India - Ecodevelopment Project

Document of The World Bank Report No. 14914-IN STAFF APPRAISAL REPORT INDIA ECODEVELOPMENT PROJECT August 3, 1996 South Asia Department II Agriculture and Water Division  CURRENCY EQUIVALENTS Currency Unit = Rupees (Rs.) US$1.00 = Rs35 .1 WEIGHTS AND NMEASURES The metnrc system is used throughout this report GOVERNMENT FISCAL YEAR Apnrl I to March 31 ABBREVIATIONS DGS&D Directoratc General of Supply and Disposal DEA Department of Economic Affairs EDC EcodeNelopment Committee GEF Global Environment Facilitv GOI Government of India GOS State Government ICB International Competitive Bidding IDA International Development Association JFM Joint Forest Management MOEF Ministry of Environment and Forestry NCB National Competitive Bidding NGO Non-Governmental Organization NTFP Non-Timber Forest Product PA Protected Area PANMIA Protectcd Area Mutual Impact Assessment PPF Project Preparation Facility PTO Project Tiger Office PRA Participatory Rural Appraisal SFD State Forest Department SOE Statement of Expenses TOR Terms of Refercnce TR Tiger Resenre UNDP United National Development Program  Staff Appraisal Report INDIA: ECODEVELOPMENT PROJECT Table of Contents 1. Background I 1.1 Extent and Status of Biodiversity 1 1.2 Government Policy 2 1.3 Ecodevelopment Strategy 3 1.4 Existing Institutional Responsibilities, Capacity, and Coordination 4 1.5 Lessons from Other Projects 5 1.6 Project Preparation Process 5 2. The Project 7 2.1 Rationale for GEF and IDA Funding 7 2.2 Project Areas and Participants 7 2.3 Project Objectives 9 2.4 Summary of Project Content 8 2.5 Detailed Features 9 3. Project Costs and Financing 17 3. 1 Project Cost Estimates 17 3.2 Financing Plan 18 3.3 Procurement 19 3.4 Disbursements 22 3.5 Accounts and Audit 23 4. Project Implementation 25 4.1 Staffing and Organizational Structure 25 4.2 Flow of Funds and Work Plans 27 4.3 Project Performance Review 29 5. Project Impacts and Justification 31 5.1 Benefits and Outputs 31 5.2 Environmental Impact 31 5.3 Social Impact 32 5.4 Sustainability 33 5.5 Risks 34 6. Assurances and Recommendations 35 This report is based on participatory preparation work performed by local people, state and national government officials, NGOs staff, and researchers. It reflects a project that is Indian in conceptualization and design, as appraised by a mission comprised of Jessica Mott (Task Manager), Jose Furtado, Malcolm Jansen, and Ajith Kumar (Environmental Specialists), Gordon Temple (Economist), V.P.S. Verma (Forester), Gabriel Campbell and Nandita Jain (Social Scientists), and M.S.S. Varadan (Institutional Specialist). Chona Cruz (Social Scientist) drafted Annex 4. Theodosia Karmiris, Padma Gopalan, and H. Bhavani provided secretarial support. Jenepher Moseley provided editorial assistance. The peer reviewers were Narpat Jodha (Social and Economic Issues), Gisu Mohadjer (Project Management) and Susan Shen (Environment). The GEF external technical reviewers were Thomas Mathew (WWF-USA) and Amy Vedder (NYZS Wildlife Conservation Society). Shawki Barghouti (Division Chief, SA2AW) and Heinz Vergin (Director, SA2DR) provided managerial oversight.  Staff Appraisal Report Annexes I. Biodiversity Conservation Strategy and Legislation in India 39 2. Current Organizational Structure and Capacity 47 3. Lessons Learned From Other Projects 59 4. Notes on Project Preparation Process 63 5. Rationale for GEF Funding and Incremental Costs of Biodiversity Conservation 75 6. Background on the Seven Protected Areas 80 7. Improved PA Management 101 8. Village Ecodevelopment 117 9. Environmental Education and Visitor Management 143 10. Impact Monitoring and Research on Issues Relevant to PA Management and Ecodevelopment 151 11. Project Management Component 173 12. Preparation of Future Biodiversity Projects 193 13. Summary Project Cost Tables 203 14. Procurement and Disbursement 211 15. Project Administration 221 16. Project Performance Review and Implementation Schedule 231 17. Environmental Analysis 247 18. Social Assessment 255 19. Indigenous People: Compliance with Bank Operational Directive 4.20: 279 20. People in the Protected Areas and Voluntary Relocation 281 21. Economic Analysis 291 22. Documents Available in Project File 299 Maps (a) Buxa, West Bengal -- IBRD Map 27842 (b) Gir, Gujarat -- IBRD Map 27843 (c) Nagarhole, Karnataka -- IEBRD Map 27844 (d) Palamau, Bihar -- IBRD Map 27845 (e) Pench, Madhya Pradesh -- IBRD Map 27846 (f) Periyar, Kerala -- IBRD Map 27847 (g) Ranthambhore, Rajasthan -- IBRD Map 27848 Vice President: D. Joseph Wood Director: Heinz Vergin Division Chief: Shawki Barghouti Task Manager: Jessica Mott  Staff Appraisal Report INDIA ECODEVELOPMENT PROJECT CREDIT, GRANT, AND PROJECT SUMMARY Borrower: India, Acting by its President Implementing GOI Ministry of Environment and Forestry and State Forest Agencies: Departments of Bihar, Gujarat, Kamataka, Kerala, Madhya Pradesh, Rajasthan, and West Bengal Beneficiaries: Globally important protected area ecosystems and people in and around these areas Credit Amount: IDA Credit of SDR 19.5 million (US$28 rnillion equivalent) Terms: Standard, with 35 years maturity Fund Advance From GOI to state governments as part of centrally sponsored Terms: assistance through MOEF to the states for development assistance on standard terms and conditions applicable at the time. Grant Amount: GET Grant of SDR 13.9 million (US$20 million equivalent) Terms: Grant Poverty Program of Targeted Interventions Category: The project's human beneficiaries, tribal peoples and forest fringe villagers, belong to the poorest sections of society. Tribal development concerns are central to the project. They are addressed in an integral fashion under the rubric of social impact, participation, and equity, rather than as a subsidiary tribal development plan or component. The project also incorporates specific measures to safeguard the interests of the landless and women, through participation in village committees, employment preference, and ongoing social assessment review and other monitoring. Environment Category: Program of Targeted Interventions - globally significant biodiversity GEF and IDA are financing mutually dependent activities and therefore this document is intended to meet both GEF and IDA processing requirements. 2 The Global Environment Trust (GET) is the legal entity that provides Global Environment Facility (GEF) grants.  Staff Appraisal Report ii Project The project would conserve biodiversity in seven globally significant Description: protected areas (PAs) using ecodevelopment. This is a strategy to increase collaboration between local people and government managers of PAs, as well as to otherwise improve PA management. The project would also include support for preparing future biodiversity projects. The project has five basic objectives: (a) Improved PA management, through strengthened capacity to conserve biodiversity and increased opportunities for local participation in PA management activities and decisions. Activities include (i) improving PA planning processes and building capacity, (ii) protecting and managing ecosystems and habitats, and (iii) upgrading PA amenities for field staff (b) Village ecodevelopment to reduce negative impacts of local people on PAs, reduce negative impacts of PAs on local people, and increase collaboration of local people in conservation efforts. Activities would include: (i) participatory microplanning and providing implementation support, (ii) reciprocal commitments to foster altemative livelihoods and resource uses, and (iii) special programs: additional joint forest management support, voluntary relocation options; and supplemental investments that benefit PA biodiversity conservation and people in and around the PAs. (c) Development of more effective and extensive support for PA management and ecodevelopment through (i) environmental education and visitor management and (ii) impact monitoring and research to improve understanding of issues and solutions relevant to PA management and interactions between PAs and people. (d) Overall project management, including effective project administration, implementation guidelines, implementation reviews, policy and strategic framework studies, and publicity. (e) Preparation of future biodiversity projects including additional ecodevelopment, biodiversity information, and ex-situ conservation. Rate of Return: Not applicable. Benefits: The project would conserve globally significant biodiversity in the seven PAs by slowing, halting, or possibly even reversing declines in the richness, complexity, diversity, connectivity, and regeneration of ecosystems and species. The project would increase the capacity of government officials to manage PAs effectively, addressing not only internal operations but also proposed and existing periphery and regional activities that impact the PAs. It would increase local people's support for and role in PA conservation. It would create  Staff Appraisal Report iii organizational processes that could be expanded to other ecologically significant areas. More specifically, the project would: (a) broaden the focus of PA management planning, restore ecosystems, improve fire and poaching control, and improve staff efficiency and effectiveness; (b) enable communities to meet their needs in an environmentally sustainable manner, reduce unsustainable uses of PA resources, offset negative economic and cultural impacts of PAs on local communities, and resolve conflicts (c) provide a firmer base of public support for PAs and increase