Completion Report Project Number: 37328-013 Loan Number: 2330 September 2015 India: Madhya Pradesh State Roads Sector Project II This document is being disclosed to the public in accordance with ADB s Public Communications Policy 2011.
CURRENCY EQUIVALENTS Currency Unit India rupee/s (Rs) At Appraisal At Project Completion (1 May 2007) (31 December 2011) Rs1.00 = $0.0243 $0.0188 $1.00 = Rs41.1900 Rs53.1050 ABBREVIATIONS ADB Asian Development Bank EA executing agency EIRR economic internal rate of return EMP environmental management plan GSDP gross state domestic product IEE initial environmental examination km kilometer MPPWD Madhya Pradesh Public Works Department MPRDC Madhya Pradesh Road Development Corporation PCR project completion review PPMS project performance monitoring system QCBS quality- and cost-based selection RAMS road asset management system TA technical assistance NOTES (i) (ii) The fiscal year of the Government of India ends on 31 March. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2015 ends on 31 March 2015. In this report, "$" refers to US dollars. Vice-President W. Zhang, Operations 1 Director General H. Kim, South Asia Department (SARD) Director M. Teresa Kho, India Resident Mission (INRM), SARD Team leader Team members A. Bajaj, Senior Project Officer (Transport), INRM, SARD G. Mahajan, Senior Environment Officer, INRM, SARD M. Sharma, Associate Project Analyst, INRM, SARD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
BASIC DATA CONTENTS Page I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 1 A. Relevance of Design and Formulation 1 B. Project Outputs 2 C. Project Costs 3 D. Disbursements 4 E. Project Schedule 4 F. Implementation Arrangements 5 G. Conditions and Covenants 5 H. Related Technical Assistance 6 I. Consultant Recruitment and Procurement 6 J. Performance of Consultants and Contractors 7 K. Performance of the Borrower and the Executing Agency 8 L. Performance of the Asian Development Bank 8 III. EVALUATION OF PERFORMANCE 8 A. Relevance 8 B. Effectiveness in Achieving Outcome 9 C. Efficiency in Achieving Outcome and Output 9 D. Preliminary Assessment of Sustainability 10 E. Impact 11 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13 A. Overall Assessment 13 B. Lessons 13 C. Recommendations 14 i APPENDIXES 1. Design and Monitoring Framework 15 2. Summary of Project Outputs 18 3. Project Cost and Financing 20 4. Disbursement of ADB Loan Proceeds 22 5. Appraisal and Actual Implementation Schedules Compared 23 6. Chronology of Major Events 24 7. Organization Structure for Project Implementation 26 8. Status of Compliance with Major Loan Covenants 27 9. Technical Assistance Completion Report 37 10. Summary of Contract Packages 39 11. Economic Reevaluation 41 12. Summary of Socioeconomic Impacts 46 13. Contribution to ADB Results Framework 49
BASIC DATA A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan 7. Project Completion Report Number India 2330-IND Madhya Pradesh State Roads Sector Project II India Government of Madhya Pradesh acting through Madhya Pradesh Road Development Corporation $320 million PCR: IND 1539 B. Loan Data 1. Appraisal Date Started Date Completed 2. Loan Negotiations Date Started Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness In Loan Agreement Actual Number of Extensions 6. Closing Date In Loan Agreement Actual Number of Extensions 7. Terms of Loan Interest Rate Commitment Charges Maturity (number of years) Grace Period (years) Front-end Fee 8. Terms of Relending (if any) 5 March 2007 9 March 2007 24 April 2007 26 April 2007 31 May 2007 23 July 2007 20 October 2007 31 August 2007 0 31 December 2010 31 December 2011 1 LIBOR-based lending facility 0.35% 25 5 0 None 9. Disbursements a. Dates Initial Disbursement 23/10/2007 Effective Date 31/08/2007 Final Disbursement 29/05/2012 Original Closing Date 31/12/2010 Time Interval 55.7 Months Time Interval 40.0 Months
ii b. Amount ($) Category Original Allocation Last Revised Allocation Amount Increased (canceled) Amount Disbursed Undisbursed Balance 1. Investment Component 319,000,000 319,000,000-316,830,958 2,169,042 1A. Civil Works 307,000,000 307,000,000-306,708,518 291,482 1B. Consulting Services 12,000,000 12,000,000-10,122,440 1,877,560 2. Institutional Development 1,000,000 1,000,000-0 1,000,000 Total 320,000,000 320,000,000-316,830,958 3,169,042 Notes: The undisbursed amount was cancelled at loan financial closure on 5 October 2012. 10. Local Costs (Financed): - Amount ($) 0 - Percent of Local Costs 0% - Percent of Total Cost 0% C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost 267.9 258.4 Local Currency Cost 132.1 128.6 Total 400.0 387.0 2. Financing Plan ($ million) Cost Appraisal Estimate Actual Implementation Costs Borrower Financed 55.7 61.7 ADB Financed 320.0 316.8 Total 375.7 378.5 IDC Costs and other Financial Charges Borrower Financed 24.3 8.5 ADB Financed 0 0 Total 24.3 8.5 ADB = Asian Development Bank, IDC = interest during construction.
iii 3. Cost Breakdown by Project Component ($ million) Component Appraisal Estimate Actual A1. Sample Subproject (Lakhnadon-Mandla-Dindori, SH-10, about 190 km) 1. Civil Works 28.9 35.7 2. Relocation of Utilities 0.1 0 A2. Non-Sample Subproject (about 1,600 km) 1. Civil Works 277.8 327.6 2. Relocation of Utilities 1.5 0 3. Land Acquisition and Resettlement 0.1 0 Subtotal (A) 308.4 363.3 B. Consulting Services 12.0 11.2 C. Project Management 4.0 4.0 D. Institutional Development (Equipment) 1.0 0 Subtotal (A+B+C+D) 325.4 378.5 E. Contingencies 1. Physical Contingencies 32.5 0 2. Price Contingencies 15.8 0 F. Interest During Construction 24.3 6.8 G. Commitment Charges 2.0 1.7 Total 400.0 387.0 Note: (i) The actual cost for relocation of utilities is included in the cost for civil works; (ii) No cost incurred for land acquisition and resettlement during implementation. km = kilometer 4. Project Schedule Item Appraisal Estimate Actual A. Project Preparation Sample Subprojects Q1 2007 Q2 2007 Q1 2007 Q2 2007 Other Subprojects Q1 2007 Q2 2007 Q1 2007 Q3 2007 Q1 2009 Q3 2009 B. Construction Supervision Selection Q1 2007 Q3 2007 Q1 2007 Q3 2007 Supervision Q3 2007 Q2 2010 Q3 2007 Q4 2011 C. Civil Works Procurement Q2 2007 Q3 2007 Q2 2007 Q1 2008 Q2 2009 Q1 2010 Construction Q3 2007 Q2 2010 Q3 2007 Q2 2011 D. Technical Assistance Implementation Q4 2007 Q3 2008 Q2 2008 Q3 2009 Note: During implementation, three additional subprojects were prepared, approved and procured in 2009 2010.
iv 5. Project Performance Report Ratings Ratings a Implementation Period Development Objectives Implementation Progress From 31 May to 31 December 2007 Satisfactory Satisfactory From 1 January to 31 December 2008 Satisfactory Satisfactory From 1 January to 31 December 2009 Satisfactory Satisfactory From 1 January to 31 December 2010 Satisfactory Satisfactory From 1 January to 31 December 2011 b On Track a Project performance report ratings are based on parameters on implementation progress which are different than those used for the project completion report. b Based on new ratings for evaluation of project performance from 2011. D. Data on Asian Development Bank Missions Name of Mission Date No. of Persons No. of Person- Days Specialization of Members Fact-finding 15 25 January. 2007 7 63 a, a, c, f, f, f, f Appraisal 5 9 March 2007 2 10 a, d Inception 21 25 April 2008 4 20 a, a, a, e Review 1 27 May 2008 2 2 a, a Review 2 23 24 September 2008 1 2 a Review 3 16 20 February 2009 2 10 a, e Midterm review 15 24 September 2010 4 40 a, b, c, e Project completion review 17 24 December 2014 1 6 f a = transport specialist; b = environmental specialist; c = resettlement and social development specialist; d= counsel; e = analyst; f = consultant.
