supplementAL Operational MANUAL
FOR WORLD BANK AIDED STATES
UNDER PMGSY
Table of Contents
1.INTRODUCTION
Background
Purpose of this Document
Description of the Bank funded project
2. NEW CONSTRUCTION AND UPGRADING COMPONENT
Criteria for allocation of Bank funds
Core network
Selection of works
Preparation and Review of Detailed Project Reports (DPRs)
Procurement of works
Implementation and quality monitoring of the works
Monitoring and Reporting Arrangements
3. MAINTENANCE COMPONENT
Planning of Maintenance
Budget requirements for maintenance
4.INSTITUTIONAL DEVELOPMENT COMPONENT
Technical Assistance to Participating States
Quality Control Equipment, IT Hardware and Software
Technical Assistance to Centre
Training of project staff in Bank policies
5.FINANCIAL MANAGEMENT
Budget at the State and National Levels
Staffing Requirements for Financial Management
Eligible Expenses for the Project
On Line Monitoring and Management System
Reporting requirements
Financial Monitoring Reports (FMR)
External Audit
Internal Audit cum financial review
Disbursement Arrangements
6.PROJECT IMPLEMENTATION ARRANGEMENTS
Procurement Plan
National Level Arrangements
State-level Arrangements
List of Annexes
Annex 1Format for PIU Certificate of Application of ESMF
Annex 2Financial Monitoring Reports
Annex 3Maintenance Component Report Format
Annex 4Terms of Reference for External Auditors
Abbreviations and Acronyms
CAAA / Controller of Aid, Accounts and AuditCAO / Chief Accounts Officer
DS / Deputy Secretary
ECOP / Environment Codes of Practice
EE / Executive Engineer
ESMF / Environment and Social Management Framework
FM / Financial Management
FMR / Financial Monitoring Report
FMS / Financial Management System
GOI / Government of India
HP / Himachal Pradesh
HQ / Headquarters
IRC / Indian Road Congress
IT / Information Technology
M&E / Monitoring & Evaluation
MORD / Ministry of Rural Development
NBF / Non Bank Financed
NCB / National Competitive Bidding
NRRDA / National Rural Road Development Agency
NQM / National Quality Monitor
OM / Operational Manual
OMMS / On-line Monitoring & Management System
PRI / Panchayat Raj Institution
PWD / Public Works Department
RDD / Rural Development Departments
REO / Rural Engineering Organization of Jharkhand
RES / Rural Engineering Services of Uttar Pradesh
RMS / Road Management System
SBD / Standard Bidding Document
SE / Superintending Engineer
SRRDA / State Road Rural Road Development Agencies
UP / Uttar Pradesh
1.INTRODUCTION
Background
1.1About 300,000 out of 825,000 habitations in India remain without any all-weather road access. In 2000, the Government of India (GOI) initiated a program to address this backlog. The Prime Minister’s Rural Road Program (Pradhan Mantri Gram Sadak Yojana, PMGSY) aims at providing all-weather road access to all habitations of greater than 500 people (250 in the case of hill states tribal and desert areas) by the year 2007, the end of the Tenth Plan. The Ministry of Rural Development (MORD), and an associated technical arm, the National Rural Road Development Agency (NRRDA), have been assigned responsibility to oversee implementation of the program by state and local governments.
1.2There is currently a substantial financing gap between the resources available from the GOI and the funds required to complete the program. The GOI is accordingly seeking external funding from a variety of sources, including the World Bank, to help bridge this gap.
1.3The PMGSY has been under implementation for the last three years and has so far connected about 35,000 habitations across the country. Guidelines have been issued by the MORD/NRRDA on various aspects of the program that are being applied by state implementing agencies. A list of key guidelines, manuals and instructions is shown on the program website at The MORD has prepared an Operations Manual (OM) to serve the needs of implementing agencies. The OM is applicable to all works implemented under the PMGSY, be they funded by the GOI’s own resources or from funds borrowed from lending agencies including the World Bank.
