World Bank Document · 2018-12-12 · metropolitan capital budgeting process was incorporated in...

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 4310-IN

STAFF APPRAISAL REPORT

INDIA

THIRD CALCUTTA URBAN DEVELOPMENT PROJECT

May 2, 1983

South Asia Projects Department

Urban and Water Supply Division

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTSRs 1.00 = US$0.11

Rs 9.50 = US$1.00

Rs 1 lakh (105) = US$10,526Rs 1 crore (107) = US$1.05 million

GOI/GOWB FISCAL YEARApril 1 - March 31

MEASURES AND EQUIVALENTS1 millimeter (mm) = 0.0394 inches (in)

1 meter (m) = 3.2808 feet (ft)

1 kilometer (km) 0.6214 mile (mi)

1 square meter (m 2 ) = 10.7639 square feet (sq ft)

1 square kilometer (km2) = 0.3861 square mile (sq mi)1-hectare (ha)=0.01km2 = 2.4711 acres (ac) or 10,000 sq mI liter (1) = 1.0567 quarts liquid or

0.2642 US gallon (gal) or

0.9081 US quart dry (qt)I cubic meter (m 3 ) = 35.3147 cubic feet (cu ft)1 liter per capita = 0.2642 US gallons per capita per day

per day (lcd) = (gpcd)1 cubic meter per second (m3 /sec) = 264.1721 US gallons per second (gal/sec)

PRINCIPAL ABBREVIATIONS AND ACRONYMS

AMEU Appraisal, Monitoring, and Evaluation Unit of CMDACHIP Calcutta-Howrah Investment Program

CIT Calcutta Improvement TrustCMA Calcutta Metropolitan Area

CMC Calcutta Municipal CorporationCMDA Calcutta Metropolitan Development Authority

CMACP CMA-wide Complementary Programs

CMWSA Calcutta Metropolitan Water and Sanitation AuthorityCUDP I First Calcutta Urban Development Project (Cr 427-IN)

CUDP II Second Calcutta Urban Development Project (Cr 756-IN)

CUTP Calcutta Urban Transport Project (Cr 1033-IN)

GOI Government of India

GOWB Government of West BengalHIT Howrah Improvement Trust

RMC Howrah Municipal Corporation

HDFC Housing Development Finance Corporation

HUDCO Housing and Urban Development CorporationILGUS Institute of Local Government and Urban Studies

IWD Irrigation and Waterways Directorate - GOWBLGUDD Local Government and Urban Development Department - GOWB

MDP Municipal Development ProgramMFC Municipal Finance CommissionRGS Revised Grant StructureSURAD Shelter, Urban Renewal, and Area Development

TRIP Transmunicipal Infrastructure Program

INDIA FOR OFFICIAL USE ONLY



TABLE OF CONTENTS

Page No.

I. CONTEXT ......................................... ....... 1A. Impacts and Lessons of the Two Previous Investment

Programs (1973-1983) ............................ 3

B. The Emerging Framework for Urban Management andFinance ...................... ....... ...... 5

II. THE PROJECT ........................................... 9A. Objectives .................................... . . 9

B. Project Description ........... .......... ....... 10

C. Other Infrastructure Investments ................... 17

III. PROJECT COSTS AND FINANCING PLAN ...................... 19A. Cost Estimates ............ ... .... ............. . 19

B. Financing Plan .........00........................... 19C. Flow of Funds and On-lending Terms ................ 19

D. Additional Resource Mobilization .................*. 24

IV. PROJECT ORGANIZATION, MANAGEMENT, AND IMPLEMENTATION ... 24A. Key Executing Agencies ....................... 24B. Institutional Responsibilities ................ 26C. Implementation Schedule ........................... 26D. Land Acquisition ................................... 26E. Procurement ......... ... .......................... 28F. Disbursement ....................................... 29G. Accounts, Audits, and Reporting Requirements ....... 32H. Operations and Maintenance ......................... 33I. Monitoring and Evaluation .......................... 34J. Supervision and CMDA as Intermediary ............... 35

This report is based on findings of preappraisal and appraisal missionswhich visited Calcutta in June 1982, and in October 1982, respectively andon the contributions by CMDA's Appraisal, Monitoring, and Evaluation Unit.Both missions consisted of Messrs. Menezes, 11cCarthy, Pettigrew, Sengupta(ASPUW) and Turner, Consultant, assisted by Messrs. Menckhoff (ASPUW),Cohen (URBOR), D'Souza, Dillenberg, Jackson (Consultants) at appraisal.Ms. McReynolds and Ms. Reivuo-Yen, Secretaries, assisted in Washington, D.C.

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Page No.

V. FINANCIAL ASPECTS .................. o.. ............... . 35A. Calcutta Metropolitan Development Authority ........ 35B. Calcutta Municipal Corporation ..... 0-.............. 36C. Cost Recovery Measures .......... o................ 40D. Structural Adjustment of Municipal Finance ......... 46E. Affordability and Replicability .................... 49

VI. PROJECT JUSTIFICATION ................... ............ 50A. Summary ............................................ 50B. Distribution of Benefits......................... 51C. Project Risks .... ... ... .... . . . . ........ 52D. Approach to Ongoing Appraisal and Evaluation........ 53

VII. AGREEMENTS, ASSURANCES AND RECOMMENDATIONS ............. 54

ANNEXES

1. BACKGROUNDA. Urban Growth at the National, State, and Metropolitan

Level ........ e..... .. *.... .*.... **...... .. .. . ........ 59B. Bank Group Role and Experience in Calcutta........... 60C. Physical Achievements.............. ... .............. 62D. Highlights from Project Performance Audit (CUDP I)... 63

2. KEY EXECUTING AGENCIES, RESPONSIBILITIES, REORGANIZATIONA. Outline: CMDA, CMWSA, CMC, Municipalities........... 65B. List of Subcomponents by Key Executing Agencies...... 65

CHART 1 - Reorganization of CMDA..................... 70CHART 2 - Organization of the SURAD Directorate, CMDA 71

3. MUNICIPAL DEVELOPMENT PROGRAMA. Allocation of Funds.................................. 72B. Sector Service Delivery Norms........................ 73C. Physical Design Standards............................ 74D. Summary Appraisal of Typical Municipality (Barasat).. 75

4. LIST OF SELECTED DOCUMENTS AVAILABLE IN PROJECT FILE 81

5. TABLES (listed on next page)

6. MAPS

IBRD 16864 - Water Supply, Drainage and Sanitation InvestmentsIBRD 16865 - Transportation, Shelter, Urban Renewal, and Area

Development Investments

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Table 1 CMDA - Balance Sheet as of 3/31/80 through 1988Table 2 CMDA - Forecast Sources and Applications of Funds

1983/84 through 1987/88Table 3 CMC - Balance Sheet as at 3/31/80 through 1988Table 4 CMC - Income and Expenditure Statement as at 3/31/80

through 1988Table 5 CMC - Water Supply Operations: Sources and Uses of FundsTable 6 CMC - Consumer Survey and Metering ProgramTable 7 CMWSA - Sources and Uses of Funds (Operations)Table 8 RGS - Estimates of Potential Property Tax and Expected

Collection PercentageTable 9 RGS - Annual O&M and Other Recurring ExpenditureTable 10 RGS - Revised Grant StructureTable 11 MDP - Summary of Sector Investments over Project PeriodTable 12 MDP - Summary of Investments by SectorTable 13 TRIP - Summary of Sector Investments over Project PeriodTable 14 TRIP - Summary of Investments by SectorTable 15 CHIP - Summary of Sector Investments over Project PeriodTable 16 CHIP - Summary of Investments by SectorTable 17 CMDCP - Summary of Sector Investments over Project PeriodTable 18 CMDCP - Summary of Investments by SectorTable 19 TRIP - Cost Table 201 - Construction - Baranagar-Kamarhati

Water Treatment PlantTable 20 TRIP - Cost Table 202 - Renovation - Serampore Water

Treatment PlantTable 21 CHIP - Cost Table 302 - Remodelling - Transmissions MainsTable 22 CHIP - Cost Table 321 - Reconstruction - Durgapur Bridge

INDIA



I. CONTEXT

1.01 The Calcutta Metropolitan Area (CMA) with a 1981 census population of10 million, covers an area of 1,414 sq.km. It is the economic capital of the

Eastern Region of India with a hinterland that includes states adjacent toWest Bengal. Responsibility for metropolitan development rests with theState Government's Metropolitan Development Department and Local Government

and Urban Development Department (LGUDD). Both departments are headed by thesame Minister. LGUDD administers to the needs of Local Governmentstate-wide, with day-to-day administration carried out through a Directorate

of Local Bodiest and for non-CMA areas.. a Directorate of MunicipalEngineering. The Metropolitan Development Department overviews expenditureon development infrastructure investments in the CMA and the performance ofall Urban Development Authorities in the State. Local Government in the CMA

includes 2 Municipal Corporations (Calcutta and Howrah), 37 municipalities,and 165 panchayats (non-municipal urban areas). About one-third of the CMA

population live in the Calcutta Municipal Corporation area.

1.02 At the time of Independence and partition (1947), there was a massiveinflow of refugees from East Pakistan (now Bangladesh), mainly into the CMA.The city, after two earlier decades of neglect, regressed in its ability to

deliver even basic municipal services. A much publicized cholera epidemic in1958 confirmed its world-wide reputation for having the worst urban

conditions of any city of comparable size. The foundation of the CalcuttaMetropolitan Planning Organization in 1960 led to extensive studies andrecommendations embodied in the 'Basic Development Plan' (1966) that were notimplemented at the time owing to a lack of funds and the absence of a

cohesive institutional infrastructure.

1.03 During the 1960's, physical, social, and economic conditionscontinued to deteriorate. The number of 'bustees' I/ increased, and the

existing housing stock deteriorated due to the mas sive overcrowding andinadequate services. Only about 100 million gallons per day (mgd) of treatedwater was available to a small section of the population in the metrocore, onan intermittent basis. All sanitation, with the exception of a sewered areacovering Calcutta City, was in the form of service privies. This wasdependent upon , at best, an irregular collection for disposal. Solid wastemanagement was very inadequate. During the monsoon, extensive areas oflow-lying land that had by now become unplanned high density settlements,were continuously waterlogged due to an inadequate drainage system. Pavementdwellers and solid waste heaps forced pedestrians onto the streets furtheraggravating already difficult traffic conditions, resulting initially from

I/ 'Bustee' - local name for slum in which a 'thika tenant' (middle man) ownsstructures on long-term leased private land.

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insufficient road space. During this period, a major economic recession,

coupled with social and political instability led to GOI's active assistance

and to moves by the State Government to institute changes.

1.04 Since the early 1970's, the major instrument of change has been theCalcutta Metropolitan Development Authority (CMDA), created by the Governmentof West Bengal (GOWB) in 1970 and, subsequently, financially supported inpart by IDA. CMDA has:

(a) provided an overall institutional and intersectoralperspective on Calcutta's problems;

(b) developed a strategy to address urgent high priority needs;and

(c) provided an executing agency to carry out investments toreduce the most serious service deficits.

1.05 The creation of CMDA as a single metropolitan planning anddevelopment authority was a modification of the recommendations made earlierin the Basic Development Plan which favored a Metropolitan Planning Authorityand several functional Authorities. Of special significance was that ametropolitan capital budgeting process was incorporated in the State planningprocess, and the CMDA was made the agency for administering the capitalbudgeting process. CMDA has now evolved into an organization of over 4,000staff capable of executing an investment program of around Rs 60/80 croresannually.

1.06 To date, IDA has financed two urban projects, CUDP I 1/ and CUDPII 2/ forming part of CMDA's Five-Year Investment Programs, and an UrbanTra7nsport Project. 3/ Progress on CUDP I was slow. Under CUDP II, however,there was impressive progress on all fronts as outlined below. A backgroundnote on urbanization trends in India, West Bengal, and the CMA, and on theperformance of previous IDA-financed projects is in Annex 1. On the UrbanTransport Project, operational and financial performance has been poor incontrast to physical performance. A review mission in the field,simultaneously at the time of appraisal agreed with GOWB a specific programand management actions to be implemented forthwith. IDA has been advisedthat the appointment of a task force of GOWB officers to move into keypositions in Calcutta State Transport Corporation, the implementation of busand tram fare increases, and the specific assignment of transportationplanning responsibilities to CMDA, which were specified prerequisites fornegotiations have been completed by March 31, 1983. A Project Performance

1/ The First Calcutta Urban Development Project (Cr 427-IN, 73/74-79/80),with an IDA Credit of US$35 million equivalent.

2/ The Second Calcutta Urban Development Project (Cr 756-IN, 77/78-82/83),with an IDA Credit of US$87 million equivalent.

3/ The Calcutta Urban Transport Project (Cr 1033-IN, 80/81-83/84), with anIDA Credit of US$56 million equivalent.

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Audit Memorandum (PPAM) on CUDP I was completed in June 1982 (Report No.

4023). The highlights of this PPAM are reproduced in Part D of Annex 1.

1.07 The proposed Third Calcutta Urban Development Project (CUDP III) willcontinue IDA's assistance to GOWB with urban development in the CMA,particularly in the further evolution of the institutional and financialstrengthening programs aimed at expanded service delivery, as describedfurther in this report.

A. Impacts and Lessons. of The Two Previous Investment Programs (1973-83)

1.08 A retrospective view of earlier investments illustrates theinstitutional, physical, and financial changes that have taken place and alsopoints out some lessons which have been learned.

Institutional

1.09 When CUDP I was initiated in the early 1970's, there was a lack of

planning and implementing capacity in the CMA, in spite of the existence ofmore than 50 agencies, few of which had experience in the execution of large

engineering projects. Neither were there clearly defined responsibilitiesfor these agencies. The institutional response was for CMDA to take over

many responsibilities from the other agencies, or at best, to use them assub-contractors. The first five years were therefore focused onconsolidation of CMDA's authority, the development of its own capacity forexecution of large-scale engineering projects, and the restoration of a

measure of confidence after a period of crisis. The investments reflectedthe remedial nature and priorities set out in the Basic Development Plan.

1.10 By 1977, CMDA had emerged as a viable and visible institution aroundwhich a meaningful development program could be designed. Under CUDP II,development still focussed on construction schemes, although the project wasexpanded into other previously neglected sectors, such as health andemployment. A major effort was also made to improve and strengthen the legalframework and the managerial systems of both CMDA and the Calcutta MunicipalCorporation (CMC), in whose jurisdiction the bulk of investments were locatedand which would be responsible for the operation and maintenance of completedworks.

1.11 By the beginning of the 1980's, CMDA was increasingly subjected topublic evaluation and review. For example it was felt that (i) CMDA hadbecome too autonomous and powerful, and it was perceived as superimposed onthe existing structure of local Government; (ii) because of its apparentpreoccupation with the construction of physical infrastructure, too little

attention was given to its planning, monitoring, and evaluating functions, aswell as to fiscal discipline in the CMA; (iii) other agencies and

institutions remained underutilized and consequently became weaker; and (iv).too much centralization made it less responsive to the needs of thecommunity. Such criticism was an indication of the strength of CMDA and thepowerful position it had established, but it also indicated the need for CMDAto take a broader view of the CMA's institutional framework and its own rolevis-a-vis that of other agencies and local governments.

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1.12 The CMC too was cited as: (i) being unresponsive to public demands

for better operation and maintenance of civic facilities; and (ii) not

exercising financial discipline and consequently for being chronicallydependent on increasing amounts of GOWB subsidies. Successful implementation

of improved organizational and managerial systems over the past two years has

helped clarify the true state of the CMC's finances and its internal

institutional constraints. Further attention must now focus on: (a) moredisciplined administration and training of personnel; and (b) CMC's

commitment and adherence to action plans that would improve performance andensure that new facilities are properly operated and maintained.

Physical

1.13 CUDP I and CUDP II were primarily oriented to physical investments.CMDA's achievements in this regard are significant as described in Annex I,part C. For example, (i) nearly 35% or (2 million persons) of the estimatedCMA population who are living in slums have benefitted from the BusteeImprovement Program; (ii) with improvements at Palta Water Treatment Plantand the inauguration of the new treatment works in 1983/4, the CMA's watersupply will have increased from about 100 mgd in 1973 to 300 mgd, withgreater coverage under a much enhanced distribution network. Worthwhileprogress has also been made in several other sectors, such as drainage, solidwaste management, and health. Improvements in urban transport and in thedelivery of serviced urban land have been less significant, reflecting boththe severity of physical constraints, and the institutional fragmentation inthese two subsectors.

1.14 Although CMDA has developed an adequate capacity to execute physicalworks, there are still planning weaknesses. The consequences of theseweaknesses include the following two examples:

(i) Investments made in the high density areas of the metrocore,particularly CMC, are sometimes not well coordinated andfull benefits may not be derived from certain facilitiesuntil complementary works are carried out. For instance,development of secondary and tertiary water distzibutionand sewage collection systems lag behind the developmentof treatment facilities.

(ii) The geographic disparity in service levels between themetrocore (Calcutta and Howrah) and the rest of the CMAhas become more acute in all sectors. The CMA outsidethe metrocore has been absorbing nearly all the populationgrowth in recent times while infrastructure investmentshave mainly been concentrated in the metrocore.

Financial

1.15 Population growth and the operation, maintenance, and debt servicingfor infrastructure facilities completed during the 1970's have placedsignificant additional financial burdens on local revenues. However, therehave been inadequate increases of self-generated local revenues during the1970's, particularly in the CMC, and local government financial gaps have

become excessively large. During this period, the necessary steps were

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nevertheless taken to establish the le$al and administrative basis requiredto improve local resource mobilization in the 1980's (see para 1.21).

1.16 The estimated resource gap 1/ in 1981/82 for the CMA wasapproximately Rs 33 crores, or 53% of total CMA revenue expenditures, of

which Rs 16 crores was on account of CMC. When all assets under CUDP II are

completed and handed over (see para 5.02), the gap would increase by a

further Rs 10 crores. Included in this gap is an operation and maintenance

(0&M) cost of Rs 12 crores for CUDP I and II investments, of which Rs 9

crores faLls on CKC (see para 5.07). Because of the financial situation, newinfrastructure facilities have not been transferred from CMDA to local bodies

at the rate originally planned. Resource gaps are covered by grants fromCOWB. Although O&M had been identified as an issue during CUDP I and a

program of reform initiated under CUDP II, CMDA is still left with theresponsibilities of maintenance of plant and other completed infrastructure

as other agencies and local bodies have lagged in developiig their financialand technical capacity to take over these responsibilities. A program for

the transfer of assets, including all improved bustees in the CMC, has nowbeen established by GOWB, CMDA, and local bodies (see para 5.02). This

program is related to the targets set for improved local resource

mobilization.

B. The Emerging Framework for Urban Management and Finance

1.17 Drawing on the lessons of the 1970's, GOWB has reviewed and adjustedthe major thrust of the CMA development program in three principal areas: (a)institutional, (b) legislative, and (c) financial. This section outlines the

emerging framework and provides a setting against which to view the proposedproject.

1.18 Institutional Strategy. The State Government and CMDA have adopted,as part of a vigorous policy for strengthening local government, a two-tier(i.e., metropolitan and local) approach to the development of the CMA.

CMDA's predominantly executing role will be suitably restructured while itscoordinating, policy planning, monitoring and evaluating functions will be

reinforced. At the same time, GOWB intends to strengthen other institutionsand agencies participating in the development process within the CMA, andCMDA will become a major instrument for achieving such metropolitan-wideinstitutional strengthening.

1.19 Actions in institutional strengthening are oriented primarily to (a)redefine the responsibilities of CMDA, the municipalities in the CMA, and thevarious sectoral agencies, with the aim of rationalizing their relationships

and functions, and (b) reorient and strengthen the internal organizationalstructure and resource base of each of these agencies as appropriate. Theprincipal actions taken thus far include the following:

(a) CMDA's role has been adjusted in several ways: (1) CMDA has

been strengthened as a financial and policy intermediary with

1/ Defined as the difference between internally generated revenue receiptsand revenue expenditures.

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a strong Appraisal, Monitoring and Evaluation Unit (AMEU),(ii) its metropolitan planning function has been reorganized andis being strengthened; (iii) certain responsibilities such as forwater supply and sewerage are being transferred to other agenciesin order gradually to decrease CMDA's predominant role as anexecutive agency; and (iv) a time schedule has been prepared totransfer completed facilities to local bodies for operation andmaintenance (see para 5.02). CMDA's internal organisation,management, and finance systems have been strengthened over thepast four years (for instance, new accounting, budgeting, andmanagement information systems have been introduced).

(b) The municipalities have been given an expanded role in capitalbudgeting and in selecting their priority schemes within broadguidelines (technical and financial) set out by CMDA. Themunicipalities are carrying out detailed planning of selected

schemes and will subsequently have full responsibility forimplementation, operation and maintenance of investments intheir respective areas.

(c) The Calcutta Municipal Corporation's (CMC) internal organization,management and finance systems have been, and will continue to befurther strengthened. Already introduced are new accounting,stores control, and management information systems. Consultantsstudies on CMC maintenance organisation and procedures will havestarted by April 1983. The CMC strengthening program will bereplicated in other local bodies under CUDP III, starting withthe Howrah Municipal Corporation.

(d) A clear definition of the expanded and well-defined role andresponsibilities in the CMA institutional structure of varioussectoral agencies (such as the Calcutta Metropolitan Water andSanitation Authority (CMWSA), Calcutta Improvement Trust (CIT),Howrah Improvement Trust (HIT), and Irrigation and WaterwaysDirectorate (IWD)) has been developed by GOWB (see para 4.08).Action for further strengthening of these agencies will be takenunder CUDP III, following the pattern of previous improvementswithin CMDA and CMC.

(e) An integrated CMA-wide training program with special elementstargeted to specific agency/institutional requirements has beenformulated for inclusion in CUDP III (see para 2.22).

1.20 Legislation. New legislation, and amendments to existing legislationhave been introduced to: (M) increase the financial resources ofanicipalities and agencies; (ii) improve planning and control of land use;and (iii) strengthen local government. The following summarizes majorchanges in progress.

(a) The West Bengal Central Valuation Board Act, 1978 provides fora Central Valuation Board (CVB) for improved valuation of landsand buildings in West Bengal for the purpose of increasingproperty tax revenues. The CVB was established in 1979.

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(b) The West Bengal Town and Country (Planning and Development) Act,1979, notified on January 16, 1982 for the CMA, provides for

comprehensive land use planning and control in the CMA, and amongother things, specifies explicitly that the CMDA is the Planningand Development Authority for the CMA. CMDA's planning directoratehas been reorganized and strengthened.

(c) The Bengal Municipal (Amendment) Act, 1980, already in force,provides for strengthening local government state-wide outside

the jurisdictions of Calcutta and Howrah Municipal Corporationsthrough the appointment of state-level cadres, 1/ improved

property taxation, and other means for increasing municipalrevenues; for example: a surcharge on commercial buildings,a 'professional tax', etc.

(d) The Calcutta Municipal Corporation Act, 1980 and the HowrahMunicipal Corporation Act, 1980 are both expected to come intoforce during 1983, and provide tools to the local bodies for

improving their financial management and operations (see para1.21(a) and (b) below) while opening up opportunities for newrevenue sources (taxes on professional services, surcharge onthe property tax, etc.).

(e) The Calcutta 'Thika' Tenancy (Acquisition and Regulation) Act,1981, notified on January 18, 1982, provides for the acquisitionof 'Bustee' or 'khatal' 2/ lands held in lease by 'thika tenants'in Calcutta and Howrah, for the purpose of regulating suchtenancies, and for planned development and distribution of suchlands. Under the act, GOWB, having acquired the land, isempowered to recover from the "Thika Tenant" adequate monies formaintenance of civic services. Access to public areas by thecivic authorities for maintenance can now be legalized.Preparation of an inventory of land and structures, is underwayand is expected to be completed by about May 31, 1983.

1.21 Financial. Institutional and legislative changes which are either ineffect or underway, have been partly aimed at the ultimate objectives of:

(i) improving resource bases of local bodies; (ii) introducing betterfinancial management practices; and (iii) emphasizing the importance of costrecovery and operations and maintenance in the delivery of urban services.Following are certain major implications of these initiatives.

11 Each municipality is being provided with four officers coveringAdministration, Finance, Engineering, and Public Health, and funded bythe State Government. Recruitment has been slow but has accelerated inrecent months. It has however not been possible thus far to recruitengineers; interim support services in this field to the municipalitieswill be provided by CMDA.

2/ 'Khatal' - local name for milk-producing buffalo holding on leased land.

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(a) The CMC Act provides for the creation of a Municipal Fund

comprising several accounts which will permit better accountingcontrol for sources and uses of funds for certain categories of

civic services, e.g., water and sewerage, roads, and busteemaintenance. The act also enhances the ability of the CMC to:(i) augment revenues from property taxes through increases inthe assessment rates; (ii) raise other taxes; (iii) price waterto cover the cost of production, distribution, operation,maintenance, depreciation, interest, and other related costs;(iv) increase metered water connections; (v) secure all rightsover sub-soil water resources within the Corporation area; and(vi) license private tubewells.

(b) The HMC Act is modelled generally on the lines of the CMC Actexcept that there is no water pricing clause, as bulk supply andpricing thereof will be the responsibility of CMWSA for areasoutside the CMC. However, HMC is empowered to install blockmeters, or meters to premises for recording the consumptionof.filtered water. It may then impose fees for consumptionbeyond any limits which may be set by regulations. HMC willalso provide unfiltered water supplies for street washingand fire fighting.

(c) The Central Valuation Board (CVB) has begun to have an impactby assisting the CMA municipalities in: (i) the selection andretention of assessors; (ii) the issuance of guidelines forvaluation of properties; (iii) evaluation of property taxvaluations to take effect from April 1, 1983 in accordance withthe provisions of the Bengal Municipal (Amendment) Act 1980, and(iv) collection of current and arrears demand. GOWB now intendsto significantly reinforce the CVB through adequate staffingand appropriate powers to improve its effectiveness.

(d) Sectoral analysis of capital, operations, and maintenance costsin order to establish tariffs and prices were completed in October1982 for sectors which allow for direct cost recovery (seeChapter V, paras 5.27-5.36). CMC and the CMWSA have recentlycompleted an analysis of required tariffs and charges for theprovision of water, sewerage, and drainage services within theirrespective jurisdictions. Revised pricing for land developedunder the first two projects at Bhaishnabagata Patuli (BP) andEast Calcutta (EC) reflects a commitment to full cost recovery andaffordability in the shelter sector. Public transport is beingaddressed through the First Calcutta Urban Transport Project whichseeks to improve the financial and operational performance of theBus and Tram companies (see Annex 1, para 8).

(e) A West Bengal Municipal Finance Commission (MFC) (See Chapter V,para 5.37) issued its report in March 1982. The MFC reviewedthe organization, management, and financing of all municipal

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bodies in the State and made broad recommendations 1/ fornecessary improvements, partly drawing on the experience under

CUDP I and II. Proposals were made to augment municipal revenues,improve the operating efficiencies of local bodies, and alsoaccounting, collection, organizational and management improvementsto municipalities. The principal recommendations have been

implemented and the State Government is addressing itself to theremaining recommendations. The MFC's recommendation for a

Revised Grant Structure has already been adopted and designed indetail. (See Chapter V, para 5.37-5.45).

Summary

1.22 Given the size of the CMA and particularly the growth of some 37

municipalities outside the CMC and HMC, the process of institutional andfinancial reform must necessarily be gradual. Many institutional, technical,

and political constraints inhibit dramatic, immediate change in performanceand service provision. Nevertheless, the 10-year perspective of CUDP I andII suggests that considerable changes have in fact occurred. Pastperformance has set the stage for a concerted effort to build on the reformsof the 1970's and to improve the financing and delivery of urban services to

growing numbers of residents of the CMA.

II. THE PROJECT

A. Objectives

2.01 The primary objectives of CUDP III are:

(a) to continue and to consolidate the efforts set in motion duringthe 1970's and in particular to improve urban management in theCalcutta Metropolitan Area through a comprehensive approach

in which institutional and financial reforms go hand in handwith physical improvements; and

(b) to substantially increase the number of direct beneficiaries,particularly in the economically weaker sections of thecommunity.

2,02 Secondary objectives have been established within the two primaryobjectives. These are:

1/ These actions were designed to put into place an essential part of aviable framework for urban development. They provide an opportunity toGOWB to place local authorities, including the CMC, on a much sounder

financial basis and would thus reduce the financial drain on the statebudget.

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(a) to strengthen metropolitan and municipal government and otherinstitutions responsible for urban planning, management, andfinance;

(b) to emphasize investments that complete or complement earlierinvestments so that optimum benefits are derived;

(c) to rectify sectoral and spatial investment imbalances betweenthe Metrocore (Calcutta/Howrah), and the remainder of the CMA;

(d) to give high priority to the operation and maintenance ofexisting assets and new assets to be created, and to identifyand implement ways for doing so, particularly through improvedcost recovery and financial management policies;

(e) to continue to emphasize investments aimed at satisfying theminimum basic needs for urban services at affordable standards;

(f) to encourage the private sector to participate in development(for example, in prime locations where infrastructure and otherurban services have been or are being improved, with CMDA assistingin land assembly, rezoning land use at strategic locations, etc.);and

(g) to make greater use of institutional finance (such as thatprovided by the Housing and Urban Development Corporation (HUDCO),Housing Development Finance Corporation (HDFC)), and other agenciesin order to make a significant impact on critical subsectors such

as "shelter".

B. Project Description

2.03 The project comprises CMDA'S Rs 330.00 crore (US$347.30 million)five-year investment program (April 1, 1983-March 31, 1988), with theexception of Rs 42.00 crores (US$44.20 million) which represent cost and timeoverruns on the previous five-year investment program. On the basis of bothtechnical characteristics and institutional responsibilities for planning andimplementation, the project has been organized into four subprograms (seeTable 2.1).

(a) Municipal Development Program (MDP)(b) Transmunicipal Infrastructure Program (TRIP)(c) Calcutta-Howrah Investment Programs (CHIP)(d) CMA-wide Complementary Programs (CMACP)

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2.04 Just over six million persons are expected to benefit directly fromthese investments, of whom about 70% are in the EWS group. 1/ Financially,the project represents only an 8% increase in nominal terms over CMDA's

78/79-82/83 actual investment expenditure. In real terms, the proposedinvestment program represents a 12% reduction over the 78/79-82/83 actual

expenditures, reflecting a greater emphasis on institutional and financingstrengthening in the CMA and a recognition of the need to allow forincreasing cost of operation and maintenance.

2.05 Municipal Development Program (MDP). (US$98.90 million). Thisprogram, to be executed by the municipalities, seeks to deliver basicmunicipal services to the most deprived areas in each of 37 municipalities(4.2 million population) and the CMC (3.3 million) and HMC (740,000) within arange of service delivery norms and physical design standards, recommended byCMDA and which are affordable, and acceptable to IDA (see Annexes 3B and 3C).The program comprises investments at the 'ward' level. Improvements in watersupply, drainage, solid waste management, and service privy conversion willalleviate the most acute deficiencies. Local road improvements will improveaccessibility particularly during the monsoon. Improvements and expansion ofmarkets will ease the acute shortage of available space; increase economicactivity; and provide local authorities with increased resources throughrents and taxes. As part of these area-based improvements, slum areas(bustees) in each municipality will be upgraded with basic utilities: water

supply, drainage, sanitary latrines, brick-paved pathways, andstreetlighting.

