LOAN NUMBER 8301-IN

Loan Agreement

(National Highways Interconnectivity Improvement Project)

between

INDIA

and

INTERNATIONAL BANK FOR RECONSTRUCTIONAND DEVELOPMENT

Dated 2 ,014

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LOAN NUMBER 8301-IN

LOAN AGREEMENT

Agreement dated J.L , 2014, between INDIA ("Borrower") and

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank"). The

Borrower and the Bank hereby agree as follows:

ARTICLE I - GENERAL CONDITIONS; DEFINITIONS

1.01. The General Conditions (as defined in the Appendix to this Agreement) constitute an

integral part of this Agreement.

1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have

the meanings ascribed to them in the General Conditions or in the Appendix to this

Agreement.

ARTICLE II - LOAN

2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred

to in this Agreement, the amount of five hundred million United States Dollars

(USD 500,000,000), as such amount may be converted from time to time through a

Currency Conversion in accordance with the provisions of Section 2.07 of this

Agreement ("Loan"), to assist in financing the project described in Schedule 1 to this

Agreement ("Project").

2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section IV of

Schedule 2 to this Agreement.

2.03. The Front-end Fee payable by the Borrower shall be equal to one quarter of one percent

(0.25%) of the Loan amount.

2.04. The interest payable by the Borrower for each Interest Period shall be at a rate equal to

the Reference Rate for the Loan Currency plus the Variable Spread; provided, that upon a

Conversion of all or any portion of the principal amount of the Loan, the interest payable

by the Borrower during the Conversion Period on such amount shall be determined in

accordance with the relevant provisions of Article IV of the General Conditions.

Notwithstanding the foregoing, if any amount of the Withdrawn Loan Balance remains

unpaid when due and such non-payment continues for a period of thirty days, then the

interest payable by the Borrower shall instead be calculated as provided in Section 3.02

(e) of the General Conditions.

2.05. The Payment Dates are March 15 and September 15 in each year.

2.06. The principal amount of the Loan shall be repaid in accordance with the amortization

schedule set forth in Schedule 3 to this Agreement.

2.07. (a) The Borrower may at any time request any of the following Conversions of theterms of the Loan in order to facilitate prudent debt management: (i) a change ofthe Loan Currency of all or any portion of the principal amount of the Loan,withdrawn or unwithdrawn, to an Approved Currency; (ii) a change of theinterest rate basis applicable to: (A) all or any portion of the principal amount ofthe Loan withdrawn and outstanding from a Variable Rate to a Fixed Rate, orvice versa; or (B) all or any portion of the principal amount of the Loanwithdrawn and outstanding from a Variable Rate based on a Reference Rate andthe Variable Spread to a Variable Rate based on a Fixed Reference Rate and theVariable Spread, or vice versa; or (C) all of the principal amount of the Loanwithdrawn and outstanding from a Variable Rate based on a Variable Spread to- aVariable Rate based on a Fixed Spread; and (iii) the setting of limits on the

Variable Rate or the Reference Rate applicable to all or any portion of the

principal amount of the Loan withdrawn and outstanding by the establishment of

an Interest Rate Cap or Interest Rate Collar on the Variable Rate or the ReferenceRate.

(b) Any conversion requested pursuant to paragraph (a) of this Section that is

accepted by the Bank shall be considered a "Conversion", as defined in the

General Conditions, and shall be effected in accordance with the provisions of

Article IV of the General Conditions and of the Conversion Guidelines.

(c) Promptly following the Execution Date for an Interest Rate Cap or Interest RateCollar for which the Borrower has requested that the premium be paid out of the

proceeds of the Loan, the Bank shall, on behalf of the Borrower, withdraw from

the Loan Account and pay to itself the amounts required to pay any premium

payable in accordance with Section 4.05 (c) of the General Conditions up to the

amount allocated from time to time for the purpose in the table in Section IV of

Schedule 2 to this Agreement.

ARTICLE III - PROJECT

3.01. The Borrower declares its commitment to the objectives of the Project. To this end, the

Borrower shall carry out the Project through its Ministry of Road Transport and

Highways ("MORTH") with the cooperation of the Project States, in accordance with the

provisions of Article V of the General Conditions.

3.02. Without limitation upon the provisions of Section 3.01 of this Agreement, and except as

the Borrower and the Bank shall otherwise agree, the Borrower shall ensure that the

Project is carried out in accordance with the provisions of Schedule 2 to this Agreement.

ARTICLE IV - EFFECTIVENESS; TERMINATION

4.01 The Effectiveness Deadline is the date ninety (90) days after the date of this Agreement.

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ARTICLE V - REPRESENTATIVE; ADDRESSES

5.01. The Borrower's Representative is any of the following officials, acting severally: the

Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary or Under

Secretary of the Department of Economic Affairs of the Borrower's Ministry of Finance.

5.02. The Borrower's Address is:

SecretaryDepartment of Economic AffairsMinistry of FinanceGovernment of IndiaNorth BlockNew Delhi 110001, India

Facsimile:

+91-11-23094075

5.03. The Bank's Address is:

International Bank for Reconstruction and Development1818 H Street, N.W.Washington, D.C. 20433United States of America

Cable address: Telex: Facsimile:

INTBAFRAD 248423(MCI) or 1-202-477-6391

Washington, D.C. 64145(MCI)

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AGREED at }\. 4 ;i' India, as of the day and year first above written.