understanding of PA biodiversity, local people, and their interactions; (d) provide the technical review and administrative and financial services necessary for quality control, accountability, adaptive management, improvement of the long-term framework, dissemination, integration, and overall timeliness of project implementation. (e) produce a portfolio of biodiversity project proposals eligible for GEF, IDA, and other donor consideration. Risks: Risks are high because the project will be supporting an innovative program. Although it is not possible to fully address problems of population growth, poverty, and commercial interests, the project includes activities, institutional mechanisms, and a legal covenant designed to address regional issues. To reduce the risk of the project being blamed by association for negative trends and unmet needs, it would promote realistic expections through monitoring benchmarks and by emphasizing "reduction" not "elimination" of negative impacts To encourage government commitment to participation, the project would allocate financing according to a continuing review of work plans and progress reports and avoid a blueprint approach. To facilitate a gradual increase in trust of local communities, the project would use participatory planning processes. To address limitations in the supply of technical and management expertise, the project design involves extensive use of third party contracts (mostly NGOs). To address inexperience, detailed documentation is providing guidance on project processes.  Staff Appraisal Report iv Estimated Project Costs (Rs. Lakh) (USS '900) % % Total Foreign Base Local Foreign Total Local Foreign Total Exchange Costs A. InWroved PA Maiagement Planning Proesee 367.2 1.1 3683 1,046.1 3.2 1,049.3 - 2 Ecoeystem Protection and Management 3,644.1 490.5 4,134.6 10,382.2 1,397.4 11,779.5 12 19 AmenfteforFieldStof 342.1 38.0 380.1 9746 1083 1,082.9 10 2 Subt'al 4,353.4 529.6 4,883.0 12,402.9 1,5089 13,911 7 11 22 B. Vilag Ecodevelopment ParIcipatery MAcro-Plrnning and Implementaion Support 1,681.7 1192 1,801.0 4,791 3 3397 5.131 0 7 8 In.tmentstoImpiementReciprwalCCommitmwits 7,703.7 405.5 8,109.2 21,948 0 1,155 2 23,1031 5 37 Specal Programs 1,868.2 94.4 1,962.6 5,322.5 268.9 5,591.4 5 9 Subtotal 11,253.7 619.1 11,8727 32,061.7 1,763.8 33,825.5 5 55 C. Oevelop Effective and Extensive Support for Ecodnvelopment Conduct Envircnmentai Education and Awarenee Campqgne 3169 78.0 394.9 902.9 222.1 1,125.1 20 2 Imprwe Impact Monicirng and Resach Systems 1,188.7 72.8 1,259.6 3,380.9 207.5 3,588.5 6 6 Subtol 1,503.6 150.8 1,6545 4,283.9 429.6 4,713.5 9 8 D.Project Mnagemn nt 1.784.8 67.4 1,852.2 5,084.8 192.0 5,276.8 4 9 E.Prepr Future lodlversttyProniet 573.1 245.6 818.8 1,632.8 699.8 2,332.6 30 4 F. frinbunsmentofPPF 859.9 42.1 702.0 1,880.0 120.0 2,000.0 6 3 Total EELINE COSTS 20.128 5 1,654.6 21,783 1 57,346.1 4,714.1 62,060.2 8 100 Phyicai Contingencies 567.4 57.9 625.3 1.616 5 165 0 1,781.5 9 3 Price Contingercies 5,939.6 530.4 6,470 0 2,774.5 383.8 3,158 3 - - TotaIlPROJECTCOSTS 26,6355 2,243.0 28,878.5 61,737.1 5,262.9 67,000.0 8 108 Financing Plan (US$'OOO) lntemaUonal Development Project State Government of Aseoc_oflo IP Trust Baneficlarles Government India Totsl Amount Amount Amount Amount Amount Amount % A. Improved PA Management Planning Proeeee 562.1 562.1 - 9.0 47 1,137 8 1.7 EceyslmrPr P.cton andManspemrnt 2,910.2 2,910.2 - 5,709.1 1,409 2 12,938.7 193 AmenieeforF;iedStdf 491.8 491.8 - - 2459 1,2295 1.8 Sub' 3,984.0 3,9f4.0 5 5,718.1 1,659.8 15,306.0 228 B. Vilkge Ecodevelopment Parlciperory Micro-Ptnning and Impemientabn Support 1,7018 1,667.1 2,050.4 214.9 5,6343 84 InvestmentstolmplintRecpowciCotmnte 10,019.8 7,395.1 4,5858 - 2,459.1 24,4598 36.5 Specil Proanrms 3,019.8 2,20 - - 7113 5,9916 8.9 Subtot 14,741.4 11,322.7 4,585 8 2,050.4 3.385 3 36,085.7 53.9 C. Devebp Etheliv and Extensive Support for ceodevepoent Conduct En*wrmmental Education and Avrenee Campelgns 501.1 501 1 - 98 5 157 9 1,258.7 1.9 Impn Impact Monitcing and Reerch Syrte 1,813.9 1,813.9- 204.5 103.2 3,93ss S9 Subotaw 2,315.0 2,3150 - 303.0 261.2 5.1942 78 D. Project Managment 2,398.2 2,3982 - 986.4 50.1 5,832.8 8.7 E. Prepore Puture 1lodlversty Projects 2,581.4 * - - - 2,581.4 39 F. Reimbureat ofmsn 2,000.0 20 *3 - -30 TotelDbibursement 28,000.0 20,000.0 4,585s8 9,0579 5.3564 67,0000 1000 Estimated IDA and GEF Disbursements (US$ millions) FY97 FY9B FY93 FY00 FY01 FY02 Annual IDA 0.6 2.5 5.3 8.1 6.7 4.8 Curmutive IDA 0.6 3.1 8.4 16.5 23.2 28.0 Annual GET 0.0 1.8 4.0 5.2 5.8 3.2 Cumulative GET 0.0 1.8 5.8 11.0 16.8 20.0  Staff Appraisal Report INDIA ECODEVELOPMENT PROJECT 1. Background A. Extent and Status of Biodiversity 1.1 Biological Significance. India's biodiversity is rich, often unique and increasingly endangered. India is one of the twelve megadiversity countries in the world, that collectively account for 60-70 percent of the world's biodiversity. Its ten biogeographic zones represent a broad range of ecosystems. India has 6% of the world's flowering plant species and 14% of the world's birds. There are over 45,000 identified plant species. One- third of its 15,000 flowering plants are found only in India. It has 81,000 identified species of animals. Some 14% of its 1,228 bird species, 32% of its 446 reptile species and 62% of its 204 amphibians are unique to India. The endangerment of some ten percent of all plant species and over 21% of the 372 mammal species indicates a widespread degradation of ecosystems that has significant economic implications. 1.2 Economic Importance. India's biological resources are economically important, both globally and nationally. As one of the oldest and largest agricultural societies, India has an impressive diversity of crop species and varieties. At least 166 species of crop plants and 320 species of wild relatives of cultivated crops originate on the subcontinent. About 90% of all medicines in India come from plant species, many of which are harvested in the wild. Medicinal plants and other non-timber forest products are particularly important as a source of income and subsistence for tribal populations. Closed primary forests, which cover about 21 million hectares, or six percent of the total land area, and one-third of the total forest area, have been an important source of timber and fuelwood. Natural ecosystems strongly influence natural resource development (agriculture, livestock, forestry and fishery sectors contributed 32% of GDP in 1992/3), provide new commercial products (e.g., pharmaceuticals) and also affect water resource management, which is important not only for agriculture but also for industrial and municipal development. 1.3 Protected Areas. India has 75 parks and 421 sanctuaries, covering some 14 million hectares (i.e., 4.3 percent of the total land area). Most of these areas received protection status relatively recently; there were only 10 parks and 127 sanctuaries in 1970. Selected high priority parks and sanctuaries, sometimes in combination with contiguous reserve forest areas are managed as tiger and elephant reserves. ). Some protected areas (PAs) have few or no human inhabitants, while others have small communities with significant human populations in the aggregate. Village economies on the peripheries of these protected areas are based on long-established sedentary agricultural systems. 1.4 Pressures. The biodiversity in India's forest, grassland, wetland and marine ecosystems faces many pressures. These include grazing cattle, cutting of trees for fuel, and timber, gathering of non-timber forest products, hunting, uncontrolled fires, and conversion for and spillover from agricultural, infrastructure, industrial, and commercial  Staff Appraisal Report 2 development (e.g., pollution, siltation, and weed infestation). India's high levels of human population density and growth, high incidence of poverty, and large numbers of livestock speed the degradation. Local people, when traditional rights and access are limited by the establishment of PAs, often have little incentive to use natural resources in a sustainable way. B. Govemment Policy 1.5 India's forest and environmental policies, plans, and actions reflect a significant, continuing commitment to biodiversity conservation. Annex I provides a detailed overview of these policies and related legislation 1.6 Convention on Biological Diversity. The Government of India has ratified the Convention and taken recent policy and program initiatives corresponding to Convention aims. These are to reconcile the need for conservation with the concern for development and give careful consideration to equity and shared responsibility. Ministry of Environment and Forestry (MOEF) is identifying further actions required by the Convention. 1.7 Biodiversity in Action Plans and Policy Statements. The Government's plans and policies reflect its strong commitment to conserve and sustainably use biodiversity. The 1988 National Forest Policy treats forests as: (a) an ecological necessity, (b) a source of goods for use by local populations, and (c) a source of wood and other products for industries and other non-local users. India's Environmental Action Plan, published in 1993, lists "conservation of and sustainable utilization of biodiversity in selected ecosystems" as one of the top seven priorities for future action, and specifically cites ecodevelopment. The National Wildlife Action Plan (1983) identified the following goals: (a) Establishing a representative network of protected areas (b) Developing appropriate management systems for protected areas, with due regard for the needs of local people and ensuring their support and involvement (c) Protecting biodiversity within multiple-use areas, and (d) Extending conservation efforts beyond protected areas. In 1988, the Wildlife Institute of India produced a biogeographic classification for conservation planning and formulated a plan for a revised network of protected areas. 