Ex-Ante Evaluation (for Japanese ODA Loan)
South Asia Division 1, South Asia Department
Japan International Cooperation Agency
1. Name of the ProjectCounty: India
Project: Chennai Metro Project (Phase 2) (II)Loan Agreement: March 31, 2022
2. Background and Necessity of the Project(1) Current State and Issues of the Railway Sector in India
India has been seeing rapid urbanization in recent years. While the roadtransportation demand has been increasing more and more with the rapidly increasing
number of registered automobiles (from approximately 55 million in 2001 toapproximately 230 million in 2016, Statistical Yearbook of India 2018), there has been
little progress in the development of public transportation infrastructure. In eight major
cities, Delhi, Mumbai, Calcutta, Chennai, Bengaluru, Hyderabad, Ahmedabad, andPune, traffic congestion from the ever-growing traffic demand has become a serious
problem. Economic losses and health problems caused mainly by air pollution andnoise from automobiles are becoming more and more serious.
In response to the above-mentioned issues, the Government of India has developedthe "Metro Rail Policy" (latest version updated in 2017) and has declared its policy of
promoting the development of public transportation systems, including metros,railways, and buses, to cope with the recent surge in transportation demand andalleviate traffic congestion, both of which have been brought about by recent economic
growth, and enhance safety and energy efficiency. In large cities, the construction of
metros is recommended because they enable mass transportation without straining
existing road capacity.
The population of the Chennai Metropolitan Area in 2011 was 8.7 million (2011
National Census of India), the fourth largest in India. The population density of Chennaicity is approximately 26,000 people/km 2, making it one of the most densely populated
cities in India (2011 National Census of India). Following the population increase, thenumber of registered automobiles has increased significantly (from approximately 1.26
million in 2001 to approximately 4.94 million in 2016, Statistical Yearbook of India 2018).
As a consequence, the average vehicle speed in the city is approximately 17 km/h asof 2015, and traffic congestion is becoming more and more serious (ranked seventh
among 278 Asian cities as of 2019, "Asian Development Outlook 2019 Update,"published by the Asian Development Bank). As traffic congestion becomes anincreasingly serious problem, economic losses due to traffic congestion and pollution
problems caused by automobiles, such as air pollution and noise, have become anissue like other major cities in India. Because of these circumstances, in thecomprehensive urban traffic survey formulated by the Chennai Metropolitan
Development Authority for sustainable and efficient urban development in the Chennai

Metropolitan Area, the Chennai Metro Project has been positioned as a priority projectin this area.
Japan has offered ODA Loans for the Chennai Metro Project (Phase 1) (hereinafter,"Phase 1 Project") over the course of the five tranches and has supported theconstruction of two lines of the mass rapid transit system, with a total distance ofapproximately 53 km, in the central area of the Chennai city. However, after the startof the Phase 1 Project, urbanization has reached to the outskirts of the region, leading
to increased demand for new urban transportation mainly in the peripheries of theChennai Metropolitan Area. Based on these circumstances, the Tamil Nadu state
government planned the construction of three new lines, lines 3 to 5, as the second
development plan for the Chennai Metro Project so that they can cover the outer loopof the lines constructed in the Phase 1 Project. Among these new lines, line 3 (betweenthe Madhavaram Milk Colony and Sholinganallur stations) and line 5 (between theMadhavaram Milk Colony and Chennai Mofussil Bus Terminus (CMBT) stations) will
be constructed, as JICA's project, in Phase 2 (hereinafter, the "Project"), as thedemand for these sections is high and their construction is a pressing concern mainly
in terms of connection to the depot, convenience of transfer to the lines constructed inthe Phase 1 Project and other public transportation systems, and profitability. TheProject aims to meet the increasing demand for urban transportation in the Chennai
Metropolitan Area, which is consistent with the policies of the Government of India andTamil Nadu state government.
(2) Japan's and JICA's Railway Sector Cooperation Policy and the Positioning of thisProjectJapan's Country Assistance Policy for India (March 2016) indicates "strengthening
connectivity" as one of the priority areas, which includes improvements totransportation infrastructure. It also states that to remove infrastructure-based
bottlenecks in investment and growth, improvements to rail systems (including highspeed railways and metro) are vital to strengthening connectivity within major industrial
cities, as well as connectivity between various economic zones and regions in India.
Also, "improvement of industrial competitiveness" through urban infrastructuredevelopment is also indicated as a priority area, promoting the development oftransportation networks in metropolitan areas by constructing metros for the purposeof alleviating traffic congestion and improving the efficiency of passenger freighttransportation and the urban environment. In addition, the JICA Country Analysis Paperfor India (March 2018) concluded that there is a need to support the development ofinfrastructure, including trunk-line railways, urban railways, roads, and harbors with afocus on industrial clusters such as the Special Economic Zones and Economic
Corridors of India's 8 major urban centers, the Delhi-Mumbai Industrial Corridor andChennai-Bengaluru Industrial Corridor. It also states the need to promote cooperation
to tackle environmental and climate change issues as a way to support sustainableand comprehensive growth. The Project is consistent with these policies and analyses.

