Document of The World Bank For Official Use Only Report No. P-7007-IN MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$51.5 MILLION TO INDIA FOR A STATES' ROAD INFRASTRUCTURE DEVELOPMENT TECHNICAL ASSISTANCE PROJECT November 11, 1996 Infrastructure and Energy Operations Division Country Department II South Asia Region This document has 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. - 11 - CURRENCY EQUIVALENTS (as of November 1, 1996) Currency Unit = Rupees (Rs) One Rupee = US$0.03 (approx.) US$1.00 = Rs 35.68 WEIGHTS AND MEASURES The metric system is used throughout this report ABBREVIATIONS AND ACRONYMS CAS - Country Assistance Strategy DE - Detailed Engineering DEA - Department of Economic Affairs DPR - Detailed Project Report EA - Environmental Assessment EAP - Environmental Action Plan EC - Empowered Committee GOI - Government of India GPN - General Procurement Notice km - Kilometer MOST - Ministry of Surface Transport PCC - Project Coordinating Consultant PIPF - Project Identification & Preparation Framework PPF - Project Preparation Facility PQ - Prequalification (of contractors) PWD - Public Works Department R&R - Resettlement and Rehabilitation RAP - Rehabilitation Action Plan SG - State Government TA - Technical Assistance FISCAL YEAR April 1 - March 31 Vice President: D. Joseph Wood Director: Heinz Vergin Division Chief: Jean-Francois Bauer Task Manager: Ernst Huning FOR OFFICIAL USE ONLY - 111 - INDIA STATES' ROAD INFRASTRUCTURE DEVELOPMENT TECHNICAL ASSISTANCE PROJECT Table of Contents Page N Loan and Project Summary .................................................iv India's Road Transportation Sector .................. ......................1 Project Objectives....................................................3 Project Description...................................................4 Project Cost and Financing..............................................5 Project Implementation................................................5 Project Sustainability ........ .........................................7 Lessons Learned from Previous Bank Operations..............................7 Rationale for Bank Involvement...........................................8 Actions Agreed/to be Agreed............................................9 Program Objectives and Poverty Categories...................................9 Environmental Aspects................................................10 Participatory Approach................................................10 Project Benefits.....................................................10 Project Ri sks.......................................................12 Recommendations................................................... 13 ATTACHMENTS Attachment 1: Project Identification and Preparation Framework (model) .................... 14 Attachment 2: Initial Proect Funds Allocation................................ 19 Attachment 3: Project Activity Outline.................................... 20 Attachment 4: Project Design Summary...................................21 Attachment 5: Project Performance Indicators...............................24 Attachment 6: Proposed State Highways I (Andhra Pradesh) Project: Public Information Document (PID)...........................27 SCHEDULES A. Estimated Costs and Financing Plan....................................30 B. Procurement and Disbursement....................................... 31 C. Timetable of Key Project Processing Events..............................33 D. IBRD Loans and IDA Credits, and 'India At A Glance'......................34 T document has a resticted distribution and may be used by recipients only in the performance of their officialduties. Its contents may not otherise be disclosed wiLhout World Bank authorization. s -w - iv - INDIA STATES' ROAD INFRASTRUCTURE DEVELOPMENT TECHNICAL ASSISTANCE PROJECT Loan and Project Summary Borrower: India, acting by its President Implementing Agency: Department of Economic Affairs Beneficiaries: State governments and their road management agencies and other road transportation sub-sector stakeholders Poverty Category: Not Applicable Environmental Category: C Loan Amount: US$51.5 million equivalent Terms: LIBOR-based variable lending rate and repayable over twenty years, including a five year grace period Commitment Fee: 0.75 percent on undisbursed loan balances, beginning 60 days after signing, less any waiver. Onlending Terms: Government of India (GOI) to the states; standard terms and conditions applicable to central assistance to states at the time, fully additional to each State's Plan assistance. GOI will bear the foreign exchange and interest rate risks. Project Objectives: To strengthen individual states' capacity for the provision, financing, maintenance and management of road transport infrastructure, and to assist individual states to comprehensively prepare sound road infrastructure investment projects. Project Description: Financing of comprehensive Technical Assistance (TA) through GOI to states for: (i) implementation of sustainable roads sector institutional and financing reforms and (ii) comprehensive preparation of road infrastructure investments. Net Present Value: Not applicable. Risks and Safeguards: Principal risks are poor project implementation and limited implementation of agreed reforms by states. Access to project TA will be conditional on prior State Government decisions and actions on sustainable policy-based reforms in road planning, financing, maintenance and management. Project TA will support the implementation of reforms and the preparation of planned investment projects. Financing Plan: See table in Schedule A. Staff Appraisal Report: Not applicable. Technical Annex Report No. T-7007-IN. 6 MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO INDIA FOR A STATES' ROAD INFRASTRUCTURE DEVELOPMENT TECHNICAL ASSISTANCE PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed loan to India for the equivalent of US$51.5 million to help finance a States' Road Infrastructure Development Technical Assistance project. The loan would be at the Bank's LIBOR-based variable lending rate for single currency loans, with a maturity of 20 years, including five years of grace. The proceeds of the loan would be onlent to India's state governments under the standard terms and conditions applicable to central assistance to the states at the time, fully additional to each State's Plan assistance. The Government of India (GOI) will bear the foreign exchange and interest rate risks. India's Road Transportation Sector 2. A major factor in the long-term prospects for economic growth and social development in India is the inadequate, under-financed and deteriorating road transport infrastructure in the country. The demand in India for intercity land freight and passenger transport services will continue to grow by at least 7 % a year for the foreseeable future. During the last 40 years, the share of goods and passengers being carried by road has steadily and substantially increased, largely at the expense of movement by rail. In India today, approximately 80 % of the total intercity passenger traffic and about 60 % of the total intercity freight traffic is carried by roads. 3. By developing country comparisons, India has a remarkably dense and well-articulated system of national highway, state highway, district and rural road networks. However, rural and lesser district roads comprise the majority of this. The national highway network and the states' major networks comprise only about 8% of the total, yet together they carry about 85% of all road passenger and freight traffic. On these sections, the traffic levels mostly exceed the roads' design specifications, and the resulting congestion and surface deterioration has in many areas reached critical levels. 4. Despite the increasing importance of these national and state road networks in the transport modal split of India, however, the public budget allocations for the capital investment (non-recurrent) and road maintenance (recurrent) needs of major road networks have, both at national and state levels, been decreasing steadily in real terms. The actual funding for road maintenance is presently well below the minimum norms set for the sector by GOI's Finance Commission. Private sector investment in the roads sector in India is not likely to be a major factor in alleviating these financial problems. 5. The demonstrated technical and managerial capacities of the main public agencies responsible at national and state levels for development and maintenance of major roads infrastructure are generally weak, relative to the needs of the sector. Their limited absorptive capacity for investment development and project management is a major constraint on progress in the sector. 6. There is little application of modem network-based planning, rational investment selection and development, or priority-based maintenance programming. The skills and resources for budgeting, financial management, procurement, contract management or works quality control are insufficient and weak. The technical policies and standards applied by these agencies are often out-dated and/or unrealistic, resulting in widespread poor quality in roads design, construction and maintenance and engendering weak structural and operational conditions in many road sections. Typically, the - -2- environmental and social aspects of road projects have also been given only minimal attention, leading to complications during project implementation stages. Many of the Public Works Departments (PWD) handling roads matters still provide many 'in-house' engineering, construction execution and supervision services. There is little effective foreign competition in the sector overall and there has been little incentive for local consultants and contractors to upgrade their project engineering, construction and supervision capacities and technologies, in order to become an efficient, credible alternative to the road agencies' 'in-house' functions. 7. If the gains from India's recent economic liberalization efforts are to stay unimpeded from conditions in the road sector, major sector-wide improvements are needed in: * project preparation and implementation, procurement and contract management capacities and resources; * the planning, technical, administrative and financial policies applied to the development, maintenance and management of road infrastructure, including the associated social and environmental aspects; * the quality and effectiveness of investment planning, preparation, engineering and construction, with wider introduction of international-standard engineering and construction skills and technology; * the public sector financing of road network development and maintenance needs for asset sustainability; * private sector participation in the provision of project engineering, construction and supervision services. 8. India has since 1992 given increasing priority to achieving substantial improvements in infrastructure generally, and in road infrastructure in particular. However, the actual reform efforts in the sector have been few, focused mainly on the provision of physical infrastructure without addressing the associated institutional issues, and of limited impact by insufficient institutional commitment or finances. 9. At the national level, major National Highways road upgrading investments have been taken up by GOI with external assistance for several years. GOI also, in 1995, established the National Highways Authority of India (NHAI) specifically to introduce new engineering, project management and financing approaches into its National Highways strategy. However, at the states' level there are similarly urgent road infrastructure needs, and the center's agencies are, both constitutionally and in terms of relevant capacities, unable to assist the states substantively. Accordingly, GOI has since mid-1993 with Bank support strongly encouraged the State Governments (SG) to individually prepare major state-level road infrastructure investment proposals, aimed directly at meeting external financing requirements, which anticipate the introduction of international expertise and measures for institutional strengthening and reform alongside action on any planned works. 10. The states' proposals mainly involve rehabilitation and widening of existing state highways and major district roads, with minimal land acquisition, social impacts and environmental consequences involved. Each of these proposals is required to be based on an initial state-financed, Bank-guided study of the objective road conditions, traffic densities and road improvement priorities in the SG's major road network, termed a Strategic Options Study (SOS). Two such SG road investment proposals have been -3- under preparation since 1993/94 with assistance from the Bank's Project Preparation Facility (PPF), in Andhra Pradesh (AP) and Haryana. The comprehensive techno-economic, social and environmental project preparations (and their eventual implementation) in both these cases are being supported by the services of internationally-experienced Project Coordinating Consultants (PCC), in lieu of the usual PWD in-house resources. 11. The Project Identification & Preparation Framework (PIPF) which has evolved from Bank experience with the AP and Haryana project preparations has now been refined and communicated to all states, by both GOI and the Bank, as the model framework for preparation actions for state-level road sector investment plans being aimed at possible Bank financing. The current model PIPF is shown at Attachment. This framework comprehensively outlines the objectives underlying the Bank's assistance in this sector, the preliminary requirements each State should meet before project identification and preparation is feasible, and the minimum scope of technical, economic, financial, environmental, social, procurement, project management and institutional matters to be included in preparations for a road infrastructure investment project being aimed at Bank financing. The model PIPF also emphasizes the mutual desirability of integrating many of the various consultancy services required to augment PWD capacities into PCC services. 