Completion Report

PUBLIC

Project Number: 37143-033

MFF Number: 0058
Loan Number: 3073
Technical Assistance Number: 7838
December 2023

India: North Eastern State Roads Investment

Program - Project 2 and Multitranche
Financing Facility

This document is being disclosed to the public in accordance with ADB's Access to Information
Policy.
 CURRENCY EQUIVALENTS

Currency unit – Indian rupee (₹)

At Approval At Project Completion

(25 October 2013) (30 June 2021)
₹1.00 = $0.01627 $0.0134
$1.00 = ₹61.4745 ₹74.24

ABBREVIATIONS

ADB – Asian Development Bank

APFS – audited project financial statement
CCEA – Cabinet Committee on Economic Affairs
CPS – country partnership strategy
CPR – community property resource
COVID-19 – coronavirus disease
CSC – construction supervision consultant
DPR – detailed project report
DMF – design and monitoring framework
EIRR – economic internal rate of return
EMP – environmental management plan
EMR – environmental monitoring report
FY – fiscal year
Ha – hectare
IEE – initial environmental examination
IPPMS – investment program performance monitoring system
Km – kilometer
M – meter
MDONER – Ministry of Development of North Eastern Region
MFF – multitranche financing facility
NER – North Eastern Region
NESRIP – North Eastern State Roads Investment Program
PIU – project implementation unit
PMU – project management unit
PWD – Public Works Department
SMR – social monitoring report
SPS – Safeguards Policy Statement
SARDP-NE – Special Accelerated Road Development Program
in the North Eastern Region
TA – technical assistance
VOC – vehicle operating cost

NOTES
(i) The fiscal year (FY) of the Government of India ends on 31 March.
“FY” before a calendar year denotes the year in which the fiscal year
ends, e.g., FY2023 ends on 31 March 2023.

(ii) In this report, “$” refers to United States dollars.

Vice-President Shixin Chen, Office of the Vice-President (South, Central and
West Asia)
Director General Takeo Konishi, South Asia Department (SARD)a
Deputy Director General Cindy Malvicini, SARD

Team Leader Meenakshi Sharma, Project Analyst, INRM, SARD

Team Members Deepa Ahluwalia, Senior Social Development Officer (Gender),
INRM, SARD
Jagir Kumar, Senior Project Officer, INRM, SARD
Nilesh Kumar, Environment officer, INRM, SARD
Pravash Mishra, Senior Safeguards Officer, INRM, SARD
a
Concurrently Country Director, India Resident Mission

In preparing any country program or strategy, financing any project, or by making any
designation of or reference to a particular territory or geographic area in this document, the
Asian Development Bank does not intend to make any judgments as to the legal or other status
of any territory or area.
 CONTENTS

Page
BASIC DATA i
I. PROJECT DESIGN AND IMPLEMENTATION 1
A. Rationale 1
B. Project Impact, Outcome, and Output 2
C. Project Costs and Financing 4
D. Disbursement 4
E. Project Schedule 5
F. Implementation Arrangements 5
G. Technical Assistance 6
H. Procurement 7
I. Poverty, Social, and Gender Equality 8
J. Safeguards 8
K. Monitoring and Reporting 11
II. EVALUATION OF PERFORMANCE 11
A. Relevance 11
B. Effectiveness 12
C. Efficiency 13
D. Sustainability 14
E. Development Impact 15
F. Performance of the Borrower and the Executing Agency 16
G. Performance of the Asian Development Bank 16
H. Overall Assessment 17
III. ISSUES, LESSONS, AND RECOMMENDATIONS 17
A. Issues and Lessons 17
B. Recommendations 18

APPENDIXES
1. Design and Monitoring Frameworks 19
2. Costs at Approval and Actual 23
3. Project 2 Cost by Financier 25
4. Disbursement of ADB Loan Proceeds 27
5. Appraisal and Actual Implementation Schedules 28
6. Chronology of Main Events 30
7. Organization Chart of Project Implementation 31
8. Technical Assistance Completion Report 32
9. Contract Awards of ADB Loan Proceeds 39
10. Summary of Contracts 40
11. Safeguards Assessment 41
12. Status of Compliance with Loan Covenants 47
13. Economic and Financial Analyses 78
14. Summary of the Socioeconomic Impacts 90
15. Contribution to Strategy 2030 Operational Priorities 93
 BASIC DATA

I. MULTITRANCHE FINANCING FACILITY

A. Facility Identification
1. Facility number and facility title 0058: North Eastern State Roads
Investment Program
2. Mode of financial assistance Multitranche financing facility
3. Country India
4. Borrower Government of India
5. Executing agencies (i) Ministry of Development of North
Eastern Region at the national level;
(ii) State of Assam, acting through its
Public Works Department (PWD);
(iii) State of Meghalaya, acting
through its PWD; (iv) State of
Manipur, acting through its PWD;
(v) State of Mizoram, acting through
its PWD; (vi) State of Sikkim, acting
through its Roads and Bridges
Department; and (vii) State of
Tripura, acting through its PWD.

Financing
Approval Amount Financing Product Modality
Item Number ($ million) Source and Nature of Activities
Loan MF0058 200.00 Ordinary Multitranche financing
capital facility
resources
Government 66.70
Project Total 266.70
Source: Asian Development Bank.

B. Milestone Dates by Product

Item Loan
Approval of concept clearance
– Date started 23 November 2005
– Date completed 23 November 2005
Fact-finding mission
– Date started 10 May 2006
– Date completed 25 May 2006
Investment program negotiations
– Date started 16 June 2011
– Date completed 17 June 2011
Date of Board approval 21 July 2011
Date of framework financing agreement 17 June 2011
Multitranche financing facility availability
period
– At approval 30 June 2017
– Actual 30 June 2021
– Number of extensions 1
 ii

Item Loan
Investment program closing date
– In loan agreement at approval 31 March 2020
– Latest revised 30 June 2021
– Number of extensions 1
Financial closing date (Tranche 1) 2 March 2022a
a Tranche 2 financial closing date was 8 November 2021.
Source: Asian Development Bank.

C. Facility Cost and Financing

1. Facility cost ($ million)
Cost Estimate at Approval Actual
Foreign exchange cost - -
Local currency cost 266.70 288.21
Total 266.70 288.21
Source: Asian Development Bank.

2. Cost breakdown by project component ($ million)

Component Estimate at Approval Actual
A. Base Cost
I. Investment component 217.20 273.36
II. Project management and capacity development 1.20 0.39
component

B. Contingencies 37.50 0.00

C. Financing charges during implementation 10.80 14.46
Total (A+B+C) 266.70 288.21
Source: Asian Development Bank.

3. Financing plan and actual ($ million)

Cost Estimate at Approval Actual
Implementation cost
Borrower-financed 55.90 74.07
Asian Development Bank-financed 200.00 199.68
Other external financing 0.00 0.00
Total implementation cost 255.90 273.75
Interest during construction costs
Borrower-financed 10.80 14.46
Asian Development Bank-financed 0.00 0.00
Other external financing 0.00 0.00
Total interest during construction cost 10.80 14.46
Source: Asian Development Bank.

4. Disbursements
a. Disbursement dates by product
First Disbursement,
First Disbursement excluding Capitalization Final Disbursement
Loan 2770 2 April 2013 – 2 March 2022
Loan 3073 9 September 2015 – 8 November 2021
Source: Asian Development Bank.
 iii

b. Amount ($ million)
Original Canceled during Last Revised Amount Undisbursed
Allocation Implementation Allocation Disbursed Balance
Category (1) (2) (3 = 1-2) (4) (5 = 3-4)
Loan 2770 74.80 0.00 74.80 74.48 0.32
Loan 3073 125.20 0.00 125.20 125.20 0.00
Total 200.00 0.00 200.00 199.68 0.32
Note: The undisbursed amount was canceled at financial account closure.
Source: Asian Development Bank.
 iv

II. PROJECT 2

A. Project Identification
1. Project number and project title 37143-033: North Eastern State
Roads Investment Program – Project
2
2. Mode of financial assistance Ordinary capital resources
3. Country India
4. Borrower Government of India
5. Executing agencies (i) Ministry of Development of North
Eastern Region at the national level;
(ii) State of Assam, acting through its
PWD;
(iii) State of Manipur, acting through
its PWD;
(iv) State of Mizoram, acting through
its PWD; and
(v) State of Tripura, acting through
its PWD.
6. Products

Item Approval Financing Amount Financing Product Modality

Number ($ million) Source and Nature of Activities
Loan 3073 125.20 Ordinary Multitranche financing facility
capital (project loan)
resources
Government 32.00 MDONER -
TA 7838 1.20 The Japan
Fund for
Prosperous
-
and Resilient
Asia and the
Pacific
Project Total 158.40
TA = technical assistance.
Note: TA 8063-Advanced Project Preparedness for Poverty Reduction (Subproject 24), a TA cluster subproject under
TA 0003-IND, was approved on 23 March 2012 for $700,000 to co-finance TA 7838-IND-Capacity Building for North
Eastern State Roads Sector
Source: Asian Development Bank.

B. Milestone Dates by Product

Item Loan 3073
Approval of concept clearance
– Date started 23 November 2005
– Date completed 23 November 2005
Fact-finding mission
– Date started 10 May 2006
– Date completed 25 May 2006
Loan negotiations
– Date started 24 October 2013
 v

Item Loan 3073

– Date completed 25 October 2013
Date of Board approval 2 December 2013
Date of loan agreement 17 February 2014
Date of loan effectiveness
– In loan agreement 18 May 2014
– Actual 20 May 2014
– Number of extensions 1
Project completion date
– At approval 30 September 2019
– Actual 30 June 2021a
Loan closing date
– In loan agreement at approval 31 March 2020
– Latest revised 30 June 2021a
– Number of extensions 1
Financial closing date 8 November 2021
a
Except Tripura, where balance works was completed by 13 January 2023
using resources from the Ministry of Development of North Eastern Region.
Source: Asian Development Bank.

C. Milestone Dates of Attached Technical Assistance

Item TA (Attached)
TA approval date 21 July 2011
TA signing (effective) date 25 May 2012
TA completion date
– At approval 30 June 2014
– Latest revised date 31 December 2014
– Number of extensions 1
Financial closing date 31 May 2015
TA = technical assistance.

D. Project Cost and Financing

1. Project cost ($ million)
Cost a Estimate at Approval Actual
Foreign exchange cost 0.00 0.00
Local currency cost 157.20 183.92 a
Total 157.20 183.92
a
Including government financing.

2. Cost breakdown by project component ($ million)

Estimate at
Component a Approval Actual
A. Base Cost
I. Investment component 129.20 175.51 b
II. Project management and capacity development 0.10 0.00
component
B. Contingencies 23.60 0.00
C. Financing charges during implementation 4.30 8.41
Total (A+B+C) 157.20 183.92
a
Including government financing.
b Includes contingencies.
Source: Asian Development Bank.
 vi

3. Financing plan and actual ($ million)

Cost Estimate at Approval Actual
Implementation cost
Borrower-financed 27.70 50.31
Asian Development Bank-financed 125.20 125.20
Other external financing 0.00 0.00
Total implementation cost 152.90 175.51
Interest during construction costs
Borrower financed 4.30 8.41
Asian Development Bank financed 0.00 0.00
Other external financing 0.00 0.00
Total interest during construction cost 4.30 8.41
Source: Asian Development Bank.

4. Disbursements
a. Disbursement dates by product
First Disbursement,
First Excluding Final
Disbursement Capitalization Disbursement
Loan 3073 9 September 2015 – 8 November 2021

b. Loan disbursed amount ($ million)

Increased/
Decreased Canceled Last
Original during during Revised Amount Undisbursed
Allocationa Implementation Implementation Allocation b Disbursed Balance
Category (1) (2) (3) (4 = 1+2-3) (5) (6 = 4-5)
Works 96.50 18.49 0.00 114.99 116.39 (1.40)
Equipment 0.60 (0.60) 0.00 0.00 0.00 0.00
Consulting 8.30 1.91 0.00 10.21 8.81 1.40
services
Unallocated 19.80 (19.80) 0.00 0.00 0.00 0.00
Total 125.20 0.00 0.00 125.20 125.20 0.00
( ) = negative.
a From the loan agreement.
b The amounts were reallocated as requested by the Ministry of Development of North Eastern Region.

Source: Asian Development Bank.

5. Terms of loan by product

– Interest rate LIBOR plus 0.6% less 0.1%
– Maturity (no. of years) 25
– Grace period (no. of years) 5
 vii

E. Project Implementation
1. Project Schedule
Item Estimate at Actual
Approval
A. PMC
Recruitment Q2 2011–Q4 2012 Q4 2011–Q3 2012
Consulting services execution Q4 2012–Q2 2017 Q3 2012–Q3 2017a
B. Civil Works (Project 2)
Procurement Q2 2012–Q1 2014 Q2 2012–Q2 2015 b
Construction Q1 2014–Q3 2019 Q4 2013–Q3 2021 b
Maintenance Q4 2019–Q4 2020 Q1 2020–Q1 2024
C. CSC (Project 2)
Recruitment Q4 2011–Q4 2013 Q4 2011–Q2 2014
Consulting services execution Q1 2014–Q3 2019 Q4 2013–Q1 2022c

CSC = construction supervision consultant, MDONER = Ministry of Development of North Eastern Region, PMC =
project management consultant, PMU = project management unit, Q = quarter.
a
The PMC was terminated in 2017 upon completion of the original contract and due to poor performance, it was not
extended. Subsequently, the PMU in the MDONER monitored the project.
b The Tripura state terminated the civil works contract and re-awarded it to a new contractor on 18 March 2021. The

civil works was completed on 13 January 2023, beyond the loan completion date of 30 June 2021.
c The states of Mizoram and Assam extended the CSC’s services beyond the loan closing date of 30 June 2021.

Source: Asian Development Bank.

2. Project Implementation Indicators

Project Indicator Description
Project readiness Design-ready
Concept approval to first disbursement (days) 3,577
Signing to first disbursement (days) 569
Loan closing to financial closing (days) 131

3. Project Performance Ratings for Tranche 2 (Project 2)

Contract Disburse-
Awards ment Financial Technical/
Year Overall Safeguards
Management Output
(%) (%)
Q2 On track 100.000 100.000 Yes Yes Satisfactory
2014 Q3 On track 100.000 100.000 Yes Yes Satisfactory
Q4 On track 100.000 100.000 Yes Yes Satisfactory
Q1 On track 100.000 100.000 Yes Yes Satisfactory
Q2 On track 100.000 100.000 Yes Yes Satisfactory
2015 Q3 Actual problem 100.000 60.700 No Yes Satisfactory
Potential
Q4 100.000 100.000 No Yes Satisfactory
problem
Potential
Q1 100.000 100.000 No Yes Satisfactory
problem
Potential
Q2 98.720 100.000 No Yes Satisfactory
2016 problem
Q3 On track 99.526 100.000 Yes Yes Satisfactory
Potential
Q4 98.040 99.575 No Yes Satisfactory
problem
 viii

Contract Disburse-
Awards ment Financial Technical/
Year Overall Safeguards
Management Output
(%) (%)
Q1 On track 100.000 94.498 Yes Yes Satisfactory
Q2 On track 100.000 80.938 Yes Yes Satisfactory
2017
Q3 On track 100.000 82.958 Yes Yes Satisfactory
Q4 On track 100.000 83.319 Yes Yes Satisfactory
Q1 On track 100.000 83.319 Yes Yes Satisfactory
Q2 On track 98.329 86.340 Yes Yes Satisfactory
2018
Q3 On track 94.766 93.156 Yes Yes Satisfactory
Q4 For attention 100.000 100.000 Yes Yes On track
Q1 On track 97.271 88.817 Yes Yes Satisfactory
Q2 On track 97.544 94.964 Yes Yes Satisfactory
2019 Potential
Q3 96.293 93.425 No Yes Satisfactory
problem
Q4 On track 98.094 100.000 For attention Yes On track
Q1 On track 98.094 100.000 For attention Yes On track
Q2 On track 100.000 95.825 For attention On track On track
2020
Q3 On track 100.000 97.575 For attention On track On track
Q4 On track 99.987 94.734 On track On track On track
Q1 On track 99.987 94.734 On track On track On track
Q2 On track 99.114 94.050 On track On track On track
2021
Q3 On track 100.000 98.907 On track On track On track
Q4 For attention 100.000 100.000 At risk On track On track
Q = quarter.

4. Asian Development Bank Missions for Tranche 2 (Project 2)

Virtual
Name of No. of No. of Specialization
Date Mission
Mission Persons Person-Days of Members
(Yes/No)
Consultation 19–21 April 2006 2 6 v (2) No
Fact-finding 10–25 May 2006 4 64 t (2), v, w No
Consultation 15–18 December 2009 2 8 n, v a No
Appraisal 19–21 May and 22 June 2010 4 16 b, l, v (2) No
Inception 12–16 September 2011 5 25 b, j, o, t, v No
Review 25–26 October 2012 2 4 e, v No
Special
25 Feb 2013–6 Mar 2013 5 50 f, h, m, t, v No
Consultation
Consultation 12–23 July 2013 2 24 m, v No
Consultation 19–20 August 2013 5 10 d, g, o, r, v No
Consultation 9–13 December 2013 3 15 h, m, v No
Review 13–17 October 2014 3 15 p, t, v No
Review 29 January–2 February 2015 4 20 j, t, v (2) No
SPAM 22–26 February 2016 2 10 n, r No
SPAM 14–18 March 2016 2 10 n, r No
SPAM 25–30 April 2016 2 12 n, r No
SPAM 6–10 September 2016 1 5 n
SPAM 20–24 September 2016 2 10 n, r No
19–22 December 2016
SPAM 2 18 n, r No
8–12 January 2017
SPAM 27–31 March 2017 2 10 n, r
8–12 May 2017
SPAM 3 33 n, r, t No
22–27 May 2017
SPAM 18–22 September 2017 4 41 i, n, r, t b No
 ix

Virtual
Name of No. of No. of Specialization
Date Mission
Mission Persons Person-Days of Members
(Yes/No)
10–14 October 2017
1–3 November 2017
SPAM 5–9 February 2018 2 10 n, r No
SPAM 16–20 April 2018 2 10 n, r
SPAM 20–24 August 2018 3 15 n, r, t No
SPAM 20–22 December 2018 1 3 n
Review 26 Nov–1 Dec 2018 2 12 n, r No
Review 18–20 February 2019 3 9 a, n, r No
Midterm
6–10 May 2019 4 20 a, n, r, t No
Review
SPAM 23–28 September 2019 2 12 n, r No
Review 10–15 September 2020 4 24 a, k, r, t Yes
Review 16–19 November 2020 5 20 c, k, n, r, t Yes
Review 7–13 January 2021 5 35 a, c, n, r, t Yes
Review 5–8 April 2021 5 20 a, c, n, r, t Yes

a = associate environmental officer, b = associate project analyst, c = associate social safeguards officer, d = country
director, e = economic analysis consultant, f = economist, g = director, h = environmental consultant, i = environmental
officer, j = environmental specialist, k = project analyst, l = principal counsel, m = procurement consultant/specialist, n =
project management specialist/project implementation officer, o = principal portfolio management specialist, p = resettlement
consultant, q = senior project assistant, r = senior project officer/mission leader, s = senior operation assistant, t = social
development specialist/safeguards officer, u = senior social safeguards officer, v = transport/project specialist/mission
leader, w = staff consultant.
SPAM = special project administrative mission.
a The project implementation officer joined on 18 December 2009.
b The environmental officer joined on 18–22 September 2017; the safeguards officer joined on 18–22 September and 10–14

October 2017.
Source: Asian Development Bank.
 I. PROJECT DESIGN AND IMPLEMENTATION

A. Rationale

1. The North Eastern Region (NER) of India is connected to the rest of the country only by
a narrow land corridor. It forms a distinct geographical unit and is ethnically, culturally, and
linguistically diverse from the rest of the country. The region represents 8% of India's total
geographic area. As of the 2011 census, the population was about 45 million. It is estimated to
have grown to 52 million by 2022, which is about 4% of India’s population. Of its population,
27% are scheduled tribes. Except for the state of Assam, the NER’s terrain is predominantly
hilly or mountainous, and the region experiences some of the highest rainfall levels in the world,
frequently causing landslides and floods. Road connectivity continues to be poor and prone to
disruption because of inclement weather and landslides.

2. Although the NER is served by road, rail, air, and water transport, road transport
dominates the movement of goods and passengers. The road network in the NER in 2011 was
145,000 kilometers (km), consisting of 35,000 km of surfaced roads—mostly national highways,
state highways, and district roads—and 110,000 km of unpaved roads. Except for the highest-
class roads (mostly national highways maintained by central government agencies), the road
network in the NER required substantial improvement through the expansion and rehabilitation
of individual road sections. The state-level public works departments (PWDs) also required
substantial capacity strengthening.

3. Recognizing that roads and bridges were inadequate to support road transport as the
NER’s dominant transport mode, the Government of India started a national investment
program to improve road connectivity to remote areas in the region. The Special Accelerated
Road Development Program in the North Eastern Region (SARDP-NE), approved by the
Ministry of Road Transport and Highways in September 2005, was designed to (i) improve
higher-class roads, including national highways and state roads, in the region; and (ii) provide
connectivity to state capitals and district headquarters in the NER by developing two-lane
national highways and improving state roads.1 The Ministry of Development of North Eastern
Region (MDONER) developed the North Eastern State Roads Investment Program (NESRIP) in
parallel, complementary to SARDP-NE.2 While the SARDP-NE focused on improving higher-
class roads, NESRIP was designed to improve intrastate connectivity, mainly to district
headquarters and other places of administrative and economic importance in individual states,
and to enhance the capacity of state PWDs to manage their road assets.

4. The Asian Development Bank (ADB) approved a $200 million multitranche financing
facility (MFF) in 2011 to (i) improve 430 km of priority road sections in six states of the NER,
namely Assam, Manipur, Meghalaya, Mizoram, Sikkim, and Tripura; and (ii) provide capacity-
building support to the executing and the implementing agencies in each of the six states.
1 Phase A of SARDP-NE was approved by the Government of India to improve 4,099 km of roads comprising 3,014
km of national highways and 1,085 km of state roads. Of the total, 3,213 km of roads was approved for
implementation and the balance of 886 km was approved “in principle.” A total of 3,333 km of roads was awarded
and 2,101 km was completed by March 2019. It is expected that phase A will be completed during 2023–2024.
2 Government of India, Ministry of Development of North Eastern Region (MDONER). 2011. North Eastern State
Roads Investment Program (NESRIP). New Delhi. This program was approved by the Cabinet Committee on
Economic Affairs (CCEA) on 19 May 2011 at an estimated cost of ₹1,3538.3 million. Subsequently, the project cost
was revised to ₹2,1445.6 million and the CCEA approved the same on 28 February 2019 for implementation in two
tranches. The project entails the construction and upgrading of 432.91 km of roads in India’s six northeastern
states: Assam, Manipur, Meghalaya, Mizoram, Sikkim, and Tripura.
2

5. The MFF modality was appropriate for financing this investment program, as it allowed a
phased implementation of individual subprojects in the six project states with different levels of
project management capacity and exposure to large-scale infrastructure development. The MFF
envisaged two tranches: (i) Tranche 1 (Project 1)—to improve 197.20 km of priority road
sections in Assam, Meghalaya, and Sikkim; and (ii) Tranche 2 (Project 2) to improve 235.71 km
of road sections in Assam, Manipur, Mizoram, and Tripura.3 2 CDTAs aptly supported the MFF
(paras. 23 and para. 24).

6. At appraisal, the MFF was consistent with ADB’s strategic objectives as set out in the
country partnership strategy (CPS) for India, 2009–2012 and in the Eleventh Five Year Plan
(para. 41).4 The MFF was also included in ADB’s country operations business plan for India,
2007–2009. Adequate consultations were held with all stakeholders while formulating the
project. During implementation, no changes were made to the rationale nor to the design and
monitoring framework (DMF) (Appendix 1).

7. At completion, the MFF remained aligned with ADB’s Strategy 2030, especially
operational priority (OP) 1.3.1 (infrastructure assets established or improved), and OP 3.2.5
(new and existing infrastructure assets were made climate- and disaster-resilient).5 The capacity
development and training interventions were aligned with OP 6.1 (entities with improved
management functions and financial stability); and with OP 6.1.1 (government officials with
increased capacity to design, implement, monitor, and evaluate relevant measures.) The
program remains relevant as it supports the Government of India’s goal of “faster, inclusive, and
sustainable growth,” and ADB’s Strategy 2030.6

B. Project Impact, Outcome, and Output

1. Investment program

8. The MFF’s impact was improved surface transport connectivity in the NER by
connecting the district headquarters with the two-lane national highways and improved state
roads. With the implementation of SARDP-NE (Phase A), the number of district headquarters
connected by two-lane national highways and improved state roads increased from 51 to 85 by
2021 (footnote 1).

9. The envisaged outcome of the program to improve mobility and accessibility in the
project areas was exceeded by 2021: (i) the actual growth rate of traffic on the project and
connector roads was 9.81%, which surpassed the appraisal assumed growth rate of 9%; (ii) the
vehicle operating cost (VOC) on the project roads was reduced by 52.5% for three-axle trucks
against the appraisal target of 50%, and for passenger buses, it was reduced by 42% at
completion against the target of 20%; and (iii) travel time on the project roads was reduced by
more than 50% against the appraisal target of 20%–40%.

3 ADB. 2013. Updated Facility Administration Manual. Manila (Table 1: List of roads to be improved under the
investment program).
4 ADB. 2009. Country Partnership Strategy: India, 2009–2012. Manila; Government of India, Planning Commission.
2008. Eleventh Five Year Plan, 2007–2012. New Delhi.
5 ADB. 2018. Strategy 2030: Achieving a Prosperous, Inclusive, Resilient, and Sustainable Asia and the
Pacific. Manila.
6 Government of India, Planning Commission. 2013. Twelfth Five Year Plan, 2012–2017: Economic Sectors. Vol. II.
New Delhi.
 3

10. Output 1: Reconstructed and rehabilitated state roads. This target was achieved. A
total of 432.57 km had been reconstructed by 2021 against the appraisal target of 432.91 km of
state roads (state highways and district roads). 7 The marginal difference of 340 meters at
completion against the appraisal target was because of actual site-specific requirements; the
originally intended origin and destination points were not altered. Rehabilitation works involved
widening the existing roadways, strengthening the road pavement, improving road geometry,
raising embankments, and providing permanent structures at river crossings. Works on state
road sections were completed by 13 January 2023 (para. 14).

11. Output 2: Improved business process and staff skills of the public works
departments. The four output targets were achieved by 2021 and the business process and
staff skills of the state PWDs have improved progressively since 2014 through (i) the
establishment of information technology (IT) based procedures within the PWDs for planning
and project management; (ii) staff training and adequate capacity building in all essential road
management functions; (iii) a road safety program with coordinated engineering, enforcement,
and education components; and (iv) sustained funding for the operation and maintenance
(O&M) of the roads—wherein funding is ensured through the state budget and maintenance is
carried out by each state PWD (Appendix 1).8

2. Project 2

12. The envisaged impact of Project 2 was improved mobility and accessibility in the project
areas. The actual growth rate of traffic on the project roads was 9.89% by 2021, which
exceeded the 9.0% expected growth rate at appraisal.9 The ratio of paved roads to total roads in
project states in the NER increased from 15% to 23% in Assam, 42% to 56% in Manipur, and
42% to 61% in Tripura. However, the growth rate in Mizoram was slightly reduced, from 70% in
2011 to 67% in 2019.10 All of Project 2’s expected outputs were achieved. No changes were
made to the DMF.

13. The expected outcome of Project 2 was to improve the efficiency of road transport in the
project areas in the states of Assam, Manipur, Mizoram, and Tripura. All three outcome targets
were exceeded by 2021: (i) the VOC on the project roads decreased by 53% for the three-axle
trucks, against the appraisal target of 50%; for passenger buses, it decreased by 41% at
completion, against the target of 20%; (ii) travel time on the project roads decreased by 60%
over 2013–2021, against the appraisal target of 20%–40%, from 17 km/hour (h) to 38 km/h in
Assam, from 18 km/h to 41 km/h in Manipur, from 8 km/h to 35 km/h in Mizoram, and from 20
km/h to 42 km/h in Tripura; and (iii) the average daily vehicle-kilometers in the first full year of
operation increased from 456,600 in 2013 to 637,733 in 2021.

14. Output 1. Reconstructed and rehabilitated state roads. At appraisal, it was

envisaged that Project 2 would reconstruct 235.71 km of state roads, comprising 62.56 km in

7
Based on the updated Facility Administration Manual (October 2013), under Project 1, a total of 197.20 km was
proposed to be improved and 196.78 km has been improved. The marginal difference of 420 meters is because of
the actual requirement at the site, and the difference did not alter the original intended objective. Under Project 2, a
total of 235.71 km was proposed to be improved and 235.79 km has been improved. The completed road lengths
are provided by the project implementation units (PIUs) of Assam, Manipur, Mizoram, and Tripura.
8 Data was collected from the PIUs of Assam, Manipur, Mizoram, and Tripura.
9 The traffic growth rate was calculated using the time series data (DPR in 2011–2021 and actual in 2021).
10 Although the ratio of surface to total road length marginally decreased in Mizoram state from 2011 to 2019, the

surfaced road length nevertheless increased from 8,099 km in 2011 to 10,866 km in 2019.
4

Assam, 97.85 km in Manipur, 55.00 km in Mizoram, and 20.30 km in Tripura. At project

completion, a total of 235.79 km of road was reconstructed, comprising 62.56 km in Assam,
97.93 km in Manipur, 55.00 km in Mizoram, and 20.30 km in Tripura. Rehabilitation works
involved widening existing roadways, strengthening road pavements, improving road geometry,
raising embankments, and providing permanent structures at river crossings. By 15 March
2020, 18% of the total length was completed, which was the original loan closing date, but 99%
of the length was completed by 30 June 2021, which was the extended loan closing date.11 All
expected outputs in Project 2 were achieved, and no changes were made to the DMF. The
outputs are presented in Appendix 1.12

C. Project Costs and Financing

15. At appraisal, the estimated total cost of the investment program was $266.7 million
($109.5 million for Tranche 1 and $157.2 million for Tranche 2). At completion, the actual cost
was $288.21 million ($104.29 million for Tranche 1 and $183.92 million for Tranche 2). At
appraisal, the ADB loan component was $200 million (75%) ($74.8 million for Tranche 1 and
$125.2 million for Tranche 2), and the remaining $66.7 million (25%) ($34.7 million for Tranche
1 and $32.0 million for Tranche 2) was to be financed by the central government and the
respective state governments. At completion, ADB financing was $199.68 million ($74.48 million
for Tranche 1 and $125.20 million for Tranche 2), and the government’s financing was $88.53
million ($29.81 million for Tranche 1 and $58.72 million for Tranche 2). For Tranche 1, the
$74.48 million included the utilization of surplus loan proceeds of $10.21 million to cover part of
a deficit under Tranche 2.13 A detailed comparison of the project financing at appraisal and
completion is presented in Appendix 3.

16. At appraisal, the total cost of Project 2, including base cost, contingencies, and financing
charges, was estimated at $157.2 million. At completion, the overall project cost was $183.92
million, or 17.0% higher than the original estimate. This was because of (i) the higher bid cost
received, and (ii) the unexpected contract variations in civil works quantities due to deficient
detailed project reports (DPRs). At appraisal, the estimated cost of the civil works was $130.19
million, inclusive of contingencies. At completion, the cost of civil works was $157.85 million
inclusive of contingencies.14 The government’s financing at completion—for land acquisition and
resettlement, utility shifting, financing charges, and other implementation costs—increased to
$58.72 million, which was 83.5% higher than the estimate of $32.0 million at appraisal. A
comparison of the project’s costs at appraisal and completion is presented in Appendix 2.

D. Disbursement

17. Loan proceeds were disbursed in accordance with ADB’s Loan Disbursement Handbook
(February 2012, as amended from time to time). Reimbursement procedures were used for civil
works and local currency payments for consulting services. After the first disbursement on 9
September 2015, succeeding disbursements gradually accelerated, peaking in 2019 (27.34%)
and in 2020 (17.56%). Actual yearly disbursements were almost as planned. Under the

11 The remaining balance of works (about 3.5 kms out of 20 km road section) in Tripura state were completed by 13
January 2023 by the state government’s newly appointed contractor, funded by MDONER’s own resources. ADB
project team had regular virtual meetings with PIU officials for expeditious completion of balance works. The
project team also participated in project review meetings conducted by MDONER.
12 The completed road lengths were obtained from the PIUs of Assam, Manipur, Mizoram, and Tripura.
13 The reallocation was approved through a memorandum dated 8 February 2020.
14 The actual total civil works cost of Project 2 at completion was $168.10 million. However, the $10.21 million surplus

of Project 1 was used to meet Project 2’s deficit.

