UDRP Additional Financing P164058 Project Paper 02012019 636866424765772929

Public Disclosure Authorized
Document of
The World Bank
FOR OFFICIAL USE ONLY

Report No: PAD2678
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

PROJECT PAPER
ON A
RESTRUCTURING AND A PROPOSED ADDITIONAL LOAN
IN THE AMOUNT OF US$96 MILLION
TO THE
REPUBLIC OF INDIA
FOR A
Uttarakhand Disaster Recovery Project Additional Financing
January 28, 2019
Social, Urban, Rural And Resilience Global Practice

South Asia Region
This document has a restricted distribution and may be used by recipients only in the performance of their
official duties. Its contents may not otherwise be disclosed without World Bank authorization.
CURRENCY EQUIVALENTS
(Exchange Rate Effective November 30, 2018)

Currency Unit = Indian Rupee (INR)
INR 69.62 = US$1
US$1.38 = SDR 1
FISCAL YEAR
April 1 – March 31
Regional Vice President: Hartwig Schafer

Country Director: Junaid Kamal Ahmad
Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez
Practice Manager: Christoph Pusch
Task Team Leader(s): Ignacio M. Urrutia Duarte, Deepak Singh
ABBREVIATIONS AND ACRONYMS
AF Additional Financing
CERC Contingency Emergency Response Component
CPF Country Partnership Framework
DRM Disaster Risk Management
DSS Decision Support System
ESMF Environmental and Social Management Framework
GoUK Government of Uttarakhand
IBRD International Bank for Reconstruction and Development
IDA International Development Association
IP Implementation Progress
PDO Project Development Objective
PIU Project Implementation Unit
PP Parent Project
PMU Project Management Unit
REOI Request for Expressions of Interest
PWD Public Works Department
SGDP State Gross Domestic Product
STEP Systematic Tracking of Exchanges in Procurement
UDRP Uttarakhand Disaster Recovery Project
USAC Uttarakhand Space Applications Center
USDMA Uttarakhand State Disaster Management Authority
The World Bank
Uttarakhand Disaster Recovery Project Additional Financing (P164058)
BASIC INFORMATION – PARENT (Uttarakhand Disaster Recovery Project - P146653)
Country Product Line Team Leader(s)

India IBRD/IDA Ignacio M. Urrutia Duarte
Project ID Financing Instrument Resp CC Req CC Practice Area (Lead)

P146653 Investment Project GSU18 (9364) SACIN (347) Social, Urban, Rural and
Financing Resilience Global Practice
Implementing Agency: Uttarakhand State Disaster Management Authority, Government of Uttarakhand

ADD_FIN_TBL1
Is this a regionally tagged
project?
Bank/IFC Collaboration
No
Original Environmental
Approval Date Closing Date Current EA Category
Assessment Category
25-Oct-2013 30-Jun-2019 Partial Assessment (B) Partial Assessment
(B)
Financing & Implementation Modalities Parent
[ ] Multiphase Programmatic Approach [MPA] [ ] Contingent Emergency Response Component (CERC)

[ ] Series of Projects (SOP) [ ] Fragile State(s)
[ ] Disbursement-Linked Indicators (DLIs) [ ] Small State(s)
[ ] Financial Intermediaries (FI) [ ] Fragile within a Non-fragile Country
[ ] Project-Based Guarantee [ ] Conflict

[ ] Deferred Drawdown [✓] Responding to Natural or Man-made disaster
[ ] Alternate Procurement Arrangements (APA)
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Development Objective(s)
To restore housing, rural connectivity and build resilience of communities in Uttarakhand and increase the technical
capacity of the State entities to respond promptly and effectively to an eligible crisis or emergency.
Ratings (from Parent ISR)

RATING_DRAFT_
NO
Implementation Latest ISR
22-Aug-2016 13-Jan-2017 18-Jul-2017 28-Dec-2017 26-Jun-2018 20-Dec-2018
Progress towards
achievement of S S S S S S
PDO
Overall
Implementation MS MS S S S S
Progress (IP)
Overall
Safeguards MS MS MS MS MS MS
Rating
Overall Risk M M M M M M
BASIC INFORMATION – ADDITIONAL FINANCING (Uttarakhand Disaster Recovery Project Additional Financing -
P164058)
ADDFIN_TABLE
Urgent Need or Capacity
Project ID Project Name Additional Financing Type
Constraints
P164058 Uttarakhand Disaster Scale Up No
Recovery Project
Additional Financing
Financing instrument Product line Approval Date
Investment Project IBRD/IDA 21-Feb-2019
Financing
Projected Date of Full Bank/IFC Collaboration
Disbursement
31-July-2022 No
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Is this a regionally tagged project?

No
Financing & Implementation Modalities Child
[ ] Series of Projects (SOP) [ ] Fragile State(s)
[ ] Disbursement-Linked Indicators (DLIs) [ ] Small State(s)
[ ] Financial Intermediaries (FI) [ ] Fragile within a Non-fragile Country
[ ] Project-Based Guarantee [ ] Conflict
[ ] Deferred Drawdown [ ] Responding to Natural or Man-made disaster
[ ] Alternate Procurement Arrangements (APA)
[ ] Contingent Emergency Response Component (CERC)
Disbursement Summary (from Parent ISR)
Net
Source of Funds Total Disbursed Remaining Balance Disbursed
Commitments
IBRD %
IDA 250.00 200.21 30.98 87 %
Grants %
PROJECT FINANCING DATA – ADDITIONAL FINANCING (Uttarakhand Disaster Recovery Project Additional
Financing - P164058)
PROJECT FINANCING DATA (US$, Millions)

SUMMARY -NewFi n1
SUMMARY (Total Financing)
Proposed Additional Total Proposed

Current Financing
Financing Financing
Total Project Cost 250.00 120.24 370.24
Total Financing 250.00 120.00 370.00
of which IBRD/IDA 250.00 96.00 346.00
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Financing Gap 0.00 0.24 0.24
DETAILS - Additional Financing

NewFinEnh1
World Bank Group Financing
International Bank for Reconstruction and Development (IBRD) 96.00

Non-World Bank Group Financing
Counterpart Funding 24.00

Local Govts. (Prov., District, City) of Borrowing Country 24.00
COMPLIANCE
Policy
Does the project depart from the CPF in content or in other significant respects?
[ ] Yes [ ✔ ] No
Does the project require any other Policy waiver(s)?

[ ] Yes [ ✔ ] No
INSTITUTIONAL DATA
Practice Area (Lead)

Social, Urban, Rural and Resilience Global Practice
Contributing Practice Areas
Climate Change and Disaster Screening

This operation has been screened for short and long-term climate change and disaster risks
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Gender Tag
Does the project plan to undertake any of the following?
a. Analysis to identify Project-relevant gaps between males and females, especially in light of country gaps identified
through SCD and CPF
Yes
b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment
Yes
c. Include Indicators in results framework to monitor outcomes from actions identified in (b)
Yes
PROJECT TEAM
Bank Staff
Name Role Specialization Unit
Team Leader (ADM
Ignacio M. Urrutia Duarte GSU18
Responsible)
Deepak Singh Team Leader Co-Task Team Leader GSU18
Procurement Specialist (ADM
Sangeeta Patel GGOPZ
Responsible)
Krishnamurthy Financial Management
Financial Management GGOIS
Sankaranarayanan Specialist (ADM Responsible)
Bokepalli Kanaka Durga Social Specialist (ADM
Social Development GSU06
Raja Responsible)
Environmental Specialist (ADM
Drona Raj Ghimire Environment GENSA
Responsible)
Alok Bhowmick Team Member Bridges GSU18
Anup Karanth Team Member DRM GSU18
Deepak Malik Team Member Operations GSU18
Heather Sophia Fernandes Team Member SACIN
Hyunjee Oh Team Member DRM & Climate Change GSU18
Keisuke Iyadomi Team Member Climate Change GSU18
Mark Zeydler-Zborowski Team Member Operations GSU18
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Mridula Singh Team Member Safeguards GSU06

Muthukumara S. Mani Team Member Economic Analysis SARCE
Peeyush Ramawtar
Team Member DRM GSU18
Sekhsaria
Prabir Joardar Team Member River Bank Protection GSU18
Victor Manuel Ordonez
Team Member WFACS
Conde
Vidya Mahesh Team Member SACIN
Extended Team
Name Title Organization Location
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INDIA
UTTARAKHAND DISASTER RECOVERY PROJECT ADDITIONAL FINANCING
TABLE OF CONTENTS
I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ........................................ 8

