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Completion Report

Project Number: 35335-013 Loan Number: 2154 September 2016

India: National Highway Sector II Project

This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011.

CURRENCY EQUIVALENTS

Currency Unit – India rupee/s (Re/Rs)

At Appraisal At Project Completion (30 November 2004) (31 December 2011)

Re1.00 = $0.0221 $0.0188 $1.00 = Rs45.150 Rs53.105

ABBREVIATIONS ADB – Asian Development Bank CSC – construction supervision consultant EIRR – economic internal rate of return FIDIC – Fédération Internationale Des Ingénieurs-Conseils FIRR – financial internal rate of return IEE – initial environmental examination km – Kilometer LIBOR – London interbank offered rate NH – national highway NHAI – National Highways Authority of India NHDP – National Highways Development Project O&M – operation and maintenance OMT – operate–maintain–transfer PIU – project implementation unit PMU – project management unit PSP

ROB – private sector participation

Road over Bridge TA – technical assistance VOC – vehicle operating cost

NOTES

(i) The Government of India’s fiscal year (FY) ends on 31 March. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY 2016 begins on 1 April 2015 and ends on 31 March 2016.

(ii) 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, Country Director, India Resident Mission (INRM), SARD Team leader A. K. Motwani, Senior Project Officer (Transport), SARD Team members M. Sharma, Associate Project Analyst, 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.

CONTENTS Page

BASIC DATA i

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 6 H. Consultant Recruitment and Procurement 6 I. Performance of Consultants and Contractors 7 J. Performance of the Borrower and the Executing Agency 7 K. 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 Outputs 9 D. Preliminary Assessment of Sustainability 10 E. Impact 11

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13

A. Overall Assessment 13 B. Lessons 14 C. Recommendations 14

APPENDIXES 1. Project Framework 15 2. Summary of Salient Features of the Project Highway 17 3. Project Costs and Financing 18 4. Disbursement of ADB Loan Proceeds 20 5. Appraisal and Actual Implementation Schedules Compared 21 6. Chronology of Major Events 22 7. Organization Structure for Project Implementation 24 8. Status of Compliance with Major Loan Covenants 25 9. Summary of Contract Packages Financed by ADB 38 10. Initial Operation of the Project Highway 40 11. Economic Reevaluation 44 12. Financial Reevaluation 50 13. Contribution to the ADB Results Framework 54

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 2154 National Highway Sector II Project India National Highways Authority of India $400 million 1598

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)

13 July 2004 22 July 2004 29 November 2004 30 November 2004 21 December 2004 15 December 2005 15 March 2006 20 February 2006 none 31 December 2008 9 May 2012 3 London interbank offered rate (LIBOR)-based lending facility 0.75% 25 5 none none

9. Disbursements a. Dates Initial Disbursement

23 October 2006

Final Disbursement 9 April 2012

Time Interval 65.18 months

Effective Date 20 February 2006

Original Closing Date 31 December 2008

Time Interval 32.8 months

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b. Amount ($)

Category Original Allocation

Last Revised Allocation

Amount Increased/ (Cancelled)

Amount Disbursed

Undisbursed Balance

1 Civil Works 370,000,000

380,000,000 10,000,000 369,736,210 10,263,790

2 Equipment 4,900,000 0 (4,900,000) 0 0

3 Consulting Services:

3A Institutional Strengthening 1,000,000 0 (1,000,000) 0

3B Construction Supervision 23,700,000 20,000,000 (3,700,000) 18,609,156 1,390,844

3C Road Safety Consultant 200,000 0 (200,000) 0 0

3D HIV/AIDS Consultant 200,000 0 (200,000) 0 0

Total 400,000,000 400,000,000 0 388,345,366 11,654,634

( ) = negative. Notes: 1. The last loan category reallocation was made on 16 February 2012. 2. The undisbursed amount was cancelled at financial account closure on 9 May 2012.

10. Local Costs (Financed):

- Amount ($) 422,357 - Percent of Local Costs 0.15% - Percent of Total Cost 0.06%

C. Project Data

1. Project Cost ($ million)

Cost Appraisal Estimate Actual

Foreign Exchange Cost 418.6 473.7

Local Currency Cost 252.0 270.7

Total 670.6 744.4

2. Financing Plan ($ million)

Cost Appraisal Estimate Actual

Implementation Costs

Borrower Financed 231.1 338.6

ADB Financed 400.0 388.3

Total 631.1 726.9

IDC Costs and other Financial Charges

Borrower Financed 39.5 17.5

ADB Financed 0.0 0.0

Total 39.5 17.5

ADB = Asian Development Bank, IDC = interest during construction.

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3. Cost Breakdown by Project Component ($ million)

Component Appraisal Estimate Actual

A. Institutional Development

1. Consulting Services 1.0 0.0

2. Equipment and Training 0.2 0.0

3. Project Management 0.1 0.1

Subtotal A 1.3 0.1

B. Highway Development

1. Land Acquisition and Resettlement 40.9 34.9

2. Civil Works 502.0 612.9

3. Environmental Works 7.0



Subtotal B 579.6 679.0

C. Road Safety

1. Equipment 8.4 0.0



Subtotal C 8.7 0.1

D. HIV/AIDS and Anti-trafficking

1. Consultants, NGOs, Survey, Materials, Workshops 0.2 0.2

Subtotal D 0.2 0.2

E. Total Base Cost (A+B+C+D) 589.8 679.4

F. Taxes and Duties 41.3 47.5

G. Commitment Charge 0.5 6.1

H. Interest During Implementation 39.0 11.4

Total Project Cost (A+B+C+D+F+G+H) 670.6 744.4

NGOs = nongovernment organizations Note: The cost for environmental works at completion is included in the cost of civil works.

4. Project Schedule

Item Appraisal Estimate Actual

A. Project preparation

Subproject preparation Q1 2004–Q4 2004 Q1 2004–Q4 2005

Civil works contract procurement Q3 2004–Q2 2005 Q2 2005–Q1 2007

B. Civil works implementation

Group I (C3–C9) Q2 2005–Q4 2007 Q2 2006–Q1 2015a

Group II (C10–C15) Q2 2005–Q4 2007 Q1 2007–Q1 2011

C. Construction supervision consultants

Selection Q3 2004–Q1 2005 Q1 2006–Q3 2006

Supervision Q2 2005–Q4 2008 Q4 2006–Q1 2015a

Q = Quarter aGroup I civil works contracts were completed by March 2013, except for contract package C8, which

was

completed in February 2015.

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5. Project Performance Report Ratings

Ratingsa

Implementation Period Development Objectives Implementation Progress

1–31 December 2004 Satisfactory Satisfactory

1 January–31 May 2005 Satisfactory Satisfactory

1 June–31 December 2005 Satisfactory Unsatisfactory

1 January–31 January 2006 Satisfactory Unsatisfactory

1 February–31 December 2006 Satisfactory Satisfactory

1 January–31 December 2007 Satisfactory Satisfactory




1 January–31 December 2011 On Trackb

1 January–31 June 2012 On Trackb

aProject performance report ratings are based on a different method than that used for the project completion report.

bBased on new ratings for project performance from 2011 using e-operations.

D. Data on Asian Development Bank Missions

Name of Mission Date

No. of Persons

No. of Person-

Days

Specialization of Members

Fact-finding 5–21 May 2004 10 70 c, c, d, f, c, b, j, r,

e, c

Appraisal 13–22 July 2004 8 80 c, c, c, i, o, o, o, o

Special Loan Administration 21–23 June 2006 5 15 e, c, b, g, g

Inception 20–24 November 2006 3 15 b, d, a

Review 1 9–20 March 2007 3 23 b, d, b

Special Loan Administration 16 July 2007 2 2 p, b

Review 2 8–12 October 2007 3 15 b, d, y

Special Loan Administration 31 March–4 April 2008 3 15 b, d, c

Review 3 30 June–10 July 2008 2 22 b, b

Review 4 11–18 May 2009 2 16 c, a

Review 5

3–9 November 2009 3 21 c, j, a

Review 6 19–28 April 2010 2 20 c, a

Review 7a 31 August–

6 September 2010

4 28 c, j, d, a

Review 8a 16–19 May 2011 2 8 c, a

Project completion review 13–19 March 2016 1 6 s

a = analyst, b = transport specialist, c = project implementation specialist, d = resettlement and social development specialist, e = director, f = financial specialist, g = procurement specialist, i = counsel, j = environmental specialist, o = consultant, p = project administration unit head, r = private sector development specialist, s = staff consultant, y = young professional. acombined with other projects in the project areas.

I. PROJECT DESCRIPTION 1. In 1998, the Government of India launched the National Highways Development Project (NHDP) to upgrade key arteries of the national highways network and relieve the system’s chronic capacity constraints (para. 3). The Asian Development Bank (ADB) provided a series of loans to support the NHDP, which was entrusted to National Highways Authority of India (NHAI) for implementation. The $400 million National Highway Sector II Project (the project) was approved on 21 December 2004 and was the fifth loan in this series supporting the last stage of the NHAI’s institutional strengthening program and financing the upgrading of the national highway along the north–south corridor. The project’s anticipated impact was improved transport efficiency, leading to expanded economic opportunities.1 2. At appraisal, the project outputs were (i) improved efficiency of the authority responsible for managing national highways; (ii) upgraded north–south corridor; (iii) improved road safety; and (iv) higher community awareness of the risks of HIV/AIDS and human trafficking.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation 3. India’s economy has long suffered from the national highway system’s chronic capacity shortage. In 1998 the government launched the NHDP to address capacity issues and upgrade key arterial highway corridors. Its key components were (i) rehabilitating and widening the Golden Quadrilateral, a 6,000 km highway network to be completed by the end of 2004 (first phase); and (ii) rehabilitating and widening the 4,000-km north–south corridor and the 3,300-km east–west corridor to be completed by the end of 2007 (second phase). ADB provided a series of loans in support of the NHDP. The project was the fifth and the last in this series. The project’s main element was to rehabilitate and widen priority sections of the north–south corridor, with an emphasis on 566 km of existing highway covering 313 km of NH26 (Lalitpur–Lakhnadon) and 253 km of NH7 (Kurnool–Andhra Pradesh/Karnataka border) in the states of Uttar Pradesh, Madhya Pradesh and Andhra Pradesh. The project was aligned with the strategy outlined in the Country Strategy and Program Update (2005－20072) and it supported the NHDP. ADB's

strategies for India’s national highway subsector were to further strengthen project development and implementation capability and to enhance private-sector participation (PSP). 4. A project of such magnitude required broad-based policy reforms, including institutional capacity building for financial management. Since 2001, ADB has adopted a programmatic approach for NHAI to advance these reforms in a progressive and evolutionary manner through a multi-year, lending program. ADB support to the government under this multi-year program includes (i) strengthening NHAI’s project development and implementation capability; (ii) promoting PSP in highway development, tolling, and operation and maintenance (O&M); (iii) strengthening NHAI’s fund mobilization capability; (iv) strengthening NHAI’s O&M functions; and (v) restructuring NHAI to make it more efficient. The programmatic approach is highly relevant to support the government’s priority to expeditiously complete a modern, safe national highway network. To perform its role, NHAI must have sufficient implementation capability, secure financing, PSP, O&M capability, and an effective organization. This approach was consistent

1 ADB. 2004. Report and Recommendation of the President to the Board of Directors on Proposed Loan to India for

National Highway Sector II Project. Manila. (Loan 2154-IND, approved on 21 December 2004). 2 ADB. 2005. Country Strategy and Program Update: India, 2005-2007. Manila.

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with ADB’s country strategy program as well as with the government’s transport policy. ADB approved and implemented project preparatory technical assistance (PPTA) to formulate and prepare the project and to appraise and approve subprojects under the sector loan modality.3 5. The project was intended to support NHAI in its institutional strengthening to enable it to carry out its mandate more efficiently and contribute to overall transport efficiency. Traffic would increase along the north–south corridor with improved transport efficiency, shorter journey times, lower vehicle operating costs, and reduced accidents. The project would spread the benefits of economic development by catalyzing forward backward linkages, uplifting the people in the project area, most of whom are poor. Project design and preparation incorporated lessons from implementing previous loans in India. The mitigation measures to address the project risks were: (i) providing technical support for achieving NHAI’s institutional strengthening objectives, (ii) undertaking advance procurement actions, (iii) establishing project implementation units (PIUs) early, (iv) strengthening project management to reduce possible implementation delays, (v) auditing road safety, and (vi) providing a road safety zone to address the potential for an increase in accidents as a result of improvements to the highway network. 6. The project design and formulation were relevant to the government’s objectives and policies, as well as to ADB’s country partnership strategy, during and after implementation (paras. 30 and 31). The project was well designed and ADB’s objectives under its programmatic approach for NHAI were achieved. This was the second loan to NHAI under the sector loan modality, which facilitated simultaneous appraisal and approval of the subprojects and the loan processing. There were no changes in project design during implementation. Overall, the project’s outputs and outcomes met the government’s development objectives and ADB’s country partnership strategy. The project framework showing the results is in Appendix 1.

B. Project Outputs

1. Institutional Strengthening

7. At appraisal, it was anticipated that the project would help NHAI achieve its institutional development objectives to improve its efficiency, particularly (i) strengthening project management; and (ii) updating standards and codes of practice for planning, design, construction and maintenance of highways. Under government’s own initiative on institutional development, NHAI (i) implemented a restructuring program proposed by consultants4 engaged under a World-Bank-funded project to strengthen project management efficiency; and (ii) adapted updated standards and code of practice for planning, design, construction and maintenance of highways. Under the restructuring program, NHAI expanded its board and created new functional units responsible for road safety, legal issues, quality control, and project appraisal. Because NHAI completed institutional strengthening on its own, the loan allocation for this output was not used.

2. Highway Development

8. The project anticipated that 566 kilometers (km) of national highways would be widened to four lanes. Two sections of the national highways were prepared under a sector loan modality following the requirements and procedures set forth at appraisal. Upon completion, 567.03 km 3 ADB 2003. Technical Assistance to India for National Highway Sector II. Manila. (TA 4152-IND, $300,000, approved on 21 July 2003).

4 Consultant recommendations under the World Bank project were modified by an interministerial committee and

approved by cabinet in July 2007.

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of national highways along the north–south corridor had been widened to four lanes and upgraded with substantial road furniture and safety facilities. The project highway covers two sections: 314.43 km of NH26 (Lalitpur–Lakhnadon) and 252.60 km of NH7 (Kurnool–Andhra Pradesh/Karnataka border). The movement of people and goods on upgraded roads during 2015, the first full year of operation, was estimated as 2,267,726 average daily vehicle-km.5 The salient features of the completed project highway sections are in Appendix 2. 9. Contractors carried out quality control during construction as contractually required. The construction supervision consultants (CSCs) assessed and supervised the works to monitor the adherence with the specifications. No significant defects or quality problems were reported during the defect liability period.6 ADB’s project completion review (PCR) mission observed that the project highways were good quality, comfortable to drive on, and equipped with systems to maintain good condition.7

3. Road Safety 10. The project aimed to improve road safety along the project corridor. It was envisaged at appraisal that the project would adopt the road safety zone concept and implementation arrangements developed under Loan 2029-IND: National Highways Corridor Sector (I) Project8. The highway section in Andhra Pradesh was selected as a pilot. The selected zone was to be equipped with an advanced traffic management system, weighing platforms to control overloading, speed monitoring equipment, and ambulances and other relief vehicles. NHAI engaged a consulting firm under Loan 2029-IND in March 2011 to carry out the safety audit, design the road safety zone, and prepare specifications for road safety equipment for both projects (I) and (II). The study was significantly delayed because of late recruitment of consultants. Some of the safety equipment has been incorporated in the completed highway facility as a part of the O&M concession.

