India - Calcutta Urban Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 4023 PROJECT PERFORMANCE AUDIT REPORT INDIA: FIRST CALCUTTA URBAN DEVELOPMENT PROJECT CREDIT 427-IN) June 30, 1982 Operations Evaluation Department 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.  FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT INDIA: FIRST CALCUTTAURBAN DEVELOPMENTPROJECT (CREDIT 427-IN) TABLE OF CONTENTS Page No. Preface ....................... .............................. i Basic Data Sheet ................................................... ii Highlights .................I ........................................iv PROJECT PERFORMANCE AUDIT MEMORANDUM I. INTRODUCTION .......................... 1 II. PROJECT SUMMARY .......................................... 3 III. THE CONTEXT FOR CALCUTTA-I ..... ............... 5 IV. CMDA AS THE CENTER FOR CALCUTTA'S RECONSTRUCTION ......... 7 V. CONTENT AND STYLE OF CMDA ACTIVITIES ........... .......... 16 VI. THE WELFARE OUTCOMES OF THE CALCUTTA URBAN PROGRAMS ...... 20 VII. IMPLICATIONS FOR BANK LENDING PRACTICE .......... ......... 24 PROJECT COMPLETION REPORT I. Preface ...............................................31 II. Introduction ............................................. 31 III. The Sector ............... ................................ 32 IV. Project Formulation . ..................... ................ 33 V. Project Implementation ................................... 38 VI. Financial Performance .................. .................. 43 VII. Institutional Performance and Development ................. 47 VIII. Consultants Services ..................................... 49 IX. Evaluation ........ ................ ....................... 50 X. Bank Performance ......................................... 54 XI. Conclusions .............................................. 55 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. I  - i - PROJECT PERFORMANCE AUDIT REPORT INDIA: FIRST CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 427-IN) PREFACE Credit 427-IN for the Calcutta Urban Development Project was signed in September 1973. The Credit, for $35 million, was fully disbursed in November 1979. During implementation, the project's content was revised and the closing date was postponed. This report consists of a Project Performance Audit Memorandum (PPAM) prepared by the Operations Evaluation Department (OED) and a Project Completion Report (PCR) prepared by the South Asia Regional Office. The PCR is based in part on a completion report prepared by the borrower's project authority, the Calcutta Metropolitan Development Authority (CMDA). The PPAM is based on a review of files and documents, including the PCR, interviews with Bank and borrower staff, and a visit to Calcutta, September 1981. The PPAM accepts the PCR's account of the implementation and outcome of the project elements and of the difficulties encountered in carry- ing out the project. It focuses on the particular circumstances of the project's origin and on its institution building aims, their success and their limitations. The draft audit was sent to the Borrower for comments; however, none were received.  - ii - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET INDIA: FIRST CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 427-IN) KEY PROJECT DATA Appraisal Item Expectation Actual Total Project Cost (US$ million) 96.9 Revised Total Project Cost (1972 prices) 59.2/a 112.2/b Overrun (%) - 90% /c Credit Amount (US$ million) - 35.0 Disbursed - 35.0 Date Physical Components Completed 12/31/76 11/79 Id Economic Rate of Return (%) 10O/ No reestimate made/f Institutional Performance Strengthen agency Achieved aims more to finance and slowly than expected. supervise metro- Performance improved wide development in course of imple- program. mentation. Cumulative Disbursements, Estimated and Actual FY74 FY75 FY76 FY77 FY78 FY79 FY80 (i) Appraisal (US$ million) 9.5 25.5 34.0 34.8 35.0 35.0 35.0 (ii) Actual (US$ million) 0.6 4.4 13.4 21.3 26.6 33.7 35.0 (ii) as % of (i) 6 17 39 61 76 96 100 OTHER PROJECT DATA Original Item Plan Revisions Actual First Mention in Files - - 03/01/72 Negotiations - - 06/25/73 Board Approval - - 08/14/78 Credit Agreement Date - - 09/12/73 Effective Date - - 01/11/74 Closing Date 12/31/77 12/31/79 11/19/79Lg Borrower Goverment of India Executing Agency CMDA Fiscal Year of Borrower April 1 - March 31 Follow on project Name Calcutta Urban Development II Credit Number Cr. 756-IN Amount (US$ million) 87.0 Credit Agreement Date 01/06/78 /a During implementation, project reduced by eliminating 5 of 44 sub- projects, and reducing scope of some cluster schemes. The revised estimate of total project costs became US$91.1 million (1975 prices) equal to US$59.2 million (1972 appraisal prices). /b The project was still being implemented when credit was fully disbursed in November 1979. The last subproject is scheduled for completion in March 1984. The latest (December 1980) estimated cost of the completed project as revised is US$112.2 million. /c Based on revised total project cost. /d Actually only 22 of 39 subprojects had been substantially completed when credit was fully disbursed. /e Calculated on the water, drainage, and housing sectors only, which account for about 50% of CMDA investments through 1981. /f See PCR, paras. 9.01 and 9.02. /g Final disbursement date.  - iii - MISSION DATA Month/ No. of No. of Date of Item Year Weeks Persons Manweeks Report Identification 02/72 1 1 1 04/72 Preparation 07/72 3 3 9 09/72 Appraisal 11/72 4 9 36 07/73 Total 8 46 Supervision I 02/74 3 3 9 04/74 Supervision II 06/74 1 1 1 07/74 Supervision III 11/74 3 3 9 02/75 Supervision IV 05/75 3 4 12 08/75 Supervision V 11/75 3 6 18 02/76 Supervision VI 07/76 3 4 12 10/76 Supervision VII 12/76 3 5 15 02/77 Supervision VIII 12/77 2 2 4 01/78 Supervision IX 09/78 3 4 12 11/78 Supervision X 01/79 3 3 0.5* 04/79 Supervision XI 07/79 3 7 1 * 09/79 Supervision XII 01/80 3 2 0.3* 03/80 Supervision XIII 09/80 3 6 1.2* 10/80 Total 36 50 95.0 COUNTRY EXCHANGE RATES Name of Currency Rupees (Rs) Year: Exchange Rates Appraisal Year Average (1972) US$1 = Rs 7.27 Intervening Years Average US$1 = Rs 8.50 Completion Year Average US$1 = Rs 8.20 * Estimated, - project supervised simultaneously with Second Calcutta Urban Development Project.  - iv - PROJECT PERFORMANCE AUDIT REPORT INDIA: FIRST CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 427-IN) HIGHLIGHTS The Calcutta Urban Development Project was the first Bank lending operation to support a metropolitan-wide development program. It provided finance for 44 sub-projects in six sectors and was designed to support the program and strengthen the operations of a new urban development institution, the Calcutta Metropolitan Development Authority (CMDA) and to develop a program to provide future support for the operation and maintenance of public facilities and services in the Calcutta Metropolitan District (CMD). The CMDA expanded quickly, absorbing staff from other agencies and taking direct responsibility for the execution of most of its program. It became the dominant public works agency in the CMD. Developing the expanded organization to effectively deal with its expanded responsibilities proved more difficult and took longer than expected. Execution of the projects also took longer than expected and was hindered by inadequate preparation and CMDA's reorganization problems. With the development of a second project, the institutional goals for CMDA were substantially achieved and specific measures to strengthen operation and maintenance were identified. Benefits from the program supported by the project were widespread but difficult to quantify. Progress was made in expanding the supply and distribution of potable water, improving drainage, sanitation and general environment especially in Bustee (slum) areas and in improving facilities for traffic at critical points. Benefits were delayed in some cases by the inefficient sequence of project construction and the loose coordination of complementary investments. The focus of the project on the development of CMDA and the experi- ence with that development suggest that institution building, at least in this case, can be seen as a process of change - moving through stages. It seemed important to support the change that was possible even when it did not consti- tute a complete, balanced approach to the problem. The investment program was financed before a supporting financial reform was in place. It was recognized that subsequent adaptation would be necessary to sustain progress. The nature of the needed changes has become more clear with time and so has the pressure to make them. Present focus is on the need to strengthen the finance, opera- tion and maintenance of the system.  v Aspects of this experience that may be of special interest are: - the critical aspect of timing in urban reform. The project supported a borrower's initiative, the CMDA, at a critical time in its development (PPAM, paras. 2.08, 4.01); - the difficulties of developing an effective new institution even with strong local support and strong leadership (PPAM, para. 4.07; PCR, paras. 7.01-7.09); - the limitations of a centralized approach to the complex prob- lems of metropolitan development. Although a centralized approach seemed best at the time and was probably responsible for getting the whole program started and for much that was achieved, the need to strengthen operating institutions has become increasingly important (PPAM, paras. 7.08, 7.10 and 7.23); and - the contrast between the relative ease with which a lender, central government or foreign agency, can support investments and the difficulty experienced in trying to strengthen opera- tions and maintenance (PPAM, paras. 4.30-4.31; PCR, paras. 9.10-9.12; 10.09). I  - 1 - PROJECT PERFORMANCE AUDIT MEMORANDUM INDIA: FIRST CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 427-IN) I. INTRODUCTION 1.01 The First Calcutta Urban Development Project (Cr. 427-IN)I/ ini- tiated a sequence of capital improvements and institutional reforms that are now being expanded and elaborated. It also initiated a new line of activity within the World Bank, for this was the Urban Projects Department's first, multisectoral, metropolitan-wide project, and the Bank's first major intervention into the processes of managing urbanization. 1.02 Calcutta-I was essentially an experiment. From the Bank's perspec- tive it was an experiment in conducting a general urban program. It was also an experiment in helping to foster a new kind of urban development institution -- the Calcutta Metropolitan Development Authority (CMDA) -- in a setting where nothing of the kind had ever been tried before. Moreover it was the Bank's first attempt to take on the reconstruction of an entire metropolitan area, one that was in particularly bad shape besides. Indeed it was the Bank's first full plunge into the urban problems of the Third World, other projects of the time having been narrowly defined subsectoral efforts in shelter and transport. 1.03 In parallel ways, the project was essentially experimental for the Government of India (GOI), the Government of West Bengal (GOWB), and the various agencies within the Calcutta Metropolitan District (CMD). It was an attempt to cope with persistent erosion of the city, by seeking to do what the 1966 Basic Development Plan (BDP) had earlier recommended.Z! No one could be sure that BDP was the right formula, of course. It was not certain whether the CMDA form was the best way to go either. It was clear only that something emphatic was needed -- that far more money was required than had ever been available there before. The partnership between the GOWB, CMDA, and the Bank looked like a good bet. But the odds of its working were uncertain. 1.04 The Bank's objectives were set out clearly in the appraisal document where the following aims were made explicit: 1/ Credit of US$35 million; agreement date September 12, 1973. Closing date November 19, 1979. 2/ Calcutta Metropolitan Planning Organization, Basic Development Plan for the Calcutta Metropolitan District, 1966-86 Calcutta: Government of West Bengal, 1966.  - 2 - (a) To improve Calcutta's physical environment. (b) To initiate a "series" of projects over time. (c) To strengthen CMDA as the "single" financing and supervising agency focused on Calcutta's reconstruction. (d) To "strengthen the planning and execution of the investment program." (e) To assist in developing measures to strengthen the operation and financing of services. (f) To support a broad "program" of public works, the components of which "are treated as elements of an urban investment program rather than as self-contained sub-projects." 1.05 Now, some 9 years later, it is evident that many of Calcutta-I's formal objectives have been accomplished: (a) The attached project completion report treats in detail the projects that were built with IDA funds, and there can be no doubt about their positive effects on Calcutta's physical environ- ment. (b) Calcutta-III is now being prepared; clearly, the "series" of projects is being realized. (c) As the following analysis will demonstrate, CMDAhas indeed become the "single" financing and supervising agency concerned with Calcutta's reconstruction. (d) It succeeded in executing the investment program. Although it did little planning other than sector planning and project design, responsibility for long-term metropolitan planning has now been assigned to it by recent legislation. (e) Calcutta-I did assist in developing measures to finance services, but operations and maintenance have not yet been adequately discharged. These two functions remain major matters of unfinished business. (f) The objective of supporting a broad "program" of public works comprising an "urban investment program" is not yet wholly accomplished in the sense of achieving an appropriate balance between project and program concerns. This too remains an important matter of unfinished business. 1.06 From the outset, the main organizing idea behind the Calcutta urban project was for the Bank to extend a line of credit to support an active agency -- an organization strong enough to design and conduct a broad urban-investment program. As the loan arrangements were worked out, CMDAdid not receive a block loan to be used at its own discretion. Instead, various subprojects were enumerated in consultation between Bank and CMDAstaffs, and disbursements were then made against each subproject. Even though formally cast as a project loan, Calcutta-I was actually a multiproject loan. The idea of a program loan has nevertheless underlain the entire enterprise, quite in accordance with the 6th objective set out in the initial appraisal document.  - 3 - 1.07 The potential merits of a program loan are explored further in Chapter VII of this audit memorandum. With a strong and well-managed organi- zation now in place, there is far greater capacity for self-management than at the time Calcutta-I was designed. The success of the first and second loans in this respect now poses the prospect of dealing with CMDA as a wholesaler rather than as retailer of projects, thus reducing the designing and supervis- ing roles of Bank personnel. 1.08 This review accepts the findings of the Project Completion Report on the detailed workings of the project, summarized in Chapter II. After review- ing the contextual setting that Calcutta-I moved into, this memorandum then focuses upon four key issues the project poses: (a) the consequences of the institutional arrangements that evolved in Calcutta as result of the Calcutta-I loan; (b) the content and programmatic style of CMDA's activities; (c) the welfare outcomes for the people of Calcutta; and (d) the implications of this project experience for the Bank's approach to future urban-development lending. II. PROJECT SUMMARY 2.01 The project provided finance for 44 of the 160 projects comprising CMDA's metropolitan-wide investment program. The 44 were distributed over 6 sectors; some included many subprojects and resembled small programs; many were not clearly defined.!' The project also included provisions for tech- nical assistance to strengthen CMDA's planning and execution capabilities. Agreements with GOWB gave CMDA direct responsibility for execution of all projects in water supply, sewerage, and drainage and for developing a finan- cial plan to support operations and maintenance of public facilities and services in the CMD. 2.02 The credit took about 50% longer to disburse than expected at appraisal; the completion of some projects took even longer.2/ Costs aver- aged 90% higher than estimated for those projects whose scope had remained essentially unchanged (PCR, para. 6.09). The lag in completion can be attri- buted to incomplete preparation, a reduction in resources provided CMDA which forced a general cutback in its original program, and problems encountered managing the program. The large increase in project costs is attributable both to inadequate original estimates and to inflation. 1/ For the process of selection and a brief description of the 44 projects, see PCR, paras. 4.06 and 4.11-4.16. 2/ Only 22 of 39 subprojects retained in the program had been completed by the time the Credit was fully disbursed. 2.03 CMDA's program had been assembled quickly in response to an emer- gency. It was generally based on the recommendations of the Basic Development Plan, but the detailed preparation work was incomplete. Originally CMDA financed execution, drawing upon an array of government departments, autono- mous agencies and local government units. In 1974 CMDA assumed responsibility for executing the major part of its program,l/ and faced the problem of building an institution with greatly increased staff and new functions, while simultaneously executing a large investment program. Progress was slow during the period of adjustment. The lag in disbursement compelled a redefinition of project components in 1976, the subsequent elimination of 4 projects, and an increase in the portion financed by IDA to the level agreed upon for the second Calcutta Urban Project in 1977. 2.04 The program supported by the project has brought substantial bene- fits to citizens of the CMD. Many benefits have been localized - for example, extension of piped water supply and of sewerage and drainage facilities into new areas, improved service in existing areas, replacement of service privies with sanitary latrines in small pockets throughout the CMD, and improvement of sanitation in many bustees. Some benefits affecting a wider pub:Lic derive from such projects as road widening, new bridges and flyovers, and reduction in the duration of flooding and hence in the incidence of waterborne disease. There is also another group of projects whose benefits are still to be real- ized - localized drainage improvements not. yet connected to the system and facilities not yet in operation, pending completion of the network they are intended to serve, e.g., a sewage-treatment plant and a water-supply plant. Additional benefits are yet to be realized from incomplete networks for distributing water and for collecting and disposing of sewage and storm water. Water supply mains now being built will allow fuller distribution of the increased supplies of potable water that are already available. Capacities of existing sewerage and drainage systems, partially clogged from past neglect, will be increased when cleaning is completed. 2.05 The borrower had difficulty fulfilling some of the covenant require- ments within the allotted time. Satisfactory audits of CMDA for the project years were not received until after the credit had been fully disbursed (PCR, paras. 6.14-6.15). An Engineering Management Unit was established as agreed, but setting up a satisfactory progress reporting system took much longer than expected. Fully satisfactory standards were achieved during the subsequent project only (PCR, para. 7.08). The covenant requiring the GOWB to compile annual forecasts of operating and maintenance costs of service systems has only recently been complied with (PCR, para. 7.13). During the early period of implementation Bank supervision did not focus strongly on the compliance with all covenants. 1/ More than the water, sewerage, and drainage sectors included in the project agreement.  - 5 - 2.06 On the broader issue of giving CMDA responsibility for the direct execution of projects in water supply, sewerage, and drainage, the covenant conditions were met promptly and extended to other sectors as well. However, it took CMDA longer to adjust to this major change in function and organiza- tion than expected. The results of the early experience led to changes in the structure of management at the time of the Second Calcutta Urban Project, contributing to the development of a technically strong organization (PCR, paras. 7.04-7.06). 2.07 The financial plan for the CMD, intended to provide a basis for actions to strengthen operations, maintenance, and finance, was carried out as planned and did lead to agreement on a program of reform at the time of the Second Calcutta Urban Project (PCR, para. 7.11). 2.08 The Bank showed flexibility in fitting the operation to the par- ticular circumstances. The approach was unorthodox - placing more emphasis on timing and the sudden opportunity to support an agency and program with great potential than on the project elements themselves. Supervision was frequent and was often combined with technical assistance. The wide range of issues that developed posed difficult problems of priority for supervision; some aspects were neglected. Bank efforts to assist CMDA in the preparation of the second project were substantial and overlapped with the supervision of this project. 2.09 The project has been followed by the Second Calcutta Urban Develop- ment Project (US$87 million, 1977) and the Calcutta Urban Transport Project (US$56 million, 1980). A Third Calcutta Urban Development Project is being prepared. III. THE CONTEXT FOR CALCUTTA-I 3.01 Events preceding Bank involvement in Calcutta have been reported with care in several places and need not be recounted in detail here.!/ It is sufficient to recall that in the years following World War II Calcutta 1/ Among the more pointed accounts are K.C. Sivaramakrishnan, Indian Urban Scene (Simla: India Institute of Advanced Study 1978); Arthur T. Row, "Metropolitan Problems and Prospectus: A Study of Calcutta", in Metro- politan Growth: Public Policy For South and Southeast Asia, Leo Jakobson and Ved Praskash (eds), (New York: John Wiley and Sons, 1947); Harold Lubell, Calcutta: Its Urban Development and Employment Prospects (Geneva: International Labor Office, 1974); Ashok Mitra, "Problems of Calcutta Metropolitan Region", in Amrita Bazar Patrika, 1975; Nirmal K. Bose, "Calcutta: Premature Metropolis", Scientific American, September 1965; Geoffrey Moorhouse, Calcutta (London: Weidenfeld and Nicolson, 1971); Penguin Book, 1974. earned the unmatched reputation as "the worst urban disaster in Asia and the World".1 1 Attracted by war-related industries, migrants had flowed in from rural areas throughout eastern India during the 1940s, overtaxing the city's physical plant which did not expand to accommodate them. In turn, overcrowd- ing was exacerbated beyond credibility when, following independence and partition in 1947, some 1.5 million refugees from East Pakistan moved into West Bengal, mostly into the Calcutta metropolitan area. The infrastructure was incapable of serving so explosive an expansion in sheer numbers. Both neglected and overloaded, it began to fall apart. 3.02 Unfortunately, the region's economy has been unable to expand to absorb the new residents in productive roles. Worse, a number of mutually reinforcing events have led to actual declines in the West Bengal economy. Equalization of freight rates for coal, iron, and steel throughout India -- a decision taken at the Center in the 1950s -- deprived the region of its locational advantage with respect to natural resource deposits. Silting of the Hooghly River led to a decline of shipping into the port at Calcutta. Both metal-working and jute, the two traditional pillars of the West Bengal economy, suffered secular declines. Several metal-working industries moved from "the Ruhr of India" to newly industrializing regions of India; declining employment in jute reflected increasing roles of competing materials within international trade. And then the recession of 1966-69 was particularly severe in Calcutta; employment in engineering industries declined by 9%, in jute by 21% between 1965 and 1969. It is the tragedy of Calcutta's recent history that its population grew while its economy did not. 3.03 Meanwhile, the metropolis' physical plant had been increasingly overburdened and had fallen into disrepair. By 1969, following a period of political instability and unrest, the city was perceived to have reached crisis conditions. In an atmosphere of civic emergency, the Prime Minister instructed the Cabinet Secretary to work out a crash program, working jointly with the Principal Adviser of the Governor of West Bengal. It seemed then that what was needed most was a combination of new financial resources and new institutional capacity for concerted action. 