World Bank Document - Mumbai Railway Vikas Corporation Ltd ...

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Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 54171-IN
Public Disclosure Authorized
Public Disclosure Authorized
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED LOAN
IN THE AMOUNT OF US$430 MILLION
TO THE
REPUBLIC OF INDIA
FOR A
MUMBAI URBAN TRANSPORT PROJECT – 2A
June 2, 2010
Public Disclosure Authorized
Sustainable Development Unit
India Country Management Unit
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 April 30, 2010)
Currency Unit = Indian Rupees
Rs. 44.42 = $1.0
FISCAL YEAR
April 1 – March 31
ABBREVIATIONS AND ACRONYMS
AC Alternating Current KV Kilovolt
ACA Additional Central Assistance m/s/s meters per second per second
ASCI Administrative Staff College of India MAA Memorandum and Articles of Association
CAG Comptroller and Auditor General MMR Mumbai Metropolitan Region
CGFA
Corporate Governance and Financial
Mumbai Metropolitan Region Development
MMRDA
Accountability
Authority
CPSU Central Public Sector Undertaking MOF Ministry of Finance
CR Central Railway MOR Ministry of Railways
CST Chhatrapati Shivaji Terminus Mumbai MOU Memorandum of Understanding
DC Direct Current MPC Metropolitan Planning Committee
DPE Department of Public Enterprises MRVC Mumbai Railway Vikas Corporation
EA Environment Assessment MUTP Mumbai Urban Transport Project
EMP Environmental Management Plan MUTP-2A Mumbai Urban Transport Project - 2A
EMU Electric Multiple Unit NCB National Competitive Bidding
FA&CAO Financial Advisor and Chief Account Officer PAD Project Appraisal Document
FM Financial Management PDO Project Development Objective
GAAP Governance and Accountability Plan PIO Public Information Officer
GHG Greenhouse Gas R&R Resettlement and Rehabilitation
GOI Government of India RAP Resettlement Action Plan
GOM Government of Maharashtra RDSO Research Design and Standards Organization
GPS Global Positioning System RSPM Respirable Particulate Matter
HIV Human Immunodeficiency Virus RTI Right to Information Act
ICB International Competitive Bidding SAO Senior Accounts Officer
ICF Integral Coach Factory SBDs Standard Bidding Documents
IGBT Insulated Gate Bipolar Transistor SMF Social Management Framework
IR Indian Railways tCO2e Ton CO 2 equivalent
ISO International Org for Standardization TSS Traction Sub-Stations
IT Information Technology WR Western Railway
IUFRs Interim Unaudited Financial Report
Vice President: Isabel M. Guerrero
Country Director: N. Roberto Zagha
Sector Manager: Michel Audigé
Task Team Leader: Hubert Nove-Josserand
ii

INDIA
Mumbai Urban Transport Project-2A
CONTENTS
Page
I. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1
A. Country and Sector Issues ................................................................................................... 1
B. Rationale for Bank involvement ......................................................................................... 2
C. Higher-Level Objectives to which the Project Contributes ................................................ 3
II. PROJECT DESCRIPTION ................................................................................................. 3
A. Lending Instrument ............................................................................................................. 3
B. Project Development Objective and Key Indicators ........................................................... 3
C. Project Components ............................................................................................................ 4
D. Alternatives Considered and Reasons for Rejection ........................................................... 7
III. IMPLEMENTATION ...................................................................................................... 8
A. Institutional and Implementation Arrangements ................................................................ 8
B. Monitoring and Evaluation of Outcomes/Results ............................................................... 9
C. Sustainability....................................................................................................................... 9
D. Critical Risks and Possible Controversial Aspects ........................................................... 10
E. Loan conditions and covenants ......................................................................................... 11
IV. APPRAISAL SUMMARY ............................................................................................. 12
A. Economic and financial analyses ...................................................................................... 12
B. Technical ........................................................................................................................... 13
C. Fiduciary ........................................................................................................................... 13
D. Social................................................................................................................................. 15
E. Environment ...................................................................................................................... 16
F. Safeguard policies ............................................................................................................. 17
G. Policy Exceptions and Readiness...................................................................................... 18
Annex 1: Country and Sector or Program Background ......................................................... 19
Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 31
iii

Annex 3: Results Framework and Monitoring ........................................................................ 33
Annex 4: Detailed Project Description ...................................................................................... 36
Annex 5: Project Costs ............................................................................................................... 42
Annex 6: Implementation Arrangements ................................................................................. 44
Annex 6A: Governance and Accountability Action Plan (GAAP)......................................... 49
Annex 6 B: Supervision Strategy Matrix .................................................................................. 57
Annex 7: Financial Management and Disbursement Arrangements ..................................... 59
Annex 8: Procurement Arrangements ...................................................................................... 75
Annex 9: Economic and Financial Analysis ............................................................................. 84
Annex 10: Safeguard Policy Issues ............................................................................................ 96
Annex 11: Project Preparation and Supervision ................................................................... 102
Annex 12: Documents in the Project File ............................................................................... 103
Annex 13: Statement of Loans and Credits ............................................................................ 104
Annex 14: Country at a Glance ............................................................................................... 108
Annex 15: Maps......................................................................................................................... 110
iv

INDIA
MUMBAI URBAN TRANSPORT PROJECT - 2A
PROJECT APPRAISAL DOCUMENT
SOUTH ASIA
SASDT
Date: June 2, 1010
Country Director: Roberto Zagha
Sector Manager/Director: Michel Audigé
Project ID: P113028
Lending Instrument: Specific Investment Loan
Team Leader: Hubert Nove-Josserand
Sectors: Railways (100%)
Themes: Other urban development (100%)
Environmental category: Partial Assessment
Project Financing Data
[X] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other:
For Loans/Credits/Others: None
Total Bank financing (US$m.): 430.00
Proposed terms: Standard IBRD terms with a maturity of 30 years and a grace period of five
years.
Financing Plan (US$m)
Source Local Foreign Total
Borrower 540.50 0.00 540.50
International Bank for Reconstruction and 276.20 153.80 430.00
Development
Financing Gap 0.00 0.00 0.00
Total: 816.70 153.80 970.50
Borrower:
Republic of India
India
Responsible Agency:
Mumbai Railway Vikas Corporation Limited
2nd Floor, Churchgate Station Building
Churchgate, Mumbai, India 400 020
Tel: (91-22) 2208-0015 Fax: (91-22) 2209-6972
md@mrvc.gov.in, commrvc@vsnl.net
v

Estimated disbursements (Bank FY/US$m)
FY 2010 2011 2012 2013 2014 2015
Annual 3 19 74 130 127 77
Cumulative 3 22 96 226 353 430
Project implementation period: Start January 31, 2010 End: June 15, 2015
Expected effectiveness date: September 15, 2010
Expected closing date: June 15, 2015
Does the project depart from the CAS in content or other significant respects
Ref. PAD I.C.
Does the project require any exceptions from Bank policies
Ref. PAD IV.G.
Have these been approved by Bank management
Is approval for any policy exception sought from the Board
Does the project include any critical risks rated “substantial” or “high”
Ref. PAD III.E.
Does the project meet the Regional criteria for readiness for implementation
Ref. PAD IV.G.
[ ]Yes [X ] No
[ ]Yes [X] No
[ ]Yes [ ] No
[ ]Yes [X] No
[ ]Yes [X] No
[ X ]Yes [ ] No
Project development objective Ref. PAD II.C., Technical Annex 3
To improve the passenger carrying capacity, operational efficiency, level of comfort of, and the
institutional capacity of entities involved in, the suburban rail system of Mumbai Metropolitan
area.
Project description Ref. PAD II.D., Technical Annex 4
Component 1: Rolling stock fleet increase with procurement of 864 EMU cars.
Component 2: Conversion of electric traction system from 1500V DC to 25kV AC on the
Central Railway, with signal and telecom system improvements.
Component 3: Maintenance facilities and stabling lines to accommodate the additional trains.
Component 4: Capacity Strengthening and Technical assistance.
Which safeguard policies are triggered, if any Ref. PAD IV.F., Technical Annex 10
Environmental Assessment (OP/BP 4.01)
Involuntary Resettlement (OP/BP 4.12)
Significant, non-standard conditions, if any, for:
Ref. PAD III.F.
Loan/credit effectiveness:
The Additional Conditions of Effectiveness consist of the following: the SFA and the MOU with
the ICF have been executed.
vi

I. STRATEGIC CONTEXT AND RATIONALE
A. Country and Sector Issues
1. India is on a high economic growth path. Its urban population has also been
increasing, faster than its total population, and urbanization in India is projected to reach 41
percent by 2030. Infrastructure development in most Indian cities is insufficient and is not
keeping pace with the increase in travel demand. As a direct consequence, congestion on roads
increases travel time as speeds decrease. Meeting the demand is also a challenge for the railways
across the country. The Mumbai Metropolitan Region (MMR) is one of the world’s largest cities,
with a population of 18 million as per the 2001 census. Within the next 25 years, the MMR is
projected to overtake Tokyo to become the largest city in the world, in a country having one of
the fastest growing economies. Mumbai, as India’s financial and commercial capital and its most
prominent gateway to the country, occupies the top position in terms of its contribution to the all-
India GDP.
2. The region faces enormous challenges, one of which is the acute inadequacy of its
transport infrastructure. The suburban rail system is the lifeline of Mumbai, carrying more than
half of all motorized trips. In 2007-08 an estimated 6.8 million passengers daily (2.5 billion trips
annually) travelled on the suburban railway. At peak hour the average frequency for train
services was a very reasonable 16 trains per hour. Because of its extensive reach across the
metropolitan region and its intensive use by the local population, commuters are subjected to one
of the most severe overcrowding conditions in the world, with a density of up to 16 people per
square meter in the coaches. In addition to overcrowding in the trains, trespassing on the rail
lines is a major cause of accidents, many of them fatal. Death of squatters and trespassers being
struck by a train and passengers falling off trains are a daily occurrence, with 10-12 fatalities per
day. Furthermore, the rapid pace of urbanization and probable acceleration of car ownership and
use in Mumbai present a threat to ambient air quality, already a major health issue in most Indian
cities. In Mumbai the main contributor to air pollution is the transport sector, so developing
suburban rail use contributes to the efforts being made, in India as well as in other countries, to
reduce greenhouse gas (GHG) emissions. The present traffic condition of rail commuters is
incompatible with the objectives of Mumbai to become a world-class city with acceptable levels
of comfort, convenience, safety and air quality.
3. In early 2000, the Government of Maharashtra state (GOM) and Indian Railways
(IR) launched preparation of the first Mumbai Urban Transport Project (MUTP-1) 1 , which has
been implemented since 2002 with the World Bank’s help and is still under way. By March
2010, 84 new twelve-car electric multiple units (EMU) trains had been put into service, 51 of
which were financed from the Bank loan and 33 were financed internally by IR. (Previously
rakes were all of nine cars.) This has reduced crowding in the system from 500 people per coach
ppdpk (persons in peak direction at peak) to 450, despite a net increase in passengers. It is
expected that once all additional 72 twelve-car rakes financed under that project are in service,
crowding will be further reduced to 350 ppdpk, i.e. 30 percent less than the original density --but
still twice the rated carrying capacity.
1 The on-going Mumbai Urban Transport Project, usually referred to as MUTP, is referred to in this document as
MUTP-1 to distinguish it from the Second Project.
1

4. As demand continues to grow, yet more capacity will be needed. A comprehensive
transport study for the Mumbai region, called TranSforM, carried out under MUTP-1,
recommended this as a priority, in recognition of suburban rail’s dominant role in the region’s
transport network. Suburban rail’s importance is reflected in the size of the planned investment –
Rs.315 billion ($7 billion) by 2031, the Region’s second largest investment after the metro.
5. The proposed Mumbai Urban Transport Project-2A (known and referred to in this
document as MUTP-2A) is part of this priority program for developing suburban rail. It will be
complemented by another domestically-funded project known as MUTP-2B, already approved
by the Government of India (GOI) and also part of the priority program, which will further
increase the transport capacity of the suburban rail system by adding tracks. MUTP-2B requires
land acquisition and its implementation will take longer than MUTP-2A.
B. Rationale for Bank involvement
6. In continuation of MUTP-1, the proposed increase in suburban rail capacity will
bring important local benefits, reducing commuting times and increasing comfort for a large
segment of Mumbai’s population, especially among its poor. The project will allow more
frequent services, cutting waiting time, while higher maximum speeds will cut trip time. The low
fare policy of the Mumbai suburban rail system makes this mode of transport cheaper than the
bus and particularly attractive to less affluent commuters.
7. As part of this second project, traction voltage will be upped from 1,500 V DC to
25 KV AC, reducing energy losses in distribution. The improved rolling stock supplied under
MUTP-2A will further reduce energy consumption, cutting it over all by about 30 percent
compared to the present system. This in turn will contribute to mitigating the climate change
threat originating from transport.
8. This second project will also continue the capacity building effort started by the
Bank team during first project. Throughout the implementation of MUTP-1 the project
implementation company, Mumbai Railway Vikas Corporation (MRVC) has gained requisite
expertise in managing a challenging suburban rail development project that required professional
expertise in technical disciplines, as well as in interagency coordination and communication.
This follow-on project will help MRVC in furthering its professional competency and assist it to
plan and design more complex projects involving multi-modal stations.
9. Building on the progress made under MUTP-1, the zonal railways, Central
Railway (CR) and Western Railway (WR), want to address remaining challenges, in particular to
reduce the high number of fatalities related to trespassing and to improve the environmental
management side of their operation. The successful partnership between GOM and IR for the
development of suburban rail services in the Mumbai Metropolitan Region has been recognized
by the railways. In its Vision 2020 strategic plan the Ministry of Railways wishes to develop this
type of partnership for suburban rail services across the country and make the management of
suburban operations more efficient. This will include addressing the issue of the growing
financial deficits of such services. Through specific studies as well as study tours, this MUTP-2A
project will help develop the analytical knowledge basis to address these challenges and set up
these organizational changes.
2

C. Higher-Level Objectives to which the Project Contributes
10. The proposed project is designed to support the Long-term Transportation Strategy for
the Mumbai metropolitan region (TranSforM), whose vision is “Transforming Mumbai into a
world class metropolis with a vibrant economy and globally comparable quality of life for its
citizens”. In addition, the project supports IR’s Vision 2020, which aims to remove bottlenecks
and augment capacity to match the growing transportation demand and provide comfort and
convenience in every activity.
11. The project supports the World Bank’s Country Strategy for India (FY2009-12), which
emphasizes rapid and inclusive growth, sustainable development, and improving government’s
effectiveness in delivering services. Continuation of the Bank’s involvement in India’s suburban
sector through MUTP-2A, with its mix of growth-oriented investments and capacity building,
will help India to develop a collaborative approach between the local governments and IR,
towards a more efficient suburban railway system, as befits a middle- income state.
12. The Bank is engaged in consultations with IR for developing a longer-term Plan 2030
that would address the challenges that the Railways face. These derive from India’s expected
continued rapid economic growth over the next two decades, the expected changes in the
expectation of customers, and the continuing transition to urban life. In parallel with other Bankfunded
activities such as the Dedicated Freight Corridor Project under preparation and nonlending
technical assistance activities (workshops and study tours), the MUTP-2A project will
support the preparation of this strategic plan as it applies to suburban areas, in particular through
a provision in the loan for further technical assistance.
13. The project supports environmentally friendly urban public transportation, which is
recommended in the Bank’s sector strategy: “Safe, Affordable and Clean Transport”. Rail is one
of the most energy-efficient modes of transportation and therefore a direct contributor to cutting
GHG emissions, which are widely held responsible for climate change. It even compares well to
other modes of public transport. Buses in India emit about 28 grams of CO 2 per passenger-km,
whereas railways are about 2.5 times more efficient, emitting only about ten grams. The project
will help promote the use of this more efficient and climate- friendly mode of public transport.
Within its design, the project will support activities that further cut GHG emissions, such as
regenerative braking for EMUs and conversion of the power supply from DC to AC. An
additional benefit is the local impact on public health from the reduction in pollutants.
II.
PROJECT DESCRIPTION
A. Lending Instrument
14. The lending instrument to be used for this project is an IBRD Specific Investment
Loan (SIL).
B. Project Development Objective and Key Indicators
15. The proposed project will build upon the progress made under the first Mumbai
Urban Transport Project and will further increase the capacity of the suburban rail system within
3

the Mumbai metropolitan region. The project’s development objective is to improve the
passenger carrying capacity, operational efficiency, level of comfort of, and the institutional
capacity of entities involved in, the suburban rail system of Mumbai Metropolitan area.
Accordingly its performance will be monitored through the following indicators:
(a) additional capacity in vehicle-km during peak hours,
(b) reduction in peak hour overcrowding,
(c) reduction in journey times,
(d) operational efficiency: reduction in energy consumption, and
(e) institutional strengthening: carrying out technical assistance and preparing action plans
C. Project Components
16. The project has four components. The first three lead to the introduction of
additional train services on Mumbai’s suburban rail network. The technical assistance
component intends to strengthen the institutional and managerial capacity of MRVC and IR.
Table 1 shows the project’s components and cost, as well as its financing. Its total cost is
estimated at US$970.5 million, and the proposed IBRD loan, at 44 percent of the total, will be
US$430 million.
Table 1. Summary of Project Components, Costs and Financing
(US$ million, including contingencies)
Project Component
IBRD
Loan
Counterpart
Funding
Total
Cost
Component 1
Rolling Stock Fleet Increase 355.7 303.9 659.6
Component 2
DC to AC Conversion 55.2 118.6 173.8
Component 3
EMU Maintenance Facilities and Stabling Lines 0 117.7 117.7
Component 4
Technical Assistance 14.4 0.2 14.6
Front-end Fee 1.075 - 1.075
Unallocated 3.7 - 3.7
Total Financing Sought 430.0 540.5 970.5
Note: Physical and price contingencies are all included
Component 1. EMU Rolling Stock Fleet Increase
17. Under the project 864 additional EMU cars will be procured. This will increase the
total fleet to around 3,124 cars. The Bank loan will finance the electrical equipment for the new
cars, to be manufactured at Chennai Integral Coach Factory (ICF), while counterpart funds will
cover the remaining costs of production. This continues the arrangement adopted under MUTP-
1. As the power supply will be converted from DC to AC before these cars enter service, they
4

will be designed and built for use on 25KV AC system only. This activity is expected to be
completed by 2014-15.
Component 2. Conversion of Power Supply from Direct Current to Alternating Current
(including Improvements to Signals and Telecoms)
18. Three sections of the MMR’s Central Railway network will be converted from
1,500V DC traction to 25KV AC. This activity comprises (i) modifying overhead catenaries, (ii)
installing power sub-stations, along with switching stations (iii) procuring catenary maintenance
equipment; and (iv) modifying signal and telecom systems. This investment is needed to allow
the operation of the increased fleet as a result of Component 1.
19. The conversion is planned to be completed by 2012-13. In addition to creating
capacity to run more trains, the conversion will cut transmission losses and reduce the need for
maintenance of power supply installations. Regeneration of electricity during braking is more
efficient under high-voltage systems, so this will add a third source of energy savings.
Component 3. EMU Maintenance Facilities and Stabling Lines
20. New stabling lines will be built to accommodate the additional trains supplied
under the project. The existing EMU maintenance depot at Kurla on the Central Railway and the
maintenance shed at Virar built under MUTP-1 will accommodate the new stabling lines. No
new car maintenance shed or overhaul workshop is planned under MUTP-2A. In total, 73 new
stabling lines will be built: 34 (including four extensions from 9-car to 12-car) on the Western
Railway and 39 on the Central Railway. They will be fully funded by the government.
Component 4. Capacity Strengthening and Technical Assistance
21. Strategic and tactical studies will be carried out, as well as capacity building and
training. This represents 1.5 percent of the total project cost.
22. The strategic studies will include: (i) preparation of a priority development
program for the Mumbai suburban rail services, consistent with the TranSforM Study and
including pre-feasibility studies; (ii) support to IR in the development of their long-term strategy
to implement Vision 2020, in particular for the suburban rail services; and (iii) a study to
improve the financial situation of the Mumbai suburban rail operation, mostly by maximizing
non fare-box revenues.
23. Tactical studies include the following: (i) a ticketing study aiming at establishing a
more efficient and user-friendly ticketing system for Mumbai’s suburban rail system; (ii) study
and design of an improved passenger information system for the system; (iii) a study to reduce
the number of accidents due to trespassing, and (iv) a study to identify specific improvements to
environmental practices within the operations of the Central and Western Railways.
24. Capacity building will include supply and installation of software for improved
power supply and operation simulation. Training will aim at reinforcing the professional
efficiency of MRVC officers on the basis of an approved training plan.
Lessons Learned and Reflected in the Project Design
5

25. The on-going MUTP-1 project has made significant progress towards achieving
its development objectives with a noted reduction in overcrowding in suburban trains and
operation of new buses of improved design. The MMR Development Authority (MMRDA) has
improved its capacity to manage resettlement and rehabilitation that is now implemented with
reasonable quality. But land acquisition and resettlement and rehabilitation are still slow, as is
road construction.
26. The design of MUTP-2A builds on the following key lessons learned from the
implementation of MUTP-1 and other transport operations in India.
27. Motivation, ownership, effective implementation planning and sustained followup
on the part of the client is an important factor in implementation success. MRVC, which
started off as a new entity has in course of implementing MUTP-1 developed management
experience, expertise in Bank-assisted operations and capacity to liaise with the several
departments and agencies of IR 2 , GOM, and other stakeholders for implementing the project’s
suburban rail component. This experience has given MRVC the required understanding and
confidence to implement a new externally-funded project on its own in coordination with other
institutions and agencies.
28. The project should be designed in a way that inter-agency coordination does not
become an obstacle to carrying out key activities. One of the key reasons explaining the slow
pace of MUTP-1’s implementation was the complex project design with ambitious
implementation arrangements, involving multiple implementing agencies without effective
coordination. Five project implementing agencies were involved, with MMRDA as the
coordinator. It would have benefitted from a clearer contractual co-ordination framework to
ensure effective progress. Long delays in project components such as station area improvement
schemes and road-over-bridges, requiring greater inter-agency coordination, forced the removal
of these sub-projects from MUTP-1 as part of a project restructuring. To minimize such delays
on account of weak co-operation and ineffective inter-agency coordination, MUTP-2A has been
designed as a simple but comprehensive project for enhancing the quality and magnitude of the
Mumbai suburban rail operations, through activities that will involve essentially IR agencies
coordinated by MRVC. Implementation arrangements for MUTP-2A have been planned in such
a way that progress will not be vulnerable to poor inter-agency coordination.
29. Project design should adequately focus on capacity building of the client,
especially in new areas, and leave space for implementation arrangements to evolve, instead of
being frozen in time, to achieve greater efficiency. The nature and significance of some major
resettlement difficulties were appreciated by the client during the process of implementation.
Through very active Bank involvement, MMRDA has gradually evolved a more sustainable and
2 Central Railway and Western Railway are two of the largest and busiest of the 16 zones of Indian Railways. Their
respective divisions, Mumbai Division of the Central Railway and Mumbai Central Division of the Western
Railway, are involved in this project. IR is a department owned and controlled by GOI, via MOR. IR manufactures
much of its rolling stock and heavy engineering components at its six manufacturing plants, called production units,
which are managed directly by the Ministry. Chennai ICF is one of these. Each of the six production units is headed
by a general manager, who reports directly to the Railways Board. The Research Design and Standards Organization
(RDSO) is a research and development organization under MOR, which functions as a technical adviser and
consultant to the Railways Board, the zonal railways, and the railway production units in respect of design and
standardization of railway equipment and problems related to railway construction, operation and maintenance.
6

consultative approach. It developed capacity for managing large-scale and complex resettlement
processes. The present project includes several studies that will help MRVC and IR strengthen
their capacity to address difficult and sensitive challenges, such as the safety of trespassers,
environmental management and financial sustainability.
30. Mechanisms for strengthening transparency, accountability, and good
governance should be planned upstream and integrated into the project design to enhance
implementation quality and outcomes. Successful implementation of social safeguards, the most
challenging issue in MUTP-1, was due to establishing effective institutional mechanisms. These
included an independent monitoring panel for third-party monitoring and a transparent and
accountable grievance redress mechanism for resolving complaints and disputes. Measures for
transparency, accountability, and good governance, including third-party monitoring and dispute
resolution, are incorporated in MUTP-2A as a part of the Governance and Accountability Plan.
31. Urban transport projects undertaken in diverse and challenging metropolitan
settings such as Mumbai involve complex political-economy issues. They need to be
anticipated and the project designed accordingly, so that the implementation trajectory
remains well within the reach of the implementing and funding agencies. Factors other than
inter-agency coordination that posed roadblocks in implementation of MUTP-1 included difficult
political economy issues, especially with regard to management of necessary land acquisition,
resettlement and rehabilitation (R&R). MUTP-2A has been carefully designed to avoid land
acquisition and R&R activities. Compared to MUTP-1, which required resettlement of some
19,000 project-affected households, MUTP-2A does not involve any land acquisition, and
squatter households required to be resettled may not exceed twenty.
D. Alternatives Considered and Reasons for Rejection
32. Type of World Bank financing: The possibility of treating the project as
additional financing for MUTP-1 instead of a separate project was discussed. However, the
activities planned for MUTP-2A may go beyond three years of the expected closing date of the
on-going loan, the limit allowed by Bank policy, so additional financing would not be possible.
Also, the additional financing option would be financially less advantageous for the Borrower. It
was agreed that MUTP-2A should be prepared as a separate project as initially stated.
33. Number of rakes included in the project: Initially the project design included the
procurement of only 60 12-car rakes, the maximum that could be used efficiently on the existing
infrastructure. However, simulation information provided by MRVC showed that it will be
possible to use 72 rakes efficiently on the infrastructure available at the end of MUTP-2A, and
the project has been adjusted to this higher value to further improve the system’s capacity.
34. Number and size of stabling lines: Initially a larger number of stabling lines were
considered to be installed under the project, but they were excluded to minimize land acquisition
and resettlement impacts. The project has been designed in a way that it requires no private land
acquisition and involves no resettlement activities.
7

III.
IMPLEMENTATION
A. Institutional and Implementation Arrangements
35. MUTP-2A will continue with the institutional arrangements put in place under
MUTP-1 that proved to be efficient for an effective partnership between the Government of
Maharashtra state and Indian Railways in carrying out the project. MRVC, incorporated under
the Companies Act, 1956, is a Public Sector Undertaking, limited by shares, of the Indian
government under IR. Owned almost equally by GOM and IR, MRVC is expected to coordinate
and implement development projects for the suburban rail system in Mumbai on behalf of GOM
and IR. MRVC will receive a fee called Directional and General (D&G) charges from GOM and
IR for its services under MUTP-2A.
36. MRVC is the project implementing agency for MUTP-2A and in that role is
accountable for satisfactory completion of all the project works. MMRDA, ICF, RDSO, WR and
CR are executing agencies. As the project implementing agency, MRVC, on behalf of GOM and
IR, is responsible for financing and procuring all the contracts financed by the loan, including the
rolling stock and power supply equipment, as well as for executing certain identified works in
the field, with due safeguards in consultation with the Zonal Railways. Memoranda of
understanding which incorporate insurance to respect the environmental management plan, time
line of works and activities to be carried out by the respective agencies, will be set up between
MRVC and the executing agencies.
37. GOM and IR will share the investment costs of the Bank-financed project on a
50/50 basis, making GOM a key beneficiary and stakeholder of the project along with IR. The
project will benefit from this partnership and will seek ways to further deepen it through
technical assistance and capacity building. GOM and IR will ensure that its activities under the
Project are carried out in accordance with the provisions of the Implementation Manual, SMF,
and EMPs, and in accordance with the provisions of the Anti-Corruption Guidelines, and shall
ensure that the Implementation Manual, SMF, and EMPs are not materially revised, amended,
waived, or abrogated without the prior no objection of the Bank.
38. Flow of Funds and Financial Management: The borrower of the World Bank
loan will be India, who will make its proceeds available to MOR and GOM. One half of each
loan disbursement will be released to GOM as Additional Central Assistance under the standard
policy of external assistance to a State and to MOR through the General Budget. MOR and GOM
will provide loan and counterpart funds to MRVC. MRVC will be responsible for financial
management arrangements for the project. A recently completed assessment concluded that
MRVC has a financial management system adequate to account for and report on the project
resources and expenditures accurately. The responsibility for overall project financial
management will rest with MRVC’s Director (Finance), who will be responsible for activities
relating to compiling project budgets, project accounting, reporting to the Bank in a timely
manner, submitting applications to the Bank for direct payments, advances and replenishments
and periodical audits. The project financial management cell will remain adequately staffed
during the implementation of the project.
8

