India - Third Calcutta Urban Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 4310-IN STAFF APPRAISAL REPORT INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT May 2, 1983 South Asia Projects Department Urban and Water Supply Division This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Rs 1.00 = US$0.11 Rs 9.50 = US$1.00 Rs 1 lakh (105) = US$10,526 Rs 1 crore (107) = US$1.05 million GOI/GOWB FISCAL YEAR April 1 - March 31 MEASURES AND EQUIVALENTS 1 millimeter (mm) = 0.0394 inches (in) 1 meter (m) = 3.2808 feet (ft) 1 kilometer (km) 0.6214 mile (mi) 1 square meter (m2) = 10.7639 square feet (sq ft) 1 square kilometer (km2) = 0.3861 square mile (sq mi) 1-hectare (ha)=0.01km2 = 2.4711 acres (ac) or 10,000 sq m I liter (1) = 1.0567 quarts liquid or 0.2642 US gallon (gal) or 0.9081 US quart dry (qt) I cubic meter (m3) = 35.3147 cubic feet (cu ft) 1 liter per capita = 0.2642 US gallons per capita per day per day (lcd) = (gpcd) 1 cubic meter per second (m3/sec) = 264.1721 US gallons per second (gal/sec) PRINCIPAL ABBREVIATIONS AND ACRONYMS AMEU Appraisal, Monitoring, and Evaluation Unit of CMDA CHIP Calcutta-Howrah Investment Program CIT Calcutta Improvement Trust CMA Calcutta Metropolitan Area CMC Calcutta Municipal Corporation CMDA Calcutta Metropolitan Development Authority CMACP CMA-wide Complementary Programs CMWSA Calcutta Metropolitan Water and Sanitation Authority CUDP I First Calcutta Urban Development Project (Cr 427-IN) CUDP II Second Calcutta Urban Development Project (Cr 756-IN) CUTP Calcutta Urban Transport Project (Cr 1033-IN) GOI Government of India GOWB Government of West Bengal HIT Howrah Improvement Trust RMC Howrah Municipal Corporation HDFC Housing Development Finance Corporation HUDCO Housing and Urban Development Corporation ILGUS Institute of Local Government and Urban Studies IWD Irrigation and Waterways Directorate - GOWB LGUDD Local Government and Urban Development Department - GOWB MDP Municipal Development Program MFC Municipal Finance Commission RGS Revised Grant Structure SURAD Shelter, Urban Renewal, and Area Development TRIP Transmunicipal Infrastructure Program INDIA FOR OFFICIAL USE ONLY THIRD CALCUTTA URBAN DEVELOPMENT PROJECT STAFF APPRAISAL REPORT TABLE OF CONTENTS Page No. I. CONTEXT ......................................... ....... 1 A. Impacts and Lessons of the Two Previous Investment Programs (1973-1983) ............................ 3 B. The Emerging Framework for Urban Management and Finance ...................... ....... ...... 5 II. THE PROJECT ........................................... 9 A. Objectives .................................... . . 9 B. Project Description ........... .......... ....... 10 C. Other Infrastructure Investments ................... 17 III. PROJECT COSTS AND FINANCING PLAN ...................... 19 A. Cost Estimates ............ ... .... ............. . 19 B. Financing Plan .........00........................... 19 C. Flow of Funds and On-lending Terms ................ 19 D. Additional Resource Mobilization .................*. 24 IV. PROJECT ORGANIZATION, MANAGEMENT, AND IMPLEMENTATION ... 24 A. Key Executing Agencies ....................... 24 B. Institutional Responsibilities ................ 26 C. Implementation Schedule ........................... 26 D. Land Acquisition ................................... 26 E. Procurement ......... ... .......................... 28 F. Disbursement ....................................... 29 G. Accounts, Audits, and Reporting Requirements ....... 32 H. Operations and Maintenance ......................... 33 I. Monitoring and Evaluation .......................... 34 J. Supervision and CMDA as Intermediary ............... 35 This report is based on findings of preappraisal and appraisal missions which visited Calcutta in June 1982, and in October 1982, respectively and on the contributions by CMDA's Appraisal, Monitoring, and Evaluation Unit. Both missions consisted of Messrs. Menezes, 11cCarthy, Pettigrew, Sengupta (ASPUW) and Turner, Consultant, assisted by Messrs. Menckhoff (ASPUW), Cohen (URBOR), D'Souza, Dillenberg, Jackson (Consultants) at appraisal. Ms. McReynolds and Ms. Reivuo-Yen, Secretaries, assisted in Washington, D.C. 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. Page No. V. FINANCIAL ASPECTS .................. o.. ............... . 35 A. Calcutta Metropolitan Development Authority ........ 35 B. Calcutta Municipal Corporation .....0-.............. 36 C. Cost Recovery Measures ..........o................ 40 D. Structural Adjustment of Municipal Finance ......... 46 E. Affordability and Replicability .................... 49 VI. PROJECT JUSTIFICATION ................... ............ 50 A. Summary ............................................ 50 B. Distribution of Benefits......................... 51 C. Project Risks .... ... ... .... . . . . ........ 52 D. Approach to Ongoing Appraisal and Evaluation........ 53 VII. AGREEMENTS, ASSURANCES AND RECOMMENDATIONS ............. 54 ANNEXES 1. BACKGROUND A. Urban Growth at the National, State, and Metropolitan Level ........e..... .. *.... .*.... **...... .. .. . ........ 59 B. Bank Group Role and Experience in Calcutta........... 60 C. Physical Achievements.............. ... .............. 62 D. Highlights from Project Performance Audit (CUDP I)... 63 2. KEY EXECUTING AGENCIES, RESPONSIBILITIES, REORGANIZATION A. Outline: CMDA, CMWSA, CMC, Municipalities........... 65 B. List of Subcomponents by Key Executing Agencies...... 65 CHART 1 - Reorganization of CMDA..................... 70 CHART 2 - Organization of the SURAD Directorate, CMDA 71 3. MUNICIPAL DEVELOPMENT PROGRAM A. Allocation of Funds.................................. 72 B. Sector Service Delivery Norms........................ 73 C. Physical Design Standards............................ 74 D. Summary Appraisal of Typical Municipality (Barasat).. 75 4. LIST OF SELECTED DOCUMENTS AVAILABLE IN PROJECT FILE 81 5. TABLES (listed on next page) 6. MAPS IBRD 16864 - Water Supply, Drainage and Sanitation Investments IBRD 16865 - Transportation, Shelter, Urban Renewal, and Area Development Investments -iii- Table 1 CMDA - Balance Sheet as of 3/31/80 through 1988 Table 2 CMDA - Forecast Sources and Applications of Funds 1983/84 through 1987/88 Table 3 CMC - Balance Sheet as at 3/31/80 through 1988 Table 4 CMC - Income and Expenditure Statement as at 3/31/80 through 1988 Table 5 CMC - Water Supply Operations: Sources and Uses of Funds Table 6 CMC - Consumer Survey and Metering Program Table 7 CMWSA - Sources and Uses of Funds (Operations) Table 8 RGS - Estimates of Potential Property Tax and Expected Collection Percentage Table 9 RGS - Annual O&M and Other Recurring Expenditure Table 10 RGS - Revised Grant Structure Table 11 MDP - Summary of Sector Investments over Project Period Table 12 MDP - Summary of Investments by Sector Table 13 TRIP - Summary of Sector Investments over Project Period Table 14 TRIP - Summary of Investments by Sector Table 15 CHIP - Summary of Sector Investments over Project Period Table 16 CHIP - Summary of Investments by Sector Table 17 CMDCP - Summary of Sector Investments over Project Period Table 18 CMDCP - Summary of Investments by Sector Table 19 TRIP - Cost Table 201 - Construction - Baranagar-Kamarhati Water Treatment Plant Table 20 TRIP - Cost Table 202 - Renovation - Serampore Water Treatment Plant Table 21 CHIP - Cost Table 302 - Remodelling - Transmissions Mains Table 22 CHIP - Cost Table 321 - Reconstruction - Durgapur Bridge г INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT STAFF APPRAISAL REPORT I. CONTEXT 1.01 The Calcutta Metropolitan Area (CMA) with a 1981 census population of 10 million, covers an area of 1,414 sq.km. It is the economic capital of the Eastern Region of India with a hinterland that includes states adjacent to West Bengal. Responsibility for metropolitan development rests with the State Government's Metropolitan Development Department and Local Government and Urban Development Department (LGUDD). Both departments are headed by the same Minister. LGUDD administers to the needs of Local Government state-wide, with day-to-day administration carried out through a Directorate of Local Bodiest and for non-CMA areas.. a Directorate of Municipal Engineering. The Metropolitan Development Department overviews expenditure on development infrastructure investments in the CMA and the performance of all Urban Development Authorities in the State. Local Government in the CMA includes 2 Municipal Corporations (Calcutta and Howrah), 37 municipalities, and 165 panchayats (non-municipal urban areas). About one-third of the CMA population live in the Calcutta Municipal Corporation area. 1.02 At the time of Independence and partition (1947), there was a massive inflow of refugees from East Pakistan (now Bangladesh), mainly into the CMA. The city, after two earlier decades of neglect, regressed in its ability to deliver even basic municipal services. A much publicized cholera epidemic in 1958 confirmed its world-wide reputation for having the worst urban conditions of any city of comparable size. The foundation of the Calcutta Metropolitan Planning Organization in 1960 led to extensive studies and recommendations embodied in the 'Basic Development Plan' (1966) that were not implemented at the time owing to a lack of funds and the absence of a cohesive institutional infrastructure. 1.03 During the 1960's, physical, social, and economic conditions continued to deteriorate. The number of 'bustees' I/ increased, and the existing housing stock deteriorated due to the mas sive overcrowding and inadequate services. Only about 100 million gallons per day (mgd) of treated water was available to a small section of the population in the metrocore, on an intermittent basis. All sanitation, with the exception of a sewered area covering Calcutta City, was in the form of service privies. This was dependent upon , at best, an irregular collection for disposal. Solid waste management was very inadequate. During the monsoon, extensive areas of low-lying land that had by now become unplanned high density settlements, were continuously waterlogged due to an inadequate drainage system. Pavement dwellers and solid waste heaps forced pedestrians onto the streets further aggravating already difficult traffic conditions, resulting initially from I/ 'Bustee' - local name for slum in which a 'thika tenant' (middle man) owns structures on long-term leased private land. -2- insufficient road space. During this period, a major economic recession, coupled with social and political instability led to GOI's active assistance and to moves by the State Government to institute changes. 1.04 Since the early 1970's, the major instrument of change has been the Calcutta Metropolitan Development Authority (CMDA), created by the Government of West Bengal (GOWB) in 1970 and, subsequently, financially supported in part by IDA. CMDA has: (a) provided an overall institutional and intersectoral perspective on Calcutta's problems; (b) developed a strategy to address urgent high priority needs; and (c) provided an executing agency to carry out investments to reduce the most serious service deficits. 1.05 The creation of CMDA as a single metropolitan planning and development authority was a modification of the recommendations made earlier in the Basic Development Plan which favored a Metropolitan Planning Authority and several functional Authorities. Of special significance was that a metropolitan capital budgeting process was incorporated in the State planning process, and the CMDA was made the agency for administering the capital budgeting process. CMDA has now evolved into an organization of over 4,000 staff capable of executing an investment program of around Rs 60/80 crores annually. 1.06 To date, IDA has financed two urban projects, CUDP I 1/ and CUDP II 2/ forming part of CMDA's Five-Year Investment Programs, and an Urban Tra7nsport Project. 3/ Progress on CUDP I was slow. Under CUDP II, however, there was impressive progress on all fronts as outlined below. A background note on urbanization trends in India, West Bengal, and the CMA, and on the performance of previous IDA-financed projects is in Annex 1. On the Urban Transport Project, operational and financial performance has been poor in contrast to physical performance. A review mission in the field, simultaneously at the time of appraisal agreed with GOWB a specific program and management actions to be implemented forthwith. IDA has been advised that the appointment of a task force of GOWB officers to move into key positions in Calcutta State Transport Corporation, the implementation of bus and tram fare increases, and the specific assignment of transportation planning responsibilities to CMDA, which were specified prerequisites for negotiations have been completed by March 31, 1983. A Project Performance 1/ The First Calcutta Urban Development Project (Cr 427-IN, 73/74-79/80), with an IDA Credit of US$35 million equivalent. 2/ The Second Calcutta Urban Development Project (Cr 756-IN, 77/78-82/83), with an IDA Credit of US$87 million equivalent. 3/ The Calcutta Urban Transport Project (Cr 1033-IN, 80/81-83/84), with an IDA Credit of US$56 million equivalent. -3- Audit Memorandum (PPAM) on CUDP I was completed in June 1982 (Report No. 4023). The highlights of this PPAM are reproduced in Part D of Annex 1. 1.07 The proposed Third Calcutta Urban Development Project (CUDP III) will continue IDA's assistance to GOWB with urban development in the CMA, particularly in the further evolution of the institutional and financial strengthening programs aimed at expanded service delivery, as described further in this report. A. Impacts and Lessons. of The Two Previous Investment Programs (1973-83) 1.08 A retrospective view of earlier investments illustrates the institutional, physical, and financial changes that have taken place and also points out some lessons which have been learned. Institutional 1.09 When CUDP I was initiated in the early 1970's, there was a lack of planning and implementing capacity in the CMA, in spite of the existence of more than 50 agencies, few of which had experience in the execution of large engineering projects. Neither were there clearly defined responsibilities for these agencies. The institutional response was for CMDA to take over many responsibilities from the other agencies, or at best, to use them as sub-contractors. The first five years were therefore focused on consolidation of CMDA's authority, the development of its own capacity for execution of large-scale engineering projects, and the restoration of a measure of confidence after a period of crisis. The investments reflected the remedial nature and priorities set out in the Basic Development Plan. 1.10 By 1977, CMDA had emerged as a viable and visible institution around which a meaningful development program could be designed. Under CUDP II, development still focussed on construction schemes, although the project was expanded into other previously neglected sectors, such as health and employment. A major effort was also made to improve and strengthen the legal framework and the managerial systems of both CMDA and the Calcutta Municipal Corporation (CMC), in whose jurisdiction the bulk of investments were located and which would be responsible for the operation and maintenance of completed works. 1.11 By the beginning of the 1980's, CMDA was increasingly subjected to public evaluation and review. For example it was felt that (i) CMDA had become too autonomous and powerful, and it was perceived as superimposed on the existing structure of local Government; (ii) because of its apparent preoccupation with the construction of physical infrastructure, too little attention was given to its planning, monitoring, and evaluating functions, as well as to fiscal discipline in the CMA; (iii) other agencies and institutions remained underutilized and consequently became weaker; and (iv). too much centralization made it less responsive to the needs of the community. Such criticism was an indication of the strength of CMDA and the powerful position it had established, but it also indicated the need for CMDA to take a broader view of the CMA's institutional framework and its own role vis-a-vis that of other agencies and local governments. -4- 1.12 The CMC too was cited as: (i) being unresponsive to public demands for better operation and maintenance of civic facilities; and (ii) not exercising financial discipline and consequently for being chronically dependent on increasing amounts of GOWB subsidies. Successful implementation of improved organizational and managerial systems over the past two years has helped clarify the true state of the CMC's finances and its internal institutional constraints. Further attention must now focus on: (a) more disciplined administration and training of personnel; and (b) CMC's commitment and adherence to action plans that would improve performance and ensure that new facilities are properly operated and maintained. Physical 1.13 CUDP I and CUDP II were primarily oriented to physical investments. CMDA's achievements in this regard are significant as described in Annex I, part C. For example, (i) nearly 35% or (2 million persons) of the estimated CMA population who are living in slums have benefitted from the Bustee Improvement Program; (ii) with improvements at Palta Water Treatment Plant and the inauguration of the new treatment works in 1983/4, the CMA's water supply will have increased from about 100 mgd in 1973 to 300 mgd, with greater coverage under a much enhanced distribution network. Worthwhile progress has also been made in several other sectors, such as drainage, solid waste management, and health. Improvements in urban transport and in the delivery of serviced urban land have been less significant, reflecting both the severity of physical constraints, and the institutional fragmentation in these two subsectors. 1.14 Although CMDA has developed an adequate capacity to execute physical works, there are still planning weaknesses. The consequences of these weaknesses include the following two examples: (i) Investments made in the high density areas of the metrocore, particularly CMC, are sometimes not well coordinated and full benefits may not be derived from certain facilities until complementary works are carried out. For instance, development of secondary and tertiary water distzibution and sewage collection systems lag behind the development of treatment facilities. (ii) The geographic disparity in service levels between the metrocore (Calcutta and Howrah) and the rest of the CMA has become more acute in all sectors. The CMA outside the metrocore has been absorbing nearly all the population growth in recent times while infrastructure investments have mainly been concentrated in the metrocore. Financial 1.15 Population growth and the operation, maintenance, and debt servicing for infrastructure facilities completed during the 1970's have placed significant additional financial burdens on local revenues. However, there have been inadequate increases of self-generated local revenues during the 1970's, particularly in the CMC, and local government financial gaps have become excessively large. During this period, the necessary steps were -5- nevertheless taken to establish the le$al and administrative basis required to improve local resource mobilization in the 1980's (see para 1.21). 1.16 The estimated resource gap 1/ in 1981/82 for the CMA was approximately Rs 33 crores, or 53% of total CMA revenue expenditures, of which Rs 16 crores was on account of CMC. When all assets under CUDP II are completed and handed over (see para 5.02), the gap would increase by a further Rs 10 crores. Included in this gap is an operation and maintenance (0&M) cost of Rs 12 crores for CUDP I and II investments, of which Rs 9 crores faLls on CKC (see para 5.07). Because of the financial situation, new infrastructure facilities have not been transferred from CMDA to local bodies at the rate originally planned. Resource gaps are covered by grants from COWB. Although O&M had been identified as an issue during CUDP I and a program of reform initiated under CUDP II, CMDA is still left with the responsibilities of maintenance of plant and other completed infrastructure as other agencies and local bodies have lagged in developiig their financial and technical capacity to take over these responsibilities. A program for the transfer of assets, including all improved bustees in the CMC, has now been established by GOWB, CMDA, and local bodies (see para 5.02). This program is related to the targets set for improved local resource mobilization. B. The Emerging Framework for Urban Management and Finance 1.17 Drawing on the lessons of the 1970's, GOWB has reviewed and adjusted the major thrust of the CMA development program in three principal areas: (a) institutional, (b) legislative, and (c) financial. This section outlines the emerging framework and provides a setting against which to view the proposed project. 1.18 Institutional Strategy. The State Government and CMDA have adopted, as part of a vigorous policy for strengthening local government, a two-tier (i.e., metropolitan and local) approach to the development of the CMA. CMDA's predominantly executing role will be suitably restructured while its coordinating, policy planning, monitoring and evaluating functions will be reinforced. At the same time, GOWB intends to strengthen other institutions and agencies participating in the development process within the CMA, and CMDA will become a major instrument for achieving such metropolitan-wide institutional strengthening. 1.19 Actions in institutional strengthening are oriented primarily to (a) redefine the responsibilities of CMDA, the municipalities in the CMA, and the various sectoral agencies, with the aim of rationalizing their relationships and functions, and (b) reorient and strengthen the internal organizational structure and resource base of each of these agencies as appropriate. The principal actions taken thus far include the following: (a) CMDA's role has been adjusted in several ways: (1) CMDA has been strengthened as a financial and policy intermediary with 1/ Defined as the difference between internally generated revenue receipts and revenue expenditures. -6- a strong Appraisal, Monitoring and Evaluation Unit (AMEU), (ii) its metropolitan planning function has been reorganized and is being strengthened; (iii) certain responsibilities such as for water supply and sewerage are being transferred to other agencies in order gradually to decrease CMDA's predominant role as an executive agency; and (iv) a time schedule has been prepared to transfer completed facilities to local bodies for operation and maintenance (see para 5.02). CMDA's internal organisation, management, and finance systems have been strengthened over the past four years (for instance, new accounting, budgeting, and management information systems have been introduced). (b) The municipalities have been given an expanded role in capital budgeting and in selecting their priority schemes within broad guidelines (technical and financial) set out by CMDA. The municipalities are carrying out detailed planning of selected schemes and will subsequently have full responsibility for implementation, operation and maintenance of investments in their respective areas. (c) The Calcutta Municipal Corporation's (CMC) internal organization, management and finance systems have been, and will continue to be further strengthened. Already introduced are new accounting, stores control, and management information systems. Consultants studies on CMC maintenance organisation and procedures will have started by April 1983. The CMC strengthening program will be replicated in other local bodies under CUDP III, starting with the Howrah Municipal Corporation. (d) A clear definition of the expanded and well-defined role and responsibilities in the CMA institutional structure of various sectoral agencies (such as the Calcutta Metropolitan Water and Sanitation Authority (CMWSA), Calcutta Improvement Trust (CIT), Howrah Improvement Trust (HIT), and Irrigation and Waterways Directorate (IWD)) has been developed by GOWB (see para 4.08). Action for further strengthening of these agencies will be taken under CUDP III, following the pattern of previous improvements within CMDA and CMC. (e) An integrated CMA-wide training program with special elements targeted to specific agency/institutional requirements has been formulated for inclusion in CUDP III (see para 2.22). 1.20 Legislation. New legislation, and amendments to existing legislation have been introduced to: (M) increase the financial resources of anicipalities and agencies; (ii) improve planning and control of land use; and (iii) strengthen local government. The following summarizes major changes in progress. (a) The West Bengal Central Valuation Board Act, 1978 provides for a Central Valuation Board (CVB) for improved valuation of lands and buildings in West Bengal for the purpose of increasing property tax revenues. The CVB was established in 1979. -7- (b) The West Bengal Town and Country (Planning and Development) Act, 1979, notified on January 16, 1982 for the CMA, provides for comprehensive land use planning and control in the CMA, and among other things, specifies explicitly that the CMDA is the Planning and Development Authority for the CMA. CMDA's planning directorate has been reorganized and strengthened. (c) The Bengal Municipal (Amendment) Act, 1980, already in force, provides for strengthening local government state-wide outside the jurisdictions of Calcutta and Howrah Municipal Corporations through the appointment of state-level cadres, 1/ improved property taxation, and other means for increasing municipal revenues; for example: a surcharge on commercial buildings, a 'professional tax', etc. (d) The Calcutta Municipal Corporation Act, 1980 and the Howrah Municipal Corporation Act, 1980 are both expected to come into force during 1983, and provide tools to the local bodies for improving their financial management and operations (see para 1.21(a) and (b) below) while opening up opportunities for new revenue sources (taxes on professional services, surcharge on the property tax, etc.). (e) The Calcutta 'Thika' Tenancy (Acquisition and Regulation) Act, 1981, notified on January 18, 1982, provides for the acquisition of 'Bustee' or 'khatal' 2/ lands held in lease by 'thika tenants' in Calcutta and Howrah, for the purpose of regulating such tenancies, and for planned development and distribution of such lands. Under the act, GOWB, having acquired the land, is empowered to recover from the "Thika Tenant" adequate monies for maintenance of civic services. Access to public areas by the civic authorities for maintenance can now be legalized. Preparation of an inventory of land and structures, is underway and is expected to be completed by about May 31, 1983. 1.21 Financial. Institutional and legislative changes which are either in effect or underway, have been partly aimed at the ultimate objectives of: (i) improving resource bases of local bodies; (ii) introducing better financial management practices; and (iii) emphasizing the importance of cost recovery and operations and maintenance in the delivery of urban services. Following are certain major implications of these initiatives. 11 Each municipality is being provided with four officers covering Administration, Finance, Engineering, and Public Health, and funded by the State Government. Recruitment has been slow but has accelerated in recent months. It has however not been possible thus far to recruit engineers; interim support services in this field to the municipalities will be provided by CMDA. 2/ 'Khatal' - local name for milk-producing buffalo holding on leased land. -8- (a) The CMC Act provides for the creation of a Municipal Fund comprising several accounts which will permit better accounting control for sources and uses of funds for certain categories of civic services, e.g., water and sewerage, roads, and bustee maintenance. The act also enhances the ability of the CMC to: (i) augment revenues from property taxes through increases in the assessment rates; (ii) raise other taxes; (iii) price water to cover the cost of production, distribution, operation, maintenance, depreciation, interest, and other related costs; (iv) increase metered water connections; (v) secure all rights over sub-soil water resources within the Corporation area; and (vi) license private tubewells. (b) The HMC Act is modelled generally on the lines of the CMC Act except that there is no water pricing clause, as bulk supply and pricing thereof will be the responsibility of CMWSA for areas outside the CMC. However, HMC is empowered to install block meters, or meters to premises for recording the consumption of.filtered water. It may then impose fees for consumption beyond any limits which may be set by regulations. HMC will also provide unfiltered water supplies for street washing and fire fighting. (c) The Central Valuation Board (CVB) has begun to have an impact by assisting the CMA municipalities in: (i) the selection and retention of assessors; (ii) the issuance of guidelines for valuation of properties; (iii) evaluation of property tax valuations to take effect from April 1, 1983 in accordance with the provisions of the Bengal Municipal (Amendment) Act 1980, and (iv) collection of current and arrears demand. GOWB now intends to significantly reinforce the CVB through adequate staffing and appropriate powers to improve its effectiveness. (d) Sectoral analysis of capital, operations, and maintenance costs in order to establish tariffs and prices were completed in October 1982 for sectors which allow for direct cost recovery (see Chapter V, paras 5.27-5.36). CMC and the CMWSA have recently completed an analysis of required tariffs and charges for the provision of water, sewerage, and drainage services within their respective jurisdictions. Revised pricing for land developed under the first two projects at Bhaishnabagata Patuli (BP) and East Calcutta (EC) reflects a commitment to full cost recovery and affordability in the shelter sector. Public transport is being addressed through the First Calcutta Urban Transport Project which seeks to improve the financial and operational performance of the Bus and Tram companies (see Annex 1, para 8). (e) A West Bengal Municipal Finance Commission (MFC) (See Chapter V, para 5.37) issued its report in March 1982. The MFC reviewed the organization, management, and financing of all municipal -9- bodies in the State and made broad recommendations 1/ for necessary improvements, partly drawing on the experience under CUDP I and II. Proposals were made to augment municipal revenues, improve the operating efficiencies of local bodies, and also accounting, collection, organizational and management improvements to municipalities. The principal recommendations have been implemented and the State Government is addressing itself to the remaining recommendations. The MFC's recommendation for a Revised Grant Structure has already been adopted and designed in detail. (See Chapter V, para 5.37-5.45). Summary 1.22 Given the size of the CMA and particularly the growth of some 37 municipalities outside the CMC and HMC, the process of institutional and financial reform must necessarily be gradual. Many institutional, technical, and political constraints inhibit dramatic, immediate change in performance and service provision. Nevertheless, the 10-year perspective of CUDP I and II suggests that considerable changes have in fact occurred. Past performance has set the stage for a concerted effort to build on the reforms of the 1970's and to improve the financing and delivery of urban services to growing numbers of residents of the CMA. II. THE PROJECT A. Objectives 2.01 The primary objectives of CUDP III are: (a) to continue and to consolidate the efforts set in motion during the 1970's and in particular to improve urban management in the Calcutta Metropolitan Area through a comprehensive approach in which institutional and financial reforms go hand in hand with physical improvements; and (b) to substantially increase the number of direct beneficiaries, particularly in the economically weaker sections of the community. 