3.04 The Basic Development Plan for the Calcutta Metropolitan District had been published back in 1966 by the Calcutta Metropolitan Planning Organi- zation (CMPO), prepared with the aid of WHO, UNDP, and the Ford Foundation. A departure from traditional city plans in its substantive focus and policy approach, BDP had set out a general scheme of attack upon Calcutta's most pressing problems. Rather than a long-range design for the city's develop- ment, rather than an integrated set of coordinated action programs, BDP recommended selected actions that would relieve some of the most oppressive environmental conditions and would start reconstruction of the city's capacity again to function as an economically viable system. 1/ Joseph Lelyveld in Raghubir Singh and Joseph Lelvveld, Calcutta (Hong Kong: Perennial Press, 1975), pp. 7-8.  - 7 - 3.05 BDP was explicitly remedial. In 1966, it seemed to be just the program ticket needed to ameliorate the city's most decrepit environmental conditions and, if only it could be implemented, to help quell the tide of public dissatisfaction. The scheme was to increase supplies of potable water, to extend and improve sanitary sewerage and storm-drainage systems, to expand the carrying capacities of the transport systems for goods and persons and, by modest incremental improvements to the city's ubiquitous slums, to make living conditions somewhat more tolerable and the hazards of another cholera epidemic less risky. BDP had been formulated, formally adopted, and then largely ignored. 3.06 Because the plan was focused upon the whole of the metropolitan district and upon a diverse array of services and infrastructures, there was no single agency equipped to implement its proposals. CMD was then governed by some 33 municipalities, 37 non-municipal urban units; two city corpora- tions; four specialized authorities concerned with water, transport, sanita- tion, and gas; two improvement trusts; 10 directorates within the State of West Bengal; the Government of India; and possibly more. Despite that array of governments, no one of them was responsible for the structure or the operations of the metropolitan system. Collectively they were failing to do so, as well. Some influential political leaders were adamantly opposed to the formation of anything resembling a unitary metropolitan government or a centralized metropolitan agency, fearing that centralized control would reduce municipal autonomy and home rule. BDP had recommended that three agencies be created and given centralized authority to undertake comprehensive development programs in the eastern, western, and northern sectors of the CMD respec- tively; but that proposal was not accepted, apparently for similar reasons. 3.07 Nevertheless, the perceived crisis conditions of 1970 compelled a series of actions that, among other things, planted the seed of a poten- tially powerful metropolitan agency. At that time, when the State of West Bengal was under Presidential Rule, three critical decisions were taken: An octroi tax was imposed on imported goods. The Center made loan funds avail- able for the redevelopment of Calcutta. And the Calcutta Metropolitan Devel- opment Authority (CMDA) was created, supplied with limited financial and organizational resources, and given an open license to get going on the reconstruction of Calcutta. As we shall see, CMDA soon became synonymous with the Calcutta metropolitan development program and was to become an uncommonly effective insitution that was able to sustain itself through several changes in government. IV. CMDA AS THE CENTER FOR CALCUTTA'S RECONSTRUCTION 4.01 The 1960 Bank mission, led by Michael Hoffman, reviewed India's Third Five-Year Plan and concluded that continued neglect of Calcutta posed one of the more serious deterrents to economic growth in the nation's most industrialized region. A decade later, following creation of the Bank's urban projects department, GOI invited a reconnaissance mission to visit Calcutta in May 1972 to explore prospects for Bank support of Calcutta's new effort to save itself from decline. It was followed in July by a project identification mission whose explorations, drawing upon the project agenda prepared by CMDA's management, quickly led to the design of Calcutta-I. An appraisal mission visited Calcutta in November-December 1972, and an IDA credit of US$35 million was approved the following August. Like the Govern- ment of India, itself, the World Bank had responded with dispatch and had prepared an initial loan in record time. 4.02 From the outset, Calcutta-I was seen by Bank officials as but the first step in a long-term Bank-Calcutta collaboration. It represented a departure from normal Bank practice, more closely resembling a general-program loan than a loan for specific public works. To be sure, specific works were to be constructed with the funds made available, but the essential character of the project was programmatic, in many cases detailed specifications of individual construction project components having been left for later deter- mination. Moreover, a major objective was to support local efforts to create an institutional capability in Calcutta. As much as an investment in public facilities and services, Calcutta-I was an investment in CMDA. 4.03 CMDA was a fledgling organization at the time Calcutta-I was approved. It had been in business about a year-and-a-half, heavily engaged during that time merely accumulating staff and searching for its still- unspecified roles. It had inherited the Basic Development Plan from CMPO, and BDP effectively became CMDA's own program of action. With virtually no city-planning effort of its own, indeed with no plan for its own future, CMDA plunged into business and soon emerged as the central effectuating agency for Calcutta's capital-improvement program. Meanwhile CMPO was continuing to serve as the metropolitan planning agency. 4.04 CMDA had been imposed on the existing structure of state government departments, autonomous agencies, and local governments concerned with the construction, operation, and maintenance of urban facilities and services in the CMD. It had broad powers to plan, finance, and execute a metropolitan- wide program of rehabilitation and development; and it now had its own budget, a very substantial one by all previous standards. Initially it acted as a fund-raising organization, coordinating work of the multiplicity of govern- mental agencies within the CMD. It also assisted with the procurement of scarce materials and took direct responsibility for executing the innovative Bustee Improvement Program. The fragmented structure of execution and the indifferent performance of some agencies made CMDA's control difficult and inhibited its response to public pressure for fast performance. Attempts to consolidate execution by sectors were not successful; there were no strong sector-wide functional agencies; and there was little cooperation among ministerial jurisdictions. At the time Calcutta I was being prepared, CMDA proposed to take over direct responsibility for executing water supply,  - 9- sewerage, and drainage projects and for building its own staff to do so. The Bank, concerned to strengthen CMDA's surveillance of its program, sup- ported the proposal and it became the subject of a covenant (para. 2.06)._/ However, expansion continued beyond that point, and CMDA emerged as a gigantic public-works construction empire.2J CMDA may have surpassed everyone's expectations for concerted action. Once underway and once supported by the World Bank, CMDA quickly became one of the most visible and most consequential agencies within the region. 4.05 Following receipt of project funds, CMDA expanded its scope of responsibilities and scale of it activities, and accordingly underwent a formal internal reorganization. In August 1975, its Secretary described its structure as follows: At the field level there are 4 Wings viz. Water Supply and Environ- mental Hygiene, Sewerage and Drainage, Traffic and Transportation, and Area Development/Bustee Improvement. Each of these Wings functions under a Director/Chief Engineer consisting of Project Planning and Execution Units serviced by pay and accounts as also personnel units located within the Wing. At the Headquarters a Planning Unit under a Director of Planning deals with metropolitan level/strategic planning issues which is also concerned with up- dating previous area and functional master plans. Project Planning Working Groups have been set up consisting of representatives from this headquarters planning unit and the sectoral project planning units to deal with formulation and appraisal of individual schemes. A Director of Finance, a Director of Services, a Legal and Land Acquisition Cell and a Public Relations Officer with necessary supporting staff also function from the Headquarters. The Heads of four functional Wings, i.e., Water Supply, Sewerage and Drainage, etc., as also the Additional Director, Central Purchase and Stores report to a Technical Adviser who is in overall charge of coordinat- ing the works.3/ 4.06 Following receipt of project funds, CMDA's logo soon appeared virtually everywhere throughout the CMD, as streets were excavated for installation of water and sewerage lines, as roads were widened, drainage 1/ The same concern was behind the Bank's proposal for CMDA to establish an Engineering Management Unit to operate a comprehensive progress reporting-system also the subject of a covenant (para. 2.05). 2/ This additional expansion was neither contemplated in the project agree- ment nor limited by it. The Bank was clear on the need to monitor the program more closely but not, at that time, on the details of how this could best be done. Consolidation of command over execution could be seen as one possible approach. 3/ K. C. Sivaramakrishnan, "Calcutta Case - A Postscript", addendum to "Organizing a Metropolitan Development Programme: The Calcutta Case": Economic Development Institute, The World Bank, Course on Managing Urban Growth, August 1975.  - 10 - ditches dug, and as bustees got fitted out with latrines, standpipes, paving, and lighting. CMDA quickly became the ubiquitous symbol of efforts at civic betterment. But its promises of quick solutions were seldom fulfilled. It promised magic, but it delivered work-a-day amelioration - some of it undra- matic, most of it behind schedule. The disruption created by street excava- tion inevitably led to CMDA's rechristening as the Calcutta Metropolitan Digging Authority. 4.07 Although the agency expanded rapidly (it began with 40 employees; it has some 5000 today), many projects funded by Calcutta-I were slow to progress. Despite strong leadership and, initially, widespread support, it suffered from too few experienced and skilled designers and construction supervisers. Despite CMPO's extended efforts and despite claims that the many agencies had plans already on the shelves merely awaiting arrival of funds, CMDA found few projects ready for its construction crews. Periodically, it suffered from shortages of steel, cement, and other materials. Most projects took far longer than anyone expected, and many cost far more than initially expected. Some parts of projects were installed before other parts that they depended upon; and so they lay idle, some for several years --- as, for example, when a sewage-treatment plant was built before the lines iwere laid. Before long CMDA had accumulated as many critics as defenders. It:had been too bullish in advertising its promises, some claimed, as the city continued to flood during even a minor monsoon downpour. CMDA had torn up the city and left little to show for its effort, if only because pipes and conduits lay buried beneath the surface, said others. Some critics argued that CMDA had usurped roles that properly were those of local governments and established public service agencies -- that it had become a gigantic and relatively autonomous agency outside the normal structure of government and hence outside the normal compass of political control. Some believe it has become an instrument of "outsiders", presumably the World Bank and IDA, who are alleged to use CMDA for their own purposes, however noble. 4.08 Having become so visible and powerful a presence within the metro- politan scene, it was perhaps inevitable that CMDA would also become a focus of critical controversy and debate and a scapegoat for generalized complaints about Calcutta's living conditions. And now, in mid-1981, influential public officials are urging that its structure and roles be substantially modified and its powers delimited. Within the limited context of this aujdit memo- randum, the single question must now ask: What has been the role of the Calcutta-I _,oan in the emergence and evolution of CMDA as the CMD's primary agent for civic betterment? 4.09 A few facts in the matter are clear. From the outset, IDA funds have contributed substantially to CMDA's capacity for the leadership roles it has exercised and for building the public works it has completed. During the years when Calcutta-I funds were in hand they comprised 15% of CMDA's expendi- tures. Funds from Calcutta-II more than doubled this proportion after 1977. But perhaps more important than the volume of funds has been the funding mechanism established, pooling funds from central and state governments together with locally raised funds such as octroi (entry tax). Once estab- lished and supported by the Bank, the mechanism has survived major changes in government and has been a major factor in the continued operation of CMDA.  - ll - 4.10 Of course, had the Bank and CMDA not formed an association when they did, civic leaders might have successfully solicited funds from other interna- tional donor organizations. Having formed a congenial working alliance, both CMDA and Bank officials have enjoyed a collaborative relationship that has served their respective individual interests, as well as their common inter- ests. There is no gainsaying what outcomes might have been generated had alternative financial resources and associations been pursued. 4.11 The BDP had proposed a number of single-function metropolitan agencies. The first of these, the Calcutta Metropolitan Water and Sanitation Authority (CMWSA) was created in 1966 but never took on the responsibility its charter intended."V The other proposed authorities were not formed at all. CMDA would probably have welcomed the existence of strong functional agencies; for they would have simplified its early execution problems. But none existed, and the autonomous agencies that did exist were absorbed into the organizational web that grew around CMDA's unprecedented budget. Under- staffed and ill-equipped, municipal governments just never did acquire the capacity to supply even minimal local public services. 4.12 It seems as though CMDA just happened to grow into the dominant construction agency -- despite itself, as it were. Although some critics have accused CMDA of imperial intention, the documentary evidence at hand suggests the empire grew by accretion, almost inadvertently. CMDA had been given its assignment and the funds to work with. There were few other centers with comparable competence. Paradoxically, in turn, CMDA took on tasks intended for other agencies of government. To execute those tasks, it also absorbed those agencies' staffs into itself in the process, thus further weakening them and reinforcing dependence on CMDA. It seemed natural and right at the time. It no longer appears so to very many today. 4.13 A major compulsion driving Calcutta government into such concen- trated centralization was the desire to be comprehensive, i.e., to encompass the entire metropolitan area and to encompass a wide spectrum of services and facilities in its all-out campaign for civic betterment. Perhaps it was the vestige of holistic city planning doctrine that had slipped into the Basic Development Plan. Perhaps it was simply that things were breaking-down, everywhere, and so everything seemed to be demanding attention at once. 1/ The initial proposal for the Calcutta Metropolitan Water and Sanitation Authority (CMWSA) had suggested a 3-member governing board and a 30-member advisory council. As enacted it was given a 5-member board and a 52-member council having veto rights over all important decisions. The council successfully blocked attempts to transfer control over water, sanitation, and drainage from local agencies to CMWSA. Apparently the members feared that CMWSA would impose increased user charges and taxes to finance their planned public works. In 1973 an ordinance transferred management of CMWSA to CMDA.  - 12 - Perhaps, it was that Calcutta's plight was so severe that even the cogniscenti had trouble identifying key leverage points and so sought to attack many levers at once. Whatever the cause,L/ CMDA became the focus for comprehen- sive reconstruction. 4.14 In parallel, and in accord with the doctrine that comprehensiveness requires centralized control, CMDA took charge of that wide spectrum of services and facilities. In other circumstances, these activities might have remained responsibilities of local governments and single-function metropolitan and local agencies. In the interest of comprehensiveness though, it thus also became the powerfully centralized center of control over invest- ments, although it avoided control over operations and maintenance. 4.15 Perhaps because CMDA was primarily involved in constructing civil engineering works, it adopted the thoughtways of civil engineering. Those are special ways of thinking. They accept the goals of the enterprise as fixed and not subject to doubt; and they rely upon known, or at least know- able, solutions to problems. Knowing both ends and means, as the equivalent of unquestioned facts, technically expert persons can define problems and then solve them. Much of CMDA's work was of just that sort. Indeed it appears to have selected projects, most of them public works, that were amenable to the civil engineer's style, perhaps because they were amenable to that style. 4.16 There had been a large measure of agreement, supported by BDP, that physical construction was essential for Calcutta's revitalization. The origins go back directly to the cholera epidemic of 1958 and the subsequent WHO and UNDP efforts that led to the 1966 "Master Plan for Water Supply, Se -rage, and Drainage for C.M.D.: 1966-2001". These projects became a cen:erpiece within BDP; and, with parallel plans for transport, school, health, recreational, and bustee facilities, they comprised the largest bulk of BDP's action set. These are all projects that rely on the body of civil- engineering know-how that skilled engineers could bring to them. Not all the issues that fell under CMDA's comprehensive umbrella were so straightforward, however. 4.17 Underemployment and unemployment remain as fundamental a set of problems as the metropolitan area faces. Although there may indeed be consen- sus on the desirability of expanding employment, there is little agreement about means for doing so. Skilled economists everywhere struggle with prob- lems of poverty, and solutions seem to elude them all. The mindset of the engineer is the inappropriate cognitive style for a CMDA confronting poverty. It is the inappropriate style for the larger class of social problems for which scientific and technological knowledge is lacking, for there can be no technical manuals in these fields. And yet CMDA was compelled to confront problems for which known means were probably ineffective. 1/ Or perhaps it was in response to Albert Hirschman's dictum, "If you don't know what to do, make it comprehensive."  - 13 - 4.18 Given constraints on fiscal resources, there is seldom agreement on whether to invest first in education, or health, or transport, or sanitation, or business loans, or drainage, or job training, or direct enterprise, and so on. Some persons place greatest priority on one set of services; others judge the priorities differently. And even when there may be some consensus on the sectors to be supported, it is extremely unlikely to find consensus about which groups in which location should receive the services that will generate benefits. Even in a homogenous society, value preferences are bound to differ widely among social classes, castes, income groups, commercial and industrial interests, political parties, locationally defined groups, etc. A govern- mental program that helps one group might positively harm another; at minimum, opportunity costs and benefits can seldom be distributed equally, if ever. And so, there is seldom consensus on what should be done, even when the know-how is in hand. In that sort of setting, engineering know-how is not the critical skill. Instead a medium for negotiating, bargaining, and trading is needed. There can be no technical answers saying which group is right, which group's interest should be served. Wherever questions of redistribution are at issue, there can be no technically correct answers, no single right solu- tions to problems; only politically derived ones. 4.19 If there was a major failing of CMDA in the early days, it must have lain here. In its eagerness to do good, to get reconstruction underway, CMDA assumed the organizational and cognitive styles of the centralized control center, dealing comprehensively with a wide spectrum of services and infra- structure - mostly infrastructure. It became a bureaucratic establishment that assumed it knew which projects were most valuable and which techniques were most appropriate to them. 4.20 It seems plausible to conclude that, because CMDA became so thor- oughly involved in the sheer task of building, the purposes those works were intended to serve--and the groups they were intended to serve--soon fell from view. With the Bank's insistence on lending only for capital projects, CMDA's agenda tended to overemphasize public works. In turn the objectives of the enterprise became primarily the construction of public works. The means became the ends. The test of agency accomplishment came to be measured on the input rather than the output side. It was not contribution to social welfare or to human development or even to the qualities of the city that measured success. It was, rather, how many cubic yards of concrete were poured, how many miles of pipe laid, how many rupees disbursed. If CMDA's activities were motivated by efforts to ameliorate the burdens of poverty or to generate economic development of West Bengal, their interventions were at best indirect and their purposes were seldom made explicit. 4.21 Because every public works project has redistributive consequences, CMDA's civil works were, among other things, a significant force in redistri- buting benefits and costs among the plurality of publics living within the region. Unfortunately there are few data revealing the distributive outcomes of these projects, possible because, in technocratic fashion, CMDA's eyes have been focused on the inputs. Chapter VI of this memorandum reviews the  - 14 - evidence at hand; when supplemented by field observation, that evidence suggests that Calcutta's poor have benefited considerably from CMDA's efforts. Nevertheless, it would be desirable to have much harder evidence on the benefits to the poor than is currently available. Moreover, it would be helpful to discover which landowners and which thika-tenants profited most from increased property values, and who in other ways profited from this massive public-works enterprise. 4.22 In effect, in its effort to do good by doing the right things, CMDA became a minor technocracy within the Calcutta metropolitan setting. Although, there was much internecine rivalry between CMDA, CMPO, and the many other governmental agencies, the conception that seems to have driven CMDA was essentially apolitical. However complex and difficult, problems were seen as amenable to technical diagnosis and, then, to technical solution. Good engineers could say what should be done, and they were then ready to do it. Besides, improvements would be accomplished more readily and more efficiently, if the whole process were removed from politics. If subjected to public debate and to political negotiation, projects might then get modified away from the engineers' optimal solution. 4.23 The approach is of course not unique to CMDA. It is probably the dominant style among technicians in governments throughout the world. It derives from the ubiquitous concepts of rationality, efficiency, and profes- sional expertise. These are of course dominant thoughtways within the World Bank as well. It seems likely that Bank representatives encouraged CMDA to pursue that style. When Calcutta-I was formulated in consultation between professional staffs from the Bank and CMDA, there was an essential meeting of mindsets. There was thus also agreement on approach. But now, some several years later, both content and style are being questioned. 