India - Second Calcutta Urban Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 6970 THE WORLD BANK PROJECT COMPLETION REPORT INDIA SECOND CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 756-IN) September 30, 1987 Population, Human Resources, Urban and Water Operations Division Asia Country Department IV Tins document has a restricted distribution and may be used by recipients only in the perfonrance of their official duties. Its contents may not otherwise be disclosed without World Bank authorizaion.  THI WORLD SANK FOR OFFCIL USE ONLY Washiglton. DC 204 3 U.S A Olke o Dowim Gw Ohwateft twahaote September 30, 1987 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on India Second Calcutta Urban Development Project (Credit 756-IN) Attached, for information, is a copy of a report entitled "Project Completion Report on India Second Calcutta Urban Development Project (Credit 756-IN) prepared by the Asia Regional Office. Further evaluation of this project by the Operations Evaluation Department has not been made. 2 Attachment Thil daunwnt haa mitsd dbiabution o may be umdby mipifWnu o* in d pefonsu"* of deit ofk dudo.1 It otents mxynot sth"inbediclose witul WWdgEnk ootbodnnea.  COU TRY EXCHANGE RATES Nam of Currency (Abbreviation): Rupees (Re) Years SEchange Rate: Appraisal Year Average US$1 - Rs 8.66 Interveing Years Average US$1 - Re 8.79 Completion Year Average US$1 - Rs 11.58  CURRENCY EQUIVALENTS Currency Unit = Rupee (Rs) US$1.00 = Rs 8.6 (at appraisal, November 1977) US$1.00 Rs 9.75 (at credit closing, August 1984) Rs 1 lakh Rs 100,000 Rs 1 crore = Rs 10,000,000 MEASURES AND EQUIVALENTS 1 millimeter (mm) 0.39 inches (in) 1 meter (m) c 39.37 inches (in) or 3.28 ft 1 square meter (m ) = 10.8 square feet (sq ft) 1 cubic meter (m ) = 35.3 cubic feet (cu ft) 1 kilometer (km ) 0.62 miles (mi) 1 square kilometer (km ) 0.386 square miles (sq mi) 1 hectare (ha) = 2.47 acres (ac) or 10,000 square meters 1 liter (1) = 1.057 quarts liquid or 0.26 US gallon (gal) or 0.908 quart dry (qt) 1 liter per capita per day (lcd) = 0.26 US gallons per capita per day 1 cubic meter per second (m /sec) = 86.4 million liters per day or 22 million US gallons per day 1 million litet-s per day (mld) = 0.01 cubic meters per second 1 million liters per hour (ml/hr) = 0.24 cubic meters per second ABBREVIATIONS AND ACRONYMS BIP Bustee Improvement Program BDP Basic Development Plan for the Calcutta Metropolitan District (1966-86) CC Calcutta Corporation CIT Calcutta Improvement Trust CMC Calcutta Metropolitan Corporation CMD Calcutta Metropolitan Corporation CMDA Calcutta Metropolitan Development Authority CMWSA Calcutta Metropolitan Water and Sanitation Authority CSSI Government of West Bengal - Directorate of Cottage and Small-Scale Industries DMS Department of Municipal Services GOI Government of India GOWB Government of West Bengal HIT Howrah Improvement Trust I and W Government of West Bengal - Irrigation and Waterways Directorate SSE Small-scale enterprises WBHB West Bengal Housing Board WBSIC West Bengal Small Industries Corporation FISCAL YEAR April 1 - March 31  FOR OMCIL USX ONLY INDIA SECOND CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 756-IN) PROJECT COMPLETION REPORT TABLE OF CONTENTS Page No. BASIC DATA SHEET .o.e..........o........e......,...., i HICHLICHTS ......................... ,i L I. INTRODUCTION ................................ .. .. . 1 II. THE SETTING .................. 1 III. THE PROJECT .................. ........................ 3 A* Program .......... , 3 B. Management Reform .0..... ....... ........ .... 4 C. Local Government Reform ......................... 4 D. Project Design ...... * &*.............................. 5 IV. PROJECT IMPLEMENTATION ...., ......................,.. 6 V. FINANCIAL PERFORMANCE ..... .......... 7 A. Project Cost ........................................... 7 B. Financial Impact .................................. 8 C. Other Matters .................................... 8 VI. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT ............. 8 VII. PROGRAM RESULTS ....... .......... .. 0 9 VIIl. BANK PERFORMANCE .................. ............ ....... 11 A. Project Design .*. *........................................ 11 B. Supervision ........., 11 IX. EALAT.Institutional Sup ..........t..................... 11 X. CONCLUSIONS.. ................ .......... *. 14 This document has a restricted distribution and may be used by reipients only in the performpn,* of their official duties. Its contents may not otherwi be disbcloed without World Bank authoriktion.  Tablek d C-of t ('ont.) Annexes Pge .No. Annex I Description of the Projecte.........000... ...0 16 Annex TI Five Year Investment Plans and CUDP Components. 19 Annex III Covenants Dealing with Local Government.e.,.. 20 Anex IV Actual and Expected Physical Completion.*0..... 24 Annex V Statement of Outstanding Projects.............. 33 Annex VI Sunaryof Status of Compliance with Covenants. 34 Annex VII Sumary Cost Estimates for Components of CUDP II 39 Annex VIII Actual and Appraisal Estimates of Costt..,...,, 40 Annex IX Cash Flow During Implesentation Period********* 46 Annes X Schedule of Disbursementso......,.............. 47 Annex XI Project Completion Report (Cr.756-IN), prepared by Calcutta Metropolitan Development Authority. Annex XII Comments from Borrower ....,...........,....... 80  INDIA (CREDIT 756-1N) SECOND CALCUTTA URBAN DEVELOPMENT PROJECT PROZi^,CT COMrLETION REPORT PREFACE This report presents the results of a pe'formance review of the Second Calcutta Urban Development Project (CUDP tI) for which Credit 756-IN of US$87 million was made to the Government of India (G1I) in January 1978. The credit became effective in April 1978 and was closed in August 1984* The principal implementing agency was the Calcutta Metropolitan Development Authority (CMDA). The report consists of two parts: the main report which sumtarizes the overall experience, and a more detailed completion report prepared by the CMDA which appears as Annex XI. The main report was prepared by the Urban and Water Supply Division of the South Asia Pro3ects Departmnt with the assistance of a consultant. It is based on a review of project documents, Bank files and CMDA's completion report. Following standard proceduirs ORD sent copies of the draft report to the Borrower for its comts. The camets which were receved have be taken into account in preparing the final report and they ae reproduced a Anne XII,  ii INDIA SECOND CALCUTTA URBAN DRVELOPMENT PROJECT (CREDIT 756-IN) PROJECT COMPLETION REPORT BASIC DATA SHEET KEY PROJECT DATA Appraisal Actual Estimate Cost Total Project Cost (US$ million) 183.71 164.4 Overrun (%) Total Amount of Credit (US$ million) 87 87 Completion of Physical Components 3-31-82 8-8-84 1/ Time Overrun (X) - 62.5 Financial Performance Poor Institutional Performance Fair Economic Rate of Return 20X 2/ See section Ix OTHER PROJECT DATA Original Actual First Mention in Files 3-21-75 Appraisal 11-28-76 Negotiation 10-11-77 Board Approval 12-13-77 Credit Agreement Date 1- 6-78 Effective Date 4- 7-78 Closing Date 3-31-83 8- 8-84 1/ Borrower Covernment of India Executing Agency Calcutta Metropolitan Development Authority (CMDA) Follow-on Project Calcutta Urban Dev. III Credit Number 1369-IND Amount (US$ million) 147 Credit Agreement Date 6-8-83 11 Final Disbursement 2/ Estimated weighted average, calculated on area development, bustee (slum) improvement, water supply, solid waste management, roads and traffic improvements, which account for about 60% of total project cost.  iii Cumulative Disbursements FY78 FY79 FY80 FY81 FY82 FY83 FY84 FY8S Appraisal Estimate 8 25 45 65 83 85 87 87 Actual 4.6 18.7 43.3 67.9 74 79.3 86.4 