The World Bank New Delhi Office Phone +911141479301/+911149247601 INTERNATIONAL BANK FOR RECONSTRUCTION AND DE"'ELOPMENT 70 Lodi Estate Mailing Address: P.C Box 416 INTERNATIONAL DEVELOPMENT ASSOCIATION New Delhi - 110 003 India December 5, 2014 Mr. Tarun Bajaj Joint Secretary (MI) Department of Economic Affairs Ministry of Finance Government of India PAJAM) North Block New Delhi 110 001 jCO Dear Mr. Bajaj: INDIA: PMGSY Rural ?oads Project (Cr. 4848-IN, 4849-IN & Ln. 7995-IN) Amen Iment to the Financing Agreement We refer to the Finan ing Agreement dated January 14, 2011 between India (the "Recipient") and the International Development Association (the "Association) as amended to date (the "Finan(ing Agreement") and the Loan Agreement between India and the International Bank for Reconstruction and Development (the "Bank") of the same date, in relation to the PMG!Y Rural Roads Project (the "Project"). We also refer to your letter dated May 13, 20 4 requesting amendments to the Financing Agreement for the purpose of restructuring :he disbursement linked indicators and results framework under the Project. We are pleased to ir form you that the Association has concurred with. your request and hereby proposes t) amend the Financing Agreement as follows: 1. Schedule 4 is replaccd in its entirety with the new Schedule 4 set out in the Attachment to this lett -r. Except as specificall, amended hereby, all other provisions of the Financing Agreement shall remain in full force and effect. HeadquarterL Washington DC U USA Mr. Tarun Bajaj -2- December 5. 2014 Please kindly confirm your agreement to the amendments to the Financing Agreement set out above by having an authorized representative of the Recipient sign and date the form of confirmation on the enclosed duplicate original of this letter and return it to us for our files. Upon rece pt of the copy of this letter countersigned on behalf of the Recipient, this amendment lett-r will become effective as of the date of countersignature. Yours sincerely, Onno Ruhl Country Director, India CONFIRMED AND AGREED: INDIA By: Name: (TARUN BAlAJI *tgqq flm"!I S*o Aary Title: ' zWanMa,..f FinOnce ' r f" Wf4rM/0%Vtt 41 eo. Afflks Date: I I L, oON W/Attachment Mr. Tarun Bajaj -3- December 5, 2014 cc: Mr. Saurabh Chandra Garg, Executive Director (India), World Bank Mr. L.K. Atheeq, Senic r Adviser to Executive Director (India), World Bank Ms. Bhaskar Dasgupta. Director, Department of Economic Affairs, Ministry of Finance, Government c f India Mr. S.G. Dastidar, Controller of Aid Accounts & Audit, DEA, Ministry of Finance, Government c f India Mr. Rajesh Bhushan, Joint Secretary, Ministry of Rural Development, Government of India Ms. Manju Rajpal, Diroctor, Department of Rural Development, Ministry of Rural Development, Governrient of India Mr. P.C. Aujla, Secretry, Public Works Department, Government of Punjab Mr. Narendra Chauhan, Secretary, Public Works Department, Government of HP Mr. S.K. Satpathy, Prir cipal Secretary, Rural Works Department, Government of Jharkhand Mr. J.C. Mohanty, Prircipal Secretary, Public Works Department, Government of Rajasthan Mr. Vinod Fonia, Secrotary, Department of Rural Development, Government of Uttarakhand Mr. Arun Singhal, Principal Secretary, Rural Development Department, Government of Uttar Pradesh Mr. M.M. Sun, Secretary cum Chief Engineer, PWD cum Empowered Officer, SRRDA, Meghalaya Mr. B. Rajender, Secrc tary Rural Works Department, Government of Bihar Ms. Anjana Devi, Tect nical Secretary-cum-Consultant, JSRRDA, Jharkhand Mr. Anil Kumar Singh. Chief Executive Officer, UPSRRDA, Government or Uttar Pradesh Mr. Manish Mittal, Nodal Officer, Uttarakhand SRRDA, Dehradun Mr. A.K. Gupta, Chief Engineer, RRRDA, Rajasthan Mr. T. Hansda, Chief Ingineer, Jharkhand SRRDA, Jharkhand Mr. S.P. Sharma, Chie 'Engineer, UPRRDA, Uttar Pradesh Mr. Yogesh Gupta, Chief Technical Officer & Chief Engineer, Punjab Roads & Bridges Development 3oard, Mohali, Punjab Mr. Rakesh Gupta, Ch ef Engineer, HP SRRDA, Himachal Pradesh Mr. A.K. Dinkar, Chief Engineer, Uttarakhand SRRDA, Uttarakhand Mr. Kamlesh Choudhery, Chief Engineer, Rural Development Department, Government of Bihar ATTACHMENT SCHEDULE 4 Disbursement Linked Indicators Results Unit of Baseline Target