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TRANSCRIPT
E- 311
Environmental and Social Report (ESR)
of the
Tamil Nadu Urban Infrastructure Financial Services
(TNUIFSL)
(Finai Draft)
Prepared by
Tamil Nadu Urban Infrastructure Financial Services, Chennai
in collaboration with
Development Alternatives, New Delhi
January 1997: As in November 1998
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Project Team
TNUIFSL: Dr. K. Rajivan, Anita Mathew
Development Alternatives:
Core: EBV Kumar, Susan M Mathew, Aswini Pai, George C.Varughese
Secondary: K.Laxmikanthan, P Ratna Prasad, Dr. K VijayalakshmiSasi M, Sanjay Kumar, Devinder Giri, Bindu Anthony, Neeraj Sharma
Advisory Panel: Dr Ashok Khosla and Mr Santosh K Sharma
Development Altematives is a non-profit corporate organisation with a mission to promotesustainable development through appropriate technology, institutional design and environmentmanagement.
Environment Systems Branch focuses on key environmental concems related to basic needsfulfilment, industrialisation and urbanisation, living resources conservation and globalenvironment. Our activities include research and design, programme formulation, policyinfluence, education and training and ground level implementation.* Development Alternatives
B-32, Tara CrescentQutab Institutional AreaNew Delhi - 110 016Phone: 66-5370, 696-7938Fax 91 + 11 + 686-6031Email: [email protected]
I
CONTENTS
Page No
Executive Summary i-x
PART I
TNUIFSL's Policy Statement 1
PART II
Section 1 Environmental and Social Issues 2
Typical Municipal Infrastructure Projects 2Environmental and Social Issues 5Categorisation of TNUIFSL Projects 9
Section 2: Policy and Regulatory Framework 12
Regulatory Framework: Urban Infrastructure Projects 12Regulatory Framework - Environment 14Regulatory Framework - Social 17Implications to TNUIFSL 22
Section 3: TNUIFSL Environmental and Social AssessmentFramework 23
TNUIFSL Project Appraisal Process 24Environmental and Social Assessment andManagement Framework 28Environmental and Social Risk Management 34
Section 4: Organisational Support Structure 37
Organisational Structure 37Responsibility Allocation Framework 38Capacity Building 39
Appendix 43
LIST OF TABLES
Page No
Section 1
Table 1.1 Profile of Typical TNUIFSL Projects 3-4
Table 1.2 Environmental categorisation of
Urban Infrastructure Projects 9-11
Table 1.3 Categorsation of TNUIFSL's Projects
based on Social Sensitivity
Section 2
Table 2.1 Social Impact & Entitlement Framework
for World Bank Financed Projects 21
Section 3
Table 3.1 TNUIFSL Project Cycle 26-27
Table 3.2 Environmental and Social Assessment
and Management Framework 32-33
Table 3.3 Environmental and Social
Risk Management Framework 36
Table 3.4 Risk Allocation Framework 36
Section 4
Table 4.1 Training Programme 40-41
ACRONYMS USED IN TEXT
AMC Asset Management CompanyCEO Chief Executive OfficerCPR Common Property ResourceCRZ Coastal Regulation ZoneDPR Detailed Project ReportEAR Environmental Assessment ReportEIA Environmental Impact AssessmentESAR Environmental and Sociai Assessment ReportESR Environmental and Social ReportFl Financial InstitutionGF Grant FundGOI Govemment Of IndiaGoTN Govemment of Tamil NaduHDFC Housing Development Finance CorporationHH HouseholdICICi Industrial Credit and Investment Corporation of India LimitedIDA Intemational Development AgencyIL&FS Infrastructure Leasing and Financial Services LimitedISR Initial Screening ReportMoEF Ministry of Environment and ForestMRTS Mass Rapid Transport SystemMUDF Municipal Urban Development FundNGO Non Govemmental OrganizationOD Operational DirectivesPAP Project Affected PersonPMG Project Management GroupRMP Risk Management PlanR&R Resettlement and RehabilitationSAR Social Assessment ReportTC Trustee CompanyTNPCB Tamil Nadu Pollution Control BoardTNSCB Tamil Nadu Slum Clearance BoardTNUDF Tamil Nadu Urban Development FundTNUDP Tamil Nadu Urban Development ProjectTOR Terms of ReferenceTRAMP Traffic and Transport ProgrammeULB Urban Local BodyWB World Bank
I
Executive Summary
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EXECUTIVE SUMMARY
BACKGROUND
1. The Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL) has been setup to manage a Trust fund -Tamil Nadu Urban Development Fund (TNUDF). The trusthas been established to manage urban infrastructure projects in Tamil Nadu. Thedeployment of funds will be on the basis of a management contract and will bemanaged by TNUIFSL. Eligible borrowers include Urban Local Bodies (ULBs),Statutory Boards, Public Undertakings and potential Private Investors.
2. The fund has a corporate Trustee Company (TC) with shareholdings from Govemmentof Tamil Nadu (GoTN) and three leading Financial Institutions - ICICI (Industrial Creditand Investment Corporation of India), HDFC (Housing Development and FinancialCorporation) and IL&FS (Infrastructure Leasing and Financial Services Limited). Tocontinue with the emphasis on poverty alleviation, a new Grant Fund (GF) has beenestablished.
3. TNUDF will channel increased financial resources, including private financing, into highpriority infrastructure investments. Specifically the fund would:a fund viable urban infrastructure projects;O mobilise resources from capital markets;O facilitate participation of private sector in infrastructure development through direct
investment and joint delivery mechanism of infrastructure services;O would eam retums for contributors and ensure sustainability of the fund;O improve financial management of ULBs, enabling them to access debt finance
from markets
4. The projects financed would:0 ensure that investments are commensurate with service demands;O eam stipulated economic and financial retums;O be institutionally viable so that the borrowers are capable of implementing the
management arrangements to do so;O ensure that no adverse environmental and social impacts are generated or that the
borrower will be taking corrective measures to minimise such impacts inconsonance with the Environment and Social Report (ESR).
5. Typical urban infrastructure projects eligible for funding would include water supply,sanitation, solid waste management, roads, transportation, sites and services, areadevelopment and other remunerative/non-remunerative urban infrastructure projects.Power and telecommunication projects are excluded because of the magnitude of suchprojects in relation to the size of the fund as well as the regulatory issues involved.
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6. Recognising the environmental and social issues that can arise in urban infrastructure
projects. TNUIFSL has evolved an ESR. The ESR provides TNUIFSL an overall
framework to guide it in identification. assessment and management of environmental
and social concerns at the project level. The ESR outlines the policies, assessments
and procedures that will enable TNUIFSL to ensure that a project that it funds is
developed in consonance with ESR and is adequately protected from attendant risks.
The ESR also aims to sensitise borrowers to assessment and management of
environmental and social issues arising in urban infrastructure projects.
7. The ESR has been prepared by TNUIFSL with the assistance of Consultants -
Development Altematives - specialised in the field of environment and social issues.
The process of preparing this report has included desk research on the legal and
institutional framework, analysis of priority issues in the infrastructure sector,
consistency checks with operational directives of the World Bank and other multilateral
agencies. There have also been a series of discussions within and outside TNUIFSL
for the preparation of the Report. The project team acknowledges the Project
Management Group (PMG) of the Govemment of Tamil Nadu, the Directorate of
Municipal Administration, the World Bank Task Force and several other institutions and
individuals for their contribution in evolving this ESR.
8. The Environmental and Social Report (ESR) for TNUIFSL is in two volumes:
Volume 1: consists of an Executive Summary; and, a Social and Environmental
Assessment Framework
Volume II: consists of the Environmental and Social Information package for
borrowers of TNUIFSLL loans
While the ESR includes both volumes, appropriate parts of Volume 11 will form part of
the Information Package to be given to the borrower along with the Loan Application
Form.
9. The ESR has been formally approved by the Board of Directors, TNUIFSL.
TNUIFSL POLICY STATEMENT
TNUIFSL has adopted the Environmental and Social Policy of the TC to promote
environmentally sound, socially acceptable and commercially viable urban
infrastructure projects. TNUIFSL, like the TC of TNUDF, believes that each of its
projects will improve the standard of living of populations in and around project
locations.
TNUIFSL -ESRI Final Draft! January'97 i Development Alternatives
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10. The Policy statement of the TC and TNUIFSL commits all projects to
- Environmental soundness by conserving natural resources, preserving bio-diversity and ecological equilibrium; minimising release of polluting wastes andintegrating waste management mechanisms within projects.
O Social relevance and acceptability by avoiding or minimising resettlement,ensuring responsible reseHtlement and rehabilitation of project affected persons;and addressing legitimate concerns of relevant stakeholders.
11. TNUIFSL expects that most of the projects that it funds will be small and mediumurban infrastructure projects. It is possible that limited resources available formitigating environmental and social issues arising within projects could affect theireconomic viability. Therefore mitigatory measures to deal with environmental andsocial issues such as best practices available would be encouraged.
12. While adopting the environmental and social policy of the TNUDF TC, TNUIFSL hasreflected its own commitments through detailed operational procedures illustrated in itsEnvironmental and Social Report (ESR).
ENVIRONMENTAL AND SOCIAL ISSUES
13. To evolve its environmental and social management procedures for mitigating theseissues, TNUIFSL has carefully examined the portfolio of possibie urban infrastructureprojects.
14. Based on the magnitude and implications of environmental issues that can arise inthem, TNUIFSL has categorised urban infrastructure projects into three categories viz.E-1, E-2 and E-3.
15. E-1 projects are those wherein TNUIFSL foresees major environmental impacts thusnecessitating Environmental Assessment Reports (EAR).
16. E-2 projects are expected to have moderate environmental issues. Borrowers willsubmit a simple Environmental Management Plan for E-2 projects based on acatalogue of environmental management measures made available by TUNIFS.
17. No environmental issues are expected in E-3 projects and hence can be termedIenvironmentally benign'.
18. Based on the number of households# that may be affected by the project andmagnitude of social impacts, TNUIFSL has categorised projects as either S-1, S-2 orS-3 projects.
TNUIFSL -ESRI Final Draft/January97 * DevelopmentAlternatives
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19. S-1 projects are those that will affect more than 40 households# and will require a
detailed Social Assessment Report (SAR).
20. S-2 projects are those which will affect between one to forty households. In this case
the borrower can submit a simple Social Management Plan (SMP) for which formats
are provided by TN U IFSL.
21. S-3 projects, on the other hand will not have any housholds affectedat all i.e. they can
be classified as 'socially benign'.
NATIONAL AND STATE POLICY AND REGULATORY FRAMEWORK
Regulatory Framework - Urban Infrastructure Projects
22. ULBs, are distinct from other undertakings due to their 'body politic' character. The
7 4th Constitutional Amendment, 1992 empowers municipal bodies to take necessary
steps for management of areas under them, including protection of environment.ULBs are considered 'state" as per Article 12 of the Constitution. This implies thatmunicipal bodies can be proceeded against under a writ, for violations to Fundamental
Rights or Directive Principles, as their actions are state actions.
23. The Tamil Nadu Town and Country Planning Act, 1971 appoints local planning
authorities and empowers them to plan for an urban area and/or designated areas.
This law empowers local planning authorities to assess, levy and recover development
charges. The Act envisages three classes of authorities: regional planning authorities;
local planning authorities; and new town development authorities and the constitution
of a Town and Country Planning Board.
24. The Tamil Nadu Municipalities Law and Building Bye Laws derived from the Madras
District Municipalities Act, 1920 extends to the whole of the Presidency of Madras
except the City of Madras. The law essentially deals with establishment, constitution
and govemment of District Municipalities and authorities; taxation and finance; public
health, safety and convenience.
Regulatory Framework- Environment
25. Mandatory environmental laws applicable to TNUIFSL financed projects are both
pollution and natural resource related. Key Mandatory environmental laws are;
O Water (Prevention And Control of Pollution) Act, 1974 and Tamil Nadu Water(Prevention And Control of Pollution) Rules, 1974
O The Water (Prevention And Control of Pollution) Cess Act, 1977
O Environment (Protection) Act, 1986
O Forest (Conservation) Act, 1980
TNUIFSL -ESRI Final Draw January97 iv* Development Aftematives
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1 Wiidlife Protection Act. 197213 Coastal Regulation Zone (CRZ) Notification. 1990
26. World Bank's Operational Directive 4.01outlines Bank policy and procedures forenvironmental assessment (EA) of bank investment lending operations and relatedtypes of environmental analysis. Small scale municipal infrastructure and servicesprojects envisaged to be financed by TNUIFSL are not clearly categorised in OD 4.01.They may be considered the lowest level of Category B i.e. projects with comparativelyless significant impact; not as sensitive, numerous or diverse impacts.
27. Key prescriptive environmental laws and policies are:
LegislationsO Air (Prevention and Control of Pollution) Act 1981 and Tamil Nadu Air (Prevention
of Control of Pollution) Rules 1983O Hazardous Waste (Management and Handling) Rules, 1989
PoliciesO National Conservation Strategy and Policy Statement on environment and
Development, 1992n Policy Statement for Abatement of Pollution 1992
Compliance with environmental requirements laid down by the policy, legal and regulatoryframework will not pose a problem in a majority of projects that are envisaged to befinanced by TNUIFSL. However, in most cases the regulatory agency is the municipalauthority. Hence it will be essential for the municipal body requesting the finances toclearly separate the project execution function and regulatory function. It will be theresponsibility of the Municipal Commissioner to fumish the necessary undertaking ofcompliance along with the project proposal. Categorisation of projects will be done sothat assessments can be done speedily and remedial measures can be adopted.
Regulatory Framework - Social
28. Mandatory Social Laws are:O Land Acquisition Act, 1894 as amended in 1984O Govemment Order dated 21.09.95 from the Commissioner of Land Administration
describing procedures for acquisition through negotiationO Board Standing Orders (Standino Orders of the Commission for Revenue Board)
based on the Revenue Act 1884 of the Madras Presidency (for Rayatwari states),regarding assignment of land, lease and cancellation and encroachments.