INDIA

ByAuthorized Representative

Name: _ ________

Title: ..c1

INTERNATIONAL BANK FORRECONSTRUCTION AND DEVELOPMENT

ByAuthorized Representati e

Name: c1 , oA a

Title: - 4 - ..

SCHEDULE 1

Project Description

The objective of the Project is to improve the national highway network connectivity to

less developed areas and low-income States and enhance the institutional capacity of MORTH to

better manage the highway network under the purview of MORTH.

The Project consists of the following parts:

Component A: Road Improvement and Maintenance

1. Widening and upgrading approximately 400 km of existing single-lane/intermediate lane

national highways of the Non-NHDP Network in the Project States, to two-lane standards

through item-rate contracts.

2. Widening and upgrading approximately 720 km of existing single-lane/intermediate lane

national highways of the Non-NHDP Network in the Project States, to two-lane standards

through EPC Contracts.

3. Maintaining the assets improved/created under sub-components A.1 and A.2 above for a

period of at least five (5) years post construction.

4. Providing quality control services for the activities under sub-component A. 1, A.2 and

A.3 above, including implementation of/compliance with the EMF, RPF and the

respective EIAs, EMPs, SIAs, RAPs and TDPs.

Component B: Institutional Development

1. Improving MORTH's internal processes and procedures through: (a) rolling out of

enterprise resource planning software solutions; (b) developing standard manual(s) for

the allocation roles and responsibilities between MORTH and the Project States' PWDs

for the identification, preparation and implementation of Project activities; and (c)

updating costs-databases, data-books and other reference materials for the roads sector.

2. Developing and implementing: (a) an IT-based road information system containing an

inventory of road assets in the entire Non-NHDP Network; and (b) designing and piloting

an asset management system covering the Non-NHDP Network in at least three (3)

Project States.

3. Carrying out studies to review the existing policies and practices for the allocation of

resources and financing of construction and maintenance work of the assets of the Non-

NHDP network in order to suggest improvement and assess options available for the

mobilization of additional resources.

4. Strengthening MORTH's governance and accountability through the implementation of

the GAAP.-5-

5. Carrying out training programs for MORTH's and the PWDs' staff, as well as sector-

related institutions/agencies on policy, technical, financial, procurement and contract

management issues related to the road sector.

Component C: Road Safety

1. Reviewing and updating: (a) the road safety standards and codes of practices maintained

by the Indian Roads Congress, including improving standards and regulations for work-

zone safety, and mainstreaming implementation of road safety standards into MORTH's

contract management framework; and (b) the vehicle axle-load codes and institutional

arrangements for monitoring and enforcement thereof.

2. Establishing road accident database management systems in each for the Project States.

3. Strengthening the institutional capacity of MORTH, in particular its road safety cell, in

order to: (a) assess and improve the existing policy framework (statutory and regulatory)

for road safety, and develop models for the enforcement thereof and the provision of

related emergency care; (b) mainstream road safety monitoring and evaluation systems;

(c) carry out social marketing and public awareness campaigns to promote road safety

behavioral changes; and (d) support the establishment of lead road safety and traffic

management agencies.

4. Carrying out road safety training programs for MORTH's and the PWDs' staff, as well as

sector related institutions/agencies on safety road design, engineering countermeasures,

road safety audits and construction zone safety standards/policies, including

strengthening the institutional capacity to assess roads risk profiles pursuant to the iRAP,

and developing 3-star iRAP safety designs for selected roads in the Non-NHDP Network.

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SCHEDULE 2

Project Execution

Section . Implementation Arrangements

A. Institutional Arrangements

1. The Borrower shall maintain, throughout the period of implementation of the Project:

(a) a project steering committee (the "PSC"): (i) headed by the Secretary of MORTH

and with a composition/membership acceptable to the Bank; and (ii) vested with

such powers, functions and competencies, acceptable to the Bank, as shall be

required to exercise policy guidance for, and exercise the general oversight of,

the implementation of Project activities, including the assessment of quarterly

Progress Reports submitted by EAP Cell and the review of the semi-annual

audits reports prepared by the TPAC; and

(b) an externally aided projects cell ("EAP Cell") within the MORTH: (i) headed by

a project director and assisted by competent staff with experience and

qualifications, in numbers and under terms of reference acceptable to the Bank;

and (ii) vested with such powers, financial resources, functions and

competencies, acceptable to the Bank, as shall be required for it to carry out the

day-to-day implementation of Project activities, including the inter-institutional

coordination with the PWDs of Project States and other line agencies, the

carrying out of procurement, financial management, monitoring and reporting

activities, the screening of Project activities pursuant to the EMF and the RPF, as

well as the preparation of required EIAs, EMPs, SlAs, RAPs and/or TDPs, as the

case may be, and the monitoring and enforcement of contractors' implementation

of/compliance with the respective Safeguard Documents.