12. This strategy is directly consistent with the themes of the 'infrastructure' segment of the current Country Assistance Strategy (see paragraph 33 below). Since the main phase of joint GOI/Bank efforts on this strategy commenced in mid- 1994, ten (10) states have already expressed in writing their acceptance of the model PIPF and have completed (or nearly completed) an SOS as the start of their project preparations. Several more states have indicated their firm intentions to proceed on this basis. GOI is committed to all such SG proposals being assisted towards implementation, if external assistance to the states for the major project preparation costs is available. The final financing requirements for implementation of any fully prepared states' road infrastructure investment proposals emerging under this strategy may then be met by either the Bank (with or without co-financiers) and/or various other external assistance sources. Project Objectives 13. The project's overall objective is to strengthen policy-based efforts by individual States towards effective reforms in the provision, financing and maintenance of road infrastructure, while assisting their preparation of high-priority quality road infrastructure investments aimed at Bank financing. The project's TA financing would therefore assist each individual State to: * prepare implementation plans for reforms for major sustainable policy and capacity improvements for the planning, financing, provision, maintenance and management of their road transport infrastructure; * comprehensively prepare major road infrastructure rehabilitation and upgrading investment proposals, aimed at implementation with Bank financing and/or other external assistance; * implement immediate capacity-building measures in each State's roads agency in project planning and management processes, systems and technology, including for improved attention to the needs of the environmental and social impact aspects of projects; -4- * develop appropriate measures for the improved facilitation of private sector roads investment; and * implement measures aimed at increased privatization of roads engineering, construction and supervision services and road maintenance operations in the sector. Project Description 14. The project would, over five years, finance TA activities in three project components: * Project Preparation and Implementation Support (76.4% of the project cost) will cover: (i) preparation by individual States of planned road infrastructure investments to Bank appraisal standards in respect of techno-economic feasibility studies, all preliminary engineering and design, environmental and social requirements, and the final engineering, procurement and works bidding preparations for at least 25% of the intended project works, using internationally-experienced PCC-style services; (ii) early upgrading of the investment planning, procurement, project implementation and management capacities and resources of each State's PWD/roads agency for the needs of their investment preparations; (iii) transfer and application (primarily via PCC services during investment preparations and capacity-building activities) of relevant international 'best practice' methods, skills and technology; and (iv) facilitation of workshops, training programs, pilot studies and/or demonstration projects to improve the PWD/road agency's effectiveness at project implementation and management. * Policy Support and Institutional Development (22.9% of the project cost' ) will cover, in parallel with any TA support to an individual State's road infrastructure investment preparations: (i) development and implementation of medium-to-longer term plans for sustainable roads sector policy, organizational, financial and management reforms, and implementation of early catalytic measures based on those plans, to improve/strengthen the states' planning, financing, asset development and maintenance capacities and performance in this sector, including (as required) via improved facilitation of private sector investment/participation; Excluding taxes, duties and/or levies. 2 Excluding taxes, duties and/or levies. -5- (ii) studies and preparation of action plans for implementation of sustainable improvements to road maintenance policy, standards, practices and performance, and for implementation of higher sustainable funding of road maintenance; and (iii) development of effective plans for increased out-sourcing of the PWD/road agency's project design and engineering, construction and works supervision services requirements. Project Management (0.7% of the project cost3) will finance consultancy services to assist GOI's project implementing agency, the Department of Economic Affairs (DEA), throughout the project. Project Cost and Financing 15. The project cost is estimated at US$68.0 million equivalent, including physical and price contingencies, with a foreign exchange component of US$45.5 million equivalent (65.9%) and with taxes and duties estimated at about US$15.0 million equivalent. The total financing required is US$68.0 million, of which the Bank would finance US$51.5 million equivalent (97.6% of the foreign exchange costs and 94.6% of local costs, net of taxes and duties). Retroactive financing limited to US$5.0 million (or 9.7 % of the total loan) for eligible payments made from July 1, 1996 would be provided, where early procurement of consultancy services has been essential to enable the more well-prepared states to initiate and/or extend the implementation of their investment preparations planned for TA financing under this project, following Bank review and agreement, where this is not already covered by ongoing PPF assistance. A Special Account would be established in the amount of US$3.0 million equivalent. 16. A breakdown of project costs and the financing plan are shown in Schedule A. Amounts and methods of procurement and of disbursements, and the disbursement schedule are shown in Schedule B. A timetable of key project processing events and the status of Bank Group operations in India are presented in Schedules C and D, respectively. At Attachment 2 is an outline of the initial financial allocations proposed under the project to individual states following their completion of a Participation Agreement with GOI. Project Implementation 17. The project implementing agency will be the Department of Economic Affairs (DEA). However, much of the project will be executed by each individual State through their PWD or roads agency, who will interact directly with the Bank in relation to all TA-supported preparation and implementation activities. 18. The DEA role in this project will be limited to essentially 'process management' in the implementation of this project, facilitating and monitoring each state's access to the project's TA financing and maintaining overall coordination of the project. Specific project-funded consultancy resources will be implemented to assist DEA in this, given DEA's functional and resource constraints for this type of responsibility. Even with such resources, the limitations on the DEA's role will necessarily lead to a much larger than usual requirement for Bank involvement in the preparations for each State's institutional and investment plans and endeavours, at least during the early phases of this project. 3 Excluding taxes, duties and/or levies. -6- 19. The availability of GOI financial assistance to states for TA under this project will be subject to each State's responsiveness to specific entry conditions. This will promote a 'self-selection' approach among the states, in terms of their readiness to embrace action on the necessary reforms. The principal entry conditions for any SG seeking access to the project's TA financing will be (i) the SG's outline in writing of their intentions for reform of the key institutional and financing aspects of their road infrastructure sector, inclusive of substantive up-front actions, to the satisfaction of GOI and the Bank, and (ii) the SG's acceptance of the model PIPF as the action framework for their project preparation proposals. Three States have now already met these entry conditions to the satisfaction of GOI and the Bank. 20. Once an individual SG has satisfied these entry conditions, they will be required to enter into a Participation Agreement with GOI, framing the conditions and purposes of the TA to be made available and the obligations being accepted by the State. The delineation of Bank/GOI/State interactions and responsibilities in this context, the requirement for Bank review of TA proposals developed by the State and the procurement, disbursement and audit requirements will be specified in these Participation Agreements. The Agreements will inter alia also include (i) the SG's acceptance of the model PIPF as the basic framework for its TA-supported proposals and (ii) the SG's commitment to application (as adapted) of the 'model Terms of Reference (TOR)' for the consultancy services needed to implement (e.g.) the PCC component of such TA. 21. These 'model TOR' have been developed by the Bank with the more advanced states over 1994/96 as an accompaniment to and extension of the technical requirements expressed in the model PIPF, and are now also being made accessible to the general public through the Bank's Public Information Center, suitably annotated to indicate its status as a 'living document'. The 'model TOR' will at least cover the respective fields of full project feasibility analysis; preliminary and detailed engineering design; procurement preparations; Environmental Assessment and Environmental Action Plan (EAP) preparation; Social Impact assessment and Resettlement Action Plan (RAP) preparation. The requirements of the Bank's Operational Directives 4.01, 4.20 and 4.30 will be fully addressed therein. Each participating State will be expected to adapt these 'model TOR' to their particular circumstances and the resultant State-specific TOR will be subject to Bank review before implementation. 22. To strengthen their project implementation and execution capacity, each participating State will be required from the outset to establish a multi-agency Secretary-level Empowered Committee (EC) to oversee, direct and monitor the program of TA-supported activities to be financed under this project, and to establish dedicated Project Management resources within the PWD/road agency to manage the TA- supported activities. In addition, the PCC consultancy services to be procured by each SG with TA financing will include a component for early capacity-building support to the PWD/roads agency in the implementation of all the investment preparations in accordance with the Bank's requirements. 23. The main indicators for monitoring of the project's overall performance will be the number and quality of outputs from the participating states' TA-supported activities under this project's two main components, where such outputs are satisfactorily completed as the basis for implementation of specific sector institutional, financing and investment proposals, and key measures of procurement and contract management improvements (indicators are outlined in more detail in Attachment 5). 24. The TA facility would be available until December 31, 2001. Annual joint GOI/Bank reviews, undertaken with the participating states' awareness from the end of 1998 onwards, of states' utilization of their initial allocation under the project will determine variations to those allocation levels. These annual reviews would ensure that: (i) a State's continued access to TA financing under the project is dependent -7- on that State's disbursements performance against its initial allocation; (ii) the states that perform strongly in utilizing their TA finances for project preparations may be granted an increased allocation for demonstrable needs when funds available from other states' allocations are identified; and (iii) the participating States will recognize that ongoing access to the remaining TA resources will be on a 'first come, first served' basis. 25. All procurement under the project will be carried out in accordance with Bank procedures. Except as specified, all procurement of works will be done in accordance with international competitive bidding, and all procurement of consultancy services will be done in accordance with Bank guidelines. Project Sustainability 26. In the roads sector, the states' capacities, policies and finances are inadequate to meet the increasing road transportation demands on their road networks and the financing required to maintain and upgrade those networks. To achieve more effective sector conditions, any interventions in the sector must also simultaneously and urgently address both the institutional and financing circumstances. 27. The project aims to assist State Governments to improve their approach, policies and capacities in the sector, towards more realistic and effective road infrastructure management with involvement of a broader range of sector participants and stakeholders. The demonstration effects from sound, TA- financed preparation in various states of major investment projects with international private sector 'best practice' expertise is expected to reinforce support for the institutional strengthening and reform initiatives being taken. Such reinforcement should be increased during implementation of subsequent Bank financing of the planned road infrastructure investment projects, where the reform and institutional strengthening action plans to be developed with TA support under this project would then move into full implementation. 