Document of The World Bank Report No. 16517-IN PROJECT APPRAISAL DOCUMENT INDIA ANDHRA PRADESH STATE HIGHWAY PROJECT May 12, 1997 Energy and Infrastructure Operations Division Country Department II South Asia Region CURRENCY EQUIVALENTS (As of January 1997) Currency Unit = Rupee Rupee 35.87 US$ 1.00 Rupee 1.0 US$ 0.02787 Crore 10,000,000 Rupees 1 crore = US$ 2.787 million METRIC EQUIVALENTS 1 Meter (m) 3.28 Feet (ft) I Kilometer (Kin) 0.62 Miles (mi) GOVERNMENT FISCAL YEAR April 1 - March 31 Vice President: Mieko Nishimizu Country Director: Robert S. Drysdale Division Chief: Jean-Francois Bauer Task Manager: Chris Hoban ABBREVIATIONS AND ACRONYM ADB Asian Development Bank AP Andhra Pradesh CAS Country Assistance Strategy EA Environmental Assessment EMP Environmental Management Plan GOAP Government of Andhra Pradesh HDM Highway Design and Maintenance ICB International Competitive Bidding ITC Implementation and Tender Commitee MDR Major District Roads MOEF Ministry of Environment and Forests NABARD National Agricultural Bank for Rural Development NCB National Competitive Bidding NH National Highways NSS Nagarjuna Sagar-Srisailam PCC Project Coordinating Consultant PIU Project Implementation Unit PWDs Public Works Department RAP Resettlement Action Plan RBD Roads and Buildings Department ROW Right-of-Way R&R Resettlement and Rehabilitation SH State Highways SVNPS Sri Venkateswara National Park Sanctuary i INDIA ANDHRA PRADESH STATE HIGHWAY PROJECT CONTENTS Page No. BLOCK 1: Project Description .................................................2 1. Project Development Objectives .................................................2 2. Project Components .................................................2 3. Benefits and Target Population .................................................2 4. Institutional and Implementation Arrangements ................................................. 2 BLOCK 2: Project Rationale .................................................3 5. Country Assistance Strategy Objectives Supported by the Project ............................3 6. Main Sector Issues and Government Strategy ................................................. 4 7. Sector Issues Addressed by the Project and Strategic Choices ...................................6 8. Project Alternatives Considered and Reasons for Rejection ......................................7 9. Major Related Projects Financed by the Bank ................................................. 8 10. Lessons Learned and Reflected in the Project Design ................................................8 11. Indications of Borrower Commitment and Ownership ...............................................9 12. Value Added of Bank Support .................................................9 BLOCK 3: Summary of Project Assessments ................................................ 10 (Detailed assessments are in Annex 8 and in Project Files) 13. Economic Assessment ................................................ 10 14. Financial Assessment ................................................ 10 15. Technical Assessment ................................................ 11 16. Institutional Assessment ................................................ I 1 17. Social Assessment ................................................ 12 18. Environmental Assessment ................................................ 14 19. Participatory Approach ................................................ 15 20. Sustainability ................................................ 16 21. Critical Risks ................................................ 16 22. Possible Controversial Aspects ................................................ 18 BLOCK 4: Main Loan Conditions ................................................ 18 23. Effectiveness Conditions ................................................ 18 24. Other ................................................ 18 BLOCK 5: Compliance with Bank Policies ................................................ 19 ii ANNEXES: I Project Design Summary ................................. 20 2 Detailed Project Description ................................. 23 3 Estimated Project Costs ................................. 25 4 Cost Benefit Analysis Summary ................................. 26 5 Financial Summary ................................. 28 6 Procurement and Disbursement Arrangements ................................. 29 7 Project Processing Budget and Schedule ................................. 35 8 Documents in the Project File ................................. 36 9 Statement of Loans and Credits ................................. 37 10 India at a Glance ................................. 43 Project Appraisal Document Page 1 Country: India Project Title: Andhra Pradesh State Highway Project INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT South Asia Regional Office South Asia Country Department 2 (India, Nepal, Bhutan) Project Appraisal Document India Andhra Pradesh State Highway Project Date: May 12, 1997 01 Final Task Manager: Hoban Country Manager: Drysdale Project ID: IN PA 9995 Sector: Transportation Lending Instrument: SIL PTI: Yes E0 No Project Financing Data 0 Loan Credit Guarantee Other [Specify] Amount (US$ million): 350 Proposed Tt.ms: Multicurrency 0l Single currency Grace period (vears) 5 Standard Fixed 0 LIBOR-based Variable Years to maturity: 20 Commitment fee: 0.75 T i ................. ........................................ . .............................................................................. .................. ............ .; Financing plan (US$ million): Source Local Foreign Total Government 81.6 53.9 135.5 IBRD 209.7 140.3 350 Borrower: Government of India Beneficiary: Government of Andhra Pradesh Responsible agency: Andhra Pradesh State Roads and Buildings Department Estimated disbursements (Bank FY/US$M): 1998 1999 2000 2001 2002 2003 Annual 20 45 80 85 85 35 Cumulative 20 65 145 230 315 350 Expected effectiveness date: 9/30/97 Closing date: 1/31/2003 Project Appraisal Document Page 2 Country: India Project Title: Andhra Pradesh State Highway Project Block 1: Project Description 1. Project development objectives (see Annex 1 for key performance indicators): (a) Reduce transport costs and transport constraints on economic activity; (b) Improve the state's institutional capabilities to manage road programs and assets .........................................................I......................................................................I..............................................................I.......................................................... 2. Pprject components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown) Component Category Cost Incl. % of Contingencies Total (US$ million) (1) Widening & Strengthening of priority roads (a) Civil works 1 373.9 77 (b) Design & supervision 3 25.3 5 (c) Land acquisition, resettlement & rehabilitation 1.4 (2) Maintenance of State roads (a) Works 1 72.5 15 (b) Technical assistance for maintenance management 3 1.2 (3) Reform and strengthening of the State road agency Technical Assistance, training and equipment 2,3 8.8 2 (4) Repayment of Project Preparation Facility 4 2.4 1 Total 485.5 100 ......................................................................I........I....................................... .......... .......... ........ .................. ........... .......... 3. Benefits and target population: (a) Lower freight and passenger transport costs, with resulting benefits in fares, the price of goods, marketing of products, and the reduction of transport bottlenecks affecting economic development. This will have direct benefits for the traveling public, agricultural and industrial producers, consumers, and local communities having improved access to health and education services. (b) Improved physical environment along project roads, and improved attention to environmental and social impacts of road works. Roadside communities and non-motorized road users are expected to benefit from improved shoulders, planting and drainage. (c) More effective management and sustainable maintenance of the state's road assets, including better utilization of existing traffic capacity, improved value-for-money of state spending on roads, and better connectivity of rural roads to state and national networks. ....................................................................................I...........I....................................I...........I.......................................................................................................... 4. Insitutional and implementation arranyements Implementation period: 5 years Executing agencvy The state Roads and Buildings Department (RBD) will have overall responsibility for project implementation. During the project, actions will be taken to reconfigure and equip the RBD for strengthened management of the road network. This will ensure more widespread benefits from the project's introduction of new approaches and technology. Project Appraisal Document Page 3 Country: India Project Title: Andhra Pradesh State Highway Project Project coordination: The RBD will establish a Project Implementation Unit (PIU) reporting to the Engineer-in- Chief. A Project Coordinating Consultant (PCC) engaged for project preparation will remain in place during implementation to assist the RBD in further design, procurement, and project management activities. Project oversight and policy guidance: The Government of Andhra Pradesh (GOAP) has established an empowered Implementation and Tender Committee (ITC) to oversee project implementation, consisting of Principal Secretary, Transport, Roads and Buildings, Principal Secretary, Works and Projects, Secretary, Finance, and Engineer-in-Chief, Roads and Buildings. The functions of this committee are to (a) approve contracts based on the recommendations of the PIU, (b) ensure inter-departmental coordination within GOAP, and (c) facilitate high-level government decisions when required. A similar committee arrangement was used for the Bank-financed AP Cyclone Relief Project, with considerable success. Accounting. financial reporting and auditing arrangements: To provide efficient financial management information, in accordance with the Bank's Operational Policy 10.02, RBD will establish and maintain a computerized Project Financial Management System for the project. This will show actual versus budgeted expenditures and method of procurement, and generate the Schedule of Withdrawal of Proceeds and Statement of Expenditure forms required for Bank processing of withdrawals from the loan. The project accounts will be audited by the Accountant General, Andhra Pradesh, who is recognized by the Bank as an independent auditor. Monitoring and evaluation arrangements: The PIU, assisted by the PCC, will prepare quarterly reports in accordance with the format described in the Project Implementation Plan covering the physical and financial progress of the project. Specific monitoring of environmental and resettlement aspects of the project will be included in the implementation plan and quarterly reports. These reports will be forwarded to the Bank and copied to the ITC. GOAP will also, within 6 months of the closing of the project, prepare an Implementation Completion Report. A Mid-Term Review will be held after 24 months to review procurement and implementation progress against agreed schedules and assess implementation capacity. Block 2: Project Rationale 5. Country Assistance Strategy (CAS) objectives supported by the project Improved infrastructure is critical to the growth of India's economy. This is recognized in the Bank's Country Assistance Strategy Report discussed by the Executive Directors on June 20, 1995 and the Progress Report discussed on September 5, 1996, which notes the importance of overcoming transport and power bottlenecks. The CAS stresses the need to link investments in infrastructure with reforms in public sector policy and management at both central and state levels. In the road sector, emphasis is placed on increased investments in high-return projects, strengthened public sector planning and project management, and increased use of private sector engineering capacity and modem road design and construction technologies. It also advocates a stronger link between road user charges and road expenditures. All of these features have been incorporated in the project, with up-front commitment of GOAP to policy and institutional changes, and substantial use of private consultants and contractors. The CAS also notes the growing potential for private investments in infrastructure in India. This has so far had little impact on the road sector, and is not expected to play a major role in the foreseeable future. Nevertheless, Project Appraisal Document Page 4 Country: India Project Title: Andhra Pradesh State Highway Project investmnent opportunities are being developed and expanded, and the project includes actions to strengthen the policy environment and prepare specific candidate projects for possible private investments in state roads. Reflecting similar themes to the CAS, a Bank report on "The Indian Transport Sector - Long Terrn Issues" (Report No. 13192-IN, March 1995) highlighted the need for "difficult reforms' in the introduction of (i) private sector engineering services; (ii) international competition for large civil works packages; and (iii) more sustainable road funding linked to road user charges. These issues are all addressed under the project. s and over nent strategy The demand for intercity freight transport in India is expected to double every twelve years while the demand for passenger transport is expected to double every eight or nine years. The share of total demand going to roads has been growing steadily since 1950, to the point where roads now carry 60 percent of freight and 85 percent of passenger traffic, with the railroads carrying the balance. During the same period the core system of paved National and State highways expanded over eight-fold, from about 19,800 km to about 156,000 km. The rapid expansion of the network was only made possible by spreading available resources as widely as possible through the construction of primarily single-lane and intermediate-lane (5.5 m) State and District roads with thin, structurally-deficient pavements. The arterial road system has become extremely congested and of poor riding quality, leading to high cost and low quality services for users. The State of Andhra Pradesh (AP) with a population of approximately 70 million is the fifth largest State of the Union. The highway network of the State consists of a total of 164,000 km of highways of which 2,950 km are classified as National