2. The Borrower shall cause each of the Project States to maintain, throughout the period of

implementation of the Project:

(a) a state oversight committee: (i) with composition/membership acceptable to the

Bank; and (ii) vested with such powers, functions and competencies, acceptable

to the Bank as shall be required for providing policy guidance and strategic

direction to the PCU of each such Project State, monitoring progress in the

implementation of Project activities in the respective Project State (including

compliance with statutory and regulatory requirements as well as the Safeguard

Documents), and facilitating the solution of any emerging problems and/or

obstacles for such implementation; and

(b) a project coordination unit ("PCU") within the national highway wing of the

respective Project States' PWDs: (i) headed by a nodal officer in the rank of

Superintending Engineer and assisted by competent staff, all with experience and

qualifications, in numbers and under terms of reference acceptable to the Bank;

and (ii) vested with such powers, financial resources, functions and competences,

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acceptable to the Bank, as shall be required for it to: (A) carry out the technicaland fiduciary control of Project activities at the State level, as delegated by the

EAP Cell (including contract management and preparation and submission ofreporting requirements); and (B) ensure compliance with/implementation of theSafeguard Documents (including the screening of Project activities pursuant tothe EMF and RPF and preparation of EIAs, EMP, SlAs, RAPs and TDPs), and

timely implementation of any land acquisition and resettlement activities, as well

as the payment of compensation therefor,

3. The Borrower shall select and engage:

(a) by no later than three (3) months after the Effective Date, and thereafter maintainthroughout the period of implementation of the Project, the services of a project

management consulting firm ("PMC") with qualification and experience and

under terms of reference acceptable to the Bank, in order to assist the EAP Cell

with Project planning and implementation including, inter alia: (i) providing

guidance and recommendation on technical and policy matters; (ii) preparing

bidding documents and subsequent changes/variations thereof; (iii) evaluating

technical and financial proposals; (iv) handling contractual matters and

procurement disputes, and establishing an automated contract management

system; (v) overseeing of payments to service providers and/or Project

contractors under Components B and C of the Project, and monitoring those

payments for civil works under Component A of the Project; (vi) providing

training, guidance and recommendations to PCUs and PIUs to ensure compliance

with the Safeguards Documents; and (vii) preparing the Project Reports and the

IFRs; and

(b) by no later than six (6) months after the Effective Date, and thereafter maintain

throughout the period of implementation of the Project, the services of a third

party audit consulting firm ("TPAC") with qualification and experience and

under terms of reference acceptable to the Bank, in order to carry out semi-

annual audits and report to the EAP Cell and the PSC on: (i) financial

management performance, procurement decisions and contract administration;

(ii) contract performance (i.e. quality of construction, compliance with technical

specifications, design requirements and maintenance plans); and (iii) compliance

with statutory/regulatory requirements and implementation of the Safeguard

Documents, and the PFM Manual (other than the functions of the internal audit).

B. Project Financial Management Manual

1. The Borrower shall implement, and/or cause the Project States to implement, the Project

in accordance with the financial management arrangements set forth in the PFM Manual;

provided however that in the event of conflict between the provisions of said manual, on

the one hand, and those of this Agreement, on the other hand, the provisions of this

Agreement shall prevail.

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2. The Borrower shall refrain, and/or cause the Project States to refrain, from amending,

suspending, waiving and/or voiding any provisions of the PFM Manual, whether in whole

or in part, without the prior written concurrence of the Bank.

C. Road Improvement and Maintenance Activities

1. For purposes of implementing the road widening and upgrading activities set forth in

Component A of the Project, the EAP Cell and the PCU of the respective Project State

identified/shall identify Selected Roads in accordance with a road readiness criteria

acceptable to the Bank, which criteria shall include, inter alia:

(a) the completion of the notifications for any necessary land acquisition;

(b) the securing of all environmental clearances (including any mandatory public

hearings) and governmental permits for construction activities;

(c) the completion of the environmental and social screening assessments of the

proposed road construction activities, pursuant to the EMF and RPF, and the

preparation, approval and disclosure of the respective EIA, EMP, RAP and TDP,

as the case may be;

(d) the payment, in full, of compensation and/or resettlement assistance to Displaced

Persons as per the applicable RAP, in respect of the first milestone stretch of civil

works;

(e) the engagement of the respective Construction Supervision Consultant or

Authority Engineer, as the case may be; and

(f) the engagement of the respective RAP Implementation Support Agency.

The Borrower shall submit each Selected Road to the Bank for written concurrence prior

to the award of the civil works contracts for such Selected Road to the respective

contractor(s).

2. For each Selected Road, prior to the earlier of any invitation to bid, and/or the selection

of any contractor for activities on such road, the Borrower shall cause the respective

Project State to establish, and thereafter maintain throughout the period of

implementation of Project activities in such Selected Road, a road-specific Project

implementation unit ("PIU"): (a) headed by an executive engineer, assisted by competent

staff, all with experience and qualifications, in numbers and under terms of reference

acceptable to the Bank; and (b) vested with such powers, financial resources, functions

and competences, acceptable to the Bank, as shall be required for it to carry out all

preparatory activities for site-specific Project activities (including securing the necessary

encumbrance-free land and State-level clearances and permits), ensure coordination with

inter-state agencies and governmental departments, oversee the implementation

of/compliance with the Safeguard Documents, handle the MORTH's grievance

complaints systems (for all grievances other than procurement-related ones), undertake

contract management responsibilities, and guide/oversee performance of the Construction

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Supervision Consultant or the Authority Engineer, and the RAP Implementation Support

Agencies, as the case may be.

