Document o f The World Bank

FOR OFFICIAL USE ONLY

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN

IN THE AMOUNT OF US240.0 million

TO

THE GOVERNMENT OF INDIA

FOR THE

ALLAHABAD BYPASS PROJECT

SEPTEMBER 9,2003

Energy and Infrastructure Unit India Country Management Unit South Asia Regional Offce

Report No: 26753-IN

7- I This document has a restricted distribution and may be used by recipients only in the performance of their official duties. I t s contents may not be otherwise disclosed without World Bank Authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective July 7, 2003)

Currency Unit = Indian Rupee (INR) INR1.OO = US$0.021 US$l.OO = INR46.90

ABP ADB BOT CAS CAG CRF EA EMP EOP ERR ESW FMS GO1 GTRIP ICB ICR MOEF MORTH MTR NGO NHAI NHDP NPV PAF PFMS PIU RAP ROW R&R SPCB STD TNHP UP

FISCAL YEAR April 1 -- March 31

ABBREVIATIONS AND ACRONYMS

Allahabad Bypass Project Asian Development Bank Build, Operate and Transfer Country Assistance Strategy Comptroller and Auditor General Central Road Fund Environmental Assessment Environmental Management Plan End o f Project Economic Rate o f Return Economic and Sector Work Financial Management System Government o f India Grand Trunk Road Improvement Project International Competitive Bidding Implementation Completion Report Ministry o f Environment and Forests Ministry o f Road Transport and Highways Mid-tenn Review Non Governmental Organization National Highways Authority o f India National Highway Development Program Net Present Value Project Affected Family Project Financial Management System Project Implementation Unit Resettlement Action Plan Right o f Way Resettlement and Rehabilitation State Pollution Control Board Sexually Transmitted Disease Third National Highway Project Uttar Pradesh

Vice President: Praful C. Pate1 Country ManagedDirector: Michael F. Carter

Sector Managermirector: Guang Zhe Chen Task Team Leader/Task Manager: Zhi Liu

FOR OFFICIAL, USE ONLY

INDIA ALLAHABAD BYPASS PROJECT

CONTENTS

A. Project Development Objective

1. Project development objective 2. Key performance indicators

B. Strategic Context

1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 2. Ma in sector issues and Government strategy 3. Sector issues to be addressed by the project and strategic choices

C. Project Description Summary

1. Project components 2. Key policy and institutional reforms supported by the project 3. Benefits and target population 4. Institutional and implementation arrangements

D. Project Rationale

1. Project alternatives considered and reasons for rejection 2. Major related projects financed by the Bank andor other development agencies 3. Lessons learned and reflected in the project design 4. Indications o f borrower commitment and ownership 5 . Value added o f Bank support in this project

E. Summary Project Analysis

1. Economic 2. Financial 3. Technical 4. Institutional 5 . Environmental 6. Social 7 . Safeguard Policies

Page

2 2

2 2 4

10 10 11 11 12 14 16

F. Sustainability and Risks

1. Sustainability 17

This document has a restricted distribution and may b e used b y recipients only in the performance o f their official duties. I t s contents may not be otherwise disclosed lwithout W o r l d Bank authorization.

2. Critical r isks 3. Possible controversial aspects

G. Main Loan Conditions

1. Effectiveness Condition 2. Other

H. Readiness for Implementation

I. Compliance with Bank Policies

Annexes

Annex 1: Annex 2: Annex 3: Annex 4: Annex 5: Annex 6:

Annex 7: Annex 8: Annex 9:

Project Design Summary Detailed Project Description Estimated Project Costs Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary Financial Summary for Revenue-Earning Project Entities, or Financial Summary (A) Procurement Arrangements (B) Financial Management and Disbursement Arrangements Project Processing Schedule Documents in the Project File Statement o f Loans and Credits

Annex 10: Country at a Glance Annex 1 1 : Environment & Social Assessment, EMP and RAP

17 17

18 18

18

19

20 22 23 24 28 29 35 39 40 41 45 47

MAP( S)

India: Allahabad Bypass Project

INDIA Allahabad Bypass Project

Project Appraisal Document South Asia Regional Office

SASE1

late: September 9,2003 Team Leader: Zhi Liu Sector ManagedDirector: Guang Zhe Chen Sector(s): Roads and highways (100%) Zountry ManagedDirector: Michael F. Carter Theme(s): Infrastructure services for private sector 'roject ID: PO73776 development (P), Other financial and private sector ,ending Instrument: Specific Investment Loan (SIL) development (SI, public expenditure, financial management

and procurement (S) Project Financing Data [XI Loan [ ] Credit [ ] Grant [ ] Guarantee [ ]Other:

For LoanslCreditslOthers: Loan Currency: United States Dollar Amount (US$m): 240.00 Borrower Rationale for Choice of Loan Terms Available on File: Yes Proposed Terms (IBRD): Variable-Spread Loan (VSL) Grace period (years): 5 Commitment fee: 0.75%

BORROWER 80.20 0.00 80.20 [BRD 153.05 86.95 240.00

Years to maturity: 20 Front end fee (FEF) on Bank loan: 1.00%

ing Plan (US$m): Source Local

rotal: 233.25 I 86.95 I 320.20 Borrower: GOVERNMENT OF INDIA Responsible agency: NATIONAL HIGHWAYS AUTHORITY OF INDIA Address: National Highways Authority o f India, Plot No. G5 & G6, Sector 10, Dwarka, New Delhi Contact Person: Nirmaljit Singh, Member (Technical) Tel: 91-1 1-2509-3523, 91-1 1-2507-4100 Fax: 91-1 1-2509-3507 Email: nhai@vcnl.com

Estimated Disbursements ( Bank FY/US$m):

Project implementation period: Five years Expected effectiveness date: 01/15/2004 Expected closing date: 03/3 1/2009

cs "AD iDl"l li." mm. m

A. Project Development Objective

1. Project development objective: (see Annex 1)

The Allahabad Bypass Project (ABP) aims to (i) reduce transport constraints on national economic activity, and (ii) improve institutional capabilities to manage road programs, assets, and services on a more commercial basis. It i s the third Bank loan to support the Government o f India's (GOI) National Highway Development Program (NHDP), which aims to upgrade 13,000 km o f core national highways network by 2007. The f irst two loans, namely the Third National Highway Project (TNHP) and Grand Trunk Road Improvement Project (GTRIP), were approved in June 2000 and June 2001, respectively. All three projects finance the upgrading o f National Highway 2 between Delhi and Kolkata (with the ABP taking up the last remaining stretch of 84.7 km), and support institutional strengthening actions under an institutional development framework agreed with the borrower.

2. Key performance indicators: (see Annex 1)

The performance indicators to measure the achievement o f development objective by end of project (EOP) include: (i) vehicle travel time along the project comdor reduced by at least 30% by EOP; (ii) truck operating costs reduced by at least 10% by EOP; (iii) increased private sector participation in the operations and maintenance o f national highways; (iv) road safety records improved on project roads; and (v) user satisfaction surveys conducted regularly. The performance indicators used during project implementation include: (i) civil work contracts including Environmental Management Plans delivered to time, budget, cost and safety requirements; (ii) Resettlement Action Plan implemented on t ime and satisfactorily; and (iii) road user satisfaction surveys implemented according to agreed timetable and in expected effect.

B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: R2001-0037/1 [IFC/R2001-0037111

The CAS identifies highway infrastructure bottlenecks as one o f the major constraints to poverty reduction and private sector-led growth. The project supports the CAS sector goal o f reducing highway infrastructure bottlenecks. I t i s also designed to contribute to the two important areas emphasized by the CAS: (i) improving government capability and effectiveness to deliver core public services that are vital for economic growth and poverty reduction; and (ii) promoting private sector-led growth through provision o f adequate infrastructure. The bypass i s part o f a trunk national highway passing through the states o f Uttar Pradesh, Bihar and Jharkhand which are among the less developed states in India. The project i s expected to help enhance the ability of these states to participate in the economic growth and trade that i s taking place to a larger extent elsewhere in India.

Date of latest CAS discussion: 4/5/2001

2. M a i n sector issues and Government strategy:

With a total length o f 58,100 km, the national highway network i s divided into two parts, the NHDP (13,000 km) and non-NHDP (about 45,000 km), which are managed by the National Highways Authority o f India (NHAI) and the Ministry o f Road Transport & Highways (MORTH), respectively. NHAI was established under the NHAI Act o f 1988, and was entrusted by GO1 to implement the NHDP in 1998. The management o f non-NHDP network remains with M O R T H who has long been responsible for the national highways mainly through delegating considerable responsibilities to state public works departments. The national highway network accounts for about 1.8% o f the total road network but carries over 40% o f the

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total road traffic. Despite i t s obvious importance in India's economy, the performance o f national highways has been poor by international standards due primarily to the following main sector issues, which are also examined in the latest Economic and Sector Work (ESW), India's Transport Sector: The Challenges Ahead, published in M a y 2002:

Serious road capacity constraints on the core national highways network. With steady economic growth during the last 12 years, traffic on the national highways have increased 6 to 7.5% a year. The trunk national highways are increasingly congested. However, over 90% o f the national highways are two-lane or narrower roads.

Poor management of road infrastructure services. The level o f service on national highways i s further worsened by the mixed traffic o f fast and slow vehicles, and encroachment activities on the rights-of-way (especially those passing through urban and semi-urban areas). I t takes 4 to 5 days for a truck to go one way between Delhi and Kolkata (about 1,400 km). The poor driving condition due to mixed traffic on the two-lane national highways i s a major contributing factor to traffic accidents. The death rate per 10,000 vehicles in India i s around 10 times the levels seen in European Union, and 38% o f the road accidents in India occur on national highways.

Inadequate institutional capacity for the development, management and operation of national highways. While institutional capacity has been significantly developed during recent years, there are areas that require major improvement. I t i s widely recognized that India needs an expressway system to meet the growing road transport demand, but previous studies and proposals did not go beyond the conceptual level. Detailed alignment planning for the core expressway network i s much needed. The user-responsiveness mechanism remains to be built into the national highway management system. And ski l ls to manage and modernize the road construction industry need to be developed.

Limited private sector participation in road financing. The financial requirements for increasing national highway capacity through 4-laning, 6-laning, and expressway construction are enormous, and exceed the funds that could be raised by the public sector. Currently, the major public funding comes from a dedicated Central Road Fund (CRF) with revenues from a fue l cess (tax). The allocation to national highways amounts to just Rs. 2000 crores a year, far below the funding level required. Private sector financing i s evolving but s t i l l limited. While NHAI has reached financial closure for some annuity-based Build, Operate and Transfer (BOT) projects and created 12 Special Purpose Vehicles to raise funds, various modalities o f private sector financing and Public-Private Partnerships need to be tested and applied to cover more projects.

Government strategy. The NHDP i s the center piece o f GO1 strategy to remove national highway capacity constraints on economic growth. The cost o f the program i s US$12 bil l ion over eight years (ending in 2007), and funding sources include government grants, fue l levies, tolls, bonds, private investments, and loans from international development banks. In 1999, GO1 established the CRF through a cess o f Rs. 1 per litre each on petrol and diesel, and earmarked a substantial portion o f the CRF for national highway development, maintenance, and operation. GO1 also amended the National Highway Act and developed policy guidelines to permit private financing o f highways. In 2002, GO1 raised the fue l cess to Rs. 1.5 per l i tre on both petrol and diesel. Road institutional reforms for more effective delivery o f road infrastructure services are also part o f the government strategy. Before 1998, nearly all national highways responsibilities, from policy and planning to civil works implementation and maintenance, rested with MORTH. Assigning the NHDP to NHAI was a major step towards the separation o f implementation functions from the government policy-making. The NHAI Act requires NHAI to discharge i t s functions on business principles as far as possible, and as a result, the agency has maintained a lean organization by outsourcing most o f i t s activities to the private sector. With technical assistance from the Bank and ADB,

- 3 -

NHAI has taken significant steps to develop institutional capacity in the direction o f commercial management o f national highways.

Component

1. Bypass construction including supervision, land acquisition and resettlement, and environmental management.

2. Corridor management

3. Institutional strengthening

3. Sector issues to be addressed b y the project and strategic choices:

Indicative costs

(US$M) 296.30

2 1.20

0.30

In addition to supporting national highway capacity augmentation, the ABP w i l l fund performance-based contract to the private sector for the operations and maintenance o f national highways, and support NHAI to enhance i ts user-responsiveness. These are in line with the specific recommendations o f the transport sector ESW completed in 2002. Other sector issues highlighted above are being addressed through the on-going TNHP and GTFUP. Moreover, the technical assistance for expressway planning and road construction industry training, which was proposed during the preparation o f ABP, will be implemented under other Bank funded projects. The strategic choices for ABP, in terms o f what public agencies to support, what financing options to adopt, and what highway corridors to finance, were results o f the Bank programmatic approach to supporting the NHDP and a joint road sector assistance strategy with ADB. All institutional actions supported under these three projects are defined under the same institutional development framework agreed by NHAI, Bank, and ADB.

Bank- financing (US$M) 22 1.26

16.07

0.27

C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown):

% of Bank-

financing 92.2

6.7

0.1

Bypass construction: The component will fund the construction o f the 84.7 km bypass, which i s located at the northern outskirts o f Allahabad City. The bypass w i l l be an access controlled highway, with a 1 km bridge over the Ganga River. Tol l plazas and rest areas will also be provided.

Corridor management: The component will fund the procurement o f private operators under performance based contracts for the operations and maintenance o f Ahmedabad-Vadodra Expressway or selected national highway stretches, and the procurement and installation o f toll collection systems and automatic traffic management systems.

Institutional strengthening: This component will fknd independent and periodic surveys o f road users and road sector stakeholders during the project period, to determine the level o f their awareness, involvement and satisfaction with the delivery, management and operation o f national highways by NHAI.

% of Total

92.5

6.6

0.1

Total Project Costs I 3 17.80 I 99.3 I 237.60 I 99.0 Front-end fee I 2.40 I 0.7 I 2.40 I 1 .o

Total Financing Required I 320.20 I 100.0 I 240.00 I 100.0

- 4 -

2. Key policy and institutional reforms supported by the project:

The main policies and institutional reforms supported under TNHP, GTRIP, ABP, as well as ADB's Western Transport Corridor Project include: (i) keeping the NHAI lean by outsourcing to the private sector most o f NHAI's functions related to design, construction, maintenance, and operations; (ii) making NHAI more responsive and accountable to users and stakeholders; (iii) making NHAI more autonomous and financially independent; and (iv) leveraging NHAI's limited resources with private financing o f highways through public-private partnership. Specifically, TNHP supports NHAI's capacity building in the areas o f project implementation, accountability, strategic planning and asset management. GTRIP focuses on private sector participation, road safety, and social and environmental safeguard management. ABP will support NHAI to further develop user responsiveness mechanism.

3. Benefits and target population:

The major benefits include: (i) a reduction in transport costs, which will directly lower the economic costs o f goods and services, widen markets, and promote regional trade and private business growth; (ii) a reduction o f motor vehicle pollution and traffic accidents in the built-up area o f Allahabad city; (iii) improved efficiencies in the utilization o f public resources in the form o f higher level o f output per unit agency cost; and (iv) greater participation o f private sector in the provision o f highway infrastructure and services.

The project w i l l benefit the users o f the national highways, the city o f Allahabad, and rural areas directly served by the project road, mostly in the form of: (i) reduced transport costs and travel time; (ii) increased accessibility to markets, resources, jobs, education, and health services; (iii) improved security against economic shocks through access to alternative jobs and to emergency services; and (iv) job opportunities from the civil works during the project implementation and maintenance.