I. PROJECT DESCRIPTION 1. At the request of the Government of India, the Asian Development Bank (ADB) approved a loan of $320 million and a technical assistance grant of $1 million on 31 May 2007 for the Madhya Pradesh State Roads Sector Project II. 1 The primary objective of the project was to improve transport efficiency of the state road network in Madhya Pradesh, which would contribute to the expansion of economic opportunities and the reduction of poverty. The objective would be realized by (i) improving the state road network, (ii) facilitating safe and appropriate road usage, (iii) increasing efficiency of transport services, and (iv) enhancing the state government s capacity for road asset development and management. 2 2. At appraisal, the project comprised rehabilitation and reconstruction of about 1,800 kilometers (km) of state roads identified under the state road rehabilitation program. Road improvement works under the project included rehabilitating and improving existing roads, strengthening existing culverts and bridges, and constructing new bridges and cross-drainage structures. The project included consulting services to support implementation of the civil works. The total investment cost was estimated at $400 million, which was to be financed by the ADB loan of $320 million and the counterpart fund of $80 million equivalent from the Government of Madhya Pradesh (the state government). It was agreed that the project executing agency (EA) would be the state government acting through the Madhya Pradesh Road Development Corporation (MPRDC). The project would also enhance overall sector management capacity by providing (i) equipment for the state government to enhance sector capacity, such as road safety and control of overloading; and (ii) technical assistance (TA) to support the state government s sector development initiatives, especially for reform and capacity building of the Madhya Pradesh Public Works Department (MPPWD), including (a) enhancing planning capacity, (b) improving business processes, (c) improving human resources management, and (d) increasing private sector participation. 3. At appraisal, the project anticipated that the improved road network would enhance the overall road condition and usability, thus increasing travel speeds and reducing travel time, accidents, and overloading. The project would also enhance MPPWD s capacity for road asset development and management. This would improve governance in road administration and accountability, and create an environment that encouraged competition and efficiency within MPPWD and in the construction industry, ensuring more efficient road asset development and management, and higher quality of construction and maintenance. In addition, the project implementation would lead to social and economic development in the state, including improved access to socioeconomic services, increased employment opportunities, and more transport services. In turn, this would reduce poverty in the region and stimulate economic growth and human development in Madhya Pradesh. The economic internal rate of return of the project was estimated at 13%-49% for the candidate state roads. II. EVALUATION OF DESIGN AND IMPLEMENTATION A. Relevance of Design and Formulation 4. The state of Madhya Pradesh is located in the center of India. At appraisal, about half of 1 2 Government of India and Asian Development Bank, 23 July 2007. Loan Agreement on Madhya Pradesh State Roads Sector Project II. Delhi. ADB. May 2007. Report and Recommendation of the President to the Board of Directors on Proposed Loan and Technical Assistance Grant to India for the Madhya Pradesh State Roads Sector Project II. Manila.
2 the state roads in Madhya Pradesh were assessed to have deteriorated severely and required major rehabilitation. The state government made substantial efforts to reduce the backlog of deferred road maintenance as set out in Refurbishing Roads in Madhya Pradesh. 3 The state road rehabilitation program was to immediately strengthen and improve the state road network by 2009/10. Under the State Road Policy, the state government also took on sector development initiatives to develop and maintain the road network in accordance with Indian Roads Congress standards, develop efficient asset management systems, enhance the capacity for effective and efficient road construction, attract private sector in financing roads, and ensure high standards of road safety and travel comfort. 5. Guided by India: Country Strategy and Program (2003 2006) and its updates, ADB assistance to India aimed to support infrastructure-led poverty reduction. 4 Madhya Pradesh was a focal state for ADB s lending activities as it was one of the poorest states in India and road was the predominant mode of transport services. Before the project, ADB had provided loans and TA amounting to about $3.4 billion to India, including three loans to improve the state road networks of Madhya Pradesh in 2002, Chhattisgarh in 2003, and Uttaranchal in 2006. ADB also provided support to improve state road sector management capacity. The first loan to Madhya Pradesh road sector development demonstrated major sector reform achievements, including establishment of MPRDC and its adoption of best practices for planning and maintenance systems, financial management, and public procurement. The project was proposed by the state government to pursue sector development and improve the state road network based on the substantial progress with sector reforms under the first ADB assistance. 5 6. ADB provided a TA to support the state government in project formulation and preconstruction activities. 6 The project remains relevant and consistent with the state government s objectives and ADB s country partnership strategy in its design and formulation. At completion, 1,698.64 km of state roads had been rehabilitated or reconstructed (para.7), which had effectively improved the connectivity in the project areas; and the TA to support sector development initiatives was successfully implemented (para.17). The outputs and outcomes of the project have met India s development objectives and ADB s country partnership strategy. 7 The project design and monitoring framework (DMF) with results is in Appendix 1. B. Project Outputs 1. Investment Component 7. At appraisal, the project anticipated the rehabilitation or reconstruction of about 1,800 km state roads, including one sample subproject (Lakhnadon-Mandla-Dindori road) and other 21 candidate roads. During early stages of implementation, the project reviewed and selected 1,627.49 km of candidate roads according to the selection criteria and approval process agreed and specified in the appraisal documents. 8 Subsequently, the state government and ADB 3 4 5 6 7 8 Government of Madhya Pradesh. 2005. Refurbishing Roads in Madhya Pradesh. Bhopal. ADB. 2003. Country Strategy and Program (2003-2006) for India. Manila. ADB. 2002. Report and Recommendation of the President to the Board of Directors on the Proposed Loans and Technical Assistance Grant to India for the Madhya Pradesh State Roads Sector Development Program. Manila. (Loan 1958-IND and 1959-IND, approved in December 2002.) A component TA of $250,000 for project preparation support for the project was provided under the TA Cluster to India for Project Processing and Capacity Development (ADB. 2006. Technical Assistance Cluster to India for Project Processing and Capacity Development. Manila.) ADB. 2009. Country Partnership Strategy (2009-2012) for India. Manila. During implementation, the 22 roads were packaged into 15 subprojects.
3 appraised and approved 3 additional subprojects with a total length of 71.15 km by using the loan balance. 9 Upon completion, the project had rehabilitated or reconstructed 25 roads (18 subprojects) totaling 1,698.64 km of state roads, involving widening and strengthening the roads from single-lane or intermediate-lane roads to intermediate-lane or two-lane standards with bituminous pavement. The civil works also repaired, strengthened, and/or constructed 133 bridges and 1,270 culverts, and installed road signage and furniture. During implementation, the project made minor engineering revisions in the project roads due to changes in field conditions and to enhance their durability and performance. This included adjustments in pavement composition, increase in utility shifting as per site requirements, and adopting cement concrete pavement in the built-up sections and waterlogged areas. MPRDC and ADB approved the related contract variations. 10 8. During implementation, the contractors carried out quality control of construction in accordance with contractual requirements. The supervision consultants assessed and supervised the works to ensure that the specifications had been met. No significant defects or quality problems were reported during the defect notification period. 11 The ADB s project completion review (PCR) mission in December 2014 observed that the rehabilitated roads were of good quality, enabled comfortable ride as the international roughness indices were low, 12 and a routine maintenance system was in place to keep the roads in good condition. Appendix 2 provides a summary of project outputs. 2. Institutional Development Component 9. At appraisal, $1.0 million in loan funds were allocated for procuring equipment necessary for the state government to enhance sector capacity, such as in road safety, and control of overloading. During implementation, MPRDC analyzed the requirement for equipment for road safety and overloading with assistance from the TA consultants. The state government observed that addressing road safety and overloading control required a comprehensive integrated programmatic approach and involvement of all stakeholders. This resulted in change in government policy, and the $1.0 million provision for equipment was not utilized. 13 Under the updated policy, the state government, through a project with other stakeholders, is establishing (i) an accident response system for Madhya Pradesh with its own funds, and (ii) computer networked check-posts at all the 24 entry points along the state border with private sector participation for control of overloading. C. Project Costs 10. At appraisal, the project cost was estimated at $400.0 million equivalent, which also included contingencies and financial charges. The estimated civil works cost for the sample subproject (Lakhnadon-Mandla-Dindori road) was $28.9 million and a provision of $277.8 million was made for the remaining subprojects. Upon completion, the total project cost was $387.0 million, consisting of $363.3 million for the investment component, $15.2 million for consulting services and project implementation management, and $8.5 million for financial charges. Compared to appraisal, the actual project cost was about 3.3% lower, mainly as a result of less 9 10 11 12 13 The loan balance resulted from lower loan interest rate and the exchange rate fluctuation since loan approval. The cost for the quantity changes was below 3.5% of the total contract cost. The defects notification period is 1 year after civil work completion as per the works contracts under the project. The international roughness index of the project roads was in the range of 1.5 2.2, as measured by the supervision consultants. MPRDC letter to ADB. 12 December 2012. Utilization of US$1 million for Institutional Development (Equipment) under ADB Loan 2330-IND.
