Document of
The World Bank
Report No: 22169-IN
PROJECT APPRAISAL DOCUMENT ON A
PROPOSED LOAN
IN THE AMOUNT OF US$589 MILLION EQUIVALENT TO THE
GOVERNMENT OF INDIA FOR THE
GRAND TRUNK ROAD IMPROVEMENT PROJECT May 30, 2001
Infrastructure Sector Unit South Asia Regional Office
Public Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure Authorized
CURRENCY EQUIVALENTS (Exchange Rate Effective January 18, 2001)
Currency Unit = Indian Rupees (INR) INR 1.00 = US$0.022
US$1 = INR 45.42 FISCAL YEAR April 1 -- March 31
ABBREVIATIONS AND ACRONYMS
AADT - Annual Average Daily Traffic MOST - Ministry of Surface Transport ADB - Asian Development Bank NCB - National Competitive Bidding AIDS - Acquired Immune Deficiency Syndrome NGO - Non governmental organization APL - Adaptable Program Loan NHAI - National Highways Authority of India
BOT - Build-Operate-Transfer NHDP - National Highway Development
C&AG - Controller & Auditor General of India Program
CAS - Country Assistance Strategy NPV - Net Present Value
CBO - Community Based Organization O&M - Operation and Maintenance
CMU - Corridor Management Unit OD - Operational Directive
EA - Environmental Assessment PFMS - Project Financial Management
EMP - Environmental Management Plan Systems
ERR - Economic Rate of Retum PIC - Project Information Center ESMU - Environment & Social Management Unit PMR - Project Management Report
GOI - Government of India PMU - Project Management Unit
GTRIP - Grand Trunk Road Improvement Project PPP - Public-Private Partnership HDM-III- Highway Design and Maintenance PSD - Private Sector Development
Standards Model - Version III PWD - Public Works Departments HIV - Human Immunodeficiency Virus RAP - Resettlement Action Plan
HO - Head Office R&R - Resettlement and Rehabilitation
JBIC - Japanese Bank for International ROW - Right-of-Way
Cooperation SC - Supervision Consultants
ICB - International Competitive Bidding SIL - Specific Investment Loan ICR - Implementation Completion Report SOE - Statement of Expenditure IL&FS - Infrastructure Leasing & Financial TN\HP - Third National Highway Project
Services TTZ - The Taj Trapezium Zone
MOEF - Ministry of Environment & Forestry UP - Uttar Pradesh
MORTH- Ministry of Road Transport & Highways WTCP - Western Transport Corridor Project
Vice President: Mieko Nishimizu Country Manager/Director: Edwin R. Lim
Sector Manager/Director: Vincent Gouarne Task Team Leader/Task Manager: Zhi Liu
INDIA
GRAND TRUNK ROAD IMPROVEMENT PROJECT
CONTENTS
A. Project Development Objective Page
1. Project development objective 2
2. Key performance indicators 2
B. Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 2
2. Main sector issues and Government strategy 2
3. Sector issues to be addressed by the project and strategic choices 5 C. Project Description Summary
1. Project components 6
2. Key policy and institutional reforms supported by the project 9
3. Benefits and target population 10
4. Institutional and implementation arrangements 10
D. Project Rationale
1. Project alternatives considered and reasons for rejection 11
2. Major related projects financed by the Bank and other development agencies 12
3. Lessons learned and reflected in proposed project design 14
4. Indications of borrower conmnitment and ownership 14
5. Value added of Bank support in this project 15
E. Summary Project Analysis
1. Economic 15
2. Financial 16
3. Technical 17
4. Institutional 17
5. Environmental I8
6. Social 22
7. Safeguard Policies 27
F. Sustainability and Risks
1. Sustainability 27
2. Critical risks 28
3. Possible controversial aspects 28
G. Main Loan Conditions
1. Effectiveness Condition 29
2. Other 29
H. Readiness for Implementation 29
I. Compliance with Bank Policies 30
Annexes
Annex 1: Project Design Summary 31
Annex 2: Detailed Project Description 35
Annex 3: Estimated Project Costs 38
Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 39 Annex 5: Financial Summary for Revenue-Eaming Project Entities, or 44
Financial Summary
Annex 6: Procurement and Disbursement Arrangements 45
Annex 7: Project Processing Schedule 59
Annex 8: Documents in the Project File 60
Annex 9: Statement of Loans and Credits 62
Annex 10: Country at a Glance 66
Annex 11: Environment & Social Assessment, EMP, and RAP 68
MAP(S) IBRD 31387
INDIA
Grand Trunk Road Improvement Project
Project Appraisal Document
South Asia Regional Office SASIN
Date: May 30, 2001 Team Leader: Zhi Liu
Country Manager/Director: Edwin Lim Sector Manager/Director: Vincent Gouame Project ID: P071244 Sector(s): BI - Institutional Development, DV -
Privatization, TH - Highways
Lending Instrument: Specific Investment Loan (SIL) Theme(s): Public Sector; Private Sector; Transport Poverty Targeted Intervention: N
Program Financing Data
[X] Loan [ ] Credit [ Grant [1 Guarantee [] Other:
For Loans/Credits/Others:
Amount (US$m): 589.00
Proposed Terms (IBRD): Variable Spread & Rate Single Currency Loan (VSCL) Grace period (years): 5 Years to maturity: 20
Commitment fee: 0.75% Front end fee on Bank loan: 1.00%
Financing Plan (US$m): Source Local Foreign Total
BORROWER 161.20 5.80 167.00
IBRD 377.60 211.40 589.00
Total: 538.80 217.20 756.00
Borrower: GOVERNMENT OF INDIA
Responsible agency: NATIONAL HIGHWAYS AUTHORITY OF INDIA NHAI
Address: National Highway Authority of India, 1, Eastem Avenue, Maharani Bagh, New Delhi, 110065 Contact Person: Subhash Patel, Chief General Manager (World Bank Projects)
Tel: 91-11-682-4974 Fax: 91-11-692-4383 Email: nhai@vcnl.com
Estimated disbursements ( Bank FY/US$m):
FY 2002 2003 2004 2005 2006 2007 2008
Annual 88.00 147.00 177.00 118.00 59.00 Cumulative 88.00 235.00 412.00 530.00 589.00 Project implementation period: Five years
Expected effectiveness date: 09/30/2001 Expected closing date: 12/31/2006
00SPAD FaV S Ma . 25
A. Project Development Objective
1. Project development objective: (see Annex 1)
The Bank adopts a programmatic approach to support the Government of India's (GOI) National Highway Development Program (NHDP) through a series of loans. The Grand Trunk Road Improvement Project (GTRIP) is the second project in the series, following the Third National Highway Project (TNHP) which was approved by the Board in June 2000 and is under
implementation. Thus the development objectives of the project are consistent with those of TNHP: (a) to reduce transport constraints on national economic activity; and (b) to improve institutional capabilities to manage road programs, assets, and services on a more commercial basis.