0 Tamil Nadu Land Encroachment Act, 19050 The Tamil Nadu Slum Areas (Improvement and Clearance) Act, 1971
TNUIFSL -ESRIFinal Draftl January'97 v Development Alternatives
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29. This World Bank OD 4.30 describes Bank policy and procedures on involuntary
resettlement as well as conditions that borrowers are expected to meet in operations
involving resettlement. The objective of the Bank's policy is to ensure that populations
displaced by a project also benefit from the project and that standards of living are
improved, or at a minimum, restored. TNUIFSL as a borrower of credit would ensure
that Bank policies are followed.
TNUIFSL's SOCIAL ENTITLEMENT FRAMEWORK
30. TNUIFSL will ensure that the Policies and procedures described in the ESR will be
applicable to all World Bank supported projects. An entitlement framework has been
evolved along guidelines provided by the World Bank Operational Directives. The
social entitlement framework is shown in Table 1.
31. In contrast to the environmental legislation which exists in India and provides a
reference for the environment part of the ESR, no similar framework or legislation
exists for general social impacts of urban infrastructure projects - resettlement and
rehabilitation (R&R) in particular. In order to provide a framework for the R&R process
in projects where World Bank financing is involved, this ESR provides a list of
entitlements for project affected individuals, families and establishments. Detailed
exposition of the social entitlement framework for World Bank financed projects is
provided in Appendix 5. Seven basic categories of issues/impact are foreseen under
this entitlement framework:(a) Loss of land
(b) Loss of structure
(c) Loss of source of livelihood
(d) Loss of access to common resources and facilities(e) Loss of standing crops and trees
(f) Losses during transition of displaced persons/establishments(g) Losses to host communities
TNUIFSL -ESRP Final Dra/ January'97 vi* Development Alternatives
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Table 1: Social Impact & Entitlement Framework For World Bank Financed Projects*Type of Issuewlmpact 1 Entitlement i Entitlernent Options Respon
_ Beneficiary I_I sibility1. Loss of landa. Homestead(i) with valid title, or customary or (i) Household (i) equivalent area of lana or cash compensation at Govt.
usufruct nghts replacement value Sponsor(ii) squatters (ii) Household (ii) altemative site as per Govemment norms
b. Agricultural land(i) with valid tRtle, or customary or (i) Titleholders (i) alternate land of equiv.productivrty potential or
usufruct nghts cash payment at replacement value(ii) tenants, sharecroppers, leaseholder, (ii) Individual (ii) local standards for minimum economic
encroachers landholding or cash payment for minimumeconomic iandholding
c. CommerciaV IndustriaUlInstitutional(i) with valid title, or customary or (i) Titleholder (i) equivalent land or cash at replacement value
usufruct rights(ii) tenant, leaseholder (ii) Unit (ii) equivalent leased land, reimbursement for
unexpired lease, transition alowance equivalent to6 months income
(iii) squatter (iii) Unit (iii) equivalent land and transition allowance equivalentto 2 months income
2. Loss of structurea. House(i) with valid title, or customary or (i) Household (i) structure of equivalent standard or cash GovtU
usufruct rights compensation at replacement value Sponsor(ii) tenant, leaseholder (ii) Household (ii) transition allowance equivalent to 6 months rent to(iii) squatters, pavement dwellers (iii) Household re-establish residence
(iii) basic dwelling unit as per government norms orcash payment for basic dwelling und
b. Commerciall IndustriaV Institutional(i) with valid title, or customary or (i) Unit (i) structure of equivalent standard or cash
usufruct rights compensation at replacement value(ii) tenant, leaseholder (ii) Unit (ii) reasonable transition allowance equivalent to 6
months income(iii) squatters, pavement dwellers (iii) Unit (iii) basic unit as per government norms or cash
.__________________________________ payment for basic unit3. Loss of livelihood/ trade/
occupation (i) Individual (i) employment in reconstructed enterprise or(I) Wage employment/agriculture/ package for re-employment or starting a business, Sponsor
commerciaU industriaVinstitutional and transition allowance equivalent to 1 yearwages in case of permanent closure andequivalent to closed time in case of temporaryclosure.
4. Loss of access to comrnonresources and facilities
(i) Rural common property resources (i)HH/community (i) replacement CPRs/amenities or providing Govt/minimum Government standard Sponsor
(ii) Urban civic amenities (ii)HH/community (ii) access to equivalent amenities/services6. Loss of standing crops/trees(i) With valid title (i) Household al categories entitled to cash compensation Sponsor(ii) Tenant/essee (ii) Household equivalent to market value for crops and market value(iii) Encroachers/Squatters (iii) Household of the tree products for the remaining life of the tree
6. Losses during transition ofdisplaced persons/establishments
(i) Shifting/Transport (i)Household/Unit (i) provision of transport or cash equivalent Govt/(ii) Maintenance (ii)Household/Unit (ii) cash payment for 3 months Sponsor(iii) Construction (iii)Household/Unit (iii) cash payment for cost of labour7. Losses to Host commnunities(i) Amenities/Services (i) Community (i) Restore losses as a result of re-settlement or Govt/
amenities/services equivalent to those provided Sponsorto PAPs
*To be read in conjunction with Appendix 5*The choice of the entitlement lies with the PAPs
TNUIFSL -ESRI Final Draftl January'97 vii* Development Alternatives
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TNUIFSL ENVIRONMENTAL AND SOCIAL ASSESSMENT FRAMEWORK
35. TNUIFSL, as a financial intermediary, will ensure the financial viability of each projectthat it funds. TNUIFSL will catalyse municipalities into attracting private investments ontheir own. The project cycle for appraising and monitoring projects forms thebackground for assessment and management of environmental and social issues thatcould arise within projects financed by TNUIFSL.
TNAIUFSL Project Cycle
36. During screening and scoping of projects, levels of detail to which each aspect of aproject needs to be assessed, will be determined. After a project has gone throughsuccessful appraisal and approval, TNUIFSL will closely monitor construction,operation and maintenance phases.
37. During project screening, TNUIFSL will assess the eligibility of a project based onTNUIFSL's lending policies. The assessment will form a part of the Initial ScreeningReport (ISR) and will decide whether or not the project should be taken up for detailedappraisal. The borrower will prepare and submit a Detailed Project Report (DPR) asper guidelines provided to him in the Information Package.
38. During Project Appraisal, TNUIFSL along with the borrower will vet the DPR.Environmental and social aspects will be cross-checked against standards set in theESR. The loan officer will submit the appraisal report for approval with arecommendation to accept the project as submitted; accept with modifications; orreject it.
39. After requisite approvals and concurrence are obtained, the loan officer will discussbasic terms of agreement such as rate of interest; repayment schedule;security/guarantee; and environmental and social commitments with the borrower.TNUIFSL then prepares and signs the loan agreement with the borrower. The firstloan installment is then disbursed.
40. TNUIFSL will monitor all projects they finance to ensure conformity to agreedstandards during construction, operation and maintenance. Quarterly ProgressReports will be submitted ty Borrowers. All projects above Rs.15 crores andapproximately 25% of the other projects will be audited annually through interactionwith borrowers, local user groups, govemment, etc. The Audit Report will besubmitted to the TC Board through the CEO.
TNUIFSL -ESRI Final Draf January97 viii Development Altemative
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Environmental And Social Assessment And Management Frame Work
41. The environmental and social assessment procedures evolved by TNUIFSL are inconsonance with its project cycle. The various steps for environmental and socialassessment and management of TNUIFSL projects have been dovetailed into theTNUIFSL project cycle. Initial screening criteria have been evolved for projects, basedon magnitude and sensitivity of environmental and social issues.
Environmental And Social Risk Management Framework
42. TNUIFSL will carry out environmental and social risk management as a part of itsproject management strategy. TNUIFSL's risk management process will comprise thefollowing steps - Risk Management Plan, Risk Appraisal, Risk Allocation and RiskMonitoring. A risk allocation framework for the key role players has been evolved byTNUIFSL.
OtGANISATIONAL SUPPORT STRUCTURE
43. In order to ensure that the policy obligations and associated procedures in theEnvironmental and Social Report (ESR) are operationalised, TNUIFSL has outlined anorganisational support structure. Besides fixing responsibility on key actors in theprocess, the organizational support structure also outlines the capacity building that isessential for TNUIFSL staff and borrowers.
Organisational Structure
44. TNUIFSL will deploy six professionals headed by a Chief Executive Officer (CEO) inthe first year. Six professionals will consist of two Vice Presidents (projects), oneCompany Secretary, one Manager (Technical) and two Managers (Accounts).
Responsibility Allocation Framework
45. TNUIFSL will select its Corporate Consultants from among agencies who have the fullrange of expertise to address all the environmental and social concems related tourban infrastructure projects. TNUIFSL will ensure sensitivity to environmental andsocial aspects of various projects among its project appraisnl and management staff.
46. One of the two Vice presidents at TNUIFSL will oversee appraisal, investments andresources of the projects and will interface with Multilateral Agencies. The other VicePresident (projects) will appraise projects, look after Management Information Systemsand auditing of projects and also interface with borrowers. The Manager (Technical)will help the CEO and Vice Presidents in project specific environmental and social
TNUIFSL -ESRI Final Draft January'97 ix * Development AlternatIves
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assessment and management issues. The two Managers (Accounts) will help the Vice
Presidents in the financial aspects of projects.
Corporate Consultants (Environmental and Social Issues)
47. The Corporate Consultant for environmental and social issues will essentially provide
services to TNUIFSL as required. for the following
- Advising TNUIFSL on environmental and social issues
- Environmental and social screening of projects wherever required by the TNUIFSL
- Reviewing EAR, SAR and other documents submitted by borrowers for specific
environmental and social project components
- Monitoring and evaluating projects
48. The Corporate Consultant will also undertake the annual environmental and social
audit of all TNUIFSL financed projects.
Capacity Building
49. TNUIFSL envisages capacity building of its own personnel and its borrowers who will
include Urban Local Bodies, Statutory Boards, Public Undertakings and Potential
Private Operators in order to ensure that the ESR is effectively operationalised. The
training programme for various role players will include an orientation programme on
the ESR, Municipal Finance, Urban Planning, Project Management and Engineering
and Public Health.
50. The training programme is to be co-ordinated and anchored within a training institution
in Tamil Nadu and other local and National Institutions and individuals experienced in
various aspects of urban infrastructure projects, will be called upon through an open
bid to develop and conduct courses on various modules.
TNUIFSL -ESRI Final DraftlJanuary97 x Development Altetives
Part I
I
TNUIFSL's POLICY STATEMENT
Tamil Nadu Urban Infrastructure and Financial Services (TNUIFSL), set up to manage the Tamil
Nadu Urban Development Fund (TNUDF), aims to promote environmentally sound, socially
acceptable and economically viable urban infrastructure projects. TNUIFSL, like the TrusteeCompany (TC) of the TNUDF, believes that each of its projects will improve the living standards
and the environment of populations in and around project locations.
TNUIFSL commits each project to:
ENVIRONMENTAL SOUNDNESS BY
- Conserving natural resources
- Preserving bio-diversity and ecological equilibrium by reducing pressure on natural resources
- Minimising release of polluting wastes to amounts that do not harm the environment
- Integrating waste management mechanisms within projects and maintaining environmental
quality of project locations
SOCIAL RELEVANCE AND ACCEPTABILITY BY
- Addressing legitimate concems of relevant stakeholders, especially project affected persons
- Avoiding or minimising resettlement due to land acquisition through appropriate technical
and management measures
- Ensuring responsible resettlement and rehabilitation of project affected persons throughsustainable livelihood options that at least restore, if not improve, their standard of living
- Protecting marginalised and vulnerable groups, including the economically and socially
disadvantaged
- Minimising health and safety hazards
TNUIFSL expects that most of the projects that it funds will be small and medium urban
infrastructure projects. It is possible that limited resources available for mitigating environmentaland social issues arising within projects could affect their economic viability. Therefore
mitigatory measures to deal with environmental and social issues such as best practices
available would be encouraged. Further, TNUIFSL will use the Grant Fund and other funding
mechanisms to operationalise the environmental and social policy.
While adopting the environmental and social policy of the TNUDF Trustee Company, TNUIFSL
has reflected its own commitments through detailed operational procedures illustrated in its
Environmental and Social Report (ESR).
Part 11
SECTION 1
ENVIRONMENTAL AND SOCIAL ISSUES
1.1 TNUIFSL manages funds for the TNUDF, one of India's largest urban developmentprojects with a multi-city, multi-sectoral focus. TNUIFSL will extend term-loans toUrban Local Bodies(ULBs), Statutory Bodies, Public Undertakings, and PrivateInvestors for urban infrastructure projects in the stae of.Tamil Nadu.
1.2 From the experience of TNUDP projects, TNUIFSL recognises environmental andsocial issues related to urban infrastructure projects. TNUIFSL will address theirmitigation through a set of management procedures elaborated in its ESR.
