INDIA: Integrated Coastal Zone Management Project Sixth Implementation Review Mission: January 30 February 20, 2014

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1 INDIA: Integrated Coastal Zone Management Project Sixth Implementation Review Mission: January 30 February 20, Aide Memoire A. Introduction, Objectives, Acknowledgements and Schedule 1. The Sixth Implementation Review mission of this project was undertaken during January 30 February 20,. During the site visits and discussions, the World Bank team 1 was joined by officials and staff of the SICOM (the national project management unit or NPMU) and the State Project Management Units from Gujarat and Odisha. This aide memoire also summarizes findings of the various technical discussions and field visits of the Bank task team during October December Objectives of the mission included: (a) review the status of actions agreed during the mid-term review (MTR) mission of May-June 2013; (b) detailed review of the status of procurement in the light of actions agreed during the MTR mission, and to reach agreements on actions relating to pending procurements, if any; (c) review of disbursement progress since the MTR mission, to agree on clear estimates of expenditures, budget allocations and disbursement projections; and to agree on actions to further improve the disbursement in the project; (d) assessing the need for partial cancellation of credit amount, based on procurement and disbursement reviews (in the light of agreed actions relating to procurement during MTR mission), if necessary; (e) if partial cancellation is necessary, agreement on restructuring requirements (including any changes, if required, on the scope, design and components of the project), and initiation of restructuring process; (f) reviewing fulfillment of the covenants applicable to implementation of the Project, including legal covenants; and (g) reviewing the operation of financial management system, procurement management system including dissemination of procurement related information, environmental and social impact management processes, grievance redress processes, and the roll-out of the communication strategy and plans. 3. During the mission, discussions were held with the National Project Director and the staff of SICOM, State Project Directors and the staff of the State Project Management Units (SPMUs) in Gujarat and Odisha, all the Priority Investment Executing Agencies (PEAs) involved in implementation of the Project in the National Components and in the Project States of Gujarat and Odisha. Based on a request from the Department of Economic Affairs (DEA) of the Ministry of Finance the mission cancelled the visit to West Bengal (which was planned at the start of the mission); but review of the progress of the West Bengal State Component was undertaken during the several meetings in New Delhi along with SICOM. The mission had wrap-up meetings with the Secretary, Ministry of Environment and Forests, Government of India (MoEF) on February 19, ; the Additional Chief Secretary (Forests and Environment), Government of Gujarat on January 31, ; and the Principal Secretary (Environment), Government of Odisha on February 06,. The mission debriefed the DEA on February 20,. The list of officials and prominent stakeholders met during the mission is presented in Annex 1. 1 The World Bank team consisted of A S Ramakrishna (Senior Environmental Specialist and Co-Task Team Leader), Parthapriya Ghosh (Senior Social Development Specialist), Thomas Kwasi Siaw Anang (Procurement Specialist), S. Krishnamurthy (Senior Financial Management Specialist), Om Prakash (Consultant, Procurement Specialist), Moushumi Chatterjee (Consultant, Museologist), Nidhi Batra (Consultant, Urban Designer), Genevieve Maria Dutta (Program Assistant ), and Tapas Paul (Senior Environmental Specialist and Task Team Leader). 1

2 Aide Mémoire: Sixth Implementation Review Mission, January 30 February 20, B. Key Project Data Project Data Project Performance Ratings Board Approval June 15, 2010 Summary ratings Last Now Effectiveness Date September 22, 2010 Achievement of PDO MS MS Original Closing Date December 31, 2015 Implementation Progress MS MS MTR Date June 30, 2013 Financial Management MS MS Procurement S S Original Credit Amount US$ million Project Management S MS Amount Disbursed US$ million (+2.8 million) Counterpart Funding S S Monitoring and Evaluation MS MS C. Achievement of Development Objectives 4. The Project Development Objectives are to assist GOI in (i) building national capacity for implementation of comprehensive coastal management approach in the country, and (ii) piloting the integrated coastal zone management approach in states of Gujarat, Odisha and West Bengal. 5. Institutional Capacity: The appropriate national institutional structure for guiding and coordinating implementation of ICZM approaches has been established including the national, state and district level coastal zone management authorities, the Society for Integrated Coastal management (SICOM), and the National Centre for Sustainable Coastal Management (NCSCM). As reported during the MTR, NCSCM is now functioning effectively, even if further expansion is proposed during (and it already has appropriate recognition as per the CRZ Notification 2011). MoEF has recently taken up the issue of permanence of the SICOM and the NCSCM (to receive internal government approval for sustaining these institutions after the close of the project, even if such sustenance was the intent at the start of the project) and a formal decision is expected within June. Although the national and state coastal zone management authorities (NCZMA and SCZMAs) have been functioning as planned, there is a need that all SCZMAs should build the requisite technical secretariat. The MoEF has mandated SICOM for overall coordination of the coastal zone program in the country, but formal authorization of SICOM as the technical secretariat of the NCZMA is yet to be notified. Other than Odisha, there has not been any noticeable progress in Gujarat and West Bengal to mandate the SPMUs as the secretariat of the SCZMAs. Formation of the district level coastal zone management authorities (DCZMAs) is yet to cover all coastal districts, and building their capacities continues to remain a challenge for the NCZMA and the MoEF. 6. Improving Knowledge Base: There has