2. Key performance indicators: (see Annex 1)
(a) Vehicle travel time along the entire national highway corridor between Delhi and Calcutta reduced by 25-30% by end of project (EOP); (b) truck operating costs reduced by at least 10% by EOP; (c) incidence of road deaths reduced by 20% on project roads by EOP; and (d) about 1,200 km of national highways maintained under contract with private sector and managed by the Corridor Management Units (CMU) by EOP.
B. Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1)
Document number: R2001-0037/1[IFC/R2001-0037/11 Date of latest CAS discussion: 4/5/2001
The CAS identifies highway infrastructure bottlenecks as one of the major constraints to poverty reduction and private sector-led growth. The GTRIP supports the CAS sector goal of reducing highway infrastructure bottlenecks. The project is also designed to contribute to the two
important areas emphasized by the CAS: (a) improving government capability and effectiveness to deliver core public services that are vital for economic growth and poverty reduction; and (b) enabling the environment for private sector investments in infrastructure. The major project works will be implemented in the states of Bihar, Jharkhand, and Uttar Pradesh, which are among the less developed states in India. The project is expected to improve the ability of these states to participate in the economic development and trade which is taking place to a larger extent
elsewhere in India.
2. Main sector issues and Government strategy:
The national highway network has a total length of 57,700 km, which accounts for about 1.7 percent of the total road network of 3.3 million km but carries over 40% of the road traffic. Over 95% of the national highway network are two-lane roads or narrower, and a significant
proportion is in poor surface condition. This results from years of inadequate allocation of resources to the core highway system and poor management of transport infrastructure by the public sector. During the market liberalization in the 1 990s, steady economic growth has driven up the demand for improved road transport; and traffic on the national highways has been
growing at about 8-10% per annum. As a result, the trunk national highways are increasingly congested.
The level of service is further worsened by the mixed traffic of fast and slow vehicles, highly congested and unsafe urban crossings, and state border inspections/check points (for the purposes of tax collection and commodity permits) that often hold up truck traffic for many hours. It takes four to five days for a truck to go one way between Delhi and Calcutta (about 1,300 km).
Moreover, the poor driving condition in mixed traffic on the two-lane national highways is a major contributing factor to road traffic accidents. India is among the nations with the highest road accident rate per vehicle, and 38% of the road accidents occur on national highways. Where both vehicle insurance system and health care are less developed, the economic and health impacts of traffic accidents on poor households are especially severe.
Improving the level of service on the national highway corridors requires both capacity investment and traffic efficiency/safety enhancement. The financial requirements for increasing the trunk highway capacity through 4-laning, 6-laning, and expressway construction are expected to be beyond the level that the public sector alone will be able to meet in the near future. However, private sector participation in road financing is just starting, and is facing a number of institutional and market constraints. For example, institutional capacity needs to be built up for the
preparation, implementation, and monitoring of highway concession projects. The domestic financial market is yet to develop appropriate long-term financial instruments needed for private investment in road infrastructure. Few projects are financially viable for a stand-alone private investment, and most projects would require Public-Private Partnership (PPP) to become viable.
However, various modalities of PPP are still under development and need to be tested. All these constraints must be overcome before private investment can be mobilized to provide significant additionality to public investment.
National highway development in India is also heavily constrained by the weak institutional capacity and lengthy procedures to address project-related environmental and social issues. While relevant laws and government institutions are in place to deal with the issues, technical capabilities are inadequate, and coordination is weak among the central and state administrative jurisdictions.
Moreover, there is a lack of adequate mechanism for the consultation with and participation of the project affected people, stakeholders, and non-governmental organizations (NGOs) in the
process. As many displaced households are of low income, their relocation and rehabilitation need to be handled more carefully. There is a need for social and environmental capacity building to ensure the speedy implementation of the NHDP.
To summarize, the following main issues are recognized in the national highway sector: (a) serious road capacity constraint on the national highway network; (b) worsening road safety amid growing motorization; (c) poor management of road infrastructure services by the public sector;
(d) weak enabling environment for private sector participation in road financing; and (e) weak institutional capacity to address highway project related social and environmental issues.
Government strategy. The GOI recognizes that the poor performance of the national highway system has been a major drag on the growth of national economy and is determined to upgrade
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the system through its NHDP. The program was based on the govemment strategy outlined in the 1996 India Infrastructure Report. Covering a network of 13,000km, the program includes
the four-laning of a 6,000 km "Golden Quadrilateral" (linking Delhi, Calcutta, Chennai and Mumbai), the North-South and East-West corridors, and the trunk roads to key ports. It also includes the planning and construction of expressways where feasible. Total cost for the program is estimated to be US$12 billion over eight years, and funding sources include govemrnment grants, fuel levies, tolls, bonds, private investments, and loans from international development banks, including the on-going TNHP funded by the World Bank. A cess of Rs. 1 per liter on petrol and diesel was introduced by GOI in 1999, and a substantial portion (about Rs. 2000 crores or equivalent of US$430 million a year) of the cess revenues is earmarked for national highway development, maintenance, and operation. Moreover, GOI has made notable efforts to improve the enabling environment for private sector participation in national highway financing. The efforts include the development of policy guidelines and a legal framework for private investments in national highway projects. The National Highway Act was amended to permit tolls on national highways and to provide financial incentives such as public-private partnership to encourage private investments on toll roads. According to the policy guideline, the government may provide
financial support up to 40% of the project cost to enhance the viability of the private investment projects, and the amount of support would be determined through competitive bidding. A number
of projects have been identified for private investments through BOT schemes, and concessions have been signed for nearly 20 bridges and short bypass projects, although these projects are
mostly small scale (less than 20 km each).
Institutional reform to improve the effectiveness of public road agencies is also an integral part of the government strategy. The Ministry of Road Transport & Highways (MORTH, formerly the
Ministry of Surface Transport) had long been responsible for the development and management of the national highways. With close oversight, MORTH delegated considerable responsibilities to the national highway branches in the state Public Works Departments (PWDs). Under the National Highways Authority of India Act of 1988, GOI established the National Highways Authority of India (NHAI) to take charge of major works programs on the national highway network. The Act requires NHAI to act on business principles as far as possible in the discharge
of its functions. The agency has maintained a lean organization by outsourcing most of its activities to the private sector. It has now assumed full responsibility for the implementation of NHDP, including the extemally-aided projects financed by the Asian Development Bank (ADB), the Japanese Bank for International Cooperation (JBIC) and the World Bank. As part of this program, NHAI has taken significant steps to develop and strengthen its institutional capacity for
the development, maintenance, and operation of the national highway system in response to the needs of road users and other stakeholders. The institutional development being undertaken by NHAI is fostering a cultural change in the Indian road sector of viewing roads as a service instead
of merely a physical infrastructure. However, NHAI is still in the early stages of reforms in accounting policies and strengthening of its financial management systems, in its move towards being an effective agency managing its resources on business principles. In this regard, actions are being planned to address several policy and process related issues during implementation of the GTRIP and the TNHP. NHAI is also a designated implementing agency for the preparatory work and monitoring the implementation of private investment projects on the national highway network. Recently the agency has taken responsibility for the maintenance and operation of 6,000
km Golden Quadrilateral, and is exploring suitable maintenance contracts with the private sector, partly through the implementation of the CMU concept under the TNHP.
