated

East Calcutta West of EM east of EM Total LAND USE Area (ha) Z Area (ha) 2 Area (ha) 2

Main roads & terminals 4.50 5.2 1.30 3.5 5.80 4.7 Other roads & footpaths 15.50 17.7 3.00 8.4 18.50 15.0 Open space /1 & small water bodies 1.50 1.7 3.00 8.4 4.50 3.7

Sub-total 21.50 24.6 7.30 20.3 28.80 23.4

TOTAL 87.50 100.6 35.80 100.0 123.30 100.0

/1 Borrow-pit area adjacent to the site will be converted to open space/fish farming, etc., amounting to 49.50 ha. - 52 -

ANNEX I

D. Plot Size and Development

13. The following seven categories of accommodation provided at East Calcutta will offer a range of options for the various income groups:

Optionsl EWS Plot No. of Target Popu- Size No. of Completed X of Total On-Lot Group lation (nM) Lotr Rental Units Total Units Development

EWS 1 & 11 3,795 32 - 684 684 J1 8.9 Dormitory Rental Units

EWS III 8,485 44 1,530 - 1,530 19.9 Sanitary core, plinth and building materials loan

EWS IV 14,055 50 2,535 - 2,535 32.9 Sanitary core, plinth and building materials loan

LIG 9,850 60 1,776 - 1,776 23.0 Sanitary core, plinth and building materials loan

MIG I 5,630 125 741 (274) /2 1,015 9.6 None

MIG II 2,045 173 254 (115) 369 3.3 None

BIG 1,540 243 184 (94) 278 2.4 None

45,400 7,020 684 8,187 100.0 (483)

Ll This total includes the milkmen and washermen villages (east of the EM Bypass). IS Sitea will be provided for higher income group rental units (shown in parentheses) under the project, but the structure will not be provided. The West Bengal Housing Board (WBHB) will construct the units and obtain fisamce from local commercial sources.

Approximately 14% of all accommodation will be available for rental. For the four EWS categories, three different types of accommodation or lot size are proposed, the design solution being dicated by the ability of the various income groups to pay 15-20% of monthly incomes towards their accommodation.

14. Types EWS I and II. Single-room units of the dormitory type will be provided at a monthly rent of Rs 20 to accommodate families who are below the 20th percentile on the income distribution curve; the land per unit would be about 32 m 2. Three toilets and three shower units will be provided for every ten units; cooking facilities will be available adjacent to each room. In certain instances it is envisaged that the renting of bed space will take place, enabling individuals to share the costs.

15. Type EWS II&. This group is to be provided with a serviced lot of approximately 44 m , a sanitary core (containing a water closet and bathing facility), foundations and plinth walling around the perimeter of the plot. - 53 -

ANNEX 1

In addition the purchaser would be eligible for a housing loan of Rs 2,000 1/ to enable a single-room shelter to be erected. This unit is expected to attract households that can afford an estimated average expenditure of Rs 25-30 per month on the plot and superstructure. The total monthly repayments will be Rs 26.

16. Type EWS IV. A serviced lot of 50 m will be provided together with a sanitary core and perimeter plinth wall. In addition, the purchaser would be eligible for a housing loan of Rs 2,400 1/ to enable a basic shelter to be erected. The unit would attract households earning between Rs 201 and Rs 350 per month. The total monthly payment will be Rs 42.

17. Type LIG. A serviced lot of 60 m will be provided together with a sanitary core and perimeter plinth wall. In addition, the purchaser would be eligible for a housing loan of Rs 3,000 1/ to enable a two-room house to be built. The unit would attract households earning between Rs 351 and Rs 600 per month. The total monthly payment will be Rs 75.

18. The construction of the perimeter plinth wall for the EWS III, EWS IV and LIG will facilitate site identification and reduce party wall conflicts during the self-help construction stage. Technical assistance and funds for the purchase of basic building materials will be available to allottees. All lot options allow for the incremental extension and improvement of the dwellings.

19. Types MIsGI/MIG II/HIG. Approximately 20% of the total number of lots has been allocated to the middle and higher income groups. The lots are full serviced and will be sold at competitive but profitable prices 5anging from Rs 70 per sq m to about Rs 87 per sq m. The lot sizes of 125 m , 173 m and 243 m enable a wide interpretation of individual house designs to be possible, and their distribution has been planned to allow the maximum flexibility in order to respond to market pressures, e.g. the construction of walk-up "group-ownership" flats. About 30% of the MIG and HIG plots have been allocated for the construction of rental units.

E. Core and Rental Housing Details

20. Core. A sanitary core consisting of a water closet (w.c.) and wash facility will be built at the rear of the lot. The wash facility will have a tap and a built-in water storage vat. It will be constructed in brick

1/ At 1977 prices. 54 -

ANNEX 1 with a concrete floor and corrugated asbestos sheet roof. The estimated cost of the core and plinth wall is Rs 2,417 1/, including sewerage and plumbing connections.

21. Self-HelpConstruction. A large amount of self-help construction is expected to take place on EWS III, EWS IV and LIG lots. Initially the allottee will probably build a temporary structure and follow this with a permanentbuilding. The temporarystructure will be built by self-help methods; constructionof the brick walls, roof, plumbing and other work is likely to be executed by self-help with the assistance of professionalmasons and other technicalpersonnel. Loans for the purchase of building materials will be available to plot holders from WBHB at 8.5% interest per annum for 20 years. The various stages of constructionare shown in the sketches at the rear of this report.

22. Rental Housing. For the EWS I and EWS II families, rental housing in the form of dormitory accommodationwill be const5uctedby the WBMB. Each dormitory consists of 10 rooms of approximately12 m each with an adjacent cooking room/veranda. All rooms are grouped around an internal hard-paved court, in which are located the w.c.'s and wash facility units. The building will be constructedin brick with tile roofs on bamboo framing. Floors will be finished in concrete or clay tiles laid on a compacted earth base.

23. Rental housing for the MIG I, MIG II and HIG groups will be financed outside CMDA's program, and will probably consist of four-story walk-up flats in reinforced concrete framed constructionor load-bearingbrick construction. CMDA's role will be limited to handing over fully-serviedsites to the WBHB, which will build the units 2/ or in certain cases auction the sites to private developers,cooperatives or other agencies for development.

F. Infrastructure

Water Supply

24. Design criteria adopted for the project include an initial per capita supply of 75 lcd, an industrial demand of 20,000 liters/ha/day,a cattle demand of 150 liters/head/day,peak flow factor of 1.85, residual pressure of 9 m, and an overhead tank with a capacity of 30% of the average daily flow with low water level set at 12 meters above ground level. All materials will conform to the Indian Standards Specifications. Pipes of sizes 150 mm in diameter and below will be manufacturedfrom cast iron.

1/ Including physical and price contingencies.

2/ With funds available from local commercial sources. - 55 -

ANNEX1

25. In the early years at East Calcutta groundwaterwill be utilized, but the source will be transferredto the Corporation'ssystem as soon as filitered water is available in sufficientquantities and at adequate pressure. This quantity of water will also serve the 5,000 cattle to be resettled.

26. The 1,700 washermen present a special problem during Phase I. The groundwater in East Calcutta is hard, and it is not practical to use this water for washing clothes. Water for clothes washing will be supplied from a pond formed from borrow-pits. The size will be designed to deliver 1,000 liters per day per washerman, i.e. a daily supply of 1.7 Mld. A 6 ha pond 3 m deep is proposed with controlled connections to the remainder of the ponding system.

27. The water requirementsfor fire fighting will be met from hydrants sited at locations agreed with the West Benegal Fire Services Authority. The hydrants will be placed at intervals of 120-150m and be supplied by pipes with a minimum diameter of 100 mm.

Sewerage

28. Separate sewerage systems will be provided under the project for raw sewage and surface water drainage, and 80% of water supply will enter the raw sewerage system. Other design criteria adopted include a 26,000 liters/ha/day infiltrationallowance, 2.75 peak flow factor, and minimum velocity at peak discharge of 0.6m/second. Salt glazed earthenwarepipes will be used for sizes 450 mm diameter and below and concrete pipes will be used for sizes over 450 mm.

29. In East Calcutta the sewage will be pumped to a treatment plant comprised of a series of stabilizationponds. It is proposed that part of the effluent from the stabilizationponds will be connected to the first stage of an aquaculturesystem (fish farming) utilizing the land-fill borrow-pits. Expert advice on the design and stocking of fish ponds from borrow-pits is being sought through the Department of Fisheries and Agriculture.

Surface Water Drainage

30. Run-off requirementshave been calculatedusing rainfall intensities based on a two-month storm, 70% impervious factor and a time of entry of five minutes; open drains of trapezoidalcross-section will be utilized. Generally, surface water drains will be constructedwith sand/cement rendered brick sides on a concrete invert. It is possible to discharge surface water into drainage canals at many points on the site; pumping will not be necessary.

Solid Wastes

31. Approximately20,000-25,000 kg of solid wastes will be generated on the site per day. Containerizedstorage will be sought from the outset. Two 7-ton tipping trucks will be supplied for transportingwastes, including street sweepings. Solid wastes will be transported to the Dhapa/Bantala disposal areas. - 56 -

ANNEX 1

Cattle Wastes 32. It is intended that cattle manure (about 4,500 m net volume) from the cattle sheds at East Calcutta will be disposed via anaerobic digestion ,ding to the generation of biogas. A feasibility study, aimed at integrating the possible on-site (pumping and heating) and off-site (domestic cooking) application of the generated biogas will be initiated by CMDA. The study will also focus on the social and economic (marketability of biogas and the digested manure) aspects of the biodigestion schemes. The dilution water requirements for the feed slurry to the biogas plants will be met from the effluent discharge <.om the treatment ponding system.

Integrated Scheme

33. An innovative approach representing a cost-effective solution for the entire waste disposal problem has been proposed for the East Calcutta area. This involves an 'integrated scheme' that combines the previously mentioned elements of waste water disposal, reuse of the treated effluent (aquaculture and other uses) and bioenergy recovery from the cattle waste digestors.

Roads and Footways

34. Spine roads will have a right-of-way of 26 m with a 7 m wide carriageway and two footways provided in the first stage. Access roads will have a right-of-way of 7 m with a 2.5 m wide brick paved road and minor roads will have a right-of-way of 9 m with a 2.5 m wide carriageway. Industrial roads will have a right-of-way of 18 m and consist of a 13 m wide carriageway with two 2.5 m wide footways.

35. The carriageways of the spine, minor and industrial roads will consist of a sub-base of ashes, on which will be laid a base course of broken bricks with bitumen macadam surfacing. The thickness and number of layers will depend on forecast traffic weight and volume. Brick-paved access roads and footpaths will consist of brick on edge paving laid on a compacted clinker sub-base. The specification of materials and workmanship will conform to those of the Indian Roads Congress and the Indians Standards Institute.

Street Lighting

The spine road will be illuminated to conform with standards of the Indian Standards Institute. The size and spacing of other lights on the remni&nder of the streets and footways will be determined by CMDA on the basis of security requirements.

Power

37. High-tension mains pass throught the site. It will, however, be necessary to make provision for extending the distribution, since an ultimate load of of 4.0 MW is expected at East Calcutta. This will require the - 57 -

ANNEX 1 installation of a high-voltage sub-station, overhead and underground high- tension mains, several distribution sub-stations and medium and low-voltage mains. The above system will adhere to design specifications of the Indian Standards Institute. The Calcutta Electricity Supply Corporation (CESC) will be responsible for the power supply to the project area. All power supply equipment will be installed by CESC, but the project authority will have to bear a part of the total cost as service connection charges. Assurances have been received that an adequate supply of electricity will be provided in a timely fashion and in advance of requirements.

Costs of Off-Site Infrastructure

38. The cost of the trunk road needed to open up the area is included in the traffic and transportation component. Water supply headworks, sewerage outfalls and treatment plants, electrical transformers and power grid will be charged to the concerned agencies and recovered through connection charges, user charges and taxes.

G. Community Facilities

39. The following design standards have been adopted:

Schools:

(a) one primary school of five classrooms accommodating 400 pupils (double shift) for a population of 3,500 persons;

(b) one secondary school of 10 classrooms, two laboratories, three administrative rooms, and play area/sports facility, serving a population of 20,000 persons;

Health Centers:

One health center comprising waiting areas, dispensary, four- bed male and four-bed female wards, three-bed special ward, and offices for doctor/mid-wife per 15,000 population.

In addition to the schools and health centers, one of each of the following will be provided: market, community hall, police station and administration building.

H. Beneficiary Selection Criteria

40. All applicants and/or cooperatives will be screened and selected by CMDA acting in association with WBHB. To be eligible for sites and services - 58 -

ANNEX 1 lots and rental units, an applicant or members of a cooperative (a) must be at least 18 years of age; (b) have a regular source of income and the monthly household income should, for each lot type, be in the range of income indicated below; and (c) not be the owner of any other house or house site in the metropolitan area. A house or house site owned by any other household member would be considered as owned by the applicant.

41. In the event that potential beneficiaries capable of meeting appropriate criteria for any available benefits exceed the available supply, selection of such beneficiaries will be made by a random number selection process using identity numbers ascribed to the beneficiaries at the time of application. Priority, however, will be given to applicants belonging to scheduled castes and scheduled tribes and to applicants who may be displaced as a result of the execution of the Second Calcutta Urban Development Project. Information concerning the availability of lots and rentals units will be disseminated by CMDA through the mass media and other appropriate means.

42. The ranges of household income required to qualify for the different size lots will be as follows:

% range of number of Income Approximate serviced lots to be Rs per month lot size (m ) provided

EWS I and II under 150 32 5 - 7 III 151 - 200 44 14 - 20 IV 201 - 350 50 30 - 35 LIG 351 - 600 60 20 - 25 MIG I 601 - 1,000 125 10 - 15 II 1,001 - 1,500 173 3 - 5 HIG 1,501 - and above 253 3 - 5

I. Implementation

43. Wherever possible CMDA, while acting as the main developer, will utilize other agencies provided they have the experience to take on the allocated tasks. This is particularly relevant with respect to estate management, an area where CMDA is inexperienced. While CMDA envisages managing some of the compact urban renewal schemes like Sealdah and Howrah Fish and Pan Market redevelopments, it does not propose to move into housing or industrial estate management, particularly since there exist viable institutions already active in this field, e.g. WBHB and WBSIC.

44. East Calcutta will be developed by CMDA, which will buy the land and supervise the construction of the earthworks, infrastructure, cores, plinth - 59 -

ANNEX 1 walls and community facilities. CMDA will then transfer serviced land and the associated debt for the residential, commercial and washing areas to the WBHB which will construct, rent and manage most of the rental units 1/, sell the serviced lots and process and manage the mortgage loans.

45. The industrial site will be handled through WBSIC. CMDA will service the land and then transfer it and its associated debt to WBSIC. IDA will participate through nominated banks in small-scale enterprise loans to the EWS 2/, but the bulk of the commercial and industrial loans will be provided by the banking sector (see Annex 5, Part 3). CMDA will also construct about 50 industrial sheds on an agency basis for WBSIC who will manage the site and service the debt. The sheds will be rented to entrepreneurs, many of whom will provide materials and services to the low-income families for completion of their structures.

46. The cattle compounds, milk processing facilities and biogas plants will be developed by CMDA and transferred to the Animal and Husbandry Direc- torate, GOWB, for operation and maintenance. The funds for this subproject component will be available under the Netherlands Government bilateral assistance program (para 56).

47. Design Implementation for CMDA. In addition to its recently enlarged Planning Directorate, CMDA will also utilize the services of local consulting firms to assist in the design and preparation of contract documents for sites and services schemes. The Planning Directorate now has sufficient staff capable of dealing with the conceptual, policy and program aspects and to brief and supervise consultants, but they are not able to deal with detailed design. CMDA will therefore concentrate on what it can do or readily expand to do, i.e. supervise construction. To this end, it has recently established a new Area Development Cell which will coordinate the letting and supervision of building and civil engineering contracts. The establishment of this new cell is for 170 engineers, technicians and supporting staff. In March 1977 less than 10% of the slots were filled, but the job specifications are such that there will be no difficulty in recruiting the remainder of the staff when they are required. The extent of consultant assistance will be a function of the volume of work undertaken. It is estimated that approximately 600 man/months of local consulting services will be required for the design of these two schemes: 200 in 1977/78 and 400 in 1978/79.

1/ Some of the rental sites may be sold to cooperatives and/or private developers if the demand arises.

2/ Rs 30 lakhs has been included in the SSE component. - 60 -

ANNEX 1

J. Cost Estimates and Land Pricing

48. The total cost of the component is Rs 13.93 crores net of contingencies as summarized in Table I and detailed in Tables 2 and 3. All costs for land acquisition, earthworks and on-site infrastructure would be charged to site development, as indicated in the following table:

Washermen's Milkmen's East Calcutta Work Area Work Area -- Rs Crores ------

Land filling 1.20 0.04 0.20 On-site infrastructure 1.02 0.02 0.17 8% design and supervision 0.18 0.01 0.03 15X physical contingency 0.33 0.01 0.05 Land acquisition 1.04 0.03 0.17

Total chargeable cost 3.77 0.11 0.62

Marketable land (m ) 730,000 35,000 180,000

Development cost (RsIm ) 51.64 31.43 34.44

49. The difference in development costs among the areas are due to physical on-site conditions; the actual sale price, however, will vary with the type of lot and its location within the site. Part of the surplus realized, particularly from the sale of good commercial and industrial land selling at between Rs 90-150 per sq m, will be utilized to reduce the price of the EWS lots and provide a subsidy to the rental dormitory housing for the EWS I and EWS II. Average sales prices by type of lot and land use and total values are shown in Table 4, and the land development cost per hectare, per lot and per capita for the west side of East Calcutta is as follows: - 61 -

ANNEX I

Cost / Ap- Cost per Average Cost Cost: portioned to Residential per per Residential ha /2 Structure/Lot Capita Use (Rs lakhs) Rs'000 US$'000 Rs US$ Rs US$

Land 70 108.5 12.6 1,052 122 191 22 Filling 100 155.0 18.0 1,503 175 272 32

Sub-total (a) 170 263.5 30.6 2,555 297 463 54

Surface water drainage 12 18.6 2.2 180 21 33 4 Water supply 15 23.3 2.7 225 26 41 5 Sewerage 24 37.2 4.3 361 42 65 8 Roads & footways 21 32.6 3.8 316 37 57 7 Electricity & street lighting 12 18.6 2.2 180 21 33 4 Landscaping 3 4.7 0.5 45 5 8 1

Sub-total (b) 87 135.0 15.7 1,307 152 137 29

TOTAL (a) & (b) 257 398.5 46.3 3,862 449 700 83

Off-site infrastructure 134 207.8 24.2 2,014 234 365 42

GRAND TOTAL 391 606.3 70.5 5,876 683 1,065 125

/1 Includes physical contingencies and design costs.

/2 Includes road and footways.

K. Financial Analysis

50. One of the prime objectives of the East Calcutta project has been to demonstrate the feasibility of providing urban services to low-income groups without government subsidies. This was sought through a variety of techniques, the most important of which was to design into the project sources of revenue that could be used to reduce charges to the low-income families who would settle there and thus make it affordable by them. Project charges to low-income beneficiaries, therefore, have been offset by the amount of revenue anticipated from the sale and lease of middle and higher income residential, commercial and industrial land developed in the project area. In addition, project design was based on the use of self-help construction, high densities and small lot sizes. 62 -

ANNEX 1

Cost Recovery and Charging of Benefits

51. The pricing of 99-year leases and of rents for each site at East Calcutta shall be based on the prlnciple of recovery of all costs incurred, including:

(a) land acquisition;

(b) site preparation;

(c) construction of residential lots, sanitary cores, walls, dormitory units and other accommodation and domestic facilities;

(d) construction of industrial sheds, markets and vending locations, washing slabs and cattle sheds with allied structures;

(e) constructon of on-site infrastructure including water supply, sewerage, drainage, roads and electricity services;

(f) any other works or services determined by the Authority or WBHB in agreement with the Association as recoverable from beneficiaries;

(g) planning, design and construction supervision of the above;

(h) interest during construction;

(i) operation and maintenance to the extent not recovered through taxes or other user charges levied by responsible authorities; and

(j) management and administration costs including adequate provision for bad debts.

52. Each beneficiary shall make a downpayment for the housing leasehold units before occupation of not less than 5% of the total cost for EWS III, IV and LIG units and not less than 10% for all other housing units. Other facilities will require a downpayment before occupation of not less than 15%. Industrial and commercial plots will be leased at prices in the range of not less than Rs 90 through Rs 150 per square meter in East Calcutta. Milkmen shall pay charges sufficient to meet all costs of relocation estimated at Rs 0.15 per liter for milk processing and Rs 20 per month per head of cattle.

53. In practice, full cost recovery, when applied to large urban development, requires interpretation. It must be limited by established tradi- tions in financing certain "off-site" and other public services such as major roads and schools, which are not usually paid for directly through housing charges. The guideline adopted for this component was that those costs normally borne by private developers in a private housing scheme would be - 63 - ANNEX 1 passed on to beneficiaries. Other expenses that normally would be incurred by government agencies in support of private housing schemes will be borne by these agencies when supporting sites and services projects. The following table indicates the allocated cost of each type of residentialunit with on- lot developmentat East Calcutta:

Material Cross Total Developed loan or Transfer Charge Monthly Income Lot Type land costs Core structure per lot per lot payment Groups ------Rs ------Rs per mcnth

EWS I/II(R) /1 1,664 5,200 -4,689 2,175 20 under 150 EWS III 2,288 2,417 2,000 -3,555 3,150 26 151-200 EWS IV 2,600 2,417 2,400 -2,302 5,115 42 201-350 LIG 3,120 2,417 3,000 + 583 9,120 75 351-600 MIG I 6,500 +2,660 9,160 70 /2 601-1,000 MIG I(R) 4,264 +1,746 6,010 225 /3 601-1,000

MIG II 8,996 +5,019 14,015 107 /2 1,001-1,500 MIG II(R) 5,980 +3,336 9,316 350 /3 1,001-1,500

HIG 12-,636 +9,861 22,497 165 /2 1,501 and above HIG(R) 8,580 +6,695 15,275 500 /3 1,501 and above

/1 Refers to rental unit. /2 Serviced lots only at mortgage terms of 8 1/2% for 20 years. /3 Rents include management and maintenance fees.

Cross Transfers

54. Revenues resulting from the sale of higher income residential lots and rental units, and industrial and commercial lots will be an important source of additional funds for differentiallyloading project costs and thus benefiting lower income groups. It is estimated that a sum of Rs 1.55 crores will be available for cross-transfer. This will defray part of the cost of providing serviced land to the lower income groups.

Financial Implicationsfor GOWB Agencies and Commercial Banks

55. The estimated debt CMDA will pass to WBHB (includinghouse materials loans), WBSIC and the Animal and Husbandry Directorate is as follows, (all figures include contingencies): (i) WBHB, Rs 7.01 crores; (ii) WBSIC, Rs 1.10 crores; and Animal and Husbandry Directorate,Rs 1.55 crores. The commercial banks will participate in building, equipment and working capital loans to the commercial and small-scaleenterprises and in providing house mortgages and constructionfinance for rental units, for middle and higher income groups. The estimated extent of the commercial banks' partipationdepends on demand and individual requirements;it cannot be accurately determined,but is is expected to be about Rs 6 crores. - 64 - AN NEX I

FinazcLal Assiscance for the Khatal 7/ Removal Pgram

- E a nXcsG:'vlandsGcvccaZrrat i s uurrentlv f 1nancing e .ococeRtion of 20,000 buffalo 2/, currently living in a large number of scattered compounds, and resettling them in five concentratpd locat'ionswnere -eterinary

: -ices 9milk processingand marketlng facilit_s -willbe avalLable, East Calcutta has been chosen as a site for resettling 5,000 bufralo.

L. Implemanting Agencies

West Bengal Housing Board (WINE)

57. WBHB was set un 72 as an agency Qf the state government. It has four members appointed Fy -QT1B, and its headquarters are in Calcutta. WBHB designs, builds and sells houses on a cash or hire purchase basis and currently employs a housing commissioner supported by approximately 170 professional and 110 subordinate staff. The technical staff are headed by a Director of Engineering and a Chief Architect. and other staLf cadres are headed by the Secretary9 Fir.an4al Advisor and Sales Manager.

58. The availability of funds has determined the rate of growth of WBHB. Funds have so far been forthcomlng from the GO! through the Housing and Urban Development Corporation (HUDCO), GOWB and market borrowings, though the latter are liaited and amounted to only Rs 25 lakhs in 1976/77. HUDCO loans are made on a scneme-by-scheme basis; HUDCO provides 67% of construction cost at interest rates varying between 5.5% and 11.5%. The lower interest is charged ?n EWS housing and the higher interest on HIG housing. GOWB financing has .een restricted to seed capital of Rs 1.40 crores made during the period 1972-74 consisting of Rs 50 lakhs in real estate and Rs 90 1akhs in cash. Under existing procedures, WBHB requires 40% as downpayment and the remaining 60% over a fixed term (usually 20 years) at varying interest rates depending on the financial terms available to WBHB. Each individual housing scheme is expected to be financially viable with the sale prlce designed to cover all development and supervision costs, administration ana rinance charges.

59. Up to the present WBHB has only been involved in sales and not rental and management. Since this project component encompasses both sales rentals, WBHB will gear itself to cope witth increased responsibiiities. g negotiations GOWB agreed to establish separate sites and senrices and ren 1 wings in WBHB by March 31, 1979.

1/ Buffalo compound.

2/ There are 60,000 head of buffalo in the CMD. 10,000 have been resettled already at Harrigata, but the program has stopped for lack of funds. - 65 - ANNEX 1

The West Bengal Small Industries Corporation Ltd. (WBSIC)

60. WBSIC was established in 1961 as a Public Limited Company registered under the Companies Act of 1956. WBSIC is wholly owned by GOWB with a paid- in capital of Rs 85 lakhs as of January 1977. WBSIC has its headquarters in Calcutta and several regional offices in West Bengal. About one-third of the total staff of about 300 are located in the CMD. WBSIC's objectives are to aid, assist and promote the small-scale industry in the State through a variety of functions including provision of (mainly scarce) raw materials; hire purchase of machinery; setting up of industrial/commercial estates; and assistance to women entrepreneurs. In addition, WBSIC has been entrusted to administer several schemes on behalf of the Directorate of Cottage and Small-Scale Industries (CSSI) including: consultancy service to small-scale industry; margin money (seed capital) schemes; and composite nursery scheme for development of sericulture.

61. WBSIC has also been successful in setting up industrial/commercial estates, a responsibility which GOWB entrusted to WBSIC in 1973. Since that time, WBSIC completed construction of four industrial estates and one commercial estate providing accommodation for 453 units including 310 for small businessmen at a total cost of about Rs 5.05 crores of which commercial banks financed Rs 1.01 crores. Presently three more industrial estates are under construction and others are planned. WBSIC is a reasonably well-run profitable corporation, which has experience in constructing and administering industrial estates for small-scale industry and small business in West Bengal. It is qualified to sell/lease industrial plots of the proposed East Calcutta industrial estate.

M. Economic Evaluation

62. The sites and services component is expected to have a substantial influence on GOWB's approach to urban shelter and infrastructure for lower income groups. It would demonstrate the feasibility of undertaking self-help housing affordable to the low-income population, and would thereby help to shift the attention of the authorities responsible for housing from their present emphasis on middle and upper income housing towards the needs of the EWS.

63. The measurement of economic benefit is based upon the estimate of inputed rental value for the dwellings to be constructed. A comparison with rental values elsewhere in the metropolitan area with similar service conditions as the site in the project was conducted by Architects Collaborated (consultants to CMDA). Based on this analysis 2nd discus2ions with residents, it was estimated that in East Calcutta for 44 m and 50 m lots, both with one room and cooking area constructed by self-help labor, the facilities would rent monthly at Rs 150 and Rs 200, respectively. For the multi-family 2 dormitory rental units, the monthly rent would be Rs 100 per unit. The 60 m serviced lot would rent monthly for Rs 225 per unit for two rooms constructed - 66 -

ANNEX 1 by self-help labor. For the larger lots, the actual payments made by the pur- chasers of the lots are assumed to represent the benefits derived as these payments would indicate the willingness to pay.

64. For lots designated for industrialand coiFercial uses, benefits have been computed at an average market value per m of Rs 90 and Rs 150 at East Calcutta respectively.

65. Costs consideredon the economic analysis include costs of site preparation, core construction,on-site infrastructure,an allocated share of off-site infrastructure,rental structures,materials for self-help housing construction,an imputed value of self-help labor, project administration, physical contingenciesand interest during construction. Land was priced at the market value prior to development,which was considered to reflect opportunitycost. On this basis the internal economic rate of return on the sites and services component as a whole is estimated at 18%. The rate of return for the housing component alone (excludingall other marketable land and the associated development costs) is estimated at 17%. A decrease in the occupancy of rental units by 20% would give a rate of return of 14% and an increase in project costs by 20% would also give an acceptable rate of return of 14%.

Table 1

Summary Cost Estimate (Rs crores)

West East Washing Cattle Howrah Calcutta Slabs Compounds Totals

Land acquisition 1.77 1.04 0.03 0.17 3.01 Land filling 2.23 1.20 0.04 0.20 3.67 Infrastructure On-site 1.02 0.02 0.36 1.40 Off-site 1.50 0.01 1.51 Residential On-plot dev. cores 1.17 0.10 1.27 Loans 1.45 1.45 Comunity facilities 0.77 0.77 Rental structures EWS I and II 0.30 0.30 Industrial and other units 0.13 0.13

Sub-total 4.00 8.58 0.20 0.73 13.51

Design and supervision,/l 0.05 0.32 0.01 0.04 0.42

Sub-total 4.05 8.90 0.21 0.77 13.93

Physical contingency 0.33 0.91 0.03 0.06 1.33

Price contingency 0.44 2.03 0.05 0.12 2.64

GRAND TOTAL 4.82 11.84 0.29 0.95 17.90

Additional funds amounting to Rs 5.81 crores will also be required from commercial banks to develop the MIG, HIG homes and rental units (Rs 1.66 crores), commercial structures (Rs 1.00 crores) and loans to small-scale industries (Rs 3.15 crores).

/1 Includes consultant's services. Supervision will be undertaken by CNDfA. ANNEX 1 -67 - Table 2

INDIA

SECOND CALCUTTAURBAN DEVELOPMENTPROJECT

Area Development

Sites and Services Component

Detailed Estimate of Cost - Area Development East Calcutta (west of EM Bypass)

Rs crores

A. Land acquisition 0.95 Sub-total A 0.95

B. Land filling 1.09 Sub-total B 1.09

C. On-site infrastructure: 1. roads 0.23 2. drainage 0.13 3. street lighting 0.13 4. water supply 0.16 5. sewerage 0.26 6. landscaping 0.03 Sub-total C 0.94

D. On-plot development: 1. sanitary core, plinth + connection (5,841 @ Rs 2,000) 0.92 Sub-total D 0.92

E. Off-site infrastructure: 1. water supply 0.24 2. sewerage 0.50 3. electricity 0.60 4. drainage 0.11 Sub-total E 1.45

F. Community facilities: 1. primary schools (13 new @ Rs 68,000) 0.08 2. high schools (2 new + improvements) 0.16 3. health centers (3) 0.15 4. police station (1) 0.04 5. fire station (1) 0.02 6. post office/admin. building 0.13 7. market 0.08 8. community center 0.10 Sub-total F 0.76

G. Rental dormitories for EWS I and II (350 units) 0.15 Sub-total G 0.15

H. Industrial units (50 @ Rs 25,000) 0.13 Sub-total H 0.13

TOTAL A - H-/- 6.39

I. House material loans 1.20 TOTAL A - I 7.59

/1 Excludes the following which have been included in the project summary costs: design and supervision physical contingencies price contingencies ANNEX 1 Table 3 - 68 -

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Area Development

Sites and Services Component

Detailed Estimate of Cost - Area Development East Calcutta (east of EM Bypass) (Rs crores)

Washermen Milkmen Area & Residential Work Area Cattle Sheds Total

Land acquisition 0.09 /1 0.03 /2 0.17 0.29

Land filling 0.11 0.04 0.20 0.35

Infrastructure - on site 0.08 0.02 /3 0.17 /4 0.27 - off site 0.05 0.01 0.06

On-plot development 0.25 /5 0.10 /6 0.35

Community facilities 0.01 /7 0.01

Rental dormitory accommodation for EWS I & II (334 units) 0.15 _ _ 0.15

Sub-total 0.74 0.20 0.54 1.48

House material loans 0.25 0.25

TOTAL /8 0.99 0.20 0.54 1.73

/1 Includes sewage treatment ponds. /2 Includes drying area. /3 Includes special water supply, pumping, etc. /4 Includes estimated cost of extensive drainage to cattle sheds. /5 Sanitary core, plinth and connections. /6 Wash slabs and equipment. /7 Multi-purpose center comprising school/clinic/community center. /8 Excludes the following which have been included under project summary costs: (i) design and supervision (ii) physical contingencies (iii) price contingencies INDIA

SECOND CALCUTTA URBAN DEVELOPMENTPROJECT

Area Development

Sites and Services Component

FINANCED BY FINANCED THROUGH Developed San. Core Loan/ Amount No. of Total Surplus/ Other Commercial GOWB Land Cost & Plinth Structure Total Cost Chargeable Units (Deficit) CMDA Agencies WBHB WBSIC Banks Departments

EAST CALCUTTA

EWS I & II 1,664 5,200 6,864 2 175 684 (0.33) 0.14 0.14 EWS III 2,288 2,417 2,000 6,705 3,150 1,530 (0.55) 0.48 0.48 EWS IV 2,600 2,417 2,400 7,417 5,115 2,535 (0.58) 1.30 1.30 LIG 3,120 2,417 3,000 8,537 9,120 1,776 0.11 1.62 1.62 0.74 MIG I - ownership 6,500 6,500 9,160 741 0.20 0.68 0.74l 0.68 - rental 4,264 4,264 6,010 274 0.04 0.16 0.36 /3 0.52

MIG II - ownership 8,996 8,996 14,015 254 0.13 0.36 0.46 /2 0.36 0.46 - rental 5,980 5,980 9,316 115 0.04 0.11 0.21 /3 0.32

HIG - ownership 12,636 12,636 22,497 184 0.18 0.41 0.46 /2 0.41 0.46 - rental 8,580 8,580 15,275 94 0.06 0.14 0.28 /3 0.42

Industrial land 0.52 crores 0.52 crores 0.95 crores 0.43 0.95 3.15 0.95 3.15 /4 - rental units 30,250 /5 30,250 30,250 50 - 0.15 0.15

Commercial land 0.16 crores 0.16 crores 0.52 crores 0.36 0.52 1.00 0.52 1.00

Institutional facilities 0.23 crores 0.94 crores 1.17 crores 1.17 crores - 1.17 1.17

MILKMEN AND WASHERMENVILLAGES

Washermen work areas 0.11 crores /6 0.13 crores 0.24 crores 0.24 crores - - 0.24 0.24 1.55 Milkmen work areas 0.62 crores /7 1.02 crores 1.64 crores 1.55 crores - (0.09) 1.55 6.66 9.98 6.66 7.01 1.10 5.81 2.72

/1 Developed land cost - Rs 52 per m2. /2 Represents an estimate of total housing loans to finance MIG and HIG structures. In practice, amounts are expected to be less. /3 Represents estimated cost of rental structures. /4 Small-scale business and industry loans including EWS. /5 Land cost of rental units included in industrial land. 2 /6 Developed land cost_of washermen's work area - Ra 31.43 per 2 m /7 Developed land cost of milkmen's work area - Rs 34.44 per m

PlZ - 70 -

ANNEX 1 Part 2

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Area Development

Part Two: Redevelopment of Howrah Fish and Pan Market

66. This subproject involves the redevelopment of an existing site in a prime location adjacent to Howrah Railway Station.