2,02 Secondary objectives have been established within the two primary objectives. These are: 1/ These actions were designed to put into place an essential part of a viable framework for urban development. They provide an opportunity to GOWB to place local authorities, including the CMC, on a much sounder financial basis and would thus reduce the financial drain on the state budget. -10- (a) to strengthen metropolitan and municipal government and other institutions responsible for urban planning, management, and finance; (b) to emphasize investments that complete or complement earlier investments so that optimum benefits are derived; (c) to rectify sectoral and spatial investment imbalances between the Metrocore (Calcutta/Howrah), and the remainder of the CMA; (d) to give high priority to the operation and maintenance of existing assets and new assets to be created, and to identify and implement ways for doing so, particularly through improved cost recovery and financial management policies; (e) to continue to emphasize investments aimed at satisfying the minimum basic needs for urban services at affordable standards; (f) to encourage the private sector to participate in development (for example, in prime locations where infrastructure and other urban services have been or are being improved, with CMDA assisting in land assembly, rezoning land use at strategic locations, etc.); and (g) to make greater use of institutional finance (such as that provided by the Housing and Urban Development Corporation (HUDCO), Housing Development Finance Corporation (HDFC)), and other agencies in order to make a significant impact on critical subsectors such as "shelter". B. Project Description 2.03 The project comprises CMDA'S Rs 330.00 crore (US$347.30 million) five-year investment program (April 1, 1983-March 31, 1988), with the exception of Rs 42.00 crores (US$44.20 million) which represent cost and time overruns on the previous five-year investment program. On the basis of both technical characteristics and institutional responsibilities for planning and implementation, the project has been organized into four subprograms (see Table 2.1). (a) Municipal Development Program (MDP) (b) Transmunicipal Infrastructure Program (TRIP) (c) Calcutta-Howrah Investment Programs (CHIP) (d) CMA-wide Complementary Programs (CMACP) -11- 2.04 Just over six million persons are expected to benefit directly from these investments, of whom about 70% are in the EWS group. 1/ Financially, the project represents only an 8% increase in nominal terms over CMDA's 78/79-82/83 actual investment expenditure. In real terms, the proposed investment program represents a 12% reduction over the 78/79-82/83 actual expenditures, reflecting a greater emphasis on institutional and financing strengthening in the CMA and a recognition of the need to allow for increasing cost of operation and maintenance. 2.05 Municipal Development Program (MDP). (US$98.90 million). This program, to be executed by the municipalities, seeks to deliver basic municipal services to the most deprived areas in each of 37 municipalities (4.2 million population) and the CMC (3.3 million) and HMC (740,000) within a range of service delivery norms and physical design standards, recommended by CMDA and which are affordable, and acceptable to IDA (see Annexes 3B and 3C). The program comprises investments at the 'ward' level. Improvements in water supply, drainage, solid waste management, and service privy conversion will alleviate the most acute deficiencies. Local road improvements will improve accessibility particularly during the monsoon. Improvements and expansion of markets will ease the acute shortage of available space; increase economic activity; and provide local authorities with increased resources through rents and taxes. As part of these area-based improvements, slum areas (bustees) in each municipality will be upgraded with basic utilities: water supply, drainage, sanitary latrines, brick-paved pathways, and streetlighting. 2.06 Transmunicipal Infrastructure Program (TRIP). (US$42.60 million). This program provides for the planning and execution by CMDA of critical infrastructure in the water supply, drainage, sanitation, and transportation sectors, from which benefits will be shared by two or more municipalities. Examples of subprojects include a new 30 mgd water treatment plant and primary grid at Barranagar Kamarhati, the renovation and expansion of an existing water treatment plant and primary grid at Serampore; improvements to a major drainage canal and pumping station (Beliaghata-Krishnapur-Bajola Khal) and the first phase of a Truck Terminal (and eventual wholesale market) at Kona. 1/ About 45% of the CMA population, or about 4.5 million people, belong to households in the Economically Weaker Section (EWS), with a monthly income of Rs 350 (approximately US$37 equivalent) or less per household. At current prices households with a monthly income of Rs 350 or less are conventionally defined as EWS, based on information from the early 1970's. However, CMDA now make the working assumption that households having a monthly income of Rs 475 or less (approximately US$52 and the mean-income of the conventionally defined LIC) are EWS. On this basis about 60% of the CMA population or 6 million people wo Id fall in the economically weaker section. -12- Table 2.1: FIVE YEAR INVESTMENT PROGRAM 1983/84-1987/88 (Rs Crores and US$ millions) /1 % of Rs. Crs. US$m Total I. Municipal Development Program (MDP) 94.00 98.90 33 Water Supply 18.86 Drainage 18.64 Sanitation 14.48 Bustee Improvement 8.29 Parks, Playgrounds 2.02 Crematoria .79 Transportation Infrastructure 22.35 Markets and Community Halls 8.57 II. Transmunicipal Infrastructure Program (TRIP) 40.46 42.60 14 Water Supply 23.62 Drainage 4.97 Sanitation 8.37 Transportation Infrastructure .50 Area Dev. - Kona Truck Terminal 3.00 III. Calcutta-Howrah Investment Programs (CHIP) 87.66 92.30 30 Water Supply 16.43 Drainage 5.42 Sanitation 35.09 Bustee Improvement 9.94 Traffic and Transportation 14.78 Urban Renewal and Bus Terminal 6.00 /2 IV. CMA-wide Complementary Programs (CMACP) 35.88 37.80 13 Shelter and Area Development 9.00 /2 Health 8.66 Small Scale Entrepreneur (SSE) 2.50 /3 Anchal Development 11.51 Technical Assistance and Training 4.21 Subtotal 258.00 271.60 90 Design, Supervision & Management 30.00 31.50 10 TOTAL PROJECT COST 288.00 303.10 100 Spillover (Cost and time overruns on previous program) 42.00 44.20 TOTAL INVESTMENT PROGRAM Rs 330.00 347.30 /1 Includes contingencies. TZ Seed capital only. /3 Establishment costs and interest rebate only. Loan funds to be provided by commercial banks. -13- 2.07 Calcutta/Howrah (Metrocore) Investment Programs (CHIP). (US$92.30 million). Two levels of investments will be made within the jurisdictions of the CMC and the HMC. In addition to the MDP (para 2.05) to be implemented by CMC and HMC at the ward level, CMDA will plan and execute (assisted as necessary by the CIT/HIT) a broader program of investments, focused on the optimization of existing infrastructure and recent new investments funded under CUDP I and II. In Calcutta, these will include, for instance (a) in the water supply sector, further improvements to the Tallah-Palta System, improvement and extension of a secondary grid in Calcutta, bulk metering and leak detection; (b) in sanitation, improvements to four existing sewage pumping stations and provision of an alternate power supply as well as improvements to three major drainage outfall systems; further attempts to renovate the existing sewerage and drainage system (including sewer cleaning), and an expansion of the ongoing Solid Waste Management Program; (c) in the Traffic and Transportation Sector, construction of key road links to enhance the efficiency of the existing inner-city road network and continuation of the Calcutta Traffic Engineering Project (CTEP), started under CUDP II to improve traffic management. CHIP investments in Howrah are also focused on optimizing existing infrastructure. For example, Rs 8 crores or nearly 50 percent of the funds for Howrah are allocated for the provision of house connections to the sewerage network and Howrah sewage treatment plant funded under CUDP I and CUDP II. Funds (Rs 6 crores) are included for 'seed capital' for Urban Renewal Schemes in both Calcutta and Howrah. Selective intervention by CMDA (or agencies on its behalf) will be made at strategic areas, already subject to speculative pressures, for example adjacent to the Metropolitan Transport Project (underground rapid transit) stations (see para 2.25) to facilitate the further development of these areas by the private sector. For example, under CUDP II, IDA partly financed reconstruction of the Howrah Fish and Pan Market (to a podium level), which included the acquisition and replanning of a significantly larger area (4.12 ha) to integrate public facilities (tram and bus terminal, pedestrian subway) with Howrah Railway Station, etc., all of which have been successfully implemented to date. High-rise commercial buildings are to be constructed above the podium by the private sector. The sale by auction of development rights for the first superstructure is expected to be completed during the period ending June 30, 1983 (see Chapter V, para 5.35). GOWB has agreed that 50% of net surplusses earned on the sale of development rights of urban renewal will be placed in a fund for implementing a shelter program in the CMA (see para 2.09). 2.08 CMA-wide Complementary Programs (CMACP). (US$37.80 million). These programs will be centrally initiated and coordinated by CMDA, but will involve the active participation of other agencies and state government departments for their implementation. All five complementary programs were initiated under CUDP II. These are to be selectively expanded and modified in the light of experience gained to date. They include the following programs. (i) Shelter and Area Development 2.09 Implementation of sites and services programs has previously been excessively slow and troublesome because of organizational, administrative, and management constraints in addition to land acquisition problems. This program therefore has a two-fold objective: (a) to reorganize and strengthen -14- the shelter and area development sector, with CMDA as the primary agency which will also assist and train other participating agencies in addressing the massive shelter deficiencies in the CMA, and (b) to directly assist in accelerating the availability of serviced urban land through the provision of approximately 25,000 serviced lots (one-sixth of the estimated incremental demand during the project period) affordable to a range of income groups. Land requirements over the project period have been identified (see para 4.10). The project will include 'seed' capital amounting to US$9.45 million with the balance (estimated at US$33.60 million) to be raised from institutional sources (see para 3.08). The seed capital and 50% of the net surpluses of Urban Renewal schemes will be placed in an "Area Development Fund" in CMDA. The purpose of this fund is to initiate and sustain the construction program, and as and when adequate institutional finance is obtained annually, the fund would be replenished. The seed capital would then be recycled to meet the investment needs for the following year (see para 4.18). (ii) Health Program 2.10 The proposed Health Program will expand the existing health infrastructure within the CMA, using the experience gained from the CUDP II Pilot Health Program. The objectives include: (a) expansion of the preventive-oriented activities developed so far to include a target population of about 2,000,000 bustee/slum dwellers throughout the CMA area; (b) use of local part-time Honorary Health Workers (HHWs) working at the bustee level to promote and teach proper health and hygiene techniques; (c) maximum cost efficiency by utilizing existing resources, e.g., buildings, equipment, and personnel, and (d) community participation by utilizing local people in the planning, implementation and monitoring of the Health Program through the establishment of popular committees at each level of the Health Care System. 2.11 The program will establish (i) 60 Ward Health Centers (one for every 30,000 population) to provide curative, preventive services (HHWs, preventive clinics, and family folders); (ii) 8 Polyclinics for small consultative, diagnostic, ambulatory, and curative services; (these will be financially self-supporting even with nominal fees as described in para 5.36); (iii) 15 renovated Maternity Clinics with facilities to provide supervised deliveries and Family Welfare/Planning Clinics; (iv) one Central Drug Center with 3 Satellite Centers and (v) one Urban Health Training Center for all levels of personnel. (iii) Small-Scale Entrepreneur Program (SSE) 2.12 The GOWB place the highest priority on, and have consistently stressed efforts towards increasing incomes and employment through the SSE program. This component aims to introduce into the formal banking system, a section of the community which hitherto has not had access to credit on reasonable terms, and to increase the involvement of the commercial banks with the small-scale enterprise sector. This builds upon the successful experience of a similar scheme under CUDP II, where the repayment experience for loans is exceptionally favorable, and the impact on incomes and -15- employment in the borrowing enterprises has been substantial. The CMA target group 1/ selected on income criteria have been estimated as follows: Group Monthly Income/Family * No.of Families % A up to Rs 350 46,000 27 B up to Rs 600 80,000 47 C above Rs 601 44,400 26 TT7T,( 1"u * The 'family' concept has been adopted to help 'secure' loans more effectively through reliance on community pressure for repayment. The project will address about 25% of each group or 42,600 families during the project period. 2.13 CUDP II experience is based mainly on Group A where commercial banks have been granting 'differential rate of interest' (DRI) loans at 4% interest, and covered by a 90% guarantee against default by GOI. The repayment record to date has been excellent, with only about 5% being classified as bad and doubtful, compared to some 15% experienced by the West Bengal State Financial Corporation with its 'established' medium entrepreneurs. Banks are required to make such loans in accordance with a Reserve Bank of India directive requiring banks to make DRI loans up to 1% of their total deposits. CUDP II did not address Groups B and C. 2.14 Under CUDP III, CMDA estimate that 25%, or 11,500 families, in Group A will be eligible for DRI loans averaging Rs 2000 each, and aggregating Rs 2.30 crores (US$2.40 million). 2.15 The main thrust of CUDP III however will be towards Group B where CMDA estimate about 20,000 families, will have access to commercial credit for the first time. The projected aggregate loans total is Rs 10.00 crores (US$10.50 million). A 'ceiling' of Rs 10,000 has been placed for each loan for this target group. Provision is also made for a 'bonus' in the form of a one time interest rebate to be paid to borrowers who repay their loans on schedule. This facility would be available only for the first operation with any given borrower. To obtain a second loan, a borrower would have to pay the normal rates charged by the Bank. Thus, borrowers will repay their loans at 12.5% per annum. If they qualify for the bonus, the effective interest rate will be adjusted ex post to 8.25%. The bonus funds will be released by CMDA to the commercial banks after satisfactory documentation has been furnished that the loans are duly repaid. The commercial banks would then credit the borrower's account with the bonus at 6-month intervals. The total interest rebate over five years on loans aggregating Rs 10.00 crores will be approximately Rs 0.60 crores (US$630,000). I/ These have been specifically identified by CMDA and include primarily: (i) already self-employed persons operating on 'kerbside' credit (ii) self-employed persons relying on hire of tools, implements (iii) self-employable skilled and semi-skilled persons, needing access to credit. -16- 2.16 GOWB has discussed this program will selected commercial banks. Based on these discussions and experience under CUDP II, GOWB confidently expect to secure not less than Rs 10.00 crores to implement this program. Agreement was reached at negotiations that the interest rebate feature will be reviewed annually by CMDA to determine its effectiveness; if it is found unnecessary or ineffective, it would be discontinued. 2.17 As banks gain experience, it is expected they will increasingly address all borrowers including those in Group C, who will receive loans at 12.5% per annum. The average loan size will be about Rs 8,000 and loans aggregating Rs 9.00 crores (US$9.45 million) are expected to be made to 11,000 families, or 25% of that target group. 2.18 To bring banks and borrowers together, CMDA will need to expand the CMA-wide network of teams working closely with the local banks, and community leaders, and groups, to publicize the program and seek help in identifying potential borrowers. This type of help was stressed by the commercial banks as the most important assistance that they could receive. CMDA has already furnished IDA with a final staffing structure and organization chart for implementing the program. 2.19 The project cost of this component includes: (i) the administrative cost of the SSE cell (Rs 1.90 crores), and (ii) the interest rebate cost of Rs 0.60 crores. (iv) The Panchayat Development Program. 2.20 This an extension of the program started under CUDP II. The primary objective is the provision of minimum standard all weather road access, water supply, and sanitation for the 165 non-municipal urban areas within CMA. Under this project, about 650 km of roads will be paved, about 2,000 hand-operated tubewells sunk, and about 15,000 of the existing approximately 65,000 service privies will be replaced with sanitary latrines. CMDA will implement the program with the exception of the tubewells which will be the responsibility of the panchayats. The aggregate cost of this component is Rs 11.51 crores (US$12.08 million). (v) Training and Technical Assistance Program. 2.21 The investments in Calcutta's infrastructure over the past decade have imposed a heavy burden on the organizations involved and their personnel. Both CMDA and the CMC have for some time run training courses through their respective training centers assisted with advice and guidance from the Indian Institute of Management in Calcutta (IIMC). The concept and design of CUDP III, with its increased emphasis on the local bodies, will impose even greater pressures on the GOWB for the development of personnel with adequate supervisory, managerial, and other essential skills. 2.22 GOWB has recognized the need for systematic training of local government personnel in the whole of West Bengal and in May 1982 set up an Institute of Local Government and Urban Studies (ILGUS) which will help meet this need. Metropolitan authorities like the CMDA, CMWSA, CIT, and HIT will -17- also make use of ILGUS for training of their higher level personnel and for certain other kinds of training. Recruitment of ILGUS staff is underway. 2.23 The total cost, including contingencies of the Technical Assistance and Training component is estimated at Rs 4.31 crores (US$4.53 million). The foreign exchange component is estimated at Rs 0.72 crores (US$756,000), which will go towards overseas training, foreign consultancy for ILGUS, requisition of a portion of the library collection for ILGUS from abroad, and advisory and consultancy services for CMDA. A significant portion of costs of the CUDP III training program are devoted to the establishment and training program of ILGUS which, in summary, has as its objectives: "(i) to create an awareness of the role of training as an intervention measure for improving the managerial competence of municipal bodies; (ii) to provide the training facilities primarily for the municipal bodies but also for other urban authorities of the State; (iii) to provide consultancy services to its client organizations; and (iv) to build up a data bank and conduct research studies in order to aid with the training and consultancy activities, and also to help the policy making authorities of Local Government and Urban Development Department of the State Government and municipal bodies in the urban authorities." I/ The overall training program is ambitious: ILGUS will attempt to directly train about 10,000 persons while the CMC Training Center will cater for another 10,000, and the CMDA Training Center for approximately 2,000, making a total of about 22,000 personnel to be trained during the project period. 2.24 CMDA would seek advisory and consultancy services for the following: (i) in the Water Supply, Drainage, and Sanitation sectors of about 20 person months of foreign experts; (ii) a CMA-wide Transport Study of about 120 person months of which about 10 person months would be of foreign content; (iii) annual inspections of major infrastructure projects costing about US$15,000 over the life of the project; (iv) technical assistance for the municipalities in accounting and (v) organization, management, and finance studies for HMC and the larger municipalities. IDA has discussed and reviewed draft terms of reference for all the above studies. C. Other Infrastructure Investments 2.25 The project will be implemented in the context of several other significant macro-infrastructure investments listed below, which are currently under construction and scheduled for completion at various dates within the project period. (See Map IBRD 16865). The major schemes, implementing agencies, estimated costs in 1982 prices and anticipated completion dates are as follows: 1/ Quote from LGUDD's Terms of Reference for ILGUS. -18- Project Responsibility Cost Due Date (Rs crores) a) Metropolitan Metro Railway, Calcutta 680 Phase I 1984 Transport (a subsidiary of Indian Phase II 1985 Project Railways) remainder 1987 b) Second Hooghly Second Hooghly Bridge Bridge Authority with CIT/HIT 170 1986 (Princep Ghat) c) Kalyani/Bansberia GOWB/PWD 8 1984 Bridge d) Belgharia GOWB/PWD 19 1984 Expressway e) Dum-Dum-Barasat Eastern Railways 5.5 1983 Suburban Railway Extension f) Coal Gas Plant CMDA 30 1987/88 and Distribution Network g) Telecommunications Rehabilitation Indian Ports & Telegraphs N/A 1987 2.26 Others such as the construction of a new Railway passenger terminal on the Howrah side of the Second Hooghly Bridge, are at an advanced stage of planning. All will have a significant impact on land use and values, and consequently on local government financial resources, and will ultimately contribute to the overall efficiency of the CMA. Only limited efforts have been made to quantify the long-term implications of these major investments on GOWB's future urban development resources. CMDA is actively involved as the designated Development Authority under the Act (see para 1.20(b)) in the coordination of strategic actions in relation to these investments, through various traffic and other coordinating and liaison committees. 2.27 Funding for these investments is external to the CMDA Plan, and includes various sources including direct GOI grants. Implementation responsibility for all, except the gas distribution system, is with agencies other than the CMDA. In defining and appraising CUDP III, close attention has been given to these external investments and institutional responsibilties, particularly in assessing the degree of institutional reorganization required and the implementing capacity of CMDA and other agencies. 2.28 During negotiations, it was agreed that CMDA will consult with IDA on any major changes proposed in its investment program for the period April 1, 1983 through March 31, 1988 (as set out in Table 2.1). -19- III. PROJECT COSTS AND FINANCING PLAN A. Cost Estimates 3.01 Out of an investment program totalling Rs 330.00 crores (US$347.30 million), the total project cost, including contingencies, is estimated at Rs 288.00 crores (US$303.10 million). The foreign exchange component is Rs 46.75 crores (US$49.18 million) or about 16% of project costs, with Rs 7.36 crores (US$7.73 million) estimated as taxes and duties. Land acquisition costs are estimated at Rs 6.12 crores (US$6.43 million). Summary cost estimates are given in Table 3.1. Detailed cost estimates for each subprogram, by time and component are given in Annex 5. 3.02 Base cost estimates are in January 1983 prices. Cost estimates for about 15% of project investments in civil works in the TRIP and CHIP components are based on final engineering design. Cost estimates for the remaining civil works in the above components are based on outline designs and the cost of similar works carried out recently in the area. Cost estimates for MDP and CMACP schemes are based on final engineering design for a representative range of investments representing municipalities of varying densities, locations, and physical conditions. Estimates for equipment, vehicles, and materials are based on recent quotations from suppliers. Average person-month costs for consultants services and technical assistance are estimated at Rs 10,000 for locally procured services. Foreign consultancy services will be required for advising CMDA in the water, sewerage, and transportation sectors, and are estimated at US$11,000 per person-month, including contingencies. Physical contingencies have been estimated at 10% for civil works with detailed engineering, and 15% for civil works with preliminary engineering. No physical contingencies have been applied to land, hand-operated tubewells, equipment, vehicles, and consulting services and technical assistance. Price contingencies have been estimated at 8.0%, 7.5%, 7%, 6% and 6% for FY84 through FY88 for both foreign and local costs, including land costs. B. Financing Plan 3.03 The proposed IDA credit of US$147 million would finance about 50% of total project costs net of taxes and duties. The credit would cover 100% of the estimated foreign exchange costs (US$49.18 million) and 39% of local costs. The Financing Plan is set out in Table 3.2. C. Flow of Funds and On-lending Terms 3.04 Retroactive financing not exceeding US$500,000 is recommended for expenditures incurred after March 1, 1983 for civil works, equipment purchases, and consultants' services for engineering design. 