Ex-ante Evaluation Paper (for Japanese ODA Loan)
South Asia Division 1, South Asia Department, JICA
1. Basic Information
Country: India
Project: Project for the Construction of Chennai Peripheral Ring Road (Phase 1)
Loan Agreement: January 18, 2019
2. Background and Necessity of the Project(1) Current State and Issues of the Road Sector and the Development of theNorth East State Region in India and the Positioning of this ProjectAs rapid urbanization has progressed in India in recent years, traffic
congestion due to the lack of an adequate transportation infrastructure has
become a severe issue in urban areas, obstructing economic development.
As roads carry 85.2% of all passenger transport and 62.9% of all freighttransport in India, a Three-Year Action Agenda (Apr. 2017 to Mar. 2020) setby NITI Aayog (National Institution for Transforming India Aayog) citedtransportation as a top requirement for the country to realize economic
growth, and expressed intentions to develop transportation infrastructure
including roads.
The population of the Chennai metropolitan area, the target area of theProject for the Construction of Chennai Peripheral Ring Road (Phase 1)(hereinafter the “Project”) increased from around 6.56 million in 2001 to 8.9
million in 2011 (Source: 2011 India census), causing traffic volumes in thecity to increase and worsening the already chronic traffic congestion. Thestate government, while aiming for high economic growth under Vision Tamil
Nadu 2023 (2012), prioritized road infrastructure development in an effort tostimulate logistics, and planned to construct the Peripheral Ring Road inorder to address the rising transportation demand.
The Chennai metropolitan area, which faces the Bay of Bengal,
functions as a key location for transportation and logistics in and outside
India while serving as a gateway to South East Asia. As manufacturing isbrisk in the area, there are many industrial parks mainly in the southwest
district of the city, where numerous Japanese-owned companies, such as
automobile manufacturers, have expanded. Given that in recent years, anissue has been raised about the shortage in handling capacity of the Port ofChennnai, situated in central part of the city, it is urgently required to improveaccess to Ennore Port, a port seeing increased development and usage
lying to the north of the city. The master plan formulation survey (2015) forthe Chennai Bengaluru Industrial Corridor (hereinafter “CBIC”) vision,pursued by Japan and India, said the slow development of the access roadto this port impeded the business activities of the entire CBIC area. In 2016,
the Japanese Chamber of Commerce & Industry, Chennai submitted to theGovernment of Tamil Nadu a proposal outlining the need for early
development of the road given its high priority. Aware of its importance, thegovernment plans to develop, on a priority basis, section 1 of the Peripheral
Ring Road, which will serve as the access road to Ennore Port. The Projectis expected to contribute to the economic development of the Chennai
metropolitan area through installation of section 1, and is positioned as apriority project under the CBIC Project.
(2) Japan’s and JICA's Road Sector and North East State Region Cooperation
Policy and the Positioning of this ProjectJapan’s Country Assistance Policy for India (March 2016) specifies"strengthening connectivity" as a priority area and states that Japan will
support the development of a transportation hub and network infrastructure
to strengthen regional connectivity as well as connectivity in major industrial
cities and economic zones. The policy also says Japan will give specific form
to wide-area economic development programs such as the CBIC vision.
The JICA Country Analysis Paper for India (March 2018) specifies
strengthening of India’s industrial competitiveness as a priority area in orderto give increased stability to the nation’s economic growth. Japan will assist
in developing significant infrastructure, such as high-standard roads that willcontribute to the competitiveness of industries such as manufacturing, andprovide assistance conducive to promoting direct overseas investment. In
this respect, the Project is consistent with the policy and analysis discussedabove.
JICA has approved 59 ODA loans totaling 2,124.3 billion yen to India
for its transportation sector (as of August 31, 2018).
(3) Other Donors’ Activity
In the road sector, the World Bank has provided support for a stateroad development project in Tamil Nadu (approved in 2003; US $348 million)
as well as Phase 2 of the same project (approved in 2015; US $300 million).
Meanwhile, the Asian Development Bank has provided support for theconstruction of state roads in other states including the Karnataka StateHighways Improvement Project (approved in 2010; US $305 million) and,Rajasthan State Highway Investment Program (approved in 2017; US $500million).
3. Project Description(1) Project Objective
To construct section 1 of the Peripheral Ring Road in the Chennai
metropolitan area, thereby addressing fast-growing road transportation
demand and contributing to economic growth in the area.
(2) Project Site/Target Area: Chennai Metropolitan Region (Tamil Nadu State)(3) Project Components
1) Road construction work (25.1 km [21.5 km of the east-west main line and3.6 km of the north-south branch line]): Two lanes on each side of themain line road, two lanes on each side of the service road (frontageroad), coupled with interchanges and flyovers (bridges)
2) Introduction of ITS equipment (toll collection system [ETC] and trafficcontrol system)3) Consulting services (detailed design review [road construction], basic
design [ITS], tender assistance, construction supervision and technicaltransfer for the operation, maintenance and control of ITS, etc.)(4) Estimated Project Cost
74,497 million yen (of which, the ODA Loan amount is 40,074 million yen)(5) ScheduleJanuary 2019 to August 2026 (92 months in total). Project completion isdefined as the date on which the installed facilities are put into operation(August 2023).
(6) Project Implementation Structure1) Borrower: President of India
2) Guarantor: None
3) Executing Agency: Highways and Minor Ports Department (hereinafter“HMPD”)
4) Operation and Maintenance agency:
O&M will be outsourced to private companies under the supervision andresponsibility of HMPD, which has experience of outsourcing before as
the controller of state roads and certain national roads in Tamil Nadu.