N. Location and Site Conditions

67. The redevelopment area totals 4.12 ha 1/ and is situated astride the existing Buckland Bridge Approach Road. The east side fronts on the Howrah bus and tram terminals; the west side is the Harimoshon Bose Road. Howrah Station is to the south.

68. Because of its strategic location (fish arriving from Bihar, Uttar Pradesh, Madras, Orissa and West Bengal, transported by the existing railway system), this area became predominately a retailing outlet for fish and related services such as ice-packing stalls, fish packing, etc. For similar reasons it also became the location of a very intensive pan leaf market. The fish and pan trade together constitute 50% of all businesses carried out in the area. Other land uses include residential, mixed commercial, industrial, hotels, warehouses, institutional and religious. The fish and pan leaves are hand carried from Howrah Station, and the locational advantages of the site preempt the possibility of relocation which would cause economic distress to many people, particularly the urban poor.

69. The land is, however, underutilized, with an existing built-up plot-ratio of 0.94; only 15% of all structures are classified as being in good condition, and these cover less than 50% of the total built-up area. Approximately 3,500 persons live on the site, the majority of whom are in the EWS and LIG income groups and are directly dependent on the fish/pan markets for their income. In addition, 1,200 hawkers daily ply their trade within the precincts of the markets.

70. The public transport terminals generate a lot of traffic, and pedestrians, hawkers, head-load bearers, hand carts, trucks, buses, rickshaws, bicycles and private vehicles compete for limited road space. Unsanitary conditions exist with open surface water drains, receiving in some cases

1/ Of which 2.32 ha will redeveloped in phase 1. - 71 - ANNEX1 Part 2 untreated effluent. There are also a number of bucket latrines, which com- bine with cow dung deposits, a leaking water supply system and poor garbage collection to produce a very unsatisfactory environment. With over 500,000 pedestrian movements through Howrah Station each day, the area poses a health hazard not only to the immediate occupants but to the city at large.

0. Objectives of Redevelopment

71. Selective urban redevelopment provides opportunities to:

(a) consolidate fragmented land parcels for public sector use, thereby improving land management policies;

(b) link the new subway at Howrah Station and the tram and bus terminals to the pedestrian deck of the new development;

(d) create direct and indirect employment opportunities in a prime location.

P. Phase I of the Project

72. The development plan for the area envisages redevelopment in three phases and provides for new fish and pan markets, hawker stalls, shops, hotels, residential and office space, truck and car parking at a total cost of Rs 15 crores. The Iotal built-up area at the end of Phase III is projected to be 109,618 m , but IDA's participation would be restricted to a partial development in Phase I amounting to the provision of basic infrastructure and the redevelopment of the fish and pi n markets and certain ancillary trades. A total floor area of 38,965 m will be provided under Phase I made up as follows:

Phas5 I Use m

1. Fish market 4,357 2. Pan market 1,730 3. Ice packing 716 4. Shops 737 5. Deck level shopping 2,116 6. Open deck plaza 2,065 7. Truck/car parking 740 8. Basement 2,810 9. Offices 22,162 10. Low-income dormitory 1,532

TOTAL 38,965 m - 72 -

ANNEX 1 Part 2

Q. Infrastructure

73. The project will be constructed in a reinforced concrete frame with brick infilling and other finishes as appropriate. The passages between the -ish market stalls will be covered and consist of an opaque barrel vault roof structure. The construction will need careful staging if ongoing operations are not to be disrupted. Judicious use will be made of existing pockets of open space to provide temporary relocation sites.

Water Supply and Fire Fighting

74. One underground tank and two overground storage tanks have been provided for water supply and fire-fighting purposes, with an adequate number of post hydrants.

Storm Water Drainage

75. The surface water drains will continue to discharge into an existing underground drain and ultimately into the Hooghly River.

Sewerage

76. New septic tanks with 48 hours retention capacity are to be constructed in each phase; as an interim provision, the effluent will be subse- quently discharged into the Hooghly River. In due course, sewers will be provided in the area, the septic tanks discontinued and filled in.

Electric Power

77. Existing supply is available at 6 KV/3 Phase/50 cycles from the Calcutta Electric Supply Corporation, Ltd. (CESC). A substation, including a transformer, will be built in the new complex.

S. Cost Estimates

78. The cost estimates are based on sketch drawings and preliminary -ngi> eering done by local consultants for CMDA. The estimated base cost for Phase I excluding design, supervision and contingencies is Rs 2.92 crores. 1DA's participation will be restricted to the portion of the work necessary to resettle the low-income traders and hawkers and this amounts to Rs 1.09 crores; the balance of funds will be forthcoming from commercial banks. - 73 -

ANNEX 1 Part 2

79. The costs and source of funds break down as follows:

Source of Funds Description Commercial IDA Credit Total Banks Component

------Rs Crores------

1. Fish market, ice packing shops, internal 0.25 0.25 plumbing, sanitation and electrical costs

2. Dormitory acconmodations for EWS, plumbing, 0.08 0.08 sanitation and electrical costs

3. Lower part of two towers, pan market, basement, shops, car/truck parking, deck level shops, plumbing, sanitation, and electrical costs 0.54 0.54

4. Upper part of tower, offices, elevators, fire-fighting, sanitation, plumbing and electrical costs 1.73 1.73

5. Land acquisition, on-site development, substation equipment, area lighting, part cost of external civil works and infrastructure 0.10 0.10

6. Civil works and infrastructure 0.22 0.22

Sub-total 1.83 1.09 2.92 Design fee / 0.14 0.07 0.21 Contingencies: Physical 0.29 0.15 0.44 Price 0.66 0.25 0.91 Interest during construction 0.67 0.00 0.67

GRAND TOTAL 3.59 1.56 5.15

/1 Includes consultant's design fees.

S. Implementation

80. Land acquisitionis proceeding and CMDA expect to own all the land required for Phase I (2.32 ha) by September 1977. The design of the project and preparationof contract documents will be carried out by consultants working under the joint supervision of the Planning Directorateand Area DevelopmentCell of CMDA. Supervisionof constructionwill be done by CMDA assisted as necessary by consultants.

T. Post ConstructionManagement

81. CMDA will set up an Estate ManagementDepartment to take over the operation and management of the project. 1/ The Estate Management Department will be responsiblefor:

1/ The Estate Management Department will not be required to be established until 1980 when the fish market is expected to be completed. -74 -

ANNEX 1 Part 2

(a) Administration - general administration, security, establishment and legal matters;

(b) Accounting functions - budgeting, accounts control, financial planning, revenue collection for rents, utilities, taxes, etc.;

(c) Engineering maintenance - utilities, garbage disposal, cleaning of premises and environs, maintenance of all technical and service areas.

U. Financial Analysis

82. The total cost of Phase I amounts to Rs 5.21 crores. The following rental structure is proposed:

2 Rate! per annum pe5 Items Area in m Rs/m Rs/(ft )

Fish shop 2,973 322.92 (30) Pan shop 1,486 322.92 (30) Ice packing shops 604 322.92 (30) Deck level shops 1,208 376.74 (35) Miscellaneous shops 557 129.17 (12) Office 15,858 538.20 (50) Dormitory 612 beds 0.50/bed/day Car parking 100 nos. 2.00/car/day Kiosks 93 64.58 (6)

Total 22,779

These rents are in line with similar structures in comparable locations in Calcutta and will result in an adequate demand for the facilities proposed.

83. The project is viable with financing at 12% interest repayable over 20 years with the above areas and rental structure, and rent increases of 20% every five years (see Table 5, Statement of Sources and Application of Funds, and Table 6, Income Statements 1980/81-1987/88). Commercial bank finance accounting to Rs 4 crores will be available from 1981 through 1984 to complete the two tower blocks. - 75 - ANNEX 1 Part 2

V. Economic Justification

84. Redevelopment of the pan and fish markets at Howrah will have a substantial impact on eliminating the extreme unsanitary conditions which largely affect the EWS and lower income groups, who form the majority of the families that live and depend on the trading activities of the markets for their livelihood. In addition, the present difficult traffic conditions caused by all modes crowding in the existing narrow roads that are poorly illuminated and badly maintained will be alleviated by pedestrian decks, which will link all activity areas, leaving the ground level free for traffic movement. The project will be instrumental in creating direct and indirect employment opportunities in this prime location, and the consolidation of fragmented land parcels for public sector use will improve land management policies.

85. Measurement of the economic benefits of redevelopment of the fish and pan markets is derived from the possible increases in rental values of the fish, pan and ice packing shops and actual payments made by renters of the other shops and offices, as this would indicate the willingness to pay. Rental values were determined by examining the existing rental structure of shops, stalls, offices and housing in comparaPle locations with similar services. Annual rents were Sound to be Rs 6/ft for kiosks, Rs 12/ft for 2 miscellaneous shops, Rs 30/ft fo5 fish, pan and ice packing shops, Rs 35/ft for deck level shops and Rs 50/ft for office space. In addition, a 20% increase in the amount of office space is being considered for inclusion under the project. Costs considered in the analysis include all costs of construction, infrastructure, temporary sheds, physical contingencies, design and supervision charges. Under these assumptions the following rates of return were determined:

Rate of Return

Case 1: Base Assumptions 17

(a) 20% increase in construction costs; and 14

(b) 20% decrease in demand 13

Case 2: 20% Increase in Office Space 21

(a) 20% increase in construction costs; and 18

(b) 20% decrease in demand 17.5 INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

CMDA- Howrah Fish and Pan Market Project - Phase I

Statement of Sources and Application of Funds (Phase I) 1977/78 through 1987/88 (Rs lakhs)

1977/78 1978/79 1979/80 1980/81 i981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88

SOURCES

Surplus/(Deficit)on operation 1.67 7.34 3.68 23.51 45.35 72.11 72.91 72.39

Add depreciation 3.53 5.12 9.99 13.89 15.73 15.73 15.73 15.73 TOTAL CASH GENERATION 5.20 12.46 13.67 37.40 61.08 87.84 88.64 88.12

Loans Received

GOWB (IDA) 1.00 53.00 57.00 45.00 a CommercialBanks 163.24 131.90 64.18 Interest on TemporaryDeposits _ (0.40) (1.02) (1.23) (0.87) (0.59) (0.37) 1.07 2.75

TOTAL SOURCES 1.00 53.00 57.00 49.80 174.68 144.314 100.71 60.49 87.47 8g71 90.87

APPLICATIONS

Project Expenditures

IDA II Project - Capital Outlays 1.00 53.00 57.00 45-00 Non-IDA - Capital Outlays 154.00 107.00 31.00 Interest/Construction 9.24 24.90 33.18

Sub-total Project Expenditures 1.00 53.00 57.00 45.00 163.24 131.90 64.18

Increase in Receivables 1.73 3.12 0.12 2.48 4.46 4.44 (5.24) 0.07

Debt ServIce

Interest 10.26 9.92 9.55 9.16 51.86 50.53 49.07 47.45 PrincipalRepaid 5.26 5.6o 5.97 6.36 14.13 15.46 16.92 18.54

Sub-totalDebt Service 15.52 15.52 15.52 15.52 65.99 9 65.99 65.99

TOTAL APPLICATIONS 1.00 53.00 57.00 62.25 181.88 147.54 82.18 70.45 70.43 61.75 66.o6

Surplus/(deficit) for year Surplus/(deficit)at beginning of year (12.45) (7.20) (3.20) 18.53 1702 Surplus/(deficit)at end of year Surplus/deficit12456 (227853 (12.5)(2.52835atendfyear (2.85 . 2.76 28.76 31.'72248 INDIA

SECOND CAICUWA URBAN DEVELOPMENT PROJECT

CMDA - Howrah Fish and Pan Market Project - Phase I

Income Statement1980/81 through 1987/88 (Rs Lakhs)

1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88

Revenues

RentsZ/ - Fish Shops 4.80 9.60 9.60 9.60 9.60 10.56 11.52 11.52 8 Pan Shops - 2.40 4.80 4.80 h. 0 4.80 5.28 5.76 Ice Packing Shops 0.98 1.95 1.95 1.95 1.95 2.15 2.34 2.34 General ShopsZ2 - 1.32 2.64 3.96 5027 5.27 5.53 5.79 DormitoriesZL - 0.90 0.90 0.90 0.90 0.90 1.08 1.08 Offices/ 28.45 56,90 85.35 85.35 85.35

Total Revenues 5.78 16.17 19.89 49.66 79.42 109.03 111.10 111.84

Expenditures

MaintenanceA - 2.14 4.28 8.48 12.71 13.73 14.82 16.01 Bad Debts Provi ion 0.29 0.76 o.95 2.44 3.93 5.41 5.50 5.54 AdministrationE 0.29 0.81 0.99 1.34 1.70 2.05 2.14 2.17 Depreciation7 3.53 5.12 9.99 13.89 15.73 15.73 15.73 15.73

Total Expenditures 4.11 8.83 16.21 26.15 34.07 36.92 38.19 39.45

Surplus (Deficit)on Operationof Units 1.67 7.34 3.68 23.51 45.35 72.11 72.91 72.39

1 Rent reviews assumed everv 5 vears with not less than 20% increase. Shops letting and offices letting to be completed by 1984/85 and 1985/76, respectively, with 25% of each let in prior years. P 600 beds at 50 paise/night for 300 nights/year, increased to 60 paise from 1986/87. Maintenance - 1% for first year following handover of completed units, ] I > 2% thereafter increased by 8% per annum for cost escalation. /5 5% of revenues, excluding dormitories. XIC 76 5% of revenues, excluding offices plus 1% of offices. 7 3% straight line method. - 78 -

ANNEX 2

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Bustee Improvement

Background

1. It is estimated that in 1976 about 3.0 million people I/ lived in bustee areas 2/ within the CMD. These areas suffer from severe inadequacies: lack of sewerage and potable water supply, irregular manual collection and disposal of human wastes and garbage, dark lanes, and extremely poor drainage. Many are located in low lying areas with the result that, during the monsoons, they become flooded and the open drains and ponds become polluted by floating waste materials. The bustees also suffer from the presence of many unlicensed khatals 3/; this problem is particularly acute in Howrah. In addition to their environmental problems, the bustees are particularly deficient in health and educational facilities, and recreation facilities are practically non-existent.

2. Bustees are located throughout the metropolitan area except for a few wards in Calcutta city center. In CC, there are over 3,200 bustees, of which only 900 are in the sewered part of the central city. They cover 1,700 acres of land and have a population exceeding 1.25 million. In the Howrah/ Bally areas, bustees cover an area of over 550 acres of land and all are totally unsewered. The distribution of the bustee and refugee population within the CMD is as follows:

Population in millions

1) Calcutta City 1.25 2) Howrah/Bally area 0.40 3) East Bank (outside Calcutta City) 0.60 4) West Bank (outside Howrah/Bally municipalities) 0.25 5) Refugee Colonies 0.50 3.00

1/ Including about 500,000 people in refugee colonies.

2/ A bustee is a cluster of slum structures.

3/ Buffalo compound. - 79 - ANNEX 2

3. In older and mostly sewered parts of CC, bustees tend to be more compact and smaller in size with densities approaching2,000 persons/ha. In the outer areas, which are mostly unsewered, the bustees sprawl over larger areas dotted with ponds, and densities tend to be lower (approximately500 persons/ha). On the average, bustee density is approximately1,000 persons/ha. Typically, the bustees are characterizedby their three-tieredsystem of land ownership,hut ownership and tenancy. The landlord owns only the land, while the structures (hutments)are owned by a middleman known as a "thika tenant". He is responsiblefor renting each dwelling unit, or hut, to its occupants. Part of the rent he collects is paid to the landlord. Many thika tenants live in the bustees and are protected under the law against eviction without compensationby the landlords. Because of low rents, neither the landlord nor the thika tenant has an incentive for carrying out improvements. The occupant of the hut, not being its owner, has little incentive to undertake even minimum improvements.

4. CMDA's Bustee ImprovementProgram (BIP) seeks to preserve and develop bustees as socio-economicentities while improving their environmental conditions. It is recognized that bustees serve many important functions in the urban setting of Calcutta, including:

(a) providing housing at rents that can be afforded by families with varying incomes and compositions;

(b) offering mobility to the bustee dweller; because of their scattered locations,bustees offer the opportunity to search for employmentwithin a wide area and to find accommodationin close proximity to jobs;

(c) housing a large number of family or cottage industrial estab- lishmentswhich provide income and training to a large number of bustee dwellers; and

(d) providing shelter or bed space to the very poor.

Bustee dwellers show a great interest in schemes which seek to improve physical conditionswhile preserving the units. They are apathetic towards rehousing programs which would cause them to pay much higher rents.

5. Since the program began in 1970, 277 schemes have been completed; these schemes involved the installationof approximately30,000 sanitary latrines to replace bucket latrines; the sinking of 200 tubewells and the laying of 400,000 m of water mains, 2252000 meters of sewers and 400,000 m of drains. In addition,over 665,000 m of roads have been paved and 4,350 street lights and 10,000 water points provided.

Selection of Bustees for Improvement

6. The bustees selected for improvementare part of an ongoing program which began in 1970 to upgrade the physical amenities of all slum areas. Under the first phase of the program, which ended in March 1974, improvements - 80 - ANNEX 2 were made to areas housing 1,144,000 persons 1/ at a cost amounting to Rs 13.50 crores or Rs 118 per capita. Paradoxically, despite the physical difficulties in implementation, it has proved cheaper on a per capita basis, to upgrade the dense central bustees than those which are less dense. This has resulted in a steady increase in costs since the commencement of the program, because the dense bustees were upgraded first. Costs have risen not only because of inflation but also because of the sparser densities (in bustees which are 6 or 7 km from the Central Business District). When the second phase of CMDA's program began in 1974/75, it was designed to serve 644,000 people, at a cost of Rs 179 per capita, and be sustained at a spending level of Rs 2.9 crores per annum for approximately four years. Costs, however, have continued to rise, 2/ and it is estimated that about 224,000 people had been served under the second phase by March 31, 1977, at about Rs 200 per capita.

7. A decision in August 1977 by GOWB to add a third phase to the program to serve an additional 460,000 people will complete the improvements necessary to all bustees in Calcutta City and Howrah, and about 80% of all other bustees in the CMD by March 31, 1982, At that time, a total of about 2,250,000 people will have been served, including about 500,000 people in refugee colonies. The extended program will enable the long neglected areas of Tangra and Topsia to be covered by the program. This is an area to the east of the south suburban railway line where most of the informal leather tanners live. The upgrading will provide the opportunity for the tanners to improve the level of their own activities, since the drainage in this area is particularly unsatisfactory, resulting in infiltration and flooding of their tanning vats. The removal of water logging will complement the upgrading in this area by providing trunk facilities, including the necessary pumping stations. Similarly, investments in water supply and drainage to directly support the BIP are included elsewhere under the project.

Proposed Component

8. The proposed bustee improvement component under the project, during the period 1977/78 - 1981/82, will serve about 420,000 people under the second phase, and about 460,000 people under the third phase, totalling about 880,000 people. The proposed annual spending level is about Rs 6.15 crores 3/ (Rs 30.75 crores over five years), and the average estimated cost is about Rs 350 3/ (US$40.6) per capita.

1/ This figure includes approximately 300,000 persons living in refugee colonies. These are not classified as bustee dwellers and do not have a three-tiered system of land ownership.

2/ During the period 1974-77, costs averaged Rs 174 per capita and by April 1977 costs were approximately Rs 250 per capita.

3/ Including contingencies and cost of CMDA design and supervision. - 81 -

ANNEX 2

9. By completion of the second and third phase programs in 1981/82, approximately 1,100,000 persons occupying 1,400 ha of land in 420 bustees will have been served, at an average estimated cost of Rs 320 (US$37.3) per capita.

Proposed Improvements

10. Physical improvements for the bustee program would consist of:

(a) provision of community water points and bathing facilities; (b) improvements to sewer and storm drainage systems; (c) conversion of service privies into sanitary latrines (flush toilets), discharging to surface water drains via septic tanks; (d) paving of roads, streets and pathways; (e) installation of security lighting of roads and pathways; and (f) provision of miscellaneous facilities, such as dust bins, garbage vats, etc.

A typical improvement scheme is illustrated in Map IBRD 12875.

Service Levels

11. The following service levels have been adopted:

(a) one precast concrete sanitary latrine per 25 persons; (b) one bathing facility per hutment 1/ up to 100 persons; (c) one water supply tap point per hutment or per 100 persons to provide potable water supply at 90 liters per capita per day; (d) vehicular access to within 80 m of each hut; (e) brick paved pedestrian access to each hut; and (f) security lighting on access lanes and roads.

Cost Estimates

12. Cost estimates are based on preliminary designs for a range of typical bustees and on actual construction experience. Costs per capita are expected to average about Rs 350, 2/ though the range of costs may vary between Rs 300 and Rs 400 per capita depending on the density of the bustees. The detailed designs are still evolving, but based on preliminary engineering designs and past experience it is expected that the following work will have been completed under the project by March 31, 1982:

1/ A hutment is a collection of huts usually comprising between 5-10 huts.

2/ Including contingencies, and cost of CMDA design and supervision. - 82 -

ANNEX 2

Rate Total Cost Cost per 1/ Quantity Unit (Rs) (Rs lakhs) Capita (Rs)

(a) provision of sanitary latrines and septic tanks, together with connections to surface water drains 29,000 no. 1,600 464.0 52.7

(b) provision of 150 mm linear diameter sewers and sewer connections 21,500 meters 95 20.4 2.3

(c) water points, including slabs for bathing, mains, connectionsand tubewells (where necessary) 10,320 no. 5,665 584.6 66.4

(d) drainage ditches 580 km 60,750 352.4 40.0

(e) roads and paths 573,000 m2 34 194.8 22.1

(f) street lighting 3,600 no. 1,350 48.6 5.5

(g) filling of unhygienic ponds 290 no. 36,100 104.7 11.9

(h) miscellaneous item 330.5 37.6

TOTAL 2,100.0 238.5

design and supervision 147.0 16.7 physical contingencies 315.0 35.8 price contingencies 514.0 58.4

GRAND TOTAL 3,076.0 349.4

1/ The actual number directly served under this component is assumed to be 880,000; CMDA has started work in every bustee included in their fourth year program. The Rs 4.5 crores spent up to April 1, 1977 has theoreti- cally served about 224,000 giving a total of about 1,104,000by the end of the second and third phase program. - 83 - ANNEX 2

Cost Recovery

13. The BIP has previously been financed by grant funds from the GOI and GOWB, and no attempt has been made to achieve direct cost recovery. This is because the ownership pattern is fragmented, and the lease and sub-lease arrangements are difficult to trace and present many legal difficulties. In view of this history, no attempt will be made to directly recover costs under the project.

14. However, GOWB has recently cancelled the property tax rebate which previously applied to bustees. In addition, improved bustees are to be revalued for property tax purposes and, as a result of these reforms, additional property tax revenues are expected to be generated from the bustees. While these improvements will be insufficient to recover all costs, it is as much as can be achieved at the present time. However, the establishment of the Central Valuation Board (see Annex 9) will bring about by 1982 a more realistic and uniform assessment of property values throughout the CMD. Water and sewer charges are to be delinked from the consolidated property tax in CC. The yield from these and other fiscal reforms cannot be accurately identified for bustee areas, because the final methods and standards of revaluation have yet to be determined.

Project Execution

15. The bustee improvement component will be implemented by the Bustee Improvement Directorate of CMDA. It was established in 1970 to undertake physical improvement schemes in the bustee areas, in addition to the municipal and anchal programs, improvement programs for refugees and displaced persons, slum modernization and clearance schemes (i.e. urban renewal) and the provision of medical facilities, schools, parks and playgrounds in the poor urban areas. At present, two Deputy Directors are in charge of the physical works under the BIP Director. Reporting to these Deputy Directors are nine zonal engineers and one executive electrical engineer. Supporting staff consist of administration, accounting and finance personnel and a Project Planning Wing responsible for planning and architecture services.

16. The above staff will be strengthened, and planning, contracting and supervision procedures will be modernized in order to enable the Direc- torate to cope with the expanded BIP. In 1977/78 - 1981/82, annual average investment levels, at Rs 6.15 crores, will be more than twice the size of those in preceding years, at Rs 2.9 crores. Assurances were obtained from GOWB at negotiations that CMDA will have, by April 1, 1978, necessary additional staff in position, and improved planning, contracting and monitoring procedures installed in a manner satisfactory to IDA,

Operation and Maintenance

17. The CC and various municipalities, within whose areas the bustees are located, are responsible for operation and maintenance of the infrastructure, in the same manner in which services are provided to all properties in - 84 - ANNEX 2 urban areas. However, because of the dense construction character of these bustees, and also because of difficulties of access (some were closed quarters for a p->od in the late 60's and early 70's), maintenance has been neglected. The very large infrastructure investments now being made will require extensive and continuous maintenance. GOWB will cause the responsible local bodies to cooperate with CMDA to produce, by December 31, 1978, a detailed plan of operations to provide satisfactory maintenance in improved bustees in CMD and provide adequate funds therefore in the 1979-80 and subsequent budgets z. these authorities.

18. This component will generate continuous employment opportunities for 4,800 laborers, most of whom will be recruited from the areas being upgraded.

Economic Evaluation

19. The bustee improvement component will generate a wide range of benefits including improvements in living conditions of approximately 176,000 families in bustee areas of the CMD. Physical improvements including provision of water points and bathing facilities, improved drainage facilities, sanitary latrines and provision of garbage bins will have a significant impact on improving the health of the bustee dwellers, who traditionally have suffered from such diseases as cholera, dysentery, smallpox and tuberculosis which are most likely to spread during the monsoon floodings. Extension services and social support programs will be provided in an attempt to improve, in conjunction with physical works, the earnings and quality of life of the beneficiaries (see Annex 5).

20. Measurement of the economic benefits of slum improvement is derived from the possible increases in rental values of the properties to be improved. It should be noted that while certain project benefits, such as those that are health-related, may be only very imperfectly reflected in property values, this method does provide a useful indicator of the minimum economic value of the project. Rent control legislation is relatively ineffective in the bustees and rents are mainly determined by the free play of market forces.

21. An investigation of rental values in already improved bustee areas which have access to basic infrastructure facilities indicates 2that a rental value of Rs 25-35 per month for a one-room dwelling unit (15 m ) can be expe ited after improvement, an increase of Rs 15-20 per month. Costs include the costs of infrastructure, maintenance, and physical contingencies but exclude orice contingencies. The economic rate of return using these assumptions is estimated to be 16%. A 20% increase in project costs would reduce the rate of return to 12% and a 20% reduction in benefits would reduce the rate of return to 11.5%. - 85 -

ANNEX 2 Table 1

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Summary Unit Costs for Bustee Improvement

Estimated Cost /1 /2 Component (1977 Prices) Cost per Family`- Cost per Capita- Rs US$ Crores Million Rs US$ Rs US$

Sewerage 5.18 6.02 294 34.2 58.8 6.8

Water Supply 6.28 7.31 357 41.5 71.3 8.2

Drainage 3.77 4.38 214 24.9 42.8 5.0

Roads and Footpaths 2.10 2.44 119 13.9 24.0 2.8

Street Lighting 0.52 0.61 30 3.5 5.9 0.8

Unhygienic Ponds 1.13 1.31 64 7.4 12.8 1.5

Dust Bins, Garbage Vats, etc. 2.02 2.35 115 13.4 23.0 2.7

SUBTOTAL 21.00 24.42 1,193 138.8 238.6 27.8

CMDA Design & Supervision & Contingencies 9.76 11.35

TOTAL 30.76 35.77 1,748 203.0 349.5 40.6

/1 Cost divided by number of families covered (176,000) /2 Cost divided by total population (880,000) 86 - ANNEX 3

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Water Supply, Sewerage and Drainage

Water Supply

1. The first Calcutta project assigned priorities to works in Calcutta having regard to population density and the poor service in parts of the system. This project is generally well advanced and the emphasis for the second project has been shifted toward improving water supplies in the fringe areas and in some of the municipalities where increasing population densities are overtaxing existing supply systems. Calcutta itself is not neglected, as a part of the project is aimed at renovating installations at Palta and Tallah, which provide the city's principal water supply.

Water Supply Components

2. Palta-Tallah System Renovation (WS-001 to WS-003). The work, under 22 different subheadings, includes changing the filter media of the rapid gravity and slow sand filters at Palta, and improving roads around the slow sand filters. It also covers improvements of electrical and mechanical equipment and the installation of new recording meters; the provision of a degree of flexibility between the different parts of the treatment plant; clearing silt from the primary sedimentation lagoons; repairs to buildings and the construction of staff quarters. At Tallah, the work includes improvements to mechanical and electrical plant, repairs to tanks and pumping station pipework and renovation of a 40 Ml elevated steel reservoir.

3. New Fringe Areas Supplies (WS-010). Each of the seven subprojects in this component includes one or more tubewells together with associated elevated service reservoirs and distribution systems of water mains. Details of the subprojects are set out in the following table. The basis of design is 90 lcd.

No. No. of elevated Approximate length 1991 of reservoirs with of distribution Subproject Pop. tube capacities 3 Attendant mains of 75-300 mm (WS-010) ('000s) wells cubic meters (m ) houses diameter

Jagatdal 22 2 1 @ 450 2 30,000 Rajarhat 100 8 1 @ 450 8 62,000 1 @ 340 1 @ 270 Ballygunge 35 4 1 @ 225 4 30,000 Sankrail 36.8 6 2 @ 225 6 36,000 - 87 -

ANNEX 3

4. Municipal Water Supply Augmentation Scheme (WS-011). There are seven subprojects in this component affecting seven municipalities, and each subproject includes one or more tubewells together with associated elevated service reservoirs and distribution systems of water mains. Details of the subprojects are shown in the following table. The basis of design is 90 lcd.

No. of elevated reservoirs with Approximate length Subproject No. of capacities 3 Attendant mains of 75-300 mm (WS-010) tube wells cubic meters (m ) houses diameter

Kamarhati I 4 1 @ 340 5 45,000 1 @ 450 1 @ 225 Chandannagar 5 Repairs to exist- 5 16,000 ing reservoir Garulia 2 1 @ 450 2 22,000 Konnager 2 1 @ 450 2 30,000 Budge Budge 2 1 @ 270 2 5,500 Bansberia - 1 27,000 Kanchrapara 4 1 @ 270 4 12,000

5. Secondary Grid Systems (WS-027). The four subprojects in this component are for improving water distribution arrangements to the level of 180 lcd in the municipalities of Dum Dum, North Dum Dum, South Dum Dum and Baranagar, all located immediately north of Calcutta. The work will be ongoing, and only that portion of the total program scheduled for the years 1977-1981 has been put forward as part of the second IDA project. CMDA's long-term plan for this area is to provide supplies by taking water from the Hooghly River at a new waterworks proposed to be located at Baranagar. The existing system of tubewells is expected to be continued in use at least until 1985. The presently proposed works, which will in the interval improve the distribution of available supplies of water, have been designed to form a part of the ultimate distribution system. If found necessary, further tube wells will be sunk but provision for such work, at present speculative, has not been included in the subproject.

6. Calcutta Distribution System. A study is currently being made of the distribution system in Calcutta and this is expected to reveal, inter - 88 -

ANNEX 3

alia, those parts of the system requiring replacement or reinforcement and from which a program of improvements may be drawn up. At present, the scope or value of works cannot be defined but it is likely that a series of relatively small operations would be completed over a number of years commencing in 1979/80. A provision of Rs 24 lakhs 1/ (US$267,000) has therefore been included in the project.

Interim Ground Water Supplies

7. Until the major treatment plant developments have been completed tubewells will continue to play an important part in providing supplies and a program of tubewell construction and renovation has been included in the project. Both Calcutta and Howrah are affected as follows:

Renovations New Wells Totals

Calcutta 61 4 65 Howrah 17 3 20

Sewerage and Drainage

8. The 12 subprojects included in the proposed project will continue improvements initiated under the first Calcutta project and will provide for a further significant reduction of the effects of monsoon flooding by improving surface water drainage in selected areas and will provide for the collection and treatment of foul sewerage.

