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The World Bank
FOR OMCLAL USE ONLY
Repwt No. 12146
PROJECT COMPLETION REPORT
INDIATHIRD CALCUTTA URBAN DEVELOPMENT PROJECT
(CREDIT 1369-IN)
JUNE 30, 1993
MICROGRAPHICS
Report No: 12146Type: PCR
Infrastructure Operations DivisionCountry Department IISouth Asia Regional Office
This document has a restricted distribution and may be used by reipients only in th performance oftheir offidal duties. Its contents may not othenvise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS
Rs 1.00 - USS 0.11 at appraisal (May 1983)Rs 9.50 - US$ 1.00 at appraLial (Nay 1983)Rs 1.00 = US$ 0.039 at project close (March, 1992)Rs 25.5 * USS 1.00 at project close (March, 1992)
GOI/GOWB FISCAL YEARApril 1 - March 31
MEASURES AND EQUIVALENTS
1 millimeter (mm) u 0.0394 inches (in)1 meter (a) a 3.2808 feet (ft)1 kilometer (km) 0.6214 mile (mi)1 square meter (m2) * 10.7639 square feet (sq ft)1 square kilometer (km2) - 0.3861 square mile (uq mi)1 hectare (ha)-0.01km2 2.47il acres (ac) or 10,000 sq m1 liter (1) a 1.0567 quarts liquid or
0.2642 US gallon (gal) or0.9081 Us quart dry (qt)
I cubic meter (m3) 35.3147 cubic feet (cu ft)1 liter per capita - 0.2642 US gallons per dayper day (lcd) capita per day (gcpd)
1 cubic meter per second - 264.1721 US gallons per(aS/sec) second (gal/sec)
PRINCIPAL AbPRhVIATIONS AND ACRONYMS
AMEU Appraisal, Monitoring and Evaluation Unit of CMDACHIP Calcutta-Howrah Investmont ProgramCIT Calcutta Improvement. TrustCZA Calcutta Metropolitan AreaCMC Calcutta Municipal CorporationCMDA Calcutta Metropolitan Development AuthorityCMACP CMA-wide Complementary ProgramsCMWSA Calcutta Metropolitan Water and Sewerage AuthorityCUDP I First Calcutta Urban Development Project (Cr 427-IN)CUDP II Second Calcutta Urban Development Project (Cr 756-IN)EWS Economically Weaker SectionGOWM Governmeat of West BengalHIT Howrah Improvement TrustHMC Howrah Municipal CorporationHDFC Housing Development Finance CorporationHUDCO Housing and Urban Development CorporationLGUDD Local Government and Urban Development Department -GOWBMDP Municipal Development ProgramTRIP Transamunicipal Infrastructure Program
FOR OFFICIL USE ONLY
THE WORLD BANKWasfgtn D.C. 20433
U.SA
Office of Dtzctorz4eeralOperation* vwaluatio
June 30, 1993
MEMORANDM TO MNE EXCUTIVE D,IRCTORS All TEE PRESIDT
SUBJECT: Project Completion Report oa IndiaThird Calcutta Urban DevelouMent Prolect (Credit 1369-IN)
Attached is the "Project Completion Report on India - Third CalcuttaUrban Develo.ent Project (Credit 1369-IN),In prepared by the InfrastructureOperations Division, Country Department 2, of the South Asia Rg4ional Office,with Part II contributed by the Borrower.
This project was prepared as a follow-on to two previous urbandevelopment projects in Calcutta but with a stronger than before emphasis oninstitutional and financial reforms. The project proved too complex with anoverly optimistic implementation schedule. Its components spread through foursub-programs, involving five major metropolitan organixations, 37 municipalitiesand a number of local level governments. -
After a delay of three years, only about two thirds of the project'sphysical comporsnto were completed. Main reasons for the delay and less thanfull-scale completion are project design problems, land acquisit.io, andprocurement complexities. Achievement of institutional and policy objectiveswere very limited. There were no improvtments in cost recovery.
Overall, the project outcome is Tated as unsatiesfactory mostly onaccount of its failure to make progress in institutional and financial aspects,expected from a ropeater project. Its institutional achievements are rated asnegligible, and the sustainability of its benefits as unlikely.
The Project Completion Report is of good quality. It provides aninteresting discussion on the complexity of the project and relatedimplementation issues. The project may be audited.
This document has a restricted distribution and may be used by recipients only fn the performance ofthefr official duties. its contents my not otherwise be dfsclosed without old Sank authorization.
FOR OMCAL USE ONLY
PROJECT COMPLETION REPORT
INDIATHIRD CALCUTTA URBAN DEVELOPMENT PROJECT
(CREDIT 1369-IN)
TABLE OF CONTENTS
Paase No.
Preface ........................................................... iEvaluation Summary ......... ...... .** ................ ii
PART It PROJECT REVIEW FROM BAUK'S PERSPECTIVE .......... ,, 1
1. Project Identity ..... ...... ........ 1
2. sackground .................. 1context ..........****Q************.........,......... 1Previous IDA Assistance in the Sector ................ 2Sector Policy Objectives .. ** ................ .......... 2
3. Project Objectives and Description ............. -ooooo. 2Primary Objectives ... *........o ..................... * * *. 2Secondary Objectives ................................ 2Project Description . ..................... .. ..... .. .. 3
4. Project Design and organization ......................... 3
5. Project Implementation ..* ............................... 4Implementation .... ***.............. *.................. 4Project Risks *....................................... 6
6. Project Results ........... ........................... ... 7Physical Performance ...... ... *......... ...... *.. 7Health Program ..................... .......... . 8Economic Rate of Return (ERR) Comparisons ............ 9
7. Project Sustainability ........ .... *....... ..... ......... 9Project Restructuring, Credit Extensions, andBorrower Relations .......... .. . .. ........ .. ..... 10
8. Bank Performance .....**..*.. * ............................ 11
9. Borrower Performance .......... ... 11
10. Project Relationship ................. *.......*......... 12
11. Consulting Services ...... . .... ....... ......... .... . 12
12. Project Documentation and Data ......................... 12
This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
PRTf XU, U20a ItEVIEW PROH THE BORROWER'S PERSPECTIVE ... 13
1. Project Design ...... ¢oo*¢ss*¢*v¢e*o1
2. Implementation of the Poet............................... 13
3. Performance by the Borrower ............................ 14
4. The World Bank's Performance ........................... 15
S. Relationship with the World Bank ....................... 17
2ARL Ills SATIfiTICAL INFORMATIQN ......................... 18
Relat:ed Bank Loans and/or Credits .......................... 19
Project Timetable ..................... ........ 20
Credit Disbursements *** ***......... 999 99999999............. 21
Project Implementation/Benefits ............................ 22
Project Costs and Financing .... ...................... ... 26Project Costs 99............ 26Project Financing ..............,..* 9.................. 27
Project Results ...... ...................................... 28Economic Impact ............. .... .9999999999 28
Status of Compliance with Covenants ........................ 32
Mlssions e...........99999*999999999099999999999999 36
(A)
PROJEOT COMPLETION EXPORT
INDIA
THIRD CALCUTTA URBAN DEVELOPMENT PROECT(CREDIT 1369-IN)
1. This is the Project Completion Report (PCR) for the Third CalcuttaUrban Development Project (Credit 1369-IN) in the amount of SDR 136.3 millionfUS$ 147.0 million) which was approved on May 19, 1983. In December 19918 SDR51.5 million saving due to exchange rate fluctuations was cancelled and trane-ferred to the Social Safety Net Adjustment Program. The Credit was closed onMa,.ch 31. 1992. three years behind schedule. The total amount disbursed underthe Credit was sDR 77.75 million, out of the remaining 8DR 84.8 million.
2. The PCR was jointly prepared by the Infrastructure OperationsDivision, Country Department 2, of the South Asia Regional Office (Preface,Evaluation Summary, Parts I and III), and the Borrower (Part 11).
3. Preparation of the PCR began during the Bank's final brief super-vision mission of the Project in February 1992, and is based, inter alia, onthe Staff Appraisal Report (SAR), Credit and Project Agreements, supervisionreports, correspondence between the Bank and the Borrower, and internal Bankmemoranda.
(li)
PROJECT COMPLETION REPORT
INDIA
THIRD CALCUTTA URBAN DEVELOPMENT PROJECT(CREDIT 1369-IN)
EVALUATION SUMMARY
1. Obiectives. The objectives of the project were to: (i) continuethe urban development efforts steming from the First and Second Calcutta UrbanDevelopment Projects (CUDP I & II) and to improve urban management in theCalcutta Metropolitan Area (CMA) through financial and institutional reformconjunctively with physical improvements; and (ii) substantially increase thenumber of beneficiaries, particularly in the Economically Weaker Sections(EWS) of the community.
2. Imolementation Exterience. The project was appraised as part ofthe Five-Year Sector investment Program of the Calcutta Metropolitan Develop-ment Authority (czDA). It was organized in four multi-sector programs:municipal Development Program (MDP); Transmunicipal Infrastructure Program(TRIP); Calcutta-Howrah Investment Program (CHIP); and CMA-wide ComplementaryProgram (CMACP). some 6 million people, including about 4.2 million in EWSgroups, were expected to benefit directly from the investments in watersupply, sanitation, shelter, drainage, slum upgrading, solid waste management,traffic management, and health and human resources development.
3. The sector components were spread through the four sub-programsand execution was set up through a matrix involving the CMDA, CalcuttaMunicipal Corporation (CKC), Calcutta Metropolitan Water and SewerageAuthority (CMWSA), Calcutta Improvement Trust (CIT), Howrah Improvement Trust(HIT), 37 municipalities, and a number of panchayats. The MDP schemes wereprepared by the municipal agencies, cleared with CMDA and self-executed.Funds for MDP were on-lent as a loan:grant mix in the ratio 70:30.
4. Overall, the project schedule proved overly optimistic and projectextensions totalling three years were sanctioned. At closing (3/31/92), amajor TRIP water supply component is likely to continue for a further 2 to 3years. Primary reasons for the time over-run are: land acqpisition diffi-culties; delays in selecting consultants for major component design; procure-ment delays; budget cost underestimation; and lack of experience in schedulingmulti-contract schemes (para 5, Part I).
5. The difficulty of land acquisition, which was not highlighted as apotential risk in the SAR, proved a major obstacle in the Shelter, UrbanRenewal and Area Development (SURAD) and transportation components. Twelveout of thirteen SURAD schemes were dropped and some transportation schemeswere either dropped or much delayed.