Highways (NH), 8,775 km as State Highways (SH), and 34,695 as Major District Roads (MDR). Even though the SH/MDR network carries over 60% of the State's traffic, 53% of SH and nearly 90% of MDRs are still single lane. Vehicle registrations have increased by approximately 16% per annum during the last five years and traffic is projected to grow at least at 7-8% per year for the foreseeable future. The poor quality of roads in India and in Andhra Pradesh is due primarily to (a) a declining share of budget allocations and (b) limited implementation capacity. These are discussed in the following paragraphs. Budget Allocations The following table shows the average annual spending on roads in AP for 1992-96. Allocations for capital works for roads are generally less than 4% of overall State Plan expenditure, and have been declining. Maintenance allocations have been low relative to norms established by the Ministry of Surface Transport and Planning Commission, but have increased significantly in recent years. Average Annual Spending 1992-96 Roads & Buildings Panchayat Raj Department Engineering Department Totals State roads Rural & village roads Rs crore $ million Rs crore $ million Rs crore $ million Capital (Plan) 96 27 173 49 269 76 (of which externally aided) (65) (19) (73) (21) (138) (39) Recurrent (Non-Plan) 140 40 70 20 210 60 Total capital & recurrent 236 67 243 69 479 136 Project Appraisal Document Page 5 Country: India Project Title: Andhra Pradesh State Highway Project The Roads and Buildings Department is responsible for state highways and major district roads, and some special programs. Capital expenditures have been dominated by externally-aided assistance under the Bank- financed AP Cyclone Emergency Reconstruction Project, which closed in 1995, and the Asian Development Bank (ADB) First Highway Project, which will close in mid-1997. Peak RBD capital expenditure was 158 crore in 1993/94, of which 124 was externally aided. GOAP allocations to RBD for road maintenance have been steadily increasing from Rs 75 crore in 1990/91 to 272 crore in 1996/97 and a proposed 378 crore in 1997/98. These represent 58%, 66% and 88% respectively of estimated network maintenance needs based on national norms. The tables do not include spending on National Highway capital and maintenance works, which are fully financed by GOI but implemented by the RBD. The Panchayat Raj Engineering Department is responsible for village and district road works, which are partly implemented by local governments. Of the allocations shown in the following table, approximately Rs 100 crore/year were provided for road works through the Employment Assurance Scheme, of which 80 percent was financed by GOI. The externally aided component was provided through the Bank-financed AP Cyclone Emergency Reconstruction Project. The next table shows expected future spending for roads under the responsibility of RBD. In addition to continuing GOAP and GOI funding, future road investment plans include the Bank-financed road works under the proposed Third AP Irrigation Project and proposed AP Cyclone Project, and a loan from the National Agricultural Bank for Rural Development (NABARD). Projected Future Annual Spending for RBD, 1998-2002 Fiscal years ending March 1998 1999 2000 2001 2002 Average annual Rs crore Rs crore Rs crore Rs crore Rs crore Rs crore $million GOAP Plan 12 12 12 12 12 12 4 GOAP Recurrent (Non-Plan) 350 350 350 350 350 350 100 Externally aided projects: (including GOAP counterpart funds) Third AP Irrigation Project 2 7 6 5 2 AP Hazard Mitigation Project 15 40 60 70 15 40 13 AP State Highway Project 95 218 390 412 412 305 85 Rural Development Bank (NABARD) 38 35 30 30 30 33 9 Totals 512 662 848 874 819 743 207 (Of which AP State Highways) (19%) (33%) (46%) (47%) (50%) (41%) (41%) To improve long-term funding for road investment and maintenance, GOAP is planning to establish a dedicated road fund which would earmark a portion of user charge revenues generated by the road sector to fund part or all of its expenditures for the network. Road users are currently generating substantially more annual revenues (approximately US$ 310 million) than are being spent on capital and maintenance (approximately US$ 100 million) for the road network. Project Appraisal Document Page 6 Country: India Project Title: Andhra Pradesh State Highway Project Implementation Capacity The previously-cited Bank report on "The Indian Transport Sector - Long Term Issues" found that implementation capacity of state Public Works Departments (PWDs, sometimes also known as Roads and Building Departments) has been limited by their almost monopolistic public provision of engineering, construction supervision and maintenance services. With little exposure to effective international competition, local consultants and contractors have had little incentive or opportunity to develop the technical and managerial skills required to become an efficient alternative to PWDs. While considerable transport sector reform has been accomplished in private trucking operations in India, little progress has been made in reforms involving the provision and maintenance of physical infrastructure. Andhra Pradesh road management capacities, while relatively good compared with other Indian states, are still to be improved in their organization and resources for effective performance. Technical, administrative and financial responsibilities for the sector are presently dispersed across the Transport, Roads & Buildings portfolio and other GOAP agencies, resulting in limited accountability for results and poor focus on sector needs and priorities. The basic operational and business management practices of the RBD are not strong, and the agency's processes, systems and technology need to be updated. The state's policies for the sector, while recognizing the need for increased provision of major road infrastructure, have not resulted in adequate financing, particularly in respect of road maintenance. GOAP has been progressively making increased use of private contractors and consultants, and has now fully endorsed the need for major change, in particular towards improved road maintenance financing and the strengthening of the RBD's role as manager of the State's road infrastructure responsibilities rather than just provider of road infrastructure services. With the assistance of international consultants, GOAP has completed a "Review of the Institutional Priorities for Management and Financing of AP Road Transport Infrastructure" with the participation of major road sector stakeholders and a wide cross section of RBD staff. The main thrust of the proposed reforms is to manage roads as a business and provide them largely on a fee for service basis. Its recommendations include actions to: (i) affirm and strengthen the RBD as the principal state agency for road infrastructure management; (ii) target key areas of the RBD's basic business practices for structural and policy improvements, training, process enhancements and strengthening of support resources; (iii) raise sector financing capacity to sustainable levels through dedication of selected road user charges to financing of roads; (iv) introduce rationally-based and economically sound methods for prioritization of maintenance and investment needs; and (iv) facilitate more effective stakeholder participation in road planning and expenditure decision-making. ................................................................................................. .................................................................................................................... .. 7. Sector issues to be addressed by the project and strategic choices A three-year Institutional Action Plan has been prepared by GOAP for progressive implementation during the project. Short term actions are being taken to restructure the agency and establish a Corporate Management Group. Consulting services will be invited from a road agency in a more developed country to provide an Institutional Reform Specialist, training programs and short-term experts in key areas of business efficiency, planning and investment development, financial, procurement and contract management, road maintenance policy, road safety and network asset management. The plan seeks to shift the focus of the RBD from provision of road assets towards a management and policy role, and includes: a) establishment of a Road Trust Fund for improved road sector financing; Project Appraisal Document Page 7 Country: India Project Title: Andhra Pradesh State Highway Project b) development of legislation (Road Act) to endow the RBD with comprehensive responsibility and authority for the management of major state road infrastructure; and c) development of improved policy, processes and opportunities for private investment in state roads. Details of the action plan objectives, expected outcomes, terms of reference, resources and implementation schedule are incorporated in the Borrower's Project Implementation Plan. Further management and institutional issues which need to be addressed by GOAP include relative priorities for spending on different road types (e.g. highways and rural roads), and the productivity of the large labor force employed by RBD for road maintenance. The project does not directly address these issues, but will assist RBD with strengthened planning and management processes which will indirectly help in broader decision-making for the sector. ............ ...................................................................................................... .......................................................................................................................................... 8. Project alternatives considered and reasons for rejection The widening and strengthening component of the project focuses on the busiest state highways and major district roads, as these are experiencing substantial bottlenecks and the state's rural roads are relatively well- funded. National highway priorities are being addressed separately in the Bank's dialogue with the central Ministry of Surface Transport and National Highways Authority of India. Road projects at the state level provide an opportunity for the Bank to work with state governments which are ready to address institutional issues, and are closer to project implementation and road users. Selection of specific road sections for the project began with a Strategic Options Study undertaken by GOAP in 1994 to provide an overall assessment of the existing traffic bottlenecks, expected traffic growth and investment needs for the state's busiest roads. This provided a basis for agreement between GOAP and the Bank on an initial identification of high-priority roads for further study, based on traffic congestion, expected economic returns, network connectivity, links to expected economic development, and project packaging. GOAP then undertook feasibility studies of the candidate roads, and integrated the results in an overall prioritization process under the management of the PCC consultants. In addition to earlier selection criteria, the feasibility reviews took further account of potential environmental and resettlement impacts, and sought to avoid or minimize these in project selection. The GOAP review of institutional needs in the sector identified a possible longer term alternative of developing a new independent road sector agency for introducing improved sector management. GOAP decided that greatest medium term progress could be achieved by strengthening of the RBD for the capacity-building objectives of this project, aiming the RBD progressively at full 'sector management agency' status and capability. This will minimize the risk of delays to the overall implementation of this project and should allow earlier achievement of benefits from institutional interventions under the project, without prejudice to future structural and organizational options. The potential for private financing of state roads is being explored by GOAP with assistance under this project, but its potential is considered to be small relative to investment needs. Variations to the scale and timing of the project were considered, and the final size was determined to match GOAP's implementation capacity and commitment to reforms. If the project is not implemented, the AP economy will continue to be hampered by inadequate road infrastructure, and potential improvements in sector efficiency will not be achieved. Project Appraisal Document Page 8 Country: India Project Title: Andhra Pradesh State Highway Project 9. Major related projects financed by the Bank and/or other development agencies The Bank has accumulated substantial experience in the highway sector in other states of India but not in Andhra Pradesh. There, the RBD has earned a reputation for reasonably good performance, including via its implementation of the road and bridge component of the Bank-assisted Cyclone Emergency Reconstruction Project. The Bank is in a good position to capitalize on this experience with the RBD and to provide a comprehensive approach to improving the preparation, implementation and maintenance capacity of the State's road agencies.. Relevant projects include: Completed First National Highway Project (Ln. 2534-IN) Andhra Pradesh Cyclone Emergency Reconstruction Project (Ln. 3260-IN, Cr. 2179-IN) Ongoing Second National Highway Project (Ln. 3470-IN, Cr. 2365-IN) States' Road Project (Ln. 2994-IN, Cr. 1959-IN) State Roads Infrastructure Development Technical Assistance Project (Ln. 4114-IN) ADB First Highway Project and Second Highway Project Planned Proposed Haryana, Gujarat, Rajasthan and possible other State Roads Projects (FY 98-2000) Proposed Third National Highway Project (FY 2000) Proposed OECF First National Highway Project (may include national highways in AP) 10.... Lessons............ lea......... ed..... and...... re........ ected......... in..... the....... project............ design:....... After a break in Bank lending in the road sector in India between the late 1960's and the early 1980's, there have been three Bank road projects at national and state levels. According to the Project Completion Report (No. 13644, 1994), the First National Highway Project, originally in the amount of US$ 200 million, closed in December 1994 with only US$ 103 million disbursed. The States' Road Project, which commenced in 1988, has had one extension of closing date to June 1997. The Second National Highway Project is ongoing since 1993, with substantial implementation delays. In each case, major constraints on progress in these projects included poor project preparation, weak implementation plans and capacities, poor inter-agency coordination, poor assimilation of Bank procurement requirements, poor contract management skills and limited focus on the financial and economic consequences of poor project implementation. The Andhra Pradesh Irrigation II Project also experienced similar problems during preparation and implementation. From these experiences, the lessons for future operations in this sector are: a) proposed investments must be prepared more comprehensively prior to project appraisal, particularly in respect of the engineering, social, environmental and institutional aspects; b) any required strengthening of basic institutional capacities for effective project management, procurement and contract administration should be fully underway before the major phases of project implementation; c) all key pre-implementation and procurement actions for contract initiation on the initial batch of proposed civil works should be resolved by project effectiveness; Project Appraisal Document Page 9 Country: India Project Title: Andhra Pradesh State Highway Project d) international 'best practice' engineering services and higher-capacity construction technology ane practices should be more widely adopted for road works in high-traffic-density corridors; e) project implementation arrangements must make earlier and explicit provision for institutional strengthening, particularly in project and contract management; and f) the public sector roads-financing capac;ty for maintenance and capital works should be substantially increased to achieve road network asset sustainability. Overall, action on the substantial needs in India for investment in road infrastructure must be matched with action on substantive policy-based sector reforms, for any serious prospects of sustainability in those investments and to establish the necessary wider institutional conditions for effective road infrastructure provision, financing and maintenance in future. Preparations for this project have included detailed attention to feasibility, design, procurement planning, and environmental and resettlement assessments, to ensure readiness for timely implementation. Draft bid documents and contractor prequalification for the first 30 percent of widening and strengthening works have been reviewed by the Bank, and are being finalized to incorporate requested changes. Bids for Phase 1 civil works and supervision consultants will be invited in June, 1997. Social and environmental action plans are discussed further in sections 17 and 18 respectively. ........................................................................................................................................................................................................................... .................................. 11. Indications of borrower commitment and ownership The initial Strategic Options Study and feasibility studies for the project were undertaken by GOAP using local consultants at its own expense, with a combined cost in excess of US$ 600,000. GOAP subsequently utilized a Project Preparation Facility of US$ 2.4 million to finance pre-investment studies and final engineering of the first-year works package of 41 0 km of roads. This is now almost fully disbursed. Design of the remaining project roads has commenced under financing from the State Road Infrastructure Development Technical Assistance Project (Ln. 4114-IN). GOAP has also embraced a project preparation and implementation framework designed to enhance the state's absorptive capacity through outsourcing most of the engineering, design and supervision functions of the RBD for the project, and the implementation of project civil works by contractors of proven international experience. Finally, the state has completed a "Review of the Institutional Priorities for Management and Financing of AP Road Transport Infrastructure" which has produced detailed recommendations and action plans for implementation during the project. ..........................I.............................................I..........I...................................I.........................................I......................................................................................... . 2. .Value adde Bank support In addition to providing infrastructure financing, the Bank provides experience of similar projects in India and internationally, and promotes necessary reforms in project implementation and overall management of road investment and maintenance. The Bank is working with GOAP and the RBD to utilize international expertise and best practices for road construction, engineering services and sound public sector business management. Prolect Appraisal Document Page 10 Country: India Project Title: A,dhra Pradesh State Highway Project Block 3: Summary Project Assessments (Detailed assessments are in the project file; see Annex 8) 13. Economic Assessment 0I Cost-Benefit Analysis (see Annex 4): Widening component Maintenanc. Component Overall NPV = US$ 463 million NPV = US$ 321 million NPV = US$ 774 million ERR=27% ERR=58% ERR=32% Widening and Strengthening Component: Benefits were determined from savings in road user costs due to improved pavement condition, reduced traffic congestion, and increased separation of fast and slow moving traffic, and from savings in future maintenance costs arising from timely rehabilitation. The economic analysis utilized the Bank's Highway Design and Maintenance (HDM) model for 28 project road sections selected on the basis of homogeneous traffic and road condition, and further subdivided by road width. Traffic volumes ranged from 700 to 3600 vehicles per day, including 65 to 90 percent trucks and buses. The analysis showed Economic Rates of Return (ERRs) of 18 to 45 percent with an overall rate of return of 27 % and Net Present Value of US$ 463 million, assuming a 12 percent discount rate. Maintenance Component: During project preparation, a core network of 10,000 km of State Highways and selected heavily-trafficked Major District Roads was identified for priority attention under the maintenance management component. In order to analyze periodic maintenance requirements, this network was stratified by functional class, traffic flow and road condition, and indicative treatments were proposed for each case. The economic analysis then assessed the benefits arising from timely preventative maintenance interventions, taking account of savings in vehicle operating costs, and in future maintenance and rehabilitation costs of restoring lost assets when not optimally maintained. An optimum maintenance program was then determined by maximizing the benefits within the budget constraints. The results for this analysis give an average rate of return of 58 % and a Net Present Value of US$ 321 million, at a 12 percent discount rate. Additional (but unquantified) benefits of the maintenance component are expected to arise from overall increases in efficiency of the RBD's spending on road maintenance due to better priority-setting, works implementation, quality control, and budget accountability. Other Components: The benefits of supervision consultancies will be achieved through improved quality and timely completion of works, and are included in the works evaluations above. Other institutional development components are necessary to ensure smooth implementation of project works, and sustainable future maintenance. In addition, institutional strengthening will lead to improved value for money in road spending and reduced transport costs for road users, through more robust budget planning and prioritization, management of work processes, and monitoring of outcomes. The overall project Economic Rate of Return is estimated at 32 % and the Net Present Value at US$ 774 million. ........ ..................................... .......... I............... I............. .................................................... ............................................. .......I.................. . .............I...I...I........... 14. Financial Assessment Fiscal impact: The project will generate an overall counterpart fumding requirement for the State of approximately US$ 130 million over an estimated five year implementation period. Most of the expenditure will fall during the life of the 9th State Plan (1997-2002) which is currently under preparation. The overall impact of the project on state finances should be limited since the $27 million annual counterpart funding requirements represents only about 23 percent of the US$ 120 million the GOAP currently spends on capital and recurrent works for the whole road sector. The maintenance component has a counterpart funding requirement of approximately US$ 5 million per annum, which is small relative to the proposed 1997/98 RBD road maintenance allocation of $108 million. However, the $22 million annual counterpart funding required for widening and Project Appraisal Document Page 11 Country: India Project Title: Andhra Pradesh State Highway Project strengthening works is considerably more than the $8 million average plan budget of RBD over the past five years. Additional GOAP capital budget allocations will therefore be required to cover project needs and any other capital spending requirements, including the proposed externally aided projects identified in section 6. It was noted that GOAP has a sound track record of timely provision of counterpart funds for externally aided projects in the road sector. The GOAP has for the past several years been running a fairly large fiscal deficit of approximately 3% to 4% of Gross State Domestic Product, and the fiscal situation of the state has further deteriorated during the last two years due to prohibition (which has sharply decreased excise revenue) and an increase in the rice price subsidy. Prohibition has recently been relaxed, and overall state finances are being addressed separately through state policy reforms and preparation of the Proposed AP Economic Restructuring Project based on the recently completed Bank report on "Andhra Pradesh: Agenda For Economic Affairs". The project size was determined in part by the state's fiscal capacity, and the Bank's assessment is that the project is affordable in the context of the overall state budget. ...T ~ ~ x .................................................................................I...................................................................................................................................................... 15. Techncal Assessment The road widening and strengthening sub-projects do not require complex design or construction methods, but will introduce substantially higher standards of project design, implementation and quality control. In the past, quality problems have been encountered in road projects in India with regard to surveys, pavement design, detailed engineering, contractor capability, workmanship, and strict adherence to technical specifications. A major emphasis of the project is therefore the introduction of international "best practice" to the Andhra Pradesh road sector. The quality of engineering preparation has been addressed by appointing an international standard consulting engineering firm. Bid packages will be sized, and pre-qualification criteria prescribed, so as to be of interest to well-qualified contractors, and construction supervision will be the responsibility of internationally- experienced consultants. Maintenance works presently carried out need improvement to introduce new techniques. The project builds upon RBD's current practice of progressively contracting out maintenance works to the private sector, and will introduce rational maintenance planning, strengthened work methods and quality control. To ensure long-term sustainability of improvements in the technical quality of road works, the institutional reform agenda includes the introduction of sound business practices including quality management, technical audits and moder financial and cost accounting systems. 16. Institutional Assessment The Roads and Buildings Department (RBD) is responsible for the construction and maintenance of National Highways (on behalf of GOI), State Highways and Major District Roads. The RBD employs approximately 7,500 "regular" staff (including 166 senior officers), and a further 10,000 "work charged" employees. Two thirds of staff work on roads. Regular staff salaries are paid from the Department's annual approved budget. Work charged salaries are paid through a lump sum provision and charged directly to the works undertaken. The RBD has six wings, each headed by a chief engineer or engineer-in-chief reporting to the Principal Secretary. These are: (a) Buildings; (b) Roads; (c) Administration and Externally-aided projects; (d) Design and planning; (e) National highways; and (f) Asian Development Bank & Command Area Development Roads (under the Bank- financed AP Irrigation Projects). Operations are geographically divided into twelve Circles, and further subdivided into 52 divisions. The six wings report to the Principal Secretary, Transport, Roads and Buildings. Project Appraisal Document Page 12 Country: India Project Title: Andhra Pradesh State Highway Project Proposed measures to strengthen the institutional capacity of RBD are discussed in Sections 6 and 7, and described in more detail in the Project Implementation Plan. The project does not address the capabilities of other institutions involved in the road sector in AP, which include: * The Department of Transport, responsible for vehicle registration, driver licensing, road safety and regulation of transport services. The department is headed by a Transport Commissioner, also reporting to the Principal Secretary, Transport, Roads and Buildings. * The Panchayats and Zilla Parishads, responsible for design, construction and maintenance of rural and village roads respectively, under the direction of the Panchayat Raj Engineering Department. 