3. For each Selected Road, prior to the commencement of civil works, the Borrower shall

select, engage and thereafter maintain throughout the period of implementation of such

activities, the services of:

(a) a supervision consulting firm (the "Construction Supervision Consultant"), for

works other than those procured under EPC Contracts, with qualifications and

experience and under terms of reference acceptable to the Bank, in order to assist

the respective PIU with contract management, monitoring/supervision, and the

certification of contractors' performance, including the compliance

with/implementation of the Safeguard Documents;

(b) an engineering consulting firm (the "Authority Engineer") for works procured

under EPC Contracts, with qualifications and experience and under terms of

reference acceptable to the Bank, including sufficient delegated authority to

resolve and approve any contractual claims/clarifications, in order to assist the

respective PIU with contract management, monitoring/supervision, and the

certification of contractors' performance, including the compliance

with/implementation of the Safeguard Documents; and

(c) a non-governmental organization or social mobilization consulting firm (the

"RAP Implementation Support Agency"), with qualifications and experience and

under terms of reference acceptable to the Bank, in order to assist the respective

PIU with the implementation of the works-specific RAP and, when applicable,

the TDP; the handling and processing of any grievance complaints in accordance

with MORTH's grievance systems in relation to the sub-project activities, the

carrying out of community awareness trainings and public information

campaigns, and the preparation and implementation of health and safety

trainings, including HIV/AIDS awareness/prevention activities.

D. Anti-Corruption

The Borrower shall ensure that the Project is carried out in accordance with the

provisions of the Anti-Corruption Guidelines and the GAAP.

E. Safeguards

The Borrower shall, and shall cause the Project States, to:

(a) carry out the Project in accordance with the EMF and the RPF, and the EIAs,

EMPs, SIAs, RAPs and TDPs prepared and/or to be prepared pursuant to

paragraph 2 of this sub-section in accordance with the objectives, policies,

procedures, time schedules, compensation arrangements and other provisions set

forth in the EMF and RPF (together, the "Safeguard Documents"), in each case

in a manner and in substance satisfactory to the Bank; and

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(b) refrain from taking any action which would prevent or interfere with the

implementation of the Safeguard Documents, including any amendment,

suspension, waiver, and/or voidance of any provision of the Safeguard

Documents, whether in whole or in part, without the prior written concurrence of

the Bank.

2. With respect to each Selected Road, the Borrower shall refrain from awarding any

contract to contractors or undertaking any activities which would result in Displaced

Persons, until and unless:

(a) the proposed activities have been screened by the EAP Cell, and/or the PCU of

the respective Project State, in accordance with the guidelines, standards and

procedures set forth in the EMF and RPF;

(b) all of the respective EIA(s), EMP(s), SIA(s), RAP(s) and/or TDP(s) required for

such Selected Road pursuant to the EMF and RPF has/have been prepared and

submitted to the Bank for review and the Bank has notified the Borrower in

writing of its no-objection thereto; and

(c) the foregoing .Safeguard Documents have been publicly disclosed by the

Borrower, and/or the respective Project State, in local language(s) at the relevant

Project's sites, at least one hundred and twenty (120) days prior to the award of

the contract for the related works.

3. The Borrower shall ensure, and/or cause the Project States to ensure, that, prior to

commencing any civil works on a Selected Road, or section thereof, under the Project: (a)

all necessary governmental permits and clearances for such civil works in the relevant

road, or section, shall have been obtained from the competent governmental authority/ies

and submitted to the Bank; (b) all pre-construction conditions imposed by the

governmental authority/ies under such permit(s) or clearance(s) shall have been complied

with/fulfilled; and (c) all resettlement measures set forth in the applicable RAP to the

respective section of such Selected Road shall have been fully executed, including the

full payment of compensation prior to displacement and/or the provision of relocation

assistance to all Displaced Persons, as per the entitlements provided in the RPF and/or the

applicable RAP.

4. The Borrower shall ensure, and/or cause the Project States to ensure, that each contract

for civil works under the Project includes the obligation of the relevant contractor to

comply with the relevant Safeguard Documents applicable to such civil works

commissioned/awarded pursuant to said contract.

5. The Borrower shall, and/or shall cause the Project States to:

(a) maintain monitoring and evaluation protocols and record keeping procedures

acceptable to the Bank and adequate to enable the Borrower, the Project States

and the Bank to supervise and assess, on an on-going basis, the implementation

of/compliance with the Safeguards Documents, as well as the achievement of the

objectives thereof; and

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(b) furnish to the Bank, throughout the period of Project implementation:

(i) quarterly reports prepared by the EAP Cell, with the assistance of the

PCUs, on the physical and financial progress of Project activities, the

general compliance with the Safeguard Documents, the social andenvironmental impact of Project activities, and the results of the

mitigation or benefit-enhancing measures applied thereto, during theperiod preceding the date of each such report; and

(ii) quarterly reports prepared by the respective Construction SupervisionConsultants or the Authority Engineers, as the case may be, and the RAP

Implementation Support Agency, assessing the contractors' general

compliance with the Safeguard Documents and the respective works

contracts, monitor the efficacy of the social and environmentalmanagement measures, and the results of the mitigation or benefit-

enhancing measures applied thereto, with particular emphasis on the

implementation and results of resettlement activities, during the periodpreceding the date of each such report.

6. The Borrower shall ensure that the following Project expenditures are financed

exclusively out of the Borrower's own resources, and, to this end, shall provide, as

promptly as needed, the resources required therefor, namely:

(a) all land acquisition required for the purpose of the Project; and

(b) any compensation, resettlement and rehabilitation payment to Displaced

Persons in accordance with the provision of the RAPs.