II. DESCRIPTION OF ADDITIONAL FINANCING .................................................................... 11
III. KEY RISKS ..................................................................................................................... 13
IV. APPRAISAL SUMMARY .................................................................................................. 13
V. WORLD BANK GRIEVANCE REDRESS .............................................................................. 19
VI. SUMMARY TABLE OF CHANGES .................................................................................... 21
VII. DETAILED CHANGE(S).................................................................................................... 21
VIII. RESULTS FRAMEWORK AND MONITORING ................................................................... 24
ANNEX I - ECONOMIC ANALYSIS........................................................................................... 31
ANNEX II - FINANCIAL MANAGEMENT .................................................................................. 36
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I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING
A. A. INTRODUCTION
1. This Project Paper seeks the approval of the Executive Directors to provide Additional Financing (AF) of US$96
million to India for the ongoing India Uttarakhand Disaster Recovery Project (UDRP, P146653, Cr. 5313 IN). The
original Credit of SDR163 million (US$250 million equivalent) was approved on October 25, 2013, and became
effective on February 7, 2014.
2. The proposed AF requested by the Government of India (GoI)1 will help finance a set of scaled-up activities that
will in turn further enhance the impact of the well-performing Parent Project (PP). The Project Development
Objective (PDO) and implementation arrangements will remain the same. The Results Framework will be
adjusted to reflect the proposed scaled-up activities under the additional credit. The closing date of the original
credit will remain June 30, 2019 and the proposed closing date of the AF is March 31, 2022. The original Project
is being restructured to ensure that both the original credit and the AF can be used to finance any activities
included in the newly expanded project scope.
B. B. BACKGROUND
Country Context
3. India continues to be the world’s fastest growing major economy. The economy has recovered after growth
dipped to 6.7 percent in FY17/18. It has accelerated in the last two quarters to reach 8.2 percent in Q1
FY18/2019 which was supported by a revival in industrial activity, strong private consumption, and a rise in
exports of goods and services. At the same time, the external situation has become less favorable. An increasing
trade deficit has led the current account deficit to widen (on the back of strong import demand, and higher oil
prices) from a benign 0.7 percent of GDP in FY16/17 to 1.9 percent in FY17/18. Meanwhile, external headwinds
- monetary policy ‘normalization’ in the US coupled with recent stress in some Emerging Market Economies-
have triggered portfolio outflows from April 2018 onwards, putting additional pressure on the balance of
payments. As a result, the nominal exchange rate has depreciated by about 12 percent since January 2018, and
foreign reserves have declined by over 4.2 percent (though remaining comfortable at about 9 months of
imports). Going forward, growth is projected to reach 7.3 percent in FY18/19 and to firm up thereafter at around
7.5 percent, primarily on account of robust private and public consumption expenditure, a rise in exports of
goods and services and a gradual increase in investments. However, the current account deficit is also projected
to remain elevated in FY18/19.
4. Since the 2000s, India has made remarkable progress in reducing absolute poverty. Between FY2011/12 and
2015, poverty declined from 21.6 to an estimated 13.4 percent at the international poverty line (2011 PPP
US$1.90 per person per day), continuing the earlier trend of robust reduction in poverty. Aided by robust
economic growth, more than 90 million people escaped extreme poverty and improved their living standards
during this period. Despite this success, poverty remains widespread in India. In 2015, with the latest estimates,
1
In its letter dated April 26, 2017, the Government of India requested an Additional Financing to scale up the rural
road connectivity and capacity building components of UDRP.
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176 million Indians were living in extreme poverty while 659 million, or half the population, were below the
higher poverty line commonly used for lower middle-income countries (2011 PPP US$3.20 per person per day).
Recent trends in the construction sector and rural wages, a major source of employment for the poorer
households, suggest that the pace of poverty eradication may have moderated.
5. India is prone to all major types of natural hazards including floods, cyclones, landslides, earthquakes,
heatwaves, and droughts. The estimated average annual loss from natural disasters in India is US$9.8 billion
(UNISDR GAR 2015). Recent examples of large scale disasters include Bihar Kosi Floods (2007), Uttarakhand
Floods and Cyclone Phailin (2013), Cyclone Hudhud (2014), and Srinagar Floods (2014). Recurrent floods occur
in the northern plains, northeast and southeast of the country. The severity and recurrence of these types of
extreme events are likely to be exacerbated due to climate change.
6. The GoI has made great strides in moving from a reactive emergency response to proactively implementing
disaster preparedness and risk reduction initiatives. In 2016, the country’s first ever National Disaster
Management Plan was launched, and the GoI hosted the Asian Ministerial Conference on Disaster Risk
Reduction which led to the signing of the “New Delhi Declaration; the Asia Regional Plan for the Implementation
of the Sendai Framework.”
Project Background
7. The proposed AF is part of the Bank’s response to support the GoI’s efforts after severe floods in the State of
Uttarakhand in June 2013. The flood occurred at the peak tourist season (the State is one of the most important
pilgrimage circuits in India), and affected more than 900,000 people. Over 4,000 lives were lost, 3,320 houses
were fully damaged, and about 900km of roads were affected. In addition, the flood had a significant impact on
livelihoods, tourism and public services.
8. The pace of recovery in the State has been exemplary and among the most successful in recent past. The
recovery has been supported by, among others, the GoI, the Asian Development Bank, civil society, donors, and
the Bank. In the five years and one month since the disaster, all eligible houses have been rebuilt, critical
connectivity and public services have been restored and improved. Importantly, the State’s disaster risk
management capacity has been strengthened along with the investment in long term resilience which
translated into enhanced policies and institutions.
9. The PDO is to “restore housing, rural connectivity and build resilience of communities in Uttarakhand and
increase the technical capacity of the state entities to respond promptly and effectively to an eligible crisis or
emergency.” There have been no changes to the PDO, design or scope since its approval. The components are:
Component 1: Resilient Infrastructure Reconstruction (US$31 million): to restore housing and access to public
services through rebuilding: (i) resilient permanent housing; and (ii) resilient public buildings.
Component 2: Rural Road Connectivity (US$155 million): to restore rural connectivity through the
reconstruction of damaged roads and bridges and improving the original designs to enhance their resilience.
Component 3: Technical Assistance and Capacity Building for Disaster Risk Management (US$38 million): to
enhance the capabilities of government entities in disaster risk management through studies and investments
in institutional capacity building.
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Component 4: Financing Disaster Response Expenses (US$12 million): to support the financing of eligible
expenses already incurred by the State during the immediate post-disaster response period.
Component 5: Implementation Support. (US$14 million)
Component 6: Contingency Emergency Response Component (CERC) (US$0 million)
Project Performance
10. Performance has been satisfactory. Over the life of the Project, 11 Implementation Support & Review (ISR)
missions have been conducted. The overall operation continues to perform well and the Project has been
consistently rated as Moderately Satisfactory or Satisfactory for progress towards the achievement of the PDO.
11. Under Component 1, 2,382 resilient permanent houses were completed (ahead of schedule) under an owner-
driven model, and 23 out of 24 planned public buildings have been completed. Under Component 2, over
1,340km of roads out of about 1,572km and 16 out of 25 bridges have been restored. Remaining works are
under implementation and are expected to be completed within the scheduled period.
12. Under Component 3: (i) The Uttarakhand State Disaster Management Authority (USDMA) is now operational
with initial staffing in place, which will be augmented with additional staffing, equipment and capacity which
are in process. Its establishment led to the reorganization and consolidation of existing agencies and functions;
(ii) the river morphology and slope stabilization studies led to the identification and design of tangible priority
investment opportunities being proposed for this AF; and (iii) the State Disaster Response Force (SDRF) capacity
was significantly strengthened and it is now providing critical search and rescue services in the State. Since its
inception in 2013, the SDRF has conducted over 250 operations rescuing over 3,500 people.
13. The latest ISR Mission (November 19 - 22, 2018) concluded that the Project remains relevant to contributing to
the State’s post-2013 floods recovery process, and its activities are progressing despite delays due to severe
weather in the recent monsoon season. The mission also confirmed satisfactory fiduciary compliance. As of
December 12, 2018, disbursement is 86 percent.
14. The Project's closing date was extended by 18 months from December 31, 2017 to June 30, 2019 to successfully
complete all project activities. The need for extension was due to: i) delays in procurement of infrastructure
given the need to redesign according to improved resilient standards; ii) slower than expected pace of
construction due to weather and other field conditions; and iii) delays in establishing capacity to take on the
studies under the technical assistance and capacity building component. These obstacles have been largely
resolved, and ongoing activities are on track to be completed by the Project’s closing date.
C. RATIONALE FOR ADDITIONAL FINANCING

