Document of The World Bank Report No: ICR0000978 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-46220) ON A LOAN IN THE AMOUNT OF US$589.0 MILLION TO THE REPUBLIC OF INDIA FOR THE GRAND TRUNK ROAD IMPROVEMENT PROJECT March 31, 2009 Sustainable Development Department India Country Management Unit South Asia Region CURRENCY EQUIVALENTS (Exchange Rate as on 02/28/2009) Currency Unit : Indian Rupee (INR) Indian Rupee 1.00 : US$0.02 US$1.00 = INRs.49.80 FISCAL YEAR April 1 ­ March 31 ABBREVIATIONS AND ACRONYMS ABP Allahabad Bypass Project IRR Internal Rate of Return ADB Asian Development Bank ISR Implementation Status and Results Report ATMS Advanced Traffic Management System JBIC Japanese Bank of International Co-operation BOT Build-Operate-Transfer LA Land Acquisition CAS Country Assistance Strategy LMNHP Lucknow-Muzaffarpur National Highway Project CMU Corridor Management Unit M&E Monitoring & Evaluation COS Committee of Secretaries MOSRTH Ministry of Shipping, Road Transport and Highways CSC Construction Supervising Consultant MOST Ministry of Surface Transport DGM Deputy General Manager MTR Mid-term Review DPR Detailed Project Report NH National Highway DRB Dispute Resolution Board NHAI National Highways Authority of India EIRR Economic Internal rate of Return NHDP National Highways Development Program EMP Environmental Management Plan O&M Operation & Maintenance EOP End of Project PAD Project Appraisal Document EOT End of Project Target PDO Project Development Objectives ERR Economic Rate of Return PIU Project Implementation Unit ESDU Environmental and Social Development Unit PPP Public-Private Partnership ESMS Environmental & Social Mgt. System PSR Project Status Report FMS Financial Management System PWD Public Works Department GBWS Gautam Buddha Wild Life Sanctuary QAG Quality Assurance Group GOI Government of India QCBS Quality & Cost Based Selection GQ Golden Quadrilateral RAP Resettlement Action Plan GTRIP Grand Trunk Road Improvement Project RIS Road Information System HDM Highway Design and Maintenance Standards TNHP Third National Highways Project Model ICRR Implementation Completion & Results Report VOC Vehicle Operating Cost IRI International Road Roughness Index Vice President: Isabel M. Guerrero Country Director: N. Roberto Zagha Sector Manager: Michel Audigé Project Team Leader: Rajesh Rohatgi ICR Team Leader: Nupur Gupta INDIA Grand Trunk Road Improvement Project CONTENTS Page Data Sheet A. Basic Information ........................................................................................................ i B. Key Dates .................................................................................................................... i C. Ratings Summary ........................................................................................................ i D. Sector and Theme Codes............................................................................................ ii E. Bank Staff ................................................................................................................... ii F. Results Framework Analysis ...................................................................................... ii G. Ratings of Project Performance in ISRs ................................................................... iv H. Restructuring ............................................................................................................ iv I. Disbursement Graph ................................................................................................... v 1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes ............................................... 4 3. Assessment of Outcomes........................................................................................... 10 4. Assessment of Risk to Development Outcome ......................................................... 14 5. Assessment of Bank and Borrower Performance ...................................................... 14 6. Lessons Learned ........................................................................................................ 16 Annex 1. Project Costs and Financing (Revised) .......................................................... 20 Annex 2. Outputs by Component .................................................................................. 21 Annex 3. Economic and Financial Analysis ................................................................. 23 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............. 25 Annex 5. Socio-economic Impact of National Highway on Rural Population ............. 27 Annex 6. Stakeholder Workshop Report and Results ................................................... 28 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR...................... 36 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 44 Annex 9. List of Supporting Documents ....................................................................... 45 Project Map: IBRD 31387 A. Basic Information Country: India Project Name: Grand Trunk Road Improvement Project Project ID: P071244 L/C/TF Number(s): IBRD-46220 ICR Date: 03/31/2009 ICR Type: Intensive Learning ICR Lending Instrument: SIL Borrower: GOVERNMENT OF INDIA Original Total USD 589.0M Disbursed Amount: USD 487.1M Commitment: Environmental Category: A Implementing Agencies: National Highways Authority of India Cofinanciers and Other External Partners: B. Key Dates Process Date Process Original Date Revised/Actual Date(s) Concept Review: 01/09/2001 Effectiveness: 11/21/2001 Appraisal: 02/14/2001 Restructuring(s): 12/27/2006 Approval: 06/21/2001 Mid-term Review: 05/12/2006 10/28/2003 Closing: 12/31/2006 06/30/2008 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Unsatisfactory Risk to Development Outcome: Substantial Bank Performance: Moderately Unsatisfactory Borrower Performance: Moderately Unsatisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Unsatisfactory Government: Moderately Satisfactory Implementing Quality of Supervision: Moderately Satisfactory Moderately Unsatisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Unsatisfactory Moderately Unsatisfactory Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation Performance Indicators QAG Assessments (if any) Rating Potential Problem Project at any time (Yes/No): Yes Quality at Entry (QEA): None Problem Project at any time (Yes/No): Yes Quality of Supervision (QSA): None Moderately DO rating before Closing/Inactive status: Satisfactory i D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 4 4 Information technology 2 2 Media 1 1 Roads and highways 93 93 Theme Code (Primary/Secondary) Pollution management and environmental health Secondary Secondary Technology diffusion Primary Primary E. Bank Staff Positions At ICR At Approval Vice President: Isabel M. Guerrero Mieko Nishimizu Country Director: N. Roberto Zagha Edwin R. Lim Sector Manager: Michel Audigé Vincent Gouarne Project Team Leader: Rajesh Rohatgi Zhi Liu ICR Team Leader: Nupur Gupta ICR Primary Author: Clell G. Harral F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) 1. To reduce transport constraints on national economic activity. 2. To improve institutional capabilities to manage road programs, assets, and services on a more commercial basis. Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s) Actual Value Original Target Formally Baseline Achieved at Indicator Values (from Revised Target Value Completion or approval documents) Values Target Years Indicator 1 : Travel time along Delhi-Kolkata national highway corridor Value quantitative or Qualitative) 4 to 5 days Reduced by 25-30% 3 to 4 days 2 to 3 days Date achieved 05/30/2001 12/31/2006 12/31/2006 06/30/2008 Comments (incl. % achievement) The project overachieved the specified target Indicator 2 : Truck operating cost along Delhi-Kolkata national highway corridor Reduced by 10% in Value quantitative or Qualitative) Rs. 11 per km Rs. 9.90 per km Rs. 15.84 per km real terms 06/30/2008 Date achieved 05/30/2001 12/31/2006 12/31/2006 ii Actual Value Original Target Formally Baseline Achieved at Indicator Values (from Revised Target Value Completion or approval documents) Values Target Years Truck operating costs have increased by 44% mainly on account of the large Comments (incl. % achievement) increases in the price of trucks and some differences in computation methodology Indicator 3 : Incidence of road deaths on project roads Value quantitative or Qualitative) 715 Reduced by 20% 572 838 Date achieved 12/31/2005 12/31/2006 12/31/2006 07/31/2007 This indicator has been grossly underachieved. The road fatalities have grown Comments (incl. % achievement) 17% instead of coming down. National highways maintained under contract with private sector and managed Indicator 4 : by Corridor Management Units 4,304 km on private Value quantitative or contracts under CMU Nil 1,200 km Qualitative) plus 808 km under BoT contracts Date achieved 05/30/2001 12/31/2006 11/30/2008 Comments (incl. % achievement) The target has been exceeded manifold. (b) Intermediate Outcome Indicator(s) Actual Value Original Target Formally Baseline Achieved at Indicator Values (from Revised Target Value Completion or approval documents) Values Target Years Indicator 1 : ERR of the project roads Value (quantitative or Qualitative) Nil Above 26% 21% Date achieved 05/30/2001 12/31/2006 06/30/2008 Comments (incl. % achievement) The ERR was below target levels. Indicator 2 : Corridor Management Units (CMUs) established 2 new CMUs (in addition to 2 pilot 4 (due to six laning 5 Value (quantitative CMUs planned of the existing 9 Nil or Qualitative) under Third CMUs have been re- National Highway designated PIUs Project) Date achieved 05/30/2001 10/28/2003 11/30/2008 Comments (incl. % achievement) The target of 2 CMUs in addition to the existing 2 CMUs was met. Expanded public-private partnership in promoting private investment on large Indicator 3 : BOT projects Public-private 86 PPP contracts partnership totaling 5607 km have Value (quantitative successfully executed 0 been awarded. 10 or Qualitative) to support large-scale contracts (over 50 km) (over 50 km) BOT have been completed. projects Date achieved 05/30/2001 12/31/2006 06/30/2008 Comments (incl. % achievement) The objective of promoting private investment was overwhelmingly achieved. iii G. Ratings of Project Performance in ISRs Date ISR Actual Disbursements No. DO IP Archived (USD millions) 1 06/29/2001 Satisfactory Satisfactory 0.00 2 12/20/2001 Satisfactory Satisfactory 5.89 3 06/23/2002 Satisfactory Satisfactory 25.96 4 12/20/2002 Satisfactory Satisfactory 46.17 5 06/25/2003 Satisfactory Satisfactory 81.32 6 12/15/2003 Satisfactory Satisfactory 94.79 7 06/22/2004 Satisfactory Unsatisfactory 126.98 8 12/17/2004 Satisfactory Satisfactory 184.71 9 05/25/2005 Moderately Satisfactory Moderately Satisfactory 246.58 10 11/23/2005 Moderately Satisfactory Moderately Satisfactory 305.86 11 05/31/2006 Moderately Satisfactory Moderately Satisfactory 349.28 12 10/31/2006 Moderately Satisfactory Moderately Satisfactory 386.58 13 05/14/2007 Moderately Satisfactory Moderately Unsatisfactory 426.85 14 09/28/2007 Moderately Satisfactory Moderately Satisfactory 437.93 15 06/30/2008 Moderately Satisfactory Moderately Satisfactory 476.94 H. Restructuring (if any) ISR Ratings at Amount Restructuring Board Approved Restructuring Disbursed at Reason for Restructuring & Key Date(s) PDO Change Restructuring in Changes Made DO IP USD millions (a) Cancellation of the corridor Management & Road Safety Component: Changes in conditions surrounding the implementation of the Corridor Management and Road Safety Works Component due to GOI's decision to widen GQ to six lanes. (b) Cancellation in the PPP Component: NHAI has already got a full fledged PPP program in 12/27/2006 MS MU 386.58 their ongoing development program owing to GoI policy change to undertake NHDP development through PPP rather than EPC. (c) Cancellation of the Asset Inventory Study: There was significant overlap between the ongoing Road Information Systems study and implementation and this study. iv I. Disbursement Profile v 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal Macro-economic and sector context. The Grand Trunk Road Improvement Project (GTRIP) was appraised in February 2001 at a time when India's economy was accelerating from earlier growth rates of 5% toward 8% per year, and per capita gross national product was about US$ 470, with some 35-40 percent of the country's nearly one billion people living below the national poverty line. Prospects for expanding economic growth were strong, but inadequate transport infrastructure was increasingly constraining expansion. The national highways, which carried roughly 40 percent of the road traffic while accounting for about 1.7 percent of the road network, were severely capacity constrained and suffered from poor road condition. The Government of India (GOI) recognized that the poor performance of the national highway system had been a major drag on the growth of the national economy. Following the recommendations of the India Infrastructure Report 1996, GoI launched the National Highways Development Program (NHDP) consisting of four laning of 13,000 km of trunk highways connecting the four major cities in the country (popularly called the Golden Quadrangle), the East-West and North-South corridors, and the major ports. The newly created National Highway Authority of India (NHAI) was charged with the responsibility for implementing the initial phases of the NHDP and resources were identified for the funding of the program. In addition to the serious capacity constraint on the national highway network, the following main sector issues were recognized in the PAD: (i) worsening road safety amid growing motorization; (ii) poor management of infrastructure services by the public sector; (iii) weak enabling environment for private sector participation in road development and financing; (iv) outdated construction technologies and capacity constraints in India's private road construction industry; and (v) weak institutional capacity to address highway project related social and environmental issues. The World Bank in coordination with ADB and JBIC adopted a corridor-wide approach of providing assistance to the highway program. Focusing on a particular corridor was believed to have the advantage of effectively addressing the identified issues of transport efficiency, corridor management and road safety, environment and social, etc. As such the Bank focused on the 1000 km (Agra to Barwa Adda) along National Highway 2 between Delhi and Kolkata, and adopted a programmatic approach to supporting NHDP through a series of loans. The Third National Highways (TNHP), which financed four- laning of those segments (some 475 km) of the NH-2 corridor which were the first to be ready for implementation, was the Bank's first project with NHAI, appraised a year earlier. The GTRIP project financed the upgrading of the remaining sections (420 km), along the same NH2 corridor, except one (Allahabad Bypass) which was to be considered for funding under the next project. GTRIP and TNHP are thus highly complementary to one another, constituting integral, overlapping components of the same inter-city highway corridor and institutional development program for NHAI. The Bank subsequently also funded a section of the East-West Corridor (485 km) between Lucknow and Muzaffarpur, the Lucknow Muzhaffarpur National Highway Project (LMNHP). Country Assistance Strategy (CAS). A key objective of the Bank's Country Assistance Strategy (CAS) at the time the GTRIP project was approved was to remove highway infrastructure bottlenecks to poverty reduction and private sector led growth. The project was also specifically designed to address the following two areas of the CAS: (a) improving government capability and effectiveness to deliver core public services that are vital for economic growth and poverty reduction; and (b) enabling the environment for private sector investments in infrastructure. 1 Rationale for Bank Assistance. The Bank was in a unique position to respond to the opportunities and challenges faced by the NHAI in its early years by (a) drawing on its broad experience with international best practices as well as the lessons learned from previous and ongoing road projects in India being executed primarily by the highway authorities of the respective states under a coordinating role played by the central Ministry of Shipping, Road Transport, and Highways (MOSRTH); (b) using its lending and advisory capabilities to leverage the institutional and policy reform process, (c) ensuring that social and environmental concerns would be fully reflected in project implementation, and (d) supporting NHAI's efforts to attract international road consultants and construction contractors to work in India in order to promote competition and technological improvement of India's construction industry. 