been noticeable progress on the knowledge agenda. All these knowledge products are available in public domain, such as at websites. Since the MTR, noticeable augmentation of the knowledge agenda includes the following: a. As part of the National Component, (i) supplementary measurement of astronomical tides is nearly complete for an additional 35 locations (14 locations are now proposed to be deleted of the intended 49 locations) by the Survey of India; and therefore the analysis of tidal data has been completed for all major, minor and supplementary ports in the mainland coast of India; (ii) an improved advanced draft of the potential of offshore wind energy in India, taking into consideration the daily, weekly and monthly variability; (iii) initiated an aassessment of coastal and marine ecosystem goods and services for the country; (iv) initiated an assessment of resource dependency and social capital among the coastal communities; (v) substantially progressed in the assessment of the blue carbon sequestration in the coastal and marine ecosystems; (vi) initiated the establishment of sentinel sites for coastal management; (vii) substantially progressed on the study on the impacts of seaweed cultivation on 2

3 Aide Mémoire: Sixth Implementation Review Mission, January 30 February 20, coastal environment and on the development of models for seaweed cultivation outside marine protected areas; and (viii) has launched the national database and field identification toolkits for coastal and marine biodiversity resources, called coastal and marine biodiversity integration network or CoMBINe ( b. As part of the Gujarat State Component: (i) Bhaskaracharya Institute Space Application and Geo- Informatics has completed the coastal atlas including atlas of mangroves, corals, saltpans, low tide line, high tide line; (ii) a GIS for coastal zone decision-making is nearing completion; (iii) finalized protocols for two models of coral transplantation; and (iv) analytical summary of sea water quality monitoring for has been completed. c. As part of the Odisha State Component: (i) two new novel species of bacteria (Streptomyces chilikensis and Streptomyces barkulensis) have been discovered; and (ii) a GIS describing macrophyte vegetation of the Chilika lagoon has been prepared. 7. Policy and Regulation: Gujarat had undertaken a number of district level workshops, since the MTR, to explain in detail the intent and scope of the 2011 Coastal Zone regulation Notification. However, since August 2012, there continues to be no progress related to the two proposed regulations: the proposed River Zone Regulation for conservation of estuaries, and the proposed Fisher Persons' Rights Bill 2. As noted in the aide memoires of the earlier implementation support missions and the MTR, these proposed policy instruments will take time to move to the next step of being placed for legislative approval, and formal legislation will be very difficult to achieve before the close of the project. 8. Replication: As reported at MTR, since May 2013, the government had initiated preparation of integrated island plans for two union territories the Lakshadweep Island, and the Andaman and Nicobar Islands. Further, Tamil Nadu and Puduchchery have also initiated preparation of integrated coastal zone management plans. Preparation of all these plans have adopted processes similar to the ones being used in the project, and as such based on the guidelines prepared by NCSCM. No such plan is yet final. Likelihood of achieving Project Development Objective 9. The project has already benefitted 588,408 persons directly (284,137 or 48% of whom are women), equal to 54% of the targeted direct beneficiaries (see Annex 7 for details). Based on the progress, continued public and stakeholder engagement, and support at the highest policy-levels in GOI and the three state governments, the achievement of the PDOs in the remaining project period is possible. In case of West Bengal, though the implementation is delayed, government support continues for improving the overall performance. 10. In respect of building national capacity for coastal management approach, the revised draft guidelines for ICM plan preparation are available and the supporting activities such as hazard line mapping, erosion mapping, etc. are progressing. There has been substantial progress in the setting up of the institutions, knowledge benchmarks and services have shown improvement, and the policy reforms are in place. Process of formal approval initiated to sustain the capacities created (notably SICOM and NCSCM) beyond the project. Activities relating to preparation of ICZM plans in Gujarat and Odisha are given priority, while the delay in preparation and hence implementation of many of the pilot activities, especially in West Bengal may impair the focus on larger ideas. The inadequate project management capacity in West Bengal, if not addressed on priority, preparation and adoption of ICZM plans and further augmentation of the institutions and knowledge under Component 4 will be at risk of being not achieved. Given this, part of the PDO relating 2 These two instruments (the proposed River Zone Regulation for conservation of estuaries, and the proposed Fisher Persons' Rights Bill) were not part of the agreed outcomes. These were proposed by MoEF later to respond to the evolving needs for conservation of the coastal and marine resources. 3

4 Aide Mémoire: Sixth Implementation Review Mission, January 30 February 20, to West Bengal will not be achieved unless greater attention is paid to preparation and adoption of the ICZM plans. 