15. Although the extent and pace of recovery has been significant, connectivity continues to be a challenge. In the
aftermath of the 2013 floods, the number of tourists visiting the State dropped from over 2.5 million in 2012 to
less than 350,000 in 2014. In 2016 and 2017, however, the numbers went back up significantly to 1.5 and over
2 million respectively. Most of them visit one or more of the four main temples in the State, located in remote
and difficult to access areas. Landslides and river bank erosion are common and continue to disrupt movement
and cause accidents, affecting the livelihood and access to services of the local community.
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16. The timing and quantity of precipitation is becoming increasingly unpredictable in Uttarakhand. These patterns
will have multi-dimensional effects on the State’s economy, affecting major sectors including the tourism
industry. Efforts to promote climate resilience in these key natural asset-based sectors will have important
longer-term effects on livelihoods. In addition, Uttarakhand also falls in seismic zones IV and V and frequently
experiences low intensity earthquakes.
17. Against this backdrop, AF is being requested to further support the post-disaster recovery by financing priority
investments based on the studies conducted under the PP. While the impacts of climate change in future
disasters remain uncertain, efforts to ensure that the State has additional capabilities and resilient
infrastructure to reduce the potential damages and more quickly recover from disasters will translate into
important beneficial ripple effects on the State’s economy and livelihoods in the long term. The proposed
activities will serve to increase the effectiveness and extent of the PP’s impact as well as its sustainability.
18. The Bank team considered the option to accommodate support through a new project. However, an AF was
preferred because: (i) additional activities are within the scope of the PP’s PDO and are a direct scale-up of
ongoing work; (ii) it will expedite the preparation process while maintaining the positive momentum of the
results achieved to date; and (iii) it will capitalize on the current effective implementation arrangements which
have generated satisfactory results.
D.
II. DESCRIPTION OF ADDITIONAL FINANCING
A. SCOPE OF THE ADDITIONAL FINANCING

19. The scope of the proposed AF constitutes a scale up of the PP’s activities which are:
a) Bridges, road protection, and river bank protection under Component 2 – Rural Road Connectivity:
i. Reconstruction of about 64 bridges that are damaged to the point of needing replacement,
or where the original bridge is no longer in use due to damage or total collapse;
ii. Road protection works to reduce the risk of landslides in about 15 selected critical slopes to
protect and improve connectivity; and
iii. River bank protection in about 05 critical stretches to reduce the risk of river bank erosion
and resulting loss of connectivity.
b) Training facility for SDRF under Component 3 – Technical Assistance and Capacity Building for
Disaster Risk Management: To finance a permanent physical training facility that will help impart
specialized trainings to SDRF personnel as well as police, firemen, and local communities to strengthen
the State’s disaster response capacity to respond to disasters, most of which are linked to climate
change. Specialized training will focus on the needs of the State’s priorities: collapsed structures,
medical first response, mountaineering and high altitude, and water search and rescue.
c) Component 5 – Implementation Support.
d) Component 6 – Contingent Emergency Response Component.
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20. In addition, the original credit is being restructured to ensure that both the original credit and the AF can
be used to finance any activities included in the newly expanded project scope, including the above
components and remaining works under Subcomponent 1.2. Resilient Public Buildings.
B. ADDITIONAL FINANCING PROJECT COST

21. The project cost by component is as follows:
Total IBRD IBRD
No Project Component Project Financing - Financing -
Cost m$ %
Subcomponent 1.2. Resilient Public Buildings
Component 2. Rural Road Connectivity
61.0 48.80
1 Bridges
16.0 12.80
Road protection
11.0 8.80
River bank protection 80%
Component 3. Technical Assistance and Capacity
2 Building for Disaster Risk Management
Training facility for SDRF 20.0 16.0
3 Component 5. Project Implementation Support 12.0 9.6
Component 6. Contingent Emergency Response
4 0.0 0.0 100%
Component (CERC)
Total 120.00 96.00 80%
C. LINKAGE TO THE COUNTRY PARTNERSHIP STRATEGY

22. The proposed project will contribute to achievement of the Country Partnership Framework (CPF, FY18-
22, 126667 -IN)’s “What” of Focus Area 1: Promoting Resource Efficient Growth by restoring rural
connectivity, building disaster resilience, ensuring asset sustainability and strengthening the state-level
capacity for disaster risk reduction and emergency preparedness. In addition, the proposed project will
apply two of the “Hows” of the CPF - strengthening public sector institutions and Lighthouse India. The
CPF specifically emphasizes India’s global leadership role in promoting disaster resilient infrastructure
development. Through the proposed scale-up of the PP’s activities under AF, WBG will continue to serve
as a model of how to take the state-capacity in disaster risk management to the next level and offer
lessons to other states that will be facing similar challenges in the future.
D. IMPLEMENTATION ARRANGEMENTS
23. The institutional capacity of the existing Project Management Unit (PMU), Project Implementation Units
(PIUs) and delivery mechanism established by the State with the Bank’s support have proven to be
increasingly effective. The institutional and implementation arrangements set up for PP will be
maintained for the AF and will continue to be responsible of fiduciary, safeguards and Monitoring &
Evaluation aspects of the AF under USDMA’s oversight under the Government of Uttarakhand (GoUK).
Additional staff is being recruited to enhance the capacity of the PIUs to manage the additional works.
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24. For implementation of the River Bank Protection work under Component 2, technical staff deputed from
the Irrigation Department will be working together within Public Works Department (PWD) PIU. In
addition, the Public Building PIU for PP’s Component 1 (Resilient Infrastructure Reconstruction) will serve
as the PIU for AF’s SDRF Training Facility under Component 3.
III. KEY RISKS
25. Based on the analysis using the Systematic Operations Risk-rating Tool (SORT), the proposed AF is rated
as Moderate. This factors in the supplementary nature of the proposed AF activities which are an
extension of the PP. Activities do not increase the PP’s technical complexity, existing implementation
arrangements are adequate, and there is strong demonstrated commitment by the State.
IV. APPRAISAL SUMMARY
A. Economic Analysis
26. The economic analysis focuses on how the project interventions would contribute towards reduced
damage from events such as floods and landslides resulting in increased tourism and other ancillary
economic benefits. The assumptions and detailed results of the cost benefit analysis are given in Annex
I. For the purposes of this analysis, investment costs of Components 2 and 3 were considered.
27. The current State Gross Domestic Product (SGDP) of Uttarakhand stands at US$35 billion in current prices
and the share of tourism is about 20 percent or US$7 billion. It is expected that the SGDP will grow at a
constant rate of 7 percent in the coming years but tourism growth rate will be higher owing to the
implementation of the new tourism policy and improved connectivity. Although agriculture contributes
to only around 10 percent to the SGDP, about 75 percent of the State’s population still depends on
agriculture. Over the years, substantial investments have been made by the GoUK through several
programs and projects to build social capital and on improved agriculture and livestock management.
However, frequent disasters such as landslides and flooding have eroded the income gains made by these
programs and projects. The project interventions will not only avert loss of crops and livestock from
landslides and floods, but improved connectivity will enhance transportation of agricultural products to
the respective markets which is often hindered by landslides and flooding.
28. If the avoided loss in tourism revenue, and the agricultural sector from the project interventions is 1
percent per annum, the project benefit cost ratio estimated will be 8.3 with an IRR of 61.5 percent
discounted over a 10-year period. In the limiting case, an avoided revenue loss of 0.12 percent will yield
a benefit cost ratio of 1.0 and an IRR of 12.3 percent. In other words, even if the project succeeds in
avoiding small damage to tourism and agriculture it could still be justified based on the benefit-cost
calculations. While a major event of the magnitude of the 2013 floods remains unique in terms of the
historic trends, it is to be expected that several smaller magnitude events have more or less become a
reality in Uttarakhand. Therefore, the Project interventions can be justified based on this analysis.
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Cost Benefit Analysis