 5

equipment category, with an allocation of $600,000, no procurement requests originated from

the implementing agencies, and no disbursements were made. At loan financial closure on 8
November 2021, $125.2 million was disbursed, which is 100% of the ADB loan of $125.2 million
(paras. 15–16). The disbursements are itemized in Appendix 4.

E. Project Schedule

18. At appraisal, it was envisaged that the MFF’s availability was up to 30 June 2017.
However, this was extended to 30 June 2021 on 25 November 2013. Project 2 was expected to
be completed in September 2019. The Project 2 loan was approved on 2 December 2013. The
loan and project agreements were signed on 17 February 2014, and Project 2 became effective
on 20 May 2014. The loan was closed on 30 June 2021 against the original loan closing date of
31 March 2020.15 All six subprojects under five civil works contracts of Project 2 were delayed.
However, one subproject of Assam was completed on time, while four subprojects were
completed within the extended loan closing date. The sixth subproject was completed by 13
January 2023. The loan was financially closed on 8 November 2021.

19. The MFF and Project 2 faced the following major implementation difficulties: (i) higher
revised cost estimates because of variations in the quantities of the road works to meet site-
specific requirements, which were significantly higher than the costs approved by the Cabinet
Committee of Economic Affairs (CCEA); 16 (ii) delays in land acquisition because of the lengthy
and time-consuming processes, along with the enactment of the new Land Acquisition Act 2013
effective January 2014;17 (iii) delays in utility shifting and in obtaining forest clearances for tree-
cutting alongside the existing road for widening purposes, other than forest locations, which
involved multiple state government departments and complex processes; (iv) contractual issues,
as delayed payments to contractors’ invoices adversely impacted work progress, apart from
financial burden on the states in the form of contractual claims; (v) additional works and
variation in quantities beyond the contractual provisions; (vi) slow performance of contractors
and consultants; (vii) climatic uncertainties, including prolonged rains leading to landslides and
reducing the working season to just 4–6 months in a year; and (viii) the coronavirus disease
(COVID-19) pandemic, which delayed project implementation in 2020 and 2021. The majority of
the PWDs also extended the periods of consultancy services to suitably match the modified
implementation schedules (para. 26). The CCEA approved the revised cost estimates and the
completion schedule of both tranches under the program until August 2022 (inclusive of the 1-
year defect liability period). The estimated and actual implementation schedules are compared
in Appendix 5, and a chronology of the main events is presented in Appendix 6.

F. Implementation Arrangements

20. Most of the implementation arrangements in Project 1 were continued in Project 2, as

envisaged at appraisal. MDONER, acting through its project management unit (PMU), was the
national executing agency. The states, acting through their respective PWDs, were the state-
level executing agencies. The PWD of each state established its own project implementation
unit (PIU), headed by a project director who was an officer with the rank of a chief engineer

15 Project 2 was extended once from its original closing date of 31 March 2020. The extension was anticipated at the
time of appraisal (para. 20 of Periodic Financing Request of December 2013).
16
The CCEA is headed by the Prime Minister and directs and coordinates all policies and activities in the economic
field, including foreign investment that requires policy decisions at the highest level.
17 The land acquisition process had to be carried out in accordance with the amendments in the new Land Acquisition

Act 2013, enacted in 2014. For this change, revised cost estimates for land acquisition were prepared by the
PWDs of each state, which required approval again from their respective state governments, causing further delay.
6

and/or by an additional chief engineer; and supported by technical, administrative, social focal,
and finance staff. The PMU at MDONER and PIUs were adequately staffed.

21. To support the PMU, a project management consultant (PMC) was recruited to provide
project management, coordination, monitoring, and other related services.18 Each PIU recruited
a consultant to supervise the civil works (para. 26). The construction supervision consultants
(CSCs) carried out all the tasks specified in their terms of reference, including managing
contracts, supervising construction, ensuring quality control, ensuring road safety, overseeing
compliance with safeguards requirements, assisting with financial accounting, and conducting
on-site training. Each PIU also engaged a nongovernment organization (NGO) to implement the
resettlement plans. The NGO contracts were not extended beyond their original contractual
period because of performance issues, and the PIUs subsequently implemented the remaining
actions required under the resettlement plans. To ensure compliance with statutory
requirements in implementing the social and environmental safeguards, each state PIU
nominated an officer with the rank of an executive engineer, who was supported by an assistant
engineer or junior engineers and by the social and environmental specialists of the CSC. The
organization chart for project implementation is presented in Appendix 7.

22. Overall, the MFF and Project 2’s implementation arrangements were adequate.
Implementation issues were resolved through regular review meetings among the Department
of Economic Affairs, MDONER, state governments, contractors, and consultants. The regular
review missions fielded by ADB supported the successful implementation of the program.

G. Technical Assistance

23. Recognizing the importance of strengthening the PWDs’ institutional development and
capacity building in the NER states, a capacity-building technical assistance (TA 7838-IND) of
$1.2 million was provided, financed by the Japan Fund for Prosperous and Resilient Asia and
the Pacific (formerly Japan Fund for Poverty Reduction [JFPR]). The TA was approved on 21
July 2011 and signed on 25 May 2012. A technical assistance cluster subproject (TA 8063-IND)
under the Advanced Project Preparedness for Poverty Reduction Subproject 24 (TA 0003-IND)
was approved on 23 March 2012 for $700,000 to cofinance TA 7838-IND. An international
consulting firm was engaged on 17 December 2012, following ADB’s Guidelines on the Use of
Consultants (2010, as amended from time to time). The consultancy service contract was
extended once, from the original date of 30 June 2014 to 31 December 2014.

24. The consultants began their work on 7 January 2013. They conducted various capacity
building and training through facilitation workshops and prepared various reports, including a
final report containing (i) actions required for streamlined business processes for the road
management by PWDs of the project states, (ii) the creation and operationalization of the Road
Asset Management System (RAMS) database, (iii) the development of a road safety program,
and (iv) options for financing arrangements for road O&M in the project states. Consultants also
developed (i) guidelines and procedures for improved road maintenance operations for each of
the six states, including the use of alternative methods and materials; and (ii) manuals for
inspections, testing, and measurement with detailed procedures, for preparing the reports on
quality and progress of the works by PWD engineers and supervision consultants on all road
and bridge constructions, and for repairs and maintenance activities.

18
The PMC was recruited under Project 1 and continued its services in Project 2.
 7

25. All the TA services were completed. The training programs, workshops, and documents
delivered by the consultants were highly valued by the PWDs. Overall, the TA was rated
successful. The TA completion report is in Appendix 8.

H. Procurement

26. ADB approved the advance procurement and retroactive financing under the project.
CSCs were selected through quality- and cost-based selection methods in accordance with
ADB’s Guidelines on the Use of Consultants (2012, as amended from time to time). The
selected CSCs were engaged in December 2012 by the state government of Assam, in
November 2013 by the state government of Tripura, in October 2013 by the state government of
Manipur, and in May 2014 by the state government of Mizoram. The CSC contracts for the
Manipur and Tripura components were effective until June 2021, and the CSC contract for the
Mizoram component was effective until October 2021. However, for the Assam component, the
state government extended the CSC services for their assistance with their own funds and was
effective until March 2022. As envisioned at appraisal during Project 1, MDONER recruited a
PMC in August 2012 to support the ministry in project management and performance
monitoring. The same consultant was engaged for Project 2 to conduct project management
and performance monitoring. The PMC contract was not extended and was closed in August
2017 because the consultant failed to deliver the intended objectives. The PMU staff completed
the required tasks, subsequent to the termination of the PMC.

27. The procurement of civil works followed ADB’s Procurement Guidelines (April 2013, as
amended from time to time). At appraisal, six subprojects comprising five civil works contracts—
one each in Assam, Mizoram, and Tripura states, and two in Manipur state—were procured
through international competitive bidding. All bids were invited as planned at appraisal during
the fourth quarter of 2011. However, Assam and Mizoram states had to undergo a rebidding of
the civil works because of the non-extension of the bidders’ bid validity, citing the change in
materials’ rates. ADB approved the rebidding on 8 October 2013. The civil works contracts were
awarded in February 2015 by Assam, in December 2013 by Manipur, in November 2014 by
Mizoram, and in February 2014 by Tripura against the appraisal target of the fourth quarter of
2013. In Tripura state, the civil works contract was terminated in April 2020 because of the poor
performance of the contractor. A new contractor was procured to complete the balance of the
works in March 2021. The funds allocated under the equipment category were not utilized
because the PWDs did not submit any procurement proposals, as none were required. The
surplus funds under this category were reallocated for completing civil works, as requested by
MDONER.

28. The amounts of the awarded civil works contracts were higher than the estimates at
appraisal. The original administrative approval by MDONER at appraisal required a revision
because of the (i) higher costs of the civil works contracts at the award stage, and (ii) variation
in road works quantities owing to site conditions. Thus, the CCEA approved the revised cost
estimates for the project in February 2019. 19 Along with the approval of the revised cost
estimates, the extension of the projects’ completion schedule until August 2022 (inclusive of the
1-year defect liability period) was also approved by the CCEA. After the CCEA approval of the
revised cost estimates and the issuance of a revised administrative approval by MDONER in
March 2019, the states assessed their subprojects’ revised completion costs and issued
variation orders for civil works and consultancy contracts during April–July 2019.

19
Including those financed by the North Eastern State Roads Investment Program—Project 2 (Loan 3073).
8

29. The civil works were generally completed with delay against the scheduled completion
date. The 43-kilometer Tamulpur–Paneri road section in Assam state was completed by 15
March 2020, which was within the original loan closing. The remaining section, including two
major bridges, was completed by 7 October 2020. The civil works of two contracts in Manipur
state were completed on 31 May 2021 and 29 June 2021, while in Mizoram state, the civil works
was completed on 30 April 2021. In Tripura state, the balance of the civil works was completed
progressively by January 2023 by the reappointed contractor, using MDONER and/or state
resources, as this was already beyond the loan closing date. Overall, the performance of the
contractors regarding ,standards, meeting specifications, and quality was considered adequate.
Details of the contract awards are presented in Appendix 9, and the summary of contracts is
shown in Appendix 10.

I. Poverty, Social, and Gender Equality

30. Gender. Project 2 was categorized as having some gender elements. The project
directly benefited the community, including women, through improved connectivity with the
reconstruction and rehabilitation of state roads. Focus group discussions held during
implementation indicated that most women and girls felt that the road improvements had
benefited them significantly, as better transport services provided them with improved access to
social services, district headquarters, markets, workplaces, higher education, better health
facilities, and better employment opportunities (para. 58). The project performance monitoring
system (PPMS) revealed a decline in travel time by 52% to health centers, by 67% to district
hospitals, and by 59% to major hospitals. The PPMS also reported a decline in poverty by 26%
and an increase in household incomes by 62%. During implementation, the contractors were
encouraged—through consultations and advisories by ADB, CSC, and PIUs—to employ women
in different skilled and unskilled works, thus resulting in female employment being generated.
Women and/or women’s groups were supported in taking up bioengineering works for road
rehabilitation and maintenance. These were ensured by the CSC and PIUs by verifying the
contractor’s records of those employed. Training programs were conducted to improve the PWD
staff's skills, including for women staff.

31. HIV/AIDS. Assam (0.09%) and Tripura states (0.12%) have a low HIV/AIDS prevalence
rate, whereas Manipur (1.05%) and Mizoram states (2.70%) have a higher prevalence
compared with the national adult prevalence rate of 0.21%. According to India’s National AIDS
Control Organization, HIV infection is typically concentrated among the poor and marginalized
groups (including high-risk groups, such as sex workers, drug users, migrant laborers, and truck
drivers). During implementation, the contractors, with the help of NGOs and the CSC’s social
expert, promoted HIV/AIDS awareness among their laborers and disseminated information at
worksites and other specified locations along the project roads on the risks of sexually
transmitted diseases. The CSCs monitored this work. Given the awareness-raising campaign
and based on the data from the States AIDS Control Society, the risk that the project will
increase HIV/AIDS incidence is considered insignificant.

J. Safeguards

32. Involuntary resettlement and Indigenous peoples. Project 2 was classified as

Category A for involuntary resettlement and Category B for Indigenous peoples in conformance
with ADB's Safeguard Policy Statement (2009). The project prepared a resettlement framework
and six combined resettlement and Indigenous peoples’ plans (RIPP)—two each for Assam and
Manipur and one each for Mizoram and Tripura. An attempt was made to reduce land
acquisition and involuntary resettlement by adopting the most feasible technical designs. As far
 9

as possible, the roads were widened within the existing right-of-way (ROW). For a few stretches
of the project roads, land was acquired to improve road geometry and to optimize efficiency and
safety while minimizing the social risks. Regarding the impact on private land, the project
avoided acquisition in Assam and Tripura and acquired 12.84 hectares (ha) in Mizoram,20 while
the village chiefs consented to strengthen the existing road in Manipur. 21 In total, 756
households were affected by the project—158 households in Assam, 321 in Manipur, 263 in
Mizoram, and 14 in Tripura. Of those affected, 133 were titled households, and 623 were non-
titled households. The project also affected 34 community property resources (CPR). Overall,
the project minimized the impacts at completion compared with the estimated number at
appraisal. The project-affected households were compensated for the loss of assets and were
given resettlement allowances in accordance with the approved RIPPs. The project paid
₹138.51 million as compensation and another ₹11.37 million as allowances to the affected
households. For the CPRs, the project paid ₹10.46 million. The project's social safeguards
categorization was maintained until its completion.

33. For safeguards implementation arrangements, the PWDs of each state established their
respective PIUs, acting as implementing agencies. Each PIU was headed by a project director,
who was supported by a designated staff of the PIU in managing safeguards implementation.
Each PIU recruited a supervision consultant with social safeguard expertise to support the PIUs
during implementation. Manipur and Mizoram PIUs engaged NGOs to support the RIPP
implementation, whereas Assam and Tripura PIUs implemented RIPPs with the CSC expert's
support. The land acquisition, resettlement and rehabilitation were carried out efficaciously with
the aid of awareness-raising and one-on-one meetings with the affected persons, which were
conducted by NGOs and executing agency representatives whenever required. The PMC expert
functioned as an external monitor for the project. Each PIU established a grievance redress
mechanism under the project and made it functional. Minor grievances were received
concerning the compensation amount, which was explained and was amicably resolved. No
grievances were pending at the time of project completion report (PCR) preparation.

34. At appraisal, social impact assessments indicated that the socioeconomic impacts and
benefits from the subprojects for Indigenous peoples would not differ from those for the rest of
the population. The level of literacy and awareness among the Indigenous households and their
participation in project preparation was high; hence, combined RIPPs were prepared. Project 2
had affected 364 Indigenous households, which is 49% of the total affected. Regarding impacts
on Indigenous peoples, out of the total affected in the project states, a maximum of 99% were in
Mizoram,22 followed by Manipur (25.72%) and Assam (20.88%). No Indigenous peoples were
affected in Tripura. The Indigenous peoples were considered vulnerable for the project. In
addition to the compensation at replacement cost for the affected assets, the project provided
additional assistance such as one-time lump sum financial assistance, preference in project
construction activity, and skills training following the RIPPs. The project disclosed information,

20
The state government of Mizoram has various land settlement arrangements for the following: (i) land settlement
certificate holder, (ii) periodic Patta holder, and (iii) village pass or permit holder. Settlement certificate holders are
titleholders who have heritable and transferable rights over the land; the periodic Patta authorizes a person to use
a parcel of land for a definite period under the Mizoram District (Agricultural Land) Act, 1963; and the pass or
permit holder authorizes a person to use a piece of land but does not give them the right of an owner.
21 In Manipur, land is owned by the village chiefs in the hills and no revenue record nor maps are available. There are

legalities with respect to land administration in the hills: (i) the Manipur Land Revenue & Land Reform Act 1960
extends to the whole of Manipur except the hill areas; and (ii) according to the Memorandum of Public Works
Department, Government of Manipur, 1994, the department will not acquire any land to construct roads. The land
for road construction will be donated by the concerned villages. However, compensation for the assets on the land
is to be paid.
22
Mizoram is a Sixth Schedule state under the Constitution of India.
10

and consultations were held with the Indigenous peoples communities throughout the project
cycle. The grievances of Indigenous peoples were found to be no different from those of others.

35. After initial delays, all four states regularly submitted their semiannual social monitoring
reports (SMRs), which were disclosed on ADB's website. At completion, 42 SMRs documenting
the implementation of social safeguards were submitted by the respective PIUs. At completion,
Project 2 remained in Category A for involuntary resettlement, and B for Indigenous peoples.
The PMC worked as an external monitor. Details of social safeguards are presented in
Appendix 11. Project 2 was found to be in compliance with the requirements of ADB’s
Safeguard Policy Statement (2009) for involuntary resettlement and Indigenous peoples.
Overall, the involuntary resettlement and Indigenous peoples' safeguards compliances for
Project 2 were assessed to be satisfactory.

36. Environmental safeguards. Project 2 was classified as Category B for environment in

accordance with ADB’s Safeguard Policy Statement and remained Category B until its
completion. During the processing of the MFF, an environmental assessment and review
framework was prepared, which was disclosed on ADB’s website in 2010 to guide the review
and assessment of the environmental aspects of project activities. It required the preparation of
the initial environmental examination (IEE) reports during the processing of subsequent
tranches under the MFF. At appraisal of Project 2, four IEE reports for each state covering all
six subprojects under Project 2 were prepared and disclosed on ADB’s website in February
2013. A standard operating procedure on health and safety planning in response to the COVID-
19 pandemic was prepared as an IEE report addendum, which was cleared and disclosed on
ADB’s website in June 2020.

37. The requisite environmental clearances for the road sections in Assam and Manipur
were obtained from the Ministry of Environment, Forest and Climate Change. Other road
sections did not require such clearances. Forest clearances and tree-cutting permissions were
also obtained by the PWDs in all four states under the project. A total of 10.55 ha of forest land
and 8,285 trees were affected. The contractors obtained the statutory permissions under
environmental safeguards and maintained them until the end of the contract by renewing them
regularly. The civil works contracts included environmental management plans to guide the
contractors in complying with environmental safeguard requirements. Testing of the parameters
for ambient air, water quality, and ambient noise levels by the civil works contractors were
initially infrequent; however, it became more frequent with regular follow-ups by the PWD and
CSC. With the help of CSC, the PIUs also closely monitored the ambient air quality,
groundwater quality, noise level, and soil quality results delivered by the contractor. Levels were
reported to be within the permissible limits during project implementation. Compliance with
labor, health and safety, and other statutory regulations was ensured by adhering to the
requirements of environmental management plans and of the national and state governments.
No occupational or community fatalities were reported during the construction stage under the
project. A total of 39 semiannual environmental monitoring reports (EMRs), which documented
the implementation of environmental safeguards from commencement to closure, were
submitted by the respective PWDs, cleared by ADB, and disclosed on ADB’s website. Public
and stakeholder consultations were conducted (details were documented in the EMRs) on a
continuous basis during the implementation under the project. The respective PWDs and PIUs
established grievance redressal committees that remained functional until project closure. The
loan covenants on environmental safeguards were complied with, and the overall environmental
performance of the project was generally satisfactory. Further details on the implementation of
the environmental safeguards are presented in Appendix 11.
 11

K. Monitoring and Reporting

38. An investment program performance monitoring system (IPPMS) and PPMS were
established by the PMC at MDONER. The IPPMS and PPMS were effectively used to track the
overall MFF and Project 2’s implementation activities, corresponding target dates, expected
outcomes, and assigned responsibilities using a monitoring mechanism. The PMC, through
IPPMS and PPMS, detected some gaps between the plan and the execution of the project and
reported these for the MDONER to take corrective actions. With the help of the CSC, the states
also established baseline performance indicators within 3 months of the loan effective date to
monitor each subproject’s implementation and, thereafter, conducted annual evaluation surveys
under each investment subproject. The evaluation surveys, which were based on review
meetings and included in the annual review of project progress by top management of
MDONER and participating states, identified the major gaps and/or slippages, including the
reasons thereof. Based on these surveys, suitable actions were taken to address the issues.

39. For Project 2, 124 of the 138 covenants in the loan documents were complied with, and
the remaining 14 were partially complied with. During implementation, MDONER and the state
governments provided adequate oversight, coordination, and financial support. The PIUs were
fully operational with adequate staff and resources. The PIUs, in close coordination with the
CSCs, supervised all aspects of the project, including the implementation status of the legal
requirements of the national and state governments. Regular site visits by PIU staff members
and frequent review meetings with the CSC and contractors ensured compliance with these
requirements. Environmental and social safeguard requirements were incorporated in the
contracts and were implemented accordingly. Safeguards monitoring reports were submitted on
time, except for a few that were delayed. The last reports were submitted in 2023 upon
completion of the civil works post-financial closure. Except for covenants related to the
submission of an audited project financial statement (APFS) and a delay in providing fund
facilities, the borrower and the executing agency complied with all loan covenants and project
agreements. The status of compliance with the loan covenants is summarized in Appendix 12.

40. ADB received 30 APFSs from the participating states during fiscal year (FY) 2022. ADB
received and accepted from Assam state APFSs covering FY2016–FY2022, from Manipur state
for FY2016–FY2022, from Mizoram state for FY2015–FY2022, and from Tripura state for
FY2015–FY2022. The APFSs submitted for FY2022 by the states were not fully reconciled with
ADB’s disbursement data, so the reports were unacceptable as a final APFS. The state
governments of Assam, Tripura, Mizoram, and Manipur agreed on a time-bound action plan to
submit the final and fully reconciled APFSs progressively by March 2024. The auditor issued an
unqualified audit opinion for all APFSs, except for Assam state’s FY2019 and FY2021, Manipur
state’s FY2021 and FY2022, and Tripura state’s FY2019. All four states addressed the
observations from ADB’s review of the APFSs. With the exception of APFSs for FY2020 of
Manipur, Mizoram, and Tripura and FY2016 of Manipur, all other APFSs were delayed. The
longest delay was 30 months for Tripura state for FY2015, 17 months for Assam state for
FY2016, 8 months for Mizoram state for FY2015, and 4.7 months for Manipur state for FY2022.

II. EVALUATION OF PERFORMANCE

A. Relevance

41. The MFF and Project 2 are both rated relevant at appraisal and at completion. The MFF
and Project 2 are aligned with ADB’s CPS for India, 2009–2012, which framed infrastructure
development as a continuing strategic focus of ADB’s assistance for India. The MFF and Project
12

2 also support ADB Strategy 2030’s OP (para. 7). No conflicts nor overlaps with the initiatives of
other development partners were reported. Both responded to India’s Eleventh Five Year Plan
(2007–2012), which states that "while development efforts over the years have made some
impact (as reflected in some of the Human Development Indicators, which are comparable with
the rest of the country), the region is deficit in physical infrastructure, which has a multiplier
effect on economic development.” At completion, the MFF and Project 2 remained aligned with
ADB’s priority agenda as set out in the CPS, 2018–2022, which stresses the importance of
supporting the Government of India’s goals.

42. The MFF modality was considered appropriate for financing this project, as it allowed a
phased implementation of the individual projects by six project states with different levels of
project management capacity and exposure to large-scale infrastructure development (para. 5).
The NER is the least developed region in India, and many factors have hampered its economic
development. Recognizing the need for accelerated development, the Government of India has
focused on developing the NER in its 5-year plans—mainly through central funding of regional
development activities. In 2001, the national government created a dedicated ministry, the
MDONER, to coordinate and give impetus to the various central development efforts. MDONER
has been responsible for planning, executing, and monitoring development schemes and
projects in the NER. Its vision is to accelerate the pace of socioeconomic development of NER
so that it can enjoy growth parity with the rest of the country.

43. With renewed recognition that poor roads and bridges are a significant constraint to
developing the region's dominant road transport subsector, the central government launched a
national investment program to improve road connectivity in remote areas. The investment
program complemented, and was developed in parallel with the SARDP-NE. The objectives of
the SARDP-NE were to (i) improve higher-class roads, including national highways and state
roads in the region; and (ii) provide connectivity to state capitals and district headquarters in the
NER by developing two-lane national highways. While the SARDP-NE focused on improving
higher-class roads, the investment program focused on (i) improving intrastate connectivity,
mainly to district headquarters and to other places of administrative and economic importance in
the individual states; and (ii) enhancing the capacity of state PWDs to manage their road assets.
As owners of the projects, the state governments and the stakeholders assumed the
responsibility to resolve any implementation issues. The investment program and Project 2 were
implemented as planned, with no change in their overall scope.

44. The links between the DMF’s impact, outcome, and outputs were logical and clear for
the MFF and Project 2. The indicators were appropriate and measurable (paras. 8–14). The
project’s outputs were sufficient to deliver the expected outcome. The northeastern states are
underdeveloped, but the program states under the MFF and Project 2 were well-prepared
during appraisal, and PWDs were actively involved in preparing the DPRs and safeguards
reports. Implementation arrangements were adequate, as issues were resolved through
effective coordination, contributing to the project’s smooth implementation (paras. 20–22). As
envisaged at appraisal, women benefited substantially from the project (para. 30).

B. Effectiveness

45. The MFF and Project 2 are rated effective as the intended outcome and outputs were
achieved. For Project 2, two outcome targets were exceeded, and one was achieved. The VOC
and travel time on completed roads declined by more than the anticipated rate at appraisal
(paras. 9 and 13 and Appendix 1). The MFF outcomes were also achieved. In all six states, the
traffic growth rate surpassed the appraisal target, and the VOCs and travel times on project
 13

roads declined. The average traffic growth of all projects in the investment program is 9.81%,
and the VOC and travel time on all project roads decreased as anticipated at appraisal
(Appendix 1).

46. All intended outcomes and outputs of the MFF and Project 2 were either achieved or
exceeded and supported the improvements in the states’ road network. The target outcomes of
Project 1, Project 2, and MFF were exceeded. The target outputs of Project 2 were achieved
through the reconstruction and rehabilitation of 235.79 km of roads in the four states. The
investment program also constructed 432.57 km of roads—including 196.78 km under Project
1—in all six states, achieving the two-lane or intermediate lane standard with earthen shoulders.
The road construction includes (i) elevating and widening flood-prone road sections, protection
works, culverts, and bridges above the predicted flood levels, considering climate change
impacts; and (ii) improving and/or realigning hazardous road sections and bridges for traffic
safety. By improving the roads, vehicle travel time was reduced, which in turn reduced carbon
emissions and contributed to climate resilience. In addition to including road safety provisions in
the detailed engineering design, road safety awareness-raising campaigns were also carried out
systematically in the communities, particularly those along the roads. Environmental and social
safeguard features included in project road construction led to contractors creating an additional
position to implement the safeguards.

47. In all six program states, business processes and staff skills of the PWDs have improved
under a technical assistance project. Under the TA, (i) information technology-based procedures
were developed for planning and project management purposes within the PWDs; (ii) adequate
staff training and capacity building for all essential road management functions was provided;
(iii) a road safety program with coordinated engineering, enforcement, and education
components was put in place; and (iv) sustained funding for O&M of roads was provided (para.
54).

48. Better roads have improved access to all services. The MFF and Project 2 provided
direct employment to women during implementation. Social and environmental safeguards were
generally satisfactorily implemented in all four states as the requirements of ADB’s Safeguard
Policy Statement 2009 were complied with (paras. 32–37). There were no negative impacts on
the land acquisition, resettlement, and rehabilitation nor on Indigenous peoples. Temporary
environmental impacts that occurred during the construction stage were mitigated through
effective environmental management plan (EMP) implementation, supervision, and monitoring.
The PIUs closely monitored the ambient air quality, groundwater quality, noise levels, and soil
quality with the help of the CSC, and levels were reported to be within the permissible limits
during project implementation.

C. Efficiency

49. The MFF and Project 2 are rated efficient. The MFF and Project 2 efficiently utilized the
resources available and advice from top-level government officers and ADB to complete the
project under critical circumstances. The economic internal rate of return (EIRR) of Project 2
was reevaluated using a methodology similar to that adopted at appraisal. The economic
benefits of Project 2 were calculated by comparing the “with-project” and “without-project”
scenarios. In the analysis, the primary economic benefits considered were the VOC savings and
savings in passenger travel time costs. The EIRR computation included the impact of delays
(paras.18–19). Project 2 is economically viable at completion, with a recalculated EIRR of
15.3%, which exceeds ADB’s threshold value of 12.0%. The EIRR of project roads at
completion varies from 14.5% to 19.0% against 15.3% to 22.9% at appraisal.
14

50. The EIRR of Project 2 was subjected to a sensitivity analysis to test the different
maintenance cost and benefit scenarios. Results indicated that even under the most adverse
scenario of a 20% maintenance cost increase, combined with a simultaneous 20% reduction in
benefits, the EIRR is still 12.9%. This indicates that Project 2 is economically robust for all
possible scenarios except for the case of reduced benefits (traffic growth) by 50%, which is only
8.5%. The sensitivity analysis also showed that the EIRR was most sensitive to changes in
economic benefits. Details of the economic reevaluation are presented in Appendix 13.

51. The EIRR of the MFF in all participating states was not calculated at appraisal. However,
the economic analyses for Project 1 and Project 2 were reevaluated, and based on these, the
MFF’s EIRR at completion was derived. There were delays in completing Projects 1 and 2, but
the outcomes and the outputs were achieved. Construction of one of the Project 2 roads was
delayed and could be completed beyond the loan closing date, but the outcomes and outputs
were achieved using state funds after the project’s closure. For Project 1, the EIRR at
completion was calculated at 16.9%, and Project 2 was at 15.3%. The combined EIRR for the
investment program states at completion is calculated at 15.8%, which is above the discount
rate of 12%. Implementation delays were also considered in the computation of the EIRR at
completion. Overall, the MFF is rated efficient.

52. In terms of process efficiency, Project 2 was completed without altering its original
intended objectives, despite challenges and implementation difficulties. MDONER resolved all
implementation issues through high-level meetings with the state governments and regular
review meetings with the PIUs, contractors, and the CSC. Corrective measures were taken
within the contractual framework. Although implementation was delayed, Project 2 delivered all
the required outputs and exceeded the expected outcome.

D. Sustainability

53. The MFF and Project 2 are both rated likely sustainable, considering the institutional and
financial arrangements that are in place for road maintenance.

54. Institutional capacity. According to the financing agreements, each state was
mandated to ensure adequate and timely funding through approved annual budget provision for
the O&M of the project roads for at least 5 years post-construction. An amount to be borne by
the states was provisioned for road maintenance under the administrative and financial sanction
of the project. The amount provisioned is now used for maintenance purposes, based on actual
requirements on the ground. As of December 2022, $600,000 had been spent on road
maintenance by the states, against the estimate of $3.3 million at appraisal, which was
envisioned for 5 years after the completion of civil works and based on the ground
requirements. The roads are in good condition. The overall maintenance of all PWD roads is
also challenging for the states. Recently, some state roads have been upgraded to national
highways. The Government of India is implementing road development projects (on the
upgraded national highways) in the NER using the engineering, procurement, and construction
(EPC) and the build–operate–transfer (BOT) modalities, wherein the maintenance obligations
are built into the civil works contracts. These projects have partially reduced the maintenance
burden on PWDs. The savings allowed the states to maintain other roads. The participating
states are also considering a policy to maintain overall road networks through performance-
based maintenance contracting (PBMC) to improve their quality-maintenance practices and the
 15

overall condition of their road assets. 23 Upon the completion of the built-in provision of a 5-year
PBMC in civil works contracts, the project roads will be included in the PBMC policy by the state
PWDs.

