Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry: India
Project: Delhi Mass Rapid Transport System Project Phase 2 (V)Loan Agreement: March 31, 2010
Loan Amount: 33,640 million Yen
Borrower: The President of India
2. Background and Necessity of the Project(1) Current State and Issues of the Urban Transport Sector in India
India is experiencing rapid urbanization. While the registered number of automobiles andmotorcycles are surging (with annual average growth of 11% since 1997), the development ofpublic transportation infrastructure is much lagging. As a result, traffic congestion due to theincreased number of automobiles and motorcycles is becoming a serious problem in urban
areas. Particularly, in metropolitan cities such as Delhi, Kolkata and Chennai, traffic
congestion accompanying the rise in road traffic demand is becoming a critical issue. Since
this is causing economic loss and health hazards due to air, noise and other forms ofvehicle-related pollution, there is an urgent need to introduce a public transportation system toalleviate traffic congestion and vehicle-related pollution.
(2) Development Policies for the Urban Transport Sector in India and the Priority of theProject
In its Eleventh Five Year Plan (April 2007–March 2012), the Government of India has
placed emphasis on development in the urban transport sector to mitigate the issues
mentioned above. In particular, the construction of mass transit systems is recommended forcities with a population of more than 4 million.
(3) Japan and JICA’s Policy and Operations in the Urban Transport Sector
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. Regarding Japanese ODA Loans for India, 33 projects totaling 586,333
million Yen have been extended in the transport sector, in particular, 17 projects totaling
513,338 million Yen in the urban transport sector. Concerning technical cooperation and grants,experts in the fields of rolling stock maintenance and safety management were dispatched in2008 for the Delhi Mass Rapid Transport System Project.
(4) Other Donors’ Activities
The World Bank has focused its assistance on increasing transport capacity through roadinfrastructure development and institutional reform in the road sector, and subsequently theapproved loans in the transport sector amounts to 16,702 million USD (as of June 2009). The
Asian Development Bank (ADB) is also engaged in infrastructure development such as
national highways / state roads and capacity building & institutional reform. The amount ofapproved loans in the transport sector is 7,464 million USD (as of December 2009).
(5) Necessity of the Project
The population of the Delhi metropolitan area increased from 6.2 million in 1981 to 16.3
million in 2006, and the accompanying surge in the number of buses and private vehicles has
reduced the average vehicle speed to approximately 15 km/h in the city, resulting in serious
traffic congestion and vehicle pollution. However, since it is difficult to expand the transportcapacity of existing public transportation (buses and trains) as well as the road network, theextension of mass rapid transit system constructed in Phase 1 (previous project, “Delhi MassRapid Transport System Project”) has become the major countermeasure in the urban
transportation and environmental policy of the Government of Delhi. Therefore, JICA’s
assistance for the Project is highly necessary and relevant.
3. Project Description(1) Project Objective
The objective of the Project is to cope with the growing traffic demand in the Delhi
metropolitan area, the capital city of India, by extending the mass rapid transport system
totaling approximately 83 km in length, thereby contributing regional economic development
and improvement of the urban environment, through alleviation of traffic congestion andreduction of traffic pollution.
(2) Project Site/Target Area
National Capital Territory of Delhi(3) Project Components
As the phase 2 part of the entire Delhi Mass Rapid Transport System Project envisaging
the construction of 414 km of urban railway in Delhi metropolitan area, the Project aims toextend underground and elevated railway totaling 83km in length (7 segments in 6 lines). The
portions of the Project covered by Japanese ODA Loans are as follows.
1) Civil works (19 km underground (including 14 subway stations], trackworks for all theline, etc.)
2) Electrical and Signaling & Telecommunication System
3) Procurement of Rolling Stocks
4) Consulting Services (design review, construction monitoring and supervision etc.)(4) Estimated Project Cost (Loan Amount)
388,670 million Yen (Loan Amount: 33,640 million Yen)
(5) Schedule
January 2006 – March 2013 (87 months) Project completion is scheduled in December
2010 as metro train services become available along the entire line.
(6) Project Implementation Structure1) Borrower: The President of India

