Jharkhand State Road Project-1 by Rodic Consultants

Project: Jharkhand State Road Project-1
Client: Road Construction Department (RCD)
Funding Agency: Asian Development Bank
Construction Supervision: RODIC Consultants

Rodic Consultants has emerged as a leader in the infrastructure consulting space with state-of-the-art engineering solutions, and a proven track record of timely completion of projects across sectors like highways, bridges, tunnels, railways, metros, hydropower, power & energy, urban & industrial development, water, environment, multi-modal transport etc.

Rodic was selected as Construction Supervision for the Jharkhand State Road Project-1 and help complete the project within the timeline and the allocated budget.

Jharkhand state lies along the main transport corridor connecting New Delhi and Kolkata. However, poor transport has constrained development in the state. Jharkhand needs to improve its road network significantly to reduce intra-state disparities and accelerate its economic growth.

Project Outputs

Output 1: Rehabilitated and improved state roads
The project aimed to rehabilitate and upgrade 311 km of state highways between Govindpur and Shahebganj to a two-lane standard of 7m wide. The improved road is the backbone of the north-eastern part of the state, which is one of the most backward areas in the country. The road connects to National Highway 2 and to the larger national highway network.

Output 2: Systems for improved project management
To enable smooth project operation, a project performance management system (PPMS) was developed and implemented in line with the development objectives of the government and ADB to monitor and evaluate the performance of the project in relation to its impact, outcome, and outputs. The following key performance indicators were monitored and evaluated:

• Financial and physical progress of the project
• Traffic analysis
• Tests and inspections
• Web-based project monitoring system
• Road safety and value engineering
• Social impact
• Environmental safeguards

The PPMS was developed by the Supervision Consultants; it included computerized financial management, management information, and quality assurance systems. PPMS was used to monitor all aspects of the project during construction and defect liability periods. It generated progress reports and safeguard monitoring reports. PPMS is still being used by the executing agency to monitor other projects.

Project Costs & Financing
Upon completion, the actual cost of civil works, which was the major component of the project cost, was $154.95 million — 9.72% lower in USD terms than the appraisal estimates of $171.63 million. The contingencies provision by ADB of USD 30.05 million was not utilized.

Project Schedule
During implementation and after substantial completion of the project, major design changes were carried out based on recommendations from a design review to further mitigate flooding, following safety audits and the recommendations of the Ministry of Environment and Forests for wildlife crossings.

These modifications had a substantial impact on the implementation schedule of the works, and was further affected by liquidity issues with the contractor, lack of materials, delays in obtaining clearances (forest and railway), and design changes for mitigating flooding risks in all the four contracts. The Supervision Consultants took several measures to mitigate the implementation delays.

Issues During Construction

• Aggressive bid with low rate quoted by contractors.
• Client handed over full stretch of site to the contractors, but workable areas were given piece by piece. The remaining stretches were affected by land acquisition issues, delays in receiving forest clearances, utility shifting, late approvals from the railways for overhead bridges (ROBs), late permission from Indian Oil Corporation of India (IOCL) for its pipelines, structure clearances, and design changes arising from safety audits.
• Redesign of about 70% road length as drainage layers were found below the HFL and the culverts were to be sunk to about 0.5 to 0.7 m below the stream bed level at most of the stretches.
• Introduction of new major structure and flyover for elephant crossing almost 3 years after commencement of work.
• Poor cash flow of contractors as they diverted funds from this project to another project of the company.

Actions Taken to Speed Up Progress

• Release retention money of contractors against bank guarantee.
• Interim Payment Certificate (IPC) clearance time reduced from contract time of 56 days to 07 days.
• Mobilization advance recovery time deferred for some period.
• Additional mobilization advance of 10% provided to contractors.
• Payments made to contractors in escrow account to prevent diversion of funds by contractors.
• Cost compensation provided to contractors for delays in handing over of full stretch within the agreed timeline.

As a result of these measures, the contractors completed the works by 15 December 2017.

Project Benefits & Relevance
Operation of the project roads led to improvements in:

• Access and mobility
• Transportation of agriculture-related products
• Trade and commerce
• Public health and quality of life, especially for the Santhal scheduled tribe.

The project is rated relevant both at appraisal and at completion as it was an integral part of India’s strategy for economic growth and poverty reduction. The project supported the government’s Eleventh Five Year Plan 2007–2012 and the Twelfth Five Year Plan 2012–2017, which laid stress on the importance of the pursuit of inclusive growth, promote education, agriculture, health, and social welfare.