55. Financing and maintenance. Project 2 will not generate revenue. The budget
provisions considered at the appraisal stage to maintain the project roads post-construction are
used for the upkeep of these roads. Although it was observed that the road maintenance
expenditure in Assam has been decreasing, the state has significantly increased its capital
expenditure for the reconstruction of roads—from ₹19,433 million in FY2017 to ₹72,252 million
in FY2021. Assam has rapidly increased its capital investment in road improvement and
reconstruction since 2017. The aim is to rehabilitate distressed road assets so they can be used
longer rather than spending huge amounts on maintenance. The PWD of Assam has developed
a road asset management system for decision-making and planning. The state government also
included the provision of a 5-year PBMC in civil works contracts that were awarded under the
new ADB-financed transport sector project in Assam.24

56. Road projects in Manipur, Mizoram, and Tripura were also implemented using the EPC
mode of contracts, embedding PBMC for road maintenance. Road maintenance expenditure
increased by 27% in Manipur during FY2017–FY2022, 86% in Mizoram during FY2017–
FY2023, and 12% in Tripura during FY2017–FY2023. The state governments appear committed
to more sustainable road maintenance (Appendix 13), as evidenced by their practice of adopting
private sector participation through the hybrid annuity, build–operate–transfer, and EPC contract
models and utilizing PBMC even for contracts awarded using the bill of quantities and
measurement contract mode. The PWDs assess the required yearly maintenance budget and
expenditure on a need basis by considering on-the-ground requirements, which cover routine,
recurrent, specific, periodic, and emergency situations.25

57. Both the MFF and Project 2 are assessed as environmentally and socially sustainable.
Innovative and cost-effective technologies and locally available materials were used to protect
the environment. Using local materials and other innovative technologies substantially reduced
the projects’ carbon footprint. Using a standard DPR template ensured that the adopted designs
complied with the technical, environmental, social, and road safety norms.26

E. Development Impact

58. The development impact of both the MFF and Project 2 is rated satisfactory.
Interconnectivity among the improved state roads has increased (paras. 8,10,12, and 14). The
project roads complement the development activities being undertaken under the SARDP-NE
(footnote 1). The projects have helped establish long-term and far-reaching improvements in the
state road network by enabling shorter transit times, lower VOCs, and smoother road surfaces.
Improved transport services enabled local people to reach larger markets where they can sell
products at higher prices. Bus services also increased on project roads because of better riding

23 Based on verbal information shared by the executing agencies.

24
ADB. 2022. Report and Recommendation of the President to the Board of Directors: Proposed Loan to India for
Assam South Asia Subregional Economic Cooperation Corridor Connectivity Improvement Project. Manila.
25 The comprehensive process for estimating maintenance budget requirements comprises (i) obtaining estimates

from the subdivision level, (ii) aggregating the estimates at the district and division levels, and (iii) consolidating
them at the state level. This process is adopted across the majority of states in India. The budget is approved
based on the requisition made. Apart from the yearly budget allocation, supplementary budget allocation may also
be considered by the state government on a need basis and when required.
26 Improved, all-weather connectivity has minimized flooding and inundation of habitations, resulting in a better quality

of life and enhanced access to economic and development benefits.

16

quality and less vehicular wear and tear. People living near the project roads, including women
and girls, gained access to improved and affordable public transport, and safer access to public
services such as health and educational facilities. Girls can reach schools quicker and more
safely via public transport or bicycle. Travel times to reach the nearest health center have
decreased considerably on project roads (para. 30). Medical and emergency facilities within the
project roads’ influence area are more easily accessible because of improved connectivity.

59. Project 2 reduced the average VOC per km for cars, buses, and trucks. Improved roads
led to greater investment in roadside businesses, resulting in increased land prices by 27% to
80% within the areas of project roads. Surveys carried out after project completion showed that
rural households’ incomes rose by an average of 62% because of increased economic activity
along the project roads. Hotels, cafes, shops, garages, and workshops along the project roads
have increased commercial activities by more than 100%, creating employment opportunities.
State governments reported that the project provided some 7.8 million person-days of
employment during implementation. The projects’ positive impact on the state economy is
significant given its direct and indirect benefits. The MFF and Project 2 also contributed to OP 1,
OP 3, and OP 6 of ADB’s Strategy 2030 (paras. 7, 41). Appendix 14 presents the projects’
socioeconomic impacts, and Appendix 15 presents the projects’ contribution to Strategy 2030’s
operational priorities.

60. Improved road safety measures have reduced accidents and traffic congestion on
project roads, especially during the rainy season (Appendix 14). However, the improved road
conditions have also encouraged some vehicles to exceed the speed limit, leading to accidents
in mixed traffic conditions. To control this, the PWDs, with the help of local police, are
conducting road safety awareness-raising programs, providing additional road safety signs
(particularly speed limit signs), adding speed-calming measures (such as raised pedestrian
crossings and rumble strips), and stepping up enforcement of traffic laws.

F. Performance of the Borrower and the Executing Agency

61. The overall performance of the borrower, the executing agency, and implementing
agencies is rated satisfactory. The borrower facilitated timely loan signing. The borrower,
MDONER, and state PWDs actively participated during Project 2 preparation and
implementation through tripartite portfolio review meetings. The implementing agencies (the
PWDs) provided counterpart funds and implemented all aspects of the project, including project
design and preparation, procurement, land acquisition, other preconstruction activities, and
contract management. Compliance with the loan covenants was adequate, except for the
delayed submission of the APFS, reconciliation issues in the final APFS, and the fund flow
facilities that led to intermittent delays in the release of contractor payments. In their report
preparation, all four states are reconciling the final APFSs for FY2022 with those of ADB’s
disbursement records and are adhering to the suggested follow-up actions from the India
Resident Mission’s APFS review. The reconciled APFSs are expected to be submitted by March
2024 for ADB’s review. The PIUs, through the state governments, have also taken possible
measures to overcome the challenges and difficulties encountered during implementation
(paras. 20–22).

G. Performance of the Asian Development Bank

62. ADB’s overall performance is rated satisfactory. ADB’s review and regular
communication with all project stakeholders significantly contributed to the project’s effective
implementation. ADB missions provided guidance to the PIUs, including action plans for the
 17

expeditious completion of contracts and institutional capacity development support. These

ensured compliance with ADB requirements and with the statutory regulations of the national
and state governments, thus contributing to the timely accrual of project benefits to the target
beneficiaries. ADB also supported the PIUs by providing regular training in safeguards,
procurement, contract management, disbursement, and financial management. The
Government of India and the state governments recognized ADB’s role in providing this support
and in resolving the issues encountered during implementation.

H. Overall Assessment
63. Overall, the MFF and Project 2 are rated successful. They were rated relevant at
appraisal and remain so at completion, given that they continue to align with the development
objectives and strategies of the central government and of ADB. The MFF and Project 2 are
rated effective in achieving their outputs and outcome, given their support for upgraded road
standards and enhanced road safety. The MFF and Project 2 are rated efficient in achieving
their outcomes and outputs. The EIRR of Project 2 was recalculated at 15.3%, which is above
ADB’s threshold value of 12.0%. The MFF and Project 2 are rated likely sustainable, given that
the institutional capacity of state government agencies in the construction of major road works
has improved. The technical and financial management capacities for road sector management
were enhanced, and their capacity to provide adequate financial support for road maintenance
was improved. The MFF and Project 2 also significantly contributed to accelerating the states’
economic growth by establishing a more efficient transport system.

Overall Ratings
Rating
Criteria Project 1 Project 2 MFF
Relevance Relevant Relevant Relevant
Effectiveness Effective Effective Effective
Efficiency Efficient Efficient Efficient
Sustainability Likely sustainable Likely sustainable Likely sustainable
Overall Assessment Successful Successful Successful
Development impact Satisfactory Satisfactory Satisfactory
Borrower and executing agency Satisfactory Satisfactory Satisfactory
Performance of ADB Satisfactory Satisfactory Satisfactory
ADB = Asian Development Bank.
Source: Asian Development Bank.

III. ISSUES, LESSONS, AND RECOMMENDATIONS

A. Issues and Lessons

64. Timelines for the completion of civil construction works. The climatic constraints,
limited working seasons in NER, difficult terrain, and availability of experienced local labor and
construction materials were not factored in when setting the construction period. Accordingly,
the PWDs needed to extend the contracts’ duration to complete the civil works contracts.

65. Deficiency in the detailed project reports. There was a huge difference between
actual quantity requirement based on site-specific conditions and those indicated in the DPRs.
This occurred because of the deficiency in preparation of the DPRs. Because of the insufficient
provision of quantities in the bill of quantities, contractors had to put a huge claim in the form of
revision of rates and the actual quantity. Given this, careful attention should be taken while
preparing the DPR and estimating the quantities. Proof-checking of the bid documents is
18

essential before inviting the bids. The design consultants with sufficient experience in preparing
the DPR of hill roads should be carefully selected to avoid or minimize errors.

66. Accurate and well-researched estimate. There were significant time gaps of 4–5 years
between the finalization of the DPRs, including cost estimates and the completion of the bidding
process. This has led to higher contract costs in comparison to the engineering estimates. As
such, wide time gaps should be avoided between the finalization of the estimate, initiation of the
bidding process, and awarding of contracts to avoid incurring time and cost overruns.

B. Recommendations

67. Slow fund flow mechanism. In most states, local currency payments of the contractors’
invoices, particularly those under central-sponsored schemes, were delayed because of state
governments’ inadequate budgets and failure to allocate funds to the PIUs in a timely manner.
Consequently, the states carried the financial burden arising from the contractors’ claims,
causing implementation delays resulting in additional unwanted implications. Thus, it is
recommended that PWDs consider the direct payment method in place of the reimbursement
procedure, with the approval of the Department of Economic Affairs in accordance with the ADB
Loan Disbursement Handbook (2022, as amended from time to time), to pay contractors,
suppliers, and consultants on a selective basis with all necessary precautions.

68. Sustainable road maintenance. As a long-term measure, it is suggested that the state
PWDs use EPC and hybrid annuity modes of contracts from the conventional bill of quantities
(BOQ) modality. The use of a systematic and innovative approach by the PWDs should reduce
maintenance costs, in addition to significantly improving the delivery and quality of future
projects and ultimately supporting the sustainability of state road infrastructure.

69. Capacity development of executing agencies. Although adequate due diligence was
exercised by the executing and implementing agencies during project design and preparation,
the northeastern states are unfamiliar with the latest construction technology. They are
inexperienced in dealing with contractual matters. Extensive training programs by specific field
experts are recommended for the PWD staff in new projects.

70. Green highways. The government should consider the realities of climate change and
the scarcity of natural construction materials like aggregates in planning, designing, and
constructing green roads and highways that are ecologically sustainable.

71. Hill road maintenance. The hill roads, particularly in northeastern states, are
susceptible to landslides. Hence, during maintenance periods, sufficient provisions for slope
protection work should be included for future road projects.

72. Further action or follow-up. A larger portion of the NER road network has now been
rehabilitated with the assistance of ADB, the World Bank, and the Government of India. The
states are aware of the need to gradually shift from the traditional road-by-road maintenance
system to a more systematic area-wide road asset maintenance system (RAMS) to cover the
developed road network in a more efficient manner. Recognizing this challenge, ADB may
provide a TA to further strengthen the asset management capacity of the NER states.

73. Timing of the project performance evaluation report. ADB’s Independent Evaluation
Department can prepare the project performance evaluation report after March 2024 once the
respective state PWDs have submitted the reconciled final APFS.
 Appendix 1 19

DESIGN AND MONITORING FRAMEWORKS

Table A1.1 Design and Monitoring Framework: Multitranche Financing Facility

Impact: Improved surface transport connectivity in the North Eastern Region.
Target: Number of district headquarters connected by two-lane national highways and improved state
roads increased from 51 to 85 by 2016.
Achievement: The district headquarters connected by two-lane national highways and improved state
roads increased from 51 to 85 by 2021 and the target was achieved. a
Results Chain Performance Indicators Project Achievements
Outcome By 2018: By 2021:
Improved mobility and
accessibility in the Actual growth rates of traffic on the a. Exceeded. The actual growth rate of
project areas. project and connector roads traffic on the project and connector
surpass the assumed growth rates roads was 9.81% by 2021, which
(the average annual growth rate is surpassed the assumed growth rate of
to be at least 9%). 9%.

Vehicle operating cost on the b. Exceeded. The vehicle operating cost

project roads reduced by 50% for on the project roads was reduced by
three-axle trucks, and by 20% for 52.5% for three-axle trucks, and by 42%
passenger buses at completion. for passenger buses at completion.

Travel time on the project roads c. Exceeded. The travel time on the
reduce by 20%–40%. project roads was reduced by more than
50%.
Outputs By 2017: By 2021:

1. Reconstructed 1a. Approximately 433.70 km of 1a. Achieved. A total of 432.57 km of

and rehabilitated state state roads (state highways and state roads (state highways and district
roads. district roads) reconstructed or roads) were reconstructed or
rehabilitated. b rehabilitated. b

2. Improved 2a. Information technology-based 2a. Achieved. Information technology-

business process and procedures are established within based procedures were established
staff skills of PWDs. c the PWDs for planning and project within the PWDs for planning and
management purposes. project management purposes by 2014
and are currently being used.

2b. Staff training and capacity 2b. Achieved. Staff training and
building adequately capturing all capacity building that were undertaken
essential road management adequately captured all essential road
functions. management functions.

2c. Road safety program with 2c. Achieved. Road safety program with
coordinated engineering, coordinated engineering, enforcement,
enforcement, and education and education components are in place.
components in place.

2d. Sustained funding for road 2d. Achieved. Sustained funding from
operation and maintenance the state budget (each state) for road
established and in place. operation and maintenance have been
established and are in place. c
20 Appendix 1

ADB = Asian Development Bank, EA = executing agency, km = kilometers, NER = North Eastern Region, PWD =
Public Works Department.
a Phase A of SARDP-NE was approved by the Government of India for improving 4,099 km of roads (3,014 km of

national highways and 1,085 km of state roads). Of these, 3,213 kms were approved for implementation and the
balance of 886 km was approved “in principle.” A total of 3,333 kms of roads was awarded and 2,101 kms have
been completed by March 2019. Phase A is expected to be completed during 2023–2024.
b ADB. 2013. Updated Facility Administration Manual. Manila. Table 1: List of Roads to be Improved under the

Investment Program. In Table 1, the length of roads to be improved under the investment program was reduced to
432.91 km against the 433.70 km envisaged at appraisal, as indicated in Facility Administration Manual of June
2011. However, at completion, there is a marginal difference of 340 meters, which is due to the actual requirement
at site, but without altering the original intended objective.
c
The activities to achieve outputs 2a–2d were completed progressively by 2014, under the technical assistance
program of the project, and is reported as being currently in use, although further strengthening and improvement
are required. A human resource and training cell was formulated in each of the participating states. Detailed report
on the training needs assessment, training plans, guideline documents, manuals, and software (including for
planning, management, other road management functions, human resources management system, and Road
Asset Management System (RAMS), etc.) was prepared and disseminated to all the participating states. A series
of facilitation workshops and capacity-building workshops were conducted on topics such as organizational issues,
transport planning, RAMS, financing for road maintenance, and the need for a dedicated Road Fund. Road safety
programs were also initiated including (i) a review of the existing arrangements for managing and monitoring road
safety, (ii) training of the relevant personnel for the effective implementation of road safety, and (iii) proposing
modifications for effective institutional arrangements. The participating states also recognized the importance of
road safety, including the prevention of accidents and the establishment of a road safety council. An overseas
training program on “Maintenance and Rehabilitation of Roads and Bridges using Road Asset Management
System” was organized in Malaysia in June 2014 to showcase the use of RAMS. Ten participants from six PWDS
of the North Eastern states participated. The participating states allocated sufficient budget to meet the yearly
maintenance of the road assets, as evident from their historical budgets, except for Assam, which has been
prioritizing the reconstruction of roads over the maintenance of distressed road assets.
Sources: TA consultants’ final report, surveys conducted by the project implementation units (PIUs), and discussions
with the PIUs of Assam, Manipur, Mizoram, and Tripura.
 Appendix 1 21

Table A1.2 Design and Monitoring Framework: Project 2

Impact the project is aligned with:
Improved mobility and accessibility in the project areas in the North Eastern Region (NER).
Achievements:
a. Actual growth rates of traffic (9.89%) on the project and connector roads surpassed the expected
average annual growth rate of 9%.
b. From 2011 to 2019, the ratio of paved roads to total roads in project states in the NER increased from
15% to 23% in Assam, 42% to 56% in Manipur, 42% to 61% in Tripura, but marginally decreased from
70% to 67% in Mizoram.a
Results Chain Performance Indicators Project Achievements
Outcome By 2019: By 2021:
Improved efficiency
of road transport in a. Vehicle operating cost on the project a. Exceeded. The vehicle operating
the project areas in roads reduced by 50% for three-axle cost on the project roads was reduced
the states of Assam, trucks and by 20% for passenger by 53% for three-axle trucks, and by
Manipur, Mizoram, buses at completion from ₹220 41% for passenger buses at
and Tripura (Assam), ₹ 250 (Manipur), ₹ 170 completion. c
(Mizoram), and ₹130 (Tripura) per
vehicle-km, respectively, in 2013.b

b. Travel time on the project roads b. Exceeded. Travel time on the

reduced by 20%–40% from 17 km/h project roads was reduced by more
(Assam), 18 km/h (Manipur), 8 km/h than 50%: (i) from 17 km/h to 38 km/h
(Mizoram), and 20 km/h (Tripura), in Assam, (ii) from 18 km/h to 41 km/h
respectively, in 2013. in Manipur, (iii) from 8 km/h to 35 km/h
in Mizoram, and (iv) from 20 km/h to
42 km/h in Tripura, by 2023. c

c. Increase in average daily vehicle- c. Exceeded. The average daily

kilometers in the first full year of vehicle-kilometers in the first full year
operation from 456,600 in 2013 of operation increased from 456,600 in
631,500. 2013 to 637,733 in 2023.c
Outputs By 2018: By 2021:
Reconstructed and a. Approximately 236 km d of state a. Achieved. A total of 235.79 km of
rehabilitated state roads (state highways and district state roads (state highways and
roads roads) reconstructed or rehabilitated district roads) was reconstructed or
in four NER states: rehabilitated in the four NER states:

Assam: 63 km Assam: 62.56 km

Manipur: 98 km Manipur: 97.93 km
Mizoram: 55 km Mizoram: 55.00 km
Tripura: 20 km Tripura: 20.30 km
ADB = Asian Development Bank, km/h = kilometer per hour, FAM = facility administration manual, NER = North
Eastern Region, PWD = Public Works Department.
a Marginal decrease in the percentage of surface roads was observed, however, the length of surfaced roads

increased from 8,099 km in 2011 to 10,866 km in 2019.

b The statewide vehicle operating cost per vehicle-km that was provided appears to be erroneous. The amounts

mentioned for VOC of 3-axle truck and bus are not correct. Moreover, there is no reason for higher amount in the
case of Assam (Rs. 250) compared with Tripura (Rs. 130). Tripura is having hilly terrain compared with Assam;
hence the VOC should be more than Assam which is mostly flat terrain.
c As per the surveys conducted by the project implementing units (PIUs) and discussions with the PIUs of Assam,

Manipur, and Mizoram at completion in 2021, and with Tripura in 2023.

d ADB. 2013. Updated Facility Administration Manual. Manila. Table 1: List of Roads to be Improved under the

investment program. In Table 1, the length of roads to be improved under tranche 2 was increased to 235.71 km
22 Appendix 1

(Assam = 62.56 km, Manipur = 97.85 km, Mizoram = 55.00 km, and Tripura = 20.30 km) against the project roads’
length of 231.40 km as envisaged at appraisal (as indicated in the Facility Administration Manual of June 2011).
Sources: Asian Development Bank and the state executing agencies.
 Appendix 2 23

COSTS AT APPROVAL AND ACTUAL

Project 2 Cost at Approval and Actual

Table A2.1: Project 2 Cost by Source ($ million)

Source Appraisal Estimate Actual
Cost % Cost %
ADB 125.20 79.60 125.20 68.10

Government 32.00 20.40 58.72 31.90

Total 157.20 100.00 183.92 100.00

ADB = Asian Development Bank.

Sources: Asian Development Bank and the project implementation units of Assam, Manipur, Mizoram,
and Tripura.

Table A2.2: Project 2 Cost by Item ($ million)

Item Appraisal Actual
Base Costs
I. Investment Component
1. Right-of-Way and Social and Environmental 4.50 8.19
Measures
2.1 Civil Works (roads and bridges) 111.70 157.85
2.2 Road Maintenance 3.30 0.59
3. Construction Supervision Consultants 8.30 8.81
4. Equipment 0.60 0.0
5. PIU Cost 0.80 0.07
Subtotal 129.20 175.51
II. Project Management and Capacity
Development Component
1. Project Management Consultant 0.00 0.00
2. PMU Cost) 0.10 0.00
Subtotal 0.10 0.00
Base Cost Total 129.30 175.51
Physical Contingency 3.80 0.00
Price Contingency 19.80 0.00
Financing Charges during Implementation 4.30 8.41
Total 157.20 183.92
ADB = Asian Development Bank, PIU = project implementation unit, PMU = project management unit.
a Civil works contracts include cost toward contingencies.

Sources: Asian Development Bank and the PIUs of Assam, Manipur, Mizoram, and Tripura.
.
24 Appendix 3

Investment Program Cost at Approval and Actual

Table A2.3: Investment Program Cost by Source ($ million)

Source Appraisal Actual
Project 1 Project 2 Total Project 1 Project 2 Total
ADB 74.80 125.20 200.00 74.48 125.20 199.68

Government 34.70 32.00 66.70 29.81 58.72 88.53

Total 109.50 157.20 266.70 104.29 183.92 288.21

ADB = Asian Development Bank.
Sources: Asian Development Bank and the project implementation units of Assam, Manipur, Mizoram,
and Tripura.

Table A2.4: Investment Program Cost by Item ($ million)

Item Appraisal Actual
Project Project Total Project Project Total
1 2 1 2
I. Investment Component
1. Right-of-Way and Social and
Environmental Measures
4.10 4.50 8.60 1.74 8.19 9.93
2.1 Civil Works (roads and bridges) 71.40 111.70 183.10 86.23 157.85 244.08
2.2 Road Maintenance 2.10 3.30 5.40 1.14 0.59 1.73
3. Construction Supervision
Consultants 9.20 8.30 17.50 8.48 8.81 17.29
4. Equipment 0.70 0.60 1.30 0.00 0.00 0.00
5. PIU Cost 0.50 0.80 1.30 0.27 0.07 0.34
Subtotal 88.00 129.20 217.20 97.85 175.51 273.36
II. Project Management and Capacity
Development Component
1. Project Management Consultant 1.00 0.00 1.00 0.39 0.00 0.39
2. PMU Cost 0.10 0.10 0.20 0.00 0.00 0.00
Subtotal 1.10 0.10 1.20 0.39 0.00 0.39
Base Cost Total 89.10 129.30 218.40 98.24 175.51 273.75
Physical Contingency 2.60 3.80 6.40 0.00 0.00 0.00
Price Contingency 11.30 19.80 31.10 0.00 0.00 0.00
Financing Charges during
Implementation
6.50 4.30 10.80 6.05 8.41 14.46
Total 109.50 157.20 266.70 104.29 183.92 288.21
ADB = Asian Development Bank, PIU = project implementation unit, PMU = project management unit.
a
Civil works contracts include cost toward contingencies.
Sources: Asian Development Bank and the PIUs of Assam, Manipur, Mizoram, and Tripura.
 Appendix 3 25

PROJECT 2 COST BY FINANCIER

Table A3.1: Project 2 Cost at Approval by Financier
($ million)
Item At Approval
Original allocation Revised Allocation
Total ADB Borrower ADB Total ADB Borrower ADB
Share Share
(%) (%)
Base Costs
I. Investment Component
1. Right-of-Way and Social and
Environmental Measures 4.5 0.0 4.5 0.0 4.5 0.0 4.5 0.0
2.1 Civil Works (roads and bridges) 111.7 96.5 15.2 86.4 130.19 115.0 15.2 88.3
2.2 Road Maintenance 3.3 0.0 3.3 0.0 3.3 0.0 3.3 0.0
3. Construction Supervision
Consultants 8.3 8.3 0.0 100.0 10.21 10.2 0.0 100.0
4. Equipment 0.6 0.6 0.0 100.0 0.0 0.0 0.0 0.0
5. PIU Cost 0.8 0.0 0.8 0.0 0.8 0.0 0.8 0.0
Subtotal 129.2 105.4 23.8 81.6 149.0 125.2 23.8 84.0
II. Project Management and
Capacity Development Component
1. Project Management Consultant 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
2. PMU Cost) 0.1 0.0 0.1 0.0 0.1 0.0 0.1 0.0
Subtotal 0.1 0.0 0.1 0.0 0.1 0.0 0.1 0.0
Base Cost Total 129.3 105.4 23.9 81.5 149.1 125.2 23.9 84.0
Physical Contingency 3.8 3.2 0.6 84.2 0.6 0.0 0.6 0.0
Price Contingency 19.8 16.6 3.2 83.8 3.2 0.0 3.2 0.0
Financing Charges during
Implementation 4.3 0.0 4.3 0.0 4.3 0.0 4.3 0.0
Total 157.2 125.2 32.0 79.6 157.2 125.2 32.0 79.6
ADB = Asian Development Bank, PIU = project implementation unit, PMU = project management unit.
a Civil works contracts include cost toward contingencies.

Sources: Asian Development Bank and the PIUs of Assam, Manipur, Mizoram, and Tripura.
26 Appendix 3

Table A3.2: Project 2 Cost Actual by Financier

($ million)

Item Actual
Total ADB Borrower ADB
share(%)
Base Costs
I. Investment Component
1. Right-of-Way and Social and 8.19 0.00 8.19 0.00
Environmental Measures
2.1 Civil Works (roads and bridges) 157.85 116.39 41.46 73.70
2.2 Road Maintenance 0.59 0.00 0.59 0.00
3. Construction Supervision Consultants 8.81 8.81 0.00 100.00
4. Equipment 0.00 0.00 0.00 0.00
5. PIU Cost 0.07 0.00 0.07 0.00
Subtotal 175.51 125.20 50.31 71.30
II. Project Management and Capacity
Development Component
1. Project Management Consultant 0.00 0.00 0.00 0.00
2. PMU Cost) 0.00 0.00 0.00 0.00
Subtotal 0.00 0.00 0.00 0.00
Base Cost Total 175.51 125.20 50.31 71.30
Physical Contingency 0.00 0.00 0.00 0.00
Price Contingency 0.00 0.00 0.00 0.00
Financing Charges during 8.41 0.00 8.41 0.00
Implementation
Total 183.92 125.20 58.72 68.10
ADB = Asian Development Bank, PIU = project implementation unit, PMU = project management unit.
a Civil works contracts include cost toward contingencies.

Sources: Asian Development Bank and the PIUs of Assam, Manipur, Mizoram, and Tripura.
 Appendix 4 27

DISBURSEMENT OF ADB LOAN PROCEEDS

Table A4: Annual and Cumulative Disbursement of ADB Loan Proceeds
($ million)
Annual Disbursement Cumulative Disbursement
Year
Amount % of Total Amount % of Total
2015 5.47 4.37 5.47 4.37
2016 11.93 9.53 17.40 13.89
2017 13.88 11.09 31.28 24.98
2018 20.76 16.58 52.03 41.56
2019 34.22 27.34 86.26 68.90
2020 21.99 17.56 108.25 86.46
2021 16.95 13.54 125.20 100.00
Total 125.2 100.00
ADB= Asian Development Bank.
Source: Asian Development Bank’s Integrated Disbursement System.

Figure A4: Projected and Actual Cumulative Disbursement of ADB Loan Proceeds
($ million)

ADB = Asian Development Bank.

Source: Asian Development Bank’s Integrated Disbursement System.
28 Appendix 5

APPRAISAL AND ACTUAL IMPLEMENTATION SCHEDULES

Figure A5.1: Project 2 Appraisal and Actual Implementation Schedule

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022-24
Activity Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Y1 Y2 Y3
A PMC

Recruitment

Consulting services
Execution
B CW (Project 2)

Procurement

Construction

Maintenance

C CSC (Project 2)

Recruitment

Consulting services
Execution

At Appraisal Actual Defects liability period Maintenance

ADB = Asian Development Bank.

Sources: ADB. 2013. Updated Project Administration Manual. Manila; and the project implementation units of Assam, Manipur, Mizoram, and Tripura.
 Appendix 5 29

Figure A5.2: Investment Program Appraisal and Actual Implementation Schedule

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022-26
Activity Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Y1 Y2 Y3 Y4 Y5
A PMC

Recruitment

Consulting services
Execution
B CW (Project 1)

Procurement

Construction

Maintenance

C CSC (Project 1)

Recruitment

Consulting services
Execution
D CW (Project 2)

Procurement

Construction

Maintenance

E CSC (Project 2)

Recruitment

Consulting services
Execution

At Appraisal Actual Defects liability period Maintenance

ADB = Asian Development Bank.

Sources: ADB. 2013. Updated Project Administration Manual. Manila; and the project implementation units of Assam, Manipur, Mizoram, and Tripura.
 30 Appendix 6

CHRONOLOGY OF MAIN EVENTS

Date Main Event
2005
23 Nov Concept clearance
2006
10–25 May Fact-finding mission
2011
17 June Framework Financing Agreement between the Government of India and ADB
2012
08 December Award of consultancy contract for CSC by Assam (consultancy under Project
1 is extended for Project 2)
2013
17 June Periodic Financing Request for Loan 3073-IND
24-25 October Loan negotiations
15 November Award of consultancy contract for CSC by Tripura
2 December ADB approval of loan by approval of Periodic Financing Agreement
Extension of MFF period to 30 June 2021
2 December
13 December Consultation mission
28 December Award of consultancy contract for CSC and two civil works contracts by
Manipur
12–16 September Inception mission
2014
17 February Loan agreement between ADB and Government of India
17 February Project agreements signed between ADB and State of Assam, Mizoram,
Manipur, and Tripura
29 May Award of consultancy contract for CSC by Mizoram
11 November Award of civil works contract by Mizoram
29 December Award of civil works contract by Assam
2015
25 February Award of civil works contract by Tripura
27 November Transfer of loan from SATC to INRM
2020
31 October Completion of civil works contract in Assam
2021
30 April Completion of civil works contract in Mizoram
31 May Completion of first civil works contract in Manipur
29 June Completion of second civil works contract in Manipur
30 June Loan closing date
08 November Financial closing date
2023
13 January Completion of civil works contract in Tripura
ADB = Asian Development Bank, CSC = construction supervision consultant, INRM = India Resident Mission,
PMC = project management consultant, SATC = South Asia Transport and Communications.
Sources: Asian Development Bank and the project implementation units of Assam, Manipur, Mizoram, and
Tripura.
 Appendix 7 31

ORGANIZATION CHART OF PROJECT IMPLEMENTATION

ADB = Asian Development Bank, DEA = Department of Economic Affairs, EA = executing agency, MDONER = Ministry of Development of North Eastern Region,
MORTH = Ministry of Road and Highway Transport, NEC = North Eastern Counsel, PIU = project implementation unit, PWD = Public Works Department.
Sources: Asian Development Bank and the project implementation units of Assam, Manipur, Mizoram, and Tripura.
32 Appendix 8

TECHNICAL ASSISTANCE COMPLETION REPORT

(TA 7838-IND)

TA Number, Country, and Name: Amount Approved: $1,200,000

TA 7838-IND: Capacity Building for North Eastern State Roads Revised Amount: Not applicable
Sector
Executing Agency: Source of Funding: Amount Undisbursed: Amount Used:
Ministry of Development of North Japan Fund for $174,780.70 $1,025,219.30
Eastern Region Prosperous and Resilient
Asia and the Pacific
TA Approval Date: TA Signing Date: TA Completion Date
21 July 2011 25 May 2012 Original Date: Latest Revised Date:
30 June 2014 31 December 2014
Financial Closing Date: Number of
31 May 2015 Extensions: 1
TA Type: Capacity development technical assistance (CDTA) TA Arrangement:
Attached to MFF 0058-IND: North Eastern State
Roads Investment Program

Description

The North Eastern Region (NER) of India is connected only by a narrow land corridor to the rest of the country.
Except for the state of Assam, the NER’s terrain is predominantly hilly to mountainous, and the region experiences
some of the highest rainfall levels in the world, frequently causing landslides and floods. Road connectivity continues
to be poor and prone to disruption due to inclement weather and landslides. Although the NER is serviced by road,
rail, air, and water transport, road transport dominates the movement of goods and passengers. The road network in
the NER in 2011 comprised 145,000 kilometers (km), consisting of 35,000 km of surfaced roads—mostly national
highways, state highways, and district roads—and 110,000 km of unpaved roads. Except for the highest-class roads
(mostly national highways maintained by central government agencies), the road network in the NER required
substantial improvement through the expansion and rehabilitation of individual road sections. The state-level public
works departments (PWDs) also required substantial capacity strengthening.

