Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry: India
Project: Dedicated Freight Corridor Project (Phase I)
Loan Agreement: October 27, 2009
Loan Amount: 2,606 million Yen
Borrower: The President of India
2. Background and Necessity of the Project(1) Current State and Issues of the Transport Sector in India
The volume of freight traffic in India is increasing at an annual rate of 15 percent,but existing freight rail lines are nearing the limits of their transport capacity. Thedevelopment and reinforcement of India’s railways is thus a pressing issue for India tocontinue to grow. Of particular concern is the freight transport route along the “GoldenQuadrant,” which connects Delhi, the country’s capital and largest
consumption-production base, Mumbai and Kolkata, the eastern and westerngateways ports of India, and Chennai in the southeast. The volume of freight traffic
along the Golden Quadrant already accounts for roughly 65% of total freight volume inIndia, but container cargoes and the traffic volume of agricultural products andmining/industrial resources are expected to increase in the future. Therefore, thecountry is seeking to increase the transport capacity of its railways by increasing
carrying capacity, introducing high-speed freight trains, and joining hands with othertransportation services.
(2) Development Policies for the Transport Sector in India and the Priority of theProjectIn the 11th Five-Year Plan (April 2007 – March 2012), the Indian government has
adopted the policies outlined in the 10th Five-Year Plan and emphasizes the necessityof expanding routes, introducing high-speed freight trains, and improving access toport and harbor facilities as means of enabling mass transportation along trunkrailways. It places importance particularly on the prompt development of dedicatedfreight rail lines and improvement of passenger/freight trains along the route between
Delhi and Mumbai and between Ludhiana, Delhi and Kolkata.
(3) Japan and JICA’s Policy and Operations in the Railway Sector in India
Japan’s Country Assistance Program for India defines “promotion of economicgrowth” as a priority goal. Accordingly, JICA has set forth a policy of “promotion ofsustainable economic growth through assistance to the infrastructure” as a key aid
area in India, and has included “improvement of transportation networks” as one ofthe targets in that area. Under this target, JICA intends to support the development oftrunk railways, roads, and other infrastructures mainly in India’s six major metropolitan