Sewerage and Drainage Components

9. Removal of Water Logging (SD-001 and SD-007). These subprojects would continue the work commenced under the first Calcutta credit of increasing the capacity of storm drains in the Calcutta Suburban System and Town System. The sizes of the drains to be laid range from 225 mm diameter up to 1,825 mm diameter and in addition box culverts up to 3.3 m x 3.3 m would be constructed.

10. Sewering Unsewered Areas in Calcutta City (SD-003). Although the greater part of Calcutta City is served by sewerage, there remain isolated unsewered pockets. The process of extending sewers into those areas, commenced under the first credit, will be continued under the proposed second project.

1/ Excludes supervision costs and contingencies. - 89 -

ANNEX 3

11. Tollygunge Drainage (south) (SD-009). This surface water scheme continues work commenced under the first credit and is directed at reducing the incidence of flooding in a heavily populated area on the southern edge of Calcutta. In addition to construction of sewers, provision would be made for connecting surface water drains to the new sewers.

12. Manicktala Drainage (SD-010), This surface water drainage scheme extends the benefits of work started under the first credit. Manicktala is a heavily populated area in northeast Calcutta badly affected by monsoon flooding. Some 750 m of drains ranging in diameter from 900 mm to 1,525 mm and about 2,700 m of box culverts 1.5 m x 1.5 m up to 1.5 m x 2.9 m form the major part of the work. In addition, provision has been made for connecting surface drains from streets and properties.

13. Cossipore-Chitpur Drainage (SD-011). This project is for the provision of surface water drains in the Cossipore-Chitpur area in the north- west part of the CC area between the main road north from Calcutta (the Barackpore Trunk Road) and the Hooghly. The area is densely populated and suffers from periodic flooding. The subproject includes the completion of five trunk main outfall sewers discharging, in one case with pump assistLnce, into the Hooghly. The drains range from 760 mm to 1,825 mm diameter and n addition box culverts up to 3 m x 2.7 m have to be constructed.

14. Northeast Tollygunge Drainage (SD-012). This scheme would benefit a heavily populated area straddling the southeast boundary of CC by reducing the frequency and effects of flooding. The work would include some 4,300 meters of open channels, 2,159 meters of 760 mm to 1,675 mm diameter drains and some 900 meters of 1.5 m box culvert construction.

15. Howrah Sewerage (SD-014). This project was presented under the heading of Arterial Sewerage for Howrah but is being amended to make greater provision for connection of properties within the same limits of expenditure. The work is an extension of the trunk sewers and sewage treatment plant constructed under the first credit, work which is almost completed but not yet dealing with any sewage.

16. Grand Trunk Road Storm Drainage (SD-015.B). This project is designed to reduce flooding in a heavily populated part of the Howrah drainage basin located between the Grand Trunk Road and the Hooghly River. The benefits will affect not only the local population but also the users of an important and extremely heavily used stretch of trunk road. The work involves the construction of surface water drains which would discharge, without pumping, to the Hooghly.

17. Outfall Improvement Schemes for Bustee and Anchal Area Drainage. These works will improve drainage arrangements in drainage basins of Howrah, - 90 -

ANNEX 3

Churial, Tollygunge and Bagjola and would include the provision of culverts, bridges, removal of constrictions on flow caused by access route bunds and improvement of outlet arrangements at receiving watercourses.

18. Improvement of the Bagiola Canal (SD-058). The Bagjola Canal, one of the main surface water drainage channels serving municipalities immediately north of Calcutta, has been improved over some 32 km of its length from the River Kulti to the vicinity of Dum Dum Airport. Benefits from this earlier work cannot be fully realized until the canal improvements are extended into the residential and industrial areas within the 50 square kilometers at the upper end of the drainage system comprising Baranagar, South Dum Dum, Panihati and Kamarhiti. The improvement will provide a four-fold increase in capacity to 42 m /sec. Of the 9,200 m of canal where improvement is still needed, 4,300 m would be widened and brick lined under the second credit. The waterway would be divided and regulators provided at intervals of about 1 1/2 km so that flow can be concentrated on one side of the dividing wall while maintenance operations take place on the other.

19. Calcutta Sewer Cleaning (SD-059). Calcutta has some 650 km of sewers, and years of inadequate cleaning have brought about a situation where their capacity has been significantly reduced by accumulations of silt. There is no question of the importance of having all sewers operating to their full capacity, since the system is a combined one which has to deal with surface water as well as foul sewage and therefore vital in removing flood water during periods of heavy rains. The operation is sufficiently important to take it from the category of maintenance into that of capital works. It has been estimated that not less than 130,000 cubic meters of silt have to be removed from the sewers and the project would therefore include the purchase of mechanical cleaning equipment.

Cost Estimates

20. Cost estimates for the water supply and sewerage and drainage components are shown in Table 1-3.

Development

21. The subprojects have been prepared by CMDA, CC, HIT, CMWSA under the aegis of CMDA, and by I and W, and will be implemented by those authorities.

22. Land is needed in respect of a number of subprojects; CMDA has not made any acquisitions for WS-010 but do not foresee any difficulties as the - 91 -

ANhNEX 3

owners of proposed sites for tubewells and service reservoir installations have expressed a willingness to sell and there are sufficient alternative sites to meet the land requirement. In the case of WS-011, all the components of the subprojects are within municipalities where, in most cases, the land for tube well installations is already in possession of the municipality concerned. In the few exceptions, the willingness of the owners to sell and the availability of alternative sites satisfies CMDA that difficulties in acquiring land will not arise. For drainage works no difficulties are foreseen in land acquisition.

Technical Assistance

23. Arrangements have been made for engineering, accounting and financial studies for operation and maintenance of water supply, sewerage and drainage facilities in the CMD by Consulting Engineering Services (India) Pvt. Ltd. and Price, Waterhouse, Peat and Co. under the first credit. These studies are expected to be completed by September 1978, and will be instrumental in developing improved operational performance of the various under- takings.

24. Technical assistance under the second credit (see Annex 8) includes provision for training in the use of pipe scraping and relining techniques and equipment which would probably involve sending an engineer to the U.K. to observe operations using various types of equipment there. Provision has also been made for training, at both staff and operator level, in operation and maintenance of treatment plants including oxidation ditch, percolating filter and sludge digestion equipment.

Economic Evaluation

25. Presently, water supply and sewerage services are charged on assessed property value as determined by the District Assessors. Property values in Calcutta are generally underassessed, and CC estimates that revenues notionally allocated to water supply and sewerage services out of the total property tax receipts presently finance about 30% of service costs. Payment on a volumetric basis using meters exists only in a few isolated cases where supplies are provided to certain industries or other bulk consumers. Domestic usage accounts for the major portion of water consumed. Thus, for most customers the water charge is an arbitrary percentage of the general tax base and cannot be avoided by not using water. This charge then is no measure of the willingness to pay for incremental output and is in no way related to consumption or production costs.

26. Water supplies for the five water service districts in Calcutta are drawn mainly from four sources: treated surface water from the Hooghly: - 92 -

ANNEX 3

untreated surface water from the Hooghly, which is chlorinatedbut silt 1qden; large deep tubewells, constitutinggood supplies; and shallow wells surface water collecting places. In many areas, the street supplies from public standpipes are located near open shallow wells, where protection

_c inadequate or uncertain and with a high risk of pollution. Many property ow.ers and industrieshave their own private wells, but the quality of water supplied from these sources is not known. The supply of unfiltered water from the Hooghly is gradually being reduced and will be phased out as tiltered supplies develop. After a major cholera epidemic, this supply was chlorinated (1963) and although it is not intended as a potable supply, it is still used as such. In the case of filtered supplies, in some areas the connectingpipes are laid above ground in such a manner that they are subject to possible damage. These also constitute a likely source of contamination.

27. Quantities of water drawn in 1973 from these various sources are shown below. Although quantities from small shallow wells and other sources are estimates, in all service districts except Calcutta, they represent possibly the major source of water supplies.

Water Supplies 1973 (Mld)

Un- Small Wells Treated treated and Misc. Surface Surface Municipal Supplies, Serving Water Water Supplies Municipal- Population from from (generally ities 1970 District Hooghly Hooghly large wells) and Private Total (millions)

Calcutta 590 273 109 23 995 3.6 Palta 9 - 50 64 123 1.4 Garden Reach 2 = 7 45 54 0.5 Serampore 11 - 34 45 90 0.6 Ho--ah 20 - 39 50 109 0.8 lot 1 632 273 239 227 1,371 6.9

28. The proposed second project will bring about improvements in the quality of the existing supplies and provide new supplies in areas with high population potential. Improvementsto the Palta-TallahWater Treat- ment Works will bring its operation up to design capacity, resulting in production of an additional 136 Mld, and prevent further deterioration of the filtering system, electrical and mechanical equipment, and pipework. New - 93 -

ANNEX 3

supplies in fringe areas and municipalities will be drawn from deep tube wells which will be protected and chlorinated, thus reducing the risk of contamination and disease. These supplies will amount to approximately 57 Mld and will be provided in areas where the current supply is as low as 32-36 lcd. Service connections to the secondary grid system will improve the distribution of available supplies, and connections will be underground thus reducing the risk of damage and pollution.

29. The economic benefits of the projects are not quantifiable, but it is believed that these improvements to the quality of the supplies will result in improving the health of the beneficiaries in terms of reducing the incidence of sickness due to waterborne disease. In order to illustrate possible orders of magnitude of the benefits, an attempt was made to employ an indirect test of the reasonableness of the investment. If improved water supply resulted in one less day of absenteeism, the resulting increase in terms of the income of the worker involved would yield a project rate of return of 26%. This is possibly an understatement, since a worker misses on average 7.5 days per year, at present, due to disease which is related to the unsanitary environment in which water quality is an important factor. In addition, other unquanifiable benefits could result from possibly reduced child mortality and savings in curative medical costs. INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Water Supply Summary

Forecast Costs of Subproject Components to be Executed or Financed by CMDA (Rs Lakhs)

Equipment, Goods and Services Civil Works Local Foreign Foreign Foreign Serial No. Subproject Title Land Net Cost Indirect Total Net Cost Taxes Indirect Total Net Cost Taxes Total Basic Cost

WS 001 to WS 003 Palta-Tallah - 138.68 5.87 144.55 156.83 3.69 16.68 177.20 9.05 6.20 15.25 337.00

WS/010 Fringe areas and new areas 6.83 76.04 3.82 79.86 98.65 9.26 13.54 121.45 - - - 208.14

WS/011 Municipal water supply augmentation schemes 3.12 77.69 3.40 81.09 116.63 5.81 12.14 134.58 - - - 218.79

WS/027P Secondary grid schemes - 45.18 2.27 47.45 78.03 6.15 2.06 86.24 - - 133.69

- Calcutta distribution system - 10.50 0.50 11.00 12.00 0.70 0.30 13.00 - - - 24.00

- Renovation and construction of tubewells Calcutta and Howrah 0.05 37.86 2.04 39.90 49.03 2.63 5.02 56.68 3.00 2.00 5.00 101.63

- Various equipments ------14.95 18.80 33.75 33.75

TOTALS 10.00 385.95 17.90 403.85 511.17 28.24 49.74 589.15 27.00 27.00 54.00 1,057.00

_IIX ANNEX 3 95 - Table 2

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Water Supply Component

Breakdown of Subprojects Costs (Rupees-Lakhs)

Adoption Serial Civil Basic Development Agency on No. Land Works Materials Equipment Cost Agency oMple-ioE

WS 010 Fringe Areas and New Areas

(a) Jagatdal 0.74 9.94 20.09 0.96 31.73 CMDA CMWSA (b) Rajarhat 3.17 29.98 49.46 3.85 86.46 CMDA CMWSA (c) Tollygunge 12A 0.80 13.03 19.67 1.33 34.83 CMDA CMWSA (d) Sankrail 2.12 26.91 23.20 2.89 55.12 CMDA CMWSA

Totals to Summary 6.83 79.86 112.42 9.03 208.14

WS 011 Municipal Water Supply Augmentation Schemes

(a) Kamarhati I 1.82 30.13 39.47 1.94 73.36 CMDA Kamarhati (b) Chandarnagar 0.10 8.15 11.13 2.42 21.80 CMDA Chandarnagar (c) Garulia - 9.33 14.93 0.96 25.22 CMDA Garulia (d) Konnagar - 10.36 21.23 0.96 32.55 CMDA Konnagar (e) Budge Budge - 4.38 5.06 0.96 10.40 CMDA Budge Budge (f) Bansberia - 8.79 17.74 - 26.53 CMDA Bansberia (g) Kanchrapara 1.20 9.95 15.85 1.93 28.93 CMDA Kanchrapara

Totals to Summary 3.12 81.09 125.41 9.17 218.79

WS 027P Secondary Grid Baranagar, Kamarhati south district

(a) Dum Dum - 2.15 6.15 - 8.30 CMDA Dum Dum (b) North Dum Dum - 10.17 18.48 - 28.65 CMDA North Dum Dum (c) South Dum Dum - 13.55 24.63 - 38.18 CMDA South Dum Dum (d) Baranagar - 21.58 36.98 - 58.56 CMDA Baranagar

Totals to Summary - 47.45 86.24 - 133.69

Calcutta Distribution System Totals to Summary - 11.00 13.00 - 24.00 CMDA CC

Renovation and Construction of Tubewells

(a) Calcutta 0.04 30.90 5.01 39.68 74.73 CMDA CMWSA (b) Howrah 0.01 9.00 2.99 14.00 26.90 CMDA no.:ah

Totals to Summary 0.05 39.90 8.00 53.68 101.63 INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Sewerage and Drainage

Forecast Costs of Subproject Components to be Executed or Financed by CMDA (Rupee.s-Lakhs

_ Equipment, Goods and Services Civil Works Local Foreign Foreign Foreign Grand Total Serial Subproject Title Land Net Cost Indirect Total Net Cost Taxes Indirect Total Net Cost Taxes Total (Basic Cost)

SD 001 Removal of Waterlogging - Calcutta Suburban System (Ph. II) - 315.58 18.33 333.91 84.51 5.39 16.74 106.65 21.38 15.06 36.44 477.00

SD 003 Sewering unsewered pockets - Calcutta City System (Ph. II) - 60.24 3.50 63.74 7.26 - - 7.26 - - - 71.00

SD 007 Removal of Waterlogging - Calcutta City System (Ph. II) 195.09 11.34 206.43 41.93 2.61 7.53 52.07 - 258.50

SD 009 Tollygunge Drainage (Ph. II) 12.25 80.68 4.07 84.75 ------97.00

SD 010 Manicktala Drainage (Ph. II) - 50.32 2.35 52.67 2.18 0.15 - 2.33 - - - 55.00

SD Oll Cossipore-Chitpur Drainage (Ph. I) 4.00 66.89 2.90 69.79 9.18 0.63 0.40 10.21 - - - 84.00

SD 012 Tollygunge Drainage N.E. (Ph. 11) 0.10 83.07 4.41 87.48 8.25 0.58 0.59 9.42 - - - 97.00

SD 014 Howrah Sewerage (Ph. II) 3.34 144.20 7.68 151.88 19.48 1.54 2.26 23.28 - - - 178.50

SD 015B Grand Trunk Road Drainage (Ph. I) 0.88 88.71 4.87 93.58 14.12 1.01 1.41 16.54 - - - 111.00

SD 058 Bagjola Canal Improvement 4.43 157.30 5.51 162.81 3.66 0.10 - 3.76 - - - 171.00

SD - Outfall Improvement Schemes for Bustee and Anchal Area Drainage - 174.00 6.00 180.00 23.00 1.00 - 24.00 - - - 204.00

SD 059 Calcutta Sewer Cleaning 103.82 7.78 111.60 4.46 4.85 0.79 10.10 41.00 33.30 74.30 196.00

TOTAL 25.00 11519.90 78.74 14598 64 218.04 17.86 19.72 265.62 62.38 46.36 110.74 -L,~~~~~~~~~~~~~~------~~~~~~~~~~~~~~~~~Fl

ID >< - 97 ANNEX 4

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Solid Wastes Management and Sanitary Latrines

Part One: Solid Wastes Management

A. Background

1. The solid wastes management (SWM) function is known locally as "conservancy" and embraces the collection of domestic and trade wastes, the collection of nightsoil from unsewered areas and the collection of animal carcasses and hospital wastes. These services require a large fleet of motor vehicles, garaging and maintenance facilities, and some earth-moving plant.

2. The standard of all these services has been very low for a long time and at present many of the smaller authorities in the metropolitan area are very inefficient, having neither the financial capacity, the qualified personnel nor the maintenance facilities needed to design and operate effe - tive systems. For this reason no investment is practical in the outer area, until viable methods of SWM have been devised and tested and institutional capacity strengthened.

3. The performance of CC is better than that of the other authorities, but its deficiencies have been sufficiently obvious to have led to a Committee of Enquiry into the administration of conservancy (the Chopra Committee, 1972). During the past two years the Corporation has begun to implement one of the major recommendations of this committee by creating a Conservancy Department independent of the Engineer's Department which formerly operated conservancy services. When fully established, this department could provide a much stronger institutional capacity than has been previously available.

4. With a current strength of manual workers of 14,572 the CC Conser- vancy Department already has adequate labor resources (about 4.5/1,000 population). The standards achieved by this large force are, however, far below what is necessary to safeguard the health and environment of the population. The main reasons for this are:

(a) lack of the physical infrastructure (esentially a network of depots) which is necessary for effective control over workers and their equipment;

(b) shortage of some equipment items (for example, about half the sweepers have no handcarts); - 98 - ANNEX 4

(d) an insufficient number of heavy vehicles to provide a reliable service for the transfer of wastes from collection points to disposal sites;

(e) very old garages and workshops, in which the layout of the buildings and the available equipment are inadequate for the present work load;

(f) some aspects of collecting and disposing of nightsoil which are offensive and give rise to health risks; and

(g) the disposal of refuse by crude dumping (as opposed to sanitary landfilling) which damages the environment and destroys land values.

5. The challenge offered by this situation is that a relatively modest capital injection of Rs 9 crores 1/ (US$10.4 million), which is approximately one year's operating cost, could transform these services, given sound management and a measure of technical guidance, without significantly increasing the total annual operating cost of conservancy. Over two-thirds of the SWM component will be devoted to the area served by CC. Nearly Rs 3 crores (US$3.5 million) of this expenditure will represent permanent solutions, in the form of construction of depots, improvement of garages and workshops, and conversion of crude dumps into sanitary landfill operations. About Rs 2 crores (US$2.3 million), however, can be regarded only as first aid, in the sense of providing adequate physical requirements for the reliable operation of existing systems, some aspects of which may be inherently inefficient or undesirable.

B. Project Description

Calcutta Corporation: Street Cleaning and Primary Refuse Collection

6. One hundred ward depots are required, each serving a population of about 30,000 and controlling about 80 workers. Eighty 2/ depots will be constructed under the project, each providing secure parking for handcarts, facilities for mustering and ablution of workers, an office and quarters for the overseer and a transfer point for collected wastes.

1/ Excludes contingencies and supervision charges.

2/ It is not feasible to acquire all 100 sites within four years. - 99 - ANNEX 4

7. 3 At least 400 new enclosed vats will be built, in sizes of 8, 15 and 30 m , to contain wastes awaiting transport to disposal sites and preveat access by scavengers and animals. The trailer sites will be built to test the concept of continuous containerization. Five thousand handcarts with simple fixed containers will be manufactured to sustain the present system, and three thousand handcarts having multiple portable containers will lay the foundation for improved methods.

Transport of Refuse from Wards to Landfill Sites

8. Seventy-seven7-ton tippers are required to bring the fleet up to strength for phased renewals of old vehicles. Twelve tractors and 25 tipping trailers will be provided for use at transfer points and at large waste sources such as markets. Because periods of suspension of services due to flooding during the monsoons are inevitable,4 payloaders are included for the rapid clearance of accumulationsafter such emergencies.

9. Four 7-ton tippers are provided for a continuing "clean-up" campaign aimed at the removal of large accumulationsof builders' and contractors' debris from footways throughout the city.

Maintenance of Transport and Mobile Plant

10. The existing four garage sites are clutteredwith old buildings which inhibit their efficientuse; this will be corrected by demolition of some buildingsand reconstructionof the remaindei. A new central automo- tive workshop will be based on an existing building at Chingrihattawhich is large, inefficientlylaid-out and lacks equipment. New ancillarybuildings for stores and specializedworkshops will also be built. At all five sites quarters will be provided for key personnel. The garages will be equipped for routine servicing and the Chingrihattaworkshop for complete overhauls, body repairs and earth-movingplant maintenance. Four mobile workshops will be provided to deal with roadside breakdowns and three recovery vehicles for towing. For the transport of tracked vehicles over public roads, a lowboy is included.

Nightsoil Collection

11. Eight tanker standingswill be built to screen nightsoil tankers from view during the emptying of pails and one new "pail depot" will be constructed and three existing ones repaired. The latter are places at which the contents of tankers can be discharged,without spillage, through a spe- cially designed access to a sewer, and where continuous flushing with water is available during this process, in order to dilute the nightsoil and to cleanse the vehicle. Twenty tanker-lorriesand six tractors (for use with existing tanker-trailers)are included as vehicle renewals, together with two cesspool emptiers. - 100 - ANNEX 4

Transport for Supervision and Control

12. Ts 4S important that supervisory personnel controlling large areas should have suitable transport; 18 jeeps are to be provided, 11 for districts (each about 10 square km), 2 for disposal sites, and 5 for headquarters staff; 123 >bcycles are included for overseers.

Sanitary Landfill Sites

13. The main disposal site is an area of about 2,000 acres, east of the CC, the average distance to collection points is about eight kms. Levels within the site vary widely, and there are many lagoons of stagnant water up to 3 m deep. A correct policy would be to fill the water-logged areas with inert wastes, of which large quantitites are available at the site, then to raise the whole area with successive layers of wastes 2 m deep. At present, however, the site is being used only at two points on the perimeter where there is access, one at Dhapa, the other at Bantala; mountainous dumps have accumulated at both points. At Dhapa there is a rail transfer facility and a network of tracks inside the site at which rail wagons are discharged. The railway, however, can handle only a small portion of the 1,500 tons reaching this site daily and it is very expensive to operate. CMDA proposed to close this railway before the commencement of the 1977 monsoons and the permanent ways then would provide available foundations for internal roads which will permit access for road vehicles to the lower levels and the beginning of a phased reclamation scheme.

14. The SWM component includes provision for 7 km of road construction at the approaches to Dhapa-Bantala, to ensure two reliable means of access, and for 15 km of temporary roads within the site; security and/or street lighting will be provided as required. Three control areas are to be established, one at Dhapa, one at Bantala and the third adjacent to a new highway which is planned to cross the site (and which will provide a third approach from the city). Each control point will include an office for recording deliveries, washing and toilet facilities, refuelling facilities and a plant garage. At the Dhapa-Bantala sites two payloaders and seven dumpers will handle the inert wastes required initially to build embankments across lagoons and later for supplying covering material; the bulldozers for this site have already been provided under the first project.

15. Two additional landfill sites are proposed to minimize the length of hau-age, one north and one south, but are not yet identified. Each site will be equipped with a site control complex at a cost of Rs 2.5 lakhs per site, but because of the time scale the cost of only one is included. Two tippers will be utilized at these sites for importing cover. Two medium bulldozers will be supplied for these sites and Rs 10 lakhs is included for road construction. - 101 -

ANNEX 4

Training, Studies, Pilot Projects and Implementation

16. The main element of technical assistance for the SWM component is a four-year program of studies and pilot proiects with the following aims:

(a) elimination of the present system of throwing all wastes into the streets by designing methods of storage and collection from source which are appropriate for various levels of urban development (e.g. where home storage is impractical, design efficient communal containers);

(b) handling methods should avoid dumping on the ground and reloading and skin contacts by workers;

(c) transport methods should be labor-intensive (probably handcarts for primary collection, from which manually handled containers can be emptied directly into the body of a motor vehicle);

(d) the separation of the prime mover from the body (e.g. tractor-trailer or roll-on container) should be considered for motorized transport to reduce loading time and increase loads/vehicle/day;

(e) method study should be applied to all manual processes including nightsoil collection;

(f) small-scale disposal operations should be developed, particularly manually operated landfill up to 20 tons/ day and manually operated aerobic composting up to 10 tons/day, for small communities; and

(g) efficient tools and small equipment should be developed, based on local materials and local manufacturing capacity.

Selected systems would be tested on a pilot scale for population units up to 10,000 for a period of at least nine months. Information derived in this way would form the basis of a Master Plan for long-term implementation. Some financial provision has been made to commence implementation, the main benefit of which will be felt by the smaller municipalities.

17. Terms of reference for these studies have been prepared. The studies are to be administered by the SWM cell of CMDA acting in cooperation with the CC Conservancy Department, with consulting assistance from the Indian National Environmental Engineering Research Institute (for CC) and the All India Institute of Public Health and Hygiene (for other authorities). There is a need to develop training in solid wastes management at senior, middle and vocational levels. CMDA are to begin with a series of three-week "familiari- zation" courses. These studies are included in cost estimates tabulated in Annex 8. - 102 ANNEX 4

C. Organization and Staffiing

18. The value of civil work and buildincg construction will exceed Rs 2 crores (US$2.3 million), hence the work load for design, bills of quanti- ates, preparation of contracts and supervision af contractors will be considerable. CMDA are better equipped than CC for this task and they have undertaken to administer all aspects of the component: design and construction. procurement, studies and pilot projects and training. However, GC1DA will consult with CC Conservancy Department at all stages of design and take full advantage of their practical experience.

19. The successful deployment of the facilities and equipment to be provided to the CC Conservancy Department will depend upon the administrative structure and the quality of management. The following principles have been agreed with the Corporation.

20. The geographical structure of the organization is to be: 11 districts having an average population of about 300,000, each district having 9 wards with an average population of about 33,000. Each ward would have a depot for the control of 80 employees, on average. Each ward would be divided into about 6 blocks, each controlled by a foreman; an average block would have 3 km of footway, 5,500 population and would be served by 10-12 unskilled workers. Functions of the Operation Division will include street cleaning, refuse collection, nightsoil collection and disposal, and such ancillary services as drain cleaning, subject to a final decision on allocation of departmental functions by CC.

Part Two: Sanitary Latrine Program

21. In 1976, CC employed 2,504 laborers to service (on a daily basis) 32,000 privies, a work performance of 16 pails/man/day, an extremely low rate of productivity. The task of collection, however^ is not easy. A service privy 1/ is a small brick shed containing a platform above an earthenware bowl, which is fully exposed to flies and to human view and is usually filled to overflowing with excreta, and is emptied, inefficiently and irregularly in most cases, for transport to disposal pits. Many privies are not easily accessible and are some distance from the road. Furthermore, the men are only able to work from their starting time of 5:00 a.m. until about 7:30 a.m. After this time residents refuse to have the workers stationed in the road, and work must cease. Hence, many of these men wiork for only 2-3 hours per day.

1/ Or nightsoil pails. - 103 -

ANNEX 4

22. The areas where service privies are in use are also the areas of open surface drains and ditches. Many of these are in a septic condition and emit gas, which is an indication of raw sewage. It seems certain that many residents, and perhaps some of the collectors, dispose of nightsoil in these drains.

23. When CMDA commenced its activities in the latter part of 1970, it was estimated that there were over 6 million people in the CMD 1/ relying on approximately 150,000 service privies and 50,000 septic tanks (often malfunctioning) for disposal of human wastes. The effect of the 200,000 badly maintained privies and tanks on the quality of water, derived at that time from more than 17,500 tubewells, can easily be imagined. CMDA is addressing this problem by (i) installing sewers in the unsewered pockets of CC; and (ii) converting service privies to sanitary latrines as part of the bustee improvement program and undertaking a similar program for those households outside the bustee areas which are prepared to contribute towards the cost of replacing service privies with sanitary latrines.

24. Both the bustee improvement and sanitary latrine program directly provide for the elimination of service privies by replacing them with prefabricated concrete flush toilets (referred to as sanitary latrines), with a connection to a sewer, (wherever possible) or equipped with a prefabricated septic tank below the sanitary latrines where sewers are not available. In the period since 1970 CMDA have (i) replaced approximately 30,000 service privies in the bustee areas with 48,000 sanitary latrines; and (ii) installed approximately 10,000 sanitary latrines in other areas.

26. The sanitary latrine program provides for the installation of a sanitary latrine at the request of a property owner and on payment of Rs 400 which is about one-quarter of the installed cost. The balance of Rs 1,200 is met from GOWB funds. Under the proposed second credit, the program allows for the conversion of about 3,000 service privies per annum. It is considered that the 75% grant is necessary to sustain this demand and thereby obtain the desired results.

D. Economic Evaluation

27. The solid wastes management component will generate a wide range of benefits. As a result of improved supervision of manpower and the provi> sion of modern collection and transportation equipment, it is expected that the productivity of the unskilled labor involved in collection will increase considerably. With more vehicles and improved maintenance, the operational

1/ The balance being on a waterborne sewage system, mainly in CC. - 104 - ANNEX 4 efficiency of the collection fleet will improve. Immediate attention is to be given to removing the accumulated street refuse and the present systems of collection and disposal are to be rehabilitated9 providing for a more efficient service at about the same per capita cost as at present. The studies and pilot projects will develop an indigeneous technology of collection, transport, and disposal for application throughout the CMD. Further- more, disposal is to be by sanitary land filling, which will provide new areas in prime locations for cultivation, industry and recreation. Benefits of the improved system of collection, transport and disposal are derived from the savings in operating costs per ton due to the improvements in efficiency resulting from the project. The rate of return of the component is estimated at 27%.

28. The sanitary latrine component, 1% of total project cost, provides for the continuation of an ongoing program which aims to eliminate service privies in the CMD. 1/ About 12,300 sanitary lantrines will be installed at a cost of US$178 each, 2/ 25% of which will be recovered directly from the beneficiaries. The benefits are unquantifiable, but the component will considerably improve the health, hygiene and environment of the beneficiaries and produce savings in the cost of nightsoil collection.

1/ Exclude bustees provided for under BIP.

2/ Excludes contingencies and supervision charges. - 105 - ANNEX 4 Table 1

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Cost Estimates for Solid Wastes Management Improvement (Rs lakhs)

Item Quantity Rate Amount

Street Cleansing and Primary Refuse Collection

Ward depots 80 1.5 120.0 Vats (400) 400 varies 10.0 Trailer sites 10 .10 1.0 Handcarts (old type) 5,000 .004 20.0 Handcarts (new type) 3,000 .007 21.0 172.0 Transport of Refuse from Wards to Landfill Sites

7-ton tippers (including 4 for clean-up campaign) 81 1.6 129.6 Tractors 12 0.6 7.2 Trailers, tipping 25 0.2 5.0 Payloaders 4 8.0 32.0 173.8

Maintenance of Transport and Mobile Plant

Building improvements garages 4 5.5 22.0 quarters 5 3.5 17.5 main workshop & garage 1 7.0 7.0 Equipment garages 4 2.5 10.0 main workshops 1 8.0 8.0 Recovery vehicles 3 2.0 6.0 Mobile workshops 4 0.75 3.0 Lowboy 1 5.0 5.0 78.5

Nightsoil Collection

Pail depots (new) 1 0.45 0.45 Pail depots (repairs) 3 0.25 0.75 Tanker standings 8 0.2 1.60 Tanker-lorries 20 1.4 28.00 Tractors 6 0.6 3.60 Cesspool emptiers 2 2.25 4.50 38.90

Transport for Supervision and Control

Jeeps 18 0.44 7.92 Bicycles 120 0.004 0.48 8.40 - 106 - ANNEX 4 Table 1 (cont'd)

INDIA

SECOND CALCUTTA URBAN DEVELOPMENTPROJECT

Costs Estimates for Solid Wastes Management Improvement (cont'd) (Rs lakhs)

Item Quantity Rate Amount

SanitaryLandfill Sites

Access Roads Dhapa-Bantala 7 km 24.0 Dhapa-Bantalalighting 4.0

Internal Roads Dhapa-Bantala 15 km 16.0 Other sites 10.0

Site Control Areas Dhapa-Bantala 3 2.5 7.5 Other sites 1 2.5 2.5

Bulldozers 80 hp 2 6.0 12.0 Payloaders 2 8.0 16.0 Dumpers 7 3.0 21.0 7-ton tippers 2 1.6 3.2 116.2

TechnicalAssistance, Training, Studies, Pilot Projects and Implementation,Devoted to Devising and Installing Improved Systems

Foreign and local consultant Costs included in Annex 8 - services, administration Technical Assistance and operation of training, studies, and pilot projects, etc.

Equipment for pilot projects 38.0

Implementationof pilot projects 105.0 143.0 Summary

Street cleaning & primary collection 172.0 Transport, wards to landfills 173.8 Maintenance, transport and plant 78.5 Nightsoil collection 38.9 Transport for supervision 8.4 Sanitary landfill sites 116.2 Pilot projects & implementationresults 143.0 Design 44.0 774.8 Taxes and duties - foreign equipment, etc. 89.0 - local equipment, etc. 32.0 Subtotal 895.8 CMDA design and supervision 62.0 TOTAL 957.8 - 107 - ANNEX 5 Part 1

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Primary School Construction, Health and Small-Scale Enterprise Components

Part 1: Primary School Construction

A. Introduction

1. Enrollment in recognized primary schools in the CMD presently stands at 66% and is thus considerably below the rest of the State where it reaches more than 83% in some areas. Inclusion of unrecognized school enrollment 1/ would not substantially alter this picture as this would add no more than some 1 - 2 percentage points to the total enrollment in the CMD. This subcomponent seeks to redress this imbalance in selected areas by providing 40 new schools and rehabilitating and expanding 400 existing school buildings.