1.8 Interaction Between Protected Areas and Local People. In the past twenty years, state governments, with national assistance, have developed an extensive network of PAs strongly enforced by forest departments. During this period, governments' approach to local people has sometimes been confrontational with significant impacts, mostly negative, on the tribal populations resident within protected areas. There is a long history of communities, especially tribal groups, inhabiting or using forests that were subsequently designated as PAs. Local people were involved (usually without government recognition or sanction) in managing the forest and wildlife. Increasing government protection and legal control have curtailed local communities' resource use and management, forced changes in traditional livelihoods, and removed incentives to use resources sustainably. Forest department employment opportunities have also shrunk with the establishment of PAs and the ban on timber harvesting in most forest areas.  Staff Appraisal Report 3 1.9 Community Participation in Forest Management. Now the Government is recognizing the historic, current, and potential role of local communities. The initial government effort to increase community participation was focused not on protected areas, but rather on forests officially designated for local or commercial harvest. Through this effort, called joint forest management (JFM), decision-making authority and responsibility for control over forest lands and their products are shared between forest departments and local user groups. Agreements specify the distribution of authority, responsibility, and benefits. Initiated in the 1970s, early success led to expansion of JFM programs throughout India. Several now receive support through Bank-funded state forestry projects. C. Ecodevelopment Strategy 1.10 Definition of Ecodevelopment. In response to pressures on protected areas, the Government is now beginning to address the special issues regarding participatory management of protected areas through a strategy of ecodevelopment. The strategy aims to conserve biodiversity by addressing both the impact of local people on the protected areas and the impact of the protected areas on local people Ecodevelopment thus has two main thrusts: improvement of PA management and involvement of local people. In doing so it seeks to improve the capacity of PA management to conserve biodiversity effectively, to involve local people in PA planning and protection, to develop incentives for conservation, and to support sustainable alternatives to harmful use of resources. It supports collaboration between the state forest departments and local communities in and around ecologically valuable areas. Ecodevelopment addresses the welfare and behavior of local people and integrates these concerns into management of protected areas. It also builds private-sector stakeholder support for conservation among NGOs, nature tour operators, and the general public. 1.11 Existing Ecodevelopment Programs. To date, programs for supporting PA/local community linkages have been limited and small scale. In recent years, using domestic financing, the Ministry of Environment and Forestry (MOEF) has initiated a centrally sponsored scheme with an annual average value of about US$1 million that is distributed to dozens of PAs. The Bank has financed five forestry projects with biodiversity conservation components that include village ecodevelopment investments associated with protected areas. Implementation of these ecodevelopment programs is only beginning. Nevertheless, the design of the Ecodevelopment Project has already built on the conceptualization and participatory planning of the earlier programs. The specialized attention that preparation of the Ecodevelopment Project has received has already produced detailed written guidelines that are being applied to programs already in progress. 1.12 Potential Scope of Ecodevelopment. Should this project prove it to be feasible, ecodevelopment potentially might benefit 100-200 PAs. As a next step, the Government is seeking support for an experimental demonstration and capacity-building project that would build on and integrate existing experience, would be large enough to establish the feasibility of ecodevelopment in a variety of situations, and would provide for expansion in the long term. As a national project, such an undertaking would have the potential to address multi-state ecodevelopment issues and management processes and to establish a basis for programmatic financing. Proceeding now with a limited version of such a project  Staff Appraisal Report 4 is justified by the extent and urgency of human pressures on protected areas. Incorporating full-scale ecodevelopment at a large number of sites at this time would not be appropriate, given the complexity of issues, lack of implementation experience, and amount of participatory preparation required. D. Existing Institutional Responsibilities, Capacity and Coordination 1.13 Protected Area Management. State and national governments take their responsibility for PA management seriously and professionally, and have assigned significant numbers of staff. The national Project Tiger scheme, for example, supplements state support in 21 PAs by providing incentives to staff and by compensating local people for animal depredation. Although funding for PA management has been limited, it has been more adequate than in most developing countries. Management plans exist for all seven project PAs and cover an implementation period of 5 to 10 years, but most of these plans need updating in the next few years, and management skills of PA staff need improvement. In addition, PA management activities need to be better integrated into the broader ecological, sociological, and regional sphere. In many Indian PAs, humans have already modified the environment so much that the remaining species and ecological communities need carefully planned human intervention in order to survive. 1.14 Village Ecodevelopment. In existing programs, the linkage between village ecodevelopment investments and conservation actions has generally been implicit rather than explicit, through reciprocal commitments. Government initiatives have usually employed traditional top-down approaches to project planning and implementation, even when the programs have embraced the principle of a more participatory approach. Detailed guidance on participatory processes has been lacking. Some forest department staff have experience relevant to village ecodevelopment based on their work with past and ongoing joint forest management and social forestry programs. Training programs are now being designed to apply this expertise to PA-oriented ecodevelopment microplanning. NGOs also have extensive capacity and experience in fostering community participation. PA authorities have begun to forge links with NGOs but these links generally have relied on informal arrangements rather than formal contracts. 1.15 Environmental Education. PA awareness and education programs have mainly consisted of the construction of an interpretation center for visitors and the preparation of posters or leaflets. 1.16 Monitoring and Research. Monitoring in PAs has focused on large mammals. There is room for improvement in both the methodological design of existing activities and the breadth of focus. Research institutions and individuals have conducted a number of studies and inventories of flora and fauna. This research has contributed to redefinition of PA boundaries, the establishment of new PAs, and recognition of the need for increased policing, but additional research is needed to improve the understanding of other issues relevant to PA management. PAs lack the facilities, equipment, and personnel to undertake research themselves. 1.17 Annex 2 provides further analysis of the existing organizational structure and capacity.  Staff Appraisal Report 5 E. Lessons from Other Projects 1.18 Conservation, forestry, rural/urban development, and multi-state projects have all provided lessons that highlight the importance of: (a) Linkage between economic investments and conservation (b) Building understanding and consensus on project concept (c) Maintaining project size within realistic, achievable limits (d) Involving disadvantaged groups in participatory resource management (e) Using contractual agreements between government entities and local communities (f) Assessing incentives for beneficiaries (g) Avoiding numerical physical output targets and top-down planning (h) Using participatory rural appraisal (PRA) exercises and cost sharing arrangements to increase ownership, appropriateness, and sustainability of investments (i) Using existing organizational structures and skilled specialists (j) Developing transparent and verifiable monitoring to ensure accountability (k) Disbursing funds to states in response to past performance and to work plans that meet clear criteria (I) Specifying a clear identity and mandate, designated full-time staff, and adequately delegated financial and administrative powers for the central coordinating unit. Annex 3 provides a further summary of lessons learned. F. Project Preparation Process 1.19 Site Selection Criteria. In consultation with NGOs and state governments, MOEF selected project PAs from a list of areas where the threats to biodiversity stem from local rural dependencies. Selection criteria comprised biodiversity importance, biogeographic representation and likelihood of success. The success factor took into account the extent of human pressures, PA management capacity, existing infrastructure (which accounts for six of the eight sites being tiger reserves), accessibility, state and national government support and state government responsiveness to community and NGO involvement in forest management. 