2.06 Transmunicipal Infrastructure Program (TRIP). (US$42.60 million).This program provides for the planning and execution by CMDA of criticalinfrastructure in the water supply, drainage, sanitation, and transportationsectors, from which benefits will be shared by two or more municipalities.Examples of subprojects include a new 30 mgd water treatment plant andprimary grid at Barranagar Kamarhati, the renovation and expansion of anexisting water treatment plant and primary grid at Serampore; improvements toa major drainage canal and pumping station (Beliaghata-Krishnapur-BajolaKhal) and the first phase of a Truck Terminal (and eventual wholesale market)at Kona.

1/ About 45% of the CMA population, or about 4.5 million people, belong tohouseholds in the Economically Weaker Section (EWS), with a monthlyincome of Rs 350 (approximately US$37 equivalent) or less per household.At current prices households with a monthly income of Rs 350 or less areconventionally defined as EWS, based on information from the early1970's. However, CMDA now make the working assumption that householdshaving a monthly income of Rs 475 or less (approximately US$52 and themean-income of the conventionally defined LIC) are EWS. On this basisabout 60% of the CMA population or 6 million people wo Id fall in theeconomically weaker section.

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Table 2.1: FIVE YEAR INVESTMENT PROGRAM 1983/84-1987/88

(Rs Crores and US$ millions) /1

% ofRs. Crs. US$m Total

I. Municipal Development Program (MDP) 94.00 98.90 33

Water Supply 18.86Drainage 18.64Sanitation 14.48Bustee Improvement 8.29

Parks, Playgrounds 2.02Crematoria .79Transportation Infrastructure 22.35Markets and Community Halls 8.57

II. Transmunicipal Infrastructure Program (TRIP)40.46 42.60 14

Water Supply 23.62Drainage 4.97

Sanitation 8.37Transportation Infrastructure .50

Area Dev. - Kona Truck Terminal 3.00

III. Calcutta-Howrah Investment Programs (CHIP)87.66 92.30 30

Water Supply 16.43Drainage 5.42Sanitation 35.09Bustee Improvement 9.94

Traffic and Transportation 14.78

Urban Renewal and Bus Terminal 6.00 /2

IV. CMA-wide Complementary Programs (CMACP) 35.88 37.80 13

Shelter and Area Development 9.00 /2

Health 8.66

Small Scale Entrepreneur (SSE) 2.50 /3Anchal Development 11.51

Technical Assistance and Training 4.21

Subtotal 258.00 271.60 90Design, Supervision & Management 30.00 31.50 10

TOTAL PROJECT COST 288.00 303.10 100Spillover (Cost and time overruns

on previous program) 42.00 44.20

TOTAL INVESTMENT PROGRAM Rs 330.00 347.30

/1 Includes contingencies.TZ Seed capital only.

/3 Establishment costs and interest rebate only. Loan funds to beprovided by commercial banks.

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2.07 Calcutta/Howrah (Metrocore) Investment Programs (CHIP). (US$92.30

million). Two levels of investments will be made within the jurisdictions ofthe CMC and the HMC. In addition to the MDP (para 2.05) to be implemented byCMC and HMC at the ward level, CMDA will plan and execute (assisted asnecessary by the CIT/HIT) a broader program of investments, focused on theoptimization of existing infrastructure and recent new investments fundedunder CUDP I and II. In Calcutta, these will include, for instance (a) in

the water supply sector, further improvements to the Tallah-Palta System,improvement and extension of a secondary grid in Calcutta, bulk metering andleak detection; (b) in sanitation, improvements to four existing sewagepumping stations and provision of an alternate power supply as well as

improvements to three major drainage outfall systems; further attempts to

renovate the existing sewerage and drainage system (including sewer

cleaning), and an expansion of the ongoing Solid Waste Management Program;(c) in the Traffic and Transportation Sector, construction of key road linksto enhance the efficiency of the existing inner-city road network and

continuation of the Calcutta Traffic Engineering Project (CTEP), startedunder CUDP II to improve traffic management. CHIP investments in Howrah arealso focused on optimizing existing infrastructure. For example, Rs 8 crores

or nearly 50 percent of the funds for Howrah are allocated for the provisionof house connections to the sewerage network and Howrah sewage treatmentplant funded under CUDP I and CUDP II. Funds (Rs 6 crores) are included for'seed capital' for Urban Renewal Schemes in both Calcutta and Howrah.

Selective intervention by CMDA (or agencies on its behalf) will be made atstrategic areas, already subject to speculative pressures, for example

adjacent to the Metropolitan Transport Project (underground rapid transit)stations (see para 2.25) to facilitate the further development of these areas

by the private sector. For example, under CUDP II, IDA partly financedreconstruction of the Howrah Fish and Pan Market (to a podium level), which

included the acquisition and replanning of a significantly larger area (4.12ha) to integrate public facilities (tram and bus terminal, pedestrian subway)

with Howrah Railway Station, etc., all of which have been successfullyimplemented to date. High-rise commercial buildings are to be constructed

above the podium by the private sector. The sale by auction of development

rights for the first superstructure is expected to be completed during theperiod ending June 30, 1983 (see Chapter V, para 5.35). GOWB has agreed that50% of net surplusses earned on the sale of development rights of urban

renewal will be placed in a fund for implementing a shelter program in theCMA (see para 2.09).

2.08 CMA-wide Complementary Programs (CMACP). (US$37.80 million). Theseprograms will be centrally initiated and coordinated by CMDA, but will

involve the active participation of other agencies and state governmentdepartments for their implementation. All five complementary programs wereinitiated under CUDP II. These are to be selectively expanded and modifiedin the light of experience gained to date. They include the following

programs.

(i) Shelter and Area Development

2.09 Implementation of sites and services programs has previously beenexcessively slow and troublesome because of organizational, administrative,and management constraints in addition to land acquisition problems. Thisprogram therefore has a two-fold objective: (a) to reorganize and strengthen

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the shelter and area development sector, with CMDA as the primary agencywhich will also assist and train other participating agencies in addressingthe massive shelter deficiencies in the CMA, and (b) to directly assist inaccelerating the availability of serviced urban land through the provision ofapproximately 25,000 serviced lots (one-sixth of the estimated incrementaldemand during the project period) affordable to a range of income groups.Land requirements over the project period have been identified (see para

4.10). The project will include 'seed' capital amounting to US$9.45 millionwith the balance (estimated at US$33.60 million) to be raised from

institutional sources (see para 3.08). The seed capital and 50% of the netsurpluses of Urban Renewal schemes will be placed in an "Area DevelopmentFund" in CMDA. The purpose of this fund is to initiate and sustain theconstruction program, and as and when adequate institutional finance isobtained annually, the fund would be replenished. The seed capital wouldthen be recycled to meet the investment needs for the following year (seepara 4.18).

(ii) Health Program

2.10 The proposed Health Program will expand the existing healthinfrastructure within the CMA, using the experience gained from the CUDP IIPilot Health Program. The objectives include: (a) expansion of thepreventive-oriented activities developed so far to include a targetpopulation of about 2,000,000 bustee/slum dwellers throughout the CMA area;(b) use of local part-time Honorary Health Workers (HHWs) working at thebustee level to promote and teach proper health and hygiene techniques; (c)maximum cost efficiency by utilizing existing resources, e.g., buildings,equipment, and personnel, and (d) community participation by utilizing localpeople in the planning, implementation and monitoring of the Health Programthrough the establishment of popular committees at each level of the HealthCare System.

2.11 The program will establish (i) 60 Ward Health Centers (one for every30,000 population) to provide curative, preventive services (HHWs, preventiveclinics, and family folders); (ii) 8 Polyclinics for small consultative,diagnostic, ambulatory, and curative services; (these will be financiallyself-supporting even with nominal fees as described in para 5.36); (iii) 15renovated Maternity Clinics with facilities to provide supervised deliveriesand Family Welfare/Planning Clinics; (iv) one Central Drug Center with 3Satellite Centers and (v) one Urban Health Training Center for all levels ofpersonnel.

(iii) Small-Scale Entrepreneur Program (SSE)

2.12 The GOWB place the highest priority on, and have consistentlystressed efforts towards increasing incomes and employment through the SSEprogram. This component aims to introduce into the formal banking system, asection of the community which hitherto has not had access to credit onreasonable terms, and to increase the involvement of the commercial bankswith the small-scale enterprise sector. This builds upon the successfulexperience of a similar scheme under CUDP II, where the repayment experience

for loans is exceptionally favorable, and the impact on incomes and

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employment in the borrowing enterprises has been substantial. The CMA targetgroup 1/ selected on income criteria have been estimated as follows:

Group Monthly Income/Family * No.of Families %

A up to Rs 350 46,000 27B up to Rs 600 80,000 47C above Rs 601 44,400 26

TT7T,( 1"u

* The 'family' concept has been adopted to help 'secure' loans moreeffectively through reliance on community pressure for repayment.

The project will address about 25% of each group or 42,600 families duringthe project period.

2.13 CUDP II experience is based mainly on Group A where commercial bankshave been granting 'differential rate of interest' (DRI) loans at 4%interest, and covered by a 90% guarantee against default by GOI. Therepayment record to date has been excellent, with only about 5% beingclassified as bad and doubtful, compared to some 15% experienced by the WestBengal State Financial Corporation with its 'established' medium

entrepreneurs. Banks are required to make such loans in accordance with aReserve Bank of India directive requiring banks to make DRI loans up to 1% oftheir total deposits. CUDP II did not address Groups B and C.

2.14 Under CUDP III, CMDA estimate that 25%, or 11,500 families, in Group

A will be eligible for DRI loans averaging Rs 2000 each, and aggregating Rs2.30 crores (US$2.40 million).

2.15 The main thrust of CUDP III however will be towards Group B whereCMDA estimate about 20,000 families, will have access to commercial creditfor the first time. The projected aggregate loans total is Rs 10.00 crores(US$10.50 million). A 'ceiling' of Rs 10,000 has been placed for each loanfor this target group. Provision is also made for a 'bonus' in the form of aone time interest rebate to be paid to borrowers who repay their loans onschedule. This facility would be available only for the first operation withany given borrower. To obtain a second loan, a borrower would have to paythe normal rates charged by the Bank. Thus, borrowers will repay their loansat 12.5% per annum. If they qualify for the bonus, the effective interestrate will be adjusted ex post to 8.25%. The bonus funds will be released byCMDA to the commercial banks after satisfactory documentation has beenfurnished that the loans are duly repaid. The commercial banks would thencredit the borrower's account with the bonus at 6-month intervals. The totalinterest rebate over five years on loans aggregating Rs 10.00 crores will beapproximately Rs 0.60 crores (US$630,000).

I/ These have been specifically identified by CMDA and include primarily:(i) already self-employed persons operating on 'kerbside' credit

(ii) self-employed persons relying on hire of tools, implements(iii) self-employable skilled and semi-skilled persons, needing

access to credit.

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2.16 GOWB has discussed this program will selected commercial banks.Based on these discussions and experience under CUDP II, GOWB confidentlyexpect to secure not less than Rs 10.00 crores to implement this program.Agreement was reached at negotiations that the interest rebate feature willbe reviewed annually by CMDA to determine its effectiveness; if it is foundunnecessary or ineffective, it would be discontinued.

2.17 As banks gain experience, it is expected they will increasinglyaddress all borrowers including those in Group C, who will receive loans at12.5% per annum. The average loan size will be about Rs 8,000 and loansaggregating Rs 9.00 crores (US$9.45 million) are expected to be made to11,000 families, or 25% of that target group.

2.18 To bring banks and borrowers together, CMDA will need to expand theCMA-wide network of teams working closely with the local banks, and communityleaders, and groups, to publicize the program and seek help in identifyingpotential borrowers. This type of help was stressed by the commercial banksas the most important assistance that they could receive. CMDA has alreadyfurnished IDA with a final staffing structure and organization chart forimplementing the program.

2.19 The project cost of this component includes: (i) the administrativecost of the SSE cell (Rs 1.90 crores), and (ii) the interest rebate cost ofRs 0.60 crores.

(iv) The Panchayat Development Program.

2.20 This an extension of the program started under CUDP II. The primaryobjective is the provision of minimum standard all weather road access, watersupply, and sanitation for the 165 non-municipal urban areas within CMA.Under this project, about 650 km of roads will be paved, about 2,000hand-operated tubewells sunk, and about 15,000 of the existing approximately65,000 service privies will be replaced with sanitary latrines. CMDA willimplement the program with the exception of the tubewells which will be theresponsibility of the panchayats. The aggregate cost of this component is Rs11.51 crores (US$12.08 million).

(v) Training and Technical Assistance Program.

2.21 The investments in Calcutta's infrastructure over the past decadehave imposed a heavy burden on the organizations involved and theirpersonnel. Both CMDA and the CMC have for some time run training coursesthrough their respective training centers assisted with advice and guidancefrom the Indian Institute of Management in Calcutta (IIMC). The concept anddesign of CUDP III, with its increased emphasis on the local bodies, willimpose even greater pressures on the GOWB for the development of personnelwith adequate supervisory, managerial, and other essential skills.

2.22 GOWB has recognized the need for systematic training of localgovernment personnel in the whole of West Bengal and in May 1982 set up anInstitute of Local Government and Urban Studies (ILGUS) which will help meetthis need. Metropolitan authorities like the CMDA, CMWSA, CIT, and HIT will

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also make use of ILGUS for training of their higher level personnel and forcertain other kinds of training. Recruitment of ILGUS staff is underway.

2.23 The total cost, including contingencies of the Technical Assistanceand Training component is estimated at Rs 4.31 crores (US$4.53 million). Theforeign exchange component is estimated at Rs 0.72 crores (US$756,000), whichwill go towards overseas training, foreign consultancy for ILGUS, requisitionof a portion of the library collection for ILGUS from abroad, and advisoryand consultancy services for CMDA. A significant portion of costs of theCUDP III training program are devoted to the establishment and trainingprogram of ILGUS which, in summary, has as its objectives: "(i) to create anawareness of the role of training as an intervention measure for improvingthe managerial competence of municipal bodies; (ii) to provide the trainingfacilities primarily for the municipal bodies but also for other urbanauthorities of the State; (iii) to provide consultancy services to its clientorganizations; and (iv) to build up a data bank and conduct research studiesin order to aid with the training and consultancy activities, and also tohelp the policy making authorities of Local Government and Urban DevelopmentDepartment of the State Government and municipal bodies in the urbanauthorities." I/ The overall training program is ambitious: ILGUS willattempt to directly train about 10,000 persons while the CMC Training Centerwill cater for another 10,000, and the CMDA Training Center for approximately2,000, making a total of about 22,000 personnel to be trained during theproject period.

2.24 CMDA would seek advisory and consultancy services for the following:(i) in the Water Supply, Drainage, and Sanitation sectors of about 20 personmonths of foreign experts; (ii) a CMA-wide Transport Study of about 120person months of which about 10 person months would be of foreign content;(iii) annual inspections of major infrastructure projects costing aboutUS$15,000 over the life of the project; (iv) technical assistance for themunicipalities in accounting and (v) organization, management, and financestudies for HMC and the larger municipalities. IDA has discussed andreviewed draft terms of reference for all the above studies.

C. Other Infrastructure Investments

2.25 The project will be implemented in the context of several othersignificant macro-infrastructure investments listed below, which arecurrently under construction and scheduled for completion at various dateswithin the project period. (See Map IBRD 16865). The major schemes,implementing agencies, estimated costs in 1982 prices and anticipatedcompletion dates are as follows:

1/ Quote from LGUDD's Terms of Reference for ILGUS.

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Project Responsibility Cost Due Date(Rs crores)

a) Metropolitan Metro Railway, Calcutta 680 Phase I 1984Transport (a subsidiary of Indian Phase II 1985Project Railways) remainder 1987

b) Second Hooghly Second Hooghly BridgeBridge Authority with CIT/HIT 170 1986(Princep Ghat)

c) Kalyani/Bansberia GOWB/PWD 8 1984Bridge

d) Belgharia GOWB/PWD 19 1984Expressway

e) Dum-Dum-Barasat Eastern Railways 5.5 1983Suburban RailwayExtension

f) Coal Gas Plant CMDA 30 1987/88and DistributionNetwork

g) TelecommunicationsRehabilitation Indian Ports & Telegraphs N/A 1987

2.26 Others such as the construction of a new Railway passenger terminalon the Howrah side of the Second Hooghly Bridge, are at an advanced stage ofplanning. All will have a significant impact on land use and values, andconsequently on local government financial resources, and will ultimatelycontribute to the overall efficiency of the CMA. Only limited efforts havebeen made to quantify the long-term implications of these major investmentson GOWB's future urban development resources. CMDA is actively involved asthe designated Development Authority under the Act (see para 1.20(b)) in thecoordination of strategic actions in relation to these investments, throughvarious traffic and other coordinating and liaison committees.

2.27 Funding for these investments is external to the CMDA Plan, andincludes various sources including direct GOI grants. Implementationresponsibility for all, except the gas distribution system, is with agenciesother than the CMDA. In defining and appraising CUDP III, close attentionhas been given to these external investments and institutionalresponsibilties, particularly in assessing the degree of institutionalreorganization required and the implementing capacity of CMDA and otheragencies.

2.28 During negotiations, it was agreed that CMDA will consult with IDA onany major changes proposed in its investment program for the period April 1,1983 through March 31, 1988 (as set out in Table 2.1).

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III. PROJECT COSTS AND FINANCING PLAN

A. Cost Estimates

3.01 Out of an investment program totalling Rs 330.00 crores (US$347.30million), the total project cost, including contingencies, is estimated atRs 288.00 crores (US$303.10 million). The foreign exchange component isRs 46.75 crores (US$49.18 million) or about 16% of project costs, withRs 7.36 crores (US$7.73 million) estimated as taxes and duties. Land

acquisition costs are estimated at Rs 6.12 crores (US$6.43 million). Summary

cost estimates are given in Table 3.1. Detailed cost estimates for eachsubprogram, by time and component are given in Annex 5.

3.02 Base cost estimates are in January 1983 prices. Cost estimates forabout 15% of project investments in civil works in the TRIP and CHIP

components are based on final engineering design. Cost estimates for the

remaining civil works in the above components are based on outline designsand the cost of similar works carried out recently in the area. Cost

estimates for MDP and CMACP schemes are based on final engineering design fora representative range of investments representing municipalities of varyingdensities, locations, and physical conditions. Estimates for equipment,vehicles, and materials are based on recent quotations from suppliers.

Average person-month costs for consultants services and technical assistanceare estimated at Rs 10,000 for locally procured services. Foreign

consultancy services will be required for advising CMDA in the water,sewerage, and transportation sectors, and are estimated at US$11,000 perperson-month, including contingencies. Physical contingencies have beenestimated at 10% for civil works with detailed engineering, and 15% for civilworks with preliminary engineering. No physical contingencies have beenapplied to land, hand-operated tubewells, equipment, vehicles, and consulting

services and technical assistance. Price contingencies have been estimatedat 8.0%, 7.5%, 7%, 6% and 6% for FY84 through FY88 for both foreign and localcosts, including land costs.

B. Financing Plan

3.03 The proposed IDA credit of US$147 million would finance about 50% of

total project costs net of taxes and duties. The credit would cover 100% ofthe estimated foreign exchange costs (US$49.18 million) and 39% of localcosts. The Financing Plan is set out in Table 3.2.

C. Flow of Funds and On-lending Terms

3.04 Retroactive financing not exceeding US$500,000 is recommended forexpenditures incurred after March 1, 1983 for civil works, equipmentpurchases, and consultants' services for engineering design.

3.05 The credit would be made available to GOI, which would pass it on toGOWB on its standard terms and conditions as part of the Central Governmentassistance to the state.

INDIATHIRD CALCUTTA URBAN DEVELOPMENT PROJECT

Table 3.1: PROJECT COST SURNARY

Program/Sector Local Foreign Total Local Foreign Total % Foreign 7 of TOTAL

- ---- Rs crores------ -----US$.millions---- EKchange BASE COST

A. MUNICIPAL DEVELOPMENT PROGRAM (Nib') 1/1) Water Supply 11.89 1.71 13.60 12.52 1.80 14.32 13

2) Drainage 12.10 1.64 13.74 12.74 1.72 14.46 123) Sanitation 9.60 1.34 10.94 10.10 1.41 11.51 124) Bustee Improvement 5.38 .73 6.11 5.66 .77 6.43 125) Parks, Playgrounds 1.64 - 1.64 1.72 - 1.72 -6) Crematoria .60 .04 .64 .63 .04 .67 67) Transportation Infrastructure 13.58 2.91 16.49 14.30 3.07 17.37 188) Markets & Community Halls 5.72 .66 6.38 6.02 .70 6.72 10

SUBTOTAL 60.51 9.03 69.54 63.69 9.51 73.20 13 36

8. TRANSMUNICIPAL INFRASTRUCTURE PROGRAMS (TRIP)1) Water Supply 14.49 2.97 17.46 15.26 3.12 18.38 172) Drainage 3.24 .44 3.68 3.40 .47 3.87 123) Sanitation 5.32 .91 6.23 5.60 .96 6.56 154) Transportation Infrastructure .39 .02 .41 .41 .02 .43 45) Area Development 2.10 .18 2.28 2.21 .19 2.40 8

SUBTOTAL 25.54 4.52 30.06 26.88 4.76 31.64 15 15

C. CALCUTTA-HOWRAH IMPROVEMENT PROGRAMS (CHIP)1) Water Supply 10.88 1.86 12.74 11.45 1.96 13.41 15 C2) Drainage 3.70 .49 4.19 3.90 .51 4.41 12 13) Sanitation 23.16 3.50 26.66 24.38 3.69 28.07 134) Bustee Improvement 7.14 .97 8.11 7.51 1.03 8.54 125) Transportation Infrastructure 9.92 1.18 11.10 10.45 1.23 11.68 116) Urban Renewal & Bus Terminal 4.23 .56 4.79 4.45 .59 5.04 12

SUBTOTAL 59.03 8.56 67.59 62.14 9.01 71.15 13 34

D. CMA-WIDE COMPLEMENTARY PROGRAMS (CMACP)1) Shelter & Area Development 8.65 - 8.65 9.11 - 9.11 -2) Health 6.73 .26 6.99 7.09 .27 7.36 43) Small-Scale Entrepreneur (SSE)

Program 2.07 - 2.07 2.18 - 2.18 -

4) Panchayat Development 7.76 .88 8.64 8.16 .93 9.09 105) Technical Assistance & Training 2.71 .61 3.32 2.85 .64 3.49 18

SUBTOTAL 27.92 1.75 29.67 29.39 1.84 31.23 6 15

TOTAL BASE LINE COSTS 173.00 23.86 196.86 182.10 25.12 207.22 12 100

DESIGN, SUPERVISION, MANAGEMENT 15.00 15.00 30.00 15.75 15.75 31.50 50 15PHYSICAL CONTINGENCIES 14.84 2.15 16.99 15.62 2.27 17.80 13 9PRICE CONTINGENCIES 38.41 5.74 44.15 40.43 6.04 46.47 13 22

TOTAL-PROJECT COSTS 241.25 46,75 288.00 253.00 49.18 303.08 .16 146

1/ Intersectoral allocations are subject to change on completion of appraisal of all municipalities,expected to be completed by April 30, 1983.

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Table 3.2: FINANCING PLAN 1983/84-1987/88

Rs US$FUNDS REQUIRED Crores millions %

Proposed Project

a) New Investments 258.00 271.60 78b) Design Supervision Management 30.00 31.50 9

Total Project Costs 288.00 303.10 87Spillover from previous plans 42.00 44.20 13

TOTAL INVESTMENT PLAN COSTS 330.00 347.30 100

SOURCES OF FUNDS

State Plan Funds (includes proceeds ofIDA credit) 171.40 180.40 52Minimum needs program 23.30 /a 23.40 7CMDA Market Borrowings 100.90 106.20 31

Octroi Receipts (net) to CMDA 35.40 /b 37.30 10

Total GOWB/CMDA funding 330.00 347.30 100

Estimate of institutional finance requiredby CMDA for shelter and area development 32.00 33.60

Commercial bank financing towardssmall-scale entrepreneur (SSE) program 10.00-20.00 10.50-21.00/a GOI Grant through GOWB.Lb Represents Rs 186.60 crores of gross octroi receipts less Rs 151.20

crores for debt service and sinking fund.

3.06 GOWB has designated CMDA as the agency through which all projectfunds would flow. Using the several sources of funds described in Table 3.2,CMDA would pass them on to implementing agencies and local bodies, or itselfconstruct assets which it would turn over to operating agencies oncompletion. CMDA's onlending rate to executing agencies would be based onthe cost of its borrowings over the project period currently expected to be7.75% a year, plus a half percent service charge, except in the case of urbanrenewal schemes where its rate would be the prevailing commercial bank rate(presently 12.5%). Agreement was reached at negotiations that CMDA willonlend at the prevailing commercial rate for urban renewal schemes, and atits projected weighted average cost of borrowing, plus a half percent servicecharge for other investments, but in no case less than 8.25% a year.

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Table 3.3(a): TERMS AND CONDITIONS OF ONLENDING

SECTOR GOWB TO CMDA TOCMDA LOAN TERMS AGENCIES LOAN TERMS

Urban Renewal 100% Loan 15 yrs. at 7% incl. 100% Loan 15 yrs. at market rate5 yrs. grace (presently 12.5%) incl.period. Interest 5 yrs. grace period.payable annually. Interest payable annually.Repayment of loan Repayment of loan inin equal periodic equal periodic paymentspayments combining combining principal andprincipal and interest (i.e., ordinaryinterest, (i.e., annuity).ordinary annuity).

Transmunicipal 100% Loan " 100% Loan 20 yrs. at 8.25% (incl.Water Supply 1/2% service charge)Projects incl. 5 yrs. grace period.

Interest payable annually.Repayment of loan in equalperiodic payments combiningprincipal and interest (i.e.,ordinary annuity)

Area On-site " On-site 15 yrs. at 8.25% (incl. 1/2%Development investments investments service charge) incl. 5 yrs.

100% loan, 100% loan; grace period. Interest pay-off-site off-site able annually. Repayment ofinvestments- investments loan in equal periodic pay-100% grant 100% grant ments combining principal and

interest (i.e., ordinaryannuity.

Transmunicipal 100% grant - 100% grantDrainage,Sanitation andTraffic &Transportation

Municipal 100% loan same as in 100% loan Same as in Area Develop-Projects: Urban ment (see above).Markets, Renewal above.Community Halls,and other commer-cial projectsincl. water sup-ply & sanitation

Other Municipal 2/3 loan & Same as in 2/3 loan & Same as in Area Develop-Projects incl. 1/3 grant. Urban Renewal 1/3 grant. ment (see above).parks, playgrounds,crematoria.Note: See Table 3.3(b) opposite for application of the above terms and conditions to the

project components.

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INDIA


Table 3.3(b): FLOW OF FUNDS AND ONLENDING TERMS FROM CMDA TO

LOCAL BODIES/IMPLEMENTING AGENCIES(Rs lakhs)

------------- SUB-PROGRAMS------------- Total Loan

Components MOP TRIP CHIP CMACP Total GrantTOTAL

Water Supply1885.62 2361.89 1643.35 - 5890.86

Grant - - - -

Subtotal 1885.62 2361.89 1643.35 - 5890.86

DrainageLoan 1249.17 - - - 1249.17

Grant 615.26 496.80 542.29 - 1654.35Subtotal 1864.43 496.80 542.29 - 2903.52

SanitationLoan 1129.12 33.43 947.56 - 2110.11

Grant 318.47 803.19 2561.93 - 3683.59

Subtotal 1447.59 836.62 3509.49 - 5793.70

Bustee Improvement

Grant 829.44 - 993.56 - 1823.00

Subtotal 829.44 - 993.56 - 1823.00

Parks, PlaygroundsLoan 135.35 - - - 135.35

Grant 66.66 - - - 66.66

Subtotal 202.01 - - - 202.01

Crematoria

Loan 53.02 - - - 53.02

Grant 26.12 - - - 26.12

Subtotal 79.14 - - - 79.14

Transportation InfrastructureLoan 1497.56 - - - 1497.56

Grant 737.61 49.97 1477.74 - 2265.32

Subtotal 2235.17 49.97 1477.74 - 3762.88

Markets and Community HallsLoan 856.51 - - - 856.51

Grant - - - -

Subtotal 856.51 - - - 856.51

Urban RenewalLoan - - 599.86 - 599.86

Grant - - - -

Subtotal - - 599.86 - 599.86

Shelter & Area DevelopmentLoan - 45.09 - 764.97 810.06

Grant - 255.51 - 134.99 390.50

Subtotal - 300.60 - 899.96 1200.56

Health

Grant - - - 865.86 865.86

Subtotal - - - 865.86 865.86

Small-Scale EnterpriseLoan - -

Grant - - - 250.34 250.34

Subtotal - - - 250.34 250.34

Anchal Development

Loan - - 1 1

Grant - - - 1151.04 1151.04

Subtotal - - - 1151.04 1151.04

Technical Assistance TrainingLoan - - - - -

Grant - - - 421.52 421.52

Subtotal - - - 421.52 421.52

TOTAL LOAN 6806.35 2440.41 3190.77 764.97 13202.50

TOTAL GRANT 2593.56 1605,47 5575.52 2823.75 12598.30

GRAND TOTAL 9399.91 4045.88 86b.79 JAe* zlnou.ov

/1 Excludes Design, Supervision, and Management Costs.

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3.07 The nature of the proposed investments would determine the mix ofloan/grant funds. Remunerative schemes for example, would be on the basis of100% loan; partly or fully non-remunerative schemes would have a grantelement. The terms and conditions of onlending for the project are shown inTable 3.3(a). Table 3.3(b) indicates the split between loans and grants ofeach component. As compared to virtually 100% grant in the past, there willoverall be approximately equal proportions of loan and grant (see Table3.3(a)). The reason for the 50% overall grant element is attributable to theinvestments in Sanitation, Bustee Improvement, Transportation Infrastructure,and Panchayat Development, which are normally funded from the generalrevenues of the State. The loan portion will be directly recovered from usercharges (see paras 5.27-5.35). The grant portion will be indirectlyrecovered through improvements to the general revenues of local bodies.Annex 2B lists the agencies and local bodies responsible for execution ofeach subproject or program.

D. Additional,Resource Mobilization

3.08 An important feature of this project is CMDA's intention and strategyto mobilize sources of finance such as commercial banks, public institutions,and the private sector. For example: (a) under the SSE program, CMDA expectsthe commercial banks to lend between Rs 10-20 crores, depending on theaggresiveness with which this component is pursued; (b) use of seed capitalfor shelter and area development (Rs 9.00 crores)(US$9.45 million) isexpected to generate a further Rs 32.00 crores (US$33.60 million) over theproject period from institutional finance (the estimate is the net cashrequirement for CMDA based on projected delivery schedules of serviced sites,and cash income from deposits, outright sale, etc.); and (c) Rs 6.00 crores(US$6.30 million) of seed capital for urban renewal schemes is expected togenerate substantial surpluses from the sale of development rights (ChapterV, para 5.35).

IV. PROJECT0RGANIZATION.,,MANAGEMENT,, AND IMPLEMENTATION

4.01 The project will be implemented by existing institutions and agenciesof the GOWB, and the commercial banks. The principal ones include the CMDA,CMC, HMC, CMWSA, CIT, HIT, and municipalities, and the State departments of(a) Local Government and Urban Development, (b) Irrigation and Waterways, and(c) Health.

