The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) REPORT NO.: RES42905 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF CAPACITY AUGMENTATION OF THE NATIONAL WATERWAY- 1 (JAL MARG VIKAS) PROJECT APPROVED ON APRIL 12, 2017 TO DEPARTMENT OF ECONOMIC AFFAIRS, GOVERNMENT OF INDIA TRANSPORT SOUTH ASIA Regional Vice President: Hartwig Schafer Country Director: Junaid Kamal Ahmad Regional Director: Guangzhe Chen Practice Manager/Manager: Shomik Raj Mehndiratta Task Team Leader(s): Arnab Bandyopadhyay, Charles Kunaka The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) ABBREVIATIONS AND ACRONYMS DEA Department of Economic Affairs, Ministry of Finance EoT Equip Operate and Transfer GoI Government of India IWT Inland Water Transport MMT Multi Modal Terminal NW1 National Waterway 1 OMDA Operation Management and Development Agreement PDO Project Development Objective USD United States Dollar Mn Million The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P148775 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 12-Apr-2017 31-Dec-2023 Organizations Borrower Responsible Agency Department of Economic Affairs, Government of India Inland Waterways Authority of India Project Development Objective (PDO) Original PDO The Project Development Objective is to enhance transport efficiency and reliability of National Waterway- 1 and augment institutional capacity for the development and management of India's inland waterway transport system in an environmentally sustainable manner. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-87520 12-Apr-2017 02-Feb-2018 23-Mar-2018 31-Dec-2023 375.00 99.20 275.80 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. PROJECT STATUS 1. The project is supporting the Government of India’s (GoI) ambitious plan to realize the potential of inland waterways as an alternative and sustainable mode of transport. The GoI wants to develop feasible inland waterway routes on priority and the National Waterway-1 (Jal Marg Vikas) is being augmented as first of its kind, flagship project. Passing through four resource-rich but low-income states (West Bengal, Jharkhand, Bihar, and Uttar Pradesh) NW-1 is the longest of the 111 existing National Waterways; it is a natural river system linking the seaport gateway at Kolkata (including Kolkata Docks and a deep-water dock at Haldia) to Allahabad, some 1,620kms inland, via the Hooghly / Bhagirathi and Ganga rivers. 2. The project has been designed to implement the two components: (i) Component A: Improving the Navigability of NW-1 (Haldia to Varanasi) (ii) Component B: Strengthening Institutional Capacities and Improving the Investment Climate, Vessel Design, and the Construction Framework 3. Component A: Improving the Navigability of NW-1 (Haldia to Varanasi) at originally estimated cost of USD770 million; and forms about 95% of the total project cost, which has achieved a financial progress of about 38%. The overall implementation progress continues to be satisfactory with about 66% of currently programmed works already committed. 4. Component B: Strengthening Institutional Capacities and Improving the Investment Climate, Vessel Design, and the Construction Framework at an estimated cost of USD 30 million. Vessel design prototype is ready and already available on implementing agency website. Procurement process for private operations on equip, operate and transfer (EOT) model for Varanasi and Haldia MMTs is initiated and OMDA for Sahibganj is in preparation. Disaster Management Framework for the entire ecosystem is finalized. A strategic training plan is being prepared for the institution to meet the growing demand of the IWT sector. 5. The overall loan commitment is currently about USD 172 million and it is estimated that the remaining components, until completion, would consume about an additional loan amount of about USD 85 million. The project, therefore, is expected to have a loan savings of USD 118 million, which corresponds to total savings of about USD 220 million in the overall project cost. To utilize about half of the loan savings (USD 60 million), GoI has recently decided to include navigation related parts of the recently launched Arth Ganga program. B. RATIONALE FOR RESTRUCTURING 6. Request for Restructuring: This restructuring is based on the request of Department of Economic Affairs of the Ministry of Finance letter No. F. No. 04/01/2014-Infra & Rural dated June 17, 2020, requesting for Cancelation of The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) USD 57.78 million out of USD 375 million from Jal Marg Vikas Project (or Capacity Augmentation of NW-1 Project) and utilizing part of the loan (about USD 60 million) for implementing the navigation related elements of Arth Ganga. 