3.05 The credit would be made available to GOI, which would pass it on to GOWB on its standard terms and conditions as part of the Central Government assistance to the state. INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT Table 3.1: PROJECT COST SURNARY Program/Sector Local Foreign Total Local Foreign Total % Foreign 7 of TOTAL - ----Rs crores------ -----US$.millions---- EKchange BASE COST A. MUNICIPAL DEVELOPMENT PROGRAM (Nib') 1/ 1) Water Supply 11.89 1.71 13.60 12.52 1.80 14.32 13 2) Drainage 12.10 1.64 13.74 12.74 1.72 14.46 12 3) Sanitation 9.60 1.34 10.94 10.10 1.41 11.51 12 4) Bustee Improvement 5.38 .73 6.11 5.66 .77 6.43 12 5) Parks, Playgrounds 1.64 - 1.64 1.72 - 1.72 - 6) Crematoria .60 .04 .64 .63 .04 .67 6 7) Transportation Infrastructure 13.58 2.91 16.49 14.30 3.07 17.37 18 8) Markets & Community Halls 5.72 .66 6.38 6.02 .70 6.72 10 SUBTOTAL 60.51 9.03 69.54 63.69 9.51 73.20 13 36 8. TRANSMUNICIPAL INFRASTRUCTURE PROGRAMS (TRIP) 1) Water Supply 14.49 2.97 17.46 15.26 3.12 18.38 17 2) Drainage 3.24 .44 3.68 3.40 .47 3.87 12 3) Sanitation 5.32 .91 6.23 5.60 .96 6.56 15 4) Transportation Infrastructure .39 .02 .41 .41 .02 .43 4 5) Area Development 2.10 .18 2.28 2.21 .19 2.40 8 SUBTOTAL 25.54 4.52 30.06 26.88 4.76 31.64 15 15 C. CALCUTTA-HOWRAH IMPROVEMENT PROGRAMS (CHIP) 1) Water Supply 10.88 1.86 12.74 11.45 1.96 13.41 15 C 2) Drainage 3.70 .49 4.19 3.90 .51 4.41 12 1 3) Sanitation 23.16 3.50 26.66 24.38 3.69 28.07 13 4) Bustee Improvement 7.14 .97 8.11 7.51 1.03 8.54 12 5) Transportation Infrastructure 9.92 1.18 11.10 10.45 1.23 11.68 11 6) Urban Renewal & Bus Terminal 4.23 .56 4.79 4.45 .59 5.04 12 SUBTOTAL 59.03 8.56 67.59 62.14 9.01 71.15 13 34 D. CMA-WIDE COMPLEMENTARY PROGRAMS (CMACP) 1) Shelter & Area Development 8.65 - 8.65 9.11 - 9.11 - 2) Health 6.73 .26 6.99 7.09 .27 7.36 4 3) Small-Scale Entrepreneur (SSE) Program 2.07 - 2.07 2.18 - 2.18 - 4) Panchayat Development 7.76 .88 8.64 8.16 .93 9.09 10 5) Technical Assistance & Training 2.71 .61 3.32 2.85 .64 3.49 18 SUBTOTAL 27.92 1.75 29.67 29.39 1.84 31.23 6 15 TOTAL BASE LINE COSTS 173.00 23.86 196.86 182.10 25.12 207.22 12 100 DESIGN, SUPERVISION, MANAGEMENT 15.00 15.00 30.00 15.75 15.75 31.50 50 15 PHYSICAL CONTINGENCIES 14.84 2.15 16.99 15.62 2.27 17.80 13 9 PRICE CONTINGENCIES 38.41 5.74 44.15 40.43 6.04 46.47 13 22 TOTAL-PROJECT COSTS 241.25 46,75 288.00 253.00 49.18 303.08 .16 146 1/ Intersectoral allocations are subject to change on completion of appraisal of all municipalities, expected to be completed by April 30, 1983. -21- Table 3.2: FINANCING PLAN 1983/84-1987/88 Rs US$ FUNDS REQUIRED Crores millions % Proposed Project a) New Investments 258.00 271.60 78 b) Design Supervision Management 30.00 31.50 9 Total Project Costs 288.00 303.10 87 Spillover from previous plans 42.00 44.20 13 TOTAL INVESTMENT PLAN COSTS 330.00 347.30 100 SOURCES OF FUNDS State Plan Funds (includes proceeds of IDA credit) 171.40 180.40 52 Minimum needs program 23.30 /a 23.40 7 CMDA Market Borrowings 100.90 106.20 31 Octroi Receipts (net) to CMDA 35.40 /b 37.30 10 Total GOWB/CMDA funding 330.00 347.30 100 Estimate of institutional finance required by CMDA for shelter and area development 32.00 33.60 Commercial bank financing towards small-scale entrepreneur (SSE) program 10.00-20.00 10.50-21.00 /a GOI Grant through GOWB. Lb Represents Rs 186.60 crores of gross octroi receipts less Rs 151.20 crores for debt service and sinking fund. 3.06 GOWB has designated CMDA as the agency through which all project funds would flow. Using the several sources of funds described in Table 3.2, CMDA would pass them on to implementing agencies and local bodies, or itself construct assets which it would turn over to operating agencies on completion. CMDA's onlending rate to executing agencies would be based on the cost of its borrowings over the project period currently expected to be 7.75% a year, plus a half percent service charge, except in the case of urban renewal schemes where its rate would be the prevailing commercial bank rate (presently 12.5%). Agreement was reached at negotiations that CMDA will onlend at the prevailing commercial rate for urban renewal schemes, and at its projected weighted average cost of borrowing, plus a half percent service charge for other investments, but in no case less than 8.25% a year. -22- Table 3.3(a): TERMS AND CONDITIONS OF ONLENDING SECTOR GOWB TO CMDA TO CMDA LOAN TERMS AGENCIES LOAN TERMS Urban Renewal 100% Loan 15 yrs. at 7% incl. 100% Loan 15 yrs. at market rate 5 yrs. grace (presently 12.5%) incl. period. Interest 5 yrs. grace period. payable annually. Interest payable annually. Repayment of loan Repayment of loan in in equal periodic equal periodic payments payments combining combining principal and principal and interest (i.e., ordinary interest, (i.e., annuity). ordinary annuity). Transmunicipal 100% Loan " 100% Loan 20 yrs. at 8.25% (incl. Water Supply 1/2% service charge) Projects incl. 5 yrs. grace period. Interest payable annually. Repayment of loan in equal periodic payments combining principal and interest (i.e., ordinary annuity) Area On-site " On-site 15 yrs. at 8.25% (incl. 1/2% Development investments investments service charge) incl. 5 yrs. 100% loan, 100% loan; grace period. Interest pay- off-site off-site able annually. Repayment of investments- investments loan in equal periodic pay- 100% grant 100% grant ments combining principal and interest (i.e., ordinary annuity. Transmunicipal 100% grant - 100% grant Drainage, Sanitation and Traffic & Transportation Municipal 100% loan same as in 100% loan Same as in Area Develop- Projects: Urban ment (see above). Markets, Renewal above. Community Halls, and other commer- cial projects incl. water sup- ply & sanitation Other Municipal 2/3 loan & Same as in 2/3 loan & Same as in Area Develop- Projects incl. 1/3 grant. Urban Renewal 1/3 grant. ment (see above). parks, playgrounds, crematoria. Note: See Table 3.3(b) opposite for application of the above terms and conditions to the project components. -23- INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT Table 3.3(b): FLOW OF FUNDS AND ONLENDING TERMS FROM CMDA TO LOCAL BODIES/IMPLEMENTING AGENCIES (Rs lakhs) -------------SUB-PROGRAMS------------- Total Loan Components MOP TRIP CHIP CMACP Total Grant TOTAL Water Supply 1885.62 2361.89 1643.35 - 5890.86 Grant - - - - Subtotal 1885.62 2361.89 1643.35 - 5890.86 Drainage Loan 1249.17 - - - 1249.17 Grant 615.26 496.80 542.29 - 1654.35 Subtotal 1864.43 496.80 542.29 - 2903.52 Sanitation Loan 1129.12 33.43 947.56 - 2110.11 Grant 318.47 803.19 2561.93 - 3683.59 Subtotal 1447.59 836.62 3509.49 - 5793.70 Bustee Improvement Grant 829.44 - 993.56 - 1823.00 Subtotal 829.44 - 993.56 - 1823.00 Parks, Playgrounds Loan 135.35 - - - 135.35 Grant 66.66 - - - 66.66 Subtotal 202.01 - - - 202.01 Crematoria Loan 53.02 - - - 53.02 Grant 26.12 - - - 26.12 Subtotal 79.14 - - - 79.14 Transportation Infrastructure Loan 1497.56 - - - 1497.56 Grant 737.61 49.97 1477.74 - 2265.32 Subtotal 2235.17 49.97 1477.74 - 3762.88 Markets and Community Halls Loan 856.51 - - - 856.51 Grant - - - - Subtotal 856.51 - - - 856.51 Urban Renewal Loan - - 599.86 - 599.86 Grant - - - - Subtotal - - 599.86 - 599.86 Shelter & Area Development Loan - 45.09 - 764.97 810.06 Grant - 255.51 - 134.99 390.50 Subtotal - 300.60 - 899.96 1200.56 Health Grant - - - 865.86 865.86 Subtotal - - - 865.86 865.86 Small-Scale Enterprise Loan - - Grant - - - 250.34 250.34 Subtotal - - - 250.34 250.34 Anchal Development Loan - - 1 1 Grant - - - 1151.04 1151.04 Subtotal - - - 1151.04 1151.04 Technical Assistance Training Loan - - - - - Grant - - - 421.52 421.52 Subtotal - - - 421.52 421.52 TOTAL LOAN 6806.35 2440.41 3190.77 764.97 13202.50 TOTAL GRANT 2593.56 1605,47 5575.52 2823.75 12598.30 GRAND TOTAL 9399.91 4045.88 86b.79 JAe* zlnou.ov /1 Excludes Design, Supervision, and Management Costs. -24- 3.07 The nature of the proposed investments would determine the mix of loan/grant funds. Remunerative schemes for example, would be on the basis of 100% loan; partly or fully non-remunerative schemes would have a grant element. The terms and conditions of onlending for the project are shown in Table 3.3(a). Table 3.3(b) indicates the split between loans and grants of each component. As compared to virtually 100% grant in the past, there will overall be approximately equal proportions of loan and grant (see Table 3.3(a)). The reason for the 50% overall grant element is attributable to the investments in Sanitation, Bustee Improvement, Transportation Infrastructure, and Panchayat Development, which are normally funded from the general revenues of the State. The loan portion will be directly recovered from user charges (see paras 5.27-5.35). The grant portion will be indirectly recovered through improvements to the general revenues of local bodies. Annex 2B lists the agencies and local bodies responsible for execution of each subproject or program. D. Additional,Resource Mobilization 3.08 An important feature of this project is CMDA's intention and strategy to mobilize sources of finance such as commercial banks, public institutions, and the private sector. For example: (a) under the SSE program, CMDA expects the commercial banks to lend between Rs 10-20 crores, depending on the aggresiveness with which this component is pursued; (b) use of seed capital for shelter and area development (Rs 9.00 crores)(US$9.45 million) is expected to generate a further Rs 32.00 crores (US$33.60 million) over the project period from institutional finance (the estimate is the net cash requirement for CMDA based on projected delivery schedules of serviced sites, and cash income from deposits, outright sale, etc.); and (c) Rs 6.00 crores (US$6.30 million) of seed capital for urban renewal schemes is expected to generate substantial surpluses from the sale of development rights (Chapter V, para 5.35). IV. PROJECT0RGANIZATION.,,MANAGEMENT,, AND IMPLEMENTATION 4.01 The project will be implemented by existing institutions and agencies of the GOWB, and the commercial banks. The principal ones include the CMDA, CMC, HMC, CMWSA, CIT, HIT, and municipalities, and the State departments of (a) Local Government and Urban Development, (b) Irrigation and Waterways, and (c) Health. A. Key-Executing Agencies 4.02 Key roles are played by: (a) CMDA, (b) CMC, (c) CMWSA, and (d) the Municipalities. Annex 2A provides a brief summary on the organization of each of these. Organizational changes and staffing for each agency were discussed during project preparation, and a timetable agreed at appraisal for completion of all necessary actions prior to negotiations. These are as follows. -25- 4.03 CMDA has been restructured to reflect the nature of its future role in accordance with Chart 1 in Annex 2. Of special significance is the establishment of the Shelter, Urban Renewal, and Area Development (SURAD) Directorate Unit, specifically to address the problem of shelter, (Chart 2, Annex 2), and the setting up of regional and zonal offices (see para 4.06). Staff strengthening for CMDA as a whole, but especially for the AMEU and SURAD is progressing well and is being closely monitored. New recruitment is being focused on professional and technical skills hitherto in short supply in CMDA. These include economists, physical planners, financial analysts, data processing operators and programmers. Confirmation was obtained at negotiations that: (a) a revised staffing structure and organization of CMDA has been approved by its Board and that a substantial number of key managerial positions had been filled, the remainder to be appointed by June 30, 1983; and (b) that CMDA had issued a letter of intent with the Housing Development Finance Corporation (HDFC), for two years of advisory and training services to assist CMDA's Shelter, Urban Renewal, and Area Development (SURAD) Directorate in developing its marketing, loan administration, and financial management capabilities, starting not later than September 30, 1983. 4.04 The immediately critical staffing requirements of the CMC are specifically related to: (a) financial management, particularly in the area of property tax (3 positions)(Chapter V, para 5.17); (b) management of a water metering program, including surveys, (9 positions)(Chapter V, para 5.28); and (c) two key staff for stores inventory and control. During negotiations, confirmation was obtained that staffing for items (a), (b) and one of the two positions in (c) had been completed. The remaining position would be filled by June 30, 1983. 4.05 CMWSA's operations and staffing are being strengthened to meet its revised role. Additional staffing has been approved by CMDA and professionals are being recruited, especially in the areas of revenue administration, accounting, finance and maintenance. Confirmation was obtained at negotiations that: (a) all remaining identified positions would be filled by June 30, 1983; and (b) an accounting system already designed and implemented had become partly operational from April 1, 1983, in accordance with an operating schedule prepared by CMDA. 4.06 For the municipalities, the most critical support is that to be provided by the CMDA through the establishment of two regional offices and five zonal offices adequately staffed through reassignment of a proportion of personnel from CMDA's existing cadres. About 75% of the staffing agreed at appraisal is already in place. The municipalities are also to receive LGUDD's and CMDA's assistance in project management, financial controls, etc. This assistance will include advice in the recruitment of varying numbers of technical staff. These categories include: engineers, overseers, accountants, purchase clerks, works assistants, and draftsmen. Monitoring of the project will include a review of staff recruitment in accordance with the assessment made at appraisal. -26- 4.07 Given the nature of the investments, the pragmatic selection of institutions and agencies for executional responsibility (Annex 2B), the previous experience of CMDA, and CMDA's available expertise for extending technical support to other agencies, project implementing capacity is sufficient. B. Institutional Responsibilities 4.08 Chart 4.1 sets out the institutional responsibilities for the detailed planning (DP), execution (EX), and operation and maintenance (OM) of major portions of the program under the project. A distribution of subprojects for execution by various agencies is listed in Annex 2B. The allocations are made on the basis of each agency's agreed role and responsibility within the evolving framework for urban management and finance in the CMA. (see para 1.18). C. Implementation Schedule 4.09 The project would be implemented over the period April 1, 1983 to March 31, 1988. Given the experience of CUDP II (Annex 1, para 7) and with the formation of a specialized Program Management Unit in CMDA (para 4.31(a)) to monitor both financial and physical progress of the Program, this timetable appears realistic. Detailed engineering for sub-components to be implemented during the first year of the project had been well advanced at the time of negotiations. The phasing of construction and funds requirements for all subprojects and programs are given in separate summary tables by time and component in Annex 5, Tables 11-22. Agreement was reached at negotiations that at six month intervals, CMDA will update the individual subproject implementation schedules in the light of progress being made, and provide copies of these to IDA as part of progress reporting. D. Land-Acquisition 4.10 Land acquisition has been a problem under CUDP II. Where possible, programs have been designed to totally eliminate land acquisition as in the health component (para 2.10). Under the MDP, land acquisition requirements are limited. The shelter and area development program is the most significant in land requirements. However, under CUDP III, CMDA has identified five specific sites for its SURAD program, all of which are now at various stages of acquisition. A specific timetable for land acquisition has been agreed to by CMDA. The total land requirement for this subprogram in the project for the next five years is approximately 760 ha (1,880 acres). In addition, as a part of CMDA's long-term shelter strategy, it has also begun to acquire approximately 2,025 ha (5,000 acres) of heretofore non-urban land along the Eastern Metropolitan Bypass where there is a large potential for future development. -27- INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT CHART 4.1: INSTITUTIONAL RESPONSIBILITIES MUNICI- PANCHA- COMMERCIAL CMDA CMWSA CMC HMC PALITIES YATS CIT HIT IWD ILGUS HEALTH POLICE BANKS PROJECT/PROGRAM PLANNING EX PROGRAM MANAGEMENT EX PROJECT APPRAISAL/ MONITORING/EVALUATION EX MDP: MULTISECTOR DP DP DP COMPONENTS EX EX EX OM OM OM TRIP: WATER SUPPLY DP DP EX EX OM OM SANITATION & DP DP DP DRAINAGE EX EX EX OM OM SOLID WASTE DP EX OM TRANSPORT INFRAS. DP EX OM OM OM AREA DEVELOPMENT DP (TRUCKING SITE) EX OM OM CHIP: WATER SUPPLY DP DP DP EX EX EX SANITATION & DP DP DP DP DRAINAGE EX EX EX EX OM OM OM OM SOLID WASTE OP DP DP EX EX EX O OM TRANSPORT PLANNING DP TRANSPORT INFRAS. DP DP DP EX EX EX OM OM O OM TRAFFIC ENGINEERING DP DP DP MANAGEMENT EX OM OM URBAN RENEWAL DP DP OP EX EX EX OM OM CMACP: SHELTER DP EX EX EX OM OM OM HEALTH DP DP EX EX EX EX O OM OM OM EMPLOYMENT (SSE) DP EX EX PANCRAYAT DP DP DEVELOPMENT EX EX OM TRAINING DP DP DP EX EX EX NOTE: DP = DETAILED PLANNING EX = EXECUTION OM = OPERATION & MAINTENANCE -28- Assurances were obtained from CMDA during negotiations, that: (a) it will have in its possession about 290 ha (718 acres) at the following sites: (i) West Howrah--121 ha (300 acres) by June 30, 1983; (ii) Baishnabghata-Patuli and East Calcutta and Howrah extensions--88 ha (218 acres)--by December 31, 1983; (iii) West Howrah--81 ha (200 acres)--by February 28, 1984; and (iv) the balance--470 ha (1162 acres) by March 31, 1985. (b) it will have completed detailed engineering and specifications for earthfilling at West Howrah by June 30, 1983; and (c) it had secured tentative commitments from financial institutions for its area development program. E. Procurement 4.11 Civil Works. The total cost of civil works, including contingencies, is US$215 million. Civil Works under the TRIP and CHIP programs total US$108 million, including contingencies. Within this latter amount about US$36 million of works would be procurred through international competitive bidding (ICB), in accordance with the Bank's Guidelines. ICB procurement would be required for (i) construction of the Baranagar-Kamarhati Water Treatment Plant (including equipment), (ii) renovation of the Serampore Water Treatment Plant (including equipment), (iii) construction of the new water main from Tallah to Central Calcutta, (iv) reconstrucion of Durgapur Bridge.1/ Bidders for the above works would be prequalified in accordance with criteria already agreed with IDA. Eligible domestic bidders would be afforded a preference of 7 1/2% under ICB procurement. All these contracts are expected to be won by Indian contractors. Experience of ICE under CUDP II indicated that foreign contractors did not even request prequalification. The balance of civil works under the TRIP and CHIP programs totalling US$72 million, comprise investments in primary and secondary grids, staff quarters in water supply, improvements to existing sewage pumping stations and outfalls, rehabilitation of existing drainage canals, and bridge and road approach works in the transportation sector. These would not interest foreign bidders as they are widely dispersed over area and time, and will result in a large number of small contracts. CMDA estimates these will comprise about 55 contracts of about US$400,000 and 500 contracts of US$100,000 and under. CMDA however, would, where practicable, group these works into contract packages of not less than US$2.6 million each, to be let on a "slice and package" basis under competitive bidding advertised on an all India basis in accordance with procedures acceptable to IDA. Civil Works which cannot be grouped as indicated above, would be awarded under contracts following competitive bidding advertised locally, which are satisfactory to IDA. 4.12 Civil works under the MDP and CMACP components totalling US$107 million, including contingencies, will be dispersed over the whole of CMA and 1/ See Annex 5, Tables 10 to 22 for detailed cost tables of items (i) through (iv). -29- be phased over the implementation period, which will result in a large number of small contracts. CMDA estimate that these works will require over 20,000 contracts, grouped to the extent possible. These contracts would not interest foreign bidders. The contracts will be let following local competitive bidding procedures, which are satisfactory to IDA. 4.13 Plant, Equipment, and Vehicles. Procurement of plant, equipment, and vehicles under the project totals about US$25 million equivalent, including contingencies. Contracts for about US$9.50 million for bulk meters, leak detection equipment, gully pit-emptiers, jetting machines, tipping trucks, tanker lorries, tractors, payloaders and bulldozers, will be awarded by CMDA (and other executing agencies) on the basis of ICB in accordance with IBRD/IDA's guidelines. Qualifying domestic manufacturers would receive a preference in bid evaluation of 15% or the import duty, whichever is the lower. Contracts for pipes (US$8 million) and pumps (US$2 million) would be awarded by CMDA and other executing agencies under local competitive bidding procedures, which are satisfactory to IDA. These involve a variety of sizes, distributed in space over the CMA and phased over the whole project period. Cars/jeeps (US$0.2 million) and miscellaneous solid waste equipment, including handcarts, tricycle trailers, containers, small tools (US$3.8 million) which are readily available locally, and have well-established repair and spare parts outlets, are also to be similarly procured. There are practical difficulties in packaging these items into contracts large enough to attract foreign bidders. Small items of plant, equipment, and materials in packages of less than about US$10,000 and totalling about US$1,500,000, may be let after obtaining quotations from at least three suppliers. 4.14 Contract Review. All bidding packages for civil works estimated to cost US$500,000 equivalent or more, and all bidding packages for plant, equipment, and vehicles estimated to cost US$200,000 equivalent or more, would be subject to IDA's prior review of procurement documentation, resulting in a coverage of about 20% of the total estimated value of works contracts, and about 66% of goods contracts. This will involve a review of about 59 contracts (21 equipment, 38 civil works). The balance of contracts would be subject to random post review by IDA after contract award. 4.15 Consultant's services totalling about US$3.5 million to be financed from the Design, Supervision, and Management allocation of the Project, will be required for those major and more complex items for which consultancy support is necessary: (i) Transmission main from Tallah-Auckland Square and S. Mullick Square; (ii) Abstraction and rain water mains from the River Hooghly to the B.K. Treatment Plant; (iii) Improvement to the Ballygung and Palmers Bazaar Pumping Station; (iv) BK and Serampore Water Treatment Plants; and (v) truck terminal and traffic engineering schemes. Contracts for consultants' services would be let in accordance with IBRD/IDA's guidelines for use of consultants. F. Disbursement 4.16 Disbursement of the credit would be made against expenditures for civil works, vehicles, equipment, and technical assistance and training. -30- The credit would be disbursed as follows: (a) 70% of total expenditures for civil works procured through ICB; (b) 50% of total expenditures for other civil works; (c) 100% of foreign expenditures of directly imported plant, equipment, and vehicles, or 100% of local expenditures (ex factory) of locally manufactured goods procured through ICB, and 50% for other locally manufactured goods; and (d) 100% of total expenditures on consulting services, technical assistance and training. 4.17 Disbursements would be fully documented except for: (a) payments made under civil works contracts for one or more progress payments not exceeding Rs 300,000; and (b) payments for locally procured items of equipment costing Rs 150,000 or less. Such disbursements would be made against statement of expenditures (SOEs), the documentation for which would nct be submitted to IDA but retained and made available for inspection during the course of project review missions. Agreement was reached during negotiations that independent auditors acceptable to IDA will be retained to carry out an annual audit of all SOEs submitted in a fiscal year, and CMDA will be required to furnish the audit reports to IDA within nine months of the end of each fiscal year. 4.18 The "seed capital" of Rs 9 crores for Shelter and Area Development would be placed by GOWB in an account to be managed by SURAD, in two tranches of about Rs 5.00 crores and Rs 4 crores during FY83/84. CMDA will require these funds: (i to initiate its Area Development Program through a 'revolving fund approach'; and (ii) to undertake a number of prerequisite works in order to attract institutional finance estimated at Rs 32 crores. The fund would be replenished: (a) from surpluses generated through the program, projected to commence in the fifth year-FY87/88-and (b) from 50% of the net surpluses from the urban renewal schemes. From FY87/88 onwards, deposits and outright sale of institutional, industrial, and commercial land combined with the funds initially paid into the revolving fund less loan repayments, will be sufficient to meet the annual investment needs of the program. After GOWB has made deposits to the revolving fund, IDA would reimburse its share (50%). Agreement was reached during negotiations that GOWB would deposit the above amounts of Rs 5.00 crores and Rs 4.00 crores by September 30, 1983 and March 31, 1984, respectively to initiate its CMDA's Area Development Program. IDA would subsequently receive full documentation of eligible expenditures as per para 4.16(b) and para 4.17 to justify the payments made. 4.19 A schedule of disbursements of the IDA Credit is shown in Table 4.1. The region-wide sectoral disbursement profile for the Urban Sector indicates that disbursements would cover a six-year period. Performance under CUDP II was somewhat better than the region-wide average. Based upon these disbursement profiles, it is expected that this credit will be disbursed within six years. -31- Table 4.1: ESTIMATED DISBURSEMENT SCHEDULE IDA Quarterly Cumulative Fiscal Quarter Ending Disbursements Disbursements Year (US$'000) (US$'000) 1983 June 30, 1983 1984 September 30, 1983 - - December 31, 1983 4,900 4,900 March 31, 1984 3,500 8,400 June 30, 1984 4,400 12,800 1985 September 30, 1984 5,800 18,600 December 31, 1984 6,500 25,100 March 31, 1985 6,800 31,900 June 30, 1985 7,200 39,100 1986 September 30, 1985 6,300 45,400 December 31, 1985 7,600 53,000 March 31, 1986 9,700 62,700 June 30, 1986 10,100 72,800 1987 September 30, 1986 7,900 80,700 December 31, 1986 8,400 89,100 March 31, 1987 9,900 99,000 June 30, 1987 7,300 106,300 1988 September 30, 1987 7,300 113,600 December 31, 1987 8,100 121,700 March 31, 1988 7,400 129,100 June 30, 1988 5,900 135,000 1989 September 30, 1988 4,400 139,400 December 31, 1988 4,400 143,800 March 31, 1989 3,200 147,000 -32- G. ACCOUNTS,, AUDITS, AND REPORTING REQUIREMENTS 4.20 Comprehensive accrual accounting and management information systems for CMDA and CMC were designed and implemented during CUDP II. As the designated funding agency for CUDP III, CMDA is adequately equipped to apply these systems on a wider basis. CMDA will manage and account for all funds received from GOWB, plus its own market borrowings. It will release funds in installments to local bodies and implementing agencies and account for repayments to it on debt service obligations of those bodies. For the TRIP and CHIP schemes which it will itself implement, CMDA will undertake detailed project cost accounting. On completion, assets will be transferred to the operating agencies in accordance with proper asset accounting and transfer procedures agreed with IDA and already in place. 4.21 CMC, CMWSA, CIT, and HIT are also adequately equipped to account for their activities, both capital and operating. CMWSA will implement, as from June 30, 1983, an accrual accounting system especially designed for a water authority. 4.22 All municipalities will separately identify project-related transactions within their normal accounting and financial reporting systems. Where necessary, they will receive technical assistance through: (a) LGUDD through the transfer of qualified finance officers; (b) CMDA as part of implementation assistance; (c) accounting firms (see below); and (d) formal training programs run by the Institute of Local Government and Urban Studies (ILGUS). 4.23 As late as December 1979, IDA had not received any audited financial statements and audit reports of CMDA despite being a covenanted requirement under CUDP I and II. Starting in January 1980, CMDA has managed to bring its audits up to date and is now current under the provisions of CUDP II. IDA has now received audited financial statements and audit reports of CMDA from FY 72/73 through FY 81/82. CMDA has also submitted special audit certificates covering its expenditures under SOEs up to March 31, 1980. 4.24 CMC likewise was in arrears in audits since 1971/72. Under CUDP II it was required to submit its audited financial statements and audit reports, starting with FY77/78 within nine months of the end of each fiscal year. Commencing in June 1981, IDA has received CMCs audited financial statements and audit reports from FY 77/78 through FY 80/81. Prior audits have also been completed. The audit of its FY 81/82 accounts is expected to be provided before June 30, 1983. 4.25 During negotiations, GOWB agreed to the following audit arrangements under the aegis of the Comptroller and Auditor General of India: (a) CMDA's annual financial statements will continue to be audited by the commercial wing of the Accountant General (AG) of West Bengal. The AG will also audit CMDA's statements of expenditures submitted in lieu of documentation for some expenditures. (b) Calcutta Municipal Corporation - by independent commercial auditors as at present. -33- (c) CMWSA, CIT, HIT - by independent commercial auditors (for the latter two agencies project accounts only would be audited). (d) CMA Municipalities except Calcutta Municipal Corporation - by AG directly (or through the Examiner of Local Accounts). However, as financial management and accounting in the municipalities are are generally weak, accounting firms would be retained for at least three years to assist in posting the accounts and year-end closing. 4.26 During negotiations, agreement was reached that no later than nine months after the close of each fiscal year, CMDA, on behalf of the implementing agencies and local bodies will submit to IDA, the audited financial statements and auditors' reports together with an evaluation of the internal controls and financial management of the agencies/local bodies, accompanied by recommendations for improvements, if deemed necessary. 4.27 A comprehensive project monitoring and control system for CMDA was designed and implemented during CUDP II. Since FY79, IDA has been receiving timely quarterly progress reports from CMDA on CUDP II, as well as on their non-IDA financed investments. CMDA propose to computerize and extend this reporting system to all agencies and local bodies participating in CUDP III, thus moving towards a standard reporting and control system throughout the CMA for urban development. During negotiations, agreement was reached with CMDA that it will continue to receive quarterly progress reports promptly (within 60 days), after the end of each quarter, (starting on 11/30/83), on the physical and financial progress of the investment program. H. Operation and Maintenance 4.28 Appropriate levels of operation and maintenance and a proper pricing structure for urban services are priority objectives of GOWB in CUDP III. GOWB agrees that full cost recovery within the overall program, to the extent practical, is an essential element for replicability of the program, and also a prerequisite for proper operation and maintenance of both past and future investments. Therefore, CUDP III is emphasizing: (I) assessment of adequate levels of operations and maintenance expenditure; (ii) introduction of measures to recover full costs, specifically for water supply, shelter, transportation; and (Iii) measures for possible indirect and partial cost recovery for such programs as health, latrine conversion, sewerage, and solid waste. 4.29 Steps have been taken to implement measures which will ensure that the proposed levels of tariffs and taxes and related measures will generate sufficient funds to: (a) meet operations and maintenance costs, and (b) achieve capital cost recovery. Detailed financial implications are discussed in Chapter V. 4.30 There is also the need for improving physical maintenance standards. During negotiations, agreement was reached with GOWB and CMDA that a system of regular inspections of installations will be introduced. Inspections would occur at intervals of time appropriate to the importance of the installation; for major facilities, inspections would be made annually. Government agencies with a record of good 0 and M would be engaged to make -34- the inspections and their reports would be submitted to the appropriate authority which would reflect the recommendations of the report in its next budget. Copies of these reports would be made available to IDA. I. Monitoring and Evaluation 4.31 Under CUDP II, CMDA has been preparing and submitting regular monthly reports to CMDA management and quarterly reports to IDA, primarily focussed on physical and financial performance. The nature and thrust of the third program requires further strengthening of the monitoring and evaluation functions. Three separate levels of program monitoring are to be carried out: (a) a CMDA Program Management Unit (PMU) will focus on the physical and financial aspects of implementation, and when necessary, suggest administrative and organizational modifications and procedures to ensure timely completion and handover. The PMU will prepare monthly reports for management and quarterly reports for GOWB, GOI, and IDA. Detailed reporting formats suitable for computer application are currently under design by CMDA in con- sultation with the GOWB, Local Government and Urban Development Department (LGUDD), the Metropolitan Development Department and other implementing agencies. (b) The Appraisal, Monitoring, and Evaluation Unit (AMEU) will monitor performance on the programmatic goals and focus on the fiscal and socio-economic performance in terms of key indicators such as: the actual and estimated operation and maintenance costs; the actual and estimated service delivery norms; the actual and estimated revenue collection and direct cost recovery; the actual and estimated rise in incomes and employment generation. Program evaluation formats developed by the PMU and sector-specific indicators being formulated by AMEU will provide the basis for this performance monitoring which will be carried out continuously. Annual progress reports will be submitted directly to the Chief Executive Officer of CMDA and GOWB, and would also provide a basis for policy formulation for the sector and geographic focus of future investment programs. AMEU has been given an independent status and role within CMDA in its reorganization to ensure a degree of independent judgement. Agreement was reached during negotiations that CMDA will, at six month intervals furnish IDA with a progress summary of appraisals, field surveys, and other activities carried out by AMEU, and every twelve months (starting on 4/1/84), will furnish IDA with a copy of AMEU's annual report and recommendations. (c) The financial performance of the local bodies for the purpose of administering the Revised Grant Structure (para. 5.37-5.45) will be monitored by the Directorate of Local Bodies of LGUDD Agreement was reached during negotiations that GOWB will submit annually to IDA, a copy of the monitoring report to be prepared for the administration of the Revised Grant Structure. -35- J. Supervision and CMDA as Intermediary 4.32 At appraisal of CUDP II, it was estimated that IDA supervision would require 350 staff weeks over the project period. In practice, it is estimated that about 290 staff weeks will have been spent to completion. Supervision coefficients have been reduced from 98 staff weeks in FY79 to 31 weeks in FY82. For this project, about 120 staff weeks of IDA supervision would be required for the project implementation period. Half of this will be utilized over the first two years of project implementation, (i.e., 30 staff weeks per year) during which there is expected to be significant transition in the nature of the implementing institutions, and during which program monitoring and evaluation procedures will be refined. Staff time will be rapidly reduced thereafter. Bank staff inputs are to be concentrated on CMDA, which will play the key intermediary role. V. FINANCIAL ASPECTS A. Calcutta Metropolitan Development Authority (CMDA) 5.01 From the financial point of view, CNDA is a hybrid institution, being neither financially autonomous, nor, strictly speaking, a State Government Department. CMDA does not have financial autonomy because, apart from receipts from octroi allocated to it, it has no other source of revenue. The development funds it receives are either passed on to implementing agencies, or used by CMDA to create assets which are turned over on completion to local bodies or operating agencies. Terms and conditions of funds it receives and passes on to other agencies are set largely by GOWB. 5.02 Projected buoyant octroi receipts will ensure that CMDA will remain a financially sound institution. Net surpluses from 1986/87 will give it a healthier equity base. This should facilitate its ability to raise funds on the commercial markets for commercial schemes such as urban renewal and shelter and area development. Since inception, CMDA has not handed over any completed assets to the respective local bodies or operating agencies. During negotiations, agreement was reached that for all assets completed up to March 1982, CMDA would transfer these to the operating agencies by April 1, 1984. By September 30, 1984, and each year thereafter, CMDA would prepare a list of completed assets to be transferred on each April 1 of the following year. GOWB would ensure that adequate provision was made by the operating agencies for O&M and debt service (see para 3.07 and Table 3.3(a) and (b)). The actual and projected financial statements, which are given in Annex 5, Tables 1 and 2, take into account this phased program of transfer of completed assets. Following up on the recommendations made by the Municipal Finance Commission, in March 1982, GOWB has decided to write off its past loans to CMDA except (i) loans for urban renewal (e.g., the Howrah Fish and Pan Market); (ii) loans made for Transmunicipal Water Supply Projects between April 1, 1981 and March 31, 1983; and (iii) on-site investments under Area Development projects. -36- 5.03 CMDA derives its financial resources from: (a) GOI loans and grants (through GOWB);1/ (b) GOWB loans and grants;l/ (c) market borrowings (public sector);2/ (d) share of octroi receipts collected in CMA by GOWB; (e) charges for services; (f) capital recoveries for assets transferred to local bodies/operating agencies; and (g) short term "bridging" loans. 5.04 CMDA is permitted to issue bonds which are bought by the public sector and nationalized banks. In 1981/82 it borrowed Rs 12.10 crores for 15 years at 7%. Future borrowings will rise at about 10% a year, at interest rates which increase at 1/4% each year. Repayment of its bond issues are through a Sinking Fund, which CMDA is required to maintain under the Town and Country (Planning and Development) Act 1979. 5.05 CMDA receives annually 50% of collections on the 1972 Act relating to taxes on entry of goods into the CMA (i.e., octroi). In 1981/82, it received Rs 20.25 crores. Receipts from this source are projected to rise by at least 15% a year through the project period. Octroi funds are used primarily to service CMDA's debts. 5.06 The project's capital expenditures are scheduled to begin with about Rs 50 crores for the first year. This will rise to about Rs 70 crores in the final year. During the first three years of the program CMDA will also complete the spillover projects from its previous programs, expending approximately Rs 15 crores, Rs 15 crores, and Rs 12 crores respectively. Based on the financing plan, the implementation capacity of CMDA and that of other implementing agencies and local bodies, the investment program is realistic. B. Calcutta Municipal Corporation (CMC) 5.07 The financial statements for CMC, which are given in Annex 5, Tables 3 and 4, show that in 1982/83 CMC expects to generate internally about Rs 27 crores, or 53% of its revenue expenditures. GOWB subventions are estimated to amount to about Rs 12 crores, or 24% of revenue expenditures. Octroi receipts of about Rs 11 crores, or 21% of revenue expenditures and grants for bustee services, Rs 1 crore, make up the balance of total receipts. An operation and maintenance liability for projects created by CMDA under CUDP I and II amounting to Rs 9 crores a year has already been phased into the actual and projected expenditures, although formal transfer will commence only in 1984/85 (see para 5.02). The debt service on these past projects I/ See para 3.05 and Table 3.3(a) for typical terms and conditions. 2/ Under Section 108 of the Town and Country (Planning and Development) Act, 1979, CMDA is also permitted to borrow from the commercial markets. -37- which would amount to Rs 8 crores a year, has been written off by GOWB as CMC is clearly not in a position to take on this obligation. 5.08 Under CUDP III, CMC has been allocated Rs 11 crores for ward schemes under MDP. The average annual incremental 0 and M and interest costs over the project period are estimated at Rs 1.20 crores. Commencing 1988/89, 0 and M and debt service (principal and interest) would amount to approximately Rs 2 crores a year. Under CHIP, CMC would be responsible for servicing approximately Rs 27.80 crores of investments; water supply (Rs 8.50 crores), sanitation (Rs 14.30 crores), and solid waste (Rs 5 crores). The incremental operating costs are likely to be nominal as the investments are esentially improvements to existing facilities, or replacement. The estimated annual debt service during the project period would be limited to interest payments only and amount to an average annual cost of Rs 1.20 crores. Debt service (including principal) and 0 & M costs from 1988/89 onwards would amount to approximately Rs 4 crores annually. 5.09 The above points to a need for CMC to improve significantly its financial situation. Legislation and management systems (see para 1.19(c)). are now in place and key vacant staff positions have been filled as of April, 1983. The focus of improving CMC's finances can therefore be shifted to action plans to achieve specific revenue increases/expenditure. 5.10 The overall objective is to reduce the required GOWB subventions from an estimated Rs 12 crores in 1982/83 (24% of revenue expenditures) to about Rs 8 crores (10% of revenue expenditures) in 1987/88 at the end of the project period. Assurances were obtained at negotiations that CMC will achieve the above target, which will become a covenant to the legal agreements. Revenues 5.11 The major source of CMC's 'own source' revenue is the consolidated property tax which accounts for about 70% of such revenue. In 1981/82 it accounted for about 37% of CMC's total receipts. Assessment of properties is based on the annual rental value. However, these rental values are legally linked to the West Bengal Premises Tenancy Act, 1956 which provides for rent control. Hence, this tax is highly inelastic. In addition, properties are valued within various valuation ranges. There is always pressure therefore, for revaluations to remain within the same ranges. The result is that a major portion of the properties are assessed at under Rs 3000 annual rental value, having a tax rate of not more than 18%. 5.12 Total assessments in 1981/82 of the approximately 140,000 properties on the valuation roll was Rs 15.90 crores, representing 25% of the total ratable valuation of Rs 63.70 crores. Total ratable valuation had risen 50% during the previous five years, or at an average annual rate of 8.5%. This covers both new properties and (limited) reassessment. The valuation roll is not complete and an indeterminable number of properties of all types have never been assessed. 5.13 The percentage of collection of current demand has declined from a high of 78% in 1960/61 to a low of 47% in 1974/75. Table 5.1 below indicates an upward trend since 1974/75. Arrears collection has been rising at an -38- annual average rate of nearly 13% over the past five years. The aggregate of current and arrears collection over the past five years has increased at an average annual rate of 7%. A discernable improvement took place between FY 80/81 and FY81/82 when total collections increased by over 16%. Table 5.1: DEMAND AND COLLECTION OF CONSOLIDATED RATE (CMC) (Rs lakhs) Current Col 2 as Arrears Col 5 as Year Demand Collection % of Col 1 Demand Collection % of Col 4 1 2 3 4 5 1960/61 452.02 353.10 78.12 366.33 84.10 22.96 1970/71 860.07 549.80 63.93 1266.43 124.51 9.83 1974/75 1175.00 546.68 46.53 951.00 369.01 38.80 1980/81 1532.00 671.65 43.84 1661.00 673.35 40.50 1981/82 1590.00 925.42 58.00 1705.00 872.58 51.20 5.14 A recently completed exhaustive consultants' study of property tax receivables as at March 31, 1980, estimates that there are Rs 23.71 crores of "good debts" (both current and arrear). CMC has agreed to complete an analysis and write-off of the bad debts identified by the consultants, and to reflect in its FY1982/83 accounts, collectible receivables, less a provision for bad and doubtful debts. If a major portion of these debts could be collected, combined with a growth in the tax base, updating of the valuation roll, and improved collection performance, the financial state of CMC would become satisfactory. 5.15 Two pieces of recently enacted legislation could have a positive impact on property taxes. (i) The Central Valuation Board Act 1978 (para 1.21(c)) provides for the Board to assume responsibility for valuation of all properties in the State, and maintain the valuation roll. The recently created Board is acting initially in an advisory capacity to local bodies, assisting in drawing up proper terms of reference for assessors, and lending support in collection efforts. (ii) The new Calcutta Municipal Corporation Act 1980 provides for a straight line system of assessment between the lowest and highest rates in place of the "slab" system. 1/ Under the straight line system also, the lowest rate has been reduced from 15% to 11%; the highest rate increased from 33% to 40%. The Act provides also for the levy of a surcharge of up to 50% of the consolidated rate on commercial or non-residential land or buildings. Estimates of up to a 30% increase in total assessments have been forecast should the property tax provisions of the Act be implemented as currently expected. 5.16 The other major source of CMC's revenue is octrol, a tax on goods entering the CMA, of which CMC's share is 25%. In 1981/82 it received Rs 10.12 crores, or 21% of its total revenue receipts. This source is projected to increase by at least 15% a year over the project period. Service charges 1/ The municipalities and Howrah Municipal Corporation would continue with the "slab" system as provided for under the Bengal Municipal (Amendment) Act 1980, and the Howrah Municipal Corporation Act 1980 respectively. -39- on property, taxes and fees on trades and professions, licenses, water supply, solid waste, etc. of Rs 7.80 crores (16%), and GOWB's grants and subventions of Rs 12.96 crores (26%) made up the balance of CMC's total receipts in 1981/82. 5.17 Clearly there is great scope for improvements in CMC's finances, especially its major source of revenue, the property tax. GOWE has agreed to depute suitably qualified staff for up to one year to assist CMC in the initial phase of an action plan aimed to achieve the following: (a) improve assessments of properties (working closely with CVB); (b) update the valuation roll; (c) improve collection performance; and (d) collect on the additional sources of revenue, hitherto largely untapped, under the existing CMC Act, and on all sources of revenue available under the new Act, once it comes into force (see paras 1.20(d) and 1.21(a)). 5.18 The projected receipts, as given in Annex 5, Table 4, would be achieved through the following targets: (a) The total rateable value of properties would increase from Rs 63.70 crores in 1981/82 to about Rs 103 crores in 1986/87, a 61% increase, 1/ or 10% a year. This would be achieved through improved valuation (with participation of the CVB, if necessary) and updating of valuation roll. Correspondingly, the total assessed value, which has been conservatively assumed to remain at 25% of the total rateable value, would increase from Rs 15.90 crores in 1981/82 to about Rs 26 crores in 1986/87, also 10% a year. (b) The percentage of collection of current demand of property tax would rise from 60% in 1982/83 to 85% in 1987/88. CMC would collect about 65% In 1983/84, rising by 5 percentage points a year to achieve 85% in 1987/88. (c) The percentage of collection of arrears demand of property tax would be maintained at the 1981/82 level of 50%. 5.19 Agreement was reached at negotiations that CMC will achieve the above targets, which will become covenants to the legal agreements. 1/ The preceding five-year increase was 50%, or about 8.5% a year. -40- Expenditures 5.20 The three major items of revenue (recurrent) expenditure are water supply, solid waste, and administrative and support services, each accounting for about 20% of CMC's total revenue expenditures. A study now underway on the reorganization of the engineering departments of CMC is expected to lead to improved productivity and cost savings in the delivery of civic services. For some time it has been felt that too much manpower is still being used for the operation of systems where technological changes have been incorporated into recently completed investments. This occurs, for example at those water treatment plants where valves etc. are electrically operated in contrast to the manned operation of older plants. CMC also plans to study routing and collection systems under the solid waste component of this project. 5.21 Revenue expenditures for water supply, solid waste, and administrative and support services are projected to rise at about an average annual rate of 5%, 10%, and 10% respectively. These rates correspond to past increases. Debt service would be limited to interest payments during the project period; the amortization of principal on CUDP III debt will begin in 1988/89. 5.22 The combined effect of achieving the targets set out in para 5.18 will be an increase in CMC's internally generated income over the project period by about 14% a year. Octroi receipts are projected to increase at 15% a year over the project period (see para 5.16). Total revenue expenditures are projected to increase at an average annual rate of 10%. The net result would be a reduction in GOWB's revenue grants and subventions to CMC from about Rs 12 crores or 24% of CMC's total revenue expenditures in 1982/83 to Rs 8 crores, or about 10% of total revenue expenditures in 1987/88. The above performance targets for CMC are incorporated into the Revised Grant Structure (para 5.36-5.44) together with targets for all CMA municipalities, and will be closely monitored by GOWB. Financial Management 5.23 To ensure that CMC begins to operate on a financially viable basis, confirmation was received during negotiations that CMC has already set up a Vehicles Replacement Fund, and will deposit annually to that Fund amounts sufficient to replace vehicles, plant, and equipment that it purchases from FY82/83 onwards. IDA also received confirmation that CMC set up a Sinking Fund for all its long-term debt. C. Cost Recovery Measures 5.24 Performance on cost recovery under CUDP I and II has been poor. CMC has not recovered its covenanted percentages of costs for providing water on account of poor financial management. The sites and services program has not yet advanced to the point of testing cost recovery. 5.25 In view of the large investments already made under CUDP I and II and the proposed investments under CUDP III, the ability of the local bodies to generate adequate funds for proper operations and maintenance is a primary determining factor in committing further investments, as illustrated above in the case of CMC. GOWB has agreed to implement various measures to enhance cost recovery at the municipal level to the extent possible, through both enhanced property tax revenues and direct user charges. In the past there -41- has been little or no effort to achieve full cost recovery, either direct or indirect. Despite the introduction of the cost recovery measures discussed below, it is unlikely that in the short term full cost recovery on a sector by sector basis can be achieved. The local bodies and the implementing agencies will continue to "sell" their services at below cost and the ensuing deficits, albeit smaller than before will be met by transfer of resources from GOWB through a revised system of grants and shared taxes (see Chapter V, paras 5.37-5.45). Property Taxes 5.26 Property taxes continue to be the largest source of internal revenue of the local bodies. In recent years, actual property taxes collected accounted for about 70% of internal revenues (excluding State Government transfers), or about 45% of total revenues (including State Government transfers) for all CMA local bodies. This significant source of revenue is still plagued with problems like: (a) low assessment base, (b) inefficient rate structure, and (c) poor collection performance. These problems exist not only in CMC but all other local bodies in CMA. Under the project, emphasis is being placed to maximize revenues from this source. This is being done through: (a) the CMC Act which specifically applies to the CMC, as discussed in detail in paras 5.11-5.19 before; (b) the HMC Act; (c) the Bengal Municipal Act of 1932, which as amended in 1980, addresses financial improvement measures in all other CMA municipalities; and (d) the introduction of a Revised Grant Structure for the CMA municipalities, CMC and HMC where specific property tax assessment and collection percentage improvements are being addressed (see paras 5.37 through 5.45). Under the Bengal Municipal Act all local bodies (except CMC) in the State will have revised their property tax assessment base by April 1, 1983. GOWB, will by December 31, 1983 determine whether the municipalities' assessments are adequate and realistic. In case the assessments are found to be low, GOWB will cause the CVB to carry out a general revaluation in those local bodies whose tax base was found to be inadequate. The structure of the tax rates have also been changed to reflect increased assessment rates for varying slabs of valuation. In addition, the CVB will assist all CMA municipalities on an ongoing basis in (a) updating their property tax roll and (b) improving collection performance. While the potential financial impact of the above two measures is not yet determinable for the CMA municipalities, these actions, for the first time, reflect a consistent approach towards improving property tax revenues of CMA municipalities. One immediate improvement has been that through CVB's assistance, actual collections in various municipalities have gone up on an average of about 16% and the increase has ranged between 3% to as much as 170% in certain cases. Agreement was reached at negotiations, that the CVB will carry out a general revaluation of properties in the local bodies where GOWB has determined that the assessment is low. Direct User Charges 5.27 Direct cost recovery measures have been agreed to for those sectors where direct pricing is possible. These sectors include: (a) Water Supply; (b) Area Development; and (c) Urban Renewal. In the light of the extensive investments in this subsector over the past decade, and significant improvements in service delivery, it was agreed during negotiations, that the -42- increase in rates for metered non-domestic users, by the CMC in accordance with para 5.28(a); and the introduction of new charges by the CMWSA in accordance with para 5.29(a) be made conditions of credit effectiveness. (a) Water Supply Calcutta Municipal Corporation 5.28 While overall finances of the CMC is discussed in Chapter V, Part B, specific measures are being adopted to improve cost recovery for water supply. Expenditure for water supply represents a significant portion of the CMC's total revenue expenditures, currently amounting to about 20%. Moreover, water supply operations provide an opportunity for cost recovery through direct measures and can thereby contribute towards the CMC's overall financial improvements. The CMC, over and above their own production of water, is augmenting its supply through purchase of bulk water from the CMWSA. The strategy for cost recovery aims at recovering all expenditures for operations, maintenance, purchase of bulk water and charges for a reserve fund equivalent to depreciation by 1987/88. In the interim, for its water supply operations, CMC will generate revenues at not less than the following percentages of its revenue exenditure for the water supply operations: 1983/84-48%; 1984/85-63%; 1985-86-69%; 1986/87-87% (see Table 5, Annex 5). Agreement to this effect was obtained during negotiations. GOWB decided to write off all past loans for water supply investments (see para 5.07). Therefore, as such, there is no debt service obligation for water supply for the CMC for past investments. In addition, under CUDP III, there are no major water supply capital works for which the CMC will be responsible for debt servicing. Therefore, to incorporate proper financial diciplines in cost recovery measures, an amount equivalent to debt service principal and interest, which closely approximates depreciation, had the debts not been written off, have been included. Annex 5, Table 5 indicates the sources and uses of funds. To achieve the overall target by 1987/88, a number of specific actions to improve operational, institutional, and financial performance have been agreed. The principal ones are: (a) Tariffs: (i) As a condition of credit effectiveness, CMC will increase the rates for metered non-domestic users from the current rate of Rs 5 per 1,000 gallons to Rs 11 per 1,000 gallons; and (ii) CMC will introduce a graduated rate for domestic unmetered consumers based on ferrule size, estimated to be not later than November 1, 1983. (b) Licensing of tubewells for extraction of groundwater: 1/ CMC will introduce annual licencing for all new private tubewells. The licence will be renewed annually. Implementation of this is pending full implementation of the CMC Act of 1980 and is expected 1/ The primary objective for licensing its regulatory control of groundwater usage. -43- not to be later than October 1, 1983. Assurances were obtained at negotiations that CMC will introduce this by November 1, 1983. (c) Metering and Consumer Survey Program: CMC has agreed to undertake a time-bound metering program for all Industrial, Commercial and Institutional (ICI) users, and also to introduce production meters and zonal meters. CMC will carry out the work with the assistance of private contractors. Simultaneously, CMC has already commenced a survey of all its ICI users and work is continuing. CMC has agreed to complete the survey in two sections of the city by June 30, 1983 and will complete the survey of the entire city by March 31, 1984. The objective of the simultaneous survey and metering program for ICI users is to meter all above average users as a matter of priority. Annex 5, Table 6 indicates detailed time- table for the metering and consumer survey program. (d) Management of metered users: Since the number of metered ICI users is expected to increase significantly during the next few years (currently CMC has only 131 metered ICI connections), a proper meter reading, billing, collection, and repair program will become important to ensure proper cash flow. CMC has agreed to appoint a Special Officer to be in charge of the metering and survey pro- gram and to form a fully operational meter repair department prior to negotiations. The accounting and finance department will also install a meter reading, billing, and customer service data pro- cessing department prior to negotiations. Agreements were obtained at negotiations that CMC will adhere to the agreed timetable and target for metering and consumer survey program as indicated in Annex 5, Table 6. Calcutta Metropolitan Water and Sanitation Authority (CMWSA) 5.29 CMWSA will operate primarily as a bulk supplier to the municipalities (initially to four or five municipalities during the project period) and to CMC. However, those major ICI consumers which can be serviced directly from CMWSA's primary distribution system will become retail customers of CMWSA. Since CMWSA will own and operate the major production and transmission facilities, it is important that it has adequate cost recovery to operate and maintain these large investments and to service its debts. CMWSA's sources and uses of funds are indicated in Annex 5, Table7. Agreements were obtained at negotiations that CMWSA will cover all expenditures for operations, maintenance, and contributions to a replacement fund requirement from 1985/86 onwards. In the interim, CMWSA will generate revenues at not less than the following percentages of its revenue expenditures: 1983/84-75% and 1984/85-95%. At present, CMWSA's financial position is weak. This is primarily due to the fact that CMWSA is yet to realize any signiificant revenues through sale of water from its major treatment plant, while it is carrying high administrative and overhead costs. This is basically a start-up situation. Once CMWSA begins to sell water from mid-1983, it should be able to meet the above financial targets. Among the principal actions required to achieve this objective are the following: (a) Direct Charges. As a condition of credit effectiveness, CMWSA will introduce the following bulk supply rates; Rs 1.25 per -44- 1,000 gallons and Rs 3.00 per 1,000 gallons for the municipalities and CMC respectively. The bulk rate for CMC is higher than the municipalities because (i) Rs 3.00 per 1000 gallons approximates CMC's own water production costs and (ii) CMC has more ICI users than in the municipalities, from whom CMC can recover more revenues. ICI rates have been fixed at Rs 10 per 1,000 gallons for industrial consumers and Rs 6 per 1,000 gallons for commercial and institutional consumers. These rates will be revised periodi- cally to ensure that CMWSA achieve coverage of all expenditures towards operations, maintenance and debt service by 1985/86. (b) Guarantee of Payment for Bulk Supply. Since most of CMWSA revenues will come from its bulk supply to the municipalities and CMC, it has been agreed that in the event that any CMWSA bulk water bill remains unpaid for more than 30 days, GOWB will ensure that such amounts are paid to CMWSA. Agreement to this effect was obtained during negotiations. (c) Working Capital Requirements. GOWB will need a working capital loan of Rs 90 lakhs from GOWB. The first tranche of Rs 30 lakhs will have been paid by GOWB by April 30, 1983. Assurances were obtained at negotiations that the remaining two tranches of Rs 30 lakhs each, will be paid by March 31, 1984. (b) Shelter and Area Development 5.30 Cost recovery measures in shelter and area development include the following steps. (a) Pricing for area development has been based on the principle of full cost recovery plus the need to generate additional surpluses to replicate and expand a shelter program. Actual cost of land and on-site infrastructure is first calculated for each category. Then, 'affordable' prices are calculated for the EWS and LIG categories. The total cross subsidies thus required by EWS and LIG categories (actual unit development costs minus affordable unit cost price times total area) are added to the actual development costs of all other categories on a prorata basis (based on area). This is labled as the "floor price" and is expressed as Rs/m2 for each class of plots (except EWS and LIG for which the sales prices are equal to affordable prices). (b) Having thus arrived at "floor prices" to reflect a break-even cost recovery position, a premium is charged on the floor prices to all categories except EWS and LIG to arrive at the actual sales price for all other categories of plots. These premium percentages vary from 10% above floor price for MIG-I (Middle Income Group) category to 75% above floor price for commercial plots. The premium percentages will reflect realistic market prices at which these categories of plots can be sold. -45- 5.31 The above mechanism will not only achieve full cost recovery for area development schemes but will generate a net surplus. Based on preliminary estimates of selected sites, the amount of net surplus would range between 6-8% of capital investments, depending on the mix of plots. 