Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
South Asia Division 1, South Asia Department
Japan International Cooperation Agency
1. Name of the ProjectCountry: India
Project: Ahmedabad Metro Project (II)Loan Agreement: March 27, 2020
2. Background and Necessity of the Project(1) Current State and Issues of the Urban Transport Sector in India
In recent years, in India, while demand for road transport has grown with therapid urbanization, not much progress has been made in the development ofpublic transport infrastructure, and traffic congestion has become a serious
problem in large cities such as Delhi, Mumbai, and Ahmedabad, causing
economic loss as well as serious health damage due to air pollution, noise, andother public pollution attributed to motor vehicles. For this reason, it is necessary
to develop public transport systems to reduce traffic congestion and improve theurban environment.
With the progress of urbanization due to economic growth, the population ofAhmedabad increased from 3.42 million in 1991 to 7.72 million in 2019, making it
the seventh largest city in India. The number of cars also increased sharply from
850,000 in 2001 to 3.66 million in 2016, and increasingly serious traffic
congestion has caused greater economic loss as well as air pollution and otherenvironmental problems. In order to cope with such population increase and theissues pertaining to it, the city government commenced Ahmedabad Municipal
Transport Service (AMTS) and Bus Rapid Transport System (BRTS), and has
strived to improve the public transport network in the city. However, the traffic
congestion still remains unresolved, requiring the government to enhancetransport capabilities to meet further growth in transport demand.
In its Three-Year Action Plan (April 2017 to March 2020), in order to meetgrowing transport demand resulting from economic growth in recent years, theGovernment of India places emphasis on public transport system developmentfrom the viewpoint of ensuring safety, achieving greater energy efficiency, andprotecting society and the environment and expects to increase budgets forurban railway construction projects. The Gujarat state government also worked
out a comprehensive transport plan for the Ahmedabad metropolitan area inJapanese ODA Loan2012 and officially decided to build a rapid transit system called “AhmedabadMetro” to promote utilization of public means of transport, and since then, it hasviewed the construction of such a system as one of its top priority projects.
Among these projects, the Ahmedabad Metro (“the Project”), which consists ofan east-west line, that connects the eastern end of Ahmedabad and its western
end through the city center, and a north-south line, that links the northern end of
the city and its southern end along the Sabarmati River, is positioned as an
indispensable project to stimulate economic growth in the Ahmedabad
metropolitan area.
(2) Japan’s and JICA’s Policy and Operations in the Urban Transport
Sector/Ahmedabad City
The Country Assistance Policy for India (formulated in March 2016) considers
it as a priority assistance area to establish closer connectivity throughdevelopment of transport infrastructure, and so on. Focusing on the need tosolve infrastructural bottlenecks for investments and growth, the Policy statesthat it is necessary to develop railways (including high-speed and urbanrailways) from the perspectives of realizing effective and efficient development inurban regions and industrial cluster areas. In order to solve bottlenecks foreconomic growth, meanwhile, the JICA Country Analysis Paper for India (March2018) emphasizes that it is necessary to support the country in developing
infrastructure, including trunk and urban railways, roads, and ports and harbors,
to contribute to promote regional economic development, effective logistic, andfurther investments by foreign capital in industrial clusters such as special
economic zone and economic corridors which are located in the six major urban
areas of the country and the Delhi-Mumbai Industrial Corridor. The Project is inaccordance with these policies and analyses.
The Project, which aims to reduce traffic congestion and improving the urban
environment, helps reduce greenhouse gas (GHG) emissions, and therefore, it
contributes to achieving two of the sustainable development goals (SDGs): Goal
11 “Make cities and human settlements inclusive, safe, resilient, andsustainable” and Goal 13 “Take urgent action to combat climate change and its
impacts.”
In the railway and urban transport sector, Japanese ODA loans have been
provided to support subway projects such as the Delhi Metro, and records
indicate that as of the end of February 2020, a total of 41 projects worth \2,041.3
billion had been approved. A Japanese ODA loan has already been granted toJapanese ODA Loan