A. Key-Executing Agencies

4.02 Key roles are played by: (a) CMDA, (b) CMC, (c) CMWSA, and (d) theMunicipalities. Annex 2A provides a brief summary on the organization ofeach of these. Organizational changes and staffing for each agency werediscussed during project preparation, and a timetable agreed at appraisal forcompletion of all necessary actions prior to negotiations. These are asfollows.

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4.03 CMDA has been restructured to reflect the nature of its future rolein accordance with Chart 1 in Annex 2. Of special significance is theestablishment of the Shelter, Urban Renewal, and Area Development (SURAD)Directorate Unit, specifically to address the problem of shelter, (Chart 2,Annex 2), and the setting up of regional and zonal offices (see para 4.06).Staff strengthening for CMDA as a whole, but especially for the AMEU andSURAD is progressing well and is being closely monitored. New recruitment isbeing focused on professional and technical skills hitherto in short supplyin CMDA. These include economists, physical planners, financial analysts,data processing operators and programmers. Confirmation was obtained atnegotiations that: (a) a revised staffing structure and organization of CMDAhas been approved by its Board and that a substantial number of keymanagerial positions had been filled, the remainder to be appointed by June30, 1983; and (b) that CMDA had issued a letter of intent with the HousingDevelopment Finance Corporation (HDFC), for two years of advisory andtraining services to assist CMDA's Shelter, Urban Renewal, and AreaDevelopment (SURAD) Directorate in developing its marketing, loanadministration, and financial management capabilities, starting not laterthan September 30, 1983.

4.04 The immediately critical staffing requirements of the CMC arespecifically related to:

(a) financial management, particularly in the area of propertytax (3 positions)(Chapter V, para 5.17);

(b) management of a water metering program, including surveys,(9 positions)(Chapter V, para 5.28); and

(c) two key staff for stores inventory and control.

During negotiations, confirmation was obtained that staffing for items (a),(b) and one of the two positions in (c) had been completed. The remainingposition would be filled by June 30, 1983.

4.05 CMWSA's operations and staffing are being strengthened to meet itsrevised role. Additional staffing has been approved by CMDA andprofessionals are being recruited, especially in the areas of revenueadministration, accounting, finance and maintenance. Confirmation wasobtained at negotiations that: (a) all remaining identified positions wouldbe filled by June 30, 1983; and (b) an accounting system already designed andimplemented had become partly operational from April 1, 1983, in accordancewith an operating schedule prepared by CMDA.

4.06 For the municipalities, the most critical support is that to beprovided by the CMDA through the establishment of two regional offices andfive zonal offices adequately staffed through reassignment of a proportion ofpersonnel from CMDA's existing cadres. About 75% of the staffing agreed atappraisal is already in place. The municipalities are also to receiveLGUDD's and CMDA's assistance in project management, financial controls, etc.This assistance will include advice in the recruitment of varying numbers oftechnical staff. These categories include: engineers, overseers,accountants, purchase clerks, works assistants, and draftsmen. Monitoring ofthe project will include a review of staff recruitment in accordance with theassessment made at appraisal.

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4.07 Given the nature of the investments, the pragmatic selection of

institutions and agencies for executional responsibility (Annex 2B), theprevious experience of CMDA, and CMDA's available expertise for extendingtechnical support to other agencies, project implementing capacity issufficient.

B. Institutional Responsibilities

4.08 Chart 4.1 sets out the institutional responsibilities for thedetailed planning (DP), execution (EX), and operation and maintenance (OM) ofmajor portions of the program under the project. A distribution ofsubprojects for execution by various agencies is listed in Annex 2B. Theallocations are made on the basis of each agency's agreed role andresponsibility within the evolving framework for urban management and financein the CMA. (see para 1.18).

C. Implementation Schedule

4.09 The project would be implemented over the period April 1, 1983 toMarch 31, 1988. Given the experience of CUDP II (Annex 1, para 7) and withthe formation of a specialized Program Management Unit in CMDA (para 4.31(a))to monitor both financial and physical progress of the Program, thistimetable appears realistic. Detailed engineering for sub-components to beimplemented during the first year of the project had been well advanced atthe time of negotiations. The phasing of construction and funds requirementsfor all subprojects and programs are given in separate summary tables by timeand component in Annex 5, Tables 11-22. Agreement was reached atnegotiations that at six month intervals, CMDA will update the individualsubproject implementation schedules in the light of progress being made, andprovide copies of these to IDA as part of progress reporting.

D. Land-Acquisition

4.10 Land acquisition has been a problem under CUDP II. Where possible,programs have been designed to totally eliminate land acquisition as in thehealth component (para 2.10). Under the MDP, land acquisition requirementsare limited. The shelter and area development program is the mostsignificant in land requirements. However, under CUDP III, CMDA hasidentified five specific sites for its SURAD program, all of which are now atvarious stages of acquisition. A specific timetable for land acquisition hasbeen agreed to by CMDA. The total land requirement for this subprogram inthe project for the next five years is approximately 760 ha (1,880 acres).

In addition, as a part of CMDA's long-term shelter strategy, it has alsobegun to acquire approximately 2,025 ha (5,000 acres) of heretofore non-urbanland along the Eastern Metropolitan Bypass where there is a large potentialfor future development.

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CHART 4.1: INSTITUTIONAL RESPONSIBILITIES

MUNICI- PANCHA- COMMERCIALCMDA CMWSA CMC HMC PALITIES YATS CIT HIT IWD ILGUS HEALTH POLICE BANKS

PROJECT/PROGRAMPLANNING EX

PROGRAM MANAGEMENT EX

PROJECT APPRAISAL/MONITORING/EVALUATION EXMDP:MULTISECTOR DP DP DPCOMPONENTS EX EX EX

OM OM OMTRIP:WATER SUPPLY DP DP

EX EXOM OM

SANITATION & DP DP DPDRAINAGE EX EX EX

OM OM

SOLID WASTE DPEXOM

TRANSPORT INFRAS. DPEX

OM OM OM

AREA DEVELOPMENT DP(TRUCKING SITE) EX OM OMCHIP:WATER SUPPLY DP DP DP

EX EX EX

SANITATION & DP DP DP DPDRAINAGE EX EX EX EX

OM OM OM OM

SOLID WASTE OP DP DPEX EX EX

O OM

TRANSPORT PLANNING DP

TRANSPORT INFRAS. DP DP DPEX EX EX

OM OM O OM

TRAFFIC ENGINEERING DP DP DPMANAGEMENT EX

OM OM

URBAN RENEWAL DP DP OPEX EX EX

OM OMCMACP:SHELTER DP

EX EX EXOM OM OM

HEALTH DP DPEX EX EX EXO OM OM OM

EMPLOYMENT (SSE) DPEX EX

PANCRAYAT DP DPDEVELOPMENT EX EX

OM

TRAINING DP DP DPEX EX EX

NOTE: DP = DETAILED PLANNING EX = EXECUTION OM = OPERATION & MAINTENANCE

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Assurances were obtained from CMDA during negotiations, that:

(a) it will have in its possession about 290 ha (718 acres) at thefollowing sites: (i) West Howrah--121 ha (300 acres) byJune 30, 1983; (ii) Baishnabghata-Patuli and East Calcuttaand Howrah extensions--88 ha (218 acres)--by December 31, 1983;(iii) West Howrah--81 ha (200 acres)--by February 28, 1984; and(iv) the balance--470 ha (1162 acres) by March 31, 1985.

(b) it will have completed detailed engineering and specificationsfor earthfilling at West Howrah by June 30, 1983; and

(c) it had secured tentative commitments from financial institutionsfor its area development program.

E. Procurement

4.11 Civil Works. The total cost of civil works, including contingencies,is US$215 million. Civil Works under the TRIP and CHIP programs total US$108

million, including contingencies. Within this latter amount about US$36million of works would be procurred through international competitive bidding(ICB), in accordance with the Bank's Guidelines. ICB procurement would berequired for (i) construction of the Baranagar-Kamarhati Water TreatmentPlant (including equipment), (ii) renovation of the Serampore Water TreatmentPlant (including equipment), (iii) construction of the new water main fromTallah to Central Calcutta, (iv) reconstrucion of Durgapur Bridge.1/ Biddersfor the above works would be prequalified in accordance with criteria alreadyagreed with IDA. Eligible domestic bidders would be afforded a preference of7 1/2% under ICB procurement. All these contracts are expected to be won byIndian contractors. Experience of ICE under CUDP II indicated that foreigncontractors did not even request prequalification. The balance of civilworks under the TRIP and CHIP programs totalling US$72 million, compriseinvestments in primary and secondary grids, staff quarters in water supply,improvements to existing sewage pumping stations and outfalls, rehabilitationof existing drainage canals, and bridge and road approach works in thetransportation sector. These would not interest foreign bidders as they arewidely dispersed over area and time, and will result in a large number ofsmall contracts. CMDA estimates these will comprise about 55 contracts ofabout US$400,000 and 500 contracts of US$100,000 and under. CMDA however,would, where practicable, group these works into contract packages of notless than US$2.6 million each, to be let on a "slice and package" basis undercompetitive bidding advertised on an all India basis in accordance withprocedures acceptable to IDA. Civil Works which cannot be grouped asindicated above, would be awarded under contracts following competitivebidding advertised locally, which are satisfactory to IDA.

4.12 Civil works under the MDP and CMACP components totalling US$107million, including contingencies, will be dispersed over the whole of CMA and

1/ See Annex 5, Tables 10 to 22 for detailed cost tables of items (i)through (iv).

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be phased over the implementation period, which will result in a large number

of small contracts. CMDA estimate that these works will require over 20,000contracts, grouped to the extent possible. These contracts would notinterest foreign bidders. The contracts will be let following localcompetitive bidding procedures, which are satisfactory to IDA.

4.13 Plant, Equipment, and Vehicles. Procurement of plant, equipment, andvehicles under the project totals about US$25 million equivalent, includingcontingencies. Contracts for about US$9.50 million for bulk meters, leakdetection equipment, gully pit-emptiers, jetting machines, tipping trucks,tanker lorries, tractors, payloaders and bulldozers, will be awarded by CMDA(and other executing agencies) on the basis of ICB in accordance withIBRD/IDA's guidelines. Qualifying domestic manufacturers would receive apreference in bid evaluation of 15% or the import duty, whichever is thelower. Contracts for pipes (US$8 million) and pumps (US$2 million) would beawarded by CMDA and other executing agencies under local competitive biddingprocedures, which are satisfactory to IDA. These involve a variety of sizes,distributed in space over the CMA and phased over the whole project period.Cars/jeeps (US$0.2 million) and miscellaneous solid waste equipment,including handcarts, tricycle trailers, containers, small tools (US$3.8million) which are readily available locally, and have well-establishedrepair and spare parts outlets, are also to be similarly procured. There arepractical difficulties in packaging these items into contracts large enoughto attract foreign bidders. Small items of plant, equipment, and materialsin packages of less than about US$10,000 and totalling about US$1,500,000,may be let after obtaining quotations from at least three suppliers.

4.14 Contract Review. All bidding packages for civil works estimated tocost US$500,000 equivalent or more, and all bidding packages for plant,equipment, and vehicles estimated to cost US$200,000 equivalent or more,would be subject to IDA's prior review of procurement documentation,resulting in a coverage of about 20% of the total estimated value of workscontracts, and about 66% of goods contracts. This will involve a review ofabout 59 contracts (21 equipment, 38 civil works). The balance of contractswould be subject to random post review by IDA after contract award.

4.15 Consultant's services totalling about US$3.5 million to be financedfrom the Design, Supervision, and Management allocation of the Project, willbe required for those major and more complex items for which consultancysupport is necessary: (i) Transmission main from Tallah-Auckland Square andS. Mullick Square; (ii) Abstraction and rain water mains from the RiverHooghly to the B.K. Treatment Plant; (iii) Improvement to the Ballygung andPalmers Bazaar Pumping Station; (iv) BK and Serampore Water Treatment Plants;and (v) truck terminal and traffic engineering schemes. Contracts forconsultants' services would be let in accordance with IBRD/IDA's guidelinesfor use of consultants.

F. Disbursement

4.16 Disbursement of the credit would be made against expenditures forcivil works, vehicles, equipment, and technical assistance and training.

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The credit would be disbursed as follows:

(a) 70% of total expenditures for civil works procured through ICB;

(b) 50% of total expenditures for other civil works;

(c) 100% of foreign expenditures of directly imported plant,equipment, and vehicles, or 100% of local expenditures (exfactory) of locally manufactured goods procured through ICB,and 50% for other locally manufactured goods; and

(d) 100% of total expenditures on consulting services, technicalassistance and training.

4.17 Disbursements would be fully documented except for: (a) payments madeunder civil works contracts for one or more progress payments not exceedingRs 300,000; and (b) payments for locally procured items of equipment costingRs 150,000 or less. Such disbursements would be made against statement ofexpenditures (SOEs), the documentation for which would nct be submitted toIDA but retained and made available for inspection during the course ofproject review missions. Agreement was reached during negotiations thatindependent auditors acceptable to IDA will be retained to carry out anannual audit of all SOEs submitted in a fiscal year, and CMDA will berequired to furnish the audit reports to IDA within nine months of the end ofeach fiscal year.

4.18 The "seed capital" of Rs 9 crores for Shelter and Area Developmentwould be placed by GOWB in an account to be managed by SURAD, in two tranchesof about Rs 5.00 crores and Rs 4 crores during FY83/84. CMDA will requirethese funds: (i to initiate its Area Development Program through a'revolving fund approach'; and (ii) to undertake a number of prerequisiteworks in order to attract institutional finance estimated at Rs 32 crores.The fund would be replenished: (a) from surpluses generated through theprogram, projected to commence in the fifth year-FY87/88-and (b) from 50% ofthe net surpluses from the urban renewal schemes. From FY87/88 onwards,deposits and outright sale of institutional, industrial, and commercial landcombined with the funds initially paid into the revolving fund less loanrepayments, will be sufficient to meet the annual investment needs of theprogram. After GOWB has made deposits to the revolving fund, IDA wouldreimburse its share (50%). Agreement was reached during negotiations thatGOWB would deposit the above amounts of Rs 5.00 crores and Rs 4.00 crores bySeptember 30, 1983 and March 31, 1984, respectively to initiate its CMDA'sArea Development Program. IDA would subsequently receive full documentationof eligible expenditures as per para 4.16(b) and para 4.17 to justify thepayments made.

4.19 A schedule of disbursements of the IDA Credit is shown in Table 4.1.The region-wide sectoral disbursement profile for the Urban Sector indicatesthat disbursements would cover a six-year period. Performance under CUDP IIwas somewhat better than the region-wide average. Based upon thesedisbursement profiles, it is expected that this credit will be disbursedwithin six years.

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Table 4.1: ESTIMATED DISBURSEMENT SCHEDULE

IDA Quarterly CumulativeFiscal Quarter Ending Disbursements DisbursementsYear (US$'000) (US$'000)

1983 June 30, 1983

1984 September 30, 1983 - -December 31, 1983 4,900 4,900March 31, 1984 3,500 8,400June 30, 1984 4,400 12,800

1985 September 30, 1984 5,800 18,600December 31, 1984 6,500 25,100March 31, 1985 6,800 31,900June 30, 1985 7,200 39,100




1989 September 30, 1988 4,400 139,400December 31, 1988 4,400 143,800March 31, 1989 3,200 147,000

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G. ACCOUNTS,, AUDITS, AND REPORTING REQUIREMENTS

4.20 Comprehensive accrual accounting and management information systemsfor CMDA and CMC were designed and implemented during CUDP II. As thedesignated funding agency for CUDP III, CMDA is adequately equipped to applythese systems on a wider basis. CMDA will manage and account for all fundsreceived from GOWB, plus its own market borrowings. It will release funds ininstallments to local bodies and implementing agencies and account forrepayments to it on debt service obligations of those bodies. For the TRIPand CHIP schemes which it will itself implement, CMDA will undertake detailedproject cost accounting. On completion, assets will be transferred to theoperating agencies in accordance with proper asset accounting and transferprocedures agreed with IDA and already in place.

4.21 CMC, CMWSA, CIT, and HIT are also adequately equipped to account fortheir activities, both capital and operating. CMWSA will implement, as fromJune 30, 1983, an accrual accounting system especially designed for a waterauthority.

4.22 All municipalities will separately identify project-relatedtransactions within their normal accounting and financial reporting systems.Where necessary, they will receive technical assistance through: (a) LGUDDthrough the transfer of qualified finance officers; (b) CMDA as part ofimplementation assistance; (c) accounting firms (see below); and (d) formaltraining programs run by the Institute of Local Government and Urban Studies(ILGUS).

4.23 As late as December 1979, IDA had not received any audited financialstatements and audit reports of CMDA despite being a covenanted requirementunder CUDP I and II. Starting in January 1980, CMDA has managed to bring itsaudits up to date and is now current under the provisions of CUDP II. IDAhas now received audited financial statements and audit reports of CMDA fromFY 72/73 through FY 81/82. CMDA has also submitted special auditcertificates covering its expenditures under SOEs up to March 31, 1980.

4.24 CMC likewise was in arrears in audits since 1971/72. Under CUDP IIit was required to submit its audited financial statements and audit reports,starting with FY77/78 within nine months of the end of each fiscal year.Commencing in June 1981, IDA has received CMCs audited financial statementsand audit reports from FY 77/78 through FY 80/81. Prior audits have alsobeen completed. The audit of its FY 81/82 accounts is expected to beprovided before June 30, 1983.

4.25 During negotiations, GOWB agreed to the following audit arrangementsunder the aegis of the Comptroller and Auditor General of India:

(a) CMDA's annual financial statements will continue to be auditedby the commercial wing of the Accountant General (AG) of WestBengal. The AG will also audit CMDA's statements of expendituressubmitted in lieu of documentation for some expenditures.

(b) Calcutta Municipal Corporation - by independent commercialauditors as at present.

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(c) CMWSA, CIT, HIT - by independent commercial auditors (for the

latter two agencies project accounts only would be audited).

(d) CMA Municipalities except Calcutta Municipal Corporation - byAG directly (or through the Examiner of Local Accounts). However,as financial management and accounting in the municipalities areare generally weak, accounting firms would be retained for at

least three years to assist in posting the accounts and year-endclosing.

4.26 During negotiations, agreement was reached that no later than ninemonths after the close of each fiscal year, CMDA, on behalf of the

implementing agencies and local bodies will submit to IDA, the auditedfinancial statements and auditors' reports together with an evaluation of theinternal controls and financial management of the agencies/local bodies,

accompanied by recommendations for improvements, if deemed necessary.

4.27 A comprehensive project monitoring and control system for CMDA was

designed and implemented during CUDP II. Since FY79, IDA has been receivingtimely quarterly progress reports from CMDA on CUDP II, as well as on theirnon-IDA financed investments. CMDA propose to computerize and extend this

reporting system to all agencies and local bodies participating in CUDP III,thus moving towards a standard reporting and control system throughout theCMA for urban development. During negotiations, agreement was reached with

CMDA that it will continue to receive quarterly progress reports promptly(within 60 days), after the end of each quarter, (starting on 11/30/83), onthe physical and financial progress of the investment program.

H. Operation and Maintenance

4.28 Appropriate levels of operation and maintenance and a proper pricingstructure for urban services are priority objectives of GOWB in CUDP III.GOWB agrees that full cost recovery within the overall program, to the extentpractical, is an essential element for replicability of the program, and alsoa prerequisite for proper operation and maintenance of both past and futureinvestments. Therefore, CUDP III is emphasizing: (I) assessment of adequatelevels of operations and maintenance expenditure; (ii) introduction ofmeasures to recover full costs, specifically for water supply, shelter,transportation; and (Iii) measures for possible indirect and partial costrecovery for such programs as health, latrine conversion, sewerage, and solidwaste.

4.29 Steps have been taken to implement measures which will ensure thatthe proposed levels of tariffs and taxes and related measures will generatesufficient funds to: (a) meet operations and maintenance costs, and (b)achieve capital cost recovery. Detailed financial implications are discussedin Chapter V.

4.30 There is also the need for improving physical maintenance standards.During negotiations, agreement was reached with GOWB and CMDA that a systemof regular inspections of installations will be introduced. Inspectionswould occur at intervals of time appropriate to the importance of theinstallation; for major facilities, inspections would be made annually.Government agencies with a record of good 0 and M would be engaged to make

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the inspections and their reports would be submitted to the appropriateauthority which would reflect the recommendations of the report in its nextbudget. Copies of these reports would be made available to IDA.

I. Monitoring and Evaluation

4.31 Under CUDP II, CMDA has been preparing and submitting regular monthlyreports to CMDA management and quarterly reports to IDA, primarily focussedon physical and financial performance. The nature and thrust of the thirdprogram requires further strengthening of the monitoring and evaluationfunctions. Three separate levels of program monitoring are to be carriedout:

(a) a CMDA Program Management Unit (PMU) will focus on the physicaland financial aspects of implementation, and when necessary,suggest administrative and organizational modifications andprocedures to ensure timely completion and handover. The PMUwill prepare monthly reports for management and quarterly reportsfor GOWB, GOI, and IDA. Detailed reporting formats suitable forcomputer application are currently under design by CMDA in con-sultation with the GOWB, Local Government and Urban DevelopmentDepartment (LGUDD), the Metropolitan Development Department andother implementing agencies.

(b) The Appraisal, Monitoring, and Evaluation Unit (AMEU) willmonitor performance on the programmatic goals and focus on thefiscal and socio-economic performance in terms of key indicatorssuch as: the actual and estimated operation and maintenance costs;the actual and estimated service delivery norms; the actual andestimated revenue collection and direct cost recovery; the actualand estimated rise in incomes and employment generation. Programevaluation formats developed by the PMU and sector-specificindicators being formulated by AMEU will provide the basis for thisperformance monitoring which will be carried out continuously.Annual progress reports will be submitted directly to the ChiefExecutive Officer of CMDA and GOWB, and would also provide a basisfor policy formulation for the sector and geographic focus of futureinvestment programs. AMEU has been given an independent statusand role within CMDA in its reorganization to ensure a degree ofindependent judgement. Agreement was reached during negotiationsthat CMDA will, at six month intervals furnish IDA with a progresssummary of appraisals, field surveys, and other activities carriedout by AMEU, and every twelve months (starting on 4/1/84), willfurnish IDA with a copy of AMEU's annual report and recommendations.

(c) The financial performance of the local bodies for the purposeof administering the Revised Grant Structure (para. 5.37-5.45)will be monitored by the Directorate of Local Bodies of LGUDDAgreement was reached during negotiations that GOWB will submitannually to IDA, a copy of the monitoring report to be preparedfor the administration of the Revised Grant Structure.

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J. Supervision and CMDA as Intermediary

4.32 At appraisal of CUDP II, it was estimated that IDA supervision wouldrequire 350 staff weeks over the project period. In practice, it isestimated that about 290 staff weeks will have been spent to completion.Supervision coefficients have been reduced from 98 staff weeks in FY79 to 31weeks in FY82. For this project, about 120 staff weeks of IDA supervisionwould be required for the project implementation period. Half of this willbe utilized over the first two years of project implementation, (i.e., 30staff weeks per year) during which there is expected to be significanttransition in the nature of the implementing institutions, and during whichprogram monitoring and evaluation procedures will be refined. Staff timewill be rapidly reduced thereafter. Bank staff inputs are to be concentratedon CMDA, which will play the key intermediary role.

V. FINANCIAL ASPECTS

A. Calcutta Metropolitan Development Authority (CMDA)

5.01 From the financial point of view, CNDA is a hybrid institution, beingneither financially autonomous, nor, strictly speaking, a State GovernmentDepartment. CMDA does not have financial autonomy because, apart fromreceipts from octroi allocated to it, it has no other source of revenue. Thedevelopment funds it receives are either passed on to implementing agencies,or used by CMDA to create assets which are turned over on completion to localbodies or operating agencies. Terms and conditions of funds it receives andpasses on to other agencies are set largely by GOWB.

5.02 Projected buoyant octroi receipts will ensure that CMDA will remain afinancially sound institution. Net surpluses from 1986/87 will give it ahealthier equity base. This should facilitate its ability to raise funds onthe commercial markets for commercial schemes such as urban renewal andshelter and area development. Since inception, CMDA has not handed over anycompleted assets to the respective local bodies or operating agencies.During negotiations, agreement was reached that for all assets completed upto March 1982, CMDA would transfer these to the operating agencies by April1, 1984. By September 30, 1984, and each year thereafter, CMDA would preparea list of completed assets to be transferred on each April 1 of the followingyear. GOWB would ensure that adequate provision was made by the operatingagencies for O&M and debt service (see para 3.07 and Table 3.3(a) and (b)).The actual and projected financial statements, which are given in Annex 5,Tables 1 and 2, take into account this phased program of transfer ofcompleted assets. Following up on the recommendations made by the MunicipalFinance Commission, in March 1982, GOWB has decided to write off its pastloans to CMDA except (i) loans for urban renewal (e.g., the Howrah Fish andPan Market); (ii) loans made for Transmunicipal Water Supply Projects betweenApril 1, 1981 and March 31, 1983; and (iii) on-site investments under AreaDevelopment projects.

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5.03 CMDA derives its financial resources from:

(a) GOI loans and grants (through GOWB);1/(b) GOWB loans and grants;l/(c) market borrowings (public sector);2/

(d) share of octroi receipts collected in CMA by GOWB;(e) charges for services;(f) capital recoveries for assets transferred to local bodies/operating

agencies; and(g) short term "bridging" loans.

5.04 CMDA is permitted to issue bonds which are bought by the publicsector and nationalized banks. In 1981/82 it borrowed Rs 12.10 crores for 15years at 7%. Future borrowings will rise at about 10% a year, at interestrates which increase at 1/4% each year. Repayment of its bond issues arethrough a Sinking Fund, which CMDA is required to maintain under the Town andCountry (Planning and Development) Act 1979.

5.05 CMDA receives annually 50% of collections on the 1972 Act relating totaxes on entry of goods into the CMA (i.e., octroi). In 1981/82, it receivedRs 20.25 crores. Receipts from this source are projected to rise by at least15% a year through the project period. Octroi funds are used primarily toservice CMDA's debts.

5.06 The project's capital expenditures are scheduled to begin with aboutRs 50 crores for the first year. This will rise to about Rs 70 crores in thefinal year. During the first three years of the program CMDA will alsocomplete the spillover projects from its previous programs, expendingapproximately Rs 15 crores, Rs 15 crores, and Rs 12 crores respectively.Based on the financing plan, the implementation capacity of CMDA and that ofother implementing agencies and local bodies, the investment program isrealistic.

B. Calcutta Municipal Corporation (CMC)

5.07 The financial statements for CMC, which are given in Annex 5, Tables3 and 4, show that in 1982/83 CMC expects to generate internally about Rs 27crores, or 53% of its revenue expenditures. GOWB subventions are estimatedto amount to about Rs 12 crores, or 24% of revenue expenditures. Octroireceipts of about Rs 11 crores, or 21% of revenue expenditures and grants forbustee services, Rs 1 crore, make up the balance of total receipts. Anoperation and maintenance liability for projects created by CMDA under CUDP Iand II amounting to Rs 9 crores a year has already been phased into theactual and projected expenditures, although formal transfer will commenceonly in 1984/85 (see para 5.02). The debt service on these past projects

I/ See para 3.05 and Table 3.3(a) for typical terms and conditions.

2/ Under Section 108 of the Town and Country (Planning and Development) Act,1979, CMDA is also permitted to borrow from the commercial markets.

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which would amount to Rs 8 crores a year, has been written off by GOWB as CMC

is clearly not in a position to take on this obligation.

5.08 Under CUDP III, CMC has been allocated Rs 11 crores for ward schemesunder MDP. The average annual incremental 0 and M and interest costs overthe project period are estimated at Rs 1.20 crores. Commencing 1988/89,0 and M and debt service (principal and interest) would amount to

approximately Rs 2 crores a year. Under CHIP, CMC would be responsible forservicing approximately Rs 27.80 crores of investments; water supply (Rs 8.50crores), sanitation (Rs 14.30 crores), and solid waste (Rs 5 crores). Theincremental operating costs are likely to be nominal as the investments areesentially improvements to existing facilities, or replacement. Theestimated annual debt service during the project period would be limited tointerest payments only and amount to an average annual cost of Rs 1.20crores. Debt service (including principal) and 0 & M costs from 1988/89onwards would amount to approximately Rs 4 crores annually.

5.09 The above points to a need for CMC to improve significantly its

financial situation. Legislation and management systems (see para 1.19(c)).are now in place and key vacant staff positions have been filled as of April,1983. The focus of improving CMC's finances can therefore be shifted toaction plans to achieve specific revenue increases/expenditure.

5.10 The overall objective is to reduce the required GOWB subventions froman estimated Rs 12 crores in 1982/83 (24% of revenue expenditures) to aboutRs 8 crores (10% of revenue expenditures) in 1987/88 at the end of theproject period. Assurances were obtained at negotiations that CMC will

achieve the above target, which will become a covenant to the legalagreements.

Revenues

5.11 The major source of CMC's 'own source' revenue is the consolidated

property tax which accounts for about 70% of such revenue. In 1981/82 itaccounted for about 37% of CMC's total receipts. Assessment of properties isbased on the annual rental value. However, these rental values are legallylinked to the West Bengal Premises Tenancy Act, 1956 which provides for rentcontrol. Hence, this tax is highly inelastic. In addition, properties arevalued within various valuation ranges. There is always pressure therefore,for revaluations to remain within the same ranges. The result is that amajor portion of the properties are assessed at under Rs 3000 annual rentalvalue, having a tax rate of not more than 18%.

5.12 Total assessments in 1981/82 of the approximately 140,000 propertieson the valuation roll was Rs 15.90 crores, representing 25% of the totalratable valuation of Rs 63.70 crores. Total ratable valuation had risen 50%during the previous five years, or at an average annual rate of 8.5%. Thiscovers both new properties and (limited) reassessment. The valuation roll isnot complete and an indeterminable number of properties of all types havenever been assessed.

5.13 The percentage of collection of current demand has declined from ahigh of 78% in 1960/61 to a low of 47% in 1974/75. Table 5.1 below indicatesan upward trend since 1974/75. Arrears collection has been rising at an

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annual average rate of nearly 13% over the past five years. The aggregate ofcurrent and arrears collection over the past five years has increased at anaverage annual rate of 7%. A discernable improvement took place between FY80/81 and FY81/82 when total collections increased by over 16%.

Table 5.1: DEMAND AND COLLECTION OF CONSOLIDATED RATE (CMC)(Rs lakhs)

Current Col 2 as Arrears Col 5 asYear Demand Collection % of Col 1 Demand Collection % of Col 4

1 2 3 4 5

1960/61 452.02 353.10 78.12 366.33 84.10 22.961970/71 860.07 549.80 63.93 1266.43 124.51 9.831974/75 1175.00 546.68 46.53 951.00 369.01 38.801980/81 1532.00 671.65 43.84 1661.00 673.35 40.501981/82 1590.00 925.42 58.00 1705.00 872.58 51.20

5.14 A recently completed exhaustive consultants' study of property taxreceivables as at March 31, 1980, estimates that there are Rs 23.71 crores of"good debts" (both current and arrear). CMC has agreed to complete ananalysis and write-off of the bad debts identified by the consultants, and toreflect in its FY1982/83 accounts, collectible receivables, less a provisionfor bad and doubtful debts. If a major portion of these debts could becollected, combined with a growth in the tax base, updating of the valuationroll, and improved collection performance, the financial state of CMC wouldbecome satisfactory.