(iii)
6. TUtal project cost, in rupee termes was only slightly lower thanthe original project cost ostimates, even thouglh only about 75% of theoriginal components were completed. Cost increases, due to delays, and to alarger extent under-estimation,, coincidentally have kept the rupee costconstant. in dollar equivalent terms, total project costs were only aboutone-third of the original estimates. The large decline was mainly due to thedramatic devaluation of the rupee during the life of the project (us$1 a Rs.9.5 at appraisal vs. 28.5 at closing).
7. in summary,, tJae project design was too complex for implementationby relatively veak agencies and for the Bank to supervise. This complexitypresented too many issues and policies to address in a single project. Imple-mentation was stalled by three years due to delays in preparation of detailedengineering, land acquisition and procurement. By credit closing, the sub-components had been reduced from 53 to 40 and a few components that remainedincomplete would require about two years more to complete, when the fullbenefits would be realized.
8. aReult. Physical achievements of the subcomponents completedwere very commendable (details are given Tables 4 a 6, Part ill). TheMunicipal Deve3 ~pment Program was a success in the devolut ion of powers ofplanning and implementation of municipal infrastructureg, but was a failure infinancial i?erformance in that MDP had zero cost recovery for services and avery marginal increase in property tax revenues. *The MDP fund was fullydisbursed, however. A major water supply transmission main is yet to becompleted and most land develolpment schemes were abandoned.
9. over the p-.oject life, CMDA developed its capacity to monitorproject execution with a well-established Management information System (MIS),although it was not used effectively for project management. CNDA hasfunctioned in a number of diverse roles such as financial intermediary for theMDP,, planning and capital budgeting agency, design and implementing agency andmonitoring unit. While CZ4DA has competent staff, it remains lethargic andmediocre in its performance in some areas. Similarly, CMWSA, responsible fortransmunicipal water and sewerage services, has been ineffective in managementdue to fr'agmented institutional responsibilities. The financial health andinstitutional capacity of the municipalities have not developed commensuratewith the physical achievements of lDP. The actual achievements and benefitsare compared with the appraisal estimates in Part III. major departures are:latz ine conversions (72% of SAR figure) and new latrine construction haslagged; Bowrah solid waste program was not implemented due to changed priori-ties; sewerage house connections were reduced by 24%, affecting some 20,000people; major water supply components are yet to be commissioned; and mostarea development schemes were dropped due to land acquisition problems.
10. The Health Program is a notable achievement in providing extendedhealth service at the community level. This success has resulted in a free-standing project to be financed by the Bank and an ODA-funded integrated slumimprovement program. The improvement in water supply over the three projectshas helped to eliminate the frequent outbreaks of cholera that prevailed inthe 1970s.
(iv)
il. 84ustalnability. The longer-term sustainability of the physicalassets depends on the financial health and institutional capacity of theagencies responsible for operation and maintenance of the facilities. Nodiscernible improvements have resulted from project intervention. In the caseof MDP (36% of project investment), all municipalities rely largely on theGovernment of West Bengal (GOWB) subsidies, covering only about 35-40% ofoperating expenses from revenues. The large gap is due tos dependence on theunder-exploited property tax; iraJequate tax revaluations; defaulting gover,-ment and industrial agencies; reluctance to levy direct consumer charges; andneglect of arrears collection. None of the municipalities has any capacity torepay loan funds in the foreseeable future and longer term sustainability ofassets may be queried in the absence of GOWB comwitment on cost recovery forutilities and introduction cf radical reforms to increase municipal revenues.
12- Findinas and Lessons Learned
(1) The preventive health component has been- an outstanding successwhich has paved the way for a free-standing health project by theBank and another by the U.4C overseas Development Agency.
(2) The physical achievements of the completed sub-components arecommendable, despite major constraints due to land acquisition.However, some major items of water supply, area development andtraffic management were dropped or delayed due to land acquisitionor procurement delays. Only one out of seven area developmentsch3mes was undertaken. All six urban renewal schemes weredeleted. For future projects, a new strategy for land acquisitionshould include having a substantial portion of the required landtwith authority to enter prior to project start. It may be prudentto delay appraisals/approvals until land, for at least two yearswork is securely in the possession of agencies.
(3) The project design (program type operation) involving many sectorsand agencies was too complsx for relatively weak agencies. CMD&over the years has developed a very good MIS, yet it was not usedeffectively for project management. The original five-year invest-ment program, which was the basis for the project, took threeyears longer to implement partly due to delayed detailed prepara-tion. At project closing, only 75% of the original componentswere completed. The five-year program changed over the years withthe addition of about 30% more investments, which raises seriousconcerns about the investment prioriti:ation and planning frame-work. The project had little chance of success because it wasrequired to address too many issues and had structural, institu-tional, financial and management problems.
(4) A follow-up projects if undertaken, should have clear under-standings and agreements with the highest political level.Furthermore, it should be confined to a well-defined standardinvestment project. Such a project might include priority Lnvest-ments in water supply, sewerage and solid waste management,prepared on the basis of rAdated functional 9nvestment
(v)
plans/feasibility studies with limited, but clearly defined andagreed targets for financial,, Lntitutional reform and planning.Detailed project preparation and implementation plans adequate forat least two years implementation (using local/foreignconsultants) should be required prior to loan approval. To ensurea reasonable chance of success, cost recovery and institutionalarrangements in the water supply and sewerage sectors should bethe focus in the first instance. additional concern about thepresent project outlined in the report ought to be taken intoaccount in the formulation of any possible new project inCalcutta.
(5) Devolution of planning and implementation responsibilities tomunicipalities under the MDP component had a very positive impact.Mowever, the financial, health and institutional capacity ofmunicipalities have not improved commensurate with physicalachievements. Municipal revenues are woefully inadequate and nomunicipality has repaid the loans provided under NDP. Bankassessments of repayment capacities were unrealistic. Introduc-tion of direct user charges and radical i'creases in property taxare essential ingredients for successful municipal operations.The efforts to increase property tax receipts through revaluationunder the existing basis have resulted in an insignificantincrease in revenues. Due to complex and inter-related issuesinvolved, property tax reform would be best addressed in a subse-quent project.
(6) Despite the heavy burdens on CNIDA in terms of planning, capitalbudgeting and physical execution, CMDA demonstrated its skills incoordinating the program, even though project management was weak.Whether physical execution should continue to be a function of aplanning and regulatory body such as CMDA, should be subject toreview. similarly, responsibilities for water supply and sewerageare shared by CMWSA and many municipalities. For future opera-tions, a review of institutions providing urban services inCalcutta should be undertaken.
(7) Procurement procedures contributed significantly to delay inproject execution. Management of over a thousand small contractspresented a daunting task to agencies, especially administration,supervision and quality control. Unrealistic cost estimatespresented considerable difficulties and delays in bid evaluations.Additionally, the lack of adequate powers of agency staff requiredaward decisions to be referred to higher levels of government.Major reforms in contract packaging, cost estimation at marketrates and powers of agencies should be agreed as part of anyfuture operation.
(8) The preparation and submission of accounts and audits sufferedserious delays. Timely action was not taken by the Dank to remedythis non-compliance. The task was compounded by the existence ofclose to 40 agencies implementing project components. Future
(vi)
projects should include funds for private auditors to prepareaccounts and audits for timely submission (in addition to thestatutory audit process). RLsks of non-compliance could bemLnimized through preparation of consolidated accounts.
(9) Private sector participation envLsaged in the urban renewalschemes did not take place due to lack of commitment to thisobjective. In the changing climate ln India, the shelter-relatedactivities are best left to the private sector.
- I -
PROJCT COMPLETXON REPORT
IBMh
THIRD CALCUTTA URBAN DEVELOPMENT PROJECT(CREDIT 1369-Xg)
PART I s PROJECT REVIEW FROM tHE BANR'8 PERSPECTIVE
1. Proiect Identity
Names Third Calcutta Urban Development ProjectCredit Number: 1369-INRVP Unit: South Asia Regional Office, Country Department XICountry: IndiaSector: InfrastructureSubsector: Urban
2. Background
2.01 Context. The CMA covers an area of 1.414 sq.km. with a populationof around 12.1 million (1991 census). Responsibility for metropolitan devel-opment rests with the West Bengal State Government's Metropolitan DevelopmentDepartment (MDD) which overviews infrastructure investment expenditures in CMAand Urban Development Authorities statewide. The Local Government and theUrban Development Department (LGUDD) is responsible for the needs of localgovernment. The CMA comprises 2 municipal corporations (Calcutta and Howrah),37 municipalities and 165 panchayats (non-municipal areas), with about one-third of the CMA population living in the CMC area.
2.02 By the 19609, the massive influx of refugees from Bangladeshduring its Independence in 1947, combined with continued urban growth anddeteriorating physical, social and economic conditions, had resulted in over-loaded and inadequate urban services, including water supply, sanitation,solid waste management, shelter, and road space.
2.03 In the early 1970s, CMDA was created by the GOWN with its invest-ment program subsequently financed in part by IDA. CMDA provided an overallinstitution and intersectoral perspective on Calcutta's problems, developed astrategy to address priority needs, and served as an executing agency forinfrastructure investments. The creation of CMDA as the single planning anddevelopment agency is of special significance since CMDA was also made theagency for administering the capital budgeting process. CMDA has a staffexceeding 4,000 and a capacity to execute an investment program of aroundRs.60-80 crores per year (US$24-32 million).
- 2 --~ ~ ~ ~~~~2
2.04 Previous IDA Assis_ance in the Rector. IDA financed two urbanprojects - the First Calcutta Urban Development Project (CUDP I) and theSecond Calcutta Urban Development Project (CUDP IY) -- which formed a part ofCalcutta's Five-Year Investment Program and an Urban Transport Project. Allthree projects are completed. CUDP I progressed slowly, but CUDP II achievedimpressive progress in a number of areas, particularly in slum improvement andmuch improved availability of treated water supply. CMDA developed an ade-quate capacity to execute physical works, but weaknesses remained in planning,project management and financing of operation and maintenance. Also, infra-structure sector agencies remained weak due to institutional fragmentation.Concerns were raised regarding the weakening of other agencies as a result ofdominance by CMDA and its over-centralized management structure, and indeed,whether CMDA should have been an implementing agency in addition to itsplanning and regulatory functions.
