Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry:India
Project:
Bihar National Highway Improvement Project
Loan Agreement: February 22, 2013
Loan Amount:
22,903 million yen
Borrower:
The President of India
2. Background and Necessity of the Project(1) Current State and Issues of the Road Sector in India
In 2009-10, the road network in India, which broadly includes national highways, state highways,
major district roads and rural roads, carried 85 per cent of the total passenger movement and 63 percent of total freight movement. In 2012, the National Highways in India constitute 76,818
kilometers, or about 2 percent of the total 4.11 million kilometers of national road network.
However, they bear about 40 percent of transportation on the road network as a whole. In such a
scenario, improving the new national highways and widening existing ones to meet the growing
demand for road transportation is an urgent issue. Moreover, developing outworn road facilities
such as old bridges and improving traffic conditions around the congested downtowns by
developing bypasses are the other issues for better mobility and accessibility.
(2) Development Policies for the Road Sector in India and the Priority of the ProjectIn the 11th Five-Year Plan (April 2007 to March 2012), the Government of India specifies thepolicy for a combined development of national highways, mainly through the promotion of thenational highway development plan (NHDP)1, and the development of local roads. Along with this,the Government of the State of Bihar formulated “Bihar Approach to 11th Five Year Plan” (April
2007 to March 2012), which stated that the Government will achieve comprehensive growththrough the improvement of roads, electricity systems and other infrastructure, as well asestablishment of an investment environment. This Project, which aims to establish main national
highways in the State of Bihar, is included in the Approach paper.
Recently the Government of India released the 12th Five-Year Plan (April 2012 to March 2017),
where road sector is given a priority and a poor capacity is determined to be continuously attacked.
Completion of going works on NHDP Phases I & II and constructing another 10,000km of national
highways are, to put it concretely, the main targets.
(3) Japan and JICA’s Policy and Operations in the Road Sector
In the Japan’s Country Assistance Program for India, the “promotion of economic growth” wasidentified as a priority goal. In response to this, JICA has adopted “support for sustainable economic
growth through improvement of the economic infrastructure” as a priority sector. JICA’s policy is tosupport improvements in the efficiency of passenger and freight transport through the sustainable
development of intercity core traffic networks, the elimination of bottlenecks and the establishmentof logistics hubs and to support economic and social development in India. This Project isconsistent with these policies. JICA has so far approved 8 loan projects totaling 131.5 billion yen(4% of the total loan amount to India) for the road & bridge sector. As for technical cooperation,JICA carried out the “Capacity Improvement Project for Sustainable Expressway Development (FY2010-2012)” to improve skills in the establishment, management and maintenance of expresswaynetworks.
1NHDP envisages the development of major national highways spreading more than 50,000km all over India. NHDP is first introduced in 1998 andPhase I – VII is in progress or being planned. In NHDP-I & II, Golden Quadrilateral, aiming at connecting the main four cities of Delhi, Kolkata,
Chennai and Mumbai with a total length of 5,846 km, and NSEW Corridor, targeting connecting Srinagar, Kanyakumari, Silchar and Porbandar witha total length of 6,319 km, has been strongly pushed forward. In NHDP-III, 4-laning of national highways up to 12,000km by March 2013 is being
targeted.

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(4) Other Donors’ Activity
Recognizing that the realization of comprehensive growth requires development of theinfrastructure in rural areas where many poor people live, the World Bank has been providing fundsfor the Government of India’s local road development plan. Recognizing the importance of theimprovement of the infrastructure in the transport sector, the Asian Development Bank (ADB) hasalso been supporting the development of local roads especially in poor states and northwesternstates, including the development of state roads in the State of Bihar.
(5) Necessity of the ProjectThough Bihar is one of the most impoverished states of India and 53.5 percent of the State's
population lives below the poverty line (2010), which is far higher than the national average of29.8%, it has achieved a remarkable economic growth in recent years., In FY2011, Bihar’sGSDP(Gross State Domestic Product) marked 13.1%, which ranked first among all states in India
for 2 years in row. With an increasing population and economic development, the number ofvehicles in Bihar increased from 1,020,000 in FY2002 to 2,670,000 in FY2011. However, the road
length per million people was only 125.85 kilometers, which is much less than the average of387.57 for the entire India. It is therefore necessary to immediately establish road networks to copewith the sharply increased demand for road transport.
The section covered by this Project connects the two main national highways2 running across Bihar
parallel to one another.3 The implementation of this Project will be expected to greatly improve theefficiency of passenger and freight transportation. Since the number of vehicles in Bihar isestimated to increase in the future, it is essential to improve the transportation by improving themain highways and constructing bypasses to overcome traffic congestion and to support theestablishment of an investment environment through the development of the road infrastructure. As
this Project is consistent with India’s policies and Japan’s and JICA’s aid policies, it is essential andappropriate for JICA to provide support.
3. Project Description(1) Project Objective
The objective of this Project is to improve accessibility.in the State of Bihar, thereby contributing tomitigation of traffic jams and promoting regional economic development including tourist traffic.
(2) Project Site/Target Area
State of Bihar(3) Project Components (Including the Procurement Method)
This project involves 4-laning of National Highway 83 (Patna to Dobhi), which is a main arterial
road in Bihar, as well as constituting bypasses in congested areas.
1) Road construction (127 km of main road (including bypasses of about 56 km), service roads,
elevated railroad tracks, bridges, tollbooths, etc.)
2) Consulting services (work supervision, environmental and social consideration support, etc.)(4) Estimated Project Cost (Loan Amount)
41,760 million yen (including the agreed loan amount: 22,903 million yen)