1.2 Original Project Development Objectives (PDO) and Key Indicators Objectives Key indicators by EoP (a) to reduce transport constraints on 25-30% reduction in travel time national economic activity 10% reduction in truck operating costs 20% reduction in road deaths (b) to improve institutional 20% reduction in road deaths capabilities to manage road About 1200 km of national highways maintained programs, assets, and services on a under contracts with private sector and managed by more commercial basis the Corridor Management Units As GTRIP was part of the programmatic support being provided by the Bank and the project development objectives were the same as those for TNHP. In addition to supporting the above two objectives, the GTRIP project was intended to take a `significant further step' in institutional development with respect to: reducing the risks of road accidents and improving traffic efficiency; and promoting private sector participation in road financing. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification The PDO were unchanged. 1.4 Main Beneficiaries The PAD identified a wide spectrum of beneficiary groups, including users of the national highways (both long-distance and local), roadside communities and businesses, and the cities, towns, and rural areas directly served by the project roads. Particular attention was called to the relatively high incidence of poverty in the project corridor, which generally increased as one moved from west to east from Uttar Pradesh into the states of Bihar and Jharkhand, and the likely poverty reducing impact of the highway on the local economy and population. 1.5 Original Components (as approved) Component 1: Upgrading of 420 km of NH2 (total cost US$685.3 million). Highway upgrading of 420 km of NH-2 to four or six lanes including construction, supervision, land acquisition and resettlement, and environmental management. 2 Component 2: Road Safety and Corridor Management Works (US$20.25 million). A program of road improvements, including road safety audits, specifically targeted at supporting improved methods for reducing accidents and a program of maintenance works to introduce alternative contracting methods and strengthen maintenance management practices. Component 3: Public-Private Partnership in Road Concession (US$25.55 million). Public-Private- Partnerships in road concession, including technical assistance, funding NHAI's share of public-private financing of pilot BOT project Component 4: Institutional Strengthening (US$19.02 million). Institutional strengthening, including (a) Social and environmental capacity building; (b) Road safety capacity strengthening including training of trainers and dissemination of road safety manual, public education and campaign through mass media, and implementation of the comprehensive road safety action plan; (c) Computerizing the Golden Quadrilateral national highway asset inventory; (d) cross-border road transport efficiency study; (e) Corridor Management Units related consultant services; (f) Project preparation and sector studies. 1.6 Revised Components Road Safety and Corridor Management Works Component. Funds under this component had to be reallocated, owing to the Government of India's policy decision to widen the entire GQ to six lane on BOT basis. The road safety audits were conducted, and three pilot stretches identified and bids invited for undertaking hybrid performance based maintenance contracts when the policy decision was taken. The corridor management and safety works under this component could therefore not be implemented on project roads, instead, alternate sections on the national highway network which were unlikely to be widened for some years were identified. A hybrid O&M contract was piloted on a 180 km section of NH5 through NHAI's own funds. The ATMS which was to be implemented on 3 sections was finally not taken up. Public-Private Partnerships in Road Concessions. This component was dropped from the loan during a project restructuring in 2006, as NHAI had already achieved a full fledged PPP program in their ongoing development of NHDP. GoI's policy change in 2005 necessitated a large scale shift in the method of contracting for further NHDP works from EPC to PPP basis. As a result NHAI developed a significant PPP program and the pilot with the Bank was no longer required. Another reason for not going ahead with this component was that NHAI found the Banks procurement rules too cumbersome for PPP projects and there were concerns that the program would get delayed. By mid 2008, 5607 km of national highways had been concessioned on BOT Toll and BOT Annuity. Institutional Strengthening: National Highway Asset Inventory. The National Highway Asset Inventory study was deleted from the project due to overlap with planned implementation of Road Information System (RIS). 1.7 Other Significant Changes Schedule. Due to delays in completion of road construction components, the loan closing date was was extended twice, first from 12/31/2006 to 12/31/2007, and subsequently to 06/30/2008 resulting in a total extension of 18 months. Funding Reallocations/Cancellations (a) US$12.53 million of loan funds were cancelled in May 2006 following the restructuring of the project. While the entire component 3 and most of component 2 were to be dropped (cumulative 3 savings of US$36.58 million), actual cost of component 1 involving construction had gone up (shortfall of US$24.05 million), therefore, after readjustments for the increased costs US$12.53 million of loan funding was cancelled. (b) US$75 million was cancelled in August 2008 and another US$14.35 in October 2008 following project closure as NHAI was unable to disburse the funds in the given time period. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design, and Quality at Entry Background analysis, project preparation and design. Bank highway projects initiated before the mid- 1990s had suffered, from a series of difficulties, including (a) poor quality at entry; (b) weak institutional capacities for project management, contract and consultant services administration; (c) inexperience in the Bank's procurement methods; (d) inadequate inter-agency coordination; (e) inordinate delays in handing over project sites; (f) weak contractor capabilities and inadequate consultant capacity; (g) excessive delays due to weak dispute resolution and decision mechanisms and also due to belated payments to contractors; and (h) lack of awareness and low degree of acceptance toward integration of environment and social issues in technical design. In cognizance of these issues efforts were made during project preparation to address these to varying degrees. Stronger engineering preparation involving a high degree of readiness for implementation was to be achieved prior to loan approval, with all engineering designs completed and bids received. However, there were gaps in the due diligence exercised on the designs prepared and contractor mobilization prior to land acquisition resulting in many costly delays later. Efforts were made to bring in latest techniques and best practices through international consultants and contractors. However, the industry level issues and local practices proved a deterrent. Introduction of supervision consultants, which were expected to mitigate the weak project management capacity of the government agency, was not as effective. Focus on processes for environmental assessment, stakeholder consultation, land acquisition and resettlement, and government clearances. An Environment & Social Development Unit (ESDU) was set up within NHAI in this context. State project coordinating committees in Bihar, Jharkhand and Uttar Pradesh were established to expedite preconstruction activities. Emphasis on institutional development of the nascent NHAI. A study on institutional development of NHAI, corridor development and PPP were initiated early on and a Project Financial Management System (FMS) was developed for NHAI. However, inadequate attention was given to the staffing needs of the organization and development of requisite contract management and monitoring capability while being a `lean and mean' organization. Participatory processes. The participatory process adopted during project preparation and implementation included formal and informal consultations, public meetings and workshops with key stakeholders. An advisory group of external stakeholders was also formed to periodically review the overall highway development program and the project's strategy. Stakeholder consultations were held for the first time on land acquisition and compensation related matters. NHAI staff, consultants and contractors were sensitized extensively on environment & social issues through series of training workshops during project preparation. 4 Workshops were conducted with the construction industry to identify and address the issues plaguing the sector. Project preparation and design was in coordination with other donors, ADB and JBIC. While the level of consultation initiated in these second generation national highway projects was of a much higher level than before, they failed to consult with local communities and local authorities at the stage of the detailed design work necessitating costly revisions of the project design later during project implementation. Risks and mitigation measures. A comprehensive list of risks classified into eight groups was explicitly identified and assessed in the PAD. All risks were rated as moderate except for "delays in procurement and award of contracts", which was rated as negligible, in light of the strong efforts made to ensure project readiness during preparation of GTRIP. In the event, the assessment of risks, particularly risks related to consultant and contractor performance and consequent project delays, proved too optimistic, as also the risk related to weak commitment to policy and institutional reforms. Deterioration in public security, putting road workers and their equipment at risk in Bihar and Jharkhand, a risk unforeseen at project entry, further hampered project works in those states. As events unfolded, the planned mitigation measures were not successful in preventing recurrence of earlier problems, and dispute resolution mechanisms proved ineffective in reaching timely settlements. The GTRIP, like TNHP and earlier highway projects, still suffered from substantial delays. 2.2 Implementation Implementation of the project received close attention, and substantial support, from the Bank's project staff. Progress was rated as `satisfactory' initially, but there was growing concern re slow implementation progress on both physical works and institution building. In the June 2004 ISR the rating was downgraded to unsatisfactory due to continued limited progress on the highway widening components (only 27% work progress in 72% of contract period), institutional strengthening components and lack of progress on the PPP and corridor management and road safety components. The project then rebounded to a satisfactory rating due to progress on the PPP and institutional front, but subsequently declined to moderately satisfactory rating for the remaining period (as a result of a change in the Banks rating format), except for May 2007 when it received a moderately unsatisfactory implementation rating due to continuing delays in implementation and lack of action by NHAI management. The following sections outline the key factors affecting project implementation. Factors Contributing to the Project's Success (a) The project benefited from dedicated NHAI project directors in the Project Implementation Units (PIUs), despite relatively high turnover of these key officials. Interviews with selected directors during ICR preparation showed a generally high level of professionalism, interest in the project, and appreciation of the Bank team's experience and technical support. (b) The persistent attention, constructive critique, and supportive attitude of Bank staff and consultants were important supportive factors. Factors contributing to the Project's Implementation Problems The project's main problems were delays in the implementation of physical and institutional components resulting in significant time and cost overruns. These problems resulted from factors within the control of NHAI as well as changes in sector developments outside its control. 5 The factors within NHAI's control were: (a) poor design review and evaluation procedures, particularly at the critical stage of the Detailed Project Report (DPR), frequent errors which set the stage for subsequent, protracted delays for necessary re-design, re-approval, additional land acquisition, tree cutting, utilities relocation, and resettlement and PAP rehabilitation. For example in Package 2B, seven new underpasses, a rail over bridge and an additional span on another bridge were added. In Package 4C the number of culverts increased by 50%, the span length of the canal bridge was changed and the land handed over did not match the alignment design and the alignment had to be shifted about 10 meters.1; (b) a centralized, hierarchical NHAI decision making system which excessively curtailed the authority of either the NHAI Project Director or Construction Supervising Consultant (CSC) to approve even minor cost overruns or necessary design variations prepared by the contractors or the CSC itself, necessitating constant referrals to NHAI headquarters, where decisions often were delayed for prolonged periods awaiting higher level approvals; (c) in the case of disputes, an excessive tendency of NHAI and/ or the contractor to reject the recommendations of Dispute Resolution Boards, leading to a high frequency of appeals up the NHAI chain of command, Arbitration, and even beyond to the Courts. This not only further protracted settlement of necessary actions, but also absorbed a disproportionate share of the finite managerial and financial capacities of India's contracting and consulting industries as well as those of NHAI itself. Serious cashflow problems resulting out of this affected contractors performance. The total number of disputes outstanding with the GTRIP contract packages by February 2009 were 72, mostly pending at Arbitration or Courts; Dispute Cases in GTRIP (as of February 15, 2008) Total Total Value DRB Arbitration Courts No Rs. Mn Total 0 37 35 72 2568.4 (d) inadequate NHAI staffing to monitor and coordinate with the participating state entities in key activities such as land acquisition, tree cutting, relocation of utilities, resettlement and rehabilitation. These were one of the major sources of delay during implementation. An inhouse study2 found that the average time taken for these activities on the NH2 contracts was 2-3 years; the primary reason for delays in land acquisition was poor surveys and faulty LA maps by the design consultants. Average Time Taken in months 35 33 32 31 29 30 25 25 20 15 10 5 0 LA Electric Telecom Water Tree Poles Poles Points cutting 1 Design and Construction Review of National Highway Projects ­ Lessons Learned (2007) 2 Quantification of Time Overrun in Pre-Construction Activities of National Highway Packages Funded by World Bank and Asian Development Bank (2007) 6 (e) the short tenure of NHAI staff, who are there for limited term assignments, not long-term careers, limiting institutional as well as personal memory of the staff as to what has proven good, bad, or merely acceptable practice, contributing to the protracted decision making processes. At the same time, ongoing understaffing at PIUs and key positions at the HQ was a problem area; (f) contractor performance issues in many cases driven by inadequate staffing, constant staff turnover and gaps in critical positions, such as bridge experts; and (g) the low priority accorded to institution building components in the organization and staffing of NHAI oriented to road building, not institutional development and policy related issues. The factors outside of NHAI's control included: (a) NHAI's constantly increasing workload due to rapidly expanding responsibility for development of the national highway system; (b) constraints in India's construction industry re finance, experienced management, skilled workforce, and equipment; (c) deterioration in law and order in the states of Bihar and Jharkhand during project implementation, including disruption of work activities, violent attacks, and kidnappings, exacerbating the difficulties in retaining contractor staff on site; (d) a political decision by the GOI to impose a further widening of the entire GQ from 4 to 6 lanes along existing alignments under BOT concessions or other PPP modality of execution, even before the works for 4-laning and arrangements for post-construction Road Safety and Corridor Management Units (CMU) previously agreed for the GTRIP project were completed. This necessitated adaptation of remaining works in the GTRIP contracts in anticipation of further widening, and led to cancellation of the Road Safety and Corridor Management Component of GTRIP and the resultant poor road safety situation along the corridor; (e) the shift to PPP also led to the dropping of the PPP component with funds being reallocated. However, the radical shift in thinking away from public EPC funding and procurement as the primary modality for development of the national highways to PPP diverted attention from resolution of the problems relative to EPC modalities. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization Design. While the outcome indicators for the project were adequate for measuring the achievement of the physical development objective-- the indicators for the second objective, NHAI's institutional capabilities to manage road programs, assets, and services, were less effective as they did not capture many of the important aspects of efficient project delivery and management and user responsiveness. With the change in the Bank format from output indicators to intermediate outcome indicators (IO), three of the fourteen output indicators were adopted as IO indicators for measuring the component wise outcomes; (i) ex poste economic rate of return of project roads, (ii) two new CMUs established, and (iii) PPP's successfully executed to support large scale BoT projects. Implementation and Utilization. With the exception of the number of road km being maintained through CMU contracts, the other three indicators, time savings, vehicle operating cost (VOC) savings, and accidents were not monitored by NHAI. Since the projects were under construction this made collection of this data on a regular basis impractical. However, even for key milestones such as midterm review and project completion, this data had not been collected. The omission of regular monitoring and up-to-date reporting of road condition and accidents, reflecting failure to operationalize the Road Information System (a key component of the earlier TNHP project), is a matter of serious concern. There is urgent need to implement comprehensive physical measurements and 7 reporting of road condition on a regular basis for all major elements of the national highways, beginning, as a matter of priority, with the recently upgraded NHDP Phases I and II sections. Modern road asset management systems require initial baseline data on road conditions as well as close tracking of the subsequent behavior of those measures over time in order to avoid premature pavement failure and optimize the balance between routine road maintenance and far more costly periodic pavement strengthening interventions. If properly implemented, these measures will save India many thousands of Crores of Rupees over the next decade, money which could be far more productively spent on further modernization of its still limited national highway networks. In the absence of a proper system of road condition surveys and timely management reporting, the large investments in NHDP I and II, including the TNHP and GTRIP projects, must be considered at risk. The view, that these risks would somehow be avoided by the movement to concession major segments of the national highways is misguided. Experience with concessions worldwide demonstrates that it is essential for public authorities to regularly monitor the performance of concessionaires, wherever possible by quantitative measurements, not only to ensure contractual compliance (particularly during the later years of the concession period when essential periodic maintenance requires heavy capital outlays), but also to provide justification to the public for any increases in tolls that may, on occasion, be necessitated. 2.4 Safeguard and Fiduciary Compliance Safeguards The Bank closely monitored the various safeguards measures, and compliance ratings were frequently adjusted (ranging from S to U and back again) in response to observed conditions, particularly for involuntary resettlement, environmental management, and occasionally natural habitats issues. Identified issues were normally resolved quickly, and the Bank's persistent surveillance on these issues should be credited with substantial improvements that otherwise almost surely would not have taken place. The project closed with an overall social safeguards rating of moderately satisfactory. By the middle of 2008, the R&R activities were largely complete. Five hundred and ninety-nine hectares of land had been acquired and all titleholders of land had received compensation except for households that had: (a) requested higher compensation from the courts; and (b) the claimants whose land ownership was in dispute. HIV/AIDS initiatives were also successfully launched. Under GTRIP, instances of borrow areas being developed as water bodies with recreational facilities (Packages II C, III C), enhancement of religious structures and archeological monuments (Packages IV B, II B), demonstrates some of such best practices of environmental management by the project. A chronic problem, however, was the absence of environmental officers on site, and in the final rating at project closing overall safeguard compliance was lowered to moderately unsatisfactory, due to recurrent failure of contractors to deploy environmental officers on site, discontinuous and inadequate environmental management of camps and plant sites, and safety measures during construction. The specific capacity building measures which were undertaken to strengthen the ESDU at NHAI to handle land acquisition, resettlement, rehabilitation and environmental issues had attained partial success. A number of training programs were conducted both at HQ and field level for better implementation of social and environmental aspects of the projects. The Environmental and Social Management System developed under the GTRIP to guide NHAI on social and environment aspects has yet to be adopted. 8 Fiduciary Aspects Financial Management. Financial management was also closely monitored. It was rated Satisfactory in the initial years, but the rating subsequently oscillated between S and U in response to Bank observations and NHAI responses as a result of delayed audit reports, repetitive audit observations in the Entity Audit Report and the quality of internal audit. NHAI was found to have serious capacity constraints in Financial Management especially at the PIUs. Significant staffing issues, including low levels of staffing and high turnover due to organizational policies, has affected the quality of accounting and reporting and the delays in procurement and implementation of ERP software have not helped. Procurement. The procurement of works, goods and equipment, consulting services and training component appears to have taken place in accordance with the Bank guidelines. For civil works, International Competitive Bidding was the preferred form of procurement, while for most of the consulting services Quality and Cost Based Selection criteria applied. Legal Covenants. NHAI complied with the covenants in the project's legal agreements except submission of an annual report on the condition of NHAI's assets and projected user costs, which may have been inappropriate given that the network was under construction rendering such surveys meaningless. 2.5 Post-Completion Operation/Next Phase At loan closing, after two project extensions, 6 out of 7 civil upgrading contacts being funded under the GTRIP loan had been substantially completed, and the contractor on the 7th contract had also resumed work with completion of three bridges being the main physical works outstanding, while the original physical target of 420 km of NH-2 to be widened to four lanes had been achieved.3 However, progress on the institutional development components was far less advanced. Road safety and corridor management. In the absence of the Road Safety & Corridor Management Component originally planned but subsequently cancelled, the arrangements observed by the ICR mission to meet the interim needs for road maintenance and particularly for traffic management, signage, and safety appear seriously deficient throughout much of the GTRIP-TNHP corridor. This matter should be taken up with NHAI management as a matter of high priority. The quality of road pavements and state of maintenance observed by the ICR mission was notably deficient in several sections, particularly in sections IVA and IVC. Road Information System. The RIS software developed under the TNHP project once operationalized could provide an invaluable tool in managing assets and operations of the national highway network, pinpointing problems quickly, and, when coupled with other modern tools such as HDM-4, helping find the most efficient solutions. It is, however, an empty shell in its present form, without the necessary data updating. It is critical for NHAI to invest in the relatively small cost of regular data collection in order to reap the much larger benefits of efficient management of such a large road network. Poverty & Highway Development Study. The socio-economic baseline study constituting the first stage of the effort to measure the impact of the inter-city highway widening on poverty and the lives of the rural population was completed. As this loan is now closed and the follow on survey due on project 3 The ICR prepared by NHAI (11/06/2008) rated 4 sections (IC, IIB, IVC, VB) `substantially completed', two other sections (IA, IB), respectively, 97.67% and 95.5% completed, while IVA was only 88.8% completed. 9 completion takes over a year, funding for the follow-up survey has been budgeted within the ongoing Lucknow-Muzaffarpur National Highway Project. Safeguards Management. Although the GTRIP loan is closed, NHAI still must comply with the agreed EMPs and RAP where work is ongoing. Issues of (i) satisfactory closure of camp sites rehabilitation of borrow areas and adequate attention to safety measures, (ii) adoption of the Environment & Social Management Manual, and (iii) impact assessment of the Gautam Budh Sanctuary EMP (now being taken up under the Allahabad Bypass Project) need to be tended to. Project Financial Management System. As noted above, procurement and implementation of the comprehensive ERP financial management system and addressing the serious staffing issues should be expedited. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation The projects objectives continue to be relevant under the new Country Assistance Strategy 2009-12. The new CAS prioritizes removal of infrastructure bottlenecks to help sustain rapid and inclusive growth; improve service delivery; focus on innovative public-private partnerships (PPPs); and attention to India's laggard states. GTRIP addressed all of these priorities. 3.2 Achievement of Project Development Objectives Objective 1: Reduce transport constraints on economy and reduce transport costs With the upgradation of 420 km of highway from two to four lane the project achieved this objective. The increased capacity of the highway helped reduce congestion and improve traveling speeds resulting in significant savings in travel time for road users in the Delhi-Kolkata section. The average journey time reduced from 5 days at the start of the project to two about 3 days at project close, exceeding the three and a half day target. This was perhaps also the most highly rated benefit of the project by various beneficiaries during the stakeholder workshop. However, traffic congestion still plagues inter-city drivers as they enter or exit the major cities and when they cross the many small villages that were not bypassed, thus reducing the benefit of increased speeds on the inter-city segments. The second indicator of a reduction in travel cost was not achieved. The related cost of truck transport has increased from a baseline of Rs.11 per truck-km to Rs.15.6 per truck-km, a much higher cost than the planned target of Rs.9.9 per truck-km. This can be attributed to the differences in the HDM3 and HDM4 models used at appraisal and EoP regarding vehicle technology assumptions, and the significant escalation in vehicle prices in recent years. 10 Road Fatality Rates on the NH2 in state of Uttar Pradesh 1600 1231-1406* 1097 1140 1200 838-867* 2005 715 741 800 2006 2007 400 0 Fatalities Injurie s * December 2007 estimates derived from August 2006-July 2007 estimate and extrapolation Finally, the road safety situation appears to have deteriorated instead of improving. Fatality rates increased by 17-21%4 on project roads instead of the target of a 20% decrease (the average fatalities per km grew from 0.95 per year to 1.11 per year). The fatality rates had increased by 52% on NH2 in the state of West Bengal between 2005-07, which was not part of the Bank funded projects. Even when considering fatalities relative to the average daily traffic (ADT), the situation does not improve significantly. The ADT increased from about 8838 vehicles in 1998 to 12659 vehicles in 2008. For comparison with available fatality data for 2005-07, even after assuming that only 50% of the 1998-08 traffic growth had occurred by 2005, the fatality rate still shows an increase of 0-3% instead of a decline. This is an outcome of poor highway design, which tended to divide road side communities without adequate access, as well as poor traffic management during and after construction. The wider roads have encouraged faster speeds than may be prudent given the completely random and uncontrolled movement of animals and pedestrians throughout the roadway. Construction site safety is also a growing concern given the incidence of accidents such as the one at Sone Bridge on Package 4C. In terms of the intermediate outcome indicators, the lower achieved ERR of 21% compared to a target of above 26% is a reflection of erosion of benefits on account of time overruns. Objective 2: Improve institutional capabilities to manage road programs, assets and service in a more commercially oriented manner The achievement of this objective was mixed. NHAI's capacity in managing procurement, social and environmental issues and private participation was considerably enhanced. However, the road safety situation as already discussed has become worse. The outcome of 1200 km of national highways under private maintenance was achieved well before the end of project. By project end some 4304 km of highways were under maintenance contracts under the CMU. While this outcome was overachieved manifold, the lack of a systematic approach to maintenance, a non operational RIS, raises doubts about the institutional capacity for asset management. Poor maintenance is already giving rise to premature maintenance problems and in some instances to severe potholing along the corridor. Physical measurements of road conditions of the upgraded GTRIP cum TNHP corridor in May 2008, revealed that the average International Road Roughness Index (IRI) for the corridor was 3.5 with a minimum of 3.2, inconsistent with international norms for recently constructed national highway pavements. The large time and cost overruns being incurred by NHAI suggest weak capacity for managing road programs. Neither the infrastructure nor its users are well protected currently. The objective of making NHAI `more accountable and responsive to users', as stated in the PAD was not achieved. 4 This is based on available data from the state of Uttar Pradesh which constituted 752 km of the roughly 900 km of project roads. 11 The intermediate outcomes were realized. A total of 9 CMUs were created, however, on account of reversion of 5 CMUs to PIUs for taking up the six laning works only 4 remain. Of course, the target of two CMUs, in addition to the two established under TNHP, was achieved. Finally, NHAI was implementing a massive PPP program following the GoI policy change, 86 projects covering over 5000 km of road had been concessioned by project close. Of course the project did not in anyway influence this outcome. Annex 2 includes the status of all 14 output indicators. Overall, the achievement of this PDO is rated as moderately unsatisfactory. 