Impact on Development
The project’s short-term impact on poverty reduction includes employment of poor people in road construction and the ensuing maintenance works. These opportunities increased their earnings, especially for people who are largely dependent on occasional and uncertain employment.

Over the long-term, the project led to greater access to markets and other economic centers, to better health and education facilities, expanded economic activities, thereby contributing towards poverty reduction. Together with improving connectivity of the rural areas, the project had the following impact:

• 2.3 times increase in family income in the project areas
• Reduced the number of families living below poverty line by 8.3%
• Increased the number of hotels, shops, and garages along the project roads by 3.4 times, thereby increasing employment opportunities

Effectiveness of the Project
The project is rated effective in achieving its outcome of improved mobility and accessibility as demonstrated by the following:

• Increase in the average growth rate of car volume to 9.35% against a target of 9%, goods vehicles to 7.5% against a 7% target, and buses to 4.83% against a 4% target
• Reduction in travel time by 44% compared to a target of 20–40%
• Decrease in overall travel time between Govindpur and Sahebganj to 5 hours 35 minutes compared to the baseline of 8–10 hours
• Reduction in vehicle operating costs by 32% for trucks compared to the 12–30% target, and 47% for buses against the 15–35% target

Economic Viability Analysis
To assess the efficiency of the project, its economic internal rate of return (EIRR) was re-evaluated using a methodology similar to that used by ADB during the project appraisal. The economic benefits were calculated by comparing the with- and without project scenarios. The primary economic benefits considered in the analysis were savings in vehicle operating costs and passenger travel time costs. Based on the analysis, the re-calculated EIRR for the project was 20.3%, higher than ADB’s threshold value of 12%, and only marginally lower than the 21.0% estimated during the appraisal. The project completion review therefore finds the project economically viable.

The EIRR was subjected to sensitivity analysis to test different scenarios of costs and benefits. The results indicated that, even under the most adverse scenario of a 15% increase in maintenance costs combined with a simultaneous 15% reduction in benefits, the EIRR is still 17.76%. This suggests that the project is economically robust for all possible scenarios.

Gender Equity
The availability of improved all-weather roads with safe connectivity and better transport services has benefited the women of Jharkhand considerably. Their increased mobility has improved their access to social services, better education, and health facilities. Women who are skilled in handcrafts such as toy-making, tailoring, and embroidery, are now better connected to local markets to sell their products.

Labor
To ensure all contractors observe the labor laws and regulations of the Government of India and the Government of Jharkhand, regulations such as occupational health, labor safety, prohibition of child labor, etc were included in the bidding documents.

The Supervision Consultants monitored the compliance with these regulations and found that the use of personal protective equipment during construction work and traffic safety management at several construction sites were inadequate. The Supervision Consultants then provided guidance to contractors to improve their practices. In line with the covenant, HIV awareness-raising programs were provided to construction workers at the project sites.

Road Safety
Road upgrading involves a higher risk of traffic accidents. To address this, the project incorporated road safety features including well-marked pedestrian crossings and signage. Before the works were completed, road safety audits were conducted for all four packages and the features recommended by the road safety audit reports were provided.

Upon completion, the project had improved 309.86 km of state highways, widening them to 7.0 m from 3.0–3.5 m. The International Roughness Index of the finished project’s road surface ranges from 2.29 to 2.76.

Environmental Safeguards
About 10% of the project roads traversed through environmentally sensitive areas, but their impacts were temporary and observed during construction. Major supervision and monitoring efforts were made to ensure the contractors’ compliance with the environmental management plans to mitigate impacts during construction.

Involuntary Resettlement
At appraisal, resettlement plans for the four subprojects were prepared following the government’s National Rehabilitation and Resettlement Policy 2007, the Jharkhand Resettlement and Rehabilitation Norms for ADB Project–2009, the Land Acquisition Act (1894), and ADB’s Involuntary Resettlement Policy (1995), and related Operations Manual on involuntary resettlement.

In 93% of all cases involving land, these impacts would affect less than 10% of the area of the plots. At completion, 1,862.23 acres (753.93 hectares) of land was acquired, including private, government, and forest lands. The amount of land acquisition and affected households increased significantly, arising from safety audits including elevating project roads to reduce flooding, forest and railway clearances.

Mitigating Adverse Impact on Indigenous People
The project road runs through a part of Jharkhand known as Santhal Pargana. All six project-affected districts have Santhal scheduled tribe populations. Considering the significant presence of scheduled tribes in the project area, detailed social assessments were undertaken to study the potentially differentiated impacts of the project on scheduled and nonscheduled tribe households. Provisions were incorporated in the entitlement matrix of the resettlement plans to mitigate project impacts on assets owned by scheduled tribe households.