India: Karnataka State Highways Improvement III Project

Sovereign Project | 42513-014

Summary

The Karnataka State Highways Improvement III Project (KSHIP III) is designed to improve transport connectivity in the state by rehabilitating and upgrading state highways (SHs) and major district roads (MDRs), forming part of the Core Road Network (CRN) in the state. The Project constitutes (i) rehabilitating and upgrading about 2,200 km of SHs and MDRs; (ii) improving road maintenance and asset management through the use of public-private partnerships (PPP); and (iii) structuring an accident response system. Consulting services will be provided to supervise the implementation of civil works. A project preparatory technical assistance (PPTA) of $600,000 is proposed to be included.

The impact of the project will be improved road transport connectivity in the state of Karnataka. The outcome will be improved road efficiency in Karnataka. The outputs will be (i) improved and rehabilitated state roads; (ii) improved road maintenance and asset management and; (iii) accident response system structured.

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Project Name Karnataka State Highways Improvement III Project
Project Number 42513-014
Country India
Project Status Proposed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan: Karnataka State Highways Improvement III Project
Ordinary capital resources US$ 350.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Transport - Road transport (non-urban) - Transport policies and institutional development

Gender Equity and Mainstreaming Some gender elements
Description

The Karnataka State Highways Improvement III Project (KSHIP III) is designed to improve transport connectivity in the state by rehabilitating and upgrading state highways (SHs) and major district roads (MDRs), forming part of the Core Road Network (CRN) in the state. The Project constitutes (i) rehabilitating and upgrading about 2,200 km of SHs and MDRs; (ii) improving road maintenance and asset management through the use of public-private partnerships (PPP); and (iii) structuring an accident response system. Consulting services will be provided to supervise the implementation of civil works. A project preparatory technical assistance (PPTA) of $600,000 is proposed to be included.

The impact of the project will be improved road transport connectivity in the state of Karnataka. The outcome will be improved road efficiency in Karnataka. The outputs will be (i) improved and rehabilitated state roads; (ii) improved road maintenance and asset management and; (iii) accident response system structured.

Project Rationale and Linkage to Country/Regional Strategy

State Context. Karnataka state in the south-west of India has an area of about 192,000 sq.km and population of about 61 million. Karnataka has been amongst the fast growing states in India, unemployment rate and poverty are lower than the national averages, and the state receives substantial foreign direct investment. In terms of transportation, the rail network in the state is rather sparse, with only about 3000 route km, mostly on single line. Because of the terrain along the Western Ghats (hill ranges), east-west rail connectivity is also limited to just one line from Hassan in the hinterland to Mangalore on the west coast. The road network is therefore a critical element of the economic infrastructure. Under ADB TA 7324-IND, Technical Assistance for Karnataka State Highway Network Improvement, consultants completed a study for identifying a Core Road Network' (CRN) in the state.

Priority Road Corridors. A pre-feasibility report was conducted on the CRN, based on broad financial assumptions, to categorize projects that could be taken up on some form of PPP: toll based, or with state support for part of capital cost, and/or availability payments on an annuity basis. Based on these studies, KSHIP identified nine key road corridors, portions of which will be taken up for upgrading through ADB's financial assistance, using appropriate PPP frameworks.

Road Institutions. Karnataka Public Works, Ports, and Inland Water Transport Department (KPWD) is the main institution of the government of Karnataka (GOK), responsible for SHs and MDRs. KPWD established Karnataka Road Development Corporation (KRDCL) in 1999, to promote surface infrastructure by taking up specific road works and bridges, and to take up projects on PPP formats. In addition, Karnataka State Highways Improvement Project (KSHIP) was established as a project implementation unit (PIU) to undertake multilaterally financed projects. KSHIP has an independent structure with its own offices, staff, and headed by a Chief Project Officer. For rural roads, GOK has established the Karnataka Rural Roads Development Agency (KRRDA), which manages rural roads through KRRDA funds made available from the state budget and national rural roads scheme.