4. HIV/AIDS and Human-Trafficking Awareness 11. This output was intended to develop and implement a program to raise awareness of the risk of HIV/AIDS and human trafficking along the project highways. In accordance with the civil works contracts, all contractors conducted the HIV/AIDS awareness and prevention programs for the labor. NHAI engaged nongovernment organizations (NGOs) to support implementation of the resettlement plans and to conduct intensive HIV/AIDS awareness campaign at project sites. NHAI completed these tasks using its own resources, so the loan was not used for this output. C. Project Costs 12. At appraisal, the project cost was estimated at $670.6 million equivalent, including base cost, taxes, duties, and financial charges. The project experienced a significant cost overrun in civil works, mainly because of escalating prices for labor and construction materials. The average price for industrial labor increased by 22% from 2005 to 2008, while costs of materials such as iron and steel (34%), cement (37%), and bitumen (150%) increased even more. In 2010, an estimate of completion costs revealed that NHAI would have to pay $68 million equivalent in

5 At appraisal, the estimate of the average daily vehicle-km during the first full year of operations is 2,662,584.

6 The defect liability period is 1 year after the completion of civil works per the project’s civil works contracts.

7 The international roughness index of project roads measured by the CSCs was in the range of 2–4.

8 ADB. 2003. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to India

for National Highway Corridor Sector (I) Project. Manila. (Loan 2029-IND, for $400 million, approved on 4 December 2003).

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additional costs for civil works. The cost for civil works at completion was 27.7% higher in rupee terms than the contract amount. The total project cost at completion was $744.4 million equivalent, about 11% above the original estimate. The allocation of $8.4 million for the equipment under the road safety component could not be used because of delays in engaging consultants. Some of the road safety and traffic management activities were incorporated in the completed highway facility as a part of the O&M concession. 13. The project was intended to be financed through an ADB loan of $400.0 million (59.6% of the project cost) and government funds of $270.6 million (40.4%). Upon completion, the final project financing was $388.3 million (52.2%) from ADB and $356.1 million (47.8%) from the government. A detailed comparison of the project cost and financing plan at appraisal and at completion is in Appendix 3.

D. Disbursements 14. The ADB loan was approved on 21 December 2004, signed on 15 December 2005, and became effective on 20 February 2006. The loan proceeds were disbursed according to ADB’s Loan Disbursement Handbook (January 2001) and Disbursement Guidelines for Disbursement Operations, LIBOR-based Loan Products (July 2002), as amended from time to time. The imprest account and statement of expenditure methods were not used during implementation because NHAI had sufficient funds to make payments and the individual payments made were generally larger than the threshold for the statement of expenditure method. 15. Initial implementation delays affected disbursements. The first disbursement was made on 23 October 2006, about 8 months after loan effectiveness. Loan disbursements in 2007 and 2008 were slow because of delays in awarding contracts. To facilitate project implementation and completion, ADB approved three extensions to the loan closing date (see paras 16–17). As the implementation progress accelerated, disbursement peaked in 2009 and 2010 with a total disbursement of $199.43 million (51.4% of the total loan amount) during these two years. Even though some of the civil works contracts were not expected to be completed by the loan closing date, it was assessed that the entire loan amount will be utilized for the expenditures incurred by the loan closing date and no further loan extensions were undertaken. Loan financial accounts were kept open to complete disbursement of expenditures incurred prior to loan closing. At loan financial closure on 9 May 2012, $388.35 million was disbursed (97.08% of the total loan amount). The remaining undisbursed loan amount of $11.65 million was canceled. ADB loan disbursements are listed in Appendix 4. E. Project Schedule 16. At appraisal, the project was planned to be implemented over 48 months, including procurement and pre-construction activities, and to be completed on 30 June 2008. To expedite procurement, ADB approved advance action for prequalification of civil works contractors. ADB approved the subprojects for Group I contracts (civil works contract packages C3–C9) in December 2005 and for Group II contracts (civil works contract packages C10–C15) in January 2006. However, the procurement for civil works contracts and award of works was delayed (para. 24). The Group I contracts were signed during April–May 2006 and civil works commenced in April–June 2006. The Group II contracts were signed during January–February 2007 and civil works commenced in March 2007. The loan closing date was extended from 31 December 2008 to 31 December 2009 to accommodate procurement delays. 17. The implementation of Group I contracts were delayed considerably, particularly contract

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packages C5, C6, C8, and C9. Contract package C7 was the first to be completed in December 2009. Contract packages C3, C4, C5, C6, and C9 were completed progressively during 2012–13 after considerable delays, and contract package C8 was completed only in February 2015. The implementation delays were mainly a result of delays in mobilization by contractors; weak site management; inadequate manpower and equipment; and poor planning and scheduling, including prolonged delays in taking up work on critical structures such as flyovers, roads over bridges (ROBs), and bridges. Land acquisition and forest clearance were delayed for some contracts during the initial period, but these were not a primary reason for overall project delays. Some contractors were issued notices for slow progress and pre-termination notices. The performance of some contractors improved after they signed supplementary agreements on achieving minimum progress milestones (para. 27). The loan closing date was further extended twice to 31 December 2011—a cumulative extension of 3 years—to accommodate completion of Group I contracts. Implementation of most of these contracts went even beyond the extended loan closing date. The last contract was completed in February 2015. 18. Although Group II contracts were awarded and commenced after the Group I contracts, the performance of the contractors was satisfactory and these contracts were completed during July 2010 to February 2011—much before the completion of the Group I contracts and within the extended loan closing date of 31 December 2011. 19. A comparison of the actual implementation schedule and the schedule at appraisal is in Appendix 5, and a chronology of the main events is in Appendix 6. F. Implementation Arrangements 20. NHAI was the project’s executing agency, as envisaged at appraisal. NHAI headquarters had established a project management unit (PMU) for the north–south corridor, headed by chief general manager and assisted by general managers and deputy general managers. The PMU was responsible for managing the project. NHAI was restructured in 2009, and NHAI deployed chief general managers as regional officers in the states where it had major operations. Deployment of regional officers was intended to improve coordination with the state governments to expedite land acquisition, shifting of public utilities, forest clearances, and monitoring of construction work. A general manager at NHAI headquarters in Delhi was made responsible for two to three states. The HIV/AIDS prevention and anti-trafficking cell within NHAI’s environment and a social development unit and the PIUs implemented the related outputs. PIUs were established in the field at Sagar,9 Narshingpur, and Anantapur before the award of civil works contracts to implement pre-construction activities such as shifting utilities, cutting of trees, land acquisition, and resettlement of affected persons. Each PIU was headed by a Project Director, who was assisted by several managers for technical, resettlement, and environment aspects. The PIUs were adequately staffed with experienced personnel. Sufficient administrative authority was delegated to the PIUs for effective and timely decision-making on many aspects of project implementation. The PIUs were assisted by the construction supervision consultants (CSCs). The CSCs were assigned the power of the engineer in accordance with the Fédération Internationale Des Ingénieurs-Conseils (FIDIC) conditions of the contract, barring a few exceptions for which NHAI had to grant prior approval. NHAI also engaged six NGOs to assist in land acquisition and resettlement, addressing social safeguard issues, and implementation of the HIV/AIDS and anti-trafficking component of the project. The organization structure for project implementation is in Appendix 7.

9 The project established a PIU at Sagar—rather than at Lalitpur, as envisaged during appraisal—because it was

closer to project roads.

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G. Conditions and Covenants 21. The project complied with the covenants specified in the loan and project agreements. During implementation, the government and the executing agency established an adequate organizational framework with adequate staff. Monthly and quarterly progress reports were submitted to ADB as required. The government provided the required counterpart funds, financed cost overruns in a timely manner, and ensured that the project was implemented successfully. Separate financial accounts for the project were maintained, as required, which were audited on an annual basis by statutory auditors and submitted to ADB with minor delays. The loan and project covenants related to project implementation, O&M, selection of subprojects, social and environmental safeguards, and reporting were complied with. The covenants specified in the loan and project agreements have been assessed to be relevant to the project. The status of compliance with major loan covenants is in Appendix 8. H. Consultant Recruitment and Procurement 22. As envisaged at appraisal, four CSCs were recruited following the quality- and cost-based selection procedure and in accordance with ADB’s Guidelines on the Use of Consultants (2002, as amended from time to time). The CSCs were responsible for contract packages C3–C6, C7–C9, C10–C12, and C13–C15, respectively. The contracts with the first two CSCs were signed in October 2006. The contracts with other two CSCs were signed in March–April 2007. CSCs’ contracts were extended because of delays in completion of the civil works by the contractors. 23. NHAI implemented institutional strengthening on its own and inputs of consultants for this component were not required under the project. NHAI engaged a consulting firm under Loan 2029-IND in March 2011 to carry out the safety audit, design the road safety zone, and prepare specifications for road safety equipment for both projects I and II, so no separate consultants were required. Six NGOs engaged by NHAI (two for each PIU) to assist in the implementation of resettlement plans also conducted HIV/AIDS and anti-trafficking awareness program. Engagement of separate consultants for raising awareness on HIV/AIDs and anti-trafficking was not required. 24. At appraisal, the civil works were designed in 13 contract packages: seven packages for NH 26 (Group I, C3–C9) and six packages for NH 7 (Group II, C10–C15).10 The civil works procurement conformed to ADB’s Procurement Guidelines (1999, as amended from time to time) and used international competitive bidding. To expedite procurement, ADB approved advance action for prequalification of civil works contractors. Procurement for the Group I contracts went smoothly and the contracts were awarded in April–May 2006. NHAI’s recommendation for the award of the Group II contracts was approved by the ADB Procurement Committee subject to confirmation of details. NHAI later decided to rebid for Group II contracts based on ex-post-facto findings on deviations from the procedure for the evaluation of multiple contracts stipulated in the bid documents and the expiry of the bid validity period. The revised recommendations were discussed during an ADB mission in June 2006 and ADB subsequently approved a rebid. Civil works contracts for Group II contracts were awarded in January–February 2007. The civil works contract packages (with contract prices and actual costs at completion) are summarized in Appendix 9.

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At appraisal, the civil works packages were numbered C1–C13. During implementation, the packages were renumbered C3–C15 according to NHAI’s overall construction arrangement.

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I. Performance of Consultants and Contractors 25. Consultants’ overall performance is rated satisfactory. Consulting services envisaged at appraisal were four CSCs, providing a total of 288 person-months of international and 4,487 person-months of domestic consulting inputs. 26. Four CSCs were engaged during implementation and assigned the role of engineer in accordance with the FIDIC conditions of contract. CSCs’ scopes of work included design reviews, project management, construction supervision, measurement and payment assistance, monitoring of environmental management plan and resettlement plans, and preparation of progress reports. Some of the CSCs were not fully staffed—particularly initially—and made frequent changes in their key personnel. In some cases, this led to delays in issuance of designs, drawings, and critical decisions to contractors and affected progress. Regular review of CSCs’ performance by the PIUs and ADB missions improved performance. CSCs’ contracts were extended several times until the end of defect liability period because of delays in completion of civil works. Upon completion, CSCs had provided 6,251 person-months of consulting services of which 294.5 person-months were international and 5,956.9 person-months domestic. 27. The performance of the civil works contractors varied and the overall performance is rated partly satisfactory. Six contractors were selected to implement 13 civil works contracts. Three contractors were awarded multiple contracts—two contractors were awarded four contracts each and one contractor was awarded two contracts. The progress on most contracts under Group I was poor, mainly because of slow mobilization of equipment, lack of manpower, and poor site management. The performance of contractors on four contracts (C5, C6, C8, and C9) was particularly poor. Some contractors were issued notices for slow progress and pre-termination notices. NHAI subsequently signed supplementary agreements with the poorly performing contractors on achieving minimum progress milestones. Most contractors significantly enhanced equipment, resources, and labor to meet these minimum progress milestones; the performance of few contractors remained a matter of concern. NHAI undertook substantial measures, including conducting regular meetings with the contractors’ management, to resolve contract issues. ADB extended the loan closing date three times to accommodate the completion of contracts. Still, most Group I contracts continued beyond the extended loan closing date. The performance of contractors on the Group II contracts was satisfactory, and work was completed by the extended loan closing date of 31 December 2011. J. Performance of the Borrower and the Executing Agency 28. The overall performance of the borrower and the executing agency (NHAI) is rated satisfactory. Related government agencies, including the Department of Economic Affairs under the Ministry of Finance, actively participated in project coordination and monitoring. NHAI established well-staffed PIUs, which coordinated feasibility studies, project preparation, shifting of utilities, land acquisition, tree cutting, environmental clearances, procurement of civil works contracts, and engagement of CSCs. NHAI complied with the loan covenants. NHAI implemented the project’s institutional strengthening component on its own initiative. NHAI also implemented the HIV/AIDS and human-trafficking awareness component with its own financial resources; no additional assistance under the loan was required. NHAI continued strengthening the framework for road safety and PSP in O&M as a part of ADB’s programmatic approach for national highway system. Over the years, NHAI has made significant progress in implementing NHDP (Appendix 1). However, the project experienced substantial construction delays, which postponed project benefits anticipated at appraisal. The road safety component was not fully

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implemented as anticipated. K. Performance of the Asian Development Bank 29. ADB’s performance is rated satisfactory. ADB headquarters administered the project until January 2009, then delegated it to ADB’s India Resident Mission (INRM). ADB was closely involved in identifying and resolving issues during implementation through (i) tripartite project review meetings between the Borrower, the executing agency, and ADB; and (ii) regular review missions. During implementation, ADB conducted 13 review missions, including the inception mission in 2006, three special loan administration missions, and the completion review mission in 2016. ADB analyzed implementation issues affecting the project and provided substantial inputs in preparing action plans to expedite project implementation. Documents for engagement of consultants and procurement of civil works packages were approved in a timely manner at the processing and implementation stages. All claims for payment were processed promptly. ADB extended the loan closing date three times at the government’s request to facilitate implementation and completion of the project.

III. EVALUATION OF PERFORMANCE A. Relevance 30. The project was considered relevant at appraisal and at completion, as it was an integral part of the government’s strategy to develop national highways under the NHDP (paras. 4 and 5). The government’s 11th Five-Year Plan, 2007–2012 articulated the need for adequate, cost-effective, and high-quality infrastructure as a prerequisite to sustain growth. The plan aimed to increase total infrastructure investment from about 5% of gross domestic product in the 10th Five-Year Plan to 9% in the 11th Five-Year Plan.11

31. As a part of its programmatic approach to support implementation of the NHDP, ADB continued its multiyear lending program by providing loans for the development of the NHDP. ADB’s multiyear lending assistance for the NHDP, which includes assistance to the project, has helped NHAI to enhance PSP in road development and O&M. The project was well designed and is considered relevant (para. 3–6). A sector loan modality for the project facilitated simultaneous appraisal and approval for the subprojects as well as the loan processing. ADB's country partnership strategy 2009–2012 was designed to support government efforts to address constraints identified in the 11th Five-Year Plan. These included strengthening infrastructure development in poor states, promoting PSP in infrastructure development, supporting climate change adaptation and mitigation, and encouraging innovative financing modalities to increase the leverage of ADB operations. In the country partnership strategy 2013–2017, ADB continues to support the government’s strategic goals through faster, more inclusive, and sustainable growth.12 As of 31 December 2015, ADB had provided 52 loans totaling $10,995 million to India’s transport sector, accounting for about 33.2% of total ADB lending to India. Overall, the project is considered relevant to the government’s development objectives and plan as well as to ADB’s strategy and lending policy.

11 Government of India, Secretariat for Infrastructure, Planning Commission. 2011. Compendium of National

Highway Projects. Delhi. 12

ADB. 2013. Country Partnership Strategy: India, 2013–2017. Manila.