4. Institutional and implementation arrangements:

NHAI will be the implementing agency for the bypass construction, corridor management component, and road user surveys. At the field level, an existing on-site Project Implementation Unit (PIU), which i s implementing the TNHP civil works near Allahabad, will also implement the bypass. A high-level State Project Coordinating Committee in Uttar Pradesh, which has been functional for TNHP and GTRIP, w i l l facilitate land acquisition, resettlement, utility shifting, and tree cutting and re-plantation for the bypass. Responsibility for land acquisition and resettlement and financing o f all project-related costs w i l l remain with NHAI.

NHAI has decentralized accounting arrangements. At the field, the PWs manage contracts and expenditures, coordinate day to day project activities, account for project transactions, and perform financial management system data entry, authorization and payment. All c iv i l works 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. A team o f finance professionals at the NHAI headquarters will coordinate the consolidation and submission o f reimbursement claims for the project. A computerized integrated financial management system (FMS) has been developed and functional. An internal audit function has been established. Project related expenditure will be scrutinized by the Comptroller and Auditor General (CAG).

- 5 -

D. Project Rationale 1. Project alternatives considered and reasons for rejection:

Sector Issue

Bwass alignments. The existing national highway stretch between the two ends o f the proposed bypass i s about 75 km long, with the middle section passing through the historical city o f Allahabad. Motor vehicle traffic level, measured in annual average daily traffic (AADT) varies from 7,900 to 27,800, plus a large number o f non-motorized vehicles (ranging from 2,800 to 17,600 AADT). Motor vehicle speeds range from 27 to 50 km per hour. The feasibility study considered 3 upgrading options along the existing national highway (fully elevated, partially elevated, and at grade) and 6 bypass alignments (including one southem alignment and five northem alignments). The southem bypass would have to cross the Yamuna River and Ganga River, and the five northem alignments are associated with the locations o f a bridge across the Ganga River. The three options along the existing national highway were rejected due to expected adverse environmental impact o f growing traffic on the city population as well as high costs of elevated structure. A preferred northem bypass alignment was selected based on a careful alignment analysis and selection process that included public consultation in the entire project area surrounding all alignments. I t i s estimated that more than 40% o f the current traffic, mainly trucks, will be diverted to the bypass. Economic analysis shows that the bypass i s economically viable (see Annex 4).

Tolled bypass. The bypass w i l l be tolled in line with GOI's policy to toll the entire NHDP network after upgrading. The decision on what toll system to adopt and when to implement it w i l l be pending on the tolling strategy under consideration by NHAI. The bypass engineering design will consider future toll booths.

Private financing such as BOT for the bwass. I t could be applied, but was rejected because GO1 had made a budget commitment to this priority stretch, scheduled to be completed by year 2005. India's experience in BOT i s limited. A B O T project would involve substantial uncertainties and therefore high likelihood for delays.

Improvement o f existing national hiehwav stretch to serve Allahabad City. The bypass will carry a substantial portion o f the traffic passing the city. After i t s opening, the existing national highway stretch will be transferred to the local government. The project could support improvements on the stretch such as bus lanes, bicycle lanes, and traffic calming, but the idea was rejected because substantial complication would arise when both central and local governments are implementing one project under the current jurisdiction system.

Project

2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned).

Bank-financed COMPLETED or ONGOING - Capacity expansion o f national highways and institutional strengthening o f MORTH and NHAI

Second National Highways Project (Ln.3470, Cr.2365-IN), Third National Highways Project (Ln.4559-IN), and Grand Trunk Road

(Bank-fjnance Implementation

Progress (IP)

S

Latest Supervision (PSRI Ratings

Drojects only) Development

Objective (DO)

- 6 -

- Enhancement o f institutional capacity to prepare projects at the state-level

iighways and institutional strengthening If NHAI and M O R T H

- Capacity expansion, maintenance and institutional development o f state road agency

Muzaffarpur National Highway Project

Proposed Non-NHDP National

I Widening and strengthening o f two itate roads in Gujarat in a commercial brmat: Vadodara - Halo1 SH and ihmedabad - Mahesana SH

'LANNED

if state roads and institutional levelopment o f state road agencies

Capacity expansion and maintenance

Capacity expansion o f national

Improvement Project (Ln

State Roads Infrastructure Development Technical Assistance (Ln.4114-IN) Andhra Pradesh State Highway Project (Ln.4192-IN)

Gujarat State Highway Project (Ln 45774"

Kamataka State Highways Improvement Project (Ln

4622-IN

4606-IN)

Kerala State Transport Project (Ln. 4653-IN)

Mizoram State Roads Project (Cr. 3618-IN)

Uttar Pradesh State Road Project (Ln. 4684-IN)

Tamil Nadu Road Sector Project (Ln. 4706-IN)

Infrastructure Leasing & Financial Services (Ln 3992-IN; Cr. 2838-IN)

Proposed state highways projects (FY2004-06)

Proposed Lucknow-

Highway Project

National Highway orth-South Corridor Project

- 7 -

mprovement o f rural access roads and nstitutional strengthening o f rural road .gencies

iuture infrastructure lending project levelopment Xher development agencies ONGOING ADB - Capacity expansion o f national highways and institutional strengthening o f NHAI and MORTH

Proposed Rural Roads Project

Proposed Project Development Facility

- Japanese Bank for International Cooperation (formerly OECF) - Capacity expansion o f national highways and institutional strengthening o f NHAI and MORTH

highways and institutional strengthening o f state road agency

- ADB - TA for preparation o f investment plan and strategy for the north-south corridor development in West Bengal

State Highway Project, 2002

ADB - Capacity expansion o f national highways and institutional strengthening o f NHAI and MORTH

PLANNED

ADB - Capacity expansion o f national highways and institutional strengthening o f NHAI and MORTH

ADB - Capacity expansion o f state

First Highway Project, Second Highway Project, National Highway Project, and Surat-Manor Tollway Project.

Yamuna Bridge Project, National Highway Project.

West Bengal, North-South Corridor Development, 1998/95

Western Transport Corridor Project, 2001

Proposed National Highway Corridor I & 11,2002 and 2003

Proposed Madhya Pradesh

(Highly Unsati:

- a -

3. Lessons learned and reflected in the project design:

ABP i s the third Bank project in recent years to support the NHDP and i t s implementing agency, NHAI. Three main lessons are leamed from TNHP and GTRIP, ahd reflected in the design o f ABP. First, weaknesses have been identified in the areas o f financial management and environmental and social safeguard capacity during the preparation and implementation o f the first two projects, and these are being addressed through on-going actions under these projects, from which ABP stands to benefit. Second, land acquisition and the implementation o f Environmental Management Plan and Resettlement Action Plan o f TNHP and GTRIP are being closely monitored and strengthened, and much stronger processes are adopted for ABP. Third, the planned disbursement schedule takes into account the low-value work in the f i rst stage o f construction and high-value work in the second phase.

4. Indications of borrower commitment and ownership:

The NHDP was proposed by the Prime Minister's Taskforce in 1998, and i s GOI's top priority infrastructure investment program. The Prime Minister personally reviewed the implementation progress on May 26,2000 and September 5,2001, and the Chairman o f Planning Commission and Minister o f Road Transport & Highways also reviewed the progress regularly. NHAI has demonstrated strong borrower commitment and ownership through: (i) the satisfactory progress made so far in the implementation o f TNHP and GTRIP; and (ii) the agency's performance in the improvement o f institutional capabilities during the last few years. The agency has made significant progress in the procurement o f c iv i l works and consultant services, and in the institutional arrangement for implementing the project-related safeguard policies. NHAI has also made significant effort in the preparation o f the ABP, especially the bypass alignment evaluation and selection, engineering design o f the bypass roads and bridge, and the land acquisition.

5. Value added o f Bank support in this project:

The most important contribution o f the Bank in this sector i s the knowledge o f effective institutions, policies, financing and implementation mechanisms in other parts o f the world, and experience with economic, social, and environmental analyses o f project. This project focuses on the strengths and weaknesses o f current practices in the sector, and will mobilize technical expertise in examining and testing new approaches. Many o f the procedures which have been put in place during the preparation o f TNHP and GTRIP are now being adopted by NHAI for all o f i t s project preparation activities, including procurement, engineering, environment, land acquisition, resettlement, construction supervision and dispute resolution practices. The Bank has been supporting N H A I ' s institutional development, and facilitating the exchange o f information between central government, states and the private sector. Continued involvement o f the Bank will facilitate institutional reforms in sound business management, accountability and responsiveness to external stakeholders, improved road asset management and traffic efficiency and safety, and better planning, policy and regulations. The Bank's financial participation i s also important to the implementation o f NHDP, before a more sustainable financial mechanism i s developed for national highway development and maintenance.

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E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8)

1. Economic (see Annex 4): 0 Cost benefit NPV=US$554 million; ERR = 32 % (see Annex 4) 0 Cost effectiveness 0 Other (specify)

Economic analysis was carried out for the bypass component, which constitutes 92% o f the total project cost. Economic analysis was not performed for the corridor management and institutional strengthening components as they are small components and most o f their benefits are not quantifiable. The preliminary cost-benefit analysis for the bypass construction was conducted as part o f the feasibility study that was completed in August 1999. The analysis was based on the Highway Design and Maintenance Standards Model (HDM-111) developed by the Bank. A more detailed cost-benefit analysis was conducted during detailed engineering design to evaluate the alternative design and construction options (including a phased construction with 2 lanes to be completed in the first phase and another 2 lanes some years later). The analysis quantified the user benefits (mainly in the form o f savings in vehicle operating costs and travel time costs) to the bypass traffic and to the local traffic remained in the existing national highway section through the city (due to reduced congestion). The traffic safety benefits due to reduced traffic were also quantified. The results show that the full access control, 4-lane construction option with right o f way and embankment provision for additional 2 lanes in the future has an ERR o f 32%, and sensitivity analysis indicated the robustness o f the economic viability o f the bypass under various scenarios.

2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR = YO (see Annex 4)

NHDP i s the major expenditure program for the national highways till year 2008. I t includes the upgrading o f 13,000 km core national highways and i t s total costs are estimated to be US$12 billion. The funding sources o f the implementing agency NHAI include fuel levies (cess), bonds, tolls, loans, and market borrowing through Special Purpose Vehicles. I t s primary source o f revenues i s a fixed share allocation from the Central Road Fund, amounting to Rs 2,000 crores (or equivalent o f US$416.0 million) in 2000/01, and i s expected to increase with the size o f the Fund. For externally financed projects, NHAI will get 80% o f the external assistance as grant from GOI, and 20% as loan that NHAI will be required to pay back to GOI. All counterpart fund will come from NHAI's fund. The Bank loan w i l l be serviced by NHAI from the toll revenues.

NHAI currently has few independent assets and l i t t le independent revenues. There will be a financial gap between NHAI's current fund and the NHDP financial requirement. The gap i s expected to be closed by borrowing, tolls, bonds, and private investment. With the assistance from ADB, NHAI i s exploring various financial instruments (including bond issues, securitization, and toll systems) that would enable the agency to be more financially independent. So far, NHAI has raised about Rs.930 crores (or equivalent o f US$194.0 million) through two bond issues. NHAI i s 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 i s unlikely to crowd out private fund for road investment, as private road financing i s s t i l l at the experimental stage, and would not be mobilized fast enough to fund the urgently needed highway capacity.

Fiscal Impact:

The fiscal impact o f the project i s expected to be minimal, as GO1 has made budget commitment to the NHDP based on road user charges and necessary policy provision to NHAI to tap other financial sources. And th is budget commitment to the maintenance and development o f the national highways i s made in a

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fixed portion o f the total cess revenues which are expected to grow with increasing consumption o f fuels. The current cess revenues allocated to the entire national highway system (under M O R T H and NHAI) amount to US$750.0 mill ion a year.

3. Technical: The bypass will be a full-access controlled, 4-lane divided carriageway with 1.5 meter paved shoulders and 1 meter earthedgravel shoulders on either side, and a 12 m median with an inner shoulder o f 1 meter. It will have an embankment for 6 lanes divided carriageway, and the 1 meter inner shoulder would become part o f a lane to be added on either side in the future. I t will cross 60 village roads where underpasses are proposed, 3 state highways where interchanges are proposed, and 3 railway l ines where over bridges are proposed. The Ganga bridge i s proposed to be a continuous decked bridge with 3 expansion joints. Pedestrian underpasses, service roads, bus stops, truck lay-byes and any other features are proposed wherever required based on public consultations. Road safety audit i s required for the engineering design before c iv i l work implementation.

4. Institutional:

4.1 Executing agencies:

NHAI's capability to implement the current project, including environment and social safeguard policies, has been substantially strengthened through the preparation and implementation o f the TNHP and GTRIP, and i s considered adequate.

4.2 Project management:

NHAI has mobilized a strong team in headquarters and on site to work closely with consultants and local authorities during project preparation, and this w i l l continue during the implementation phase. Additional ski l ls in land acquisition, environment, resettlement and rehabilitation (R&R), and financial management are being built up.

4.3 Procurement issues:

Bank guidelines will apply to all goods and works and all consultants' services financed under the project. Through implementing TNHP and GTRIP, NHAI s ta f f are fully conversant with Bank procurement procedures. New staff dealing with procurement w i l l be required to attend the training program conducted by Administrative Staff College o f India, Hyderabad and National Institute o f Financial Management, Faridabad on Bank procurement procedures. Therefore no significant procurement issues are expected.

4.4 Financial management issues:

NHAI has implemented a time-bound action plan agreed during GTRIP negotiations to address the major weaknesses in i t s financial management systems (FMS), and developed adequate financial management capacity. Through the implementation o f TNHP and GTRIP, NHAI has been exposed to the Bank's disbursement procedures and financial reporting requirements, and i ts performance as an implementing entity as judged from audit reports and disbursements history has been satisfactory. There has been an issue o f timeliness o f audit reports. Delays in the entity audit reports for NHAI have occurred for two consecutive years. To address this issue, NHAI has drawn up an action plan to help expedite the process o f compilation and audit o f i t s entity accounts. This action plan includes discrete steps which will be taken by NHAI to help them compile and submit their entity accounts to audit well before the Bank's 6 month deadline. The steps are increase in the coverage o f PIUs under the Project FMS, increase in accounting staff throughout the organization and issuance o f guidelines about compilation o f accounts. NHAI have also requested the C A G to establish a resident audit wing in the Authority's office who will cany out an

- I 1 -

audit o f project expenditures concurrently so that the audit process may be timely. (see Annex 6(B) for more details)

5. Environmental: 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.

EA Process: The initial environmental screening and preparation o f an Environmental Assessment (EA) for the project were undertaken as part o f the TNHP preparation in 199718, where i t was designated as Package III-B. I t was decided in 2001 that the package would be funded under a separate loan from TNHP and GTRIP. Since then, a separate EA has been carried out, and stand-alone Environmental Management Plan (EMP) has been prepared for each o f the 3 contract packages (one o f which i s for the major bridge over Ganga River). The EA and EMP reports and the overall EA process was reviewed and completed by independent environment consultants in July 2003. The Bank also commissioned an independent bio-diversity specialist during February-March 2003 to examine the potential bio-diversity impact o f the bypass. The final EA reports incorporate the findings o f both the Independent Reviews. NHAI has obtained environment clearances required for this project from the Ministry o f Environment and Forests, GOI, and from the Uttar Pradesh State Pollution Control Board, and i s in the process o f getting the Forestry Clearance from the Uttar Pradesh Department o f Forests.