39. Safeguards Management: An environmental management plan (EMP) and a
social management framework (SMF) for the project have been prepared satisfactory to Bank
which are in line with those approved by the Bank for MUTP-1. It is expected that both MRVC
and CR will hire a project management consultant to assist them in implementing the project. In
addition, MRVC has obtained ISO 14001 certification for its environmental management system.
The project’s environmental management plans (EMP will form the basis on which its
performance will be measured. The management representative required by the ISO compliance
system will be the Deputy Chief Engineer. S/he will supervise the consultant hired by MRVC
and co-ordinate with the respective chief engineer of CR to confirm compliance with the relevant
provisions of the EMP. For the contracts to be executed through the participating railways, it has
been agreed that the relevant provisions from the Railway Contracts Manual will be enforced and
the necessary instructions to the contractors are to be issued. The project does not involve any
private land acquisition or resettlement impacts. However, MRVC has prepared a Social
Management Framework (SMF) Social management framework referred to in Chapter-3 of the
Project Implementation Manual in order to deal with any LA or R&R in case of any future
alterations in design or layout. MRVC has also reached an understanding with MMRDA that the
latter will implement any future resettlement activities as required on behalf of MRVC as per the
Bank approved SMF that is based on the Resettlement and Rehabilitation (R&R) policy for
MUTP-1. Adverse impacts relating to access, health, safety, and unequal wages are common to
most civil works and will be addressed by the concerned railways’ divisions as part of
construction management, which MRVC will monitor.
B. Monitoring and Evaluation of Outcomes/Results
40. The Results Framework shown in Annex 3 is the main instrument for monitoring
and evaluating achievement of the project developmental objective (PDO) and outcome
indicators. The project’s main outcome indicators, namely additional capacity, peak hour
overcrowding, journey times and energy consumption, will be generated by routine monitoring
by MRVC using ridership/occupancy surveys of commuters and operational statistics, compiled
in yearly reports. This will help in assessing the project’s contribution to enhancing the capacity,
efficiency and financial viability of MMR’s suburban rail transport system and to redirect it, if
necessary, to achieve the PDO. MRVC has provided baseline and end-of-project target values for
the outcome and most of the intermediate performance indicators.
C. Sustainability
41. Since the proposed project intends to reduce overcrowding, the financial
performance of the suburban rail operations is expected to deteriorate in the medium term as a
result, unless revenues increase slightly faster than the cost price index. However, Mumbai’s
suburban operations represent a comparatively small share of IR’s total business, so they have
only a minor impact on IR’s overall financial performance, which is far more dependent on
railway-wide tariff policies and continued strong growth in freight traffic. Therefore this
financial condition is not expected to impact significantly the sustainability of the operation and
maintenance of the suburban rail system.
42. MRVC has been given the main mandate to formulate and implement rail
infrastructure projects that require coordination between MOR and GOM. It is funded
9

accordingly by both administrations. However, this does not make MRVC a permanent structure
and MRVC will remain in existence only as long as it is judged necessary beyond the year 2014,
the end of the current MOU. An amendment to the MOU will be signed to ensure that MRVC
continues as implementing agency of MUTP-2A until its completion.
D. Critical Risks and Possible Controversial Aspects
Risks Risk Mitigation Measures Risk Rating with Mitigation Risk Rating
Operation-specific Risks
Technical Design Demand assessment risk: demand may
exceed the forecast, thereby reducing
the expected passenger comfort
benefits (reduced overcrowding). This
can happen because population or
Additional counts will be made during
project preparation and project
implementation to monitor passenger
loadings. The pace of implementation of
the Strategic Transport Plan may be
economic growth does not change as
forecast. It can also happen because
the fare does not rise at the same pace
as the cost escalation index. Based on
recent traffic counts, this risk is
moderate.
revised accordingly.
Moderate
Implementation
Capacity and
Sustainability
Financial
Management
About ten percent of electric motors
have failed in trains so far delivered
under MUTP-1, with a small impact
on operations as the Vendor has
replaced them, but with moderate
future risk.
Financial sustainability: continuation
of the present fare level trend will
increase the financial deficit of the
suburban operation, creating a
medium-term financial risk for IR.
Possibility of certain gaps in corporate
governance and financial
accountability and management
practices in MRVC. (MRVC is in the
process of implementing MUTP-1 and
is already familiar with Bank
procedures).
The Bank team will encourage IR to pay
more attention to qualification of critical
items of rolling stock procurement.
The impact of the project on IR’s financial
performance as a whole is considered small
and not liable to affect significantly the
sustainability of the suburban operations
and maintenance.
An assessment of corporate governance
and financial accountability (CGFA)
arrangements in MRVC has been
completed. The objective of the assessment
is to (i) benchmark current CGFA practices
in MRVC against industry standards and
good practices and (ii) agree on an action
plan with dates for implementing capacity
building measures that are identified.
Progress on the agreed action plan would
be monitored during project preparation
and prior to implementation.
Funds will flow to MRVC through budget
release, which will be replenished by the
Bank on the basis of quarterly interim
unaudited financial reports and expenditure
forecasts. Direct payment by the Bank to
the suppliers will be the likely option under
the project. The project will comprise only
a few large supply contracts, which will be
subject to prior review by the Bank.
Low
Low
Moderate
(subject to
progress of
implementati
on of agreed
CGFA action
plan
10

Procurement
Social and
Environmental
Safeguards
Use of the Bank’s revised standard
bidding documents may require an
initial familiarization period, which
may result in delays in finalizing
contract awards.
Since all procurement packages are
large values, there is likelihood of
delay in decision making, generally
for all packages that involve RDSO as
the design organization with mandate
to clear the specifications and
particularly for procurement of EMU
rolling stock, as clearances will be
required at the Railway Board/GOI
levels.
There are no substantial risks in this
project associated with social and
environmental impacts. All physical
activities are located within the
existing railway lands and involve no
land acquisition or resettlement
impacts. (a) However, stabling lines
proposed at Virar Scrap yard may
pose hazard risks for people living in
hutments outside the execution area
but near the railway racks.
(b) Any alteration the project design
may require LA and R&R measures.
Bank staff will guide MRVC staff in
under-standing the various changes and
their import, even during the period of
issue and receipt of bidding documents,
and clarify doubts at all stages, to avoid
long delays.
The team will discuss and agree on
arrangements that will be worked out with
RDSO and the Railway Board to
participate early on during the bidding and
later evaluation process of these
procurements.
(a) MRVC carried out a supplementary
social impact assessment survey in order to
reconfirm the nature and magnitude of
adverse impacts on a few households living
alongside the rail tracks leading to the
proposed stabling lines site at the Virar
Scrap Yard. The study confirmed that there
is no LA or R&R impacts. In order to
address the safety issues, Railways will
barricade the whole stretch from the rail
tracks and the stabling site.
(b) MRVC has prepared a SMF acceptable
to the Bank, based on the R&R Policy
approved for the ongoing MUTP-1 to deal
with any LA or R&R impacts caused due
to any alteration in design or outlay. In
continuation of the arrangements
established for MUTP-1, MRVC will carry
out any necessary LA through the state
government whereas R&R measures will
be implemented by MMRDA on behalf of
MRVC. Adverse impacts relating to
access, health, safety, and unequal wages
are common to most civil works and will
be addressed by the concerned railway
divisions as part of construction
management, which MRVC will monitor.
Low
Moderate
Moderate
Overall risk (including reputational risks)
Moderate
E. Loan conditions and covenants
43. Conditions of Effectiveness: Subsidiary financing agreement between MRVC and
GOM and the MOU between MRVC and the ICF have been executed.
11

IV.
APPRAISAL SUMMARY
A. Economic and financial analyses
44. Economic analysis: Since this project is a continuation of the earlier MUTP-1
project, the economic analysis for this project has been conducted comparing the proposed
additional project components as the ‘with’ alternative against the situation at the end of MUTP-
1 as the ‘without’ alternative.
45. The analysis has been carried out of the project’s incremental costs and benefits.
The economic analysis for the suburban rail component done at the stage of MUTP-1 has been
updated to current prices. The assumptions have been modified after comparing the results of the
earlier analysis with the actual outputs for traffic, average trip length, increase in other traffic
(passengers and freight), procurement of rakes and the cost of various components. The revised
assumptions were then used to add the proposed components (MUTP-2A) and their costs to
estimate the total benefits of the whole project. The difference in costs and benefits for MUTP-1,
‘with’ and ‘without’ MUTP-2A were computed to arrive at the economic rate of return for the
proposed component.
46. The evaluation shows that the project will have an economic rate of return of 17
percent and net present value, discounted to 2010, of US$262 million in 2008 prices at a 12
percent discount rate over a thirty-five-year evaluation period (2010 to 2045). The above results
indicate that the project is very viable economically and the Mumbai city will gain from the
better suburban system, the lifeline for commuter transport in the city. Detailed analysis is
provided in Annex 9.
47. Financial analysis: MRVC has made financial projections of the Mumbai
suburban system over a 35-year period, based on 2008-09, and related them to the overall
financial performance of IR. It took into account the impact of both the on-going MUTP-1
(assumed to be completed in 2010-11) and MUTP-2A (assumed to be completed in 2014-15). A
Base Case analysis was undertaken, as well as sensitivity analyses for the key assumptions. The
model was originally developed as part of the Financial and Institutional Study of the Mumbai
Suburban System in 1996 and has since been used regularly to forecast demand, earnings and
operating expenses, generally performing well.
48. In 2008-09, the Mumbai system represented an estimated 12 percent of IR’s
passenger traffic (measured in passenger-km) and about seven percent of IR’s total traffic
including freight. However, because of the very high average loads carried and the low average
fare, it only generated about 1.5 percent of IR’s total revenue and about two percent of its total
working expenses (excluding depreciation). Because MUTP-2A will reduce over-crowding and
thus require more assets and services to carry the same volume of traffic, its financial
performance is likely to deteriorate for at least the medium-term. However, its comparatively
small share of the total IR business means that it will have only a minor impact on the financial
performance of IR as a whole, which is far more dependent on railway-wide tariff policies and
continued strong growth in freight traffic. Detailed financial analysis is given in Annex 9.
12

B. Technical
49. During MUTP-2A it is expected that the same signaling and telecom technology
will be used as existed during MUTP-1, i.e. digital axle counters, both compatible with AC
traction. The technical specification for the EMU cars was the subject of extensive discussion
with IR during the preparation of MUTP-1. Two separate independent reviews were undertaken,
one commissioned by IR, the other by the Bank. These confirmed that the specifications were
appropriate for the particular conditions in Mumbai (very heavy passenger loadings and difficult
operating conditions during the monsoon season) and are in line with current international trends.
50. The new EMU coaches will be provided with (i) “state-of-the-art” 3-phase
“Insulated Gate Bipolar Transistor (IGBT) based” AC traction technology with improved energy
efficiency and reliability, (ii) maintenance-free, higher horse-power (30 percent) 3-phase AC
traction motors with Variable Voltage Variable Frequency control, (iii) a GPS-based
microprocessor-controlled passenger information system, (iv) higher acceleration and
deceleration of 0.54 m/s/s and 0.76 m/s/s respectively, with a maximum speed of 100 km/hr, (v)
a forced air ventilation system to maintain the difference in CO 2 level between the inside and
outside of the coach within 700 ppm as per international standards, (vi) air-conditioned driver’s
cab and provision of capacity for power supply for air conditioning of passenger areas of the
EMUs as a retrofit at a later date, and (vii) air springs in secondary suspension for better riding
quality.
C. Fiduciary
51. Financial management (FM): The design of the FM arrangements for the proposed
project builds on the following strength in the area of financial management of MUTP-1: a
budgeting, accounting and reporting system has been operational in the entity for the past several
years, which will be used for accounting and generating the required financial reports under
MUTP-2A. MRVC has prior experience in implementing Bank financed project (MUTP-1) and
its FM policies and procedures are being further strengthened for implementing MUTP-2A.
52. Disbursement arrangements: The project will be funded through budget releases to
MRVC by MOR and GOM as in the case of MUTP-1. Separate budget codes will be established
for the purpose by MRVC. The IBRD funds will flow to MOR (through the general budget) and
GOM (through Additional Central Assistance) from the GOI’s Office of Aid, Audit and
Accounts. The repayment of the loan will be done by GOI/GOM in equal parts and the surcharge
already levied on suburban commuters will contribute to this repayment fund. Of the total
surcharge collected 50 percent will be transferred to MOR by CR and WR and the remaining 50
percent will be transferred to GOM or adjusted against GOM receivables by MRVC. IBRD will
advance an amount equivalent to six months’ forecast expenditure, to be deposited in the
Designated Account that will be opened by the Ministry of Finance. Subsequent disbursements
by the Bank will be routed through the Designated Account. Disbursements by IBRD will be
made on the basis of the quarterly interim unaudited financial reports submitted by MRVC.
Supporting documentation, including completion reports, certifications, bills and other
documentation will be retained by MRVC and made available to the Bank during project
supervision. These will also be audited as a part of the annual audit of project financial
statements. Retroactive financing will be available under the project for payments made within
13

12 months prior to the expected date of the loan agreement and to be eligible, the activities
should be procured as per Bank guidelines on procurement.
53. External Audit: As per Section 619(2) of the Companies Act, 1956, MRVC’s
statutory auditors will be appointed by the Comptroller and Auditor General (CAG) to carry out
an independent audit and express their opinion as per the requirements of the Companies Act. In
addition, the CAG through its Principal Director of Commercial Audit may also conduct
supplementary audits under Section 619 (3)(b) of the Companies Act on the audited financial
statements. After the completion of the statutory audit and supplementary audit, the audited
accounts and auditors’ reports are adopted by MRVC’s Annual General Meeting. Statutory
audits of MRVC are on schedule. They do not contain any material observations. In addition to
the audits under the Companies Act, MRVC is subject to proprietary audit/ inspection by the
Office of the Principal Director of Commercial Audit.
54. Procurement: Procurement under the project will be carried out by MRVC. MOR
has implemented several Bank-funded projects aimed at modernizing India’s railways.
Generally the officers are aware of the procurement procedures followed in these projects.
MRVC will depute some representatives who will deal with this procurement, to the training
programs organized by Administrative Staff College of India, the National Institute of Financial
Management or other reputable institute for updating their knowledge on procurement.
55. MRVC has been delegated authority by IR to make procurement decisions for
contracts up to a value of Rs. 1,000 million (about US$20 million). All contracts except the one
for the procurement of EMUs electric equipments will be within this threshold. The value of the
EMU contract is expected to be over US$20 million. In this case, the bid evaluation will be
carried out by a committee of MRVC and RDSO and forwarded to Indian Railways Board for
review and approval of recommendations. MRVC and IR have agreed on a timetable for
completing the various stages of bid evaluation and award of contract, to ensure that the contract
is awarded within 150 days of bid opening.
56. The agency is staffed by qualified technical personnel and managers, well versed
in the project’s technical aspects. Some of the officials have undergone training in Bank
procurement and most of the officers have handled procurement under Bank-funded projects.
Considering that MRVC has implemented the on-going MUTP-1 successfully, fresh assessment
of the capacity of MRVC to carry out procurement for the project has not been considered
essential and not done formally. However, based on the experience of the staff engaged in the
first project and little change in the organizational structure for implementing the second project,
the Bank team concludes that the agency has adequate capacity to handle procurement under this
project. The procurement risk is assessed as ‘moderate’ in view of the large packages proposed
and considering the possibility of delays due to involvement of several agencies in the decisionmaking
process.
57. Procurement for the proposed project will be carried out in accordance with the
World Bank’s "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004
revised in October 2006; and "Guidelines: Selection and Employment of Consultants by World
Bank Borrowers" dated May 2004 revised in October 2006, and the provisions stipulated in the
loan agreement. The various items under different expenditure categories are described in
14

general in Annex 8. For each contract to be financed by the loan, the different procurement
methods or consultant selection methods, the need for pre-qualification, estimated costs, prior
review requirements, and time frame have been agreed between the Borrower and the Bank in
the Procurement Plan. This Plan will be updated at least annually or as required to reflect the
actual project implementation needs and improvements in institutional capacity.
D. Social
58. Potential social risks: The project with its current design and outlay involves no
involuntary resettlement impacts with the proposed activities of stabling lines, traction substations,
section and sub-section posts and maintenance facilities requiring no land acquisition.
The stabling lines will be built over about 28 ha of railway land, only along existing railway
tracks. All other facilities, where choice of location can be flexible, have been planned to be
developed on vacant plots available with the Railways. Thus, MRVC has carefully explored
various alternatives and has ensured that no private lands will need to be acquired, in order to
avoid and minimize adverse social impacts. A supplementary social impact survey was
undertaken by MRVC at Virar Scrap Yard to assess the likely impact on 38 structures located
close to railway tracks. The survey confirmed that no land acquisition or resettlement measure
was required.
59. In order to deal with any future involuntary resettlement impacts due to any
possible alteration in design or outlay, MRVC has prepared and adopted a social management
framework (SMF) detailed under the MUTP R&R Policy, which was adopted for the ongoing
MUTP-1 and is satisfactory to the Bank. The SMF is referred to in the Chapter-3 of the Project
Implementation Manual, which also provides that any necessary resettlement and rehabilitation
(R&R) measures will be carried out by MMRDA on behalf of MRVC. In such an event, MRVC
will prepare a specific resettlement action plan (RAP) based on the SMF, in a manner acceptable
and satisfactory to the Bank. This arrangement is a continuation of the arrangement established
for implementing R&R measures for the rail component of MUTP-1. Other social safeguard
risks relating to access, health, safety, and unequal wages will be monitored and mitigated as part
of construction management.
60. Assessment approach: In order to identify and assess the nature and magnitude of
social impacts, MRVC has carried out a social impact assessment (SIA) as part of the
Environment Assessment (EA). The EA Report, which includes a separate section on social
issues, has confirmed that the project will require no private land acquisition. A few railway
employees earlier living at the proposed site at Thane have shifted away after the project was
announced and some ten such railway employees living close to the proposed stabling lines at
Bhaindar North informed during EA that they will shift away before the commencement of the
work. As railway staff, they will be provided with staff quarters or monthly house rent allowance
enabling them to relocate away from this place. A supplementary social impact survey was
carried out at the proposed site for stabling lines at the Virar Scrap yard to assess the nature and
magnitude of impact on 38 structures located close to the railway tracks. The survey findings
were as follows: (a) Out of 38 structures, 37 were residential structures and one was a temple;
none of these are affected by the proposed stabling lines work; however, (b) 13 of these
structures are located alongside tracks and occupied by railway employees living there; the
15

families need to be shifted for safety reasons; and they will be provided with staff quarters or
receive monthly house rent allowance enabling them to relocate; c) the other structures including
a temple and residences for 18 squatter households and six tenants (in private houses) are beyond
the execution zone and will not need to be relocated; (d) the execution areas and the railway
tracks at this stretch will be barricaded for enhancing human safety.
61. At certain other proposed work sites, some lands required for the project have been
licensed out by the Railways to its employees for vegetable cultivation in order to prevent
encroachment. These licenses are issued on annual basis and will normally be allowed to run
their course before the work commences. In cases where this is not possible, the licenses will be
terminated with one month’s advance notice as per the license terms and conditions by the
Railways providing the licensees with sufficient time to harvest crops and salvage assets if any
before such licenses come to an end.
62. Resettlement instrument and measures: The results of the EA and supplementary
social impact survey carried out by MRVC confirmed that no land acquisition or R&R measures
are required for the project. In order to deal with any future involuntary resettlement impacts due
to any alteration in design or outlay, MRVC has prepared and adopted a Social Management
Framework (SMF). which is detailed under the R&R Policy, which was adopted for the ongoing
MUTP-1 and is satisfactory to the Bank, setting forth the rules and procedures for carrying out
any social, resettlement and rehabilitation activities under the Project, including identification,
assessment and mitigation of potential environmental and social impacts arising from the Project,
carrying out consultations, processing and redressing grievances, monitoring related impacts,
and, if required, limited resettlement and rehabilitation action plans and other development and
entitlement plans for people adversely affected as result of Project implementation.
63. Implementation arrangements for mitigation measures: The implementing
agency has fair experience in coordinating land acquisition and resettlement activities with the
state government. It was involved with the land acquisition for carrying out the rail component of
MUTP-1. MRVC has gained considerable exposure to the sensitiveness of urban resettlement
issues by way of coordinating with MMRDA in resettling a large number of project-affected
people from along the railway sub-projects of MUTP-1. This arrangement is a continuation of
the arrangement established for implementing R&R measures for the rail component of MUTP-
1. MRVC’s main task will be to coordinate efforts with MMRDA for carrying out the mitigation
measures, for management of which it has the required capacity.
64. Social safeguards in Project Implementation Manual: The current project design
involves no private land acquisition or resettlement impacts. MRVC has prepared a Project
Implementation Manual, the Chapter-3 of which refers to the social management framework
which will enable MRVC to address land acquisition and R&R issues in the event of any future
alteration in the project design or lay out.
E. Environment
65. Potential Environment Issues: The project activities under MUTP-2A are
expected to have only a few negative environmental impacts. These will mostly occur in areas
where new stabling lines or traction substations are proposed. Augmentation of workshops is
16

likely to have few adverse environmental impacts. The long-term impacts identified include tree
cutting at proposed sites, potential for damage to (only a few) mangroves in one location, and
potential traffic safety hazards due to re-routing in select locations. Additionally, temporary
impacts related with the construction stage are also expected on the following aspects: increased
air pollution and safety hazard due to increased traffic, especially close to sensitive receptors,
increased noise levels, potential impacts from improper handling of hazardous substances like
asbestos and oils, pollution of water courses close to sites, and provision for labor. In light of
these limited impacts, the project has been assigned Category B.
66. Assessment Approach: The environmental assessment has included review of the
relevant activities in MUTP-1, followed by site visits to potential sites under the project and onsite
discussions with stakeholders, including railway officials. This has been followed up by a
review of the contract documents for environmental management aspects. Prototype
environmental management plans have been prepared for activities that are common across sites.
Plans have then been modified to suit site conditions such as at Chinchpokli traction substation,
where handling asbestos is likely to be an important issue. A framework has been prepared to
assess and manage impacts in locations where sites may have to be changed due to unforeseen
circumstances. The resultant generic environmental management plan has been included in the
project’s Operations Manual.
67. Environmental Management: The experience gained during the preparation and
implementation of MUTP-1 has been advantageously used in establishing the current approach
to environmental management. Permissions for cutting/transplanting trees will be obtained
before work starts on site and the contractors will be required to obtain the required regulatory
clearances. Following the review of contract documents as part of the EA, modifications have
been agreed to mainstream environmental management measures in the contracts executed
through MRVC. For the contracts to be executed through the participating CR and WR, it has
been agreed that the relevant provisions from the Railway Contracts Manual are to be enforced
and the necessary instructions to the contractors are to be issued. Since MRVC has already
qualified organization-wide as an ISO 14001-compliant environmental management system,
handling of environmental measures is expected to be streamlined, on the basis of the EMPs
prepared under the project.
F. Safeguard policies
Safeguard Policies Triggered by the Project Yes No
Environmental Assessment (OP/BP 4.01) [X] [ ]
Natural Habitats (OP/BP 4.04) [ ] [X]
Pest Management (OP 4.09) [ ] [X]
Physical Cultural Resources (OP/BP 4.11) [ ] [X]
Involuntary Resettlement (OP/BP 4.12) [X] [ ]
Indigenous Peoples (OP/BP 4.10) [ ] [X]
Forests (OP/BP 4.36) [ ] [X]
Safety of Dams (OP/BP 4.37) [ ] [X]
Projects in Disputed Areas (OP/BP 7.60) [ ] [X]
Projects on International Waterways (OP/BP 7.50) [ ] [X]
17

Environmental Assessment (OP/BP/GP 4.01). The environmental category of the Project is B.
Disclosure. Consultations were held with local people during preparation of the environmental
and social assessments. Since the majority of stakeholders are railway employees, discussions
were also held with railway officials on the likely impacts, and how to handle these. The two
assessments, once finalized, will be disclosed on the MRVC website and copies of the summary
will also be available in Marathi for perusal in the local railways’ offices.
G. Policy Exceptions and Readiness
68. No policy exceptions are required. The project complies with the readiness filter for
transport projects in India. The first-year contracts and consultants are in advanced stages of
bidding.
18

Annex 1: Country and Sector or Program Background
INDIA: Mumbai Urban Transport Project-2A
Urbanization and Infrastructure Development in India
69. In recent years India’s GDP has grown rapidly, at an average pace of eight percent per
year and a peak of 9.7 percent in 2006-07. At the same time its inhabitants are moving from the
countryside to cities in large numbers. By 2030 more than 40 percent of India’s population will
be living in cities and towns, up from 28 percent today; the urban population, growing at three
percent per year, will have doubled from 286 million to 575 million. In India as elsewhere,
urbanization has been recognized as an important driver of economic growth, and cities now
contribute over 55 percent of the country’s GDP. 3
70. Infrastructure development in most Indian cities is not keeping pace with the increase in
travel demand. Indeed, the growth of vehicles in the streets has been far greater than the growth
in the street network; as a result the main arteries face capacity saturation. Between 1951 and
2004 at national level, the motor vehicle fleet grew at a compound annual growth rate of close to
11 per cent compared to an average rate of 3.6 per cent in the total road length. Within this total
priority was given to rural roads; national highways grew by only 2.3 per cent 4 . As a direct
consequence of urbanization and the lag in responding, roads have become ever more congested,
travel speeds have decreased and travel times have become longer. Energy is wasted and
pollution gets worse.
71. The railway network is suffering an equally acute shortage of capacity. At national level,
from 1951 to 2008 the network was lengthened by only 18 percent (in route-km), while the
number of passengers carried tripled and people traveled further, so that the number of
passenger-km multiplied by 10 5 . Suburban rail and Metro account for a large part of this increase
in traffic. Suburban rail use increased sharply as the number of passenger-km grew 18-fold over
the same period from 1951 to 2008, with a doubling between 1991 and 2008 (Figure 1).
150000
100000
50000
0
Figure 1. Growth in Suburban Rail Travel in Indian Cities, 1951-2001
(in millions of passenger-km)
6551 11770
22984
41086
59578
88872
119842
1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2007-08
Source: Indian Railways 2009.
3 UNDP. “India: Urban Poverty Report 2009.” http://www.undp.org.in/content/pub/PovertyReduction/INDIA-
URBAN-POVERTY-REPORT-2009.pdf
4 Transport Research Wing, “Road Transport Yearbook 2006-07”, Government of India
5 Ministry of Railways of India. Statistical Summary – Indian Railways: 1950-2007.
19

Mumbai’s Contribution to National Economy
72. The Mumbai Metropolitan Region (MMR), with a population of nearly 18 million in
2001 6 , is the sixth largest metropolitan area in the world. Mumbai’s primacy in India’s economic
well-being cannot be over-estimated. As the financial and commercial capital of India and the
most prominent gateway to the country, Mumbai‘s economy is of critical importance for a
variety of strategic reasons. It has the largest GDP of any Indian city, followed by the national
capital region Delhi, Kolkata and Chennai. In FY 2004-05, MMR contributed 40 percent to the
total Maharashtra State GDP 7 , and in FY2006-07 Mumbai contributed 6.2 percent of national
GDP 8 . It accounts for 33 percent of India’s income tax collections, 60 percent of its customs duty
collections, 20 percent of central excise tax collections, 40 percent of port trade and 60 percent of
stock exchange trading 9 . As the subcontinent’s largest port, Mumbai handles 30 percent of
India's exports and imports 10 .
73. While manufacturing’s share in the Indian economy has declined over the last decade, the
service sector has emerged as the growth driver, offering financial services, information
technology (IT) and information-technology-enabled services, media and entertainment,
hospitality and tourism. Mumbai is pre-eminent in these industries and now accounts for 11
percent of India's total employment and 20 percent of its employment in industry 11 .
Mumbai Transportation
74. Mumbai has an extensive rail and bus system, and public transport is used for three out of
every four motorized trips in Greater Mumbai, with rail being the dominant mode (Figure 2).
The Mumbai Suburban Railway system, part of the Region’s public transportation system, is
operated by two of India Railway’s zonal railways, WR and CR, which run the two largest and
busiest networks among IR’s 16 zones 12 .
75. The Western line runs northwards from Churchgate terminus station in Island City and
serves suburban passengers living along the west coast towards Ahmedabad and Delhi. The WR
operates 1,106 scheduled suburban train roundtrips per weekday over 124 route-km between
Churchgate and Virar, including six trains between Mumbai Chhatrapati Shivaji Terminus (CST)
and Borivali. This requires a working fleet of 25 nine-car train sets, 48 twelve-car train sets and
one fifteen-car one.
76. The CR runs from Mumbai CST station located very close to Churchgate in Island City
and serves a large part of central India to the east of Mumbai. The CR operates 1,464 scheduled
6 Census of India, 2001.
7 LEA Associates South Asia, “Comprehensive Transportation Study for Mumbai Metropolitan Area” (CTS),
MMRDA, April 2008.
8 http://www.financialexpress.com/news/gdp-growth-surat-fastest-mumbai-largest/266636/
9 MRVC. “Mumbai Suburban Railway System.” Presentation. March 2007.
10 Business Melbourne. “City Profile: Mumbai.” July 2004. Prepared by Sustainable Business and Trade
Development. https://www.businessmelbourne.com.au/docs/active/doc1044.pdf
11 Source: Ibidem. The term industry here refers to the secondary sector, including: textiles, pharmecuticals,
construction, engineering, metals, petroleum, silks, glassware, and printing. Before the industrial growth following
World War II, India’s economy used to rely mainly on manufactured goods, of which Mumbai’s textiles have
always represented an important share.
12 Indian Railways operate both long-distance and suburban rail systems.
20

suburban train roundtrips per weekday over 280 route-km from Mumbai CST northeast-wards to
Kotputari, southeast-wards to Khopoli and to Panvel via Mankhurd, Andheri on the Western
Railway and between Thane and Vashi via Ghansoli. This requires an operating fleet of 60 ninecar
train sets and 50 twelve-car sets. 13 The annual growth rate of rail passengers on CR is 2.6
percent and on WR 0.7 percent.
Figure 2. Modal Split in Mumbai in 2008
Taxi/Ric
kshaw
9%
Mumbai Modal Split by No. of Trips - No
Walk
Two Car 7%
Wheeler
7%
Cycle
3%
Train
51%
Mumbai Modal Split by Person*km - No Walk
Taxi/Rick
shaw 3%
Bus 10%
Two
Wheeler
3%
Car 5% Cycle 1%
Bus 23%
Train
78%
Source: Comprehensive Transportation Study for Mumbai Metropolitan Region, LEA Associates, April 2008
Quality of Suburban Railway Services
77. Because of its extensive reach across the metropolitan region and its intensive use by the
local population, the suburban railway has been suffering severe overcrowding, which has grown
to be a major issue. The very poor travel conditions for rail commuters are incompatible with the
objectives of Mumbai to become a world-class city with an acceptable level of comfort,
convenience and safety. In 2007-08 an estimated 6.8 million passengers daily 14 traveled on the
Mumbai suburban railway (2.5 billion trips annually), which makes the suburban rail system the
lifeline of Mumbai. At peak hour, the average frequency for train services is a very reasonable 16
trains per hour (a train every four minutes). One of the attributes of this suburban rail network is
low fares compared to other public transport systems. However, this comes at the price of
overcrowding - one of the most acute in the world, with about 5,000 passengers traveling in a
nine-car train as against a rated carrying capacity of 1,700. This translates into a density of up to
16 people per square meter in Second Class General coaches (officially referred to as ‘superdense
crush load’ by the Indian Railways when specifically referring to the Mumbai suburban
system), as measured in the 2008 TranSforM Comprehensive Transportation Study for MMR.
Overcrowding also severely slows down train speeds. While the recently introduced AC/DC
13 Mumbai Metropolitan Region Development Authority. “Comprehensive Transportation Study for Mumbai
Metropolitan Region.” April 2008. LEA International Ltd., Canada, in joint venture with LEA Associates South
Asia Pvt. Ltd., India. Updated by MRVC by e-mail on January 21, 2010.
14 Number of one-way trips per day.
21

