India - Madhya Pradesh Urban Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 4359-IN STAFF APPRAISAL REPORT INDIA MADHYA PRADESH URBAN DEVELOPMENT PROJECT June 8, 1983 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Rupees (Rs) Rs I = US$0.105 US$1 = Rs 9.5 MEASURES AND EQUIVALENTS 1 meter (im) = 39.37 inches 1 meter (m) = 3.28 feet 1 square meter (32) = 10.76 square feet 1 cubic meter (m3) = 35.31 cubic feet 1 kilometer (km) - 0.62 miles 1 hectare (ha) - 2,47 acres or 10,000 square meters I liter (1) 1.06 U.S. quarts liquid or 0.26 U.S. gallons lcd = liters per capita per day mld = million liters per day 1 lakh = 1,00,000 I crore 100 lakhs = 100,00,000 PRINCIPAL ABBREVIATIONS AND ACRONYMS DA = Development Authority DLA = Directorate of Local Administration EWS = Economically Weaker Section GOI = Government of India GOMP = Government of Madhya Pradesh HIG = High-Income Group HUDCO = Housing and Urban Development Corporation, Ltd. IDA = International Development Association IDS14T = Integrated Development of Small and Medium Towns LIG = Low-Income Group MIG = Middle-Income Group MOWH = Ministry of Works and Housing, GOI MPHB Madhya Pradesh Housing Board MPSCIB = Madhya Pradesh Slum Clearance and Improvement Board NBO = National Building Organization, GOI PHED Public Health Engineering Department, GOMP PHEEO = Public Health Engineering and Environmental Organization, GOI PITMC Project Management and Monitoring Cell RBI = Reserve Bank of India SADA = Special Area Development Authority TCPD = Town and Country Planning Department, GOMP TCPO - Town and Country Planning Organization, GOI  FOR OFFICIAL USE ONLY STAFF APPRAISAL REPORT INDIA MADHYA PRADESH URBAN DEVELOPMENT PROJECT Table of Contents Page No. MANAGEMENT SUMMARY ...................... i-i I. BACKGROUND ......... ...................................... 1 A. Introduction .................. 1 B. India - National Urbanization Trends and Management 1 C. Housing and Urban Development Corporation Ltd.(HUDCO) 2 D. Bank Group Role and Strategy in India's Urban Sector. 3 E. Urban Trends in Madhya Pradesh. 4 F. Urban Administration and Finance in Madhya Pradesh 5 G. Urban Services and Shelter in Madhya Pradesh. 6 II. THE PROJECT .................. 7 A. Project Objectives. . . 7 B. Rationale for City Selection in Madhya Pradesh.. 8 C. Project Description. . . 8 D. Project Costs . . .19 E. Financing Plan ................... . .. . 21 F. Procurement . . .23 G . Disbursement . .. 24 H. Accounts and Audits . . .25 I. Monitoring and Progress Reporting . . .26 J. Supervision ...26 III. PROJECT MANAGEMENT ......................... , ............ 26 A. Project Management Structure . .26 B. Implementation Responsibilities . .27 C. Project Agencies .28 This report is based on the findings of an appraisal mission which visited Madhya Pradesh in December 1982. The mission comprised Messrs. James Wright (mission leader), C. Godavitarne (World Bank), A. Bertaud and D. Colston (consultants). A team from HUDCO led by Mr. H.K. Yadav (Chief, Projects) actively assisted in project appraisal. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  -ii- Page No. IV. PRICING, AFFORDABILITY, AND RESOURCE MOBILIZATION ........ 32 A. Pricing .............................................. 32 B. Affordability .. 33 C. Resource Mobilization ....... 35 V. BENEFITS AND RISKS ....... . ........... 35 VI. AGREEMENTS REACHED AND RECOMMENDATIONS . . . 37 TABLES 11.1: The Project ................... ......................... 9 II.2: Area Development .. 11 Il.3: EWS Core Housing Options .. 12 II.4: Slum Upgrading ........................................ 13 II.5: City-Wise Expenditure for Maintenance and Solid Waste Management .. 16 II.6: Summary Costs .. 20 II.7: Financing Plan ..................... 22 II.8: Annual Capital Expenditure Plan ........... ........... 23 II.9: Estimated Disbursement Schedule .. 25 IV.1: Area Development: Plot Options, Costs, Indicative Charges and Affordability at Indore . . 34 IV.2: Slum Upgrading: Plot Options, Costs, Indicative Charges and Affordability for a Slum in Durg .. 34  -iii- ANNEXES Annex 1: City Profiles Annex 2: Project Details Table I - Detailed Project Costs Table 2 - Detailed Project Costs by City Table 3 - Area Development: Summary of Land Use (Percentages) Table 4 - Area Development: Plot Distribution and Community Facilities Table 5 - Municipal Maintenance and Solid Waste Management: Detailed Costs Table 6 - Details of Technical Assistance Chart 1 - Flow of Funds Chart 2 - Project Implementation Schedule Chart 3 - State of Madhya Pradesh Urban Agencies: Organization Chart Chart 4 - Project Impact on Growth of Unserviced Households in the Six Project Cities Annex 3: Financial Projections Table 1 - Possible Evolution of HUDCO's Financing Plan Table 2 - Indore Municipal Corporation - Financial Projections Table 3 - Raipur Municipal Corporation - Financial Projections Table 4 - Madhya Pradesh Housing Board Financial Projections Table 5 - Madhya Pradesh Housing Board - Revenue Account Projections Table 6 - Madhya Pradesh Housing Board - Project Cash Flows Table 7 - Madhya Pradesh Housing Board - Sources and Applica- tions of Funds Statement Annex 4: Selected Documents and Data Available in Project File MAPS IBRD 17005: Location of Project Sites IBRD 17006: Typical Slum Upgrading IBRD 17007: Indore Area Development; Sector Plan IBRD 17008: Indore Area Development; Typical Sector Layout   MANAGEMENT SUMMARY i. The proposed project would be the first Bank Group financed urban development project in India to support improvements in several cities in one state and to provide technical assistance to a number of state and local urban agencies. It would also be the first urban project involving a national intermediary, the Housing and Urban Development Corpolation, Ltd. (HUDCO), and would provide technical assistance to a number of Central Government agencies in the urban sector. It is expected, therefore, to have an impact beyond Madhya Pradesh by demonstrating ways of extending assistance to the large number of cities in India which would not otherwise benefit from Bank Group assisted projects and by strengthening the capacity of national agencies to provide such assistance. ii. Project cost totals Rs 47.7 crores (US$50.1 million) with a loan amount of Rs 22.9 crores (US$24.1 million). The project would support investments in six cities in Madhya Pradesh including the development of about 18,500 serviced residential and small business plots, the upgrading of 75 slum areas, the improvement of sanitation and off-site infrastructure and the improvement of municipal maintenance and solid waste management. The cities were selected from the state's two main growth regions, the Bhilai Region (including Raipur, Durg, and Bhilai) and the Indore Region (including Indore, Dewas, and Ujjain) based on an analysis of urban economic growth potential and existing service deficits. About 10% of project cost has been allocated for sub-projects in four additional cities for area development (about 4,200 plots), which would be selected by the State Government on the basis of agreed criteria, including proven growth potential. These would be appraised by HUDCO, during the project implementation period. HUDCO would submit its appraisal reports to the Bank for review. iii. At the national level, HUDCO would act as co-financier and intermediary for the project, channeling funds to the state level agencies and participating in project supervision. At the state level, funds would be channeled through the Madhya Pradesh Housing Board (MPHB) and coordinated by a Project Management and Monitoring Cell (PMMC) at the secretariat level. MPHB would implement part of the project directly and pass on the remainder of the project funds to the Indore Development Authority, the Special Area Development Authority of Bhilai and the Municipal Corporations of Raipur, Durg, Dewas, Indore, and Ujjain which would implement parts of the project. iv. Institutional strengthening for urban sector agencies at the central, state, and local levels is a key element of the proposed project. Institutional strengthening studies are already well under way to improve financial management in the Madhya Pradesh Housing Board, the Madhya Pradesh Slum Clearance and Improvement Board (MPSCIB), and the local development authorities and to improve resource mobilization by municipal governments. The studies and the implementation of their recommendations would be financed under the project. Additional training and technical assistance would also be provided to these institutions.  -ii- v. At the national level, HUDCO would be assisted to provide increased technical assistance to its borrowers, particularly in management and finance, and to improve many of its own systems and procedures, including project appraisal and supervision. Agencies of the Ministry of Works and Housing including the Town and Country Planning Organization, and the National Building Organization, would be assisted to improve project monitoring, evaluation and research capabilities. vi. Area development components in Madhya Pradesh would use more appropriate design standards and more efficient layout plans than in many previous low cost shelter projects in Madhya Pradesh. Differential land pricing would also be introduced to better reflect varying service levels and accessibility standards. The resulting lower unit prices for low cost plots would enable full cost recovery within the limits of affordability. Annual interest charges of 12% would be made compared to present HUDCO and MPHB charges of 4% for sites and services. About 80% of all area development plots would be affordable to the poverty group (with incomes below the 50th percentile). Through this project the practice of house construction in public sector projects by Government agencies would be reduced. Public agencies would concentrate on land development, and practically all house construction would be privately undertaken. vii. In slum upgrading, tenure would be given to beneficiaries and, in contrast to previous heavily subsidized programs, not less than 75% of the cost of land and development would be recovered with 12% p.a. interest charges. The cost of municipal infrastructure, maintenance, and solid waste management components would be recovered indirectly through improved local resource mobilization, principally property taxation.  I. BACKGROUND A. Introduction 1.01 This report outlines the proposed project which was appraised in December 1982. In parallel with project preparation, two sector memoranda have also been prepared to help define the proposed project and its objectives: Madhya Pradesh Urban Sector Memorandum, April 1982, (Report No. 3616-IN) and Housing and Urban Development Corporation, Ltd. (HUDCO): Its Potential Role in World Bank Assisted Projects, April 1982, (Report No. 3830-IN). HUDCO has assisted in the sector review in Madhya Pradesh as well as in project identification, preparation and appraisal. B. India - National Urbanization Trends and Management 1.02 India is primarily an agricultural country with about 76% of its people living in rural areas. Total population is estimated at 658 million 1/ according to the Provisional 1981 Census figures. In recent years the urban population of India has begun to expand rapidly, from 107 million in 1971 (20.2% of total population) to 156 million in 1981 (23.7% of total population). 2/ During the 1971-81 period, the urban population grew at 3.9% annually (compared to 3.3% during 1961-71) while the rural population grew at an annual rate of only 1.75%. If present growth rates continue, about 50% of India's population growth over the next two decades will be in cities. 1.03 According to the Provisional 1981 Census, about 60.4% of the urban population lived in 216 cities of more than 100,000 people. An additional 11.6% of the urban population lived in 270 towns with populations between 50,000 and 100,000. The growth of cities of all sizes has led to serious deficits in urban services and shelter. There are also acute problems of urban poverty. (See para 1.18.) 1.04 While primary responsibility for the formulation and implementation of urban development programs in India rests with state governments and local bodies, overall development policies and strategies are influenced by objectives laid down in the national five-year plans. The Sixth National Five-Year Plan (1980-85) stresses the need for providing affordable shelter, safe water supply and adequate sanitation to the urban poor. To achieve these objectives particular attention would be given to modification of existing by-laws, land use controls and minimum plot size requirements. Efforts would also be made to address the problems of slums by upgrading 1/ Not including Assam and Jammu and Kashmir. 2/ In the Indian census, urban centers include all municipal corporations, municipalities and notified area and cantonment boards. They also include settlements with more than 5,000 inhabitants in which 75% of the male working population is in non-agricultural pursuits and population density is not below 400 per square kilometer.  -2- rather than by relocation in order to maintain easy access to employment centers and to avoid destruction of the existing housing stock. 1.05 In the early 1970's, GOI began using central funding to address urban problems directly in the larger metropolitan cities, beginning with direct financial assistance to Calcutta. Similar efforts in Bombay and Madras followed. Also, a centrally funded Minimum Needs Program was introduced under the Fifth Five-Year Plan which included emphasis on environmental improvements in urban slums. Improvements were made in many slums under this program, but costs were not recovered and tenure was not usually provided. Under the Sixth Five-Year Plan, a centrally funded Program for Integrated Development of Small and Medium Towns (IDSMT) is financing land development, market centers and traffic and transportation schemes in towns with less than 100,000 inhabitants. 1.06 Urban policies and programs, including centrally funded urban programs and a number of technical assistance and training programs, are directed at the national level by the Ministry of Works and Housing (MOWH) and its agencies. The agencies of MOWH include the Town and Country Planning Organization (TCPO), the National Building Organization (NBO) and the Public Health Engineering and Environmental Organization (PHEEO). In addition, the MOWH has supervisory responsibility over the Housing and Urban Development Corporation, Ltd. (HUDCO), a semi-autonomous Government of India Corporation. 1.07 The TCPO is a technical advisory body of the Central Government. It provides assistance in physical planning to some states and cities, and it appraises projects submitted to GOI for assistance under the IDSMT. It also undertakes a variety of research and training activities. 1.08 The main objective of the NBO is the transfer of building technology from the research stage to practical application. NBO sponsors experimental building materials and construction projects and has a variety of information and documentation services. Low cost building research has a long history in India, but organizations such as NBO are required to put existing knowledge into more widespread practice. C. Housing and Urban Development Corporation Ltd. (HUDCO) 1/ 1.09 The most important direct involvement in the urban sector by a Central Government agency is by the Housing and Urban Development Corporation, Ltd. (HUDCO). HUDCO provides financing to state and local implementing agencies for several types of schemes, but 81% of the total loan amounts authorized to March 30, 1981 were for urban housing and plot development. The volume of HUDCO operations has increased rapidly in recent years. Of the total of about 1,404,200 housing units (Rs 1,095 crores or US$1,153 million) for which financing was authorized from HUDCO's inception in 1971 to March 31, 1983, about 284,879 units (Rs 221 crores or US$232 million) were authorized in fiscal year 1982-83. 1/ See Sector Memorandum, Housing and Urban Development Corporation, Ltd. (HUDCO) and its Potential Role in World Bank Assisted Projects, April 1982 (Report No. 3830-IN).  -3- 1.10 A series of Bank missions to India have assessed HUDCO's program and its capabilities, and HUDCO has been actively involved in the preparation and appraisal of the Madhya Pradesh Urban Development Project. HUDCO has objectives in urban lending which are similar to those of the Bank and emphasize low cost, financially viable projects to benefit the lowest income groups. HUDCO has a sound management structure with a small core of about 225 officers and staff, and it is soundly managed as reflected by its low administrative costs (0.6% of loans released in 1981-82; 0.30% of loan sanctions). It achieves an annual working surplus (Rs 4.1 crores in 1981-82), which constituted a rate of return of about 5.7% on HUDCO's net worth and has a strong reserve position (Rs 41.5 crores in March 1982), which has grown by about 50% per year during recent years. In FY82, HUDCO had an average lending rate of about 8% and an average cost of new borrowing of about 8.3%. Given HUDCO's large equity base, its average cost of funds in the same year was only 5.6%. 