Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry: India
Project: Dedicated Freight Corridor Construction Project (Phase 2)
Loan Agreement: July 26, 2010
Loan Amount: 1,616 million Yen
Borrower: The President of India
2. Background and Necessity of the Project(1) Current State and Issues of the Railway Sector in India
The volume of freight traffic in India is increasing at an annual rate of 15%, but existing
carrying capacity of rail lines is nearing saturation limits. Particular concern is the freighttransport route along the “Golden Quadrilateral”, which connects Delhi, the country’s capitaland largest consumption-production base, Mumbai and Kolkata, the eastern and westerngateway ports of India, and Chennai in the southeast. The volume of freight traffic along theGolden Quadrilateral already accounts for roughly 65% of total freight volume in India. On theother hand, container cargoe and the traffic volume of agricultural products andmining/industrial resources are expected to further increase in the future. For this reason, thecountry seeks to strengthen its transportation capacity through both increasing carrying capacity
and introducing high-speed transport services.
(2) Development Policies for the Railway Sector in India and the Priority of the Project
In its 11th Five-Year Plan (April 2007-March 2012), the Government of India
acknowledges the need to expand routes and introduce high-speed trains in order to facilitate
mass freight transportation along trunk routes. In particular, the Plan emphasizes the early
development of dedicated freight rail lines, and the upgrading of passenger/freight trains
along the routes between Delhi and Mumbai, and between Ludhiana, Delhi and Kolkata.
(3) Japan and JICA’s Policy and Operations in the Railway Sector in India
The “Promotion of Economic Growth” is one of the prioritized areas in the Japan’s Country
Assistance Program for India by the Government of Japan. Accordingly, JICA has set the“Promotion of Sustainable Growth through the Development Assistance to the Infrastructure”
as a prioritized area. The Project is categorized under the “Improvement of Transport Networks”
program within the said priority area, therefore the assistance for the Project is consistent withJapan and JICA’s policy. And as part of this, JICA intends to support the development of trunk
railways, roads, and other infrastructure mainly in India’s six major metropolitan areas, aswell as in special economic zones, economic corridors, and other industrial clusters locatedalong the Delhi-Mumbai industrial artery, with the aim of promoting regional economic
development, efficient distribution, and foreign capital, and ultimately contributing to
expanding investment in India. The project, therefore, fundamentally conforms to JICA’s

assistance policy. Among Japanese ODA Loans that have been granted to India, 22 projects
worth 634.3 billion Yen have been directed to India’s railway sector to date (as of May 2010).
(4) Other Donors’ Activity
The World Bank is expected to offer support to the eastern corridor of the dedicated freightcorridor, and is currently in the process of forming a project for this. The Asian Development
Bank (ADB) is implementing support to the rail transport sector mainly through supporting theorganizational reforms of Indian Railways, etc.
(5) Necessity of the Project
Forecasts for freight transport demand expect to see a rapid increase in container traffic
between Delhi and Mumbai, particularly between the international port on the western coastand major inland cities. Current rail lines, even with the realization of approved improvement
plans by the Ministry of Railway, however, are expected to reach their existing capacity
sometime between 2010 and 2012 in the both corridors. With increasing forecasted demand,the demand for the eastern corridor is expected to be 1.8 times of it carrying capacity, whilethat for the western corridor being 2.3 times. Therefore, JICA’s assistance for the Project,which aims to increase freight transport capacity and realize efficient freight traffic byconstructing dedicated freight rail lines and introducing high-speed, high-capacity electric
locomotives, is highly necessary and relevant.
3. Project Description(1) Project Objective(s)The objective of the Project is to cope with the increase of freight transport demand in India
by constructing new dedicated freight railway system, thereby promoting comprehensive
regional economic development along the freight corridor, through improvement andmodernization of inter-modal logistic system handling considerable freight traffic and poised formassive growth.
(2) Project Site/Target Area
States of Uttar Pradesh, Haryana, Gujarat, and Maharashtra(3) Project Component(s)The project will construct new freight lines, install automated signal and communication
systems, and introduce locomotives capable of high-capacity, high-speed transportation oversome 552 kilometers between Dadri in Uttar Pradesh State and Rewari in Haryana State(127km), and between Vadodara in Gujarat State and Mumbai (JNPT) in Maharashtra State(425km). The Japanese ODA Loan will be used for the following aspects.
1) Construction work
2) Procurement of locomotives
3) Social development
4) Consulting services

The ODA loan will be allocated to the engineering service on review of the basic
design and support for procurement before the commencement of construction work
related to the Project.

