India: Rural Roads Sector II Investment Program (Project 4)

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Lessons

Appropriate contract packages, determined through a thorough market assessment and in close consultation with implementing agencies, can lessen procurement and implementation risks.

All the civil works contracts under this project were procured using national competitive bidding. The number of nonresponsive and single bidder responses was notably high in some states, compared with the other projects under the investment program. Repackaging and rebidding of such contracts slowed down the procurement process. Meanwhile, the ADB procurement review revealed that some contractors had been awarded more than one contract and that most of them submitted bids for multiple contracts within a district. This indicates weaknesses in the size of contract packages, which can be addressed in future projects through consultations with the implementing agencies and a better market assessment, with both taking a close look at the availability and capacity of local contractors.

Project Cycle Stage:

Implementation

Construction timetables need to consider all the factors that can influence progress of works.

Guidelines from the Prime Minister’s Rural Roads Program (PMGSY) stipulate a completion period of 12 months for each civil works contract. However, in Assam, contracts with multiple roads or those located in remote areas were given a longer contract period of 18–24 months. Notwithstanding the longer construction periods, an ADB mission in December 2010 found that several subprojects were significantly delayed in all the project states. Reasons for the delays included land and security issues, an unusually long and intensive rainy season in 2010, unavailability of materials in some states, slow progress in bridge constructions especially those financed solely by the government, and local demand for realignments. All the factors that could affect progress of works need to be discussed and worked out with potential contractors, prior to the awarding of contracts. This would enable better compliance to construction timetables and other contract terms.

Project Cycle Stage:

Preparation

Implementation

Development of the local contracting industry requires firm support from the government.

Some of the local contractors engaged by the project were small companies, lacking equipment, financial resources and/or skilled and qualified staff. The remoteness of some areas made mobilization and implementation more difficult for these small companies. For future projects, local road development authorities can explore providing more support for local contractors to perform better and make a good track record in the construction industry. Such support can be in terms of equipment, funds, and project management. In the meantime, the state governments should strengthen procurement planning and contract management procedures to ensure the proper and timely completion of subprojects.

Project Cycle Stage:

Preparation

Implementation

Continuous engagement of project implementation consultants (PICs) or seamless handover of PIC responsibilities is necessary to avoid gaps in environmental impact monitoring.

It is important to ensure the continuous engagement of PICs to avoid gaps in environmental impact monitoring activities. In future projects, if a new PIC is to be recruited, the start of the new contract should be immediately after or overlap with the existing PIC contract. The handover process should be seamless to avoid gaps in monitoring activities. Capacity building for PICs in environmental impact monitoring should be considered to ensure consistency in the quality of monitoring activities.

Project Cycle Stage:

Implementation

Background

Inadequate road connectivity had hampered the economic growth of rural India in the years prior to this program. To address the challenge, the government launched the Prime Minister’s Rural Roads Program (PMGSY) in 2000. The national program intended to upgrade about 738,000 kilometers (km) of rural roads to an all-weather standard at a total estimated cost of about $30 billion. Its budget requirement for 2006−2010 was estimated at $11 billion, 40% of which would be met by the government, and 7% by development partners including the Asian Development Bank (ADB). After one loan, the government requested for further ADB assistance under a new lending instrument—the multitranche financing facility (MFF). ADB approved its first MFF in December 2005, with an allocation of up to $750 million, to support India’s Rural Roads Sector II Investment Program.

ADB approved the first tranche of the MFF for a $180 million loan in July 2006, the second tranche for a $77.65 million loan in March 2008, and the third tranche for $130 million in September 2008. The Rural Road Sector II Investment Program – Project 4, the focus of this report, was approved for a loan of $185 million in August 2009. The project aimed to (i) improve 3,111.62 km of rural roads in the states of Assam, Orissa, and West Bengal; and (ii) provide technical support consultancy services for the project. Its expected outcome was improved connectivity between rural communities and markets, district headquarters, and other centers of economic activity. This was expected to lead to reduced poverty and deprivation, and economic growth of rural communities near the project roads.

At completion, the project built or upgraded 2,975.23 km of rural roads—914.27 km in Assam, 1,458.7 km in Orissa, and 602.26 km in West Bengal. Civil works included the construction and/or upgrading of rural roads to full single-lane cross-sections with a 3.5 meter (m) roadway and 7.5 m formation width with bitumen surface, strengthening of existing culverts and bridges, construction of new bridges and cross-drainage structures, and provision of road furniture and safety facilities. Cement concrete pavement was constructed for the village or habitation sections.

Community participation was ensured through consultations with all affected communities and the installation of information boards in strategic public places. As a result, there were no complaints received from the affected communities. During implementation, 711 subprojects were selected. However, 11 subprojects were not successfully procured or implemented due to land issues, nonresponsive bids, and/or political unrest. These subprojects were excluded from the project scope.

Notwithstanding the shortfall in the total length of roads constructed or upgraded, the project was able to connect 1,224 habitations, which was about 14% higher than the target of 1,071 habitations, and benefited about 1.18 million people in the project area. Benefits from the improved road conditions were multiple. For example, while the average distance to the workplace increased by about 2 km, the average time taken to reach the workplace decreased by 0.5 hours. Travel time to health care facilities decreased by 40 minutes on average and by as much as 120 minutes during the rainy season in some habitations..

Access to transport services, such as goods vehicles and rural passenger services, also increased because of better road conditions. The daily public transport service to habitations increased by an average of 107% for buses, and 155% for jeeps, vans, and three-wheelers. Vehicle travel speed increased from 25 km per hour to 40–50 km per hour on the improved roads, significantly reducing travel time and vehicle operating costs (VOC). Along with other rural socioeconomic development schemes, the improved roads have brought and will continuously bring significant benefits to local communities, especially the poor.

As with the other projects under the investment program, the executing agency was the Ministry of Rural Development (MORD) at central level and the respective state governments at state level. The implementing agencies were the State Rural Roads Development Agencies.

Project Information

Project Name:

Rural Roads Sector II Investment Program (Project 4)

Report Date:

June, 2014

Main Sector:

Transport

Country:

India

Project Number:

37066-053

Report Type: