|1. Project Data:
ICR Review Date Posted:
|Rural Roads Project
Project Costs(US $M)
Loan/Credit (US $M)
Cofinancing (US $M)
Board Approval Date
|Roads and highways (95%), Sub-national government administration (5%)|
|Rural services and infrastructure (100% - P)|
||ICR Review Coordinator:
|2. Project Objectives and Components:|
a. Objectives:To achieve broader and more sustainable access to markets and social services in Participating Districts (PAD p. 5 and Loan Agreement Schedule 2, p.19)
b. Were the project objectives/key associated outcome targets revised during implementation?
c. Components:1. New Connection and Upgrading of Core Rural Road Networks (appraisal estimate US$430.9
million, actual cost not available).
This includes new construction and upgrading of 9,900 km of the core rural road network in four states (Himachal Pradesh, Jharkhand, Rajasthan, and Uttar Pradesh) to provide all-weather road access to habitations in identified project districts.
This component would also finance Consultants in each state to undertake independent technical examination of Bank funded works and also to verify: (i) proper application of environmental and social and economic screening procedures for the selection of rural road sub-projects; (ii) detailed design are in compliance with agreed technical standards as well as stipulated environmental and social management measures; (iii) the quality of bidding documents is satisfactory and that procurement is undertaken in conformity with agreed procedures; (iv) compliance of actual works with contract conditions and quality assurance procedures as well as agreed environmental and social management measures; and (v) expenditures under the Credit/Loan have been made for the purpose intended (financial review).
Wherever roads require compensatory afforestation to meet the provisions of any Forest Department clearance, State governments will deposit funds to undertake this afforestation prior to the clearance becoming effective.
2. Periodic and Routine Maintenance of Core Rural Road Network in Project Areas (appraisal estimate US$, financed by State Governments, actual cost not available).
This includes an annual implementation of periodic and routine maintenance program in every district where the Bank is providing additional investment for a total of about 100,000 km roads.
3. Institutional Development (appraisal estimate US$13.56 million, actual cost not available):
This includes institutional development at both national and state level.
(a) Technical assistance and training to Ministry of Rural Development, and the National Quality Monitors to build capacity in various areas, and
(b) Setting up of a poverty impact and rural road user satisfaction monitoring system.
(a) Technical assistance to each state to: (i) develop and establish a simple Road Management System at the headquarters and in district field offices; (ii) prepare annual maintenance programs and support the implementation by the road agency of these programs, including the use of performance based contracting, on the core road network; (iii) recommend and help implement on a pilot basis a framework for transferring ownership of non-core rural roads to Panchayat Raj Institutions; and (iv) transfer skills and procedures to an adequate number of staff in the road agency to sustain the use of the Road Management System and continuing implementation of maintenance.
(b) Procurement by each State of material and quality control testing equipment, IT and associated office equipment - for use by the implementing agencies.
(c) Staff training within the main rural road agency plus the local contracting industry.
4. Incremental Operting Cost (appraisal estimate US$4.4 million, financed by State Governments, actual cost not available).
d. Comments on Project Cost, Financing, Borrower Contribution, and DatesProject Cost: The appraisal estimate was US$685.9 million, but the ICR reports (p. 28) these appraisal costs as US$409.87 million. The ICR does not provide actual project cost. Actual projects costs had to be taken from the project portal, which amounted to US$708.6. Instead of total actual project cost it provides figures for the Bank's contribution only.
Financing: At appraisal IDA committed US$300.0 million, actual amount was US$311.7 million. IBRD commitment at appraisal was US$100.0 million, actual amount was US$99.5. The Credit and Loan were fully disbursed and the differences in appraisal and actual amounts are due to exchange rate fluctuations.
Borrower Contribution: The appraisal estimate was US$285.9 million. The ICR does not provide information about the actual borrower counterpart contribution. According to the Project Portal, the actual Borrower Contribution is US$309.06 million.
Date: The closing date of the project was extended by two years from March 31, 2010 to March 31, 2012 to: (i) consolidate the institutional development initiatives; (ii) complete the ongoing and additional rural roads works reallocated to Uttar Pradesh (US$27 million) and Rajasthan (US$9 million); and (iii) undertake further capacity building activities planned for rural roads agencies.
|3. Relevance of Objectives & Design:|
a. Relevance of Objectives:Rated substantial.
The project objectives remained consistent with the most recent Country Assistance Strategy for the period FY 09-12 which aimed at achieving rapid, inclusive growth, ensuring that development is sustainable, and increasing the effectiveness of service delivery. To achieve rapid, inclusive growth the Strategy aimed to assist in removing infrastructure and skills constraints to growth in both urban and rural areas.
Exclusion has geographic and social dimensions. Of the 300 million people who lived below the official poverty line in 2005, nearly 60% were in the seven so-called "lagging" (or low-income) states- Bihar, Chhattisgarh, Jharkhand, Himachal Pradesh, Orissa, Rajasthan, and Uttar Pradesh. Over 600,000 villages are not connected to a road.