(4) Estimated Project Cost (Loan Amount)
1,857 million Yen (Loan Amount: 1,616 million Yen)
(5) Schedule
Planned for implementation between July 2010 and September 2012 (total 27 months).
The project will be completed at the end of all procurement contracts (September 2012).
(6) Project Implementation Structure1) Borrower: The President of India
2) Executing Agency: Indian Ministry of Railways (MOR), Dedicated Freight Corridor
Corporation of India Limited (DFCCIL)
3) Operation and Maintenance System: DFCCIL (operation and maintenance of rails,signals, communications systems, etc.). Indian Railways (implementation of operation of
freight transportation, including the maintenance of locomotives).
(7) Environmental and Social Consideration/Poverty Reduction/Social Development
1) Environmental and Social Consideration(i) Category: B(ii) Reason for Categorization: This project falls under the category of engineering
service loan and the following project will not belong to category C under the “JapanBank for International Cooperation Guidelines for Confirmation of Environmental andSocial Consideration” (Established in April 2002). This project is therefore classified asCategory B.
(iii) Environmental Permit: The Environment Impact Assessment (EIA) report for thisproject will be prepared with assistance of JICA Preparatory Survey based on thealignment finalized by the Engineering Service Loan for the Phase 1 of the Project,
though it is not required for the Project in India’s legal system.
(iv) Anti-Pollution Measures: A Environmental Management Plan during construction
and operation will be prepared by the EIA.
(v) Natural Environment: An expected impact will be reviewed by EIA and it mitigation
plan will be proposed by the EIA.
(vi) Social Environment: This project is expected to require acquisition of land andrelocation. Required scale of land acquisition and number of relocated households
will be identified by a baseline survey under the EIA. After public consultation anddiscussions with the affected people by land acquisition and relocation,compensation at the repurchase price and necessary support for recovery oflivelihoods support will be conducted based on a Resettlement and Rehabilitation
Plan approved by the MOR.
(vii) Other/Monitoring: In the EIA, an Environmental Monitoring Plan during theconstruction and operation will be prepared. A review of the progress of landacquisition and resettlement together with a monitoring plan after the livelihoods
recovery will be proposed in the Resettlement and Rehabilitation Plan,
2) Promotion of Poverty Reduction:
None3) Promotion of Social Development（e.g. Gender Perspective, Measure for Infectious
Diseases Including HIV/AIDS, Participatory Development, Consideration for the Personwith Disability etc.）:
This project involves large-scale construction, thus activities will be implemented tosupport the prevention of HIV infection among laborers.
(8) Collaboration with Other Donors:
None(9) Other Important Issues:None
4. Targeted Outcomes(1) Performance indicators (Operation and Effect Indicator)
To be established at the time of project implementation(2) Internal Rate of Return
To be calculated at the time of project implementation

5. External Factors and Risk Control
Changes in freight transport demand
6. Lessons Learned from Past Projects
Experiences from similar projects implemented in the past indicate that land acquisition isvital to the smooth implementation of projects in the railway sector, and that adequate
follow-up must be made during implementation of land acquisition and involuntary
resettlement. As this project involves the acquisition of a considerable area of land, theexecuting agency will be requested to provide regular reports on the progress of involuntary
resettlement.
7. Plan for Future Evaluation(1) Indicators to be Used
To be established at the time of project implementation(2) Timing
To be decided at the time of project implementation(End)