JK Economic Reconstruction Agency JK Govt Nodal Agency

J&K Economic Reconstruction Agency J&K Govt. Nodal Agency for Implementing External Aided Projects http: //www. jkera. org Tripartite Portfolio Review Meeting Bengaluru Dated: 8 th November 2008 Economic Reconstruction Agency (ERA) Government of Jammu and Kashmir, ist Floor Cottage Arts Emporium, Boulevard, Srinagar 13 C/C, Near Aquaf Market Gandhinagar, Jammu, J & K 180004 Tel. : 0191 -2549664/2455412/2455198 Fax: 0191 -2547133/ 2455153 Email: contact@jkera. org 1

Contents Loan 2151 -IND 1 Financial Progress. 2 Action Taken Report. 3 Points of Discussion. 4. Snapshot of achievements. 2

Loan 2151 -IND Financial Progress A. Contracts Awarded (Rs. In Crores) No: of Contracts Costs Jammu Transport 12 199. 11 Urban 25 291. 61 Total Jammu 37 490. 72 Transport 43 405. 54 Urban 8 189. 58 (Including Equipment for J&K) Kashmir Total Kashmir 51 595. 12 Total 88 1085. 85 3

Loan 2151 -IND Financial Progress B. Disbursements Disbursement-2008 (million US dollars) Allocated in Loan 250 Achieved upto 31 st Dec. 2007 33. 2 Performance 2008 11. 25 In respect of WA, s of Dec. 2007 and Jan. 2008 Imprest liquidated (2. 53 M$) 4

Loan 2151 -IND Financial Progress B. Disbursements in pipeline Amount (Rs. In crores) Date of Dispatch 1. 29 -09 -2008 11, 41, 53, 627. 00 2. 07 -10 -2008 92, 18, 174. 00 3. 20 -10 -2008 1, 03, 34, 226. 00 4. 20 -10 -2008 12, 23, 87, 771. 00 5. 20 -10 -2008 9, 28, 33, 738. 00 6. 21 -10 -2008 2, 71, 99, 924. 00 7. 21 -10 -2008 3, 43, 72, 685. 00 8. 22 -10 -2008 1, 58, 196. 00 9. 31 -10 -2008 99, 76, 432. 00 1 0 31 -10 -2008 16, 68, 50, 087. 00 Total 60, 31, 84, 860. 00 Converted amount in US Dollars (1$ =Rs. 48) 12. 56 M$* Total (2008) 23. 81 M$ In respect of WA, s upto July 2008 only * Submission of WA, s to CAAA was interrupted for 3 months due to civil strife. 5

Loan 2151 -IND Financial Progress B. Disbursements Target 2008 40. 30 Achievement displayed by LFIS website 11. 24 Achievements in respect of WA’s under process in respect of period upto July 08 (Previous Slide) 12. 56 6

Loan 2151 -IND Financial Progress B. Disbursements Anticipated (Rs. In Crores) Aug. 2008 10. 42 Sept. 2008 22. 89 Oct. 2008 19. 98 Nov. 2008 25. 00 Total 78. 29 Converted amount into US Dollars (1$=Rs. 48) 16. 31 M$* Total 40. 12 M$ * Appreciation of Dollar also makes Target achievement difficult in Dollar Terms. Remarks: Upto June, 2008 tempo had been built up but it was slowed down due to interruption caused by civil strife for well over 2 months. Tempo is again building up slowly due to a number of measures taken. 7

Loan 2151 -IND Financial Progress 8

Areas of Concern Major issues identified and Present Status thereon Issue: 01 Ø DEA/Mo. UD has always been expressing serious concern about overall low cumulative Disb. since date of loan effectiveness Ø Inspite of political and topographic constraints the disbursement of loan component under 2151 -IND which was very low in 2005 and 2006 has further gone up from 45 M$ as EA has submitted WAs upto July 2008 worth about 23 M$. Ø By end of calendar year we are hopeful to achieve the Disb. Target set for 2008 i. e. about 40 M$ which will finally take the figure to 75 M$ at the end of 2008. Ø Achievement would have been higher but for the interruption caused by civil strife for about 3 month in peak working season. Disb. Target achievement has steadily progressed from 59% (2006) to 85%(2007) and now we expect 100%(2008) 9

Areas of Concern Major issues identified and Present Status thereon Issue: 02 Ø A serious concern was raised by controller CAAA at Ooty about dual system of routing Disb. partly by replenishment of Imprest and partly by Direct reimbursement of Expenditure from Counterpart funds and it was suggested to adopt one system only. Ø 10 th Governing Body of ERA has considered the proposal on 16 -092008 and done away with the system of replenishment of Imprest of 2. 53 M$ which stands liquidated. Ø Now there will be no violation of Loan Covenant due to delay in passing on credit of reimb. Of Imprest within 30 days of release by ADB. Ø Possibility of any double processing of reimb. one from Imprest and other from Expenditure will also be avoided. 10

Areas of Concern Major issues identified and Present Status thereon Issue: 03 Ø Concern was expressed to strengthen Contract Management which includes Implementation, regular monitoring of Resettlement and Environmental management plans. Ø Governing Body in its 10 th meeting held on 16 -09 -2008 has given approval to direct engagement of Contract Specialist who is in position solving various problems of Contract Implementation which has helped to push the project forward. The following measures deserve mention: Across the board extension to all Sub Projects with escalation under Force majeure clause Formal extension after evaluation of delay attributable to Employer, Consultant & Contractor granted. Quarterly escalation allowed on the basis of confirmed previous RBI Index Ø Governing Body has also approved the position of Director Environment & Safeguards besides strengthening of Environmental sections. Recruitment of positions created is under process. 11