Recognizing that roads and bridges were inadequate to support road transport as the NER’s dominant transport
mode, the Ministry of Development of North Eastern Region (MDONER) developed the North Eastern State Roads
Investment Program, which was designed to improve intrastate connectivity, mainly to district headquarters and other
places of administrative and economic importance in individual states, and to enhance the capacity of state PWDs to
manage their road assets. Subsequently on 21 July 2011, the Asian Development Bank (ADB) approved a $200-
million multitranche financing facility (MFF) North Eastern State Roads Investment Program (NESRIP) to (i) improve
430 km of priority road sections in six states of the NER, namely Assam, Manipur, Meghalaya, Mizoram, Sikkim, and
Tripura; and (ii) provide capacity-building support to the executing agency (MDONER) and the implementing
agencies—the PWD or its equivalent in each of the six states.

To facilitate institutional development and capacity building of the PWDs, a capacity development technical
assistance (CDTA), the Capacity Building for North Eastern State Roads Sector TA was attached to the MFF. The TA
was financed on a grant basis by the Japan Fund for Prosperous and Resilient Asia and the Pacific (JFPR) for
$1,200,000. The TA was to (i) strengthen state PWD road management by introducing modern road management
practices; and (ii) facilitate the road management role of state PWDs by introducing more effective and efficient road
management processes and systems, and establishing road maintenance funds. A parallel cluster CDTA, Advanced
Project Preparedness for Poverty Reduction TA, also supported the capacity development component of the MFF.1
This TA focused on (i) identifying actions for streamlining the business processes for road management by PWDs of

1
The capacity building support for the MFF was split into two separate, yet related TA projects. Prior to the MFF
approval (as agreed during the Joint Advisory Committee of the TA Cluster on 18 March 2010), a CDTA of $1.9
million was envisaged to be approved as a piggybacked TA to the MFF, of which $1.2 million will be financed on
grant basis by JFPR, and $0.7 million by the Government of United Kingdom under the ongoing Cluster TA 0003-
IND Advanced Project Preparedness for Poverty Reduction. However, only the JFPR-financing (TA 7838) was
approved with the MFF in 2011. This was due to the difference in the TA processing procedure between JFPR and
the Cluster TA (with pending extension of implementation period at that time). The said financing from UKNI–
ATF—a Cooperation Fund with the United Kingdom and Ireland was approved under the TA Cluster in 2012 under
subproject TA 8063 (consequently the cluster TA was extended from 31 July 2012 to 31 December 2014).
 Appendix 8 33

the project states, (ii) making the Road Asset Management System (RAMS) database operational, (iii) having road
safety program developed, and (iv) identifying options for financing arrangements for road operation and
maintenance in the project states. Therefore, the capacity building support was split into two separate, yet related TA
components.

Expected Impact, Outcome, and Outputs

The expected impact was institutional development and capacity building of the PWDs in the NER facilitated. The
expected outcome was state PWD road management strengthened by introducing modern road management
practices; facilitating the road management role of state PWDs by introducing more effective and efficient road
management processes and systems; and establishing road maintenance funds. 2 The outputs were actions
identified for streamlined business processes for road management by PWDs of the project states. These
comprised (i) institutional aspects, (ii) road maintenance financing, (iii) improved quality management of
construction and maintenance, (iv) human resource development program, (v) potential tolls to generate road
maintenance fund, and (vi) training and human resource development. 3

Implementation Arrangements
MDONER was the executing agency while ADB-administered the TA. Six North Eastern states (Assam, Manipur,
Meghalaya, Mizoram, Sikkim, and Tripura) public works department or its equivalent were the implementing
agencies. The TA project was implemented for 31 months, including an extension of 6 months up to 31 December
2014. The TA became effective on 25 May 2012, 10 months after TA approval due to the delay in the approval
process of the MFF. ADB engaged a consulting firm, Lea International Ltd, following quality- and cost-based
selection method, using a quality–cost ratio of 80:20 and simplified technical proposals in accordance with ADB’s
Guidelines on the Use of Consultants (2010, as amended from time to time).4 The same consulting firm was engaged
for both CDTAs (different contracts and common team leader) due to the related nature of the two CDTAs. Team
members of the consulting firm for each TA worked closely to complement activities. The contract completion date for
both contracts was 6 December 2014. TA 7838-IND engaged a total of 76.5 person-months inputs against the
planned 60 person-months. The consultants were to assist in the following areas: (i) institutional aspects, (ii) road
maintenance financing, (iii) improved quality management of construction and maintenance, (iv) human resource
development program, (v) potential tolls to generate road maintenance fund, and (vi) training and human resource
development. TA 8063 utilized a total of 44 person-months inputs against the planned 34 person-months. The
consultants were to (i) assist in equipment procurement required for effective road management, (ii) implement the
road asset management system, and (iii) develop and implement the road safety initiative.

The performance of the consultants was rated satisfactory. The consultants were quick to adjust in the methodology
at the commencement of their services when they noticed that it is better that the consultants visit each and every
state of the North Eastern states rather than officers from the states travelling to one specific state to attend central-
based workshops. The consultants conducted periodic reviews with ADB, the executing agency, and state
implementing agencies to deliver the tasks and responsibilities assigned to them under the contract. The
performance of the executing agency and the state implementing agencies were also satisfactory as they gave full
support to the consultants in all activities under the TA project. Also, the executing agency and the state
implementing agencies endorsed the change in methodology proposed by the consultants. The counterpart staff of
the executing agencies were very cooperative in providing support to the consultants whenever required.

Conduct of Activities
Output 1. Institutional capacity strengthened. The consultants (i) reviewed actions proposed under the institutional
development and capacity building (IDCB) plans for the institutional aspects; (ii) prepared guidelines and procedures
for improved road maintenance operations, including the use of alternate methods and materials, among others; and
(iii) conducted seminars and case studies (involving state governments and state departments, stakeholders, and the
community) on the main principles of transport planning, project programming, and methodologies for project costing

2 ADB. 2011. Report and Recommendation of the President to the Board of Directors on a Proposed Multitranche
Financing Facility and Technical Assistance Grant India: North Eastern State Roads Investment Program. Manila.
(paras. 20-21)
3 The outputs were derived from the terms of reference of the consultants.
4 For TA 7838, Lea International Ltd. was the consulting firm and the contract was awarded on 17 December 2012

The firm commenced its services on 7 January 2013, physically closed on 6 December 2014, and financially closed
on 31 May 2015. For TA 8063, Lea International Ltd. was also the consulting firm and the contract was awarded on
12 December 2012. The firm commenced its services on 7 February 2013, physically closed on 6 December 2014,
and financially closed on 31 May 2015.
34 Appendix 8

and financing. During the TA implementation, around 14 meetings took place between the consultants, ADB,
executing agency, and the state implementing agencies. About 20 reports, manuals, and guidelines were submitted.
A series of workshops were held, such as Inception workshop, state-level capacity development workshops, seminar
on transport planning for North Eastern states, workshops on road asset management, workshop on human resource
management and training needs, and workshop on financing for road maintenance. A dedicated road fund seminar
was also conducted on (i) transport planning and project programming, (ii) institutional issues, (iii) financing for road
construction and maintenance, (iv) human resource management and training, (v) an overseas study tour. An
overseas training program on “Maintenance and Rehabilitation of Roads and Bridges using Road Asset Management
System (RAMS)” was organized in Malaysia in June 2014 to showcase the use of RAMS. Ten participants from six
PWDS of the North Eastern states participated.

Output 2. Road maintenance financing developed. The consultants (i) conducted assessment on the possible
modalities of securing additional funds for road maintenance in each of the project states; (ii) assisted PWDs in
establishing a Road Maintenance Fund; (iii) assisted PWDs in developing road maintenance funding principles,
strategies, and guidelines for managing the road maintenance funds; and (iv) Assisted in the development of road
maintenance treatment selection process. A seminar on financing for road construction and maintenance and a
seminar on road asset management were also held.

Output 3. Quality management of construction and maintenance improved. The consultants (i) assisted the
PWDs in developing a quality management system for the construction and maintenance works, including a quality
management manual, procedures, and reporting system; (ii) prepared the manual with detailed procedures for
carrying out inspections, testing and measurement, and preparing reports on the quality and progress of the works
for use by the PWD engineers and supervision consultants in all road and bridge construction, repairs, and
maintenance activities; (iii) trained PWD staff in the use of the manual; and (iv) assisted the PWDs to identify,
prepare specifications, and procure testing equipment and facilities required for implementing the quality
management system.

Output 4. A Human Resource Development Program implemented. The consultants (i) assisted the PWDs in
developing a staffing plan and staff recruitment strategy and procedures, (ii) assisted the PWDs in assessing training
needs for the PWDs, (iii) prepared a 3-year training plan for each state, (iv) finalized the training need assessment
(TNA) forms for each North Eastern state, and (v) formulated five guideline documents on human resource
development and training, namely (a) Guidelines for conduct of TNA in NE states; (b) Guidelines for preparing the
training plan based on TNA; (c) Guidelines for design of training programmes; (d) Guidelines for development of
training & learning material; and (e) Guidelines for evaluation of training. There was an establishment of an HR and
Training cell in each of the PWDs by appointment of counterpart staff. These staff continued to perform functional
tasks even after completion of the TA project. The completed TNA forms received post survey from six NE States
totaling 228. Six state-specific reports on TNA and training plan were issued to each of the six NE states.

Output 5. Examine potential tolls to generate road maintenance funds. The consultants examined the possibility
of alternate funding sources, including fuel taxes and tolls, through road user charges and private sector participation.

Output 6. Training and human resource development provided. Detailed report on the training needs
assessment, training plans, guideline documents, manuals, and software (including for planning, management, other
road management functions, human resources management system, Road Asset Management System (RAMS),
etc.) was prepared and disseminated to all the participating states. A series of facilitation workshops and capacity-
building workshops were conducted that included topics on organizational issues, transport planning, RAMS,
financing for road maintenance, and the need for a dedicated Road Fund.

The key reports produced by the consultant team were as follows: (i) inception report, (ii) quarterly progress reports,
(iii) draft final report, and (iv) final report. The final report contained actions required for (i) a streamlined business
processes for road management by PWDs of the project states, (ii) the creation and operationalization of the Road
Asset Management System (RAMS) database, (iii) the development of a road safety program, and (iv) options for
financing arrangements for road operation and maintenance in the project states. In addition to the above, the
consultants also produced the Guidelines and procedures for improved road maintenance operations prepared for
each of the six states, including the use of alternate methods and materials, etc. The guidelines were simple and self-
explanatory for the use of each state PWDs. Manuals were also produced for (a) inspections, testing, and
measurement with detailed procedures; and (b) for preparing the reports on quality and progress of the works by
PWD engineers and supervision consultants on all road and bridge construction, repairs, and maintenance activities.
The manuals were finalized based on the pilot test conducted on samples of different types of works. Based on
consultations among ADB, executing agencies, state implementing agencies, and consultants, the TA also
established a human resource and training cell, procured IT equipment, and installed a road asset management
system (RAMS) in each of the participating states.
 Appendix 8 35

Road safety programs were also initiated including (i) a review of the existing arrangements for managing and
monitoring road safety, (ii) training of the relevant personnel for the effective implementation of road safety, and (iii)
proposing modifications for effective institutional arrangements. The participating states also recognized the
importance of road safety, including the prevention of accidents and the establishment of a road safety council. The
participating states allocated sufficient budget to meet the yearly maintenance requirements, as evident from their
historical budgets, except for Assam, which has been prioritizing the reconstruction of roads over the maintenance of
distressed road assets.

Technical Assistance Assessment Ratings

Criterion Assessment Rating
Relevance The TA is rated relevant. The CDTA was attached to the MFF of $200 Relevant
million which was included in ADB’s India Country Operations Business
Plan (COBP), 2010. The CDTA was also in the India’s COBP of 2010.
The attached CDTA was largely aligned with the government’s priorities
on improving mobility and accessibility in the NER. It was aligned with the
government’s program Special Accelerated Road Development Program
in the North Eastern Region (SARDP-NE) which focuses on improving
national highways and state roads in the region and providing
connectivity to state capitals. The CDTA provided institutional
development and capacity-building support to the state implementing
agencies of the NESRIP, and the state PWD or its equivalent in the six
North Eastern states (Assam, Manipur, Meghalaya, Mizoram, Sikkim, and
Tripura.

The design and rationale for using a TA were appropriate. During the
project processing of the NESRIP, the Department of Economic Affairs,
Ministry of Finance, the Ministry of Development of North Eastern Region
and the Governments of the project states requested for the CDTA as the
state PWDs in the NER had limited exposure to modern road
management practices, and their capacity needed substantial
enhancement, both for implementation of the NESRIP and for overall
management of the road network under their responsibility. The CDTA
covered a broad scope to improve state PWDs’ overall performance
through improvement in their business processes and institutional
structure. The CDTA aimed at institutionalizing the good practices being
adopted and experiences gained so that the changes being initiated
under the NESRIP could be sustained and replicated in other areas of
PWDs’ operation.
Effectiveness The TA is rated effective as the outcome and all outputs were achieved. Effective
The consultant achieved all deliverables and carried out the activities as
mentioned in their TORs, namely (i) institutional aspects, (ii) road
maintenance financing, (iii) improved quality management of construction
and maintenance, (iv) human resource development program, (v)
potential tolls to generate road maintenance fund, and (vi) training and
human resource development. Overall, the reports, guidelines, and
manuals prepared were of good quality and the training programs and
facilitation workshops targeted the needs of the stakeholders of the NER
states. The TA facilitated the PWDs of the NE States in (i) improved
capacity in planning, programming, policy formulation and asset
management; and (ii) prepared them for taking larger responsibility as
‘managers’ of the roads being developed under various road
development schemes. Further, these PWDs were ready to replicate the
good project management practices introduced under the NESRIP in
other areas of their operation. One of the most significant outputs of the
TA project was the state PWDs’ exposure to the concept of
establishment of a dedicated RAMs cell along with a robust RAMs in all
state PWDs. It helped the PWD staff to gain a first-hand working
knowledge of the system’s workings and its importance in convincing the
financial planners for an adequate allotment of funds toward road
maintenance. The states were encouraged to establish dedicated cells in
the PWDs for the following four functions: (i) human resource
36 Appendix 8

Criterion Assessment Rating

management and training, (ii) environmental and social management, (iii)
road safety, and (iv) road asset management. The consultants also
stressed the need to bring reforms and rationalize the mechanical wing of
the state PWDs. The quality management manual prepared by the
consultants is still being used in several states.
Efficiency The TA is rated efficient. The TA delivered all the outputs within budget. Efficient
Funds usage was appropriate at 85.43%. The unused funds were due to
only one contract under the TA and the remaining cofinancing of the
contract under the cluster TA. Both TAs which provided capacity building
support achieved all outputs as envisaged (footnote 1). TA8063-IND
assisted in further operationalizing and developing the outputs identified
under the scope of TA 7838. TA 8063 facilitated in (i) identifying actions
for streamlining the business processes for road management by PWDs
of the project states, (ii) making the Road Asset Management System
(RAMS) database operational, (iii) having road safety program
developed, and (iv) identifying options for financing arrangements for
road operation and maintenance in the project states. Therefore, the
capacity building support was split into two separate, yet related TA
components. The TA project had a minimal delay of 6 months due to the
prolonged approval of the MFF (delays in discussions and conclusions
among the executing agencies, state implementing agencies, ADB, and
consultants). The consultants performed well under the scope of work
and all planned deliverables were achieved.
Overall Overall, the TA project was rated successful on account of the ratings of Successful
Assessment relevant, effective and efficient. The TA project was aligned with the
strategic priorities of the government and ADB. Funds usage was
appropriate. A series of documents were produced, and training activities
and facilitation visits were conducted that improved the capability of
PWDs in the NER states.
Sustainability The TA project activities are likely sustainable. The consultants studied Likely sustainable
the existing maintenance strategy and funding mechanism. They
prepared a detailed report on various financing sources for road
operation and maintenance in the project states. Based on the report,
there is definite scope for improving the road maintenance with timely
actions and mobilization of the required funds from various sources. In all
the North Eastern states, RAMS, TNA forms, and IT equipment have
been installed and are operational. Establishment of a dedicated RAMs
cell along with a robust RAMs in all state PWDs and quality management
manual prepared by the consultants is being used by all 6 State PWDs. A
few trained dedicated manpower in the field of Environmental & Social
Management, road safety, road safety asset management are still
working in the PWDs. In Sikkim PWD, the future procurement of quality
management equipment is as recommended by the consultants.
Counterpart staff dedicated to an HR and Training cell is still being
continued by PWDs. The TA consultants had calculated the funding
requirements for next 30 years and suggested following
recommendations: (i) a separate budget, held by the State, should be
created to fund emergency works; (ii) A mechanism will need to be set in
place to ensure the timely release of funds; (iii) one Road Fund be
created to cover all the NE States (iv) discussions on this topic continue
and a way forward be found whereby one Road Fund for all the NE
States is established (v) a RMF were to be established then the levy
should be an ad valorem tax rather than a set Rupee Tax per litre.

Lessons Learned and Recommendations

Design and/or planning As with many institutional projects, the duration was too short to expect to
achieve long-term results, such as institutional reform and provisions of
resources. Institutional projects require some 3–4 years of regular inputs from
a team of specialists if any long-term results are to be achieved. The NESRIP
has many commendable objectives, but there is a need for continuous effort
 Appendix 8 37

and not a stochastic approach.

Strengthening capacities of TA team can facilitate delivery of services to

achieve project results. During the middle of the implementation of the TA
project, 2 national specialists, were added to the existing 6 team members of
the TA team to strengthen its capacity in the fields of road asset management,
road condition and safety, transport planning and management, and quality
assurance and road maintenance. The additional specialists could have been
considered at appraisal, so that variations in the contract of the consultants
could have been avoided. These 2 specialists provided services in their
respective fields.
Implementation and/or delivery Coordination and regular discussions among ADB, the consultant team, and
the government counterpart staff were important in achieving refinements to
the outputs and increasing their relevance, especially when counterpart
support are essential for the key, subsequent activities to progress. Close
communication and exchanges in implementation arrangements, as were
done frequently under this TA project for the training activities, effectively
minimized the negative impacts and ensured an efficient TA project
completion.
Management of staff and The consultants met the deliverables as stated in their TORs. Close
consultants communication and a timely change in implementation arrangement or
methodology was important in effectively minimizing unwanted impacts from
potential coordination issues among ADB, the consultant firm, and the
government counterpart.
Knowledge building The PWDs will need to integrate the four cells (Human Resources,
NERAMS/IT, Road Safety, and Environmental and Social Management) into
their current organization structure, and to secure the appropriate resources,
including funding, for these cells. Since the PWD staff does not have expertise
in the area of organizational change and development, It is recommended that
the PWDs secure the help and guidance of seasoned professionals who can
support them in this process. It is also recommended that in addition to the
trainings within the country, knowledge transfer and partnership-sharing
among the developing member countries should be arranged, whenever
possible. Final Report was submitted to ADB, MDONER and the State PWDs
on 29 August 2014 at the final workshop of the TA at Assam. A total of 32
participants were present at the final workshop including representatives from
MDONER, ADB, the 6 NE States and TA consultants. The final report covered
all the major 5 domains of the TA i.e., strengthen institutional capacity,
implement a HRD programme, develop and implement road maintenance
financing practices, road maintenance practices; and quality management of
construction in an elaborate manner and also discussed at the final workshop.
Stakeholder participation The TA project is highly replicable in the other states of India and is relevant to
other DMCs for similar road capacity development activities. ADB should also
assess if there is any imperative need from relevant stakeholders.

Cofinancing for the JFPR component is highly appreciated and ADB is grateful
to the Government of Japan for timely granting the funds when requested for
the successful completion of the TA project.

Follow-Up Actions
ADB should closely monitor the implementation of the consultants’ recommendations on institutional changes, road
asset management, and creation of road maintenance funds in the NER states’ PWDs.
38 Appendix 8

Technical Assistance Cost (TA 7838)

Table A8.1: Technical Assistance Cost by Activity

($ ’000)
Amount a
Item Original Actual
1. Consultants 920.00 1,013.20
12.02
3. Seminars, Workshops, Training 30.00
4. Studies, Surveys, and Reports 100.00

6. Miscellaneous Administrative and 30.00

Support Costs
7. Contingency 120.00
Total 1,200.00 1,025.22b
Notes:
a Financed by the Japan Fund for Prosperous and Resilient Asia and the Pacific.

Source: Asian Development Bank estimates.

Table A8.2: Technical Assistance Cost by Fund

($ ’000)
ADB Total Cost
1. Original 1,200.00 1,000.00
2. Revised 0.00 0.00
3. Actual 1025.22 958.60
4. Unused 174.78 41.40
ADB = Asian Development Bank.
Source: ADB estimates.
 Appendix 9 39

CONTRACT AWARDS OF ADB LOAN PROCEEDS

Table A9: Annual and Cumulative Contract Awards of ADB Loan Proceeds
($ million)
Annual Contract Awards Cumulative Contract Awards
Year Amount Amount
% of Total % of Total
($ million) ($ million)
2014 94.10 56.25 94.10 56.25
2015 33.80 20.20 127.90 76.45
2016 0.00 0.00 127.90 76.45
2017 1.90 1.14 129.80 77.59
2018 0.00 0.00 129.80 77.59
2019 0.00 0.00 129.80 77.59
2020 37.50 22.41 167.30 100.00
2021 0.00 56.25 167.30 100.00
Total 167.30
ADB = Asian Development Bank.
Source: Asian Development Bank’s Loan Financial Information System.

Figure A9: Projected and Actual Cumulative Contract Awards of ADB Loan Proceeds
($ million)

ADB = Asian Development Bank.

Source: Asian Development Bank’s Integrated Disbursement System.
 40 Appendix 10

SUMMARY OF CONTRACTS
Table A10.1: Summary of Civil Contracts
Original /Revised
Length Contract Date/ Actual Amount ADB Financing
Package No. Contractor Name of Road Procurement Contract Amount
(km) Commencement (₹) ($)
(₹)
AS-02 DRA-SGCCL- Tamulpur to Paneri 10-Feb-15 /
ICB 62.56 2,891,600,000 3,882,500,000 34,787,828.45
AS-03 ANPL (JV) Paneri to Udalguri 10-Feb-15
28-Dec-13 /
MN06-CW-1 DRAIPL-ABCI(JV) Tupul-Bishnupur ICB 50.80 1,872,764,790 1,904,933,522 28,847,117.69
24-Jan-14
28-Dec-13 /
MN06-CW-2 DRAIPL-ABCI(JV) Thoubal-Kasom khullen ICB 47.13 1,733,671,249 2,298,135,466 16,352,857.44
24-Jan-14/
Tantia 11-Nov-14/
MZ-01 Serchhip to Buarpui ICB 55.00 2,045,145,316 2,698,300,000 30,399,414.17
Construction ltd 03-Dec-14
ECI-Nayak(JV) /
Vasishta 25-Feb-14/
TR-01 Udaipur to Melaghar ICB 20.30 802,600,000 765,700,000 6,006,084.73
Construction Pvt. 06-Apr-15
Ltd
ADB = Asian Development Bank, ICB = international competitive bidding, km = kilometer, ₹ = Indian rupee, $ = United States dollar.
Sources: ADB’s Integrated Disbursement System and the project implementation units of Assam, Manipur, Mizoram, and Tripura states.

Table A10.2: Summary of Consultant Contracts

Contract /
Procurement Original Amount Actual Amount ADB Financing
Consultant/Vendor State Description Commencement
Method (₹) (₹) ($)
Date
M/s AECOM Asia Co. Ltd. in JV with 1,161,624.8
Construction 8 Dec–2012/
Rodic Consultants Pvt. Ltd. in Assam QCBS 137,690,532 181,962,366
Supervision Consultant 8 Nov–2013 430,660
Association with AECOM India Pvt. Ltd.
M/s AECOM Asia Co. Ltd. in JV with 3,515,559.04
Construction 28 Oct–13/
Rodic Consultants Pvt. Ltd. in Manipur QCBS 125,088,184 328,363,144
Supervision Consultant 28 Dec–2013 754,108.04
Association with AECOM India Pvt. Ltd
Construction 29 May–2014/ 1,561,312.17
MSV International Inc, USA Mizoram QCBS 70,735,500 158,958,965
Supervision Consultant 10 Jun–2014 309,848.93
Egis International in JV
Construction 15 Nov–2013/
with Egis India Consulting Engineers Tripura QCBS 49,900,000 118,900,000 1,073,584.54
Supervision Consultant 2 Jan–2014
Pvt. Limited
Project Management —
QCBS 391,911.02
Consultant $
ADB = Asian Development Bank, QCBS = quality and cost-based selection, ₹ = Indian rupee, $ = United States dollar.
Sources: ADB’s Integrated Disbursement System and the project implementation units of Assam, Manipur, Mizoram, and Tripura states.
 Appendix 11 41

SAFEGUARDS ASSESSMENT

A. Involuntary Resettlement

1. Project 2 was category A for involuntary resettlement impact in accordance with ADB's
Safeguard Policy Statement (2009). At appraisal, a Resettlement Framework was formulated to
guide the preparation of safeguards documents, and six combined resettlement and indigenous
peoples plans (RIPPs) were prepared under the project and disclosed on the ADB website. A
due diligence report was prepared and disclosed during the implementation of the Manipur CW2
package. 1 The project was implemented with minimum land acquisition and involuntary
resettlement by adopting the most feasible technical designs. As far as possible, the roads were
widened within the existing right-of-way. At a few stretches of the project, roads required land
acquisition to improve geometry, road safety, and widening. The project's social safeguards
categorization continued until its completion.

2. Out of the six roads, land acquisition was required in Mizoram2 state, which was also
minimized at completion. Roads of Assam, Manipur,3 and Tripura states did not involve any land
acquisition as right-of-way was available or the roads were constructed within available land.
There were impacts on titleholders (THs), non-titleholders (NTHs), and community property
resources (CPRs). Of the project affected 756 households, 133 were THs, and 623 were NTHs.
In addition, the project also affected 34 CPRs. Table A11.1 shows the actual impacts at
completion.

Table A11.1: Impacts at Completion

Description Assam (in ha) Manipur (in ha)
Mizoram Tripura
AS-2 AS-3 MN06- MN06-
(in ha) (in ha)
CW1 CW2
Private 0 0 0 0 12.84 0
Land 0 0 9.55
Forest 0.9963 0
Acquisition
Government 0 0 0 0 0.19 0
Affected THs 0 0 21 2 110 0
Households NTHsa 104 54 257b 41 153 14
CPRs 4 2 8 6 13 1
CW = civil works, CPR = common property resources, ha = hectare, RIPPs = resettlement and indigenous peoples
plans, TH = title holders, NTH = non-title holders.
a Includes tenants, encroachers, and informal settlers.
b
During the implementation of the resettlement plan, 227 affected persons and 10 village chiefs were identified as
eligible for compensation for trees and crop loss.

1 Due diligence was prepared for widening a section of road from an intermediate lane to a standard two-lane road
from Km. 81+450 (Thoubal) to Km 88+700 (Yairipok), excluding the stretch from Km 82+350 to 83+150 (800 rm).
2 Mizoram state has various land settlement arrangements: (i) land settlement certificate holder, (ii) periodic patta

holder, and (iii) village pass/permit holder. Settlement certificate holder are titleholders who have heritable and
transferable rights over the land; the periodic patta authorizes a person to use a parcel of land for a definite period
under the Mizoram District (Agricultural Land) Act, 1963; and the pass/permit authorizes a person to use a piece of
land but does not give them the rights of an owner.
3 In Manipur, land is owned by the village chiefs in the hills and no revenue record or maps were available. There are

legalities with respect to land administration in the hills: (i) The Manipur Land Revenue & Land Reform Act 1960
extends to the whole of Manipur except the hill areas; and (ii) Memorandum of Public Works Department,
Government of Manipur, 1994—according to this order, the department will not acquire any land to construct roads.
The land for road construction will be donated/consented by concerned villages. However, the compensation for
the assets on the land is to be paid.
42 Appendix 11

Sources: The project implementation units of Assam, Manipur, Mizoram, and Tripura states.

3. As compensation, ₹160.05 million was paid as resettlement and rehabilitation (R&R)

allowances and for CPRs shifting as per the entitlement matrix. Of this amount, ₹138.51 million
was allotted as compensation, ₹11.37 million as R&R allowances to the affected households,
and ₹10.46 million for the CPRs. The maximum payment was in Mizoram on account of land
acquisition, followed by Manipur and Assam. The payment details for states are presented in
Table A11.2. The project implemented the RIPPs and the affected people were compensated in
accordance with the approved RIPPs. The project did not affect the livelihood of the households
significantly, as only a strip of land was required for the widening, and replacement value was
paid for the assets. NTHs affected by the project were adequately compensated, and most of
them shifted sideways or backward within the ROW and continued with their profession. The
households used the compensation amount to build better shops and expand their businesses.

Table A11.2: Compensation, Resettlement and Rehabilitation,

and Common Property Resources Payments

In Rupees (₹)
Description
Assam Manipur Mizoram Tripura Total
Compensation for 138,513,234.35
2,144,268.35 63,210,304.00 72,083,441.00
assets 1,075,221
R&R allowances 1,539,000.00 925,750.00 6,494,500.00 11,373,646.00
Compensation for 10,164,774.24
748,147.24 3,340,146.00 6,002,961.00 73,520*
CPRs
Total 4,431,415.59 67,476,200.00 84,580,902.00 1,148,741.00 160,051,654.60
CPR = common property resources, R&R = resettlement and rehabilitation.
*One thatched room could not be paid for as the owner remained absent after multiple efforts to locate them,
including the PIU's notice in the local newspaper.
Sources: The project implementation units of Assam, Manipur, Mizoram, and Tripura states.

4. Indigenous peoples. The project was classified as category B for IP safeguard

requirement in accordance with ADB's Safeguard Policy Statement (2009). At appraisal, social
impact assessments confirm that the socioeconomic impacts and benefits due to the
subprojects will not differ for Ips, compared to the remainder of the population. Hence, six
combined resettlement and indigenous peoples plans were prepared for the project. During
implementation, it was observed that the households were not distinctive because IPs were the
predominant population in Manipur and Mizoram, integrated with the other people of the project
area in Assam, and no IPs were affected in Tripura. The impact details on IPs for each state are
presented in Table A11.3. Tranche 2 affected 364 IP households, which is 49% of the total
number who were affected. Regarding impacts on IPs to the total affected in the project states,
a maximum of 99% were in Mizoram, followed by Manipur (25.72%), and Assam (20.88%). No
IPs were affected in Tripura.

Table A11.3: Indigenous Peoples Households Affected

Indigenous Peoples’
Total of Affected Households
Affected Households
State Non- Total Affected
Titleholders Total No.
Titleholders Households/State (%)
Assam 0 158 158 33 20.88
Manipur 23 288 311 80 25.72
 Appendix 11 43

Indigenous Peoples’
Total of Affected Households
Affected Households
State Non- Total Affected
Titleholders Total No.
Titleholders Households/State (%)
Mizoram 110 153 253 251 98.91
Tripura 0 14 14 0 0
Total 133 613 736 364 49.45

5. IPs were considered vulnerable under the project, and additional assistance provisions
were made under the RIPPs. In addition to the compensation at replacement cost for the
affected assets, the project provided additional assistance such as one-time lump sum financial
assistance, preference in project construction activity, and skills training following the RIPPs.
The project disclosed information, and consultations were held with the IP communities
throughout the project life.

6. Institutional arrangements. The Public Works Departments (PWDs) of the respective

state were the implementing agencies (IAs), and the Ministry of Development of North Eastern
Region (MDONER) was the executing agency of the project. The PWDs established PIUs and
were responsible for the implementation of RIPPs. The PIUs were headed by the project
director (PD), with overall responsibility for implementing social safeguards. PDs were
supported by a designated staff of PIU for managing RIPP implementation, and each PIU
recruited a supervision consultant with a social safeguards expert position to assist them.
Manipur and Mizoram PIUs engaged nongovernment organizations (NGOs) to support the RIPP
implementation, whereas Assam and Tripura PIUs implemented RIPPs internally with the CSC
expert's support. The CSC land acquisition and resettlement specialists were mobilized and
supported the EA, and the PMC/PMU social expert functioned as an external monitor for the
project. The institutional arrangement provisions for RIPP implementation are assessed to be
generally adequate.