7. In the event of any conflict between the provisions of any of the EMF, the RPF, ElAs,

SIAs, EMPs, RAPs and/or TDPs, on the one hand, and the provisions of this Agreement,

on the other hand, the provisions of this Agreement shall prevail.

Section II. Project Monitoring Reporting and Evaluation

A. Project Reports

The Borrower shall monitor and evaluate the progress of the Project and prepare Project

Reports in accordance with the provisions of Section 5.08 of the General Conditions and

on the basis of indicators agreed with the Bank. Each Project Report shall cover the

period of one calendar quarter, and shall be furnished to the Bank not later than forty-five

(45) days after the end of the period covered by such report.

B. Financial Management, Financial Reports and Audits

The Borrower shall maintain or cause to be maintained a financial management system in

accordance with the provisions of Section 5.09 of the General Conditions.

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2. Without limitation on the provisions of Sub-section A of this Section, the Borrower shall

prepare and furnish to the Bank not later than forty five (45) days after the end of each

calendar quarter, interim unaudited financial reports for the Project covering the quarter,

in form and substance satisfactory to the Bank.

3. The Borrower shall have the Financial Statements audited in accordance with the

provisions of Section 5.09 (b) of the General Conditions. Each audit of the Financial

Statements shall cover the period of one fiscal year of the Borrower, commencing with

the fiscal year in which the first withdrawal was made. The audited Financial Statements

for each such period shall be furnished to the Bank not later than nine (9) months after

the end of such period.

4. The Borrower shall carry out regular internal audits in accordance with the PFM Manual,

performed by qualified staff acceptable to the Bank, and shall furnish such audits to the

Bank for their review, ninety (90) days after the completion/issuance of the audit report,

including, if any, the recommendations made by the internal auditors.

Section III. Procurement

A. General

1. Goods, Works and Non-consulting Services. All goods, works and non-consulting

services required for the Project and to be financed out of the proceeds of the Loan shall

be procured in accordance with the requirements set forth or referred to in Section I of the

Procurement Guidelines, and with the provisions of this Section.

2. Consultants' Services. All consultants' services required for the Project and to be

financed out of the proceeds of the Loan shall be procured in accordance with the

requirements set forth or referred to in Sections I and IV of the Consultant Guidelines and

with the provisions of this Section.

3. Definitions. The capitalized terms used below in this Section to describe particular

procurement methods or methods of review by the Bank of particular contracts refer to

the corresponding method described in Sections II and III of the Procurement Guidelines,

or Sections II, III, IV and V of the Consultant Guidelines, as the case may be.

B. Particular Methods of Procurement of Goods, Works and Non-consulting Services

I. International Competitive Bidding. Except as otherwise provided in paragraph 2

below, goods, works and non-consulting services shall be procured under contracts

awarded on the basis of International Competitive Bidding.

2. Other Methods of Procurement of Goods, Works and Non-consulting Services. The

following methods, other than International Competitive Bidding, may be used for

procurement of goods, works and non-consulting services for those contracts specified in

the Procurement Plan: (a) National Competitive Bidding, subject to the additional

provisions set forth in the Procurement Plan; and (b) Shopping.

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C. Particular Methods of Procurement of Consultants' Services

1. Quality- and Cost-based Selection. Except as otherwise provided in paragraph 2 below,

consultants' services shall be procured under contracts awarded on the basis of Quality-

and Cost-based Selection.

2. Other Methods of Procurement of Consultants' Services. The following methods,

other than Quality- and Cost-based Selection, may be used for procurement of

consultants' services for those contracts which are specified in the Procurement Plan: (a)

Selection under a Fixed Budget; (b) Least Cost Selection; (c) Selection based on

Consultants' Qualifications; and (d) Procedures set forth in paragraphs 5.2 and 5.3 of the

Consultant Guidelines for the Selection of Individual Consultants.

D. Review by the Bank of Procurement Decisions

The Procurement Plan shall set forth those contracts which shall be subject to the Bank's

Prior Review. All other contracts shall be subject to Post Review by the Bank.

Section IV. Withdrawal of Loan Proceeds

A. General

I. The Borrower may withdraw the proceeds of the Loan in accordance with the provisions

of Article II of the General Conditions, this Section, and such additional instructions as

the Bank shall specify by notice to the Borrower (including the "World Bank

Disbursement Guidelines for Projects" dated May 2006, as revised from time to time by

the Bank and as made applicable to this Agreement pursuant to such instructions), to

finance Eligible Expenditures as set forth in the table in paragraph 2 below.

2. The following table specifies the categories of Eligible Expenditures that may be

financed out of the proceeds of the Loan ("Category"), the allocation of the amounts of

the Loan to each Category, and the percentage of expenditures to be financed for Eligible

Expenditures in each Category.

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Category Amount of the Loan Percentage of ExpendituresAllocated to be financed

(expressed in USD) (inclusive of taxes)

(1) Works under Sub-Components A.1, and A.2 of 442,100,000 50%

the Project

(2) Goods, non-consultingservices, consultants' services,and Training under Sub- 56,650,000 80%

Component A.4 andComponents B and C of theProject.