9

B. Effectiveness in Achieving Outcome 32. The project is rated effective in achieving its outcomes. The impact and outcomes of the project were achieved. Upon completion, the performance targets under the project outcomes had been achieved or exceeded. Under NHDP, 24,460 km of national highway had been upgraded as of 31 May 2016. An integrated corridor management concept for about 48,000 km national highways has been developed. The private sector is undertaking corridor management and maintaining project roads under various forms of contracts. The percentage of four-lane highways along north–south corridor has been increased by more than 50%. Although about 80% of the north–south corridor has been completed, the critical highway section connecting the northern and southern part of the country is not yet complete. Based on the traffic growth trends on adjoining sections, north–south vehicle traffic is expected to increase by 9% a year. Travel time on project highways has reduced by more than 50% and the international roughness index on the project highway has reduced from 8 m/km to below 2.5 m/km. Despite implementation delays, all project outputs except for road safety (para. 10) were completed as envisaged at appraisal. Upon completion, 567.03 km of national highways along the north–south corridor had been upgraded and widened to four lanes, and substantial road safety features had been incorporated. Upon completion, travel times had reduced on the project highway because vehicular speeds increased from 40 km per hour in 2004 to 80 km per hour for cars,13 and from 30 km per hour in 2004 to 50–60 km per hour for trucks. Vehicle operating costs (VOCs) have reduced by an average of 42%, which has reduced passenger and freight transport costs. Road safety has improved because the carriageway is now separated by a median and other road safety features under the project. However, due to an increase in vehicle speeds and traffic volumes, road accidents remain a significant concern (para. 41). The project highway, service roads, and roadside amenities have improved connectivity to rural areas and have brought substantial socioeconomic benefits to the project area. Institutional strengthening through NHAI initiatives has improved NHAI’s efficiency in highway development, project management, and road maintenance. Public awareness of HIV/AIDS and anti-trafficking has significantly increased. Land acquisition, resettlement, and environmental impacts did not affect the achievement of the outcomes (paras. 44 to 48). C. Efficiency in Achieving Outcome and Outputs 33. The project is rated efficient in achieving outcomes and outputs. The ADB PCR mission carried out economic reevaluation using a methodology similar to that adopted at appraisal using the updated input data. During ADB’s PCR mission, traffic data was collected for the project highway, which indicated that the annual average daily traffic in 2015 was 3,138 vehicles on the northern section of the project highway and 5,071 vehicles on the southern section.14 The traffic forecasts were updated based on current data for economic and financial reevaluation at project completion. A summary of the initial operation of the project highway is in Appendix 10. In the economic reevaluation, the economic benefits were recalculated by comparing the with- and without-project scenarios. The economic internal rate of return (EIRR) for the whole project was recalculated at 15.5%, with an economic net present value of Rs37,029 million. The EIRR for the northern and the southern sections are 12.1% and 19.2% respectively. The EIRR for the north section is lower than the EIRR of 14.9% estimated at appraisal because of higher capital costs and lower traffic volume.15 The EIRR for the southern section is higher than that for the

13

The designed speed of the project highway is 80–100 km per hour. 14 Traffic data was provided by the concessionaires; some adjustments were made to account for round-trip traffic

and non-toll vehicles. 15

At appraisal, only the northern section was selected as a sample for the economic evaluation.

10

northern section because of much higher traffic volume. The recalculated EIRRs are higher than the ADB recommended discount rate of 12%. A sensitivity analysis shows that the project remains economically viable as the EIRRs are higher than 12%. With an EIRR of 15.5%, the project is rated economically viable. Details of the economic reevaluation are in Appendix 11. 34. Project implementation delays postponed anticipated benefits. The loan was signed about a year after the approval because of delays in the procurement and award of contracts. Some of the contracts were completed after the loan closing date and were financed by the government. The PCR was prepared after the last contract was completed in February 2015. The recalculated EIRR incorporates the effect of these factors. D. Preliminary Assessment of Sustainability 35. The project is considered likely sustainable in consideration of the following factors. 36. Financial Reevaluation. The project’s financial internal rate of return (FIRR) was reevaluated based on actual capital costs, prevailing O&M cost, a revised traffic forecast, and existing toll rates and revenue. The FIRR was recalculated at 5.2% for the whole project. The FIRRs for the northern and the southern sections are 3.4% and 7.3% respectively. The FIRR for the northern section is higher than the 3.3% estimated at appraisal because of higher toll rates.16 The FIRR for the southern section is much higher than that for the northern section because of higher traffic volume and revenue. The recalculated FIRRs are higher than the recalculated weighted average cost of capital (WACC) of 1.93%. 17 The project is rated financially viable. Details of the financial reevaluation are in Appendix 12.

37. Operation and Maintenance of the Project Highways. O&M of the project highway was awarded to private firms, as envisaged at appraisal. The project highways are operated by two private firms under nine-year operate–maintain–transfer (OMT) contracts (Appendix 10). The private operators are responsible for collecting tolls from highway users and maintaining the highways. The PIUs have engaged consultants to monitor O&M of the project highways. There are seven toll plazas: four on the northern section and three on the southern section. The toll plazas operate 24 hours a day, with 65–100 staff at each toll plaza. The private operators have vehicles and facilities for emergency rescue, first aid, patrolling, and routine maintenance. All toll plazas have installed weighing equipment to monitor truck loads and control overloading. Computerized semiautomatic toll collection systems enable vehicle and toll information to be entered at each toll booth and compiled at the toll plaza office. 38. Institutional, Environmental, and Social Sustainability. NHAI has been restructuring and improving based on reviews and recommendations from high-level government committees. NHAI is implementing the enhanced NHDP primarily through public–private partnerships and engineering, procurement, and construction contracts. NHAI has been taking steps to streamline its business processes and resolve implementation issues through suitable modifications to its regulations and policies.

39. The project was classified under environmental category B in accordance with ADB’s Environment Assessment Guidelines (2003) and did not have any significant adverse environmental impacts. The project is considered environmentally sustainable (paras. 44 and

16

The base toll rate for car was Rs0.55 per vehicle-km at appraisal, and Rs1.06 per vehicle-km in 2015. 17 The weighted average cost of capital was recalculated during the PCR Mission by using actual capital cost and

financing sources.

11

45). The project is also considered socially sustainable because of positive socioeconomic impacts (para. 43).

40. Development of Whole Highway Corridor. The project covers two highway sections of the NHDP’s north–south corridor. Although the major length of the north–south corridor has been completed, some highway sections between the project’s northern and southern sections are still under implementation. The four-lane highway corridor from north to south is still not complete, and long-distance through-traffic has not been generated. Once the remaining sections of the north–south corridor is complete, the overall connectivity will improve and the traffic and economic development will further increase.

41. Road Safety and Public Transport Services. Although the project incorporated road safety features, road safety remains a concern. Accident data for the project highway indicate a significant number of fatalities (Appendix 10). The project highway is not fully access-controlled and serves mixed and local traffic and pedestrians. Many slow-moving vehicles use the inner lanes and some vehicles drive in the wrong direction. Road safety needs to be enhanced through strict enforcement of traffic rules, road safety awareness campaigns, and the provision of additional safety features such as median barriers, pedestrian overpasses or underpasses, additional service roads, and traffic lights and signs in populated areas. In view of the total safety concerns, the government at the highest level has increased its focus on road safety and has been undertaking several measures to improve it. Public transport services serving the local population along project highways are inadequate and poorly regulated. The government needs to promote low-cost, reliable transport for local populations, particularly the poor. A well-developed, low-cost, and safe public transport system would improve accessibility and enable the poor to participate in more economic activities and to access social services. E. Impact

1. Socioeconomic Impacts 42. Road transport efficiency has improved, leading to more economic opportunities. By 31 May 2016, more than 26,000 km of national highways had been improved to four or six lanes. This constitutes more than 40% of the national highway network of 65,569 km in 2004 and more than 27% of the current national highway network of 96,261 km. Cargo and passenger traffic has increased. 43. The overall impact of the project is significant. At completion, the project had reduced VOCs, congestion, travel time, and transport costs. Project implementation has significantly improved national highway connectivity along the north–south corridor as well as in the project area, which has facilitated rapid socioeconomic development in the project states and throughout the country. ADB missions conducted or attended some consultation meetings with affected persons during implementation. The ADB PCR mission held consultation meetings with the local PIUs and the private highway operators and collected the latest information on the project’s social impacts. Upon project completion (i) total VOCs were reduced by about 42%, with VOC savings per vehicle-kilometer of Rs0.8 for two-wheelers, Rs3.1 for cars and jeeps, Rs12.6 for buses, Rs11.7 for trucks, and Rs14.1 for heavy trucks; (ii) the savings in average travel time for a whole journey was about 6 hours for car and jeep passengers and 8 hours for bus passengers; (iii) about 24,000 person-months of inputs from local workers were utilized for construction; (iv) the actual average income of local residents at least doubled; (v) the price of the land along the project highway has increased by about five times; (vi) about 560 full-time staff currently work at the seven toll plazas on the project highway; and (vii) a large number of

12

roadside businesses have been established or expanded, providing significant working opportunities to the local population, especially the poor. The project has improved connectivity for rural areas and poor residents, although public transport could be improved. The upgraded highway corridor provides opportunities for further economic, industrial, and commercial development, potentially leading to increased employment.

2. Environmental Safeguards 44. The project was classified under environmental category B in accordance with ADB’s Environment Assessment Guidelines (2003) and complied with ADB’s Environment Policy (2002). Initial environmental examinations (IEEs) were carried out for Sagar–Rajmarg Chauraha Section (98 km) of NH26, which was selected as the sample road by NHAI. The IEE report indicated that the project would not have significant adverse environmental impacts. An environmental management plan (EMP) was prepared to ensure that all activities would be performed in compliance with principles and objectives of ecologically sustainable development. The IEEs and EMPs for the other three subprojects were prepared following the environmental assessment and review framework finalized under the project and the summary IEE was disclosed to the public. The environmental mitigation measures identified in the IEE and EMP were incorporated in the design and the EMP was incorporated in the contract documents for civil works. 45. An environmental monitoring cell was established under each PIU to implement environmental mitigation measures and monitor environmental compliance. The project obtained the required statutory clearances. Contractors implemented mitigation measures related to disposal of debris during construction, noise and air pollution, borrow areas and quarries, labor and staff camps, environmental quality at the construction and plant sites, traffic safety for road users, personal safety for workers, and flora and fauna. Environmental experts from the CSCs visited the project sites regularly to monitor the air quality, noise level, soil pollution, forestation, and other environmental parameters. Any deficiencies were recorded and reported for the contractors to take immediate corrective action. The environmental monitoring results were incorporated in the progress reports. ADB monitored compliance with environmental safeguard requirements by fielding environment experts and reviewing the monitoring reports and provided suggestions to the PIUs, CSCs, and the contractors to further strengthen the implementation of mitigation measures and monitoring mechanisms. No complaints were received from the public on environmental aspects. The project complied with environmental safeguard loan covenants. The ADB PCR mission observed that adequate bridges, culverts, and drains had been built to facilitate drainage and reduce soil erosion. As anticipated at appraisal, the completed project has improved the environmental quality along the project highways by (i) reducing air and dust pollution, particularly emissions, because of afforestation as well as upgradation of existing road and construction of flyovers, underpasses, overpasses, and service roads; (ii) reducing noise by building walls and noise barriers at select locations and planting trees and shrubs in the right-of-way and median; and (iii) reducing erosion of the embankments by using vegetation and other protective works. The planting of trees and shrubs was well implemented, with sufficient and timely maintenance.

3. Land Acquisition and Resettlement 46. At appraisal, it was anticipated that the highway improvements would be carried out within the existing right-of-way. The project design avoided residential areas as much as possible, mainly by using bypasses, especially where religious places may have to be moved and schools, clinics, and other common property facilities are close to the new alignments.

13

Impacts due to diversions during construction was identified and mitigation measures were proposed. In accordance with ADB's Handbook on Resettlement: A Guide to Good Practice, a resettlement plan for a section of the project highway (Lalitpur–Sagar, 104 km) was prepared as a sample, including the entitlement matrix. Resettlement plans for the other subprojects were prepared according to the project’s resettlement framework. 47. During implementation, land acquisition and resettlement impacts were minimized as much as possible by (i) keeping rights-of-way to 45 meters wide in built-up areas and reserve forest areas, (ii) adopting concentric symmetrical widening, (iii) raising carriageways over congested segments, and (iv) using bypasses to avoid congested urban settlements. Micro-plans were prepared in accordance with the entitlement matrix and approved by NHAI. Entitlement-cum-identity cards were provided to affected persons indicating the type of loss and entitlement. Payments were made to the affected persons as per the respective resettlement plans prior to the commencement of civil works on that section. None of the affected persons were disadvantaged by the resettlement process. Measures to mitigate resettlement impacts included (i) compensation at full replacement cost for all lost assets, (ii) resettlement and rehabilitation assistance such as allowance to shift affected assets, (iii) transitional allowances for loss of workdays and/or income because of dislocation, and (iv) economic rehabilitation grants for livelihood restoration. A consultative and participatory approach was used to develop resettlement sites, allocate residential plots, and design a training and skill development program. Monitoring mechanisms were put in place to monitor utilization of the assistance to affected persons. Grievance redress committees were established in all related districts to deal with disputes. 48. NHAI engaged six NGOs to assist in the implementation of the resettlement plans. Common property resources such as schools, religious structures, bus stops, wells, statues, cattle troughs, and hand pumps were relocated. Total cost of land acquisition and resettlement was assessed at Rs1,504 million.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS A. Overall Assessment 49. Overall the project is rated successful. The project is relevant to the government’s overall development objectives and ADB’s country partnership strategy. The project was well designed and the objectives of the ADB’s pragmatic approach for NHAI were achieved. The road transport efficiency has improved leading to expansion of economic opportunities. The completed national highway corridor has improved connectivity in the project area, facilitated traffic along the north–south corridor, and significantly supported socioeconomic development. The project has reduced VOCs, congestion, travel time, and transport costs. The project is rated effective in achieving its outcomes. The economic and financial reevaluation indicate the project will continue to be viable. The project is rated efficient in achieving its outcomes and outputs. Some sustainability issues relating to whole corridor development, road safety, and public transport need to be addressed: about 80% of the north–south corridor has been widened and upgraded, and work on the remaining sections is ongoing. Once the remaining section of the north–south corridor is complete, traffic and economic development will further increase. The government at the highest level has increased its focus on road safety and has been undertaking several measures to improve it. The project is rated likely sustainable.

14

B. Lessons 50. The project was the fifth and the last loan in support of India’s NHDP. Some lessons learned during project implementation can be applied to other ADB projects in India. 51. Land acquisition and resettlement. Slow progress on land acquisition, resettlement, and forest clearance have delayed some contracts initially, although not in a significant way. These delays have occurred on several ADB-funded transport sector projects in India. A project readiness checklist now ensure that preconstruction activities take place in advance and that well-prepared projects are taken up for approval.

52. Qualification and Performance of the Contractors. Most of the project contractors were large—some of them international—and had the financial and technical capacity for the civil works. However, significant delay in the completion of the contracts was caused due to poor contractor performance. The contractual provisions related to the contractor performance —including mobilization, staffing, and deployment of equipment and funds—needs to be strengthened to avoid delays seen on this project.

53. One contractor who was awarded multiple contract packages performed particularly poorly. Qualification criteria for awarding multiple contracts to a single contractor should be strengthened for future projects. Unresolved contract disputes can affect project cash flow and progress: some disputes under the contract are unresolved even after works were complete. The contract dispute resolution mechanism needs to be improved to minimize the disputes and resolve them promptly.