28. The intended TA-supported improvements to the states' road maintenance strategy and its financing will aim at improving overall asset and network sustainability. This will be pursued through improvements to technical and operational approaches, policy changes based on cost-effectiveness and performance standards, systematic and rational road condition monitoring, and priority-based maintenance programming. Action implemented in these areas should produce improved 'on the ground' results and clear efficiency gains from maintenance budget outlays. 29. Given the GOI's commitment to the combined 'sector reforms and investment' strategy underlying this TA project, successful implementation by even 5 - 6 states of major substantive measures on sector reforms is expected to motivate most other states onto similar actions during and beyond this project. Lessons Learned from Previous Bank Operations 30. After a break in Bank lending in the road sector in India between the late 1960's and the early 1980's, there have been three Bank projects in national and state level major road infrastructure investments there. Among these, the First National Highway Project (Loan 2534-IN), originally in the amount of US$200 million, closed on December 31, 1994 with only US$103.4 million disbursed. The Second National Highway Project (Loan 3470 / Credit 2365-IN) and the States' Road Project (Loan 2994 /Credit 1959-IN) are ongoing since their implementation in 1993 and 1988, respectively. 31. Poor project preparation, weak implementation plans and capacities, poor inter-agency coordination, poor assimilation of Bank procurement requirements, poor contract management skills and limited focus on the financial and economic consequences of poor project implementation, at both the national and state level, have all been major constraints on progress in these projects. 32. From these experiences, the lessons for future operations in this sector are: (a) proposed investments must be prepared more comprehensively prior to project appraisal, particularly in respect of the engineering, social, environmental and institutional aspects; (b) any required strengthening of basic institutional capacities for effective project management, procurement and contract administration should be fully underway before the major phases of project implementation; (c) all key pre-implementation and procurement actions for contract initiation on the initial batch of proposed civil works should be resolved by project effectiveness; (d) international 'best practice' engineering services and higher-capacity construction technology and practices should be more widely adopted for road works in high-traffic- density corridors; (e) project implementation arrangements must make earlier and explicit provision for institutional strengthening, particularly in project and contract management; and (f) the public sector roads-financing capacity for maintenance and capital works should be substantially increased to achieve road network asset sustainability. 33. Overall, action on the undoubtedly major needs in India for investment in road infrastructure rehabilitation and upgradation must be matched with action on substantive policy-based sector reforms, for any serious prospects of sustainability in those investments and to establish the necessary wider institutional conditions for effective road infrastructure provision, financing and maintenance in future. Rationale for Bank Involvement 34. The project is consistent with both the Country Assistance Strategy (CAS) presented to the Board on June 20, 1995, and the update thereto presented to the Board on September 5, 1996. The CAS (inter alia) emphasizes: (a) the need for continued reform in key sectors of India's economy, particularly infrastructure; (b) the implementation of sustainable state-level reforms, particularly aimed at the improvement of states' finances and of their institutional performance in most sectors; and (c) substantially increased infrastructure development and investment. The project directly supports the CAS objectives by combining Bank and GOI support for acceleration of the states' preparation of sound road infrastructure investments with Bank and GOI support for the states' development of sustainable reforms in their policies, technical and institutional capacities and financing -9- strategies in the roads sector. An early illustration of this approach in practice is given in the Project Information Document for the proposed AP State Highway Project at Attachment 6. Actions Agreed 35. Agreement has been reached during negotiations with the Government of India that it will: * require any State intending to participate in this project, as the principal condition for their eligibility for TA financing under the project, to: (i) outline in writing their decisions and action on policy-based reforms in key institutional and financing aspects of their road sector, to the satisfaction of GOI and the Bank; (ii) advise their acceptance of the model PIPF as the framework for any TA-supported project preparations, and (iii) enter into a Participation Agreement with GOI as a condition for disbursements under this TA project for such State; * on-lend the proceeds of the Bank loan to any participating State at the standard terms of central assistance to the states; * through DEA, by April 30, 1997, implement consultancy services to provide 'process management' support to DEA's project implementation role, and in particular to monitor the project in line with implementation and supervision plans acceptable to the Bank; * ensure the provision to the Bank of quarterly and annual progress reports tracking the implementation of the project in terms of physical, procurement and disbursement milestones and agreed project monitoring indicators, in a suitable standard format; * ensure the initiation, maintenance and periodic auditing of a system of separate accounts, satisfactory to the Bank, for the funds that would be disbursed under this project; * require all States to implement, as a further condition of their eligibility for TA financing under the project, a suitable Empowered Committee for the direction, monitoring and guidance of all aspects of the TA-supported implementation of institutional and financing reforms and measures and of investment preparation activities; * carry out annual reviews of per-State allocation levels under the project, aimed at recommendations for adjustment(s) on the grounds of disbursement performance and/or documented needs, commencing no later than December 15, 1998; and * carry out a Mid-term Review of the project no later than June 30, 1999. Program Objectives and Poverty Categories 36. The proposed project falls directly into the program categories of economic management (public sector reform), environmentally sustainable development and private sector development. There is no direct contribution to poverty alleviation under this project and only indirect benefits to the poor would arise from the expected improvements to access for non-motorized transport which are to be included in each State's preparations for any road infrastructure investment proposals. However, the state-level road infrastructure investments and road sector institutional and financing reforms expected to be prepared and (in key initial respects) implemented with the project's TA financing would make diffuse 'downstream' contributions to each participating State's capacity for poverty alleviation. -10- 37. The implementation of the planned road sector reforms should progressively generate widespread economic benefits through reduction in the road infrastructure bottlenecks to each State's economic activity and growth. The improved effectiveness of and efficiency gains from the states' road maintenance outlays should result in greater value for money from and gradual easing of the relative burden of these public sector outlays on the states' finances, with indirect benefits for the states' poor. Also, through the subsequent implementation of Resettlement Action Plans (RAPs) and Indigenous Peoples Development Plans (IPDPs) prepared with TA financing under this project, the circumstances of Project Affected People along the 'corridors of impact' of any planned road investments (a significant proportion of whom are poor and/or local 'tribals') should progressively improve. Environmental Aspects 38. The proposed TA loan would itself have no direct environmental impacts or consequences. However, the project's financing will be applied to the development of Environmental Assessments (EAs) and EAPs satisfactory to the Bank for future SG road infrastructure investment projects, and to the enhancement of each SG's capacity for effective monitoring and management of environmental needs and issues in the road transportation sector. In the process of engineering planning and design for each State's planned road infrastructure investments, specific provision is to be made for the needs of non- motorized transport, which is a major road traffic factor in India. The 'model TOR' to be applied (as adapted) by each State in project preparations will inter alia also require direct attention to opportunities for positive environmental improvements allied to any planned road infrastructure investments. Participatory Approach 39. Given the aim of providing GOI with a states-oriented TA financing facility, the development of this project has not involved general public participation. The processes of investment preparation and sector improvements to be assisted by the project's TA resources would, however, be characterized by various forms of participatory and consultative measures, including some novel to the sector at present. 40. Road infrastructure in India has traditionally been managed by government entities within the framework of the mainstream democratic political process, with few additional participatory mechanisms or direct stakeholder consultations being regarded as necessary. The investment project preparations and sector reform activities to be supported with TA financing under this project would, however, in each State be expected to involve active information dissemination and consultations with road transport sector stakeholders and road users on planning aspects, about the sources of adequate sustainable roads financing in future, and on key aspects of sector institutional changes and their implications. Specific consultation and participatory processes would also be implemented in the development of EAPs, RAPs and (where necessary) IPDPs as part of any TA-supported investment preparations by the participating states. Project Benefits 41. The main benefits of this project are: Project Preparation and Implementation Support: (i) The comprehensive development by individual SGs of priority road investment proposals comprising technical, economic, social, environmental and capacity-building preparations should subsequently ensure more efficient implementation, better road engineering quality and improved sustainability of planned project investments, which in turn should ensure (a) earlier availability of major economic and operational - 11 - benefits to road transport users and (b) reduced long-term outlays for the states (see paragraph 40, below); (ii) The project will facilitate GOI's support to states in comprehensive reforms for sustainability in the roads sector, emphasizing improved sector capabilities in planning, financing, maintenance and management as well as more efficient preparation and provision of urgently needed state-level road infrastructure; (iii) There should be considerable 'downstream' gains to India's transport sector, through improved road network management and maintenance, leading to improved operational conditions, progressively lower direct demands on state budgets and (for users) reductions in vehicle operating costs and journey times; and (iv) The investment preparations will include direct positive attention to the social and environmental aspects of all proposed works and on the capacity-building needs of the project executing agencies in these respects, with positive longer term impacts on the expertise and orientation of the affected state entities. Policy Support and Institutional Development: (i) The improved technical and managerial capacities of states' road agencies as managers of the road sector, particularly in more effective investment planning and roads financing, more efficient projects management and improved road network maintenance, should result in direct economic benefits to the sector via improved road asset performance, greater results from investment financing and maintenance outlays, and lower future funding pressures on states' budgets for recurrent road network needs; (ii) The participating states' road agencies and their main private sector counterparts, in undertaking the reform plans and processes and simultaneously managing the planned road investment preparations, should become more effective stakeholders and change agents in India's road transport sector; and (iii) The greater focus on road-related environment and social issues planned in the states' institutional capacities for management of their road infrastructure responsibilities should improve (a) the consideration of these aspects of sector activities and (b) the quality of interactions with user groups and NGOs. 42. The states' investment proposals involving upgrading and rehabilitation of existing high-density road corridors are expected to cost in the range of US$150 - 350 million each, based on preliminary estimates already available in many cases and on the