1.20 Exclusion of Similipal Tiger Reserve in Orissa. The 1994 government proposal was for eight sites, but the Bank reduced the project scope to seven sites by excluding the Similipal Tiger Reserve in Orissa, without prejudice to future considerations. The Bank received documentation on relocation plans and activities in Similipal, but this did not confirm that all relocation after preappraisal had been and could in the future be consistent with the project strategy for people in the PAs. The Bank was particularly concerned that relocation be voluntary and be consistent with the best practices outlined in the Bank's operational directives.  Staff Appraisal Report 2 development (e.g., pollution, siltation, and weed infestation). India's high levels of human population density and growth, high incidence of poverty, and large numbers of livestock speed the degradation. Local people, when traditional rights and access are limited by the establishment of PAs, often have little incentive to use natural resources in a sustainable way. B. Government Policy 1.5 India's forest and environmental policies, plans, and actions reflect a significant, continuing commitment to biodiversity conservation. Annex 1 provides a detailed overview of these policies and related legislation 1.6 Convention on Biological Diversity. The Government of India has ratified the Convention and taken recent policy and program initiatives corresponding to Convention aims. These are to reconcile the need for conservation with the concern for development and give careful consideration to equity and shared responsibility. Ministry of Environment and Forestry (MOEF) is identifying further actions required by the Convention. 1.7 Biodiversity in Action Plans and Policy Statements. The Government's plans and policies reflect its strong commitment to conserve and sustainably use biodiversity. The 1988 National Forest Policy treats forests as: (a) an ecological necessity, (b) a source of goods for use by local populations, and (c) a source of wood and other products for industries and other non-local users. India's Environmental Action Plan, published in 1993, lists "conservation of and sustainable utilization of biodiversity in selected ecosystems" as one of the top seven priorities for future action, and specifically cites ecodevelopment. The National Wildlife Action Plan (1983) identified the following goals: (a) Establishing a representative network of protected areas (b) Developing appropriate management systems for protected areas, with due regard for the needs of local people and ensuring their support and involvement (c) Protecting biodiversity within multiple-use areas, and (d) Extending conservation efforts beyond protected areas. In 1988, the Wildlife Institute of India produced a biogeographic classification for conservation planning and formulated a plan for a revised network of protected areas. 1.8 Interaction Between Protected Areas and Local People. In the past twenty years, state governments, with national assistance, have developed an extensive network of PAs strongly enforced by forest departments. During this period, governments' approach to local people has sometimes been confrontational with significant impacts, mostly negative, on the tribal populations resident within protected areas. There is a long history of communities, especially tribal groups, inhabiting or using forests that were subsequently designated as PAs. Local people were involved (usually without government recognition or sanction) in managing the forest and wildlife. Increasing government protection and legal control have curtailed local communities' resource use and management, forced changes in traditional livelihoods, and removed incentives to use resources sustainably. Forest department employment opportunities have also shrunk with the establishment of PAs and the ban on timber harvesting in most forest areas.  Staff Appraisal Report 3 1.9 Community Participation in Forest Management. Now the Government is recognizing the historic, current, and potential role of local communities. The initial government effort to increase community participation was focused not on protected areas, but rather on forests officially designated for local or commercial harvest. Through this effort, called joint forest management (JFM), decision-making authority and responsibility for control over forest lands and their products are shared between forest departments and local user groups. Agreements specify the distribution of authority, responsibility, and benefits. Initiated in the 1970s, early success led to expansion of JFM programs throughout India. Several now receive support through Bank-funded state forestry projects. C. Ecodevelopment Strategy 1.10 Definition of Ecodevelopment. In response to pressures on protected areas, the Government is now beginning to address the special issues regarding participatory management of protected areas through a strategy of ecodevelopment. The strategy aims to conserve biodiversity by addressing both the impact of local people on the protected areas and the impact of the protected areas on local people. Ecodevelopment thus has two main thrusts: improvement of PA management and involvement of local people. In doing so it seeks to improve the capacity of PA management to conserve biodiversity effectively, to involve local people in PA planning and protection, to develop incentives for conservation, and to support sustainable alternatives to harmful use of resources. It supports collaboration between the state forest departments and local communities in and around ecologically valuable areas. Ecodevelopment addresses the welfare and behavior of local people and integrates these concerns into management of protected areas. It also builds private-sector stakeholder support for conservation among NGOs, nature tour operators, and the general public. 1.11 Existing Ecodevelopment Programs. To date, programs for supporting PA/local community linkages have been limited and small scale. In recent years, using domestic financing, the Ministry of Environment and Forestry (MOEF) has initiated a centrally sponsored scheme with an annual average value of about US$1 million that is distributed to dozens of PAs. The Bank has financed five forestry projects with biodiversity conservation components that include village ecodevelopment investments associated with protected areas. Implementation of these ecodevelopment programs is only beginning. Nevertheless, the design of the Ecodevelopment Project has already built on the conceptualization and participatory planning of the earlier programs. The specialized attention that preparation of the Ecodevelopment Project has received has already produced detailed written guidelines that are being applied to programs already in progress. 1.12 Potential Scope of Ecodevelopment. Should this project prove it to be feasible, ecodevelopment potentially might benefit 100-200 PAs. As a next step, the Government is seeking support for an experimental demonstration and capacity-building project that would build on and integrate existing experience, would be large enough to establish the feasibility of ecodevelopment in a variety of situations, and would provide for expansion in the long term. As a national project, such an undertaking would have the potential to address multi-state ecodevelopment issues and management processes and to establish a basis for programmatic financing. Proceeding now with a limited version of such a project  Staff Appraisal Report 4 is justified by the extent and urgency of human pressures on protected areas. Incorporating full-scale ecodevelopment at a large number of sites at this time would not be appropriate, given the complexity of issues, lack of implementation experience, and amount of participatory preparation required. D. Existing Institutional Responsibilities, Capacity and Coordination 1.13 Protected Area Management. State and national governments take their responsibility for PA management seriously and professionally, and have assigned significant numbers of staff. The national Project Tiger scheme, for example, supplements state support in 21 PAs by providing incentives to staff and by compensating local people for animal depredation. Although funding for PA management has been limited, it has been more adequate than in most developing countries. Management plans exist for all seven project PAs and cover an implementation period of 5 to 10 years, but most of these plans need updating in the next few years, and management skills of PA staff need improvement. In addition, PA management activities need to be better integrated into the broader ecological, sociological, and regional sphere. In many Indian PAs, humans have already modified the environment so much that the remaining species and ecological communities need carefully planned human intervention in order to survive. 