4 interest paid due to lower interest charges during implementation ($17.5 million), and cancellation of equipment procurement ($1.0 million). The civil works cost was 17.8% higher, mainly caused by statutory price escalations during implementation in accordance with the conditions of the contracts (about 75% of the total contract cost variations) and physical contingencies due to field conditions. Appendix 3 compares project costs at appraisal and at completion. 11. Under the financing plan at appraisal, the ADB loan of $320.0 million (80% of the total project cost) and government funds of $80.0 million equivalent (20% of the total project cost) would finance the project. At completion, slightly lower final project cost together with minor cancellation (para. 12) resulted in ADB financing 81.9% with government financing decreasing to 18.1% (Appendix 3). D. Disbursements 12. ADB approved the loan on 31 May 2007. The loan was signed on 23 July 2007, and became effective on 31 August 2007. The loan proceeds were disbursed in accordance with ADB s Loan Disbursement Handbook (January 2007, as amended from time to time). Reimbursement procedures as provided in the Handbook were used for civil works and consulting services. The statement of expenditure method was not used during implementation as the individual payments were generally larger than the threshold for this method. The loan agreement was amended on 9 October 2007 to reflect the changes to the calculation of rebates and surcharges under ADB s LIBOR-based loans. 14 The first loan disbursement was made on 23 October 2007, which was for the supervision consulting services. The loan disbursements peaked in 2009 and 2010 ($101.2 million and $124.1 million respectively). Due to implementation delays in civil works (para. 13), the loan closing date was extended once from original 31 December 2010 to 31 December 2011 upon request from the government. Along with the civil works completion, the loan was physically closed on the extended date of 31 December 2011. 15 At loan financial closure on 5 October 2012, $316,830,958 was disbursed (99.0% of the loan amount) and the remaining undisbursed loan amount of $3,169,042 was canceled (1.0% of the loan amount). 16 The actual disbursements of the ADB loan are in Appendix 4. E. Project Schedule 13. At appraisal, it was expected that the project would be implemented over 3 years, inclusive of procurement and preconstruction activities in 2007, and be completed by 30 June 2010. The supervision consultants mobilized in August 2007 and the civil works started in September 2007 (para. 19 and 20). During the inception mission in April 2008, ADB found progress was behind schedule due to contractors slow mobilization of equipment, key personnel and labor. 17 The contractors were instructed to submit a revised work program to make up for lost time. Accordingly, action plans were drawn for each contract which included 14 15 16 17 ADB letter to Ministry of Finance of India. 9 October 2007. Amendments to Rebate and Surcharges Provisions of Loan Agreements. ADB Fax to Ministry of Finance. 19 May 2010. Loan 2330-IND: Madhya Pradesh State Roads Sector Project II Approval of Extension of Loan Closing Date. ADB Fax to Ministry of Finance. 18 October 2012. Loan 2330-IND: Madhya Pradesh State Roads Sector Project II Final Cancellation and Actual Loan Closing Date. In March 2008, the Government of India effected a change in certain provisions for customs and excise exemption for construction equipment, which resulted in delay in mobilizing the equipment being imported/procured by the contractors. In the process, about 2 to 2.5 months of the working season were lost.
5 mobilization of additional resources by the contractors to accelerate their physical and financial progress. ADB also requested that the supervision consultants work closely with the contractors. One contract was terminated in September 2009 due to the contractor s poor performance and a new contract was procured in January 2010 to complete the balance of works. During implementation, 3 additional subproject roads were appraised and approved which were procured in late 2009 to early 2010.The state government assessed that additional time was required to complete the civil works, particularly on the additional subprojects. ADB approved a loan extension upon request from the Government of India (para. 12). The ADB midterm review mission in September 2010 observed that after initial delays in mobilization, all the contractors had improved their performance by implementing series of measures, including mobilization of additional resources, and 10 out of the 18 contract packages had been completed. The mission noted that recouping lost time was facilitated by MPRDC through early decision-making and fast processing of payments. Eventually, all contract packages were substantially completed by 28 April 2011, which was about 4 months later than the anticipated loan closing date at appraisal and 8 months before the extended loan closing date. 14. The actual implementation schedule compared with the schedule at appraisal is in Appendix 5, and a chronology of major events is in Appendix 6. F. Implementation Arrangements 15. As agreed at appraisal, the state government was the EA for the project acting through MPRDC. MPRDC is wholly owned by the state government and was originally established as the project management unit for the previous ADB financed project the Madhya Pradesh State Roads Sector Development Program (footnote 5). MPRDC was designated the State Highway Authority in October 2005, responsible for development and maintenance of all state roads in the Madhya Pradesh. MPRDC is headquartered in Bhopal and has seven regional offices. As agreed, a chief engineer at MPRDC was designated the the project in charge for the project implementation. MPRDC, assisted by the consultants, implemented all aspects of project management, including project preparation and design, procurement and contract management, financial management and audit, construction supervision and quality control, environmental and safeguard measures, institutional strengthening, and loan covenant compliance. The Environmental and Social Cell at headquarters, reporting to the chief engineer, was responsible for ensuring that the subprojects complied with environmental and social safeguards. The subprojects were categorized under Bhopal and Jabalpur regions according to their geographical locations. The divisional managers of the regional offices were delegated adequate technical and administrative authority for field decisions for the civil works. For matters attracting financial and contracting implications, the decisions were referred to MPRDC headquarters. Two consulting firms were engaged to assist MPRDC with supervision of construction, and monitoring and reporting of project progress. An updated organization chart of MPRDC is in Appendix 7. G. Conditions and Covenants 16. The EA complied with all loan covenants for the project, enabling the state to carry out the project with due diligence and efficiency, and in conformity with sound administrative, financial, engineering, and environmental practices. The EA provided adequate oversight, coordination, and the financial support required for project implementation. It submitted audited financial statements to ADB, albeit with some delays in the initial years of implementation. MPRDC was fully operational with adequate staff and resources. The EA selected all subprojects in accordance with the criteria and approved by the process specified in the project
6 appraisal document. Likewise, the EA carried out the procurement of all civil works contracts and engagement of consultants in accordance with ADB guidelines and procedures. The EA implemented the measures for environmental and social aspects were implemented. The EA prepared and submitted the project reports as required and submitted to ADB on a timely basis. MPRDC now carries out road maintenance through zonal contracts on an annual basis, and receives regular fiscal allocations from the state government. It is also pilot testing road maintenance through public private participation. The status of compliance with major loan covenants is summarized in Appendix 8. H. Related Technical Assistance 17. In conjunction with the project, a TA was provided to support the state government s sector development initiatives. 18 The objective was to strengthen MPPWD s capacity in road asset development and management. The TA of $1.0 million was financed by the Government of Japan through the Japan Special Fund, and implemented by an international consulting firm. The TA aimed to equip MPPWD with (i) norm-based planning and budgeting, (ii) improved business practices, and (iii) improved human resources management. The TA also aimed to review the state s road sector institutions and suggest an alternative realigned structure to further facilitate long-term road sector reform. The TA envisaged making recommendations to modernize MPPWD s operations by adopting technologies and practices in the context of the MPPWD environment. MPPWD was the executing agency for the TA. 18. The TA commenced on 7 April 2008 and was completed on 30 September 2009. The TA consultants carried out the activities specified in the terms of reference (TOR) including (i) reviewing MPPWD s institutional structure and capacity in road development, (ii) strengthening planning capacity, (iii) enhancing the MPPWD s business practices in procurement and contracting processes, (iv) human resource management, and (v) improving road maintenance efficiency. The TA consultants prepared a set of manuals and guidelines, and conducted a large number of in-country training sessions. In addition, the TA supported setting up an IT training center, and several basic computer trainings were conducted. During implementation, the consultants delivered the required reports timely, including the final report, submitted in September 2009. These activities and achievements have substantially improved MPPWD s capacity in road development and management. The achievements were well recognized by MPPWD. Upon completion, a total of 30.55 person-months international and 40.02 personmonths national consulting services had been provided. The consultants work was rated as satisfactory. The TA realized its objectives of assisting the state government to strengthen MPPWD s capacity in road asset development and management. The achievements were well recognized by the state government. The TA is rated successful. The TA completion report is attached in Appendix 9. I. Consultant Recruitment and Procurement 19. At appraisal, it was envisaged that two international consulting firms would be recruited for the construction supervision using ADB s quality- and cost-based selection (QCBS) procedures and in accordance with ADB s Guidelines on the Use of Consultants (2006, as amended from time to time). About 56 person-months of international and 1,760 person-months of national consultants were expected to be required. Advance contracting for the supervision consultants was initiated at appraisal. The process of recruitment started in January 2007. 18 An associated TA of $1.0 million for Institutional Strengthening of Madhya Pradesh Public Works Department (TA4934-IND), was implemented during September 2009 December 2010.