3. Sector issues to be addressed by the project and strategic choices:
The GTRIP will help address all five main sector issues discussed above by: (a) adding much needed capacity to the heavily congested part of the national highway network; (b) reducing the risks of road accidents and improving traffic efficiency; (c) promoting private sector participation in road financing; and (d) enhancing institutional capacity for the effective delivery and
management of national highway assets and services. This broad scope of the project is desired due to the expected great impact, and also realistic as the project will complement and consolidate the similar effort being made under the on-going TNHP. TNHP comprises three major
components: (a) upgrading of 475 km national highway; (b) corridor management and road safety works; and (c) institutional strengthening and training. It mainly aims to improve NHAI's
capacity in the areas of project implementation, accountability, strategic planning, and asset management. The GTRIP will take a significant step further along the same institutional strengthening direction set forth by the TNHP, especially with regard to private sector participation and road safety.
Due to the programmatic approach, the GTRIP broadly follows the strategic choices made under the TNHP. In addition, a strategic choice is made to support private sector participation in road financing.
Institution choice. The GTRIP fully supports the GOI's strategy of shifting responsibility for the NHDP from MORTH to NHAI. Both the TNHP and GTRIP, as well as ADB's proposed Western Transport Corridor Project (WTCP), support NHAI's institutional development towards a non-bureaucratic agency that manages national highways like a business. In addition to the effort to maintain a lean organization through outsourcing most of its activities to the private sector, NHAI is exploring various financial sources outside the central government budget, and is taking initial step to include a national highway user group representative as a member of its Board. Moreover, NHAI has demonstrated strong commitment through satisfactory progress in the implementation of the TNHP and the preparation of the GTRIP. The institutional
strengthening actions to be supported under the GTRIP are defined in close coordination with the TNHP and WTCP under the institutional development strategic framework agreed by NHAI, ADB, and the Bank.
Public or private finance. Private investments in the road sector have so far been very limited, and there are still many institutional and market constraints to overcome before private sector is able to play a greater role in road financing. GOI is actively pursuing various options for attracting private sector funding. The Bank has been providing assistance in this aspect through an on-going Infrastructure Leasing & Financial Services (IL&FS) Project. NHAI is actively exploring and experimenting various options to encourage private investments on national
highways. Nevertheless, in the short to medium term, before the enabling environment is matured for substantial private sector financing, a large part of India's road infrastructure will need to be provided and managed by the public sector. This project focuses on the urgently needed public
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investments, while supporting NHAI's efforts to promote private sector participation broadly in road financing, operation and maintenance, construction and engineering services. A private sector participation component is defined to help NHAI test a modality of PPP through a relatively large pilot BOT project. This pilot project is timely as the private investment in road infrastructure needs to be stimulated by successful examples and demonstration of government commitment.
Corridor choice. There is coordination among the World Bank, ADB, and JBIC in terms of assistance to the improvements of priority corridors in the NHDP. The major works of this project and the on-going TNHP are on National Highway 2 (NH-2, also popularly known as
Grand Trunk Road) between Delhi and Calcutta. Interventions focusing on one particular national highway corridor have an advantage for effectively addressing: (a) project related
environmental and social issues; and (b) corridor transport efficiency issues through a combination of capacity investment, corridor management, and reduction of traffic delays caused by border check posts. Moreover, the project will finance civil works associated with road safety, Corridor Management Units, and public-private partnership on other selected national highways. These
civil works are proposed as part of the support to NHAI's institutional capacity building.
C. Project Description Summary
1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown):
Highway upgrading: The national highway sections proposed for upgrading under the GTRIP, totaling 420 kin, are all located along the 1,000 km of NH-2 from Agra in Uttar Pradesh (UP) to Barwa Adda in Jharkhand. The entire stretch is divided into 16 construction sections. Eight sections were chosen for financing under the TNHP on the basis of implementation readiness.
The sections proposed by NHAI for financing under the GTRIP are all remaining sections except one (Allahabad section) which will be considered for financing under the Bank's next national highway project. The upgrading works mainly involve the widening of existing two lanes to a 4-lane divided carriageways with service roads, bypasses, and other traffic separation measures
where required. In one section between Agra and Bhognipur, widening to 6 lanes is proposed for accommodating the heavy traffic. The project also makes a provision for low-cost interim traffic management measures, as necessary, to deal with the short-term congestion in the existing national highway stretch passing through the city of Allahabad.
Road safety and corridor management works: This component includes the civil works associated with the support to NHAI's institutional capacity building in the areas of road safety and corridor management. It finances the improvement of hazardous locations on selected national highways, and the implementation of civil works associated with the new Corridor Management Units to be established under the project.
Public-private partnership in road concession: In collaboration with similar and related efforts by ADB, this component will assist NHAI to undertake detailed preparation and implementation of a pilot project to upgrade, under an innovative public-private partnership scheme, a selected national highway section (over 60 kin) outside the NH-2 corridor. One candidate section would be the stretch between Tindivanam and Tiruchirapalli on the NH-45 within Tamil Nadu. The entire stretch is 200 km long, and is proposed to be upgraded from 2 lanes to 4 lanes. The project is expected to require NHAI financial support (estimated to be around US$25 million) to enhance its financial viability for private sector participation. It is proposed that a BOT scheme be
awarded based on competitive bidding on the required NHAI share of public-private investment, under the fixed toll rate and fixed concession period. The feasibility study, detailed engineering design, and draft Environmental Assessment (EA) and Resettlement Action Plan (RAP) for the stretch have been completed with funding from the Bank's Second National Highway Project.
The component will fund consultant service for the preparation of concession (including legal advisory, preparation of bid documents, and evaluation of bids) and a portion of the bidden government (NHAI) financial support for the project or another more suitable candidate section.