1.14 Village Ecodevelopment. In existing programs, the linkage between village ecodevelopment investments and conservation actions has generally been implicit rather than explicit, through reciprocal commitments. Government initiatives have usually employed traditional top-down approaches to project planning and implementation, even when the programs have embraced the principle of a more participatory approach. Detailed guidance on participatory processes has been lacking. Some forest department staff have experience relevant to village ecodevelopment based on their work with past and ongoing joint forest management and social forestry programs. Training programs are now being designed to apply this expertise to PA-oriented ecodevelopment microplanning. NGOs also have extensive capacity and experience in fostering community participation. PA authorities have begun to forge links with NGOs but these links generally have relied on informal arrangements rather than formal contracts. 1.15 Environmental Education. PA awareness and education programs have mainly consisted of the construction of an interpretation center for visitors and the preparation of posters or leaflets. 1.16 Monitoring and Research. Monitoring in PAs has focused on large mammals. There is room for improvement in both the methodological design of existing activities and the breadth of focus. Research institutions and individuals have conducted a number of studies and inventories of flora and fauna. This research has contributed to redefinition of PA boundaries, the establishment of new PAs, and recognition of the need for increased policing, but additional research is needed to improve the understanding of other issues relevant to PA management. PAs lack the facilities, equipment, and personnel to undertake research themselves. 1.17 Annex 2 provides further analysis of the existing organizational structure and capacity.  Staff Appraisal Report 5 E. Lessons from Other Projects 1.18 Conservation, forestry, rural/urban development, and multi-state projects have all provided lessons that highlight the importance of: (a) Linkage between economic investments and conservation (b) Building understanding and consensus on project concept (c) Maintaining project size within realistic, achievable limits (d) Involving disadvantaged groups in participatory resource management (e) Using contractual agreements between govermnent entities and local communities (f) Assessing incentives for beneficiaries (g) Avoiding numerical physical output targets and top-down planning (h) Using participatory rural appraisal (PRA) exercises and cost sharing arrangements to increase ownership, appropriateness, and sustainability of investments (i) Using existing organizational structures and skilled specialists (j) Developing transparent and verifiable monitoring to ensure accountability (k) Disbursing funds to states in response to past performance and to work plans that meet clear criteria (l) Specifying a clear identity and mandate, designated full-time staff, and adequately delegated financial and administrative powers for the central coordinating unit. Annex 3 provides a further summary of lessons learned. F. Project Preparation Process 1.19 Site Selection Criteria. In consultation with NGOs and state governments, MOEF selected project PAs from a list of areas where the threats to biodiversity stem from local rural dependencies. Selection criteria comprised biodiversity importance, biogeographic representation and likelihood of success. The success factor took into account the extent of human pressures, PA management capacity, existing infrastructure (which accounts for six of the eight sites being tiger reserves), accessibility, state and national government support and state government responsiveness to community and NGO involvement in forest management. 1.20 Exclusion of Similipal Tiger Reserve in Orissa. The 1994 government proposal was for eight sites, but the Bank reduced the project scope to seven sites by excluding the Similipal Tiger Reserve in Orissa, without prejudice to future considerations. The Bank received documentation on relocation plans and activities in Similipal, but this did not confirm that all relocation after preappraisal had been and could in the future be consistent with the project strategy for people in the PAs. The Bank was particularly concerned that relocation be voluntary and be consistent with the best practices outlined in the Bank's operational directives.  Staff Appraisal Report 6 1.21 Participatory Preparation Process. Preparation for the project has emphasized client ownership, local participation and public involvement (e.g., information dissemination, consultations). MOEF prepared the project with the assistance of professional institutes, NGOs and state forestry departments and financing from the UNDP/GEF Preinvestment Facility. Bank staff and foreign consultants provided limited periodic comments and advice. The preparation incorporated technical papers from in- country experts, reviews of completed studies, and collections of available information (e.g. population censuses, ethnographies, scientific reports). It also applied participatory rural appraisal (PRA) techniques and indicative planning in an innovative way based on sample views of local people about biodiversity issues. Preparation was conducted by one NGO/professional institute as national coordinator, two professional ecological/wildlife institutes, four specialists as national consultants and twelve state-level NGOs. More than 40 conservation and rural development NGOs have participated in the NGO and public consultations. Preparation included 38 recorded meetings between March 1992 and May 1995 to discuss project design and work plans. There were 14 site visits to select the sites, four inter-state PRA training sessions, four state-level PRA training workshops, and eleven national consultation meetings. Annex 4 provides a more detailed description of the project preparation process. 1.22 Project Preparation Facility Advance. In January, 1995, in response to a request from GOI, the Bank provided a US$2 million Project Preparation Facility (PPF) Advance. The Department of Economic Affairs (DEA) countersigned the PPF agreement letter in March, 1995, but the flow of funds began only in December 1995. In order to meet the condition of appraisal by May, 1995, government agencies, NGOs, and other organizations that prepared essential reports spent their own resources in anticipation of eventual reimbursement by the PPF. In addition to providing funds for completing project design prior to project appraisal, the advance is expected to finance village ecodevelopment activities on a pilot basis, consultancies needed to develop detailed guidelines and arrangements, office equipment, training and workshops in preparation for project startup expected in October 1996. A portion of the International Development Association (IDA) credit would be used to refinance the advance. The initiation of negotiations of the Ecodevelopment Project was contingent on many actions associated with the PPF including guarantees that GOI and state governments had begun to implement the activities required for a timely and full-scale startup to the project and had demonstrated their capacity to meet project administration requirements. These actions are described in relevant sections of Chapters l1-V and summarized in Chapter VI. 3 Discussions with NGOs have revealed a range of perspectives, including constructive suggestions for design improvements and expressions of distrust of any activities receiving financial support from the Bank.  Staff Appraisal Report 7 II. The Project A. Rationale for GEF and IDA Funding 2.1 Rationale for GEF Involvement and Incremental Costs. The project is fully consistent with the Convention on Biological Diversity and the GEF Council guidance. The GOI has identified ecodevelopment as a national priority in the biodiversity action plans and policy statements (see paragraph 1.7). The project would address urgent global biodiversity conservation needs. The project would conserve biodiversity in seven critical areas, in a megadiversity country. One of the seven areas, Gir, has the world's only population of Asian lions. The other six project sites support vital populations of tigers, one of the world's most endangered carnivores. In combination, these sites give good biogeographic and habitat coverage (e.g., dry deciduous open forests, semi-evergreen forests, moist deciduous open forests and wet evergreen forests, in forest, semiarid, and mountain ecosystems). The level of threats to biodiversity in the seven sites is high and requires a substantial effort on an urgent basis. The analysis of incremental costs in accordance with GEF guidelines shows baseline costs of US$19 million and incremental costs of US$48 million, which would be financed by GEF and IDA. The Government of India realizes that, in view of the scale of external funding required, it cannot expect to receive a GEF grant sufficient to cover the entire incremental cost of the global alternative. However, it is so strongly committed to the objectives of the project that it is willing to borrow up to US$28 million of IDA resources to cover 58% of the incremental cost. A GEF grant of US$20 million would cover the remaining 42% of the incremental cost. Annex 5 further analyzes the rationale for GEF, including the calculation of incremental costs. 