S U " ~ o f kev environment issues, assessment o f impacts and mitigation measures: The main environmental issues are: (i) unavoidable conversion o f fert i le agricultural land to the right o f way (ROW); (ii) potential impediments to area level and local drainage as the major portion o f the bypass w i l l be on a fresh high embankment; (iii) potential poorly planned or managed development induced by the presence o f a high quality transport facility; (iv) unavoidable removal and shifting o f community assets from the entire R O W and severance o f some communities; (v) possible impact on aquatic flora and fauna in the river Ganga; and (vi) construction related temporary impacts such as dust from the haul roads and pollution from the plants and machinery required for construction. These potential impacts will be avoided, minimized and/or mitigated through sound management practices; appropriate scheduling o f construction to minimize impacts on the river fauna, especially for the Ganga Bridge; all described in the EMPs, and incorporated in the project's designs. Some o f the community resources, either shifted or re-built, will be enhanced on a case-to-case basis with commitment from local communities for their upkeep. Induced development issues would be addressed through regular collaboration and dialogue with the local and state authorities.

Environmental Category: A (Full Assessment)

5.2 What are the main features o f the EMP and are they adequate?

Self-contained EMPs for individual contract packages are prepared for implementation by the contractors during construction and by the NHAI during operation. The EMPs provide an overview o f the project, and describe the salient features o f the project site and significant environmental issues for the respective construction package. Detailed mitigation and avoidance measures are specified, along with applicable time frames, assignment o f responsibilities and an estimated budget, for both the construction and operational phases. Specific mitigation/ enhancement measures proposed in the EMPs include the following:

Use o f flv ash in embankment construction: The project w i l l use 6.7 mill ion cubic meters o f pond ash (a suitable form o f fly ash) as fill material for the raised embankment, from the Firoz Gandhi Thermal Power Plant at Unchhahar. This will lead to a significant positive environment impact. The EMPs include measures required for haulage, storage, handling o f the pond ash, and disposal o f residual pond ash, if any.

Management o f construction related impacts: This includes location guidelines and prescribed prevention measures for hot-mix plants and construction camps. The identification, operation and, if required,

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rehabilitation measures for haul roads, borrow areas, sand mines in rivers have been provided. The construction schedule and procedures recommended for river training (if required, for the major bridge across river Ganga) takes into account the seasonal movement o f aquatic fauna, including the Gangetic Dolphin. The responsibilities o f the environmental specialist o f the construction supervision consultants w i l l include specific requirements o f on-site supervision and monitoring o f these activities.

Relocation and enhancement o f communitv properties: This component i s seen as an opportunity for the NHAI to show their appreciation o f the micro-environment in which the nearby communities live. Though few cultural properties will be impacted, some ponds and schools will be relocated during project implementation. Wherever possible, the EMPs have built synergy with Bank-funded, on-going District Primary Education Project for new school buildings. Concurrence o f the communities who are the potential users i s seen as a necessary condition and therefore all relocation andor enhancement w i l l be undertaken in a participatory manner, with a strong commitment towards upkeep o f the facilities created or rebuilt.

Consultation with local authorities on land use: This w i l l be taken up in the implementation stage, rather than after the bypass becomes operational. Close coordination with the Allahabad Development Authority and other local planning organizations on roadside development will begin with the construction, and continue well after the bypass opens to traffic.

Provision for adequate movement o f people and cross-drainage: This i s part o f the engineering design. The movement o f people and local traffic w i l l be facilitated by more than 40 crossings throughout the bypass. The provision o f over 100 adequately sized cross-drainage works (including pipe culverts, slab culverts, and minor & major bridges) and adequately sized side drains will ensure the minimum hindrance o f drainage in the area, and will maintain the natural hydrological profile.

Compensation for tree loss: The bypass will be built as a 4-lane facility, with adequate embankment for future widening to a 6-lane road. Service lanes for local traffic will be provided, where required. Since the area i s predominantly agricultural, only 3298 trees are proposed to be felled. The loss will be compensated by rows of trees to be planted on both sides o f the ROW. The plantation will follow NHAI’s Tree Plantation Strategy which i s being implemented for TNHP and GTRIP.

Institutional arrangements: The EMPs identify the responsibilities for implementation and supervision o f all envisaged measures. The P I U at Allahabad, which i s implementing TNHP, w i l l also be responsible for the overall implementation o f the bypass. The P IU w i l l be equipped with a dedicated Environmental Manager for this project. The NHAI Corporate Office will provide guidance, support, and occasional supervision. During the construction phase, the environmental specialist o f the construction supervision consultants (procured through Intemational Competitive Bidding) will assist in the implementation o f EMP measures. Environmental awareness and training w i l l be carried out during pre-construction and implementation stages. Sufficient budgetary allocation has been made for these activities.

Summary assessment: contract documents. These should be adequate to address any potential adverse environmental impacts generated from the project.

The mitigation, enhancement and monitoring measures have been made part o f the

5.3 For Category A and B projects, timeline and status o f EA: Date o f receipt o f final draft: February 2003.

Independent Review Report - February 2003 Independent Review o f Biodiversity Aspects - March 2003 Public Disclosure - April 2003

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EA Summary to Board - April 18,2003 Finalized EIA and EMPs - July 2003

5.4 How have stakeholders been consulted at the stage o f (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms o f consultation that were used and which groups were consulted?

The stakeholders were consulted formally and informally throughout the entire project preparation. The consultations were mostly informal during the environmental screening. The information gathering surveys were conducted primarily through one-to-one discussions and short meetings with locally influential persons. Other consultations included focus group discussions and door-to-door consultations by the social team during the socioeconomic survey and census o f potentially affected persons. The issues raised at these meetings and sessions were considered in the project design. At the draft EA stage, the consultations were more formal, and full environmental public hearings, in l ine wi th GO1 requirements, were carried out in each district where the alignment passes. Additional consultations were also carried out during site visits which were part o f the review and finalization o f documents and for the verification o f locations o f potential wind erosion and cut-banks (see section 6.2 and 6.3).

5.5 What mechanisms have been established to monitor and evaluate the impact o f the project on the environment? Do the indicators reflect the objectives and results o f the EMP?

Monitoring and evaluation have been built into the three EMPs for al l attributes o f concern. A separate monitoring plan has been prepared for the monitoring o f pollution air, water and soil, noise levels, roadside plantation, borrow area and haul road management, aquatic biodiversity, potential sites for erosion (created by water and/or wind) and the use, transport, storage, and handling o f pond ash. The plan includes a combination o f qualitative and quantitative indicators as well as guidance on measurement methods. Environmental reporting w i l l be on a quarterly basis in coordination with the project's overall progress reports. Institutional responsibilities o f monitoring for each phase o f the project are specified.

6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes.

Impacts on land and people: The bypass i s a new alignment and will require land acquisition o f 781 hectares (ha), o f which 687 ha (88%) are private agricultural land, and 94 ha (12%) transfer o f government land. The land acquisition will impact 8,008 households, o f which titleholder famil ies account for 98% and sharecroppers and other non-titleholders 2%. A total o f 20,224 families will be adversely affected by the project. Approximately 50% o f the affected households are vulnerable households, consisting o f largely Schedule Caste, Below Poverty Line, woman-headed households, and three Schedule Tribe households. In addition, approximately 2,484 families will become landless.

Loss o f prouerties or income: Relocation or resettlement i s required for 93 common property structures (such as school, temple, panchayat office, police station, tube well and well) and 1,002 families' private structures (residential, commercial, and residence-cum-commercial), which will be fully or partially demolished or become inhabitable. All private structures, except for 2 residential structures, are on private land. The income o f the affected families will be seriously affected by the loss o f agriculture land. About 87% o f the affected agricultural titleholders (excluding absentee titleholders) will have less than district average minimum economic holding, which i s likely to become economically unviable after the acquisition i s completed.

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Sexually transmitted diseases (STDs): There i s a risk o f STD infections due mainly to the truck traffic using the bypass. A survey that was carried out both at cross sections o f state highway and at villages along the bypass alignment found that the level o f awareness on STD/HIV was low both among the truckers and nearby villagers.

Social development outcomes: The project i s part o f the NHDP, with significant expected social development outcomes mainly in the form o f improved transport efficiency, better road safety, better access to markets and resources, and improved social interaction o f the areas served by the highway with other part o f the country. These benefits will be realized in a much broader geographic scale than the areas directly affected by the project. For the project area, the bypass will facilitate movement o f goods and enhance people's ability to access markets, non-farm jobs, services and information. Better access to markets and jobs will significantly increase economic opportunities, thereby increase rural incomes and contribute to poverty reduction. The project seeks to achieve the positive social outcomes by avoiding to the extent possible, minimizing and mitigating adverse social impacts.

6.2 Participatory Approach: H o w are key stakeholders participating in the project?

NHAI organized a number o f consultations with potentially affected people along the five bypass alternative alignments before the selection o f preferred alignment. The consultations revealed that majority of the people in the project area were supportive to the bypass, but they were also concerned with adequate compensation for property loss, road safety, employment opportunities to affected people, acquisition o f fertile agricultural land, and connectivity to markets. Key stakeholders such as project affected persons, opinion makers, elected representatives and different department personnel were consulted both through individual discussions and public consultations during the preparation o f RAP at village, district and state level. At the village level, group discussions with different social communities and especially women agriculture laborers and other vulnerable groups were carried out, on issues relating to design options, alternate livelihood, relocation and enhancement o f common property resources, measures for compensation and assistance, etc. Between July 3 1 and December 29,2001, more than 100 village-level consultations were conducted, and the findings o f these consultations were considered in the decisions for the locations o f underpasses and overpasses. NHAI also conducted district level consultations in all three project districts in January 2002. State level consultation was held on February 25, 2002. All these facilitated the minimization o f adverse social impacts and the development o f realistic mitigation plans. For a continued and sustainable participation, the RAP proposed a continuous consultation process for the project implementation period (see section 5.4).

6.3 How does the project involve consultations or collaboration with NGOs or other c iv i l society organizations?

The NGOs are integral part o f the institutional arrangements for implementation o f the RAP. Two NGOs were mobilized in March 2003 (one each for the two road contracts) and the implementation o f RAP has been initiated. The NGOs also serve as member o f the District Level Committees to facilitate the implementation o f the RAP.

6.4 What institutional arrangements have been provided to ensure the project achieves i t s social development outcomes?

The key to ensure the achievement o f social development outcomes i s in satisfactory implementation o f the RAP. The RAP contains details o f the institutional arrangements and specifies the roles and responsibilities for implementation, monitoring and evaluation o f the project. The Environment and Social Development Unit at NHAI's Corporate Office will coordinate the resettlement activities o f the project. One R&R manager will be assigned to work exclusively on the bypass project. In the field unit, one R&R manager for each road contract has been deputed. Three District Level Committees have been set up to

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facilitate land acquisition and RAP implementation. Grievances concerning titleholders w i l l be addressed through the existing state mechanism, according to which, once a week, Tehsil diwas i s organized to resolve grievances o f local people. The District Administration presides over these meetings. In addition, Grievance Redress Committees have been established for early disposal o f complaints o f non-titleholders in each district to deal with grievances o f the affected people (see Annex 11).

6.5 How will the project monitor performance in terms o f social development outcomes?

The RAP contains detailed plan for monitoring, evaluation and reporting o f R&R performance. Comprehensive monitoring indicators and reporting formats have been developed and specified in the RAP The proposed indicators relate to both progress and process monitoring by the NHAI. Arrangements have been made for following the reporting schedules. External evaluators will be appointed to provide an independent annual assessment o f progress made by the project to meet the objectives o f the R&R framework.

7. Safeguard Policies:

7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies.

To comply with Environment Assessment OPlBP/GP 4.01, a detailed EA was carried out, and EMPs prepared for each contract package. These include mitigation and enhancement measures for all identified impacts. To ensure their implementation, the EMPs are made part o f the contract documents.

Although no protected monument has been impacted, to comply wi th Cultural Property OPN 1 1.03, the Rehabilitation and Relocation plans have been prepared to safeguard the affected temples and other common property resources that have been identified to have a cultural significance. These plans are a part o f the EMPs.

To comply with OPlBP4.12, NHAI has prepared an appropriate R&R entitlement framework in accordance with the Bank’s OP 4.12 and O D 4.20 to cover all types o f affected people. I t recognizes support for share-croppers and all squatters and vulnerable encroachers. The RAP includes the entitlement framework, and addresses land acquisition and other potential adverse social impacts.

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F. Sustainability and Risks 1. Sustainability:

Benefits o f the project are likely to be sustained over time as the traffic volumes increase. Nevertheless, a key factor will be NHAI's capacity to maintain and efficiently operate the newly created road assets. The project will enhance this capacity through institutional strengthening, promotion o f private sector involvement, and assured funding mechanisms. Key issues are (a) clarifying roles o f NHAI, MORTH and the states; (b) establishing an overall strategy for national highway spending; and (c) adequate funding for maintenance. The implementation under TNHP and GTRIP o f the recommendations o f the Institutional Strengthening study and Corridor Management study will be critical for project benefits to sustain over a period o f time. Recent increases in NHAI revenues from levies on petrol and diesel fuel are also an important step.

2. Cri t ical Risks (reflecting the failure o f critical assumptions found in the fourth column o f Annex 1):

Risk From Outputs to Objective Newly increased traffic capacity i s not efficiently managed and maintained.

NHAI's commitment to policy and institutional reforms becomes weak.

From Components to Outputs Delays in procurement and award o f contracts. Delays in site readiness, and unsatisfactory implementation o f RAP and EMP. Unsatisfactory consultantlcontractor performance, construction delays, quality problems and cost overrun. Delayed submission o f entity audit reports by NHAI.

No separate bank accounts for different projects in Allahabad PIU.

Overall Risk Rating

i isk Rating - H (High Risk), S (Substantial Ris

Risk Rating

M

M

M

M

M

M

M

M I, M (Modest Risk), F

Risk Mitigation Measure

Secured maintenance funding and strengthened maintenance practice through Corridor Management Units. The progress w i l l be closely monitored through quarterly and supervision mission reports, and remedial actions, including linking the appraisal timetable for future national highway projects with the institutional reform progress, will be taken as appropriate.

NHAI's function in procurement and contracting i s being strengthened under TNHP and GTRIP. Adequate staffing, high-level committees, early appointment o f NGOs and monthly monitoring o f action plans. Strict pre-qualification criteria, supervision by internationally experienced consultants, large construction packages. Implementation o f an action plan by NHAI to speed up the compilation and audit o f entity accounts. Sources and uses o f funds to be made clearly identifiable in the P I U bank accounts, and P I U audit reports to be provided by C A G I external auditor acceptable to CAG.

Negligible or Low Risk)

3. Possible Controversial Aspects:

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G. Main Loan Conditions 1. Effectiveness Condition

Standard conditions only

2. Other [classify according to covenant types used in the Legal Agreements.]

1.

2.

3.

4.

5.

6.

7.

8.

The NHAI will maintain the state high-level Project Coordinating Committee in Uttar Pradesh, to coordinate the issues related to land acquisition, R&R, environment and shifting o f utilities, supported by district level committees and grievance cells for land acquisition and R&R.

The NHAI w i l l maintain the External Stakeholders Advisory Group, which will meet at least twice each year to review the overall program and strategy being implemented under the project.

The NHAI w i l l maintain a Project Implementation Unit at Allahabad to be responsible for the day-to-day implementation o f Allahabad Bypass construction. The unit shall be staffed by the requisite number o f suitably qualified and experienced procurement, financial management, social, environmental and other staff.

The NHAI w i l l implement Resettlement Action Plan, Environmental Management Plans, and Tree Plantation Strategy, to the satisfaction o f the Bank.

The NHAI will produce annual report on condition o f NHAI road network and projected future user costs and projected asset condition with forecast levels o f maintenance.