5.32 The principles for pricing Area Development schemes have been agreed with OMDA. The calculation for their 'floor price' will include the following: land acquisition costs, land filling, on-site infrastructure, including sanitary core and sewer connections, plot demarcation charges, design and supervision, and interest during construction. Prices of residential plots would reflect differences in plot size, infrastructure levels, on-plot development and location, as well as a degree of cross-subsidy. EWS plots would be priced at less than average square meter cost. Plots would be sold with 99-year leasehold titles. 5.33 The terms and conditions of lease and mortgage would have to be acceptable to IDA and would include: (i) for residential plots designated for EWS and LIG I/ households, payment by beneficiaries of a 10-30% down payment on the price of the plot, with the balance of plot price to be repaid at not less than 12% per annum interest over 20 years. Settler selection criteria would be satisfactory to IDA and would be based primarily on income, in order to ensure that various plot size and design alternatives are reserved for intended income groups. 5.34 Agreement was obtained during negotiations that CMDA will submit for IDA review and approval not later than September 30, 1983, a draft copy of SURAD's administrative and operational and financial guidelines for implementing the Shelter and Area Development Program; and these will incorporate costing and pricing formula, the criteria for beneficiary selection, conditions of lease and terms and conditions of loans for the sites and services beneficiaries as noted above. The guidelines will also include CMDA's recommendations for a levy on plotholders, by way of monthly maintenance charges on a sliding scale which will help defray part of the maintenance costs of infrastructure until property tax payment begins. CMDA will draw up the guidelines in consultation with participating financial institutions. (c) Urban Renewal 5.35 The cost recovery policy adopted for investments in all urban renewal schemes is to auction 'development rights'. Financial analysis procedures for evaluating urban renewal schemes to determine the minimum value of development rights reflecting a rate of return not less than commercial cost of capital, have been agreed with CMDA, CIT, and HIT. CIT and HIT, the agencies primarily responsible for executing urban renewal schemes, will invest in providing minimum infrastructure facilities and then auction the rights for further development to private developers based on a minimum reserve price set to recover all costs. The exact magnitude of surpluses cannot be determined at this stage, but will vary from scheme to scheme. However, 50% of all net surpluses so generated (half of the total auction 1/ Households with monthly incomes in the range of Rs 350-600. -46- price minus all costs of development) will be retained by the agencies concerned and reinvested and 50% will be contributed to CMDA towards investments in shelter and area development schemes for EWS and LIG income groups. The financial impact of urban renewal on property tax in CMC and HMC is estimated to be significant. Agreement was obtained at negotiations, that: (i) CMDA will submit for IDA review, draft administrative, operational and financial guidelines, incorporating the above terms and conditions; (ii) CMDA will submit for prior IDA review, an appraisal of each urban renewal scheme, and only schemes yielding a financial rate of return in excess of the prevailing commercial cost of capital (bank rate) will be implemented; and (iii) CMDA will submit for IDA review and approval a pricing and cost recovery analysis for each urban renewal scheme prior to the announcing the auction of development rights. (d) Health 5.36 GOWB has hitherto had no formal policy on recovery of costs in its integrated health services. Under CUDP III, GOWB has agreed to introduce on an experimental basis, charges for some services. These charges are set at a level which would not under any circumstances inhibit the target group from seeking medical attention. The extent of cost recovery, albeit limited in its scope, will represent recovery of approximately 22% of the total recurrent costs of the program over five years. The elements of direct charges include introduction of registration fees, medical history card renewal fees, nominal charge for nutrient food packets and polyclinic visits. D. Structural Adjustment of Municipal Finance General 5.37 In addition to property tax improvements and the specific sectoral measures referred to above to ensure adequate cost recovery for proper operations and maintenance and debt servicing, GOWB is also taking steps to introduce overall fiscal discipline for local government, both in the CMA and in the rest of the State. GOWB's Municipal Finance Commission's (MFC) Report of March 1982 addresses some issues. The major conclusions of the report are: (a) the existing revenue base of the local bodies (37 municipalities and the CMC and the HMC) in CMA is not adequate to cover their recurrent expenditures (including operations and maintenance costs), which have had to be covered by budgetary support from GOWB. (b) the magnitude of the above shortfall amount to about Rs 34 crores (51% of total revenue expenditure) in 1982/83, increas- ing to about Rs 39 crores (47% of total revenue expenditure) in 1985/86 for all CMA local bodies. These shortfalls do not include the incremental increases in recurrent expenditures due to proposed investments under CUDP III, estimated to be about Rs 15-18 crores annually upon completion. (c) to sustain the past investments and to justify the future investments, the burden of this resource gap on the State -47- Government's budgetary resources need to be gradually reduced through: (i) improved internal revenue generation of local bodies; (ii) implementation of an incentive-oriented system of devolution of grants and shared taxes from the state treasury. 5.38 While improvements in internal revenue generation are being addressed through improved cost recovery measures, as discussed above, it is unlikely that the total recurrent expenditures of the local bodies for both the existing and proposed investments will be met for the near future from the internal revenues alone. Therefore, there will be need for continuing transfer of resources from the State Government in the form of grants and shared taxes. 5.39 However, in order to insure most effective utilization of already limited State Government resources, and to introduce a structural shift in municipal finance towards more reliance on self-generated revenues, GOWB will implement a Revised Grant Structure (RGS) effective April 1, 1983 to coincide with the beginning of CUDP III and the GOWB's fiscal year. The basic characteristic of RGS is a deficit grant system based on absolute levels of performance of local bodies, linked with both a disincentive and an incentive mechanism. Initially, the RGS will be implemented only in the CMC, HMC, and the CMA municipalities. However, the system can subsequently be applied throughout the State, based on the lessons and experiences of this initial application. Structure of RGS 5.40 Based on the financial data available from the MFC report, the likely financial performance under a set of realistic performance targets have been initially estimated by LGUDD in consultation with each local body for the next five year. On the revenue side, realistic performance targets have been set primarily relating to property tax administration. These targets include: (i) rateable value; (ii) assessment; (iii) minimum collection percentages for both current and arrears demands. These targets are based on realistic estimates and are not uniform for all local bodies. They relate to the current level of tax base and collection efficiency on an individual basis and assume improvements over time specific to each municipality. In addition, statutory receipts from share of octroi taxes have been projected and included as a source of local body revenue for each individual local body. On the expenditure side, levels of current expenditure likely to be incurred have been initially projected for each individual local body. These expenditures include likely operations and maintenance costs for both existing assets and proposed investments, incremental levels of salary expenditure, debt servicing requirements and other expenditures. Examples of both revenue and expenditure estimates for a sample of local bodies are indicated in Annex 5 Tables 8, 9, 10. 5.41 While the revenue and expenditure projections are estimated initially for five years, in practice these will be annually updated (rolling yearly targets) based on actual performance data. The deficit thus estimated for an individual local body reflects a level based on a realistic set of performance targets. The aggregate of all these deficits, for all local bodies, thus indicate the total level of grant support that will be required from the state government. -48- 5.42 The actual operating performance of the local bodies will fall into three categories: (a) those with revenue deficit equal to or less than the targets; (b) those with revenue deficit more than the targets; and (c) those with revenue surpluses. Through the RGS, GOWB will meet the revenue deficit of both categories (a) and (b) above annually. However, the following steps will be taken to link revenue performance with the annual capital investment program for each local body. Under CUDP III, annual capital investment program for each of the five years of implementation, has been based on an appraisal of the current and projected capacity of an individual local body to execute such a program and its ability to operate and maintain these investments within the realistic limits of revenue deficits as noted above. For the first year of implementation, each local body will be allocated capital funds based on the above appraisal. However, beginning the second year of implementation and each year thereafter, there will be a direct linkage between the annual capital program of a given year with the revenue performance of the preceding year. For those local bodies who continue to operate at annual revenue deficits which are either equal to or less than annually revised targets, there will be no change in the original capital program as originally determined. Those local bodies who exceed the annually revised revenue deficit targets receive a reduced proportion of capital investment for the following fiscal year. The reduced capital investment will be the appraised estimate of capital investments reduced by a percentage equal to half of the percentage increase in actual revenue deficit over the target. This reduction will thus reflect the level of capital investment that can be reasonably operated and maintained by actual levels of revenues of each local body. The local bodies which generate revenue surpluses, thus not requiring any revenue grant, will as an incentive, receive additional matching capital grant, equal to the revenue surplus, in addition to the normal CUDP III capital allocation. However, capital works to be financed through this matching grant will be subject to appraisal and approval by CMDA. This additional capital works will reflect the ability of a local body to operate and maintain more assets. Finance of RGS 5.43 A "Fund Assigned to Municipalities" (FAM) has been set up by GOWB. FAM will have two separate accounts: (1) FAM (Revenue Account) and (2) FAM (Capital Account). The FAM (Revenue Account) will be funded by COWB's State budget allocation of Motor Vehicles Tax and Subvention Grants. The FAM (Capital Account) will be funded by the State Amusement Tax. FAM (Revenue Account) will be used only to meet the local bodies annual revenue deficits and will be paid on a periodic basis. FAM (Capital Account) will be used to provide matching capital grants. Undisbursed monies for FAM (Capital Account) will be carried over to successive fiscal years. A significant aspect of this financing formula is the fact that "subvention grants" will no longer be devolved automatically based on staff strength. In recent years, subvention grants have totalled about Rs 10 crores per year compared to a total revenue grant of about Rs 40 crores per year to all CMA municipalities. By pooling subvention grants in the FAM (Revenue Account), the devolution of these funds will now be through FAM Revenue Account based on the fact that the local bodies will have to operate under a realistic set of revenue performance targets. -49- Administration of RGS 5.44 FAM and both its sub-accounts has been set up by GOWB and will be administered by the Directorate of Local Bodies (DLB) of LGUDD and CMDA. Necessary data required to monitor and evaluate performance of each local body against original targets and annual updating of targets will be done by the DLB. LGUDD will make available to CMDA the results of its annual analysis, so that CMDA can allocate following years funds for capital works based on the results of this analysis. 5.45 LGUDD is now in the process of estimating the performance targets, revenue deficits, revenue grant, and capital grant requirements for each of the 37 municipalities, CMC and HMC for each year from 1982/83 through 1989/90. At negotiations, agreements were obtained that: (a) LGUDD will annually update the performance targets, revenue deficits, annual revenue grant and capital grant requirements for each of the 37 municipalities, CMC and HMC for implementing the RGS on the principles as discussed herein; (b) GOWB will fund the FAM Revenue and Capital Accounts based on these rolling yearly estimates; and (c) CMDA will allocate capital resources in accordance with the recommendations of LGUDD. E. Affordability and Replicability 5.46 The project takes a comprehensive view of affordability and replicability. The investments have been designed within acceptable design standards and at agreed minimum levels of service, that can be realistically affordable within the available resource base. The emphasis on operation and maintenance has been matched with policies relating to on-lending terms, cost recovery, pricing of services, agreed principles for internal cross-subsidies, and other fiscal improvements such as the Revised Grant Structure. This will ensure that the programs are affordable and replicable. The calculation of tariff charges for water supply as described before, with the inherent cross-subsidies between non-domestic and domestic users illustrates this principle. In area development, affordability of plots by a wide range of income groups is a prime consideration. Monthly installment payments under the area development program have been compared with market payments for equivalent plots in other parts of the CMA. For the economically weaker (Rs 150-350 per month per household) and lower income (Rs 351-600 per month per household) groups, monthly installments under CUDP III are estimated to amount to 15% of monthly income, leaving them adequate individual resources to complete the superstructures. 5.47 The modest charges proposed under the health program (annual family registration fee of Rs 1 per family per year and Rs 0.25/visit to a clinic), have been checked by a sample survey of some 2,000 potential beneficiaries. The response indicated a significant willingness to pay this nominal amount for the range and quality of health services being offered. 5.48 The process that has been set in motion, coupled with the training program, is initially being focused on the CMA but is replicable for other local bodies throughout the State. -50- VI. PROJECT JUSTIFICATION A. Summary 6.01 Different methods were used to assess the benefits of several of the principal components of the project, reflecting the varying availability of data. In the case of bustee improvements, rental market information was used to determine the difference in rental value between existing residential and commercial structures and the estimated market/rental value of these structures after upgrading, yielding an economic rate of return (ERR) of about 15%. To estimate the ERR for area development (sites and services) survey data on rental values and sale prices for developed land and buildings of similar standards in similar locations was used, which yielded an ERR of about 13%. An ERR of 24% was estimated for road improvements, based on reduced vehicle and road maintenance costs and time savings. An ERR of 18% was very tentatively estimated for municipal drainage improvements based on reduced maintenance cost and flood loss, using data on flood impacts collected by CMDA during the 1970s in order to better assess priorities and design standards in this sector. 6.02 Due to the limited use of volumetric water tariffs in the CMA at this stage, no ERR for water supply investments could be determined on the basis of the standard methodology which estimates benefits using existing tariffs as an indicator of consumers' minimum willingness to pay for services. CMDA has attempted to use an alternative methodology, basing benefit estimates on: (a) payments by domestic consumers to private water vendors and (b) savings in ground water extraction costs to industrial and commercial consumers. This methodology yields an ERR of about 17% for the water supply investments, under the conservative assumption that water consumption would not increase beyond what is currently bought from private vendors and produced by private ICI tubewells. Still another set of estimates have been prepared with benefit estimates based on the water tariffs which will shortly be introduced (Chapter V, para 5.28(a) and 5.29(a)). These tariffs, which are comparable to tariffs currently in force in other major Indian cities, yield an overall ERR of about 8% for water supply investments. 6.03 The ERRs outlined above average about 15%, and apply to investments which account for about 54% of total project costs. The benefits of many of the other components would be even more difficult to quantify but would nonetheless be important. For example, improved health and reduced job absenteeism would result from the health and the service privy conversion program. 6.04 In addition to the direct benefits in improved and expanded municipal services, and urban efficiency, there are a number of indirect benefits which would result from the project. The following are the most significant. (a) The metropolitan economy would be boosted directly by the following employment generation: - 30,000 construction jobs generated by the CUDP III investments over the 5-year construction period; -51- - 20,000 jobs generated over the operational life of the CUDP III program for operation and maintenance; - 42,600 beneficiaries and an estimated 16,000 net additional direct jobs generated by the SSE program. The above employment generation, exclusive of the secondary effects, is equivalent to about 3.5% of current total CMA-wide employment. (b) The regional economy can be expected to benefit from increased business efficiency and lower transaction costs as a result of the significant reductions in the intensity and duration of waterlogging, improvements in health, lower freight trucking costs, and increases in accessibility within the municipalities and anchals. 6.05 Perhaps the most important unquantifiable long-term benefit of the project would be the strengthening of metropolitan and municipal management systems as demonstrated through investments under CUDP I and II (paras 1.09 to 1.21). Under CUDP III, institutions and agencies within the CMA, particularly the municipalities will benefit from: (a) training at all levels; (b) exposure to methods for eliciting public participation and responding thereto; and (c) improved processes and methodologies for planning, budgeting, appraisal, monitoring and evaluation. B. Distribution of Benefits 6.06 Data for 1981 indicates that over 60% of the CMA population have incomes below the poverty threshhold (EWS). I/ In absolute terms, this is equivalent to 6 million people, a large percentage of whom are located in the municipalities outside the metrocore where little previous investment has been made. Most of these urban poor will benefit from the proposed project. Some 70% of all project beneficiaries would be in the poverty group. 6.07 Table 6.1 summarizes the number of beneficiaries under each sector of the metropolitan-wide program appraised to date, and the percentage represented by the EWS. A part of the population will benefit from one of more sector investments. Table 6.1: URBAN POVERTY - METROPOLITAN-WIDE PROGRAM Total of which Sector Beneficiaries % EWS Solid Waste Management 3,165,750 73 Sewerage & Drainage 1,255,000 55 Water Supply 2,074,000 60 SSE 59,000 65 Health 2,000,000 100 1/ See para 2.04. -52- 6.08 The number of beneficiaries in the poverty group under the municipal development program appraised to date is summarized similarly in Table 6.2. Table 6.2: URBAN POVERTY - MUNICIPAL DEVELOPMENT PROGRAM Total Components Beneficiaries % EWS Markets 3,198,500 65 Drainage 2,375,000 69 Water Supply 3,171,500 69 Solid Waste 3,031,500 68 BIP 307,360 100 Service Privy Conversion 167,000 100 Local Road Improvements 3,240,500 65 C. Project Risks 6.09 The major project risks concern project implementation and political commitment: (a) There is the risk that the program will prove too complex to administer and manage. The fragmentation of responsibility requires strong leadership and coordination from CMDA. Project Management on a day-to-day basis, as well as project monitoring for socio-economic impacts, will require more sophisticated systems than hereto available within CMDA. (b) The nature of the project investments combined with the decentralization policy provides a direct link between development and politics. Any weakening of political commitment or dilution of discipline will make technical implementation and financial control difficult. 6.10 Implementation: In order to minimize the risks involved in the execution of such a multi-sectoral and geographically extensive project, a systematic monitoring and control process has being established within CMDA. The 'institutionalization' of this process, is substantially completed. First, a monitoring and control system (PMU, see para 4.31(a)) has been established for the project as a whole, whereby physical progress and financial performance will be measured for individual implementing agencies. 6.11 A second monitoring and control system through the Directorate of Local Bodies in LGUDD will focus on the implementation of the municipal program within each municipality for the purpose for administering the Revised Grant Structure (paras 5.37-5.45). Physical progress and financial performance relative to predetermined targets will again define the basis of control. In both cases, quarterly and annual reports will provide the indicators on which to assess and adjust sectoral investment priorities and municipal investment allocations. 6.12 A third system by which AMEU will monitor and evaluate program benefits through key indicators long-term has also been established and will provide additional information for program or policy modification. -53- 6.13 Political commitment. This relates to the GOWB's willingness to fully utilize the system of performance monitoring and controls built into the project. The test of this will come towards the end of the first year of the program, at which time the picture of individual municipal performance relative to present targets will become clear. The controls built into the project dictate that those municipalities not achieving a certain level of financial performance would then face a reduction in investment for the following year. Similarly, high performance would be rewarded by additional investment funds for the following year. 6.14 There is clearly a risk that GOWB may not follow these procedures and that the overall program may falter accordingly. However, this risk appears minimal for the following reasons. First, it is clearly stated GOWB policy to extend financial self-dependency and accountability to the municipal level throughout West Bengal. Second, GOWB has encouraged the proposed system of controls within CMDA and LGUDD. Third, there is an urgent financial and practical necessity for expanded service provision. D. Approach to On-going Appraisal and Evaluation 6.15 An appraisal and evaluation system has been developed for the TRIP, CHIP, and municipal programs to ensure that each component is consistent with project objectives and to monitor the degree which objectives are actually achieved. This system has been institutionalized through the AMEU of CMDA which will remain a part of CMDA beyond the project period. 6.16 In the case of the TRIP and CHIP programs, sub-projects are grouped by sector and by planning/implementing/operating agency. For each sector, a summary of performance estimates for each sub-project is compared against a common set of financial, physical design, service delivery, institutional, implementation, and benefit indicators. For schemes in excess of Rs I crore, this information is supplemented by an appraisal specific to that scheme. The main elements of the project-specific appraisal include: (a) Key impacts - justification and project benefits - economic analysis - distribution of benefits and poverty analysis (b) Financial & cost recovery analysis (c) Project risk analysis (d) Implementation issues These formats are consistent across sectors and provide the basis for the implementation, monitoring, and control of the metropolitan-wide program. 6.17 Under the municipal program, each municipality is appraised using a standard format comprising the following elements: (a) Key demographic, municipal revenue, and expenditure indicators; -54- (b) Summary of CUDP program including program size, components, staffing, land acquisition requirements and implementation timetable; (c) Component (sector) specific summary of investment cost, service delivery norms (existing and proposed), physical design standards target population, and percent EWS of target population; (d) Key impact summary (justification and program benefits, economic analysis, distribution of benefits and poverty analysis); (e) Analysis of existing and projected municipal finances, including annual performance targets to be met as a pre-condition of continued disbursement to that municipality; (f) Project risk analysis; and (g) Implementation issues. 6.18 These formats provide the basis of the implementation, monitoring, and control of the municipal program. By way of illustration of the process, an appraisal of a typical municipality (Barasat) is set out in Annex 3D. VII. AGREEMENTS REACHED, ASSURANCES RECEIVED, AND RECOMMENDATIONS 7.01 During negotiations AGREEMENTS were reached as follows: A. with GOWB, that: (a) GOWB will appoint independent auditors, acceptable to IDA, to audit the accounts and financial statements of the project implementing agencies, the local bodies, and CMDA's Statement of Expenditures. The audit reports and financial statements are to be submitted to IDA within nine months of the end of each fiscal year. (Chapter IV, paras 4.17 and 4.25); (b) GOWB will deposit Rs 9 crores into the Area Development Account during FY 1984; Rs 5 crores by September 30, 1983, the balance by March 31, 1984. IDA would reimburse its share (50%) and would subsequently receive full documentation of eligible expenditures to justify the payments made (Chapter IV, para 4.18); (c) GOWB/CMDA will retain accounting firms not later than 9/30/83 to assist the municipalities in maintaining accounts and preparing final accounts for audit (Chapter IV, para 4.25(d)); (d) GOWB will submit annually to IDA starting 6/30/84, a copy of the monitoring report for the administration of the Revised Grant Structure to be prepared by LGUDD (Chapter IV, para 4.31(c)). -55- (e) GOWB will cause CMC to reduce its reliance on GOWB subventions from 24% of its revenue expenditure in 1982/83 to about 10% by 1987/88. GOWB will cause CMC to: i) increase the total ratable value of properties from the 1981/82 total of Rs 63.70 crores to about 103 crores in 1986/87 (Chapter V, para 5.18(a)); ii) achieve cash collections of at least 65%, 70%, 75%, 80%, and 85% of the current year's consolidated property tax demand during fiscal years 1983/84, 1984/85, 1986/86, 1986/87 and 1987/88 (Chapter V, para 5.18(b)); and iii) achieve cash collections of at least 50% a year of total annual outstanding arrears property tax demand (Chapter V, para 5.18(c)); (f) GOWB will, by December 31, 1983, complete an evaluation of the adequacy of the new property tax assessment base of all CMA municipalities, HMC and CMC. If the base in any munici- pality is found to be inadequate GOWB will cause the CVB to carry out a revaluation of properties in such munici- palities (Chapter V, para 5.26). (g) GOWB will cause: i) CMC to achieve full cost recovery for water supply operations by 1987/88 and to recover the following interim percentages of its revenue expenditures obtained through water supply operations: about 48% in FY83/84; 63% in FY84/85; 69% in FY86/86; and 87% in FY86/87 (Chapter V, para 5.28); ii) CMC to introduce a graduated rate, satisfactory to IDA, for domestic unmetered consumers based on ferrule size, not later than November 1, 1983(Chapter V, para 5.28(a)(ii)). iii) CMC to introduce annual licencing for all new private tubewells, (Chapter V, para 5.28(b)); iv) CMC to adhere to the agreed targets for metering and consumer survey programs (Chapter V, para 5.28(d)). (h) GOWB will cause CMWSA to achieve full cost recovery for its water supply operations by 1985/86 and to recover the following percentages of its revenue expenditures for water supply: 75% in FY83/84; and 95% in FY84/85 (Chapter V, para 5.29). (i) GOWB will ensure that CMWSA's overdue bills for bulk water supply will be paid. (Chapter V, paras 5.29(b)). (j) GOWB will annually update the performance targets for each municipality and GOWB will fund the FAM Revenue and Capital accounts based on these targets. CMDA will allocate capital resources in accordance with recommendations of LGUDD (Chapter V, para 5.45). -56- B. With CMDA, that: (a) CMDA will review annually the interest rebate feature in the SSE component to determine its effectiveness starting 4/1/84 (Chapter II, para 2.16); (b) CMDA will consult with IDA on any major changes proposed in its five-year investment program (Chapter II, para 2.28); (c) CMDA will onlend at the prevailing commercial interest rate for urban renewal schemes, and for other investments at not less than 8.25% a year (Chapter III, para 3.06); (d) CMDA will establish and maintain an Area Development Account in a commercial bank for SURAD (Chapter IV, para 4.18); (e) CMDA will within nine months after the close of each financial year, for the agencies and municipalities, submit audited financial statements and auditors' reports, including evaluation of contracts, financial management, and recommenda- tions (Chapter IV, para 4.26). (f) CMDA will furnish quarterly progress reports to IDA, which will include updated implementation schedules (para 4.09), within 60 days after the close of each quarter starting 11/30/83 (Chapter IV, para 4.27); (g) CMDA will at six month intervals, furnish IDA with a progress sum- mary of appraisals, field surveys, and other activities carried out by the Appraisal Monitoring and Evaluation Unit (AMEU), and every twelve months starting on 4/1/84 will furnish IDA with a copy of AMEU's annual report and recommendations (Chapter IV, para 4.31(b)). (h) CMDA/GOWB to arrange for regular inspections of key installations by suitable agencies (with a record of good O&M). Copies of these reports to be made available to IDA starting 9/30/84 (Chapter IV, para 4.30); (i) CMDA will transfer to the appropriate operating agencies, all assets completed up to March 1982, not later than 3/31/84 and regularly thereafter on an annual basis, for all assets to be completed under this project (Chapter V, para 5.02); (j) CMDA will submit for IDA review and approval no later than 9/30/83 a draft copy of SURAD's administrative, operational, and financial guidelines for implementing the Shelter and Area Development Program; and these will incorporate costing and pricing formula, maintenance charges, the criteria for beneficiary selection, conditions of lease and terms and conditions of loans for the sites and services beneficiaries, all satisfactory to IDA (Chapter V, para 5.34); -57- (k) CMDA will submit for IDA review and approval: i) a draft copy of administrative, operational, and and financial guidelines for implementation of the Urban Renewal schemes not later than 9/30/83 (which will incorporate: the costing and pricing formula for the sale 'development rights;' the terms and conditions of sale by Auction of leasehold rights; terms and conditions of rental facilities; accounting and placement of all funds generated through urban renewal schemes); ii) an appraisal of each urban renewal scheme, (only schemes yielding a financial rate of return in excess of the prevailing commercial cost of capital will be implemented); and iii) a pricing and cost recovery analysis for each urban renewal scheme prior to the auction of development rights (Chapter V, para 5.35). 