Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry: India
Project: Rajasthan Rural Water Supply and Fluorosis Mitigation Project
Loan Agreement: September 28, 2012
Loan amount: 37,598 million yen
Borrower: The President of India
2. Background and Necessity of the Project(1) Current State and Issues of the Water Supply/Sewerage System and Sanitary Sector in India
In India, accessibility to safe water has been improved from 72% in 1990 to 88% in 2008. The country hasbeen reaching its goal of establishing sustainable access to drinking water in throughout India under theEleventh Five-Year Plan (April 2007 through March 2012). However, water resource development andconstruction of water supply/sewerage systems are not keeping up with the increasing demand in drinking
water stemming from India’s increasing population and economic growth. Today, the country suffers from an
excessive dependence on groundwater and chronic problems such as a broken and uneven water supply.
Even worse, groundwater in some areas contains substances harmful to humans such as fluoride and arsenic.
In particular, the fluoride level in the water far beyond the WHO criteria of 1.5 mg/L, calling for urgent action toensure the supply of safe drinking water. The sewerage systems in the country are also troubled. Specifically,
the percentage of facilities connected to sewer pipes remains extremely low—just 28% even in urban areas.
Due to a drastic influx of population into urban areas and rapid industrialization, wastewater has overflowed
treatment capacity and is passing untreated into rivers and the like, threatening living conditions and sanitation
for local residents. The organizations providing drinking/sewerage water services face technical and financial
challenges in operation/maintenance, such as high ratios of non-revenue water, problems in setting fees, anda lack of trained employees.
(2) Development Policy for the Water Supply/Sewerage System and Sanitary Sector in India and Priority of theProject
The Government of India set a policy agenda under the Eleventh Five-Year Plan (April 2007 through March2012) to establish sustainable access to drinking water and supply drinking/sewerage water services andsanitary facilities to the entire urban population of India. In 2009, the Union Government further formulated theNational Rural Drinking Water Programme (NRDWP) to supply safe and sufficient drinking water in rural areas
as soon as possible and to promote sustainable maintenance. In the same year, the Union Government also
formulated the National Fluorosis Reduction Programme to address fluoride contamination of groundwater,which is becoming increasingly worse in certain areas.
(3) Japan and JICA’s Policy and Operations in the Water Supply/Sewerage System Sector of India
As a part of environmental measures, priority goals were formulated by the Government of Japan forimproving poverty and environmental issues under the Country Assistance Program for India. . The CountryAssistance Program will consider the rapid growth of urban population and support the supply of adequate andsafe drinking water and the remediation of poor public sanitation in order to improve living standards andprevent water contamination in the major rivers. Further, in rural areas, water supply development projects aresupported as part of the development of basic infrastructure for the living environment of the poor. In Japanese
ODA loans for India in the water supply/sewerage and sanitation sector, there are 24 projects with loanstotaling 435.1 billion yen (13.6% of the entire approved amount). Under non–Japanese ODA loans, JICA iscurrently providing the Capacity Development Project for Non-Revenue Water Reduction in Goa (2011-2014) .
JICA's other contributions include dispatching policy advisors in charge of the sewerage water sector to theMinistry of Urban Development.
(4) Other Donors’ Activity
The World Bank (WB) and Asian Development Bank (ADB) provide assistance in the water supply andsewerage system sector as a part of poverty reduction measures. Their priority issues are: (1) reorganizationof relevant institutions, (2) fostering competition between local municipalities to provide drinking and sewerage
services, (3) optimizing water fees, (4) introducing private-sector capital, and (5) considering impoverishedgroups. The United States Agency for International Development (USAID) provides assistance focusing on
capacity building to improve the financial conditions of the project operation agencies.
(5) Necessity of the Project
The site of this project, the Nagaur District in the state of Rajasthan, is located next to the state capital of Jaipur
City. The area is in an arid region of the Thar Desert and has a population of approximately 3.31 million.