Institutional strengthening: The component builds on the similar component under the TNHP, and is designed in a close coordination with ADB's WTCP (which has a similar implementation timetable to the current project) under the institutional development strategic framework agreed among NHAI, ADB, and the Bank. A joint assistance strategy for the India's road sector between the Bank and ADB has recently been developed in consultation with MORTH and NHAI to help coordinate the assistance program of the Bank and ADB and policy dialogue in the national highways and state highways subsectors. The TNHP focuses mainly on technical assistance to NHAI to develop and implement the institutional strengthening program, setting up of a road information system, establishment of two pilot CMUs, and implementation of a program of minor road improvements to increase operational efficiency and reduce accidents. The GTRIP will enhance the capacity of MORTH and NHAI to improve road safety and traffic efficiency, expand its program of corridor management, strengthen the newly created social and environmental unit, strengthen the public-private partnership for road financing, and develop a computerized national highway asset inventory. Specifically, the component will include the following sub-components:
(a) NHAI's social and environmental capacity building, including (i) a poverty and highway development study that would help understand the poverty dimension of the social issues involved in highway development, and (ii) consultant services for training and streamlining monitoring procedures; (b) training of trainers and dissemination of road safety manual; (c) public road safety education and campaign through mass media; (d) implementation of road safety action plan to be formulated under the TNHP; (e) computerizing the Golden Quadrilateral national highway asset inventory; (f) CMUs related consultant services; (g) a cross-state border road efficiency study;
and (h) provision for subsequent project preparation and sector studies, including expressway project preparation (the stretch from Vadodara to Mumbai is proposed as one of the candidates for detailed project study).
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Indicative Bank- % of Component Sector Costs % of financing Bank-
_ _M_
L
Total - $M ficing 1. Highway upgrading of 420 km of Highways 685.30 90.6 527.40 89.5 NH-2 to four or six lanes includingconstruction, supervision, land acquisition and resettlement, and environmental management.
2. Road safety and corridor Highways 20.20 2.7 16.20 2.8
management works.
3. Public-private partnership in road PSI 25.60 3.4 20.60 3.5
concession, including technical assistance, funding NHAI's share of public-private financing of pilot BOT project on NH-45.
4. Institutional strengthening, including Institutional 19.00 2.5 18.90 3.2 (a) NHAI's social and environmental Development
capacity building; (b) training of trainers and dissemination of road safety manual; (c) public road safety education and campaign through mass media; (d) implementation of road safety action plan; (e) computerizing the Golden Quadrilateral national highway asset inventory; (f) CMUs consultant service; (g) a cross-state border road efficiency study; and (h) project preparation and sector studies.
Total Project Costs 750.10 99.2 583.10 99.0
Front-end fee 5.90 0.8 5.90 1.0
Total Financing Required 756.00 100.0 589.00 100.0
2. Key policy and institutional reforms supported by the project:
The GTRIP seeks to support NHAI's long term transition from an agency focusing on the delivery of national highway infrastructure to the one that will effectively manage the provision,
maintenance and operation of national highway assets on business principles. The recently completed institutional development study proposed an Institutional Development Strategy and a range of actions to improve NHAI efficiency and effectiveness. The TNHP will finance the implementation of immediate and short-term actions, which mainly focus on NHAI's capacity in project implementation, highway operation and maintenance, and on MORTH's capacity in overall planning, policy and regulations. The GTRIP focuses on institutional strengthening actions that would expand or complement the similar actions supported by TNHP. The main policies and institutional reforms supported under the TNHP and GTRIP as well as ADB's WTCP include: (a) keeping the NHAI lean by outsourcing to the private sector most of NHAI's functions related to design, construction, maintenance, operation, and collection of road network infornation and condition data; (b) making NHAI more responsive and accountable to users and stakeholders; (c) making NHAI more autonomous and financially independent; and (d) leveraging NHAI's limited resources with private financing to promote public-private partnerships in financing roads along viable corridors.
Moreover, the GTRIP will support two policy oriented studies: (i) a study on the poverty impact of highway development that will lay the ground work for measuring the impact of highway development on poverty reduction and on other social dimensions, so as to enhance NHAI's capacity to address highway project related poverty issues; and (ii) a national highway transport efficiency study that aims at consensus building for removing the freight traffic delays caused by cross-state border inspection and taxation. As part of the agreed institutional strengthening action plan between the Bank and ADB, ADB will support four key studies under the WTCP, namely (i) study of bond issues by NHAI and lessons learned; (ii) securitization study and development of an action plan for NHAI; (iii) a study to enhance NHAI's treasury functions; and (iv) a study of toll systems.
Road safety is another key policy area for intervention. Although both the Bank-financed Second National Highway Project and TNHP have a road safety component, road safety is still very much a "green" area for urgent public action, largely due to the rapidly growing magnitude of the problem. The GTRIP will support the implementation of a comprehensive road safety action plan, training, public education and campaign, as well as safety audit and hazardous location improvement works.
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3. Benefits and target population:
The major benefits include: (a) a reduction in transport costs, which will directly lower the economic costs of goods and services, widen markets, and promote regional trade and private business growth; (b) a reduction in road accidents and improved ability to alleviate the impact of traffic accidents, which will have significant implication to public health improvement and poverty reduction; (c) improved efficiencies in the utilization of public resources in the form of higher level of output per unit agency cost; and (d) greater participation of private sector in the provision of highway infrastructure and services.
The project will directly benefit the users of the national highways, roadside communities and businesses, and the cities, towns and rural areas directly served by the project roads. These benefits are mostly in the forn of (a) increased accessibility to markets, resources, jobs,
education, and health services, (b) improved security against economic shocks through access to alternative jobs and to emergency services, and (c) more job opportunities from the civil works during the project implementation and maintenance. These benefits will be measured through a project component--a study of the poverty impact of highway development--which will collect baseline and follow-up data for monitoring socioeconomic impacts, especially poverty impacts.
4. Institutional and implementation arrangements:
The project is prepared and will be implemented by NHAI with extensive outsourcing to the private sector and close coordination with the states of UP, Bihar, and Jharkhand. Within NHAI, implementation of the major works components is under the direct responsibility of a Chief General Manager, supported by 5 Project Directors on site, each in charge of one of the 5 construction packages. High-level State Project Coordinating Committees have been established in each of the three states to facilitate land acquisition, resettlement, utility shifting, forestry and other issues which may require coordination between NHAI and the states. Responsibility for land acquisition and resettlement and financing of all project-related costs will remain with NHAI.
NHAI has taken on state PWD engineers on deputation as well as specialists in environment, land acquisition, social and financial management to assist with project implementation.
The road safety component will involve NHAI, MORTH and the states where the project roads are located. While MORTH will be responsible for coordinating the implementation of the component, NHAI will be responsible for the procurement activities of the component. The cross-state border road efficiency study will be conducted under the general guidance of MORTH, and NHAI will be responsible for the procurement of consultant services.
Accounting and Internal Control Arrangements: NHAI has decentralized accounting
arrangements. Its on site project management teams prepare monthly trial balances which are sent to the headquarters. All projects are supervised by independent professional construction
supervision consultants. The contractor's bills are checked by the consultants in addition to ensuring quality control. Bills are also checked by NHAI technical and accounts staff before making payments to contractors. The process of development of the computerized integrated
financial management system initiated for TNHP, being implemented by NHAI, is now in
advanced stages and the system and its scope has now been widened to cover all NHAI activities and will not be limited to project related accounting. NHAI has a strong team of finance
professionals who will coordinate the consolidation and subrnission of reimbursement claims for the project. The internal audit function will be re-established and will assist management in improving financial management functions. They will also assist NHAI to update the manual on operational accounting policies and procedures.