11. As agreed during the MTR, a complete package of monitoring data is now available for the ongoing project activities which are in different stages of implementation. For some of the completed activities, such as part of the mangrove plantations in Gujarat (about 4,000 Ha.), third party evaluation is completed. However, the proposed overall third party evaluation agreed during the MTR is yet to be completed. Since stakeholder satisfaction surveys from the third party evaluation are objective means to ascertain the PDO achievement, it was agreed to complete evaluation before October. In absence of such evaluation, although the monitoring data reflects improvement, the achievement of development objectives in the project is rated as moderately satisfactory. Likelihood of Achieving Intermediate Outcomes 12. Following is a summary discussion on the likelihood of achieving the intermediate outcomes. Compo nent One Two Three Four Overall Planned Intermediate Outcome National Capacity Built for guiding and coordinating ICZM Coastal Management Areas Demarcated and Verified Gujarat state and other stakeholder s capacity built in implementing ICZM approaches Odisha state and other stakeholder s capacity built in implementing ICZM approaches West Bengal state and other stakeholder s capacity built in implementing ICZM approaches Building national capacity for implementation of comprehensive coastal zone management approaches Up to the MTR Likely to be achieved Highly Likely to be achieved Highly Likely Highly Likely Somewhat at risk Likely to be achieved Major achievements since the Mid-Term Review Revised draft of guidelines for ICZM plan preparation available. The process of ICZM Plan preparation initiated in Gujarat and Odisha. Process for formal approval initiated to sustain the capacities created (notably SICOM and NCSCM) beyond the project. NCSCSM research program has gathered momentum. Parts of the large capacity building program are now being implemented. However, no further progress in augmentation of SCZMAs and DCZMAs. Aerial photography earlier completed. Photogrammetry works progressing slowly. Measurement of tides and flood levels complete. Detailed erosion mapping should be completed by June. Works progressing satisfactorily for Vedaranyam ESA, and Dandi ESA progressing albeit slowly. Work on identification of all other ESAs delayed. The project and the ICZM agenda continue to receive attention at the highest policy levels. Very good results already achieved at the village community level. Most pilot activities progressing with excellent communication. The project and the ICZM agenda continue to receive attention at the highest policy levels. A number of knowledge, capacity building and communication activities initiated. Most pilot investments progressing well. Implementation (which slowed down since March 2013) has not accelerated. Procurement further delayed, and a number of pilot investments are unlikely to be completed within the project period. No noticeable progress on the ICZM agenda since MTR. MoEF stewardship for the coastal zone and marine area management has been good. Overall interest from stakeholders including civil society has been good. Overall Remarks Likely to be achieved Likely to be achieved Highly Likely to be achieved Highly Likely to be achieved Likely to be achieved if Proj. Mgt. capacity is improved on priority Likely to be achieved (except in West 4

5 Aide Mémoire: Sixth Implementation Review Mission, January 30 February 20, Compo nent Planned Intermediate Outcome Up to the MTR 13. Key Implementation Issues: At present the major challenges are: Major achievements since the Mid-Term Review Overall Remarks Bengal) (a) Procurement: 112 contracts out of 196 contracts (which were all expected to be awarded by December 2013, and later by March at the request of West Bengal) are ready for award, but could not be awarded due to the issue of the EFC/CCEA approved ceiling cost of project (in INR terms, of INR1153 crore), as SICOM is not authorized to commit expenditure above INR1153 crore. 84 contracts (worth INR 146 crore) are yet not advertised. Majority of these (63 contracts worth INR115 crore) are in West Bengal. (b) Lack of Progress of West Bengal Component: West Bengal awarded only 8 of the agreed 73 contracts and some of the awarded contracts have not been signed. The progress of awarded contracts is very slow and the FY 14 expenditure had also been slow (less than 50% of other state components). West Bengal SPMU has indicated intention of either discontinuing or dropping the knowledge and capacity building activities and progress is not noticed in initiating ICZM Plan Preparation (c) Increased Project Cost: While the current estimated cost of the project is INR 1786 crore, the original cost estimate was INR 1335 (INR 1153 crore at 2009 prices + physical and fiscal contingencies of INR 180 crore), EFC/CCEA approval was given for INR MOEF expressed the intent solicit EFC/CCEA approval. The revised cost (with EFC/CCA approval), including utilization of project savings due to currency fluctuation within the allowable expenses under different components to be provided to the Bank. (d) Budget: For FY14, the budget allocation was sufficient, but in December 2013, the budget of the MoEF was curtailed. As a result, MoEF could not provide INR75 crore for January-March. For March alone, there is a shortfall of INR41 crore. Further, for FY15, MOEF got a budget allocation of INR140 crore for this project (where the budget requirement is INR551 crore, and INR 140 crore is required for the 3 months of April-June ). D. Current Progress of Implementation 14. Following is a summary discussion on (i) actions taken by NPMU and SPMUs and the PEAs based on agreements reached at the MTR (June 2013); and (ii) the current progress of implementation. 15. Progress on Agreements during the Last Mission: Overall, the progress on the actions agreed during the last mission had been good for the Gujarat and Odisha State Components, fair for the National Component, and poor for the West Bengal State Component. See Annex 5 for details. a. Disbursement related agreements. The following are the current status, and projections for the remainder of the FY14: i. For FY14, the quarterly disbursement estimates were US$ million (First Quarter), US$ million (Second Quarter), US$ million (Third Quarter), US$ million (Fourth Quarter); and overall for the FY14 US$ million (FY14). Against this target, the actual disbursement has been US$1.3 million (First Quarter), US$4.5 million (Second Quarter) and US$4.5 million (so far in the Third Quarter) or overall US$10.4 million so far in FY14. ii. Part of the above shortfall is due to DEA decision to withhold a portion of the disbursement request to adjust against the fixed advance received in the project in So far in FY14, such amount adjusted against the fixed advance is US$3.8 million. 5