Purpose of this Document
1.4The provisions of this Supplemental Operations Manual (SOM) are in addition to the provisions of the OM as well as any other MORD/NRRDA guidelines or instructions and are applicable to the additional activities envisaged under World Bank funded projects. The provisions of the SOM, as amended from time to time as agreed between the MORD and Bank, are to be applied by the MORD, NRRDA and the State and concerned district implementing body, hereafter referred to as “participating states” or “participating districts”, that will receive Bank financing under the program. These States are Himachal Pradesh, Jharkhand, Rajasthan and Uttar Pradesh. The SOM introduces additional requirements above and beyond the normal PMGSY requirements necessary to:
(i)meet the provisions of the Bank’s fiduciary and safeguard policies; and
(ii)introduce the concept of a total management approach to the core rural road network in project areas.
Description of the Bank funded project
1.5The project development objective is to achieve broader and more sustainable access to markets and social services by the rural population in project areas. The indicators that will be used to measure performance in achieving the development objective are:
(i)% of eligible habitations in project areas with all weather access to social services and markets;
(ii)% of through routes of the core rural road network in project areas in fair or better condition; and
(iii)level of user satisfaction with rural road network in project areas.
1.6The project has three components:
(i)new construction and upgradation of rural roads, including independent technical review services of design and supervision;
(ii)periodic and routine maintenance of the core rural road network in any district that is receiving funds from the Bank to be financed entirely by participating states; and
(iii)technical assistance services and goods to (a) state and local government to enhance the management and financing of rural roads and (b) MORD/NRRDA to enhance program management and monitoring and evaluation of the PMGSY.
1.7To focus resources, Bank funding is to be limited to four states that are amongst the worst ten connected states in the country and to some or all of the least connected 60% of districts within those states. The conditions for a state to be eligible for Bank funding are given in Annex 1 of the Project Appraisal Document. The Bank will initially provide $400 million and may, at the request of the GOI and subject to satisfactory performance under the first loan/credit, provide further funding to the program.
Changes to the Operations Manual and the Supplemental Operations Manual
1.8 The MORD shall inform the Bank of any changes made to the Operational Manual, (i) at least 15 days before issuing the change for any revision that has a substantive impact on the running of the program and (ii) within 15 days of issuing the change for any other revision. Either the MORD, one or more participating states or Bank may propose in writing any change to the provisions of the SOM, providing in their written proposal as necessary any revised language for the SOM. Such change shall only take effect on written endorsement of both the MORD and Bank and after all the participating states have been given at least 15 days to respond to the proposal.
2.NEW CONSTRUCTION AND UPGRADING COMPONENT
Criteria for allocation of Bank funds
2.1 Once the Core Network is prepared, participating states shall allocate funds between districts on the basis of investment need in accordance with prescribed guidelines under the PMGSY or as otherwise agreed between the State and MORD.
2.2Bank financing will be divided between states in two phases, a fixed phase and a performance based phase. The fixed phase shall be 70 per cent of the total credit/loan amount, and will be allocated among the participating states in the same proportion as made available in any year by the MORD in respect of GOI funds. The fixed phase allocated to each state will be divided into 2 or 3 tranches of procurement based on the state’s implementing capacity.
2.3The performance based phase shall represent 30% of the loan/credit amount available for participating states and shall be divided between the states according to the achievement of states against the following indicator:
- Actual maintenance expenditure in the previous fiscal year as % of requirement of core network in the participating state.
During negotiations, each state shall agree with the Bank and MORD, the target level to be achieved for this indicator and this shall be recorded in the Minutes of Negotiations. Performance against the indicator can take three values:
- under par
- par
- above par
2.4Those states achieving a score at par or above par during the fixed phase will be entitled to (i) at least their full allocation as if it were a fixed phase and (ii) a portion of funds not made available to states who fail to deliver performance at par. Any state achieving a score below par will receive only a portion of the funds it would have otherwise received under the fixed phase allocation criteria. The performance based phase shall be procured in one or two tranches as appropriate.