54. Road Safety. Although the project included substantial road safety features, road safety remains a concern. Better enforcement of traffic rules, road safety awareness campaigns, and enhanced road safety features should be incorporated in the design of future projects. C. Recommendations

1. Project Related 55. Project Benefit Monitoring and Evaluation. The project has improved socioeconomic conditions in the project area and is likely to affect a larger area in the next few years. Full completion of the north–south corridor is likely to spur development along this transport artery. A benefit monitoring and evaluation study should be undertaken to document the socioeconomic benefits and the lessons learned for future projects. 56. Timing of the Project Performance Evaluation Report. The project performance evaluation report should be prepared in 2018 or later. By then, most of the project highway sections will have been fully operating for 5 years and the entire north–south corridor should be four lanes wide. Traffic growth, performance of private sector concessionaires, traffic safety, public transport services, and impacts on poverty can be better assessed at that time.

2. General 57. Project sustainability. Future projects could benefit from measures to improve sustainability, especially with regard to road maintenance and financing, toll policy, road safety enhancement, axle load control, and development of transport services. Concepts and tools on road asset management should also be introduced.

PROJECT FRAMEWORK

Design Summary Performance

Indicators/Targets Project Achievements

Impact Improved road transport efficiency, leading to expansion of economic opportunities

� Percentage of four-lane national highways

increased from 6% to 20%

� Increased cargo and passenger transport

� By 31 May 2016, more than 26,000 km of

national highways have been widened to four or six lanes. This constitutes more than 40% of the national highway network of 65,569 km in 2004 and more than 27% of the current national highway network of 96,261 km.

� Freight traffic on roads has increased by about 100% from FY2005 to FY2012. Passenger traffic on roads has increased by about 100% from FY2007 to FY2012.

Outcome � Strengthen NHAI to perform its

responsibilities � Improve access connecting the northern and

the southern parts of the country

· � Completed the upgrading of 13,000 km

under the National Highways Development Project by 2008.

� Developed an integrated corridor management concept for 6,000 km of highways and awarded to private sector by 2008.

� Increased percentage of four-lane

highways along the north–south corridor by 15%.

� Increased north–south vehicle movement by 9% per annum.

� Under the NHDP, 24,460 km of the national

highways had been upgraded by 31 May 2016.

� Integrated corridor management concept for about 48,000 km national highways has been developed. The corridor management and road maintenance for the completed works have been awarded to the private sector under various forms of contracts.

� Four-lane highways along north–south

corridor have increased by more than 50%.

� Although about 80% of the north–south corridor has been completed, the critical highway section connecting the northern and southern part of the country is under implementation. Based on the traffic growth trends on adjoining sections, north–south vehicular movement is expected to increase by 9% per year.

15 A

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1

Design Summary Performance

Indicators/Targets Project Achievements

� By 2008, travel time on project highways reduced by 50% · International roughness index reduced from 8 to 2.5 m/km on project highways by 2008

� Travel time on the project highway has reduced by more than 50%. The international roughness index of the project highway is below 2.5 m/km.

Outputs 1. Efficient authority responsible for managing

national highways 2. Upgraded north–south corridor

3. Improved road safety 4. Raised community awareness of the risks of

HIV/AIDS and human trafficking

1. By 2007, the new organization structure and

staffing in place, permanent staff proportion increased by 50%, and standards and guidelines updated, and financial management system improved.

2. Minimum 560 km of national highways

upgraded by 2008. 3. Traffic fatalities in the road safety zone

reduced by 20%. 4. Available and accessible information,

prevention tools, and services for testing, counselling and treatment.

1. NHAI implemented a restructuring

program approved by the cabinet in 2007 for improving the institutional and project management efficiency. NHAI also adapted updated standards and codes of practice for planning, design, construction and maintenance of highways.

2. Upon completion, 567.03 km of national highways along the north–south corridor were widened to four lanes and upgraded with substantial road furniture and safety facilities.

3. Some of the safety equipment and facilities suggested under the study on road safety under Loan 2029-IND has been incorporated in the completed highway as a part of the O&M concession. However, the accident data for the project highway still indicate a significant number of fatalities.

4. All contractors conducted the HIV/AIDS and anti-trafficking awareness and prevention programs for the labor. The NGOs conducted intensive HIV/AIDs awareness and anti-trafficking campaigns at project sites.

HIV/AIDS = human immunodeficiency virus/acquired immunodeficiency syndrome, FY = fiscal year, km = kilometer, m = meter, NGO = non government organization, NHAI = National Highway Authority of India, NHDP = National Highway Development Project, O&M = operation and maintenance Sources: ADB. 2004. Report and Recommendation of the President to the Board of Directors on Proposed Loan to India for the National Highway Sector II Project. Manila; and ADB project completion review mission.

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6

SUMMARY OF SALIENT FEATURES OF THE PROJECT HIGHWAY

Feature Sagar Project Implementation Unit Narshingpur Project Implementation Unit

unit C-3 C-4 C-5 C-6 C-7 C-8 C-9

Length km 37.99 55.69 26.80 43.25 41.70 54.30 54.70

Service roads km 2.68 1.02 1.20 0.00 0.00 4.00 6.43

Interchanges no. 0 0 0 0 0 1 0

ROB no. 0 0 1 0 0 1 0

Flyover no. 0 0 2 0 1 2 1

Vehicle overpass/underpass no. 0 0 26 0 3 1 2

LCV underpass no. 6 4 6 5 0 3 6

Major bridge no. 0 1 0 4 2 3 3

Minor bridge no. 7 6 2 8 8 10 10

Pipe culvert no. 0 0 0 0 15 47 84

Box & slab culvert no. 86 48 38 91 86 51 17

Toll plaza no. 0 1 0 1 1 0 1

Rest area no. 2 1 2 1 0 0 0

Truck lay-bys no. 2 1 0 1 1 1 1

Bus bay and shelter no. 5 11 5 7 0 0 0

Feature Anantapur Project Implementation Unit

Total unit C-10 C-11 C-12 C-13 C-14 C-15

Length km 40.00 42.40 42.60 40.00 44.00 43.60 567.03

Service roads km 9.72 3.40 4.00 22.52 1.20 1.99 58.16

Interchanges no. 0 0 0 0 0 0 1

ROB no. 0 1 1 1 1 1 7

Flyover no. 1 0 0 1 0 0 8

Vehicle overpass/underpass no. 2 4 2 6 7 3 56

LCV underpass no. 4 5 3 3 4 2 51

Major bridge no. 2 0 2 3 0 0 20

Minor bridge no. 15 12 14 6 13 7 118

Pipe culvert no. 47 85 79 82 93 96 628

Box & slab culvert no. 16 22 34 18 29 73 609

Toll plaza no. 1 0 1 0 1 0 7

Rest area no. 0 0 0 0 0 0 6

Truck lay-bys no. 2 2 2 4 5 8 30

Bus bay and shelter no. 26 20 30 0 0 0 104

km = kilometer, LCV = light commercial vehicle, ROB = railway over-bridge. Sources: ADB project completion review mission; project implementation units.

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17

PROJECT COSTS AND FINANCING

Table A3.1: Project Costs ($ million)

Appraisal Estimate Actual

Item

Foreign Exchange

Local Currency

Total Cost

Foreign

Exchange Local

Currency Total Cost

A. Institutional Development

1. Consulting Services

0.5 0.5 1.0

0.0 0.0 0.0

2. Equipment and Training

0.2 0.2

0.0 0.0

3. Project Management

0.1 0.1

0.1 0.1

Subtotal A

0.5 0.8 1.3

0.0 0.1 0.1

B. Highway Development

1. Land Acquisition and Resettlement

40.9 40.9

34.9 34.9

2. Civil Works

370.0 132.0 502.0

451.8 161.2 612.9

3. Environmental Works

a

7.0 7.0


5.5 18.2 23.7

4.5 14.8 19.3


6.0 6.0

11.8 11.8

Subtotal B

375.5 204.1 579.6

456.2 222.8 679.0

C. Road Safety

1. Equipment

3.0 5.4 8.4

0.0 0.0 0.0


0.1 0.1 0.2

0.0 0.0 0.0


0.1 0.1

0.1 0.1

Subtotal C

3.1 5.6 8.7

0.0 0.1 0.1

D. HIV/AIDS and Anti-Trafficking

1. Consultants, NGOs, Survey, Materials, Workshops

0.2 0.2

0.2 0.2

Subtotal D

0.2 0.2

0.2 0.2

E. Total Base Cost

379.1 210.7 589.8

456.2 223.1 679.4

F. Taxes and Duties

41.3 41.3

47.6 47.6

G. Commitment Charge

0.5

0.5

6.1

6.1

H. Interest During Construction

39.0

39.0

11.4

11.4

Total Project Costs 418.6 252.0 670.6 473.7 270.7 744.4 NGOs = nongovernment organizations. a

The cost for environment works at completion was incorporated in the cost for civil works. Sources: ADB. 2004. Report and Recommendation of the President to the Board of Directors on Proposed Loan to India for the National Highway Sector II Project. Manila; ADB loan financial information system; project implementation units.

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Table A3.2: Project Financing ($ million)

Source

At Appraisal Actual

Foreign Exchange

Local Currency

Cost % of Total

Foreign

Exchange Local

Currency Cost

% of Total

Asian Development Bank 379.1 20.9 400.0 59.6%

387.9 0.4 388.3 52.2%

Government 39.5 231.1 270.6 40.4%

85.8 270.3 356.1 47.8%

Total 418.6 252.0 670.6 100.0%

473.7 270.7 744.4 100.0% ADB = Asian Development Bank. Sources: ADB. 2004. Report and Recommendation of the President to the Board of Directors on Proposed Loan to India for the National Highway Sector II Project. Manila; ADB loan financial information system; project implementation units.

App

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19

20 Appendix 4

DISBURSEMENT OF ADB LOAN PROCEEDS

Table A4: Annual and Cumulative Disbursement of ADB Loan Proceeds

($ million)

Year

Annual Disbursement Cumulative Disbursement

Amount % of Total

Amount % of Total

($ million) ($ million)

2006 11.27 2.9%

11.27 2.9%

2007 46.92 12.1%

58.19 15.0%

2008 76.71 19.8%

134.90 34.7%

2009 112.61 29.0%

247.51 63.7%

2010 86.83 22.4%

334.33 86.1%

2011 45.79 11.8%

380.12 97.9%

2012 8.22 2.1%

388.35 100.0%

Total 388.35 100.0% ADB = Asian Development Bank. 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

Q = quarter Note: Group I civil work contracts were progressively completed by March 2013, except for contract package C8, which was completed in February 2015. Sources: Project implementation units and ADB project completion review mission.

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

Project Preparation

Civil Works

Construction Supervision Consultants

At appraisal Actual

B

Group I (C3－C9)

Group II (C10－C15)

C

Selection

Supervision

A

Subproject preparation

Contract procument

Item 2004 20152005 2006 2007 2008 20122009 2010 2011 20142013

App

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21

22 Appendix 6

CHRONOLOGY OF MAJOR EVENTS

Date Main Event

2004

3–21 May ADB fact-finding mission

2 July ADB management review meeting

13–22 July Project appraisal mission

29–30 November Loan negotiation in Delhi

21 December ADB board approval of the loan

2005

15 December Signing of loan agreement

21 December ADB approval for award of civil works contracts for Group I contract packages (Package C3–C9)

2006

10 February ADB approval for award of civil works contracts awards for Group II contract packages (Package C10–C15)

20 February Loan effectiveness

12 April Contract signed for civil works packages C5–C9

19 April Contract signed for civil works package C4

16 May Contract signed for civil works package C3

21–23 June ADB special loan administration mission

13 July ADB approval of cancellation of bidding and rebidding for Group II contract packages (Package C10–C15)

5 October Contract signed for the supervision consultants for packages of C3–C9

23 October First loan disbursement

20–24 November ADB project inception mission

2007

16 January Contract signed for civil works contract packages C10, C11, C14, and C15.

20 February Contract signed for civil works contract packages C12 and C13

9–20 March ADB project review mission

15 March Contract signed for the supervision consultants for packages of C13, C14, and C15

3 April Contract signed for the supervision consultants for packages of C10, C11, and C12

16 July ADB special loan administration mission

8–12 October ADB project review mission

2008

31 March–4 April ADB special loan administration mission

30 June–10 July ADB project review mission

Appendix 6 23

Date Main Event

29 August ADB approval of first extension of loan closing date to 31 December 2009

31 December Original loan closing date

2009

29 January The project administration delegated to INRM.

11–18 May ADB project review mission

3–9 November ADB project review mission

5 December Completion of civil works contract package C7

14 December ADB approval of second extension of loan closing date to 31 December 2010

2010

19–28 April ADB project review mission

31 July Completion of civil works contract package C15

31 August–6 September ADB project review mission

9 September Completion of civil works contract package C14

30 November Completion of civil works contract package C13

2011

9 February ADB approval of third extension of loan closing date to 31 December 2011

15 February Completion of civil works contracts packages C10, C11, and C12

16–19 May ADB project review mission

31 December Actual loan closing date

2012

5 January Completion of civil works contract package C3

14 February Last loan reallocation of funds

28 March Completion of civil works contract package C4

9 April Final loan disbursement

31 October Completion of civil works contract package C5

2013



2015

26 February Completion of civil works contract package C8

2016

13–19 March ADB project completion mission

ADB = Asian Development Bank Source: ADB project completion mission.

ORGANIZATION STRUCTURE FOR PROJECT IMPLEMENTATION

PIU = project implementation unit, NGO = nongovernment organization Sources: ADB project completion review mission and project implementation units.

National Highway Authority of India (Headquarters)

PIU – Sagar

Project Director Managers Accountant

Supporting Staff

PIU – Anantapur


Supporting Staff

PIU – Narsinghpur


Supporting Staff

Civil Works Contractors (Contract Packages C3–C6)


24 A

ppen

dix

7

NGOs


Supervision Consultants

NGOs


Supervision Consultants

NGOs Construction Supervision Consultants


Appendix 8 25

STATUS OF COMPLIANCE WITH MAJOR LOAN COVENANTS

Covenant

Reference in Loan

Agreement Status of Compliance

General 1. (a) NHAI through its N-S Corridor PMU shall

be responsible for execution of the Project. (b) The Borrower shall continue to delegate NHAI with sufficient administrative and financial authority for expeditious implementation.

Schedule 6, para. 1

Complied with. (a) NHAI was responsible for project

execution through the N-S Corridor PMU. (b) NHAI was delegated with sufficient

administrative and financial authority for expeditious implementation.

2. Without limiting the generality of Section 4.02 of this Loan Agreement, the Borrower shall ensure sufficient and timely budgetary allocations, counterpart funds (including additional funds as may be required on account of detailed designs), staff, and administrative clearance, to NHAI for efficient and timely implementation of the Project.

Schedule 6, para. 2

Complied with. The Borrower provided sufficient budgetary allocations and staff for efficient and timely implementation of the project. At project completion, the Borrower had provided total counterpart funds of $354.5 million equivalent.

Project Implementation 3. The Project shall be implemented as follows:

(a) Component A – (i) by General Manager (Administration), NHAI for the institutional strengthening, and (ii) by the Steering Committee for updating of highways standards and codes of practice. (b) Component B – by each PIU under the N-S Corridor PMU as follows – (i) PIU-Narsinghpur, responsible for 3 civil works contracts and as coordinating unit for overall Project implementation; (ii) PIU-Lalitpur, responsible for 4 civil works contracts; and (iii) PIU-Anantapur, responsible for all 6 civil works contracts on NH7. (c) Component C – by the CMU; and (d) Component D – by General Manager (Estate Management) through the ESDU and PIUs referred in clause (b) of the paragraph.