Avoided cost (%) IRR (%) NPV BCR
1.0 61.5 760.1 8.3
0.12 12.3 1.8 1.0
B. Technical
29. The proposed road and river bank protection works under the rural connectivity component were
identified and designed through technical studies on river morphology and slope stabilization financed
under PP. The studies initially identified a long list of unstable slopes and erosion prone river banks. An
analysis was then carried out to prioritize those which presented the highest risk to local communities
including access to common facilities like religious places, schools, hospitals, etc. in the case of extreme
precipitation and floods.
30. Road protection works involve an optimal combination of techniques such as retaining walls, drainage,
geo-mesh, culverts, and other structural measures. Erosion protection works comprise retaining
structures and improved toe erosion protection works including toe wall, launching apron, etc. Designs
were based on detailed hydrological, morphological and geological investigations and designs aimed at:
minimizing the need of land and disruption of vegetation, cost-effectiveness, simplifying maintenance
needs, minimizing disruptions during construction, and building climate-resilience.
31. The bridges were identified during implementation of PP in locations where the original bridges were
destroyed or the existing bridges need to be replaced. Designs of the newly proposed bridges will
incorporate features to increase their seismic and climate resilience, which has been the practice in the
PP. These improved designs will prolong their lifespan to ensure continued access to rural areas
vulnerable to floods, landslides and other events which can be caused by irregular climatic conditions
such as erratic rainfalls.
32. The SDRF training facility aims at strengthening capacity of the recently established SDRF to provide
better search and rescue services. Continued specialized training is at the core of an effective force of
this nature. There is no training facility in India that provides the combination of specialized expertise
relevant for the Uttarakhand context, and SDRF currently relies on a combination of international
trainings and local alternatives with certain specialized domains inadequately addressed. The proposed
facility and campus will be able to provide comprehensive and continuous training to SDRF as well as
combined training with fire and police service, and local volunteers. It is expected that, once established,
the facility will be able to offer training to other similar forces in India and the region. Furthermore, the
proposed training facility for SDRF will be one of the first training campus of its kind in India and will serve
as an example for other states to emulate. The proposed SDRF facility will enable the State to meet the
current and future challenges of climate change.
C. Financial Management (FM)
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33. The implementing agencies for the AF and PP are the same. The PMU under USDMA would coordinate
with all other agencies for all project related FM requirements which is the existing arrangement for the
PP. Each implementing agency namely (PWD, Public Buildings, and CBDRM) would be managed by the
existing PIU at the head office and would coordinate with all divisions working under it for ensuring
proper accounting and reporting for the AF.
34. Performance in PP: The PP has been working well from FM perspective and has been providing both
interim financial reports and audit reports on a timely basis. Accounting systems are established for the
PP, which are working well and are up to date. The overall rating for the PP has been Moderately
Satisfactory or Satisfactory and they have systems to meet the Bank FM requirements.
35. Summary of FM arrangements for AF: Most of the FM systems being used for the PP would be extended
for the AF. A new budget head has been created and adequate provision has been made for the AF.
Through the budget head both state share of 20% and externally aided projects (EAP) share of 80% would
be provided by the Government. The current fund flow practice of transferring amounts from the budget
to the Personal Ledger Account (PLA) and then to the PMU bank account would be followed for the AF.
The accounting systems would be maintained in Tally accounting software and new books of account
would be maintained for the AF. Staffing is adequate and the Government has posted Financial
Controllers (FC) for the AF. Consolidated Interim Unaudited Financial Reports (IUFRs), would be
submitted by the PMU to the Bank on a half-yearly basis within 30 days from the end of the half year.
IUFRs would be used for reporting as well as financial monitoring. External audits would be conducted
by the state office of Comptroller & Auditor General (CAG) as it is being done for the PP while the current
internal auditor scope would be enhanced to cover the AF. There would be a single disbursement
category for the project, with 80% disbursement percentage.
36. FM risks and agreed actions: The FM risk rating for the project is currently rated as “Moderate” based
on the actual implementation done in the PP and the systems operationalized during the PP which are
working well.
D. Procurement
37. Procurement under AF will be carried out in accordance with the World Bank’s Procurement Regulations
for Borrowers for Goods, Works, Non-Consulting and Consulting Services dated July 1, 2016 (hereafter
referred to as “Regulations”). Under the proposed AF, all contracts (goods, works and services) are of
small value and procurement will be done through National Competitive Bidding procedures using the
Government e-procurement portal. For the consultancy services, the Request for Expressions of Interest
(REOI) will be open to international firms as well. The PP is already on the Systematic Tracking of
Exchanges in Procurement (STEP) and the procurement plan for AF will use the same portal.
38. Procurement risk assessment: Given that there will be no changes in the implementation arrangements,
the staff who are currently handling procurement for PP will be handling procurement of AF as well.
Therefore, procurement risk has been retained as Moderate with no change in prior review threshold.
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39. Project Procurement Strategy for Development (PPSD): According to the requirement of the
Regulations, a PPSD (short version) has been developed. In agreement with draft PPSD, all contract
packages for goods, works and services are of small value and there are adequate number of suppliers,
contractors and consultants in India. As per the draft PPSD, there are approximately 75 civil works
packages with the cost estimates ranging from US$300,000 to US$4.5 million and they will be contracted
out following the traditional way of contracting. The contractors are already aware of the Bank’s
procurement procedure and it is noted that there are an adequate number of contractors in the State to
handle such works. One package of contract (construction of SDRF training facility) may be done through
Design and Build. The draft PPSD has done market assessment and it was noted that there are firms who
have executed such works in India. To improve competition, during the bidding process for Design and
Build, a provision for formation of Joint Venture (JV) among the Builders and Design firms will be included
to promote competition. For the Consultancy Services, there are 4 packages with cost estimates ranging
from US$300,000 to 2.7 million. During the REOI stage, participation from foreign firms will be allowed
for packages estimated to cost US$800,000 and above. Based on the draft PPSD, the procurement plan
is prepared to set out the selection methods to be followed by the borrowers during project
implementation in the procurement of goods, works, non-consulting and consulting services. The
procurement plan for AF is available on STEP.
E. Social (including Safeguards)

40. The proposed AF takes up similar kind of works as those of the PP which required small parcels of land
for some of the project components. The PP did not cause any displacement or loss of livelihoods. The
PP has been consistently rated as MS for the last ten missions; there is scope for improvement with
regard to monitoring and documentation of implementation and AF is expected to improve on this. The
AF will take place within the original location/ Right of Way/ land disturbed due to the disaster. All
necessary land has been identified and no land acquisition is required as the required land is government
land and the process to transfer this land to project is on. The SDRF training facility will use government
land. Therefore, the AF will not have significant social impacts which will trigger additional safeguard
policies. The Safeguards category of the AF project is expected to remain the same category (B) as of the
PP. For this reason, the AF project triggers the same social safeguards as that of the PP, i.e., Involuntary
Resettlement. As that of PP, the AF is not dealing with forests or livelihoods or service delivery, because
of this it was considered the policy on Indigenous People is not triggered. However, STs, if present among
the PAPs, are given certain special privileges; they are considered as vulnerable and they will be given
preference in selection for any individual benefits under the project.
41. The PP has a robust Environmental and Social Management Framework (ESMF) including Resettlement
Policy Framework (RPF) which was adopted for all the sub-projects. The ESMF and RPF were revised and
updated to suit the AF keeping in mind: a) AF project activities; b) recent changes in the legislation; and
c) lessons learned during the PP implementation and monitoring. The updated and revised draft ESMF
and RPF are disclosed by the Project. The project has conducted a stakeholder consultation to finalize
the ESMF and RPF, incorporated appropriate feedback from consultation and disclosed both English and
Hindi versions of ESMF.
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42. The PP had adequate arrangements for social safeguards management, which were defined and agreed.
These include; a) social safeguards focal point in the PMU; b) social specialists in the Design and
Supervision Consultants’ teams; c) provisions for social safeguards monitoring in the project MIS; and d)
Half-Yearly Independent External Environmental and Social Audit of the sub-project implementation. The
same social safeguards implementation, supervision, monitoring and audit arrangements, as in PP, will
continue for the AF. In line with PP, the implementation, supervision, monitoring and audit of AF project
activities related to social safeguards will be managed and conducted as part of the overall project
implementation by PMU. The social safeguards focal point will be in charge of managing and coordinating
the implementation, supervision, monitoring and audit of the AF project’s social safeguards aspects and
act as an interface between the project, contractors, local authorities, and other stakeholders.
43. Gender: The female labor force participation rate in Uttarakhand (37%, 2012) is above the national
average (31%, 2012). However, over the past decade, more and more of the State’s women have
withdrawn from the labor force: from 69% in 1994 to 54% in 2005 and to 37% in 20122. According to the
International Labor Organization, over the past two decades, female employment participation in the
industry sector (construction, mining, quarrying, manufacturing, and public utilities) in India went up
from 12% (1997) to 18% (2017)3. However, the participation is still quite low. The construction industry
provides job opportunities to a large number of skilled and unskilled workers. The construction labor
force is generally recruited from villages by contractors who employ them for various projects. These
contractors are responsible for providing safe working conditions and accommodations for the workers.
Given that most women work as unskilled labor, they are often vulnerable and exploited at construction
sites. To make matters worse, women are also less recognized than male workers, receive lower pay, and
often prone to safety hazards and sexual harassment.
44. The PP has initiated sensitizing contractors to employ female workers and to provide them with
amenities as per law. As a result, this initiative has resulted in about 5% women workers in the PP
contracts. However, there is still much room for this number to improve in order to help increase
women’s labor force participation and reduce occupational segregation in alignment with Pillar 2 of the
WBG Gender Strategy – Removing constraints for more and better jobs.
45. The project will enforce contractors to fully comply with the pertinent Indian labor laws to ensure equal
pay between women and men and to provide adequate clean water supply, living, and sanitation to their
workforce during the course of the work. Considering the gender dimensions of how women and men
face different challenges in the same situation, contractors will provide: gender segregated living
quarters; gender segregated toilet and bathroom facilities; personal safety gears and equipment to
enhance the sense of security and safety of women, which will in turn increase the proportion of women
workers at construction sites. In parallel, the project will conduct trainings for contractors to prevent any
unequal treatment towards women in terms of employment opportunities.
2
http://documents.worldbank.org/curated/en/600141504250457271/pdf/119332-BRI-P157572-Uttarakhand-
Jobs.pdf
3
https://data.worldbank.org/indicator/SL.IND.EMPL.FE.ZS
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46. Women and children are 14 times more likely than men to die during a disaster4. Given the gender-based
vulnerabilities to disaster and men’s and women’s different roles in disaster risk reduction, management,
and response efforts, both women and men need to be part of the State’s emergency response training
activities. The PP’s Capacity Building for Disaster Risk Management (CBDRM) component has provided
support by strengthening the State’s Disaster Response Force (SDRF) to respond adequately and
effectively to emergency situations. SDRF comprises of volunteers below the age of 40 from key response
agencies including police, fire fighters, community members, etc. Out of all the community members
that were trained by SDRF, only about 5% of the trainees were women. Expanding women’s participation
in SDRF trainings will ultimately improve the entire State’s disaster response capacity and preparedness.
Therefore, the project will increase the number of women community member trainees by making
targeted promotion efforts to encourage more women to participate. Engaging more female participants
in these trainings will strengthen women’s adaptive capacity to cope with disaster events.
47. Additionally, given that women have different capacities, knowledge, perceptions, and needs in disaster
response, training modules/materials need to integrate gender perspectives. Therefore, the project will
develop gender-sensitive training modules/materials which will incorporate gender considerations in
search and rescue/disaster response. These modules/materials will be used for all trainees.
48. To track gender outcomes, three different indicators and targets have been considered. These are: 1)
percentage of women working at project construction sites (5% to 10%); 2) female percentage of SDRF
trainees (5% to 10%); and 3) development of gender-sensitive training modules/materials (0 to 1).
49. Citizen Engagement: The PP has Citizen Engagement arrangements during both planning and
implementation through a) consultations during design, where the beneficiary feedback is used for
design modifications, b) frequent consultations during implementation, where the feedback is used for
quality enhancement and c) grievance redress mechanism. This is planned to be improved in the AF with
more frequent targeted beneficiary feedback arrangements during design and implementation. Multiple
channels such as, a) oral, b) written, c) phone and d) web are available to citizens for providing feedback
and for the project to factor in the feedback for achieving and enhancing and project objectives. The AF
has arrangements for citizen engagement through a) transect walks and consultations during design and
implementation, b) regular and frequent field visits to all communities by cutting edge project staff, c) a
dedicated phone number displaced at all project sites through public information boards and project
literature and d) an easy to use web-based mobile app. The indicators include 1) Number of Consultations
for Citizen Feedback during design and implementation, and 2) Percentage of grievances received and
redressed.
F. Environment (including Safeguards)