The NHAI w i l l produce a quarterly report on implementation progress with agreed format presented in the Borrower's Project Implementation Plan, and a mid-term review report after 24 months o f project implementation.

The NHAI w i l l submit to the Bank entity audit report six months from the close o f the agency's financial year.

The NHAI will submit to the Bank audited financial statements for the P I U at Allahabad covering project expenditures incurred there for both the Third National Highway Project and Allahabad Bypass Project throughout the period o f the loan for Allahabad Bypass Project.

H. Readiness for Implementation iXi 1. a) The engineering design documents for the f i rst year's activities are complete and ready for the start

0 1. b) Not applicable. o f project implementation.

2. The procurement documents for the first year's activities are complete and ready for the start o f

3. The Project Implementation Plan has been appraised and found to be realistic and o f satisfactory

0 4. The following items are lacking and are discussed under loan conditions (Section G):

project implementation.

quality.

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I. Compliance with Bank Policies ix] 1. This project complies with all applicable Bank policies. 0 2. The following exceptions to Bank policies are recommended for approval. The project complies with

al l other applicable Bank policies.

Guang Zhe Chen Sector ManagerlDirector

ichael F. Carter Zhi Liu Team Leader

.

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Annex 1: Project Design Summary INDIA: Allahabad Bypass Project

Hierarchv of Objectives Sector-related CAS Goal: Reduce highway infrastructure bottlenecks to support poverty reduction and private sector-led economic growth

Project Development Objective: 1. Reduced transport constraints on national economic activity.

2. Improved institutional capacity to manage road programs, assets, and services.

Output from each Component: 1. Cost effective delivery o f increased traffic capacity and improved quality o f national highways.

Key Performance Indicators

Sector Indicators: Road users' satisfaction with the performance o f highway system increased f rom the level established through road user satisfaction baseline survey

Outcome I Impact Indicators: 1.1. Average vehicle travel t ime along the project corridor reduced by 30%, by EOP, from current 4-5 days one way between Delhi and Kolkata.

1.2. Truck operating cost along the project corridor reduced by 10% in real terms f rom the current Rs. 11 per km, by EOP.

2.1. Increased private sector participation in the operations and maintenance o f national highways.

2.2. Road user responsiveness mechanism improved.

Output Indicators:

1.1. E x post ERR o f project corridor above 20%.

1.2. All c i v i l work contracts delivered to time, budget, cost and safety constraints.

1.3. 100% delivery o f entitlements to PAFs and restoration o f common property resources as and when planned in RAP.

Data Collection Strategy

Sector1 country reports: i o a d user satisfaction jurveys: baseline, mid-term .eview (MTR), and end o f iroject (EOP)

Project reports:

Project evaluation reports.

MTR mission reports.

[mplementation Completion Reports (ICR).

Annual road condition surveys.

Annual surveys on delays and accidents,

Project reports:

Quarterly progress reports;

Supervision mission reports;

Disbursement reports;

User surveys conducted for baseline, MTR, and EOP;

Annual road condition survey;

Annual surveys on delays and

Critical Assumptions [from Goal to Bank Mission) Govemment remains committed to sector reforms.

Continued funding for the National Highway Development Program.

Increased delegation and public accountability o f NHAI.

(from Objective to Goal)

Civ i l works are completed on time and meet design standards, and maintenance funding i s secured.

Majori ty o f the cost savings are captured by road users, consumers, and farmers.

Strong NHAI commitment on pol icy and institutional reforms continues.

(from Outputs to Objective)

Newly increased capacity i s efficiently managed and maintained.

Strong NHAI commitment on institutional capacity building and policy reform continues.

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2. Improved O&M o f national highways

3. Improved institutional capacity

Project Components I Su b-components: 1. Allahabad Bypass construction, including supervision, land acquisition and resettlement, and environmental management.

3. Institutional strengthening

.4. All EMPs carried out in ccordance w i th contract lauses.

.5. Level o f users' atisfaction with the erformance o f road ifrastructure on project orridor increased.

. 1. O&M for selected ational highway carried out nder performance-based ontract t o private operator.

.2. Number o f accidents and atalities per 1,000 km o f .ational highway reduced on iroject road to the levels ignificantly below the state .verages.

toad user satisfaction surveys arried out on the regular iasis.

nputs: (budget for each :omponent) . US$296.30 mi l l ion

JS$21.20 mi l l ion

JSS0.30 mi l l ion

ccidents on NH-2.

'roject reports:

2uarterly progress reports; hpervision mission reports.

Juarterly progress reports; Supervision mission reports.

Juarterly progress reports; Supervision mission reports.

:from Components to 3utputs) r imely procurement and :ontract implementation;

r imely site readiness;

Full implementation o f R A P ind EMP;

Satisfactory contractor performance.

Sources and uses o f funds :learly identifiable in the ban1 iccounts o f Allahabad PIU.

NHAI continues commitment in outsourcing O&M activitie to the private sector.

GO1 and NHAI remain Zommitted to institutional reforms and retain strong ownership o f action plans.

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Annex 2: Detailed Project Description INDIA: Allahabad Bypass Project

By Component:

Project Component 1 - US$296.30 million Bypass Construction

(a) Civ i l works for building the 84.7-km full access controlled, 4-lane divided carriageway including service roads where required, a 1-km, 4-lane bridge over the Ganga River, and environmental management including tree plantation, for a combined total o f $240.4 1 million.

Supervision o f civil works ($13.68 million).

Land acquisition, resettlement and utility relocation ($39.08 million).

(i)

(ii)

(b)

(c) land acquisition ($18.77 million) and utility relocation (not part o f RAP, $1.70 million), to be financed entirely by NHAI.

R&R assistance ($17.71 million) will be paid to beneficiaries for each package through a consultative process. Payments will be made from the project director’s office, and the Bank share ($15.58 million) will be reimbursed on the basis o f Statements o f Expenditure (SOE).

R&R implementation support, training and monitoring ($0.90 million) w i l l be provided through: supervision level N G O consultancy package ($300,000); one monitoring consultancy ($100,000); training o f NHAI and N G O staff plus other R&R implementation expenses by SOE ($500,000).

(iii)

(d) NHAI project management costs (not Bank financed, $3.14 million).

Project Component 2 - US$21.19 million

Corridor Management

(a) Performance-based contracts to private operators for initial deficiency removal works and maintenance for 5 years ($1 1.55 million). Bank financing for this component ($6.93 million) wi l l be limited to only the c iv i l works but not other recurrent operations.

Procurement o f ATMS and user fee collection system ($9.24 million).

Taxes on equipment ($0.40 million, non Bank financed) (b)

(c)

Project Component 3 - US$0.30 million Institutional Strengthening, to fund independent and periodic surveys o f road users and road sector stakeholders during the project period, to determine the level o f their awareness, involvement and satisfaction with the delivery, management and operation o f national highways by NHAI.

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Annex 3: Estimated Project Costs INDIA: Allahabad Bypass Project

. ~~

Front-end fee 2.40 2.40 Total Financing Required 233.25 86.95 320.20

Bypass Construction Corridor Management Institutional Strengthening Total Baseline Cost

Physical Contingencies Price Contingencies

Project Cost By Category Civil Works Goods Services Miscellaneous

189.19 13.40 0.14

202.73 9.64

20.88

Local Foreign Total US $million US $million US $million

192.55 72.94 265.49 8.63 4.62 13.25 8.46 6.99 15.45

23.6 1 0.00 23.6 1

Foreign US $million

68.36

73.50

7.69

Total Project Cost: I 233.25

Total US $million

257.55 18.40

276.23 13 .OO 28.57

84.55 317.80

4 Total Proiect Costs

Front-end fee Total Financing Required

I 233.25 I 84.55 I 317.80

2.40 2.40 233.25 86.95 320.20

1 Identifiable taxes and duties are 23.7 (US$m) and the total project cost, net o f taxes, is 296.5 (US$mf. Therefore, the project cost sharing ratio i s 80.94% o f

total project cost net o f taxes.

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Annex 4: Cost Benefit Analysis Summary INDIA: Allahabad Bypass Project

Economic analysis was carried out for the bypass component by the Consultant appointed for the feasibility study and detailed project design. The total cost o f the component including contingencies represents 80% o f the total project cost. Economic analysis was not performed for the corridor management and institutional strengthening components as they are small components and most o f their economic benefits are not quantifiable. Details o f the analysis for the bypass are described in the Final Feasibility Report and Detailed Project Report, which are included in the project file.

Alternative alignments for the proposed bypass were extensively examined during the feasibility study through a careful alignment analysis and selection process that included public consultations in the entire project area surrounding all alignments. A total o f 7 alignments were evaluated, including:

0 upgrading o f the existing national highway stretch that passes through the city center o f Allahabad (with 3 design options: fully elevated, partially elevated, and at grade);

a southern bypass alignment; and 0

0 5 northem bypass alignments.

The evaluation involved a careful comparison o f engineering feasibility, costs, and environmental and social impacts among the altemative alignments. The 3 upgrading options along the existing national highway were rejected mainly due to the concems o f expected adverse environmental impact o f growing inter-city traffic on the historical city. The southem bypass alignment, which would have to cross the Yamuna River and Ganga River, was rejected due to the expected high costs associated with the two required bridges. The 5 northem alignments (AN1 to AN5) are mainly defined with altemative locations o f a bridge across the Ganga River. A preferred alignment (AN4) was identified and selected for detailed engineering design. The economic analysis described below pertains to this selected alignment.

The analysis followed the conventional highway cost-benefit analysis methodology, and was based on the Highway Design and Maintenance Standards Model (HDM-111) developed by the World Bank. I t compared the base scenario, i.e. “do minimum” or “without project” situation, wi th the “with project” scenario, i.e. a 4-lane bypass constructed al l in one time. I t also considered an altemative “with project” scenario, i.e. a bypass constructed with 2-lane carriageway f i rs t and expanded to 4-lane later when the bypass traffic reaches a certain level. A summary o f the results for the recommended the 4-lane bypass construction all in one time i s given on the table below:

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[For projects with benefits that are measured in monetary terms] ~

Present Value Economic Analysis

Benefits:

Savings in road user costs and road maintenance

$757 m

costs:

Road construction, land & resettlement,

$203 m

future maintenance Net Benefits:

$554 m IRR:

32 Yo

)f Flows Financial Analysis

Fisca

Taxes

npact

Subsidies

Summary of Benefits and Costs: The HDM-I11 model estimates the net reduction in total transportation costs over the l ife o f the project, taking account o f savings in road user costs, primarily vehicle operating costs and time savings that are expected to accrue to users both on the bypass and existing national highway stretch, along with changes in construction and maintenance costs. User cost savings depend mainly on changes in road roughness, traffic congestion and operating speeds. Safety impacts are uncertain due to offsetting effects o f improved road standards and expected higher traffic speeds, and were not considered in the analysis due to lack o f refined data on both accident occurrence and costs.

The bypass construction costs were based on the Bill o f Quantities developed by the consultant for the entire bypass including the road stretches, the Ganga Bridge, and the service roads. Total costs also include physical and price contingencies, and costs o f supervision, environment management plan, land acquisition, resettlement and rehabilitation, and utility relocation. Annual maintenance costs for the bypass, service road, and existing national highway stretch were included in the cost-benefit analysis, and were based on the criteria adopted in the Final Feasibility Report. Maintenance costs for the existing national highway stretch comprises annual maintenance costs and costs o f periodical overlay at every 5th year.

Current Traffic and Traffic Forecast:

Traffic counts at various locations along the existing national highway stretch were carried out in 1998 as part o f the project feasibility study. Traffic levels varied from 7,910 AADT (or 16,500 passenger car equivalent units) to 27,800 AADT (or 33,400 passenger car equivalent units), plus a large number o f non-motorized vehicles which ranged from 2,800 to 17,600 AADT. The highest traffic volumes were observed within the city where local traffic mixed with inter-city traffic. The traffic levels were verified through a 3-day traffic count conducted in January 2002 at two locations on the existing national highway and near the two end points o f the proposed bypass.

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Assumed traffic growth rate by vehicle type:

Vehicle Type 2006 to 2013 Car, jeep, van, tractor/trailer 7.8

Buses 10.0 Light cargo vehicle 7.8

Scooter/motorcycle 13.0

2014 to 2023 2024 to 2026 6.5 6.5 9.5 7.5 8.0 7.5 6.5 6.5

I 2-axle truck I 7.0 I 6.0 I 6.0 I 1 3-axle truck I 7.0 I 6.0 I 6.0 I I Multi-axle truck I 7.0 I 6.0 I 6.0 I

Main Assumptions: For the purpose o f economic analysis, the project l i fe i s assumed to be 20 years. A 25% scrap value i s assumed for the end year o f project life. A discount rate o f 12% i s used for the calculation o f NPV. Where the taxes and subsidies are not easily identified, a standard conversion factor o f 0.90 has been used throughout to convert financial costs to economic costs.

Land acquisition for the right-of-way was taken as same for both bypass construction options. Land acquisition costs were based on the latest market prices o f comparable land transactions, but were not subject to economic pricing.

Technical. I t i s assumed that the existing national highway stretch be properly maintained but not improved over the 20-year evaluation period in both “with bypass” and “without bypass” scenarios. In the with-project cases, further pavement strengthening i s provided through scheduled overlays. The bypass i s designed on the basis o f current levels o f truck overloading, recognizing the substantial lack o f success in introducing improved load enforcement or truck fleet modemization in India.

The table below presents typical vehicle characteristics and road user costs:

Typical Vehicle Characteristics and Road User Costs Light Medium

Cars Buses Trucks Trucks Vehicle Characteristics

Gross vehicle weight (tons) 1.2 14.9 5.3 15.7 Number of passengers (#) 4.8 43 0 0 Service l i f e (years) 10 10 12 10

Hours driven per year (hours) 1,950 2,000 1,500 2,100 Kilometers driven per year (km) 32,000 66,000 60,000 85,000

Road User Economic Costs New vehicle price (Rs) 303,000 736,600 3 17,100 637,600 New tire price (Rs) 660 5,700 3,590 5,700 Maintenance labor (Rslhour) 30 30 30 30 Crew cost (Rslcrew hour) 50 100 60 105 Passenger time cost (Rs/psgr-hr) 57 45 N/A NIA Cargo time (Rslveh-hr) NIA N IA 25 25 Fuel price (Rslliter) 17 17 17 17 Lubricants price (Rsiliter) 60 60 60 60

Heavy Trucks

25.0 0 10

85,000 2,100

842,200 5,700

30 110 NIA 25 17 60

Multi-axle Trucks

40.2 0 12

120,000 2,100

2,687,200 7,410

30 140 NIA 25 17 60

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Sensitivity analysis / Switching values of critical items:

The major r isks affecting economic analysis for the highway upgrading component are cost overruns, lower than expected traffic growth, and lower than expected traffic choosing the bypass. Cost overruns were considered by a 20% increase in capital and recurrent costs. A 20% user benefit reduction was assumed to account for the lower traffic growth over the evaluation period. All these sensitivity scenarios yield a project ERR equal to or greater than 18%.

Sensitivity Scenarios Base case

ERR NPV ($ million) 32% 554

Only 75% bypassable traffic using the bypass Only 50% bypassable traffic using the bypass

I Value ofpassenger time equal to zero I 24% 1 350 I

29% 480 20% 195

1 User benefits decreased by 20 % I 20% I 196 I

Benefits down 20% and costs up 20% 1 Capital and recurrent cost increased by 20% 1 21% I 254 I

18% 161

Distribution o f benefits: All income groups use the national highways, as travelers or as suppliers and consumers o f goods and services. Without the project, high transport costs would continue to affect prices and availability o f services to the communities served by the project, and would constrain economic development at all levels. With the project, transport costs w i l l decrease, travel times will reduce, and services and commodities w i l l be more likely to become available in rural areas. The trucking industry in India i s competitive, and i s likely to pass on the benefits o f vehicle operating cost savings through lower freight rates, higher quality o f services, and extended service coverage. Bus services that use the project roads are both publicly and privately operated. While bus fares may or may not be reduced as a result o f road improvement, the extent, schedules, and quality o f bus services are likely to respond to changes in road capacity and quality.

