Report and Recommendation of the President to the Board of Directors

Project Number: 51337-001 March 2021

Proposed Loan India: Tamil Nadu Industrial Connectivity Project Distribution of this document is restricted until it has been approved by the Board of Directors. Following such approval, ADB will disclose the document to the public in accordance with ADB's Access to Information Policy.

CURRENCY EQUIVALENTS

(as of 11 February 2021)

Currency unit – Indian rupee/s (₹) ₹1.00 = $0.01372 $1.00 = ₹72.8800

ABBREVIATIONS

ADB – Asian Development Bank CDP – comprehensive development plan CKIC – Chennai–Kanyakumari Industrial Corridor COVID-19 – coronavirus disease ECEC – East Coast Economic Corridor EPC – engineering, procurement, and construction FIU – field implementation unit GESI – gender equality and social inclusion HRS – Highway Research Station IEE – initial environmental examination IPP – indigenous peoples plan km – kilometer LARR – land acquisition, resettlement, and rehabilitation PAM – project administration manual PBM – performance-based maintenance PIU – project implementation unit PPP – public–private partnership TNHD – Tamil Nadu Highways and Minor Ports Department

NOTES

(i) The fiscal year (FY) of the Government of India and its agencies ends on 31 March. “FY” before a calendar year denotes the year in which the fiscal year ends, e.g., FY2021 ends on 31 March 2021.

(ii) In this report, “$” refers to United States dollars.

Vice-President Shixin Chen, Operations 1 Director General Kenichi Yokoyama, South Asia Department (SARD) Director Ravi Peri, Transport and Communications Division (SATC), SARD Team leader Kanzo Nakai, Principal Transport Specialist, SATC, SARD Team members

Arlene Ayson, Senior Operations Assistant, SATC, SARD Sheila Anne David-Castro, Associate Project Analyst, SATC, SARD Sajid Khan, Financial Management Specialist, Portfolio, Results and

Quality Control Unit, SARD Wilson Leung, Project Specialist, SATC, SARD Vergel Medina, Senior Social Development Specialist, SATC, SARD Maria Iris Millendez-Bombay, Safeguards Officer (Environment),

SATC, SARD Vankina Sri Rekha, Principal Counsel, Office of the General Counsela Dinesh Shiwakoti, Senior Procurement Specialist, Procurement

Division 1, Procurement, Portfolio and Financial Management Department

Mihir Sorti, Senior Project Officer (Transport), India Resident Mission, SARD

Nanyan Zhou, Transport Specialist, SATC, SARD Peer reviewers Oyunchimeg Erdene, Principal Transport Specialist, Transport and

Communications Division, Central and West Asia Department (CWRD)

Narendra Singru, Country Director, Afghanistan Resident Mission, CWRD

a Outposted to the India Resident Mission.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page

PROJECT AT A GLANCE

MAP

I. THE PROPOSAL 1

II. THE PROJECT 1

A. Rationale 1 B. Project Description 4 C. Value Added by ADB 5 D. Summary Cost Estimates and Financing Plan 6 E. Implementation Arrangements 8

III. DUE DILIGENCE 9

A. Technical 9 B. Economic and Financial Viability 9 C. Sustainability 9 D. Governance 10 E. Poverty, Social, and Gender 10 F. Safeguards 11 G. Summary of Risk Assessment and Risk Management Plan 13

IV. ASSURANCES 13

V. RECOMMENDATION 13

APPENDIXES

1. Design and Monitoring Framework 14

2. List of Linked Documents 17

Project Classification Information Status: Complete

PROJECT AT A GLANCE

Source: Asian Development BankThis document must only be generated in eOps. 07122020103106682753 Generated Date: 03-Mar-2021 15:29:20 PM

1. Basic Data Project Number: 51337-001Project Name Tamil Nadu Industrial Connectivity Project Department/Division SARD/SATCCountry India Executing Agency Highways

Department-Tamil NaduBorrower Government of India

Country Economic Indicators

https://www.adb.org/Documents/LinkedDocs/?id=51337-001-CEI

Portfolio at a Glance https://www.adb.org/Documents/LinkedDocs/?id=51337-001-PortAtaGlance

2. Sector Subsector(s) ADB Financing ($ million)Transport Road transport (non-urban) 484.00

Total 484.00

3. Operational Priorities Climate Change InformationAddressing remaining poverty and reducing inequalities

Accelerating progress in gender equality

Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainabilityPromoting rural development and food security

Strengthening governance and institutional capacity

Fostering regional cooperation and integration

GHG reductions (tons per annum) 0.000Climate Change impact on the Project

High

ADB Financing

Adaptation ($ million) 42.50

Mitigation ($ million) 0.00

Cofinancing

Adaptation ($ million) 0.00

Mitigation ($ million) 0.00

Sustainable Development Goals Gender Equity and MainstreamingSDG 9.4SDG 13.a

Effective gender mainstreaming (EGM)

Poverty TargetingGeneral Intervention on Poverty

4. Risk Categorization: Complex.

5. Safeguard Categorization Environment: B Involuntary Resettlement: A Indigenous Peoples: B

.

6. Financing

Modality and Sources Amount ($ million)

ADB 484.00

Sovereign Project (Regular Loan): Ordinary capital resources 484.00

Cofinancing 0.00

None 0.00

Counterpart 420.60

Government 420.60

Total 904.60

Currency of ADB Financing: US Dollar

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TR

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TR �

TR �

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Nagappattinam

Tiruvannamalai

Kanchipuram

Nagercoil

Tiruchirappalli

Thoothukudi

Virudhunagar

Pudukkottai

Coimbatore

Dharmapuri

Viluppuram

Udagamandalam

Perambalur

Thiruvallur

Krishnagiri

Tirunelveli

Thiruvarur

Cuddalore

Thanjavur

Namakkal

Sivaganga

Tiruppur

Dindigul

Madurai

Ariyalur

Vellore

Salem

Erode

Theni

Karur

Kanyakumari

Chennai

A N D H R AP R A D E S H

KARNATAKA

KERALA

Puducherry

Karaikkal(Puducherry)

TAMIL NADU

Project Road

Trunk Road

Main Road

Port

State Capital

District Headquarter

City/Town

District Boundary

State or Union Territory Boundary

East Coast Road

Kilometer

State Highway

Trunk Road

Boundaries are not necessarily authoritative.

ECR

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INDIA

TAMIL NADU INDUSTRIAL CONNECTIVITY PROJECT

201027 ABV

This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information.