areas, and in special economic zones, economic corridors, and other industrial cluster
regions located along the Delhi-Mumbai industrial artery, with the aim of promoting
regional economic development, efficient physical distribution, and foreign capital, andultimately contributing to expanding investment in India. The project therefore
fundamentally conforms to JICA’s assistance policy.
The project will also provide assistance through the Special Terms for EconomicPartnership (STEP) scheme for ODA loans, as stated in the joint statement issued by
the prime ministers of India and Japan after a conference held in December 2006.
Note that among ODA loans that have been granted to India, 17 projects worth 424.5
billion Yen have been directed to India’s transport sector to date.
(4) Other Donors’ Activity
The World Bank is focusing its assistance on increasing transport capacity in India
through the development of road infrastructures and promoting organization reforms
to increase efficiency of agencies in charge of implementing road projects. The AsianDevelopment Bank is helping to expand road transport capacity through thedevelopment of national and state roads, while also providing assistance for capacity
development and organization reform. Note that as of the end of 2008, the WorldBank has provided assistance worth 16,702 million USD and the ADB 7,164 million
USD to the transport sector in India.
(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 thewestern coast and major inland cities, and bulk freight traffic including coal, iron ore,cement, fertilizer and grains between Ludhiana, Delhi and Sonnagar. However,existing rail lines have the capacity to satisfy only around 50% of thepassenger/freight traffic demand that is predicted in 2032, across all segments. In fact,
both lines are expected to reach their capacities sometime between 2010 and 2015.
In response to this situation, the project aims to increase freight transport capacity andrealize efficient freight traffic by constructing dedicated freight rail lines and by
introducing automated signal and communication systems and electric locomotives
capable of high-speed, high capacity transportation. JICA’s support of the project isthus both highly necessary and relevant.
3. Project Description(1) Project Objective(s)The objective of the project is to make a far-reaching contribution to India’s
economic development by addressing the freight transport demand that is expected tocontinue growing in the future and increasing the efficiency of the logistics network. Of
the planned segments of the dedicated freight rail lines, from Delhi to Mumbai(Western Corridor) and from Ludhiana through Delhi and to Sonnagar (EasternCorridor), the project will construct some 920 kilometers of tracks connecting themajor cities of Gujarat, Rajasthan and Haryana, where development needs areespecially high. It will also introduce automated signal and communication systems
and electric locomotives capable of high-speed, high-capacity transportation.
To promote the smooth implementation of the project, the ODA loan will beallocated to engineering services (E/S) for the preparation of the project’s designs.
(2) Project Site/Target Area
The segment from Rewari to Vadodara, which lies between Delhi and Mumbai andpasses through the states of Haryana, Rajasthan and Gujarat(3) Project Component(s)The project will construct new freight lines, install automated signal andcommunication systems, and introduce locomotives capable of high-capacity,
high-speed transportation over some 920 kilometers between Rewari in Haryana
State and Vadodara in Gujarat State, which have been tagged as the priority
development segment between Delhi and Mumbai.
1） Construction works: civil engineering and architectural works (roadbed
development, construction of bridges, maintenance depots, junction stations,and other infrastructures, etc.), track works (rail installation, etc.), electricaland mechanical works (upgrading of overhead lines, substations, etc.), signal
and communication works (development of signal/communication systems,construction of an automated rail-crossing system), others (inspection andmaintenance cars, etc.)
2） Car procurement: electric locomotives
3） Social development (publicity and residents’ awareness-raising activities, HIVprevention activities, etc.)
4） Consulting services
The ODA loan will be allocated to the implementation of the following activitiesrelated to item 1) above and to providing assistance in formulating a feasibility study(F/S) for the segment of the Western Corridor not included in the project.
① Design study, etc. (review of existing studies, reassessment of project cost, etc.)② Supplementary study, etc. (formulation of plans for environmental and social
considerations and safety measures, etc.)(4) Estimated Project Cost (Loan Amount; for Engineering Services)
2,744 million Yen (including ODA loan amount of 2,606 million Yen)
(5) Schedule (for Engineering Services)
Planned to be implemented from September 2008 to November 2011 (39 months)(6) Project Implementation Structure1）Borrower: The President of India
2）Executing Agency: Dedicated Freight Corridor Corporation of India Limited(DFCCIL), Indian Ministry of Railways (MOR)

3）Operation and Maintenance System: DFCCIL (operation and maintenancemanagement of rail tracks, signal and communication system, etc.); MOR(freight transport operations, including maintenance management oflocomotives)(7) Environmental and Social Consideration/Poverty Reduction/Social Development
1) Environmental and Social Consideration① Category: B② Reason for Categorization: This project is classified as Category B, because it
provides a loan for engineering services, and the entire project as a whole
does not fall under Category C as defined in the “JBIC Guidelines for
Confirmation of Environmental and Social Considerations” (April 2002).
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 Handicapped, etc.)
The project involves large-scale construction by workers, many of whom areunaccompanied migrant workers, in a country where HIV/AIDS infection is a serious
concern. Therefore, the ODA loan will support the formulation of plans for HIV/AIDS
prevention activities and other activities designed to promote occupational healthand safety among the construction workers, through the concerted efforts of aconsultant and local NGO.
(8) Collaboration with Other Donors
JICA plans to mutually cooperate with the World Bank and ADB, donors who areslated to support the development of the Eastern Corridor, in implementing studies
on environmental and social considerations at the project formulation andimplementation stages and in enhancing the organizational capacity of DFCCIL, theproject executing agency.
(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 in India

6. Lessons Learned from Past Projects
Experiences from similar projects implemented in the past indicate that landacquisition is vital to the smooth implementation of projects in the railway sector, andthat adequate follow-up must be made after implementing land acquisition andresidential relocation measures. As this project involves the acquisition of aconsiderable area of land, the executing agency will be requested to give a regular
report on the progress of resident relocation.
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