Values Protocol Indicators* Measure FY 11 FY 12 FY 13 FY14 FY 15 DLI-1: Number of I Habitation connected is Extent of habitations defined as a habitation I. Znt,. connected by a road connectivity constructed to all weather achieved. Annual: 1,300 1,800 1,700 1,400 1,431 standards, including bridges and necessary cross Cumulative: 26,300 (60%)' 27,600 (66%)2 29,400 (70%)3 36,500 (65%)4 37,900 (67%)' 39,331 (70%)6 drainage works. Habitation is considered connected when (i) physical completion certificate for the road is signed by SRRDA; and (ii) photographs of the key features of the road (especially start/end points) are entered in the OMMAS. 26,300 for 7 Participating States (excluding Bihar) and 5,400 for Bihar as at January 1, 2014. 2 For 7 Participating States (excluding Bihar). 3For 7 Participating States (excluding Bihar). For 8 Participating States (including Bihar). For 8 Participating States (including Bihar). 6 For 8 Participating States (including Bihar). Results Unit of Baseline Target Values Protocol Indicators* Measure FY 11 FY 12 FY 13 FY14 FY 15 DLI-2: 1. Improved The planning NRRDA NRRDA Any two NRRDA/ Any two NRRDA's improved Effectiveness of planning process largely issues revised issues a Participating MoRD issues additional planning systems, including public procedures focuses on program wide* revised States base revised book Participating a revised Detailed Project expenditures successfully engineering and guidance on program wide planning of States (to those Report template, OM, GIS ensured through introduced and does not Detailed Operational decisions on a specifications identified in the based planning, and revised cost-effective implemented adequately Project Report Manual (OM) web-based for rural roads Target Value for technical standards for and socially and address (DPR) through a GIS utilizing ("the red FY 13) base adoption and use by the environmentally economic, preparation formal (i) current book") based planning states. The revised DPR responsible social and through a PMGSY attribute data on (i) national/ decisions on a contains a checklist of planning ani CUvIMunItictat torinal ..ua .-. ..-, a.------ .. -- - - ----- implementation concerns. PMGSY agreed format. and (ii) agreed best practice; utilizing (i) improve overall planning, of PMGSY circular per spatial data and (ii) results current attribute especially in the areas of agreed DPR sets in the GIS from field data in engineering designs, safety format. database, trials. OMMAS; and audits, cost estimation, least including an (ii) agreed cost lifecycle analysis, and inventory of spatial data sets social and environment all road in the GIS analysis. classes and database, sensitive including an natural inventory of all habitats. road classes and sensitive natural habitats. 2. Improved Outcomes from NRRDA Participating 70% of 80% of None The program aims to capacity to procurement issues a States contracts in contracts in strengthen state-level implement vary but program wide implement any five any five procurement systems effective typically Procurement contractor Participating Participating through introduction of e- procurement competition is and Contract outreach States should States should procurement, a limited, time to Management programs, have been have been procurement and contract contract award Manual which will awarded, awarded, management manual, Boxes that are shaded in grey relate to activities that will support program wide systerins improvements as well as systeins II ie Paicpating Statcs. Sommc otrthcsc activitics relate to the revision of key guidelines such as the OM and PCMM that are also a requirement for the start of the Bank supported project. Where these activities appear in later years it is to give NRRDA sufficient time to fully consult all states and other stakeholder on the contents of these guidelines. 