0 25 50 75 100

Kilometers

N

I. THE PROPOSAL 1. I submit for your approval the following report and recommendation on a proposed loan to India for the Tamil Nadu Industrial Connectivity Project. 2. The project will upgrade and maintain about 590 kilometers (km) of 16 state highways to (i) enhance transport connectivity and facilitate industrial development in line with the regional economic corridor development plan for the Chennai–Kanyakumari Industrial Corridor (CKIC), and (ii) improve the road network's sustainability through performance-based maintenance (PBM).1 The project will also include initiatives to build institutional capacity in the Tamil Nadu Highways and Minor Ports Department (TNHD), focusing on its knowledge and research function, road safety improvement, and sector planning capacity.

II. THE PROJECT A. Rationale 3. State context. Tamil Nadu is the southernmost state of India, stretched along the Bay of Bengal, and borders the states of, Andhra Pradesh, Karnataka, and Kerala. With an area of 130,000 square km, it is India’s 10th largest state. The western and northwestern parts of Tamil Nadu are hilly, featuring the Western and Eastern Ghats, and are rich in vegetation. The central and eastern parts are generally fertile plains, but arid in some central and southern districts. The total population in 2016 was estimated at about 78 million.2 Major cities such as Chennai, Coimbatore, Erode, Madurai, Salem, Tiruchirappalli, Tirunelveli, and Tiruppur are in the center of the plains or near the Eastern Ghats in the northwest. 4. Tamil Nadu has the second-largest state economy in India after Maharashtra.3 With robust economic growth averaging about 8.5% since fiscal year (FY) 2006, it recorded a steady decline in poverty from 28.9% in 2004–2005 to 11.2% in 2011–2012, translating into an average annual poverty reduction rate of 12.7%, well above the national average of 7.3% for the same period. Its poverty levels are lower than those of most other states in India. 4 While Tamil Nadu has traditionally been agrarian, agriculture now contributes less than 10% of the gross state domestic product. Instead, manufacturing and some service industries such as finance and real estate are major drivers of growth. Tamil Nadu ranks first among Indian states in the number of factories and industrial workers, and has one of India’s most diversified and modern industrial bases, supplemented by strong foreign direct investment. It leads in several manufacturing industries, including automobiles, engineering, pharmaceuticals, garments, textile products, and aerospace. 5. Despite the growth and progress in poverty reduction, Tamil Nadu faces several economic and social challenges. From FY2013 to FY2020, its economy posted average annual growth of 7.0%, markedly lower than the 10.3% average of the preceding 6 years. Tamil Nadu’s per capita net domestic product was the third highest among the major Indian states in FY2012, after Maharashtra and Haryana, but plunged to sixth place in FY2019, overtaken by Gujarat,

1 Details of the upgrades are in para. 27 and Technical Features of the Proposed Project (accessible from the list of

linked documents in Appendix 2). 2 Government of Tamil Nadu, Department of Economics and Statistics. 2018. Statistical Handbook 2018. Chennai. 3 Government of India, Ministry of Statistics and Programme Implementation. 2020. Gross State Domestic Product.

New Delhi. 4 Tamil Nadu has one of the highest numbers of cases of coronavirus disease (COVID-19) in India, which could have

a substantial negative impact on the state economy in FY2021.

2

Karnataka, and Kerala.5 Both the poverty ratio and human development index vary among districts; rural areas, away from industrial hubs such as Chennai and Coimbatore, are still experiencing low incomes, and their poverty levels remain high, exceeding 30% of the population in some districts.6 Consumption inequality in the state is higher than the national average. Tamil Nadu needs to transform its economy to become more value-added, further develop its industrial bases with efficient value chains, and expand these economic activities throughout the state for inclusive growth. 6. Strategic plan for the state's development. In 2012, the Government of Tamil Nadu unveiled Vision Tamil Nadu 2023, a strategic plan for infrastructure development synchronized with economic transformation.7 To achieve upper middle-income per capita status for the state, Vision Tamil Nadu 2023 identifies the key areas for economic acceleration, such as increasing the share of manufacturing, energizing small and medium-sized enterprises, focusing on skills development, and providing the best infrastructure services, including the development of industrial corridors. 7. East Coast Economic Corridor. The Government of India has initiated an “industrial corridor approach” to stimulate manufacturing and an “Act East” policy to integrate the Indian economy with Asia’s dynamic global production networks. The industrial corridor approach involves the creation of an efficient multimodal transport network supported by quality infrastructure and logistics within a defined geography, and a policy framework that facilitates business operations for integration with global production networks. Industrial corridors are also central to India’s “Make in India” initiative, which encourages investments in manufacturing to stimulate growth and create high-quality jobs. In line with these policies, the government and the Asian Development Bank (ADB) identified the East Coast Economic Corridor (ECEC)—India’s first coastal corridor—stretching more than 2,500 km from West Bengal to Tamil Nadu. The ECEC aims to stimulate growth through network externalities, links with urban and industrial clusters, and integration in regional value chains in Southeast and East Asia through the ports along the coastline, including Chennai and Thoothukudi in Tamil Nadu serving as major ports. 8. The CKIC (para. 2) is proposed as the second phase of the ECEC, covering 23 of the 32 districts between Chennai and Kanyakumari in Tamil Nadu as its influence areas. 8 The objectives of the CKIC are to promote manufacturing competitiveness and job creation in the corridor, increase the manufacturing industry’s participation in global value chains and production networks, and serve as a key driver to achieving Vision Tamil Nadu 2023. The ADB-supported comprehensive development plan (CDP) for the CKIC9 established a strategy for the industrial transformation by introducing industrial nodes to promote manufacturing bases with comparative advantages.10 The CDP also identified nearly 200 projects in the transport, energy, and urban sectors to underpin the industrial growth strategy. ADB’s overarching approach for the CKIC has

5 Tamil Nadu’s per capita net domestic product in FY2019 was about $2,600. 6 Government of Tamil Nadu. 2017. Tamil Nadu Human Development Report 2017. Chennai. 7 Government of Tamil Nadu. 2012. Vision Tamil Nadu 2023: Strategic Plan for Infrastructure Development in Tamil

Nadu. Chennai. In the road subsector of the strategic plan, the following investment requirements were identified to support the strategy: (i) enhancement of 2,000 km of trunk roads between Chennai and major towns into 6- or 8-lane corridors; (ii) modernization of state highways covering 5,000 km of four-lane highways; (iii) improvements of other state highways and major roads for a total length of 2,700 km, including improvements to pavements, cross-sections such as paved shoulders, and bypasses; and (iv) an upgrade of 8,080 km of major district roads.