87 MISSION DATA No. of Staff Date Staff DaYS Days Identification Preparation Appraisal 7/76 7 13 91 Appraisal 10/76 2 7 14 Appraisal 11/76 8 20 160 Appraisal 2/77 3 14 42 Appraisal 3/77 1 4 4 Appraisal 8/77 1 3 3 Post Negotiation 12/77 4 18 72 386 Supervision 1 3/78 5 11 5S Supervision 2 10/78 10 25 250 Supervision 3 2/79 3 16 48 Supervision 4 7/79 7 16 112 Supervision 4a 10/79 1 18 18 Supervision 5 2/80 4 19 76 Supervision 5a 3/80 1 14 14 Supervision 6 9/80 6 14 84 Supervision 6a 12/80 1 5 5 Supervision 7 2/81 4 12 48 Supervision 8 9/81 7 13 91 Supervision 9 3/82 4 7 28 Supervision 10 2/83 5 16 80 Supervision 11 11/83 7 12 84 Supervision 12 5/84 6 3 18 Supervision 13 12/84 6 2 12 Total Staff Days 1,023  PROJECT COMPLETION REPORT INDIA SECOND CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 756-IN) HIGHLIGHTS i. The Calcutta Metropolitan Development Authority (CMDA) was estab- lished in 1970 to plan, oversee and finance efforts to halt and reverse Calcutta's urban decay. IDA developed the first Calcutta Urban Development Project (CUDP I) in 1972 to support CMDA and its program. A US$35 million credit was made in 1973. During the course of CUDP l, CMDA was transformed from being a planning, financing, and-coordinating agency, to one which became extensively involved in implementing projects in a variety of sectors. In addition, CUDP I laid the groundwork for reforms in state and municipal government necessary to sustain programs for improving facilities and serv- ices. Disbursements under CUDP I were completed in 1979, some 3 years later than originally expected (paras 2.02 and 2.03). (See Project Performance Audit Report and Project Completion Report dated June 11, 1982). ii. The second Calcutta Urban Development Project (CUDP II) was prepared by CMDA, the Government of West Bengal (cOWB), and the Bank in 1976-77. A credit of US$87 million was made in 1978. The project was large, ambitious, and complex. It included financing for 54 sub-projects in 11 different sectors, technical assistance for strengthening CMDA's management practices and procedures, and support for a major program of municipal reform (paras 3.01, 3.02 and 3.03). Mii. After several adjustments to program content and costs, disbursements were completed in 1984, about 2 years later than originally expected. Not all project elements were completed. Some were time-slices of on-going programs that continue to receive IDA support in the Third Calcutta Urban Development Project (CUDP III) (paras 4.01 and 4.05). iv. The following highlights of the project are of special interest: Institutional Performance - Strengthening of CMDA (par& 6.01); Policy Reforms - reforms to local government were extensive, e.g. legislative changes, creation of a Central Valuation Board, reorganization of a government department and introduction of formal training programs (para 15); Poverty Alleviation - The project gave increased attention to helping the economically weaker sections through the extension of the bustee improvement program and the addition of a basic plan for improving conditions in the fringe areas of the Calcutta Metropolitan District (CMD) (para 3.07);  Flexibility in New Programs new or innovative programs require flexibility in implementation, requiring adjustments to fit local circumstances. This was the case with sites and services and urban redevelopment (paras 3.08, 7.02(a)v and 7.02(e)); Staffing and Management -in general, the project proved to be difficult to execute. The Bank made available extensive resources for supervision. However, CMDA's management and implementation capacity was stretched severely and some of the more complex components required skills and knowledge beyond the experience of CMDA's staff. Recruitment of new staff was curtailed by legal problems, and the use of consultants to augment staff did not prove completely satisfactory. CMDA operated for much of the implementation period with a shortage of qualified staff in some key areas (paras 4.03, and 4.07); Environmental Improvements the results of the project are difficult to quantify in all areas. However, it is clear that the supply of potable water was increased, drainage was improved, the environmental conditions of a large number of bustee dwellings was improved, and there has been a lessening of the incidence of water borne diseases. In addition, a basis was established for an improved approach for the follow-on project, CUDP III, through mobilizing local support and participation (e.g. anchal (fringe area) development program) (paras 7.01, and 10.06); Community Participation mobilizing local support and participation can lead to improved performance. This was the experience with one component, the municipal and anchal development program (para -;.Q1); Investment Planning and Coordination planning the construction and/or expansion of large interconnected systems so that benefits are added in pace with construction, may not evolve easily from conventional public works practice. In the experience of CUDP I and CUDP II, iniestments were made in parts of systems (water supply, sewerage, and drainage) long before the sup- plemental investments were in place to provide service to the ultimate consumer. The economical planning of investments deserved more attention than it received urder CUDP II (paras 7.02(a), 7.03 and 7.04). During CUDP II CMDA changed to emphasize planning and coordination and shifted some of the responsibility of planning, implementation and operation to other agencies (para 8.03); and  -vi- Maintenance in soae areas, the results were jeopardized by the failure to main- tain the facilities constructed. Raising funds to perform the neces- iary maintenance remains the major obstacle to the improvement of the Calcutta environment. MdOntenance is more difficult to support than new investments, and the effectiveness of the investments depend on it (paras 5.03 and 10.03).  -1- INDIA SECOND CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 756-IN) PROJECT COMPLETION REPORT I. INTRODUCTION 1.01 The Bank first became actively involved in Calcutta's development in 1973 when it made a loan of US$35 million (CUDP I, Credit 427-IN) to support the Calcutta i4etropolitan Development Authority (CMDA) and its program of urban reconstruction and development. 1/ CMDA was newly established at that time and had quickly become the focus of efforts to deal with the problems of the city's physical decay. The Bank had only recently begun to lend for "urban development" and CUDP I was one of its earliest efforts in the field and, as a consequence of CMDA's mandate, the Bank's first to take a metropolitan-wide approach, rather than a sub-sector approach. It was a modest operation in relation to the task out important because of the prompt support) it provided prompt support to the new CMDA, and it became the first of a series. The Bank followed up with a second loan of US$87 million in 1978 (CUDP II, Credit 756-IN) for a larger and more ambitious project. This was followed by a third, still larger project in 1983 (CUDP III, Credit 1369-IN, US$147 million), currently under implementation. This report deals with the second of this series. II. THE SETTING 2.01 Ever since the inflow of refugees following the partition of India in 1947, the Calcutta metropolitan area has been overcroi6ed, underserviced, and economicatly depressed. World concern about the conditions of the city were raised by a cholera epidemic in 1958 and, in response, WHO/UNDP produced in 1966 a "Master Plan for Water Supply, Sewerage and Drainage - Calcutta Metropolitan District, 1966-2001". Concurrently, the Calcutta Metropolitan Planning Organization, established in 1960 and strongly supported by the Ford Foundation, produced studies of other urban sub-sectors, and of local administration. These studies, together with the WHO Master Plan, were brought together as a "Basic Development Plan for the Calcutta Metropolitan District 1966-86" 'BDP). 