2. Enrollment data, however, do not provide a complete picture. For example, attendance is estimated at only about 70-75% of enrollment. Fur- thermore, the dropout rate for the primary school cycle as a whole is estimated at 50-60% by the Department of Education. Thus, only about 33-40% of the age group actually complete the primary school cycle; this rate may be as low as 15% in the most deprived wards in Calcutta City.

3. Many reasons are advanced for the low attendance and high dropout rates, including: (a) lack of schools within convenient walking distances or inappropriateness of existing school buildings; (b) low quality of teaching; (c) the depressed employment situation where private rewards from school- ing cannot necessarily be realized; and (d) the need for children of the lowest income groups to work. As long as primary education is not coapulsory, decisions for building new schools or expanding existing ones caninotbe based on present or potential enrollment alone but must be supported by an analysis of the demand for primary education. CMDA has undertaken to carry out a demand analysis and assess the feasibility of increasing double-shift working and of constructing two and three-story schools.

1/ For schools recognized by GOWB, the recurrent expenditure is borne by the State budget. Unrecognized schools are financially and adminis- tratively supported by voluntary organizations. Unrecognized schools often cater to special interest groups in terms of language or religion. An unrecognized school can apply for recognition if enrollment reaches at least 100 studentse - 108 - ANNEX 5 Part 1

B. The Subcomponent

4. The subcomponent provides for the construction of 40 new schools and the upgrading or expansion of 400 existing schools to increase enrollment capacity and improve existing facilities.

5. The locations for new schools to be constructed will await the findings of the demand analysis (para 3) but would be chosen in accordance with the following criteria:

(a) priority will be given to locations serving slum areas in CC;

(b) priority will be given to areas not presently served by either recognized or well functioning unrecognized schools;

(d) land must be available for a five to ten room school building which, where necessary, may be up to three stories in height.

6. CMDA has established a detailed enrollment deficiency map of the CC and Howrah municipality. This will be matched with the demand analysis ,para 3) and with the location of plots of land available for schools. Land would become available from the administration of the Urban Land Ceil- ing Act, 1/ but mainly from khatal 2/ areas to be vacated under the Khatal Removal Program. Notifications for public acquisition of this land under the Land Acquisition Act, 1948, have been issued. Twenty-nine locations in CND are also still available from 150 private donations made in response to an appeal by CMDA.

7. Concerning the upgrading and expansion of 400 existing schools, CMDA in cooperation with the Department of Education has already established a ' st of about 500 schools identified under a previous upgrading program as be ,c hysically suitable for expansion. The screening process proceeded on the b sis that only schools on Government-owned or school-owned land were Tigie. Next, only schools having less than five rooms at their disposal were c-isidered. These locations must still be matched with the deficiency and demand analysis. At least 250 schools are expected to qualify from this review. The remaining 150 schools to be upgraded under the subcomponent are expected to be readily identified.

1/ Establishes maximum size land holdings permitted.

2/ Buffalo compounds. - 109 - ANNEX 5 Part I

C. Implementation

8. CMDA, through its Bustee Improvement Directorate, will carry out the construction of the 40 new schools according to established standards. Construction of single storey schools will be in brick with an asbestos cement roof. Two and three storey buildings will have a reinforced concrete frame, concrete floors and flat concrete roof. Upgrading and expansion of existing buildings will be made along the same lines as in the previous upgrading program. This involves channeling funds through commercial banks to the school committees. Funds are disbursed upon utilization certificates issued by the engineers of CMDA in charge of supervising the work.

D. Project Benefits

9. The expected benefits from the subcomponent are as follows:

(a) 40 new school buildings operating on a double-shift system will provide places for 16,000 to 20,000 1/ students. The cost per student place based on double-shift operation will vary between US$43 2/ for a one-storey building and US$85 for a two-storey building (single shift);

(b) 400 upgraded schools will provide an estimated average increase in enrollment possibilities of 100 students per school for a total increase of 40,000 at a cost per student place of US$44; and

E. Project Costs

10. The project comprises capital investments in school building and upgrading/expansion; the recurrent costs for teachers, maintenance, etc. are to be borne by the GOWB Department of Education. The Department estimates that, in the upgraded schools, no additional teachers are required for the

1/ The actual number served will depend on the number of 5 and 10 class- room schools built and the extent to which double-shift working is feasible.

2/ Excluding price contingencies. - 110 -

ANNEX 5 Part I

additional enrollment of students. For the new school buildings, 400 new teachers and headmasters will be employed for double-shift operation. In view of the overall budget allocation for increasing the teaching force, the Department anticipates no difficulty in meeting recurrent costs.

11. Capital Costs. Based on sketch plans and preliminary engineering details these are estimated to cost Rs 215 lakhs (excluding contingencies and design expenses) and this sum is made up as follows:

Rs Lakhs

1. Land acquisition 15

2. 20 New Schools consisting of 10 classrooms, administration office, teachers and multi- purpose room at Rs 2 lakhs each 40

3. 20 New Schools as above but 5 classrooms at Rs 1 lakh each 20

4. Remodeling 400 existing schools at Rs 25,000 each 100

5. Equipment 40

215 Design and Supervision 16 Subtotal 231 10% Physical Contingencies 20 Price Contingencies 71

Grand Total 322

12. Expenditure is expected to be phased as follows:

Rs Lakhs

1980/81 146 1981/82 176

Total 322 - 111 - ANNEX 5 Part 2

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Primary School Construction, Health and Small-Scale Enterprise Components

Part 2: Health Component

Objectives

1. The objectives of the health component are: (i) provide through a pilot program comprehensive health care including nutrition and family planning services to a target population of 175,000 predominately bustee inhabitants and (ii) test the effectiveness and efficiency of an improved health delivery system designed to coordinate community outreach efforts, patient referral mechanisms and curative and preventive medicine approaches. If successful, this system could be replicated throughout the rest of CMD at minimal additional cost.

Description of the Pilot Program

2. The proposed health delivery system envisages establishing the following types of health facilities with the staff indicated:

(a) Project Headquarters -- to be located at the Health Directorate of the GOWB Health Department with the following professional staff:

(i) Deputy Director (ii) Assistant Director (iii) Accountant (iv) Statistician -- this office will be responsible for overall organization, implementation, management and evaluation of the program

(b) Primary Health Center (PHC) -- the two primary health centers, in addition to providing services to a population of 25,000, each will also give continuous supervision and logistic support to the five subcenters affiliated with each primary center. The staff required for administration, supervision and logistic support of each primary health center and five subcenters is: - 112 - ANNEX 5 Part 2

(i) Senior Medical Officer (ii) Accounts Clerk (iii) Statistician

In order to provide the medical services at the PHC level, the following staff are needed:

(i) 2 physicians (ii) 2 pharmacists (iii) 2 auxiliary nurse/mid-wives (iv) 6 multi-purpose workers (v) 18 "voluntary't community outreach workers

(i) 1 physician (ii) 1 pharmacist (iii) 1 auxiliary nurse/mid-wife (iv) 3 multi-purpose workers (v) 9 "voluntary" community outreach workers

All "voluntary" workers will be recruited from women's and youth clubs in the bustee areas or from volunteers already working for non-government agencies within the bustees. They will be provided the necessary equipment and simple medicine but will not become salaried Depart- ment of Health employees. After one year's service and additional training, they may advance to the position of multi-purpose worker which is a sanctioned Government position.

Health Services to be Provided

3. The same package of services will be provided at all PUCs and SHCs. It includes preventive care (periodic health checkups) as well as treatment for minor ailments and referral of cases to higher levels when necessary. Outreach health and nutrition education as well as family planning motivation will be provided through the use of the community outreach workers. Also, they will update the family health status with routine home visiting every four months under the direct supervision of the multi-purpose workers. Family health records will be kept on all families in the target area compiled from information collected on home and clinic visits. At the health facilities, the auxiliary nurse/mid-wives and multi-purpose workers will provide maternal and child care, nutrition education, and family planning services and promotion. The family planning services include intra- uterine device insertion, vasectomy and distribution of pills and other con- traceptive supplies; those requesting female sterilization will be referred to hospitals. - 113 - ANNEX 5 Part 2

4. Routine ante-natal and post-natal care will be provided to all mothers and infants; pre-school child care will be given to those under the age of six. Referrals of sick children from schools will come through the school nurses. The entire target population will be covered by vaccina- tion against smallpox and tuberculosis and innoculation against diphtheria, tetanus, pertussis, cholera and typhoid fever.

5. No food will be directly distributed through the health facilities. All malnourished cases will be identified and referred to the nearest feeding centers which are run by the Health and Social Welfare Departments and by non-governmental agencies. Surveillance of the malnourished cases will be undertaken by the multi-purpose workers through their outreach contacts. Referral to polyclinics and hospitals will be made for those sick cases seen in the SHCs and PHCs who require more sophisticated diagnosis and treatment.

Proposed Benefits of the Pilot Program

6. The review of the current situation indicates the need to relieve the excessive overloading of hospital out-patient facilities now providing much routine primary care. An alternative is called for in order to avoid the additional construction of expensive in-patient facilities for patients whose serious conditions could have been prevented with earlier treatment intervention at health centers. In addition, there is the need to improve the utilization of peripheral health centers as well as the existing nutrition and family planning programs by the bustee inhabitants. Particularly, the beneficiaries of the massive supplementary feeding program (currently over 300,000 in the CMD area) must be focused more specifically to include those most in need. While the target groups are children and pregnant and lactating women, there is no evaluation of program effectiveness or measure of actual intra-family distribution of the food. This component will employ community-based outreach workers who, through their routine household contacts, will detect, monitor and refer needy cases to sub-centers for appropriate care. Furthermore, the evaluation and monitoring system designed to measure the program's impact will allow for improvements in planning and management. While the total number of beneficiaries is small in comparison to the denominator for the CMD as a whole, the effort is justified for its operational research aspect; indeed it represents Calcutta's first attempt to: (i) systematize patient referral, (ii) introduce community-based outreach workers, and (iii) integrate preventive, promotive and curative health services including family planning at the home level. The estimated capital cost of providing the package of services is Rs 12.6/capita, which is comparable to the current GOWB per capita expenditure on health.

Organization

7. The GOWB Department of Health will be responsible for implementation of the pilot project and CMDA, through the Bustee Improvement Direc- torate, will construct the new physical facilities. Program planning, - 114 - ANNEX 5 Part 2

implementation and evaluation will be reviewed by a Joint Committee made up of representatives of the GOWB Department of Health and the CMDA Health Division. Financing, personnel, maintenance and supplies will be the responsibility of the GOWB Health Department. Selection of key personnel and sites for the PHCs and SHCs will be arranged jointly by the CMDA and GOWB Health Department. Personnel training, as well as the design of management procedures, records and reporting forms and evaluation procedures, will be the responsibility of the Health Department.

Criteria for Site Selection

8. The sub-centers will be located within a 6 km radius of their affiliated PHC. Each SHC and PHC will be assigned the nearest polyclinic and hospital as its referral facilities. The criteria for selection of sites for PHCs and SHCs are as follows:

(a) no currently available health center in the area;

(b) improved water and sanitary facilities already in the area or proposed under the project;

A recent survey of health facilities in the CMD has identified the location of all hospitals, clinics, dispensaries, and maternity homes. The prime target areas for the program are those with no existing health facilities whatsoever, or only nursing homes which are beyond the economic reach of bustee inhabitants.

Physical Facilities

9. The project headquarters will be located in the Health Directorate at the GOWB Department of Health. For the first year of the program operations, the PHCs and SHCs will operate out of rented facilities located in the appropriate areas, during which time CNDA will acquire sites and construct the permanent facilities. Sites will be acquired by CMDA under the Land Acquisition Acts of 1894 and 1948 and will mostly become available from the Khatal Removal Program (see Annex 1). Preliminary designs and specifications have been prepared for the PHCs and SHCs and used as a basis for budgets. Plans will be finalized by March 31, 1978. Construction contracts will be awarded to local contractors by the CMDA under local bidding procedures. On completion, the facilities will be commissioned by the GOWB Department of Health, who will be responsible for future maintenance and operation. - 115 - ANNEX 5 Part 2

Training, Evaluation and Monitoring

10. Based on the services to be provided and the work loads per health worker, a training program will be implemented by the GOWB Health Department for all categories of workers in the pilot program. The trainers will come from the All-India Institute of Hygiene and the District of Nadia, where the Government has had extensive experience over the past three years in a similar program designed for rural areas. The rural program has been replicated in four additional rural districts with convincing results. The syllabi and handbooks are already prepared for the multi-purpose workers, doctors and nurses; the curricula and training manuals will be finalized by December 31, 1977.

II. The continuous monitoring system for program management will be adopted from that currently used in the Nadia District. It includes a simple, service-specific recording of data collected for the family records at home and clinic visits; later it is aggregated into registers by the multi- purpose workers for presentation to the senior medical officers at the PHC level. Well-defined procedure manuals for supervision of manpower and supply logistics by the SHC and PHC physicians and auxiliary nurse/mid- wives will also be adapted from ones used in Nadia. A separate register for referral cases will be maintained. The efficiency of the program will be measured in terms of: (i) percentage of population covered by specific health services, (ii) the utilization of services by the target population, and (iii) the number of referrals and revisits by type required.

12. As a baseline for program evaluation, a household health survey scheduled for July 1977 will be undertaken by CMDA and the GOWB Health Department in selected areas. It will provide data on the current infant and child mortality rates, the incidence of malnutrition, family planning utilization rates by eligible couples and the incidence of common infectious diseases occurring in the families. These indicators will be updated annually in a program report to be prepared jointly by CMDA and the GOWB Health Depart- ment. It will be possible to compare, for example, nutritional status of users and non-users of the nutrition referral system.

Budget

13. The budget for the three-year pilot program is presented in Table 1. The GOWB Health Department has agreed to finance all recurrent expenditures; capital cost expenditures will be made through CMDA's program and facilities will be transferred to GOWB Health Department on completion. - 116 - ANNEX 5 Part 2 Table 1 INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Health Component Budget

Capital Recurring (Rs lakhs)

1. Operation of 10 SHCs:

(a) Capital cost of constructionof 80 m2 building togetherwith proportionate cost of land @ Rs 100,000 per unit x 10 units 10.00

(b) Non-recurringexpenditure for purchase of equipment and furniture @Rs 25,000 per unit x 10 units 2.50 -

2. Operation of 2 PHCs:

(a) Constructionof a 200 m 2 building (includinggarage) togetherwith proportionatecost of land @ Rs 15,000 4.34 _

(b) Non-recurringexpenditure for purchase of equipment and furniture and 1 vehicle per unit Rs 85,000 x 2 1.70 -

3. Operation of Project Headquarters:

Non-recurringexpenditure: cost of furniture,office equipment and one vehicle 0.75 1.80

4. Cost of Referrals:

(a) Polyclinics - 1.68

(b) Hospitals - 0.73

5. Training Program - 0.12

6. Management Consultant _0.28-

TOTAL 19.29 16.68

Year 2 - 15.03 Year 3 - 15.03

19.29 46.75

GRAND TOTAL 66.03 - 117 ANNEX 5 Part 3

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Part 3: Small-Scale EnLrg s Component

1. At the end of 1976, CMDA decided that its traditional function of provision of physical urban infrastructure should be complemented by efforts to support the economic activities of the slum population in order to raise their employment and incomes directly. Therefore, CNDA undertook surveys/studies to prepare a program which would cater to small-scale enterprises (SSEs) (para 9).

2. The SSEs are defined to comprise small-scale industries (SSIs) which manufacture and small businesses (SBs) which provide services and include, in particular, trade and commerce. SSIs are defined in India as manufacturing units with fixed assets in machinery and equipment of up to Rs 1 million and in the case of ancillaries up to Rs 1.5 million. Howevel, this definition is much too large for slum industries. The target group cf the proposed SSE component would be mainly the very small-scale enterprises which presently have insufficient access to institutional credit and technical assistance. The upper limit of total capital employed has been somewhat arbitrarily set at Rs 100,000 (see para 26), which is more than 10 times smaller than the official SSI definition. Most of these units are unregistered (see para 8) and belong therefore to the informal sector. 1/

3. The objectives of the proposed SSE component of Rs 30 million, which would be largely experimental, would be to: (i) extend financial and technical assistance, now mainly available to the larger units of the small- scale sector, to the existing smaller units primarily in the informal sector, particularly through provision of working capital finance; (ii) assist new entrepreneurs in setting up SSEs through provision of finance and technical assistance; and (iii) gather experience and information through a monitoring program so as to learn valuable lessons for a second phase SSE project, which after execution of additional studies would concentrate on an enlarged target group and subsector specific support programs.

1/ To obtain any financial or technical assistance from government institutions an SSI has to register with the Department of Cottage and Small Scale Industries. Similarly shops can also register with the Govern- ment of West Bengal. - 118 - ANNEX 5 Part 3

4. General. Since 1965, industrial production in West Bengal actually declined to a low in 1970, increasing slowly thereafter to 1976 without reaching the 1965 level; 1/ by comparison, India's industrial production grew con- tinuously with only a small decline in 1966 and 1967, as shown below:

General Index of Industrial Production, West Bengal and India, 1964-1976 (Base: 1963 = 100)

Area 1964 1965 1966 1967 1970 1973 11976

1. West Bengal 106.6 112.8 104.8 103.1 94.3 96.9 102.6 2. India 108.6 118.6 117.7 116.7 139.3 154.8 170.0

5. Probably the major reason for the stagnation in industrial production was the decline of the jute industry (on which West Bengal industry is heavily based) mainly due to the loss of the raw jute production potential in East Bengal at the time of partition in 1947 and due to the synthetics competition on the world market. Other reasons are: (i) emergence of strong industrial centers around Bombay, Madras and Delhi competing with Calcutta; for example in 1965/66, the eastern region accounted for 65% of all-India engineering goods exports, whereas in 1972/73 this proportion had fallen to 22%; (ii) civil disturbances from 1968 to 1972 in West Bengal which slowed down industrial production; (iii) arrival of refugees from East Bengal in 1971; and (iv) lack of demand from the agricultural sector, since in the last 10 to 15 years agricultural production technology associated with the so-called "green revolution" did not take hold very quickly in West Bengal.

6. However, industrial production in West Bengal has slowly increased over the past seven years and there is substantial potential for further growth, particularly in Calcutta, in view of the infrastructure investments planned for the future. Moreover, some industrial branches which have considerable export potential are heavily represented in Calcutta, like engineering goods, finished leather and leather goods.

The Small-Scale Enterprise Sector in the CMD

7. Employment. Partly as a result of the past stagnant economic conditions when few additional jobs were created, many people had to fall back on self-employment in very small-scale and household industries and trade and commerce. The latest All-India Census of 1971 reveals that of

1/ The Calcutta Port statistics which may be taken as another indicator for West Bengal's economic activities show similar trends: The 1975/76 traffic was provisionally estimated at 7.5 million tons, which was about 25% above the bottom level of 1970/71, but still 25% below the 1965/66 level. In 1965/66, Calcutta handled 19% of all tonnages of the major Indian ports, but in 1975/76 it handled less than 12%. - 119 - ANNEX 5 Part 3

the about 3.2 million people living in Calcutta City 1/ about lel million or 37% were employed. The manufacturingsector employed 300,000 people and of these more than one-third (130,000)were employed by unregisteredunits (informalsector), which had an average of 3-1/2 employees per unit (most of whom are family labor) compared to about 70 employees per unit in the formal (registered)sector. Trade and commerce employed 192,000 people and of these more than half (about 103,000)were employed by informal sector units which have an average of 2 employees per unit (most of whom are family labor) compared to about 10 employees per unit in the formal sector.

8. Number of SSEs. The data available on the number of SSE units in CMD is fragmentaryand largely out of date. Nevertheless,given the low growth of the local economy, they may be taken as indicative of present orders of magnitude. The 1971 census estimated the number of units in trade and commerce in Calcutta City at about 60,000 of which about 50,000 were unregistered. A census of 1965/66 puts the numbers of SSIs in CMD at about 115,000 of which 70,000 were unregistered. Therefore about 80% of trade and commerce units and 60% of SSI units in CMD belong to the informal sector. These censuses do not cover barbers, rickshaw pullers, street hawkers, etc., whose number may be significant.

9. The CMDA Survey. Early in 1977, CMDA undertook to survey (i) manufacturing units within ten selected bustee areas, which are likely to be among the lowest income bustees (and which have a total population of about 200,000), and (ii) very low income units of five important manufacturing subsectors in the CMD, i.e. light engineering, leather tanners, garment makers, plywood makers and clay modellers, and which are physically concentrated in certain areas of CMD. The major common feature of these units is that most of them belong to the informal sector and thus are very small (most of them have less than Rs 100,000 of capital employed) and have insufficient access to institutional credit and technical assistance. These surveys concentrated on the manufacturing units only. Service units such as shops, rickshaw pullers, etc. would be surveyed under the proposed studies (para 36).

10. The survey results revealed that the surveyed units fulfill all criteria for a desirable target group: (i) they provide employment to the lowest income groups in Calcutta; (ii) these units are labor iintensive; (ii1) the operations of these units are profitable and thus most likely efficient; and (iv) many units cited lack of finance for working capital as a major constraint in their operations.

11. The survey in the ten selected bustee areas covered 1,341 families of whom 45% were engaged in garment making, 17% in light engineeringworks,

1/ Calcutta City covers only part of the area of the CND which includes in addition part of 24 Parganas, Hooghly and Howrah, and has an approximate population of almost 10 million. - 120 -

ANNEX 5 Part 3

9% in leather goods, 6% in carpentry and 24% in other activities. 1/ The average monthly income was about Rs 400 per family of an average of 6.75 members, so that average annual per capita income of Rs 711 (US$79) (provided that no family member had other employment) is low. An analysis of 9 realistic project profiles have been prepared by the interested commercial banks and represent the kind of projects to be financed in the slum areas. The analysis shows that the capital employed 2/ per laborer is low, ranging from about Rs 1,000 to Rs 10,000. The profit per capital employed is high, ranging from 2% to 15% per month due to the relatively low capital base. These figures do not take into account seasonal variations, which reduce capacity utilization and tend to be frequent for these SSIs.

12. The survey of the five selected industries groups covered about 4,000 units on a sample basis. The wages paid to employees were low ranging from Rs 8 to Rs 12 per day (about Rs 270 to Rs 540 annual per capita income for a family of 7 and 5 members respectively, assuming 220 working days per year). The annual per capita income was also relatively low for those units where such data were available (on average Rs 810 for clay modellers, and less than Rs 1,620 for 80% of tailoring units). The average capital employed per laborer ranged from Rs 1,000 (clay modellers) to Rs 3,400 (small employed tanners). 3/ The profitability as percent of turnover was satisfactory, ranging from 10% (tanners) to 20% (tailors).

13. Marketing. Marketing channels vary widely according to products: finished goods for household consumption, government purchases and business investment, and intermediate goods purchased by other producers as inputs. Finished consumer goods are sold directly to local household consumers or through normal retail and wholesale trade channels. Consumer goods are also produced on sub-contract for larger enterprises which often turn out to be wholesalers rather than producers, the shoe trade in Calcutta being a case in point. Intermediate goods are often purchased on sub-contract by somewhat larger firms which constitute part of the formal sector, as well as by other small enterprises in the informal sector. Inter-industry sub-contracting is particularly widespread within the light engineering industries. Intermediate goods for agriculture (e.g., grain milling machines and tubewell sections) are produced either on sub-contract or sold through normal market- ir- channels in Calcutta and in provincial centers. Production for export

-his distribution of industries is not representative for SSIs in the w_n1oleCMD, where engineering accounts for about 50%, chemicals for 14%, and agro-based industries for 10% of units.

2/ This includes machinery and working capital, but not land and buildings which are assumed to be rented.

3/ This figure is not known for the light engineering units where it is likely to be higher. However, this would be generally within the limits established under the urban poverty program of about Rs 8,300 (US$965) in India. - 121 - ANNEX 5 Part 3 is, at present, also carried out by many SSIs through traditional channels, an example being the increase in production of ready-made garments for export during the last several years. Commercial banks, which would make loans under the proposed scheme, would evaluate market prospects for individual products at appraisal of subprojects (para 29).

Policy Framework for SSEs 1/

14. GOI Policy. GOI has taken the following special policy measures to support small-scale enterprises:

Protection - GOI has reserved 177 items for exclusive manufacture in the small-scale sector to protect it from the competition of new large-scale concerns.

Regulation - The small-scale entrepreneur is exempt from the GOI industrial licensing procedures which apply to the medium and large sector for setting up a unit, provided the item of manufacture is not governed by special regulations.

Financial Assistance - The interest rates and security marginE on loans provided by commercial banks and financial institutions to SSEs are normally lower than for other borrowers. Moreover, a Credit Guarantee Scheme, which provides for sharing of possible losses between the lending institutions and GOI, encourges credit institutions to make loans to SSEs.

Raw Materials - The small-scale units are entitled to import raw materials according to the Import Trade Control Policy as announced every year. Most of the raw materials produced indigenously have been decontrolled and units are free to take these materials directly from the producers, from the open market or the State Small Industries Corporation. How- ever, wherever there is some control, the unit has to apply to the State Department of Cottage and Small Scale Industry which will allocate the material to the unit.

Marketing - GOI has reserved 220 items for exclusive purchase from the small-scale sector. Moreover, a price preference up to 15% is given to small-scale units in respect of items which are purchased both from large-scale and small-scale sectors.

Institutions - GOI has two national institutions which cater to SSIs: (i) the Small Industries Development Organization (SIDO) of the Department of Industrial Development, which has a three-tier structure consisting of a network of Small

1/ This section refers mainly to SSIs except for the financial assistance which also refers to SBs. - 122 - ANNEX 5 Part 3

Industries Service Institutes (SISIs), branch institutes, extension centers and workshops throughout India, also in West Bengal and Calcutta; the SISI provides comprehensive assistance to SSIs from selection of an item to manufacture and to marketing of a final product; (ii) the National Small Industries Corporation (NSIC) which has five Prototype Develop- ment and Training Centers (PDTC), one of which is located in Calcutta; the PDTCs concentrate on training of craftsmen, artisans and engineers and on prototype development for small- scale industries.

15. It is unclear at this stage if the benefits of this program justify the costs. Part of this issue would be addressed in a study by IDBI in connection with the IDBI/SFC II 1/ loan, which would investigate the financial and economic adequacy of the incentive system.

16. Institutional Assistance to SSEs in West Bengal and CMD. In CMD the SISI, PDTC, the GOWB through its Department of Cottage and Small Scale Industries (CSSI), the West Bengal Financial Corporation (WBFC), the West Bengal Small Industries Corporation (WBSIC), and the commercial banks provide technical, financial and marketing assistance, and training.

17. The SISI in Calcutta has been relatively successful in providing such varied services as appraisal of investment projects (it scrutinized about 5,600 schemes during 1976), provision of workshop and laboratory services, designing plant layouts, training in management and technical trades, a subcontracting exchange mainly for engineering, rubber goods and paints (six to eight inquiries per month in 1976), and general assistance such as advice in finance, technical aspects and marketing.

18. The PDTC in CMD had 2,148 trainees in the period 1965-1976 and had 210 in early 1977. The trainees include: artisans sponsored by individual small industry units who stay for 1 year; commercial trainees; engineering graduates who get in-plant training; and engineer entrepreneurs who come for three months lectures and get assistance to their projects. The prototype factory specializes in electrical instruments, electrical wiring, pressure dryers and cable extrusion machines. It also provides services on demand and against payment.

19. The CSSI which supervises and coordinates all assistance provided to SSIs (see para 42) is also administering a financial assistance scheme. Under the State Aid to Industries Act, it advances loans up to Rs 1,000 on personal bonds, and up to a maximum of Rs 5,000 against one or more personal sureties at 5-1/2% interest for 10 years. Since 1974-75, CC area is excluded from the scheme, but the scheme applies to other parts of CMD, where a small amount Rs 0.5 million was financed during the past three years.

1/ Loan No. 1260-IN, Report No. 1158-IN. - 123 -

ANNEX 5 Part 3

20, In 1975/76 the WBFC made term loans for a total of Rs 58 million to 213 SSIs in West Bengal.

21. The WBSIC provided in 1975/76 Rs 68 million worth of raw materials to about 2,300 SSIs. Since inception in 1956 it has assisted 67 SSIs with hire/purchase machinery of Rs 4 million. Since 1973 it has set up four industrial estates and one commercial estate for 453 SSIs and 310 SBs. In addition, it assists in supply of inputs for and marketing of handicraft products, and administered six demonstration and service centers for leather processing up to 1976, when this function was transferred to the newly created West Bengal Leather Industries Development Corporation.

22. WBSIC is also administering a scheme on behalf of GOWB to help edu- cated unemployed set up small units by providing seed capital (margin money) of 10% of the project cost (so as to reduce the amount to be put up by the entrepreneur to 10% of project cost, since financial institutions normally put up 80%) at 6.5% interest for 5 to 15 years. From 1973 to 1976 it disbursed in the whole of West Bengal about Rs 10 million (US$1.2 million) to about 1,330 units with a total employment of 10,500 people.

23. This assistance program is quite comprehensive and due to the multiplicity of institutions and the complexity of the sector some overlap may be unavoidable. The assistance is mainly focused on the organized sector. One of the objectives of the project component would be to broaden and intensify this assistance program to SSEs of the informal sector in CMD.

Summary of the Project Component and its Institutional Framework

24. The CMDA surveys (paras 9-12) permitted the formulation of an SSE project component which is summarized below with its institutional framework:

Subcomponents Responsible Institutions

A. Loans totalling Rs 30 million Four nationalized commercial mainly for working capital banks, i.e,, Allahabad Bank, but also for fixed capital State Bank of India, United to approximately 4,800 bor- Commercial Bank and United rowers (average loan size of Bank of India, would make loans Rs 6,250) over a three-year available from other sources period. upon directives by GOI. 1/

B. SSE extension service of 20 Department of Cottage and SmalL extension workers costing Scale Industries (CSSI) in close about Rs 1 million over three cooperation with the social ser- years. 2/ vice organization Kalikata Bustee Pragati Sangstha (KBPS).

1/ Not funded under the proposed IDA credit.

2/ To be funded by the GOWB Directorate of Cottage and Small-Scale Industries (CSSI). - 124 - ANNEX 5 Part 3

C. Studies of the SSE potential Calcutta MetropolitanDevelopment in Calcutta, of specific SSE Authority (CMDA) through consul- subsectors,and survey of SSEs tants. in all of CMD's slum areas, costing about Rs 1.5 million togetherwith the monitoring under (D).

D. Performancemonitoring of CMDA, together with social and loanees, commercial banks, extensionworkers. extension service, and coordinating committee.

A coordinatingcommittee to be chaired by CMDA would assure adequate coordination. This would be a first phase experimentalproject component limited to the already surveyed target population. The proposed studies would mainly prepare a second phase project with a larger geographicalcoverage and with industry specific technical support programs (para 36).

The Credit Component

25. Background. The proposed credit componentwould focus on a credit gap which presently exists for institutionalcredit to the small-scaleand household industriesand the small businesses in the Calcutta slums. There are large underbankedpockets in Calcutta amidst relatively rich and well banked areas. In fact, many bank branches in CMD are located on main streets even inside the bustees and attend to medium and large businessmen but hardly to the bustee population living in the area. Some commercial banks have made some efforts to cater more to the bustee population,but these efforts could be stepped up substantially. Although RBI has issued a directive that one- third of the commercialbanks' lending should go to priority sectors (which comprise small-scaleindustries, transport operators, agriculture,export retailers, small businesses,professionals and self-employed)by 1979, the commercialbanks have shown in the past little interest in increased lending to the target group, partly because the target popuiation may be among the most risky of the priority sectors. In due course the lending to SSEs in urban areas may rise further. However, the GOI directive to the participating commercialbanks would ensure banking facilities becoming available to the urban poor at a much earlier stage and with much more emphasis than wotid otherwisebe likely, and the experience gained from this experimental proje t componentwould be applied in a larger project later on.

26. The Target Group. CMDA proposed that the credit componentbe focused on the very small entrepreneurand that, therefore, the maximum loan size be Rs 20,000 (US$2,325). Larger loans for larger enterprises are much more easily available from banks (which have a financial interest to make larger loans because of generally reduced risk and administrative cost). Judging from the survey data, such a loan limit would encompass virtually all of the target enterprises. The target group for this project componentwould comprise (i) all service and manufacturingenterprises - 125 - ANNEX 5 Part 3 in ten selected bustees, (ii) all units of the five selected industrial subsectors, and (iii) all units in the East Calcutta industrial estate proposed to be set up under the project, provided that these units have capital employed of not more than Rs 100,000.

27. The Demand for Institutional Credit. Although, due to lack of historical data, the demand for credit is difficult to project, the available statistical information, permits a broad estimate of the working capital credit demand of the surveyed industries and the small businesses in the ten selected slum areas, by assuming, somewhat arbitrarily, that about 50% of the surveyed units would require financing of about 50% of their estimated working capital. The working capital credit would have three major functions: (i) to support expansion of the business; (ii) to ease the constraint on working capital thus allowing for continued production even in periods of slack sales; (iii) to compete with the financing of moneylenders (which charge 70% to 120% interest per annum), although the accessibility and infor- mality of moneylending operations will continue to be attractive for the small businessman.

28. The demand for investment credit of the target group was estimated on the basis of that, as in the past, the existing number of small-scale units would grow by approximately 1% per annum and that they would need finance for about 80% of their investment.