Phase I of the Project (loan agreement: March 2016; approved loan amount:\82,434 million).
(3) Other Donors’ Activity
The World Bank has supported Mumbai urban transport projects (road andsuburban railway development) as well as projects such as the development ofeastern corridors in the dedicated freight railway construction plan, and in thetransport sector, a total of 83 projects worth $18,762 million had been approved
as of the end of January 2020. In addition to the loan of $176 million for theJaipur Metro, the Asian Development Bank worked with the New Development
Bank to finance the Mumbai Metro (2A, 2B, and No. 7 lines) in February 2019
(approved amount: $926 million for the former and $260 million for the latter),and a total of 64 projects worth $15,572 million had been approved by the end ofJanuary 2020.
3. Project Description(1) Project Objectives
To cope with the increase of traffic demand in Ahmedabad by expanding themass rapid transportation system, thereby promoting regional economicdevelopment and improving urban environment, through mitigation of traffic
congestion and decrease of automobile pollution caused by increased traffic.
(2) Project Site/Target Area
Ahmedabad Metropolitan Region, State of Gujarat (northwestern India)(3) Project Components
1) Civil engineering and construction work
East-west line: 19.8 km (13.2 km elevated and 6.6 km undergroundtracks; 17 stations, including the station connected to the north-south line)
North-south line: 18.9 km (18.9 km elevated tracks; 15 stations, including
the station connected to the east-west line)2) Track work3) Electrical and mechanical work4) Signal and telecommunication work, automatic fare collection system, etc.
5) Procurement of train cars (96 cars for 32 trains each consisting of threecars)
6) Consulting services (such as design review, bidding assistance, andsupervision of construction work)
The Japanese ODA loan covers part of the elevated section of theJapanese ODA Loannorth-south line as well as the underground section of the east-west lineof 1) and 2) to 5).
(4) Estimated Project Cost (Loan Amount)
The total project cost is \238,976 million (amount covered by the Japanese
ODA loan: \13,967 million)(5) Schedule
The Project is scheduled for March 2016 to June 2022 (76 months). The
commencement of putting facilities into use (June 2022) is considered thecompletion of the Project.
(6) Project Implementation Structure1) Borrower: President of India
2) Guarantor: None
3) Executing Agency: Gujarat Metro Rail Corporation Limited (GMRC)
4) Operation and Maintenance System: GMRC
(7) Collaboration with Other Donors: N/A(8) Environmental and Social Consideration/ Cross-Sectoral Issues/ GenderCategory
1) Environmental and Social Consideration① Category: A② Reason for Categorization
The Project falls into the railway sector and has the characteristics ofprojects that easily affect the environment and society as cited in the JICA
Guidelines for Environmental and Social Considerations (“JICAGuidelines”; promulgated in April 2010).
③ Environmental Permit
Indian domestic laws do not require the Project to compile a report on its
environmental impact assessments (EIA), but the Project compiled such areport, and the report was approved by the Gandhinagar-Ahmedabad
Urban Railway Corporation (current GMRC) in November 2014.
④ Anti-Pollution MeasuresDuring construction work, measures such as water sprinkling, wastewater
treatment, disposal of surplus soil, and the installation of sound-insulating
walls will be taken mainly to protect air and water quality, manage waste
properly, and reduce noise and vibration so that the Project satisfies
India’s domestic emission and other environmental standards. After thestart of the Project, measures such as the installation of noise-blocking

Japanese ODA Loanwalls and layers of elastic rubber under the tracks will be taken to reducenoise and vibration as required. With respect to the effects ofunderground construction work on the ground, geological surveys will beconducted, and soil improvement work will be performed as required, andin addition, the shield method will be used to prevent the ground fromloosening and underground water from flowing into the construction site.
Thanks to these measures, serious effects due to ground subsidence are
not expected.
⑤ Natural Environment
The project target area does not fall within national parks and other easily
affected areas or their vicinities, and it is assumed that undesirable effects
on the natural environment are minimal.
⑥ Social Environment
The Project involves the acquisition of about 95.0 ha of land (includingabout 9.6 ha of private land) as well as the non-voluntary relocation of4,802 residents in 1,787 households and the economic relocation of 480
locations. GMRC started consultations with landowners and residents andproceeds with the resettlement process in accordance with theResettlement Action Plan prepared to comply with the JICA Guidelines,
the Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013, and the Gujarat state
government’s resident relocation policy, and so forth. The relocation isexpected to be completed in August 2020. In the consultations withGMRC, residents expressed their opinions, demanding the provision ofsufficient compensation and resettlement sites with well-developed
infrastructure for relocation, and the Corporation is taking steps forcompensation and resident relocation reflecting the requests of affectedpeople. These affected people have not raised particular objections to theimplementation of the Project.
⑦ Other/Monitoring
In the Project, GMRC is monitoring the quality of air and water, waste,noise, vibration, land acquisition, non-voluntary resident relocation, andso forth.
2) Cross-Sectoral Issues① Projects to Combat Climate Change
The Project, which aims at relieving traffic congestion caused by use of