2.2 Country Assistance Strategy The Bank's Country Assistance Strategy (CAS) for India dated May 1995 explicitly encourages Bank and GEF financing of ecodevelopment as an important way for the Bank to support biodiversity conservation. The CAS mentions that such financing would build on the Bank's support for recent forestry projects. The project would also act on CAS concerns by enhancing participation, involving NGOs, and increasing women's role in managing productive resources. The project also would implement the new approaches to conservation outlined in the Bank's 1991 Forest Sector Policy. These approaches incorporate local people into PA management activities, benefit sharing, and planning, and emphasize consideration of the needs and welfare of forest- dwelling people. B. Project Areas and Participants 2.3 Biogeographical Features. The seven project areas would include protected areas (PAs) as well as villages in areas peripheral to the PA but within a 2 km. radius of the PA's boundary. Five of the seven PAs are tiger reserves, which generally comprise gazetted and proposed parks and sanctuaries, plus specified areas of reserve forests and tourism zones. There are two PAs that are not tiger reserves: Nagarhole, which is a Project Elephant reserve comprising a declared national park, and Gir, a declared national park that has the world's only wild population of asiatic lions. The total land area of the tiger reserves and national parks is 6714 sq. km., with 2014 sq. km. managed as core  Staff Appraisal Report 8 areas. Individual PAs range in size from 643 to 1412 sq. km., with core areas ranging from 192 to 393 sq. km. 2.4 Demographic Features. About 427,000 villagers would participate in the project; of these 89,000 currently live within the PAs (mostly in enclaves and other non-core parts of tiger reserves where human settlement is allowed). About 39% of the participants would be tribal. ). The number of participants range from 36,000 to 77,000 per PA. The project would cover as many of the people living within 2 km. of the PA boundaries as possible, within the limits of institutional capacity. The intensity of local people's impacts on the PA provided the basis to select specific participating villages. Most of the village ecodevelopment investments would take place in the periphery area. Annex 6 further describes the project areas. C. Project Objectives 2.5 The project would conserve biodiversity by implementing the ecodevelopment strategy in and around seven protected areas (PAs) and would also include support for preparing future biodiversity projects. The main objectives would be: (a) To improve capacity of PA management to conserve biodiversity and increase opportunities for local participation in PA management activities and decisions (b) To reduce negative impacts of local people on biodiversity, reduce negative impacts of PAs on local people, and increase collaboration of local people in conservation efforts (c) To develop more effective and extensive support for ecodevelopment (d) To ensure effective management of this project, and (e) To prepare future biodiversity projects. D. Summary of Project Content 2.6 The US$67 million project would be implemented over a five-year period from October 1996 through September 2001. The components correspond to the objectives listed above and comprise: (a) Improved PA management (US$14 mln. - 22 % of the base costs): (i) improving PA planning processes and building capacity (ii) protecting and managing ecosystems and habitats within the PA (iii) upgrading PA amenities for field staff (b) Village ecodevelopment (US$34 mln. - 55 % of the base costs) that reduces negative interactions of local people on biodiversity and increases collaboration of local people in conservation by: (i) conducting participatory microplanning and providing implementation support  Staff Appraisal Report 9 (ii) implementing reciprocal commitments that foster alternative livelihoods and resource uses to be financed by a village ecodevelopment program and that specify measurable actions by local people to improve conservation (iii) special programs for additional joint forest management, voluntary relocation, and supplemental investments for special needs (c) Education & awareness and impact monitoring & research (US$5 min. - 8 % of the base costs) that develops more effective and extensive support for PA ecodevelopment including: (i) promoting public support for conservation through environmental education and awareness campaigns (ii) impact monitoring and research to improve understanding of issues and solutions relevant to PA management and interactions between PAs and people (d) Overallproject management (US$5 mln. 9 % of the base costs): (e) Preparation offuture biodiversity projects (US$2 mln. - 4 % of the base costs): (i) Second Ecodevelopment Project (ii) Biodiversity Information Project (iii) Ex-situ Conservation Project, and (f) Reimbursement of the Project Preparation Facility (US$2 min. - 3 % of the base costs). E. Detailed Features Improved PA Management 2.7 Improving PA Planning Processes and Building Capacity. The improved planning processes and capacity building would use specialist advice, studies, workshops, associated travel costs, and training containing two main parts: (a) To strengthen PA management plans and the capacity to implement the plans (i) a two year updating process and skill building process would: * update PA management plans in conformity with current guidelines * incorporate ecological considerations, including boundary rationalization, buffer forest land management, and broadening the focus of the plan to cover ecosystems in addition to species  Staff Appraisal Report 10 introduce processes and arrangements to broaden participation and cooperation of local people and outside groups, including increasing consultation, and developing benefit sharing arrangements for PA byproducts and enterprises develop PA-specific financial sustainability strategies incorporate initiatives supported under other project components (e.g., village ecodevelopment, environmental education strategies, research strategies, etc.). (ii) the component would also include support throughout the project for training in PA management skills. (b) To incorporate PA concerns into regional planning and regulation, which would involve. (i) early identification and assessment of existing and proposed activities outside the scope of the project that might potentially undermine effective biodiversity conservation of the PAs or undermine implementation of the ecodevelopment strategy in and around the PAs and (ii) strengthening the capacity for environmental site clearance and monitoring of non-project activities using existing environmental protection regulations and agreed best practice for environmental assessment and resettlement. 2.8 Protecting and Managing Ecosystems and Habitats. During project preparation, the PA authorities developed an indicative list of activities based on existing plans and available information. The scope and nature of these activities differ from PA to PA and in most cases would be very site specific. The broad categories of activities are: (a) Ecosystem and habitat restoration and (b) Improving fire, poaching, and animal control. These activities would require inputs of restoration and control works, associated supervision, communications equipment, a limited number of vehicles and boats, minor access track improvements, fire watch towers, sign boards, boundary markers, and other works and goods in accordance with recommendations of the PA management plans. The updated PA management plans described above, once completed and cleared by the Bank, would determine the specific content of investments in this subcomponent. However, some investments in ecosystem protection and management would be required prior to the likely completion of the PA management plan updating. In order to ensure that activities implemented in the interim are sound and do not have a negative impact on biodiversity and the environment, PA officials would demonstrate prior to implementation that the activities would (a) conserve biodiversity; (b) be urgently needed; (c) not foreclose options being considered for the updated PA management plans; (d) be consistent with existing PA management plans; (e) be technically feasible; (f) not erode customary tenure rights of tribals, and (g) be environmentally sustainable.  