7 Fourteen consulting firms were shortlisted and seven of them were technically qualified. The financial proposals of the qualified firms were evaluated by MPRDC. After ADB approval of MPRDC s evaluation of financial proposals and final ranking on 20 June 2007, the selection of two consulting firms was finalized one each for the Bhopal and the Jabalpur regions. The contracts were signed on 6 August 2007 and were scheduled for completion in October 2010. Due to delays in implementation of the civil works, the contracts for the supervision consultants were extended until the civil works were completed. 20. The procurement of civil works was carried out in accordance with ADB s Procurement Guidelines (2006, as amended from time to time). At appraisal, a procurement plan was prepared. The civil works were packaged into 15 contracts taking into account various factors, including geographic location and size. All the civil works contracts were procured through international competitive bidding procedures. ADB s standard bidding documents for large works with post-qualification under the two-envelope system was adopted. For expediting project implementation, ADB approved advance contracting for the civil works. The bid documents were approved and the invitation for bids was published in March 2007. Bids were received until 8 June 2007. MPRDC evaluated the bids and submitted the evaluation reports on technical and price bids to ADB for approval. The qualifications of the bidders were approved by ADB on 2 August 2007. After ADB approval, 11 contracts were awarded during August November 2007. Four contracts were awarded during December 2007 January 2008 pursuant to rebidding due to lack of qualified bidders or rejection of bids that were significantly higher than the estimated costs. The total contract price of these 15 civil works contracts was Rs13 billion, which was about 4.7% lower than the estimate at appraisal. Due to poor progress on package 5, the related contract was terminated in September 2009. The contract for the balance of work of package 5 was procured in January 2010. During implementation, three more subprojects totaling 71.15 km length were prepared and approved during January July 2009 utilizing the likely loan balance. The procurement of these new contracts followed the prescribed procedures. These three contracts were awarded during June 2009 February 2010. During implementation, MPRDC and ADB approved contract variations incorporating physical and price contingencies. All the project contract packages with contracted and actual costs are summarized in Appendix 10. J. Performance of Consultants and Contractors 21. The overall performance of the consultants is rated satisfactory. At appraisal, it was envisaged that 56 person-months of international and 1,760 person-months of national consultants would be required for the project construction supervision. The consultants were engaged to assist MPDRC as per terms of reference to supervise project implementation and ensure high standards of quality assurance under Federation Internationale des Ingenieurs- Conseils conditions. In addition, the consultants were also required to assist MPDRC to comply with environment and social safeguards, undertake project performance monitoring and evaluation, and prepare progress reports and maintenance manuals. Two consulting teams were engaged as engineers for the subprojects in Bhopal and Jabalpur regions during implementation. The consultants undertook the tasks specified in the terms of reference. Due to overall delays in implementation of the civil works, the contract periods of the consultants were extended and the consulting services were completed in November 2011 for both consulting teams. At completion, the project had used 66 person-months of international consulting services and 3,875 person-months of domestic consulting services. 22. The performance of the civil works contractors is rated satisfactory. The civil works were implemented under 18 contract packages. The performance of one of the contractors (Package
8 5) was persistently slow and the contract was terminated in September 2009. This contractor is rated unsatisfactory. A new contract was procured in January 2010 to complete the balance of works of the terminated contract. After the initial delays, through the joint efforts of MPRDC, supervision consultants, and the ADB missions, the performance of contractors improved significantly and progress accelerated. By the end of 2010 (original loan closing date), eight out of the 18 civil works contracts were substantially completed. The remaining contracts were fully completed before April 2011, some 8 months ahead of the extended loan closing date. The quality of the civil works met the road specifications. The traffic management and compliance with environment and safety norms by the contractors were satisfactory. K. Performance of the Borrower and the Executing Agency 23. The overall performance of the borrower and the EA is rated satisfactory. The borrower of the loan was the Government of India and the EA was the Government of Madhya Pradesh (the state government). The related government agencies, mainly the Ministry of Finance, actively participated in the coordination and monitoring of project implementation. The state government provided counterpart funding for the project implementation. Implementation complied with all loan and project covenants (Appendix 8). MPRDC, assisted by the consultants, implemented all aspects of project management, including project preparation and design, procurement, contract management, financial management and audit, construction supervision and quality control, environmental and safeguard measures, institutional strengthening, and loan covenant compliance. MPPWD also successfully implemented the TA to support the state government s sector development initiatives. The performance of the borrower, the EA and MPRDC for implementing the project are satisfactory. L. Performance of the Asian Development Bank 24. The performance of ADB is rated satisfactory. ADB s headquarters in Manila administered the preparation and early implementation of the project and the TA, then delegated these to the India Resident Mission effective 28 April 2008. During implementation, ADB was closely involved in identifying and resolving issues through tripartite portfolio review meetings and regular fielding of project review missions. ADB provided substantial input to MPRDC in preparing detailed action plans for expediting progress by the contractors. ADB approved project documents and disbursed payment claims in a timely manner. On India s request, ADB extended the loan closing date once to facilitate implementation and completion of the project. In addition, ADB conducted training on many aspects related to the project, which ensured successful implementation. In general, the government recognized the role of the ADB missions in providing timely advice on technical and contract administration matters. III. EVALUATION OF PERFORMANCE A. Relevance 25. At both appraisal and completion, the project was rated relevant as the project was an integral part of India s strategy for economic growth and poverty reduction through the development of highways and roads. ADB's Country Partnership Strategy (2009 2012) for India was designed to support government efforts to address some of the constraints identified in the government s Eleventh Five-Year Plan. 19 In the County Partnership Strategy (2013 2017) for India, ADB continues to support the strategic goals of the government faster, more 19 ADB. 2009. Country Partnership Strategy (2009 2012) for India. Manila
9 inclusive and sustainable growth emphasized in the government s Twelfth Five-Year Plan. 20 By the end of 2013, ADB had provided 49 loans totaling $10,142.05 million to the transport sector in India, accounting for about 32.05% of ADB s lending to India. 21 This project loan was the second intervention for state roads in Madhya Pradesh. Given its success, ADB approved a third loan for state roads and a fourth loan for district roads in Madhya Pradesh to assist with its road sector development. Overall, the project is relevant both to India s development objectives and plan, and to ADB s country partnership strategy and lending policy. 26. Performance, key problems and opportunities of the road subsector in Madhya Pradesh were well analyzed, and lessons from previous projects in India, especially the previous road project in Madhya Pradesh (footnote 5), were incorporated in the project design. Engineering design was prepared to minimize social and environmental impacts. Advance actions were taken to ensure that the construction could be commenced without unnecessary delay. In addition, the project supported state government s initiatives for sector development, especially for MPPWD reform and capacity building. Overall, the project design and formulation were adequate. B. Effectiveness in Achieving Outcome 27. The project is rated effective in achieving its purposes and outcomes (Appendix 1). At appraisal, most of project roads were 3.5 meters (m) in width and in poor condition. Upon completion, 25 state roads totaling 1,698.64 km had been rehabilitated or reconstructed. The roads were widened to 5.5 7.0 m and observed to be in good quality, with international roughness indices ranging between1.5 2.2, a significant improvement from the original roughness indices of 3.5 7.0. The average vehicle speeds on project roads increased from 25 km 30 km/hour before the project to 30 km 60 km/hour after the project. The improvement of the project roads has led to a substantial reduction in vehicle traveling time and transport costs for both passengers and freight. According to the surveys after project completion, the average vehicle traveling time was reduced by about 52%, compared to an anticipated average improvement of 25% at appraisal. The vehicle operation cost reduced by about 36% after the project. The project has improved connectivity in project areas, leading to remarkable impacts to local socioeconomic development (para. 36). 