D. Project Rationale
1. Project alternatives considered and reasons for rejection:
Some of the project alternatives considered were discussed in Section B-3.
Specific Investment Loan (SIL) vs. Adaptable Program Loan (APL). SIL is considered appropriate for this project, as the major physical investment of the project and its implementation timetable are clearly defined by the client. APL was considered as an alternative to support GOI's NHDP, but it was rejected on the ground that SIL is a better, more focused alternative for
addressing highway development related resettlement and relocation issues in India at this stage.
Moreover, the Bank's assistance to GOI's NHDP adopts a programmatic approach through a series of SILs. The long term commitment of this approach can provide the leverage and time frame needed to build step-by-step a program with stronger policy content in the sector. The project is designed to further enhance the institutional policy objectives of the TNHP and strengthen NHAI's planning, implementation and management capacity which at present would not be considered adequate for undertaking APLs. Similarly, subsequent national highway projects could be built upon the achievement of the objecti-ves of this project.
4-Laning vs. expressway. GOI recognizes that the development of an expressway network is necessary in the medium term for supporting trade and economic growth. However, land acquisition for expressway construction is extremely difficult and is expected to be very time-consuming. Four-laning mainly within the existing right-of-way is thus considered to be a reasonable compromise for meeting the urgent need for highway capacity, and is found to be economically attractive. Moreover, four-laning is considered to be necessary for reducing the
friction between fast and slow vehicles. Expressway development requires careful planning and strong institutional capacity to address environmental and social issues. Enhancing NHAI's capabilities in these areas is supported by the institutional strengthening component of this project.
National highways vs. state highways. Additional capacity is required for both national highway and state highway networks. This project focuses on the national highways in parallel with the Bank's state highway program in India. This project is also considered to be a timely
vehicle to help the central government implement urgent actions for road safety. Given the magnitude of the road safety issues in India, public actions are required at both national and state
levels, but the central govermment road agency should act as a national champion for road safety initiatives.
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Upgrading vs. maintenance. The national highway services can be improved through capacity upgrading, better maintenance, or a combination of both. This project focuses on upgrading works because improving road surface condition through clearance of maintenance backlog on the core national highways would not be sufficient for achieving the level of service required by the current and future levels of traffic. However, the project addresses the highway maintenance issue through support to the Corridor Management Units which will test the alternative maintenance contracts with the private sector. Moreover, the institutional development
framework agreed among NHAI, ADB, and the Bank sets forth a market-oriented approach for improving the maintenance practice, mainly through performance-based O&M contracts with the private sector.
2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned).
Latest Supervision
Sector Issue
j
Project (PSR) Ratings__ __ __ __ _ __ __ __ _ ____ _ _ _ _ _ _ _ _ _ _ _ _ _ Ba k f n n ed p o e t
Implementation Development
Bank-financed Progress (IP) Objective (DO)
COMPLETED or ONGOING
- Construction/rehabilitation of rural Bihar Rural Roads Project U U
roads (Cr. 1072-IN)
- Construction/rehabilitation of rural Gujarat Rural Roads Project S S
roads (Cr. 1757-IN)
- Capacity expansion of national First National Highways U U highway. Four laning and strengthening Project (Ln.2534-IN)
in four states
- Capacity expansion of state roads and States' Road Project U U institutional development of state road (Ln.2994-IN, Cr.1959-IN)
agencies
- Capacity expansion of national Second National Highways S S highways and institutional Project (Ln.3470, Cr.2365-IN),
strengthening of MORTH and NHAI and Third National Highways Project (Ln.4559-IN)
- Enhancement of institutional capacity State Roads Infrastructure S HS to prepare projects at the state-level Development Technical
Assistance (Ln.4114-lN)
- Capacity expansion, maintenance and Andhra Pradesh State Highway S HS institutional development of state road Project (Ln.4192-lN)
agency
Gujarat State Highway Project S S (Ln 4577-IN)
Karnataka State Highways Improvement Project (Ln 4606-rN)
-Widening and strengthening of two Infrastructure Leasing & S S state roads in Gujarat in a commercial Financial Services (Ln
format: Vadodara - Halol SH and 3992-IN; Cr. 2838-IN) Ahmedabad - Mahesana SH
PLANNED Proposed Kerala, Uttar
-Capacity expansion and maintenance Pradesh, Mizoram, Tamil of state roads and institutional Nadu, Orissa and Rajasthan development of state road agencies State Highways projects
(FY2001-03)
- Capacity expansion of national Fifth National Highway Project highways and institutional strengthening (FY2003)
of NHAI/MORTH
Other development agencies ONGOING
ADB - Capacity expansion of national First Highway Project, Second highways and institutional strengthening Highway Project, National
of NHAI/MORTH Highway Project, and
Surat-Manor Tollway Project.
- Japanese Bank for International Yamuna Bridge Project, Cooperation (formerly OECF) - National Highway Project.
Capacity expansion of national
highways and institutional strengthening of NHAI/MORTH
- ADB - TA for preparation of national Western National Highway highway project Corridor Study 1998/99 - ADB - TA for preparation of West Bengal, North-South investment plan and strategy for the Corridor Development, 1998/99 north-south corridor development in
West Bengal PLANNED
ADB - Capacity expansion of national Proposed Western Transport highways and institutional strengthening Corridor Project, 2001, of NHAI/MORTH National Highway Corridor I &
lI, 2002 and 2003
ADB - Capacity expansion of state Proposed Madhya Pradesh highways and institutional strengthening State Highway Project, 2002 of state road agency
IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)
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3. Lessons learned and reflected in the project design:
To varying degrees all projects initiated before the mid-i 990s have suffered from (a) poor quality at entry and, in one case, long delay for start-up; (b) weak institutional capacities for project management, and contract and consultant services administration; (c) inexperience in Bank's procurement methods; (d) inadequate inter-agency coordination; (e) inordinate delays in handing over project sites; (f) weak contractor capabilities and inadequate consultant capacity; (g)
excessive delays due to weak dispute resolution and decision mechanisms and also due to belated payments to contractors; and (h) lack of awareness and low degree of acceptance towards integration of environment and social issues in technical design.
A great deal of the above issues have been addressed during the preparation and implementation of the TNHP. For the current project, key aspects of the preparation process have included:
* Substantial attention to the implementation progress for TNHP.
* Much stronger engineering preparation using international consultants, larger construction packages and more thorough contractor prequalification. Very high degree of readiness for implementation would be achieved prior to loan approval, with all engineering designs completed and bids invited.
* Much stronger processes for environmental assessment, stakeholder consultation, land acquisition and resettlement, and government clearances. Full site readiness of substantial reaches of each package (sections to be handed over to the contractor on mobilization) will be a condition of contract award.
* Support and facilitate NHAI's effort to attract international road construction contractors to work in India in order to promote competition and technological improvement of India's construction industry.