Nagaur District's annual precipitation is 410 mm, which is lower than the national average (1,200 mm) andstate average (531 mm) and makes it difficult to meet the increasing water demand from the region’s growing
population. Low rainfall makes limited surface stream water available, resulting in overuse or depletion ofgroundwater, and the district suffers from chronic water shortages. Moreover, most of the groundwater inNagur District contains a large amount of naturally derived fluoride. The level of the fluoride is well over theWHO drinking water criteria. The people in the district have no option other than to use the undrinkablegroundwater, since they have no other source of water. Consequently, a significant portion of local residents
suffer from diseases such as dental fluorosis and osteofluorosis. According to the 2010 survey, about 34% ofchildren aged 6–14 in the district are affected with fluorosis. With about 80% of its residents unable to accesssafe water, the Nagaur District has the most serious water shortage in Rajasthan. This project aims to resolve
water shortages and problems with fluoride-contaminated drinking water so that local residents have access tosafe water. Therefore, the aim of the project satisfies the development policies of the Indian government aswell as the support policies of the Japanese government and JICA. Consequently, JICA's support for thisproject is highly necessary and relevant.
3. Project Description(1) Project Objectives
The project will provide safe and adequate drinking water supply to people in Nagaur District suffering from acutescarcity of potable water and ground water which is heavily contaminated by fluoride, by constructing surface
water supply facilities, thereby reducing hardship and improving the health and quality of life.
(2) Project Site/Target Area
Southern and Eastern region of Nagaur District, State of Rajasthan, India(3) Project Components
1) Construction of new drinking water facilities (e.g. water purifying plants, water transmission
lines, pump stations, and water supply networks) that take water from the Indira Gandhi Canal.
2) Measures to prevent fluorosis (e.g. training health experts, dietary instructions, and educational
activities for local residents)
3) Capacity building (supporting the formation of operation and maintenance organizations,technology transfers) for the Village Water Sanitation Committee (VWSC), taking charge of operationand maintenance for facilities in local municipalities
4) Consultation services (e.g. reviewing detailed designs, bidding support, supervising construction
work, and enhancing maintenance management)(4) Estimated Project Cost (Loan Amount)
51,143 million yen (Yen Loan Amount: 37,598 million yen)(5) Schedule
Planned between September 2012 and October 2017 (total of 62 months). Project completion is defined as
the commencement of the service of the facilities (May 2017).
(6) Project Implementation Structure1) Borrower: The President of India
2) Executing Agency: Public Health Engineering Department, Government of Rajasthan (PHED)
3) Operation and Maintenance System: Transmission of water up to village/towns entrance by PHED ,intra-village distribution by VWSC and for towns. (partial relegation to municipal governments is planned)(7) Environmental and Social Consideration/Poverty Reduction/Social Development
1) Environmental and Social Considerationi.
Category: Bii.
Reason for Categorization: This project is classified as Category B because it will not have significant
undesirable impact on the environment given the characteristics of the sector, the characteristics ofthe project and the characteristics of the project area under the “JICA Environmental and SocialGuideline” (dated in April 2010).
iii.
Environmental Permit: Preparation of an Environmental Impact Assessment (EIA) report for thisproject is not required under Indian law.
iv.
Anti-Pollution Measures: Drinking water facilities, including water purification plants, are designed
and constructed in consideration of noise and dust. Also, the sludge produced when the facility starts
operation will be adequately treated.
v.
Natural Environment: Adverse impact on the natural environment is expected to be minimal because
the project sites and peripheral areas are located outside of national parks.
vi.
Social Environment: The approximately 215 ha of privately owned land needed for this project has
already been acquired based on the country's Land Acquisition Act. No resettlement of local
residents is necessary. To implement this project, approximately 60 ha of land owned by the state
government is scheduled to be transferred before the start of operation in accordance with thenecessary process stipulated in domestic laws.
vii.
Other/Monitoring: This project monitors air quality, noise, and waste during the construction period.
When in service, the execution agency will monitor water quality, methods for treating sludge, and thelike.