8 The Visakhapatnam–Chennai Industrial Corridor, also supported by ADB, represents the first phase of the ECEC. 9 ADB. 2017. Chennai–Kanyakumari Industrial Corridor: Comprehensive Development Plan. Manila. 10 Six industrial nodes were identified: (i) Cuddalore and Nagapattinam, (ii) Ariyalur and Perambalur, (iii) Tiruchirappalli–

Pudukottai–Sivaganga, (iv) Madurai–Dindigul–Virudhunagar–Theni, (v) Ramanathapuram, and (vi) Thoothukudi and Tirunelveli.

3

played a significant role in guiding priority infrastructure for economic corridor development, and also served as a catalyst for attracting targeted investments by the private sector. Responding to the identified development needs, ADB supported the government’s effort to create a physical and institutional enabling environment for economic transformation through investment loans in energy and urban infrastructure and through technical assistance projects (para. 18). 9. Road transport for industrial development. Tamil Nadu’s road network is dense and well laid out, providing basic access to the state’s population and economic activity centers.11 However, many state highways still need to be improved for smoother transport.12 The CDP projected that nearly 90% of major roads would not fully provide stable traffic flow services in 2025 because of increasing traffic demand in the area. Since the logistics costs of the CKIC’s targeted industries are estimated at 3%–10% of the total production costs, seamless road connectivity between industrial clusters, transport gateways, and consumption centers would be critical for greater competitiveness. The CDP’s road capacity and service level assessments identified a priority road network of 7,653 km, including four trunk routes and 76 lateral grid connections, to be upgraded for well-connected regional transport networks that will link the potential industrial growth centers and the rural hinterland with the trunk routes, international ports, and high-density urban areas.13 The transport sector, aligned with the industrial development strategy, will promote connectivity to global value chains and markets, including in Asian countries, and cater to the value-adding manufacturing industry. 10. The project is part of the identified priority road network and selected for ADB financing in the CDP to improve lateral road connectivity for industrial development, as conceptualized under the CKIC.14 It also aligns with Vision Tamil Nadu 2023 and the basic policies for Tamil Nadu’s road transport development.15 11. Emerging challenges in road sector. In addition to the road transport needs, the road authorities must meet several other challenges. Road safety, in particular, is a growing concern in Tamil Nadu. In 2018, the total number of road crashes in India was reported at 467,044, causing injuries to 469,418 individuals and claiming 151,417 lives. Tamil Nadu topped the number of road crashes nationwide with a share of 13.7%, followed by Madhya Pradesh with 11.0%.16 It is imperative to involve all stakeholders in road safety improvements, and any such measures must be implemented on a pilot basis and then standardized as good practice. Also, road authorities need to strengthen their institutional capacity to apply newly developed material, equipment, and construction and maintenance methods to road projects and thus obtain better value for money, including greater road safety, climate change resilience, and private sector involvement.

11 Tamil Nadu has 66,039 km of major roads, of which national highways account for 10%, state highways for 17%,

and major district roads for 18%. 12 While 47% of the national highways are multi-lane (four lanes or more), nearly 80% of state highways still have only

two lanes or even just one. 13 The four trunk routes are: (i) East Coast Road; (ii) NH32, NH 132, SH 83, NH 38; (iii) NH 44 NS; and (iv) NH36 and

SH42. All except the northern part of NH44 NS fall into the CKIC influence areas. East Coast Road and NH32, 132, 83, 38/southern part of NH44 NS are considered spines of the CKIC. NH36 and SH42 are running between the spines in parallel.

14 Two project roads (SH79 and SH86) are not part of the priority road network defined in the CDP but are included in the scope of the project. They are considered extensions of the priority road network to link a trunk road and core cities in the neighboring districts of CKIC influence areas. The two roads are still part of the core road network of Tamil Nadu and included in the improvement of state highways under Vision Tamil Nadu 2023.

15 Government of Tamil Nadu, Highways Department. 2019. Citizen’s Charter 2019. Chennai; and Government of Tamil Nadu. 2020. Policy Note 2020–2021 of Highways and Minor Ports Department. Chennai.

16 As for road crash deaths, Uttar Pradesh topped the list with 14.0%, followed by Maharashtra at 8.8% and Tamil Nadu at 8.3%.

4

12. Alignment with strategic objectives. The project aligns with ADB’s country partnership strategy, 2018–2022 for India, which emphasizes boosting economic competitiveness to create more and better jobs by expanding the infrastructure network for transport and energy along economic corridors, including the ECEC; and addressing climate change and increasing climate resilience.17 The project is listed in ADB’s country operations business plan, 2021–2023 for India.18 It contributes to the operational priorities of ADB’s Strategy 2030 through (i) reducing remaining poverty and inequalities and (ii) promoting rural development and food security by cascading economic and social benefits from growth centers to nearby areas; (iii) accelerating progress in gender equality in employment opportunities, capacity strengthening and safety concerns; (iv) tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability of roads; (v) strengthening governance and institutional capacity in road safety, research, and planning; and (vi) fostering regional cooperation and integration by improving the lateral connectivity to major ports for global production networks.19 13. Lessons from previous assistance by ADB and other development partners. Previous road transport projects—e.g., Uttarakhand State-Road Investment Program, Madhya Pradesh State Roads Project III, and National Highway Sector II Project—have shown the need for (i) stronger post-construction maintenance, including contractual arrangements; (ii) measures to improve contractors’ performance; and (iii) greater focus on the selection of qualified contractors in multiple contract procurement.20 The TNHD implemented two similar state highway projects funded by the World Bank. A review of the first project stressed the need to pay adequate attention to the empowerment of dedicated implementation units, and also highlighted the merits of successful land acquisition through private negotiations.21 An implementation report on the second project rated the overall implementation progress satisfactory.22 Although the public–private partnership (PPP) modality caused substantial delays, 9 out of 10 engineering, procurement, and construction (EPC) contracts were completed. 23 These lessons and experiences were fed into the design of the proposed project and its implementation arrangements, resulting in longer PBM contracts, incentives for early completion, a strengthened project implementation unit (PIU), the introduction of multiple contract award criteria in the bid documents, and land acquisition through the approved private negotiation procedures. B. Project Description 14. The project is aligned with the following impact: economic prosperity and employment generation with inclusive growth achieved (footnote 7). It will have the following outcome: capacity, connectivity, efficiency, and safety of the highway system increased (footnote 15).24

17 ADB. 2017. Country Partnership Strategy: India, 2018–2022—Accelerating Inclusive Economic Transformation.

Manila. 18 ADB. 2020. Country Operations Business Plan: India, 2021–2023. Manila. 19 ADB. 2018. Strategy 2030: Achieving a Prosperous, Inclusive, Resilient, and Sustainable Asia and the Pacific.