3.3 Efficiency At the time of appraisal the economic internal rate of return (EIRR) for each of the sections ranged from 17% to 45%, with an overall average of 26%. It is noteworthy that sensitivity analyses in the PAD also presented estimates of the impact of potential delays in project completion of one or two years, indicating that the EIRR would be reduced to 23% or 20%, respectively, which proved prescient. A thorough post- construction benefit-cost analysis 5 resulted in EIRRs ranging from 12.6% to 29.3%, with the overall average EIRR for all stretches of 21%, lower than the appraisal estimate, but managing to meet the threshold of 12%. The ex post analysis found that, while the total project costs for GTRIP (in constant price terms), were 16.6% lower than the PAD estimates this factor was more than offset by delays in project completion, and lower traffic growth than expected (due in part to the existence of toll-free alternative routes). Interestingly, traffic growth rates and associated EIRRs were higher for the sections east from Varanasi, which was likely due to the absence of good alternative toll-free routes. Annex 3 outlines the key assumptions in the economic analysis. The lower costs than PAD estimates were mainly an outcome of lower costs on non civil works components such as supervision consultancy and LA and R&R. Also, cost estimates tended to be incomplete owing to improper tracking of components such as NHAI's operational costs, environmental mitigation etc. Finally, given the large number of outstanding disputes against NHAI, totaling roughly US$57 million in value it is likely that the project costs have been underestimated. 3.4 Justification of Overall Outcome Rating Rating: Moderately Unsatisfactory The evaluation of project takes account of relevance, efficiency and achievement of objectives. Sections 3.1 and 3.3, respectively, show that the project is still relevant to the CAS and has broadly met the efficiency criteria for a satisfactory outcome. Although, the project substantially met its primary physical target of 420 km of road strengthening and widening (minus three relatively minor bridges), project delays necessitated extensions totaling 18 months and significantly reduced net economic benefits. While GTRIP's performance in meeting the targets for its physical objective was adequately met, achievement of its institutional objectives was less than satisfactory. On the positive side, the length of the overall national highways network under contract maintenance at project close was almost 4 times the target. However, the deteriorating quality of the NH-2 corridor and the very serious road safety and traffic management situation observed by the various Bank Missions and corroborated by available data suggest that the organizational capacity for asset management is still weak. The lack of data with NHAI for 5 Consulting Engineering Services (India) Ltd, Post Economic Analysis for Implementation Completion Report for Agra to Barwa Adda Section of NH-2 (August 2008). 12 monitoring these critical aspects and a non operational Road Information System is extremely worrisome. Given that institutional objectives have far wider ramifications for the national highway network, the overall outcome of the project is rated moderately unsatisfactory. 3.5 Overarching Themes, Other Outcomes and Impacts Poverty Impacts, Gender Aspects, and Social Development The socio-economic baseline survey has established a rigorous new model for socio-economic impact studies that, if properly followed up in repeat surveys to capture the effects of the road widening, is likely to prove a seminal work for future generations. A brief synopsis is given at Annex 5. 3.6 Summary of Findings of the Stakeholder Workshop Following project close, a Stakeholder Workshop was held in Varanasi on October 17, 2008. The Workshop was well attended with a fairly broad cross-section of the various stakeholder groups, including PAPs living near the highway, NGOs, industry representatives, and transport operators, as well as the highway provider groups, particularly construction supervision consultants, contractors, NHAI staff, and MORTH. The three key agenda issues discussed are summarized below. A detailed report on the workshop is given at Annex 6. Agenda Item 1: How has the road widening affected long-distance travel and daily life alongside the road and within a few kilometers of the road? On balance, the issues notwithstanding, the overall tone of both those living alongside and transporters traveling the full distance of the GTRIP highway was positive, although some were still apprehensive as to potential adverse effects. The main benefits identified included the huge savings in inter-city travel time (even 50% and more) as a result of the new highway. Problems identified largely involved poor asset management including inadequate signage, serious road safety issues, poor maintenance of the highways, poor traffic management. Agenda Items 2&3: Project Preparation & Implementation: Challenges & Lessons The deficiency in quality of the detailed engineering designs was identified as a serious issue. The primary reasons for this were the unreasonable timeframes provided for preparation, poor surveys and inadequate consultations with various stakeholders. Time delays were a serious problem in GTRIP, as in TNHP Major causes Delays most commonly emanated from poor quality DPRs, starting with inadequate surveys. Slow decision making by NHAI in approving necessary design changes. Slow action by third parties responsible for land clearance /RoB clearances. High turnover and a shortage of qualified engineering staff due to competition from higher paying markets. Institutional weaknesses that provide powerful incentives for delay in many contexts where delays are more profitable for individual participants. 13 Potential solutions NHAI officials argued that most, if not all, problems experienced with implementation of the GTRIP project will be avoided by conversion of future projects to BOT or other forms of PPP. Only for projects which fail to attract bids from prospective concessionaires after two unsuccessful tenders as PPP will EPC procurement be engaged. Where EPC is used, more time for preparation of the DPR will also be provided. Appointment of the Supervision Engineer will be effected at an earlier point and an overlap with the Design Engineer will be provided. For necessary ROW/ROB clearances, NHAI will engage earlier with state forestry departments, utility companies, and Indian Railways as appropriate. Wherever feasible, the Contractor will be employed to deal with the clearance under supervision of the responsible authority. Where disputes arise, NHAI is now beginning to honor awards of Dispute Resolution Boards as a general rule. However, Contractors generally do not accept DRB decisions which do not favor them. 4. Assessment of Risk to Development Outcome Rating: Substantial The evaluation of risk to development outcome has taken into account the sustainability of the investments in highway upgrading and the institutional development of NHAI as envisioned at project appraisal. NHAI has set up CMUs as planned. The Authority has more O&M contracts with the private sector than envisioned. However, the award of these contracts takes place on an ad-hoc basis in the absence of a comprehensive maintenance strategy. The serious road safety situation requires immediate institutional attention. Also, NHAI is understaffed, especially for managing pre-construction activities, reviewing designs, and it suffers notably from the absence of permanent/ long term staff who normally provide an important component of institutional memory in such organizations. Because of the increasing volume of PPP contracts in its portfolio, NHAI needs a comprehensive training program aligned to this development, most notably in the areas of financial management, risk analysis, toll operations and maintenance. In particular, its monitoring and evaluation and contract management capability will need to be strengthened. Given the uncertainties surrounding these aspects, the ICR has rated the risk to development outcome as substantial. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Unsatisfactory The Bank's performance at preparation stage with regard to technical, economic and financial analysis, as well as the design of safeguards was satisfactory. The project's design reflected lessons learned in previous projects in India and other countries. However, it appears that Bank staff-- who were familiar with international best practices and developmental experience in countries such as China, Malaysia, Thailand, Chile, and Brazil-- underestimated the difficulties to be overcome, and the time necessary, to develop a modern road construction industry in the Indian context, and, at the same time, overestimated the incentives that international consultants and contractors would have to engage with these circumstances and thus hasten progress. 14 Nor did the implementation framework give sufficient attention to staffing needs in order for NHAI to fulfill its mandate. Furthermore, the two-year timeline in the PAD's action plan for NHAI's transformation was unrealistic. In the end, the planned mitigation measures were ineffective in preventing recurrence of earlier problems. The GTRIP, like TNHP and earlier highway projects in the mid nineties, still suffered from substantial delays. Therefore the ICR has rated quality at entry as moderately unsatisfactory. (b) Quality of Supervision Rating: Moderately Satisfactory The Bank supervised the project with a multi-disciplinary team that had an adequate skill mix (Annex 4). The team regularly raised issues with the management, proactively tackled financial management issues and diligently monitored safeguards. The project team also showed flexibility in restructuring the project, responding to NHAI's changing needs. However the team could have given greater attention to the project's institutional development components, and the follow up regarding data for monitoring and evaluation was weak, though it should be noted that poorly designed indicators (condition of the NHAI network as noted above) made it difficult to implement. Taking account of strengths and shortcomings, the ICR has rated overall Bank performance in project supervision as moderately satisfactory. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Unsatisfactory Overall ratings of moderately unsatisfactory for quality at entry and moderately satisfactory for supervision, yield an overall Bank performance rating of moderately unsatisfactory. 5.2 Borrower Performance (a) Government Performance Rating: Moderately Satisfactory The Government's main contribution to the project was the development of a sector framework supportive of NHAI's development and the encouragement of the private sector to participate in the development of the national highway system. Prior to the project, the Cabinet approved the implementation of the NHDP by NHAI and the national cess on fuel largely earmarked to fund NHDP development. However, the Government could have done more to improve inter-agency co-ordination to prevent project delays and support the institutional development of NHAI. Also, MoSRTH was slow in taking forward the recommendations of the studies under their purview in particular the implementation of the Road Safety Policy and the transport efficiency study resulting in the considerably reduced net benefits of the project corridors. The restructuring recently proposed (March 2008), by the GOI Inter Ministerial Committee, Restructuring the National Highway Authority of India (hereafter cited `IMC Report'), offers promise of substantial improvements in the performance of NHAI in the future, but, its publication came too late to affect GTRIP project outcomes. On balance, the ICR has accordingly rated Government performance as moderately satisfactory. (b) Implementing Agency Performance Rating: Moderately Unsatisfactory NHAI demonstrated a strong commitment to the project during its preparation. The Authority mobilized consultants for feasibility and engineering studies as well as preliminary studies on institutional development. NHAI also prepared all of the construction packages and bid documents for the highway- 15 upgrading component. They also set up a dedicated Environment & Social Development Unit within NHAI to give priority attention to safeguard issues. During project implementation, NHAI showed improvement in financial management and safeguards performance. However, NHAI did not ensure proper coordination of the design consultants, nor the various state-led pre-construction activities. Moreover, NHAI refused to delegate normal authority to settle design variations and other routine administrative matters to their Project Directors and Supervision consultants on the project site, or accept the recommendations of properly constituted Dispute Resolution Boards, while decision making in NHAI headquarters caused countless delays. NHAI also gave relatively little attention to the implementation and timely completion of the project's institutional development components and to the M&E framework. Of critical importance, NHAI has so far given minimal attention to establishing a proper data base necessary for a modern asset management system. The pavement deteriorations observed in some sections and little attention to the poor road safety situation are also serious matters. The ICR has rated overall performance moderately unsatisfactory because the shortcomings in performance during project implementation were considered significant. They are remediable with improved management and strengthened governance. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Unsatisfactory Balancing all factors ­ but with particular weight to the performance of NHAI, which, as executing agency, was in the primary position of authority and carried the primary responsibility ­ the ICR has rated overall Borrower performance as moderately unsatisfactory, calling attention to the fact that much of the opportunity to create a new world-class leader for highway infrastructure development and management in India was missed. Nor did their implementation `meet user's expectations in the most time bound and cost effective manner' in compliance with the mandate 6 handed to NHAI by the Inter Ministerial Committee. 6. Lessons Learned Nexus of issues leading to time and cost overruns and substandard works. The national highway projects, as many other highway projects, are afflicted by a complex web of issues that greatly exacerbates project delays and costs, and subverts quality, in a manner inconsistent with the public interest. The key issues plaguing the sector (see Fig. below) involve: Pre-construction Delays. Interagency coordination in preconstruction activities presents a challenge with long delays in handing over of encumbrance free land to contractors. Quality of Engineering Design. Poor quality Detailed Project Reports (DPR) necessitate costly revisions, in alignment and therefore land acquisition requirements, detailed designs, bill of quantities etc. These were often a result of poor quality of surveys, outdated revenue maps and data, lack of design standards. On the other hand, the excessive price competition within the industry results in low bids that are unsustainable leading to substandard work. This price competition crowds out quality candidates including international players. The inadequate time given for delivery further adds to the problem and the low wage levels in the sector encourages rent seeking behavior. Bureaucratic Delays in Approvals. Design changes and variation orders necessitate approvals and clearances from one or more individuals, a situation further exacerbated by the unduly 6 IMC Report, NHAI vision statement, p 6. 