Staff Appraisal Report 11 2.9 Annex 7 describes details of the improved PA management planning processes, clearance requirements, technical assistance, and training. Assurances were obtained at negotiations that planning and implementation of the ecosystem protection and management investments would be in accordance with guidance agreed with IDA. 2.10 Upgrading Amenities for PA Staff. The selection of the seven PAs was premised in part on the fact that these PAs already had good facilities and would not require extensive infrastructure improvements. Nevertheless, some upgrading of the amenities for lowest ranked PA staff, would be required and would comprise limited staff quarters for the lowest ranked PA staff, patrol camps, and drinking water and electricity supplies for some locations. In addition, career development training and field kits for staff would be supported under the project. Village Ecodevelopment 2.11 Microplanning and Implementation Support. Conducting participatory microplanning and providing implementation support for reciprocal commitments would use contracted local NGOs, expert advisors, workshops, materials, training (of government officials, NGOs, and local people), and PA staff travel to: (a) Undertake participatory mutual interaction assessment of PA and local people (b) Explain and consider the implications of the eligibility criteria, budget constraints, local contribution requirements, and applications of traditional natural resource management systems (c) Identify potential investments and activities which would mitigate negative PA-people interactions (d) Analyze the financial, technical, institutional, and social feasibility of the proposed programs (e) Strengthen capacity of implementing institutions (e.g. village groups, park personnel, NGOs, etc.) (f) Confirm reciprocal microplan agreements that address negative interactions of both PA and local people, and (g) Facilitate the review and implementation of the reciprocal commitments. Teams comprising PA staff and local NGO staff (with each team including at least one woman) would use specially focused participatory rural appraisal techniques, called a protected area mutual interaction assessment (PAMIA). The PAMIA would facilitate detailed village-level planning of reciprocal ecodevelopment commitments. These teams would take special care to ensure that women, tribal groups, and other disadvantaged people participate in the planning process and benefit from the agreed program. PA-level ecologists, social scientists, and other specialists would provide advice and review the proposed microplans to ensure that they met eligibility criteria. National-level specialists would also review proposals presenting new or difficult issues. Annex 8 outlines microplan procedures and contents in detail.  Staff Appraisal Report 12 2.12 Implementing the Reciprocal Commitments. Reciprocity would reside in the mutual quid pro quo of (a) specific measurable actions by local people to improve conservation and (b) investments that foster alternative resources use and livelihoods. PRA surveys in sample communities in and around the PAs have enabled the project preparation teams to identify an indicative list of possible ecodevelopment investments and actions to improve conservation. Investments categories include: biomass substitution (e.g. alternative fuels), biomass generation and forestry, ecotourism, agriculture including watershed management, small irrigation and livestock, agro-processing, and artisanry. These investment ideas need site-specific review to judge whether they meet eligibility criteria, and other proposals may be identified during more detailed planning. Examples of actions to improve conservation include curtailing grazing, curtailing fuelwood collection within the PA, and increasing participation in anti-poaching efforts. 2.13 Investment Eligibility Criteria. The eligibility criteria specifies that village ecodevelopment investments associated with the reciprocal commitments would: (a) Conserve biodiversity by reducing negative and increasing positive interactions between people and PAs, either directly, or indirectly by creating sufficient incentives for a consensus that commits local people to specific, measurable actions that improve conservation (the other essential element of the reciprocal commitment) (b) Mitigate the negative impacts of the previous establishment of the PAs on vulnerable groups and ensure equitable distribution of benefits to populations currently dependent on the PAs, especially tribals, women and other disadvantaged people (c) Add supplemental resources, i.e., alternative sources of funding and support is not available (d) Be technicallyfeasible, e.g., inputs and technical advice are adequate; physical conditions are suitable (e) Befinanciallyfeasible, e.g., costs within norms or cleared by PA manager, returns are sufficient to compensate for PA resources foregone, and for all investments intended to produce cash revenue or benefits that can be monetized, market linkages are adequate, cash flow requirements are viable, and returns compare favorably with alternative investment options; (f) Be socially and institutionallyfeasible, e.g., associated activities are culturally acceptable, local institutional capacity is adequate to organize forest protection, distribute benefits from common resources, provide physical maintenance, keep accounts, meet contribution requirements, etc., and (g) Be environmentally sustainable, e.g., adverse environmental impact of exotic species, agro-chemicals, construction activity, can be ameliorated or avoided. (h) Be selected and "owned" by EDCs, ensured through use of budget constraint mechanism and contribution requirement.  Staff Appraisal Report 13 Village ecodevelopment investments associated with the reciprocal commitments must meet all of the above criteria. Annex 8 describes the process and documentation required to ensure that these criteria are met, including specific eligibility and feasibility considerations. Annexes 17 and 18 provide further guidance on environmental and social considerations. 2.14 Budget Constraints and Phasing The total costs of the ecodevelopment investments that would be associated with reciprocal commitment would not exceed Rs. 10,000 (US$285) base costs per family, plus Rs. 500 (US$14) per family at preinvestment (i.e., during initial microplanning) to establish credibility. The funding of the Rs. 10,000 per family would usually be spread out over a three year period, with one third of the total resources available each year. The budget constraint per EDC would be calculated on a per household basis, multiplied by the total number of households. For example, a forty- family hamlet would make decisions within a binding budget constraint of Rs. 133,333 (US$3,800) for the first year, or Rs. 400,000 (US$11,400) over the three years. Annex 8 further explains the basis and arrangments for the budget constraint mechanism. 2.15 Contributions of Local People. Local people would contribute at least 25 percent of the Rs. 10,000 per household village ecodevelopment investment in cash, kind, or labor. Payment from project funds for the market value of contributions would be made available to the local people for additional community investments.This arrangement would thus help to extend the incentive mechanism beyond the period of the project investments. Annex 8 describes further details of the arrangements for local contributions. 2.16 Special Programs. These programs would mostly take place outside the national park and sanctuary boundaries but inside the 2 km periphery of the PAs, and would comprise: (a) Supporting plantation activities under joint forest management (JFM) in reserve forests in the immediate vicinity of PAs, beyond levels allowed within ecodevelopment budget constraints, in order to maintain consistency with JFM coverage elsewhere in the state (b) Developing the voluntary relocation option for people in the PAs in ways that are consistent with project objectives and GOI and Bank policies (e.g., develop participatory operational plans, aid households in the transitional period, provide investment funds for altemative livelihoods, provide implementation support services, and support measures fostering cultural continuity), and 4 (c) Providing other supplemental investments through a discretionary reserve for PA managers to allocate to areas with special needs (e.g., special watershed management priorities in buffer areas, communities that are especially dependent on forest resources, or village ecodevelopment investment opportunities with economies of scale). 4 The discretionary reserve would not exceed 18% of the regular village ecodevelopment investments.  Staff Appraisal Report 14 2.17 Guidelines. It is important that all village ecodevelopment activities follow project guidelines. Annex 8 provides detailed guidelines on the participatory microplanning process, including a list of specific eligibility and feasibility considerations. Annex 18 provides an analytical framework to help ensure that vulnerable groups (indigenous people, women, and other marginalized groups) would be full participants in project decision-making and benefits. Annex 19 provides guidelines on programs fro people in the PAs, including voluntary relocation. Assurances were obtained at negotiations that planning and implementation of reciprocal commitments, including associated investments, would be in accordance with guidelines (including selection process, eligibility criteria, feasibility considerations, acceptability of investment costs, budget constraint, and beneficiary contribution requirement) agreed with IDA (consistent with Annexes 8, 18, and 19). For each PA, SFDs would submit the first three proposals for village ecodevelopment microplans (which could those developed during the PPF ) for approval by IDA prior to the implementation of the microplans. EducationNisitor Management and Impact Monitoring/Research 2.18 Education and Visitor Management. The project would provide local NGOs, expert advisors, training, workshops, physical facilities, equipment, and materials for: (a) Environmental education and awareness to (i) Develop an environmental education and awareness strategy with help from professional educators, communicators, scientists, social scientists, NGOs and PA staff (ii) Improve visitor information and interpretation services (iii) Expand education programs for school children (iv) Run mass media campaigns (v) Develop alternative media (b) Visitor managment and ecotourism (i) Develop a visitor management and participatory ecotourism strategy (ii) Implement agreed strategy. 