1.3 To evolve its environmental and social management procedures, TNUIFSL hascarefully examined the portfolio of urban infrastructure projects previously executedby TNUDP and environmental and social issues arising in each of the projects.Projects were then categorised on the basis of environmental and social impacts.TNUDP projects in the past have encompassed over 500 sub-projects includingroads, bridges, street lights, solid waste plants, storm water drains, bus stations, andmarkets in 90 out of 110 municipalities in Tamil Nadu (refer Appendix I and 2 for listand location of municipalities)
ITYPICAL MUNICIPAL INFRASTRUCTURE PROJECTS
1.4 TNUIFSL would finance the following categories of urban infrastructure projects:
Water Supply and Sewage- Solid Waste Management
Transportation
Commercial ComplexesNon commercial/Community Amenitieslntegratea area development
1.5 Physical scales and typical costs of urban infrastructure projects are shown in Table 1.1.
Table 1.1: Profile of Typical TNUIFSL Projects'
Project Physical Financial (Rs. in lakhs)I) Water Supply & Sewage
A. Water Supply1. Water supply lines & taps 1 - 10 kms 2 - 202. Water tankers 1 0,000 liters 6 - 73. Overhead tanks 10 lakh liters 204. Water treatment plants 1 unit (10,000 liters) 205. Head works
B. Stormwater Drainage1. Open drains 0.5 - 5 kms 5 - 502. Closed / Underground drains 0.5 - 7 kms 10.
C. Sewerage / Sanitation1. Public conveniences 1 - 5 units( 8 seat) 2 - 102. Pay & use latrines 10 - 12 (1 seater) 2.5 - 33. Sewage treatment 1 unit (1 0000 liters) 204. Septic tanks5. Sewage forms 5-20 ha 10-25
II) Solid Waste ManagementA. Compost Yard 4 - 5 acres 20B. Vehicles 10 ton capacity 8
111) TransportationA. Roads
1. Widening of roads 4 - 20 km (1 m width) 12 - 602. Improvement of surface 5 - 30 kms (1 m width) 15 - 903. New roads 2 - 5 km (2 lane) 20 - 504. Traffic islands 1 - 5 units 1 - 55. Road dividers 1 - 2 km 4 - 106. Footpaths
B. Street Furniture1. Traffic signals 1 - 5 junctions 5 - 202. Street lights 60 - 600 poles 10 1003. Sign boards 100 - 500 units 2- 10
C. Road Structures1. Subways
- Pedestrian 1 unit (30 m) 60- Cycle 1 unit (40 m) 100- Fast moving 1 unit (2 lanes, 400m) 500 - 600
2. ROBs 1 unit (2 lanes, 500m) 600 - 15003. Culverts 1 - 5 units 4 - 204. Small Bridges 1 unit (6 - 10 m) 6- 10
D. Terminals / Shelter1. Bus Shelters 1 - 5 units 0.20 - 1.02. Bus Terminals/ Stands 1 unit (13 busways) 1003. Truck Terminals I unit ( 30 lorries) 454. Workshops5. Carparking complexes 1 unit (200 cars) 1000
E. Fleet ExpansionF. Construction & Maintenance 5-20
equipmentG. Inland Water ways
IV. Commercial ComplexesA. Shopping /Office complexes 30 - 50 shops 30 - 50B. Vegetable/Fish markets 50 - 75 shops 20 - 30C. Slaughter houses one unit (6 -10 bays) 5- 6
Project Physical Financial (Rs. in lakhs)D. Marnage halls I unit ( 500 seats) 10E. Lodge / Dormitory 1 unit ( 30 peopie) 10F. Municipal community compiexes 1unit 10
V. Non Commercial/CommunityAmenitiesA. Parks 1 acre unit 20B. Playgrounds 1 acre unit 2 - 3C. Maternity & Child Center I unit (Building & 14
equipment)D. Hospitals 10 beds 20 lakhsE. Educational Institutions/Reading 1 unit (2 class rooms) 1 - 1.5
roomsF. Burial Grounds 1 acre unit 10 - 12G. Electric crematorium 1 unit 30
VI. Integrated Area DevelopmentA. Housing (Sites & Services)B. Guided Urban DevelopmentC. TRAMP
*Based on analysis of TNUIFSL sub projects
ENVIRONMENTAL AND SOCIAL ISSUES
1.6 While TNUIFSL financed projects improve general living standards within urban
localities, they can also have associated impacts on the local environment andpeople. Based on the experience of past projects carried out by urban local bodies inTamil Nadu, this document identifies environmental and social issues that can arise in
urban infrastructure projects. Issues that could arise in various urban infrastructure
projects are listed below.
I. WATER SUPPLY AND SEWAGE PROJECTS:
(a) Water Supply:
1.7 Water supply projects include augmentation of water lines (about one to ten km in
length), purchase of water tankers (capacity of ten thousand litres) and construction
of overhead tanks (capacity of ten lakh litres). Typical environmental issues that may
arise are:
- safe drinking water- change in hydrology and drainage pattems due to the construction
- waterlogging due to leakage during operation and maintenance
- disturbance to other service lines due to construction activity.
(b) Storrnwater Drainage:
1.8 Stormwater projects will include construction of open/closed drains (about half a kmto seven km) which may cause:
- changes in landuse, hydrology and drainage pattems due to the construction
- waterlogging, change in surface and groundwater quality due to leakages- disturbance to other service lines due to digging and construction activity
1.9 Social issues may arise due to stormwater drainage projects if there is land acquisition ordisplacement of people, especially squatters.
(c) Sewerage/Sanitation:
1.10 Sewerage projects will include construction of public conveniences (one to five unitsconsisting of eight seaters); pay and use latrines (ten to twelve units of one seaters);
sewage treatment plants (with a capacity of ten thousand litres); and septic tanks.
Environmental issues that can arise in these projects are:
- changes in hydrology and drainage pattems due to the construction
- surface and groundwater contamination due to leakages
- wateriogging dunng operation and maintenance
I. SOLID WASTE MANAGEMENT:
1.11 Solid Waste Management projects include development of compost yards (with an
area of four to five acres) and purchase of vehicles (capacity of ten tonnes) for
transport of garbage. These projects may cause
- change in hydrology and drainage due to garbage dumping,and composting
- change in surface and ground water quality due to leaching
- smell of decomposing garbage- public health nuisance during maintenance due to decomposing garbage
- change in urban aesthetics
Ill. TRANSPORTATION:
1.12 Transportation projects will include roads, street fumiture, road structures and
terminals.
a) Roads:
1.13 Road projects include widening of roads (width of one meter to a length of four to
twenty kms), improvement of road surfaces (for a length of five to thirty km), laying of
intemal roads (for a length of two to five kms), construction of traffic islands (one tofive units ) and road dividers (for a length of one to two kms). These projects will be
at a very small scale and may cause only minor environmental issues such as:
- change in hydrology and drainage patterns due to construction
- increase in air pollution and noise levels due to traffic congestion
- disturbance to other services during construction
- destruction of roadside microhabitat/vegetation due to widening and construction
1.14 Social issues may arise in these projects if there is land acquisition or displace
squatters or petty roadside shops or the loss of private structures (such as compound
walls, etc.)
b) Street fumiture:
1.15 Street fumiture projects will include traffic signals (one to five junctions), streetlights
(sixty to six hundred poles) and signboards (hundred to five hundred units) which may
cause minor environmental issues such as:
- disturbance to other services/lines
- increase in urban congestion
- increase in air pollution and noise levels due to congestion
- effect on urban aesthetics
c) Road Structures:
1.16 Road structure projects to be funded by TNUIFSL will include construction ofsubways (for pedestrians, cycles and fast moving vehicles of one unit of two lanes of30 to 40 meters width), road overbridges (two lanes of four hundred meters width),culverts (one to five units) and small bridges (one unit with a width of six to tenmeters). Environmental impacts that may arise are:
- change in landuse, hydrology and drainage patterns due to construction- water logging due to poor drainage facilities- disturbance to other services/lines- urban congestion
1.17 Social issues may arise if these projects involve any land acquisition or displacementof people
d) Bus ShelterslTerminals:
1.18 TNUIFSL will fund construction of bus terminals (one to five units), bus shelters(about thirteen busways), workshops and truck terminals (one unit for thirty lorries)which may cause minor environmental issues such as:
- increase in air pollution and noise levels- land contamination due to oil and grease- destruction of vegetation due to construction- sewage due to bus cleaning
1.19 Social issues may arise in these projects if they involve any land acquisition ordisplacement of people
e) Inland Waterways
1.20 TNUIFSL will fund construction of Inland waterways
IV.COMMERCIAL COMPLEXES:
1.21 Commercial complexes will include shopping complexes (of thirty to fifty shops),vegetable/fish markets (fifty to seventy five shops) and slaughter houses (six to tenbays), marriage halls (each unit about five hundred seats)/townhalls, lodges (thirty
rooms) and dormitories (for tnirty people) and tourist complexes (fifteen fo twenty
rooms). Environmental impacts which may arise are:
- disturbance to other services/lines due to construction
- disposal of solid waste generated from these complexes
- air, water and health problems due to slaughter houses- increase in urban congestion
1.22 Social impacts that may arise if the project involves any land acquisition or
displacement of people.
V. NON COMMERCIAUCOMMUNITY AMENITIES:
1.23 Construction of parks and playgrounds (one acre units), institutions (two classrooms)
and hospitals (fifteen beds) and the development of burial grounds (one acre units).Environmental impacts will be negligible and those that may occur are:
- change in landuse
- solid and hazardous waste disposal- public health and safety
1.24 Social issues may arise if the projects involve any land acquisition or displacement ofpeople.
VI. INTEGRATED AREA DEVELOPMENT:
1.25 Under integrated area development will include housing (sites and services), guided
urban development and traffic and transport programmes (TRAMPS) whose
subcomponents will include combinations of the above projects at various scales.
Environmental issues that may be expected are:
- change in landuse, hydrology and drainage patterns due to construction- waterlogging- solid waste
- destruction of vegetation- disturbance to other services/lines
1.26 Social issues may arise if the project involves any land acquisition or displacement
of people.
CATEGORISATION OF URBAN INFRASTRUCTURE PROJECTS
The urban infrastructure projects in Table 1. 1 have been categorised based on the magnitude
of environmental and social issues.
I. ENVIRONMENTAL CATEGORIES OF PROJECTS
1.27 Based on the effects, TNUIFSL has categorised urban infrastructure projects into
three categories viz. E-1, E-2 and E-3.
a. E-1 projects are those wherein TNUIFSL forsees major environmental
impacts thus necessitating Environmental Assessment Reports (EAR).
b. E-2 projects are expected to have only moderate environmental issues.
TNUIFSL has laid down generic design guidelines to mitigate these issues.
c. No environmental issues are expected in E-3 projects and hence can be
termed 'environmentally benign'.
1.28 Tablell.2 illustrates categorisation of urban infrastructure projects based on their
environmental sensitivity. TNUIFSL will review this categorisation annually
depending on experience gained from projects funded.
Table 1.2: ENVIRONMENTAL CATEGORISATION OF PROJECTS
Project Environmental CategoryI) Water Supply & Sewage_____________
A. Water Supply1. Water supply lines & taps E-32. Water tankers E-33. Overhead tanks E-34. Waterdtreatmentrplants E-15. Headworks E-36. Generators E-3#7. River Intake Works E-1#
B. Storrnwater Drainage1. Open drains E-2#
2.Closed / Underground drains E-2_C. Sewerage / Sanitation
1. Public conveniences- E-2#2. Pay & use latrines E-23. Sewerage & treatment E-1 #4. Septictanks E-2
.Ill Solid Waste ManagementA. Compost Yard E-2B. Vehicles (more than 5 nos.) E-2#
Ill) Transportation
Project I Environmental CategoryA. Roads _
1. Widenina of roads E-32. Improvement of surface E-33. New roads E-24. Traffic islands E-35. Road divider E-36. Foot paths E-3
B. Street Furniture1. Traffic signals E-32. Street lights E-33. Sign boards E-3
C. Road Structures1. Subways
- Pedestrian E-2- Cycle E-2- Fast moving E-2
2. ROBs E-23. Culverts E-24. Small Bridges E-2
D. Terminals / Shelter1. Bus Shelters E-32. Bus Terminais/Stands E-2#3. Truck Terminals E-2#4. Workshops E-25. Car Parking Complex E-3
E. Fleet Expansion >100 buses E-2<100 buses E-3
F. Construction & Maintenance equipment E-3G. Inland Water Ways E-3
IV.Commercial ComplexesA. Shopping /Office complexes E-3B. Vegetable/Fish markets E-2C. Slaughter houses E-2D. Marriage halls E-2E. Lodge / Dormitory E-3F. Municipal Community complexes E-3
V.Non Comm./Community AmenitiesA. Parks E-3B. Playgrounds E-3C. Matemity and Child Centers E-3D. Educational institution/Reading Room E-3E. Burial Grounds E-2F. Electric Crematorium E-3
VI. Integrated Area DevelopmentA. Housing (Sites & Services) E-1B. Guided Urban Development E-1C. TRAMP E-1
VII. General:A. Computer Facilities E-3#B. Weigh Bridge E-3#
Note For types of proiecrs that have no, been environmentallv categonzed. they wi/i initiallv be
considered as category E-1. uniess otrerwise specified byv e CE5 of TNUIFSL
II. SOCIAL CATEGORISATION OF PROJECTS
1.29 Based on the number of households# that may be affected by the project, i.e. PAPs
(refer paragraph 2.39 for definition) and magnitude of impacts, projects have been
categorised as either S-1, S-2 or S-3 projects.
a. S-1 projects are those that will affect more than 40 households.#
b. S-2 projects are those which will affect between one to forty households. #
C. S-3 projects, on the other hand will not have any households affected at all
i.e. they can be classified as socially benign.
1.30 Table 1.3 provides TNUIFSL's categorisation of urban infrastructure projects based
on their social sensitivity.
Table 1.3: CATEGORISATION OF PROJECTS BASED ON SOCIAL SENSITIVITY
Category | Description Type of projectLevel of issues Management measures
S-1 serious social issues project specific SAR essential >40 households involvedexpected #
S-2 moderate social adopt generic design guidelines and 1-40 households involvedissues expected norms in ESR
S-3 no social issues no social mitigation measures No households involved #expected hence requiredsocially benign
1.31 In the case of projects with moderate environmental and social issues, TNUIFSL will
integrate readily available solutions into the project design.
SECTION 2
NATIONAL AND STATE POLICY AND REGULATORY FRAMEWORK
2.1 While extending extend term loans to Urban Local Bodies (ULBs), statutory boards,
public undertakings and private investors for urban infrastructure projects, the
TNUIFSL will ensure compliance to mandatory environmental and social laws and
regulations that apply to specific projects. Besides mandatory laws, regulations and
policies which are prescriptive will influence management procedures for
environmental and social issues in TNUIFSL financed projects.