16 centralized decision making system within NHAI. Equally, this presents opportunities for rent seeking. Dispute Resolution & Claims Settlement. All these in turn trigger frequent disputes and claims. However, with the break down of the normal dispute resolution framework, most disputes are routinely escalated to arbitration, and often beyond to the court system, not achieving the intended purpose of speeding up settlements and avoiding costly delays. Contractor/Consultant non-performance. Finally, cash-flow problems on account of over commitment by vendors, price undercutting, overly long dispute/claim settlement periods, weaknesses in contract management and lack of accountability lead to contractor as well as supervision consultant non performance resulting in delays to the projects. Time & Cost Overruns and Substandard Delivery: Nexus of Issues NHAI Specific Issues ˇ Staffing ˇ Inhouse ˇ Centralized ˇ All disputes ˇ Contract ˇ Coordination Design decision making escalated to management with state review ˇ Understaffing courts including capacity agencies capacity by NHAI ˇ Monitoring systems Cost Poor Poor Overruns / Pre- construction Quality Clearances: Designs, Dispute Contractor/ Consultant Delays Delays Designs Variations Resolution Perfor- Poor mance Quality Works External Issues ˇ Lack of formal ˇ Excessive price ˇ Weak Dispute ˇ Contractor Cashflow GoI-State competition among Resultion problems / coordination consultants Mechansims overextended arrangements ˇ Lack of design ˇ Professional i.e. MoUs standards, outdated certification technologies/ data While many of these issues are sectoral and require an industry level treatment, the weaknesses in NHAI's internal systems and capacities for project management made it difficult for them to deal with the issues effectively. Some of the key interventions which could help improve the situation include: NHAI must have at least 50% of the land acquired and encumbrance free prior to contract award7. It should also consider entering into long term arrangements with state governments at program rather than project level. Creation of a strong Design Review capability8 within NHAI is critical to stalling the multiple delays which are locked in early on as a result of flawed DPRs. This in-house capability would allow for DPR proof checks, ensure quality designs from consultants as also concessionaires. It could also help develop design standards for national highways and ensure that the national highways exhibit consistency of design. Guidelines for DPRs specifying minimum time for preparation and use of latest technologies in preparation should be issued. In retrospect, Quality and Cost Based Selection (QCBS) method may not have been the best choice of competitive procurement of engineering consultants, especially in the context of a 7 Design and Construction Review of National Highway Projects ­ Lessons Learned (2007); Indian Road Construction Industry Study: Capacity Issues, Constraints & Recommendations (2007). 8 Design and Construction Review of National Highway Projects ­ Lessons Learned (2007) 17 highly competitive industry environment. Therefore, the procurement for engineering design and supervision contracts should be considered based on quality preferably with a fixed budget to attract the best qualified firms. This approach could be tested through pilots on some highway projects. An overlap in the work of the Design and Supervision teams, so that the latter would have the opportunity to review, identify, and resolve any possible errors in surveying, land clearance, design, or other issues at an early stage, should be considered. Going further, after selection of the contractor and issue of the Letter of Award but prior to issue of notice to commence the works, all four parties (Design Engineer, Supervision Engineer, Contractor, and NHAI Project Director) could be required to conduct a joint review of the alignment and agree any necessary changes. NHAI must review its workflow patterns with the objective of streamlining them for speedier decision making and improved project delivery. The current practice of limited flexibility to Project Directors and Supervision Consultants tends to be counterproductive. Strict timelines must be observed for providing approvals. Contract enforcement and dispute resolution requires strengthening. NHAI must, and has already initiated the process of honoring decisions of the process until they are reversed. Strong project monitoring systems and capabilities will have to be invested in order to improve overall program efficiency and performance. Given the high levels of outsourcing within NHAI, the large size of the program it is responsible for delivering and the concerns regarding contractors and consultants, it is critical for the organization to develop a performance monitoring system9 to help track the performance of various vendors (including concessionaires) across multiple criteria (time, cost, quality etc.), provide a transparent basis for benchmarking and assist in future procurement decisions. While some work was done on this as part of the first Bank loan the initiative was never implemented. Tools such as the road information system and ERP, preferably with inter linkages, will also be indispensable in this regard. The RIS is important for not only monitoring the quality of the highways but also planning for future maintenance and upgradation needs. Finally, there is a strong need for NHAI to align its staffing requirements (strength and profile) with the increase in the size of its work program and the shift to PPP modality. Understaffing at PIUs, Finance, ESDU is affecting performance. Second, it should focus on developing a cadre of permanent staff, targeting at least 50% of staff strength as suggested by the IMC Report. Some of these initiatives have already been initiated by the Bank team. Going forward, whether the contracting modality is EPC or PPP, NHAI will need to address these concerns. Equally, MoSRTH will need to give serious attention to these issues constraining the road sector. A more focused approach to Technical Assistance: Across the two Bank projects with NHAI there were roughly 18 studies being carried out across a wide spectrum of areas both within and outside NHAI's purview. While the areas being studied were all very pertinent from the perspective of a fledgling road agency and rapidly evolving sector, perhaps some prioritization and a more focused approach may have yielded better results. Several studies regarding sector issues or policy matters such as cross border efficiency, road safety policy, construction industry, primarily targeted at MoSRTH could have been better addressed through a direct TA with the line ministry. In the end, with so many disparate activities to work on, it seems that NHAI and even the task team struggled to get them completed. 9 Design and Construction Review of National Highway Projects ­ Lessons Learned (2007) 18 Considering Alternative Approaches to Road Information Systems: The experience with RIS in NHAI, as in many other states in India has by and large been disappointing. The common complaint is the onerous data requirements. Without data or regular updation the system becomes an empty shell of little use for asset planning. When trying to develop planning capability within road agencies which have hitherto relied on a more ad hoc system, transplanting state of the art RIS systems directly from developed countries is perhaps not the best approach. The Bank should consider developing more basic systems (with some reconsideration to `essential' vs `desirable' data categories, frequency, level of accuracy), explore simpler collection mechanisms which ride on existing frameworks such as field offices, can be quickly developed and their utility demonstrated so as to ensure their sustainability. Once user demand has been created, system sophistication can gradually be improved. Finally, the RIS cannot be left to be developed at middle to lower levels of the organization, a champion from among senior management is critical for its survival. Prioritizing Road Safety: The poor road safety situation on the national highways requires urgent attention. There is a real concern that the GoI's decision to convert the GQ from 4-lane to 6-lane is fraught with design difficulties and much greater gains are possible from a new 4-laned access controlled system at selected high traffic sections of the corridor 10 . Since the highways pass through towns, habitations and built up area there are significant adverse safety implications. Inadequate public consultations at the design stage have led to communities being divided, unrestricted pedestrian/ vehicle crossings, spacing of median cuts such that it encourages movement of traffic in the wrong direction. Poor signage and lack of signals at junctions are additional issues. The national level initiative to drive the road safety agenda is now overdue. The Road Safety Policy developed under the earlier project has been adopted by GoI, however its implementation has been pending the enactment of the requisite legislation. NHAI as the national road agency must exhibit strong commitment towards building and managing safe highways. The constitution of a Road Safety Cell within NHAI is a positive development. The cell should take leadership for giving priority to road safety in all phases, from planning through design, construction and operation. Some initiatives that should be adopted include: (i) develop and adopt engineering designs incorporating road safety aspects; (ii) institutionalize public consultations; (iii) safety audits instituted at various stages; (iv) contractors held responsible for developing and following a traffic management plan at worksites as also worker safety; (v) partner with state governments to ensure enforcement and public education; (vi) emergency medical services (already initiated); and (vii) regular monitoring of accident statistics including for corridors under construction. 10 Design and Construction Review of National Highway Projects ­ Lessons Learned (2007) 19 Annex 1. Project Costs and Financing (Revised) (a) Project Cost by Component (in USD Million equivalent) Appraisal Estimate Actual/Latest Estimate Percentage of Components (USD millions) (USD millions) Appraisal 1. Highway Upgrading 618.08 694.44 112.4 2. Private Sector Development 25.50 0 0.0 3. Road Safety & Corridor Management 18.20 0.22 1.2 Works 4. Institutional Strengthening 17.62 19.03 108.0 Total Baseline Cost 679.43 713.69 105.0 Physical Contingencies 29.85 0 0 Price Contingencies 40.83 0 0 Total Project Costs 750.11 713.69 95.1 Front-end fee PPF 0 Front-end fee IBRD 5.89 5.89 100 Total Financing Required 756.00 719.58 95.2 (b) Financing Appraisal Actual/Latest Type of Co- Percentage of Source of Funds Estimate Estimate financing Appraisal (USD millions) (USD millions) Borrower 167.00 232.48 139.21% International Bank for Reconstruction 589.00 487.1 82.70% and Development 20 Annex 2. Outputs by Component Hierarchy of Objectives Key Performance Indicators Actual Achievement 1. Cost effective delivery 1.1 Ex post ERRs of the 420 km Ex post ERR of project roads was 21%, below of increased traffic project roads are on average above estimated levels. capacity and improved 26%. quality of national highways 1.2 All civil work contracts Civil works incurred significant cost and time delivered to time, budget, cost and overruns and poor safety record. safety constraints. 1.3 100% delivery of entitlements RAP was satisfactorily delivered although to PAFs and restoration of with some delays. common property resources as and when planned in RAP 1.4 All EMPs carried out in EMP implementation was marginally accordance with contract clauses. unsatisfactory (construction safety and closure of camp site/ plant site, etc.) 1.5 Level of users' satisfaction User satisfaction improved with road infrastructure on project roads increased. 2. Improved road safety, 2.1 Safety audit and hazardous This component was dropped owing to maintenance and location improvement works decision to six-lane the GQ. Safety audits management of national conducted on selected sections of were conducted but the ATMS which was to highways NHDP network. be implemented on 3 sections was finally not taken up. 2.2 A comprehensive road safety The draft Road Safety Policy prepared under action plan implemented on a pilot TNHP recommended the setting up of a basis. National Road Safety Agency/ Board, and the enactment of a National Road Safety & Traffic Management Act. The Board has been established. The draft Act is currently being reviewed by the Government. Upon enactment, the Board can prepare and implement action plans whether through NHAI or state PWDs. As a result, the Road Safety Action plan was not fully implemented under this project. 2.3 Two new CMUs established by Seven new CMUs were established, but five MTR. of these have been reverted to PIU for taking up further widening. Four CMUs exist at present. 3. Expanded public- Public-private partnership This component was dropped from the loan private partnership in successfully executed to support during a project restructuring in December promoting private large scale (over 50 km) BOT 2006, as NHAI already had a full fledged PPP investment on large BOT projects program in their ongoing development projects program. 4. Improved institutional 4.1 All technical assistance in Partially achieved; National Highway Asset capacity in social and effect; inventory study cancelled; Post project survey environmental aspects, of Poverty & Highway Development Study to road safety, corridor be taken up under LMNHP; Gautam Budh management, public- sanctuary impact assessment to be taken up private partnership and under ABP managing traffic efficiency. 21 Hierarchy of Objectives Key Performance Indicators Actual Achievement 4.2 NHAI HQ and field office staff Staff trained through own resources; trained; 4.3 Options to eliminate cross-state Study completed; Dialogue yet to be initiated border freight delays analyzed and by MoSRTH. policy dialogue with relevant states initiated; 4.4 Over 120,000 trees planted by Not achieved; Trees not planted owing to MTR and over 200,000 trees policy decision on six laning of the project planted by EOP; road; 4.5 Over 70% tree survival rate Not achieved as 4.4 was not implemented achieved by EOP. 22 Annex 3. Economic and Financial Analysis (including assumptions in the analysis) A. Summary of Results Category Appraisal ICR US$ million US$ million Benefits Economic Financial Economic Financial 1461 1623 821 912 Reduced road user and maintenance costs Costs 553 614 544 604 Road construction, land acquisition and resettlement, utility relocation and future maintenance Net Benefits 908 1009 277 307 Internal Rate of Return (IRR) 25.9 25.9 21.0 21.0 B. Assumptions Category Appraisal ICR General Highway Lifespan --Asphalt 20 years 20 years --Cement 30 years 30 years Scrap value at end of project life 20 % of costs 20 % of costs Discount Rate for Calculating 12 % 12 % Net Present Value Conversion factor from financial 0.9 0.9 costs to economic costs Road, vehicle, and traffic specifications Basis of road design Current levels of truck Current levels of truck overloading is overloading11 assumed on the basis of DPR. Road condition Without project case: maintained Without project case: maintained every every five years but not improved five years but not improved for the for the evaluation period. evaluation period. With project case: Pavement With project case: Functional overlay strengthened every 10 years in was scheduled in the 5th and 15th years, addition to regular maintenance while structural overlay was scheduled in the 10th and 20th years after construction. Impact of road congestion Incorporated in the HDM-3 model. Incorporated in the HDM-4 model. The The PAD states that " No ICR states that " No disruptive effect disruptive effect was assumed for was assumed for road traffic during the 23 Category Appraisal ICR road traffic during the years of years of project implementation, as by project implementation, as by design the highway widening work will design the highway widening work take place aside the existing right-of- will take place aside the existing way." right-of-way." Base year traffic levels Most recent traffic counts at time Base year 1998 traffic is taken from of appraisal, verified through field previous DPRs whereas for 2008, from inspection traffic counts conducted in 2008 for each package Traffic growth rates Estimated for each road package Estimated for each package based on the based on estimates of growth in compound average growth rate from population and per capita income 1998 to 2008 and adopted for this in the area served period. From 2008 onwards a suitable growth rate has been adopted. Income (total GDP) elasticities Passenger vehicle traffic: 1.8-2.0 Trend growth method was used. of traffic demand Freight vehicle traffic: 1.0-1.25 Generated traffic (for the first Price elasticity: 0.2 - year after road completion) Road user benefits: 50 % of those accruing to normal traffic Costs Base cost estimation Bill of Quantities developed by Actual costs incurred during the consultants for 420 km. of roads, implementation obtained from respective for which preliminary design was PIUs which includes costs of completed. Included costs of construction, supervision, land construction, supervision, land acquisition, resettlement and utility acquisition, resettlement and utility relocation. relocation. Unit cost per km. of road: US$1.7 million Unit cost per km. of road: US$1.2 million (Included substantial road- widening and shoulder reconstruction). Maintenance costs Based on costs resulting from a Based on the prevailing NHAI Road Maintenance study guidelines. Benefits General Calculated using the HDM-3 Calculated using the HDM-4 model model Savings in road user costs (1) Reduced vehicle operating 1. Reduced vehicle operating costs costs (VOCs) calculated per (VOCs) calculated per vehicle vehicle type based on a Road type based on a Road User Cost User Cost Study of 1991 Study of 1991 updated to 2000 using updated to 2000. HDM-4 Model. (2) Reduced passenger travel time 2. Reduced passenger travel time based on per capita income of based on per capita income of average passengers, by vehicle average passengers, by vehicle type. type using HDM-4 Model (3) Reduced cargo travel time, with 3. Reduced cargo travel time, with time time value based on the Road value based on the Road User Cost User Cost Study cited above. Study cited above using HDM-4 Model. Savings in maintenance costs Based on the prevailing NHAI guidelines. 