4.24 The present government of West Bengal has enunciated a policy to decentralize government. A major campaign has been launched among the 3000- odd panchayats throughout rural West Bengal, encouraging local community organization, self-initiative, and self-determination. Governmental officials report considerable success, as indicated by increasing agricultural produc- tivity. A parallel effort is now about to be initiated in the urban areas, where, for the first time in 14 years, municipal elections were recently held, in part in an effort to promote citizen participation in government and civic affairs. 4.25 Within the CMD the GOWB is in part responding to the long history of moribund municipal government. The long gap without municipal elections is an indicator that local democratic processes have been neglected. Large-scale voter participation in the municipal elections may be read as an indicator of rising citizen interest in civic affairs and perhaps even an expression of preferences with respect to them. At least, leading government officials argue so, and they are now prepared to act upon that interpretation.  - 15 - 4.26 State officials have initiated a long-term program to revitalize local governments. The first step was elections. They are now about to make cash block grants to each municipality, encouraging each local body to spend the money for whatever purposes it judges important. As part of the decen- tralization program they are also planning to distribute some functions currently centralized in CMDA to local municipalities and to other autonomous agencies. The new Town and Country Planning Act would convert CMDA from its present role as the central public-works financing, building, and decision agency. In its proposed form CMDA would eventually become primarily a center for planning and coordination, while retaining only vestigial responsibility for public works construction. 4.27 CMDA will retain authority to act where and when no others are equipped to, as it has in the past. But it is now to be charged with strengthening these other agencies so that later they will be better able to design and build on their own. To that end, CMDA will be assigning many of its own engineering staff to municipalities and other units, offering tech- nical assistance and advice where none had previously been available. CMDA's expertise is thus to be dispersed to other governments, and with that devolu- tion of capacities and functions, the West Bengal Government intends to reduce CMDA's concentration of power and simultaneously to foster local self-govern- ment. The idea, in effect, is to exploit CMDA's accumulated experience and skill for strengthening other governmental institutions. Among other aims they expect that different projects will gain high priority, that poorer residents will become beneficiaries, that CMDA's policy of concentrating resources in Calcutta and Howrah will be converted to a policy of support for outlying municipalities as well, and that, having initiated and built public works themselves, municipal governments will in the future be better prepared to operate and maintain them. 4.28 CMDA may thus be at a major turning point in its life cycle and with it the Bank's role in Calcutta as well. Having been nurtured by the Bank ever since 1973 when Calcutta-I was approved, CMDA has grown to become one of the most powerful and consequential agencies in the state. Now, in something like a self-sacrificial contribution, CMDA is being told to assume a major new task. It is to distribute its skills and manpower among municipalities with the aim, this time, of contributing to improved competency in a new federal system of local government. 4.29 The sources of this imminent change lie in both its successes and its failures. Having become so dominant an organization, it was bound to alienate some persons and organizations that might otherwise have wished to perform CMDA's functions. Some contend CMDA was arrogantly independent in making unilateral decisions on projects, even though they could concede that CMDA has built a great deal and accomplished much. Local officials have criticized CMDA for having failed to distribute its projects across the whole metropolitan area. Because the high-density core at Calcutta city and Howrah was judged to be most in need of public works improvements, outlying munici- palities received less than their leaders thought warranted. They are now making claims upon CMDA's resources for their own constituencies and for their own governmental institutions.  - 16 - 4.30 The past focus on new infrastructure has created a huge deficit in operations and maintenance. These activities were to have been the respon- sibilities of the municipalities and corporations. However, shortages of skilled manpower and of money have meant that operations have been inefficient and maintenance either absent or poor. CMDA has occasionally accepted respon- sibility for operations and maintenance, but it has never been enough. Primarily a construction agency, CMDA would have preferred that municipal governments and local sectoral agencies assume responsibility once a project was completed. For the various reasons noted, there has been a wide chasm in the structure of West Bengal government; and operations and maintenance have been neglected as a result. 4.31 Calcutta-I was initially concerned with operation and maintenance and with local finance for these purposes. A start was made on a program of reform which was given specific content in Calcutta-II. There remains a question whether enough was done to assure long-range maintenance. It is clearly easier for a lender to capital projects to build up liabilities for operations and maintenance than to deal directly with them. 4.32 The demise of CMPO in recent years has left a hiatus in planning. After many years of competitive debate over the appropriate locus of plan- ning--some arguing it must remain a separate function, others arguing it should be removed from politics, others contending it should be coterminus with development and construction work--the debate has now been resolved. CMPO's planning functions will be assigned to CMDA, with the objective of integrating the processes of planning, development, and construction. Simul- taneously, with close ties to the leadership of the government of West Bengal, it will also be closer to politics and subject to more political rather than tecinical decision making. 4.33 In retrospect, the mindsets that dominated in CMDA, the Bank, and the GOWB, probably made it inevitable that CMDA's early years were marked by technocratic centralization. In the context of current concern for citizen participation and for increased control by the poorest citizens, it is apparent that CMDA will become more decentralized, more politicized, and perhaps more sensitive to the preferences of its multiple clienteles. Calcutta-III will be the test of the effectiveness of that new approach. V. CONTENT AND STYLE OF CMDA ACTIVITIES 5.01 CMPO's Basic Development Plan departed sharply from city-planning doctrines that have long been traditional in the West and in most of the Western-trained world, India included. BDP rejected the idea of a master plan. Unlike plans for cities elsewhere, it was not a portrait of a desired future state with substantive focus on future land use patterns, compatible land use controls, and the placement of transport and other public facilities. Instead of planning for the locations of things and activities within the  - 17 - city's space, the plan focused instead on the wide spectrum of problems characterizing the social, environmental, and economic conditions of urban life. BDP was largely a program of immediate actions aimed at relieving a current crisis. It was unabashedly remedial, partial, and, at best, ameliora- tive. Although its authors were simultaneously concerned about longer-term development of the metropolitan region, their primary concerns were with actions to be taken across the sectoral spectrum within the short-term future. 5.02 There are inevitable hazards associated with such a seemingly short- sighted approach. Actions taken in the short-run frequently do turn out to have unintended, deleterious, long-term consequences. The history of well- intentioned civic reforms is strewn with examples of actions that boomeranged, turning back to hurt the very persons they were intended to help. Indeed, the bustee improvement program has been frequently criticized on just that count-- on the expectation that the fix-up, patch-up campaign would convert these decrepit dwellings into permanent fixtures. ("A hoax", one journalist called the bustee program). But BDP was put together with full awareness of such hazards. Its authors judged there were no alternatives at hand, that Calcutta could not afford the luxury either of high standards or of a long time- horizon, that it had better be fixed up and patched up, or it might blow up. The place to start was at present--to deal with the most pressing issues first. If future history were kind, a longer-term and more holistic view, only slightly sketched in BDP, might be possible later. Perhaps the planners might even then be permitted to formulate a developmental strategy that would be internally coherent, logically sequenced, and somewhat more comprehensive, dealing with larger wholes. For the present, it was enough that they compre- hend--that they understand what was most troubling the city's people and the workings of the city system. And then, whenever possible, remedial actions should be those that would open future options, rather than foreclose them. 5.03 And so it was that the program of remediation sought to reduce the incidence of illness and to improve positive human health, thereby expanding persons' prospects for more productive lives. The plan was designed to break the transport bottlenecks, thereby to expand mobility and accessibility, and thus to open more opportunities for employment and trade. By attacking the shortage of schools and teachers, BDP sought to expand educational possibili- ties and, in turn, to open life opportunities for young people who might otherwise have become illiterate adults. By expanding medical facilities and improving sanitation, it aimed to raise standards of physical health. 5.04 Although BDP was a program of band-aids, it included some major proposals for water works and transport. Although a first aid packet, it was conceived as a path with reasonable odds of also leading to long-run human betterment and as a path toward long-term positive development of the city system. It was the work of optimistic repairmen.  - 18 - 5.05 When CMDA took over in 1970, it accepted CMPO's BDP as its own-- including its underlying repairman's mindset. But, placed in thie role of responsible implementors of that patch-up program, CMDA officials quickly found that much that had been "planned" was not yet buildable. Some road projects and water schemes were well worked out, design engineers had prepared working drawings and were prepared to solicit bids in short order. But the Bustee Improvement Program (BIP) and much of the rehabilitation and expansion of the water, sewerage, and drainage systems were still but vague schemes when the programs moved from CMPO into CMDA's setting of comparative budgetary affluence. 5.06 CMDA was slow in getting started, slow in getting projects com- pleted, and slow in disbursing its IDA funds, even though it was led by remarkably able and dynamic senior officers. Elsewhere this report notes some technical and materials shortages as partial causes of the delay, but the causes must also lie embedded within the institutional arrangements that governed CMDA and within the approach to planning it inherited from CMPO. 5.07 The division of labor between CMPO and CMDA was shaped by a doctrine that conceived planning to be independent of (though obviously related to) implementation. As things worked out, CMPO did indeed run some operating programs at least briefly, the Garden Reach water-treatment project for example. But its prime function was to design a policy framework--a policies plan for the resolution of certain perceived problems. (Not the "solution", for the planners understood that these sorts of problems are never "solved", only resolved over and over again). In contrast, CMDA was to become the action agency. 5.08 Both outfits aimed to do regional development planning, but CMPO held that charter as its own. Conceived as a financing and project-coordinat- ing agency, CMDA was to follow the lead of CMPO's planners. With BDP com- pleted, CMPO was under no compulsion to undertake the next planning program. With BDP completed, CMDA had its marching orders. But much of BDP was still only general schemata, and a lot of detailed engineering design was needed before construction could begin on many of the planned projects. As a result, CMDA focused upon project planning; and that took time, more time than had initially been anticipated. 5.09 Because CMDA became the channel through which project monies flowed, it also became the channel for GOI and GOWB counterpart funds. As both banker and public works czar, and governed by its own board outside the normal structure of national, state, and local government, there were obviously strong internal and external imperatives driving CMDA into that position of concentrated power. Without the project fund, it might have become just another inept outfit trying to cope with hopelessly inadequate resources. 5.10 It seems unlikely that anyone deliberately intended that CMDA would become that center of concentrated power. Rather, having become the central locus of development activity and being driven by dynamic leaders who  - 19 - were eager to demonstratevisible accomplishment, centralization seems to have just happened. CMDA was created in response to perceived need. It was given a flexible charter. It sought in turn to respond to demands and requirements as these arose. And so, as a reactive, responsive,and adaptive organization, it was shaped by the institutionalenvironment in which it worked. Without a plan, without anyone wishing it so, CMDA simply expanded to fill the voids left by the absence of effective municipal governmentsand aggressivespecial- ized agencies. 5.11 The experience in Madras offers an instructive contrast. The Madras Metropolitan Development Authority (MMDA) was created in 1973, three years after CMDA's inauguration. It was molded around a very different model, however. Madras was fortunate to have had a long history of stable government and several active and effective sector-specificagencies. The Tamil Nadu Housing Board had built many housing units, as had the Slum Clearance Board. The state highway dept, the state bus company, and the recently established water and sanitation board were all equipped with professional staffs and engaged, albeit with limited funds, in their respectivesectoral tasks. MMDA took on the role of coordinator among them, seeking to gain a greater degree of program and project coherence than had been previouslyobtained. 5.12 When the Bank made its first loan to Madras in 1977, Bank represen- tatives effectivelyreoriented the agendas of those several agencies, working through MMDA as the metropolitan-wide organization that encompassed all sectors. Bank representativesintroduced issues of social policy, raised concern for the lowest income groups, and suggested new approachesto shelter and to environmentalimprovement,all of which were quickly absorbed into the working agendas of Tamil Nadu and Madras agencies. The medium was not the kind of central control exerted by CMDA. MMDA employed instead a style of persuasion, mediation, arbitration, and negotiation among equals. Project funds were channeled directly to the sectoral agencies, rather than through MMDA. But it appears that MMDA's role has not been unduly constrainedby the lack of direct control. 5.13 Madras has been engaged in formal town planning ever since the 1920s. It has prepared and then used a series of master plans to guide infrastructural installationsand land development. A long-term strategy plan for the entire metropolitanarea's spatial structurehas just been completed, and detailed land use and facilitiesplans will soon be prepared. MMDA is the statutoryplanningagency, having control over land use zoning, a rare phenom- enon in India. In all these respects,Madras stands in marked contrastwith Calcutta. Madras's planning-programming style has been highly formalized. Explicit attempts are being made to match short-term projects to fit into long-term development strategies. It is undoubtedly true that it does not always work out that way. Nevertheless,MMDA's style is so strikingly dif- ferent from Calcutta'sas to invite comparison.  - 20 - 5.14 Calcutta has never had a master plan, although CMDA is now being instructed to prepare one.!/ The present Government of West Bengal has not yet developed anything even resembling a long-term development strategy for the state's wavering economy, even though GOWB has declared its aim of redis- tributing income, wealth, and power, even though there is virtually unanimous agreement that income generation is a prime necessity. The tradition in Calcutta and West Bengal, no doubt often heavily influenced by external events, seems to have been to ameliorate current problems as they arise, to try to remedy the most pressing conditions of the moment, to deal with the future when it arrives. Moreover, projects have been selected for their intrinsic and immediate benefits; it has not been necessary that theayfit into a mutually reinforcing and long-term development strategy. Policy making in Madras seems to have been shaped by a longer-range perspective and a more holistic world view. 5.15 A brief reconnaissance of the Madras program suggests that, in sharp contrast to Calcuttas centralized structure, a flat-structured multi-agency organization has been erected that seems to be working well. Although it may be something of a technocracy, it is not dominated by a unitary body. Profes- sionals in each agency deal informally across agency boundaries with their professional counterparts, giving the impression of apolitical management. MMDA appears to have succeeded in doing comprehensive development planning and coordinated programming with diffused control. Without further study we cannot say whether the welfare returns from CMDA's organizational structure and planning-programming style have been greater or less than those deriving from MMDA's. The similarities and differences that mark these two development authorities virtually compel a comparative evaluation. The findings of such a study should prove highly instructive to the Bank's future efforts in metro- politan-wide and multisectoral programs. VI. THE.WELFARE OUTCOMES OF THE CALCUTTA URBAN PROGRAMS 6.01 The projects assisted by the IDA credit were parts of larger pro- grams and, in an assessment of outcomes, cannot be identified separately. CMDA has attempted an assessment of its overall programs. The results - partial, largely qualitative, and limited by the information available - give some indication of the welfare outcomes of the programs. 6.02 The remedial nature of the programs is reflected in the results. While an effort was made to extend services into areas and to populations not previously served both within Calcutta and Howrah and on the fringes of the built-up areas, much of the early efforts were devoted to repairing and 1/ An "Outline Development Plan" as required under The West Bengal Town and Country (Planning and Development) Act, 1979.  - 21 - improving existing systems - making up for long-deferred maintenance of roads, pumping stations, drainage canals, bus fleets; easing traffic flows at critical points with bridges, flyovers, and road widenings; and improving existing sewerage, drainage, and water supply systems. Individual projects were scattered as were the critical points in the systems, but most were located within the built-up areas of the CMD where most of the prior invest- ment in urban infrastructure had been made. 6.03 While the projects were concentrated in a geographical sense, mainly in the cities of Calcutta and Howrah, the results of many were further localized within the area. Sewerage and drainage facilities were extended into previously unsewered pockets; water taps and improved sanitation were installed in selected bustees; traffic congestion was relieved at constricted points; improved quarters were constructed to house businesses displaced by road and bridge construction. Widespread deficiencies were met with wide- spread efforts to correct and improve. In some cases localized results are already evident; in other cases they depend on further progress in rehabil- itating larger systems. The benefit of two large investments in treatment plants will be considerably delayed pending the completion of the net works they are designed to serve. Outcomes which benefit the general public can also be identified. The duration of monsoon flooding has been reduced; the incidence of water-borne disease and cholera has declined;!/ and the movement of traffic has been eased at critical points.. 6.04 Increased supplies of piped water are a measurable outcome of the program. The 45% increase in supply to the CMD between 1966 and 1976 is largely attributable to CMDA. (45% was about double the population growth during the period.) A further 20% increase is expected by 1982. The growth in supply has been accompanied by an extension of service into new areas and by increasing availabilities in areas inadequately served. While average supply per capita remains much higher in Calcutta than elsewhere in the CMD, public supplies have been extended to many areas outside Calcutta for the first time. By 1982 all 33 municipalities and about 40 nonmunicipal urban areas will be receiving public supplies of piped water; only 24 of the former and none of the latter were served by public facilities when CMDA began. A large but unknown number of households benefit from this program. An example of increasing availability to areas with poor previous service is the instal- lation of taps in the bustees, more than half of the population so served being in Calcutta. Further improvements of the Calcutta water-distribution system, to provide better service for the southern part of the city and adjacent areas, are under way. A large population will be affected by these system improvements. 1/ Between 1970-72 and 1977-78 reported deaths from water-borne diseases in Calcutta city and surrounding urban areas fell by nearly a half (from 4700 to 2500 cases). It can be assumed that the incidence of illness from the same causes showed a similar trend. The reported cases of cholera and deaths from cholera showed an even steeper decline during the same period especially since 1974 (PCR Table 1).  - 22 - 6.05 Outcomes of programs to improve the removal of sewage and storm water from settled areas are more difficult to identify. Sewerage systems have been extended to areas previously unsewered, and separate drainage sys- tems have been installed where none previously existed. Over 10,000 of the area's service privies have been converted to sanitary latrines. Yet, Calcutta's inadequate drainage system has not been improved very much. Major parts of the most heavily settled sections of the city are still subject to flooding from monsoon rains. Calcutta has a combined system for sewerage and storm drainage which has never been quite adequate to the task. The CMDA program has aimed to provide separate systems in new areas and to improve the combined system where it exists. The results of the efforts in new areas where separate systems have been installed are evident, and an unknown number of households have benefitted. Efforts to improve the operations of the combined system are not yet fully successful, although it is claimed that the duration of flooding has been reduced. (The target is to limit normal monsoon flooding to six hours maximum duration.) Because some improved parts of the system have not yet been integrated into the whole, the results are meager; and the system's general effectiveness is reduced by heavy silting from long neglect, not yet completely corrected. In Howrah the impact of a new sewage- treatment plant will be delayed until the collection system it is designed to serve has been constructed and house connections have been made. 6.06 The Bustee Improvement Program has brought environmental improve- ments to pockets of CMDA's poorest inhabitants scattered through the area, more than half in Calcutta city itself. By 1977/78 the program improved water supply, drainage, and paved walkways and introduced public lighting into bustees inhabited by about 1.4 million people. Half-a-million more are expected to benefit from the program by 1982. Although this program was not assisted by Calcutta-I, it was an important part of CMDA's activities and was assisted by Calcutta-II. 6.07 The bridges, flyovers, and road improvements constructed by CMDA during the period of the IDA credit are all being used very intensively by a great assortment of the extremely mixed traffic that is typical of Calcutta. The general public, including all classes and many occupations, appears to have benefitted from the improved access and increased road capacity provided by these projects. Improved access to Howrah Bridge in Calcutta and at Howrah Station are dramatic examples. The public has also benefitted from efforts to improve public transportation under CMDA's program. 