While O&M expenses will be paid for with toll income, budget will beappropriated by the state government, as required.
(7) Collaboration with Other Schemes and Donors
1) Related aid activities by Japan:
The introduction of ITS equipment (Traffic Information System [TIS],
Traffic Management System [TMS] and Bus System [BS]) in Chennai,
although having been initially included in the Project, was separated as
the Project for Installation of Chennai Metropolitan Area Intelligent
Transport Systems, an ODA program, and the L/A was entered into inMarch 2018.
2) Aid activities of other aid organizations: None in particular.
(8) Environmental and Social Considerations/Poverty Reduction/SocialDevelopment
1) Environmental and Social Considerations(i) Category: A(ii) Categorization Rationale:
This Project falls under the road sector and a characteristic prone tohave effects (large-scale non-voluntary resident transfer) that arelisted in the ‘JICA Guidelines for Environmental and Social
Considerations’ (promulgated in April 2010).
(iii) Environmental approval: HMPD conducted an environmental impact
assessment (EIA) for potential environmental impact from the Project.
In August 2018, the assessment was approved by the State
Environment Impact Assessment Authority Tamil Nadu (TNSEIAA).
(iv) Pollution control measures: During the construction work period, theProject will probably create effects such as air pollution, water quality
erosion, waste, noise and vibration and soil pollution. The personnel
will work to minimize these potential effects by taking control
measures in the form of water sprinkling systems, septic tanks andwaste treatment facilities at worker accommodations, low pollution
equipment and sound insulation walls and oil separation machines.
To address noise and vibrations after the start of operation,
personnel will take control measures such as the installation of soundinsulation walls.
(v) Natural environment aspect: Given that the area targeted by theProject does not fall under a location or is nearby a place that issusceptible to effects, such as a national park, any undesirable effecton the natural environment will likely be minimal. Although 120 trees
will be felled and 217 trees transplanted, 1,200 trees (10 times thenumber) will be planted as substitutes for the trees to be felled and,for the trees to be transplanted, they will be planted in an identicalnumber in the vicinity of the original habitat of them, according to theplan.
(vi) Social environment aspect: The Project will involve an acquisition ofland 250.8 ha in size and a relocation of residents of 60 households,
the land acquisition and resident relocation programs will be carriedout according to a resident relocation plan to be devised inconformity to the laws of India as well as JICA guidelines.
Consultations with local residents found they wished to see theshape of the branch line (a total of 4.35 km) revised. Hence,pondering an alternative line shape, the executing agency chose ashape designed to minimize social effects before consulting with theresidents again. The post-shape change consultations found noopposition to the project implementation.
(vii)
Others and Monitoring: During the construction work period of
the Project, the contractor will monitor air quality, water quality, waste,noise and vibrations and soil under the supervision of HMPD. Afterthe start of operations, a monitoring approval agency hired by HMPD
will monitor noise and vibrations as well as the eco-system. Landacquisition and non-voluntary resident relocation will be monitored byHMPD.
2) Cross-cutting Items: Control measures for infectious disease such as
AIDS and HIV
As many workers will likely be required for the Project, it will probably
involve a high risk of HIV infection. In this respect, to avoid the risk ofHIV infection during the construction work period, JICA will ask thecontractor for cooperation on HIV/AIDS control measures for workers inthe form of HIV/AIDS prevention clauses in tender documents.
3) Gender Category: GI (S) Gender Integrated Project<Activities/Classification Rationale> Through a cooperation preparation
survey, we had consultations with stakeholders while taking genderbalance into account, such as taking care to allow women to attend theconsultations, among other steps. Moreover, we plan to develop afemale worker-friendly work environment at work sites of the Project.
Based on the above, this Project is classified as a "gender integrated