28. The associated TA assisted MPPWD in various aspects of institutional reform and capacity-building. MPPWD staff gained exposure to advanced concepts in road development and management. Since project completion, MPRDC has taken up new initiatives, including the establishment and statewide implementation of (i) an accident response system for Madhya Pradesh with its own funds, and (ii) computer networked check-posts at all the 24 entry points along the state border with private sector participation for control of overloading. The TA has significantly facilitated improvement in the effectiveness and efficiency of the state road sector development and management. C. Efficiency in Achieving Outcome and Output 29. The project is rated efficient given the traffic growth and robust results of economic reevaluation. The project was implemented within cost and with minimal delay. 30. After completion of the road improvements, the project s supervision consultants carried 20 21 ADB. 2013. Country Partnership Strategy (2013 2017) for India. Manila ADB. 2014. Asian Development Bank & India Fact Sheet. Manila
10 out traffic surveys in 2010 and 2011. 22 Results showed that traffic had increased by an average 31% compared to traffic volumes before the project. Actual traffic volumes increased much faster (9.4% per annum) than forecast at appraisal (about 7.4% in 2007 2011). By vehicle types, light trucks increased by about 32.7% per year, implying fast industrial and agricultural development in the project areas. 31. The ADB PCR mission reevaluated the economic internal rate of return (EIRR) for the project roads using methodology similar to that used at appraisal. The reevaluated EIRR was calculated at 29.7% for the whole project in comparison with forecast 26.2% at appraisal. 23 The higher EIRR was due mainly to higher traffic volumes and lower project investment costs. The EIRR is above the ADB recommended discount rate of 12%. The project is therefore considered to be economically viable. Results from the sensitivity analysis indicate that the project continues to be economically viable for all scenarios. If a 50% maintenance cost increase were to be combined with a 50% benefit reduction, the EIRR would be 15.7% for the whole project. The sensitivity analysis also indicates that the EIRR is more sensitive to changes in benefits. Therefore, the state government needs to pay particular attention to socioeconomic development in the project area, such as fostering transport services, and increasing incomes for rural road users. Appendix 11 presents the economic reevaluation. D. Preliminary Assessment of Sustainability 32. The project is rated likely sustainable by considering the institutional and financial arrangements for the road maintenance, fast growing traffic and its impacts, and ADB s continued financial and technical support to the state road development in Madhya Pradesh. 33. Established in 2004, MPRDC is a state government-owned company responsible for the development and maintenance of all the state roads, totaling 15,231 km in Madhya Pradesh. Of these, about 5,016 km were developed and maintained through build-operation-transfer modality. Currently, MPRDC has 173 staff out of the total 277 sanctioned posts. Additional staff is being recruited and taken on deputation from time to time depending on work load. MPRDC receives fiscal allocations from the state government for road development and maintenance. Fiscal allocations were Rs6,030 million in 2011/12, Rs6,760 million in 2012/13, and Rs7,810 million in 2013/14. All road maintenance activities, including routine and periodical maintenance for non-tolled roads, are outsourced through public bidding. The ADB PCR mission noted that the project roads were in good condition even after 4 5 years of operation and routine maintenance was in place. MPRDC is now piloting road maintenance concessions to the private sector to improve maintenance efficiency. By December 2014, 14 roads, including two roads rehabilitated with ADB assistance, have been selected for pilot testing. Designated MPRDC staff regularly inspect the roads and instruct road maintenance activities as per road condition and stipulated road maintenance specifications. Upon successful testing of road maintenance through the private sector, this model might be applied to other state roads. 34. Traffic on project roads has increased rapidly, which reflects good road condition and enhanced road transport capacity. Considering the socioeconomic development trends and as well as emphasis on the road network development, it is expected that the traffic would keep increasing in near future. Road safety has been an issue of serious concern. The state government and the road/transport authorities are addressing the issue. The road and transport 22 23 The traffic surveys were conducted in 2010 for the original 15 subprojects and in 2011 for the three additional subprojects. The EIRRs at appraisal were 13% 49% for the 22 candidate roads.
11 authorities are installing additional traffic safety facilities in ongoing projects. The state government is establishing a statewide accident response system. It is also implementing a vehicle overloading control system, including establishing axle-load inspection stations at all 24 entry points to Madhya Pradesh. 35. ADB continues to extend financial and technical support to the state road development in Madhya Pradesh with ADB approving a third project loan for state roads in 2011, 24 and a fourth project loan for rehabilitation of district roads in Madhya Pradesh in 2014. 25 Besides these, ADB has been supporting Madhya Pradesh though technical assistance in the state roads sector. E. Impact 1. Socioeconomic Impacts 36. The project has had significant socioeconomic impacts in the project areas. Madhya Pradesh has experienced rapid economic development with actual gross state domestic product (GSDP) annual growth rates of 9.23% in 2006/07, 4.69% in 2007/08, 12.37% in 2008/09, 9.55% in 2009/10, and 8.96% in 2010/11, and an average of 10.06% per annum in the Eleventh Five- Year Plan (2007 2012). In the eleventh plan period, the GSDP growth by sectors was 8.75% for the primary sector, 11.11% for the secondary sector, and 10.08% for the tertiary sector. The Twelfth Five-Year Plan (2012 2017) has a target average GSDP growth rate of about 9% per annum. 37. At appraisal, the social impact of the project on poverty reduction, gender, HIV/AIDS, human trafficking, and others, was assessed. The assessment didn t identify any adverse impact on tribal groups within the project influence areas and also noted that indigenous groups in the project area had been assimilated into the local population. Nonetheless, an indigenous people development framework was prepared at appraisal in accordance with ADB s Policy on Indigenous Peoples (1998), should there be a future need to prepare an indigenous people development plan. During implementation, a project performance monitoring system was developed that included indicators for monitoring the socioeconomic impacts of the project on economic growth, transport costs, access to social service, reduction of poverty, increase in employment opportunity, road safety, road improvement, as well as other measures. The supervision consultants carried out the baseline surveys in 2007 and follow-up surveys in 2010 and 2011 after civil works completion. Two project performance monitoring and evaluation reports were prepared and submitted to ADB in 2011 for the Jabalpur region and in 2012 for the Bhopal region. 26 The reports indicated that the project brought substantial positive socioeconomic impacts to the project areas, mainly:(i) traffic increased by 26.1% 47.1% on project roads; (ii) average vehicle traveling time fell by about 52%; (iii) actual vehicle operation cost fell by over 30%; (iv) employment of 1,720 man-years was provided by the project, including 759 man-years for unskilled labor; (v) household income increased by 78% and the poverty ratio fell from 32% to 28%; (vi) travel time to access health care fell on average by 58% for public health centers and by 50% for major hospitals; (vii) many new hotels, shops and 24 25 26 ADB. 2011. Report and Recommendation of the President to the Board of Directors on Proposed Loan and Technical Assistance Grant to India for the Madhya Pradesh State Roads Sector Project III. Manila. ADB. 2014. Report and Recommendation of the President to the Board of Directors on Proposed Loan to India for the Madhya Pradesh District Connectivity Sector Project. Manila. MPRDC. 2012. Project Performance Monitoring and Evaluation Report (Package 1 Bhopal). Intercontinental Consultants and Technocrats Pvt. Ltd. MPRDC. 2011. Project Performance Management System (Package 2 Jabalpur). Scott Wilson Ltd. - Jabalpur.