6.08 It would thus appear that a fairly large but unknown portion of the CMD population has received some sort of direct benefit from the projects completed under the CMDA program. If in some cases an overall improvement is not perceptible - as is probably the case with traffic congestion in some areas1/ - the situation would have been even worse without the program. 1/ Particularly those affected by the current construction of the subway.  - 23 - 6.09 Increased spending on public works has indirectly generated positive outcomes. Local suppliers of materials and equipment, owners of land acquired for projects, owners of bustee buildings, local contractors, construction workers and merchants all have felt the impact of CMDA's spending. It has been estimated that spending retained in the CMD, as a result of the program, has been split almost equally between purchase of materials and payment of wages, and that the total amount spent between 1970 and 1982 has created employment of over a million man-years. While this employment is largely for construction and is therefore temporary, the continued operation and mainte- nance of new facilities will result in about 75,000 permanent jobs; spending for materials and labor split about 60-40 (PCR Table 1). Much of the con- struction labor has come from outside the CMD; that required for operations and maintenance is expected to consist largely of CMD residents. Little more is known of the impact of CMDA's spending on the various groups in the CMD, except for the fact that some of the benefits expected to accrue to bustee dwellers have been taken by owners of the huts (thika tenants) in rent 1 increases /. 6.10 The assessment of the direct benefit of the programs assumes that they will be sustained - that the facilities and equipment constructed and supplied will be operated and maintained satisfactorily. However, the respon- sibility for maintenance remains a critical, but unresolved, aspect of the program at this time. 6.11 In the end, what can be said about direct benefits to Calcutta's poor? Specifically, are the poor of Calcutta better off because of the works that Calcutta-I made possible? That question was put directly to several Bank officials, to several senior officers in various parts of Calcutta government, and to several other knowledgeable Calcuttans. The common response was an ambiguous ambivalance. Few, if any, were prepared to assert that positive benefits accrued to lowest-income residents, including the thousands of pavement dwellers whose numbers do not appear to be lessening. When led down the roster of completed projects and pressed most respondents, conceded that conditions in the bustees are better, that water-supplies are improved, and so on. And yet when asked, "are conditions of life in Calcutta better?" few would say yes; fewer still would say certainly yes. 6.12 Perhaps an alternative question would have provoked more meaningful and useful responses. Perhaps the question should have asked whether things today would have been worse, had CMDA's program been less ambitious. Given the persistent growth of population, surely the pressures on urban services and facilities would have been far more severe and the quality of life less. l/ Between 1974/75 and 1979/80 house rents in unimproved bustees increased by 16% while those in improved bustees increased by 43% (PCR Table 1).  - 24 - 6.13 CMDA sought to alleviate the worst conditions and to make a start on improving overall environmental conditions. It has clearly done both. The works it has installed might have been more widely distributed over the metropolitan terrain, rather than being concentrated in the metropolitan center; but they had focussed on the center because conditions were worst there and the concentration of poor people was greatest there. Extensions of water, sewerage, and drainage services to unserved areas virtually assured that the previously unserved populations, i.e., the poorest persons would be served, many for the first time. 6.14 In the end, did Calcutta-I effect a redistribution of urban services to the poor and thus improve the qualities of their lives? Despite the hesitancies of our interviewees, we believe the answer must be a categorical yes. In addition, CMDA's program has created a ground for hope. In stark contrast to the late 1960s when nothing was being done and little was expected, recent changes have made optimism possible. VII. IMPLICATIONS FOR BANK LENDING PRACTICE 7.01 When the World Bank joined the Calcutta improvement enterprise, it apparently did so with full awareness of the institutional and political facts that controlled. When the Bank chose to support CMDA's efforts, it explicitly chose thereby to accept the CMPO approach and the BDP specifically. When the Calcutta-I work agenda was drawn, the Bank explicitly supported the patch-up and fix-up style, with project funds being selectively designated for water supply, sewerage, drainage, minor transport improvements, garbage collection, modest housing experiments, and little more. Within the Bank the project initially drew criticism for its lack of specificity and for support- ing even so wide an array of project types with little preliminary engineer- ing justification. Later on, in its Calcutta-II stage, it was dubbed the "Christmas Tree Project" by skeptics within the Bank. Some Bank staff members may have perceived the new urban projects department as an invader of the more-traditional sectors within the Bank. Moreover, the open-ended style of these urban projects must have seemed to violate Bank standards for rigorous economic and engineering analysis. 7.02 Calcutta-I was indeed a significant departure for the Bank. Like CMDA itself, it represented a bold experiment.. Like CMDA, it was formulated quickly in response to manifest and immediate need. Like CMDA, it was seeking to rebuild the assortment of infrastructural subsystems that comprise the city system, and yet it was content to be rather unsystematic at the outset in the interest of getting construction work started. And, like CMDA, the Calcutta-I loan was seen as a medium for initiating a long-term process of institutional development--as a first step that might eventually build organizational and political capacity for coping with Calcutta's problems.  - 25 - 7.03 CMPO, CMDA, GOWB, and the Bank were approaching those problems as though with a single mind. The setting was to be the entire metropolitan area, for this, not Calcutta alone, was the urban system. Worst conditions were to be attacked first. Next steps were to be decided upon later. The important thing was to get started, to initiate a process of confronting the city's dilemmas. Later on they could worry about which products were to be created, including the institutional products resulting from the joint enter- prise -- including the political consequences, which were inherently unpre- dictable anyway. This was to be an adaptive and evolving search for ways of keeping Calcutta an economically viable and habitable metropolis. Neither CMDA nor the Bank could say at the outset how best to accomplish those ends. They did agree only to start a process of mutual learning. 7.04 It appears now in retrospect that Calcutta-I served an important function within the Bank's new urban projects department. It was not clear at the time the department was inaugurated what special roles it was to fill within the Bank's larger program plan. By 1970, when the department opened, it had become unavoidably clear to development economists, demographers, and public officials everywhere that the fact of large-scale urbanization had to be addressed frontally. Mass rural-to-urban migration everywhere was turning towns into metropolises that threatened to spill over the ten-million popula- tion mark in countries on every continent. Although the Bank had a great deal of expertise in agriculture, power-generation, manufacturing, and other directly productive sectors of the economies, the urban sector was still something of an enigma to development economists. It was clear that something important was going on there, that cities were subsystems of some kind within national and regional economies, and that they affected economic efficiency. And yet, development economists had nevertheless ignored them. Moreover, it was apparent that poverty was extreme within many cities and that there was little diagnostic expertise within the Bank concerning sources of urban poverty and even less knowledge of appropriate therapies. 7.05 The urban projects department was charged with finding ways of dealing with those questions. To take on Calcutta at the virtual start of its career was courageous at least, and some said foolhardy. If so little was known about urban problems in general, how could this novice department hope to cope with such an extreme case? With no prior Bank experience to draw upon, other than experience in installing water and other subsystems in city settings, it was not evident how the department could effectively deal with urbanism as a systemic phenomenon. One could build roads in cities, or sewerage systems, or water-treatment plants, or housing projects. But how could one confront development of an urban system? 7.06 A decade later, it is not apparent that answers to that question have yet been satisfactorily formulated. In the early 1970s, the question had scarcely been asked. And so the Calcutta enterprise became an important initiation for the Department -- an all-out exposure to the problem of dealing with the urban problem. In turn, Calcutta has proved to have been an impor- tant and valuable learning setting for Bank staff and, through them, metro- politan officials around the world.  - 26 - 7.07 Calcutta's was the first multisectoral urban project. Based on that experience, the Bank has by now funded several others--including those in Madras and Manila. It would be useful to commission an overall evaluation of these, comparing them with single-sector projects in other places, asking whether the Calcutta-type strategy has proved as valuable elsewhere as it appears to have been in Calcutta. The present audit is not able to make that larger judgment. 7.08 A number of observations are suggested by this review, however. The multisectoral and metropolitan-wide character of this kind of enterprise appeared initially to profit from having a single focal point within the governmental apparatus. The appraisal report for Calcutta-I was explicitly outspoken about the aim of creating a single agency to oversee the development program. It would obviously be convenient and efficient for the Bank to negotiate with one managing organization, and it would be far easier to supervise and audit the project if a single agent were accountable. But the Madras experience demonstrates that it is quite possible to satisfy those aims working with a flat-structured organization that relies on negotiation, rather than a vertically structured organization that relies on administrative authority. It is quite reasonable to expect that a careful comparative analysis would find the Madras style to be the more effective one. 7.09 Because Calcutta had insufficient financial resources of its own, the Bank was able to influence not only what would be done, but how the government would organize itself for the reconstruction task. In return, CMDA was able to use the Bank alliance and the project funds to remove itself from the normal processes of government and to gain considerable autonomy. The degree of independence and the degree of centralized control that concentrated in CMDA were direct results of both the Bank's preferences and CMDA's use of its Bank connections. To be sure, its centralization and autonomy also reflected the weaknesses of related government agencies within CMD, for few of them could have responded effectively to the proffer of IDA funds. 7.10 In retrospect now, it is not evident that the unitary, centralized model was the most effective one. At the time when Calcutta-I was being designed, there was no alternative agency to deal with. However, had the Bank and CMDA approached the institutional deficiencies by seeking to use IDA funds to help strengthen an array of other agencies--whether defined by location, sector, or clientele--Calcutta-I might have contributed to more competent and responsive local government. In the interest of efficiency and expediency-- in the interest of getting things built quickly--the centralized control option was chosen. It worked quite as intended. A capable and effective institution was created. However, the larger institutional setting may have been weakened, or at least deterred from growing, as a result. 7.11 Some Bank officials have questioned the wisdom of encompassing so many subprojects within a single project loan. That must have been some of the critical intent of the "Christmas Tree" label that got attached to Calcutta-II. It seemed to some that this had become something resembling a  - 27 - program loan, rather than a project loan; they contended that each subproject should have been subjected to the same quality of rigorous analysis that Bank analytic standards demand. In effect, the Bank was extending a line of credit to CMDA, allowing an uncommon degree of discretion to the borrower about actual outlays. Some must still find that policy unduly permissive. 7.12 On the other hand, there were some who urged even greater trust in CMDA and GOWB judgments concerning investment decisions. A major purpose of the Calcutta urban projects has been to help build strong institutional capability for coping with the metropolis's problems. In any final score sheet on the effectiveness of this series of loans, the Bank must credit itself and the Indian participants with high marks on that count. CMDA became more successful as an effectuating agency than anyone had dared fore- cast at the outset. Its problem now may be that it has become too powerful and has thus threatened other governmental units that it is able to overpower. But that issue aside, there can be no question about the effectiveness of the Calcutta urban projects in helping GOWB to build a remarkably able organiza- tion, well-equipped to conduct sophisticated problem analysis, to design and build quality civil works, and to take care of itself in the hurly-burly of bureaucratic rivalries. With a mature CMDA in place could the Bank then simply assign an open line of credit to CMDA, relying upon that indigenous agency to do project appraisals and post-hoc audits to accord with the Bank's own quality standards? Might the Calcutta urban projects become more nearly wholesaling than retail lending operations? Having succeeded in helping GOWB to nurture an adult planning and development agency, can the Bank now turn over to it the kinds of tasks that are normally performed by Bank staff? 7.13 Calcutta-I was put together hastily without the kind of detailed preparation that is normally expected, but it was important to both the Bank's and CMDA's respective purposes that a loan be made quickly. That initial negotiation led in turn to a continuing process of discussion, design, criti- cism, appraisal, and reappraisal in which the Bank and CMDA representatives have been colleagues in a joint enterprise. Calcutta-I was the medium through which that enterprise was joined. 7.14 Calcutta-II was a much larger assortment of subprojects, each drawn in considerably more detail than in the initial project. Bank personnel played key roles as project designers in the formulation of Calcutta-II, roles that might have been assigned to CMDA personnel had the agency staff been as mature then as it is now. Like the first one, this project was a collection of ad hoc confrontations of infrastructural deficiencies; and like the first one, a major payoff was to the development of CMDA as an institution of competence. 7.15 Calcutta-III reflects the accumulated experience of both the Bank and CMDA, as illuminated in the present political context.L/ It aims to foster economic productivity by making the city a more efficient setting for 1/ Third Calcutta Urban Development Project, Project Brief, April 30, 1981.  - 28 - economic activity. It aims to help CMD to improve its capacities for effec- tive management, effective decision-making, and effective civic action. As with its predecessor projects, Calcutta-III is essentially programmatic in style. Because so many of Calcutta's problems are either ill-defined or lack ready solutions, the primary objective remains support of the metropolitan area's capacity to cope - to explore, to experiment, to learn from mistakes, to pursue a process of social learning. That requires an organization that is flexible and adaptable. It also requires one that is sensitive to the wants of competing interest groups and respectful of political differences. 7.16 Calcutta-I and Calcutta-II were directed primarily to building the missing components of the city's physical plant and to repairing the most decrepit physical facilities. The many subprojects were of the kinds city governments have traditionally built and that the Bank had financed in other places before. The Calcutta urban programs differed from projects in other cities only in the sense that they encompassed a diverse array of infrastruc- tural works within the same loan agreement. They might more properly be called city-building projects than urban-development projects, however, because they comprise components of the city plant only. 7.17 Calcutta-III will go beyond that limited range of efforts. Now that a cadre of sophisticated analysts and managers is in place in CMD, new programs can be directed to generating regional economic growth, to generating incomes for families, to supplying specialized social services, and to improv- ing the effectiveness of government. The agenda for the next round of joint Bank-Calcutta activities includes considerations of taxation, land values and land tenure, land use controls, improved operation and maintenance of installed infrastructure, expansion of CMDA's planning roles, and increased emphasis on roles of municipalities and sector agencies. 7.18 The new Town and Country Planning Act will place responsibility for planning within CMDA. It is quite possible that old-fashioned models of unitary, physical master plans, derived from early British town planning practice, will be readopted here. It is also possible that CMDA will seek, rather, to search for effective ways of promoting economic growth, improving the qualities and distribution of social and human development services, and helping local governments and local sectoral agencies to improve their respon- siveness to citizen wants while also improving their internal managerial competencies. Calcutta-I was primarily oriented to infrastructural products. CMDA and GOWB are now ready to improve governing processes. 7.19 GOWB's plan to decentralize government will surely affect the ways CMDA does its work in the future. It is scheduled to become far less a public-works construction agency than a planning, financing, and coordinating body. The processes of decision making within CMD are likely to become less centralized and authoritarian during the next period of CMDA's development. It is likely that more agencies and more lay groups will be involved with more pressure to do some things differently from ways CMDA's professional staff believes is right. Present expectations, voiced by officials in CMDA and  - 29 - GOWB, project an image of CMDA that rather resembles MMDA. They see a future CMDA that is primarily concerned with the processes of deciding, rather than with executing public works. They see decision processes becoming more open, engaging more diverse participants and agents, and, therefore, increasingly alert to the preferences of groups that have so far been largely excluded from CMDA's decision system. 7.20 In that projected role, CMDA should be even better equipped than it has in the past to design its own programs, increasingly relying upon its own capabilities and those of the increasing number of participating agencies. If so, it should become less dependent upon expertise of Bank staff. In turn, it should become increasingly able to manage broad program loans of the kind India's railways and telecommunications have long enjoyed. 7.21 CMDA has come a long way since Calcutta-I was designed. It grew to become a central power within CMD. It may now be at a stage in its devel- opment when it can become increasingly independent of the Bank, in part because it will become increasingly dependent and reliant upon local govern- ments and others within CMD. 7.22 The 9-year brief history of CMDA-Bank relations suggests that the initial prospectus was right in emphasizing the importance of institution building. It also suggests that the initial perception of a wholesale-like program loan had great merit over a series of retail-like project loans. Now that CMDA has come of age, the question must be asked whether CMDA is now sufficiently able to handle its own monitoring and appraising so that these roles can be fully assumed by CMDA staff, freeing Bank staff for other activi- ties. 7.23 In turn, the CMDA history asks whether this experience can be transferred to other metropolitan development agencies elsewhere, whether in India or in other countries. The answer to that question hangs on whatever might be peculiar to Calcutta and special to the individual persons who have been involved in shaping CMDA's history. We are inclined to agree with com- mentators who have contended that Calcutta is unique and that CMDA's leaders have been too. We are nonetheless inclined to believe that the experience and accomplishments here can be of value to many cities where able people care about the qualities of people's lives. The lessons of the Calcutta experience suggest now that the model of the centralized concentration of authority is not necessarily the most effective one. That is the conclusion being drawn by the GOWB officialdom. It is also the conclusion drawn by this audit.1- 1/ The Region notes that the centralized model may, however, have responded to the needs of Calcutta in the early 1970's and has evolved over the years so that CMDA has become an agent for strengthening other insti- tutions and for developing a more balanced institutional framework. I  - 31 - PROJECT COMPLETION REPORT INDIA - Calcutta Urban Development Project I (Cr. 427-IN) I. PREFACE 1.01 The Project which the Association helped finance with a Credit of US$35 million equivalent was conceived as the first in a series of opera- tions to improve the delivery of urban services in the Calcutta Metropolitan District (CMD), including the management, financing, and operation and main- tenance of such services. The objectives of this first project were to help initiate this program and to address certain major service deficiencies in critical sectors such as water supply and sanitation. 1.02 The above objectives were by and large achieved permitting the Association to appraise a second project in late 1976 and grant a credit of US$87 million equivalent to finance a broader based program, more heavily oriented to fiscal and administrative reforms. Implementation of the second project is almost in line with appraisal expectations. The Association is now discussing with the Government of India (GOI), the Government of West Bengal (GOWB), and the Calcutta Metropolitan Development Authority (CMDA), a possible third project. 1.03 The Project was the Bank Group's first urban project in India, and the first designed to support a broad program of urban works financed and supervised by a single development agency. 1.04 This project completion report is based on information obtained from Appraisal Report No. 159a-IN, President's Report No. P-1302-IN, supervi- sion reports, project correspondence, discussions with GOWB and CMDA staff, and a project completion report and data prepared by the Programming and Monitoring Cell of CMDA. Although not a covenanted requirement under the terms of the legal agreements signed in connection with the granting of the Credit, CMDA agreed to prepare a completion report in order to take a retro- spective look at its own operations as a basis for self-evaluation. The text of their report is included as Annex 5. II. INTRODUCTION 2.01 Calcutta was founded in 1690 by the East India Co. on a narrow strip of land on the east bank of the Hooghly River, about 200 km upstream from the Bay of Bengal. 2.02 Except for the central part of the city where some attention to planning and installation of urban infrastructure was made, Calcutta and its surrounding district grew haphazardly over the years, becoming at independence in 1947, the largest city, the leading port, and the greatest industrial center in India. 