Schedule 6, para. 3

Complied with. The project was implemented as below: (a) Component A – NHAI implemented a

restructuring program to strengthen project management efficiency and adapted updated standards and codes of practice for planning, design, construction and maintenance of highways.

(b) Component B – Undertaken by each PIU under the N-S Corridor PMU: (i) PIU-Sagar, which was responsible for four civil works contracts; (ii) PIU-Narsinghpur, which was responsible for three civil works contracts; and (iii) PIU-Anantapur, which was responsible for six civil works contracts.

(c) Component C – Undertaken by NHAI, which engaged a consulting firm under L2029 to carry out the safety audit, design the road safety zone, and prepare specifications for road safety equipment.

(d) Component D – Undertaken by NHAI. An HIV/AIDS prevention and anti-trafficking cell within NHAI’s environment and a social development unit and the PIUs implemented the component.

4. Within 2 months of Effective Date and in any case prior to the award of civil works contracts under the Subproject concerned, whichever is earlier, NHAI shall ensure that the PIUs are adequately staffed with experienced personnel at both managerial and professional levels including staff with

Schedule 6, para.4

Complied with. The PIUs were established within 2 months of the loan effectiveness date or before the awarding of contracts, to expeditiously implement the pre-construction activities. Each of the PIUs was headed by a Project Director, who was assisted by several

26 Appendix 8

Covenant

Reference in Loan


accounting and financial management expertise, resettlement and environment experience, during the entire duration of Project implementation.

managers and other staff for technical, resettlement, environment, and accounting aspects of the project. The PIUs were adequately staffed with experienced personnel.

5. Each PIU shall also be responsible to address grievances if any filed by public, including any Project affected persons and NGOs. Additionally each PIU shall be assigned with an accountant/financial management specialist who shall be responsible for maintenance of Subproject accounts and records.

Schedule 6, para. 5

Complied with. PIUs were responsible for addressing grievances from the public including project-affected persons and NGOs. Accounting staff was deputed in the PIUs for maintaining subproject accounts and records.

6. Activities of the PIUs shall be overseen by Chairman, NHAI through the N-S Corridor PMU.

Schedule 6, para. 6

Complied with. Activities of the PIUs were overseen by the Chairman, NHAI through the N-S Corridor PMU, which had been established before the project began.

Institutional Strengthening 7. NHAI shall delegate sufficient administrative

autonomy to the N-S Corridor PMU, the Technical Audit Team and the PIUs for effective decision-making on Project implementation matters.

Schedule 6, para. 7

Complied with. NHAI delegated sufficient administrative autonomy to the PMU and the PIUs for effective decision-making on project implementation.

8. NHAI shall undertake institutional strengthening consistent with the objectives set forth in Appendix 4 of the RRP.

Schedule 6, para. 8

Complied with. Under government’s own initiative, NHAI implemented a restructuring program, approved by the cabinet in July 2007, to strengthen its institutional capacity and project management efficiency.

9. (a) Within 3 months of Effective Date, the Borrower shall cause the Steering Committee to be established by the Borrower’s Department of Road Transport and Highways, to support the process of updating highway standards and codes of practice under Component A, to be published by June 2008.

(b)The highway standards and codes of practice as referred in clause (a) of this paragraph, shall be adopted by NHAI.

Schedule 6, para. 9

Complied with. NHAI through its own initiative and institutional mechanism, adopted updated standards and code of practice for planning, design, construction and maintenance of highways.

Executing of Civil Works 10. The Borrower shall ensure that NHAI shall

subject to the provisions of paragraphs 19 and 24 of the Schedule, (i) make available on a timely basis to the contractor (i.e. strictly in accordance with the schedule as shall be agreed under the related civil works contract), the land and rights in land, free from any encumbrances; and (ii) clear the utilities, trees and any other obstruction from such land, on a timely basis (i.e. strictly in

Schedule 6, para. 10

Complied with. PIUs were established before contracts were awarded to expeditiously implement the pre-construction activities such as the shifting of utilities, cutting of trees, land acquisition and resettlement of affected persons. The site was handed over to the contractors in a phased manner after clearance of encumbrances.

Appendix 8 27

Covenant

Reference in Loan


accordance with the schedule as shall be agreed under the related civil works contract), both as required for construction activities relating to each Section of the related civil works contract under a Subproject.

11. NHAI shall ensure that subsequent to award of civil works contract under any Subproject, no Section or part thereof under the civil works contract shall by handed over to the contractor unless the provisions of paragraphs 10, 19 and 24 of this Schedule have been complied with.


Complied with. Road sections under civil works contracts were handed over to the contractors after paragraphs 10, 19 and 24 of Schedule 6 of the Loan Agreement (refer serial number 10, 19 and 24 of this Table) had been complied with.

Road Safety 12. NHAI shall monitor and annually report to

ADB, incidence of traffic accidents on Project highways, in a format agreeable to ADB, during Project implementation, and two years after Project completion.


Complied with. NHAI monitored the incidence of traffic accidents on the project highways during and after implementation.

13. NHAI shall carry out road safety audit for the Subproject highways during design, construction and operations stages of implementation.


Complied with. The road safety consultants engaged under Loan 2029-IND: National Highways Corridor Sector (I) Project carried out a road safety audit after a considerable delay.

Operation and Maintenance 14. NHAI shall ensure that upon completion of

each Subproject, the O&M contract for the Subproject highway is awarded to the private sector under arrangements that ensure its sustainability. NHAI shall keep ADB informed of the terms and conditions of such arrangements.


Complied with. The operation and maintenance of the project highways have been awarded to two private operators through OMT contracts that were based on model concession agreement developed by Government of India through wide stakeholders’ consultation. The private operators are responsible for collecting tolls and maintaining the highways.

15. The Borrower shall ensure that NHAI starts tolling each Subproject highway as soon as its construction is completed; and shall assist NHAI in obtaining necessary statutory approvals and public notification of such tolling.


Complied with. After completion, the project highway is being tolled in accordance with National Highway Fee (Determination of Rates and Collection) Rules 2008 and related amendments.

Toll 16. (a) By December 2005, NHAI shall review

the report on tolling system study prepared under ADB Loan 1747: Surat-Manor Tollway Project and provide its proposal for adoption of the same, to ADB. (b) The Borrower and NHAI shall ensure that not later than 30 June 2005, NHAI shall be able to retain tolls collected, as its own revenue.


Complied with. (a) The highway toll system is being

implemented based on the toll system study and the reviews of the toll policy conducted by the government from time to time.

(b) Tolls are being collected and retained by NHAI directly or indirectly under the concession agreements with the private highway operators.

Environment

28 Appendix 8

Covenant

Reference in Loan


17. NHAI shall implement the Project in accordance with ADB’s Environment Policy, 2002; prepare and implement for each Subproject, the IEE including an EMP with budget, and ensure adequate funds for its timely implementation.


Complied with. The project was prepared and implemented in accordance with ADB’s Environment Policy, 2002. The IEE included an EMP with budget and adequate funds were allocated for EMP implementation.

18. For each Subproject, NHAI shall (a) Ensure that all environment mitigation measures identified in the IEE and EMP are incorporated into the designs (including detailed designs) and are implemented during construction, operation, and maintenance of the Subproject highway; and (b) Monitor, audit and report semi-annually, the implementation of the IEE and EMP to ADB.


Complied with. Subprojects were designed, constructed, and monitored according to environmental mitigation measures identified in the IEE and the EMP, agreed upon with ADB in accordance with ADB’s Environmental Assessment Guidelines (2003, as amended from time to time).

19. NHAI shall ensure that for any Subproject involving acquisition of land for a Section or part thereof under a civil works contract, that passes through forest land and/ needs diversification from use of forest land, relevant statutory clearance under the Borrower’s Forest Conservation Act, 1980, related pollution control, and environmental clearances under India Environmental Impact Assessment Notification, 1994, shall be obtained prior to commencement of civil works for that Section of the civil works contract under the Subproject.


Complied with. For highway sections or part thereof, that pass through forest land and /or needed diversifications from use of forestland, the relevant statutory forest and environmental clearances were obtained from related government agencies according to government policies and regulations prior to commencement of civil works for that section.

20. NHAI shall continue with training programs for environmental management for its staff and staff of civil works contractors engaged under the Subprojects.


Complied with. The construction supervision consultants organized regular workshops for the contractor and PIU staff on environmental management.

Land Acquisition, Resettlement and Indigenous Peoples

21. NHAI shall implement the Project in accordance with ADB’s Involuntary Resettlement Policy, 1995, ADB’s Indigenous People Policy, 1998; prepare and implement for each Subproject, the RPs, and implement the IPDF as required, in accordance with the principles and procedures laid out in the RF and the IPDF respectively.


Complied with. The project was implemented in accordance with ADB’s Involuntary Resettlement Policy, 1995; ADB’s Indigenous People Policy, 1998; and national acts on land acquisition and resettlement.

22. The RPs, and IPDPs/Specific Actions as required under the IPDF, shall be submitted to ADB for approval prior to award of the related civil works contracts. Any changes to an agreed RP or IPDP/Specific Actions on account of detailed design for a Subproject, (including with regard to land to be acquired


Complied with. The RPs were submitted to ADB for approval before related civil works contracts were awarded.

Appendix 8 29

Covenant

Reference in Loan


for relocation of affected persons), shall require ADB’s approval, prior to award of any civil works contracts under such Subproject.

23. (a) For each Subproject, NHAI shall prepare and implement the RP, in consultation with the State and district authorities concerned and with persons affected by the Subproject; disclose and make all relevant information available on the RPs to all affected persons prior to land acquisition and resettlement and confirm that these are posted on ADB’s Involuntary Resettlement Website in a timely manner. (b) NHAI shall ensure that all affected persons under the RPs as a consequence of the Project, are fairly compensated on replacement values such that their living standards are not adversely affected by the Project. (c) To avoid influx of informal dwellers and fraudulent claims during implementation, NHAI shall within 2 months of approval of each Subproject, commence issuing photo identity cards to all eligible (including non-titled) affected persons under the Subproject. To facilitate timely and effective implementation and monitoring of RP under each Subproject, NHAI shall hire NGOs and depute resettlement-monitoring officers in the PIUs.


Complied with. (a) The RP was prepared in consultation

with the relevant state and district authorities. Micro-plans were prepared in accordance with the entitlement matrix, which were approved by NHAI. All relevant information was made available to all affected persons.

(b) Measures to mitigate resettlement impacts included compensation at full replacement cost for all lost assets to the affected persons. Affected persons received resettlement and rehabilitation assistance such as allowances for shifting of affected assets, transitional allowances for loss of workdays and/or income loss because of dislocation, and economic rehabilitation grants for livelihood restoration. None of the affected persons were made more disadvantaged due to involuntary resettlement.

(c) Entitlement-cum-identity cards were provided to each affected person indicating the type of loss and entitlement. NHAI engaged six NGOs to assist in the implementation plan.

24. Under each Subproject, as applicable, NHAI shall carry out settlement of issues relating to land acquisition and resettlement compensation payments including: (i) payment of full compensation/replacement value for land/structure (residential/commercial) to legal titleholders, (ii) payment of full replacement value of structure (residential/commercial) to affected informal settler/roadside squatters, (iii) payment of full compensation for acquired land to titled owners, and (iv) payments of all other additional benefits and provision of assistance in accordance with RP provisions, including income restoration grants and skill training during the implementation of the Subproject.


Complied with. Payments were made to the affected persons as per the respective resettlement plans prior to the commencement of civil works on that section. A participatory approach was adopted to develop resettlement sites, allocate residential plots, and design the training and skills development program.

25. By not later than 3 months of Effective Date, NHAI shall appoint an independent monitoring agency responsible for providing to ADB through NHAI, six monthly monitoring and evaluation reports on implementation of RPs. NHAI shall report on progress and


Complied with. Monitoring mechanisms were put in place to monitor the implementation of RPs. Grievance redress committees were established in all related districts to deal with disputes.

30 Appendix 8

Covenant

Reference in Loan


completion of land acquisition and resettlement to ADB for each Subproject.

26. NHAI shall appoint resettlement officers in the PIUs, and hire NGOs from its resources to address resettlement issues. NHAI shall ensure that a local resettlement specialist and the ESDU officials undertake resettlement-training programs for NGOs and resettlement officers of NHAI.


Complied with. Resettlement officers were appointed in the PIUs. NHAI engaged NGOs to assist in the implementation of the plans.

27. NHAI shall also ensure that essential public infrastructure that may be affected under land acquisition and resettlement is replaced as appropriate in an expeditious manner.


Complied with. Essential public infrastructure were replaced as needed in an expeditious manner.

Social Measures 28. NHAI shall ensure public awareness and

acceptance of the Project and Subprojects through participation of NGOs and local community.


Complied with. Public awareness and acceptance of the project was ensured through participation of the NGOs and local community.

29. Within 3 months of Effective Date, NHAI shall ensure that a Manager each in the PIUs shall be made responsible to address environmental, resettlement, and other social issues in a timely manner. NHAI shall also ensure that Grievance Redress Committees in accordance with the RPs/RF are formed in each district for resolution of disputes concerning land acquisition and resettlement, environment and other social issues in a timely manner.


Complied with. A manager at each PIU was made responsible to address environmental, resettlement, and other social issues in a timely manner. Grievance redress committees were established in all related districts for the resolution of disputes.

30. Within 6 months of Effective Date, NHAI through its HIV/AIDS and anti-trafficking cell within the ESDU, assisted by consultants, shall develop and implement a program for preventing HIV/AIDS and promoting anti-trafficking along the Project highways. The PIUs shall additionally, assisted by the NGOs, assist in implementation of Component D in close coordination with the Borrower’s National AIDS Control Organization, the relevant state AIDS Control Societies, Department of Women and Child Department and other government agencies responsible for women and children empowerment.


Complied with. An HIV/AIDS prevention and anti-trafficking cell within NHAI’s environment and social development unit and the PIUs—assisted by the NGOs, consultants, and contractors— conducted intensive HIV/AIDs awareness and anti-trafficking campaigns at project sites.

31. NHAI shall ensure that civil works contracts under the Subprojects incorporate provisions to the effect that contractors shall (i) carry out HIV/AIDS awareness and prevention programs for labor, (ii) not employ or use children as labor, (iii) disseminate information at worksites or risks of sexually transmitted diseases and HIV/AIDS as part


Complied with. The civil works contracts incorporated all the requisite provisions. All contractors conducted the HIV/AIDS awareness and prevention programs for the labor. Compliance with these contractual provisions was ensured.

Appendix 8 31

Covenant

Reference in Loan


of health and safety measures for those employed during construction, and (iv) follow and implement all statutory provisions on labor (including equal pay for equal work), health, safety, sanitation, and working conditions. The civil works contracts shall provide for termination of the contract by NHAI in case of breach of any of the stated provisions by the contractors.

32. NHAI shall ensure that the locally-based NGOs to be recruited to assist in implementation of relevant Components as referred in the Schedule, are acceptable to ADB.


Complied with. NHAI engaged six NGOs to assist in the implementation resettlement plans and conduct intensive HIV/AIDS awareness and anti-trafficking campaign at project sites.

Subproject requirements and approval procedures

33. NHAI shall ensure timely processing of Subprojects and follow the requirements and procedures set out below. The N-S Corridor PMU assisted by the Technical Audit Team shall be responsible to process Subprojects for approval.


Complied with. NHAI ensured timely processing of subprojects. These were approved for Group I (C3–C9) in December 2005 and for Group II (C10–C15) in January 2006.