50. The AF triggers the same safeguard policies as the PP. Implementation of the PP, as of now, has not
resulted in highly significant environmental issues/impacts, and such impacts are not anticipated from
the proposed AF. The potential environmental issues/impacts of the AF are related to the construction
4
Peterson, K., ‘Reaching Out to Women when Disaster Strikes’, White Paper, Soroptimist, 2007
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and/or rehabilitation of bridges5 on existing roads, stabilization of existing road slopes, river bank
protection works, and construction of SDRF building. The activities proposed under the AF will take place
largely within the right of way of existing roads and already disturbed land. Hence, it is unlikely that the
proposed AF will cause highly sensitive, irreversible, diverse, or unprecedented environmental impacts.
The main environmental issues/impacts anticipated include environmental health and safety (EHS) at
work sites; issues/impacts due to haphazard or inappropriate disposal of construction spoils/debris,
construction waste (e.g. wash water from concrete batching plant, bituminous materials, etc.), damage
or degradation of local community amenity (e.g. foot-trails, access to houses/village, tube-well/water-
pipes, etc.), dust generation, soil erosion and slope failures6 in subproject’s localities.
51. The contractor is likely to bring migrant workers for the construction, although their number is unlikely
to be significant in a subproject site. Engagement of the migrant workers may lead to adverse
environmental and social impacts including improper waste disposal & pollution, pressure on local
resources (water, forest, and burden on public infrastructure & services), social conflicts, risks of
communicable diseases, traffic accidents, etc. The environmental issues/impacts described above are
limited to the activity sites and their close vicinity, and can be mitigated through readily known/available
measures; and hence the AF is assessed to be Category B, as was the PP. The contract clauses, inter alia,
will include provisions to avoid/ minimize/ manage issues related to labor camps and migrant workers.
52. The client, to address the potential environmental safeguard issues, is updating the ESMF of the PP,
tailoring to the AF’s scope of works, internalizing the experiences of the PP, and changes in the country’s
safeguard requirements. The ESMF has been consulted with stakeholders, translated and disclosed. In
addition, environmental site screenings and environmental management plans for the first-year
subprojects have been prepared. Remaining environmental site screening and environmental and social
management plans will be prepared for all the subprojects/activities during implementation.
53. Arrangements for environmental safeguards supervision have been defined and agreed and are similar
to those applicable for social safeguards. The client will, inter alia, further strengthen environmental
safeguard support and supervision as well as independent environmental audit. The PIU will have an
environmental specialist for project level oversight. A supervision consultant team will comprise of
environmental specialist(s) for regular environmental supervision and support at sites. Contractors will
be required to prepare site plans for environmental management and implement mitigation measures.
V. WORLD BANK GRIEVANCE REDRESS
5
The bridges will not be providing access to virgin area because a road already exists on both sides of the river
/stream (the bridges were either damaged or significantly deteriorated or was not constructed before).
6
Due to drainage disruption or inappropriate location of drain-out falls or cutting of slopes or disposal of spoils,
etc.
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54. Communities and individuals who believe that they are adversely affected by a World Bank (WB)
supported project may submit complaints to existing project-level grievance redress mechanisms or the
WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed
in order to address project-related concerns. Project affected communities and individuals may submit
their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or
could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be
submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank
Management has been given an opportunity to respond. For information on how to submit complaints
to the World Bank’s corporate Grievance Redress Service (GRS), please visit
http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service.
For information on how to submit complaints to the World Bank Inspection Panel, please visit
www.inspectionpanel.org
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VI. SUMMARY TABLE OF CHANGES
Changed Not Changed

Results Framework ✔
Procurement ✔
Implementing Agency ✔
Project's Development Objectives ✔
Components and Cost ✔
Loan Closing Date(s) ✔
Cancellations Proposed ✔
Reallocation between Disbursement Categories ✔
Disbursements Arrangements ✔
Safeguard Policies Triggered ✔
EA category ✔
Legal Covenants ✔
Institutional Arrangements ✔
Financial Management ✔
APA Reliance ✔
VII. DETAILED CHANGE(S)
Expected Disbursements (in US$)

DISBURSTBL
Fiscal Year Annual Cumulative
2014 1,042,944.00 1,042,944.00
2015 3,678,816.00 4,721,760.00
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2016 4,593,120.00 9,314,880.00
2017 6,105,312.00 15,420,192.00
2018 8,812,704.00 24,232,896.00
2019 13,102,464.00 37,335,360.00

2020 17,448,576.00 54,783,936.00
2021 20,661,216.00 75,445,152.00
2022 17,916,576.00 93,361,728.00
SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT)

Risk Category Latest ISR Rating Current Rating
Political and Governance  Moderate  Moderate

Macroeconomic  Moderate  Moderate
Sector Strategies and Policies  Low  Low
Technical Design of Project or Program  Moderate  Moderate
Institutional Capacity for Implementation and  Moderate  Moderate
Sustainability
Fiduciary  Moderate  Moderate
Environment and Social  Moderate  Moderate
Stakeholders  Moderate  Moderate
Other
Overall  Moderate  Moderate
LEGAL COVENANTS2
LEGAL COVENANTS – Uttarakhand Disaster Recovery Project Additional Financing (P164058)

Sections and Description
Uttarakhand shall maintain: (i) the Core Committee; (ii) the High Powered Committee for Sanctions of Post Disaster
Reconstruction Works; (iii) the Project Management Unit (within USDMA); and (iv) the Project Implementation
Units (the line departments and agencies); and (iv) the District level Coordination Units.
Uttarakhand shall implement the Project in accordance with the Operations Manuals, the Safeguard Documents
(ESMF or mitigation plans derived therefrom) and the Governance and Accountability Action Plan.
Uttarakhand shall ensure that, prior to commencement of any civil works: (i) all relevant government
permits/clearances have been obtained, and/or any conditions imposed have been fulfilled/met; (ii) the respective
activities have been screened as per the ESMF and, whenever required the necessary Environment Management
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Plan, Resettlement Management Plan, Social Management Plans have been prepared and disclosed; and (iii) all
resettlement measures identified have been properly implemented (including full payment of any resettlement
compensation).
Uttarakhand shall submit to the Bank a compilation of the safeguards screening reports prepared by the line
department and agencies on Project activities.
Uttarakhand shall (i) maintain monitoring and evaluation protocols and record keeping procedures to supervise
and assess compliance with Safeguard Documents; and (ii) to report on quarterly basis on compliance with
Safeguard Documents.
Uttarakhand shall include compliance with the Safeguard Documents as part of the contractors’ obligations
pursuant to the bidding documents.
Uttarakhand shall establish and monthly update a procurement documentation and record keeping system with a
freely and publicly accessible database, showing updated procurement information (i.e. notices, bidding invitations,
request for proposals, awards, etc.).
Uttarakhand to maintain an mechanism for handling procurement complaints with a second tier appeal system and
complaint database providing free and public access for the submission of electronic claims.
To access funds under this component, the Recipient and the Project Implementing Entity must have
determined/declared that an eligible crisis or emergency has occurred, identified response activities and
expenditures, prepared and disclosed any required safeguard documents, identified and/or staffed a coordination
authority responsible for implementation, and prepared an operations manual.
Conditions
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VIII. RESULTS FRAMEWORK AND MONITORING
Results Framework
COUNTRY: India
Uttarakhand Disaster Recovery Project Additional Financing
Project Development Objective(s)
To restore housing, rural connectivity and build resilience of communities in Uttarakhand and increase the technical capacity of the State entities to respond promptly and
effectively to an eligible crisis or emergency.
Project Development Objective Indicators by Objectives/ Outcomes

