59157 v. 1 Document of The World Bank Report No: RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF UTTARAKHAND DECENTRALIZED WATERSHED DEVELOPMENT PROJECT CREDIT NO (3907-IN) MAY 20, 2004 TO THE GOVERNMENT OF INDIA DECEMBER 27, 2010 ABBREVIATIONS AND ACRONYMS DEA Department of Economic Affairs UDWDP Uttarakhnad Decentralized Watershed Development Project GoI Government of India GoU Government of Uttarakahnd GP Gram Panchayat IDA International Development Association PDO Project Development Objective MTR Mid-Term Review Regional Vice President: Isabel M Guerrero Country Director: N. Roberto Zagha Sector Director / Manager: John Henry Stein 2 Task Team Leader: Norman Piccioni / Ranjan Samantaray 3 Annex 2: Reallocation of Proceeds India, Uttaranchal Decentralized Watershed Development Project, [Loan/Credit/Grant No], P078550 will be reallocated as follows: 1. Proceeds for India : Uttarakhand Decentralized Watershed Development Project (IDA Credit No. 3907-IN) will be reallocated as follows: % of Expenditure to be Category of Expenditure Allocation* Financed Revised Current Current XDR Current Revised XDR IDA39070 GOODS WRKS 1 29,000,000 28,000,000 95% 95% SRV (SUB) IDA39070 WORKS (EXCEPT 2 618,382 618,383 80% 80% SUB PR IDA39070 GOODS (EXCEPT 3 1,250,043 1,250,043 80% 80% SUB P) IDA39070 CONSULTANT 4A 1,700,000 1,700,000 90% 90% (TAXABLE) CS(TAX 4B 8,200,000 6,870,000 100% 100% EXMT),trg,WkShps,STs 80% until 80% until March 31, March 31, 2007; 60% 2007; 60% from April from April IDA39070 OPERATING 5 1,700,000 2,300,000 1, 2007 until 1, 2007 COSTS March 31, until March 2009; and 31, 2009; 40% and 40% thereafter thereafter IDA39070 GO,WK (OT THEN 6 4,931,575 6,661,574 80% 80% SUBP) Total in SDR 47,400,000 47,400,000 6 2. The project is currently rated "Satisfactory" for both achievement of the project Development Objectives (PDO) and Implementation Progress (IP). Substantial progress has been made towards achieving the PDOs, as reflected in the results of the mid-term review (MTR) as follows: (i) 7 percent increase in net household income, against a MTR target of 5 percent; (ii) 64 percent increase in the administrative capacity of GPs, which by far exceeded the MTR target of 5 percent; (iii) 10 percent increase in irrigated area, which suggests a highly likely achievement of the planned project end value of 15 percent; and (iv) 6 percent increase in access to water for domestic use, with a end project target of 10 percent. 1. Rationale for Reallocation: During MTR based on the project performance and outputs, the task team and the project agreed on enhanced focus and activities like agri business activities, increasing the scope of work in the Drainage Line Treatment and increasing the scope of consultancy to carry out evaluations. Apart from the above on technical grounds, due to unit cost escalation and the impact of such escalations on the sub projects and allied activities, has necessitated this the reallocation. The proposed reallocation will adjust the surplus resources available under the training budget (category 4B) and Goods and services for sub-project (Category-1), and is in line with the implementation plan. These changes will support the incremental operating cost and natural increase in unit cost of agri-business activities. With this reallocation the overdraw in categories 5 and 6 would also be regularized which was done in line with the implementation plan and activities. 2. Under the proposed reallocation, the project development objectives, outcome indicators and credit closing date (i.e., March 31, 2012) will remain unchanged. This reallocation will improve implementation progress. There are no changes to the technical approach to the project, nor to the safeguards requirements under the project. This Project had proposed for an additional credit support of SDR 5.30 (US$ 7.98 million equivalent) in June 2010. Negotiation for this amount is completed and the package is scheduled to go before the board on January 9, 2011 and the additional credit is likely to be made effective sometime in February 2011. 7