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National Highway 2, which connects Delhi and Kolkata as part of Golden Quadrilateral, and National Highway 28, which is a part of the NSEWCorridor
3
A PPP project for 4-laning of National Highway 77 is in progress, which connects Patna at National Highway 83 and Muzaffarpur at National
Highway 28.

2(5) Schedule
Planned for March 2013 – March 2020 (85 months in total); the Project will be completed when theuse of the facilities begins (April 2017).
(6)
1)
2)
3)

Project Implementation Structure
Borrower: The President of India
Executing Agency: National Highways Authority of India
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 category of a large-scale project in a sector likely to have an impact and has
characteristics likely to have an impact according to the “Japan Bank for International
Cooperation Guidelines for the Confirmation of Environmental and Social
Considerations” (established in April 2002).
(3) Environmental Permit: This Project requires the preparation of an environmental impact
assessment (EIA) report under India’s domestic laws, and environmental permission wasobtained from the Ministry of Environment and Forests in November 2010.
(4) Pollution Control Measures: During the roadworks, measures are taken, including
watering, covering of the work equipment to prevent them scattering and the appropriate
management of vehicles and heavy machinery. With regard to air pollution and noise
after the start of the Project, the installation of soundproof walls, tree planting and othermeasures are taken if needed.
(5) Natural Environment: Because this Project requires the felling of plantation forests, theState Forest Department will plant replacement trees.
(6) Social Environment: Because this Project requires the acquisition of sites totaling about
635 ha and the relocation of about 1,000 households, the acquisition of the sites and therelocation of the residents are carried out according to a resident relocation plan prepared
and approved by the executing agency.
(7) Other aspects/Monitoring: In this Project, the executing agency monitors pollution
control measures (air quality, noise, vibration, water quality, etc.), the impact on
ecosystems, safety measures during the roadworks, the status of relocation of theresidents, etc.
2) Promotion of Poverty Reduction
Of the residents affected by the Project, socially vulnerable individuals can receive vocational
training and employment support.
3) Promotion of Social Development (gender perspective, measures to prevent infectious
diseases including HIV/AIDS, participatory development, consideration for persons withdisabilities, etc.)
The executing agency hires an NGO to carry out activities to prevent migratory workers fromcontracting HIV.
(8) Collaboration with Other Donors
JICA cooperates with NGOs to support the relocation of the residents.
(9) Other Important Issues
Because this Project is designed to secure the planned heights of roads and bridges in the case offlooding and aims to cope with the impact of climate change, it contributes to adaptation to climatechange.

34. Targeted Outcomes(1) Quantitative Effects
1) Performance Indicators (Operation and Effect Indicator)
Indicator

Baseline(Actual Value in 2010)

Target (2018)[1 year after projectcompletion]

10,962

20,042

3.38

1.56

4480

Annual Average Daily Traffic (AADT)(PCU/day)Travel time (hours/vehicle) (Patna –Dobhi)
Average speed (km/hour)2) Internal Rates of Return
Based on the following preconditions, the economic internal rate of return (EIRR) of theProject is 13.80%, and the financial internal rate of return (FIRR) is 0.23%.
EIRR
Costs:
Project cost (excluding taxes), operating and maintenance costs
Benefits:
Reduction in vehicle running costs and travel time
Project life: 30 years
FIRR
Costs:
Project cost, operating and maintenance costs
Benefits:
Revenues from road charges
Project life: 30 years(2) Qualitative Effects
Promotion of local economic development, improvement of road traffic safety and comfort,
improvement of convenience by ensuring punctuality when traveling, urban environmental
improvement through the mitigation of traffic pollution and adaptation to climate change in theState of Bihar
5. External Factors and Risk Control
Political and economic stagnation/deterioration as well as natural disasters in India and the areasurrounding the project sites
6. Lessons Learned from Past Projects
Based on the results of past projects involving the large-scale relocation of residents, it has been
pointed out that it is necessary to take measures to secure the means of livelihood and improve theliving standards of the people who have to relocate. Under this Project, it is planned to placeconsultants and NGOs in the project implementation system and comprehensively monitor theacquisition of sites and the relocation of residents so that appropriate compensation and livelihood
improvement measures will be carried out according to the resident relocation plan.
7. Plan for Future Evaluation(1) Indicators to be Used
1) Annual Average Daily Traffic (PCU/day)
2) Travel time (hours/vehicle) (Patna – Dobhi)
3) Average speed (km/hour)4) Economic internal rate of return (EIRR) (%)5) Financial internal rate of return (FIRR) (%)

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(2) Timing
One year after project completion5