Supplemental Letter INDIA March 6, 2024 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America INDIA: Loan No. 9449-IN (Gujarat Resilient Cities Partnership: Ahmedabad City Resilience Project) Performance Monitoring Indicators Dear Sirs and Mesdames: We refer to Section II.1 of Schedule 2 to the Loan Agreement of even date between India and the International Bank for Reconstruction and Development (Bank). Unless otherwise agreed with the Bank, we shall monitor and evaluate implementation of the Project in accordance with the Performance Monitoring Indicators attached to this letter. Very truly yours, INDIA By_______________________ Authorized Representative Attachment – Performance Monitoring Indicators Results Framework COUNTRY: India Gujarat Resilient Cities Partnership: Ahmedabad City Resilience Project Project Development Objectives(s) To strengthen institutional, financial and service delivery performance in Ahmedabad Project Development Objective Indicators Indicator Name PBC Baseline End Target Enhance resilient and sustainable service delivery, institutional and financial systems in Ahmedabad properties are not geo-tagged in GIS for tax administration At least 900,000 active properties have been geo-coded Improved performance of AMC's property tax systems (Text) PBC 4 purposes in the database by AMC. People with access to improved, climate-resilient wastewater services (Corporate Results Indicator [CRI], Climate indicator) 0.00 1,500,000.00 (Number) Certified accounts of wastewater operations of the previous year published with consolidated actual capital Improved performance of AMC's wastewater management Fragmented capital planning, O&M planning and revenue and O&M expenditure and revenue including tax, user systems (Text) management system charges; and subsidy. Intermediate Results Indicators by Components Indicator Name PBC Baseline End Target Component 1: Strengthening AMC’s institutional and financial systems AMC has completed at least two billing cycles of User Charges for wastewater introduced (Text) PBC 6 0.00 wastewater user charges for commercial customers. IFMS system generates complete Balance Sheet / Annual IFMS system upgraded for better budgeting and accounting 0.00 Accounts for timely finalization of municipal accounts systems (Text) (within three months of FY closure) Disclosure of financial performance of AMC improved (Text) External audits are not done annually and reports are not AMC has disclosed in its website audited annual accounts PBC 7 disclosed publicly for 2021-22 and unaudited annual accounts for 2022-23 At least [1700] of wastewater pipelines, [6000] manholes, Wastewater assets are not available in digital form for AMC's wastewater assets digitized in GIS (Text) PBC 5 [20] pumping stations, [6] STPs and [750000] wastewater O&M planning connections digitized in GIS and ground truthing completed Percentage of consumers satisfied with wastewater and storm 0.00 75.00 water management services (Percentage) Component 2: Improving wastewater management services Wastewater discharge from AMC's treatment facilities is At least 90 percent of wastewater effluent samples in Environmental compliance for wastewater treatment systems PBC 1 not compliant with regulatory standards for treated previous quarter comply with disposal standards in achieved (Text) wastewater discharge identified STPs. Wastewater pollution and quality monitoring system AMC has disclosed at least two consecutive quarterly There is no wastewater quality and pollution monitoring PBC 2 effluent monitoring reports on wastewater network in a strengthened (Text) system financial year. At least 4 consecutive quarterly performance reviews of Performance orientation introduced in wastewater services AMC's wastewater management contracts do not include contractors carried out for [list of contracts] and payments PBC 3 (Text) performance indicators and monitoring mechanisms to respective contractors are determined based on the findings of performance review reports Additional quantity (MLD) of wastewater treated as per National Green Tribunal (NGT) norms (Number) 0.00 650.00 Indicator Name PBC Baseline End Target Percentage of informal women workers skilled and provided access to technical job roles in AMC's wastewater services 0.00 15.00 (Percentage) Component 3: Developing state level institutional systems and capacities IT based project lifecycle management system GUDM’s project and fiduciary management system 0.00 operationalized in GUDM and in at least 50 percent of operationalized (Text) municipalities Project implementation arrangement fully operationalized and Project implementation arrangement has been fully Project implementation arrangement to be operationalized staffed at AMC and GUDM (Text) operationalized and staffed Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection This indicator measures the AMC will provide the AMC with the AMC's MIS number of active properties PMC with access to the assistance of