JREGULATORY FRAMEWORK - URBAN INFRASTRUCTURE PROJECTS
I. CONSTITUTIONAL PROVISIONS
2.2 ULBs, are distinct from other undertakings due to their 'body politic" character. Itconstitutes the urban democratic grassroots in India. Apart from their statutory
status, and mention in Entry 5 of List II of the 71h schedule of the Constitution, they
have now been given due constitutional recognition. This is in the form of the 74 th
Constitutional Amendment, 1992 which has inserted provisions in an attempt to
decentralise administration and decisionmaking. The 7 4 th amendment empowersmunicipal bodies to take necessary steps for management of areas under them,including protection of environment (see Appendix 3 for Articles inserted inConstitution). ULBs are considered 'state' as per Article 12 of the Constitution. This
implies that municipal bodies can be proceeded against under a writ, for violations to
Fundamental Rights or Directive Principles, as their actions are state actions.
2.3 ULBs, in specific projects will act in dual strains, i.e. both project sponsorship
/execution and project approvals/ permissions/ monitoring. As a regulatory body,
ULBs will also be responsible for ensuring environmental and social compliance.
Their local govemment status can expose them to distinct legal recourse, action andclaiming of reliefs.
2.4 When acting as regulatory authorities, there is an in-built duty to provide quality
amenities and urban facilities and to ensure that these systems function on a sound
environmental and social base. A framework enabling the setting up of infrastructure
amenities and delineating powers and responsibilities is found in various State laws.
11. TAMIL NADU TOWN AND COUNTRY PLANNING ACT 1971
2.5 This Act appoints local planning authorities and empowers them to plan for an urban
area and/or designated areas. Typically this involves preparation/implementation ofMaster Plans specifying uses to which land can be put to. Such zoning ensuresfunctional and ordered development. The plan delineates land for residential,
industrial, commercial, agricultural and recreational purposes or forests and mineral
exploitation; demarcates objects and boundaries of archaeological/historical interest;
and identifies new towns/cities, transportation and communication facilities, watersupply, drainage, sewerage, sewage disposal and other public utilities and amenities.
This law empowers local planning authorities to assess, levy and recover
development charges.
2.6 The Act envisages three classes of authorities: regional planning authorities; localplanning authorities; and new town development authorities and the constitution of a
Town and Country Planning Board.
111. TAMIL NADU MUNICIPALITIES LAW AND BUILDING BYE LAWS
2.7 The relevant legislation is the Madras District Municipalities Act, 1920. This law
extends to the whole of the Presidency of Madras except the City of Madras. It isunder this law that local bodies are empowered to provide and maintain publicamenities and facilities.
2.8 The law essentially deals with:
- Establishment, constitution and government of District Municipalities and authorities
- Taxation and Finance- Public Health, Safety and Convenience
2.9 The law delineates constitution/election of urban local bodies and demarcates powersand responsibilities of these authorities. This law vests properties to be administered
in local bodies. The law also vests "works" such as waterworks, lighting, public
drainage and garbage disposal. Other activities include maintenance and repair of
streets, regulating construction through building regulations and providing other
amenities. With zonation as laid down in the Master Plan, building regulations
provide for development in consonance with floor space indexes and other rules.
ULBs also have powers of inspection and monitoring (See Appendix 4 for main
features of this legislation).
IV. DEVELOPMENT CONTROL RULES FOR MADRAS METROPOLITAN AREAILLUSTRATION UNDER THE TOWN AND COUNTRY PLANNING ACT, 1971
2.10 Madras, apart from being a major Metropolitan city, is the only town that hasprepared Control Rules under the Town and Country Planning Act. 1971. With itsstatus as an important borrower, it is essential to understand these control rules.Other major cities such as Madurai and Coimbatore are also in the process ofdeveloping Master Plans.
2.11 The rules have been developed under Section 9-C, Chapter lI-A of the above Actwhich prescribes that the Madras Metropolitan Development Authority shall carry outa survey of Madras Metropolitan Area and prepare a Master Plan. The contents ofthe Master Plan are found in these rules detailing policies and programmes for theoverall development of Madras. The plan emphasises regulation of land and buildinguse.
REGULATORY FRAMEWORK - ENVIRONMENT
I. MANDATORY
2.12 Mandatory environmental laws applicable to TNUIFSL financed projects are bothpollution and natural resource related. Pollution laws in the last decade impose strictcontrols over industrial and municipal operations. Despite participation by States andother bodies, GOI continues to have the final say on all matters concerning naturalresources, even with policies such as the National Forest Policy, 1988 which inviteslocal participation.
a) Water (Prevention And Control of Pollution) Act, 1974 and Tamil Nadu Water(Prevention And Control of Pollution) Rules, 1974
2.13 These laws seek to control pollution of water and enhance the quality of water. Underthis law, it is mandatory to obtain consent for discharge of effluents and pay consentfees to Tamil Nadu State Pollution Control Board (TNSPCB) for any municipalprojects causing water pollution.
b) The Water (Prevention And Control of Pollution) Cess Act, 1977:
2.14 This Act provides for levy and collection of a cess by local authorities on waterconsumed by persons or industries to augment resources for Pollution ControlBoards.
c) Environment (Protection) Act, 1986
2.15 This law essentially links pollution ana naturai resource issues. It seeks to
supplement existing laws on pollution control and also lays down standards for air
quality and noise. The Central Government in pursuance of its rule-making powers
under the Act, has passed notifications regulating siting of industry and operations.Environmental Impact Assessment (EIA) is not required for TNUIFSL projects as
they do not fall in the categories listed in Schedule I of the Environment Impact
Assessment notification, 1994. However the law includes a provision for projects that
are costed above Rs. 60 crores which have to undergo an EIA.
d) Forest (Conservation) Act, 1980
2.16 Forest (Conservation) Act, 1980 was enacted to halt rapid deforestation andenvironmental degradation. Without approval from the Central govemment, Stategovemments cannot de-reserve forest land or direct that it be used for non-forest
purposes. Municipal projects with activities falling in reserved forest areas need a
clearance from MoEF.
e) Wildlife Protection Act, 1972
2.17 This Act seeks to protect wildlife, by creating protected areas and controlling trade inwildlife products. If TNUIFSL activities cross over into protected area regimes thenrequisite permission must be obtained.
f) Coastal Regulation Zone (CRZ) Notification, 1990
2.18 This notification under Environment ( Protection ) Act, 1986 supplements the law on
site clearance by declaring certain zones as CRZ and regulates activities in these
zones. Further GoTN has also issued orders regulating development within 500 m
from the high water mark.
II. PRESCRIPTIVE
Constitutional Guarantees
a) Article 48-A of the Constitution
2.19 This directive principle states that the State shall endeavor to protect and improve the
natural environment
b) Article 51-A of the Constitution
2.20 This fundamental duty states that it is the duty of every citizen to protect and improvethe natural environment.
2.21 Courts have tended to enlarge the scope of fundamental rights so that environmentdimensions are recognised. When municipal bodies act as borrowers, TNUIFSL willsee to it that checks and balances are properly instituted as these local bodies aresubject to constitutional challenge.
Legislations
c) Air (Prevention and Control of Pollution) Act 1981 and Tamil Nadu Air (Preventionof Control of Pollution) Rules 1983
2.22 These laws address the prevention and control of air pollution. TNUIFSL projects willnot cause any air pollution hence these laws will not be directly applicable. If airpollution is caused, immediate remedial action will be taken.
d) Hazardous Waste (Management and Handling) Rules, 1989
2.23 This law addresses handling of hazardous substances that fall under specifiedschedules. Projects envisaged by TNUIFSL will not require handling of specifiedsubstances.
Policies
e) National Conservation Strategy and Policy Statement on environment andDevelopment, 1992
*f) Policy Statement for Abatement of Pollution 1992
C. WORLD BANK OD 4.01 REQUIREMENTS
2.24 World Bank's Operational Directive 4.01 outlines Bank policy and procedures forenvironmental assessment (EA) of bank investment lending operations and relatedtypes of environmental analysis. Small scale urban infrastructure and servicesprojects envisaged to be financed by TNUIFSL are not clearly categorsed in OD4.01. They may be considered the lowest level of Category B i.e. projects withcomparatively less significant impact; not as sensitive, numerous or diverse impacts.Also considering the scale, remedial measures can be easily designed. Screening ofthe project at the outset will identify environment issues if any, suggest appropriate
mitigation measures required. and also decide whether any detailed environment
studies resulting in an environmental assessment repor. are required at all.
IV. COMPETENT REGULATORY AGENCIES
a) Municipal Bodies
2.25 For most laws applicable to TNUIFSL projects, municipal authorities (who will be
recipients of finances) will have to certify that they are abiding by the law they are
entrusted to protect and administer. In case of other borrowers, clearances specified
in the Acts would have to be obtained before sanctions.
b) Pollution Control Boards
2.26 In certain cases like 'consent to discharge' under pollution laws, the TNSPCB and
Department of Environment and Department of Forests.
c) StatelCentral Ministry Of Environment and Forests
2.27 Only in a few cases such as projects in reserved forests or protected areas will the
MoEF of the Central Govemment be involved.
d) World Banklother Multilateral Agencies
2.28 The World Bank and other Multilateral Agencies will ensure compliance with their
Operational Directives.
REGULATORY FRAMEWORK - SOCIAL
I. MANDATORY
a) Land Acquisition Act, 1894 as amended in 1984
2.29 This Act enables the State to acquire private land for public purpose and has
provisions for acquisition for industrial purposes. The Act ensures that no person is
deprived of land except under law and entitles affected persons (landowner, tenant or
licensee) to a hearing before acquisition, with due and adequate compensation made
thereafter.
2.30 Only land owners, tenants and licensees are possible compensation recipients. Thelandless, agricultural and non-agricultural labourers, artisans, forest produce
collectors are excluded. The Act deals with cash compensation and provides several
methods of valuing compensation. Several States are using negotiations as a means
to fix compensation and acquire land. Grevance/Redressal mechanisms are also in
place and affected persons may seek the intervention of the High Court and Supreme
Court.
b) Government Order dated 21.09.95 from the Commissioner of Land Administration
regarding acquisition through negotiation
2.31 The Tamil Nadu Government Order provides for acquisition of land throughnegotiation and assessment of land value by a committee. The District Collector has
powers to approve amounts less than Rs. 15 lakhs. Approval for amounts above this
has to be sought from the Government of Tamil Nadu. The reason for resorting to
private negotiation is to implement schemes within a time bound schedule, arrive at
an acceptable value, preempt protracted court cases which only delay all processes.Guidelines have been framed for purchase of lands under private negotiation.
Implementing and operating agencies for such a scheme are a District level and a
State level negotiating committee with ancillary monitoring powers.
c) Board Standing Orders (Standing Orders of the Commission for Revenue Board)based on the Revenue Act 1884 of the Madras Presidency (for Rayatwari states).
2.32 The Board Standing Orders based on the Revenue Act, 1884 of the MadrasPresidency broadly states policy on Government owned lands. This policy covers
assignment of land, lease and cancellations and encroachments.
d) Government of Tamil Nadu (Resettlement and Rehabilitation) Policy applicable to
Involuntary Resettlement under the Tamil Nadu Urban Development Project
2.33 GoTN has been implementing the TNUDP project since 1988. With a view to provide
R&R compensation and assistance to PAPs, GoTN has laid down these policyguidelines considering relevant legislation and the World Bank guidelines. This is
provided as annex 1.
2.34 Key points in the policy:
- Ensures that all PAPs will be compensated and rehabilitated to improve or atleast restore their living conditions and income eaming capacity at the pre-
project level and will share in project benefits
- When PAPs lose land/structures and will be displaced and/or economically
affected adversely, detailed planning will be made along with implementation
arrangements in an operational R&R Action Plan
Defines PAPs, lists entitlements. details peoples participation, supervision
by NGOs and supervision and monitoring
Mentions an implementation schedule that would be broken up into specific
activities and coordinated with the chronogram of construction
The cost would be part of the overall project budget and adequate provision
would be made for contingencies and inflation
2.35 Relevant provisions in this policy prepared by GoTN have been incorporated into
TNUIFSL's management procedures keeping in view the practical issues related to
urban infrastructure projects.
11. WORLD BANK OD 4.30 ON INVOLUNTARY RESETTLEMENT
2.36 This directive describes Bank policy and procedures on involuntary resettlement as
well as the conditions that borrowers are expected to meet in operations involvingresettlement. The objective of the Bank's policy is to ensure that populationsdisplaced by a project also benefit from the project and that standards of living are
improved, or at a minimum, restored. TNUIFSL as a borrower of credit would ensure
that Bank policies are followed.
11l. TNUIFSL's SOCIAL ENTITLEMENT FRAMEWORK
2.37 In contrast to the environmental legislation which exists in India and provides a
reference for the environment part of the ESR, no similar framework or legislationexists for general social impacts of urban infrastructure projects - resettlement and
rehabilitation (R&R) in particular. In order to provide a framework for the R&R
process in projects where World Bank financing is involved, this ESR provides a list
of entitlements for project affected individuals, families and establishments. Detailed
exposition of the social entitlement framework for World Bank financed projects is
provided in Appendix 5. Seven basic categories of issues/impact are foreseen underthis entitlement framework:
(a) Loss of land
(b) Loss of structure
(c) Loss of source of livelihood(d) Loss of access to common resources and facilities
(e) Loss of standing crops and trees
(f) Losses during transition of displaced persons/establishments(g) Losses to host communities
2.38 For purposes of this framework. the following aefinitions will be applicable
2.39 Projected Affected Persons (PAP): PAP means those who are:
- physically displaced/economically adverseiy affected as a result of physical re-
location;
- economically affected but not physically re-located;
- losing access to community amenities and resources.
2.40 Household (HH): A household is a group of persons who commonly live together
and would take their meals from a common kitchen.
2.41 Replacement Value: Replacement Value means market value excluding
depreciation. In cases where buildings are involved, depreciation will not be taken
into account. Replacement value of land should be determined through a land
market survey.
2.42 Cut-off date: Cut-off date is used to determine the eligibility of PAPs. The cut-off
date will be the date of the baseline survey. The survey will identify the residents orusers of the land being acquired.
2.43 Land: The term land refers to land acquired under the Land Acquisition Act orthrough private transactions. All land provided under the entitlement framework
should be provided with secure tenure.
2.44 PAPs will be given choices regarding the entitlements provided. If land-for-land is
chosen by the PAP, the land should be of equivalent value and/or productivity. Basic
units or minimum economic holding will follow the norms of the national, state or local
Govemments sufficient to restore or improve the standard of living.
Table 2.1: Social Impact & Entitlement Framework For World Bank Financed Projects*Type of lssuellmpact Entitlement Entitlement Options Respon
_____________________________________ Beneficiary ________________Benefciary sibilityA. Loss of landa. Homestead(i) vith valid ttile, or customary or (i) Household (i) equivalent area of land or cash compensation at Govt/
usufruct nghts replacement value Sponsor(ii) squatters (ii) Household (ii) altemative site as per Govemrnment norms
b. Agricultural land(i) with valid title, or customary or (i) Titleholders (i) altemate land of equiv.productivity potential or
usufruct rights cash payment at replacement value(ii) tenants, sharecroppers, leaseholder, (ii) Individual (ii) local standards for minimum economic
encroachers landholding or cash payment for minimumeconomic landholding
c. CommerciaV IndustnaUlnstftutional(i) with valid title, or customary or (i) Titleholder (i) equivalent land or cash at replacement value
usufruct rghts(ii) tenant, leaseholder (ii) Unit (ii) equivalent leased land, reimbursement for
unexpired lease, transition allowance equivalent to6 months incomne
(iii) squatter (iii) Unit (iii) equivalent land and transition allowance equivalent____________________________________to_2_months_income_____
2. Loss of structurea. House(i) wvith valid title, or customary or (i) Household (i) structure of equivalent standard or cash Govtw
usufruct nghts compensation at replacement value Sponsor(ii) tenant, laseholder (ii) Household (ii) transition allowance equivalent to 6 months rent to(iii) squatters, pavement dwellers (iii) Household re-establish residence
(iii) basic dwelling unit as per govemrnment norms orcash payment for basic dwelling unit
b. CommerciaV Industnal/ Institutional(i) with valid title, or customary or (i) Uni (i) structure of equivalent standard or cash
usufruct rights compensation at replacement value(ii) tenant, leasehokler (ii) Unit (ii) reasonable transition allwance equivalent to 6
months income(iii) squatters, pavement dwellers (iii) Unit (iii) basic unit as per govemment norms or cash
._____________ _ payment for basic unit3. Loss of livelihood/ trade/
occupation (i) Individual (i) employment in reconstructed enterprise or(i) Wage employrnenVagricuiture/ package for re-employment or starting a business, Sponsor
commerciaL/ industrialUinstitutional and transition allowance equivalent to 1 yearwages in case of permanent closure andequivalent to closed time in case of temporary
.___ ___ ___ ___ ___ ___ ___ ___ ___ ______closure.
4. Loss of access to commonresources and facilities
(i) Rural common property resources (i)HH/community (i) replacement CPRslamenities or providing Govtlminimum Govemment standard Sponsor
(ii) Urban cic amenities (ii)HHlcommunity (ii) access to equivalent amenities/services5. Loss of standing cropsttrees(i) With valid title (i) Household all categories entitled to cash compensation Sponsor(ii) TenanUlessee (ii) Household equivaient to market value for crops and market value(iii) Encroachers/Squatters (iii) Household of the tree products for the remaining life of the tree
6. Losses during transition ofdisplaced persons/establishnents
(i) Shifting/Transport (i)Household/Unit (i) provision of transport or cash equivalent Govt/(ii) Maintenance (ii)Household/Unit (ii) cash payment for 3 months Sponsor(iii) Construction (iii)HouseholdlUnit (iii) cash payment for cost of labour7. Losses to Host cornvnunities(i) Amenities/Services (i) Community (i) Restore losses as a result of re-settlement or GovV
amenities/services equivalent to those provided Sponsorto PAPs
*To be read in conjunction with Appendix 5* The choice of the entitlement lies with the PAPs
IMPLICATIONS TO TNUIFSL
1. MUNICIPAL BODIES AS BORROWERS AND REGULATORS
2.45 The dual nature of municipal bodies brings with it distinct implications. As a
govemment agency, its duty is to set up amenities and facilities, to monitor
operations and be in charge of approvals. In a project sponsor mode, those sameregulations will apply to its operations but in case of violation the repercussions are
far greater. TNUIFSL's lending operations are presently focussed on these agencies.
11. CONSUMER PROTECTION
2.46 While the legal framework did not deal with the issue of consumer protection, thisarea of law has developed rapidly. If municipalities provide sub standard
infrastructure or there are deficiencies in service, an affected consumer can takelegal action. This will be kept in mind in TNUIFSL financed projects and it will beensured that the services provided will subscribe to high standards of quality
Ill. ENVIRONMENT
2.47 Compliance with environmental requirements laid down by the policy, legal andregulatory framework will not pose a problem in a majority of projects that areenvisaged to be financed by TNUIFSL. However, in most cases the regulatoryagency is the municipal authority. Hence it will be essential for the municipal body
requesting the finances to clearly separate the project execution function andregulatory function. It will be the responsibility of the Municipal Commissioner to
fumish the necessary undertaking of compliance along with the project proposal.
Categorisation of projects will be done so that assessments can be done speedily
and remedial measures can be adopted.
IV. SOCIAL
2.48 Land acquisition is not expected in a majority of TNUIFSL financed projects. Someprojects like road widening may have land acquisition or relocation of squatters and
hence rehabilitation and resettlement. Provisions for negotiated derivation of
compensation rates for land, ensures that problems of acquiring land from private
individuals are minimised. However cumbersome procedures for mutation of land
from different govemment departments need to be simplified.
SECTION 3
TNUIFSL ENVIRONMENTAL AND SOCIAL ASSESSMENT FRAMEWORK
3.1 TNUIFSL, as a financial intermediary, will ensure the financial viability of each project
that it funds. TNUIFSL will catalyse municipalities into attracting prvate investments
on their own. The project cycle for appraising and monitoring projects forms the
background for evaluation and management of environmental and social issues that
could arise within projects that are scrutinised and funded by the TNUIFSL. This
section elaborates the project cycie of the TNUIFSL and the environmental and social
assessment and mangement process therein. A risk evaluation and management
process that is in consonance with the project cycle has also been elucidated.
TNUIFSL PROJECT APPRAISAL PROCESS|
3.2 The key task of TNUIFSL will be to appraise project proposals submitted by ULBs,
Statutory Bodies, Public Undertakings and Private Investors; to ensure compliancewith its operational procedures; consistence with risk management mechanisms;
and, enforce loan recovery mechanisms. During screening and scoping of projects,the levels of detail to which each aspect of a project needs to be assessed will be
determined. After a project has gone through successful appraisal and approval,
TNUIFSL will closely monitor the construction, operation and maintenance phases.
1 PROJECT SCREENING
3.3 A project may be initiated through a formal lefter of intent, a telephonic or personal
discussion. TNUIFSL will assess the eligibility of a project based on TNUIFSL's
lending policies. The scale and sensitivity of associated issues in a project would
determine the categorisation of the project from an environmental and social
perspective. The scope of the project document i.e. if it should include EAR and/or
SAR, environmental management designs etc. would then be identified. A Loan
Application form and an appropriate Information Package will be issued to the
Borrower for specific project details. The Loan Application Form will include
environmental and social screening criteria.
3.4 On receiving a completed Loan Application form from the borrower, TNUIFSL will
assess the creditworthiness of the borrower. Be3ides this, the financial and
economic rate of retum; proportion of Loan to the Grant Fund; environmental andsocial impacts; and risks will be also be assessed for the project. The assessment
will form a part of the Initial Screening Report (ISR) and will decide whether or not the
project should be taken up for detailed appraisal.
3.5 The borrower will prepare a Detailed Project Report (DPR) as per guidelines
provided to him in the Information Package and will submit the document to
TNUIFSL. Requisite environmental and social detaiis will also form a part of the
DPR.
3.6 On receiving the DPR. TNUIFSL will designate a loan officer who will undertake a
quick desk review to verify that all requisite information has been furnished in the
DPR. The loan officer will then clear the DPR for detailed appraisal and will inform
the Borrower about the time period required for detailed appraisal.
11. PROJECT APPRAISAL
3.7 During Project Appraisal, TNUIFSL (with the help of corporate consultants in the caseof E-l/ S-1 projects) along with the borrower will vet the DPR. Technical aspects that
will be looked into are eligibility criteria for projects and borrowers; suitability of site;availability of inputs; appropriateness of, and proven experience with, the technology
offered; engineering designs; and construction, operation and maintenancearrangements. Economic aspects will include cost estimates; financial operating'
plan; economic and financial viability; and adequacy of proposed financing.Organisational aspects considered will be the institutional, legal and contractual
framework; risk analysis; necessary clearances from regulatory agencies; andrequired covenants. Environmental and social aspects will be cross-checked againststandards set in the ESR. Field investigations to verify various document componentswill be carried out when necessary.
3.8 The loan officer will submit the appraisal report for approval with a recommendation
to accept the project as submitted; or accept with modifications; or reject it.
Ill. LOAN SANCTIONIDISBURSEMENT
3.9 When project costs are below Rs.15 crores, the loan has to be approved by the
TNUIFSL board. Projects above Rs.15 crores will obtain approval for loans from the
Trustee Company (TC) Board. The first three loans where resettlement issues are
involved, loans over US $ 5 million and loans for which project cost exceeds US $ 20
million are subject to the approval of IDA.
3.10 After requisite approvals and concurrence are obtained, the loan officer will discussbasic terms of agreement such as rate of interest; repayment schedule;
security/guarantee; and environmental and social commitments with the borrower.
TNUIFSL then prepares and signs the loan agreement with the borrower. The first
loan installment will be then disbursed.
* First three El/ SI projects will be reviewed and cleared by the Bank.#
IV PROJECT MONITORING, AUDIT AND RECOVERY
3.11 TNUIFSL will monitor all projects that it finances to ensure conformity to standards
during construction, operation and maintenance. Quarterly Progress Reports will besubmitted by Borrowers. Visits to project sites will be undertaken as and when
necessary. Based on verification of progress reports, field visits and compliance to
loan disbursement conditions, subsequent installments will be disbursed.
3.12 TNUIFSL is also setting into place a system of auditing projects. All projects aboveRs.15 crores and approximately 25% of other projects will be audited annually withthe help of extemal/corporate consultants. The Audit Report will be submitted to theTC Board through the CEO. TNUIFSL will ensure that there is no default in loanrepayments by enforcing strict loan recovery mechanisms.
Table 3.1: TNUIFSL PROJECT APPRAISAL PROCESS
MiLE Objectives PROCESS RESPONSI i DECISION/PRODLSTONES _ _ BILITY CT1 Project * Receive Letter of Intent r a. Discussions with borrower to * TNUIFSL * Letter of IntentScreening I - assess ei.gibility o oroject * Borrower received
based on TNUIFSL lending I * Decision topolicies proceed or not
- categorise project from with an Initialenvironmental and Screening
social perspective Report (ISR)- identify scope of project report * Loan Applicatior
b. Issue Loan Application form for Form issuedISR * Appropriate
c. Issue Information Package for InformationDetail Project Report (DPR) Package for DPF
issuedPrepare Initial Screening a. Receive Loan Application form * TNUIFSL * Initial Screeningreport b. Assess * Borrower report
- creditworthiness of borrower * Decision whethe- financial/economic rate of or not to take upreturn project for- loan: grant proportion detailed- environmental and social appraisalimpacts-
projectiborrower/other risks* Receive DPR from a. Desk review * TNUIFSL * Project Report
borrower - designation of loan officer * Borrower received- check project report againstchecklist- time period for apprais;al
specified2. Project * Appraise DPR a. Detailed appraisaL. Site * TNUIFSL * ProjectAppraisal investigation * Borrower Appraisal
if necessary, to assess Report with- suitability of site decision to- availability of inputs - accept project- technical and engineering as
designs submitted- construction, operation and - accept with
maintenance arrangements modifications- environmental and social reject
viability- economic and financial viability- financial and operating plan- institutional and legal
framework- contractual framework- risk analysis and allocation- clearances from regulatory
agencies3. Loan * Approvals from a. Send Detail Project Report for * TNUIFSL * Approval of theSanction/ appropriate authorities approval project
Disbu - CEO (project costs<Rs.5rsement crores)
- TNUIFSL board (project costsRs. 5-15 crores)
- TC Board (project costs >Rs.15crores)
* Concurrence from a. Obtain concurrence from MA for * MA * MAsMultilateral accepted project report (for first * TNUIFSL concurrence onAgencies (MA) three projects with resettlement accepted projec
and all projects where costs . report>Rs.15 crores)
MILE Objectives PROCESS RESPONSIi DECISIONIPRODtSTONES I , BILITY CT
* issue of Sanction letter a Discuss Terms of Agreement * TNUIFSL I* Sanction Letter(TOA) for the project * Borrower issued
- interest rate- repayment schedule- securitylguarantees- environmental ano social
commitment
* Finalise Loan Agreement a. Prepare and sign Loan * TNUIFSL * LoanAgreement * Borrower Agreementsb. Disburse first installment signed
* First Installment.__________ _ _ _ _ _ _ _ _ _ _ _ _ _disbursed
4.Project * Ensure conformity to a. Prepare quarterly progress * Borrower * QuarterlyMonitoring standards during reports * TNUIFSL Progress reportsAudit and construction, operation b. Field visits if requiredRecovery and maintenance
* Ensure compliance to a. Disburse subsquent installements * TNUIFSL * Complianceloan disbursement b. Prepare Project completion report * Borrower reportconditions * Project
completion.___ ____ _report
* Audit project, if sampled a. Audit projects with the help of * TNUIFSL * Audit report (ifExternal/ Corporate consultants. * Extemal sampled)
Consultan________ _______ _____ _ _______ ________ _______ _______ _______ ________ t ____________________
* Ensure no defaults occur a. Enforce loan recovery * TNUIFSL * Recovery ofin repayments mechanisim * Borrower payments
ENVIRONMENTAL AND SOCIAL ASSESSMENT AND MANAGEMENT FRAME WORK
3.13 The environmental and social assessment procedures evolved by TNUIFSL are in
consonance with its project appraisal process. The various steps for environmentaland social assessment and management of TNUIFSL projects have been dovetailed
into the TNUIFSL project appraisal process. For each step the objectives, processsteps, outputs and responsibilities have been identified. Initial screening criteria have
been evolved for projects, based on magnitude and sensitivity of environmental and
social issues.