7. Consultations and grievance redress. The project held consultations during its lifetime
and disclosed the safeguards documents to the stakeholders. Adequate care was taken to
include the women and other vulnerable groups in the consultation process. Each project
established a grievance redressal committee (GRC) to address the concerns of the local
communities and displaced persons, considering the local requirements. The GRC was made
functional and facilitated the resolution of the grievances referred. The GRC mechanism
adopted in the project was effective and conducted meetings whenever required and resolved
the grievances. Efforts were made to resolve issues at the PIU level and were generally
redressed within the time frame recommended in RIPPs. The projects received a few
grievances related to compensation amount, which were resolved amicably. The grievances of
IPs were no different from the others. The PIU bore all the costs incurred in resolving the
complaints. The recommendation of GRC for the payment of compensation was complied with,
and no outstanding issues are pending in the project.

8. Monitoring. Each state regularly submitted social monitoring reports (SMR) with initial
delays. The project states submitted a total of 41 SMRs. Out of 41 SMRs, 10 each by Assam,
Manipur, Tripura, and 11 by Mizoram were submitted and disclosed on ADB website. A due
diligence report was also prepared for a project road in Manipur and was disclosed. The SMRs
confirmed that RIPPs were implemented adequately and satisfactorily. The PMC functioned as
an external monitor for the project, and after the PMC, the PMU reviewed the reports prepared
by the PIUs. At completion, the project categorization remained unchanged for IR and IP.
44 Appendix 11

9. Challenges and lessons. The project was completed successfully, and the suggestions
and guidance provided by the missions from time to time to the project authorities were followed
and implemented. The social safeguards implementation was satisfactory. However, a few
challenges and lessons learned during the implementation are (i) the roads were spread over
four states of northeast India, and covering all four states in one visit by ADB staff was not
possible due to logistical challenges; (ii) the northeast EAs were exposed to ADB safeguards
requirements for the first time, and the capacity was low and different for each PIU; (iii)
availability of local experts in social safeguards was virtually none existent, and experts from
other parts of India were not very committed and proactive in supporting the PIUs. In the future,
multi-state road projects should be avoided as far as possible, enhancing local capacity in
safeguards management through training and preference in engagement in the project and
provision of the junior social expert in the CSC team with long-term inputs rather than
intermittent inputs of a highly experienced expert are a few suggestions to improve safeguards
management.

B. Environment Safeguard Assessment

10. The project was classified as category B for environment in conformance with ADB’s
Safeguard Policy Statement (SPS) (2009) and remained the same until the completion of the
project. During processing of the investment program, an environmental assessment and review
framework was prepared and disclosed on ADB’s website in 2010 to guide and assessment of
the environmental aspects of activities undertaken within the project including the preparation of
initial environmental examinations (IEE) reports during processing of subsequent tranches
under the MFF. At appraisal of project 2, four initial environmental examination reports (one
each for Assam, Manipur, Mizoram, and Tripura) covering all six subprojects under project 2
were prepared and disclosed on ADB’s website in February 2013. The standard operating
procedure (SOP) pertaining to health and safety plan in response to COVID-19 pandemic, as an
addendum to IEE reports were also prepared, cleared, and disclosed on ADB website in June
2020.

11. The IEE reports indicate that the environmental impact would mostly occur during
construction because of carriageway widening, compaction works, quarrying and borrow-area
activities, but no permanent environmental impacts were envisaged. The necessary budget for
implementation of mitigation measures was included in the approved costs of subprojects. The
various aspects associated with implementation of environmental safeguards have been
detailed below:
12. Statutory environmental compliance. The requisite environmental clearances from the
Ministry of Environment, Forest and Climate Change of Assam and Manipur were received by
respective PWDs of above two states for three subprojects4 under the project. The proposed
works were not located (i) inside or near any designated core, or eco-sensitive areas of national
parks, sanctuaries, and biosphere reserves; or any other ecologically/environmentally sensitive
areas; and (ii) there were no rare, threatened, and endangered species (flora and fauna) within
the project areas. A total of 10.55 ha of forest land and 8,285 trees (for 210 trees in Assam,
7,461 trees in Manipur, 184 trees in Mizoram, and 430 trees in Tripura) were affected. The
requisite forest clearance,5 tree-cutting permissions, no objection certificates were also obtained

4
The ECs were obtained for (i) Tamulpur to Udalgiri (AS02 &03) road section in the state of Assam; and (ii) MN
CW1&2: Tupul to Bishnupur and Thoubal to Kasom Khullen in the state of Manipur. ECs were not required for road
section in Mizoram and the road section in Tripura.
5 Forest clearance for the diversion of 9.55 ha land was obtained for the road section in Manipur state, and 0.99 ha
land was obtained for a road section in Mizoram state.
 Appendix 11 45

from the regulatory agencies by the respective PWDs of Assam, Manipur, Mizoram, and Tripura
under the project. The work in forest areas commenced only after obtaining the requisite
permissions. The implementation of the project got delayed in some of the states, due to delay
in obtaining the requisite forest clearances. Further, to accomplish the compensatory
afforestation (in 1:2 ratio), the respective PIUs executed an agreement with the State’s Forest
departments for tree plantation over next 5 years under the project. The compensatory
plantation of 18,8866 trees were planted under the project. The respective contractors from all
four states responsible for different subprojects obtained all requisite permissions/consents
/license (for construction plants, materials, labor license, etc., used) in compliance with
environmental regulations of the country. Further, the renewal of the permissions/consents/
license was also ensured by the respective PWDs until the closure of the project.

13. Institutional arrangements. The environment and social safeguards cell (ESSC) were
established by the respective PWDs (Assam, Manipur, Mizoram, and Tripura) to look after the
implementation, supervision, and monitoring of environmental safeguards measures associated
with the subprojects. The ESSC consists of key officials and support staff of respective PWDs.
An executive engineer rank officer was made as nodal officer by the Manipur and Tripura state
PWDs. A junior engineer was assigned to look after the implementation of the environmental
issues by the Assam and Mizoram states PWD within the PIU. The ESSC were tasked to
coordinate environmental management including implementation of the environment
management plan. An environment specialist of the CSCs, on an intermittent basis, supported
the respective PIUs in the implementation of the ADB-cleared environmental management plans
under the project. In all states throughout the project period, the CSC supported environment
safeguards implementation. All civil works contractors were made to designate one
environment, health and safety officer for implementation and coordination purposes.

14. Implementation of environmental management, monitoring, and reporting.

Environmental management plans (EMPs) were developed and incorporated in respective
bidding/contract documents under the project to mitigate environmental impacts during
construction. ADB conducted training programs during review missions on environmental
safeguards for the project staff (PIUs/CSCs/contractors). Some of the areas of concern were
safety measures at sites, provision of basic amenities to laborer, housekeeping practices, etc.
Gaps related to these concerns were identified and addressed adequately during
implementation of the project. Initially, the frequency of testing of environmental parameters
such as ambient air quality, water quality, and ambient noise levels by the civil works
contractors was limited. However, it improved with regular follow-up by respective PWDs
(Assam, Manipur, Mizoram, and Tripura) and environment specialists, CSCs under the project.
The test results were within permissible limits and reflected in the EMRs prepared by respective
PWDs. Compliance with labor, health and safety and other statutory regulations were ensured
by adhering to the requirements of environmental management plans and as required by the
national and state governments. No occupational or community fatalities were reported during
implementation of the project. Meaningful stakeholders and public consultations were conducted
on a continuous basis during project implementation and supporting details were captured in the
EMRs. The implementation of EMPs was closely monitored by respective PIUs through regular
field visits at construction sites under the Project. A total of 39 semiannual EMRs capturing the
implementation of environmental safeguards from commencement to closure (covering all four

6 Compensatory plantation of 18,886 trees, such as (i) 840 trees in the state of Assam; (ii) 14,916 trees in the state of
Manipur; (iii) 1,840 trees in the state of Mizoram; and (iv)1,290 trees in Tripura were carried out (which is higher
than the required number as provided) under the project.
46 Appendix 11

states) were submitted by the respective executing agencies and cleared and disclosed on ADB
website.7

15. Public consultation and grievance management system. A grievance redress

mechanism (GRM) was established by the respective PWDs (Assam, Manipur, Mizoram, and
Tripura) to handle all environment related public complaints on the upgrading of subprojects.
During implementation, consultations were held regularly with the local communities and
stakeholders to discuss the issues related with project, along with environmental issues and the
details were captured in the EMRs. The grievances registered at site offices related to
environmental aspects were mainly pertaining to removal of debris, and backfilling of open pits,
etc. The Project staff responded to these grievances within a reasonable time and obtained
feedback from the complainants about resolution prior to closing the grievance log. There was
no grievance outstanding on the completion of works under the project.

16. Lessons learned and recommendations. The environmental performance of the

project improved over the period with increased monitoring and coordination by the project staff.
The early deployment of qualified and experienced environment specialist, CSCs could have
resulted in better environmental performance of the project. Further, the envisaged institutional
arrangements for environmental safeguards should be fully functional from commencement to
closure of the project.

17. Status of compliance with environmental loan covenants. The loan covenants
pertaining to environmental safeguards were complied with. The status of loan covenants is
presented in Appendix 12.

7
https://www.adb.org/projects/37143-033/main
 Appendix 12 47

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Covenant Reference Compliance Status
The Borrower shall cause the Project Complied with.
Loan
Executing Agencies to carry out the The borrower and the executing
Agreement,
Project with due diligence and efficiency agencies carried out the project in
Article IV,
and in conformity with sound applicable conformity with the sound practices in
Section
technical, financial, business, and roads development.
4.01(a)
development practices.
Complied with.
In the carrying out of the Project and
Loan The borrower, through the project
operation of the Subprojects’ facilities,
Agreement, executing agencies, carried out the
the Borrower shall perform, or cause to
Article IV, operation of the project’s facilities in
be performed, all obligations set forth in
Section conformity with all obligations indicated
Schedule 5 to this Loan Agreement and
4.01(b) in Schedule 5 of the loan and project
the Project Agreements.
agreements.
Partially complied with.
The borrower and the states made
available as needed with the funds
The Borrower shall make available to the (with some delay), facilities, services,
Project Executing Agencies, promptly as Loan land, and other resources, as required.
needed, the funds, facilities, services Agreement, The delay in fund release was due to
and other resources, as required, in Article IV, the involvement of multiple channels
addition to the proceeds of the Loan, for Section 4.02 and time-consuming processes in
the carrying out of the Project. MODNER and state governments for
the approval and release of funds to the
PIUs for onward payment to the
contractors.
The Borrower and the Project Executing Complied with.
Agencies shall ensure that the activities The borrower ensured through the
Loan
of their departments and agencies with states that the activities of its
Agreement,
respect to the carrying out of the Project departments were conducted and
Article IV,
are conducted and coordinated in coordinated in accordance with sound
Section 4.03
accordance with sound administrative administrative policies and procedures.
policies and procedures.
The Borrower shall enable ADB's Loan Complied with.
representatives to inspect the Project, Agreement, ADB representatives during periodic
the Goods and Works, and any relevant Article IV, review missions had visited to inspect
records and documents. Section 4.04 all the project related activities.
Insofar as it relates to the Project, the Complied with.
Borrower shall take all actions which The Borrower and project states
shall be necessary on its part to enable performed all their obligations under the
Loan
the Project Executing Agencies to project agreements.
Agreement,
perform their obligations under the
Article IV,
Project Agreements, and shall not take
Section 4.05
or permit any action which would
interfere with the performance of such
obligations.
Insofar as it relates to the Project, the Loan Complied with.
Borrower shall exercise its rights under Agreement, Borrower exercised its rights under the
 48 Appendix 12

Covenant Reference Compliance Status

the Financing Arrangements in such a Article IV, Financing Arrangements in such a
manner as to protect the interests of the Section manner to protect the interests of the
Borrower and ADB and to accomplish 4.06(a) Borrower and ADB to accomplish the
the purposes of the Loan. purposes of the loan.
Insofar as it relates to the Project, no Complied with.
Loan
rights or obligations under the Financing No rights or obligations under the
Agreement,
Arrangements shall be assigned, financing arrangements were assigned,
Article IV,
amended, abrogated or waived without amended, abrogated, or waived without
Section
prior notice to ADB. prior notice to ADB by the project
4.06(b)
states.
Goods and Works
Except as ADB may otherwise agree, Complied with.
Goods and Works shall only be procured Loan The procurement of works was carried
on the basis of the methods of Agreement, out through International Competitive
procurement set forth below: (a) Schedule 4 Bidding and no goods were procured.
International Competitive Bidding for Para. 3
Works; and (b) Shopping for Goods.
The methods of procurement are subject Complied with.
to, among other things, the detailed The procurement was carried out as
arrangements and threshold values set per the detailed arrangements set forth
Loan
forth in the Procurement Plan. The in the Procurement Plan.
Agreement,
Borrower may only modify the methods
Schedule 4
of procurement or threshold values with
Para. 4
the prior agreement of ADB, and
modifications must be set out in updates
to the Procurement Plan.
Conditions for Award of Contract; Commencement of Works
The Borrower shall cause the Project Complied with.
Executing Agencies to ensure that: (a)
no Works contract is awarded for a (a) The States’ Project Executing
Subproject that involves environmental Agencies ensured that all works
impacts until the relevant Project were awarded after incorporating the
Executing Agency has incorporated the environmental mitigation works in the
relevant provisions from the EMP into EMP of the works contract.
the Works contract; (b) no Works
contract is awarded for a Subproject that (b) The commencement of civil
involves involuntary resettlement Loan works was only after submitting the
impacts until the relevant Project Agreement, final RP and getting the approval
Executing Agency has prepared and Schedule 4 from the ADB.
submitted to ADB the final RP for such Para. 5
Subproject based on the Subproject's (c) The commencement of civil
detailed design, and obtained ADB's works was only after submitting the
clearance of such RP; (c) no Works final IPP and getting the approval
contract is awarded for a Subproject that from the ADB.
involves impacts on indigenous peoples
until the relevant Project Executing (d) The commencement of civil
Agency has prepared and submitted to works was only after getting the
ADB the final IPP and obtained ADB's environmental clearances if required
clearance of such IPP; and (d) no and obtained the final approval of (i)
 Appendix 12 49

Covenant Reference Compliance Status

commencement of Works is allowed the IEE from ADB; and (ii)
under any Subproject that involves environmental clearance, including
environmental impacts and requires approval of the environmental
environmental clearances, until the assessment report, from the State
relevant Project Executing Agency has Environmental Impact Assessment
obtained the final approval of (i) the IEE Authority.
from ADB; and (ii) environmental
clearance, including approval of the
environmental assessment report, from
the State Environmental Impact
Assessment Authority.
Consulting Services
Except as ADB may otherwise agree, Complied with.
Loan
the Project Executing Agencies shall The Consulting Services were engaged
Agreement,
apply quality- and cost-based selection by Borrower and States using quality-
Schedule 4
for selecting and engaging Consulting and cost- based selection.
Para. 6
Services.
Industrial or Intellectual Property Rights
The Project Executing Agencies shall Complied with.
ensure that all Goods and Works The States ensured that all Works
procured (including without limitation all procured did not violated or infringed
computer hardware, software and Loan any industrial property or intellectual
systems, whether separately procured or Agreement, property right or claim of any third party.
incorporated within other goods and Schedule 4
services procured) do not violate or Para. 7(a)
infringe any industrial property or
intellectual property right or claim of any
third party.
The Project Executing Agencies shall Complied with.
ensure that all contracts for the The states ensured that all contracts for
procurement of Goods and Works the procurement of Works contained
Loan
contain appropriate representations, appropriate representations, warranties
Agreement,
warranties and, if appropriate, and, indemnities from the contractor
Schedule 4
indemnities from the contractor or with respect to the matters referred to in
Para. 7(b)
supplier with respect to the matters subparagraph (a) of this paragraph
referred to in subparagraph (a) of this
paragraph.
The Project Executing Agencies shall Complied with.
ensure that all ADB-financed contracts The states ensured that all ADB-
with consultants contain appropriate financed contracts with consultants
representations, warranties and, if Loan contained appropriate representations,
appropriate, indemnities from the Agreement, warranties and, if appropriate,
consultants to ensure that the Consulting Schedule 4 indemnities from the consultants to
Services provided do not violate or Para. 8 ensure that the consulting services
infringe any industrial property or provided did not violated or infringed
intellectual property right or claim of any any industrial property or intellectual
third party. property right or claim of any third party.
ADB’s Review of Procurement Decisions
Contracts procured under international Loan Complied with.
 50 Appendix 12

Covenant Reference Compliance Status

competitive bidding procedures and Agreement,
contracts for Consulting Services shall Schedule 4 The contracts were procured under
be subject to prior review by ADB, Para. 9 international competitive bidding
unless otherwise agreed between the procedures, and the consulting services
Borrower, the Project Executing contracts were reviewed and approved
Agencies and ADB and set forth in the by ADB.
Procurement Plan.
Implementation Arrangements
The Borrower and the Project Executing Complied with.
Agencies shall ensure that the Project is The borrower, states, and SEAs
implemented in accordance with the implemented the project in accordance
detailed arrangements set forth in the with the detailed arrangements set forth
FFA, the FAM and this Loan Agreement. in the FFA, and the updated FAM and
Any subsequent change to the FFA or Loan Loan Agreement.
FAM shall become effective only after Agreement,
approval of such change by the Schedule 5
Borrower, the Project Executing Para. 1
Agencies and ADB, as applicable. In the
event of any discrepancy between the
FFA or the FAM and this Loan
Agreement, the provisions of this Loan
Agreement shall prevail.
The Borrower and the Project Executing Complied with.
Agencies shall ensure that towards The borrower and the states ensured
smooth implementation of the Project, Loan smooth implementation of the project,
grievances if any from stakeholders, Agreement, grievances if any from stakeholders,
relating to any Subproject Schedule 5 relating to any subproject
implementation or use of funds under Para. 2 implementation or use of funds under
the Project are addressed effectively and the project are addressed effectively
efficiently. and efficiently.
Subproject Approval and Implementation
Complied with.
The Project Executing Agencies shall
Each project state ensured that all
ensure that all Subprojects are selected, Loan
Subprojects were selected, processed
processed for approval, and Agreement,
approved, and implemented in
implemented in accordance with the Schedule 5
accordance with the criteria and
criteria and procedures set out in Para. 3
procedures set out in Schedule 4 to the
Schedule 4 to the FFA.
FFA.
Safeguards Environment
The Borrower shall cause the relevant Complied with.
Project Executing Agency to ensure that The borrower and the states ensured
the preparation, design, construction, that the preparation, design,
implementation and operation of each Loan construction, implementation, and
Subproject comply with (i) all applicable Agreement, operation of each subproject complied
laws and regulations of the Borrower Schedule 5 with (i) all applicable laws and
and the relevant State relating to Para. 4 regulations of the borrower and the
environment, health, and safety; (ii) the relevant state relating to environment,
Environmental Safeguards; (iii) the health, and safety; (ii) the
EARF; and (iv) all measures and Environmental Safeguards; (iii) the
 Appendix 12 51

Covenant Reference Compliance Status

requirements set forth in the relevant EARF; and (iv) all measures and
IEE and EMP, and any corrective or requirements set forth in the relevant
preventative actions set forth in a IEE and EMP, and any corrective or
Safeguards Monitoring Report. preventative actions set forth in the
Safeguards Monitoring Report.
Land Acquisition and Involuntary Resettlement
Complied with.
The Borrower shall cause the relevant
The borrower and the states ensured
Project Executing Agency to ensure that
that all land and all rights-of-way
all land and all rights-of-way required for
required for a subproject are made
a Subproject are made available to the
available to the works contractor in
Works contractor in accordance with the
accordance with the schedule agreed
schedule agreed under the related
under the related works contract and all
Works contract and all land acquisition
land acquisition and resettlement
and resettlement activities are Loan
activities are implemented in
implemented in compliance with (a) all Agreement,
compliance with (a) all applicable laws
applicable laws and regulations of the Schedule 5
and regulations of the borrower and the
Borrower and the relevant State relating Para. 5
relevant state on land acquisition and
to land acquisition and involuntary
involuntary resettlement; (b) the
resettlement; (b) the Involuntary
Involuntary Resettlement Safeguards;
Resettlement Safeguards; (c) the RF;
(c) the RF; and (d) all measures and
and (d) all measures and requirements
requirements set forth in the relevant
set forth in the relevant RP, and any
RP, and any corrective or preventative
corrective or preventative actions set
actions set forth in the Safeguards
forth in a Safeguards Monitoring Report.
Monitoring Report.
Complied with.
Without limiting the application of the
Without limiting the application of the
Involuntary Resettlement Safeguards,
Involuntary Resettlement Safeguards,
the RF or the RPs, the Borrower shall
the RF or the RPs, the project
cause the relevant Project Executing
executing agency to confirmed that no
Agency to ensure that no physical or
physical or economic displacement
economic displacement takes place in Loan
taken place in connection with any
connection with any Subproject until: (a) Agreement,
subproject until (a) compensation and
compensation and other entitlements Schedule 5
other entitlements have been provided
have been provided to affected people in Para. 6
to affected people in accordance with
accordance with the relevant RP; and (b)
the relevant RP; and (b) a
a comprehensive income and livelihood
comprehensive income and livelihood
restoration program has been
restoration program has been
established in accordance with the
established in accordance with the
relevant RP.
relevant RP.
Indigenous Peoples
In the event of any Subproject involving Complied with.
indigenous peoples, the Borrower shall The borrower and the states ensured
cause the relevant Project Executing Loan that the preparation, design,
Agency to ensure that the preparation, Agreement, construction, implementation and
design, construction, implementation Schedule 5 operation of each subproject complied
and operation of each Subproject Para. 7 with (a) all applicable laws and
comply with (a) all applicable laws and regulations of the borrower and the
regulations of the Borrower and the relevant state relating to indigenous
 52 Appendix 12

Covenant Reference Compliance Status

relevant State relating to indigenous peoples; (b) the Indigenous Peoples
peoples; (b) the Indigenous Peoples Safeguards; (c) the IPPF; and (d) all
Safeguards; (c) the IPPF; and (d) all measures and requirements set forth in
measures and requirements set forth in the relevant IPP, and any corrective or
the relevant IPP, and any corrective or preventative actions set forth in a
preventative actions set forth in a Safeguards Monitoring Report.
Safeguards Monitoring Report.
Human and Financial Resources to Implement Safeguards Requirements
The Borrower shall cause the relevant Complied with.
Project Executing Agency to ensure that Loan The borrower and the states ensured
all necessary budgetary and human Agreement, that all necessary budgetary and
resources to fully implement the EMPs, Schedule 5 human resources to fully implement the
the RPs and the IPPs as required, are Para. 8(a) EMPs, the RPs, and the IPPs as
made available. required, are made available.
Each Project Executing Agency shall Loan Complied with.
designate at least one expert to Agreement, Each state has designated the required
supervise implementation of the EMPs Schedule 5 staff to supervise the implementation of
and RPs for the Subprojects in its State. Para. 8(b) the EMPs and RPs for the subprojects.
Safeguards – Related Provisions in Bidding Documents and Works Contracts
The Borrower shall cause the relevant Complied with.
Project Executing Agency to ensure that The borrower and the states ensured
all bidding documents and contracts for that all bidding documents and
Works contain provisions that require contracts for works contain provisions
contractors to: (a) comply with the that require contractors to: (a) comply
measures and requirements relevant to with the measures and requirements
the contractor set forth in the relevant relevant to the contractor set forth in the
IEE, EMP, RP and IPP (to the extent relevant IEE, EMP, RP, and IPP (to the
they concern impacts on affected people extent they concern impacts on affected
during construction), and any corrective people during construction), and any
or preventative actions set out in a corrective or preventative actions set
Safeguards Monitoring Report; (b) make out in a Safeguards Monitoring Report;
available a budget for all such (b) made available a budget for all such
environmental and social measures; (c) Loan environmental and social measures; (c)
provide the Project Executing Agency Agreement, provided the project executing agency
with a written notice of any unanticipated Schedule 5 with a written notice of any
environmental, resettlement or Para. 9 unanticipated environmental,
indigenous peoples risks or impacts that resettlement, or indigenous peoples
arise during construction, risks or impacts that may arise during
implementation or operation of the construction, implementation, or
Project that were not considered in the operation of the project that were not
relevant IEE, EMP, RP or IPP; (d) considered in the relevant IEE, EMP,
adequately record the condition of roads, RP or IPP; (d) adequately recorded the
agricultural land and other infrastructure condition of roads, agricultural land,
prior to starting to transport materials and other infrastructure prior to starting
and construction; and (e) fully reinstate to transport materials and construction;
pathways, other local infrastructure, and and (e) fully reinstated pathways, other
agricultural land to at least their pre- local infrastructure, and agricultural
project condition upon the completion of land to at least their pre-project
construction. condition upon the completion of
 Appendix 12 53

Covenant Reference Compliance Status

construction.
Safeguards Monitoring and Reporting
The Borrower shall cause the Project Complied with.
Executing Agencies to ensure following: The borrower and the states ensured
(a) submit semi-annual Safeguards the following: (a) submitted semiannual
Monitoring Reports to ADB and disclose Safeguards Monitoring Reports to ADB
relevant information from such reports to and disclosed that (b) no
affected persons promptly upon environmental and/or social risks and
submission; (b) if any unanticipated impacts have arisen during
environmental and/or social risks and construction, implementation, or
impacts arise during construction, operation of the project that were not
implementation or operation of the considered in any IEE, EMP, RP, or
Project that were not considered in any IPP (as applicable); (c) engaged
IEE, EMP, RP or IPP (as applicable), qualified and experienced
promptly inform ADB of the occurrence nongovernment organizations under a
of such risks or impacts, with detailed selection process and terms of
description of the event and proposed reference acceptable to ADB, to verify
Loan
corrective action plan; (c) no later than information produced through the
Agreement,
three months from the commencement project monitoring process for
Schedule 5
of RP implementation of the first resettlement, environment, and
Para. 10
Subproject, engage qualified and indigenous peoples (if any), and
experienced external experts or qualified facilitated the carrying out of any
non-governmental organizations under a verification activities by such external
selection process and terms of reference experts; and (d) no breach of
acceptable to ADB, to verify information compliance were observed during the
produced through the project monitoring project duration with the measures and
process for resettlement, environment requirements set forth in any EMP, RP,
and indigenous peoples (if any), and or IPP.
facilitate the carrying out of any
verification activities by such external
experts; and (d) report any breach of
compliance with the measures and
requirements set forth in any EMP, RP
or IPP promptly after becoming aware of
the breach.
Prohibited List of Investments
The Borrower shall cause the Project Complied with.
Executing Agencies to ensure that no The borrower and the states ensured
Loan
proceeds of the Loan are used to that no proceeds of the loan were used
Agreement,
finance any activity included in the list of to finance any activity included in the
Schedule 5
prohibited investment activities provided list of prohibited investment activities
Para 11
in Appendix 5 of the Safeguard Policy provided in Appendix 5 of the
Statement. Safeguard Policy Statement.
Labor Standards
The Borrower shall cause the Project Complied with.
Loan
Executing Agencies to ensure that the The borrower and the states ensured
Agreement,
Works contracts under the Project follow that civil works contracts under the
Schedule 5
all applicable labor laws of the Borrower project followed all applicable labor
Para. 12
and the State and that these further laws of the borrower and the state; and
 54 Appendix 12

Covenant Reference Compliance Status

include provisions to the effect that (i) carried out HIV/AIDS awareness
contractors; (i) carry out HIV/AIDS programs and disseminated information
awareness programs for labor and at worksites on the risks of sexually
disseminate information at worksites on transmitted diseases and HIV/AIDS as
risks of sexually transmitted diseases part of health and safety measures for
and HIV/AIDS as part of health and those employed during construction;
safety measures for those employed and (ii) followed and implemented all
during construction; and (ii) follow and statutory provisions on labor (including
implement all statutory provisions on not employing or using children as
labor (including not employing or using labor, equal pay for equal work), health,
children as labor, equal pay for equal safety, welfare, sanitation, and working
work), health, safety, welfare, sanitation, conditions. The contract agreements
and working conditions. Such contracts included clauses for termination in case
shall also include clauses for termination of any breach of the stated provisions
in case of any breach of the stated by the contractors.
provisions by the contractors.
Communications and Participation
The Borrower and the States, through Complied with.
the SEAs, shall ensure that the Project is The borrower and the states, ensured
Loan
undertaken in conformity with the that the project is undertaken in
Agreement,
communication strategy as agreed conformity with the communication
Schedule 5
between ADB, the Borrower, the States, strategy as agreed between ADB, the
Para. 13
and the Project Executing Agencies, and borrower, the states, and the project
referred in the FAM. executing agencies.
Governance and Anticorruption
Complied with.
The Borrower, the States and the Project
The borrower, the states and the
Executing Agencies shall comply with
project executing agencies complied
ADB’s Anticorruption Policy (1988, as Loan
with ADB’s Anticorruption Policy (1988,
amended to date) and shall allow and Agreement,
as amended to date) and allowed and
assist ADB's representatives to carry out Schedule 5
assisted ADB's representatives to carry
random spot checks on the work in Para. 14
out random spot checks on the work in
progress and utilization of funds for the
progress and utilization of funds for the
Project.
project.
The Borrower, the States and the Project Complied with.
Executing Agencies shall ensure that the The borrower and the states ensured
anticorruption provisions acceptable to that the anticorruption provisions
ADB, the Borrower, the States and the acceptable to ADB and the borrower
Project Executing Agencies are included were included in all bidding documents
in all bidding documents and contracts Loan and contracts, including provisions
financed by ADB in connection with the Agreement, specifying the right of ADB to audit and
Project, including provisions specifying Schedule 5 examine the records and accounts of
the right of ADB to review and examine Para. 15 the SEA’s and PIU’s and all
the records and accounts of the States contractors, suppliers, consultants, and
and the Project Executing Agencies and other service providers as they relate to
all contractors, suppliers, consultants, the project.
and other service providers as they
relate to the Project.
Gender and Development
 Appendix 12 55

Covenant Reference Compliance Status

Complied with.
Each Project Executing Agency shall On Gender and Development.
encourage civil works contractors (i) to Each SEA ensured that the PIUs
engage women workers as wage-labor encouraged civil works contractors (i) to
Loan
depending on their skills; (ii) to the engage women workers as wage-labor
Agreement,
extent possible assign to women the bio- depending on their skills; (ii) to the
Schedule 5
engineering works for road rehabilitation extent possible, assigned to women the
Para. 16
and maintenance; and (iii) ensure equal bio-engineering works for road
wages for equal work between men and rehabilitation and maintenance; and (iii)
women. ensured equal wages for equal work
between men and women.
Counterpart Support
The Borrower and each State shall Partially complied with.
provide, as necessary, respective Each state provided, as necessary,
counterpart staff, land facilities, and respective counterpart staff, land
counterpart funding for the Project and facilities, and counterpart funding (with
Subprojects in accordance with the delay) for the project and subprojects,
financing plan, cost of making land the cost of making land available for the
Loan
available for the Subprojects and subprojects, and assistance,
Agreement,
assistance, and implementation and implementation, and monitoring of RPs
Schedule 5
monitoring of EMPs, RPs and IPPs and EMP (including unforeseen
Para. 17
(including unforeseen expenses beyond expenses beyond the estimates), utility
the estimates), utility relocation, road relocation, road maintenance, and
maintenance, and general Project general project management expenses
management expenses in a timely through approved annual budget
manner through approved annual budget allocations.
allocations.
Road Maintenance Funding
Complied with.
Each State shall ensure that adequate
Loan Each state is providing adequate
and timely funding is provided for
Agreement, funding and timely funding is provided
maintenance of Investment Subproject
Schedule 5 for the maintenance of the subproject
roads for at least 5 years after
Para. 18 roads for at least 5 years after
construction completion.
construction completion.
The Borrower and each State shall Complied with.
ensure that funding options for State The borrower and each state have
Loan
Road maintenance expenditures in the provided the funding mechanism before
Agreement,
States are reviewed prior to 22 October 22 October 2015.
Schedule 5
2014, and a decision on the funding
Para. 19
mechanism is made by each State prior
to 22 October 2015.
Road Safety
The Borrower and each State shall Complied with.
ensure that a road safety program with The borrower and each State ensured a
Loan
coordinated engineering, enforcement road safety program with coordinated
Agreement,
and education components to be engineering, enforcement, and
Schedule 5
developed under the Institutional education components under the
Para. 20
Development and Capacity Building Institutional Development and Capacity
(IDCB) Technical Assistance is initiated Building (IDCB) Technical Assistance
 56 Appendix 12