24 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Responsibility/ Names Title Unit Specialty Lending A. K. Swaminathan Highway Engineer SASIN Highway Engineer Anil Bhandari Highways Adviser SASIN Institutional Strengthening Anil H. Somani Environmental Specialist EASES Environnent D. C. Mishra Procurement Specialist SARPS Procurement Douglas Gray Program Assistant SASIN Guang Zhe Chen Transport Economist SASIN Irene Christy Program Assistant SASIN Manvinder Mamak Financial Management Specialist SARFM Financial Management Mridula Singh Social & Resettlement Specialist SASSD Social and Resettlement N. Raman Procurement Specialist SARPS Procurement N. S. Srinivas Team Assistant SASIN Piers Vickers Transport Specialist SASIN Rajat Narula Financial Management Specialist SARFM Financial Management Reidar Kvam Social & Resettlement Specialist SASSD Social and Resettlement Rodrigo Archondo-Callao Technical Specialist SASIN Economic Analysis Sangeeta Anand Team Assistant SASIN Sonia Kapoor Environmental Specialist SASEN Environment Stein Lundebye Sr. Transport Specialist SASIN Road Safety Zhi Liu Transport Economist SASIN Task Team Leader Supervision/ICR Arnab Bandyopadhyay Sr. Transport. Engr. SASDT Debabrata Chakraborti Senior Procurement Specialist SARPS G. George Tharakan Lead Transport Specialist SASDT Gaurav D. Joshi Environmental Spec. SASDI Isabel Chatterton Senior Infrastructure Specialist CSFSD Manmohan Singh Bajaj Senior Procurement Specialist SARPS Mridula Singh Senior Social Development Spec SASDI Nupur Gupta Transport Specialist SASDT Parthapriya Ghosh E T Consultant SASDI Piers Antony Vickers Sr. Transport. Spec. SASDE Priya Goel Sr. Financial Mgmt Specialist SARFM Rajesh Bahadur Singh Dongol Program Assistant SASDO Rajesh Rohatgi Transport Specialist SASDT Ritu Sharma Program Assistant SASDO Sally L. Burningham Sr. Transport Spec. EASIS Sonia Chand Sandhu Sr Environmental Spec. SASDI Sujit Das Sr. Transport Engr. SASDT Suneeta Singh Consultant SASHD Tapas Paul Sr. Environmental Spec. SASDI Tawia Addo-Ashong Sr. Transport Spec. SASDT Venkata Rao Bayana E T Consultant SASDI 25 (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including travel No. of staff weeks and consultant costs) Lending FY01 54 155.93 FY02 0.00 FY03 0.00 FY04 0.00 FY05 0.00 FY06 0.00 FY07 0.00 FY08 0.00 Total: 54 155.93 Supervision/ICR FY01 0.00 FY02 30 104.13 FY03 24 79.44 FY04 22 83.41 FY05 31 126.33 FY06 27 92.43 FY07 33 81.16 FY08 21 73.27 FY09 2 0.00 Total: 190 640.17 26 Annex 5. Socio-economic Impact of National Highway on Rural Population An important feature of the GTRIP project was the first stage of a major socio-economic study of the impact of the inter-city highway on poverty and the lives of the rural population more generally within a 10-km zone of influence, as compared with control zones 2 km beyond the zone of influence on each side of the highway, comprising a linear band extending along NH2 between Agra and Dhanbad for a distance of 995 km spanning the states of Uttar Pradesh, Bihar, and Jharkand. The study has already established a theoretical framework and a rigorous methodology for empirical validation that promises a new landmark in socio-economic impact studies. The baseline survey was completed in 2003, and the study should be repeated first after one or two years have passed since completion of 4-laning and at least once more at a later date to capture longer term adjustments to the road enhancements. The baseline survey, encompassed a carefully selected sample of 3200 households in 200 villages (out of 1697 villages in the zone). By comparing status of those living within the hypothesized 10-km zone of influence with those living up to 2-km beyond on either side, the baseline survey by itself offers considerable insights into the impacts of the old two-lane NH-2 on the lives of the roadside inhabitants, as illustrated by the following brief excerpt: "The results clearly suggest proximity to NH-2 has a significant relationship with (i) incidence of poverty (proportion of poor households); (ii) transport and mobility (per capita trip rate, per capita trip rate for work, and per capita trip rate involving travel on NH2); (iii) extent of income and employment in non-farm activities (share of income from self-employment in non-agricultural activities and proportion of income and proportion of non-agricultural workers in the total working household members); (iv) asset holding (proportion of landless households); and (v) attitudinal responses (proportion of households which rate themselves poor or very poor and proportion of households which expect that the employment situation will improve after 4-laning of NH-2)... The results confirm that proximity to NH-2 would help a poor rural household by giving its members a greater scope for employment thereby raising its income level, improving its well-being and ameliorating its poverty. These beneficial effects result primarily due to the fact that proximity to NH2 would enhance the mobility of the rural poor for every purpose ­ be it access to the job market, to the market for sale and purchase, to the health centres, or to the educational institutions. These positive results gain more significance because the study area covers some of the poorest districts of rural India." xxxix, Socio- economic Impact of National Highway on Rural Population (Asian Institute of Transport Development, New Delhi, 2003). 27 Annex 6. Stakeholder Workshop Report and Results Grand Trunk Road Improvement Project Summary of the Stakeholder Workshop Hotel Ramada Plaza, Varanasi 17 October 2008 The Workshop was in fact well attended with 59 registered attendants in addition to the 8-member World Bank Mission (Attachment 2), representing a fairly broad cross-section 12 of the various stakeholder groups. As planned, formal presentations were kept to a minimum, and there was a lively discussion throughout the day, which was not quelled till well past the scheduled closing of 4:30 PM. Opening Remarks Mr. Rajesh Rohatgi first introduced Mr. H.C. Arora, NHAI Chief General Manager as Chairman of the Workshop, and then Dr. Clell Harral, who briefly outlined the purpose and structure of the meeting. NHAI General Manager, Mr. LP Padhy, then made a presentation including many photographs providing an overview of the NHDP program in general and the Grand Trunk Road Improvement (GTRIP) Project in particular. The floor was then opened to discussion, with the highway user and Project Affected Persons (PAP) groups invited to speak first on the on the key question13: I. How has the road widening affected long-distance travel and daily life alongside the road and within a few kilometers of the road? The lively discussion that ensued may be summarized by speaker groups in the order it occurred as follows: 1) Varanasi Transport Association (both local and long distance operators) Negative factors and further needed improvements Traffic signs and signals are inadequate. No informative and cautionary signs and traffic signals could be provided in certain junctions. Overloading a major issue not being given due attention by local authorities despite Supreme Court ruling. Accidents one of the main fallouts of overloading. 12 The participant grouping was as follows: 9 PAPs, 3 R&R assistants, 3 NGOs, 3 transport operators, 1 Contractor's representative, 20 Supervising Engineers, 13 NHAI staff, 1 MORTH representative, 1 local government, and 4 whse affiliation was not identified, in addition to the 8 members of the Bank mission. The primary omission in the Workshop per se was the absence of Design Engineers, and the presence of only 1 Contractor's representative, but several of these groups were met during the GTRIP, TNHP, and ABP road inspections and subsequently. 13 This discussion was conducted largely in Hindi, led by Mr Rohatgi, as needed to encompass the wider audience of PAPs who were not fluent in English. English notes of the Hindi dialogue were kindly provided by AK Swaminathan and Nupur Gupta. 28 Toll taxes are very high. When the roads have been built with our taxes (cess of Rs2/= per litre of diesel) why should tolls be levied as well? Also, it is unfair that tolls are not charged by the distance traveled. For a 50 km stretch the charge is Rs. 35 irrespective of whether you travel the entire 50 km or only part of it. The service lanes are not safe and often cannot be utilized since the roadside dwellings harness their cows and buffaloes on the road and also use it for sleeping on cots, parking their vehicles etc. Illegal encroachments should be stopped. Moreover, the secondary roads leading to National Highways are kept in poor condition thereby negating many benefits derived from an improved national highway travel. The link roads into the city from the highway have not been similarly upgraded resulting in large traffic jams outside the city. Benefits in time savings on the highway are largely depleted owing to the wait times outside the city. A Ring Road is being talked about for the last 8 years with still no movement. NHAI should try to ensure appropriate link road development as well. Situation of potholes is very bad in some of the newly constructed bituminous stretches while the earlier completed sections are performing very well. NHAI and contractors should be held responsible for such poor quality works. Positive aspects Huge savings in time as a result of the new highway. Travel time more than halved. Allahabad- Varanasi section earlier took up to 7 hrs to cover and today it can be done in 3-3.5 hrs. However, faster roads do not mean faster transportation. The queues for entering the destination towns and some of the other towns which do not have bypasses have increased manifold. More congestion within towns which do not have bypasses. Therefore delays happen. 2) Carpet Industry Representative Large benefits of the highway improvements Accidents have been reduced (less fatalities) Congestion has gone down, with significant travel time savings. Delhi to Kolkata now in 3-4 days while before this road came it used to take 6-7 days. His business has increased since travel between the city and airport has reduced from 3 hrs to 1.5 hrs only. Land Acquisition/R&R problems Some 250 people affected but about 9 have not yet been properly compensated. The meager Economic Rehabilitation Grant was inadequate to construct new dwellings and relocate themselves. New buildings should be constructed for them. 3) Roadside petrol pump owner Land Acquisition/R&R problems Lost land and received LA/R&R assistance. However, due to shifting backwards and to conform with the franchisee agreement of the oil company, I had to remodel the pump for which I was not compensated. No permanent approach has yet been given from the NH to my pump. There is a drain and a service road in between and only a temporary crossing over the drain has been given. While NHAI has been responsive, a permanent solution must be provided. I lost some income when my petrol bunk was closed for re-modeling. Assisted by the R&R package but not sufficiently. 29 Overall, as of now the business has not improved but I expect it to increase in the near future when the whole road is completed. 4) Bagodhar Market (NGO and then a shopkeeper) Land Acquisition with major R&R effort by NHAI A big new complex has been created and 300 shopkeepers shifted from old market acquired for NH2 right of way. A special area has also been created for the vegetable vendors on the other side of the road. Shopkeepers affected by the project have been rehabilitated. The new facilities are good, with the main advantage that they are dust-free and pucca. About business prospects: it has just been opened and hence too early to make a comparative statement today. Electricity connections not yet given to some. (NHAI clarified that electric connections have not been given to people who have not paid and cleared previous arrears.) 5) Roadside resident near Allahabad bypass Gains and losses in access to land, social services, and markets The other side of Ganga is now very near due to the new bridge. Schooling and hospital access has improved for people on the other side of Ganga to be able to approach Allahabad. Loss of very fertile land and many fruit bearing trees and orchards at the Ganga bridge site. Could have been compensated better. R&R assistance not released for some people yet. Near guide bund area of the Ganga bridge: access problems for the remaining land with the owner. Rates not satisfactory. Why not construct a new market complex like Bagodra for displaced shopkeepers of Gopiganj instead of paying them compensation asking them to fend for themselves. (NHAI clarified that no alternative land at a mutually agreeable location was available for building a market complex.) 6) Some common views on road safety problems Absence of traffic control Safety during construction is bad ­ no advance warning sign or hazard light for lane closures and switching of carriageway etc. Even on completed sections, vehicles often travel in wrong direction on one-way carriageways. Poor cyclist and pedestrian discipline causes a lot of problems, traffic impedance, and accidents. Cattle and other animals, some tethered to the median, many untethered, frequently obstruct the right of way, including driving lanes. Parking of trucks on road side without reflectors or parking lights cause accidents. Differential carriageway heights ­ headlight glare. Short bushes could mitigate this danger. Difference in height between the approach road and the main NH causes the traffic from approach road to stand on an incline till it gets its way on the NH. The RTOs and Police often stand at the middle of the road at locations with poor sight distance and create unnecessary panic among the truck drivers thereby causing accidents at times. 