India - National Highway Project

Document of The World Bank FOR OMCIAL USE ONLY RePort No. 13644 PROJECT COMPLETION REPORT INDIA NATIONAL HIGHWAY PROJECT (LOAN 2534-IN) OCTOBER 25, 1994 Infrastructure Operations Division Country Department II - India South Asia Region This document has a restricted distribution and may be used bv recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  COUNTRY EXCHANGE RATE AND ABBREVIATIONS Currency Unit = Rupee (Rs.) Rs. 1 = Paisa 100 Rupee (Rs.)/US$ Exchange Rates and WPI (Yearly Averages) (April 1 - March 31) Wholesale Price Index Fiscal Year Rupees/US$ FY80/81 = 100 FY85 11.89 120.1 FY86 12.24 125.4 FY87 12.79 132.7 FY88 12.97 143.6 FY89 14.48 154.3 FY90 16.66 165.7 FY91 17.95 182.7 FY92 24.52 207.8 FY93 26.41 228.7 FY94 31.37 238.7 SYSTEM OF WEIGHTS AND MEASURES: METRIC Metric British/US system 1 meter (m) 3.281 1 kilometer (km) 0.621 I tkm ton-kilometer (0.621 ton-mile) I pkm passenger-kilometer (0.621 passenger-mile) ACRONYMS AND ABBREVIATIONS BB Balfour Beatty Construction CCL Continenantal Construction Limited CRRI Central Road Research Institute DPR Detailed Project Report GOI Goverment of India ERR Economic Rate of Return HDM Highway Design and Maintenance Model ICB International Competitive Bidding MOST Ministry of Surface Transport NH National Highways NHI First National Highway NPV Net Present Value PCR Project Completion Report PIC Project Implementation Cell PWD Public Works Department SAR Staff Appraisal Report  FOR OFFICUAL USE ONLY THE WOPLD BANK W80*0on, D.C. 20433 U.S.A Office of Director-General Operations Evaluation October 25, 1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on India National Hihway Project (Loan 2534-IN) Attached is the Project Completion Report on India - National Highway Project (Loan 2534-IN) prepared by the South Asia Regional Office with Part II contributed by the Borrower. The US$200 million Loan was approved in April 1985 and, after one year extension, it was closed on December 31, 1994, and US$96.6 million were cancelled. Except for the Bihar Rural Roads Project (approved in 1980 and unsatisfactorily completed in 1987), this was the only highway project financed by the Bank Group in India in almost twenty-five years. Resumption of lending was made possible by Government agreement to accept international competitive bidding and the project aimed to improve the institutional framework, to modernize the road construction industry, and to rehabilitate segments of the national highway network. The PCR states that the most important result of the project is that through its failures it has helped to expose the weaknesses in project implementation of the local road construction industry, of the Ministry of Surface Transport, and of the State Public Works Departments. Project results are indeed far from satisfactory. At loan closure, overall physical progress was only 48%. The bulk of the civil works will not be completed for at another three to four years. The project's institution- building objectives were not met. Studies have been completed but their recommendations are not being implemented. Preparation of project components by the Borrower was inadequate; implementation capabilities of both local contractors and of the Government of India were overestimated by the Bank; prequalification of contractors was poor; relationships between the Ministry of Surface Transport and State Public Works Departments were ill-defined; and experienced consultants were not used. The project outcome is rated as unsatisfactory, its sustainability as unlikely, and its institutional impact as negligible. The PCR is of good quality and notable for its heroic attempts to predict the economic return of a half completed project. An audit is planned. Attachment This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not othervise be disclosed without World Bank authorization.   FOR OFFICIAL USE ONIY PROJECT COMPLETION REPORT INDIA NATIONAL HIGHWAY PROJECT (LOAN 2534-IN) TABLE OF CONTENTS Page No. PREFACE ...................................................... i EVALUATION SUMMARY ........................................... ii Introduction .... ...... .......................... ........ .. .. . ii Objectives and Project Description .................................. ii Implementation Experience ....................................... ii Project Results ..... ............ .... Project Sustainability ..................ii i Findings and Lessons Learned ..................................... iv PART I: PROJECT REVIEW FROM BANK'S PERSPECTIVE .................... I I. PROJECT IDENTITY .............................................. 1 II. BACKGROUND ................................................ I II. PROJECT OBJECTIVES AND DESCRIPT'ION ....................... 2 IV. PROJECT DESIGN AND ORGANIZATION ................ 3 V. PROJECT IMPLEMENTATION . ..................................... 4 VI. PROJECT RESULTS ........................ 7 VII. PROJECT SUSTAINABILITY ....................... 9 VIII. BANK PERFORMANCE .................... ..................... 10 IX. BORROWER PERFORMANCE .................. .................... 10 X. PROJECT RELATIONSHIP . ....................................... 11 XI. CONSULTING AND CONTRACTING SERVICES ..... .................... 11 XII. PROJECT DOCUMENTATION DATA ...............i................. lt This documient has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Table of Contents (Cont'd) Page No. PART 11: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE ...... ....... 12 1. PROJECT DESIGN AND ORGANIZATION .............................. 12 11. IMPLEMENTATION OF THE PROJECT ................................ 12 111. PERFORMANCE BY THE BORROWER ............. ................... 13 IV. BANK'S PERFORMANCE ...... .............. ..................... 15 V. RELATIONSHIP WITH THE BANK ................................... 16 PART III: STATISTICAL INFORMATION ................................. 17 TABLE 1: Project Data ......................................... 17 TABLE 2: Project Timetable ...................................... 17 TABLE 3: Related Bank Loans and/or Credits ........................... 18 TABLE 4: Project Finances ....................................... 18 TABLE 5: Expected and Actual Implementation .......................... 19 TABLE 6: Expected and Actual Cumulative Disbursements ................... 19 TABLE 7: Expected and Actual Cost and Expenditures ...................... 20 TABLE 8: Economic Impact ...................................... 20 TABLE 9: Field Mission Data Yearwise ............................... 21 ANNEX 1: Economic Evaluation recalculated following SAR (Scenario A) ... ......... 22 ANNEX 2: Economic Evaluation following actual implementation (Scenario B) ... ...... 29  PROJECT COMPLETION REPORT INDIA NATIONAL HIGHWAY PROJECT (LOAN 2534-IN) PREFACE This is the Project Completion Report (PCR) for the National Highway Project in India, for which Loan 2534-IN in the amount of US$200 million was approved on April 15, 1985. The loan was closed on December 31, 1994, one year behind schedule. Actual loan disbursements totalled US$103.4 million, due to the cancellation of US$37 million in FY92 and US$30 million in FY93. A further US$29.6 million was cancelled after May 11, 1994 which was the date of the last disbursement on the project. The PCR was prepared by the Infrastructure Division of the South Asia Country Department (Preface, Evaluation Summary, Parts I and III) and the Borrower (Part II). It was sent on June 6, 1994, to the Government of India for comments on the parts drafted by the Bank. Comments together with Part II were received on June 24, 1994. Preparation of the Bank's contribution to this PCR was started during a mission to the country in May 1994, and is based, inter alia, on the Staff Appraisal Report (SAR), the Loan Agreement, supervision reports and project files.   - ii- PROJECT COMPLETION REPORT INDIA NATIONAL HIGHWAY PROJECT (LOAN 2534-IN) EVALUATION SUMMARY Introduction 1. The National Highway Project (NHI) was the first project in the highway subsector in almost twenty five years. The reason for this long gap in lending was the preference by the Government of India (GOI) to use local competitive bidding for highway projects. The resumption of lending to the highway subsector was warranted by the Bank due to the increasing congestion and deterioration of the National Highway (NH) Network, and its increasing importance in the transport modal split. Obiectives and Project Description 2. The project's objectives were to improve the institutional framework, modernize the road construction industry, and rehabilitate/construct segments of the NH network. These objectives were to be met through: (a) the construction/rehabilitation of about 520 km of highways in six states, the works ranging from a new 92 km expressway to simple highway strengthening, and including a major bridge across the Ganges at Varanasi; (b) the procurement of imported equipment to assist MOST and the State Public Works Departments (PWDs) to monitor road condition and usage, and to promote road safety; (c) technical assistance and training of MOST/State PWDs personnel; and (d) studies by consultants/GOI research groups regarding modernization of India's motor vehicle fleet and desirable levels of road user charges. Implementation Experience 3. The overall responsibility for the implementation of the project was with the Ministry of Surface Transport (MOST) even though the actual preparation and management of the physical works was to be done by the State PWDs on an agency basis. 4. The implementation record of the project is mixed at best. The bulk of the civil works components of the project were not completed and will not be completed for at least another three to four years. At loan closure, the overall physical progress of the project was only 48%. A total of US$67 million has been cancelled from the project before loan closure and a further US$29.6 million will be cancelled after loan closure. This gives a total disbursement for the project of US$103.4 million (over a 9 year period) out of a project total of US$200 million. 5. The non civil work components of the project were implemented even though there were major delays. All of the major items of equipment have been procured and are being used. The  - iii - training/TA components of the project were fully implemented, leading to the transfer of skills and knowledge. GOI has commissioned and prepared all of the studies even though it has yet to implement their recommendations. Project Results 6. The physical objectives of the project were not achieved, with most of the civil work components not completed. With the exception of certain road sections in Punjab, none of the road subprojects are open to traffic and most of them will not be completed for at least another two to three years, all at a great cost to the economy. So far, the quality of the civil works that have been completed is of an acceptable quality. 