Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry:
India
Project:
Bangalore Metro Rail Project (II)Loan Agreement: June 16, 2011
Loan Amount:
19,832 million yen
Borrower:
The President of India
2. Background and Necessity of the Project(1) Current State and Issues of the Urban Transportation Sector in India
In India, recent rapid urbanization has been resulted in a considerable increase in the number ofregistered automobiles and motorcycles, while improvement of the public transportation
infrastructures has not advanced as much. In particular, in Delhi, Bangalore and other large cities,
traffic congestion caused by the increasing demand for road transportation has become a serious
problem. Since economic losses and health damage from automobile pollution, such as aircontamination and noise, have also become serious, it is necessary to improve public transportation
systems to mitigate traffic congestion and improve the urban environment.
(2)

Development Policies for the Urban Transportation Sector in India and the Priority ofthe Project
To deal with these issues, the Indian Government has placed the priority on the development of theurban transportation sector in the 11th Five-Year Plan (April 2007 to March 2012). The plan
recommends the establishment of a mass rapid transit system for all cities with a population of morethan four million from the viewpoints of safety, energy efficiency and social and environmental
sustainability. This Project is in support of efforts being made to achieve this plan.
(3) Japan and JICA’s Policy and Operations in the Urban Transportation 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 aprioritized 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. Japanese ODA loans to India have so far been provided to 20 projects
totaling 630.2 billion yen in the urban transportation sector (20% of the total amount of loans).
(4) Other Donors’ Activity
The World Bank has provided loans to the urban transportation project in Mumbai and isformulating a project to support the eastern dedicated freight corridor construction plan. The
Asian Development Bank (ADB) has been supporting the railway sector, centering on support forthe development of software such as the organizational reform of the Indian Railways.
(5) Necessity of the Project
The urban area of Bangalore in the State of Karnataka has the third largest population among cities
in India. It is estimated that the population will increase to 8.1 million in 2011 from 5.7 million in
2001. The number of registered automobiles has been rising sharply from 1.56 million in 2001 to2.56 million in 2006. Because of this, the average speed of motor vehicles is about 13 km per houron the main urban roads and traffic congestion has become serious. On the other hand, because it isdifficult to expand the road networks due to a shortage of available land, it is also hard to improve
the transportation capacity of buses, which are the main existing means of public transportation.
Therefore, the establishment of a rapid mass transportation system is the main measure being takenby the State of Karnataka to deal with urban traffic and environmental problems.
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Although this Project started in 2006, since the total cost increased due to the global rise inequipment prices, the discovery of unpredictable geological conditions and considerations for theenvironment and passenger safety, which became necessary after the review, the Indian Government
and the Government of Karnataka decided to provide additional loans and investments and havebeen proceeding with fundraising from international institutions and local banks. Since there is a
shortage of funds in spite of this, they have made a request to JICA for an additional loan. Thisadditional loan will make it possible to raise all the necessary funds to carry out this Project. The
input of additional funds through an ODA loan is therefore required for the smooth implementationof this Project and the prompt provision of its benefits, thus it is essential and appropriate for JICA
to provide support.
3. Project Description(1) Project Objective
The objective of this project is to deal with the increasing demand for transportation in Bangalore,
the capital city of the State of Karnataka in southern India, by constructing a mass rapid transit
system and thereby contribute to the development of the local economy and the improvement of theurban environment through the mitigation of traffic congestion and the reduction of pollution frommotor vehicles.
(2) Project Site/Target Area
Bangalore City, State of Karnataka(3) Project Components
Construction of the north-south line and the east-west line of a mass rapid transit system with a total
length of 42.3 km, including a north-south extension of 9.3 km; ODA loans are provided to thefollowing works:
1) Civil engineering works (underground section of about 9 km (including 7 undergroundstations)) (* installation of tracks for the whole network of lines; elevated sections are notcovered by ODA loans)2) Works related to electricity and telecommunications3) Consulting services (bidding assistance, construction monitoring support, etc.)(4) Estimated Project Cost (Loan Amount)
306,809 million yen (the agreed loan amount this time: 19,832 million yen)(5) Schedule
Planned for March 2006 – June 2014 (100 months in total); the Project will be completed when useof the facilities begins (June 2013).
(6)
1)
2)
3)

Project Implementation Structure
Borrower: The President of India
Guarantor: Bangalore Metro Rail Corporation Limited
Operation and Maintenance System: Same as 2)(7) Environmental and Social Consideration/Poverty Reduction/Social Development
1) Environmental and Social Considerations(1) Category: A(2) Reason for the Categorization: This project is classified as Category A because it falls
under the railway sector according to the “Japan Bank for International Cooperation
Guidelines for the Confirmation of Environmental and Social Considerations”(established in April 2002) and has characteristics that may have an impact.

