PROJECT INFORMATION DOCUMENT (PID)
CONCEPT STAGE
Report No.: AB2081
Project Name / Himachal Pradesh State Roads ProjectRegion / SOUTH ASIA
Sector / Roads and highways (100%)
Project ID / P096019
Borrower(s) / GOVERNMENT OF INDIA
Implementing Agency / Himachal Pradesh Road & Infrastructure Development Corporation Ltd.
Mr. BB Kalra, Superintending Engineer
New Himrus Building ,Circular Road
Himachal Pradesh
India
Tel: 0177 280 8118 Fax: 0177 265 4968
Environment Category / [X] A [ ] B [ ] C [ ] FI [ ] TBD (to be determined)
Date PID Prepared / January 16, 2006
Estimated Date of Appraisal Authorization / January 2, 2007
Estimated Date of Board Approval / March 29, 2007
1. Key development issues and rationale for Bank involvement
Himachal Pradesh is considered one of the most dynamic and peaceful hill states. It was granted full statehood in 1971, starting out with a weak economic and institutional base. However, political stability and the pursuit of sensible policies have resulted in recent growth rates similar to the country average, low levels of recorded poverty, and notable success in human development. Half of the population of six million lives in three western districts and there are considerable disparities in access to services across the state. In many areas, the harsh climate causes seasonal isolation and much of the state is prone to natural disasters. Over 90% of the population lives in rural areas and over two thirds of employment is generated in the agricultural sector. The state is well endowed with natural resources – timber, minerals and rivers. However, benefiting from these resources has proved difficult due to the topography, weak infrastructure, legal constraints on timber harvesting, and long distance to markets.
The Government of Himachal Pradesh (GOHP) strategy is designed to raise progressively the standard of living, correct the fiscal imbalance, and to stimulate growth. The latter is to be achieved through: acceleration of hydro-power generation; diversifying agriculture away from subsistence towards cash crops, particularly in horticulture; facilitating industrial investment; and promotion of tourism. An efficient transport system is necessary to allow for this planned growth. With hardly any rail, no waterways and only three small domestic airports, the state relies almost exclusively on its road network for transport. Yet the quality and extent of this road network (2,100 km of state highways, 2,200 km of major district roads and 24,000 km of rural roads) is very inadequate to meet the social and economic needs of the state. Half of all roads are unsurfaced, 90% of the highway network is single lane and less than 50% of villages are deemed connected. The state is already receiving grant funds from Government of India (GOI) through the centrally sponsored Prime Minister’s Rural Road Program (PMGSY) that addresses the village connectivity issue. The World Bank is supporting the PMGSY in the state, amongst others, through the Rural Road Project (RRP) (P077977).
The proposed project would seek to address the quality of the core road network as a complementary investment to the RRP. The main issues that face the GOHP in the sector are the lack of past investment; a poorly funded and implemented maintenance regime; monolithic and traditional management; outdated business practices; absence of a coherent financial strategy; and limited application of modern planning, design and construction methods. Funding for maintenance has historically been a problem though there is some improvement in recent years, expected to pick up further when the 12th Finance Commission (TFC) maintenance grants from GOI become available from next IFY.
The proposed operation supports the program priority of private sector led growth set down in the Bank’s 2004 Country Assistance Strategy (CAS) through providing adequate infrastructure. The CAS states the Bank’s intention to increase its lending to the roads sector with investments at the state level contingent on the concerned state meeting certain guidelines. The GOHP is substantially pursuing the policies and strategies set down as conditions for sector lending in the CAS. No other funding agency is active in the State in the sector. The rationale for Bank involvement is that it can provide: (i) a means for bringing global knowledge to help GOHP improve the institutional, policy, financing and implementation environment in the sector; (ii) a comprehensive perspective in integrating economic, social, and environmental analysis in project design and ensuring the project fits within the state’s fiscal constraints; (iii) convening powers to help facilitate the exchange of information between stakeholders; and (iv) long term financing at competitive interest rates.
2. Proposed objective
The development objective of the proposed project is to provide an improved core road network to road users. The core road network comprises of 2,160 km of state highways (22 links) and 2,240 km of Major District Roads (51 links), as notified by GOHP in July 2005. The proposed project will encompass the following types of road works - upgradation, rehabilitation and maintenance. The indicators that are proposed to measure performance in achieving the development objective would include: (i) condition of road network; (ii) rate of return; (iii) road user satisfaction; (iv) safety of road users; and (v) efficiency of maintenance delivery.
3. Preliminary description
The project is proposed to include two components:
· Upgrading Component (about 75% of the loan). Upgrading works - including widening of formation, realignment, new structures and pavement strengthening - on approximately 800 km of state roads in the core network to either double or intermediate lane standard to be determined after feasibility, including supervision through independent consultants, land acquisition and application of safeguard measures. Six tunnels are also being considered during feasibility and one or more may be included for construction. This component will be implemented in two phases, the first starting in early 2007 and the second within 18 months of board approval.
· Asset management (about 25% of the loan). Civil works on 2000-3,000 km of the core network, to include periodic maintenance (overlays and reseals) and minor rehabilitation (replacement of base materials and structures within the existing formation width), piloting performance based maintenance contracts and accident black spot improvement, all to be supervised by the borrower’s own staff with independent technical examiner. The component will be part funded by the World Bank and part by the GOHP, the exact proportions to be determined. This would be implemented in five annual maintenance programs to start in FY 2006/07 and would be designed to accelerate the removal of the existing backlog to allow the GOHP to reach a steady state of renewals. The component will also include various services and goods to assist the GOHP to better manage and finance the core network. The RRP is already or will shortly be providing substantial inputs towards capacity building in key business processes; so this project will need to make complimentary inputs only.
A Specific Investment Lending (SIL) is proposed to finance the identified investments and achieve targeted changes in the organization, management and financing of the sector. However, the project is planned to display certain characteristics of a sector wide approach (SWAP). There is already considerable harmonization of fiduciary and safeguard procedures under the RRP which will be followed in this project. Further, subject to GOHP agreement, some or all of the GOHP and TFC grants for maintenance may be included as part of the project, such that the majority of the sector expenditure over the project period, at least on the core network, is subject to similar management practices.
The GOHP has decided to use the Road Infrastructure Development Corporation (RIDC) Ltd, established in 1999 under the Companies’ Act as the implementing agency for the project. The GOHP is considering using the RIDC as a vehicle for reform by incrementally entrusting it with management of part of the core network - the project roads would be the first such assets to be entrusted. The RIDC would rely heavily on using PWD staff on deputation, at least initially.
4. Safeguard policies that might apply
The following policies will apply:
· Environmental Assessment
· Involuntary Resettlement
· Indigenous Peoples
The following policies might apply, to be determined during Sectoral Environmental Assessment and Environmental Assessment:
· Forests
· Cultural Property
· Natural Habitats
5. Tentative financing
Source: / ($m.)BORROWER / 40
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT / 150
Total / 190
6. Contact point
Contact: Piers A. Vickers
Title: Sr. Transport. Specialist
Tel: +91 11 4117 7801
Fax: +91 11 4117 7849
Email:
Location: New Delhi, India (IBRD)