1.11 Several areas have been identified in which HUDCO's operations could be strengthened. More comprehensive loan appraisal and supervision could be means of improving project design and market fit as well as the efficiency of many borrowers in project implementation. Many of HUDCO's borrowers could benefit from increased assistance to improve their administration and financial management. Improved project design combined with a greater use of differential land pricing could enable HUDCO to raise its interest rates, which are based on a sliding scale with heavily subsidized loans for the lowest income groups, and improve its long-range financial viability. A step was recently taken in this direction by raising HUDCO's interest rate structure. D. Bank Group Role and Strategy in India's Urban Sector 1.12 The Bank Group's strategy for urban development in India has concentrated over the past decade on three of India's largest cities -- Calcutta, Madras and Bombay. The first Bank Group-supported urban projects, in Calcutta and Madras, financed integrated packages of urban services (sites and services, slum upgrading, water supply, sanitation, transport, solid waste management, health improvement and small business development). Follow-up projects in both cities have continued this pattern, although in Calcutta two general urban development projects have been supplemented by a sectoral project, the Calcutta Urban Transport Project, which supports a program of investments and policy measures designed to alleviate the critical transport deficiencies in the city. A third Calcutta Urban Development Project has recently been approved. In Bombay, a sectoral approach has been followed from the beginning. Projects in Bombay have thus far focused on transport and water supply, with a possible land development and shelter project currently under preparation. In the case of each of the Bank Group-supported urban projects, the objective has been not only to raise the level of urban services provided, but also to strengthen urban planning and service delivery institutions, to improve the use of available resources and to improve local resource mobilization. 1.13 All of the urban projects financed to date have supported local, state and central government initiatives to introduce policy changes in urban investment programs as well as institutional improvements. Policy changes  -4- introduced include: (i) design changes (e.g., cost per household for land, infrastructure and shelter has been reduced by some 75% over previous programs and slum clearance programs have been reoriented with the new emphasis on upgrading existing slums); (ii) improved cost recovery (e.g., interest rates increased from 4%-5% to 12% and substantial bus fare and water tariff increases); and (iii) the gradual shift of housing construction and finance from public to private sector with the public sector focusing on land and infrastructure development. Institutional strengthening has included improved municipal accounting, financial management and maintenance. 1.14 While the importance of improved management of India's major metropolitan areas has not lessened--and the Bank Group continues its involvement in Bombay, Calcutta, and Madras--the focus on urban development activities is now being broadened to include non-metropolitan cities. This expanded focus coincides with GOI emphasis on development efforts for small and medium towns. Thus, the experience gained in the major metropolitan areas can now be profitably put to use in the effort to strengthen the management of other cities. 1.15 An urban project approved in October 1981 for Kanpur represented the first step in Bank Group urban lending to non-metropolitan cities in India. While this project offers an opportunity to expand the understanding of the physical, legal, and policy environment in cities, like Kanpur, it would not be possible to make a significant impact on the large number of cities in India by proceeding on a city-by-city basis. Therefore, discussions were begun with GOI and HUDCO to prepare the first state-wide urban project in India which would finance investments in a number of cities in a given state with the assistance of state-level agencies and which would work at the central level with HUDCO and the Ministry of Works and Housing to expand their capacity to support urban projects, programs and institutions throughout India. The state of Madhya Pradesh was chosen for this first project because of the large number of medium-sized cities (14 cities with more than 100,000 inhabitants in 1981; 28 cities with 50,000-100,000 inhabitants) and because of its relatively high rate of urbanization (urban population grew at 4.6% per year during 1971-81 compared to 3.9% for All- India.) E. Urban Trends in Madhya Pradesh 1.16 Madhya Pradesh is the largest state in India, covering 13.6% of the total area of the country. With a 1981 population of 52 million, Madhya Pradesh has about 7.6% of India's population. In spite of the state's agricultural potential and natural resources, Madhya Pradesh ranks among the lowest states by almost all measures of development, including per capita income (Rs 1,180 in 1980-81 current prices compared to Rs 1,540 for All-India). Low per capita incomes are largely due to stagnation in the agricultural sector. Agriculture accounts for a relatively high proportion of state product (57% compared to 43% for All-India in 1977/78), and it registered practically no growth from 1970/71 to 1977/78. Low agricultural productivity has been partly due to a lack of irrigation facilities and low per hectare consumption of fertilizers. While mining and manufacturing are still small in relation to the agricultural share of the state's product, they have grown much more rapidly (6.2% per year during 1970/71-1977/78) and they are beginning to have an important impact on the state's economy.  -5- 1.17 The 1981 urban population of Madhya Pradesh was about 10.6 million or about 20% of the state's 52 million population. Urban population was expanding rapidly, at 4.6% annually during 1971-81 which was about twice the rate of population growth for the state. In contrast to some Indian states, urban growth in Madhya Pradesh has not been concentrated into a primate city. There are four large cities with 1981 populations above 500,000: Indore (827,000), Jabalpur (758,000), Bhopal (672,000) and Gwalior (560,000). A fifth large urban aglomeration is growing rapidly at Bhilai/Durg and Raipur which had a combined 1981 population of 829,000. The potential for future urban growth appears to be greatest in the Indore and the Bhilai regions which have the greatest economic potential. The cities of the Indore region, including Indore, Dewas and Ujjain, have an expanding agro-industrial and commercial base. The Bhilai region is an important manufacturing center for steel and related industries. Its largest city, Raipur, is expanding rapidly as a commercial center for a wide area. 1.18 Approximately 41% of urban households in India have monthly incomes below the Rs 520 absolute urban poverty threshold for 1980. Since per capita incomes are lower in Madhya Pradesh (about 25% lower than the All-India average in 1980), the percentage of urban households below the poverty line there is likely to be about 50%. 1/ F. Urban Administration and Finance in Madhya Pradesh 1.19 Responsibility for urban planning, administration and finance is shared by a number of agencies in Madhya Pradesh. The Department of Local Government, under the Minister for Local Government, is responsible for supervising the activities of the municipal corporations, municipalities and notified area committees. Supervision of municipalities and notified area committees is through the Directorate of Urban Administration and includes the review of budgets and staffing. Municipal corporations have a greater degree of independence. The local governments are primarily responsible for municipal services and maintenance such as street cleaning and lighting, removal of solid waste and nightsoil and administration of water supplies. 1.20 The Town and Country Planning Department (TCPD) and the development authorities are the principal urban planning and development agencies under the Department of Environment which is under the Minister for Environment and Housing. TCPD is in charge of preparing and enforcing Town Development Plans in the major cities. It is also represented on the boards of directors of the development authorities. The development authorities are established at the local level after Town Development Plans have been finalized. They have responsibility for implementing the plans, primarily by providing 1/ Recent household income data are not available to confirm this estimate. Given recent inflation, the March 1983 absolute poverty threshold can be estimated conservatively at about Rs 600 per household per month which means that households classified by GOI as Economically Weaker Section (EWS) with monthly incomes below Rs 350 and Lower Income Group (LIG) with incomes of Rs 350-600 per month fall beneath the poverty level. These constitute roughly 50% of the urban population in Madhya Pradesh.  -6- serviced land for residential, commercial and industrial development. A Madhya Pradesh Slum Clearance and Improvement Board (MPSCIB) has recently been established under the Department of Environment. The Madhya Pradesh Housing Board (MPHB), also under the direction of the Minister for Environment and Housing, is the most important agency for implementing low-cost housing schemes in the state. 1.21 Coordination among all agencies is accomplished because they are organized under one Secretary for Housing and Local Government who is also Commissioner for Environment. The Town and Country Planning Department plays a central role in the sector. The Directorate of Urban Administration has supported studies in municipal finance and management, but does not yet actively provide the municipalities with assistance at the required scale to improve revenue collections, financial management and maintenance. 1.22 The Housing Board produces about 7,000 units per year, which is a substantial accomplishment, but it lacks the necessary management and financial systems to expand its operations, and currently operates at a deficit. Under the project, improved accounting and financial management systems are being planned and implemented. 1.23 At the local level, most of the development authorities are staffed with engineers and architects. Their projects often reflect inadequate planning and weak economic and financial analysis, and cost recovery is limited. Financial viability is also hampered by a lack of adequate accounting and budgeting systems and many development authorities are running at serious deficits, but since accounts are kept on a cash basis they do not reflect accurately the financial position of the authorities. 1.24 Municipal governments are generally hampered by a lack of adequate financing. Some are running serious deficits (Rs 281 crores in Indore in 1981/82). Municipal revenues depend heavily on the property tax and on compensation from the State Government for the octroi tax which was abolished in 1976. Most cities, and especially Indore, are running large deficits in managing their water systems. The capacity of local management and accounting systems is also a major constraint to the expansion of municipal services. G. Urban Services and Shelter in Madhya Pradesh 1.25 A review of physical conditions in the urban areas of Madhya Pradesh reveals serious deficiencies in services and housing. About 50% of the urban population does not have access to a safe water supply, and improvements are constrained by low water revenues. There are sewer systems in only a few areas of the largest cities, and alternative means of sanitation such as nightsoil collection are inadequate. Many cities have immediate needs for sanitation, improved drainage, refuse collection and maintenance, and some of the larger cities require improved traffic management. The provision of these services is not being planned by municipal governments in an orderly way, based on a thorough assessment of needs, priorities and available resources. 1.26 There are severe shortages of serviced urban land and shelter. About 40% of the state's urban housing stock is in squatter settlements without  -7- tenure; another large percentage of urban housing is in densely populated inner city rental tenements. Partly because of the high development standards required by the urban development plans in the major cities, the private sector is largely precluded from low cost land development and from the provision of low cost housing. In some existing sites and services projects the private informal sector has been effectively excluded by requirements for downpayments and stamp taxes (totaling 30-40% of plot cost), building permits and other regulations which inhibit on-plot development. These issues will be addressed in the proposed project (see para 2.15). In spite of a considerable effort in providing low cost housing and sites and services, the Madhya Pradesh Housing Board (MPHB), which is exempt from some development standards, is meeting only about 23% of the low cost housing needs in the ten largest cities. However, the standards in many MPHB projects are still not affordable to low income groups without subsidies. Slum upgrading projects have been undertaken in several cities, largely with grant funds from the Central Government. However, as yet there has been no large scale slum upgrading program involving cost recove':y and secure tenure for beneficiaries. Policies and programs including cost recovery and the provision of tenure are being evolved in the newer projects to be undertaken by the Madhya Pradesh Slum Clearance and Improvement Board. II. THE PROJECT A. Project Objectives 2.01 The most immediate objective of the project is to reduce the serious deficit in urban shelter and services in up to ten cities in Madhya Pradesh. The project would demonstrate new planning and implementation strategies (e.g. efficient land use planning, slum improvement rather than clearance and improved cost recovery) which can later be used more widely in the state. A broader objective is the improvement in urban management and resource mobilization in these cities and the strengthening of state-level agencies which make critical investments in the urban sector (e.g., the Madhya Pradesh Housing Board and Madhya Pradesh Slum Clearance and Improvement Board) or which are responsible for guiding urban development and management in the state (e.g., TCPD, the Directorate of Urban Administration). 2.02 A further objective with even more far-reaching implications is to improve the capacities of central level institutions including HUDCO and agencies of the Ministry of Works and Housing to prepare, appraise, supervise and evaluate this type of project. The project would enhance the capacity of HUDCO to prepare, appraise and supervise urban projects and to provide increased technical assistance and training to its borrowers. The project would enhance the capacity of HUDCO to act as an intermediary in Bank Group-assisted projects and thus increase the potential impact of Bank Group assistance to the large number of medium and small cities in India which could not be addressed through individual projects. The project would also enhance the capacity of the Ministry of Works and Housing and its agencies, the Town and Country Planning Organization (TCPO), and the National Building Organization (NBO) to undertake policy evaluation, disseminate new urban development techniques and provide training.  -8- B. Rationale for City Selection in Madhya Pradesh 2.03 Project-supported physical investments would be focused in the two regions of the state which have the greatest potential for urban growth based on their resource bases and their commercial and industrial development patterns -- the Bhilai/Durg/Raipur Region and the Indore/Dewas/Ujjain region. The cities in these regions selected for investments range in size from about 100,000 to about 800,000 inhabitants. These regions were selected after a comprehensive urban sector assessment undertaken with HUDCO and State Government staff in January 1981. 1/ (See para 1.17 and Annex 1.) 2.04 Additional investments would be made, if justified, in up to four additional smaller cities, with high growth potential, for urgently needed land development. The State Government would select cities which have demonstrated above average growth during the last decade and/or which are benefiting from large investments in industry or mineral extraction (see also para 2.22). These sub-projects would be appraised by HUDCO and presented to the Bank for approval during project implementation, and a lump sum provision would be made. Any unallocated funds would be utilized for further sub-projects in the original six cities. 