EMU trains are capable of 100 km/h under light traffic conditions, the actual average speed of
the trains is a mere 35 km/h on most lines, the cumulative effect of several factors. 15
78. Due to the overcrowding, doors of coaches cannot be closed and passengers dangle
outside from the open doors. Nearby squatter settlements and encroachers within the railway
right-of-way safety zone are other causes of frequent casualties on the Mumbai system. Stations
are always overcrowded. People rarely use proper crossing places and prefer trespassing and
crossing the rail lines. Trespassing, which occurs not only in the station areas but also in between
them, forces trains to slow down and so increases travel times, limits capacity and hampers track
maintenance work. Deaths of squatters and trespassers after being struck by a train and
passengers falling off trains are a daily occurrence. There are about ten to twelve 16 deaths per
day on the Mumbai rail system (which is high but still less than the rate of five to seven 17 deaths
per day on the roads and streets in the MMR 18 , considering the far greater volumes carried by
rail). Table 1 below shows the gravity of this issue: the numbers of deaths and injuries have
grown at yearly rates of 3.3 and 5.6 percent respectively from 2001 to 2008, with an annual
average growth of 4.4 percent for the total number of casualties. Among the causes of death and
injury, the continued increase in the number of passengers falling off the train is particularly
noteworthy (this increase is in part due to the increase in the number of trains and the opening of
new lines). Reducing the number of fatalities related to its suburban rail services is one of the
priorities of Western Railway, Central Railway and MRVC, which in November 2009 decided to
prepare an action plan on how to effectively reduce the casualties among trespassers.
Table 1. Railway Accidents in Mumbai Metropolitan Region, year by year
2002 2003 2005 2006 2007 2008
Accidental Deaths
While crossing the railway line 1,971 2,517 2,479 2,561 2,603 2,448
Falling off the train 603 453 494 606 647 615
Others* 142 85 705 862 747 719
Total Accidental Deaths 2,885 3,055 3,678 4,029 3,997 3,782
Injured Persons
While crossing the railway line 1,147 856 810 1,040 1,048 916
Falling off the train 1,454 1,420 1,639 1,898 2,033 1,854
Others 144 657 1,064 1,195 1,226 1,260
Total Injured Persons 2,745 2,933 3,513 4,133 4,307 4,030
Total Casualties 5,760 6,227 7,191 8,162 8,304 7,812
Source: Mumbai Railway Police Commissionerate, 2007
* Other causes of accidents include: falling off the platform, derailments, bridge collapses
15 LEA Associates, Comprehensive Transportation Study.
16 This amounts to 6.9 deaths per 100 million passenger-km (total suburban rail passenger traffic based on
LEA Associates’ estimate is 173 million passenger-km/day in 2006).
17 This amounts to 11.2 deaths per 100 million passenger-km (total road traffic including non-mechanized trips
based on LEA Associates’ estimate is 62.5 million passenger-km/day in 2006).
18 Basic Transport and Communication Statistics for MMR, March 2005, by MMRDA and Indian Railways
22

Mumbai Rail and Urban Poverty
79. Commuting to work accounts for two-thirds of all trips in the Mumbai metropolitan
region –when weighted by the distance traveled. Many people still walk, but for distances of
more than 1-2 km motorized travel is a must. Suburban rail is the backbone of such commuting
trips, accounting for half of all non-walking trips and nearly 80 percent of the non-walking
distance traveled (see Figure 2). Rail is consistently the preferred motorized mode of transport
across all income groups.
80. For low-income commuters the cost of transport is the major consideration. For very lowincome
commuters walking is often the only affordable alternative. Thus, the urban poor rely
heavily on walking (61 percent for commuters in households earning less than Rs. 5,000 -
US$100- per month), and in general the poor use less motorized transit (including rail) than
higher-income groups. However, this income group also often chooses to take rail for long
distances (5 km or more) and as much as one in four low-income commuters who live in certain
zones take rail to work. These commuters will therefore, even in the short run, benefit from
improvements in transit service and/or fares.
81. Middle-income and low-income users above extreme poverty are the prime customers for
rail transit, as the fares are lower than for bus transit, and buying and maintaining a car is beyond
the means of a large number of households. “The cost per km of traveling by rail is also much
cheaper than the cost of bus service or other public transport, especially if a monthly pass is
purchased. For example, a worker with a commute of 20 km each way would pay only Rs. 90 per
month to commute by rail—less than Rs. 4 (10 US¢) per day. The cost per day of commuting 20
km via bus is, by contrast, Rs. 20”. 19
82. Finally, the future strategy for MMR proposed in the TranSforM study also underlines
that “the extension of suburban rail will ensure that distances are minimized and access to
livelihoods, education and other social needs, especially for the marginal segments of the urban
population, is improved.”
Mumbai Rail and Air Quality
83. The rapid pace of urbanization and probable acceleration of motorization trends in MMR
present a threat to ambient air quality, which is already a major health issue in most urban areas
in India. Indeed, the concentration of respirable particulate matter (RSPM) 20 in Mumbai has
increased by 53 percent from 2006 to 2008, mainly due to the 45 percent increase in the number
of registered vehicles from 2003 to 2008. The Central Pollution Control Board’s National
Ambient Air Quality Status Report for 2008 underlines that the RSPM levels in Mumbai are
“alarming”. The RSPM concentration in MMR in 2008 was 132 μg/m3. The World Health
Organization considers levels above 120 μg/m3 to be “high”, the second highest category right
19 Cropper et al., Urban Poverty and Transport: The Case of Mumbai, World Bank Working Paper 2005.
20 Particles produced by vehicle exhaust, burning of fuel and garbage, industrial sources, and re-suspension of dust.
23

elow “critical”. Although sulfur dioxide (SO 2 ) and nitrogen dioxide (NO 2 ) levels are still within
reasonable limits 21 , current motorization trends are not environmentally sustainable. 22
84. “In Mumbai the main contributor of air pollution is the transport sector, followed by
power plants, industrial units and the burning of garbage.” 23 Irrespective of improvements in
engines and fuel type, ambient air quality is bound to further deteriorate because of the
motorization rate if no compensatory action is taken. Understanding the need for a sustainable
urban development strategy, in 2004 MMRDA retained the National Environmental Engineering
Research Institute to prepare strategies and an action plan for particulate matter reduction in
MMR. The study included assessment of ambient air quality status (especially for particulate
matter PM10), the development of reduction and mitigation strategies, and a reduction action
plan.
85. Developing suburban rail use would contribute to the efforts being made in India as well
as in other countries to reduce GHG emissions. MUTP-2A aims at expanding an energy-efficient
public transport system and minimizing motor vehicle use, the main source of pollution. Indeed,
as presented in Annex 9, expanding the rail network capacity will likely lead to a diversion of
passengers from bus services. This reduction in bus operations will in turn contribute to reducing
pollution, because EMU trains emit very limited pollutant quantities, whereas buses emit NO 2
and SO 2 at a rate of 0.25 kg per bus per hour.
86. Finally, the conversion from DC to AC will allow the use of more energy-efficient trains,
thus further decreasing CO 2 emissions and allowing MRVC to claim carbon credits. The energy
saving per year due to the trains already introduced at this point is estimated at 6.2 million kWh,
and this allows for a generation of carbon credits equivalent to 62.6 thousand tCO 2 e 24 per year. 25
Long-term Transportation Strategy for MMR
87. Within the next 25 years, Mumbai is projected to overtake Tokyo and become the largest
urban region in the world, in a country having one of the fastest expanding global economies. In
2004, a task force appointed by the Chief Minister of Maharashtra conducted a comprehensive
transportation study for the metropolitan region known widely by the acronym TranSforM (for
21 The concentrations in SO 2 and NO 2 are 9 μg/m 3 and 42 μg/m 3 in 2008 respectively. Both levels are currently
labeled as “low” (between 0 and 40 μg/m 3 ).
22 “According to a study carried out by EMBARQ in cooperation with the World Bank in 2007, continuation of the
rapid motorization trends without adequate policy and technological interventions (the “business-as-usual” scenario)
would increase the annual national CO 2 emissions from urban transport sector (in all major cities) to 254 million
tons of CO 2 in 2030, which is more than nine times the emissions level in 2005.” (Project Appraisal Document,
Sustainable Urban Transport Project, World Bank 2009).
23 Larssen et al., URBAIR Urban Air Quality Management Strategy in Asia: Greater Mumbai Report, World Bank
1997.
24 tCO2e: Tons of CO 2 equivalent is a measure for describing how much global warming a given type and amount of
greenhouse gas may cause, using the functionally equivalent amount of carbon dioxide as reference.
25 MRVC Letter to World Bank dated May 16, 2008 regarding Generation of Carbon Credits on account of energy
saving due to DC/AC conversion on Mumbai Suburban section of CR WR under MUTP 1 and 2.
24

“Transportation Study for Mumbai”). 26 Its vision statement is: “Transforming Mumbai into a
world-class metropolis with a vibrant economy and globally comparable quality of life for its
citizens”.
88. One of the Vision’s several goals is for the MMR to become an important logistic and
export hub through synergy between ports, airports and special economic zones. Moreover, it
also aims at guaranteeing to all MMR citizens access to public transport, in addition to other
basic civic services: safe drinking water, sanitation, education, health care and recreation
facilities. A key long-term transportation strategy is “to achieve balanced, integrated and
sustainable public/private transportation systems to meet the aspirations of the public for
freedom and convenience of travel.” 27
89. The transport network recommended by the TranSforM study includes a dominant role
for suburban rail. The current strategy is for it to remain the backbone of commuting trips in the
MMR in the medium term. A certain decrease in suburban rail’s modal share due to diversion of
trips to new metro lines is expected. 28 However, if the strategic guidelines of TranSforM are
carried out, the forecast sustainable modal split still sees suburban rail as the dominant mode, as
shown in Figure 3. Indeed, the proposed future strategy for the region relies heavily on an
extensive expansion of the rail-based transit system. This is reflected in the very large planned
investment in suburban rail by 2031: Rs. 315 billion (nearly US$7 billion), the second largest
investment after the metro system (Rs. 922 billion). 29
Figure 3. Modal Split in Mumbai in 2005 and as per TranSforM strategy in 2016
Train,
53.3%
Mumbai Modal Split by No. of Trips - No
Walk 2005
Metro,
0.0%
Car,
4.9% Two-
Wheeler,
7.9%
Auto,
7.4%
Bus,
24.9%
Taxi,
1.6%
Strategic Mumbai Modal Split by No. of
Trips - No Walk 2016
Metro,
30.7%
Train,
33.5%
Car,
8.6%
Two-
Wheeler,
11.3%
Auto,
4.7%
Taxi,
1.4%
Bus,
9.9%
Source: Comprehensive Transportation Study for Mumbai Metropolitan Region, LEA Associates, April 2008
26 Mumbai Metropolitan Region Development Authority. “Comprehensive Transportation Study for Mumbai
Metropolitan Region.” April 2008. LEA International Ltd., Canada, in joint venture with LEA Associates South
Asia Pvt. Ltd., India.
27 Ibidem.
28 This is due to the fact that connectivity by the metro network will be extensive and that metro stations are to be
spaced at 1-km intervals.
29 By comparison, investment in freeways and roads is only forecast at Rs. 267 billion and in buses at Rs.43 billion.
25

Indian Railways’ Development Strategy
90. Indian Railways, with 63,221 route-km of network and 1.42 million employees, is one of
the largest rail networks of the world. It constitutes the lifeline and the mainstay of the country’s
transport infrastructure. Over the last few years, IR has achieved a dramatic re-invention of its
business and is presently witnessing one of the most impressive and unprecedented expansions in
its history. During the last few years the freight traffic on IR has been growing at 9.4 percent and
passenger traffic at 7.4 percent, and revenue has grown even faster. This is in sharp contrast to
the historical trend rates of growth at 3-4 percent per year. In the passenger segment, while
affordability continues to underpin the pricing for second-class passengers, there has been
reduction in fares for passengers in air-conditioned class and those traveling short distance.
These measures have redefined the transport scene in the country and transformed the railways
as a competitive and viable alternative to road transport. By 2012, IR is projected to handle 25
percent more passengers than handled in 2008.
91. During the past five years, IR has achieved commendable results by substantially
increasing the volume of traffic carried and its profits. However, it now faces several new
challenges. The recent increase in the wage bill, accompanied by a downturn in economic growth
in 2009, have already affected IR’s bottom line adversely. In addition, the planned large
investment in Dedicated Freight Corridors (DFC) in the medium term will create excess capacity
in its start-up years that will reduce IR’s profits unless it develops marketing strategies to rapidly
attract new traffic to the existing corridors (mainly passengers), as well as to the new dedicated
freight corridors.
92. Going forward, the expected continued economic growth of India over the next 20 years
at eight percent or more will impose new challenges on IR in respect of capacity, transportation
and logistic products and service quality to be expected by rail customers in freight as well as
passenger services. It is foreseen that the customer’s profile will undergo a significant change, as
an average rail customer is expected to experience a four-to-five fold increase in income and at
the same time will demand more comfortable and faster travel. Customers will be willing to pay
higher fares for these improved services. These challenges can be addressed effectively by
implementing Vision 2020 for IR. An immediate next step would be to develop a credible
financing plan to effectively underpin IR’s developmental plans.
93. Another important step is to develop an action plan (road map) that lays out specific
strategies and measures to be implemented to overcome the present constraints and, more
importantly, to enable IR to satisfactorily support the growing economy by increasing capacity
and improving service quality. IR needs to prioritize actions and investments over the next ten
years and set out an implementation schedule. It will also attempt to identify funding sources for
the recommended investments.
Management of MMR
94. Responsibilities for the general direction of urban development and urban transport rest
with the State Government of Maharashtra (GOM) through the Mumbai Metropolitan Region
Development Authority (MMRDA), a regional developmental agency under the Department of
Urban Development. To enable the Mumbai Suburban Railway to meet the demands of the ever-
26

growing passenger traffic, the Ministry of Railways and GOM jointly established Mumbai
Railway Vikas Corporation Limited (MRVC) in 1999 with the mission to develop world-class
infrastructure for an efficient, safe and sustainable railway system in Mumbai’s suburban section,
to provide comfortable and friendly train services to commuters. Its objectives included to: (i)
integrate suburban rail capacity enhancement plans with the urban development plan for Mumbai
and propose investments, (ii) implement rail infrastructure projects in Mumbai’s suburban areas,
(iii) commercially develop railway land and airspace in Mumbai to raise funds for suburban
railway development, (iv) resettle and rehabilitate project-affected households and (v) to be an
infrastructure company committed to sustainable development and environment friendly
construction in Mumbai suburban section.
95. In 2009 a first step was taken through the decision that metropolitan planning should be
done by a “Metropolitan Planning Committee” (MPC). District planning committees also exist
whose task is to plan for each district within the Region, but it is not yet clear how they should
coordinate with MPC or MMRDA. Further institutional strengthening of the coordinating role of
MMRDA or the creation of a separate Unified Metropolitan Transport Authority is currently
under consideration.
96. Funding arrangements for urban transport infrastructure and services in Mumbai are split
between a number of national, state and local government agencies. No single agency has the
role or responsibility for preparing integrated investment and operations budgets which meet
travel demands and policy objectives, optimize the use of scarce resources, and are affordable.
Public investment has been lagging behind demand, most notably on the railways, while on the
roads maintenance expenditure is about half what is needed to keep them in good condition.
Since the planning and provision of suburban rail services is IR’s responsibility, MMRDA has
little influence over them. The allocation of resources for rail services is subject to the approval
of the (national) Planning Commission and IR. The Western Railway and Central Railway
operating within the metropolitan region are independent agencies of IR, with their own lines
and no integration of services.
MUTP-1 Accomplishments and Potential Benefits of MUTP-2A
97. In early 2000 MUTP-1 was launched to address issues pertaining to (i) the inadequate
capacity and low speed of rail services and contentious resettlement and rehabilitation (including
land acquisition); (ii) limited East-West connectivity, poor traffic management, and road safety;
and (iii) inadequate bus services and road maintenance, pollution from motor vehicles, limited
involvement of stakeholders, institutional weaknesses and inadequate funding. In June 2002 the
Bank approved Loan 4665-IN and Credit 3662-IN to finance the project, which became effective
in November 2002. Because its components concern different sub-sectors, the project has six
implementing agencies, including MRVC for the rail transport component. MMRDA is the
coordinating agency and is responsible for carrying out the resettlement and rehabilitation
component on behalf of all the implementing agencies.
98. The rail component aims to improve the capacity and performance of the suburban
rail system through service efficiency improvements (increasing existing track capacity,
converting from DC to AC, and improving electrical, signaling and telecommunication systems),
procuring new rolling stock and upgrading existing rolling stock, and expanding network
27

capacity. The component also supports studies and technical assistance, among other things, to
improve Indian Railways capabilities for track and rolling stock maintenance, financial
management and control systems, railway safety and quality assurance.
99. Since its start the project has made significant progress towards achieving its
development objectives. As a result of the resettlement of squatters along rail tracks and the
completion of track doubling on the Western Railway corridor, the efficiency of suburban train
operations has increased, with a rise in its peak-time capacity by 7-10 percent and a reduction in
commuting time by four to nine minutes for about six million daily passengers. An improvement
in transport services in terms of quality and comfort is noticed as a result of the addition of a few
new trains and the replacement of 644 buses by new ones. However, improvements in traffic
management technical capacity within the Municipal Corporation of Greater Mumbai need to be
further strengthened and sustained.
100. Up to March 2010, 84 twelve-car rakes of new EMU trains (equivalent to 108
nine-car rakes) were put into service. Of these 84 rakes, 51 were financed by the Bank and
procured by MRVC, while the other 33 rakes were funded and procured by Indian Railways on
their own. Together, they have reduced crowding in the system from 500 people per coach ppdpk
to 450, despite a net increase in passengers. It is expected that once all additional 72 Bankfinanced
twelve-car trains (equivalent to 96 nine-car trains) are in service, crowding will be
reduced to 350 ppdpk, i.e. 30 percent less than the original density --but still twice the rated
carrying capacity.
101. Through the preparation of MUTP-1 a partnership was created between the GOM
and IR for developing Mumbai’s suburban rail system, and it was institutionalized by the
creation of MRVC. MRVC as an implementing agency has proven to be an efficient tool, and
attests to the success of this partnership. Prior to MUTP-1 the Mumbai suburban system suffered
due to lack of investment in renewal of aging assets as well as expansion to meet the everincreasing
demand, as IR had much greater interest in main line services on a national scale. The
partnership between GOM and IR has been considered positive enough to continue for the
preparation and implementation of MUTP-2A. And MRVC has gained professionalism in project
implementation, coordinating effectively with both the GOM and the various departments of IR.
Its increased efficiency has resulted in MRVC being commissioned for other studies to develop
suburban rail services in Mumbai.
102. Through MUTP-1 MMRDA has gained experience and capacity in handling
resettlement of large numbers of people. This project has been a first for Mumbai and a first for
the Bank to handle resettlement of so many people in an urban setting. During implementation,
difficulties occurred in handling the resettlement. A World Bank Inspection Panel investigated
the project’s resettlement process and raised concerns about implementation issues, including the
way medium and large shopkeepers were resettled, the quality of the baseline survey of projectaffected
people, management of post-resettlement activities, grievance redressal processes, and
project supervision. The implementation by GOM of a remedial action plan, with the active
support of the Bank, resulted in a much improved quality of the resettlement and rehabilitation
process. MMRDA evolved towards a problem-solving approach for resettlement, exploring
negotiated solutions as often as possible. The experience gained by MMRDA thereby is now
used by the Bank as an example for other large cities with similar challenges.
28

103. Further capacity will be needed to meet the future growth in demand. The
population in areas of the Mumbai Metropolitan Region served by suburban railway is expected
to grow at 1.8 percent per year for the next decade, boosting the demand for suburban rail
services and the need to increase capacity commensurately. The comprehensive transport study
carried out under MUTP-1 (paragraph 88 above) recommended such an increase as a priority.
This need was already foreseen at the time MUTP-1 was prepared and the genesis of MUTP-2A
lies in MUTP-1, one of the key objectives of which was to address the overcrowding on
suburban trains. The size of MUTP-1 was limited because funding was insufficient then to
finance all the EMU coaches needed for full use of the infrastructure created under the project.
By the end of MUTP-1, the suburban rail system will have 2,260 EMU coaches. Based on
simulation modeling of the time table, the total number of EMU coaches can increase to 3,124 to
reach full use of today’s infrastructure. The additional 864 EMU coaches (72 twelve-car trains)
to be financed under MUTP-2A will bring the fleet up to this full capacity. The demand will still
be in excess of the supply, but this additional transport capacity will further reduce the
overcrowding in suburban trains.
104. The project will provide several categories of local benefits for commuters, such as (i)
reduced travel time, (ii) improved travel comfort, and (iii) health improvements, with a focus on
benefitting the poor for whom the rail represents an especially important mode of transport. The
more frequent service will reduce waiting times, while shorter travel times will flow from the
higher maximum speed potential of the upgraded rolling stock. The reduced passenger waiting
time has been assessed as half a minute per trip on completion of MUTP-1 and as one minute per
trip on completion of both MUTP-1 and MUTP-2A. The average saving in total journey time
would amount to as much as two to six minutes per trip depending on the corridor. Using a train
design similar to the one developed for MUTP-1, an improved suspension system and better
lighting in the trains will provide greater comfort. The improved air ventilation system will have
a positive impact on commuters’ health.
105. The 1,500V DC traction power system incurs significant energy losses. These will be
considerably reduced with the completion of conversion of all lines to 25KV AC traction power.
The conversion will permit running of more services and conversion of nine-car trains to twelvecar
trains. The conversion also promises several other benefits:
(a) Supplying higher levels of power through high-capacity traction substations makes it
possible to run longer trains as well as more trains per hour during the peak period.
(b) The greater power available to trains enables them to accelerate faster and operate at
higher speed, shortening journey times.
(c) A three-phase propulsion system on the new EMU rakes, using modern Integrated Gate
Bipolar Technology, allows regenerative braking, which sends energy back into the wire.
106. In carrying out MUTP-1 MRVC has gained a recognized expertise in managing a
challenging suburban rail development project that required professional expertise in technical
disciplines as well as in interagency coordination and communication. During the last two years
MRVC and its key personnel have earned several national and international awards in these
disciplines. MRVC has also recognized the importance of a comprehensive systems approach for
29

environmental management and social management, and during the preparation of MUTP-2A it
has earned its certification to ISO 14001:2004 and ISO 18001:2004. This second project will
facilitate the continuation of the capacity building effort provided by the Bank team during
MUTP-1. The on-going interaction with the Bank exposes MRVC and the zonal railways
operating the system to international good practice and emerging ideas. A set of studies will
advise MRVC on specific key topics.
30

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies
INDIA: Mumbai Urban Transport Project-2A
Issue Project Latest Supervision
Ratings
Bank-financed, completed or on-going
Implementation PDO
Progress
Capacity expansion of commuter rails, urban Mumbai Urban Transport Project MS MS
roads and bus services, and institutional
strengthening of concerned agencies
Capacity expansion of national highways and Allahabad Bypass Project (Ln.4719-IN) Completed S
institutional strengthening of MOSRTH and
NHAI
Lucknow Muzaffarpur National Highway
Project (Ln. 4764-IN)
U
U
Capacity expansion and maintenance of state
highways and institutional development of state
road agencies
Improvements of road infrastructure in a
commercial format
Andhra Pradesh State Highway Project (Ln.
2490-IN)
Completed
Gujarat State Highway Project (Ln.4577-IN) Completed S
Karnataka State Highways Improvement Project
(Ln.4606-IN)
Completed
Kerala State Transport Project (Ln.4563-IN) MU MS
Mizoram State Roads Project (Ln.3618-IN) MS MS
Uttar Pradesh State Roads Project (Ln.4685-IN) S MS
Tamil Nadu Road Sector Project (Ln.4706-IN) S S
Himachal Pradesh State Roads Project
(Ln.4860-IN)
Punjab State Road Project (Ln. S S
Orissa State Road Project (Ln. S S
Support to Infrastructure Leasing and
Financial Services (Ln.3992-IN; Cr.2838-
IN)
MS
S
S
MS
Municipal reforms and investments (including
improvements of urban road infrastructure)
Improvements of urban transport infrastructure
Promotion of public/non-motorized transport and
urban transport capacity building
Other development agencies, completed, ongoing and planned
Japanese Bank for International Cooperation
(formerly OECF) - Capacity expansion of Urban
Transport
ADB - TA for Urban Transport
ADB - Capacity expansion of NH and SH and
institutional strengthening of agencies
Karnataka Municipal Services Project (Ln.
4818-IN)
Tamil Nadu Urban Development Project
(Ln.4798-IN)
Sustainable Urban Transport Project (SUTP)
(Project ID P100589)
Delhi Metro Rail Project
Development of national urban transport
guidance and identification and preparation
of a Urban Transport investment project
National Highway Corridor I, Surat-Manor
Tollway Project, Chattisgarh State Roads
Project, National Highway Corridor II, MP
State Roads Project
Effective
On going
On going
On going
31

ADB- Improvements of urban roads in major
Kerala cities
UNDP- Capacity development for national and
local governments
Kerala Sustainable Urban Development
Project
India capacity development program
Ratings: HS (Highly Satisfactory), S (Satisfactory), MS (Moderately Satisfactory), U (Unsatisfactory), MU
(Moderately Unsatisfactory), HU (Highly Unsatisfactory)
On going
On going
32

Annex 3: Results Framework and Monitoring
INDIA: Mumbai Urban Transport Project-2A
Results Framework
PDO Project Outcome Indicators Use of Project Outcome
Information
To improve the passenger carrying
capacity, operational efficiency,
1. Additional capacity - Vehicle km per day during
morning peak hours (8.30-11.30 a.m.)
To assess the project’s
contribution to the PDO
level of comfort of, and the
institutional capacity of entities
2. Reduction in peak hour overcrowding – average
number of passengers per 12-car train
involved in, the suburban rail system
of Mumbai Metropolitan area.
3. Reduction in journey times – average transit
times in minutes
4. Reduction in energy consumption – average
energy consumption per 12-car train-km
(kWh/t/km)
5. Action plan on trespassing and safety prepared
6. Action plan on revenue improvement prepared
Intermediate Outcomes Intermediate Outcome Indicators Use of Intermediate
1. Train operation performance 1.1. Trains per hour
1.2. Length of trains
1.3. EMU 12-car trains in service (258 trains)
1.4. Ridership per day
1.5. Punctuality – percentage of trains reaching less
than five minutes late to destination
2. Infrastructure and equipment 2.1. DC to AC conversion (1577 TKM)
2.2. Additional Track (181 TKM)
3. Institutional development and
capacity building
3.1. Study on potential for ISO 14001 at CR and
WR completed
3.2. Study for Mumbai suburban development plan
completed
3.3. TA for IR strategy carried out
3.4. Continued MRVC ISO Certification
Outcome Monitoring
To assess the performance of the
project and to redirect it, if
necessary, to achieve the PDO
33