Bank's direct experience with AP (estimated project cost US$350 million) and Haryana (estimated project cost US$150 million). Feasibility studies have shown excellent economic viability - very strong NPVs (at a discount rate of 20%) and estimated EIRR's ranging from 20% up to 80%. About 5-6 of the initial SG road infrastructure investment proposals are expected to satisfactorily 'graduate' beyond Bank project appraisal as candidates for Bank lending, given this project's TA support. The amount of TA financing expected to be involved in each case is approximately 1% of the estimated cost of the planned investment project, yet the benefits of this TA outlay through greater investment quality and greater implementation efficiency in the execution of the planned project should far outweigh the TA's costs. - 12 - 43. Without the supportive interventions associated with this project's TA financing and its targeting of comprehensive, integrated strengthening of the states' roads maintenance, financing and management capacity, the states will face a continued rapid deterioration of their road transport infrastructure leading to higher road transport costs, diverse growing economic disadvantages, expensive ongoing and growing inefficiencies in their sector management. Particularly in the road maintenance field, this will perpetuate the current trend of high costs, low works quality, high asset deterioration and poor productivity from their significant staffing strengths. Without the Bank's assistance under this project, the various states' planned investment programs would be curtailed and/or would languish, with major long-term disbenefits to road transport providers and users. Overall, the benefits of the proposed TA financing and its generation of expected economic returns via future road infrastructure investment projects compare very favorably to the alternate prospects of the 'do nothing' scenario of no investment outlays and no sector reforms. Project Risks 44. The main risks facing this project are: * that an insufficient number of states may choose to access this TA facility after their consideration of the conditions for participation; * the weakening of individual states' commitment to their initial decisions on necessary road sector reforms and their implementation, should a Bank commitment to finance the road infrastructure investments being prepared under this project not materialize after the states have made substantial progress on agreed project preparations; * the limited experience of individual states with procurement and management of externally- financed international consultants under World Bank requirements; * the limited financial strength of some states relative to the eventual financial obligations they will face from a proposed investment project; and * the problematical responses of some states in India to the implications of the Bank's Environment and Social Impact (R&R) requirements in investment project preparations. 45. The first of these is rated a medium-level risk. Representatives of all states have been fully informed by GOI of these requirements, with generally positive responses. Three major states already have substantively met the specified entry requirements, to the satisfaction of both GOI and the Bank., and several major states have also signaled their firm intentions to follow suit in this respect. The demonstration effects of the advantages gained by states who are the earliest to participate in this strategy should also influence the other states. Overall, however, this project should prove an effective and catalytic sector investment by GOI if at least six (6) states complete TA-supported implementation of sector reforms alongside comprehensive investment preparations which meet Bank financing requirements. 46. The possible weakening in individual states' commitment is also rated a medium-level risk. This risk will, however, be addressed in the action plans flowing from any State's initial policy-based sector reform decisions, which are expected to favour early TA-supported implementation of measures having a strong catalytic effect on the organization(s), policies and resources involved, and to emphasize action to ensure wide participation by the road agency's staff and road user/stakeholder groups. Ultimately, however, it is likely that the states (and GOI) will require firm ongoing indications of the - 13 - Bank's commitment to financing satisfactorily prepared road infrastructure investment preparations to themselves stay committed to proceeding with implementation of the envisaged sector reforms and institutional actions. 47. The other areas of risks, all considered also to be medium level in nature, should be mitigated progressively by impacts of various approaches and measures to be implemented under this project. These include the promotion of the model PIPF as a standard action framework, the standardization of project preparation documentation via adaptations of the 'model TOR' for the main TA-supported activities, and the mounting by the states (via their PCC resources and/or with GOI's or the Bank's direct assistance) of specific workshops on, e.g., project procurement and contract management, FIDIC conditions for contract supervision, project-based participative/consultative/information strategies for road infrastructure projects, 'best practice' in roads sector management and reform strategies, and on environment and social impact issues). For project environmental and social impact /R&R matters, such workshops would also involve participation by relevant Indian agencies, other external donors and NGOs active in this sector. Each State's initiation of specific Project Management resources and their Empowered Committees for their TA-supported activities should also strengthen the impetus of that State's planning for institutional interventions and investment preparation endeavours, once underway. 48. There is also a medium-to-high level risk in this project's implementation arising from some states' more constrained financial circumstances and their inability or reluctance to make adequate forward budgetary provision for the financial obligations foreseeable in the event of their road investment preparations achieving Bank financing. This will be an unavoidable source of 'self-selection' of realistic future State investment project candidates for Bank lending among the states under the project. However, progressive Bank interactions with each participating State will address this from the earliest stages, to ensure that their sector strengthening and road investment plans match their financial capacities, economic constraints and budgetary priorities, as soon as reliable project component and cost estimates are available. Recommendations 49. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank and recommend that the Executive Directors approve it. James D. Wolfensohn President by Gautam S. Kaji Washington, D.C. November 11, 1996 -14- Attachment 1 INDIA STATES' ROAD INFRASTRUCTURE DEVELOPMENT TECHNICAL ASSISTANCE PROJECT MODEL PROJECT IDENTIFICATION AND PREPARATION FRAMEWORK (PIPF) Objective and Strategy 1. The overall objective of the Bank's assistance is to improve the beneficiary State's road transport infrastructure (physical network, operations and management) in a sustainable manner, by efficiently removing road transport bottlenecks, lowering transport costs and improving the maintenance of road network assets. 2. The overall strategy identified between the Government of India (GOI) and the Bank for effective project-based lending assistance to States in this context, is to strengthen and shift onto a sound business management approach, the provision, management and maintenance of road infrastructure, through: - emphasis on overall network planning, with priority for the needs of high-traffic- density routes/corridors; - achievement of effective sustainable funding and management of road maintenance; - introduction of international road construction methods, quality and management standards; - demonstration of the effectiveness of independent technical consultants and contractors in project implementation, and of competition in the delivery of road infrastructure services; - implementation of sound high-return road infrastructure investments; - comprehensive preparations for management of the environmental implications and the social impacts of proposed road investments; and - strengthening and modernization of State institutional arrangements, policies, resources and capacities for the management of the sector. Identification, Preparation and Implementation Requirements 3. To be confident of achieving efficient, timely and sound project implementation, the preparation of proposals for any Bank-assisted state-level road infrastructure investment projects in India will normally need to comprise the following key elements: - 15- (a) Strategic Options Study The first substantive action, to be initiated by the individual State, will be a preliminary network-wide Strategic Options Study (SOS), typically using road and traffic network data already available to the State. This SOS is aimed at (i) providing an objective basis for and strengthening the selection rationale for the likely roads investment priorities; (ii) confirming the State's road funding history, and (iii) outlining the State's intended project financing strategy. The SOS should include verified data on relevant State-wide population size, composition and distribution; any protected 'cultural heritage' assets, and sensitive environmental features which should all be taken into account in planning for the proposed project. (b) Feasibility Study(-ies) Full economic and technical feasibility studies on the priority investments identified via the Strategic Options Study. The feasibility studies will also include a state-wide social and environmental screening, inclusive of the preparation and review of full strip maps of the proposed road sections; maps of environmentally sensitive areas such as reserves, forests, national parks, wetlands and/or sensitive habitats; and census-based population distribution maps/data indicating relevant population intensities and locations of indigenous peoples' groups near the project sites. (c) Preliminary Engineering and Environmental & Social Impact Assessments Preparation of preliminary engineering design standards for the full length of the proposed road investments under the project, to be ready by Bank appraisal stage, as a basis for and coordinated with preparation of an appropriate Environmental Assessment and preparations for any necessary Social Impact (Resettlement & Rehabilitation) action plans (see (d) and (e) immediately below). (d) Environment Assessment A Sectoral Environmental Assessment (SEA) will be required for all of the civil works components of the project, in parallel with the project feasibility studies; followed by a full Environmental Assessment (EA) wherever sensitive issues have been identified in the SEA, prior to Bank appraisal. The preparation of the SEA and EA must be in full compliance with the World Bank's Operational Directive (OD) 4.01. (e) Sdcial Impact / Resettlement & Rehabilitation (R & R) The preparation of (i) a preliminary screening of likely Project Affected Persons (PAP) and structures along the proposed project road sections; (ii) a full Baseline Socio-Economic- Survey (BSES) for the identified impact areas of all proposed works, and (iii) a satisfactory draft R&R policy-based Resettlement Action Plan (RAP) which has been endorsed by the State Government, will each be required as part of project preparations, as per the Bank's OD 4.30 on Involuntary Resettlement. In addition, if indigenous people ('tribals') are likely to be sited within the impact areas, a full Indigenous Peoples Development Plan (IPDP) will need to be prepared, in accordance with the Bank's OD 4.20 on Indigenous Peoples. In all projects, the principle of linking completion of resettlement with any order to proceed with civil works shall apply. No physical work shall be undertaken on any stretch of road before resettlement has been undertaken in accordance with a framework of entitlements, which shall be agreed upon before appraisal. This framework shall describe categories of - 16 - losses, definitions of affected and entitled persons, their entitlements in the form of compensation or other assistance, and the institutional framework for implementing a Resettlement Action Plan (RAP). It shall also contain mechanisms for public participation and local consultation, for monitoring and evaluation, and for coordination among the project authorities and the various local jurisdictions involved in the road infrastructure project. This framework must conform to OD 4.30 and shall apply for all components of the project, also in cases where a phased approach is being used. Based on this framework, a draft RAP shall be prepared before the project's appraisal. It shall contain an estimate of likely affected persons as described below, as well as a budget and a schedule of implementation, and other details as described in the applicable Terms of Reference (TOR). The draft RAP shall be finalized after detailed designs are completed and exact impacts and numbers of affected persons are known, based on one or a combination of two scenarios: (i) Where the alignment is known, a full census of all likely PAPs must be included in the RAP. Detailed engineering designs must be available for at least 25% of the project roads, and preliminary design must be completed for the remaining 75% of the project roads, to identify PAPs within the entire corridor of impact. Once designs are finalized, the RAP shall be modified to incorporate any changes in impacts on PAPs, or their numbers. (ii) Where the full alignment