2.05 Although the scope of this project is necessarily limited to a small number of cities relative to the large size of Madhya Pradesh, there should eventually be a wider impact in the state through the demonstration of new techniques and through the development of state-level institutions. C. Project Description 2.06 The project would be implemented over the period July 1, 1983- June 30, 1988 and would include the components given in Table II.1. 1/ Madhya Pradesh Urban Sector Memorandum, Report No. 3616-IN, April 1982.  -9- Table 11.1: The Project Rs US$ * (crores) (million) A. Area Development: About 18,500 serviced residential and small business plots with shelter loans and community facilities at seven sites totaling about 200 hectares in six cities, benefiting about 93,000 persons. 14.4 15.2 B. Slum Upgrading: Upgrading of 75 slum areas containing about 37,000 households on about 220 hectares, including the provision of tenure, improved infrastructure services, home improve- ment loans, and community facilities, benefiting about 187,000 persons in six cities. 7.4 7.7 C. Sub-Projects in Medium Towns: Serviced residen- tial sites in four cities yet to be identified. 3.2 3.4 D. Sanitation and Off-Site Infrastructure: A road in Bhilai serving as access to project sites and pro- viding a bypass around the congested area of the town, and loans for installation of individual pour-flush latrines (including demonstration units). 1.2 1.2 E. Municipal Maintenance and Solid Waste Management: Equipment for improving the cleaning, repair and maintenance of roads, drains and sewers, and improved facilities for collection and disposal of refuse and nightsoil including workshop and depot improvements. 3.2 3.4 F. Technical Assistance 1. Assistance to State and Local Agencies 1.5 1.6 2. Assistance to HUDCO 2.0 2.1 3. Assistance to National Level Agencies 1.0 1.0 Base Costs 33.9 35.6 Physical Contingencies 1.9 2.0 Design, supervision, and management 2.5 2.6 Price Contingencies 9.3 9.8 Front End Fee 0.1 0.1 TOTAL 47.7 50.1 * Exchange Rate Rs 9.5 = US$1.0.  -10- 2.07 In view of the severe shortage of serviced land and shelter in the project cities, the major focus of the physical investment program would be on the provision of serviced land for low income residential and small-scale business use and on the extension of basic infrastructure to existing slum settlements which lack the most basic amenIties. The slum upgrading program in Indore would be implemented in parallel with a UNICEF supported Urban Community Development Program which would train community development workers to assist with the upgrading program and with improving the coumunities' access to complementary services (informal education, health care, etc.). Improvements in sanitation would be provided using technology developed under UNDP/TAG Global Sanitation Project. Some off-site infrastructure would be provided in the project cities. Assistance would be provided to the concerned agencies in the project cities to improve the level of maintenance of urban services and solid waste management. Finally, technical assistance, training and equipment would be provided to national-, state-, and local-level agencies to strengthen management, policy making capacity, and resource mobilization. 2.08 (a) Area Development (Base cost: US$15.2 million; Rs 14.4 crores). About 200 ha would be developed to provide about 18,500 serviced residential plots, including about 6.0 ha (average 3.0%) for commercial and small-business plots, on seven sites. These include one each in Indore, Ujjain, Dewas, Durg and Raipur, and two in Bhilai. All sites are located within about 5 km of the city centers and adjacent to developed residential areas. All sites would have independent water supply, except the Indore site which would be connected to the city water supply system. Low-cost sanitation methods (see para 2.23) would be used in all sites except Indore, which has an extensive sewer network. Initially the site in indore would be provided with a stabilization pond and it would later be linked with the city sewerage system. Off-site roads and power supplies are available near the sites. Although land for one site and one-half of another is already owned by MPHB, land acquisition for about 85% of the total area of the sites has yet to be completed. A number of steps have been taken including the identification of land parcels to be acquired, and the approval of acquisition of at least two sites by the Revenue Department. In order to begin project implementation, it would be adequate if 2 or 3 sites were available in the first year. Government already has 1 1/2 sites in its possession, and it has provided a detailed timetable, indicating that all sites would be acquired by the end of September 1983, which will be used to monitor progress in land acquisition. Thus, even allowing for delays, there is reasonable assurance that at least one or two more sites would be in its possession in time to begin work by September 1983 after the monsoon season. This assessment is based on actual experience of land acquisition in Bank Group supported urban projects in Madras and Kanpur, using similar legal procedures as in Madhya Pradesh. 2.09 Layout plans and cost estimates are available for six sites constituting about 80% of total area development (see para 2.40). Emphasis is being placed on design characteristics which would make about 80% of the plots affordable to low-income (EWS and LIG) families earning Rs 600 per month or less (see paras 4.08-4.09). Layout designs are appropriate for the needs of the various income groups to be accommodated. Efficient use of land would be achieved with an average of about 65% of each site being marketable  -1 1- (compared to marketable land of less than 45% typical in many projects in Madhya Pradesh). Vehicular access on primary and secondary roads would be provided to within about 75 m on average, of the smallest plots. An average net density of 450 persons per hectare would be achieved in the new communities Plot sizes would vary from about 35 m2 for EWS families to about 300 m~ for HIG families. About 65% of residential plots are designed for families of the EWS category. The city-wise distribution of the area development component is given in Table II.2. Since some of the proposed standards are not consistent with existing planning and building regulations, assurances were obtained that the proposed area development sub-projects would receive necessary GOMP and local planning and building approvals as appraised. Table II.2: AREA DEVELOPMENT No. of Area EWS LIG MIG HIG and TOTAL City Sites ha plots plots plots Small Business plots Bhilai 2 35.91 2,517 933 278 247 3,975 Raipur 1 33.39 2,217 993 254 63 3,527 Durg 1 18.97 1,206 493 115 52 1,866 Indore 1 86.25 4,262 1,095 891 295 6,543/a Ujjain 1 17.43 .1,184 496 116 42 1,838 Dewas 1 6.97 511 215 48 21 795 TOTAL 7 198.92 11,897 4,225 1,702 720 18,544 /a Includes 42 plots to be provided for multi-story flats. 2.10 In sites other than Indore, pour-flush pit latrines would be provided for the EWS plots using technologies developed by the UNDP/TAG program under the Water and Sanitation Decade Program of GOI, with various design features for the different soil conditions in the cities. Beneficiaries of other plots would be free to construct their own pour-flush latrines or other forms of sanitation with on-plot disposal. Optional loans of Rs 800 would be provided to LIG households to assist in the construction of latrines (see para 4.03). A 100% rate of uptake is assumed. 2.11 Most smaller plots would front on 3 m and 4.5 m pedestrian lanes. Larger plots would front on roads with rights of way ranging from 6 m to 12 m, with single or double-lane surfaced roads having bituminous surfacing of widths of 3.5 m to 6 m, respectively. Electricity networks and street lighting would also be provided. Trees would be planted along roads, and community facilities such as primary schools, markets and health centers would be provided. 2.12 Some core housing would be provided on EWS plots in three options (Table II.3) together with optional building loans averaging Rs 1,000 per household. The cores would vary from a toilet with a water connection to a single room in two stages of construction affordable to the various income categories. Optional shelter loans (see para 4.03) averaging Rs 3,000 per household would also be available to LIG households to assist self-help  -1 2- construction. Shelter loans provided in the project are based on assumed rates of uptake of 50% and 25% for EWS and LIG, respectively. Table II.3: EWS CORE HOUSING OPTIONS Average Approximate OPTION Cost Excluding Land and Infrastructure (Rs) 1. Pour-flush pit latrine /a with super- structure of 1.2 m wall (no roof) and a one-tap water point 1,200 2. Option 1, plus about 10 m2 skeleton room with brick columns and roof; no walls 3,500 3. Option 2, plus brick walls 5,600 /a Except Indore, where flush latrines will be connected to the sewer system. 2.13 To prepare for the first year's construction program, detailed engineering, including working drawings and bid documents, is being prepared for two area development sites. Bids will be invited about July 1983 so that work could begin about September 1983 after the monsoon season. 2.14 Procedures for the selection of beneficiaries ensure that the EWS and LIG plots would be allocated to the designated target income groups. HIG and MIG plots would be allocated to applicants at market prices. Beneficiaries would be given secure tenure on a 30-year renewable leasehold basis. Assurances were obtained that beneficiary selection criteria and terms and conditions of lease would be acceptable to the Bank. This would include the the simplification of plot allocation and lease procedures and the reduction of restrictions on on-plot construction to accommodate the needs of low income households. 2.15 Constraints in the Provision of Serviced Land and Shelter. Through this project, the practice of house construction in public sector projects by MPHB and the development authorities would be reduced with public sector agencies focusing on the provision of serviced land. Practically all house construction would be privately undertaken. However, given the scale of shelter requirements in Madhya Pradesh, it is in.ortant for these new public sector initiatives to be continued and for private sector involvement in the provision of serviced land and shelter to be increased. There are many constraints in the provision of serviced land and shelter for low income households. These constraints include physical planning and municipal engineering regulations, which make development unaffordable to Sow income households, and lack of access to land and credit. Some of these constraints need to be addressed at the national level, but others (especially physical planning and engineering regulations) are more directly controllable by state and local governments. The constraints affect both public sector agencies  -13- and private sector developers. Given the limited capacities of public sector agencies and the large demand, it is especially important to relieve constraints to private sector development. Another set of constraints (building regulations, licenses, fees, etc.) affects the ability of low income households to build their own houses after they are alloted plots. Assurances have been given by GOMP that a study will be undertaken to examine constraints to the public and private sectors in the provision of serviced land and shelter, including on-plot construction by low income households. The study will be initiated by October 31, 1983 by a task force whose terms of reference and composition will be agreed upon by GOMP and the Bank. A timetable for implementing appropriate recommendations will be reviewed with the Bank by December 31, 1984. 2.16 (b) Slum Upgrading. (Base cost: US$7.7 million; Rs 7.4 crores). About 75 slum areas in the six project cities would be upgraded under the project. The component would cover about 37,000 households occupying about 220 ha of land, as indicated in Table II.4. Table II.4: SLUM UPGRADING No. of Slums Land Land Area No. of Publicly Privately City ha Households Population Owned Owned Bhilai 51.4 9,030 45,150 11 - Durg 20.9 2,872 14,360 6 1 Raipur 37.8 6,131 30,655 14 6 Indore 82.5 16,000 80,000 20 - Ujjain 15.4 2,161 10,805 5 7 Dewas 12.0 1,220 6,100 5 _ TOTAL 220.0 37,414 187,070 61 14 2.17 Of the 75 slums, 61 are located on government, development authority or municipal land. Of the remaining 14 slums located on private land, three in Durg and Ujjain would be acquired by government under the provisions of the Slum Clearance Act. In the others, land has already been purchased by slum dwellers, and formal tenure registration would be provided under the project. Adequate publicly owned land is available to sustain the program for at least three years. 2.18 Existing slum areas would be improved by providing water, roads, footpaths, drainage, sanitation, street lighting, and landscaping. Optional home improvement loans (see para 4.05) would be provided to supplement beneficiary efforts to improve their dwellings or to construct individual pour-flush pit latrines. Provision has been made for a 50% uptake of an average loan of Rs 1,000. Tenure would be granted to the beneficiaries on a 30-year renewable leasehold basis. Since costs would be fully recovered, the standards of improvements for individual slum sites have been determined in accordance with the community's needs and its capacity to pay.  -14- 2.19 Upgrading proposals including cost estimates have been prepared for 12 slum areas (see para 2.40). Layouts take regard of existing land use patterns and community preferences. Where space is available, additional new plots would be created to accommodate displaced and new residents. Plot sizes and the range provided are designed to accommodate all the existing residents of these slum areas. Displacement and relocations are minimal, generally involving no more than 3% of households. Commercial plots have been created where space permits in order to service the community and to generate additional funds through sales. Flexibility in the determination of a minimum plot size ensures that even the poorest households would be accommodated. 2.20 Circulation is being provided mainly with 2 m to 3 m wide pedestrian access lanes. Vehicular access is being provided where feasible and necessary. Most plots are located no farther than 100 m from a vehicular road. Water supply is mainly through public standpipes. However, individual connections will be encouraged in order to conserve water and to improve cost recovery through direct water charges. To minimize maintenance problems involved in community latrines, individual or shared pour-flush pit latrines will be encouraged. Public conveniences would be constructed for residents who cannot afford individual facilities. 2.21 UNICEF is planning to initiate an Urban Community Development Program for Indore for the training of community workers who would work in slum neighborhoods to help mobilize communities for upgrading and to organize complementary social services. It has been agreed by UNICEF, GOMP and the Indore Municipal Corporation that this program will focus initially on slum areas to be improved under this project. Additional funds would be provided under the project for the training of community workers by MPSCIB for the other towns with UNICEF assistance. 2.22 (c) Sub-projects in Medium Towns. (Base Cost: US$3.4 million; Rs 3.2 crores). Provision has been made under the project for land development in up to four additional towns, yet to be identified. It is estimated that about 4,200 plots will be provided in the four towns. The identification and appraisal of these sub-projects would be done by HUDCO during project implementation. MPHB would prepare and implement the sub-projects. Only cities will be selected which have demonstrated above average growth during the last decade and/or which are benefiting from large investments in industry or mineral extraction and which have large shelter and service deficits. Cities would have to comply with the principle of providing affordable standards for a largely low-income target population with cost recovery as designed in the area development sub-projects which have already been appraised. MPHB would prepare plans and cost estimates for area development sites using the same principles applied to sub-projects which have already been appraised. HUDCO would appraise the sub-projects using criteria agreed upon with the Bank. In addition to their normal appraisal criteria, HUDCO would give special emphasis to ensure that projects would be affordable to low income groups at not less than 12% p.a. rate of interest. HUDCO would ensure that local planning and engineering regulations do not preclude efficient land development and construction. HUDCO would ensure that land pricing is consistent with local market conditions (using  -15- differential land pricing). Development of these sub-projects would commence only after the Bank, GOMP and HUDCO have agreed upon the selection of towns and the Bank and HUDCO have approved the designs. If acceptable sub-projects are not developed, additional sub-projects would be considered in the six cities which have already been identified for the project. 