7. The real costs of the civil works both in US Dollar and in Rupee (Rs.) terms seems to have decreased during the life of the project especially if the devaluation of the Rs. and inflation are taken into account. In nominal terms, at project closing the financial progress on the civil works was around Rs. 2500 million, consistent with the approximate 50% physical completion rate. 9. The project has had some success in achieving its non-physical objectives. The training and TA components of the project have improved to some extent the implementation capabilities of the borrower by exposing it to modern project management techniques. Also, it has helped introduce in the country modern construction and management techniques which today are more widely accepted and used. 9. Possibly, the most important result of the project is that through its failures it has helped to expose the weaknesses in project implementation of both the local road construction industry and of MOST/State PWDs. 10. Economic evaluation: the recalculation of the Economic Rate of Return (ERR) following the methodology used in the SAR was not possible due to insufficient data and the non-completion of most of the project components. What was done was to recalculate the ERR following as closely as possible the assumptions and data used in the SAR which gave an higher ERR (36% vs. 26%) and a lower Net Present Value (NPV) (Rs. 40374 million vs. Rs. 46324 million). The difference in the results can be explained by the use of different road roughness and congestion factors in the two exercises. The results of the first exercise where then compared to a second exercise which assumed the probable completion date for the project, final cost, and projected traffic growth. Actual traffic figures and expenditures for the 1987 through 1993 were used. The results of the second analysis produced a much lower ERR (29% vs. 36%) and NPV (Rs. 26032 million vs. Rs. 40374 million). The primary reason for the lower results were the long delays in the completion of project components (5 years in some cases) and the higher than forecasted traffic growth for the 1985 to 1993 period. The delays in the completion of the project components have lead to an economic loss of Rs. 14,342 million (US$463 million) to the Indian economy, which is more than the original project cost (US$ 424.7 million). Project Sustainabilitv 11. Due to the non-completion of most of the civil works components of the project it is difficult to evaluate whether or not the design life of the roads will be met. In one case (Punjab) the quality of the work that has been completed would indicate that the design life of the road would be met. However, the sample from Punjab is too small to draw any conclusions on the sustainability of all of the civil  - iv- works. Also, the amounts that will be allocated for the maintenance of the project roads has yet to be determined. Findings and Lessons Learned 12. Several findings and lessons emerge from the project, and some of them have already been incorporated in the design of the follow-on Second National Highway Project which was approved on April 14, 1992. Furthermore for the Third National Highway Project, a National Highway Authority will be established to better address the problems associated with the ill-defined relationship between MOST and the State PWDs, lax prequalification criteria, poor project preparation, and weak local road construction industry, that have negatively affected project implementation. 13. The single most important lesson of the project is the large economic cost of delays in the implementation of road projects in India. This is because of the high congestion on certain portions of the NH network, the rapid traffic growth, and the high roughness coefficients which give high rates of return for highway projects. Thus, delays in implementation of highway projects in India have a high economic cost as was the case in the NHI Project. 14. Some of the other lessons learned from the project were: (a) the need for stricter and more thorough prequalification criteria for contractors; (b) the need for a much clearer definition of the working relationship between MOST and the State PWDs; (c) land acquisition and the removal of utilities and other obstacles on the right-away should be completed before the award of contracts; (d) contractors must better prepare their price bids; (e) the need for consulting firms with international experience to do the engineering, design and supervision of works rather than doing it in-house; and (f) design and construction specifications not suitable for mechanized construction techniques.   PROJECT COMPLETION REPORT INDIA NATIONAL HIGHWAY PROJECT (LOAN 2534-IN) PART I: PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. PROJECT IDENTITY Project Name: National Highway Project Loan Number: 2534-IN RVP Unit: South Asia Regional Office Country Department II Country: India Sector: Transport (Infrastructure) Subsector: Highways II. BACKGROUND 2.01 The total length of the Indian road network is 1,890,000 km of which only 32,000 km (1.7% of the total) are classified as NH. The NH network carries about 35% of traffic in terms of vehicle-km, and if the share carried by state roads (6.8% of total network) is added, the combined total increases to 75 %. Over the last 30 years, road transport has become the dominant transport mode, and during the last decade it has been growing at over 10% per year. At present, the road network carries 55 % of all freight traffic in terms of ton-km and over 80 % of passenger traffic in terms of passenger-km for a combined share of about 75%. The vehicle population has grown from .3 million in 1951 to 21.3 million in 1991. 2.02 To meet the increasing demand for road transport, a twenty year road development plan (1981-2001) was prepared by the GOI with the objective of increasing the NH network from 32,000 to 66,000 km by the end of the period. This was a very ambitious target to attain, taking into consideration the fact that the NH network expanded by less than 10,000 km from 1950 to 1980. Also, the 8th plan (1992-1996) allocations for the NH system are only about 40% of what is actually needed to improve the current network (let alone expand it), making it virtually impossible to meet the objectives of the twenty  2 year road development plan. In addition, as a share of Plan funds, road investment allocations have dropped steadily from a high of 5.5 percent in the 4th Plan to 3 percent in the 8th Plan. More importantly, in the 8th plan the NH network will get only 20% of the road budget illocations even though it carries 35 % of the traffic. Thus not only has funding for road construction in general been inadequate, but a higher priority has been given to the construction of rural roads. In the future, unless there is a major shift in resources, funding for the NH network will remain inadequate to cope with the projected continued rapid increase in traffic. 2.03 With the exception of the Bihar Rural Roads Project, from 1961 to 1985 there was no Bank lending to the road subsector due to GOI's preference for local competitive bidding. Lending in the transport sector during this period was almost exclusively to Indian Railways and the port subsector. Due to the acceptance by GOI of International Competitive Bidding (ICB), the Bank resumed lending to the road subsector in 1985 with the NHI Project. 2.04 With the renewal of lending to the road subsector the Bank has had a more balanced lending program in the transport sector, better reflecting the growing importance of roads in the transport modal split. Since the NHI Project, the Bank has prepared a further two lending operations in the road sector; the States Road Project (1988) and the Second National Highway Project (1992) and is currently in the process of preparing two more. III. PROJECT OBJECTIVES AND DESCRIPTION 3.01 Obiectives:To foster institutional development by introducing modern methods of highway design and construction, strengthening capabilities to select and road investments by using techniques of economic evaluation, initiating studies to facilitate cost-recovery by establishing an appropriate system of road-user charges and to deterrnine to what extent and by what means modern, more fuel-efficient vehicles could be encouraged to use the road system, to develop the local contracting industry and to reduce present traffic congestion through selected road investments. 3.02 Project Description:The project consisted of the following components: (a) the construction/rehabilitation of existing sections of the NH network, together with the construction of two expressways, and a major bridge in the following States; (i) in Gujarat, construction of a new four-lane toll expressway (92 km long) connecting Ahmedabad and Vadodara, in the main Delhi-Bombay corridor of NH8; (ii) in Haryana, construction of an additional two-lane carriageway and strengthening of the existing two lane NH 1 for about 80 km between Murthal and Karnal; (iii) in Punjab, provision of an additional two-lane carriageway along with strengthening of the existing NH 1 (two lane width) for about 121 km between Sirhind and Jullundur; (iv) in Tamil Nadu, provision of an additional two-lane carriageway and strengthening of the existing NH 45 from km 27 to 67 (Madras-Dindigul section) and of the  3 existing two lane carriageway (along with provision of 2.5 m wide paved shoulders) from km 67 to 160 of NH 45; (v) in Uttar Pradesh on NH2, a 30 km two-lane bypass of the city of Varanasi, including a major bridge over the Ganges River; and (vi) in West Bengal, a new 65 km two-lane road, with at-grade intersections and service roads, linking the centers of Dankuni (about 20 km from) Calcutta) and Palsit, in the main Calcutta-Delhi corridor of NH2; (b) procurement of specialized equipment for monitoring road condition and usage, for facilitating bridge inspections and to provide equipment for vehicle testing stations; (c) technical assistance and training for the staff of MOST/State PWDs; and (d) studies (through Consultants or research organizations) relating to vehicle fleet modernization and desirable levels of road user charges. IV. PROJECT DESIGN AND ORGANIZATION 4.01 The conceptual foundations of the project were clear to the Bank from the very beginning of project preparation. In the early eighties, when the project was initially discussed with GOI, the Bank's objectives for lending to the highway subsector included institution building of the implementing agencies and construction industry modernization. To achieve these objectives, ICB, larger contract packages, and more stringent prequalification criteria were made sine qua non conditions for Bank participation. The acceptance by GOI of these objectives meant that for the first time ICB would be used in the road subsector, and that the NHI Project would be the catalyst to modernize the subsector. 4.02 In large part through the NHI Project, modern road construction and management techniques were introduced in the Indian context for the first time, making it a highly innovative project. At the time of the NHI Project the structure of the road construction industry was highly fragmented, with the industry being dominated by small contractors using labor intensive construction techniques, working on small contract packages supervised by PWD Engineers. This was the result of a deliberate policy by GOI of making contract packages small to attract the largest possible number of contractors on a project. This system has proven to be effective in the construction of rural roads, but not for the rapid construction of high quality roads needed to relieve the growing congestion, heavy axle loads and rough pavements on the NH network. 4.03 The increasing congestion and under investment in the NH network made the Bank's renewed participation in the subsector both timely and appropriate. After several years of on and off dialogue between the Bank and GOI, the preparation of the NHI project began. The project took over two years to prepare, and it involved numerous preparatory missions prior to appraisal. The selection and prioritization of the physical components of the project was done with the help of the Highway Design and Maintenance Model (HDM) using strict economic and technical criteria. The result of using the HDM model was to select a project with an overall estimated ERR of 26%, with none of the subprojects having an ERR of less than 16%. High ERRs for road projects in India are common due to the heavy congestion  4 of most of the links of the NH and State Road networks. The preparation of Techno-Economic Feasibility Studies and Detailed Project Reports (DPRs), was done by local consultant firms for all of the states with the exception of the subprojects in West Bengal and Tamil Nadu which were done in-house. At the time, the perception of the Bank was that the overall quality of the engineering work done by the State PWDs and the consulting firms was of an acceptable standard to proceed with the appraisal of the project. With hindsight, this proved not to be the case due to the poor quality in many cases of the basic field surveys on which project design and engineering were founded. 