29. Thus, an estimated 4,800 units (about half from the bustees, and half from the five selected industry groups and a few from the industrial estate) would require finance of about Rs 30 million or Rs 6,250 per unit. About 90% of this funding is estimated to be for working capital credit and the remainder for investment. 1/ This funding is assumed to be committed over a three-year period. The four nationalized commercial banks would charge 10% to 12% per annum to the subborrowers. The commercial banks would finance up to 90% of investments and working capital. The commercial banks would apply their normal security arrangements which consist of hypothecation of assets or, where this is not feasible, of group guarantees. All loans to be made would be covered under the Credit Guarantee Scheme of the Reserve Bank of India (para 14). The commercial banks would appraise subprojects through confirmation of the information entered on the loan application which would also address the marketing aspects including a site visit and would disburse in most cases directly to the supplier. For working capital credit lines, only initial disbursements and subsequent net increases would be counted towards the Rs 30 million loan fund. 2/ Participating commercial banks would keep quarterly summaries of the loans made.

1/ In small enterprises, the working capital component is predominant.

2/ For example, if a customer borrows Rs 2,000 in the first month, pays back Rs 1,000 in the second month and borrows another Rs 2,000 in the third month, only the Rs 2,000 in the first month and Rs 1,000 in the third month would be counted towards the Rs 30 million loan fund. - 126 - ANNEX 5 Part 3

SSE Extension Service

30. CSSI has an extension service which covers the whole of West Bengal and which is mainly concentrated in its rural areas. As a result, there is virtually no SSE extension service covering CMD. However, an extension service is essential to serve as a catalyst between the institutions catering to the SSE sector, including commercial banks, and the slum population which often is illiterate and ignorant of these institutions and their services.

31. An SSE extension service attached to, and to be paid by, the CSSI would be created, initially of about 20 officers, whose main tasks would be to: (a) advise and assist in obtaining technical assistance available from the various agencies catering to the small scale sector; (b) identify new entrepreneurs and investment possibilities; (c) assist in provision of inputs and marketing; (d) promote associations/cooperatives so that purchase of inputs, production, and marketing can be pooled; (e) promote loan applications and help fill them out; (f) assist in statistical surveys; and (g) identify needs for training of small entrepreneurs and assist in enlisting them in training programs.

32. Such extension service would be essential for a successful execution of this component. It would place much of the promotional costs on the responsible government department (CSSI), so the participating commercial banks have to bear the costs of the actual lending operations only. Moreover, the extension workers would play a catalytic role between the bustee population and all institutions catering to the SSE sector. They would also have to work closely together with the social workers, who have the trust of the bustee population and are the most knowledgeable about them, and the commercial bank branch managers, who have to become aware of the socio-economic situation in the bustees.

33. The SSE extension service would initially cover only the target population of the credit scheme. The 20 extension workers (including one highly qualified deputy director who would be a member of the Coordinating Committee and two assistant directors) would have to promote approximately 4,800 small loans, over three years or about 80 loans per extension worker per year, which appears reasonable. About half of the extension workers would work in the bustees where about half the loans would be made (covering a population of about 200,000), and the other half would work on the five selected subsectors (in which they would have experience) and the industrial estates. At a later stage, the extension service would be enlarged (to the same extent as the credit scheme) to cover a larger area of CMD.

Studies and Monitoring

34. General: The proposed credit component would close an existing gap of institutional credit for a limited target group. However, further studies are required to (i) enlarge the target group at a later stage to all CMD slums; (ii) identify industrial subsectors to be supported in addition to - 127 -

ANNEX 5 Part 3 the five already selected and their ideal location in CMD; and (iii) provide for common facilities and services to particular industries so as to obtain economies of scale in purchase of inputs, in production, and in marketing. The projects resulting from these studies, some of which may not take longer than 6 to 8 months, could in part be financed from the proposed credit component and in part under a second phase of SSE projects.

35. A monitoring program is expected to provide valuable feed-back for execution of the proposed component and definition of a follow-up project.

36. Studies. CMDA would commission the following studies:

(a) A study defining the SSE potential within CMD, in connection with a study on the industrial potential for large scale industries presently executed by Tata Economic Consultants on behalf of the Depart- ment of Commerce and Industry through the West Bengal Industrial Development Corporation, and taking into account the GOWB five year plan. This supplementary study would in particular concentrate on the comparative advantage of CMD for certain SSE subsectors and on locational considerations within CMD (TOR to be sent to IDA by March 1978 and draft study by December 1978);

(b) Studies of small-scale industrial subsectors which are prevalent in CMD. These studies would analyze the existing situation and make proposals for (Terms of Reference to be sent to IDA on at least five sectors by June 1978, and draft study by December 1978): (i) optimal structure of the industry with particular emphasis on the comparative advantages of the small and very small-scale units; (ii) inputs and marketing arrangements; (iii) extension service; (iv) training needs; (v) investment in individual and common production and storage facilities; and (vi) institutional arrangements concerning provision of common facilities and services.

(c) Extension of the basic survey of small-scale enterprises (including small businesses) to all slum areas in CMD. This survey would cover the other approximately 5 million slum dwellers in CMD, in particular also the refugee settlement of about 2 million people, and would be the basis for a later extension of the credit component and the technical extension service covering the whole of CMD (Terms of Reference to be sent to IDA by March 1978, and draft study by December 1978). - 128 - ANNEX 5 Part 3

37. Monitoring. A monitoring program to start in March 1978 would concentrate on: (i) the economic performance of the loanees and the employment impact; (ii) the performance of the commercial banks; and (iii) the performance of the technical extension service.

The social workers covering the target group would pay monthly visits to the loanees and fill out questionnaires which would record the number of people employed, number of hours worked, salary of employees and bottlenecks and changes in the procurement, production and marketing aspects. This data would be analyzed half-yearly to evaluate the benefits and costs of the credit scheme. The performance of the commercial banks would be evaluated through quarterly reports that would stipulate among others the number of applications received, number of rejections with reasons for rejections, the processing time for applications, the loans made by number, size, purpose and geographic area, the repayment performance, the number of bank employees working on the scheme, including an attempt to evaluate the costs of making these loans. An attempt would also be made to review the adequacy of the eligibility criteria. The monitoring of the extension service would consist in quarterly compilation of weekly reports to be submitted by the extension workers, recording among others the number of initial visits and follow-up visits made, the type of assistance provided and the number of loan applications made by contacted people. The activity of the Coordinating Committee (see para 54) would be monitored through the minutes of meetings which should record the issues discussed and the action decided and taken.

38. The description below concentrates on those institutions (and mainly on those functions) which are directly related to the execution of the project component, i.e., CMDA for overall coordination and execution of the proposed studies, the two commercial banks for handling the credit component, CSSI for administering the extension service, and KBPS for assisting the extension service and the commercial banks. All of these institutions are sufficiently qualified to fulfill their respective functions in execution of the component.

Calcutta Metropolitan Development Authority (CMDA)

39. The CMDA, with about 4,000 employees, has the function of planning and construction of physical infrastructure for the CMD to improve the quality of life and facilitate the economic activities of CMD's inhabitants. At the end of 1976, CMDA decided to attempt to support the economic activities of the slum population directly in order to raise their employment and incomes. CMDA can usefully play this role, in particular by preparing SSE projects, since the existing institutions do not focus on this aspect and do not have a qualified planning wing such as CMDA. CSSI has concentrated its activities mainly on the rural areas, whereas all the other institutions catering to the SSE sector have specific functions other than preparation of such projects. - 129 -

ANNEX 5 Part 3

40. In view of this, CMDA has created an economic cell which should have the functions of: (i) keeping close liaison with all economic planning agencies in West Bengal and India, so as to provide the base for the planning of urban infrastructure; and (ii) guiding and supervising the SSE project component and preparing further SSE projects. Since CMDA has only a catalytic role to play, all such studies would be executed by consultants to be hired by CMDA. CMDA would be responsible for: (a) drafting of the terms of reference for the various studies to be carried out; (b) closely following and supervising the consultants' work and drawing the operational conclusions from these studies for the CMDA; (c) the establishment of a suitable methodology for carrying out the baseline surveys in the slum and refugee areas not yet covered by such surveys, the testing of the questionnaires and the actual execution and analysis of the surveys; (d) establishment of suitable monitoring guidelines and questionnaires and the administration of the actual monitoring activities; (e) the analysis, on a quarterly basis, of the monitoring results and the formulation of proposals for changes required in the SSE program; (f) preparation for the enlargement of the SSE program to cover the whole of CMDA at a later stage; and (g) provision of secretary functions for a Coordinating Committee, representing all institutions involved in execution of the SSE component.

41. The economic cell which reports to CMDA's Director of Planning, I. presently staffed by four economists (three of whom have joined only at the beginning of 1977), two sociologists and some 20 social workers, who do mostly field work. This staff strength appears adequate for the time being since all studies are to be executed by consultants. However, to ensure high quality work and coordination of the cell's activities with the rather complex, ongoing planning activities in West Bengal, a member of the State Planning Board or a senior staff member from the State's Development Planning Depart- ment should be part-time advisor to the Director of Planning of CMDA.

Department of Cottage and Small Scale Industries (CSSI)

42. The CSSI is the GOWB department which has prime responsibility for formulation, elaboration and execution of State Government policies for SSIs, including supervision of all the technical and financial assistance provided to SSIs and registration and statistical surveys of SSIs. The CSSI has also a technical extension service which is mainly responsible for the voluntary registration of SSIs and referral service for SSI assistance provided by government institutions. This extension service is concentrated in West Bengal's rural areas, although CSSI has eleven "investigators" working in Calcutta. The CSSI has experience with extension service, and therefore the propose'd SSE extension service (paras 30-33) would be administered by it.

43. CSSI is organized into three Directorates: Hand Loom and Textiles Industry, Cottage and Small Scale Industry, and Silk and Sericulture. At the end of 1976, the Directorate of CSSI had a total headquarters staff of about 340 in 11 divisions and a total staff of 240 in 13 regional offices, so that the administration of the additional SSE extension service would not cause any problems. - 130 -

ANTNEX 5 Part 3

The Participating Nationalized Commercial Banks

44. Four nationalized commercial banks would make the proposed loans. As an example of their finances, operations and procedures, the United Commercial Bank (UCoB) is described below.

United Commercial Bank (UCoB)

45. General. UCoB, the headquarters of which are located in Calcutta, has shown particular interest in the SSE component and has executed the survey of the tailors in Metiabruz. In 1976 it opened a bustee branch to gain experience, but it is still too early to draw any conclusions. UCoB is the fifth largest nationalized commercial bank in India with total deposits of Rs 6.23 billion as of December 1975. UCoB was created in the early 1940s by the Birla House and nationalized in 1969. Its share capital of Rs 28 million as of December 1975 is wholly owned by GOI. As of December 1975, UCoB had 824 branches in India, of which 39 in Calcutta and 9 branches abroad, and a total staff of 14,500 of whom about 20% are officers.

46. Finance. The selected indicators of UCoB's business during 1973-75 in the table below show that UCoB is financially viable:

Amount in million of Rs

1973 1974 1975

A. 1. Capital 28.0 28.0 28.0 2. Reserve Fund and other reserves 60.0 60.0 60.0 3. Deposits and other accounts 4,806.5 5,420.7 6,231.7 4. Total advances (including bills) 3,152.8 3,705.5 4,232.7 of which priority sector advances 794.0 1,140.0 1,217.2 5. Investments 1,508.6 1,497.1 1,746.8 6. Working Funds 5,413.3 6,025.1 6,847.7

B. 1. Total income 367.4 517.0 610.7 2. Total Expenditure 349.3 497.8 590.2 3. Net profit 18.1 19.2 20.5 4. Amount transferred to Government 4.6 4.7 5.1

UCoB has lower interest rates for small than for large loans (ranging from 10% per annum for loans up to Rs 10,000 to 16% per annum for loans over Rs 500,000), which is in line with GOI's policy of support of small scale enterprises.

47. UCoB's Calcutta Operations and Organization. As of December 1976, UCoB had lines of credit totalling Rs 1.2 billion (US$140 million) outstanding in Calcutta and Howrah. Ninety eight percent of this credit was for industry including 11% for small-scale industry. Thus, the proposed credit component would be small compared to UCoB's Calcutta operations and UCoB - 131 - ANNEX 5 Part 3 could easily handle it. UCoB has a development cell which would be in charge of supervising the execution of the proposed credit component. Presently, UCoB has about 10 branches which are located among the target group, so that it does not need to open further branches for execution of the credit component. At the moment, no particular branch staff is allocated for making small loans, and the existing staff could handle the additional loan volume initially. However, UCoB would hire one additional development officer for each additional 400 to 500 accounts.

48. Policies and Procedures for Small-Scale Enterprises. UCoB's loan applications cover all major aspects of the investment proposals. In con- sidering loans to small-scale enterprises, cash flow considerations have priority over security considerations. The main criteria for making a loan are: (a) the honesty and integrity of the borrower and his business experience; (b) sufficiency of anticipated earnings after allowances for living expenditures and loan installments; (c) approval of the technical feasibility by the Small Industry Services Institute (SISI) for loans above Rs 25,000; l/ (d) financial viability and employment orientation, and (e) assured market for the product. UCoB has developed project profiles for 29 small scale enterprise schemes which cover as varied activities as pig rearing, fruit vendors, grocery shops, cobblers, hair dressing saloons, etc. This facilitates UCoB's appraisals.

49. The loans are secured by hypothecation of assets and are guaran- teed under the Credit Guarantee Scheme of the Reserve Bank of India. UCoB makes disbursements to the extent possible directly to the supplier, and bank officials periodically visit the borrowers' site, to assure proper stock registers, so that the drawing power on the credit line can be controlled.

50. Conclusions, UCoB is a financially sound, nationalized, commercial bank, which has experience in making small business loans. Its procedures for small business loans are adequate.

Kalikata Bustee Pragati Sangstha (KBPS)

51. General, KBPS (Calcutta Bustee Improvement Association) was created in 1970 to coordinate the numerous social welfare organizations operating in Calcutta. It has close links with CMDA which it complements through provision of social services in Calcutta's slums. KBPS is a feder- ation of ten social welfare organizations with a total staff of about 100. The participation of the KBPS in the execution of the SSE component is essential because their social workers have the trust of the bustee population and can therefore establish a close link between them and the extension workers and the commercial banks' officers.

1/ Not applicable under the SSE project component, since maximum loan would be Rs 20,000. - 132 -

ANNEX 5 Part 3

Coordination

54. A coordination and monitoring committee with representatives of CSSI, UCoB, UBI, and KBPS chaired by CMDA would be created to ensure close cooperationof all institutionsinvolved in execution of the SSE component. The committeewould convene every two months after March 1978 to (i) discuss problems and progress of the credit scheme; (ii) to discuss TORs and draft studies on individualindustrial subsectors selected for assistance;and (iii) to discuss and decide on further priority sectors to be studied and assisted. Table 1

Cost of the Technical Assistance Component for Small Scale Enterprises

US$ Z:tension Service (to be paid by CSSI as part Rs million equivalent of recurrent expenditures). (000)

S .?lariesaverage Rs 700 per month per extension worker x 20 workers x 36 months. 0.504

C-fices and equipment estimated at 100% of the - salaries: 0.504 1.008 117

Studies, Surveys and Monitoring

1. Study of the potential and the locational considerations for SSE development in CMD - five man-years at Rs 7,000 per man-month. 1/ 0.420

2. Industrial branch studies of particuhar importance to CMD. 0.365

3. Base-line surveys of the slum population in the CMD; population to be surveyed 4.5 million approximately; estimated investigator input: 315 man-months at Rs 500 per month plus office supplies etc. at Rs 135 per man-month. 0.200

4O Monitoring of 4,800 expected borrowers spread over three years with monthly visits at Rs 2 per visit. 0.345

5. Two visits of expatriate consultant for establishment and testing of survey and monitoring forms and for analysis of the results. 0.180

Total Cost 1.510 175.7

1/ This includes all secretarial and research assistance, travel, office supplies, etc. - 133 - ANNEX 6

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Municipal and Anchal Development

Introduction

1. The local government institutional framework in the CMD, excluding Calcutta Corporation, consists of 34 municipalities, 61 non-municipal urban areas and 500 semi-rural units. The latter 561 units are grouped for local government purposes into 154 non-municipal areas known as "anchals." Anchals are the lowest unit in the hierarchy of local self-government and their respective jurisdictions comprise 10 to 15 villages in each anchal. The anchals are locally governed by elected bodies called 'panchayats' (committees), headed by a 'Pradhan' (chairman). The anchals perform municipal functions in non-municipal areas, have power to impose and collect taxes and fees in their respective jurisdictions, and their functions are regulated by the West Bengal Panchayat Act of 1956.

2. As of 1971, nearly 4.6 million people out of a total of 8.3 million in the CMD were in the 34 municipalities and 154 non-municipal anchals outside the twin cities of Calcutta and Howrah. Of this, the population within the 34 municipalities stood at about 2.88 million on the east bank and 0.78 million on the west bank. The average population growth rates during 1961/71 ranged between 10% and 66% in the municipal areas and between 47% and 81% in non- municipal and rural areas. The average densities in the municipal areas ranged between 1,700 and 27,000 persons per sq km . The large growth in the municipal and fringe areas in the CMD, particularly around the metro center and on the east bank, was mainly attributable to the strong desire of the people priced out of the inner city to remain as near to it as possible or at locations with easy access to the inner city. This overstrained not only the metropolitan transportation system but also the already deficient and almost non-existent civic services in municipal and anchal areas.

3. Under the Fourth Five-Year Plan, CMDA investments, which empha- sized trunk facilities for transportation, water supply, sewerage and drainage, were confined largely to the metro core area of the CMDA. Except for the fringe area water supply schemes, very few individual CMDA projects were directly addressed to the population of the municipal and non-municipal areas. Tangible direct benefits for these people are not likely to be more than marginal until appropriate linkages are made to the trunk infrastructure.

4. The CMDA's response to this was to formulate in 1970 the Municipal and Anchal Development Program which has been mainly concerned with the accessibility needs of the communities in these outlying areas. The first - 134 -

ANNEX6

improvementsin the anchal areas were mainly for roads, providing linkages with railway stations, hospitals, schools and other parts of the road network, and in the municipalities,for improvementof municipal roads and drains. During the last three years of the Fourth Plan period and in the first two years of the Fifth Plan period over 1,500 km of roads have been provided, together with ancillary drainage works, at a cost of Rs 9.11 crores.

Cost Estimates

5. The estimated cost of this component is Rs 474 lakhs 1/ and represents the estimated cost of undertakingwork in municipalitiesand in a number of anchals not yet covered by the program. This will conclude by March 31, 1982 the first phase of the program and by that time some work will have been undertaken in each of the 154 anchals.

6. Cost estimates for anchals are prepared after: (a) a formal request has been received from a pradhan; (b) the proposals have been checked against the selection criteria (para 8-10); and (c) the site has been inspected by one of CMDA zonal engineeringstaff.

Criteria for Selection of Anchal Road Improvements

7. The following broad guidelines will be followed for selection and preparation of schemes for improvementsof anchal roads within the CMD:

(a) anchals not yet covered by any road improvement schemes will be given preference, any other road improvementsshould rationalize earlier choices, e.g. providing linkages where gaps exist;

(b) anchal roads should serve as links with major roads, railway stations,hospitals, health centers, schools, markets and similar nodes;

(d) unless it is an inter-anchalroad, individual road schemes within an anchal shall not be more than 3 km long, or cost more than Rs 5 lakhs. In the case of inter-anchalroads, costs shall be prorated between the anchals served;

(e) no land acquisition cost shall be included in the scheme for improvementof anchal roads. Should land be required for improvementsof bends, sharp curves or marginal widening of the

1/ Including contingenciesand design costs. - 135 -

ANNEX 6

carriageways, this should be arranged by either acquisition or gift by the local people at the instance and initiative of the anchal pradhan and should be a condition precedent for undertaking the scheme by the CMDA;

(f) inter-anchal roads with future potential for being developed as a component of a primary or secondary road network system, requiring improvements in geometrics, carriageway, etc. and involving land acquisition, should after identification be subjected to a traffic analysis by the CMDA Planning Directorate and given a priority rating which indicates likely construction phasing and financing;

(g) anchal roads, which under existing conditions would not permit having an improved carriageway width of at least two meters, should not be considered for inclusion in the program; and

(h) anchal roads which are not likely to develop heavy vehicular traffic in the foreseeable future may be provided in the first instance with a bitu- minous stabilizing coat laid on a waterbound base course. This will reduce initial cost without impairing functional utility.

Criteria for Selection of Municipal Roads, Water Supply, Drainage and Sanitation

8. The following guidelines will be followed for selection and preparation of schemes for improvement of municipal roads and rains (outside Calcutta and Howrah) in the CMD:

(a) schemes which could not be taken up and/or completed in earlier phases either because of shortage of funds or local circumstances should be considered for early inclusion in the next phase of the program. These cases would mainly constitute missing links, abandoned works, important communication links not originally considered, etc.; and

(b) inter-municipal roads linking up railway stations and major highways should be considered by CMDA on the Authority's initiative, if not sponsored by one of the concerned municipalities. The same would apply to inter-municipal roads. The priorities, phasing and financing arrangements of such schemes shall be determined by the CMDA. - 136 -

ANNEX 6

Areas Bordering East Calcutta and West Howrah

9. Notwithstanding the foregoing, in order to complement the area development schemes at East Calcutta and West Howrah it is proposed to upgrade the adjoining unserviced areas through the municipal and anchal program.

Operation and Maintenance

10. The upkeep and maintenance of the improved roads and drains will be the responsibility of the municipalities, anchals and panchayats. The water supply and sanitation facilities will become the responsibility of CMWSA for operation and maintenance.

Implementation

11. Implementation of anchal road schemes are reviewed and supervised by the CMDA zonal engineers from the Bustee Improvement and Municipal and Anchal Development Directorate who process the schemes for approval by CM1A, execute the contracts and render accounts. The municipalities, however, generally possess the necessary technical expertise to prepare estimates and plans and to implement them. After approval by CMDA, the municipalities enter into contractual commitments and proceed with the work.

12. The overall control of the program in regard to policies, guidelines, fund allocations, and operational procedures is exercised by the CMDA through a Municipal and Anchal Development Committee set up by the Authority comprising two of its members (representing the CMD municipalities), the Secretary and the Technical Adviser, CMDA.

13. The development needs in the municipal and anchal areas go beyond the limited program proposed to be implemented in the period up to 1982, particularly since these areas are expected to facilitate future urban expansion in the CND. Assurances therefore were obtained at negotiations that GOWB will require the Department of Municipal Services and CMDA to provide by March 31, 1980 a second-phase development plan for the 154 anchals in CMD and that this development plan would contain, inter alia, proposals for institutional reform, boundary adjustments, physical and economic planning, employment generation and local taxation for the period 1981-1986. - 137 -

ANNEX 7

INDIA

SECOND CALCUTTA URBAN DEVELOPMENTPROJECT

Traffic and TransportationComponent

1. The Traffic and Transportationcomponent aims to:

(a) facilitatethe movement of all modes of traffic along existing corridors in the central area of the CMD with a minimum of expendituresand road works; and

(b) increase the level of economic activity in the CMD by building certain missing links and opening up new corridors.

2. The component consists of:

(a) implementationof a Traffic Operation and Management Improvementand Road Repair Program in selected areas of the CMD, by providing:

(i) traffic operation improvementson over 140 km of roads and footways;

(ii) traffic engineeringand control equipment;and

(iii) road and footpath maintenance equipment for the Calcutta Corporation;

(b) upgrading, widening and rationalizationof three roads in the Calcutta Corporation and the Howrah Municipalityareas;

(d) reorganizationof a taxi and minibus terminal at the Howrah Railway Station; and

(e) constructionof three major roads to provide connectionsto the Second Hooghly River Bridge under constructionat Princep Ghat, and to open up new developmentsat Kalyani, West Howrah and East Calcutta. - 138 -

ANNEX 7

Traffic Operation and Management Improvement, Road Repair and Street Lighting Program

3. In the 1966 Basic Development Plan, it was pointed out that the capacity of the existing street system in Calcutta could be expanded by at least 25% by modernizing traffic operations. Over the years, various traffic engineering measures have been proposed on an ad hoc basis, mainly by the police in view of their experience with traffic enforcement, and implemented without adequate technical analysis. In 1976, however,'CMDA established a Traffic Engineering Cell to plan and design priority traffic engineering schemes in the CMD on a systematic basis. This cell, assisted by foreign and local consultants' services financed under the project, will carry out a comprehensive four-year design program and monitor traffic engineering schemes during implementation. The project would provide funding of works, material and equipment for such schemes, including intersection improvements, guard rails, street lighting and traffic signals. Four schemes are already under preparation by the Traffic Engineering Cell and experience gained under these will be applied to future schemes.

4. The present condition of roads and footways in heavy traffic areas is such that road markings will not be readily visible on the road surface and to overcome this, the project provides for bringing up road surfaces and footways to appropriate standards as the traffic engineering works are being implemented.

5. In the past, maintenance and repair of roads in Calcutta has suffered from inadequate organization and scarcity of funds. Only about 5% of some 3,200 lane-kilometers of classified roads in the city were maintained annually by CC, as against a desirable goal of 20%. In 1976, however, GOWB decided to establish a separate Roads Wing Department in the Corporation (para 28) and arranged for supplemental funds. 1/ Over the next three years, this Department will implement a program aimed at 20% annual maintenance/ repair coverage of city streets by optimizing existing manpower and acquiring additional plant and equipment (Table 4).

6. Traffic control in the CC area and in the rest of CMD, is the responsibility of the Calcutta Police and the State Police, respectively (paras 23 through 25 below). The project provides for additional radio equipment and motorcycles, jeeps and vans to assist in police mobility, and equipment to assist the police in regulating speeds, controlling traffic in emergencies, and analyzing accidents as they occur. This supply of additional equipment will also enable centralization of radio control of police covering the whole of CMD (Table 3).

7. The cost breakdown for the Traffic Operation Improvement Schemes is detailed in Table 1 (except for the technical assistance component, which is detailed in Annex 8).

1/ 75% of a recently introduced surcharge on the Motor Vehicle Tax will be made available to CC; amounting to Rs 1.65 crores in 1978-79, the first full year of operation. - 139 - ANNEX 7

Road Improvement Projects

8. There are parts of the road networks in the already developed urban areas of Calcutta and Howrah where gaps impair the operation of the network as a whole and where considerable advantage can be obtained by bypassing some particularly difficult points. Similarly, there are some bottlenecks which need improvement so that the road corridors of which they form a part will operate to their full efficiency. Finally, some roads are unsatisfactory structurally and need rebuilding to carry out their design purpose.

9. The following road improvement schemes are proposed under the project (see Map IBRD 12874):

(a) Foreshore Road (Howrah). This existing 4.0 km road serves as a bypass for the main shopping street (Grand Trunk Road), as an industrial road to a steel stockyard and as the link between two railway stations on different lines. The project allows for temporary reconstruction of the road so that it can function effectively, but in the long term it is proposed to move the railway tracks to avoid the existing level crossings;

(b) Makardah Road (Howrah). This 5.0 km road is one of the most important east-west arterial roads on the west bank of the CMD. Widening the existing road to 30 feet (9.14 meters) in the first phase will accommodate expected future traffic growth due to development for the West Howrah Township; and

(c) Manicktala Main Road Extension (Calcutta). This 1.0 km road is also an important connection from the Salt Lake Develop- ment to the City Center.

Flyover at Sealdah Station (Calcutta)

10. The Sealdah Railway Station handles about 750,000 passengers per day, most of whom cross APC Roy Road which is the ring road for the center of Calcutta. In order to segregate pedestrians from fast traffic, this scheme provides for such traffic to be taken over a flyover or slight "hump" under which a substantial number of pedestrians can walk. Future development to the west will be arranged by CMDA to accommodate pedestrians' movements for better use of the space under the hump.

Terminal

11. At Howrah Stationa, a substantial complex of bus stands and pedes-- trian subways has been constructed to eliminate traffic conflicts and to improve the traffic capacity of the west approach to the Howrah Bridge. The project would rationalize the use of the available space and would therefore be effective in contributing to the capacity of the road network in the Howrah Bridge area. - 140 -

ANNEX 7

New Road Construction

12. The project includes three new road facilities:

(a) the Eastern Metropolitan (EM) Bypass with two connectors;

(b) the Kona Expressway; and

They are important links for improving movements in the CMD as a whole, for connecting up a new river crossing under construction, and for opening up additional areas for development. The ES Bypass and B-K Expressway form part of a larger road sys em linking the eastern part of the CMD with its hinterland in the north, the west and the south.

(a) the Eastern MetrpIt.*an (EM) Bypass. The two-lane sections proposed under the project are:

,' Lpart I, from Salt Lake City to the Park Circus Connector, and also connecting with Ultadanga M4ain Road, Manicktala Main Road, Narkeldanga Main Road, and Beliaghata Main Road;

xii) part TI, from the Park Circus Connector to the Rtashbehari Connector (total length of part I and part II, 10.8 km);

(iii) construction of the 4.2 km Park Circus Connector; and

(iv) construction of the 2.8 km Rashbehari Connector.

This system will support economic development in the area, including the East Calcutta Area Development which forms part of the project (Annex 1). It will also provide much needed relief to the CMD core area from through traffic. Construction works on parts I and II have been started by CMDA and CIT, respectively;

'b' Kona Expressway. To the south, a new bridge across the river is being constructed at Princep Ghat. The Kona Expressway is planned to connect it to National Highway 6. This connection will also lead to further development of Howrah along the new road, and to the development of a market and truck terminal at the intersection of this road with National Highway 6 in West Howrah. The Kona Expressway will be built to only two-lane standard for the tim.e being; and - 141 -

ANNEX 7

(c) Barrackpore-Kalyani (B-K) Expressway. At Kalyani, located in the most northern part of the CMD on the eastern bank, there is a new township with a well laid-out road system, good utilities, good community facilities and some industries. The modern infrastructure available can support a population of at least 140,000, but the current population is only about 18,000. A major reason for the present under-utilization of this investment is the lack of an adequate road link from Kalyani to the CMD core area, and to the west bank of the river. The present north-south road on the eastern bank of the river is winding through a number of town centers, where local traffic and activities make full use of the extremely narrow road, preventing effective through traffic to Kalyani. The new 25.8 km, two-lane B-K Expressway under the project, located east of the present road (see Map IBRD 12874), will connect Kalyani with Barrackpore, bypassing densely populated areas, and providing additional road capacity for new developments. Construction works by CMDA have started on 20 km of the road.

D. Project Organization

13. The responsibility for execution of the Traffic and Transportation component rests primarily with CMDA. Most of the road works will be directly implemented by its Traffic and Transportation Directorate, but some sub-components will be implemented under CMDA's control, by CIT and HIT. The CC and the State Police will be responsible for some aspects of the Traffic Operation Improvement Scheme.

14. Implementation responsibilities are shown in Table 1. CIT will execute works on roads which they have already planned or which are adjacent to roads they have built. These include the Rashbehari Connector and the section of the Eastern Metropolitan Bypass immediately adjacent to it. Similarly, HIT will execute the Makardah Road in Howrah.

15. Responsibility for implementation of the Traffic Operation Man- agement Scheme will be shared between the CMDA Traffic and Transportation Department, the police forces and CC. Traffic engineering works will be executed by CMDA (assisted by consultants) through its Traffic Engineering Cell. Resurfacing of selected roads and footways under this component will be the responsibility of CC. The police will continue to be responsible for provision of road markings and signs, and will be provided with additional equipment which will increase their efficiency in traffic control. The Calcutta Police will coordinate traffic control activities with strengthened police organization outside its jurisdiction, and one radio control station for traffic will be established. CMDA will take responsibility for allocation of police equipment under the project between the police forces concerned, and will also implement the street lighting program. - 142 -

ANNEX 7

CMDA Traffic and Transportation Directorate

16. This Directorate is responsible for planning, design and execution of road projects in designated areas within the CMD. Headed by a Director, the T&TD has two Traffic and Transportation circles and one Project Planning and Design Circle, each headed by an additional director. In addition, the Department has functions for programming, finance and accounts, and administration. The Traffic and Transportation circles, decentralized within CMD, comprise seven construction divisions and one electrical division. The Project Planning and Design Circle includes divisions for design, surveys, quantity control and control of plant and equipment. There are 22 staff at Executive Engineer grade and above; the total engineering staff is about 180.

17. The Planning and Design Circle uses local consultants to strengthen its capacity, as needed. Similarly, the T&TD relies partly on other implementing agencies for execution of works. The combined annual execution capacity of the Directorate, PWD, CIT and HIT in the sector is about Rs 12.5 crores (US$14.5 million), which is sufficient to cope with ongoing road works in the CMDA program, whether included under the project or not. Contractors are normally used for road works; T&TD has its own park of construction equipment (rollers, paving equipment) which is partly leased to contractors, and partly used by force account, especially for paving works.

The CMDA Traffic Engineering Cell (TEC)

18. Planning of Traffic Operations is the responsibility of the TEC of CMDA. Headed by a Deputy Director (Traffic and Transportation) in the CMDA Planning Directorate, he has at present a staff of four assistant transportation planners, each responsible for a limited number of traffic engineering schemes, assisted by local consultants for traffic surveys and engineering drawing. This group will form the nucleus of the TEC being formed in by CMDA, with a staff of 20 assistant planners. When fully established, TEC with their consultants will be capable of undertaking all the necessary traffic engineering works, including necessary consultation with Police and other authorities to ensure that schemes designed within the project take account of needs of all groups of road users.

Calcutta Corporation

19. Until recently, road improvement and maintenance in the Corpora- tion's jurisdiction was under the direction of its Chief Engineer, also responsible for maintaining other services in the area. About 20 maintenance crews at borough level carried out minor repairs on some 3,200 lane- kms of roads, supported by deliveries of hot-mixed asphalt from one plant serving the whole of CC. Inadequate planning and lack of funding, however, resulted in poor maintenance standards; only 5% of the road system was attended to annually against a desired goal of 20%. The GOWB, realizing the need for improved road maintenance in the Corporation area, decided in September 1976, to establish a separate Roads Wing in CC, and to establish a separate road maintenance fund. Headed by a Chief Engineer (Roads), the - 143 -

ANNEX 7

Roads Wing will consist of four departments, for Repair and Maintenance; Con- struction and Reconstruction; Mechanical Plant and Stores; and Laboratories, respectively, each under a senior engineer. At full strength, the Roads Wing will employ about 80 engineers and 1,100 labor force.

