The World Bank Uttar Pradesh Pro-Poor Tourism Development Project (P146936) REPORT NO.: RES53957 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF UTTAR PRADESH PRO-POOR TOURISM DEVELOPMENT PROJECT APPROVED ON DECEMBER 20, 2017 TO STATE GOVERNMENT OF UTTAR PRADESH URBAN, RESILIENCE AND LAND SOUTH ASIA Regional Vice President: Martin Raiser Country Director: Auguste Tano Kouame Regional Director: Bernice K. Van Bronkhorst Practice Manager/Manager: Meskerem Brhane Task Team Leader(s): Stefania B. Abakerli B The World Bank Uttar Pradesh Pro-Poor Tourism Development Project (P146936) I. BASIC DATA Product Information Project ID Financing Instrument P146936 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 20-Dec-2017 30-Dec-2022 Organizations Borrower Responsible Agency State Government of Uttar Pradesh Department of Tourism, Government of Uttar Pradesh Project Development Objective (PDO) Original PDO The Project Development Objective is to increase tourism-related benefits for local communities in targeted destinations Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-88110 20-Dec-2017 28-Dec-2017 15-Mar-2018 30-Dec-2022 35.42 15.13 20.29 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank Uttar Pradesh Pro-Poor Tourism Development Project (P146936) 1. Background. The US$40 million loan for the Uttar Pradesh Pro-Poor Tourism development Project (P146936; Loan No. IBRD-8811-IN, the Project) was approved by the Bank on December 20, 2017, became effective on March 15, 2018, and has a closing date of December 31, 2022. The Project Development Objective (PDO) is to increase tourism- related benefits for local communities in targeted destinations. The project has four components: (i) Destination Planning and Governance; (ii) Tourist Products Development and Management; (iii) Support to Local Economic Development; and (iv) Project Management. 2. Project Performance. The likelihood of achieving the PDO and project Implementation Progress are rated as ‘Satisfactory’ and ‘Moderately Satisfactory’, respectively. End of project targets of two of the four PDO level indicators have been surpassed: (i) households with improved conditions; and (ii) support to poor entrepreneurs in targeted areas. The project is starting to collect data on the other two indicators that have not yet been measured due to the impacts of the COVID-19 pandemic on the tourism sector in general: (i) increase in the average daily tourist expenditure in project destinations; and (ii) increase in average duration of stay of tourists in the project areas. The targets of two of the five intermediate indicators have also been surpassed: (i) number of local entrepreneurs or small businesses provided with improved business development capacities, infrastructure, and tools; and (ii) number of community consultations held. The other three indicators are making progress towards their respective targets. 3. Compliance with social and environmental safeguards is rated ‘Satisfactory’: all Resettlement Action Plans (RAPs) and Environmental and Social Management Plans (ESMPs) are being implemented in an acceptable manner; and social mobilization and jobs creation/income generation activities are being carried out satisfactorily. Financial Management (FM) and Procurement are rated as ‘Satisfactory’ and ‘Moderately Satisfactory’, respectively. Timely FM reports are being received from the project implementing agency and all audit reports have been submitted on time with no pending issues. The procurement plan has been updated and the model bid documents provided by the Bank are being used for all procurement activities. 4. Status of Implementation. As of October 30, 2022, 43 percent of the loan had disbursed. Project implementation is delayed, partly due to the repeated lockdowns in the state starting from early 2020 because of the COVID-19 pandemic, and the time taken to make decisions related to project implementation. Institutional arrangements have since been streamlined, initial sub-projects have been completed with notable results amid the pandemic, all clearances have been obtained and the remaining contracts under the project are ongoing. The status of implementation of the project components is summarized below. 5. Component 1: Destination Planning and Governance. Three of the five activities financed have been completed: (i) preparation of urban design guidelines for Agra and the Banke Bihari Temple area in Vrindavan; (ii) preparation of a training program in hospitality for street vendors and other poor service providers; and (iii) support to institutional convergences and community participation for destination planning, service delivery and local economic development. The project is currently working on the two remaining activities for the statewide mainstreaming of the project’s approach and lessons, documentation of results, and organization of workshops and peer-to-peer learning events across the state. 6. Component 2: Tourist Products Development and Management. Five of the ten multi-sectoral sub-projects and activities financed have been completed: (i) Rehabilitation of the Banke Bihari Temple area in Vrindavan; (ii) Revitalization of the Shahjahan Park and the walkway between the Taj Mahal and Agra Fort; (iii) Revitalization of the Kachhpura and Mehtab Bagh area in Agra; (iv) supervision consultancy for Year 1 sub-projects; and (v) baseline data collection and preparation of feasibility studies for area-based spatial strategies and income generation/business The World Bank Uttar Pradesh Pro-Poor Tourism Development Project (P146936) development micro plans in Sarnath and Kushinagar. The remaining five sub-projects - (i) Execution of the sewerage pipeline for Kachhpura in Agra, (ii) Construction of a Center for Living Traditions, Integrated Flower Management Center, Pushak Artisan Center and Tulsi Artisan Center in the Braj Region, (iii) Regeneration of Sarnath's core area, (iv) Regeneration of the main tourist attractions in Kushinagar, and (v) a new Sound and Light Show at Agra Fort - are ongoing and require an additional five to nine months beyond the current loan closing date for their completion. 7. Component 3: Support to Local Economic Development. The mapping and assessment of the creative industries in the Braj Region, Agra, and Buddhist destinations in the state have been completed. Value chain analyses have been conducted and micro plans have been developed for each of the selected products in Agra and the Braj Region and will be completed by mid-December for Sarnath and Kushinagar. Social mobilization and business development support have also been provided to the targeted poor women and craftsmen in Agra and the Braj Region and are being carried out in Sarnath and Kushinagar. 8. Component 4: Project Management. The project implementation entities (the Development Authorities in Agra, the Braj Region, Sarnath and Kushinagar) have been monitoring the implementation of sub-projects closely through weekly reviews with the respective contractors. The project’s Monitoring and Implementation System continues to capture the status of achievement of the targets of the Results Framework indicators, both overall and disaggregated by gender. Project audits and communication activities for the implementation, management and coordination of sub- projects and activities are ongoing. 9. Rationale for Extension. The COVID-19 pandemic in the state was highly disruptive and severely impacted project implementation. The various pandemic related lockdowns imposed in the project areas led to a scarcity of labor and materials, as well as access to the project areas and stoppage of all work. The pandemic also significantly affected everyday functioning of the state agencies and the Development Authorities, as staff were diverted from their regular tasks to fight the pandemic. Project implementation is now being supervised by the Chief Secretary, who chaired an Empowered Committee meeting in mid-September and instructed all concerned agencies to expedite the works and meet the agreed targets. Project agencies have prepared a timebound action plan to complete the remaining activities by the proposed extension of the loan closing date. The plan has been reviewed by the Bank and is considered acceptable. 10. Summary of Changes. The Loan Closing Date is proposed to be extended by 15 months to March 31, 2024, to enable the remaining project activities to be completed as per the action plan. This is the first extension of the loan closing date. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications The World Bank Uttar Pradesh Pro-Poor Tourism Development Project (P146936) IBRD-88110 Effective 30-Dec-2022 31-Mar-2024 31-Jul-2024