12 garages opened along project roads, providing substantial new working opportunities for local people; (viii) price for land along the project roads increased by an average 74% for agricultural land and 111% for commercial land; and (ix) road safety features incorporated in the project road design and construction have significantly improved the road safety on project roads. A summary of the socioeconomic impacts is in Appendix 12. 38. The loan required that the state government should ensure through MPRDC that the civil works contracts under the project incorporate provisions for HIV/AIDS and human trafficking awareness programs for labor, and not employ or use children as labor. During implementation, the contractors complied with the related requirements stipulated in the contracts. The local health agencies and the supervision consultants inspected the worker s campus and provided training on the awareness and prevention of HIV/AIDS. MPRDC confirmed that no child labor was used for project implementation. 2. Environmental Safeguards 39. The overall environment categorization for the project was B as the project roads were not expected to have adverse environmental impacts as shown in the initial environmental examination (IEE) of the sample subproject. The IEE duly showed that the environmental impact would mostly occur during construction due to clearing for widening of carriageways, construction work related to compaction of embankments and cut and fill, as well as from quarrying to support construction activities. The environmental impacts were assessed to be temporary and, therefore, a further EIA was not required. Nevertheless, adequate mitigation measures were provided in the environmental management plan (EMP). 40. MPRDC implemented the overall mitigation measures, whilst some were implemented by the contractors. The Environmental and Social Cell of MPRDC was responsible for monitoring EMP implementation. The environmental assessment of the follow-up subprojects was carried out and the IEE for each civil works package was prepared in accordance with the Environmental Assessment and Review Framework, which was formulated to ensure that follow-up subprojects complied with national laws and ADB s Environment Policy (2002). The identified mitigation measures were incorporated into the design. During implementation, MPRDC and civil works contractors obtained all permissions required from government agencies according to the applicable statutory environmental regulations to enable them to work in reserved forest areas for cutting trees, and to establish and operate construction equipment. 27 No changes in specific locations or alignments of project roads were made. MPRDC, through its environmental expert, closely monitored the implementation of the environment management and monitoring plan for all the packages. The main impacts during construction were dust and traffic management, which were addressed through regular sprinkling of water and deploying of flag persons. The supervision consultants designated existing site staff for environmental coordination as an additional responsibility, over and above the environmental experts assigned to the project. A complaint system was established at each construction site for effective and timely redress. Several workshops on compliance of environment safeguards were conducted. MPRDC, assisted by the consultants, prepared and submitted the required semi-annual environmental monitoring reports covering construction sites, pollution control measures adopted, measures for workers safety, and camp site, among others. During implementation, MPRDC didn t receive any complaints from the public. With improved road conditions, less traffic congestions and reduced dusty conditions have been reported. This, in turn, has reduced 27 Madhya Pradesh Forest Department, Department of Revenue, MP Pollution Control Board, Department of Mining, Directorate of Explosives and others.
13 idling of vehicles resulting in less vehicular emissions. At project completion, a final environmental monitoring report was submitted to ADB. The project complied with all environmental covenants stipulated in the loan agreement. 3. Land Acquisition and Resettlement 41. At appraisal, it was envisaged that the road rehabilitation and reconstruction would be carried out within the available right-of-way, and no land acquisition was expected. The project design avoided or minimized the need for land acquisition and involuntary resettlement by adopting the most feasible technical design. The assessment of the sample subproject confirmed that it did not entail any involuntary resettlement and land acquisition. Nonetheless, a resettlement framework was prepared for the project, in accordance with ADB s Involuntary Resettlement Policy (1995), to address any potential adverse resettlement impacts on assets such as land, structures, and cultural assets arising during detailed design and construction of the sample subproject and for follow-up subprojects. Resettlement plans, if required for future subprojects, were to be prepared in accordance with the agreed resettlement framework. ADB asked MPRDC to ensure that no civil works contractor commenced construction or displaced people until those affected were compensated in accordance with a resettlement plan acceptable to ADB. During ADB s inception mission, no land acquisition or resettlement impacts were identified for the original civil works contract packages. Upon completion, it was reported that no land acquisition or resettlement were required for the project. IV. OVERALL ASSESSMENT AND RECOMMENDATIONS A. Overall Assessment 42. The project is rated successful. The project is considered relevant for India s overall development objectives and ADB s country partnership strategy. The project has effectively and efficiently achieved the outcomes and outputs anticipated at appraisal. The improved state roads had a significant impact on connectivity and supported regional socioeconomic development in the project areas. The project has had significant socioeconomic impacts for local residents, particularly the poor. The project is likely sustainable by considering the institutional and financial arrangements for road maintenance and safety. The economic reevaluation indicates that the project continues to be viable. Through the related TA, the project supported institutional reform and capacity building of MPPWD. However, project implementation experienced some delays, which postponed the anticipated benefits. B. Lessons 43. Implementation delay. The project implementation initially experienced delays mainly due to slow mobilization by the civil works contractors, even though the pre-construction activities were carried out in a timely fashion by MPRDC. Subsequently, the termination of a poorly performing contractor and procurement of a new contractor for completing the balance of works, and the addition of three new subprojects in 2009 2010 further affected the implementation schedule. Nonetheless, ten civil works packages were completed before original loan closing date, whilst the others were completed about 8 months before the extended loan closing date. This was achieved by close coordination between MPRDC and ADB in identifying issues and preparing action plans to expedite the implementation and recoup time lost. Consequently, the contractors improved their planning and mobilized additional resources. The supervision consultants closely monitored the progress achieved by the contractors on the action plan. The recouping of time lost was facilitated by MPRDC through early decision-making
14 and fast processing of payments. Timely identification of the issues, formulation of suitable action plans and close monitoring of progress helps improve project implementation. 44. Performance of contractors. Despite reiterated requests and financial support from MPRDC, one civil works contractor continued to perform poorly and the contract had to be terminated. Incorporating additional evaluation criteria in the bidding document on past poor performance or terminated or abandoned contracts would facilitate identification of such contractors in future procurement activities. 45. Financial management. Based on observations of financial auditors, ADB recommended MPRDC to strengthen internal audit system with regard to nature and scope of verification, timely preparation of audit reports, and to improve fund management. These measures together with regular and robust assessment of financial sustainability would facilitate better financial management. C. Recommendations 1. Project Related 46. Future monitoring. The project was well implemented and completed. MPRDC is already implementing a third state roads project with ADB assistance. The state government should reassess project performance about 5 years after project completion, when the full benefits of the project will be apparent. 47. Further action or follow-up. The state government should ensure the measures for continued sustainability of the project. MPRDC as State Highway Authority has emerged as a model for successful project implementation in state roads and is already being replicated by some other states in India. There is a need to document the institutional framework and working of MPRDC, which should be disseminated for the benefit of other road sector organizations. 48. Timing of the project performance evaluation report. The project performance evaluation report may be prepared in 2018 or later when the third state roads project in Madhya Pradesh would have been completed and operational for about 2 years. By then, traffic development, road maintenance and physical condition, benefits attained and socio-economic impacts can be better assessed. 49. Capacity Building. The capacity building programs for MPRDC and MPPWD should be continued, particularly on contract management, asset management and road safety. 2. General 50. In order to achieve early delivery of projects, it should be ensured that the institutional set-up for project implementation is in place, preparatory activities are initiated well in advance, project readiness is high, and the performance of consultants and contractors is closely monitored.
