NHAI Technical Assistance Project (Loan No IN) Letter of Amendment - Project Restructuring

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized OFFICIAL DOCUMENTS p I7 - Jhe World Bank New Delhi Office Phone: / ERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 70 Lodi Estate Mailing Address: P.O. Box 416 INTERNATIONAL DEVELOPMENT ASSOCIATION New Delhi India Mr. Raj Kumar Joint Secretary (MI) Department of Economic Affairs Ministry of Finance Government of India North Block New Delhi Mr. Raghav Chandra Chairman National Highway Authority of India Plot No. G5 & G6 Sector 10, Dwarka New Delhi December 14, 2015 Public Disclosure Authorized Public Disclosure Authorized Dear Mr. Kumar and Mr. Chandra: INDIA: NHAI Technical Assistance Project (Loan No IN) Letter of Amendment - Project Restructuring I refer to: (i) the loan agreement between India (the "Borrower") and the International Bank of Reconstruction and Development (the "Bank") dated December 22, 2010 ("Loan Agreement"); and (ii) the project agreement, of the same date, between the Association and the National highways Authority of India (NHAI) (the "Project Agreement"), executed for purposes of financing the NHAI Technical Assistance Project (the "Project"). I also refer to the letters dated July 22, 2014 and September 2, 2014, from the Department of Economic Affairs, Government of India and August 12, 2015 (received by the Bank on August 14, 2014), from the Ministry of Road Transport and Highways, Government of India, requesting the Bank to consider the restructuring of the Project, and the amendment of the Loan Agreement and Project Agreement, in order to: (i) revisit the scope of Project activities; (ii) incorporate the Ministry of Roads, Transport and Highways as a new implementing agency for the Project; and (iii) cancel the amount of USD 15 million from the Loan on account of the drop of the activity related to the implementation of the enterprise resource planning system for the NHAL I am pleased to inform that, after due consideration, the Bank has agreed to your restructuring request, which will also result in an amendment to the Project development objective of the Project. Accordingly the Bank proposes to hereby amend the Loan Agreement and the Project Agreement as follows: HeadquarterU Washington DC U USA

2 Mr. Kumar & Mr. Chandra -2- December 14, 2015 I. AMENDMENTS TO THE LOAN AGREEMENT 1. Section 3.01 of the Loan Agreement shall read: "The Borrower declares its commitment to the objective of the Project. To this end, the Borrower, through MoRTH, shall implement its Respective Activities under the Project, and cause NHAI (the "Project Implementing Entity") to implement its Respective Activities under the Project, in accordance with the provisions of the of Article V of the General Conditions and, in the case of NHAI, the terms and conditions set forth in the Project Agreement." 2. The Project's development objective set forth in the first paragraph of Schedule I to the Loan Agreement shall read: "The objective of the Project is to Assist MoRTH and NHAI to adopt better program management and operational practices." 3. The description of Project activities set forth in Schedule I to the Loan Agreement shall read: "Institutional Strengthening and Capacity Building Provision of technical assistance and training to enable MoRTH and NHAI, enhance their program management and operational efficiency in the areas of, inter alia, project preparation and management, standardization and research, asset management, financing options, process transformation, logistics efficiency, surveying, quality audit, reducing carbon footprint, highway advisory radio, development of model concession agreements for expressway and tunneling projects, performance monitoring of vendors, corporate governance, new contract modalities and security audit of IT infrastructure; or any other such technical assistance/advisory activities supporting the Project's development objectives." 4. Paragraph I in Section I.A of Schedule 2 to the Loan Agreement shall ready: "To facilitate the carrying out of the NHAI's Respective Activities under the Project, the Borrower shall make part of the proceeds of the Loan available to the Project Implementing Entity in accordance with the Borrower's standard budgetary arrangements. Notwithstanding the foregoing, in the event that any provision of this Agreement, including the instructions that the Bank shall have specified by notice to the Borrower pursuant to Section IV.A.1 of this Schedule, were to be found inconsistent with the Borrower's standard arrangements, the provisions of this Agreement and related instructions shall prevail." 5. New sub-sections I.C and I.D shall be added following sub-section I.B of Schedule 2 to the Loan Agreement, which sub-sections shall read: "C. Implementation Arrangement 1. The Borrower shall vest the overall responsibility for Project coordination, monitoring and evaluation in its MoRTH. To this end, the Borrower shall:

3 Mr. Kumar & Mr. Chandra -3- December 14, 2015 (a) appoint and maintain the Joint Secretary (Highways) of MoRTH, as the Chief Project Director responsible for overall Project management, implementation and coordination; (b) maintain within MoRTH, throughout the period of implementation of the Project, a Project level empowered committee headed by the Secretary of MoRTH, and comprised of representatives of MoRTH and NHAI, which committee shall be responsible for setting forth Project priorities, resolving inter-agency issues and ensuring coordination, review Project progress, and provide Project guidance/directions on Project implementation to MoRTH's PIU and NHAI; and (c) maintain within MoRTH, throughout the period of implementation of MoRTH's Respective Activities under the Project, a project management unit ("PIU"), headed by the Deputy Secretary (Highways) of MoRTH, assisted by competent staff, all with experience and qualifications, in numbers and under terms of reference acceptable to the Bank; which unit shall be provided with such powers, financial resources, functions and competencies, acceptable to the Bank, as shall be required for it to carry out the day-to-day implementation of MoRTH's Respective Activities under the Project, including inter-institutional coordination, procurement, financial management, monitoring and reporting requirements. D. Safeguards 1. The Borrower shall carry out, and/or ensure that NHAI carries out, by no later than January 3 1, 2016, a strategic social and environmental assessment under terms of reference acceptable to the Bank, analyzing the potential social and environmental impact that might arise out of the implementation of any recommendations, new policy frameworks or prospective investment suggested/resulting from the Project-finance technical assistance, with particular emphasis on indigenous peoples, schedules tribes and schedule casts as well as land acquisition and involuntary resettlement." 6. Paragraph 2 and 3 of sub-section II.B of Schedule 2 to the Loan Agreement shall read: "2. Without limitation on the provisions of Part A of this Section, the Borrower, through MoRTH, shall prepare, and shall cause NHAI to prepare, and furnish to the Bank not later than forty five (45) days after the end of each calendar quarter, interim unaudited financial reports ("IUFRs") for the their Respective Activities under the Project covering the quarter, inform and substance satisfactory to the Bank. Said IUFRs will also serve as a basis for disbursement of the Loan for Eligible Expenditures incurred during said quarter. 3. The Borrower, through MoRTH, shall have, and shall cause NHAI to have, its Financial Statements audited in accordance with the provisions of Section 5.09 (b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one (1) fiscal year of the Borrower and NHAI, commencing with the fiscal year in which the first withdrawal was made. The audited Financial Statements for each such period shall be furnished to the Bank not later than nine (9) months after the end of such period."

4 Mr. Kumar & Mr. Chandra -4- December 14, The table in Section IV of Schedule II to the Loan Agreement shall read: Amount of the Percentage of Expenditures to Category Loan be financed Allocated (inclusive of Taxes) (expressed in USD) (1) Goods, consultants' services, non-consulting services, Incremental 29,887,500 80% Operating Cost and Training for the Project (2) Unallocated 0 Amount payable pursuant to Section 2.03 of this (3) Front-end Fee 112,500 Agreement in accordance with Section 2.07(b) of the General Conditions Amount payable pursuant to (4) Premia for Interest Rate Section 2.07(c) of this Cap and Interest Rate -0- Agreement in accordance Collar with Section 4.05 of the General Conditions (5) Cancelled as ofaugust 15,000,000 N/A 14, 2015 TOTAL AMOUNT 45,000, The following new definitions are added after definition #9 in Section I (Definitions) of the Appendix to the Loan Agreement: "10. 'Incremental Operating Cots' means the reasonable costs of incremental expenditures incurred by the MoRTH or NHAI on account of Project implementation, management and monitoring, including, inter alia: (i) costs of incremental contractual staff salaries (other than consultants or civil servants); (ii) dissemination of Project related information; (iii) office rental and leasing operation and maintenance of equipment; (iv) office supplies and utilities; (v) travel and boarding/lodging allowances; (vi) leasing, operation and maintenance of vehicles; (vii) advertising and communication expenses; and (viii) bank charges. 11. 'MoRTH' means the Borrower's Ministry of Roads, Transport and Highways, and any successor thereto. 12. 'PIU' means the project implementation unit referred to in sub-section I.C.1(c) of Schedule 2 to the Loan Agreement. 13. 'Respective Activities under the Project' means the activities under the Project to be carried out by MoRTH or NHAI, as the same are indicated for each such entity in the Procurement Plan.