2.23 (d) Sanitation and Off-Site Infrastructure. (i) Sanitation (Base Cost: US$0.7 million; Rs 65 lakhs). Public and private sanitary facilities available in the project cities are inadequate. Existing public facilities are usually poorly maintained by municipal governments, and additional sanitary facilities are required in unserviced areas outside of area development and slum upgrading sites. Loans averaging Rs 1,000 each will be made available to households outside project areas to construct individual pour-flush latrines (see para 4.06). The technology is well developed to meet all types of soil condition and is supported by the GOI and under the Water and Sanitation Decade Program. Rs 10 lakhs would be provided under the project in each city, except in Raipur where sanitary conditions are particularly poor and Rs 15 lakhs have been allocated (benefiting 6,500 households). If, during the project period, the need for community latrines can be demonstrated and a satisfactory maintenance system is proposed, a part of these funds could be used for community latrines. (ii) Off-Site Infrastructure (Base cost: US$0.5 million; Rs 51.5 lakhs). The project would fund the construction of 10 km of road with a 6 m carriageway in Bhilai to provide access to one of the area development sites and to provide a missing bypass link to the congested trunk road near the Bhilai Steel Plant. Two sections of the bypass already exist, one completed section (about 6 km) through the heavy industrial area and another partly constructed, unsurfaced section (2.5 km). 2.24 (e) Municipal Maintenance and Solid Waste Management. (Base cost: US$3.4 million; Rs 3.2 crores). Maintenance of infrastructure and solid waste management receive little priority in most of the project cities, due to lack of funds, equipment and proper management systems. In order to derive the full benefit of existing infrastructure and infrastructure proposed under this project, both maintenance and solid waste management would be improved. Separate consultant studies of municipal maintenance and solid waste management are being initiated for the two largest cities, Indore and Raipur. These studies would recommend investments in maintenance and solid waste management in the two cities. A lump sum base cost amount of US$2.6 million (Rs 2.5 crores) would be provided for the purchase of equipment which may include handcarts, tar boilers, rollers, dozers, refuse trucks, tipper trucks, and front-end loaders. Expenditures would be made only after a review of recommendations and agreement by the Municipal Governments, GOMP and the Bank. 2.25 The four other cities, Bhilai, Durg, Ujjain and Dewas, provide inadequate services consisting mainly of road patchwork, refuse collection (with inadequate disposal) and maintenance of water supply. The project would provide immediate assistance to these four smaller cities for the replacement of equipment, the maintenance of infrastructure and the expansion  -16- of refuse disposal using the traditional trenching method. Expenditures are indicated by city in Table II.5. Table II.5: CITY-WISE EXPENDITURE FOR MAINTENANCE AND SOLID WASTE MANAGEMENT (Rs lakhs) Solid Waste Maintenance Management Total Indore * 70.00 70.00 140.00 Raipur * 60.00 50.00 110.00 Bhilai 9.14 9.97 19.11 Durg 7.64 6.47 14.11 Ujjain 13.40 8.21 21.61 Dewas 6.91 6.73 13.64 TOTAL 167.09 151.38 318.47 * Lump sum amounts allocated for use in accordance with recommendations of study. 2.26 Municipal corporations are involved in the design and implementation of works under this project. They will take over all infrastructure and improvements for maintenance. A maintenance charge will be collected from beneficiaries (see para 4.07). Present maintenance budgets, their adequacy and possible revisions in charges are being reviewed by consultants to assure adequate future maintenance (see para 3.20). 2.27 (f) Assistance to State and Local Agencies (Base cost: US$1.6 million; Rs 1.5 crores). 1/ (i) Assistance to Municipal Corporations 2.28 In addition to the technical assistance, which would be provided to the two largest cities of the project, Indore and Raipur, in designing improved urban maintenance and solid waste management systems (para 2.24), consultants financed under the project have begun work to recommend improvements in resource mobilization and financial management in these two cities and one smaller city, Dewas. The implementation of these recommendations, including training, would also be financed under the project (see para 3.20). The project would also finance technical training for municipal staff. Although it was necessary to limit the maintenance and solid waste studies to two cities and the resource mobilization study to three cities, the methodologies and systems recommended would ultimately be 1/ The training elements of these components are detailed separately in Table 6, Annex 2. The exact types and levels of training to be provided in Madhya Pradesh and the required institutional arrangements would be defined as part of the training needs study.  -17- applicable to other cities in the state. The State Department of Local Government is coordinating the technical assistance and training components to municipal governments. (ii) Assistance to Development Authorities 2.29 Two development authorities (the Indore Development Authority and the Special Area Development Authority of Bhilai) will implement area development components in this project. Technical assistance for the development authorities to improve financial management systems is being coordinated by the TCPD, which coordinates the activities of development authorities from the state level, and the Madhya Pradesh Vikas Pradhikaran Sangh, an association of development authorities. Consultants have begun work on a study which will recommend appropriate changes in financial management. The project would finance this study and the implementation of recommendations, including training (see para 3.16). It would also finance training for technical staff. (iii) The Madhya Pradesh Housing Board (MPHB) 2.30 The Housing Board will be involved as the implementing agency for several of the area development schemes and as coordinating agency for the project. Consultants have begun work under the project on a review of a new financial management and accounting system which is being put into practice and to make recommendations on its possible improvement. The implementation of consultants' recommendations would also be financed, including training (see para 3.12). Training and equipment would be provided to improve the technical capacity of MPHB, and evaluations of past MPHB programs would be financed. (iv) The Madhya Pradesh Slum Clearance and Improvement Board (MPSCIB) 2.31 Although the role of the Slum Clearance and Improvement Board would be limited in this project, since it is a new institution, consultants have begun work under the project to design appropriate management and financial systems for this new organization so that it will ultimately be able to promote slum improvement projects throughout the state. Implementation of the consultants' recommendations, including training, would be financed under the project (see para 3.21). MPSCIB would also coordinate the training of community workers for slum improvement areas with UNICEF assistance. (v) The Town and Counry Planning Department (TCPD) 2.32 The TCPD has coordinated much of the project preparation work. The project preparation process has revealed several areas where engineering and planning skills could be improved both at the state and local levels. Under the project, TCPD would be a focal point for training which would be provided to improve planning capabilities for this type of project as well as project monitoring and evaluation skills. In addition, TCPD would be provided with equipment for surveying, mapping and data processing. TCPD would be provided with assistance to develop a strategy for statewide urban development.  -18- 2.33 (g) Assistance to HUDCO (Base cost: US$2.1 million; Rs 2.0 crores). The capacity of HUDCO to prepare, appraise, and supervise projects of this type would be enhanced. Equipment would be financed to help strengthen HUDCO's internal systems and its capacity to prepare and disseminate technical information. The project would finance start-up costs and equipment for new HUDCO activities, including the provision of assistance to borrowers to improve financial management and project formulation and to convert to computer based systems. The project would finance evaluations of HUDCO's project appraisal supervision systems and past HUDCO projects. It would provide for training for HUDCO staff and for staff of borrowing agencies in training programs to be managed by HUDCO (see para 3.07). 2.34 (h) Assistance to National Level Agencies (Base Cost: US$1.1 million; Rs 1.0 crore). Assistance would be provided to the Ministry of Works and Housing (MOWH) and its agencies to improve their ability to plan, appraise, supervise, and evaluate this type of urban project. In addition, a review of training needs in the urban sector would be undertaken, and improvements in training programs would be designed and implemented through the Ministry of Works and Housing. (i) The National Building Organization (NBO) 2.35 NBO would be assisted to improve its dissemination of new building techniques through more direct involvement in projects. NBO would provide specific inputs to one or more of the area development sites of the project. This would include assistance with house design, materials use, construction planning, training in construction skills, etc. The project would assist NBO to provide these inputs which would be directly beneficial to the implementing agencies in Madhya Pradesh and would build NBO's capacity to undertake similar activities in the future. (ii) Town and Country Planning Organization (TCPO) 2.36 The project would finance evaluations of TCPO's project appraisal and monitoring systems. (iii) Training in the Urban and Water Supply Sectors 2.37 The project would assist MOWH to undertake a study of training needs in the urban sector in India to identify priority areas for training program improvement. A number of training programs and institutes are supported by MOWH in urban management and housing at the national, state and local levels, and there are several other relevant state and local training institutions and programs. MOWH plans to identify priority training needs, detail the types of training courses required, and identify the institutional requirements for undertaking the training. Funds have been allocated in the project to MOWH (Rs 42 lakhs) and to HUDCO (Rs 36 lakhs) to develop the training programs (in collaboration with appropriate training institutes) which would be identified as priorities and to finance initial training courses. By October 31, 1983, MOWH will appoint consultants for the study whose terms of reference and qualifications are acceptable to MOWH and the  -19- Bank. 1/ By December 31, 1984, MOWH and the Bank will review recommendations of the study and agree upon a timetable for implementing appropriate recommendations. A separate amount of Rs 8 lakhs has been set aside for the training of senior MOWH and central agency staff in housing finance and urban policy evaluation. Summary of Consultant Services Provided 2.38 The following consultants have been recruited at the state and local levels to assist with the project: (i) consultants to review maintenance needs of Indore and Raipur Municipal Corporations (Rs 3.2 lakhs); (ii) consultants to review resource mobilization and financial management and assist in implementation of the recommendations in the Indore, Raipur and Dewas Municipal Corporations (Rs 3.4 lakhs); (iii) consultants to review financial management in the local development authorities and assist in implementation of recommendations (Rs 3.6 lakhs); (iv) consultants to review financial management in the Madhya Pradesh Housing Board and assist in implementation of recommendations (Rs 3.1 lakhs); and (v) consultants to review financial management in the Madhya Pradesh Slum Clearance and Improvement Board and assist in implementation of recommendations (Rs 2.3 lakhs). Consultants will be recruited to review solid waste management in Indore and Raipur (36 man months; Rs 3.2 lakhs). By December 31, 1983, GOMP and the Bank will review recommendations for institutional strengthening and resource mobilization (items (ii), (iii), (iv) and (v) above) and agree upon a timetable for implementing appropriate recommendations (see paras 3.12-3.21). D. Project Costs 2.39 The total cost of the project, including contingencies, is estimated at US$50.1 million (Rs 47.7 crores), of which US$5.2 million (Rs 4.9 crores) or about 10%, represents foreign exchange costs. Summary cost estimates are given in Table I1.6 and detailed cost estimates for each component are given in Annex 2. 1/ This work would include a review of project related training needs in Madhya Pradesh and design of training components to be undertaken there. EDI has assisted in drafting preliminary terms of reference for the study.  Table II.6: SUMMARY COSTS Rupees (crores) US$ million (US$1 = Rs Foreign of Local Taxes Foreign Total Local Taxes Foreign Total Exchange Total Area Development 12.0 0.7 1.7 14.4 12.6 0.8 1.8 15.2 12 43 Slum Upgrading 6.5 0.3 0.6 7.4 6.8 0.3 0.6 7.7 8 21 Sub-projects in 2.7 0.1 0.4 3.2 2.8 0.2 0.4 3.4 12 10 Medium Towns Sanitation and Off-site 1.0 0.1 0.1 1.2 1.0 0.1 0.1 1.2 8 3 Infrastructure Municipal Maintenance 2.2 0.5 0.5 3.2 2.3 0.5 0.6 3.4 15 10 and Solid Waste Management Technical Assistance 4,1 0.3 0.1 4.5 4.4 0.2 0.1 4.7 2 13 Total Base Costs 28.5 2.0 3.4 33.9 29.9 2.1 3.6 35.6 10 100 Physical Contingencies 1.6 0.1 0.2 1.9 1.7 0.1 0.2 2.0 10 6 Design, Supervision, Management 2.1 0.1 0.3 2.5 2.2 0.1 0.3 2.6 12 7 Price Contingencies 7.9 0.5 0.9 9.3 8.3 0.5 1.0 9.8 10 28 Front End Fee 0.1 0.1 0.1 0.1 100 Total Project Costs 40,1 2.7 4,9 47,7 42,1 2,8 5,2 50,1 10  -21- 2.40 Base cost estimates are in March 1983 prices. Cost estimates for area development are based on designs for six sites representing about 80% of the component. Cost estimates for slum upgrading are based on engineering design for 12 typical slum areas representing varying densities, locations and physical conditions. Cost estimates for sanitation and off-site infrastructure are based on preliminary engineering designs for civil works. Recent quotations from suppliers and current market prices within India have been used to estimate costs for materials, vehicles and equipment required for the maintenance and solid waste management component. Average person-month costs (all inclusive) for locally procured consultant and advisory services are estimated at Rs 9,000 (US$950). Physical contingencies have been estimated at 10% for civil works with detailed engineering design and 15% for civil works with preliminary engineering design. Price contingencies have been estimated at 8.0%, 7.5%, 7.0%, 6.5% and 6.0% for the fiscal years 1983/84-1987/88 for both local and foreign costs. E. Financing Plan 2.41 The proposed loan of US$24.1 million would finance about 50% of project costs net of taxes and duties, which are estimated at US$2.8 million (Rs 2.7 crores). Retroactive financing of up to US$350,000 would be provided to project agencies as follows: (a) not exceeding US$250,000 for expenditure made after July 1, 1982 for consultant services required for project preparation; and (b) up to US$100,000 for expenditure incurred after June 1, 1983 for civil works. 2.42 Assurances have been obtained that the Government of India would make the proceeds of the loan available to HUDCO (equivalent to 40% of project cost) at an annual rate of interest of not less than 8.5% for 20 years including a 4 year grace period, except for the technical assistance funds for HUDOO and MOWH (equivalent to 8% of project cost) which would be passed as grants. HUDCO would add about 26% of the project cost from its own sources and would pass on a total of 66% of project funds directly to MPHB. Assurances have been obtained that HUDCO would onlend to MPHB at an annual rate of interest of 10% for 20 years, including a 4 year grace period. The MPHB would onlend to the implementing agencies at 11% p.a. for 20 years, including a 4 year grace period for those sub-projects which it will not itself implement. Beneficiaries of area development, slum upgrading and sanitation would be charged not less than 12% p.a. for up to 20 years. GOMP and project agencies would fund 26% of project costs. The detailed financing plan would be as indicated in Table II.7.  Table II.7: FINANCING PLAN (Rs crores) Primary Imple- Loans Contri- Loans menting Direct GOMP from tions from from Direct GOI Total Of Which Agency(s) Expenditure!' GoMP2/ Agencies3/ HUDC Expenditure5/ Cost Bank Area Development MPHB/DA's 0.64 1.33 4.23 14.81 21.01 7.30 Slum Upgrading Municipalities 0.07 3.12 7.61 10.80 4.40 Sub-projects in MPHB/ Medium Towns Municipalities 0.15 1.27 3.41 4.83 1.73 Sanitation and Off-site Municipalities 0.48 1.14 1.62 0.73 Infrastructure Municipal Maintenance Municipalities 1.10 2.62 3.72 3.04 & Solid Waste Management Technical Assistance (a) State & 1,87 1.87 1.87 local-level Urban Manage- ment (b) HUDCO 2.49 2.49 2.49 (c) GOI Agencies 1.24 1.24 1.24 Front End Fee 0.10 0.10 0.10 TOTAL 0.86 7.30 4.23 31.46 3.83 4776 22.90 1/ Passed directly from GOMP to budgets of Government departments for community facilities. 