Project Outcome Indicators
1. Vehicle km per day during
morning peak hours (8-11
a.m.)
2. Reduction in overcrowding
(passengers per 12-car
train)
3. Reduction in journey times –
transit times in minutes
reduced
4. Average energy consumption
per 12-car train-km
(kWh/t/km)
5. Action plan on trespassing
and safety prepared
6. Action plan on revenue
improvement prepared
Intermediate Outcome Indicators
1.1. Trains per hour during peak
hour
1.2. Length of trains ( percent of
12-car trains)
1.3. EMU Fleet size (12-car
rakes in service)
Comment
Corridor:
WR
CR (ML)
CR (Harbor)
Corridor:
WR
CR
Harbor
WR Through Churchgate to Virar
WR Local Churchgate to Borivali
CR Through CSTM to Kalyan
CR Local CSTM to Thane
Harbor Local CSTM to Panvel
Calculated using consumption per
motor car (MC) type:
kWh/MC/km for DC = 4.94
kWh/MC/km for AC/DC = 3.19
Corridor:
WR Through
WR Local
CR Through
CR Local
Harbor Local
Corridor:
WR Through
WR Local
CR Through
CR Local
1.4. Ridership per day Figures in thousands
Central Railway
Western Railway
Arrangements for results monitoring
Baseline
01.04.09
561,461
447,578
151,001
5400
4800
4200
81
65
59
56
December
2012
End of
MUTP-2A
(2014)
815,400
777,050
182,646
4000
4000
4000
75
62
54
53
Reports
Frequency
Yearly
reports
Yearly
reports
Yearly
reports
77
75
17.62 12.76 Yearly
reports
-- Action plan
prepared
-- Action plan
prepared
(October
2013)
16
17
14.4
14.4
16.4
Action plan
prepared
Action plan
prepared
18
18
18
18
18
100%
100%
100%
100%
Yearly
reports
Yearly
reports
190 258 Yearly
reports
3592
3298
93.2%
98.2%
3797
3486
94%
98.5%
Yearly
reports
Data Collection
Instruments
Working timetable
of WR and CR and
operational
statistics
Ridership/
occupancy survey
of commuters
Working timetable
of WR and CR and
operational
statistics
Operational
Statistics
Final Report
Final Report
Working timetable
of WR and CR and
operational
statistics
Working timetable
of WR and CR and
operational
statistics
Performance
statistics of
Railways and
inspection
Performance
statistics of
Railways
Responsibility
for Data
Collection
MRVC
MRVC
MRVC
MRVC
MRVC
Rly Board,
MRVC
1.5. Punctuality – percentage of Central Railway
Yearly Performance MRVC
trains reaching less than five Western Railway
reports statistics of
minutes late to destination
Railways
2.1. DC to AC conversion (Track 569 1577 Yearly Performance MRVC
34
MRVC
MRVC
MRVC
MRVC

KM) reports statistics of
Railways
2.2. Additional track (TKM) -- 181 km Yearly
reports
Performance
statistics of
3.1. Study on potential for ISO
14001 at CR and WR
completed
3.2. Study for Mumbai suburban
development plan
completed
3.3. TA for IR strategy carried
out
3.4. Continued MRVC ISO
Certification
-- Study
completed
-- Study
completed
Railways
Final Report
Final Report
MRVC
MRVC
MRVC
-- TA completed Final Report Rly Board,
MRVC
MRVC
certified
ISO 14001,
ISO 18001
Certification
Yearly Certification
Document
MRVC
35

Annex 4: Detailed Project Description
INDIA: Mumbai Urban Transport Project-2A
Mumbai Urban Transport Project 2A
(Cost: US$970.5 million with IBRD’s share of US$430 million)
107. The proposed MUTP-2A consists of the procurement of 72 additional twelve-car
EMU trains, completion of conversion from 1500V DC to 25kV AC traction on the remaining
sections of Central Railway, expansion of maintenance facilities for EMUs and provision of
stabling lines for the additional EMU trains included in the project. Some technical assistance
studies are also included in the project. The planned implementation period is five years,
commencing in early 2010 and completing all components by the middle of 2014.
108. The various components of MUTP-2A are as under:
Component 1: Rolling Stock Fleet Increase:
(Cost: US$659.6 million with IBRD’s share of US$355.7 million)*
109. At the end of MUTP-1, Mumbai Railway Suburban System (MRSS) will have
2260 EMU cars. Based on the Time Table prepared through simulation of train operation this
holding will need to increase to 2980 cars for full use of the infrastructure created under MUTP-
1 and by IR already. Thus, procurement of electrical equipment as kits for 864 EMU cars and
application of these on trains manufactured at ICF, Chennai is included. Since by the time these
trains are delivered and put in service the entire DC to AC conversion would have taken place,
unlike the EMU rakes procured under MUTP-1, there will be no need for dual voltage rakes
capable of operation on DC as well as AC systems. Hence these rakes will be for use on 25kV
AC system only. The prototype supply of kits, manufacture of prototype rakes, and prototype
testing will take another 12-15 months. The series supply of kits would thus materialize about
two years after issue of bid documents. If the procurement process starts in early 2010, the
delivery of kits will commence by 2012.
110. The Bank loan will finance procurement of equipment for 864 EMU cars (72 trains
of 12 cars each). The manufacture of trains at ICF, Chennai will be funded by counterpart funds.
The manufacture of EMU cars against MUTP-2A would commence from early 2011 after the
manufacture of EMU cars against MUTP-1 and another IR contract for EMU cars has been
completed by the end of 2010. The delivery of 72 trains shall be completed by the February
2015.
Component 2: DC to AC Conversion (including Signal and Telecom improvements):
(Cost: US$173.8 million with IBRD’s share of US$55.2 million)
111. This component covers the conversion of electric traction system from 1500V DC
to 25kV AC on the Central Railway over 172 track km (CSTM to Thane, CSTM to Tilaknagar
and Mahim to Wadala Road sections). This comprises modification of overhead catenary, setting
up of traction power sub-stations at Sion, Chinchpokli, Wadala Road and Thane, along with
switching stations, procurement of catenary maintenance equipment and modifications to signal
36

and telecom systems to make it compatible with AC traction. The conversion will permit
enhanced power supply for additional services and longer trains consisting of 12 cars.
112. The Bank loan will finance off line works such as setting up of new traction substations
and switching posts at Sion and Chinchpokli between Mumbai CST and Vidyavihar,
procurement of Digital Axle Counters (DAC) on Mumbai CST-Thane section, and other left over
sections of MUTP-1, and catenary maintenance equipment. Additional setting up of two new
traction substations at Wadala Road and Thane on Vidyavihar- Thane and Mumbai CST-Tilak
Nagar section and other online works, such as modification to catenary system, quad cables and
signaling system, will be executed by Central Railway through government funding.
113. The conversion is planned to be completed by 2012-13. Apart from providing
capacity to run more and longer trains the conversion will reduce cost of maintenance of power
supply installations and transmission losses. There would also be significant energy saving due
to higher potential for re-generation of power in case of 25 kV AC system in comparison to the
1500V DC system.
Component 3: EMU maintenance facilities and stabling lines:
(Cost: US$117.7 million with IBRD’s share of Nil)
114. New stabling lines to accommodate the additional trains will be constructed. The
existing EMU maintenance depot at Kurla on Central Railway and the maintenance shed at Virar
constructed under MUTP-1 will accommodate new stabling lines. In total, the project
component comprises 73 new stabling lines, 34 (including four extensions from 9-car to 12-car)
on Western Railway at Virar, Borivali and Vasai Road and 39 on Central Railway at Sion,
Thakurli, Kasara, Khopoli, Belapur, Panvel, Ambernath, Karjat, Titwala and Kurla. The
maintenance facilities for the additional coaches being inducted will be provided by augmenting
the capacity in the five existing maintenance sheds (at Mumbai Central and Kandivali on
Western Railway and Kurla, Kalva and Sanpada on Central Railway) and the two existing
periodic overhaul workshops (Mahalaxmi on Western Railway and Matunga on Central
Railway). Expansion of the new maintenance shed at Virar under construction in MUTP-1 is also
included. No new shed or workshop is planned at this stage. Details of number of stabling lines
at each location and and of the maintenance facilities are given in the MUTP-2A Implementation
manual. This component is not funded by the Bank loan. The works are expected to be
completed by the end of 2013.
Component 4: Technical Assistance:
(Cost:US$14.6 million with IBRD’s share of US$14.4 million)
(a) Strategic Plans for Sustainable Expansion of Rail Services.
1. Development Program for Mumbai Suburban Rail Services
115. The TranSforM study recently completed by MMRDA outlines proposals for the
transport network development, including the suburban rail network, to 2031 to meet the forecast
travel demand. MRVC, Central and Western Railways have put forward proposals for rail
service development beyond the current project as an initial stage in realizing the 2031 network
and services. Based on these proposals and in coherency with TranSforM recommendations, the
37

proposed study will prepare a set of proposals for the staged expansion of network capacity of
Mumbai suburban rail system (integrated with other modes) and improvement of the quality of
service to passengers to provide for seamless convenient travel by public transport. Key
investments proposed for investment after this project in the period 2016 -2021 will then be the
subject of a pre-Feasibility Study. The output of this study would be a costed, time based
development plan for the suburban rail system to the year 2031, and a pre-feasibility study of the
investments proposed for the period 2016 – 2021. The study will be implemented by MRVC.
Target Completion Date: By October 2013. Proposed cost: US$5.4 million.
2. Provision to support the development of the Indian Railways long term strategy
for Suburban Rail
116. The recently produced Indian Railways’ Vision 2020 document includes a strategy
for suburban rail services. This technical assistance includes a provision for a series of studies
and advisory services to assist Indian Railways in developing the suburban services dimension of
their long term strategy. This effort will include consideration for replication to other cities of the
model developed with MRVC in Mumbai. It will also include considerations of institutional and
policy improvements to improve further the efficiency of Mumbai suburban rail services and
their better integration within the overall regional urban transport system. Mumbai study will in
particular take into account the physical segregation that will be achieved at the end of MUTP-
2A and B between suburban and national passenger tracks. This technical assistance will be
procured by MRVC and managed by the Indian Railway Board. Target Completion Date: By
June 2014. Proposed cost: US$1.6 million.
3. Revenue maximizing study in particular for non-fare box revenues with
affordability study
117. At present, most of the revenue on the suburban rail system comes from the sale of
tickets. This revenue is insufficient to cover operating costs and the growing financial gap is
covered by financial transfer from other rail business segments. The study will examine potential
non-fare revenues including from advertising, rental of commercial spaces at stations and
property development at stations and on other railway land (talking account to the study
undertaken in MUTP-1). The potential for indirect user charges will also be examined, including
payroll taxes and increased property taxes in areas around stations (taking account of work
carried out as part of the TranSforM Study). The study will also review the socio-economic
profile of customers and examine the justification for financial cross-support from other
economic agents as well as the potential for fare adjustment in relation with affordability and
service quality. The output of the study will be a strategy to improve the financial sustainability
of the Mumbai suburban rail operation and a suggested list of options, with estimates of potential
revenue, a pre – FS level costed and time based implementation schedule, including any
institutional and regulatory changes that may be required. The study will be procured by MRVC
and managed by Indian Railway Board. Target Completion Date: By October 2013. Proposed
cost: US$1.1 million.
(b) Tactical programs for improving passenger convenience and information
4. More efficient and user friendly ticket issuing
38

118. 75 percent of people buying tickets for a rail journey purchase a separate ticket for
each journey. This is time consuming and confusing for passengers as there are seven or eight
different combinations of ticket systems and ways to purchase these tickets. This leads to
maintenance problems and passenger complaints when machines break down. This TA will
review the current arrangements, and develop functional specifications for ticketing machines
and associated operational arrangements for issuing single journey tickets, with the potential to
also issue passes (multi trip tickets). These ticketing arrangements should be compatible with
existing and proposed arrangements for single journey tickets on other modes (bus, metro).
Options will be examined and recommendations made which would be compatible with the
Integrated Fares and Ticketing System for MMR being developed by MMRDA. The output will
be a recommended system with a pre – FS level costed and time based implementation schedule.
The study will be implemented by MRVC. Target Completion Date: By September 2013.
Proposed cost: US$0.5 million.
5. Passenger information and security
119. The present system of Passenger Information and Guidance consisting of Audio
Announcements, Train Information Display systems, and Clocks has been provided in a discrete
manner requiring each item to have separate Operation and Control, wiring and other features.
The station Signage for Passenger guidance is not to International standards. The Station and
Platform area illumination including Concourse at major stations also needs to be upgraded
keeping in view the optimum level of illumination to meet both aesthetic and energy saving
requirements. For Video Surveillance of Station Entrances and Exits from security point of
view, an integrated system needs to be designed with both Central and Remote Video
Surveillance Monitoring features. The TA will identify the deficiencies in the existing system
and taking into consideration the experience of comparable foreign Suburban Rail Systems
recommend an integrated state-of-the-art Passenger Information and Guidance, Station and
Platform area Illumination and Security Surveillance System. The TA will then prepare the
technical specifications and cost estimate for the recommended solution. The study will be
implemented by MRVC. Target Completion Date: By September 2013. Proposed cost: US$0.5
million.
(c) Tactical plans for improving safety and environmental management of operations
6. Reduction of trespassing and improvement of safety of the track
120. A large number of deaths and serious injuries occur daily due to passengers and
other pedestrians being struck by trains while crossing the railway tracks in the station area or
between stations. This study will analyze the data on these and will suggest remedial measures.
These could include construction of user friendly grade separated crossings (subway/foot overbridges)
combined with fencing and other barricades to restrict crossing of the track. The output
would be a costed and time based program of remedial measures. The study will be implemented
by MRVC. Target Completion Date: By December 2012. Proposed cost: US$0.1 million
(Counterpart funded).
7. Improved Environmental Management of Rail Operations
121. MRVC has significantly improved the environmental management of its activities
which are certified to be in compliance with ISO 14001. Central and Western Railways have
39

egun the process of certification of their ancillary installations, including car sheds and
workshops using their own resources.
122. This proposed activity will facilitate improvements to environmental performance
of each type of installation beyond the regulatory requirements. It will cover the workshops, car
sheds, and stations within Western Railway and Central Railway. The initial focus would be
better water management and energy conservation. At the workshop, car shed, etc. the focus will
be on water recycling, reuse and disposal of oily wastes along with establishing the feasibility of
use of more energy efficient devices such as compressors, lights, and other equipment. At
stations, techniques and incentives for ensuring cleaner stations and surroundings would be
explored. The output of the study will be a series of specific actions to improve environmental
performance at these locations, rated according to their efficiency and ease to implement,
following consultations with the participating Railways. The study will be implemented by
MRVC. Target Completion Date: By December 2012. Proposed cost: US$0.5 million.
(d) Capacity Building for Increased Operational Efficiency
8. Power Supply Simulation
123. Estimates of power supply requirements are needed for the expansion of services.
Design of the most cost effective and efficient power supply depends on the use of computer
based simulation software. This TA provides for the supply and installation of software,
calibration to Mumbai conditions, training of staff in its use and assisting MRVC staff to run a
minimum of two scenarios to ensure it is running effectively. The TA will be implemented by
MRVC. Target Completion Date: By December 2013. Proposed cost: US$0.9 million.
9. Rail Operations Simulation
124. Optimizing the number of trains that can run on the Mumbai suburban system
requires operations simulation software which uses inputs related to the characteristics of the
infrastructure and the trains. MRVC is currently using software developed by the railways that
dates from 1996-98 and requires too much input data, staff time and computation time to produce
the desired results. This TA provides for the supply and installation of software, calibration to
Mumbai conditions, training of staff in its use and assisting MRVC staff to run a minimum of
two scenarios to ensure it is running effectively. The TA will be implemented by MRVC.
Target Completion Date: By December 2012. Proposed cost: US$0.6 million.
(e) Training
125. Even though MRVC has successfully executed projects worth US$800 million, it
recognizes the need to continuously improve the skills of its staff, and those of Central and
Western Railways with whom it interacts. To make project execution more effective and
efficient, it wishes to ensure staff can be trained in best practices followed elsewhere in the
world, in subjects including Financial Management, Project Management, Procurement as well
as Technical engineering, Social, Environmental protection and Communication. This
subcomponent provides funding for the development and delivery in Mumbai of training
programs in these and other subjects, as well as domestic and limited international study tours
based on Training Plans to be prepared and submitted annually to WB by MRVC. The
40

completion date of training programs in the closing date of the project. Proposed cost: US$3.2
million.
41

Annex 5: Project Costs
INDIA: Mumbai Urban Transport Project-2A
Table 1. Project Costs and Financing by Components
(Local Crore)
(US$ million)
Project Component Local Foreign Total Local Foreign Total
Component 1
Rolling Stock Fleet Increase 2,377.0 553.0 2,930 535.1 124.5 659.6
Component 2
DC to AC Conversion 686.3 85.8 772 154.5 19.3 173.8
Component 3
EMU Maintenance Facilities
and Stabling Lines
523.0 - 523 117.7 - 117.7
Component 4
Technical Assistance 7.4 57.6 65 1.7 13.0 14.6
Total Project Costs 3627.7 662.3 4,290 816.7 149.1 965.8
Front-end Fee - 4.775 4.775 - 1.075 1.075
Unallocated
- 16.3 16.3 - 3.7 3.7
Total Financing Sought 3627.7 683.4 4,311.1 816.7 153.8 970.5
Note: Physical and price contingencies are all included
Table 2. Project Cost by Components and Financiers
(US$ Million)
Project Component
IBRD
Loan
%
IBRD
CPF %
CPF
% of
Total
Total
Cost
Component 1
Rolling Stock Fleet Increase 355.7 83 303.9 56 68 659.6
Component 2
DC to AC Conversion 55.2 13 118.6 22 18 173.8
Component 3
EMU Maintenance Facilities
and Stabling Lines 0 0 117.7 22 12 117.7
Component 4
Technical Assistance 14.4 3 0.2 0 2 14.6
Total Project Costs 425.3 98.9 540.5 100 99.5 965.8
Front-end Fee 1.075 0.25 - - 0.11 1.075
Unallocated 3.7 0.85 - - 0.38 3.7
Total Financing Sought 430 100 540.5 100 100 970.5
Note: Physical and price contingencies are all included
1. Assuming INR/US$ exchange rate = 44.42
2. Identifiable taxes and duties are US$97 million, and the total financing need, with front-end fee and net of
taxes is US$970.5 million. Therefore, the share of project cost net of taxes is 90 percent.
42

Rolling Stock Fleet Increase
Table 3. Outlay of Project by Years
(US$ Million)
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Total
EMU Manufacture - - 20.8 62.5 119.4 101.2 303.9
EMU Electrics - - 41.7 104.2 117.9 91.9 355.7
Subtotal 0 0 62.5 166.7 237.3 193.1 659.6
DC to AC Conversion
Digital Axle Counter and Quad
cable
` 1.6 5.3 4.8 4 - 15.7
Traction substations at
Chinchpokli and Sion and six
Switching posts
Supply and installation of 110
kV cables for Chinchpokli and
Sion traction substations
- 2.2 4.9 5.1 3.5 - 15.7
- 2.8 1.8 1.3 0.6 - 6.5
OHE Maintenance Car - - 1.1 6.3 5.6 4.3 17.3
Non Bank Funded Works 2.2 35.1 21.8 20.6 19.1 19.8 118.6
Subtotal 2.2 41.7 34.9 38.1 32.8 24.1 173.8
EMU Maintenance Facilities and Stabling Lines
EMU Maintenance Facilities - 20.5 20.8 20.9 9.2 71.4
EMU Stabling Lines - 6.7 15.1 13.9 10.2 0.5 46.4
Subtotal 0 27.2 35.9 34.8 19.4 0.5 117.7
Technical Assistance
Bank Funded TA - - 1.8 5.4 5.4 1.8 14.4
Non-Bank Funded TA - - - 0.2 - - 0.2
Subtotal 0 0 1.8 5.6 5.4 1.8 14.6
Total Project Costs 2.2 68.9 135.1 245.2 294.9 219.5 965.8
Note: Physical and price contingencies are all included
43

Annex 6: Implementation Arrangements
INDIA: Mumbai Urban Transport Project-2A
126. MRVC is the project implementing agency for MUTP-2A and in that role is
accountable for satisfactory completion of all the works of MUTP-2A. MMRDA, ICF, RDSO,
WR and CR 30 are executing agencies. As the project implementing agency, MRVC is
responsible for financing and procurement of all the contracts financed by the loan, including
major equipment such as rolling stock/AC-DC equipment/cables, etc. as also for executing
certain identified works in the field with due safeguards in consultation with the Zonal Railways.
MOUs which incorporate insurance to respect EMP, time line of works and activities to be
carried out by respective agencies, etc. will be set up between MRVC and the executing
agencies.
127. The execution of new line works which interfere with the running railway and
require extensive block working are to be specifically listed out and carried out by the concerned
Zonal Railways. The new lines work which interfere with the running railway only at the track
linking on the two ends can be executed by MRVC with due safeguards.
128. The works included in MUTP-2A have been selected to ensure that there is
minimal Resettlement and Rehabilitation or land acquisition involved. This resettlement, which
is expected to be very limited in extend, will be executed out by MMRDA, as per specific
conditions stated in a Memorandum of Understanding (MOU) between MRVC and MMRDA 31 .
129. Role of MRVC: Chart 1 below illustrates MRVC’s role as implementing agency of
MUTP-2A.
30 Central Railway and Western Railway are two of the largest and busiest of the 16 zones of Indian Railways. Their
respective divisions Mumbai CSTM and Mumbai are specifically involved in this project. Indian Railways is a
department owned and controlled by the Government of India, via the Ministry of Railways. IR manufactures much
of its rolling stock and heavy engineering components at its six manufacturing plants, called Production Units,
which are managed directly by the ministry. Integral Coach Factory at Chennai (ICF) is one of these. Each of the
six production units is headed by a General Manager, who reports directly to the Railway Board. Research Design
and Standards Organization (RDSO) is a research and development organization under the Ministry of Railways,
which functions as a technical adviser and consultant to the Railway Board, the Zonal Railways, the Railway
Production Units in respect of design and standardization of railway equipment and problems related to railway
construction, operation and maintenance.
31 MMRDA is a body of the Government of Maharashtra set up under the Mumbai Metropolitan Region
Development Authority Act, 1974 Government of Maharashtra as an apex body for planning and co-ordination of
development activities in the Region.
44

Sr.
No.
130. The implementation arrangement for MUTP-2A will be as under:
Work
Implementing
Agency
Executing
Agency
Funding
Arrangement
Likely
completion
by
(A) Goods/Supply and Installation
1. EMU procurement/ manufacture
1.1 Procurement of electrics MRVC MRVC WB Loan June 2014
1.2 Manufacture MRVC ICF Counterpart Feb. 2015
1.3 Design aspect MRVC RDSO -- --
2. DC to AC Conversion
Electrical Works
2.1 Traction substations and switching MRVC MRVC WB Loan Dec. 2012
posts between CSTM-Vidyavihar
section
2.2 Laying of 110 kV cable at Sion and MRVC MRVC WB Loan Jan. 2012
Chinchpokli
2.3 Procurement of OHE maintenance
equipment
MRVC MRVC WB Loan June 2014
2.4 Traction substations and switching
posts between Vidyavihar-Thane
section
2.5 Laying of 110 kV cable at Thane and
Vadala Road
2.6 OHE modification from 1500V DC to
25 kV AC
S&T Works
2.7 Procurement, installation and
commissioning of Digital Axle
Counters
MRVC CR Counterpart Dec. 2013
MRVC CR Counterpart Dec. 2013
MRVC CR Counterpart Dec. 2013
MRVC MRVC WB Loan Dec. 2012
2.8 Procurement of Quad cable MRVC CR Counterpart Dec. 2012
2.9 Laying of cable MRVC CR Counterpart Dec. 2013
(B) Works
3 Maintenance facilities and stabling lines
for EMUs
3.1 Maintenance facilities for EMUs MRVC CR/WR Counterpart Dec. 2013
3.2 Stabling Lines for EMUs
Central Railway
Western Railway
MRVC
CR
MRVC
Counterpart
Counterpart
Dec. 2013
Dec. 2013
(C) Technical Assistance
4. Technical Assistance Studies MRVC MRVC WB Loan* June 2014
* With the exception of MUTP2A-TA6: Reduction of trespassing and improvement of safety of the track, which is
fully counterpart funded.
45

Chart 1. Implementation Arrangements for MUTP-2A
46

131. Responsibilities of MRVC (Project Management Unit): MRVC is the nodal
organization for implementing MUTP-2A on behalf of Govt. of India and Govt. of Maharashtra.
Following will the responsibilities of MRVC:
(a) To monitor and evaluate the project;
(b) To coordinate the implementation of the project;
(c) To prepare and forward periodical reports covering physical and financial progress;
(d) To prepare implementation completion report;
(e) To undertake necessary surveys and studies for project evaluation.
132. Responsibilities of Maharashtra and MMRDA: implementation responsibilities of
the Government of Maharashtra include the following:
(a) be responsible, through the MMRDA and in cooperation with MRVC, for carrying out
Project activities related to social management, including carrying out land acquisition
and resettlement and rehabilitation activities (including preparation and implementation
of RAPs), if any; and
(b) facilitate the preparation and carrying out of relevant studies and related activities and
recommendations under Component 4 of the Project.
133. Project Director of MUTP-2A: Director (Technical), MRVC is Project Director
for MUTP-2A for overall monitoring and coordination of the project. He will be responsible to
coordinate various agencies such as Ministry of Railways, Ministry of Finance, Planning
Commission, World Bank, GOM, RDSO, ICF, CR, WR and other different agencies.
134. Staffing at MRVC: MRVC will consist of a team of professionals specializing in
the following areas:
(a) Finance;
(b) Procurement;
(c) Environment and social;
(d) Training;
(e) Institutional development;
(f) Engineering;
135. These professionals could either be staff deputed from MOR or could be
outsourced from the open market. In addition, services of retired railway employees may also be
engaged in successful implementation of the project. The organizational structure of MRVC
is given in Chart 2 below.
136. Training of MRVC employees: The training of the MRVC employees are made to
familiarize with the procedures and methods as part of this project. MRVC will also arrange a
need based training program as and when required for each area of specialization.
47

Chart 2. Organizational Chart for MRVC
Officers - 58
Assisting Staff - 137
Total - 195
48

Annex 6A: Governance and Accountability Action Plan (GAAP)
INDIA: Mumbai Urban Transport Project-2A
137. The context for the preparation of the Governance and Accountability Action Plan
(GAAP) is the recognition by the MRVC and the Bank of the need to improve accountability
arrangements to reduce the chances of corruption and enhance transparency in implementation of
MUTP-2A. The GAAP has been prepared taking into consideration key risks that may be
encountered during implementation of the project, relevant issues identified from the Guidance
Note on Transport Sector GAAP, lessons learned from MUTP-1 and the measures that are
already/would be in place to mitigate the impact of these risks on achievement of the project
development objectives.
138. The GAAP seeks to build upon the GOI’s efforts and existing systems such as the
Right to Information Act (RTIA, 2005), initiatives of the Central Vigilance Commission in
enhancing transparency, and various measures already institutionalized by MRVC. It is
premised on enhanced policies, procedures, institutions and capacity for better governance. The
underlying assumption is that such mechanisms will enable increased public scrutiny of the
project, better address stakeholder concerns and thereby enhance accountability.
Key Governance Risks
139. Based on a review of existing procedures, policies, processes and institutional
capacity at MRVC, Indian Railways, and applicable GoI rules and regulations, the following
have been identified as the critical risks in project implementation:
(a) Weak disclosure of project information leading to low stakeholder participation and
accountability
(b) Weak complaint and grievance redressal mechanisms
(c) Risk of collusion, fraud and corruption in procurement
(d) Weak internal audit and control procedures leading to risk of financial irregularities
(e) Weak institutional capacity for project implementation
(f) Weak coordination leading to risk of inordinate delays in physical progress of works
(g) Implementation delays due to socio-political interference
Some Opportunities
140. MRVC has a pro-active vigilance unit headed by a Chief Vigilance Officer (CVO)
(part-time), who is assisted by a Deputy CVO and a Chief Vigilance Inspector (part-time). This
unit works in close coordination with the Vigilance Department of the Ministry of Railways and
the Central Vigilance Commission. It has been actively focusing on preventive vigilance, system
improvements through short inspirational video films with anti-corruption messages, interactive
presentations and discussions on complex contract management issues. The unit also publishes a
monthly newsletter “Prahari” (Sentinel) and organizes annual events such as vigilance quiz,
caption contests, debates and essay competitions to raise awareness about fraud and corruption
amongst the staff.
49