Amount payable pursuant toSection 2.03 of this

(3) Front-end Fee 1,250,000 Agreement in accordance withSection 2.07 (b) of the GeneralConditionsAmount due pursuant to

(4) Interest Rate Cap orInterest Rate Collar premium 0 Section 2.07(c) of thisAgreementTOTAL AMOUNT 500,000,000

B. Withdrawal Conditions; Withdrawal Period

1 . Notwithstanding the provisions of Sub-section A of this Section, no withdrawal shall be

made for payments made prior to the date of this Agreement, except that withdrawals up

to an aggregate amount not to exceed USD 10,000,000 equivalent may be made for

payments made prior to this date but on or after June 15, 2013, for Eligible Expenditures

under Categories (1) and (2).

2. The Closing Date is June 30, 2019.

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SCHEDULE 3

Amortization Schedule

1. The following table sets forth the Principal Payment Dates of the Loan and the

percentage of the total principal amount of the Loan payable on each Principal Payment

Date ("Installment Share"). If the proceeds of the Loan have been fully withdrawn as of

the first Principal Payment Date, the principal amount of the Loan repayable by the

Borrower on each Principal Payment Date shall be determined by the Bank by

multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by (b)

the Installment Share for each Principal Payment Date, such repayable amount to be

adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Scheduke,

to which a Currency Conversion applies.

Principal Payment Date Installment Share(Expressed as a Percentage)

On each March 15 and September 15Beginning March 15, 2019 3.85%

through March 15, 2031On September 15, 2031 3.75%

2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal

Payment Date, the principal amount of the Loan repayable by the Borrower on each

Principal Payment Date shall be determined as follows:

(a) To the extent that any proceeds of the Loan have been withdrawn as of the first

Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance

as of such date in accordance with paragraph I of this Schedule.

(b) Any amount withdrawn after the first Principal Payment Date shall be repaid on

each Principal Payment Date falling after the date of such withdrawal in amounts

determined by the Bank by multiplying the amount of each such withdrawal by a

fraction, the numerator of which is the original Installment Share specified in the

table in paragraph I of this Schedule for said Principal Payment Date ("Original

Installment Share") and the denominator of which is the sum of all remaining

Original Installment Shares for Principal Payment Dates falling on or after such

date, such amounts repayable to be adjusted, as necessary, to deduct any amounts

referred to in paragraph 4 of this Schedule, to which a Currency Conversion

applies.

3. (a) Amounts of the Loan withdrawn within two calendar months prior to any

Principal Payment Date shall, for the purposes solely of calculating the principal

amounts payable on any Principal Payment Date, be treated as withdrawn and

outstanding on the second Principal Payment Date following the date of

withdrawal and shall be repayable on each Principal Payment Date commencing

with the second Principal Payment Date following the date of withdrawal.

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(b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any

time the Bank adopts a due date billing system under which invoices are issued

on or after the respective Principal Payment Date, the provisions of such sub-

paragraph shall no longer apply to any withdrawals made after the adoption of

such billing system.

4. Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a CurrencyConversion of all or any portion of the Withdrawn Loan Balance to an Approved

Currency, the amount so converted in the Approved Currency that is repayable on any

Principal Payment Date occurring during the Conversion Period, shall be determined by

the Bank by multiplying such amount in its currency of denomination immediately prior

to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in

the Approved Currency payable by the Bank under the Currency Hedge Transaction

relating to the Conversion; or (ii) if the Bank so determines in accordance with the

Conversion Guidelines, the exchange rate component of the Screen Rate.

5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the

provisions of this Schedule shall apply separately to the amount denominated in each

Loan Currency, so as to produce a separate amortization schedule for each such amount.

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APPENDIX

Definitions

1. "Anti-Corruption Guidelines" means the "Guidelines on Preventing and Combating

Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants",dated October 15, 2006 and revised in January 2011.

2. "Authority Engineer" means each of the consulting firms selected, or to be selected, by

the Borrower pursuant to Section I.C.3.(b) of Schedule 2 to this Agreement; and the term

"Authority Engineers" means all such consulting firms collectively considered.

3. "Category" means a category set forth in the table in Section IV of Schedule 2 to this

Agreement.

4. "Component" means each of the sets of Project activities grouped together under each of

the sections entitled "Road Improvement and Maintenance", "Institutional Development"

and "Road Safety", in Schedule I to this Agreement.

5. "Construction Supervision Consultant" means each of the consulting firms selected, or to

be selected, by the Borrower pursuant to Section I.C.3.(a) of Schedule 2 to this

Agreement; and the term "Construction Supervision Consultants" means all such

consulting firms collectively considered.

6. "Consultant Guidelines" means the "Guidelines: Selection and Employment of

Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers"

dated January 2011.

7. "Displaced Persons" means persons who, on account of the execution of the Project, have

experienced or would experience direct economic and social impacts caused by: (a) the

involuntary taking of land, resulting in: (i) relocation or loss of shelter; (ii) loss of assets

or access to assets; or (iii) loss of income sources or means of livelihood, whether or not

such persons must move to another location; or (b) the involuntary restriction of access to

legally designated parks and protected areas, resulting in adverse impact on the

livelihoods of such persons.

8. "EAP Cell" means the team/cell established by MORTH for the implementation of

externally funded projects, and referred to in Section l.A.1(b) of Schedule 2 to this

Agreement.

