Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry: India
Project: Guwahati Water Supply Project
Loan Agreement: March 31, 2009
Loan Amount: 29,453 million Yen
Borrower: The President of India
2. Background and Necessity of the Project(1)

Current State and Issues of the Water Supply / Sewage and Sanitation Sectors inIndia

In India, demand for water usage is increasing with its population and economic
growth, but, from a lack of infrastructure, the water supply shortage is becoming acute.
Further, reliance on groundwater is lowering the groundwater level and leading to higher
content of fluorine, arsenic, and other toxic substances. Also, with a sudden populationinflux in the urban areas along with industrialization, sewage emission is exceeding
treatment which threatens the public health and living environment of local residents. In
terms of operation and maintenance of water supply services, there are technical andfinancial issues such as water quality, non-revenue water and level of water tariff, etc.
(2) Development Policies for the Water supply / Sewage and Sanitation Sectors in India/ Assam State and the Priority of the Project
In its Eleventh Five Year Plan (April 2007 – March 2012) the Indian Government
has outlined a goal of providing water supply, sewage and sanitation facilities to all theurban population by 2011/2012. Further, in the current administration’s Common
Minimum Programme (May 2004), there is a commitment to expand public investment inwater supply facilities, and the supply of drinking water to all levels of society in bothurban and rural areas, and increasing drinking water supplies is one of the top-priority
issues.
The per capita GDP in Assam state in 2004 ~ 2005 was 6,721 Rupees, which isonly 35% of the national average, and the poor make up 31% of the population. Only
31% of urban households get their drinking water from the water supply system, lessthan half of the urban average in India. Taking this into account, based on the policies of
the central government given above, the Assam state government has come out with aplan to work on developing water supply infrastructure and is prioritizing this project inGuwahati, the largest city in the state.

(3)Japan and JICA’s Policy and Operations in the Water Supply / Sewage andSanitation Sectors in India
Taking into account the rapidly growing urban population, Japan and JICA havesupported the supply of adequate and safe drinking water and the remediation of poor
public sanitation conditions in order to improve living standards and to prevent watercontamination in major rivers. Further, in rural areas, water infrastructure projects aresupported as part of the development of basic infrastructure for improving the living
environment of the poor. In Japanese ODA Loans, in the in the water supply / sewageand sanitation sector, 20 projects with loans totaling over 343.2 billion Yen have beenapproved. Further, as technical assistance and grants, policy advisors and other experts
have been dispatched three times since 2004.
(4) Other Donors’ Activities
The World Bank and ADB have provided assistance to the water supply / sewage
sectors as part of their measures to reduce poverty in India. Focus areas are (a)assistance to states / cities that are proactive in making reforms, (b) promotion ofcompetition in service improvements in water supply / sewage service among local
governments, (c) rationalization of water tariff levels, (d) utilization of private sector
resources and (e) consideration of poverty impacts. As of 2007, approved assistance ofthe World Bank totaled $4,031 million and of the ADB $543 million.
(5) Necessity of the Project
Guwahati, with a population of over 1 million (2006), is the main city in Assam statein the North-East of India, and is the biggest city in the North-Eastern states, and isdeveloping rapidly around the oil and tea industries. However, only roughly 30% of thecity has water supply, and this supply is only provided 2 ~ 3 hours/day. Additionally,through population influx from nearby regions, the population is expected to nearly
double by 2025, which is expected to result in further supply-demand gap of water supply.
Also, introduction of appropriate operation management methods such as improvementsin the tariff structure and collection frameworks is imperative. Accordingly, it is essential
to expand and construct water supply infrastructure to create a sustainable water supply
that can meet the increasing demand, and to improve the living conditions of localresidents. There is therefore a high level of necessity and relevance for JICA to support
this project.
3. Project Description(1)

Project Objective(s)The objective of this project is to provide safe and stable water supply service thatwill meet the surging demands for water by expanding existing and constructing new
water supply facilities in the South Central and North wards of Guwahati, Assam state;
thereby contributing to improvement of the living conditions of local residents.
(2)
Project Site / Target Area
South Central and North wards of Guwahati city
(3)
Project Component(s)1) Water supply facilities: Construction of water intake facilities / treatment plants /distribution reservoirs / transmission network and placement of water metersand SCADA, etc.
2) Consulting services:- Construction implementation: Detailed design, tender support, construction
monitoring and supervision, project oversight, support for implementation andmonitoring, etc.
- Organization capacity development: Operation and maintenancemanagement framework improvement, financial management improvement,
personnel development framework improvement, support for individual houseconnections and support for PR activities related to the new tariff structure, etc.
(4)
Estimated Project Cost (Loan Amount)
35,524 million yen (ODA loan amount: 29,453 million yen)
(5)
ScheduleMarch 2009–January 2017 (94 months). The project completion is defined ascompletion of the consulting service.
(6)
Project Implementation Structure1) Borrower: The President of India
2) Executing Agency: Guwahati Metropolitan Development Authority
3) Operation and Maintenance System: Guwahati Jal Board (To be founded)(7)
Environmental and Social Consideration/Poverty Reduction/Social Development
1) Environmental and Social Considerationa) Category: Ab) Reasons for categorization: This project will take place in a region which iseasily affected based on the “Japan Bank for International Cooperation Guidelines
for Confirmation of Environmental and Social Considerations” (established April2002).
c) Environmental Permit: While not required under Indian law, the EIA for thisproject was done in October 2008. A provisional permit for construction ofdistribution reservoir and related facilities in reserved forests has been received