4.04 The overall responsibility for the implementation of the project was with the MOST, while the actual preparation and management of the physical works was the responsibility of the State PWDs working on an agency basis for MOST. This system was (and still is) being used for the construction and maintenance of the NH system in India, with the State PWD's acting as implementing agents both for project preparation, management and maintenance of the NH network. 4.05 Even though the agency system was well established, in the case of the NHI Project, it has proven to be a very poor institutional framework for the execution of the project. Poor communications, a cumbersome chain of command, and weak decision making powers, are some of the numerous weaknesses of the agency system that have hampered the progress of the project. In retrospect, the inherent weaknesses of the agency system were not properly taken into account in the design and organization of the project, especially when considering the ambitious timing and objectives of the project. V. PROJECT IMPLEMENTATION 5.01 The implementation of the civil works components of the project, which represented approximately 98% of the value of the project, has been unsatisfactory. The overall physical progress of the civil work components of the project was approximately 48% at the extended closing date of December 31, 1993. Of the Original 43 civil works contracts, only 6 have been substantially completed, and in 14 contracts, clause 63 of the contractual agreement had to be used to expel contractors. With regards to financial progress, disbursements have been only 51.7% of the original loan amount of US$200 million and 77.2% of the revised loan amount of US$133 million. A total of US$67 million was cancelled (US$37 million in FY92, and 30 million in FY93) before the lozn was closed, due to the poor performance of contracts in the States of Uttar Pradesh, Haryana, Gujarat and West Bengal.The last disbursement on the project was made on May 11, 1994 and there was an undisbursed balance of US$29.6 remaining in the project. With the closing of the project, four of the better performing contract packages valued at approximately US$15 million were transferred to the Second National Highway Project, to ensure their timely completion. The overall poor implementation performance (especially of the civil works components of the project) is attributable to a variety of factors: 5.02 Firstly, after a 25 year hiatus in lending to the highway subsector, the true implementation capabilities of both GOI and the local road construction industry were not known by the Bank. In retrospect, this led to the design of a project with ambitious objectives, when compared with the actual implementation capabilities of the subsector at the time. For example, one of the key objectives of the project was the large scale construction of high standard roads using mechanized construction techniques, even though the local construction industry were technically, financially and managerially unprepared.  5 Also, there was marked resistance at the state level to accepting the changes that the project was introducing to the subsector. 5.03 Secondly, the prequalification criteria adopted was not sufficiently stringent, leading in many cases to the selection of financially, managerially, and technically weak contractors, incapable of handling large scale road construction contracts. One of the consequences of lax prequalification criteria, was that many of the contracts went to parastatal firms with little or no road construction experience who then had to subcontracted back-to-back most of the work. These subcontracting arrangements were used unsuccessfully in West Bengal, Haryana, and Uttar Pradesh, leading to long delays in project implementation, due to extensive litigation between the contractor and the subcontractor. 5.04 Thirdly, the technical and financial weakness of most of the qualified contractors was compounded by low rates quoted to win the contracts. This was because of the lack of experience of most of the then prequalified contractors in executing mechanized road construction work. The combination of low rates, the long delay from the time of bid evaluation to contract award (in some cases more than one year), and the system of time-based instead of performance-based repayment of mobilization advances, exacerbated even further the already weak financial position of most of the contractors. 5.05 Fourthly, with the exception of the Afcons/Pauling joint venture which was awarded contracts in both Tamil Nadu and Punjab, all other joint venture agreements between local and experienced foreign road contractors failed. This was particularly damaging to the implementation of the project, all of the tenders for the largest road contract packages were awarded to the joint ventures. For instance, the contracts for the construction of the non-bridge portions of the Vadodara to Ahmedabad Expressway (NE1), by far the most important civil works component of the project, was awarded to the Continental Construction (CCL)/Balfour Beatty (BB) joint venture. 5.06 For reasons not known to the Bank, BB pulled out of the joint venture on all the contracts in both Gujarat (NE 1) and Haryana (NH 1). At least two construction seasons were lost before MOST and the State PWDs decided to re-award through a supplementary agreement the contracts to CCL alone, the financially and technically weaker partner of the joint venture. This was done despite the Bank's advice to cancel the contracts and re-tender them. The Bank eventually suspended disbursements on these contracts, and in February of 1992 canceled them from the project. 5.07 In the case of Tamil Nadu, the Byford/Ragi joint venture was unwilling to furnish security guarantees for the contracts they had been awarded leading to their expulsion. It took over one year to re-award the contracts to the second lowest evaluated bidder. 5.08 Fifthly, the agency system used by GOI for the preparation and management of the project was ineffective due to a weak institutional arrangement between MOST and the State PWDs, and poor communication channels. Furthermore, the respective responsibilities and accountability of all parties involved in the agency agreement were not clearly defined nor in practice adequately followed. Half way through the project, a Project Implementation Cell (PIC), headed by a Chief Engineer was established to address these problems and improve MOST's decision making abilities. However, the PIC was only partly successful in improving project management and coordination. Even today the MOST/State PWD agency system is the weak link in project implementation in the road subsector. It is hoped that the recently established National Highway Authority will improve the implementation capabilities of GOI in the road subsector.  6 5.09 Sixthly, the reluctance of PWD supervision staff to abide with the contractual terms and obligations of the contract combined with their lack of experience in dealing with contracts based on international (FIDIC) conditions led to an inordinate amount of claims and litigation. Also, the legal system further encouraged contractual litigation through easy access to injunctions, stays of execution, etc. 5.10 A variety of other reasons also contributed to the poor implementation of the project such as: (a) delays in land acquisition and in the removal of utilities and trees from the right of way; (b) weak contract management skills by contractors and State PWDs (c) high turnover of State PWD's staff leading to weak project supervision; (d) shortage of experienced mechanized road contractors; (e) poor procurement efficiency (causing delays in invitation of bids and award of works); (f) unfavorable law and order situation in Punjab; (g) customs delays in the importation of machinery; and (h) poor quality of surveys and design. 5.11 However, taking into consideration the weak institutional, technical/financial capacities of the contractors, MOST and the State PWDs at the time, the implementation record of the project improves to some extent. In other words, it would have been difficult to achieve much better implementation results, taking into consideration the technical, financial and institutional weakness of the system at the start of the project. Also, the project introduced many innovative features to the execution and management of road construction such as the; (a) prequalification of contractors; (b) mechanization and modernization of road construction techniques; (c) the adoption of larger contract packages to facilitate economies of scale in road construction; (d) the use of ICB procedures for procurement; and (e) the payment of mobilization advances to contractors. 5.12 A more rigorous prequalification of contractors, a more effective institutional arrangement between MOST and the State PWDs, and a more thorough preparation (especially from an engineering point of view) of the subprojects, would have improved project implementation. Also, better contract management skills by both the contractors and the Borrower would have reduced some of the implementation delays of the project. More specifically, if the road work contracts in Gujarat (NE1) and Haryana (NH1) were re-tendered, rather than re-awarded to CCL, project implementation on these two very important subprojects would have improved. Also, the more rapid expulsion of contractors and re- award of contracts in the States of West Bengal and Tamil Nadu would have improved project implementation. 5.13 Even though there were major delays, the implementation of the non-physical components of the project, was generally more successful. The major items of equipment (one mobile bridge inspection unit, four Driver training & evaluating systems and research equipment for use by the Central Road Research Institute (CRRI) were all procured with some minor variations in the quantities, and are being used successfully. The training/TA component of the project was fully implemented with over 70 engineers from MOST and the State PWDs undergoing training both in India and overseas. All of the major studies (the Road Safety and Vehicle Fleet Modernization Study and the Road User Charges) were completed again with some delays. In the case of the Road User Charge Study, the Second National Highway Project includes TA to assist GOI in implementing the agreed action plan based on the results of the study.  7 VI. PROJECT RESULTS 6.01 The project has failed to achieve the most important objective of the project which was "to remove present traffic congestion through the construction/rehabilitation of selected links of the national highway network". A comparison of actual and original implementation schedules shows that except for works under one contract (relating to the Palar bridge in Tamil Nadu) none of the civil works was completed by the original target dates as stipulated in the awarded contracts. Also, by December 31, 1992, the original closing date of the project, disbursements amounted to only 41 % (US$82 million) of the estimated total of US$200 million. The approximate overall physical progress (as percentage of total quantity of work completed) at loan closure by State was: Haryana 25 %; Punjab 76%; Tamil Nadu 83 %; Uttar Pradesh 33%; West Bengal 32%; and Gujarat 46%. 6.02 In real terms, the Rupee costs of the partly completed physical works have actually decreased during the life of the project. The total real financial cost for the project deflated by the wholesale price index for the period was approximately Rs. 1300 which is substantially below what the actual estimated financial progress should have been with a 50% percent completion of the physical works. In nominal terms, the Rs. expenditure on civil works up to May 1994, was approximately Rs. 2500 million against the SAR of Rs. 5022 million (including contingencies) for the whole project. Taking into consideration the physical progress of the civil works (around 50%), the financial progress in nominal terms is roughly in line with the physical progress. In US Dollar terms the costs of the civil works have also decreased in real terms during the life of the project. This primarily because the Rs. has depreciated more during the life of the project than the inflation differential between India and the USA. At loan approval (1985) the Rs./US Dollar exchange rate was 12 to 1 while at loan closure (12/93) it was 31 to 1. 