Supplemental Letter INDIA July 29, 2024 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America INDIA: Loan No. 9324-IN (Additional Financing for the Karnataka Urban Water Supply Modernization Project) Performance Monitoring Indicators Dear Sirs and Mesdames: We refer to Section II 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 Additional Financing - Karnataka Urban Water Supply Modernization Project Project Development Objective(s) The Project Development Objective is to provide city-wide access to a continuous piped water supply in eligible cities in the state of Karnataka, to strengthen service delivery arrangements at the city level and in case of an Eligible Crisis or Emergency, respond promptly and effectively to it. Project Development Objective Indicators by Objectives/ Outcomes Indicator Name PBC Baseline End Target Provide citywide access to a continuous piped water supply in the eligible cities in Karnataka Direct project beneficiaries (CRI, Number) 254,700.00 2,799,085.00 Action: This indicator has been Revised Female beneficiaries (CRI, Percentage) 48,000.00 1,400,000.00 Action: This indicator has been Revised PPPs for water service delivery awarded and functioning 0.00 3.00 (Number) Action: This indicator has been Revised To strengthen service delivery arrangements at the city level Operations escrow accounts functioning without a continuing breach of covenants during the reporting year (Number) 0.00 1.00 Action: This indicator has been Marked for Deletion Establishment of operational city-owned water company 0.00 3.00 responsible for water services in each city (Number) Action: This indicator has been Revised Intermediate Results Indicators by Components Indicator Name PBC Baseline End Target Capital Investment Program Number of people in urban areas provided with access to 0.00 200,000.00 Improved Water Sources under the project (CRI, Number) Action: This indicator has been Marked for Deletion New piped household water connections that are resulting from 0.00 60,000.00 the project intervention (CRI, Number) Action: This indicator has been Marked for Deletion Lenght of new distribution pipeline installed (Kilometers) (Number) 0.00 1,500.00 Action: This indicator has been Marked for Deletion Piped household water connections that are benefiting from 0.00 96,000.00 rehabilitation works undertaken by the project (CRI, Number) Action: This indicator has been Marked for Deletion Additional Treatment Plant capacity Installed (MLD) (Number) 0.00 50.00 Action: This indicator has been Marked for Deletion DMAs with 25% Leakage or less (Number) 0.00 50.00 Action: This indicator has been Marked for Deletion No of BPL beneficiaries of piped house connections due to 111,098.00 1,343,403.00 Project interventions (Number) Action: This indicator is New Increase in bulk water supply due to project interventions (Liters (Million)) 0.00 125.00 Action: This indicator is New Indicator Name PBC Baseline End Target Climate Indicator - Percentage of household connections converted to continuous pressurized water supply, to alleviate pressure on groundwater consumption in drought-vulnerable 76,882.00 345,011.00 areas (Number) Action: This indicator is New Institution Building Number of water utilities that the project is supporting (CRI, Number) 0.00 1.00 Action: This indicator has been Marked for Deletion No of Project ULBs that complete at least 50% of actions 0.00 3.00 specified by the UIF (Number) Action: This indicator has been Revised Geographic information system (GIS) functioning (Number) 0.00 3.00 Action: This indicator has been Revised Debt service and Operations escrow accounts functioning without a continuing breach of covenants during the reporting 0.00 6.00 year (Number) Action: This indicator has been Revised Online water quality, flow and pressure monitoring system 0.00 3.00 operational in each city (Number) Action: This indicator has been Revised Percentage of O&M cost recovery from customer tariffs 0.00 70.00 (Percentage) Action: This indicator has been Revised Hubbali-Dharwad (Percentage) 0.00 70.00 Indicator Name PBC Baseline End Target Action: This indicator is New Belagavi (Percentage) 0.00 70.00 Action: This indicator is New Kalaburagi (Percentage) 0.00 55.00 Action: This indicator is New At least 25% of newly recruited/deputed staff in executive roles in KUIDFC PMU and PIUs, and city water companies are female 0.00 25.00 (Percentage) Action: This indicator is New Timely submission of annual audited accounts by the city water 0.00 3.00 companies (Number) Action: This indicator is New Technical Assistance for Sector Development Grievances registered related to delivery of project benefits addressed (%) (CRI, Percentage) 0.00 95.00 Action: This indicator has been Marked for Deletion Grievances related to delivery of project benefits that are 0.00 95.00 addressed-(number) (CRI, Number) Action: This indicator has been Marked for Deletion Customer feedback survey completed in each eligible city and 0.00 3.00 available online (Number) Action: This indicator has been Revised %age of female respondents reporting at least satisfactory water services provided in the Annual customer feedback survey 0.00 50.00 (Percentage) Action: This indicator is New Indicator Name PBC Baseline End Target Rehabilitation and safety improvement works of all dams/reservoirs completed, based on assessments and remedies 0.00 4.00 acceptable to the Bank (Number) Action: This indicator is New Percentage of grievances addressed within 30 days of receipt 0.00 95.00 (Percentage) Action: This indicator is New Monitoring & Evaluation Plan: PDO Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Direct beneficiaries are people or groups who directly derive benefits from an intervention (i.e., children who benefit from Annual an immunization program; reporting, families that have a new Operator piped water connection). Operator collects the will report Please note that this data on connections to KUIDFC indicator requires Operators and converted to 24x7 water on a PMU Direct project beneficiaries supplemental information. DBO Engineer supply in each city, quarterly Supplemental Value: which are verified by the basis once Female beneficiaries DBO Engineer. customer (percentage). Based on the survey is assessment and definition completed of direct project beneficiaries, specify what proportion of the direct project beneficiaries are female. This indicator is calculated as a percentage. Technical Female beneficiaries PMU Auditor Annual Certification Private Operator appointed and has taken over water supply operations in each Project city. Private Operator achieves average Technical PPPs for water service