6 Aide Mémoire: Sixth Implementation Review Mission, January 30 February 20, iii. Part of the shortfall is due to slack of expenditure in the project. The MTR estimate for project expenditure in FY14 until January was INR 173 crore, whereas only INR139 crore (80% of the estimate) has been spent until January. iv. Expenditure (in INR crore) and disbursement projections (in US$ million) for the months of January to June are as follows: Project Component Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Total National Component Gujarat Component Odisha Component West Bengal Component Total Expenditure (INR Cr) Expenditure for Quarter (INR Crore) Disbursement Estimate (US$ million) Remaining Third Quarter FY Fourth Quarter FY14 Until Now Total FY14 As per Expenditure Plan With all risks unmitigated Adding the adjustment against fixed advance by CAAA for the entire FY14 As per Expenditure Plan With all risks unmitigated v. Therefore, it could be seen that the FY14 disbursement estimate (low-medium) made at MTR (June 2013) is possible and likely to be met. At the Tripartite Review, SICOM and MoEF had agreed to ensure the minimum disbursement of US$15 million for the Third Quarter. The current disbursement in the Third Quarter is US$4.5 million, and it is likely that the target of US$15 million will be met. vi. However, in the Fourth Quarter, there will be risks of low disbursement. These are related to the following issues: a. The GC of SICOM and the MoEF has suggested the SPMUs and the national level PEAs to cap their procurement to the respective base cost approved in Therefore, a number of contracts are awaiting award, and the estimated expenditure against these may not materialize. This could reduce the disbursement in FY14 (mostly in the Fourth Quarter) by at least US$2.5 million. b. MoEF is currently experiencing a shortfall of budget for the month of March (same as most other ministries of GOI after the revised budget allocations of December 2013). The project has a budget shortfall of INR41 crore, which is essential to meet it planned contract commitments. MoEF assured the mission that the best possible budget will be made available to the project (diverting the savings in other projects, if any). However, it is unlikely that all of INR 41 crore will be available. In that case, the planned expenditure of March will only be spent in April. 6

7 Aide Mémoire: Sixth Implementation Review Mission, January 30 February 20, c. Against the requirement of INR 551 crore during Financial Year -15, the budget allocation to the project is INR 140 crore. The vote-on-account has provided MOEF with a limited budget, and it is unlikely that any additional allocation to the project can be made until the budget proposal for GOI is passed in June-July (after the general elections). MoEF assured the mission that adequate budget provision (INR450 crore or more) will be made for the Financial Year -15. However, the initial shortage of budget, along with the shortfall in March, may reduce the project expenditure by about INR50 crores, and consequently the FY14 disbursement may be reduced by as much as US$6 million. d. Further, if MoEF and SICOM GC (or the Expenditure Finance Committee or EFC) take the decision to cap the INR cost of the project for the remaining of the project period (and especially for the State Components of Gujarat and Odisha), disbursement in FY15 or FY16 will also not meet the MTR estimates. e. In light of the above possibility of capping expenditure (to the original INR cost of 1135 crore approved by EFC), the revised procurement plan prepared in November has not been approved by the GC of SICOM. vii. Notwithstanding the above, since the MTR the following improvements could be noted: a. Several actions were taken such that the expected disbursement in FY14 (US$42.8 million) will be about 19% of the total credit (disbursement ratio of 22%). This is more than double of what was achieved in FY13 (US$20.8 million, which itself was more than double of the disbursement in FY12). b. The targets for awarding contracts (by December 2013, later extended to March as agreed between SICOM and DEA) were nearly achieved by the Gujarat and Odisha State Components, with some slack in the National Component 3. viii. The NPMU and SPMUs in Odisha and Gujarat had monitored intermediate steps (milestones) in the procurement processes for each of the contracts. ix. For the contracts that are already awarded, the NPMU and the SPMUs had monitored the completion of the contracts vis-à-vis the contract milestones, and had taken measures to ensure that the implementation of these contracts did not slip further) 4. x. MoEF had ensured that there is no shortage of budget allocation for the project during July- October There has been shortage since November 2013, and MoEF has released budget in the recent past on a monthly basis. [Even if MoEF sees this the best possible way, this lack surety of budget availability has affected expenditure.] It is expected that during FY15 (especially after the GOI budget allocation in June-July ) there will be no shortage of budget. 3 However, the West Bengal Component failed to meet the targets for award of contracts; and it is likely that not more than a small part of the expected award since MTR (10% by number, and 35% by value) will actually be awarded by March. 4 Exceptions include (i) the contract for the Jamnagar sewage treatment plant in Gujarat State Component, where the contractor s mobilization has been delayed owing to a disagreement on performance bond; (ii) contracts in West Bengal State Component where the pace of implementation has slowed further. 7