Moreover, the Project is deemed to contribute to Goal 8 (Promote sustained,inclusive and sustainable economic growth, full and productive employment anddecent work for all), 9 (Build resilient infrastructure, promote inclusive and sustainableindustrialization and foster innovation), Goal 11 (Make cities and human settlements
inclusive, safe, resilient and sustainable) and Goal 13 (Take urgent action to combat
climate change and its impacts) of the Sustainable Development Goals, suggesting astrong need to implement the Project.
(3) Other Donors' Activities
The Government of India was funded by the World Bank for its Mumbai Urban
Transport Project (approved in 2002 and 2010, 972 million US dollars in total) andEastern Dedicated Freight Corridor Project (approved in 2011, 2014, and 2015, 2,725
million US dollars). It was also funded by the Asian Development Bank (hereinafter,the "ADB") for Jaipur Metro (approved in 2014, 176 million US dollars) and assyndicated loans involving the New Development Bank (hereinafter, the "NDB") for
Mumbai Metro (lines 2A, 2B, and 7, approved in 2019, 926 million US dollars and 260
million US dollars, respectively) and Bengaluru Metro (lines 2A and 2B, approved in
2021, 500 million US dollars). In addition, the Government of India will receive funding
from several donors for this second development plan. Specifically, it will receive
funding from the Asian Infrastructure Investment Bank (hereinafter, the "AIIB") for line
4 and line 5 between the CMBT and Sholinganallur, and from the NDB only for line 4.
None of these fundings cover this Project, which is implemented by JICA.
3. Project Description(1) Project ObjectiveThe objective of the Project is to cope with the increase of traffic demand in theChennai Metropolitan Area, Tamil Nadu state, southern India, by expanding a mass
rapid transit system, thereby promoting regional economic development and improving
urban environment improvement, through relief of traffic congestion and decrease ofpollution caused by increasing motor vehicles.
(2) Project Site/Target Area
Chennai Metropolitan Area, Tamil Nadu state (Population: approximately 8.7 million(2011))(3) Project Components
The Japanese ODA Loan covers the following areas.
 Line 3 (between the Madhavaram Milk Colony and Sholinganallur stations):
Approx. 35 km/40 stations(Elevated sections: Approx. 9 km/10 stations, Underground sections
Approx. 26 km/30 stations) Line 5 (between the Madhavaram Milk Colony and CMBT stations):
Approx. 16 km/17 stations(Elevated sections: Approx. 11 km/11 stations, Underground sections

Approx. 5 km/6 stations)
The Japanese ODA Loan covers the following components (except for
telecommunication work and platform screen doors installed in undergroundstations in 5) and 6), and 9)).
1)
Civil engineering*6 underground sections among these 12 sections covered by the Japanese
ODA Loan (8 underground sections and 4 elevated and abovegroundsections)2)Electricity and machinery (air conditioning equipment in stations, tunnel
ventilation equipment, etc.)
3)
Rails (rail and turnout installation, etc.)
4)Power equipment (overhead wiring and substation installation, etc.)
5)
Signaling and telecommunication
6)
Automated fare collection system and platform screen doors
7)
Rolling stock (210 cars)*Only this component is not limited to the above Japanese ODA Loan
coverage areas.
8)
Depot, etc.
9)Development of station buildings, areas around the stations, transport hubs,etc.
10) Consulting services (basic/detailed design, detailed design review, bidding
assistance, construction supervision, support for environmental and social
considerations, etc.)(4) Estimated Project Cost
591,888 million Yen (Japanese ODA Loan (for the tranche II): 73,000 million Yen)
(5) Schedule
December 2018 to August 2028 (117 months in total). Project completion is definedas the service commencement of all facilities (June 2027).
(6) Project Implementation Structure1) Borrower: President of India
2) Guarantor: None
3) Executing Agency: Chennai Metro Rail Limited (CMRL)
4) Operation and Maintenance Agency: Same as 3). Note that CMRL decided tobasically outsource their operation and maintenance except for the core parts ofoperation (operation management and signal equipment and telecommunicationequipment maintenance) and safety measures, and in 2017, started to outsourcethem in the Phase 1 Project. Since the start of outsourcing, no accidents oroperation-related troubles, such as delays, have occurred in the already opened
sections, and the on-time rate is 99% or better. In this Project, the same
framework will be applied for operation and management.