7.02 The following are agreed conditions of credit effectiveness: (Chapter V, para 5.27): (a) GOWB will cause CMC to increase the water rates for metered non-domestic users from Rs 5 per 1000 gallons to not less than Rs 11 per 1000 gallons (Chapter V, para 5.28(a)). (b) GOWB will cause CMWSA to introduce the following minimum rates for bulk water supply: i) Rs 1.25 per 1000 gallons to municipalities except CMC; ii) Rs 3.00 per 1000 gallons to CMC; iii) Rs 10 per 1000 gallons for industrial consumers; and iv) Rs 6 gallons for commercial and institutional consumers. (Chapter V, para 5.29(a)). 7.03 In addition, during negotiations, confirmation, and assurances were received from: (a) GOWB, in connection with the Calcutta Urban Transport Project, that the following actions have been completed: i) a task force in the Calcutta State Transport Corporation has been appointed; ii) bus and tram fares have been raised; iii) transportation planning responsibilities have been consolidated in the CMDA (Chapter I, para 1.06); (b) GOWB, that CMC has completed the following: i) placement of three suitably qualified staff to improve assessments of properties, updating of valuation roll, and collection performance; ii) appointment of a Special Officer and supporting staff to manage a consumer survey and water metering program, including meter repair facilities; iii) establishment of a meter reading, billing, and customer -58- service department; and iv) appointment of one person for stores inventory and control (a second position would be filled by 6/30/83)(Chapter IV, para 4.04); and v) a Vehicles Replacement Fund and a Sinking Fund has been established effective 4/1/83, and annual deposits will be made (Chapter V, para 5.23). (c) GOWB, that in CMWSA: i) all identified positions required to implement the project will have been filled by 6/30/83; and ii) the accounting system designed for the water authority was already operational effective 4/1/83 (Chapter IV, para 4.05). iii) The first tranche of a working capital loan to CMWSA of Rs 90 lakhs will have been paid not later than 4/30/83 and the balance before 3/31/84 (Chapter V, para 5.29(iii); (d) GOWB that it has established effective 4/1/83 the FAM Revenue and Capital accounts (Chapter V, para 5.45); (e) CMDA, that: i) a revised staffing structure and organization has been approved by its Board; ii) most key management positions have been filled; three remaining posts will be filled by 6/30/83; iii) a letter of intent has been issued to contract HDFC for two years of advisory and training assistance to develop SURAD's marketing, loan administration, and financial capabilities. A draft contract will be sent for IDA review by 6/30/83 (Chapter IV, para 4.03). iv) by 6/30/83, CMDA will be in possession of about 120 ha (300 acres) in West Howrah and about 90 ha (220 acres) in Baishnabghata- Patuli, East Calcutta and West Howrah Extensions by December 31, 1983; and a further 80 ha (200 acres) in West Howrah by 2/29/84; v) by 6/30/83, CMDA will submit for IDA review, detailed engineering drawings and specifications for earth filling at West Howrah; vi) it has secured tentative commitments from financial institutions for its Area Development program (Chapter IV, para 4.10); 7.04 The proposed project constitutes a suitable basis for an IDA credit of US$147 million to the Government of India. -59- ANNEX 1 Page 1 BACKGROUND A. Urban Growth at the National, State, and Metropolitan Level 1. Urban growth in India has been accelerating over the past three decades, from 2.3 percent a year in the 1950's to 3.9 percent a year in the 1970's. This growth, which is more than twice the rate at which the rural population is increasing, adds some 7 million people to India's towns and cities each year. Much of this growth is taking place in the 135 medium-sized cities with population between 100,000 and 1,000,000, which grew at an average annual rate of 6.6% between 1961-71, and which accounts for 52% of all urban population. The nine largest cities, with populations of more than one million are growing at an average annual rate of 3.3%. If the present trends in urban population growth continue, the total urban population would be about 300 million by the year 2000 and by the same time 43 Indian cities would have populations of over one million. 2. West Bengal is the second most densely populated state in India after Kerala. In 1981, its population approximated 54.5 million with about 13 million (or 24%) living in urban areas, including Calcutta, the state capital. The population living in the Calcutta Metropolitan Area (CMA) 1/ is growing at an average rate of 2.2% and was in 1981, approaching 10 million, or over 70% of West Bengal's urban population. 3. The CMA is the slowest growing metropolis in India. Yet it continues to add over 200,000 persons annually to its population in spite of continuing deficiencies in environment, infrastructure, public services, and employment. About 3.3 million of the CMA population is within the Calcutta Municipal Corporation (CMC) administrative area on the east bank of the Hooghly river. The west bank population is about 2.2 million, concentrated mainly in the Howrah Municipal Corporation (HMC) and Bally Municipality opposite the CMC. About 45% of the CMA population, or about 4.5 million people, belong to households in the economically weaker section, with a monthly income of Rs 350 (approximately US$37 equivalent) or less per household. 4. The Economy. Manufacturing and service activities predominate in the CMA. In the manufacturing sector, a major shift has taken place over recent decades from dominance by the jute industry to dominance by the engineering industry. However, in recent years there has been an overall decline in production. Service activities proliferate throughout the area, particularly in transport, storage, and communications. In the CMA as a whole, employment in 1981 was about 2.8 million according to official census estimates, a modest increase over the 1971 figure of 2.6 million--with about 1.5 million in services, 1.1 million in manufacturing, and 0.2 million in agriculture and mining. 1/ The census figures are in reference to the Calcutta Urban Agglomeration (CUA), which roughly equates with the CMA. -60- ANNEX 1 Page 2 5. Administration of Local Government. The State Government of West Bengal (GOWB) is responsible for framing and enacting legislation governing all local authorities in West Bengal. As such, GOWB, through its Local Government and Urban Development Department (LGUDD) has authority over the CMC, HMC, and the municipal authorities, which provide government services in their respective areas within the CMA. The local government framework in the CMA consists of two municipal corporations and 37 municipalities. (see Annex 3A). In 1971, GOWB created the Calcutta Metropolitan Development Authority (CMDA) to act as an area-wide statutory authority charged primarily with planning, design and construction of infrastructure in the CMA. It is largely through the CMDA that GOWB coordinates and manages development within the CMA. From January 1982, the CMDA has been formally designated as the planning and development Authority for the CMA under the West Bengal Town and Country (Planning and Development) Act, 1979. B. Bank Group Role and Experience in Calcutta 6. The First Calcutta Urban Development Project (CUDP) 1/ comprised a broad program of urban works, with emphasis on infrastructure to meet the most urgent service needs of the population. The IDA Credit of US$35 million equivalent, or 36% of total estimated project costs of about US$97 million, was directed to investments mainly in the water supply, sewerage, drainage, and transportation sectors. The credit is now fully disbursed. Progress under the First Credit was slow, reflecting the lack of experience in program management on the part of CMDA, the principal implementing agency. Particularly noticeable were deficiencies in coordination of agencies, project budget sanctioning, monitoring, bidding procedures, and delays in land acquisition. 2/ These difficulties are understandable, as CMDA was established only iTi 1971 and was immediately given responsibility for an extensive and complex development program. 7. The Second Calcutta Urban Development Project 3/ (CUDP II) differs from the first in that it includes a greater number of components. In addition to the provision of shelter, municipal infrastructure improvements, solid waste management and technical assistance, other components such as 1/ Cr. 427-IN, 1973/74 to 1978/79. 2/ Project Completion Report (PCR) dated 6/1/81 and Draft Project Perfor- mance Memorandum Report (PPAM) dated 6/11/82. 3/ Cr. 756-IN, 1977/78 to 1982/83. -61- ANNEX 1 Page 3 school construction and health care, credit for small businesses, traffic engineering and management, strategic land management improvement, and urban renewal projects were included. This project composition reflects an adjustment in CMDA's investment program to give priority also to neglected sectors providing immediate improvements and assistance in urban services conditions for the city as a whole. The project places emphasis on the operation and maintenance of all completed works and on the formulation of plans for the future development of the Calcutta Metropolitan Area (CMA). After an unsatisfactory start, both these aspects have recently been receiving considerable attention from GOWB. IDA made available a credit of US$87 million equivalent, or just under 50% of the total project costs of about US$184 million, towards financing of this project, which was originally scheduled for completion in March 1982, and is now substantially completed. Progress under the second credit has been considerably better than the first. As of March 31, 1982 a total of US$78.7 million or 90.5% of the appraisal estimates, had been disbursed over 4.75 years 1/ and progress on physical works in spite of severe materials supply problems has been good. 8. The Calcutta Urban Transport Project (CUTP I) 2/ which was approved by the Board on June 3, 1980, attempts to respond to the GOWB's expressed priority for a thorough upgrading of mass transportation services in Calcutta. The project, which supports financial and operational rehabilitation of the public bus and tram operations in Calcutta as well as investments and policy measures to support private bus operations, is an important step in improving the quality and quantity of mass transport in the city and complements traffic management and engineering interventions initiated under the first two urban projects in Calcutta. The estimated total cost of the transport project is US$121.7 million. The credit of US$56 million would finance about 50% of project costs net of taxes and duties. The project period has been scheduled for just over three and a half years. 9. Although physical oerformance (e.g., acquisition of buses and trams, progress of civil works) has been satisfactory, the operational and financial performance of project agencies has been poor. A review mission in the field, simultaneously at the time of appraisal, agreed with GOWB on a set of specifically defined operational targets, along with a program and management actions to be undertaken over the past six months leading to negotiations. This is being closely monitored. Other specific problems such as the delay on the route rationalization study and the execution of traffic engineering schemes relate to overlapping responsibilities given to several agencies 1/ As compared to the South Asia Urban Projects norm and South Asia Region norm of approximately 97% and 80% respectively. 2/ Cr. 1033-IN, 1980-1983. -62- ANNEX 1 Page 4 concerned with traffic management, and are addressed along with broader institutional issues relating to the third project. C. Physical Achievements 10. Service delivery in all sectors has improved. To date for example, just over 2 million persons living in registered slums will have benefitted from the Bustee Improvement Program, (equivalent to 65% of the CMA slum population). Progress in other shelter- oriented programs has been slow. Although land acquisition, organization, and contracting difficulties resulted in excessive delays, the effort and experience was useful in refining technical solutions and facilitating the adoption of appropriate policies on design standards, affordability, and cost recovery. Physical delivery of serviced lots is now imminent. By June 1983, the first of about 25,000 persons, who have already been allocated serviced sites in a scheme financed under CUDP I, will take possession of these. The first of a further 45,000 persons will begin to move to a second site in East Calcutta sometime in early 1984. 11. Treated water supply production has almost doubled from the 100 mgd ten years ago, to a current 200 mgd. During 1983/84, with the inauguration of new works at Garden Reach and other improvements, this figure will reach 300 mgd, with greatly increased coverage under a much enhanced distribution network. More intensive use is intended of existing infrastructure. About 5,000 m of new branch sewers have already been laid within Calcutta city and a program to desilt approximately 43,000 gully pits is underway. A major sewer cleaning exercise for approximately 650 km of existing sewers in Calcutta City, however, has not started due to a number of difficulties, including the shortage of experience in this complex operation in India. About 10,000 m of a trunk sewer system in Howrah (which had no sewers at all) and a treatment plant have now been completed. The next phase will complete the secondary and tertiary sewerage systems in Howrah. In Calcutta, collection of nightsoil from existing oservice privies' by CMC's conservancy department has improved with better organization and the acquisition of additional tankers and equipment. In the meantime, .a long-term program to phase out privies has been proceeding well, with over 35,000 sanitary latrines installed. 12. The incidence of water-logging has been reduced, with the completion of approximately 80,000 m of new drainage as well as modifications to a number of drainage outfalls included under CUDP II following severe floods in September 1978. Solid waste management is also much better. Currently, an estimated 2,300 tonnes is collected daily which represents almost 94% of the total tonnage generated in Calcutta City. Most other municipalities within the CMA have also instituted elementary solid waste collection and disposal, although only about 350 tonnes per day is collected out of an estimated daily generation of 1,500 tonnes. -63- ANNEX 1 Page 5 13. In traffic and transportation, about 50 km of new roads have been completed and are in use. Engineering improvements have been made to existing routes. A traffic management scheme which includes inter alia, the introduction of computerized traffic signals is just beginning to become operational. 14. A primary school construction program to reduce the deficiencies in the bustees, is also making good progress. Approximately 50 new schools have been completed and a further 200 existing schools have been renovated. Similarly, a 'pilot scheme' to build and operate three zonal health centers and 10 urban community health clinics in the improved bustees, has become fully operational. 15. In addition to the major effort in the metrocore under CUDP II, a parallel pilot program in the CMA municipalities (panchayats and non-municipal urban areas) has resulted in about 350 km of existing roads being provided with surface and drainage improvements. D. Highlights from Project Performance Audit Memorandum - CUDP I 16. 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 Area (CMA). 17. 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 CMA. 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. 18. 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. -64- ANNEX 1 Page 6 19. The focus of the project on the development of CMDA and the experience 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 constitute 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, operation and maintenance of the system. 20. Aspects of this experience that may be of special interest are: (a) 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); (b) 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); (c) the limitations of a centralized approach to the complex problems 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 (d) 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 operations and maintenance (PPAM, paras. 4.30-4.31; PCR, paras. 9.10-9.12; 10.09). -65- ANNEX 2A Page 1 INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT KEY EXECUTING AGENCIES A. The Calcutta Metropolitan Development Authority (CMDA) 1. The Calcutta Metropolitan Development Authority (CMDA) was created under the Calcutta Metropolitan Development Authority Act of 1970 and reconstituted under the West Bengal Town and Country (Planning and Development) Act of 1979 (TNCP). Its territorial jurisdiction is the Calcutta Metropolitan Area (CMA). CMDA is vested with the responsibility of urban development within the area which comprises the Calcutta Municipal Corporation (CMC), the Howrah Municipal Corporation (HMC), 37 municipalities, two notified areas, and a number (165) of non-municipal urban and semi-urban areas. 2. Under the TNCP Act, CMDA has the following powers and functions: (a) to prepare a present land use plan; (b) to prepare and enforce an outline Development Plan; (c) to prepare and enforce a detailed Development Plan; (d) to prescribe use of land within its area; (e) to prepare and execute a development scheme; and (f) to coordinate development activites of all departments and agencies of the State Government or local authorities operating within the planning area. CMDA also exercises land use control in the CMA, besides executing and coordinating development schemes either by itself or by delegating any of its functions, except plan preparation, to the municipal bodies. Along with these powers and functions CMDA is the primary regional budgetting and funding authority for the urban development programs in the CMA. 3. CMDA's Board includes two elected corporation counselors and three elected municipal commissioners representing the municipalities in CMA. The Advisory Council of CMDA also includes a representative each of CIT and HIT, the Commissioners of CMC and HMC, and three representatives of the municipalities in the CMA. To finance all development schemes in the CMA, CMDA obtains financial resources through state plan allocations, 50% of the present entry tax, and its own market borrowing. B. Calcutta Municipal Corporation (CMC) 4. Calcutta was established in 1690 by the East India Company. Between 1774 and 1911 it was officially the capital of the British Empire in India. In 1727, a municipal corporation for Calcutta, headed by a mayor, was established. In the latter half of the 19th century, a filtered water supply, underground drainage, a network of roads, and other improvements were planned and built. Up to independence (1947) Calcutta was the premier industrial center and largest port in India. In the years following -66- ANNEX 2A Page 2 independence, its relative importance as an industrial and commercial base has declined. 5. From March 1972 to the present, the powers of the Corporation of Calcutta have been superseded, and administration has vested with GOWB. The new Calcutta Municipal Corporation Act 1980, which was notified on January 18, 1982, attempts to bring the administration and financial management of the Corporation up-to-date, providing it again with an elected body and increased powers over the 1951 Act. The Act provides for the election of a mayor, councillors, and aldermen. Elections are scheduled to take place no later than October 1983. 6. The functions of CMC are administered by its Commissioner through 12 departments. The total number of staff employed by CMC is approximately 33,000, of which the Water Production and Distribution Department account for about 6,000, the Motor Vehicles and Conservancy Department, about 12,000. 7. A number of systems to improve the financial and managerial performance of CMC were designed and satisfactorily implemented under CUDP II. Principal among these were the accounting and management information system and the stores organization, control, and purchasing system. A revised municipal accounting and cost accounting system was installed. Property tax billing and accounts were computerized. Year-end closing of accounts, which had been in arrears for a number of years, were brought up-to-date with the help of consultants. Independent commercial auditors were retained to audit the backlog of accounts. CMC is now only one year behind its submission to IDA of its annual audited financial statements, but expects to be up-to-date by June 30, 1983. The associated management information system provides for budgetary control, including performance budgeting. Under the stores' organization, control, and purchasing system, a complete inventory of all stores was taken, after which slow and fast-moving items were identified. Inventory records were computerized and purchase and control procedures streamlined. After only one year in operation the benefits of the system are already apparent. C. Calcutta Metropolitan Water and Sanitation Authority (CMWSA) 8. The Calcutta Metropolitan Water and Sanitation Authority (CMWSA) was created under the CMWSA Act in 1966. Under the Act, CMWSA was vested with the resposibility for the "promotion and operation" of all schemes relating to the production and supply of water, sewerage, drainage, sewage treatment, and collection and disposal of nightsoil in unsewered areas. CMWSA is also empowered to levy direct charges and taxes to recover its costs of operations. 9. Although vested with broad operational and financial powers, ever since its inception CMWSA has been essentially operating as a subcontractor to CMDA, limited only to water supply production and sewage treatment investments. The Board of CMWSA was dissolved in 1972 and it is currently run by an Officer on Special Duty (OSD), appointed by GOWB. All major decisions are taken jointly by the Chief Executive Officer of CMDA and the OSD of CMWSA. -67- ANNEX 2A Page 3 10. Due to its limited role heretofore as a subcontractor for capital works only, CMWSA is currently understaffed primarily in the areas of revenue management, administration, accounting and finance. Under CUDP III, it is proposed that while CKWSA will continue to act as an executing agency for capital works in water supply and sewerage, it will be given increasing autonomy, in both its operations and finances. As a first step towards this objective, CMWSA will now become a bulk supplier of water to the municipalities, CMC, and HMC. It will own and operate all production and transmunicipal transmission facilities. It will also retail water to major industrial and commercial consumers who have direct access to CMWSA's transmunicipal transmission lines. Its operational and maintenance responsibilities for transmunicipal facilities will be considerably strengthened. D. The Municipalities 11. In addition to CMC and HMC, there are 37 municipalities and 2 notified area authorities (treated as municipalities throughout this report) within CMA with population ranging from about 400,000 to about 20,000. Until recently, the elected councils of these municipalities were superceded for nearly 18 years. Following the municipal elections held in mid-1981, the municipalities are now governed by a council of elected representatives. A list of these municipalities is attached in Annex 3A. 12. Traditionally, the municipalities have been responsible for planning and implementing local water supply, drainage, and sanitation schemes, construction of access roads, schools and markets, conversion of latrines, collection and disposal of solid waste, etc. However, investments in these areas have been relatively small and have been primarily financed by grants from the State Government. 13. Under CUDP III, keeping in line with GOWB's decentralization objectives, the responsibilities of these municipalities have been expanded to include selection of investment priorities, detailed planning, design, and implementation of investments. The municipalities will also be responsible for full operation of these investments. 14. Steps have already been taken to ensure that the municipalities can effectively discharge these responsibilities. The Bengal Municipal Act which was amended in 1980, is currently in force. The amendments aim to improve overall municipal management through: (a) appointment of four senior-level officers (Administration, Finance, Engineering, and Health) to each of these municipalities from state-level cadres; and (b) introduction of measures to improve the resource base of these municipalities. In addition, a Central Valuation Board, established in 1980 is currently working closely with each of the municipalities to improve revenues through: (i) better property tax assessment procedures and (ii) better tax collection methods. Finally, an ambitious training program has been designed, targetted mainly to the municipalities (paras 2.22-2.24). -68- ANNEX 2B Page 1 LIST OF SUB-COMPONENTS BY KEY EXECUTING AGENCIES The implementing agencies for the proposed C1JDP III sub-projects have been identified as follows: Agency/Sector Work Value (Rs. crores) A. CMDA 1) Improvement to Talla-Palta System 1.74 Water Supply 2) Remodelling of existing 45" Sector and 60" Main 6.65 3) Baranagar Kamarhati Treatment Plant and Primary Grid 13.99 4) Kamarhati Water Supply Scheme 0.10 5) Calcutta Distribution System 7.06 Sewerage & 6) Improvement of Pumping Stations Drainage (Ballygunge, Palmers Bazaar, Sector Dhapa Lock) 0.88 7) Alternative Power Feeder to 0.40 Pumping Station 8) Swarnamoyee Khal (Howrah) 0.43 9) Bhatpara-Naihati Nikashi 0.50 10) Cosspore-Chitpore Drainage 0.35 Solid Waste 11) Environmental Hygiene 0.23 Management 12) Water-logging in Calcutta 0.63 Sector 13) Garages 5.18 14) Durgapur Bridge 3.98 15) Gaznabi Bridge 0.54 16) Link Rd.with Deshpran Shasmal-MG Rd. 2.41 Traffic & 17) Link Rd.Anwar Shah Rd-NSC Bose Rd. 0.81 Transportation 18) Subway from ferry crossing 0.54 Sector 19) Zeerut Bridge 1.00 20) Garia Bus Terminal 1.50 21) CTEP 2.50 22) Kona Truck Terminal 3.01 23) Barrackpore-Dum Dum Expressway 0.25 24) Southern Expressway 0.25 Bustee Improve. & Panchayat Dev. 25) Panchayat Development Program 21.45 Sector Health Sector 26) Construction/Renovation of Health Facilities 2.09 Shelter, Urban 27) Urban Renewal of Dum Dum 1.00 Renewal, and 28) Six Shelter Subprojects 9.00 Area Dev. Sector Training 28) ILGUS Building 1.04 89.51 -69- ANNEX 2B Page 2 B. CMWSA 1) Tollygunj, Panchannangram Drainage 1.00 2) G.T. Road Drainage (Howrah) 0.86 3) Solid Waste Management 1.01 4) Serampore Water Treatment Plant with Primary Grid 9.52 12.39 C. CIT Urban Renewal of Bhowanipur, Tollygunj and Shyambazar (3 projects) 3.00 D. HIT 1) House connection of Howrah Sewerage 7.90 2) East West Road 0.50 3) Makardah Road (Phase II) 1.00 4) Urban Renewal (3 projects) 1.00 5) New Howrah Bus Terminus 1.00 14.40 E. Irrigation 1) Outfall Improvement: and Water a) Calcutta Outfall 4.16 Sector b) Additional pump at Chowbhaga & excavation of channel 2.00 c) Improvement of Tolly's Nullah 1.00 2) Howrah Drainage Channel 2.32 3) Beliaghata-Kristopur-Bagjola Khal 7.35 4) Bally Khal 0.97 5) Anti Malaria Khal 1.00 6) Adi Ganga 2.50 21.30 F. Howrah 1) Centrally Planned SWM Municipality for Howrah 2.00 2) Ward Level Projects for Howrah(MDP) 7.00 9.00 G. Calcutta 1) Secondary Grid of Calcutta 0.75 Corporation 2) Bulk Metering 0.10 3) Leak Detection 0.14 4) SWM for Calcutta City 5.00 5) Ward Level Schemes (MDP) 11.00 16.99 H. Other Ward Level Schemes 76.00 Municipalities I. CMDA and CC Sewer Cleansing and Study 5.35 Chart 1: REORGANIZATION OF CMDA CMDA Board Chief Executive Officer AMEU Input from Other Director Generals of Operations Sources & Agencies DGPolF CGOF Secretary DGO DGO DGO Directorate of Materials Director General A (Planning & Development) Chief Physical Planner Director General of Finance Monitoring O Physicol/Financiol Materials/ I Program dV Performance of Other Equipment MPagrmnt Implementing Agencies Management Unit Physical/ Supply to CMDAXs (CUDP 111) PROGRAM Operating Divisions Financial Performance of L PrMA' ogTa Planningnance/ Supply to Other Accounts Administration & Coordination O P E 1? A T 1 0 N S implementing I_ I Agencies Sc CMA W LD ~EE CUDP III Source: CMDA World Bank-24774 Chart 2: ORGANIZATION OF SHELTER, URBAN RENEWAL AND AREA DEVELOPMENT DIRECTORATE (SURAD) SCEO1 Director General SURAID Program Program/Policy Legal (Lond Acquisition) Marketing, Coordination of Shelter Loan Administration Services Programs by Other Agencies Negotiating Institutional Finance Local Body CMDA (Maintenance of Administrative Municipal Support Services Infrastructure) Director Director SUPAD (Planning) SURAD (Execution) I Multidisciplinary Site Supervision Design Teams Project Management Teams Responsibilities: ientification of Sites within CMA .