2/ At 10% per annum interest over 20 years including 4 years grace to MPHB. 3/ Agency contribution, mainly land from MPHB and other agencies,already owned or to be acquired. 4/ At 10% per annum interest over 20 years including 4 years grace to MPHB, in accordance with HUDCO terms for this project. 5/ Passed directly from GOI to Ministry of Works and llousing, GOI and HUDCO for technical assistance and training. Includes Rs 0.10 crores to GOI for front end fee. NOTE: MPHB would be the conduit for HUDCO and GOMP funds, implementing part of the project directly and onlending to other agencies at 11% per annum.  -23- 2.43 The proposed lending rates would be substantially above HUDCO's and MPHB's traditional lending rates for low income shelter. Beneficiaries are presently charged 4% for sites and services and 5% for EWS housing, in projects undertaken by MPHB and financed by HUDCO. Under this project, HUDCO and MPHB would be lending for the first time for a mixed urban development project at a higher flat rate for all income groups as well as for infrastructure and urban service loans (see para 4.01). 2.44 HUDCO requires loans for low-income groups to be guaranteed by State Governments. In this instance, however, under current Reserve Bank of India regulations, the State Government cannot provide such a guarantee because the interest rate exceeds 8% p.a. Since the HUDCO loan funds to MPHB would be at interest rates of 10% p.a., the RBI regulation is being amended. 2.45 Projections of annual expenditures during the project period are indicated in Table II.8. Table II.8: ANNUAL CAPITAL EXPENDITURE PLAN (Rs crores) 1983/84 1984/85 1985/86 1986/87 1987/88 Total A. Area Development 2.72 3.89 4.16 5.54 4.70 21.01 B. Slum Upgrading 1.41 2.02 3.24 2.30 1.83 10.80 C. Sub-Projects in Medium Towns - 0.65 1.63 1.49 1.05 4.82 D. Sanitation and Off-Site Infrastructure 0.14 0.30 0.48 0.52 0.18 1.62 E. Municipal Maintenance & Solid Waste Management 0.51 2.22 0.99 - - 3.72 F. Technical Assistance 0.49 1.31 1.68 1.19 0.95 5.62 Total 5.27 10.39 12.18 11.04 8.71 47.59 F. Procurement 2.46 About US$6.9 million (Rs 6.6 crores), inclusive of contingencies, would be spent for the procurement of plant and equipment including vehicles. Of this amount, contracts totaling approximately US$2.5 million (Rs 2.4 crores) would be awarded on the basis of international competitive bidding in accordance with Bank Guidelines (for refuse trucks, dozers, loaders, road rollers, sewer jetting equipment, hot mix plants). Contracts for equipment totaling approximately US$4.3 million (Rs 4.1 crores) would be let on the basis of competitive bidding advertised locally, in accordance with procedures satisfactory to the Bank. This involves numerous items (such as hand carts, and maintenance tools), with a large number of local manufacturers, which would not attract interest of foreign suppliers. It also includes equipment for which locally available spare parts and maintenance are important. The remaining equipment (total value US$0.1 million, Rs 0.1 crores) involves small contracts (under US$50,000) for items which would be procured through normal commercial channels after obtaining quotations from at least three suppliers.  -24- 2.47 The total estimated cost of civil works contracts, including contingencies, would be US$25.4 million (Rs 24.1 crores). This includes US$14.4 million (Rs 13.7 crores) for area development, US$6.7 million (Rs 6.3 crores) for slum upgrading, US$3.5 million (Rs 3.3 crores) for sub-projects in medium towns and US$0.8 million (Rs 0.8 crores) for off-site infrastructure. The three largest civil works contracts are for area development in Indore (US$6.0 million, Rs 5.7 crores), Bhilai (US$2.7 million; Rs 2.5 crores) and Raipur (US$2.5 million; Rs 2.3 crores). The cities of Raipur and Bhilai are about 650 km from Indore, and it would not be feasible to group these contracts. Other civil works contracts for area development vary in size from about US$0.6 million (Rs 0.5 crores) to US$1.4 million (Rs 1.3 crores). Civil works contracts for slum upgrading, sub-projects in medium towns and off-site infrastructure are also small and scattered and would be phased over the project period. In addition, practically all the civil works contracts involve simple, labor intensive, and low cost technology. For all of these reasons, it is not expected that the civil works contracts would attract the interest of foreign bidders. They would, therefore, be awarded on the basis of competitive bidding advertised locally. 2.48 Assurances have been obtained that the Bank and HUDCO would be provided the opportunity to review bid evaluations for contracts valued over Rs 40 lakhs prior to award. Local bidding procedures have been reviewed and improvements in the conditions of contract and procedures for evaluation have been incorporated. These include elimination of the practice of negotiating after bid opening and allowance for price escalation. G. Disbursement 2.49 The proceeds of the loan would be disbursed against: (a) 100% of foreign expenditures for directly imported plant and equipment, and 100% of local expenditures (ex-factory) for locally manufactured plant and equipment, procured through international competitive bidding; (b) 45% of expenditures for plant, equipment, and vehicles procured through local competitive bidding or prudent shopping; (c) 45% of expenditures on contracts for civil works; (d) 45% of expenditures on loans made for home construction improvement or low cost sanitation; and (e) 100% of expenditures for technical assistance, equipment and training and related equipment. Disbursements for (d) above, for civil works payments not exceeding Rs 300,000 (US$31,600) for an aggregate value of Rs 60 lakhs (US$0.63 million) and for procurement of plant, vehicles and equipment not exceeding Rs 150,000 (US$15,800) for an aggregate value of Rs 45 lakhs (US$0.47 million) will be made against statements of expenditure (SOE's), the documents for which would not be submitted to the Bank but retained and made available for inspection during the course of the project review missions. Independent auditors will be retained to carry out annual audits of all SOE's submitted in each fiscal year and MPHB will furnish the audit reports to the Bank within nine months of the end of each fiscal year. All other expenditures would be fully documented.  -25- 2.50 A schedule for disbursements of the Bank loan is shown in Table II.9. The region-wide sectoral disbursement profile for the urban sector indicates a six-year disbursement period. A six-year year disbursement period is also estimated for this project. Table II.9: ESTIMATED DISBURSEMENT SCHEDULE Bank Fiscal Quarter Ending Disbursement Cumulative Disbursement Year (US$'000) (US$'000) 1984 September 30, 1983 - December 31, 1983 100 100 March 31, 1984 300 400 June 30, 1984 300 700 1985 September 30, 1984 500 1,200 December 31, 1984 600 1,800 March 31, 1985 800 2,600 June 30, 1985 1,100 3,700 1986 September 30, 1985 1,200 4,900 December 31, 1985 1,200 6,100 March 31, 1986 1,400 7,500 June 30, 1986 1,400 8,900 1987 September 30, 1986 1,500 10,400 December 31, 1986 1,500 11,900 March 31, 1987 1,500 13,400 June 30, 1987 1,500 14,900 1988 September 30, 1987 1,500 16,400 December 31, 1987 1,500 17,900 March 31, 1988 1,400 19,300 June 30, 1988 1,200 20,500 1989 September 30, 1988 1,200 21,700 December 31, 1988 1,000 22,700 March 31, 1989 800 23,500 June 30, 1989 600 24,100 H. Accounts and Audits 2.51 HUDCO, MPHB, the Development Authority of Indore, the Special Area Development Authority of Bhilai and the five Municipal Corporations would maintain separate project accounts. The Project Management and Monitoring Cell would have the responsibility for reviewing and maintaining audited statements of project accounts for expenditure made by MPHB and the local implementing agencies. Annual audits of project accounts in all local implementing agencies will be collected by MPHB and submitted to the Bank within nine months after the close of each fiscal year. 2.52 HUDCO completes its full accounts in a timely manner after the end of each fiscal year and they are audited by external auditors. These are  -26- available to the public, and would be available to the Bank. No later than nine months after the close of each financial year, MPHB will submit to the Bank full audited financial statements and auditor's reports together with an evaluation of the internal controls and financial management of MPHB, accompanied by recommendations for improvements if deemed necessary. Although full audited financial statements would not be required from the development authorities and municipal corporations, independent project accounts will be maintained (see para 2.51), and these agencies are being assisted to improve their financial management as part of the technical assistance component of the project. I. Monitoring and Progress Reporting 2.53 MPHB will produce monthly summary status reports of all activities and submit them to the state-level Steering. Committee (see para 3.02) and HUDCO with recommendations for corrective actions. Based on the monthly reports and its own supervision and controls, HUDCO will prepare quarterly reports on the progress of the project towards its physical and financial goals and submit these reports to MOWH and the Bank within two months after each quarter. J. Supervision 2.54 About 90 staff-weeks of Bank supervision would be required over the five-year project implementation period. This is slightly less than the South Asia average of 20 staff-weeks per year for supervision of urban projects. The participation of HUDCO is expected to reduce the supervision burden somewhat, although HUDCO's supervisory role would be limited in this first HUDCO/Bank project while HUDCO becomes familiar with Bank procedures. III. PROJECT MANAGEMENT A. Project Management Structure 3.01 At the national level, MOWH would have overall supervisory responsibility for the project and would direct technical assistance and training components for central level agencies. HUDCO would act as co-financier and intermediary for the project, channeling funds to the state level and participating in project supervision. 3.02 At the state level, the project would be overseen by a secretariat- level Steering Committee chaired by the Secretary of Housing and Environment, and including the Secretary of Finance, the Commissioner of MPHB, the Commissioner of the MPSCIB, the Chief Executive Officer of the Indore Development Authority, the Deputy Secretary for Local Government, and the Chief Engineer of the Madhya Pradesh Vikas Pradhikaran Sangh. This committee would have responsibility for policy matters relating to the project and for coordinating the participation of state and local agencies. 3.03 A Project Management and Monitoring Cell (PMMC) has been created at the secretariat level to manage the project. It will consist of a Director and officers with expertise in area development, urban maintenance, slum  -27- improvement, finance and housing. Some members of the team (from TCPD and project agencies) already involved in the preparation of the project will form the nucleus of the PMMC. The PMMC would have responsibility for finalizing project formulation, monitoring project implementation and disbursements and managing separate accounts and progress reporting. With supervision by the PMMC, project funds would be channeled through the MPHB which would be responsible for collections from the implementing agencies (and from beneficiaries in sub-projects directly administered by MPHB) and repayments to HUDCO. Assurances have been obtained from GOMP that the MPHB would have first call on funds (grants, direct expenditure) normally passed to the implementing agencies in case of default on repayments. B. Implementation Responsibilities 3.04 The primary responsibility for individual project components would lie with the following agencies: Central Level Training and Institutional - Ministry of Works and Housing, GOI, Strengthening Housing and Urban Development Corporation, Ltd. (HUDCO) State and Local Level Area Development - MPHB (Bhilai, Ujjain, Dewas, Durg and Raipur). - SADA Bhilai - Indore Development Authority Slum Upgrading, Sanitation and - Municipal Governments of Indore, Off-Site Infrastructure, Dewas, Ujjain, Raipur, Durg, and Maintenance and Solid Waste SADA Bhilai. Management Technical Assistance, - Town and Country Planning Department Training and Institutional - Department of Local Government Strengthening - MPHB - MPSCIB - Development Authorities - Municipal Governments 3.05 In varying degrees, strengthening of the implementing agencies is required. The proposed program for institutional strengthening is outlined in paras 2.27-2.37 and in the following section.  -28- C. Project Agencies 3.06 HUDCO has been involved in project identification, preparation and appraisal. It has a long relationship with the MPHB and other implementing agencies in Madhya Pradesh. HUDCO's strong financial position and management and its extensive experience with loan programs for housing and urban development in Madhya Pradesh and the rest of India put HUDCO in an excellent position to act as intermediary for this type of project. This project would involve only about 5.5% of HUDCO's program for the current Five-Year Plan. HUDCO has an adequate staff of professional engineers, planners, and financial analysts for involvement in the project. An engineer has been assigned to work full time with this project and other officers (financial analysts and planners) will also be available as required. 3.07 The project is exposing HUDCO to new types of project lending, including lending for slum improvement and for municipal infrastructure and services. The project is exposing HUDCO staff to Bank Group procedures, including more in-depth involvement in project preparation, appraisal and supervision. The project would help HUDCO to develop a system for providing technical assistance to its borrowers. HUDCO's involvement in these new activities, as well as the direct technical assistance which would be provided to HUDCO under the project, would increase HUDCO's capacity to act as an effective intermediary for this type of project in the future. To improve the effectiveness of HUDCO's operations, assurances have been obtained that evaluations will be undertaken of several areas where scope exists for improvements. The evaluations would cover some past HUDCO financed projects, such as sites and services projects, which may have experienced poor occupancy or cost recovery and HUDCO's systems such as project appraisal and project supervision systems and procedures. HUDCO will also increase the technical assistance and training it provides to borrowers. Technical assistance by HUDCO to its borrowers would help to improve financial management and project planning. 3.08 During project implementation, HUDCO would provide direct assistance to MPHB and the other implementing agencies in the preparation of sub-projects for four additional medium towns. HUDCO would also appraise these sub-projects and submit them to the Bank for funding approval. In addition, HUDCO would continue to supervise the institutional strengthening components for project agencies in Madhya Pradesh. 3.09 Under this project, HUDCO would onlend at an annual interest rate of 10%, and beneficiaries at all income levels would be charged not less than 12% p.a. interest. These rates are well above HUDCO's present average lending rate (about 8%) and well above the rates presently charged to beneficiaries for sites and services and EWS housing (4% and 5%, respectively). This project would demonstrate to HUDCO the feasibility of combining a higher interest rate structure with more efficient land use, infrastructure, and house designs. The implications of HUDCO's being able to finance more affordable projects at more economic interest rates were  -29- examined at length in the HUDCO Sector Memorandum. 1/ If HUDCO were to gradually raise the average rate on new lending, its dependence on annual government subsidies and low interest borrowings would be lessened, and HUDCO would be able to borrow from a wide range of sources. A beginning was made in this direction in 1982 with an increase in HUDCO's rates for several types of lending. A possible evolution of HUDCO's financing is illustrated in Annex 3. 