8 Aide Mémoire: Sixth Implementation Review Mission, January 30 February 20, b. Agreements on the planned knowledge program at NCSCM. As agreed, all research programs had started and a few of these have already shown good progress. However, the dialogue with the Partnership for Environmental Management in the Seas of East Asia (PEMSEA) for technical cooperation has not progressed as anticipated, and no action has yet been taken to formally partner with international research facilities (other than the Maryland University which is supporting preparation of the ecosystem health cards). c. Agreements related to the terms of reference for preparation of ICZM plans, and preparation of the ICZM plans for the identified stretches. The NCSCM have revised the draft guidelines, taking into consideration World Bank comments on integrating environmental and social assessments as part of the plan preparation process itself. The revised guidelines also considered the inputs from national and international experts. Gujarat SPMU had tried to select consultants for supporting preparation of ICZM Plan for the Gulf of Kachchh. First round of selection process did not yield proposals from any suitably qualified consultants; and a second round of selection process was undertaken; and it is expected that negotiation (under quality-based selection procedure) will be completed soon. The Odisha SPMUs has also prepared terms of reference for preparation of the relevant ICZM Plan, although the selection process has yet not started (owing to the limitation in budget, as described earlier). d. Agreements related to implementation of the national and state level capacity building and training plans. SICOM has prepared a draft of the revised national building plan. However, this has not yet been approved by the GC of SICOM. Gujarat SPMU has revised the state capacity building plan, but is awaiting approval. e. Agreements related to capacity augmentation at SICOM and other SPMUs: In December 2013, a senior subject expert was appointed as additional project director at SICOM (which concluded a long pending issue). SICOM GC has advised that recruitment of the head of HR and administration function, and additional technical specialists at this late stage of the project is not advisable. The processes for appointing consultants to (i) installing an effective performance management and human resources management process; and (ii) real-time monitoring system has been delayed; but are in the final stages of award, and could be expected to be completed in another month. However, no progress has been made with respect to augmentation of the communication cell of SICOM (which is defunct). Looking at the importance of communication (especially as activities such as hazard line mapping start providing outputs), it is more important now to have an effective communication cell at SICOM; and it was agreed that augmentation of the communication cell will be attempted before April. It is also important that the head of finance at NCSCM is also promptly recruited. Recruitment process for subject experts has been completed by SPMUs in Gujarat and Odisha. The technical capacity of the West Bengal SPMU remains inadequate with specific reference to preparation of ICZM Plan. f. Agreements related to the sustainability of institutional arrangements beyond the duration of the project need to be initiated. SICOM GC and MoEF are initiating the process of formal recognition of SICOM and NCSCM to ensure their continuity beyond the project. It is expected that formal approval of these will be available before June. However, there has not been any noticeable progress on the issue of recognizing the Gujarat SPMU or the West Bengal SPMU as permanent secretariat of the respective SCZMAs. g. Agreements related to appointment of evaluation consultants. The first round of selection process did not yield any result. Thereafter SICOM has undertaken a second round to select an expert agency on a single-source basis (as per the approved Procurement Plan). It is expected that selection of such an agency will be completed soon, and the selected consultants will mobilized in about two months. Even a best case scenario will mean that the first evaluation report will be delayed by at least six months compared to what was anticipated at the MTR. 8

9 Aide Mémoire: Sixth Implementation Review Mission, January 30 February 20, 16. Component One - National ICZM Capacity Building (Bank Finance: US$ 67.8; Disbursed: US$ 12.4) a. Sub-component (1A) Hazard Mapping has progressed slowly since the MTR. Analysis of tidal data was completed including the additional work of collecting primary data of astronomical tides from 35 of the agreed 49 additional places (in 14 places this additional survey of astronomical tides was discontinued as it was found to be of marginal utility) by the Survey of India (SOI). Aerial photography contract, covering about 78,000km 2 of area was completed in December 2012; but it was found that 2 small patches the quality of the output was low due to cloud cover (although it might not affect the use of these outputs for hazard mapping); re-flying is planned as per the contract conditions, but is delayed due to delay in getting clearance from the Ministry of Defense. Contracts for digital photogrammetry have progressed slowly, and SOI has been requested by the SICOM GC to ensure that the following three milestones are met: (i) work of pilot areas by each of the three contractors should be completed by March, (ii) final output of hazard mapping should be available by June for the 3 areas where Gujarat, Odisha and West Bengal have to prepare ICZM Plans, this will also mean that erosion mapping by NCSCM for such areas should be concluded and available to the SOI before May ; and (iii) all outputs for the entire country should be completed by the contractors by June The work of erosion mapping by NCSCM has started, and it is agreed that NCSCM will complete the work for the entire country by September. b. Sub-component (1B) Identification and mapping of three ecologically sensitive areas (ESAs) such as Dandi in Gujarat and Vedaranyam in Tamil Nadu has been completed; mapping of the third, the Vembanad Lake in Kerala has started. Some planned work and community participation activities at Dandi and Vedaranyam is complete. i. Plan preparation for the Dandi area is now delayed by at least 6 months compared to what was estimated at the MTR (September 2013); and this will require additional focus of SICOM and Gujarat Ecological Commission. ii. Tasks for the Vedaranyam ESA is now progressing very well; and are on schedule to be completed by June. However, the expansion of the activities and consequent enhancement of funding proposed by the PEA is yet to be accepted by SICOM. iii. There was no progress with respect to the mapping of the Vembanad ESA since the Fourth Implementation Support Mission (and the MTR). Given this delay, it is likely that neither preparation of any management plan nor implementation of any part of the management plan will be possible within the remaining project period. SICOM should make a clear decision if continuing with this activity (currently, only the mapping and baseline collection) will be worthwhile, or otherwise discontinue this activity. iv. The activities related to mapping