6.03 The revised costs for the civil works (see Table 7) in nominal terms were higher than the costs estimated in the SAR. The total revised costs of the civil works have been estimated by MOST to be Rs. 6867 million against original estimate of Rs. 5022 million including contingencies. However, the final figure given for the completion of the project should be treated with caution due to the fact the project will not be completed for at least another 3 to 4 years, and if the Vadodara to Ahmedabad Expressway is re-submitted to tender it would be completed at a much higher cost. 6.04 The objective of introducing modern contract management and construction techniques to strengthen the implementation capabilities of the local contracting industry was only partly achieved. Today, as a result of the project, the use of modern contract management and mechanized construction techniques are more widely accepted. The greater use by MOST of consultants for project preparation and supervision in the Second National Highway Project is another sign of a growing acceptance of modern project management techniques. However, it must be stressed that there is still substantial opposition to the wholesale adoption of modern project management and road construction techniques. 6.05 Another of the objectives of the project that was also partly achieved was to promote the construction of roads that would meet international road construction standards. In Punjab, where one of the few contract packages has been substantially completed, the quality of the work is good. However, it is too early to evaluate the quality of work done on the other subprojects due to their non-completion. In addition, the design and construction specifications used in the project although adequate, could have been more flexibly adapted to exploit the capabilities for modern construction equipment.  8 6.06 Most of the institutional building and sector modernization objectives of the project have been achieved even though their impact has been limited. All of the studies have been prepared and all of the training components of the project have been completed. With some minor variations all of the equipment under the project was procured and is being utilized. However, an important institutional building objective of the project not met was the establishment of a Transport Coordination Committee within MOST. According to the SAR the responsibilities of this Committee were "to study traffic flows and demand and to frame appropriate inter-modal mix, fiscal and taxation policy, etc". 6.07 The project, through the modernization of road management and construction techniques has had an impact on the sectors technological environment. However, the most significant impact of the project, was that it provided many valuable lessons for the future preparation of projects in the subsector. Many of the lessons learned from the NHI Project have been incorporated in the design of subsequent projects in the road subsector. In addition, the overall implementation failure of the project helped expose many of the weaknesses of the local road construction industry and of the MOST/State PWD agency system. 6.08 Economic Evaluation: Firstly, the ERR and NPV for the project was recalculated following as closely as possible the SAR economic evaluation methodology, projected costs, expected completion dates, and traffic forecasts (see Annex I, scenario A). The results of the recalculated economic evaluation following this approach has produced a higher ERR (36% vs. 26% forecasted in the SAR) and a lower Net Present Value (NPV) (Rs. 40374 billion vs. Rs. 46324 billion forecasted in the SAR). The difference in the recalculated results, can be attributed to the use of slightly different methodologies in the two exercises. Different congestion coefficients and roughness indexes were used producing different results. Also, it is not clear from the SAR which base year was used for the economic evaluation as compared to the recalculated economic evaluation. 6.09 A second analysis (see Annex II, scenario B) was done using the same methodology as above but using the actual traffic growth up to 1993, the likely completion dates of the subprojects and the estimated final costs. Also, projected traffic growth from 1993 onwards was revised to take into account up to date information on future traffic growth. The result of this second scenario which tried as much as possible to use actual data on the project, produced a NPV of Rs. 26032 million and an ERR of 29%. When compared to the results of the first SAR exercise there was a Rs. 14342 million (Rs. 26032 million vs. 40374 million) drop in the NPV and a 20% drop in the ERR (29% vs. 36%). 6.10 The principal reasons behind the lower NPVs and ERRs for the second scenario are the 3 to 5 year delay in the completion of the project, and higher than forecasted traffic growth for the 1985 to 1993 period. Therefore, the delay in the completion of the civil works was made even worse by higher than forecasted growth of all modes of traffic in all of the subprojects with the sole exception of Tamil Nadu. However, in real terms, project costs are expected to be slightly below what was forecasted in the SAR. The main message of the reworked economic analysis is that the project delays and higher than predicted traffic growth have cost the Indian economy Rs. 14,342 million or US$463 million in lost benefits.  9 Box 1: Notes on Economic Evaluation The methodology used in the recalculation of the ERR and NPV for the two exercises was the same, in order to make the comparison of the results realistic. The same traffic diversion factor (60%) for the two expressways was used, the same roughness indexes, vehicle operating costs and traffic congestion coefficients (depending on traffic levels) were used. Also, the costs used for kilometer of road constructed/rehabilitated were similar, and were based on the estimates provided in the SAR. The major difference in the two exercises was the completion date used for the subprojects. In the first scenario (scenario A) the implementation period for the civil work components of the project was 5 years as per the SAR. For the second scenario (scenario B) the estimated/actual completion dates for the subprojects was used and this ranged from 8 to 10 years. Another major difference in the two exercises was the traffic data used. In the first exercise the traffic growth data used was based on the SAR for each subproject (which differed with each subproject). The traffic data used in the second exercise were the actual traffic figures between 1986 and 1993, and a revised estimate of 8% growth in traffic was used for the subsequent period. The revised traffic growth estimate is slightly higher than the average used in the SAR for all of the subprojects. The cost data for the subprojects used in the two exercises are drawn from the US$ SAR cost estimates for the project. The SAR cost data figures were used in both exercises, because despite the substantial Rs. inflation during the project life they remain current. VII. PROJECT SUSTAINABILITY 7.01 At present the sustainability of the project as a whole cannot be properly determined due to the non-completion of most of the civil work contracts. However, the sustainability of the components that have been completed is good. All of the equipment procured under the project is being fully utilized. A good example is the Mobile Bridge Inspection Unit which will be needed for many years to come to inspect all of the old bridges in India. 7.02 The physical sustainability of the civil works component of the project is difficult to assess, because with the exception of Tamil Nadu and Punjab (were some of the contracts have been substantially completed) all of the other contract packages are far from completion. This is particularly true in the case of Uttar Pradesh (bridge and bypass), West Bengal (two lane expressway), and Gujarat (four lane expressway) were the work will not be completed for at least another three to four years. However, taking into consideration the rapid increase (around 10% per year) of future traffic on the NH network it will be more than likely that all of the links will attract more than sufficient traffic to justify their economic costs. In some cases, like the Vadodara to Ahmedabad and the Durgapur Expressways, not only will they reduce travelling distances, but they will also divert traffic away from highly congested NH sections while at the same time generating revenues through tolls. If part of the funds generated by tolls were to be used for maintenance purposes, this would ensure their sustainability. For the non tolled sections of NH network being improved/constructed under the project, their non completion makes it too early to determine the adequacy of funds allocated for maintenance.  10 VIII. BANK PERFORMANCE 8.01 The project received adequate preparation resources from the Bank, with at least four preparatory missions prior to appraisal in which the basic issues of procurement and contract size were debated. In the design of the project efforts were made to address the major institutional and non- institutional constraints of the subsector. The civil works components of the project were selected solely on the basis of economic and network analysis criteria. The high growth of traffic (as forecasted in the projections) vindicates the validity of the roads selected in the project. Furthermore, the Bank aggressively used all of the means at its disposal (including the suspension of disbursements on certain components) to try to improve the implementation of the project. 8.02 The project was adequately supervised by the Bank with an average of two to three supervision missions a year. In 1990 at the height of the CCL/BB controversy a 21 staff week mission was sent to India to attempt to get the project moving again. 8.03 The overestimation of the actual implementation capabilities of both local contractors and GOI was the major weakness of the Bank's performance in the project. This led to the preparation of a project which was probably too ambitious in scope and timing given the implementation capacities available at the time in the country. 8.04 In addition, the weakness of the MOST/State PWD agency system in managing the project, was not fully foreseen during project preparation, making the achievement of project objectives even less likely. IX. BORROWER PERFORMANCE 9.01 The preparation of project components by the borrower was poor, particularly because of inaccurate field surveys. As a result, there were delays resulting from redesign, revising contract documents and bills of quantities, all providing grounds for claims by the contractors. In some cases, redesign involved increases in quantities of work by as much as 20%. In many cases, land acquisition, the removal of utilities and trees was not completed until many years after the start of the project. 9.02 The prequalification by the borrower of financially and technically weak contractors had a negative effect on project implementation. Due to lax prequalification, in most of the subprojects poorly performing contractors had to be expelled and contracts reawarded causing major delays in project implementation. 