9. "Environmental Impact Assessments" and the acronym "ElAs" means, collectively, the

Borrower's: (a) the environmental impact assessments for roads NHl IB, NH98, NH104,

NH113, NH200 and NH217, and disclosed in the Bank's Infoshop on July 26, 2013,

March 11, 2013, July 27, 2013, September 6, 2013, March 11, 2013 and March 11, 2013,

respectively; and (b) the environmental impact assessments to be prepared pursuant to

Section I.E.2 of Schedule 2 to this Agreement, in accordance with the provisions of the

EMF, in order to assess the likely positive and negative environmental impact of Project

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activities; as such assessments may be revised, updated or supplemented from time to

time with the prior written concurrence of the Bank.

10. "Environmental Management Framework" and the acronym "EMF" mean the Borrower's

framework, dated January 26, 2012, setting forth the guiding principles, acceptable

standards and procedures for: (a) the screening of Project activities and the identification

of any adverse or positive environmental impacts caused, or expected to be caused, on

account of their implementation; and (b) the preparation of their prescribed

Environmental Impact Assessements, and Environmental Management Plans; as such

framework may be revised, updated or supplemented from time to time with the prior

written concurrence of the Bank.

11. "Environmental Management Plans" and the acronym "EMPs" mean, collectively, the

Borrower's plans: (a) prepared in respect of roads NHllB, NH98, NH1O4, NH113,

NH200 and N-1217, and disclosed in the Bank's Infoshop on July 26, 2013, March 11,

2013, July 27, 2013, September 6, 2013, March 11, 2013 and March 11, 2013,

respectively; and (b) to be prepared pursuant to Section I.E.2 of Schedule 2 to this

Agreement, in accordance with the provisions of the EMF, in each case setting out

mitigation, enhancement, monitoring and institutional measures, including capacity

building through training, required to: (i) eliminate adverse environmental impacts of

activities to be implemented under the Project; (ii) offset them, or reduce them to

acceptable levels; (iii) enhance any positive impacts thereof; as such plans may be

revised, updated or supplemented from time to time with the prior written concurrence of

the Bank; and/or (iv) ensure compliance with Borrower's statutory environmental

requirement.

12. "EPC Contracts" means the engineering,-procurement-construction composite contracts

to be piloted by the Borrower for the widening and upgradation of selected roads under

the Project, whereby the contractor takes comprehensive responsibility for the design,execution and maintenance of the respective asset, in each case on the basis of the model

form of agreement agreed between the Borrower and the Bank.

13. "GAAP" means the Borrower's governance and accountability action plan dated June 12,2013, for purposes of the Project, which sets out the key actions to be undertaken by the

Borrower to strengthen governance, transparency and accountability under the Project; as

such action plan may be revised, updated or supplemented, from time to time, with the

prior written concurrence of the Bank.

14. "General Conditions" means the "International Bank for Reconstruction and

Development General Conditions for Loans", dated March 12, 2012.

15. "HIV/AIDS" means the human immunodeficiency virus and the resulting acquired

immune deficiency syndrome.

16. "IFRs" means, collectively, the interim unaudited financial reports (to be) prepared by the

Borrower, through MORTH, pursuant to Section I1.B.2 of Schedule 2 to this Agreement.

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17. "Indian Roads Congress" means the Indian society of highways engineers established and

registered in 1937, and operating under India's the Societies Registration Act of 1860.

18. "iRAP" means the International Road Assessment Program, a charity operating under the

laws of the United Kingdom of Great Britain and Northern Ireland, and registered under

the Company No. 05476000, and Charity No. 1140357.

19. "MORTH" means the Borrower's Ministry of Roads, Transport and Highways, or any

successor thereto.

20. "Non-NHDP Network" means the Borrower's primary road network (i.e. national

highways) other than the national highways comprised under the Borrower's National

Highways Development Program.

21. "PCU" means the project coordination unit established in each of the Project States, and

referred to in Section I.A.2(b) of Schedule 2 to this Agreement; and the term "PCUs"

means all five (5) said coordination units, collectively considered.

22. "PFM Manual" means the manual dated September 17, 2013, for purposes of the Project,

which provides detail guidance on segregation of financial management duties, internal

control protocols, accounting and record keeping procedures, funds flow arrangements,

withdrawal applications procedures, asset management, reporting and auditing

arrangements applicable to the Project; as such manual may be revised, updated or

supplemented, from time to time, with the prior written concurrence of the Bank.

23. "PIU" means the sub-project level implementation unit to be established in respect of

each of the Project's selected roads pursuant Section I.C.2 of Schedule 2 to this

Agreement; and the term "PIUs" means all such sub-project implementation units

collectively considered.

24. "PMC" means the project management consulting firm to be selected by the Borrower

pursuant to Section I.A.3.(a) of Schedule 2 to this Agreement.

25. "Procurement Guidelines" means the "Guidelines: Procurement of Goods, Works and

Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank

Borrowers" dated January 2011.

26. "Procurement Plan" means the Borrower's procurement plan for the Project, dated

September 21, 2013 and referred to in paragraph 1.18 of the Procurement Guidelines and

paragraph 1.25 of the Consultant Guidelines, as the same shall be updated from time to

time in accordance with the provisions of said paragraphs.

27. "Project" means the activities described in Schedule 1 to this Agreement, which are the

same as the ones approved by the Borrower on April 18, 2013 under the title of 'National

Highways Interconnectivity Improvement Projects' and/or any changes thereof as

mutually agreed between the Borrower and the Bank.

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28. "Project States" means the Borrower's States of Bihar, Orissa, Rajasthan, Karnataka andWest Bengal, and/or any other states of the Borrower as mutually agreed between theBorrower and the Bank.