7. The partial loan cancellation is on account of exchange rate fluctuation and savings accrued due to variety of scope change and procurement efficiency measures. The proposed inclusion from Arth Ganga program, largely focused on benefiting the socio-economic needs for the riverside community through enhanced navigation facilities are fully congruent with the original project development objective. No changes, therefore, will be required in the original project development objective and some marginal modifications / inclusions will be necessary in the intermediate outcome indicators in the results matrix. It is noted that even after the subject cancelation, the remaining funds and the project time would be adequate to implementation period and the expenditure towards the activities that are committed and being financed under the project. II. DESCRIPTION OF PROPOSED CHANGES 9. Cancellation of loan amount of USD 57.78 million. After the cancellation the revised IBRD loan amount will be USD 317.22 Million. 10. Change in components and cost: The definition of the component A and B will undergo minor changes to include the specific features of the Arth Ganga program, as listed below. The current and revised loan allocation across the various sub-components would be as below. Please note that all components would undergo change in cost either on account of scope plus currency rate change or due to a combination of scope plus currency rate change and introduction of Arth Ganga elements. It is further clarified that the costs are fungible across various sub-components, as all these costs are captured under a single category in the loan agreement. Component Original Component description Revised Component description Original Revised allocation allocation USD mn USD mn Component A: Improving the Navigability of National Waterway – 1 770 665 A1 (a) Carrying out detailed topographic No change 10 14 and bathymetric surveys of Project sites; (b) preparing technical feasibility and detailed engineering studies for Project investments as well as approximately eighteen (18) passenger terminals to be constructed and operated by the Participating States; and (c) carrying out social and environmental impact assessment studies and ancillary mitigation plans therefor. The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) Component Original Component description Revised Component description Original Revised allocation allocation USD mn USD mn A2 Improving the fairway of National Improving the fairway of National 372 283.4 Waterway – 1 by carrying out dredging, Waterway – 1 by carrying out river conservancy piloting a dredging, river conservancy and river combination of performance-based training works piloting a combination assured depth contracts and input- of performance-based assured depth based dredging contracts. contracts and input-based dredging and river training works contracts. A3 Constructing permanent protections Constructing permanent protections 17 2.6 works for erosion-prone riverbanks in works for erosion-prone riverbanks in selected locations selected locations, including approaches to terminals and community jetties. A4 Rehabilitating the existing National No change 57 57 Waterway – 1’s navigational lock at Farakka and building a new parallel navigational lock to allow concurrent two-way passage. A5 Constructing: (a) six (6) multi- Constructing: (a) four (4) multi-modal 303 280.4 modal/inter-modal freight terminals; (b) freight terminals; (b) about forty new two (2) vessel repair and maintenance and twenty rehabilitated community facilities; and (c) five (5) pairs of roll- jetties; and (c) ten (10) pairs of roll- on/roll-off crossings. on/roll-off crossings. A6 (a) Installing navigational aids/facilities No change 11 27.6 and channel marking to enable night navigation; (b) developing and implementing app-based systems, improving communications platforms and expanding user research in order to enhance the existing river information system throughout the National Waterway 1; (c) supporting the development of a terminal management system; and (d) providing navigation support services such as search and rescue, distress response The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) Component Original Component description Revised Component description Original Revised allocation allocation USD mn USD mn and casualty incident management, and upgrading vessel and river monitoring systems. Component B: Strengthening Institutional Capacities and Improving the Investment Climate, 30 25 Vessel Design and Construction Framework. B1 Strengthening the institutional capacity No change 11 13 of the inland waterway sector agencies through: (a) undertaking a review of the current IWAI staffing, and the institution’s future development options to ascertain the prospective enhanced capabilities (staffing/skills needs) required in the areas of logistics, marketing, social development, grievance redressal, and occupational health safety and environment management; (b) reviewing and aligning the extant legal framework in respect of inland waterway transport vessel design, construction, manning, operation, maintenance, insurance and multi-modal transport use; and (c) establishing/developing a research and development unit/center within IWAI and enhancing sectoral training institutions. B2 Improving overall investment climate in Improving overall investment climate 5 8 the inland waterway sector through: (a) in the inland waterway sector undertaking market development through: (a) undertaking market studies and preparing business cases by development studies and preparing location, industry and cargo type; and business cases by location, industry (b) designing and piloting private sector and cargo type; and (b) designing and participation in the construction and piloting private sector participation in operation of transport terminals. the construction and operation of transport terminals; and (c) The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) Component Original Component description Revised Component description Original Revised allocation allocation USD mn USD mn conducting market development and community outreach programs. B3 Enhancing the vessel stock for inland Enhancing the vessel stock for inland 14 4 waterways by: (a) improving and waterways by: (a) improving and standardizing vessel design with focus standardizing vessel design with focus on the adoption of low draft and on the adoption of low draft and efficient and clean fuel (LNG) vessels; efficient and clean fuel (LNG) vessels; (b) undertaking public/private (b) undertaking public/private stakeholders consultations to stakeholders consultations to encourage investment in modern vessel encourage investment in modern technology through the review of fiscal vessel technology through the review and other barriers hindering vessel of fiscal and other barriers hindering construction; and (c) leasing vessel construction; and (c) leasing approximately ten (10) low draft vessel adequate number of vessel to kick- to kick-start the use of modern vessels start the use of modern vessels in the in the National Waterways – 1. National Waterways – 1. 11. Procurement and Implementation Schedule for newly introduced elements: The preparation of the master plan, detailed feasibility and engineering studies and social and environmental impact assessment for the newly introduced Arth Ganga elements, have already been initiated. The initial indications are that only in limited cases for providing land access to community jetties, marginal land acquisition would be required. Based on the current scheduling, all Arth Ganga related elements, will be procured and ready for implementation by June 2021 and completed in all respect by June 2023, well before the loan closure. 12. Change in Project Cost The overall project cost would change from USD 800 million to USD 690 million. 13. Disbursement Estimates: Disbursement estimates have been revised to account for loan cancellation of USD 57.78 million, as indicated in the data sheet. 14. Change in the Results Framework. A new intermediate outcome indicator on operationalization of community jetties will be included under Component A. The target and end values for other intermediate indicators, i.e. LAD for Barh-Ghazipur and Ghazipur to Varanasi, number of cargo terminals built, and number of ro-ro terminals are also slightly modified. Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Loan Closing Date(s) ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Component A: Improving the Component A: Improving the navigability of NW-1 (Haldia to 770.00 Revised navigability of NW-1 (Haldia to 665.00 Varanasi) Varanasi) Component B: Institutional Component B: Institutional Strengthening and improving Strengthening and improving the 30.00 Revised the investment climate, vessel 25.00 investment climate, vessel design design and construction and construction framework framework TOTAL 800.00 690.00 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation LOAN IBRD- Disburs 375,000,000.0 317,220,000.0 RESTRUCTUR USD 57,780,000.00 17-Jun-2020 87520-001 ing 0 0 ING, COST SAVINGS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IBRD-87520-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: Gds,Wks,Ncs,Cs,IOC,Wkshp Trmng 370,438,100.00 94,641,875.09 312,658,100.00 52.63 52.63 iLap Category Sequence No: 2 Current Expenditure Category: PPF REFINANCING 3,624,400.00 3,624,305.99 3,624,400.00 The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) Total 374,062,500.00 98,266,181.08 316,282,500.