2.05 Sector Policy Obiectives. Whereas CUDP I and CUDP II concentratedon physical achievements, CUDP III was designed to address the broader insti-tutional, financial and policy planning issues in the sector, consistent withGOWB's stated policy to strengthen local government with increased responsibi-lities in the development process for agencies other than CMDA. The financialhealth of municipalities and local bodies and the question of sustainabilityof assets was recognized at that time. Measures were introduced to improvelocal resource mobilization with the objective of enhancing the resource base,introducing better financial management practices, emphasizing cost recovery,and adequate operation and maintenance of urban services.
2.06 CUDP III was thus formulated to build on the achievements andlessons 'aarned from the previous two projects within the framework ofinstitucional and financial reforms in CMA.
3. Proiect Obiectives and Descriotion
3.01 Primary Obiectives. The primary objectives of CUDP III were tos
(i) continue consolidating the efforts set in motion during the 1970sand, in particular, to improve urban management in CMA through acomprehensive approach in which institutional and financialreforms go hand-in-hand with physical improvements; and
(ii) substantially increase the number of direct beneficiaries,particularly in the economically weaker sections of the community.
3.02 Secondary Obiectives. The secondary objectives were establishedwithin these primary objectives to:
(i) strengthen agencies responsible for urban planning, management andfinance;
(ii) encourage investments to complement earlier components for benefitoptimization;
(iii) rectify investment imbalances between metro-core areas and CMA asa whole;
(iv) prioritize operation and maintenance of new and existing assets;
(v) encourage private sector participation; and
(vi) mobilize other institutional finance through agencies such asHUDCO and HDFC.
3.03 Proiect Descrigtion. The project, as appraised, was based onCMDA's Rs. 330 crores Five-Year Investment Program (1983-88), with theexception of about Rs. 42 crores which represented cost and time over-runs onthe previous Plan period. The project was organized into the following fourmulti-sector sub-programs:
(i) Municipal Development Program (MDP)(Ui) Transmunicipal Infrastructure Program (TRIP)(iii) Calcutta-Howrah Investment Program (CHIP)(iv) CMA-wide Complementary Program (CMACP)
3.04 About 6 million persons, including some 4.2 million in the EWSgroup, were expected to benefit directly from the investments in water supply,sanitation, shelter and area development, drainage, slum upgrading, solidwaste management, road and traffic management improvements, health infra-structure facilities, small scale entrepreneur program, and human resourcedevelopment. These benefits were substantially achieved, with the majorexception of area development, and, to a lesser extent, water supply andtraffic management improvements, which are expected to be completed in a yearor two.
3.05 The sector components were spread through the four sub-programsand execution was set up through a matrix involving CMDA, CMC, CXWSA, CIT, andHIT, 37 municipalities, 2 notified areas, and a number of panchayats. TheCHIP and TRIP sub-programs together accounted for about half of the project'stotal cost and originally comprised 53 components, primarily in water, drain-age, sanitation, traffic and transportation and area development. The MDP,which accounted for some 36% of the project's cost, was executed by CXC,Howrah Municipal Corporation (HMC) and the municipalities with CMDA serving asa financial intermediary and providing a supervising/ monitoring role. Fundswere lent in a ratio of loanagrant mix of 70s30 to the municipalities.
4. Project Desian and Oroanization
4.01 The project's overall objectives were appropriate in that theyprovided for a continuing need for expanded urban services in the city whileattempting to address broader financial and institutional issues across theCMA. Compared to the earlier urban projects, CUDP III evolved into a complexmatrix of multi-sector sub-programs and implementing agencies. The major MDPcomponent, for example, involved execution by 37 municipalities and 2municipal corporations. This project design approach seriously misjudged thecapacity of individual agencies to implement and that of CMDA to coordinate
- 4 -
and manage the program. Despite the development of a good MIS, it was notused effectively. CMDA had neither the powers nor the skills to move theprogram implementation at an adequate pace. The project design was overlyambitious in trying to address too many issues and structural, financial andmanagement problems. The commitment to financial reforms in individualagencies was lacking as there was no political commitment sought or given.despite the existence of legal agreements.
4.02 The project was prepared over a two-year period with close inter-action between the Bank and the Borrower and comprised seven missions prior toappraisal. This was consistent with other similar sector lending operationsat the time. The project was identified in reasonable detail prior toappraisal. However, bearing in mind the programmatic nature of CUDP II1, themulti-sector components, and the wide-spread of implementing agencies,detailed project preparation for the components was not expected at commence-ment. However, the level of preparation at project start was such that ittook a further two years to get the program rolling. In retrospect, theproject could have benefitted from a more rigorously detailed preparation ofmajor components under the TRIP aud CHIP programs. This might have maintainedthe momentum of preparation and mitigated the extended delays in executingthese components. In areas where the preparation effort could have bene-fitted, the need for engagement of consultants was questioned or, when agreed,appointments were seriously delayed.
4.03 Overall, the original implementation program proved too ambitiousfor CMDA and the executing agencies. This may be partially due to the sub-stantial non-IDA sector program which CMDA had executed concurrently over thepast seven-eight years. This was in addition to the IDA project which was tofinarnce GOWB's five-year urban investment program. These ad hoc additionsraise serious concerns regarding investment prioritization.
5. Proiect ImDlementation
5.01 Implementation. The original project implementation schedule(1983-88) proved overly optimistic as indicated by the need for project exten-sions totalling three years and a major TRIP component that is not likely tobe completed for a further 2 to 3 years. Primary reasons for the time over-runs are: (i) delays in detailed project preparation and appointment ofconsultants; (ii) land acquisition difficulties - only 1 out of 13 SURADcomponents have been executed, and delays in traffic/transportationactivities; (iii) delays by CMDA/ CMC in selection and appointment ofconsultants for the Tullah/Auckland water conveyance pipeline; (iv) poorprocurement efficiency caused delays for bidding and award decisions,especially for ICB tenders; (v) under-estimation of budget costs of majorcomponents, such as the Tullah/Auckland pipeline where budget cost was about35% of the bid price; (vi) lack of experience in program management andcontract scheduling for major multi-contract schemes, such as the Baranagar-Xamarthati treatment/primary grid scheme where the treatment facility, begunin early 1986, still is not commissioned and awaits the completion of othercontracts to provide the source of water for the scheme; and (vii) multi-plicity of very small contracts with the consequent administrative burden.
5.02 The Bank's agreement to the use of small and numerous contractpackages proved to be a deterrent to timely project completion. In total,over 900 contracts were awarded, not counting the additional large number ofcontracts under MDP. This method of procurement was not conducive to modernconstruction practices. It caused delays, aggravated construction managementproblems and compromised quality. The strict adherence to the GOW Scheduleof Rates for estimating and the inability of agencies to accept tendersexceeding 5% above the estimated cost appears to be a major reason forprocurement delays. The Schedule of Rates, although regularly updated, doesnot necessarily reflect market values, as has been amply demonstrated in otherBank-funded sector projects in India. This issue should be addressed care-fully in future project budgeting where estimates should be based on marketrates.
5.03 The most critical variations of project components as executed,compared with the appraised project, relate primarily to the SURAD programwhere 12 out of 13 schemes have been dropped mainly due to land acquisitionproblems and under-budgeting. Apart from the NDP and CMA ComplementaryPrograms, the original project comprised 53 discrete sub-components in watersupply, sewerage and drainage, solid waste management, traffic and transporta-tion and shelter. These have since been reduced to 40 sub-components bydeletion of some and addition of others.
5.04 A notable deletion was the provision of bulk meters for watersupply, apparently due to cost over-runs on the leak detection equipmentpurchased for CMC. This unfortunate deletion thus prevents accurate quantifi-cation of the volume of water supplied in the municipal systems which continueto rely on outdated pump rating curve information.
5.05 Overall, the project cost, in rupee terms, was within 4% of theappraisal estimate even though all components were not completed. The 40implemented components costed as much as the original 53 planned, due largelyto underestimation of costs resulting from the use of the government'sschedule of rates, and cost increase on account of delayed procurement. Indollar equivalent terms, total project cost was only about one-third of theoriginal estimates. The large decline was mainly due to the dramaticdevaluation of the rupee during the life of the project (US$1 - Rs. 9.5 atappraisal vs. 28.5 at closing).
5.06 The fragmented implementation responsibilities, particularly forthe CHIP and TRIP components, sometimes resulted in more than one agencyexecuting different contracts at the same site. Implementation arrangementswould need to be streamlined in any future project.
5.07 Urban Renewal schemes were intended to generate income through thesale of development rights for financing area development. It was intendedthat executing agenciea would work with private developers, thus avoiding landacquisition probletcs. Ulowever, the executing agencies became involved inacquiring land directly with consequent public objection and litigation, whichresulted in the schemea being abandoned. There was also an issue arising fromexisting legislation under the Land Acquisition Act which prevented CMDA fromselling acquired land for other than public purposes. Some modest urban
renewal schemes around metro stations are now being undertaken by privatedevelopers outside the IDA project. This may be the way forward in thefuture.
5.08 Project RLiks. Major risks identified at appraisal were: (i) theprogram would prove too complex to administer and manager and (ii) theweakening of political commitment to decentralization would make technicalimplementation and financial control difficult to achieve. In order toaddress these concerns. an Appraisal Monitoring and Uvaluation Unit (AMBU) wasset up in CMDA to review TRIP and CHIP components after inclusion in theproject. Consequently, major components were not appraised objectively byAMEU. Under the MDP, however, each agency was appraised using key demo-graphic, municipal revenue and expenditure indicators. The AMBU is a goodbeginning although its impact to date is limited since the TRIP and CHIPcomponents were already pre-selected. The CMDA MIS is now well-establishedand has ensured a sound data base for project monitoring, although outputscould be better disseminated to the operating divisions in CMDA for moreeffective project management.
5.09 In the case of the Rs. 94 crores MDP, allocations were primarilyon the basis of population. Schemes were prepared by the municipalities andsanctioned by CMDA, the funds were on-lent through CMDA once written loanrepayment agreements were obtained. The physical works seem to have beenexecuted generally satisfactorily and the MDP is virtually completed, althoughCMDA had no role in ensuring quality control. However, the financial andinstitutional positions of this component are far from satisfactory. None ofthe municipalities have repaid any of the MDP loans, and staff positionsmandated at appraisal have not always been maintained upon incumbent retire-ment. A review of the financial health of selected municipalities indicatedlittle likelihood that these agencies would be able to meet their financialobligations in the foreseeable future since most are insolvent and survive onGOWB subsidies. Recent property tax revaluations do not appear to impactsignificantly on municipal revenues (enhancement of property tax valuesaverage only around 15% over five years, compared with an inflation rateexceeding 60% for the same period).