30 II. Project Preparation: Challenges Faced and Lessons Learned Following the lunch break, Mr. A.K. Swaminathan-- who was a member of the World Bank team that originally prepared and appraised the GTRIP and subsequently monitored its implementation-- made a brief presentation on the issues faced in this key project in the early days of NHAI development. The floor was then opened for discussion on issues related to project preparation and implementation from the perspective of the highway providers, encompassing the issues raised in the earlier presentation of Mr. Padhy as well as that of Mr. Swaminathan. The discussions centered around the following problems and potential solutions: 1) Deficiency in quality of DPRs was the most repeated issue, leading to additional work for supervision consultants, revised designs, and the attendant variation orders, claims and disputes. Causes for deficient designs: Insufficient time for preparation Poor/inadequate surveys, resulting in inadequate identification of right of way to be acquired and associated requirements for land clearance, resettlement and rehabilitation Insufficient time for consultations with all stakeholders Suggested solutions Combine design and supervision consultancy contracts to reduce the problems arising (NHAI representatives expressed skepticism about this, they feel that consultants try to hide mistakes ­ experience in other projects is not positive) Request design consultant to appoint external checker and safety auditor and charge them for mistakes but pay for good performance. Peer review for design should be completed before bidding even takes place or supervision consultant comes on board. (NHAI notes this now commonly being done.) Representative of DPR consultant should be placed on supervision team. Consultant liability ­ NH has put system in place to make consultants more accountable. Handing responsibility for utility shifting and tree cutting over to the contractor, with utility company acting as supervisor; this has been found to be successful. There was a common reaction from the consultant community that time for DPR preparation should be increased. It was noted that in China for a project cycle of 6 years about 3 years is given for DPR preparation and about 3 years for actual construction. 2) Deficiencies in public consultation Problems Public meetings are organized, but decisions which are taken are often not properly minuted. Emphasis is more on physical design issues (realignment etc) and less on impacts. Local highways/access roads/side roads are not included in design and benefits from construction of the highway may be somewhat limited for local inhabitants. Level of awareness among many beneficiaries is low, and there are no systems to create awareness in advance. Consultation efforts often not taken seriously by the public due to the slow movement of project implementation; participation is often not very good; local authorities do not take lead, and organization of consultation falls on consultant. (NHAI disputes this. As far as NH2 is concerned, NHAI has been strong in participation, and, based on this participation, developed EWS housing scheme, participation was good 100- 150, beneficiary training was well taken up-- 31 but accepts there is room for improvement and that public consultation can be a very effective tool.) Confusion is caused because different states have different rules, and there are a myriad of players in the consultation process. Suggested improvements Central government guidelines should be prepared. These should be strictly adhered to which will allow for more effective and more efficient consultation. -- Commissions set up for project, press notifications should be made, knowledge of local systems should be known (Consultation was done at two stages preparation and finalization of design) -- Consultation should be repeated, emphasis should be placed on beneficiary training, and benefits of project should be emphasized. Records of consultations should be shared with supervising consultants and contractors who can assist in resolution of conflicts. NHAI should make more use of its own Stakeholder Advisory Council. Intervals between meetings have been rather long, but meeting held recently in May/June ­a copy of minutes will be provided to WB. Efforts should be made to encourage local authorities to take up the improvement of local access roads simultaneously. Better organization of the public consultation process would help NHAI Design Engineers to understand and deal more effectively with these needs. Provision of busbay/truck lay-bys/rest stop/handpump/water points/wayside amenities should be considerably increased (NHAI noted that these are part of the corridor management plans for the constructed NH2). Note: Allahabad Bypass has had a positive experience. Due to survey errors and associated design errors, the wrong land segments were acquired, but substantive consultation allowed timely purchase of the correct segments for the right of way, allowing the project to move forward without delay. In fact, the project is now set to be completed ahead of schedule. III. Project Implementation Key problem areas 1) Time delays were a serious problem in GTRIP, as in TNHP Major causes Delays most commonly emanated from poor quality DPRs, starting with inadequate surveys which too frequently failed to properly delineate the right of way, while also failing to identify obstacles to prompt clearance of the right of way, giving rise to many design changes, and frequent disputes. Failure of detailed designs to accommodate the precise terrain conditions. Failure of detailed designs to accommodate reasonable needs of PAPs (e.g. vehicle, animal and pedestrian underpasses, other pedestrian and animal safety measures). Slow decision making by NHAI in approving necessary design changes. Slow action by third parties responsible for land clearance activities (e.g. tree cutting, utilities relocation). A general shortage of well qualified engineering staff in light of strong competition from more rewarding opportunities in the Middle East and other overseas markets, which commonly overtaxed the capacity of many consultants and contractors alike. 32 Insufficient profitability of the Indian markets also dissuaded international consultants and contractors from establishing much more than reconnaissance level involvement in India. QCBS selection used for consultants reduces profitability and quality firms will not normally make a substantial commitment of staff unless there is a shortage of work elsewhere. Institutional weaknesses that provide powerful incentives for delay in many contractual contexts, i.e. where delays are more profitable for individual participants on either side of the contractual relationship. Potential solutions NHAI officials at the conference argued that the principal solution to most, if not all, of the problems experienced with implementation of the GTRIP and TNHP projects will be avoided in the future by conversion of future projects to BOT or other forms of PPP contracts because the private sector would thereby have ownership of the entire project planning and implementation process, and would thus have an incentive to avoid or resolve the problems without delay. Only for those projects which fail to attract bids from prospective concessionaires after two unsuccessful tenders as PPP (either BOT or Annuity form) will EPC procurement then be engaged. Where EPC is used, more time for preparation of the DPR will also be provided. Appointment of the Supervision Engineer will be effected at an earlier point and an overlap with the Design Engineer will be provided. For necessary ROW / ROB clearances, NHAI will engage earlier with state forestry departments, utility companies, and Indian Railways as appropriate. Wherever feasible, the Contractor will be employed to deal with the clearance under supervision of the responsible authority. Where disputes arise, NHAI is now beginning to honor awards of Dispute Resolution Boards as a general rule. However, it is noted that Contractors generally do not accept DRB decisions which do not favor them, and the tendency now is for disputes to be routinely referred to arbitration and beyond to the courts. NHAI institutional structure and efficiency could be streamlined by having 4-5 regional offices which are also staffed in a lean manner to avoid all contractual and administrative decision having to go to NHAI HQ. 2) Disputes are mushrooming, and being escalated from the lowest level through Dispute Resolution Boards to Arbitration and beyond to the Courts, imposing further delays and escalating costs. Causes Poor quality DPRs. Several Supervising Engineers noted that their authority to resolve disputes at the local level has been undermined, and even relatively minor decisions are referred to NHAI headquarters, where lengthy delays are incurred. Contractors have found it profitable to escalate disputes to NHAI and beyond. Potential remedies Better quality DPRs will avoid many disputes. Re-empower the Supervising Engineers to settle disputes up to 1% of contract for any one change subject to cumulative total of 10% of contract. Reduce the incentives for all parties to haggle over disputes by better governance. 3) Improved management of environmental issues was in many aspects a positive feature of the GTRIP Project, but there were exceptions. The respective contract packages of GTRIP have: (i) incorporated relevant EMP items (including enhancement measures) in the contract documents, as a separate item eligible for payment to the contractor; (ii) conducted enhanced community consultations to 33 identify and carry out enhancement measures at appropriate places; and (iii) implemented innovative conservation measures for the protection wild life in Gautam Budha Wild Life Sanctuary - GBWS (Package VB). Management of environmental issues was in many aspects a positive feature ofthe project. Mr. Ashutosh Gautam, General Manager, NHAI highlighted the positiveimpacts of implementing cultural properties conservation measures andworking together with local people and industry in integrating local issues (suchas conservation of Shukla Talab, contribution of the project for the safedischarge of industrial effluents from Rania Industrial estate in Package IIA). Mr.Gautam also said that, the experience of having implemented such measures hashelped NHAI practice such measures in subsequent projects. Dr.Mukhopadhyay, DGM (Env), NHAI indicated that NHAI is in the process ofoperationalising the 'Environmental and Social Management System' developed aspart of the GTRIP project and now conducts EIA studies for all its projects,irrespective of the requirements of environmental regulations in India. Discussions with the contractors and consultants during the road inspection and during the Stakeholder workshop further confirmed that these initiatives have generally resulted in better implementation of EMP and environmental management by the project. Instances of borrow areas being developed as water bodies with recreational facilities (Packages II C, III C), enhancement of religious structures and archeological monuments (Packages IV B, II B), demonstrates some of such best practices of environmental management by the project. However, there remains scope for further improvement in implementation of construction safety and environmental management measures. For example, closure of various construction sites (borrow areas, camp sites, plant sties, etc.) is not yet satisfactory in the incomplete project packages (such as Package I B, IV A). Problem resolution Considering the continued requirement of EMP compliance, Bank has requested NHAI to re-mobilize the EOs in all the ongoing packages, and the Bank's safeguard team will be providing guidance to NHAI in ensuring the satisfactory implementation of EMPs by the project. Further necessary actions include: (i) operationalization of Environmental and Social Management System (ESMS) at NHAI; (ii) End of project Target (EoT) plantation of 210,000 trees in various project packages; and (iii) carrying out a study to evaluate the effectiveness of EMP measures in GBWS - Package VB. 34 Attachment 1 India: Grand Trunk Road Improvement Project Stakeholder Workshop Venue: Hotel Ramada Plaza , Varanasi 17 October 2008 AGENDA 09.45 - Tea/Registration 10.00 - Welcome Address by the World Bank - Objectives and Agenda of the Workshop 10.30 - GTRIP Project - Objectives, Components, and Progress - NHAI 11:00 ­ The Project Impacts -- OPEN DISCUSSION How has the road widening affected long-distance travel and daily life alongside the road and within a few kilometers of the road? Transport improvements: travel time, costs, frequency, reliability Access to markets ­ on-farm prices Access to social services ­ schools, medical care, family & friends, festivals Land use patterns and values Resettlement and mitigation measures Road accidents Other environmental impacts (positive, negative and mitigation measures) 11:45 ­ Tea Break 12:00 ­ continuation of open discussion re project impacts 12:30 Project Preparation Improving stakeholder consultation in project preparation 13:30 -14:30 Lunch Break 14:30 Project Preparation ­ Challenges Faced + Lessons Learned A.K. Swaminathan, World Bank team member OPEN DISCUSSION 15:30 Tea Break 15:45 Project Implementation ­ Key Issues Deficiencies in DPR ­ how to improve? Land acquisition & clearance for construction Environmental management issues Disputes prevention & resolution Other improvements in contract management IV. Lessons Learned and Way Forward 4.30PM Close 35 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR GRAND TRUNK ROAD IMPROVEMENT WORLD BANK PROJECT (LOAN NO. 4622-IN) Implementation Completion Result Report 1. Brief on the project: Improvement of part of National Highway No. 2 for a length of about 420 km., connecting Delhi with Kolkata, which forms one of the arms of the Golden Quadrilateral connecting four metropolitan cities of the country, was taken up under loan assistance of World Bank termed as Grand Trunk Road Improvement Project (GTRIP). The National Highways Authority of India (NHAI), an autonomous body under Ministry of Shipping, Road, Transport & Highways (MoSRT&H) Govt. of India, is the implementing agency for this project. The project loan assistance named as loan No 4622-IN is envisaged for widening and strengthening of 420 km. of National Highway (NH-2) from 2-lanes to 4/6-lanes divided carriageway falling in the states of Uttar Pradesh, Bihar and Jharkhand along with Institutional Strengthening and Training as well as Corridor Management and Road Safety Works. 2. Objectives and Benefits of the Project The basic objectives of the project are to reduce transport constraints on economic activity and reduce transport costs along with the improvement of the institutional capabilities to manage road programs, assets and service. Overall scope of project includes the following: Widening and strengthening of National Highway of about 420 km. Construction supervision with the help of international consultants Institutional strengthening, training, equipment, corridor management & road safety works etc. The following benefits were aimed in the project Lower freight and transportation costs Improved environment along the project roads More effective management and sustainable maintenance of National Highways Reduced travel time 3. Key performance indicators: The key performance indicators as given in the Project Appraisal Document (PAD) that measure the achievement of the project development objective included: (a) Reduced travel time by about 25-30% on project roads by end of project. (b) Reduction in vehicle operating costs on project roads by about 10% by end of project. (c) Reduction in incidence of road deaths by about 20% on project roads by end of project. (d) About 1200 km of National Highways maintained under contract with the private sector and managed by the Corridor Management Units by EOP. Assessment of one of the basic objectives of the project i.e. extent of reduction of transport constraints on economic activity and reduction of transport costs such as Time of Travel, VOC and other related parameters are being evaluated by the World Bank by way of economic analysis through a Consultant engaged by the World Bank. Other project development objective pertains to improvement of institutional 36 capabilities to manage road programs assets and services, on which there has been, marked improvement as evident from below: I. NHAI has been mandated with expanded NHDP program under various phases of NHDP as under: (a) Four-laning of existing two lane National Highways (27,000 km) under NHDP Phases I, II, III & SARDP-NE. (b) Six-laning of existing four lane highways (6,500 km) under NHDP Phase V. (c) Construction of access-controlled expressways (1,000 km) under NHDP Phase VI. (d) Construction of service roads, ring roads and bypasses (30 ring road/bypass and 6 grade separator/elevated projects) under NHDP Phase VII. (e) Management of the corridors entrusted to it. II. The project/phase wise achievements of works as on 30th Sept, 2008 are as given below: Name of the Project Total Length Under Balance to length completed implementation be awarded (km) (km) (km) (km) Golden Quadrilateral (NHDP-I) 5846 5698 148 - North-South East West corridors 7142 2838 3483 821 (NHDP-II) Port Connectivity 380 203 171 6 Other Projects 962 671 271 20 Four-laning on BOT (NHDP-III) 12109 551 1524 10034 Six-laning (NHDP-V) 6500 25 1005 5470 Total 32939 9986 6602 16351 III. Wherever 4/6 laning works under NHDP are in implementation, to keep the existing roads in traffic worthy condition, the maintenance of existing roads are carried out by the Contractor/Concessionaire as part of their obligations under contract/concession agreement. In case of sections identified under NHDP, 4/6 laning of which have not yet started, the maintenance of existing roads are being carried out directly by NHAI or through State PWDs through funds provided by NHAI. After completion of 4/6 laning works, the comprehensive maintenance are regularly carried out. A dedicated wing named as Corridor Management Division has been established in NHAI for exclusively the maintenance and management of the 4/6 lanned corridors. Under this, apart from routine and periodic operation and maintenance of highways, engineering improvement as required for better road safety are also taken up as and when necessary. 