5.15 Two pieces of recently enacted legislation could have a positiveimpact on property taxes. (i) The Central Valuation Board Act 1978 (para1.21(c)) provides for the Board to assume responsibility for valuation of allproperties in the State, and maintain the valuation roll. The recentlycreated Board is acting initially in an advisory capacity to local bodies,assisting in drawing up proper terms of reference for assessors, and lendingsupport in collection efforts. (ii) The new Calcutta Municipal CorporationAct 1980 provides for a straight line system of assessment between the lowestand highest rates in place of the "slab" system. 1/ Under the straight linesystem also, the lowest rate has been reduced from 15% to 11%; the highestrate increased from 33% to 40%. The Act provides also for the levy of asurcharge of up to 50% of the consolidated rate on commercial ornon-residential land or buildings. Estimates of up to a 30% increase intotal assessments have been forecast should the property tax provisions ofthe Act be implemented as currently expected.

5.16 The other major source of CMC's revenue is octrol, a tax on goodsentering the CMA, of which CMC's share is 25%. In 1981/82 it received Rs10.12 crores, or 21% of its total revenue receipts. This source is projectedto increase by at least 15% a year over the project period. Service charges

1/ The municipalities and Howrah Municipal Corporation would continue withthe "slab" system as provided for under the Bengal Municipal (Amendment)Act 1980, and the Howrah Municipal Corporation Act 1980 respectively.

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on property, taxes and fees on trades and professions, licenses, water

supply, solid waste, etc. of Rs 7.80 crores (16%), and GOWB's grants andsubventions of Rs 12.96 crores (26%) made up the balance of CMC's totalreceipts in 1981/82.

5.17 Clearly there is great scope for improvements in CMC's finances,especially its major source of revenue, the property tax. GOWE has agreed todepute suitably qualified staff for up to one year to assist CMC in theinitial phase of an action plan aimed to achieve the following:

(a) improve assessments of properties (working closely with CVB);

(b) update the valuation roll;

(c) improve collection performance; and

(d) collect on the additional sources of revenue, hitherto largelyuntapped, under the existing CMC Act, and on all sources of

revenue available under the new Act, once it comes into force

(see paras 1.20(d) and 1.21(a)).

5.18 The projected receipts, as given in Annex 5, Table 4, would beachieved through the following targets:

(a) The total rateable value of properties would increase from

Rs 63.70 crores in 1981/82 to about Rs 103 crores in 1986/87,a 61% increase, 1/ or 10% a year. This would be achievedthrough improved valuation (with participation of the CVB, ifnecessary) and updating of valuation roll. Correspondingly,the total assessed value, which has been conservativelyassumed to remain at 25% of the total rateable value, wouldincrease from Rs 15.90 crores in 1981/82 to about Rs 26 croresin 1986/87, also 10% a year.

(b) The percentage of collection of current demand of property taxwould rise from 60% in 1982/83 to 85% in 1987/88. CMC wouldcollect about 65% In 1983/84, rising by 5 percentage points ayear to achieve 85% in 1987/88.

(c) The percentage of collection of arrears demand of propertytax would be maintained at the 1981/82 level of 50%.

5.19 Agreement was reached at negotiations that CMC will achieve the abovetargets, which will become covenants to the legal agreements.

1/ The preceding five-year increase was 50%, or about 8.5% a year.

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Expenditures

5.20 The three major items of revenue (recurrent) expenditure are watersupply, solid waste, and administrative and support services, each accountingfor about 20% of CMC's total revenue expenditures. A study now underway onthe reorganization of the engineering departments of CMC is expected to leadto improved productivity and cost savings in the delivery of civic services.For some time it has been felt that too much manpower is still being used forthe operation of systems where technological changes have been incorporatedinto recently completed investments. This occurs, for example at those watertreatment plants where valves etc. are electrically operated in contrast tothe manned operation of older plants. CMC also plans to study routing andcollection systems under the solid waste component of this project.

5.21 Revenue expenditures for water supply, solid waste, andadministrative and support services are projected to rise at about an averageannual rate of 5%, 10%, and 10% respectively. These rates correspond to pastincreases. Debt service would be limited to interest payments during theproject period; the amortization of principal on CUDP III debt will begin in1988/89.

5.22 The combined effect of achieving the targets set out in para 5.18will be an increase in CMC's internally generated income over the projectperiod by about 14% a year. Octroi receipts are projected to increase at 15%a year over the project period (see para 5.16). Total revenue expendituresare projected to increase at an average annual rate of 10%. The net resultwould be a reduction in GOWB's revenue grants and subventions to CMC fromabout Rs 12 crores or 24% of CMC's total revenue expenditures in 1982/83 toRs 8 crores, or about 10% of total revenue expenditures in 1987/88. Theabove performance targets for CMC are incorporated into the Revised GrantStructure (para 5.36-5.44) together with targets for all CMA municipalities,and will be closely monitored by GOWB.

Financial Management

5.23 To ensure that CMC begins to operate on a financially viable basis,

confirmation was received during negotiations that CMC has already set up aVehicles Replacement Fund, and will deposit annually to that Fund amountssufficient to replace vehicles, plant, and equipment that it purchases fromFY82/83 onwards. IDA also received confirmation that CMC set up a SinkingFund for all its long-term debt.

C. Cost Recovery Measures

5.24 Performance on cost recovery under CUDP I and II has been poor. CMChas not recovered its covenanted percentages of costs for providing water onaccount of poor financial management. The sites and services program has not

yet advanced to the point of testing cost recovery.

5.25 In view of the large investments already made under CUDP I and II and

the proposed investments under CUDP III, the ability of the local bodies to

generate adequate funds for proper operations and maintenance is a primarydetermining factor in committing further investments, as illustrated above in

the case of CMC. GOWB has agreed to implement various measures to enhancecost recovery at the municipal level to the extent possible, through bothenhanced property tax revenues and direct user charges. In the past there

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has been little or no effort to achieve full cost recovery, either direct orindirect. Despite the introduction of the cost recovery measures discussedbelow, it is unlikely that in the short term full cost recovery on a sectorby sector basis can be achieved. The local bodies and the implementingagencies will continue to "sell" their services at below cost and the ensuingdeficits, albeit smaller than before will be met by transfer of resourcesfrom GOWB through a revised system of grants and shared taxes (see Chapter V,paras 5.37-5.45).

Property Taxes

5.26 Property taxes continue to be the largest source of internal revenueof the local bodies. In recent years, actual property taxes collectedaccounted for about 70% of internal revenues (excluding State Governmenttransfers), or about 45% of total revenues (including State Government

transfers) for all CMA local bodies. This significant source of revenue isstill plagued with problems like: (a) low assessment base, (b) inefficientrate structure, and (c) poor collection performance. These problems exist

not only in CMC but all other local bodies in CMA. Under the project,emphasis is being placed to maximize revenues from this source. This isbeing done through: (a) the CMC Act which specifically applies to the CMC, asdiscussed in detail in paras 5.11-5.19 before; (b) the HMC Act; (c) theBengal Municipal Act of 1932, which as amended in 1980, addresses financial

improvement measures in all other CMA municipalities; and (d) theintroduction of a Revised Grant Structure for the CMA municipalities, CMC andHMC where specific property tax assessment and collection percentageimprovements are being addressed (see paras 5.37 through 5.45). Under theBengal Municipal Act all local bodies (except CMC) in the State will haverevised their property tax assessment base by April 1, 1983. GOWB, will by

December 31, 1983 determine whether the municipalities' assessments areadequate and realistic. In case the assessments are found to be low, GOWBwill cause the CVB to carry out a general revaluation in those local bodieswhose tax base was found to be inadequate. The structure of the tax rates

have also been changed to reflect increased assessment rates for varyingslabs of valuation. In addition, the CVB will assist all CMA municipalities

on an ongoing basis in (a) updating their property tax roll and (b) improvingcollection performance. While the potential financial impact of the abovetwo measures is not yet determinable for the CMA municipalities, theseactions, for the first time, reflect a consistent approach towards improvingproperty tax revenues of CMA municipalities. One immediate improvement hasbeen that through CVB's assistance, actual collections in variousmunicipalities have gone up on an average of about 16% and the increase hasranged between 3% to as much as 170% in certain cases. Agreement wasreached at negotiations, that the CVB will carry out a general revaluation ofproperties in the local bodies where GOWB has determined that the assessmentis low.

Direct User Charges

5.27 Direct cost recovery measures have been agreed to for those sectorswhere direct pricing is possible. These sectors include: (a) Water Supply;(b) Area Development; and (c) Urban Renewal. In the light of the extensiveinvestments in this subsector over the past decade, and significant

improvements in service delivery, it was agreed during negotiations, that the

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increase in rates for metered non-domestic users, by the CMC in accordancewith para 5.28(a); and the introduction of new charges by the CMWSA inaccordance with para 5.29(a) be made conditions of credit effectiveness.

(a) Water Supply

Calcutta Municipal Corporation

5.28 While overall finances of the CMC is discussed in Chapter V, Part B,specific measures are being adopted to improve cost recovery for watersupply. Expenditure for water supply represents a significant portion of theCMC's total revenue expenditures, currently amounting to about 20%.Moreover, water supply operations provide an opportunity for cost recoverythrough direct measures and can thereby contribute towards the CMC's overallfinancial improvements. The CMC, over and above their own production ofwater, is augmenting its supply through purchase of bulk water from theCMWSA. The strategy for cost recovery aims at recovering all expendituresfor operations, maintenance, purchase of bulk water and charges for a reservefund equivalent to depreciation by 1987/88. In the interim, for its watersupply operations, CMC will generate revenues at not less than the followingpercentages of its revenue exenditure for the water supply operations:1983/84-48%; 1984/85-63%; 1985-86-69%; 1986/87-87% (see Table 5, Annex 5).Agreement to this effect was obtained during negotiations. GOWB decided towrite off all past loans for water supply investments (see para 5.07).Therefore, as such, there is no debt service obligation for water supply forthe CMC for past investments. In addition, under CUDP III, there are nomajor water supply capital works for which the CMC will be responsible fordebt servicing. Therefore, to incorporate proper financial diciplines incost recovery measures, an amount equivalent to debt service principal andinterest, which closely approximates depreciation, had the debts not beenwritten off, have been included. Annex 5, Table 5 indicates the sources anduses of funds. To achieve the overall target by 1987/88, a number ofspecific actions to improve operational, institutional, and financialperformance have been agreed. The principal ones are:

(a) Tariffs:

(i) As a condition of credit effectiveness, CMC will increasethe rates for metered non-domestic users from the currentrate of Rs 5 per 1,000 gallons to Rs 11 per 1,000 gallons; and

(ii) CMC will introduce a graduated rate for domestic unmeteredconsumers based on ferrule size, estimated to be not laterthan November 1, 1983.

(b) Licensing of tubewells for extraction of groundwater: 1/

CMC will introduce annual licencing for all new private tubewells.The licence will be renewed annually. Implementation of this ispending full implementation of the CMC Act of 1980 and is expected

1/ The primary objective for licensing its regulatory control of groundwaterusage.

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not to be later than October 1, 1983. Assurances were obtained atnegotiations that CMC will introduce this by November 1, 1983.

(c) Metering and Consumer Survey Program: CMC has agreed to undertakea time-bound metering program for all Industrial, Commercial andInstitutional (ICI) users, and also to introduce production metersand zonal meters. CMC will carry out the work with the assistanceof private contractors. Simultaneously, CMC has already commenceda survey of all its ICI users and work is continuing. CMC hasagreed to complete the survey in two sections of the city byJune 30, 1983 and will complete the survey of the entire city byMarch 31, 1984. The objective of the simultaneous survey andmetering program for ICI users is to meter all above average usersas a matter of priority. Annex 5, Table 6 indicates detailed time-table for the metering and consumer survey program.

(d) Management of metered users: Since the number of metered ICI usersis expected to increase significantly during the next few years(currently CMC has only 131 metered ICI connections), a propermeter reading, billing, collection, and repair program will becomeimportant to ensure proper cash flow. CMC has agreed to appointa Special Officer to be in charge of the metering and survey pro-gram and to form a fully operational meter repair department priorto negotiations. The accounting and finance department will alsoinstall a meter reading, billing, and customer service data pro-cessing department prior to negotiations. Agreements were obtainedat negotiations that CMC will adhere to the agreed timetable andtarget for metering and consumer survey program as indicated in

Annex 5, Table 6.

Calcutta Metropolitan Water and Sanitation Authority (CMWSA)

5.29 CMWSA will operate primarily as a bulk supplier to the municipalities(initially to four or five municipalities during the project period) and toCMC. However, those major ICI consumers which can be serviced directly fromCMWSA's primary distribution system will become retail customers of CMWSA.Since CMWSA will own and operate the major production and transmissionfacilities, it is important that it has adequate cost recovery to operate andmaintain these large investments and to service its debts. CMWSA's sourcesand uses of funds are indicated in Annex 5, Table7. Agreements were obtainedat negotiations that CMWSA will cover all expenditures for operations,maintenance, and contributions to a replacement fund requirement from 1985/86onwards. In the interim, CMWSA will generate revenues at not less than thefollowing percentages of its revenue expenditures: 1983/84-75% and1984/85-95%. At present, CMWSA's financial position is weak. This isprimarily due to the fact that CMWSA is yet to realize any signiificantrevenues through sale of water from its major treatment plant, while it iscarrying high administrative and overhead costs. This is basically astart-up situation. Once CMWSA begins to sell water from mid-1983, it shouldbe able to meet the above financial targets. Among the principal actionsrequired to achieve this objective are the following:

(a) Direct Charges. As a condition of credit effectiveness, CMWSA

will introduce the following bulk supply rates; Rs 1.25 per

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1,000 gallons and Rs 3.00 per 1,000 gallons for the municipalitiesand CMC respectively. The bulk rate for CMC is higher than themunicipalities because (i) Rs 3.00 per 1000 gallons approximatesCMC's own water production costs and (ii) CMC has more ICI usersthan in the municipalities, from whom CMC can recover morerevenues. ICI rates have been fixed at Rs 10 per 1,000 gallonsfor industrial consumers and Rs 6 per 1,000 gallons for commercialand institutional consumers. These rates will be revised periodi-cally to ensure that CMWSA achieve coverage of all expenditurestowards operations, maintenance and debt service by 1985/86.

(b) Guarantee of Payment for Bulk Supply. Since most of CMWSArevenues will come from its bulk supply to the municipalitiesand CMC, it has been agreed that in the event that any CMWSAbulk water bill remains unpaid for more than 30 days, GOWB willensure that such amounts are paid to CMWSA. Agreement to thiseffect was obtained during negotiations.

(c) Working Capital Requirements. GOWB will need a working capitalloan of Rs 90 lakhs from GOWB. The first tranche of Rs 30 lakhswill have been paid by GOWB by April 30, 1983. Assurances wereobtained at negotiations that the remaining two tranches ofRs 30 lakhs each, will be paid by March 31, 1984.

(b) Shelter and Area Development

5.30 Cost recovery measures in shelter and area development include thefollowing steps.

(a) Pricing for area development has been based on the principleof full cost recovery plus the need to generate additionalsurpluses to replicate and expand a shelter program. Actualcost of land and on-site infrastructure is first calculatedfor each category. Then, 'affordable' prices are calculatedfor the EWS and LIG categories. The total cross subsidiesthus required by EWS and LIG categories (actual unit developmentcosts minus affordable unit cost price times total area) areadded to the actual development costs of all other categories ona prorata basis (based on area). This is labled as the "floorprice" and is expressed as Rs/m2 for each class of plots(except EWS and LIG for which the sales prices are equal toaffordable prices).

(b) Having thus arrived at "floor prices" to reflect a break-evencost recovery position, a premium is charged on the floor

prices to all categories except EWS and LIG to arrive at theactual sales price for all other categories of plots. Thesepremium percentages vary from 10% above floor price for MIG-I(Middle Income Group) category to 75% above floor price forcommercial plots. The premium percentages will reflectrealistic market prices at which these categories of plotscan be sold.

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5.31 The above mechanism will not only achieve full cost recovery for areadevelopment schemes but will generate a net surplus. Based on preliminaryestimates of selected sites, the amount of net surplus would range between6-8% of capital investments, depending on the mix of plots.

5.32 The principles for pricing Area Development schemes have been agreedwith OMDA. The calculation for their 'floor price' will include thefollowing: land acquisition costs, land filling, on-site infrastructure,including sanitary core and sewer connections, plot demarcation charges,design and supervision, and interest during construction. Prices ofresidential plots would reflect differences in plot size, infrastructurelevels, on-plot development and location, as well as a degree ofcross-subsidy. EWS plots would be priced at less than average square metercost. Plots would be sold with 99-year leasehold titles.

5.33 The terms and conditions of lease and mortgage would have to beacceptable to IDA and would include: (i) for residential plots designated forEWS and LIG I/ households, payment by beneficiaries of a 10-30% down paymenton the price of the plot, with the balance of plot price to be repaid at notless than 12% per annum interest over 20 years. Settler selection criteriawould be satisfactory to IDA and would be based primarily on income, in order

to ensure that various plot size and design alternatives are reserved forintended income groups.

5.34 Agreement was obtained during negotiations that CMDA will submit forIDA review and approval not later than September 30, 1983, a draft copy ofSURAD's administrative and operational and financial guidelines forimplementing the Shelter and Area Development Program; and these will

incorporate costing and pricing formula, the criteria for beneficiaryselection, conditions of lease and terms and conditions of loans for thesites and services beneficiaries as noted above. The guidelines will alsoinclude CMDA's recommendations for a levy on plotholders, by way of monthlymaintenance charges on a sliding scale which will help defray part of themaintenance costs of infrastructure until property tax payment begins. CMDA

will draw up the guidelines in consultation with participating financialinstitutions.

(c) Urban Renewal

5.35 The cost recovery policy adopted for investments in all urban renewalschemes is to auction 'development rights'. Financial analysis proceduresfor evaluating urban renewal schemes to determine the minimum value ofdevelopment rights reflecting a rate of return not less than commercial costof capital, have been agreed with CMDA, CIT, and HIT. CIT and HIT, theagencies primarily responsible for executing urban renewal schemes, willinvest in providing minimum infrastructure facilities and then auction therights for further development to private developers based on a minimumreserve price set to recover all costs. The exact magnitude of surplusescannot be determined at this stage, but will vary from scheme to scheme.However, 50% of all net surpluses so generated (half of the total auction

1/ Households with monthly incomes in the range of Rs 350-600.

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price minus all costs of development) will be retained by the agenciesconcerned and reinvested and 50% will be contributed to CMDA towardsinvestments in shelter and area development schemes for EWS and LIG incomegroups. The financial impact of urban renewal on property tax in CMC and HMCis estimated to be significant. Agreement was obtained at negotiations,that: (i) CMDA will submit for IDA review, draft administrative, operationaland financial guidelines, incorporating the above terms and conditions; (ii)CMDA will submit for prior IDA review, an appraisal of each urban renewalscheme, and only schemes yielding a financial rate of return in excess of theprevailing commercial cost of capital (bank rate) will be implemented; and(iii) CMDA will submit for IDA review and approval a pricing and cost

recovery analysis for each urban renewal scheme prior to the announcing theauction of development rights.

(d) Health

5.36 GOWB has hitherto had no formal policy on recovery of costs in itsintegrated health services. Under CUDP III, GOWB has agreed to introduce onan experimental basis, charges for some services. These charges are set at alevel which would not under any circumstances inhibit the target group from

seeking medical attention. The extent of cost recovery, albeit limited inits scope, will represent recovery of approximately 22% of the totalrecurrent costs of the program over five years. The elements of directcharges include introduction of registration fees, medical history cardrenewal fees, nominal charge for nutrient food packets and polyclinic visits.

D. Structural Adjustment of Municipal Finance

General

5.37 In addition to property tax improvements and the specific sectoralmeasures referred to above to ensure adequate cost recovery for properoperations and maintenance and debt servicing, GOWB is also taking steps tointroduce overall fiscal discipline for local government, both in the CMA andin the rest of the State. GOWB's Municipal Finance Commission's (MFC) Reportof March 1982 addresses some issues. The major conclusions of the reportare:

(a) the existing revenue base of the local bodies (37 municipalitiesand the CMC and the HMC) in CMA is not adequate to cover theirrecurrent expenditures (including operations and maintenancecosts), which have had to be covered by budgetary support fromGOWB.

(b) the magnitude of the above shortfall amount to about Rs 34crores (51% of total revenue expenditure) in 1982/83, increas-

ing to about Rs 39 crores (47% of total revenue expenditure)in 1985/86 for all CMA local bodies. These shortfalls do notinclude the incremental increases in recurrent expenditures dueto proposed investments under CUDP III, estimated to be aboutRs 15-18 crores annually upon completion.

(c) to sustain the past investments and to justify the future

investments, the burden of this resource gap on the State

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Government's budgetary resources need to be gradually reducedthrough: (i) improved internal revenue generation of localbodies; (ii) implementation of an incentive-oriented systemof devolution of grants and shared taxes from the state treasury.

5.38 While improvements in internal revenue generation are being addressedthrough improved cost recovery measures, as discussed above, it is unlikelythat the total recurrent expenditures of the local bodies for both theexisting and proposed investments will be met for the near future from theinternal revenues alone. Therefore, there will be need for continuingtransfer of resources from the State Government in the form of grants andshared taxes.

5.39 However, in order to insure most effective utilization of alreadylimited State Government resources, and to introduce a structural shift inmunicipal finance towards more reliance on self-generated revenues, GOWB willimplement a Revised Grant Structure (RGS) effective April 1, 1983 to coincidewith the beginning of CUDP III and the GOWB's fiscal year. The basiccharacteristic of RGS is a deficit grant system based on absolute levels ofperformance of local bodies, linked with both a disincentive and an incentivemechanism. Initially, the RGS will be implemented only in the CMC, HMC, andthe CMA municipalities. However, the system can subsequently be appliedthroughout the State, based on the lessons and experiences of this initialapplication.

Structure of RGS

5.40 Based on the financial data available from the MFC report, the likelyfinancial performance under a set of realistic performance targets have beeninitially estimated by LGUDD in consultation with each local body for thenext five year. On the revenue side, realistic performance targets have beenset primarily relating to property tax administration. These targetsinclude: (i) rateable value; (ii) assessment; (iii) minimum collectionpercentages for both current and arrears demands. These targets are based onrealistic estimates and are not uniform for all local bodies. They relate tothe current level of tax base and collection efficiency on an individualbasis and assume improvements over time specific to each municipality. Inaddition, statutory receipts from share of octroi taxes have been projectedand included as a source of local body revenue for each individual localbody. On the expenditure side, levels of current expenditure likely to beincurred have been initially projected for each individual local body. Theseexpenditures include likely operations and maintenance costs for bothexisting assets and proposed investments, incremental levels of salaryexpenditure, debt servicing requirements and other expenditures. Examples ofboth revenue and expenditure estimates for a sample of local bodies areindicated in Annex 5 Tables 8, 9, 10.

5.41 While the revenue and expenditure projections are estimated initiallyfor five years, in practice these will be annually updated (rolling yearlytargets) based on actual performance data. The deficit thus estimated for anindividual local body reflects a level based on a realistic set ofperformance targets. The aggregate of all these deficits, for all localbodies, thus indicate the total level of grant support that will be required

from the state government.

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5.42 The actual operating performance of the local bodies will fall intothree categories: (a) those with revenue deficit equal to or less than thetargets; (b) those with revenue deficit more than the targets; and (c) thosewith revenue surpluses. Through the RGS, GOWB will meet the revenue deficitof both categories (a) and (b) above annually. However, the following stepswill be taken to link revenue performance with the annual capital investmentprogram for each local body. Under CUDP III, annual capital investmentprogram for each of the five years of implementation, has been based on anappraisal of the current and projected capacity of an individual local bodyto execute such a program and its ability to operate and maintain theseinvestments within the realistic limits of revenue deficits as noted above.For the first year of implementation, each local body will be allocatedcapital funds based on the above appraisal. However, beginning the secondyear of implementation and each year thereafter, there will be a directlinkage between the annual capital program of a given year with the revenueperformance of the preceding year. For those local bodies who continue tooperate at annual revenue deficits which are either equal to or less thanannually revised targets, there will be no change in the original capitalprogram as originally determined. Those local bodies who exceed the annuallyrevised revenue deficit targets receive a reduced proportion of capitalinvestment for the following fiscal year. The reduced capital investmentwill be the appraised estimate of capital investments reduced by a percentageequal to half of the percentage increase in actual revenue deficit over thetarget. This reduction will thus reflect the level of capital investmentthat can be reasonably operated and maintained by actual levels of revenuesof each local body. The local bodies which generate revenue surpluses, thusnot requiring any revenue grant, will as an incentive, receive additionalmatching capital grant, equal to the revenue surplus, in addition to thenormal CUDP III capital allocation. However, capital works to be financedthrough this matching grant will be subject to appraisal and approval byCMDA. This additional capital works will reflect the ability of a local bodyto operate and maintain more assets.

Finance of RGS

5.43 A "Fund Assigned to Municipalities" (FAM) has been set up by GOWB.FAM will have two separate accounts: (1) FAM (Revenue Account) and (2) FAM(Capital Account). The FAM (Revenue Account) will be funded by COWB's Statebudget allocation of Motor Vehicles Tax and Subvention Grants. The FAM(Capital Account) will be funded by the State Amusement Tax. FAM (RevenueAccount) will be used only to meet the local bodies annual revenue deficitsand will be paid on a periodic basis. FAM (Capital Account) will be used toprovide matching capital grants. Undisbursed monies for FAM (CapitalAccount) will be carried over to successive fiscal years. A significantaspect of this financing formula is the fact that "subvention grants" will nolonger be devolved automatically based on staff strength. In recent years,subvention grants have totalled about Rs 10 crores per year compared to atotal revenue grant of about Rs 40 crores per year to all CMA municipalities.By pooling subvention grants in the FAM (Revenue Account), the devolution ofthese funds will now be through FAM Revenue Account based on the fact thatthe local bodies will have to operate under a realistic set of revenueperformance targets.

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Administration of RGS

5.44 FAM and both its sub-accounts has been set up by GOWB and will beadministered by the Directorate of Local Bodies (DLB) of LGUDD and CMDA.Necessary data required to monitor and evaluate performance of each localbody against original targets and annual updating of targets will be done bythe DLB. LGUDD will make available to CMDA the results of its annualanalysis, so that CMDA can allocate following years funds for capital worksbased on the results of this analysis.

5.45 LGUDD is now in the process of estimating the performance targets,revenue deficits, revenue grant, and capital grant requirements for each ofthe 37 municipalities, CMC and HMC for each year from 1982/83 through1989/90. At negotiations, agreements were obtained that: (a) LGUDD willannually update the performance targets, revenue deficits, annual revenuegrant and capital grant requirements for each of the 37 municipalities, CMCand HMC for implementing the RGS on the principles as discussed herein; (b)GOWB will fund the FAM Revenue and Capital Accounts based on these rollingyearly estimates; and (c) CMDA will allocate capital resources in accordancewith the recommendations of LGUDD.

E. Affordability and Replicability

5.46 The project takes a comprehensive view of affordability andreplicability. The investments have been designed within acceptable designstandards and at agreed minimum levels of service, that can be realisticallyaffordable within the available resource base. The emphasis on operation andmaintenance has been matched with policies relating to on-lending terms, costrecovery, pricing of services, agreed principles for internalcross-subsidies, and other fiscal improvements such as the Revised GrantStructure. This will ensure that the programs are affordable and replicable.The calculation of tariff charges for water supply as described before, withthe inherent cross-subsidies between non-domestic and domestic usersillustrates this principle. In area development, affordability of plots by awide range of income groups is a prime consideration. Monthly installmentpayments under the area development program have been compared with marketpayments for equivalent plots in other parts of the CMA. For theeconomically weaker (Rs 150-350 per month per household) and lower income (Rs351-600 per month per household) groups, monthly installments under CUDP IIIare estimated to amount to 15% of monthly income, leaving them adequateindividual resources to complete the superstructures.

5.47 The modest charges proposed under the health program (annual familyregistration fee of Rs 1 per family per year and Rs 0.25/visit to a clinic),have been checked by a sample survey of some 2,000 potential beneficiaries.The response indicated a significant willingness to pay this nominal amountfor the range and quality of health services being offered.

5.48 The process that has been set in motion, coupled with the trainingprogram, is initially being focused on the CMA but is replicable for otherlocal bodies throughout the State.

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VI. PROJECT JUSTIFICATION

A. Summary

6.01 Different methods were used to assess the benefits of several of the

principal components of the project, reflecting the varying availability ofdata. In the case of bustee improvements, rental market information was usedto determine the difference in rental value between existing residential andcommercial structures and the estimated market/rental value of thesestructures after upgrading, yielding an economic rate of return (ERR) ofabout 15%. To estimate the ERR for area development (sites and services)

survey data on rental values and sale prices for developed land and buildings

of similar standards in similar locations was used, which yielded an ERR ofabout 13%. An ERR of 24% was estimated for road improvements, based on

reduced vehicle and road maintenance costs and time savings. An ERR of 18%

was very tentatively estimated for municipal drainage improvements based on

reduced maintenance cost and flood loss, using data on flood impacts

collected by CMDA during the 1970s in order to better assess priorities anddesign standards in this sector.

6.02 Due to the limited use of volumetric water tariffs in the CMA at thisstage, no ERR for water supply investments could be determined on the basis

of the standard methodology which estimates benefits using existing tariffsas an indicator of consumers' minimum willingness to pay for services. CMDA

has attempted to use an alternative methodology, basing benefit estimates on:

(a) payments by domestic consumers to private water vendors and (b) savings

in ground water extraction costs to industrial and commercial consumers.

This methodology yields an ERR of about 17% for the water supply investments,

under the conservative assumption that water consumption would not increase

beyond what is currently bought from private vendors and produced by private

ICI tubewells. Still another set of estimates have been prepared withbenefit estimates based on the water tariffs which will shortly be introduced

(Chapter V, para 5.28(a) and 5.29(a)). These tariffs, which are comparable

to tariffs currently in force in other major Indian cities, yield an overall

ERR of about 8% for water supply investments.

6.03 The ERRs outlined above average about 15%, and apply to investments

which account for about 54% of total project costs. The benefits of many ofthe other components would be even more difficult to quantify but wouldnonetheless be important. For example, improved health and reduced jobabsenteeism would result from the health and the service privy conversion

program.

6.04 In addition to the direct benefits in improved and expanded municipal

services, and urban efficiency, there are a number of indirect benefits which

would result from the project. The following are the most significant.

(a) The metropolitan economy would be boosted directly by the

following employment generation:

- 30,000 construction jobs generated by the CUDP III investments over

the 5-year construction period;

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- 20,000 jobs generated over the operational life of the CUDP IIIprogram for operation and maintenance;

- 42,600 beneficiaries and an estimated 16,000 net additional directjobs generated by the SSE program.

The above employment generation, exclusive of the secondary effects, isequivalent to about 3.5% of current total CMA-wide employment.