Manila. 20 ADB. 2020. Completion Report: Uttarakhand State-Road Investment Program (Tranche 3 and Multitranche Financing

Facility). Manila; ADB. 2019. Validation Report: Madhya Pradesh State Roads Project III. Manila; and ADB. 2017. Validation Report: National Highway Sector II Project. Manila.

21 World Bank. 2013. Implementation Completion Report Review: India–Tamil Nadu Road Sector Project. Washington, DC.

22 World Bank. 2020. Implementation Status and Results Report: Second Tamil Nadu Road Sector Project – P143751 – Sequence No:11 (English). Washington, DC.

23 The two options for PPPs are the annuity and the toll-charging models. 24 The design and monitoring framework is in Appendix 1.

5

15. Output 1: State highways upgraded and maintained. The project will upgrade about 590 km of 16 state highways in the CKIC influence and its neighboring areas with (i) engineering design features of climate change adaptation and road safety, and (ii) 7-year PBM.25 16. Output 2: Capacity in road safety, sector planning, and research enhanced. The loan will support (i) strengthening of the knowledge and research function of the Highway Research Station (HRS) by developing its institutional strategy and by modernizing its organization, business process, facilities, and equipment to pursue better value for money in the sector; (ii) development and piloting of road safety improvement program in accident-increasing urbanizing areas by introducing (a) standard operating procedures among stakeholders; and (b) advanced technologies for material, road facilities, monitoring methods, reporting system, and enforcement; and (iii) enhancement of sector planning capacity, including (a) examination of innovative contract modalities involving more private sector participation in road service provision, (b) development of sector strategic direction to address evolving technology, and (c) preparation for implementation plan to eliminate traffic bottlenecks such as railway level crossings.26 17. Contract modality. The Government of Tamil Nadu has introduced several innovative contract modalities to better involve the private sector in the development of major state roads. These include EPC, PPP (annuity), PBM, design–build–operate and transfer, and output- and performance-based contracts. The EPC modality with 7-year PBM was selected because of the (i) non-revenue-generating project features, (ii) lack of interest by market forces in PPP contracts, and (iii) financial difficulties in the private sector caused by the coronavirus disease (COVID-19) pandemic. The EPC–PBM modality will ensure the maximum use of private players' engineering, construction, and maintenance capacity, and achieve efficiency and quality gains by combining the three phases of design, construction, and maintenance into one contract. This will also improve asset quality and service levels. C. Value Added by ADB 18. With strategic planning support from ADB, the CDP for the CKIC was prepared, which includes an infrastructure strategy to drive economic growth, high-potential industrial sectors, and a set of priority projects. The CKIC, with its long coastline and strategically located ports, provides multiple international gateways to connect India with vibrant global production networks and to facilitate regional integration. The CDP identifies the CKIC’s high potential for generating additional employment and industrial output. ADB’s strong ties with the implementing agencies for urban, energy, transport, and regional cooperation enable an integrated, multidisciplinary, and cross-sector approach to developing the infrastructure required for an economic corridor.27 The infrastructure investments are further complemented by ADB’s support for soft components, such as a detailed master plan study of industrial nodes, greater ease of doing business, single-window platform for investment facilitation, and stronger dialogue with investors.28 This road project is the

25 The PBM includes overlay works in the sixth year of the maintenance period. 26 Highway Research Station is an institution in the TNHD established in 1954 to provide technical guidance on road

construction and maintenance, including road safety. 27 ADB. 2018. Report and Recommendation of the President to the Board of Directors: Proposed Multitranche

Financing Facility, Technical Assistance Grant, and Administration of Grant to India for the Tamil Nadu Urban Flagship Investment Program. Manila; and ADB. 2019. Report and Recommendation of the President to the Board of Directors: Proposed Loan and Technical Assistance Grant to India for the Chennai–Kanyakumari Industrial Corridor: Power Sector Investment Project. Manila. The Inclusive, Resilient, and Sustainable Housing for Urban Poor (Sector) Project in Tamil Nadu is also being prepared.

28 ADB. 2017. Technical Assistance to India for Supporting the Preparation of a Comprehensive Master Plan for the Chennai–Kanyakumari Industrial Corridor. Manila; and ADB. 2015. Technical Assistance to India for Supporting the

6

first proposed ADB financing for the development of state highways in Tamil Nadu and also complements ADB’s support for turning the CKIC into an economic corridor. 19. Replication strategy. ADB’s value addition is also to facilitate the government in creating positive external effects that can spill over to or be replicated in other states or projects. To achieve this, project activities were chosen based on their potential for wider replication, level of maturity, and the participating agencies’ capacity. The road safety improvement program, targeted at urbanizing areas with a rapidly changing safety environment, will be prepared as a comprehensive road safety approach that (i) involves roadside residents, including women, as well as all government agencies concerned; and (ii) introduces advanced safety technologies.29 The government agencies may later refine and use these approaches for further replication in other states or projects. The strengthening of the HRS as a knowledge and research hub will underpin the effective application of newly developed road safety technologies and help the government improve the performance of the whole road sector. From a road management perspective, the introduction of several innovative contract modalities that involve private players in road service provision (para.17) yielded varying implementation results, so the project will support the TNHD’s effort to review and refine the modalities for possible replication. These capacity development components will add value to the project by creating spillover impacts beyond the project scope, and can be used by the government as a tool for replication initiatives.30 The economic corridor strategic planning is another key initiative in the project for effective regional development. ADB is assisting in adopting the similar strategic approach in other states of India to promote investments in critical infrastructure and reforms to attract private investments. Good practices and models obtained from the project and the strategic planning approach will be further channeled and disseminated through the Capacity Development Resource Center in ADB’s India Resident Mission to facilitate the government in replicating these good practices and learnings in other states. D. Summary Cost Estimates and Financing Plan 20. The project is estimated to cost $904.60 million (Table 1). 21. Detailed cost estimates by expenditure category and by financier are included in the project administration manual (PAM). 31 Civil works and consulting services are the major expenditure items under the project.

Table 1: Summary Cost Estimates ($ million)

Item Amounta A. Base Costb 1. State highways upgraded and maintained 774.80

2. Capacity in road safety, sector planning, and research enhanced 27.10

3. Project management 15.90

Preparation and Implementation of the Comprehensive Integrated Master Plan for the Vizag–Chennai Industrial Corridor. Manila.

