Document of The World Bank Report No: 67032 v1 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF MAHARASHTRA WATER SECTOR IMPROVEMENT PROJECT LOAN NO 47960-IN JUNE 23, 2005 TO THE REPUBLIC OF INDIA February 23, 2012 DATA SHEET 1. Basic Information Project ID & Name P084790: IN: Maharashtra Water Sector Improvement Project Country India Task Team Leader Radhey. S. Pathak Sector Manager/Director Simeon Kakou Ehui Country Director N. Roberto Zagha Original Board Approval Date 06/23/2005 Original Closing Date: 03/31/2012 Current Closing Date 03/31/2012 Proposed Closing Date [if applicable] 03/28/2014 EA Category A-Full Assessment Revised EA Category A-Full Assessment-Full Assessment EA Completion Date 06/30/2004 Revised EA Completion Date 2. Revised Financing Plan (US$m) Source Original Revised BORR 61.15 61.15 IBRD 325.00 325.00 ZFAR 7.62 7.62 Total 393.77 393.77 3. Borrower Organization Department Location Department of Economic Affairs, India Government of India 4. Implementing Agency Organization Department Location Government of Maharashtra Water Resources Department Maharashtra, India 2 5. Disbursement Estimates (US$m) Actual amount disbursed as of 02/14/2012 215.54 Fiscal Year Annual Cumulative 2005 0.00 0.00 2006 31.81 31.81 2007 0.77 32.58 2008 16.92 49.50 2009 47.10 96.60 2010 59.51 156.11 2011 53.42 209.53 2012 6.01 215.54 Total 215.54 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured projects trigger any new safeguard policies? If yes, please select N from the checklist below and update ISDS accordingly before submitting the package. 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The project development objectives are: (i) to strengthen the state's capacity for multi-sectoral planning, development and sustainable management of the water resources; and (ii) to improve irrigation service delivery and productivity of irrigated agriculture. 7b. Revised Project Development Objectives/Outcomes [if applicable] 3 Extension of Closing Date INDIA — MAHARASHTRA WATER SECTOR IMPROVEMENT PROJECT P084790 (LOAN NO. 4796-IN) Restructuring Paper 1. The Loan closing date for India, Maharashtra Water Sector Improvement Project, [Loan No 4796], P084790 will be extended from March 31, 2012 until March 28, 2014 based on a formal request from the Department of Economic Affairs, Ministry of Finance, Government of India. 2. Initially the project made a slow start on award of civil works contracts of canal rehabilitation/modernization and dam safety, as the main focus of the Government of Maharashtra (GoM) in the initial two years was on completion of key institutional and regulatory reform actions. The project is supporting a number of key policy, legal, institutional, regulatory and service delivery related water sector reform initiatives in Maharashtra. These include: (i) establishing a regulatory institution in the water sector, namely Maharashtra Water Resources Regulatory Authority (MWRRA), (ii) restructuring of the Water Resources Department (WRD), (iii) restructuring of the existing Maharashtra Krishna Valley Development Corporation (MKVDC) into a river basin agency, (iv) formation of Water Users Organizations (WUOs) in 236 irrigation schemes, (v) transfer of irrigation systems and irrigation services delivery management to WUOs in the said irrigation schemes on completion of rehabilitation/modernization works, and (vi) volumetric and bulk supply of irrigation water to WUOs as per their water entitlements in the said irrigation schemes. Project implementation at this stage is satisfactory. Except for the restructuring of MKVDC in to a river basin agency, all other institutional/regulatory reform actions have been completed; and linked to completion of canal rehabilitation/modernization works, irrigation system management has been transferred to 625 WUOs and water entitlements have been issued to 550 WUOs till date. Civil works contracts relating to canal rehabilitation/modernization in 236 schemes and dam safety works in 277 dams have been awarded, and the loan amount is fully committed. Of the above 236 irrigation schemes, canal rehabilitation/modernization works in 136 schemes have been completed, and the works in an additional 38 schemes are at various stages of implementation and are scheduled to be completed by March 31, 2012. Thus, canal rehabilitation/modernization works are likely to be completed in 174 schemes (74 percent) by the current project closing date of March 31, 2012. However, completion of the works in the remaining 62 schemes (26 percent) would spill beyond March 31, 2012. Further, of the 277 dams, dam safety works in 159 dams have been completed, and works in an additional 63 dams are at various stages of implementation and are scheduled to be completed by March 31, 2012. Thus, dam safety works in 222 dams (80 percent) are likely to be completed by current project closing date of March 31, 4 2012. However, completion of the dam safety works in the remaining 55 dams (about 20 percent) would spill beyond March 31, 2012. Activities under other components are also progressing well and have either been completed or are nearing completion. The disbursement under the project has reached about 67%. The left-over activities would be completed and the entire Loan amount utilized during the proposed project extension period of two years. 3. The proposed loan extension of two years would enable the GoM to complete: (i) ongoing dam safety works in all the 277 dams, and canal rehabilitation/modernization works in 234 of 236 (99%) irrigation schemes covered under the project; (ii) major irrigation sector reforms actions of irrigation management transfer and implementation of water entitlements to the WUOs in 234 completed schemes as these reforms are linked to the rehabilitation/modernization of irrigation schemes, (iii) restructuring of MKVDC in to a river basin agency and (iv) further consolidation and deepening of other completed/ongoing water sector reform initiatives besides helping achieve the project development objective fully. 4. This will be the first extension of the loan closing date. 5