(b) The regional economy can be expected to benefit from increasedbusiness efficiency and lower transaction costs as a result of thesignificant reductions in the intensity and duration of waterlogging,improvements in health, lower freight trucking costs, and increases inaccessibility within the municipalities and anchals.

6.05 Perhaps the most important unquantifiable long-term benefit of theproject would be the strengthening of metropolitan and municipal managementsystems as demonstrated through investments under CUDP I and II (paras 1.09to 1.21). Under CUDP III, institutions and agencies within the CMA,particularly the municipalities will benefit from: (a) training at alllevels; (b) exposure to methods for eliciting public participation andresponding thereto; and (c) improved processes and methodologies forplanning, budgeting, appraisal, monitoring and evaluation.

B. Distribution of Benefits

6.06 Data for 1981 indicates that over 60% of the CMA population haveincomes below the poverty threshhold (EWS). I/ In absolute terms, this isequivalent to 6 million people, a large percentage of whom are located in themunicipalities outside the metrocore where little previous investment hasbeen made. Most of these urban poor will benefit from the proposed project.Some 70% of all project beneficiaries would be in the poverty group.

6.07 Table 6.1 summarizes the number of beneficiaries under each sector ofthe metropolitan-wide program appraised to date, and the percentagerepresented by the EWS. A part of the population will benefit from one ofmore sector investments.

Table 6.1: URBAN POVERTY - METROPOLITAN-WIDE PROGRAM

Total of whichSector Beneficiaries % EWSSolid Waste Management 3,165,750 73Sewerage & Drainage 1,255,000 55Water Supply 2,074,000 60SSE 59,000 65Health 2,000,000 100

1/ See para 2.04.

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6.08 The number of beneficiaries in the poverty group under the municipaldevelopment program appraised to date is summarized similarly in Table 6.2.

Table 6.2: URBAN POVERTY - MUNICIPAL DEVELOPMENT PROGRAM

TotalComponents Beneficiaries % EWSMarkets 3,198,500 65Drainage 2,375,000 69Water Supply 3,171,500 69Solid Waste 3,031,500 68BIP 307,360 100

Service Privy Conversion 167,000 100Local Road Improvements 3,240,500 65

C. Project Risks

6.09 The major project risks concern project implementation and politicalcommitment:

(a) There is the risk that the program will prove too complex toadminister and manage. The fragmentation of responsibilityrequires strong leadership and coordination from CMDA. ProjectManagement on a day-to-day basis, as well as project monitoringfor socio-economic impacts, will require more sophisticatedsystems than hereto available within CMDA.

(b) The nature of the project investments combined with thedecentralization policy provides a direct link between developmentand politics. Any weakening of political commitment or dilutionof discipline will make technical implementation and financialcontrol difficult.

6.10 Implementation: In order to minimize the risks involved in theexecution of such a multi-sectoral and geographically extensive project, asystematic monitoring and control process has being established within CMDA.The 'institutionalization' of this process, is substantially completed.First, a monitoring and control system (PMU, see para 4.31(a)) has beenestablished for the project as a whole, whereby physical progress andfinancial performance will be measured for individual implementing agencies.

6.11 A second monitoring and control system through the Directorate ofLocal Bodies in LGUDD will focus on the implementation of the municipalprogram within each municipality for the purpose for administering theRevised Grant Structure (paras 5.37-5.45). Physical progress and financialperformance relative to predetermined targets will again define the basis of

control. In both cases, quarterly and annual reports will provide theindicators on which to assess and adjust sectoral investment priorities andmunicipal investment allocations.

6.12 A third system by which AMEU will monitor and evaluate program

benefits through key indicators long-term has also been established and willprovide additional information for program or policy modification.

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6.13 Political commitment. This relates to the GOWB's willingness to

fully utilize the system of performance monitoring and controls built intothe project. The test of this will come towards the end of the first year ofthe program, at which time the picture of individual municipal performancerelative to present targets will become clear. The controls built into the

project dictate that those municipalities not achieving a certain level offinancial performance would then face a reduction in investment for the

following year. Similarly, high performance would be rewarded by additionalinvestment funds for the following year.

6.14 There is clearly a risk that GOWB may not follow these procedures andthat the overall program may falter accordingly. However, this risk appearsminimal for the following reasons. First, it is clearly stated GOWB policyto extend financial self-dependency and accountability to the municipal levelthroughout West Bengal. Second, GOWB has encouraged the proposed system ofcontrols within CMDA and LGUDD. Third, there is an urgent financial andpractical necessity for expanded service provision.

D. Approach to On-going Appraisal and Evaluation

6.15 An appraisal and evaluation system has been developed for the TRIP,CHIP, and municipal programs to ensure that each component is consistent withproject objectives and to monitor the degree which objectives are actuallyachieved. This system has been institutionalized through the AMEU of CMDAwhich will remain a part of CMDA beyond the project period.

6.16 In the case of the TRIP and CHIP programs, sub-projects are grouped

by sector and by planning/implementing/operating agency. For each sector, asummary of performance estimates for each sub-project is compared against a

common set of financial, physical design, service delivery, institutional,implementation, and benefit indicators. For schemes in excess of Rs I crore,this information is supplemented by an appraisal specific to that scheme.The main elements of the project-specific appraisal include:

(a) Key impacts- justification and project benefits- economic analysis- distribution of benefits and poverty analysis

(b) Financial & cost recovery analysis

(c) Project risk analysis

(d) Implementation issues

These formats are consistent across sectors and provide the basis for theimplementation, monitoring, and control of the metropolitan-wide program.

6.17 Under the municipal program, each municipality is appraised using astandard format comprising the following elements:

(a) Key demographic, municipal revenue, and expenditure indicators;

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(b) Summary of CUDP program including program size, components,staffing, land acquisition requirements and implementationtimetable;

(c) Component (sector) specific summary of investment cost, servicedelivery norms (existing and proposed), physical design standardstarget population, and percent EWS of target population;

(d) Key impact summary (justification and program benefits, economicanalysis, distribution of benefits and poverty analysis);

(e) Analysis of existing and projected municipal finances, includingannual performance targets to be met as a pre-condition ofcontinued disbursement to that municipality;

(f) Project risk analysis; and

(g) Implementation issues.

6.18 These formats provide the basis of the implementation, monitoring,and control of the municipal program. By way of illustration of the process,an appraisal of a typical municipality (Barasat) is set out in Annex 3D.

VII. AGREEMENTS REACHED, ASSURANCES RECEIVED, AND RECOMMENDATIONS

7.01 During negotiations AGREEMENTS were reached as follows:

A. with GOWB, that:

(a) GOWB will appoint independent auditors, acceptable to IDA,

to audit the accounts and financial statements of the projectimplementing agencies, the local bodies, and CMDA's Statementof Expenditures. The audit reports and financial statementsare to be submitted to IDA within nine months of the endof each fiscal year. (Chapter IV, paras 4.17 and 4.25);

(b) GOWB will deposit Rs 9 crores into the Area Development Accountduring FY 1984; Rs 5 crores by September 30, 1983, the balanceby March 31, 1984. IDA would reimburse its share (50%) andwould subsequently receive full documentation of eligibleexpenditures to justify the payments made (Chapter IV,para 4.18);

(c) GOWB/CMDA will retain accounting firms not later than 9/30/83to assist the municipalities in maintaining accounts andpreparing final accounts for audit (Chapter IV, para 4.25(d));

(d) GOWB will submit annually to IDA starting 6/30/84, a copy ofthe monitoring report for the administration of the Revised GrantStructure to be prepared by LGUDD (Chapter IV, para 4.31(c)).

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(e) GOWB will cause CMC to reduce its reliance on GOWB subventionsfrom 24% of its revenue expenditure in 1982/83 to about 10% by1987/88. GOWB will cause CMC to:i) increase the total ratable value of properties from

the 1981/82 total of Rs 63.70 crores to about 103crores in 1986/87 (Chapter V, para 5.18(a));

ii) achieve cash collections of at least 65%, 70%, 75%, 80%,and 85% of the current year's consolidated property taxdemand during fiscal years 1983/84, 1984/85, 1986/86,1986/87 and 1987/88 (Chapter V, para 5.18(b)); and

iii) achieve cash collections of at least 50% a year of totalannual outstanding arrears property tax demand (Chapter V,para 5.18(c));

(f) GOWB will, by December 31, 1983, complete an evaluation ofthe adequacy of the new property tax assessment base of all

CMA municipalities, HMC and CMC. If the base in any munici-pality is found to be inadequate GOWB will cause the CVBto carry out a revaluation of properties in such munici-

palities (Chapter V, para 5.26).

(g) GOWB will cause:i) CMC to achieve full cost recovery for water supply

operations by 1987/88 and to recover the followinginterim percentages of its revenue expenditures obtainedthrough water supply operations: about 48% in FY83/84;63% in FY84/85; 69% in FY86/86; and 87% in FY86/87(Chapter V, para 5.28);

ii) CMC to introduce a graduated rate, satisfactory to IDA,for domestic unmetered consumers based on ferrule size,not later than November 1, 1983(Chapter V, para 5.28(a)(ii)).

iii) CMC to introduce annual licencing for all newprivate tubewells, (Chapter V, para 5.28(b));

iv) CMC to adhere to the agreed targets for metering andconsumer survey programs (Chapter V, para 5.28(d)).

(h) GOWB will cause CMWSA to achieve full cost recovery for itswater supply operations by 1985/86 and to recover thefollowing percentages of its revenue expenditures forwater supply: 75% in FY83/84; and 95% in FY84/85 (Chapter V,para 5.29).

(i) GOWB will ensure that CMWSA's overdue bills for bulk watersupply will be paid. (Chapter V, paras 5.29(b)).

(j) GOWB will annually update the performance targets for eachmunicipality and GOWB will fund the FAM Revenue and Capitalaccounts based on these targets. CMDA will allocate capitalresources in accordance with recommendations of LGUDD(Chapter V, para 5.45).

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B. With CMDA, that:

(a) CMDA will review annually the interest rebate feature inthe SSE component to determine its effectiveness starting4/1/84 (Chapter II, para 2.16);

(b) CMDA will consult with IDA on any major changes proposed inits five-year investment program (Chapter II, para 2.28);

(c) CMDA will onlend at the prevailing commercial interest ratefor urban renewal schemes, and for other investments at notless than 8.25% a year (Chapter III, para 3.06);

(d) CMDA will establish and maintain an Area Development Accountin a commercial bank for SURAD (Chapter IV, para 4.18);

(e) CMDA will within nine months after the close of each financialyear, for the agencies and municipalities, submit auditedfinancial statements and auditors' reports, includingevaluation of contracts, financial management, and recommenda-tions (Chapter IV, para 4.26).

(f) CMDA will furnish quarterly progress reports to IDA, which willinclude updated implementation schedules (para 4.09), within60 days after the close of each quarter starting 11/30/83(Chapter IV, para 4.27);

(g) CMDA will at six month intervals, furnish IDA with a progress sum-mary of appraisals, field surveys, and other activities carriedout by the Appraisal Monitoring and Evaluation Unit (AMEU), andevery twelve months starting on 4/1/84 will furnish IDA with acopy of AMEU's annual report and recommendations (Chapter IV, para4.31(b)).

(h) CMDA/GOWB to arrange for regular inspections of key installationsby suitable agencies (with a record of good O&M). Copies of these

reports to be made available to IDA starting 9/30/84 (Chapter IV,para 4.30);

(i) CMDA will transfer to the appropriate operating agencies, allassets completed up to March 1982, not later than 3/31/84 andregularly thereafter on an annual basis, for all assets to becompleted under this project (Chapter V, para 5.02);

(j) CMDA will submit for IDA review and approval no later than9/30/83 a draft copy of SURAD's administrative, operational,and financial guidelines for implementing the Shelter and AreaDevelopment Program; and these will incorporate costing and

pricing formula, maintenance charges, the criteria forbeneficiary selection, conditions of lease and terms andconditions of loans for the sites and services beneficiaries,all satisfactory to IDA (Chapter V, para 5.34);

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(k) CMDA will submit for IDA review and approval:i) a draft copy of administrative, operational, and

and financial guidelines for implementation of theUrban Renewal schemes not later than 9/30/83 (whichwill incorporate: the costing and pricing formulafor the sale 'development rights;' the terms andconditions of sale by Auction of leasehold rights;terms and conditions of rental facilities; accountingand placement of all funds generated through urbanrenewal schemes);

ii) an appraisal of each urban renewal scheme, (onlyschemes yielding a financial rate of return in

excess of the prevailing commercial cost of capitalwill be implemented); and

iii) a pricing and cost recovery analysis for each urbanrenewal scheme prior to the auction of developmentrights (Chapter V, para 5.35).

7.02 The following are agreed conditions of credit effectiveness:(Chapter V, para 5.27):

(a) GOWB will cause CMC to increase the water ratesfor metered non-domestic users from Rs 5 per 1000gallons to not less than Rs 11 per 1000 gallons(Chapter V, para 5.28(a)).

(b) GOWB will cause CMWSA to introduce the followingminimum rates for bulk water supply:i) Rs 1.25 per 1000 gallons to municipalities except CMC;

ii) Rs 3.00 per 1000 gallons to CMC;iii) Rs 10 per 1000 gallons for industrial consumers; andiv) Rs 6 gallons for commercial and institutional consumers.

(Chapter V, para 5.29(a)).

7.03 In addition, during negotiations, confirmation, and assurances werereceived from:

(a) GOWB, in connection with the Calcutta Urban Transport Project,that the following actions have been completed:i) a task force in the Calcutta State Transport Corporation

has been appointed;ii) bus and tram fares have been raised;

iii) transportation planning responsibilities have beenconsolidated in the CMDA (Chapter I, para 1.06);

(b) GOWB, that CMC has completed the following:

i) placement of three suitably qualified staff to improveassessments of properties, updating of valuation roll,and collection performance;

ii) appointment of a Special Officer and supporting staffto manage a consumer survey and water metering program,including meter repair facilities;

iii) establishment of a meter reading, billing, and customer

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service department; andiv) appointment of one person for stores inventory and control

(a second position would be filled by 6/30/83)(Chapter IV,para 4.04); and

v) a Vehicles Replacement Fund and a Sinking Fund has beenestablished effective 4/1/83, and annual deposits will bemade (Chapter V, para 5.23).

(c) GOWB, that in CMWSA:i) all identified positions required to implement the project

will have been filled by 6/30/83; andii) the accounting system designed for the water authority

was already operational effective 4/1/83 (Chapter IV, para 4.05).iii) The first tranche of a working capital loan to CMWSA of Rs 90

lakhs will have been paid not later than 4/30/83 and the balancebefore 3/31/84 (Chapter V, para 5.29(iii);

(d) GOWB that it has established effective 4/1/83 the FAM Revenueand Capital accounts (Chapter V, para 5.45);

(e) CMDA, that:i) a revised staffing structure and organization has been

approved by its Board;

ii) most key management positions have been filled;three remaining posts will be filled by 6/30/83;

iii) a letter of intent has been issued to contract HDFC fortwo years of advisory and training assistance to developSURAD's marketing, loan administration, and financialcapabilities. A draft contract will be sent for IDAreview by 6/30/83 (Chapter IV, para 4.03).

iv) by 6/30/83, CMDA will be in possession of about 120 ha (300 acres)in West Howrah and about 90 ha (220 acres) in Baishnabghata-Patuli, East Calcutta and West Howrah Extensions by December 31,1983; and a further 80 ha (200 acres) in West Howrah by 2/29/84;

v) by 6/30/83, CMDA will submit for IDA review, detailed engineeringdrawings and specifications for earth filling at West Howrah;

vi) it has secured tentative commitments from financial institutionsfor its Area Development program (Chapter IV, para 4.10);

7.04 The proposed project constitutes a suitable basis for an IDA creditof US$147 million to the Government of India.

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ANNEX 1

Page 1

BACKGROUND

A. Urban Growth at the National, State, and Metropolitan Level

1. Urban growth in India has been accelerating over the past three

decades, from 2.3 percent a year in the 1950's to 3.9 percent a year in the

1970's. This growth, which is more than twice the rate at which the rural

population is increasing, adds some 7 million people to India's towns andcities each year. Much of this growth is taking place in the 135

medium-sized cities with population between 100,000 and 1,000,000, which grewat an average annual rate of 6.6% between 1961-71, and which accounts for 52%

of all urban population. The nine largest cities, with populations of morethan one million are growing at an average annual rate of 3.3%. If the

present trends in urban population growth continue, the total urban

population would be about 300 million by the year 2000 and by the same time

43 Indian cities would have populations of over one million.

2. West Bengal is the second most densely populated state in India afterKerala. In 1981, its population approximated 54.5 million with about 13million (or 24%) living in urban areas, including Calcutta, the state

capital. The population living in the Calcutta Metropolitan Area (CMA) 1/ isgrowing at an average rate of 2.2% and was in 1981, approaching 10 million,

or over 70% of West Bengal's urban population.

3. The CMA is the slowest growing metropolis in India. Yet it continuesto add over 200,000 persons annually to its population in spite of continuingdeficiencies in environment, infrastructure, public services, and employment.

About 3.3 million of the CMA population is within the Calcutta MunicipalCorporation (CMC) administrative area on the east bank of the Hooghly river.

The west bank population is about 2.2 million, concentrated mainly in theHowrah Municipal Corporation (HMC) and Bally Municipality opposite the CMC.

About 45% of the CMA population, or about 4.5 million people, belong tohouseholds in the economically weaker section, with a monthly income of Rs

350 (approximately US$37 equivalent) or less per household.

4. The Economy. Manufacturing and service activities predominate in theCMA. In the manufacturing sector, a major shift has taken place over recentdecades from dominance by the jute industry to dominance by the engineering

industry. However, in recent years there has been an overall decline inproduction. Service activities proliferate throughout the area, particularly

in transport, storage, and communications. In the CMA as a whole, employmentin 1981 was about 2.8 million according to official census estimates, amodest increase over the 1971 figure of 2.6 million--with about 1.5 millionin services, 1.1 million in manufacturing, and 0.2 million in agriculture andmining.

1/ The census figures are in reference to the Calcutta Urban Agglomeration(CUA), which roughly equates with the CMA.

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ANNEX 1Page 2

5. Administration of Local Government. The State Government of WestBengal (GOWB) is responsible for framing and enacting legislation governingall local authorities in West Bengal. As such, GOWB, through its LocalGovernment and Urban Development Department (LGUDD) has authority over theCMC, HMC, and the municipal authorities, which provide government services intheir respective areas within the CMA. The local government framework in theCMA consists of two municipal corporations and 37 municipalities. (see Annex3A). In 1971, GOWB created the Calcutta Metropolitan Development Authority(CMDA) to act as an area-wide statutory authority charged primarily withplanning, design and construction of infrastructure in the CMA. It islargely through the CMDA that GOWB coordinates and manages development within

the CMA. From January 1982, the CMDA has been formally designated as theplanning and development Authority for the CMA under the West Bengal Town andCountry (Planning and Development) Act, 1979.

B. Bank Group Role and Experience in Calcutta

6. The First Calcutta Urban Development Project (CUDP) 1/ comprised abroad program of urban works, with emphasis on infrastructure to meet themost urgent service needs of the population. The IDA Credit of US$35 millionequivalent, or 36% of total estimated project costs of about US$97 million,was directed to investments mainly in the water supply, sewerage, drainage,and transportation sectors. The credit is now fully disbursed. Progress

under the First Credit was slow, reflecting the lack of experience in programmanagement on the part of CMDA, the principal implementing agency.Particularly noticeable were deficiencies in coordination of agencies,project budget sanctioning, monitoring, bidding procedures, and delays inland acquisition. 2/ These difficulties are understandable, as CMDA wasestablished only iTi 1971 and was immediately given responsibility for anextensive and complex development program.

7. The Second Calcutta Urban Development Project 3/ (CUDP II) differsfrom the first in that it includes a greater number of components. Inaddition to the provision of shelter, municipal infrastructure improvements,solid waste management and technical assistance, other components such as

1/ Cr. 427-IN, 1973/74 to 1978/79.

2/ Project Completion Report (PCR) dated 6/1/81 and Draft Project Perfor-mance Memorandum Report (PPAM) dated 6/11/82.

3/ Cr. 756-IN, 1977/78 to 1982/83.

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ANNEX 1Page 3

school construction and health care, credit for small businesses, trafficengineering and management, strategic land management improvement, and urbanrenewal projects were included. This project composition reflects anadjustment in CMDA's investment program to give priority also to neglectedsectors providing immediate improvements and assistance in urban services

conditions for the city as a whole. The project places emphasis on theoperation and maintenance of all completed works and on the formulation ofplans for the future development of the Calcutta Metropolitan Area (CMA).After an unsatisfactory start, both these aspects have recently beenreceiving considerable attention from GOWB. IDA made available a credit ofUS$87 million equivalent, or just under 50% of the total project costs ofabout US$184 million, towards financing of this project, which was originallyscheduled for completion in March 1982, and is now substantially completed.Progress under the second credit has been considerably better than the first.As of March 31, 1982 a total of US$78.7 million or 90.5% of the appraisalestimates, had been disbursed over 4.75 years 1/ and progress on physicalworks in spite of severe materials supply problems has been good.

8. The Calcutta Urban Transport Project (CUTP I) 2/ which was approvedby the Board on June 3, 1980, attempts to respond to the GOWB's expressedpriority for a thorough upgrading of mass transportation services inCalcutta. The project, which supports financial and operationalrehabilitation of the public bus and tram operations in Calcutta as well asinvestments and policy measures to support private bus operations, is animportant step in improving the quality and quantity of mass transport in thecity and complements traffic management and engineering interventionsinitiated under the first two urban projects in Calcutta. The estimatedtotal cost of the transport project is US$121.7 million. The credit of US$56million would finance about 50% of project costs net of taxes and duties.The project period has been scheduled for just over three and a half years.

9. Although physical oerformance (e.g., acquisition of buses and trams,progress of civil works) has been satisfactory, the operational and financialperformance of project agencies has been poor. A review mission in thefield, simultaneously at the time of appraisal, agreed with GOWB on a set ofspecifically defined operational targets, along with a program and managementactions to be undertaken over the past six months leading to negotiations.This is being closely monitored. Other specific problems such as the delayon the route rationalization study and the execution of traffic engineeringschemes relate to overlapping responsibilities given to several agencies

1/ As compared to the South Asia Urban Projects norm and South Asia Regionnorm of approximately 97% and 80% respectively.

2/ Cr. 1033-IN, 1980-1983.

-62-

ANNEX 1Page 4

concerned with traffic management, and are addressed along with broaderinstitutional issues relating to the third project.

C. Physical Achievements

10. Service delivery in all sectors has improved. To date for example,just over 2 million persons living in registered slums will have benefittedfrom the Bustee Improvement Program, (equivalent to 65% of the CMA slumpopulation). Progress in other shelter- oriented programs has been slow.Although land acquisition, organization, and contracting difficultiesresulted in excessive delays, the effort and experience was useful in

refining technical solutions and facilitating the adoption of appropriatepolicies on design standards, affordability, and cost recovery. Physicaldelivery of serviced lots is now imminent. By June 1983, the first of about25,000 persons, who have already been allocated serviced sites in a schemefinanced under CUDP I, will take possession of these. The first of a further45,000 persons will begin to move to a second site in East Calcutta sometimein early 1984.

11. Treated water supply production has almost doubled from the 100 mgdten years ago, to a current 200 mgd. During 1983/84, with the inaugurationof new works at Garden Reach and other improvements, this figure will reach300 mgd, with greatly increased coverage under a much enhanced distributionnetwork. More intensive use is intended of existing infrastructure. About5,000 m of new branch sewers have already been laid within Calcutta city anda program to desilt approximately 43,000 gully pits is underway. A majorsewer cleaning exercise for approximately 650 km of existing sewers inCalcutta City, however, has not started due to a number of difficulties,including the shortage of experience in this complex operation in India.About 10,000 m of a trunk sewer system in Howrah (which had no sewers at all)and a treatment plant have now been completed. The next phase will completethe secondary and tertiary sewerage systems in Howrah. In Calcutta,collection of nightsoil from existing oservice privies' by CMC's conservancydepartment has improved with better organization and the acquisition ofadditional tankers and equipment. In the meantime, .a long-term program tophase out privies has been proceeding well, with over 35,000 sanitarylatrines installed.

12. The incidence of water-logging has been reduced, with the completionof approximately 80,000 m of new drainage as well as modifications to anumber of drainage outfalls included under CUDP II following severe floods in

September 1978. Solid waste management is also much better. Currently, anestimated 2,300 tonnes is collected daily which represents almost 94% of thetotal tonnage generated in Calcutta City. Most other municipalities withinthe CMA have also instituted elementary solid waste collection and disposal,although only about 350 tonnes per day is collected out of an estimated daily

generation of 1,500 tonnes.

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ANNEX 1Page 5

13. In traffic and transportation, about 50 km of new roads have beencompleted and are in use. Engineering improvements have been made toexisting routes. A traffic management scheme which includes inter alia, theintroduction of computerized traffic signals is just beginning to becomeoperational.

14. A primary school construction program to reduce the deficiencies inthe bustees, is also making good progress. Approximately 50 new schools havebeen completed and a further 200 existing schools have been renovated.Similarly, a 'pilot scheme' to build and operate three zonal health centersand 10 urban community health clinics in the improved bustees, has becomefully operational.

15. In addition to the major effort in the metrocore under CUDP II, aparallel pilot program in the CMA municipalities (panchayats andnon-municipal urban areas) has resulted in about 350 km of existing roadsbeing provided with surface and drainage improvements.

D. Highlights from Project Performance Audit Memorandum - CUDP I

16. The Calcutta Urban Development Project was the first Bank lendingoperation to support a metropolitan-wide development program. It providedfinance for 44 sub-projects in six sectors and was designed to support the

program and strengthen the operations of a new urban development institution,the Calcutta Metropolitan Development Authority (CMDA) and to develop a

program to provide future support for the operation and maintenance of publicfacilities and services in the Calcutta Metropolitan Area (CMA).

17. The CMDA expanded quickly, absorbing staff from other agencies andtaking direct responsibility for the execution of most of its program. Itbecame the dominant public works agency in the CMA. Developing the expandedorganization to effectively deal with its expanded responsibilities provedmore difficult and took longer than expected. Execution of the projects alsotook longer than expected and was hindered by inadequate preparation andCMDA's reorganization problems. With the development of a second project,the institutional goals for CMDA were substantially achieved and specificmeasures to strengthen operation and maintenance were identified.

18. Benefits from the program supported by the project were widespreadbut difficult to quantify. Progress was made in expanding the supply anddistribution of potable water, improving drainage, sanitation and generalenvironment especially in Bustee (slum) areas and in improving facilities fortraffic at critical points. Benefits were delayed in some cases by theinefficient sequence of project construction and the loose coordination ofcomplementary investments.

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ANNEX 1Page 6

19. The focus of the project on the development of CMDA and theexperience with that development suggest that institution building, at leastin this case, can be seen as a process of change - moving through stages. Itseemed important to support the change that was possible even when it did notconstitute a complete, balanced approach to the problem. The investment

program was financed before a supporting financial reform was in place. Itwas recognized that subsequent adaptation would be necessary to sustainprogress. The nature of the needed changes has become more clear with timeand so has the pressure to make them. Present focus is on the need tostrengthen the finance, operation and maintenance of the system.

20. Aspects of this experience that may be of special interest are:

(a) the critical aspect of timing in urban reform. The projectsupported a borrower's initiative, the CMDA, at a criticaltime in its development (PPAM, paras. 2.08, 4.01);

(b) the difficulties of developing an effective new institution evenwith strong local support and strong leadership (PPAM, para. 4.07;PCR, paras. 7.01-7.09);

(c) the limitations of a centralized approach to the complex problemsof metropolitan development. Although a centralized approachseemed best at the time and was probably responsible for gettingthe whole program started and for much that was achieved, the needto strengthen operating institutions has become increasinglyimportant "PPAM, paras. 7.08, 7.10 and 7.23); and

(d) the contrast between the relative ease with which a lender, centralgovernment or foreign agency, can support investments and thedifficulty experienced in trying to strengthen operations andmaintenance (PPAM, paras. 4.30-4.31; PCR, paras. 9.10-9.12; 10.09).

-65-

ANNEX 2A

Page 1

INDIA


KEY EXECUTING AGENCIES

A. The Calcutta Metropolitan Development Authority (CMDA)

1. The Calcutta Metropolitan Development Authority (CMDA) was created

under the Calcutta Metropolitan Development Authority Act of 1970 andreconstituted under the West Bengal Town and Country (Planning andDevelopment) Act of 1979 (TNCP). Its territorial jurisdiction is theCalcutta Metropolitan Area (CMA). CMDA is vested with the responsibility ofurban development within the area which comprises the Calcutta MunicipalCorporation (CMC), the Howrah Municipal Corporation (HMC), 37 municipalities,two notified areas, and a number (165) of non-municipal urban and semi-urbanareas.

2. Under the TNCP Act, CMDA has the following powers and functions: (a)to prepare a present land use plan; (b) to prepare and enforce an outlineDevelopment Plan; (c) to prepare and enforce a detailed Development Plan; (d)to prescribe use of land within its area; (e) to prepare and execute adevelopment scheme; and (f) to coordinate development activites of alldepartments and agencies of the State Government or local authoritiesoperating within the planning area. CMDA also exercises land use control inthe CMA, besides executing and coordinating development schemes either byitself or by delegating any of its functions, except plan preparation, to themunicipal bodies. Along with these powers and functions CMDA is the primary

regional budgetting and funding authority for the urban development programsin the CMA.

3. CMDA's Board includes two elected corporation counselors and threeelected municipal commissioners representing the municipalities in CMA. TheAdvisory Council of CMDA also includes a representative each of CIT and HIT,the Commissioners of CMC and HMC, and three representatives of themunicipalities in the CMA. To finance all development schemes in the CMA,CMDA obtains financial resources through state plan allocations, 50% of thepresent entry tax, and its own market borrowing.

B. Calcutta Municipal Corporation (CMC)

4. Calcutta was established in 1690 by the East India Company. Between1774 and 1911 it was officially the capital of the British Empire in India.In 1727, a municipal corporation for Calcutta, headed by a mayor, wasestablished. In the latter half of the 19th century, a filtered watersupply, underground drainage, a network of roads, and other improvements wereplanned and built. Up to independence (1947) Calcutta was the premierindustrial center and largest port in India. In the years following

-66- ANNEX 2APage 2

independence, its relative importance as an industrial and commercial basehas declined.

5. From March 1972 to the present, the powers of the Corporation ofCalcutta have been superseded, and administration has vested with GOWB. Thenew Calcutta Municipal Corporation Act 1980, which was notified on January18, 1982, attempts to bring the administration and financial management ofthe Corporation up-to-date, providing it again with an elected body andincreased powers over the 1951 Act. The Act provides for the election of amayor, councillors, and aldermen. Elections are scheduled to take place nolater than October 1983.

6. The functions of CMC are administered by its Commissioner through 12departments. The total number of staff employed by CMC is approximately33,000, of which the Water Production and Distribution Department account forabout 6,000, the Motor Vehicles and Conservancy Department, about 12,000.

7. A number of systems to improve the financial and managerialperformance of CMC were designed and satisfactorily implemented under CUDPII. Principal among these were the accounting and management informationsystem and the stores organization, control, and purchasing system. Arevised municipal accounting and cost accounting system was installed.