2.02 Litt,e was done to implement the BDP until 1970 when CMDA was estab- lished with GOI assistance as a coordinating and financing agency for implementing an area-wide program of rehabilitation and development, guided by the BDP. CMDA was provided with a Rs 160 crore four year budget towards implementing the BDP. From among the sub-projects being implemented by CMDA 1/ Project Performance Audit Report (PPAR) #4023 OED June 30, 1982.  -2- the Bank identified a project in 1972, and a credit of US$35 million was made in 1973 (CUDP I). 2.03 CUDP I assisted in the transformation of CMDA from a financing organization into an implementing agency. It supported the formulation of a plan for improving the financial performance of agencies and municipalities of the Calcutta Metropolitan District (CMD), and measures to strengthen the management of t.ie CMDA. Its project content was selected from CMDA's exist- ing program. It was, in fact, a loan to support an institution and a program, tied to project elements of that program. CUDP I was prepared quickly at a critical time in CMDA's development. The Bank saw the timing of its assistance to be particularly important in this case.l/ CUDP I took six years to disburse instead of the three years estimated at the time of appraisal. The necessary changes in CMDA's organization as it expanded its functions, proved more difficult than anticipated. Progress toward financial reform was slow, material shortages developed, and GOI funds for the CMDA program were less than anticipated. The experience disclosed deficiencies in in-house planning and project preparation. 2.04 Discussions on a second project began soon after CUDP I got underway. In 1975, CMDA proposed to focus on three sectors, water supply, sewerage/drainage and urban transport. No action was taken, however, pending further progress with CUDP I. The following year, CMDA prepared a new 4-year investment plan and development perspective which proposed a shift in development strategy for metropolitan growth from the bi-polar structure suggested in the BDP, to a polycentric one, with implications for the pattern of investment in basic infrastructure. [CMDA Completion Report (Annex XI) paragraph 2.2]. 2.05 In discusgions with CMDA in 1976, the Bank included, among the steps necessary for appraisal, the revision of CMDA's investment program to provide for a "higher social content". This meant a shift from a heavy emphasis on public works to greater emphasis on bustee (slum) improvement, and on area development for low income groups, including sites and services with social support programs. 2/ CMDA's rethinking of its development strategy, and the 1/ Earlier the Bank had sought involvement in the water supply and sewerage/drainage sectors, but the Calcutta Metropolitan Water and Sanitation Authority (CMWSA), set up in 1966 to operate and maintain systems on a metropolitan wide basis, never became operative. The establishment of CMDA, actively seeking outside assistance, provided an opportunity for the Bank to become active in Calcutta. 2/ CUDP I had included a "prototype large scale, self financing sites and service project" (Baishnabghata-Patuli k.rea Development). It had made little progress because of land acquisition problems. A slum redevelop- ment project (Chetla) had run into legal and political difficulties.  -3- Bank's concern with a broader range of program elements, found mutual rein- forcement in the design of the second project. CUDP II was prepared during 1976 and 1977. III. THE PROJECT 3.01 The project that emerged from this period of preparation was large, ambitious and complex. The description of the project, as provided in the Development Credit Agreement, is given in Annex 1. At the investment program level, the allocations for water supply, sewerage/drainage and transport became a much smaller proportion of the total than in CUDP I (down from 60% to 40%), and also, a smaller proportion than in CMDA's total program (Annex II). At the same time, the proportion of the project allocated to area development and solid wastes management were increased, and allocations for bustee and refugee colony improvement, municipal and anchal (fringe areas) development, health, schools, and for small scale enterprise support, were added. 1/ 3.02 At the CMDA management level problems had been identified, and reform in management structure, combined with the introduction of improved manage- ment systems, were expected to overcome many of the implementation problems encountered in CUDP I. To augment CMDA's capacity, new staff were to be hired, consultants were to be used more extensively, and training was to be pursued more systematically. At the level of state and municipal government the Bank and the Goverrment of West Bengal (GOWdB), following up on the general financial plan formulated under CUDP I, included a series of municipal reforms and financing targets in the legal agreements. These were designed, in part, to help the CMD to cope better with the increasing cost of operating and maintaining the improved facilities and services resulting from CMDA's investments. A. The Program 3.03 CUDP II consisted of 54 sub-projects in 11 sectors, plus consultants services, technical assistance, and training, drawn from a five year rolling investment program. 2/ Some of the sub-projects were programmatic in nature 1/ Contributing factors to the shift in emphasis were (a) the Bank's reluc- tance to include any component of the water supply program which depended on water diverted from the Ganges by the Farakka Barrage because of the dispute between India and Bangladesh over its use; and (b) the desire of the new GOWB (1977) to increase the bustee program, add the anchal program and reduce the transport program correspondingly. 2/ Originally there were 57 sub-projects but 3 transport sub-projects were subsequently dropped.  -4- e.g. Calcutta water distribution system, reduction of water logging, solid waste management, bustee improvement and the health and schools programs. The range of activities is widet varying from traditional public works and redevelopment of existing urban areas, to innovative programs designed to improve living conditions, education, and health in existing bustee areas, and to open up new areas for low cost accommodations. 3.03(a) The size and distribution of investments by component for CUDP II in relation to CtDA's five year program is shown in Annex II. With the excep- tion of water'supply, parks and playgrounds, and basic mapping, CUDP II would finance more than 50% of each component. B. CHDA Management Reform 3.04 During project preparation, changes were made in CMDA's management structure. Senior project management would now include a chief executive officer and four directors, the latter with responsibility for four main functionst operations, planning, administration, and finance. Progress was also made in revised budgeting, accounting, appraisal, and financial manage- men:. systems, for which design and assistance in implementation was done with the help of consultants financed under CUDP I. The installation and opera- tion of the new systems was the subject of a covenant stipulating that the CMDA shall install and operate: (a) a project budgeting and accounting system; (b) a management information system; (c) a project appraisal system; and (d) a project monitoring system. These systems were all introduced on April 1, 1979. 