India - Uttar Pradesh Urban Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-4447-IN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN THE AMOUNT OF US$20 MILLION AND A PROPOSED CREDIT OF SDR 106.3 MILLION TO INDIA FOR THE UTTAR PRADESH URBAN DEVELOPMENT PROJECT April 2, 1987 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 (As of February 26, 1987) US$1.00 = Rs 13.07 Rs 1.00 = US$0.0765 Rs 1 million = US$76,511 The US Dollar/Rupee exchange rate is subject to change. Conversions in the Staff Appraisal Report were, except as otherwise noted, made at the rate of US$1 to Rs 13. Fiscal Year April 1 - March 31 Abbreviations and Acronyms CGA - Central Ganga Authority DLB - Directorate of Local Bodies COI - Government of India GOUP - Government of Uttar Pradesh GPD - Canga Project Directorate HUDD - Housing and Urban Development Department (of COUP) IPMC - Investment Planning and Monitoring Cell (of HUDD) KUDP - Kanpur Urban Development Project MOUD - Ministry of Urban Development UNDP/TAG - United Nations Development Programme/Technology Advisory Group UP - Uttar Pradesh UPJN - Uttar Pradesh Jal Nigam (state water and sewerage authority) UPWSSP - Uttar Pradesh Water Supply and Sewerage Project (Credit 585-IN)  FOR OMCIL USE ONLY 1-i INDIA UTTAR PRADESH URBAN DEVELOPMENT PROJECTr LOAN, CREDIT AND PROJECT SUMMARY Borrower: India, acting by its President (cot) Beneficiaries: Government of Uttar Pradesh (COUP) and up to 30 towns in Uttar Pradesh (UP); and Gangs Project Directorate (GPD) and four or more towns in Bihar, UP, and West Bengal. Amount: Bank Loan : US$20 Million IDA Credit: SDR 106.3 Million (US$130.0 M equivalent) Terms: Bank Loan : Repayment over 20 years including five years' grace, at applicable rate of interest. IDA Credit: Standard. Relending Terms: (a) From GOI to COUP: As part of central assistance to states for development projects on terms and conditions applicable at the time. From COUP to the development authorities, municipal corporations or boards, town water and sewerage authorities, in about 30 urban areas for: (i) technical assistance: grants, remainder on loan - see (v); (ii) low cost sanitation: 50% grants; (iii) slum upgrading: grants up to Rs 250/capita; (iv) community facilities in sites and services: grants and (v) other project activities: at 8.75Z p.a. interest over 20 years including five years' grace period on principal repayments. Agencies would on-lend to beneficiaries at not less than 12% p.a. over varying periods of time. 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 llank authorization.  -ii- (b) From GOI to GPD: grants. From CPD to designated implementing agencies in Bihar, UP, and West Bengal: grants. GOI would bear the foreign exchange risk. Project Description: The project would: (a) support policy adjustments, institutional strengthening, and urban shelter and infrastructure developments initiated by COUP; and (b) address sector policy improvements to support GPD at the national Level by strategic planning for pollution reduction and control in the Canga River. The project comprises two distinct programs: the UP Program, and the Canga Program. The UP Program would support: (a) sector management, technical assistance and training, sites and services, slum upgrading, area development, water supply, sewerage and sewage treatment, drainage, low cost sanitation, solid waste management, maintenance management, and traffic engineering and management, in about 12 urban areas in the state, and (b) low cost sanitation investments in a further 18 towns where United Nations Development Programme/Technology Advisory Group (UNDP/TAG) feasibility studies have already been carried out. This program would focus on improving urban management, and operations and maintenance of investments, including improved resource mobilization and utilization. The Canga program would provide consulting services, studies, training, priority rebabilitation and pollution control works, and equipment for sewer cleaning operations and river monitoring to reduce pollution of the Canga River. The potential risks of the UP program are: (a) the capacity of UP's Investment Planning and Monitoring Cell (IPHC) to manage the project; (b) the institutional capacity of town agencies to implement a multi-sector investment program; and (c) non-compliance by COUP and project towns with policy conditions relating to cost recovery and resource mobilization. However, GOUP has staffed the IPMC with its most experienced multi-discipline officers who are familiar with programmed activities. Project towns would implement an operational action plan, supplemented by training, to strengthen their institutional capacity. COUP and project towns have already demonstrated a firm commitment to objectives by having increased  -iii- substantially, water tariffs and water and sewer taxes and charges. The potential risks of the Ganga program are low since GPD will be engaging specialist consulting services to support its core team. implementation will be carried out by competent authorities at the state level. Estimated Costs: Local Foreign Total