Property tax billing and accounts were computerized. Year-end closing ofaccounts, which had been in arrears for a number of years, were broughtup-to-date with the help of consultants. Independent commercial auditorswere retained to audit the backlog of accounts. CMC is now only one yearbehind its submission to IDA of its annual audited financial statements, butexpects to be up-to-date by June 30, 1983. The associated managementinformation system provides for budgetary control, including performance

budgeting. Under the stores' organization, control, and purchasing system, acomplete inventory of all stores was taken, after which slow and fast-movingitems were identified. Inventory records were computerized and purchase andcontrol procedures streamlined. After only one year in operation thebenefits of the system are already apparent.

C. Calcutta Metropolitan Water and Sanitation Authority (CMWSA)

8. The Calcutta Metropolitan Water and Sanitation Authority (CMWSA) wascreated under the CMWSA Act in 1966. Under the Act, CMWSA was vested withthe resposibility for the "promotion and operation" of all schemes relatingto the production and supply of water, sewerage, drainage, sewage treatment,and collection and disposal of nightsoil in unsewered areas. CMWSA is alsoempowered to levy direct charges and taxes to recover its costs of

operations.

9. Although vested with broad operational and financial powers, eversince its inception CMWSA has been essentially operating as a subcontractor

to CMDA, limited only to water supply production and sewage treatmentinvestments. The Board of CMWSA was dissolved in 1972 and it is currentlyrun by an Officer on Special Duty (OSD), appointed by GOWB. All majordecisions are taken jointly by the Chief Executive Officer of CMDA and the

OSD of CMWSA.

-67- ANNEX 2A

Page 3

10. Due to its limited role heretofore as a subcontractor for capitalworks only, CMWSA is currently understaffed primarily in the areas of revenuemanagement, administration, accounting and finance. Under CUDP III, it is

proposed that while CKWSA will continue to act as an executing agency forcapital works in water supply and sewerage, it will be given increasing

autonomy, in both its operations and finances. As a first step towards thisobjective, CMWSA will now become a bulk supplier of water to the

municipalities, CMC, and HMC. It will own and operate all production andtransmunicipal transmission facilities. It will also retail water to majorindustrial and commercial consumers who have direct access to CMWSA'stransmunicipal transmission lines. Its operational and maintenance

responsibilities for transmunicipal facilities will be considerablystrengthened.

D. The Municipalities

11. In addition to CMC and HMC, there are 37 municipalities and 2

notified area authorities (treated as municipalities throughout this report)within CMA with population ranging from about 400,000 to about 20,000. Until

recently, the elected councils of these municipalities were superceded fornearly 18 years. Following the municipal elections held in mid-1981, themunicipalities are now governed by a council of elected representatives. Alist of these municipalities is attached in Annex 3A.

12. Traditionally, the municipalities have been responsible for planningand implementing local water supply, drainage, and sanitation schemes,construction of access roads, schools and markets, conversion of latrines,collection and disposal of solid waste, etc. However, investments in theseareas have been relatively small and have been primarily financed by grantsfrom the State Government.

13. Under CUDP III, keeping in line with GOWB's decentralizationobjectives, the responsibilities of these municipalities have been expandedto include selection of investment priorities, detailed planning, design, andimplementation of investments. The municipalities will also be responsiblefor full operation of these investments.

14. Steps have already been taken to ensure that the municipalities caneffectively discharge these responsibilities. The Bengal Municipal Act whichwas amended in 1980, is currently in force. The amendments aim to improve

overall municipal management through: (a) appointment of four senior-levelofficers (Administration, Finance, Engineering, and Health) to each of thesemunicipalities from state-level cadres; and (b) introduction of measures toimprove the resource base of these municipalities. In addition, a CentralValuation Board, established in 1980 is currently working closely with eachof the municipalities to improve revenues through: (i) better property taxassessment procedures and (ii) better tax collection methods. Finally, anambitious training program has been designed, targetted mainly to themunicipalities (paras 2.22-2.24).

-68- ANNEX 2B

Page 1

LIST OF SUB-COMPONENTS BY KEY EXECUTING AGENCIES

The implementing agencies for the proposed C1JDP III sub-projects have beenidentified as follows:

Agency/Sector Work Value(Rs. crores)

A. CMDA

1) Improvement to Talla-Palta System 1.74Water Supply 2) Remodelling of existing 45"Sector and 60" Main 6.65

3) Baranagar Kamarhati Treatment Plantand Primary Grid 13.99

4) Kamarhati Water Supply Scheme 0.105) Calcutta Distribution System 7.06

Sewerage & 6) Improvement of Pumping StationsDrainage (Ballygunge, Palmers Bazaar,Sector Dhapa Lock) 0.88

7) Alternative Power Feeder to 0.40Pumping Station

8) Swarnamoyee Khal (Howrah) 0.439) Bhatpara-Naihati Nikashi 0.50

10) Cosspore-Chitpore Drainage 0.35Solid Waste 11) Environmental Hygiene 0.23Management 12) Water-logging in Calcutta 0.63Sector 13) Garages 5.18

14) Durgapur Bridge 3.9815) Gaznabi Bridge 0.5416) Link Rd.with Deshpran Shasmal-MG Rd. 2.41

Traffic & 17) Link Rd.Anwar Shah Rd-NSC Bose Rd. 0.81Transportation 18) Subway from ferry crossing 0.54Sector 19) Zeerut Bridge 1.00

20) Garia Bus Terminal 1.5021) CTEP 2.5022) Kona Truck Terminal 3.0123) Barrackpore-Dum Dum Expressway 0.2524) Southern Expressway 0.25

Bustee Improve. &

Panchayat Dev. 25) Panchayat Development Program 21.45SectorHealth Sector 26) Construction/Renovation of

Health Facilities 2.09Shelter, Urban 27) Urban Renewal of Dum Dum 1.00Renewal, and 28) Six Shelter Subprojects 9.00Area Dev. SectorTraining 28) ILGUS Building 1.04

89.51

-69- ANNEX 2B

Page 2

B. CMWSA 1) Tollygunj, PanchannangramDrainage 1.00

2) G.T. Road Drainage (Howrah) 0.863) Solid Waste Management 1.014) Serampore Water Treatment

Plant with Primary Grid 9.5212.39

C. CIT Urban Renewal of Bhowanipur,Tollygunj and Shyambazar (3 projects) 3.00

D. HIT 1) House connection of HowrahSewerage 7.90

2) East West Road 0.503) Makardah Road (Phase II) 1.004) Urban Renewal (3 projects) 1.005) New Howrah Bus Terminus 1.00

14.40

E. Irrigation 1) Outfall Improvement:and Water a) Calcutta Outfall 4.16Sector b) Additional pump at Chowbhaga

& excavation of channel 2.00

c) Improvement of Tolly's Nullah 1.002) Howrah Drainage Channel 2.323) Beliaghata-Kristopur-Bagjola Khal 7.354) Bally Khal 0.975) Anti Malaria Khal 1.00

6) Adi Ganga 2.5021.30

F. Howrah 1) Centrally Planned SWMMunicipality for Howrah 2.00

2) Ward Level Projects for Howrah(MDP) 7.009.00

G. Calcutta 1) Secondary Grid of Calcutta 0.75Corporation 2) Bulk Metering 0.10

3) Leak Detection 0.144) SWM for Calcutta City 5.005) Ward Level Schemes (MDP) 11.00

16.99

H. Other Ward Level Schemes 76.00Municipalities

I. CMDA and CC Sewer Cleansing and Study 5.35

Chart 1: REORGANIZATION OF CMDA

CMDA Board

Chief Executive Officer

AMEU Input from Other

Director Generals of Operations Sources & Agencies

DGPolFCGOF Secretary DGO DGO DGO Directorateof Materials

Director General A(Planning & Development)

Chief Physical Planner Director General of Finance Monitoring OPhysicol/Financiol Materials/ I

Program dV Performance of Other EquipmentMPagrmnt Implementing Agencies

ManagementUnit Physical/ Supply to CMDAXs

(CUDP 111) PROGRAM Operating DivisionsFinancial

Performance ofL PrMA' ogTa

Planningnance/ Supply to Other

Accounts Administration & Coordination O P E 1? A T 1 0 N S implementingI_ I Agencies

Sc CMA W

LD ~EE

CUDP III

Source: CMDA World Bank-24774

Chart 2: ORGANIZATION OF SHELTER, URBAN RENEWAL AND AREA DEVELOPMENT DIRECTORATE (SURAD)

SCEO1

Director GeneralSURAID Program

Program/Policy Legal (Lond Acquisition) Marketing,Coordination of Shelter Loan Administration Services

Programs by OtherAgencies NegotiatingInstitutional Finance

Local BodyCMDA (Maintenance of

Administrative MunicipalSupport Services Infrastructure)

Director DirectorSUPAD (Planning) SURAD (Execution)

IMultidisciplinary Site Supervision

Design Teams ProjectManagement Teams

Responsibilities:ientification ofSites within CMA .-Program & Phasing Responsibilities:Preliminary Plan Project ManagementFormulation of ConstructionCost Estmates (Number of SitesPricing & Financial in Parallel)FlowsPreparation of TOPfor Consultants &Other ImplementingAgenciesIssuance of DesignStandards/Manuals, etc.

Source: CMIDA World Bank-24775

-72-

ANNEX 3A

THE MUNICIPAL DEVELOPMENT PROGRAM: ALLOCATION OF FUNDS

Corporation/Municipality/ Location Population MDP Funds Allocation 2/ % ofNotified Area 1/ 1981 Rs Crores US$(m) Total

01. Calcutta Mun. Corp. EB 3,291,655 11.00 11.6 11.702. Howrah Mun. Corp. WB 742,298 7.00 7.4 7.403. South Suburban EB 394,594 6.50 6.8 6.904. Bhatpara EB 269,158 4.00 4.2 4.305. Jadavpur EB 249,424 4.00 4.2 4.306. Kamarhati EB 240,418 4.00 4.2 4.307. South Dum Dum EB 227,578 4.00 4.2 4.308. Panihati EB 205,546 3.70 3.9 3.909. Garden Reach EB 191,389 3.44 3.6 3.710. Baranagar EB 167,848 3.00 3.1 3.211. Bally WB 137,723 2.48 2.6 2.612. Uluberia WB 136,000 2..<5 2.6 2.613. Hooghly-Chinsurah WB 129,338 2.33 2.4 2.514. Serampore WB 126,918 2.28 2.4 2.415. Naihati EB 114,165 2.00 2.1 2.116. Barrackpore EB 109,149 1.96 2.0 2.117. Titagarh EB 104,439 1.88 2.0 2.018. Chandernagar WB 101,568 1.83 1.9 1.919. North Barrackpore EB 99,902 1.80 1.9 1.920. North Dum Dum EB 96,490 1.74 1.8 1.821. Rishra WB 95,041 1.71 1.8 1.822. Halisahar EB 89,791 1.62 1.7 1.723. Kancharapara EB 88,544 1.59 1.7 1.724. Uttarpara Kotrung WB 85,678 1.54 1.6 1.625. Bansberia WB 81,355 1.46 1.5 1.526. Champdani WB 78,550 1.41 1.5 1.527. Baidyabati WB 65,144 1.17 1.2 1.228. Budge Budge EB 64,116 1.15 1.2 1.229. Garulia EB 63,269 1.14 1.2 1.230. Barasat EB 59,115 1.04 1.1 ;.131. Bhadreswar WB 57,386 1.03 1.1 1.132. New Barrackpore EB 47,392 1.00 1.1 1.133. Rajpur EB 46,013 1.00 1.1 1.134. Dum Dum EB 45,546 1.00 1.1 1.135. Konnagar WB 39,665 1.00 1.1 1.136. Khardah EB 36,198 1.00 1.1 1.137. Baruipur EB 28,923 1.00 1.1 1.138. Kayani Not. Area EB 28,000 1.00 1.1 1.139. Gayeshpur Not. Area WB 20,000 .75 0.8 0.8

TOTALS 94.00 99.0 100.0I/ EB = East Bank (of Hooghly River)

WB = West Bank (of Hooghly River)2/ on per capita basis

73- A1NEX 3B

SECTOR SERVICE DELIVERY NORMS FOR THE MDP

These norms, drawn up by CMDA and the municipalities, are intendedto reflect the minimum needs focus of the program.

Sector Subproject Service Delivery NormsComponent Minimum Maximum

Water Supply 5 gpcd. 25 gped.

Drainage component specific: component specific:waterlogging per % waterlogging per 100%target population target population

Service Privy 1 communal privy I communal privyConversion 25 population 10 population

boid Waste component specific: component specific:Management tons collected per tons collected per

target population 100% target population

Local Road target population target populationImprovements within 20 minutes within 5 minutes

walk of nearest walk of nearestmetallic road metallic road

Bustee Improvements component specitic municipal servicemunicipal service improvements per 100%improvements per % target populationtarget population

Markets provision of 50 sq.ft. provision of 600 sq.ft.covered space/1,000 covered space/1,000people people

Parks & Playgrounds basic improvements to basic improvements toexisting facilities existing facilities,

provision of additional

park-playground areas

Cremation Grounds maintenance of current provision of hygienicfacilities facilities for

disposal of bodies

-74- ANNEX 3C

Page 1

PHYSICAL DESIGN STANDARDS FOR THE MDP

Sector Subproject/ Physical Design Standards.Component Minimum Maximum

Water Supply concentrated Population secondary griddeep ;ubewel1s witn connected to primary

secondary distribution grid; house connectionsystem; provision ofstandpipes for EWS

disperEsEpopulaionspot tub; el

Drainage unlined surface drains surface drains withconcrete slab coveringat critical locations

Service privy sanitary latrines to sanitary latrinesconversion. seat level only with superstructure

Solid Waste hand cart and tricycle rickshaws/Management intermediate VAT transfer stations for

collection, final primary collection.disposal by Tractor trailers totrailer truck final disposal or

secondary transferstations; pilotcomposting plants

Local Road brick paved roads black topped metallicImprovements roads protected

against erosion

Bustee Improvements provision of shallow provision of watertubewells, street taps and standpipes,lighting, open intermediate vats forsurface drainage, solid waste collection,communal sanitary open surface drainage,latrines, brick communal sanitarypaved pathways latrines, brick paved

pathways

Markets tubular structure with concrete structureasbestos roofing and with same servicesbrick paved flooring, as minimum standardwater supply, solid but also withwaste collection, provision of parkinglighting, open spacesdrainage, brick pavedcirculation system

Parks & Playgrounds wire fencing; brick wall or metalbasic seating boundary fence, basic

seating, basic playfacilities

Cremation Grounds proper boundary wall proper boundary wallto ground and covered area for

mourners

Notes: The above standards were agreed by CMDA in discussion withthe municipalities. It is the intention that all municipal subprojectsshould fall within the range of standards prepared for each sector.Differences in design standards between municipalities (e.g., water supply)reflect (i) differences (quality of groundwater, density of population,etc.); (ii) availability of necessary transmunicipal infrastructure (e.g.,primary distribution system), and (iii) sector priorities of themunicipalities themselves.

-75-

ANNEX 3D

SUMMARY APPRAISAL FOR MUNICIPAL IMPROVEMENT PROGRAM (ILLUSTRATIVE)

MUNICIPALITY NO. 30 NAME: BARASAT DATE APPRAISED: June 1982

A. Key Indicators

Background Data on Barasat

. 1971 population 42,642

. 1981 population 69,311* Projected 1991 population 1,00,000. 1971-8i annual population

growth rate 6.25%Municipal area 19.25/sq. km.

. 1981 gross population density 5,195/sq. km.% 1981 EWS of total population 65%

. Average annual municipal capitalexpenditure 1979-81 Rs 9.3 lakhsAverage annual internal revenueduring 1979-81 Rs 10.4 lakhsAverage annual collection as% of assessment 52%

CUDP III Data

Program Investment Total: Rs. 104 lakhs (Rs. 20.8 lakhs/year)

Program Components: Water Supply, Drainage, Service Privy Conversion,Solid Waste Management, Local Road Improvements, Markets, Bustee ImprovementCremation Ground, Parks & Playgrounds.

Staffing:

Executive Health FinanceOfficer Officer Officer Engineer Other Overseer

Recruited(LGUDD) 1 1

Required 1 1 1

Land Acquisition: Negotiations for 0.8 ha required by program havebeen initiated by Municipality.

Target date for completion cf land acquisition: March 1983

Detailed Design Preparatiin: To be started by municipality inJuly 1982.


Table 1: PROGRAM PROFILE - BARASAT

Investment % of Service Delivery Norms Physical Target % EWS ofComponent Cost Total Existing Proposed Design Populatic- Target

Rs lakhs Cost Standards Population

Water Supply 25.0 24.0 22.5 liters ped/ 45 liters pcd/ deep tubewell secon- 70,000 6540,000 people 70,000 people dary distribution line,(5 gallons pcd) (10 gallons ped) house connections,

standpipes

Drainage 19.0 18.3 40% tot.municipal 70% tot.municipal lining of open drains, 65,000 65population covered population covered improvements to

existing culverts.

Service Privy 2.5 2.4 no conversion 100% conversion of low-cost double pit 1,500 100Conversion 250 service privies sanitary latrines

Soli, Waste 6.0 5.8 4.5 metric tons 9 metric tons tricycle rickshaws/ 70,00C 65Management collected and collected and transfer stations for

disposed of (14% disposed of 991 primary collection.current daily daily production Tractor/trailors toproduction final disposal or

secondary transferstations.

Local Road 28.0 27.0 pa't brick paved/ 44 km (27.4 miles) partly brick paved 70,000 65Improvements part mud. 73 km. to be black-topped

(4§.5 miles) 29 km (18 miles)to be brick paved.

Markets 15.0 14.4 15.8 sq.m. 52.95 sq.m. concrete structure(170 sq.ft.)/ (570 sq.ft.)/ with provision of1,000 people 1,000 people utilities 70,000 65

Bustee 2.0 no coverage upgrading of provision of stand- 30,000 100Improvements residential pipes, sanitary privies,

environment for street lighting, paved5,000 households roads

Cremation 0.5 0.5 Inad' quate/poor upgrading of burial boundary wall, lighting, 80,000 65Ground faci ities ground for 80,000 improvement of ghat

people

6.0 5.6 15 parks and 4 1 new park, 1 new play facilities and 70,000 65Parks and pl.,,-ounds in playground, upgrading basic benches withPlaygrounds poor conditions of existing parks and fencing

playgrounds

TOTAL 104.0 100.0

ANNEX 3DTable 2

INDIA


Table 2: FINANCIAL AND COST RECOVERY ANALYSIS - BARASAT (M/30)(Rs lakhs)

Annual Debt Total Total Total Annual Share of Total Annual deficit (-)

Year Servicing Cost Annual Annual Internal Revenue Entry Tax Revenue Surplus (+)a/c (CUDP 3) O&M Cost Cost (from Property per Year per Year Deficits to be met

Taxes & Other through govt. RevenueTaxes and Fees) Support

(1) (2) (3)C1)+(2) (4) (5) (6)=(4)+(5) (J(6-(3)

1988-89 6.96 20.70 * 27.66 19.50 5.60 25.10 - 2.561989-90 6.96 22.12 29.08 21.45 6.44 27.89 - 1.191990-91 6.96 23.67 30.63 23.59 7.41 31.00 + 0.371991-92 6.96 25.35 32.31 25.95 8.52 34.47 + 2.16

1992-93 6.96 27.17 34.13 28.55 9.80 38.35 + 4.221993-94 6.96 29.13 36.09 31.40 11.27 42.67 + 6.581994-95 6.96 31.26 38.22 34.54 12.96 47.50 + 9.281995-96 6.96 33.53 40.49 38.00 14.9 52.90 +12.41

* Rs 6.75 lakhs (on A/C of CUDP III) + Rs 13.95 lakhs (O&M) of existing assets) 20.70 lakhs.

Notes: 1) Terms of loan: For all commercial nature schemes - 100% loan; for rest of schemes,2/3 loan and 1/3 grant. Loan to be repaid in 15 years at an 8.25% rate of interestper annum, subject to moratorium of principal during initial 5-year construction period.

2) CUDP III Capital Expenditure during the construction period will be as follows:

Year Rs lakhs1983-84 24.851984-85 20.951985-86 20.651986-87 20.651987-88 16.90

IU.0

-78-

ANNEX 3D

Page 4

B. Key Impacts

1. Justification and Program Benefits

i) Program based on priorities of local population identified throughelected representatives. Service delivery norms and design standards repre-sent minimum cost approach to reducing major service delivery deficiencies inprovision of critical municipal services.

ii) The target population for 97.5% of the total investment programrepresents more than 65% of the total municipal population. The remaininginvestment is targeted directly at the EWS (economically weaker sections).

2. Economic Benefits

i) The construction works associated with the program are estimated tocreate 260 full-time equivalent jobs over a period of 5 years. This isequivalent to 1% of the estimated 1981 employment in the municipality.

ii) The operation and maintenance of the assets created are estimated tocreate 150 full-time equivalent jobs over the life of the program. This isequivalent to 0.5% of the estimated 1981 employment in the municipality.

iii) The road improvement program would, based on the results of the CUDPII Municipal and Anchal Development Program, is expected to generate majoreconomic benefits through greatly improved accessibility to key urban serv-ices and reductions in vehicle maintenance costs.

iv) Water supply, drainage, service privy conversion, solid waste manage-ment, and bustee improvements can be expected to have a major impact on theenvironmental hygiene and health of the population. The greatest directbenefits will accrue to the EWS who represent 100% of the target populationfor the bustee improvement and service privy conversion components of theprogram.

v) The provision of the greatly increased covered market floor spacewill, together with the improved local road system, provide improvedfacilities at reduced travel costs to traders and consumers over an areabeyond that of the municipality. This would be reflected in increased rentaland entry (octroi) tax revenues to the municipality.

3. Distribution of Benefits on Poverty Group

It is estimated that for the program as a whole, 65% of the targetpopulation would be EWS. This figure increases to 100% in the case of theservice privy conversion and bustee improvement components.

-79-

ANNEX 3D

Page 5

4. Implementation Issues

Institutional/Staffing Arrangements

(i) GOWB has seconded one executive officer and one finance officer.Municipality has additionally requested one engineer, one overseer, and onefinancial analyst.

(ii) CMDA will continue to provide technical assistance and training tomunicipal staff during preparation and implementation of programs.

Implementation

(i) Implementation timetable has been prepared; implementation willcommence in March 1983; land acquisition negotiations underway for 0.8 harequired by the municipality to implement components of the program.

(ii) CMDA will be responsible for monitoring and evaluating the impactof program and undertaking all necessary surveys.

Ancillary Investment

Municipal drainage improvements are dependent on construction of newoutfall channel by Irrigation and Waterways Directorate of GOWB.Municipality has been assured by GOWB that this scheme will be coordinatedwith municipal drainage component.

Finance

Market component planned to break even. Municipality will be responsiblefor market development and grant leases to traders. All applicants will becharged non-refundable advances. Market impact on increased turnover wouldbe recouped through entry tax.

-80-

ANNEX 4

LIST OF SELECTED DOCUMENTS IN PROJECT FILE

1. GOWB - Municipal Finance Commission Report, March 1982

2. Legislation

The Calcutta Metropolitan Development Authority Act, 1970The West Bengal Town and Country (Planning and Development) Act 1979The Bengal Municipal Act 1982 and Amendments 1980The West Bengal Central Valuation Board Act 1978The Calcutta Municipal Corporation Act 1980The Howrah Municipal Corporation Act 1980The Calcutta Thika Tenancy (Acquisition and Regulation) Act 1981The West Bengal Premises Tenancy Act 1956The West Bengal Slum Areas (Improvement and Clearance) Act 1971The Calcutta Metropolitan Water and Sanitation Authority Act 1966The Urban Land (Ceiling and Regulation) Act and Rules, 1976The Calcutta Improvement Act 1911The Howrah Improvement Act 1956

3. Consultants' Reports

Planning in the Calcutta Metropolitan Districts - H. Richardson 1980Institutional Aspects and Training in the CMD - B. D'Souza 1980Public Finance Situation in the CMD - E. Bachrach 1981Forward Planning Process in the CMD - C. Turner 1981

4. CMDA

Perspective Plan and Action Program for the CMD (Draft) 1981Development Perspective for the CMD 1982Miscellaneous Sector and Project Reports (call ext. 32795)Detailed Subproject/Program Cost EstimatesEconomic/Financial Analysis Worksheets

5. IDA - Project Performance Audit Memorandum, dated 6/82(Cr 427-IN, 73/74-79/80)

-81-

ANNEX 5Table 1


CALCUTTA METROPOLITAN DEVELOPMENT AUTHUxil1

BALANCE SHEET AS OF MARCH 31 1980 THROUGH 1988(Rs Crores3

-------- ----------- 1 -------------- P R 0 J E C T E D-----------------

Fiscal Year 79/80 80/81 81/82 82/83 83/84 84/85 85/86 86/87 87/88

TASSETS

CasRN 6.51 7.59 6.79 5.26 6.19 7.18 8.22 9.28 10.48

Advances and Debtors 25.61 57.22 43.31 34.19 40.23 46.66 53.42 60.34 68.16

Stock 6.22 2.63 5.17 3.94 4.64 5.38 6.16 6.96 7.86

Area Development Fund 0.00 0.00 0.00 0.00 9.00 14.39 25.05 35.68 40.95

Subtotal 38.34 67.44 55.27 43.39 60.06 73.61 92.85 112.26 127.45

INVESTMENTSSinking Fund Investments 31.02 0.00 38.24 33.68 28.17 6.96 0.00 0.00 0.00

Other 0.05 0.06 0.06 0.07 0.95 0.99 0.97 10.00 10.27

ASSETS & OUTLAYOutlay on Dev. Projects 273.87 323.78 355.65 424.55 499.68 570.41 645.22 731.25 811.31

Less Assets to Agencies 0.00 0.00 0.00 0.00 0.00 -184.64/2 -217.65 -250.63 -290.19

Subtotal Assets Retained by CMDA 273.87 323.78 355.65 424.55 499.68 385.77 427.57 480.62 521.12

CMDA Operating Assets(Net of Depreciation) 6.64 6.99 7.40 6.96 7.57 7.95 8.38 9.00 9.67

TOTAL ASSETS 349.92 398.27 456.62 508.65 596.43 475.28 529.77 611.88 668.51

LIABILITIES

CURRENT LIABILITIESAccounts Payable 7.55 10.09 9.53 8.95 21.55 23.98 26.85 30.08 33.69

Others Payable 2.56 1.94 2.76 2.56 3.01 3.49 4.00 4.51 5.08Deposits from Contrs. 5.14 5.96 4.72 4.47 5.26 6.11 6.99 7.89 8.90Short Term Portion

of Long Term Debt 0.00 3.61/3 0.00 0.00 0.00 0.00 6.05 11.25 8.25

Subtotal 15.25 21.60 17.01 15.98 29.82 33.58 43.89 53.73 55.92

Sinking Fund forBonds Redemption 31.02 31.02 38.24 33.68 28.17 6.96 0.00 0.00 0.00

LONG TERM DEBTLoans 166.66 191.42 216.56 240.36 277.52 158.46/4 186.70 211.70 231.73Less Transferred to Agencies 0.00 0.00 0.00 0.00 0.00 -16.66 -41.42 -66.16 -95.83

Subtotal 166.66 191.42 216.56 240.36 277.52 141.80 145.28 145.54 135.90

Loan Bonds 121.00 133.10 147.12 161.42 179.82 201.02 228.88 260.81 294.83

Subtotal L.T. Debt 287.66 324.52 363.68 401.78 457.34 342.82 374.16 406.35 430.73

EQUIY2Grants 27.99 32.79 38.02 67.69 99.68 266.68 288.72 307.75 327.42Others 0.35 , 0.38 1.71 0.26 0.95 0.99 0.97 10.00 10.27CMDA Surplus (Deficit) -12.35 -12.04 -2.34 -10.74 -19.53 -7.77 -1.74 18.52 38.53Less Transferred to Agencies 0.00 0.00 0.00 0.00 0.00 -167.98 -176.23 -184.47 -194.36

Subtotal Equity 15.99 21.13 37.69 57.21 81.10 91.92 111.72 151.80 181.86

TOTAL LIABILITIES 349.92 398.27 456.62 508.65 596.43 475.28 529.77 611.88 668.51

/1 Audited77 Phased program of transfer of completed assets to operating agencies/local bodies. Includes design, supervision,

and management changes./3 In lieu of Sinking Fund payment for retirement of Market Borrowings.7 Past loans written off and transferred to grants.3urce: CMDA and IDA Estimates

ANNEX 5-82-Table 2

INDIATHIRD CALCUTTA,URMN-DEVELOPMENT PROJECT

CALCUTTA METROPOLITAN DEVELOPMENT AUTHORITY

FORECAST SOURCES AND APPLICATIONS OF FUNDS 1983/84-1987/88

(Rs Crores)

1983/84 1984/85 1985/86 1986/87 1987/88bOURCESNet Operating Surplus (Deficit) 9.10 12.09 3.63 9.45 12.28

Add Depreciation 0.03 0.03 0.03 0.03 0.03Net Cash Generation 7.= 12.12 3.66 9.48 12.31

BORROWINGSLoans 19.86 24.54 28.24 25.00 20.03

Loan Bonds /1 18.40 21.20 39.70 29.70 22.70

Subtotal Borrowings 38.26 45.74 67.94 54.70 42.73

Grants - GOI 4.04 4.24 4.46 4.68 4.91Grants - GOWB 19.86 19.16 17.58 14.35 14.76

Octroi /2 27.68 31.82 36.59 42.08 48.40

TOTAL SOURCES OF FUNDS 98.97 113.08 130.23 125.29 123.11

APPLICATIONSPurchase of Fixed Assets 0.61 0.38 0.43 0.62 0.67

Expenditure on Dev. Projects/3 64.29 71.48 84.90 86.03 80.06

DEBT SERVICEInterest 21.45 21.72 20.79 20.41 20.53

Sinking Fund Contribution 9.79 9.71 9.13 8.66 8.85

Subtotal Debt Service 31.24 31.43 29.92 29.07 29.38

Increasp in Working Capital 2.83 9.79 14.98 9.57 13.00

TOTAL APPLICATIONS 98-.97 113.08 130.23 125.29 123.11

CASHSurplus (Deficit) for Year 0.93 0.99 1.04 1.06 1.20

Balance at Beginning of Year 5.26 6.19 7.18 8.22 9.28

Balance-at End of Year 6.19 7.18 8.22 9,.28 10.48

/1 Includes "rollover" of three bond issues in 1985/86, 1986/87, and

1987/88, aggregating Rs 30.80 crores.

/2 Projected to increase at 15% a year.77 Includes design, supervision, and managements costs charged to project

expenditures.