2.03 The war years, a famine in 1943, and the partitioning of a part of its hinterland to form East Pakistan (now Bangladesh) in 1947, swelled the population of the CMD to about 5 million, virtually doubling its growth between 1931 and 1951.  - 32 - 2.04 Since 1951, the CMD has grown more slowly than any other major Indian city, growing at about 2.2% a year compared with over 3% for other cities and 2.1% nationally. In 1972, at the time of appraisal, 8.3 million persons lived in metropolitan Calcutta. Today the population is estimattedto be 9.5 million. III. SECTOR 3.01 The plight of Calcutta and its people has been well documented over the years. In 1958, a cholera epidemic provided a catalyst for a thoroulgh review of its problems. The World Health Organization (WHO) mission reported on extremely unsanitary conditions in the city and recommended a large program of investments in the water supply, sewerage and drainage sectors. 3.02 A number of reasons have accounted for urban deterioration in Calcutta over the years. First, the influx of refugees from East Pakistan exceeded Calcutta's ability to accommodate them; second, a relative decline in the local economy, particularly in the jute, tea and engineering industries; third, the Calcutta urban area, known as the Calcutta Metropolitan Dist:rict (L'0), was not a single administrative unit but a collection of two Municipal Corporations (Calcutta City, on the east Bank of the River Hooghly, ancl Chandernagar on the west bank, north of Howrah, 33 municipalities, 37 towns and 544 semi-urban areas); fourth, there was a lack of financing for caLpital improvements (for instance, no new primary schools had been built in 20 years); fifth, existing executing agencies had not performed well; and sixth, Calcutta had a history of labor troubles and unstable Government. 3.03 in the provision of basic services, the following was the status at the time of appraisal: (a) In Water Supply, the average supply was under 10 gallons per capita per day (gpcd), with about 2 million people receiving less than 2 gpcd. (b) In sewerage and drainage, only Calcutta City (population three million) had a sewerage system in the CMD but that only covered two-thirds of the population and half the area. (c) In the Transport Sector little investment or maintenance had been done in many years, and traffic management was poor. (d) In Housing, over 3 million people lived in squatter or slum conditions.  - 33- IV. PROJECT FORMULATION A. Background 4.01 In 1960, a Bank economic mission voiced the opinion that the Central Government should accept a direct and special responsibility for the improvement of conditions in Calcutta, and that an effective body be established to carry through an enlarged program of municipal reconstruction and development. A Bank technical mission visiting Calcutta in 1963 concurred with a WHO proposal to create a "metropolitan authority" to coordinate invest- ments in water supply in Calcutta. 4.02 The Bank Group's interest in Calcutta predates the above 1960 mission by some considerable time but was oriented to the then traditional sectors such as power .and ports. The 1960 mission was the first to focus on the need for the creation of some form of planning group, supported by financial assistance from the Central Government, to reverse the deterioration of Calcutta. In 1961, the GOWB established the Calcutta Metropolitan Planning Organization (CMPO) as a Directorate of the State Government. The CMPO was strongly assisted from the start by the Ford Foundation. 4.03 In 1966, the GMPO produced its "Basic Development Plan (BDP) for the Calcutta Metropolitan District 1966-86" based upon a number of studies that had been undertaken, including a Master Plan for Water Supply and Sewerage and Drainage 1966-2000, a Traffic and Transportation Plan for the CMD 1966-86, and an Howrah Area Development Plan 1966-86. The BDP proposed a program of physical investments and administrative and fiscal reforms. 4.04 Between 1966 and 1970 little was done towards implementing any of the programs. In late 1970, however, during a period of President's rule, the Calcutta Metropolitan Development Authority (CMDA) was established. Its purpose was to coordinate, finance and supervise the execution of projects within the CMD, using existing implementing agencies such as the Calcutta Corporation (CC), the Calcutta Improvement Trust (CIT), the Howrah Improvement Trust (HIT), and the Calcutta Metropolitan Water and Sanitation Authority (CMWSA). It was granted powers to borrow, appoint staff, select projects for implementation, draw up its own budget, and make such rules and regulations as was considered necessary to discharge its functions. The State Government also assigned to it half of the net proceeds of a newly created tax (octroi), levied on goods entering the CMD, to provide an additional source of revenue for financing of the development of the CMD. B. Identification and Preparation 4.05 An urban mission visiting Calcutta in early 1972 recommended a project as there were now a number of factors favorably disposed towards a lending operation there. First, there was an organization (CMDA) in place whose orientation and approach were supported by the Urban Projects Department, namely (i) that CMDA covered the entire metropolitan area and a broad spectrum of urban investments, and (ii) investment plans were concerned with the LMD in the context of the State and the Region. Second, definitive funding arrange- ments were made for financing the investment plans. Lastly, there was the  - 34 - improved political situation. In mid-1972 a recommendation was made to the senior management of the Bank for inclusion of an urban project for Calcutta in the lending program for FY73 in the amount of US$30 million. Related to the recommendationswas a question seeking management's advice on whether the project should support CMDA's program as a whole, or should be identified with specific components for financing. Management agreed to a project, with funding ranging between $20 to $30 million, with preference for financing specific elements in CEDA's investment plan. 4.06 A July 1972 mission identified six sectors in CMDA's program--Water Supply, Sewerage and Drainage, Traffic and Transportation, Garbage Disposal, Environmental Hygiene, and Shelter, within which specific subprojects would be selected to form part of the project. A number of stipulations would be made with respect to the subprojects selected (i) that the major part of their expenditures should occur during the years 1973-75; (ii) that subprojects which already had clearly identifiable funding would be excluded (for example, the bustee (slum) improvement program); (iii) that subprojects which had the potential for problems or a long negotiation period (such as the subprojects in transport involving bus and tram companies) would be excluded; and (iv) that subprojects with a significant land acquisition component would be excluded as the Bank did not finance such expenditures. C. Project Objectives 4.07 The stated objectives of the project were to support the investment effort, strengthen the planning and execution of CMDA's Investment Program, and assist in developing measures to strengthen the operation and finance of services. While the perspective of the objectives was viewed as long cerm, subsequent lending by the Bank for urban development in Calcutta would depend on the above objectives being addressed or met. 4.08 The components of the project would be treated as elements in an urban investment program rather than as self-contained subprojects. The program was designed towards improving urban services and facilities irn Calcutta, impacting on the living conditions and general functioning of the CMD, particularly in relation to the urban poor. Sector and inter-sector priorities were directed toward that end. A more complete description of the project, including sector components is given in para 4.15. D. Bilateral Aid 4.09 At about this time, two church groups (German and Dutch) and two bilateral agencies, the Swedish International Development Authority (SIDA) and the Netherland Investment Bank for Developing Countries, expressed an interest in Calcutta. SIDA was interested specifically in the health component of C.dDA'sprogram (which was not part of the project) and sent an observer to Calcutta during appraisal. Nothing materialized, however, and the Association was to remain the sole external agency. In late 1974, the Netherlands Govern- ment expressed an interest in financing a social welfare project in Calcutta. It is now financing the Khatal (buffalo) Removal Program as part of the Second Calcutta Urban Development Project.  - 35 - E. Appraisal, Negotiations and Approval 4.10 The Appraisal Report was based on the findings of a nine man mission that visited Calcutta during November/December 1972. 4.11 A Decision Memorandum issued subsequent to appraisal included the following: (a) The decision meeting agreed there were good reasons for IDA to proceed with the proposed credit. (b) The meeting endorsed the recommendations of the appraisal mission in safeguarding the proper operation and maintenance of facilities. (c) The meeting noted there were three major civil works contracts (for the Garden Reach Water Works, Tollygunge Sewage Plant, and Buckland Bridge) which were suitable for letting under international competitive bidding (ICB), each being in the $4/5 million range. Contracts for the water plant and bridge were expected to have been awarded by the time of Board approval. GOI, however, would not agree to ICB for the sewage treatment plant. At that time also there was a dis- pute with India over civil works procurement, and resolution of this was not expected before Board approval. The meeting, therefore, recommended deletion of these contracts from the project. 4.12 At negotiations, the Indian Delegation proposed that a number of schemes in the suburban areas should be included, and that 120 truck chassis, in the Environmental Hygiene component, slated for tendering under ICB, should be permitted to be procured under local competitive bidding (LCB) procedures. 4.13 The Association suggested inclusion of six schemes involving minor civil works in the Sewerage and Drainage, and Environmental Hygiene Components, and LCB procurement of the trucks. In doing so, however, the Association's percentage of financing would have been reduced to under 33%. If, however, the percentage of financing of the project were increased to 40%, a credit of US$35 million would be required. Negotiations concluded with a recommended credit of US$35 million, inclusion of six additional subprojects, and deletion of 120 trucks. 4.14 The Board approved a Credit of $35 million on August 14, 1973. F. The Project 4.15 The major components of the project, as described in the appraisal report, were as follows:  - 36 - (a) water supply improvements including the construction and renova- tion of transmission mains, primary and secondary distribut:Lon mains, reservoirs and booster stations in Calcutta and its southern suburban area and ground water source and distribution facilities in the fringe areas of the CN.Dcomprised of eight sub-projects involving small scale works at more than 40 sites and related equipment installations; (b) sewerage and drainage improvements including renovation and construction of storm drains, sewers, outfall canals and sluices serving Calcutta, its northeastern suburban area and Eowrah comprised of 17 sub-projects involving small scale works at more than 30 sites and related equipment installations; (c) garbage collection and disposal improvements serving Calcutta, comprised of two sub-projects involving small scale works ai: one site and procurement of related equipment; (d) environmental hygiene improvements consisting of conversion of service privies to sanitary latrines in the CMD comprised of three sub-projects involving manufacture and installation of sanitary latrines; (e) urban transport improvements including extension and widen- ing of existing roads, traffic operations measures, constric- tion of a bus terminal and extension of street lighting in Calcutta comprised of 12 sub-projects involving small scale works and installation of equipment at more than 15 sites; (f) area development improvements comprising a slum redevelopment scheme in Calcutta and a sites and services scheme southeast of the city comprised of two sub-projects involving extensive works at two sites; (g) technical assistance in the operations and maintenance and the organization of water, sewerage and drainage services in the CMD, in updating sector plans and urban development programmiulg. 4.16 The above comprises 44 sub-projects selected on the basis of criteria set out in para 4.06, out of 160 sub-projects in CQA's Investment Program as shown below:  - 37 - CMDA Program (July 1973-June 1976) No. of Investment /a No. of IDA Project subprojects (US$ million) subprojects (US$ million) Water Supply 20 36.00 8 17.6 Sewerage and Drainage 50 50.00 17 19.5 Garbage Disposal 4 10.00 2 2.6 Environmental Hygiene 16 4.00 3 2.5 Urban Transport: Roads & Traffic Improvements 25 52.00 12 21.8 Buses and Trams 5 13.00 - - Housing & Area Development 20 40.00 2 6.7 Bustee Improvement 5 11.00 - - Other Projects; Gas 1 2.00 - - Health 6 7.00 - - Education 3 3.00 - - Recreation 5 2.00 - - Sub-Total 160 230.00 44 70.70 Technical Assistance 0.40 Project Management 7.32 Contingencies 18.51 Total 160 230.00 44 96.93 /a Excluding technical assistance, project management and contingencies. G. Covenants 4.17 The following particular covenants were included in the legal agreements: Development Credit Agreement (a) CMDA would establish an engineering management unit to admin- ister a project reporting system, based on formats already established, and would submit quarterly physical and financial progress reports to the Association. (b) The Association was to review and approve project reports for the two area development schemes, the expenditures for which would be partly financed under Categories II(b) and III(b) of Credit proceeds. Project Agreement (a) CMDA should maintain adequate accounting records to record its operations and financial conditions.  - 38 - (b) CMDA would have its accounts and financial statements audited by independent auditors, the audit reports and certified copies of its financial statements to be submitted within six months of the end of the fiscal year (namely by September 30). West Bengal Agreement (a) GOWB would assign responsibilities for operation and main- tenance of major urban facilities in the CMD, completed, or to be completed by CMDA before March 31, 1975, to designated agencies or municipalities. (b) GOWB would make future assigments of responsibilities for ope- ration and maintenance of facilities completed by CMDA after March 31, 1975 in sufficient time to permit the designated agencies or municipalities to deploy the appropriate staff, and create an effective organizational framework. (c) GOWB would compile annual forecasts of operation and main- tenance costs for service systems incorporating projects executed by CMDA. (d) GOWB would formulate a plan within 12 months of effective- ness of the Credit Agreement for improving the financial performance of agencies and municipalities in the CMD. (e) GOWB would cover the costs of operating and maintaining the facilities referred to in (a) and (b) above, if the respons- ible agencies and municipalities were unable to do so. (f) GOWB would submit a timetable not later than December 31, 1973 for the consolidation within CMDA, of responsibilities for implementing projects in the water, sewerage and drain- age sectors of its (C4DA's) development program. (g) GOWB would cause the garbage collection and garbage disposal services to be reorganized into a single unit by June 30, 1974. V. PROJECT IMPLEMENTATION A. Credit Effectiveness and Start Up 5.01 With the exception of the requirement for the review and approval of project reports for the two area development schemes, all conditions of effec- tiveness were met before the original "limit" date of January 11, 1974. On January 10, 1974 therefore US$32.4 million of the credit was declared effective. The deadline for the balance of US$2.6 million was extended to March 1, 1974, then further extended three more times to September 30, 1974. This remaining balance became effective on July 15, 1974.  - 39 - 5.02 The delay in submission and approval of reports for the two area development schemes, and consequently the delay in effectiveness of the remainder of the credit, resulted from modifications being required on the designs for one of the schemes. 5.03 Start up of other components was not as smooth or as quick as expected given that the sub-projects were on-going at the time of Board Approval. This is discussed further under "Implementation" and "Organization" below. B. Implementation 5.04 The initial thrust of CMDA's Investment Program and the purpose for which CMDAwas created was to obtain widespread physical improvements in urban infrastructure in the CMD. This objective necessitated improvements in organi- zation, operation and finance. 5.05 The Project was formulated, and disbursements of the Credit proceeds would be based, on 44 specific sub-projects in six sectors, determined on the basis of a broad appraisal of technical soundness and timeliness, a number of which were ongoing at the time of CMDA's creation in 1970, and at appraisal, negotiation, or board approval. All of them were selected because the bulk of expenditures were expected to occur during the years 1973 to 1975. The expected completion date of the Project was December31, 1976; the closing date, one year later. 5.06 Against this backdrop, actual physical implementation did not match appraisal estimates. 5.07 The reasons for delays in implementation included, unanticipated problems in the reorganization of CMDA, difficulties encountered by CMDAin coordinating 54 agencies in Calcutta concerned with project related urban development, a fixed plan with annual allocations of funds for works thereby creating "annual contract packages", lack of adequate programing procedures, land acquisition problems, political pressures to add new subprojects to the program resulting in a dilution of CMDA's ability to undertake timely execution of schemes, and inadequate technical preparation of the selected projects requiring a number of them to be redesigned during the course of implementation. These problems are discussed in greater detail below under financial and institutional performance and development. Because of cost increases, the number of subprojects comprising the Project was reduced from 44 to 39 in early 1976. 5.08 Annex I lists the physical progress attained by December 1979 on the 39 subprojects comprising the amended Project financed by the Association, and the expected completion date of major components of those subprojects which were still under implemantation at that date. 5.09 There were also delays in appointing consultants for a number of studies required by the terms of the legal agreements. 5.10 As a result of the above, the Project was not completed by the closing date of December 31, 1977. This date was extended once, to December 31, 1979. Final disbursement occurred in November 1979.  - 40 - C. Procurement 5.11 During negotiations LMDAagreed to draw up tender documentation for all tenders in a form acceptable to the Association. Equipment and materials would be processed under both international competitive bidding (ICB) and local competitive bidding (LCB). Civil works would be subject to LCB only. 5.12 The Association considered CMDA's civil works contracting procedures to be outdated and therefore would require substantial revision. During imple- mentation CMDAand missions had extensive discussions on civil works tender documentation, and the need for their revision, principally the General Condi- tions of Contract. This was accomplished, albeit late in the implement ation phase, and the resulting improved tender documentation for civil works is now being used under the second project (756-IN). 5.13 Timely procurement of steel was delayed while the GOI, CMDAand the Association entered into a dialogue on the method of purchase and the extent of advertising requirements for bids under international competitive b:Ldding. D. Assessment of Individual Project Components General 5.14 The May 1975 supervision mission reported that total project costs had risen from US$97 million equivalent to US$151 million, an increase of 56%. Accordingly, that mission suggested CMDAcut back the scope of "cluster proj- ects," particularly in the Water Supply sector, and to a lesser extent in the Sewerage and Drainage sector, and generally attempt to scale down the Project. In early 1976 the Association formally agreed to the deletion of the following five subprojects. Sector Project No. Description Water Supply WS 026B Primary distribution gridl Sewerage & Drainage SD 031 Drainage Outfall Renovation, Calcutta Sewerage & Drainage SD 044 Diversion Channel and Sluice, Chitpur Sewerage & Drainage SD 054 Renovation of Bagjola Drainage Channel Traffic & Transport TT 020A-III Barrackpore Trunk Road CMDAalso reduced the scope of a number of clusters in the Water Supply and Sewerage and Drainage sectors as suggested. The resulting redefinition of the Project reduced the estimated cost from the appraisal estimate of US$915.93 million (1972 prices), to US$91.12 million (1975 prices), including project management, technical assistance and contingencies. Water Supply 5.15 Supervision missions noted that engineering design and standard of construction, were of good quality. They also noted however, that C4DA did  - 41 - not appear to give sufficient attention to the merits of individual projects in the phasing of the work. The November 1974 mission recommended the following: (a) priority be given to expansion of the existing distribution systems; (b) postponement of construction of new head works; and (c) the Garden Reach Primary Grid should be constructed in phases, the first phase not to exceed half the present proposed assigned capacity. 5.16 On completion of the disbursement of credit proceeds, five out of the seven subprojects of the "redefined" Project had been completed. The remaining two, WS/017 the 60" diameter Tallah Palta Main, and WS/026A, Garden Reach Primary Grid, are expected to be completed by March 1983. Sewerage and Drainage 5.17 As in the case of water supply, supervision missions commended CMDA on the engineering design of the subprojects, some of which were complex, and on the quality of construction work. 5.18 The mission noted however, that there were deficiencies in project. planning whereby a component of a subproject may be completed but cannot be used for several years because of delays in implementation of the rest of the subproject, or complementary investments. 5.19 As implementation proceeded, changes in priorities became apparent. Accordingly, the November 1974 mission recommended (i) the deferment of secondary treatment of sewerage in the light of more urgent needs, and (ii) more emphasis on cleaning existing sewers. 5.20 On full disbursement 12 of the 14 subprojects had been substantially completed. Subproject No.SD/025B Extension and Renovation of Bhatpara Sewage Treatment Plant is due to be completed by March 1984; No.SD/032 Drainage Outfall in Calcutta Zone by March 1983. Traffic and Transportation 5.21 The subprojects which were included in the Project were concerned mainly with investments in roads, to facilitate movement around and through the City. Supervision missions felt however, that the investments in this sector did not reflect the highest priority in terms of the overall trans- portation problems, which were the improvement of circulation within the city through the alleviation of congestion, and a coherent traffic policy. 5.22 Original cost estimates in this sector were more accurate than in other sectors with the result that CMDAproposed, and the Association agreed, to the deletion of only one subproject No. TT/020A-(iii) Barrackpore Trunk Road. In 1977, however, due to delays in land acquisition, cost overruns were estimated at 88% in current prices.  - 42 - 5.23 From mid-1977 to mid-1978 almost no progress was made on 4 roads (i) TT/006 Diamond Harbor Road Bypass; (ii) TT/008 Diamond Harbor Road; (iii) TT/Oll Raja Subodh Mullick Road; and (iv) TT/012 Prince Anwar Shah Road because of land and property acquisition problems. 5.24 On completion of disbursements five out of 11 subprojects had been substantially completed. The remainder are due for completion between March 1981 and March 1983. Shelter 5.25 As noted in paras 5.01 and 5.02 project reports for the two area development schemes (i) the Chelta Slum Improvement Scheme; and (ii) the Baishnobghata-Patuli(BP) Scheme were to be submitted for review, and approved by the Association before the portions of credit allocated to the schemes (catagories 2(b) and 3(b) totalling US$2.6 million), could be declared effec- tive. The schemes were innovative in that Chelta tested the new law L/ providing for redevelopment of slum areas, while BP was an attempt to move towards a sites and services concept. The relative reports were reviewed in early and mid-1974 respectively and found to be adequate. The remaining balance of the Credit was therefore declared effective on July 15, 1974. 