5.10 The issue relating to land acquisition difficulties does notappear to have been identified in sufficient detail at appraisal. Tnissubject is a well-known phenomenon in India and the problems in Calcutta areat least as serious as those experienced in other Bank-funded urban and waterprojectP nationwide. The lack of available land impacted substantially on theshelter and transportation components of the project, indicating the need fora new strategy for future urban and water projects. It may be prudent todelay appraisal until the executing agencies have "authority to enter" or"possession" which cannot be challenged, for a substantial proportion of therequired land. Otherwise, future projects will continue to sufferunpredictable delays.
5.11 Based on the above, it is recommended that any follow-on projectshould focus on trunk infrastructure, based on clearly identified and sustain-able financial and institutional criteria addressing water and seweragetariffs, property taxes, consumer charges, infrastructure development and
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investment plans, and institutional strengthening for long term sustain-ability. Due to the complexity and inter-related Issues involved, propertytax reform should be addressed in a free-standing project, provided thepolitical will is there.
6. Proiect Results
6.01 Physical Performance. The project, as appraised, was intended tocover the Five-Year Sector Investment Program of cMDA. Over the years, thisconcept changed somewhat with CMDA executing substantive "non-IDA" works inparallel with the IDA project components. At project closings the "non-IDA"works represented about 39% of the CMDA annual sector program (averaging some30% over the past eight years). Physical achievements and benefits comparedwith appraisal estimates are detailed Tables 4 and 6, Part III. Most of thephysical components and benefits perceived at appraisal have been realized.Significant deviations and reasons are sutvAarized below:
- a -
Araisal Actual Coiments
sanitation/latrine 43,964 31,838 Virtually all latrines areconversion converted. New toilet
constructions low.Public facilities, 76 48 Consequent reduced benefitmarkets to public.
CHIPHowrah Solid Waste nil Program not implemented due to
1.5 km. road changed priorities.23 vehicles250 garbage vats
Share disposal one site nil Land acquisition problem.Water Supply-mains 8.6 km. 0.51 km. All pipes procured but
benefits not yet achieved dueto construction delay.
-meters nil AbandonedSewerage
= House conn. 13,350 10,200 Potentially reduced benefits- seWor llne 38,671 32,671 for 20,000 persons.
TRIPwater supply-main 27.3 km. 16.8 km. Pipes procured but major bene-
fits not yet achieved due toconstruction delay.
Transportation All dropped due to landKona Truck Terminal acquisition problems.Barrachpore-DumExpw. South Dum
3xpw.
CMACPUrban Renewal 7 schemes nil Not practical involving
government and private sectorpartnership.
Area Development 6 schemes one Rest dropped out to land acqui-sition problems.
6.02 Health Prooram. The Health Program has beer, particularly success-ful in covering a slum population of 1.6 million, environmental improvements(87% of SAR estimate), extended outpatient and modified creche facilities.The Health Units provided under the project are popular, well-staffed byqualified practitioners and provide important outreach facilities at thecommunity level. At present, the service is provided free of charge to low-income groups; therefore, longer-term sustainability may be queried. Perhapsthe service should be Qxtended to middle- and higher-income groups at modestservice charges to cross subsidize the EWS. Based on these results, a free-
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standing project is to be financed by the Bank and ODA is to finance an inte-grated slum improvement program.
6.03 Economic Rat. of Return (ERR) Comnarisons. The ERR estimates inthe SAR were limited to water supply, sewerage and drainage, traffic andtransportation, Bustee improvements, and area development which accounted forsome 54% of the original project cost. In the table below, these estimatesare compared with the actual achievements. Caution needs to be exercised inthe comparison of ERRs, which are of limited value becauses (a) original ERRsfor the sectors were based on few projects and a number of large projects wereomitted (i.e., 4 out of 7 transport projects, 2 out of 5 water pr jects, 2 outof 13 sewerage and drainage projects and 4 out of 36 slum upgrading programsin municipalities were considered); (b) assumptions of benefits were limitedto health, increased supply of water, reduced absenteeism (for water supplyand sanitation), vehicle operation costs, excluding the appreciation in l.andvalues (for transport improvement); and (c) some projects with major benefits(e.g. Tallah-Auckland water main which would supply the whole of SouthCalcutta and the Durgapur bridge which would handle a large number ofvehicles) are not yet complete.
Sector ERR 2 CommentsSAR Estimate Actual
Water Supply components 17 13.5 Major componentsexcluded from SAR.
Sewerage & Drainage 18 11.3 Due to low populationcoverage.
Traffic & Transport 24 26.6 Due to substitution ofmore economic projects.
Bustee improvements 15 6.0 Due to high cost ofcomponent.
Area Development 13 7.4 Due to land acquisitionproblems and delayedincome.
Overall 15 13.6 50% of actual projectcost, excluding un-completed components.
6.04 The figures for water supply will improve upon completion of theTallah-Auckland trunk main in 1994 (final ERR is estimated at around 21.1%).The Traffic and Transportation component was particularly successful, despiteland problems. The improved ERR may be attributed to the substitution ofprojects with higher economic benefits. The low ERR for Area Development isnot surprising since most schemes were cancelled due to land difficulties, andincome from beneficiaries will only be derived after some years. Ultimate ERRupon completion of outstanding works is estimated at about 17.8%. Furtherdetails are presented in Table 6B, Part III.
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7. Project Sustainabilitv
7.01 Sustainability of the project varies from component to component.but is dependant to a large extent on the financial health of the agenciesresponsible for operation and maintenance of the facilitLes The MDP extendedthrough many agencies, was successfully Implemented and fully disbursed. Thisprogram could provide a basis for further development. The toilet conversionprogram, covering almost 100% of dry latrines, is a very creditable achieve-ment. However, the sustainability of the MDP investments may be queried andwould need to be seriously addressed in future investments. Indications arethat, on average, municipalities coier about 35-40% of recurring expendituresand only about 25% of total expenditures (capital and recurring) fromrevenues, with reliance on state government grants for the balance. The largegap between income and expenditure is due to: (i) the dependence of munici-palities on consolidated property tax which, when increased in past years, hasnot even matched inflation; (ii) default of payments by government agenciesand sick industries; (iii) implemented property tax increases which are verymarginal and require reform of the basis of valuations; (iv) reluctance tolevy direct user charges (CMc is an exception); and (v) poor collectionperformance and neglect of arrears collection.
7.02 MDP funds were provided to municipalities as a 70:30 loan:grantmix. However, it appears that none of the municipalities has the capacity tobegin repayment of loan funds. This situation is clearly unsatisfactory,detracts from the commendable physical achievements, and requires policyreforms.
Proiect Restructurinc. Credit gxtensions. and Borrower Relations
7.03 During 1988, CMDA proposed to expand the investment program underthe project to fully utilize the available Credit savings caused by the sharpdevaluation of the Rupee in relation to the SDR. Since the project wasprogrammatic in nature, Bank management was, in principle, sympathetic to anexpansion of the project scope.
7.04 Subsequent missions reported several problems and concerns whichmade project expansion impractical: (a) as the initial Credit closing dateapproached, only slightly more than half of the project, in physical or Rupeecost terms, was completed; (b) it was unlikely that the project, as defined atthat time, could be completed even with a three-year extension to the closingdate; (c) the proposed schemes for new investments to be added to the projectwere not fully engineered and were likely to suffer start-up delays as experi-enced at the outset of the project under similar component preparationconditions (para 4.02); (d) for the new schemes, CMDA proposed to use the samesmall (and numerous) cono:ract packages that were proven implementation deter-rents in the original project; and (e) some of the proposed major schemes,particularly water supply network expansions, lacked a master plan frameworkfor overall development.
7.05 Beyond i.nplementation problems, there were failures to comply withproject agreemetnts. Throughout project implementation, the Borrower failed tomeet covenants and agreements relating to water supply tariffs, repayment of
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municipal development fund loans made to municipalities and audits. At onepoint, statements of expenditure disbursements were discontinued on the basisof adverse audit reports.
7.06 The Bank did extend the Credit closing date a full three years inhopes of permitting the Borrower extra time to rectify problems under theexisting project. However, the Bank decided not to allow an expansion to theproject investment program for the reasons given above.
8. Bank Performance
8.01 During project preparation, there was very close interactionbetween Bank staff and government officials. This is well demonstrated by thefrequency and size of missions leading up to appraisal and by the specialistrepresentation. After effectiveness, 14 supervision missions were carried outinvolving a total staff (including consultants) input of some 97 weeks in thefield out of about 196 weeks, comprising wide ranging disciplines (Table 8(b),Part III). This input of about 22 staff weeks per year appears to have beeninadequate for a project of this complexity involving over 40 agencies.
8.02 Up to 1987, the project was supervised regularly at roughly six-month intervals. However, from then onwards, the frequency of missionsdecreased and many personnel changes took place due to staff rotations andreassignments. In a number of instances, mission team members completelychanged from mission to mission. As a result, priority emphasis changed fromtime to time with mixed signals being given by the Bank. This has resulted inmisunderstandings by the Borrower and lack of confidence in IDA's intentionsregarding the project.
8.03 Nonetheless, Bank staff interventions during supervision missionsappear to have generally been well received. For example, CNDA's managementand reporting system has dramatically improved through encouragement fromvisiting mission members.
9 Borrower Performance
9.01 The responsible agencies performed generally satisfactorily inphysical execution of the project components, although with delays. CNDAstrengthened its capacity in project monitoring and reporting, but did not usethese tools effectively in project management. The project concept involvingexecution of multi-sector NDP components through many municipal agencies washighly successful in terms of physical achievements, although the agenciesclearly lack fiscal discipline and responsibility, in the absence of GOWBpolicy guidance.
9 02 The Borrower was unable to comply with financial and institutionalcovenants almost throughout the project life. In particular, the municipa-lities failed to comply with covenants relating to water supply tariffs andloan recovery, which were major financial objectives of the project. Inaddition, the tardy audits, especially relating to bulk of the Credit dis-bursements against statements of expenditure, caused concern over managementcontrol over project finances. This resulted in discontinuance of disburse-
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ments against statements of expenditure and adjustments of disbursementsalready made. Attempts have been made to address the issues, but, to date,the outcome is marginal. However, the preparation and submission of auditstatements does not seem to have been properly addressed. Audit statementsare due to be received by IDA within nine months after the close of eachfiscal year. The latest CHDA statement received by IDA covers the periodFY1986/87.