4. Indications of borrower commitment and ownership:
The GTRIP and TNHP support GOI's NHDP, which was proposed by the Prime Minister's Taskforce in 1998, and is GOI's top priority infrastructure investment program. The Prime Minister took a comprehensive review of the program on May 26, 2000. NHAI has demonstrated strong borrower commitment and ownership through: (a) the successful preparation of the TNHP and GTRIP; (b) the satisfactory progress made so far in the implementation of TNHP; and (c) the agency's performance in the improvement of institutional capabilities during the last few years.
The TNHP became effective in October 2000. Since then, the agency has made significant progress in the procurement of civil works and consultant services, and in the institutional arrangement for implementing the project-related safeguard policies. Civil works contracts for over 70% of the total scope of the project have been awarded and mobilized. All these
experiences will be directly beneficial to the implementation of the GTRIP. NHAI has also made significant effort in the preparation of the GTRIP, especially the social and environmental safeguard measures.
5. Value added of Bank support in this project:
The most important contribution of the Bank in this sector is the knowledge of effective institutions, policies, financing and implementation mechanisms in other parts of the world, and experience with analysis of economic, social, environmental and poverty impacts of project. This project focuses on the strengths and weaknesses of current practices in the sector, and will mobilize technical expertise in examining and experimenting new approaches. Many of the procedures which have been put in place during the preparation of TNHP and the current project are now being adopted by NHAI for all of its project preparation activities, including
procurement, engineering, environment, land acquisition, resettlement, construction supervision and dispute resolution practices.
The Bank has been supporting NHAI's institutional development, and more broadly, facilitating the exchange of information between central government, states and the private sector.
Continued involvement of the Bank will facilitate institutional reforms in sound business management, accountability and responsiveness to external stakeholders (including prompt and accurate financial reporting consistent with national accounting standards), improved management of road assets and traffic flow efficiency and safety, and better planning, policy and regulatory capacity. The Bank is a key partner of the Global Road Safety Partnership, and has comparative advantage in providing technical assistance for road safety.
The Bank's financial participation is also important to the implementation of India's NHDP, before a more sustainable financial mechanism is developed for national highway development and maintenance. The project will not only provide needed funding, but also help mobilize other
financial sources through support to the public-private partnership.
E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4):
* Cost benefit NPVUS$908 million; ERR = 25.9 % (see Annex 4)
O Cost effectiveness
O Other (specify)
The highway upgrading component including contingencies represents 90% of the total project cost. Benefits were determined from savings in road user costs due to improved pavement condition, reduced traffic congestion, and increased separation of fast and slow moving traffic, and from savings in future maintenance costs arising from timely rehabilitation. The economic analysis was based on the well-established Highway Design and Maintenance Standards Model (HDM-III) developed by the Bank. Traffic volumes on the 7 selected packages ranged from 6,000 to 21,000 vehicles per day, including 65% to 90% trucks and buses. Various investment alternatives were examined in terms of number of lanes, pavement type and strength, service roads and bypasses. For the selected alternatives, the analysis showed Economic Rates of Return (ERR) of 16.7% to 45.3% with an overall rate of return of 25.9% and Net Present Value of US$
908 million. If benefits are reduced by 20% and costs increased by 20%, the overall rate of return
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is 19.3%. A switching values analysis indicates that the cost of highway upgrading works would have to increase by 175% or the benefits to drop by 64% before the NPV would fall to zero.
2. Financial (see Annex 4 and Annex 5):
NPV=JUS$ million; FRR = % (see Annex 4)
NHDP is the major expenditure program for the national highways for the next few years till 2008. It includes the upgrading of 13,000 km. core national highways and its total costs are estimated to be US$12 billion. NHAI is entrusted to deliver the program. NHAI was established under the 1988 National Highways Authority of India Act, and became operational in 1995. The Act requires NHAI to act on business principles in the discharge of its functions. The sources of NHAI funding include normal government budget, fuel levies (cess), bonds, tolls, and loans.
Levies of Rs. 1 per liter on petrol and diesel are collected under the Central Road Fund which was created through the Parliament legislation. A fixed share of the cess revenues is allocated to NHAI. It amounts to Rs 2,000 crores (or equivalent of US$ 435 million) in 2000/01, and is expected to increase with total cess revenues. For externally financed projects, NHAI will get
80% of the external assistance as grant from GOI, and 20% as loan that NHAI will be required to pay back to GOI, presumably through incomes generated from tolls, agency fee, etc. Moreover, all counterpart fund will come from NHAI's fund (mainly the cess).
NHAI currently has few independent assets and little independent revenues. There will be a financial gap between NHAI's current fund and the NHDP financial requirement. The gap is expected to be closed by borrowing, tolls, and private investment. The key is to develop a
sustainable national highway financial mechanism. GOI is taking initial steps in this direction. For example, a cess of Rs. 1 per liter on petrol and diesel was introduced by GOI in 1999. The revenues are earmarked as dedicated fund for the development and maintenance of national, state, and rural road infrastructure. A substantial portion of the revenues is allocated to NHAI for national highway development. With the assistance from ADB, NHAI is exploring various financial instruments (including bond issues, securitization, and toll systems) that would enable the agency to be more financially independent. A Rs 500 crores (or equivalent of US$ 110 million) National Highway Bond was recently issued. NHAI is also examining a market-oriented approach for funding road maintenance, possibly through performance-based O&M contracts with the private sector.
The substantial investment to be supported under the project is unlikely to crowd-out private fund for road investment, as private road financing is still at the experimental stage, and would not be mobilized fast enough to fund the urgently needed highway capacity. The project supports a public-private partnership for a BOT project, which is designed to attract additional resources
from the private sector. It is a pilot project expected to provide demonstration effect that would stimulate greater private sector financing.
Fiscal Impact:
The fiscal impact of the project is expected to be minimal, as GOI has made budget commitment to the NHDP and necessary policy provision to NHAI to tap other financial sources. Moreover, the budget commitment to the maintenance and development of the national highways is made in
a fixed portion of the total cess revenues which are expected to grow with increasing
motorization. The current cess revenues allocated to the entire national highway system (under MORTH and NHAI) amount to US$750 million a year.
3. Technical:
Capacity and safety of the project roads will be substantially improved through widening from two lanes to divided carriageways with at least four lanes and paved shoulders. Bypasses, service roads, grade separated intersections, raised embankments and provision for pedestrians and local traffic are provided as required to meet local conditions. Preparation studies considered
pavement alternatives of asphalt or cement concrete, and proposed a combination of the two, with additional provisions for strengthening quality oversight for newly introduced construction methods. Safety audit will be performed on the engineering design of all project roads and the
design will be modified according to the safety audit recommendations. The management of mixed traffic to achieve traffic efficiency and safety after the 4-laning will be carried out through the corridor management program to be supported by the project and facilitated in township areas by provision of parallel service lanes.