141. To enhance transparency and fairness in procurement, MRVC proposes to
introduce Integrity Pacts during 2009-2010 in association with Transparency International and
the Central Vigilance Commission on all its contracts.
142. MRVC has obtained ISO9001 certification for quality of operations. On each of
the contracts proposed in MUTP-2A, quality control would be as shown in the table below:
S.No. Contract Quality Control
1 Supply and laying of 110 kV cable MRVC, Zonal Railways
2 DAC RDSO
3 EMU Procurement Prototype by RDSO; routine inspection by Resident
Railway Advisor in country of manufacture
4 Installation and commissioning of
TSS/switching posts
5 Procurement of machinery and plant
for OHE maintenance
RITES India Ltd., RDSO (if prototype)
Resident Railway Advisor in country of manufacture
(as needed)
In addition, MRVC has already been engaging various third parties/technical bodies for technical
reviews/assessments during execution of MUTP-1 and envisages similar engagements in MUTP-
2A, as necessary.
143. Through MUTP-1, MRVC has developed the ability to liaise effectively with the
several departments and agencies of the IR (Board, Zonal Railways, RDSO, ICF), the GOM etc.
which would considerably reduce the risk of delays in coordination and decision-making in
MUTP-2A. MRVC conducts meetings of the coordination committee every 45 days with the
zonal railways and other executing agencies to discuss pending issues on MUTP-1, and
envisages continuation of such coordination meetings on MUTP-2A as well. In addition, the
MRVC reports to the Railway Board monthly on each aspect of projects under implementation.
In the annual ratings of PSUs by the GoI's Department of Public Enterprises under Ministry of
Heavy Industries and Public Enterprises, MRVC's performance has been rated as very good
(2007-08) and excellent (2008-09), which also points to better coordination as well.
144. Financial management systems in MRVC comprising budgeting, accounting,
internal controls, financial reporting and auditing were put in place during the implementation of
MUTP-1. Following a Corporate Governance and Financial Accountability assessment by the
Bank, MRVC has formulated an action plan to further strengthen some of these areas as
mentioned in Annex 7.
145. MRVC’s accounting staff (mostly on deputation from the Indian Railways) is
experienced and familiar with the Bank’s requirements.
146. There is a 3-tier system of audit in MRVC comprising of: (i) concurrent internal
audit by management appointed firm of Chartered Accountants under a Terms of Reference; (ii)
annual statutory audit of the entity by independent firm of Chartered Accountants appointed by
50

the Comptroller and Auditor General (CAG) of India; and (iii) audit by CAG through the
Principal Director of Commercial Audit.
Action Plan
147. Taking the above into consideration, a GAAP has been prepared that comprises of
(i) project level actions that support transparent systems and processes for procurement, financial
management and reporting and better quality assurance through enhanced demand-side
mechanisms within the project, and (ii) organization level reforms to create an enabling
environment for better enforcement and prevention of corruption. These actions are in the
following areas:
(a) Actions to enhance policies
(b) Actions to enhance procedures
(c) Actions to enhance institutions
(d) Actions to strengthen capacity and human resources
The complete action plan matrix is given in Table 1. Key components of the action plan are
described in the following sections.
Actions for Enhancing Information Disclosure
148. India passed the Right to Information Act, in 2005 and the Act became operational
across India from 12 October 2005. The Act mandates the disclosure of and universal access to
information wherever in the public interest. Compliance to the Act is required for all public
entities including MRVC.
149. Implementation of RTI requires systems for on demand and suo moto disclosure of
information, and for each government department to develop a disclosure policy, automated
systems for record and document management, and information handling, and appointment of
trained staff, programs for citizen awareness, and annual progress reporting. As mandated by the
Act, MRVC has appointed on part-time basis a Public Information Officer (PIO), Assistant
Public Information Officer and the Appellate Authority and has uploaded comprehensive
information about MRVC’s functioning, project related information, agency’s annual report,
sources of funds, directory, roles and responsibilities of MRVC officials, etc. on MRVC’s
website (www.mrvc.indianrail.gov.in).
150. To comply with the RTIA provisions for both on-demand and suo moto disclosure
of project related information, MRVC has also formulated a comprehensive project disclosure
policy (as given in Chapter 9 of the implementation manual).
Actions for Enhancing Complaint Handling
151. MRVC will establish a system to register and monitor status of follow up of all
received comments, suggestions and grievances and enable the same on its web site
(www.mrvc.indianrail.gov.in), which will be updated monthly. MRVC will record and/or refer
as appropriate all incoming grievances or complaints pertaining to the MUTP-2A project.
51

152. MRVC will also establish procedures to deal with external complaints on
procurement, fraud/corruption and construction quality (as described in Chapter 9 of
Implementation Manual). MRVC will respond to all complaints, pertaining to MUTP-2A within
15 days of receipt, with copy to Managing Director, MRVC. Tracking of the status of
complaints, related investigations and measures taken will be reported in monthly reports to
management. Complaints deemed possible serious infringements may be further investigated by
the Vigilance unit of MRVC and the Chief Vigilance Commission. These cases will also be
included in quarterly reports to the Bank.
153. Contact information (dedicated email address, phone numbers) of the complaint
handling and vigilance officials shall be widely publicized. Web-based campaigns, newspaper
advertisements and displays on hoardings at highly visible locations will also be made to
encourage public to report any misconduct, misappropriation and grievances to MRVC.
Actions to deter Fraud and Corruption
154. MRVC will formulate a transparent policy describing incentives for
whistleblowers, sanctions for staff found indulging in fraudulent behavior and after due
approvals, disclose these to the public. If as a result of any such information provided by the
member of the public, cost savings are achieved or charges of misconduct and misappropriation
are proven, such members of the public will be awarded some recognition such as a certificate of
excellence or felicitation at a public ceremony with or without a monetary reward.
Simultaneously, strict disincentives will be announced for the erring members of the departments
and remedial actions established in cases of fraud and corruption. This will include sanctions to
government staff proven to be involved in such cases.
155. Any entity that is found to have misused funds, or not effectively carried out key
elements of the anti-corruption plan, may be excluded from participation in subsequent works of
MRVC. Information regarding such cases, where lessons are learned and funds are retrieved, will
be widely published for information of the members of public. Strict procedures to ensure
anonymity of informants will be enforced.
Actions to Enhance Quality and Project Monitoring
156. In addition to design reviews by MRVC/RDSO, MRVC will engage independent
third parties/quality assurance consultants such as Indian Institute of Technology, National
Institute of Design under agreed Terms of Reference for evaluations of technical designs and
advice on technical issues wherever necessary as per the contractual provisions. These entities
would also verify achievement of project milestones, enabling better controls over contractor
payments. MRVC will also commission impact assessment studies and user satisfaction surveys
annually to obtain stakeholder feedback.
157. To strengthen project monitoring, MRVC proposes to develop a MIS within a year
of project start, and enable it online for quick review and decision-making. To facilitate the
review, MRVC will formulate a score-card method for judging physical and financial progress of
the project at any stage. Proposed annual project audits will also enable better monitoring.
52

Actions to Strengthen Institutions and Capacity
158. Following an assessment of the current corporate governance and financial
management arrangements, MRVC has evolved an action plan for strengthening the same. The
actionable areas include strengthening of internal audit, project monitoring and contract
management arrangements. In addition, the proposed project will also be subject to annual
project audit under Bank agreed TOR and the complete report would be published on MRVC’s
website.
159. MRVC will also start building a database with procurement and contractor
performance data from the project such as number of bids received, bid prices, unit prices,
specifications, time and cost overruns. This will enable statistical analysis to preclude collusion
and facilitate reference checks on future bids. MRVC will also disclose on its website the process
for disqualification of bidders found to engage in fraudulent/corrupt practices.
160. MRVC will undertake a comprehensive training needs assessment for its entire
staff, and finalize a training plan. This, along with the TA studies undertaken 32 should facilitate
strengthening of capacity. In addition, MRVC proposes to include training on the RTIA for all its
officers and staff to sensitize them on the need for transparency of information.
Monitoring Indicators
161. The Bank will monitor implementation of these elements wherever necessary as
per the contractual provisions 37 , through inter alia:
(a)
(b)
(c)
(d)
(e)
Disclosure of information will be supervised mainly through: (a) checking the
frequency and comprehensiveness of website updates, and (b) checking the
comprehensiveness of information available on citizen information boards at site(s),
newsletters etc.
Quality monitoring will be supervised through the harnessing of third parties in
review of project design and monitoring, periodicity of reports of the impact
assessment and user satisfaction surveys.
The complaints handling system and the system of sanctions and remedies will be
supervised mainly through: (a) periodic review of statistics based on records kept
on the website of MRVC; (b) field level checks to ensure that problems are being
reported and acted upon; (c) review of quarterly reports on complaint handling
submitted to the Bank
Institutional improvements will be monitored through the progress in
implementation of the CGFA action plan, online complaints handling system,
procurement and project management database and operability of the project MIS.
Capacity enhancements will be monitored through percentage of staff and officers
sent for training including on RTIA, number and type of preventive vigilance
initiatives.
32 See Annex 4
53

Indicative Costs
162. The cost of the GAAP implementation is part of the technical assistance
component of the project and project implementation costs (financed by MRVC) comprising of:
(a) cost to develop MIS; (b) costs to develop online complaint handling mechanism; (c) costs to
commission third-party monitors/quality assurance consultants; (d) costs to commission the
annual impact assessment and user satisfaction surveys; (e) cost of training staff.
163. It has been agreed that MRVC and the Bank will review the implementation of the
GAAP during the supervision missions and a comprehensive review at mid-term. This will
enable an evaluation of the GAAP’s effectiveness and opportunity for mid-course corrections.
54

Table 1: Governance and Accountability Action Plan
1. Policy Actions to Enhance Transparency
Risk Area
Action(s) to be taken to mitigate risk
Project-level
Formulate a proactive public disclosure policy and
disclose all project information to the public through
Discretion in
decision making,
lack of
transparency and the MRVC web-site.
accountability
and political to highlight issues.
interference that
may adversely
affect project
outcomes.
2. Measures to Enhance Procedures
Corruption/
collusion in
procurement;
weak financial
management and
complaint
handling
procedures;
weak
coordination
with other
executing
agencies
Engagement with media during supervision missions
Entity-level
Formulate a transparent policy describing sanctions for
staff found indulging in fraudulent behavior and
incentives for whistleblowers.
Project-level
Standardize eligibility criteria for bidders and product
quality needs to preclude confusion. Consult bidders
through pre-bid meetings on the same as needed;
discourage repeated cancellation of bid invitations.
Incorporate feedback received from participatory
monitoring exercises on financial matters in periodic
financial reviews.
Sign Memoranda of Understanding with all the other
executing agencies for better coordination.
Entity-level
Appoint a complaint handling officer and establish
procedures to deal with complaints on procurement,
Maintain an updated database on complaints received
and action taken for suo moto or on-demand public
disclosure
Strengthen systems and procedures to implement RTI –
through Website, Newsletter, Citizen Information Boards
etc.
Improve financial management systems to facilitate
management decisions, periodic monitoring of budgets
and timely reporting.
Notify details of the process for disqualification of
bidders who engage in misrepresentation/ fraudulent/
corrupt practices on MRVC website (Railway Board
policy of disqualifying bidders who engage in such
practices for supplying to Railway Stores will be adapted
for this)
3. Measures to Strengthen Institutions
Weak complaint
and grievance
handling
mechanisms,
weak corporate
governance,
weak quality
control and
monitoring
Project-level
Introduce Integrity Pacts for increased Transparency and
Integrity on all contracts in MUTP-2A
Introduce annual project audit and need-based internal
audit and take prompt action to resolve all audit
observations.
Develop a project MIS for effective project monitoring
and review and link it to the web for quick review and
Timeline/Stat
us
Policy
formulated and
agreed upon.
As needed.
July 2010
Continuous
Quarterly
June 2010
July 2010
March 2010
Already in
place; will be
further
strengthened
August 2010
July 2010
As and when
mutually
agreed
Annual
To be
developed
Implementing
Officials
PIO, AA,
HODs
Bank, MRVC
BOD,
Vigilance
Officials
HODs
Finance
Officials
BOD
BOD,
Vigilance
PIO, AA, CO
and HODs
PIO, AA,
HODs
MRVC FM
Vigilance
officials
BOD/Vigilan
ce Officials
Finance
officials,
BOD
HODs
55

follow up action.
during the 1 st
year of project
execution
Commission impact assessment studies and user
satisfaction surveys to obtain user feedback
Empanel reputed third-parties for technical
design/studies and/or evaluations.
Entity-level
Implement corporate governance and financial
accountability action plan.
Develop a comprehensive comments, suggestions and
grievances handling system and enable the same on the
MRVC Website
Commission an online system for registering, tracking
and monitoring of complaints.
Start compiling database on number of bids, bid prices,
unit prices, specifications, contractor performance for
future reference.
4. Measures to Enhance Human Resources (all at entity-level)
Weak
implementation
arrangements TA.
that may
adversely affect
MRVC staff
project processes
and results
Key: AA = Assistant Accounts Officer
Identify training needs and finalize training plan for all
staff. Conduct appropriate training for staff from Bank
Conduct campaigns to spread awareness of anticorruption
measures and vigilance mechanisms among
Annual
As needed.
Plan agreed
upon.
Already in
place
July 2010
July 2010
Continuous
Periodically.
BOD/HODs
HODs
Finance
officials,
BOD
Vigilance
Officials and
Complaint
Handling
Officers
Vigilance
Officials and
Complaint
Handling
Officers
Procurement
officials,
HODs
HODs/HRD
Vigilance
Officials
Conduct training on RTI for all MRVC officers and staff Continuous HRD and
PIO, AA
BOD = Board of Directors
CO = Complaints Officer
HOD = Head of Department
HRD = Human Resources Department
PIO = Public Information Officer
56

Annex 6 B: Supervision Strategy Matrix
INDIA: Mumbai Urban Transport Project-2A
164. The Supervision Strategy is to ensure that the objective of MUTP-2A project are
achieved satisfactorily and timely manner and the implementation of all project activities follow
agreed procedures and complies with all fiduciary and safeguard requirements. Supervision
Strategy for the proposed MUTP-2A is developed based on the lessons learnt from the ongoing
Mumbai Urban Transport Project, other projects in India Portfolio and India Health Sector DIR,
which indentified, among other things, weaknesses in Bank’s supervision strategy and lack of
field and independent verification of project activities early on. Also, the supervision strategy
links the key project risks identified in the Risk Identification Worksheet with the mitigation
measures laid out in the Governance and Accountability Action Plan.
165. Supervision Methodology: The project supervision will be based on (i) physical
verification of the works by the Bank task team and Bank hired consultants; (ii) Sample cross
checking and verification of the progress reports provided by the client, (iii) Close scrutiny of
audit reports and financial management reports (iv) Carrying out interim missions, in addition to
full implementation support missions on key issues, (v) discussions and regular meetings with
the implementing agency and other stake holders, (vi) Close follow up with the implementing
agency on the key issues highlighted during the implementation support missions and (vii) active
involvement of the Bank management and the Department of Economic Affairs to resolve key
issues specially those related with fraud and corruption.
166. Team Composition: The World Bank supervision core team will comprise
specialists having high level of skills covering urban transport, railway engineering, social and
environment impact management, procurement, financial management and audit, institutional/
governance, and monitoring and evaluation.
167. Most of the Bank task team will be based in Delhi Bank office, which will allow
prompt visits by individual team members to the field as and when required. In addition, the
Bank will hire from time to time international experts to check the quality of the work and
provide the expert support for overall project implementation.
168. Frequency of the visits: The Bank team will visit project site twice a year. In
addition, interim missions will be carried out on key issues. The supervision task team will
develop, together with the client, a check list to review the implementation of the project
including safeguard and fiduciary actions. This will ensure an objective way of monitoring the
project.
169. Supervision Budget: A supervision budget of US$200,000 per year is estimated
to cover the cost of Bank staff, consultants and travel expenses.
170. Supervision strategy and expected outcome: The main supervision activities to
be covered by the Bank and the client are provided in the table below which also highlights the
expected outcomes.
57

Table1. Supervision Strategy Matrix
Client’s role 33 Bank’s role Expected outcomes
Review of the designs to be carried out by
MRVC/ RDSO and supervision of the
works to be carried out by MRVC and other
executing agencies.
MRVC clearance process to be followed for
all works, goods and TA contracts for the
value upto INR 1000 million (US20
million) and for those above this value,
evaluation report to be forwarded to Indian
Railway Board for review of the
recommendations
To use Bank’s Standard Bid Documents or
updated model documents as applicable
MRVC staff to attend training courses on
procurement, contract administration and
project management.
All the actions listed in Annex 7
TECHNICAL and Quality ASPECTS
Implementation support mission and
interim missions
Review of the progress reports
Discussion and regular meetings with the
implementing agency and other stake
holders.
PROCUREMENT
Most of the contracts will be prior
reviewed.
Review of the contracts not subject to prior
review by the Bank will be carried out
either by the Bank team or Bank hired
consultant, who will review agreed samples
of such contracts. Observations from such
reviews shall be shared with the Borrower
and lessons learnt will be implemented for
future procurement.
FINANCIAL MANAGEMENT
Focus on the adequacy of the financial
reporting, including timeliness and
completeness of the financial reports.
Desk review of the audit reports and follow
up on action taken
Participating in site visits to review
MRVC’s internal control procedures and
practices.
Compliance of the
contract conditions,
engineering design
and technical
specifications
Reduced possibility of
cost and time over run
Reduced possibility of
contract variations.
Bank / MRVC
procurement
guidelines followed
Open, transparent and
competitive
procurement achieved.
Compliance with all
financial management
requirements;
Audit comments taken
into considerations;
Financial progress
closely following
physical progress.
Coordinate and monitor safeguard measures
to mitigate impacts; and periodically report
about progress.
SOCIAL AND ENVIRONMENTAL SAFEGUARDS
Monitor safeguard and value added
measures implemented by MRVC and
provide technical advice as necessary and
appropriate through discussion and sharing
of emerging issues.
Compliance with
safeguard policies and
achieving social and
environmental value
added outcomes.
33 Includes NGO and consultants hired by the client
58

Annex 7: Financial Management and Disbursement Arrangements
INDIA: Mumbai Urban Transport Project-2A
Summary of Financial Management (FM) Assessment
171. The Bank funded MUTP-1 34 under which MRVC is responsible for
implementation of the rail component is continuing. MRVC is the sole implementing agency for
MUTP-2A and will be responsible for FM arrangements for the project. This FM assessment
concludes that MRVC has a financial management system which is considered adequate, to
account for and report on the project resources and expenditures accurately. However there is
scope for further improvements in these FM arrangements and in this respect an action plan has
been discussed and agreed with MRVC.
Background
172. MRVC was incorporated on July 12 1999 as a government company under the
Ministry of Railways (MOR) to implement the rail component of an integrated rail cum road
urban transport project called Mumbai Urban Transport Project (MUTP). Its vision/ mission is to
develop world class infrastructure for an efficient, safe and sustainable railway system in
Mumbai suburban section to provide comfortable and friendly train services to the commuters 35 .
MRVC is also involved in the further planning and development of Mumbai Suburban Rail
System for improved rail services in close coordination with Indian Railways and Government of
Maharashtra. As per Article 177 of the Memorandum and Articles of Association of MRVC the
period of validity of MRVC is minimum five years and maximum 15 years. MRVC has applied
to both MOR and GOM for extension of validity period. The approval is expected shortly.
173. MRVC’s has a share capital of Rs.25 crores held in the ratio of 51:49 by Indian
Railways and Government of Maharashtra. Its existing manpower is approximately 180. It
exercises autonomy and delegation of financial powers as applicable to Schedule-A public sector
companies. MRVC’s sources of revenue comprise Direction and General Charges recovered
from projects executed by MRVC, Central and Western Railway, MMRDA and other executing
agencies under MUTP-1 and interest on term deposit.
174. Operating results of MRVC:
Rs. Crores
Particulars 2008-09 2007-08 2006-07
Total income 36.38 32.95 17.04
Total expenditure 16.65 10.44 7.04
Surplus 19.73 22.51 10.00
Accumulated surplus 81.48 63.84 41.23
175. MUTP-2A requires a total financing of US$970.5 million (Project costs of Rs.4290
crores). The share of IBRD is estimated at US$430 million and the balance US$540.5 million is
34 The overall coordinating implementing agency under MUTP-1 is Mumbai Metropolitan Regional Development
Authority (MMRDA), responsible for the road component of the project including R&R. Municipal Corporation of
the Greater Mumbai, Bombay Electricity and Bus Services ; Maharashtra State Road Development Corporation
,MRVC and Traffic Police are other executing agencies under MUTP-1.
35 Source Corporate Plan 2006-2016.
59

counterpart funded. The assets created under the project will be owned by CR/ WR as
appropriate.
Financial Management Strengths, Weaknesses and Mitigating Arrangements
176. The project draws the following strengths in the area of financial management: a
budgeting, accounting and reporting system has been operational in the entity for the past several
years, which will be used for accounting and generating the required financial reports under the
project. MRVC is implementing satisfactorily the rail component of MUTP-1 funded by the
Bank and has experience of the Bank’s FM policies and procedures including those relating to
special commitments. A detailed project implementation manual has been prepared.
177. The Bank team conducted a review of financial management, corporate
governance and accountability arrangements of MRVC 36 which has indicated that MRVC has
institutionalized certain cardinal principles in areas like accounting, auditing, internal control,
budgeting and reporting which have laid the foundation for a basic financial accountability and
corporate governance framework in the organization. However there is scope to further improve
financial accountability and corporate governance arrangements of the organization to further
strengthen the capacity to more effectively manage the proposed project. Actions have been
initiated to strengthen internal audit and for updating finance manuals. Others are proposed in
detail in the action plan (refer to Table 3, page 71). The overall FM risk is rated at Moderate.
Type of Risk
Inherent
Risks
Country level
(India)
Entity level (at
MRVC level)
Risk
Assessment
Risk Mitigating Measures
Residual Risk
M India country level rating. GoI is the borrower. M
H
Action plan for improvement of corporate governance
and financial accountability arrangements agreed during
preparation.
Project level H Internal controls built into the project design with
enhanced internal audit and improved contract
management. Project FM manual as part of overall
Implementation Manual is being finalized
Overall inherent Risk
Control Risks
Budgeting S Budgeting framework exists; Monitoring framework will
be improved; Annual work plans and cash forecasting
will be enhanced.
Accounting M Separate trial balances of MUTP-2A will be prepared;
Accounting and reporting formats will be put in place;
Internal H
Controls
Internal audit system will be strengthened; Audit
committee will be strengthened with independent
directors and made more effective; Internal controls for
contract management will be enhanced.
Funds flow M Funds flow to MRVC through the budget route from
MOR and GOM. Counterpart funding will be available.
Similar fund flow mechanism under MUTP-1 found
effective.
S
S
S
M
L
S
L
36
A report on “Corporate Governance and Financial Accountability Arrangements” prepared by the Bank is
available in the project files. The report contains a detailed assessment and identifies areas for improvements along
with an action plan.
60

Financial
Reporting
S
Formats agreed for project reporting; Internal financial
reporting for entity will be enhanced.
Auditing S Independent project auditor with agreed terms of
reference.
Overall control Risk
RESIDUAL RISK RATING
M
M
M
Moderate
178. The residual risk rating is moderate as a few major off-line supply contracts are
proposed to be funded under the project. Direct payment by the Bank under special commitment
will be availed in specific cases (which has been used under MUTP-1). There are five supply and
installation, two goods and seven technical assistance contracts which are subject to prior review
by the Bank. Independent third-party consultants will be appointed 37 to certify the quality and
progress of work and acceptability of the equipment/ works on periodic basis. Equipment
procured/ constructed under the project will be handed over to WR/ CR after commissioning and
joint review by CR/WR and MRVC.
179. Arrangements for Oversight and Accountability: MRVC will be responsible for
the FM arrangements of the project. At the helm of affairs of MRVC is the Board of Directors
(Board). As per the Memorandum and Articles of Association (MAA) of the Company the
maximum number of directors is 11. The Chairman is part time. The Managing Director is
supported by three full-time directors (Technical, Projects and Finance); two part-time directors
(Resettlement and Rehabilitation and Infrastructure and Commercial Development); two parttime
official directors and one part-time non-official director. There is scope for the appointment
of one more part-time non-official director, since there is provision in the MAA for two part-time
non-official directors (independent directors) 38 . The Board meets quarterly 39 . It is assisted by a
full-time Company Secretary and Heads of Departments.
180. There is a Board level audit committee set up in accordance with the requirements
of section 292A of the Companies Act 1956 with three members – Director (Technical), and two
part time official directors. Thus there are no independent directors in the present audit
committee and the audit committee meetings are held twice annually against quarterly prescribed
by department of public enterprises (DPE) guidelines 40 . MRVC will (i) induct the existing nonofficial
Director in the audit committee and request GOM to nominate a non-official Director
who would then be inducted in the audit committee (ii) designate one of the non-official
directors to function as the Chairman of the audit committee and (iii) increase the frequency of
the audit committee meeting to four times in a year in due course of time.
37 MRVC appoints the following agencies/ individuals for inspection: RDSO (for prototypes); Resident Railway
Advisors (for imported products) and RITES (for locally manufactured products/ works). MRVC’s engineering team
also carries out inspection of works.
38 The provision for two part time non official Directors is less than the required number of four or one-third of the
Board strength as prescribed by the Department of Public Enterprises (DPE) in the corporate governance code for
central public sector undertakings (CPSUs). Implementing this provision would require restructuring the Board of
MRVC. MRVC has requested the Railway Board to approach DPE for relaxation of the provision.
39 There is monthly review of MRVC works by MD and coordination meeting at 45 days interval between MRVC,
CR, WR and GOM to review progress of MUTP.
40 DPE’s code on corporate governance for CPSUs prescribes that two-thirds of the audit committee members
should be independent directors and that the chairman of the audit committee should be an independent director.
Further, the charter of audit committee has been defined by MRVC which also defines the frequency of meetings (at
least two meetings) and the scope of the audit committee (covers review of internal controls, financial statements
and half-yearly reports, internal and statutory audit reports etc). The frequency of meeting of the audit committee is
less compared to the DPE guidelines which prescribe at least four meetings annually.
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181. A detailed Project Implementation Manual will be in place which will provide the
structure, systems and procedures, controls and reporting arrangements for overall project
management of MUTP-2A including FM and contract management.
182. Fund Flow: MUTP-2A will be financed through IBRD Loan and counterpart
funds from IR and GOM. IR and GOM will share equally the cost of the project as well as the
proceeds of the loan and its repayment. The counterpart funding will also be on a 50:50 cost
sharing basis. To contribute to the repayment of the loan IR has levied a surcharge on suburban
rail tickets in Mumbai area being collected by WR and CR. 50 percent of the surcharge collected
will be made available to MOF representing MOR’s contribution to the consolidated fund of
India towards servicing of the MOR’s share of the loan and the remaining 50 percent of the
surcharge collected will be passed on to GOM through MRVC, or adjusted against funds
receivable from GOM. The expenditures of the project from the proceeds of the loan as well as
from counterpart funds are routed through MRVC (see Chart 1).
Chart 1. Fund Flow Arrangements
Legend
Loan disbursement
Loan repayment
Grant by IR/GOM
IBRD Loan
Ministry of Finance/
Govt. of India
GOM
955 cr. 955 cr.
Mumbai Railway Vikas Corporation
IR
1. Loan 1,910
1,200 cr.
Jointly taken by IR & GOM
2. Counterpart Funding
1,200 cr.
Grant by IR 1,200
GOM 1,200
3. TOTAL (Rs. Crore) 4,311
Rolling Stock
Fleet Increase
DC to AC
Conversion
Maintenance
Facilities
Stabling Lines
Technical
Assistance
Levy of surcharge
collected by CR & WR
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183. The project will be funded through budget releases to MRVC by MOR/ IR and
GOM as in the case of MUTP-1. Separate budget codes will be established for the purpose by
MRVC. The Bank loan will finance (i) procurement of electrical equipment for rolling stock, (ii)
off line works including setting up of new traction sub-stations and switching posts, procurement
of digital axle counters and catenary maintenance equipment and (iii) technical assistance for
studies for sustainable expansion of rail services; programs for improving passenger convenience
and information; plans for improving safety and environmental management of operations;
capacity for increased operational efficiency; and training. The remaining supplies and works
will be counterpart funded: manufacture of trains at Chennai ICF; new traction substations, EMU
maintenance facilities and stabling lines and on-line works under AC/DC conversion. The
detailed project cost and sharing between IBRD and counterpart are provided in Annex 4. The
executing agencies – CR, WR, ICF and RDSO will prepare estimates for the expenditure on the
relevant sub-projects in their annual budgets and inform MRVC. MRVC will prepare the
consolidated annual project budget/ expenditure schedule taking into account the inputs from the
executing agencies and notify both MOR and GOM for creating necessary budget provisions.
184. Each year after passing of the Railway Budget, the Railway Board will issue a
sanction order allotting funds to MUTP-2A and authorizing transfer of funds to MRVC for
further re-allocation and transfer of funds to the executing agencies concerned. GoM’s annual
budget will create a budget head for MUTP-2A under the Urban Development Department for
receiving the Additional Central Assistance from GoI and passing it on to MRVC through
MMRDA. MMRDA’s annual budget estimates will provide for receipt of ACA and counterpart
funds from GoM, and its disbursement to MRVC. Funds for the project will be received by
MRVC through quarterly releases by MOR/ IR and from GOM against periodic demands by
MRVC. MRVC will maintain a common bank account and will book for the resources and
expenditures by project and activity and report to the Bank through IUFR.
185. Based on funds requirement of the various executing agencies, MRVC will
provide advances and the executing agencies will submit expenditure statements on periodic
basis. The MOU between the executing agencies and MRVC will regulate the periodic fund flow
and reporting including submission of annual audit report on expenditure statements by the
executing agencies.
186. Disbursement Arrangements: The table below shows disbursement categories and
loan financing percentages:
Expenditure Category
Amount
(US$ million)
Financing Percentage
1. Goods, Supply and Installation 412.364
Rolling Stock Procurement 355.696 100%
DC to AC Conversion 55.155 100%
Simulation software 1.513 100%
2. Consultant Services and Training 12.894 100%
Total 425.258
Front end Fee 1.075
Unallocated 3.667
Total 430.000
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187. The IBRD funds will flow to MOR/ IR (as a budget grant) and GOM (through
ACA) from MOF. IBRD will advance an amount equivalent to six months forecast expenditure
which will be deposited in the Designated Account that will be opened by MOF. Subsequent
disbursements by the Bank will be routed through the Designated Account. Disbursements by
IBRD would be made on the basis of the quarterly IUFRs 41 submitted by MRVC. Disbursement
options would include IUFR-based advances against forecasts, reimbursements, direct payment
to suppliers including special commitments/ letters of credit. Supporting documentation,
including completion reports, certifications, bills and other documentation will be retained by
MRVC and made available to the Bank during project supervision. These would also be audited
as a part of annual project financial statements audit and subject to routine internal audit.
Retroactive financing of up to 20 percent of project cost will be available under the project for
payments made within 12 months prior to the date of the legal agreement and to be eligible, the
activities should be procured as per Bank guidelines on procurement.
188. IBRD Project Accounting: The number of transactions under the IBRD financed
project is expected to be few large and bulky transactions except the payments under TA
component. All contractual payments for the project will be made after due verification of the
bills in accordance with the procedures laid down in the accounting manual as updated by the
company/ project implementation manual. The project would have a separate trial balance and
financial statement which will help in distinguishing costs financed by the proposed World Bank
loan.
189. Separate general and sub-ledger codes will also be established to capture MUTP-
2A budget and expenditure category/ component/ contract wise for monitoring and reporting to
facilitate monitoring of budgeted and actual expenditure of the project on periodic basis, analysis
of variances and corrective actions. The project budget and variances will also be reflected in the
quarterly interim un-audited financial report (IUFR) of the project and the balance in hand would
be reconciled with the project bank statement.
190. Supplier bills will be checked and authorized by competent authority and
independent inspector as specified for the project. Project progress and milestone completion
will be independently certified before payment. Project finance personnel will check bills and
pass them for payment in accordance with the agreements/ work orders, pre-dispatch inspection
reports (for supply contracts), inspection certificates, measurement books, and original bills etc.,
as per contractual provisions. All original bills and related documents and records etc will be
maintained by MRVC accounts and will be subject to both internal and statutory audit.
191. Following laid down procedures, project monitoring will be carried out on a
regular basis. Suitable project monitoring software will be used 42 as a monitoring tool by project
in charge and quarterly progress reports in both physical and financial terms will be provided to
the Bank through the IUFR.
192. As long as the loan is open, IUFR in an agreed format will be required giving
details of funds received (IBRD and counterpart) project expenditure incurred during the quarter,
year-to-date and project-to-date indicating separately expenditure out of IBRD funds and
counterpart funds and comparing them with budgets and variances; project trial balance;
41 MRVC would have the flexibility of furnishing reports earlier (say on a monthly basis) to seek early
replenishments wherein they could also provide forecasts for a shorter period than six months.
42 MRVC currently uses MS Project software for project monitoring and is considering Prima Vera under its
computerization plan.
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projected IBRD funds requirement in the next two quarters; summary of claims and
disbursements under IBRD; progress of contracting and contract payments; physical and
financial progress of the project. The financial information in IUFR will be based on MRVC’s
financial systems and submitted to both project management and IBRD. The annual project
financial statements, which would be similar to the format of the IUFR would be audited and
submitted to the Bank and disclosed in the website. The procedures will be clearly laid down in
the Project Implementation Manual.
193. Assets Procured/ Constructed under the Project: Railway assets procured/ created
under the MUTP-1 project by MRVC are the property of Indian Railways and under their
safeguard and control. The railway assets under construction appear in MRVC’s books as capital
work in progress subject to joint inspection and these are handed over to CR/ WR after
commissioning 43 .
194. Project Contract Management: Each contract will be assigned a project manager
(PM) who will be the authorized representative of the employer responsible for contract
management. The project implementation manual provides guidelines on contract management
and specifies responsibility of the PM 44 , contractor, submission of detailed work program,
monitoring of status of clearances, monitoring of work execution and periodic review of work
progress. MRVC is using MS Projects for contract monitoring.
195. R&R Payments: There is no R&R envisaged under MUTP-2A. However in the
event of the need for land acquisition, MRVC will take necessary steps in consultation with
GOM and MMRDA will handle R&R under the existing arrangement prescribed for MUTP-1.
Both land acquisition and R&R will be counterpart funded. In the event of any R&R related
payments, the fund flow and accountability arrangements would be agreed and reviewed from
FM perspective in advance.
MRVC Financial Management Arrangements
196. Staffing: The FM function is headed by a Director, Finance and supported by
Financial Advisor and Chief Accounts Officer (FA&CAO). The latter is assisted by two Senior
Accounts Officers (SAOs) one of whom is the Coordinator for the World Bank MUTP-1 project;
a Chartered Accountant (appointed as a Retainer); eight Senior Section Officers (SSOs); an
Accounts Assistant; and three Consultants (retired officials). The total staff strength of the
Department is 13, all on deputation from Indian Railways for periods ranging from three to five
years. The present staff members have accounting background and experience. It is proposed to
strengthen FM with an additional Deputy FA&CAO reporting to the FA&CAO and supported by
43 MRVC’s own assets comprising furniture, office equipment etc and construction of leased flats are accounted for
and depreciated in accordance with Companies Act requirements. Fixed assets registers are being maintained and
physical verification of assets are carried out periodically.
44 These include ensuring the execution of project as per the scope of the work, setting the standards to which the
work shall be constructed and completed, authorizing payments, approving any variations or design changes within
the overall scope of the work; maintain proper records for quality, inspection, rejection or acceptance of work, and
make available such records as may be called for by the Employer. PM to also ensure that bank/ performance
guarantees, insurance policies and powers of attorneys are submitted on time, that provisions relating to extension of
contract, quality assurance, safety, environmental protection provisions, liquidated damages, etc. are adhered to, that
extension of the completion period and provisions of liquidated damages are imposed as per the delegation of
powers of MRVC and that disputes are handled as per contractual provisions.
65