5.26 Between mid-1974 and mid-1976 little progress was achieved Eas the Chelta scheme was held up by litigation (contractual dispute), whilst the BP scheme suffered land acquisition problems. 5.27 The original Chelta scheme was designed to house about 9,500 persons in 22 five-storey building blocks. In 1977 the new government in West:Bengal decided not to proceed with the redevelopment of a portion on the scheme, and to modify the design of the blocks, some of which were already partially built. The revised scheme will now house some 7,700 persons. Contractual difficulties also delayed implementation in 1977. 5.28 As credit proceeds would be used up before completion of the BP scheme, the GOWB and CMDA reviewed alternative proposals for financing and marketing the land. CMDA subsequently received a loan from the West Bengal Housing Board to complete the scheme. 5.29 Both schemes are still under implementation. Chelta is due to be completed in March 1983; BP in March 1984. 5.30 Tn mid-1980 CMDA advertized for the sale of plots in the BP scheme. It received 46,471 applications for 4,547 plots and deposit money amounting to Rs 1 crore 74 lakhs (equivalent US$2.1 million). Two thousand five hundred and ninety (2,590) plots have been reserved to the economically weaker sector (EWS) households. In February 1981 a lottery was held for allocation of about 3,000 plots. A further lottery will be held in due course for the remaining plots. A preliminary financial analysis of the scheme indicates that it will return a small surplus. 1/ West Bengal Slum Areas (Improvement and Clearance) Act 1971.  - 43 - VI. FINANCIAL PERFORMANCE A. Investment Plan 6.01 When GOWB drew up its Fourth Five-Year Plan (1969/70-1973/74) an amount of Rs 43 crores was included for investment in the CMD. Upon the creation of CMDA in 1970, GOWB formulated an Investment Plan for CMDA of approximately Rs 150 crores, which included the Rs 43 crores mentioned above. In this Plan a total of Rs 136 crores would be available for investments, the balance of Rs 14 crores being required for debt service and administrative charges. 6.02 GOWB's Fifth Five-Year Plan (1974/75-1978/79), which would start during the implementation phase of the Project, was projected at about Rs 319 crores. This Plan would consist of: (a) carryover from the Fourth Plan; (b) new Fifth Plan investments; (c) debt service, and (d) administrative charges. 6.03 The Project which IDA proposed to finance, comprised ongoing or to-be-sanctioned subprojects under the Fourth Plan only. 6.04 Annex II indicates (i) the sources of funding and forecast levels required during the period of disbursement of IDA funds; (ii) actual funds raised; (iii) CMDA's expenditures which include advances to implementing agencies, works expenditures, purchases of scarce materials (net), adminis- trative costs, maintenance charges, and debt service; and (iv) funds remaining unspent at the end of each year. 6.05 During the period 1973/74 to 1978/79 actual transfers of funds from GOI and GOWB to CMDA did not match the original estimates owing to a general scarcity of funds, particularly in 1973/74 and 1974/75. From a required funding level of about Rs 64 crores annually for the Fifth Plan, actual funds received by CMDA averaged Rs 45 crores annually, a steep decline in real terms. Despite the funding cutbacks, CMDA was not able to spend all the funds it received as evidenced by the closing cash balances of between Rs 2.30 crores and Rs 10.53 crores appearing in Annex II. 6.06 The reasons for CMDA's inability to spend all funds received can be attributed to the organizational difficulties experienced by CMDA in taking over responsibility for implementation of certain subprojects from other agencies in 1973, a strike by engineers, scarcity of some materials, and restrictive budgeting and sanctioning procedures which inhibited reallocations of funds between slow and fast moving contracts.  - 44 - 6.07 The difficulties noted in the previous paragraph slowed down the pace of disbursement of IDA funds. At the instigation of IDA, CMDAreallocated its 1975/76 budget in favor of IDA financed projects, in order to expedite disbursement of the credit proceeds. 6.08 One of the conditions of effectiveness was that the terms and condi- tions of relending the proceeds of the Credit to GMDA were to be acceptable to the Association. This condition was met within the limit date for effective- ness, and was as follows: "GOI will pass on the IDA credit to West Bengal at 5% per annum with rebate of 1/4% for prompt payment of principal and interest. The loan is repayable in ten equal annual installments and there will be no grace period. In case of any default the final interest will be 7-1/2%. West Bengal Government has decided that the proceeds of the credit will be passed on to CMDA on identical terms." Audit reports on a4DA's accounts which have just recently been forthcoming indicate however that CMDA had not, as of March 31, 1979, made any repayment of interest and principal. The issue here lies in the fundamental principle of cost recovery of revenue producing assets created by C4DA and handed over to the Calcutta Corporation and municipalities. Under the Second Project the Association has continued to pursue this matter. It is on record as requiring CMDA and GOWB to comply with the original understanding or decide on other terms and conditions of past loans to CMDA. Progress has been made under the second project on cost-recovery, particularly in shelter and water supply. Further improvement would be required before appraising a third projezt. B. Project Cost 6.09 The costs of the Project (1973 estimate and actual as of De,cember 1979) are shown in Annex III. While a number of subprojects were completed within appraisal estimates, the majority had substantial cost overruns. The average cost overrun on subprojects, the scope of which essentially remained unchanged, was about 90%. Overruns occurred for the following reasons: (a) original estimates of some subproject costs were not based on detailed engineering; (b) some subprojects had to be redesigned; (c) in a number of cluster projects in the Water Supply and Sewerage and Drainage Sectors, additional schemes had to be included; (d) changes in scope were required in some subprojects as the works became more clearly defined; (e) escalation in labor and materials costs (22% for labor and 24% for manufactured products in 1974/75 alone);  - 45 - (f) addition of new subprojects resulting from political and other pressures which had the effect of diluting CMDA's capability to implement its original program efficiently, thus spreading CMDA's implementation capability too thinly thereby delaying the implementation of legitimate sub-projects; (g) delays in land acquisition; (h) CMDA's method of preparing its investment plan with annual allocations of funds for sub-projects. (If an annual alloca- tion was spent, the subproject would be held up pending authorization of the next annual allocation of funds for it.); and (i) poor reporting on physical and financial progress, resulting in no analyses being made for delays and cost overruns. C. Disbursements 6.10 Disbursement of the Credit was completed in November 1979 as follows: Category Description Amount Disbursed Original Allocation …--------…U.S. Dollars- --------- 1. Equipment and materials procured by international competition 7,266,456.00 9,200,000.00 2. Locally manufactured equipment and materials procured by local bidding (a) for Parts A, B, C, D and E of the Project 6,467,034.49 5,500,000.00 (b) for Part F of the Project 4,352.66 300,000.00 3. Civil works (excluding expenditures for land and project management fees) (a) for Parts A, B, C, D, and E of the Project 19,387,968.85 17,200,000.00 (b) for Parts F of the Project 573,124.47 2,300,000.00 4. Consultants Services 1,301,063.53 500,000.00 35,000,000.00 35,000,000.00  - 46 - 6.11 The pattern of disbursements is shown in Annex IV Table 1. In late 1977, GOI requested the Association to increase the percentage of financing for locally procured equipment from 40% to 75%, and for civil works from 40% to 70%, in order to bring the percentages into line with the Second Project. aased on the then rate of expenditure GOI estimated it would take another two years to disburse the Credit using their suggested increased percentages of financing. The Association agreed to the request in January 1978, at the same time extending the Closing Date by two years, to December 31, 1979. Table 2 of Annex III shows full disbursement in November 1979, and also the rate of disbursements had the percentages of financing not been increased. D. Accounts and Auditing 6.12 Accounts and Audits of CMDA, other implementing agencies, and depart- ments of GOWB concerned with urban development were not, to all intents and purposes, dealt with in the appraisal or President's Report. However, an audit covenant requiring CMDA to have its financial statements audited each fiscal year with copies of the reports and statements to be delivered to the Association within six months of the end of each such year, was incorporated into the Project Agreement. 6.13 As a government type public works agency CMDA initially followed government practice and kept accounts on a cash and single entry basis only. However, as a quasi-autonomous agency, with power to borrow and onlend, such an accounting system was clearly inadequate. No provision was made in the technical assistance component of the Project however for the design of a suitable accounting system. It was not until late 1976 that terms of reference were agreed with C!DA for such a study, to be financed from the Credit. This and other studies not originally provided for, accounted for the larger than anticipated expenditures for consulting services (see para 6.05). Following the consultants' study, a municipal type accrual accounting system, with a cash accounting component (to satisfy local legislation), was proposed1 and was implemented beginning April 1, 1979. 6.14 Despite a covenanted requirement for annual audits, no bona fide audits of CMDA's accounts were received by the Association during the disburse- ment period of the Credit. It was not until August 1975 that the Association noted that the Accountant-General, whom the Association had considered as being independent for the purposes of fulfilling the requirements of the covenant, could not meet the Association's requirements within the covenanted time. The Association suggested the appointment of a commercial auditor. 6.15 Between August 1975 and November 1979 various "agreements" were reached for the submission of audits and for the appointment of commercial auditors. In January 1980, in accordance with the provisions of the latest agreement, the Association received reports for the years 1972-73 and 1973/76 and 1974/76, prepared by the Accountant General. During the course of 1980, the Association further received reports through the year 1978/79, that is, covering virtually all the disbursement period of the Credit. After a number of false starts therefore, CMDA has succeeded in providing seven audit:reports and certificates and the corresponding certified copies of its financial statements. With the introduction of an accrual accounting system with effect from April 1, 1979, year end closing of accounts should be easier tharnin the past, this having been one of the main constraints to timely audits.  - 47 - 6.16 All of the audit reports received however, have been unfavorable in that the following observations have been made: (a) utilization certificates for advances made to implementing agencies have not been obtained; (b) CMDA has not repaid any interest and principal to GOWB on funds on-lent by GOI (see para 6.08); (c) no subsidiary ledger accounts for "Sundry Creditors Account" were maintained; (d) no fixed asset register maintained, nor has any physical verification been carried out; (e) no physical verification of inventory/stock in hand has been made; and (f) no action taken to eliminate entries in suspense accounts. The Association has, therefore, seriously questioned whether the financial statements of CMDA can be considered as fairly representing its financial position. CMDA is now taking steps to rectify this situation, including the hiring of consultants to assist in drawing up a fixed assets register, and the verification of inventory/stocks. VII. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT A. CMDA 7.01 CMDA was created in 1970 as up till that time existing organizations had not had much success in implementing plans for urban development. The CMPO was as its name implied, primarily a planning organization. The transla- tion of the latter's plans into physical works was hampered by the multiplicity of local bodies and agencies responsible for such activities. 7.02 The primary task of CMDA was, therefore, to provide service facili- ties to the population of the CMD. It would do so by coordinating the execu- tion of plans, through financing and supervising of subprojects in the CMD. It was not initially concerned with the broader developmental aspects of the State Government, nor with implementation. 7.03 After assessing the magnitude of the tasks involved, CMDA, early in its history, consciously decided that it would use the expertise of existing implementing agencies rather than become one large organization. In implement- ing the BDP therefore it initially dealt with 54 agencies, although 80% of the work was with just nine agencies. 7.04 Whilst the delivery of services by CMDA in its initial years was a vast improvement to what had been provided before 1970, CMDA's supervisory functions were complicated by the fact that its own supervisory and financing  - 48 - functions were not compatible with existing State Government procedures, codes and accounting, or vice versa. Prior to appraisal therefore CMDA proposed, and the Association agreed, that it should consolidate responsibility for subprojects being executed by the C4PO, the Calcutta Metropolitan Water and Sanitation Authority (CIWSA) and one unit of the Public Health Engineering Department. The subprojects were primarily in the Water Supply, and Sewerage and Drainage Sectors. This was incorporated into a covenant (Section 2.07 of the West Bengal Agreement) under which GOWB was to submit a timetable by December 31, 1973, acceptable to the Association, for the consolidation of responsibilities for implementing subprojects in Lae above mentioned sectors. This was duly complied with. 7.05 In 1974 the Administrative Staff College of India, acting as man- agement consultants, recommended an organization structure for CMDA whereby each sector would be a near autonomous unit with its own sector planning, engineering, and accounting staff, with Headquarters staff being concerned with broader planning, finance and administration. The Association expressed general support for this proposal. CMDA now operates along these lines. 7.06 In 1975 a consultant attached to a supervision mission recommended that CIDA's organizational structure required further strengthening. There were at that time two streams of responsibilities, administrative and tech- nical, reporting to the Vice Chairman of CMDA, who was the Minister of Public Works, which confused the delegation of responsibilities and did not promote cooperation. The Consultant recommended the appointment of a full-time Chief Executive Officer, with a Director General of Operations as Deputy. He also. recommended that CMDA prepare a "rolling" Four-Year Program in place of its fixed long term master plan with its annual budgetary allocations. This would make it possible for QMDAto constantly update its budgets. 7.07 The above recommendations were duly adopted by C4DA with one modi- fication: it would prepare "rolling" Five-Year Programs. 7.08 To complement its institutional and financial restructuring, and to enable it to monitor progress in implementing its Investment Program, CMDA needed a suitable management control and reporting system. The Association, through correspondence initiated soon after Credit signing and through supervision missions, emphasized the need for an adequate reporting system. Such reports would also serve as quarterly reports which should be forwarded to the Association in fulfillment of Section 3.02 of the Project Agreement. If progress reporting were to be taken as an indicator of CMDA's management control functions then performance was not satisfactory. The first report was received covering the quarter ending December 31, 1976, then for the quarters ending March and June 1977, and a partial report for the quarter ending September 1977. Quality progress reporting did not materialize on a comprehensive and regular basis until 1979 under the Second Project. 7.09 In other areas, CIMDA'sperformance was better. After it had assi- milated the CZPO, CMWSA and the Public Health Engineering Department Unit, and after its reorganization and staffing were complete, it was not constrained by State Government procedures and standards, and was able therefore to develop its own policies and procedures suited to its needs. On the basis of studies initiated under this project, and expanded under the second project, CMDAhas  - 49 - made significant improvements in its ability to deliver urban infrastructure of acceptable standards. B. GOWB 7.10 The Project also focussed on achieving institutional improvements outside of CMDA to ensure that civic services in the CMD would be provided as economically and effectively as possible. GOWB was therefore required to fulfill a number of covenants in the areas of operation and finance which would complement the facilities being created by CMDA. 7.11 Under Section 2.06 (b) of West Bengal Agreement, GOWB was to for- mulate a plan within 12 months of effectiveness for improving the financial performance of agencies and municipalities in the CMD. It produced its plan in October 1975, nine months late. Where costs for services and beneficiaries were clearly identifiable (for example, water supply, sewerage, housing), GOWB proposed to impose specific charges, sufficient to cover the costs of such services. Through other taxes, better collection of existing taxes, new legislation and revenue sharing, it hoped to improve the ability of the various municipalities, corporations and local bodies to provide better services. 7.12 While GOWB still remains committed to these policies no discernible progress was made until approximately 1979, some two years after President's rule came to an end, and the present government came into power. Since then the momentum of legislative, organizational and fiscal reforms have proceeded rapidly although there are a number of areas, for example charging separately for the cost of water and sewerage, revaluation of properties, and revenue sharing, which still remain to be implemented. 7.13 GOWB has only recently compliedwith a covenant (2.06(a)of the West Bengal Agreement)requiring it to compile annual forecastsof operation and maintenance costs for service systems. The whole approach to operation and maintenancehas continued to be a problem, even under the Second Project, and will be a crucial issue under the third project. On the basis of an analysiscarried out in late 1980 by CMDA on its past investments,a sum of about Rs 22 crores annuallywould be requiredto operate and maintain those investments. VIII. CONSULTANTS SERVICES 8.01 Consultants services engaged under the Project consisted of the following: Organization, Management and Finance (a) A review of municipal finance and organization undertaken by an expatriate consultant. This study focussed on the property tax system of the CMD, and recommended creation of a Central Valuation Board and a more rational approach to assessments.  - 50 - The GOWB accepted the recommendations and created a Central Valuation Board in 1978. This Board is now seeking consul- tant assistance to advise on its establishment, operation, revaluation of properties and drawing of a new valuation roll, initially for the Calcutta Corporation, then for the rest of the (MD. It hopes eventually to cover the whole State. Cost approximately US$5,000. (b) Accounting and financial studies to determine probable revenue requirements and design of public utility accounts systems for for water supply and sewerage services, carried out by a local consulting firm at a cost of US$101,000. It remains to be implemented. (c) Design and installation of an accounting and financial manage- ment system for C4DA carried out by the same firm as in (b) above. Implementation commenced on April 1, 1979. Water Supply, Sewerage and Drainage (a) Engineering studies for Calcutta Water Supply Distribution network, carried out by a local firm in collaboration with an expatriate firm, at a cost of US$862,000. (b) Engineering studies to determine operation and maintenance requirements of water supply, sewerage and drainage facili- ties within local bodies of Q4D carried out by a local consulting firm at a cost of US$123,000. IX. EVALUATION 9.01 The appraisal report limited the economic analysis to the water, drainage and housing sectors only, which segment would account for about 50% of the total CMDA investment through 1981. The economic rate of return (ERR) for this segment of the program was estimated to be at least 10%. 9.02 The calculations used to arrive at this ERR were crude. The assumptions made at the time of the appraisal would still apply as little data is available and not all components of the project are yet complete (the last subproject, a housing scheme, is scheduled for completion in March 1984). In the meantime there have been tremendous price increases. No attempt has, therefore, been made to reestablish an ERR. CMDA has, however, recently initiated an evaiuation of the impact of past investments, which includes investments in this project, the Second Project, and its non-IDA financed investments. The evaluation would form the basis for identifying investments suitable for financing under a possible third project. Analyses, based on available, and in some cases, limited data, have been completed for the Water Supply, Sewerage and Drainage, Shelter (Bustee Improvement only), Solid Waste, and Traffic and Transportation Sectors. The quantifiable impacts are sum- marized in the table below.  - 51 - Table 1: Sector Performance Sumary For Period 1970/71 - 1981132 Sector Impact Sewerage Water Supply Shelter Traffic & Solid Waste Total and Transport Drainage 1.Program Invest- 88 99 B.P 43 a/ 95 13 351.00 ment Costs AD 13 b/ RS crores 2.Annual Operat- CCL/ 3.5 4.0 1.9 (CC+H)4.6 s.a. 14.00 ing/Maintanance Rest of OM Costs Rs crores 3.5 2.8 0.44 1.4 s.a. 8.14 RJ crores Total 2 7.0 6.8 2.58 6.0 s.a. 22.38 3.Investment Rsl CC 146 CC 94 (BIP only) per capita 6 H-B 140 d/ 8-B 103 CC 239 location Nlf ) 5-7 WB 28 H-B 185 rural) e/ EB 61 E3 183 NMU ) 15-30 WB 163 rural.) 4.Service CC S0gpcd (BIP only) Delivery H-B 32gped X dwellers Indicators f/ WB l9gpcd covered S/ EB 9.6gpcd CC 99% ,MO 14-16gpcd H-B 88Z EB 16; WB 34Z 5.HEalth: incidence of 1970 4,733 (statistics for Calcutta. vaterborns 1974 3,533 24 Pargasnas, Howrah, disease 1977 2,502 Hooghly, Nadia) mortalities incidence of 1970 1,1961186 (statistics for Calcutta, cholera cases/ 1974 2,195/520 24 Parganas, Howrah, deaths 1977 330/4 Eooghly, Nadia) 6.Rasntal changes Xrental in sample bustees change 1974/5-1979/80 Unimproved 16% Improved 43% 7.Direct construc- Materials (BIP only) tion expenditure 40 49 15.5 43.0 6.8 154.3 in local economy Wages RS crores 31 29 17.0 33.0 6.2 116.2 8.1adirect con- Materials structiou expen- 12 15 6.0 13.0 2.0 48.0 diture in local Wages economy. Rs crores 28 27 15.5 30.0 5.6 106.1 9.Annual Operating/ Materials Maintenance 1.7 3.4 0.55 2.52 n.a. 8.17 direct construc- Wages tion expenditure ;.6 1.9 1.3 2.4 s.a. 11.7 in local economy Rs crores lO.Annual Operating/ Materials Maintenance 0.5 1.0 0.16 0.75 n.a. 2.41 indirect construc- Wages tion expenditure 5.04 1.76 1.93 2.2 n.a. 10.43 in local economy Rs crores 11.Direct construc- tion job creation 123,500 115,700 68,900 131,950 148,200 588,250 nanyears, ano permanent 12.Indirect con- 111,800 104,000 62,400 119,600 133,900 531,700 struction expen- diture lob creation maayears, non permanent '3.Direct Operating/ !8,700 6,500 6,000 8,000 n.a. 39,200 Maintenance permanent job creation 14.1rdirect Operat- 16,800 5,850 5,450 7,300 n.a. 35,400 ing/Maintenance permanent 2ob creation a/ Bustee Improvement Program a! Non-municipal Urban Areas b/ Area Development (sites and services ecc.) f/ West Sank c/ Calcutta City j/ East Bank d/ gowrah/Bally Mfunicipalities  - 52 - Some of the major findings are as follows: (a) for the above sectors, the total capital cost of investments will exceed Rs 350 crores on their completion in 1982, and will incur an annual operation and maintenance liability of over Rs 22 crores; (b) both the investment cost per capita, and the delivery of services to the target population, varies significantly across the CNn, and both discriminate against the areas outside Calcutta City and Howrah/Bally municipalities. For instance, against a projected minimum per capita/day delivery of potable water of about 40 gallons by 1982, the following will be the situation; Area 1970 1982 Calcutta City 37 gpcd 50 gpcd Howrah/Bally 8.9 " 12 " 1/ East Bank 11 " 9.6 West Bank 15 " 19 Non-municipal urban areas 1.7 " 14-16 Average 14.7 " 21.1 (c) the limited health indicators available suggest a reduction in the incidence/mortality rates for waterborne diseases and cholera. (d) sample surveys suggest a significant increase in the rental charges in improved bustees relative to unimproved bustees. 