Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry:
India
Project:
Bihar National Highway Improvement Project (Phase 2)
Loan Agreement:
January 30, 2014
Loan Amount:
21,426 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
The road shall be roughly categorized into national highways (NH), state roads (SH), major district roads(MRDs) and local roads. In 2012, the National Highways in India constitute 76,818 kilometers, or about 2percent of the total 4.11 million kilometers of national road network. However, they bear about 40 percent oftransportation on the road network as a whole. In such a scenario, improving the new national highways andwidening 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) India’s Development Policies for the Road Sector and the Role of the Current ProjectIn the 11th Five-Year Plan (April 2007 to March 2012), the Government of India specifies the policy for a
combined development of national highways, mainly through the promotion of the national highway
1development plan (NHDP) , and the development of local roads. Recently the Government of India released
the 12th Five-Year Plan (April 2012 to March 2017), where road sector is successively given a priority and apoor capacity shall be continuously attacked. In the Plan, completion of on-going works on NHDP Phases I &II and constructing another 10,000 km of national highways are specified as the main targets.
Along with this, the Government of the State of Bihar formulated “Bihar Approach to 11th Five Year Plan”,
which stated that the State will achieve comprehensive growth through the improvement of roads. Especially,
4-laning of NHs in the State is listed as one of the main challenges to be addressed and the Project is alsomentioned in the Approach paper.
(3) Japan and JICA’s Policy and Operations in the Road Sector in India
In the Japan’s Country Assistance Programs for India (May 2006), the “promotion of economic growth” wasidentified as a priority area. In response to this, JICA has adopted “support for sustainable economic growththrough improvement of the economic infrastructure” as a priority sector. JICA’s policy is to support
improvements in the efficiency of passenger and freight transport through the sustainable development ofintercity core traffic networks, the elimination of bottlenecks and the establishment of logistics hubs and tosupport economic and social development in India. This Project is consistent with these policies. JICA has so
far approved 9 loan projects totaling 154.3 billion yen (4% of the total loan amount to India) for the road &bridge sector. As for technical cooperation, JICA is dispatching experts to Ministry of Road, Transport &Highways (MoRTH) and National Highways Authority of India (NHAI) to improve skills in the establishment,management and maintenance of expressway networks.
(4) Other Donors’ Activities
Recognizing that the realization of comprehensive growth requires development of the infrastructure in rural
areas where many poor people live, the World Bank has been providing funds for the Government of India’s
local road development plan. Recognizing the importance of the improvement of the infrastructure in thetransport sector, the Asian Development Bank (ADB) has also been supporting the development of local
roads especially in poor states (including Bihar) and northwestern states (including Mizoram, Assam, Manipurand Tripura).
(5) Necessity of the ProjectThough Bihar is one of the most impoverished states of India and 42.6 percent of the State's population lives
below the poverty line (in 2000), which is far higher than the national average of 26.1%, it has achieved aremarkable economic growth in recent years. In FY2011, Bihar’s GSDP(Gross State Domestic Product)
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NHDP 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 and most of the work has been completed during 11th Five-Year Plan (April 2007 toMarch 2012).

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marked a growth of 13.1%, which ranked first among all states in India for 2 years in row. With an increasing
population and economic development, the number of registered vehicles 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 of 388km for the entire India. It is therefore necessary to immediately
establish road networks to cope with the sharply increased demand for road transport.
The section covered by this Project links the intersection with NH83 at Gaya and eastern Bihar cities such asRajgir and Nalanda. NH83 is being developed into 4-lanes through JICA-funding “Bihar National Highway
Improvement Project” and runs between NH2 and NH28 which were both developed under National Highway
Development Plan (NHDP). In Rajgir and Nalanda, the new campus is proposed to be constructed under
Indian Government’s “The Revival Plan of Nalanda University,” towards which the Government of Japan isextending support.
As the traffic volume is expected to increase reflecting all these factors, it is essential to improve thetransportation by improving the main highways and constructing bypasses to overcome congestion and tosupport the establishment of an investment environment through the development of the road infrastructure.
Furthermore, the project contributes to adaptation to climate change.
Under such conditions, as the Project is obviously consistent with India’s development strategies and Japan’sand JICA’s aid policies, JICA’s support towards the Project is deemed necessary and relevant.
3. Project Description(1) Project Objective
The objective of this Project is to improve accessibility in the State of Bihar, through widening existing NH-82
and constructing bypasses to circumvent major downtowns located on the route, 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
This project involves 4-laning of National Highway 82 (Gaya to Biharsharif), which is a main arterial road in
Bihar, as well as constituting bypasses in congested areas.
1) Road construction (92 km of main road (including bypasses of about 11 km and 27 crossroads), 16 kmof service roads, etc.)
2) Consulting services (work supervision, environmental and social consideration support, etc.)(4) Estimated Project Cost (Loan Amount)
29,363 million yen (Loan amount: 21,426 million yen)
(5) Project Implementation Schedule
March 2014–February 2022 (98 months). The Project will be completed when the use of the facilities begins(February 2019).
(6) Project Implementation Structure1) Borrower: The President of India
2) Executing Agency: Bihar State Road Development Corporation Limited3) Operation and Maintenance System: Ministry of Road Transport & Highways(7) Environmental and Social Considerations/Poverty Reduction/Social Development
1) Environmental and Social Considerations(i) Category: A(ii) Reason for the Categorization: This Project is classified as Category A because it falls under thecategory 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 theConfirmation of Environmental and Social Considerations” (established in April 2002).
(iii) Environmental Permit: This Project requires the preparation of an environmental impact
assessment (EIA) report under India’s domestic laws, and environmental permission was obtained
from the Ministry of Environment and Forests in February 2011.
(iv) Pollution Control Measures: To prevent noise, dust and waste from harming to surroundings during
work, a) the construction is limited to daytime, b) low-noise work equipment is installed andcovered during operation, c) watering is done regularly and d) soil is disposed properly. With22)3)