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2017 2,680,000.00 44,266,765.67 2018 23,390,000.04 33,617,009.67 2019 36,290,000.04 21,319,905.74 2020 66,879,999.96 28,000,000.00 2021 112,629,999.96 60,000,000.00 2022 133,130,000.04 60,796,318.92 2023 0.00 69,220,000.00 2024 0.00 0.00 2025 0.00 0.00 . The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) . Results framework COUNTRY: India Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project Project Development Objectives(s) The Project Development Objective is to enhance transport efficiency and reliability of National Waterway- 1 and augment institutional capacity for the development and management of India's inland waterway transport system in an environmentally sustainable manner. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 To enhance transport efficiency and reliability of NW-1 Supporting navigation of higher Vessel Sizes on 1,000.00 2,000.00 2,000.00 NW1 (Metric ton) Reduction in cost of cargo traffic transported by inland water transport 1.11 1.11 1.11 0.95 0.89 0.89 0.89 between Haldia and Varanasi (INR per ton- km) (Amount(USD)) Improved reliability of navigation on NW-1 (days available for transport 270.00 300.00 310.00 330.00 330.00 330.00 330.00 330.00 operations per year) (Days) Net Annual GHG Emission 0.00 108,660.00 avoided (Metric ton) The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Enhanced IWT sector Full staffing and skill capacity through Study for IWT Strategic plan for Training and 30% acheivement mix target for IWAI 50% acheivement improved institutional sector capacity IWAI staffing and capacity building Staff enhancement Skill mix target for for capacity achieved and 50% for capacity structure and operational enhancement capacity building targets for IWT target acheived IWAI acheived building target for target for sector building achieved framework for sector launched adopted sector adopted the sector capacity building institutions (Text) achieved PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Component A: Improving the navigability of NW-1 (Haldia to Varanasi) (Action: This Component has been Revised) Direct project 0.00 5,000.00 25,000.00 beneficiaries (Number) Female beneficiaries 0.00 5.00 5.00 (Percentage) Performance-based contracts for navigation 0.00 1.00 2.00 2.00 3.00 3.00 3.00 3.00 improvement signed (Number) Least Available Depth (LAD) in mtr. maintained 1.50 4.00 on Navigation Fairway (Meter(m)) Least Available Depth 3.00 3.00 3.00 3.00 3.00 3.00 4.00 4.00 (LAD) in mtr. The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 maintained on Navigation Fairway- Haldia to Tribeni (Meter(m)) Least Available Depth (LAD) in mtr. maintained on 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Navigation Fairway, between - Tribeni to Farakka (Meter(m)) Least Available Depth (LAD) in mtr. maintained on 2.50 2.50 2.50 3.00 3.00 3.00 3.00 3.00 Navigation Fairway, between - Farraka and Barh (Meter(m)) Least Available Depth (LAD) in mtr. maintained on 2.00 2.00 2.00 2.20 2.20 2.20 2.20 2.20 Navigation Fairway, between Barh to Ghazipur (Meter(m)) Action: This indicator has been Revised Least Available Depth (LAD) in mtr. 1.50 1.50 1.70 1.70 2.00 2.00 2.20 2.20 maintained on Navigation Fairway- The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Ghazipur to Varanasi (Meter(m)) Action: This indicator has been Revised Multi-modal Cargo terminals built (Nos.) 0.00 0.00 0.00 3.00 4.00 5.00 6.00 6.00 (Number) Ro-Ro Terminal (Number) 0.00 0.00 2.00 3.00 5.00 6.00 8.00 10.00 Action: This indicator has been Revised Number of Navigation Locks Built or 0.00 0.00 0.00 0.00 1.00 1.00 1.00 1.00 rehabilitated (Number) Operationalization of community jetties 0.00 20.00 40.00 60.00 (Number) Action: This indicator is New Component B: Institutional Strengthening and improving the investment climate, vessel design and construction framework Project-supported organization(s) publish reports on effect of N.A. N.A. Yes Yes Yes Yes Yes Yes collaboration on project (Text) Grievances responded and/or resolved within 80.00 80.00 80.00 90.00 90.00 90.00 90.00 90.00 the stipulated service The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 standards for response times (Percentage) Study Undertake review of Study recommended recommendation IWAI institutional Study Final report skill mix and staffing on staff structure and staffing Commissioned submitted achieved and enhancement (Text) maintained implemented New legal Undertake review and framework for alignment of the legal Revisions inland vessels framework in respect of Undertaken operation as well as IWAI operations (Text) logistics established IO Table SPACE The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775) The World Bank Capacity Augmentation of the National Waterway- 1 (JAL MARG VIKAS) Project (P148775)