34. Each Subproject shall be subject to ADB approval and comply with following criteria. (a) The Subproject shall be part of NH Development Program of the Borrower, with priority given to N-S Corridor, except as otherwise acceptable to ADB. (b) The Subproject shall be technically feasible, and a feasibility study and preliminary design for the Subproject shall have been prepared. NHAI shall ensure that the detailed Subproject report shall be prepared within not more than 5 months of Subproject approval. Road safety audit shall have been conducted during design period. (c) The Subproject shall be economically feasible, and its estimated EIRR shall be equal to or higher than twelve percent (12%). (d) An environmental screening for the Subproject shall have been conducted. The Subproject (i) shall not have been categorized as category A, in accordance with ADB’s Environment Policy, 2002, or (ii) shall not have any section that passes through or is located within less than 1 km distance from areas designated as “protected” by the Borrower including sanctuaries and national parks. (e) An IEE including an EMP with budget, for the Subproject shall have been prepared. (f) The Subproject shall be socially sound and shall include measures to mitigate social


Complied with. All the subprojects complied with the criteria set forth in the Loan Agreement and were approved by ADB.

32 Appendix 8

Covenant

Reference in Loan


impacts it may cause, if any. The IPSA for the Subproject shall have been conducted. (g) A RP for the subproject shall have been prepared in accordance with the RF. (h) If any indigenous peoples/Scheduled Tribes are likely to be significantly affected by a Subproject, the IPDP/Specific Actions in accordance with IPDF shall have been prepared. (i) Sufficient counterpart funding shall be allocated by the Borrower as required, to implement the Subproject as scheduled. (j) All necessary central and State approvals shall have been obtained for the Subproject.

35. The approval procedures for Subproject shall be as follows. (a) Consultants engaged by NHAI shall conduct feasibility study for the selected Subproject. NHAI shall complete the Checklist Forms and provide these to ADB for necessary review and revisions as may be required by ADB. (b) Upon completion of preliminary design, RP, IEE, and IPDP/Specific Actions as required, NHAI shall appraise the Subproject in accordance with applicable ADB policies and procedures, and shall prepare a summary appraisal report for each Subproject, together with required attachments, the RP, IEE, IPDP/Specific Actions as required, and summary poverty reduction and social strategies. (c) NHAI shall provide the summary appraisal report for each Subproject to ADB for its review, along with all supportive documents stated in the preceding clause. (d) NHAI shall translate into local language and disclose the RP for each Subproject to affected persons before submitting the same to ADB and will incorporate any revisions as required based on comments from the affected persons and ADB. (e) NHAI shall disclose the summary IEE to the public prior to submitting the summary appraisal report of the related Subproject to ADB.


Complied with. The subprojects were prepared, appraised, and approved in accordance with the procedures set forth in the Loan Agreement.

36. (a) Upon receiving the Subproject summary appraisal report and attachments from NHAI as prepared under the above paragraph, ADB may approve the Subproject subject to any further modifications or remedial measures that it may require for compliance with applicable ADB policies.


Complied with. The subprojects were reviewed and approved according to the provisions in the Loan Agreement.

Appendix 8 33

Covenant

Reference in Loan


(b) Based on ADB’s approval and subject to addressing modifications and remedial measures if any, as required by ADB to its satisfaction, NHAI shall proceed with implementation of the approved Subproject.

37. NHAI shall also ensure that all relevant documents forming basis for screening, selection, and processing of the Subproject are made available to ADB as requested and are kept available for such purposes for at least a period of five years from Subproject approval or when the Project Completion Report for the Project has been prepared, whichever is earlier.


Complied with. All project documents were made available to ADB, as required.

Project Performance Monitoring and Evaluation

38. Within 3 months of Effective Date, NHAI shall establish a Project Performance Management System in such forms and detail as required by ADB and with assistance of the Project construction supervision consultants, monitor and evaluate the Project’s benefits, progress, annually during Project implementation and within 3 months after Project completion.


Complied with. Baseline data and intermediate baseline data, as feasible, were collected during implementation. Project benefits and performance were evaluated at completion according to the project framework.

Progress Reports and Review 39. (a) Without limiting the generally of Section

2.08 of the Project Agreement, NHAI shall submit to ADB, quarterly progress reports of the Subprojects and the Project, in such forms and details as required by ADB. (b) The Borrower and NHAI shall undertake periodic review of the Project to assess and evaluate the scope, implementation arrangements (with due participation of NGOs and community), benefit monitoring, progress and achievement of the Project.


Complied with. (a) NHAI submitted the progress reports to

ADB on time. (b) ADB and NHAI undertook periodic

reviews to assess, evaluate, and review the project’s scope, cost, implementation arrangements, progress, and achievements.

40. In addition to regular reviews, there shall be a mid-term review of the Project by ADB, the Borrower and NHAI around September 2006, that shall (i) review the scope, design and implementation arrangement, (ii) identify problems, constraints and an changes needed, (iii) assess implementation, performance against Project performance indicators, (iv) review resettlement, environment, indigenous peoples and other social issues, (v) review compliance with legal covenants, and (vi) if necessary, agree on any changes needed to achieve the Project objectives.


Complied with. During implementation, ADB conducted 13 review missions, including the inception mission in 2006, three special loan administration missions, and a completion review mission in 2016. These missions comprehensively reviewed all aspects of the project.

41. (a) The Borrower shall cause NHAI to carry Article IV, Complied with.

34 Appendix 8

Covenant

Reference in Loan


out the Project with due diligence and efficiency and in conformity with sound administrative, financial, engineering, environmental and highway development practices. (b) In the carrying out of the Project and operation of the Project facilities, the Borrower shall perform, or cause to be performed, all obligations set forth in Schedule 6 to this Loan Agreement.

Section 4.01

42. The Borrower shall make available to NHAI, promptly as needed, the funds, land and other required resources, in addition to the proceeds of the Loans for the carrying out of the Project.

Article IV, Section 4.02

Complied with.

43. The Borrower shall ensure that the activities of the departments and agencies with respect to carrying out of the Project and operation of the Project facilities are conducted and coordinated in accordance with sound administrative policies and procedures.


Complied with.

44. The Borrower shall take all action that shall be necessary on its part to enable NHAI to perform its obligations under the Project Agreement, and shall not take or permit any action which would interfere with the performance of such obligations.


Complied with.

45. (a) NHAI shall carry out the Project with due diligence and efficiency, and in conformity with sound administrative, financial, engineering, environmental and highway development practices. (b) In the carrying out of the Project and operation of the Project facilities, NHAI shall perform all obligations set forth in the Loan Agreement to the extent that they are applicable to NHAI.

PA, Article II, Section 2.01

Complied with.

46. NHAI shall make available, promptly as needed, the funds, facilities, services, equipment, land and other resources, which are required, in addition to the proceeds of the Loan, for the carrying out of the Project.


Complied with.

47. (a) In the carrying out of the Project, NHAI shall employ competent and qualified consultants and contractors, acceptable to ADB, to an extent and upon terms and conditions satisfactory to ADB. (b) Except as ADB may otherwise agree, all goods and services to be financed out of the proceeds of the Loan shall be procured in accordance with the provisions of Schedule


Complied with.

Appendix 8 35

Covenant

Reference in Loan


4 and Schedule 5 to the Loan Agreement. ADB may refuse to finance a contract where goods or services have not been procured under procedures substantially in accordance with those agreed between the Borrower and ADB or where the terms and conditions of the contract are not satisfactory to ADB.

48. NHAI shall carry out the Project in accordance with plans, design standards, specifications, work schedules and construction methods acceptable to ADB. NHAI shall furnish, or cause to be furnished, to ADB, promptly after their preparation, such plans, design standards, specifications and work schedules, and any material modifications subsequently made therein, in such detail as ADB shall reasonably request.


Complied with.

49. (a) NHAI shall maintain, or cause to be maintained, records and accounts adequate to identify the goods and services financed out of the proceeds of the Loan, to disclose the use thereof in the Project and Subprojects, to record the progress of the Project and Subprojects (including the cost thereof) and to reflect, in accordance with consistently maintained sound accounting principles, its operations and financial condition.


Complied with.

50. (a) ADB and NHAI shall cooperate fully to ensure that the purposes of the Loan will be accomplished. (b) NHAI shall promptly inform ADB of any condition which interferes with, or threatens to interfere with, the progress of the Project, the performance of its obligations under the Project Agreement, or the accomplishment of the purposes of the Loan. (c) ADB and NHAI shall from time to time, at the request of either party, exchange views through their representatives with regard to any matters relating to the Project, the Subprojects, NHAI and the Loan.


Complied with.

51. (a) NHAI shall furnish to ADB all such reports and information as ADB shall reasonably request concerning (i) the Loan and the expenditure of the proceeds thereof; (ii) the goods and services financed out of such proceeds; (iii) the Project and the Subprojects; (iv) the administration, operations and financial condition of NHAI; and (v) any other matters relating to the purposes of the Loan.


Complied with.

36 Appendix 8

Covenant

Reference in Loan


(b) Without limiting the generality of the foregoing, NHAI shall furnish to ADB quarterly reports within 45 days of the close of each quarter on the execution of the Project and the Subprojects, and on the operation and management of the Project facilities. Such reports shall be submitted in such form and in such detail as ADB shall reasonably request, and shall indicate, among other things, progress made and problems encountered during the quarter under review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and expected progress during the following quarter. (c) Promptly after physical completion of the Project, but in any event not later than three (3) months thereafter or such later date as ADB may agree for this purpose, NHAI shall prepare and furnish to ADB a report, in such form and in such detail as ADB shall reasonably request, on the execution and initial operation of the Project and the Subprojects, including the costs, performance by NHAI of its obligations under this Project Agreement and the accomplishment of the purposes of the Loan.

52. (a) NHAI shall (i) maintain separate accounts for the Project and Subprojects and for its overall operations; (ii) have such accounts and related financial statements (balance sheet, statement of income and expenses, and related statements) audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB; and (iii) furnish to ADB, promptly after their preparation but in any event (1) not later than six (6) months after the close of the fiscal year to which they relate, unaudited copies of the Project and Subprojects accounts and (2) not later than nine (9) months after the close of the fiscal year to which they relate, certified copies of such audited financial statements and the report of the auditors relating thereto (including the auditors’ opinion on the Project and Subprojects accounts, use of the Loan proceeds and compliance with the financial covenants of the Loan Agreement as well as on the use of the procedures for imprest account and statement of expenditures), all


Complied with. The project accounts and related financial statements from FY 2007 to FY 2012 were audited by government auditors. The audited reports were submitted to ADB on a regular basis with minor delays (less than two months’ delay from the stipulated period of nine months after the close of the fiscal year to which they related) except the audited financial statements for FY 2010 which were submitted 10 months late. The audited project accounts and related financial statements were found acceptable by ADB.

Appendix 8 37

Covenant

Reference in Loan


in the English language. NHAI shall furnish to ADB such further information concerning such accounts and financial statements and the audit thereof as ADB shall from time to time reasonably request. (b) NHAI shall enable ADB, upon ADB’s request, to discuss NHAI’s financial statements and its financial affairs from time to time with NHAI’s auditors, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB, provided that any such discussion shall be conducted only in the presence of an authorized office of NHAI unless NHAI shall otherwise agree.

ADB = Asian Development Bank, , CMU = corridor management unit, EMP = environment management plan, ESDU = environment and social development unit, HIV/AIDS = human immunodeficiency virus/acquired immunodeficiency syndrome, IEE = initial environment examination, IPDF = indigenous peoples development framework, IPDP = indigenous peoples development plan, IPSA = initial poverty and social analysis, NGO = nongovernment organization, N-S = north–south, NHAI = National Highway Authority of India, PA = project agreement, O&M = operations and maintenance, OMT = operate–maintain–transfer, PIU = project implementation unit, PMU = project management unit, RF= resettlement framework, RP = resettlement plan. Source: ADB project completion review mission.

SUMMARY OF CONTRACT PACKAGES FINANCED BY ADB

Contract No.

Contractor/ Consultant Description/Nature of

Works Procurement

Method Contract

Date

Contract Amount Actual Cost

Currency Amount Total Amount

(Rs./$)

ADB Financing

($)

Civil Works

C3 Nagarjuna Construction Co. Ltd.

NH-26: km 94-132 ICB 16/05/2006 Rs. 1,403,900,000 2,049,300,000 22,186,771

C4 IJM Corporation Co. NH-26: km 132-187 ICB 19/04/2006 Rs. 1,714,600,000 2,760,700,000 30,999,169

C5 Ssangyong Engineering & Construction

NH-26: km 187-211 ICB 12/04/2006 Rs. 1,160,700,000 2,017,800,000 23,029,220


NH-26: km 211-255 ICB 12/04/2006 Rs. 1,638,700,000 2,575,000,000 26,823,157

C7 B. Seenaiah & Co. Projects Ltd.

NH-26: km 255-297 ICB 12/04/2006 Rs. 1,896,300,000 2,694,500,000 41,360,749


NH-26: km 297-351 ICB 12/04/2006 Rs. 2,190,100,000 3,296,187,000 31,025,937


NH-26: km 351-405.7 ICB 12/04/2006 Rs. 2,035,000,000 2,625,672,000 28,693,154

C10 CGGC-SOMA (JV) NH-7: km 211-251 ICB 16/01/2007 Rs. 1,673,912,693 1,808,083,000 20,767,816

C11 CGGC-SOMA (JV) NH-7: km 251-293.4 ICB 16/01/2007 Rs. 1,748,102,331 1,749,506,000 23,624,275

C12 Continental Engineering Corporation

NH-7: km 293.4-336 ICB 20/02/2007 Rs. 2,134,569,713 1,959,919,000 27,687,035

C13 Continental Engineering Corporation

NH-7: km 336-376 ICB 20/02/2007 Rs. 2,312,720,726 2,681,030,000 33,515,905

C14 CGGC-SOMA (JV) NH-7: km 376-418 ICB 16/01/2007 Rs. 1,839,835,143 1,991,464,000 27,480,587

C15 CGGC-SOMA (JV) NH-7: km 418-463.6 ICB 16/01/2007 Rs. 2,182,904,280 2,354,844,000 32,542,435

Total 23,931,344,886 30,564,005,000 369,736,210

38 A

ppe

ndix

9

SUMMARY OF CONTRACT PACKAGES FINANCED BY ADB

Contract No.

Contractor/ Consultant

Description/Nature of Works

Procurement Method

Contract Date

Contract Amount Actual Cost

Currency Amount Total Amount

(Rs./$)

ADB Financing

($)


CS-1 M/s Roughton International, United Kingdom in JV with Consulting Engineers Group Ltd, India

for C3, C4, C5, and C6

QCBS 05/10/2006 Rs. $

226,896,840

1,551,672

286,526,032

1,723,194

5,984,762

CS-2 Renardet SA Consulting Engineers, Switzerland in JV with Intercontinental Consultants and Technocrats Pvt. Ltd, India in association with Feedback Turnkey Engineers Pvt. Ltd, India

for C7, C8, and C9 QCBS 05/10/2006 Rs. $

177,881,784

2,090,200

217,165,298

2,270,542

5,239,274

CS-3 Consulting Engineering Services (India) Pvt. Ltd. in association with ESS Group Inc.

for C10, C11, and C12

QCBS 03/04/2007 Rs. $

162,953,350

679,800

184,976,530 3,630,126

CS-4 Egis Route Scetauroute France Nag Infrastructure Consulting Engineers JV

for C13, C14 and C15 QCBS 15/03/2007 Rs. $ Euro

98,671,253

832,800

1,411,932

116,906,740

1,141,817

3,754,993

Total 18,609,156

ADB = Asian Development Bank, JV = joint venture, ICB = international competitive bidding, NH = national highway, QCBS = quality- and cost-based selection. Source: ADB loan financial information system; project completion review mission.