from the Indian Forest Department in charge, and a final permit is expected to bereceived in July 2009.
d) Anti-Pollution Measures: Water will be taken from surface water, so no groundsubsidence is expected. Noise pollution will be considered during construction of
the treatment plants and distribution reservoirs, etc.
e) Natural Environment: Reserved forest (0.9534ha) is included in the project area,
but as degradation of the land is already in progress through use of the land
including illegal squatting, a condition of the project permit is that replacement
planting is performed. Further, the project will be implemented taking into
consideration the surrounding environment.
f) Social Environment: This project requires land acquisition of 0.30ha and resident
relocation of 6 households. These will be performed in accordance with Indiandomestic procedures and Assam state resident relocation policies.
g) Other/Monitoring: In this project, the executing agency will monitor the conditionof reserved forest and water quality, etc.
2) Promotion of Poverty Reduction: Assistance for urban poverty will mainly be layingof distribution pipes and establishment of individual house connections in order toimprove water supply service to the poor in the slum areas. Further, Guwahati willconsider the impact on poverty of the water tariff / new individual connection fees in thewater tariff legislative bill that is expected to be passed in the future.
3) Promotion of Social Development (e.g. Gender Perspective、Measure for Infectious
Diseases Including HIV/AIDS、 Participatory Development、Consideration for Persons
with Disabilities, etc.): Educational activities will be implemented in collaboration withlocal NGOs to improve water environment for slum residents and to promote individual
house connections.
(8)
Collaboration with Other Donors: The ADB is considering a water infrastructure
support project in the South East ward of Guwahati. There is a possibility that the(9)ADB may provide cooperation for assistance for capacity development of theGuwahati Jal Board, which will be responsible for the operation and maintenanceof water infrastructure throughout Guwahati in the future. Further, in relation tocapacity development of the executing agency, the Fukuoka City Waterworks
Bureau has given advice regarding management reforms.
Other Important Issues: In conjunction with the introduction of a usage-based
tariff scheme and a new tariff collection system, local NGO will be hired toprovide explanations to residents and provide an opportunity for exchange ofopinions.

4. Targeted Outcomes(1)

Performance Indicators (Operation and Effect Indicator)
Indicator

Populationpersons)servedBaseline(Actual Value in 2008)(1000 289

Target (2019)[Expected value 2 years
after completion]
930

Percentage of population in Roughly 30%
target areas served

100%

Water supply (m3 / day)

44,900186,000

Rate of Facility Utilization

South central: 57%

South central: 81%

North: 43%

North: 79%

Water quality (at the tap)

-Less than or equal tocontamination level 1
Less than or equal to color
level 5

Water leakage ratio

South central: 38%
North: 15%

South central: 10%
North: 10%

Available water per capital South central: 135per day (L)North: 70 ~ 100

South central: 135
North: 135(2)Internal Rate of Return
Based on the conditions indicated below, the project’s Economic Internal Rate ofReturn (EIRR) is 16.5% in the South Central ward, and 9.1% in the North ward.
[EIRR]
Cost: Project cost (excluding tax), operation and maintenance expenses
Benefit: Increase in water charge payments through improved awareness, decrease inoperation and maintenance expenses
Project life: 40 years
5. External Factors and Risk Control
Changes in the public security of Guwahati city.
6. Lessons Learned from Past ProjectsFrom ex-post evaluations of existing water supply / sewage projects, it has been

learned that it is important to conduct a public relations and awareness raising campaign
for the project targeting the residents in order to boost the projects effects. Accordingly, inthis project, public relations and awareness raising campaigns explaining the new pricing
scheme and payment scheme for the residents will be implemented.
Further, in light of the stressed importance of considering measures to improve
management of water supply operations, in this project, it is agreed that the executing
agency will take measures to reduce non-revenue water and to improve financial
condition through the development of new water tariff system and collection systems.
The executing agency will also take measures on personnel development. These will be
implemented with the capacity development consulting service that will be provided to
the future Guwahati Jal Board,
7. Plans for Future Evaluation(1)

Indicators to be Used
1) Population served (1000 persons)2) Percentage of population in target areas served3) Water supply (m3 / day)4) Rate of Facility Utilization
5) Water quality (at the tap)
6) Water leakage ratio7) Available water per capital per day (L)8) EIRR(2)

Timing
2 years after project completion.
End