4. Institutional:
4.1 Executing agencies:
NHAI's capability to implement the current project, including environment and social safeguard policies, has been greatly strengthened through the implementation of the TNHP.
4.2 Project management:
The capacity of NHAI for project management will be further strengthened through project preparation and especially the implementation of TNHP. NHAI has mobilized a strong team in headquarters and on site to work closely with consultants and local authorities during project preparation, and this will continue during the implementation phase. Additional skills in land
acquisition, environment, resettlement and rehabilitation (R&R), and financial management are being built up.
4.3 Procurement issues:
No significant procurement issues are expected at this stage. If any issues emerge, they will be addressed based on the actual experience from the TNHP.
4.4 Financial management issues:
NHAI is also implementing the TNHP. The assessment and review of the financial management arrangements for the implementation of this project have focused primarily on the follow-up on actions agreed during the earlier appraisal.
The key issues that have been identified are as follows:
* There has been little opportunity to establish the adequacy of the financial management arrangements as no reimbursement claims or project management reports have been received by the Bank for the TNHP.
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* NHAI will seek the assistance of the internal auditors to be appointed to update accounting manual and merge it with financial management manual (first draft to be prepared by December 31, 2001).
* The computerized Project Financial Management System (PFMS) is in advanced stage of preparation. The PFMS will ensure that the project-specific financial reporting system is the product of mainstream accounting systems, and not limited to meeting just the Bank's requirement.
* The current business and accounting practices do not allow NHAI to work out project wise under or over absorption of their indirect costs. These costs are not directly allocated or attributed to projects but charged off to Profit & Loss Account to offset against agency commission income. It also implies that this percentage of works, capitalized as assets (as NHAI is the owner of the works) is treated as revenue income in the Profit & Loss Account.
This is contrary to standard accepted accounting practices. It is recommended that NHAI review this policy at the earliest.
* NHAI has not had internal audit done (except the internal reviews carried out by their own staff) since 1998-99. NHAI is currently in the process of preparing a short list of firms of chartered accountants to undertake the internal audit for the year 2001-2002.
NHAI is audited by the Controller & Auditor General of India (C&AG). NHAI needs to initiate discussions with the C&AG on ways to streamline the entire audit process in order to meet the time frame. NHAI will carry out a time-bound action plan detailed in Annex 6 for the
strengthening of the agency's financial management system. NHAI will work with a firm of chartered accountants to assist in the consolidation and finalization of the accounting statements by August 15, 2001, to meet the Bank's timeline for submission of audited statements and report.
Moreover, NHAI intends to convert its current disbursement system to the Project Management Report (PMR) based disbursement by January 1, 2003.
5. Environmental: Environmental Category: A (Full Assessment)
5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis.
Base EAs of the GTRIP and TNHP, together, from Agra to Barwa Adda section of the NlI-2, were carried out during 1998-2000. The approach adopted was a reiterative one in which
environmental issues were identified in successive levels of detail and specificity at each step in the process, and feedback from the stakeholders and public consultation process was incorporated.
Analysis of alternatives, community consultation and stakeholder involvement were key steps in the EA process. Since the beginning with TNHP, the EA process of the GTRIP has evolved, and addressed the potential impacts and mitigation measures in greater details. The Consolidated E1A
for the GTRIP and the 7 contract (package) specific Environmental Management Plans (EMPs) address impacts and propose adequate mitigation and environmental enhancement measures. An independent review summarizes that the EA and the EMPs adequately address the Bank's environment and social safeguard policies.
Key Environment Issues: Besides construction related impacts, the project may also lead to potential impacts from induced development especially along the bypasses, in the Gautam Buddha Wild life Sanctuary, and the Taj Trapezium Zone (TTZ). To address any unforeseen impacts on the Gautam Buddha Wildlife Sanctuary and the TTZ, a contingent fund of US$1.5 million is made
available in case of need for further impact study and implementation of further mitigation measures.
The TTZ covers an area of about 10,400 km and has been identified as the zone of influence for the protection of the Taj Mahal from pollution sources, especially air. Package I-A of the GTRIP traverses the TTZ (and the west end of Package I-B touches the TTZ), although at its nearest, it
is more than 10 km. away from the Taj Mahal or any other World Heritage sites, within the zone.
The GTRIP is in confornity with the TTZ Development Plan, which envisages highway widening to ease traffic congestion and reduce pollution (the initial 22 km. of Package I-A will be 6-laned, and the remaining 4-laned). Additional mitigation measures in the EMP include 10 m thick band of roadside plantation on either side of the highway. A detailed landscape plan has been prepared.
Due to intense agricultural activities in the region, natural forests along the project road have long been removed except in some parts such as Agra Reserved forest area (Package I-A, for a 2 km.
stretch), and the Kaimur Hills forest area (Package IV-C). The project acquires 0.5 ha. of the Agra Reserved forest area (Package I-A), and 2.35 ha. of the Kaimur Hills forest area (Package IV-C). The Agra reserved forest is a degraded area, the green cover is thin, and is used as a garbage dumping site. The Kaimur Hills Forest has been already reduced from dry deciduous to scrub land. The EMP for Packages I-A and IV-C propose, in addition to compensatory
afforestation, physical barriers to prevent any further dumping of wastes; closing access for trucks; regular policing and patrolling to prevent unwarranted intrusion in forest areas.
Package VB passes through 36.4 km. of protected forest area, 18 km. of which is through the Gautam Buddha Wildlife Sanctuary (no forest land is proposed to be acquired for the project).
The sanctuary exists in two parts on either side of the road, with the road passing through the buffer zone (400 m on either side of the highway had been designated as buffer when the
sanctuary was established. The road existed since the medieval age, and the area was declared as a sanctuary in the 1 970s). During the EA process, consultations included inputs from the
community as well as forestry and wildlife specialists. The EMP incorporates the Sanctuary Management Plan, developed by the Department of Forest and Wildlife. The EMP measures include check dams, water holes, screen plantation, animal underpasses, check posts, noise control, signage, closure of unregulated access for trucks, prohibition on extracting construction materials from within the sanctuary area. Adequate resources have been allocated for
implementation of these measures, including an additional sum of INR 5 million to be transferred to the sanctuary authorities linked to the progress of the implementation of the Sanctuary Management Plan. At the Project Management Unit (PMU) an additional Manager
(Environment) will be specially deputed for coordinating implementation of the EMP for Package V-B. A coordination committee is being constituted to oversee implementation of the EMP for Package V which includes mitigation measures specifically related to the project area. In
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concurrence with other relevant agencies, NHAI will issue the order creating the committee by July 31, 2001. Release of funds to the contractors will be linked to implementation progress in performance indicators agreed in the Bills of Quantities for all works undertaken. The NHAI Environmental Manager will be responsible for monitoring and oversight. The coordination committee will recommend whether further mitigation measures/additional funds will be necessary, and in consultation with the Bank, NHAI will decide on fund allocation from the aforementioned contingent fund of US$1.5 million.