Covenant Reference Compliance Status

by 30 December 2014. before 30 December 2014.
Institutional Development and Capacity Building
Each State shall implement measures Complied with.
included in the institutional development Loan Each state implemented measures in
and capacity building action plans Agreement, the institutional development and
(attached as Table 2 to Schedule 1 to Schedule 5 capacity-building action plans in a
the FFA) for the respective States in a Para. 21 timely manner.
timely manner.
Complied with.
MDONER and Assam shall carry out the Project
MDONER and Assam carried out the
Project with due diligence and efficiency, Agreement-
project with due diligence and
and in conformity with sound applicable Assam,
efficiency, and in conformity with sound
administrative, financial, engineering, Article II
applicable administrative, financial,
environmental and roads development Section
engineering, environmental, and roads
practices. 2.01(a)
development practices.
In the carrying out of the Project and Complied with.
Project
operation of the Project facilities, MDONER and Assam performed all
Agreement-
MDONER and Assam shall perform all obligations set forth in the Loan
Assam,
obligations set forth in the Loan Agreement to the extent that they are
Article II
Agreement to the extent that they are applicable to MDONER and Assam,
Section
applicable to MDONER and Assam respectively.
2.01(b)
respectively.
Partially complied with.
MDONER and Assam shall make
Project MDONER and Assam made available
available, promptly as needed, the
Agreement- as needed, the funds (with delay),
funds, facilities, services, land and other
Assam, facilities, services, land, and other
resources as required, in addition to the
Article II resources as required, in addition to the
proceeds of the Loan, for the carrying
Section 2.02 proceeds of the loan, for carrying out
out of the Project.
the project.
In the carrying out of the Project, Project Complied with.
MDONER and Assam shall employ Agreement- MDONER and Assam employed
competent and qualified consultants and Assam, competent and qualified consultants
contractors, acceptable to ADB, to an Article II and contractors, acceptable and on
extent and upon terms and conditions Section conditions satisfactory to ADB.
satisfactory to ADB. 2.03(a)
Except as ADB may otherwise agree, Complied with.
MDONER and Assam shall procure all MDONER and Assam procured all
items of expenditures to be financed out items of expenditures to be financed
of the proceeds of the Loan in out of the proceeds of the loan in
Project
accordance with the provisions of accordance with the provisions of
Agreement-
Schedule 4 to the Loan Agreement. ADB Schedule 4 in the Loan Agreement.
Assam,
may refuse to finance a contract where
Article II
any such item has not been procured
Section
under procedures substantially in
2.03(b)
accordance with those agreed between
the Borrower and ADB or where the
terms and conditions of the contract are
not satisfactory to ADB.
MDONER and Assam shall carry out the Project Complied with.
 Appendix 12 57

Covenant Reference Compliance Status

Project in accordance with plans, design Agreement- MDONER and Assam submitted plans,
standards, specifications, work Assam, design standards, specifications, work
schedules and construction methods Article II schedules, and construction methods
acceptable to ADB. MDONER and Section 2.04 acceptable to ADB.
Assam shall furnish, or cause to be
furnished, to ADB, promptly after their
preparation, such plans, design
standards, specifications and work
schedules, and any material
modifications subsequently made
therein, in such detail as ADB shall
reasonably request.
Assam shall take out and maintain with Complied with.
Project
responsible insurers, or make other Assam made arrangements for the
Agreement-
arrangements satisfactory to ADB for, insurance of the project facilities that is
Assam,
insurance of the Project facilities to such satisfactory to ADB, to such extent and
Article II
extent and against such risks and in against such risks, and consistent with
Section
such amounts as shall be consistent with sound practice.
2.05(a)
sound practice.
Without limiting the generality of the Complied with.
foregoing, Assam undertakes to insure, No goods were imported for the project.
or cause to be insured, the Goods to be Project
imported for the Project against hazards Agreement-
incident to the acquisition, transportation Assam,
and delivery thereof to the place of use Article II
or installation, and for such insurance Section
any indemnity shall be payable in a 2.05(b)
currency freely usable to replace or
repair such Goods.
MDONER and Assam shall maintain, or Complied with.
cause to be maintained, records and MDONER and Assam arranged the
accounts adequate to identify the items records and accounts adequately to
of expenditure financed out of the Project identify the items of expenditure that
proceeds of the Loan, to disclose the Agreement- were financed out of the proceeds of
use thereof in the Project, to record the Assam, the loan.
progress of the Project (including the Article II
cost thereof) and to reflect, in Section 2.06
accordance with consistently maintained
sound accounting principles, its
operations and financial condition.
Project Complied with.
ADB, MDONER and Assam shall Agreement- ADB, MDONER, and Assam
cooperate fully to ensure that the Assam, cooperated fully to ensure that the
purposes of the Loan will be Article II purposes of the loan are accomplished.
accomplished. Section
2.07(a)
MDONER and Assam shall promptly Project Complied with.
inform ADB of any condition which Agreement- During the project implementation, no
interferes with, or threatens to interfere Assam, such condition arose that interfered with
 58 Appendix 12

Covenant Reference Compliance Status

with, the progress of the Project, the Article II the progress of the project, and the
performance of their respective Section performance of the respective
obligations under this Project Agreement 2.07(b) obligations under this project
or the Financing Arrangements, or the agreement.
accomplishment of the purposes of the
Loan.
ADB, MDONER and Assam shall from Project Complied with.
time to time, at the request of either Agreement- ADB, MDONER, and Assam
party, exchange views through their Assam, exchanged the views through their
representatives with regard to any Article II representatives on matters relating to
matters relating to the Project, Section the project through TPRMs and during
MDONER, Assam and the Loan. 2.07(c) ADB missions to the state.
MDONER and Assam shall furnish to Complied with.
ADB all such reports and information as MDONER and Assam furnished to ADB
ADB shall reasonably request all such reports and information
Project
concerning (i) the Loan and the concerning (i) the loan and the
Agreement-
expenditure of the proceeds thereof; (ii) expenditure of the proceeds thereof; (ii)
Assam,
the items of expenditure financed out of the items of expenditure financed out of
Article II
such proceeds; (iii) the Project; (iv) the such proceeds; (iii) the project; (iv) the
Section
administration, operations and financial administration, operations, and financial
2.08(a)
condition of MDONER and Assam; and condition of MDONER and Assam; and
(v) any other matters relating to the (v) any other matters relating to the
purposes of the Loan. purposes of the loan.
Without limiting the generality of the Complied with.
foregoing, MDONER and Assam shall MDONER and Assam furnished to ADB
furnish to ADB quarterly reports on the quarterly reports on the execution of the
execution of the Project and on the project and on the operation and
operation and management of the management of the project facilities,
Project facilities. Such reports shall be Project including progress made and problems
submitted in such form and in such detail Agreement- encountered during the quarter under
and within such a period as ADB shall Assam, review, the steps taken or proposed to
reasonably request, and shall indicate, Article II be taken to remedy these problems,
among other things, progress made and Section and the proposed program of activities
problems encountered during the quarter 2.08(b) and expected progress during the
under review, steps taken or proposed to following quarter.
be taken to remedy these problems, and
proposed program of activities and
expected progress during the following
quarter.
Promptly after physical completion of the Complied with.
Project, but in any event not later than 3 Assam furnished to ADB a report on the
months thereafter or such later date as Project execution and initial operation of the
ADB may agree for this purpose, Agreement- project, including its cost, the
MDONER and Assam shall prepare and Assam, performance by MDONER and Assam
furnish to ADB a report, in such form and Article II of their respective obligations under this
in such detail as ADB shall reasonably Section project agreement and the
request, on the execution and initial 2.08(c) accomplishment of the purposes of the
operation of the Project, including its loan.
cost, the performance by MDONER and
 Appendix 12 59

Covenant Reference Compliance Status

Assam of their respective obligations
under this Project Agreement and the
accomplishment of the purposes of the
Loan.
Partially complied with.
MDONER and Assam shall (i) maintain
MDONER and Assam (i) maintained
separate accounts and records for the
separate accounts for the project
Project and the Subprojects; (ii) prepare
(including the subprojects); (ii) had such
annual financial statements for the
accounts and related financial
Project and the Subprojects in
statements (balance sheet, statement
accordance with accounting principles
of income and expenses, and related
acceptable to ADB; (iii) have such
statements) audited annually, in
financial statements audited annually by
accordance with appropriate auditing
independent auditors whose
standards consistently applied by
qualifications, experience and terms of
independent auditors whose
reference are acceptable to ADB, in
qualifications, experience, and terms of
accordance with international standards
reference are acceptable to ADB; and
for auditing or the national equivalent
(iii) furnished to ADB with some delay,
acceptable to ADB; (iv) as part of each
Project after the close of the fiscal year to
such audit, have the auditors prepare a
Agreement- which they relate, certified copies of
report (which includes the auditors’
Assam, such audited accounts and financial
opinion on the financial statements, use
Article II statements and the report of the
of the Loan proceeds and compliance
Section auditors relating thereto (including the
with the financial covenants of the Loan
2.09(a) auditors’ opinion on the use of the loan
Agreement and Project Agreement and
proceeds and compliance with the
a management letter (which sets out the
financial covenants of the loan and
deficiencies in the internal control of the
project agreements, as well as on the
Project that were identified in the course
use of the procedures for statement of
of the audit, if any); and (v) furnish to
expenditures), all in the English
ADB, no later than 6 months after the
language. MDONER and Assam
close of the fiscal year to which they
furnished to ADB further information on
relate, copies of such audited financial
such accounts and financial statements
statements, audit report and
and the audit thereof as ADB from time-
management letter, all in the English
to-time reasonably request. Apart from
language, and such other information
delayed submission of some APFSs,
concerning these documents and the
reconciliation issues with ADB
audit thereof as ADB shall from time to
disbursement records in the final APFS
time reasonably request.
were also noticed.
ADB shall disclose the annual audited Project Partially complied with.
financial statements for the Project and Agreement- ADB disclosed the annual audited
the opinion of the auditors on the Assam, financial statements for the project.
financial statements within 30 days of Article II
the date of their receipt by posting them Section
on ADB’s website. 2.09(b)
MDONER and Assam shall enable ADB, Project Complied with.
upon ADB's request, to discuss the Agreement- MDONER and Assam facilitated the
financial statements for the Project and Assam, discussion, upon ADB's request with
the Subprojects and its financial affairs Article II the auditors appointed, on the financial
where they relate to the Project with the Section statements for the project and the
 60 Appendix 12

Covenant Reference Compliance Status

auditors appointed by MDONER and 2.09(c) subprojects and its financial affairs
Assam pursuant to paragraph (a)(iii) of where they relate to the project, and
this Section, and shall authorize and authorized, if required, any
require any representative of such representative of such auditors to
auditors to participate in any such participate in any such discussions
discussions requested by ADB. This is requested by ADB.
provided that such discussions shall be
conducted only in the presence of an
authorized officer of MDONER and
Assam, unless MDONER and Assam
shall otherwise agree.
Project Complied with.
MDONER and Assam shall enable
Agreement- MDONER and Assam enabled ADB's
ADB's representatives to inspect the
Assam, representatives to inspect the project,
Project, the Goods and Works and any
Article II the Goods and Works and any relevant
relevant records and documents.
Section 2.10 records and documents.
Complied with.
MDONER and Assam shall, promptly as
MDONER and Assam have taken all
required, take all action within their Project
action within their respective powers to
respective powers to carry on their Agreement-
carry on their operations, and to
operations, and to acquire, maintain and Assam,
acquire, maintain, and renew all rights,
renew all rights, properties, powers, Article II
properties, powers, privileges, and
privileges and franchises which are Section
franchises that are necessary in
necessary in the carrying out of the 2.11(a)
carrying out the project or the
Project or the Subprojects.
subprojects.
Complied with.
MDONER and Assam shall at all times
MDONER and Assam, at all times,
carry out the Project and Subprojects in Project
carried out the project and subprojects
accordance with sound administrative, Agreement-
in accordance with sound
financial, engineering, environmental Assam,
administrative, financial, engineering,
and roads development practices, and Article II
environmental and roads development
under the supervision of competent and Section
practices, and under the supervision of
experienced management and 2.11(b)
competent and experienced
personnel.
management and personnel.
Complied with.
In relation to the Project, Assam shall at
Assam, at all times, operated and
all times operate and maintain its assets,
Project maintained its assets, equipment, and
equipment and other property, and from
Agreement- other property, and from time to time,
time to time, promptly as needed, make
Assam, promptly as needed, make all
all necessary repairs and renewals
Article II necessary repairs and renewals in
thereof, all in accordance with sound
Section accordance with sound administrative,
administrative, financial, engineering,
2.11(c) financial, engineering, environmental,
environmental, roads development,
roads development, maintenance, and
maintenance and operational practices.
operational practices.
Except as ADB may otherwise agree, Project Complied with.
Assam shall not sell, lease or otherwise Agreement- Assam has not sold, leased, or
dispose of any of its assets which shall Assam, otherwise disposed of any of its assets
be required for the efficient carrying on Article II that required the efficient carrying out of
of its operations or the disposal of which Section 2.12 its operations, or the disposal of which
 Appendix 12 61

Covenant Reference Compliance Status

may prejudice its ability to perform may prejudice its ability to perform
satisfactorily any of its obligations under satisfactorily any of its obligations under
this Project Agreement. this project agreement.
Except as ADB may otherwise agree, Complied with.
MDONER and Assam shall apply the MDONER and Assam applied the
proceeds of the Loan to the financing of proceeds of the loan to the financing of
Project
expenditures on the Project in expenditures on the project in
Agreement-
accordance with the provisions of the accordance with the provisions of the
Assam,
Loan Agreement and this Project Loan Agreement and Project
Article II
Agreement, and shall ensure that all Agreement, and ensured that all items
Section 2.13
items of expenditures financed out of of expenditures financed out of such
such proceeds are used exclusively in proceeds are used exclusively in
the carrying out of the Project. carrying out the project.
Except as ADB may otherwise agree, Complied with.
MDONER and Assam shall duly perform MDONER and Assam performed all
all their respective obligations under the their respective obligations under the
Project
Financing Arrangements, and shall not financing arrangements, and not taken
Agreement-
take, or concur in, any action which any action that would have the effect of
Assam,
would have the effect of assigning, assigning, amending, abrogating, or
Article II
amending, abrogating or waiving any waiving any rights or obligations of the
Section 2.14
rights or obligations of the parties under parties under the Financing
the Financing Arrangements without Arrangements without prior notice to
prior notice to ADB. ADB.
Complied with.
MDONER and Manipur shall carry out Project
MDONER and Manipur carried out the
the Project with due diligence and Agreement-
project with due diligence and
efficiency, and in conformity with sound Manipur,
efficiency, and in conformity with sound
applicable administrative, financial, Article II
applicable administrative, financial,
engineering, environmental and roads Section
engineering, environmental, and roads
development practices. 2.01(a)
development practices.
In the carrying out of the Project and Complied with.
Project
operation of the Project facilities, MDONER and Manipur performed all
Agreement-
MDONER and Manipur shall perform all obligations set forth in the loan
Manipur,
obligations set forth in the Loan agreement to the extent that they are
Article II
Agreement to the extent that they are applicable to MDONER and Assam,
Section
applicable to MDONER and Manipur respectively.
2.01(b)
respectively.
Partially complied with.
MDONER and Manipur shall make
Project MDONER and Manipur made available
available, promptly as needed, the
Agreement- as needed, the funds (with delay),
funds, facilities, services, land and other
Manipur, facilities, services, land, and other
resources as required, in addition to the
Article II resources as required, in addition to the
proceeds of the Loan, for the carrying
Section 2.02 proceeds of the loan, for carrying out
out of the Project.
the project.
In the carrying out of the Project, Project Complied with.
MDONER and Manipur shall employ Agreement- MDONER and Manipur employed
competent and qualified consultants and Manipur, competent and qualified consultants
contractors, acceptable to ADB, to an Article II and contractors that are acceptable
extent and upon terms and conditions Section and on conditions satisfactory to ADB.
 62 Appendix 12

Covenant Reference Compliance Status

satisfactory to ADB. 2.03(a)
Except as ADB may otherwise agree, Complied with.
MDONER and Manipur shall procure all MDONER and Manipur procured all
items of expenditures to be financed out items of expenditures to be financed
of the proceeds of the Loan in out of the proceeds of the loan in
Project
accordance with the provisions of accordance with the provisions of
Agreement-
Schedule 4 to the Loan Agreement. ADB Schedule 4 of the Loan Agreement.
Manipur,
may refuse to finance a contract where
Article II
any such item has not been procured
Section
under procedures substantially in
2.03(b)
accordance with those agreed between
the Borrower and ADB or where the
terms and conditions of the contract are
not satisfactory to ADB.
MDONER and Manipur shall carry out Complied with.
the Project in accordance with plans, MDONER and Manipur submitted
design standards, specifications, work plans, design standards, specifications,
schedules and construction methods work schedules and construction
acceptable to ADB. MDONER and Project methods acceptable to ADB.
Manipur shall furnish, or cause to be Agreement-
furnished, to ADB, promptly after their Manipur,
preparation, such plans, design Article II
standards, specifications and work Section 2.04
schedules, and any material
modifications subsequently made
therein, in such detail as ADB shall
reasonably request.
Manipur shall take out and maintain with Complied with.
Project
responsible insurers, or make other Manipur made arrangements for the
Agreement-
arrangements satisfactory to ADB for, insurance of the project facilities
Manipur,
insurance of the Project facilities to such satisfactory to ADB, to such extent and
Article II
extent and against such risks and in against such risks, and consistent with
Section
such amounts as shall be consistent with sound practice.
2.05(a)
sound practice.
Without limiting the generality of the Complied with.
foregoing, Manipur undertakes to insure, No goods were imported for the project.
or cause to be insured, the Goods to be Project
imported for the Project against hazards Agreement-
incident to the acquisition, transportation Manipur,
and delivery thereof to the place of use Article II
or installation, and for such insurance Section
any indemnity shall be payable in a 2.05(b)
currency freely usable to replace or
repair such Goods.
MDONER and Manipur shall maintain, or Project Complied with.
cause to be maintained, records and Agreement- MDONER and Manipur arranged the
accounts adequate to identify the items Manipur, records and accounts so that these are
of expenditure financed out of the Article II adequate to identify the items of
proceeds of the Loan, to disclose the Section 2.06 expenditure financed out of the
 Appendix 12 63

Covenant Reference Compliance Status

use thereof in the Project, to record the proceeds of the loan.
progress of the Project (including the
cost thereof) and to reflect, in
accordance with consistently maintained
sound accounting principles, its
operations and financial condition.
Project Complied with.
ADB, MDONER and Manipur shall Agreement- ADB, MDONER, and Manipur
cooperate fully to ensure that the Manipur, cooperated fully to ensure that the
purposes of the Loan will be Article II purposes of the loan are accomplished.
accomplished. Section
2.07(a)
MDONER and Manipur shall promptly Complied with.
inform ADB of any condition which During the project implementation, no
Project
interferes with, or threatens to interfere such condition arose that interfered with
Agreement-
with, the progress of the Project, the the progress of the project, and the
Manipur,
performance of their respective performance of the respective
Article II
obligations under this Project Agreement obligations under this Project
Section
or the Financing Arrangements, or the Agreement.
2.07(b)
accomplishment of the purposes of the
Loan.
ADB, MDONER and Manipur shall from Project Complied with.
time to time, at the request of either Agreement- ADB, MDONER, and Manipur
party, exchange views through their Manipur, exchanged the views through their
representatives with regard to any Article II representatives on matters relating to
matters relating to the Project, Section the project through TPRMs and during
MDONER, Manipur and the Loan. 2.07(c) ADB missions to the state.
MDONER and Manipur shall furnish to Complied with.
ADB all such reports and information as MDONER and Manipur furnished to
ADB shall reasonably request ADB all such reports and information
Project
concerning (i) the Loan and the concerning (i) the loan and the
Agreement-
expenditure of the proceeds thereof; (ii) expenditure of the proceeds thereof; (ii)
Manipur,
the items of expenditure financed out of the items of expenditure financed out of
Article II
such proceeds; (iii) the Project; (iv) the such proceeds; (iii) the project; (iv) the
Section
administration, operations and financial administration, operations, and financial
2.08(a)
condition of MDONER and Manipur; and condition of MDONER and Assam; and
(v) any other matters relating to the (v) any other matters relating to the
purposes of the Loan. purposes of the loan.
Without limiting the generality of the Complied with.
foregoing, MDONER and Manipur shall MDONER and Manipur furnished to
furnish to ADB quarterly reports on the ADB quarterly reports on the execution
Project
execution of the Project and on the of the project and on the operation and
Agreement-
operation and management of the management of the project facilities,
Manipur,
Project facilities. Such reports shall be including progress made and problems
Article II
submitted in such form and in such detail encountered during the quarter under
Section
and within such a period as ADB shall review, the steps taken or proposed to
2.08(b)
reasonably request, and shall indicate, be taken to remedy these problems,
among other things, progress made and and the proposed program of activities
problems encountered during the quarter and expected progress during the
 64 Appendix 12

Covenant Reference Compliance Status

under review, steps taken or proposed to following quarter.
be taken to remedy these problems, and
proposed program of activities and
expected progress during the following
quarter.
Promptly after physical completion of the Complied with.
Project, but in any event not later than 3 Manipur furnished to ADB a report on
months thereafter or such later date as the execution and initial operation of the
ADB may agree for this purpose, project, including its cost, the
MDONER and Manipur shall prepare Project performance by MDONER and Assam
and furnish to ADB a report, in such form Agreement- of their respective obligations under this
and in such detail as ADB shall Manipur, Project Agreement, and the
reasonably request, on the execution Article II accomplishment of the purposes of the
and initial operation of the Project, Section loan.
including its cost, the performance by 2.08(c)
MDONER and Manipur of their
respective obligations under this Project
Agreement and the accomplishment of
the purposes of the Loan.
MDONER and Manipur shall (i) maintain Partially complied with.
separate accounts and records for the MDONER and Manipur (i) maintained
Project and the Subprojects; (ii) prepare separate accounts for the project
annual financial statements for the (including the subprojects); (ii) had such
Project and the Subprojects in accounts and related financial
accordance with accounting principles statements (balance sheet, statement
acceptable to ADB; (iii) have such of income and expenses, and related
financial statements audited annually by statements) audited annually, in
independent auditors whose accordance with appropriate auditing
qualifications, experience and terms of standards consistently applied, by
reference are acceptable to ADB, in independent auditors whose
accordance with international standards qualifications, experience, and terms of
for auditing or the national equivalent reference are acceptable to ADB; and
Project
acceptable to ADB; (iv) as part of each (iii) furnished to ADB (with some delay),
Agreement-
such audit, have the auditors prepare a after the close of the fiscal year to
Manipur,
report (which includes the auditors’ which they relate, certified copies of
Article II
opinion on the financial statements, use audited accounts and financial
Section
of the Loan proceeds and compliance statements and the report of the
2.09(a)
with the financial covenants of the Loan auditors (including the auditors’ opinion
Agreement and Project Agreement and on the use of the loan proceeds and
a management letter (which sets out the compliance with the financial covenants
deficiencies in the internal control of the of the Loan Agreement and Project
Project that were identified in the course Agreement, and on the use of the
of the audit, if any); and (v) furnish to procedures for statement of
ADB, no later than 6 months after the expenditures), all in English language.
close of the fiscal year to which they MDONER and Assam furnished to ADB
relate, copies of such audited financial such further information concerning
statements, audit report and such accounts and financial statements
management letter, all in the English and the audit thereof as ADB, from time
language, and such other information to time, reasonably request. Apart from
concerning these documents and the delayed submission of some APFSs,
 Appendix 12 65

Covenant Reference Compliance Status

audit thereof as ADB shall from time to reconciliation issues with ADB
time reasonably request. disbursement records in the final APFS
were also noticed.
ADB shall disclose the annual audited Project Partially complied with.
financial statements for the Project and Agreement- ADB disclosed in its website the annual
the opinion of the auditors on the Manipur, audited financial statements for the
financial statements within 30 days of Article II project.
the date of their receipt by posting them Section
on ADB’s website. 2.09(b)
MDONER and Manipur shall enable Complied with.
ADB, upon ADB's request, to discuss the MDONER and Manipur facilitated the
financial statements for the Project and discussion, upon ADB's request, with
the Subprojects and its financial affairs the auditors appointed, on the financial
where they relate to the Project with the statements for the project and the
auditors appointed by MDONER and Project subprojects and its financial affairs
Manipur pursuant to paragraph (a)(iii) of Agreement- where they relate to the project, and
this Section, and shall authorize and Manipur, authorized, if required, any
require any representative of such Article II representative of such auditors to
auditors to participate in any such Section participate in any such discussions
discussions requested by ADB. This is 2.09(c) requested by ADB.
provided that such discussions shall be
conducted only in the presence of an
authorized officer of MDONER and
Manipur, unless MDONER and Manipur
shall otherwise agree.
Project Complied with.
MDONER and Manipur shall enable
Agreement- MDONER and Manipur enabled ADB's
ADB's representatives to inspect the
Manipur, representatives to inspect the project,
Project, the Goods and Works and any
Article II the goods, and works, and any relevant
relevant records and documents.
Section 2.10 records and documents.
Complied with.
MDONER and Manipur shall, promptly
MDONER and Manipur had taken all
as required, take all action within their Project
action within their respective powers to
respective powers to carry on their Agreement-
carry on their operations, and to
operations, and to acquire, maintain and Manipur,
acquire, maintain, and renew all rights,
renew all rights, properties, powers, Article II
properties, powers, privileges, and
privileges and franchises which are Section
franchises that are necessary in
necessary in the carrying out of the 2.11(a)
carrying out the project or the
Project or the Subprojects.
subprojects.
Complied with.
MDONER and Manipur shall at all times
MDONER and Manipur, at all times,
carry out the Project and Subprojects in Project
carried out the project and subprojects
accordance with sound administrative, Agreement-
in accordance with sound
financial, engineering, environmental Manipur,
administrative, financial, engineering,
and roads development practices, and Article II
environmental, and roads development
under the supervision of competent and Section
practices, and under the supervision of
experienced management and 2.11(b)
competent and experienced
personnel.
management and personnel.
In relation to the Project, Manipur shall Project Complied with.
 66 Appendix 12

Covenant Reference Compliance Status

at all times operate and maintain its Agreement- Manipur, at all times, operated and
assets, equipment and other property, Manipur, maintained its assets, equipment, and
and from time to time, promptly as Article II other property, and from time to time,
needed, make all necessary repairs and Section promptly as needed, make all
renewals thereof, all in accordance with 2.11(c) necessary repairs and renewals in
sound administrative, financial, accordance with sound administrative,
engineering, environmental, roads financial, engineering, environmental,
development, maintenance and roads development, maintenance, and
operational practices. operational practices.
Except as ADB may otherwise agree, Complied with.
Manipur shall not sell, lease or otherwise Manipur has not sold, leased, or
Project
dispose of any of its assets which shall disposed of any of its assets that are
Agreement-
be required for the efficient carrying on required for the efficient carrying on of
Manipur,
of its operations or the disposal of which its operations or if the disposal of which
Article II
may prejudice its ability to perform may prejudice its ability to perform
Section 2.12
satisfactorily any of its obligations under satisfactorily any of its obligations under
this Project Agreement. this Project Agreement.
Except as ADB may otherwise agree, Complied with.
MDONER and Manipur shall apply the MDONER and Manipur applied the
proceeds of the Loan to the financing of proceeds of the loan to the financing of
Project
expenditures on the Project in expenditures on the project in
Agreement-
accordance with the provisions of the accordance with the provisions of the
Manipur,
Loan Agreement and this Project Loan Agreement and Project
Article II
Agreement, and shall ensure that all Agreement, and ensured that all items
Section 2.13
items of expenditures financed out of of expenditures financed out of such
such proceeds are used exclusively in proceeds are used exclusively in the
the carrying out of the Project. carrying out of the project.
Except as ADB may otherwise agree, Complied with.
MDONER and Manipur shall duly MDONER and Manipur performed all
perform all their respective obligations their respective obligations under the
under the Financing Arrangements, and Project financing arrangements, and not taken
shall not take, or concur in, any action Agreement- any action that would have the effect of
which would have the effect of Manipur, assigning, amending, abrogating, or
assigning, amending, abrogating or Article II waiving any rights or obligations of the
waiving any rights or obligations of the Section 2.14 parties under the financing
parties under the Financing arrangements without prior notice to
Arrangements without prior notice to ADB.
ADB.
Complied with.
MDONER and Mizoram shall carry out Project
MDONER and Mizoram carried out the
the Project with due diligence and Agreement-
project with due diligence and
efficiency, and in conformity with sound Mizoram,
efficiency, and in conformity with sound
applicable administrative, financial, Article II
applicable administrative, financial,
engineering, environmental and roads Section
engineering, environmental, and roads
development practices. 2.01(a)
development practices.
In the carrying out of the Project and Project Complied with.
operation of the Project facilities, Agreement- MDONER and Mizoram performed all
MDONER and Mizoram shall perform all Mizoram, obligations set forth in the loan
obligations set forth in the Loan Article II agreement to the extent that they are
 Appendix 12 67

Covenant Reference Compliance Status

Agreement to the extent that they are Section applicable to MDONER and Assam.
applicable to MDONER and Mizoram 2.01(b)
respectively.
Partially complied with.
MDONER and Mizoram shall make
Project MDONER and Mizoram made available
available, promptly as needed, the
Agreement- as needed, the funds (with delay),
funds, facilities, services, land and other
Mizoram, facilities, services, land, and other
resources as required, in addition to the
Article II resources as required, in addition to the
proceeds of the Loan, for the carrying
Section 2.02 proceeds of the loan, for carrying out
out of the Project.
the project.
In the carrying out of the Project, Project Complied with.
MDONER and Mizoram shall employ Agreement- MDONER and Mizoram employed
competent and qualified consultants and Mizoram, competent and qualified consultants
contractors, acceptable to ADB, to an Article II and contractors that are acceptable and
extent and upon terms and conditions Section on conditions satisfactory to ADB.
satisfactory to ADB. 2.03(a)
Except as ADB may otherwise agree, Complied with.
MDONER and Mizoram shall procure all MDONER and Mizoram procured all
items of expenditures to be financed out items of expenditures to be financed
of the proceeds of the Loan in out of the proceeds of the loan in
Project
accordance with the provisions of accordance with the provisions of
Agreement-
Schedule 4 to the Loan Agreement. ADB Schedule 4 of the Loan Agreement.
Mizoram,
may refuse to finance a contract where
Article II
any such item has not been procured
Section
under procedures substantially in
2.03(b)
accordance with those agreed between
the Borrower and ADB or where the
terms and conditions of the contract are
not satisfactory to ADB.
MDONER and Mizoram shall carry out Complied with.
the Project in accordance with plans, MDONER and Mizoram submitted
design standards, specifications, work plans, design standards, specifications,
schedules and construction methods work schedules, and construction
acceptable to ADB. MDONER and Project methods acceptable to ADB.
Mizoram shall furnish, or cause to be Agreement-
furnished, to ADB, promptly after their Mizoram,
preparation, such plans, design Article II
standards, specifications and work Section 2.04
schedules, and any material
modifications subsequently made
therein, in such detail as ADB shall
reasonably request.
Mizoram shall take out and maintain with Complied with.
Project
responsible insurers, or make other Mizoram made arrangements for the
Agreement-
arrangements satisfactory to ADB for, insurance of the project facilities that is
Mizoram,
insurance of the Project facilities to such satisfactory to ADB, to such extent and
Article II
extent and against such risks and in against such risks, and consistent with
Section
such amounts as shall be consistent with sound practice.
2.05(a)
sound practice.
 68 Appendix 12