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Annex 5: Financial Summary INDIA: Allahabad Bypass Project

Years Ending

Total Financing Required Project Costs investment Costs 31.8 95.3 95.3 63.6 15.9 15.9 0.0

Recurrent Costs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Costs 31.8 95.3 95.3 63.6 15.9 15.9 0.0

Front-end fee 2.4 0.0 0.0 0.0 0.0 0.0 0.0 Total Financing 34.2 95.3 95.3 63.6 15.9 15.9 0.0

Financing IBRDllDA 24.0 72.0 72.0 48.0 12.0 12.0 0.0 Government 10.2 23.3 23.3 15.6 3.9 3.9 0.0

Central 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Co-financiers 0.0 0.0 0.0 0.0 0.0 0.0 0.0 User FeeslBeneficiaries 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 34.2 95.3 95.3 63.6 15.9 15.9 0.0

Main assumptions:

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Annex 6(A): Procurement Arrangements INDIA: Allahabad Bypass Project

Procurement

A. Institutional Capacity

An assessment was carried out to determine the institutional capacity o f NHAI in the area o f procurement. NHAI carries out procurement o f works, goods and services in-house by a division headed by MembedChief General manager. NHAI has prior experience o f execution o f large externally aided projects under assistance from ADB and JBIC. Both Bank and ADB are supporting NHAI’s N H D P and agency’s institutional development. An assessment was carried out in February 2000 to determine the institutional capacity o f NHAI to undertake the Third National Highway Project [Ln. 4559-IN]. This was repeated during appraisal o f the Grand Trunk Road Improvement Project in May 2001. In both cases, i t has been determined that NHAI had the institutional capacity to carry out the project.

NHAI has also confirmed that i t s Board has been fully delegated authority for award o f all contracts without any limitation o f value. NHAI has an exclusive web-site www.nhai.org that provides procurement information on names o f successful bidder, current bids, etc.

Many o f the officers working with NHAI are drawn from the various state governments and M O R T H on deputation. After completing their tenure, they generally retum back to the parent cadre with a result that there i s a continuous tumover o f the staff working with NHAI. I t was therefore agreed that NHAI w i l l depute all the staff who w i l l work particularly in this project, to the procurement seminar conducted by ASCI and NIFM for training in procurement so that they are f i l ly conversant wi th the Bank requirements.

The prior review thresholds (indicated in this annex) were derived after assessing NHAI’s capacity to carry out project procurement as per Bank Procurement Guidelines.

B. Procurement Methods

All Goods and Works financed under the Loan shall be procured in accordance with the World Bank’s Guidelines for Procurement, January 1995, revised January 1999. Consulting services to be funded through the Bank’s Loan shall be procured in accordance with the World Bank’s Guidelines for the Selection and Employment o f Consultants b y the World Bank Borrowers, January 1997, revised January 1999 and May 2002. All civil works, goods and services will be procured using India-specific Bank’s Model Standard Pre-qualification and Bidding Documents. Specific procurement arrangements are summarized in Tables A and Al , and are briefly described below.

Bl . Works [uS$251.38 Million]

Intemational Competitive Bidding (ICB): US239.32 Mi l l ion Equivalent including contingencies:

The works relating to construction o f bridge across River Ganga and approaches for the bridge will be implemented in 3 contract packages valued US239.32 million. One contract will be o f USS26.10 mill ion and other two o f US$95.98 mill ion and US$117.23 mi l l ion respectively. Pre-qualification for all three contract packages have been completed. Bids for the bridge package have already been opened on May 2, 2003 and contract award has been cleared with the Bank on June 2, 2003. The bids for the two approach packages have also been invited and are scheduled to be received in late September 2003. The bidding documents for these packages were compiled based on Bank approved bid documents. Preference will be given to domestic contractors in accordance with Appendix 2 o f Banks procurement guidelines.

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National Competitive Bidding INCB): US$l 1.55 Mi l l ion Equivalent including contingencies:

Small civil works valued individually equivalent o f US$lO.O mill ion and below with respect to corridor management up to an aggregate value o f U S $ l 1.55 w i l l be procured following N C B procedures in small convenient packages.

Direct contractindForce Account: US$0.5 1 Mi l l ion Equivalent:

Minor scattered works relating to environmental protection etc. value USS0.5 1 mill ion - or all o f small value and are not amenable for competitive bidding. Hence they are to be procured in packages o f US$50,000 equivalent or less on the basis o f (i) lump s u m fixed price contracts soliciting quotations from at least three qualified suppliers up to an aggregate o f US$0.40 mill ion and (ii) as a last resort through force account departmentally (up to an aggregate ceiling o f US$O. 1 1 million).

B2. Goods /US$9.64 Mi l l ion Equivalent]

Goods and equipment - including computer hardware and software, office, laboratory and conidor management equipment w i l l be procured following ICB procedures for packages above US$200,000 equivalent (total US$7.39 million); the rest w i l l be procured using N C B procedures in packages below US$200,000 equivalent (total US$ 1.25 million). Small value off-the-shelf items individually costing US$30,000 equivalent per contract or less (total US$500,000) would be procured following NationaVIntemational Shopping procedures in accordance with World Bank Procurement Guidelines. Preference for domestically manufactured goods will be given in accordance with Appendix 2 o f the guidelines for items procured following ICB procedures. Satellite imagery, proprietary software, books, etc. valued US$lOO,OOO will be procured following Direct Contracting procedures in accordance with Procurement Guidelines. This component includes taxes on equipment amounting to US$0.40 million.

B3. Services /US$l5.45 Mil l ion Equivalent including contingencies]

Consultancy services will be procured as follows: ~

s1. Description of Services Estimated Cost Method o f No. Selection

1. Construction Supervision - Bridge Package US$1.49 million QCBS

The proposals for the Construction Supervision Consultancy for I C B Works have already been received and technical evaluation has been completed. The selection process w i l l be completed and contract signed well before signing o f the works contracts.

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B4. Procurement by Beneficiaries of R&R Assistance pSS l7 .71 Mi l l ion Equivalent including contingencies]

R&R assistance (US$17.71 mill ion consisting o f small civil works valued US$14.1 mill ion and simple items o f goods, livestock etc. valued at US$3.61 million) w i l l be paid to beneficiaries for each package through a consultative process. Payments w i l l be made from the project director’s office, and the Bank share (US$1.5.58 million) w i l l be reimbursed on the basis o f Statement o f Expenditure (SOE). R&R assistance to individual PAPS will not exceed US$2,000 equivalent per family, and procurement w i l l include landscaping, buildings for residences and stores, livestock, agricultural implements, seedlings, hand tools, and mopeds (small motorcycles). These will be procured individually by the beneficiaries as per commercial practices, following shopping or direct contracting procedures as appropriate.

C. Procurement Planning

NHAI has prepared a procurement plan for all the identified works packages under the project, which has been reviewed and approved by the Bank. Procurement o f all works packages will follow arrangements outlined in accordance the project’s procurement plan.

D. Prior Review of Procurement Decisions by the Bank [Refer to Table B]

0 All I C B contracts for works [3 packages], N C B contract for works (above US$3.0 million), and all goods contracts valued to US$200,000 and above

Consultant contracts with an estimated value o f US$lOO,OOO equivalent and above for f i rms, and US$50,000 equivalent and above for individuals.

0

E. NCB Provisions

All N C B contracts shall be awarded in accordance with the provisions o f Paragraphs 3.3 and 3.4 o f the Guidelines for Procurement under IBRD Loans and IDA Credits published by the Bank and revised in January 1999 [the Guidelines]. In this regard, all N C B contracts to be financed from the proceeds o f the Loan shall follow the following procedures:

1.

2.

3.

4.

5.

6.

Only the model bidding documents for N C B agreed with the GO1 Task Force [and as amended for time to time], shall be used for bidding;

Invitations to bid shall be advertised in at least one widely circulated national daily newspaper, at least 30 days prior to the deadline for the submission o f bids;

No special preference will be accorded to any bidder either for price or for other terms and conditions when competing with foreign bidders, state-owned enterprises, small-scale enterprises or enterprises from any given State;

Except with the prior concurrence o f the Bank, there shall be no negotiation o f price with the bidders, even with the lowest evaluated bidder;

Extension o f bid validity shall not be allowed without the prior concurrence o f the Bank (i) for the f i rs t request for extension if it i s longer than eight weeks; and (ii) for all subsequent requests for extension irrespective o f the period (such concurrence will be considered by Bank only in cases o f Force Majure and circumstances beyond the control o f the Purchaser I Employer);

Re-bidding shall not be carried out without the prior concurrence o f the Bank. The system o f rejecting bids outside a predetermined margin or “bracket” o f prices shall not be used in the project;

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7. Rate contracts entered into by Directorate General o f Supplies & Disposals, w i l l not be acceptable as a substitute for NCB procedures. Such contracts will be acceptable however for any procurement under National Shopping procedures;

Two or three envelop system w i l l not be used. 8.

F. Procurement Information

Procurement information will be collected and recorded as follows:

1. prompt reporting o f contract award information by the project management units for the respective components; and

comprehensive quarterly reports prepared by NHAI indicating:

0

2.

revised cost estimates for individual contracts and total cost; and

revised timings o f procurement actions including advertising, bidding, contract award, and completion time for individual contracts.

G. Proposed Procurement Arrangements - Thresholds and Frequency of Supervision

The project elements, their estimated costs, and proposed methods o f procurement are summarized in Table A. Thresholds are given in Table B. Figures in parenthesis are the respective amounts to be financed by the Bank.

Procurement methods (Table A)

Table A: Project Costs by Procurement Arrangements (US$ million equivalent)

I' Figures in parentheses are the amounts to be financed by the Bank Loan. A l l costs include contingencies.

includes civil works and goods to be procured through national shopping, consulting services, services o f contracted staff o f the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units.

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Table A I : Consultant Selection Arrangements (optional) (US$ million equivalent)

" Including contingencies

Note: QCBS = Quality- and Cost-Based Selection QBS = Quality-based Selection SFB = Selection under a Fixed Budget LCS = Least-Cost Selection CQ = Selection Based on Consultants' Qualifications Other = Selection of individual consultants (per Section V of Consultants Guidelines), Commercial Practices, etc. N.B.F. = Not Bank-financed Figures in parentheses are the amounts to be financed by the Bank Loan.

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Prior review thresholds (Table B)

Table B: Thresholds for Procurement Methods and Prior Review'

Contract Value Threshold

(US$ thousands)

Al l Contracts

All contracts valued over USS3.0 million

Expenditure Category 1. Works Civil Works for Construction of Bypass

Contracts Subject to Procurement Prior Review

Method (US$ millions)

ICB 3 packages valued in aggregate at US$239.32

million

NCB 2 packages valued in aggregate at US$l 1.55

million

Civil Works for Corridor Management

US$200,000 and above

;or f i rms, US$lOO,OOO and above;

For individual, US$50,000 and above

2. Goods ICB Packages valued US$7.39 million in aggregate

Bank Guidelines and as at Paragraph B3 above

3. Services

4. Miscellaneous 5. Miscellaneous 6. Miscellaneous

Total value of contracts subject to prior review: US$272.5 million

Frequency of procurement supervision missions proposed: One every 12 months (includes special procurement supervision for post-review/audits)

Overall Procurement Risk Assessment: Average

I\ Thresholds generally differ by country and project. Consult "Assessment o f Agency's Capacity to Implement Procurement" and contact the Regional Procurement Adviser for guidance.

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Annex 6(B): Financial Management and Disbursement Arrangements INDIA: Allahabad Bypass Project

Financial Management

1. Summary of the Financial Management Assessment Country Issues. (i) The timeliness o f audit reports i s identified as a country issue and w i l l be relevant to the project. There have been delays in submission o f entity audit report by the NHAI in the past beyond the 6-month requirement after the closing o f every financial year. This i s due to delays in submission o f accounts by NHAI to CAG. (ii) The country issue with respect to timely availability o f funds to the project implementing entity wi l l not be an issue in th i s project as NHAI receives funds in advance every year from M O R T H budgetary allocation.

Strengths and Weaknesses. The strengths include the following: (i) NHAI has been involved in the implementation o f TNHP and GTRIP since 2000 and has been adequately exposed to the Bank’s disbursement procedures and financial reporting requirements; (ii) a budgeting and accounting system has been established and i s operational; (iii) staff are trained to carry out basic accounting functions at all levels including PIUs; (iv) a system o f periodic financial reporting from the PIUs to the H Q i s operational and (v) a project financial management manual has recently been updated, which sets down in detail accounting and financial reporting policies, procedures & processes, operation o f the project financial management system and reporting an-angements. In addition to the two significant weaknesses described in Section F.2 o f the main text (which pose modest r isks to the project), three more weaknesses have been identified below:

Significant Weakness NHAI’s accounting practice o f loading project cost with a 1% charge o f Agency Commission to be included in project cost i s atypical.

The accounting practice o f NHAI o f recording the highways that i t builds as CWIP despite the fact that these are not owned by NHAI i s nonconforming with usual Dractice. The internal auditors point out that payments o f Rs. 755.9 mill ion to Central and state govemment agencies for works like shifting o f utilities etc. have been accounted for as CWIP although utilization certificates have not been obtained.

Mitigation For the purpose o f Bank projects, the Agency Commission amount will be met from counterpart funding and this will be certified by the auditors. This i s mitigated by the fact that the title to the highways formally rests with the govemment, while the maintenance responsibility i s with NHAI. C A G advised that this be accounted as an advance and NHAI has agreed. Note that the advances have not been claimed from the Bank.

Fund Flow. Funds for the project are from budgetary allocation o f MORTH, and w i l l f low from M O R T H to NHAI quarterly in advance. Reimbursements from the Bank to NHAI w i l l be retrospective after project expenditures have been incurred. The funds flows from M O R T H to NHAI have worked smoothly in the past. The funds flow to the PIUs from NHAI H Q have also worked smoothly for the other Bank funded projects. NHAI w i l l transfer funds to the Allahabad P I U based on quarterly forecasted cash requirements submitted by it. Funds transferred to the P I U w i l l be specifically identified to the project for which these are transferred. Although the Allahabad P I U will operate a common bank account for both TNHP and ABP that it implements, the sources and uses o f funds for each project w i l l be clearly distinguished in the account.

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Staffing. The finance function at NHAI H Q i s headed by a Member (Finance) who i s supported by a GM (Finance) and 3 Deputy General Managers (Accounts), 3 Managers, 3 Accounts Officers, 6 Accountants and a Cashier. The P I U i s staffed with a Manager (Finance) and an Accountant, both o f whom report to the GM (Finance) at the HQ. The Manager (Finance) at the P I U i s responsible for accounting, vetting the final bills o f c iv i l contractors, and managing funds.

Accounting Policies and Procedures. NHAI follows double entry accrual accounting based on accounting standards issues by the Institute o f Chartered Accountants o f India. I t has an accounting manual that sets out standard procedures for maintenance o f accounts and for transaction entry into the computerized FMS as per Indian Accounting Standards and NHAI Rules (1 997). This manual has recently been upgraded.