20. In its first three-year period, the Road Wing's aim will be to reach the annual 20 percent coverage of road repairs and maintenance, focusing on arterial roads covering public transport, and other heavy traffic roads with acceptable drainage. To achieve this objective, the Road Wings will optimize the output of existing manpower by procuring adequate stocks of materials, modernizing the existing hot-mix asphalt plant, and acquiring additional plant for mobile road repair units. The project provides for additional investments in such plant and equipment (Table 4).

Calcutta Improvement Trust (CIT)

21. The jurisdiction of the CIT, created in 1911, covers the CC area. It is organized as a semi-autonomous body and operated by a Board of Trustees. CIT is responsible for planning, design and execution of general improvement schemes, housing accommodation schemes, rehousing schemes and street works. Since the formation of CMDA, CIT has acted as executing agency for, inter alia, selected street works. As CMDA has expanded its T&T Department, however, CIT's participation in road construction works has been reduced. CIT is adequately staffed and equipped to execute the works assigned to it under the proposed project.

Howrah Improvement Trust (HIT)

22. The jurisdiction of HIT, created in 1956, coincides with that of Howrah Municipality. Established along the lines of CIT, HIT has among its duties development and improvement of streets. Acting as executing agency for CMDA, HIT is capable of executing the works assigned to it under the proposed project.

Calcutta Police

23. The Calcutta Police, under the Commissioner of Police, has an area of responsibility roughly the same as that of CC. Responsible for administration of traffic, they have a Traffic Department of 1,400 under a Deputy Assistant Commissioner (Traffic). Organized into a Headquarters and seven "guards" defined geographically, the majority of the Traffic Department Police force of about 1,400 are deployed on shift work controlling particulcar junctions and other traffic points. This force would be more effective if more of its members were centralized and made more mobile. Vehicles, and communication and other equipment included under the project, would assist the Police in this respect. It has adequate facilities for repair and maintenance of additional vehicles proposed under the project.

24. The Calcutta Police are also responsible for making and installing road markings and traffic signs, and for installing and maintaining traffic - 144 -

ANNEX 7 signals, using the PWD as executing agency. These arrangements in the Corpo- ration area are not satisfactory. Assurances have been given by GOWB that adequate funding for this activity will be provided, and that CMDA will be the executing agency on behalf of the Traffic Police Department.

State Police

25. Outside the Calcutta Police Area, police administration is under the Inspector General of Police, West Bengal. Traffic control is done by the general police who report to the three Superintendents of Police in Howrah, 24 Parganas and Hooghly Districts. This organization is not adequate for coping with the current spreading of traffic problems outside the Calcutta Corporation area. GOWB has decided that:

(a) traffic control in the CMD outside the jurisdiction of the Calcutta Police will be appropriately staffed and adequately organized under the Deputy Inspector General (Traffic); and

(b) traffic control in the whole CMD area will be centralized to a single room using extensive radio facilities.

The project would provide vehicles and other equipment to assist the Deputy Inspector General (Traffic) to discharge his duties.

Maintenance of Roads in the CMD

26. CMDA has no responsibility for maintenance of roads in the CMD. Following completion of a road, its maintenance is normally the responsibility of the contractor for a period of time, as stipulated in the contract. Thereafter, the road is handed over to the agency responsible for road maintenance in the actual area.

27. In the CC area, road maintenance is the responsibility of Calcutta Corporation (see para 19 above), except in the heart of the city, where specified roads are maintained by the GOWB Public Works Department (PWD). In the rest of the CMD, responsibility for maintaining close to 20,000 km of roads is shared by the Public Works (Roads) Department (PWD-Roads), PWD and local municipal bodies. PWD and PWD-Roads are two separate agencies under the GOWB. PWD-Roads are responsible for State and National Highways, PWD for major district roads, other district roads and village roads. The local municipal bodies are responsible for roads within their jurisdiction. As further described in Annex 9, maintenance funds are provided by GOI for national highways, and by GOWB for all other roads in the CMD. Inadequate funding, and in the case of constituent local bodies, inadequate staffing, has led to inferior maintenance standards in most areas of the district. Assurances were obtained during negotiations that GOWB will provide local bodies in the CMD with sufficient funds to adequately maintain existing local government services and assets provided by CMDA investments and transferred to the local bodies during the project period. - 145 - ANNEX 7

B. Economic Evaluation

28. The measurement of benefits of the different projects are derived from one or more of the following:

(a) savings in vehicle operating costs resulting from improved traffic flows;

(b) time savings of car, taxi and bus passengers, motorcyclists, and truck, van and tempo operators; and

29. Vehicle operating costs were assumed to vary according to speed. Value of time has been taken at one-third the average wage of each class of beneficiary as follows:

Mode of Average 1/3 of Beneficiary Monthly Income Hourly Wage (Rupees) (Rupees)

car/taxi 1,200 2.00 truck 1,500 1.40 bus 300 .50 motorcycle 500 .85 van/tempo 1,000 .95

Goods vehicles are assumed to operate 360 days and other fast vehicles 300 days/year. All costs include costs of land acquisition, civil works, relocation works, equipment and physical contingencies. The traffic volume for the new connectors have been assumed depending on the overall development, the corridor network and the minimum travel path. Traffic figures for road redevelopment and widening schemes were projected from 1976 survey data collected over a 12-hour period.

Road Redevelopment and Widening Schemes

30. The road improvement schemes are designed to improve the overall transportation system in the metropolis and relieve congestion in important corridors by widening existing roads within the right-of-way, provide missing links in the existing network, and remove existing bottlenecks. Footpath width will vary for each project, but six feet will be the minimum acceptable width. Provision for parking is included on one or both sides of the carriageway of several of the projects. Benefits of these schemes are derived from travel time savings and savings in vehicle operating costs of traffic diverted from their present routes to the improved roads. The average economic rate of return for the three projects (5% of total cost) is estimated to be 17% if the value of time is assumed at 1/3 the average hourly wage rate, and 14% if no value is attached to time savings of individuals. - 146 -

ANNEX 7

New Road Construction

31. These new roads representing 60% of total costs are required to connect up the new areas of development and the new river crossings, and will form, along with existing arterials, a major ring system of the metropolitan core. Benefits of these new highways are derived from operating cost and travel time savings of the traffic generated by new areas of development, traffic bypassing existing north-south corridors, and local traffic resulting from new subcenter and industrial development along the corridors. Additional benefits will result from further development in these new areas and considerable increases in land values along the routes. The economic rates of return for the three subprojects Barrackpore-Kalyani Expressway, (including approach roads and Kalyani Bridge to be financed by GOWB); Eastern Metropolitan Bypass, including Park Circus and Rashbehari Avenue Connectors; and Kona Expressway are 15%, 22% and 13% respectively, if value of time savings is included, and 12%, 20% and 11% if no value is attached to time savings.

32. Benefits of the B.K. Expressway are derived from savings in vehicular operating costs and time savings resulting from improved traffic flows of traffic diverted from their present routes and local and transriver generated traffic. Additional benefits will result from increased vehicle speeds on the existing parallel road, which is presently characterized by extremely heavy traffic with segments that narrow to four meters, mixed traffic and "stop and go" conditions. Widening of this existing road would involve relocation of approximately 30,000 people; the two-lane expressway represents the least cost solution. Costs included in the analysis include costs of the expressway, Kalyani Bridge and its approach roads, and maintenance costs as per GOI standards. The rate of return is estimated at 15% if time savings to passengers are valued and 12% if no value is attached to time savings.

33. Benefits of the E.M. Bypass and the Kona Expressway are derived from operating cost and travel time savings of the traffic generated by new areas of development, traffic by-passing existing north-south corridors, and the local traffic resulting from new sub-center and industrial development along the corridors. These highways will stimulate additional development of the surrounding areas and considerably increase land values along the routes. Costs for Kona Expressway include an estimate for construction of the Second Hooghly Bridge. These highways represent the least cost solution; their respective rates of return are 22% and 13% if time savings are valued and 20% and 11% if no value is attached to time savings.

Sealdah Hump Proposal

34. The Sealdah Hump proposal will segregate pedestrians, slow-moving and other traffic on the traffic corridor adjacent to Sealdah Station, which accommodates about 750,000 passengers each day. Separation of motorized traffic and pedestrians will improve pedestrian access to the station, speed up traffic flows and result in fewer accidents. The total investment represents about 2% of the total cost of the roads component. - 147 - ANNEX 7

Howrah Station Terminal

35. By eliminating the haphazard location and parking of buses, the proposed terminal will result in a smoother and more uniform operation of buses. Better traffic circulation will result without the use of the adjacent arterials for turning and parking. The project represent 1% of the total cost.

36. The portions of the roads and traffic component for which it has been possible to quantify the benefits account for about 66% of the total cost of the component. The weighted average rate of return for these components is estimated to be 18% if the time savings to individuals are applied at 1/3 their average hourly wage rate, and 16% if such time savings are ignored. INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Cost Estimates of Roads and Traffic Sector (Rs Lakhs)

Estimated Expenditures from Novembern 12977/ Goods and Equipment Expenditures Execution Civil - Relocation Traffic - Taxes, prior to Description Responsibility Land Works Works Signals Other etc. TotalL4 November 1, 1977 Notes I. Traffic Operation and Management Improvement. and Road Repair Program See Table 2 - 214.45 - 54.00 253.25 69.90 591.60 Detailed estimates in Table 2 TOTAL I - 214.45 - 54.00 253.25 69.90 591.60 - II. Road Improvement Projects

(a) Foreshore Road (Howrah) CMDA 1.00 25.40 - 2.46 0.94 29.80 - (b) Makardah Road (Howrah) HIT 4.50 36.70 - 3.80 1.50 46.50 - (c) Manicktala Road Extension (Calcutta) CMDA 8.00 30.14 4.05 - 3.21 1.20 46.60 - (d) Sealdah Station (Calcutta) CMDA - 118.00 5.00 - 7.30 4.80 135.10 - X

TOTAL II 13.50 210.24 9.05 - 16.77 8.44 258.00 III. Terminals

Howrah Station CMDA - 16.69 - - 3.00 1.11 20.80

TOTAL III - 16.69 - - 3.00 1.11 20.80 IV. New Road Facilities

(a) Eastern Metropolitan Bypass CMDA/CIT 286.00 351.00 64.00 - 57.65 17.35 7 7 6 . 00L3 144.00 (b) Kona Expressway CMDA 153.00 217.40 - 30.00 8.60 409.00 57.00 (c) Barrackpore Kalyani Expressway CMDA 137.00 287.60 - - 34.77 11.23 470.601- 285.00

TOTAL IV 576.00 856.00 64.00 - 122.42 37.18 1,655.60 486.00 V. Design Consultancy CMDA - - - 90.00 - 90.00 _

TOTAL 589.50 1.297.38 73.05 54.00 485.44 116.63 2 616.00 486.00

LI Including cost of materials. 12 Cost of related works included under civil works. /3 Including estimated value of current contracts on November 1, 1977: (a) for Eastern Metropolitan Bypass - RS 71.00 Lakhs. (b) for Barrackpore Kalyani Expressway - Rs 45.00 Lakhs. /4 Net of contingencies. INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Traffic Operation and Management Improvement, Road Repair and Street Lighting Program

Detailed Cost Estimate (Rs Lakhs)

Execution Civil/1 Traffic-2 Taxes, Description Responsibility Works Signals Other etc. Total Notes

Traffic Engineering & Management Improvement Schemes CMDA/Police/CC

Lane Markings 1.40 - - 0.15 1.55 Traffic Signals 13.50 54.00 - 6.80 74.30 Traffic Signs 1.60 - 3.25 0.50 5.35 Guard Rails 20.00 - 80.00 10.00 110.00 Intersection Improvements 46.75 - - 4.70 51.45 Realignment & Resurfacing of Roads & Footpaths 91.00 - - 9.10 100.10 Road Widening 39.20 - - 3.95 43.15 Bus Stop Lanes 1.00 - - 0.10 1.10 Police Equipment - - 90.00 21.60 111.60 See details, Table 3.

Subtotal 214.45 54.00 173.25 56.90 498.60

Plant/Equipment for CC Roads Wing CMDA/CC - - 80.00 13.00 93.00 See details, Table 4.

GRAND TOTAL 214.45 54.00 253.25 69.90 591.60

t,Bz /1 Including cost of materials. /2 Cost of related works included under civil works. INDIA

SECOND CALCUTTA URBAN DEVELOPMENTPROJECT

Traffic Operation Improvement - Police Equipment (Rs lakhs)

Volume /1 Calcutta State Description Police Police Equipment Taxes Total

Heavy Trucks/Buses 7:1 5:- 11.15 0.80 11.95 Light Trucks/Mini Buses 10:8 6:- 16.20 1.17 17.37 Light Cars 27 10 16.40 1.19 17.59 Motorcycles 42 10 5.60 0.40 6.00 Heavy Duty Wreckers 8 1 14.00 8.12 22.12 Radio Communication Equipment 75% 25% 6.30 0.58 6.88 Radar Equipment - - 2.70 1.16 3.86 Camera Equipment 75% 25% 0.90 0.07 0.97 CCTV-System /2 1 - 13.50 7.83 21.33 Miscellaneous /3 75% 25% 3.25 0.28 3.53

GRAND TOTAL - - 90.00 21.60 111.60

/1 Distribution between Calcutta and State Police as indicated is indicative only. /2 Closed circuit TV system, including camera, tower, cables, airconditioning units, etc. (a) Esplanade Crossing (b) Chowringhee Road - S.N. Banerjee Road (Dorina Crossing) subject to review by (c) Government Place East - Waterloo Street Traffic Engineering Consultants Government Place North (d) BBD Bag South - East Corner (e) Park Street - Chowring Kee Road X /3 Miscellaneous includes: road marking machines, road W < measuring machine, Doppler speed trap, portable lights, etc. - 151 -

ANNEX 7 Table4

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Plant and Equipment for Calcutta Corporation'sRoad Wing (Rs Lakhs)

Description Equipment Taxes Total

Renovation of existing bitumen batching plant, Palmer's Bazaar 10.00 2.34 12.34

Provision of two new plants, at Tallah and Alipore 20.00 4.81 24.81

Support equipment for above plants /1 5.00 0.65 5.65

Equipment for 5 mobile units /2 40.00 2.60 42.60

Heating planning machine, one unit 4.00 2.08 6.08

Testing laboratorywith equipment 1.00 0.52 1.52

TOTAL 80.00 13.00 93.00

/1 Pavers, road rollers, loaders and trucks. /2 Portable mixers, pavers, tar boilers and road rollers. - 152 -

ANNEX 8

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Consulting Services, Technical Assistance and Training

Introduction

1. This annex deals with external technical assistance needed in undertaking studies on valuation, employment, accounting and management, solid wastes collection and disposal, traffic engineering and public transport. External assistance needed for design and detailing of the project is covered in the appropriate annex.

2. Technical assistance totalling over 2,038 1/ man/months and costing about Rs 2.75 crores (US$3.2 million) 2/ will be required by the following agencies:

(a) Government of West Bengal (GOWB) through its Department of Municipal Services (DMS);

(b) Calcutta Corporation (CC);

(d) Calcutta Metropolitan Development Authority (CMDA).

3. The attached Table sets out the forecast of local and foreign inputs, including man/months of consulting services. The requirements for local bodies in CMD, except CC, are included with the DMS. It is anticipated that most of the funds will be channelled through CMDA for these activities in order that this authority can maintain continuous monitoring and performance review, but the costs and any debt service resulting would be borne by beneficiary departments or authorities.

4. The cost estimates (para 19) are based on April 1977 estimates of the cost of consulting services. Local services are estimated at an average inclusive rate of Rs 7,000 per man/month and foreign services os US$7,000 per

1/ Split into 1,965 man/months local and 73 man/months foreign assistance.

2/ Including Rs 75 lakhs for training. - 153

ANNEX 8 man/month. A foreign consultant would also require about Rs 7,000 per month allowance for local accommodation and transport. This cost has also been included, where appropriate. However, where it is possible that a lower foreign rate may be possible, this has been included. No allowance has been made for bilateral assistance for some of these services, although this may be available, It is considered prudent to irnclude the full costs in the project cost statement and obtain assurances that financial provisions will be made in the CMDA investment program and the GOWB plan for the complete program.

5. The estimated cost of training requirements is Rs 75 lakhs. CMDA will engage training advisers and coordinate the training programs to be developed in CMD. The allocation of funds between the three principal authorities should be regarded as provisional until the advisory reports are available.

6, Assurances were obtained at negotiations that terms of reference for these consulting services, assistance and training will be submitted to IDA for review, and the engagement of consultants will be in accordance with IDA guidelines.

Detailed Technical Assistance

7. Central Valuation Board. The requirements of the DMS are for organization and operation of the proposed new Central Valuation Board and for training of departmental and local authorities' staffs in local government services operation, maintenance, administration and finance, including staff of an experimental local government unit. The requirements are discussed in detail in Annex 9 and will involve 155 man/months (local) and 20 man/months (foreign) consulting services.

8. Employment Program. CMDA (assisted by the GOWB Department of Cottage and Small-Scale Industries) will require 190 man/months (local) and three man/ months (foreign) consultancy assistance to undertake a demand analysis, surveys, and studies of selected industrial activities, base line studies and monitoring.

9. Accounting and Management Study for Calcutta Corporation. CC shall commission a study to be undertaken by local consultants for design and installation of accounting, stores and financial management. A total of 300 man/months local consultancy assistance will be required. The study is to be completed by March 31, 1979 with an interim report available by March 31, 1978.

10. Solid Wlastes Management Program. As stated in Annex 4, CMDA will require the services of local and foreign consultants, both in undertaking the design of the project component and in studies for the formulation of future work programs. Studies for future work programs are estimated to require 300 man/months (local) and 15 man/months (foreign) consulting services. - 154 -

ANNEX 8

11. Traffic Engineering and Management. In addition to the detailed design of traffic engineering schemes (Annex 7) it will be necessary to undertake traffic studies for establishing design parameters, formulation of a basic circulation plan, and undertake monitoring and supervision. 150 man/months of local consulting services will be required, in addition to foreign consulting services to be financed from bilateral sources.

12. Public Transport Project. A study to establish the feasibility of improving public transport will be undertaken and will require the services of 200 man/months (local) and 15 man/months (foreign) consulting services.

13. Evaluation of Strategic Plans and Area Development Planning. During the next two or three years CMDA will prepare the future urban development program, with a ten-year time horizon. This will require the evaluation of alternative development plans, and it will be necessary to establish priorities for the development of activity centers and evolve plans of new areas chosen for early development. CMDA will require 150 man/months (local) and 20 man/months (foreign) consultancy services.

14. Sewerage and Drainage Planning. A comprehensive sewerage and drainage program for CMD, consistent with funding capabilities, will be prepared as an integral part of the total urban development program. CMDA shall require the assistance of 125 man/months of local consultancy services in undertaking this work.

15. Pollution Studies. The air and water pollution studies that are currently being conducted through the National Environmental Engineering Research Institute (NEERI) (previously commissioned by CMDA), should be continued and completed and the project makes provision for 10 man/months of local consultancy services to do this.

16. Tube Wells and Ground Water Studies. The studies will assess ground water availability in the municipalities of CMD in terms of quantity and quality; survey and list tube well extractions currently taking place; identify areas where possible over exploitation is taking place; and make recommendations for remedial and other measures that should be taken. Approximately 230 man/ months of local consulting services will be required.

17. Accounting and Management Studies for CMDA. Under the first Calcutta project and in agreement with IDA, C1DA sought proposals from five firms for accounting and financial management systems (covering both design and installation) for the Authority. The successful firm has been invited to extend the contract to include a management information system with project monitoring and control. These commissions are necessary to provide CMDA's new management with: (i) a management information system (by April 1, 1979); (ii) a project appraisal system (by July 1, 1978); (iii) a project budgeting and accounting system (by April 1, 1979); and (iv) a project monitoring system (by April 30, 1978). 155 man/months of local consultancy services will be required. - 155 -

ANNEX 8

Training

18. The training program will cover requirements of: (a) local government staff under DMS; (b) Calcutta Corporation staff; and (c) CMIDAstaff. The estimated cost of Rs 75 lakhs is provisional, because no detail assessment will be possible until an expert can make an exhaustive review. The provisional figures include for consulting services, accommodation, equipment and materials, and allowances for training of staff in national and foreign centers. Assurances will be sought from GOWB at negotiations that 'i) GOWB will engage, or require the responsible authorities to engage, consultants to prepare by September 30, 1978 five-year training programs for staff of (a) Calcutta Corporation, (b) an experimental local government unit in CMD, (c) other local bodies in CMD, and (d) CMDA, and (ii) will implement, or require the responsible authorities to implement, agreed training programs in (i) from January 1, 1979.

Cost Estimates

19. The&following table shows the cost estimates for this component:

Consulting Servie... Technical Asei.tance and Tratin,

LOCAL FOREIGN TOTAL Ohof R 80500 Pan0/ Rs. L.khs 4n/ R Organization h(enthe Lolhs E ulvalent Moeth_ jai "&IOU IL500 7th Leakhe U551000

EClII OIAL ASSISTANCI CO'iSCLT#LCY

Contral Valuation Bard COWB 155 12.30 143.0 20 12.00 139.5 175 24.30 282.5 Smplay-ent Progren GOWb 190 13.30 154.7 3 1.80 21.0 193 15.10 175.7 Ascont in& and HMnaae-t CC 300 21.00 244.2 .300 .I 00 244,2 Solid Wactee Program CMDA/CC 300 21.00 244.2 15 10.50 122.1 315 31.50 366.3 Trefic E8in.eertng e Manage- t-nt Inproven.,t PrOArm 0DI/Cv 150 13.85 161.0 1.1 - . 150 13.85 161.0 Pu'blic Transport, Project Proparation CMDA 200 14.00 162.8 15 10.50 122.1 215 24.50 284.9 Evaluation of D*ve.lopent PIn 6 Ar.. DSvlop..nt PC.nninj CMDA 150 12.25 142.4 20 12.00 139.5 170 24.25 201.9 Severoge e bnaineg. Planning 0n40 125 8.0 102.3 _- - 125 8.00 102.3 Pollution Studios 0iDA 10 0.70 8.1 _ I10 D 0.70 8.1 Ground Water Studie. CHDA 230 25.00 290.7 . . 230 25.00 290.7 Acc-unting 4 Hen1es,.nt Studies ChD 155 11.00 127.9 . - _ 155 11.00 127.9 Subtotal i,i96 153.20 1,781.4 4 6 6 T6O 200.00 2,325.6

TRAINING

For local government staff 0O0Dd - 20.90 243.0 - 4.10 47.7 25.00 290.7 for CC staff CC - 15.00 174.4 - 10.00 116.3 25.00 290.7 For CKDA staff CHU - 12.50_ 145S3 12.50 45.4 0 290.7

C00D TOTAL I'l965 201.60 234.1 73 9J"% 5. Z2 q L7100

LI Financed by bilateral sourse - 156 -

ANNEX 9

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Municipal Administration and Finances in the Calcutta Metropolitan District (CMD)

Introduction

1. Local government in India is an extension of the State government function. The GOWB is responsible for framing and enacting legislation governing all local authority activities in West Bengal, and has a Department of Municipal Services (DMS) which regulates and sanctions all those activities of local bodies which by law have to be reviewed by GOWB. A second tier of authority is the District Administration, under Districts Magistrates, which intervenes between DMS and local bodies, principally in the areas of law and order, maintenance of water courses and district roads, community development, poor relief, land taxation and review of municipal matters referred by law to GOWB, e.g. budgets. CC, which provides local government services in Calcutta City area, is the only exception in the State to the District Administration system, which is replaced in Calcutta by a Muni- cipal Commissioner appointed by GOWB and responsible to DMS.

2. The CMD has been delineated as a planning region by the GOWB. It is not a single administrative unit but comprises parts of four District Administrations, 35 municipal authorities of varying size and importance, 61 non-municipal urban areas and over 500 semi-rural units. In addition, a number of federal, state and local agencies are involved in financing development activity and in operating utilities. The municipal authorities have responsibilities for re-development, operation and maintenance of most basic urban infrastructure services but their organization, management and finances are in serious disorder and their fiscal base has been eroded by adverse legislation, litigation and inefficiency to the extent that most authorities do not have adequate means of financing basic urban services for the present population at even minimal standards. Failure by local authorities to perform their functions was one of the principal causes of the virtual breakdown of public services in the CMD by 1970. In addition, local abuses in hiring and payments to employees caused excessive and unwarranted establishment costs in municipalities. The first urban project included steps to initiate municipal reforms in the CND.

Reform as Part of the First Project

3. The West Bengal Agreement of the first project (Credit 427-IN) contained institutional covenants relating to assignment of responsibilities for operation and maintenance of facilities constructed by CMDA; preparation of a financial and institutional plan to improve the performance of local bodies; - 157 -

A1iEX 9

preparation of forecasts of costs of operations and maintenance of municipal facilities in CND; and an undertaking for GOWB to meet any fiscal deficits in municipal operations to ensure adequate standards of operation and maintenance.

4. The financial and institutional plan (para 3) was prepared in September 1975 and has formed the basis for schemes by GOWB since that date, and for several of the agreements obtained as part of this second project. The major proposals of the plan were to:

(a) delink the charges for water supply and sewerage services from general property taxation and provide for their separate accounting;

'b) reform the existing system for assessment and levy of property taxes through the establishment of a central valuation organization and through modifications to the graduated slab system for levy rates;

(d) improve the performance of the municipal units through administrative changes and more purposeful control by the state government; and

(e) enlarge the tax base in the metropolitan district by bringing the existing non-municipal urban areas under adjoining municipal jurisdiction in a phased manner.

5. This plan was not fully responsive to the initial objectives which may not have been achievable in the time allowed. The plan contained no specified fiscal strategy for urban public investment and servicing in the CMD, nor any identified specific relationship between resources and needs based on ascribed functional responsibilities. The sources of funds to achieve and maintain this relationship were not identified nor the criteria defined for the devolution of funds from higher levels of government. The impact of the numerous fiscal, administrative and institutional reforms recommended was not adequately assessed and the plan was therefore viewed as a first step toward developing an effective institutional structure and viable fiscal systems for the CMD. Some proposals have been implemented while others are being reconsidered. Overall service and fiscal strategies remain to be defined because the long-term shape of local administration has yet to be resolved.

Reforms Implemented by GOWB

6. Arising from the plan proposals (para 4) a 50% surcharge on property taxes has been imposed on non-residential and commercial premises; - 158 -

ANNEX 9

municipal tax on professions,trades and salaried persons has been extended; vehicle tax is increasedby 30%; minor property tax relief have been removed and to improve collectionsoccupiers have been made liable to property tax as an alternative to owners. In addition, powers of creating posts in local bodies is now to vest in GOWB, which now exercises a strict control over salaries, emoluments,establishment expenses, retirements and re-employments after retirement,and is proposing to establish work-norms for the local government service in CMD.

Reforms in Course of Implementationby GOWB

7. Following adoption by GOWB of the Financial and InstitutionalPlan, (para 4) certain measures proposed required further examination,but most are now in the process of finalizationincluding preparation of legislation,where necessary. CC estimates that revenues notionally allocated to water supply and sewerage services presently finance about 30% of service costs. The proposal to delink water and sewerage changes from property taxes follows the GOWB decision to reform the arrangementsfor financing water and sanitation services, and provides for functional accounting for these major heads of expenditure. The CC municipal fund currently receives all receipts of the Corporation including consolidatedrate (property tax); taxes on vehicles, businesses and professions;allocations from GOWB, and subventions from GOWBo There are no separate service taxes, but limited user charges are levied, including metered water consumption. To achieve long-term financial viability of water supply and sewerage services, assurances were obtained that CC will (i) establish from April 1, 1978 a separate water supply and sewerage fund controlledby suitable financial regulations; (ii) from April 1, 1978 meet all deficits of the fund from revenues of the municipal fund; and (iii) from April 1, 1981 delink water supply and sewerage taxes from the consolidated tax and meet not less than 84% of the expenditure of the fund from such taxes and water supply and sewerage charges for fiscal year 1981/82 and thereafter.

8. As part of the first project, CMDA has commissionedstudies for completion at end-1977 to determine in CC and other local bodies in the CMD the standards and costs of satisfactoryoperation and maintenance of water supply and sewerage services and the necessary tariffs and related accounting systems to support these services. In the meantime, GOWB has removed concessional arrangementswhereby ratepayers with metered water supplies were entitled to quantities of "free water", and those with their own supplies received a re- mission of 6.25% of the consolidatedrate. The provision of privately owned tubewells is to be discouraged and consumers will be encouraged to take supplies from the municipal services, where available. Metering of water supplies will be expanded but technical problems have to be overcome. Assurances have been received that GOWB will:

(a) commission studies to be completedby March 31, 1979 to advise on regulation,and licensing if necessary, of tubewellsand use of groundwater in the CMD; - 159 -

ANNEX 9

(b) by September 1, 1978 draw up a program for metering of water connections to be implemented from April 1, 1979 through March 31, 1982; and

(c) develop proposals for institutional responsibilities for water and sewerage revenue collection in the CMD by December 31, 1978, and implement such proposals by April 1, 1980.

Property Valuation for Local Taxation Purposes

9. Properties in the CMD are presently revalued in six-year cycles. Increased revenues in the meantime, therefore, result from amendments to the valuation register and/or improved collections. Property valuation throughout India is presently based on the market rental value, which have long been depressed by rent controls imposed in 1949. A further property valuation problem lies in existing legislation which authorizes each municipal authority to assess the holdings in its area. Local pressures on assessors, and inability to retain or train adequate staff, together with adverse effects of litigation, have resulted in current valuation lists containing values which bear little resemblance to current market values. The result have been to progressively worsen the taxation base for local bodies.

10. The present system for assessment and levy of property taxes is therefore to be reformed. In 1975 a consultant reviewed GOWB proposals for reform of the existing property tax system under technical assistance provided in the first project, and following his findings GOWB proposed considerable reform of the property tax system. GOWB has decided to take over responsibilities for property assessment and a Central Valuation Board (CVB) will be established for the whole state with probably an identifiable division for the CMD. The second project contains provisions for up to 175 man/months of consulting services and training (foreign and local) to assist GOWB to establish and operate the CVB and to commence revaluation of properties in the CND, Assurances have been received that GOWB will:

(a) establish by December 31, 1978 a CVB with an operational area including the CIMD;

(b) engage consultants by not later than March 31, 1978 to prepare a report on the organization, management and timing of establishment of the CVB;

(d) use its best endeavors to complete a revaluation of lands and buildings in the CMD to provide new assessment books for use in the responsible authorities by not later than April 1, 1982. - 160 -

ANNEX 9

Reforms Proposed as Part of Second Project

11. GOWB Department of Municipal Services, GOWB proposes to reorganize the DMS to cope with the proper development and organization of local government services in West Bengal, and in particular in CMD. GOWB will commission a report to reorganize the DMS, and establish directorates to administer planning, engineering and fiscal operations. The report should be finalized by December 1977. Assurances were given that GOWB will complete an appropriate reorganization for DMS to enable this department to respond to the needs of the local bodies in CMD by March 31, 1979.

12. Calcutta Corporation. Comprehensive reforms to the management, accounting, stores and financial control systems are necessary. GOWB have given assurances that consultants will be engaged to design and install by April 1, 1979 the suitable accounting, stores and financial management systems, and to have an interim report available by April 1978. In addition, GOWBhave assured IDA that improvements in the Corporation's management will be effective before April 1, 1979, and that independent auditors acceptable to IDA will be appointed to provide audits for each fiscal year from April 1, 1977, not later than nine months after the close of each year.

13. During the project period, the effect of fiscal changes now made, or in course of implementation in CC will become known. With a revaluation effective from 1982 and the ongoing reforms, this authority should be financially viable in the mid-1980's. However, three key actions will be necessary during the project period to ensure that this target can be achieved and that service standards will be consistently improved. These are: (i) the revenue collection performance is substantially improved; (ii) water supply and sewerage services become financially viable as early as possible through full cost beneficiary charges; and (iii) other services have sufficient resources (Table 1). Assurances have been given by GOWB to the effect that:

(a) CC will provide satisfactory standards of operation and maintenance for services and public facilities for which it is responsible, and in order to finance not less than 84% of expenditures from revenues in 1981/82 will not finance not less than the following proportions of expenditures on such services and facilities in the fiscal years indicated by actual receipts from statutory revenues including octroi allocations, but excluding grants-in-aid from the GOWB:

1978/79 1976/77 proportion plus 4% thereof 1979/80 "" 8% " 1980/81 " " " 12% 1981/82 "" 15% - 161 -

ANNEX 9

and thereafter; and

(b) require CC in respect of: (i) collections due on each year's property tax and water and sewerage taxes, plus (ii) amounts due and not collected on the first day of each year, but excluding receivables outstanding for more than five years, to collect not less than 70% in 1978/79, 80% in 1979/80 and 90% in 1980/81 and thereafter.

With respect to (b) above, IDA had initially urged that debts over five years old as at March 31, 1977 shall be written off, but GOWB requested that further attempts should be made to collect these, particularly as many are due from affluent tuxpayers. Such amounts due currently total about Rs 2.0 crores and because~ the likelihood of their collection within the project period is uncertain, it was agreed to exclude such amounts from the collection performance undeztaking in (b) above.