1. Social Assessment : Major Social Issues: The project is designed to improve road transport efficiency and road safety on major portions of the AP road network, with direct benefits for transport operators, service providers and general users as well as the overall state economy. These will also translate into wider social and environmental benefits over the life of the project. Project preparations have taken explicit account of possible adverse human and environmental impacts, with a view to mitigation and/or minimization as far as possible. Participation and Consultation: Preparation of the project has included consultation with stakeholders at different levels, particularly with people potentially affected by the project. At the local level, group discussions, participatory mapping of resources and infrastructure, and other methods have been used. Consultations have been held with local Non-Government Organizations (NGOs), and it is expected that NGOs will play an important role in the implementation of the Resettlement Action Plan (see below). Of particular relevance to long term institutional sustainability is the plan to link up with existing programs and financial institutions in the public and private sectors to coordinate the work in a complementary fashion, rather than having the project attempt to establish new institutional mechanisms for which it would have little capacity or comparative advantage. Resettlement: Through comprehensive screening and local consultation, the project preparations have minimized cases where land acquisition may be required, or where there may be other losses of assets or resources. Land acquisition is not a major issue in this project, as the works will stay largely within the existing road right-of-way (ROW). However, where temporary or permanent relocation of people is required, or where the project is likely to cause other types of losses, appropriate resettlement and rehabilitation (R&R) action will be undertaken as an integral part of project preparation and implementation, in accordance with the Bank's Operational Directive 4.30 on Involuntary Resettlement, and the Government of India's guidelines for environmental assessment of road projects. In accordance with terms of reference cleared by the Bank, a detailed assessment has been completed for the first 416 km of project roads. This has been done under the coordination of the PCC, working with a local organization with previous experience in the application of Bank R&R requirements. This includes a joint RBD/Department of Revenue verification of the legal boundaries of the ROW, and a census of people and assets along the road corridor. This acts as a baseline with verified resources (structures, land, etc.), and provides a cut- off point for eligibility for compensation or other assistance. It includes privately held assets as well as what is currently occupied by squatters and encroachers within the ROW. Project Appraisal Document Page 13 Country: India Project Title: Andhra Pradesh State Highway Project Following this, a more detailed Socio-Economic Baseline Survey has been undertaken for the roads to be improved during Phase I. Using the same approach, verification and census have been undertaken for an additional 806 km to be improved under Phases II and III of the project. Finally, an additional stretch of 125 km is under consideration for inclusion in the project, subject to satisfactory screening and feasibility studies. If it is decided to include this road, verification and surveys will be undertaken in a similar manner to roads already included. The GOAP has developed an R&R policy suited to the circumstances of this project. The major issue of concern has been the nature of entitlements to be given to squatters and encroachers under the R&R policy. The Government is concerned about according legitimacy to people illegally occupying public land. Following consultations, a framework has been developed which complies with Bank and Government of India guidelines, but which distinguishes between compensation in cases of land acquisition or other losses of private property, and rehabilitation and assistance given to squatters and certain of the agricultural encroachers. The Bank has cleared this framework, and a detailed Resettlement Action Plan (RAP) has been prepared by the Borrower and agreed with the Bank. A summary table of families and individuals affected by the project and entitled to assistance under the resettlement policy is included below: Project-Affected Families Project-Affected Persons Entitled Persons Phase I 584 3,226 975 Phase II 998 4,657 1,544 Phase III 1,365 ,372 2441 Totals 2,947 14,255 4,960 The Socio-Economic Baseline Survey for the first 416 km of project roads identified 584 project-affected families (1.4 families per km). Of these, 347 (59%) are encroachers within the ROW; the rest are title holders. Because of the linear nature of the project and careful design to avoid displacement, only 5 title holders are likely to lose more than 25% of their land holdings. None of the title holders will have to be relocated, while 187 squatters will lose their residence and be assisted in relocation. The preliminary figures for Phases II and III also indicate that socio-economic impacts are likely to be modest. No large scale movements of groups of people are envisaged, and the project will seek to facilitate people's self-relocation by giving adequate resources and support, rather than developing clustered resettlement sites. Vulnerable groups: The project action plan gives targeted support and additional assistance to the more vulnerable groups, in particular those at high risk of losing economic viability. This is in accordance with the policy framework adopted by GOAP for this project. The data collected contains information about socio- economic status, as well as being gender disaggregated. A separate study has been undertaken to assess whether the project will have an impact on indigenous peoples, which would require an Indigenous Peoples' Development Plan, in accordance with OD 4.20. This study gives a comprehensive overview of the situation of tribals in Andhra Pradesh, and the existing legislation related to them. Based on this study, and the baseline data on existing assets and expected impacts of the project, the study concludes that no tribal communities will be affected, and that a separate Indigenous People's Development Plan is not required for this project. Project Appraisal Document Page 14 Country: India Project Title: Andhra Pradesh State Highway Project The Resettlement Action Plan includes provision for an experienced Resettlement Officer to be appointed to the Project Implementation Unit, and supported by RBD and district staff for each road contract. The organizational framework planned is good, with participation by government officials at different levels, participating NGOs, and representation by project-affected persons. Working with other agencies with more experience in rural development programs represents a good approach, since RBD does not yet have experience in undertaking resettlement programs. Plans are underway to appoint coordinators with relevant experience for the project, and to set up the institutional mechanisms for collaboration. A training program is planned to develop appropriate skills where required, and implementation support will be provided by experienced NGOs. Monitoring and supervision: Socio-economic impacts of the project will be monitored during implementation, based on two kind of indicators. Input/output indicators will be monitored and reported on internally. Impact indicators will be monitored by an independent agency twice during the project period; as part of a mid-term evaluation, and as a final evaluation following completion. Regular supervision and follow up by Bank specialists are planned. ~~~~~~~~~~~~......................I.....................................................I......................... ................................................................................................................................. 18. Environmental Assessment: Environmental Category 0 B A sectoral Environmental Assessment (EA) was initiated as per the Bank's Operational Directive OD 4.01 and was carried out by international consultants. According to the report, since the majority of the work is restricted to the existing right-of-way, the direct impact of the road will be restricted to the right-of-way and only limited land acquisition is expected. The improvements in road services will allow development and improved access to a large part of the state. The project will also reduce road congestion. The EA also states that the vast majority of project werks will not cause significant environmental degradation. The road sites are generally highly modified, free of sensitive areas and with relatively clear right-of-way, except in urban areas. Some trees will be removed but will be compensated by a generous replanting program. The project will use normal construction controls to limit damage to the environment. The EA identified two areas on the project roads which have the potential to impact natural habitats. These are: (a) the Nagarjuna Sagar-Srisailam (NSS) Sanctuary on Guntur to Kurnool Road - a tiger sanctuary; and (b) the Sri Venkateswara National Park and Sanctuary (SVNPS) bordering the Madanapalle to Renigunta Road - home to some endangered species. The EA was submitted to the GOI Ministry of Environment and Forests (MOEF), and was cleared subject to the exclusion of both roads. The MOEF clearance further proposed an alternative route to divert traffic away from the NSS Sanctuary. This will be the subject of feasibility study and environmental resettlement screening, for possible inclusion in the third phase construction program. It was agreed that an Environmental Management Plan and updated Resettlement Action Plan acceptable to the Bank will be a condition of invitation of bids for this or any other proposed new road section. It was further agreed that the loan proceeds will not be used to widen, strengthen, improve or maintain the road section from Guntur to Thokapalle unless a link acceptable to the Bank, which bypasses the NSS Sanctuary, is proposed. While only minimal impact on land use is expected, potential environmental impact include: (i) air and noise pollution during construction and during operation in urban areas; (ii) dust and smoke from material transport, crushers and asphalt plants during construction; (iii) pollution from spills of oil, fuel, lubricants, etc.; (iv) encroachrnent of right-of-way by squatters in urban areas; and (v) operation of borrow areas, quarries and construction camps. The EA recommends a number of measures which have been incorporated in the design, construction and operation of the project to minimize adverse impacts. In the design phase, for example, Project Appraisal Document Page 15 Country: India Project Title: Andhra Pradesh State Highway Project widening of the road will be done on one side where necessary, to minimize disruption and loss of road side planting. During the construction phase, key recommendations which will be included in the construction specifications are: restoration of borrow pits; seeding of embankment slopes and planting of trees; proper siting of camps and depots recognizing the potential for long-term or other public usage; safe disposal of solid and liquid wastes from construction camps; prevention of dust, accidents and vehicular damage through safe diversion of construction traffic; proper selection, maintenance and operation of equipment to ensure compliance with air, noise and discharge requirements; installation and maintenance of semi-permeable membranes to prevent sediment transfer and increase in turbidity near waterbodies; etc. Finally the project will be implemented by contractors working on behalf of RBD and not by RBD directly. As such, the specifications will be strictly enforced and closely supervised by consultants with local RBD staff. On the operational front, an institutional goal is to set up an environmental unit in RBD to provide focus for environmental concerns and training. In the short-term, an environmental specialist will be included in the proposed PIU to review the project design for environmental adequacy, monitor the environmental aspects of the project during construction, and assist with other environmental related matters. The EA also recommends regular budget provision for completing the replanting of the existing right-of-way areas and for replacement tree planting. Training needs are also identified and these too will be incorporated in the project. An Environmental Management Plan was prepared by RBD and agreed with the Bank. The Plan includes measures for mitigating environmental impacts during construction, monitoring, institutional strengthening and screening of possible future road components, with indicative budgets and target dates. Overall, the project will have significant positive environment benefits by reducing dust, noise and air pollution, increasing productivity/supply of services and improving road safety. Indirectly, it will enhance the overall development of the region. The positive benefit will be enhanced by incorporation of appropriate mitigation measures and enhancement actions such as tree planting, traffic separation, and improved right-of-way control. Over the long-term, environmental institutions will be strengthened to provide focus for environmental concerns in the responsible agency. ...................................... ........... .............................................. ........................................................ .. .................................................... ............................ 19. Participatorv Approach: Identification/ Implementation Operation Preparation Beneficiaries/community groups consultation consultation Intermediary NGOs consultation consultation Academic institutions Local government collaboration collaboration Other donors information sharing information sharing Commercial road user groups consultation consultation consultation Project Appraisal Document Page 16 Country: India Project Title: Andhra Pradesh State Highway Project 20. Sustainabilitv: Past GOAP allocations for road maintenance have been well below current Indian norms for sustainable maintenance of existing roads, and could be more efficiently applied. With increasing maintenance allocations for the road sector over the last two financial years, GOAP maintenance spending could reach 85 percent of expected norms. It is not yet clear whether RBD will be able to sustain this level in future years, or strengthen allocation mechanisms to ensure priority for the core road network. The project includes agreements for minimizing this funding gap and establishment of improved methods for identifying and prioritizing maintenance needs and managing maintenance spending. Improved sustainability of road works also requires more effective management of maintenance practices on the ground, to ensure timely preservation of assets and value-for-money for works undertaken. These are being addressed through assistance for strengthened maintenance management procedures, which go beyond office planning tools to address decision-making, quality control and accountability practices. Sustainability of the institutional impacts of the project will be strengthened by demonstrated success of improved contracting, consulting and maintenance management procedures and the resettlement and environmental action plans, and by the involvement of a wide number of RBD staff in project implementation and training. The advantages of project-related measures such as the Implementation and Tender Committee, Project Implementation Unit, Pavement Management System and Financial Management System are likely to be carried through to other GOAP programs beyond the life of the project. 21. Critical Risks: The main project risks are identified in the fourth column of Annex 1, and include: (a) delay or inaction on institutional reforms; (b) cost savings not passed on to users; (c) inadequate maintenance; (d) unresolved traffic delays; (e) delays in procurement and implementation; (f) delays in site readiness and RAP implementation; (g) counterpart funding; and (h) problems with contractor or consultant performance. Institutional reforms are at risk of delays or inaction as key officials, priorities and incentives change after the project has been established. Similarly, there are risks of (i) poorly designed and/or implemented Road Fund mechanisms, with the further possibility of inaction and/or diversionary efforts on the planned application of Road Fund resources; and (ii) jeopardy to the agreed revisions to road maintenance policy and programs, where stakeholder support might wane (or not be fully mobilized by GOAP), or where special interest groups' pressures could lead to undesirable compromises on the rational determination of spending prioritization. These risks are being addressed through emphasis on comprehensive consultations on key initiatives such as the Road Fund and the RBD re-organization, widespread participation by RBD staff in the implementation of institutional strengthening program, carefully targeted technical assistance, and consultations with the Bank on the institutional development action program. Cost savinga arising from improved roads may not be passed on to road users if transport operations are not fully competitive or constrained by regulations, or if savings are offset by price increases (e.g. for diesel fuel) or subsidy reductions (e.g. for passenger fares). This risk is not directly addressed, but will be monitored during the project. The discussion of risk minimization continues after the following table. Project Appraisal Document Page 17 Country: India Project Title: Andhra Pradesh State Highway Project Risk Risk Ratirg Risk Minimization Measure ............................................................................................... Project outputs to Delay or inaction on Medium Ownership of reforms, through development institutional reforms participation in their development and objectives and Country well targeted technical assistance Assistance Strategy Cost savings not passed Medium institutional strengthening, monitoring on to users Inadequate maintenance Medium Increased budget, possible introduction of a road fund, stakeholder consultation, improved management processes Traffic delays remain Medium Institutional strengthening in traffic management ................................................................................................................................................................................. ......................................... .................................. Project components to Implementation delays Medium Comprehensive preparation; high-level outputs Tender & Implementation Committee in place; strengthened project management capacity Delays in site readiness Substantial Immediate action to appoint key staff, and implementation of initiate land acquisition, and establish resettlement action plan. access to assistance programs Inadequate counterpart Low Agreement on annual budget targets and funding annual reviews; link to project disbursements Problems with contractor Medium International supervision, workshops and or consultant performance training, strengthening of RBD management skills, dispute resolution .. ................................ ................. ............................ I................... I........ I.................................I...................................................I............................. ........ Overall project risk Medium rating ....................I........................................................................................................................................................................................................................................ Maintenance of state highways and major district roads has suffered from inadequate funding and weak controls on priority-setting and works quality. Maintenance funding, planning and management processes will be addressed under the project, but effective changes in practice could be constrained by entrenched poor practices, procedures and vested interests. Traffic delay reductions from the project could be undermined to some extent by inefficient traffic management or increased roadside development. These will be addressed under the institutional strengthening component of the project. Higher-than-expected traffic growth could also reduce time savings, but spread the benefits of road improvements to more end users. Project Appralsal Document Page 18 Country: Indla Project Tltle: Andhra Pradesh State Highway Project Delays in project implementation have been a common feature of all road sector project in India, due largely to slow procurement, but lack of timely decisions, and failure to make construction sites available to contractors. Section 10 summarizes measures taken during project preparation and design to mitigate this problem, including (i) agreed standard bid documents and procedures; (ii) improved preparation of designs; (iii) advance procurement actions and an agreed project execution schedule; (iv) supervision by qualified consultants; (v) establishment of the high-level Implementation and Tender Committee; and (vi) strengthened RBD procedures for project monitoring. Site Readiness and Resettlement Action Plan Implementation: While the organizational framework of the RAP is good, the institutional capacity to undertake the various activities is yet to be established, and the mechanisms are not yet in place. Because of the importance of systematic and satisfactory land acquisition and resettlement to the overall progress of the project, developing the organizational capacity to implement the Resettlement Action Plan is critical. To minimize this risk, mobilization and contractual arrangements of staff and participating agencies in the RAP will be closely monitored during project supervision. The RAP procedures specify that completion of resettlement actions will be certified by the Project Director before any road section is handed over to contractors for civil works. However because works are primarily on existing roads, large sections are free of resettlement issues and can be handed over at contract commencement. Counterpart funding inadequacy or delays could arise during the project, leading to a slowdown in disbursements and project execution. Contractor or consultant performance problems have also contributed to implementation delays and problems in India. The project will include workshops and consultation to strengthen working relationships between contractors, consultants and clients, and training for RBD staff in the role of the employer in contract management. The introduction of dispute resolution mechanisms is expected to minimize protracted disagreements. ~~~~~~~~~~....... ........... ............................................I.........................................................I....................................................................................................... 22. Possible Controversial Aspects: During project preparation, three locations were identified where upgrading of existing roads could affect nearby sensitive environmental areas. The first of these was eliminated early in the assessment process, due to possible impacts on a national park and tribal communities in the area, and the availability of an alternative route. The remaining two areas of natural habitat were more extensively assessed, but were subsequently deleted from the project during review by the Indian Ministry of Environment and Forests. These are discussed in Section 18. Block 4: Main Loan Conditions 23. Effectiveness Conditions: none other than standard conditions. ... ...................................... ................................................I................................................ .................................... ........... ..........I,.................................. 24. Q.h=r: The Government of Andhra Pradesh (GOAP) will maintain an empowered Implementation and Tender Committee (ITC) to oversee project implementation, consisting of Principal Secretary, Transport, Roads and Buildings, Principal Secretary, Works and Projects, Secretary, Finance, and Engineer-in-Chief, Roads and Buildings. The functions of this committee will include (a) approving contracts based on the recommendations of the PIU, (b) ensuring inter-departmental coordination within GOAP, and (c) facilitating high-level Project Appraisal Document Page 19 Country: India Project Title: Andhra Pradesh State Highway Project govermnent decisions when required. RBD will produce a quarterly report on implementation progress and proposed action plans for the project, which will be reviewed by the Implementation and Tender Committee and the Bank. By March 31 each year: GOAP will ensure funding for non-plan maintenance of a core network of approximately 10,000 km of State Highways and Important Major District Roads (IMDRs) at not less than 80 percent of the needs established by the Pavement Management System for that year. For this purpose, RBD will establish a separate budget head for non-plan maintenance of IMDRs, as defined in the Project Implementation Plan, and undertake an annual PMS analysis of optimal maintenance spending requirements on all state roads. By March 31 each year: GOAP will report on the proportions of the main state road network classified as being in good, fair and poor condition, on the proposed maintenance spending for the forthcoming year, and on progress with strengthening of maintenance management. GOAP will not use the proceeds of the Loan to widen, strengthen, improve or maintain the road section from Guntur to Thokapalle unless it proposes a road link, satisfactory to the Bank, bypassing the Nagarjuna Sagar- Srisailam Sanctuary. Further, with respect to the road sections from Guntur to Thokapalle and from Thokapalle to Nandyal, and any road section not presently selected for the Project, GOAP will submit an Environmental Management Plan and a Resettlement Action Plan, satisfactory to the Bank, covering the relevant road section before inviting bids for works on that section. Block 5: Compliance with Bank Policies This project complies with all applicable Bank policies. Chris Hoban Robert S. Drysd le Task Manager Country Manager Project Appraisal Document Page 20 Country: India Project Title: Andhra Pradesh State Highway Project Annex 1 Project Design Summary Narrative Summary Key Performance Monitoring and Critical Risks Indicators Supervision 1. CAS Objective 1.1 Increased focus on 1.1 Adoption by AP of 1.1 Policy letter and 1. State will not maintain state finances and sector appropriate reform action plan received political commitment to reforms strategies in road sector follow-through reform actions 1.2 Improving the 1.2 Policy improvements 1.2, 1.3 PIU quarterly institutional and financial linked to the progressive reports and annual report performance of the public reform of the RBD. on institutional action sector in infrastructure plan 1.3 Increased involvement 1.3 Shift road agency's 1.3 RBD budget of the private sector in role from provider to allocations for staff road engineering and manager relative to contracted construction works 2 Project Development [Development objectives Objectives to CAS] 2.1 Reduce transport 2.1 Reduced vehicle 2.1 PIU revised estimates 2.1, 2.2 User cost savings costs and transport operating costs in real of economic returns on not passed on due to (i) constraints on economic terms on project road works completion transport operations not activity sections fully competitive or constrained by regulation; 2.2 Reduction of the 2.2 PIU reports on road or (ii) more than proportion of the core condition measurements offsetting increases in network in poor condition and PMS analyses other cost inputs from 70 to 30 percent. 2.3 Improve the GOAP's 2.3 Action plan being 2.3 PIU quarterly reports 2.3 State administrative institutional capabilities implemented constraints will inhibit in the sector reform actions in the . ________________________ transport sector 20 Project Appraisal Document Page 21 Country: India Project Title: Andhra Pradesh State Highway Project 3 Project Outputs [outputs to development objectives] 3.1 Improved riding 3.1 Average journey 3.1 Speed and roughness 3.1, 3.2 (a) Roads not quality and capacity of times reduced by 20% surveys by PIU before adequately maintained; selected segments of the and finished road commencement and on state's core road network roughness less than 3.5 completion of each road (b) Traffic delays remain IRI on completed section due to inefficient traffic sections. management or increased roadside development; 3.2 Backlog of periodic 3.2 (a) Annual funding at 3.2 PIU reports maintenance reduced on least 80% of needs for (c) Higher than expected the core road network, Core Network; traffic growth with improved quality and prioritization (b) Percent funding increase in total maintenance allocation in real terms relative to the average for the preceding five years; (c) Number of km of periodic maintenance completed: 600 km by March 2000, 1800 km by end of project 3.3.1 Improved RBD 3.3.1 Corporate 3.3 PIU quarterly reports 3.3 (a) Delay or inaction organizational structure in management group and annual report on on institutional reforms. place appointed institutional action plan. (b) Staff resistance to 3.3.2 Road Act passed 3.3.2 Actions gazetted change and lack of and Road trust fund by Mid-Term Review incentives to perform. established and in operation 3.3.3 Effective systems 3.3.3. (a) Consultants and procedures appointed; established for planning, budgeting, procurement, (b) Reports received; contract administration, monitoring and financial (c) Agreed actions management and implemented stakeholder consultation. Project Appraisal Document Page 22 Country: India Project Title: Andhra Pradesh State Highway Project 4 Project Components [components to outputs] [See Annex 2] 4.1 Widen and strengthen 4.1.1 Number of km 4.1 PIU quarterly 4.1,2 (a) delays in about 1400 km of state widened/strengthened; progress reports procurement and contract highways and major 400 km by March 2000; implementation. district roads 1400 km by project end (b) delays in site 4.2 Execute program of 4.2 (a) Consultants 4.2 PIU quarterly readiness and maintenance works and appointed progress reports implementation of improve maintenance resettlement action plan. management (b) Designs completed (c) delayed or inadequate (c) Works contracted counterpart funding. (d) Supervision in place (d) poor performance of contractors and/or consultants 4.3 Program to reform 4.3.1 Consultants 4.3 PIU quarterly 4.3 Consultants unable to and strengthen Roads and appointed to help RBD progress reports perform due to lack of Buildings Department implement Institutional consensus on change Action Plan agenda or lack of GOAP support. 