3.14 PROJECT SCREENING
Objectives
i. Screen and Scope projects from environmental and social perspective.ii. Receive environmental and social components of DPR
Process
a. TNUIFSL will discuss the project with the borrower to identify environmentaland social issues based on the checklist in Section 1. An initial screening andcategorisation of the project will be carried out depending on the types andmagnitude of environmental and social issues.
b. After discussions on the project, an Information Package (IP) will be issued
as part of will be,issued as a part of the Loan Application Form.
C. The IP will consist of an environmental and social screening form, informationon possible environmental and social issues in urban infrastructure projectsand EAR/SAR (which includes Rehabilitation Action Plan) for E-1 and S-1projects, EMP format, generic environmental management measures andcatalogue of environmental management measures for E-2 projects and SMPformat for S-2 projects and the social entitlement framework for S-1 and S-2projects.
d. Details required in the Loan Application Form will be filled out and submitted
to TNUIFSL by the borrower in the Loan Application Form. TNUIFSL will
verify the environmental and social issues as part of the Initial Screening
Report (ISR), and finally categorise the project as E-1, E-2/ S-1, S-2.
e. Based on guidelines issued in the Information Package, the borrower willprepare a Detailed Project Report (DPR) using outlines for E-land S-1projects andlor EMP ano SMP. The DPR will include a Rehabilitation Action
Plan (RAP) as part of the SAR for S-1 projects.
f. On receiving the DPR from the borrower, TNUIFSL will assess whether theenvironmental and social details given are adequate. If inadequate, the DPR
will be sent back to the borrower for further information. On receiving a DPRcomplete in all aspects, TNUIFSL will specify a time period to the borrowerfor environmental and social appraisal.
Decisioni Product
Environmental and Social Screening Report of ISREnvironmental and Social input into decision to proceed or not with projectAdequacy of environmental and social details in DPR verified
3.15 PROJECT APPRAISAL
Objectives
i. Appraise environmental and social components of DPR
Process
a. During project appraisal, TNUIFSL will appraise environmental and socialcomponents of the DPR. While reviewing EARs and SARs with the help ofcorporate consultants, TNUIFSL will look at the type of environmental andsocial issues, adequacy of environmental and social management measuresprovided and the cost of implementing the environmental and socialmanagement measures. The proposed project sites will be visited ifnecessary.
b. TNUIFSL -will discuss any further changes or modifications that have to bemade to the environmental and social components of the DPR with theborrower. TNUIFSL will finalise the environmental and social appraisal report
as part of the Project Appraisa, Report.
Decisionl Product
Environmental and Social Appraisal Report as part of Project AppraisalReport with decision to: accept project as submitted; accept project with
modifications; or, reject project.
3.16. LOAN SANCTION AND DISBURSEMENT
Objectives
i- Approval of environmental and social components of DPR from appropriate
authority
ii. Concurrence from Multilateral Agencies
iii. Issue of Sanction Letteriv. Finalisation of Loan Agreement
Process
a. Prior to Loan sanction and disbursement, the environmental and socialcomponents of the DPR have to be approved by the appropriate authority.Projects that have costs below Rs.15 crores will have to be approved by the
AMC board and projects that cost above Rs.15 crore will be sent to the TCboard for approval. The first three loans where resettlement is involved and
loans for projects where projects costs exceeds US $ 20 million are subject to
the approval of IDA.
b. Sanction letter for the loan will be issued. TNUIFSL will discuss
implementation of environmental and social management measures of DPR
with the borrower. The Resettlement Plan as approved in the DPR will beimplemented by ULB, if the project is sponsored by ULB. The RAP will be
implemented by Private Borrower if the project is implemented by Private
Borrower. The funding for resettlement would be made out of Grant Fund(GF) in case of ULB sponsored projects. The environmental and social
commitments will be then translated into covenants as part of the Loan
Agreement. Once the Loan Agreement has been finalised and signed,
TNUIFSL will disburse the first loan installment.
Decisionl Product
Final approval
Final concurrence from MAEnvironmental and Social covenants as part of Loan Agreement
First installment disbursed
3.18. PROJECT MONITORING AUDIT AND RECOVERY
Objectives
a Ensure conformity to EAR and SAR during construction, operation and
maintenanceb Audit projects
Process
a. During Environmental and Social Monitoring and Audit, TNUIFSL will ensurethat the Borrower conforms to the EAR and SAR during construction,
operation and maintenance.
b. Monitoring of Environmental and Social components will be carried outthrough environmental and social compliance reports that form a part of
Quarterly Progress Reports. Visits will be carried out to project sites if
necessary. The project will also be monitored through interactions withborrowers, local user groups, govemment etc. and where implementation of
the EAR and SAR is complete, it will be certified as part of the Project
Completion Report.
c. Annual maintenance reports will be submitted by the borrower to TNUIFSL tillcompletion of loan repayments.
d. TNUIFSL with the help of external consultants audit projects on
environmental and social aspects annually. While all projects of E-1 and S-
lcategory will be audited, TNUIFSL will sample 25% of the E-2 and S-2
projects. The remaining E-2 and S-2 projects and all E-3 and S-3 projects will
be audited through compliance reports.
Decisiorn! Product
- Environmental and Social compliance Reports as part of Quarterly Progress
Reports- EAR/SAR Compliance Certificate as part of Project Completion Report
- Annual Maintenance Reports- Environmental and Social Audit Reports
Table 3.2:ENVIRONMENTAL AND SOCIAL ASSESSMENT AND MANAGEMENT FRAMEWORKMilestones Objectives Process ResRonsibilitP Decision/Product
1. Prtject ScreeningEnvironmental and *Screen and Scope a. Discuss project with Borrower a TNUIFSL G Environmental &Social Screening projects from - Identify environmental and social issues from Section I *Borrower Social Screeningand Scoping environmnental and b M Issue Environmental and Social screening form as part of Loan Report of ISR
social perspective Application Form for Initial Screening Report (iSR) Environmental &c. Issue appironmental andisoieal s components of Social input into
Information Package for Detailed Project Report (DPR) decision to proceed- EAR and SAR (which includes RAP) outline for E-land S- or not withi project
l category projects- EMP and SMP formats and Generic Environmental Management
Measures and Catalogue of Environmental Management Measuresfor E-2 and S-2projects
d. Receive Loan Application forme. Prepare ISR
- verify environmental and social issues- rinalise categorisation of project
* Receive a. Receive DPR from borrower *TNUIFSL *Adequjacy ofenvironmental and b. Assess if environmental and social details are adequate environmental &socialsocial components - if adequate, retain report for detailed appraisal details in D)PR verifiedof DPR - if inadequate, send report back to borrower for further information
- specify time period for environmental and social appraisal .2. Project Appraisal
Detailed * Appraise a. Review DPR with the help of Corporate Consultants in ca se of * TNUIFSL * E&S Appraisal Report asEnvironmental and environmental and E-11S-1 category projects. Conduct site visits, if required. Crosscheck * Borrower part of Project AppraisalSocial Appralsal social components - type of E&S issue Report with decision to
of DPR - magnitude of E&S issue accept project as- adequacy of E&S management measures provided submitted- implementation of RAP - accept project with- cost of implementing E&S management measures modificatioris
b. Discussions with borrower on - reject project- modifications to be incorporated in environmental and social
components of DPR- appropriate changes in other components of DPR
c. Finalise environmental and social components as part of projectappraisal report
3. Loan Sanction & Disbursement
TNUIFSL -ESR/ Final Draft' January'97 32 ADevelopmont Alternafives
Milestones Objectives Process Responsibility Decision/Product
Environmental and * Approval of a. Obtain approvals for approval of environmental and social * TNUIFSL * Final approvalSocial Report environmental and components of DPR from * BorrowerApproval social components - CEO (project costs<Rs.5 crores)
of DPR from - TNUIFSL board (project costs Rs. 5-15 crores)appropriate authority - TC Board (project costs >Rs.15 crores)
* Concurrence from a. Send environmental and social components (as part of DPR) for * TNUIFSL * Final concrirrence
MA concurrence to MA * MA from MA- for first three projects where reseHtlement is involved- all projects where project cost above Rs. 15 crores
* Issue Sanction a. Discuss implementation of environmental and social management * TNUIFSL * Environmental and
Letter measures of DPR with Borrower * Borrower Social covenarnts as- Translate environmental and social commitments into Terms of part of Loan
Loan Agreement Agreerent
* Finalisation of Loan a. Sign agreement and disburse first loan installment * TNUIFSL * First installrITerit
Agreement * Borrower disbursed
4. ProJect Monitoring, Audit and Recovery
Environmental and * Ensure conformity to a. Environmental and Social monitoring * Borrower * E&S compliance
Social Monitoring EAR and SAR during - Environmental and social compliance reports as part of Quarterly * TNUIFSL Reports as part of
and Audit construction, progress reports Quarterly P rogressoperation and - Field visits if required Reportsmaintenance - Interactions with borrower, local user groups, government, etc. . EAR/SAR Compliance
b. Certification of EAR and SAR completion as part of Project Certificate as part ofCompletion Report Project Cnompletioni Report
c. Annual maintenance reports till completion of loan repayments * Annual MaintenanceReports
* Audit projects a. Audit Project on environmental and social aspects annually with the * TNUIFSL * E&S Audit Reportshelp of external consultants for- all projects of E-1and S-1category- 25% of E-2 and S-2 category- Compliance Reports for remaining E-2, & S-2 projects and all E-3
and S-3 projects
TNUIFSL -ESR/ Final Draft/January'97 33 ADevelopment Altern,atlves
ENVIRONMENTAL AND SOCIAL RISK MANAGEMENT FRAMEWORK
3.19 Environmental and Social risks could adversely affect project operations, eamings
and hence loan servicing obligations of TNUIFSL. Even though projects that will be
funded by TNUIFSL are expected to be physically and financially small (refer Table
1.1), TNUIFSL recognises the importance of managing environmental and social
risks that could arise in E-1 and S-1 projects. TNUIFSL will carry out environmental
and social risk management as a part of its project management strategy. In order to
manage environmental and social risks which can occur in projects, TNUIFSL has
dovetailed environmental and social risk management into its Environmental and
Social Management Process.
3.20 TNUIFSL's risk management process will comprise the following steps:
* Risk Management Plan
* Risk Appraisal
* Risk Allocation
* Risk Monitoring
3.21 The framework is as shown in Table 3.3
RISK MANAGEMENT PLAN
3.22 After receiving a completed Loan Application Form from the borrower, TNUIFSL willidentify risks from the checklist provided in Section 1 and crosscheck the same withthe Loan Application Form. TNUIFSL will carry out a preliminary environmental andsocial risk assessment and risk characterisation on the basis of their approximatefinancial implications. TNUIFSL will then carry out a preliminary environmental andsocial risk allocation as shown in Table 3.4 and prepare an initial Risk ManagementPlan as part of the ISR.
3.23 TNUIFSL will receive a detailed risk management plan from the borrower as part ofDPR. The DPR will be scrutinised for adequacy of information. If the information isadequate, TNUIFSL will retain the report for further appraisal. If the information is notadequate, TNUIFSL will send back the report to the borrower for further details.
11. RISK APPRAISAL
3.24 TNUIFSL will appraise the Risk Management Plan provided by the borrower in DPR.
TNUIFSL will cross-check the environmental and social risks identified in the ISR.
TNUIFSL will then appraise the type and magnitude of risk, the characterisation of
risk and risk allocation and management measures in consultation with the borrower.
Ill. RISK ALLOCATIONITRANSLATION
3.25 TNUIFSL obtains approval from the CEO for risk management measures in projects
which cost less than Rs. 5 crores. TNUIFSL will obtain approval from the AMC board
in the case of projects which costs between Rs.5 to 15 crores and from the TC board
for projects that cost above Rs.15 crores. TNUIFSL will translate risk allocation into
covenants after consulting the borrower. Finally TNUIFSL and the borrower will sign
the covenants and TNUIFSL will disburse the first installment.
IV. RISK MONITORING AND PREPAREDNESS
3.26 TNUIFSL will monitor risk through Quarterly Progress Reports and field visits
whenever necessary. TNUIFSL will conduct risk monitoring through interactions with
borrower, State Govemment and Regulatory Agencies.
3.27 The borrowers should at any point in time be prepared to encounter risk even after
the best prevention measures are set in place. TNUIFSL will ensure this through a
set of protocols that clearly define who has to execute specific tasks. The borrower
should ensure that plans are prepared and implemented.
3.28 After the appropriate risk management systems are set in place, TNUIFSL will share
and transfer the remaining risk and the associated liabilities, through insurance.
TNUIFSL will explore the opportunities whereby these risks can be insured.
Insurance Mechanims
3.29 A potential risk for TNUIFSL is the possibility of being held liable by third parties for
environmental damage. Protection against this becomes increasingly important as
the question of placing liability (fault) for such damage is now more accepted.
3.30 As far as legislation on environmental insurance is concemed, the only law on the
matter is the "Public Liability Insurance Act7, 1991. In case of an accident, payments
to victims will be made from the Grant fund and insurance cover.
3.31 TNUIFSL will consider liability limits, deductibles, and self-insurance. The risk
analysis process will identify what level of exposure to damages arises from
operational procedures or procucts the institution is exposed to. Limits to the liability
TNUIFSL can cope with will be defined in accordance with specific findings and due
consideration would be accorded to the danger of accumulation
Table 3.3: ENVIRONMENTAL AND SOCIAL RISK MANAGEMENT FRAMEWORK
Milestones Objectives Process1. Project Scr ningRisk S InitialRisk Identification - Receive loan application formManagement * Initial Risk Assessment - Prepare initial Risk Assessment ReportPlan * Initial Risk allocation - Identify environmental and social risks from check list provided
in Section 1- Cross-check initially with loan application form- Preliminary assessment of risk- Preliminary characterisation- Initial allocation of risk
* Receive environmental a) Receive DPR from borrowerand social Risk b) Assess if environmental and social Risk details are adequateManagement plan as - ilf adequate send for detailed appraisalpart of DPR. - If inadequate send report back to borrower for further
____ _ _ __ _ information
11. Project Appr aisal _
Risk * Appraisal of risk a) Appraise environmental and social Risk Management PlanAppraisal management plan of - conform Risk identified
DPR - characterisation of risk- allocation of risk- Risk Management Measures
b) Finalise environmental and social Risk Management_____________ ____________ _____________ m easures
111. Loan Sanction and DisbursementRisk * Translation of risk a) Approval of Risk Management measuresAllocation allocation into b) Translate environmental and social Risk Management
covenants measures into covenantsc) Sign environmental and social Risk Management covenants
IV. Project Monitoring and AuditRisk * Risk Monitoring a) Monitor RisksMonitoring * Risk Preparedness - Quarterly progress reports
- Field visits.___________________________.____________ b) Risk Preparedness via Institutional Mechanisms
Table 3.4: RISK ALLOCATION FRAMEWORK FOR TNUIFSL PROJECTSKey Role Players State TC AMC Municipality Contractor/ Insurance
Govt. Operator1) inability to pay _
2) Non-compliance __= _
- Regulatory _ 7- Contractual
3) Site Contamination - -
4) Major Hazards -
5) Force Majeure _ . .- Insurance- Non-insurable
6) Unidentified impacts7) Non-Implementation/ delayed c
implementation of Social Plan8) Public Interest Litigation 7 7 -;
SECTION 4
ORGANISATIONAL SUPPORT STRUCTURE
4.1 In order to ensure that the policy obligations and associated procedures in theEnvironmental and Social Report (ESR) are operationalised, TNUIFSL has outlinedan organisational support structure. Besides fixing responsibility, the organisationalsupport structure also outlines capacity building essential for TNUIFSL staff and
borrowers.
Organisational Structure
4.2 TNUIFSL has consciously been designed as a lean organisation with minimaloverheads. (Refer Chart 4.1). The personnel and support systems are to beincrementally geared up as business expands.
4.3 TNUIFSL will deploy six professionals headed by a Chief Executive Officer (CEO) in
the first year. Six professionals will consist of two Vice Presidents (Projects), oneCompany Secretary, one Manager (Technical) and two Managers (Accounts).
Responsibility Allocation Framework
4.4 In the first two years a majority of the projects to be financec are expected to beenvironmentally and socialiy benign projects (E-3 and S-3 categories) or those where
best practises available can be easily applied (E-2 and S-2 categories - refer Section3). Very few projects with severe environmental and social complexities (E-1 and S-
1 categories) will be financed.
4.5 TNUIFSL will ensure sensitivity to environmental and social aspects of various
projects among its project appraisal and management staff. TNUIFSL has clearly
delineated the functions of professionals within the organisation.
4.6 Both Vice presidents at TNUIFSL will do appraisals of projects. The Manager(Technical) will help the CEO and Vice Presidents in project specific environmental
and social assessment and management issues. The two Managers (Accounts) will
maintain loan accounts of borrowers.
4.7 As the portfolio of projects increase in numbers and complexity of environmental and
social issues, more specialised expertise will be inducted into the TNUIFSL as full-time staff.
Corporate Consultants For Environmental And Social Issues
4.8 TNUIFSL will empanel three to five Corporate Consultants from among individuals or
organisations who have the full range of expertise to address environmental and
social concems related to urban infrastructure projects. They will assist in developing,
appraising and monitoring E-1 and S-1 category projects. They will also addressother project specific environmental and social issues as and when necessary.
4.9 The Corporate Consultants for environmental and social issues will essentiallyprovide services to TNUIFSL as required, for the following
- Advising TNUIFSL on environmental and social issues- Environmental and social screening of projects wherever required by the
TN U IFSL
- Reviewing EAR, SAR and other documents submitted by borrowers for specific
environmental and social project components
- Monitoring and evaluating projects
4.10 The Corporate Consultant will also undertake the annual environmental and social
audit of all TNUIFSL financed projects. The Terms of Reference for corporate
consultants is fumished in Appendix-6.
Capacity Building
4.11 TNUIFSL envisages capacity building of its own personnel and its borrowers who
will include Urban Local Bodies. Statutory Boards, Public Undertakings and Potential
Private Operators in order to ensure that the ESR is effectively operationalised.
4.12 The TNUIFSL personnel have not been exposed to formal training in the
management of environmental and social issues. Thus the training programme for
various role players will include an orientation programme on the ESR, MunicipalFinance, Urban Planning, Project Management and Engineering and Public Health.
Course outline for various modules, the duration and the participation envisaged hasbeen illustrated in table 4.1.
4.13 The training programme is to be co-ordinated and anchored within a training
institution in Tamil Nadu (such as Tamil Nadu Institute of Urban Studies) and otherlocal and National Institutions and individuals experienced in various aspects of urbaninfrastructure projects, will be called upon through an open bid to develop and
conduct courses on various modules. These institutions could include Madras Schoolof Economics (MSE), Anna Institute of Management (AIM), Environmental TrainingInstitute of TNPCB, Anna University, Indian Institute of Technology (lIT) Madras,Madras Institue of Development Studies (MIDS), EXNORA, National Environmental
Engineering Research Institute (NEERI), National Institute of Urban Affairs (NIUI),Administrative Staff College of India (ASCI), National Institute of Public Finance and
Policy (NIPFP), Indian Institute of Public Administration (IIPA), DevelopmentAltematives (DA), and Indian Institute of Management (IIM).
4.14 Based on the experiences gained over the past 2 years, TNUIFSL will modify itstraining efforts and will make it more practical. The expanded training programme
will be supported through the institutional development component of TNUDP-II. Thegeneric training programme# is elaborated in Table 4.1
Table 4.1: Generic Training Programme (199-- 199-)#Module Course Outline Training Duration Participants
.1 _______.___.___._______. __._Type
1) TNUIFSL - TNUIFSL Concept Seminar 1 day a) Mayors/elected representativesConcept Main objectives, lending policies (2 sessions in 199- b) Heads of Statutory Boards, Public Undertakings
and procedures ) and potential private operators- Regulatory Requirements- ESR Concept and outline _ ___ _
2) ESR Profile - TNUIFSL Concept Workshop 1% day a) TNUIFSL Professionals- ESR Concept (5 sessions in 199- b) Municipal Commissioners- Regulatory Requirements ) (Approx. 25 MC/Session)- E&S Priority Issues c) Heads of Statutory Boards, Public Undertakinigs- Project Cycle of TNUIFSL and potential private operators- EAJSA Process Outline- Reports & Formats __
3) Municipal - Project Finance Workshop 1 1/2 day a) TNUIFSL Finance ProfessionalsFinance * Loan & grant components in P.l. (15 sessions b) 4 Finance personnels from each Corporation
- Municipal Finance in 199- - 9-) c) 3 Finance personnel from each Municipality- FOP Concept d) Finance personnel from Statutory Boards,- Project Preparation Criteria or Public Undertakings and potential private
packaging of M.l. projects operators4) Urban Planning & - Landuse Planning Workshop I day a) All TNUIFSL Professionals
Management - Urban Environmental Issues (20 sessions b) 6 Sr. Engineering personnel from eaci- Urban Poverty in 199- -9-) Corporation- Slum Upgradation c) 4 Sr. Engineering personnel from each
Municipalityd) Engineering personnel from Statutory Boards,
Public Undertakings and potential privateoperators
5) Project - Project Preparation Workshop 1 day a) All TNUIFSL ProfessionalsManagement - Project Implementation (20 sessions b) 6 Sr. Engineering personnel from each
- Project Monitoring in 199- -9-) Corporationc) 4 Sr. Engineering personnel from each
Municipalityd) Engineering personnel from Statutory Boar(ds,
Public Undertakings and potential private______________________ ______________________________________ ______________ __________________ o p e ra to rs
TNUIFSL -ESR/ Final DraftlJanuary'97 40 Development Atto"nativos
Module Course Outline Training Duration Participants.___________________ T ype ________________Type_ _
6) Engg. & Public (a) Water Supply Projects Workshop 5 days a) All TNUIFSL ProfessionalsHealth - Engg. design (20 sessions b) 6 Engineering/Public Health personnel from
- Environmental issues in 199- -9-) each Corporation- Design solutions c) 4 Engineering/ Public Health personrnel from
(b) Drainage each Municipality- Engg. design d) Engineering personnel from Statutory Boar(is,- Env. issues Public Undertakings and potential private- Design solutions operators
(c) Roads, Road Structures & StreetFurniture- Engg. design- Env. issues- Design solutions
(d) Solid Waste Management- Env. issues- Best practices and solutions
(e) Case Studies7) Social - R&R policies and procedures Workshop 2 days a) All TNUIFSL Professionals
Assessment * National & OD requirements (20 sessions b) 6 Engineering/Public Health personnel fromProcess - LAA process in 199- -9-) each Corporation
- Identification of PAPs c) 4 Engineering/ Public Health personnel flom
- Social Entitlement Frameworks each Municipality- Social Assessment d) Engineering personnel from Statutory Boards,- RAP Techniques Public Undertakings and potential private- Risk Assessment and Management operators
Skills
rNUIFSL -ESRIFinal Draft/January9 7 41 * Development Aftornaifvos
Appendix
I
Appendix-ILIST OF MUNICIPALITIES IN TAMIL NADU REGIONWISE AND DISTRICTWISESNO. NAME OF MULJNICIPALITIES GRADE
I Amlapur Sp] Grade
2 Alandur
3 Avadi Spi. Grade
4 Kancheepuram
5 Kathivakkam
6 Thiruvottivur
7 Chengalpattu I Grade
8 Pallavapuram
9 Tambaram
10 Modavaram Ir Grade
11 Tiruvallur
12 Maduranthagam III Grade
SOUTH ARCOT-VALLALAR DIST.
13 Cuddalore Spl.Grade
14 Chidambaram I Grade
15 Panruti
16 Nallipuram II Griade
17 Virudhachalam
VlLLUPURAM RAMASAMY-PADAYACBIIAR DIST.
18 Villupuram SpI Grade
19 Tinidivanam II Grade
VELLORE REGION ARCOT AMBEDKAR DIST.
20 Vellore Spl.Grade
21 Arakkonam
22 Gudivatham I Grade
23 Thirupattur
24 Ambur
25 Arcot I' Grade
26 Ranipettai
27 Vaniyarnbadi
28 Walajapattai m Grade
29 Thiruvannamnalai I Grade
30 Arani II Grade
31 Thiruvathipuran mI Grade
32 Vandavasi
SALEM REGION: SALEM DISTRICT:
33 Mattur SpIlGrade
34 Namakkal
35 Atur
36 Thiruchangode I Grade
37 Komarspalayam
38 Idapadi II Grade
39 Basipuram
DHARAMPURI DISTRICT
S.NO. NANIE OF MUNICIPALITIES lGRADE
40 Dharmapun I Grade
41 Krishnagiri H Grade
42 |Hosur
TIRUPUR REGION
43 Erode Spl.Grade
44 Dharapurun I Grade
45 Gobichettipalayarn
46 Sathivamangalam II Grade
47 Bhavanisagar
48 Bhavani m Grade
NILGIRIS DISTRICT
49 Udagamandalarn Spl .Grade
50 Coonoor I Grade
COIMBATORE DISTRICT
51 Pollachi
52 Tiruppur Spl .Grade
53 Udumalpet Spl.Grade
54 Mettupalayam I Grade
DINDIGUIL-ANNA DISTRICT
55 Dindigul Spl.Grade
56 Kodaikanal
57 Palani Spl.Grade
THANJAVUR REGION: THANJAVUJR DISTRICT
58 Kumbakonam Spl .Grade
59 Thanjavur
60 Pattukottai I Grade
NAGAPATTINAM - QUAID-E-MILLETH
61 Maviladuthurai Spl. Grade
62 Mannargudi
63 Nagapattinam I Grade
64 Tiruvarur
65 Sirkazhi 11 Grade
66 Koothapallur III Grade
67 Thiruthuval
PUDUKOTTAI DISTRICT
68 Pudukottai Spl.Grade
59 Aranthangi III Grade
KARURDHIEERAN OHINNAMALAI
70 Karur
71 Kulithalai
TRICHI PERUMBIDUGU MlTHURAIYAR
72 Manappari
PERAMBALUR TBRUVALLUVAR
73 Thuraiyur
MADURAI REGION: MADURAI DISTRICT
S.NO. I NANIE OF MUNICIPALITIES GRADE
74 Theni-AlhiNagaram I Grade
75 Bodinavakanur
76 Ohinnananur I Grade
77 Cumbum
78 Perivakulam
79 Thirumangalam
80 Melur m Grade
81 Usilampatti m Grade
PASUMPON THEVAR THIRUMAGANAR DISTRICT
82 Karaikudi Spl.Grade
83 Devakottai II Grade
84 Divaganga
KAMARAJAR DISTRICT
85 Rajapalavam Spl.Grade
86 Aruppukottai
87 Sivakasi I Grade
88 Srivilliputhur
89 Virudhunagar
90 Sattur II Grade
RAMANATHAPURAM DISTRICT
91 Ramanathapuram I Grade
92 Paramakudi II Grade
TIRUNELVELI KATTABOMMAN DISTRICT
93 Courtallarn I Grade
94 Kadayanallur
95 Sankarankoil II Grade
96 Tonkasi
97 Puliyangudi m Grade
98 Sengottah
CHDAMBARANAR DISTRICT
99 Tuticorin Spl.Grade
100 Kovilapatti I Grade
KANYAKUMARI DISTRICT
101 Nagarcoil Spl.Grade
102 Colachol
103 Kuzhithunai m Grade104 Padmanabhapuram
LOCATION OF MUNICIPALITIES(map showing municipality locations)
Appendix-3
74TH AMENDMENTINSERTION OF 243 W, 243 X, 243 Y & 243 ZD CONSTITUTION ARTICLES
243 W Subject to the provisions of this Constitution, the Legislature of State may, by law,endovv-
a) The Municipalities with such powers and authority as may be necessary to enable them tofunction as institutions of self-government and such law may contain provision for thedevolution of powers and responsibilities upon Municipalities, subject to such conditions asmay be specified therein, with respect to
i) preparation of plans for economic development and social justice;ii) performance of functions and implementation of schemes as may be entrusted to them
including those in relation to the matter listed in the Twelfth Schedule;
b) The Committees with such powers and authority as may be necessary to enable them tocarry out the responsibilities conferred upon them including those in relation to the matterslisted in the Twelfth Schedule.