Project Improved performance of AMC's property Year 5 and GIS in the existing property tax GIS and MIS database Management tax systems database. database geo-referenced in of AMC. Consultants the GIS by AMC. Climate indicator: Measures AMC's AMC will consolidate the number of people customer and provide the GIS AMC (WRM People with access to improved, climate- accessing sustainable and Annual database for enabled customer department) with resilient wastewater services (Corporate climate-resilient wastewater priority database to PMC. The assistance of PMC Results Indicator [CRI], Climate indicator) services that will contribute service connection database to reduction of GHG catchment shall be converted at emissions. areas 4.5 people per connection for assessing the performance. AMC's This indicator aims at accounts AMC will prepare and measuring AMC's department make available to the performance in improving AMC (WRM and WRM PMC the consolidated Improved performance of AMC's its wastewater management Annual department) with department's and certified capital wastewater management systems systems including assistance of PMC expenditure and O&M budgets for preparation and publishing and revenue wastewater services. of certified accounts of records wastewater operations. Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Customer AMC will make database, bill available to the PMC ing and the customer database, This indicator will check if collection the billing and AMC has introduced system and collection system and AMC (WRM Department) wastewater user charges Year 4 User Charges for wastewater introduced documentati documentation of with assistance of PMC and measure if at least two on of municipal council/ GoG billing cycles for commercial municipal approval, customers are completed council/ GoG rules/amendments for approval, user charges. rules/amend ments for user charges. IFMS AMC will provide PMC generated co with access to the IFMS mplete system. PMC will assess This indicator measures AMC Balance the process of IFMS system upgraded for better overall financial Annual (Finance Department) Sheet / recording expenditure budgeting and accounting systems management performance with assistance of PMC Annual and revenue in IFMS, of AMC Accounts of and generating Annual AMC Accounts . PMC will access the unaudited and audited Disclosure of AMC's audited financial statements AMC with the assistance Disclosure of financial performance of Year 3 AMC website annual accounts in public through websites and of PMC AMC improved domain. through AMC's back end systems. AMC has digitized in GIS and completed ground truthing Digitized of at least [1700] kms of AMC will provide PMC AMC (WRM department) asset wastewater pipelines, Year 6 with access to the with the assistance of AMC's wastewater assets digitized in GIS database of [6000] manholes, [20] digitized asset database PMC AMC pumping stations, [6] STPs and [750000] wastewater connections. This indicator will measure AMC will make Percentage of consumers satisfied with Annual AMC (WRM department) the level of consumer Year 4 available the results of waste water and storm water Surveys with assistance of PMC satisfaction with regard to the annual survey to management services the waste water and storm PMC water management services provided by AMC Technical investigation reports of AMC will provide PMC the treated AMC (WRM department) Compliance of wastewater access to the statutory Environmental compliance for Year 5 wastewater with the assistance of effluent samples with reports submitted to wastewater treatment systems achieved samples as PMC disposal standards. the GPCB. per regulatory requirement Reports from AMC will provide PMC the access to quarterly Disclosure of reports from wastewater AMC (WRM department) Year 5 and wastewater quality Wastewater pollution and quality the wastewater quality and quality and with the assistance of 6 reports. monitoring system strengthened pollution pollution PMC control/monitoring system control/moni toring system AMC's AMC will Performance reviews of wastewater share operator AMC (WRM department) wastewater service contracts and Performance orientation introduced in Year 6 performance review with the assistance of operators performance wastewater services and operator payment PMC review records with PMC. reports AMC's AMC will share the AMC (WRM department) Additional quantity (MLD) of wastewater Additional MLD of Annual wastewater monitoring reports with with the assistance of treated as per National Green Tribunal wastewater treated (as per monitoring PMC PMC (NGT) norms NGT norms) reports for new STPs This indicator measures Rapid Gender informal women informal Assessment who received on-the-job Primary data collection AMC (WRM department) Percentage of informal women workers undertaken training, technical Year 5 using stratified with the assistance of skilled and provided access to technical during certification and are sampling PMC job