Government Strategy. While Karnataka is amongst the better performing states in India, development is uneven, being focused around the capital region of Bangalore/ Mysore and the coastal towns of Mangalore/ Udupi. Given its poor rail network, Karnataka is heavily dependent on its road network for linkage between the rural and urban economies. In its state road policy (2009) GOK recognizes the importance of road development as an engine of economic growth, and proposes to develop the CRN to Indian Roads Congress (IRC) standards with 2-lane width. To achieve this, GOK has been using a combination of budgetary, PPP, World Bank, and ADB financing to improve state roads. KSHIP-I was a World Bank Project of 2001 approval for $360 million, addressing about 2400 km of roads. KSHIP-II, which is ongoing and covers about 1500 km of roads, has two parts: a World Bank approval of 2011 for a $350 million loan, and an ADB approval of 2010 for a $315 million loan. However, the development of the CRN roads requires further substantial funding, estimated to be of the order of $1.7 billion.

ADB's Participation. ADB's contribution to such development will foster inclusiveness by enabling larger segments of the state's population to better access markets and basic services. The project will also continue and strengthen ADB's engagement in the state and benefit the state's road program with continuity and consistency. ADB's value addition would also be from the proposed use of private sector financing to leverage government financing while improving sustainability of capital investments, as well in structuring an accident response system to improve road safety. The project is harmonious with the strategic objective set out in the Country Partnership Strategy 2013-2017 on development of state core network, with the transport sector objective of increased, more efficient, and sustainable movement of people and goods. The project is included in the Country Operations Business Plan: India (2013-2015), and the Department of Economic Affairs, Ministry of Finance, Government of India (DEA) has cleared the project for ADB's financial assistance.

Impact Improved road transport connectivity in the state of Karnataka
Outcome Improved road efficiency in Karnataka
Outputs

1. Improved and rehabilitated state roads

2. Improved road maintenance and asset management

3. Accident response system structured

Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement A
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design

The potential primary beneficiaries of the project are the road users, communities in the vicinity of the project influence area, villagers, Panchayats (rural local government), KPWD, other development partners active in India's transport sector development, and business and community groups. The poor and the excluded also get an easy access to roads, which further help them in reaching markets and other services. Adversely impacted stakeholders would primarily be those who lose land or livelihood. However, the Project's focus is on improving and rehabilitating existing roads, thus land acquisition will be limited to areas where roads need some geometric improvement, bridge approaches, or bypasses' to avoid infringing existing settlements. Adverse impacts will be mitigated through proper stakeholder consultations and incorporated into the resettlement plan.

The proposed Project's objective is improved road connectivity in the state of Karnataka, leading to improved access to basic services, trade, and employment. Primary concerns for poor and vulnerable stakeholders would be loss of land and/or livelihood as a result of land acquisition activities. The project preparation will include investigations and consultations covering all beneficiaries, including the poor and vulnerable stakeholders.

During Project Implementation Adverse impacts will be mitigated through proper stakeholder consultations and incorporated into the resettlement plan.
Business Opportunities
Consulting Services A firm (or consortium of firms) will be engaged to undertake this PPTA. As estimated, this assignment will require 1 international and 7 national experts for a total of 37 person-months. The consulting firm will be engaged following the quality- and cost-based selection method, with a quality cost ratio of 90:10 using bio-data technical proposal procedures. Procurement of all consultancy services used under the PPTA will be carried out in accordance with ADB s Guidelines on the Use of Consultants (March 2013, as amended from time to time).
Procurement The implementing agency would be KSHIP. KSHIP will engage construction supervision consultants as the engineers for the contracts. KSHIP envisages the application of advance contracting and retroactive financing to accelerate implementation. All procurement of goods and works will be undertaken in accordance with ADB's Procurement Guidelines (March 2013, as amended from time to time). All consultants will be recruited according to ADB's Guidelines on the Use of Consultants (March 2013, as amended from time to time).
Responsible ADB Officer P. V. Ravi
Responsible ADB Department South Asia Department
Responsible ADB Division Transport and Communications Division, SARD
Executing Agencies
Government of KarnatakaDr Ambedkar Rd., Sampangi Ramnagar,
Bangalore, Karnataka, India
Timetable
Concept Clearance 31 Jul 2014
Fact Finding 09 Jan 2016 to 22 Jan 2016
MRM 21 Jun 2016
Approval 30 Sep 2016
Last Review Mission -
Last PDS Update 31 Mar 2015
Title Document Type Document Date
Karnataka State Highways Improvement III Project Initial Poverty and Social Analysis Aug 2014

Safeguard Documents

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Evaluation Documents

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