three Senior Accounts Officers. The Deputy FA&CAO will also act as the Coordinator for
World Bank projects. A staffing and training needs assessment based on current and future
workload is being worked out by MRVC 45 . The present budget on training is INR 25 lakhs
approx. which is expected to go up to INR 50 lakhs to include MRVC training. The TA
component under the project provides for training of FM staff in financial management and
project management. The details are being worked out.
197. The major elements of financial management accountability framework are in
place in MRVC. There is an accounting manual issued in January 2004 which provides broad
guidelines on the FM arrangements in MRVC for MUTP-1. There is scope for updating and
further detailing the budgeting, fund flow, project accounting and management, and internal
audit sections in the manual. This has been agreed with MRVC and the revised manual will be in
place by July 2010.
198. Budgeting and Performance Review: MRVC prepares annual capital expenditure
budget and annual administrative budget. Annual project works expenditure budget is based on
annual project work-plans of MRVC and other executing agencies (eg CR, WR, ICF, and
RDSO). The works expenditure budget is approved by the MD and forwarded to the Railway
Board. Review of budget against actual expenditure is carried out in August, December (revised
estimate) and February (final modification) with information from all executing agencies. For
variations from the budget, approvals are obtained in advance from the budget approving
authority. Annual administrative budget of MRVC is approved by the Board. Quarterly
administrative expenditure reports comparing actual expenditure against budget are presented to
the Board. MRVC may consider elaborating on the existing budget preparation guidelines
contained in the accounting manual with more detailed instructions regarding the preparation and
monitoring of project budgets including formats of reports. Quarterly rolling cash forecasts may
be considered to strengthen management of funds.
199. Accounting and Internal Controls: Accounting is carried out in MRVC Head
Office. There are no other accounting units. Accounting is based on accrual principles and in
accordance with accounting standards issued by the Institute of Chartered Accountants of India.
There is an accounting manual which was last updated in December 2003. The manual lays
down bill passing and payment procedures. An off-the-shelf accounting software package (Tally
9) is being used for day to day accounting and periodic financial reporting. Half-yearly accounts
are prepared and presented to the audit committee and the Board for review.
200. In the areas of accounting and internal controls the rudiments such as schedule of
powers 46 , chart of accounts, accounting policies and standards, brief accounting and procurement
guidelines have been laid down in the accounting manual which was last updated in December
2003. There is a need to further update relevant sections of the manual. There is also scope for
45 The Chief Personnel Officer (CPO) is responsible for human resource management in MRVC. He is assisted by a
Deputy and two supervisors. MRVC follows DPE guidelines and Railways manuals for human resource
management. List of training programs have been identified including and the training institutes. Training needs
assessment is carried out by the HoD/ Director concerned. The training program includes training on World Bank
procurement procedures conducted by ASCI and NIFM. Further, MRVC proposes to send officers for the Railways
mandatory training.
46 According to the Delegation of Procurement Powers, (i) in respect of program of capital expenditure (works
sanctioned by Railway Board) MRVC is delegated powers for incurring expenditure up to Rs.150 crores on any
program of capital expenditure; and (ii) in respect of purchase and placement of contracts of a major nature
involving a substantial capital outlay MRVC is delegated powers for incurring expenditure up to Rs.100 crores for
purchase/placement of contract of a major nature involving a substantial capital outlay.
66

more detailed guidelines pertaining to accounting and controls to strengthen the financial
management framework - for instance there are no instructions/ guidelines regarding project
accounting (receipt of funds, disbursement and utilization thereof and reporting 47 ) in the manual
which is the primary activity of MRVC.
201. Management Reporting: There is formal reporting of half-yearly financial
statements of MRVC to the audit committee and the Board 48 . Capital budget reviews are carried
out in August, December and February. Administrative budget performance report and progress
on sanctioned ongoing works of MUTP-1 are submitted to the Board on quarterly basis
indicating both financial and physical progress of projects. There is monthly review of MRVC
works by MD and a bi-monthly coordination meeting between MRVC, CR, WR, GOM and other
executing agencies to review progress of MUTP-1. In addition MRVC submits monthly report
on activities to the Railway Board.
202. There is scope for MRVC to further elaborate on management reporting in the
accounting manual with formats of reports and instructions for their preparation. MRVC may
consider introducing quarterly reporting of financial results to the Board to match the frequency
of progress reviews. MRVC plans to introduce quarterly reporting once the reporting from the
executing agencies on a quarterly basis in an acceptable format is formally established. MRVC
may also consider carrying out a formal assessment of reporting requirements to ensure that
financial and operational reports that are needed are generated and in the form that facilitates
decision-making. The assessment of organization wide reporting requirements could cover
reports required by (i) top, middle and operating levels of management (ii) statutory and
regulatory authorities (iii) lending agencies etc. and could be combined with the proposed
computerization of MIS.
203. Computerization: MRVC maintains its accounts in Tally 9, which is an off the
shelf accounting software. A separate payroll package has been installed. There is a financial
management system (FMS) which is used for preparing the quarterly progress report (QPR) on
MUTP-1 for submission to the Bank. The FMS is an excel-spreadsheet where the non financial
data is manually input and the financial data is downloaded into the spreadsheet. MRVC
management may consider upgrading its computerized systems with appropriate project
management and reporting software which could be integrated with the existing financial
accounting system to generate management reports. MRVC has outsourced the assessment of
computerization needs to be followed by a roadmap for implementation 49 .
Entity Corporate Governance
204. The DPE, Government of India has issued a code of corporate governance for
CPSUs irrespective of whether or not they are listed in the stock exchange 50 . Although MRVC
has implemented corporate governance practices in compliance with relevant provisions of the
Companies Act 1956 it is yet to fully comply with the practices mandated by the DPE guidelines.
47 MRVC’s lack of familiarity with Bank procedures for special commitments under MUTP-1 and GOI requirements
in this respect has resulted in payment of/ demand for significant amount of penal interest (INR 5 crores approx.) to
MoF. Detailed guidelines are being incorporated in both the project implementation manual and the finance manuals
to avoid any recurrences.
48 This is reportedly delayed due to delays in receiving expenditure statements from the other executing agencies of
MUTP.
49 L&T Infotech has been appointed to prepare the assessment and road map.
50 The aim is to institutionalize good corporate governance practices that are broadly in conformity with SEBI
guidelines.
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In the following table, the key components of the model code of corporate governance
(applicable to a CPSU) and the present status in MRVC is presented.
Table 1: Status of Draft Model Code on Corporate Governance in MRVC
DPE code
Board of directors shall have an optimum combination
of functional, nominee and independent directors. The
number of functional directors (including CMD/MD)
should not exceed 50 percent of the actual strength of
the board.
The number of nominee directors shall be restricted to
a maximum of two.
In case of CPSEs listed in stock exchanges, the number
of independent directors shall be at least 50 percent of
board members. In case of CPSEs not listed in the
stock exchanges at least one third of the board
members should be independent directors (part-time
directors) 51 .
Qualified and independent audit committee 52 shall be
set up giving the terms of reference with minimum
three directors as members; Two thirds of the members
of audit committee shall be independent directors; The
chairman of the audit committee shall be an
independent director.
Audit committees should meet at least four times in a
year and not more than four months shall elapse
between two meetings.
Risk management strategies and their oversight shall be
one of the main responsibilities of the board and
management 53 . Disclosure on risks and concerns should
from part of Director’s report.
Present MRVC status
The current strength of the Board is ten as follows:
Chairman
MD
Three full time directors
Four part time official directors
One part time non official director
The number of functional directors including Chairman
and MD is 50 percent of the current Board strength. The
number of government nominee (part time official
directors) exceeds the restricted level. The number of
independent directors (part time non official directors)
falls short of the required one-third of the Board members
by two.
There is an audit committee set up under the provisions of
the Companies Act 1956. The audit committee has three
members. There are no independent directors in the audit
committee. The chairman of the audit committee is not an
independent director.
All members of the audit committee possess technical
knowledge and expertise but no knowledge of financial
matters.
Audit committee mandate is to meet twice a year
There is no formal risk management system in place. The
management considers monitoring and achieving MOU
target as part of enterprise risk management.
The guidelines provide a list of minimum information
that is required to be placed before the board 54 and
included in the report on corporate governance in the
annual report of the company 55 .
Half-yearly results of MRVC are placed before the Board.
There is no report on corporate governance in the annual
report of MRVC and no certificate of compliance with
corporate governance norms.
51 Nominee directors appointed by an institution which has invested in or lent to the company shall be deemed to be
independent directors
52 All members of audit committee shall have knowledge of financial matters of company and at least one member
shall have good knowledge of accounting and related financial management expertise. Detailed and elaborate role
has been prescribed for audit committees including, financial performance, reporting and disclosures; internal
control mechanisms (including internal audit); compliance with audit observations (internal as well as statutory);
whistle blower mechanism etc
53 On risk management the board shall ensure the integration and alignment of the risk management system with the
corporate and operational objectives and also that risk management is undertaken as a part of normal business
practice and not as a separate task at set times. The company shall lay down procedures to inform board members
about the risk assessment and minimization procedures. These procedures shall be periodically reviewed to ensure
that executive management controls risks through means of a properly defined framework. Procedure shall be laid
down for internal risk management also.
54 The list includes quarterly results for the company and its operating divisions or business segments (Annex IV).
55 Annex VII to the guidelines provides a list of items to be included in the report on corporate governance in the
annual report of companies. The company is also required to obtain a certificate from either the auditors or
practicing company secretary regarding compliance of conditions of corporate governance as stipulated in the
guidelines.
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Actions for Improving Corporate Governance
205. During discussions with MRVC it was felt that the validity clause (life of 15 years
for the entity) has come in the way of a long term vision and plans for the organization. The
organization will complete 15 years in 2014. However there is strong likelihood of the validity
period being extended/ removed. Nevertheless as long as MRVC functions as a CPSU, corporate
governance norms prescribed by DPE for CPSUs would be applicable and therefore MRVC may
consider taking appropriate steps to comply with these requirements.
206. Independent directors: MRVC may engage MOR and DPE in restructuring the
Board composition to accommodate the required number of independent directors with at least
one finance professional among them 56 . In the interim, the remaining non-official director may
be appointed to the Board by GOM.
207. Audit committee: In the short term, induct the present independent director (nonofficial
director) in the audit committee and enlarge audit committee charter and frequency of
meetings as prescribed by the guidelines. On the appointment of the second non-official director
s/he may be inducted in the audit committee. Otherwise MRVC may consider appointment of
eminent person/s in an organizational committee to inject an element of independence and
external and impartial debate in the proceedings/ decision making.
208. Risk management: In the area of risk management, the corporate governance
framework requires MRVC to develop suitable strategies for risk identification, assessment and
mitigation. Risk factors that could have adverse bearing on MRVC’s functions, performance and
reputation should be identified and managed. MRVC does have a brief corporate plan laying
down vision/ mission and objectives, and the frame work of MUTP-1, 2 and beyond, however,
there are no long term operational and risk management strategies and no plan projections for the
MUTP life cycle. MRVC operates more on a ‘project to project mode’ with short term/ ad hoc
plans (e.g., implementation of MUTP-1, followed by 2A) rather than as a business concern with
long term plans and organization (e.g., the entire MUTP project). This is largely due to the
limited validity period prescribed which is now proposed to be dropped 57 . Since the entity’s life
is being proposed to be extended, the need for risk management needs to be viewed in the longer
term perspective for MRVC based on its future role and suitable risk identification, mitigation
and monitoring strategies need to be put in place. Major risks for MRVC as project
implementation agency are time and cost over-run, quality of equipment and works, several
executing agencies not under the control of MRVC; important income source for GOM/MOR is
levy of surcharge collected by CR and WR – changes in this may affect financing capacity;
resettlement of project affected families may delay project implementation etc. In the area of
governance, absence of independent and objective viewpoint in decision making, inadequate
capacity/ vacancies/ continuity of staff as MRVC is staffed by personnel on deputation etc are
risks. For enterprise risks suitable mitigation measures need to be developed, monitored and
reported. MRVC needs to chalk out a plan for risk assessment and mitigation externally aided if
necessary and weave in risk monitoring into its internal audit framework 58 .
56 The CAG while reviewing unlisted companies with the objective of assessing compliance with DPE guidelines
has observed that MRVC does not fulfill the requirement of 1/3 rd of independent directors.
57 Article 177 of the MAA stipulates the period of validity up to July 11 2014. MRVC has applied to the Railway
Board and GOM for deleting the article (letters dated January 15 2010)
58 The Dedicated Freight Corridor Corporation of India Limited has developed a risk management strategy which
proposes detailed risk register along with a risk management team.
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Internal Audit
209. Internal audit is carried out by a firm of chartered accountants under terms of
reference issued by MRVC. The internal audit is continuous 59 and quarterly internal audit reports
are submitted to MRVC. Coordination for internal audit is the responsibility of an SAO reporting
to FA&CAO. Internal audit reports together with management response are reviewed by the
audit committee and by the Board. The statutory auditors have opined that the company has an
adequate internal audit system commensurate with the size and nature of its business.
210. From a review of internal audit reports by the Bank it appears that the internal
auditors are more focused on day-to-day accounting transactions and thereby fulfilling only a
part of the scope of work relating to transaction reviews. However the internal audit scope of
work requires the auditors to also (i) visit various field offices (ii) assess the adequacy of project
financial management systems including internal controls and remedying weak controls etc (iii)
assess compliance with provisions of financing agreements (iv) judge adequacy of records
maintained regarding assets created and (v) certify eligibility of expenditures charged to projects
and its correct classification and (vi) prepare internal control manual. These areas are not
adequately addressed by internal audit. MRVC appointed new internal auditors from October 1
2009 and monitor the quality of the audit and deliverables.
211. MRVC may consider preparing a detailed internal audit manual to serve as the
basis for internal audit. The audit manual would set out the objectives, scope and coverage of
audit, the detailed methodology of review, audit questionnaires, and the required reporting and
follow up. The internal audit would need to be organization wide (covering project funding,
procurement and projects construction in addition to accounting) and oriented towards mitigating
risks and improving/ strengthening relevant systems and controls. The internal auditors should
also possess the specific skills and experience required to carry out the audit which should go
beyond traditional financial audit. MRVC has assigned the responsibility of developing both the
internal audit and finance manuals to the internal auditors.
212. The IBRD financed MUTP-2A will be subject to internal audit (under agreed
terms of reference) and its reports would be made available to IBRD, on request.
External Audit
213. Under Section 619(2) of the Companies Act, 1956, the Comptroller and Auditor
General (CAG) appoints MRVC’s statutory auditors to carry out an independent audit and
express their opinion as per the requirements of the Companies Act. In addition, the CAG
through its Principal Director of Commercial Audit also conducts supplementary audit under
section 619 (3) (b) of the Companies Act on the audited financial statements. After the
completion of the statutory audit and supplementary audit the audited accounts and auditors’
reports are adopted by the Annual General Meeting of MRVC. Statutory audits of MRVC are on
schedule. The statutory audit reports do not contain any material observations 60 .
59 The internal auditors are required to spend at least two working days every week and the Partner/ Director at least
once a week at MRVC.
60 The 2007-08 audit report points out that accounting of provisions for retirement benefits of employees on
deputation is not on actuarial valuation as prescribed under AS-15. This is being addressed by the management. Also
the auditors have pointed out in their opinion that MRVC has placed reliance on audited/ unaudited statements
pertaining to expenditure incurred on various projects by CR/ WR/ MMRDA and the resultant D&G charges.
70

214. In addition to the audits under the Companies Act MRVC is subject to proprietary
audit/ inspection by the Office of the Principal Director of Commercial Audit. While the
inspection report for FY 2007-08 did not observe any persistent irregularities, the inspection
report for FY 2006-07 contained several observations. MRVC management has responded to the
observations which pertain to project/ contract management and violation of existing guidelines
etc. Only one objection is yet to be resolved 61 .
215. Annual project audit: In addition to the annual entity audit report and accounts,
MRVC would submit to the Bank a separate annual project audit report along with the audited
project financial statements by September 30 each year during the currency of the project. It is
proposed that the project (including all components) will be audited by an independent firm of
chartered accountants (which may include the statutory auditors appointed on the advice of
CAG), acceptable to the Bank, under agreed terms of reference. The annual audited project
financial statement would separately identify each component under the project, its progress and
the funding sources for each of the components. While certifying the project financial statements
the project auditor would take cognizance of the annual audited utilization statements of the
executing agencies receiving advances from MRVC under the project. The following annual
audit reports will be tracked by the Bank’s Audit Reports Compliance System (ARCS):
Table 2. Audit Reports Monitoring
Agency Audit Report Audited By Due Date
MRVC Annual entity audit reports as required under
the Companies Act
Statutory Auditors appointed by
CAG
MRVC Project audit reports Independent firm of Chartered
Accountants
GOI Audit Report of the Designated Account held CAG
at RBI
30 th
September
30 th
September
30 th
September
Disclosure, Transparency and Implementation of Rights to Information (RTI) Act, 2005
216. Under Right to Information (RTI) Act, 2005 a public authority is required to
maintain and make available detailed records to facilitate right to information. It envisages
computerization of records and accessibility through network. The Act also requires every public
authority to, designate required number of Public Information Officers, in all administrative units
or offices under it and publish particulars of such officers to provide information to persons
requesting for it under the Act.
217. MRVC has developed a separate RTI website. Information relating to the
company, powers/ duties, rules and regulations etc has been posted on the website including
names and contact information of public information officers/ appellate officer.
218. There is a separate vigilance cell in the organization headed by Chief Vigilance
Officer/ Deputy Chief Vigilance Officer. Notifications are issued by Chief Vigilance
Commissioner from time to time.
61
Audit observations and current status: Delay in implementation of MUTP-1, cost overrun of Rs.350.6 crores in
implementation and levy of surcharge of Rs.298.84 crores without providing any additional facilities; (the para is
still open);
71

219. MRVC discloses annual audited statement of accounts in the website. It is a
limited view of the Balance Sheet and Profit and Loss Account only. During project
implementation the audited project financial statements and other pertinent project-related details
would be disclosed in the website in a suitable manner.
Proposed action plan
220. The proposed action plan with risk assessment and implementation horizon is
summarized below in Table 3. The proposed actions are bifurcated between those that are under
the control of MRVC and its management and those that are under the control of other
stakeholders and prioritized over short to medium term
221. If MRVC faces constraints in staffing while trying to implement some of the
proposed actions as listed below it may consider seeking assistance from reputed and
experienced consultants (or / eminent persons from the sector) in its efforts to further improve
financial accountability and corporate governance.
Table 3. Financial Management Action Plan
Area of Action Risk Actions required
for
implementation
Internal audit
Strengthen internal audit
arrangements in line with
own requirements and
good industry practices;
develop appropriate
internal audit manual
Audit Committee
Induct independent
directors in audit
committee or invite
independent professionals
(in an advisory capacity)
to inject professional
independence and improve
oversight
Action by,
Date
Actions within the control of MRVC (short term)
Internal controls and
risk management are
weakened without a
robust internal review
and follow-up
mechanism
Assurance function is
impaired without
independent review
and recommendation;
risk of ineffective
controls may lead to
future problems
Ensure adherence to
terms of reference by
internal auditors
Develop detailed
internal audit manual
with enlarged scope
covering project/
contract
implementation and
focus on risk
management/
systems
improvement
Induct two
independent (nonofficial)
directors in
the audit committee
2009-10 internal
audit
Final report by
July 2010.
As soon as
appointed as
Board nonofficial
directors.
Remarks
New auditors
appointed from
October 2009 with
fresh TOR.
Adherence to TOR
to be monitored.
Internal auditors to
prepare internal
audit manual. To be
shared with the
Bank
Serving non-official
director to retire in
May 2010. MRVC
has requested GOM
and MOR to appoint
non-official
directors.
Strengthen oversight by
audit committee in line
with corporate governance
requirements
Increase frequency of
audit committee
meetings to four as
per DPE guidelines
From FY 2011-
12 onwards
Currently meetings
are half-yearly since
financial statements
reporting to the
Board is half-yearly.
MRVC to increase
the frequency with
the introduction of
72

FM capacity
Fill vacancies and train and
build capacity
In-year reporting to
management
Introduce quarterly
financial reporting to BoD
as per corporate
governance requirements
Financial management
Manuals
Update the finance and
accounts manual for a
more formalized and
elaborate coverage of
MRVC’s activities to
strengthen financial
management environment
Computerized MIS
Assess requirements of
organization wide MIS and
prepare computerization
strategy and road map
Inadequate capacity
will affect level of
efficiency and lead to
delays
Proper and adequate
information not
available in timely
fashion for informed
decision making;
delays in corrective
actions
Recruit/ depute staff
as per project
requirement
Prepare un-audited
financial statements
on a quarterly basis
with closing entries
compare with budget
and provide variance
analysis
Replacement
staff in place to
avoid vacancy.
From FY 2011-
12
Inconsistent/
improper practices to
the possible detriment
of the organization;
risk of becoming
person dependent
rather than process
dependent
Initiate action for
updating the
following:
(a) Schedule of
Powers
(b)Budgeting
(c) Project
Accounting
(d) General
Accounting
(e) Internal Controls
(f) Procurement
(g) Contract
Management
(h) Reporting
Final report by
July 2010
Actions within the control of MRVC (medium term)
Failure to get
properly automated
and integrated in a
timely fashion with
consequences - need
for manual
intervention; delays,
duplications and
possibility of errors;
proper and adequate
information not
available in timely
fashion for informed
decision making;
delays in corrective
actions
Develop terms of
reference and
commence work
Computerization
road map to be
ready by May
2010
quarterly financial
statement reporting
to the Board.
Key FM staff slated
to revert to Indian
Railways including
FA&CAO and SAO.
Indian Railways to
ensure proper
addition/replacement
with adequate time
for hand-over.
Currently half yearly
financial statements
are submitted to the
Board; MRVC plans
to increase the
frequency when
acceptable
expenditure
statements are
received from the
executing agencies.
Consultant
appointed to prepare
finance manuals
Assignment
outsourced
73

Actions beyond the control of MRVC but critical from management and corporate
governance perspective
Independent Directors
Induct independent
directors/ eminent
professionals to enhance
the level of corporate
governance
Extension of validity
period of MRVC beyond
2014
Creates impression
that company lacks
independence and that
adequate
professionalism and
objectivity are not
brought into decision
making; noncompliance
with
Departmental
guidelines and
organization’s
Articles of
Association
Lack of lasting vision,
ad-hoc decisions and
barrier to
improvements.
MUTP-2A may not
be fully implemented
within the validity
period
Initiate consultations
with appropriate
authorities
Obtain in principle
approval.
Clear timeline
for appointment
by July 2010
By May 2010
One independent
director in place; to
retire in May 2010.
The number should
be compliant with
DPE guidelines.
74