2 Results Unit of Baseline Target Values Protocol Indicators* Measure FY 11 FY 12 FY 13 FY14 FY 15 is long and (PCMM) include, inter within 45 days within 45 days contractor outreach and rebidding through a alia, bidder (excluding the (excluding the capacity building of frequent formal conferences, cases where cases where no implementing agencies. It PMGSY contractor no bids are bids are is expected that these circular and training, and received or all received or all initiatives will increase provides formalization bids are non- bids are non- participation in tendering, training in its of complaint responsive) responsive) increase transparency, use to all handling and from bid from bid reduce time to award Participating resolution submission, in submission, in contracts and reduce the with bidding with bidding documents and documents and in line with in line with procedures set procedures set out in PCMM. out in PCMM. 3. Improved The 3 tier Participating Participating Any three 90% of all 95% of all works Implementation of the Quality of quality control States publicly States appoint Participating works rated as rated as activities planned for the Built system is not disclose State dedicated and States' satisfactory by satisfactory by first three years are Infrastructure fully Quality fully functional National NQM expected to contribute to implemented in Monitor functional citizen Quality improvement of overall all states with summary PMGSY Chief monitoring Monitor quality of works. The the percentage reports with Technical programs in (NQM) program will implement of completed photos on Officer/ State place on a stronger quality control works rated as PMGSY web Quality pilot basis guidelines and better satisfactory site Coordinator enforce the current 3 tier ranging from and fully quality control system. 63% to 99% implement 1st and 2nd tier quality control system 3 Results Unit of Baseline Target Values Protocol Indicators* Measure FY 11 FY12 FY13 FYI4 FY15 4. Effective Comprehensive Review of NRRDA Participating Participating Participating The program is improving use of OMMAS in OMMAS is issues formats States generate States generate States generate the reliability and OMMAS as place but data completed by of OMMAS OMMAS OMMAS timeliness of information in MIS for has gaps and is May 2011, management management management management OMMAS to support decision outdated. report is issued reports at reports in the reports in the reports in the effective decision making, making Outputs are not and follow-up national, state agreed output agreed output agreed output public information and readily useable actions on and district formats based formats based formats based on monitoring of program particularly at recommendati level through a on at most one on at most one at most one outcomes. Each state district level. ons formal month old month old month old data. would produce periodic by each State/district main performance areas, Participating level format including safeguard State. are formally monitoring for compliance adopted by the and disaggregated data on Participating vulnerability and gender. States. DLI-3: Percentage of Level of Any five Any five Any five Participating On average The project will help Effective improved maintained Participating Participating Participating States have across all establish management execution of PMGSY network varies States States have a States have spent at least Participating systems to ensure that FC maintenance network under from 0% to implement the current road provided 80% of the States, 55% of funds are well spent and works active routine 100% tracking condition adequate funds funds the PMGSY accounted for and that the and periodic mechanism inventory in (more than allocated in road network PMGSY circular on maintenance established by place and have 80%) for maintenance funding is contracts NRRDA to issued a road routine their budgets has a PCI implemented. The project monitor maintenance maintenance to SRRDAs level greater will support a gradual receipt and policy, in their as than 2. increase in the level of expenditure of including budgets to maintenance active routine and periodic Finance detailed SRRDAs in funds. maintenance of the rural Commission guidelines for line with roads network. (FC) maintenance circular issued maintenance management. by MORD. grants Remaining 4 Results Unit of Baseline Target Values Protocol Indicators* Measure FY 11 FY12 FY 13 FY14 FY15 Participating States have provided adequate funds (more than 50%) for routine maintenance in their budgets (in last completed FY) to SRRDAs in line with circular issued by MoRD. 5