9.03 CMDA's lack of experience in program management and contractaches .ing and packaging, and over-reliance on centralized operational controlmay have contributed to project delay. The political decision to re-bid theTallah-Auckland pipeline in smaller packages took some 12 months followinglong delays in selection of design consultants. As a result, this majorcomponent will not be operational until 1994, with financing largely throughGOWM funds outside the IDA project. Appropriate and timely employment ofconsultant expertise (local and/or foreign) could have enhanced the achieve-ment of earlier project benefits and provided support for CHDA's managementeffort.
9.04 Despite considerable discussion with Bank missions, opportunitiesto undertake long needed infrastructure master planning and development offuture investment programs were not seized by GOWB during the later stages ofthe project. GOWB has recently expressed keen interest in adopting such anapproach.
10. Proiect Relationship
10.01 The relationship between the Borrower agencies and Bank staff hasgenerally been good although the discussions described above on CMDA'sproposals to expand the project scope placed some strains on the relationshipwith CMDA.
11. Consultina Services
11.01 consulting services were utilized to a very minimum extent (1.5%of project cost estimated at appraisal, but only 0.6% actually used). Theappointed consultants performed satisfactorily. However, more effective useof consulting services on major components could have minimized projectdelays.
12. Proiect Documentation and Data
12.01 The legal agreements and the SAR were generally clear and compre-hensive, although the role of CMDA in monitoring quality control of the MDPshould have been clearly defined. The Project Agreement specifies insuranceonly of imported goods obtained under the proceeds of the IDA Credit. Asimilar covenant should have been included to cover procurement of localgoods. There was no covenant requiring submission of statements ofexpenditure audits.
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PROJECT COMPLETION REPORT
INDIA
THIRD CALCUTTA URBAN DEVELOPMENT 'ROJECT(Credit 1369-IN)
PAR!T 2S PROJECT REVIEW FROM THE BORROWER' S PERSPECTIVE
1. Proiect Desian
1.01 CUDP III was aimed at further consolidating the physical develop-ment launched in previous CUDPs with a sharp focus on the economically weakersections, and strengthening the agencies responsible for urban planning andmanagement. For the purpose of planning development works in earlier CUDPs,the metro core of CMA occupied the key area, thereby creating certain invest-ment imbalances between the metro core areas and the areas outside the metrocore. A conscious effort to decentralize urban development activities in CMAarea by securing involvement of the local bodies situated in CMA was made inthe CUDP III project period. With a view to delegating higher responsibi-lities to the local bodies for planning and implementation of the developmentwork, the Municipal Development Program and the Panchyat Development Programwere added to the project package. The non-IDA component in CUDP IIIaccounted for the spill-over projects from earlier CUDPs and amounted to about30% of the new projects identified in CUDP III in te,.ms of investments.
1.02 Attempts were made to push certain institutional and financialreforms through the covenants of the credit agreemants to support infra-structural development work. It later transpired that some of the covenantswere somewhat at variance with the then prevailing socio-economic andpolitical scenario in CMA. While finalizing the project design, certainassumptions were made regarding: (a) ready availability of adequate number ofdetailed project reports for different subcomponents of CUDP III; and (b)availability of land free from encumbrances for implementation of differentsub-components. Experience in implementing the project later indicated thatsome of these assumptions were over ambitious and rather unrealistic.
2. Implementation of the Project
2.01 To start with, there were 53 sub-components in the four mu'ti-sector subprograms, namely, Municipal Development Program, TransmunicipalInfrastructure Program, Calcutt'a and Howrah Investment Program and CNA-wideComplementary Program to be implemented over a five-year period from 1983/84to 1987/88. Because of certain initial difficulties in land acquisition andother field constraints, the project was later re-structured with 40 sub-components and its launching was delayed by about two years. The factorsleading to delay in launching the project included: (i) delay in finalizingproject design; (li) delay in carrying out the technical appraisal; and (iii)non-availability of ready land free from encumbrances.
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2.02 The setting up of the AMEU in CMDA and evolving an effectiveappraisal system were pre-conditions for launching CUDP III. There were someinevitable delays in evolving the appraisal methodology and operationalizingthe AMEV. To facilitate technical appraisal, implementing agencies, wererequired on some occasions, to repeat the technical exercises earlier done bythem leading to some delay. The Municipal Development Program required thelocal bodies to play an active part in planning and design of developmentschemes in their respective areas. In the initial years, the local bodies didnot have either required expertise or past experiences to attend to theirtasks. It was thought that nothing should be done to sap the initiative oflocal bodies in planning MDP works and CMDA, therefore, chose not to directlyintervene. There were thus, initial delays in taking up projects of the MDP.Difficulties in getting free land for execution of the projects also led tosome delays and restructuring of the project package. A number of projects inthe SURAD component, which involved acquisition of large tracts of land incongested localities in the city, had to be shelved.
2.03 There is no denying the fact that the pace of implementation ofCUDP III schemes was affected adversely during the last three years, i.e. from1989 onwards due to uncertainty regarding support of the schemes by the Bank.It was evident by 1988 that a time extension by at least three years, would benecessary to avail of the Credit. The Bank, however, insisted on grantingtime extension on piecemeal basis. Because of these uncertainties CMDA hadproblems in committing its funds to a particular project.
2.04 Other factors which contributed to delay weres (i) protractedtender negotiations; (ii) inadequate responses to tenders in some casesy (iii)occasional scarcity of basic building materials; (iv) lack of documentation ofunderground utilities and services; (v) unauthorized encroachment of projectsites; (vi) litigation; (vii) difficulties in project execution on or alongroadways; and (viii) cash flow problems.
3. Performance by the Borrower
3.01 The attempts made at decentralization of development activities inCMA through the Municipal Development Program and Panchayat DevelopmentProgram yielded rich dividends. Unlike previous CUDPs the local bodiessituated in CMA were fully involved in the task of planning, implementationand monitoring of MDP and PDP. The targets set under MDP and PDP weregenerally met in the extended project period. The Health Program was alsocompleted and as many as 50 health Administrative Units, 8 ExtendedSpecialized Outpatient Departments and 6 Modified Creche facilities bene-fitting about 1.5 million people belonging to the econoruically weaker sectionswere set up. The Community Health Program launched in CUDP III with activeinvolvement of local bodies, played an important role in raising health statusof the target group and gmnerating health. hygiene and nutrition awareness.
3.02 Out of 40 sub-components outside the ambit of MDP, PDP and health,as many as 23 subcomponents were completed and another 13 were largelycompleted. As envisaged in the project document, a large cross-section ofeconomically weaker sections living in CMA benefitted from these schemes.Viewed from this context it is felt that the performance measured in terms of
- 15 -
physical parameters, was quite satisfactory. About 88% of the originallytargeted rupee expenditures for IDA projects were actually incurred b3fore theclosing of the project.
3.03 The fact that implementation of MDP provided local bodies with theopportunity to develop considerable expertise end knowledge in project plan-ning and implementation should be considered as a major gain of CUDP III.Through implementation of CUDP III, CNDA developed an official ManagementInformation System and a reliable database. The Appraisal Monitoring andEvaluation Unit in CMDA set up during CUDP III, developed considerable in-house expertise in conducting technical and socio-economic appraisal ofdevelopment projects and evaluation.
3.04 The performance of the Shelter and Area Development component wasnot satisfactory. It has been mentioned earlier that because of land acquisi-tion problems and litigation, as many as 12 out of 13 sub-components in thiscomponent had to be excluded from the project package. There was admittedlydelay in launching of one sub-component in the water supply uector namely,Tallah-Auckland main. The tender formalities could not be completed in timeand in later years the prevailing uncertainties about support of CUDP III bythe Bank beyond the originally fixed project completion date, also affectedprocessing and launching of this scheme. It is estimated that this schemewould be completed in another 24 months time. The issue relating to recoveryof loans advanced to local bodies under the MDP could not be sorted out withinthe extended Credit period in spite of all possible efforts made by CMDA.This subject is being pursued in right earnest and it is expected that adecision would be taken soon.
3.05 While most of the covenants in the agreement could be satis-factorily complied with, a few covenants relating to recovery of water costsand municipal finance could not be met fully during the project period. Basedon the experiences of CUDP III, it may be concluded that the covenants andtime frames had not been drawn up on realistic assumptions. It was perhapsimpractical to expect that these new concepts and ideas would find universalacceptance overnight. It is pertinent to mention that introduction of ferrulecharges, increased rates of tax collection and instituting a study to decideon the modalities for collection of water charges were positive steps in thedirection of fulfillment of these covenants.
4. The World Bank's Performance
4.01 CMDA values the guidance and support it received from the WorldBank professionals in identifying thrust areas in CUDP III and in designingthe project. The interactions with the Bank were useful in initiatingmeasures to strengthen the management capabilities of local bodies and variousagencies handling urban development in CMA and identifying institutionalreforms needed. These exercises undertaken by CMDA in collaboration with theBank were reflected in the set of primary and secondary objectives of CUDP-IIas spelt out in the Staff Appraisal Report forCUDP III.
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4.02 It has now become evident that while designing the project CMDAand the Bank adopted quite a few over-ambitious targets and timeframes withoutkeeping in mind the realities in the field. Possible difficulties inacquiring bulk land free from encumbrances in different parts of CMA, particu-larly in the Central Business District in the metro core, were lost sight of.This resulted in the fact that many of the schemes in the SURAD componentnever saw the light of day and launching of a number of schemes in othersectors were delayed. While framing covenants in the agreement relating torecovery of water costs and recovery of loans to be advanced in MDP, theexisting social and political scenario were not properly kept in mind. CMDAand Bank professionals who were fully involved with designing of the projectshould share the failure and the lesson.
4.03 The agreed procedure relating to forwarding all ICB contracts tothe Bank for review was bound to involve delays. Apart from communicationdelays the Bank also took unusually long time to settle tender matters in afew cases. The loss of time could have been avoided if the Bank missionsreviewed these documents during their periodic visits to the project (as wasdone in a few cases). This could have easily been achieved if the missionshad agreed to visit the project more frequently.