2) Executing Agency: Delhi Metro Rail Corporation Limited (DMRC)
3) Operation and Maintenance System: same as 2) above(7) Environmental and Social Consideration/Poverty Reduction/Social Development
1) Environmental and Social Consideration(i) Category: A(ii) Reason for Categorization: The Project falls under the category of a railroad sector
project which is likely to have a significant adverse impact on the environment
under the “Japan Bank for International Cooperation Guidelines for Confirmation ofEnvironmental and Social Consideration” (established in April 2002). Thus thisproject is classified as Category A(iii) Environmental Permit: The Environment Impact Assessment (EIA) report for thisproject was prepared in August 2005 (for some of the lines, in May 2007), although
EIAs are not mandatory for such projects in India.
(iv) Anti-Pollution Measures: With regard to noise pollution, noise reduction measures
including soundproof walls and sound insulating pads are scheduled to be adopted.
(v) Natural Environment: Because the project’s site is located in an urban area and theplanned route generally runs along existing roads, it is likely to have minimum
adverse impact on the natural environment.
(vi) Social Environment: The Project requires land acquisition of 175.51 ha. A total of1,483 households need to be resettled. DMRC has already held discussions withthose affected by land acquisition and resettlement. The land acquisition,resettlement and compensation procedures pursuant to the Land Acquisition Law
and the rehabilitation plan prepared by the Government of National Capital Territoryof Delhi (GNCTD) have been already completed.
(vii) Other / Monitoring: In this project, DMRC is monitoring noise, vibration, soil, airquality, water quality, land acquisition, resettlement, etc. in the Project.
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.):
Many of the migrant workers employed by the Project live alone, and the risk of
HIV/AIDS infection is considered high. For this reason, DMRC in cooperation withlocal NGOs has been implementing HIV/AIDS prevention activities by its own funds asa form of social contribution. At the same time, as a working environment policy,
HIV/AIDS prevention clauses have been inserted in tender documents, and eachcontractor is expected to cooperate with efforts to prevent HIV/AIDS infection. Inaddition, according to the laws of India, the stations and coaches are designed taking
into consideration of needs of the elderly and the physically challenged (e.g.,user-friendly design of elevators and restrooms, announcements at stations, signs inBraille, space for wheelchairs). Further, DMRC has plans to offer training in customer
care for all frontline staffs including station clerks and crews.
(8) Collaboration with Other Donors:
None(9) Other Important Issues:None
4. Targeted Outcomes(1) Performance Indicators (Operation and Effect Indicator)
Indicator

Target (2012)[Expected value 2 years after project completion]

Operating rate (%/year)

94

Running distance (1000km/day)

144.5

Number of running trains(number of trains/day, one direction)

2,024

Volume of transportation(million persons-km/day)

18.29

Income from Passengers(million rupees/day)

23.07(2) Internal Rate of Return
Based on the conditions indicated below, the Economic Internal Rate of Return (EIRR)
for the Project is 13.72%; the Financial Internal Rate of Return (FIRR) for the Project is3.04%.
[EIRR]
Cost:
Project cost (excluding tax), operation and maintenance expenses
Benefit:
Savings of vehicle operating cost (fuel consumption) and maintenance cost,savings of the metro and road passenger travel time, savings on vehicle
operating cost by alleviating congestion (time factor), savings fromdecrease of accidents, reduction of traffic pollution
Project Life: 30 years[FIRR]
Cost:
Project cost, operation and maintenance expenses
Benefit:
Revenue from the metro passenger, advertisement and property
development
Project Life: 30 years
5. External Factors and Risk Control
Changes in transport demand6. Lessons Learned from Past Projects
From the ex-post evaluation of previous railroad and metro projects, it has been learnt thatthe establishment of a financially independent project implementation structure is importantfrom the standpoint of ensuring proper operation and maintenance. Since improvement ofridership of the metro system is essential for financial soundness of DMRC, GNCTD has
rationalized the routes for the Project so that the metro does not compete with bus
passengers’ demand. In this regard, DMRC and Delhi Transport Corporation have reached
an agreement that bus lines take a role of feeder networking for the metro. Moreover, DMRC
has already started advertising and property development business in order to further improve
the financial standing of the Project.
7. Plan for Future Evaluation(1) Indicators to be Used
1) Operating rate (%/year)
2) Running distance (100km/day)3) Number of running trains (trains/day, one direction)4) Volume of transportation (million persons-km/day)
5) Income from Passengers (million rupees/day)
6) Internal rate of return: FIRR (%), EIRR (%)(2) Timing
Two years after the project completion(END)