Core network
2.5A Core Network is the network of roads that is essential to provide basic access to each habitation in any district. Basic access is defined as single all-weather road connectivity to each habitation. The identification of the Core Network shall be done after examining the suggestions/proposals received from elected representatives, Panchayats and local beneficiaries. The Core Network shall be prepared after data is collected on all the habitations and an inventory of rural roads is prepared (as per forms prescribed by the NRRDA).
2.6The data on the Core Network shall be computerized in the format prescribed by the NRRDA. The computerization should be complete by December 31, 2005. The Core Network shall be updated as and when any of the data changes, and shall incorporate the road condition data which shall include a Pavement Condition Index (PCI) as defined under the program guidelines. The Core Network shall be reviewed by the Technical Examiner consultant.
Selection of works
2.7The annual selection of works for Bank funding is to be undertaken simultaneously with the selection of works for GOI funding and is to follow the same procedure, including application of the Core Network and Comprehensive New Connectivity Priority List (CNCPL) approach, laid down in applicable guidelines and instructions for the PMGSY as amended from time to time. Implementing agencies are required by program guidelines to seek approval of the proposed list of sub-projects to be taken up in the following year from the State-level Standing Committee as well as the MoRD. For those projects proposed for Bank funding, the implementing agency shall, simultaneously to the submission to the State-level Standing Committee, submit the list of proposed projects to the Bank. The list shall indicate if any statutory clearance is required on a particular road and, if so, the status of the clearance process. Along with this list, the implementing agency shall inform the Bank of the total amount per district of non Bank funded projects being sought from GoI. The state implementing agency shall thereafter inform the Bank of the total amount of proposals cleared by the State-level Standing Committee.
Preparation and Review of Detailed Project Reports (DPRs)
2.8The Detailed Project Reports (DPRs) for new construction and upgradation works to be financed by the Bank shall be prepared on the basis of existing or future guidelines that have or may be issued by the NRRDA for defining the procedures for reconnaissance surveys, soil and material investigations, traffic surveys, detailed engineering surveys, preparation of drawings and formats for DPRs. The DPRs shall incorporate a set of specifications for Rural Road and Bridge Works, and Analysis of Rates based on Standard Data Book. The designs shall be prepared on the basis of IRC Special Publication 20, as revised from time to time. In particular, implementing agencies shall be responsible to ensure that designs are cost effective and promote the use of local materials/ gravels wherever most suitable.
2.9State implementing agencies shall apply the provisions of the Environmental and Social Management Framework (ESMF) and Consultation Framework, dated July 2004, and shall ensure that such provisions are properly integrated into the planning and design of each sub-project to help mitigate adverse impacts, enhance positive impacts and comply with the Bank’s policies and GOI regulatory requirements. Provisions of the Environmental Code of Practice (ECOP) relevant to the sub-project planning and design stages shall be adhered to by the implementing agencies. Participating states shall be responsible for making adequate budgetary provision for any necessary remedial social or environmental measures identified in the planning/design process. When forwarding the DPRs to the State Technical Agencies for review, the concerned head of the PIU shall give an undertaking in writing, using the format attached in Annex 1, that all sub-projects submitted for approval, conform with the provisions of the ESMF. A copy of such undertaking shall be furnished to the Bank.
2.10These DPRs shall be scrutinized by either the State Technical Agencies (STAs) and/or Technical Examiner. These agencies shall ensure that the relevant design guidelines and provisions of the ESMF have been properly applied by the implementing agencies. In particular, implementing agencies shall be responsible to ensure that designs are cost-effective and promote the use of local materials/gravels wherever most suitable. Once satisfied, the STAs shall make the necessary certification on the DPRs based on which the State shall make its proposals to the NRRDA on the prescribed formats. The NRRDA shall scrutinise the proposals for the adherence to the guidelines and cause them to be placed before MoRD’s Empowered Committee who may recommend clearance of the proposals.
2.11If private firms are to be used to undertake any element of DPR preparation, the participating state will provide the Bank an opportunity to advise them on the content of the terms of reference of that service. The Bank may consider a reasonable request made by a participating state through the NRRDA for the Bank to finance such survey and design services on pattern approved under the PMGSY. If such services are to reimbursed by the Bank, the relevant procurement procedures are to be applied dependant on the value of the proposed service.
2.12For those projects proposed for Bank funding, the implementing agency shall, along with submission to the NRRDA simultaneously submit the list of proposed projects to the Bank for its no objection. The list shall indicate if any statutory clearance is required on a particular road and, if so, the status of the clearance process. Along with this list, the implementing agency shall inform the Bank of the total amount per district of non Bank funded projects being sought from GOI. The state implementing agency shall thereafter inform the Bank of the total amount of proposals cleared by the Empowered Committee.
Procurement of works
2.13All NCB contracts shall be procured in accordance with the provisions of Paragraphs 3.3 and 3.4 of the Guidelines for Procurement under IBRD Loans and IDA Credits published by the Bank as revised [the Guidelines]. Works will be procured in packages ranging from US$200,000 to US$1 million. All NCB works contracts to be financed from the proceeds of the Credit/Loan shall follow the following procedures:
(i)Only the model bidding documents for NCB agreed with the GOI Task Force, and as amended for this project only, shall be used for bidding;
(ii)Invitations to bid shall be advertised in at least one widely circulated national daily newspaper, at least 30 days prior to the deadline for the submission of bids;
(iii)No special preference will be accorded to any bidder either for price or for other terms and conditions when competing with foreign bidders, state-owned enterprises, small-scale enterprises or enterprises from any given State;
(iv)Except with the prior concurrence of the Bank, there shall be no negotiation of price with the bidders, even with the lowest evaluated bidder;
(v)Extension of bid validity shall not be allowed without the prior concurrence of the Bank (i) for the first request for extension if it is longer than eight weeks; and (ii) for all subsequent requests for extension irrespective of the period (such concurrence will be considered by Bank only in cases of Force Majeure and circumstances beyond the control of the Purchaser/Employer);
(vi)Re-bidding shall not be carried out without the prior concurrence of the Bank and the system of rejecting bids outside a pre-determined margin or bracket of prices shall not be used in the project;
(vii)Rate contracts entered into by Directorate General of Supplies & Disposals, will not be acceptable as a substitute for NCB procedures. Such contracts will be acceptable, however, for any procurement under National Shopping procedures; and
(viii)Two or three envelope system will not be used.
2.14The Bank shall review up to 15%, randomly chosen by the Bank, of the drafting Bid Documents from each participating state in any particular tranche of works. Bids for the whole tranche of Bank financed works shall not be invited until the Bank’s no objection is given.
2.15Tender Evaluation Committees consisting of at least 3 qualified persons shall be formed to technically evaluate the bids received. At least one of the members of the Committee shall be from outside the Zone/ Circle concerned with the project.
Implementation and quality monitoring of the works
2.16The State-level Agency designated as the Executing Agency for the program shall have a Program Implementation Unit (PIU) in the District, which shall have an officer of the rank of at least Executive Engineer as its head. In areas other than Hill States, the road works shall be completed within a period of 12 months, or lesser time if stipulated under the program. In the Hill States, works shall be completed within two working seasons (up to 24 months), or lesser time if stipulated under the program. In respect of Himachal Pradesh, if works are planned to be executed in two stages, the time period of two working seasons shall apply separately in respect of each stage. During execution, the Engineer shall maintain all contractual and technical records in the forms prescribed by the NRRDA/MoRD.