(7) Collaboration and Sharing of Roles with Other Donors
1) Japan's Activity: N/A2) Other Donors' Activity: The executing agency will be fundedby multiple donors under the approval of the Indian central government and state
government. They will receive funding from ADB and AIIB for lines 4 and 5
between the CMBT and Sholinganallur stations, and from NDB for line 4. The
schedule and interface between the funding components from different donors
will be confirmed and coordinated by the executing agency through consultation
with the relevant parties.
(8) Environmental and Social Considerations/Cross-Sectoral Issues/Gender Category
1) Environmental and Social Consideration① Category: A② Reason for Categorization:
This Project falls under the railways sector listed in the "JICA Guidelines forEnvironmental and Social Considerations" (hereinafter, the "JICA Guidelines")(established in April 2010).
③ Environmental Permit:
The Environmental Impact Assessment (EIA) report for the Project wasapproved in November 2017 by CMRL although the creation of the report was
not required under Indian law.
④ Anti-Pollution Measures:
During the works, water sprinkling, dust sheets, and wastewater treatment
plants are used to address air and water pollution due to excavation andoperation of construction machinery. As for waste, part of the large amount ofexcavated soil due to tunnel works will be reused as fill for the construction of
the depot and stations, and the rest of the soil will be disposed of in an
appropriate manner at a designated disposal site. Tunnel works will take place
at locations where the ground is relatively firm, and a shielded construction
method will be adopted to prevent soil loosening and groundwater inflow.
Therefore, no significant negative impact on the ground from subsidence isexpected. When in operation, running noise will be minimized by installingsound barriers and adopting a two-layer rubber pad structure. Vibration ofunderground and elevated portions will be reduced through periodic track
maintenance and compliance with speed limits.
⑤ Natural Environment:
The target area is not situated in or near any vulnerable areas such as nationalparks. Although 934 trees will be cut down due to the construction of the depotand tracks, replacement trees will be planted by CMRL.
⑥ Social Environment:
The Project requires the resettlement of 46 households, acquisition of 73 ha ofland, and relocation of the economic activities of 182 households. Procedures

for resettlement and land acquisition are underway based on the Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation andResettlement Act in India, resettlement procedures of the Tamil Nadu state
government, and the resettlement action plan prepared in accordance with JICA
Guidelines. Approximately 93% of the land acquisition has been completed asof December 2021 and it will be completed by May 2022. Matters such as
project overview, environmental and social impact, and compensation policies
were explained to affected residents through a census survey, with personal
visits and consultations with residents. No opposition was raised from theresidents with regard to the implementation of the Project.
⑦ Other/Monitoring:
During the works, the contractor, under the supervision of CMRL, will monitor
air quality, water quality, noise and vibration, waste, vegetation, and other issues.
After service commencement, CMRL will monitor noise, vibration, vegetation,and other issues. It will also monitor resettlement, land acquisition, and recoveryof livelihood, which will be reported to JICA.
2) Cross-Sectoral Issues(Climate change) By constructing a mass rapid transit system, the Project aims toalleviate traffic congestion caused by automobile use, thereby helping
reduce greenhouse gas (GHG) emissions. India's NDCs (NationallyDetermined Contributions) include the utilization of a mass rapid transitsystem as a strategy for traffic congestion alleviation, which isemphasized in the Project. The Project alleviates global warming by
reducing GHG emissions by approximately 80,000 tons of CO2
equivalent per year (estimation for 2029). The above only applies to thisProject plan (line 3 between the Madhavaram Milk Colony andSholinganallur stations and line 5 between the Madhavaram Milk Colonyand CMBT stations).
(Special attention to disabled persons) In accordance with the domestic law of India,
the design of stations and cars takes use by elderly and disabled
persons into consideration (i.e., elevators, escalators, station
announcements, textured paving blocks to guide the blind, wheelchair
spaces).
3) Gender Category■Gender Informed (Significant)(Gender activity integration project)<Details of Activities/Reason for Categorization> In order to ensure safe andcomfortable use of metros by women, the Project includes a number of efforts that
include women-only cars, priority seats for passengers who need assistance, including
women, installation of CCTV cameras in stations and cars, and low-hanging handgrip
straps. In addition, these efforts include ensuring equal pay for men and women atconstruction sites, provision of facilities necessary for female workers, andappointment of women to project management positions. For these reasons, theProject is classified as a "gender activity integration project."(9) Other Important Issues
It is expected that Japanese technologies will be used, for example, in tunnel boringmachines, elevators, escalators, head heat-treated rails, signal systems, automatedfare collection systems, and cars.
4. Target Outcomes(1)
Quantitative Effects
Outcomes (Operation and Effect Indicators)
Indicator