9.03 Conclusions. Preliminary conclusions drawn from the analyses are as follows: 9.04 Water Supply. In Calcutta City, there is a need to improve the water distribution network as there is a vast disparity in supply between different areas of the City. In Howrah, the secondary system and house-to- house connections need to be extended. In the municipalities and non-municipal areas, distribution lines need to be extended to reduce the present inequality. 9.05 As water wastage is a major problem (estimated as varying between 10-30% in the municipalities and 30% in Calcutta City) GOWB has proposed extending water metering coverage where feasible to do so. Universal metering does not appear to be practicable in the CIM, but a study initiated under the second project has recommended the metering of production, zones and industrial and commercial consumers. 1/ On completion of Howrah Water Works in 1983/84, the availability of water will rise to 32 gpcd.  - 53 - 9.06 There are only 200 watermeters in service in Calcutta Corporation, connected to consumers in industry, commerce and Calcutta Port. In the rest of the CMD, industrial and commercial consumers are also metered to some extent. No domestic consumers are metered, with the exception of 850 house connections in the Barrackpore Cantonment Area. 9.07 Sewerage and Drainage. The large investment in Calcutta City, and to a lesser extent in Howrah/Bally, needs to be optimized by investments in the secondary/delivery system, and improvement of connections to the existing trunk system. Given the large amounts of capital required for waterborne piped sanitation, lower-cost forms of sanitation need to be explored, espe- cially for the municipalities and non-municipal areas. 9.08 Bustee Improvement Program. The program appears to represent a reasonably quick response, low cost means (Rs 350 per capita) of improving the physical environment of bustee dwellers, and possibly their health also. (See item 5 of table for health statistics.) 9.09 Traffic and Transportation. Little data is available at present to draw conclusions on the user benefits resulting from the program. 9.10 Operation and Maintenance. The Program will impose substantial additional expenditures on the CMD as shown below, to effectively operate and maintain the investments. Revenue Require- Collection ment of Program 1978/79 Deficit Water Sewerage Water Sewerage Water Sewerage Supply Drainage Shelter Supply Drainage Shelter Supply Drainage Shelter Calcutta City 4.0 4.0 1.9 1.8 1.8 0.06 2.2 2.2 1.84 Municipalities 2.5 3.0 0.5 0.9 0.9 /a 1.9 2.1 - Non-municipal 0.3 - - /a No data available. 9.11 Projections for fiscal years 1981/82 through 1986/87 show that even without the O&M requirements of the CMDA investment program, there would be a deficit of total revenues to expenditures: Rs 3 crores in 1981/82 for Calcutta Corporation rising to Rs 10 crores in 1986/87. The trend in the municipalities is similar. If the operation and maintenance costs of the CMDA program are included, the deficit for Calcutta Corporation in 1981/82 would rise to Rs 21 crores, and by 1986/87 to Rs 42 crores. Data is not yet available from the municipalities to make reasonable projections of the revenue gap. 9.12 To close the gap the GOWB is endeavoring to enforce better collection of the existing tax bases and through revaluation of properties, to increase the tax base for property taxes which presently make up 50% to 60% of the Calcutta Corporation's own revenues, and 75%-90% of the municipalities' revenues. GOWB is also considering other forms of taxes to help augment revenues. This is being addressed through a Municipal Finance Commission, set up in late 1979, to review the finances of the CMD, and make recommendations on taxing and revenue sharing among local bodies.  - 54 - X. BANK PERFORMANCE 10.01 aiDA is on record as stating that the Bank's interactions at differ- ent levels and times regarding identification, implementation and management of the subprojects, have been helpful throughout the tenure of the Credit period. From the Bank's perspective, however, it could have done better by focusing during supervision, on the Investment Program rather than the project, better enforcement of covenants, and less turnover of staff. The timing and frequency of Bank missions, mutually agreed, also drew favorable comment from CMDA. Tt would have preferred though that the same Bank personnel that appraised the project should have continued through to completion. CMDA nevertheless recognized that changes were sometimes unavoidable. Of the three Urban Projects staff who participated in appraisal, only one, the mission leader "stayed" with the project, until November 1975. Between November 1975 and December 1979 four project officers were responsible for supervision of the Project. On the other hand, a programs staff member who participaced in the appraisal and who would later become one of the four project officiers noted above, remained with the project throughout, and was thus able to provide valued continuity. 10.02 If the Project is viewed in isolation, then CMDA's observation of the desirability of having staff continue from conception to completion is valid. However, a more expanded and complex project was appraised in December 1976, resulting in the Second Calcutta Urban Development Project (Cr. 756) wherein continuity of two Urban Projects staff was provided between the first and second projects. 10.03 The creation in 1970 of QMDA as an organization responsible for cross- sector urban development and revitalization in Calcutta was a unique opportunity for the Bank to step in quickly. nn humanitarian grounds alone, Calctrttacould not be ignored for much longer. The Bank therefore selected ongoing subprojects in GMDA's investment program which it felt worthy of support, with the intent, after the project was underway, to assist GOWB in developing proposals for fiscal and municipal reform which would provide a basis for lending undlera second project. 10.04 Project components were selected on the basis of appraisal of the technical soundness, timeliness, and priority within the sector plans, and on the adequacy of Q4DA's technical review procedures. A more thorough review of the selected subprojects may have identified some of the weaknesses in design and costing which afterwards became apparent, and could therefore possibly have reduced the overruns since experienced. The Bank nevertheless proceeded with the project as it considered that conditions in Calcutta justified a start being made on redressing the more obvious gaps in the basic urban infrastructural needs. 10.05 One of the priority objectives of the technical review carried out by the appraisal team was the identification and minimization of land acquisi- tion problems. However this seems to have been ineffective because of the lack of depth of the appraisal review, and reliance on CMDA staff assurances of timely acquisition.  - 55 - 10.06 It was therefore during supervision that the Bank began to concen- trate on CMDA's organizational, administrative and operational requirements, and missions were staffed accordingly, often with consultant expertise. A number of reports and studies were initiated which were outside the project description, but which were nevertheless timely in the sense that they were able to place CMDA in a more favorable position to begin to implement the larger and more complex second project. These studies therefore accounted for the substantial increase in expenditures for consulting services over the appraisal estimate. 10.07 Generally, Bank supervision was effective, although it did not follow through on a number of covenants, and with the exception of the Water Supply and Sewerage and Drainage Sectors where the respective investment programs were reviewed, tended to focus on the subprojects included in the project, where physical implementation was concerned. As a development institution, the Bank's interest should lie with the overall investment program. Ideally, an investment program should be a balanced program with subprojects complementing one another so that no one or more subprojects should be completed before it can carry out its functions effectively in relation to other subprojects. At one stage during implementation however the Bank pressured, and the Government agreed, to give preference to the IDA-financed subprojects over the locally financed ones. Likewise, report- ing was required only for Bank financed components, and not for the whole program. Supervision missions did however have access, on an ad hoc basis, to GOI panel reports which attempted to give an overall picture. 10.08 The Bank did not make concerted efforts to enforce covenants. The first audit was not received until January 1980, after the Credit was fully disbursed. That audit report (for FY1972/73) and all subsequent ones (the latest being for FY1978/79) have noted that the terms of onlending between the GOWB and CMDA remain to be defined. Section 7.01(c) of the Development Credit Agreement, while having been fulfilled in spirit, was not implemented in practice. Had the Bank pressed for audits from the beginning, this would have been uncovered earlier. 10.09 While operations and maintenance criteria were given more than passing attention prior to, and at appraisal, and subsequently four covenants concerning this subject were incorporated into the West Bengal Agreement, supervision missions did not press for compliance. As a result, the compila- tion of annual forecasts of operating and maintenance costs was never done. Operation and maintenance of completed facilities was reemphasized under the Second Project but continues to be a problem. XI. CONCLUSIONS 11.01 The good implementation rate of the Second Project, measured in terms of the physical and disbursement rate, and the number of fiscal and administra- tive reforms that are now receiving attention, are indicative of the strides made by GOWB and CMDA, with IDA support over a relatively short period of time. The improvement of management, and the application of related management and financial tools, and other organizational and operational procedures, have  - 56 - significantly contributed to CMDA's ability to plan and execute its Investment Program. The Project helped GOWB and CMDAfocus on the necessity of having a sound organizational and fiscal base as prerequisites for the effective delivery and maintenance of urban services. 11.02 CMDA, created by GOI with State support (and before direct Bank involvement) was in a unique position to change the traditional (cumbersome and sometimes outdated) methods of doing things, and institute more expedient and effective means of carrying out urban improvements in response to the urgency of the situation. As an organization relatively unfettered by traditional procedures, it could, and eventually did, after much Bank prompting, hire consultants to fill in gaps in its expertise. CMDAhas demonstrated an ability to brief and supervise consultants and now keeps a roster of consultants upon which it, and other State Government Departments, draw. It has benefited from association with its consultants. 11.03 From the Bank's point of view, the approach taken towards this project was a departure from its traditional one. The project was not fully defined at the outset, nor was the direction or scope of its development, except in its broadest sense. The risks therefore were obvious. 11.04 During the course of implementation, however, municipal and fiscal measures and reforms were identified, setting the pattern and basis for the second project. As an institution, CMDA evolved in a direction other than was expected. From a funding agency it became a public works type agency through default of the existing implementing agencies. Given the objectives of the project in terms of the investment program, CMDA filled the gap. 11.05 The evaluation of the investments created since CMDA came into being indicates that Calcutta cannot support much more primary infrastructure for the foreseeable future. C'IDA'srole therefore has to change to a planning and development agency, partly in response to the above, also as legislated in the West Bengal Town and Country (Planning and Development) Act, 1979. This process is now going on and should be substantially in place by the time the third project is due to be implemented. 11.06 Annex 3 indicates that most subprojects incurred steep cost increases. During the course of implementation five subprojects were deleted, reducing the number from 44 to 39, as a result of the cost overrun. Notwithstanding this, the Association, contrary to its normal policy, raised the disbursement percentage in January 1978 to hasten full disbursement of funds, even though some of the 39 remaining subprojects would still be under implementation. This action was justified as the Bank was, under the Second Project, approved in December 1977, now associated with a "rolling" investment program which included the yet-to-be-completed subprojects of the First Project. 11.07 From the Bank's perspective, there was perhaps no other way in 1973 to intervene in Calcutta which enjoyed the notoriety as representing the world's textbook of problems of urban deterioration. The project also helped to focus attention within the Bank on the need for a broader-muItisectoral integrated investment strategy in its urban development efforts elsewhere, if a significant impact on institutional reform is to be anticipated.  - 57 - 11.08 While the impact of past investments is only just being assessed, there has clearly been a reorientation in the GOWB's approach to the planning and delivery of urban services to the people of the GMD, of whom approximately six million suffer from deprivation of some or a number of basic civic services.  - 58 - PROJECT COHPLETION REPORT ANNZXI CALCUTTA URBANDEVEL0PM1NT PROJECT (CRD IT 427-IN) rable I ACTOALANDEXPECTED PEYSICAL COMPLETION SECT'OR: WATERSUPPLY Uhit of Completion of Dates of Units of Percent Major Works or Components Completion of Malor Completion Works of Components of Subproject Major Works or Components on Full Dis- bursement of Actual EZpected Actual Expected Credit Proceeds (1.) (2) (3) (4) '4S/004A SubodhMullick Sq. Boosting Station 1. UndergroundReservoir I. *2. Pumping Stations I 1 Dec. 79 Dec. 76 86.29% 3. Installation of Pumping Machinery 7 7 and allied works WS/004B Auckland Sq. Boosting Station 1. UndergroundReservoir 1 2. Pumping Station 1 1 Dec. 79 Dec. 76 98.68% 7 3. Installation of Pumping Machinery 7 and allied works wS/007 New Projects in Calcutta Corpn. Area 1. Tubewellsand allied works 75 75 March 78 March 76 100% ,S/010 Fringe Area W/S Scheme (10 Schemes) at Serampore, Uttarpara, Behale 'A', Tolly 'C', Unsani, Kona, Nibra, Bankra, Sultanpur, Manickpur-Sarenga 1. Tubewells 39 39 , 2. Water Towns 17 17 3. Pipe Line 292,000 m 292,000 m Dec. 79 Dec. 75 76.39% 4. Iron Elimination Plant 2 2 3. Pumping Station 39 39 S/0D.1 I . Municipal Water Supplying 10 PEE Schemes at Bally, _nna6ax, Champdani, 3ansberia, 91.06% Hooghly-Chinsurah, Baranagar, Aorth Dum Dum, Bhatpara, South Dum Dum, Baidayabati. 11.8 Schemes at Halishara, Naihati, Uttarpara, Serampore, Bally-lL, Kanchrapara. Dun Dum, Rishra. i. Tubewells 23 23 Dec. 79 Dec. 75 2. Pumping Stations 23 23 3. Water Towns 12 12 4. Distribution Main 117,000 m 117,000 m WS/01.7 60" dia Tallah-PaltaMain 8,841 m ll,768m March 83 Dec. 76 78.90% WS/026A Garden Reach Primary Grid 1. 900 m P.S.C. pipe in Diamond 9,736 m 10,600 m Harbour Road, Taratola Road Budge Budge Road 2. 900 mm P.S.C. in Budge Budge Road 473 m 450 m 3. 750 mm P.S.C. in Budge Budge Road 6,317 m 6,600 m 4. 600 mm P.S.C. in Budge Budge Road 1,693 m 1,800 m 5. 400 = C.I. pipe in B.L.Saha Road 1,406 m 1,420 m March 83 Dec. 76 42.63% 6. 600 2m P.S.C. in Akra Road 6,494 m 6,500 m 7. 600 = P.S.C. in Taratala Road 1,950 u 6,000 m 8. 750 mm P.S.C. in Taratala Road 1,100 m 1,200 m 9. 1500 mm P.S.C. in New TaratalaRoad 1,224 m 1,700 m 20. 400 =m C.I. pipe in Biren Roy Road(WEST)6,ll0m 6,110 m  - 59- PROJECT REPORTAM COMPLETION PROJECT (C=rZT CALCUTTA MMBADEVPELOPMNT 427-U0) Table 2 Page 1 ACTUAL AND ~EXCTED P!YSZCAL CCMPLETOW SECTOR: SrEWRAGE 6 DRAINAGlE unit Of CompletIonL Of Daces of Unitsof Percent Maor Works or Components Completion of Mal or Completion Major Works or Components ~~~~~~~~~~~~Works of Subproject of Components Actual Expetd Actual Epected bursamcn of Credit Procs.df (13 ~~~~~~~~~~~~~~(2) (3) (4) SD/001 Remval of Waterlogging in Suburban Syscfa (Ph.1) a. 9" 0 to 21" 0 6,162 a30. m b.Z4" 8 to 36'"0 1,117 a 1,335 m 7 c.42" 0 and above upto 84" 0 562 m 5 0n Dec. 79 Dec. 75 96% d. Box drain 10' x 3.0' 170 m a0 SDO/OZA 'Taw Sewerage & Drainage Project (Ph.t) a. 9" 0 to 21" 0 7,464 m 7,560 a b. 24" 0 to 36" 0 3,04.2a 3,380 a c. 42" 0 and above 84" 8 2,172 a 2,300 a d. Box draiu 10'-3' a 7' to 9' x 7' 3,281 a 3,390 a e. Supply of mechaolcaL. equipamet supply ) Mechaoics.l) Dec. 79 Dec. 75 99% for clensneng Sever 6 Gullyr pits Compl.eted3 Equipment f. Staff Quarters at 3.D.P.S. Construction Construction) 4 storied Completed bldg. - 2 Zblocks 7 g. Dutf&11 Penstock Gates 4 Tangra Drainage Project (Box drain) a. Sikcashi. 1.)89 a 2.148 I. 77 Dec. 75 4. Pipe Conduits of Dia. 36" and above 2,761 a 2.903 c] I..un 78 Dec. 75 100% c. Pipe Conduits below 36" die. 5,365 m 6.848 mJ, Dec. 78 March 15 SD/0O2B New Sewerage, & Drainage% Project (Ph.1) a. 9" 0SWP to 36" 0 2.361 a 2,370 a Dec. 79 Dec. 74 b. 4,2" 0 and above upto 84"0 2,287 m 2,310 a Dec. 79 Dec. 74 82.18% C. Supply and installation Of 2 DWI,umpa at ?BPS, dismantling checking lubri-I catiou, etc. of 2 SW pumps at BDPS, Completec Completed Doec. 79 Dec. 74 reodelling of pump stmp, coustruction of vortex breaker at BDPS, consctruction of silt pit at SOPS etc.J 57,003 Sewering insewered Pockets in Calcutta a.9" 0 to 21" 0 1148 2,3 Dec. 79 Dec. 75 96% 4. 24"0 to 36" 0 2.148 a 2.8920 Dec. 79 Dec. 75 c. 42" 0 and above upto 84" 0245 a 4 Dec. 79 Dae. 75 SD?006 ManiktaLa Sewerage Project a. Laying of 110'dia. brickLsewer 2,939 n 3,030 m- DJec.79 Oec. 76 b. Construction of pumping station I unit I "nitJ Dec. 79 Doec. 76 98% S0/007 Removal of wiaterlog"in in Town System (Ph.1) a. 9" 0 to 21" 0 5,070 a 6,615 ;- b. 24" 0 to 36" 0 258 a 225ma March 79 Dec. 75 98% c. 42" 0 and above upto 84" 0 220 a 250 nC Rtemovalof Weterloggd.ng in the City of Calcutta (TOWnLSystem) a.Box-drains 424 m 424 ~T March 75 June 75 b. Pipe conduits of Dia.. 36' and above 4,495 a 4,545 a archL 76 March 76 100% c. Pipe conLduits of die, below 36" 8,928 a 8,939 nJ7 June 76 March 76 SD/009 Tol-lygungeDradnage Project a. Box-draine & conduits of die. 36" & above 23,110 a 22,727 n March 79 Dec. 76 100% b. Conduits below 36" din. 3,40033 J MArch 79 De.7 SD/OlD MsnLicktalaStorm Drainage Project a. Truak-drains and conduits 5,496 a 5,95 MarchL 76 March 76 b. Outfalls 4 4 June 75 June 75 100% C. Crose-over Structure I L. March 76 March 76 50/012 North-East Tollygunge Drainage Project a. Box-drains & conduits b. Conduits below 36" di&. of dia. 36" & above 13,376 a 34,460 m 13,212 33,667 7' June 79 June 79 Dec. 76 Dec. 76 100% SD/014 Sewer Laying including Road Restoration A. 180 cm diea. 3,717 a 3,99r b. 120 cm to 60 cm din. ,97a5,3'31 a j Dec. 79 Dec. 76 97% c. 53 cm to 23 ca in. 10,705 m 10,717mJ SD/016 6ovrah Sewerage -Scheme (ST?) 1. Land Acquisition 45.34 ha 45.34 h Dec. 71 Dec. 71 2. Pumping Stationu I unit 1 unit Aug. 79 MaLrch76 3. 2.75 aL (9') dia. Trunk Sewer 1,315 a 1,324 am Dec. 72 Dec. 72 100% 4. Pumping Scation-11 I unit 1 unit Aug. 79 March 76 5. 1-0 agd S.T.?. (Biofiltration Plant 1 unit 1 unit Aug. 79 March 76 .omprisdag of aeceiving Well, Screen Channel, Detritus Tank. Primary, Clarifiers, Biofilters. Secondary Clarifiars, Digesters, Sludge Drying Beda * Recirculation Pump REouse cuzm Administrative Bldg. etc.) 6. Effluent Channel 1,657 EL 1.677 a March 77 March 76 100% 7. Staff Quarters 26 units 26 unIts Sept. 76 Sept. 76  - 60 - REPORT PROJECTCOMPLETION ASNEX1 CALCUT1AURiAN DEVELOPMENT PROJECT (CREDIT 427-IN) Table 2 Page 2 ACTUALAND EECTED-PZ YSICAL COMPLETION & DRAINAGE SECTOR: SEWERAGE Unit of Completion of Dates of Units of Percent Major Works or Components Completion of Major Completion Major Works or Components Works of Components of on Subproject Full Dis- Actual Expected Actual Expected Credit Proceeda (1) (2) (3) (4) SD/025A Extension & Renovation of Titagarh Sewage Treatment Plant a. 9" 0 S. W. P. 1,784 m 1,784 m b. 12" 0 S. W. P. 1,314 m 1,314 m March 77 Dec. 76 100% c. 15" 0 S. W. P. 662 m 662 n d. Receiving Wall Pumping Station oxidation pond outfall drains. Completed in all respects Recomissioning of Treanent Plant of Boundary Copstruction aall, Approach Road. SD/025B Extension & Renovation of Bhatpara Sewage Treatment Plant a. 6" 0 to 21" 0 1,814 m 1,814 m Dec. 79 Dec. 76 b. 24" 0 to 36" 0 2,969 m 2,969 m Dec. 79 Dec. 76 c. Construction of oxidation pond. Repairfl & Renovation of Sewage Treatment Plant, Completed in all respects Dec. 79 Dec. 76 61Z Partial resectioning of outfal drain security arrangement of S. T. P. d. Construction of raw sewage pump house,7 Construction of 27" 0 C.I. rising main, I Yet to be completed March 84 Dec. 76 Construction of Raw Sewage Lift Station. SD/032 Drainage Outfall in Calcutta Zone a. Land Acquisition 36.88 ha 481.78 ha Dec. 79 Dec. 75 b. Earth work in excavation and silt 4,358,206 m 4,272,800 m Dec. 79 Dec. 75 clearance of S.W.F. channel c. Lining of S.W.F. channel at congested 182 m 1,212 n March 83 Dec. 75 places d. Construction of additional sluice at 1 1 Dec. 79 Dec. 75 80% outfall end of S.W.F. chanel e. Extension of Bantala regulator 74 m 74 m Dec. 79 Dec. 75 f. Reconstruction/remodelling drainage regulator existing on both banks of S.W.F. 13 14 Dec. 79 Dec. 75 channel 14 nos. g. Diversion and reconstruction of road 27.2 km 27.2 km Dec. 79 Dec. 75 on right bank of S.W.F. channel n. Cost of purchase of well point and road Full amount incurred Dec. 79 Dec. 75 roller Rs.1,306,000 for purchasing of Well point and road roller.  ANNEX 1 - 61 - Table 3 PROJECT COMPLETIONI REPORT C,LCUTTA URBAN DEVELOPMENT 2ROJECT (CREDIT .27-:N( ACTUAL AND EXPECTED PHYSICAL COMPLETION SECTOR: CARBAGE DtSPOSAL Unit of ComplecLoa of Dare.; of Units of Percenc ComoLletion Major Works or Cowooencs Com-letion of Aaior of Subpro)ect o:o Lalor .iorks or Co'eooaeatcs Works of Co-npoaencs full Disbursement ._--------------------------------------------------- of Credit ?ro:ead; Accual Exo.-cted Act'lal Exneated ! 15 ~~~~~~~~~~~~~(2) (3) . ' ID/OO1 t0Imro.emant to Aovroa:hes to Dumos ind oumo Road; - De.:. 76 Dec. 75 1OE. CD'032 Purchase of Eq;ioknenc & Material 26 26 Dec. 76 Dec. 76 lOd. SECTOR: MYGIENE E:TVIRONMENITAL E l/OI. EH/003. and ER/005 10.723 units 11.623 inits 7 77c. Dec. 76 937, Sonene3 5or co-version of si;.il ot,ie; into Sanitary Latrines Conversgion of orivies inco sanitary lacrines is va ongoing prograu. Up till Dece,nber 1977, 10,723 inits bad been .ns:alled or 93E of che exnected numbers jf 11.623. Since .Januarv 1978 the program has beean financed under ItAJr (Cr. 756-IN).  - 62 - PROJECT CCHPLETION REPORT ANN I Table 4 CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 427-IN) Page I ACTUAL AND EXPECTED PHYSICAL COMPLETION SECTOR: TRAFFIC AND TRANSPORTATION Unit of Completion of Dates of Units of Percent Major Works or Components Comnletion of Mtaior Completion Major ';orks or Conponenes Works of Comn2nents of Subproject on Full7 Dis- Accual Expected Actual Expected bursement of (2) (1) (3) Credic Proceeds (6) D.H.Road 3v-Pass =7'006 I. Land Acquisition 4,560 m 4,700 nfl ',Road z:roner: a. ^ase Course 4,LCOa S,700 a Bituinos ob. ., 3,300 - . 70 3. Construction of Cramn ;00 af -,:40 March 33 Dec. 767 4. Shifrtng of Electric & :llonination 2,400m a,700 3. Craffic Signal - I 6. RehabilitatIon of P.C.Seu Colony 60Z 1007% W;idening of D.E.Road lT/O8 L. Land Acquisition 7,400 a 7,600 m ^. Earth ftllng of Tanks & Ditches 7,400 m 7,600 m 3. Drains with footpaths 5,200 m 7,600 m 4. Cycle Track with two-walls 700 m 7,600 m R.oaoccnstruction: a. Base Course 6,000 m 7,600 a b. Dituminous Course ,600 =, 7,600 m 6..pprcach Road 685m a7568 a Reconecruction of Comp. 