Tripartite Review Meeting OOTY Dated: 21 st July 2008

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Tripartite Review Meeting

OOTY

Dated: 21st July 2008

J&K Economic Reconstruction Agency J&K Govt. Nodal Agency for Implementing External Aided Projects

Economic Reconstruction Agency (ERA) Government of Jammu and Kashmir, ist Floor Cottage Arts Emporium, Boulevard, Srinagar

13C/C, Near Aquaf Market Gandhinagar, Jammu, J & K 180004 Tel.: 0191-2549664/2455412/2455198 Fax:0191-2547133/ 2455153 Email: [email protected]

http://www.jkera.org

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Contents

Loan 2151-IND

1 Action Taken Report.

2 Financial Progress.

Loan 2331-IND

1 Progress.

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Action Taken Report

Action Taken Report of Tripartite Country Portfolio Review Meeting 7-8 April 2008

Loan 2151-IND: Multi-sector Project for Infrastructure Rehabilitation in Jammu and Kashmir

Decision of the meeting Action Taken

DEA expressed its serious concern at a very slow progress under this loan, with cumulative disbursements of about $37 million (15%) of the loan amount after 35 months of loan effectiveness and strongly advised Economic Reconstruction Agency (ERA) to expedite the project implementation to complete the project within current loan closing date of 30 Dec 2009, after which no further extension will be granted.

The cumulative expenditure Apppox. $58 million (23%) of loan value till date has shown a considerable rise. The cumulative disbursement up to march ending 2008 of $45 million as per ADB LFIS (18%) has been achieved. It is expected that most of the sub project shall be completed within stipulated time.

ADB Requested ERA to prioritize the remaining indicative subprojects and prepare a separate project under JKUSDIP MFF for subprojects that cannot be financed under the present loan due to lack of funds as a result of cost escalations, additional shifting of utilities and Indian Rupee appreciation against the Dollar.

An additional Project (PFR-2/Tranche-2) to accommodate the urban sector spill-over sub-projects identified under MIRP 2151-IND has been agreed to by ADB/DEA. A meeting to discuss modalities was held at ADB office between ADB officials and ERA officials led by CEO ERA on 16 May 2008. The targets for completion of documentation w.r.t identified sub-projects were fixed. Subproject appraisal reports & design reports for most of the subprojects have been prepared. ADB mission visited ERA on 17-18 July 2008 to review the preparedness of PFR-2. It is expected that loan agreement for Project-2/Tranch-2 will be signed before 31-Dec-2008 for appox $60 million.

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Action Taken Report

ADB Emphasized the need for ERA to strengthen its contract management and ask contractors to increase resources in order to ensure proper and timely execution of works. ERA needs to ensure proper implementation and regular monitoring of resettlement and environmental management plans with reports send for ADB,s review. ERA informed that Project Manager (Transport) for Jammu has been recently posted.

Contract being monitored DSC and PMC. Additional position of Contract Specialist being mobilized through PMC to strengthen Contract Management activity in legal terms.Implementation of EMP’s being monitored and reported to ADB on regular basis.SRP’s for most of the subprojects have been prepared. ERA is in process of hiring implementation agency to deal with social issues.

ADB Requested ERA to urgently resolve the issue of inadequate staffing of project consultants, particularly staff required for construction supervision.

Project Consultants have deployed additional Field Engineers for better construction supervision. Some additional positions of construction supervision personnel where ever needed agreed. Consultants are in process of deploying the more additional approved positions.

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Action Taken Report

ADB raised its concern for delay on transfer of SGIA funds by Center Govt. to State Govt. and requested CAAA to resolve the matter. CAAA informed that SGIA funds are transferred generally in a week time to state government and delay occurs within the state to reach funds to the EA,s. CAA further assured its support to resolve this matter expeditiously.

Delay occurs at the level of Plan Finance division, Deptt. Of Expenditure Govt. of India on which state govt. has no control. J&K ERA follows the practice of crediting the SGIA equal to Rupee equivalent of $2.53 million immediately on receipt of confirmation from ADB regarding the reimbursement of the same. This is being done in view of Loan Covenants.

ERA confirmed that disbursement target of $40.3 million for 2008 is achievable.

The disbursement achieved so far ($11.2 million, as per ADB LFIS) for 2008 is an indicator of the target being achieved as per committed date.