29. "PSC" means the project steering committee established by the Borrower on February 20,2013, and referred to in Section I.A.1(a) of Schedule 2 to this Agreement.

30. "PWDs" means collectively the Public Works Department of the Project States.

31. "RAP Implementation Support Agency" means each of the specialized socialmobilization non-government organizations or consulting firms to be selected by theBorrower pursuant to Section I.C.3(c) of Schedule 2 to this Agreement.

32. "Resettlement Action Plans" and the acronym "RAPs" mean, collectively, the Borrower'sresettlement and relocation plans: (a) prepared in respect of roads NH11B, NH98,NHIO4, NH 113, NH200 and NH217, and disclosed in the Bank's Infoshop on July 10,2013, March 27, 2013, March 27, 2013, July 22, 2013, March 27, 2013 and March 28,2013, respectively; and (b) to be prepared pursuant to Section I.E.2 of Schedule 2 to thisAgreement, in accordance with the provisions of the RPF, in each case identifyingDisplaced Persons on account of implementation of Project activities in the respectiveSelected Road or section thereof, and setting forth the terms and conditions for providingthem with resettlement assistance and/or compensation, as well the procedures to beapplied in the identification, assessment and mitigation of potential Project related socialimpacts, including the protocols for consultation, the processing of complaints andgrievance redressal, monitoring and reporting requirements, and the Displaced Persons'entitlement schedules; as such plans may be revised, updated or supplemented, from timeto time, with the prior written concurrence of the Bank.

33. "Resettlement Policy Framework" and the acronym "RPF" mean the Borrower'sframework, dated March 11, 2013, setting for the guiding principles, acceptable standardsand procedures for: (a) the screening of Project activities and the identification of anyDisplaced Persons and or Tribal Groups, on account of their implementation; and (b) thepreparation of their prescribed Resettlement Action Plans and Tribal Development Plans,as applicable; as such framework may be revised, updated or supplemented from time totime with the prior written concurrence of the Bank.

34. "Safeguard Documents" means, collectively, the EMF, the RPF, the EIAs, the EMPs, theSIA, the RAPs and the TDPs.

35. "Selected Road" means the stretches of the roads NHl IB, NH30A, NH60A, NH98,NHIO4, NHIO6, NH1l3, NH200, NH201, NH217, and NH234, as well as any otherroads that the Borrower and the Bank may agree from time to time, provided that allthese roads meet the criteria set out in paragraph I of Section I.C of Schedule 2 to thisAgreement.

36. "States" means any of the political subdivisions of the Borrower, acknowledged in theBorrower's States Reorganization Act of 1956; and/or subsequent complementarylegislation and treaties.

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37. "Social Impact Assessments" and the acronym "SIAs" mean, collectively, the

Borrower's: (a) the social impact assessments prepared for roads NHI IB, NH98, NHIO4,

NIH 1l3, NH200 and NH217, and disclosed in the Bank's Infoshop on July 10, 2013,

March 27, 2013, March 27, 2013, July 22, 2013, March 27, 2013'and March 28, 2013,

respectively; and (b) the social screening to be prepared pursuant to Section I.E.2 of

Schedule 2 to this Agreement, in accordance with the provisions of the RPF, in order to

assess the likely social impact of Project activities; as such assessments may be revised,

updated or supplemented from time to time with the prior written concurrence of the

Bank.

38. "Sub-Component" means each activity or set of activities within a Component,

individualized through a numbered paragraph in Schedule I to this Agreement.

39. "TPAC" means audit consulting firm(s) to be selected by the Borrower pursuant to

Section I.A.3(b) of Schedule 2 to this Agreement.

40. "Training" means the reasonable cost of trainings, seminars, workshops, conferences and

study tours, conducted in the territory of the Borrower and/or overseas, including: (a) the

fees of training institutions and courses; (b) domestic and international travel costs,

lodging costs, and subsistence/per diem allowances both for trainers and trainees; (c) the

rental of training facilities; and (d) preparation, purchase or reproduction of training

materials.

41. "Tribal Development Plans" and the acronym "TDPs" mean, collectively, the Borrower's

plan collectively, the Borrower's development plans: (a) prepared for roads NHI I B,

NIH 13, NH200 and NH217 as part of the RAPs, and disclosed at the Bank's Infoshop on

July 12, 2013, July 22, 2013, March 11, 2013, and March 11, 2013 respectively; and (b)

to be prepared pursuant to Section I.E.2 of Schedule 2 to this Agreement, in accordance

with the provisions of the RPF, setting out, in each case: (i) the measures designed to

ensure meaningful consultation with, and informed participation of, Tribal Groups and

their communities in a Project State in the design and implementation of the Project

activities in respect of a selected road, as well as; (ii) the envisioned Project benefits for

said Tribal Groups and communities which shall be/are culturally appropriate and

socially inclusive.

42. "Tribal Groups" means any distinct, vulnerable, social and cultural group within the

territory of the Borrower, that: (i) self-identifies as such and claims, and is recognized by

others as, having a distinguishable cultural identity; (ii) has collective attachment to

geographically distinct habitats or ancestral territories in the Project area, and to the

natural resources in these habitat and territories; (iii) has customary cultural, economic,

social and political institutions that are separate from those of the dominant society and

culture; and (iv) has an indigenous language, often different from the official language of

the Borrower.

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