The World Bank Andhra Pradesh Disaster Recovery Project (P154847) REPORT NO.: RES39661 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ANDHRA PRADESH DISASTER RECOVERY PROJECT APPROVED ON JUNE 17, 2015 TO REPUBLIC OF INDIA URBAN, RESILIENCE AND LAND SOUTH ASIA Regional Vice President: Hartwig Schafer Country Director: Junaid Kamal Ahmad Regional Director: John A. Roome Practice Manager/Manager: Christoph Pusch Task Team Leader(s): Deepak Singh, Atishay Abbhi The World Bank Andhra Pradesh Disaster Recovery Project (P154847) ABBREVIATIONS AND ACRONYMS APCOSMIC Andhra Pradesh Critical Operations Strategic Management and Incident Command APDRP Andhra Pradesh Disaster Recovery Project APEPDCL Andhra Pradesh Eastern Power Distribution Company Limited APSDMA Andhra Pradesh State Disaster Management Authority DPR Detailed Project Report GoAP Government of Andhra Pradesh GST Goods and Services Tax MPCS Multi-Purpose Cyclone Shelters NCRMP National Cyclone Risk Mitigation Project The World Bank Andhra Pradesh Disaster Recovery Project (P154847) BASIC DATA Product Information Project ID Financing Instrument P154847 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 17-Jun-2015 30-Sep-2020 Organizations Borrower Responsible Agency Revenue and Disaster Management Department, Republic of India Government of Andhra Pradesh Project Development Objective (PDO) Original PDO The Project Development Objectives (PDO) are to restore, improve, and enhance resilience of public services, environmental facilities, and livelihoods in Targeted Communities, and to enhance the capacity of state entities to respond promptly and effectively toan eligible crisis or emergency. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-56940 17-Jun-2015 16-Jul-2015 28-Aug-2015 30-Sep-2020 228.17 70.25 157.92 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Andhra Pradesh Disaster Recovery Project (P154847) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The Restructuring Paper seeks approval to restructure the Andhra Pradesh Disaster Recovery Project by cancelling IDA US$26.79 million from the US$228.17 million IDA credit. 2. Context: The Project was prepared to support the Government of Andhra Pradesh’s (GoAP) recovery efforts after the very severe cyclone storm Hudhud made landfall on the coast of Andhra Pradesh in 2014. The Project’s Development objective is to restore, improve, and enhance resilience of public services, environmental facilities, and livelihoods in targeted Communities, and to enhance the capacity of state entities to respond promptly and effectively to an eligible crisis or emergency. 3. The project is aiming to achieve the stated objective through six components: (i) reducing the vulnerability of the city’s electrical network by laying the power distribution system underground; (ii) restoring connectivity and shelter infrastructure through investments in permanently restoring, upgrading, and increasing resilience towards future The World Bank Andhra Pradesh Disaster Recovery Project (P154847) disasters of roads (rural and major district roads) and cyclone shelters; (iii) restoring and protecting beach front in the city of Vishakhapatnam; (iv) restoring environmental services and facilities including restoration/creation of shelterbelts/windbreaks, support to farm forestry/plantations through nursery support for poor/vulnerable coastal families, regeneration of critical patches of mangroves along the coast to build disaster resilience, and restoring/supporting livelihood opportunities in the cyclone affected areas; (v) enhancing the capabilities of GoAP entities and other stakeholders in managing disaster risks, enhancing preparedness, and achieving resilient recovery; and (vi) Project implementation support. Project Status 4. The achievement towards the PDO and Implementation Progress are rated Moderately Unsatisfactory due to the slow progress of key activities. Although PDO continues to be relevant, the current progress does not lend itself towards achieving it in the given timeframe. Over 31% of the IDA Credit, or $70.18 million, has been disbursed. As assessed during the September 2018 Mid Term Review (MTR) mission of the project and the Deep Dive Review between GoAP, GPURL and the Bank in January 2019, the PDO, scope and its components as initially designed continue to remain relevant but there is a need to restructure to drop activities that cannot be implemented within the project timeframe. The GoAP has decided to cancel $48.62 million of IDA credit, of which $21.83 million was already cancelled in October and an additional $26.79 million is being cancelled through this restructuring. This restructuring does not affect the PDO. 5. Component 1 (Resilient Electrical Network): An underground cable network comprising of 33KV, 11KV, 415V, 230V to replace the existing overhead lines is being laid. Out of a target of 534 kms of 33KV and 11KV, around 150kms of underground cable network has been laid. Over 420 consumer accounts have been covered by the underground cable network so far. The progress of this component is slow and unsatisfactory primarily due to continued significant delays in physical work and payments to contractors. 6. Component 2 (Restoration of connectivity and shelter infrastructure): Around 294,300 out of the originally targeted 1.75 million people have been provided access to restored and improved rural roads. Around 416 kms out of the targeted 800 kms of rural roads have been rehabilitated. Rehabilitation is also underway for 4 out of 5 bridges. Procurement process is underway for the remaining bridge. Of the 250 kms of non-rural (major district) roads, 186kms has been rehabilitated. All roads packages are expected to complete within the project timeframe. 7. Component 3 (Restoration and protection of beachfront): Shore protection works were dropped in the October restructuring. On the activities for enhancement of urban public spaces, including parks, and upgrading the beach front, tendering process for restoration of RK Beach has been initiated; Bheemli restoration is expected to be ready to tender subject to CRZ clearances. For Bheemli, the details regarding land ownership were received and tenders floated. The Kailasagiri Hill top Park is also bidded out. Some of the activities are not likely to be completed within the project timeframe. 8. Component 4 (Restoration of environmental services and livelihoods support): As part of the livelihoods support sub-component, significant livelihoods have been generated for men and women for women from work in planting and maintaining of Shelterbelts, mangroves and nurseries. Almost 90% of the shelterbelt has been planted and 80% of the targeted mangroves for restoration have been planted. A total of 35 field nurseries and 4 high-tech nurseries have been identified for intervention, of which establishment of 25 field nurseries is underway. Re-development of Indira Gandhi Zoological Park and Kambalakonda eco-tourism park are unlikely to be completed within the project timeframe. The World Bank Andhra Pradesh Disaster Recovery Project (P154847) 9. Component 5 (Capacity building and technical support for DRM): Activities are underway to build the capacity of the APSDMA and the communities in disaster risk management. Inception reports for setting up a Geospatial Lab and the AP Critical Operations Strategic Management and Incident Command (APCOSMIC) have been submitted. The two will be set up and functioning within the project timeframe. The contracts for a multi-hazard risk assessment and Community Based Disaster Risk Management activities have been signed. Procurement of LiDAR data, search and rescue equipment, and consultancies for establishment of APSDMA data center is underway. Activities underway are expected to be completed within the project timeframe. II. DESCRIPTION OF PROPOSED CHANGES 10. A cancellation of US$26.79 million is proposed based on a formal request from Ministry of Finance, Department of Economic Affairs. The total Project cost will be revised to $201.38 million 11. Savings have been identified from activities under the below sub-components that have not yet started implementation or tendering process has not been completed. i. Sub-component 2.1 and 2.2 - Restoration of 120 kms of rural roads and improvements to 31 kms will be dropped. ii. Sub-component 3.2 – Funds allocated to the restoration and redevelopment works for Thenneti Park beach and Bheemli, Visakhapatnam will be cancelled. iii. Sub-component 4.1 - Redevelopment of Zoo and Kambalakonda Eco Park in Visakhapatnam will be dropped. iv. Sub-component 4.2: Cost savings of around $1million from the livelihoods sub-component will be surrendered. v. Component 6: Initial cost sharing with NCRMP has allowed the GoAP to save an additional $7million in administrative costs. An equivalent amount will thus be cancelled from the project. CANCELLED AND REVISED IDA ALLOCATIONS Revised cost after Oct'19 Original partial Cancelled Revised component cancellation IDA ($m) Component Component cost ($m) ($m) Nov'19 Cost ($m) 1 81.00 81.00 0.00 81.00 2.1 40.50 39.06 6.69 32.37 The World Bank Andhra Pradesh Disaster Recovery Project (P154847) 2.2 30.50 30.50 2.00 28.50 3.1 17.00 0.00 0.00 0.00 3.2 27.00 27.00 6.70 20.30 4.1 5.30 5.30 3.50 1.80 4.2 8.00 8.00 0.90 7.10 5.1 17.00 17.00 0.00 17.00 5.2 6.70 6.70 0.00 6.70 6 17.00 11.68 7.00 4.68 Total 250.00 228.17 26.79 201.38 III. SUMMARY OF CHANGES Changed Not Changed Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Loan Closing Date(s) ✔ Disbursements Arrangements ✔ The World Bank Andhra Pradesh Disaster Recovery Project (P154847) Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Resilient electrical network 120.00 No Change Resilient electrical network 120.00 Restoration of connectivity and Restoration of connectivity and 102.88 Revised 90.10 shelter infrastructure shelter infrastructure Restoration and protection of Restoration and protection of 43.82 Revised 33.97 the beach front the beach front Restoration of environmental Restoration of environmental services and facilities and 20.00 Revised services and facilities and 13.50 livelihood support livelihood support Capacity building and Technical Capacity building and Technical support for disaster risk 34.01 No Change support for disaster risk 34.01 management management Project implementation Project implementation support 17.18 Revised 6.88 support The World Bank Andhra Pradesh Disaster Recovery Project (P154847) Contingency emergency Contingency emergency 0.00 No Change 0.00 response response TOTAL 337.89 298.46 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation BORROWER' S REQUEST IDA-56940- Disburs 228,170,000.0 201,380,000.0 USD 26,790,000.00 15-Nov-2019 FOR 001 ing 0 0 COUNTRY REASONS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-56940-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: Gds,Wks,NCS,CS,Trng,IOC, oth th CER 228,170,000.00 70,246,146.89 201,380,000.00 68.00 68.00 iLap Category Sequence No: 2 Current Expenditure Category: Emergency Expenditures for CER comp 0.00 0.00 0.00 100.00 100.00 Total 228,170,000.00 70,246,146.89 201,380,000.00 .