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The World Bank Public Disclosure Authorized

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The World Bank Public Disclosure Authorized Document of The World Bank Public Disclosure Authorized Report No: 23448-IN PROJECT APPRAISAL DOCUMENT Public Disclosure Authorized ON A PROPOSED LOAN IN THE AMOUNT OF US$255 MILLION TO THE GOVERNMENT OF INDIA FOR KERALA STATE TRANSPORT PROJECT Public Disclosure Authorized February 14, 2002 Energy and Infrastructure Sector Unit India Country Management Unit South Asia Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective January 28, 2002) Currency Unit = Indian Rupee (NR) INR 1.00 = US$0.02 US$1.00 INR 48.00 FISCAL YEAR April 1 -- March 31 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank MTFP Medium-Term Fiscal Plan BPIP Borrowers' Project Implementation Plan MTR Mid-Term Review CAS Country Assistance Strategy NCB National Competitive Bidding BOT Built Operative Transfer NGO Non-Governmental Organization EA Environmental Assessment NH National Highways EMP Environmental Management Plan NHAI National Highways Authority of India EIA Environmental Impact Assessments NPV Net Present Value EOP End of Project O&M Operation and Management ERR Economic Rate of Retum PAF Project-Affected Family ESMP Environmental and Social Management Plan PAP Project-Affected Person GIS Geographic Information System PCC Project Coordination Consultant GOI Government of India PFMS Project Financial Management System GOK Government of Kerala PMR Project Management Report ICB Intemational Competitive Bidding PMT Project Management Team ICR Implementation Completion Report PWD Public Works Department ID Irrigation Department QCBS Quality- and Cost-Based Selection IDS Institutional Development Strategy RAP Resettlement Action Plan IRI Intemational Roughness Index RIMMS Road Information and Maintenance Management ISAP Institutional Strengthening Action Plan RBOCK Roads and Bridges Development Corporation of Kerala IWT Inland Water Transport R&R Resettlement and Rehabilitation MDR Major District Road SA Social Assessment MOEF Ministry of Environment and Forests SEA Sectoral Environment Assessment MORTH Ministry of Road, Transport and Highways SH State Highways Vice President: Mieko Nishimizu Country Director: Edwin R. Lim Sector Director: Vincent Gouarne Task Manager: Stein Lundebye INDIA KERALA STATE TRANSPORT PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key performance indicators 2 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 2 2. Main sector issues and Government strategy 3 3. Sector issues to be addressed by the project and strategic choices 6 C. Project Description Summary 1. Project components 7 2. Key policy and institutional reforms supported by the project 8 3. Benefits and target population 8 4. Institutional and implementation arrangements 9 D. Project Rationale 1. Project altematives considered and reasons for rejection 10 2. Major related projects financed by the Bank and other development agencies 11 3. Lessons learned and reflected in the project design 12 4. Indications of borrower commitment and ownership 13 5. Value added of Bank support in this project 14 E. Summary Project Analysis 1. Economic 14 2. Financial 15 3. Technical 16 4. Institutional 16 5. Environmental 19 6. Social 22 7. Safeguard Policies 25 F. Sustainability and Risks 1. Sustainability 26 2. Critical risks 26 3. Possible controversial aspects 27 G. Main Loan Conditions 1. Effectiveness Condition 28 2. Other 28 H. Readiness for Implementation 29 I. Compliance with Bank Policies 29 Annexes Annex 1: Project Design Summary 30 Annex 2: Detailed Project Description 33 Annex 3: Estimated Project Costs 36 Annex 4: Cost-Benefit Analysis Summary 37 Annex 5: Financial Summary 43 Annex 6: Procurement and Disbursement Arrangements 44 Annex 7: Project Processing Schedule 56 Annex 8: Documents in the Project File 57 Annex 9: Statement of Loans and Credits 59 Annex 10: Country at a Glance 63 Annex 11: Institutional Development Strategy 65 Annex 12: Environmental and Social Assessment, Environmental Management Plan and 70 Resettlement Action Plan Annex 13: Road Safety, Strategy and Action Plan 74 MAP(S) INDIA Kerala State Transport Project Project Appraisal Document South Asia Regional Office SASEI Date: February 14, 2002 Team Leader: Stein Lundebye Country Manager/Director: Edwin Lim Sector Manager/Director: Vincent Gouarne Project ID: P072539 Sector(s): TH - Highways, TP - Ports & Waterways Lending Instrument: Specific Investment Loan (SIL) Theme(s): Transport Poverty Targeted Intervention: N Program Financing Data [XI Loan [ I Credit [ ] Grant [ Guarantee [ Other: For LoanslCredits/Others: Amount (US$m): 255.00 Proposed Terms (IBRD): Variable Spread & Rate Single Currency Loan (VSCL) Grace period (years): 5 Years to maturity: 20 Commitment fee: 0.75% Front end fee on Bank loan: 1.00% Financing Plan (US$m): Source Local Foreign Total BORROWER 81.00 0.00 81.00 IBRD 158.50 96.50 255.00 Total: 239.50 96.50 336.00 Borrower: GOVERNMENT OF INDIA Responsible agency: KERALA STATE PUBLIC WORKS DEPARTMENT The Principal Secretary of the Public Works Department, Address: The Government of Kerala Secretariat, Trivandrum, Kerala, India Contact Person: Mr. Babu Jacob, Principal Secretary Tel: +91-471-327285 Fax: +91-471-327285 Email: [email protected] Address: Office of Chief Project Officer, Public Works Department, Trivandrum Contact Person: Mr. N.D. Kumar, Project Director Tel: +91-471-330787 Fax: +91-471-330787 Email: pdpiupwdgsatyam.net.in Irrigation Department Address: The Govenmient of Kerala Secretariat, Trivandrun, Kerala Contact Person: Mr. Jaya Kumar, Secretary Tel: +91-471-327550 Fax: +91-471-327550 Email: [email protected] Estimated disbursements ( Bank FY/US$m): FY 2003 2004 2005 2006 2007 2008 Annual 19.00 40.00 53.00 56.00 52.00 35.00 Cumulative 19.00 59.00 112.00 168.00 220.00 255.00 Project implementation period: Five years Expected effectiveness date: 06/30/2002 Expected closing date: 12/31/2007 00$ PADFom: RIW M . A. Project Development Objective 1. Project development objective: (see Annex 1) The project's principal development objectives are to improve traffic flow and road safety on Kerala State's primary road network, and to strengthen the institutional and financial capacity of Kerala's key transport sector agencies. The Project will support the above development objectives by: (a) improving the capacity and quality of highly congested State highways and major district roads; (b) improving road maintenance planning and management practices; (c) reducing accidents on major roads; (d) piloting an inland water transport (IWT) improvement component for selected canals: and (e) strengthening the technical, financial and management capacities of the Kerala Public Works Department (PWD) and the Kerala Irrigation Department (ID). 2. Key performance indicators: (see Annex 1) The key performance indicators for measuring the overall success of the project will be as follows: In the road sector: (a) reduction in vehicle operating costs and travel time by 20 percent on the approximately 1,600 km of roads to be upgraded and receive periodic maintenance under the project; (b) reduction in the international roughness index (IRI) to 4.5 m/km on approximately 600 km of road to be upgraded by the end of project (EOP); (c) reduction in road accidents by up to 30 percent by improving black spots along project roads; (d) increase in the portion of State highways in good condition (IRI = <4.5 m/km) by at least 50 percent by end of project (EOP), and (e) implementation of a time-based institutional strengthening action plan (ISAP). In the IWT sector: (a) a pilot program to improve about 100 km of navigable waterways by EOP; and (b) forrnulation of an IWT development program by EOP; based on an evaluation of lessons learned from the pilot component. B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 21852-N Date of latest CAS discussion: 04/05/01 The Project is consistent with the Country Assistance Strategy (CAS) for India. The Project will contribute to the CAS's key strategic objective of reducing physical infrastructure constraints to achieve the overall goal of poverty reduction, and to facilitate India's potential for long-term economic growth and social development. In the road sector, this involves expanding road capacity and improving national and state highways' serviceability, implementing institutional reform in national and State road agencies, and promoting the sector's role of the private sector in developing and managing the road network. The Project would be implemented in the context of a comprehensive program of fiscal reforms recently launched by the Government of Kerala (GOK) to bring its finances under control and on to a sustainable medium-term path, which would be essential to reverse the trend of deteriorating state finances in recent years. The new Kerala government, which assumed office in May 2001 published a White Paper on the State's finances in June 2001, thereby bringing to public attention the unsustainable trends in the State's finances and the need to take urgent, corrective action. The draft Medium-Term Fiscal Reform Program submitted by GOK to the Government of India (GOI) highlights the fact that past State expenditure policies have neglected physical infrastructure in the State's expenditure priorities, thereby lowering economic performance below its potential. The report emphasizes the need to correct this policy weakness, - 2 - particularly,
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