4.04 CMDA and World Bank professionals underestimated the time neededfor making detailed project reports ready. It is pertinent to remember herethat lack of preparedness with detailed project reports contributed to thedelay in launching CUDP III by about two years.
4.05 In spite of delayed launching of the project, at one stage itseemed highly probable that CMDA would be able to avail of the credit in fullwith a three-year extension with a modified package. A revised projectpackage and a modified implementation schedule were prepared and submitted tothe Bank for approval. The Bank, however, refused one time extension of theproject and approval of the modified project package. The Bank insisted ongranting approval on piece-meal basis. This resulted in some kind ofconfusion and doubts as to availability of Bank's support during the extendedperiod and affected the pace of work.
4.06 It is felt that the insistence of the Bank on clubbing smallcontracts on grounds of economies of scale was not based on real appreciationof ground realities. To cite an examples the tenders for the Tallah-AucklandMain were invited in one package on Bank's insistence. For certain proceduraland administrative reasons a second set of tenders were floated after another18 months and the rate obtained in the second tender were significantly lesthan the rates earlier obtained despite the cost over-run and inflation duringthe said i8 months. The disadvantages in clubbing a number of works indifferent specialized disciplines were evidently not properly appreciated.
4.07 There are reasons to feel that frequent changes in composition ofBank missions visiting the project posed some difficulties in monitoring. Thenew mission members needed time to acquaint themselves with the project objec-tives, past histories and field constraints and some of them had individualperceptions and prioritiee different from these of the previous missions. It
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is also felt that the missions should have visited the project more frequentlyto facilitate more effective interactions with CMDA.
5. Relationship with the World Bank
5.01 The relationciip of CMDA with the World Bank dates back to theearly 1970s. CMDA values the support it received from the Bank in identifyingthrust areas in urban development in CMA, designing projects, monitoring andevaluation of ongoing activities and in effecting institutional reforms andaugmenting management capabilities. CMDA received extremely useful supportfrom the Bank in evolving an effective Management Information System anddeveloping in-house expertise in technical and socio-economic appraisal ofschemes and projects.
5.02 It is regretted that some amount of misunderstanding cropped sincelate 1988. The instances quoted below would suggest failure on the part ofthe Bank to appreciate the field constraints and compulsions of CMDA:
(a) It became evident by November 1988 that a time extension by aboutthree years would be required to avail of CUDP III credit fully.While appreciating the situation, the Bank insisted on piecemealapproval and that also on conditional basis. As a result, someamount of confusion was created regarding continuing support ofthe Bank in CUDP III programs leading to delays and uncertainties.
(b) Following changes in exchange rates between Indian Rupee and USDollar and SDR, it became evident that there would be substantialshortfall in disbursements. With a view to compensating for thisshortfall in Rupee terms, an additional project package for Re. 80crores was submitted with State Government's assurances for makingavailable extra funds. The additional project package wasdiscussed in detail with the Bank mission which visited Calcuttain November, 1988 and CMDA undertook a number of time-boundexercises on the suggestions of the Bank. It is still a mysterywhy the Bank finally refused to include the additional projectpackage in CUDP III. This action not only made the time andresources spent by CMDA in preparing the project reports andtaking up studies infractious but also created disillusionmentamong the intended beneficiaries.
(c) With a view to offsetting the shortfall in disbursemAnts, the Jankwas also moved for raising disbursement percentageu on differentcatogories of expenditures. This proposal was agreed to at a verylate stage when very little advantage could be drawn before theexpiry of the project period.
(d) Over the years a procedure for preferring reimbursement claims onthe basis of expenditure vouchers evolved in CNDA. Whenever ittranspired later that certain expenditures were inadmissible onesthese were adjusted against the future claims. In allowing dis-bursement of reimbursable expenditures in CUDP III, the Bank uni-
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laterally withheld disbursements on the basis of preliminary auditobservations.
5.03 While regretting the fact that there were certain misunder-standings and communication gaps between CMDA and the World Bank in the laterstages of CUDP III, CMDA would like to place on record its appreciation ofprofessional interactions with the Bank. CMDA would look forward to furthercollaboration with the World Bank in identification of priority areas indevelopment activities in CM1A evolving appropriate strategies and in takingup development schemes.
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PROJECT CO PUETION REPORT
INDIATHRD CALCUTTA RUMAZ DEVELOFtET PROJECT
(CREDIT 1369-IN)
PART III STATISTICAL INFOPMATION
Table 1. Related lak Loans and Credits
Title Purpose Year of status CommentsApproval
First Calcutta Urban Financing of Flve 1974 Completed 1979Developmt Project Year Invesroent(Cr. 427-IN) Program
Second Calcutta Urban Ditto 1978 Closed August 1984Developmnt Project(CC. 756-IN)
Calcutta Urban Transport Mass Transport 1980 CompletedProj<et (Cr. 1033-IN) upgrading
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Table 2. Project timetable
DATESITEM PLANNED REVISED ACTUAL
Identification (EPS) March 12, 1980 March 12, 1980Preparation September 19, 1980 through
August 1982
Appraisal Mission October 1982
Credit Negotiations April 19, 1982
Board Approval May 19, 1983
Credit Signature June 8, 1983
Credit Effectiveness September 9, 1983 October 7, 1983 October 7, 1983Credit Closing March 31, 1989 various March 31, 1992
Credit Completion
COMMENTSt
Preparation included seven missions described as reconnaissance, pre-identification, preparation, review andpre-appraisal (two missions).
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Table 3. Credit Disbursements
CUMULATIVE ESTMATED AND ACTUAL DISBURSEMENTS (AS 8'000)
WORLD BANK FINANCIAL YEARS ENDING JUNE 30
1983 1984 1983 1986 1987 1988 1989 1990 1991 1992 im
Appraisal Estimate --- 12,800 39,100 72,800 106,300 135,000 147,000
Revised (Maroh 31, 1989) --- 75,210 95,520 115,830 131,070
Actual (historicaldollars) --- 2,359 6,685 29,658 41,952 62,154 70,886 83,553 95,798 97,007
Actual as X of orti.est. --- 18.4 17.1 40.7 39.5 46.0 48.2
Actual as X of rev.est. --- 94.3 87.5 82.7* 74.0*
CSOMNTS:
* SDR 51.5 million vas cancelled ln December, 1991.Actual disbursement as of March 31, 1992 SDR 77 8 million as per Bank dLsbursement statementActual utilization during 1991 and 1992 on the basis of value of credit, net of cancellation, amounted to1152 and 102X respectively of the targets, prorated to correspond to the reduced value of credit.
22 -
Tables 4 and 6A.. Proiect Implementation / Benefits
PROGRAM I COMPONENT INDICATOR APPRAISAL ACTUALESTIMATE
MUNICIPAL DEVELOPMENT PROGRAM (MDP)
WATER SUPPLY Water mains(km) 699 868Street taps(nr) 2,934 1.749House connection(nr) N.P. 107t4Hand tubevells(nr) 1,182 1,243Deep tubewells(nr) 195 270Municipalities served(nr) 36 36Total household served(nr) N.A. N.A.
DRAINAGE Surface drains(km) 926.45 557.16Underground drains(km) 43.35 41.37Municipalities served(nr) 36 36
SANITATION / LATRINE CONVERSION Latrines I Septic tanks(nr) 10,379Sewer connection(nr) 43,964 196 31.838Pit privies(nr) _ 21,263Municipalities served(nr) 36 36Total household served(nr) N.A. 31,838
BUSTEE IMPROVEMENT Underground drains(km) A 61.75Surface drains(km) 140.76Water mains(km) 50.45Deep tubevells(nr) 16Hand tubevells(nr) 293Water points(nr) N.P. 2,256Latrines I Septic tanks(nr) 3,767Sever connections(nr) 2,040Pit privies(nr) 3,971Paved roads and paths(km) 170.39(paved)+76.21(BI. Top)Street lights(nr) 927Municipalities(nr) 36 36Bustee improved(nr) N.P. 350Total household served(nr) 2 lacs 1.89 lacs
PUBLIC FACILITIES Markets(nr) 76 48Parks and playgrounds(ar) 288 116Burning ghats(nr) 24 33Community halls(nr) 4 4Municipalities served(nr) 36 36
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Tables 4 and 6A. Pro1ect Imule.auntation I Benefits (continued)
PROGRUM I COMPONENT INDICATOR APPRAISAL ACTUALESTIMATE
TRANSPORTATION INFRASTRUCTURE Paved roads(km) 371.15 278.79+ 296.38(B.T.) + 717.96(S.Top)
Street lights(nr) 4,288 3,223Roadside drains(km) N.P. 61.96 1mMuniiLpalities served(nr) 36 36
SOLID WASTE MANAGEMENT Motorised vehLcles(nr) 126 99Other vehicles(mr) 1,829 834Street buns(nr)House bins(nr) 3,591 5,563MunicipalLties served(nr) 36 36
OVERALL BENEFITS MunicipalitLes served(nr)Household served(nr)Population served(nr)or:Beneficiaries(nr)CMC 3.3 million to completeBMC 0.74 million dittoOther 37 municipalities 4.2 million dltto
TRANSMUNICIPAL INFRASTRUCTURE PROGRAM (TRIP)
WATER SUPPLY Mains(km) 56.32 44.15Treatment plant 2 2Areas served(nr) 12 municipalities 12
DRAINACE Channels & nullahs(km) 20.3 20.3Pumping stations(nr) 1 nilRoad drainage(km) 2.0 2.0
TRANSPORTATION INFRASTRUCTURE Kona Truck Termlnal droppedBarrackpore-DumDum Expvy droppedSouth DumDum Expvy dropped
- 24 -
Tables 4 and 6A. Proiegt Iamlementation I Benefits (continued)
PRORAMN COMPONENT INDICATOR APPRISAL ACTUALESTIMATE
CALCUt BOWRAB INVESTMENT PROGRM (CHIP)
WATER SUPPLY Water mains an) 8,600 0.51 All plpea procured
Leak detection(km) Equipmant purcasedBulk metering N.A. NILPumplng station 1 1
DRAINAGE Channels 6 nullahs(km) 93.91 93.91Pumping stations(nr) 4 4
SEWERAGE Pumping stations(nr) 1 nilHouse connections(nr) 13,350 10,200Sewer line(M) 38,980 32,920Sewer cleaning(CUM) 104,000 92,000
SOLID WASTE MANAGEMENT
CALCUTTA Road to dumpiag ground(km) 12 km 12 kmVehicles(No.) 31 31Hand carts(No.) 700 700Radio control unLts(No.) 25 25
NOWRAB Ward Department(No.) 16 7Road(km) 1.5 1.5Vehioles(No.) 23 23Garbage vats(No.) 250 2S0
SEARED DISPOSAL stalled due to land problem
TRAFFIC & TRANSPORTATION Bridges built I Improved(nr) 2 2Road links(km) 11.05 10.42Bus terminals(nr) 2 2Traffic management
Civil vorks 5 SLightLng 23 16Signals 33 22
URBAN RENEWAL Number of areas 7 0
- 25 -
Tables 4 and 6A. Protect ImolemgnAtio-n Beneflts (continued)
PROGRAM I COMPONENT INDICATOR APPRAISAL ACTUALESTIMATS
1.Coverage of slum pop. 20 lacs 15.9 laos2.Eealth Administration Units(No) 60 503.Zxtended specialteed outpatient 17 8
Dept. (No)4.Modified creche(No) 10 65.Environmental improvement 8 I
progrem(loeatLon)6.Supplementary nutrLtlon 60 27
program(No)7.Supply of ambulance(No) 40 408.Vector control progrmm(units) 60 4
TRAINI
ILCUS Direct Program 2,500 2,559cMC Training Program 10,000 10,706CMDA Training Program(direct) 2,000 2,510
Training Program(Cndireot) NIL 744
SHELTER AND ARIA DEVELOPHENT
Number of areas 6 1Area(acres) N.A. 72.22
ResidentLal plots(No) LA 1,842Commercial I Industrial plots N.A. 21.40
(acres)Households(tmits) N.A. 2,542
C*enTS
1. A total of 7 urban renewal schemes in DumDum, Bhowanipore, Tollygunje, Shyambamar and Eourah were dropped fromthe project.