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(3) Environmental Permit: Although no environmental permit is required for railway
business operations under India’s domestic laws, environmental impact assessments(EIA) have been carried out and reports have been prepared under this Project (excluding
the extended portions); the EIA of the extended portions was carried out with the use offunds from ADB.
(4) Pollution control: Measures, such as the appropriate management of pollutants andconstruction vehicles and heavy machinery, will be taken when performing the works.
Once the Project is in operation, soundproof walls and pads will be installed to reducenoise.
(5) Natural Environment: Because the project area and its surroundings are not in any
protected natural area, there are no particular foreseeable impacts on the naturalenvironment.
(6) Social Environment: This Project requires the acquisition of sites amounting to a total
area of about 127 ha and the relocation of about 1,000 houses and structures. Both theacquisition of the sites and the relocation of the residents have already been completed
according to the Karnataka Industrial Area Development Board Act and the national
policy on the resettlement and rehabilitation for project-affected families. No particular
objections have been lodged against the Project in consultation meetings with persons
involved in the acquisition of sites and the resettlement of residents. All the slum
residents have been moved to free housing nearby. The executing agency has beenmonitoring their living situation since the resettlement.
(7) Other (Monitoring): In this Project, the executing agency monitors noise and air quality
during the construction period and also monitors the living conditions of the residents forthree years after their relocation. In addition, the executing agency is planning to monitor
water quality, the level of groundwater, etc., after the start of the use of the facilities.
2) Promotion of Poverty Reduction
None3) Promotion of Social Development (gender perspective, measures for infectious diseases
including HIV/AIDS, participatory development, consideration for persons with disabilities,etc.)
The executing agency intends to contract with an NGO to carry out HIV prevention activities
for itinerant workers. At present, the executing agency is carrying out the procedures foremploying the NGO.
(8) Collaboration with Other Donors
The ADB also is considering providing loans for this Project.
(9) Other Important Issues
It can be considered that this Project will contribute to the mitigation of climate change since amodal shift to a rapid transportation system and the mitigation of traffic congestion are expected
and lead to a reduction in greenhouse gas emissions. The executing agency is actively considering
registering this Project under the CDM system.
4. Targeted Outcomes(1) Quantitative Effects
1) Performance Indicators (Operation and Effect Indicator)
Target (2015)
Indicator[2 years after projectcompletion]
Operation rate (%/year)
92
Running distance (thousand km/day)
48.3
Number of runs (number of one-way
190
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runs per day) – east-west line
Number of runs (number of one-way
runs per day) – north-south line
Volume of transportation (millionpassenger kilometers /day)
Passenger income (million rupee/day)

200
10.1217.02) Internal Rates of Return
Based on the preconditions that this Project’s economic internal rate of return (EIRR) is
8.66% and the financial internal rate of return (FIRR) is 2.89%.
EIRR
Costs:
Benefits:

Project costs (excluding taxes), operation and maintenance costs
Reduction in the cost of managing and maintaining existing transportation
facilities and roads; reduction in the travel time for users of these lines and othertransportation facilities; reduction in the cost of managing and maintaining bus
and other transportation systems due to the mitigation of traffic congestion; adecrease in the number of traffic accidents; and the mitigation of pollution levels
Project life: 30 years
FIRR
Costs:
Project costs, operation and maintenance costs
Benefits:
Fare income, advertising income, real-estate development income
Project life: 30 years(2) Qualitative Effects
Mitigation of traffic congestion; development of the local economy through a reduction in trafficpollution; improvements in the urban environment; improvements in convenience throughpunctuality in scheduled travel times
5. External Factors and Risk Control
Change in passenger demand
6. Lessons Learned from Past Projects
Based on past projects accompanied by the resettlement of residents, it has been pointed out that itis necessary to take measures to secure the livelihoods and standard of living of those who have toresettle. In this project, the necessary measures were carried out, including explanation meetings forthe residents, and the acquisition of sites and the resettlement of residents have been completed. In
the future, the executing agency will continue to submit regular reports concerning the results ofmonitoring surveys on the living conditions of the slum residents after their resettlement.
7. Plan for Future Evaluation(1) Indicators to be Used
1) Operation rate (%/year)
2) Running distance (thousand km/day)3) Number of runs (number of one-way runs per day) – east-west line
4) Number of runs (number of one-way runs per day) – north-south line
5) Volume of transportation (million passenger kilometers /day)
6) Passenger income (million rupees/day)
7) Economic internal rate of return (EIRR) (%)8) Financial internal rate of return (FIRR) (%)

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(2) Timing
Two years after project completion5