ESAs for the entire country has now started by NCSCM. Methods and guidelines for mapping all types of ESAs were completed including onschedule expert consultations in September-October Two works related to mapping of turtle nesting sites, and mapping of bird nesting sites had been started. However, due to the issue of budget ceiling, the work of mapping the other ESAs has not started. A final schedule for delivery is yet to be finalized, and it is unlikely that the work for the entire country will now be completed before end (with a delay of at least 6 months compared to what was anticipated at the MTR). SICOM and NCSCM should strive to sign contracts with NGOs or other suitable alternative agencies by March, such that all contracts could aim to finish the requisite mapping of the remaining types of ESAs by September. c. Sub-component (1C) the entire work of mapping of coastal sediment cells and sub-cells is now completed. NCSCM and SICOM will now use this work to inform all consequent planning and knowledge activities in the project. 9

10 Aide Mémoire: Sixth Implementation Review Mission, January 30 February 20, d. Sub-component (1D) National Center for Sustainable Coastal Management (NCSCM) has been established, it already completed some significant activities, such as national shoreline assessment, mapping of sediment cells and sub-cells; but more significant activities remain. i. Major procurements, such as the contract for the NCSCM building and laboratories, are awarded and work has started. Similarly, a number of goods contracts have been awarded, and a few delivered. The remaining awards include a number of smaller packages for equipment (which are awaiting award), two packages for equipment to be procured through international competitive bidding, and the works contract for interiors and furnishing of the NCSCM building and laboratories. Overall, procurement is in a satisfactory status now. ii. The issue of the second batch of staffing is pending (although with the first batch of 35 staff and another 37 short-term staff are adequate at this moment to take forward the currently programmed research activities), and the recruitment process is not expected to start until the formal approval of NCSCM as the permanent body of GOI is received. However, recruitment of the head of the finance and administration wing, and the recruitment of the remaining division chairs are important, and the process should start immediately. iii. The in-house research programs for NCSCM earlier approved by the high powered research steering committee has now progressed substantially and it is expected that all these will be delivered finally between June December. The four research program earlier approved by the high powered research steering committee had not yet started yet due to lack of internal clarity at SICOM and NCSCM. Recently, the SICOM GC has now accepted that these research programs can start now, and NCSCM is expected to notify the relevant national partner institutes and transfer funds for such research to those institutes by March. It is also important for NCSCM to prepare a second set of research proposals and submit for approval of the high powered research steering committee by June. iv. As reported at the MTR, there was no progress related to setting up and operationalization of the National Centre for Marine Biodiversity. SICOM will decide by March if this subactivity is best deleted from the scope of the project. e. Sub-component (1E): a national capacity building plan was revised in November 2013, but is yet to be approved by the GC of SICOM. However, two small and discrete capacity building activities were organized in December It is now important that this revised capacity building plan is approved by GC at the earliest, and implementation SICOM should start by June. f. Sub-component (1F) Project management activities jostled with lack of clarity on several fronts. A senior technical specialist has joined as the additional project director. However, the augmentation of the communication cell, which is of great importance now, has not taken place. GC of SICOM advised that recruitment of other specialist positions at this late stage of the project is not going to be very useful, and the mission agreed. Overall, the project management has been less than adequate, especially in terms of guiding faster implementation. The lack of clarity at SICOM on the principles of project implementation (coupled with the fact that turnover of staff did not permit development of clear institutional memory), inability to prepare comprehensive documents for approval of SICOM has resulted in the following issues: (i) several SPMUs and national PEAs are now asked to withhold award of contracts as it is not clear how and when the increase over the initial base cost of the project will be approved; (ii) there are confusion about the intent and approval of the bid premium earlier accepted by the project; (iii) there is a confusion about whether cost ceiling is more important than achieving the project objectives and targets; (iv) there is a lingering discussion about whether the project is to be completed within the 2009 base cost approved, even if the basis of such a principle is not clearly refuted; (v) questions galore on approvals by earlier GC, and that of MoEF itself. While it is expected that all of these confusions and issues would be resolved once full, clear and comprehensive documentation is presented by SICOM to its GC, meanwhile precious time of two or 10