is not known before project appraisal, a phased approach shall be used. Preliminary screening shall be undertaken before determining the alignment, and likely social impacts and losses of assets shall be weighed along with financial, technical, environmental and other screening criteria. Once that has been done, the RAP must be updated to incorporate the new information. (f) Final Engineering for Project Appraisal Requirements Preparation before the time of Bank project appraisal of a representative sample (in terms of different types and settings) of at least 25% of the total length of proposed project road investments to detailed engineering standard. At this stage, the planned civil works should also be arranged into sufficiently large contract 'packages' to attract international as well as domestic contractors with larger-scale high-quality road construction experience. (g) Institutional Strengthening As an integral part of the overall project preparations, prior to Bank appraisal, this will require the preparation of essential non-capital components aimed directly at sustainable enhancements to the State's capacity for effective road infrastructure management and financing, via (inter alia): (i) action for early strengthening of the State's capacity to manage the proposed project and ensure timely implementation through a review of procurement decision-making procedures, provision of appropriate training and upgraded resources, appropriate Technical Assistance (TA), and early establishment of a dedicated agency unit (e.g., Project Management Unit) to manage the proposed project. - 17- (ii) preparation (or updating) of a State transport sector strategy, covering the main physical, operational, financial and policy aspects of the major transport modes over the next 5-10 years (subject to the quality of the available data and indicators), including a particular focus on the outlook for the road transport sub- sector in this context and the realistic financing strategy(-ies) for both ongoing road maintenance and road infrastructure investment priorities. (iii) review of the State's future financial and organizational requirements for more effective management of road infrastructure development and maintenance in a transport-oriented context, resulting in the preparation of specific time-bound action plans for regulatory/policy, organizational and financing improvements, inclusive of: - indicators for improved road agency and sector performance; - State-level policy/regulatory measures to improve the efficiency of road transport and of the management of road infrastructure; - measures for more effective facilitation of private sector investment and participation in the provision and management of road infrastructure; and - specifications for an effective framework for consultation with public and private sector 'stakeholder' representatives on road infrastructure plans and priorities. (iv) training and staff development action to re-orient and enhance the institutional capabilities of the State agency(-ies) and key private sector participants concerned with the provision and maintenance of road infrastructure in the State; and (v) comprehensive improvement of relevant budgeting, programming, financial and contract management, project management and monitoring/reporting systems, skills and practices, to ensure sustainability of the proposed project's benefits. (h) Project Implementation Supervision The implementation of all civil works under the project, implemented once the project has been approved by the Bank's Board, will require the services of independent supervision consultants engaged by the Borrower and appointed with full powers as the Engineer as per FIDIC conditions. Financing and Procurement Aspects of Project Preparation 4. The initial production of an SOS which satisfactorily meets the aims and purposes described at para. 3 (a) above, will be each individual State's responsibility. The costs of any consultancy services engaged by the State for this purpose should normally also be met by the State concerned from its own finances. 5. For the action at stages (b), (c), (d), (e) and (f) above, the State should secure the services of internationally-experienced Project Coordination Consultants (PCC) to manage and coordinate the - 18- feasibility studies, other techno-economic, environmental and social preparations, preliminary and final engineering of the proposed project, resulting in the preparation of a project package suitable for Bank appraisal, as well as subsequently assisting the State with the project's implementation and supervision stages. 6. The costs of such PCC services for effective project preparation action up to the stage of Bank appraisal will be substantial (typically in the range of US $1.5 -3.5 million, depending on project size/complexity). The likely services for subsequent PCC services, beyond Bank appraisal, e.g. for stage (h) above, cannot be confirmed until the outcome of preparations for Bank appraisal is known. 7. The cost of the separate technical and professional services likely to be required for preparation of assessments, policy measures, action plans, etc., for the Sector Institutional and Financing Reforms/ Strengthening component(s) outlined at stage (g) above, can only be separately determined once the specific features of each State's sector circumstances and proposals are fully resolved. 8. Procurement action for all civil works funded with Bank assistance under any resultant investment project will be in strict accordance with World Bank International Competitive Bidding (ICB) and/or National Competitive Bidding (NCB) procedures. The procurement of both civil works and consultants' services will use the India-specific version of the Bank's Standard Bid Documents as promulgated by the Government of India (GOI), and where appropriate, the standard 'pre-qualification' documentation also promulgated by GOI for all externally-assisted projects. - 19 - Attachment 2 INDIA STATES' ROAD INFRASTRUCTURE DEVELOPMENT: TECHNICAL ASSISTANCE PROJECT Initial Project Funds Allocation* (US$ million equivalent) (state) Project prep'n. & Policy supp't. Project Total & impl'n. supp't. & inst'l. devel't. mgt. Andhra Pradesh 3.00 0.70 3.70 Bihar ** Goa ** Gujarat 3.50 0.70 4.20 Haryana 1.50 0.70 2.20 Karnataka 2.00 0.70 2.70 Kerala ** Maharashtra 2.50 0.70 3.20 Mahdya Pradesh 2.50 0.70 3.20 Orissa 2.50 1.00 3.50 Punjab 3.50 0.70 4.20 Rajasthan 3.50 0.70 4.20 Tamil Nadu 3.50 1.00 4.50 (& Pondicherry) Uttar Pradesh 3.00 0.70 3.70 West Bengal 2.50 1.00 3.50 Special Category 4.00 1.15 5.00 States * ** Unallocated 3.00 1.85 4.70 GOI Project -- -- 0.35 0.35 Implementation Total 40.50 12.15 0.35 53.00 * Excluding in-India taxes on consultants' fees, etc. ** No proposal has yet been indicated by these states *** States acknowledged by GOI as, due to their weak economic base, warranting up to 90% annual Budget assistance from GOI (Arunchal Pradesh, Assam, Himachal Pradesh, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura) NOTE: (i) TA financing assistance up to the above indicated amounts will be made available by GOI to the respective States progressively, once they have met the conditions for participation in the Project; (ii) A cap of US$5.5 million will normally apply to a State's cumulative access to TA financing under the project; (iii) Utilization of Loan funds will proceed on the 'first come, first served' principle at all times. INDIA STATES' ROAD INFRASTRUCTURE DEVELOPMENT: TECHNICAL ASSISTANCE PROJECT Project Activity Outline State Governments' Acceptance of Strategy and Outline of Policy-based Reforms DEA/SG finalize Participation AgreementSGetbihsml-ancEpord leading to allocation of funds I-D'Cmite(C WB reviewsTOR for main 'reforms'of Projec TA components ~~~~~~~SG commissions studies of Policy, FinancingCoriangosuttsevcs(Q Organizational, and Maintenance Reforms and outlines Public Information/Consultation Action PCcmltsfaiiiysuyrpr WB revews Poicy/Fiancing/Maintnanceto be taken laigt ia Gslcino rjc od reform recommendations i i Decisions by SG on financial/organizational pees iomentS and policy recommendations of studies includingscengsDN enacdudngfrmaneanepCodtin CosuT sevcsIPC PCC copetaes drfesbty stu reportdrf rle a d t o S e syle n o f p r o j e c t r o a d s Loaaed in(s) fectio ns e maintenance f reforms nd instiutionalstrength ningImPC a s eeningsme t cton WB reviews bddafets N/Q and RAPare proposalsnt WSG tclarance e ropOE ore EIAt R&/A oictakg leasCCtoiaieRPbsdo 25% sample ofpoet odf reformws ndoistittioa strenghenin E DE and preliminary designs for other 75% 0 Bard Presentation of proposed : FSta FligwaysProjet Bid and Award (minimum 25% of works) r Proposed State Highways Project Loan(s) Effectiveness *Action on remaining 75% DE follows. INDIA STATES' ROAD INFRASTRUCTURE DEVELOPMENT TECHNICAL ASSISTANCE PROJECT PROJECT DESIGN SUMMARY Narrative Summary Key Performance Indicators Monitoring and Supervision Critical Assumptions and Risks 1. CAS Objective: 1. Promote state-level reforms in road 1.1 Adoption by several states of appropriate 1.1.1. Status reports on DEA and Bank policy 1. Sector reforms will lead to infrastructure sector and assist reform and investment strategies in road dialogue with the states. improved use of public increased sector investment. infrastructure sector. 1.1.2 Number of states who complete resources and improved Participating Agreements under this project. provision and sustainability of states' road infrastructure. 2. Project Development Objectives 2.1 Support reforms to planning, 2.1. Reform plans established, initiating policy 2.1. Progress reports by States, DEA and Bank 2.1 Reforms will lead to financing, provision, maintenance and actions taken and improved maintenance on status of reforms implementation. sustained improvements in - management of road transport strategy, organizational and financing states in key sector capacities. infrastructure by states' road agencies. frameworks being implemented by states. 2.2 Support comprehensive 2.2 Pipeline of viable states' road infrastructure 2.2 Progress reports from states and DEA. 2.2 Investment project preparation of major road investment projects fully prepared to Bank preparation assistance will infrastructure investment proposals for lending requirements ready for and/or being achieve timely works implementation with Bank financing, implemented. implementation. aimed at improved efficiency of states' road transport network. 2.3 Assist states towards increased 2.3 Implementation by states of external services 2.3 Reports from states on implementation 2.3 States' action on 'out- privatization of roads engineering, for preparation of Bank-assisted projects. status of PCC services, and from states/DEA on sourcing' will (i) be construction, works supervision and Policies favoring substantial 'out-sourcing' of policies' impacts on PWD functions and implemented by affected t maintenance services in the sector. design, construction, supervision and procurements. agencies and (ii) lead to maintenance by their PWD/road agencies upgradation of comparable implemented by states. and cost-effective private sector resources. Narrative Summary Key Performance Indicators Monitoring and Supervision Critical Assumptions and Risks 3. Project Outputs 3.1 States implement sustainable road 3.1 At least 6 states implement reform 3.1 States' Empowered Committees (ECs) 3.1 States will maintain sector reform and 'institutional measures/plans, inclusive of any necessary state monitoring reports, State Government/Bank political commitment to strengthening' strategies. legislative actions, and enact policy measures to status report on overall reforms implementation, follow-through reform improve facilitation of private sector investment. actions. 3.2 States formulate and initiate 3.2 Increase in long-term maintenance funding 3.2 PCCs' project progress reports and ECs' 3.2 States and main sector major sustainable improvements in levels, increase in quantity of priority monitoring reports, plus State Governments' stakeholders will support (i) financing and performance of road maintenance works performed, and improved status reviews, additional levies/taxes for network maintenance. road maintenance 'input/output' and quality roads-specific funding and (ii) outcomes, in at least 6 states. Action plans rational prioritization of launched in 6 states for sustainable, dedicated maintenance programs. road funding mechanisms. 3.3 States prepare major investment 3.3 At least 6 states' road investment proposals 33 Progress reports by Cs and DEA/Bank 3.3 States will (i) apply project proposals to meet all Bank satisfy' Bank appraisal and achieve Bank lending status report on projec. appraisals and Board PCCs effectively, and (ii) appraisal/mlending requirements, ready 'effectiveness' by the project's end, presentations. implement Bank's EA and for implementation. R&R project requirements. 3.4 States implement major and 3.4 Implementation of PCC services (with 3.4 PCC project progress reports, monitoring 3.4 PCC firms and the private effective 'out-sourcing' to private 'skills/technology transfer' components) in at reports by ECs and Bank/ State Government sector will deliver sound cost- sector by PWD/road agencies of 'in least 6 states, and substantive 'out-sourcing' reviews of 'out-sourcing' effectiveness, effective resources for road house' project engineering, works policy measures implemented in at least 6 states. agencies' needs. execution and maintenance services. 