2. Of the 6 area development schemes originally identified (West Nowreh, Dakshinesswar, Dankuan, R.KR.xtension,North DumDum and East Calcutta Extension), only the latter was implemented.
- 26 -
Table SA. Pronect Cost
PROGRAM I SECTOR APPRAISAL EST.MATE REVISED ESTIMATE ACTUAL
LOCAL FOREIGN TOTAL US S LOCAL FOREIGN TOTAL US LOCAL FOREIGN TOTAL US 8- Rs. or. ----- million ----- Rs. or.i ----- llion ----- Re. ore. ----- mllion
A. MunicLpal Development Program (M.D.P.)1. Water supply 16.58 2.28 18.86 19.84 22.13 1.79 23.92 1S.95 22.84 22.84 8.962. Drainage 16.46 2.18 18.64 19.61 19.41 1.02 20.43 13.62 19.39 19.39 7.603. Sanitation 12.70 1.78 14.48 15.23 11.99 11.99 7.99 10.45 10.45 4.104. Bustee Improvement 7.32 0.97 8.29 8.72 10.81 10.81 7.21 14.53 14.53 5.70S. Parks* playground 2.02 0 2.02 2.13 1.30 1.30 0.87 1.00 1.00 0.396. Crematoria 0.74 0.05 0.79 0.83 0.43 0.43 0.29 0.31 0.31 0.127. Transportation lna 18.48 3.87 22.35 23.52 21.90 21.90 14.60 20.41 20.41 8.008. Markets & Comm. Ha 7.68 0.89 8.57 9.02 3.22 3.22 2.15 2.45 2.45 0.96
Subtotal 81.98 12.02 94.00 98.90 91.19 2.81 94.00 62.67 91.38 91.38 35.84S. Trans Municipal Infrastructure Program (TRIP)1. Water Supply 19.67 3.95 23.62 24.86 47.18 5.82 51.00 34.00 46.07 46.07 18.072. Drainage 4.3S 0.59 4.97 5.23 4.33 0.23 4.56 3.04 4.20 4.20 1.653. Sanitation 7.16 1.21 8.37 8.81 1.01 1.01 0.67 0.32 0.32 0.134. Transportation Inf 0.48 0.02 0.50 0.53 0.22 0.22 0.15 0.22 0.22 0.095. Area Development 2.76 0.24 3.00 3.15
Subtotal 34.45 6.01 40.46 42.58 52.74 4.05 56.79 37.86 50.81 50.81 19.93C. Calcutta-Bowrah Improvement Program (CHIP)1. Water Supply 13.96 2.47 16.43 17.30 11.86 0.96 12.82 8.55 8.40 0.16 8.56 3.362. Drainage 4.77 0.65 5.42 5.71 20.99 1.11 22.10 14.73 20.79 0.22 21.01 8.243. Sanitation 30.43 4.66 35.09 36.95 6.56 6.56 4.37 4.90 4.90 1.924. Bustee Improvement 8.65 1.29 9.94 10.47S. Transportation lnf 13.21 1.57 14.78 15.56 17.31 17.31 11.54 14.19 14.19 5.566. Urban Renewal & Bu 5.25 0.75 6.00 6.31 1.48 1.48 0.99 1.36 1.36 0.53
Subtotal 76.27 11.39 87.66 92.30 58.20 2.07 60.27 40.18 49.64 0.38 50.02 19.62D. CMA - Wide Complemntary Programs (CMACP)1. Shelter and Area D 9.00 0.00 9.00 9.48 9.14 9.14 6.09 4.39 4.39 1.722. Health 8.31 0.35 8.66 9.12 10.00 10.00 6.67 7.35 7.35 2.883. Small Scale Entrap 2.50 0.00 2.50 2.63 0.004. Panchayat Developm 10.34 1.17 11.51 12.13 10.00 10.00 6.67 9.87 9.87 3.87S. Technical Assistan 3.40 0.81 4.21 4.44 4.22 4.22 2.81 1.07 0.71 1.78 0.70
Subtotal 33.55 2.33 35.88 37.80 33.36 33.36 22.24 22.68 0.71 23.39 9.17Total Baseline Cost 226.25 31.75 258.00 271.58 235.49 8.93 244.42 162.95 214.51 1.09 215.60 84.55Design, Sup., Manage 15.00 15.00 30.00 31.50 45.50 19.50 65.00 43.33 61.00 61.00 23.92Total Project Cost 241.25 46.75 288.00 303.08 280.99 28.43 309.42 206.28 275.51 1.09 276.60 108.47
- 27 -
Table 5B. Proiect FTinanala
Plannnd inCredIt A8reemnt Revised Final
Rs USS Rs US$ Rs US$Craves MIllions Crores Millions Crates Millions
FUNS REOUIRE
Proposed Project
a) New aveastments 258.00 271.58 244.42 162.95 215.60 64.S5b) Deslgn Supervisloan Management 30.00 31.58 65.00 43.33 61.00 23.92
Total Project Costs 288.00 303.16 309.42 206.28 276.60 108.47Spillover from previous plans 42.00 44.21 111.58 74.39 l11.00 43.53
TOTAL INVESIET?W PLAN COSTS 330.00 347.37 421.00 280.67 387.60 132.00
SOURCES OF FINDS
State Plan Funds (includesprooeds of IDA credit) 170.40 179.37 171.00 114.00 140.98 55.29MInimum n eds program 23.30 24.53 $0.00 20.00 43.50 17.06CMDA Market BorrowLngs 100.90 106.21 175.00 116.67 150.07 5S.85Octrol Receipts (net) to CQDA 35.40 37.26 45.00 30.00 53.05 20.80
Total GCNB/IHDA funding 330.00 347.37 421.00 280.67 387.60 152.00
Estimate of institutionalfinance required by CMDA forshelter and area development 32.00 33.68 32.00 21.33
Commercial bank financingtowards Ss Program 10.00-20.00 10.50-21.00
- 28
Tables 63 and 6C. Feonemic Smnact & Finaneial Imoagttwheoe relvanet
PROJECT I CODE APPRAISAL ACTUALESSTIMATE (at final devolopmont)
OVERALL RETURN ON CUDP III CRED1T (Cr. 1369 - ZN)
Ebonomic Rate of Return 15.0 S 13.6 X
on 542 of total on 502 of totalproject cost project cost
Underivina assummtions
1. Smproved health.2. Better earning3. Reduced operatioal eoast of vehicles.6. TiSe saving.5. mproved agricultural production.
,Fnanclal Imoact Without Project Future with project
Additional surplus Nil R. 12. 1 or.
Notes 1. The above covers 50S of total project cost including expenditure spill over beyond March 1992.
2. The better ERR over SAR estimate Is mainly due to inclus ion of new projeets where ERR was notcalculated earlier, particularly in Water Supply and Traffic & Transport sectors.
3. Upon completion of Tallah-Auckland maln the overall ERR Is estLmated to be 17.82.
- 29 -
Tables 6B and 6C. Economic IImnagt & Pinancial Impact (oontiniu.dl
PROJECT I CODE APPRAISAL ACTUALESSTIMATE (at flnal development)
WATER SECTOR
EconoicM Rate of Return 17.0 X 13. S2
Underlvine assugntions
1. Nev consumer (wavimn ln purehase of vater).2. Reduction ia water borne diseases (212 of population served).3. aving in energy cost.4. Benefits to SCI oansumers.
Financial Impact NA.
Notes 1. The actual ERR is better than SAR estLmate entirely due to inclusion of nev projects listed belowfor which ERR was not calculated at SAR stage :-
(i) Low Pressure P.S.(it) Tallah- Palta System(ILL) Tallah- Auckland Main
2. The ERR without the Tallah-Auckland main is estimated at 21.12.
TRAFFIC & TRANSPORT SECTOR
oenomic Rate of Return 24.0 S 26.6 S
Underlvin assumptions
1. Savings ln operational cost by avoLding detour.2. Tie saving.3. Economy of high speed of vehicles.
Financial Innact NA.
Notes 1. Improved ERR over SAR estimate is mainly due to subsequent Inclusion of three projects with highbenefits.
- 30
Tables 6B and 6C. Economic Imoact A Finan¢'al Impact (continued)
PROJECT I CODE APPRAISAL ACTUALESTIMATE (at final development)
SEWERAGE & DRAINAGE SECTOR
Economio Rate of Return 18.0 S 11.3 2
lUnderlvlna asstmptlons
1. Reduction in the lneidence of vater borne and gastro-intestinal diseases.2. Better earning due to lower absenteeism.3. Improved agricultural production.
Financial _Imact N.A.