9.03 The ill defined relationship between MOST and the State PWDs was not conducive to the proper implementation of the project. Poor communications, slow decision making and the avoidance of responsibility for decisions, were all negative characteristics of the agency system. Also, the high turnover of key staff especially in the State PWD's further impeded the decision making capabilities of the Borrower. The setting up of a Project Implementation Cell did improve the working relationship between MOST and the State PWDs but it was too little too late. 9.04 The Borrower, has generally complied with all of the reporting requirements of the project even though during the life of the project there were some delays in submission of audit reports to the  11 Bank. All of the legal covenants of the project have been met by the Borrower and only one is outstanding due to the non-completion of the civil works. X. PROJECT RELATIONSHIP 10.01 The Bank's relationship with the implementing agency MOST was good with a high degree of communication between the two parties. However, even though the Bank had a well defined counterpart in MOST, the actual implementation of the project was the responsibility of the State PWDs. The relationship between the Bank and the State PWDs was limited due to the institutional arrangement that the Bank should deal primarily with MOST. The relationship between MOST and the State PWDs one of the key elements for the successful execution of the project, was inadequate with limited cooperation and communication between the two parties. This was one of the major causes of implementation delays in the project. XI. CONSULTING AND CONTRACTING SERVICES 11.01 Consultants with international experience were not used in project preparation and supervision by the Borrower. Most of the preparation of the project was done in house by the State PWD's with mixed results at best. For all future projects in the road subsector, extensive use is being made of consultants to improve project identification, preparation and supervision. 11.02 The poor performance of the local road construction industry was one of the major causes of the poor implementation record of the project. The industry simply did not have the machinery, management skills, trained personnel, and financial resources to properly execute the works. Also the failure of the CCL/BB and Byford/Ragi joint veniures caused severe delays in the implementation schedules in three of the six project states. XII. PROJECT DOCUMENTATION DATA 12.01 The SAR was well prepared and comprehensive in the information it contained on the project. The project description and objectives were also very clear, and they provided a very good framework to follow for both the Bank and the Borrower in the implementation of the project. 12.02 Most of the relevant data needed to prepare the PCR was available in the project files and elsewhere with the exception of the supporting documentation used to prepare the economic evaluation. The Borrower has supplied large quantities of information on the project in the form of quarterly reports. But since quantity rather than quality seems to have been the overriding criteria in the preparation of the quarterly reports they were little use to the Bank. For future projects it is important to specify both the quality and the quantity of the information that the Bank requires for the monitoring of the project.  12 PART Il: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE I. PROJECT DESIGN AND ORGANIZATION 1.01 After a gap of more than two decades, Government of India (GOI) agreed for loan assistance in the road sector from the World Bank (Bank) with the objectives of i) modernization of road network; ii) technology upgradation by using mechanized construction and suitable specification for heavily trafficked roads; iii) technology transfer from advanced countries in respect of design and construction of roads and bridges; and iv) growth of domestic contracting industry. Accordingly, as per agreement, International Competitive Bidding (ICB) procedure, large size package compared to the prevalent sizes and prequalification of contractors before bidding have to followed for implementation design and implementation of the project. 1.02 The above mentioned requirements were not in tune with the then practices of the Ministry of Surface Transport (MOST). At that time due to socio-economic demand, construction of roads including the National Highways was considered to be a source of employment generation. But with the overall economic development in the country and shift of both freight and passenger traffic from railways, the traffic by the road is rising rapidly. Due to consequent stresses and strains on the capacity of the roads, and with the realization of concept of the total transport cost and the resulting benefits towards the society,the Govt. of India also accepted the need for the modernization of the roads using mechanized construction instead of labor based technology in respect of high traffic volume roads. 1.03 The engineering investigations, designs and cost estimation for road projects were done by the respective State Public Works Departments as per the prevailing system(PWDs). The requirement of consultants for designing highway projects was not felt necessary until this project was initiated. Though there were competent consultants for design of bridges, but there were not many domestic consultants reputed for major road projects. 1.04 It may be mentioned that for the design of the new road in the Calcutta-Palsit road as two lane at grade road were based on certain assumptions. But considering that land was already available, and the length of the proposed route was shorter than that of the existing route and the growth of traffic was considerable, an access controlled expressway would have been appropriate solution. This is reinforced by the recent study conducted on the expressway network in the country. The conversion of this road, at present stage, to an access controlled road would require a considerable investment. 11. IMPLEMENTATION OF THE PROJECT 2.01 For implementation of the project, it was decided that the package sizes for different contracts for this project would be ranging from Rs.60 million to about Rs.200 million. This was large enough compared to the then practices. Prequalification of contractors for highway projects was done for the first time in the country. The criteria finalized and concurred by the Bank, were not sufficient enough to anticipate the problems of subcontracting, joint-venture, past experience and financial resources of the contractors. This led to poor performance by the contractors who were prequalified on these agreed criteria.  13 2.02 One of the objectives of this project was technology transfer through participation of the foreign contractors. Response of the foreign contractors was not encouraging. Only three foreign contractors participated in the form of joint venture. Out of these, two contractors backed out from the project. This led to several problems causing considerable delay in completion of the projects. 2.03 As per agreement, to follow ICB procedure for award of civil works, FIDIC conditions were made applicable for implementation of the prcject. Before this project, these conditions were not used in execution of the highway projects in the country. Niost of the officials of the State PWDs, who supervise the works of National Highway Projects, were conversant only with their usual PWD contract documents. They were exposed to new FIDIC conditions of contract for the first time. Many of them found difficulties in taking decisions at the appropriate time as they were not sure of the consequence of the decisions. MOST's officers were also not experienced to tackle and resolve the bottlenecks and decisions got delayed in some cases even at the MOST level. This also contributed to delays in the project implementation. 2.04 The progress of various subprojects was also badly hampered due to litigation, at the time of re-award of works after expulsion of the non performing contractors and to some extent at the time of initial award. 2.05 The disbursement to the project could have been increased if the Bank were reasonable to accept inclusion of few other contracts viz. five road packages of Durgapur Expressway Project while extending the closing date of the loan. 2.06 Experience in implementing the project indicated that both the Bank and GOI were over ambitious and have not considered the ground realities while designing the project and setting the target of implementation of the project. III. PERFORMANCE BY THE BORROWER 3.01 The objectives of this project were (i) to foster institutional development; (ii) to develop the domestic contracting industry; and (iii) to reduce the present traffic congestion through selected road investments. 3.02 The performance of the borrower, notwithstanding the shortfall in disbursement is considered to be satisfactory in achieving the above mentioned objectives. 3.03 This project can be considered to be a beginning of the modernization of the road network of the country. This project afforded a unique opportunity for evolving of design and specifications for roads to suit the mechanized construction methodology for large size projects. This process got initiated with this project and is being further updated with the advancement of technology. Completion of the Road Users Cost Study undertaken as part of this project has strengthened the tool of economic analysis of road projects. Completion of the study on Vehicle Fleet Modernization and Road User Charges within the stipulated period has opened up many areas in the road transport sector. Subsequent follow-up actions are being taken up in implementation of the agreed decisions of the study.  14 3.04 Training under this project has helped our engineers to equip themselves with the latest practices and techniques in planning, design and construction of highways. 3.05 At the time of start of this project, there were very few local capable contractors for road works. Initially, mainly parastatal firms responded for these works. Presently, many other local capable contractors have come up and are executing the works with much better quality control. Site management and utilization of machinery have, however, still to improve. This project has set the pace. 3.06 It is admitted there have been serious delays in completion of the augmentation of the facilities which are required to reduce the congestion on heavily trafficked roads. Nevertheless, within the loan closing dates i.e by 31st December, 1993, new facilities in about 203 kms of roads in aggregate have been opened to traffic (Haryana 25 km, Punjab 85 km and Tamil Nadu 93 kin). All these projects, as per present assessment, are likely to be completed by end 1997. 3.07 The best available consultants were appointed for the preparation of project details in respect of four projects. Due to the limited expertise of highway engineering available at that time there have been discrepancies in the detailed engineering in some projects. However, these difficulties were overcome quickly and this factor did not affect the speedy execution of the project. 3.08 Due to the poor performance of the prequalified contractors, contractors have had to be expelled from 12 contract packages. Re-award and start of the work got delayed due to finalization of the procurement method, in consultation with the Bank and also litigation by the expelled contractors. 3.09 This project has helped in identification of the associated problems for implementation of the road modernization projects. During the implementation, GOI has not lagged behind to take necessary corrective steps for speedy implementation of the project. These actions are streamlining of equipment import procedure, fast track clearances for re-award of work, providing additional advances to the contractors and rescheduling the recovery of the mobilization advances within the ambit of contract conditions and keeping in view of financial discipline, setting up of PIC, regular meeting at the highest level to monitor the project. These actions have also helped in increasing the pace of progress of works. 3.10 Most of the identified deficiencies in prequalification criteria, in contract documents, in implementation of the projects are being taken care of in the future projects funded by external agencies. 