4. Project Components 4.1 TA for Engineering, Economics, 4.1 Feasibility studies, preliminary works 4.1 PCC reports, monitoring reports from 4.1 and 4.2 States will (i) Environment and Social (R&R) pre- designs, detailed engineering packages, sectoral states' ECs, PDAT reports on PCC contract manage TA and PCC services investment project preparations by EAs and RAPs each completed on schedule and awards status and overall Bank status reports. effectively; (ii) promptly states. to Bank specifications by at least 6 states. initiate dedicated Project Management resources; (iii) 4.2 TA for (i) states' priority needs in 4.2 Action plans established and/or being 4.2 States' ECs' reports on PCC programs, ensure available funds for capacity-building/training in project implemented in at least 6 states. Delivery of monitoring by DEA and Bank reviews of contract obligations; and a 0 planning and management; specified PCC 'skills/technology transfer' strategies and implementation. (iv) implement effective procurement, contract and financial services completed in at least 6 states. Empowered Committees t management; and (ECs) to steer TA and project (ii) transfer of 'best practice' skills, actions. methods and/or technology to road agencies and participating local industry. Narrative Summary Key Performance Indicators Monitoring and Supervision Critical Assumptions and Risks 4. Project Components (cont'd.) 4.3 TA for states' development of 4.3.1 Detailed action plans, endorsed by State 4.3.1 and 4.3.2 States' ECs monitoring reports, 4.3 States' agencies and effective medium-term action plans Governments and satisfactory to the Bank, DEA multi-state status reports and Bank review sector stakeholders will for policy, legal, structural, undergoing implementation in at least 6 states. of states' project status. support reform strategy for organizational, staffing and/or improved network conditions, resource improvements for sustainable 4.3.2 Network-based planning introduced in at sector services and overall road sector management reforms in least 6 states. asset management. planning, financing, development and maintenance of network assets, 4.3.3 Revised private sector investment policies 4.3.3 Monitoring reports by ECs, State including facilitation of private sector implemented and positive investment results Government and Bank reviews of policy actions investment, resulting in shift of road demonstrated in at least 4 states. and impact. agencies' role from provider to manager of road infrastructure for the state. 4.4 TA for (i) states' studies and 4.4 Completed studies and endorsed action plans 4 4 Monitoring reports by ECs, 4.4 States will resist political development of action plans for for technical, operational and managerial reforms Ltus reviews by the Bank and overall project pressures (i) for construction sustainable improvements to road for implementation in at least 6 states, and monitoring reports by DEA. funding priority versus maintenance policy and practices; initiation of revised long-term funding maintenance and (ii) from and (ii) states' implementation of arrangements / mechanisms in those tates. vested interests for constraints higher sustainable funding for road on rational maintenance maintenance. priorities. 4.5 Procurement of priority 4.5 Procurement actions completed satisfactorily 4.5 PCC progress reports, PDAT reports on 4.5 States will promptly equipment and technology to improve and equipment4systems commissioned in at least status of procurement actions, and ECs identify and process essential project procurement, financial and 6 states. monitoring reports. procurements. contracts management and overall road network management capacity. 4.6 Investment in minor civil works 4.6 Works completed and pre-investment study, 4.6 PCC progress reports, PDAT reviews of 4.6 States' PCCs will for pre-investment pilot study, testing and/or demonstration objectives for procurement status, ECs' monitoring reports efficiently prepare and 0=r demonstration and/or testing purposes. project preparations met in at least 2 states. and Bank reviews, implement proposals and impact INDIA: STATES' ROAD INFRASTRUCTURE DEVELOPMENT TECHNICAL ASSISTANCE PROJECT Project Performance Monitoring Indicators Components Inputs Monitoring Indicators Means of AssCutions EvaluationAsupin Development Objective I : Support reforms to planning, financing, provision, maintenance and management of road infrastructure by States' road agencies. TA for review of - Number of states that initiate Study reports issued, States will resist Development of action plans for sustainable maintenance and complete TA-supported monitoring reports by domestic pressures improvements in road maintenance standards, policy and studies on maintenance reforms ECs and status reviews for construction practices * expected in at least 3 states at by the Bank funding priority Vs the end of 24 months after project maintenance start and in at least 6 states at project end Implementation of higher sustainable TA for review of long- -Number of states that initiate and States' ECs monitoring States will resist funding for road maintenance term funding needs, complete TA-supported studies reports and Bank review pressures from vested means and for on road maintenance reforms of states' project status interests for implementation of -Number of states that adopt constraints on rational decisions action plans to reduce shortfall of maintenance priorities maintenance funds * expected in at least 3 states at the end of 24 months after project start and in at least 6 states at project end Development of effective medium-term TA for review of - Number of states that initiate States' ECs monitoring States' agencies and action plans for policy, legal, structural, institutional needs, and complete TA-supported reports and Bank review sector stakeholders organizational, staffing and/or resource options and resource studies to develop institutional of states' project status will support reform improvements for sustainable road sector requirements for reform measures strategy for improved management reforms in planning, financing, future effectiveness -Number of states that adopt an network conditions, development and maintenance of network and for action plan for institutional sector services and assets implementation of reform/strengthening, inclusive of overall asset initiating measures introduction of network-based management roads planning * expected in at least 3 states at the end of 24 months after project start and in at least 6 states at project ending Components Inputs Monitoring Indicators Means of Assumtions Evaluation Development Objective 2 : Support preparation of major road infrastructure investment proposals for Bank financing, aimed at improved efficiency of states' road network. Engineering, Economic, Environment and TA to undertake - Number of States that have PCC reports, monitoring States'will (i) manage Social (R&R) pre-investment project feasibility studies, contracted PCC reports from states' TA and PCC services preparations by states preliminary works - Number of feasibility studies, ECs, and overall Bank effectively; (ii) initiate designs, detailed detailed engineering components, status reports dedicated Project engineering RAPs and EAs completed Management packages, sectoral -Number of Projects appraised resources promptly; EAs and RAPs -Number of projects approved (iii) ensure available * completion of al/the above funds for contract expected in at least 3 states at the obligations; and (iv) end of 24 months after project implement effective start and in at least 6 states at Empowered project end Committees (ECs) to -Km of roads for which detailed sn engineering (DE) studies actions completed * at least 3000 km DE expected by project end Assistance with (i) priority needs in capacity- (i) TA to improve - Number of States that have States' ECs reports on building/training in project planning and PWDs resources and contracted PCC services with relevant PCC programs, management; procurement, contract and skills for project training/development/assistance PCC progress reports financial management; and (ii) transfer of needs components and Bank reviews of 'best practice' skills, methods and/or (ii) Training and * expected in at/east 3 states at strategies and impacts technology to road agencies and development via PCC the end of 24 months after project participating local industry services start and in at/least 6 states at (iii) TA to identify, project end pWDsuresore and e- Timeliness of contract implement priority equipment and - Timeliness of procurement tranin/deelomen /asitac events Rate of utilization of TA fundse 2 Aeaenumber of days between submission of claims and payment, for all relevant claims in the reporting period, relative to a target of not more than 45 days. SAggregate days behind or ahead of procurement schedule, averaged over all procurement actions; target on schedule. - 26 - Components Inputs Monitoring Indicators Means of Crmtical Evaluation Assumptions Pre-investment pilot study, demonstration TA to identify, - Number of TA proposals for PCC progress reports, States' will efficiently and/or testing of methods, technologies develop and minor demonstration works ECs' monitoring reports prepare and and/or concepts to be integrated in project implement minor civil implemented and Bank reviews implement proposals preparations works - Number and impact of post- with PCC assistance demonstration reports submitted * satisfactory implementation expected in at least I state at the end of 24 months after project start and in at least 2 states at project end Development Objective 3: Assist States towards increased privatization of roads engineering construction, works supervision and maintenance services in the sector. ON (i) TA for review of - Number of states that initiate Monitoring reports by States' decisions on Facilitation of (i) measures for private institutional needs, TA-supported studies on relevant ECs, State Government role shift in sector sector investment, and of (ii) shift of road options and resource reforms and implement and Bank reviews of agencies will be agencies' role from provider to manager of requirements to substantive "out-sourcing" policy policy actions and implemented by those road infrastructure for the state change the sectoral measures impact agencies and private role of road agencies * expected in at least 3 states at sector will deliver (ii)TA to develop the end of 24 months after project sound cost-effective appropriate start and in at least 6 states at resources for policy/administrative project end agencies'future measures for private - Number of states that adopt needs. sector investment in plans for improved facilitation of Private sector roads private sector roads investment investment capacity * expected in at least 2 states at will be mobilized once the end of 24 months after project start and in at least 4 states at a p :3 project end _t Lnl - 27 - Attachment 6 PROJECT INFORMATION DOCUMENT Country INDIA Project Name Andhra Pradesh State Highway Project Region South Asia Sector Road Transport Project ID IN PA 9995 Borrower Government of India Implementing Agency Roads & Buildings Department (RBD) Government of Andhra Pradesh Hyderabad - 500 022, India Contact: Principal Secretary Transport, Roads & Buildings Telephone: 91-40-234-591 Fax: 91-40-393-197 Date Prepared October 1996 Projected Appraisal Date December 1996 Projected Board Date March 1997 1. Country and Sector Background 1.1 At national and state levels, the transport scene in India is characterized by the growing importance of road transport. The demand for intercity freight transport in India is expected to double every 12 years while the demand for passenger transport is expected to double every 8-9 years. The share of total demand going to roads in India is now about 60 percent of freight and 85 percent of passenger traffic, with the railroads carrying the balance. 1.2 Since 1950, the core system of paved National roads and State roads (State Highways and state Major District Roads) has expanded over seven-fold, from about 19,800 km to about 156,000 km, yet comprised only 2% and 20% respectively of all roads in the 1990 national road inventory. In traffic terms, however, the National network carries about 35 % of all road traffic while the State network carries about 60 %, leaving 5 percent for the rural road network. The rapid expansion of the network, although achieving the political and social objectives of national connectivity and rural access, was only made possible by spreading resources over a great deal of single-lane (3.75 m wide) and intermediate-lane (5.5 m) carriageway roads with thin pavements. India's arterial road system is now highly congested and of poor riding quality, causing high vehicle operating costs and low quality services for users. 1.3 A declining share for road investments in Plan funding allocations is in large part responsible for this situation. However, at least equally serious for road programs are the absorptive capacity and implementation constraints the sector agencies such the state Public Works Departments (PWDs). Sector reforms are needed to foster introduction of high- quality engineering services and technologically advanced road construction practices capable of delivering cost- effective, high-quality road infrastructure on schedule, and to foster sound, systematic road network maintenance policies to maximize road asset life. Some of India's states (led by Andhra Pradesh, Haryana and Rajasthan) have now, with -28- national government support, endorsed such reforms in their context for implementation in conjunction with major road upgrading proposals involving the Bank's assistance. 