29 The technologies would include real-time information provision, drainable and high-friction pavements, new material and equipment for delineation, a vehicle identification system for enforcement, a traffic management system, and warning and reporting system through mobile devices.

30 A recent ADB survey in 2021 on the replication strategy for India road sector shows that contract modalities and road safety measures can be replicated in other projects even in other states. The survey also examined the key factors in developing a replication strategy, such as road network planning; contract modalities; research and development; and road safety.

31 Project Administration Manual (accessible from the list of linked documents in Appendix 2).

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Item Amounta Subtotal (A) 817.70 B. Contingenciesc 72.60 C. Financial Charges During Implementationd 14.30 Total (A+B+C) 904.60 a Includes taxes and duties of $88.40 million financed by the government through cash contribution and the Asian

Development Bank. Such amount does not represent an excessive share of the project cost. Numbers may not sum precisely because of rounding.

b In mid-2020 prices as of September. c Physical contingencies computed at 5.0% for civil works, equipment, and consulting services. Price contingencies

computed at an average of 1.4% on foreign exchange costs and 3.8% on local currency costs (adjusted for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate).

d Includes interest and commitment charges. Interest during construction for the ordinary capital resources loan was computed at the 5-year United States dollar fixed swap rate plus an effective contractual spread of 0.50%. Commitment charges for the ordinary capital resources loan are 0.15% per year to be charged on the undisbursed loan amount.

Source: Asian Development Bank estimates.

22. The government has requested a regular loan of $484,000,000 from ADB’s ordinary capital resources to help finance the project. The loan will have a 20-year term, including a grace period of 5 years; an annual interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility; a commitment charge of 0.15% per year (the interest and other charges during construction to be capitalized in the loan); and such other terms and conditions set forth in the draft loan and project agreements. Based on the customized amortization schedule of semiannual repayment, the average maturity is 13 years, and there is no maturity premium payable to ADB. 23. The summary financing plan is in Table 2. ADB will finance the expenditures in relation to parts of the civil works, equipment, and consulting services. The government has agreed to make counterpart funds available to meet the balance and additional costs arising from unforeseen circumstances, such as price escalation or design changes.

Table 2: Summary Financing Plan

Source Amount ($ million)

Share of Total (%)

Asian Development Bank Ordinary capital resources (regular loan) 484.00 53.5

Government 420.60 46.5 Total 904.60 100.0

Source: Asian Development Bank estimates.

24. The climate change impact on the project is rated high. A climate change assessment indicated high risk of flooding caused by increased rainfall because of climate change.32 The frequency of extreme rainfall events is projected to increase, particularly in western hilly and eastern coastal areas. Drainage will be improved to cope with higher flooding frequency and to provide higher discharge capacities. Bridges and culverts will be resized and redesigned to secure smoother water flow. Road embankments will be raised in critical sections to prevent water stagnation and flooding impacts, and slopes will be protected through bioengineering and structural measures. Climate adaptation is estimated to cost $53.13 million. ADB will finance 80% of the adaptation costs.

32 Climate Change Assessment (accessible from the list of linked documents in Appendix 2).

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E. Implementation Arrangements 25. The implementation arrangements are summarized in Table 3 and described in detail in the PAM (footnote 31). Procurement will follow the ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time).

Table 3: Implementation Arrangements Aspects Arrangements Implementation period April 2021–December 2026 Estimated completion date

31 December 2026

Estimated loan closing date

30 June 2027

Management (i) Executing agency State of Tamil Nadu acting through its Highways and Minor Ports

Department (PIU, Chennai–Kanyakumari Industrial Corridor Project) (ii) Implementation

unit One PIU and six field implementation units with one project director, 74 engineers, 224 supporting staff, environmental wing, and institutional capacity enhancement and road safety cell. PIU and field implementation units supported by land acquisition, resettlement, and rehabilitation units—one unit at the PIU and four units in the field with 341 staff in total.

Procurement Open competitive bidding (international)

16 contracts $521.4 million

Open competitive bidding (national)

3 contracts $22.0 million

Consulting services Construction supervision consultants (FTP, 70:30 QCBS)

5,967 person-months $12.0 million

Land acquisition and resettlement rehabilitation monitoring (FTP, 70:30 QCBS)

396 person-months $0.5 million

External monitoring for environment (individual)

16 person-months $0.1 million

Capacity development (FTP, 80:20 QCBS)

159 person-months $1.9 million

Individual consultants for capacity development

18 person-months $0.2 million

Retroactive financing and/or advance contracting

Retroactive financing of eligible works and consulting services expenditures, incurred before loan effectiveness but within 12 months prior to loan signing, up to 20% of the loan amount; advance contracting for recruitment of consultants and procurement of civil works.

Disbursement The loan proceeds will be disbursed following ADB's Loan Disbursement Handbook (2017, as amended from time to time) and detailed arrangements agreed between the government and ADB.

ADB = Asian Development Bank, FTP = full technical proposal, PIU = project implementation unit, QCBS = quality- and cost-based selection. Note: The performance-based maintenance contracts will start once construction is completed and extend beyond the estimated loan closing date. The Government of Tamil Nadu will fund the maintenance and supervision activities. Source: Asian Development Bank.

26. COVID-19’s impact on the implementation. The impact of the COVID-19 pandemic on the project has been reviewed by ADB and the TNHD. Because most materials and resources required for the implementation can be secured locally or domestically, COVID-19 is not expected to cause any significant delays or cost increases; however, the project may attract fewer bidders

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because of potential financial difficulties caused by the pandemic. While no changes to the implementation arrangements are considered necessary at this stage, the TNHD continues to monitor the procurement performance closely, and work effectively within the constraints and safety requirements imposed by the government’s response to the pandemic. The project's implementation, on the other hand, will have a positive impact on the local economy through the construction value chain and the generation of local employment.