3.10 For project supervision, HUDCO would review detailed layout designs and detailed engineering and give the Bank an opportunity to comment. HUDCO would conduct supervision reviews, monitor project bottlenecks and provide assistance as needed. HUDCO would review bid awards on contracts over Rs 40 lakhs with the Bank. HUDCO would prepare quarterly progress reports using information submitted by MPHB. The Madhya Pradesh Housing Board (MPHB) 3.11 The MPHB would act both as the funding channel at the state level and as the implementing agency for some of the area development schemes. Legislation has recently been enacted empowering MPHB to onlend to other agencies, as would be required under this project. In the past, the program of MPHB has been heavily weighted towards low-income households (90% of units built in 1976-81 were for EWS and LIG households), but it has had serious financial and managerial problems. There is a lack of adequate cost accounting. Debtors' accounts are inadequately maintained. There is a lack of adequate planning and budgeting and information for management is inadequate for proper control. Financial accounts have not been completed for the last two years, although progress has been made recently with the closing of accounts for FY1979/80 and for 1980/81. 3.12 A separate system of accounts is being established to maintain adequate control of project funds (see para 2.51). However, over the longer-term the project is assisting to improve MPHB's overall financial management. Prior to the preparation of this project, a new system for debtors' accounting and project control had been designed, but it had not yet been implemented. Consultants are now reviewing the financial and managerial problems of MPHB and the proposed improvements in financial management. By April 15, 1983, they were expected to make recommendations including an integrated accounting system based on full project cost accounting with the allocation of overheads and other costs to projects, and improved debtor accounting. They will also recommend a system of budgetary control and long-range planning. As these recommendations are put into effect it is expected that MPHB would experience earlier fructification of assets and improved recoveries from debtors. This should lead to gradual improvements in MPHB's financial position, as outlined in Annex 3. 1/ Housing and Urban Development Corporation, Ltd (HUDCO) and its Potential Role in World Bank Assisted Projects (Report No. 3830-IN), April 1982.  -30- Development Authorities 3.13 The Indore Development Authority and the Special Area Development Authority of Bhilai (SADA) will implement area development schemes in their respective cities. 3.14 The activities of many development authorities are limited because of their weak financial condition. Many are operating at a deficit. Until now, development authorities have used cash accounting systems which do not control cost by project and do not enable proper pricing and cost recovery. There is no long-term planning or realistic budgeting. Many past projects have suffered from planning and management problems, including inappropriate designs for low income groups, inadequate financial analysis, delays in plot allocation, and poor construction supervision. 3.15 The project would demonstrate to the development authorities more efficient ways of designing and managing low cost land development projects. Informal training of development authority staff has already taken place during project preparation. This would be continued during the project period with training seminars for development authority staff in project planning and implementation which would be organized by TCPD. Staff from other development authorities in the State would benefit indirectly from the project experience of these two development authorities, and directly from participation in the training seminars. 3.16 Prior to project preparation, TCPD and the M.P. Vikas Pradhikaran Sangh, an independent association of the development authorities, had commissioned the design of a commercial accrual accounting system for the development authorities. As part of project preparation, consultants are working to assess the adequacy of the proposed system, and they were to make specific proposals by April 15, 1983 for any improvements necessary and for implementation and training. The analysis is concentrated on the Indore and the Raipur Development Authorities, but the conclusions should also be applicable in other development authorities. Municipal Corporations 3.17 Municipal corporations would implement slum improvement, sanitation and off-site infrastructure, municipal maintenance and solid waste management components. The cost of components other than slum improvement would be met largely from general revenues. Most municipal governments require stronger municipal tax systems in order to finance urban services. They are also having trouble financing water supply systems since water revenues are inadequate to meet the cost of services. This is especially true in Indore where the Municipal Corporation is unable to meet debt service commitments on water investments. In addition, the financial positions of the local governments are unclear because of the lack of distinction between capital and revenue expenditure and because accounts are only maintained on a cash basis. 3.18 Local taxes have been limited by the elimination of the octroi tax in Madhya Pradesh in 1976. The high property tax exemption threshold (at  -31- Rs 1,800 assessed annual rental value) deprives municipal governments of potential revenue. Stronger tax bases, efficient collections and improved financial management are required if the municipal governments are to play a useful role in the provision and delivery of services. 3.19 In the short term, the municipal governments which are running deficits, especially Indore, are relying on the State Government to finance deficits by not repaying debts for water supply (see Annex 3). Over the longer term, the municipal corporations and the State Government will have to come to terms with the fundamental financial issues by considering the following: (a) the abolition or lowering of the threshhold for exemption from property tax; (b) an increase in the overall percentage of property tax chargeable; (c) a change in the basis of assessment of properties, including location, built-up area, and cost of provision of water supply, sewerage, and maintenance; (d) the introduction of more efficient billing and collection systems; (e) the introduction of improved accounting, budgeting and financial management; (f) the introduction of operational improvements in water supply and sewerage operations; and (g) the introduction of an economic tariff structure to cover the operation, maintenance and depreciation costs of water supply and sewerage operations. 3.20 A consultant study undertaken as part of project preparation, due to be completed in May 1983, is addressing resource mobilization and financial management, including items (a)-(g) mentioned above. The inadequacy of accounting and budgeting systems is also being addressed. Possible improvements are being weighed against practical implementation problems and legal constraints. This study has been supervised by the State Government Department of Local Government, in consultation with HUDCO. The types of improvements which will be sought and their potential impacts are outlined for Indore and Raipur in Annex 3. Increased water tariffs and improved property tax assessments and collections would be the most important measures for improving the financial health of the municipal corporations. Madhya Pradesh Slum Clearance and Improvement Board (MPSCIB) 3.21 Although not directly involved in project implementation, MPSCIB is expected to play an important role in future slum improvement programs. Consultant services have been provided to design management and financial systems for this new organization.  -32- IV. PRICING, AFFORDABILITY, AND RESOURCE MOBILIZATION A. Pricing 4.01 About 65% of the total project costs would be directly recovered from the beneficiaries. The terms for shelter loans to beneficiaries outlined below are much closer to market rates than in existing Government programs (see para 3.09) and are expected to be positive in real terms. They should be evaluated against a background of overall price stability in India over the period 1974/75-1978/79. Although consumer prices in 1979/80 and 1980/81 rose at a rate of about 12% p.a., the average annual rate of inflation over the project period is expected to be under 9%. Price contingencies for the project period average 7%. Interest of not less than 12% p.a. will be charged to beneficiaries in area development, slum upgrading and sanitation and assurances were obtained that conditions of lease and hire purchase for beneficiaries would be satisfactory to the Bank. 4.02 Area Development. Differential land pricing would be used. Since EWS and some LIG plots are less desirable in terms of location, accessibility and service levels, they would be assigned a lower than average price per square meter. Conversely, the price per square meter of MIG and HIG plots and commercial and small business plots would be fixed at higher than average cost, since they have greater values. The actual cost of land for schools, health centers and post offices would be charged to the respective government departments. The cost of land for community centers would be borne by beneficiaries. 4.03 Approximately 96% of the total cost of this component would be directly chargeable (land, site preparation, on-site infrastructure, off-site infrastructure, on-plot development, and shelter loans), and would be recovered through plot sales and loan repayments. The terms of plot charges and loans would include: (i) for residential plots and shelter and sanitation loans for EWS, LIG and MIG households, a 10% downpayment on the price of the plot, with the balance of plot price and loan amount (if any) to be repaid at not less than 12% p.a. interest over 20 years; and (ii) for HIG and industrial and commercial plots, a 15% downpayment on the price of the plot, with the balance to be repaid at not less than 12% p.a. interest ever 15 years. 4.04 The remaining cost of community facilities (4%) would not be directly recovered, but some cost of off-site infrastructure would be recovered through user charges. 4.05 Slum Upgrading. The State Government plans to use land acquisition powers under the Slum Clearance Act to acquire the slums which are not already in public ownership. The cost of land is expected to be about Rs 5.00 per square meter. This value would also be assigned as the price for land in slums which are already under public ownership. Amounts charged to beneficiaries would be recovered with minimum 5% downpayments at 12% p.a. over 20 years. Shelter loans would also be repaid at 12% over 20 years. Slum improvements have been designed to be affordable to beneficiaries with full cost recovery. However, to lower the burden to beneficiaries, the State Government proposed to introduce a 25% subsidy on land and infrastructure.  -33- This would make slum upgrading financed under this project consistent with the remainder of the State's slum upgrading program which would also achieve not less than 75% of cost recovery. Previous programs in slums were fully subsidized. GOMP has agreed to review the adequacy of slum upgrading charges annually with the Bank. 4.06 Sanitation: Loans for low cost sanitation would be made at an interest rate of 12% p.a. over 10 years. Cost recovery mechanisms used for shelter loans in upgraded slums would be used. 4.07 Water Supply, Sewerage and Maintenance. Assurances have been obtained that water and sewerage facilities developed in project areas will be taken over for management by municipal governments and that prevailing water and sewerage rates will be charged to beneficiaries with individual connections. 1/ Municipal governments will assume the responsibility for maintenance of area development sites and upgraded slums. A minimum maintenance fee of Rs 3.00 per month will be collected from EWS beneficiaries and a fee of Rs 4.00 to Rs 6.00 per month will be collected from LIG beneficiaries, depending on plot size. The maintenance fees would supplement the municipal governments' resources for operation and maintenance which would otherwise be especially constrained in this type of project since over 65% of beneficiaries would be exempt from the payment of property taxes due to the high property tax exemption threshold (para 3.18). B. Affordability 4.08 Area development sub-projects have been designed so that about 64% of plots would be affordable to EWS households with monthly incomes less than Rs 350, (about the 35th percentile) with basic monthly charges starting at about Rs 25.00. 2/ An additional 23% of the plots would be affordable to LIG households with monthly incomes of Rs 350-600 (about the 35th to the 50th percentile). Basic monthly charges for upgraded areas would be about Rs 2.00 and Rs 6.00 for 15m2 and 25m2 plots and would be affordable to households earning Rs 200 and Rs 250 monthly, respectively. 4.09 Affordability analysis and indicative charges for the largest area development site in Indore are given in Table IV.1. Table IV.2 gives affordability analysis and indicative charges for a typical slum upgrading site in Bhilai. 1/ Prevailing domestic water tariffs vary from Rs 0.28/1,000 liter to Rs 0.35/1,000 liter. The present tariff structure is estimated to meet 50% to 70% of operation and maintenance costs. 2/ A total monthly payment of Rs 31.61 would be charged including water and maintenance charges.  -34- Table IV.1: AREA DEVELOPMENT: PLOT OPTIONS, COSTS, INDICATIVE ---------- CHARGES AND AFFORDABILITY AT INDORE (March 1983 Prices) AFFORDABILITY Plot type EWS1 EWS2 EWS3 LISI LIB2 LIG3 MIGi M182 Monthly income/hald 250 300 350 450 550 750 1200 1500 X of plots 31.40 24.01 12.80 2.91 9.88 4.74 10.02 4.24 Number of plots 2075 1586 846 192 653 313 662 280.26 Plot size (avarage)m2 35.32 35.32 35.32 44.65 55.82 93.03 139.54 223.26 Sale price per net m2 25 25 25 72 90 95 125 130 Cost of Core house 1600 4665 5998 -------------------------------------------------------------------__-------- TOTAL CAPITAL/HSLD 2483 5548 6881 3215 5024 8836 17443 29024 -----------------------------------------------------------------__---------- Downpayment X 10 10 10 10 10 12 15 15 Yearly interest rate 12 12 12 12 12 12 12 12 Recovery period (years) 20 20 20 20 20 20 20 20 -----------------------------------------------------------------------__---- MONTHLY PAYMENT 24.61 54.98 68.19 31.86 49.78 85.63 163.25 271.64 X OF MONTHLY INCOME 9.84 18.33 19.48 7.08 9.05 11.42 13.60 18.11 Monthly water charges 4 4 4 metered water supply Other maint. charges 3 3 3 4 5 6 property tax TOTAL MONTHLY PAYMENT 31.61 61.98 75.19 35.86 54.78 91.63 163.25 271.64 Building loan (b.l.) 1500 1000 500 3000 3000 3000 Monthly b.l. payment 16.52 11.01 5.51 33.03 33.03 33.03 0.00 0.00 TOTAL PAYMENT WTH LOAN 48.12 72.99 80.69 68.89 87.82 124.67 163.25 271.64 3 of monthly income 19.25 24.33 23.06 15.31 15.97 16.62 13.60 18.11 -----------------------------------------------------------------__---------- Table IV.2: SLUM UPGRADING: PLOT OPTIONS, COSTS, INDICATIVE ---------- -CHARGES AND AFFORDABILITY FOR A SLUM IN BHILAI (March 1983 Prices) AFFORDABILITY Plot type *1 *2 *3 *4 Monthly income/household (Rs) 200 250 350 600 X of plots 14.00 35.00 31.00 20.00 Number of plots 73 183 162 105 Plot size (average)m2 11.41 21.7 38.3 103 *Sale price per net m2 (Rs) 16.14 26.90 37.60 70.00 TOTAL CAPITAL/HOUSEHOLD (Rs) 184.16 583.73 1440.1 7175 Downpayment X 5 8 10 10 Yearly interest rate 12 12 12 12 Recovery period (years) 20 20 20 20 - -- -- -- -- -- -- -- -- - - -- -- -- - -- -- -- --- -- -- - -- -- -- -- - MONTHLY PAYMENT (Rs) 1.93 5.91 14.27 71.10 X OF MONTHLY INCOME 0.96 2.37 4.08 11.85 Maintenance charges (Rs) 3 3 3 3 TOTAL MONTHLY PAYMENT (Rs) 4.93 8.91 17.27 74.10 Building loan (b.l.) (Rs) 500 500 1000 1000 Monthly b.l. payment (Rs) 5.51 5.51 11.01 11.01 TOTAL PAYMENT WITH LOAN (Rs) 10.43 14.42 28.28 85.11 X of Monthly Income 5.22 5.77 8.08 14.19 ------------------------------------------------------------------__--------- AMOUNT RECOVERED/NET m2 (Rs) 50.80 ------------------------------------------------------------------__--------- *These charges reflect the present GOMP plot charge schedules. GOMP is presently examining the possibility of revising the plot charge distribu- tion while maintaining the overall level of cost recovery.  -35- C. Resource Mobilization 4.10 The costs of off-site infrastructure, solid waste management and maintenance would largely be recovered through the general revenues of the municipal governments (although some costs of water supply, sewerage and maintenance would be met by user charges). The project includes a major effort to improve the general revenue collection of the municipal corporations, as explained in paras 3.17-3.20. V. BENEFITS AND RISKS 5.01 The principal benefits of the proposed project would be (a) to redirect a significant proportion of public investment in land, infrastructure and shelter toward low-cost, replicable programs using affordable designs which would benefit low-income groups; (b) to introduce the principle of full cost recovery for low-income shelter programs; (c) to expand the capacity of local and State-level institutions in Madhya Pradesh to plan and manage urban growth; and (d) to enhance the capacity of national-level agencies to support low-cost urban development programs. The enhancement of HUDCO's capacity to finance low-cost shelter projects would be a benefit of the project. Given HUDCO's responsibility for providing technical assistance and financing for urban development projects throughout India, and its ties to State and local agencies, the potential impact is considerable. 