Annex 8: Procurement Arrangements
INDIA: Mumbai Urban Transport Project-2A
A. General
222. Procurement for the proposed project would be carried out in accordance with the
World Bank’s "Guidelines: Procurement Under IBRD Loans and IDA Credits" dated May 2004
revised October 2006 (Procurement Guidelines); and "Guidelines: Selection and Employment of
Consultants by World Bank Borrowers" dated May 2004 revised October 2006 (Consultant
Guidelines), and the provisions stipulated in the Legal Agreement.
223. The various items under different expenditure categories are described in general
below. For each contract to be financed by the Loan/Credit, the different procurement methods
or consultant selection methods, the need for pre-qualification, estimated costs, prior review
requirements, and time frame are agreed between the Borrower and the Bank in the Procurement
Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual
project implementation needs and improvements in institutional capacity.
224. Procurement of Goods and Works: There are no Works envisaged to be
procured using Bank’s SBDs for Works, at this stage. Goods to be procured under this project
include (i) Electrics for 3-phase EMUs (Rolling Stock) and (ii) OHE Maintenance Car and will
be procured using Bank’s SBD for Goods on ICB basis. Procurement of other items include (iii)
Setting up of Traction Substation at Chinchpokli and Sion and six Switching posts, (iv) Supply
and Installation of 110 kV cable for Chinchpokli and Sion traction substations and (v) Digital
Axle Counters and will be done using the Bank’s Standard Bidding Documents (SBD) for
Supply and Installation on ICB basis. In addition, the Project envisages procurement of
Information System including TA for suburban Rail Simulation Model and Power Supply
Simulation Study, for which the procurement method will be ICB with post qualification, using
Bank’s SBD for procurement of Information Systems.
225. Pre-Qualification of Bidders: Procurement of Goods and Works will follow postqualification
of bidders and pre-qualification procedures are not envisaged.
226. Domestic Preference: The project procurement does not envisage providing any
domestic preferences and has adopted the default provisions of the Bank SBD.
227. No procurement requiring National Competitive Bidding (NCB) method of
procurement is envisaged under the project, If, however, some smaller value contracts for
Works/ Goods are identified during implementation, these shall be procured using model
documents as agreed with and satisfactory to the Bank.NCB contracts, if any, will be awarded in
accordance with the provisions of paragraphs 3.3 and 3.4 of the Procurement Guidelines
("Guidelines: Procurement Under IBRD Loans and IDA Credits" dated May 2004 revised
October 2006). All NCB contracts to be financed from the proceeds of the loan will follow the
procedures described in Chapter 5 of the MUTP-2A Implementation Manual and the following
conditions shall apply:
a. Only the model bidding documents for NCB agreed with the GOI Task Force
(and as amended from time to time) shall be used for bidding.
b. Invitations to bid shall be advertised in at least one widely circulated national
daily newspaper at least 30 days prior to the deadline for the submission of bids.
75

c. No special preference will be accorded to any bidder either for price or for other
terms and conditions when competing with foreign bidders, state-owned
enterprises, small scale enterprises or enterprises from any given state.
d. Except with the prior concurrence of the Bank, there shall be no negotiation of
price with the bidders even with the lowest evaluated bidder.
e. Extension of bid validity shall not be allowed without the prior concurrence of the
Bank (i) for the first request for extension if it is longer than four weeks and (ii)
for all subsequent requests for extension irrespective of the period (such
concurrence will be considered by Bank only in cases of Force Majeure and
circumstances beyond the control of the project).
f. Re-bidding shall not be carried out without the prior concurrence of the Bank.
The system of rejecting bids outside a pre-determined margin or “bracket” of
prices shall not be used in the project.
g. Rate contracts entered into by Director General of Supplies and Disposal will not
be acceptable as a substitute for NCB procedures. Such contracts will be
acceptable, however, for any procurement under National Shopping procedures.
h. Two or three envelop system will not be used.
228. Selection of Consultants: Consulting services procured under this project would
include: TA for development program for Mumbai suburban rail services, TA to support the
development of Indian Railway Long Term Strategy, TA for revenue maximizing study for
Mumbai rail suburban system, TA for suburban ticketing system for Central and Western
Railways, TA for design for passenger information and security within Mumbai suburban rail
system, and TA for study to improve environmental management of operation of Central and
Western Railways.
229. For all consultant procurement, the Bank’s Standard Request for Proposal (SRFP)
document and pertinent Form of Contract shall be used.
230. The following methods of selection will be adopted depending upon size and
complexity of assignment, as defined in the Consultancy Guidelines:
a. Quality and Cost Based Selection (QCBS)
b. Quality Based Selection (QBS)
c. Selection under Fixed Budget (FBS)
d. Least Cost Selection (LCS)
e. Selection based on Consultant’s Qualifications (CQS)
f. Single Source Selection (SSS)
g. Individuals
231. The services of individual consultants will be procured as per the provisions
stipulated in paragraphs 5.1 to 5.4 of the Bank’s Guidelines.
232. Retroactive Financing: The Project has issued some of the Bidding Documents
inviting bids for awarded contracts following Bank’s Procurement Guidelines and agreed format
of Bidding Documents. One contract has already been awarded and others are in various stages
76

of bidding. These contracts if awarded, prior to the project loan effectiveness, as these would
have been prior review contracts, cleared with the Bank, will be eligible for retroactive financing
as per the criteria for such funding specified in the Lon Agreement. The amount of funding, if
and where applicable, for such contracts as meeting the criteria, will not exceed 20 percent of the
loan amount.
233. The procurement plan compiled for all the identified packages under the projects
and the consultancies procedures and SBDs to be used for each procurement method, as well as
model contracts for works and goods procured, are presented in Chapter 5 of the Mumbai Urban
Transport Project 2A Implementation Manual.
B. Assessment of the agency’s capacity to implement procurement
234. Procurement under the project will be carried out by MRVC. MOR has
implemented Bank’s project covered over several loans in modernization of the rail transport.
Generally the officers are aware of the procurement procedures followed in Bank financed
projects. MRVC will depute some representatives who will deal with this procurement to the
training programs organized by Administrative Staff College of India (ASCI), National Institute
of Financial Management (NIFM) or other reputed institute for updating their knowledge on
procurement.
235. MRVC has been delegated authority by IR to take procurement decisions for
contracts up to a value of Rs. 1,000 million (approx. US$20 million). All contracts except the
one for the procurement of Electrical Multiple Units (EMUs) and kits shall be within the
threshold of the US$ 200 million. The value of EMU contract is expected to be over US$200
million. In this case, the bid evaluation would be carried out by a committee of MRVC and
RDSO and forwarded to Indian Railway Board for review and approval of recommendations.
236. Furthermore, Mumbai Railway Vikas Corporation Limited (MRVC) has
performed satisfactorily compared with the other agencies involved in the implementation of
MUTP-1, both on procurement and implementation of contracts. In the process, MRVC has
acquired reasonable proficiency in procurement capacity following Bank guidelines and SBDs.
However, for this project, Bank’s revised SBDs (2007 and 2008 for Works, Supply and
installation and Goods procurement) will be applicable. The SBD for Supply and Installation has
substantial changes from the previous version, which was applicable for MUTP-1 and with
which these officials are well versed. In order to familiarize these officers of MRVC, the Bank
apart from discussions on these bidding documents during missions organized a workshop at
New Delhi, which was attended by senior officers of MRVC. During these discussions and
workshop, several concerns of MRVC officials were clarified. Draft bidding documents for
major procurements covered under the project have already been prepared. One contract has
been awarded and two are in advanced stage of bidding process. The main bidding document for
procurement of Electrics (EMU Rolling Stock) has been issued.
237. The responsibilities of MRVC officials inter-alia include duties pertaining to
Procurement function. The procurement function is staffed by officers of MRVC at various
levels as stated in the table 1 below.
77

NATURE OF
POWERS
Invitation of Works
Tenders
Managing
Director
Table 1. Staffing of Procurement Functions at MRVC
Director
Open tenders/ prequalified
tenderers
Million
Up to INR 250
Limited tenders Up to INR 250
Million
Single tenders Up to INR 50
Million
Accepting authority
Issue of acceptance
letter and signing
of contract
agreement.
Consultancy
Tenders/Contracts
Invitation of
Consultancy
Tenders
Composition of
tenders evaluation
committee.
Accepting
Authority
Variation in
consultancy
contract
Over INR
500 Million
up to INR
1000
Million
Full Powers
Over INR 100
Million up to INR
500 Million.
Over INR 500
Million up to INR
1000 Million
a) Full powers for
feasibility, detailed
engineering and
supervision of
works (PMC).
b) Full powers for
hiring consultancy
services pertaining
to execution of
works other than
specified at a)
above up to INR
25000/- each case
subject to a ceiling
of INR 500,000 /
annum
Full powers.
Full power in
consultation with
Finance
Senior
Administrative
Grade (Chief
Engineers etc.)
(SAG)
Up to INR 30
Million
Up to INR 30
Million
Up to INR 10
Million
Up to INR 100
Million
Over INR 100
Million up to INR
500 Million
-
Selection Grade/
Junior
Administrative
Grade (SG/ JA)
REMARKS
The tenders will be opened in the
presence of one officer from the
Executive department and one
Accounts representative and an
opening register will be maintained
for noting the salient details of the
offers as per the guidelines. The
comparative statement of offers, a
detailed briefing note containing
technical conformity statement as
per the laid down parameters and
specifications will be prepared by
the Executive of the department
concerned of the rank not lower
than Sr.Scale.
- Finance Concurrence required
- Finance Concurrence required
- For tenders of value more than INR
1000 Million, evaluation
committee shall consists of three
Directors including Director
(Finance) for acceptance of
Railway Board with MD’s
recommendation
Up to INR 100
Million
Finance vetting required.
For foreign companies, Legal
vetting also required
Nil Nil Prior finance concurrence will be
required if the consultancy is not an
approved item in the consolidated
MUTP estimate costing more than
Rs.25000/-
To consist of three
SAG officers
consisting of one
Finance Member. In
case of nonavailability,
next
lower category
Finance officer (full
powers).
Full powers of
acceptance for
tenders dealt by the
JA/SG Committee.
Full powers for
tenders within
acceptance limits, in
consultation with
Finance.
To consist of three
JA/SG Officers,
(Finance Member
can be of next
lower grade) of
tenders up to INR
1Million
Variation in consultancy contracts
approved by World Bank, if any,
will require prior approval of
World Bank with Finance
comments.
78

NATURE OF
POWERS
Extension of
Contract
Managing
Director
Director
Full powers for
contract within
their power of
acceptance
Senior
Administrative
Grade (Chief
Engineers etc.)
(SAG)
Full powers for
contracts within their
power of acceptance
Selection Grade/
Junior
Administrative
Grade (SG/ JA)
NIL
REMARKS
Subject to
a) no loss to the administration
b) Contract is not awarded on the
grounds of earlier completion
period.
Variations in Contract
Contract
Conditions
Quantities beyond
permitted
percentage in the
contract.
Full powers for
contracts with in
their power of
acceptance.
Up to 50 percent
of initial contract
value provided
enhanced value of
contract is within
his power of
acceptance
Full powers for
contracts with in
their power of
acceptance.
Up to 25 percent of
initial contract value
provided enhanced
value of contract is
within his power of
acceptance
NIL
NIL
Any change having financial
implication shall require
concurrence of finance
Prior finance concurrence shall be
required for overall variation in
excess of 25 percent of original
contract value and for overall
variation of individual item in
excess of 25 percent of schedule
quantity. For foundation items,
however, the variation limit of 25
percent will not apply and prior
finance concurrences will not be
required.
For processing variation in excess
of 25 percent Engineering Code
provisions shall be adopted to
explore possible cost reduction
Introduction of
additional items in
contract.
Full power
provided the
revised cost of the
work is within the
power of original
sanctioning
authority”.
Full power provided
the revised cost of
the work is within
the power of original
sanctioning
authority”.
NIL
All such cases require concurrence
of finance
238. An assessment of the capacity of the Implementing Agency to implement
procurement actions for the project has been carried out based on the information provided in
response to the Questionnaire, by MRVC and considering the experience of the bank team
during implementation of the MUTP-1. The assessment reviewed the organizational structure
for implementing the project and the interaction between the project’s staff responsible for
procurement at MRVC.
239. The Table 2 below, sums up the Procurement Capacity Risk and Mitigation Action
Plan agreed with MRVC:
Table 2. Procurement Risk Mitigation Action Plan
Action Due Status/ Completed
Agree on appropriate dispute December
resolution provisions for 31, 2009
contracts (at least for Bank
financed ones, note that it is
mandatory for ICB).
Agree on list of unacceptable
NCB issues and on removal
from documents to be used for
Bank financed procurement.
December
31, 2009
Bank's SBDs/ Model documents for ICB
and NCB will be used, which provides for
these requirements adequately. Action
completed.
Same as above. Conditions agreed to
already.
Pending Action/ due
on
Nil
Nil
79

Arrange for training on
procurement planning and use
of new SBDs of the Bank.
September
30, 2010
This is being implemented and details of
the staff that has undergone such training
shall be provided to the Bank. Also a
detailed list of training scheduled for the
next year will be prepared and provided
for information of the Bank
Will be continuous
exercise during the
implementation
phase
Improvement / Modernization
of Records Management
Systems
Capacity Building in
Contracts Management
December
31, 2010
December
31, 2010
Project will carry out internal/
independent assessment to improve/
modernize records management systems
Project will draw out a plan of training
activities for staff to enhance their skills
in the area of Contracts Management
During project
implementation
During project
implementation
240. The overall project risk for procurement is ‘Moderate’.
C. Methods of Procurement
Goods and Works
241. Goods/ Information Systems, estimated to cost US$500,000 or more per contract;
and Works/ Turnkey Contracts/ Supply and Installation Contracts, estimated to cost
US$10,000,000 or more per contract will be procured following ICB procedures as per Section II
of the Procurement Guidelines. Goods/ Information Systems, estimated to cost US$30,000 or
more but less than US$500,000 per contract and Works/ Turnkey Contracts/ Supply and
Installation Contracts, estimated to cost US$30,000 or more but less than US$10,000,000 per
contract may be procured following NCB procedures, meeting the requirement of Paragraphs 3.3
and 3.4 of the Procurement Guidelines.
242. Goods and Works estimated to cost less than US$30,000 per contract may be
procured following Shopping procedures which meet the requirement of Paragraph 3.5 of the
Procurement Guidelines.
243. Goods and Works which meet the requirement of Paragraph 3.6 of Procurement.
244. Guidelines may be procured following Direct Contracting Procedures.
Hiring of Consultants
245. Shortlists of consultants for services estimated to cost less than US$ 500,000
equivalent per contract may be composed entirely of national consultants in accordance with the
provisions of Paragraph 2.7 of the Consultant Guidelines.
246. The following methods of selection will be adopted depending upon size and
complexity of assignment, as defined in the Consultancy Guidelines:
Quality and Cost Based Selection (QCBS)
Quality Based Selection (QBS)
Selection under Fixed Budget (FBS)
Least Cost Selection (LCS)
Selection based on Consultant’s Qualifications (CQS)
Single Source Selection (SSS)
80

Individuals
247. The services of individual consultants will be procured as per the provisions
stipulated in paragraphs 5.1 to 5.4 of the Bank’s Guidelines.
D. Review Requirements
248. Contracts for Works/ Turnkey Contracts/ Supply and Installation Contracts,
estimated to cost over US$10 million; and those for Goods/ Information Systems, estimated to
cost over US$1,000,000 equivalent per contract, shall be subject to prior review by the Bank.
249. Thresholds for prior review by the Bank will be reviewed during the
implementation of project, based on reviews by the Bank.
250. All contracts awarded on Direct Contracting basis, will be subject to prior review
by the Bank.
251. The prior review threshold for Consultancy Contracts with firms is proposed at
US$200,000 equivalent, whereas the same for individual consultants is proposed as US$50,000
equivalent. Further, sole source contracts to firms estimated to cost US$100,000 or more and to
individuals estimated to cost US$20,000 or more will be subject to prior review.
252. All contracts not covered under prior review arrangements specified above, will be
subject to post award review/ review during supervision missions/ review by consultants to be
appointed by the by Bank
E. Procurement Plan
253. The Borrower, at appraisal, developed a procurement plan for project
implementation which provides the basis for the procurement methods. This plan, included in the
Implementation Manual, has been agreed between the Borrower and the Project Team on April
30, 2010 and is available at Mumbai Railway Vikas Corporation Ltd, 2nd Floor, Churchgate
Station Building, Mumbai – 400 020, India. It will also be available in the project’s database and
in the Bank’s external website. The Procurement Plan will be updated in agreement with the
Project Team annually or as required to reflect the actual project implementation needs and
improvements in institutional capacity.
F. Frequency of Procurement Supervision
254. In addition to the prior review supervision to be carried out from Bank offices, the
capacity assessment of the Implementing Agency has recommended that the procurement
arrangement and implementation progress should be reviewed during six monthly supervision
missions, which shall also include need based visits to the field and to carry out post review of
procurement actions.
255. Procurement information will be collected and recorded as follows:
(a) Prompt reporting of contract award information for the respective components;
(b) Comprehensive quarterly reports indicating,
(i) Revised cost estimates for individual contracts and total cost;
81

(ii) Revised timings of procurement actions including advertising, bidding, contract award
and completion time for individual contracts; and
(iii)Compliance report by the borrower within three months of the loan signing date
G. Details of the Procurement Arrangements Involving International Competition
256. Goods, Works, and Non Consulting Services
(a) List of contract packages to be procured following ICB and direct contracting:
1 2 3 4 5 6 7 8 9
Ref. No.
GOODS
MUTP2A-G1
Contract
(Description)
Procurement of
electrics for 3-
phase EMUs
Procurement of
OHE
MUTP2A-G2
maintenance
car
SUPPLY AND INSTALLATION
Procurement of
digital axle
MUTP2A-W1
counter and
quad cable
Setting up of
traction
substations at
MUTP2A-W2 Chinchpokli
and Sion and
six switching
posts
Supply and
installation of
110 kV cables
MUTP2A-W3 for Chinchpokli
and Sion
traction
substations
MUTP2A- Power Supply
TA8
MUTP2A-
TA9
Simulation
Rail Operations
Simulation
Estimated
Cost
($ Million)
Proc.
Method
P-Q
Domestic
Preference
(yes/no)
Review
by Bank
(Prior /
Post)
Expected
Bid-
Opening
Date
355.7 ICB No No Prior Sep 2010
17.3 ICB No No Prior 31.10.10
15.7 ICB No No Prior 30.06.10
15.7 ICB No No Prior 31.05.10
6.5 ICB No No Prior 11.08.09
0.9 ICB No No Prior 30.11.10
0.6 ICB No No Prior 30.09.10
Comments
Bidding
Documents
reviewed by
the Bank
Contract
awarded
257. Slice and Package: If a transaction comprises several packages, lots and slices,
the aggregate estimated value of all contract(s) resulting out of the bidding process will
determine the applicable threshold for deciding about the review requirements. Further, Scope of
Work or Requirements for procurement of Goods shall not be broken down into several packages
to reduce the review requirements or to resort to a less competitive method of procurement.
82

258. Consulting Services
a) List of consulting assignments with short-list of international firms.
1 2 3 4 5 6 7
Ref. No.
MUTP2A-TA1
MUTP2A- TA2
MUTP2A- TA3
MUTP2A- TA4
MUTP2A- TA5
MUTP2A- TA6
MUTP2A- TA7
Description of
Assignment
Development Program for
Mumbai Suburban Rail
Services
Provision to support the
development of the Indian
Railways long term
strategy for Suburban Rail
Revenue maximizing study
in particular for non-fare
box revenue and
affordability for
commuters
More efficient and user
friendly ticket issuing
Passenger information and
security
Reduction of trespassing
and improvement of safety
on the track
Improved Environmental
Management of Rail
Operations
Estimated
Cost ($
million)
Selection
Method
Review
by Bank
(Prior /
Post)
Expected
Proposals
Submission
Date
5.40 QCBS Prior 31.08.2010
1.60 QCBS Prior 31.01.2011
1.10 QCBS Prior 01.10.2010
0.50 QCBS Prior 31.07.2010
0.50 QCBS Prior 31.07.2010
0.10 CPF 30.06.2010
0.50 QCBS Prior 31.08.2010
MUTP2A- TA10 Training 3.20 QCBS Prior 31.07.2010
Comments
H. Anti- Corruption Measures
259. The project has prepared a GAAP which is presented in Annex 6A. The key issues
and risks concerning implementation of the project have been identified, including those
relating to Procurement, listed in the Table 1 - Governance and Accountability Action Plan.
260. GAAP also identifies the risks associated with procurement processes, namely
weak disclosure of project information leading to low stakeholder participation and
accountability, weak complaint and grievance redress mechanisms, risk of collusion, fraud and
corruption in procurement, and weak institutional capacity for project implementation. Actions
pertaining to mitigating these risks include (a) suo motu disclosure of information, development
of better systems for record and document management; (b) establish procedures to deal with
external complaints on procurement, fraud/corruption and construction quality; (c) tracking of
the status of complaints, related investigations and measures; (d) a transparent policy describing
incentives for whistleblowers, sanctions for staff found indulging in fraudulent behavior; (e)
strengthening of internal audit, project monitoring and contract management arrangements; (g)
building a database with procurement and contractor performance data from the project such as
number of bids received, bid prices, unit prices, specifications, time and cost overruns and (h) a
comprehensive training needs assessment for its entire staff, and finalize a training plan.
83

Introduction
Annex 9: Economic and Financial Analysis
INDIA: Mumbai Urban Transport Project-2A
261. This annex presents the results of the economic evaluation of the procurement of
an additional 72 12-car rakes for the Mumbai suburban system. This is expected to yield a net
present value over 35 years of operation of over US$262 million (2008 prices discounted at 12
percent to 2010) and to achieve an economic rate of return of 17 percent. It also summarizes the
projected financial performance of the Mumbai suburban system and relates it to the overall
financial performance of Indian Railways.
Background and Project Description
262. Passenger traffic on the Mumbai suburban system has been growing steadily for
over two decades, during which time the network and fleet has been progressively expanded and
improved. MUTP-1, signed in 2002, included a component for the supply of additional rakes and
is now nearing completion. During this time, the conversion of the suburban network from DC to
AC traction has also been taking place to enable the more intensive service to be operated.
However, the trains remain probably the most crowded in the world and the current project aims
to provide a further 72 12-car rakes to provide additional capacity as well as completing the first
phase of conversion from DC to AC and providing maintenance facilities for the additional rakes
and stabling lines.
Traffic Forecast
263. The model used to derive the traffic forecasts and the associated system operating
costs was originally developed as part of the Financial and Institutional Study of the Mumbai
Suburban System in 1996. It has been used for over a decade by MRVC and has been
continuously validated by comparing its forecasts, assuming the changes in these four variables
that actually occurred, with what has occurred in practice. This comparison has showed a close
correspondence and the model is considered a robust tool suitable for forecasting demand in this
project. It has three main sets of inputs:
(a) financial and economic parameters;
(b) base operating statistics;
(c) parameters for forecasting traffic demand, earnings and operating expenses.
264. Passenger demand was projected taking into account:
(a) assumed annual population growth in the part of the Mumbai Metropolitan Region
served by the suburban railway of 1.8 percent
(b) changes in the key service parameters of service frequency, new routes, fares and
crowding, using the elasticities given in Table 1. These are the same as used in the
original MUTP-1 forecasts except for the elasticity with respect to network size (as
measured by route-km). This was reduced from 0.2 to 0.1 as the new routes now
proposed would pass through sparsely populated areas. The original MUTP-1 forecasts
are based on a 1996 consultant study which undertook time-series analysis of demand to
establish fare elasticities and stated preference studies to estimate the impact of
crowding on demand through a willingness to pay approach, complemented by a
willingness to pay estimate of in-vehicle time.
84

Table 1. Assumed Demand Elasticities
Parameter
Elasticity
Fare - 0.3
Route Kms + 0.1
Service + 0.1
Crowding - 0.2
(c) Increase in the per capita trip rate of 0.2 percent per annum, based on the recently
concluded Comprehensive Transport Study.
(d) Increase in average trip length of 0.5 percent per annum. Although the historical data
shows a much higher growth, the shifting of business districts towards the north of
Mumbai and the improved transport infrastructure for east-west connectivity is likely to
reduce the average trip length on the suburban system.
(e) Fares are assumed to increase at the same rate as inflation in the long run, i.e. fares will
be constant in real terms. The fare surcharge is assumed to continue till the loan for
MUTP-1 is paid back and no additional surcharge was considered. A sensitivity test also
considered the case in which fares remain constant in nominal terms; as inflation is
forecast at eight percent p.a. this is equivalent to a reduction in real fares of 7.4 percent
p.a.
(f) Service plans (train frequency and size) were derived from the current suburban railway
timetable and the future timetables developed during project planning.
265. The key assumptions used to calculate operating costs are:
(a) base costs taken from the annual cost analysis of suburban services
(b) no change in the real cost of energy but reductions in energy consumption of dual
voltage rakes of ten percent because of reduced starting resistance and ten percent from
regeneration;
(c) a reduction in maintenance cost of new rakes of 15 percent;
(d) savings in energy consumption in sections converted from DC to AC of five percent
from reductions in transmission losses and five percent because of improved reception of
regenerated energy;
(e) reduction of 60 percent in the maintenance cost of power supply installations in the
converted sections;
(f) reduction in transmission losses of about five percent on the energy consumed by main
line trains on DC to AC converted suburban sections.
266. The reduction in operating costs as a result of AC conversion have all been
estimated by MRVC based on experience gained during the first phase of the AC-DC
conversion. The base operating and demand statistics were taken from the published statistics for
2006/7. These give, for each of Central and Western Railways, passengers, passenger-km,
vehicle-km, train-km and gross tonne-km.
Economic Analysis Framework
267. The economic analysis compares the incremental costs and benefits of the project
compared to delaying the purchase of additional rakes until 2022.
85

268. Project Costs: These cover the capital cost of the incremental rakes, the
conversion from DC to AC of the remaining network and additional maintenance facilities
(Table 2).
Table 2. Incremental Capital Costs
(Rs crores) US$ (million)
2009-10 130 27
2010-11 316 66
2011-12 623 130
2012-13 1127 235
2013-14 1359 283
2014-15 735 153
Total 4290 894
Converted at US$1 = Rs 48
269. The project costs also include the operating cost of the additional services that are
run in the Project Case, net of the reduction in unit operating cost caused by the more economical
AC units.
270. Terminal values of the assets have been based on the remaining lives of the assets
in the final year of the analysis. The financial costs have been converted into economic costs
using a conversion factor of 0.9.
271. Benefits: These include the following:
(a) The reduction in crowding will reduce travel discomfort for passengers. This was valued
at Rs.3.5 per hour (2001 prices) in the economic analysis of MUTP-1, based on stated
preference surveys undertaken as part of project preparation. This has been updated to
Rs.5.0 per hour at 2008 prices.
(b) Savings in time due to (i) reduced journey time, and (ii) reduced waiting time due to
increase in the frequency of trains once rakes are put into service. Journey time savings
accounted for 32 percent of economic savings (compared to 24 percent in MUTP-1). The
current evaluation does not include benefits from waiting time savings, as these would
be relatively small at peak periods (if they were included at the conventional value of
twice in-vehicle time, they would increase total net benefits by over 40 percent). Thus,
the benefit accruing due to reduction in waiting time has not been taken into account
while calculating the ERR. The value of time was derived in the CTS study as Rs.25.00
per hour (2006 prices). This has been updated to Rs.27.50 per hour for the base year
(2008) and increased by five percent annually to reflect increases in per capita income.
The CTS estimates were derived by transportation mode, based on household
characteristics (including trip frequency and household income) recorded in the
household survey.
(c) The improved level of service is forecast to generate additional demand in the Project
Case compared to the Base Case. The benefits for these passengers have been estimated
using the ‘rule of half’.
(d) Some of these passengers will be diverted from other modes. Diversion from car has
been neglected but 20 percent of the additional patronage has been assumed to come
from bus. This reduction in bus patronage will enable service levels to be adjusted
(assuming an average bus occupancy of 54 passengers/bus), leading to a reduction in bus
86

operating costs. These were estimated in the BEST business plan at Rs.45.60 per km
(2008 prices).
(e) The reduction in bus operations will also contribute to reduced pollution and road
congestion. While the Mumbai EMU services generate very limited pollutants locally,
buses emit NO2 and SO2 at an estimated rate of 0.25 kg per bus hour. The direct benefit
was estimated at Rs.175 per passenger per annum (2001 prices) in the MUTP-1 analysis;
this has been updated to Rs.240 in 2008 prices. Indirect benefits from reduced pollution
arise to the population living along the road corridor and are estimated at Rs.5.5 per ton
per person (2008 prices). Road congestion benefits, estimated at Rs 0.05 per passengerkm,
averaged over the day are negligible. Indeed, while based on Mumbai data, they are
conservative compared to results obtained in Paris for instance. 62
Result of Economic Analysis and Sensitivity Analysis:
272. The benefits are calculated for the 35-year period following project completion,
from 2010 to 2045 and the estimated EIRR derived and NPV calculated (using a discount rate of
12 percent). The estimated NPV, discounted to 2010, is about US$262 million in 2008 prices
with an EIRR of 17 percent. The distribution of benefits is shown in Table 3 and the forecast
cash flows in Table 4.
Table 3. Project Benefits (US$ million 2008, discounted at 12 percent to 2010)
Total
Capital expenditure -501
Additional operating cost -1122
Subtotal -1623
User benefits
Benefits to existing passengers
Reduced crowding 952
Reduced journey time 613
Benefits to diverted passengers 80
Subtotal. 1645
Bus-related
Reduced operating costs 178
Pollution benefits 77
Subtotal 255
NPV 262
62 Prud’homme, R. et al, Public Transport Congestion Costs: the Case of Paris Subway, Draft, 2010
87