11 Aide Mémoire: Sixth Implementation Review Mission, January 30 February 20, three months have been wasted (and at SPMU and PEA levels, there could be higher consequent waste of time). g. The procurement cell continues to suffer from the lack of capacity. The contract of the procurement and financial management support consultancy was extended by six months, but clarity is lacking whether SICOM will like to continue with the same consultants or go for a new selection process. Selection process for a consultant to set up the human resources and staff performance tracking and evaluation system has been delayed by 6 months (and is expected to be awarded by early March ). Similarly, the process of selection of consultants to set up the real-time project monitoring system has also been delayed (by at least 6 months) and it is unlikely that this system can be launched before June (even if consultants are in place by early March ). Procurement of evaluation consultants is delayed by 6 more months (resulting in an overall delay of more than 18 months now); SICOM agreed to complete the selection process by March. 17. Component Two Piloting ICZM Approaches in Gujarat (Bank Finance: US$ 57.6; Disbursed: US$ 17.3): Implementation of all planned activities, except the marine resources conservation institute and oceanarium (MRCI) which is scheduled to be initiated during May-June, has started; and is satisfactory. Overall, all contracts to be awarded by December 2013 as per the MTR have either been awarded, or are ready for award (but could not be awarded due to the issue of cost ceiling to be resolved by SICOM). a. Sub-component (2A). The first round of selection process failed to identify consultants to support preparation of the ICZM Plan. A second round is ongoing and nearing completion (negotiations with the highest ranked consultants selected through a quality-based procedure). b. Sub-component (2B) Capacity building activities are progressing satisfactorily. Since the MTR, the several district level workshops for the judicial officers and district administration staff of the state were held and a large-scale program involving school children was initiated. c. Sub-component (2C) Priority investments are progressing well, especially the livelihood enhancement related activities. More than 10,000ha of mangrove have been planted. Verification of the areas planted was completed; and for further monitoring and evaluation an expert agency the Gujarat Institute of Desert Ecology has been selected. For livelihood improvement pilot investments, community mobilization is completed in 163 of the 164 targeted villages, and work is progressing well. The work of sewerage in Jamnagar under two contracts is 65% and 42% complete, and both contracts were extended up to June. However, contractors for the sewage treatment plant are delayed in their mobilization (owing to a protracted discussion by the contractors on the issue of performance bond, and SPMU and JMC are urged to take a final decision on this as soon as possible, or consider remedies under the contract). Bidding process for the MRCI is delayed by about 3 months (and as expected will not be concluded before March ). d. Sub-component (2D) Project management activities, including financial management and communication are progressing well. Contract period of the internal auditors was extended. SPMU is expected to select a new consultant for procurement and financial management support consultancy by March. 18. Component Three - Piloting ICZM Approaches in Odisha (Bank Finance US$ 38.3; Disbursed: US$12.2): This component, overall, has also progressed well, and the current achievements are highly satisfactory. All major procurement of works, goods and equipment are awarded (except the ones that cannot be awarded now due to the issue of cost ceiling and a final decision by SICOM). This is in spite of the delay caused by the cyclone Phailin (during and aftermath of which, works were slow for about 3 months). The assets created by the project did not suffer any major loss during the cyclone (and the repairs where needed will be covered by the current contracts without variation). The cyclone shelters constructed by the project, even if not complete, were used during the cyclone to provide shelter. a. Sub-component (3A): Further expert consultations were organized on the scope of the ICZM Plan. The SPMU has now drafted the terms of reference for plan preparation; and consultant selection 11

12 Aide Mémoire: Sixth Implementation Review Mission, January 30 February 20, process is to be initiated before March. Data from the regional coastal processes had been compiled at the SPMU, and some work of shoreline management sub-plan had been initiated. b. Sub-component (3B): The capacity building activities of the Chilika Development Authority are progressing very well. The Odisha State Pollution Control Board has continued with monitoring of sea water with the finalized protocols for sea water monitoring. The SPMU is now working efficiently as the secretariat of the state coastal zone management authority. c. Sub-component (3C) Priority investments are progressing satisfactorily, especially the livelihood enhancement related activities. Additional mangrove plantation had been undertaken with support from two non-government organizations and community groups. The contract for solid waste management work in Paradip is awaiting award (due to the issue of cost ceiling and bid premium) even as the issue of ownership of the landfill site has now been fully resolved by the Odisha High Court. Odisha State Disaster Management Authority progressed very well and works of all 14 cyclone shelters are nearing completion and handover to the community groups. All other works are progressing well. Looking at the success of installation of solar dryers, other agencies of state government are converging their schemes to create comprehensive facilities for the fisherpersons around the project-installed facilities. d. Sub-component (3D) Project management activities, including financial management and especially the communication and stakeholder engagement activities are progressing very well. SPMU has recruited professionals to fill gaps created by staff turnover. Contract period of the procurement and financial management support consultancy was extended. 