delivery awarded score of at least 70% across PMU Auditor Annual and functioning performance indicators Certification specified in Schedule 11 of the Operator Agreement (when this becomes applicable) Operator provides a Operations escrow accounts functioning PIUs and Financial report certified by DBO without a continuing breach of covenants Annual PMU Accounts Engineer during the reporting year City-owned as evidenced as at least 51% of each city water company is owned by the ULB. Operational as evidenced by: (i) delegation of powers ULB/City KUIDFC certification of Establishment of operational city-owned from GoK and ULB to city Annual water (i) and (ii). Independent PMU water company responsible for water water company within 1 company audit of (iii) services in each city year from takeover date; From 2nd year of city water company formation - (ii) at least 75% of city water company positions filled by full-time staff Monitoring & Evaluation Plan: Intermediate Results Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Number of people in urban areas PIU/Private Customer Annual provided with access to Improved Water operator database Sources under the project Number of new piped household water connections which result from the project intervention. A piped household water connection is defined as a connection that provides piped water to the consumer through either a New piped household water connections house or yard PIU/Private Customer that are resulting from the project Annual connection. Hence, they Operator database intervention do not include, inter alia, standpipes, protected well, borehole, protected spring, piped water provided through tanker trucks, or vendors, unprotected wells, unprotected spring, rivers, ponds and other surface water bodies, or bottled water. Lenght of new distribution pipeline PIU/Private 1500 Max SIP Annual installed (Kilometers) Operators Number of piped household water connections benefiting from rehabilitation works. This indicator is measured as the number of piped Piped household water connections that household water PIU/Private Customer are benefiting from rehabilitation works connections benefiting Annual Operator database undertaken by the project from rehabilitation works. Rehabilitation works are undertaken so that existing customers see the quantity and/or quality of their water supply services enhanced. PIUs/ Additional Treatment Plant capacity 50 Max Private SIP Annual Installed (MLD) Operators Project MIS PIU/Private DMAs with 25% Leakage or less 100. and approved Annual Operators SIPS Refers to people receiving continuous pressurized water supply as defined in the Operator contract in each city. Total no. of Operator collects the beneficiaries gaining 24/7 data on connections supply = Legal and Illegal Operator and converted to 24x7 water No of BPL beneficiaries of piped house existing HC without 24/7 Annual PMU DBO Engineer supply in each city, connections due to Project interventions supply + Houses built which are verified by the before project started with DBO Engineer and without access to stand post (improved/unimproved) + Houses built after the project started. [add baseline coverage] Operator will submit Operator and To be confirmed based on report which will be Increase in bulk water supply due to Annual DBO PMU the agreed Infrastructure verified by the DBO project interventions Engineer Improvement Plan Engineer Climate Indicator - Percentage of household connections converted to Annual continuous pressurized water supply, to alleviate pressure on groundwater consumption in drought-vulnerable areas Number of water utilities that the project PMU Project MIS Annual is supporting Project ULBs implement ULB compliance with UIF reforms that make them No of Project ULBs that complete at least Annual KUIDFC checklist is tracked by PMU eligible to receive incentive 50% of actions specified by the UIF KUIDFC grants from the Urban Incentive Fund administered by the KUIDFC GIS, comprising of all Operator submits infrastructure assets from Operator and updates GIS maps and Geographic information system (GIS) Annual PMU source to Customer DBOE these are certified by functioning connection point, and DBOE customers, functional. Debt service and Debt service and Operations escrow ULB/City operations escrow account Certification of bank accounts functioning without a continuing Annual water PMU functioning with any statements breach of covenants during the reporting company breach rectified within 15 year days. Online system with Operator performance Online water quality, flow and pressure continuous data logging of Operator and Annual reports, certified by PMU monitoring system operational in each water quality, flow and DBOE DBOE city pressure operational in each city ULB/City Prepared by ULB/City Percentage of O&M cost recovery from Revenue from user Annual Water Water Company, PMU customer tariffs charges/Operating Cost Company assisted by DBOE Hubbali-Dharwad Belagavi Kalaburagi KUIDFC, At least 25% of newly recruited/deputed Executive roles here ULB/City staff in executive roles in KUIDFC PMU excludes Data Entry Annual PMU Report PMU water and PIUs, and city water companies are Operators and Junior company female Assistants ULB/City Timely submission of annual audited Annual water Independent Audit PMU accounts by the city water companies company Grievances registered related to delivery Corporatio SIP Annual of project benefits addressed (%) n/Operator Grievances related to delivery of project benefits that are addressed- (number) Household Annual surveys conducted Customer feedback survey completed in Annual sample Sample Survey ULB, assisted by SO and results made available each eligible city and available online survey online Satisfaction with water services to be defined in Annual customer terms of: (i) hours of water Household %age of female respondents reporting at feedback survey, female supply; (ii) water pressure; Annual sample ULB, assisted by SO least satisfactory water services provided respondents sub- (iii) quality of water survey in the Annual customer feedback survey sample supplied; and (iv) time saving (ask gender team for advice on measurement). KUIDFC PMU provides Rehabilitation and safety improvement Agreed dam safety ULB/city quarterly progress KUIDFC PMU, assisted by works of all dams/reservoirs completed, measures implemented for Annual water reports which are DBOE based on assessments and remedies 4 dams that supply water company certified by DBOE acceptable to the Bank to Project cities Monitoring City water Percentage of grievances addressed Quarterly reports company/Private within 30 days of receipt Operator