Covenant Reference Compliance Status

Without limiting the generality of the Complied with.
foregoing, Mizoram undertakes to No goods were imported for the project.
insure, or cause to be insured, the Project
Goods to be imported for the Project Agreement-
against hazards incident to the Mizoram,
acquisition, transportation and delivery Article II
thereof to the place of use or installation, Section
and for such insurance any indemnity 2.05(b)
shall be payable in a currency freely
usable to replace or repair such Goods.
MDONER and Mizoram shall maintain, Complied with.
or cause to be maintained, records and MDONER and Mizoram arranged the
accounts adequate to identify the items records and accounts so that these are
of expenditure financed out of the Project adequate when identifying the items of
proceeds of the Loan, to disclose the Agreement- expenditure financed out of the
use thereof in the Project, to record the Mizoram, proceeds of the loan.
progress of the Project (including the Article II
cost thereof) and to reflect, in Section 2.06
accordance with consistently maintained
sound accounting principles, its
operations and financial condition.
Project Complied with.
ADB, MDONER and Mizoram shall Agreement- ADB, MDONER and Mizoram
cooperate fully to ensure that the Mizoram, cooperated fully to ensure that the
purposes of the Loan will be Article II purposes of the loan were
accomplished. Section accomplished.
2.07(a)
MDONER and Mizoram shall promptly Complied with.
inform ADB of any condition which During the project's implementation, no
Project
interferes with, or threatens to interfere such condition arose that interfered with
Agreement-
with, the progress of the Project, the the progress of the project, and the
Mizoram,
performance of their respective performance of the respective
Article II
obligations under this Project Agreement obligations under this Project
Section
or the Financing Arrangements, or the Agreement.
2.07(b)
accomplishment of the purposes of the
Loan.
Complied with.
ADB, MDONER and Mizoram shall from Project
ADB, MDONER, and Mizoram
time to time, at the request of either Agreement-
exchanged views through their
party, exchange views through their Mizoram,
representatives with regard to any
representatives with regard to any Article II
matters relating to the project through
matters relating to the Project, Section
TPRMs and during ADB missions to the
MDONER, Mizoram and the Loan. 2.07(c)
state.
MDONER and Mizoram shall furnish to Project Complied with.
ADB all such reports and information as Agreement- MDONER and Mizoram furnished to
ADB shall reasonably request Mizoram, ADB all such reports and information
concerning (i) the Loan and the Article II concerning (i) the loan and the
expenditure of the proceeds thereof; (ii) Section expenditure of the proceeds; (ii) the
the items of expenditure financed out of 2.08(a) items of expenditure financed out of
 Appendix 12 69

Covenant Reference Compliance Status

such proceeds; (iii) the Project; (iv) the such proceeds; (iii) the project; (iv) the
administration, operations and financial administration, operations, and financial
condition of MDONER and Mizoram; and condition of MDONER and Assam; and
(v) any other matters relating to the (v) any other matters relating to the
purposes of the Loan. purposes of the loan.
Without limiting the generality of the Complied with.
foregoing, MDONER and Mizoram shall MDONER and Mizoram furnished to
furnish to ADB quarterly reports on the ADB quarterly reports on the execution
execution of the Project and on the of the project and on the operation and
operation and management of the management of the project facilities,
Project facilities. Such reports shall be Project including progress made and problems
submitted in such form and in such detail Agreement- encountered during the quarter under
and within such a period as ADB shall Mizoram, review, the steps taken or proposed to
reasonably request, and shall indicate, Article II be taken to remedy these problems,
among other things, progress made and Section and the proposed program of activities
problems encountered during the quarter 2.08(b) and expected progress during the
under review, steps taken or proposed to following quarter.
be taken to remedy these problems, and
proposed program of activities and
expected progress during the following
quarter.
Promptly after physical completion of the Complied with.
Project, but in any event not later than 3 Mizoram furnished to ADB a report on
months thereafter or such later date as the execution and initial operation of the
ADB may agree for this purpose, project, including its cost, the
MDONER and Mizoram shall prepare Project performance by MDONER and Assam
and furnish to ADB a report, in such form Agreement- of their respective obligations under this
and in such detail as ADB shall Mizoram, Project Agreement, and the
reasonably request, on the execution Article II accomplishment of the purposes of the
and initial operation of the Project, Section loan.
including its cost, the performance by 2.08(c)
MDONER and Mizoram of their
respective obligations under this Project
Agreement and the accomplishment of
the purposes of the Loan.
MDONER and Mizoram shall (i) maintain Partially complied with.
separate accounts and records for the MDONER and Mizoram (i) maintained
Project and the Subprojects; (ii) prepare separate accounts for the project
annual financial statements for the (including the subprojects); (ii) had such
Project and the Subprojects in Project accounts and related financial
accordance with accounting principles Agreement- statements (balance sheet, statement
acceptable to ADB; (iii) have such Mizoram, of income and expenses, and related
financial statements audited annually by Article II statements) audited annually in
independent auditors whose Section accordance with appropriate auditing
qualifications, experience and terms of 2.09(a) standards consistently applied by
reference are acceptable to ADB, in independent auditors whose
accordance with international standards qualifications, experience, and terms of
for auditing or the national equivalent reference are acceptable to ADB; and
acceptable to ADB; (iv) as part of each (iii) furnished to ADB (with some delay),
 70 Appendix 12

Covenant Reference Compliance Status

such audit, have the auditors prepare a after the close of the fiscal year to
report (which includes the auditors’ which they relate, certified copies of
opinion on the financial statements, use such audited accounts and financial
of the Loan proceeds and compliance statements and the report of the
with the financial covenants of the Loan auditors (including the auditors’ opinion
Agreement and Project Agreement and on the use of the loan proceeds and
a management letter (which sets out the compliance with the financial covenants
deficiencies in the internal control of the of the Loan Agreement and Project
Project that were identified in the course Agreement, and on the use of the
of the audit, if any); and (v) furnish to procedures for statement of
ADB, no later than 6 months after the expenditures), all in English language.
close of the fiscal year to which they MDONER and Assam furnished to ADB
relate, copies of such audited financial such further information on such
statements, audit report and accounts and financial statements and
management letter, all in the English the audit thereof as ADB, from time to
language, and such other information time, reasonably request. Apart from
concerning these documents and the delayed submission of some APFSs,
audit thereof as ADB shall from time to reconciliation issues with ADB
time reasonably request. disbursement records in the final APFS
were also noticed.
ADB shall disclose the annual audited Project Partially complied with.
financial statements for the Project and Agreement- ADB disclosed the annual audited
the opinion of the auditors on the Mizoram, financial statements for the project.
financial statements within 30 days of Article II
the date of their receipt by posting them Section
on ADB’s website. 2.09(b)
MDONER and Mizoram shall enable Complied with.
ADB, upon ADB's request, to discuss the MDONER and Mizoram facilitated the
financial statements for the Project and discussion, upon ADB's request with
the Subprojects and its financial affairs the auditors appointed on the financial
where they relate to the Project with the statements for the project and the
auditors appointed by MDONER and Project subprojects and its financial affairs
Mizoram pursuant to paragraph (a)(iii) of Agreement- where they relate to the project, and
this Section, and shall authorize and Mizoram, authorized if required, any
require any representative of such Article II representative of such auditors to
auditors to participate in any such Section participate in any such discussions
discussions requested by ADB. This is 2.09(c) requested by ADB.
provided that such discussions shall be
conducted only in the presence of an
authorized officer of MDONER and
Mizoram, unless MDONER and Mizoram
shall otherwise agree.
Project Complied with.
MDONER and Mizoram shall enable
Agreement- MDONER and Mizoram enabled ADB's
ADB's representatives to inspect the
Mizoram, representatives to inspect the project,
Project, the Goods and Works and any
Article II the goods and works and any relevant
relevant records and documents.
Section 2.10 records and documents.
MDONER and Mizoram shall, promptly Project Complied with.
as required, take all action within their Agreement- MDONER and Mizoram had taken all
 Appendix 12 71

Covenant Reference Compliance Status

respective powers to carry on their Mizoram, action within their respective powers to
operations, and to acquire, maintain and Article II carry on their operations, and to
renew all rights, properties, powers, Section acquire, maintain, and renew all rights,
privileges and franchises which are 2.11(a) properties, powers, privileges, and
necessary in the carrying out of the franchises that are necessary in
Project or the Subprojects. carrying out the project or the
subprojects.
Complied with.
MDONER and Mizoram shall at all times
MDONER and Mizoram, at all times,
carry out the Project and Subprojects in Project
carried out the project and subprojects
accordance with sound administrative, Agreement-
in accordance with sound
financial, engineering, environmental Mizoram,
administrative, financial, engineering,
and roads development practices, and Article II
environmental, and roads development
under the supervision of competent and Section
practices, and under the supervision of
experienced management and 2.11(b)
competent and experienced
personnel.
management and personnel.
In relation to the Project, Mizoram shall Complied with.
at all times operate and maintain its Mizoram, at all times, operated and
assets, equipment and other property, Project maintained its assets, equipment, and
and from time to time, promptly as Agreement- other property, and from time to time,
needed, make all necessary repairs and Mizoram, promptly as needed, make all
renewals thereof, all in accordance with Article II necessary repairs and renewals all in
sound administrative, financial, Section accordance with sound administrative,
engineering, environmental, roads 2.11(c) financial, engineering, environmental,
development, maintenance and roads development, maintenance, and
operational practices. operational practices.
Except as ADB may otherwise agree, Complied with.
Mizoram shall not sell, lease or Mizoram has not sold, leased, or
otherwise dispose of any of its assets Project otherwise disposed of any of its assets
which shall be required for the efficient Agreement- that are required for the efficient
carrying on of its operations or the Mizoram, carrying of its operations or the disposal
disposal of which may prejudice its Article II of which may prejudice its ability to
ability to perform satisfactorily any of its Section 2.12 perform satisfactorily any of its
obligations under this Project obligations under this Project
Agreement. Agreement.
Except as ADB may otherwise agree, Complied with.
MDONER and Mizoram shall apply the MDONER and Mizoram applied the
proceeds of the Loan to the financing of proceeds of the loan to the financing of
Project
expenditures on the Project in expenditures on the project in
Agreement-
accordance with the provisions of the accordance with the provisions of the
Mizoram,
Loan Agreement and this Project Loan Agreement and Project
Article II
Agreement, and shall ensure that all Agreement, and ensured that all items
Section 2.13
items of expenditures financed out of of expenditures financed out of such
such proceeds are used exclusively in proceeds are used exclusively in the
the carrying out of the Project. carrying out the project.
Except as ADB may otherwise agree, Project Complied with.
MDONER and Mizoram shall duly Agreement- MDONER and Mizoram performed all
perform all their respective obligations Mizoram, their respective obligations under the
under the Financing Arrangements, and Article II financing arrangements, and not taken
 72 Appendix 12

Covenant Reference Compliance Status

shall not take, or concur in, any action Section 2.14 any action that would have the effect of
which would have the effect of assigning, amending, abrogating, or
assigning, amending, abrogating or waiving any rights or obligations of the
waiving any rights or obligations of the parties under the Financing
parties under the Financing Arrangements without prior notice to
Arrangements without prior notice to ADB.
ADB.
Complied with.
MDONER and Tripura shall carry out the Project
MDONER and Tripura carried out the
Project with due diligence and efficiency, Agreement-
project with due diligence and
and in conformity with sound applicable Tripura,
efficiency, and in conformity with sound
administrative, financial, engineering, Article II
applicable administrative, financial,
environmental and roads development Section
engineering, environmental, and roads
practices. 2.01(a)
development practices.
In the carrying out of the Project and Complied with.
Project
operation of the Project facilities, MDONER and Tripura performed all
Agreement-
MDONER and Tripura shall perform all obligations set forth in the Loan
Tripura,
obligations set forth in the Loan Agreement to the extent that they are
Article II
Agreement to the extent that they are applicable to MDONER and Assam.
Section
applicable to MDONER and Tripura
2.01(b)
respectively.
Partially complied with.
MDONER and Tripura shall make
Project MDONER and Tripura made available,
available, promptly as needed, the
Agreement- as needed, the funds (with delay),
funds, facilities, services, land and other
Tripura, facilities, services, land, and other
resources as required, in addition to the
Article II resources as required, in addition to the
proceeds of the Loan, for the carrying
Section 2.02 proceeds of the loan, for carrying out
out of the Project.
the project.
In the carrying out of the Project, Project Complied with.
MDONER and Tripura shall employ Agreement- MDONER and Tripura employed
competent and qualified consultants and Tripura, competent and qualified consultants
contractors, acceptable to ADB, to an Article II and contractors, acceptable and on
extent and upon terms and conditions Section conditions satisfactory to ADB.
satisfactory to ADB. 2.03(a)
Except as ADB may otherwise agree, Complied with.
MDONER and Tripura shall procure all MDONER and Tripura procured all
items of expenditures to be financed out items of expenditures to be financed
of the proceeds of the Loan in out of the proceeds of the loan in
Project
accordance with the provisions of accordance with the provisions of
Agreement-
Schedule 4 to the Loan Agreement. ADB Schedule 4 of the Loan Agreement.
Tripura,
may refuse to finance a contract where
Article II
any such item has not been procured
Section
under procedures substantially in
2.03(b)
accordance with those agreed between
the Borrower and ADB or where the
terms and conditions of the contract are
not satisfactory to ADB.
MDONER and Tripura shall carry out the Project Complied with.
Project in accordance with plans, design Agreement- MDONER and Tripura submitted plans,
 Appendix 12 73

Covenant Reference Compliance Status

standards, specifications, work Tripura, design standards, specifications, work
schedules and construction methods Article II schedules, and construction methods
acceptable to ADB. MDONER and Section 2.04 acceptable to ADB.
Tripura shall furnish, or cause to be
furnished, to ADB, promptly after their
preparation, such plans, design
standards, specifications and work
schedules, and any material
modifications subsequently made
therein, in such detail as ADB shall
reasonably request.
Tripura shall take out and maintain with Complied with.
Project
responsible insurers, or make other Tripura made arrangements for the
Agreement-
arrangements satisfactory to ADB for, insurance of the project facilities that
Tripura,
insurance of the Project facilities to such are satisfactory to ADB, to such extent
Article II
extent and against such risks and in and against such risks and consistent
Section
such amounts as shall be consistent with with sound practice.
2.05(a)
sound practice.
Without limiting the generality of the Complied with.
foregoing, Tripura undertakes to insure, No goods were imported for the project.
or cause to be insured, the Goods to be Project
imported for the Project against hazards Agreement-
incident to the acquisition, transportation Tripura,
and delivery thereof to the place of use Article II
or installation, and for such insurance Section
any indemnity shall be payable in a 2.05(b)
currency freely usable to replace or
repair such Goods.
MDONER and Tripura shall maintain, or Complied with.
cause to be maintained, records and MDONER and Tripura arranged the
accounts adequate to identify the items records and accounts so that these are
of expenditure financed out of the Project adequate to identify the items of
proceeds of the Loan, to disclose the Agreement- expenditure financed out of the
use thereof in the Project, to record the Tripura, proceeds of the loan.
progress of the Project (including the Article II
cost thereof) and to reflect, in Section 2.06
accordance with consistently maintained
sound accounting principles, its
operations and financial condition.
Project Complied with.
ADB, MDONER and Tripura shall Agreement- ADB, MDONER, and Tripura
cooperate fully to ensure that the Tripura, cooperated fully to ensure that the
purposes of the Loan will be Article II purposes of the loan are accomplished.
accomplished. Section
2.07(a)
MDONER and Tripura shall promptly Project Complied with.
inform ADB of any condition which Agreement- During project implementation, no such
interferes with, or threatens to interfere Tripura, condition arose that interfered with the
with, the progress of the Project, the Article II progress of the project, and the
 74 Appendix 12

Covenant Reference Compliance Status

performance of their respective Section performance of the respective
obligations under this Project Agreement 2.07(b) obligations under this Project
or the Financing Arrangements, or the Agreement.
accomplishment of the purposes of the
Loan.
ADB, MDONER and Tripura shall from Project Complied with.
time to time, at the request of either Agreement- ADB, MDONER, and Tripura
party, exchange views through their Tripura, exchanged the views through their
representatives with regard to any Article II representatives on all matters relating
matters relating to the Project, Section to the project through TPRMs and
MDONER, Tripura and the Loan. 2.07(c) during ADB missions to the state.
MDONER and Tripura shall furnish to Complied with.
ADB all such reports and information as MDONER and Tripura furnished to ADB
ADB shall reasonably request all such reports and information
Project
concerning (i) the Loan and the concerning (i) the loan and the
Agreement-
expenditure of the proceeds thereof; (ii) expenditure of the proceeds; (ii) the
Tripura,
the items of expenditure financed out of items of expenditure financed out of
Article II
such proceeds; (iii) the Project; (iv) the such proceeds; (iii) the project; (iv) the
Section
administration, operations and financial administration, operations, and financial
2.08(a)
condition of MDONER and Tripura; and condition of MDONER and Assam; and
(v) any other matters relating to the (v) any other matters relating to the
purposes of the Loan. purposes of the Loan.
Without limiting the generality of the Complied with.
foregoing, MDONER and Tripura shall MDONER and Tripura furnished to ADB
furnish to ADB quarterly reports on the quarterly reports on the execution of the
execution of the Project and on the project and on the operation and
operation and management of the management of the project facilities,
Project facilities. Such reports shall be Project including the progress made and
submitted in such form and in such detail Agreement- problems encountered during the
and within such a period as ADB shall Tripura, quarter under review, the steps taken or
reasonably request, and shall indicate, Article II proposed to be taken to remedy these
among other things, progress made and Section problems, and the proposed program of
problems encountered during the quarter 2.08(b) activities and expected progress during
under review, steps taken or proposed to the following quarter.
be taken to remedy these problems, and
proposed program of activities and
expected progress during the following
quarter.
Promptly after physical completion of the Complied with.
Project, but in any event not later than 3 Tripura furnished to ADB a report on
months thereafter or such later date as the execution and initial operation of the
Project
ADB may agree for this purpose, project, including its cost, the
Agreement-
MDONER and Tripura shall prepare and performance by MDONER and Assam
Tripura,
furnish to ADB a report, in such form and of their respective obligations under this
Article II
in such detail as ADB shall reasonably Project Agreement, and the
Section
request, on the execution and initial accomplishment of the purposes of the
2.08(c)
operation of the Project, including its loan.
cost, the performance by MDONER and
Tripura of their respective obligations
 Appendix 12 75

Covenant Reference Compliance Status

under this Project Agreement and the
accomplishment of the purposes of the
Loan.
Partially complied with.
MDONER and Tripura shall (i) maintain
MDONER and Tripura (i) maintained
separate accounts and records for the
separate accounts for the project
Project and the Subprojects; (ii) prepare
(including the subprojects); (ii) had such
annual financial statements for the
accounts and related financial
Project and the Subprojects in
statements (balance sheet, statement
accordance with accounting principles
of income and expenses, and related
acceptable to ADB; (iii) have such
statements) audited annually, in
financial statements audited annually by
accordance with appropriate auditing
independent auditors whose
standards consistently applied by
qualifications, experience and terms of
independent auditors whose
reference are acceptable to ADB, in
qualifications, experience, and terms of
accordance with international standards
reference are acceptable to ADB; and
for auditing or the national equivalent
(iii) furnished ADB (with some delay),
acceptable to ADB; (iv) as part of each
Project after the close of the fiscal year to
such audit, have the auditors prepare a
Agreement- which they relate, certified copies of
report (which includes the auditors’
Tripura, such audited accounts and financial
opinion on the financial statements, use
Article II statements and the report of the
of the Loan proceeds and compliance
Section auditors (including the auditors’ opinion
with the financial covenants of the Loan
2.09(a) on the use of the loan proceeds and
Agreement and Project Agreement and
compliance with the financial covenants
a management letter (which sets out the
of the Loan Agreement and Project
deficiencies in the internal control of the
Agreement, and on the use of the
Project that were identified in the course
procedures for statement of
of the audit, if any); and (v) furnish to
expenditures), all in English language.
ADB, no later than 6 months after the
MDONER and Assam furnished ADB
close of the fiscal year to which they
further information on such accounts
relate, copies of such audited financial
and financial statements and the audit
statements, audit report and
thereof as ADB, from time to time,
management letter, all in the English
reasonably request. Apart from delayed
language, and such other information
submission of some APFSs,
concerning these documents and the
reconciliation issues with ADB
audit thereof as ADB shall from time to
disbursement records in the final APFS
time reasonably request.
were also noticed.
ADB shall disclose the annual audited Project Partially complied with.
financial statements for the Project and Agreement- ADB disclosed on its website the
the opinion of the auditors on the Tripura, annual audited financial statements of
financial statements within 30 days of Article II the project.
the date of their receipt by posting them Section
on ADB’s website. 2.09(b)
MDONER and Tripura shall enable ADB, Project Complied with.
upon ADB's request, to discuss the Agreement- MDONER and Tripura facilitated the
financial statements for the Project and Tripura, discussion, upon ADB's request with
the Subprojects and its financial affairs Article II the auditors appointed, on the financial
where they relate to the Project with the Section statements for the project and the
auditors appointed by MDONER and 2.09(c) subprojects and its financial affairs
 76 Appendix 12

Covenant Reference Compliance Status

Tripura pursuant to paragraph (a)(iii) of where they relate to the project, and
this Section, and shall authorize and authorized if required, any
require any representative of such representative of such auditors to
auditors to participate in any such participate in any discussions
discussions requested by ADB. This is requested by ADB.
provided that such discussions shall be
conducted only in the presence of an
authorized officer of MDONER and
Tripura, unless MDONER and Tripura
shall otherwise agree.
Project Complied with.
MDONER and Tripura shall enable
Agreement- MDONER and Tripura enabled ADB's
ADB's representatives to inspect the
Tripura, representatives to inspect the project,
Project, the Goods and Works and any
Article II the goods and works, and any relevant
relevant records and documents.
Section 2.10 records and documents.
Complied with.
MDONER and Tripura shall, promptly as
MDONER and Tripura had taken all
required, take all action within their Project
action within their respective powers to
respective powers to carry on their Agreement-
carry on their operations, and to
operations, and to acquire, maintain and Tripura,
acquire, maintain, and renew all rights,
renew all rights, properties, powers, Article II
properties, powers, privileges, and
privileges and franchises which are Section
franchises that are necessary in
necessary in the carrying out of the 2.11(a)
carrying out the project or the
Project or the Subprojects.
subprojects.
Complied with.
MDONER and Tripura shall at all times
MDONER and Tripura, at all times,
carry out the Project and Subprojects in Project
carried out the project and subprojects
accordance with sound administrative, Agreement-
in accordance with sound
financial, engineering, environmental Tripura,
administrative, financial, engineering,
and roads development practices, and Article II
environmental, and roads development
under the supervision of competent and Section
practices, and under the supervision of
experienced management and 2.11(b)
competent and experienced
personnel.
management and personnel.
Complied with.
In relation to the Project, Tripura shall at
Tripura, at all times, operated and
all times operate and maintain its assets,
Project maintained its assets, equipment, and
equipment and other property, and from
Agreement- other property, and from time to time,
time to time, promptly as needed, make
Tripura, promptly as needed, make all
all necessary repairs and renewals
Article II necessary repairs and renewals in
thereof, all in accordance with sound
Section accordance with sound administrative,
administrative, financial, engineering,
2.11(c) financial, engineering, environmental,
environmental, roads development,
roads development, maintenance, and
maintenance and operational practices.
operational practices.
Except as ADB may otherwise agree, Complied with.
Project
Tripura shall not sell, lease or otherwise Tripura has not sold, leased, or
Agreement-
dispose of any of its assets which shall disposed of any of its assets that are
Tripura,
be required for the efficient carrying on required for the efficient carrying of its
Article II
of its operations or the disposal of which operations or the disposal of which may
Section 2.12
may prejudice its ability to perform prejudice its ability to perform
 Appendix 12 77

Covenant Reference Compliance Status

satisfactorily any of its obligations under satisfactorily any of its obligations under
this Project Agreement. this Project Agreement.
Except as ADB may otherwise agree, Complied with.
MDONER and Tripura shall apply the MDONER and Tripura used the
proceeds of the Loan to the financing of proceeds of the loan to finance the
Project
expenditures on the Project in expenditures of the project in
Agreement-
accordance with the provisions of the accordance with the provisions of the
Tripura,
Loan Agreement and this Project Loan Agreement and Project
Article II
Agreement, and shall ensure that all Agreement, and ensured that all items
Section 2.13
items of expenditures financed out of of expenditures were used exclusively
such proceeds are used exclusively in in carrying out the project.
the carrying out of the Project.
Except as ADB may otherwise agree, Complied with.
MDONER and Tripura shall duly perform MDONER and Tripura performed all
all their respective obligations under the their respective obligations under the
Project
Financing Arrangements, and shall not Financing Arrangements, and not taken
Agreement-
take, or concur in, any action which any action that would have the effect of
Tripura,
would have the effect of assigning, assigning, amending, abrogating, or
Article II
amending, abrogating or waiving any waiving any rights or obligations of the
Section 2.14
rights or obligations of the parties under parties under the Financing
the Financing Arrangements without Arrangements without prior notice to
prior notice to ADB. ADB.
ADB = Asian Development Bank, APFS = audited project financial statement, CAC = construction supervision
consultant, DGM = deputy general manager, DLP = defect liability period, EARF= environmental assessment review
framework, EMP = Environmental Management Plan, FAM = facility administration manual; FFA = framework financing
agreement, IEE = initial environmental examination, LFIS = loan and grant financial information services, NGOs =
nongovernment organizations, MDONER = Ministry of Development of North Eastern Region, PAM = Project
Administration Manual, PMU = project management unit, RP = resettlement plan, Sec. = Section, SPS = safeguard
policy statement.
Sources: Asian Development Bank and the loan and project agreements.
78 Appendix 13

ECONOMIC AND FINANCIAL ANALYSES

A. General

1. The Asian Development Bank (ADB) project completion report (PCR) team
conducted an economic reevaluation of the project 2 using a methodology similar to the one
used at appraisal with updated data. The “without” project scenario assumed that the
original state of the roads would be retained. The “with” project scenario considered the
improvement of the roads carried out under the project enabling vehicles to move faster
with lower operating costs and reduced travel time. Economic benefits of project 2 were
calculated by comparing the “with” and “without” project scenarios. The project 2 economic
internal rate of return (EIRR) was calculated and subjected to a sensitivity test.

B. Economic Rationale

2. Improvements from the project will generate job opportunities and lead to the
development of economic activities in the project region (Appendix 14). Road improvement
and its contribution to economic development activities is a natural consequence. With the
slow growth performance of the state governments under the past five-year plans, the
Government of India renewed its recognition that inadequate road networks were the major
constraints to the development efforts and, thus started a national investment program to
improve road connectivity to remote regions, including the northeastern region (NER). The
multitranche financing facility (MFF) investments complement the Special Accelerated Road
Development Program in the Northeastern Region (SARDP-NE), with roads under tranches
1 and 2, linking the state capitals and districts. The investments also enhanced the capacity
of the executing agencies, including the Public Works Department (PWD) staff, in project
preparation and road asset management best practices.

C. Methodology and Assumptions

3. The economic analysis methodology followed ADB’s Guidelines.1 The calculation of

the EIRRs was based on the following:

(i) The economic evaluation of the proposed project was undertaken using the Highway
Development Model 4 (HDM-4). The costs to the road agency and road users in the
“without” and “with” project cases were estimated and used for deriving the net costs
and benefits with the project and to calculate the economic viability of the project road
sections.
(ii) The life of roads was taken as the improvement period followed by 20 years of
operation.
(iii) All costs and benefits are expressed in Indian rupees (₹) at 2021 constant prices.

4. The project consists of six secondary roads spread in three North Eastern states. All
roads are single to intermediate-lane carriageways having a carriageway varies between
3.0 meters (m) and 5.5 m. The majority of the project road sections were in poor condition.
Most of the project road sections failed due to poor pavement structure, lack of adequate
maintenance, and heavy traffic loading. The project roads serve many villages where
agriculture is the main economic activity. All roads were upgraded to the standard width, as
per India Road Congress (IRC) norms, with geometric improvements as stipulated in the
detailed project report (DPR). The project roads are improved and/or upgraded to 5.5–7.0 m
carriageway with earthen shoulder of 2.5 m on either side (considered as “with project”
scenario). The details are presented in Table A13.1.

1
Guidelines for the Economic Analysis of Projects (2017); Guidelines for the Economic Analysis of Projects
(1997)
 Appendix 13 79

Table A13.1: List of Project Road Sections and Base Year (2011) Characteristics

Road Length ADT Carriageway

Name of Project Road
No. (km) (no.) (width, m)
1 Tamulpur to Paneri (AS-02) 43.00 1029 5.5
2 Paneri to Udalguri (AS-03) 19.56 1103 3.5
3 Tupul-Bishnupur (MN-06 CW-1) 50.80 1126 3.5
4 Thoubal-Kasom khullen (MN-06 CW-2) 47.13 874 3.0
5 Serchhip to Buarpui Road (Mizoram) 55.00 976 3.0
6 Udaipur to Melaghar (Tripura) 20.30 1231 5.0
ADT= Average daily traffic, km = kilometer, no. = number, m = meter.
Sources: Detailed project reports, 2011.

5. The project was expected to be completed in 18–48 months at appraisal. The

economic reevaluation was carried out on the 235.79 kilometer (km), which were
constructed under the project. The economic reevaluation at completion covers the
following 20 years of full operation using 2021 prices. The economic reevaluation was
carried out for the same project roads, as analyzed in the report and recommendation of the
President (RRP).

D. Traffic Demand Analysis and Forecast

6. Review of historical data. Earlier traffic surveys were carried out in 2011 at the
DPR stage, which was subsequently used, as secondary data at project appraisal stage.
The current traffic data in 2021, after the construction of roads, were collected from five
roads at the project completion report (PCR) stage. The traffic counts for five vehicle types
were collected, including passenger car and/or van, bus, two-wheelers, and two categories
of freight trucks, including light commercial vehicle (LCV), two-axle and three-axle trucks.

7. Comparison of overall traffic growth. For comparison purpose, the baseline data
of 2011 and the 2021 post-construction data of each of the project road were compiled and
summarized in Table A13.2.

Table A13.2: Average Annual Daily Traffic, 2011 and 2021

Pkg. ADT-Traffic ADT-Traffic Overall

District Name of Project Road
No. in 2011(a) in 2021(b) CAGR (%)
1 Tamulpur to Paneri (AS-02) 1,029 2,749 10.3
Baksa & Udaiguri
2 Paneri to Udalguri (AS-03) 1,103 2,759 9.6
Noney Churchanpur & Tupul-Bishnupur (MN-06
3 1,126 2,586 8.7
Bishanpur CW-1)
Thoubel, Kangpokpi & Thoubal-Kasom khullen
4 874 2,129 9.3
Kamjong (MN-06 CW-2)
Serchhip to Buarpui
5 Serchhip & Lunglei 976 2,505 9.9
(Mizoram)
Udaipur to Melaghar
6 Gomati & Sepahijala 1,231 3,113 9.7
(Tripura)
ADT = Average daily traffic, CAGR = compound annual growth rate, DPR = detailed project report.
Note: Traffic count – Aggregate traffic on project roads.
Sources: (a) Based on DPR in 2011; (b) Based on the survey data of the Public Works Department in 2021.

8. By comparing the traffic count of motorized vehicles (annual average daily traffic
[AADT] in numbers), it is observed that the annual traffic growth rates vary from 8.7% to
10.3% per annum. By studying the traffic’s composition, it is observed that cars account for
31% and two-wheelers account for 42%, thus, comprising 73% of the total traffic on the
80 Appendix 13

project roads. All other types of vehicles (buses, trucks, three-wheelers and tractors, etc.)
are comprises to 26% . The traffic growth by vehicle category is discussed below.

9. Past trend of vehicle registration. The compound annual growth rate (CAGR) by
type of the registered vehicles in each of the investment program states is presented in
Table A13.3.

Table A13.3: Growth of Registered Vehicles by Type, 2016–2021

Two- Light Heavy
State Car/Jeep Buses
Wheeler Truck Truck
Assam 13.1 11.3 5.4 11.1 5.5
Manipur 8.7 14.9 7.4 8.7 7.0
Mizoram 12.5 9.7 5.0 8.3 8.7
Tripura 13.2 8.3 3.4 6.5 6.5
Note: Growth rate for Annual Vehicle Registration for the period 2016–2021.
Source: Ministry of Road Transport and Highways Transport Research Wing. 2021. Road Transport
Yearbook. New Delhi.