RESULT_FRAME_T BL_ PD O
Indicator Name DLI Baseline End Target
To restore housing, rural connectivity and build resilience of communities in Uttarakhand ...
Targeted affected HHs with multi-hazard resilient housing

0.00 100.00
(Percentage)
Targeted affected villages with restored connectivity
(Percentage) 0.00 100.00
Depts. that make effective use of information generated by

0.00 7.00
USDMA (Number)
PDO Table SPACE
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Intermediate Results Indicators by Components

RESULT_FRAME_T BL_ IO
Resilient Infrastructure Reconstruction
Number of resilient houses reconstructed (Number) 0.00 2,500.00
Number of public buildings reconstructed. (Number) 0.00 26.00
Rural Road Connectivity
Village Roads/Other District roads restored (Kilometers) 0.00 3,600.00
Number of bridle bridges restored (Number) 0.00 140.00
Number of river bank protection works (Number) 0.00 5.00
Action: This indicator is New
Number of bridges restored (Number) 0.00 64.00
Number of road protection works (Number) 0.00 15.00
Percentage of women working at project construction sites

(Percentage) 5.00 10.00
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Technical Assistance and Capacity Building for Disaster Risk Management
Completion of river morphology study (Number) 0.00 1.00
Completion of slope stabilization study (Number) 0.00 1.00
Complete multi hazard assessment (Percentage) 0.00 100.00
Setting up of Decision Support Systems (DSS) (Number) 0.00 1.00
Installation of weather stations, river gauge stations and other

hydro-met recording and forecasting equipment (Percentage) 0.00 100.00
Purchase of sets of emergency search & rescue equipment

0.00 2.00
(Number)
Creation of GIS database and analytical tools in USAC
0.00 100.00
(Percentage)
SDRF Training Facility constructed and operational (Number) 0.00 1.00
Female percentage of SDRF trainees (Percentage) 5.00 10.00
Development of gender sensitive training modules/materials

0.00 1.00
(Number)
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Citizen Engagement and Safeguards (Action: This Component is New)
Consultations for Citizen Feedback during design and

0.00 12.00
implementation (Number)
Citizens in the project area providing feedback using oral,

written, phone and web media (Yes/No) Yes Yes
Percentage of Grievances registered related to delivery of project

0.00 100.00
benefits that are actually addressed (Percentage)
Contingency Emergency Response
Funds immediately available to respond to a major disaster

(Yes/No) No Yes
IO Table SPACE
Monitoring & Evaluation Plan: PDO Indicators Mapped
Methodology for Data Responsibility for Data

Indicator Name Definition/Description Frequency Datasource
Collection Collection
Targeted affected HHs with multi-hazard Targeted affected HHs are
PMU ME Reports
resilient housing 2,500 of the 3077 total
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affected HHs.
Exact no. of targeted
Field
Targeted affected villages with restored affected villages will be
PMU Reports/Progr Quarterly
connectivity determined in the first year
ess Reports
of implementation.
Field reports/
External
evaluation will
Depts. Targeted include assess ability
RD, PWD, Urban, Water of depts. to
Depts. that make effective use of PMU/USD
supply, Environment & make use of Quarterly
information generated by USDMA MA
Forests, Tourism and Civil generated
Aviation. information at
MTR and
closing of
project.
ME PDO Table SPACE
Monitoring & Evaluation Plan: Intermediate Results Indicators Mapped
Methodology for Data Responsibility for Data

Indicator Name Definition/Description Frequency Datasource
Collection Collection
Progress
Number of resilient houses reconstructed PIUs/PMU Quarterly
reports
Progress
Number of public buildings reconstructed. PIUs/PMU Quarterly
reports
Construction
Village Roads/Other District roads
PIUs/PMU works/Progres Quarterly
restored
s Reports
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Progress
Number of bridle bridges restored PIUs/PMU Quarterly
Reports
Number of river bank protection works
Number of bridges restored
Number of road protection works
Percentage of women working at project
construction sites
Progress
Completion of river morphology study PMU Quarterly
Reports
Progress
Completion of slope stabilization study PMU Quaterly
Reports
Progress
Complete multi hazard assessment PMU Quarterly
Reports
Setting up of Decision Support Systems Progress
PMU Quarterly
(DSS) Reports
Installation of weather stations, river
Progress
gauge stations and other hydro-met PMU Quarterly
Reports
recording and forecasting equipment
Purchase of sets of emergency search & Progress
PMU Quarterly
rescue equipment Reports
Creation of GIS database and analytical Progress
PMU Quarterly
tools in USAC Reports
SDRF Training Facility constructed and
operational
Female percentage of SDRF trainees
Development of gender sensitive training
modules/materials
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Consultations for Citizen Feedback during

design and implementation
Citizens in the project area providing
feedback using oral, written, phone and
web media
Percentage of Grievances registered
related to delivery of project benefits that
are actually addressed
Funds immediately available to respond Progress
PMU Annual
to a major disaster Reports
ME IO Table SPACE
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Annex I - ECONOMIC ANALYSIS

1. Uttarakhand has remained one of the fastest growing states in India despite its enormous
geographical constraints. This has been facilitated over the years by a rather conducive industrial
policy and generous tax benefits. The State Gross Domestic Product (SGDP) has increased at a
compound annual growth rate of 6.4 per cent during 2011-12 to 2016-17 (Figure 1). At current
prices, the SGDP of Uttarakhand is about US$35 billion in 2017-18. At 50 percent of the Gross
Value Added (GVA) the secondary sector dominates the economy, followed by tertiary sector at
38 percent and primary sector at 12 percent respectively (Figure 2). The dominance of the
secondary sector, especially manufacturing at 40 percent, stems from a wide range of benefits
historically offered by the state in terms of interest incentives, financial assistance, subsidies and
concessions. Among the tertiary sectors, tourism has been a major revenue earner for the state
accounting for 20-25 percent of SGDP. Both domestic and international tourist arrivals have been
increasing (Figure 3) and are projected to further increase in the coming years.7 The domestic
tourist visits are expected to increase by around 2.5 times in the next ten years. Foreign tourist
visits are expected to increase by around 2.0 times in the same period. The total tourist visits in
Uttarakhand are expected to reach around 67 million by 2026.
Figure 1: Growth rate of Uttarakhand Economy
9.00
8.00 7.00
7.00 8.47
Growth Rate
5.29 7.71
6.00 7.27
5.00
4.00
3.00 Growth Rate of
2.00 the Economy with
1.00 Base year 2011-12
0.00
2012-13 2013-14 2014-15 2015-16Q 2016-17PE
Year
7
Uttarakhand tourism draft policy 2017.
http://uttarakhandtourism.gov.in/sites/default/files/tenders/document/uttarakhand-tourism-draft-policy-
2017.pdf
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Figure 2: Share of Sectors in the State Economy, 2016-17
11.19
38.41
50.40
Primary Secondary Tertiary
Figure 3: Tourist arrivals in Uttarakhand (millions) - both domestic and international