Other Local Authorities in CMD

14. The financial position of other local bodies in CMD appeared lil"ely to worsen during the project period (Table 2). The resource base is poor and not adequately exploited and revenue collection performances are poor. The GOWB proposed to review the present system of financial aid to local bodies as a means of developing economic efficiency in municipal finance. However, improved local performance is essential and the following assurances have been received:

(a) provide local bodies in CND, including CC, with sufficient funds to provide satisfactory standards of operation and maintenance of (i) existing local government services and (ii) assets and systems provided by CMDA and transferred to these local bodies during the project period;

(b) ensure that municipalities in the CMD excluding CC provide satisfactory standards of operation and maintenance of services and public facilities for which they are responsible and to finance not less than the following proportion of expenditures in the fiscal years indicated by actual receipts from statutory revenues and octroi allocations, but excluding grants-in-aid from the GOWB:

1978/79 1976/77 proportion plus 10% thereof, subject to a maximum of 68% 1979/80 1976/77 proportion plus 15% thereof, subject to a maximum of 70% 1980/81 1976/77 proportion plus 20% thereof, subject to a maximum of 73% 1981/82 1976/77 proportion plus 25% thereof, subject to a maximum of 75% - 162 -

ANNEX 9

Provided that where the 1976/77 proportion of revenues to expenditures exceeded 65%, the percentages indicated would be reduced to 4%, 8%, 12% and 15%, respectively, and that all authorities by 1981/82 would achieve not less than 50% coverage of expenditures from such revenues;

(c) prepare, by March 31, 1979, a revised grant structure for local bodies in CMD which would be designed to promote local efficiency and improved fiscal participation; and

(d) enact necessary legislation to implement the grants system in (c) from April 1, 1980.

With respect of (b) above, because of the difficulty of providing suitable standards for 34 authorities with wide variances in performance, the fixing of maxima was requested by GOWB to avoid imposing too heavy a burden on any local body which may be currently in the 60%-65% range and who would have been required to achieve 1981/82 targets substantially higher than authorities in the 66%-70% range. The objective of this undertaking is to ensure that no authority has a below 50% performance by 1981/72 and that all authorities should have made significant improvements in these four years compared to their declining performances in recent years.

15. Institutional and boundaries reform for these 34 municipalities presents many problems, among the most significant are fiscal and personnel. Fiscal problems are being addressed in para 14, and GOWB also intends to con- duct major experiments to try to resolve the personnel problems. The GOWB departments and the district administrations are staffed by State government staffs, who also have access to federal posts through the municipal cadres of the Indian Public Service including the Administrative Service (IAS) and the engineering cadres. Their status, career possibilities, salaries and conditions of service are superior to local government staffs, who have had no effective cadre system (although GOWB is now making a start with engineers, education officers and health inspectors), and little chance of promotion or of transfer to better posts either in local authorities, or in the state government. Diminishing financial resources have further worsened prospects for any municipality to employ a qualified officer in any sector.

16. GOWB is proposing to investigate the possibility of using the organizations and staffs of the entire three-tier system in the area of four or five adjoining local authorities to operate local services. This would automatically involve the higher-quality staffs of government/districts, and would probably necessitate a review of the local authorities' functions, finances and staffs. Assurances were obtained that:

(a) by April 1, 1978, nominate such areas and such local bodies within CGIDas shall have the benefits of state level public service employees; - 163 -

ANN4EX9

(b) by December 31, 1978, prepare a feasibilityreport on the organization,structure and financing of the appropriatearrangements; and

Training

17. Extensive training of staff at all levels and in all sectors of local bodies in the CMD, and in DMS following its reorganization,will be required during the project period. Funds have been provided in the project for technical assistance and training (Annex 8) and assurances were obtained from GOWB at negotiationsthat (i) GOWB will engage, or require the responsible authoritiesto engage, consultants to prepare by June 30, 1978 five- year training programs for staff of (a) Calcutta Corporation, (b) an experimental local governmentunit in CMD, (c) other local bodies in CID, and (d) CMDA, and (ii) will implement, or require the responsible authorities to implement, agreed programs in (i) from January 1, 1979. - 164 - ANNEX 9 INDIA Table I SECONDCALCUTTA URBAN PROJECT

Calcutta Corporation - Forecast of Revenues and Expenditures 1977/78 Through 1981/82(Rs Crores)

1977/78 1978/79 1979/80 1980/81 1981/82

REVENUES(Note I)

Sources Pre-1976/77 Reforms 12.4 13.0 13.7 14.4 15.1 Sources From 1976/77 Reforms -Surcharge on Conwnercial Properties 1.2 2.3 2.5 2.6 2.8 -Surcharge on Vehicles 1.4 1.5 1.6 1.7 1.8 -Increased Fees on Taxes and Professions 0.6 0.6 0.6 0.6 0.7 Octrol Receipts 4.1 4.3 4.8 5.2 5.5

Total Revenues 19.7 21.7 23.2 24.5 25.9

EXPENDITURES (Note 2)

Recurrent Expenditures (Note 3) 22.8 24.4 26.1 27.9 29.9 Debt Service as at 1976/77 (Note 4) 3.0 3.0 3.0 3.0 3.0 Operation and Maintenance of New Projects 2.2 3.5 4.7 5.2 5.6

Total Expenditures 28.0 30.9 33.8 36.1 38.5 REVENUEDEFICIT 8.3 9.2 1o.6 11.6 12.6

Deduct GOWBGrants (Note 5) 3.4 3.6 3.9 4.2 4.5

ADDITIONAL GOWBSUBVENTION REQUIRED 4.9 5.6 6.7 7.4 8.1

REVENUESAS PERCENTAGEOF EXPENDITURES 70% 70% 69% 68% 67t

EFFECT OF INCREASING REVENUEPROPORTION OF EXPENDITURES

ASSUMING1976/77 Revenues as a percentage of expenditures 734 the percentage increases on this datum figure for each year as set out opposite ------4t 84 12t 15I

would provide these revenue yields ------23.5 26.6 29.5 32.3 (Percentage of Expenditures) (764) (79%) (824) (844)

REVISED DEFICIT 8.3 7.4 7.2 6.6 6.2

Deduct GOWBGrants 3.4 3.6 3.9 4.2 4.5

AODITIONAL GOWBSUBVENTION REQUIRED 4.9 3.8 3.3 2.4 1.7

EFFECT OF IMPROVING PROPERTYTAX COLLECTIONS (Note 6)

AMOUNTOF PROPERTYTAX included in revenue sources (Pre-1976/77 Reforms) above i.e. actual recoveries in cash based on current collection of 66% 9.0 9.5 9.9 10.4 10.9

A. INCREASE BASED ON GOWBASSESSMENTS - 70% 80t 90% 90t

YIELD OF INCREASEDPROPERTY TAX COLLECTIONS ON BASIS OF AGREED RECOMMENDATIONS - 0.5 2.1 3.8 4.0

ADDITIONAL REVENUESREQUIRED TO ACHIEVE TARGETS - L3 1.3 1.2 2.4

B. EFFECT OF ACCELERATING IMPROVEDCOLLECTION PERFORMANCE(Say) - 77.5t 85% 90% 904

REVISED YIELD - 1.7 2.8 3.8 3.8

ADDITIONAL REVENUESREQUIRED TO ACHIEVE AGREEDPERFORMANCE TARGETS - 0.1 o.6 1.2 2.6

Source: C.M.P.O. and Mission Estimates

NOTES:

1. Revenues representing cash receipts escalated at 5 per annum.

2. Expenditures representing cash payments escalated at 7t per annum.

3. The expenditures and grants do not reflect special associated grants from GOWB, as these were a one-timeexpenditures exercise. by Calcutta Corporation on roads maintenance in 1977/78 and

4. Debt service transfers to Calcutta Corporation from CMDA will commence 1982/83.

5. Government grants consist mostly of dearness allowance award repayments and have been escalated at 7t per annum.

6. The increases in property tax collections take no account of possible recoverie of arrears pre 1974/75. The collections of 9.0 crores inclu,desnormal ~arrearsc-ollections of the years 1975/76and 1976/77.Tharesatndo 1977/78 1975/76were about Rn 12 crores (US$ 13 million).7Tharesatndo - 165 - ANNEX9 Table 2 INDIA

SECONDCALCUTTA URBAN PROJECT

CMDMunicipalities - Forecast of Revenues and Expenditures 1977/78 Through 1981/82 (Rs Crores)

1977/78 1978/79 1979/80 1980/81 1981/82

REVENUES (Note I)

Sources Pre-1976/77 Reforms 5.7 6.o 6.3 6.6 6.9 New Sources from 1976/77 Reforms 1.5 2.0 2.2 2.3 2.4 Octroi Receipts 2.8 2.8 2.9 2.9 3.0

Total Revenues 10.0 10.8 H1.4 11.8 12.3

EXPENDITURES(Note 2)

Recurrent Expenditures 11.2 12.0 12.8 13.7 14.6 Operation and Maintenance of new assets commissioned by CMDA 1.5 1.9 2.7 2.9 3.3 Debt Service 2.2 2.2 2.2 2.2 2.2

Total Expenditures 14.9 16.i 17.7 18.8 20.1

REVENUEDEFICIT (4.9) (5.3) (6.3) (7.0) (7.8)

Deduct GOWBGrants (Note 3) 3.3 3.6 3.8 4.1 4.4

ADDITIONALGOWB SUBVENTION REQUIRED 1.6 0.7 2.5 2.9 3.4

REVENUESAS PERCENTAGEOF EXPENDITURES(Note 4) 67% 67% 64% 63% 61%

EFFECTOF INCREASINGREVENUE PROPORTION OF EXPENDITURES(Note 5)

ASSUMING1976/77 Revenues as a percentage of expenditures = 67%, the percentage increases on this datum figure for each year as set out opposite ------4% 8% 12% 15%

would provide these revenue yields ------11.2 12.8 14.1 15.5 (Percentage of Expenditures) (70%) (72%) (75%) (77%)

REVISED DEFICIT (4.9) (4.9) (4.9) (4-7) (4.6)

Deduct GOWBGrants 3.3 3.6 3.8 4.1 4.4

ADDITIONALGOWB SUBVENTION REQUIRED 1.6 1.3 1.1 0.6 0.2

EFFECTOF IMPROVINGHOLDING (PROPERTY)AND RELATEDTAXES COLLECTIONS

AMOUNTOF HOLDINGAND RELATEDTAXES Included in revenue sources (Pre-1976/77 Reforms) above,i.e. actual recoveries in cash based on average current performance of about 55% 5.1 5.4 5.7 5.9 6.2

EFFECTOF IMPa0VINGCOLLECTION PERFORMANCE by (say) 15%per annum

- Revised Collection Percentage 55% 63% 73% 83% 96%

Yield of Increased Collections - 0.8 1.9 3.0 4.6

Source: C.M.P-O. and Mission Estimates

NOTES:

I. Revenues representing cash collections are escalated at 5% per annum.

2. Expenditures representing cash payments are escalated at 7% per annum. However, the expenditures shown are based on past performance and, in many cases, do not represent adequate standards of maintenance.

3. GOWBGrants consist mostly (about 90%) of dearness allowance awards refunded to GOWBto municipalities, escalated at 7% per annum.

4. Revenues as a percentage of expenditures represent the average of 35 municipalities. About 12 municipalities have very good performances, but about an equal number, including the largest, Howrah Municipality, have revenue yields under 50% of expenditures.

5. The demonstrated yields of Improved cash collections are not specifically called for in assurances, but are shown as an example of a means of achieving the IDA required targets. - 166 -

ANNEX 10

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Calcutta Metropolitan Development Authority (CMDA) - The Institution, Management and Finances, and its Role in Project Implementation and Future Calcutta Metropolitan Development

Introduction

1. CNDA is a GOWB statutory authority charged primarily with planning, design and construction of public works in the ClD. The appraisal report of the first project 1/ detailed events in Calcutta leading to the establishment of CMDA in 1971. 2/ It has authority to carry out operations and maintenance in default of responsible authorities, but has not used this facility, except for water supplies in outlying areas (para. 28). As the principal agency rehabilitating and developing urban infrastructure schemes normally executed by local authorities, CMDA initially engaged a number of existing ad hoc authorities e.g. CIT, to design and supervise construction of large-scale works. Recently, diminishing use has been made of these agencies and CMDA has expanded its activities and its staff in an endeavor to respond to pressures to accelerate metropolitan improvements. However, CMDA's response has not been timely or cost-effective.

2. The following table demonstrates the declining output of CMDA in the six fiscal years 1971-72 through 1976-77, 31 valued in 1977 prices, and the staff employed. The figures should be regarded as indicative only because they do not reflect four important factors: (i) the employment of consulting engineers and architects; (ii) use of executing agencies; (iii) a major attempt by CMDA in the last two years to concentrate on important, productive investment and eliminate wasteful expenditures; and (iv) the staff build-up necessary to support the proposed second project. Nevertheless, future supervision missions should review this very large staff establishment.

1/ IDA Credit No. 417-IN - Report No. 159a-IN.

2/ Calcutta Metropolitan Development Authority Act, 1972.

3/ The Indian fiscal year runs from April 1 to March 31. - 167 -

ANNEX 10

Table of CMDA Investments at 1977 Price 1 and Staffing 1971-72 through 1976-77-

1971-72 1972-73 1973-74 1974-75 1975-76 1976-77

Investments (Rs crores) 51.0 55.9 41.1 28.7 34.4 36.6 Staff employed 772 905 2136 2730 3184 3408

/1 Inflator based on percentage change in Index of ManufacturesWholesale Prices - Table 6.10 of Bank's Economic Report for India 1977.

3. This decline in output post-1972-73immediately affected the first credit disbursementsperformance and has been of continuing concern to GOWB and IDA. The following table demonstratesthe forecast and actual annual disbursementsto end FY 77.

Credit 417-IN - Annual Disbursements (US$ million)

FY 74 FY 75 FY 76 FY 77 FY 78

Forecast at 9.5 16.0 8.5 1.0 - appraisal

Actual 0.6 4.4 9.0 5.9 0.9 (as at August 5, 1977)

4. Disbursementswere scheduled 1/ to have been completedend FY 77, but US$15.1 million (43%) remained to be disbursedas at that date. Planning failures have resulted in completion of investmentswithout supporting systems e.g. bridges without approach roads; sewage treatmentplants without sewerage systems. Failure to acquire land in good time resulted in late starts, or in some cases, no start at all.

5. The first IDA project formed only 34% of CMDA's original program from 1973 through 1976, and CMDA's budgetary pattern developed into two categories of works - IDA works and non-IDA works. CMDA, as a body which grew out of the State's public works department (PWD) retained out-dated practices, and persisted in an annual planning and capital budgeting systems without long-termplanning and forecasting. These systems gave the opportunity at the annual review to reconsider each scheme, and reallocateprior- ities each year, to match the annual allocation of funds by GOI and GOWB. The planning policy appears to have been to try to start or continue as many schemes as possible each year to give the appearance of working on a widespread and intensive scale. The result was inadequatefunds allocation

1/ At appraisal in 1973. - 168 -

ANNEX 10

to ongoing schemes and a mounting number of incomplete project components. With CMDA's failure to achieve output targets, a large number of incomplete schemes remain, with IDA schemes forming consistently about 50% of output, as the following demonstrates.

1973-74 1974-75 1975-76 1976-77 Total to-date (… -- Rs crores -- )

Total output /1 32.37 28.00 33.20 34.80 128.37

IDA financed schemes 4.00 14.56 16.68 18.08 53.32

IDA project as percentage of total output 12% 52% 50% 52% 42%

/1 Commissioned schemes and work-in-progress.

Improvements to CMDA Management

6. In November 1975, IDA mounted a large supervision and pre-appraisal mission, with terms of reference to identify problems preventing adequate CiDA performance and to recommend improvements which would be necessary to (i) ensure early completion of the first project; and (ii) execute a possible second and larger project. The principal recommendations of this mission as defined during subsequent discussions with GOWB and CIDA during 1976 were:

(i) appointment of a full-time Chief Executive;

(ii) establishment of a management team consisting of Directors of Planning, Operations, Finance and Administration and led by the Chief Executive;

(iii) introduction of modern methods of accounting and financial management by consulting accountants;

(iv) introduction of management information systems and project monitoring and control systems;

(v) use of a "rolling-program" system of budgeting for the second project in the period 1977/78- 1981/82;

(vi) development and use of modern project appraisal techniques, and systematic planning of investment strategy; - 169 -

ANNEX 10

(vii) establishment of specialized divisions or units to plan, design, evaluate and implement traffic schemes, sewerage and drainage. area development, social welfare and community develspment schemes (as compared with CMDA's traditional basic infrastructure development approach by providing roads, water supply, sewerage, etc.); and

(viii) introduction of auditing by coinercial auditors.

7. A continuous dialogue with GOWB and CMDA has now resulted in agreement on the implementation of all the proposals KiLpara 6 except the use of commercial auditors in (viii) because this is the prerogative of the Comptrol- ler and Auditor General of India. Some have been introduced, others are yet to be implemented. The effective and early implementation of all proposals are a principal justification of the second project, which without their introduction has no chance of completion in a reasonable period of time.

8. The Chief Executive, the Director General of Operations and tLce Directors of Planning, Finance and Administration have been appointed. Con- sultants are currently employed to design and install accounting and manaGe- ment information systems (para 6(iii), (iv) and (viii)). The necessary divisions and units have been established to design and implement specialized development schemes (para 6(vii)), together with effective means of linking with GOWB departments responsible for employment generation and small-scale enterprises. Improved appraisal and monitoring techniques (para 6(vi)) are to be introduced in 1978 to assist the management team in the review and decision-making process. Assurances have been given that CMDA will introduce a project appraisal system with suitably experienced and skilled staff by not later than June 30, 1978.

9. GOI and GOWB have authorized CMDA to adopt (i) a capital budgeting and expenditure program system from fiscal year 1977-78 throughn at least fiscal year 1981-82, which will form the start of a five-year investment program budgeting system to permit schemes or projects' components to be consistently provided with the necessary capital finance over the designed construction period. The amount of the 1977-82 CMDA investment program has been agreed at Rs 248 crores (US$288 million). Contracting procedures which will permit the prompt completion of works or services, by the letting of all or any part of the works or services as single contracts without regard to time and annual budget constraints previously practlsed or imposed by CMDA's annual fiscal planning and budgeting system prior to 1977-78.

10. The implementation of the "investment program system" and full- term contracting in para 9 will permit C1NDA to let a contract for a period of (say) three years for completion of a road by one contractor, by commit- ting resources in the 4-5 year rolling capital program to meet the forecast expenditures. The practice of small annual contracts, with no guarantee to a contractor of continuation of contract in the following year should now - 170 - ANNEX 10

cease. However, IDA will need to closely supervise budgets and the letting of contracts to ensure compliance with this agreement. Assurances have been received that CMDA will consult with IDA on any changes to its investment program budget for the next succeeding four years and the annual budget for each forthcoming financial year.

CMDA Organization

11. Chart 17580 sets out the proposed organization of CMDA which should be established and in full operation by end 1978. The Chief Executive and the four Directors (para 6(ii)) will form the management team to make all decisions relating to policy implementation, and the Chief Executive will be the link with the Chairman and the Authority. The project appraisal unit (para 8) will be directly attached to the Chief Executive, as will the Man- agement Information and Project Monitoring unit. However, each operational division (water supply, roads, etc.) in the Directorates will have its own monitoring system linked to the Chief Executive's unit, and to the Finance Director.

12. The Planning Director will have two principal fields of activity: (i) long-range development and area planning, with development control in CND; and (ii) project planning, design of area development schemes, and design review of schemes to be implemented by CMDA or other agencies. The Operations Directorate has adequate staff to design and supervise construction of the basic infrastructure works (roads, drainage, water supply) but may need to hire short-term consultants to meet peak loads relating to new types of projects, e.g. traffic engineering.

13. The Administration Directorate will be substantially affected by the proposed changes and will actively participate in the management information system. There is now an increasing need for active and prompt liaison with the key GOWB departments and agencies involved in project implementation. A separate legal unit is now necessary to enable contracting and claims procedures to be expedited. The Finance Directorate will be the subject of major changes as a result of: (i) the accounting and financial management consultants' design and installation of new systems (para 8); and (ii) the introduction of a Director having the rank of Accountant-General. It is probable that adequate staff are available, but considerable retraining and reallocation of functions will be necessary. The completed new systems of accounting will not be fully operational until 1979/80, but in the meantime the consultants are required to assist in ensuring continuity and quality of accounting. The same firm (Messrs. Price, Waterhouse and Co. of Calcutta) will also install the management information and project monitoring system which will also not be fully operational until 1979-80, but interim reporting data will be available to enable management and IDA to review the early progress of the project. Provision has been made in the project costs for training expenditures for CMDA staff totalling Rs 25 lakhs (US$0.27 million) (Annex 6). - 171 -

ANNEX 10

Finances of CMDA

14. CMDA derives its financial resources from:

(i) market borrowings;

(ii) GOI loans and grants;

(iii) GOWB loans and grants;

(iv) capital recoveries for services assets transferred to other entities;

(v) share of octroi receipts collected in CHD by GOWB;

(vi) charges for services; and

(vii) short-term 'bridging' loans.

15. Market borrowings. CMDA is allowed to issue bonds limited to Rs 11.0 crores (US$12.2 million) bearing interest at about 6.5% once each year on the money market, for subscription by the nationalized banks. Up to and including borrowings for the fiscal year 1974-75, CMDA is required to make annual interest payments over ten years and repay the principal by means of annual sinking fund contributions. From 1975-76 onwards, annual interest will be payable, but no sinking fund contribution will be payable, and, on the repayment date of each borrowing, CMDA will be authorized to reborrow the amount due to be repaid (i.e. a "roll-over" operation), plus the new annual borrowing requirement.

16. All GOI and GOWB loans up to the end of 1975-76 have been converted to grants, and from 1976-77 all GOI and GOWB assistance is likely to be in the form of grants, except in respect of finance for revenue-earning schemes (water supply, area development). In the event that a revenue- earning component e.g., a sites and services scheme9 is transferred to another agency to operate e.g. WBHB, that agency will take over responsibilic- for debt service when assets are handed over. Interest during construction of revenue-producing assets will not be charged to CMDA. On transfer of any asset and associated loan amount to an operating agency, GOWB will increase the normal interest rate (6%) by a surcharge interest rate (up to 2%) to recover the equivalent sum of interest during constructiornover the loan repayment period. CMDA will not transfer debt service in respect of completed non-revenue earning schemes to any local body or agency, nor will it transfer any debt service liabilities for schemes financed by market borrowings. Financial resource allocations will be so arranged within CMDA to ensure that GOI/GOWB loans are 'earmarked' to finance revenue-earning schemes. - 172 - ANNEX 10

17. The justification for these fiscal changes recently imposed by GOWB on CLfMDAare primarily because, although CMDA can pass on debt service to local bodies in CMD for which it constructs assets or provides services, these local authorities, including CC, are unlikely to be capable of servicing substantial amounts of non-revenue earning debt in the foreseeable future. Revenue producing assets in all CMD local authorities and CMDA will still attract debt service liabilities, and it will thus still be possible to determine the full costs of such services for recovery and repli- cability.

18. Expenditures of CMDA are of three principal categories: (i) capital or project expenditures; (ii) debt service; and (iii) administration costs. CMDA has required each sector in each year to operate to a balanced budget i.e. expenditures cannot exceed resources, but, from 1977-78, a fiscal operation will be in force (para 9). This will mean that, although every effort will be made to operate to an annual budget or program, CMDA will be authorized to allow any scheme which can make rapid progress to proceed without being stopped for lack of funds as in the past. This can be achieved by allowing underspendings in a year to be carried forward in all sectors, or inter-sectoral transfer of underspendings during a fiscal year.

19. The IDA I components will total about Rs 36 crores when completed in 1980-81. This project was redefined in FY76 following a period of high inflation and extended construction periods, caused by delays in implementation. The CMDA element of the proposed second project will total about Rs 155 crores (US$180 million). The full details of the proposed second project cost estimates are set out in Annex 11. Non-IDA financed expenditures contain intified items which CNDA wishes to exclude from IDA supervision, or which ID' considers inappropriate for financing for reasons such as not demonstrably least cost solutions, or where IDA participation could be considered politically controversial, e.g. schemes using waters controlled by the Farraka Barrage on the Ganga River. The total of such expenditures is forecast by CMDA to be about Rs 57 crores (US$67 million) in the period 1977-81. This amount is probably understated by about 20-25%, because of inadequate physical and price contingency allowances. Also included is an amount of Rs 22 crores (US$26 million) for expenditures in FY 1981/82 on schemes not yet identified. Assurances were given at negotiations that GOI and GOWB will ensure that CMDA is provided with access to adequate funds to complete the projects by March 31, 1982.

20. The forecast balance sheets of CMDA are shown in Table 2. They demonstrate, inter alia, the progressive development of the CMDA Program and transfer of completed assets to other local bodies or agencies. Al- though not demonstrated in Table 2, it will be a requirement of published final accounts and balance sheets to show the allocation of CMDA administration charges. Currently, these are charged annually to an "income and - 173 -

ANNEX 10

expenditure"account, without regard to the actual incidence of expenditures i.e. no records are maintained to demonstratethe costs of planning, design and constructionsupervision of each scheme. Until this can be achieved under the financialmanagement reorganization(para 6), meaningful data on costs of schemes will not be available. For purposes of the proposed second project, the administrationcosts have been allocated to the project costs.

Table 1

Calcutta Metronolitan DeveloDnent Authority

Statement of Forecast Sources and Anplications of Funds 1977/78 thrnugh 1981/82 (Rs crores)

1977178 1978/79 1979180 1980181 1981/82

SOURCES

Bet operating surplus/deficit 0.86 1.60 4.90 6.75 9.90 Add depreciationon operating assets 0.75 0.75 0.75 0.60 0.55 Net cash generation 1.61 2.35 5.65 7.35 10.45 Grants - GOI 10.50 10.50 10.50 10.50 10.50 - GOWB 12.50 13.50 10.50 16.50 25.50 Loans - market borrowings 11.00 11.00 11.00 11.00 11.00 - GOWB 11.90 19.20 16.64 15.34 12.88 Sinking funds investments- interest 0.90 1.16 1.44 1.73 2.04 Octroi allocation/I 9.65 8.92 9.37 9.84 10.33

TOTAL SOURCES 58.06 66.63 65.10 72.26 82.70

APPLICATIONS

Capital expenditureson operating assets 2.00 1.25 00.35 0.3D

Project ExpenditureL. IDA 1 34.95 13.89 4.40 2.32 0.50 Proposed IDA II 14.99 26.63 39.14 40.86 33.38 don-IDA - identified 11.37 9.72 10.25 12.91 13.04 - unidentified _ - - 22.35

Sub-total - Project Expenditures 41.31 50.24 53.79 56.09 69.27

Debt Service Interest 5.77 6.59 7.38 8.07 8.76 Sinking fund contributions 6.42 4.98 5.26 5.55 5.86

Sub-total - Debt Service 12.19 11.57 12.64 13.62 14.62

Increase in working capital 0.50 0.50 0.50 0.50 0.42

TOTAL APPLICATIONS 56.00 63.56 66.93 70.56 84.61

CASH

Surplus/(Deficit) for Year 2.06 3.07 (1.83) 1.70 (1.91) Balance at Beginning of Year 0.88 2.94 6.01 4.18 5.88 Balance at End of Year 2.94 6.01 4_18 5.88 3.97

LI Predicted to increase at 5X per annum. 1977/78 receipts include arrears receivable. /2 Includes CMDAdesign and supervision costs charged to project expenditures.

SOURCE: Mission estimates. - 174 - ANNEX 10 Table 2

INDIA

SECONDCALCUTTA URBAN DEVELOPMENTPROJECT

Calcutta Metropolitan Development Authority

Forecast Balance Sheets as at March 31, 1976 through 1982 (Rs crores)

1976 1977 1978 1979 1980 1981 1982

ASSETS AND OUTLAY

Capital Outlay on Infrastructure and Development Projects 141.12 185.98 228.18 276.41 328.81 383.97 449.72 Less assets transferred to operating authorities - - 0.20 7.66 30.55 110.19 261.85 Assets retained by CMDA 141.12 185.98 227.98 268.75 298.26 273.78 187.87 CMDA operating assets (net of depreciation) 3.54 3.75 5.00 5.50 4.75 4.50 4.25

Subtotal - Assets Operated by CMDA 144.66 189.73 232.98 274.25 303.01 278.28 192.12

Work in Progress 25.00 14.95 14.06 16,07 17.46 18.39 21.91 Sinking Fund Investments 9.22 12.81 19.02 23.79 28.84 34.18 39.83 Current Assets Advances and debtQrs 3.13 3.20 3.50 4.00 4.25 4.50 4.00 Stocks 2.32 2.00 1.70 1.40 1.00 0.70 0.40 Cash 4.58 0.88 2.94 6.01 4.18 5.88 3.97

Subtotal 10.03 6.08 8.14 11.41 9.43 11.08 8.37

Less current liabilities 2.32 5.50 5.00 4.70 4.05 3.50 2.28

Subtotal - Net Current Assets 7'71 0.58 3.14 6.71 5.38 7.58 6.09

TOTAL ASSETS AND OUTLAY 186.59 218.07 269.20 320.82 354.69 338.43 259.95

LIABILITIES AND SURPLUSES

Long-Term Debt GOWB loans 12.80 24.70 43.90 60.54 75.88 88.76 Less transfers to operating authorities _- - 1.01 5.12 20.56

Subtotal 12.80 24.70 43.90 59.53 70.76 68.20

Market borrowings - redeemable 1983-87 61.60 61.60 61.60 61.60 61.60 61.60 61.60 - nonredeemable 15.40 26.40 37.40 48.40 59.40 70.40 81.40

Subtotal 77.00 88.00 99.00 110.00 121.00 132.00 143.00

Subtotal - Loans Outstanding 77.00 100.80 123.70 153.90 180.53 202.76 211.20

Sinking Fund for Maturity MarketBorrowings 9.22 12.81 19.02 23.79 28.84 34.18 39.83 Equity 01 and GOWB grants 91.60 102.60 125.60 149.60 170.60 197.60 233.60 Other 3.31 3.31 3.31 3.31 3.31 3.31 3.31 CMDA surplust(deficit) 5.46 (1.45) (2.23 (2.12) 0.95 5.65 13.30 100.37 104.46 126.68 150.79 174.86 206.56 250.21 Less transfers to operating authorities - - 0.20 7.66 29.54 105.07 241.29

Subtotal - Equity 100.37 104.46 126.48 143.13 145.32 101.49 8.92

TOTAL LIABILITIES AND SURPLUSES 186.59 218.07 269.20 320.82 354.69 338.43 259.95

SOURCE: Mission estimates. ANNEX 11 - 175 - Table 1

INDIA

SECOND CALCUTTA URBAN DEVELOPMENTPROJECT

Schedule of Estimated Disbursements

Cumulative IDA Fiscal Year Disbursements Disbursements and Quarter during Quarter at End of Quarter (US$ million) (US$ million)

FY 1978

March 31, 1978 June 30, 1978 8.0 8.0

FY 1979

September 30, 1978 5.0 13.0 December 31, 1978 3.0 16.0 March 31, 1979 4.0 20.0 June 30, 1979 5.0 25.0

FY 1980

September 30, 1979 4.0 29.0 December 31, 1979 4.0 33.0 March 31, 1980 6.0 39.0 June 30, 1980 6.0 45.0

FY 1981

September 30, 1980 4.0 49.0 December 31, 1980 4.0 53.0 March 31, 1981 7.0 60.0 June 30, 1981 5.0 65.0

FY 1982

September 30, 1981 3.0 68.0 December 31, 1981 4.o 72.0 March 31, 1982 6.0 78.0 June 30, 1982 5.0 83.0

FY 1983

September 30, 1982 4.0 87.0 INDIA

SECOND CALCUTTA UDOBANDEVULOPINUNT PROJECT

1 9 77 1 9 70 1 979 lA190 197I

Agenc 1 27 3 4 1 2~ U 4 N 2 3 4 3 4 2D PHARTA ARAEA DEVELOP-7NT, CMIDA/WBSIC ___ Y1 /8FT 19 8/79 l ~~9/______19194/(

1 loud RuNutnittun ~~~~~~~~~~~~~~~~~~~~~~~CcN.,1979 I otClot,a eo 5 Oln Wost Hio-ha n** 000*** O*e ** iib uia by October _11,, 1978, last Ca_cutta *oao * a- 00 o 'cI.--n*11 bo_loecce by 0.pL Nb 1979. LandOilDing ~~~~~~~~~~~~~~~~~E 1978 OgREj 1,197~~~~~Oct. - .b1-b ~~l1 99

West IIn h------A r 1Qm 0 M-och 3l,M9

On-Sit Ar..terial----ad--Oct.-197-----97E- June 377,1981

On-Site ~AL Rd 0 0

10- Calcutta: W_t_S__y

E..t C.1ctt.: Dt.i-g~~~~~~~~~~~~~~ ------D~~~~~~~~c.311980.31 98

Os-Site St-et Lighting

E..t C.1-t. .10.~~~~~~~~~~~~~~~~~~~~~~~~~3i ,196UL------Ornc.3 1981

On SEts Llnd.t.ti%

East Esinetta Jul IB ------*SeD.c 4 1901 Sf1-Sits Ss... t ... IDi....

las:t Calcu1tte, SZenerags ------H 1 198079.Dct flo-e 3 1981

East Celcutto, Ocrainage

E..t C.1c.tt.: S..it.ty C-/ 1,1979 East C.,uts Sniay n.lp ~~~~~~~~~~~~~~~~~OcIee3c _Lc. Fit., ------0,1981~~~~~~~~~~~~~~~~~~~~~~~~~~Sc.10 ls autta, Milkbena-- -ygrop - -Jue 98

C-DIoitn Facilitine

las Calcunea Oc ,99Sn3 1901

Iodnlrl1 Dnit-i

lesEl-tts Oct I1,1979 Oc. '19771

H-.he Fish and Pan Merkete yell 1~9*79 Ape~l 1, 1900 Fleh Munket Q119-7,99 8S n 17 3 3710LacA roqaired fcr cne-nig o. wilt tj, - -0 19 979 Oc, 1,19.LQ-, Sap-;~ b.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~b-cqired by April 1, 1979; tbr P. h ------":"9,8 by April 1, 1900. The..noh Mtorn g ~~~~~~~~~~~~~~~~~~~~~~~~~~~~S9