Areas of Concern Major issues identified and Present Status thereon Issue: 04 Ø DEA/ADB has been always expressing Ø serious concern about frequent transfers of key officers. 10 th Governing Body has also deliberated on the issue and given instructions to handpick key officers from a panel and retain them till project completion. 12

Areas of Concern Major issues identified and Present Status thereon Issue: 05 Ø ADB advised EA to resolve the issue of staffing of PIU and consultants to ensure good quality supervision. Ø 10 th Gov. Body (16 -09 -2008) has approval creation of 75 new positions of DPMs, APMs, Junior Engineers Accounts Assistants, Urban Policy Specialist (Director Central), Environmental Staff, Support Staff, Director Environment and Safeguards for Loan 2151 -IND, 2331 -IND. Ø Requirements of consultants for revision of their strength within the overall Budget for capacity building is under process. 13

Areas of Concern Major issues identified and Present Status thereon Issue: 06 Ø Concern was expressed in concluding the process of land acquisition for Srinagar SWM subproject (Achan Landfill Site) and B. C. Road Flyover. Ø Award finalized for acquisition of Achan Land. Rs. 1. 40 crores made available by State Planning and Development Department placed at the disposal of Collector Land Acquisition ERA for payment to beneficiaries. Ø Land has formally been taken over and given to contractor for construction of approach road. Ø Contract for scientific Landfill site has also been awarded as advised by ADB for 14. 58 Crores. Ø Due to objections of Traffic and other Line Deptt, s, the design prepared by CTA for B. C Road Flyover needs modification which will be done by DSC, s of Loan 2 after mobilisation. (Negotiations concluded for Jammu) 14

Areas of Concern Major issues identified and Present Status thereon Issue: 07 Ø v Delay in recruitment of project consultants for loan 2 Ø Even by following QBS system ERA encountered problem of getting same consultants in Kashmir whose performance in Loan-I was not upto mark. Ø Tough conditions of penalty and time bound deliverables are not acceptable to consultants. Negotiation deadlocked. ERA wants to seek advise from ADB whether in case of failure of negotiation we can go for rebidding of DSC for Kashmir (Loan-2) using already shortlisted consultants of J&K. 15

Points for Discussion Delay in Award of Sewerage Contract under Loan 2331 -IND (Loan -2) Chronology S. No. Event Date i) IFB No. JKUSDIP Jammu/NCB-01 27 -12 -2007 ii) TBER submission to ADB 10 -07 -2008 iii) ADB approval to TBER 24 -07 -2008 iv) Opening of Price Bid 11 -08 -2008 v) M/s. Ramky-C&C-SE (JV) even though technically responsive for all 3 contracts for about Rs. 100 crores in stand alone condition, but failed to meet the criteria for award of multiple contracts, Even if found lowest in more than 1 contract would be entitled to award of only one contract so PBER Committee recommended award of WW/03 for Rs. 39, 96, 42, 327 (above 9 m$) 01 -09 -2008 vi) ADB wanted PBER of all 3 lots to determine lowest evaluated bidder on the basis of least combination. 12 -09 -2008 vii) ERA on the basis of approval of TAC sent a detailed proposal justifying relaxation of clause 1. 2 of section 3 Vol 1 to enable award of all the 3 contracts to Lowest Bidder M/s Ramky-C&C-SE whose bid was 62 crores lower than the other bidder. PBER of WW/01 and WW/02 were also forwarded to ADB. 30 -09 -2008 viii) ADB responded by stating that Technical Qualification criteria cannot be changed after deadline of submission of bids as such action after the date might deprive other prospective bidders. 10 -10 -2008 16

Points for Discussion Delay in Award of Sewerage Contract under Loan 2331 -IND (Loan -2) Options now available Option-1 Award one contract package on the basis of lowest combination and rebid the other two with a relaxed/same criteria. Option-2 Rebid all the three packages with a relaxed/same criteria Questions ØIf the same J. V. M/s Ramky-C&C-SE who at present failed to meet the financial criteria for award of multiple contracts shall again become eligible for award of more contracts, if found lowest as and when fresh bid for other two or all the three packages are invited but at a higher cost, how can officers of ERA who are accountable to State Govt. laws and State Legislature defend themselves against incurring higher expenditure. ØUnder the IFB terms in case of a JV all the participating partners are individually and collectively responsible for successful delivery of the contract then why get bogged down by a legalistic view of failure of turnover criteria of a single partner. ØIn case of a difference of perception/opinion of local ADB PSU is it not correct to take the issue to a higher forum for appropriate decision. So far as borrowing client is concerned TAC is the highest forum of EA to decide about any matter pertaining to contract and it had decided to award all the three contract package to JV in relaxation of Technical Qualification norms, subject to same being approved by ADB. But ADB did not agree and referred to failure of turnover criteria of a single JV partner 17

Points for Discussion Suggestion for TPRM Due to appreciation of Dollar the undisbursed loan component is likely to make available additional resource to the extent of Rs. 200 crores. Will ADB/DEA agree to award some more contracts in Urban/Transport sector which stand already apprised under Loan 2151 -IND and in which case even IFB’s were issued but later kept on hold ADB may kindly advise the status of J&K Transport Loan and its PPTA which has been listed for 2010 in Country Operations and Business Plan 2008 -2010. Is it possible to conclude PPTA in 2009 and also negotiate the loan. The life of PSU of ADB is expiring on 31 st Dec 2008. The timely advice of PSU in the matters of procurement, presentation of cases to ADB, variations and contract implementation issues is of great help to EA. So we would like to extend the facility of PSU after 31 st Dec 2008. 18

Images Wanpoh-Chawalgam Aharbal Road (District Kulgam) Bitumen Macdamization going on using Paver Sensor 19

Images Water harvesting in dry areas of Jammu achieved for the first time 20

Thanks for JAMMU Your Time KASHMIR 21