roles in AMC's wastewater services project performing a technical job preparation role. (examples of job roles: masons, pump operators Project Operationalizing project lifecycle Periodic Progress GUDM’s project and fiduciary lifecycle management Year 2 management Reports submitted by GUDM management system operationalized system in GUDM and system in GUDM municipalities GUDM Government order passed by relevant authorities (e.g., AMC) This indicator will measure if establishing AMC and GUDM will the project implementation Project implementation arrangement fully the make available GOs and staff and arrangements have Year 1 AMC and GUDM operationalized and staffed at AMC and implementati details of staff been fully operationalized in GUDM on deployed to PMC AMC and GUDM for arrangement implementing the project (PIU, name of officers, positions, etc.) Performance-Based Conditions Matrix At least 90 percent of wastewater effluent samples in previous quarter comply with disposal standards in at least two (2) PBC 1 STPs. Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Percentage 20,000,000.00 7.10 Period Value Allocated Amount (USD) Formula Baseline 0.00 Year 1 0.00 0.00 0.00 Year 2 0.00 0.00 0.00 Year 3 0.00 0.00 0.00 Year 4 0.00 0.00 0.00 Year 5 90.00 20,000,000.00 The disbursement amount will be divided equally amongst the STPs targeted and disbursement will be for each STP. Year 6 0.00 0.00 0.00 PBC 2 AMC has disclosed at least two (2) consecutive quarterly effluent monitoring reports in wastewater network. Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Number 20,000,000.00 7.10 Period Value Allocated Amount (USD) Formula Baseline 0.00 Year 1 0.00 0.00 0.00 Year 2 0.00 0.00 0.00 Year 3 0.00 0.00 0.00 Year 4 0.00 0.00 0.00 Year 5 2.00 10,000,000.00 100 percent disbursement when two consecutive quarterly effluent monitoring reports in wastewater network are disclosed in a FY. Year 6 2.00 10,000,000.00 100 percent disbursement when two consecutive quarterly effluent monitoring reports in wastewater network are disclosed in a FY AMC has carried out atleast four consecutive quarterly performance reviews of contractors for at least two STPs and made PBC 3 payments to respective contractors as per finding of performance review report Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Number 20,000,000.00 7.10 Period Value Allocated Amount (USD) Formula Baseline 0.00 Year 1 0.00 0.00 0.00 Year 2 0.00 0.00 0.00 Year 3 0.00 0.00 0.00 Year 4 0.00 0.00 0.00 Year 5 0.00 0.00 0.00 Year 6 4.00 20,000,000.00 100percent disbursement on submission of performance review & payment reports of STP contractors PBC 4 AMC has geo-coded in the GIS database 900,000 active properties in the property tax database of AMC. Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Number 10,000,000.00 3.60 Period Value Allocated Amount (USD) Formula Baseline 0.00 Year 1 0.00 0.00 0.00 Year 2 0.00 0.00 0.00 Year 3 0.00 0.00 0.00 Year 4 0.00 0.00 0.00 Year 5 900,000.00 10,000,000.00 Disbursement will be proportionate to number of active properties geo- coded in GIS. US$11.11 for each property geocoded upto US$10mn Year 6 0.00 0.00 0.00 AMC has digitized in GIS and completed ground truthing of at least 1700 kms of wastewater pipelines, 6000 manholes, PBC 5 twenty (20) pumping stations, six (6) STPs and 750,000 wastewater connections. Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 20,000,000.00 7.10 Period Value Allocated Amount (USD) Formula Baseline Wastewater assets of AMC not digitized in GIS Year 1 0.00 0.00 0.00 Year 2 0.00 0.00 0.00 Year 3 0.00 0.00 0.00 Year 4 0.00 0.00 0.00 Year 5 0.00 0.00 0.00 Year 6 [1700 kms] of wastewater pipelines, [6000] 20,000,000.00 100 percent disbursement when all manholes, [20] pumping stations, [6] STPs and identified assets are digitized. [750000] wastewater connections PBC 6 AMC has completed at least two (2) billing cycles of wastewater user charges for commercial customers. Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Number 15,000,000.00 5.40 Period Value Allocated Amount (USD) Formula Baseline 0.00 Year 1 0.00 0.00 0.00 Year 2 0.00 0.00 0.00 Year 3 0.00 0.00 0.00 Year 4 2.00 15,000,000.00 100 percent disbursement upon completion Year 5 0.00 0.00 0.00 Year 6 0.00 0.00 0.00 PBC 7 AMC has disclosed in its website audited annual accounts for FY21-22 and unaudited annual accounts for FY22-23. Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Text 15,000,000.00 5.40 Period Value Allocated Amount (USD) Formula Baseline Audited annual accounts not available in AMC website Year 1 0.00 0.00 0.00 Year 2 0.00 0.00 0.00 Year 3 AMC has disclosed in its website audited annual 15,000,000.00 100 percent disbursement upon accounts for 2021-22 and unaudited annual achievement of PBC accounts for 2022-23 Year 4 0.00 0.00 0.00 Year 5 0.00 0.00 0.00 Year 6 0.00 0.00 0.00 Verification Protocol Table: Performance-Based Conditions At least 90 percent of wastewater effluent samples in previous quarter comply with disposal standards in at least two (2) PBC 1 STPs. Description At least 90 percent of wastewater effluent samples in previous quarter comply with disposal standards in identified STPs. Fund allocation expires at end of FY5 if PBC is not achieved. Data source/ Agency AMC Verification Entity PMC AMC will carry out wastewater effluent testing as per the effluent quality monitoring protocol (refer PIM). AMC will publish the statutory reports submitted to the Gujarat Pollution Control Board in its website. The PMC will verify that AMC is in conformance with the indicator based on these statutory reports. In its report, PMC will provide a comparison of the Procedure effluent quality requirements as per the standards and the achievement in each of the STPs in the previous quarter. The disbursement amount will be divided amongst the identified STPs equally. Achievement will be calculated for each STP separately and accordingly disbursements will also be made for each STP. PBC 2 AMC has disclosed at least two (2) consecutive quarterly effluent monitoring reports in wastewater network. At least two consecutive quarterly effluent monitoring reports in wastewater network disclosed in a financial year. Description Disbursements will be made for a maximum of two financial years. Fund allocation expires at end of FY6 if PBC is not achieved. Data source/ Agency AMC Verification Entity PMC AMC will carry out wastewater quality monitoring as per the protocol provided (refer PIM) and publish quarterly wastewater quality reports in its website. The PMC will verify the reports published on the website and confirm that the scope of monitoring adheres to the protocol (locations of monitoring, sampling frequency, parameters to be tested, testing method to be followed, reporting requirements, analysis and follow-up actions taken). In its report, PMC will provide a comparison of the monitoring requirements and the actual practice, whether AMC is in Procedure compliance with the monitoring requirements for the quarter and for two successive quarters including the current reporting quarter. In case of lapses, that in PMC’s opinion are minor and do not negate the overall conformance with the monitoring requirement, the PMC will list such lapses and provide its justification of why it considers these as minor lapses. PMC will also confirm that AMC has carried out a baseline testing as per the same protocol prior to 31st March 2023 and the baseline report is disclosed in the website of AMC. AMC has carried out atleast four consecutive quarterly performance reviews of contractors for at least two STPs and PBC 3 made payments to respective contractors as per finding of performance review report At least 4 consecutive quarterly performance reviews of contractors carried out for 2 STPs. Payments to respective Description contractors are determined based on the findings of performance review reports. Fund allocation expires at end of FY6 if PBC is not achieved. Data source/ Agency AMC Verification Entity PMC AMC will enter into performance-based contracts for identified STPs. The contracts will link operator revenue/fee/payments to performance. The performance will measure output/outcomes during construction stage as well as O&M. AMC will carry out performance evaluation of the operator during O&M stage. AMC will prepare and submit a) operator performance review and b) operator payment based on performance which may Procedure include deductions/ incentives. The PMC will verify that a) performance review is conducted as per the schedule for review provided in the contracts, b) the scope of the review covers all performance evaluations as included in the contract and c) the payments to the operator reflect all the provisions in the contract that link payments to performance and the results of the performance evaluation. PBC 4 AMC has geo-coded in the GIS database 900,000 active properties in the property tax database of AMC. At least 900,000 active properties have been geo-coded in the database by AMC. Disbursement will be proportionate to Description number of active properties geo-coded in GIS, subject to minimum achievement of [40 percent] of target. US$11.11 for each property geocoded subject to a maximum of US$10 Mn. Fund allocation expires at end of FY5 if PBC is not achieved. Data source/ Agency AMC Verification Entity PMC AMC will be responsible for updating the property tax layer of the GIS database. It will geo-code the properties in the Procedure existing MIS database on the GIS platform. AMC will provide the PMC with access to the GIS and MIS database of AMC. The PMC will verify that a) the number of active properties that have been geo coded as on the verification date, b) it is possible to retrieve property information as maintained in the MIS database from the GIS database and c) the disbursement that is due to AMC based on the actual number of properties geo coded. Geo coding means selecting a property polygon (marking location) on Map from