The project objectives were in line with the Government's priority of addressing the problem of poor rural accessibility and improving planning and management of rural roads. The Prime Ministers Rural Road Program (Pradhan Mantri Gram Sadak Yojana, PMGSY) was launched in late 2000 and the project is part of the program. In 2005, PMGSY incorporated the Bharat Nirman targets for road connectivity. These targets are to connect all habitations of more than 1000 people (500 in case of hilly, desert, and tribal areas) by the year 2009 and include the upgrading of 194,000 km of rural roads by the year 2010. This is also reflected in India's Eleventh Five Year Plan (2007-2012).
b. Relevance of Design:Rated substantial.
The project objectives were clearly stated. There was a logical link between project objectives and project activities. The project design was based on the Comprehensive New-Connectivity Priority List framework and also extensive public participation. The project included new construction and upgrading of core rural network in four states which had poor connectivity, There is a strong linkage that new and improved rural roads would result in sustainable access to markets and social services.
|4. Achievement of Objectives (Efficacy) :|
Achieve broader and more sustainable access to markets and social services in participating districts: rated modest.
- By project closure the physical works for new construction were completed. About 9625 kms of rural roads that provided better access for 78 participating districts (or 97% of the target of 9,900 kms) were completed.
- The Bank supported institutional development through: (a) the development of a pavement design manual; (b) independent reviews of engineering designs through technical examiners; and (c) the preparation of a rural roads manual by the Ministry of Roads and Development with separate technical specifications for rural roads. However, most of the implementation remained as per conventional designs in all the states, and the use of cost effective optimal designs employing locally available material was inadequate.
- The project provided training in maintenance management systems, quality control, environment management and e-procurement that would help ensure that the access benefits of the project roads continue. The ICR (p. 8) reports that the project's training and capacity building activities have been mainstreamed. Except for Jharkhand, simple maintenance management systems were developed by Rajasthan, Himachal Pradesh, and Uttar Pradesh, and these were used to prepare the annual maintenance plans for their respective states.
The project contributed to increased access to markets and social services due to the construction of roads. Overall, about 93% of eligible habitations were connected compared to the target of 60%. (Note: According to the PAD (p. 12) the Prime Minister's Rural Roads Program (PMGSY) guidelines required preparation of core network plans, which ensure one all-weather road connection from each habitation to nearby market centers. The roads under the project will be selected from these core network plans). About 50% of the routes were in good condition in 2012 compared to a target of 43%. Routine maintenance funding is not fully assured raising concern about the extent to which the 'sustainable access' objective will be achieved (see Section 7).
Table: Percentage of eligible habitations with all-weather access to social services and markets.
Eligible habitations are defined as villages with more than 1000 people (500 in case of hilly, desert, and tribal areas).
|Uttar Pradesh |
|Himachal Pradesh |
Note: The actual figures are at state level and include domestic (PMGSY) funds. The ICR does not provide figures for the roads funded by the project.
To evaluate the potential economic and social benefits of the program, the Bank undertook a study to estimate the economic and social benefits of providing all weather access roads to different villages in the four selected States: Uttar Pradesh, Rajasthan, Himachal Pradesh, and Jharkhand. The baseline survey (date not provided in the ICR) covered 11490 households within 750 habitations across 33 districts. The road user satisfaction was assessed on the basis of four major factors: reliability, transit time, connectivity, and user- friendliness and assessed on three levels viz. “low”, “medium” and “High”. Overall the satisfaction level was found high (ICR p.iii) (The ICR does not provide specific numbers). According to the ICR (ICR p. 20), a methodology for undertaking poverty impact and road user satisfaction surveys has been developed by the Ministry of Rural Development for the Prime Minister’s Rural Roads program in various states in addition to the participating states. The Bank contributed to this methodology by participating in various meetings and providing comments.
The ICR lists the following findings from the survey:
- increase in child vaccination by 8% due to improved access to health centers;
- increase in number of female patients visiting private doctors by 8%;
- increase in population in income category of "more than Rupees 10,000 per month" by 3.46%;
- increase in area cultivated by 12%;
- reduction in travel time.
There is an attribution issue i.e. the improvements listed above are likely but cannot be completely linked to improved roads.
The ex-post Economic Rate of Return (ERR) was 15%, below the appraisal estimates of 19% (see table below for th four states). This was because of increased construction cost and time over run. The ERR calculation assumed 12% cost of capital and reinvestment rate. Cost escalation was very high in Himachal Pradesh (34.5%) followed by Uttar Pradesh (7.6%). The ERR analysis at appraisal and ICR preparation does not include counterpart financing (ICR p. 18).
The project closed after a two years delay due the the following reasons: (i) to consolidate the institutional development initiatives; (ii) to complete the ongoing and additional rural roads works reallocated to Uttar Pradesh (US$27 million) and Rajasthan (US$9 million); and (iii) to undertake further capacity building activities planned for rural roads agencies.
Completed Road Length (Km)
The ICR does not provide the total actual project cost which are available in the project portal. No other measure of efficiency is discussed in the ICR.
Overall, project efficiency is rated modest.
a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:
* Refers to percent of total project cost for which ERR/FRR was calculated