3.11 Delay in acquisition of land and clearance of the site had impeded the progress of the works in a few projects. However, MOST took appropriate actions during construction stage to get the site of works free of encumbrances. This aspect is now being taken care of in the planning stage itself by preparing strip plans and identifying the problematic stretches. Actions are taken for acquisition of land and shifting of utilities while processing projects for various clearances so that site of works without any obstructions can be handed over to the contractor at the time of start of work. It has also now been made mandatory not to start bidding process unless the site of works, free of encumbrances, are available. 3.12 This project has revealed inadequacies and weaknesses in the system of supervision of civil works and taking decisions at appropriate time for smooth implementation of the project. to address this issue, consultants are now being appointed in the externally aided road projects, for supervision of works. Presently, Superintending Engineer of the concerned PWD is working as "Engineer" as per contract conditions for Asian Development Bank (ADB) assisted project. However, consultants have been  15 appointed to assist and advise the Engineer in maintaining the quality of the works and in supervision of works. In Second NH Projects of the World Bank, consultants would be appointed to work as "Engineer". It is expected that these measure would help to maintain the quality of works and in timely completion of the project. 3.13 There have also been delays in taking decisions for contract management due to movement between the Central and concerned State Government inherent in the agency system. An Apex Management Committee has been set up at the central level with the representatives of the concerned Ministries of the Central Government and the State Governments to taking debottlenecking initiatives. This Committee has already started functioning and is proving useful in expediting decisions on contentious issues. 3.14 It was intended to foster institutional development, adoption of new technology and change in method of construction by implementation of this project. It was perhaps impractical to expect the new concepts, ideas and change over to new technology being achieved within the life of one project. IV. BANK'S PERFORMANCE 4.01 MOST values the guidance and support it received from the World Bank professionals in identifying the project section and in designing the project. The interaction with Bank and various Supervision Missions were useful in initiating measures to take various corrective actions for speedy implementation of the project. These exercises undertaken by the Ministry in collaboration with the Bank were reflected in the various Aide-Memories of the Supervision Mission of the Bank. 4.02 Proposal of two lane at grade new road in the so called Durgapur Expressway as was designed and justified by economic analysis by using HDM carried out at the Bank is found to be a short sighted decision. It would have been better to proceed with the project as a real expressway. With this new two lane road, the construction of modern access control expressway has to be deferred due to requirement of large scale investment for its conversion. 4.03 Two foreign contractors namely M/s Balfour Beatty and M/s Ragi withdrew from the project without any apparent reason. This had jeopardized two projects, and delayed one project. Bank remained silent spectator on these happenings. It is not known whether Bank's working system permits for taking any action against these two contractors for the Bank financed projects in other countries. The Bank also do not seem to have made efforts to find as to why the foreign partners backed out of these contracts. 4.04 It has now become evident that while designing the project Ministry and the Bank adopted quite a few over ambitious targets and time frames without keeping in mind the realities in the field. Setting up the criteria for prequalification of contractors, finalization of the contract documents, fixation of the package sizes were not done keeping in view the existing status of the road construction practices and contracting industry.  16 4.05 After the break-up of CCL/BB joint ventures, Bank did not take consistent stand. Initially, it recommended for expulsion of CC from Gujarat project and had tacit approval of retention of CC in Haryana Project with the technical assistance of foreign contractor. Then, the Bank recommended for expulsion of CC from both the projects. Later on the Bank agreed with the CCL's retention in the project subject to certain conditions being met. These were the need of CCL to obtain equivalent expertise namely Kier International and firm's willingness to participate fully by posting performance bond and supervision of works by an International Consultant. MOST took all necessary actions as per requirement and in consultation with the Bank. Nevertheless, Bank suddenly withdrew nine contracts from the project and canceled the equivalent portion of the loan contributing to excessive delays in two projects. 4.06 On the extension of the closing date of the loan the Bank initially, informed that they would consider extension of only few contracts which have no contractual and other problems and that can be completed in reasonable time. Later on, Bank also agreed to extend the closing date of the loan for additional satisfactorily performing contracts. But while drawing up the list of performing contracts. some of the contracts including one which was approved by the Bank at that time were overlooked. Performance of these contracts was found to be more satisfactory than other contracts which were considered by the Bank as satisfactory. If five contracts of Durgapur Expressway Project were included in the project, the disbursement would have increased by about US$ 3.8 million. 4.07 MOST appreciates the Bank's consideration and agreement in increasing the percentage of disbursement from 46% to 80% and finally to 90%. This resulted in increased disbursements. V. RELATIONSHIP WITH THE BANK 5.01 The relationship of the Ministry with the Bank dates to the early '60s. Due to the policies of the GOI, there was no lending for about two decades. With the start of the First NH Project, both the Bank and GOI have renewed their interest in the road sub-sector. 5.02 MOST values the support it received from the Bank in identifying the project sections for improvement of the congested NH corridors, design of projects, monitoring and evaluation of ongoing activities and in initiating institutional reviews. 5.03 MOST would like to place on record its appreciation of professional interaction with the Bank. MOST would look forward for further collaboration with the Bank in development of NH network in the country.  17 PART III: STATISTICAL INFORMATION TABLE 1: Proiect Data RVP Unit South Asia 2 Sector Transport Subsector Highways Borrower Government of India Executing Agency Ministry of Surface Transport Fiscal Year of Borrower April 1 to March 31 TABLE 2: Proiect Timetable Original Plan Actual or Re-estimated Reference from DEA (GOI) Pre-appraisal Appraisal Negotiations 4/85 4/85 Board Approval 5/85 5/85 Loan Agreement Date 9/85 9/95 Effectiveness Date 11/85 11/85 Project Completion Date 6/92 12/93 Closing Date 12/92 3/94  18 TABLE 3: Related Bank Loans and/or Credits Title Purpose Year Status Comments Approved Bihar Rural Roads Construction of rural 1980 Completed in Project roads FY 87 Gujarat Rural Roads Construction of rural 1987 Active US$22.85 million roads was cancelled due to forex fluctuations and components were added. States' Road Project Upgradation of State 1988 Active US$55 million was Highways cancelled from project. Second National Highway Upgradation/Fourlaning of 1992 Active Project National Highways TABLE 4: Proiect Finances Item Original Expectation Actual or Re-estimated Loan Amount (US $million) 200.0 200.0 Disbursed (US $million) {3/94} 200.0 103.4 Cancelled (US $million) {6/94} Nil 96.6 Repaid (US $million) {3194} Nil Nil Outstanding (US $million) {3/94} 200.0 101.6 Total Project Costs (US$million) 424.8 250.5  19 TABLE 5: Expected and Actual Implementation Project Component Expected Implementation Actual Implementation Start End Start End Construction of Ahmedabad-Vadodra Expressway - 3/86 6/92 3/87 12/98 Gujarat Construction of a second carriageway on NHI in 9/86 6/91 3/87 12/95 Haryana Construction of a second carriageway on NHI in Punjab 3/86 12/90 3/87 9/94 Fourlaning/strengthening of NH 45 in Tamil Nadu 6/86 12/90 3/87 & 12/94 10/89 Construction of Varanasi Bypass & Ganga Bridge in 6/86 12/91 10/87 & 12/98 Uttar Pradesh 6/88 Construction of new two lane highway (NH 2) in West 9/86 6/90 9/87 12/96 Bengal Procurement of specialized equipment 6/86 6/88 6/87 12/93 Technical Assistance (Staff Training) 6/86 6/91 6/87 12/93 Vehicle Fleet Modernization Study 3/86 12/86 3/88 3/89 TABLE 6: Exnected and Actual Cumulative Disbursements (US $Million) FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 Estimated 8.0 39.4 96.8 148.0 168.9 189.8 200.0 200.0 200.0 Actual Nil Nil 23.6 37.9 48.1 64.3 80.5 93.4 101.6 Actual/Estimate Nil Nil 24 26 28 33 40 47 51 (percentage)  20 TABLE 7: Expected and Actual Cost and Expenditures Appraisal Cost Estimate Revised Actual Expenditures Completion Cost (Rs. million) (US$million) (Rs. million) (Rs. million) (US$million) Item Local Foreign Total Local Foreign Total Total Total Total Civil Works 2607.8 997.8 3605.6 217.3 83.1 300.4 6867.0 3316.5 101.3 Equipment 2.8 43.2 46.0 0.2 3.6 3.8 54.2 54.2 1.3 Training - 21.4 21.4 - 1.8 1.8 16.9 16.9} Consult Services 0.7 6.5 7.2 0.1 0.5 0.6 7.5 7.5} (.8 Contingencies 997.5 419.7 1417.2 83.1 35.0 118.1 - - TOTALS 3608.8 1488.6 5097.4 300.7 124.0 424.7 6945.6 3395.1 103.4 TABLE 8: Economic Imract Appraisal *Projected ERR **Projected ERR Sub-Proiects Estimate (ERR) (Scenario A) (Scenario B) Gujarat 21% 35% 26% West Bengal 25% 37% 29% Haryana 37% 44% 33% Uttar Pradesh 19% 16% 13% Punjab 26% 45% 37% Tamil Nadu A) 23% 17% 15% B) 31% 36% 28% Project Total 26% 36% 29% * Recalculated ERR (Scenario A, see annex I)following as close as possible SAR economic evaluation. ** Recalculated ERR (Scenario B, see annex I) using actual traffic, projected actual completion dates and projected actual costs.  21 TABLE 9: Field Mission Data Yearwise Activity Item Month/Year No. of Persons No. of Weeks Staff Weeks Report Date Preparation Appraisal Supervision I 10/85 1 1 1 11/85 II 3/86 2 4 8 4/86 III 9/86 3 3 9 10/86 IV 2/87 3 3 9 2/87 V 10/87 3 1 3 11/87 VI 6/88 3 4 12 7/88 VIl 7/88 1 1 1 8/88 VIII 12/88 2 5 10 12/88 IX 3/89 3 1 3 3/89 X 6/89 3 2 6 7/89 Xi 10/89 4 3 12 11/89 XII 2/90 3 3 9 3/90 XIII 5/90 7 3 21 6/90 XIV 12/90 3 3 9 1/91 XV 3/91 4 3 12 4/91 XVI 10/91 5 2 10 2/92 XVII 2/92 3 4 12 6/92 XVIII 7/92 4 3 12 8/92 XIX 9/92 2 2 4 10/92 XX 2/93 4 2 8 4/93 XXI 7/93 5 2 10 8/93 XXII 11/93 3 1 3 2/94 Sub Total Completion 5/94 3 2 6 5/94 GRAND TOTAL (Staff Weeks) 190  India - Tamil Nadu NH45 - Tamil Nadu Scenario I A Economic Evaluation and Senmitivity Analysis Net Economic Benefits (M Rsl Sensitivity Analyis Capital Maintenance Normal Generated Diverted Total 20% Incr. 20% Decr. Combined Costs Costs Traffic Traffic Traffic Cost (a) Bnft (b) la) & (b) Year With the Project | 1987 f -154.00 0.00 0.00 0.00 0.00 -154.00 | -184.80 -154.00 -184.80 X I 1988 I -154.00 0.00 0.00 0.00 0.00 -154.00 I -184.80 -154.00 -184.80 Without the Project 1989 -154.00 0.00 0.00 0.00 0.00 -154.00 | -184.80 -154.00 -184.80 1990 j -154,00 0.00 0.00 0.00 0.00 -154.00 -184.80 -154.00 -184.80 1991 I -154.00 0.00 0.00 0.00 0.00 -154.00 I -184.80 -154.00 -184.80 1992 I 0.00 -0.80 534.05 0.00 0.00 533.45 533.33 426.64 426.52 1993 I 0.00 -0.60 550.07 0.00 0.00 549.47 j 549.35 439.46 439.34 1994 I 0.00 -0.60 588.57 0.00 0.00 565.97 I 565.85 452.66 452.54 1995 0.00 -0.60 583.57 0.00 0.00 582.97 582.85 466.26 466.14 1996 I 0.00 -0.60 601.08 0.00 0.00 600.48 600.36 480.26 480.14 1997 I 0.00 -0.60 619.11 0.00 0.00 618.51 I 618.39 494.69 494.57 1998 J 0.00 -0.60 637.68 0.00 0.00 637.08 636.96 509.55 509.43 1999 j 0.00 -0.60 656.81 0.00 0.00 858.21 I 656.09 524.85 524.73 2000 I 0.00 -0.60 676.52 0.00 0.00 675.92 I 675.80 540.61 540.49 2001 -124.00 -0.60 696.81 0.00 0.00 572.21 