2) Promotion of Poverty Reduction: Educational activities for local residents and capacity building activities
for VWSC consider socially vulnerable and impoverished groups by encouraging the participation of at

least a certain percentage of designated tribes and castes.
3) Promotion of Social Development (e.g. Gender Perspective, Measures to Prevent Infectious DiseasesIncluding AIDS, Participatory Development, Consideration for the Handicapped, etc.): To mitigate theinfectious risk of HIV/AIDS during construction, the project will include preventative measures in thebidding documents to urge contractors to provide preventative programs to their labor force. Further, it
has been determined that educational activities for local residents and capacity building activities for
local governments should make sure that at least 30% of the participants are women. The relevant
activities will be reviewed in consideration of a gender perspective.
(8) Collaboration with Other Donors: N/A(9) Other Important Issues: To combat fluorosis, training in Japan is scheduled to be provided to persons
involved in this project with the cooperation of Osaka Medical College. This project helps mitigate theimpact of climate change by improving living conditions for local residents through the provision of safe
and stable drinking water from new drinking water facilities. Thus the project contributes to climatechange adaptation.
4. Project Benefits(1) Quantitative benefits
1) Evaluation Indicators (Operation and Effect Indicator)
Indicators

Baseline(2011 actual)

Target (2019)two years after
completion
2,441
100
155,18155 L (village) and 100 L(city)
77.03－
Served population (thousands of people)－
Percentage of served population (%)
3－
Surface water supply amount (m /day)
Safe water availability Lpcd (L/per capita/－per day)－Rate of facility utilization (%)
Impact indicators:
1) Difference in the percentage of patients who complain of joint pain (difference in the percentage oftarget area participants who complain of joint pain before and after project implementation)2) Difference in the percentage of patients whose urinal fluoride exceeds normal levels (difference inthe percentage of target area participants whose urinal fluoride exceeds normal levels before andafter project implementation)2) Internal Rate of Return (IRR)
Based on the conditions below, the Economic Internal Rate of Return (EIRR) of this project was calculated
as 15.13%.
EIRR:
Cost: Project cost (excluding tax), operation and maintenance expenses
Benefits: Water charge payments and lower costs in constructing/maintaining fluoride eliminators
Project Life: 30 years(2) Qualitative benefits: Improvement in health and living conditions for residents in the Eastern region ofNagur District, boosting local residents' knowledge of fluoride, capacity building (increasing operationand maintenance ability) of the executing agency and VWSC, and adaptation to climate change.
5. External Risk Factors and Risk Control
Economic stagnation and deterioration in political situation in India and the surrounding area of the project aswell as natural disasters
6. Lessons Learned from Past Projects(1) Assessment results of similar projects
A lesson learned from the results of Philippines' ex-post monitoring of the Boracay Environmental
Infrastructure Project was that when operating party differs from the one executed the project, it is critical tosecure involvement of the operating party from the project planning stage to foster ownership.
(2) Lessons for the Project
Operation and maintenance of drinking water facilities in the towns for this project will be delegated torespective local Municipal Governments and intra village distribution system to Panchayat Raj Institutions
through Village Water and Sanitation Committee (VWSC) other than that of executing agency. Therefore,
based on lessons learned, JICA thoroughly explained the outline of the project together with roles andresponsibilities in the operation and maintenance of relevant facilities to the local governments and PRIs
involved from the project formulation stage. JICA also carefully collected feedback from the localgovernments. In addition, JICA plans to provide capacity building assistance to the local governments andPRIs regarding the operation and maintenance system for the facilities.

7. Degree of Maturity and Possibility of Adaptation(1) Indicators for Future Evaluation:
1) Population with access to water supply (thousands of people)
2) Coverage of the water supply system (%)3) Water supply quantity (M3/day)
4) Per capita water quantity available (L)5) Facility utilization ratio (%)6) Economic Internal Rate of Return (EIRR) (%)(2) Timing of Next Evaluation:
Two years after plan completion