Ex-ante Evaluation Paper (for Japanese ODA Loan)
South Asia Division 1, South Asia Department, JICA
1. Basic Information
Country: India
Project: Chennai Metro Project (Phase 2) (I)
Loan Agreement: December 21, 2018
2. Background and Necessity of the Project(1) Current State and Issues of the Railways Sector in India
India has been seeing rapid urbanization in recent years, and while the number ofregistered automobiles and motorcycles has increased dramatically, there has been
little progress in terms of improvements to the public transportation infrastructure. Inmajor cities such as Chennai, traffic congestion from the ever-growing traffic demandhas become a serious problem, especially with economic losses and health problems
caused by air and noise pollution from vehicles being major issues. For this reason, it
has become necessary to establish a public transportation system to alleviate traffic
congestion and improve the urban environment.
In response to the above-mentioned issues, the government of India has been
implementing measures to cope with the recent surge in transportation demand,brought about by economic growth. It has stressed importance of improving the publictransportation system from the viewpoint of safety, energy efficiency, and socialenvironment preservation.
The Chennai Metropolitan Area in Tamil Nadu State is the largest metropolitan areain South India, with the fourth largest population in India. The population was 4.5
million in 1981, rapidly increased to 7.06 million in 2001, and reached 8.7 million in2011. The population density of Chennai city, the center of the area, is approximately
25,000 people/km2, making it one of the most densely populated cities in the world.
Following the population increase, the number of registered automobiles has
increased significantly, having more than tripled between 2001 and 2011. As aconsequence, the average vehicle speed on major roads in the city is approximately
17 km/h, and traffic congestion has become a serious issue. There have also been
limitations to the increase in transportation capacity of existing public transportation(buses, railways) or to the improvement of road networks. Development of a mass rapidtransit system to alleviate traffic congestion and address automobile pollution has
therefore been prioritized for policies on urban transportation and measures againsturban environmental issues adopted by the Tamil Nadu state government.
Japan has offered ODA Loans for the Chennai Metro Project (hereinafter, “Phase 1Project”) over the siries of five phases and has supported the construction of two linesof the mass rapid transit system. Meanwhile, the population of the Chennai
Metropolitan Area has continued to increase after the start of the Phase 1 Project, andurbanization has reached the outskirts of the region, and leading to increased demandfor new urban transportation. Based on the results of the feasibility study conducted inresponse to this demand, construction of three new lines, lines 3 to 5, with a total
distance of approximately 107.5 km has been planned so that they can cover the outer
loop of the lines constructed in the Phase 1 Project. Among these lines, line 3 (between
Madhavaram Milk Colony and Sholinganallur stations) and line 5 (between
Madhavaram Milk Colony and Chennai Mofussil Bus Terminus (CMBT) stations), with a
total distance of approximately 52.0 km, will be constructed in Chennai Metro Project(Phase 2) (hereinafter the “Project”), as the demand for these sections is high and theirconstruction is a pressing concern. The Project aims to meet the increasing demand fortransportation in the Chennai Metropolitan Area and has been positioned as a priority
project to realize the plans and policies of the Tamil Nadu state government.
(2) Japan and JICA’s Railways Sector Cooperation Policy and the Positioning of thisProject
Japan's Country Assistance Policy for India (March 2016) indicates "strengthening
connectivity" as one of the priority areas, which includes improvements totransportation infrastructure. It also states that to de-bottleneck theinfrastructure-based constraints to investment and growth, improvements to railsystems (including high-speed and urban railways) is vital to strengthening
connectivity within major industrial cities, as well as connectivity between various
economic zones and regions in India.
In addition, the JICA Country Analysis Paper for India (March 2016) concluded theneed to support infrastructure with the development of trunk-line railways, urban
railways, roads, and harbors―which will promote regional economic development,
improve goods distribution efficiency, and encourage increased foreign
investment―with a focus on industrial clusters such as the Special Economic Zones
and Economic Corridors of India's 6 major urban centers and the Delhi-Mumbai
Industrial Corridor. Therefore, the Project is consistent with these policies and plans.
As of the end of November 2018, JICA received authorization to provide ODA
Loans to India in the amount of 2,469 billion yen for 64 projects in the generaltransportation sector, and 1,965.8 billion yen was authorized for 40 projects in therailways sector including the Delhi Metro and other metro projects.
Moreover, the Project is deemed to contribute to Goal 9 (Build resilientinfrastructure) and Goal 11.6 (Make cities inclusive, safe, resilient and sustainable) of
the Sustainable Development Goals.
(3) Other Donors’ Activity
The World Bank has been supporting development of the Mumbai Urban Transport
Project (development of roads and suburban railways) as well as a freight railway
construction plan to upgrade the east corridor. As of the end of November 2018, it has
approved 81 loans totaling $18.274 billion.