Note: 1. Lover ERR compared with SAR estlmate is due to lnclusion of a number of projects vlth ERR below 1O0and also two projects where ERR is negative. Low population denslty ls a contrLbuting factor inthese cases.
BUSTSE IMPROVEMENT
Econgmic Rate of Return 15.0 S 6.0 S
Un _rlwin a ssummtign
1. Reduction ln water borne dLseases.2. Better earning due to lower absenteelsm.
Financial Imoact N.A.
Notes 1. There L no separate project on B.I. and the above ERR Is based on Bustee Improvement under MDP.
2. AtpproxLmately 190,000 families will benefit under this program In 37 munLeLpalities.
3-. The low ERR of this component ls due to the high cost of schemes compared with the appraisalestimates.
- 31 -
Tables 6B and 6C. Economic imoaet & Financial Imoaet (contlnued)
PROJECT I CODE APPRAISAL ACTUALESTIMATE (at final development)
SHELTER & AREA DEVELOPMENT
Economic Rate of Return 13.0 X 7.4 2
Underlvin* assuumtLons
1. Profit out of sale of plots In East Caloutta Extension.
Financial Imoact Wlthout Project Future With Project
Additional surplus Nil Rs. 12.1 or.
Notes 1. There is only one project under Area Development i.e. East Calcutta Extenslon on which the abovecalculation has been based.
2. Total receipts through sale of land vould be around Rs. 12 cr. However, out of 1,842 residentialplots. 1,650 (90X) is allocated for loaer income group and economically weaker section at 30S and6OX of the market price. Allotment of land to mlddle and higher lncome groups could have Improvedthe financial viability.
3. Buyers of residential plots would be allowed to pay in installments (401 down pay mt and balancein 10 yearly Installments vLth 8X Interest). As a result, creation of seed money, which was one ofthe objectives of the project, vould not be achieved.
4. The sale of plots has not yet been advertised. As such, cash inflow would only start in 1994/95 atthe earliest.
- 32 -
Table 7. Status of Comoliane wlth Covenants
Section Status DoseriptLn of Covenant Dates Cbmmate
Orlsgnal Revlsed
Project Agreement
2.02 0O CMDAIIipleenains Ageneles toeMploy Consultants
2.04 OK CHDA to insure Liported goodsfinanead out of eredlt
2.05 OK CMA to make avaLlable to IDAall details of work deo andassets aequLred under theeredlt
4.01 0t CHDA to maintain adequateascounting records
4.02 NOX Report on audlt of CMDA Last accountsaccounts and financial sent 1986187statements due to IDA notlater than 9 months afterend of each FY.
4.03 OK CMDA shall consult withIDA on any major changesproposed In its Investmentvrogram
She~dule 2
para DLES CMDA to onlend at prevalingcomercial rate for urbanrenewal and at not less than8.252/yr for other investments
pra, 2 DLME CMDA to revlew annually Component eliminatedinterest rebate feature on frem DA creditSSE component
pars 3 OK CMDA to submLt for IDA review 9130183 11/11/83& approval draft administrativeoperational and financLal guide-ones for shelter and area
development schemes.
pars 4 i DLET CMDA to submit for IDA review Component droppedand approval draft administrativeoperational & financial gulde-lines for urban renewal sches.
pars 4 iL DLES CMDA to submit for prior review - do -by IDA appraLsal of each urbanrenewal *chemes.
para 4 lll DLET CHDA to submit for prior review - do -and approval by IDA a priolng andcost recovery analysisfor eachurban renewal scheme.
- 33 -
Table 7. Status of Comoliance vith Covenants (oontinued)
Section Status Description of Covenant Dates Coments
Original Revised
Project A8reement cont.
par& 5 OR CMDA to update every 6 monthslidividual sub-project *sple-mentation schedules to be includedin quarterly progress reports
pare 6 OR CMDA to allocate capitalresourceS as per annual reviewof revenue S capital grantrequirements(WB A8mt 3.09).
para 7 OR CMA to furnish IDA vithin 60days quarterly progress reports.
pam 8 Oa CMA to arrange at IDA requestfor inspections of keyLnstallations & forward copiesof such reports to IDA
pars 9 L OK CMDA to furnish IDA at 6 monthlyintervals, progress suAmarles ofappraisals, field surveys, otheractivlties of ANEU.
para 9 Li POR CMDA to furnish IDA with copy Compltid up to U6/89of AMEU's annual reports and but reports prepared
recommendations. for all the years.
para 10 OK CMDA to establish & maintain anarea development account.
para 11 POX CMDA to transfer completed Same assets are In"ssets to appropriate operating the process of
agencies. being transferred.
West Bonsal Aireement
3.01 POK Departments, agencies, Most of the agenaLesauthorities responsible for are to 1989/90.carrying out project to maintainadequate accountiLg records.
3.02 N0K Reports on audlt of accounts and Audlt reports only upfinanclal statements for muncli- to 1986817.palities, CMWSA, CIT. HIT due toIDA not later than 9 months afterend of each fLscal year.
3.03 OK GMOW to employ accounting flrms Accounts for 1986189acceptable to IDA to asslst and 1989190 updated.municLpalities in maintainingand closing their accounts.
- 34 -
Table 7. Status of Conuijance vith Covenants (continued)
Section status Description of Covenant Dates Comnts
OrgliaMl Revised
Project Agreement cent.
W.Uansal Areemnt ceont.
3.04 OK GO0B to review property taxassessfent base of munioc-palLties end if necessarycause CUB to carry out generalre-evaluatLon.
3.05 NOR COWSA to set charges for waterto meet specified interLmtargets and to recover all costsfor operation, maintenance anddebt service by JY85186.
3.06 P00 GOWB to ensure prompt payment C0B deducting paymentsof outstanding CMWSA vater due to ChWSA efro CffCbills to municipalities. subventLens and other
dues.
3.07 i 0 0O0B to deposit Rs 5 Cr latoarea development account.
3.07 Li OK GO01 to deposit Rs 4 Cr lntoares development *ccount.
3.08 a NOM C0MW to meet specified Laterimarnual targets towards costrecovery of its water supplyoperatLons.
3.08 b P0K cm"S8 to prepare forecasts of Forecasts preparedits water supply operatlons to targets aot met.meet requirements of sectoan3.08 a.
3.09 1 OK G001 to annually update Performance tagnetsT-rformance targets etc. for prepared, achieve-each municipality meats below tar&at.
3.09 Li OK C0M to make appropriate - do -provisions to FAX based onrolling yearly estimates.
Schedulg
pars I NOK M CM to reduce lts reliance oan00M subventios from about20S ln FY 83.4 to about 101in FY 87I88.
para 2 mmK CKC to achieve cash collectionsof speeLfLed interim percentagesof current property tax demand 6not less thean 852 in 87188.
- 35 -
Table 7. Status of Comolianne with Covenants (continued)
Section Status Description of Covenant Dates Cemamte
Origin"l Revised
para 9 0 CMC to achieve cash collectlonsof at least 501 of arrearsproperty tax demand.
pars 415 a POX 0(C to take measures to met 11190 Due varled types Ofspecified interLm targets for reportn fromits water supply operations and consultants followingto recover all expenditures for different methodologies.operatiens, maintenane, purcbase the survey has beenbulk water & charges equivalent delayed and is stlllto depreciation by FY 87/88. ontiaula8
para 5 b POM CKC to prepare forecasts of itswater supply operations to meetrequlrements of pars 5 a.
Para 6 OK CMC to introduce graduated Ferrule chargeswater rates for unmetered Introduced.domestic consumers.
para 7 OK CMC to revise its rates formetered non-domestic consumers.
pars S OK CMC to introduce licensing feeof all new private tubewells.
pars 9 POX CMC to adhere to agreed time- 1131/90 Program ef surveytable and targets for meter'nS survey prepared andand consumer survey programs. some progress madeprograms. wLth Installations.
pars 10 OX CHO to install and maintain ameter reading, billing andcensumer service departmnt.
OX D Covenant complied with.8 . Compliance expected in reasonably short tLme.
a KYD - Not yet due.DLMS - Proposed for deletion as no longer relevant.REVS = Needs revision Li agreement vlth borrower to reflect changed circumstances.ACT - Peeds use of foumal remedLes to bring about compliance.UNR - Status of covenant unknown.POK - Partially complied wlth.lOK - Not in compliance.
notes 1. Project agreement specifies insurance of only Lmported goods obtained under IDA credit. Similaroevenant should have been there covering local goods obtained under IDA eredit.
2. Section 4 02 covers submlssion of audited accounts vithln nine months of end of each FY. Similarcovenant should have been there for audited SOE's.
- 36
Table 8B. Ml"alons
Stage of Mouthl Number Days ln Speciallsasiton Performance Types ofProject Cycle Year of Person Fleld Represented Rating problems
Status
Through Appralsal Jan/80 4 10Septso 2 14DOeoSO I 5Feb/81 2 11Nov/81 2 1sMar/82 4 18Jun/182 4 14Sep/82 9 21
Appraisal throughBoard Approval _ _ _
Board Approvalthuh _ Effectiveness
Supervis ion1 Nov/83 7 12 a,b,c,d,-,f,s 2 o2 May/84 6 12 a.c,e,f,8,h 2 b,d3 Dec/84 6 15 s,b,c,e,f,g 1 o4 Jun/85 4 9 a,c,f,h 3 b,d5 DeC/85 5 12 a,¢,d,f,g 2 a,b6 May/86 1 3 a 3 *,b7 Nov/86 7 13 a.c,d,e,f,8,h 3 a,b,c8 May/87 5 10 a,b,e,f,g 2 a,e9 Feb/88 5 11 a,b,e,f,g 2 a,o
10 Nov/88 8 9 a,b,b,e,d,g,h,i 2 a,b11 Mar/89 2 4 b,d 2 a,b12 Aug/89 3 5 a,a,d 3 a.b13 Nov/90 3 8 ¢,e,f 2 a,e,d14 Feb/92 3 7 b,d,f 2 a,b
Specialisatione a-Finance Analyst baSanitary Engr. c-Economist d-Urban Plannerc-Traffic/Transport En8r f-Municipal Engr &-Solid Waste Spec.h-Health Spec. l-Procurement Spec.
Status 1-Problem free or miner pro2-Moderate problemS-Major problems
Type of Problemsa a-Financial b-Zmstitutional c-Procurement 4-TechhnLca
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