'7WELFTH SCHEDULE"
1. Urban planning including town planning.2. Regulation of land-use and construction of buildings.3. Planning for economic and social development.4. Roads and bridges.5. Water supply for domestic, industrial and commercial purposes.6. Public health, sanitation conservancy and solid waste management.7. Fire services.8. Urban forestry, protection of the environment and promotion of ecological aspects.9. Safeguarding the interests of weaker sections of society, including the handicapped and
mentally retarded.10. Slum improvement and upgradation.11. Urban poverty alleviation.12. Provision of urban amenities and facilities such as parks, gardens, playgrounds.13. Promotion of cultural, educational and aesthetic aspects.14. Burials and burial grounds; cremations, cremation grounds and electric crematoriums.15. Cattle pounds; prevention of cruelty to animals.16. Vital statistics including registration of births and deaths.17. Public amenities including street lighting, parking lots, bus stops and public conveniences.18. Regulation of slaughter houses and tanneries."
243 X. The Legislature of a State may, by law-
a) Authorise a Municipality to levy, collect and appropriate such taxes, duties tolls and fees inaccordance with such procedure and subject to such limits;
b) Assign to a Municipality such taxes, duties, tolls and fees levied and collected by the StateGovemment for such purposes and subject to such conditions and limits;
c) Provide for making such grants-in-aid to the Municipalities from the Consolidated Fund of theState; and
d) Provide for constitution of such Funds for crediting all moneys received, respectively, by oron behalf of the Municipalities and also for the withdrawal of such moneys therefrom, as maybe specified in the law.
243 Y(1)The Finance Commission ccnstituted under Article 243-1 shall also review the financialposition of the Municipalities ano make recommendations to the Govemor as to-
a) The principles which should govem -
i) the distribution between the State and the Municipalities of the net proceeds of the taxes,duties, tolls and fees leviable by the State, which may be divided between them under thisPart and the allocation between the Municipalities at all levels of their respective shares ofsuch proceeds;
ii) the determination of the taxes, duties, tolls and fees which may be assigned to, orappropriated by, the Municipalities;
iii) the grants-in-aid to the Municipalities from the Consolidated Fund of the State;
b) The measures needed to improve the financial position of the Municipalities;
c) Any other matter referred to the Finance Commission by the Governor in the interests ofsound finance of the Municipalities.
(2) The Govemor shall cause every recommendation made by the Commission under this articletogether with an explanatory memorandum as to the action taken thereon to be laid beforethe Legislature of the State.
243 ZD (1)There shall be constituted in every State at the district level a District PlanningCommittee to consolidate the plans prepared by the Panchayats and the Municipalities inthe district and to prepare a draft development plan for the district as a whole.
(2) The Legislature of a State may, by law, make provision with respect to -
a) The composition of the District Planning Committees; .
b) The manner in which the seats in such Committees shall be filled:
Provided that not less than four-fifths of the total number of members of suchCommittee shall be elected by, and from amongst, the elected members of thePanchayat at the district level and of the Municipalities in the district in proportion tothe ratio between the population of the rural areas and of the urban areas in thedistrict;
c) The functions relating to district planning which may be assigned to such Committees;
d) The manner in which the Chairpersons of such Committees shall be chosen.
(3) Every District Planning Committee shall, in preparing the draft development plan, -
a) have regard to -
i) matters of common interest between the Panchayats and the Municipalities including spatialplanning, sharing of water and other physical and natural resources, the integrateddevelopment of infrastructure and environmental conservation;
ii) the extent and type of available resources whether financial or otherwise;
b) Consult such institutions and organisations as the Governor may, by order, specify.
(4) The Chairperson of every District Planning Committee shall forward the development plan, asrecommended by such Committee, to the Govemment of the State.
Appendix-4
SALIENT FEATURES OF THE MADRAS DISTRICT MUNICIPALITIES ACT, 1920
Part I - Preliminary
It deals with definitions and extents of jurisdiction which is to the whole of thePresidency of Madras, except the city of Madras.
Part II Establishment, Constitution and Governments of District Municipalities
Chapter II - Chapter V deal with Municipal Authorities and their incorporation,elections, qualifications of members powers in respect of property contracts.
Part IlIl - Taxation and Finance
Chapter VI deals with the levy of taxes such as property tax, profession tax,pilgrim tax.
Part IV - Public Health, Safety and Convenience
Chapter VIl - Chapter Xil deal with resting of public works and utilities withmunicipal authorities included are works, lighting, drainage, scavenging, streets,building regulations, wells, huts, nuisance, factories, burial provisions, diseasecontrol.
Part V - Subsidiary Legislation and Penalties
Chapter XIV - Chapter XV deals with the State Govemments rule making powerand publication of rules, bye - laws and regulations.
Part VI - Procedure and Miscellaneous
Chapter XVI deal with licenses and permissions, summoning powers, notices,appeals, powers of inspection, legal proceedings and ancillary provisions.
Schedules - deal with Taxation and finance rules, purposes for which premisesmay not be used, list of dangerous diseases, penalties
Appendix-5
SOCIAL IMPACT AND ENTITLEMENT FRAMEWORK FORWORLD BANK FINANCED PROJECTS
TNUIFSL will ensure that for all proiects financed by it, the due process and procedures laiddown by the Government of Tamil Nadu will be adopted. For projects accessing World Bankfunds, entitlements for each impact is described below:
1. Loss of Land:
This impact affects families' access to space for housing (homestead), agricultural land orland for commercial, industrial or institutional purposes.
a. Loss of land for homestead may impact owners with valid titles, or customary andusufruct rights. The beneficiary unit is the family, and the entitlement options offered toPAPs will include the provision of an equivalent area of land in an acceptable location orcash compensation at replacement value of lost property
In the case of squatters, the family will also be considered as a unit and they will beprovided a altemative site as per Government norms with cash compensation for the loststructure, or a basic dwelling unit as per Govemment norms
b. Loss of agricultural property is envisaged to impact persons with valid titles or customaryor usufruct rights. The beneficiary will be the titleholder who will be entitled to choosebetween an altemative land of equivalent productive potential or cash compensation atreplacement value
In the case of tenants, sharecroppers, leaseholders or encroachers the individual will bethe beneficiary. They will be entitled to choose between minimum economic landholdings based on local standards or a cash compensation for the minimum economiclandholding at its replacement value
c. Loss of commercial industrial or institutional land is envisaged to impact persons withvalid titles, customary or usufruct rights. The beneficiary will be the titleholder who willbe entitled to choose between equivalent land in an acceptable location or cashcompensation at replacement value
In the case of tenants and lease holders, the beneficiary will be the commercial,industrial or institutional unit. The beneficiary unit will be entitled to equivalent leasedland, reimbursement for unexpired lease and a transitional allowance equivalent to twoyear's income
In the case of squatters, the beneficiary will again be the commercial, industrial orinstitutional unit. The beneficiary will be entitled to equivalent leased land and atransitional allowance equivalent to two months' income
2. Loss of Structure
This category of impact includes families or units loosing their houses or other commercial,industrial or institutional structures
a. Loss of houses will impact families with valid title, customary or usufruct rights. Thebeneficiary unit is the family which will be entitled to choose between a structure ofequivalent standard in an acceptable location or cash compensation at replacementvalue
In the case of tenants and lease nolders the beneficiary unit will again be the family whowill be entitled to a transitional allowance equivalent to six months' rent to re-establishresidence.
In the case of squatters and pavement dwellers, the beneficiary will be the family. Theywill be entitied to choose between a basic dwelling unit as per Government norms orcash payment for a basic dwelling unit at replacement value
b. Loss of commercial, industrial or institutional structures will affect units with valid titles,customary or usufruct rights. The beneficiary will be the commercial, industrial orinstitutional unit. The beneficiary unit will be entitled to choose between a structure ofequivalent standard in an acceptable location or cash compensation at replacementvalue
In the case of tenants and leaseholders, the beneficiary will be again the commercial,industrial or institutional unit entitled to a reasonable transitional allowance equivalent toone year's income
In the case of squatters and pavement dwellers, the commercial, industrial or institutionalbeneficiary units will be entitled to choose between a basic unit as per Govemmentnorms or cash payment for the basic unit at replacement value
3. Loss of Livelihood/Trade/Occupation
This impact affects individuals access to wage employment
a. Loss of agricultural, commercial, industrial or institutional wage employment impactsspecific individuals. The beneficiary individuals will be entitled to employment in re-constructed enterprise or a package for re-employment or starting a business, and atransitional allowance equivalent to one year's wages
4. Loss of Access to Common Resources and Facilities
In this category of impacts, the beneficiaries are communities (in the case of rural projects)or households (in the case of urban projects), and the losses include loss of rural commonproperty resources or urban civic communities
a. In the case of rural common property resources, the beneficiary units will be thehouseholds or the community entitled to replacement of common propertyresources/amenities at minimum Government standards
b. In the case of urban civic amenities, the beneficiary units will be the households or thecommunity entitled to access to equivalent amenities or services
5. Loss of Standing Crops and Trees
This category of impacts includes standing crops or trees for those with valid titles, tenants orlessees and encroachers or squatters
In all cases, the family will be the entitlement beneficiary. In the case of valid title andtenants, the benef ciary family will be entitled to cash compensation equivalent to one year'sincome for crops and cash compensation equivalent to one year for trees. In case ofencroachers/squatters cash compensation will be paid.
6. Losses during transition of displaced persons/establishments
Losses in this category include those during shifting!transport, maintenance, andconstruction. In all categories, the family or respective commercial, industriai or institutionalunit will be the beneficiary
a. For shifting and transport, the beneficiary family or the unit will be entitled to provision oftransport or cash equivalent for the transportation arrangement
b. In the case of maintenance, the beneficiary family or the unit will be entitled to cashpayment for three months
c. In the case of construction, the beneficiary family or unit will be entitled to a lumpsumcash payment for materials and labour or provision of materials for construction ofstructures
7. Losses to Host Communities
In this category of impact, the host community, particularly in the resettled area, its access to
amenities and services has reduced. The beneficiary host community will be entitled to
restoration of losses as a result of resettlement or amenities/services equivalent to those
provided to the project affected persons.
Appendix-6
TERMS OF REFERENCEFOR CORPORATE ENVIRONMENTAL AND SOCIAL CONSULTANTS
Background
The Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL) has beenset up to finance various urban infrastructure projects including water supply, roads,bridges, street lights, solid waste plants, storm water drains, bus stations, andmarkets in the municipalities of Tamil Nadu. The scope of operations for TNUIFSLincludes urban infrastructure projects sponsored by Urban Local Bodies (ULBs),Statutory Boards and Potential Private Inventors.
TNUIFSL believes that each of its projects will improve living standards and theenvironment of urban populations in and around it project locations. TNUIFSL willpromote environmentally sound, socially acceptable and commercially viable urbaninfrastructure projects. TNUIFSL has reflected its environmental and socialcommitments through detailed operational procedures detailed in its Environmentaland Social Report (ESR). All projects financed by TNUIFSL should be in consonancewith its ESR.
To facilitate the process laid down within its ESR, TNUIFSL intends to empanelcorporate consultants to assist in developing, appraising and monitoringenvironmentally and socially sensitive projects.
II. Role of Corporate Environmental and Social Consultants
The empanelled Corporate Consultant will essentially provide services to TNUIFSLas required, for the following tasks.
i. Advising TNUIFSL on project speciric environmental and social screening
The corporate consultants will be required to advise TNUIFSL while screeningprojects for the environmental and social components.
iL. Appraising Environmental Assessment Reports (EAR), Social AssessmentReports (SAR) and other documents submitted by Borrowers
The corporate consultants will appraise the EAR and SAR of environmentally andsocially sensitive projects. They will review the identified environmental issuesand assess the management measures and assess compliance of the measuressuggested with ESR.
iii. Monitoring and evaluating projects
The corporate consultants will assist in monitoring the progress of environmental
and social aspects during construction, operation and maintenance of projects
specified by TNUIFSL. They will evaluate Quarterly Progress Reports submitted
by borrowers and will audit projects specified by TNUIFSL.
III. Eligibility for Empaneliment as Corporate Consultants
Empanelled Corporate Consultants can be either individuals or organisations. The
consultants should have the experience and expertise to address environmental and
social concems related to urban infrastructure projects.
IV. Details of Empanellment
Corporate Consultants will be empanelled for a period of one year, of during they can
be called upon to take up specific assignments.
V. Expression of Interest
The interested individual consultants / organisations should submit an application
stating their interest to be empanelled. Each application (in English) should include
the following information:
i. Name, address and facsimile number of the organisation;
ii. Names and short Curriculum Vitae of the principal officials to be deputed;
iii. Ownership and organisation sfructure of the firm;
iv. Financial statements for the previous three years; and
v. List of major assignments undertaken during the previous five years with special
emphasis on the assignment being sought now
The last date for receipt of applications for expression of interest is one month from
the date of publication. Please note this is not a request for consultancy proposals
but for empanellment. After a review of the applications of expression of interest,
shortlist for empanelling consultants will be prepared based on:
i. the firm's general experience in the field of the assignment; and
ii. qualifications and competence of the personnel proposed for the assignment
Upto five consultants will be empanelled and invited to submit proposals for specific
assignments as and when necessary.
- Amendments made in the final report as suggested by the World Bank Mission (Oct. 4 -23, 1998.)