1.4 The State of Andhra Pradesh with a population of approximately 70 million and an area of 275,000 square km is both the fifth most populous and fifth largest State of the Union. The highway network of the State consists of a total of 138,000 km of highways of which 2,950 km are classified as National Highways (NH), 8,750 km as State Highways (SH), and 32,650 as Major District Roads (MDR). Even though the SH/MDR network carries over 60% of the State's traffic, 53% of SH and nearly 90% of MDRs are still single lane. Vehicle registrations have increased by approximately 16% per annum during the last five years and traffic is projected to grow at least at 7-8% per annum for the foreseeable future. This indicates that for many of the road links, congestion is already a serious problem. 2. Project Objectives. The objectives of the project will be to: (a) promote a more rational and efficient approach to road investment planning, management and maintenance at the state level; (b) improve the GOAP's institutional capabilities in the sector; (c) improve longer-term resource mobilization in the sector to ensure financial sustainability of the State's SH/MDR network; (d) upgrade the capabilities of the private engineering and construction industry to meet growing demand for high quality highways, engineering and construction services; and (e) improve the riding quality and capacity of selected congested segments of the SH/MDR network to reduce vehicle operating costs, travel-time, accidents and pollution. 3. Project Description. The proposed project would principally consist of: (a) civil works for widening and rehabilitation of about 1100 km of state highways; (b) financing, during the project period, of a declining share of road maintenance needs; (c) technical assistance for updating and expanding a pavement management system for state roads; (d) technical assistance for reforming and institutional strengthening of the State's road transport agencies and sustainable financing of road maintenance; and (e) consulting services for project engineering design, monitoring and coordination of implementation, and for supervision of civil works. 4. Project Cost and Financing. The total project cost including contingencies and taxes is estimated at approximately US$ 350 million, which will finance the widening, strengthening and/or rehabilitation of up to 1400 km of major roads, necessary consultancy and supervision services, strengthened maintenance of Andhra Pradesh's major road network, and institutional strengthening measures. The actual project amount is subject to further review at appraisal. The World Bank will finance 70% of the estimated final total project cost with a IBRD loan of approximately US$ 254 million and the Government of Andhra Pradesh will meet the 30% counterpart funding. 5. Project Implementation. The proposed project would be implemented by the Government of Andhra Pradesh through its Roads and Buildings Department (RBD), with the comprehensive assistance of Project Coordinating Consultants (PCC) funded under the project. 6. Lessons from Previous Operations. The project implementation record of the sector has been mixed, with poor performance most often attributable to: (i) inadequate pre-qualification standards for contractors; (ii) weak project implementation and management capacities for complex civil works contracts; (iii) ineffectuality of contract performance provisions; (iv) shortage of competent mechanized road construction contractors; (v) the Bank's logistical difficulties in supervising multi-state projects; (vi) facilitation delays in land acquisition and clearance of obstructions from project roadways; (vii) poor quality of project surveys and designs; and (viii) limited assimilation by borrowers of agreed Bank procurement rules. 7. Project Sustainability. This will be addressed at two complementary levels. The project works being implemented with the PCC services will entail internationally-proven engineering standards and practices. A progressive skills transfer program for RBD staff is to be provided, and various forms of technical assistance will target the RBD's skills and systems needs to achieve more effective technical and operational management. The quality of the project road works should themselves ensure road performance and durability considerably exceeding current norms. The longer-term sustainability of the project benefits would be ensured through: (i) strengthened processes for improved road maintenance planning and execution; (ii) the re-orientation of the RBD's roads functions increasingly involving private sector project engineering, construction and supervision services; and (iii) associated institution building measures to strengthen the organizational, policy and financial dimensions of road infrastructure management in Andhra Pradesh. - 29 - 8. Poverty Category. This project is not directly aimed at poverty alleviation, although it will also produce distributed benefits progressively in that context. 9. Environmental and Social Impact. A sector-level Environment Assessment will be completed before Bank appraisal of the project, with provision for more detailed assessment if necessary. Minimum adverse environmental impacts are expected during construction operations and from the road works, as the construction of any new roads is not envisaged. All project works will be limited to the strengthening, widening and/or improvement of road pavements and shoulders within the existing right of way, minimizing the need for land acquisition and the involuntary resettlement and rehabilitation (R&R) of people en route. Where R&R aspects arise, this will be surveyed beforehand and comprehensively addressed in accordance with the relevant Bank guidelines. Beneficial environmental impacts are expected due to the improved engineering of roads leading to decreased traffic congestion, lower noise levels and improved safety. 10. Project Benefits & Project Risks. The main direct benefits expected from this project will be (i) greater efficiency in transport operations on the State's road network; (ii) more effective management and maintenance of the major road network by Andhra Pradesh authorities; (iii) enhanced road planning, financing, investment and implementation capacity in relevant State entities, and (iv) assimilation of modem high-quality road engineering and construction methods and capabilities by the PWD and local industry. The risks to the project relate directly to: (i) the State's ongoing commitment during project preparation and implementation to Bank lending conditions and requirements; (ii) the effectiveness of the state's financial planning to provide for counterpart funding obligations; (iii) the state's actions to implement appropriate long-term funding levels as required for effective road network maintenance and management; and (iv) inaction on the necessary institutional reforms and strengthening measures. Managing Division: Energy & Infrastructure Operations Division South Asia Country Department II Task Manager: Chris Hoban Telephone No. : 202-473-3783 Contact Point: Public Information Center The World Bank 1818 H Street, N.W. Washington, D.C. 20433 Telephone: 202-458-5454 Fax: 202-522-1500 Note: This is information based on an evolving project. Certain components may not necessarily be included in the final project. - 30 - ScheduleA INDIA STATE'S ROAD INFRASTRUCTURE DEVELOPMENT TECHNICAL ASSISTANCE PROJECT ESTIMATED COSTS AND FINANCING PLAN (US$ million equivalent) Items Local Foreign Total ESTIMATED PROJECT COSTS Consultant Services and Training, 5.0 42.8 47.8 (including Project Management costs) Civil Works 2.0 2.2 4.2 Equipment 0.5 0.5 1.0 Taxes and Duties 15.0 0.0 15.0 Total Project Cost 22.5 45.5 68.0 Total Financing Required 22.5 45.5 68.0 FINANCING PLAN IBRD 7.1 44.4 51.5 State Governments 14.9 1.1 17.0 Government of India 0.5 0.0 0.5 Total 22.5 45.5 68.0 a/ Tax of about 30 percent is payable in India for foreign currency payments to foreign consultants/firms. -31 - Schedule B Page 1 of 2 INDIA STATE'S ROAD INFRASTRUCTURE DEVELOPMENT TECHNICAL ASSISTANCE PROJECT Procurement and Disbursement A. Summary of Procurement Arrangements (US$ million equivalent) Procurement Methods Project Element ICB NCB OTHER TOTAL Consultant Services and Training 47.8b/ 47.8 (including Project Management costs) (46.7) (46.7) Civil Works 4.0 0.2 4.2 (3.62) (0.18) (3.80) Equipment 0.8 0.2 1.0 (0.8) (0.2)' (1.0) Total dl 4.8 0.2 48.0 53.0 (4.42) (0.18) (46.9) (51.5) a/ Figures in Parentheses are the respective amounts financed by the Bank b/ World Bank Guidelines for the Use of Consultants c/ Local shopping dl Excludes provision for Taxes and Duties - 32 - ScheduleB Page 2 of 2 INDIA STATE'S ROAD INFRASTRUCTURE DEVELOPMENT TECHNICAL ASSISTANCE LOAN B. Disbursement Arrangements US$ million equivalent Category Amount Expenditure to be Financed Consultant Services 46.7 100% of expenditures and Training Civil Works 3.8 90% of expenditures Equipment 1.0 100% of Foreign expenditures, 100% of local expenditures (ex-factory cost), and 80% of local expenditures for other items procured locally Total 51.5 Estimated Disbursements (US$ million) IBRD Fiscal Year 97 98 99 00 01 Annual 10.0 12.0 15.0 8.0 6.5 Cumulative 10.0 22.0 37.0 45.0 51.5 - 33 - Schedule C INDIA STATE'S ROAD INFRASTRUCTURE DEVELOPMENT TECHNICAL ASSISTANCE LOAN Timetable of Key Project Processing Events (a) Time taken to prepare project: 7 months (March - November 1996) (b) Prepared by: Department of Economic Affairs Ministry of Finance, GOI (c) First Bank mission: March 1996 (d) Appraisal: July 1996 (e) Negotiations: October/November, 1996 (f) Planned Date of Effectiveness: January 31, 1997 (g) List of relevant PCRs and PPARs: INDIA: National Highway Project (Loan 2534-IN, Report No. 13644-IN) The project was prepared by Messrs. Ernst Huning (Task Manager, SA2EI), Fabio Galli (Financial Analyst, SA2EI), Christopher Hoban (Senior Highways Engineer, SA2EI), Chandra Godavitarne (Consultant, SA2EI) and Jose Pedro Da Silva (Legal Counsel, LEGSA). Messrs./Mmes. Angela Armstrong (Project Assistant, SA2EI), Moncef Chaabouni (Project Assistant, SA2EI), Joelle Chassard (Senior Financial Analyst, SA2EI), R L Kapoor (Local Consultant, SA2RS), Reidar Kvam (Anthropologist, ASTHR), Peter Long (Highways Engineer/Consultant, SA2EI), David Marsden (Chief, Social Development Unit, SA2RS), Malaine Manzo (Senior Operations Officer, SA2EI), Peter Midgley (Senior Urban Planner, ASTEN), I U B Reddy (Social Development Officer, SA2RS), Vivi Scott (Senior Staff Assistant, SA2EI), Gladys Stevens (Senior Staff Assistant, SA2EI) and Kazuko Uchimura (Project Adviser, SA2DR) have all made valuable contributions to this report. The peer reviewers were Dieter Schelling (Senior Highways Engineer, AF4IN), Hatim Hajj (Senior Transport Specialist, EA2TP) and Jaffar Bentchikou (Senior Highways Engineer, MNIPI). The report has been endorsed by Messrs. Heinz Vergin (Director, SA2) and Jean-Francois Bauer (Division Chief, SA2EI). -34- Schedule D Page 1 of 4 Status of Bank Group Operations in India IBRD Loans and IDA Credits in the Operations Portfolio (as of September 30, 1996) Original amount in US$ Difference millions between expected Project Loan or Fiscal Cancel- Undis- and actual ID Credit No Year Purpose IBRD IDA lations bursed disbursements Number of Closed Loans/Credits: 353 Active Loans IN-PA-10361 C21730 1991 ICDS I (ORIS & A.P.) 96.00 21.65 29.97 35.34 IN-PA-10369 C22340 1991 MAHARASHTRA RURAL WS 109.90 70.35 65.42 IN-PA-10381 L33640 1991 GAS FLARING REDUCTION 450.00 29.16 29.16 IN-PA-10390 C23280 1992 MAHARASHTRA FORESTRY 124.00 91.31 31.32 IN-PA-10391 C23410 1992 WEST BENGAL FORESTRY 34.00 13.15 4.47 IN-PA-10393 C23500 1992 AIDS PREVENTION & CONTROL 84.00 48.88 35.14 IN-PA-10400 L34980 1992 MAHARASHTRA POWER II 350.00 247.75 188.75 IN-PA-10407 C24330 1993 ADP - RAJASTHAN 106.00 60.54 12.43 IN-PA-10408 C24390 1993 BIHAR PLATEAU 117.00 99.23 46.26 IN-PA-10410 C24490 1993 RENEWABLE RESOURCES 115.00 99.19 173.36 IN-PA-10411 C24500 1993 JHARIA MINE FIRE CONTROL 12.00 7.39 6.85 IN-PA-10416 L35770 1993 PGC POWER SYSTEM 350.00 229.30 122.50 IN-PA-10418 C24830 1993 KARNATAKA WS & ENV/S 92.00 80.63 34.87 IN-PA-10422 L36300 1993 PRIVATE POWER DEVT T.A. 20.00 19.60 19.60 IN-PA-10423 L36320 1993 NTPC POWER GENERATION 400.00 343.32 318.32 IN-PA-10424 C25280 1993 NATL LEPROSY ELIMINATION 85.00 63.06 28.07 IN-PA-10448 C25720 1994 FORESTRY RESEARCH ED 47.00 39.02 15.39 IN-PA-10449 C25730 1994 ANDHRA PRADESH FORESTRY 77.40 70.34 14.61 IN-PA-10455 C26110 1994 BLINDNESS CONTROL 117.80 110.66 12.68 IN-PA-10457 C26300 1994 POPULATION IX 88.60 83.57 8.21 IN-PA-10461 L39070 1995 MADRAS WATER SUP II 6.00 0.01 19.61 IN-PA-10461 L39076 1995 MADRAS WATER SUP II 269.80 269.80 IN-PA-10463 C26450 1995 INDUS POLLUTION PREVENT. 25.00 25.60 24.99 IN-PA-10463 L37790 1995 INDUS POLLUTION PREVENT. 93.00 88.00 -3.51 IN-PA-10463 L37806 1995 INDUS POLLUTION PREVENT. 50.00 50.00 IN-PA-10464 C26610 1995 DISTRICT PRIMARY ED 260.30 231.09 18.69 IN-PA-10476 C27450 1995 TAMIL NADU WRCP 282.90 250.23 22.45 IN-PA-10480 C27630 1996 BOMBAY SEWAGE DISPOSAL 25.00 6.95 8.88 IN-PA-10480 L39230 1996 BOMBAY SEWAGE DISPOSAL 167.00 167.00 10.00 IN-PA-10484 L40560 1996 UP RURAL WATER 59.60 59.60 0.60 IN-PA-10485 C27740 1996 HYDROLOGY PROJECT 142.00 126.06 -4.00 IN-PA-10489 C26630 1995 AP 1ST REF. HEALTH - 133.00 128.42 13.32 IN-PA-10503 C26990 1995 AGRIC HUMAN RES DEVT 59.50 55.05 9.06 IN-PA-10506 C27000 1995 MADHYA PRADESH FORESTRY 58.00 50.23 -0.92 IN-PA-10522 C27330 1995 ASSAM RURAL INFRASTRUCTURE 126.00 114.97 5.31 IN-PA-10529 C28010 1996 ORISSA WRCP 290.90 263.71 -10.64 IN-PA-10563 L38560 1995 FINANCIAL SECTOR DEV 350.00 200.00 -150.00 IN-PA-10563 L38576 1995 FINANCIAL SECTOR DEV 144.00 144.00 IN-PA-34162 C25940 1994 MAHARASHTRA EARTHQUAKE 246.00 166.92 75.17 IN-PA-35170 L40140 1996 ORISSA POWER SECTOR 350.00 350.00 IN-PA-35821 C28760 1996 DISTRICT PRIM EDUC 2 425.20 420.98 IN-PA-35825 C28330 1996 STATE HEALTH SYSTEMS II 350.00 331.47 6.25 IN-PA-36062 C29160 1997 ECODEVELOPMENT 28.00 28.14 IN-PA-39935 C28380 1996 ILEFS-INFRAS FINANCE 5.00 4.91 IN-PA-39935 L39920 1996 ILFS-INFRAS FINANCE 200.00 200.00 IN-PA-43310 C28620 1996 COAL ENV&SOCIAL MIT. 63.00 59.49 -3.00 -35- Schedule D Page 2 of 4 Original amount in US$ Difference millions between expected Project Loan or Fiscal Cancel- Undis- and actual ID Credit No Year Purpose IBRD IDA lations bursed disbursements IN-PA-9860 C21310 1990 WTRSHED PLAINS 55.00 27.96 8.65 IN-PA-9869 L30240 1989 NATHPA JHAKRI HYDRO 485.00 266.33 238.13 IN-PA-9870 L37530 1994 CONTAINER TRANSPORT 94.00 82.79 34.79 IN-PA-9872 C19230 1988 TAMIL NADU URBAN 300.20 45.47 57.56 99.85 IN-PA-9877 C22410 1991 DAM SAFETY 130.00 110.64 104.43 IN-PA-9882 C21000 1990 WTRSHED HILLS 75.00 37.96 31.19 IN-PA-9885 L32580 1991 PETROCHEMICALS 12.00 4.92 4.71 IN-PA-9885 L32590 1991 PETROCHEMICALS 233.00 70.30 36.44 -126.26 IN-PA-9888 L34360 1992 POWER UTIL EFFIC IMPROVE. 