Ap

pe

ndix

9 3

9

40 Appendix 10

INITIAL OPERATION OF THE PROJECT HIGHWAY

A. Operation and Maintenance 1. As envisaged at appraisal, the operation and maintenance (O&M) of the project highways was awarded to the private sector. The project highway sections are operated by two private firms (concessionaire), based on nine-year operation–maintenance–transfer (OMT) contracts. The first concessionaire is responsible for the northern section of 314.43 km along NH26 (Lalitpur–Lakhnadon), which started toll collection on 1 October 2013. The second concessionaire is responsible for the southern section of 252.60 km along NH7 (Kurnool–Andhra Pradesh/Karnataka border), which started toll collection on 13 May 2013.1 2. There are seven toll plazas along the project highway: four on the northern section and three on the southern section. Each toll plaza has six to eight toll collection booths and a dedicated lane for oversized vehicles and toll-exempted vehicles. The toll plazas operate 24 hours a day and have 65–100 staff each. The concessionaires have vehicles and facilities for emergency rescue, first aid, regular patrolling, and routine maintenance. All toll plazas have weighing equipment to control overloaded trucks. Computerized, semiautomatic toll systems collect vehicle and toll information at each toll booth and these are compiled at the toll plaza office. Highway maintenance including periodic maintenance is the responsibility of the concessionaires.

Table 10.1: Toll Plazas and Concessionaires

Northern Section (NH26, Lalitpur–Lakhnadon)

Concessionaire DPJ-DRA Tollways PVT Ltd.

Contract Period 9 years

Start toll collection 1 October 2013

Toll Plaza Name From–To (km) Length (km) No. Staff

Malthone 99+005－179+226 80.22 65

Chitora 179+226－258+065 78.84 65

Titerpani 258+065－328+814 70.75 65

Bakori 328+814－415+089 86.28 65

Southern Section (NH7, Kurnool–Andhra Pradesh/Karnataka border)

Concessionaire M/S. MEP Hyderabad-Bangalore Toll Roads PVT Ltd.

Contract Period 9 years

Start toll collection 13 May 2013

Toll Plaza Name From–To (km) Length (km) No. Staff

Amakatadu 211+000－295+000 84.00 100

Kasepalli 295+000－374+000 79.00 100

Marur 374+000－462+169 88.17 100 Source: Private concessionaires operating the project highway.

3. The project implementation units (PIUs) of the National Highways Authority of India (NHAI) are in charge of contracting and supervising the highway O&M. The northern section is

1 Before these concessionaires, NHAI and short-term private operators collected tolls.

Appendix 10 41

managed by the PIU-Narshingpur and the southern section is managed by the PIU-Anantapur. The PIUs have engaged independent engineers (consulting firms) to supervise the highway O&M. The independent engineers, as well as the PIU staff, visit the project highway regularly to inspect the performance of the operation and the highway condition using parameters such as surface roughness, lane availability, road furniture, and safety facilities. The independent engineers issue directions to the concessionaires for repair and rectification of any defects and deficiencies in the project highway, according to the concession agreement.2

B. Toll Scheme and Revenue 4. NHAI sets tolls according to national rules.3 The toll scheme includes (i) an average rate of Rs1.12 per km for cars, jeeps, or vans (2015 rates); (ii) different tolls for different vehicle types; (iii) a different toll tariff at each toll plaza according to the highway length under its jurisdiction; (iv) annual adjustment of tolls according to inflation; (v) discounts for round trips, local vehicles, and monthly users; (vi) exemptions for local motorcycles and three-wheelers; and (vii) exemptions for government vehicles, ambulances, and military vehicles. The toll for the return leg of a round-trip journey is about 50% of that for the single journey. Monthly tickets are provided only to local vehicles within the district.4

Table 10.2: Toll Scheme at All Toll Plazas 2015

Plaza 1 2 3 4 5 6 7

Plaza Name Malthone Chitora Titerpani Bakori Amakatadu Kasepalli Marur

Length (km) 80.22 78.84 70.75 86.28 84.00 79.00 88.17

Toll Rates (Rs per vehicle per single trip)

Car, Jeep, Van 85 100 80 100 90 85 95

LCV/LGV/Mini Bus 135 160 125 160 150 140 155

Bus/Truck 285 335 265 330 310 290 320

Three-axle commercial vehicle

315 365 285 360 340 315 350

Large Truck/HCM/EME

450 525 410 520 490 455 505

Oversized Vehicle 550 640 500 630 595 555 615

EME = earth-moving equipment, HCM = heavy construction machinery, km = kilometer, LCV = light commercial vehicle, LGV = light goods vehicle. Source: Private concessionaires operating the project highway.

C. Traffic Development 5. The ADB Project Completion Review (PCR) Mission collected actual traffic data from the O&M concessionaires. Each toll plaza records the number of vehicles tolled, although this number does not include non-toll vehicles, round trip vehicles, toll-exempted vehicles (government, ambulance, and military vehicles) and vehicles with monthly passes. Traffic data was consolidated and processed5 by the ADB PCR mission and listed in the following table.

2 Time limits for repairs or rectification of defects and deficiencies of the project highway are clearly indicated in the

concession agreements. 3 Government of India. 1997. National Highways (Rate of Fee) Rules. GSR 570(E). Delhi.

4 Each toll plaza issues about 100–200 monthly passes.

5 Traffic was adjusted by adding roundtrip traffic, monthly pass traffic, and toll-exempted vehicles.

42 Appendix 10

Table 10.3: Actual Traffic on the Project Highways (Annual Average Daily Traffic, number of vehicles)

Year

Car/Jeep /Van

2/3 Wheeler

Bus LCV Truck Large Truck

Articulated Truck

Tractor Total

Northern Section

2013 553 368 43 184 174 680 356 15 2,373

2014 711 414 45 220 182 681 381 42 2,676

2015 865 486 47 211 186 738 553 51 3,138

Southern Section

2014 1,135 422 1,629 542 211 670 469 51 5,128

2015 1,312 416 1,448 559 201 638 447 50 5,071

LCV = light commercial vehicle Note: The traffic was adjusted according to the toll collected. Source: Private concessionaires operating the project highway.

6. Traffic levels are very different for the northern and southern sections. The northern section is mainly in Madhya Pradesh, and passes through agricultural areas. The southern section connects Hyderabad and Bangalore—major Indian cities—and the traffic levels are high. The traffic growth on the northern section was high and increased by 12.8% in 2014 and 17.3% in 2015. Traffic on the southern section did not grow in 2015 because traffic was diverted when the State of Andhra Pradesh was bifurcated. At appraisal, traffic growth rates for the northern section were estimated to be about 8.0% for 2004–2009, 8.5% for 2010–2014, and 8.0% for 2015 and beyond. Traffic growth used in the economic reevaluation was adjusted based on actual data, socioeconomic development status, and consultations with the concessionaires (see Appendix 11). D. Highway Safety and Accidents 7. The project highways have incorporated significant road safety features, including service roads, flyovers, grade separators, vehicle overpasses/underpasses, rest areas, truck lay-bys, bus lay-bys, bus shelters, and traffic signs (Appendix 2). The road safety consultants carried out a safety audit. The O&M concessionaires have vehicles and facilities for emergency rescue, regular patrols, and first aid. All toll plazas have weighing equipment at toll booths and roadside weighing stations to control overloaded trucks. 8. Statistics from 2014 and 2015 show an increase in road accidents. Road safety on the project highway is an important issue. The project highway is not fully access-controlled and serve mixed traffic, local traffic, and pedestrians. Vehicles exceed speed limits, slow-moving vehicles use inner lanes, and some vehicles drive in the wrong direction. Data from the concessionaires shows high road accident rates and significant numbers of fatalities on the project highways. Road safety needs to be enhanced through strict enforcement of traffic rules, road safety awareness campaigns, and provision of additional safety features such as median barriers, pedestrian overpasses or underpasses, additional service roads, and traffic lights and signs in populated areas.

9. The following table shows accident data on the project highways in 2014 and 2015.

Appendix 10 43

Table 10.4: Accident Record on the Project Highway

No. of Accidents Persons Affected

Section/year Total Fatal Non-fatal Persons

killed Persons injured

Northern Section

2014 336 31 305 46 378

2015 551 63 488 84 681

Southern Section

2014 240 61 179 75 475

2015 364 70 294 89 704

Overall Project

2014 576 92 484 121 853

2015 915 133 782 173 1385

Source: Private concessionaires operating the project highway.

44 Appendix 11

ECONOMIC REEVALUATION

A. General

1. The Asian Development Bank (ADB) project completion review (PCR) mission conducted an economic reevaluation of the project using similar methodology to that used at appraisal. The without-project scenario assumed no change to the highway sections. The with-project scenario assumed widening and upgradation of highway that allowed vehicles to drive faster with lower operating costs and reduced travel time. Economic benefits were calculated by comparing the with- and without-project scenarios. The project’s economic internal rate of return (EIRR) was calculated and subjected to a sensitivity test.

B. Economic Costs

2. The project cost comprises capital and operation and maintenance (O&M) costs. The capital costs were calculated using the project’s actual annual expenditures for both highway sections, including expenditures for civil works, land acquisition and resettlement, relocation of utilities, environment, consulting services, and project management. Civil works in rupees cost 27.7% more than estimated at appraisal because of prolonged project implementation delays and higher prices for labor and construction materials. The project highway is operated by two private concessionaires. Average O&M costs of the concessionaires in 2015 were used in the economic evaluation. It was assumed that these O&M costs would increase by 3% each year, considering an increase in traffic and deteriorating condition of the highway. The periodic maintenance cost for pavement overlay was considered every 5 years. The financial costs of the investment and O&M were converted into economic costs using the average conversion factor of 0.90 at appraisal. All economic costs were estimated in, or converted to, 2016 prices. C. Traffic Analysis and Forecast

3. The ADB PCR mission collected actual traffic data from the O&M concessionaires. In 2015, the average daily traffic was 3,138 vehicles on the northern section and 5,071 vehicles on the southern section. (see Appendix 10 for details). The PCR mission found that traffic levels were very different for the north and south sections. The northern section is mainly located in Madhya Pradesh, and passes through agricultural areas. The southern section connects the major cities of Hyderabad and Bangalore and traffic levels are high. The traffic on the northern section increased 12.8% in 2014 and 17.3% in 2015. The traffic on the southern section did not grow in 2015 because traffic was diverted when the State of Andhra Pradesh was bifurcated. At appraisal, traffic growth rate per year on the northern section was estimated at about 8.0% for 2004–2009, 8.5% for 2010–2014, and 8.0% for 2015 and beyond. These rates were adjusted in light of actual traffic data, socioeconomic development forecasts, and consultations with the concessionaires and used in the economic reevaluation. The following table shows adjusted traffic forecasts.

Appendix 11 45

Table A11.1: Traffic Growth Rates (% per year)

Section Car/Jeep /Van

2/3 Wheeler

Bus LCV Trucks Tractor Total

Northern Section

2016－2020 10% 12% 8% 10% 10% 8% 9.7%

2021－2025 10% 10% 7% 8% 8% 7% 8.3%

2025－2030 7% 7% 6% 6% 6% 6% 6.3%

Southern Section

2016－2020 8% 10% 6% 6% 6% 6% 5.9%

2021－2025 8% 8% 5% 5% 5% 5% 5.8%

2025－2030 5% 5% 4% 4% 4% 4% 4.3%

LCV = light commercial vehicle Source: ADB project completion review mission

D. Project Benefits

4. As estimated at appraisal, the main economic benefits were savings in vehicle operating costs (VOCs) and travel time. VOCs, which vary by road roughness, were adopted from a similar highway project in India.1 The VOC savings per vehicle-kilometer (km) in 2016 prices for the project highway were estimated at Rs3.1 for car, jeep, or van; Rs0.8 for two-wheelers; Rs12.6 for buses; Rs11.7 for light trucks; and Rs14.1 for heavy trucks. Passenger vehicle speeds were assumed to be 60–90 km per hour for the with-project scenario and 30–40 km per hour for the without-project scenario. Passengers’ travel time savings were recalculated by the type of vehicles. The passenger time–cost was derived from the gross domestic product per capita of Madhya Pradesh and Andhra Pradesh during 2014–15. Other factors in estimating time cost savings included average vehicle loads, percentage of work-related trips, time costs by different road users, travel speeds for different types of passenger vehicles, and potential increases in income. The revised traffic forecast at PCR was used in the economic re-evaluation, but 10% of induced traffic was excluded from the calculation of economic benefits. VOC savings initially accounted for an average of 75–91% of the total benefits in 2015, but the share of passenger time cost benefits increased sharply to 30–40% in 2030 because of expected increase in socioeconomic development and income.

E. Economic Reevaluation and Sensitivity Test

5. The economic internal rate of return (EIRR) for the whole project was recalculated at 15.5%, with an economic net present value of Rs37,029 million. The EIRRs for the northern and southern sections were 12.1% and 19.2%, respectively. The EIRR for the northern section is lower than the 14.9% estimated at appraisal because of higher capital costs and lower-than-predicted traffic.2 The EIRR for the southern section is much higher than that for the northern section due to high traffic volume. The recalculated EIRRs are all higher than the ADB recommended discount rate of 12%. The project is considered economically viable. The detailed EIRR calculations for the project are in Table A11.3 – A11.5. 6. The EIRR was subjected to a sensitivity analysis to test different scenarios of costs and

1 The road roughness of the project highway sections is about 2–4 m/km for the with-project scenario and 8–10 m/km

for the without-project scenario. 2 At appraisal, only the northern section was selected as a sample for the economic evaluation. Annual average daily

traffic was estimated at 4,707 vehicles for 2015 with a 8% annual increase.

46 Appendix 11

benefits. The project was economically viable for all tested scenarios. If a 20% O&M cost increase were to be combined with a 20% reduction in benefits, the EIRR would be 12.9% for the whole project. The sensitivity analysis also shows that the EIRR is more sensitive to changes in benefits. National Highways Authority of India and the private concessionaires should pay attention to the road condition to facilitate traffic development. The results of the sensitivity tests are in Table A11.2.

Table A11.2: Results of Sensitivity Tests

Tests EIRR (%)

ENPV@12% (Rs million) Case O&M Cost Benefits

Base Case 15.5% 37,029

Changes (+/-) 10%

15.4% 35,966

20%

15.3% 34,902

50%

14.5% 26,392

10% 16.6% 50,247

20% 17.6% 63,464

(10%) 14.3% 23,812

(20%) 13.1% 10,594

10% (10%) 14.2% 22,748

20% (20%) 12.9% 8,467

Switching Point 350%

12.0%

(28%) 12.0% ( ) = negative.

EIRR = economic internal rate of return, ENPV = economic net present value, O&M = operation and maintenance. Source: ADB project completion review mission.