DESIGN AND MONITORING FRAMEWORK Design Summary Impact Increase economic growth in Madhya Pradesh Outcome Enhanced road transport capacity Performance Targets/Indicators Contribution of road transport sector to the state gross domestic product increased to 6% 10% by 2015 (from 3% according to recent data) Actual growth rates of traffic on project roads surpasses those assumed growth rates by 15% (e.g., from 7% for cars). Project Achievements The actual GSDP annual growth rates in Madhya Pradesh were 9.23 % in 2006/07, 4.69 % in 2007/08, 12.37% in 2008/09, 9.55 % in 2009/10, and 8.96% in 2010/11, and an average 10.06% per annum for the eleventh plan period. The twelfth plan period s (2012 2017) growth target is an average of about 9% per annum. In the eleventh plan period, the GSDP growth by sectors was 8.75% for primary sector, 11.11% for secondary sector, and 10.08% for tertiary sector. The approved overlay for transport sector was Rs85.75 billion, about 12.19% of the total overlay, which financed reconstruction of a total of 6,332 km of state roads, upgrading of 8,894 km of roads, and construction of 145 major/medium bridges. Actual traffic growth on project roads averaged 9.4% per annum after project completion. Vehicle operating costs on project roads fell by 35% for heavy vehicles and by 25% for passenger cars after completion. Travel time on the project roads reduced by 25% on average. Considering the average 10.1% annual increase in consumer prices and 20% increase in fuel price in the period of 2008 2011, the vehicle operation cost was reduced by about 36% for heavy vehicles and 37% for passenger cars compared to roads outside the project. The average vehicle traveling time fell by about 52%. Before the project, travel speed averaged 25 30 km/h; after the project travel speed was 40 60 km/h. Appendix 1 15
Design Summary Performance Targets/Indicators Access of the rural poor to social services, markets, and other economic activities improved (e.g., the number of daily trips by the rural poor doubled). Project Achievements The average time used for traveling to public health centers was decreased from 52.07 minutes at baseline to 21.70 minutes after project completion, a 58% reduction. The average time traveling to major or district hospitals decreased from 2.10 hour at baseline to 1.05 hour after project completion, a 50% reduction. The frequency of public transport services also increased, providing better access for local people to public health centers and major or district hospitals. In addition, students are able to study at bigger cities, villagers can access better health facilities in bigger centers, doctors and health workers are willing to visit patients at their places, and access to banking facilities has increased, especially for agricultural loans. 16 Appendix 1 Outputs 1. Rehabilitated and improved state roads 2. Improved sector management Project roads maintained with International Roughness Index below 5. Approximately 1,800 kilometers of state roads rehabilitated or improved by 2009. The project roads are of good quality, with international roughness indices of 1.5 2.2. The project plan included the rehabilitation of 22 candidate project roads of about 1.800 km in length that were identified at appraisal. In addition to those candidate roads, three additional project roads were selected and rehabilitated. In total, 25 project roads comprising 1,698.64 km were rehabilitated as per specific rehabilitation requirements utilizing the loan funds. Medium-term and long-term road investment and maintenance program developed for the state and district. MPRDC has in place a medium-term and long-term road investment and maintenance program. Fiscal allocations from the state government were Rs6,030 million in 2011/12, Rs6,760 million in 2012/13, and Rs7,810 million in 2013/14. Project delay reduced by 50%. Project delays were reduced by about 63%.
Design Summary Activities with Milestones 1. Investment Component 1.1 Engagement of construction supervision consultants by August 2007 1.2 Procurement of first group of civil works completed by September2007 1.3 Construction of all civil works completed by June 2010 2. Sector Development (equipment) 2.1 Equipment procured by end of 2008 Performance Targets/Indicators Allocated funds are fully utilized. Original Inputs For 1 and 2: ADB: $320 million Government: $80 million Project Achievements The first ADB financed state road project in Madhya Pradesh exceeded the planned completion by 27 months. The second project (the project) exceeded the planned completion by 10 months. The state government provided timely and adequate fiscal allocations which were utilized fully. Actual Inputs For 1 and 2: Total $387.0 million ADB: $316.8 million Government: $70.2 million Comprising: Sample Subproject: $35.7 million Non-Sample Subprojects: $327.6 million Consulting Service: $11.2 million Project Management: $4.0 million Interest during Construction: $6.8 million Commitment Charges: $1.7 million Equipment: Nil 3. Sector Development (technical assistance) 3.1 Consultant selection by end of 2007 3.2 Consulting services by March 2008 3.3 Training of MPPWD staff by end of 2008 3.4 Road asset management system fully operational by end of 2008 3.5 Road investment and maintenance program by March 2009 For 3: ADB: $1 million Government: $0.25 million in-kind contributions For 3: ADB: $0.965 million Government: $0.25 million in-kind contributions ADB = Asian Development Bank; GSDP = gross state domestic product; Government of Madhya Pradesh = state government; MP = Madhya Pradesh; MPRDC = Madhya Pradesh Road Development Corporation. Source: ADB. May 2007. Report and Recommendation of the President to the Board of Directors on Proposed Loan and Technical Assistance Grant to India for the Madhya Pradesh State Roads Sector Project II. Manila; and ADB project completion review mission. Appendix 1 17
At Appraisal A. Investment Component SUMMARY OF PROJECT OUTPUTS Actual Length (km) About 1,800 km of state roads would be rehabilitated or A total of 25 roads comprising 1,698.64 km were reconstructed. The candidate project roads included: rehabilitated or reconstructed. 1,698.64 1 Shivpuri Sheopur Rajasthan Border (SH-6) 1 Shivpuri Sheopur Rajasthan Border (SH-06) 142.02 2 Gairathganj Silwani Gadarwara (SH-44) 2 Gairathganj Silwani--Gadarwara Road (SH-44) 64.40 3 NH-12 Junction to Silwani (SH-15) 3 NH-12 Junction to Silwani (SH-15) 34.80 4 Bareli Pipariya road (SH-19) 4 Bareli Pipariya Road (SH-19) 39.00 5 Mandleshwar Kasrawad (SH-1) Kasrawad Khargone road 5 Mandleshwar Kasrawad Road (SH-1) and Kasrawad Khargone 44.34 (SH-31) Road (SH-31) 6 Banher to Maharashtra Border (SH-31) 6 Banher to Maharashtra Border Road (SH-31) 64.56 7 Barwaha Dhamnod road, Khalghat Manawar road (SH-38) and Khalghat Kasrawad road 7 Barwaha--Dhamnod Road, Khalghat--Manawar Road (SH-38) and Khalghat --Kasrawad Road (SH-31) 122.00 8 Indore Deparpur road (MDR) 8 Indore--Deparpur Road (MDR) 34.08 9 Girgodha Indoria road (MDR) 9 Girgodha--Indoria Road (MDR) 30.00 10 Shyampur Goras road (SH-23) 10 Shyampur Goras Road (SH-23) 65.00 11 Morena Porsa road (SH-2) 11 Morena--Porsa Road (SH-2) 50.00 12 Khandwa Khargone road (SH-26) 12 Khandwa--Khargone Road (SH-26) 75.00 13 Hoshangabad -Budni -Nasrullaganj-Khategaon road (SH- 13 Hoshangabad--Budni--Narullaganj--Khategaon Road (SH-22) 87.40 22) 14 Nagod Jasso Saleha Pawai Semaria Amanganj road 14 Nagod Jasso Saleha Pawai Mohindra Semaria 100.83 Amanganj Road 15 Amanganj Malhera (SH-10) 15 Amanganj-Malhera (SH-10) 76.86 16 Seoni Chiraidongri (SH-11A) 16 Seoni Chiraidongri (SH-11A) 92.63 17 Balaghat Nainpur (SH-11) 17 Balaghat Nainpur (SH-11) 80.60 18 Tala Shahdol (Chhatisgarh Border) (SH-10) 18 Tala Shahdol (Chhatisgarh Border) (SH-10) 69.90 19 Katni -Barhi Tala (SH-10) 19 Katni Barhi Tala (SH-10) 70.04 20 Lakhnadon Mandla Dindori (SH-10) 20 Lakhnadon Mandla Dindori (SH-10) 151.63 21 Bela Gonvindgarh Churhat (SH-52) 21 Bela Govindgarh Churhat (SH-52) 56.60 22 Rewa Sirmor Dabhore road 22 Rewa Sirmor Dabhore Road 75.80 23 Bargwan Bedhan (SH-6 Old) 27.35 24 Nasrullganj Koshmi section of Nasrullaganj - Echhawar- 20.00 Sehore road (MDR) 25 Ingoriya Unhel road (MDR) 23.80 18 Appendix 2
