Ex-ante Evaluation
1. Name of the ProjectCountry: India
Project Title: Chennai Metro Project
Loan Agreement: November 21, 2008
Loan Amount: 21,751million Yen
Borrower: The President of India
2. Background and Necessity of the ProjectIn Delhi, Chennai and other major cities in India, increased traffic congestion
resulting from an increase in road traffic demand has become a serious problem
leading to worsening economic losses and health problems arising from vehicle
pollution such as air pollution and noise pollution. Accordingly a public transportsystem is necessary to alleviate traffic congestion and improve the urbanenvironment.
In its Eleventh Five Year Plan (April 2007 – March 2012) the Government ofIndia has outlined goals of meeting increased transport demand from recent
economic growth as well as the development of public transport systems, basedon perspectives of safety, energy efficiency and environmental conservation. In
the National Urban Traffic Policy currently under preparation, measure havebeen included to foster use of public transport and promote investment,
strengthen traffic regulation and introduce cutting-edge technologies in order tomeet the transport needs of the rapidly increasing urban population. In particular,construction of mass transit systems is being recommended for cities with apopulation over 4 million.
In the “Japan’s Country Assistance Program for India” prepared by theGovernment of Japan, “promotion of economic growth” has been set down as apriority area. Accordingly, JICA has set down (1) support of sustainable growththrough development of economic infrastructure, (2) support for economic
growth increasing employment (3) support for poverty reduction and (4) supportfor environment / climate change measures as major aid areas. This projectcomplies with these goals.
The Chennai metropolitan area in the State of Tamil Nadu has the 4th largest
population in India, and is the largest metropolitan area in southern India. Its
population has increased rapidly from 4.5 million in 1981 to 7.06 million in 2001,

and has now reached 7.6 million, and Chennai city has a population density of
24,000 people/km2 (Population density of Tokyo’s 23 wards was 13,000people/km2 in 2001), and it is one of the most overpopulated cities in the world.
In line with the population increase, the number of registered vehicles has also
increased dramatically, more than doubling from 1991 to 2001. As a result thecurrent average speed on major city roads is roughly 15km/h, and traffic
congestion is severe. On the other hand, expanding the capacity of existing
public transport (bus, trains) and improving the road network is not easy.
Accordingly, to relieve traffic congestion and reduce vehicle pollution,
construction of a mass rapid transport system has been positioned as a central
pillar of the Tamil Nadu State Government’s urban transport policy / urban
environment measures. Therefore, JICA’s support for this project is highly
necessary and relevant.
3. Project Description(1) Project Objectives
This project aims to cope with the surge of transport demand in the Chennai
metropolitan area in the Tamil Nadu State, southern India, by establishing a
mass rapid transport system, and thereby contribute to development of theregional economy and improvement in the urban environment by relieving traffic
congestion and reducing traffic pollution.
(2) Project Site / Target Area
State of Tamil Nadu, Chennai metropolitan area
(3) Project OutlineConstruction of a mass rapid transport system (approx. 43km) in the Chennai
metropolitan area.
1) Construction of elevated railway (20.02km), underground railway (23.39km),
16 elevated stations, 20 underground stations
2) Construction of electrical, telecommunication and signaling systems
3) Rolling stock procurement
4) Construction of maintenance depots5) Consulting services (tender assistance, detailed design, execution
planning/supervision, etc.)
The Japanese ODA loan portion applies to civil work (underground portion
including underground stations, track portion for entire length), construction ofelectrical, telecommunication and signaling systems for underground portion,