'Wall 3 4 March 31 Dec. 76 622 S. Laying of Cross Ducts 19 25 9. Construction of Supermarket 3 3 10. Construction of Subidha - 3 11. Construction of Temple & 'dgah 1 2 12. Surface Car Parks - 3 .3. Relaying Tr=a Cracks 1,800 a3 1, a 14. Renewal of Cables & Shifting of 3,000 m 7,600 a Electric Poles ;5. Screec Lighting 3,000 m 7,600 m 16. Traffic Signal nil 6 17. Protection of Median for Cram 1,300 a 1,600 m Track including raising the same. 1S. .e-laying of Sas Pize nil 7,600 a '^. Re-laying of Telephone Cables i,0CO m 7,600 a 2D. Construction of Codown & Scacking Yard 1 2 W;idening of Raia S.C.Mtullick Road CT/Oll a. Construction of Road including sewers 1,303 a 1,394 -a 4. Constriction of flats 362 377 March 81 Dec. 76 98% :. Construction of shops 123 125 d. Construction of stalls 177 180 Widening of ?rince Anwar Shah Road 77/012 a. Construction of Road including sewers 1.909 m 2,273 m b. Construction of flacs 377 377 June 31 Dec. 76 93% C. Construction of shops 140 140 d. Constructicn of stalls 154 154 W;idening of 'aniktala Main Road -,/013 a. Construction of Road including sewers 1,000 m 3,300 m D. Construcricn of lndernass 3 3 March 83 Dec. 76 68% Z. Construction of flats 218 218 a. Construcrion of shops 137 137 e. Construction of depressed carriageway - 327 a_ W2idening of Ultadanga Mtain Road TC/014 a. ConstructLon of Road including sewers 2,606 a 2,606 m b. Construction of Bridge(span length 108' 1 1 Dec. 80 Dec. 76 972 and carriageway 46 ') c. Construction of Park and Street 1 1 ' ghting installation imorovee enr of N. S. Road CT/C20A I. Road Tort:on 3,060 m 3,060 m May 79 Dec. 76 (:i' ' . r avernent 3,260 m 3,060 m June 79 Dec. 76 98% 3. Provision of Cable 'ines 3,040 m 3,060 a Dec. 80 Dec. 76 -. Diversion of utility services 2,960 m 3,060 m Dec. 80 Dec. 76 -. /020A amprovement of _splanade 3us Terminus I 1 Mlarch 83 - Dec. 76 63% (;v) 77/020C 3rabourne Road Flvover 1 1 March 82 Dec. 76 36% _1 W:ork delaved because of Metro Railway working.  - 63 - PROJEC; COMPLETION REPORT ANNEX 1 Table 4 CALCUTTA URBANDEVELOP.MET PROJECT (CREDIT 427-tN) Page 2 ACTUAL AND EXPECTED PHYSICAL COMPLEIION SECTOR: TRAFFIC AND TRANSPORTATION Unit of Completion of Dates of Dnits of Percent Malor Works or ComDonents Completion of Major Completion Major Works or Components orks ofComponents W__ of Subproject on Full Dis- bursement of Actual Expected Actual Expected Credit Proceeds (1) (2) (3) (4) T.O.P.Scheme of A.J.C. Bose Road (Part Street to Moulali & Camact =/02CH Street to Chow'ringhee) (II: i 1. Protection of Water Main (60") 890 m, 1,520 m IV) 2. Road Base 17,750 m 18,600 m 3. Bituminous work: a. Macadam 38,450 m2 38,766 m j b. Dense carpet 39,566 m, 38,766 mM March 82 Dec. 76 51.69% 4. Footpath 11,902 m- 13,478 m 5. Street Lighting 1,750 m 1,750 m 6. Tram Track (reservation) nil 765 m .O.P.Scheme of A.P.C.Roy Road (Ra3abazar to Shyambazar) /020H 1. Road base before macadam 8,100 m2 8,;50 m (:IV 2. Bituminous work: 2 5 a. Macadam 56,400 m2 56,850 m b. Dense carpet 59,900 m2 60,350 m2 3. Footpath 18,000 m 18,000 m March 82 Dec. 76 58.05% 4. Tram track raising 900 a 1,700 m 5. Street Lighting 3,500 m 3,500 mJ Street Lighting IT/021 1. a. Road Crossing 113 113 Dec. 77 Dec. 76 Pt.l b. Roads 48 55 March 82 Dec. 76 57.00%  - 64 - PROJECT COMPLETION REPORT ANNEX 1 Table S CALCUTTA 'JRBAN DEVELOPMENT PROJECT (CREDIT 427-IN) Page 1 ACTUAL .AND EXPECTED PHYSICAL COMPLETION SECTOR: AEMA DEVELOPMENT Unit of Completion of Dates of Units of Percent Major Works or Components Complecion of Major Completion Works of Components of Subproject HaJor W4orks or Components on Full Dis- bursement of Actual Expected Actual Expected Credit Proceeds _ (1) (2) (3) (4) Slum - =caernization at Chet'a (HG/002B(ii)) a ehousing 3locks 1. Construction of Swl cype buildings 196 units 196 units Dec. 79 (3lock No.2 & 7) comprising of 98 dwel7ing units in each block and base- nent floor including internal services & external house connections. 2. Construction of Swl type buildings (Block 49 units 49 units Dec. 79 No.5, half block) comprising of 49 dwell- (excluding ing units and basement floor including finishing of i.nternal services and external house basement connect:ons. floor) 3. Construction of SwI type buildirg (Block 98 units 98 units Dec. 79 Sept. 76 302 No.3) comprising of 98 dwelling units & (excluding basement floor including internal services finishing and external house connections. work) 5. Construction of Swl type building (Block Not yet 49 units March 83 No.6, remaining half) comprising of 49 taken up dwelling units including internal services and external house connections. 5. Construction of 4 Blocks of Sw3 (modified Not yet 120 units March 83 type buildings, comprising of 120 dwelling taken up _nits including internal services and exter-al house connections. Construction of Community Center 1 Dec. 79 Except finishing work and electri- fication. ;ater Suocly, Sewerage & Drainage 1. Construction of 1.2 lakh gallon capacity I 1 R.C.C. overhead reservoir together with head works. 2. Sinking of one Deep Tubewellj 3. Installation of I electrical pump and ) 1 2 oumn house for the tubewell 4. Laying of network of water distribution 30% of the Total co-and March 83 Sept. 76 30% lines. comand area area 5. 'aying of sewerage system 33% 6. Laying of storm drains 10% Road, Pathways, Pavements 10% -. Electrification of Roads, Pathways 10% Creation of Land Parcels 15% Land Accuisition 1 ha 5.67 ha (Aoprox.)  - 65 - PROJECT COMPLETION REPORT ANNEX I Table 5 CALCUTTA URBAN DEVELOPMENTPROJECT (CREDIT 427-IN) Page 2 ACTUAL AND EXPECTED PHYSICAL COMPLETION SECTOR: AREA DEVELOPMENT Unit of Completion of Datas of Units of Percent Major Wcrks or Components Completion of Major Completion Works of Components of Subproject Major Works or Components on Full Dis- bursement of Actual Expected Actual Expected Credit Proceeds (1) (2) (3) (4) Baishnabghaea-Patuli Area Develooment P.oject (HG/003A(ii)) A. Land Acquisition Possession Total area of 125.13 ha have been received up to 7.1.77 B. Earthwork in landfilling 3 1. Done by BI & MAD Sector 87,749 m 87,749 m3 Harch 84 Dec. 76 4Z 2. Done by NT & AD Sector 0ZQjQ00m 1,076.922 3 Total 289,749 a 1,163,977 n C. W;aterLine 1. CI pipes 150 mm and above 31,500 m 2. CI pipes 200 mm and above 2,900 m 3. Sewer Line 1. No.3 RCC pipe 300 to 600 mm 2,530 m 2. S. W. Pipes 150 to 250 mm 27,500 m 2. Road and Pathways 1. Category 30 n right of way - 1,340 m Z. Category 20 m right of way - 1,280 m 3. Cacegory 13 m right of way - 2,150 m 4. Category 9 m right of way - 3,300 a F. Group Housing March 84 Dec. 76 1. E.W.S. III - 638 units 2. E.W.S. IV - 1,952 units 3. L. I. G. - 1,219 units 4. Other Buildings - - G. Overhead Reservoir - 2 H. Deep Tubewell - 4  - 66 - PROJECT CaHPLZTZONRE0RT ANNZX 2 CALCUTTA URSANDZVElWPIWZ-PROJECT . CCR. 427-lN) CMDA's Cash Flow for the Imnlientation Period of the Prolect FORECAST 1973/74 1974/75 1975176 1976/77 1377178 1978/79 Bustee Improv^ment 4.50 - 1/ - State Plan Funds 12.65 5.66 6.00 Central Loans 12.98 7.50 7.50 Octroi Tax 7.00 6.00 7.87 No breakdown projected Market Loans 15.40 15.40 15.40 Other 1.26 2.89 4.15 Opening Cash Balance - 5.21 7.28 Total 53.79 42.66 48.20 60 approx. 60 approx. 60 approx. Actual Funds Received Bustas Improvement 2.56 2.60 V 1.40 1.40 1.67 1.70 State Plan Funds 11.16 2/ 3.06 4.60 10.50 13.20 13.20 Central Loans 3.50 31 7.50 6.69 7.50 10.50 10.47 Octroi Tax 4.07 6.00 6.92 7.49 8.30 9.33 Markat Loans 15.40 4/ 15.40 15.40 11.00 11.00 11.00 Other 0.38 0.21 3.09 11 - - - Opening Cash Balance 2.30 5.23 7.02 4.57 2.30 7.70 TOTAL 39.87 40.00 45.12 42.46 46.97 53.40 0M0A Expenditures 34.64 32.98 40.55 40.l1 39.27 42.87 Closing Cash Balance 5.23 7.02 4.57 2.30 7.70 10.53 TOTAL 39.87 40.00 45.12 42.46 46.97 53.40 1/ Central Grants for Bustee Improvement were discontinued under the Fifth Plan and were replaced by contributionsfrom the State-sponsored Minimum Needs Program. 2/ State Plan funds are derived from within the State. and from the Center. The latter's funia are provided as "block aid", 30Z as grant and 70% as loan. 3/ Central Loans originate from the "Integrated Urban Development in areas of National Importance Account" of the "Central Metropolitan Fund", and are intended to fill resource gaps in funding CMDA's Investment Plans. Repayment period - 10 years, interest charged at 7-3/4% upto September 1975, and at 5-1/2% thereafter. 4/ CMA is permitted to raise funds under open market borrowings on the basis of octroi receipts. Bonds are redeemable after 1Q years and carry interast rates from 6% to 6-1/2%. CMDA is required to set up a Sinin-g Fund towards repayment of bonds. From 1975/76 debt service has excaeded octroi receipts. GOWBhas, therefore, authorized CMDA to reborrow bonds faLling due. 5/ Includes Rs 3 crores Dutch Government participation in CMDA's program for hospitals, schools and the Bustee Improvement Progra. Xerch 18, 1981  pROJECT COMPLETION REPORT CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 427-IN) ACTUAL AND APPRAISAL ESTIMATES OF PROJECT COST SECTOR; WATER SUPPLY Actual cost(up to Dec.79) Appraisal Estimate of Cost-/ Actual costs as a ------------------ …--------… 2 /proportion of Major Works or Components 'Local US$ million- Local US$ million- appraisal estimate currency equivalent currency -equivalent of cost (%) Rs Crores (1) Rs Crores (2) (1) * (2) x 100 Based on US$ 1. WS/004A Subodh Mullick Boosting Station 1.50 1.76 0.30 0.41 440 2. WS/004B Auckland Square Boosting Station 2.44 2.87 0.81 1.09 263 3. WS/007 New Project in Calcutta Corpn. area 2.65 3.12 1.10 1.49 209 4. WS/010 Fringe Area Water Supply Scheme 2.42 2.85 5.30 7.16 40 5. WS/011 Municipal Water Supply Augmentation 3.51 4.13 4.34 5.87 70 Scheme 6. WS/017 Remodellingqof 60" Tallah-Palta Main 2.35 3/ 2.76 1.01 1.37 201 7. WS/026A Garden Reach Primary Grid 5.84 31 6.87 2.61 3.53 196 Sub-total 20.71 24.36 15.47 20.92 1/ Contingency allowances have been distributed over all project components for the appraisal estimates of costa. 2/ Using an exchange rate of US$ - Rs 8.50 for actual costs and US$ = Rs 7.40 for appraisal estimate of costs. 3/ Not physically completed by December 1979. Source: CMDA and IDA | N  PROJECT COMPLETION REPORT CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 427-IN) ACTUAL AND APPRAISAL ESTIMATES OF PROJECT COST SECTOR: SEWERAGE & DRAINAGE Actual cost (up to Dec. 79) 4ppraisal Estimate of Cost- Actual costs as a -- - - - - - -- -- - - - -- 2/- - -- --…/- - - --- proportion of Local US$ million-t Local US$ millio-2/ appraisal estimate Major Works or Components currency equivalent currency equivalent of cost (%) Rs Crores (1) Rs Crores (2) (1) - (2) x 100 Based on US$ 1. SD/001 Removal of Waterlogging in Calcutta 1.24 1.46 1.93 2.61 56 2. SD/002A New Sewerage/Dratnage Project I 2.41 2.84 1.74 2.35 121 3. SD/002B New Sewerage/Drainage Project II 0.81 0.95 0.84 1.13 84 1 4. SD/003 Removal of Unsewered Pockets in Cal. 0.93 1.09 0.86 1.16 94 X 5. SD/006 Manicktala Sewerage/Drainage I 1.77 2.08 1.01 1.37 152 6. SD/007 Removal of Waterlogging, Calcutta 1.69 1.99 0.71 0.96 207 7. SD/009 Tollygunge Drainage 5.52 6.49 1.80 2.43 267 8. SD/0O10 Manicktala Sewerage/Drainage II 1.37 1.61 0.68 0.92 175 9. SD/012 North-East Tollygunge Drainage 2.56 3.01 1.59 2.15 140 10.SD/014 Arterial Sewerage, Howrah 2.05 2.41 1.86 2.51 96 ll.SD/016 Reticulation Sewerage, Howrah 3.39 3.99 1.02 1.38 289 12.SD/025A Plant Renovation 0.23 0.27 0.19 .0.26 100 13.SD/025B Plant Renovation, Bhatpara 0.61 0.72 0.89 1.20 60 14.SD/ 032 Drainage Outfall-II, Calcutta 3.61 4.25 1.78 2.41 176 Sub-total 28.19 33.16 16.90 22.84 1/ uontingency allowances have been distributed over all project components for the appraisal estimates ot costs. 2/ Using an exchange rate of US$ - Rs 8.50 for actual costs and US$ - Rs 7.40 for appraisal estimate of costs. 3/ Not physically completed by December 1979.  PROJECT COMPLETION REPORT CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 427-IN) ACTUAL AND APPRAISAL ESTIMATES OF PROJECT COST SECTOR: ENVIRONMENTAL HYGIENE AND GARBAGE DISPOSAL Actual cost (up to Dec.79) Appraisal Estimate of Cost-/ Actual costs as a ___------------~~------- -2/ ---------------------- 2/ proportion of Local US$ Million-/ Local US$ Million- appraisal estimate Major Works or Components currency equivalent currency equivalent of cost (x) Rs Crores (1) Rs Crores (2) (1) t (2) x 100 Based on US$ 1. EH/OO1, iH/003 and EH/005 Schemes for Conversion of Service 1.30 1.53 2.41 3.26 47 Privies into Sanitary Latrines 2. GD/001 and GD/002 Garbage Removal & Disposal in 2.03 2.39 2.53 3.42 70 Calcutta, Phase I and II. 1/ Contingency allowances have been distributed over all project components for the appraisal estimates of costs. 2/ Using an exchange rate of US$ Rs 8.50 for actual costs and US$ - Rs 7.40 for appraisal estimate of costs. b-i Ib  PROJECT COMPLETION REPORT CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 427-IN) ACTUAL AND APPRAISAL ESTIMATES OF PROJECT COST SECTOR: TRAFFIC AND TRANSPORTATION Actual cost (up to Dec.79) Appraisal Estimate of Cost-/ Actual costs ap ---------- ~------~---------------------------------- proportion of MaJor Works or Components Local US$ Million-/ Local US$ Million2 of coat (X) currency e-uivalent currency eguivalent Rs Crores (1) Rs Crores (2) (1) t (2) x 100 Based on US$ 1. TT/006 D. H. Road Bye-Pass 2.10 2.47 3- 0.99 1.34 184 2. TT/008 D. H. Road 4.92 5.79 4.17 5.63 103 3. TT/Oilli S.C.Mullick Road 1.01 1.19 0.86 1.16 103 4. TT/012 Prince Anwar Shah Road 3.87 4.55 5.96 8.05 57 - 5. TT/013 Manicktala Main Road 1.52 1.79 - 1.12 1.51 119 6. TT/014 Ultadanga Main Road 1.42 1.67 ! 1.03 1.39 120 7. TT/020A(ii) Netaji Subhas Road 0.43 0.51 1/ 0.44 0.59 86 8. TT/020A(iv) Bus Terminus at Esplanade 0.45 0.53 0.74 1.00 53 9. TT/020C Brabqurne Road Flyover 2.65 3.12 1.31 1.77 176 10. Acharya Road TT/02011(iii), 1.27 1.49 1.07 1.45 103 (iv), (xi)(a) 11. TT/021 Street Lighting 1.76 2.07 - 1.30 1.76 118 Sub-total 21.40 25.18 18.99 25.65 1/ Contingency allowance has been distributed over all project components for the appraisal estimates of costs. 2/ Using an exchange rate of US$ - Rs 8.50 for actual costs and US$ - Rs 7.40 for appraisal estimate of costs. 3/ Not physically completed by December 1979. c1  - 71 - PROJECT COMPLETION RPORT CALCUTTA URBAN DEVELOPMENT PROJECT (CREDIT 427-IN) ACTUAL AND APPRAISAL ESTDMATES OF PROJECT COST SECTOR: AREA DEVELOPMENT Actusl cost (up to Dec.79) Appraisal Estimate of Cast- Actual costs as a 2/ 2/ proportion of Major WJorks or Components Local USS Millior- Local US$ Million- appralsal astimate currency equivalent currency equivalent of cost (Z) Rs Crores (1) Us Crores (2) 2 x 100 3s.ed on US$ 1. SG/002B(i) Chatla Slum 0.92 1.08 2.22 3.00 36 Modertization Baishnabghata-Patuli 2 SG/003A(ii) Area Devalopamnt 1.23 1.45 - 3.91 5.28 27 Sulb-total 2.15 2.53 6.13 8.28 SUB-TOTAL OF SECTORS 75.78 89.15 62.43- 84.37 Five schemes included in appraisal - - 2.61 3.52 estimates but not undertaken (see explanatfon para SUB-TOTAL 75.78 89.15 66.04 87.89 Project Management 4/ 7.70 9.06 6.40 8.56 Technical Assistanca 1.10 1.29 0.36 0.48 APPRAISAL COST ESTIMATE - - 71.80 96.93 ACTUAL COST 84.58 99.50 I/ Contingency allowances have been distributed over all project components for the appraisal estimate of costs. 2/ Using an exchange rata of US$ - Rs 8.50 for actual costs and US$ - Rs 7.40 for appraisal estrlate of costs. 3/ Not physically completed by December 1979. 4/ 12% of civil works equipment and material and relocation costs according to established formulae between CMDA and its executing agencies.  - 72 - ANNUM 4 Table 1 CALCUTTAURBAN DEVELOPMENT PROJECT CREDIT 427-IN Disbursements US$ Millions Revised Financial Appraisal (2/4/76) Year Quarter Target Target Actual 1974 2 0.05 3 6.0 4 9.5 0.6 1975 1 10.5 1.2 2 16.0 1.9 3 21.0 3.6 4 25.5 4.4 1976 1 26.0 10.3 2 29.0 11.5 3 33.0 17.4 12.6 4 34.0 20.1 13.4 1977 1 34.2 22.6 15.4 2 34.3 25.5 16.5 3 34.6 27.8 19.2 4 35.0 29.2 -21.3 1978 1 Fully 30.5 22.9 2 Disbursed 31.9 23.3 3 33.3 25.8 4 33.7 26.6 1979 1 34.0 29.0 2 34.5 29.0 3 35.0 31.3 4 33.7 1980 1 33.8 2 35.0  - 73 - ANNEX 4 Table 2 CALCUTTA PROJECT URBANDEVELOPMENT - CR.427-IN DISBURSEDENTS 3s. o , ~~~~~~~~~/, 3~o ' Target of , Appraisal/ Actual ; ,t", i Disbursement profile if percentage of financing had not been revised upwards on .1 January 4, 1978. oz ,D*O I/t G I ~~~~~~~~~~~~~~~~~~~~/ 4.0 -~~~~~~~~~~~~~~~~~~~.0 I I~~~~~~ 1973 I174 '975 I?74 177 1973 '?7? X S FINANCIAL YEAR  - 74 - ANNEX 5 Page 1 PROJECT C0OPLETION RE-ORT (Cr.427-IN) PREPAREDBY II C. M. D. A. 1. Brief Note on Credit Component The Calcutta Metropolitan Development Authority, a statutory body established in 1970, took up multisectoral development works in different parts of Calcutta Metropolitan District. For financing the various projects, Govern- ment of India had been looking for some external financial assistance since the beginning of the program. After a series of negotiations with the IBRD, Cr.427-IN was signed between the Government of India and the World Bank during the Third Quarter of 1973 for a number of agreed projects. Initially a project package of Rs 78.08 crores was included under IDA I for 44 subprojects in different sectors as below: Water Supply 8 Sewerage & Drainage 17 Garbage Disposal 2 Environmental Hygiene 3 Housing & Area Development 2 Traffic & Transportation 12 The World Bank was to have financed about 50% of the project cost and it was agreed that CMDA will be eligible for reimbursement of 35 million dollars against these projects starting from 13th September, 1973 and ending in June, 1977. Subsequently 5 subprojects, namely, one from Water Supply, three from Sewerage & Drainage and one from Traffic & Transportation,were kept out of the perview of the IDA-I Credit component. These curtailmentswere done in view of anticipated land acquisition problem, Institutional constraints and substantial progress of the project during the period between Appraisal and Agreement. The tenure of the project was, however, extended upto 31st December, 1979, at a later date. It was further agreed to enhance the rates of reimbursement against different categories of works initially agreed to under the project. 2. Physical Targets vs. Achievements Projectwise details of physical targets and achievements are given in Annex I. A critical analysis of the physical progress would lead to the conclu- sion that the targets set up were rather optimistic. In a sense this is true. While the targets by themselves were not impossible to achieve within the given time frame, CMA failed to recognise some of the constraints that would upset the work program. 1/ The annexes referred to below have been incorporated into the main report.  - 75 - ANNEX 5 Page 2 These constraints were: (i) Organisational. inadequacy: At the time of credit agreement CMDAas an organisation was only a funding agency for projects being implemented by other organisations. In spite of best efforts, project management, in a multiagency environment,was difficult due to lack of coordinationbetween these implementing agencies. The need for a multi-sectoral implementationapproach under a nodal agency was strongly felt. And, so with advent of the on-umbrella concept at the end of 1974, CMDA emerged as an executing organisation. Even then, during the initial years of the credit CMDA was in its infancy and could not keep pace with the work program chalked out. (ii) Inadequacy of project proposals: One of the basic criteria for selection of projects for credit package was that these were ongoing. Many of these projects, which CMDAinherited from other agencies, were not well defined regarding scope and content of work (say, for example: Fringe Area Water Supply (WS/010) or New Sewerage & Drainage in Calcutta Corporation Area (SD/002A) or Diamond Harbor Road Widening (TT/008). Detailing of revised scope and content during implementation had its adverse effect on the program. (iii) Lack of investment planning: In early years CMDA did not have any regular investment program. It had to move from year to year on annual plan basis, which often stood in the way of advance planning and programming of works. While giving due priority to credit listed projects, CMDA could not help but assign equal/higher priorities to some of the non-IDA projects which had greater impact at local level and/or which were complementary to credit listed projects to derive the benefits - an example would be "WS/026A - Garden Reach Primary Grid (Credit listed project)" and "WS/020 - Garden Reach Treatment Plant (a non-IDA project)". (iv) Land acquisition problem: Land acquisition is a chronic problem spot within the metro district. Sufficient "Lead Time" on this account was provided for in the work- program. In spite of this fact, some projects suffered badly due to delay in land acquisition for unforeseen reasons like Court Injunction. Baishnabghata-Patuli Area Development proj?ectis a glaring example of the havoc played by this perennial problem and associated procedural delays. (v) Scarcity of essential construction materials: C}DA's program was based on a reasonable estimate of material availability from the market. However, material flow during implementationwas not often adequate, and the work-program had to be cut down even when other factors were favorable.  - 76 - AN= 5 Page 3 In spite of the odds, 20 projectsout of 39 projectshave been completed (see Annex IV) and excepting3 projects all othershave been substan- tially completed on the cut-off date. And this, CODA feels, is no me*- achievement. Like the silver lining with the cloud, the lessons learned from the failures and set backs have stood CIDA in good stead in facing the task ahead with confidence. 3. Actual vs. Estimated Cost Projectwise details are furnished in Annex II. A close look at the figures would reveal that cost overrun by 150 - 300% has been the rule rather than the exception. The reasons are obvious. As has already been explained, the projects were ill-defined regarding scope and content of work and needed revision. And secondly, the project ' estimates based on pre-1970 schedule of rates had also to be updated for a number of times. It may be noted, as an indication to the magnitude of revisions, that the full contingency provisions (both physical and financial) were consumed by 1978. 4. Financing Pattern in CMDA During the Project Period 2MDA mobilises its resource from five major sources: (a) State Plan Allocation (b) Central Assistance (c) Market Borrowing (d) Octroi Receipts and s; sc=_'1cne-_s - ---- -cej_pts crom otder auternational bodies, internal resources. etc. The total resource comes as a central pool from which a__ pro7ects (credit listed as well as those outside credit package) are financed. Details are furnished in Annex III. As has already been stated, from 1977 onwards, a five-year icvestment program was chalked out and a matching resource allocation exercise was carried out. 5. Comments on Bank's Interaction Bank's expert opinion regarding infrastructural development work in its totality coupled with Bank's interactions at different levels and tim,esregarding identification,implementationand management of the credit Drojects 'have been very much helpful throughout the tenure of the credit period. Sometimes, however, CMDA failed to see reasons behind some of the scrutinies and criticisms, obviously because these did not recognise the color and custom of the local working environment. Timqng and frequency of the visits by the Bank mission, fixei with the concurrence of both the parties, were very much condusive to the purpose.  - 77 - ANNEX 5 Page 4 While appreciating that changes in personnel are inevitable for Bank' s Administration CMDAwould suggest that persons appraising the projects at the initial stages should continue with its monitoring and evaluation till completion. This would obviate the difficulties associated with such changes within the project period such as reappraisal of project components, progress status, etc. 6. Impact of Credit - Listed Projects on Organisation and Society Credit 427-IN has been instrumental in many ways in-.theorganisational evolution of C1DA: (a) As has already been explained, CMDA emerged from the role of a funding agency to that of an implementing agency. (b) It helped CMDA to look into infrastructuraldevelopment in its totality and plan and program its works accordingly. (c) It helped C4DA to adopt gradually modern methods of project Control and Monitoring. (d) Failures and set-backs in the implementationof the credit helped CMDAin identifying the weak links in the organisation which needed strengthening, and (e) Last but not the least, it imbued CMDA with optimism and confidence in looking forward to its future tasks. Monitoring and evaluation of investments made by CMDA in different sectors is being worked out in depth as per suggestion of the Bank. Pending this exercise, however, some of the discernable impacts of the projects on the society are slmarised below: (i) Per capita water supply in project areas has increased by 40 litres per day on an average. (ii) Potable water supply in extended areas has benefitted about 0.23 million persons. (iii) More equitable distribution of water to consumers in different - localities with existing water supply. (iv) Appreciable reduction in water-logged areas and/or duration of water logging. (v) Decongestion of some traffic corridors resulting in smoother and speedier traffic and pedestrian movements.