19. Component Four - Piloting ICZM Approaches in West Bengal (Bank Finance US$ 58.3; Disbursed: US$ 7.3): This Component continues to be slow; and the lack of momentum noted during the MTR has not improved. At the MTR, there was doubt whether the contracts will be awarded in September 2013 (as was expected during the Fourth Implementation Support Mission), or even by December The SPMU requested extension of the deadline for awarding contracts up to March 31,, and this was agreed by SICOM and DEA. However, since the MTR only 5 of the 66 contracts (less than 10% by number) worth INR 24 crore (15% by value) were awarded or are ready for award. Therefore, 61 contracts (worth about INR145 crore) remain to be awarded (some of which do not yet have the regulatory CRZ clearances). For two contracts (value about INR 40 crore) bid are under evaluation, but other contracts (value about INR 107 crore) bid have not yet been advertised. It is therefore likely that such contracts can be awarded much later, and even if awarded, these contracts cannot be completed within the remaining project period. a. Sub-component (4A): No noticeable progress has been made since the MTR with respect to preparation of the ICZM Plan. It will be important for the SPMU to take decisions regarding: (i) the process of plan preparation and approval; (ii) scoping of the plan; (iii) terms of reference for supporting studies, so that the process for procurement of consultants to support preparation of ICZM plan could be initiated as early as possible. This ICZM plan is an important deliverable for the project, and has the highest risk of failing to deliver among all project activities. b. Sub-component (4B) the capacity building activities of Calcutta University are nearly complete; the University had proposed expansion of the work, which was agreed at the MTR, but the SPMU has decided that such expansion was not necessary. Similarly, SPMU has decided that the knowledge activities at the Institute of Environmental Sciences and Wetland Management (which were to support preparation of ICZM Planning process and to build up in-house capacity of the State at the long-term) are not viable. During the annual fair at Sagar Island and the beach festival at Digha, there had been two communication campaigns. Notwithstanding these, the communication activities also slowed down. Since the MTR, there has not been any progress on the revision and/or implementation of the state level capacity building plan. Given that the SPMU is not inclined to implement the capacity-building and the knowledge activities, this sub-component is unlikely to achieve the planned objectives. 12

13 Aide Mémoire: Sixth Implementation Review Mission, January 30 February 20, c. Sub-component (4C) Since the MTR, the progress of the priority investments has not improved. The works contract for comprehensive upgrade of the marine aquarium at Digha has been awarded but the contract is not signed yet several weeks after award (and the formal plan for operation, maintenance and revenue generation for the improved facility is awaited). The work of electricity distribution at the Sagar Island was expected to be completed by March ; but seems very unlikely to be completed even in another 6 months. After a delay of more than 18 months, the variation order (which is a large variation order) is yet to be approved. Due to the delay of issuing the variation order, now coupled with the question of time extension, may lead to additional contract liabilities. The works of the storm water drainage at Digha has slowed down, and it is important for the SPMU and the Digha-Shankarpur Development Authority (DSDA) to ensure that the contract management issues are resolved faster and the contract is completed as per the contract milestones. Pace of implementation for the contract of the sewerage and sewage treatment plant at Digha has not improved. However, bids for the beachfront development were advertised, and it is likely that these will be awarded before March. The issues related to the proposed fish auction center (and its overall scope) has been partially resolved albeit with a delay of about six months: (i) after protracted discussions, SPMU dropped the idea of nominating the Fisheries Department as the PEA instead of the Fisheries Development Corporation; but the issue of the lack the expertise of the Fisheries Development Corporation; (ii) the SPMU and the PEA prepared a revised plan incorporating in the scope pollution management aspects; however, the issue of post-construction management and transfer of assets to the fisherpersons cooperative remains unaddressed; and there is no formal progress in terms of the capacity building activities or on the issue of certification of the entire facility; (iii) bids could be advertised and awarded if the proposed plan receives CRZ clearance in time. For the integrated ecotourism development in the Sagar Island, the PEA and the SPMU moved forward, in November-December 2013 after a delay of four months, in preparation of the asset management plan (even if the details of community ownership and transfer remain unclear). Once the proposals receive CRZ clearance, these bids can also be advertised and awarded. (following the World Bank s no-objection in December 201. The award of community contracts to support livelihood activities at the Sagar Island has moved slowly since the MTR (mainly as the SPMU decided first to curtail the scope of the activities and the targets, and later decided to retain the scope and the targets). Since the MTR, not a single community contract has been awarded (all packages pending at MTR, worth INR 26 crore, remains pending). Further, the activities related to the cyclone shelters, delayed by about 12 months at MTR have experienced further delays. The plans and designs prepared by the consultants have not been found acceptable by the World Bank, and the revised plans are awaited. Overall, it is unlikely that most of the contracts which are not yet advertised (worth INR 107 crore) are unlikely to be awarded before March. None of these contracts could be completed in less than months (given the two periods of monsoon that can be expected even if the contracts are awarded by March ). It is improbable that any of these contracts could be completed before closing date of the project (December 2015); and in that case, the SPMU may well drop these activities from the project, and concentrate on the contracts which are already awarded and could be awarded before March, so that these contracts are indeed completed within the remaining project period. d. Sub-component (4D) Project management activities has not experienced improvement since the MTR. Activities related to financial management have been adequate. SPMU has a stronger procurement cell now; SPMU has initiated recruitment of a few short-term contract staff, and recruitment process to address the cases of staff turnover. Activities of the communication cell and stakeholder engagement activities remain slow. E. Environmental Management 20. The implementation plans for all activities included environment management measures, and monitoring measures to ensure that the issues avoided during design do not recur. The monitoring and evaluation 13