III. DUE DILIGENCE A. Technical 27. The project was assessed as technically viable. The TNHD prepared the engineering design of the project roads during project preparation. The engineering design follows applicable criteria in line with Indian Roads Congress regulations. The upgrades will involve the expansion of lanes and shoulders, overlay of pavement, construction of bypasses in congested areas, replacement of aging bridges and culverts, realignment of sharp curves, railway overpasses (instead of level crossings), road redesigns for climate resilience, installation of road safety facilities, and construction of bus bays and shelters. B. Economic and Financial Viability 28. The project is economically viable. The economic evaluation of the project was undertaken in accordance with ADB guidelines by comparing life-cycle economic costs and benefits in with-project and without-project scenarios, against an assumed hurdle rate of 9% as decision criteria.33 The quantified benefits include savings in vehicle operation costs and travel time, as well as a reduction in carbon dioxide emissions. The overall economic internal rate of return is estimated to be 18.4%. The sensitivity analysis demonstrated the robustness of the project.34 C. Sustainability 29. The project will not generate revenue. Once the 7-year PBM period is over, the TNHD will assume responsibility for maintenance through regular budget allocations in each financial year. The budgetary requirements for maintaining the project road assets will decrease in the first 20 years after construction because of (i) lower routine maintenance costs thanks to improved road conditions, (ii) the inclusion of PBM contracts, and (iii) sixth-year overlay works as part of the PBM. The state's annual budget allocation to routine maintenance was about ₹10 billion on average during FY2016–FY2020, which is about 10%–12% of the total annual road budget.35 At present, TNHD is capable of maintaining most state highways and major district roads in fairly good condition with the current level of maintenance budget, established road asset management system for efficient maintenance planning and resource allocation, as well as the involvement of the private sector in road maintenance. In fact, less than 10% of the roads are now in poor condition. The required recurrent costs of the project roads are estimated to be about 0.7% of the TNHD maintenance budget. The TNHD has committed to prioritize the allocation of maintenance funding for the project roads.

33 ADB. 2017. Guidelines for the Economic Analysis of Projects. Manila. 34 Economic and Financial Analysis (accessible from the list of linked documents in Appendix 2). The possible impact

of COVID-19 on traffic demand was also assessed in the traffic demand forecast and the sensitivity analysis. The economic internal rate of return varies among project roads from 10.2% to 25.2%.

35 In addition, about ₹10 billion is allocated annually to periodic maintenance under the Improvement to Riding Quality Programme. Some road improvement works are also carried out as part of the Comprehensive Road Infrastructure Development Programme, with an annual budget of about ₹27 billion on average during FY2016–FY2020.

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D. Governance 30. Institutional. The TNHD will implement the project through a PIU based in Chennai. Because the project covers a large geographic area, six field implementation units (FIUs) and four field-level land acquisition, resettlement, and rehabilitation (LARR) units were set up to support the PIU. Many of the staff members in the PIU and FIUs have experience in implementing World Bank-funded projects, and have sufficient capacity to prepare and implement the ADB project. Consultants to be engaged under the project will support the PIU in the areas of project management, supervision, reporting, financial management, and safeguard monitoring. 31. Financial management. The assessed pre-mitigation financial management risk is moderate, mainly because the TNHD has not previously implemented ADB-supported projects and because the large geographical spread of the project carries inherent risk. The TNHD is familiar with the requirements for maintaining separate project records and accounts from working with the World Bank. The identified risks will be mitigated through the provision of training on ADB policies and procedures, the appointment of a qualified financial expert to the PIU, and the implementation of a comprehensive project financial management manual. The PIU has already drafted such a manual with detailed policies and procedures governing internal controls, financial management, and financial reporting. 32. Procurement and value for money. The project procurement risk is rated medium. The risk assessment concluded that the executing agency, although new to ADB's procurement policies and regulations, has significant experience in procuring and managing civil works and consulting contracts under both national and World Bank regulations. All major procurement packages will be subject to prior review to avoid any risks of noncompliance in the procurement process. The procurement of 16 civil works packages and the recruitment of consulting services is progressing well under advance action.36 The project's value for money is being optimized through strategic procurement planning and a risk-managed approach as follows: open competitive bidding; use of eProcurement; application of the EPC contract modality with 7-year PBM; works contracts packaged based on project readiness, market capacity, and geographical proximity; and application of multiple contract evaluation criteria and early completion bonus. 33. ADB’s Anticorruption Policy (1998, as amended to date) was explained to and discussed with the government and the TNHD. The specific policy requirements and supplementary measures are described in the PAM (footnote 31). E. Poverty, Social, and Gender 34. Poverty. The average poverty level in Tamil Nadu is lower than the national rate as a result of relatively higher average incomes, but income disparity within the state is significant (para. 5). The project will improve state highways to link potential industrial growth areas and their hinterland; beneficiaries, including the poor, will benefit from better access to basic services and jobs. The project will also enable economic growth through industrial development along the project roads. Its preparation involved consultations with local community members, both women and men, who were generally supportive of the project, saying that the road improvements would enhance mobility between commercial centers and thus increase economic and employment opportunities.

36 Bids for all 16 civil works contracts have been invited, and requests for proposals for all five supervision consulting

contracts were issued.

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35. Gender. The project is categorized effective gender mainstreaming. The road infrastructure improvements will yield several gender-related advantages, such as better access to health and education services, more income opportunities, affordable and reliable transport facilities for safe mobility, better implementation of government outreach programs, and reduced time poverty. Tamil Nadu generally fares better than other states of India on several important gender parameters. 37 The gender equality and social inclusion (GESI) action plan defines indicators and targets, responsible agencies, and time frames to ensure effective implementation, monitoring, and reporting of GESI activities. This includes (i) considering the specific needs and safety concerns of different users—the elderly, women, children, and people with disabilities—in the design, upgrade, and maintenance of roads and facilities; (ii) creating an enabling environment to attract women to construction work and participation in the PIU and FIUs; (iii) involving women's self-help groups in road maintenance; (iv) involving women in the implementation of afforestation programs; (v) ensuring community participation in road safety improvements; (vi) rolling out various awareness-raising programs; and (vii) collecting sex-disaggregated data during the baseline survey, subproject monitoring, and project impact assessment.38 F. Safeguards 36. In compliance with ADB’s Safeguard Policy Statement (2009), the project’s safeguard categories are as follows.39 37. Environment (category B). Since the project will upgrade existing state highways, most of the road works will follow existing alignments, except for the partial realignment of curves and bypass construction. The TNHD prepared initial environmental examination (IEE) reports for the 16 project roads in accordance with the Safeguard Policy Statement. Potential adverse impacts identified are mostly construction-related dust, noise, vibration, pollution, soil erosion, waste, and occupational health and safety concerns; and some induced noise and air quality impacts during operation. The COVID-19 situation necessitates special attention to occupational and community health and safety measures under the project, closely monitored by the PIU and construction supervision consultants. No significant, irreversible environmental impacts are anticipated, and none of the roads is located inside any critical habitat. Mitigation measures to manage all identified impacts and risks were captured and budgeted in the road-specific environmental management and monitoring plans. However, two project roads, SH63 and SH191, border with bird sanctuaries, and another road, SH40-2, runs near the boundary of a reserved forest that forms part of a tiger reserve.40 The biodiversity and critical habitat assessments established that the sanctuaries are critical habitats for migratory birds, and potential impacts on biodiversity were assessed to be of medium risk, whereas physical barriers separate SH40-2 from the reserved forest, which makes impacts on wildlife and other species unlikely. With implementation of the mitigation measures and habitat improvement activities, the project will not result in significant residual environmental impacts. Biodiversity action plans were prepared for SH63 and SH191 to mitigate biodiversity-related risks, including habitat improvement activities to ensure no net loss or achieve net gain of