Baseline(Actual value in 2017)

Target (2029)(2 years after projectcompletion)
92.0

Operating rate (%)
n/aRunning distance per day (1,000n/a31.1km)
Running distance of women-onlyn/a10.4
cars per day (1,000 km)
Number of running trains per day
n/a408(per direction)
Volume of transportation per day
n/a11.3(million people•km)
Income from passengers per day
n/a48.7(million rupees)
These targets only apply to this Project plan (line 3 between the Madhavaram Milk
Colony and Sholinganallur stations and line 5 between the Madhavaram Milk Colonyand CMBT stations), which is not on the premise of the completion of line 4.
(2) Qualitative Effects
The qualitative effects of the Project include the reduction of noise levels, reductionof air pollution, improved convenience through the establishment of reliable traveltimes, economic development of the Chennai Metropolitan Area, increased land value
along the lines, and promotion of women's participation in society.
(3) Internal Rate of Return
Based on the assumptions listed below, the economic internal rate of return (EIRR)
for the Project is 14.8%, and the financial internal rate of return (FIRR) is 2.6%.
[EIRR]

Cost: Project cost, operation and maintenance cost (both excluding taxes)
Benefit: Effects of reducing the travel time of metro and road users, the vehicle
maintenance costs of metro and road users, the development costs for roadtraffic infrastructure, the number of road traffic accidents, the environmental
pollutant emissions in road traffic, etc.
Project Life: 40 years

[FIRR]
Cost: Project cost, operation and maintenance cost
Benefit: Passenger revenue, advertisement revenue, and revenue from thedevelopment of stations and areas around the stations
Project Life: 40 years
5. External Factors and Risk Control(1)

Preconditions: None(2)

External Factors: None

6. Lessons Learned from Past Projects
Based on the ex-post evaluation results of the Japanese ODA Loan Project for India,"Delhi Mass Rapid Transport System Projects (I) - (VI)," it should be checked whether
different public transportation systems end up competing with one another. They
should not compete, but constitute a single urban transportation system. If deemed
inadequate, they should be encouraged to do so in order to ensure profitability.
In the Phase 1 Project, a plan for a feeder bus service was prepared and submitted
to the Chennai Metropolitan Transport Corporation (MTC), the organization
responsible for the public bus service in Chennai, to increase revenue of the executing
agency. MTC is now operating a bus service based on the plan. Also, in the Phase 1Project, the executing agency signed contracts with private businesses, for example,
for advertisements inside and outside cars and in stations, rental of real estate andinstallation of kiosks and ATMs for the effective use of spaces in and around stations,and parking lot business in front of stations and under the elevated railway tracks inorder to supplement passenger revenue and increase profitability. In this Project, thesame efforts will be made.
7. Evaluation Results
This Project will cope with the increase of traffic demand in the Chennai Metropolitan
Area by expanding a mass rapid transit system and is thus judged to be consistent
with the Government of India's policies on development and solving issues, as well asJapan and JICA's policies and analyses on cooperation.
Moreover, given that the Project is deemed to contribute to Goal 8 (Promote sustained,inclusive and sustainable economic growth, full and productive employment anddecent work for all), Goal 9 (Build resilient infrastructure, promote inclusive andsustainable industrialization and foster innovation), Goal 11 (Make cities and humansettlements inclusive, safe, resilient and sustainable) and Goal 13 (Take urgent action
to combat climate change and its impacts) of the Sustainable Development Goals, theneed for JICA to support the implementation of the Project is high.
8. Plan for Future Evaluation(1)

Indicators to be Used

As described in 4.(1) to (3).

(2)Future Evaluation Schedule
Ex-post evaluation: 2 years after project completion
End