5 Mr. Kumar & Mr. Chandra -5- December 14, 'Training' means the reasonable cost of trainings, seminars, workshops, conferences and study tours, conducted in the territory of the Borrower and/or overseas, including: (a) the fees of training institutions and courses; (b) domestic and international travel costs, lodging costs, and subsistence/per diem allowances both for trainers and trainees; (c) the rental of training facilities; and (d) preparation, purchase or reproduction of training materials." II. AMENDMENTS TO THE PROJECT AGREEMENT 9. All reference to "the Project" throughout the Project Agreement shall be deemed reference to "NHAI's Respective Activities under the Project." 10. Paragraph I in sub-section I.A of the Schedule to the Project Agreement shall read: "NHAI shall: (a) vest the responsibility for the overall implementation of NHAI's Respective Activities under the Project in the Member (Finance) of NHAI's board; and (b) designate and maintain, throughout the period of implementation of NHAI's Respective Activities under the Project, a chief general manager-level officer as Project Director, as well as chief general manager-level officers to serve as nodal officers for each of the Respective Activities under the Project." 11. Paragraph 2 in sub-section I.A of the Schedule to the Project Agreement shall be deleted and left blank. 12. Sub-Section II.B.2 of the Schedule to the Project Agreement shall read: "NHAI shall have its financial statements referred to above audited by independent auditors acceptable to the Bank, in accordance with consistently applied auditing standards acceptable to the Bank. Each audit of these financial statements shall cover the period of one (1) financial year of NHAI. NHAI shall ensure that the audited financial statement for each period shall be furnished to the Borrower and the Bank not later than nine (9) months after the end of the period. Finally, the key performance monitoring indicators agreed between the Borrowers, the Bank and NHAI pursuant to Section II.A of Schedule 2 to the Loan Agreement and Section II.A.1 of the Schedule to the Project Agreement are revised to read as set forth in the attachment hereto. Please confirm your agreement to the foregoing on behalf of the Borrower and NHAI by countersigning and dating the corresponding form of confirmation set forth below, and returning one fully countersigned original of this letter to us.

6 Mr. Kumar & Mr. Chandra -6- December 14, 2015 This restructuring and the legal revisions shall become effective as of the date of this letter of amendment (except for the eligibility for financing of all new Eligible Expenditures as per the revised disbursement table, which expenditures shall be deemed eligible retroactively as of December 22, 2010), upon receipt by the Bank of a complete and duly countersigned original. Yours sincerely, INTERNATIONAL BANK OF RECONSTRUCTION AND DEVELOPMENT Michael Haney Acting Country Director, India ATTACHMENT: * Revised Key Monitoring Indicators for the Project Confirmed and agreed: INDIA By: Name: C W,AJIUMAR.-ffTf -fti/ Joint Secretary Tite RM A /Ministry of Finance Title: *pit, o fc.. Afirg Sr'f/Govt. of India Date: R frr/new Oethi Confirmed and agreed: NATIONAL HIGHWAY AUTHORITY OF INDIA By: a Name: 41) A- 0-,-t A Title: M - em- a rj i, cy- Date:

7 Mr. Kumar & Mr. Chandra -7- December 14, 2015 cc: Mr. Subhash Chandra Garg, Executive Director (India), World Bank Mr. Neeraj Mittal, Senior Adviser to Executive Director (India), World Bank Government of India Mr. Bhaskar Dasgupta, Director (MI), DEA, Ministry of Finance Mr. S.G. Dastidar, Controller of Aid Accounts & Audit, DEA, Ministry of Finance Mr. Vijay Chhibber, Secretary, Ministry of Road Transport and Highways Mr. Rohit Kumar Singh, Joint Secretary (Highways), Ministry of Road Transport and Highways Mr. Satish Chandra, Member Finance, National Highways Authority of India

8 ATTACHMENT TO AMENDMENT LETTER NHAI TECHNICAL ASSISTANCE PROJECT (Key Performance Monitoring Indicators) Indicator Name Unit of Baseline Actual(Current) End Target IMeasure Project Development Objective Indicators New financing options and contract Yes/No No No Yes modalities developed and adopted. Asset Management System Developed for Yes/No No No Yes National Highways Improved Project Preparation and Design Yes/No No No Yes Review Process adopted Implementation of GAAP actions and Yes/No No No Yes adoption of mitigation measures within the project period Intermediate Results Indicators Organization and process transformation Yes/No No No Yes study completed Model Concession Agreements for Yes/No No No Yes Tunneling and Expressway Project Developed Independent Quality Audit System adopted Yes/No No No Yes Performance Evaluation System of Yes/No No No yes Consultants and Contractors established and in operation