Project accounts are maintained by PIUs using the FMS, and cover all sources (including donor contributions)and uses o f funds. Financial statements are generated from the FMS. All transactions at PIUs are captured through a Chart o f Accounts which represents the General Ledger (GL) account heads and project activities. GL account heads and codes are common for all o f N H A I ' s projects. All account codes are identified to projects (single or multiple) to facilitate the automatic filtration o f project codes at the time o f voucher entry. For every project, information i s also captured by component, sub component, main activity and activity and further cross referenced by disbursement category. The expenditure incurred on all capital works i s shown as CWIP and no depreciation i s provided thereon. When a decision i s taken with regards to capitalization, the value o f such CWIP i s capitalized under appropriate heads.

NHAI has the practice o f charging 1% o f the value o f completed works as Agency Commission. Agency Commission charges are separately computed and accounted for each project at PIUs. The total project cost when worked out by the Authority i s loaded with a 1% fee o f Agency Commission and this i s met by counterpart funding.

Overall Conclusion. NHAI's financial management systems are adequate for meeting the Bank financial management requirements. I t s computerized financial management systems are functional. However, the delays in the submission o f entity audit reports and the fact that there are no separate bank accounts for different projects in the Allahabad P I U pose modest risks to the project, and these issues w i l l be addressed through mitigation measures specified in Section F.2 o f the main text.

2. Audit Arrangements Internal Audit. The internal audit of NHAI i s done by Pricewaterhouse Coopers. They will audit the PIU at Allahabad and their report shall be made available to the Bank upon request. The audit w i l l be camed out in accordance with the International Standards o f Auditing.

External Audit. The statutory audit o f NHAI i s done by the C&AG. The TOR o f the audit w i l l be the same as that used for GTRIP and TNHP. Provision for the separate audit o f the P I U at Allahabad will be introduced in this project.

The following audited annual project financial management statements are to be submitted to the Bank within 6 months o f the close o f the GO1 financial year: (i) statement o f sources and uses o f funds classified by expenditure categories, components and sources o f funds; (ii) special account reconciliation; and (iii) statement o f withdrawals f rom the Credit/Loan based on SOEs or PMRs. The following audit reports w i l l be received by the Bank:

~~ ~~

Agency Audit Report Audited by NHAI - P I U P I U (including Project / SOE) C A G

NHAI Entitv C A G I GO1 - DEA I Special Account I C A G I

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In accordance with the Bank policies for submission o f a separate financial statement for the entity as a whole for all revenue earning entities, NHAI would be required to submit entity audit reports and statements o f accounts within 6 months o f the close o f the financial year. All other audit reports from NHAI - P I U and GO1 will also be received within 6 months o f the close o f the financial year.

Reportinp and Monitoring. Financial Monitoring Reports (financial/physical/procurement progress related reports) will be submitted on a quarterly basis from implementing P I U to the H Q at NHAI and from NHAI to the Bank. The first FMR for ABP will be submitted to the Bank within 45 days o f the end o f the first quarter from the date o f loan effectiveness.

3. Disbursement Arrangements Disbursements from the Loan w i l l initially be made in the traditional method (replenishment and reimbursement with full documentation or against statement o f expenditure). The Financial Monitoring Report (FMR) based disbursements would be adopted from April 1,2004, subject to satisfactory operation o f the financial management system, and the preparation o f regular, timely and adequate quality FMRs satisfactory to the Borrower and the Bank. A Special Account would be maintained in the Reserve Bank o f India; and would be operated by the Department o f Economic Affairs (DEA) o f GOI. The authorized allocation o f the Special Account would be USSlO mill ion that represent about 3 months o f initial estimated disbursements from the IBRD Loan. The Special Account would be operated in accordance with the Bank’s operational policies. The project w i l l submit withdrawal applications to Controller o f Aid, Accounts and Audit (CAA&A) in DEA for onward submission to the Bank for replenishment o f the special account or reimbursement.

Supervision Plan. The project would be supervised on a bi-annual basis. The supervision plan will include the scrutiny o f Project Monitoring Reports for the project and financial statements for the P IU and NHAI. Allocation of loan proceeds (Table C)

Expenditure Category l(a) Civ i l Works for Bypass Construction l(b) Civ i l Works for Corridor Management

l ( c ) C iv i l Works (R&R and EMP) 2. Goods

3(a l Services Provided b v consulting f i r m s

Table C: Allocation of Loan Proceeds

Amount in US$million I Financing Percentage 191.45 80% 6.93 i 80%

j 13.15 90% 12.02 100% o f foreign or ex-factory costs and

80% o f other items procured domestically

12.68 90% o f total expenditure 3(b) NGO services and training

Total Project Costs with Bank Financing

Front-end fee

1.37 100%

237.60

2.40

240.00 Total Note: 80% of the expenditure for civil works under I (b) would be jinanced by the Bank Loan up to a total maximum amount of US$6,930,000

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Use of statements of expenditures (SOEs):

Disbursements w i l l be made on the basis o f Statement o f Expenditure for (a) c iv i l works for contracts not exceeding US$3,000,000; (b) goods for contracts not exceeding USS500,OOO; (c) consultants for contracts not exceeding US$lOO,OOO for f i r m s and US$50,000 for individuals; and (d) all R&R costs and training.

Retroactive Financing: Retroactive Financing up to a limit o f USS5.0 mill ion i s available to cover eligible project expenditures as agreed with the Bank and incurred after June 01,2003. Retroactive Financing w i l l support project costs pertaining to c iv i l works (US$3.2 million), consultant services (US$1.2 million) and eligible R&R expenses (USrS0.6 million).

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Annex 7: Project Processing Schedule INDIA: Allahabad Bypass Project

I Project Schedule Planned Actual Time taken to prepare the project (months) First Bank mission (identification)

/Appraisal mission departure I 05/20/2002 I 0412 112003 I

12 21 08/27/2001 08/27/2001

Negotiations

Planned Date of Effectiveness

Prepared by: National Highways Authority o f India

09/02/2003 09/02/2003 12/20/2003

Preparation assistance: Partly funded by the Second National Highway Project (Ln 3470-IN, Cr 2365-IN) and partly by NHAI's own resource.

Bank staff who worked on the projec'

Zhi Liu A. K. Swaminathan Ani1 Bhandari Sujit Das Sonia Chand Sandhu Mridula Singh Arnab Bandyopadhyay Tapas Paul N. Raman Priya Goel Venkat Rao Bayana Piers Vickers Ernst Huning Manmohan Singh Bajaj Isabel Chatterton Raj Soopramanien Vikram Raghavan Hyacinth Brown Irene Christy Sangeeta Anand Rajesh Singh

Name included:

Task Team Leader, Transport Economist Highway Engineer Transport Specialist, Institutional Strengthening Highway Engineer Environmental Specialist Social Development Specialist Highway Engineer Environmental Specialist Procurement Specialist Financial Management Specialist Social Development Consultant Transport Specialist Institutional Development Consultant Procurement Specialist Financial Specialist Counsel Counsel Finance Officer Program Assistant Program Assistant Program Assistant

Speciality

- 39 -

Annex 8: Documents in the Project File* INDIA: Allahabad Bypass Project

A. Project Implementation Plan NHAI - Allahabad Bypass Project, Borrower's Project Implementation Plan, July 2003.

B. Bank Staff Assessments

1.

2.

Financial Management Assessment o f NHAI, by project team financial management specialist, April-June, 2003. Independent Assessment o f Biodiversity Impacts o f Allahabad Bypass Project, a study commissioned to independent consultant, March 2003.

C. Other 1. NHAI - Report on Selection o f Alternatives. November, 200 1. 2. NHAI - Detailed Project Report, Allahabad Bypass Project, from Km 158 (Kokhraj) to Km 245

(Handia) o f NH-2, April 2003. 3. NHAI - Allahabad Bypass Project: Environmental Impact Assessment Report, July 2003. 4. NHAI - India Allahabad Bypass Project: Environmental Assessment Summary, March 2003. 5. NHAI - India Allahabad Bypass Project: Environmental management Plan - Package 1, July 2003. 6. NHAI - India Allahabad Bypass Project: Environmental management Plan - Package 2, July 2003. 7. NHAI - India Allahabad Bypass Project: Environmental management Plan - Package 3, July 2003. 8. NHAI - India Allahabad Bypass Project: Resettlement Action Plan, July 2003. 9. NHAI - India Allahabad Bypass Project: Independent Review Report, April 2003.

10. NHAI - Draft TOR for Operational Manual for Environmental and Social Management System, June 2003.

1 1. NHAI - Draft TOR for Road User Satisfaction Surveys, June 2003. *Including electronic files

- 40 -

Annex 9: Statement of Loans and Credits INDIA: Allahabad Bypass Project

14-Jul-2003 Difference between expected

and actual disbursements* Original Amount in US$ Millions

Project ID FY Purpose IBRD IDA GEF Cancel. Undisb. Orig Frm Rev'd 0.00 473.12 PO67606 2003 UPROADS 488.00 0.00 0.00

PO71272 PO72123 PO73094 PO50649 PO76467 PO75056 PO50668 PO50653 PO69889 PO71033 PO74018 PO72539 PO50647 PO40610 PO50656 PO38334 PO59242 PO55454 PO55455 PO71244 PO70421 PO10566 PO67543 PO67216 PO35173 PO49770 PO50657 PO50667 PO10505 PO67330 PO35172 PO09972 PO59501 PO45049 PO55456 PO41264 PO50651 PO45051 PO45050 PO49537 PO50637 PO50646 PO35624 P 0 3 5 8 2 7 PO38021 PO35169 PO10561 PO10496 PO49477 PO49385 PO35158 PO10531

2003 AP RURAL POV REDUCTION 2003 Tech/Engg Quality Improvement Project 2003 AP COMM FOREST MANG 2003 TN ROADS 2003 Chan DRPP 2003 Food & Drugs Capacity Building Project 2002 MUMBAI URBAN TRANSPORT PROJECT 2002 KARNATAKA RWSS II 2002 MIZORAM ROADS 2002 KARN TANK MGMT 2002 Gujarat Emergency Earthquake Reconstruct 2002 KERALA STATE TRANSPORT 2002 UTTAR PRADESH WATER SECTOR RESTRUCTU 2002 RAJ WSR? 2001 TECHN EDUC 111 2001 RAJ POWER I 2001 MPDPIP 2001 KERALA RWSS 2001 RAJ DPEP II 2001 Grand Trunk Road Improvement Project 2001 KARN HWYS 2001 GUJARAT HWYS 2001 LEPROSY II 2001 KAR WSHD DEVELOPMENT 2001 POWERGRID II 2000 REN EGY II 2000 UP Health Systems Development Project 2000 UP DPEP 111 2000 RAJASTHAN DPlP 2000 IMMUNIZ4TION STRENGTHENING PROJECT 2000 UP POWER SECTOR RESTRUCTURING PROJEC 2000 NATIONAL HIGHWAYS 111 PROJECT 2000 IN-TAfor Econ Reform Project 2000 APDPIP 2000 IN-Telecommunications Sector Reform TA 1999 WTRSHD MGMT HILLS II 1999 MAHARASH HEALTH SYS 1999 2ND NATL HIV/AIDS CO 1999 RAJASTHAN DPEP 1999 AP POWER APL I 1999 TN URBAN DEV II 1999 UP SODIC LANDS II 1998 DIV AGRC SUPPORT 1998 WOMEN 8 CHILD DEVLPM 1998 DPEP 111 (BIHAR) 1998 UP FORESTRY 1998 NATLAGR TECHNOLOGY 1998 ORISSA HEALTH SYS 1998 KERALA FORESTRY 1998 AP ECON RESTRUCTURIN 1997 AP IRRIGATION 111 1997 REPRODUCTIVE HEALTH1

0.00 0.00 0.00

348.00 0.00 0.00

463.00 0.00 0.00 0.00 0.00

255.00 0.00 0.00 0.00

180.00 0.00 0.00 0.00

589.00 360.00 381 .OO

0.00 0.00

450.00 80.00

0.00 0.00 0.00 0.00

150.00 516.00

0.00 0.00

62.00 85.00 0.00 0.00 0.00

210.00 105.00

0.00 79.90 0.00 0.00 0.00

96.80 0.00 0.00

301.30 175.00

0.00

150.03 250.00 108.00

0.00 112.56 54.03 79.00

151.60 60.00 98.90

442.80 0.00

149.20 140.00 64.90

0.00 110.10 65.50 74.40

0.00 0.00 0.00

30.00 100.40

0.00 50.00

110.00 182.40 100.48 142.60

0.00 0.00

45.00 111.00

0.00 50.00

134.00 191.00 85.70

0.00 0.00

194.10 50.00

300.00 152.00 52.94

100.00 76.40 39.00

241.90 150.00 248.30

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

20.31 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

45.00 0.00

159.10 258.77 11 6.87 348.00 115.23 55.65

509.19 161.64 60.57

108.04 389.85 236.12 157.37 147.92 54.99

117.31 105.55 62.62 61.57

505.52 315.27 293.58

12.58 107.00 297.42 112.69 97.50 73.68 95.65 56.05 45.50

398.43 41.16 68.09 56.42 49.43 99.75 89.21 50.71 17.68 28.65

101.73 33.86

170.39 110.11

8.44 81.31 58.47 13.06

195.65 65.43 79.74

~

14.02 4.51 0.65

-2.08 0.00 0.00 0.00 9.18 4.67 2.27 3.43

233.16 0.12

33.18 10.59 15.66 63.81 25.98 12.67 0.76

151.52 54.27

140.58 1.91

25.94 93.42 38.64 25.96 50.13 42.80 32.01 31.50

168.53 12.96 17.50 51.42 38.46 77.54 49.75 69.56 37.99 15.01 72.51 35.62

106.83 106.82

9.19 86.33 42.30 12.89

186.80 117.91 76.45

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

18.22 0.00 0.00 0.00

16.40 0.00 0.00 0.00

17.91 76.49

- 41 -

Difference between expected and actual

disbursements' Original Amount in US$ Millions

Project ID FY Purpose IBRD IDA GEF Cancel. Undisb. Orig Frm Rev'd PO10473 1997 TUBERCULOSIS CONTROL 0.00 142.40 0.00 0.00 78.06 86.04 0.00

PO10511 1997 MALARIA CONTROL 0.00 164.80 0.00 46.50 55.95 104.57 0.00

PO36062 1997 ECODEVELOPMENT 0.00 28.00 20.00 5.86 3.91 11.55 4.63

PO43728 1997 ENV CAPACITY BLDG TA 0.00 50.00 0.00 0.94 8.30 14.04 0.00

PO09584 1997 ECODEVELOPMENT 0.00 0.00 0.00 2.34 1.94 5.67 0.00

PO44449 1997 RURAL WOMEN'S DEVELOPMENT 0.00 19.50 0.00 6.72 6.50 14.51 -3.72

P 0 0 9 9 9 5 1997 STATE HIGHWAYS I(AP) 350.00 0.00 0.00 0.00 59.48 59.48 -200.52

PO49301 1997 A.P. EMERG. CYCLONE 50.00 100.00 0.00 19.00 10.11 33.76 14.76

PO10480 1996 BOMBAY SEW DISPOSAL 167.00 25.00 0.00 22.00 15.71 39.82 8.44

PO10485 1996 HYDROLOGY PROJECT 0.00 142.00 0.00 19.64 10.15 51.25 27.60 0.00 PO35825 1996 STATE HEALTH SYS II 0.00 350.00 0.00

PO35170 1996 ORISSA POWER SECTOR 350.00 0.00 0.00 95.00 53.79 148.79 3.30 PO10529 1996 ORISSA WRCP 0.00 290.90 0.00 0.00 55.03 80.57 31.59 PO10461 1995 MADRAS WAT SUP I1 275.80 0.00 0.00 189.30 6.63 195.93 1.13 PO10476 1995 TAMIL NADU WRCP 0.00 282.90 0.00 25.01 29.14 94.26 63.16 PO10522 1995 ASSAM RURAL INFRA 0.00 126.00 0.00 0.00 19.99 34.30 24.63

