India: Uttarakhand State Road Investment Program (Project 1)

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Lessons

Project-specific design and monitoring frameworks (DMFs) are essential to assessing the progress of each project/tranche in a multitranche financing facility (MFF)/investment program.

Some of the performance targets and indicators in the project DMF were aligned more with the MFF/overall investment program. A separate DMF that captures project-specific process characteristics and anticipated results was not prepared. Future tranches should address develop project-specific DMFs to enable a more accurate assessment of each project’s accomplishments and allow implementation progress to be tracked and adjustments to be made, as necessary.

Strong contract provisions on staffing and the mobilization and deployment of equipment and funds are key to ensuring satisfactory performance by contractors and consultants.

Significant delays in the completion of some of the civil works contracts were caused by the weak capacity and poor performance of the contractors. To address this challenge, a provision on interim liquidated damages based on progress was incorporated in the contracts for tranche 2 of the investment program. But as these provisions were not successful, the executing agency did not retain them in tranche 3. Contract provisions on the key factors affecting performance, including staffing, and the mobilization and deployment of equipment and funds, should be strengthened in future projects. Likewise, contract provisions addressing the determinants of consultant performance such as timely mobilization of key personnel and accountability should be enhanced to possibly include a deterrent to frequent personnel replacement.

Clear performance parameters and adequate provisions for emergency works enable effective delivery of post-construction performance-based maintenance.

Contractors’ performance in post-construction maintenance was poor due to the inadequate deployment of equipment and labor. Financial constraints because of the low-price quotations for these contracts proved to be a key reason. As they were generally oriented toward completing only the construction phase, contractors were not very knowledgeable about the requirements of post-construction maintenance. Additionally, while the supervision of performance-based maintenance contracts was a new territory for PWD staff, it was also difficult to determine contractors’ liability for damages caused by heavy rains, snow, or geological factors, which are prevalent in Uttarakhand. These issues were addressed in subsequent tranches by clearly stipulating in the post-construction maintenance contracts the performance parameters to be used and schedule of prices for emergency works. PWD staff and contractors’ training on performance-based contracts have also been undertaken.

Institutional capacity building for effective road infrastructure management takes long.

The infrastructure management consultant (IMC) engaged by the project provided useful findings and recommendations on how the PWD should be reorganized and capacitated to international standards. However, the IMC’s 1-year contract period proved inadequate in achieving the targets set under the infrastructure management component as well as in developing close interaction with the PWD senior management that would have resulted in a more dynamic learning and capability-building program. Building on the reports and the activities initiated by the IMC in project 1, consultants engaged under the subsequent tranches of the MFF have taken PWD institutional capacity development several notches higher.

Background

Over 90% of the terrain of the state of Uttarakhand in northern India is hilly and minimally connected through rail and air, making roads the lifeline of its transport system. But at project appraisal in 2006, about 30% of the state highways and major district roads and more than 70% of the other district and village roads needed repair or rehabilitation. The road network’s poor condition was primarily due to inefficient road asset management and inadequate funding.

To address the situation, Uttarakhand’s state government prepared a road development plan (RDP) that aimed to improve the 16,800-kilometer (km) state road network to national standards, maintain it in good condition, and develop the capacities of relevant institutions. At the request of the Government of India, the Asian Development Bank (ADB) approved in December 2006 a $550 million multitranche financing facility (MFF) to help finance the RDP. The MFF was to support the Uttarakhand State Road Investment Program, which included 7 sequential projects to improve and maintain for a minimum of 3 years 10,800 km of state roads and enhance PWD capacity, accountability, and transparency. The first of these projects, approved for $50 million in January 2007, had 2 planned outputs: (i) 570-km paved, repaired, or rehabilitated state roads; and (ii) improved PWD skills and operating procedures. These outputs were to be delivered through 2 main components—infrastructure improvement and infrastructure management.

Under project 1, 22 roads totaling 546.5 km were improved and provided with better safety features, culverts, bridges, and new bus bays and shelters. However, heavy rains and flooding during 2010−2011 caused landslides and road caving in several locations, triggering the termination of 4 of the 9 works contracts. The PWD employed emergency measures to reopen the roads to traffic, and with support from ADB, prepared a betterment program to address the premature pavement distress in some of the project road sections. Implementation of the betterment program, financed by the government, began in early−2013 but, due to disruptions from a series of natural calamities, was finished only in March 2014, during which time the ADB loan was already closed.

At completion, project 1 had reduced vehicle operating costs, travel time, and transportation costs. Transport services had increased in frequency and covered a wider set of destinations, boosting tourism and agriculture, the 2 main drivers of the economy. Roadside amenities had improved, yielding significant socioeconomic benefits for the communities.

The project also enhanced PWD capacity in design review, performance monitoring, quality assurance, road asset maintenance, and financial and project management. It supported the establishment of the PWD planning unit, and consultants under subsequent tranches have been helping the planning unit develop procedures for scientific planning and effective functioning. The infrastructure management consultant under project 1 delivered several reports that provided useful information and imparted an international outlook as to how the PWD should be reorganized and operated. Although not all the milestones under project 1’s infrastructure management component were achieved as scheduled, activities were carried forward under subsequent tranches.

ADB’s South Asia Department rated the project successful. Completion was extended once by 7 months; total project cost was $63.0 million, 14% lower than at appraisal; $40.3 million of the total cost was financed by the ADB loan.

PWD was the executing agency. A project management unit, under the PWD, took charge of day-to-day implementation.

Project Information

Project Name:

Uttarakhand State Road Investment Program (Project 1)

Report Date:

August, 2017

Main Sector:

Transport

Country:

India

Project Number:

38255-023

Themes:

Inclusive Economic Growth

Governance and Capacity Development

No gender elements

Sub Sector:

Road transport (non-urban)

Report Rating:

Successful