3.05 Another important management-related covenant required the audit of accounts of CMDA and the Calcutta Municipal Corporation (CMC) for each fiscal year by independent auditors, in accordance with appropriate auditing prin- ciples consistently applied. From 1980 onwards, audit reports (from 1982 for audits of statements of expenditures) were submitted on a regular basis. C. Local Government Reform 3.06 The problem of financing the operations and maintenance of the improved facilities and services resulting from CMDA's programs of invest- ments has been a major concern from the beginning of the Bank's involvement in Calcutta. Improvement in urban services can only be sustained if they can be paid for on a regular basis. The issue was posed under CUDP I as a condi- tion that the GOWB indicate how it intended to finance the future needs of the CMD. A "Financial and Institutional Plan to Secure Improved Performance of Municipal and Other Units concerned with the Development Program" was produced by the GOWB in 1975. It was followed up strongly by the Bank and the GOWSB during the preparation stage of CUDP II. A program of changes in the existing laws governing local government were proposed by the GOWB, and supported by the Bank. These dealt with the central valuation of property,  -5- the reorganization of the Department of Municipal Services (DMS), the system for awarding state grants to municipalities, and charges for local services. These plans and actions to be taken by local government, which primarily dealt with improving the efficiency and viability of operations, were the subject of a series of covenants. A major concern was simply to increase revenues to better operate and maintain the facilities financed in part by the Bank's funds. The covenants dealing with local government reform are included in the "particular covenants" of the West Bengal Agreement, and are listed in Annex III. (Compliance of these covenants is included in Annex VI under West Bengal Agreement). D. Project Design 3.07 The Bank and the CMDA put a great deal of effort into preparing CUDP II. The Bank sent six missions to Calcutta during the period of preparation and appraisal, July 1976 to August 1977. These involved 11 staff members and four consult -ts, spending a total of 314 person days in Calcutta. The Bank was far more involved in project detail, and contributed far more to the design of individual project components, than was the case in CUDP I. The scope of the project expanded during preparation. A small scale enterprise component was added after the main appraisal had been completed, and required a separate mission, and "issues meeting." Just when preparation of the project had been completed COWB decided to extend the bustee improvement program , and to add a program for anchal development, by reducing the allocation for road construction. 3.08 In addition to institutional reform CUDP II included some novel components such as small scale enterprise, health, schools, and an urban redevelopment project (Howrah Fish and Pan Market). While the impact of these schemes would be quite localized their demonstrated success could be far reaching (e.g. the municipal development program under CUDP III evolved from the municipal and anchal development program of this project). The large number of sub-projects (54), and the large number of covenants (32 directly dealing with project operations), gave the project an appearance of comprehensiveness. On the other hand, its focus was diffuse, and some of its components were complex. 3.09 Although the project emphasized the strengthening of CMDA and the reform of local government in the CMD, the investment program dominated the project design. Much effort went into the preparation of different program elements, even the small ones as, for example, the small scale enterprise component. CMDA's management was to be strengthened and its capacity was to be stretched to meet the needs of the program. Both additional staff and consultants were to be hired to implement the program.  -6- IV. PROJECT IMPLEMENTATION 4.01 The project was scheduled for implementation over the 5-year period, 1977/78 - 1981/82. The target date for physical completion was March 1982; actual completion was some two years later. In the course of implementation both content and costs were revised (Annex XI, Ch.III). Some of the dis- crepancies between the expected and the actual can be attributed to unrealis- tic scheduling to the problems encountered in land acquisition, staffing, and obtaining construction materials (see para 3.1 Annex XI). The record of physical completion is given in Annex IV and further developed in paragraph 3.3 Annex XI. Some project components are identifiable physical suS-projects, while others are clusters of sub-projects, or programs: the CUDP II component being an estimate of how much of the program was likely to be carried out within the project period. The bustee improvement program (BIP) is one example of the latter, the Calcutta water distribution system is another. Among the sectors, the lags in completion are rost evident in area development (East Calcutta) and solid waste management; there are also large gaps between expected and actual completion in the BIP. 4.02 The speed at which land can be acquired for public projects seems to be slow and unpredictable in the CMD. It has generally taken longer than estimated. The experience of CUDP I was repeated in CUDP II. CMDA tried to speed up the process by endeavoring to find alternative accommodations for those displaced by the acquisition, as well as compensating the owners of the land. However, the legal obligation of payment of compensation to owners of land acquired, and the social obligation of findin, alternative accommodation of those displaced by the acquisition, could not be avoided. Land acquisi- tion delays affected some highway sub-projects, the area development sub-projects, and, in particular, the health component. 4.03 The difficulty CMDA experienced filling staff positions caused some operations to be inadequately staffed for long periods of time, with a cor- responding impact on output. This problem arose in part from CMDA's special status in the government structure. Many of its staff are on deputation from various government departments, and some are directly recruited. While the project was being implemented, a dispute arose concerning the position of staff with regard to service and promotions. This went to litigation, and while the outcome was pending, CMDA was unable to fill a number of important staff positions. The problem of staffing, particularly at the middle manage- ment and technical levels, is a recurring theme in the Bank's supervision reports. Areas particularly affected have been traffic engineerinr0, solid waste management, small scale enterprise, and estate management. The plan- ning and design cell for drainage also needed strengthening at one time. 4.04 State-wide shortages of some construction materials (e.g. cement, steel, stone chippings, and bitumen), in recent years also contributed to slowing the pace of construction.  -7-. 4.05 The disposition of outstanding sub-projects on completion of CUDP II is shown in Annex V. As indicated in the footnote to this annex, if there was no cost overrun, or if the project was of a "program" nature, e.g. the BIP, it would be financed under CUDP III after completion of disbursements of CUDP II. Projects not qualifying will be completed from CMDA's investment program, without IDA financing. 4.06 The legal agreements identified thirty-two actions to be carrie& out or "'caused to be carried out" by the GOI (l), the GOWB (24) and the CMDA (7). Eighteen were complied with, eight of these after some delay. Nine were partially complied with. One (delinking water and sewerage taxes'and charges from consolidated property taxes) was not complied with because of a change of political will, and one was not yet due because of the delay in the com- pletion of the area development projects. The remaining three have been revised. The status of compliance with covenants is shown in Annex VI. 4.07 Realizing that CUDP II would severely stretch CMDA's staff resources, the project financed CMDA's extensive use of consultants to provide new skills required for the expanded program, supplement CMDA's capacity to deal with its larger program, and introduce the institutional reforms. The results have been mixed. The work of consultants in introducing the institu- tional reforms in project monitoring and management information systems, the new commercial accounting system, and in devising training programs for CMDA employees, has been successful and appreciated. This is also the case with a number of contracts dealing with engineering studies and design. However, the genera' experience has not been satisfactory. CMDA has found that the employment of consultants requires more in-house effort if they are to be used effectively (see paragraph 5.3 Annex XI). V. FINANCIAL PERFORMANCE A. Project Costs 5.01 The cost estimates for the sector components were revised from time to time, as were also the schedules for disbursement and project completion. As a result, the program was modified several times. Costs for some com- ponents were changed (see Annex VII); a comparison of actual and appraisal estimates of sub-project costs is shown in Annex VIII (See also Para 3.4 Annex XI). 5.02 The comparison of estimated and actual sub-project costs should be viewed in the context of the project being programmatic in nature with chan- ges in scope and size occurring during implementation. In addition, some of the original estimates were not based on detailed sub-project studies. Of  -8- the 44 sub-projects listed in Annex VIII 1/, 21 are shown to be physically complete at full disbursement of the credit (see Annex IV). Eleven of these were completed within the appraisal estimate and 10 were completed at an average cost overun of 282. The 23 incompleted sub-projects include 6 where costs already exceed appraisal estimates. One of these was a program, expan- sion of the Calcutta water distribution system, where the appraisal estimate was based on a rough estimate of what might be accomplished during the implementation period. Many of the incompleted sub-projects show less has been spent than estimated at appraisal, which is due in large part to their incompletenesi (See paragraph 3.43 Annex XI). B. Financial Impact 5.03 The facilities created by the project are providing more and better "urban services", but they are also requiring additional public funds to operate and maintain. CMDA has estimated that the annual cost of operating and maintaining the assets created by CMDA's investments up to March 1982 exceeds Rs 31 crores (US$24 million in 1987 prices) (para 5.4 Annex XI). While action taken pursuant to complying with project covenants has improved the prospect for increased local revenues from user charges and taxes, actual improvements are expected to be slow, and the overall deficit is expected to increase before it will decrease. C. Other Matters 5.04 Annex IX shows the cash flow during the implementation period, and Annex X, the schedule of disbursements. After a slow start, disbursements exceeded appraisal estimates in the fourth year, then took several years to complete full disbursement. VI, INSTITUTIONAL PERFORMANCE AND DEVELOPMENT 6.01 In the course of CUDP I, CMDA was substantially strengthened, and became increasingly competent in planning and executing large investment programs covering a wide range of urban facilities and services (see paragraphs 5.1, 5.2, and 5.4 Annex XI). Its management structure was strengthened, and new management systems installed. A program for evaluating the impact of investments on a sector-by-sector basis was introduced and used to guide development of new programs (see Chapter VI Annex XI). In addition, CMDA was tested by the constant pressure of its large program commitment, and the continued detailed review of its progress by a steady stream of Bank 1/ A cluster of eight sub-projects is listed as a single project (Calcutta outfall improvement), and neither the health program nor the small enterprise component are included. This explains the discrepancy between the 44 and the 54 mentioned above (paragraph 12).  -9- supervision missions. CMDA has grown through this experience, end can now look at its own performance critically. It did so, for example, when it considered its problems with the use of consultants (see para 4.07). 6.02 The view of the Bank and the GOWB on CMDA's institutional role have not remained static during this period. Efforts to strengthen CMDA have been supported vigorously, and the limitations of the single dominant agency approach have become increasingly apparent. With the formulation of CUDP III, CMDA's role has been developed to take on a broader role in planning and coordination, while other agencies assume a larger role in sub-project implementation. The transferring of assets created by CMDA, and respon- sibility for operating and maintaining them, are part of this process (paragraph 5.4 Annex XI). 6.03 The progress in the reform of local government has also been substan- tial during this period. They are a necessary condition for improving the efficiency of service delivery in the State. VII. PROGRAM RESULTS 1/ 7.01 Some components of CUDP II made clear and measurable contributions to the CMD. For example, the water supply to the CMC was doubled, waterlogging was reduced in many parts of the city, and the BIP benefited more than two million people in the economically weaker sections of the community with improvements in environment, and a reduction in the incidence of water borne diseases. Among the individual programs, the municipal and anchal develop- ment program, designed to assist communities on the fringe of the metropolitan area, was particularly successful. It was the forerunner to CUDP III's Municipal Development Program, in which the local communitiest through their elected representatives, play a large part in planning their own programs. 7.02 Some components concerned supervision missions throughout the period and did not achieve expected results, due mainly to inadequacies in the planning effort: (a) Area development. No sites and services plots were handed over during the project period. This applies to the project area carried over from CUDP I as well. The projects were bedeviled by land acquisition problems. East Calcutta site (CUDP II), and the BP site (CUDP I), required large volumes of earth moved in order to reclaim the land. The "sites and services' approach in Calcutta was new, to be implemented and managed by a new organization with little or no 1/ See also Chapter VI and the attachment dealing with the health program, of Annex XI.  -10- prior experience in providing and managing urban shelter projects. On the basis of experience thus far the original approach has been changed (see paragraph 5.7 Annex XI). (b) Organization of solid waste management. The project followed earlier recommendations made for this sector. Consultants were employed at the design stage. The delay in implementing the organizational changes in this sector carried over from CUDP I. Land acquisition was also a problem. (c) Traffic engineering. This also represented a new approach to an organization whose staff had been primarily experienced in road construction. There was difficulty assembling a staff with the necessary skills, and the use of consultants was not a satisfactory substitute. (d) Small scale enterprise assistance. The Bank put considerable effort into formulating this pilot project. It considered the component an important effort, with possible long run benefits to the economy of the CMD. It was also innovative, and involved CMDA in a coordinating role with several agencies and the nationalized banks. It was a new area for CMDA and the Bank. Being small it was not reviewed as systematically as other larger components. In the latter years of the project, the component was regarded as successful although it never achieved the results expected at appraisal. (e) Urban Renewal. This innovative and complex component suffered from land acquisition, legal, and marketing problems (see paragraph 5.7 Annex XI). 7.03 In some cases the completed investments did not produce benefits for users and potential users during the project period because of the absence of necessary complementary investments. This occurred with some investments in water supply, sewerage and drainage (para 7.6, Annex XI). 7.04 While results in the more traditional fields, including the BIP and municipal and anchal development program were more predictable, the impact studies undertaken by CMDA showed ways in which the impact of some of the programs could have been increased: (a) improve maintenance of drainage works; (b) undertake expansion of networks in a manner that maximizes use of new facilities in the process--sewerage/drainage and water supply sectors; and (c) improve coordination of related activities, for example, coordination with traffic police in traffic improvement schemes.  -11- VIII. BANK PERFORMANCE A. Project Design 8.01 On the other hand, the efforts to bring measures of local government reform into the project, and to set the investment program in a broader context, was a strong feature of the project. The project was more complex than necessary to give it an identifiable impact on CMD and its institutions. In retrospect, it stretched CMDA's capacity too thinly. Strengthening management systems and making greater use of consultants were not sufficient to provide the capacity to perform well in all the many fields in which CMDA had project responsibility. Project design also made Bank supervision more complex than necessary. B. Supervision 8.02 Once the loan was made the Bank supervised this operation strongly and thoroughly. During the six year period, December 1977 to December 1984, 14 Bank supervision missions visited Calcutta, spending 1,023 man-days on the progress and problems of CUDP II. The missions were regularly spaced and well staffed. Their views were put before CMDA promptly and in detail. CMDA also acted accordingly. C. Institutional Support 8.03 The Bank gave support to CMDA not only through the supervision exer- cise focused on project components and covenants, but also helped introduce new management systems, including systems for monitoring progress and for evaluating results. It pursued the institutional objectives set at the time of appraisal in a systematic and consistent manner. As CMDA's planning limitations became evident, the Bank strongly supported the change to a more diverse strategy for program planning and implementation, and operation of urban services. Bank support for changes in improving the efficiency of local government by following up on the proposals of the GOWB must be one of its more important contributions to the future urban development of the CMD. IX. EVALUATION 9.01 The appraisal report limited the economic analysis to area develop- ment, the bustee improvement program, water supply, solid waste management, and roads and traffic improvement, which accounted for about 60% of total project cost. The weighted economic rate of return (ERR) for these com- ponents was estimated to be about 20%. 9.02 The area development, bustee improvement, and solid waste management components have not yet been completed. No attempt therefore, has been made to estimate the ERR for these components. In water supply the appraisal  -12- estimate of the ERU was based on increases in incomes and productivity due to reduced absenteeism from sickness. However, distribution systems9 to be financed from Government sources, have not been completed, therefore recal- culation of the ERR has not been possible. In roads and traffic improvements a partial before/after analysis of the first traffic engineering scheme indicated that, in economic terms, the investment paid for itself in less than a year. 9.03 CMDA, however, did undertake an evaluation of the impact of ivest- ments from 1970/71 to 1981/82, which includes investments in this project, CUDP I, and its non-IDA financed investments. These analyses, based or limited, available data, have been completed for water supply, sewerage and drainage, bustee improvement, solid waste, and traffic and transportation. The quantifiable impacts are summarized in the table below.  -13- I" ( et~~~~~ hum = u _t 811 " w 42 *2 S aa~~~~~~~~~11.6o 8~~~~~n as o a0 U 2. 0i3 3.1 4.0 1.8 (CO*4.8 .o. 4.00 701 3 2 *.0 '.8 346 8.0 .'. *-40 S)2*2 6 1 5 " wuowx " $a 4.Iog'lOg 00~~~~U 10e3 (3 goooLAfIl OaLlieuy 3~~ ~~4 3SIwaS 2$Ise" bibeaSU3 I~~~~0a I*m * a.o at X.~ ~ ~~u. _~~~~~ 14114 348 , IS7 1 p516 3mb 6332 -is .5 103 ( S C Mam 167?~" 2462 3eg mA. _.IA *inAi= .1 a0 141.2 MOelaa I., CaIai sg1em ..i 17 29S12 2 1a .in U.. dGROW. ILAN=31014 Us . Wal) 9.AMM&L *obWI& 2 VLBL "gm 4mammo- Wac 31 ~ ~ m 99 110 30 413 am m.euesw 1e 8.4 1.4 2.1 0 4.01 BamUM20 3 s %Oa . 0 44 07 UX206 AIMO La leeeL Tom. %1618 top2 _ U * 36.0 .3S.4 10.4. las Ie.aL ,osei ALM= .10.aine Opmsag 3-ulele1" nl J*0 3-ania 01. 1.0 04. 043 a...&. ums b _ ..044 2 .' 104 M em 1341sm Oem us tommum 124dmss opwsw 131.M 14,06 6340 1.60 13. 331.700 - a 4L.ie job u-el- -"woe am .9op CJJO X" " ad,"io on.) pauMo jg m 3'I"ie(s.1 awa 64 o ii % camsr @1?gUe a 3-fIa1 3-aet e _  -14- X. CONCLUSIONS 10.01 The project represented a bold effort by the Bank, the CMDA and the COWB to make an impact in Calcutta. A large and varied program was carried out. CMDA was strengthened and local government was prepared for taking a larger role in providing resources to sustain the improvements in urban services. 10.02 The project marks a transition to a new role for CMDA and the Bank. The Bank's concern with project detail in CUDP II should not be as necessary or desirable in future operations. CMDA's responsibilities for the medium and long term stragetic planning of Calcutta's development should be enhanced. 10.03 At this point the most critical issue facing Calcutta's future development is financing the cost of operating and maintaining its urban services. While planning, investment and evaluation are important, improve- ments cannot be fully effective without assured funds for operation and maintenance. 10.04 CUDP I initiated a program to address certain major deficiencies in urban services. It focused on physical improvement and took preliminary steps to improve financing while creating liabilities. The second project focused more attention on the problem of financing operations and main- tenance, and major reforms were made in municipal laws that would make progress possible. However, actual progress in increasing revenues from user charges and taxes remains a promise for the future. The financing problem remains the most pressing if the gains from the recent past are to be main- tained. 