2.19 Annex 9 describes the environmental education and visitor management activities in detail. 2.20 Impact Monitoring and Research. Impact monitoring and research would improve understanding of issues and solutions relevant to PA management and interactions between PAs and people. It would involve the extensive use of contracted institutions and individuals for implementation support, expert advice, and special studies. It would also involve local people in participatory monitoring, and provide support for 5 Microplans proposed during the PPF could be implementated prior to these three proposals, provided they meet guidelines outlined in February 1996 Bank mission Aide Memoire.  Staff Appraisal Report 15 improved facilities and equipment, training, workshops, transport, and materials. These imports would support: (a) Ecological and socioeconomic monitoring to measure status and impacts and to measure the effectiveness of project institutions and processes (b) Ecological research (e.g., human impact within PAs, ways to control depredation by wildlife, impacts of fires and flood, ecosystem dynamics) (c) Socioeconomic research (e.g. long-term impacts of PAs on people, ethnobiology, indigenous resource management systems, cultural heritage, participatory processes, tenure requirements), and (d) Capacity building and communication programs to facilitate experimental learning and demonstration, increase compatibility of approaches and disseminate findings on above. Annex 10 describes the impact monitoring and research activities in detail. Project Management Component 2.21 This component would support the management organization and activities, i.e., the overhead, required to implement the overall project. Items in this component are not solely associated with the individual components described above, but instead cover a range of components. It would include: (a) Direct PA level management (b) Implementation strategy and guidelines (c) Multi-state learning and dissemination (d) Implementation review (e) National-level policy studies and (f) National level administration. Assurances were obtained at negotiations that the national level project management activities would be implemented in accordance with arrangements agreed with IDA. Annex I I presents the terms of reference for the national-level technical assistance and the indicative training program in project management. Preparation of Future Biodiversity Projects 2.22 Overview. The Ecodevelopment Project would include preparation support (including experts, studies, and workshops) for relatively large and comprehensive future projects intended to strategically address India's priority biodiversity concems. The Govemment has developed a list of three project concepts which potentially could meet this criteria: Second Ecodevelopment, Biodiversity Information, and Genetic and Ex-situ Conservation. 2.23 Second Ecodevelopment Project. In concept this project would be be a larger scale, progamatic version of the current project, but also include a component addressing  Staff Appraisal Report 16 biodiversity conservation in multiple use areas. This preparation of this project would involve: (a) Providing preparation guidance incorporating existing experience (b) Preparing detailed proposals for specific project areas of the Second Ecodevelopment project (c) Appraising submitted proposals for the Second Ecodevelopment Project and (d) Building capacity and consensus to lay a foundation for timely implementation of the Second Ecodevelopment Project. 2.24 Biodiversity Information Project. The concept of this project would be to organize a demand-driven system for biodiversity information that would: (a) Strengthen systems for gathering, organizing, and storing useful information (b) Strengthen distributed system for providing access to information and (c) Enhance analysis and application of information for decision-making. 2.25 Genetic and Ex-Situ Conservation Project. This project concept would comprise a nationally-coordinated and user-oriented effort to: (a) Expand the stock of ex situ genetic resources, salvaging selected species and genetic variability that would otherwise be lost if left in situ within protected or multiple use areas (b) Strengthen the capacity to replicate, manipulate, and exchange genetic resources (c) Improve safety, reliability, and efficiency of genetic resources management (d) Develop and establish a legal framework for ex situ conservation (e) Promote public awareness and education of ex situ genetic resources conservation 2.26 Annex 12 further describes the projects concepts and preparation activities.  Staff Appraisal Report 17 III. PROJECT COSTS AND FINANCING A. Project Cost Estimates 6 3.1 Total project costs are estimated at US $67 million (Rs. 294.9 crore ), inclusive of duties and taxes in the amount of US $0.9 million (Rs. 3.9 crore). Of this 8 percent or US $5.3 million are foreign exchange costs. Investment costs amount to 86 percent and incremental recurrent costs to 14 percent of base costs. The base costs are those obtained at the time of appraisal, adjusted for inflation to the date of negotiations. Physical contingencies amount to 9 percent. Price contingencies reflect foreign inflation of 2.0, 2.3, and four years at 2.5 percent, and local inflation of 8.0, 8.0, 7.5 and three years at 6.0 7 percent for the respective fiscal years of the project. 3.2 The table below gives a summary of project costs by component. Additional summary tables of project costs are presented in Annex 13. Project Cost Summary (Rs. Lakh) fUSS 000) % % Total Foreign Bass Local Formign Total Local Foreign Total Exchange Costs A. Improved PA Marugerment Planning Processes 367 2 11 368.3 1,0461 32 1.049 3 - 2 EcosystemProtecttnandManagement 3,6441 4905 4,134.6 10,3822 1,397.4 11,7795 12 19 Ameniies for Field Staff 342.1 38.0 380.1 9746 1083 1,082.9 10 2 Subtal 4,353.4 529.6 4,883.0 12,402.9 1.5089 13,911.7 11 22 IL Vilege Ecodevalopment Partidpatory Micro-Panning and Implementaion Support 1,681.7 119.2 1,801.0 4,791.3 339.7 5,131.0 7 8 InvestmentstolmplementReciprocalCommrtments 7,703.7 405.5 8,1092 21,948.0 1,155.2 23,103.1 5 37 Special Programs 1,868.2 94.4 1,962.6 5,322.5 268.9 5,591.4 5 9 Subtotal 11,253.7 619.1 11,872.7 32,061.7 1,763B 33,825.5 5 55 C. Develop Effective and Extensive Support for Ecodevelopnmnt Conduct Errwonmental Educaton and Awareness Campagns 3169 78.0 394.9 902.9 222.1 1,1251 20 2 Improve Impact Mondtmng and Research Systems 1,186 7 72.8 1,259.6 3,380.9 207 5 3,588 5 6 6 Subotl 1,503 6 150.8 1,654.5 4,283 9 429 6 4,713 5 9 8 D. PoJect Managennt 1,784.8 67.4 1,852.2 5,084 8 1920 5,276.8 4 9 E. Prepre Future Biodiversity ProJects 573.1 245.6 818.8 1,632 8 699 8 2,332.6 30 4 F. Reinbusermnt of PPF 659.9 42.1 702.0 1,880.0 1200 2,000.0 6 3 Totl NMSELNE COSTS 20,1285 1,654.6 21,783.1 57,346.1 4,714 1 62,060.2 8 100 PhyeacatContingences 567.4 57.9 6253 1,616.5 1650 1.781.5 9 3 Price Contingencies 5,939.6 530.4 6,470.0 2,774.5 3838 3,158.3 TobI PROJECT COSTS 26,635 5 2,243 0 28,8785 61,737.1 5,2629 67,000.0 8 108 6 A crore, which is the Indian unit commonly used to express large sums of money, equals Rs 10,000,000. L7 Local costs have been converted into US$ costs assuming a stable, real exchange rate regime.  Staff Appraisal Report 18 3.3 Relation of Cost Estimates to Annual Budgets. Cost estimates are indicative only. They indicate the overall size of the project and amount of required financing but do not provide an approved blueprint for specific expenditures. In the course of the project, managers would allocate specific expenditures according to an annual work plan and budget, which would be subject to a review process to ensure consistency with project objectives. The updated PA management plans would determine the specific investment during project years three to five for the protection and management of ecosystems component. Annual budgets for the village ecodevelopment component would specify only the location and unit size of the villages selected. Funds would then be allocated for specific activities as agreed with village groups through participatory microplanning and feasibility analysis, in conjunction with reciprocal commitments that promote conservation. Strategies supports during the initial project period would also determine specific project support for environmental education and monitoring and research activities. B. Financing Plan 3.4 The financing plan below presents the IDA, GEF, project beneficiaries, GOS, and GOI contributions for the five-year project period. The IDA Credit of US $28.0 million equivalent would finance 42% of project costs, net of taxes. The GET Grant of US $20.0 million equivalent would finance 30% of project costs. The IDA and GEF financing is allocated roughly on a pro-rata basis to all components except for the preparation of future biodiversity projects and the reimbursement of the US$2 rnillion IDA Project Preparation Facility). GOI and the GOSs would finance US $14.6 million. While this financing would represent a significant increase in government resources devoted to biodiversity conservation, it would be only a small share of the total budgets of the participating state forest departments. Project beneficiaries would contribute US $4.4 million equivalent by contributing primarily labor to the ecodevelopment program. 8 The Global Environrment Trust (GET) is the legal entity that provides Global Environmental Facility (GEF) grants.  Staff Appraisal Report 19 Components by Financiers (US$'OOO) Components by Financiers (USS '00