35
30
25
20
15
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
2. Uttarakhand is also highly vulnerable to climate change and natural disasters. The state has
recently been badly affected by natural disasters, especially in the form of intense and prolonged
unseasonal rainfall, cloud bursts and Glacial Lake Outburst Flood (GLOF) in higher regions. This
often has led to rendering in debris loaded flash floods resulting in the erosion of hill slopes,
erosion of river banks and landslides blocking road networks. The most notable of these events
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occurred in June 2013, when cloud bursts and heavy to very heavy rainfall hit several parts of the
higher reaches of the Himalayas in the state. This unprecedented rainfall resulted in a sudden
increase in water levels giving rise to flash floods in the Mandakini, Alakananda, Bhagirathi and
other river basins and caused extensive landslides at various locations. The June 2013 event
caused huge disruptions in tourism as well as impacted most economic activities in the state
including agriculture, trade, transportation etc. (Table 1). The economic costs of disruption in
tourism alone is estimated at 8-9 percent of SGDP (PHD Chamber of Commerce of India Survey).
Table 1: Summary of Damages and Reconstruction Costs
Source: Joint Rapid Damage and Needs Assessment
3. Uttarakhand economy is at crossroads today. The recent introduction of the new nationwide Goods
and Services Tax (GST) implies that the state can no longer resort to offering tax benefits for industries
to locate in the state. Also, industries enjoying certain benefits may no longer be able to avail of those
benefits. For example, it was recently reported that more than 3,600 industries enjoying 100 percent
exemption on the central excise duty under the State Industrial Policy 2010 will now have to pay GST.
While some refund may become available in the future, the implications are not entirely clear.
Further, the level playing field created by GST may lead to certain industries to relocate to states with
better access and infrastructure connectivity. In other words, state will be at a disadvantage to keep
its manufacturing sector to contribute to the economy.
4. At the same time, the increased frequency and intensity of natural disasters has rendered the
infrastructure of the state rather fragile which is impacting tourism and trade across the state. There
has recently been an increase in cases of stretches of roads getting washed out either due to toe
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erosion, riverbank erosion or due to sliding from the slopes. River bank erosion also have inflicted
havoc on the human habitations in some of the major tourist destinations like Kedarnath, Badrinath
and Uttarkashi.
5. As Uttarakhand transitions from a manufacture driven economy to one that will be driven in the future
by hydropower, services sector including tourism and primary sector centered on horticulture and
floriculture, it is important for the state to create the necessary investor confidence by improving
connectivity steered by a climate resilient infrastructure. Although the extent and pace of recovery
after the 2013 floods has been exemplary, connectivity continues to be a challenge in the state. In the
aftermath of the 2013 floods, the number of tourists visiting the state dropped from over 2.5 million
in 2012 to less than 350,000 in 2014. In 2016 and 2017, however, the numbers went back up
significantly to 1.5 and over 2 million respectively. Landslides and river bank erosion are common and
continue to disrupt movement and cause accidents, affecting the livelihood and access to services of
the local community. During May 2017 about 13,500 tourists were stuck and 150 vehicles stranded in
one incident alone of landslide that occurred near Vishnuprayag.
6. In addition to tourism, agriculture is an important part of the economy. Although agriculture

contributes to only around 10 percent to the SGDP, about 75 percent of the State’s population still
depends on agriculture. Out of the total area, 14 percent is under some form of cultivation of which
more than 55 percent is rain-fed. The landholdings are also relatively small and scattered. The average
land holding is around 0.7 ha (divided into small holdings) in the hills and 1.8 ha in the plains. Over
the years, substantial investments have been made by the GoUK through several programs and
projects to build social capital and on improved agriculture and livestock management. However,
frequent disasters such as landslides and flooding have eroded the income gains made by these
programs and projects. It is estimated that close to 200,000 people engaged in agriculture,
horticulture and livestock management lost their livelihood as a result of the 2013 disaster. The direct
damages were mainly in the form of perished or lost livestock, un-harvested standing crops in the
field, damaged fishery ponds, and other machineries. The total losses of the agriculture sector was
estimated at US$27.80 million with the overall recovery costs estimated at US$5.4 million.
7. The main objective of the additional financing is to continue and enhance the State’s preparedness to
more effectively respond to future disasters. While the impacts of climate change in future disasters
remain uncertain, efforts to ensure that the State has additional capabilities and resilient
infrastructure to reduce the potential damages and more quickly recover will translate into important
beneficial effects on the State’s economy and livelihoods in the long term.
8. The economic analysis focuses therefore on how the project interventions would will contribute
towards reduced damage from events such as floods and landslides resulting in increased tourism,
avoid loss to the agricultural sector, and other ancillary economic benefits. For the purposes of this
analysis investment costs of components 2 and 3 were considered. The total component costs and
their annual breakdown is given in Table 2.
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Table 2: Project investment costs breakdown by component and year

Investment costs in million US$
2018 2019 2020 2021 Total
Bridges 8 22 10 3 43
Component 2 Road protection 5 10 3 2 20
River bank protection 5 18 5 2 30
Component 3 Training facility for SDRF 4 10 5 1 20
Total 22 60 23 8 113
9. The assumptions are given in Table 3 and the results of the cost benefit analysis in Table 4.
10. The current SGDP of Uttarakhand stands at US$35 billion in current prices and the share of tourism is
about 20 percent or US$ 7billion. It is expected that the SGDP will grow at a constant rate of 7 percent
in the coming years but tourism growth rate will be higher owing to the implementation of the new
tourism policy and improved connectivity. The share of agriculture in current SGDP is 10 percent and
based on the current trends the importance of agriculture in the SGDP is likely to decrease. However,
given the expected strategic shift away from industry in the state it is assumed that the agricultural
sector (mainly horticulture and floriculture) will grow at 2 percent per annum. The project
interventions will not only avert loss of crops and livestock from landslides and floods, but improved
connectivity will enhance transportation of agricultural products to the respective markets which is
often hindered by landslides and flooding.
11. Another ancillary benefit considered in this analysis is the expected avoided repair costs to the road
and other infrastructure because of the project investments. It is assumed that a one in fifty-year
disaster would have resulted in 25 percent of the project investments as additional repair costs. The
project benefit avoids this cost.
Table 3: Assumptions for benefit calculations

Assumptions Value
Annual GDP Growth rate 7%
Share of tourism in 2017 25% of SGDP
Tourism growth rate 2018 to 2020 7%
Share of agriculture in 2017 10% of SGDP
Agriculture growth rate 2018 to 2031 2%
Avoided cost to tourism + agriculture 0.12%
Avoided marginal repair costs 25% of Project investment
Probability of disaster (1 in 50 years) 2%
Expected avoided repair costs in US$ millions $0.6
Discount rate 12%
O&M 1%
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12. If the avoided loss in tourism revenue, and the agricultural sector from the project interventions is 1
percent per annum, the project benefit cost ratio estimated will be 8.3 with an IRR of 61.5 percent
discounted over a 10-year period. In the limiting case, an avoided revenue loss of 0.12 percent will
yield a benefit cost ratio of 1.0 and an IRR of 12.3 percent. In other words, even if the project succeeds
in avoiding small damage to tourism and agriculture it could still be justified based on the benefit-cost
calculations. While a major event of the magnitude of the 2013 floods remains unique in terms of the
historic trends, it is to be expected that a number of smaller magnitude events have more or less
become a reality in Uttarakhand. Therefore, the project interventions can be justified based on this
analysis.
Table 4: Cost Benefit Analysis