- Program & Phasing Responsibilities: Preliminary Plan Project Management Formulation of Construction Cost Estmates (Number of Sites Pricing & Financial in Parallel) Flows Preparation of TOP for Consultants & Other Implementing Agencies Issuance of Design Standards/Manuals, etc. Source: CMIDA World Bank-24775 -72- ANNEX 3A THE MUNICIPAL DEVELOPMENT PROGRAM: ALLOCATION OF FUNDS Corporation/Municipality/ Location Population MDP Funds Allocation 2/ % of Notified Area 1/ 1981 Rs Crores US$(m) Total 01. Calcutta Mun. Corp. EB 3,291,655 11.00 11.6 11.7 02. Howrah Mun. Corp. WB 742,298 7.00 7.4 7.4 03. South Suburban EB 394,594 6.50 6.8 6.9 04. Bhatpara EB 269,158 4.00 4.2 4.3 05. Jadavpur EB 249,424 4.00 4.2 4.3 06. Kamarhati EB 240,418 4.00 4.2 4.3 07. South Dum Dum EB 227,578 4.00 4.2 4.3 08. Panihati EB 205,546 3.70 3.9 3.9 09. Garden Reach EB 191,389 3.44 3.6 3.7 10. Baranagar EB 167,848 3.00 3.1 3.2 11. Bally WB 137,723 2.48 2.6 2.6 12. Uluberia WB 136,000 2..<5 2.6 2.6 13. Hooghly-Chinsurah WB 129,338 2.33 2.4 2.5 14. Serampore WB 126,918 2.28 2.4 2.4 15. Naihati EB 114,165 2.00 2.1 2.1 16. Barrackpore EB 109,149 1.96 2.0 2.1 17. Titagarh EB 104,439 1.88 2.0 2.0 18. Chandernagar WB 101,568 1.83 1.9 1.9 19. North Barrackpore EB 99,902 1.80 1.9 1.9 20. North Dum Dum EB 96,490 1.74 1.8 1.8 21. Rishra WB 95,041 1.71 1.8 1.8 22. Halisahar EB 89,791 1.62 1.7 1.7 23. Kancharapara EB 88,544 1.59 1.7 1.7 24. Uttarpara Kotrung WB 85,678 1.54 1.6 1.6 25. Bansberia WB 81,355 1.46 1.5 1.5 26. Champdani WB 78,550 1.41 1.5 1.5 27. Baidyabati WB 65,144 1.17 1.2 1.2 28. Budge Budge EB 64,116 1.15 1.2 1.2 29. Garulia EB 63,269 1.14 1.2 1.2 30. Barasat EB 59,115 1.04 1.1 ;.1 31. Bhadreswar WB 57,386 1.03 1.1 1.1 32. New Barrackpore EB 47,392 1.00 1.1 1.1 33. Rajpur EB 46,013 1.00 1.1 1.1 34. Dum Dum EB 45,546 1.00 1.1 1.1 35. Konnagar WB 39,665 1.00 1.1 1.1 36. Khardah EB 36,198 1.00 1.1 1.1 37. Baruipur EB 28,923 1.00 1.1 1.1 38. Kayani Not. Area EB 28,000 1.00 1.1 1.1 39. Gayeshpur Not. Area WB 20,000 .75 0.8 0.8 TOTALS 94.00 99.0 100.0 I/ EB = East Bank (of Hooghly River) WB = West Bank (of Hooghly River) 2/ on per capita basis 73- A1NEX 3B SECTOR SERVICE DELIVERY NORMS FOR THE MDP These norms, drawn up by CMDA and the municipalities, are intended to reflect the minimum needs focus of the program. Sector Subproject Service Delivery Norms Component Minimum Maximum Water Supply 5 gpcd. 25 gped. Drainage component specific: component specific: waterlogging per % waterlogging per 100% target population target population Service Privy 1 communal privy I communal privy Conversion 25 population 10 population boid Waste component specific: component specific: Management tons collected per tons collected per target population 100% target population Local Road target population target population Improvements within 20 minutes within 5 minutes walk of nearest walk of nearest metallic road metallic road Bustee Improvements component specitic municipal service municipal service improvements per 100% improvements per % target population target population Markets provision of 50 sq.ft. provision of 600 sq.ft. covered space/1,000 covered space/1,000 people people Parks & Playgrounds basic improvements to basic improvements to existing facilities existing facilities, provision of additional park-playground areas Cremation Grounds maintenance of current provision of hygienic facilities facilities for disposal of bodies -74- ANNEX 3C Page 1 PHYSICAL DESIGN STANDARDS FOR THE MDP Sector Subproject/ Physical Design Standards .Component Minimum Maximum Water Supply concentrated Population secondary grid deep ;ubewel1s witn connected to primary secondary distribution grid; house connection system; provision of standpipes for EWS disperEsEpopulaion spot tub; el Drainage unlined surface drains surface drains with concrete slab covering at critical locations Service privy sanitary latrines to sanitary latrines conversion. seat level only with superstructure Solid Waste hand cart and tricycle rickshaws/ Management intermediate VAT transfer stations for collection, final primary collection. disposal by Tractor trailers to trailer truck final disposal or secondary transfer stations; pilot composting plants Local Road brick paved roads black topped metallic Improvements roads protected against erosion Bustee Improvements provision of shallow provision of water tubewells, street taps and standpipes, lighting, open intermediate vats for surface drainage, solid waste collection, communal sanitary open surface drainage, latrines, brick communal sanitary paved pathways latrines, brick paved pathways Markets tubular structure with concrete structure asbestos roofing and with same services brick paved flooring, as minimum standard water supply, solid but also with waste collection, provision of parking lighting, open spaces drainage, brick paved circulation system Parks & Playgrounds wire fencing; brick wall or metal basic seating boundary fence, basic seating, basic play facilities Cremation Grounds proper boundary wall proper boundary wall to ground and covered area for mourners Notes: The above standards were agreed by CMDA in discussion with the municipalities. It is the intention that all municipal subprojects should fall within the range of standards prepared for each sector. Differences in design standards between municipalities (e.g., water supply) reflect (i) differences (quality of groundwater, density of population, etc.); (ii) availability of necessary transmunicipal infrastructure (e.g., primary distribution system), and (iii) sector priorities of the municipalities themselves. -75- ANNEX 3D SUMMARY APPRAISAL FOR MUNICIPAL IMPROVEMENT PROGRAM (ILLUSTRATIVE) MUNICIPALITY NO. 30 NAME: BARASAT DATE APPRAISED: June 1982 A. Key Indicators Background Data on Barasat . 1971 population 42,642 . 1981 population 69,311 * Projected 1991 population 1,00,000 . 1971-8i annual population growth rate 6.25% Municipal area 19.25/sq. km. . 1981 gross population density 5,195/sq. km. % 1981 EWS of total population 65% . Average annual municipal capital expenditure 1979-81 Rs 9.3 lakhs Average annual internal revenue during 1979-81 Rs 10.4 lakhs Average annual collection as % of assessment 52% CUDP III Data Program Investment Total: Rs. 104 lakhs (Rs. 20.8 lakhs/year) Program Components: Water Supply, Drainage, Service Privy Conversion, Solid Waste Management, Local Road Improvements, Markets, Bustee Improvement Cremation Ground, Parks & Playgrounds. Staffing: Executive Health Finance Officer Officer Officer Engineer Other Overseer Recruited (LGUDD) 1 1 Required 1 1 1 Land Acquisition: Negotiations for 0.8 ha required by program have been initiated by Municipality. Target date for completion cf land acquisition: March 1983 Detailed Design Preparatiin: To be started by municipality in July 1982. INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT Table 1: PROGRAM PROFILE - BARASAT Investment % of Service Delivery Norms Physical Target % EWS of Component Cost Total Existing Proposed Design Populatic- Target Rs lakhs Cost Standards Population Water Supply 25.0 24.0 22.5 liters ped/ 45 liters pcd/ deep tubewell secon- 70,000 65 40,000 people 70,000 people dary distribution line, (5 gallons pcd) (10 gallons ped) house connections, standpipes Drainage 19.0 18.3 40% tot.municipal 70% tot.municipal lining of open drains, 65,000 65 population covered population covered improvements to existing culverts. Service Privy 2.5 2.4 no conversion 100% conversion of low-cost double pit 1,500 100 Conversion 250 service privies sanitary latrines Soli, Waste 6.0 5.8 4.5 metric tons 9 metric tons tricycle rickshaws/ 70,00C 65 Management collected and collected and transfer stations for disposed of (14% disposed of 991 primary collection. current daily daily production Tractor/trailors to production final disposal or secondary transfer stations. Local Road 28.0 27.0 pa't brick paved/ 44 km (27.4 miles) partly brick paved 70,000 65 Improvements part mud. 73 km. to be black-topped (4§.5 miles) 29 km (18 miles) to be brick paved. Markets 15.0 14.4 15.8 sq.m. 52.95 sq.m. concrete structure (170 sq.ft.)/ (570 sq.ft.)/ with provision of 1,000 people 1,000 people utilities 70,000 65 Bustee 2.0 no coverage upgrading of provision of stand- 30,000 100 Improvements residential pipes, sanitary privies, environment for street lighting, paved 5,000 households roads Cremation 0.5 0.5 Inad' quate/poor upgrading of burial boundary wall, lighting, 80,000 65 Ground faci ities ground for 80,000 improvement of ghat people 6.0 5.6 15 parks and 4 1 new park, 1 new play facilities and 70,000 65 Parks and pl.,,-ounds in playground, upgrading basic benches with Playgrounds poor conditions of existing parks and fencing playgrounds TOTAL 104.0 100.0 ANNEX 3D Table 2 INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT Table 2: FINANCIAL AND COST RECOVERY ANALYSIS - BARASAT (M/30) (Rs lakhs) Annual Debt Total Total Total Annual Share of Total Annual deficit (-) Year Servicing Cost Annual Annual Internal Revenue Entry Tax Revenue Surplus (+) a/c (CUDP 3) O&M Cost Cost (from Property per Year per Year Deficits to be met Taxes & Other through govt. Revenue Taxes and Fees) Support (1) (2) (3)C1)+(2) (4) (5) (6)=(4)+(5) (J(6-(3) 1988-89 6.96 20.70 * 27.66 19.50 5.60 25.10 - 2.56 1989-90 6.96 22.12 29.08 21.45 6.44 27.89 - 1.19 1990-91 6.96 23.67 30.63 23.59 7.41 31.00 + 0.37 1991-92 6.96 25.35 32.31 25.95 8.52 34.47 + 2.16 1992-93 6.96 27.17 34.13 28.55 9.80 38.35 + 4.22 1993-94 6.96 29.13 36.09 31.40 11.27 42.67 + 6.58 1994-95 6.96 31.26 38.22 34.54 12.96 47.50 + 9.28 1995-96 6.96 33.53 40.49 38.00 14.9 52.90 +12.41 * Rs 6.75 lakhs (on A/C of CUDP III) + Rs 13.95 lakhs (O&M) of existing assets) 20.70 lakhs. Notes: 1) Terms of loan: For all commercial nature schemes - 100% loan; for rest of schemes, 2/3 loan and 1/3 grant. Loan to be repaid in 15 years at an 8.25% rate of interest per annum, subject to moratorium of principal during initial 5-year construction period. 2) CUDP III Capital Expenditure during the construction period will be as follows: Year Rs lakhs 1983-84 24.85 1984-85 20.95 1985-86 20.65 1986-87 20.65 1987-88 16.90 IU.0 -78- ANNEX 3D Page 4 B. Key Impacts 1. Justification and Program Benefits i) Program based on priorities of local population identified through elected representatives. Service delivery norms and design standards repre- sent minimum cost approach to reducing major service delivery deficiencies in provision of critical municipal services. ii) The target population for 97.5% of the total investment program represents more than 65% of the total municipal population. The remaining investment is targeted directly at the EWS (economically weaker sections). 2. Economic Benefits i) The construction works associated with the program are estimated to create 260 full-time equivalent jobs over a period of 5 years. This is equivalent to 1% of the estimated 1981 employment in the municipality. ii) The operation and maintenance of the assets created are estimated to create 150 full-time equivalent jobs over the life of the program. This is equivalent to 0.5% of the estimated 1981 employment in the municipality. iii) The road improvement program would, based on the results of the CUDP II Municipal and Anchal Development Program, is expected to generate major economic benefits through greatly improved accessibility to key urban serv- ices and reductions in vehicle maintenance costs. iv) Water supply, drainage, service privy conversion, solid waste manage- ment, and bustee improvements can be expected to have a major impact on the environmental hygiene and health of the population. The greatest direct benefits will accrue to the EWS who represent 100% of the target population for the bustee improvement and service privy conversion components of the program. v) The provision of the greatly increased covered market floor space will, together with the improved local road system, provide improved facilities at reduced travel costs to traders and consumers over an area beyond that of the municipality. This would be reflected in increased rental and entry (octroi) tax revenues to the municipality. 3. Distribution of Benefits on Poverty Group It is estimated that for the program as a whole, 65% of the target population would be EWS. This figure increases to 100% in the case of the service privy conversion and bustee improvement components. -79- ANNEX 3D Page 5 4. Implementation Issues Institutional/Staffing Arrangements (i) GOWB has seconded one executive officer and one finance officer. Municipality has additionally requested one engineer, one overseer, and one financial analyst. (ii) CMDA will continue to provide technical assistance and training to municipal staff during preparation and implementation of programs. Implementation (i) Implementation timetable has been prepared; implementation will commence in March 1983; land acquisition negotiations underway for 0.8 ha required by the municipality to implement components of the program. (ii) CMDA will be responsible for monitoring and evaluating the impact of program and undertaking all necessary surveys. Ancillary Investment Municipal drainage improvements are dependent on construction of new outfall channel by Irrigation and Waterways Directorate of GOWB. Municipality has been assured by GOWB that this scheme will be coordinated with municipal drainage component. Finance Market component planned to break even. Municipality will be responsible for market development and grant leases to traders. All applicants will be charged non-refundable advances. Market impact on increased turnover would be recouped through entry tax. -80- ANNEX 4 LIST OF SELECTED DOCUMENTS IN PROJECT FILE 1. GOWB - Municipal Finance Commission Report, March 1982 2. Legislation The Calcutta Metropolitan Development Authority Act, 1970 The West Bengal Town and Country (Planning and Development) Act 1979 The Bengal Municipal Act 1982 and Amendments 1980 The West Bengal Central Valuation Board Act 1978 The Calcutta Municipal Corporation Act 1980 The Howrah Municipal Corporation Act 1980 The Calcutta Thika Tenancy (Acquisition and Regulation) Act 1981 The West Bengal Premises Tenancy Act 1956 The West Bengal Slum Areas (Improvement and Clearance) Act 1971 The Calcutta Metropolitan Water and Sanitation Authority Act 1966 The Urban Land (Ceiling and Regulation) Act and Rules, 1976 The Calcutta Improvement Act 1911 The Howrah Improvement Act 1956 3. Consultants' Reports Planning in the Calcutta Metropolitan Districts - H. Richardson 1980 Institutional Aspects and Training in the CMD - B. D'Souza 1980 Public Finance Situation in the CMD - E. Bachrach 1981 Forward Planning Process in the CMD - C. Turner 1981 4. CMDA Perspective Plan and Action Program for the CMD (Draft) 1981 Development Perspective for the CMD 1982 Miscellaneous Sector and Project Reports (call ext. 32795) Detailed Subproject/Program Cost Estimates Economic/Financial Analysis Worksheets 5. IDA - Project Performance Audit Memorandum, dated 6/82 (Cr 427-IN, 73/74-79/80) -81- ANNEX 5 Table 1 INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT CALCUTTA METROPOLITAN DEVELOPMENT AUTHUxil1 BALANCE SHEET AS OF MARCH 31 1980 THROUGH 1988 (Rs Crores3 -------- ----------- 1 --------------P R 0 J E C T E D----------------- Fiscal Year 79/80 80/81 81/82 82/83 83/84 84/85 85/86 86/87 87/88 TASSETS CasRN 6.51 7.59 6.79 5.26 6.19 7.18 8.22 9.28 10.48 Advances and Debtors 25.61 57.22 43.31 34.19 40.23 46.66 53.42 60.34 68.16 Stock 6.22 2.63 5.17 3.94 4.64 5.38 6.16 6.96 7.86 Area Development Fund 0.00 0.00 0.00 0.00 9.00 14.39 25.05 35.68 40.95 Subtotal 38.34 67.44 55.27 43.39 60.06 73.61 92.85 112.26 127.45 INVESTMENTS Sinking Fund Investments 31.02 0.00 38.24 33.68 28.17 6.96 0.00 0.00 0.00 Other 0.05 0.06 0.06 0.07 0.95 0.99 0.97 10.00 10.27 ASSETS & OUTLAY Outlay on Dev. Projects 273.87 323.78 355.65 424.55 499.68 570.41 645.22 731.25 811.31 Less Assets to Agencies 0.00 0.00 0.00 0.00 0.00 -184.64/2 -217.65 -250.63 -290.19 Subtotal Assets Retained by CMDA 273.87 323.78 355.65 424.55 499.68 385.77 427.57 480.62 521.12 CMDA Operating Assets (Net of Depreciation) 6.64 6.99 7.40 6.96 7.57 7.95 8.38 9.00 9.67 TOTAL ASSETS 349.92 398.27 456.62 508.65 596.43 475.28 529.77 611.88 668.51 LIABILITIES CURRENT LIABILITIES Accounts Payable 7.55 10.09 9.53 8.95 21.55 23.98 26.85 30.08 33.69 Others Payable 2.56 1.94 2.76 2.56 3.01 3.49 4.00 4.51 5.08 Deposits from Contrs. 5.14 5.96 4.72 4.47 5.26 6.11 6.99 7.89 8.90 Short Term Portion of Long Term Debt 0.00 3.61/3 0.00 0.00 0.00 0.00 6.05 11.25 8.25 Subtotal 15.25 21.60 17.01 15.98 29.82 33.58 43.89 53.73 55.92 Sinking Fund for Bonds Redemption 31.02 31.02 38.24 33.68 28.17 6.96 0.00 0.00 0.00 LONG TERM DEBT Loans 166.66 191.42 216.56 240.36 277.52 158.46/4 186.70 211.70 231.73 Less Transferred to Agencies 0.00 0.00 0.00 0.00 0.00 -16.66 -41.42 -66.16 -95.83 Subtotal 166.66 191.42 216.56 240.36 277.52 141.80 145.28 145.54 135.90 Loan Bonds 121.00 133.10 147.12 161.42 179.82 201.02 228.88 260.81 294.83 Subtotal L.T. Debt 287.66 324.52 363.68 401.78 457.34 342.82 374.16 406.35 430.73 EQUIY2 Grants 27.99 32.79 38.02 67.69 99.68 266.68 288.72 307.75 327.42 Others 0.35 , 0.38 1.71 0.26 0.95 0.99 0.97 10.00 10.27 CMDA Surplus (Deficit) -12.35 -12.04 -2.34 -10.74 -19.53 -7.77 -1.74 18.52 38.53 Less Transferred to Agencies 0.00 0.00 0.00 0.00 0.00 -167.98 -176.23 -184.47 -194.36 Subtotal Equity 15.99 21.13 37.69 57.21 81.10 91.92 111.72 151.80 181.86 TOTAL LIABILITIES 349.92 398.27 456.62 508.65 596.43 475.28 529.77 611.88 668.51 /1 Audited 77 Phased program of transfer of completed assets to operating agencies/local bodies. Includes design, supervision, and management changes. /3 In lieu of Sinking Fund payment for retirement of Market Borrowings. 7 Past loans written off and transferred to grants. 3urce: CMDA and IDA Estimates ANNEX 5 -82- Table 2 INDIA THIRD CALCUTTA,URMN-DEVELOPMENT PROJECT CALCUTTA METROPOLITAN DEVELOPMENT AUTHORITY FORECAST SOURCES AND APPLICATIONS OF FUNDS 1983/84-1987/88 (Rs Crores) 1983/84 1984/85 1985/86 1986/87 1987/88 bOURCES Net Operating Surplus (Deficit) 9.10 12.09 3.63 9.45 12.28 Add Depreciation 0.03 0.03 0.03 0.03 0.03 Net Cash Generation 7.= 12.12 3.66 9.48 12.31 BORROWINGS Loans 19.86 24.54 28.24 25.00 20.03 Loan Bonds /1 18.40 21.20 39.70 29.70 22.70 Subtotal Borrowings 38.26 45.74 67.94 54.70 42.73 Grants - GOI 4.04 4.24 4.46 4.68 4.91 Grants - GOWB 19.86 19.16 17.58 14.35 14.76 Octroi /2 27.68 31.82 36.59 42.08 48.40 TOTAL SOURCES OF FUNDS 98.97 113.08 130.23 125.29 123.11 APPLICATIONS Purchase of Fixed Assets 0.61 0.38 0.43 0.62 0.67 Expenditure on Dev. Projects/3 64.29 71.48 84.90 86.03 80.06 DEBT SERVICE Interest 21.45 21.72 20.79 20.41 20.53 Sinking Fund Contribution 9.79 9.71 9.13 8.66 8.85 Subtotal Debt Service 31.24 31.43 29.92 29.07 29.38 Increasp in Working Capital 2.83 9.79 14.98 9.57 13.00 TOTAL APPLICATIONS 98-.97 113.08 130.23 125.29 123.11 CASH Surplus (Deficit) for Year 0.93 0.99 1.04 1.06 1.20 Balance at Beginning of Year 5.26 6.19 7.18 8.22 9.28 Balance-at End of Year 6.19 7.18 8.22 9,.28 10.48 /1 Includes "rollover" of three bond issues in 1985/86, 1986/87, and 1987/88, aggregating Rs 30.80 crores. /2 Projected to increase at 15% a year. 77 Includes design, supervision, and managements costs charged to project expenditures. Source: CMDA and IDA Estimates -83- ANNEX 5 Table3 INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT CALCUTTA MUNICIPAL CORPORATION BALANCE SHEET AS OF MARCH 31, 1980 THROUGH 1988 (Rs crores) -------- ACTUAL----------- -------------PR 0 J E C T E D---------------- Fiscal Year 79/80 /1 80/81 /1 81/82 82/83 83/84 84/85 85/86 86/87 87/88 ASSETS CURRENT ASSETS Cash 7.82 7.38 4.09 4.51 4.70 4.10 3.90 4.61 4.91 Receivables 51.21 52.80 53.10 53.26 49.40 45.57 39.12 37.70 38.04 Advances to Staff/Contractors 15.07 17.20 17.90 18.71 19.75 20.91 22.35 22.87 23.75 Stock & Stores 0.26 0.27 0.27 0.56 1.25 2.25 4.03 6.16 7.00 Other 0.21 0.24 0.30 0.36 0.40 0.44 0.48 0.53 0.58 Subtotal - Current Assets 74.57 77.89 75.66 77.40 75.50 73.27 69.88 71.87 74.28 Investments 0.96 1.11 1.16 1.22 1.28 1.35 1.41 1.48 1.56 Sinking Fund 1.67 1.75 1.84 0.08 1.85 3.52 5.19 6.87 8.55 FIXED ASSETS 30.53 30.69 32.99 34.09 36.29 169.60/2 175.60 190.60 217.60 Subtotal 33.16 33.55 35.99 35.39 39.42 174.47 182.20 198.95 227.71 TOTAL ASSETS 107.73 111.44 111.65 112.79 114.92 247.74 252.08 270.82 301.99 LIABILITIES CURRENT LIABILITIES Creditors 16.77 17.51 18.40 18.30 17.60 16.51 18.41 20.24 22.27 Deposits 17.36 19.81 19.81 21.21 23.86 26.47 27.15 31.03 35.13 Subtotal - Current Liabilities 34.13 37.32 38.21 39.51 41.46 42.98 45.56 51.27 57.40 Loans Loans - GOWB 17.16 17.30 17.16 17.16 17.16 17.16 17.16 17.16 17.16 Debentures 3.99 3.99 3.33 2.23 2.23 2.23 0.00 0.00 0.00 Subtotal - Loans 21.15 21.29 20.49 19.39 19.39 19.39 17.16 17.16 17.16 Capital Capital Account 9.38 9.40 12.10 13.20 15.40 148.71 154.71 169.71 196.71 Municipal Fund - Loan A/C 6.01 6.00 5.92 5.92 5.92 5.92 5.92 5.92 5.92 Municipal Fund - Revenue A/C 34.87 35.13 34.07 34.07 32.02 29.97 27.92 25.87 23.82 Other 2.19 2.30 0.86 0.70 0.73 0.77 0.81 0.89 0.98 Total Capital 52.45 52.83 52.95 53.89 54.07 185.37 189.36 202.39 227.43 TOTAL LIABILITIES - CAPITAL 107.73 111.44 111.65 112.79 114.92 247.74 252.08 270.82 301.99 /1 Audited. 72 Transfer of Assets from CMDA. Source: CMC and IDA Estimates. -84- ANNIEX 5 Table 4 INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT CALCUTTA MUNICIPAL CORPORATION INCOME & EXPENDITURE ACCOUNT AS OF MARCH 31, 1980 THROUGH 1988 (Rs crores) ---------ACTUAL---------- ---------------PR 0 J E C T ---------------- Fiscal Year 79/80/1 80/81/1 81/82 82/83 83/84 84/85 85/86 86/87 87/88 INCOME Revenue A/C Consoidated Property Tax 13.64 13.45 17.98 18.02 19.66 21.69 24.06 26.79 29.87 Service Charge on Central Govt. Properties 0.47 0.49 0.56 0.59 0.62 0.65 0.68 0.72 0.75 Surcharge on Land & Buildings 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Tax on Professions & Trades 1.72 0.96 1.96 2.06 2.16 2.27 2.38 2.50 2.63 Other Taxes 0.12 0.23 0.10 0.11 0.12 0.12 0.13 0.14 0.14 Subtotal 15.95 15.13 20.60 23.78 22.56 24.73 27.25 30.15 33.39 Other cel pt StoItal ees 0.18 0.05 0.17 0.18 0.20 0.22 0.24 0.27 0.29 Health Services 0.00 0.00 0.28 0.30 0.32 0.36 0.39 0.43 0.48 Cotercial Services 1.09 1.42 0.67 0.73 0.81 0.89 0.98 1.07 1.18 Water Supply 1.48 0.42 0.63 1.54 2.92 4.11 4.71 7.82 11.18 Solid Saste 0.08 0.08 0.09 0.10 0.11 0.12 0.14 0.15 0.17 Other 1.52 1.18 3.33 3.50 3.68 3.86 4.06 4.26 4.47 Subtotal 4.35 3.15 5.17 6.35 8.04 9.56 10.52 14.0 17.77 TOTAL - OWN SOURCE REVENUE 20.70 18.28 25.77 27.13 30.60 34.29 37.77 44.15 51.16 Revenue Grnts Octro 6.01 6.74 i0.12 10.88 13.84/2 15.92 18.30 21.05 24.21 anstee Services 0.00 0.00 0.00 1.00 1.00 1.00 1.00 1.00 1.00 GOWB Subvestions 4.48 9.76 12.96 12.38 11.20 11.59 01.25 9.34 8.34 Subtotal 10.49 16.50 23.08 24.26 26.04 28.51 30.55 31.39 33.55 Total Revenue Receipts 30.79 34.78 48.85 51.39 56.64 62.80 68.32 75.54 84.71 Capital Receipts Grants - GOWB 0.00 0.00 0.00 0.00 2.33 2.91 3.43 5.24 5.43 Grants - Other 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Loans - GOWB 1.00 0.00 0.00 2.00 2.33 2.91 3.43 5.24 5.43 Loans - Other 0.00 0.00 0.00 5.00 0.00 0.00 0.00 0.00 0.00 Total Capital Receipts 1.00 0.00 0.00 0.00 4.66 5.82 6.86 10.48 10.86 TOTAL RECEIPTS 31.79 34.78 48.85 51.39 61.30 68.62 75.18 86.02 95.57 EXPENDITURES Revenue A/C Water Supply 5.24 7.86 8.96 10.79 12.05/3 13.65 13.98 14.87 15.62 Sewerage & Drainage 2.25 2.09 3.32 3.49 3.66 3.84 4.04 4.84 5.81 Roads 0.92 2.26 3.30 3.63 4.00 4.40 4.84 5.32 5.85 Lighting & Electricity 1.20 1.83 2.00 2.10 2.21 2.32 2.43 2.92 3.50 Solid Waste 6.92 6.39 8.46 9.31 10.24/4 11.26 12.39 13.63 15.67 Motor Vehicles 0.00 0.00 1.29 1.42 1.56 1.72 1.89 2.27 2.72 Commercial Services 0.77 0.90 0.73 0.80 0.89 0.98 1.07 1.18 1.30 Education Services 0.00 0.00 2.42 2.66 2.92 3.22 3.54 3.89 4.28 Health Services 2.04 2.03 2.37 2.61 2.87 3.15 3.47 3.82 4.20 Bustee Services 0.00 0.00 0.63 0.66 1.00 1.50 2.00 2.00 2.00 Admin. & Support Services 9.88 9.36 8.57 9.43 10.37/4 11.41 12.55 13.81 15.88 Other 0.58 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Interest 0.10 0.02 0.00 1.34 1.72 2.20 2.67 3.54 4.43 Depreciation 0.00 0.00 0.00 3.15/S 3.15 3.15 3.45 3.45 3.45 Subtotal Revenue Exp. 29.90 32.74 42.05 51.39 56.64 62.80 68.32 75.54 84.71 CptlA/C BO-M-pment Works 0.09 0.01 0.00 0.00 4.66 5.82 6.86 10.48 10.86 Other 0.00 1.24 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Subtotal Capitel Exp. 0.09 1.25 0.00 0.00 4.66 5.82 6.86 10.48 10.86 TOTAL EXENDITURES 29.99 33.99 42.05 51.39 61.30 6e.62 75.18 86.02 95.57 Excess of Income over Exp. 1.80 0.79 6.80 0.00 0.00 0.00 0.00 0.00 0.00 Transfer to Municipal Fund-Revenue Account 0.89 0.02 6.80 0.00 -2.05 -2.05 -2.15 -2.05 -2.05 Transfer to Municipal Fund-Capital Account 0.91 - - - - - - - - Transfer to Sinking Fund 0.77 - - 1.67 1.67 1.67 1.67 1.67 Transfer to Vehicle - - - - 0.38 0.38 0.38 0.38 0.38 Replacement Fund - - - - GOWB Subventions as Percentage of Total Revenue Expenditures 14.98 29.81 30.82 24.09 19.77 18.46 16.47 12.36 9.85 11 Audited. 77 Projected to increase at 15% a year. /3 Projected to increase at approximately 5% a year. 7Z Projected to increase at 10% a year until the last year when 15% projected, when full impact of project will occur. /5 In the absence of a Fixed Asset Register the Depreciation quoted is the Book Depreciation. ource: CMC and IDA estimates. -85- ANNEX 5 Table 5 INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT CALCUTTA MUNICIPAL CORPORATION WATER SUPPLY OPERATIONS: SOURCES AND USES OF FUNDS (Rs lakhs) Actual Estimated Projected 81/2 82/3 83/4 84/5 85/6 86/7 87/8 SOURCES Share of Consolidated 450 451 492 716 794 884 986 Property Tax (25%) Metered ICI consumers 63 69 76 83 92 101 110 (existing) Private Tubewells and Highrise buildings - 5 20 25 30 35 40/1 Metered ICI consumers (additional) - 80 126 135 178 472 790/2 Graduated Rate from domestic users - - 70 168 171 174 178/3 TOTAL Sources 513 605 784 1127 1265 1686 2104 USES Production Costs 480 500 527 553 581 610 650 Distribution Costs 416 437 460 482 487 517 552 Overhead 89 94 99 103 107 112 120 Charge in Lieu of Depreciation 325 325 325 325 325 325 325 Payment for Bulk Supply - 142 218 330 330 360 360 TOTAL USES 1310 1498 1629 1793 1830 1924 2007 SURPLUS (DEFICIT) (797) (893) (845) (666) (565) (258) 97 Sources as % of Tot. Uses 39% 40% 48% 63% 69% 87% 105% /4 reflects proposed metering program. /2 reflects estimated additional users through the proposed consumer survey and net of bad debts at 20%. /3 net of bad debts at @ 10%. -86- ANNEX 5 Table 6 INDIA THID CALCUTTA,URBAN DEVELOPMENT PROJECT CALCUTTA MUNICIPAL CORPORATION CONSUMER SURVEY AND METERING PROGRAM A. CONSUMER SURVEY PROGRAM 1. The following sections of the city have been surveyed by March 31, 1983. a) Manicktalla Section: Wards: 13, 14, 30, 31, 32, 33, 34, 35 (in full) b) Section 3: Wards: 57, 58, 60, 61 (in full) Wards: 59, 62, 66, 67, 68, 23 (in part) 2. The survey of the remainder of the 16 sections will continue from April 1, 1983 and will be completed by March 31, 1984. The objective of the survey is to: (1) identify all ICI consumers who may be metered and (ii) those consumers with above average consumption who will be metered as a priority. B. METERING PROGRAM The following metering program with specific timebound targets, has been agreed to with CMC. Category Nos. Dates ICI 2,200 by June 30, 1983 2,500 July 1, 1983-March 31, 1984 4,000 Annually, until all "large" (minimum) consumers are metered. Production Meters 60 by June 30, 1983 (big tubewell) Zone Meters 2 to be repaired by June 30,1983 (Total 8) 6 place orders (ICB) and install by June 30, 1983 -87- ANNE 5 Table 7 INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT CMWSA - SOURCES AND USES OF FUNDS (OPERATIONS) (Rs in lakhs) Estimated . -------------------Projected------------------ 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 SOURCES (1) Fringe Area Initial Charge (I) 15.00 65.00 78.00 100.00 96.00 68.00 Monthly Fee (F) 2.49 20.45 50.40 103.20 132.00 160.84 TOTAL 17.49 85.45 128.40 203.20 228.00 228.84 (2) Municipalities (A) Industrial Rate (Rs) (R) 10.00 10.00 10.00 10.00 11.00 11.00 Consumption (MGD) (C) 8.00 8.00 11.00 18.80 18.80 18.80 TOTAL 292.00 272.00 401.50 686.20 754.82 754.82 (B) C & I Consumption (MGD)(C) 2.00 3.00 5.50 5.50 5.50 5.50 Rate (Rs) (R) 6.00 6.00 6.00 6.00 6.50 6.50 TOTAL 43.80 65.70 120.45 120.45 130.49 130.49 (3) (A) Bulk to Cal.Corp. Consumption (MGD)(C) 12.00 20.50 30.00 30.00 30.00 30.00 Rate (Re) (R) 3.00 3.00 3.00 3.00 3.50 3.50 TOTAL 142.00 218.00 330.50 330.00 360.00 360.00 (B) Bulk to Municipalities Consumption (C) 3.50 8.50 30.70 30.70 30.70 30.70 Rate (Re) (R) 1.25 1.25 1.25 1.25 1.75 1.75 TOTAL 15.97 34.78 140.07 140.07 196.10 196.10 TOTAL SOURCES 511.26 695.93 1120.92 1479.92 1669.41 1670.525 less Bad Debt (at 15%) <76.69> <104.39> <168.57> <222.00> <250.41> <250.54> NET SOURCES 434.57 591.54 952.35 1257.92 1419.00 1419.71 USES Administrative Function Salaries 120.00 137.00 163.50 180.00 196.00 215.00 Fringe Benefits 3.00 3.42 4.08 4.49 4.89 5.00 Production Function Repair, Replacement, and Regular Maintenance 35.60 49.75 73.45 74.85 84.25 94.00 Chemical Supplies 15.85 27.70 45.80 51.40 53.00 60.00 Distribution Function Energy 112.65 203.30 344.45 385.00 393.93 400.00 Revenue Function Administrative & Other 15.54 18.18 21.82 24.46 27.10 32.00 REPLACEMENT FUND A 308.38 308.38 308.38 308.38 308.38 308.38 INTEREST EXPENSES 40.49 40.49 40.49 40.49 40.49 40.49 TOTAL USES 651.51 788.72 1002.47 1075.57 1108.54 1154.87 NET SURPLUS <DEFICIT> <216.94> <197.18> <50.12> 182.35 310.46 264.84 Sources as a % of Total Uses 67% 75% 95% 117% 128% 123% /I Represents amount appropriated to pay debt service principal to commence 1989/90. -88- ANNEX 5 Table 8 INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT ESTIMATE OF POTENTIAL PROPERTY TAX AND EXPECTED COLLECTION (Rs in lakhs) (Collection Percentage in brackets) HOOGHLY SOUTH CHINSURAH KAIARHATI SUBURBAN Rateable Value Current 68.50 119.35 248.68 1985-86 /1 119.88 208.86 435.19 Assessment Current 16.44 32.56 34.06 1985-86 29.97 52.22 108.80 Total Collection 1980-81 15.44 (29) 26.01 (42) 36.34 (33) 1981-82 15.79 (30) 26.05 (42) 38.27 (33) 1982-83 16.18 (31) 27.35 (42) 37.14 (31) 1983-84 18.28 (32) 31.66 (43) 39.00 (33) 1984-85 19.19 (33) 34.90 (45) 40.95 (34) Collection 1985-86 Arrears 8.00 (20) 8.75 (35) 13.50 (15) Current 17.98 (60) 28.72 (55) 59.84 (55) TOTAL 25.98 (37) 37.47 (48) 73.34 (37) Collection 1986-87 Arrears 10.99 (25) 13.91 (35) 25.09 (20) Current 19.48 (65) 31.33 (60) 65.28 (60) TOTAL 30.45 (41) 45.24 (49) 90.37 (39) Collection 1987-88 Arrears 13.18 (30) 11.99 (35) 35.97 (25) Current 20.98 (70) 33.94 (65) 70.72 (65) TOTAL 34.77 (46) 45.93 (53) 106.69 (42) Collection 1988-89 Arrears 13.91 (35) 14.91 (35) 43.80 (30) Current 22.48 (75) 36.55 (70) 76.16 (70) TOTAL 36.39 (52) 51.46 (54) 119.95 (47) Cellection .1989-90 Arrears 11.59 (35) 14.46 (35) 47.19 (35) Current 22.48 (75) 39.16 (75) 81.60 (75) TOTAL 34.07 (54) 53.62 (57) 128.79 (53) 11 All CMA municipalities except CMC revised their property tax assessment base as of April 1, 1983. However, the GOWB will evaluate the