Meanwhile, the Asian Development Bank has provided 60 loans totaling $13.606
billion as of the end of November 2018, and $176 million for Jaipur Metro.
Agence Française de Développement has approved 180 million Euros for Kochi
Metro in February 2014 as well as 310 million Euros for Bengaluru Metro in January
2016. AIIB and EIB also approved a joint loan to Bengaluru Metro in December 2017($335 million and $583 million, respectively).
3. Project Description(1) Project Objective
The objective of the Project is to cope with the increase in traffic demand in theChennai Metropolitan Area by constructing a mass rapid transit system with a total
distance of approximately 52.0 km, thereby contributing to increased mobility in thecity, mitigation of road traffic congestion, promotion of measures against air pollution
and noise caused by the increasing number of motor vehicles, and economic growthof the region.
(2) Project Site/Target Area
Chennai Metropolitan Area, Tamil Nadu state(3) Project Components
1) Civil engineering (international competitive bidding (tied)) Line 3: Approx. 36.0 km/40 stations(Elevated: Approx. 9.0 km/10 stations (2 sections), Underground: Approx. 27.0
km/30 stations (5 sections))
 Line 5: Approx. 16.0 km/18 stations(Elevated: Approx. 4.7 km/5 stations, Overground: Approx. 0.3 km/1 station (1section for elevated and overground parts combined), Underground: Approx. 11.0
km/12 stations (2 sections))*The total number of stations will be 57, as there is one station that serves bothlines 3 and 5.
2) Electricity and machinery (international competitive bidding (tied))
3) Elevators and escalators (international competitive bidding (tied))4) Depot (international competitive bidding (tied))
5) Rails (international competitive bidding (tied))
6) Tracks (international competitive bidding (tied))
7) Power equipment (international competitive bidding (tied))
8) Signals (international competitive bidding (tied))
9) Automated fare collection system (international competitive bidding (tied))
10) Platform screen doors (international competitive bidding (tied))11) Rolling stock (210 cars, comprising 3 cars per line x 30 lines and 6 cars per line
x 20 lines) (international competitive bidding (tied))*Trains comprising of 3 cars and 6 cars will run at the start of the operation. The
former is to be gradually replaced with the latter, as demand is expected toincrease in the future.
12) Consulting services (basic/detailed design, bidding assistance, construction
supervision, support for environmental and social considerations, etc.)(short-list method (tied))
13) Development of station buildings, areas around the stations, and transport hubs,etc. (international competitive bidding)Japanese ODA Loan covers three underground sections of line 3 and one
underground section of line 5 in above 1), as well as 2) to 12).
(4) Estimated Project Cost
725,415 million yen (of which, the ODA Loan amount is 357,476 million yen and theloan amount for this phase is 75,519 million yen)(5) Schedule
Scheduled from December 2018 to October 2028 (117 months total). Projectcompletion is defined as the service commencement of all facilities (June 2027).
(6) Project Implementation Structure1) Borrower: The President of India
2) Guarantor: None
3) Executing Agency: Chennai Metro Rail Limited (CMRL)
4) Operation and Maintenance agency: Same as above 3). Note that since 2017,
CMRL has started to outsource the operation of trains and the maintenance ofsome railway facilities (tracks, stations, air conditioning in tunnels, elevators,escalators, and power equipment (substations and overhead equipment)),
including the rolling stock. Necessary capacities are reviewed when selecting acontractor, based on factors such as similar business background/similar
experience in past. There have been no major issues in operation, and on-timerates have been high.
(7) Collaboration with Other Schemes and Donors
None in particular.
(8) Environmental and Social Considerations/Poverty Reduction and Social
Development
1) Environmental and Social Considerations① Category: A② Categorization Rationale: This Project falls under the railways sector listed inthe ‘JICA Guidelines for Environmental and Social Considerations’ (dated April2010).
③ Environmental Permit: The Environmental Impact Assessment (EIA) report for
the Project was approved in November 2017 by Chennai Metro Rail Limited(hereinafter “CMRL”), although the creation of the report was not required
under Indian law.
④ Anti-Pollution Measures: During the works, water sprinkling, dust sheets, andwastewater treatment plants are used to address air and water pollution due toexcavation and operation of construction machinery. As for waste, part of thelarge amount of excavated soil due to tunnel works will be reused as fill for theconstruction of depot and stations, and the rest of the soil will be disposed of inan appropriate manner at a designated disposal site. Tunnel works will takeplace at locations where the ground is relatively firm, and a shielded
construction method will be adopted to prevent soil loosening and groundwater
inflow. Therefore, no significant negative impact on the ground fromsubsidence is expected. When in operation, running noise will be minimized byinstalling sound barriers and adopting a two-layer rubber pad structure.
Vibration of underground and elevated portions will be reduced throughperiodic track maintenance and compliance with speed limits.
⑤ Natural Environment: The target area is not situated in or around any
vulnerable areas such as national parks. Although 934 trees will be cut down
due to the construction of depot and tracks, replacement trees will be plantedby CMRL.
⑥ Social Environment: The Project requires the resettlement of 10 households,
acquisition of 163 ha of land, and relocation of economic activities of 153
households. Procedures for resettlement and land acquisition will be taken
based on the Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013in India, resettlement
procedures of Tamil Nadu state government, and the resettlement action plan
prepared by JICA. Matters such as project overview, environmental and social
impact, and compensation policies were explained to affected residents
through a census survey, with personal visits and consultations with residents.
No opposition was raised from the residents with regard to the implementationof the Project.
⑦ Other/Monitoring: During the works, the contractor, under the supervision ofCMRL, will monitor air quality, water quality, noise and vibration, waste,vegetation, and other issues. After service commencement, CMRL will monitor
resettlement, land acquisition, and recovery of livelihood.
2) Cross-cutting Items(Climate change) By constructing a mass rapid transit system, the Project aims
to alleviate traffic congestion caused by automobile use, thereby helping reducegreenhouse gas (GHG) emissions. The Project alleviates global warming by
reducing GHG emissions by approximately 80,000 tons of CO2 equivalent peryear.
(Special attention to disabled persons) In accordance with domestic law ofIndia, the design of stations and cars makes allowances for use by elderly
and disabled persons (i.e. accessible elevators, escalators, station