37 Details are in Summary Poverty Reduction and Social Strategy (accessible from the list of linked documents in

Appendix 2). 38 The road design includes well-marked crossings, safety signage, 1.5 meters pedestrian walkways in urban locations,

railings along roads, covered drains, paved shoulder, speed bumps, rumble strips, guard stones, and solar blinkers. 39 ADB. Safeguard Categories. 40 Vanduvoor Bird Sanctuary (SH63) and Vettangudi Bird Sanctuary (SH191). The roads fall into eco-sensitive zones

of the sanctuaries for short sections of 1.85 km and 3.7 km, respectively. SH40-2 road is located 750 meters from the edge of the Kolundumamalai Reserved Forest, which is largely separated from the core zone of the Kalakkad Mundanthurai Tiger Reserve.

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biodiversity under the project. The implementation of the biodiversity action plan, environmental management plan, construction activities, and road operation of up to 1 year will be independently monitored by a third party for SH63, SH191, and SH40-2. Public consultations were held for all project roads during the detailed project report and IEE preparation. IEE reports are available from the TNHD and disclosed on ADB and project websites in compliance with ADB's requirements on information disclosure and meaningful consultation. 38. Involuntary resettlement (category A). The project minimizes involuntary resettlement impacts by constructing bypasses in congested areas and revisiting the lane configurations of some project roads. Still, about 448 hectares of private land will be required for the 16 project roads, and about 14,100 households (or 59,500 individuals) will be affected by land acquisition and resettlement.41 Of the 2,340 significantly affected households (totaling 10,165 individuals), 1,166 (4,759 individuals) are affected by physical displacement; 945 (4,463 individuals) by economic displacement; and 229 (943 individuals) by both physical and economic displacement. The TNHD has drafted 16 resettlement plans following the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (2013) and ADB’s Safeguard Policy Statement. The plans outline the entitlements, summary of public consultations and information disclosure, grievance redress mechanism, and institutional arrangements to ensure orderly implementation. They were prepared based on preliminary resettlement surveys, social assessments, and consultations, and will be updated based on the information gathered during the award enquiry phase.42 All involuntary resettlement impacts were adequately assessed, and all stakeholders, including affected individuals, were meaningfully consulted. The TNHD is found to have the capacity and the commitment to ensure that land acquisition and resettlement activities are carried out adequately and in accordance with all applicable requirements. It will engage an external monitor to validate the implementation of the resettlement plans. The Government of Tamil Nadu also approved the approach to acquire private land and assets through direct purchase. Any land acquisition under this approach shall be independently monitored by a third party in accordance with ADB’s Safeguard Policy Statement. 39. Indigenous peoples (category B). The social impact assessment conducted by the TNHD indicates that project road SH58-2 will involve the relocation of 41 tribal households (or 159 individuals) because of the proposed Arakkonam bypass. An indigenous peoples plan (IPP) was prepared in accordance with the Constitution of India; India’s Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (2013); and ADB’s Safeguard Policy Statement. The IPP covers the following: (i) development of a residential colony adjacent to the current location (non-traditional land) of the tribal households with basic infrastructure such as streetlights, 24-hour water supply, community hall, Anganavadi (mother and child care center) building, and temple; (ii) provision of income-generating schemes to men and women in the community; and (iii) capacity building through training to uplift the welfare of the tribal households. The IPP outlines the entitlements, summary of public consultations and information disclosure, grievance redress mechanism, and institutional arrangements. The TNHD has the capacity and the commitment to ensure the adequate implementation of the IPP. 40. The PIU includes an environmental wing and a LARR unit. The wing and LARR unit will be responsible for the overall management of safeguards under the project, supported by FIU and field-level LARR officers who will serve as the safeguard focal points at the sites. The construction supervision consultants will support the PIU in the implementation of the project and

41 The numbers of households and individuals are tentative, and dynamic by nature; the final numbers will be

determined during the award inquiry. The data includes households of indigenous peoples. 42 The information gathered will be finalized in line with the national procedure for land acquisition.

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the safeguards. The TNHD will recruit external consultants to ensure third-party monitoring and verification of all safeguard implementation activities and reports. Semiannual environmental and social monitoring reports will be submitted by the TNHD and disclosed on the ADB website until the issuance of the project completion report. G. Summary of Risk Assessment and Risk Management Plan 41. Significant risks and mitigating measures are summarized in Table 4 and described in detail in the risk assessment and risk management plan.43

Table 4: Summary of Risks and Mitigating Measures Risks Mitigation Measures Insufficient funding for maintenance reduces project sustainability.

The executing agency has a robust asset management system. Civil works contracts include 7-year performance-based maintenance, including overlay in the sixth year, under the responsibility of the contractors. This arrangement will ensure at least a 15-year durability of the project roads. The Tamil Nadu Highways and Minor Ports Department has committed to allocate maintenance funding.

The executing agency's lack of experience with Asian Development Bank projects results in implementation delays during initial phase.

The project implementation unit has taken advance actions to ensure implementation readiness. The project will provide implementation support through the construction supervision consultants. Sufficient numbers of engineers and supporting staff with project experience, particularly World Bank-funded projects, have been mobilized for the project implementation unit.

Source: Asian Development Bank.

IV. ASSURANCES

42. The government and the TNHD have assured ADB that the implementation of the project shall conform to all applicable ADB requirements, including those concerning anticorruption measures, safeguards, gender, procurement, consulting services, financial management, and disbursement as described in detail in the PAM and loan documents. 43. The government and the TNHD have agreed with ADB on certain covenants for the project, which are set forth in the draft loan and project agreements.

V. RECOMMENDATION 44. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Asian Development Bank (ADB) and recommend that the Board approve the loan of $484,000,000 to India for the Tamil Nadu Industrial Connectivity Project, from ADB’s ordinary capital resources, in regular terms, with interest to be determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility; for a term of 20 years, including a grace period of 5 years; and such other terms and conditions as are substantially in accordance with those set forth in the draft loan and project agreements presented to the Board.