547.29 432.85 407.93 2002 I 0.00 -0.60 717.72 0.00 0.00 717.12 I 717.00 573.57 573.45 2003 I 0.00 -0.60 739.25 0.00 0.00 738.65 I 738.53 590.80 590.68 2004 I 0.00 -0.60 761.43 0.00 0.00 760.83 I 760.71 608.54 608.42 2005 I 0.00 -0.60 784.27 0.00 0.00 783.87 I 783.55 626.81 626.69 I 2006 I 77.00 -0.60 807.80 0.00 0.00 884.20 899.48 722.64 737.92 Internal Rate of Return: 36.3% 32.6% 31.8% 28.3% Net Present Value at 12% -638.18 -2.60 2697.70 0.00 0.00 2056.92 1928.76 1517.38 1389.22 o A 0 NH45_1 A.WK 1 06/21/94  India - Tamil Nadu NH45 - Tamil Nadu Scenario 2A Economic Evaluation and Sensitivity Analysis Net Economic Benefits tM Rs) Sensitivity Analysis Capital Maintenance Normal Generated Diverted Total 20% Incr. 20% Decr. Combined Costs Costs Traffic Traffic Traffic Costs (a) Bnft tb) (a) & tb) Year WiththeProject I 1987 | -180.00 0.00 0.00 0.00 0.00 -180.00 I -216.00 -180.00 -216.00 X I 1988 -180.00 0.00 0.00 0.00 0.00 -180.00 I -216.00 -180.00 -216.00 WithouttheProject | 1989 -180.00 0.00 0.00 0.00 0.00 -180.00 I -216.00 -180.00 -216.00 1990 -180.00 0.00 0.00 0.00 0.00 -180.00 I -216.00 -180.00 -216.00 199881 -180.00 0.00 0.00 0.00 0.00 -180.00 I -216.00 -180.00 -216.00 1992 0.00 -1.40 208.15 0.00 0.00 206.75 I 206.47 165.12 164.84 1993 0.00 -1.40 216.48 0.00 0.00 215.08 I 214.80 171.78 171.50 1994 j 0.00 -1.40 225.13 0.00 0.00 223.73 I 223.45 178.71 178.43 1995 I 0.00 -1.40 234.14 0.00 0.00 232.74 I 232.46 185.91 185.63 1996 I 0.00 -1.40 243.51 0.00 0.00 242.11 I 241.83 193.40 193.12 1997 0.00 -1.40 253.25 0.00 0.00 251.85 I 251.57 201.20 200.92 1998 I 0.00 -1.40 263.38 0.00 0.00 261.98 I 261.70 209.30 209.02 1999 I 0.00 -1.40 273.91 0.00 0.00 272.51 I 272.23 217.73 217.45 2000 0.00 -1.40 284.87 0.00 0.00 283.47 I 283.19 226.49 226.21 2001 -144.00 -1.40 296.26 0.00 0.00 150.86 I 121.78 91.61 62.53 2002 0.00 -1.40 308.11 0.00 0.00 306.71 I 306.43 245.09 244.81 2003 0.00 -1.40 320.44 0.00 0.00 319.04 I 318.76 254.95 254.67 2004 0.00 -1.40 333.25 0.00 0.00 331,85 1 331.57 265.20 264.92 2005 I 0.00 -1.40 346.58 0.00 0.00 345.18 344.90 275.87 275.59 I 2006 I 90.00 -1.40 360.45 0.00 0.00 449.05 466.77 376.96 394.68 Internal Rate of Return: 17.4% 14.8% 14.2% 11.8% Net Present Value at 12% -745.74 -6.06 1109.48 0.00 0.00 357.68 207.32 135.79 -14.57 GQ M CD XD x t' N-1 0 NH45_2A.WK1 06/21/94  India - Uttar Pradesh Varanasi Bypans/Bridge Scenario A Economic EvJauation and Sensitivity Analysis Net Economic Benefits (M Rs) Sensitivity Analysis Capital Maintenance Normal Generated Diverted Total 20% Incr. 20% Dec,. Combined Costs Costs Traffic Traffic Traffic Costs la) Bnft lb) (al & lb) Year With the Project I 1987 -280.00 0.00 0.00 0.00 0.00 -280.00 -336.00 -280.00 -336.00 X I 1988 I -280.00 0.00 0.00 0.00 0.00 -280.00 -336.00 -280.00 -336.00 Without the Project I 1989 I -280.00 0.00 0.00 0.00 0.00 -280.00 j -336.00 -280.00 -336.00 1990 I -280.00 0.00 0.00 0.00 0.00 -280.00 I -336.00 -280.00 -336.00 1991 -280.00 0.00 0.00 0.00 0.00 -280.00 I -336.00 -280.00 -336.00 1992 0.00 -0.50 0.00 0.00 227.96 227.46 227.36 181.87 181.77 1993 0.00 -0.50 0.00 0.00 246.19 245.69 245.59 196.45 196.35 1994 I 0.00 -0.50 0.00 0.00 265.89 265.39 265.29 212.21 212.11 1995 I 0.00 -0.50 0.00 0.00 287.16 286.66 286.56 229.23 229.13 1996 j 0.00 -0.50 0.00 0.00 310.13 309.63 309.53 247.61 247.51 1997 I 0.00 -0.50 0.00 0.00 334.94 334.44 334.34 267.45 267.35 1998 0.00 -0.50 0.00 0.00 361.74 361.24 361.14 288.89 288.79 1999 0.00 -0.50 0.00 0.00 390.68 390.18 390.08 312.04 311.94 2000 0.00 -0.50 0.00 0.00 421.93 421.43 421.33 337.05 336.95 N' 2001 . -46.50 -0.50 0.00 0.00 455.69 408.69 399.29 317.55 306.15 2002 0.00 -0.50 0.00 0.00 492.14 491.64 491.54 393.21 393.11 2003 0.00 -0.50 0.00 0.00 531.51 531.01 530.91 424.71 424.61 2004 I 0,00 -0.50 0.00 0.00 574.03 573.53 573.43 458.73 458.63 2005 I 0.00 -0.50 0.00 0.00 619.96 619.46 619.36 495.46 495.36 I 2006 140.00 -0.50 0.00 0.00 669.55 809.05 836.95 675.14 703.04 Internal Rate of Return: 1 5.7 % 13.4% 12.9 % 1 0.8 % Net Present Value at 12% -1123.72 -2.16 0.00 0.00 1522.79 396.91 171.74 92.35 -132.82 NHV A.WK1 06/21/94  India - Punlab NH1 Punjab Scenario A Economic Evaluation and Sensitvity Analysis Net Evonomic Benefits tM RsI Sensitivity Analysis Captal Maintenance Normal Generated Diverted Total 20% Incr. 20% Decr. Combined Costs Costs Traffic Traffic Traffic Costs (al Bnft tbl (a) & tbl Year With the Project 1987 -465.00 0.00 0 00 0.00 0.00 -46500 j -558.00 -465.00 -558.00 X 1988 -465.00 0.00 0.00 0.00 0.00 -465.00 ! -558.00 -465.00 -558.00 Without the Project 1969 -465 00 0.00 0.00 0.00 0.00 -465.00 j -558.00 -465 00 -558.00 1990 -465.00 0.00 0.00 0.00 0.00 -465.00 j -558 00 -465.00 -558.00 1991 -465.00 0.00 0.00 0.00 0.00 -465.00 -558.00 -465.00 -558.00 1992 0 00 -1.90 2045.34 0.00 0.00 2043.44 p 2043.06 1634.37 1633.99 1993 0.00 -1.90 2311 24 0.00 0.00 2309.34 2308.96 1847.09 1846.71 1994 0.00 -1.90 2496.14 0.00 0.00 2494.24 I 2493.86 1995 01 1994.63 1995 0.00 -1.90 2695 83 0.00 0.00 2693.93 2693.55 2154.76 2154.38 1996 0.00 -1.90 2911.49 0.00 0.00 2909.59 2909.21 2327.29 2326.91 1997 0.00 -1.90 3144.41 0.00 0.00 3142.51 [ 3142.13 2513.63 2513.25 1998 0.00 -1.90 3395.97 0.00 0.00 3394.07 3393.69 2714.87 2714.49 1999 0.00 -1.90 3667.64 0.00 0.00 3665.74 I 3665.36 2932.21 2931.83 2000 0.00 -1.90 3961.05 0.00 0.00 3959.15 3958.77 3166.94 3166.56 2001 1 -375.00 -1.90 4277.94 0.00 0.00 3901.04 3825.66 3045.45 2970.07 2002 0.00 -1.90 4620.17 0.00 0.00 461 8.27 461 7.89 3694.24 3693.86 2003 0 00 -1.90 4989.79 0.00 0.00 4987.89 4987.51 3989.93 3989.55 2004 0.00 -1.90 5388.97 0.00 0.00 5387.07 5386.689 4309.28 4308.90 2005 0.00 -1.90 5820.09 0.00 000 5818.19 I 5817.81 4654.17 4653.79 2006 233 00 -1.90 6285.70 0.00 0.00 651 6.80 6563.02 5259.66 5305.88 Internal Rate of Return: 45.2% 41.2% 40.3% 36.6% Net Prent Value at 12% -1927.05 -8.22 14242.11 0.00 0.00 12306.84 11919.79 9458.42 9071.37 > NH1P AWK1 06/21/94  India - Haryana NH1 - Haryana Scenario A Economic Evaluation and Sensitivity Analys.s Net Economic Benefits (M Rs) Sensitivity Analysis Capital Maintenance Normal Generated Diverted Total 20% Incr. 20% Decr. Combined Costs Costs Traffhc Traffic Traffic Costs (a) Bnft (bl (a) & (b) Year With the Project 1987 -273.00 0.00 0.00 0.00 0.00 -273.00 -327.60 -273.00 -327.60 X 1988 -273.00 0.00 0.00 0.00 0.00 -273.00 -327.60 -273.00 -327.60 Without the Project 1989 j 273.00 0.00 0.00 0.00 0.00 -273.00 | -327.60 -273.00 -327.60 1990 -273.00 0.00 0.00 0.00 0.00 -273.00 -327.60 -273.00 -327.60 1991 j -273.00 0.00 0.00 0.00 0.00 -273.00 -327.60 -273.00 -327.60 1992 0.00 -1.20 1167.26 0.00 0.00 1166.06 I 1165.82 932.61 932.37 1993 0.00 -1.20 1260.64 0.00 0.00 1259.44 1 259.20 1007.31 1007.07 1994 0.00 -1.20 1361.49 0.00 0.00 1360.29 j 1360.05 1087,99 1087.75 1995 0.00 -1.20 1470.41 0.00 0.00 1469.21 . 1468.97 1175.13 1174.89 1996 0.00 -1.20 1588.04 0.00 0.00 1586.84 I 1586.60 1269.23 1268.99 1997 0.00 -1.20 1715.08 0.00 0.00 1713.88 1 713.64 1370.87 1370.63 1998 - 0.00 -1.20 1852.29 0.00 0.00 1851.09 1 850.85 1480.63 1480.39 1999 0.00 -1.20 2000.47 0.00 0.00 1999.27 1999.03 1599.18 1598.94 2000 1 0.00 -1.20 2160.51 0.00 0.00 2159.31 2159.07 1727.21 1726.97 t>4 2001 -250.00 -1.20 2333.35 0.00 0.00 2082.15 2031.91 1615.48 1565.24 2002 0.00 -1.20 2520.02 0.00 0.00 2518.82 2518.58 2014.82 2014.58 2003 0.00 -1.20 2721.62 0.00 0.00 2720.42 I 2720.18 2176.10 2175.86 2004 0.00 -1.20 2939.35 0.00 0.00 2938.15 2937.91 2350.28 2350.04 2005 0.00 -1.20 3174.50 0.00 0.00 3173.30 3173.06 2538.40 2538.16 2006 ! 137.00 -1.20 3428.46 0.00 0.00 3564.26 3591.42 2878.57 2905.73 Internal Rate of Return: 43.8% 39.9% 39.0% 35.3% Net Present Value at 12% -1137.44 -5.19 7797.51 0.00 0.00 6654.87 6426.34 5095.37 4866.84 0) 0 M DW N NH1H_AWKl 06/21/94  India - West Bengal Durgapur Expressway Scenario A Economic Evaluation and Sensitivity Analysis Net Economic Benefits IM Rs) Sensitivty Analysis Capital Maintenance Normal Generated Diverted Total 20% Incr. 20% Decr. Combined Costs Costs Traffic Traffic Traffic Costs (a) Bnft ib) ia) & ib) Year With the Project 1987 I -300.00 0.00 0.00 0.00 0.00 -300.00 I -360.00 -300.00 -360.00 X I 1988 I -300.00 0.00 0.00 0.00 0.00 -300.00 I -360.00 -300.00 -360.00 Without the Project I 1989 I -300.00 0.00 0.00 0.00 0.00 -300.00 I -360.00 -300.00 -360.00 1990 I -300.00 0.00 0.00 0.00 0.00 -300.00 I -360.00 -300.00 -360.00 1991 I -300.00 0.00 0.00 0.00 0.00 -300.00 I -360.00 -300.00 -360.00 1992 I 0.00 -1.10 0.00 0.00 912.77 911.67 I 911.45 729.12 728.90 1993 0.00 -1.10 0.00 0.00 985.79 984.69 I 984.47 787.53 787.31 1994 0.00 -1.10 0.00 0.00 1064.66 1063.56 I 1063.34 850.62 850.40 1995 0.00 -1.10 0.00 0.00 1149.83 1148.73 I 1148.51 918.76 918.54 1996 0.00 -1.10 0.00 0.00 1241.81 1240.71 1240.49 992.35 992.13 1997 0.00 -1.10 0.00 0.00 1341.16 1340.06 [ 1339.84 1071.83 1071.61 1998 0.00 -1.10 0.00 0.00 1448.45 1447.35 1447.13 1157.66 1157.44 1999 0.00 -1.10 0.00 0.00 1564.33 1563.23 1563.01 1250.36 1250.14 2000 0.00 -1.10 0.00 0.00 1689.47 1688.37 1688.15 1350.48 1350.26 2001 -100.00 -1.10 0.00 0.00 1824.63 1723.53 1703.31 1358.61 1338.39 -J 2002 0.00 -1.10 0.00 0.00 1970.60 1969.50 1969.28 1575.38 1575.16 2003 I 0.00 -1.10 0.00 0.00 2128.25 2127.15 2126.93 1701.50 1701.28 2004 I 0.00 -1.10 0.00 0.00 2298.51 2297.41 [ 2297.19 1837.71 1837.49 2005 I 0.00 -1.10 0.00 0.00 2482.39 2481.29 2481.07 1984.81 1984.59 I 2006 I 150.00 -1.10 0.00 0.00 2680.98 2829.88 2859.66 2293.69 2323.47 Internal Rate of Return: 36.7% 33.2% 32.4% 29.2% Net Present Value at 12% -1214.25 -4.76 0.00 0.00 6097.48 4878.47 4634.67 3658.97 3415.17 P x I-. 0 NE2_A.WK1 06/21/94  India - Gujarat Vadodara to Ahmedabad Expressway Scenario A Economic Evaluation and Sensitivity Analysis Net Economic Benefits tM Rs) Sensitivity Analysis -- - - -- - - - -- - - - --- -.- -.- --..- --- --. ..... . .. .. ...... .... -- - - -- - - - -- - - - - - - -- -- - -- - - -- - - -- -- - -- -- - -- - -- - -- - ------- ------- ------ Capital Maintenance Normal Generated Diverted Total 20% Incr. 20% Dec,. Combined Costs Costs Traffic Traffic Traffic Costs (a) Bnft lb) (a) & (b) Yea. With the Project 1987 -930.00 0.00 0.00 0.00 0.00 -930.00 -1116.00 -930.00 -1116.00 X 1988 -930.00 0.00 0.00 0.00 0.00 -930.00 .-1116.00 -930.00 -111600 Without the Project 1989 -930.00 0.00 0.00 0.00 0.00 -930.00 -1116.00 -930.00 -1116.00 1990 -930.00 0.00 0.00 0.00 0.00 -930.00 -1116.00 -930.00 -1116.00 1991 I -930.00 0.00 0.00 0.00 0.00 -930.00 -1116.00 -930.00 -1116.00 1992 I 0.00 -1.50 0.00 0.00 2617.80 2616.30 , 2616.00 2092.74 2092.44 1993 I 0.00 -1.50 0.00 0.00 2827.23 2825.73 2825.43 2260.28 2259.98 1994 I 0.00 -1.50 0.00 0.00 3053.41 3051.91 3051.61 2441.23 2440.93 1995 I 0.00 -1.50 0.00 0.00 3297.68 3296.18 3295.88 2636.64 2636.34 1996 0.00 -1.50 0.00 0.00 3561.49 3559.99 I 3559.69 2847.70 2847.40 1997 0.00 -1.50 0.00 0.00 3846.41 3844.91 I 3844.61 3075.63 3075.33 1998 0.00 -1.50 0.00 0.00 4154.13 4152.63 [ 4152.33 3321.80 3321.50 1999 0.00 -1.50 0.00 0.00 4486.46 4484.96 4484.66 3587.67 3587.37 2000 0 0.00 -1.50 0.00 0.00 4845.37 4843.87 4843.57 3874.80 3874.50 2001 I -285.00 -1.50 0.00 0.00 5233.00 4946.50 4889.20 3899.90 3842.60 00 2002 I 0.00 -1.50 0.00 0.00 5651.64 5650.14 1 5649.84 4519.81 4519.51 2003 I 0.00 -1.50 0.00 0.00 6103.78 6102.28 i 6101.98 4881.52 4881.22 2004 0.00 -1.50 0.00 0.00 6592.08 6590.58 6590.28 5272.16 5271.86 2005 0.00 -1.50 0.00 0.00 7119,44 7117.94 7117.64 5694.05 5693.75 2006 465.00 -1.50 0.00 0.00 7689.00 8152.50 8245.20 661 4.70 6707.40 Internal Rate of Return: 35.2% 31.8% 31.0% 27.9% Net Present Value at 1 2% -3759.06 -6.49 0.00 0.00 17487.44 13721.89 12968.78 10224.40 9471.29 : D 0 NET1 _A.WKI 06121/94  India - Tamil Nadu NH45 - Tamil Nadu Scenario 1 8 Economic Evaluation and Sensitivity Analysis Net Economic Benefits (M Rs) Sensitivity Analysis Capital Maintenance Normal Generated Diverted Total 20% Incr. 20% Decr. Combo-ed Costs Costs Traffic Traffic Traffic Costs (a) Bnft (bj (la & ib) Y-er With the Project , 1987 96.00 0.00 0.00 0.00 0.00 -96.00 -11520 -96.00 -115.20 X 1988 -96.00 0 00 0.00 0 00 0.00 -96 00 -115.20 -96.00 -115-20 Without the Project 1989 -96.00 0.00 0.00 0.00 0.00 -96.00 -115.20 -96.00 -115.20 1990 i -96.00 0.00 0.0 0.00 0.00 -96.00 I -115.20 -96.00 -11 5.20 1991 -96.00 0.00 0.00 0.00 0.00 -96.00 -11 5.20 -96.00 -115.20 1992 -96 00 0.00 0.00 0.00 0.00 -96.00 j -115.20 -96.00 -115.20 1993 -96.00 0.00 0.00 0.00 0.00 -96.00 I -115.20 -96.00 -115.20 1994 -96.00 0.00 0.00 0.00 0.00 -96.00 -115.20 -96.00 -115.20 1995 0.00 -0.60 583.57 0.00 0.00 582,97 582.85 466.26 486.14 1996 0.00 -0.60 601.08 0.00 0.00 600.48 600.36 480.28 480.14 1997 - 0.00 -0.60 619.11 0.00 0.00 618.51 618.39 494.69 494.57 1998 0 00 -0.60 637.68 0.00 0.00 637.08 1 636.96 509.55 509.43 1999 0.00 -0.60 656.81 0.00 0.00 656.21 I 656.09 524.85 524.73 1 2000 0.00 -0.60 676.52 0.00 0.00 675.92 675.80 540.61 540.49 2001 0.00 -0.60 696.81 0.00 0.00 696.21 696.09 556.85 556.73 2002 0.00 -0.60 717.72 0.00 0.00 717.12 - 717.00 573.57 573.45 2003 0.00 -0.60 739.25 0.00 0.00 738.65 738.53 590.80 590.68 2004 0.00 -0.60 761.43 0.00 0.00 760.83 760.71 608.54 608.42 2005 0.00 -0.60 784.27 0.00 0.00 783.67 I 783.55 626.81 626.69 2006 j 116.00 -0.60 807.80 0.00 0.00 923.20 9 948.28 761.64 784.72 Internal Rate of Return: 28.3% 25.7% 25.1 % 22.6% Net Present Value at 12% -520.65 -1.68 1859.70 0.00 0.00 1337.38 1232.90 965.42 860.96 NH45_1B.WK1 06/21/94  India - Tamil Nadu NH45 - Tamil Nadu Scenario 2B Economic Evaluation and Sensitivity Analysis Net Economic Benefits (M Rs) Sensitivity Analysis Capital Maintenance Norm.l Generated Diverted Total 20% Incr. 20% Dec,. Combined Costs Costs Traffic Traffic Traffic Costs (a) Bnft Ibl (a) & lb) Year With the Project 1987 -113.00 0.00 0.00 0.00 0.00 -113.00 -135.60 -113.00 -1 35.60 X 19S8 -113.00 0.00 0.00 0.00 0.00 -113.00 -135.60 -113.00 -135.60 Without theProlect 1989 -113.00 0.00 0.00 0.00 0.00 -113.00 -135.60 -113.00 -135.60 1990 -113.00 0.00 0.00 0.00 0.00 -113.00 I -135.60 -113.00 -135.60 1991 -113.00 0.00 0.00 0.00 0.00 -113.00 -135.60 -113.00 -135.60 1992 -113.00 0.00 0.00 0.00 0.00 -113.00 I -135.60 -113.00 -135.60 1993 -113.00 0.00 0.00 0.00 0.00 -113.00 -135.60 -113.00 -135.60 1994 -113.00 0.00 0.00 0.00 0.00 -113.00 -135.60 -113.00 -135.60 1995 0.00 -1.40 234.14 0.00 0.00 232.74 232.46 185.91 185.63 1996 0.00 -1.40 243.51 0.00 0.00 242.11 1 241.83 193.40 193.12 1997 0.00 -1.40 253.25 0.00 0.00 251.85 251.57 201.20 200.92 1998 0.00 -1.40 263.38 0.00 0.00 261.98 [ 261.70 209.30 209.02 1999 0.00 -1.40 273.91 0.00 0.00 272.51 272.23 217.73 217.45 2000 0.00 -1.40 284.87 0.00 0.00 283.47 283.19 226.49 226.21 2001 0.00 -1.40 296.26 0.00 0.00 294.86 i 294.58 235.61 235.33 , 2002 0.00 -1.40 308.11 0.00 0.00 306.71 306.43 245.09 244.81 2003 0.00 -1.40 320.44 0.00 0.00 319.04 318.76 254.95 254.67 2004 0.00 -1.40 333.25 0.00 0.00 331.85 331.57 265.20 264.92 2005 0.00 -1.40 346.58 0.00 0.00 345.18 344.90 275.87 275.59 j 2006 135.00 -1.40 360.45 0.00 0.00 494.05 520.77 421.96 448.68 Internal Rate of Return: 14.7% 12.6% 12.1 % 10.1 % Net Present Value at 12% 613.03 -3.92 779.86 0.00 0.00 162.90 39.51 6.93 -11 6.46 I _A 0 -4 NH45_28.WK1 06/21/94  India - Uttar Pradesh Varanmi Bypass/Bridge Scenario B Economic Evaluation and Sensitivity Analysis Net Economic Benefits lM Rs) Sensitivity Analysis Capital Maintenance Normal Generated Diverted Total 20% Incr. 20% Decr. Combined Costs Costs Traffic Traffic Traffic Costs (a) Bnft (b) la) & lb) Year With the Project 1987 | -140.00 0.00 0.00 0.00 0.00 -140.00 1 -168.00 -140.00 -168.00 X I 1998 8 -140.00 0.00 0.00 0.00 0.00 -140.00 -168.00 -140.00 -168.00 Without the Project I 1989 I -140.00 0.00 0.00 0.00 0.00 -140.00 -168.00 -140.00 -168.00 1990 I -140.00 0.00 0.00 0.00 0.00 -140.00 -168.00 -140.00 -168.00 1991 [ -140.00 0.00 0.00 0.00 0.00 -140.00 -168.00 -140.00 -168.00 1992 -140.00 0.00 0.00 0.00 0.00 -140.00 j -168.00 -140.00 -168.00 1993 I -140.00 0.00 0.00 0.00 0.00 -140.00 I -168.00 -140.00 -168.00 1994 I -140.00 0.00 0.00 0.00 0.00 -140.00 , -168.00 -140.00 -168.00 1995 I -140.00 0.00 0.00 0.00 0.00 -140.00 -168.00 -140.00 -168.00 1996 I -140.00 0,00 0.00 0.00 0.00 -140.00 -168.00 -140.00 -168.00 1997 0.00 -0.50 0.00 0.00 334.86 334.36 334.26 267.39 267.29 1998 I 0.00 -0.50 0.00 0.00 361.65 361.15 I 361.05 288.82 288.72 1999 I 0.00 -0.50 0.00 0.00 390.58 390.08 [ 389.98 311.97 311.87 2000 I 0.00 -0.50 0.00 0.00 421.83 421.33 421.23 336.96 336.86 2001 I 0.00 -0.50 0.00 0.00 455.58 455.08 I 454.98 363.96 363.86 2002 I 0.00 -0.50 0.00 0.00 492.02 491.52 491.42 393.12 393.02 2003 0.00 -0.50 0.00 0.00 531.39 530.89 I 530.79 424.61 424.51 2004 , 0.00 -0.50 0.00 0.00 573.90 573.40 573.30 458.62 458.52 2005 I 0.00 -0.50 0.00 0.00 619.81 619.31 619.21 495.35 495.25 2006 I 210.00 -0.50 0.00 0.00 669.39 878.89 920.79 745.01 786.91 Internal Rate of Return: 12.7% 10.8% 10.4% 8.6% Net Present Value at 127% -861.57 -1.02 0.00 0.00 920.41 57.81 -114.70 -1 26.27 -298.79 X (DN A x 0 NHV A.WK1 06/21/94  India - rVniab NH1 Punjab Scenario B Economic Evaluation and Sensitivity Analysis Net Economic Benefits (M Rsl Sensitivity Analysis Capital Maintenance Normal Generated Diverted Total 20% Incr. 20% Decr. Combined Costs Costs Tr.ffic Traffic Traffic Costs (a) Bntt tbi (da & (b) Year With the Project I 1987 -290.00 0.00 0.00 0.00 0.00 -290.00 -348.00 -290.00 348.00 X 1988 I -290.00 0.00 0.00 0.00 0.00 -290.00 -348.00 -290.00 -348.00 Without the Project j 1989 j -290.00 0.00 0.00 0.00 0.00 -290.00 j -348.00 -290.00 -348.00 1 990 -290.00 0.00 0.00 0.00 0.00 -290.00 -348.00 -290.00 -348.00 1991 I -290.00 0.00 0.00 0.00 0.00 -290.00 -348.00 -290.00 -348.00 1 992 [ -290.00 0.00 0.00 0.00 0.00 -290.00 -348.00 -290.00 -348.00 1993 I -290.00 0.00 0.00 0.00 0.00 -290.00 1 -348.00 -290.00 -348.00 1994 I -290.00 0.00 0.00 0.00 0.00 -290.00 -348.00 -290.00 -348.00 1995 0.00 -1.90 2695.83 0.00 0.00 2693.93 2693.55 2154.76 21 54.38 1996 I 0.00 -1.90 2911.49 0.00 0.00 2909.59 2909.21 2327.29 2326.91 1997 0.00 -1.90 3144.41 0.00 0.00 3142.51 3142.13 2513.63 2513.25 1998 I 0.00 -1.90 3395.97 0.00 0.00 3394.07 3393.69 2714.87 2714.49 1999 0.00 -1.90 3667.64 0.00 0.00 3665.74 3665.36 2932.21 2931.83 2000 0.00 -1.90 3961.05 0.00 0.00 3959.15 3958.77 3166.94 3166.56 2001 0.00 -1.90 4277.94 0.00 0.00 4276.04 4275.66 3420.45 3420.07 2002 0.00 -1.90 4620.17 0.00 0.00 4618.27 4617.89 3694.24 3693,86 2003 I 0.00 -1.90 4989.79 0.00 0.00 4987.89 - 4987.51 3989.93 3989.55 2004 0.00 -1.90 5388.97 0.00 0.00 5387.07 5386.69 4309.28 4308.90 2005 I 0.00 -1.90 5820.09 0.00 0.00 5818.19 5817.81 4654.17 4653.79 I 2006 I 350.00 -1.90 6285.70 0.00 0.00 6633.80 6703.42 5376.66 5446.28 Internal Rate of Return: 36.7% 34.0% 33.4% 30.7% Net Present Val.e at 12% -1572.85 -5.32 10781.46 0.00 0.00 9203.29 8887.65 7046.99 6731.36 rD 01 0 NHlP_B.WK1 06/21/94  India Haryana NH1 Haryana Scenario B Economic Evaluation and Sensitvity Analysis Net Economic Benefits IM R.) Sensitivity Analysis Capital Maintenaice Normal Generated Diverted Total 20% Incr 20% Decr. Combined Costs Costs Traffic Traffic Traffic Costs (a) Bnft (b) (al & lb1 Year With the Prolect 1987 -152.00 0 00 0.00 0.00 0.00 -152.00 -182.40 -152.00 -182 40 X . 1988 -152.00 0.00 0.00 0.00 0.00 -152.00 -182.40 -152.00 -182.40 Withi.t the Project 1989 -152.00 0.00 0 00 0.00 0.00 -152.00 -182.40 -1 52.00 -1 82.40 1990 -152.00 0.00 0.00 0.00 0.00 -152.00 -182.40 -152.00 -182 40 1991 -152.00 0.00 0.00 0.00 0.00 -152.00 -182.40 -152.00 -182.40 1992 152.00 0 00 0 00 0.00 0.00 -152.00 , -182.40 -152.00 -1 82.40 1993 -152 00 0.00 0.00 0.00 0.00 -152.00 [ -182.40 -152.00 -182.40 1994 -152.00 0.00 0.00 0.00 0.00 -152.00 -182.40 -152.00 -182.40 1995 -152.00 0.00 0.00 0.00 0.00 -152.00 -182.40 -152.00 -182.40 1996 0.00 -1.20 1588.09 0.00 0.00 1588.89 1 586.65 1269.27 1269.03 1997 0.00 -1.20 1715.14 0.00 0.00 1713.94 1713.70 1370.91 1370.67 1998 0.00 -1.20 1852.35 0.00 0.00 1851.15 - 1850.91 1480.68 1480.44 1999 0.00 -1.20 2000.54 0.00 0.00 1999.34 1 999.10 1599.23 1598.99 2000 0.00 -1.20 2160.58 0.00 0.00 2159.38 2159.14 1727.27 1727.03 2001 0.00 -1.20 2333.43 0.00 0.00 2332.23 2331.99 1865.54 1865.30 2002 0.00 -1.20 2520 10 0.00 0.00 2518.90 ; 2518.66 2014.88 2014.64 2003 - 0.00 -1.20 2721.71 0.00 0.00 2720.51 2720.27 2176.17 2175.93 2004 000 -1.20 2939.45 0.00 0.00 2938.25 2938.01 2350.36 2350.12 2005 0.00 -1.20 3174.60 0.00 0.00 3173.40 i 3173.16 2538.48 2538.24 2006 205.00 -1.20 3428.57 0.00 0.00 3632.37 3673.13 2946.66 2987.42 Internal Rate of Return: 33.4% 31.0% 30.4% 28.1 % Net Present Valueat 12% -883.28 -2.88 5286.92 0.00 0.00 4400.77 4223.54 3343.38 3166.15 > NH1H_B.WK1 06/21194  india - West Bengal Durgapur Expressway Scenario B Economic Evaluation and Sensitivity Analysis Net Economic Benefits IM Rs) Sensitivity Analysis Capital Maintenance Normal Generated Diverted Total 20% Incr. 20% Dect. Combined Costs Costs Ttaffic Traffic Traffic Costs (a) Bnft (b) (a) & (b) Year With the Prolect 1987 -167.00 0.00 D.o0 0.00 0.00 -167.00 -200.40 -167.00 -200.40 X 1988 -167.00 0.00 0.00 0.00 0.00 -167.00 -200.40 -167,00 -200.40 Without the Project 1989 -167.00 0.00 0.00 0.00 0.00 -167.00 -200.40 -167.00 -200.40 1990 -167.00 0.00 0.00 0.00 0.00 -167.00 -200.40 -167.00 -200.40 1991 -167.00 0.00 0.00 0.00 0.00 -167.00 -200.40 -167.00 -200.40 1992 -167.00 0.00 0.00 0.00 0.00 -167.00 -200.40 -167.00 -200.40 1993 -167.00 0.00 0.00 0.00 0.00 -167.00 -200.40 -167.00 -200.40 1994 -167.00 0.00 0.00 0.00 0.00 -167.00 -200.40 -167.00 -200.40 1995 -167.00 0.00 0.00 0.00 0.00 -167.00 -200.40 -167.00 -200.40 1996 0.00 -1.10 0.00 0.00 1242.11 1241.01 1240.79 992.59 992.37 1997 0.00 -1.10 0.00 0.00 1341.48 1340.38 1340.16 1072.08 1071.86 1998 0.00 -1.10 0.00 0.00 1448.80 1447.70 1447.48 1157.94 1157.72 1999 0.00 -1.10 0.00 0.00 1564.70 1563.60 1563.38 1250.66 1250.44 2000 0.00 -1.10 0.00 0.00 1689.88 1688.78 ! 1688.56 1350.80 1350.58 2001 0.00 -1.10 0.00 0.00 1825.07 1823.97 1823.75 1458.95 1458.73 p 2002 0.00 -1.10 0.00 0.00 1971.07 1969.97 1969.75 1575.76 1575.54 2003 0.00 -1.10 0.00 0.00 2128.76 2127.66 2127.44 1701.91 1701.69 2004 0.00 -1.10 0.00 0.00 2299.06 2297.96 [ 2297.74 1838.15 1837.93 2005 0.00 -1.10 0.00 0.00 2482.99 2481.89 2481.67 1985.29 1985.07 2006 225.00 -1.10 0.00 0.00 2681.62 2905.52 2950.30 2369.20 241 3.98 Internal Rate of Return: 28.9% 26.6% 26.1 % 23.8% Net Present Value at 12% -970.47 -2.64 0.00 0.00 4135.12 3162.01 2967.38 2334.98 2140.36 NE2_B.WK1 06/21/94  India - Gujarat Vadodara to Ahmedabad Expressway Scenario B Economic Evaluation and Sensitivity Analyss Net Economic Benefits IM Rs) Sensitivity Analysis Capital Maintenance Normal Generated Diverted Total 20% lncr. 20% Decr. Combined Costs Costs Traffic Traffic Traffic Costs (a) Bnft (bl la) & tbl Year With the Project | 1987 | -465.00 0.00 0.00 0.00 0.00 -465.00 F -558.00 -465.00 -558.00 X F 1988 F -465.00 0.00 0.00 0.00 0.00 -465.00 F -558.00 -465.00 -558.00 Without the Project I 1989 | -465.00 0.00 0.00 0.00 0.00 -465.00 -558.00 -465.00 -558.00 1990 F -465.00 0.00 0.00 0.00 0.00 -465.00 -558.00 -465.00 -558.00 1991 I -465.00 0.00 0.00 0.00 0.00 -465.00 -558.00 -465.00 -556.00 1992 F -465.00 0.00 0.00 0.00 0.00 -465.00 I -558.00 -465.00 -558.00 1993 F -465.00 0.00 0.00 0.00 0.00 -465.00 F -558.00 -465.00 -558.00 1994 I -465.00 0.00 0.00 0.00 0.00 -465.00 I -558.00 -465.00 -558.00 1995 I -465.00 0.00 0.00 0.00 0.00 -465.00 I -558.00 -465.00 -558.00 1996 I -465.00 0.00 0.00 0.00 0.00 -465.00 I -558.00 -465.00 -558.00 1997 I 0.00 -1.50 0.00 0.00 3846.25 3844.75 I 3844.45 3075.50 3075.20 1998 F 0.00 -1.50 0.00 0.00 4153.95 4152.45 I 4152.15 3321.66 3321.36 1999 I 0.00 -1.50 0.00 0.00 4486.27 4484.77 I 4464.47 3587.52 3587.22 2000 F 0.00 -1.50 0.00 0.00 4645.17 4843.67 I 4843.37 3874.64 3874.34 W 2001 F 0.00 -1.50 0.00 0.00 5232.78 5231.28 I 5230.98 4184.73 4184.43 U1 2002 F 0.00 -1.50 0.00 0.00 5651.41 5649.91 I 5649.61 4519.63 4519.33 2003 F 0.00 -1.50 0.00 0.00 6103.52 6102.02 I 6101.72 4661.32 4881.02 2004 F 0.00 -1.50 0.00 0.00 6591.80 6590.30 F 6590.00 5271.94 5271.64 2005 F 0.00 -1.50 0.00 0.00 7119.15 7117.65 F 7117.35 5693.82 5693.52 F 2006 F 700.00 -1.50 0.00 0.00 7686.68 8387.18 8 6526.66 6849.44 6989.14 Internal Rate of Return: 26.4% 24.3% 23.8% 21.79% Net Preent Value at 12% -2861.36 -3.06 0.00 0.00 10571.83 7707.41 7134.53 5593.05 5020.16 i|> NE1 _B.WK1 06/21/94