address of Property available in Database. Active properties refer to properties that have made at least one property tax payment in the three years ending 31st March 2022. A minimum of 40 percent of target needs to be geo-coded to trigger any disbursement under this PBC. AMC has digitized in GIS and completed ground truthing of at least 1700 kms of wastewater pipelines, 6000 manholes, PBC 5 twenty (20) pumping stations, six (6) STPs and 750,000 wastewater connections. AMC has digitized in GIS (from available maps or Ground Survey of assets for which maps/information are not available) and Description completed ground truthing of at least [1700 kms] of wastewater pipelines, [6000] manholes, [20] pumping stations, [6] STPs and [750000] wastewater connections. Fund allocation expires at end of FY6 if PBC is not achieved. Data source/ Agency AMC Verification Entity PMC The quantities correspond to approximately [75 percent] of the pipeline length, manholes and connections estimated and will be updated after baseline survey is completed by 31st March 2023; and number of major pumping stations and STPs. Digitization implies recording of the following information for each category of assets to be digitized. 1. Sewage major assets (STP/Pumping Station Name & ID, Capacity.) 2. Network (Pipe ID, Pipe Diameter, Pipe Section Length, Pipe Material, Year of Installation, Start & End Node/Point as Manhole ID/Pumping Station ID, Joint Node ID) Procedure 3. Manholes (Manhole ID) 4. Sewage connections (Connection ID, Start Point as Property Code/no. from Property Tax Database, End Point as Joint Node ID) Ground truthing means verifying mapped information on ground to verify/ confirm accuracy of mapping and attribute information. PBC 6 AMC has completed at least two (2) billing cycles of wastewater user charges for commercial customers. AMC has completed at least two billing cycles of wastewater user charges for commercial customers (including industrial Description customers if applicable). Fund allocation expires at end of FY4 if PBC is not achieved. Data source/ Agency AMC Verification Entity PMC AMC will introduce user charges for wastewater for commercial properties after obtaining the required approvals from the municipal council/ State Government or amendments in the municipal act/ rules as may be necessary. User charges for wastewater will mean a method of levying wastewater charges other than the current method which is calculated as a percentage of property tax. The user charges may be levied based on water consumption, estimated wastewater discharge, or any other method and may be differentiated based on the size of the customer, type of commercial activity etc. Billing cycle of user charge would imply one cycle of issue and collection of bills to commercial customers for wastewater. The frequency of charging could be monthly or quarterly or any other frequency. If the billing cycle is annual, then the Procedure requirement under this PBC would be one billing cycle. In other cases the requirement would be two billing cycles. AMC would have met all the legal requirements to levy user charges for wastewater, including, if required, GoG approval and/or Municipal Act amendment. AMC will also have a customer database and an IT application for billing and collection. AMC will make available to the PMC the customer database, the billing and collection system and documentation of municipal council/ GoG approval, rules/amendments for user charges. The PMC will verify that a) the legal basis for user charges for wastewater for commercial properties has been created, b) customer database exists to cover the targeted properties/users within AMC and c) that the required number of cycles of billing and collection have been completed. No quantitative targets are specified for billing or collection. PBC 7 AMC has disclosed in its website audited annual accounts for FY21-22 and unaudited annual accounts for FY22-23. AMC has disclosed in its website audited annual accounts for FY21-22 and unaudited annual accounts for FY22-23. Fund Description allocation expires on 30th June 2024 if PBC is unachieved. Data source/ Agency AMC Verification Entity PMC AMC will appoint consultants to prepare the financial statements of AMC. In addition, AMC will appoint independent auditors for audit of the financial statements. AMC will make the financial statements available in public domain (both unaudited and audited including comments of the auditor/ notes to the audit). Public domain means unrestricted access in the AMC website and any other Procedure means. Prior to disclosure, AMC will also obtain Standing Committee’s approval of the audited financial statements. The PMC will verify that a) the unaudited and audited financial statements were made available in public domain by the required date, b) they continue to remain available in public domain as on date of verification and c) the audited financial statements have been approved by the Standing Committee.