Source: CMDA and IDA Estimates

-83- ANNEX 5Table3


CALCUTTA MUNICIPAL CORPORATION

BALANCE SHEET AS OF MARCH 31, 1980 THROUGH 1988(Rs crores)

-------- ACTUAL----------- ------------- PR 0 J E C T E D----------------

Fiscal Year 79/80 /1 80/81 /1 81/82 82/83 83/84 84/85 85/86 86/87 87/88

ASSETSCURRENT ASSETSCash 7.82 7.38 4.09 4.51 4.70 4.10 3.90 4.61 4.91Receivables 51.21 52.80 53.10 53.26 49.40 45.57 39.12 37.70 38.04Advances to Staff/Contractors 15.07 17.20 17.90 18.71 19.75 20.91 22.35 22.87 23.75Stock & Stores 0.26 0.27 0.27 0.56 1.25 2.25 4.03 6.16 7.00Other 0.21 0.24 0.30 0.36 0.40 0.44 0.48 0.53 0.58

Subtotal - Current Assets 74.57 77.89 75.66 77.40 75.50 73.27 69.88 71.87 74.28

Investments 0.96 1.11 1.16 1.22 1.28 1.35 1.41 1.48 1.56Sinking Fund 1.67 1.75 1.84 0.08 1.85 3.52 5.19 6.87 8.55

FIXED ASSETS 30.53 30.69 32.99 34.09 36.29 169.60/2 175.60 190.60 217.60

Subtotal 33.16 33.55 35.99 35.39 39.42 174.47 182.20 198.95 227.71

TOTAL ASSETS 107.73 111.44 111.65 112.79 114.92 247.74 252.08 270.82 301.99

LIABILITIESCURRENT LIABILITIESCreditors 16.77 17.51 18.40 18.30 17.60 16.51 18.41 20.24 22.27Deposits 17.36 19.81 19.81 21.21 23.86 26.47 27.15 31.03 35.13

Subtotal - Current Liabilities 34.13 37.32 38.21 39.51 41.46 42.98 45.56 51.27 57.40

LoansLoans - GOWB 17.16 17.30 17.16 17.16 17.16 17.16 17.16 17.16 17.16Debentures 3.99 3.99 3.33 2.23 2.23 2.23 0.00 0.00 0.00

Subtotal - Loans 21.15 21.29 20.49 19.39 19.39 19.39 17.16 17.16 17.16

CapitalCapital Account 9.38 9.40 12.10 13.20 15.40 148.71 154.71 169.71 196.71Municipal Fund - Loan A/C 6.01 6.00 5.92 5.92 5.92 5.92 5.92 5.92 5.92

Municipal Fund - Revenue A/C 34.87 35.13 34.07 34.07 32.02 29.97 27.92 25.87 23.82

Other 2.19 2.30 0.86 0.70 0.73 0.77 0.81 0.89 0.98

Total Capital 52.45 52.83 52.95 53.89 54.07 185.37 189.36 202.39 227.43

TOTAL LIABILITIES - CAPITAL 107.73 111.44 111.65 112.79 114.92 247.74 252.08 270.82 301.99

/1 Audited.72 Transfer of Assets from CMDA.Source: CMC and IDA Estimates.

-84-

ANNIEX 5Table 4



INCOME & EXPENDITURE ACCOUNT AS OF MARCH 31, 1980 THROUGH 1988

(Rs crores)--------- ACTUAL---------- --------------- PR 0 J E C T ----------------

Fiscal Year 79/80/1 80/81/1 81/82 82/83 83/84 84/85 85/86 86/87 87/88

INCOME

Revenue A/CConsoidated Property Tax 13.64 13.45 17.98 18.02 19.66 21.69 24.06 26.79 29.87

Service Charge onCentral Govt. Properties 0.47 0.49 0.56 0.59 0.62 0.65 0.68 0.72 0.75

Surcharge on Land & Buildings 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Tax on Professions & Trades 1.72 0.96 1.96 2.06 2.16 2.27 2.38 2.50 2.63Other Taxes 0.12 0.23 0.10 0.11 0.12 0.12 0.13 0.14 0.14

Subtotal 15.95 15.13 20.60 23.78 22.56 24.73 27.25 30.15 33.39

Other cel ptStoItal ees 0.18 0.05 0.17 0.18 0.20 0.22 0.24 0.27 0.29

Health Services 0.00 0.00 0.28 0.30 0.32 0.36 0.39 0.43 0.48Cotercial Services 1.09 1.42 0.67 0.73 0.81 0.89 0.98 1.07 1.18

Water Supply 1.48 0.42 0.63 1.54 2.92 4.11 4.71 7.82 11.18Solid Saste 0.08 0.08 0.09 0.10 0.11 0.12 0.14 0.15 0.17Other 1.52 1.18 3.33 3.50 3.68 3.86 4.06 4.26 4.47

Subtotal 4.35 3.15 5.17 6.35 8.04 9.56 10.52 14.0 17.77

TOTAL - OWN SOURCE REVENUE 20.70 18.28 25.77 27.13 30.60 34.29 37.77 44.15 51.16

Revenue GrntsOctro 6.01 6.74 i0.12 10.88 13.84/2 15.92 18.30 21.05 24.21

anstee Services 0.00 0.00 0.00 1.00 1.00 1.00 1.00 1.00 1.00GOWB Subvestions 4.48 9.76 12.96 12.38 11.20 11.59 01.25 9.34 8.34

Subtotal 10.49 16.50 23.08 24.26 26.04 28.51 30.55 31.39 33.55

Total Revenue Receipts 30.79 34.78 48.85 51.39 56.64 62.80 68.32 75.54 84.71Capital Receipts

Grants - GOWB 0.00 0.00 0.00 0.00 2.33 2.91 3.43 5.24 5.43Grants - Other 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Loans - GOWB 1.00 0.00 0.00 2.00 2.33 2.91 3.43 5.24 5.43Loans - Other 0.00 0.00 0.00 5.00 0.00 0.00 0.00 0.00 0.00

Total Capital Receipts 1.00 0.00 0.00 0.00 4.66 5.82 6.86 10.48 10.86

TOTAL RECEIPTS 31.79 34.78 48.85 51.39 61.30 68.62 75.18 86.02 95.57

EXPENDITURES

Revenue A/CWater Supply 5.24 7.86 8.96 10.79 12.05/3 13.65 13.98 14.87 15.62Sewerage & Drainage 2.25 2.09 3.32 3.49 3.66 3.84 4.04 4.84 5.81Roads 0.92 2.26 3.30 3.63 4.00 4.40 4.84 5.32 5.85Lighting & Electricity 1.20 1.83 2.00 2.10 2.21 2.32 2.43 2.92 3.50Solid Waste 6.92 6.39 8.46 9.31 10.24/4 11.26 12.39 13.63 15.67Motor Vehicles 0.00 0.00 1.29 1.42 1.56 1.72 1.89 2.27 2.72Commercial Services 0.77 0.90 0.73 0.80 0.89 0.98 1.07 1.18 1.30Education Services 0.00 0.00 2.42 2.66 2.92 3.22 3.54 3.89 4.28Health Services 2.04 2.03 2.37 2.61 2.87 3.15 3.47 3.82 4.20Bustee Services 0.00 0.00 0.63 0.66 1.00 1.50 2.00 2.00 2.00Admin. & Support Services 9.88 9.36 8.57 9.43 10.37/4 11.41 12.55 13.81 15.88Other 0.58 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Interest 0.10 0.02 0.00 1.34 1.72 2.20 2.67 3.54 4.43Depreciation 0.00 0.00 0.00 3.15/S 3.15 3.15 3.45 3.45 3.45

Subtotal Revenue Exp. 29.90 32.74 42.05 51.39 56.64 62.80 68.32 75.54 84.71

CptlA/CBO-M-pment Works 0.09 0.01 0.00 0.00 4.66 5.82 6.86 10.48 10.86Other 0.00 1.24 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Subtotal Capitel Exp. 0.09 1.25 0.00 0.00 4.66 5.82 6.86 10.48 10.86

TOTAL EXENDITURES 29.99 33.99 42.05 51.39 61.30 6e.62 75.18 86.02 95.57

Excess of Income over Exp. 1.80 0.79 6.80 0.00 0.00 0.00 0.00 0.00 0.00Transfer to MunicipalFund-Revenue Account 0.89 0.02 6.80 0.00 -2.05 -2.05 -2.15 -2.05 -2.05Transfer to MunicipalFund-Capital Account 0.91 - - - - - - - -Transfer to Sinking Fund 0.77 - - 1.67 1.67 1.67 1.67 1.67Transfer to Vehicle - - - - 0.38 0.38 0.38 0.38 0.38Replacement Fund - - - -

GOWB Subventions as Percentageof Total Revenue Expenditures 14.98 29.81 30.82 24.09 19.77 18.46 16.47 12.36 9.85

11 Audited.77 Projected to increase at 15% a year./3 Projected to increase at approximately 5% a year.7Z Projected to increase at 10% a year until the last year when 15% projected, when full impact of project will occur.

/5 In the absence of a Fixed Asset Register the Depreciation quoted is the Book Depreciation.

ource: CMC and IDA estimates.

-85-

ANNEX 5Table 5



WATER SUPPLY OPERATIONS: SOURCES AND USES OF FUNDS(Rs lakhs)

Actual Estimated Projected81/2 82/3 83/4 84/5 85/6 86/7 87/8

SOURCES

Share of Consolidated 450 451 492 716 794 884 986Property Tax (25%)

Metered ICI consumers 63 69 76 83 92 101 110

(existing)

Private Tubewells andHighrise buildings - 5 20 25 30 35 40/1

Metered ICI consumers(additional) - 80 126 135 178 472 790/2

Graduated Rate fromdomestic users - - 70 168 171 174 178/3

TOTAL Sources 513 605 784 1127 1265 1686 2104

USES

Production Costs 480 500 527 553 581 610 650Distribution Costs 416 437 460 482 487 517 552Overhead 89 94 99 103 107 112 120Charge in Lieu ofDepreciation 325 325 325 325 325 325 325Payment for Bulk Supply - 142 218 330 330 360 360

TOTAL USES 1310 1498 1629 1793 1830 1924 2007

SURPLUS (DEFICIT) (797) (893) (845) (666) (565) (258) 97

Sources as % of Tot. Uses 39% 40% 48% 63% 69% 87% 105%

/4 reflects proposed metering program./2 reflects estimated additional users through the proposed consumer

survey and net of bad debts at 20%./3 net of bad debts at @ 10%.

-86-

ANNEX 5Table 6

INDIATHID CALCUTTA,URBAN DEVELOPMENT PROJECT

CALCUTTA MUNICIPAL CORPORATIONCONSUMER SURVEY AND METERING PROGRAM

A. CONSUMER SURVEY PROGRAM

1. The following sections of the city have been surveyed byMarch 31, 1983.

a) Manicktalla Section:Wards: 13, 14, 30, 31, 32, 33, 34, 35 (in full)

b) Section 3:Wards: 57, 58, 60, 61 (in full)Wards: 59, 62, 66, 67, 68, 23 (in part)

2. The survey of the remainder of the 16 sections will continue fromApril 1, 1983 and will be completed by March 31, 1984. Theobjective of the survey is to: (1) identify all ICI consumers who

may be metered and (ii) those consumers with above averageconsumption who will be metered as a priority.

B. METERING PROGRAM

The following metering program with specific timebound targets, hasbeen agreed to with CMC.

Category Nos. Dates

ICI 2,200 by June 30, 19832,500 July 1, 1983-March 31, 1984

4,000 Annually, until all "large"(minimum) consumers are metered.

Production Meters 60 by June 30, 1983(big tubewell)Zone Meters 2 to be repaired by June 30,1983(Total 8)

6 place orders (ICB) and installby June 30, 1983

-87- ANNE 5Table 7


CMWSA - SOURCES AND USES OF FUNDS (OPERATIONS)(Rs in lakhs)

Estimated . ------------------- Projected------------------1982-83 1983-84 1984-85 1985-86 1986-87 1987-88

SOURCES

(1) Fringe AreaInitial Charge (I) 15.00 65.00 78.00 100.00 96.00 68.00

Monthly Fee (F) 2.49 20.45 50.40 103.20 132.00 160.84

TOTAL 17.49 85.45 128.40 203.20 228.00 228.84

(2) Municipalities(A) Industrial

Rate (Rs) (R) 10.00 10.00 10.00 10.00 11.00 11.00Consumption (MGD) (C) 8.00 8.00 11.00 18.80 18.80 18.80

TOTAL 292.00 272.00 401.50 686.20 754.82 754.82

(B) C & IConsumption (MGD)(C) 2.00 3.00 5.50 5.50 5.50 5.50Rate (Rs) (R) 6.00 6.00 6.00 6.00 6.50 6.50

TOTAL 43.80 65.70 120.45 120.45 130.49 130.49

(3) (A) Bulk to Cal.Corp.Consumption (MGD)(C) 12.00 20.50 30.00 30.00 30.00 30.00Rate (Re) (R) 3.00 3.00 3.00 3.00 3.50 3.50

TOTAL 142.00 218.00 330.50 330.00 360.00 360.00

(B) Bulk to MunicipalitiesConsumption (C) 3.50 8.50 30.70 30.70 30.70 30.70Rate (Re) (R) 1.25 1.25 1.25 1.25 1.75 1.75

TOTAL 15.97 34.78 140.07 140.07 196.10 196.10

TOTAL SOURCES 511.26 695.93 1120.92 1479.92 1669.41 1670.525less Bad Debt (at 15%) <76.69> <104.39> <168.57> <222.00> <250.41> <250.54>NET SOURCES 434.57 591.54 952.35 1257.92 1419.00 1419.71

USESAdministrative Function

Salaries 120.00 137.00 163.50 180.00 196.00 215.00Fringe Benefits 3.00 3.42 4.08 4.49 4.89 5.00

Production Function

Repair, Replacement, and

Regular Maintenance 35.60 49.75 73.45 74.85 84.25 94.00

Chemical Supplies 15.85 27.70 45.80 51.40 53.00 60.00

Distribution Function

Energy 112.65 203.30 344.45 385.00 393.93 400.00

Revenue Function

Administrative & Other 15.54 18.18 21.82 24.46 27.10 32.00

REPLACEMENT FUND A 308.38 308.38 308.38 308.38 308.38 308.38

INTEREST EXPENSES 40.49 40.49 40.49 40.49 40.49 40.49

TOTAL USES 651.51 788.72 1002.47 1075.57 1108.54 1154.87

NET SURPLUS <DEFICIT> <216.94> <197.18> <50.12> 182.35 310.46 264.84

Sources as a % of Total Uses 67% 75% 95% 117% 128% 123%

/I Represents amount appropriated to pay debt service principal to commence 1989/90.

-88-

ANNEX 5Table 8

INDIA


ESTIMATE OF POTENTIAL PROPERTY TAX AND EXPECTED COLLECTION(Rs in lakhs)

(Collection Percentage in brackets)

HOOGHLY SOUTHCHINSURAH KAIARHATI SUBURBAN

Rateable ValueCurrent 68.50 119.35 248.681985-86 /1 119.88 208.86 435.19

Assessment

Current 16.44 32.56 34.061985-86 29.97 52.22 108.80

Total Collection1980-81 15.44 (29) 26.01 (42) 36.34 (33)1981-82 15.79 (30) 26.05 (42) 38.27 (33)1982-83 16.18 (31) 27.35 (42) 37.14 (31)1983-84 18.28 (32) 31.66 (43) 39.00 (33)1984-85 19.19 (33) 34.90 (45) 40.95 (34)

Collection 1985-86Arrears 8.00 (20) 8.75 (35) 13.50 (15)Current 17.98 (60) 28.72 (55) 59.84 (55)TOTAL 25.98 (37) 37.47 (48) 73.34 (37)




Cellection .1989-90Arrears 11.59 (35) 14.46 (35) 47.19 (35)Current 22.48 (75) 39.16 (75) 81.60 (75)TOTAL 34.07 (54) 53.62 (57) 128.79 (53)

11 All CMA municipalities except CMC revised their property tax assessmentbase as of April 1, 1983. However, the GOWB will evaluate the adequacy ofthese valuations, to be completed by December 31, 1983. In the event GOWEconsiders the base in any municipality inadequate, it will cause the CVB,to carry out a general revaluation in such municipalities. Therefore,conservatively, it has been estimated that the full impact of a properassessment base will be realized from the year 1985/86. The rateablevalue is expected to increase by an average 75% over 1982/83 (current)assessment base. The property tax rate is assessed at 25% of rateable value.

INDIA


ANNUAL 0 & M AND OTHER RECURRING EXPENDITURE

(Rs in lakhs)

MUNICIPAL BODIES 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90Actual Actual ------------------------------- estimated------------------------------

HOOCHLY CHINSURAH:UKTT5ting Assets 42.41 45.14 48.28 51.64 55.23 59.02 62.93 67.13 71.64 76.49

On CUDP Ill Assets:

Salary & Wages - - - 1.65 3.84 5.98 6.82 7.12 7.48 7.85

Other recurring - - - 1.11 2.56 3.98 4.55 4.75 5.23 5.75

Interest on Loan - - - 1.73 5.10 9.11 11.79 12.19 0.28 -

Loan Repay. (P&I) - - - - - - - - 19.02 19.02

TOTAL 42.21 45.14 48.28 56.13 66.73 78.09 86.09 92.19 103.65 109.11 oa

KAMARHATI:On Existing Assets 67.22 70.58 74.11 77.82 82.61 87.79 93.06 98.64 104.56 110.83

On CUBP III Assets:Salary & Wages - - - 4.43 10.78 15.40 18.80 21.34 22.41 23.53

Other recurring - - - 2.96 7.19 10.27 12.54 14.24 15.66 17.23

Interest on Loan - - - 2.44 8.35 14.37 18.77 22.04 1.40 -

Loan Repay. (P&I) - - - - - - - 33.70 33.70

TOTAL 67.22 70.58 74.11 87.65 108.93 127.83 143.17 156.26 177.73 185.29

SOUTH SUbURBAN:OT xisting Assets 88.48 95.56 103.21 111.47 120.05 129.22 146.10 157.20 169.30 182.39

On CUDP III Assets:Salary & Wages - - - 4.69 12.11 18.57 20.56 21.84 22.93 24.08

Other recurring - - - 3.13 8.07 12.37 13.70 14.56 16.02 17.62

Interest on Loan - - - 3.91 14.00 25.57 32.61 35.34 1.07 -

Loan Repay. (P&I) - - - - - - - - 52.36 52.36

TOTAL 88.48 95.56 103.21 123.20 154.23 185.73 212.97 228.94 261.68 276.45

(ME) - Principal & Interest Amortization. %D nA


REVISED GRANT STRUCTURE(Re in lakhs)

Total Additional Deficit to Total Deficit

Other Share of Revenue Expenditure Expenditure Total be met from Matching as % of Tot.

Property Internal Entry Tax Income on Existing due to Expenditure FAM Revenue Grant /2 Rev. Expen.

Tax Revenue (Octroi) (1+2+3) Assets CUDP III (5+6) A/C (4-7) (4-7) (8 - 7) %

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

HIooglyAChnsurah /14 18.28 4.70 22.86 45.84 51.64 4.49 56.13 -10.29 N/A 18

1984-85 19.19 5.68 26.29 51.16 55.23 11.50 66.13 -14.97 N/A 231985-86 25.98 5.18 30.23 61.39 50.02 19.07 78.09 -16.70 N/A 21

1986-87 30.45 5.44 34.76 70.65 62.93 23.16 86.00 -15.44 N/A 181987-88 34.77 7.99 39.97 82.73 67.13 25.06 92.19 -9.46 N/A 101988-89 36.39 8.71 45.97 91.07 71.64 32.01 103.65 -12.58 N/A 121989-90 34.07 9.10 52.87 96.04 76.49 32.62 109.11 -13.07 N/A 12

Kamarhati /11983-84 31.66 5.22 45.08 81.96 77.82 9.83 87.65 -5.69 N/A 61984-85 34.90 5.48 51.84 92.22 82.61 26.32 108.93 -16.71 N/A 151985-86 37.47 5.75 59.62 102.84 87.79 40.04 127.83 -24.99 N/A 241986-87 45.24 6.04 68.56 119.84 93.06 50.11 143.17 -23.33 N/A 161987-88 45.93 13.35 78.84 138.12 96.64 57.62 154.26 -16.14 N/A 101988-89 51.46 14.54 90.67 156.67 104.56 73.17 177.73 -21.06 N/A 121989-90 53.62 14.87 104.27 172.76 110.83 74.46 185.29 -12.53 N/A 7

South Suburban /11983-84 39.00 22.08 71.35 132.43 111.47 11.73 123.20 N/A 9.23 N/A 101984-85 40.95 23.19 82.05 146.19 120.05 34.18 154.23 -8.04 N/A 5 01985-86 73.34 24.37 94.36 192.07 129.22 56.51 185.73 N/A 6.34 N/A1986-87 90.37 25.20 108.51 224.08 146.10 66.87 212.97 N/A 11.11 N/A1987-88 106.69 30.53 124.79 262.01 157.20 71.74 228.94 N/A 33.07 N/A1988-89 119.95 32.15 143.51 295.61 169.30 92.38 261.68 N/A 33.93 N/A1989-90 128.79 33.54 165.04 327.37 182.39 94.06 276.45 N/A 50.92 N/A

Note: The above municipalities represent a sample of likely performance rauges by various local bodies. As demonstrated above, those localbodies incurring revenue deficits will gradually decrease their dependence on State Budgetary support relative to the total expenditurerequirements.

Assumptions:Lolumn (1): Obtained from Table 8, Annex 5 which reflect realistic collection and assessment base targets.Column (2): Based on current trends of concome and likely increases based on the ability of individual local bodies to levy other

taxes, licenses and fees.Column (3): Based on current level of total octrol collections by the State, pro rata share of the local bodies based on population

and expected annual increase of 15% a year.Column (5): Based on actual levels of expenditure (operations, maintenance and debt service (P1)), increasing at about 10% per year

on variable expenses. Also reflected in Table 9. Annex 5.

Column (6): Based on actual appraisal estimates of expenditures (operations, maintenance and debt service (P+I)). Also reflected in

in Table 9, Annex 5. tD

/1 Hooghly Chinsurah (pop. 129,338); Kamarhati (pop. 240,418); South Suburban (pop. 394,594).

/2 Matching Grant from FAM Capital Account. Of the 37 municipalities, South Suburban is an exception in terms of its surplus financialposition.

N/A - Not Applicable

-91-ANNEX 5Table 11

CUDP III - MUNICIPAL DEVELOPMENT PROGRAM (MDP)SUMMARY OF SECTOR INVESTMENTS OVER PROJECT PERIOD

(Rs 100000)

Total

Base Costs ------------------------------------ ----- ------------------- (Us$

33/84 94/85 85/86 86/87 87/89 Rs Million)

A. ATER SUPPLY 162.36 191.86 247.39 371.44 386.85 11359.89 14.31B. DRäNGE 166,16 205.85 246.37 371.84 383.86 1,374.08 14.46C S-,T TION

CEWERAGE 34.59 43.44 52,02 74.02 74.02 278.09 2.93

CEP.VICE PRIVY COHVERInN 42.34 52.93 63.51 95.27 98,79 352.93 3,71SOLIW t-,,E ANAýElMENT 104t98 61.05 75.61 107.15 113.36 462.14 1.86

TT 18190 157.42 191,15 276.43 286.16 1,093.06 11.5111 BUSTEE HPROVEMENIT 73.30 91.63 109.95 164.93 171.04 610.95 6.43

z. D PPVD19.64 24.55 29.46 44.19 45.82 163,65 1,72CREM!RIA 7169 9.62 11,54 17.31 17,95 64.11 0,67

5. TRANEPTTI8N INFR(STRUCTURE

PC1MS I ND IG WYS 183.55 229.24 273.99 409.35 4-23.62 11519.74 16,005TREET LIGHTING 15.59 19.49 23.38 35.07 34.36 129.08 1.37

"Tvtal ̂ RASPORfTTp0,4 IFRASTRUCTURE 199,15 248.72 297.37 444.42 159.97 1,649.62 17.363. A9RJETS AD COMLUitrY 1LLS 77.05 93.61 115.57 170.66 181.57 638.46 6.72

To~i e ELINE COSTS 887,24 1023.24 11249.79 11861.21 1s933.23 6,953.72 73.2090.29 99.11 120.99 181.33 187.66 669.39 7.05

Pric Continidencies 38.70 135.24 276,19 570.97 755.70 1,776.91 18.70

ret2 P1OJECT COSTS .1006.24 11257.59 1,645.97 2)613.52 2,876 59 71399,91 98.95

33.00 39.02 50.49 79.35 87.33 289,20 3.04Fori.n Exchzräe 125.53 161,41 214.33 343.46 377.39 11225.63 12.90

Mzrch 2; 193 16:08

-92-

ANNEX 5Table 12

CUDP III - hUNiCIPnL [VELfMENT PIROGRM (MIP)SUMMARY UF INVESThENTS BY SECTOR

(Rs 100000

TRANSPORTATIONSAMITATIQN INFRASIRUCTUIRE Phsical

MARKETS AND 'ContingenciesSERVICE PRIW. SOLID WSTE BUSTEE PARKS R 5ADS AND STREET C0fU11TY

.ATER SUPPLY DRAINAGE SEiRASE CONVERSION MMAWEMENT IMPROVEMENT PLAYSROUiDS CREMATORIA RIGHWAYS LIGHTINS60HLL Total Z AHamLL

i. 1MVEM0NENT COSTS

A. LAND 10.63 8.78 - - 22.36 - - - 10.35 - 86.22 139.34 0.0 0.00

P-ict Centin2encies 2.50 2.04 - - 5.24 - - - 2.43 - 20.62 32.83 0.0 0.00

Su6-Tctz! !MCLUDIG COMTINGENCIES 13.13 10.83 - - 27.60 - - 12.78 - 106.94 171.17 0.0 0.00B. CIVIL WNS 1j292.75 1,365.29 274.51 352,83 254.60 610.85 163.65 64.11 11484.91 129.88 550.70 6,550.09 10.2 669.39

Phvical Conltirencies 165.53 136.53 41.18 35.28 13.24 61.09 - - 148.49 12.99 55.07 669.39 0.0 0.00PriCe ContiMdezie 345,84 351.78 72.78 90,99 62,44 157.51 38,36 15.03 3M5.04 33.49 142.00 19695.23 9,3 157.11

S-Total 1NCLUDM5 CONTINGENCIES 11810.11 11853.61 388.46 479.09 330.27 829.44 202.01 79.14 2018.44 176.36 747.77 8,914.70 9.3 826.49T=e: 54.30 55.61 11.65 14.37 9.91 24.88 6.06 2.37 60.55 5.29 22.43 267.44 9.3 24.79F-ni9n E::chanle 217.21 222.43 46.62 57.49 39.63 99,53 - 4.75 363.32 31.74 89.73 1,172.46 9.5 111.15

C. '.EHICLES - - - - 128.72 - - - 3.31 - - 132.03 0.0 0.00

Prie Cntjndencie - - - - 30.26 - - - 0.40 - - 30.66 0.0 0.00

Sb-!otil ILCUDIr ONT!ENCIES - - - - 159.98 - - - 3,71 - - 162.69 0.0 0.00

T::es- - - - 14.92 - - - 0.37 - - 15.29 0.0 0.00Ftiýn- - - - 29.84 - - - 0.50 - - 30.34 4.0 0.00

D. EGLUIPMENT

OTHER 50.51 - 3.58 - 56.46 - - - 21.17 1.54 133.26 0.0 0.00

Sub-Tctil E01IPhENT 50.51 - 3.58 - 56.46 - - - 21.17 - 1.54 133.26 0.0 0.00Priet Cm.tin:2ncies 11.86 0.89 - 2.26 - - - 2.72 - 0.16 18.09 0.0 0.00

Seb-Thtal INCL1JDINS CO4TINGENCIES 62.37 - 4.47 - 58.72 - - - 23,9 - 1.90 151.35 0.0 0.00T;xes 0.14 - - - 3.74 - - - 2.39 - 0.19 6.46 0.0 0.00

ree E:.chanOe 18.43 - 1.34 - 2.54 - - - 0.33 - Q.19 22.3 0.0 0.00

T^tz! 1N'ESTOENT CQSTS 1,359.89 [b374.08 278.09 352.83 462.14 610.05 163.65 64.11 1,519.74 129.98 639.46 6,053.72 9.6 669.39Phri1 :tL ts 165.53 136.53 41.19 35.28 13.24 61.09 - - 148.49 12.99 55.07 669.39 0.0 0.00Pri0 Contm:encLos 260.20 353.83 73.66 90.98 100.19 157.51 30.36 15.03 39.5 33.49 162.98 1,77.81 8.8 157.12

1h1l INCLOIOs CNTq55ENCIES 5,15.62 1.64.43 392.93 479.09 575.57 829.44 202.01 79,14 2,058.11 176.36 56.51 9,399.91 8, e26.49

T:::es 54.45 55.61 11.65 14.37 28.57 24.88 6.06 2.37 63.31 5.29 22.6? 28Q.20 9.6 24179Foicn E:chZn::e 235.64 222.43 47.96 57.49 72.01 99.53 - 4.75 364.15 31.74 89.92 1,225.63 9.1 111.15

II. PEC'RRENT COSTS

T: SELr 5 S 1359.;9 1,37.0 278.9 352.93 462.14 61D.85 163.65 64.11 1,519.74 129.98 638.46 6.953,72 9.6 669,39Physic1 Cct reneies .165.53 136.53 41.18 35.20 13.24 61.09 - - 148.49 12.99 55.07 669.39 0.0 0.OPiee continecces 360.2C 353.e3 73.66 90.98 100.19 157.51 39.36 15.03 390.5 33.49 102.98 1,776.81 8.8 157.11

T:t Fk oR.£C7 CISTS 1,855.62 1,864.43 392.93 479.09 575.57 829.44 202.01 79.14 2,058.91 176.36 856.51 9,399,91 9.8 826.49

Tz:es 54.45 55.61 11.65 14.37 28.57 24.08 6.06 2.37 63.31 5.29 22.62 289.20 0.6 24,79F:i1n E::chanie 235.64 222.43 47.96 57.49 72.01 99.53 - 4.75 364.15 31.74 09.92 1,225.63 9.1 111.15

!rch 2r 1903 16:08

-93-ANNEX 5Table 13

INDIACUDP III - TRANSMUNICIPAL INFRASTRUCTURE PROJECTS (TRIP)

SUMMARY OF SECTOR INVESTMENTS OVER PROJECT PERIOD

(Rs 100000)

Total

Base Costs ---------------------------------------------------------- (US$83/84 84/85 85/86 86/87 87/88 Rs Million)

A. WATER SUPPLY 217.56 260.74 312.37 468.49 487.11 1,746.28 13.38B. DRAINAGE 53.01 52.36 69.26 100.10 93.40 368.13 3.88C. SANITATION

SEWERAGE 61.72 74.11 105.94 149.18 153.31 544.26 5.73SOLID WASTE MANAGEMENT 9.39 11.84 14.22 21.33 22.11 78.89 0.83

Sub-Total SANITATION 71.11 85.95 120.16 170.51 175.42 623.15 6.56

D. TRANSPORTATION INFRASTRUCTURE

ROADS AND HIGHWAYS 4.86 6.07 7,29 10.93 11.33 40.48 0.43

Sub-Total TRANSPORTATION INFRASTRUCTURE 4.86 6.07 7.29 10.93 11.33 40.48 0.43E. SHELTER AND AREA DEVELOPMENT 27.49 34.34 40.39 62,01 63.52 227.75 2.40

Total BASELINE COSTS 374.03 439.46 549.46 812.04 830.79 3,005.79 31.64Phvsical Contingencies 32.23 38.31 49.04 76.12 77.85 273.55 2.88Price Contingencies 16.25 57.57 120.68 248.27 323.76 766.53 8.07