37 IV. In view of ongoing /completed four/six laning works under various phases of NHDP and efforts through continuous maintenance measures on existing roads, there has been marked improvement in condition of core network of road under NHAI and hence, it can be safely construed that the objective of improvement of institutional capabilities to manage road programs assets and services has been achieved. 4. Components The Project (GTRIP) has four main components e.g. Up gradation of Highway, Road Safety and Corridor Management, Public-Private Partnership in road concession and Institutional strengthening. Allocation of fund, projected for these components and financing considered by the World Bank, while grant of loan is as under: Component Sector Indicative % of Bank- % of Bank costs Total financing financing (US$ M) (US$M) 1) Highway upgrading of 420 Km Highways 685.30 90.60 527.40 89.50 of NH-2 to four or six lanes including construction, supervision, land acquisition and resettlement, and environmental management. 2) Road Safety and Corridor Highways 20.20 2.70 16.20 2.80 management works. 3) Public-private partnership in PSI 25.60 3.40 20.60 3.50 road concession, including technical assistance, funding NHAI's share of public-private financing of Pilot BOT project on NH-45. 3) Institutional strengthening Institutional 19.00 2.50 18.90 3.20 development Total Project costs 750.10 99.20 583.10 99.00 Front-end fee 5.90 0.80 5.90 1.00 Total Financing projected 756.00 100.00 589.00 100.00 During implementation, the above projection of US$589 million had been revised as under as per actual construction cost with concurrence of the World Bank. Category Original Amount of the Loan Revised Amount of the Loan Allocated (US$ Million) Allocated (US$ Million) Civil works 510.72 (80% of cost) 531.04 (80% of cost) Consultancy 52.85 (100% of cost) 35.00 (100% of cost) Front end fee 5.89 5.89 Unallocated 15.00 0.00 Goods 4.54 (100% of cost) 4.54 Total 589.00 576.47 38 5. Output of each component: The target of 420 km of National Highway set for widening to four lanes, including planting of trees (along full length) and satisfactory safety audit was achieved for an equivalent length of 416.76 km widened to four lanes till loan closure date as on June 2008 (details are as per Annexure A). Component wise achievements can broadly be summarised as under: Component Output Indicators as given in PAD Present Status 1. Cost effective 1.1. Ex post ERRs of the 420 km. project Evaluation being done by the delivery of increased roads are on average above 26%. World Bank by way of economic traffic capacity and analysis through a Consultant. improved quality on National Highways. 1.2. All civil work contracts delivered to As per Annexure-A enclosed. time, budget, cost and safety constraints. 1.3. 100% delivery of entitlements to Completed PAFs and restoration of common property resources as and when planned in RAP. 1.4. All EMPs carried out in accordance Completed with contract clauses. 1.5. Level of users' satisfaction with road Users are satisfied infrastructure on project roads increased. 2. Improved road 2.1. Safety audit and hazardous location This component has been dropped safety, maintenance improvement works conducted on as part of the restructuring of the and management of selected sections of NHDP network. loan, due to the recent GoI National Highways. decision for six-laning of these 2.2. A comprehensive road safety action corridors. plan implemented on a pilot basis. 2.3. Two new CMUs established by MTR. 3. Expanded public- Public-private partnership successfully This component has been dropped private partnership in executed to support large scale (over 50 as NHAI is taking up of all future promoting private km) BOT projects. projects on PPP basis in ongoing investment on large development programs. BOT projects. 4. Improved 4.1. All technical assistance in effect; Achieved institutional capacity in social and environmental aspects, road safety, corridor management, public-private partnership, and, managing traffic efficiency. 4.2. NHAI HQ and field office staff Ongoing trained; 39 Component Output Indicators as given in PAD Present Status 4.3. Options to eliminate cross-state Policy dialogue with relevant border freight delays analyzed and policy states to be initiated. dialogue with relevant states initiated; 4.4. Over 120,000 trees planted by MTR Looking at the proposed 6 laning and over 200,000 trees planted by EOP; of the already completed 4 lane 4.5. Over 70% tree survival rate achieved stretches under NHDP Phase V, by EOP. the plantation work has been suspended for the time being. 5. Major factors affecting implementation: Major factors, which affected the implementation and consequently contributed in slow disbursement of the loan amount, has been conceived as under. Delay in completion due to: 1. Land acquisition (LA) - the land acquisition plan prepared by the DPR Consultant was seemed to be not matching with the ground condition. 2. Shifting of utilities- Most of the utilities were needed to be shifted during execution which were over looked by the DPR Consultant 3. Tree cutting coordinated through respective State Government- Due to the non-uniform forest policy of different states there was delay in cutting of trees. 4. ROB - Substantial delay in getting clearance from the Rly. Authorities. Slow mobilisation and poor/non-professional management by some Contractors, non effective of JV partners, frequent changes in the key persons of the contractor and poor liasoning with PIU, Supervision Consultant and local authorities. Law and order problem in certain States. Quarry related problem leading to non-availability of road materials in sufficient quantity. Problems from supervision consultants e.g. late decision making, delay in approval of drawings, tests, frequent replacements of professionals and poor liasoning etc. The following efforts were made to overcome the problems and expedite the progress of projects. The matter related to delays due to acquisition of land and shifting of utilities was pursued at the highest level in the concerned state governments through designated Nodal Officer and some of the issues were taken up with Committee of Secretaries (COS) under Chairmanship of Cabinet Secretary. In order to solve the Law and Order problems, the regular meetings were held with the Administrations of the concerned state government to provide adequate security to the personnel and equipment involved in the execution of the projects. This issue was also taken up with Hon'ble Chief Minister of Bihar and Jharkhand. Liquidated damage was imposed against the contractors as per conditions of contract, wherever delays were attributable to the Contractors Termination of one contract package (I-B) due to delay in completion by the Contractor and re- award to another agency. 6. Lessons Learnt In light of the aforesaid constraints experienced in implementation of the projects, the following subjects have been identified for serious consideration in the upcoming projects of NHAI. ˇ Public Consultations at the stage of DPR preparation. 40 ˇ Involving the state administration in providing feedbacks to the DPR consultant for taking in to account all sorts of issues/pending grievances of the public being affected due to the project. ˇ Provision of more vehicular under passes at an average interval of 4-5 km against 10 km in GQ and pedestrian underpass at internal of about 2-3 km. ˇ Provision of more service roads. ˇ Solve the issues related to ROBs well in advances of the project award. ˇ Peer Review of DPR. ˇ Proof checking of design of major structures. 7. Bank Performance Overall performance of the bank was satisfactory. The project team focused on relevance, making sure that the project objectives were in line with the Bank's country assistance strategy and met the Government priorities. Similarly the assistance of the bank in project preparation was highly satisfactory. The bank assigned a highly qualified team with appropriate skill mix in the areas of Engineering, planning, highway construction, institutional development and training. In supervision of the project also the bank's contribution was huge; the good approach in the identification of the problems and constructive advice of the banks team had a lot advantage in effective implementation of the highway project. The assistance provided by the bank ensured quality at entry, supported at implementation through responsive supervision and ensured adequate transition arrangement for regular operation of the project. 7. Data for Economic analysis The feasibility report of the highway projects under taken with the bank assistance, has been already submitted to the bank while preparing the ICRR for TNHP. The Bank has made the economic analysis for TNHP from the feasibility report. Bank may like to make economic analysis for GTRIP also from this feasibility. 41 Annex A: GRAND TRUNK ROAD IMPROVEMENT PROJECT (GTRIP) Sl. Name of works State Length Contract Month of Scheduled Anticipated Physical Comple Present status & reasons for delay No. and location / (km) value commenc month of month of progress ted four package no. for (INR ement completion completion ending lane four laning and crore) as per June length strengthening contract 2008 as on June 2008 1 Km 199.66 ­ UP 50.8 328.49 March March Dec 2008 97.67 49.89 The balance work mainly comprises of 250.50 (Agra- 2002 2005 one ROB of one carriage way at Shikohabad) ­ IA Tundla (after dismantling of existing ROB), for which CRS clearance has been received in mid of February 2008. 2 Km 250.50-307.50 UP 59.0 236.95 Sept 2005 Sept 2007 Aug 2008 95.50 58.60 The project is almost completed except (Shikohabad-Ikdil) for 400 m work of approach of ­ IB Shikohabad ROB, which needs about 15 working days with dry spell 3 Km 321.10-393.00 72.8 323.95 March March Substantially (Sarai Ikdil ­ 2002 2005 completed in Substantially completed Bhognipur / Dec 2007 Sikandra) - IC 4 Km 470.00-483.33 51.5 496.12 March March Substantially and km 0/0 to 2002 2005 completed in Substantially completed 38.00 ­ II B June 2008 5 Km 317.00-328.00 UP & 76 396.48 March March Dec 2008 88.81 73.97 The balance work Km 0/0 to 65.00 ­ Bihar 2002 2005 mainly comprises IVA of three bridges i.e. at Karmanasha, Durgawati and km 58/2. The mobilization by contractor, 42 Sl. Name of works State Length Contract Month of Scheduled Anticipated Physical Comple Present status & reasons for delay No. and location / (km) value commenc month of month of progress ted four package no. for (INR ement completion completion ending lane four laning and crore) as per June length strengthening contract 2008 as on June 2008 especially in bridge work, is very slow. Several review meetings held at the level of M (T), where the contractor (PCL ­ Suncon JV) has given assurance to complete the work. 6 Km 110.00-140.00 Bihar 30 197.95 March March Substantially Sasaram Bypass 2002 2005 completed in Substantially completed Sone River ­ IVC July 2008 7 Km 240.00-320.00 Jhark 80 434.68 March March Substantially (Barachetti-Gorhar) hand 2002 2005 completed in Substantially completed - VB July 2007 Total 420.10 416.76 km 43 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders 44 Annex 9. List of Supporting Documents World Bank Documents 1. GTRIP Project Appraisal Document (Report No. 22169-IN), May 30, 2001 2. TNHP Project Appraisal Document (Report No. 20219-IN), May 12, 2000 3. TNHP Project Implementation Completion Report, October 1, 2008 Project Status Reports/Implementation Status and Results Reports 4. PSR Sequence No. 1, 06/29/2001 5. PSR Sequence No. 2, 12/20/2001 6. PSR Sequence No. 3, 06/23/2002 7. PSR Sequence No. 4, 12/20/2002 8. PSR Sequence No. 5, 06/25/2003 9. PSR Sequence No. 6, 12/15/2003 10. PSR Sequence No. 7, 06/22/2004 11. PSR Sequence No. 8, 12/17/2004 12. ISR Sequence No. 9, 05/25/2005 13. ISR Sequence No. 10, 11/23/2005 14. ISRS Sequence No. 11, 05/31/2006 15. ISRS Sequence No. 12, 10/31/2006 16. ISRS Sequence No. 13, 05/14/2007 17. ISRS Sequence No. 14, 09/28/2007 18. ISRS Sequence No. 15, 06/30/2008 Aide Memoire/Letters 19. Special Implementation Support Mission, August 2005 20. Combined Implementation Support Mission, December 2005 21. Combined Implementation Support Mission, August 24-September 19, 2006 22. Interim Review Letter, February 9, 2007 23. Combined Implementation Support Mission, June 28-July 18, 2007 24. Combined Mission, January 31-March 12, 2008 25. Letter to DEA on final disbursements, November 26, 2008 Reports 26. Indian Road Construction Industry: Capacity, Issues, Constraints & Recommendations, (draft, October 2008) 27. Design and Construction Review of National Highway Projects, (draft, June 7, 2007), Consulting Engineering Services (India) Ltd, 28. Post Economic Analysis for ICR Report for Agrato Barwa Adda Section of NH-2, August 2008 29. Quantification of Time Overrun in Pre-Construction (draft 2007) 30. Activities of National Highway Packages Funded by World Bank and Asian Development Bank 45 NHAI Documents 31. GTRIP Project: Objective, Component and Progress (Power Point Presentation), GTRIP Project Implementation Completion Report, November 6, 2008 32. Request for Proposal, Consultancy Services for Automated Data Collection, Updation and Management of Road Information System for NHDP Corridors (138 pages), March 23, 2007 Government of India 33. Report of the Inter Ministerial Committee 34. Restructuring of National Highways Authority of India, March 2008 46 IBRD 31387 82° HIMACHAL 78° 80° 84° 86° 88° PRADESH INDIA GRAND TRUNK ROAD IMPROVEMENT PROJECT C H I N A PUNJAB To Jalandhar 2 NATIONAL HIGHWAY UPGRADING UNDER THE GRAND TRUNK ROAD IMPROVEMENT PROJECT Chandigarh CITIES, BY POPULATION: 2 NATIONAL HIGHWAY UPGRADING UNDER THE Gorhar THIRD NATIONAL HIGHWAYS PROJECT <100,000 Ambala Dehra Dun Katihar 8 NATIONAL HIGHWAYS ALREADY 4-LANED, 100,000­250,000 UTTARANCHAL Yamunangar OR 4-LANING IN PROGRESS Gaya 250,000­500,000 Saharanpur 24 NATIONAL HIGHWAYS Agra 30° A 30° 500,000­1,000,000 Haridwar na OTHER ROADS Patna AN 1,000,000­2,500,000 u Yam Karnal RAILROADS Muzaffarnagar Kolkata >2,500,000 HARY RIVERS Panipat Haldwani 1 Meerut Patna 10 Sonepat Amroha Moradabad N E P A L STATE CAPITALS Rohtak New Hapur 24 Rampur Pilibhit 0 100 200 NATIONAL CAPITAL Delhi Gurgaon Ghaziabad Sambhal STATE BOUNDARIES KILOMETERS INTERNATIONAL BOUNDARIES Bulandshahr Bareilly Faridabad 8 This map was produced by the Map Design Unit of The World Bank. 28° Budaun The boundaries, colors, denominations and any other information shown Aligarh Shahjahanpur on this map do not imply, on the part of The World Bank Group, any 28° To Jaipur Ga judgment on the legal status of any territory, or any endorsement or 2 nga RAJAS Hathras acceptance of such boundaries. Bahraich Gha Sitapur Hardoi Mathura gha U T T A R 24 ra Bharatpur Firozabad Fategarh 11 Agra Lucknow THA Etawah Faizabad Gorakhpur Chambal 28 N Bhind Kanpur Unnao Biratnagar 2 Pratappur P R A D E S H Ga Sikandra Rae Bareli 29 28 nd Darbhanga Gwalior Gh ak Bhognipur ag ha Muzaffarpur 26° 26° Fatehpur ra Saharsa 25 Khaga Jaunpur Maunath Bhanjan Chapra Purnea BANG. Ga ng a Arrah B I H A R Katihar Jhansi Kokhraj Allahabad Patna 31 Begusarai Handia Varanasi 30 31 Naini Monghyr Mohania Bihar Sharif Mughal Mirzapur Sarai n Bhagalpur 27 So 7 Dehri 3 Sasaram Gaya 31 31 BANG. Satna Ga Rewa Aurangabad ng Sherghati a Barachatti 2 34 Giridih Berhampore 26 23 24° Gorhar Barwa 24° Sagar Murwara JHARKHAND Bokaro Steel City Bermo Adda Dhanbad WEST Kulti Asansol 23 Da Andal Ranchi mo Durgapur Bhopal 32 da r Barddhaman Bankura Jabalpur 12 BENGAL Krishnanagar Jamshedpur Howra CHHATTISGARH 23 33 Midnapore Kolkata MADHYA PRADESH 7 Bilaspur Korba Rourkela Kharagpur (Calcutta) 6 22° 78° 80° 82° ORISSA 84° 86 ° 5 88° 22° JUNE 2001