5.02 The project would have an important impact on poverty groups in Madhya Pradesh. The area development component would serve about 18,500 households in the six project cities and about 4,200 households in the four medium towns, about 81% of whom fall below the estimated urban poverty level, providing them with shelter, basic services, primary (and secondary) education, and health care. 1! The average per-household cost of plots, core houses and loans would be Rs 9,050 (US$950). Slum upgrading sub-projects would provide basic infrastructure and sanitation to approximately 37,000 households, about 90% of whom fall below the urban poverty threshold and many of whom have no access to basic sanitary facilities. The average per-household cost of upgrading and shelter loans would be Rs 2,330 (US$235). Supporting investments in sanitation and off-site infrastructure would benefit a population of aproximately 80,000 people or about 16,000 households, and the solid waste management and maintenance components would improve environmental conditions and reduce health risks for an estimated 500,000 people in the six cities. 5.03 Economic rates of return (ERR's) have been calculated for the main components of the project. For area development components an ERR of 14% has been estimated using market data for rental values of completed structures and sales prices for developed land. In the case of slum upgrading, rental market information was used to determine the difference in rental value between existing residential and commercial structures before and after upgrading. This yields an ERR of 19%. Together, these quantifiable components of the project account for 63% of total costs and 1/ See footnote to para 1.18 concerning poverty levels.  -36- have a weighted average ERR of 16%. These rates of return may not fully account for the benefits of improved health as well as the many indirect and longer-term benefits resulting from the demonstration of new investment strategies and the development of urban sector agencies. 5.04 New and more efficient planning techniques have been introduced in this project. Area development plans prepared under this project have alloted about 65% marketable land, compared to 45% typical in many previous projects in Madhya Pradesh. Where possible, more appropriate standards for infrastructure have been designed. Through careful planning and the elimination of space which tends to be underutilized in low income communities (such as wide roads and large open spaces), an hygienic and aesthetically acceptable environment has been planned, at higher densities. Thus, although the average cost of plots has been reduced by about 65%, the amounts beneficiaries would be willing to pay for plots have not been reduced. Costs are made even more affordable for the lowest income groups by using differential land pricing. These designs are, thus, much more economically feasible than previous designs. Their higher financial return enables a much higher rate of interest to be charged (12% compared to 4-5% in previous projects) without making the project unaffordable to low income groups. 5.05 The major risk in the project relates to the capacity of the implementing agencies. Although HUDCO has sound management and financial systems and the proposed project represents only a small percentage (5.5%) of HUDCO's program, this is a new type of project for HUDCO. The risk of being overly dependent on HUDCO as an intermediary at this time has been minimized by maintaining a direct relationship between the Bank and the State Government in this first HUDCO/Bank project. The capacities of agencies at the state and local levels are limited. Project planning, implementation and financial management capacities will have to be expanded at the MPHB as well as in the local implementing agencies. The institutional strengthening program described in paras 2.27-2.32 should help to improve the capacity of the implementing agencies for financial management. In the meantime, control of project funds will be ensured through the use of separate project accounts. Because of the anticipated complexity of implementation, some components discussed during project preparation have been dropped. In addition, the time allowed for project implementation was increased from four to five years to allow for anticipated implementation problems. 5.06 A second risk factor of the project is land acquisition, although this risk is spread, since there are seven sites for area development and work could proceed on some sites while acquisition is finalized for others (see para 2.08). About 85% of land for area development is yet to be acquired. The process which the State Government proposes to use for land acquisition has not been fully tested, and delays and cost overruns are possible. However, some progress has recently been achieved in land acquisition.  -37- VI. AGREEMENTS REACHED AND RECOMMENDATIONS 6.01 The following agreements were reached with GOI at negotiations: (a) By October 31, 1983, MOWH will appoint consultants to undertake a study of training needs in the urban development sector with terms of reference and qualifications acceptable to MOWH and the Bank. By December 31, 1984, MOWH and the Bank will review recommendations of study and agree upon a timetable for implementing appropriate recommendations (see para 2.37); and (b) GOI will make the proceeds of the loan available to HUDCO at an annual rate of interest of not less than 8-1/2% for 20 years, including a 4 year grace period, except for the technical assistance funds to MOWH and HUDCO which would be passed as grants to those agencies (see para 2.42). 6.02 The following agreements were reached with HUDCO at negotiations. (a) HUDCO would onlend to MPHB at an annual interest rate of not less than 10% for 20 years, including a 4 year grace period (see para 2.42); and (b) Evaluations will be undertaken of past HUDCO projects and of HUDCO's systems and procedures for project preparation, appraisal and supervision and completed by December 31, 1985. HUDCO will increase the technical assistance and training it provides to borrowers (see para 3.07). 6.03 The following agreements were reached with GOMP at negotiations: (a) Proposed area development sub-projects will receive necessary GOMP and local planning and building approvals (see para 2.09); (b) Beneficiary selection criteria will be acceptable to the Bank (see para 2.14); (c) Proposals for reducing constraints to the public and private sectors in the provision of serviced land and shelter (including on-plot construction by low income households) will be prepared by GOMP by a task force whose terms of reference and composition will be agreed by GOMP and the Bank. The work will begin by October 31, 1983. By December 31, 1984, GOMP and the Bank will agree on a timetable for the implementation of appropriate recommendations (see para 2.15); (d) By February 1984 GOMP will propose towns selected for sub- projects in medium towns. Development in the medium towns will be done after the Bank, GOMP and HUDCO have agreed on the selec- tion of the towns and the Bank and HUDCO have agreed on the designs (see para 2.22); (e) Expenditure for municipal maintenance and solid waste management in Indore and Raipur will be made be only after a review of recommendations and agreement by the municipal governments, GOMP and Bank (see para 2.24);  -38- (f) By December 31, 1983 GOMP and Bank will review recommendations for institutional strengthening and resource mobilization and agree upon a timetable for implementing appropriate recommenda- tions (see para 2.38); (g) The Bank and HUDCO will be provided the opportunity to review bid evaluations for contracts valued over Rs 40 lakhs prior to award (see para 2.48); (h) Procedures for local competitive bidding under the project will be satisfactory to the Bank (see para 2.48); (i) Independent auditors will be retained to carry out annual audits of all SOE's submitted in each fiscal year and MPHB will furnish audit reports to the Bank within nine months after each fiscal year (see para 2.49); (j) Annual audits of project accounts in all local implementing agencies will be collected by MPHB and submitted to the Bank with- in nine months after the end of each fiscal year (see para 2.51); (k) No later than nine months after the close of each financial year, MPHB will submit to the Bank full audited financial statements and auditors' reports together with an evaluation of the internal controls and financial management of MPHIB accompanied by recom- mendations for improvement, if deemed necessary (see para 2.52); (1) In case of default on repayments by any of the implementing agencies to MPHB, MPHB will have first call on funds normally passed to those agencies by the State Government (see para 3.03); (m) Interest of not less than 12% p.a. will be charged to benefi- ciaries in area development, slum upgrading and sanitation and other terms and conditions of lease and hire purchase for bene- ficiaries will be acceptable to the Bank (see para 4.01); (n) The price of serviced public land will be fixed to recover not less than 75% of the full cost of development and the cost of land. In the case of public land, the cost of land charged will be not less than Rs 5.00 per square meter (gross) (see para 4.05); and (o) Water and sewerage facilities will be taken over for management by municipal governments and prevailing water and sewerage rates will be charged to beneficiaries with individual connections. Municipal governments will assume the responsibility for main- tenance of area development sites and upgraded slums. A minimum maintenance fee of Rs 3.00 per month will be collected from EWS beneficiaries and a fee of Rs 4.00 to Rs 6.00 per month will be collected from LIG beneficiaries, depending on plot size (see para 4.07). 6.04 On the basis of the above agreements, the project would be suitable for a Bank loan to GOI of US$24.1 million.  -39- ANNEX 1 City Profiles Three cities in each of the state's two principal growth regions have been chosen for this project in order to provide urban services, shelter, and administrative and financial support in those cities which are experiencing the most rapid growth. A. Raipur Raipur is the largest city of southeastern Madhya Pradesh. Together with Bhilai and Durg, it is part of a growing urban industrial region. It is also an important commercial center for a region with a large agricultural and natural resource base. The population of Raipur grew at more than 5% per year during the 1971-81 period to a level of 339,000, making Raipur one of the fastest growing large cities in the state. The provision of housing and serviced plots by the Raipur Development Authority and the Madhya Pradesh Housing Board has been unable to keep up with this growth. Some slum improvement schemes have been undertaken by the Municipal Corporation, but these have only provided very minimum services to about 26% of the slum population. B. Bhilai Bhilai, in the eastern region near Raipur, came into existence in 1956 with the construction of the Bhilai steel plant. Although workers' housing was provided for about 60% of steel plant employees, this was insufficient, and it did not provide accommodation for workers of the many commercial and service enterprises which have grown up outside the steel township. The result has been rapid growth of unplanned and unserviced squatter settlements adjacent to the steel township. Bhilai's population more than doubled during the 1971-81 period to 372,000 in 1981, and most of the additional population is settling in unplanned settlements. The capacity of the steel plant is being expanded which will create further employment and even greater demand for serviced land and housing. In 1973, a Special Area Development Authority (SADA) was created to undertake planning and development as well as municipal functions. Although SADA has good land reserves, it and the M.P. Housing Board have fallen far short of meeting the needs for serviced land and for extended services to slum areas. C. Durg Durg is a district headquarter town located on National Highway No. 6 and a main railway only 23 km from Bhilai. It has grown rapidly since the construction of the Bhilai steel plant, both as a residential city and a site for ancillary industries. Its 1981 population was 118,000. Further expansion of the Bhilai steel plant is expected to increase demands for land and services in Durg. The Bhilai SADA is responsible for planning and development in Durg, but municipal functions are carried out by a local municipal corporation. D. Indore Indore is an important textile manufacturing and commercial center located centrally with good transport links on the fertile Malwa plateau. It is the largest city in Madhya Pradesh with a population of 827,000 in 1981 which expanded at a rate of 4.0% p.a. during the 1971-81  -40- ANNEX 1 period. The Indore Development Authority and the Madhya Pradesh Housing Board have undertaken a number of residential schemes, but these have been far short of meeting the need. This has led to overcrowding into 82 unserviced slum areas which have been only partly upgraded by the Municipal Corporation under the Minimum Needs Program. E. Ujjain Ujjain, located in the eastern Indore Region of the state, is one of the most important religious centers in the country. Its population (282,000 in 1981) registered a somewhat slower growth rate (3.04% p.a.) during the 1971-81 period than other cities of the region. Nevertheless, given its importance as an administrative and cultural center and its good transport links, it is expected to share in the region's urban growth. F. Dewas Dewas is a rapidly growing small town 35 km north of Indore on the Agra-Bombay Highway. There is a new industrial complex only four miles from the town. The population of Dewas has grown rapidly in recent years to a level of 83,000 in 1981. The large number of people who commute daily from Indore and Ujjain to work in Dewas indicates potential for further growth if urban services and housing were available. The Municipal Council has undertaken some slum improvement efforts, and the Madhya Pradesh Housing Board has built about 900 housing units.  -41- ANEX 2 Table 1: MDHYA PRADESH 133AN DEVELOPMET PROJECT DETAILED PROECT COSTS (MARCH 1983 PRICES) (RUPEES LAKHS) TOTAL TOTAL 83/84 LAND C. WORKS ON PLOT COM.FA. LOANS SUBTOT TOTAL LOCAL TAXES FOREISO LOCAL TAXES FOREIGN TOTAL DEV AREA DEVELOPMENT INDORE 150.94 269.54 124.54 18.20 38.29 601.50 601.50 499.25 30.08 72.18 74.89 4.51 10.83 90.23 UJJAIN 30.50 56.96 34.10 6.32 13.61 141.49 141.49 117.44 7.07 16.99 17.62 1.06 2.55 21.22 DEWAS 12.20 19.84 14.73 3.43 5.89 56.09 56.09 44.55 2.80 6.73 6.98 0.42 1.01 8.41 RAIPUR 58.4: 97.66 63.96 6.58 26.48 253.11 253.11 210.06 12.66 30.37 31.51 1.90 4.56 37.97 1H4LAI 45.59 105.59 72.59 3.43 27.06 254.26 254.26 211.04 12.71 30.51 31.66 1.91 4.58 38.14 DRBS 33.20 49.50 34.73 3.43 13.67 134.53 134.53 111.66 6.73 16.14 16.75 1.01 2.42 20.18 - - ---- ------ ------- ------ -- ---- - - - - - - ------ -- ------ -- - - - - ------ -- ------ -- ---- - - ---- - - BASE COST 330.86 599.09 344.65 41.39 124.99 1440.98 1440.98 1196.01 72.05 172.92 179.40 10.81 25.94 216.15 PHYS CONTINGENCY 0.00 59.91 34.47 4.14 0.00 99.51 98.51 81.77 4.93 11.82 12.26 0.74 1.77 14.78 D 8 & MANAGEMENT 6.62 79.06 45.49 5.46 2.50 139.15 139.15 115.50 6.96 16.70 17.32 1.04 2.50 20.87 PRICE CONTINGENCY 423.02 351.11 21.15 50.76 16.72 1.01 2.42 20.14 SUB TOTAL 337.48 738.08 424.61 50.9 127.49 1679.65 2101.67 1744.38 105.08 252.20 225.71 13.60 32.63 271.94 SLUM UPGRADINB INDORE 41.25 186.72 0.00 1.30 80.00 309.27 309.27 272.16 12.37 24.74 40.82 1.56 3.71 46.39 UJJAIN 7.70 25.22 0.00 0.40 10.81 44.13 44.13 38.83 1.77 3.53 5.83 0.26 0.53 6.62 DEWAS 6.00 14.24 0.00 0.40 6.10 26.74 26.74 23.53 1.07 2.14 3.53 0.16 0.32 4.01 RAIPUR 18.90 71.55 0.00 0.80 30.66 121.91 121.91 107.28 4.98 9.75 16.09 0.73 1.46 18.29 BHILAI 25.70 105.38 0.00 1.70 45.15 177.93 177.93 156.58 7.12 14.23 23.49 1.07 2.14 26.69 DURG 10.45 3S.52 0.00 0.00 14.36 58.33 56.33 51.33 2.33 4.67 7.70 0.35 0.70 8.75 BASE COST 110.00 436.63 0.00 4.60 187.08 738.31 738.31 649.71 29.53 59.06 97.46 4.43 8.86 110.75 PHYS CONTINGENCY 0.00 65.49 0.00 0.69 0.00 66.18 66.18 58.24 2.65 5.29 8.74 0.40 0.79 9.93 D S & MANAGEMENT 2.20 60.25 0.00 0.63 3.74 66.83 66.83 58.81 2.67 5.34 8.82 0.40 0.80 10.02 PRICE CONTINGENCY 209.12 184.02 8.36 16.73 9.20 0.42 0.84 10.46 SUB TOTAL 112.20 562.38 0.00 5.92 190.82 871.33 1080.44 950.79 43.22 86.42 124.22 5.65 11.29 141.15 SUB-PROJECTS IN MEDILIM TOWNS ____________________________ BASE COST .64.00 160.00 64.00 9.60 22.40 320.00 320.00 265.60 16.00 38.40 0.00 0.00 0.00 0.00 PHYS CONTINSENCY 0.00 16.00 6.40 0.96 0.00 23.36 23.36 19.39 1.17 2.80 0.00 0.00 0.00 0.00 O 8 & MANAGEMENT 1.28 21.12 9.45 1.27 0.45 32.56 32.56 27.03 1.63 3.91 0.00 0.00 0.00 0.00 PRICE CONTINGENCY 106.76 e8.61 5.34 12.81 0.00 0.00 0.00 0.00 SUB TOTAL 65.28 197.12 78.85 11.53 22.85 375.92 482.69 400.63 24.13 57.92 0.00 0.00 0.00 0.00 SANITATION & OFF-SITE INFRASTRUCTURE INDORE 0.00 0.00 0.00 0.00 10.00 10.00 10.00 8.30 0.50 1.20 0.83 0.05 0.12 1.00 UJJAIN 0.00 0.00 0.00 0.00 10.00 10.00 10.00 8.30 0.50 1.20 0.83 0.05 0.12 1.00 DEWAS 0.00 0.00 0.00 0.00 10.00 10.00 10.00 8.30 0.50 1.20 0.83 0.05 0.12 1.00 RAIPUR 0.00 0.00 0.00 0.00 15.00 15.00 15.00 12.45 0.75 1.80 1.25 0.08 0.18 1.50 BHILAI 0.00 51.50 0.00 0.00 10.00 61.50 61.50 51.05 3.08 7.38 5.10. 