Masatsugu Asakawa President

17 March 2021

43 Risk Assessment and Risk Management Plan (accessible from the list of linked documents in Appendix 2).

14 Appendix 1

DESIGN AND MONITORING FRAMEWORK Impact the Project is Aligned with

Economic prosperity and employment generation with inclusive growth achieved (Vision Tamil Nadu 2023)a

Results Chain Performance Indicators Data Sources and

Reporting Mechanisms Risks and

Critical Assumptions Outcome By 2025:

Capacity, connectivity, efficiency, and safety of the highway system increased

a. Average daily vehicle-km traveled on project roads in the first full year of operation increased to 10.18 million average vehicle-km per day (2020 baseline: 6.74 million average vehicle-km per day)

a.–d. Post-implementation surveys endorsed by the TNHD

R: A significant downturn in the state economy may reduce the traffic on project roads.

b. Average travel time on project roads reduced by at least 20% for motorized transport (2020 baseline: 1.71 minutes per km for motorized transport)

By 2027:

c. Road safety improvement program replicated to at least 5 stretches (2020 baseline: NA)

d. Road sector contract modalities, developed under this project, replicated for at least 5 roads in the state, and procurement actions initiated (2020 baseline: NA)

Outputs 1. State highways upgraded and maintained

By 2024: 1a. At least 587 km of state highways upgraded with climate change adaptation and EWCD-responsive featuresb (2020 baseline: 0) (OP 1.3.1); (OP 2.4.1); (OP 3.2.5); (OP 5.1.1)

1a.–1b. Progress reports endorsed by the TNHD

R: Prolonged effects of COVID-19 pandemic adversely affect the performance of contractors and delay implementation.

1b. Road maintenance for all project roads commenced using 7-year performance-based maintenance contracts (2020 baseline: NA)

1c. At least 30% of afforestation program participants are women (2020 baseline: NA)

1c.–1d. Gender equality and social inclusion monitoring reports

Appendix 1 15

Results Chain Performance Indicators Data Sources and

Reporting Mechanisms Risks and

Critical Assumptions 1d. 16 women self-help groups, 1 for each project road, trained and employed for maintenance of roads, drains, toilets, and medians (2020 baseline: NA) (OP 1.2)

2. Capacity in road safety, sector planning, and research enhanced

By 2026:

2a. Institutional strategy with 10-year horizon for the HRS developed and adopted (2020 baseline: NA)

2a. Finalized institutional strategy with 10-year horizon for the HRS

2b. Modernization of HRS facility and equipment completed (2020 baseline: NA)

2b. Capacity development program reports from HRS endorsed by the TNHD

2c. Road safety improvement program with EWCD-responsive features in Madurai, Tirunelveli, Tiruchirapalli, and Villupuram prepared in consultation with the community members (at least 30% of them women) and approved by the TNHD (2020 baseline: NA)

2c. Finalized reports on road safety improvement program

2d. Road safety improvement program, including utilization of advanced technologies, piloted in at least 100 km of selected stretchesc

(2020 baseline: NA)

2d. Program progress reports endorsed by the TNHD

2e. At least 2 contract modalities involving private sector in road service provision reviewed and refined (2020 baseline: NA)

2e. Finalized report on review of the contract modality

2f. Tamil Nadu road sector strategic direction with 10-year horizon to meet emerging needs prepared and approved by the TNHD (2020 baseline: NA)

2f. Finalized Tamil Nadu road sector strategic direction with 10-year horizon

2g. Implementation plan for elimination of traffic bottlenecks prepared and approved by the TNHD (2020 baseline: NA)

2g. Finalized implementation plan for elimination of traffic bottlenecks

16 Appendix 1

Key Activities with Milestones

1. State highways upgraded and maintained

1.1 Award civil works contracts of the first package group by Q1 2021 and the rest by Q4 2021. 1.2 Mobilize construction supervision consultants by Q1 2021.

2. Capacity in road safety, sector planning, and research enhanced

2.1 Recruit consultants for HRS capacity enhancement by Q4 2021. 2.2 Deliver HRS institutional strategy by Q2 2023. 2.3 Complete facility modernization and equipment procurement by Q1 2025. 2.4 Recruit consultants for road safety by Q4 2021. 2.5 Deliver road safety improvement program by Q4 2023. 2.6 Complete piloted implementation of road safety improvement program by Q4 2025. 2.7 Deliver refined contract modalities for private participation by Q4 2023. 2.8 Deliver sector strategic direction by Q4 2024. 2.9 Deliver implementation plan for elimination of traffic bottlenecks by Q4 2023.

Inputs

Asian Development Bank: $484.00 million (loan) Government: $420.6 million EWCD = elderly people, women, children, and people with disabilities; HRS = Highway Research Station; km = kilometer; NA = not applicable; OP = operational priority; Q = quarter; R = risk; TNHD = Tamil Nadu Highways and Minor Ports Department. a Government of Tamil Nadu. 2012. Vision Tamil Nadu 2023: Strategic Plan for Infrastructure Development in Tamil

Nadu. Chennai. b EWCD-responsive features include well-marked crossings, safety signage, pedestrian walkways, railings along

roads, covered drains, paved shoulder (hard shoulder) and earthen shoulder (soft shoulder), speed bumps, rumble strips, guard stones, and solar blinkers. Other gender-responsive design features include streetlights; well-lit bus stops, and with CCTV cameras in warranted locations; and separate toilets suited for women, children, and people with disabilities.

c The technologies would include real-time information provision, drainable and high-friction pavement, new material and equipment for delineation, a vehicle-identification system for enforcement, a traffic management system, and warning and reporting system through mobile devices.

Contribution to Strategy 2030 Operational Priorities Expected values and methodological details for all OP indicators to which this operation will contribute results are detailed in Contribution to Strategy 2030 Operational Priorities (accessible from the list of linked documents in Appendix 2 of the report and recommendation of the President). Source: Asian Development Bank.

Appendix 2 17

LIST OF LINKED DOCUMENTS http://www.adb.org/Documents/RRPs/?id=51337-001-3

1. Loan Agreement

2. Project Agreement

3. Sector Assessment (Summary): Transport (Road Transport [Nonurban])

4. Project Administration Manual

5. Economic and Financial Analysis

6. Summary Poverty Reduction and Social Strategy

7. Risk Assessment and Risk Management Plan

8. Contribution to Strategy 2030 Operational Priorities

9. Climate Change Assessment

10. Gender Equality and Social Inclusion Action Plan

11. Initial Environmental Examination

12. Resettlement Plan

13. Indigenous Peoples Plan: SH58-2

Supplementary Documents

14. Supplementary Document for Economic and Financial Analysis

15. Technical Features of the Proposed Project