10.05 When CUDP II was being formulated the Bank was concerned that CMDA's program be shifted from its heavy emphasis on public works to become a more comprehensive "urban development program". At that time this meant more programs directly benefiting the urban poor. Today, considering the Calcutta experience thus far, it would be necessary to give financial viability a more prominent place in any definition of a future urban development program. 10.06 The impact evaluation carried out by CMDA commencing in 1980, comple- mented by the findings of the Municipal Finance Commission report of March 1982, confirmed the concern of the Bank and GOWB over the paucity of funds available for the operation and maintenance of investments created by CMDA. It also pointed to the concentration of investments in the Calcutta-Howrah area, which arose through faulty planning on the part of CMDA. In the preparation of CUDP III therefore, COWB made the following decisions: (a) to reduce the level of investment in the Calcutta-Howrah metrocore area; (b) to increase the level of investment in the surrounding municipalities, which hitherto had received little; (c) to decentralize the identification and the  -15- planning functions to the local bodies of investments in their respective areas to the extent possible, based on the favorable experience gained in the implementation of the municipal and anchal development program; (d) to resus- citate a number of implementing agencies which had bee. "absorbed" by CMDA in the early days of CUDP II; and (e) to involve the local bodies to a greater extent in the implementation of their programs. The above approaches have been incorporated into the design of CUDP III, including an innovative municipal financial management program which rewards good performing local bodies while cutting back planned investment funding for the poorer perform- ing ones. While the pace of CUDP III implementation, like that of CUDP I and II, has not matched appraisal projections, the success of the project's Municipal Development Program continues to be a good example for the sector of applying the lessons learned from earlier projects.  -16- ANNEX I Page 1 of 3 INDIA SECOND CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 756-IN) PROJECT COMPLETION REPORT Description of the Project I/ Part A: Area Development (i) Sites and Services: The provision of sites and services on about 175 ha of land at East Calcutta for residential lots for all economic groups, and for industrial and commercial prrposes, and also education, health and community facilities and off-site infrastructure for water supply, sewerage, electrical power, wastewater treatment, roads and drainage; (ii) Fish and Pan Market: Redevelopment of the existing fish and pan (betel leaf) market at Howrah; (iii) West Howrah Site: Preparation of about 240 ha of land including adequate landfill for future implementation of an area development scheme; and (iv) Provision of industrial and business loans through commercial banks and of housing loans for economically weaker sections and low income groups through West Bengal ager.cies. Part B: Improvement of Bustees Provision of basic infrastructure in about 400 bustees. Part C: Primary School Construction and Remodelling Provision of about 40 new primary schools and remodelling and extension of about 400 existing primary schools in the CMD. 1/ Schedule 2 of the Development Credit Agreement.  -17- ANNEX I Page 2 of 3 Part D: Health Provision of one project health headquarter unit, about two primary health centers and about 10 subsidiary health centers. Part E: Small-Scale Enterprises Provision of loans through selected commercial banks to small-scale enterprises and strengthening of extension service. Part F: Water Supply Renovations of the Palta-Tallah headworks, provision of fringe area water supplies and implementation of water supply augmenta- tion schemes. Part G: Sewerage and Drainage Design and construction of schemes for removal of water logging, sewering the unsewered areas, drainage improvements, branch and lateral sewers, rehabilitation of Bagjola Canal to improve sur- face water drainage and cleaning and renovation of existing sewers. Part H: Solid Wastes Management Rehabilitation of the existing system of refuse collection, street cleansing and night soil collection, and development of improved methods of and facilities for solid waste disposal and the carrying out of training programs, pilot projects and initial implementation of new systems in solid wastes together with studies to improve solid waste management. Part I: Sanitary Latrines Provision and installation oi prefabricated concrete flush toilets. Part J: Municipal and Anchal Development Provision of roads, water supply, drainage and sanitation; street lighting and other infrastructure works in a number of fringe areas (anchals).  -18- ANNEX I Page 3 of 3 Part K: Traffic and Transportation (i) Construction of the Eastern Metropolitan Bypass and the Barrackpore-Kalyani Expressway; and. (ii) Implementation of a program for improvement of traffic opera- tion and management, including provision of vehicles, plant and equipment, road repairs and street lighting, and improve- ment of other roads and a bus terminal. Part L: Consulting Services, Technical Assistance, Training and Monitcer- (i) Preparation of (a) a CMD development plan including sewerage and drainage, (b) training; monitoring and evaluation systems for Part D of the Project, (c) continued pollution studies, (d) management information, and project monitoring and con- trol system, and (e) studies for regulation and licensing of tubewells and of groundwater supplies. (ii) (a) Organization of a Central Valuation Board, (b) prepara- tion of studies and monitoring of small-scale enterprises, (c) preparation of public transport feasibility studies, (d) preparation by the Authority and the Corporation of pilot projects and studies of solid waste management systems, and studies. design and monitoring of traffic engineering schemes, (e) provision of accounting, stores and financial management systems for the Corporation, (f) preparation and implementation of staff training programs for West Bengal, the Authority, the Corporation, local bodies and the Calcutta Metropolitan Water and Sanitation Authority and (g) planning and design of construction works included in the Project.  -19- ANNEX II FIVE YEAR INVESTMET PLAY AND CUDP EI COMPONENTS (Figures in crores of Rupees) Pioject Total Investment CUDP II Components (77/78 to 81/82) Part Area Development 27.58 14.88 Dustee Improvement 21.05 21.00 schools 2.17 2.15 Helth 0.20 0.20 Water Supply 37.92 10.57 Sewerage & Drainage 31.51 20.00 Solid Waste Management 9.14 8.96 Conversion of Latrines 2.14 1.97 Municipal & Anchal 6.00 6.00 Traffic & Transportation 50.39 26.16 Technical Assistance 4.04 2.75 Parks & Playgrounds 0.63 - Basic mapping 1.50 - Design/Supervision 16.86 6.91 Contingencies 37.22 33.39 TOTAL 248.35 155.00 Source: CMDA  -20- ANWEX III Page lof 4 INDIA SECOND CALCUTTA URBAN DEVELWPMENT PROJECT (CREDIT 756-IN) PROJECT COMPLETION REPORT Covenants Dealing with Local Government 1/ Particular Covenants Section 3.01. West Bengal shall cause its departments and other agencies and authorities responsible for carrying out any part of the Project to maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices their operations and financial condition related to the Project. Section 3.02. West Bengal shall cause the Corporation to: (i) have its accounts and financial statements (balance sheets, statements of income and expenses apd related statements) for each fiscal year with effect from the fiscal year commencing April 1, 1977 audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than nine months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of the Corporat:.on and the audit thereof as the Association shall from time to time reasonably request. Section 3.03. West Bengal shall cause to be operated and maintained efficiently, and shall provide the Corporation, Calcutta Metropolitan Water and Sanitation Authority and other local bodies within CMD with sufficient funds to operate and maintain adequately, (i) the existing municipal services, and (ii) facilities and services created under the continuing program of the Authority and transferred to the local municipal authorities upon comissioning. 