Japanese ODA Loanautomobiles and other vehicles by constructing a large-volume,
high-speed transport system, contributes to reduction in GHG emissions.
The effects of climate change mitigated by the Project are equivalent toapproximately 57,273 tons of CO2/year.
② Promotion of Poverty Reduction
In the Project, consideration is given to low income earners when fares
are set.
③ Measures for Infectious Diseases, Including AIDS/HIV
A large number of migrant workers are employed in the Project.
Experiences in similar projects in other cities indicate that they areexposed to HIV infection risks when they are away from their families andengaged in long-term construction work. GMRC is working with NGOs toengage itself at its own expense in activities for preventing AIDS/HIV
while referring to the measures taken for Delhi Metro. At the same time,by including AIDS/HIV prevention clauses in bidding documents, it seeks
cooperation from contractors in taking measures to prevent workers fromcontracting AIDS/HIV.
④ Participatory Development and ⑤ Consideration for Persons withDisabilities, etc.
In accordance with India’s domestic laws and ordinances, the Project
gives consideration to elderly, disabled, and other socially disadvantaged
persons when designing station buildings and passenger cars (such as
escalators, lavatories, announcements, braille blocks, and wheelchairspaces), and customer care training is being provided to all frontline staff
members, including station clerks and crew members.
3) Gender Category: GI (S) (gender activity integration project)<Details of Activities/Reason for Categorization>
Reason for Categorization: The Project’s efforts to ensure that women
can use subways in a safe and comfortable way include introducing
vehicles exclusively for women, setting priority seats for women and otherpassengers who require support, installing CCTV cameras in stationbuildings and trains, providing low hand straps, and employing female
guards to be assigned to all stations. For these measures, the Project isclassified a gender activity integration projects.
(9) Other Important Issues: N/AJapanese ODA Loan

4. Targeted Outcomes(1) Quantitative Effects1) Outcomes (Operation and Effect Indicators)
Baseline(Actual value inTarget (2024/25)[Expected value two years2015/16)

after project completion]―

North-south line: 92
East-West line: 92―

North-south line: 21.316
East-West line: 26.902

Number of Running Trains(No. of trains/day, one direction)―

North-south line: 376
East-West line: 452

Volume of Transportation (millionpersons-km/day)―

North-south line: 1.1
East-West line: 1.4

Passenger revenue(million rupees/day)―

North-south line: 5.2
East-West line: 6.5

North-south line: 70.0
East-West line: 97.5

North-south line: 40.0
East-West line: 42.0

Indicator

Operating rate (%/year)
Running Distance (1,000 km/day)Average Travel Time (minutes)(2) Qualitative Effects
Qualitative effects include improving traffic conditions in the Ahmedabad
metropolitan area, easing pollution caused by traffic, mitigating climatechange, increasing convenience by ensuring that people and vehicles cantravel within the range of a standard travel time, and stimulating economic
development in the urban city.
(3) Internal Rate of Return
Based on the assumptions listed below, the economic internal rate of return(EIRR) for the Project is 14.56%, and the financial internal rate of return(FIRR) is 2.65%.
【EIRR】
Cost: Project and operation/maintenance costs (all excluding taxes)
Benefits: Operation and maintenance cost reduction effects for means oftransport (including bus transport) and roads (eased road congestion);travel time reduction effects for users of Ahmedabad Metro and othermeans of transport; fuel and vehicle maintenance cost reduction effects;
and traffic accident and pollution reduction effects

Japanese ODA Loan

Project life: 30 years【FIRR】Cost: Project and operation/maintenance costs
Benefits: Passenger revenue, advertising revenue, and revenue fromin-station development
Project life: 30 years
5. External Factors and Risk Control(1) Preconditions: N/A(2) External Factors: Massive natural disasters shall not occur.
6. Lessons Learned from Past Projects
One lesson learned mainly from the ex-post evaluation of the Calcutta Metro
Railway Construction Project in India is that its executing agency’s commitment
is indispensable in order to carry out a project efficiently. In particular,consultations with project affected people should be started early on theexecuting agency’s own initiative. Among the metro railway construction projects
currently under construction, there are cases of delay of the project due to theresidents' lawsuit on land acquisition, which caused different claims of routealignment between the state government responsible for land acquisition and thecentral government / metro railway corporation. Ambiguity of the role of state
government for the project after dissolving its capital tie-up with metro railway
corporation is also the factor of the delay.
The state government has taken the initiative in planning and implementing
the Project. In carrying out the Project, GMRC and the state government takeresponsibility for land acquisition. Explanations to residents to be relocated havealready begun, and it has been confirmed that details of the Project andcompensation policy have been explained through visits to each household.
7. Evaluation Results
The Project is in accordance with the development tasks and policy of India as
well as the cooperation policies and analyses of Japan and JICA, andcontributes to developing regional economy and improving the urban
environment by reducing traffic congestion and its pollution. It also contributes totwo of the SDGs: Goal 11 “Make cities and human settlements inclusive, safe,resilient, and sustainable” and Goal 13 “Take urgent action to combat climate

Japanese ODA Loanchange and its impacts.” Therefore, the necessity to support the implementationof the Project is high.
8. Plan for Future Evaluation(1) Indicators to be Used
As described in Section 4 (1) to (3)(2) Timing
Ex-post evaluation is scheduled for two years after project completion.