Total PROJECT COSTS 422.51 535.35 719.19 1,136.43 1,232.40 4,045.87 42.59

Taxes 9.98 13.46 19,10 32.59 35.30 110.43 1.16Foreign Exchange 58.93 77.91 107.39 176.81 192.02 613.07 6.45

April 19, 1983 13'45

-94-INDIA ANNEX 5

CUDP III - TRANSMUNICIPAL INFRASTRUCTURE PROJECTS (TRIP) Table 14SUMMARY OF INVESTmENTS BY SECTOR

(Rs 100,000)

TRANSPORTATIONSANITATION INFRASTRUCTURE Physical

-------------- - --------- SHELTER AND ContingenciesSOLID WASTE ROADS AND AREA -----------

WATER SUPPLY DRAINAGE SEWERAGE MANAGEMENT HIGHWAYS DEVELOPMENT Total % Amount

1. INVESTMENT COSTS

A. LAND 18.51 0.68 - 21.83 36.10 76.51 153.63 0.0 0.00Price Contingencies 0.74 0.03 - 2.07 8.46 9.54 20.84 0.0 0.00

Sub-Total INCLUDING CONTINGENCIES 19.25 0.71 - 23.90 44.56 86.05 174.47 0.0 0.00B. CIVIL WORKS 1i181.94 366.67 452,99 20.56 - 151.24 21l73.40 12.6 273.55

Physical Contingencies 168.63 36.67 50.05 3.08 - 15.12 273.55 0.0 0.00Price Contingencies 314.67 91.79 119.89 6.30 - 48.18 580.83 11.2 64.81

Sub-Total INCLUDING CONTINGENCIES 1,665.23 495.13 622.93 29.94 - 214.55 3,027.78 11.2 338.36Taxes 49.96 14.85 18.69 0.90 - 6.44 90.83 11.2 10.15Foreign Exchange 299.12 59.42 74.75 3.59 - 25.75 462.63 11.5 53.03

C. VEHICLES - - - 27.50 - - 27,50 0.0 0.00Price Contingencies - - - 8.10 - - 8.10 0.0 0.00

Sub-Total INCLUDING CONTINGENCIES - - 35.60 - - 35.60 0.0 0.00Taxes - - - 3.56 - - 3.56 0.0 0.00Foreign Exchange - - - 7.12 - - 7.12 0.0 0.00

D. EQUIPMENT

PLANT 150.83 0.78 91.27 8.50 - - 251.38 0.0 0.00OTHER 395.00 - - 0.50 - - 395.50 0.0 0.00

Sub-Total EQUIPMENT 545.83 0.78 91.27 9.00 - - 646.88 0.0 0.00Price Contingencies 131.58 0.18 21.11 2.86 - - 155.73 0.0 0.00

Sub-Total INCLUDING CONTINGENCIES 677.41 0.96 112.38 11.86 - - 802.61 0.0 0.00Taxes 14.74 0.03 - 1.19 - - 15.95 0.0 0.00Foreign Exchenge 104.98 0.10 33.71 2.37 - - 141.16 0.0 0.00

E. TECHNICAL ASSISTANCE and STUDIES - - - - 4.38 - 4.38 0.0 0.00Price Contingencies - - - - 1.03 - 1.03 0.0 0.00

Sub-Total INCLUDING CONTINGENCIES - - - - 5.41 - 5.41 0.0 0.00Taxes - - - - 0.08 - 0.08 0.0 0.00Foreign Exchange - - - - 2.16 - 2.16 0.0 0.00

Total INVESTMENT COSTS 1,746.28 368.13 544.26 78.89 40.48 227.75 3,005,79 9.1 273.55Physical Contingencies 168.63 36.67 50.05 3.08 - 15.12 273.55 0.0 0.00Price Contingencies 446.98 92.00 141.00 19.33 9.49 57.73 766.53 8.5 64.81

Total INCLUDING CONTINGENCIES 2,361.89 496.80 735.31 101.31 49.97 300.60 4,045.87 8.4 338.36

Taxes 64.69 14.88 18.69 5.64 0.08 6.44 110.43 9.2 10.15Foreign Exchange 404.10 59.51 108.47 13.09 2.16 25.75 613.07 8.6 53.03

II, RECURRENT COSTS

Total BASELINE COSTS 1,746.28 368.13 544.26 78.89 40.48 227.75 3,005.79 9.1 273.55Phvsical Contingencies 168.63 36.67 50.05 3.08 - 15.12 273.55 0.0 0.00Price Contingencies 446.98 92.00 141.00 19.33 9.49 57.73 766.53 8.5 64.81

Total PROJECT COSTS 2,361.89 496.80 735.31 101.31 49.97 300.60 4,045.87 8.4 338.36

Taxes 64.69 14.88 18.69 5.64 0.08 6.44 110.43 9.2 10.15Foreign Exchange 404.10 59.51 108.47 13.09 2.16 25.75 613.07 8.6 53.03

April 19, 1983 13:46

-95- 5Table 15

INDIACUDP III - CALCUTTA HOWRAH INVESTMENT PROGRAM (CHIP)SUMMARY OF SECTOR INVESTMENTS OVER PROJECT PERIOD

(Rs 100000)

TotalBase Costs ---------

-------------- - ---------- (US-

83/84 84/85 85/86 86/87 87/88 Rs Million)

A. UATER SUPPLY 426,80 255.12 255.30 165.18 171.87 1t274.26 13.41

B. DRAINAGE 126.32 99.21 47.64 71.45 74,07 418-.69 4.41

C. SANITATION

SEVERAGE 222.08 245.0 297.42 443.16 458.82 1,666.56 17.54SERVICE PRIVY CONVERSION 20.00 - - - - 20,00 0.21SOLID WASTE MANAGEMENT 174.77 241,78 256.27 160,60 146.29 979.71 10.31

Sub-Total SANITATION 416.85 486.82 553.70 603.79 - 605.11 2Y666,27 28.07P. BUSTEE IMPROVEMENT 300.15 283.93 227.14 - - 811.22 8.54

E. TRANSPORTATION INFRASTRUCTURE

ROADS AND HICHKAYS 158.45 163*90 195.51 283.19 293.44 1,094.49 11.52

STREET LIGHTING 1.85 2.28 2.78 4.13 4.22 15.25 0.16

Sub-Total TRANSPORTATION INFRASTRUCTURE 160.30 166.17 198.29 287.32 297,66 1,10974 11.68F. URBAN RENEWAL 57.24 71.99 86.13 129.19 134.57 479.12 5.04

Total BASELINE COSTS 1,487.66 1,363.25 1,368.21 1f256.92 1,233,27 6,759.30 71.15Physical Contirgencies 131.21 123.21 120.04 105.53 106.87 586.86 6.18Price Contingencies 64.75 179,12 300,08 380.86 495.32 1Y420.13 14,95

Total PROJECT COSTS 1,683.62 1,665.58 1,788.33 1,74331 1,885.46 8,766.29 92,28

Taxes 50.45 50.54 54.35 60.68 62.22 278.25 2.93Foreign Exchange 197.23 197.53 218.57 244.80 255.86 1,113.99 11.73

March 7, 1983 16:41

-96-

INDIA Table 16CUllP III - CALCUTTA HOURAH INVESTMENT PROGRAM (CHIP)

SUMMART OF INVESTMENTS BY SECTOR(Rs 100,000)

TRANSPORTATIONSANITATION INFRASTRUCTURE Phusical

-------- ..--.--.------ ------- - - - - - ContingenciesSERVICE PRIVY SOLID WASTE BUSTEE ROADS AND STREET URPAN -------------

VATER SUPPLY DRAINAGE SEWERAGE CONVERSION MANAGEMENT IMPROVEMENT HIGHWAYS LIGHTING RENEUAL Total Z Amount

1. INVESTMENT COSTS

A. LAND 1.09 13.75 1.00 - 59.60 - 143.08 - 8.00 226.52 0.0 0.00Price Contingencies 0.26 3.22 0.04 - 14.61 - 20.93 - 0,32 39.38 0.0 0.00

Sub-Total INCLUDING CONTINGENCIES 1.35 16.97 1.04 - 74.21 - 164.01 - 8.32 265.90 0.0 0.00B. CIVIL WORKS 1,229.27 404.94 1,445.10 20.00 252.52 811.22 913.72 15.25 471.12 5563.14 10.1 564.47

Phvsical Contingencies 138.40 43.05 175.13 2.00 25.25 81.12 91.37 1.52 6.63 564.47 0.0 0.00Price Contingencies 221.31 77.33 371.35 0.88 42.50 101.22 241,41 3.92 113.79 1,173.70 9.3 109.01

Sub-Total INCLUDING CONTINGENCIES 1,588.98 525.32 1,991.57 22.88 320.27 993.56 1,246.50 20.70 591.54 7,301.32 9.2 673.49Taxes 47.67 15.76 59.75 0.69 9.61 29.81 37.40 0.62 17.75 219.04 9.2 20.20Foreign Exchange 228.74 63.04 238.99 2.75 38.43 119.23 149.59 2.48 70.99 914.22 9.3 85.40

C. VEHICLES 1.15 - - - 297.95 - - - - 299.10 0.0 0.00Price Contingencies 0.09 - - - 72.88 - - - - 72.97 0.0 0.00

Sub-Total INCLUDING CONTINGENCIES 1.24 - - - 370.83 - - - - 372,07 0.0 0.00Taxes 0.12 - - - 37,08 - - - - 37.21 0.0 0.00Foreign Exchange 0.25 - - - 74.17 - - - - 74.41 0.0 0.00

D. EQUIPMENT

PLANT - - 83.35 - 91.36 - 27.53 - - 202.24 0.0 0.00METERS 8.22 - - - - - - - - 8.22 0.0 0.00OTHER 11.17 - 16.89 - 262.33 - 3.28 - - 293.67 7.6 22.38

Sub-Total EQUIPMENT 19.39 - 100.24 - 353.69 - 30.81 - - 504.13 4.4 22.38Physical Contingencies - - - - 22.38 - - - - 22.3e 0.0 0.00Price Contingencies 3.56 - 26.47 - 56.78 - 7.22 - - 94.03 3.0 2.96

Sub-Total INCLUDING CONTINGENCIES 22.95 - 126.71 - 432.85 - 38.03 - - 620.54 4.1 25.25Taxes 2.30 - 5.25 - 10.65 - 3.80 - - 22.00 0.0 0.00Foreign Exchanse 3.02 - 27.51 - 16,73 - 3.80 - - 51.06 0.0 0.00

E. TECHNICAL ASSISTANCE and STUDIES 23.36 - 120.22 - 15.95 - 6.88 - - 166.41 0.0 0.00Price Contingencies 5.48 - 28.18 - 4.78 - 1.61 - - 40I05 0.0 0.00

Sub-Total INCLUDING CONTINGENCIES 28.84 - 148.40 - 20.73 - 8.49 - - 206.46 0.0 0.00Foreign Exchange 11.53 - 59.36 - - - 3.40 - - 74.29 0.0 0.00

Tctal INVESTMENT COSTS 1,274.26 418.69 1P666.56 20.00 979.71 811.22 1,094.49 15.25 479.12 6759.30 8.7 586.86Phvsical Contingencies 138.40 43.05 175.13 2.00 47.63 81.12 91.37 1.52 6.63 586.86 0.0 0.00Price Contingencies 230.69 80.55 426.04 0.88 191.55 101.22 271.17 3.92 114.11 1,420.13 7.9 111.88

Total INCLUDING CONTINGENCIES 1,643.35 542.29 2p267.72 22.88 1>218.89 993.56 1#457.04 20.70 599.86 8,766.29 8.0 698.73

Taxes 50.09 15.76 65.00 0.69 57.34 29.81 41.20 0.62 17.75 278.25 7.3 20.20Foreign Exchanfe 243.54 63.04 325.86 2.75 129.33 119.23 156.78 2.48 70.99 1,113.99 7.7 85.40

II. RECURRENT COSTS

Total BASELINE COSTS 1,274.26 418.69 1,666.56 20.00 979.71 811.22 1,094.49 15.25 479.12 6,759.30 8.7 586.86Phsical Contingencies 138.40 43,05 175.13 2.00 47.63 81.12 91.37 1.52 6.63 506.86 0.0 0.00Price Contingencies 230.69 80.55 426.04 0.88 191.55 101.22 271.17 3.92 114.11 1,420.13 7.9 111.88

Total PROJECT COSTS 1,643.35 542.29 2267.72 22.88 1.218,89 993.56 1,457.04 20.70 599.86 8,766.29 8.0 698.73

Taxes 50.09 15.76 65,00 - 0.69 57.34 29.81 41.20 0.62 17.75 278.25 7.3 20.20Foreign Exchange 243.54 63.04 325.86 2.75 129.33 119.23 156.78 2.48 70.99 1,113.99 7.7 85.40

March 7, 1983 16:41

-97-

ANNEX 5Table 17

INDIACUDP III - CMA-WIDE COMPLEMENTARY PROGRAMS (CMACP)SUMMARY OF SECTOR INVESTMENTS OVER PROJECT PERIOD

iRs 100000)

TotalBase Costs ----------------

-------------------------------------- (US$83/84 84/85 85/86 86/87 87/88 Rs Million)

A. SHELTER AND AREA DEVELOPMENT 865.35 - - - - 865.35 9.11B. HEALTH 115.36 185.52 174.01 100.16 124.38 699.44 7.36C. SMALL SCALE ENTREPRENEUR ( SSE ) PROGRAM 37.28 38.08 39-54 47.47 44,47 206.84 2.18D. PANCHAYAT DEVELOPMENT 157.64 169.18 131.94 198.78 206.45 863.98 9.09E. TECHNICAL ASSISTANCE AND TRAINING 59.14 85.58 79.05 64.12 43.88 331.77 3.49

Total BASELINE COSTS 1,234.76 478.37 424.55 410.53 419#18 2,967.38 31,24Ph-sical Contingencies 28.37 35.99 31.79 35.66 37.81 169.61 1.79Price Contingencies 50.30 60.14 86.40 112.58 142.31 451.73 4,76

Total PROJECT COSTS 1,313.42 574.50 542.73 558.76 599.29 3,588.72 37.78

Taxes 9.48 14.29 15.02 9.71 9.75 58.25 0.61Foreign Exchange 35.01 45.43 43.82 51.29 48,46 224.00 2.36

April 19, 1983 14:08

-98-

INIA ANNEX 5COP IIu - C"-9DE COMLEMNTRY P0GRM (CM ) Table 18

SIMIMY OF INESTMENTS ly SECTOR(Rs 100ow,00

PhmicalSHELTER AN SLL SCALE TEONIICAL Contingencies

REA ENINEIMEUR PMICHMYAT ASSISTACEEEOPMI EALTH SSE ) PRORM DEVELOPIIENT M TRAINIM Total I Aount

1. INESTIFT COSTS

A. CIVIL IORKS 865.35 168.26 - 863.96 78.50 1,976.09 5.8 115.00Phnsical Cotningencies - 16.83 - B6.40 11.78 115.00 0.0 0.00Price Contingencies 34.61 23.46 - 200.66 13.78 272.51 8.1 22.17

Sub-Total CLUIN CONTIMEICIES 899.96 208.54 - 1,151.04 104.05 2,363.60 5.8 137.17Taxes - 6.26 - 29.98 - 36.24 9.1 3.29Foreign Exchane. - 25.02 - 119.92 - 144.95 9.1 13.18

B. VEIICLES - 29.38 - - - 29.38 0.0 0.00Price Contingejus - 3.75 - - - 3.75 0.0 0.00

Sub-Total IELUDING CONTINENCIES - 33.12 - - - 33.12 0.0 0.00Tas - 3.31 - - - 3.31 0.0 0.00Foreign Exchanir - 6.62 - - - 6.62 0.0 0.00

C. EWIPIENT

OTHER - 154.71 3.27 - 58.76 216.74 0.0 0.00

Sub-Total EQUIPHENT - 154.71 3.27 - 58,76 216.74 0.0 0.00Price Contingncies - 21.40 0.13 - 9.77 31,30 0.0 0.00

Sub-Total IMDING CONTINENCIES - 176.10 3.40 - 68,53 248.03 0.0 0.00Taxes - 17.61 - - - 17.61 0.0 0.00Foreign Exchenwe - - - - 4.14 4.14 0.0 0.00

D. LOMS - - 60,00 - - 60,00 0.0 0.00

Sub-Total INCLUDING COIINME IES - - 60.00 - - 60.00 0.0 0.00E. TECHNICAL ASSISTANCE and STUDIES - 48.25 6.94 - 79.61 134.80 0.0 0.00

Price Contingencies - 7.94 0.56 - 15.34 23.83 0.0 0.00

Sub-Total INCLUDIM CONTINGENCIES - 56.19 7.50 - 94.95 158.63 0.0 0,00Taxes - - - - 1.09 1.09 0.0 0.00Foreign Exchange - - - - 68.28 68.28 0.0 0.00

F. TRAININ - - 4.29 - - 4.29 0.0 0.00Price Continencies - - 0.52 - - 0.52 0.0 0.00

Sub-Total INCLU11IN CONTIMENCIES - - 4.81 - - 4.81 0.0 0.00

Total IIVESTMENT COSTS 865.35 400.59 74.50 863.98 216.87 2,421.29 4.7 115.00Phvsical Contingencies - 16.83 - 86.40 11,78 115.00 0.0 0.00Price Contingencies 34.61 56.54 1.21 200.66 380.8 331,91 6.7 22.17

Total INC.lDING CONTINGENCIES 899.96 473.96 75.70 1.151.04 267.53 2.868.20 4.8 137.17

Taxes - 27.18 - 29.98 1.09 58.25 5.7 3.29Foreign Excwe - 31.65 - 119.92 72.43 224.00 5.9 13.18

II. RECUiRENT COSTS

A. SALARIES , FEES MD ALLOMIRCS - 264.78 129,99 - 114.90 509.66 10.0 50.97Phvsical Contingencies - 26.40 13.00 - 11.49 50.97 0.0 0.00Prit? Contindencies - 53.46 29.54 - 27.60 109.60 9.1 9,96

Sub-Total INCLUDIN CONTINGENCIES - 344.71 171.53 - 153.99 670.24 9.1 60.93D. UEHICLE 0 AND N - 3.98 2.35 - - 6.33 10.0 0.63

Phasical Contingencies - 0.40 0.24 - - 0.63 0.0 0.00Price Contingencies - 0.07 0.52 - - 1.39 9.1 0.13

Sub-Total INLUDING CONTINGENCIES - 5.25 3.10 - - 8.35 9.1 0.76C. SUPPLIES MID MISC. MATERIALS - 30.10 - - - 30.10 10.0 3.01

Ph9sical Contingencies - 3.01 - - - 3.01 0.0 0.00Price Contingencies - 0.83 - - - 8.83 9.1 0.80

Sub-Total INCLUDINB CONTINENCIES - 41.94 - - - 41.94 9.1 3.81

Total RECURRENT COSTS - 29.85 132.34 - 114.90 546.09 10.0 54.61Phusical Contingencies - 29.89 13.23 - 11.49 54.61 0.0 0.00Price Contingencies - 63.17 29.06 - 27.60 119.82 9.1 10.89

Total INCLUDINS CONTINGEIES - 391.90 174.63 - 153.99 720.52 9.1 65.50

Total DASELINE COSTS 865.35 699.44 206.84 863.98 331.77 2,967.38 5.7 169.61Phvsical Contingencies - 46.71 13.23 86.40 23.27 169.61 0.0 0.00Price Contingencies 34.61 119.71 30.26 200.66 66.48 451.73 7.3 33.06

Total PROJECT COSTS 899.96 865.86 250.34 1,151.04 421.52 35B8.72 5.6 202.67

Taxes - 27.18 - 29.90 1.09 58.25 5.7 3.29Foreign Exchange - 31.65 - 119.92 72.43 224.00 5.9 13.18

April 19, 1983 14:08

гиt пАCUBP III - TkANSMUNICIPAI. 1NEkA5TRUCTUf�E F'ROJECT5 (TRIP1

Ta Ы e 201. HAftRANAGAR AAMAfiHAI1 WATEk TkEATиENI PLANT ANIi PkIMARY GkIllUetailed Cost ia Ы e

Base Costs Tntals 1псlидцьs Contu �� encaes(Rs 100000) tF;s 100000i Рhц,

----------------------------------------------- ---------------------------------------------- Cont. for. Lros �. Sии�тагцUnit 83/84 84/85 В5/8 Ь 86/87 В718 В Tota1 83/84 841 В5 В5/fl6 ВЬ/87 87/88 Tota1 k>te E,.ch. Та:, Rate Account---- ------- ------- ------- ------- ------- -------- --___-- ------- ------- ------- ------ -----°-- ----- ----- ------- -°-------- ------- ------- ------- ------- --°--- -------- ------- ------- ------- ------- ------- -------- ----- ----- ------ -------

I. INVESTMEMi COSTS------------°---А, LАир Ма 18.51 - - - - 18.51 19.25 - - - - 19,25 0 0 0 LAВ, CIVII 1dORK5

-°--------- и

kI5IMG МАIи Unat 10.44 13.04 15.65 2Э.4В 24.35 Bb.96 12,48 16.81 27.63 34.55 37.9 В 123.45 0.15 0.1 В 0.03 CWI1dTAKE 5TRUCTURES Unit 7.59 9.49 11.39 17,08 17 J2 63.27 9.ОВ 12,23 15.74 25.14 27. Ь3 В9.82 0.15 0.18 0,03 СИтВЕАТМЕитРЕАитs ткистикеs unat 45, ьВ s7.10 Ьв,s2 1 о2.7в 1оь,s е зво. ьь s4. ьз 7з.s В 94, ье 151.2з 166.2s s4 о. з7 о,15 0.1 В о. оз сиPRIMARY GRID У.о 15.50 19.36 23.28 34.93 36.17 129.25 18.54 24,95 32,18 51,39 56,42 1В3.4 В 0.15 0,18 0.03 CW5TAFF OUARTERS Unat 4.91 6.14 7.36 11.05 11.45 40.91 5.62 7,56 9,73 15.55 17.09 55.55 0,1 4.1 В 0.03 CWROAUS Unii 3,93 4.92 5.90 8,85 9,18 32.79 4,50 6, ОЬ 7.80 12.46 13 JO 44.52 0,1 0.18 0,03 CW IMISCELLAME0115 Unat 2.60 3.25 3,90 5. В5 6.07 21. ЬВ 2.9 В 4.01 5,16 8,24 9.06 24,44 0.1 0.1 В О,б3 СВ ��

------- ------- ------- ------- ------- --- ---- ------- ------- ------- ------- ------- -------- 15ub-Tata1 CIVIL aORKS 90.6b 113.30 13д.01 204.02 211.53 155,52 101.83 145,20 18Ь.92 298,5 Ь 32В.12 1,066.63С. EOl1IPMENT

PUMPS апд MOTOFS Мо 12.46 15,57 1В,б9 2В,О3 29,07 103. ВЗ 12,96 П .45 224 Ь 35>87 39.43 I28,17 б 0.3 0 ЕФMI$CELLANEOU5 UniC 1.47 24,94 29.40 44.10 47.04 i47.00 1,53 2В.00 35.33 56.43 63, В0 1В5.09 4 0.1 0.03 ЕОО

------- ------- -----° ------- ----°- -------- ---°-- ------- ------- ------- --- �---- --------5ub-Tota1 EpUIF' МЕМТ 13.93 40,58 48,09 72,13 7Ь,11 250> ВЗ 14,49 45,45 57.7 Ч Ч2,30 I03.23 313.26

------- ------- ------- ------- ------ -------- ------- ------- ------- ------- ------- --------Tota1 IkUESTMENT CQSTS 123,09 153.87 Р84.10 27d,PS 2В7. Ь4 1+024. В6 141,57 190.65 244 J1 390.86 431.35 1v399,14

------- ------- ------- ------- ---..__- ------- ------ ------- °----- ------- ------- --------------- ------- ------ ------- -----°- -------- ------- ------- ------- ------ ------- --------Tota1 bA5ELINE С05 Т5 123.09 153. В"7 1В4.14 276,15 287.64 1+024.86 141.57 190.65 244 J1 390. Вб 431.35 1+399.14

---------------------------------------°-----------------------------------------------------------------------------------------------------------------------------Rггь1 14 я 1983 12.32

н а� �н С�г0 �с�� и

INDIACUDP III - TRANSMUNICIPAL INFRASTRUCTURE PROJECTS (TRIP)

Table 202, RENOVATION OF SERAMPORE WATER TREATMENT PLANTY AND PRIMARY GRIDDetailed Cost Table

Base Costs Totals Including Contingencies(Rs 1000DO) (Rs-100000) Phu.

--------------------------------------------- --------------------------------------------- Cont. For. Gross SwwaryUnit 83/84 84/85 85/86 86/87 87/88 Total 83/84 84/85 85/86 86/87 87/88 Total Rate Exch. Tax Rate Account

I. INVESTMENT COSTS----------------

A. CIVIL WORKS------------

RISING MAIN Unit 0.48 O 60 0.72 1.08 1.12 4.00 0.57 0.77 0.99 1,59 1.75 5,68 0.15 0.18 0.03 CWINTAKE STRUCTURES Unit 6.00 7.50 9.00 13.50 14-00 50,00 7.18 9.66 12.44 19,86 21.84 70,98 0.15 0.18 0.03 CvTREATMENT PLANT STRUCTURES Unit 21.90 27.38 32.85 49.28 51.10 182.50 26.19 35.27 45.39 72.51 79.70 259.07 0.15 0.18 0.03 CWSTAFF QUARTERS Unit 1,27 1.59 1.91 2.86 2.97 10.60 1.46 1.96 2.52 4,03 4,43 14*39 0.1 0.18 0003 CvPRIMARY GRID ke 13.42 16.81 20.20 30.23 31.36 112.04 16.05 21.66 27.92 44.49 4B.92 159;04 0.15 0.18 0.03 CWMISCELLANEOUS ks 6,99 8.74 10.49 15.74 16,32 58.29 8.00 10.77 13.87 22.15 24.35 79.14 0.1 0418 0.03 Cu

----- ------- ------- ------- ------- ------- ----- ------- ------- ------- ------- -------Sub-Total CIVIL WORKS 50.07 62.62 75.17 112.69 116.87 417.42 59.45 $0,11 103.13 164t63 180.98 588.30B. EQUIPMENT

PUMPS AND MOTORS No 5.64 7.05 B.46 12.6? 13.16 47.00 5,87 7.90 10.17 16.24 17.85 58.02 0 0.3 0 EOPMISCELLANEOUS unit 29.76 37.20 44.64 66.96 69.44 248.00 30.95 41.68 53.64 85.68 94.18 306.13 0 0.1 0.03 EGO

----- ------- ------- ------- ------- ------- ----- ------- ------- ------- ------- -------Sub-Total EQUIPMENT 35.40 44.25 53.10 79.65 B2.60 295.00 36.82 49.58 63.91 101.92 112.03 364.15

----- ------- ------- ------- ------- ------- ----- ------- ---- : --- ------- ------- -------Total INVESTMENT COSTS B5.47 106.87 128.27 192.34 i99.47 712.42 %.27 129.69 166,94 266.54 293.01 9S2.45

Total BASELINE COSTS 85.47 106.87 128.27 192.34 199.47 712.42 96.27 129.69 166.94 266,54 293.01 952.45

---------------------- --------------------------------------------------------------------------------------------------------------------- ---------------------

April 19Y,1983 12:32

INDIACUDP III - CALCUTTA-HOWRAH INVESTMENT PROGRAM (CHIP)

Table 302, REMODELLING OF EXISTING MAINS-PHASE I

Detailed Cost lableBase Costs Totals Including Cortingencies(Rs 100000) (Rs 100000) Ph'.

-------------------------------- - --------------------------------- Cont. For. Gross SumrsUnit 83/84 84/85 85/86 86/87 87/88 Total 83/84 84/85 85/86 86/87 87/88 Total Rate E'ch, Tax Rate Account

I. INVESTMENT COSTS

A. LAND Unit 0.13 0.16 0.20 0.29 0.31 1.09 0.14 0.18 0.24 0.38 0.41 1.35 0 0 0 LAB. CIVIL WORKS

PRIMARY GRID km 40.03 50.04 60.04 90.07 93.40 333,58 47.88 64.48 82.97 132.53 145.69 473.54 0.15 0.18 0.03 CU

MISCELLANEOUS Unit 14.22 17.77 21.32 31.98 33.17 118.46 16.26 21.90 28.18 45.02 49.49 160.85 0.1 0.18 0.03 Cw

Sub-Total CIVIL WORKS 54.24 67.81 81.37 122.05 126.57 452.04 64.14 86.38 111.16 177.55 195.17 634.39

C. TECHNICAL ASSISTANCE AND STUDIES

SURVEY AND CONSULTANCY Unit 2.80 3.50 4.20 6.31 6.54 23.36 2.92 3.93 5.05 8.07 8.87 28.84 0 0.4 0 TAS

Total INVESTMENT COSTS 57-18 71.47 85.77 128.65 133.42 476.49 6719 9049 11645 185.99 204.46 66457

Total BASELINE COSTS 57,18 71.47 85.77 128.65 133.42 476.49 67.19 90.49 116.45 185.99 204,46 664,57

April 19, 1983 12:39

-UD III - 'ALrUTTA-HOWRAH INVESTMENT PROGRAM (CHIP)'so!- i2l, RECONSTRUCTION OF DURGAPUR BRIDGE

7etailed Cost Table

K. e Totals Including ContingenciesRc 1000' Rs 100000) Phs.-C - ------ ..-.-.- ___--- Cont. For. Gross Summarv

Unit 83/84 84/85 85/86 86/87 87.88 Total 4 )4.3 3E S: 86/37 37/88 Total Rate Exch. Tax Rate Account

I. INVESTMENT COSTS

A. LAND Unit 3.00 6.00 6.00 - - 15.00 3,12 6.72 Ot21 - - 1 0 0 0 LAB. CIVIL WORKS

BRIDGE Unit 15.36 19.20 23.04 34.56 35.84 128.00 17.57 23.66 30.45 48.64 53.47 17,81 0-1 0.12 <03 CWAPPROACH BOX VIADUCT Unit 11.71 14,64 17.57 26.35 27.33 97.60 13.40 18.04 23.22 37.09 40.77 132.53 0.1 0.12 0.03 CWAPPROACH ROAD JUNCTION AND IMPROVEMENTS Unit 6.37 7.97 9.56 14.34 14.87 53.10 7.29 9.82 12.63 20.18 22.18 72.10 0.1 0.12 0103 CW

Sub-Total CIVIL WORKS 33.44 41.81 50.17 75.25 78.04 278.70 38.26 51.53 66.31 105,91 116.43 378.43C. TECHNICAL ASSISTANCE AND STUDIES

SURVEY AND CONSULTANCY Unit 0.27 0.34 0.41 0.61 0.64 2.27 0 28 0.38 0.49 0 78 0.86 2.80 0 0.4 0 TAS

Total INVESTMENT COSTS 36.72 48.15 56.57 75.86 78.67 295.97 41.66 58.63 '4.01 106.70 117.29 398.29

Total BASELINE COSTS 36.72 48.15 56.57 75.86 78.67 295,97 41,66 58.63 74.01 106.70 117.29 398,29

April 19. 1983 12:40

INDIA 4

THIRD CALCUTTA URBAN DEVELOPMENT PROJECTMAJOR WATER SUPPLY, DRAINAGE, X>

AND SANITATION INVESTMENTS

Project BoundarySEWERAGE WORKS

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