4.3.2 Consultants appointed for preinvestment studies Project Appraisal Document Page 23 Country: India Project Title: Andhra Pradesh State Highway Project Annex 2 Detailed Project Description 1. Road Widening and Strengthening - US$ 400.6 million, including contingencies. This includes: (a) civil works for widening and strengthening of about 1400 km of high-traffic volume State Highways and Major District Roads ($373.9 million). Works will be implemented in three phases, with the first 400 km to be invited in June, 1997. Each phase will consist of 3-5 civil works packages, generally of $15-$45 million. (b) land acquisition, resettlement and rehabilitation, and utility relocation ($1.4 million). This item including land acquisition and cash compensation where relevant will be financed by GOAP. Other costs including rehabilitation assistance, training and monitoring will be financed by the Bank under Components 3(b) and 3(e) below. (c) consulting services for: (i) engineering design, production of bid documents, monitoring of implementation ($2 million). Designs and bid documents for the second and third phase works will be completed in the first year of the project, while other components of these services will continue into throughout the project. Initial expenditures of up to $3.7 million for these services will be financed under the State Roads Infrastructure Development Technical Assistance Project (Ln. 4114-IN), and are not included here. (ii) supervision of civil works ($23.3 million). One supervision package will be invited for the first phase and no more than two for each of the subsequent two construction phases. 2. Road Maintenance - US$ 73.7 million including contingencies. This includes: (a) a program to reduce the backlog of periodic maintenance works on about 2000 km of state highways and major district roads ($64.2 million). Selection criteria would take account of road condition and traffic volume, emphasizing economic returns on investments, and the selection of roads in condition suitable for preventative maintenance. Works will be executed by contract with design and supervision provided by the Roads and Buildings Department, supported by advisory consultant services described below. Measures to strengthen the effectiveness and value-for-money of periodic maintenance will be progressively introduced in the second and third years of this program. (b) a program of pilot demonstration projects, to introduce and test alternative approaches and best practices for routine maintenance by area contract on 900 km of selected roads ($3.3 million). Three contracts are proposed, each with a three-year duration, with annual reviews of performance criteria and implementation arrangements. (c) emergency maintenance of 20 km of national highway 5 affected by recent cyclone damage ($5 million). Project Appraisal Document Page 24 Country: India Project Title: Andhra Pradesh State Highway Project (d) consulting services for developing and implementing strengthened maintenance management procedures, assistance with planning, design, and implementation of maintenance works, and training ($1.2 million). 3. Institutional Reform and Strengthening - US$ 8.8 million. This component includes: (a) Consultancy services to assist GOAP in developing and implementing an institutional strengthening program for the Roads and Buildings Department (RBD); including corporate strategy development, studies and/or pilot projects, and implementation and operational development of the planned Road Fund, including its financial management, priority-setting and accountability features and functioning. ($1 million) (b) Training and staff development programs for RBD and other state agencies relevant to the achievement of GOAP objectives in the sector, including environment and resettlement training. ($3 million) (c) Equipment and related services for office modernization and road management systems. ($2 million) (d) Pre-investment studies, including environmental and resettlement assessments and follow-up environmental assessment of roads passing near sensitive environmental areas. This will include feasibility studies policy framework and draft concession agreements for private sector investment in roads. ($2.5 million) (e) technical assistance for resettlement and environmental aspects of the project ($0.3 million) 4. Repayment of the Project Preparation Facility - US$ 2.4 million Project Appraisal Document Page 25 Country: India Project Title: Andhra Pradesh State Highway Project Annex 3 Estimated Project Costs Project Component Local Foreign Total ----------------US $ million-------------- (1) Widening & Strengthening of State roads (a) Civil works 187 124.6 311.6 (b) Design & Supervision 12 9.1 21.1 (c) Land acquisition, resettlement & rehabilitation 1.2 0 1.2 (2) Maintenance of State roads (a) Works 36.3 24.1 60.4 (b) TA for maintenance management 0.6 0.4 1 (3) Reform and strengthening of State road agency Technical Assistance, training and equipment 4.5 2.8 7.3 Total Baseline Cost 241.6 161 402.6 Physical Contingencies (10%) 24.1 16.1 40.2 Price Contingencies (10%) 24.2 16.1 40.3 (4) Repayment of Project Preparation facility 1.4 1 2.4 Total Project Cost 291.3 194.2 485.5 Project Appraisal Document Page 26 Country: India Project Title: Andhra Pradesh State Highway Project Annex 4 Cost Benefit Analysis Summary (million US dollars, 1997) Present Value of Flows Economic Analysis Financial Analysis Improvement | Maintenance Overall Improvement Maintenance Overall Benefits $ 720 m $ 342 m $ 1063 m $ 800 m $ 380 m $ 1181m Costs $ 257 m $21 m $ 289 m $ 286 m $ 23 m $ 321m Net Benefits: $ 463 m $ 321 m $ 774 m $ 514 m $357m $ 860 m ERR: _ 27 % 58 % 32 % 27 % 58 % 32 % Main Assumptions: Details of the economic analysis are described in "Andhra Pradesh State Highway project - Economic Evaluation", March 1997, a copy of which is on the project file. Key features are: * The unit construction costs were based on the Bill of Quantities developed by the consultant for the first 400 km of roads for which the detailed design was completed. Base costs were inflated by 19 % to include physical contingencies, supervision costs, and costs of land acquisition, R&R and utility relocation. The average cost of US$ 260,000 per kilometer includes substantial widening and shoulder reconstruction. Maintenance costs were based on the costs developed during the Road Maintenance Study. • Net Benefits were evaluated using the Highway Design and Maintenance (HDM) model developed by the World Bank. This calculates the net reduction in total transportation costs over the life of the project, taking account of savings in road user costs, primarily vehicle operating costs and time savings, along with changes in construction and maintenance costs. User cost savings depend mainly on changes in road roughness, traffic congestion and operating speeds. Time savings typically counted for 39 % of net benefits. * Safety impacts are uncertain due to offsetting effects of improved road standards and expected higher traffic speeds, and were not considered in the analysis due to lack of data on both accident occurrence and costs. From similar studies in other countries, it is estimated that their magnitude in economic terms is likely to be modest relative to other user costs. * The benefits of widening to two lanes and paving the shoulders were included in the analysis through speed-flow equations based on lane and shoulder width. Speeds predicted by the HDM model were consistent with observations of speeds on the roads. The effects of narrow roads, non-motorized traffic, pedestrians and roadside activities were reflected in a "friction" factor affecting traffic speed. Alternative road widths were considered in the analysis, before adopting the final pavement and shoulder widths. * The traffic growth rates used for the first 3 years were estimated based on rates of population growth and per capita income for passenger traffic, and the rates of growth in agriculture, mining and industrial production for freight traffic projections. These produced initial growth rates of 6 to 15 percent, while a 5 % traffic growth rate was used for the remaining 17 years of the analysis period. Project Appraisal Document Page 27 Country: India Project Title: Andhra Pradesh State Highway Project * The base case without the project assumes that roads are maintained (potholes patched and reseals every five years) but not improved over the 20 year evaluation period. In the with- project case, further pavement strengthening is provided through an overlay when roughness reaches 8.4 International Roughness Index (IRI). This is somewhat later than would be provided under optimal maintenance strategies, allowing for some remaining inefficiencies in state maintenance practices. * Roads are designed on the basis of current levels of truck overloading, recognizing the substantial lack of success in introducing improved load enforcement or truck fleet modernization in India. * For the maintenance component, the HDM model was used with a matrix of 36 "typical links" having varying traffic volume and road condition, using information on overall network lengths in each category. Alternative maintenance strategies were considered for each cell in the matrix, to arrive at an overall priority maintenance program within budget constraints. Sensitivity Analysis: (for the widening and strengthening component) The major risk affecting economic analysis is cost increases due to delays in implementation and site readiness, as discussed in Section 21. This was reflected by an assumed average one-year delay in opening of all works, with a commensurate increase in costs and delay in the benefit stream. Sensitivity to changes in future maintenance practices were relatively small, as they mainly affect user costs in the later years of the evaluation period. Macroeconomic problems could also lead to reduced traffic growth and implementation delays. Other risks associated with cost overruns, inadequate maintenance, or low traffic growth are assessed in terms of possible overall cost increases and benefit reductions in the following table: Test ERR NPV (million US dollars) Base Case 27 % 463 Opening delayed one year 24 % 345 Benefits decreased by 20 % 23 % 319 Benefits decreased by 30 % 21 % 247 Cost increased by 20% 24 % 410 Cost increased by 30% 23 % 385 Benefits down 20% and costs up 20% 20 % 267 Switching values of critical items: the cost of widening and strengthening works would have to increase by 179 percent or the benefits to drop by 64 percent before the NPV would fall to zero. Distribution of benefits: All income groups use state roads, as travelers and as suppliers and consumers of goods and services. Without the project, high transport costs would continue to affect prices and availability of services to the community, and would constrain economic development at all levels. With the project, transport costs will decrease, travel times to main centers will reduce, and services such as electricity, health, education, and agricultural extension are more likely to become available in rural areas. The trucking industry in Andhra Pradesh is competitive, and is likely to pass on the benefits of operating cost savings through freight rates and extended services. Bus services are primarily provided by the state; even if fares are not reduced, the extent and schedules of bus services are likely to respond to changes in road capacity and quality. Project Appraisal Document Page 28 Country: India Project Title: Andhra Pradesh State Highway Project Annex 5 Andhra Pradesh State Highway Project Financial Summary Years Ending June 30 (US$ million, 1996) Implementation Period 1998 1999 2000 2001 2002 2003 Pro.ject Cost Investment Costs 23.4 52.7 94.2 99.6 99.6 41 Recurrent Costs 4.3 9.6 17.2 18.2 18.2 7.5 Total 27.7 62.3 111.4 117.8 117.8 48.5 Financing Sources (% of total costs) IBRD 20 45 80 85 85 35 (72%) (72%) (72%) (72%) (72%) (72%) State 7.7 17.3 31.4 32.8 32.8 13.5 (28%) (28%) (28%) (28%) (28%) (28%) Total 27.7 62.3 111.4 117.8 117.8 48.5 (100%) (100%) (100%) (100%) (100%) (100%) Project Appraisal Document Page 29 Country: India Project Title: Andhra Pradesh State Highway Project Annex 6 Andhra Pradesh State highway project Procurement and Disbursement Arrangements Procurement Procurement methods (Table A) Civil works for widening and strengthening will generally be procured by International Competitive Bidding (ICB), except for one contract less than $10 million to be procured by National Competitive Bidding (NCB). The works will be implemented in three phases with contract packages sized to be of interest to international contractors. Pre-qualification has been invited for phase I, the first three contract packages ranging from $ 15 to $ 45 million. The outcome of this PQ may suggest that some changes for the packaging may be required. One Phase II package with an estimated value of less than $10 million will be procured by NCB. All civil works will be procured using Bank Standard Bid Documents. Civil works for maintenance will consist of: (a) NCB Contracts for periodic maintenance works in packages of $0.5 to $2.5 million, and one package for emergency maintenance with a value of $5 million, for an aggregate value of $ 70 million procured by NCB. (b) Other Pilot demonstration contracts for area routine maintenance with aggregate value of $ 3.3 m. Pilot works if required up to $0.2 million will be procured on the basis of quotations obtained from at least three qualified domestic firms. Equipment and related services for office modernization and road management systems in conjunction with institutional strengthening will be procured by a combination of NCB and Local shopping as appropriate on a case by case basis. Consulting services will be procured according to Bank guidelines and will be provided for: (i) construction supervision for widening and strengthening works (3-5 packages - one or two for each phase of 3-5 construction contracts) (ii) design of remaining works and assistance with project coordination and development of strengthened project management procedures (1 package) (iii) assistance with development and implementation of improved maintenance procedures (1 package) (iv) technical assistance to reform and strengthen the Roads & Buildings Department (1 package). It is envisaged that twinning proposals will be invited from selected international highway departments and that evaluation will include visits to each of the responding institutions. Project Appraisal Document Page 30 Country: India Project Title: Andhra Pradesh State Highway Project (v) resettlement and environmental implementation and monitoring (several packages). (vi) pre-investment studies for preparation of future projects (1 package) (vii) training With the exception of item (v) and some aspects of item (vii), selection will be on the basis of quality and cost, with varying percentages for cost. Training services will be procured on the basis of consultancy services and statements of expenditures, after agreement with the Bank on priorities and selection criteria. Prior review thresholds (Table B) Civil works contracts over $ 5 million will be all subject to prior review. Civil works for maintenance including pilot works under $ 5 million will not be subject to prior review, once the bid documents for the first three NCB contracts are agreed with the Bank. Procurement of goods with an individual contract value of more than $ 100,000 will be subject to prior review. DXisbursemen Allocation of loan proceeds (Table C) The allocation of Loan proceeds is given in the Table C, which also indicates the different financing for the different categories of expenditures. Disbursements against civil works contracts will cover 70 percent of the certified expenditures, with the balance to be financed from counterpart funds. Use of statements of expenses (SOEs): Some withdrawals from the Loan Account may be made on the basis of statements of expenses under contracts costing less than the equivalent of: (a) $500,000 for civil works; (b) $100,000 for the services of consulting firms; and (c) $50,000 for the services of individual consultants, all under such terms and conditions shall specify by notice to the Borrower. (d) $100,000 for goods; (e) training and studies Project Appraisal Document Page 31 Country: India Project Title: Andhra Pradesh State Highway Project Special accun A Special Account of $18 million will be established at the Reserve Bank of India to meet anticipated expenditures of about four months. Eligible payments greater than one third of the Special Account amount, may be paid by the Bank directly to suppliers, at the specific request of GOI. The Special Account will be replenished on the basis of reimbursement claims for eligible expenditures received by the Bank. The expenditures will be reimbursed to GOAP by GOI under its standard policy on release of external assistance funds to the States. Retroactive Financing: Retroactive financing limited to $2 million for eligible payments made from June 1, 1997, will be provided where advance expenses are appropriate for initiating emergency and periodic maintenance, resettlement and rehabilitation expenses, site preparation works and consultancy services. Project Appraisal Document Page 32 Country: India Project Title: Andhra Pradesh State Highway Project Table A: Project Costs by Procurement Arrangements (in US$ million equivalent) Expenditure Category Procurement Method Total Cost including contingencies ICB NCB Other NBF 1. Works Civil works for part (1) of 363.9 10 1.4 375.3 the project: widening and (254.7) (7) (261.7) strengthening Civil works for part (2) of 69.2 3.31 72.5 the project (maintenance, (48.5) (2.4) (50.8) periodic and routine) 2. Good 0.5 1.2 0.32 2.0 (0.5) (1.1) (0.2) (1.8) 3. Services Consulting Services, 33.33 33.3 NGOs and training (33.3) (33.3) Repavment of PPF 2.4 2.4 (2.4) (2.4) Total 364.4 80.4 39.3 1.4 485.5 (255.2) (56.6) (38.2) (0) (350.0) Note: NBF = Not Bank-Financed. Figures in parenthesis are the amounts to be financed by the Bank loan This includes works which up to $ 200,000 will be procured on the basis of quotations from at least three qualified domestic firms. 2 This will be procured using local shopping procurement method 3This will be procured according to Bank guidelines Project Appraisal Document Page 33 Country: India Project Title: Andhra Pradesh State Highway Project Table B: Thresholds for Procurement Methods and Prior Review Expenditure Contract Value Procurement Contracts Subject Category (Threshold) Method to Prior Review 1. Works Civil works for $ 10 million and over ICB Yes widening and strengthening Under $10 m NCB Yes Civil works for Over $5 million NCB Yes maintenance $ 0.2 to $5 million NCB No* Under $ 0.2 million Local shopping or No sole source 2. Goods Equipment for office $ 200,000 and over ICB Yes modernization and road management $ 100,000 to $ 200,000 NCB Yes systems Under $ 100,000 NCB No Individual contracts of Local shopping No $50,000 or less up to an aggregate of $ 2 million 3. Services Consulting services Firms over $ 200,000 Bank guidelines Yes Individuals over $50,000 * Bid documents for the first three contracts to be reviewed by the Bank; no further prior review of subsequent individual contracts Project Appraisal Document Page 34 Country: India Project Title: Andhra Pradesh State Highway Project Table C: Allocation of Loan Proceeds Expenditure Category Amount in Financing Percentage US$ million (1) Civil Works 300,400,000 70% (2) Goods 2,000,000 100% of foreign expenditures, 100% of local expenditures (ex- factory cost) and 80% of local expenditures for other items procured locally (3) Consultants' services (including services 30,200,000 100% provided by NGOs), training and studies (4) Repayment of PPF 2,400,000 (5) Unallocated 15,000,000 Total 350,000,000 Project Appraisal Document Page 35 Country: India Project Title: Andhra Pradesh State Highway Project Annex 7 Andhra Pradesh State Highways Project Project Processing Budget and Schedule (including trust funds) A. Project Budget Planned Actual (At final PCD stage) $623,000 $470,000 B. Project Schedule Planned Actual (At final PCD stage) Time taken to prepare the project (months) 32 First Bank mission (identification) 7/25/1994 7/25/1994 Appraisal mission departure L/15/1996 3/B/1997 Negotiations L /19926 4/22/192 Planned Date of Effectiveness 3/1511992 9/3Q/1997 Prepared by: Roads & Buildings Department, Government of Andhra Pradesh Preparation assistance: PPF No 00/P249-IN $2.4 m Bank staff who worked on the project included: Hoban, Bhandari, Chaabouni, Das, Somani, Kvam, Cittati, Huning, Galli, Long, Akimura, Midgley, Reddy, Kapoor Project Appraisal Document Page 36 Country: India Project Title: Andhra Pradesh State Highway Project Annex 8 Andhra Pradesh State Highway Project Documents in the Project File A. Project Implementation Plan Borrower's Project Implementation Plan - April 97 B. Bank Staff Assessments The Indian Transport Sector - Long Term Issues, Report No. 13192-IN, March, 1995 Country Assistance Strategy of the World Bank Group for India, Report No. 14509-IN, May, 1995 Andhra Pradesh: Agenda for Economic Affairs, 1996 Proposed Andhra Pradesh State Highway Project appraisal mission Aide Memoire - April 97 C. Other (GOAP & Consultant Reports) State Wide Strategic Options Study - Final Report - April 94 Environment Analysis - May 96 Draft Final Main Reports Vol. 1, II, III - August 96 Environmental Impact Assessment - September 96 Draft Resettlement Action Plan - September 96 Resettlement & Rehabilitation Policy Document - October 96 Road Maintenance Study Final Report Vol. 1, II - February 97 Revised Economic Analysis - March 97 Institutional Review Final Report - February 97 Resettlement Action Plan - April 97 Environmental Management Plan - April 97 Page 37 Project Appraisal Document Project Title: Andhra Pradesh State Highway Project Country: India Status of Bank Group Operations in India IBRD Loans and IDA Credits in the Operations Portfolio (As of March 31, 1997) Original Amount Difference in US$ Millions Between actual Loan or Fiscal Purpose IBRD IDA Cancel- and expected Project ID Credit Year lations Undis- Disbursements No. bursed a/ Number of Closed Loans/credits: 360 IN-PE-9872 C 19230 1988 TAMIL NADU URBAN 0.00 300.20 45.47 25.98 70.51 IN-PE-9941 L30960 1989 MAHARASHTRA POWER 400.00 0.00 62.67 105.16 160.23 IN-PE-9898 L30500 1989 UPPERKRISHNAPHASE II 165.00 0.00 120.00 41.64 161.64 IN-PE-9869 L30240 1989 NATHPA JHAKRI HYDRO 485.00 0.00 0.00 227.97 214.27 IN-PE-9973 L29940 1989 STATE ROADS I 170.00 0.00 61.41 9.98 151.39 IN-PE-9990 C20080 1989 VOCATIONAL TRAINING 0.00 250.00 103.33 59.59 165.82 IN-PE-9982 L32370 1990 NOR REGION TRANSM 485.00 0.00 0.00 274.82 262.82 IN-PE-9981 L31960 1990 CEMENT INDUSTRY RESTR. 300.00 0.00 6.82 23.27 30.09 IN-PE-9895 L31190 1990 TECHNOLOGY DEVELOPMENT 145.00 0.00 10.00 28.71 38.71 IN-PE-9932 C21580 1990 SECOND TN NUTRITION 0.00 95.80 29.81 4.59 22.35 IN-PE-9940 C21330 1990 POP. TRAINING (VII) 0.00 86.70 22.74 11.44 33.36 IN-PE-9860 C21310 1990 WTRSHED PLAINS 0.00 55.00 0.00 19.56 7.79 IN-PE-9989 C21300 1990 TECHNICIAN EDUC I 0.00 235.00 24.26 62.48 73.79 IN-PE-9890 C21150 1990 HYDERABADW/S 0.00 79.90 0.00 24.17 18.30 IN-PE-9882 C21000 1990 WTRSHED HILLS 0.00 75.00 0.00 32.76 40.51 IN-PE-9965 C20760 1990 PUNJAB IRR & DRAINAGE 0.00 150.00 4.72 38.57 29.39 IN-PE-9895 C20640 1990 TECHNOLOGY DEVELOPMENT 0.00 55.00 0.00 26.49 19.71 IN-PE-10381 L33640 1991 GAS FLARING REDUCTION 450.00 0.00 0.00 29.16 29.16 IN-PE-9906 L33340 1991 DID POLLUlTON CONTRON 124.00 0.00 0.00 23.05 -9.55 IN-PE-9958 L33000 1991 AGR.DEV.I (TN) 20.00 0.00 0:00 20.00 1.25 IN-PE-9885 L32590 1991 PETROCHEMICALS 233.00 0.00 70.30 30.77 -131.93 IN-PE-9885 L32580 1991 PETROCHEMICALS 12.00 0.00 0.00 2.66 2.67 IN-PE-9906 C22520 1991 IND POLLUTION CONTROL 0.00 31.60 0.00 26.24 25.30 IN-PE-9877 C22410 1991 DAM SAFETY 0.00 130.00 0.00 99.16 110.52 IN-PE-10369 C22340 1991 MAHARASHTRA RURAL WS 0.00 109.90 0.00 42.87 44.71 IN-PE-9988 C22230 1991 TECHNICIAN EDUC nI 0.00 307.10 51.37 134.35 132.61 IN-PE-9958 C22150 1991 AGRIC. DEV.I (TN) 0.00 92.80 0.00 16.94 9.63 IN-PE-10361 C21730 1991 ICDS I (ORISSA & A.P.) 0.00 96.00 21.65 22.29 37.34 IN-PE-10400 L34980 1992 MAHARASHTRAPOWERII 350.00 0.00 0.00 237.75 223.75 IN-PE-9946 L34700 1992 NATIONAL HIGHWAYS II 153.00 0.00 0.00 153.00 0.00 EN-PE-9888 L34360 1992 POWERUTILEFFIC IMP 265.00 0.00 0.00 113.25 91.15 IN-PE-9963 C23940 1992 POPULATION Vm 0.00 79.00 0.00 70.95 43.03 IN-PE-9946 C23650 1992 NATIONAL HIGHWAYS II 0.00 153.00 0.00 80.83 43.52 IN-PE-10393 C23500 1992 AIDS PREVENTION AND CONTROL 0.00 84.00 0.00 31.87 27.42 Page 38 Project Appraisal Document Project Title: Andhra Pradesh State Highway Project Country: India Original Amount Difference in USS Millions Between actual Loan oT Fiscal Purpose IBRD IDA Cancel- and expected Project ID Credit Year lations Undis- Disbursements No. bursed a/ IN-PE-10391 C23410 1992 WEST BENGAL FORESTRY 0.00 34.00 0.00 4.63 -.39 IN-PE-9921 C23290 1992 SHRMP & FISH CULTURE 0.00 85.00 48.51 24.62 56.12 IN-PE-10390 C23280 1992 MAHARASHTRA FORESTRY 0.00 124.00 16.18 62.99 36.65 IN-PE-10423 L36320 1993 NTPC POWER GENERATION 400.00 0.00 0.00 271.67 266.68 IN-PE-10416 L35770 1993 PGC POWER SYSTEM 350.00 0.00 0.00 191.79 120.99 IN-PE-10424 C25280 1993 NATLLEPROSYELIMINATION 0.00 85.00 0.00 58.84 33.31 IN-PE-9961 C25100 1993 UP SODIC LANDS RECLAM. 0.00 54.70 0.00 33.87 8.40 IN-PE-9955 C25090 1993 UTTAR PRADESH BASIC ED. 0.00 165.00 0.00 75.73 -2.81 IN-PE-10418 C24830 1993 KARNATAKA WS & ENV/SANIT. 0.00 92.00 0.00 69.88 38.04 IN-PE-9977 C24700 1993 ICDS 1I (BIHAR & MP) 0.00 194.00 0.00 170.63 67.06 IN-PE-10411 C24500 1993 JHARIAMIINEFIRECONTROL 0.00 12.00 0.00 5.18 4.89 IN-PE-10410 C24490 1993 RENEWABLE RESOURCES 0.00 115.00 0.00 87.58 170.78 IN-PE-10408 C24390 1993 BIHAR PLATEAU 0.00 117.00 0.00 90.15 57.72 IN-PE-10407 C24330 1993 ADP - RAJASTHAN 0.00 106.00 0.00 48.11 13.01 IN-PE-9959 C24090 1993 RUBBER 0.00 92.00 0.00 76.65 41.69 IN-PE-9870 L37530 1994 CONTAINER TRANSPORT 94.00 0.00 0.00 82.60 48.60 IN-PE-10457 C26300 1994 POPULATION IX 0.00 88.60 0.00 75.26 9.83 IN-PE-10455 C261 10 1994 BLINDNESS CONTROL 0.00 117.80 0.00 100.55 16.37 IN-PE-34162 C25940 1994 MAHARASHTRA EARTHQUAKE 0.00 246.00 0.00 97.91 66.55 IN-PE-9964 C25920 1994 WATER RES CONSOLID HARYANA 0.00 258.00 0.00 199.02 40.07 IN-PE-10449 C25730 1994 ANDHRA PRADESH FORESTRY 0.00 77.40 0.00 55.53 10.33 IN-PE-10448 C25720 1994 FORESTRY RESEARCH ED. 0.00 47.00 0.00 35.00 17.82 IN-PE-10461 L39076 1995 MADRAS WATER SUPPLY II 269.80 0.00 189.30 79.56 -.94 IN-PE-10461 L39070 1995 MADRAS WATER SUPPLY U 6.00 0.00 0.00 .01 -4.98 IN-PE-10563 L38576 1995 FINANCIAL SECTOR DEV 144.00 0.00 0.00 144.00 0.00 IN-PE-10563 L38560 1995 FINANCLkLSECTORDEV 350.00 0.00 0.00 200.00 -150.00 IN-PE-10463 L37806 1995 INDUSPOLLUTIONPREVENTION 50.00 0.00 0.00 46.50 -3.50 IN-PE-10463 L37790 1995 INDUS POLLUTION PREVENTION 93.00 0.00 0.00 88.00 2.86 IN-PE-10476 C27450 1995 TAMIL NADU WRCP 0.00 282.90 0.00 237.80 36.01 IN-PE-10522 C27330 1995 ASSAM RURAL INFRASTRUCTURE 0.00 126.00 0.00 108.14 12.24 IN-PE-10506 C27000 1995 M.P. FORESTRY 0.00 58.00 0.00 44.74 .84 IN-PE-10503 C26990 1995 AGRIC HUMAN RESOURCE DEVT 0.00 59.50 0.00 49.71 14.89 IN-PE-10489 C26630 1995 AP IST REF. HEALTH SYSTEMS 0.00 133.00 0.00 117.57 15.70 IN-PE-10464 C26610 1995 DISTRICT PRIMARY ED 0.00 260.30 0.00 192.81 7.66 IN-PE-10463 C26450 1995 INDUS POLLUTION PREVENTION 0.00 25.00 0.00 24.48 25.00 IN-PE-10484 L40560 1996 U.P. RURAL WATER 59.60 0.00 0.00 57.20 -.90 IN-PE-35170 L40140 1996 ORISSA POWER SECTOR REST. 350.00 0.00 0.00 337.89 .90 IN-PE-39935 L39920 1996 ILFS-INFRASTRUCTURE FINANCE 200.00 0.00 0.00 175.00 -3.50 IN-PE-10480 L39230 1996 BOMBAY SEWAGE DISPOSAL 167.00 0.00 0.00 162.09 24.69 IN-PE-35821 C28760 1996 DISTRICT PR.IMARY EDUC 2 0.00 425.20 0.00 395.33 -.99 IN-PE-43310 C28620 1996 COAL ENV&SOCIAL NITIGATION 0.00 63.00 0.00 57.02 -2.14 Page 39 Project Appraisal Document Project Title: Andhra Pradesh State Highway Project Country: India Original Amount Difference in USS Millions Between actual Loan or Fiscal Purpose IBRD IDA Cancel- and expected Project ID Credit Year lations IJndis- Disbursements No. bursed a/ [N-PE-39935 C28380 1996 ILFS-INFRASTRUCTURE FINANCE 0.00 5.00 0.00 4.70 5.00 IN-PE-35825 C28330 1996 STATEHEALTHFSYSTEMSII 0.00 350.00 0.00 313.64 21.59 IN-PE-10529 C28010 1996 ORISSA WATER RES. CONSOL. 