rolling stock procurement and consulting services.
(4) Total Project Costs/Loan Amount
392,087 million Yen (21,751 million Japanese ODA loan this tranche)(5) Project Implementation Schedule
Planned for October 2008 ~ September 2014 (Total 72 months). Project will beconsidered complete when consulting service has finished.
(6) Project Implementation Structure1) Borrower: The President of India
2) Executing Agency: Chennai Metro Rail Limited3) Operation / management: As per 2)(7) Environmental/social awareness / poverty reduction / social development
1) Environmental/social awarenessa) Category: Ab) Reasons for categorization: This project falls into a railroad sector project
which is likely to have significant adverse impact on the environment
under the “Japan Bank for International Cooperation Guidelines for
Confirmation of Environmental and Social Considerations” (established inApril 2002). Thus this project is classified as Category A.
c) Environmental Permit: The Environment Impact Assessment (EIA) reportfor this project has been prepared in May 2008, though it is not required
for the project in the country’s legal system.
d) Anti-Pollution Measures: With regard to noise and vibration pollution,
noise reduction measures including soundproof walls and sound/vibration
insulating pads are scheduled to be adopted. Further, by using the shieldtunneling method, ground loosening and water inflow can be prevented,
and it is expected that there will be no major impacts on groundsubsidence.
e) Natural Environment: The project’s site is located in an urban area, andthe planned route generally runs along existing roads, and so adverse
impact on the natural environment is assumed to be minimal.
f) Social Environment: This project requires 8.01ha of land, and 213
households (of which 187 are squatters) and 417 shops are expected tobe relocated. The executing agency has already held discussions withtargeted for land acquisition and relocation, and the procedures will beimplemented in accordance with compensation schemes andresettlement action plan prepared by the executing agency and the Land

Acquisition Act.
g) Other/Monitoring: As a part of this project, monitoring will be performed
on: noise/vibration pollution, air quality, water quality, soil contamination,
land acquisition and resident relocation, etc.
2) Promotion of Poverty Reduction: None
3) Promotion of Social Development (Gender, AIDS and other infectious
disease measures, participative development, disability awareness, etc.): Manyof the migrant workers on this project are expected to be single workers living
alone at high risk of HIV/AIDS infection. The executing agency in cooperation
with the Tamil Nadu State AIDS Control Society will implement an HIV/AIDS
prevention program. HIV/AIDS prevention clauses will be inserted into the tender
documents, and the contractor will also be expected to cooperate with efforts toprevent HIV/AIDS infection in workers. Further, in line with Indian laws andregulations, stations and coaches that are elderly- and disabled-friendly(elevators, escalators, station announcements, Braille blocks, wheelchair spaces,etc.) are planned.
(8) Cooperation with Other Donors.
None(9) Other Important Issues
None
4. Outcome Targets(1) Evaluation Indicators (Operation and Effect Indicator)
Target (2016)[2 years after completion]

Indicator
Operation rate (% / year)

92

Running distance (1000km / day)

70.90

Number of running trains (per dayeach direction)

409

Volume of transportation
people–kilometers / day)(million6.2

Passenger traffic receipts (millionRupees / day)

11.6

(2) Internal Rate of Return
Based on the following assumptions, the Economic Internal Rate of Returnfor this project is 10.95% and the Financial Internal Rate of Return (FIRR) is
2.32%.
[EIRR]
Cost: Project costs (excluding tax), operation / maintenance costs
Benefit: Benefits of cost savings on existing public transport and roads,
benefits of travel time saved by users of this route and other transport
methods, benefit of operating cost savings to transport systems suchas buses from a reduction in road traffic congestion, benefits of areduction of accidents and pollution relief.
Project life: 30 years[FIRR]
Cost： Project costs, operation / maintenance costs
Benefit：Fare income, advertising income, real-estate development income
Project life: 30 years
5. External Factors / Risk Control
Changes in transport demand.
6. Lessons Learned from Findings of Similar Projects Undertaken in thePast
Based on ex-post evaluations of past railroad / subway projects, the lesson
learned is that, creating a financially independent project implementation
structure is important from the perspective of ensuring appropriate operation andmanagement. In order to ensure a strong financial base for this project, thenumber of passengers must meet targets, and to ensure this the Chennai
transport authority is expected to adjust bus routes so they do not compete withthe metro and instead perform a feeder role. Also, to further improve the financialbase of this project, the executing agency will implement advertising, real-estatedevelopment and other related projects.
7. Future Evaluation Plan(1) Indices to be Used in Future Evaluations
1) Operation rate (rolling stock in use / rolling stock procured) (% / year)
2) Running distance (1000km / day)3) Number of running trains (per day each direction)4) Volume of transportation (million people–kilometers / day)5) Passenger traffic receipts (million Rupees / day)6) FIRR (%), EIRR(%)(2) Timing of Future Evaluations
2 years after project completion
End