Total: 6567.80 6769.74 20.00 497.62 8000.49 3561.40 104.02

0.00 36.15 73.94

- 42 -

INDIA STATEMENT OF IFC's

Held and Disbursed Portfolio May 30 - 2003

In Millions US Dollars

Committed Disbursed IFC IFC

F Y Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic IndAsia Fund 2000

1996 1985l90l94 200 1 0193196 1996 1996 1992 1992 1992 1992194197 2001 2001 1981190193 200 1 2002 2003 1996199100

1992196197 2003 200 1 1997 1995 200 1 200 1 1995198 1997 1997100 1995 2001103 2000102 0 1998 1990 198 1186W9192l94 2000 1989190194 1987188190193 1989 1996 2002 199 119319610 1 200 1 1991

India Direct Fnd India Lease Indian Seamless Indo Rama Indus I1 Indus I1 Mgmt Indus VC Mgt Co Indus VCF Info Tech Fund Ispat Industries Jetair LeamingUniverse M&M MIECL MMFSL MSSL Moser Baer

NewPath Orchid Owens Coming Prism Cement RCIHL RTL Rain Calcining SAPL SREI Sara Fund Spryance Sundaram Home TCFC Finance Ltd TCWIICICI

TISCO Tanflora Park Tata Electric Titan Industries UCAL. United Riceland Usha Beltron VARUN Vysya Bank WIV

NICCO-UCO

TDICI-VECAUS I1

Total Portfolio:

0.00 0.00 0.00

10.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

10.44 0.00

29.33 2.24 0.00 0.00

18.24 11.25 0.00 0.00 0.00 0.00

10.00 0.00 0.00

10.65 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

10.00 2 1 .oo 0.00 0.00 0.00

15.00 1.22 0.30 0.00 1 . I 2 4.25 0.00 0.01 0.60 0.62 3.00 0.00 0.25 0.55 1.62 0.00 2.23

14.80 0.00

10.00 6.08 0.00 5.02 1.97 0.45 0.00 0.07 0.00 5.94 1 .oo 0.00 0.00 6.45 0.15 0.00 0.5 1 0.00 0.51 0.38 0.00 3.60 0.36 3.66 2.05

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

15.00 0.00 0.00 0.00 1.46 0.00 0.00 0.00 0.00

10.00 0.00 0.00 0.00 0.00 0.00 0.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 6.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

10.44 0.00

29.33 2.24 0.00 0.00

18.24 11.25 0.00 0.00 0.00 0.00

10.00 0.00 0.00

10.65 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

10.00 15.00 0.00 0.00 0.00

0.61 6.66 0.30 0.00 1.72 4.25 0.00 0.01 0.60 0.62 3.00 0.00 0.25 0.55 1.15 0.00 0.00

14.80 0.00 4.50 6.08 0.00 5.02 1.97 0.45 0.00 0.07 0.00 5.94 1 .oo 0.00 0.00 6.45 0.15 0.00 0.00 0.00 0.51 0.38 0.00 3.60 0.36 3.66 2.05

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

15.00 0.00 0.00 0.00 7.46 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

196.16 191.48 37.46 32.50 111.12 153.76 27.46 22.64

- 43 -

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic 2000 APCL 7.10 0.00 1.90 0.00 2003 Alok 17.50 0.00 2.50 0.00 2003 BHF 20.45 0.00 0.00 0.00 2003 CCIL Swap 1 S O 0.00 0.00 0.00 2003 Dataquest Mgmt. 0.00 1 .oo 0.00 0.00 2003 Dewan Housing 12.56 0.00 0.00 0.00

200 1 GI Wind Farms 9.79 0.98 0.00 0.00 2003 HDFC - Loan 100.00 0.00 0.00 100.00 2003 L&T 50.00 0.00 0.00 0.00 2003 Max Healthcare 18.00 0.00 0.00 0.00 2003 Niko Resources 40.00 0.00 0.00 0.00

2002 TELCO 1 67.00 0.00 0.00 0.00 200 1 Vysya Bank 0.00 0.00 0.00 0.00

2002 Escorts Telecom 32.00 0.00 15.00 30.00

2003 SPL 5.30 3.60 0.00 5.30

Total Pending Commitment: 381.21 5.58 19.40 135.30

- 44 -

Annex 10: Country at a Glance INDIA: Allahabad Bypass Project

POVERTY and SOCIAL

2001 Population, mid-year (millions) GNI per capita (Atlas method, US$) GNI (Atlas method, US$ billions)

Average annual growth, 1995-01

Population (%) Labor force (%)

Most recent estimate (latest year available, 1995-01) Poverty (% of population below national poverty line) Urban population (% of total population) Life expectancy at birth (years) Infant mortality (per 1,000 live births) Child malnutrition (% of children under 5) Access to an improved water source (% ofpopulation) Illiteracy I% of population age 15+) Gross primary enrollment I% of school-age population)

Male Female

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1982

GDP (US$ billions) Gross domestic InvestmenffGDP Exports of goods and services/GDP Gross domestic savingslGDP Gross national savingslGDP

Current account balancelGDP Interest paymentslGDP Total debt/GDP Total debt servicelexports Present value of debffGDP Present value of debffexports

188.0 22.4

6.1 18.6 19.9

-2.0 0.3

12.1 11.1

1982-92 1992-02 (average annual growth) GDP 5.6 6.1 GDP per capita 3.4 4.3 Ex~orts of aoods and services 6.1 12.8

lndia

1,033.4 470

480.8

1.8 2.3

29 26 63 69 47 88 42

101 109 92

1992

266.9 21.9

8.6 22.0 21.9

-0.6 1.3

32.0 29.2

2001

3.9 2.1

23.4

South Asia

1,355 460 617

1.9 2.4

28 63 74 47 87 45

100 110 90

2001

460.6 22.5 13.8 23.4 25.3

-0.6 0.9

21.6 14.0

2002

5.5 3.7

Low- Income

2,459 420

1,030

1.9 2.4

32 59 77

76 38 96

102 86

2002

481.4 22.4 13.3 24.0 25.9

0.2 0.8

20.2 11.8 14.7 89.8

2002-06

6.0 4.5

6.0 10.7

Development dlamond'

Life expectancy

T GNI Gross Per primary capita enrollment

I i

Access to improved water source

WUi" lndia Low-income group

Economic ratios.

Trade

5 Investment 3omestic

savings

Indebtedness

_I .w*.vxI lndia Low-income group

STRUCTURE of the ECONOMY

(% of GDP) Agriculture Industry

Services

Private consumption General government consumption Imports of goods and services

Manufacturing

(average annual growth) Agriculture Industry

Services

Private consumption General government consumption Gross domestic investment Imports of goods and services

Manufacturing

1982

37.4 25.3 16.3 37.2

70.2 10.1 8.8

1982-92

3.0 6.8 7.0 6.9

5.4 6.8 5.4 5.4

1992

31.5 26.4 16.1 42.1

66.7 11.4 8.6

1992-02

3.0 6.4 7.1 8.2

5.5 7.3 7.5

13.7

2001 2002

24.9 25.0 26.6 25.9 15.7 15.3 48.5 49.2

65.1 65.4 13.1 12.8 14.5 13.9

2001 2002

-0.4 5.7 6.6 3.3 7.3 3.4 5.6 6.8

-1.1 5.4 0.6 7.2 9.4 3.0 6.5 3.5

Growth of Investment and GDP ("A) l : r I Growth of exports and Imports ("A)

45 T I

Note: 2002 refers to 2001-02; 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

- 45 -

India PRICES and GOVERNMENT FINANCE

Domestic prices (% change) Consumer prices Implicit GDP deflator

Government finance (% of GDP, includes current grantsJ Current revenue Current budget balance Overall surplusideficit

TRADE

(US$ millions) Total exports (fob)

Marine products Ores and minerals Manufactures

Gems and jewehy Readymade garments

Total imports (cif) Food Fuel and energy Capital goods

Export price index (1995=100) Import price index (1995=lOOJ Terms of trade /1995=100)

BALANCE of PAYMENTS

(US$ millions) Exports of goods and servlces

Software exports

Imports of goods and services Resource balance

Net income Net current transfers

Current account balance

Financing items (net) Changes in net reserves

Memo: Reserves including gold (US$ millions) Conversion rate (DEC, /oca/iUS$)

EXTERNAL DEBT and RESOURCE FLOWS

(US$ millions) Total debt outstanding and disbursed

IBRD IDA

Total debt service IBRD IDA

Composition of net resource flows Official grants Official creditors Private creditors Foreign direct investment Portfolio equity

World Bank program Commitments Disbursements Principal repayments Net flows Net transfers

1982

13.6 10.3

1982

8,697 313 463

5,547 849 733

15,970 1,446 5,832 2,209

96 125 77

1982

11,457

17,666 -6,209

213 2,314

-3,682

5,950 -2,268

4,390 9.0

1982

22,709 1,181 5,906

1,586 137 60

750 1,103

829 0 0

2,503 1,207

86 1,122 1,011

1992

15.6 13.8

1992

18,266 585 930

13,148 2,738 2,199

21,064 275

5,325 4,233

104 110 95

1992

23,288

24,879 -1,591

-3,830 3,783

-1,638

-1,757 3,395

9,220 24.5

1992

85,421 8,459

14,203

7,861 1,170

242

461 2,895 1,467

97 6

2,186 2,184

669 1,516

772

2001

3.9 4.5

19.6 -8.6

-10.8

2001

44,894 1,396 1,155

34,391 7,384 5,578

59,264 1,443

15,650 8,941

94 100 94

2001

63,764 6,341

75,656 -1 1,892

-3,821 12,798

-2,915

-1,581 4,496

42,281 45.7

2001

99,433 7,079

18,888

10,868 1,423

506

382

4,103 2,165 3,026

-237

999 1,761 1,361

400 -1 68

2002

3.1 3.5

19.2 -8.1

-1 1.8

2002

44,915 1,218 1,214

33,241 7,306 5,004

57,618 2,044

14,000 9,315

90 93 96

2002

65,201 7,174

73,705 -8,504

-2,654 12,125

967

-12,462 11,495

54,106 47.7

2002

97,071 6,835

19,269

9,282 1,089

565

336 -264

-1,608 2,342 2,760

2,244 1,636 1,148

488 -18

i”~ 97 98 a9 00 0,

wa-GDP deflator *CPI

I Export and import levels (US$ mill.)

~ _ ~ , o o o ,

50 000

25 000

0

O2 I 96 97 98 99 00 01

Q Exports Imports

I Current account balance to GDP (%)

1’1

Composition of 2002 debt (US$ mlll.)

G: 2,951 A: 6,835

19,269

F 44,640 D 4.518

58

A - IBRD E . Bilateral B . IDA D ~ Other multilateral F ~ Private C - IMF G . Short-term

- 46 -

Additional Annex 1 I : Environment & Social Assessment, EMP and RAP INDIA: Allahabad Bypass Project

Affected Districts Total land to be acquired Nature o f land Villages to be affected Households to be affected

1. Project Description

The proposed Allahabad Bypass i s an access controlled, 4-lane divided toll road, starting at Km 158 o f NH-2 near Kokhraj in Kaushambi district and ending at Km 245 o f NH-2 near Handia in Allahabad District, with an overall length o f about 84.7 km. The bypass i s proposed to avoid the traffic congestion in the historical city o f Allahabad. I t will pass through predominantly agricultural lands. The entire Allahabad bypass project i s divided into three construction packages: (i) ABP-1: Ganga bridge with river training work from km 163.267 to km 164.280 (1.03 km); (ii) ABP-2: from km 158.000 to km 163.267 and km 164.280 to km 198.0 (38.987 km); and (iii) ABP-3: from km 198.0 to km 242.708 (44.708 km). Salient features o f the bypass alignment are:

Kaushambi, Pratapgarh and Allahabad 781 hectares (ha) (of which 687 ha private and 94 ha Government land) Mostly Agricultural 110 Villages 97

Structures to be affected Trees to be cut State Highway Crossing Major Rivers Canals Drain, Nullahs and Stream Underpasses

267 3,298 (Private trees on new alignment and trees on existing NH 2 sections) 3 (SH-38, SH-7 and SH-9) 3 (Ganga, Doab and Mansaita) 32 29 39 (7 pedestrians and 32 vehicular-cum-pedestrian)

2. Environmental and Forestry Clearances

The project has obtained the following clearances from the central and state governments: (1) environmental clearance from the Ministry o f Environment & Forests (MOEF); (2) forest clearance from the MOEF regional office; (3) permission from state forest department for private tree cutting; (4) N o Objection Certificate from the U P State Pollution Control Board (SPCB), as per the EIA Notification, 1994; (5) clearance from the SPCB under the Air Act, the Water Act and the Cess Act; (6) clearance o f Ground Water Board for withdrawal o f ground water for construction; and (8) clearance for sand mining from river authorities.

NHAI has applied for the State Forest Department clearance for trees cutting from the R O W o f existing NH-2 portion, and expects to obtain the clearance before c iv i l works start. In addition, the contractors w i l l obtain consent from the SPCB during the implementation period for setting up o f hot m i x plants, batching plant, and construction camps.

3.

Climate: The bypass will be located in the humid sub-tropical region with marked monsoon effects. The temperature varies from extreme high temperatures up to 47°C in summer to a low o f 4°C in winter. The annual average temperature i s around 27°C. The average wind speed i s in the range o f 4-5 km/h o f this area. The yearly average rainfall in the project area i s about 89 cm o f which over 90% occurs during the rainy season. The average relative humidity i s 64% and maximum i s 90%. N o change in the macro-climatic setting (precipitation, temperature and wind) i s envisaged due to the project.

Environmental Scenarios: Existing Situation, Impact Assessment and Mitigation

- 47 -

Geology and Seismicity: The project area i s geomorphologically a part o f the Ganga plain. According to the Bureau o f Indian Standards zoning map (IS: 1893) the Allahabad region i s a low-risk seismic zone 11. The entire length o f Allahabad bypass falls in this Zone I1 with a seismic coefficient o f 0.02. Road construction in this area w i l l have l i t t le impact on i t s overall earthquake potential since no blasting i s envisaged at the construction site.

Hydrology and Drainage: The proposed bypass passes through an almost flat terrain, with an average gradient o f 16 cm/Km. Impacts on the flowing water bodies w i l l mainly occur during construction period due to the diversion o f watercourses. This will cause constriction, increase velocity at the downstream o f the bridges and increase sediment load. The road design takes into consideration the cross-pavement drainage and local flooding or water logging. Rivers in project-influenced area are prone to occasional floods. To avoid damage to the pavement and road sections, the carriageway i s kept above the high flood level, and adequately-sized drains in the median and on either side o f service roads are planned to avoid flooding o f road surface. Bridges over the rivers and streams, and several other cross-drainage structures w i l l be provided along the natural depression across the bypass to maintain the natural f low o f water. I t i s expected that the proposed bypass would not have any significant influence on soil fertility on the land on either side o f the alignment.

Water Bodies and Aquatic Eco System: The proposed bypass alignment crosses a total o f 78 water bodies, including streams, drains, canals and three rivers (Ganga, Doab and Mansaita), 26 water tanks, 26 pump houses, 37 hand pumps and 44 wells. Ground water table o f the study area i s subject to seasonal variations and i s generally between 10-15m. The quality o f water i s by-and-large acceptable, except for alkalinity and hardness for some bore wells. A high level o f Total Suspended Solids has been observed in Doab river, whereas Total Dissolved Solids for Ganga and Mansaita Rivers are higher than Doab River. A number o f wells and hand pumps located within the ROW o f proposed alignment, w i l l be either partially or completely filled up for construction. The project envisages replacement o f each source o f water supply before removing them. The locations o f these new sources w i l l be decided in consultation with affected population.