0.00 290.90 0.00 236.35 -12.58 IN-PE-10485 C27740 1996 HYDROLOGY PROJECT 0.00 142.00 0.00 119.22 10.60 IN-PE-10480 C27630 1996 BOMBAY SEWAGE DISPOSAL 0.00 25.00 0.00 .07 2.19 IN-PE-45600 L41140 1997 TA STATES' RD INFRA DEV 51.50 0.00 0.00 48.50 -3.00 IN-PE-44449 C29420 1997 RURAL WOMEN"S DEVELOPMENT 0.00 19.50 0.00 18.67 0.00 IN-PE-10473 C29360 1997 TUBERCULOSIS CONTROL 0.00 142.40 0.00 136.10 0.00 IN-PE-43728 C29300 1997 ENVIRON. CAPACITY BLDG TA 0.00 50.00 0.00 48.00 0.00 IN-PE-36062 C29160 1997 ECODEVELOPMENT 0.00 28.00 0.00 25.42 -1.27 Total 6,341.90 7,062.2 888.54 7,539.03 0 Active Loans Closed Loans Total Total Disbursed (BRD and IDA): 4,933.18 29,245.51 34,178.69 of which has been repaid: 171.68 8,344.86 8,516.54 Total now held by IMRD and IDA: 12,343.88 20,340.71 32,684.59 Amount sold : 0.00 133.77 133.77 Of which repaid : 0.00 133.77 133.77 Total Undisbursed : 7,539.03 86.78 7,625.81 a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. b. Rating of 14: see OD 13.05. Annex D2. Preparation of Implementation Summarv (Form 590). Following the FY94 Annual Review of Portfolio performance (ARPP), a letter based system will be used (HS = highly Satisfactorv, S = satisfactory, U = unsatisfactory, HU = highly unsatisfactory): see proposcd Improvemcnts in Project and Portfolio Performance Rating Methodology (SecM94-90 1), August 23, 1994. c. Following the FY94 ARPP, "Implementation Progress" will be reported here. Page 40 Project Appraisal Document Project Title: Andhra Pradesh State Highway Project Country: India India STATEMENTOF IFC's Committed and Disbursed Portfolio (As of March 31, 1997) In US$ Millions Committed Disbursed IFC [ IFC FY Company Loan Equity Quasi Partic Loan Equity Quasi Partic Approval 1964 ,MUSCO 0.00 .47 0.00 0.00 0.00 .47 0.00 0.00 1975 hlUSCO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1978 HDFC 0.00 .41 0.00 0.00 0.00 .41 0.00 0.00 1979 MUSCO 0.00 .19 0.00 0.00 0.00 .19 0.00 0.00 1981 ITW Signode 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1981 M&M 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1981 Nagaxjuna Steel 0.00 .07 0.00 0.00 0.00 .07 0.00 0.00 1981 TISCO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1982 Modi Cement 17.31 0.00 0.00 0.00 17.31 0.00 0.00 0.00 1984 Bihar Sponge 13.43 .63 0.00 0.00 13.43 .63 0.00 0.00 1984 India Lcase 0.00 .35 0.00 0.00 0.00 .35 0.00 0.00 1986 EXB-City Mills .48 0.00 0.00 0.00 .48 0.00 0.00 0.00 1986 EXB-CECL .01 0.00 0.00 0.00 .01 0.00 0.00 0.00 1986 EXB-NB Footwear .19 0.00 0.00 0.00 .19 0.00 0.00 0.00 1986 EXB-Paharpur .22 0.00 0.00 0.00 .22 0.00 0.00 0.00 1986 EXB-STG .46 0.00 0.00 0.00 .46 0.00 0.00 0.00 1986 EXB-TAN .03 0.00 0.00 0.00 .03 0.00 0.00 0.00 1986 EXB-Wires & Fab. .11 0.00 0.00 0.00 .11 0.00 0.00 0.00 1986 GESCO 0.00 8.46 0.00 0.00 0.00 8.46 0.00 0.00 1986 India Equipment 0.00 .30 0.00 0.00 0.00 .30 0.00 0.00 1986 ITW Signode 0.00 .30 0.00 0.00 0.00 .30 0.00 0.00 1986 TISCO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1987 Hindustan 8.49 0.00 0.00 0.00 8.49 0.00 0.00 0.00 1987 HDFC 0.00 .26 0.00 0.00 0.00 .26 0.00 0.00 1987 Titan Watches .97 .39 0.00 0.00 .97 .39 0.00 0.00 1988 GKN Invel 0.00 1.07 0.00 0.00 0.00 1.07 0.00 0.00 1988 Tata Telecom 0.00 .05 0.00 0.00 0.00 .05 0.00 0.00 1988 Titan Watches 1.99 0.00 0.00 0.00 1.99 0.00 0.00 0.00 1989 AEC 14.72 0.00 0.00 0.00 14.72 0.00 0.00 0.00 1989 GujaratState 11.15 0.00 0.00 0.00 11.15 0.00 0.00 0.00 1989 JSB India 0.00 .37 0.00 0.00 0.00 .37 0.00 0.00 1989 Tata Electric 32.30 0.00 0.00 0.00 32.30 0.00 0,00 0.00 1989 TISCO 8.69 12.34 0.00 0.00 8.69 12.34 0.00 0.00 1989 UCAL 0.00 .63 0.00 0.00 0.00 .63 0.00 0.00 1990 CESC 19.05 0.00 0.00 0.00 19.05 0.00 0.00 0.00 1990 HOEL 0.00 .28 0.00 0.00 0.00 .28 0.00 0.00 1990 India Lease 1.31 .21 0.00 0.00 1.31 .21 0.00 0.00 1990 ICICI-IFGL 0.00 .16 0.00 0.00 0.00 .16 0.00 0.00 1990 ICICI-SPIC Fine 0.00 1.02 0.00 0.00 0.00 1.02 0.00 0.00 1990 IL & FS 12.75 0.00 1.81 0.00 12.75 0.00 1.81 0.00 1990 M&M 1.00 5.78 0.00 4.00 1.00 5.78 0.00 4.00 1990 MUSCO 0.00 .42 0.00 0.00 0.00 .42 0.00 0.00 Page 41 Project Appraisal Document Project Title: Andhra Pradesh State Highway Project Country: india Committed Disbursed IFC IFC FY Company Loan Equity Quasi Partic Loan Equity Quasi Partic Approval 1990 Tata Electric 30.26 0.00 0.00 0.00 30.26 0.00 0.00 0.00 1990 Tata Telecom 0.00 .02 0.00 0.00 0.00 .02 0.00 0.00 1990 Titan Watches 0.00 .12 0.00 0.00 0.00 .12 0.00 0.00 1990 TDICI-VECAUS II 0.00 1.94 0.00 0.00 0.00 1.94 0.00 0.00 1991 Bihar Sponge 0.00 .05 0.00 0.00 0.00 .05 0.00 0.00 1991 Block KG-OS-IV 0.00 .02 0.00 0.00 0.00 0.00 0.00 0.00 1991 BSES 45.00 0.00 0.00 0.00 45.00 0.00 0.00 0.00 1991 Gujarat State 2.65 0.00 0.00 0.00 2.65 0.00 0.00 0.00 1991 HDFC 40.00 .32 0.00 0.00 40.00 .32 0.00 0.00 1991 ITW Signode 0.00 .11 0.00 0°00 000 .11 0.00 0.00 1991 Triveni 0.00 .36 0.00 0.00 0.00 .36 0.00 0.00 1991 VARUN 6.25 1.35 0.00 0.00 6.25 1.35 0.00 0.00 1992 Arvind Mills 0.00 6.55 0.00 0.00 0.00 6.55 0.00 0.00 1992 Creditcapital VF 0.00 .45 0.00 0.00 0.00 .45 0.00 0.00 1992 CESC 30.00 0.00 0.00 67.00 30.00 0.00 0.00 67.00 1992 GESCO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1992 Indus VC Mgt Co 0.00 .01 0.00 0.00 0.00 .01 0.00 0.00 1992 Indus VCF 0.00 1.00 0.00 0.00 0.00 1.00 0.00 0.00 1992 Info Tech Fund 0.00 .64 0.00 0.00 0.00 .64 0.00 0.00 1992 Nippon Denro 28.57 5.77 0.00 0.00 28.57 5.77 0.00 0.00 1992 NICCO-UCO 2.06 .15 0.00 0.00 2.06 .15 0.00 0.00 1992 SKF Bearings 6.70 0.00 0.00 0.00 6.70 0.00 0.00 0.00 1992 Tata Telecom 0.00 .03 0.00 0.00 0.00 .03 0.00 0.00 1992 TISCO 0.00 3.03 0.00 0.00 0.00 3.03 0.00 0.00 1993 Arvind Mills 0.00 10.55 0.00 0.00 0.00 10.55 0.00 0.00 1993 GESCO 0.00 2.56 0.00 0.00 0.00 2.56 0.00 0.00 1993 HDFC 0.00 1.30 0.00 0.00 0.00 1.30 0.00 0.00 1993 India Equipment .60 0.00 0.00 1.47 .60 0.00 0.00 1.47 1993 Indo Rama 21.88 9.84 0.00 8.75 21.88 9.84 0.00 8.75 1993 IL&FS 0.00 3.11 0.00 0.00 0.00 3.11 0.00 0.00 1993 ITW Signode 0.00 .60 0.00 0.00 0.00 .60 0.00 0.00 1993 M&M 0.00 .71 0.00 0.00 0.00 .71 0.00 0.00 1993 -Titan Watches 0.00 .52 0.00 0.00 0.00 .52 0.00 0.00 1993 Triveni 0.00 .75 0.00 0.00 0.00 .75 0.00 0.00 1993 20TH Century .93 .80 0.00 5.87 .93 .80 0.00 5.87 1994 Centurion Growth 0.00 2.39 0.00 0.00 0.00 2.39 0.00 0.00 1994 Chowgule 15.00 4.58 0.00 27.00 6.88 4.58 0.00 12.38 1994 Crdcap Asset Mgt 0.00 .32 0.00 0.00 0.00 .32 0.00 0.00 1994 DLF Cement 15.32 0.00 0.00 17.00 15.32 0.00 0.00 17.00 1994 GlobalTrust 0.00 3.19 0.00 0.00 0.00 3.19 000 0°00 1994 Gujarat Ambuja 0.00 8.23 0.00 0.00 0.00 8.23 0.00 0.00 1994 GESCO 0.00 2.03 0.00 0.00 0.00 2.03 0.00 0.00 1994 GKN Invel 0.00 .33 0.00 0.00 0.00 .33 0.00 0.00 1994 GVK 40.00 8.30 0.00 38.74 30.00 8.30 0.00 38.74 1994 India Equipment 0.00 .14 0.00 0.00 0.00 .14 0.00 0.00 1994 India Lease 0.00 .30 0.00 0.00 0.00 .30 0.00 0.00 1994 Indo Rama 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1994 ICICI-IFGL 0.00 .14 0.00 0.00 0.00 .14 0.00 0.00 1994 IL & FS 15.00 0.00 0.00 10.00 15.00 0.00 0.00 10.00 Page 42 Project Appraisal Document Project Title: Andhra Pradesh State Highway Project Country: India Committed Disbursed IFC -- - IFC FY Company Loan Equity Quasi Partic Loan Equity Quasi Partic Approval 1994 Nippon Denro 30.00 0.00 0.00 60.00 0.00 0.00 0.00 0.00 1994 Tata Electric 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1994 Taurus Starsharc 0.00 7.17 0.00 0.00 0.00 7.17 0.00 0.00 1994 TCAMC 0.00 .16 0.00 0.00 0.00 .16 0.00 0.00 1994 TISCO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1995 Centurion Bank 0.00 3.87 0.00 0.00 0.00 3.87 0.00 0.00 1995 Creditcapital VF 0.00 .60 0.00 0.00 0.00 .60 0.00 0.00 1995 EXIMBANK 25.00 0.00 0.00 0.00 25.00 0.00 0.00 0.00 1995 India Equipment 0.00 .33 0.00 0.00 0.00 .33 0.00 0.00 1995 ICICI-SPIC Fine 0.00 .86 0.00 0.00 0.00 .86 0.00 0.00 1995 ISIC 0.00 .32 0.00 0.00 0.00 .32 0.00 0.00 1995 ISB India 0.00 .84 0.00 0.00 0.00 .84 0.00 0.00 1995 Prism Cement 15.00 5.02 0.00 15.00 15.00 5.02 0.00 15.00 1995 Rain Calcining 19.25 5.40 0.00 0.00 6.00 4.72 0.00 0.00 1995 RPG Communicat 0.00 8.30 0.00 0.00 0.00 6.28 0.00 0.00 1995 Sara Fund 0.00 7.02 0.00 0.00 0.00 1.10 0.00 0.00 1995 SRF Finance 15.00 5.00 0.00 0.00 15.00 4.39 0.00 0.00 1996 CVF Oil Gas-AL 8.00 8.00 0.00 0.00 0.00 0.00 0.00 0.00 1996 India Direct Fnd 0.00 7.50 0.00 0.00 0.00 .78 0.00 0.00 1996 Indo Rama 0.00 2.14 0.00 0.00 0.00 2.14 0.00 0.00 1996 Indus II 0.00 5.00 0.00 0.00 0.00 2.00 0.00 0.00 1996 Indus Mauritius 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1996 ITW Signode 0.00 .54 0.00 0.00 0.00 .54 0.00 0.00 1996 Moser Baer 5.70 .60 0.00 0.00 5.70 0.00 0.00 0.00 1996 NICCO-UCO 0.00 .22 0.00 0.00 0.00 .22 0.00 0.00 1996 United Riceland 10.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1996 VARUN 5.67 0.00 0.00 6.00 5.67 0.00 0.00 6.00 1997 CEAT 20.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1997 GVK 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1997 NICCO-UCO 0.00 .13 0.00 0.00 0.00 .13 0°00 0°00 1997 Owens Corning 25.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1997 WIPRO 10.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1997 20TH Century 15.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Portfolio Totals: 648.50 185.79 1.81 260.83 499.13 158.22 1.81 186.21 Pending Commitments 1996 * CESC II -BLINC 0.00 0.00 0.00 37.00 1996 * DEV CREDIT BANK 0.00 1.89 0.00 0.00 1995 * IB VALLEY POWER 50.00 20.00 0.00 0.00 1997 * ITC CLASSIC 20.00 0.00 10.00 0.00 1994 * NEYVELI POWER 30.00 18.00 0.00 150.00 1994 * NIPPON DENRO ISP 0.00 6.00 0.00 0.00 1997 * NIPPON EXPANSION 15.00 6.00 0.00 25.00 1997 * OWENS CORNING 25.00 0.00 0.00 0.00 1995 * SPIC-RGHTS ISSUE 0.00 .86 0.00 0.00 1996 * TARUN SHIPPING 0.00 .80 0.00 0.00 Page 43 Project Appraisal Document Project Title: Andhra Pradesh State Highway Project Country: India India at a glance POVERTY and SOCIAL South Low- India Asia income Development dlamond Population mid-1995 (milions) 929.4 1.243 3,188 GNP per capita 1995 (USS) 350 350 460 Life expectancy GNP 1995 (billions US$) 325.3 435 1,466 Average annual growth, 1990-95 Population (%) 1.8 1.9 1.8 Labor fore (%) 2.1 2.4 1.9 GNP Moat recent estimate (latest year available since 1989) per capita Poverty: headcount index (X of population) Urban populabon (% of total population) 27 26 28 Life expectancy at birth (years) 62 61 63 Infant mortality (per 1,000 hve births) 68 73 68 | Child malnutrition (% of children under 5) 63 62 38 Access to safe water Access to safe water (% 01 population) .. 70 66 Illiteracy (% of population age 15+) 48 51 i -India Gross primary enrollment (% of school-age population) 102 98 105 1nda Male 113 110 112 -Low-income group Female 91 87 98 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1986 1994 1996 Economic ratloa GDP (billions USS) 91.0 214.3 301.2 324.1 Gross domestic investmenVGDP 20.8 23.9 23.2 24.5 Openness of economy Exports of goods and non-factor services/GDP 6.2 6.0 10.9 12.2 Gross domestic savings/GOP 20.4 20.8 21.4 21.8 Gross national savings/GDP 20.8 21.1 22.1 22.7 Current account balance/GDP -0.1 -2.8 -1.1 -1.8 Savings Investment Interest payments/GDP 0.3 0.6 1.4 1.4 Total debt/GDP 15.1 19.1 33.7 28.9 Total debt service/exports 13.1 22.7 27.2 28.7 Present value of debt/GDP .. .. 23.4 .. | Indebtedness Present value of debt/exports .. .. 176.7 1976-54 1985-95 1994 1995 1996-45 (average annual growth) I-ndia GDP (factor cost) 40 5.1 6 3 6.6 6.3 -Low-income group GNP per caprta 1.7 3.1 5.0 4.3 4 8 Exports of goods and nfs" 11 5 11.1 17.2 21.1 12.1 STRUCTURE of the ECONOMY 1976 1986 1994 1996 (% of GOP) Agnculture 40.5 33.0 31.1 29.5 Industry 23.7 28.1 28.0 29.0 20. Manufacturing 16.7 17.9 17.4 18.5 ° Services 35.8 38.8 40.9 41.5 .20 - Prvate consumption 70.2 68.1 68.1 67.9 General govemment consumption 9.4 11.1 10.6 10.3 Imports of goods and non-factor services 6 6 9.1 12.7 15.0 -GOI GOP 197544 1986-95 1994 1996 (average annual growth) Agnculture 2.4 3.6 4.9 0.9 Industry 5 2 5 9 8.3 11 1 N Manufacturing 5.4 5 8 9g0 13 5 20 - Services 4.7 5 7 6.0 73 3 .1- 90 2i 92 91 94 95 Private consumption 4.4 4.7 5.0 5.0 .20 General govemment consumption 6 2 4 2 3.0 3.8 Gross domestic investment 3 7 5.1 19.8 11.7 Imports of goods and non-factor services" 13.3 10.3 28.0 27.2 -Expons - -impons Gross national product 4.0 5.2 6.5 6.1 Note: 1995 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. - Dollar Growth Rates. Page 44 Project ApDraisal Document Project Title: Andhra Pradesh State Highway Project Country: India India PRICES and GOVERNMENT FINANCE 1975 1985 1994 1995 Inflation I%) Domestic prices (% change) Consumer prices 5.7 5.5 10.2 10.2 15 - Implicit GDP deflator -1.S 7.6 11.1 8.0 Govemment finance so 91 92 93 94 9S (% of GDP) Current revenue 23.9 22.6 23.0 Current budget balance 1.5 0.0 0.0 -GDP de -CPI Overall surplus/deficit -11.4 -11.9 -9.0 TRADE (millions USS) 1976 1985 1994 1995 Export and import levels (mill. US$) Total exports (fob) 9,463 26,857 32.789 Tea .. 511 311 350 50.000_ Iron 473 413 518 40.000 Manufactures 5.639 21.088 24.889 309000 Total imports (cif) . 17,298 31.S72 41.582 50.000 Food .1,321 1.464 1,368 a i i . Fuel and energy I .5 .2 ,1 Capital goods 3,503 6,366 8,381 t9 90 91 92 93 94 99 Exportpncaindex(1987=100) 80 118 124 Import pnce index (1987=100) 96 121 132 E.ports oirmports Terms of trade (1987= 100) 83 98 94 _ BALANCE of PAYMENTS 1976 1985 1994 1995 (millions USS) Exports of goods and non-factor services 5.650 12,773 32,760 39.682 Imnoorts of goods and non-factor services 5.990 19.422 38,150 48.536 Resource balance -340 -6.649 -5.390 -8.854 49 90 9. 92 -93 94 9 Netfactorincome -191 -1,553 -4.119 -4.455 Net current traters 470 2.207 6,200 7.478 . Current account balance. before official transfers -61 -5,995 -3.309 -5.830 ' - Financing items (net) 636 6.807 10,167 3.825 Changes in net reserves -575 -812 -6.858 2.005 Memo: Reserves including gold (mill. USS) 2.064 9.730 24.079 20,366 Conversion rate (loca"ULtSS) 8.7 12.2 31.4 33.4 EXTERNAL DEBT and RESOURCE FLOWS 1975 1985 1994 199i_ (millons USS) Total debt outstanding and disbursed 13,708 40,971 101.501 93.69S IBRO 436 2,396 11.i20 9.849 Composition of total debt, 1995 (mill. US$) IDA 2.809 9.750 17,666 17.499 Total debt service 822 3,534 10.257 13.123 IBRD 89 313 1.595 1.713 IDA 24 124 315 357 G A 504rS849 Composition of net resource flows F 3 Official grants 5si 450 472 335 22571 799 Official creditors 1,260 1,424 893 -816 2 374 Pnivate creditors 83 2.276 1.078 3.138 27097 17062 Foreign direct investment 85 106 1.314 2.133 Portfolio equity , 0 0 3.581 2,214 World Bank program Commitments 917 2,882 2.066 1.696 3. DA O -Other m-itlatera F Rri-ate Oisbursements 531 1,375 1.708 1.367 C- IMF G - Shonr-tem Pnncipal repayments 63 157 1,021 1.170 Netflows 467 1,218 687 197 Interest payments 50 280 889 901 Net transfers 417 938 -202 -704 SA2CI and Intemational Economics Department 12126196 IMAGING Report No.: 16517 IN Type: PAD