0.31 0.74 6.15 DURB 0.00 0.00 0.00 0.00 10.00 10.00 10.00 8.30 0.50 1.20 0.83 0.05 0.12 1.00 BASE COST 0.00 51.50 0.00 0.00 65.00 116.50 116.50 96.70 5.83 13.98 9.67 0.58 1.40 11.65 PHYS CONTINGENCY 0.00 5.15 0.00 0.00 0.00 5.15 5.15 4.27 0.26 0.62 0.43 0.03 0.06 0.52 D 9 & MANAGEMENT 0.00 6.80 0.00 0.00 1.30 8.10 8.10 6.72 0.40 0.97 0.67 0.04 0.10 0.81 PRICE CONTINGENCY 32.18 26.71 1.61 3.86 0.86 0.05 0.12 1.04 SUB TOTAL 0.00 63.45 0.00 0.00 66.30 129.75 161.93 134.40 8.10 19.43 11.63 0.70 1.68 14.01 ONJICIPAL MAINTENANCE & SOLID WASTE MANAGEMENT INDORE 0.00 0.00 0.00 0.00 0.00 140.00 140.00 99.00 21.00 21.00 14.70 3.15 3.15 21.00 UJJAIN 0.00 0.00 0.00 0.00 0.00 21.61 21.61 15.13 3.24 3.24 2.27 0.49 0.49 3.24 DEWAS 0.00 0.00 0.00 0.00 0.00 13.64 13.64 9.55 2.05 2.05 1.43 0.31 0.31 2.05 RAIPUR 0.00 0.00 0.00 0.00 0.00 110.00 110.00 77.00 16.50 16.50 11.55 2.48 2.48 16.50 BHILAI 0.00 0.00 0.00 0.00 0.00 19.11 19.11 13.38 2.87 2.87 2.01 0.43 0.43 2.87 DUBS 0.00 0.00 0.00 0.00 0.00 14.11 14.11 9.8B 2.12 2.12 1.48 0.32 0.32 2.t2 BASE COST 0.00 0.00 0.00 0.00 0.00 318.47 318.47 222.93 47.77 47.77 33.44 7.17 7.17 47.77 PHYS CONTINGENCY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 D S & MANAGEMENT 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PRICE CONTINGENCY 53.50 37.45 9.03 9.03 2.68 0.57 0.57 3.82 SUB TOTAL 0.00 0.00 0.00 0.00 0.00 318.47 371.97 260.39 55.80 55.B0 36.11 7.74 7.74 51.59 TOT. PHY9. WORK 514.96 1561.03 503.46 68.74 407.46 3374.11 4198.69 3490.58 236.33 471.77 397.67 27.68 53.35 478.70 TECHNICAL ASSISTANCE STATE & LOC. LVL 0.00 0.00 0.00 0.00 0.00 150.00 150.00 138.00 7.50 4.50 13.80 0.75 0.45 15.00 HUDCO 0.00 0.00 0.00 0.00 0.00 200.00 200.00 184.00 10.00 6.00 18.40 1.00 0.60 20.00 NATIONAL LEVEL 0.00 0.00 0.00 0.00 0.00 100.00 100.00 92.00 5.00 3.00 9.20 0.50 0.30 10.00 BASE COST 0.00 0.00 0.00 0.00 0.00 450.00 450.00 414.00 22.50 13.50 41.40 2.25 1.3S 45.00 PHYS CONTINGENCY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 S & MANAGEMENT 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PRICE CONTINGENCY 109.80 101.02 5.49 3.29 3.31 0.18 0.11 3.60 SUB TOTAL 0.00 0.00 0.00 0.00 0.00 450.00 559.80 515.02 27.99 16.79 44.71 2.43 1.46 48.60 GRAND TOTAL 514.96 1561.03 503.46 68.74 407.46 3824.11 4758.49 4005.60 264.32 48S.57 442.38 30.11 54.80 527.30 NOTE: GRAND TOTAL DOES NOT INCLUDE THE FRONT END FEE FOR THE BAMW LOAN  -42- Table 1:(Continuud) ANNEX 2 84/85 85/86 B6/S7 . E7/8s _- _- - _ _- - _ _ - - - - - -- - - - - ---- _ - -- -- - - --- -- ---__- __- __------ ---------------------------_ _ __ _ LOCAL TAXES FOREIGN TOTAL LOCAL TAXES FOREIBN TOTAL LOCAL TAXES FOREIGN TOTAL LOCAL TAXES FOREIGN TOTAL 99.95 6.02 14.44 120.30 99.95 6.02 14.44 120.30 124.91 7.52 18.05 150.38 99.95 6.02 14.44 120.30 23.49 1.41 3.40 28.30 23.49 1.41 3.40 28.30 29.36 1.77 4.24 35.37 23.49 1.41 3.40 28.30 9.31 0.56 1.35 11.22 9.31 0.56 1.35 11.22 11.64 0.70 1.69 14.02 9.31 0.56 1.35 11.22 42.02 2.53 6.07 50.62 42.02 2.53 6.07 50.62 52.52 3.16 7.59 63.29 42.02 2.53 6.07 50.62 42.21 2.54 6.10 50.95 42.21 2.54 6.10 50.95 52.76 3.18 7.63 63.57 42.21 2.54 6.10 50.95 22.33 1.35 3.23 26.91 22.33 1.35 3.23 26.91 27.91 1.68 4.04 33.63 22.33 1.35 3.23 26.91 -- - - - - ------__ _ _ ----_ - _ _ ------ ------ -- -- _ _ - _---- ----- ------ ------ ------ ------ ------ ------ ------ 239.20 14.41 34.5s 289.20 239.20 14.41 34.58 2B8.20 299.00 18.01 43.23 360.25 239.20 14.41 34.58 289.20 16.35 0.99 2.36 19.70 16.35 0.99 2.36 19.70 20.44 1.23 2.96 24.63 16.35 0.99 2.36 19.70 23.10 1.39 3.34 27.83 23.10 1.39 3.34 27.93 28.97 1.74 4.17 34.79 23.10 1.39 3.34 27.93 44.58 2.69 6.45 53.72 66.99 4.03 9.67 9o.5s 111.46 6.71 16.12 134.29 111.46 6.71 16.12 134.29 323.24 19.47 46.73 389.45 345.53 20.82 49.96 416.30 459.78 27.70 66.47 553.95 390.12 23.50 56.40 470.02 54.43 2.47 4.95 61.95 81.65 3.71 7.42 92.78 54.43 2.47 4.95 61.a5 40.82 1.96 3.71 46.39 7.77 0.35 0.71 9.s3 11.65 0.53 1.06 13.24 7.-77 0.35 0.71 B.93 5.83 0.26 0.53 6.62 4.71 0.21 0.43 5.35 7.06 0.32 0.64 8.02 4.71 0.21 0.43 5.35 3.53 0.16 0.32 4.01 21.46 0.99 1.95 24.39 32.19 1.46 2.93 36.57 21.46 0.98 1.95 24.39 16.09 0.73 1.46 18.29 31.32 1.42 2.85 35.59 46.97 2.14 4.27 53.39 31.32 1.42 2.95 35.59 23.49 1.07 2.14 26.69 10.27 0.47 0.93 11.67 15.40 0.70 1.40 17.50 10.27 0.47 0.93 11.67 7.70 0.35 0.70 9.75 129.94 5.91 11.81 147.66 194.91 8.86 17.72 221.49 129.94 5.91 11.91 147.66 97.46 4.43 8.86 110.75 11.65 0.53 1.06 13.24 17.47 0.79 1.59 19.96 11.65 0.53 1.06 13.24 9.74 0.40 0.79 9.93 11.76 0.53 1.07 13.37 17.64 0.90 1.60 20.05 11.76 0.53 1.06 13.37 5.92 0.40 0.80 10.02 24.54 1.12 2.23 27.85 55.21 2.51 5.62 62.74 49.07 2.23 4.46 55.76 46.01 2.09 4.19 52.28 177.89 8.09 16.17 202.15 289.24 12.97 25.93 324.13 202.43 9.20 19.39 230.03 161.02 7.32 14.64 182.99 39.84 2.40 5.76 48.00 92.96 5.60 13.44 112.00 79.69 4.50 11.52 96.00 53.12 3.20 7.65 64.00 2.91 0.15 0.42 3.50 6.79 0.41 0.98 8.19 5.92 0.35 0.54 7.01 3.99 0.23 0.56 4.67 4.05 0.24 0.59 4.BS 9.46 0.57 1.37 11.40 8.11 0.49 1.17 9.77 5.41 0.33 0.75 6.51 7.49 0.45 1.0o 9.02 26.21 1.58 3.79 31.58 29.95 1.80 4.33 36.09 24.96 1.50 3.61 30.07 54.29 3.27 7.85 65.41 135.42 8.16 19.58 163.15 123.56 7.44 17.96 145.97 97.36 5.26 12.63 105.26 1.66 0.10 0.24 2.00 2.49 0.15 0.36 3.00 2.49 0.15 0.36 3.00 0.B5 0.05 0.12 1.00 1.66 0.10 0.24 2.00 2.49 0.15 0.36 3.00 2.49 0.15 0.36 3.00 0.93 0.05 0.12 1.00 1.66 0.10 0.24 2.00 2.49 0.15 0.36 3.00 2.49 0.15 0.36 3.00 0.93 0.05 0.12 1.00 2.49 0.15 0.36 3.00 3.74 0.23 0.54 4.50 3.74 0.23 0.54 4.50 1.25 0.08 0.18 1.50 10.21 0.62 1.48 12.30 15.31 0.92 2.21 19.45 15.31 0.92 2.21 19.45 5.10 0.31 0.74 6.15 1.66 0.10 0.24 2.00 2.49 0.15 0.36 3.00 2.49 0.15 0.36 3.00 0.93 0.05 0.12 1.00 ==- - -- - ----- ----- _---- ----- ----- ----- _---- ----- ----- ----- ----- ----- ----- - _--- 19.34 1.17 2.80 23.30 29.01 1.75 4.19 34.95 29.01 1.75 4.19 34.95 9.67 0.58 1.40 11.65 0.95 0.05 0.12 1.03 1.28 0.08 0.19 1.55 1.28 0.08 0.19 1.55 0.43 0.03 0.06 0.52 1.34 0.09 0.19 1.62 2.02 0.12 0.29 2.43 2.02 0.12 0.29 2.43 0.67 0.04 0.10 0.51 3.45 0.21 0.50 4.15 7.75 0.47 1.12 9.34 10.34 0.62 1.49 12.46 4.31 0.26 0.62 5.19 24.98 1.51 3.61 30.10 40.06 2.41 5.79 45.27 42.65 2.57 6.17 51.35 15.09 0.91 2.18 18.16 58.80 12.60 12.60 94.00 24.50 5.25 5.25 35.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 9.08 1.94 1.94 12.97 3.7B 0.81 0.81 5.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.73 1.23 1.23 8.18 2.39 0.51 0.51 3.41 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 46.20 9.90 9.90 66.00 19.25 4.13 4.13 27.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.03 1.72 1.72 11.47 3.34 0.72 0.72 4.78 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.93 1.27 1.27 8.47 2.47 0.53 0.53 3.53 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 133.76 28.66 28.66 191.09 55.73 11.94 11.94 79.62 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 21.40 4.59 4.59 30.57 13.39 2.87 2.87 19.11 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 155.16 33.25 33.25 221.66 69.11 14.91 14.91 98.73 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 735.56 65.58 107.62 909.76 875.35 59.16 116.07 1050.58 829.41 46.91 108.99 984.23 653.59 36.99 95.95 776.42 34.50 1.88 1.13 37.50 41.40 2.25 1.35 45.00 27.60 1.50 0.90 30.00 20.70 1.13 0.69 22.50 46.00 2.50 1.50 50.00 55.20 3.00 1.80 60.00 36.BO 2.00 1.20 40.00 27.60 1.50 0.90 30.00 23.00 1.25 0.75 25.00 27.60 1.50 0.90 30.00 18.40 1.00 0.60 20.00 13.90 0.75 0.45 15.00 103.50 5.63 3.38 112.50 124.20 6.75 4.05 135.00 S2.80 4.50 2.70 90.00 62.10 3.38 2.03 67.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 16.56 0.90 0.54 18.00 29.81 1.62 0.97 32.40 26.50 1.44 0.86 29.80 24.84 1.35 o0e. 27.00 120.06 6.53 3.92 130.50 154.01 9.37 5.02 167.40 109.30 5.94 3.56 118.80 96.94 4.73 2.84 94.50 855.62 72.11 111.53 1039.26 1029.36 67.53 121.09 1217.98 937.71 52.95 112.46 1103.03 740.52 41.72 98.69 870.92 _ _ _ _ ____ _. .............. ............._......_....... .............. ............._  ANNEX 2 Table 2: MADHYA PRADESH URBAN DEVELOPMENT PROJECT DETAILED PROJECT COSTS BY CITY (MARCH 19e3 PRICES,RUPEES LAKWS) INDORE UJJAIN DEWAS RAIPUR 5HILAI SHILAI DURS MEDIUL rOTAL AREA DEVELOPMENT (MPHB) (SADA) TOWNS __________________ LAND 150.94 30.50 12.20 5s.43 9.00 3..59 33.20 64.00 394.86 CIVIL WORKS 269.54 56.96 19.84 97.66 43.18 62.41 49.50 160.00 759.09 CONNECTIONS 9.04 2.02 0.88 3.88 1.75 2.63 2.05 0.00 22.25 ON-PLOT DEVELOPMENT 115.50 32.06 13.85 60.08 28.26 39.95 32.68 64.00 386.40 COWIRSITY FACILITIES 18.20 6.32 3.43 6.58 1.73 1.70 3.43 9.60 50.99 BUILDING LOANS 38.28 13.61 5.89 26.48 11.52 15.54 13.67 22.40 147.39 BASE COST 601.50 141.49 56.09 253.11 95.44 158.82 134.53 320.00 1760.98 PHYS CONTINGENCY 41.23 9.74 3.80 16.82 7.49 10.67 8.77 23.36 121.87 D S & MANAGEMENT 58.21 13.74 5.38 23.90 10.30 15.13 12.51 32.56 171.72 PRICE CONTINGENCY 176.64 41.57 16.45 74.05 2e.53 48.52 39.26 106.77 529.79 SUIB-TOTAL 877.57 206.54 81.72 367.88 141.77 231.14 195.07 482.69 2584.36 SLUM UP6RA1INS ______________ LAND 41.25 7.70 6.00 18.90 0.00 25.70 10.45 0.00 110.00 CIVIL WORKS 186.72 25.22 14.24 71.55 0.00 105.38 33.52 0.00 436.63 COWPI"ITY FACILITIES 1.30 0.40 0.40 0.80 0.00 1.70 0.00 0.00 4.60 BUILDING LOANS 80.00 0o.e8 6.10 30.66 0.00 45.15 14.36 0.00 197.06 BASE COST 309.27 44.13 26.74 121.91 0.00 177.93 58.33 0.00 738.31 PHYS CONTINGENCY 28.20 3.84 2.20 tO.85 0.00 16.06 5.03 0.00 66.18 O S & MANAGEMENT 28.37 3.91 2.26 10.98 0.00 16.19 5.12 0.00 66.83 PRICE CONTINGENCY 87.80 12.45 7.49 34.50 0.00 50.44 16.43 0.00 209.11 SUB-TOTAL 453.64 64.33 38.69 178.23 0.00 260.63 84.9I 0.00 1080.43 SANITATION & OFF-SITE INFRASTRULCTURE CIVIL WORKS 0.00 0.00 0.00 0.00 0.00 51.50 0.00 0.00 51.50 LATRINE LOANS 10.00 10.00 10.00 15.00 0.00 10.00 10.00 0.00 65.00 BASE COST 10.00 10.00 10.00 15.00 0.00 61.50 10.00 0.00 116.50 PHYS CONTINBENCY 0.00 0.00 0.00 0.00 0.00 5.15 0.00 0.00 5.15 o 5 & MA4AGEMENT 0.20 0.20 0.20 0.30 0.00 7.00 0.20 0.00 8.10 PRICE CONTINGENCY 2.53 2.53 2.53 3.79 0.00 18.27 2.53 0.00 32.18 SUIB-TOTAL 12.73 12.73 12.73 19.09 0.00 91.91 12.73 0.00 161.93 MUN IC IPAL MAINTENANCE & SOL ID WASTE MANAGEMENT MAINT EQUIPMENT 70.00 8.21 6.73 50.00 0.00 9.97 6.47 0.00 151.38 S W n EQUIPMENT 70.00 13.40 6.91 60.00 0.00 9.14 7.64 0.00 167.09 BASE COST 140.00 21.61 13.64 110.00 0.00 19.11 14.11 0.00 318.47 PRICE CONTINGENCY 23.52 3.63 2.29 18.48 0.00 3.21 2.37 0.00 53.50 SUB-TOTAL 163.52 25.24 15.93 128.48 0.00 22.32 16.48 0.00 371.97 GRAND TOTAL 1507.46 308.83 149.06 693.68 141.77 606.00 309.19 482.69 419e.69 -s:a1 _S_-- ' s_ _ - --------- - =n__n -----_ Note: Brand total does not include the front end fee for the Bank loan.  ANNEX 2 Table 3: AREA DEVELOPMENT: SUMMARY OF LAND USE (PERCENTAGES) Indore Ujjain Dewas Raipur Bhilai Durg A. Marketable Land (to which costs are allocated) Residential 58.02 56.02 49.01 56.21 50.72 52.05 Educational ) .7 6.60 11.01 6.90 ) 8.16 7.31 Community Facilities ) 3 1.12 3.11 1.26 )3.80 Commercial 3.65 2.45 2.49 3.04 3.10 3.76 Subtotal 68.40 66.19 65.62 67.41 61.98 66.92 B. Non-marketable Parks and Open Spaces 8.45 6.71 7.07 9.27 11.21 10.76 Circulation 23.15 27.10 27.31 23.32 26.80 22.32 Subtotal 31.60 33.81 34.38 32.59 38.01 33.08 TOTAL 100.00 100.00 100.00 100.00 100.00 100.00  -45- ANNEX 2 Table 4; AREA DEVELOPMENT; PLOT DISTRIBUTION AND COMMUNITY FACILITIES Indore Ujjain Dewas Raipur Bhilai Durg Total Total Plots 6,543 1,838 795 3,527 3,975 1,866 18,544 Plot Distribution EWS 1 2,131 592 255 1,109 1,259 603 5,949 EWS 2 1,278 355 153 665 755 362 3,568 EWS 3 853 237 103 443 503 241 2,380 LIG 1,095 496 215 993 933 493 4,225 MIG 891 116 48 254 278 115 1,702 HIG 295 42 21 63 247 52 720 Primary Schools 3 1 1 2 1 1 9 Health Centers 2 0 0 0 0 0 2 Post Offices 2 1 1 0 1 1 6 Community Centers 1 0 0 0 0 0 1  -46- ANNEX 2 Table 5: MUNICIPAL MAINTENANCE AND SOLID WASTE MANAGEMENT DETAILED COSTS (MARCH 1983 PRICES) (Rupees Lakhs) Indore Ujjain Dewas Raipur Bhilai Durg A. Municipal Maintenance Road Rollers 5.00 2.50 2.50 2.50 Trucks/Tractor Trailer 4.00 2.00 4.00 2.00 Tar Mixers 2.00 1.00 2.00 1.00 Bitumen Boilers 1.60 0.16 0.32 0.32 Bitumen Sprayers 0.80 0.08 0.32 0.16 Mini Tar Boilers 0.32 0.31 Mini Tar Mixers 0.20 0.20 Compressors 0.50 Concrete Mixers 0.65 0.65 Sub-Total 70.00* 13.40 6.91 60.00* 9.14 7.64 B. Solid Waste Management Vehicles 6.00 6.00 6.00 4.00 Handcarts 1.62 0.34 0.97 0.80 Containers 0.59 0.39 _ 3.00 1.67 Sub-Total 70.00* 8.21 6.73 50.00* 9.97 6.47 Total Base Cost 140.00 21.61 13.64 110.00 19.11 14.11 *Lump sum amounts allocated awaiting outcome of consultant study.  -47- ANNEX 2 Table 6: DETAILS OF TECHNICAL ASSISTANCE (March 1983 Prices, Rs Lakhs) Cost Estimate A. State and Local Level 1. Institutional strengthening and resource mobilization studies and support (MPHB, Local Governments, Development Authorities, (MPSCIB) - Studies already contracted 12.4 - Provision for sustained support 7.6 2. Maintenance and solid waste studies and support (Department of Local Government) - Studies already contracted 3.2 - Studies to be contracted, including sustained support 6.8 3. Technical Reinforcement for TCPO and MPHB (a) Surveys and photography 8 (b) Mapping 10 (c) Equipment for analysis of data 4 (d) Research and evaluation studies 4 4. Assessment of Constraints to. Urban Development and Preparation of Strategy for Urban Policy and Management (Agency to be designated by GOMP) 12 5. Training (a) Policy seminars for senior government officers and elected officials 15 (b) Training in management and finance for personnel of MPHB, local governments, development authorities and MPSCIB 15 (c) Technical training in planning, budgeting, project prepara- tion and project implementation for personnel of TCPO, MPHB, development authorities, local governments and MPSCIB 18 (d) Training for community development workers to assist with low income settlement programs 8 (e) Training of support staff in municipalities, development authorities and other major operating agencies 16 (f) Training in the development and management of appropriate data bases for policy making, planning and management of urban development 10 B. HUDCO Level 1. Intensive Assistance by HUDCO to Borrowers (a) Proiect formulation/evaluation (b) Management finance/accounts ( 62 (c) Conversion to computer based systems 2. Preparation/Dissemination of Technical Information (publications/documentaries) 16.5 3. Telex, Xerox, Microfilm, and Projection Equipment ( 10.5 4. Analysis/Research Studies (a) Analysis of HUDCO systems 22 (HUDCO project review and appraisal process, HUDCO supervision process, HUDCO project evaluation, HUDCO finance and accounting) (b) Analysis of HUDCO activities 26.5 (sites and services experience to date, market survey methodologies, building materials production, possi- bilities of new HUDCO activities, community preparation) (c) Design of new/improved planning methodologies 23.5 (d) Preparation of urban sector and strategy studies 3 5. Training for HUDCO and Agency Staff 36  -48- ANNEX 2 Table 6: (Continued) Cost Estimate C. Central Level 1. Training for Senior MOWH and Agency Staff 8 2. Integrated Training Assessment and Program Formulation (a) Identification of training needs and resources ( ( 18 (b) Defining a training system ( (c) Establishment of appropriate curricula ( ( 42 (d) Strengthening of identified training institutions ( (e) Funding of initial courses under system ( 3. MOWH (a) Improving project monitoring ( ( 5 (b) Improving program monitoring ( 4. TCPO (a) Evaluation of project appraisal and ( ( 4 (b) Monitoring systems ( 5. NBO (a) Assess priority areas for research ( (b) Develop a more practical orientation to low- ( 8 cost housing (e.g., prototypes and training ( in projects) ( (c) Assess monitoring techniques ( 6. NIUA (a) Assess priority areas for research ( (b) Evaluations of completed projects ( 15 (c) Specific research studies (  mDA MADIWA PRADISH URBAN DE^,IEI. POJECT Row of Funds rIneomorrl Sank l, SRoncstrucnon & D-owent _ (Lending in uss minion) aNItA)~ SADAA . Gonsmmnt d Indlh (On- endIng In Rs Croh7s Me | ~~~HUDCO HD0 MOIYH T T1 - $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1.24 I _ ,~~~~~~~~~~~~~~nt - _,,d107 7 7398 083~~~~~~~~~~~~~~~~03a 2u , 173 84337 H.fhold. Ld 2390 18 82 03 CDas So2nei`ol & L-n3 S&oul Bis.ses on Sluol n Ch3ge .nWnS Fcilitse USilnty 2)9MY Charge8 Ch.rgnn 'P51-alf nflos9,r d& 2om rn 'Y 320900s f 0,050t -,c 8ncOoi C-doalla,s. M0 19 MP5 0IB IPD   50- ANNEX 2 Chart 2 INDIA MADHYA PRADESH URBAN DEVELOPMENT PROJECT Project Implementation Schedule Chart 2 I1983 1984 1985 1986 1987 1988 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 33 4 1 2 3 4 4. AREA DEVELOPMENT _ _ Land Acquisition - - _ - _ Detailed Design