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Loan 2331-IND: Jammu and Kashmir Urban Sector Development Investment Program- Project1.

Action Taken Report

Decision of the meeting Action Taken

DEA advised ERA to prepare detailed implementation plan on an annual basis for this first project approved under MFF as to ensure project completion by 31 Oct 2012.

Implementation schedule prepared and procurement activities being monitored.

ADB requested ERA to complete land acquisition process and implement the RP’s for Srinagar SWM subproject before May 2008 and that of Jammu BC road subproject before August 2008 timely execution of contracts.

Implementation of RP in case of SWM subproject under process; Private negotiation with the affected people failed, HLC referred case to Financial Commissioned Revenue for Compulsory Land Acquisition.In case of BC road subproject Section 4 issued. Feasibility of proposed scope being reexamined. Possibility of change in scope of work ; Land acquisition kept in abeyance.

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Loan 2331-IND: Jammu and Kashmir Urban Sector Development Investment Program- Project1.

Action Taken Report

ADB raised its concern at delay in constituting high powered committee comprising of Divisional Commissioners Secretary, Head of Departments and Collector to facilitate land acquisition and advise ERA to expedite the same.

High Level Committee at Regional level to deal with acquisition issues is in place. ERA’s acquisition cases are being dealt by this HLC.

ADB requested GoJK to strengthen the capacity of ERA by appointment of additional and dedicated technical and support staff for the investment program including two senior level officers; one for overseeing implementation and ensuring compliance with safeguard requirements and the other to oversee capacity building and institutional development activities.

Post of Director responsible to handle implementation of JKUSDIP is created in ERA. A senior Officer was posted to ERA who retired on 30th June 2008. Replacement for the same is under process. The proposal for creation of senior positions that of Director Safeguards and Director Governance has been mooted for accord of approval by the Government.

ERA confirmed that disbursement target of $.3.9 million is achievable. Contract worth $0.42 million awarded, Consultancy $7.5 million and civil work contracts of $32 million are in process of award.

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Loan 2151-IND Financial Progress

A. Contracts Awarded(million dollars)

Year Target(m$)

Achievement(m$)

Variation(m$)

% Achievement

2005 21.00 5.109 15.891 24.33%

2006 74.30 70.363 3.937 94.70%

2007 135.80 83.906 51.894* 61.79%

2008 (1st quarter)

52.80 16.899 35.901 32%

2008 (2nd quarter)

29.57 7.69 21.88 26%

183.967 ╤

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B. Disbursements (million dollars)

Year Target Achievement Variation % Achievement2005 2.00 2.53** (+) 0.53 126%

2006 11.80 6.95 4.850 59%

2007 28.00 23.837 4.163 85.13%

2008 (1st quarter) 6.00 1.72 4.279* 28.68%

2008 (2nd quarter)

12.21 9.431 2.779 77.24%

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Rs. In Crores

3.6614.28

54.01

87

175

315

438.38

0

50

100

150

200

250

300

350

400

450

500

Expenditure (Exponential Growth )

Rupees In Crores 3.66 14.28 54.01 87 175 315 438.38

31/12/2005 30/06/2006 31/12/2006 30/06/2007 31/12/2007 30/06/2008 31/12/2008 (Projected)

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Loan 2331-IND Project Progress

Approved Packages under Loan 2331-IND (Project-1)S.No Contract Package Region Sector Sub

Sector Tentative Cost (Rs. in Crores)

Status

1 Sewerage Network Phase II Jammu Urban Drainage 103.84

• TBER for Sewerage Sytem (3 Lots) Submitted to ADB on 10/07/2008• IFB for Construction of 30 MLD STP issued on 01/07/2008.

2Raw Water DI Pipeline Rangil-Harwan Srinagar Kashmir Urban

Water Supply 25.96

Bids received, perceived unreasonably high. Cancellation recommended.

3Sanitary Landfill Site Srinagar Kashmir Urban Drainage 11.44

PBER ready for submission to ADB.

4 BC Road Improvement Jammu Transport Roads 18.04

•Feasibility of proposed scope being reexamined. Possibility of change in scope of work

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Thanks for

Your Time

JAMMU

KASHMIR

Documents

Tripartite Review Meeting OOTY Dated: 21 st July 2008