1/ West Bengal Agreement.  -21- ANNEX III Page 2 of 4 Section 3.04. (a) West Bengal shall establish equitable beneficiary selection criteria for the area development schemes included in Part A of the Project. (b) West Bengal shall develop appropriate operational policies and proceduresp and shall install satisfactory organizations to administer sites and services, rental and leasehold properties developed under Part A of the Project. (c) West Bengal shall cause the Authority and the West Bengal Housing Board (or any other agency or authority) to determine and collect from beneficiaries under Part A of the Project, charges adequate to recover all costs of provision (excluding the costs relating to provision of health, community and administrative facilities, schools and off-site road and drainage systems) and costs of operation of facilities provided under said Part A of the Project. Section 3.05. (a) for the purpose of revaluation of propertie- in CMDV, West Bengal shall take all steps necessary to establish by December 31, 1978, a Central Valuation Board. (b) West Bengal shall cause the. Central Valuation Board to complete by March 31, 1982 or such other date as the Association may agree, a revalua- tion of the properties in CMD and a new valuation roll for the Corporation and all other local bodies effective April 1, 1982. Section 3.06. For the purpose of achieving effective development and efficient organization of local government services in West Bengal, more specifically within CMD, West Bengal shall: (a) reorganize DMS by March 31, 1979; (b) commence implementation of training programs prepared pursuant to Part L of the Project by December 31, 1978; (c) consider and implement by April 1, 1979 appropriate improvements to the senior management structure and accounting, stores and financial management of the Corporation; (d) prepare by March 31, 1979 a revised grant structure for local bodies in CHD and take all necessary steps to implement such grant system from April 1, 1980; and (e) (i) prepare, or cause to be prepared by December 31, 1978 in consultation with the Authority and appropriate local bodies in CMD, a detailed plan of operations to provide for adequate maintenance of Bustees in the GCD; and (ii) implement or cause to be implemented such plan from April 1, 1979.  -22- ANNEX III Page 3 of 4 Section 3.07. West Bengal shall, (i) by April 1, 1978, nominate such areas and such local bodies within CMD as shall have the benefit of State level public service employees in the operation of municipal services; and (ii) prepare and implement by December 31, 1978, a feasibility report on the organization, operation and financing of said arrangements. Section 3.08. West Bengal shallS (a) commission studies to be completed by March 31, 1979 to advise on regulation and licensing if necessary of tubewells and groundwater supplies in CMD; (b) by December 31, 1978 develop proposals in respect of institu- titnal responsibilities for water and sewerage revenue collection in CMD, and implement such proposals by April 1, 1980; (c) by September 1, 1978 draw up a program for metering of water connections to be implemented from April 1, 1979 through March 31, 1982; (d) take the necessary steps to enable the Corporation, and cause the Corporation to establish and operate in accordance with satisfactory finan- cial practices from April 1, 1978 a separate water supply and sewerage fund, and transfer to it from the general revenues of the Corporation such funds as will be necessary from time to time to meet all expenditures on the provision of water supply and sewerage services; and (e) cause the Corporation to delink from the consolidated property tax water supply and sewerage taxes and charges, and levy such water supply and sewerage taxes and charges for the fiscal year 1981/82 and thereafter as shall be sufficient to meet not less than 84% of the Corporation's actqal revenue expenditures for water supply and sewerage (including interest and loan repayments) from actual revenue receipts (excluding temporary deposits). Section 3.09. West Bengal shall ensure that in respect of revenue earning schemes commissioned under the Project and transferred to the opera- tional agencies for operation and maintenance, the said agencies shall assume debt service obligations related to said schemes from not later than April 1, 1982; Section 3.10. West Bengal shall cause the Corporation to use its best endeavors to collect during each fiscal year property tax due for that fiscal year plus any other property tax due for a period not exceeding five years and not collected on the first day of such year, on the following basis:  -23- ANNEX III Page 4 of 4 (i) not less than 70% in fiscal year 1978/79; (ii) not less than 80% in fiscal year 1979/80; and (iii) not less than 90% in fiscal year 1980/81 and thereafter. Section 3.11. (a) West Bengal shall ensure that the Corporation shall provide satisfactory standards of operation and maintenance for municipal services, and shall finance not less than the following proportions of actual revenue expenditures (including interest and loan repaymentc) in the fiscal years indicated by actual revenue receipts (excluding temporary deposits) from statutory revenues including octroi allocations, but excluding grants-in-aid from West Bengal: 1978-79 1976-77 proportion plus 4% thereof 1979-80 1976-77 proportion plus 8% thereof 1980-81 1976-77 proportion plus 12% thereof 1981-82 1976-77 proportion plus 15X thereof (b) West Bengal shall ensure that the local bodies in the CMD (outside the Corporation) shall provide satisfactory standards of operation and maintenance of municipal services, and shall finance not less than the following proportions of actual revenue expenditures (including interest and loan repayments) in the fiscal years indicated by actual revenue receipts (excluding temporary deposits) from statutory revenues and octroi allocations, but excluding grants-in-aid from West Bengal: 1978-79 1976-77 proportion plus 10% thereof subject to a maximum of 68% 1979-80 1976-77 proportion plus 15% thereof subject to a maximum of 70% 1980-81 19764-77 proportion plus 20% thereof subject to a maximum of 73% 1981-82 1976-77 proportion plus 25% thereof subject to a maximum of 75% provided that where the 1976-77 proportion of revenues to expenditures exceeded 65%, the percentages indicated shall be reduced to 4%, 8%, 12% and 152 respectively, and that all authorities by 1981-82 shall achieve not less than 50X coverage of expenditures fr:om such revenues.  SECOND CALCUTTA URBAN DEVELOPMENT PROJECT KCUAL AM DIP=W ?SICAL LMW f ON rSOR S WV=SUP I .nlts oI .).t1on of Date of units of oPgint cpl.tton I I 30ui taso ot plefetion of a,uor of a pr3em on I ltvo3ect Cod. *a1 |~ j") fls3o? rI0B obr fat';ocs b ozr w antwl diUbDr.mF I pro3ect Ord Nam c pores _of dit poans I | ~~~~~~~~~~~~~Actual Expetd A 1t" clEct_ I.TrDON111 S as JUN 084 MmR 082 188.09 Calwtts Tubmwll 2.Pujping satlorn s0 80 02:s,'139 I.T1Uwel1 23 24 JUE '04 MR '2 10.0 Howufl Tu_11mU goruqiui s- i in 23 24 d2: M/4 Calcatt Distgimatio 1.Ptimary Gcid 46000 a 63000 a MR 086 MR 082 74.01 2:a/4 1. 11 2 2 J*Oeal fr. Anen 2.atart TOseC I 1 R SEt P 179 100.9 3.Semmeazy Grid 321?1 a 33823 a I.Pu g station 2 2 o2Q/v4 1.Tst1l 3 8