announcements, textured paving blocks to guide the blind, wheelchair spaces,etc.).

3) Gender Classification:[Gender Project] GI (S) (Gender Integrated Project)<Activities/Classification Rationale> In order to ensure that women can enjoy theuse of the subway in safety and comfort, the Project includes a number of efforts
that include introduction of women-only cars, introduction of priority seats forpassengers who need assistance, including women, installation of CCTV camerasin the station and cars, and low-hanging handgrip straps. For these reasons, theProject is classified as a "gender integrated project."(9) Other Important Issues
As the Project will be implemented under tied conditions, Japanese technology isexpected to be utilized in tunnel boring machines, elevators, escalators, head
heat-treated rails, signal systems, automated fare collection systems, platform screen
doors, and cars.
4. Targeted Outcomes(1) Quantitative Effects
1) Outcomes (Operational and Effect Indicators)
Indicator
Operating rate (%)
Running distance (1000 km)
Number of running trains perday
Volume of transportation perday (million people・km)
Income from Passenger per
day (million rupees)

Baseline(Actual value in 2017)‐‐‐‐‐

Target value (2029)[2 Years after completion]
92.0
31.1
408
11.3
48.7

The targets have been set based on the plan for the Project (a part of line 3 and a partof line 5), not on the premise of the completion of line 4.
(2) Qualitative Effects
The qualitative effects of the Project include a reduction of noise levels, reduction of
air pollution, improved convenience through the establishment of reliable travel time,
economic development of the Chennai Metropolitan Area, and increased value along
the lines.
(3) Internal Rate of Return
Based on the assumptions below, the Economic Internal Rate of Return (EIRR) ofthe Project is 14.61%, and the Financial Internal Rate of Return (FIRR) is 2.98%.

[EIRR]
Cost: Project cost, operation and maintenance cost (both excluding taxes)
Benefits: Effects of reducing the operation and maintenance costs of the existingtransportation system and roads, travel time of users of this line and othertransportation users, operation and maintenance costs of buses and other transit
system by mitigating traffic congestion, and the number of traffic accidents
and pollution
Project life: 30 years[FIRR]
Cost: Project cost, operation and maintenance cost
Benefits: Passenger revenue, advertisement revenue, and revenue from thedevelopment of stations and areas around the stations
Project life: 30 years
5. External Factors and Risk Control(1) Preconditions: Land acquisition and resettlement by the India side, as scheduled(2) External Factors: None in particular
6. Lessons Learned from Past Projects
Based on the ex-post evaluation results of the “Delhi Mass Rapid Transport SystemProject (VI)” in India, it is preferable that public transportation bodies cooperate, notcompete, with each other and establish a systematic urban transport system toachieve efficient operation of public transport as a whole. In the Project, a plan forfeeder bus services was prepared and submitted to the Chennai Metropolitan
Transport Corporation (MTC), the organization responsible for public bus services in
Chennai, to increase revenue of the executing agency. MTC is now operating buses
based on the plan.
Also, based on the ex-post evaluation results of the “Delhi Mass Rapid Transport
System Project (VI),” it is desirable to check that conditions for profitability are met and,if found to be insufficient, accelerate measures to meet the conditions. In the Phase 1
Project, the executing agency signed a contract (with private businesses) pertaining to
the installation of vending machines, kiosks, and ATMs at the stations andmanagement of parking lots around the stations, in order to supplement passenger
revenue and increase profitability.
7. Evaluation Results
In light of rapid urbanization extending to the outskirts of Chennai, this Project willcontribute to balanced economic and social development of the Chennai Metropolitan
Area through alleviation of traffic congestion and reduction of pollution caused by theincreasing number of motor vehicles in the region by networking mass rapid transitsystems. Continued support to this Project, following the support to the Phase 1
Project, is thus judged to be consistent with the Government of India’s policies ondevelopment and solving issues, as well as Japan and JICA’s policy on assistance.
Moreover, given that the Project is deemed to contribute to Goal 9 (Build resilientinfrastructure) and Goal 11.6 (Make cities inclusive, safe, resilient and sustainable) of
the Sustainable Development Goals, the need for JICA to support the implementationof the Project is 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 project completion