B. Institutional Development Component Provide equipment necessary for the state government to enhance sector capacity such as in road safety and control of overloading. MPRDC analyzed the requirement for equipment for road safety and overloading with assistance from the TA consultants. The $1million provision for the purchase of equipment for road safety and control of overloading was not utilized as the state government observed that addressing road safety and overloading control effectively required a comprehensive integrated approach and involvement of all stakeholders. The state government has taken up the establishment and statewide implementation of (i) an accident response system for Madhya Pradesh, and (ii) computer networked check-posts at all the 24 entry points along the state border for control of overloading in coordination with other stakeholders. C. Technical Assistance Project A technical assistance (TA) was attached to the project for supporting state government initiatives of sector development, especially for MPPWD reform and capacity building. This TA was successfully implemented in 2008 2009.The major achievements included (i) review of MPPWD s institutional structure and capacity in road development and providing recommendations, (ii) strengthening planning capacity by providing a framework for operationalizing the Planning/RAMS unit, (iii) enhancing the MPPWD s business practices in procurement and contracting by preparing a set of contracting documents, (iv) strengthening quality assurance by upgrading laboratories, related facilities and arrangements, (v) functional specifications for procurement and customization of financial management system to meet MPPWD requirements and replace the paper-based accounting system, (vi) developing the human resource management by restructuring institutional arrangement and developing three-year plans, and (vii) improving road maintenance efficiency by introducing RAMS. MDR = major district road; MP = Madhya Pradesh; MPPWD = Madhya Pradesh Public Works Department; RAMS = road asset management system; SH = state highway; TA = technical assistance Source: Madhya Pradesh Roads Development Corporation. Appendix 2 19
PROJECT COST AND FINANCING Table A3.1: Project Costs ($ million) Appraisal Estimate Foreign Exchange Local Currency Total Cost Foreign Exchange Actual Local Currency Item A1. Sample Subproject (Lakhnadon-Mandla-Dindori, SH-10) 1. Civil Works 19.7 9.2 28.9 24.4 11.4 35.7 2. Relocation of Utilities 0.1 0.1 A2. Non-Sample Subproject (about 1,600 km) 1. Civil Works 188.9 88.9 277.8 222.8 104.8 327.6 2. Relocation of Utilities 1.5 1.5 3. Land Acquisition and Resettlement 0.1 0.1 Subtotal (A) 208.6 99.8 308.4 247.1 116.2 363.3 B. Consulting Services 3.0 9.0 12.0 2.8 8.4 11.2 C. Project Management 4.0 4.0 4.0 4.0 D. Institutional Development (Equipment) 1.0 1.0 Subtotal (A+B+C+D) 212.6 112.8 325.4 249.9 128.6 378.5 E. Contingencies 1. Physical Contingencies 22.1 10.4 32.5 2. Price Contingencies 6.9 8.9 15.8 F. Interest During Construction 24.3-24.3 6.8 6.8 G. Commitment Charges 2.0-2.0 1.7 1.7 Total 267.9 132.1 400.0 258.4 128.6 387.0 Note: (i) The actual cost for relocation of utilities is included in the cost for civil works; (ii) no cost incurred for land acquisition and resettlement during implementation. Source: ADB. 2007. Report and Recommendation of the President to the Board of Directors on Proposed Loan and Technical Assistance Grant to India for the Madhya Pradesh State Roads Sector Project II. Manila; Asian Development Bank loan financial information system. Manila; Madhya Pradesh Roads Development Corporation. Total Cost 20 Appendix 3
Table A3.2: Project Financing ($ million) At Appraisal Actual Total Cost % of Total Total Cost % of Total Source Asian Development Bank 320.00 80.0% 316.83 81.9% Government 80.00 20.0% 70.17 18.1% Total 400.00 100.0% 387.00 100.0% Source: Asian Development Bank. Appendix 3 21
22 Appendix 4 DISBURSEMENT OF ADB LOAN PROCEEDS Table A4: Annual and Cumulative Disbursement of ADB Loan Proceeds ($ million) Annual Disbursement Cumulative Disbursement Year Amount % of Total Amount % of Total 2007 22.8 7.2 22.8 7.2 2008 43.1 13.6 65.9 20.8 2009 101.2 31.9 167.1 52.7 2010 124.1 39.2 291.2 91.9 2011 20.1 6.3 311.3 98.2 2012 5.6 1.8 316.8 100.0 Total 316.8 Source: Asian Development Bank. Figure A4: Annual and Cumulative Disbursement of ADB Loan Proceeds ($ million) Source: Asian Development Bank
APPRAISAL AND ACTUAL IMPLEMENTATION SCHEDULES COMPARED A Item Project Preparation Sample Subprojects Other Subprojects 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 B Construction Supervision Consultants Selection Supervision C Civil Works Procurement Construction D Technical Assistance (TA) Implementation At appraisal At actual Source: Madhya Pradesh Roads Development Corporation; Asian Development Bank project completion review mission. Appendix 5 23
24 Appendix 6 CHRONOLOGY OF MAJOR EVENTS Date Main Event 2006 17 20 April ADB consultation mission to Madhya Pradesh, India 30 May 2 June ADB TA consultation mission to Madhya Pradesh, India 30 June ADB approval of the PPTA 3 6 October ADB loan consultation mission to Madhya Pradesh, India 12 20 December ADB loan reconnaissance mission to India 2007 15 25January ADB fact-finding mission to India 21 Feb ADB management review meeting 5 9 March ADB loan appraisal mission 27 March ADB staff review committee meeting 24 26 April Loan negotiations at Delhi, India 2 May RRP Board circulation 31 May ADB Board consideration and approval 8 June Bids for civil works packages were received 23 July Signing of the loan agreement 2 August ADB approval of the qualifications of bidders 6 August Contract awarding for supervision consultants 31 August Loan Effectiveness 24 September 2007 25 January 2008 9 October 23 October 26 October 2008 Contract awarded for 15 civil works contracts Amendment of the loan agreement to reflect the changes to the calculation of rebates and surcharges under ADB s LIBOR-based loans First disbursement of the loan, which was for the supervision consulting services ADB issuing the Request for Proposal to shortlisted consulting firms for TA4934-IND 7 March Contract award to the TA consultants 7 April Fielding of the TA consultants 21 25 April ADB loan inception mission 28 April Administration of the loan delegated to the ADB s India Resident Mission 27 May ADB project review mission for the TA 23 24 September ADB project review mission for the TA 2009 16 20 February ADB loan and TA review mission
Appendix 6 25 Date 12 June 2009 4 February 2010 Main Event Contract award for 3 civil works contracts 2 September Termination of the contract for civil works package 5 30 September Completion of the TA 15 21 December Completion of civil work contracts of package 14 and package 4 2010 12 January Contract award for civil works package 5A (the balance works of package 5) 15 February 24 June Completion of contracts for package 11, 3, 7, 1, 6, 13, 18, and 12 19 May ADB approval of extension of the loan closing date to 31 December 2011 15 24 September ADB project midterm review mission 10 December Financial closure of the TA grant 31 December Original loan closing date 2011 21 January Completion of civil works contracts for package 2, 8, 15, 16, 9, 10, 5A, and 17 28 April Substantially completion of all 18 civil works contracts. 19 October ADB President visited MPRDC office and also travelled on the Bhopal Vidisha road constructed under ADB Loan 1959-IND. 15 November Contract completion of supervision consultants 31 December Actual loan closing date 2012 5 October Closure of financial account of the ADB loan 2013 26 29 July 2014 26 January 4 5 February 22 23 July 30 31 October Delegates from PWD of Government of Orissa visited MPRDC and three project sites. PWD Minister along with other dignitaries from Government of Rajasthan visited MPRDC and one of the project sites under ADB Loan. PWD Minister from Government of Karnataka along with other dignitaries visited MPRDC and one of the project sites under ADB Loan. Delegation from South Africa visited MPRDC and one of the project sites under ADB Loan. Delegates from Department of PWD, Government of Chhattisgarh visited MPRDC and one of the project sites under ADB Loan. 17 24 December ADB project completion review mission ADB = Asian Development Bank; MPRDC = Madhya Pradesh Road Development Corporation; PPTA = project preparation technical assistance; PWD = public works department; RRP = Report and Recommendation of the President to the Board of Directors; TA = technical assistance. Source: The ADB project completion mission; Madhya Pradesh Roads Development Corporation.
ORGANIZATION STRUCTURE FOR PROJECT IMPLEMENTATION Madhya Pradesh Road Development Corporation 26 Appendix 7 Managing Director Technical Advisor Chief General Manager Chief Engineer (BOT) Chief Engineer (Maint) Chief Engineer (Build.) Chief Engineer (ADB) EA to MD Managemnet Assitant PA to MD General Manager (F) General Manager (HR) General Manager (BOT) Manager (Enviro.) General Manager General Manager General Manager General Manager CAO Company Secretary Chartered Accountant DGM (HR+MIS) DGM (BOT) DGM (P) Divisional Manager DGM DGM AGM (F) AGM (HR) AGM (BOT) AGM (P) AGM (Tech.) AGM AGM Manager (F) Manager (MIS) Manager (HR) Manager (BOT) Manager (P) Manager (Tech.) Manager Manager Asst. Gr-III Computer Operator Asst. Gr-1 Asst. Gr-II Asst. Gr-III Steno Typist Steno Typist Steno Typist Steno Typist Computer Operator Computer Operator Source: Madhya Pradesh Roads Development Corporation.