10. At appraisal stage, the traffic growth rates for passenger and goods traffic were
calculated based on time-series data on traffic volume on the project roads and on the
state’s gross domestic product (GDP) growth forecast. Hence, the aggregate/uniform
growth rate for each category of vehicle was applied for all road sections located in three
states. The adopted growth rate at appraisal stage is presented below:

 Traffic growth rates of 8% for passenger traffic; and 10% for freight traffic.
 Higher growth rate of 15% was assumed for the opening year, being a diverted
traffic.
 Generated traffic after road opening is assumed to be 10% of normal traffic.

11. At PCR stage, the growth rates were calculated based on time-series data, the
CAGR derived from the survey data (secondary traffic data, based on classified traffic
volume count along the project roads during the DPR [2011] and at the PCR stage post-
construction, 2021). The adopted growth rates for each road, under the vehicle category, is
summarized in Table A13.4.

Table A13.4: Adopted Growth Rates for Motorized Traffic, 2011–2021

Two- Light Heavy
State Car/Jeep Buses
Wheeler Truck Truck
Tamulpur to Paneri (AS-02) 10.5 11.6 6.0 10.2 5.1
Paneri to Udalguri (AS-03) 9.5 11.1 6.2 10.0 4.6
Tupul-Bishnupur (MN-06 CW-1) 9.0 9.5 6.5 8.8 7.8
Thoubal-Kasom khullen (MN-06 ) 10.1 9.5 6.2 9.0 7.2
Serchhip to Buarpui (Mizoram) 11.5 9.5 4.8 8.7 8.1
Udaipur to Melaghar (Tripura) 12.5 8.5 3.5 7.1 6.2
Source: Ministry of Road Transport and Highways Transport Research Wing. 2021. Road Transport
Yearbook. New Delhi.

12. At appraisal, while carrying out economic analysis, the provision of generated traffic
of 10% of normal traffic in 2012 was considered (after completion of road improvement
works). However, at PCR, no generated traffic has been considered, presuming the traffic
of 2021, based on post-construction traffic volume data, has already taken the
enhancement of traffic due to generated traffic. It is pertinent to mention that project roads
significantly completed the upgrading works in the first 4 years (2016–2020) and better
 Appendix 13 81

facility was made available to the commuter. Further, the traffic growth rates are reduced by
0.5% every 5 years in the analysis for each vehicle category in the analysis period.

E. Project Design and Costs

13. As per the detailed design report, all roads were proposed for reconstruction,
rehabilitation and/or upgrading to have adequate pavement composition for the horizon
period and a standard intermediate and/or double-lane width as proposed in the contract
documents. Construction cost was taken from the actual expenditure incurred for each
respective contract. Comparing with the total cost estimation (₹9,345.8 million) at appraisal,
the actual project cost (₹11,549.6 million) was 32.6% higher. The summary is given in Table
A13.5a.

Table A13.5a: Construction Costs at Appraisal and at Completion

Road Road Name As Per Appraisal As Per

No. Report Implementation/
(₹ million) PCR (₹ million)
1. Tamulpur to Paneri (AS-02)
2,891.6 3,882.5
2. Paneri to Udalguri (AS-03)
3. Tupul-Bishnupur (MN-06 CW-1) 1,872.8 1,904.9
4. Thoubal-Kasom khullen (MN-06
1,733.7 2,298.1
CW-2)
5. Serchhip to Buarpui Road
2,045.1 2,698.3
(Mizoram)
6. Udaipur to Melaghar (Tripura) 802.6 765.7
Total 9,345.8 11,549.6
PCR = project completion report, ₹ = Indian rupee.
Sources: Data from the four PWDs of the project states.

14. The analysis used the domestic price numeraire. Economic cost was assessed by
applying the estimated conversion factor (0.89) using updated shadow wage rate factor
(SWRF) of 0.782 and shadow exchange rate factor (SERF) of 1.043 applicable to respective
components of financial cost. At appraisal, financial costs were converted to economic
costs using the conversion factor of 0.85 and presented in Table A13.5b.

Table A13.5b: Conversion of Financial Costs to Economic costs

Road Road Name Financial Costs as Economic Costs as
No. per PCR (₹ million) per PCR (₹ million)
1. Tamulpur to Paneri (AS-02)
3,882.5 3455.43
2. Paneri to Udalguri (AS-03)
3. Tupul-Bishnupur (MN-06 CW-1) 1,904.9 1695.36
4. Thoubal-Kasom khullen (MN-06
2,298.1 2045.31
CW-2)
5. Serchhip to Buarpui Road
2,698.3 2401.49
(Mizoram)
6. Udaipur to Melaghar (Tripura) 765.7 681.47
Total 6 10279.14
PCR = project completion report, ₹ = Indian rupee.
Sources: Data are from the four Public Works Departments of the project states.

2 SERF applied for traded component was 1.04; estimated based on imports, exports, and custom duties data for the period
2016–2020 (https://wits.worldbank.org); calculated based on ERD Technical Note Series No. 11 (http://www.adb.org/
Economics).
3
SWRF applied for unskilled labor was 0.78; estimated based on wage rate provided by notification issued by the Labor
Welfare Department, Government of Assam.
82 Appendix 13

15. The duration of construction was as per the actual construction period for each
contract. By project completion, the construction duration was varying from 50–60 months
between 2015 and 2020. The actual cost for each year was used in the reevaluation.

Maintenance Costs

16. The cost of routine maintenance was taken as per prevailing market rates in the
state of Assam, Manipur, Mizoram, and Tripura. The cost of periodic maintenance was
derived from the quoted rate of the bidder. The routine and periodic maintenance, used in
the HDM-4 model, are summarized in Table A13.6.

Table A13.6: Maintenance Strategies and Cost

Financial Cost
Item Details/Strategy
(₹)
Without project scenario
Routine
Scheduled; Annual maintenance 50,000/km
maintenance
Condition responsive; when pothole is > 100
Patch work 350/m2
nos./km
With project scenario
Routine
Scheduled; Annual maintenance 30,000/km
maintenance
Patch work Condition responsive; when pothole > 50 nos/km 350/ m2
Periodic Scheduled; Every 5th year; 30 mm asphaltic
3.5 million/km
maintenance concrete (₹350/ m2 for 7.0 meters width)
km = kilometer, nos. = numbers,m2 = square meter, mm = millimeter, ₹ = Indian rupee.
Source: From the assessment of the project completion report team, based on the prevailing highway
industry market rates in India in 2021.

F. Maintenance Strategy

17. The “without-project” scenario was also proposed with routine maintenance due to
the deteriorated condition of the roadway and to carry out necessary activities like cleaning
of earth drains and longitudinal drains more frequently and rigorously. The project roads
significantly completed the upgrading works in the first 3 years (2017–2019) and better
facility was made available to the commuter. However, work on other activities, like road
marking, signages, protection works, and others, continued up to 2020.

G. Project Benefits

18. The motorized (MT) and nonmotorized (NMT) savings in vehicle operating costs and
passenger travel time costs were considered as direct benefits due to the project and are
considered in the current analysis.

1. Value of Travel Time

19. The value of travel time for passenger vehicles was estimated based on the wage
rates and income distribution in each state. Value of time for a bus passenger was
calculated from agricultural labor wage and skilled labor wage presented in Table A13.7.
The income share distribution in India indicates that the top 20% of the population has a
44.4% share of income, the next 20% of the population has 20.5% share of the income and
the lowest 60% of the population has an income share of 35.1%. Assuming that these
groups represent the car, two-wheeler and bus users, the per capita income index of car,
two-wheeler, and bus users is 2.22 (44.4/20), 1.025 (20.5/20) and 0.585 (35.1/60) or two-
wheeler and car passenger time may be valued at 1.7 and 3.5 times the bus passenger
value of time.
 Appendix 13 83

Table A13.7: Values of Bus Passenger Working and Nonworking Time

Wage Rates with Overhead Weighted
a Value of Value of Non-
Daily
State Work Time work time
Agricultural Skilled Others Wage
(₹ per hour) (₹ per hour)
Labor Labor c Rate b
Assam 240 350 525 358.5 44.8 11.2
Mizoram 300 335 502.5 371.25 46.4 11.6
Manipur 350 435 652.5 466.25 58.3 14.6
Tripura 338 428 642 456.2 57.0 14.3
a Overhead rate of 33% is taken as per The World Bank. 2005. Valuation of Time Savings. Transport
Note No. TRN 15. Washington, DC.
b
Assuming the passenger population consisting of workers with equivalent wage rate of 40% agricultural
labor, 30% skilled labor, and 30% others.
C Taken as 1.5 times skilled worker rate.

Source: Consultant’s estimate based on the wage rate data from the Ministry of Labor and Employment,
Government of India and “Manual on Economic Evaluation of Highway Projects in India (IRC: SP30-
2019).”

20. The value of time of two-wheeler and car passengers, thus estimated, is given in
Table A13.8. The value of nonworking time is taken as 25% of the working time.

Table A13.8: Values of Two-Wheeler and Car Passenger Working

and Nonworking Time
Value of Work Time Value of Non-Work Time
(₹ per hour) (₹ per hour)
State
Two-wheeler Car Two-wheeler
Car Passenger
Passenger Passenger Passenger
Assam 76.2 157.0 19.0 39.0
Mizoram 115.2 237.0 29.0 59.0
Manipur 99.1 204.0 25.0 51.0
Tripura 76.2 157.0 19.0 39.0
Source: Consultant’s estimate based on wage rate data from Ministry of Labor and Employment,
Government of India and “Manual on Economic Evaluation of Highway Projects in India (IRC: SP30-
2019).”

21. Passenger travel time cost savings were recalculated for different types of
passenger vehicles (car, jeep, taxi, two-wheeler, and bus). To estimate time cost savings,
the unit value of time for passengers and cargo, and other factors were included, as follows:
(i) average vehicle loads; (ii) percentage of work-related trips; (iii) time costs by different
road users; and (iv) travel speeds for different types of passenger vehicles, which were
taken from the IRC: SP30-2019: Manual on Economic Evaluation of Highway Projects in
India. Since most of the roads are intermediate lanes and/or narrow two-lanes, the
considerable increase in traffic movement is expected as a result of improved road
conditions and the resulting development activities. As the volume of nonmotorized traffic is
negligible, accordingly, thus any savings/benefits for such traffic have not been
considered. The improvement of rural roads to connect with urban centers is necessary so
that income generation and wider commodity and service circulation take place in
rural areas. The additional benefits provided by upgraded roads to these habitations
include health, education, agriculture, poverty reduction, safer movement of traffic, and
others, which have not been considered in the analysis.

2. Vehicle Operating Costs

22. Due to improved road condition, vehicles can now be driven faster than before the
project, leading to substantial economic benefits in the project areas. The value of work
time and leisure time were given separately an hourly wage, as a required input of HDM
84 Appendix 13

(per hour rate for passenger working time and passenger nonworking time). For each
contract package, the vehicle operating cost (VOC) per vehicle-km was computed for each
class of vehicle, using input values for the economic costs of a new vehicle, tire, fuel,
lubricants, and maintenance labor. The value of the respective inputs was taken from the
IRC: SP:30-2019. The VOC savings per vehicle-km were estimated for project roads—from
narrow width to standard configuration with standard geometry and rehabilitation. The
summary of savings in VOC is presented in Table A13.9.

Table A13.9: Operating Cost and Savings per Unit Vehicle

(₹ per vehicle-kilometer)
Bus/ Medium
Scenario Car Trucks
Trucks
Without project 16.60 27.67 55.49
With project 11.43 21.57 42.96
VOC savings 5.17 6.10 12.54
₹ = Indian rupee, VOC = vehicle operating cost.
Source: The highway design manual (HDM)-generated reports of the project
completion report team.

H. Economic Revaluation and Sensitivity Tests

23. Based on the assumptions and parameters above, the EIRRs were calculated for all
project roads, with their respective traffic growth rate and cost for a horizon period starting
from the construction period with 20 years of operation period. As a whole (aggregate as a
northeastern states network), the reevaluated EIRR for the six roads is 15.3%. The
reevaluated EIRRs for the four packages are given in Table A13.10.

Table A13.10: Comparison of Economic Indicators at Appraisal and Completion

At Appraisal At PCR Stage
Road
Road Section EIRR
No. NPV NPV EIRR (%)
(%)
1 Tamulpur to Paneri (AS-02) 508.3 14.5
15.3
2 Paneri to Udalguri (AS-03) 240.8 14.6
3 Tupul-Bishnupur (MN-06 CW-1) Not 688.1 16.7
available 17.2
4 Thoubal-Kasom khullen (MN-06 513.1 15.1
5 Serchhip to Buarpui Road 18.0 843.8 15.0
6 Udaipur to Melaghar (Tripura) 22.9 368.0 19.0
Aggregate NA 2585.1 15.3
EIRR = economic internal rate of return, NA = not available, NPV = net present value.
Sources: ADB. 2013. Updated Facility Administration Manual. Multitranche Financing Facility. India:
Northeastern State Roads Investment Program. Manila; and the highway design manual (HDM)-generated
reports of the project completion report team.

24. At the disaggregated level, economic analysis was carried out for six roads. All
roads yielded an EIRR that is more than 12%. The reevaluated EIRR for six roads ranges
from 14.5 to 19.0. The project is considered economically viable. The costs and benefit
streams for the aggregate total of the six project roads over the full evaluation period are
shown in Table A13.13.

25. The EIRR was subjected to a sensitivity analysis to test different scenarios of
maintenance costs and benefits, as carried out at appraisal. The results indicated that the
project will continue to be economically viable for all scenarios except for one option. If a
20% maintenance cost increase would be combined with a 20% benefit reduction, the EIRR
would be still 12.9% for the whole project. The sensitivity analysis confirmed that the project
has a robust economic viability. It also showed that the EIRR was more sensitive to
changes in economic benefits. The results of the sensitivity analysis are shown in Table
A13.11.
 Appendix 13 85

Table A13.11: Sensitivity Analysis

Road Section Project EIRR (%)

Evaluation Base Mainte- Benefits Benefits Maintenance
Stage Case nance Decrea- Decrea- Cost
Cost sed by sed by Increased
Increa- 20% 50% and Benefit
sed by Decreased by
20% 20%
Tamulpur to Paneri At appraisal 15.3 - 12.6 9.5 -
(AS-02) At PCR 14.5 14.4 12.4 8.4 12.3
Paneri to Udalguri At appraisal 15.3 - 12.6 9.5 -
(AS-03) At PCR 14.6 14.5 12.5 8.5 12.4
Tupul-Bishnupur At appraisal 17.2 - 12.6 7.3 -
(MN-06 CW-1) At PCR 16.7 16.6 14.3 9.7 14.2
Thoubal-Kasom At appraisal 17.2 - 12.6 7.3 -
khulen (MN06CW-2) At PCR 15.1 15.0 12.8 8.5 12.7
Serchhip to Buarpui At appraisal 18.0 - 15.0 9.0 -
Road (Mizoram) At PCR 15.0 14.9 12.4 7.6 12.3
Udaipur to Melaghar At appraisal 22.9 - 19.1 14.4 -
(Tripura) At PCR 19.0 18.9 16.0 10.5 15.9
All Roads At PCR 15.3 15.3 13.0 8.5 12.9
EIRR = economic internal rate of return, PCR = project completion report.
Sources: ADB. 2013. Updated Facility Administration Manual. Manila; and the highway design manual (HDM)-
generated reports of the project completion report team.

I. Investment Program Economic Analysis

26. Overall, the EIRR of the investment program of all the states was not calculated at
appraisal. The reevaluation of project 1 has already been completed and presented in the
PCR in September 2023. The reevaluation of project 2 is presented above. The results of
the economic analysis for the two projects of the MFF are presented in Table A13.12.

Table A13.12: Results of Economic Analysis for All Projects

of the Multitranche Financing Facility
Project Overall Project at Completion

EIRR (%) NPV (₹ million)

Project 1 16.9 1290.5

Project 2 15.3 3162.1

Facility 15.8 3300.1

EIRR = economic internal rate of return, NPV = net present value.

Source: ADB. 2023. Completion Report: North Eastern State Roads Investment Program–Tranche 1. Manila.
Economic re-analysis of Project 2.

27. The overall EIRR for the investment program at completion was estimated at 15.8%
which is above the discount rate of 12%. The detailed cash flows of the EIRR calculations
for the project as well as each state is presented in Table A13.14.
86 Appendix 13

Table A13.13: Cost and Benefit Streams for Consolidated Project 2 Roads
(₹ million)
Year Capital Recurrent VOC Time Net Benefits

2016 1,194.51 -12.34 0.00 0.00 -1,182.17

2017 1,791.76 -12.34 9.65 -0.02 -1,769.80
2018 2,389.02 -16.09 55.39 1.29 -2,316.25
2019 3,583.52 -13.24 151.23 11.16 -3,407.90
2020 2,986.27 -12.34 280.60 51.10 -2,642.24
2021 0.00 -3.02 702.58 587.75 1,293.34
2022 0.00 -3.02 759.04 639.11 1,401.17
2023 0.00 -3.02 818.81 696.45 1,518.28
2024 0.00 -3.02 882.99 759.99 1,646.00
2025 0.00 611.69 952.71 830.69 1,171.72
2026 0.00 -3.02 1,089.48 908.62 2,001.12
2027 0.00 -3.02 1,185.18 995.13 2,183.33
2028 0.00 -3.02 1,292.51 1,097.51 2,393.04
2029 0.00 -3.02 1,418.56 1,219.44 2,641.02
2030 0.00 611.69 1,571.23 1,367.76 2,327.31
2031 0.00 -3.02 1,839.27 1,543.40 3,385.69
2032 0.00 -3.02 2,048.87 1,738.54 3,790.43
2033 0.00 -3.02 2,294.77 1,974.18 4,271.97
2034 0.00 -3.02 2,503.48 2,187.81 4,694.31
2035 0.00 611.71 2,746.13 2,445.17 4,579.59
2036 0.00 -3.02 3,197.40 2,776.11 5,976.53
2037 0.00 -3.02 3,524.75 3,095.70 6,623.47
2038 0.00 -3.02 3,987.51 3,536.42 7,526.94
2039 0.00 -3.02 4,331.32 3,799.68 8,134.02
2040 -579.81 -2.93 4,645.62 4,086.53 9,314.90
EIRR 15.3%
NPV 3162.12
EIRR = economic internal rate of return, NPV = net present value, VOC = vehicle operating cost.
Source: The highway design manual (HDM)-generated reports of the project completion report team.
 Appendix 13 87

Table A13.14: Cost and Benefit Streams for the Multitranche Financing Facility
(₹ million)
Year Capital Recurrent VOC Time Net Benefits
2012 0.00 -8.65 0.00 0.00 8.65
2013 98.11 -8.65 0.00 0.00 -89.46
2014 226.08 -8.65 0.00 0.00 -217.43
2015 127.97 -8.65 0.00 0.00 -119.32
2016 2,056.18 -20.99 0.00 0.00 -2,035.19
2017 2,367.63 -20.99 9.65 -0.02 -2,337.02
2018 2,973.42 -27.75 55.39 1.29 -2,888.99
2019 3,950.38 -22.12 151.23 11.16 -3,765.88
2020 4,091.09 -20.99 280.60 51.10 -3,738.41
2021 183.43 -5.13 1,138.22 803.67 1,763.59
2022 136.50 -5.13 1,232.83 875.91 1,977.36
2023 0.00 -5.13 1,332.32 956.48 2,293.93
2024 0.00 -5.13 1,438.47 1,045.68 2,489.28
2025 0.00 1,095.97 1,553.00 1,144.83 1,601.86
2026 0.00 -5.13 1,785.70 1,253.76 3,044.60
2027 0.00 -5.13 1,941.71 1,374.24 3,321.07
2028 0.00 -5.13 2,113.39 1,515.59 3,634.11
2029 0.00 -5.13 2,312.00 1,682.89 4,000.01
2030 0.00 1,095.97 2,546.87 1,884.53 3,335.42
2031 0.00 -5.13 2,987.46 2,122.77 5,115.36
2032 0.00 -5.13 3,308.12 2,385.45 5,698.70
2033 0.00 -5.13 3,666.00 2,691.85 6,362.98
2034 0.00 -5.13 3,989.71 2,980.92 6,975.76
2035 0.00 1,096.03 4,343.44 3,313.66 6,561.06
2036 0.00 -5.13 5,044.30 3,720.43 8,769.86
2037 0.00 -5.13 5,466.46 4,081.59 9,553.18
2038 0.00 -5.13 5,962.90 4,515.53 10,483.56
2039 0.00 -5.13 6,243.50 4,691.17 10,939.80
2040 -753.38 -4.87 6,466.97 4,895.61 12,120.83
EIRR 15.8%
NPV 3,300.05
EIRR = economic internal rate of return, NPV = net present value, VOC = vehicle operating cost.
Source: The highway design manual (HDM)-generated reports of the project completion report team.

J. Sustainability Analysis

28. The project will not generate revenue. In accordance with ADB guidelines, 4 the
financial sustainability of the project was assessed by considering the recurrent costs to be
assumed by the Assam, Manipur, Mizoram, and Tripura states (Table A13.6).

29. The sustainability of the project was evaluated by assessing the historical
expenditure allocated to all activities of the PWD by the Assam, Manipur, Mizoram, and

4 Financial Analysis and Evaluation, Technical Guidance Note (2019); Financial Due Diligence, A Methodology
Note (2009); and Financial Management and Analysis of Projects (the Guidelines, 2005).
88 Appendix 13

Tripura states, which includes repair and maintenance. Table A13.15 summarizes the four
states PWD’s total expenditure since FY2018.
 Appendix 13 89

Table A13.15: Road Maintenance Budget and Expenditure

(₹ million)
Assam a Manipur Mizoram Tripura
Fiscal Amount
Length Length of Length Length
Year/ Description
of Roads Capital Roads Amount of Roads Amount of Roads Amount
State Maintenance
(in km) Expenditure (in km) (in km) (in km)
Budget 26,276.65 9,514.14 609.00 2,257.00 1,430.00
2017 27,003 2,500 4,615 1,775
Expenditure 19,433.30 9,296.71 609.00 1,189.00 1,424.00
Budget 25,637.55 9,926.37 709.00 2,373.00 1,070.00
2018 30,073 2,647 4,648 1,425
Expenditure 19,667.20 8,109.09 709.00 2,008.00 1,069.65
Budget 60,551.60 7,766.00 647.00 2,545.00 950.00
2019 33,174 1,191 5,354 1,648
Expenditure 50,981.10 2,524.42 351.00 2,615.00 946.38
Budget 96,265.10 2,960.01 405.00 2,605.00 1,208.10
2020 37,711 1,064 5,678 1,531
Expenditure 80,848.30 1,101.80 347.00 1,680.00 1,205.29
Budget 98,192.75 1,498.53 844.00 3,200.00 1,150.00
2021 39,041 3,178 6,009 1,450
Expenditure 72,252.40 572.97 743.00 4,272.00 1,144.79
Budget 98663.57 2,548.82 773.13 4,083.07 1,500.00
2022 43,106 1,827.61 6,250 1,450
Expenditure 78.718.18 1,238.59 686.43 4,082.50 1,600.00
Budget 102,478.28 2,771.90 4,188.57 1,600.00
2023 45,036 25,221.62 6,851 1,450
460.35 (upto
Expenditure (upto 4,118.57 2,400.00
31.10.2023)
31.10.2023)
₹ = Indian rupee, km = kilometer.
a Since 2018–2019 onward, the capital expenditure has been substantially high due to the inclusion of repair and rehabilitation of damaged roads due to floods.

Source: The Public Works Departments of the four states; and their historical maintenance expenditures.

30. From Table A13.15, the four states’ PWDs expenditure for road maintenance has been relatively constant from FY2018 to
FY2022. To maintain the roads in good condition, PWDs found the expenditure incurred in the last 5 years consistent and sufficient.
The state governments are also committed to a sustainable road maintenance by adopting efficient contracting modes, such as the
engineering procurement and construction (EPC), and the build–operate–transfer (BOT) where performance-based maintenance is
built in the contract. The four states’ PWD’s assessment of the yearly maintenance budget requirement and expenditure is on a
need basis or according to the actual ground requirements. Ground requirements cover the estimation for routine, recurrent,
specific, periodic, and emergency maintenance.
90 Appendix 14

SUMMARY OF THE SOCIOECONOMIC IMPACTS

A. Socioeconomic Development for the Participating States in Project 2

1. According to the 2011 census, the total population of North Eastern states was 45
million, the population density was 174 per square kilometer. The per capita income of the
Assam, Manipur, and Tripura is lower than India, whereas Mizoram is on the higher side.1 The
economy of the region is largely agrarian in nature with over 70% of the population engaged in
agriculture for livelihood, service sector comes next, and the manufacturing sector is still at a
nascent stage. However, the region is an emerging market of 400 million people, including the
neighboring nations of Bangladesh, Myanmar, Bhutan, and Nepal. The region has hydropower
potential estimated at nearly 50,000 MW, natural gas reserves of 190 billion cubic meters, coal
reserves of over 900 million tons, and oil reserves of over 500 million tons. Large mineral
resources, including limestone reserves of around 5000 million tons and a forest cover that is
25% of the country’s forest area. Apart from above, and due to its strategic location, there were
numerous development activities initiated by the Government of India. The Prime Minister’s
Development Initiative for NorthEast (PM-DevINE) will be implemented through the North-
Eastern Council, which will boost the economy of the region.

B. Road Sector Development

2. Roads comprise the predominant mode of transport services in the state because of its
topography. Major initiatives for road development in recent years is going to substantially
benefit all sectors, including agriculture, mining, tourism, education, and heath care. As of
2017–2018, the total length of the roads in the NER was 573,983 kilometers (km), including
13,640 km of national highways, 20,138 km of state highways, 39,425 km of major district
roads, 9,406 km of urban roads, and remaining rural roads. Under the SARDP-NE, about 8,000
km of national highways and state roads are proposed for development.

C. Connectivity Improvement by the Project

3. At project 2 completion, 235.79 km of roads of six road sections were rehabilitated and
improved by widening and/or strengthening in three project states. The three outcome indicators
were achieved, as follows: (i) actual growth rates of traffic on the project and connector roads
was 9.89 %, which surpassed the assumed growth rate of 9%; (ii) vehicle operating cost on the
project roads reduced by 53% for three-axle trucks, and by 41% for passenger buses at
completion; and (iii) travel time on the project roads reduced by more than 50%.

D. Socioeconomic Impacts of the Project

4. Agricultural and land development. Land prices along the project roads have
escalated by an average of 43% (Table A14) due to improved roads, and this trend is
continuing. Prior to the road improvements, the region was not considered very attractive for
economic activities. Improved roads are giving farmers access to better and larger markets and
higher profit margins. Improved access is also helping local youth remain in rural areas, thus,
contributing to the rise in agricultural land prices. These factors have contributed to the
appreciation of land prices.

5. Access to market and social services. With the improved road conditions, agricultural
traffic increased. After the project, farmers could travel easily to larger and distant markets. This

2
Government of India, Niti Ayog. 2021. National Multidimensional Poverty Index. New Delhi.
 Appendix 14 91

stimulated the development of local transport services. Adequate passenger transport services,
primarily minibuses and large jeeps, are operating. The bus service frequency has increased
on most of the project roads. Time taken to the nearest health center was reduced to less than
30 minutes on the project roads. The connectivity to various social and other service centers
has improved substantially, such as for education, banking services, and grain markets.
Noteworthy impacts include the following:

(i) Students, including girls, are able to travel to larger towns for higher education.
(ii) Villagers can access better health facilities in larger centers and doctors are now more
willing to visit and treat patients in the rural areas.
(iii) Access to banks and rural financial institutions have improved.
(iv) Farmers can travel to larger markets at greater distance to obtain better prices for their
produce.
(v) The rural community is better informed about market conditions and other matters.

6. Household income and poverty reduction. Surveys carried out after project
completion indicate that incomes of rural households increased by an average of 62%. The
higher incomes were mainly the result of commercial activities along the project roads with
increase in roadside businesses of hotels and/or dhabas, shops, and garages and/or workshops
due to increased traffic number. Many local laborers were hired by the project during its
implementation. The use of local construction materials and services helped to increase the
incomes of residents. These opportunities particularly helped those living below the poverty line.
These positive impacts on the socioeconomic development of the project area are expected to
be sustained.

7. Employment generation. Many local skilled and unskilled laborers obtained

opportunities to work in the construction of the project roads. Local construction material
suppliers hired additional laborers to meet the project demand. Project construction generated
the employment of some 7.9 million person-days during the implementation. Among the directly
employed local laborers, some 74% were unskilled laborers of which 21% were women. It is
observed that local transport services and roadside businesses were booming, which has
generated additional working opportunities in and around the project area. More than 100%
increase were observed in the commercial activities of hotels and cafes (Table A14), shops and
garages and/or workshops along the project roads, which created more employment
opportunities.

8. Road safety. Mandatory cautionary and information road signs were installed along the
project roads. Blind spots on road sections were given special attention during design and
implementation of the project. Shoulder improvements, culvert and bridge construction,
structural repairs, and other improvements contributed to safer road travel. Improved road
safety measures helped to reduce traffic congestion, especially during the rainy season.
However, some of the vehicles tend to exceed the speed limit due to the improved road
condition. Many pedestrians and mixed traffic of motorcycles, nonmotorized vehicles, and
animal-driven carts are on the project roads, especially in residential areas. The PIUs, in
coordination with the local police provided additional safety measures like speed limit,
pedestrian crossing signs and markings, and fines for speed limit violators to address increased
traffic speed, which made it difficult for women and children to cross the roads.
 92 Appendix 14

Table A14: Summary of Socioeconomic Impacts of the Project

Commercia
Househo Acci-
Land Value l Land Time to Time to Time to Hotel/ Garage/
Con-tract IRI mm/km Poverty ld In- Shop dents
Name of Road (₹ lac/ ha) Value (₹ Health Major District Dhaba Workshop
Pac-kage (Before/ After) Reduced come (In- (Increase) Redu-
(Increase) million/ ha) Center Hospital Hospital (Increase) (Increase)
crease) ced
(Increase)

AS-02 Tamulpur to Paneri 43% 68% 7,900/ 2,500 54% 54% 69% -21% 58% 114% 73% 143% -78%

AS-03 Paneri to Udalguri 53% 63% 8,200/ 2,800 56% 52% 70% -24% 58% 118% 63% 167% -56%

MN06-CW1 Tupul to Bishnupur 46% 80% 9,800/ 2,710 48% 60% 69% -22% 59% 80% 125% 150% -74%

Thoubal to Kasom
MN06-CW2 43% 73% 9,300/ 2,760 54% 64% 70% -21% 59% 103% 79% 80% -74%
khullen

Serchhip to Buarpui
MZ 46% 75% 6,200/ 2,750 33% 61% 58% -37% 78% 60% 44% 50% -65%
Road, Mizoram

TP Udaipur to Melaghar 27% 80% 9,750/ 2,700 69% 60% 69% -29% 62% 80% 125% 150% -74%

Average 43% 73% 8,525/ 2,703 52% 59% 67% -26% 62% 93% 85% 123% -70%
₹ = Indian rupee, ha = hectare.
Sources: The project implementation units of Assam, Manipur, Mizoram, and Tripura states.
 Appendix 15 93

CONTRIBUTION TO STRATEGY 2030 OPERATIONAL PRIORITIES

OP No. Corporate Results Expected Achieved Value Assessment
Framework Indicators Value
(Outputs and Outcomes)

1.3.1 Infrastructure assets 235.71 km 235.79 km of state Achieved. The aggregate

established or improved roads reconstructed or output is based on the
(km) rehabilitated actual road length and
observed traffic during the
first year of traffic
operations on the
improved project roads.

3.2.5 New and existing 235.71 km 235.79 km of state Achieved. All-weather

infrastructure assets roads reconstructed or road construction
made climate- and rehabilitated specifications were
disaster- resilient (km) incorporated during the
construction of the project
roads.

6.1.1 Government officials with Improved PWDs staff were Achieved. Under the
increased capacity to capacity of trained for one or more project, various training
design, implement, PWDs staff areas of road design programs were conducted
monitor, and evaluate and construction to improve the capacity of
number in
relevant measures. management, road the PWDs’ staff in the
(number) relevant safety, and essential areas of road design and
areas. knowledge of climate- construction management,
resilient design of road safety, and on
roads. essential knowledge on
climate-resilient road
designs.

km = kilometer, OP = operational priority, PWD = public work departments.

Sources: Asian Development Bank and the project implementation units of Assam, Manipur, Mizoram, and Tripura states.