regard to air pollution and noise in service, the installation of soundproof walls, tree planting andother measures are taken if needed.
(v) Natural Environment: Because this Project requires the felling of plantation forests during
construction, the State Forest Department will plant replacement trees. In addition, it is firmly
assured that no plan of widening road is planned along the within/around Rajgir Wildlife Sanctuary(particularly between 65.750 to km and 70.200 km), to keep the road along the sanctuary as it is.
(vi) Social Environment: Because this Project requires the acquisition of sites totaling about 336 ha(including 296ha of private land) and the relocation of about 1,166 households, the acquisition of
the sites and the relocation & resettlement of the residents with are carried out according to aresident relocation plan prepared and approved by the executing agency.
(vii) Other aspects/Monitoring: In this Project, the executing agency monitors pollution control
measures (air quality, noise, vibration, water quality, etc.), the impact on ecosystems, safetymeasures during the roadworks, the status of relocation of the residents, etc.
Promotion of Poverty Reduction: Of the residents affected by the Project, socially vulnerable individuals
can receive vocational training and employment support.
Promotion of Social Development (e.g. Gender Perspective, Measures for Infectious Diseases
Including HIV/AIDS, Participatory Development, Consideration for Persons with Disability, etc.):The
executing agency hires an NGO to carry out activities to prevent migratory workers from contractingHIV.

(8) Collaboration with Other Schemes or Donors
The project cooperates with NGOs to support the residents on their relocation, training and employment.
(9) Other Important Issues
1) As the Maoism group was previously active in the southern part of the State of Bihar, in the course ofproject implementation, a close communication with executing agency on public safety as well as PR
activities in order that Project continuously obtain a positive response from local residents are highly
needed.
2) 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.
4. Targeted Outcomes(1) Quantitative Effects
1) Performance indicators (operation and effect indicators)
Baseline(2011)

Indicators

Target (2021)(two years after projectcompletion)

Annual Average Daily Traffic (AADT)
13,321
23,428(PCU/day)Travel time (hours/vehicle) (Gaya –2.22
1.58Biharsharif)
Average speed (km/hour)
41.86
58.82
2) Internal Rates of Return
Based on the following preconditions, the economic internal rate of return (EIRR) of the Project is 27.24%,
and the financial internal rate of return (FIRR) is -0.45%.
EIRR
Cost: Project cost (excluding taxes), operating and maintenance cost
Benefits: Reduction in vehicle running costs and travel time
Project life:30 years
FIRR
Cost: Project cost, operating and maintenance cost
Benefit: Revenues from road charges
Project life: 30 years(2) Qualitative Effects
Promotion of local economic development, improvement of road traffic safety and comfort, improvement ofconvenience by ensuring punctuality when traveling, urban environmental improvement through the mitigationof traffic pollution and adaptation to climate change in the State of Bihar

35. External Factors and Risk Control
Political and economic stagnation/deterioration and natural disasters in India and the area surrounding theproject sites
6. Results of Evaluations and Lessons Learned from Past Projects
Based on the results of past projects involving the large-scale relocation of residents, it has been pointed outthat it is necessary to take measures to secure the means of livelihood and improve the living standards of thepeople who have to relocate. Under this Project, it is planned to place consultants and NGOs in the project
implementation system and comprehensively monitor the acquisition of sites and the relocation of residents
so that appropriate compensation and livelihood improvement measures will be carried out according to theresident relocation plan.
More presicely, the rehabilitation & resettlement plan BSRDC prepared with help of consultant will be carriedout by hired NGO. The progress of the plan will be feed backed into the consultant from the NGO andreported quarterly to JICA in writings, via BSRDC.
7. Plan for Future Evaluation(1) Indicators for Future Evaluation
1) Annual Average Daily Traffic (PCU/day)
2) Travel time (hours/vehicle) (Gaya – Biharsharif)
3) Average speed (km/hour)4) Economic internal rate of return (EIRR) (%)5) Financial internal rate of return (FIRR) (%)(2) Timing
Two years after project completion4