project."(9) Other Important Issues: None in particular
4. Targeted Outcomes(1) Quantitative Effects
1) Outcomes (Operation and Effect Indicators)
Indicator

Baseline(Actual value in 2018)

Target (2025)[2 Years afterCompletion]

Annual average traffic volume(PCU/day) (Note 1)

042,106

Annual average traffic volume(unit count/day) (Note 1)

015,744

Passengercount(passenger/year) (Note 2)

013,464,666

Freight volume (tons/year) (Note2)

056,452,264

Time required (minutes) (Note 3)

49.7

21.7

Time required (minutes) (Note 4)

36.4

22.0

(Note 1) The measurement spot will be on section 1 and lie east of an intersection with a branchline.
(Note 2) Annualized based on the latest passenger count and freight volume per day(Note 3) From Thatchur (an intersection between National Road 5 and section 1) to the Ennore
Port (31.4 km)(Note 4) From Red Hills (an intersection between the Peripheral Ring Road and National Road 5)
to the Ennore Port (23.7 km)(2) Qualitative Effects
The qualitative effects of the Project include the promotion of regional
economic development in the Chennai Metropolitan Region as well as
improved travel comfort in the target section.
(3) Internal Rate of Return
Based on the following assumptions, the Economic Internal Rate of Return(EIRR) of this Project is 15.6%. The Financial Internal Rate of Return (FIRR)
is –6.1% (this is negative due to the significant initial investment cost [mainlyland acquisition cost]).

[EIRR]
Cost: Cost of project, O&M and land acquisition (excluding tax)
Benefits: Reduction of vehicle operation cost, reduction of travel time cost
Project life: 25 years[FIRR]
Cost: Cost of project, O&M and land acquisition
Benefits: Toll income
Project life: 25 years
5. Prerequisites / External Factors(1) Preconditions: None in particular(2) External Factors: None in particular
6. Lessons Learned from Past Projects
Based on the ex-post evaluation results of the Calcutta Transport
Infrastructure Development Project, an ODA loan program for India, it waspointed out that actively incorporating the opinions of residents and relevant
entities in the planning and execution stages would lead to smootheracquisitions of land, given that land acquisition and facility relocation would takemuch time and create potential delays. For the Project, land acquisition officers
will be assigned at the executing agency in order to provide the appropriatecompensation according to the Resettlement Action Plan. The personnel will
perform the land acquisition and resident relocation processes smoothly inresponse to the matter pointed out, and the executing agency will follow up onthe process.
7. Evaluation Results
This Project will contribute to alleviating traffic congestion and promoting
regional economic development in the Chennai metropolitan region, where many
Japanese companies have expanded. This is consistent with the Government ofIndia's policies on development and solving issues, as well as Japan’s andJICA's policy on assistance. Moreover, given that the Project is deemed tocontribute to Goal 9 of the Sustainable Development Goals, namely, “Build
resilient infrastructure, promote inclusive and sustainable industrialization andfoster innovation,” the need for JICA to support the implementation of this Projectis high.

8. Plan for Future Evaluation(1) Indicators to be Used
As indicated in sections 4. (1) to (3)(2) Timing of the Next Evaluation
Ex-post evaluation: 2 years after the project completion
END