adequacy of these valuations, to be completed by December 31, 1983. In the event GOWE considers the base in any municipality inadequate, it will cause the CVB, to carry out a general revaluation in such municipalities. Therefore, conservatively, it has been estimated that the full impact of a proper assessment base will be realized from the year 1985/86. The rateable value is expected to increase by an average 75% over 1982/83 (current) assessment base. The property tax rate is assessed at 25% of rateable value. INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT ANNUAL 0 & M AND OTHER RECURRING EXPENDITURE (Rs in lakhs) MUNICIPAL BODIES 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 Actual Actual -------------------------------estimated------------------------------ HOOCHLY CHINSURAH: UKTT5ting Assets 42.41 45.14 48.28 51.64 55.23 59.02 62.93 67.13 71.64 76.49 On CUDP Ill Assets: Salary & Wages - - - 1.65 3.84 5.98 6.82 7.12 7.48 7.85 Other recurring - - - 1.11 2.56 3.98 4.55 4.75 5.23 5.75 Interest on Loan - - - 1.73 5.10 9.11 11.79 12.19 0.28 - Loan Repay. (P&I) - - - - - - - - 19.02 19.02 TOTAL 42.21 45.14 48.28 56.13 66.73 78.09 86.09 92.19 103.65 109.11 oa KAMARHATI: On Existing Assets 67.22 70.58 74.11 77.82 82.61 87.79 93.06 98.64 104.56 110.83 On CUBP III Assets: Salary & Wages - - - 4.43 10.78 15.40 18.80 21.34 22.41 23.53 Other recurring - - - 2.96 7.19 10.27 12.54 14.24 15.66 17.23 Interest on Loan - - - 2.44 8.35 14.37 18.77 22.04 1.40 - Loan Repay. (P&I) - - - - - - - 33.70 33.70 TOTAL 67.22 70.58 74.11 87.65 108.93 127.83 143.17 156.26 177.73 185.29 SOUTH SUbURBAN: OT xisting Assets 88.48 95.56 103.21 111.47 120.05 129.22 146.10 157.20 169.30 182.39 On CUDP III Assets: Salary & Wages - - - 4.69 12.11 18.57 20.56 21.84 22.93 24.08 Other recurring - - - 3.13 8.07 12.37 13.70 14.56 16.02 17.62 Interest on Loan - - - 3.91 14.00 25.57 32.61 35.34 1.07 - Loan Repay. (P&I) - - - - - - - - 52.36 52.36 TOTAL 88.48 95.56 103.21 123.20 154.23 185.73 212.97 228.94 261.68 276.45 (ME) - Principal & Interest Amortization. %D nA INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT REVISED GRANT STRUCTURE (Re in lakhs) Total Additional Deficit to Total Deficit Other Share of Revenue Expenditure Expenditure Total be met from Matching as % of Tot. Property Internal Entry Tax Income on Existing due to Expenditure FAM Revenue Grant /2 Rev. Expen. Tax Revenue (Octroi) (1+2+3) Assets CUDP III (5+6) A/C (4-7) (4-7) (8 - 7) % (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) HIooglyAChnsurah /1 4 18.28 4.70 22.86 45.84 51.64 4.49 56.13 -10.29 N/A 18 1984-85 19.19 5.68 26.29 51.16 55.23 11.50 66.13 -14.97 N/A 23 1985-86 25.98 5.18 30.23 61.39 50.02 19.07 78.09 -16.70 N/A 21 1986-87 30.45 5.44 34.76 70.65 62.93 23.16 86.00 -15.44 N/A 18 1987-88 34.77 7.99 39.97 82.73 67.13 25.06 92.19 -9.46 N/A 10 1988-89 36.39 8.71 45.97 91.07 71.64 32.01 103.65 -12.58 N/A 12 1989-90 34.07 9.10 52.87 96.04 76.49 32.62 109.11 -13.07 N/A 12 Kamarhati /1 1983-84 31.66 5.22 45.08 81.96 77.82 9.83 87.65 -5.69 N/A 6 1984-85 34.90 5.48 51.84 92.22 82.61 26.32 108.93 -16.71 N/A 15 1985-86 37.47 5.75 59.62 102.84 87.79 40.04 127.83 -24.99 N/A 24 1986-87 45.24 6.04 68.56 119.84 93.06 50.11 143.17 -23.33 N/A 16 1987-88 45.93 13.35 78.84 138.12 96.64 57.62 154.26 -16.14 N/A 10 1988-89 51.46 14.54 90.67 156.67 104.56 73.17 177.73 -21.06 N/A 12 1989-90 53.62 14.87 104.27 172.76 110.83 74.46 185.29 -12.53 N/A 7 South Suburban /1 1983-84 39.00 22.08 71.35 132.43 111.47 11.73 123.20 N/A 9.23 N/A 10 1984-85 40.95 23.19 82.05 146.19 120.05 34.18 154.23 -8.04 N/A 5 0 1985-86 73.34 24.37 94.36 192.07 129.22 56.51 185.73 N/A 6.34 N/A 1986-87 90.37 25.20 108.51 224.08 146.10 66.87 212.97 N/A 11.11 N/A 1987-88 106.69 30.53 124.79 262.01 157.20 71.74 228.94 N/A 33.07 N/A 1988-89 119.95 32.15 143.51 295.61 169.30 92.38 261.68 N/A 33.93 N/A 1989-90 128.79 33.54 165.04 327.37 182.39 94.06 276.45 N/A 50.92 N/A Note: The above municipalities represent a sample of likely performance rauges by various local bodies. As demonstrated above, those local bodies incurring revenue deficits will gradually decrease their dependence on State Budgetary support relative to the total expenditure requirements. Assumptions: Lolumn (1): Obtained from Table 8, Annex 5 which reflect realistic collection and assessment base targets. Column (2): Based on current trends of concome and likely increases based on the ability of individual local bodies to levy other taxes, licenses and fees. Column (3): Based on current level of total octrol collections by the State, pro rata share of the local bodies based on population and expected annual increase of 15% a year. Column (5): Based on actual levels of expenditure (operations, maintenance and debt service (P1)), increasing at about 10% per year on variable expenses. Also reflected in Table 9. Annex 5. Column (6): Based on actual appraisal estimates of expenditures (operations, maintenance and debt service (P+I)). Also reflected in in Table 9, Annex 5. tD /1 Hooghly Chinsurah (pop. 129,338); Kamarhati (pop. 240,418); South Suburban (pop. 394,594). /2 Matching Grant from FAM Capital Account. Of the 37 municipalities, South Suburban is an exception in terms of its surplus financial position. N/A - Not Applicable -91- ANNEX 5 Table 11 CUDP III - MUNICIPAL DEVELOPMENT PROGRAM (MDP) SUMMARY OF SECTOR INVESTMENTS OVER PROJECT PERIOD (Rs 100000) Total Base Costs ----------------- ------------------- ----- ------------------- (Us$ 33/84 94/85 85/86 86/87 87/89 Rs Million) A. ATER SUPPLY 162.36 191.86 247.39 371.44 386.85 11359.89 14.31 B. DRäNGE 166,16 205.85 246.37 371.84 383.86 1,374.08 14.46 C S-,TTION CEWERAGE 34.59 43.44 52,02 74.02 74.02 278.09 2.93 CEP.VICE PRIVY COHVERInN 42.34 52.93 63.51 95.27 98,79 352.93 3,71 SOLIW t-,,E ANAýElMENT 104t98 61.05 75.61 107.15 113.36 462.14 1.86 TT 18190 157.42 191,15 276.43 286.16 1,093.06 11.51 11 BUSTEE HPROVEMENIT 73.30 91.63 109.95 164.93 171.04 610.95 6.43 z. D PPVD19.64 24.55 29.46 44.19 45.82 163,65 1,72 CREM!RIA 7169 9.62 11,54 17.31 17,95 64.11 0,67 5. TRANEPTTI8N INFR(STRUCTURE PC1MS I ND IG WYS 183.55 229.24 273.99 409.35 4-23.62 11519.74 16,00 5TREET LIGHTING 15.59 19.49 23.38 35.07 34.36 129.08 1.37 "Tvtal ^RASPORfTTp0,4 IFRASTRUCTURE 199,15 248.72 297.37 444.42 159.97 1,649.62 17.36 3. A9RJETS AD COMLUitrY 1LLS 77.05 93.61 115.57 170.66 181.57 638.46 6.72 To~i e ELINE COSTS 887,24 1023.24 11249.79 11861.21 1s933.23 6,953.72 73.20 90.29 99.11 120.99 181.33 187.66 669.39 7.05 Pric Continidencies 38.70 135.24 276,19 570.97 755.70 1,776.91 18.70 ret2 P1OJECT COSTS .1006.24 11257.59 1,645.97 2)613.52 2,876 59 71399,91 98.95 33.00 39.02 50.49 79.35 87.33 289,20 3.04 Fori.n Exchzräe 125.53 161,41 214.33 343.46 377.39 11225.63 12.90 Mzrch 2; 193 16:08 -92- ANNEX 5 Table 12 CUDP III - hUNiCIPnL [VELfMENT PIROGRM (MIP) SUMMARY UF INVESThENTS BY SECTOR (Rs 100000 TRANSPORTATION SAMITATIQN INFRASIRUCTUIRE Phsical MARKETS AND 'Contingencies SERVICE PRIW. SOLID WSTE BUSTEE PARKS R 5ADS AND STREET C0fU11TY .ATER SUPPLY DRAINAGE SEiRASE CONVERSION MMAWEMENT IMPROVEMENT PLAYSROUiDS CREMATORIA RIGHWAYS LIGHTINS60HLL Total Z AHamLL i. 1MVEM0NENT COSTS A. LAND 10.63 8.78 - - 22.36 - - - 10.35 - 86.22 139.34 0.0 0.00 P-ict Centin2encies 2.50 2.04 - - 5.24 - - - 2.43 - 20.62 32.83 0.0 0.00 Su6-Tctz! !MCLUDIG COMTINGENCIES 13.13 10.83 - - 27.60 - - 12.78 - 106.94 171.17 0.0 0.00 B. CIVIL WNS 1j292.75 1,365.29 274.51 352,83 254.60 610.85 163.65 64.11 11484.91 129.88 550.70 6,550.09 10.2 669.39 Phvical Conltirencies 165.53 136.53 41.18 35.28 13.24 61.09 - - 148.49 12.99 55.07 669.39 0.0 0.00 PriCe ContiMdezie 345,84 351.78 72.78 90,99 62,44 157.51 38,36 15.03 3M5.04 33.49 142.00 19695.23 9,3 157.11 S-Total 1NCLUDM5 CONTINGENCIES 11810.11 11853.61 388.46 479.09 330.27 829.44 202.01 79.14 2018.44 176.36 747.77 8,914.70 9.3 826.49 T=e: 54.30 55.61 11.65 14.37 9.91 24.88 6.06 2.37 60.55 5.29 22.43 267.44 9.3 24.79 F-ni9n E::chanle 217.21 222.43 46.62 57.49 39.63 99,53 - 4.75 363.32 31.74 89.73 1,172.46 9.5 111.15 C. '.EHICLES - - - - 128.72 - - - 3.31 - - 132.03 0.0 0.00 Prie Cntjndencie - - - - 30.26 - - - 0.40 - - 30.66 0.0 0.00 Sb-!otil ILCUDIr ONT!ENCIES - - - - 159.98 - - - 3,71 - - 162.69 0.0 0.00 T::es- - - - 14.92 - - - 0.37 - - 15.29 0.0 0.00 Ftiýn- - - - 29.84 - - - 0.50 - - 30.34 4.0 0.00 D. EGLUIPMENT OTHER 50.51 - 3.58 - 56.46 - - - 21.17 1.54 133.26 0.0 0.00 Sub-Tctil E01IPhENT 50.51 - 3.58 - 56.46 - - - 21.17 - 1.54 133.26 0.0 0.00 Priet Cm.tin:2ncies 11.86 0.89 - 2.26 - - - 2.72 - 0.16 18.09 0.0 0.00 Seb-Thtal INCL1JDINS CO4TINGENCIES 62.37 - 4.47 - 58.72 - - - 23,9 - 1.90 151.35 0.0 0.00 T;xes 0.14 - - - 3.74 - - - 2.39 - 0.19 6.46 0.0 0.00 ree E:.chanOe 18.43 - 1.34 - 2.54 - - - 0.33 - Q.19 22.3 0.0 0.00 T^tz! 1N'ESTOENT CQSTS 1,359.89 [b374.08 278.09 352.83 462.14 610.05 163.65 64.11 1,519.74 129.98 639.46 6,053.72 9.6 669.39 Phri1 :tL ts 165.53 136.53 41.19 35.28 13.24 61.09 - - 148.49 12.99 55.07 669.39 0.0 0.00 Pri0 Contm:encLos 260.20 353.83 73.66 90.98 100.19 157.51 30.36 15.03 39.5 33.49 162.98 1,77.81 8.8 157.12 1h1l INCLOIOs CNTq55ENCIES 5,15.62 1.64.43 392.93 479.09 575.57 829.44 202.01 79,14 2,058.11 176.36 56.51 9,399.91 8, e26.49 T:::es 54.45 55.61 11.65 14.37 28.57 24.88 6.06 2.37 63.31 5.29 22.6? 28Q.20 9.6 24179 Foicn E:chZn::e 235.64 222.43 47.96 57.49 72.01 99.53 - 4.75 364.15 31.74 89.92 1,225.63 9.1 111.15 II. PEC'RRENT COSTS T: SELr 5 S 1359.;9 1,37.0 278.9 352.93 462.14 61D.85 163.65 64.11 1,519.74 129.98 638.46 6.953,72 9.6 669,39 Physic1 Cct reneies .165.53 136.53 41.18 35.20 13.24 61.09 - - 148.49 12.99 55.07 669.39 0.0 0.O Piee continecces 360.2C 353.e3 73.66 90.98 100.19 157.51 39.36 15.03 390.5 33.49 102.98 1,776.81 8.8 157.11 T:t Fk oR.£C7 CISTS 1,855.62 1,864.43 392.93 479.09 575.57 829.44 202.01 79.14 2,058.91 176.36 856.51 9,399,91 9.8 826.49 Tz:es 54.45 55.61 11.65 14.37 28.57 24.08 6.06 2.37 63.31 5.29 22.62 289.20 0.6 24,79 F:i1n E::chanie 235.64 222.43 47.96 57.49 72.01 99.53 - 4.75 364.15 31.74 09.92 1,225.63 9.1 111.15 !rch 2r 1903 16:08 -93- ANNEX 5 Table 13 INDIA CUDP III - TRANSMUNICIPAL INFRASTRUCTURE PROJECTS (TRIP) SUMMARY OF SECTOR INVESTMENTS OVER PROJECT PERIOD (Rs 100000) Total Base Costs ----------------- ----------------------------------------- (US$ 83/84 84/85 85/86 86/87 87/88 Rs Million) A. WATER SUPPLY 217.56 260.74 312.37 468.49 487.11 1,746.28 13.38 B. DRAINAGE 53.01 52.36 69.26 100.10 93.40 368.13 3.88 C. SANITATION SEWERAGE 61.72 74.11 105.94 149.18 153.31 544.26 5.73 SOLID WASTE MANAGEMENT 9.39 11.84 14.22 21.33 22.11 78.89 0.83 Sub-Total SANITATION 71.11 85.95 120.16 170.51 175.42 623.15 6.56 D. TRANSPORTATION INFRASTRUCTURE ROADS AND HIGHWAYS 4.86 6.07 7,29 10.93 11.33 40.48 0.43 Sub-Total TRANSPORTATION INFRASTRUCTURE 4.86 6.07 7.29 10.93 11.33 40.48 0.43 E. SHELTER AND AREA DEVELOPMENT 27.49 34.34 40.39 62,01 63.52 227.75 2.40 Total BASELINE COSTS 374.03 439.46 549.46 812.04 830.79 3,005.79 31.64 Phvsical Contingencies 32.23 38.31 49.04 76.12 77.85 273.55 2.88 Price Contingencies 16.25 57.57 120.68 248.27 323.76 766.53 8.07 Total PROJECT COSTS 422.51 535.35 719.19 1,136.43 1,232.40 4,045.87 42.59 Taxes 9.98 13.46 19,10 32.59 35.30 110.43 1.16 Foreign Exchange 58.93 77.91 107.39 176.81 192.02 613.07 6.45 April 19, 1983 13'45 -94- INDIA ANNEX 5 CUDP III - TRANSMUNICIPAL INFRASTRUCTURE PROJECTS (TRIP) Table 14 SUMMARY OF INVESTmENTS BY SECTOR (Rs 100,000) TRANSPORTATION SANITATION INFRASTRUCTURE Physical -------------- - --------- SHELTER AND Contingencies SOLID WASTE ROADS AND AREA ----------- WATER SUPPLY DRAINAGE SEWERAGE MANAGEMENT HIGHWAYS DEVELOPMENT Total % Amount 1. INVESTMENT COSTS A. LAND 18.51 0.68 - 21.83 36.10 76.51 153.63 0.0 0.00 Price Contingencies 0.74 0.03 - 2.07 8.46 9.54 20.84 0.0 0.00 Sub-Total INCLUDING CONTINGENCIES 19.25 0.71 - 23.90 44.56 86.05 174.47 0.0 0.00 B. CIVIL WORKS 1i181.94 366.67 452,99 20.56 - 151.24 21l73.40 12.6 273.55 Physical Contingencies 168.63 36.67 50.05 3.08 - 15.12 273.55 0.0 0.00 Price Contingencies 314.67 91.79 119.89 6.30 - 48.18 580.83 11.2 64.81 Sub-Total INCLUDING CONTINGENCIES 1,665.23 495.13 622.93 29.94 - 214.55 3,027.78 11.2 338.36 Taxes 49.96 14.85 18.69 0.90 - 6.44 90.83 11.2 10.15 Foreign Exchange 299.12 59.42 74.75 3.59 - 25.75 462.63 11.5 53.03 C. VEHICLES - - - 27.50 - - 27,50 0.0 0.00 Price Contingencies - - - 8.10 - - 8.10 0.0 0.00 Sub-Total INCLUDING CONTINGENCIES - - 35.60 - - 35.60 0.0 0.00 Taxes - - - 3.56 - - 3.56 0.0 0.00 Foreign Exchange - - - 7.12 - - 7.12 0.0 0.00 D. EQUIPMENT PLANT 150.83 0.78 91.27 8.50 - - 251.38 0.0 0.00 OTHER 395.00 - - 0.50 - - 395.50 0.0 0.00 Sub-Total EQUIPMENT 545.83 0.78 91.27 9.00 - - 646.88 0.0 0.00 Price Contingencies 131.58 0.18 21.11 2.86 - - 155.73 0.0 0.00 Sub-Total INCLUDING CONTINGENCIES 677.41 0.96 112.38 11.86 - - 802.61 0.0 0.00 Taxes 14.74 0.03 - 1.19 - - 15.95 0.0 0.00 Foreign Exchenge 104.98 0.10 33.71 2.37 - - 141.16 0.0 0.00 E. TECHNICAL ASSISTANCE and STUDIES - - - - 4.38 - 4.38 0.0 0.00 Price Contingencies - - - - 1.03 - 1.03 0.0 0.00 Sub-Total INCLUDING CONTINGENCIES - - - - 5.41 - 5.41 0.0 0.00 Taxes - - - - 0.08 - 0.08 0.0 0.00 Foreign Exchange - - - - 2.16 - 2.16 0.0 0.00 Total INVESTMENT COSTS 1,746.28 368.13 544.26 78.89 40.48 227.75 3,005,79 9.1 273.55 Physical Contingencies 168.63 36.67 50.05 3.08 - 15.12 273.55 0.0 0.00 Price Contingencies 446.98 92.00 141.00 19.33 9.49 57.73 766.53 8.5 64.81 Total INCLUDING CONTINGENCIES 2,361.89 496.80 735.31 101.31 49.97 300.60 4,045.87 8.4 338.36 Taxes 64.69 14.88 18.69 5.64 0.08 6.44 110.43 9.2 10.15 Foreign Exchange 404.10 59.51 108.47 13.09 2.16 25.75 613.07 8.6 53.03 II, RECURRENT COSTS Total BASELINE COSTS 1,746.28 368.13 544.26 78.89 40.48 227.75 3,005.79 9.1 273.55 Phvsical Contingencies 168.63 36.67 50.05 3.08 - 15.12 273.55 0.0 0.00 Price Contingencies 446.98 92.00 141.00 19.33 9.49 57.73 766.53 8.5 64.81 Total PROJECT COSTS 2,361.89 496.80 735.31 101.31 49.97 300.60 4,045.87 8.4 338.36 Taxes 64.69 14.88 18.69 5.64 0.08 6.44 110.43 9.2 10.15 Foreign Exchange 404.10 59.51 108.47 13.09 2.16 25.75 613.07 8.6 53.03 April 19, 1983 13:46 -95- 5 Table 15 INDIA CUDP III - CALCUTTA HOWRAH INVESTMENT PROGRAM (CHIP) SUMMARY OF SECTOR INVESTMENTS OVER PROJECT PERIOD (Rs 100000) Total Base Costs --------- -------------- - ---------- (US- 83/84 84/85 85/86 86/87 87/88 Rs Million) A. UATER SUPPLY 426,80 255.12 255.30 165.18 171.87 1t274.26 13.41 B. DRAINAGE 126.32 99.21 47.64 71.45 74,07 418-.69 4.41 C. SANITATION SEVERAGE 222.08 245.0 297.42 443.16 458.82 1,666.56 17.54 SERVICE PRIVY CONVERSION 20.00 - - - - 20,00 0.21 SOLID WASTE MANAGEMENT 174.77 241,78 256.27 160,60 146.29 979.71 10.31 Sub-Total SANITATION 416.85 486.82 553.70 603.79 - 605.11 2Y666,27 28.07 P. BUSTEE IMPROVEMENT 300.15 283.93 227.14 - - 811.22 8.54 E. TRANSPORTATION INFRASTRUCTURE ROADS AND HICHKAYS 158.45 163*90 195.51 283.19 293.44 1,094.49 11.52 STREET LIGHTING 1.85 2.28 2.78 4.13 4.22 15.25 0.16 Sub-Total TRANSPORTATION INFRASTRUCTURE 160.30 166.17 198.29 287.32 297,66 1,10974 11.68 F. URBAN RENEWAL 57.24 71.99 86.13 129.19 134.57 479.12 5.04 Total BASELINE COSTS 1,487.66 1,363.25 1,368.21 1f256.92 1,233,27 6,759.30 71.15 Physical Contirgencies 131.21 123.21 120.04 105.53 106.87 586.86 6.18 Price Contingencies 64.75 179,12 300,08 380.86 495.32 1Y420.13 14,95 Total PROJECT COSTS 1,683.62 1,665.58 1,788.33 1,74331 1,885.46 8,766.29 92,28 Taxes 50.45 50.54 54.35 60.68 62.22 278.25 2.93 Foreign Exchange 197.23 197.53 218.57 244.80 255.86 1,113.99 11.73 March 7, 1983 16:41 -96- INDIA Table 16 CUllP III - CALCUTTA HOURAH INVESTMENT PROGRAM (CHIP) SUMMART OF INVESTMENTS BY SECTOR (Rs 100,000) TRANSPORTATION SANITATION INFRASTRUCTURE Phusical -------- ..--.--.------ ------- - - - - - Contingencies SERVICE PRIVY SOLID WASTE BUSTEE ROADS AND STREET URPAN ------------- VATER SUPPLY DRAINAGE SEWERAGE CONVERSION MANAGEMENT IMPROVEMENT HIGHWAYS LIGHTING RENEUAL Total Z Amount 1. INVESTMENT COSTS A. LAND 1.09 13.75 1.00 - 59.60 - 143.08 - 8.00 226.52 0.0 0.00 Price Contingencies 0.26 3.22 0.04 - 14.61 - 20.93 - 0,32 39.38 0.0 0.00 Sub-Total INCLUDING CONTINGENCIES 1.35 16.97 1.04 - 74.21 - 164.01 - 8.32 265.90 0.0 0.00 B. CIVIL WORKS 1,229.27 404.94 1,445.10 20.00 252.52 811.22 913.72 15.25 471.12 5563.14 10.1 564.47 Phvsical Contingencies 138.40 43.05 175.13 2.00 25.25 81.12 91.37 1.52 6.63 564.47 0.0 0.00 Price Contingencies 221.31 77.33 371.35 0.88 42.50 101.22 241,41 3.92 113.79 1,173.70 9.3 109.01 Sub-Total INCLUDING CONTINGENCIES 1,588.98 525.32 1,991.57 22.88 320.27 993.56 1,246.50 20.70 591.54 7,301.32 9.2 673.49 Taxes 47.67 15.76 59.75 0.69 9.61 29.81 37.40 0.62 17.75 219.04 9.2 20.20 Foreign Exchange 228.74 63.04 238.99 2.75 38.43 119.23 149.59 2.48 70.99 914.22 9.3 85.40 C. VEHICLES 1.15 - - - 297.95 - - - - 299.10 0.0 0.00 Price Contingencies 0.09 - - - 72.88 - - - - 72.97 0.0 0.00 Sub-Total INCLUDING CONTINGENCIES 1.24 - - - 370.83 - - - - 372,07 0.0 0.00 Taxes 0.12 - - - 37,08 - - - - 37.21 0.0 0.00 Foreign Exchange 0.25 - - - 74.17 - - - - 74.41 0.0 0.00 D. EQUIPMENT PLANT - - 83.35 - 91.36 - 27.53 - - 202.24 0.0 0.00 METERS 8.22 - - - - - - - - 8.22 0.0 0.00 OTHER 11.17 - 16.89 - 262.33 - 3.28 - - 293.67 7.6 22.38 Sub-Total EQUIPMENT 19.39 - 100.24 - 353.69 - 30.81 - - 504.13 4.4 22.38 Physical Contingencies - - - - 22.38 - - - - 22.3e 0.0 0.00 Price Contingencies 3.56 - 26.47 - 56.78 - 7.22 - - 94.03 3.0 2.96 Sub-Total INCLUDING CONTINGENCIES 22.95 - 126.71 - 432.85 - 38.03 - - 620.54 4.1 25.25 Taxes 2.30 - 5.25 - 10.65 - 3.80 - - 22.00 0.0 0.00 Foreign Exchanse 3.02 - 27.51 - 16,73 - 3.80 - - 51.06 0.0 0.00 E. TECHNICAL ASSISTANCE and STUDIES 23.36 - 120.22 - 15.95 - 6.88 - - 166.41 0.0 0.00 Price Contingencies 5.48 - 28.18 - 4.78 - 1.61 - - 40I05 0.0 0.00 Sub-Total INCLUDING CONTINGENCIES 28.84 - 148.40 - 20.73 - 8.49 - - 206.46 0.0 0.00 Foreign Exchange 11.53 - 59.36 - - - 3.40 - - 74.29 0.0 0.00 Tctal INVESTMENT COSTS 1,274.26 418.69 1P666.56 20.00 979.71 811.22 1,094.49 15.25 479.12 6759.30 8.7 586.86 Phvsical Contingencies 138.40 43.05 175.13 2.00 47.63 81.12 91.37 1.52 6.63 586.86 0.0 0.00 Price Contingencies 230.69 80.55 426.04 0.88 191.55 101.22 271.17 3.92 114.11 1,420.13 7.9 111.88 Total INCLUDING CONTINGENCIES 1,643.35 542.29 2p267.72 22.88 1>218.89 993.56 1#457.04 20.70 599.86 8,766.29 8.0 698.73 Taxes 50.09 15.76 65.00 0.69 57.34 29.81 41.20 0.62 17.75 278.25 7.3 20.20 Foreign Exchanfe 243.54 63.04 325.86 2.75 129.33 119.23 156.78 2.48 70.99 1,113.99 7.7 85.40 II. RECURRENT COSTS Total BASELINE COSTS 1,274.26 418.69 1,666.56 20.00 979.71 811.22 1,094.49 15.25 479.12 6,759.30 8.7 586.86 Phsical Contingencies 138.40 43,05 175.13 2.00 47.63 81.12 91.37 1.52 6.63 506.86 0.0 0.00 Price Contingencies 230.69 80.55 426.04 0.88 191.55 101.22 271.17 3.92 114.11 1,420.13 7.9 111.88 Total PROJECT COSTS 1,643.35 542.29 2267.72 22.88 1.218,89 993.56 1,457.04 20.70 599.86 8,766.29 8.0 698.73 Taxes 50.09 15.76 65,00 - 0.69 57.34 29.81 41.20 0.62 17.75 278.25 7.3 20.20 Foreign Exchange 243.54 63.04 325.86 2.75 129.33 119.23 156.78 2.48 70.99 1,113.99 7.7 85.40 March 7, 1983 16:41 -97- ANNEX 5 Table 17 INDIA CUDP III - CMA-WIDE COMPLEMENTARY PROGRAMS (CMACP) SUMMARY OF SECTOR INVESTMENTS OVER PROJECT PERIOD iRs 100000) Total Base Costs ---------------- -------------------------------------- (US$ 83/84 84/85 85/86 86/87 87/88 Rs Million) A. SHELTER AND AREA DEVELOPMENT 865.35 - - - - 865.35 9.11 B. HEALTH 115.36 185.52 174.01 100.16 124.38 699.44 7.36 C. SMALL SCALE ENTREPRENEUR ( SSE ) PROGRAM 37.28 38.08 39-54 47.47 44,47 206.84 2.18 D. PANCHAYAT DEVELOPMENT 157.64 169.18 131.94 198.78 206.45 863.98 9.09 E. TECHNICAL ASSISTANCE AND TRAINING 59.14 85.58 79.05 64.12 43.88 331.77 3.49 Total BASELINE COSTS 1,234.76 478.37 424.55 410.53 419#18 2,967.38 31,24 Ph-sical Contingencies 28.37 35.99 31.79 35.66 37.81 169.61 1.79 Price Contingencies 50.30 60.14 86.40 112.58 142.31 451.73 4,76 Total PROJECT COSTS 1,313.42 574.50 542.73 558.76 599.29 3,588.72 37.78 Taxes 9.48 14.29 15.02 9.71 9.75 58.25 0.61 Foreign Exchange 35.01 45.43 43.82 51.29 48,46 224.00 2.36 April 19, 1983 14:08 -98- INIA ANNEX 5 COP IIu - C"-9DE COMLEMNTRY P0GRM (CM ) Table 18 SIMIMY OF INESTMENTS ly SECTOR (Rs 100ow,00 Phmical SHELTER AN SLL SCALE TEONIICAL Contingencies REA ENINEIMEUR PMICHMYAT ASSISTACE EEOPMI EALTH SSE ) PRORM DEVELOPIIENT M TRAINIM Total I Aount 1. INESTIFT COSTS A. CIVIL IORKS 865.35 168.26 - 863.96 78.50 1,976.09 5.8 115.00 Phnsical Cotningencies - 16.83 - B6.40 11.78 115.00 0.0 0.00 Price Contingencies 34.61 23.46 - 200.66 13.78 272.51 8.1 22.17 Sub-Total CLUIN CONTIMEICIES 899.96 208.54 - 1,151.04 104.05 2,363.60 5.8 137.17 Taxes - 6.26 - 29.98 - 36.24 9.1 3.29 Foreign Exchane. - 25.02 - 119.92 - 144.95 9.1 13.18 B. VEIICLES - 29.38 - - - 29.38 0.0 0.00 Price Contingejus - 3.75 - - - 3.75 0.0 0.00 Sub-Total IELUDING CONTINENCIES - 33.12 - - - 33.12 0.0 0.00 Tas - 3.31 - - - 3.31 0.0 0.00 Foreign Exchanir - 6.62 - - - 6.62 0.0 0.00 C. EWIPIENT OTHER - 154.71 3.27 - 58.76 216.74 0.0 0.00 Sub-Total EQUIPHENT - 154.71 3.27 - 58,76 216.74 0.0 0.00 Price Contingncies - 21.40 0.13 - 9.77 31,30 0.0 0.00 Sub-Total IMDING CONTINENCIES - 176.10 3.40 - 68,53 248.03 0.0 0.00 Taxes - 17.61 - - - 17.61 0.0 0.00 Foreign Exchenwe - - - - 4.14 4.14 0.0 0.00 D. LOMS - - 60,00 - - 60,00 0.0 0.00 Sub-Total INCLUDING COIINME IES - - 60.00 - - 60.00 0.0 0.00 E. TECHNICAL ASSISTANCE and STUDIES - 48.25 6.94 - 79.61 134.80 0.0 0.00 Price Contingencies - 7.94 0.56 - 15.34 23.83 0.0 0.00 Sub-Total INCLUDIM CONTINGENCIES - 56.19 7.50 - 94.95 158.63 0.0 0,00 Taxes - - - - 1.09 1.09 0.0 0.00 Foreign Exchange - - - - 68.28 68.28 0.0 0.00 F. TRAININ - - 4.29 - - 4.29 0.0 0.00 Price Continencies - - 0.52 - - 0.52 0.0 0.00 Sub-Total INCLU11IN CONTIMENCIES - - 4.81 - - 4.81 0.0 0.00 Total IIVESTMENT COSTS 865.35 400.59 74.50 863.98 216.87 2,421.29 4.7 115.00 Phvsical Contingencies - 16.83 - 86.40 11,78 115.00 0.0 0.00 Price Contingencies 34.61 56.54 1.21 200.66 380.8 331,91 6.7 22.17 Total INC.lDING CONTINGENCIES 899.96 473.96 75.70 1.151.04 267.53 2.868.20 4.8 137.17 Taxes - 27.18 - 29.98 1.09 58.25 5.7 3.29 Foreign Excwe - 31.65 - 119.92 72.43 224.00 5.9 13.18 II. RECUiRENT COSTS A. SALARIES , FEES MD ALLOMIRCS - 264.78 129,99 - 114.90 509.66 10.0 50.97 Phvsical Contingencies - 26.40 13.00 - 11.49 50.97 0.0 0.00 Prit? Contindencies - 53.46 29.54 - 27.60 109.60 9.1 9,96 Sub-Total INCLUDIN CONTINGENCIES - 344.71 171.53 - 153.99 670.24 9.1 60.93 D. UEHICLE 0 AND N - 3.98 2.35 - - 6.33 10.0 0.63 Phasical Contingencies - 0.40 0.24 - - 0.63 0.0 0.00 Price Contingencies - 0.07 0.52 - - 1.39 9.1 0.13 Sub-Total INLUDING CONTINGENCIES - 5.25 3.10 - - 8.35 9.1 0.76 C. SUPPLIES MID MISC. MATERIALS - 30.10 - - - 30.10 10.0 3.01 Ph9sical Contingencies - 3.01 - - - 3.01 0.0 0.00 Price Contingencies - 0.83 - - - 8.83 9.1 0.80 Sub-Total INCLUDINB CONTINENCIES - 41.94 - - - 41.94 9.1 3.81 Total RECURRENT COSTS - 29.85 132.34 - 114.90 546.09 10.0 54.61 Phusical Contingencies - 29.89 13.23 - 11.49 54.61 0.0 0.00 Price Contingencies - 63.17 29.06 - 27.60 119.82 9.1 10.89 Total INCLUDINS CONTINGEIES - 391.90 174.63 - 153.99 720.52 9.1 65.50 Total DASELINE COSTS 865.35 699.44 206.84 863.98 331.77 2,967.38 5.7 169.61 Phvsical Contingencies - 46.71 13.23 86.40 23.27 169.61 0.0 0.00 Price Contingencies 34.61 119.71 30.26 200.66 66.48 451.73 7.3 33.06 Total PROJECT COSTS 899.96 865.86 250.34 1,151.04 421.52 35B8.72 5.6 202.67 Taxes - 27.18 - 29.90 1.09 58.25 5.7 3.29 Foreign Exchange - 31.65 - 119.92 72.43 224.00 5.9 13.18 April 19, 1983 14:08 гиtпА CUBP III - TkANSMUNICIPAI. 1NEkA5TRUCTUf�E F'ROJECT5 (TRIP1 TaЫe 201. HAftRANAGAR AAMAfiHAI1 WATEk TkEATиENI PLANT ANIi PkIMARY GkIll Uetailed Cost iaЫe Base Costs Tntals 1псlидцьs Contu��encaes (Rs 100000) tF;s 100000i Рhц, ----------------------------------------------- ---------------------------------------------- Cont. for. Lros�. Sии�тагц Unit 83/84 84/85 В5/8Ь 86/87 В718В Tota1 83/84 841В5 В5/fl6 ВЬ/87 87/88 Tota1 k>te E,.ch. Та:, Rate Account ---- ------- ------- ------- ------- ------- -------- --___-- ------- ------- ------- ------ -----°-- ----- ----- ------- -°---- ---- ------- ------- ------- ------- --°--- -------- ------- ------- ------- ------- ------- -------- ----- ----- ------ ------- I. INVESTMEMi COSTS ------------°--- А, LАир Ма 18.51 - - - - 18.51 19.25 - - - - 19,25 0 0 0 LA В, CIVII 1dORK5 -°--------- и kI5IMG МАIи Unat 10.44 13.04 15.65 2Э.4В 24.35 Bb.96 12,48 16.81 27.63 34.55 37.9В 123.45 0.15 0.1В 0.03 CW I1dTAKE 5TRUCTURES Unit 7.59 9.49 11.39 17,08 17 J2 63.27 9.ОВ 12,23 15.74 25.14 27.Ь3 В9.82 0.15 0.18 0,03 СИ тВЕАТМЕит РЕАит sткистикеs unat 45,ьВ s7.10 Ьв,s2 1о2.7в 1оь,sе зво.ьь s4.ьз 7з.sВ 94,ье 151.2з 166.2s s4о.з7 о,15 0.1В о.оз си PRIMARY GRID У.о 15.50 19.36 23.28 34.93 36.17 129.25 18.54 24,95 32,18 51,39 56,42 1В3.4В 0.15 0,18 0.03 CW 5TAFF OUARTERS Unat 4.91 6.14 7.36 11.05 11.45 40.91 5.62 7,56 9,73 15.55 17.09 55.55 0,1 4.1В 0.03 CW ROAUS Unii 3,93 4.92 5.90 8,85 9,18 32.79 4,50 6,ОЬ 7.80 12.46 13 JO 44.52 0,1 0.18 0,03 CW I MISCELLAME0115 Unat 2.60 3.25 3,90 5.В5 6.07 21.ЬВ 2.9В 4.01 5,16 8,24 9.06 24,44 0.1 0.1В О,б3 СВ � � ------- ------- ------- ------- ------- --- ---- ------- ------- ------- ------- ------- -------- 1 5ub-Tata1 CIVIL aORKS 90.6b 113.30 13д.01 204.02 211.53 155,52 101.83 145,20 18Ь.92 298,5Ь 32В.12 1,066.63 С. EOl1IPMENT PUMPS апд MOTOFS Мо 12.46 15,57 1В,б9 2В,О3 29,07 103.ВЗ 12,96 П.45 224Ь 35>87 39.43 I28,17 б 0.3 0 ЕФ MI$CELLANEOU5 UniC 1.47 24,94 29.40 44.10 47.04 i47.00 1,53 2В.00 35.33 56.43 63,В0 1В5.09 4 0.1 0.03 ЕОО ------- ------- -----° ------- ----°- -------- ---°-- ------- ------- ------- ---�---- -------- 5ub-Tota1 EpUIF'МЕМТ 13.93 40,58 48,09 72,13 7Ь,11 250>ВЗ 14,49 45,45 57.7Ч Ч2,30 I03.23 313.26 ------- ------- ------- ------- ------ -------- ------- ------- ------- ------- ------- -------- Tota1 IkUESTMENT CQSTS 123,09 153.87 Р84.10 27d,PS 2В7.Ь4 1+024.В6 141,57 190.65 244 J1 390.86 431.35 1v399,14 ------- ------- ------- ------- ---..__- ------- ------ ------- °----- ------- ------- -------- ------- ------- ------ ------- -----°- -------- ------- ------- ------- ------ ------- -------- Tota1 bA5ELINE С05Т5 123.09 153.В"7 1В4.14 276,15 287.64 1+024.86 141.57 190.65 244 J1 390.Вб 431.35 1+399.14 ---------------------------------------°----------------------------------------------------------------------------------------------------------------------------- Rггь1 14я 1983 12.32 н а � � н С� г0 �с � � и INDIA CUDP III - TRANSMUNICIPAL INFRASTRUCTURE PROJECTS (TRIP) Table 202, RENOVATION OF SERAMPORE WATER TREATMENT PLANTY AND PRIMARY GRID Detailed Cost Table Base Costs Totals Including Contingencies (Rs 1000DO) (Rs-100000) Phu. --------------------------------------------- --------------------------------------------- Cont. For. Gross Swwary Unit 83/84 84/85 85/86 86/87 87/88 Total 83/84 84/85 85/86 86/87 87/88 Total Rate Exch. Tax Rate Account I. INVESTMENT COSTS ---------------- A. CIVIL WORKS ------------ RISING MAIN Unit 0.48 O 60 0.72 1.08 1.12 4.00 0.57 0.77 0.99 1,59 1.75 5,68 0.15 0.18 0.03 CW INTAKE STRUCTURES Unit 6.00 7.50 9.00 13.50 14-00 50,00 7.18 9.66 12.44 19,86 21.84 70,98 0.15 0.18 0.03 Cv TREATMENT PLANT STRUCTURES Unit 21.90 27.38 32.85 49.28 51.10 182.50 26.19 35.27 45.39 72.51 79.70 259.07 0.15 0.18 0.03 CW STAFF QUARTERS Unit 1,27 1.59 1.91 2.86 2.97 10.60 1.46 1.96 2.52 4,03 4,43 14*39 0.1 0.18 0003 Cv PRIMARY GRID ke 13.42 16.81 20.20 30.23 31.36 112.04 16.05 21.66 27.92 44.49 4B.92 159;04 0.15 0.18 0.03 CW MISCELLANEOUS ks 6,99 8.74 10.49 15.74 16,32 58.29 8.00 10.77 13.87 22.15 24.35 79.14 0.1 0418 0.03 Cu ----- ------- ------- ------- ------- ------- ----- ------- ------- ------- ------- ------- Sub-Total CIVIL WORKS 50.07 62.62 75.17 112.69 116.87 417.42 59.45 $0,11 103.13 164t63 180.98 588.30 B. EQUIPMENT PUMPS AND MOTORS No 5.64 7.05 B.46 12.6? 13.16 47.00 5,87 7.90 10.17 16.24 17.85 58.02 0 0.3 0 EOP MISCELLANEOUS unit 29.76 37.20 44.64 66.96 69.44 248.00 30.95 41.68 53.64 85.68 94.18 306.13 0 0.1 0.03 EGO ----- ------- ------- ------- ------- ------- ----- ------- ------- ------- ------- ------- Sub-Total EQUIPMENT 35.40 44.25 53.10 79.65 B2.60 295.00 36.82 49.58 63.91 101.92 112.03 364.15 ----- ------- ------- ------- ------- ------- ----- ------- ---- : --- ------- ------- ------- Total INVESTMENT COSTS B5.47 106.87 128.27 192.34 i99.47 712.42 %.27 129.69 166,94 266.54 293.01 9S2.45 Total BASELINE COSTS 85.47 106.87 128.27 192.34 199.47 712.42 96.27 129.69 166.94 266,54 293.01 952.45 ---------------------- --------------------------------------------------------------------------------------------------------------------- --------------------- April 19Y,1983 12:32 INDIA CUDP III - CALCUTTA-HOWRAH INVESTMENT PROGRAM (CHIP) Table 302, REMODELLING OF EXISTING MAINS-PHASE I Detailed Cost lable Base Costs Totals Including Cortingencies (Rs 100000) (Rs 100000) Ph'. -------------------------------- - --------------------------------- Cont. For. Gross Sumrs Unit 83/84 84/85 85/86 86/87 87/88 Total 83/84 84/85 85/86 86/87 87/88 Total Rate E'ch, Tax Rate Account I. INVESTMENT COSTS A. LAND Unit 0.13 0.16 0.20 0.29 0.31 1.09 0.14 0.18 0.24 0.38 0.41 1.35 0 0 0 LA B. CIVIL WORKS PRIMARY GRID km 40.03 50.04 60.04 90.07 93.40 333,58 47.88 64.48 82.97 132.53 145.69 473.54 0.15 0.18 0.03 CU MISCELLANEOUS Unit 14.22 17.77 21.32 31.98 33.17 118.46 16.26 21.90 28.18 45.02 49.49 160.85 0.1 0.18 0.03 Cw Sub-Total CIVIL WORKS 54.24 67.81 81.37 122.05 126.57 452.04 64.14 86.38 111.16 177.55 195.17 634.39 C. TECHNICAL ASSISTANCE AND STUDIES SURVEY AND CONSULTANCY Unit 2.80 3.50 4.20 6.31 6.54 23.36 2.92 3.93 5.05 8.07 8.87 28.84 0 0.4 0 TAS Total INVESTMENT COSTS 57-18 71.47 85.77 128.65 133.42 476.49 6719 9049 11645 185.99 204.46 66457 Total BASELINE COSTS 57,18 71.47 85.77 128.65 133.42 476.49 67.19 90.49 116.45 185.99 204,46 664,57 April 19, 1983 12:39 -UD III - 'ALrUTTA-HOWRAH INVESTMENT PROGRAM (CHIP) 'so!- i2l, RECONSTRUCTION OF DURGAPUR BRIDGE 7etailed Cost Table K. e Totals Including Contingencies Rc 1000' Rs 100000) Phs. -C - ------ ..-.-.-___--- Cont. For. Gross Summarv Unit 83/84 84/85 85/86 86/87 87.88 Total 4 )4.3 3E S: 86/37 37/88 Total Rate Exch. Tax Rate Account I. INVESTMENT COSTS A. LAND Unit 3.00 6.00 6.00 - - 15.00 3,12 6.72 Ot21 - - 1 0 0 0 LA B. CIVIL WORKS BRIDGE Unit 15.36 19.20 23.04 34.56 35.84 128.00 17.57 23.66 30.45 48.64 53.47 17,81 0-1 0.12 <03 CW APPROACH BOX VIADUCT Unit 11.71 14,64 17.57 26.35 27.33 97.60 13.40 18.04 23.22 37.09 40.77 132.53 0.1 0.12 0.03 CW APPROACH ROAD JUNCTION AND IMPROVEMENTS Unit 6.37 7.97 9.56 14.34 14.87 53.10 7.29 9.82 12.63 20.18 22.18 72.10 0.1 0.12 0103 CW Sub-Total CIVIL WORKS 33.44 41.81 50.17 75.25 78.04 278.70 38.26 51.53 66.31 105,91 116.43 378.43 C. TECHNICAL ASSISTANCE AND STUDIES SURVEY AND CONSULTANCY Unit 0.27 0.34 0.41 0.61 0.64 2.27 0 28 0.38 0.49 0 78 0.86 2.80 0 0.4 0 TAS Total INVESTMENT COSTS 36.72 48.15 56.57 75.86 78.67 295.97 41.66 58.63 '4.01 106.70 117.29 398.29 Total BASELINE COSTS 36.72 48.15 56.57 75.86 78.67 295,97 41,66 58.63 74.01 106.70 117.29 398,29 April 19. 1983 12:40 INDIA 4 THIRD CALCUTTA URBAN DEVELOPMENT PROJECT MAJOR WATER SUPPLY, DRAINAGE, X> AND SANITATION INVESTMENTS Project Boundary SEWERAGE WORKS cij1 . 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