The EA has studied the potential of induced development in detail, and identified the highway stretches which would be subjected to successive levels of urban-industrial development pressure in future. The EA desegregated these highway stretches into 8 different policy zones for
controlled/guided development, and sets of policies for each zone have been prepared. Effective control of ribbon development is an interdepartmental issue and is beyond just NHAI's purview.
However, budget allocation has been made in the EMPs to enable a policy dialogue at GOI level and NHAI. The Corridor Management Units, proposed as part of the project will coordinate these development controls.
Construction related issues and impacts: Improvement of the proposed highway is restricted to the existing right-of-way, except in the case of the 15 bypasses. The project requires a large volume of material excavation, procurement and transport; use of potable water (for concrete pavement); setting up of stone-crushers, hot-mix plants and concrete batch plants, transport and round-the-clock laying of concrete, etc. Additional impacts will result from spills of oil, fuel, lubricants and bitumen, and operation of borrow areas, quarries and construction camps. These impacts will be managed by implementation of the EMPs, which contain good environmental management and mitigation measures, conservation and prevention measures, redevelopment plans and a substantial tree plantation program.
5.2 What are the main features of the EMP and are they adequate?
Detailed EMPs include implementation schedule, monitoring program, budget, institutional arrangements, and integration of the proposed mitigation measures into the contract. The EMP measures include road landscape and plantation; preventive measures for minimizing
air/noise/water pollution; protection and restoration of surface water bodies (cascades, silt-fencing, sedimentation chambers, oil interceptors), groundwater recharging pits; gabion structures, turfing, reinforced earth walls and brick/stone pitching to prevent erosion;
conservation and redevelopment borrow areas; use of fly ash; noise enforcement measures and noise barriers (especially in front of schools and hospitals); provision of underpasses for
livestock/animals; and pedestrian and other local facilities, etc. NHAI's Roadside Tree Plantation Strategy covers all plantation regimes (compensatory, roadside, median, and possibility of transplantation), coordination of NHAI with the Forest department including management of funds.
Each EMP contains enhancement plans for several sites (altogether about 100), which are
important from environmental, ecological or community point of view. All enhancement plans are complete with implementation designs and bill of quantities.
As part of the evolving EA process since TNHP, the consolidated EA for GTRIP also addresses issues such as gender in construction management (including involving women as managers during construction) and health issues such as the spread of HIV/AIDS. The EMPs provide such recommendations that are in the purview of the project and can be facilitated or coordinated by NHAI, such as a health management plan at the construction site, and safety plan during
construction.
The EMPs also provide for further and contingency actions. A pilot study on HIV is proposed.
The project also includes a road safety component and involves a road safety audit of the
engineering designs. With respect to Forests and Protected areas, major efforts are being made by NHAI through EMPs to revitalize these areas within the Corridor of impact. In particular, NHAI has provided US$1.5 million under the GTRIP for additional safeguard measures. This fund will be made available in case of need for further study and mitigation measures relating to the TTZ
and the Gautam Buddha Sanctuary.
5.3 For Category A and B projects, timeline and status of EA:
Date of receipt of final draft: February 2001 (Consolidated EA and EMPs for selected contract packages)
5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted?
Since the project has been developed through a participatory process, stakeholder consultations were carried out as part of the Environment and Social Assessment process at different stages during project preparation and will continue through the rest of the project cycle. This has been documented in the EA report in the Chapter on Community Consultations. In the same token, NHAI will be conducting workshops in March 2001 to build further consensus to involve the people in implementation of the EMPs that have been developed.
Community consultation was carried out at the Screening, Feasibility and during the Social/Environment Assessment of the project. The different consultation means included door-to-door personal interviews, village meetings, focus group discussions, and consultation with experts and NGOs working in the area. Additionally, various stakeholders were consulted (in
13 separate consultation sessions) and as per the GOI, MOEF guidelines, 9 district level public hearings were conducted.
The key stakeholders consulted were the urban, semi-urban and rural people, some of them who may lose land or properties; communities, which may be impacted by increased traffic and safety concerns; and hospitals, schools, and libraries, which may be impacted; road users including road user associations; government officials from the line departments; local government agencies including village level 'panchayats'; NGOs and community based organizations (CBOs) working in the region; experts including forestry, wildlife and environmental professionals.
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The Base EAs were disclosed by NHAI in March 2000 to the Public in the affected districts. The Consolidated EA and the EMPs for the GTRIP have been disclosed at project affected sites and the Bank's Project Information Center (PIC) both in Washington and New Delhi in January 2001.
Further details on consultations are described ahead in Section 6.2 and 6.3.
5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environnment? Do the indicators reflect the objectives and results of the EMP?
Institutional measures: Independent consultants, procured through International Competitive Bidding (ICB) will act as the Supervision Consultants (SC) or Engineers, and will be responsible for implementing and monitoring all aspects of the project. Four such consultants will be engaged, each with an Environmental Specialist. The PMUs of NHAI will be staffed, among others, with Managers (Environment). The Environment and Social Management Unit at the NHAI Corporate Office will coordinate the implementation of environmental components of the project. Training of the NHAI staff, the SC and the Contractors' personnel will be undertaken as per the training plan prepared as part of the EMPs. The training plan considers immediate and construction related, medium-term and long-term environmental issues in highway development program.
Monitoring: Day-to-day monitoring of the project is the responsibility of the SC. Further monitoring by the PMU and the NHAI Corporate is proposed. Detailed monitoring and reporting formats have been prepared, covering all aspects of the EMPs. During construction period, the contractor will report to the SC once a month on implementation of the EMPs, and compliance.
Similarly, the SC will report to the PMU every month, and the PMU will submit quarterly reports to the NHAI Corporate. Quarterly reports will be submitted by the NHAI to the Bank.
Environment performance indicators have been developed to reflect the objectives and results of the EA in the EMP. To ensure effective monitoring of the EMPs, monitoring formats include monitoring of performance indicators, as part of the supervision strategy for the project.
6. Social:
6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes.
The project is expected to result in social benefits through improved access and linkages of backward areas. It involves Resettlement & Relocation (R&R) of affected and displaced titleholders, squatters and encroachers. A social irnpact assessment has been carried out during the project preparation, consisting of the following: (i) early screening as part of project feasibility studies; (ii) public consultation; (iii) preparation of a project specific R&R entitlement framework consistent with GOI's and the Bank's Operational Directives (OD) 4.30 and 4.20; (iv) census and baseline socioeconomic survey of the potentially affected population; and (v) preparation of a time-bound RAP.
A full census was undertaken to document the status of the potentially affected population within the project impact area, with respect to their assets and sources of livelihood. This provided the basis for establishing a cut-off date for determining who may be entitled to relocation assistance or other benefits from the project. A detailed socioeconomic survey of a sample of the potentially