Appendix 11 47

Table A11.3: Economic Reevaluation for the Northern Section (Rs million)

Costs Benefits Net Net Present Value

Year Capital Operation Maintenance Total VOC

Saving Time Cost

Total Benefit

2005 87

87

(87) (269)

2006 454

454

(454) (1,259)

2007 2,790

2,790

(2,790) (6,907)

2008 7,263

7,263

(7,263) (16,057)

2009 6,897

6,897

(6,897) (13,614)

2010 3,207

3,207

(3,207) (5,652)

2011 1,010 31 27 1,068 767 32 799 (270) (424)

2012 919 78 66 1,064 1,533 106 1,640 576 810

2013 798 112 95 1,004 2,045 177 2,222 1,218 1,528

2014 352 139 119 610 2,165 222 2,387 1,777 1,990

2015

155 132 287 2,556 260 2,816 2,529 2,529

2016

160 136 295 2,810 307 3,117 2,822 2,520

2017 1,654 164 132 1,950 3,090 363 3,453 1,502 1,198

2018

169 136 305 3,398 428 3,826 3,521 2,506

2019

174 140 314 3,736 505 4,242 3,927 2,496

2020

180 144 324 4,108 597 4,705 4,382 2,486

2021

185 148 333 4,446 703 5,150 4,816 2,440

2022 1,654 191 132 1,976 4,812 829 5,641 3,664 1,658

2023

196 136 332 5,208 977 6,185 5,853 2,364

2024

202 140 342 5,637 1,152 6,789 6,447 2,325

2025

208 144 352 6,101 1,359 7,461 7,108 2,289

2026

214 148 363 6,476 1,563 8,039 7,676 2,207

2027 1,654 221 132 2,007 6,873 1,798 8,672 6,665 1,711

2028

227 136 363 7,295 2,069 9,365 9,001 2,063

2029

234 140 374 7,743 2,381 10,124 9,750 1,995

2030

241 144 385 8,219 2,740 10,959 10,573 1,932

2031

249 148 397 8,724 3,153 11,877 11,480 1,873 2032 (11,889) 256 153 (11,480) 9,260 3,628 12,889 24,368 3,549

Net Present Value (NPV): 283

Internal Rate of Return (EIRR): 12.1%

Discount Rate: 12%

( ) = negative. EIRR = economic internal rate of return, NPV = net present value, VOC = vehicle operating cost. Source: ADB project completion review mission.

48 Appendix 11

Table A11.4: Economic Reevaluation for the Southern Section (Rs million)

Costs Benefits Net Net Present Value

Year Capital Operation Maintenance Total VOC

Saving Time Cost

Total Benefit

2005 60

60

(60) (188)

2006 339

339

(339) (940)

2007 2,278

2,278

(2,278) (5,641)

2008 6,311

6,311

(6,311) (13,952)

2009 6,744

6,744

(6,744) (13,312)

2010 2,606

2,606

(2,606) (4,592)

2011 478 23 21 523 1,892 403 2,294 1,771 2,787

2012 111 59 53 223 2,648 805 3,453 3,231 4,539

2013 23 84 76 183 3,405 1,150 4,555 4,372 5,485

2014 22 105 95 222 3,783 1,278 5,061 4,839 5,420

2015

116 106 222 3,578 1,203 4,782 4,559 4,559

2016

120 109 229 3,786 1,336 5,122 4,893 4,368

2017 1,329 123 106 1,558 4,006 1,484 5,489 3,931 3,134

2018

127 109 236 4,239 1,648 5,887 5,651 4,022

2019

131 112 243 4,488 1,830 6,318 6,075 3,861

2020

135 116 250 4,752 2,033 6,785 6,535 3,708

2021

139 119 258 5,006 2,244 7,249 6,991 3,542

2022 1,329 143 106 1,578 5,274 2,477 7,750 6,173 2,792

2023

147 109 256 5,556 2,734 8,291 8,034 3,245

2024

152 112 264 5,855 3,020 8,875 8,611 3,105

2025

156 116 272 6,170 3,336 9,506 9,234 2,973

2026

161 119 280 6,425 3,630 10,054 9,774 2,810

2027 1,329 166 106 1,600 6,690 3,949 10,640 9,039 2,320

2028

171 109 280 6,967 4,298 11,264 10,985 2,517

2029

176 112 288 7,255 4,677 11,932 11,644 2,383

2030

181 116 297 7,554 5,091 12,645 12,348 2,256

2031

186 119 306 7,867 5,541 13,408 13,102 2,137

2032 (9,487) 192 123 (9,172) 8,192 6,032 14,224 23,396 3,407

Net Present Value (NPV): 36,746


Discount Rate: 12%


Appendix 11 49

Table A11.5: Economic Reevaluation for the Whole Project (Rs million)

Costs Benefits Net Net Present

Value Year Capital Operation Maintenance Total VOC

Saving Time Cost

Total Benefit

2005 147

147

(147) (457)

2006 793

793

(793) (2,199)

2007 5,068

5,068

(5,068) (12,548)

2008 13,575

13,575

(13,575) (30,009)

2009 13,642

13,642

(13,642) (26,926)

2010 5,813

5,813

(5,813) (10,244)

2011 1,489 55 48 1,591 2,658 435 3,093 1,502 2,363

2012 1,030 137 120 1,286 4,182 912 5,093 3,807 5,349

2013 820 195 171 1,187 5,450 1,328 6,777 5,590 7,012

2014 375 244 214 833 5,948 1,500 7,448 6,616 7,409

2015

271 238 509 6,134 1,464 7,598 7,089 7,089

2016

279 245 524 6,596 1,643 8,239 7,715 6,888

2017 2,983 288 238 3,508 7,096 1,846 8,942 5,434 4,332

2018

296 245 541 7,637 2,076 9,713 9,172 6,528

2019

305 252 558 8,224 2,336 10,560 10,002 6,357

2020

314 260 574 8,860 2,630 11,491 10,916 6,194

2021

324 268 591 9,452 2,947 12,399 11,808 5,982

2022 2,983 333 238 3,554 10,086 3,305 13,391 9,837 4,450

2023

343 245 588 10,764 3,711 14,476 13,887 5,609

2024

354 252 606 11,492 4,172 15,664 15,058 5,430

2025

364 260 624 12,271 4,695 16,966 16,342 5,262

2026

375 268 643 12,901 5,193 18,094 17,451 5,017

2027 2,983 386 238 3,607 13,564 5,748 19,311 15,704 4,031

2028

398 245 643 14,262 6,367 20,629 19,986 4,580

2029

410 252 662 14,998 7,058 22,056 21,394 4,378

2030

422 260 682 15,774 7,830 23,604 22,921 4,188

2031

435 268 703 16,591 8,694 25,285 24,582 4,010

2032 (21,375) 448 276 (20,651) 17,452 9,660 27,113 47,764 6,957

Net Present Value (NPV): 37,029


Discount Rate: 12%


50 Appendix 12

FINANCIAL REEVALUATION

1. The project’s financial internal rate of return (FIRR) was recalculated based on actual capital costs, operation and maintenance (O&M) costs, and the private concessionaires’ actual revenues in 2015. The major assumptions used in the FIRR recalculation are as follows:

(i) The capital costs included all capital expenditures related to the civil works, land acquisition and resettlement activities, and consulting services, but excluded the financial charges of the loan. Highway maintenance expenditures for periodic maintenance were treated as capital costs.

(ii) Private concessionaires’ actual O&M costs in 2015 were used as the basic costs. The O&M costs were kept at constant prices, and a 3% increase per year was added to account for traffic increases and deterioration of road condition.

(iii) Actual toll revenue in 2015 was used as the basis.1 It was assumed that the toll revenue level would increase along with the increase in traffic each year during the evaluation period; the toll rates would be adjusted by adding 5% each year. The revenue calculation also considered round-trip and monthly-ticket vehicles.

2. Based on the above assumptions and estimations, the FIRR was recalculated at 5.2% for the whole project, 3.4% for the northern section, and 7.3% for the southern section. The FIRR for the northern section was higher than the 3.3% estimated at appraisal because of higher tolls.2 The FIRR for the southern section is higher than for the northern because of higher traffic volumes. The recalculated FIRRs are higher than the recalculated weighted average cost of capital (WACC) of 1.93%.3 The project is still financially viable. Table A12.2–A12.4 presents the cash flows of the FIRR recalculations. The FIRR was also subject to sensitivity tests. Combining a 20% increase in O&M costs and a 20% decrease in revenue, the FIRR was at 3.46%. The test results also indicate that the FIRR was very sensitive to revenue changes (Table A12.1). National Highways Authority of India and the concessionaires should improve their management of toll collection to ensure sufficient revenue.

Table A12.1: Sensitivity Tests Scenarios FIRR (%) Base Case 5.16 Sensitivity Tests

1 O&M cost 10% higher 5.02 2 O&M cost 20% higher 4.87 3 Revenue 10% higher 5.78 4 Revenue 20% higher 6.36 5 Revenue 10% lower 4.50 6 Revenue 20% lower 3.78 7 O&M cost 10% higher &revenue 10% lower 4.35 8 O&M cost 20% higher &revenue 20% lower 3.46

FIRR = financial internal rate of return, O&M = operation and maintenance. Source: ADB project completion review mission.

1 In 2005, the total revenues were Rs808.2 million for the northern section and Rs1,359.0 million for the southern

section. 2 The base toll rate for cars was Rs0.55 per vehicle-km at appraisal and Rs1.06 per vehicle-km in 2015.

3 The weighted average cost of capital was recalculated during the PCR mission using actual capital cost and financing sources.

Appendix 12 51

Table A12.2: Financial Reevaluation for the Northern Section (Rs million)

Year

Costs Toll Revenue

Cost-Revenue Stream Capital Operation Maintenance Total

2005 103

103.0

(103.0)

2006 540

539.8

(539.8)

2007 3,317

3,316.7

(3,316.7)

2008 8,635

8,635.4

(8,635.4)

2009 8,200

8,200.0

(8,200.0)

2010 3,813

3,812.9

(3,812.9)

2011 1,201 31.2 29.6 1,262.1

(1,262.1)

2012 1,093 78.1 73.9 1,244.6

(1,244.6)

2013 948 111.5 105.5 1,165.2 242.5 (922.8)

2014 419 139.4 131.9 690.1 484.9 (205.2)

2015

154.9 146.6 301.5 808.2 506.7

2016

159.5 151.0 310.5 927.0 616.5

2017 1,838 164.3 146.6 2,148.8 1,063.3 (1,085.5)

2018

169.3 151.0 320.3 1,219.6 899.3

2019

174.3 155.5 329.9 1,398.8 1,069.0

2020

179.6 160.2 339.8 1,604.5 1,264.7

2021

185.0 165.0 350.0 1,817.9 1,467.9

2022 1,838 190.5 146.6 2,174.9 2,059.6 (115.3)

2023

196.2 151.0 347.2 2,333.6 1,986.4

2024

202.1 155.5 357.6 2,643.9 2,286.3

2025

208.2 160.2 368.4 2,995.6 2,627.2

2026

214.4 165.0 379.4 3,334.1 2,954.7

2027 1,838 220.8 146.6 2,205.3 3,710.8 1,505.6

2028

227.5 151.0 378.5 4,130.2 3,751.7

2029

234.3 155.5 389.8 4,596.9 4,207.1

2030

241.3 160.2 401.5 5,116.3 4,714.8

2031

248.6 165.0 413.6 5,694.5 5,280.9

2032 (14,134.4) 256.0 169.9 (13,708.4) 6,337.9 20,046.4

FIRR 3.4%

( ) = negative. FIRR = financial internal rate of return.

Source: ADB project completion review mission.

52 Appendix 12

Table A12.3: Financial Reevaluation for the Southern Section (Rs million)

Year

Costs Toll Revenue


2005 65

64.7

(64.7)

2006 363

362.7

(362.7)

2007 2,438

2,437.7

(2,437.7)

2008 6,753

6,753.0

(6,753.0)

2009 7,216

7,216.4

(7,216.4)

2010 2,788

2,788.2

(2,788.2)

2011 511 23.4 23.7 558.7

(558.7)

2012 118 58.6 59.4 236.3 434.9 198.6

2013 25 83.6 84.8 193.0 815.4 622.4

2014 24 104.6 106.0 234.6 1,087.2 852.6

2015

116.2 117.8 233.9 1,359.0 1,125.0

2016

119.7 121.3 241.0 1,514.9 1,274.0

2017 1,476 123.2 117.8 1,717.4 1,688.7 (28.7)

2018

126.9 121.3 248.2 1,882.5 1,634.3

2019

130.8 124.9 255.7 2,098.6 1,842.9

2020

134.7 128.7 263.4 2,339.4 2,076.0

2021

138.7 132.5 271.3 2,590.8 2,319.6

2022 1,476 142.9 117.8 1,737.1 2,869.4 1,132.3

2023

147.2 121.3 268.5 3,177.8 2,909.4

2024

151.6 124.9 276.5 3,519.4 3,242.9

2025

156.1 128.7 284.8 3,897.8 3,613.0

2026

160.8 132.5 293.4 4,263.2 3,969.8

2027 1,476 165.6 117.8 1,759.8 4,662.9 2,903.0

2028

170.6 121.3 291.9 5,100.0 4,808.1

2029

175.7 124.9 300.7 5,578.1 5,277.5

2030

181.0 128.7 309.7 6,101.1 5,791.4

2031

186.4 132.5 319.0 6,673.1 6,354.1

2032 (10,150.6) 192.0 136.5 (9,822.1) 7,298.7 17,120.7

FIRR 7.3%

( ) = negative. FIRR = financial internal rate of return. Source: ADB project completion review mission.

Appendix 12 53

Table A12.4: Financial Reevaluation for the Whole Project

(Rs million)

Year

Costs Toll Revenue


2005 168 - - 167.7

(167.7)

2006 903 - - 902.6

(902.6)

2007 5,754 - - 5,754.4

(5,754.4)

2008 15,388 - - 15,388.4

(15,388.4)

2009 15,416 - - 15,416.4

(15,416.4)

2010 6,601 - - 6,601.2

(6,601.2)

2011 1,713 54.6 53.3 1,820.8

(1,820.8)

2012 1,211 136.6 133.2 1,480.8

(1,480.8)

2013 973 195.2 190.3 1,358.2 1,057.8 (300.4)

2014 443 244.0 237.9 924.7 1,572.1 647.4

2015 - 271.1 264.4 535.4 2,167.2 1,631.7

2016 - 279.2 272.3 551.5 2,441.9 1,890.4

2017 3,314 287.6 264.4 3,866.2 2,752.0 (1,114.2)

2018 - 296.2 272.3 568.5 3,102.1 2,533.6

2019 - 305.1 280.5 585.6 3,497.4 2,911.8

2020 - 314.2 288.9 603.1 3,943.8 3,340.7

2021 - 323.7 297.5 621.2 4,408.7 3,787.5

2022 3,314 333.4 264.4 3,912.0 4,929.0 1,017.0

2023 - 343.4 272.3 615.7 5,511.4 4,895.7

2024 - 353.7 280.5 634.1 6,163.4 5,529.2

2025 - 364.3 288.9 653.2 6,893.4 6,240.2

2026 - 375.2 297.5 672.8 7,597.3 6,924.5

2027 3,314 386.5 264.4 3,965.1 8,373.7 4,408.6

2028 - 398.1 272.3 670.4 9,230.2 8,559.8

2029 - 410.0 280.5 690.5 10,175.0 9,484.5

2030 - 422.3 288.9 711.2 11,217.4 10,506.2

2031 - 435.0 297.5 732.5 12,367.5 11,635.0

2032 (24,285.0) 448.0 306.5 (23,530.5) 13,636.6 37,167.1

FIRR 5.2%

( ) = negative. FIRR = financial internal rate of return. Source: ADB project completion review mission.

CONTRIBUTION TO THE ADB RESULTS FRAMEWORK

No. Level 2 Result Framework

Indicator Target Aggregate Output Methods/Comments

1 Use of roads built or upgraded (average daily vehicle-km in the first full year of operation)

2,662,584 vehicle-km in 2015

2,267,726 vehicle-km in the first full opening year of 2015

At full operation of the project highway in 2015, an average daily traffic was 3,138 vehicles on the northern section and 5,071 vehicles on the southern section.

2 Roads built or upgraded - Expressways and national highways (km)

566 km national highways along the north–south corridor

567.03 km of national highways along the north–south corridor.

At completion, 567.03 km of national highways were widened to four lanes and upgraded with substantial road furniture and safety facilities.

km = kilometer, no. = number. Source: ADB project completion review mission

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