Avoided cost (%) IRR (%) NPV BCR
1.0 61.5 760.1 8.3
0.12 12.3 1.8 1.0
Annex II - FINANCIAL MANAGEMENT
1. Budgeting and fund flow: A new budget head has already been created for the project with budget
provision for this fiscal year. Through the budget head both state share of 20% and EAP share of
80% would be provided by the government. A personal ledger account (PLA) would be established
in the Treasury for USDMA-PMU in which the amount from budget would be transferred. USDMA-
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PMU would open a separate project bank account and would withdraw money from the state
treasury as per the work plan requirements. The PIUs would be having a separate bank account
at the HO level to which funds would be transferred by PMU based on action plan and needs. This
practice has been working well in the current project and the same process is being followed for
the AF. The PLA and the bank accounts have been operationalized.
Budget - PLA
USDMA-
PMU
Public
PWD&I-PIU USDMA-PIU
buildings-PIU
2. FM Staffing and capacity building: The USDMA-PMU and PIU accounts section would be headed by a
Finance Controller (from Finance Department) and supported by commerce graduates for maintaining
the project accounts. Currently there is good FM capacity, at PMU and PIU with a mix of government
staff and contractual staff. The existing FCs has been assigned to manage the AF project. PMU and PIU
would review the staff requirements based on project progress and hire staff as required.
3. Accounting system: As the fund flow is happening through Bank accounts, specific arrangements to
maintain the project accounts would be carried out. Since USDMA-PMU, would be the nodal agency,
the accounts would be maintained in TALLY, which would be used for accounting as well as generating
reports for the Bank. The USDMA would be required to maintain implementing agency wise total
releases and expenditure for consolidation and reporting. Each of the nodal PIU would also be
required to maintain the accounts in TALLY and report to the USDMA for accounting and reporting
purpose. Details of the component wise expenditure and advances given would be maintained by the
line departments and the executing offices. In case of field offices TALLY would be implemented as
being done in the current project through outsourcing. Monthly reconciliation of the expenditure with
the Bank account needs to be carried out by these offices. Most of the expenditure is goods, works,
services, and consultancies and calculation of payments/expenditure would be made as per the
established payments mechanism of the government. The above arrangements are same as the
systems for the ongoing project. For the ongoing project the accounting system has been established
and the project has established separate books of accounts for the AF project in Tally.
4. Report based disbursement: Interim unaudited financial reports (IUFR) based disbursement would be
used for reporting as well as financial monitoring. IUFR shall be submitted to the Bank on a half yearly
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basis within 30 days from the end of the half year. The IUFRs would disclose receipt and utilization of
project funds (both Bank share and counterpart contribution). IUFR would be based on project
accounts and would reflect the actual expenditure for the project components based on figures
reconciled with Bank. Any advances given by the project would be separately shown in the IUFRs.
IUFRs would provide contract wise payments and project progress in physical and financial terms. The
IUFR format has been developed and finalized during negotiations. In terms of disbursement, the
project would first spend from the budget and then claim reimbursement from the Bank. All
expenditures reported in the IUFRs would be subject to annual project audit. The IUFR would be
submitted by the USDMA-PMU after collating all project expenditure from other implementing
agencies.
5. External Audit: The annual audit of the Project Financial Statements (PFS) would be carried out by
state office of the CAG as per the terms of reference agreed with the Bank. All supporting records and
documents under the project would be subject to this audit. The PFS would summarize all receipts
and expenditures reported in the IUFRs. The annual audit report would consist of (i) annual audited
project financial statements (ii) audit opinion and (iii) management letter highlighting weaknesses, if
any, and identifying areas for improvement. The auditor will audit all implementing agencies under
the project and provide a consolidated report for the project. The annual project audit report and
accounts would be submitted to the Bank by September 30 each year. Any difference between the
expenditure reported in the IUFRs and those reported in the annual project audit reports would be
analyzed and expenditures that are confirmed by the Bank as ineligible for funding would need to be
refunded. After negotiation, the GOU and DEA would be required to formally send the request for
audit to the CAG. Following audit reports would be monitored in the Audit Reports Compliance System
(ARCS):
Implementing
Audit Auditors Due Date for Audit Submission
Agency
Project Financial 30th September (6 months after the end
PMU CAG
Statement of each fiscal year)
30th September (6 months after the end
DEA/ GOI Designated account CAG
of each fiscal year)
6. Internal audit: Internal audit would be an integral part of the project design and would cover all
activities under project. Internal audit would be carried out by the internal auditor (CA firm) who has
been already appointed by the project to carry out the audit of ongoing project. The Terms of
Reference (ToR) for the internal audit would cover review of aspects covering internal controls and
contract management. The audit reports along with the compliance would be shared with the Bank.
PMU would review all the audit reports and follow up on the action taken.
7. Internal Control: All financial controls applicable to routine GOU expenditures would also apply to the
expenditures under the project. All payments would be approved/ vetted in accordance with the
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schedule of powers of GOU. All project related receipts and payments/ withdrawals would be
reconciled with periodic Bank Statements.
8. Disclosure of information: Project would be required to disclose the following on the project website:
(a) Annual Project Audit report and (b) details of major contracts.
9. Adequacy of FM Arrangements: The FM risk rating for the project is currently rated as “Moderate”
based on the actual implementation done in the current project and the systems operationalized
during the current project which are working well.
10. Supervision plan: In the first year, supervision would be done on a half yearly or frequently as required
by the client to monitor the setting up of the accounting and reporting systems. In the first year, 2 to
3 weeks of FM involvement is expected.
11. Designated Advance (to be approved by DEA): A Designated Account (DA) would be maintained in the
Reserve Bank of India (RBI) for the project and would be operated by the Controller Aid, Accounts and
Audit (CAA&A) in accordance with the Bank’s operational policies. Disbursements would be made
based on IUFR. The project would submit withdrawal applications supported by IUFRs to the
Controller Aid, Accounts and Audit (CAA&A) in DEA for onward submission to Bank for
reimbursement. All expenditures reported in the IUFRs would be subject to confirmation/certification
by the annual audit reports. Any difference between the expenditure reported in the IUFRs and those
reported in the annual audit reports would be analyzed and those expenditures which are confirmed
by the Bank as being not eligible for funding, would be refunded.
12. Disbursement categories: There would be a single disbursement category for the project, with 80%
disbursement percentage.:
Amount of the Loan Percentage of Expenditures to

Category Allocated be financed
(expressed in US$) (inclusive of Taxes)
(1) Goods, works, non-
consulting services, consulting
services, Training and
Workshops and Incremental
95,760,000 80%
Operating Costs for sub-
Components 1.2 and
Components 2, 3 and 5 of the
Original Project (as amended)
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Amount of the Loan Percentage of Expenditures to

Category Allocated be financed
(expressed in US$) (inclusive of Taxes)
(2) Emergency Expenditures for
the CER Component (i.e.
0 100%
Component 6 of the Original
Project)
Amount payable pursuant to
Section 2.03 of this Agreement
(3) Front-end Fee 240,000
in accordance with Section 2.07
(b) of the General Conditions
Amount due pursuant to
(4) Interest Rate Cap or Interest
0 Section 4.05 (c) of the General
Rate Collar premium
Conditions
TOTAL AMOUNT 96,000,000
13. Retroactive financing: The project is planning to finance certain works/supplies/services under
retroactive financing. The project would provide the list of such expenses for scrutiny of the Bank
before these payments are agreed and paid. Following are the Bank rules for retroactive financing:
a. The activities financed are included in the project description;
b. The payments are for items procured in accordance with applicable Bank procurement
procedures;
c. Such payments do not exceed 20 percent of the loan amount;
d. Payments were made by the borrower not more than 12 months before the expected
date of Loan Agreement signing; and
e. Date after which payments may be made is agreed at appraisal, confirmed during
negotiations, and recorded in the Loan Agreement.
Page 40 of 40

UDRP Additional Financing P164058 Project Paper 02012019 636866424765772929

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Public Disclosure Authorized

FOR OFFICIAL USE ONLY

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

IN THE AMOUNT OF US$96 MILLION

January 28, 2019

Social, Urban, Rural And Resilience Global Practice

(Exchange Rate Effective November 30, 2018)

Regional Vice President: Hartwig Schafer

BASIC INFORMATION – PARENT (Uttarakhand Disaster Recovery Project - P146653)

Country Product Line Team Leader(s)

Project ID Financing Instrument Resp CC Req CC Practice Area (Lead)

Implementing Agency: Uttarakhand State Disaster Management Authority, Government of Uttarakhand

Financing & Implementation Modalities Parent

[ ] Multiphase Programmatic Approach [MPA] [ ] Contingent Emergency Response Component (CERC)

[ ] Disbursement-Linked Indicators (DLIs) [ ] Small State(s)

[ ] Financial Intermediaries (FI) [ ] Fragile within a Non-fragile Country

[ ] Project-Based Guarantee [ ] Conflict

Ratings (from Parent ISR)

Implementation Latest ISR

22-Aug-2016 13-Jan-2017 18-Jul-2017 28-Dec-2017 26-Jun-2018 20-Dec-2018

Is this a regionally tagged project?

Financing & Implementation Modalities Child

[ ] Series of Projects (SOP) [ ] Fragile State(s)

[ ] Disbursement-Linked Indicators (DLIs) [ ] Small State(s)

[ ] Financial Intermediaries (FI) [ ] Fragile within a Non-fragile Country

[ ] Project-Based Guarantee [ ] Conflict

[ ] Deferred Drawdown [ ] Responding to Natural or Man-made disaster

[ ] Alternate Procurement Arrangements (APA)

[ ] Contingent Emergency Response Component (CERC)

Disbursement Summary (from Parent ISR)

PROJECT FINANCING DATA (US$, Millions)

SUMMARY (Total Financing)

Proposed Additional Total Proposed

Total Financing 250.00 120.00 370.00

of which IBRD/IDA 250.00 96.00 346.00

Financing Gap 0.00 0.24 0.24

DETAILS - Additional Financing

World Bank Group Financing

International Bank for Reconstruction and Development (IBRD) 96.00

Counterpart Funding 24.00

Does the project require any other Policy waiver(s)?

Practice Area (Lead)

Contributing Practice Areas

Climate Change and Disaster Screening

Does the project plan to undertake any of the following?

Mridula Singh Team Member Safeguards GSU06

UTTARAKHAND DISASTER RECOVERY PROJECT ADDITIONAL FINANCING

I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ........................................ 8

I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING

C. RATIONALE FOR ADDITIONAL FINANCING

II. DESCRIPTION OF ADDITIONAL FINANCING

A. SCOPE OF THE ADDITIONAL FINANCING

B. ADDITIONAL FINANCING PROJECT COST

C. LINKAGE TO THE COUNTRY PARTNERSHIP STRATEGY

III. KEY RISKS

IV. APPRAISAL SUMMARY

Cost Benefit Analysis

C. Financial Management (FM)

E. Social (including Safeguards)

F. Environment (including Safeguards)

V. WORLD BANK GRIEVANCE REDRESS

VI. SUMMARY TABLE OF CHANGES