265.00 151.30 103.00 IN-PA-9890 C21150 1990 HYDERABAD W/S 79.90 40.18 27.20 IN-PA-9895 C20640 1990 TECHNOLOGY DEVELOPMENT 55.00 36.31 28.11 IN-PA-9895 L31190 1990 TECHNOLOGY DEVELOPMENT 145.00 10.00 38.59 48.59 IN-PA-9898 C20100 1989 UPPER KRISHNA PHASE II 160.00 16.40 8.91 IN-PA-9898 L30500 1989 UPPER KRISHNA PHASE II 165.00 120.00 45.00 165.00 IN-PA-9906 C22520 1991 IND POLLUTION CONTROL 31.60 28.48 26.35 IN-PA-9906 L39340 1991 IND POLLUTION CONTROL 124.00 45.29 1.44 IN-PA-9910 C20570 1989 FAMILY WELFARE TRG 113.30 40.54 22.07 63.45 IN-PA-9921 C23290 1992 SHRIMP & FISH CULTURE 85.00 81.46 54.37 IN-PA-9925 L28450 1987 TALCHER THERMAL 375.00 79.90 28.34 108.24 IN-PA-9932 C21580 1990 SECOND TN NUTRITION 95.80 28.28 21.48 29.43 IN-PA-9940 C21330 1990 POP. TRG (VII) 86.70 22.74 18.00 36.42 IN-PA-9941 L30960 1989 MAHARASHTRA POWER 400.00 46.00 169.26 200.06 IN-PA-9946 C23650 1992 NAT. HIGHWAYS II 153.00 104.02 33.18 IN-PA-9946 L34700 1992 NAT. HIGHWAYS II 153.00 153.00 IN-PA-9955 C25090 1993 UTTAR PRADESH BASIC ED. 165.00 99.02 1.30 IN-PA-9956 L30930 1989 ELECTRONICS 8.00 2.12 204.12 IN-PA-9958 C22150 1991 AGR.DEV.I (TN) 92.80 36.01 18.19 IN-PA-9958 L33000 1991 AGR.DEV.I (TN) 20.00 20.00 1.25 IN-PA-9959 C24090 1993 RUBBER 92.00 83.79 35.85 IN-PA-9961 C25100 1993 UP SODIC LANDS RECLAM. 54.70 41.95 9.60 IN-PA-9963 C23940 1992 POPULATION VIII 79.00 77.85 40.53 IN-PA-9964 -C25920 1994 WATER RES. CONS. HARYANA 258.00 227.40 33.29 IN-PA-9965 C20760 1990 PUNJAB IRR & DRAINAGE 150.00 4.72 56.59 29.76 IN-PA-9973 L29940 1989 STATE ROADS I 170.00 55.00 22.43 157.43 IN-PA-9977 C24700 1993 ICDS II (BIHAR & MP) 194.00 186.73 60.05 IN-PA-9981 L31960 1990 CEMENT INDUSTRY RESTRUC. 300.00 6.82 43.60 50.42 IN-PA-9982 L32370 1990 NOR REG TRANSMISSION 485.00 346.71 318.51 IN-PA-9988 C22230 1991 TECHNICIAN EDUC II 307.10 51.37 162.02 135.89 IN-PA-9989 C21300 1990 TECHNICIAN EDUC I 235.00 24.26 94.51 85.31 IN-PA-9990 C20080 1989 VOCATIONAL TRAINING 250.00 86.15 80.34 176.16 IN-PA-9993 L33440 1991 PRIVATE POWER UTIL I 200.00 23.40 22.40 IN-PA-9996 C20220 1989 NATIONAL SERICULTURE 147.00 21.95 30.39 71.72 TOTAL 7093.4 7457.1 735.2 9195.4 3963.1 Closed Loans Total Total disbursed (IBRD and IDA) 28395.83 33112.03 Of which repaid 7817.43 8031.16 Total now held by IBRD and IDA 20007.98 33223.09 Amount sold 133.77 133.77 Of which repaid 133.77 133.77 Total undisbursed 54.11 8941.84 a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. -36- Schedule D Page 3 of 4 India - Statement of IFC Investments Committed and Disbursed Portfolio As of September 30, 1996 (In US$ Millions) Committed Disbursed I I II IFC IFC I I I FYApproval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1964/75/79/90 MUSCO 0.00 1.47 0.00 0.00 0.00 1.47 0.00 0.00 1978/87/91/93 HDFC 40.00 2.29 0.00 0.00 40.00 2.29 0.00 0.00 1980/82/89 Deepak 0.25 0.00 0.00 0.00 0.25 0.00 0.00 0.00 1981/86/91/93/96 ITW Signode 0.00 1.55 0.00 0.00 0.00 1.55 0.00 0.00 1981/90/93 M&M 1.17 6.49 0.00 4.67 1.17 6.49 0.00 4.67 1981 Nagarjuna Steel 0.00 0.07 0.00 0.00 0.00 0.07 0.00 0.00 1981/86/89/92/94 TISCO 13.80 15.37 0.00 0.00 13.80 15.37 0.00 0.00 1982 Modi Cement 19.64 0.00 0.00 0.00 19.64 0.00 0.00 0.00 1984/91 Bihar Sponge 15.23 0.68 0.00 0.00 15.23 0.68 0.00 0.00 1984/90/94 India Lease 1.75 0.86 0.00 0.00 1.75 0.86 0.00 0.00 1986 EXB-Bannari 0.08 0.00 0.00 0.00 0.08 0.00 0.00 0.00 1986 EXB-City Mills 0.48 0.00 0.00 0.00 0.48 0.00 0.00 0.00 1986 EXB-CECL 0.01 0.00 0.00 0.00 0.01 0.00 0.00 0.00 1986 EX3-NB Footwear 0.19 0.00 0.00 0.00 0.19 0.00 0.00 0.00 1986 EXB-Paharpur 0.30 0.00 0.00 0.00 0.30 0.00 0.00 0.00 1986 EXB-STG 0.50 0.00 0.00 0.00 0.50 0.00 0.00 0.00 1986 EXB-TAN 0.03 0.00 0.00 0.00 0.03 0.00 0.00 0.00 1986 EXB-Wires & Fab. 0.14 0.00 0.00 0.00 0.14 0.00 0.00 0.00 1986/92/93/94 GESCO 1.54 13.05 0.00 9.91 1.54 13.05 0.00 9.91 1986/93/94/95 India Equipment 0.65 0.77 0.00 1.60 0.65 0.77 0.00 1.60 1987 Hindustan 10.80 0.00 0.00 0.00 10.80 0.00 0.00 0.00 1987/88/90/93 Titan Watches 6.08 1.03 0.00 0.00 6.08 1.03 0.00 0.00 1988/94 GKN Invel 0.00 1.40 0.00 0.00 0.00 1.40 0.00 0.00 1988/90/92 Keltron 0.00 0.56 0.00 0.00 0.00 0.56 0.00 0.00 1989 AEC 17.53 0.00 0.00 0.00 17.53 0.00 0.00 0.00 1989/91 Gujarat State 17.81 0.00 0.00 0.00 17.81 0.00 0.00 0.00 1989/95 JSB India 0.00 1.21 0.00 0.00 0.00 1.21 0.00 0.00 1989/90/94 Tata Electric 104.64 0.00 0.00 0.00 104.64 0.00 0.00 0.00 1989 UCAL 0.00 0.63 0.00 0.00 0.00 0.63 0.00 0.00 1990/92 CESC 51.71 0.00 0.00 67.00 51.71 0.00 0.00 30.00 1990 HOEL 0.00 0.28 0.00 0.00 0.00 0.28 0.00 0.00 1990/94 ICICI-IFGL 0.00 1.06 0.00 0.00 0.00 1.06 0.00 0.00 1990/95 ICICI-SPIC Fine 0.00 1.88 0.00 0.00 0.00 1.88 0.00 0.00 1990/93/94 IL & FS 28.50 3.11 1.81 10.00 28.50 3.11 1.81 10.00 1990 TDICI-VECAUS II 0.00 1.94 0.00 0.00 0.00 1.94 0.00 0.00 1991 Block KG-OS-IV 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.00 1991 BSES 50.00 0.00 0.00 0.00 50.00 0.00 0.00 0.00 1991/93 Triveni 0.00 1.11 0.00 0.00 0.00 1.11 0.00 0.00 1991/96 VARUN 14.42 1.35 0.00 6.00 14.42 1.35 0.00 6.00 1992/93 Arvind Mills 0.00 17.10 0.00 0.00 0.00 17.10 0.00 0.00 1992/95 Creditcapital VF 0.00 1.05 0.00 0.00 0.00 1.05 0.00 0.00 1992 Indus VC Mgt Co 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00 -37- Schedule D Page 4 of 4 Committed Disbursed II I IFC IFC I I I I FYApproval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1992 Indus VCF 0.00 1.00 0.00 0.00 0.00 1.00 0.00 0.00 1992 Info Tech Fund 0.00 0.64 0.00 0.00 0.00 0.64 0.00 0.00 1992/94 Nippon Denro 61.43 5.77 0.00 60.00 31.43 5.77 0.00 0.00 1992/96 NICCO-UCO 2.25 0.37 0.00 0.00 2.25 0.37 0.00 0.00 1992 SKF Bearings 7.66 0.00 0.00 0.00 7.66 0.00 0.00 0.00 1993/94/96 Indo Rama 23.44 11.98 0.00 9.38 23.44 11.98 0.00 9.38 1993 20TH Century 1.09 0.80 0.00 7.11 1.09 0.80 0.00 7.11 1994 Centurion Growth 0.00 2.39 0.00 0.00 0.00 2.39 0.00 0.00 1994 Chowgule 15.00 4.58 0.00 27.00 0.00 4.58 0.00 0.00 1994 Crdcap Asset Mgt 0.00 0.32 0.00 0.00 0.00 0.32 0.00 0.00 1994 DLF Cement 15.34 0.00 0.00 17.00 15.34 0.00 0.00 17.00 1994 Global Trust 0.00 3.19 0.00 0.00 0.00 3.19 0.00 0.00 1994 Gujarat Ambuja 0.00 8.23 0.00 0.00 0.00 8.23 0.00 0.00 1994 GVK 40.00 8.30 0.00 0.00 0.00 8.30 0.00 0.00 1994 Taurus Starshare 0.00 7.17 0.00 0.00 0.00 7.17 0.00 0.00 1994 TCAMC 0.00 0.16 0.00 0.00 0.00 0.16 0.00 0.00 1995 Centurion Bank 0.00 3.87 0.00 0.00 0.00 3.87 0.00 0.00 1995 EXIMBANK 25.00 0.00 0.00 0.00 16.00 0.00 0.00 0.00 1995 ISIC 0.00 0.32 0.00 0.00 0.00 0.32 0.00 0.00 1995 Prism Cement 15.00 5.02 0.00 15.00 12.50 5.02 0.00 12.50 1995 Rain Calcining 19.25 5.40 0.00 0.00 0.00 4.72 0.00 0.00 1995 RPG Communicat 0.00 8.30 0.00 0.00 0.00 0.00 0.00 0.00 1995 Sara Fund 0.00 7.04 0.00 0.00 0.00 1.10 0.00 0.00 1995 SRF Finance 15.00 5.00 0.00 0.00 15.00 4.39 0.00 0.00 1996 CVF Oil Gas-AL 8.00 8.00 0.00 0.00 0.00 0.00 0.00 0.00 1996 India Direct Fnd 0.00 7.50 0.00 0.00 0.00 0.13 0.00 0.00 1996 Indus II 0.00 5.00 0.00 0.00 0.00 1.00 0.00 0.00 1996 Indus Mauritius 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1996 Moser Baer 5.70 0.60 0.00 0.00 5.70 0.00 0.00 0.00 1996 United Riceland 10.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Portfolio: 661.41 187.29 1.81 234.67 527.66 151.77 1.81 108.17 Approvals Pending Commitment Loan Equity Quasi Partic 1994 NEYVELI POWER 30.00 18.00 0.00 150.00 1994 NIPPON DENRO ISP 0.00 6.00 0.00 0.00 1995 IB VALLEY POWER 50.00 20.00 0.00 0.00 1995 SPIC-RGHTS ISSUE 0.00 0.86 0.00 0.00 1996 CESC 11 -BLINC 0.00 0.00 0.00 37.00 1996 DEV CREDIT BANK 0.00 1.89 0.00 0.00 1996 TARUN SHIPPING 0.00 0.80 0.00 0.00 1997 NIPPON EXPANSION 15.00 6.00 0.00 25.00 1997 WIPRO 10.00 0.00 0.00 0.00 Total Pending Commitment: 105.00 53.55 0.00 212.00 -38- India at a glance POVERTY and SOCIAL South Low- India Asia income Development diamond* Population mid-1995 (millions) 929.4 1,243 3,188 ie expectancy GNP per capita 1995 (USS) 350 350 460 GNP 1995 (billions USS 325.3 435 1,466 Average annual growth, 1990-95 Population (%) 1.8 1.9 1.8 Labor force (%) 2.1 2.4 1.9 GNP Grc per prim Most recent estimate (latest year available since 1989) capita enrollm Poverty: headcount index (% of populaton) Urban population (% of total population) 27 26 28 Life expectancy at birth (years) 62 61 63 Infant mortality (per 1.000 five births) 68 73 68 1 Child malnutrition (% of children under 5) 63 62 38 Access to safe water Access to safe water (% ofpopulaton) .. 70 66 Illiteracy (% of populaion age 15+) 48 51 35 Gross primary enrollment (% of school-age population) 102 98 105 -India Male 113 110 112 -Low-income group Female 91 87 98 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1988 1994 1995 Economic ratios* GOP (billions USS) 91.0 214.3 301.2 328.2 Gross domestic investment/GOP 20.8 23.9 23.2 24.2 Openness of economy Exports of goods and non-factor services/GDP 6.2 6.0 11.3 12.4 1 Gross domestic savings/GDP 20.4 20.8 21.5 22.1 T Gross national savings/GDP 20.8 21.1 22.3 22.6 Current account balanceIGOP -0.1 -2.8 -1.0 -1.7 Savings Investment Interest payments/GDP 0.3 0.8 1.5 1.4 Total debt/GOP 15.1 19.1 32.9 30.2 Total debt servicelexports 13.1 22.7 26.9 25.1 Present value of debt/GDP .. .. 23.4 Present value of debtlexports .. .. 176.7 .. Indebtedness 1976-84 1985-95 1994 1995 1996.04 (average annual growth) -India GOP (factor cost) 4.0 5.1 6.3 7.0 6.2 - Low-income group GNP per capita 1.7 3.1 6.1 5.7 4.7 Exports of goods and nfs- 11.5 11.1 18.0 19.7 11.9 STRUCTURE of the ECONOMY 1975 1988 1994 1995 (% of GOP) Growth rates of output and investment (%) Agriculture 40.5 33.0 31.1 29.8 20 Industry 23.7 28.1 28.0 29.1 1o Manufactunng 16.7 17.9 17.4 18.2 Services 35.8 38.8 40.9 41.1 o \ Private consumption 70.2 68.1 68.2 67.6 General government consumption 9.4 11.1 10.3 10.3 Imports of goods and non-factor services 6.6 %.1 13.0 14.6 -GDI *a*-GDP 1975-84 1985-96 1994 1995 (average annual growth) Growth rates of eports and Imports (%) Agriculture 2.4 3.6 4.9 2.4 Industry 5.2 $.9 8.3 11.7 3 Manufacturing 5.4 5.8 9.0 12.2 20 Services 4.7 5.7 6.0 7.0 1o Private consumption 4.4 4.7 5.0 6.0 - 9o 0 a2 a3 s 4 is General government consumption 6.2 4.2 3.0 7.6 -20 Gross domestic investment 3.7 5.1 19.8 12.3 *I Imports of goods and non-factor servicas" 13.3 10.3 34.0 21.5 Gross national product 4.0 5.2 6.5 7.5 - a Note: 1995 data are preliminary estimates. * The diamonds show four key indicators in the country (in bold) compared with Its income-group average. If data are missing, the diamond will be incomplete. Dollar Growth Rates. -39- India PRICES and GOVERNMENT FINANCE 1975 1985 1994 1995 Inflation (%) Domesvc prices Consumer prices 5.7 5.5 10.2 10.2 1 Implici GOP deflator -1.5 7.6 11.1 8.0 Government finance (% of GDP) Current revenue .. 23.5 21.2 21.4 0 91 20 a. as Current budget balance .. 2.2 0.2 -1.0 -GOP def. **-CP Overall surplus/deficit -10.4 -9.0 -10.3 TRADE TR0oD U1975 1985 1994 1995 Export and Import levels (mill. US$) (millions USS) Total exports (fob) .. 9,463 26,857 32,430 4o.00 Tea .. 511 311 296 Iron 473 413 464 accoo Manufactures .. 5.639 21,088 25.779 Total imports (cif) .. 17,298 31,672 39,4.45 20.N Food .. 1.321 1,464 2,110 Fuel and energy .. 4,054 5,928 7,537 oooo Capital goods . 3.503 6,366 7.203 i Export pnce index (1987=100) .. 80 118 121 A 9D 91 92 93 a. 95 Import price index (1987.100) .. 96 121 128 cExports isimports Terms of trade (1987-100) .. 83 98 95 BALANCE of PAYMENTS 1975 1985 1994 1995 (milons US) Current account balance to GOP ratio (%) Exports of goods and non-factor services 5,650 12,773 34,141 40,862 o Imports of goods and non-factor services 5,990 19,422 39,450 47,944 s so as Resource balance -340 -6,649 -5,309 -7,083 Net factor income -191 -1,553 -3,905 -4,487 Net current transfers 470 2,207 6.200 6,150 - Current account balance, before official transfers -61 -5,995 -3,014 -5,419 - Financing items (net) 636 6,807 9,872 3,471 Changes in net reserves -575 -812 -6,858 1,948 Memo: Reserves including gold (mill. USS) 2,064 9.730 24,079 21,930 Conversion rate (localUSS) 8.7 12.2 31.4 32.4 EXTERNAL DEBT and RESOURCE FLOWS 1975 1985 1994 199 (millions USS) Composition of total debt, 1994 (mill. US$) Total debt outstanding and disbursed 13.708 40.971 98,990 IBRD 436 2.396 11,120 IDA 2,809 9,750 17,666 ..A Total debt service 822 3,534 10,516 .8 11120 IBRD 89 313 1,597 IDA 24 124 315 .. F 8 Composition of net resource flows 27037 1768s Official grants 511 450 612 . C Official creditors 1,260 1.424 976 .. 4312 Private creditors 83 2.276 149 .. Foreign direct investment 85 106 620 .. E Portfolio equity 0 0 4,729 .31067 World Bank program Commitments 917 2,882 2,066 . A.lORD E-Bilera Disbursements 531 1,375 1,706 .. 8-IDA 0 - Oser flastal F - Pfvts Principal repayments 63 157 1,021 ,. C-IMF 0 - ShoM-erm Net flows 467 1,218 687 Interest payments 50 280 892 Net transfers 417 938 -205 SA2CI and International Economics Department 10&28/96 u CD r- C SOt rD C4 E
Группа Всемирного банка · Memorandum & Recommendation of the President
India - States' Road Infrastructure Development Technical Assistance Project
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