No major impact has been anticipated in the river ecology due to the construction o f bridges over Ganga or other streams except the increase in turbidity during construction phase. Precautions have been incorporated in the engineering design, and construction schedule to minimize the impact on river ecology. The proposed bypass alignment does not affect aquatic water bodies and wetlands other than the ponds that w i l l be relocated. Marshy lands that appear on the alignment are seasonal. Therefore, there w i l l be no significant impact on inland water bodies.

Numerous irrigation canals that crisscross the study area are unlikely to be subjected to run-off discharges because they have properly raised bunks on their banks. In the operation phase, there i s l i t t le chance o f degradation of water quality and the aquatic ecosystem during normal operations except accidental discharges from drainage o f workers’ camps and from spillage in vehicle parking and/or fue l and lubricant storage areas. Such accidents could be potentially disastrous, but the probability o f such an accident i s quite low. The soil could also quickly percolate to underlying aquifer, resulting in any pollutant discharge percolating into the depths o f the earth.

Air Quality and Noise: The area w i l l be impacted by air pollution both during construction and operation stages. The major impacts i s generation o f dust, likely from the quarries, borrow areas and stone crushing units during construction. There also w i l l be generation o f exhaust gases, likely during the due to movement o f heavy machinery for clearance o f the R O W for construction. High levels o f S02, HC and NOx are likely to be emitted from hot-mix plant operations, and heating process during bitumen production. In the operation stage the major impact on air quality will be due to plying o f vehicles. Proposed mitigation measure include water spraying, covering vehicles during transportation, and ensuring

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emissions from vehicles and machinery are within stipulated limits. Monthly air quality monitoring measures will be carried out.

The prediction o f noise levels has been made for the years 2006,2026 and 2036 using the FHWA Transport Noise Model. As per the predicted results, the predicted noise levels for day time are well within Central Pollution Control Board limits up to the horizon year 2026. Night-time noise levels exceed in the horizon year 2026. Noise levels will increase during construction phase due to movement o f construction machinery and vehicles, and other allied activities such as establishment o f workers camps, stockyards. Moreover, as these activities are not likely to be placed near settlements the impacts o f increased noise w i l l be negligible. Mitigation measures include fitting vehicles and equipment will be fitted with silencers and subject to regular checks, maintaining distance between construction sites and hospitals, educational institutes, and providing them with suitable noise barriers.

Soils Quality and Erosion: As the soil i s alluvial with high s i l t composition, it w i l l cause siltation o f nearby water bodies. Soil erosion i s not a prominent feature in project influence area. Compaction o f soil w i l l occur in the due to movement o f heavy machinery and vehicles, setting up o f construction camps and stockyards. However, th i s i s a short duration impact. Appropriate measures have been specified in the Environment Management Plan (EMP) to minimize the area o f soil compaction. Loss o f productive soil i s anticipated due to earth-borrowing, but i s minimized by the use o f pond ash as a fill material in the embankment. Provision has been made in EMP to ensure that no productive areas are used for these borrowing, or allied activities.

Increased erosion i s possible, but adequate slope protection measures are proposed. To prevent the eroded material from entering the watercourse, s i l t fencing or cascade arrangements will be provided at the end o f ditches as they enter into the water bodies. Lining with stone pitching and filter blankets are also proposed. No soil erosion i s envisaged when the road i s in operation as all the slopes and embankments o f the project road shall be stabilized through sound engineering techniques. Soil contamination may take place due to moving vehicles or solid waste contamination from the labor camp set up. The sites where construction vehicles are parked and serviced are likely to be contaminated because o f leakage or spillage o f fuel, lubricants, asphalt or bitumen from construction vehicle and hot m ix plants. Refuse and solid waste from labor camps can also contaminate the soil. Unwarranted disposal o f construction spoil and debris w i l l add to soil contamination. This contamination i s likely to be carried over to water bodies in case o f dumping being done near water body. To mitigate this, the following are planned - anti-spillage measures during refueling, locating refueling sites away from water bodies, providing o i l interceptors, and disposal o f spills in accordance with the SPCB guidelines.

Use of Pond Ash: The project w i l l use 6.7 mill ion cubic meters o f pond ash from the Firoz Gandhi Thermal Power Station at Unchhahar in UP. This will have significant positive environment impact. Pond ash w i l l be transported over an average distance o f about 80 km to the site on covered dumpers. The haul roads will be improved to minimize dirt and dust, if required. The EMPs contain measures to avoid contamination o f ground and surface water due to leaching from pond ash storage, minimizing dust generation, etc.

Quarries and Crushers: The potential quarries identified are Dalla, Birohi, Kabrai, Banda and Shankargarh quarries for obtaining sand and aggregates. These are operational quarries, approved by Uttar Pradesh Public Works Department, and possess the required environmental clearances. As no new quarries are proposed, no new impacts are likely to arise due to quarrying operations. Though the quany materials are to be transported over long distances to the construction sites, almost al l the quarries identified have proper access roads, therefore, no major impacts during the haulage o f materials i s envisaged. To control dust generation along the haul roads, dust suppression measures will be enforced, including covering o f vehicles during transportation.

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Borrow Pits: Borrowing o f earth, and thereby impacts on productive land has been limited by the use of pond ash as fill material in the highway embankment. Borrow pits are identified within 100-600 m o f ROW along the bypass, for the residual requirement o f 5.4 mill ion cubic meter o f earth. Based on the total requirement and availability o f each soil type, estimates o f soil quantity to be obtained from each o f the borrow areas have been worked out in accordance with the national standards, recommended by the Indian Roads Congress 1. Cartage o f the borrow materials to the construction sites i s o f significance, as almost all such areas are accessible through dirt tracks only and therefore, spillage and compaction o f soil along these tracks will be a significant impact. Specifications for the size and depth o f borrow pits, and height and slant o f stock-piles have been laid down. Sand for construction w i l l be procured fkom Yamuna riverbed near Banda, where the sand mining i s already permitted. Precautionary measure like covering o f vehicles will be taken to avoid spillage during transportation.

Vegetation and Habitats: The area i s predominantly cultivated land interrupted by scattered human settlements wi th cluster o f thatched houses, orchards and common native trees. Narrow strip o f grasses are encountered at the riparian zone o f the river Ganga and other flowing water bodies. The entire length o f Allahabad bypass falls mainly under the administrative control o f Kausambi and Allahabad forest divisions. N o national park, sanctuary, wi ld l i fe reserves or reserved forests are present in near vicinity. The nearest wildlife sanctuary (Chitrakoot) i s beyond 60 k m s from the bypass alignment. Due to construction o f the Allahabad bypass 3298 trees have been identified to be cut which are common native plants, no endangered or rare plants are present among them. The area i s basically rural, and about 80 percent o f which i s agricultural land. Plenty o f plantations including orchards are present in th i s area. Therefore, ecological effect o f loss o f trees would not be felt significantly. Plantation o f trees on the roadside, along the median, and landscaping along the conidor w i l l help in compensating and restoring loss o f green coverage. Stored topsoil will be utilized to cover borrow areas and to fill tree pits.

Impact on Flora and Fauna: Impact on the wild animals o f this area w i l l not be significant. The area harbors 33 varieties o f wi ld animals though population o f each species i s very small. All o f these wi ld animals migrate from one place to other, and prefer to stay near human settlement, on the outskirts o f villages, in the riparian zone o f Ganga, other streams, natural drains and canals; grass patches and bushes scattered within the crop field or along the village roads. N o breeding/feeding grounds for any wi ld animal are present within the project area. The planned road w i l l not have a significant impact on the wi ld fauna o f the area, as similar patches o f habitat are present nearby.

An independent assessment o f impacts on bio-diversity in the area has been carried out. The agricultural landscape through which the proposed alignment passes through i s dotted with many villages with a high human density. With such high densities in a fertile cultivated area, i t i s highly improbable that any floral values (forest patches), fauna diversity (wildlife, birds, etc) would be able to sustain themselves due to the human disturbance factor. N o major wildlife occurs in the alignment area which can be termed as critical due to development o f the road. The only large mammal with some significant presence i s the nilgai which occurs in small groups across this landscape. Ni lgai i s a highly adaptable species and i s often known to occur across agricultural fields in northem India, and there would not be any adverse impact on the Nilgai population.

The alignment does not pass through any major wetland site or marshes except for the wetland (1.7 acres) which i s currently in a degraded condition due to extensive shrinkage by water hyacinth. Despite the fact that the wetland w i l l be impacted by the road development the local wetland values are insignificant to suggest a reversible action as a mitigative measure. Besides the wetland dries up in summer due to intense heat. The Ganges river ecosystem near the Kokhraj end o f the alignment where the proposed bridge w i l l be constructed will not have any significant impact on fauna diversity o f the riverine ecosystem. The presence o f Gangetic river dolphin in this patch i s very rare and any construction work on the bridge should be taken up only during the lean months when water levels are low in the river thereby minimizing any probable

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SN Budget Head 1. Environmental MitigatiodEnhancement 2. Monitoring 3. Training 4. Contingencies

Total

Implementation Arrangement: The project i s prepared and w i l l be implemented by NHAI with extensive outsourcing to the private sector and close coordination with the relevant states. Within NHAI, the bypass construction will be the direct responsibility o f Member (Technical), who will be supported by an on-site PIU, and the institutional strengthening actions are the responsibility o f Member (Administration). A high-level State Project Coordinating Committee in U P has been functional in coordinating with NHAI and

Cost (INR) 30,010,800 4,999,000 2,324,000 1,866,690

39,200,490

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facilitating land acquisition, resettlement, utility shifting, and tree cutting and re-plantation activities under the TNHP and GTRIP. An additional environmental manager i s recruited for the PIU.

5. Social Impact Assessment (SIA)

SIA Process. An SIA has been carried out during the project preparation, consisting o f the following activities: (a) census and baseline socioeconomic survey o f the potentially affected population; (b) consultations at village, district and state levels; (c) finalization o f entitlements and preparation o f the RAP and (d) finalizing implementation arrangements for the implementation o f the RAP, including monitoring arrangements.

The S I A process began with the social screening that involved public consultations at 9 locations on the bypass alignments. The screening helped identify 5 bypass alignment options and their associated social impacts, and the selection o f the present alignment with the minimum adverse social impacts. Then, a more detailed SIA on the selected alignment was conducted to assess baseline conditions and the potential impacts, to identify mitigation measures, and finally to prepare the RAP.

The SIA included census and socioeconomic surveys to identify all impacted people and to establish an entitlement cut-off date for those entitled to Relocation and Rehabilitation (R&R) assistance or other benefits from the project. A full census was undertaken to document the status o f the potentially affected titleholders and non-titleholders within the alignment, with respect to their assets and sources o f livelihood. This provided the basis for establishing a cut-off date determining who may be entitled to relocation assistance or other benefits from the project. However, the census carried out did not cover fami l ies o f each titleholders who are dependent on the affected asset. During implementation, disaggregated information o f fami l ies o f each titleholder will be collected and R&R will be provided in accordance to the entitlement framework. A detailed socioeconomic survey o f the all the affected population was also carried out to develop the monitoring and evaluation parameters and to develop the database. The surveys provided a baseline against which mitigation measures and support will be measured and includes a comprehensive examination o f people’s assets, incomes, important cultural or religious networks or sites, and other sources o f income such as dependence on common property resources. An analysis o f survey results included a gender analysis.

NHAI also reviewed i t s R&R Policy developed for the previous Bank-funded projects (i.e. TNHP and GTRIP) and assessed i t s applicability for the bypass project. And in consultation with project affected people and other key stakeholders and by enhancing the previous R&R Policy, NHAI has developed an exclusive R&R Policy for the bypass project.

Public Consultation and Disclosure: The public consultations helped achieve the following outcomes: minimum displacement, reductions in land acquisition, effective use o f community knowledge in route alignments, raising awareness on road improvement and impacts, and involving communities in the decision making process. More importantly, through consultations NHAI solicited the views and aspirations from the community in the formulation o f entitlement framework. Moreover, consultations helped identify the locations o f underpassedoverpasses that would be important for the community activities. The table below provides more detailed information on the consultations organized at different locations.

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Screening LocalIVillage RAP Preparation LocalNillage

N o of Locations Period (Dates) 9 31/06/2001 - 02/07/2001

110 15/12/2001 - 29/12/2001

Social Composition o f PAFs: A total o f 8008 households will be affected by the bypass project. The social composition o f these Project Affected Families was revealed by the social surveys. O f the total titleholders, the vulnerable group constitutes 2 1.4%, among which, the Schedule Tribes account for only 0.06%, Schedule Castes 1 1%, women-headed households 3.2%, and the Below-Poverty-Line 6.8%. The composition o f family types is: joint families 44.5%, nuclear families 40.5%, and extended families 15%. In terms o f occupation, the PAFs are predominantly in agriculture in the project area, with a few engaging in service activities in Allahabad.

6. Resettlement Action Plan

NHAI has prepared an R&R entitlement framework in accordance with the Bank's OP 4.12 (Involuntary Resettlement) and OD 4.20 (Indigenous Peoples) to cover all affected people. I t recognizes support for sharecroppers, squatters, and vulnerable encroachers. The RAP i s consistent with the R&R entitlement framework for the project. The RAP i s approved by NHAI Management after the finalization o f the entitlement framework.

During the preparation o f the RAP, NHAI has attempted, to the extent possible, to minimize the adverse impacts. The bypass alignment was selected from seven alternative alignments, and it i s the one that encompasses the minimum adverse socioeconomic impacts along with other technical advantages. NHAI has also managed reduce the width o f Right o f Way from previously proposed 120 meters to 70 to 90 meters, resulting in the avoidance o f about 6 villages and 137 structures.

As 87% o f the project affected agricultural titleholders w i l l have less than district average minimum economic holding which i s likely to become unviable after their land i s acquired, the impact i s considered severe. For th i s reason, the entitlement framework i s designed to provide replacement cost and additional support for restoring the livelihood o f all affected people to at least restore their economic status to pre-project level or improve their living standard. To mitigate these adverse impacts through the implementation o f RAP, NHAI has prepared a budget o f Rs. 120 crores.

Land Acquisition: I t was decided that the land acquisition would be done under National Highway Act 1956 which i s relatively less rigid and would help expedite the process. NHAI has initiated the land acquisition process. Notifications for the appointment o f competent authority for all districts have been issued (November 24,2001 at Allahabad, March 5,2002 at Kaushambi, and January 29,2002 at Pratapgarh).

Cultural Properties: There are a small number o f cultural and social properties (such as temples, schools and public offices) in the vicinity o f the bypass alignment. Over 60 percent o f these properties were avoided through adjustment o f the bypass alignment and design. Specifically, the following properties are avoided from displacement: all mosques and grave yards identified, 3 o f the 7 identified temples, and 1 of the 5 identified schools.

Tribal and Other Vulnerable Groups Development Plan: Only 3 tribal famil ies are identified as PAFs, and they are already part o f the mainstream communities. N o exclusive R&R measures are required.

District

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3 I 11/01/2002 - 20/0112002 State 1 I25/2/2002

SN Item

1 Compensation 2 R&R assistance 3 Implementation support & training

Total and for highway related diseases,

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Financed by (in Rs. Million) World Bank NHAI Total

780.04 780.04 697.11 13.68 710.79

32.85 32.85

729.96 793.72 1523.68