LEGEND: -*-OO* L-nd ocuisiti-n ... cerdlnic Cucut 6rnaCu,-Oty -d fonUto c 011,,nlu,IUun 1 nilcn oj Cluetereclene, on lpientno en nudtndrn n egonl*0 eo cIn schetduleh t1c ret_d i_sO D0 - 0 Table 2

0 0.00 aC toC

= { - -rvv _X == r-- a

z1i~~~. 10 .0 0t0 .0 .00 X~~~0 0 - - -

l f + i ; = -i ii i =0000 =

. a4 ll z .01 .1 0 .0 .0 .,,, *00.. .0.0 C0

_~ ~ ~ ______} 0000 __ C G__ _~~~~0 _1 01=_ 00

a I O ° *j E =

0. olI _ .1 _INDIA

SECONDCALCUTTA URANA DEVELOPMEtIT PROJECT-

ARenry4 1 2 31 2 3 4 1 2 3 4 1 2 3 ~ ~~14 ~~~~~~~~~~~4-3 4 PC 19 7/79______FT 19 8/79 PT 19 9/80 T19 0/8 FT 19 1(82

PARTC, SEWERAGE AND DRAINADE CMDIA/CIR7SAI - HIT/CC/DRWI

iR.telgia (Ph II)………------

Coloota. City Syoten, Se-eiog lot ,1900

f- B..t.. A-.. ~~~~~~~~~~~~April1 1929M ------J-O- 0,1982

31,1983o

Honcah leornga (Ph II) -Nurv ------_h 31,199 CraodTeookloadDrainage(P1,1) ~~~~~~~April . .1978 .. gArth 31,1981

Outfal Impr.....at inb... fo Dute and. An-ha1 Area Dr_ltag orh- 31,190

RagjolsCunallopraoeaenr Ont.l ~~~~~~ -- ~~~~1978 J.ne 0,1981

CrtaSame Cle-nato Apr11 7 - - -- 8 ------30,198 PARC 8: SOLID WASTES MANIAGEMIENT C8DAACC/ o T Ipli D.0.1, Chingr,ibatta Wurkabp 977 Rrr.] 1979 .2197950.oladroaedPrwrd0an a------mlol- ear be a -qutrd-b M-.ddp Raaafpr-gro on be detailed -ad aNed gai by C8IDA and rb pi 11h and rbr balanceby M-hr 31, 1980. arb3,9 PRODI, 17800700 1.7,211811 CRIA~p~i 781~- ~, 3119

Dogolng Proaesa of aopply And tnta- alo f prefab (oard March 31,198

PART J: MUNOICIPAL.AND ANCHAL. CMDA/Rnici- kDVE111P11NT paliti -

Peugr-ttoh d-iatld andiagred upon by IRDA -nd the Ama tia-o April- Mar0170731,198 ,19--78--I ------

LE0END: - - - - Clue- t h-sbe , or-panainah-mee

…----D-aigand tedern INDIA

SECOND CALCUTTA 0URBAN DEVELOPMENT PROJECT

ig1 9 77 191 8 1 9 79 1 9 80 1 981I 1 98a2 EA;:,.,y3 2 4 1 2 3 4 ~~ ~~~~~~~12 3 4 1 2 31 4 8 2 3 4

PART IV, TRAFIC ANDTRANSPORTATION CMDAICITI F-Y 19 77 FY 19 8/79 P 1992/80 P0 19 0/81 ____P 19 1/82 HIT/Pol ice7 7 -y ______

Pnagrao no be deEeil.d ad ag-ed…1I9…arh31,198;

Road ronp--, Projecre

Po_ hoeRod *r ~ s . ,/9UlEE -ti~3 1ad -erq.i-ed h.. been MaberdabRoad Cl. ac~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~119.q.ir-d. lee-1dalheElt--'nia..i"2J_ nO1981

H.nr.b METoarch 91,198(

/12 Lend ~Acqoleltlon ~ ~ ~ ~ ...... 1 LI E.M. Bypn.. p-np-r, nd P-rk Reeed ARln.trooi- ...... 78 ___ - ,g ,~1 IEa lneno Kae Enpr -newei- Oypy... - -t- J,19D i9 m'. j19eebbebe Coneter n

ef eRrd beerblde eleg Ra.hbbeber Klyn Adilni,r-ti-, Fi.-i~d.l, L.gileltk- and Tenbn'i-l Aer-lonan.. AcEtone c ... arll be E,,pl.-1d by Apr11 1, 1979. Oppailn Dir,rn attl PEnanc- En Ebeaneeenelcar of CMD OW88 ... .aa..C..a prEn En Rn-d p--tni-ER

.y.t.. CHDA ~~~~~~~~~~~~~~~~~~~April1,1979

(iii) apr-jenl badgeting and i __0*0 Clg epenetCIlA ..... 30,197 April.... 1,1979 E)apr-j-cf n-anLbrEng eyeree CMDA8 . 4

Anne1 adite nI CC ecnal -t owB/CC ...... ea..b..year...... EcEeife dEe endae-i-n and 1

treeernEne nd endrenra ant G8WR/WBHB ..... c...... 9 1979

E.tebli.h EeEaEe M-ng-tn anitE CR48A/HI8-317 ......

Ke.tbli.b C-t-re Veba-Eti- B-ed Gcana...... 3.. 97.

En PI8Oa/VRIIlen 31,198

LEGEND: - - -- C-----b--,o-npnenainiia adrndrn 8 Cane.rat E-on, del iner end EnliCanad Erhc-ni ...ania_-n -tion- nn eRLend -cqn~lai-i procedIng, 817018llCA,LCUTTA 888-7 LEV8L8p~-i88tr ~P84,1?

C-P.-'r E .... 77 ~~~~~~19 19 78 [9719 1990 1981 ComponentAgency 1 18 7 3 4 8 2 3 1 ~ ~ ~~ ~~~~42 -3 4 1 2- 9 2 3 4Rea

7i)~ f.m.ie...rpamil ~ ~ ~ ~ ~~ ~GW porh 31, 1 78 (ii)impiemeprprapoaaie ...... M.tare~.. 31, .979

()Prepa. reprpWB/CpiA ...... ttlebre 197 of fin- Yp- at-m- e..3..o...... Cop.ide- & impie--p tm,p......

aetoCorp-potio UfWB/CC...... Ap,i 1, 1 79

(i prepre det.il pi-, pP GOWB/M-Umiei (ii)impiemeptproposale ...... ~~~~...... peeO 31 1978

(t) feppetprepare CP.A...... i,- 31, 1 78

.t)omee... p e.enAoniApr ... 1, 177

1d prepare-Peor t88i98 WBCMA.... - 31, 1989

(1 oi.popr- e ..... 8-8A1l ...... 78....-- 1 (if-)SprparLfasbite report......

(ii)aoeebeiehthpf-diOWmCa....t...o... A,il1, 9

COeternofi- 4 fae-omeLe- [p

Ii) C8gtl/11p8Aprepareprogeen .. 8 peepl 1, 1 78~ ~ ~ ~~~...... Apl,1, 08

(ii) impiemepratfop 411i~~~~~~~~~~~~~~~.hA )' itape431, 2 93 ~ ~ ~ ~ ~ ~ ~ ~ ~ -1 INDIA

SECOND CALCUTTA URBAN DEVELOPtENT PROJECT

Eey AdmnltroEivo, Financitl, Lwegis laCive. a-d Tcchnicol Ani-- tance Action-

1977 1978 1979 1980 1981 1932

Compon ent E AXgenc" 1- 2 3 1 2 3 4 1 2 3 4 U 2 3 I4 1 1 2 4 1 24 3 Re--rkt

'C Property Tax Revenue Collection T-r-er Ifn errneatv) GOWB/cc

(fi yr% ...... Apri 1, U SO (i.) ROT (i 'i'lgd/l ...... Apriiib I, 1.. 10182 pi 1, A

Renie and Implement"mproIenente in iccounting. Utoree and FinnOanil Man..enent in CC: GOWE/CC

(io) fter finai eport ......

Eatabliah an orban enaUt-tcole entr_

anditeeeinn u -n R the Totte. e mnit-orIng.d nervie i DA OW/MDA ...... Arli 1, 1938 JnlynlTnl 00 dnmnnd for and nyoll- abiity or. Cl ryho - ...... Jun- 0, 1 8

SEC Studies CMAl...... Den r 1 1978

Solid Wattent CMDA/CC (i) dnige of -krfebp. mo (ii) pilot pr-je-tt and atdi- ...... -b-ene...... 3...... 31, 197

Traffi Et gioneering and Manegem-nt: CMDA

(ii)d m...e...... - b 1 , 1981

(ii) Rest ConabCMDAt ...... 0 D 31 1978 (iii) Fiah and Pan Markelt. o...... ecemer l 31, 1978

ublic Tr-onport Fe-sibility: C"DA/CTC/ CSTC (i) Ph=renICT June.. 0,1L. ... (ii) Phaee IIt.... F ... .. Marc1: 31, 1 79

erevelper FPlo- - 1981-86: CMDA

generalIi) land use preparation oR.d bg...... t...... Mrh 31r 18

(Ii) aaaerage and deain-ge planning tnd featbility tudies ...... 31 1980

:laa Rtd_...een 31 1900 INDIA

SECOND CALCUTTAURBAN DEVELOPMENTPROJECT

Detailed Cost Estimates (Rs crores)

LAND CIVIL WORKS EQUIPMENT, GOODS AND SERVICES Local Foreign CMDA COMPONENTSTO BE FINANCED Net Foreign Net Taxes, Foreign Net Taxes, Design and Sub- Physical Price GRAND THROUGHCMDA Costs Indirect Total Costs etc. Indirect Total Costs etc. Total Supervision total Conting. Conting. TOTAL

AREA DEVELOPMENT 3.01 8.52 0.88 9.40 1.64 0.20 0.28 2.12 0.24 0.11 0.35 0.21 15.09 1.48 3.29 19.86

West Howrah / 1.77 1.99 0.24 2.23 0.04 - - 0.04 - - - 0.01 4.05 East Ca.2utta- 1.04 5.74 0.52 6.26 0.84 0.12 0.14 1.10 0.24 0.11 0.35 0.15 8.90 Markets- - 0.20 0.02 0.22 0.72 0.08 0.14 0.94 - - - - 1.16 Washermen/Milkmen Work Areas/! 0.20 0.59 0.10 0.69 0.04 - - 0.04 - - - 0.05 0.98

RUSTEE IMPROVEMENT 0.07 17.29 3.00 20.29 0.56 0.08 - 0.64 - - - 1.47 22.47 3.15 5.74 31.36

SCHOOLS 0.15 1.54 0.26 1.80 0.15 0.05 - 0.20 - - - 0.14 2.29 0.20 0.77 3.26

HEALTH AND NUTRITION 0.02 0.13 0.01 0.14 0.04 - - 0.04 - - - - 0.20 0.02 0.08 0.30

WATERSUPPLY 0.10 3.88 0.18 4.06 5.06 0.28 0.53 5.87 0.27 0.27 0.54 0.74 11.31 1.05 2.20 14.56

SEWERAGEAND DRAINAGE 0.25 15.21 0.80 16.01 2.06 0.18 0.31 2.55 0.67 0.52 1.19 1.40 21.40 2.00 3.92 27.32

SOLID WASTES MANAGEMENT 0.16 2.50 0.38 2.88 3.34 0.32 0.33 3.99 1.04 0.89 1.93 0.63 9.59 0.27 1.86 11.72

SANITARY LATRINES - 0.39 - 0.39 1.29 0.15 0.14 1.58 - - - 0.14 2.11 - - 2.11

MUNICIPAL AND ANCHALDEVFLOPMENT - 4.98 0.85 5.83 0.16 0.01 - 0.17 - - - 0.42 6.42 - - 6.42

TRAFFIC AND TRANSPORTATION 6.30 10.99 1.67 12.66 3.64 0.61 0.43 4.68 1.81 0.71 2.52 1.82 27.98 1.61 5.17 34.76

Traffic Engineering & Manage- ment Improvement Schemes - 1.89 0.25 2.14 1.65 0.35 0.27 2.27 1.06 0.30 1.36 0.44 6.21 Road Maintenance Equipment and Street Lighting 0.40 0.32 0.02 0.34 0.78 0.20 0.05 1.03 0.50 0.05 0.55 0.12 2.44 Road Schemes 5.90 8.62 1.40 10.02 1.18 0.05 0.11 1.34 0.25 0.36 0.61 1.25 19.12 Terminals - 0.16 - 0.16 0.03 0.01 - 0.04 - - - 0.01 0.21

Sub-total 10.06 65.43 6.03 73.46 17.94 1.88 2.02 21.84 4.03 2.50 6.53 6.97 118.86 9'.78 23.03 1 6

TECHNICAL ASSISTANCE AND TRAINING - - - - 2.09 - - 2.09 0.66 - 0.66 2.75 - 0.58 3.33

TOTAL COMPONENTSTO BE FINANCED THROUGHCMDA 10.06 65.43 8.03 73.46 20.03 1.88 2.02 23.93 4.69 2.50 7.19 6.97 121.61 9.78 23.61 155.00

_ __ _ F3 B~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~3I /I Tncludes Rs 1.45 crores building materials loans. ExcMides (i) approximately 13 crores rI r to be provided by cormercial ban/ks and WbHB to develop MIG and LIG home6 and commercial .tructures, etc., and (ii) Rs 7.12 crores equivalent provided by the Netherlands Gover-mcent. - /2 Excludes approximately Rs 1.83 (excluding supervision and contingencies, etc.) requlired by the commercial banks to complete Phase I. INDIA

SECOND CALCUTTAURBAN DEVELOPMENT PROJECT

Calcutt. Meprtpolitan Development Authority

Five-Year Ineret-ent Pro-rU. (1977/78 to 1981/82)

(All figure= incrores of rupees)

1977/78 1978/79 1979/80 1980/81 1981/82 Tot.l 1977/78 - 1981/82 GRAND SECTOR Non-IDA IDA I IDA Ei Total Non-1DA IA I IDA II Total Non-IDA IDA I IDA I1 Total Nou-IDA IDA I IDA II Totol Nor-IDA IDA I IDA II Total Nor-IDA IDA I IDA II TOTAL

1. Area De-elnp.e.t-(a) 0.42 0.25 - 0.67 0.38 0.65 - 1.03 0.38 0.08 - 1.26 0.37 0.50 - 0.87 0.46 - 0.46 2.01 2.28 - 4.29 (b) 0.40 - - 0.40 0.50 - _ 0.50 0.72 - 0.72 0.82 - - 0.82 1.04 - - 1.04 3.48 - - 3.48 (c) - 0.10 1.31 1.41 - 1.34 2.88 4.22 - 1.45 4.51 5.96 - 1.59 4.03 5.62 - 0.45 2.15 2.60 - 4.93 14.88 19.81 0. 35 T31) T~4 0.-88- E0-9- 2. 808 37-5 i-iT - - - - - Ti.i 2.0o9 Z.of 773- 1.5 0.45 ~ 1 49 .21 27.98

2. Baoter Ioprovenent 0.05 - 2.85 2.90 - - 3.20 7.28 - - 5.15 5.15 _ - 4.92 4.92 - - 4.80 4.80 0.05 - 21.00 21.05

3. Sc.oula 0.02 - - 0.02 - - - - - 8.201 .00 1.15 1.15 0.02 - 2.15 2.17

4. Nen-th - _------0.10 0.10 - _ 0.10 0.10 - - 0.20 0.20

5. Water Supply 3.50 3.47 1.29 8.26 3.30 3.21 2.06 8.57 3.00 1.47 2.42 6.89 4.70 - 2.41 7.11 4.70 _ 2.39 7.09 19.20 8.15 10.57 37.92

6. Sewerage & Dralo-ge 1.02 2.58 2.53 6.13 1.28 0.81 4.72 6.81 2.00 - 5.09 7.09 2.14 - 4.81 6.95 1.68 - 2.85 4.53 8.12 3.39 20.00 31.51

7. Solid Wastes Mg.nt. - 0.18 1.12 1.30 - - 1.75 1.75 - - 2.04 2.04 - - 2.03 2.03 - - 2.02 2.02 - 0.18 8.96 9.14

8. En-ir-rr-ntsl Hygie.e & Sn-it-ry Letri-es - 0.17 0.15 0.32 - - 0.50 0.50 - - 0.50 0.50 - - 0.52 0.52 - - 0.30 0.30 - 0.17 1.97 2.14

9. Traffic sod Tesn.p. 3.78 5.88 1.51 11.17 2.06 5.96 3.20 11.22 1.75 - 7.60 9.35 2.31 - 7.85 10.18 2.47 _ 6.00 8.47 12.39 11.84 26.16 50.39

10. Te-heical Assistance - 0.66 0.49 1.15 - 0.63 0.45 1.08 - _ 0.50 0.50 - - 0.75 0.75 - - 0.56 0.56 - 1.29 2.75 4.04

11. On-ivnpal & A-h1al Development - - 1.00 1.00 - - 1.10 1.10 - - 1.20 1.20 - - 1.30 1.30 - 1.40 1.40 - 6.00 6.00

12. Par-k 0.23 - - 0.23 0.10 - - 0.10 0.10 - - 0.10 0.10 - - 0.10 0.10 - - 0.10 0.63 - - M,3

13. BPsic Map 0.20 _ - 0.20 0.25 - - 0.25 0.35 - _ 0.35 0.39 - - 0.35 0.35 _ - 0.35 1.50 - -

So,b-total 9.62 13.29 12.25 35.16 7.87 12.60 19.94 40.41 8.30 3.80 29.01 41.11 10.81 2.09 29.78 42.62 10.80 0.45 23.72 34.97 47.40 32.23 114.64 194.27

CGDA DesIgn & Supervi.ion 1.75 - 1.27 3.02 1.85 - 1.34 3.19 1.95 - 1.41 3.36 2.10 - 1.46 3.56 2.24 - 1.49 3.73 9.89 - 6.97 16.86

Cottingencies - 0.66 1.47 3.13 _ 1.29 5.35 6.64 - 0.60 0.72 9.32 _ 0.23 9,68 9.91 _ 0,05 8.17 0.22 - 3.83 33.39 37.22

TOTAL 11.37 14.99 14.99 41.31 9.72 13.89 26.67 50.24 10.23 4.40 39.14 53.79 12.91 2.32 40.86 56.09 13.04 0.50 33.38 46.92 57,29 36.00 155.00 248.35 I

/1 COteo-ies (a), (b), and (v) represent only internal -r-nia-ti-on af project developnpat anita iR CODA. /2 E-cludes program e-pendituros on -nid-rnified schema (Rs 22.35 cro...) and capital e-pend.tatoi an operating --coto (Rs 3.90 crorenl. ANNEX 12 - 184 - Table 3

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Summary of Equipment to Be Financed under the Project (US$ million)

Estimated Category Value

Under International Competitive Bidding (ICB)

Workshop equipment 0.50

Pumps and accessories 1.80

Heavy vehicles, bulldozers and pipe jacking equipment 5.50

Sewer cleansing equipment 0.90

Road construction equipment 3.20

H.D.P. pipes and specials 0.90

Water metering equipment, pipe cable locators and other meter equipment 0.20

Subtotal 13.00

Under Competitive Bidding Advertised Locally (LCB)

Transformer and switchboard equipment 0.20

Concrete mixers and accessories 0.02

Traffic operation equipment 0.80

Valves and accessories 0.07

Steel poles 0.50

Light vehicles 0.20

Handcarts and bicycles 0.50

Concrete pipes and specials, all kinds 5.50

Stoneware pipes and specials 0.24

Miscellaneous equipment of small quantities 0.50

Subtotal 8.53

Total 21.53 ANNEX 12 185 ~~~~~~~Table4 - 185-

INDIA

SECOND CALCUTTA URBAN DEVELOPMENT PROJECT

Schedule of Project Implementingand Operating Agencies

Agency Agency Responsible Responsible for Operation Project Component for Execution and Maintenance

Area Development

Sites and Services

Physical Works CMDA CMDA/Municipalities

Community Development CMDA GOWB Agencies

Building Materials, or Self-Help Construction Loans WBHB WBHB

Industrial Estates WBSIC WBSIC

Fish and Pan Market Re-Development CMDA CMDA

Bustee Improvement CMDA CC/Municipalities

Primary School Construction CMDA Education Department, GOWB

Health CMDA Health Department, GOWB

Small-ScaleEnterprises CSSI/NominatedBanks CSSI/NominatedBanks

Water Supply CMDA/CC CMDA/CMWSA/CC

Sewerage and Drainage and CMDA/CMWSA/HIT/CC/ CC/CMWSA/HIT/IWD/ Sanitary Latrines IWD Municipalities

Solid Waste Management CMDAJCC/Municipalities CC/Municipalities

Municipal and Anchal Municipalities/Anchals/ Development CMDA/Municipalities Panchayats

Traffic and Transportation

Traffic Operations CMDA/Police/CIT CC/Police

Roads and Terminal Facilities CMDA/HIT GOWB (PWD Dept.)/CC/HIT

Technical Assistance GOWB (DMS)/CC/CMDA/ CSTC/CTC I/

1/ CSTC - Calcutta State Transport Corporation Ltd.,

CTC - Calcutta Transways Company Ltd. INDIA SECOND CALCUTTA URBAN DEVELOPMENT PROJECT Calcutta Metropolitan Development Authority-Proposed Organizational Structure

CMDA Board

Chairman

Chief Executive Officer

Project Appraisal fManagementInformation Unit and Monitoring Unit J I

Directorate of Directorate of Internal Directorate of 1 Operations _ FinancialServices _ Audit _ _ _ _ Administration

Director, Water Supply Directorate of Plannring Services EegalUnit Director, Sewerage and Drainage

Director, Traffic and Transportation

Director, Area Developmentand Traffic EngineeringCell Bustee Improvement Sewerage and Drainage Planning and Director, Material Purchase and Design Cell Stores Stores Economic and Social Support Coordination Unit

Solid Wastes Project Group

World Bank-17580 - 187 -

EXISTING CONDITIONS FOR WASHERMEN,EAST CALCUTTA

- 188 -

WS:;2 S:S~~~~~~~~~~~~

. W '7 .,- _';'r W/ X . O .. L',,- D'r .

C ... .''t ,~~~~~~~~~~~~~~ .4 y.''._.:o

* ' ' ' "" - ' * ' ; ' ' ' '' ''.r i 4A

- J r $ ,"- ,y <" X ,-.' . . <-' 5' . S ' . _ '. "'.1',5 . . -, , - , .,. , .eq _, . -,,. : 4

. ' . .; . / q ~~~~~~~<

4~~ ~ ~~~ ~ ~ ' .'. ,A '. , ; '

.. ;, : 4.....' ' 4,..',' ...... ,,'_' . .'.

-~~~~~ .,.5 <2,½j'

STREETFLOODNGINLOW-LING CD ARE

- 189 -

1~~~~~~ >

LOADING SOLID WASTE FROM AN OVERFLOWING STREET DUMP.

TYPICAL CONDITIONS IN AN BUSTEE AFTER IMPROVEMENT UNIMPROVED BUSTEE

190

CONETIN N TE H H FH M ET

CONGESTION IN THE HOWRAH FISH MARKET

- 191 - INDIA SECONDCALCUTTA URBAN DEVELOPMENTPROJECT E.W.S.-I & II (RENTAL)

10OROOMDORMITORY RENTAL \ / / ~~~~~~~~~~~~UNITSfor E.W.S. I & II

SECTION 11

20.0 m.

Rm. i Rm.1 Rm2Rm. 2 ~~BLOCKtm p6"E4 := R m.3 Rm. 4| 1 COOKING AREA

Rm. 5 Rm.6 Rm. 7 Rm.8 Rm.9 Rm 10

L..c2i .I _ _ PLAN

World Bank--17572

- 192 - INDIA SECOND CALCUTTA URBAN DEVELOPMENT PROJECT E.W.S.-Ill (OWNERSHIP)

PLINTH WALL

STAGE-I STAGE- 1ll

STAGE - Il STAGE - IV

4.5 m.

L__

STAGE-I STAGE II STAGE -IlIl STAGE - IV

PLOT AREA -44m 2 INCREMENTAL PLOT DEVELOPMENT World Bank-1 757:3

INDIA SECOND CALCUTTA URBAN DEVELOPMENT PROJECT E.W.S.-IV (OWNERSHIP)

BATH

PLINTH WALL\/

STAGE - I STAGE- III

STAGE-Il STAGE-IV

6.1 m.

CN X L L~~~~~L co

STAGE-I STAGE-II STAGE- III STAGE-IV

2 PLOT AREA - 50m INCREMENTAL PLOT DEVELOPMENT

World Bank-17574

- 194 _ INDIA SECONDCALCUTTA URBAN DEVELOPMENTPROJECT L.I.G. (OWNERSHIP)

q ov E~~~ ~~~~~ATH

PLINTH WALL <

STAGE- I STAGE -Il

STAGE -II STAGE - IV

1 6.1m

STAGE -I STAGE - 11 STAGE-Il STAGE - IV

2 PLOT AREA - 60m INCREMENTAL PLOT DEVELOPMENT

World Bank-17576

- 195 -

INDIA SECONDCALCUTTA URBAN DEVELOPMENTPROJECT

ISOMETRICOF CLUSTER OF CORE HOUSES \ ', X ~~~~~~~~~OFTYPES E.W.S. -III, E.W.S. -IV, & L.l.G.

World Bank-17576

- 196 -

INDIA SECOND CALCUTTA URBAN DEVELOPMENT PROJECT HOWRAH FISH AND PAN MARKET AREA REDEVELOPMENT

I II

Middle Income Housing Phase 2

Low Income Housing (2) Dormitory Bridge

|lL1[ - 11 ng Elevation/Section 1-1

Financed by:

l.D. A.

D Commercial Banks

Middle Income Housing Office Towers - Phase 1 - Phase 2 Financed by Commercial Banks

Existinig Buckiand Low BridgE Income Housing ___ Section2/2_Housn __ S11t1 JE

World Bank-17577

INDIA SECOND CALCUTTA URBAN DEVELOPMENTPROJECT Howrah Fish and Pan Market Area Development

Haroohan Boe RFoad Hariohan B.os. Road H-r-mohao Bose Road

Prpoe PlnPoosdPa (TStsTtT E 0svn

GroundLeve Dec

I C Rose Rood~~~~~~~~~~~~~~~~ CB-R

Pro,os d Plan. ProposedPi.o BoE.inigSite Deck Leo-I Gro...d L-oe W.IrVdB-ok-17578

INDIA SECONDCALCUTTA URBAN DEVELOPMENT PROJECT

DISTRICTSWITHIN CALCUTTA METROPOLITAN DISTRICT , . 'y

EXISTINGFEATURES - National H,ghoays - Ma1o, Roads _Minra Roads Railroads 7 '' ' 3oidges .- . N / 5Wi I Conals, Channels - Corporation and Municipality Boundaries Kalyani-Bansberic… Boundaries -. - - -Ccicutto Metropolitan Boundaries __ District Boundaries, International Boundaries J

o [~~~~~OMETERS

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tE i E ,; SURMA <4 - .. a-\;.R.S~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Z

INDIA ,e p SECOND CALCUTTAURBAN DEVELOPMENTPROJECT , TRANSPORTATION AND TRAFFICIMPROVEMENT SCHEMES / .

EXISTINGFEATURES National Highways - Major Roads Minor Roads A A C Railroads : Bridges fid VAIAA

IDA 11PROJECTS. ( F---r Road Widewng and ImprovementSchemes c-< /t Major Highways / AVid-, : Area CirculationScheme i_ / AiSli

Terminal Pro1ects I A,.e .-s, x- StudyArea for Traffic Operations Improvement -vpsurr - <.. 4>

OTHER MAJOR PROJECTSUNDER CONSTRUCTION. j ( - Bridges Roads -- 5AsAr / Rapid TransitSystem /

C…;poration and Municipality Boundaries a -

- - -- - Kalyan,-BansberiaBoundary w .AAAAT AnAAAAiAA ---- Calcutta MAetropolitan Boundcaries > , , -- International Boundaries

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IBRD 12875R SEPTEMBER 197-T INDIA SECONDCALCUTTA URBAN DEVELOPMENT PROJECT TypicalBustee Improvement Plan

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EXISTI NG FEATURES

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PROPOSEDPROJECT 0; .1S - Co 't AccessLanes [/.< ,.p BlackTopped / i :- 8 BrickPaved -i/:,/X/ Water Mains . 0/ Drainage Channels<~D; EA Sanitary Toilets,converted _ _ -== \ \/g/ \ O Street Lighting Poles BrdeP O T T E R y/>t Dust Bins, Garbage Vats _.= D -\0 0 Deep Tube Wells ..\ with Pump Houses..\ -

o so~~~~~~~5 100 EETERS

WNLT J1n AtI~a ,. oN. ~CH I5130 N A hD{sSdt:lz-,u1 .... =

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FILOM ETER S X , f/

INDIA SECONDCAlCUTTA URBAN DEVELOPMENT PROJECT PRIMARY SCHOOL COVERAGE IN CALCUTTA CORPORATION AREA

PAIT H TACI N A 4 T A

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INSTITUTIONAL HEALT___- i EVCSI CALCUTTA C RO TION~ ARE AA

AREA COVERED BY OSPITALS

J, I EA CO,,E TER-LTICES VESUANDNOTHERHEPAND ' -

L _.JAREASCOVEHEDBYOTHERHEALTHSERVICESONLY

L 2AREASNOTCOVEREDBYANYINSTITUTIONALMEDICALFACILITIES a'", . _ _

_ -- - a,JRDOUNDARIES'D /' ', - ALCUTTA CORPOHATIDN BUDRF

KILOMEIERS

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SECOND CALCUTTAURBAN DEVELOPMENT PROEA

INDIA SECONDCALCUTTA URBAN DEVELOPMENT PROJECT Q> CMDWATER SUPPLY SERVICE DISTRICTS \ AND MAJORFACILITIES ,

Urban Area with GroundWater Supply ) I .. Service District Boundcries / O TreatmentPlant and Major PumpingStation (Existing , or Under Construction) - r ExistingTransmission Main ProposedTreotment Plants Canals, Channels Major Roads Other Roads Railways -- _ Corporationand MunicipalityBoundaries | 7 _____…Kalyoni- BansberiaBoundaries CalcuttaMetropolitan Boundaries Li --.- InternationalBoundaries

I 10 15 KILOMETERS

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INDIA 1 SECOND CALCUTTAURBAN DEVELOPMENTPROJECT CMD DRAINAGEBASINS AND SEWERAGEZONES

Zone Boundaries A' ::BasinBoundaries i ExistingPumping Stations , \ Proposed PumpingStations , -C Chonnels,Canols - Major Roads _ Other Roads Railways j :F Corporation and Municipality Boundaries V Kalyani-Bonsberio…---- Boundaries U cISiUSUSA] - --- Calcutra Metropolitan Boundaries . International Boundaries .

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X = - - M CFPT MFen 197 1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~11101 INDIA ! = SECONDCALCUTTA URBAN DEVELOPMENT PROJECT i== EAST CALCUTTAAREA DEVELOPMENTPLAN ,/ __ I.;

EXISTINGLAND USE PROPOSED PROJECT __j ______. __ _ - W. 1-reboo A-, .l R..d,

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------.~AND NTEGRATFIC PONDING SYSTEM

<'U --- , ~~~~~~~~~~~~~~~~IM,ke-e' Dorrwtoy 0~ ~ ~ ~ ~ ~ SLUDOT-i~~~~~~~~~~~~~~2 Milk1 Collcton ee DRY FlIT ~~~~~~~3Cortle Shede ARCA ~~~~~~4VereriovoyCli-i CFodder Store 6 Wol1oo-,,gTe1, 7 Comm,ritY Cenrer r FrneY'u Sco-l 8 We-h.errees L-eg Areo 9 Rio De FiorPrr I We-hi,,g So.bo II Opertor Roo -nd Lenbrt-ry2 12 Sto-ge R.or. fee Eq,,ip-et (Fishpond)

IBRD 13017

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SPIN R I 4 '-A 4C.44

~- 444-3 - 434 LIVUL¶21i2 F-A' 4 A~~~~~~~~~~~~~~~EF-A 3 L 14 E

PRMARY 43 4 F~~~~~~E3 A

«1 13 HI H~~~~~~~~~~~~~~~~~~~~miH. -i H H- H-2

1 4~,

- 43 4-A 4-4 13 jjj~~~~~~jjJ II I ~~~I 4 1 H-A-

~~JjProposedRental Butldins ~Proposed- Residential Lots- 4 4A 44 4 GrerenAreas Trees 44 44 -E j~H Pr mary School E44 - E~ 4A- FA

Roads 43 I44 4 4

Footwoys 4A FA FA A 4-m

l~~~~~44tcrtnI 14414~ ~- P 411~~~~~~~~~~~~~~~4 ji3 ' -LE- I -

Scherdu e of Lotsand Rental UnIts 4 - -

ES1&2 25 30

______E -4 752 152 ______

M1 40 402. -L

M-11 16 1 5 INDIA CHINA 2 1- 1 2 CALCUTTAPAKISTAN - 42A 10 10 ~~SECOND CLUT

- ~~~~~~~~~~~~~~~~~~~URBANDEVELOPMENTIPROJ% EC

4143 ~~~~~~~~TYPICALFOUR HECTARE RESIDENTIAL CLUSTERNS

PHR..& 11A14 I, 24 0 55O 100 3 4 ASPI METERS

14 21 NHtIDBAr ly 1522 Si-/h. 44 HH1 44m4,3114 ; - 4 HI 4 'H 1 14 SR, K D-rIIy mjP543041443414- 1514 LJ-,l/,lI 1 4 1