Table 4. MUTP-2A Forecast Economic Cash Flows
(In crores of Rupees - Nominal)
Year
Capital
Investment
in MUTP-2A
Incremental
Operating
Cost
Comfort
Journey
time
Bus
VOC
Direct
pollution
Indirect
pollution
Diverted
passengers
Economic
Savings
Replacement
Cost of
Assets
Terminal
Value of
Assets
2009-10 -117 0 0 0 0 0 0 0 0 -117
2010-11 -284 0 0 0 0 0 0 0 0 -284
2011-12 -561 -38 47 77 4 0 2 0 131 -468
2012-13 -1014 -296 253 160 40 1 16 7 477 -834
2013-14 -1223 -704 459 260 121 3 49 37 929 -998
2014-15 -662 -767 476 368 173 4 70 59 1151 -278
2015-16 -823 533 393 164 4 66 61 1221 398
2016-17 -889 583 423 171 4 69 67 1318 429
2017-18 -938 740 470 116 3 47 52 1428 490
2018-19 -1017 784 503 135 3 54 64 1543 526
2019-20 -1096 861 538 138 3 55 69 1664 568
2020-21 -1183 939 576 144 4 58 77 1798 615
2021-22 -1183 967 594 148 4 60 79 1852 669
2022-23 -1183 996 611 153 4 61 82 1908 724
2023-24 -1183 1026 630 157 4 63 84 1965 782
2024-25 -1183 1057 649 162 4 65 87 2024 840
2025-26 -1183 1089 668 167 4 67 89 2084 901
2026-27 -1183 1121 688 172 4 69 92 2147 964
2027-28 -1183 1155 709 177 4 71 95 2211 1028
2028-29 -1183 1190 730 182 5 73 98 2278 1094
2029-30 -1183 1225 752 188 5 75 101 2346 1163
2030-31 -1183 1262 775 193 5 78 104 2416 1233
2031-32 -1183 1300 798 199 5 80 107 2489 1306
2032-33 -1183 1339 822 205 5 82 110 2564 1380
2033-34 -1183 1379 846 211 5 85 113 2640 1457
2034-35 -1183 1421 872 218 5 87 117 2720 -90 1446
2035-36 -1183 1463 898 224 6 90 120 2801 -180 1438
2036-37 -1183 1507 925 231 6 93 124 2885 -414 1288
2037-38 -1183 1552 953 238 6 96 128 2972 -864 925
2038-39 -1183 1599 981 245 6 98 131 3061 -1127 751
2039-40 -1183 1647 1011 252 6 101 135 3153 -657 1313
2040-41 -1183 1696 1041 260 7 104 139 3247 2064
2041-42 -1183 1747 1072 268 7 108 144 3345 2162
2042-43 -1183 1799 1104 276 7 111 148 3445 2262
2043-44 -1183 1853 1138 284 7 114 152 3549 2365
2044-45 -1183 1909 1172 292 7 118 157 3655 2799 5271
Net
Benefits
NPV -501 -1122 952 613 178 5 72 80 1899 -425 521 262
ERR 17%
88

273. The sensitivity of these results was tested against changes in seven base
case assumptions:
(a) an increase in investment costs of 20 percent;
(b) including user benefits only
(c) reducing the benefits by ten percent
(d) evaluation period of 15 years
(e) income growth of two percent p.a. instead of three percent p.a.
(f) fares held constant in nominal terms i.e. a reduction in real terms of 7.4
percent p.a.
(g) delays of one, two or three years in the delivery of the trains.
274. Switching values (that is the values which will cause the IERR to be
below the discount rate) for the following variables were also included in the
sensitivity analysis: construction costs, benefit reduction factor, income growth per
year, incremental operating cost, journey time benefits, comfort benefits. They are
presented in Table 5.
Table 5. Switching Values for Key Project Variables
Variable
Switching value
Construction costs
152% of base case
Benefit reduction factor -14% compared to base case
Income growth per year 3.50% (base case is 5%)
Incremental Operating Cost 123% of base case
Comfort benefits
73% of base case
Journey time benefits
57% of base case
275. The results of the sensitivity analysis, given in Table 6, show the project
is robust.
Table 6. Sensitivity of Project Evaluation
Test IRR (%) $ (million)
1 Base 17 262
2 Construction costs +20% 14 162
3 User benefits only 12 7
4 Benefits reduced by 10% 13 72
5 Evaluation period of 20 years 14 62
6 Income growth of 2% p.a. 8 -220
7 Fares constant in nominal terms 25 864
8 1 year delay in EMU procurement 17 259
9 2 years delay in EMU procurement 17 253
10 3 years delay in EMU procurement 17 245
276. Table 6 indicates that benefits approximately triple if fares are held
constant in nominal terms. This is caused by the increased patronage, in both the with
and without-project cases (Table 7), and the resulting increase in benefits due to
frequency and journey time savings as well as the significantly increased comfort
benefits because of the greater relief provided by the project.
89

Table 7. Forecast Number Of Passengers Originating
With and Without Project (million)
2008/9 2011/12 2015/16 2020/21
Fares constant in real terms
Without project 2,648 2,817 2,980 3,324
With project 2,648 2,825 3,282 3,583
Fares constant in nominal terms
Without project 2,648 2,928 3,323 4,136
With project 2,648 2,937 3,659 4,384
Mumbai Suburban System Financial Performance and Impact on IR Finances
277. Although the Mumbai system is one of the world’s major suburban
railways, it is nevertheless a relatively small component of IR’s overall operations. In
2008/9, the Mumbai system represented an estimated 12 percent of IR’s passenger
traffic (measured in passenger-km) and about seven percent of IR’s total traffic task 63 .
However, because of the very high average loads carried and the low average fare, it
only generated about 1.5 percent of IR’s total revenue and about two percent of its
total working expense (excluding depreciation). Because MUTP-2A will reduce
overcrowding and thus require more assets and services to carry the same volume of
traffic, its financial performance is expected to deteriorate for at least the mediumterm.
However, its comparatively small share of the total IR business means that its
financial performance has only a minor impact on the overall financial performance of
IR as a whole, which is far more dependent on railway-wide tariff policies and
continued strong growth in freight traffic.
Projected Financial Performance of Mumbai Suburban System
278. Using the operating and financial model described in the traffic forecast
section, MRVC have undertaken financial projections of the Mumbai suburban
system over a 25-year period from 2008-09, which takes into account the impact of
both the ongoing MUTP-1 (assumed to be completed in 2010-11) as well as MUTP-
2A (assumed to be completed in 2014-15). A Base Case analysis has been undertaken
as well as sensitivity analyses for the key assumptions.
279. Depreciation charges were derived directly as the annual cost of
replacing the fleet. An estimate of depreciation has been made using the results of a
detailed analysis undertaken by consultants in 1996 which examined all renewable
assets used by the suburban services (equivalent to about 15 percent of total cost). 64
280. Table 8 and Figure 1 show that the deficit, excluding dividend
payments to GOI and any depreciation related to infrastructure, will increase to
around Rs 200 crore (Rs 2008), if fares increase in line with inflation or to around Rs
1100 crore if fares remain at their current levels.
63 As measured by traffic units, the sum of passenger-km and net tonne-km.
64 This bears little or no relation to the ‘depreciation’ included in the IR accounts, which is primarily
determined by the surplus available each year for reinvestment in assets and has been excluded from
these projections. The depreciation allowance calculated by IR is not a true measure of depreciation but
rather an allocation of the annual appropriation of surplus cash to a Depreciation Renewal Fund; it has
no direct relation to asset values or lives.
90

Figure 1. Financial Projections of Mumbai Suburban Services (Rs crores 2008)
2,500
2,000
1,500
1,000
500
0
Deficit (Constant nominal fares)
Revenue (Constant real fares)
Cost (excl dividend and infra depreciation)
Deficit (Constant real fares)
Revenue (Constant nominal fares fares)
281. As highlighted in Table 8, the increase in the deficit is directly linked to
the reduction in crowding. The average passengers per coach is expected to reduce by
around 35 percent, from about 234 to about 155, as the additional fleet is introduced
before beginning to increase again as demand increases. This increase in the fleet can
be seen in the financial projections, with working expenses increasing from Rs 1,300
crore to about Rs 1,900 crore as the additional vehicles are introduced.
282. The estimated working ratios and operating ratios 65 to 2020/21 are
given in Table 9 below. They assume fares rise in line with inflation and are given
including and excluding the suburban fare surcharge. Without the project, the working
ratios are below 100 percent and the Zonal Railways would be able to carry on in the
short-term without financial support from third parties. If MUTP-2A is undertaken the
Zonal Railways would be less able in the short term to generate profit if revenues
decrease (the working ratio is consistently over 100 percent). In addition, if MUTP-
2A is carried out, the suburban railway would be less able to recover operating costs
on the long term without financial support and would not cover its long run variable
costs because of low tariffs (the operating ratio is higher with MUTP-2A than
without).
65 The working ratio is the ratio of a company's total annual expenses (excluding depreciation and debtrelated
expenses) to the annual gross income. The operating ratio is the ratio of the company's
operating expenses (also excluding debt service charges) to operating revenues.
91

283. In spite of this, the results for the Mumbai system even with MUTP-2A
remain reasonable compared to suburban systems elsewhere in the world and
significantly better than the results for the two other major IR suburban systems in
Chennai and Kolkata.
92

Table 8. Mumbai Suburban Services – Financial Projections Assuming MUTP-2A (Rs crores 2008/9)
Assumptions
1 Fares Fare rise in line with inflation from 09/10
2 Fare surcharge For Phase I - As decided between IR,GOM and MOF
For Phase II - Phase I Surcharge continues
SUBURBAN OPERATING FORECAST STATEMENT (Rs crores Mar 08):
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
Revenue - Constant real fares
1 Fare Revenue 1,165 1,127 1,093 1,114 1,147 1,184 1,216 1,313 1,381 1,403 1,437 1,469 1,502 1,536 1,570
2 Other 44 51 55 59 64 69 75 81 87 94 102 110 119 128 139
3 Total 1,209 1,178 1,148 1,173 1,212 1,253 1,291 1,394 1,468 1,497 1,539 1,579 1,621 1,664 1,709
Revenue - Constant nominal fares
1 Fare Revenue 1,165 1,127 1,093 1,114 1,086 1,055 1,019 1,039 1,029 986 952 918 886 854 824
2 Other 44 51 55 59 64 69 75 81 87 94 102 110 119 128 139
3 Total 1,209 1,178 1,148 1,173 1,150 1,124 1,094 1,120 1,117 1,080 1,054 1,028 1,005 983 963
Expenditure (Excl. Depreciation) – Constant real fares
1 Staff 722 749 808 820 824 834 946 1,104 1,104 1,100 1,098 1,096 1,093 1,091 1,089
2 Materials 148 154 166 169 169 171 194 227 227 226 226 225 225 224 224
3 Traction Energy 230 247 254 230 219 218 251 304 307 307 309 310 311 312 314
4 Other 182 189 204 207 208 210 238 278 278 277 277 276 276 275 274
5 Working Expenses 1,282 1,339 1,432 1,425 1,420 1,433 1,629 1,914 1,916 1,911 1,909 1,907 1,905 1,903 1,901
Expenditure (Excl. Depreciation) – Constant nominal fares
1 Staff 722 749 808 820 828 840 956 1,119 1,123 1,123 1,126 1,128 1,131 1,134 1,138
2 Materials 148 154 166 169 170 173 196 230 231 231 231 232 232 233 234
3 Traction Energy 230 247 254 230 220 220 254 308 311 313 316 318 321 324 327
4 Other 182 189 204 207 209 212 241 282 283 283 284 284 285 286 287
5 Working Expenses 1,282 1,339 1,432 1,425 1,427 1,445 1,647 1,939 1,949 1,951 1,957 1,963 1,969 1,977 1,985
Deficit
1 Constant real fares -73 -161 -284 -252 -209 -180 -339 -519 -448 -414 -370 -328 -284 -239 -193
2 Constant nominal fares -73 -161 -284 -252 -277 -321 -553 -819 -832 -871 -902 -934 -965 -994 -1,022
Passengers/Vehicle 234 226 213 214 212 211 178 155 163 166 170 174 178 182 186
93

Table 9. Mumbai Suburban Services – Working and Operating Ratios with and without MUTP-2A
2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
Without MUTP-2A
Working ratio
Incl surcharge 106% 115% 107% 106% 104% 98% 97% 95% 93% 92% 97% 95% 93% 90%
Excl surcharge 114% 124% 121% 120% 116% 114% 111% 108% 105% 102% 97% 95% 93% 90%
Operating ratio
Incl surcharge 127% 138% 128% 127% 125% 118% 116% 114% 112% 110% 116% 114% 111% 108%
Excl surcharge 136% 148% 146% 144% 139% 137% 133% 129% 126% 123% 116% 114% 111% 108%
With MUTP-2A
Working ratio
Incl surcharge 109% 120% 115% 113% 111% 109% 107% 105% 103%
Excl surcharge 126% 137% 130% 128% 124% 121% 117% 114% 111%
Operating ratio
Incl surcharge 131% 144% 138% 136% 134% 131% 129% 126% 123%
Excl surcharge 152% 165% 157% 153% 149% 145% 141% 137% 134%
94

Impact of Mumbai Services on IR Financial Performance
284. Table 10 summarizes the estimated revenue and working expenses for key IR
market segments for 2008/2009. This is based on the analyses of the costs of the freight and
passenger services undertaken annually by IR, updated to the 2008/2009 control totals for
revenue and expenditure.
Table 10. Estimated IR Financial Results by Segment 2008/9
Revenue Pass-km/ntk Yield Working expense (Rscr) Unit cost (Ps/tu)
Rs cr (billion) (Ps/unit-km) Labour Non-labour Labour Non-labour
Passengers 20193 571 35.3 10203 8008 17.9 14.0
Other coaching 1964
EMU - Mumbai 1250 85 14.8 548 430 6.5 5.1
EMU – other 497 46 10.8 513 403 11.2 8.8
Freight 53433 547 97.8 10317 8097 18.9 14.8
Infrastructure 7706 887 6.2 0.7
Corporate 2525 3666 1339 2.9 1.1
Total WE 79862 1249 64.0 32952 19164 26.4 15.3
(1) Excludes dividend and DRF contributions. Includes pensions (included in labour) and recurrent component of 6 th
Pay Commission. Excludes arrears component of 6 th Pay Commission.
285. The presentation of revenue and working expenses in Table 10 separately
identifies train operation, infrastructure and general administration (‘corporate’) costs. It only
covers working expenses, including pension costs but excluding contributions to DRF and also
any share of the dividends payable to GOI. Thus revenue from the non-EMU passenger services
(including other coaching) made an estimated surplus of Rs 3946 crore over its train operations
costs as a contribution to infrastructure costs, corporate costs and depreciation. Freight, by
contrast, contributed Rs 35,019 crore towards these same costs; it is cross-subsidizing passenger
services, by about Rs 4-5,000 cr , but is also generating all the IR dividend and retained earnings
required for capital projects.
286. The EMU services in general, and the Mumbai EMU services in particular, are
relatively small in comparison the IR operations as a whole, with the Mumbai services
representing only around two percent of the total working expenses. As a result, the overall IR
surplus is relatively immune to the performance of the Mumbai services unless some relatively
extreme policy scenarios are assumed.
95

Environmental Management Aspects
Annex 10: Safeguard Policy Issues
INDIA: Mumbai Urban Transport Project-2A
287. Most of the components sub-urban rail infrastructure in Mumbai that MUTP-2A
proposes to implement are likely to have environmentally beneficial outcomes as rail based mass
transport is far less polluting than any other form of land-based transport. However, limited
negative impacts are expected due to the removal of a few trees, and other important natural and
cultural resources due to the provision of stabling lines and construction of electric substations
for the traction. Most of the negative impacts are however confined to the implementation stage
and can be mitigated with careful environmental management planning. Environmental and
Social (E&S) safeguard frameworks for the project are in line with that approved by the Bank for
MUTP-1. E&S risks are very minimal in view of nature and location of activities proposed under
the project. Finally, MRVC has recently been certified to ISO 14001:2004 and ISO 18001:2007
Environmental Management Approach and Instruments
288. Since MUTP-2A builds on the activities initiated under MUTP-1, MRVC began
the environmental assessment with a review of its on-going activities. Using the same
consultants who have assisted in building capacity during MUTP-1, and are therefore familiar
with the current situation and how it has evolved within MRVC and participating Railways, the
review has been supplemented with site visits to all identified candidate sites, and review of
contract documents prepared in MUTP-1 as well as MUTP-2A. A review of the applicable
policies of the GoI, GoM and local regulations of the municipalities, where the subprojects are
proposed was also carried out. Following this, an Environmental Assessment (EA) has been
undertaken with Environmental Management Plans being prepared for each component and
modified to focus on issues specific to individual sites.
289. Baseline assessment of the environmental status within a direct impact zone of
one hundred meters radius of the project site was undertaken. The data collected during from
these visits was analyzed in terms of the type and scale of impact of the project. Detailed field
visit to most of the site location are undertaken to identify and analyze site specific issues based
on following:
(a) Floral and faunal ecological status
(b) Air quality
(c) Noise level
(d) Water quality – Surface and Groundwater, Seawater intrusion status
(e) Soil quality
(f) Land use status
(g) Traffic and transport network
(h) Visual and aesthetic status
(i) Sensitive receptors (such as schools, hospitals etc)
(j) Status of Archaeological, Architectural, Historical, Religious and other such cultural
properties
96

(k) General social features
(l) Hazardous waste handling and disposal
290. Of the various components, the DC to AC conversion --which involves
construction of traction substations, subsectioning and paralleling posts, and sectioning and
paralleling posts-- construction of stabling lines and provision of maintenance facilities for
EMUs were considered to be important from the environment point of view.
291. The EA has been carried out with respect to various components namely land use,
ecology, air quality, noise levels and severance. Depending upon the sub project, other relevant
impact areas have also been considered.Apart from these, activities associated with the project
during the preconstruction, construction and post construction stage are taken in to consideration
to identify the impacts.
Environmental Impacts and Management Measures
292. Based on the overall understanding of the project and assessment of the site
specific issues, ERM has formulated generic and specific Environmental Management Plan.
293. Environmental Bill of Quantities: Based on the impacts identified from the
assessment, the environmental bill of quantities (BoQ) have been estimated and have been
incorporated into the EMP. If required these can be included in the contract for implementation
by contractor/implementing agency.
294. Stabling Lines Construction for Additional EMUs: This activity comprises laying
of short lengths of track (about 300m for about 70 12-car trains) close to ten railway stations
close to where trains terminate/originate. Key impacts include damage to/removal of trees within
the proposed alignment for the stabling line. No other impacts are expected except during the
construction phase when proper mitigation measures can substantially limit/eliminate adverse
impacts. These temporary impacts include: air pollution from stored material and vehicle
movement through congested areas, potential for pollution of water courses close to the
alignments due to spillage of material, increased risk of accidents due to movement of heavy
vehicles in inhabited areas close to the sites. The long term impacts cannot be completely
avoided but would be minimized by careful selection of stabling line alignments, or mitigated by
transplanting trees, identified as important, or compensatory plantation. Of the currently
identified locations, most significant impacts are close to Bhayander staion (North) where the
railway land has rows of trees and the termination point goes very close (~ 50m) to the south
bank of the Bhayander creek where a few mangroves are located at the edge of the creek. While
care would be taken during the construction and the EMP provides for limiting the extent of
construction, accidental damage could result. In case of construction related impacts, the EMP
includes provisions for ensuring that the vehicles used by contractors comply with the standards,
are operated with proper safety considerations, etc. Facilities would be provided for laborers
housed by the contractor and personal protective equipment would be compulsory for all site
workers.
295. Traction Substations and Sectioning Post Installation for DC/AC conversion:
The key impacts pertain to the removal of or damage to trees, and in one/two cases (a very small
97

number of) mangroves due to the project activities. Other impacts are mostly localized and
temporary – pertaining mostly to the construction stage of the project. These include the
deterioration of air quality due to gaseous pollutants and noise, increased risk of traffic accidents
in crowded locations, potential for water quality degradation close to construction sites, handling
of construction and demolition waste, including potential for hazardous waste such as in
locations where older structures need to be dismantled – Chinchpokli, Sion, and Khopoli,
hazardous conditions for on-site labour as well as passers-by given the urban setting for the
activities. Management measures specified under the project include minimization of treecutting,
provision of transplantation and if not possible, compensatory plantation as directed by
the respective Tree Authority under each municipal body has been made for each site.
Precautions are specified to avoid and minimize, if unavoidable, damage to (the very few)
mangroves, close to stabling line extensions like Bhayander. For the construction phase,
following the review of sample contract documents, contractors’ responsibilities are being
specified to ensure that the agreed mitigation measures – limiting pollution from
vehicles/equipment by complying with standards, provision of adequate facilities for housing,
personal protective equipment, including those for preventing electric shocks, and health care for
workers, safe storage of material and equipment, are integrated in appropriate places. In places
locations where special care is required to be exercised, such as in the case of handling asbestos,
the contracts specify the contractors’ responsibilities and methods for handling.
296. Air Pollution Reduction: The conversion to AC from DC would result in about 30
percent of energy savings per coach km traveled (specific energy consumption). Beneficial
environmental impacts due to the project include avoided emissions of local and global air
pollutants. The reduction in the consumption of energy due to use of state-of-the-art technologies
such as regenerative braking, DC to AC conversion would reduce the emissions of particulates,
SOx and NOx at source power plants, reducing local damage. In addition, reduction in specific
energy would also be reduced. It is currently estimated that the approximately 285,000 MWh of
energy saved annually by interventions under the project has the potential to reduce about
228000 t CO2e of GHG emissions.
Environmental Implementation Arrangements
297. As the project components are spread over various authorities such as MRVC, CR
and WR, the institutional setup will play an important role in implementation of the EMPs. Both
MRVC and CR have agreed to hire services of Project Management Consultant (PMC) to
implement activities under the project.
298. MRVC has recently been certified to ISO 14001:2004 and ISO 18001:2007, with
the EMPs developed under MUTP-2A forming the basis on which its performance will be
measured. This certification will lead to streamlined environmental management across all of
MRVC’s operations. The Management Representative required as per the ISO compliant system
will be the Deputy Chief Engineer. S/he would supervise the PMC hired by MRVC and coordinate
with the respective Chief Engineer of CR to confirm compliance with the relevant
provisions of the EMP.
299. The EMP will be implemented through the C.Rly/MRVC by incorporating the
EMP requirements in the contractual agreement. For the contracts to be executed through the
98

participating Railways, it has been agreed that the contractor shall submit a report on compliance
with the environmental mitigation measures (Environmental Compliance Reports, ECRs) before
start of construction activities and periodically thereafter to Project In-charge. As per ISO
14001, a suitable officer in MRVC will be assigned duty of visits to various sites and review of
ECRs at sites and submit a report to World Bank.
Environmental Management Monitoring and Reporting
300. Monitoring and Reporting would be carried out under the project using the
arrangement developed under MUTP-1. The monitoring and reporting process for mitigation
measures during construction will initiate from the contractor at the lowest rung who will report
to the site engineers of MRVC/CR. CR would report regularly on environmental management
through MRVC and through its Deputy Chief Engineer, MRVC’s own monitoring and reporting
would cover periodic site visit and visual inspections for plantation, provision and use of
personal protective equipment at site, provision of safety measures to avoid accidents, as well as
pollution monitoring for ambient environmental quality – air and water, as appropriate. Bimonthly
meetings under the aegis of the MRVC Deputy Chief Engineer are envisaged where the
subproject specific environmental issues would be discussed at these meetings to be attended by
project Engineers, PMC, and Contractor’s official responsible for environment, health and safety
issues on site.
Social Impacts and Management Measures
301. A part of social impact assessment in the EA focused on identification and
assessment of social impacts including land acquisition requirements and involuntary
resettlement, if any, and likely impact on livelihoods, labor and human safety with a sentence on
social impact assessment method and process. MUTP-2A has been designed in such a way that
there will be no involvement of private land acquisition and Resettlement and Rehabilitation
(R&R) of Project Affected Households (PAHs). MRVC has entered into an understanding with
MMRDA, which will undertake R&R activities on behalf of MRVC as per the MUTP-1 R&R
Policy. MRVC has experience in social safeguard management by way of coordinating LA and
R&R activities for the rail component of the on-going MUTP-1. The expected social impacts of
MUTP-2A are minimal and it will not require to establish a separate Social Unit for the social
safeguard activities; however, MRVC will designate a senior officer in the PMU for monitor and
coordinating social safeguard activities. MRVC will coordinate social safeguard activities with
MMRDA for implementing mitigation measures, which it has the required capacity to manage.
302. Resettlement and Rehabilitation of PAHs: A few railway employees earlier living
at the proposed site at Thane have shifted away soon after the project was announced and some
ten such railway employees living close to the proposed stabling lines site at Bhaindar North
informed during EA that they will shift away before the commencement of the work. As railway
staff, they will be provided with staff quarters or monthly house rent allowance enabling them to
relocate away from this place. A supplementary social impact survey was carried out at the
proposed site for stabling lines at the Virar Scrap yard to assess the nature and magnitude of
impact on 38 structures located close to the railway tracks. The survey findings were as follows:
(a) Out of 38 structures, 37 were residential structures and one was a temple; none will be
99

impacted by the execution of the proposed stabling lines; however, (b) 13 of these structures
located alongside tracks and occupied by railway employees and their families will need to be
shifted away for safety reasons; they will be provided with staff quarters or receive monthly
house rent allowance enabling them to relocate; (c) the other structures including a temple and
residences for 18 squatter households and six tenants (in private houses) are beyond the
execution zone and will not need to be relocated; (d) the execution areas and the railway tracks at
this stretch will be barricaded for enhancing human safety. Some lands required for the project
have been licensed out by the Railways to its employees for vegetable cultivation in order to
prevent encroachment. These licenses are issued on annual basis and will normally be allowed to
run their course before the work commences. In cases where this is not possible, the licenses will
be terminated with one month’s advance notice as per the license terms and conditions by the
Railways providing the licensees with sufficient time to harvest crops and salvage assets if any
before such licenses come to an end.
303. In order to deal with any future involuntary resettlement impacts due to any
alteration in design or outlay, MRVC has prepared and adopted a Social Management
Framework (SMF) which is detailed under the R&R Policy, which was adopted for the ongoing
MUTP and is satisfactory to the Bank, setting forth the rules and procedures for carrying out any
social, resettlement and rehabilitation activities under the Project, including identification,
assessment and mitigation of potential environmental and social impacts arising from the Project,
carrying out consultations, processing and redressing grievances, monitoring related impacts,
and, if required, limited resettlement and rehabilitation action plans and other development and
entitlement plans for people adversely affected as result of Project implementation. If
resettlement is needed MRVC will prepare a specific resettlement action plan (RAP) based on
the SMF and that is found to be acceptable and satisfactory to the Bank
304. The SMF referred to and outlined in the Chapter-3 of the Project Implementation
Manual provides that any necessary resettlement and rehabilitation (R&R) measures required
due to any future alterations in design or layout will be carried out by MMRDA on behalf of
MRVC as per the MUTP R&R Policy. If resettlement is needed MRVC will prepare a specific
resettlement action plan (RAP) based on the SMF and that is found to be acceptable and
satisfactory to the Bank This arrangement is a continuation of the arrangement established for
implementing R&R measures for the rail component of MUTP. MRVC’s main task will be to
coordinate efforts with MMRDA for carrying out the mitigation measures, for management of
which it has the required capacity. MMRDA already has sufficient experience and capacity for
handling the issues related to R&R for MUTP-2A.
305. The project is to be executed entirely in urban area so there is no impact envisaged
on Tribal community.
306. Bid documents will include provisions to minimize social risks in order to prevent
engagement of child labor, address human safety and hazard risk reduction, ensure equal wages,
and social security measures under applicable labor laws.
307. The safety and health hazards to the nearby community and sensitive receptors if
any shall also be looked for. Mitigation majors shall be framed accordingly and included in the
EMPs for individual projects if required.
100

308. Land Acquisition: There is no land acquisition, and if there will be any in future,
MRVC will carry out LA through the state government as per applicable procedures.
309. Completion of R&R activities under on-going MUTP-1: The R&R activities for
the Railway sub-projects of MUTP-1 have been substantially completed as per applicable norms
set out in the loan agreement as confirmed by MRVC. About 196 land owners whose land was
required for the construction of the Virar Car shed have received 80 percent advance
compensation and the payment of the remaining 20 percent is under process by the GOM with
MRVC funds.
310. Gender and social inclusion: The IR has recently started taking remarkable steps
to address gender and social inclusion aspects in its operations. Sensitivity to issues of
involuntary resettlement is evident in the passing of the Railways Amendment Act, 2008. It is
one of the few such documents to confirm the application of the National Resettlement and
Rehabilitation Policy, 2007. IR’s decision to introduce special passes for the HIV-affected,
students, etc., and introduction of special local trains for women in peak hours are some other
notable examples. In this context, the Bank in cooperation with MRVC will conduct a gender
needs assessment in Mumbai’s urban transport system. It will help prepare a gender action plan,
which could be piloted in the Mumbai suburban railways in future.
Social Management Implementation, Monitoring and Reporting
311. In case of any future alterations in project design requiring LA and R&R, day to
day implementation and monitoring of social safeguard management will be done by MMRDA
whereas MRVC will undertake regular stock taking and prepare status updates.
312. MRVC will monitor the coordination of civil works with any necessary R&R
activities undertaken by MMRDA in future. A single evaluation of social impact mitigation and
value added activities will be undertaken at the end of the implementation for future learning,
provided LA and R&R activities are undertaken as a result of design change.
101

Annex 11: Project Preparation and Supervision
INDIA: Mumbai Urban Transport Project-2A
Planned
Actual
PCN review 05/14/2009 05/14/2009
Initial PID to PIC 06/04/2009 06/03/2009
Initial ISDS to PIC 06/08/2009 06/05/2009
Appraisal 04/20/2010 02/08/2010
Negotiations 05/07/2010 05/07/2010
Board/RVP approval 06/29/2010
Planned date of effectiveness 09/15/2010
Planned date of mid-term review 02/28/2013
Planned closing date 06/15/2015
Key institutions responsible for preparation of the project:
Government of India, Mumbai Railway Vikas Corporation Ltd.
Bank staff and consultants who worked on the project included:
Name Title Unit
Hubert Nove-Josserand Team Leader/Sr. Urban Transport Spec. SASDT
Atul Agarwal Transport Specialist SASDT
Ramola Bhuyan Sr. Financial Mgmt. Spec. SARFM
Satya N. Mishra Social Development Spec. SASDS
Manmohan Singh Bajaj
Abduljabbar H. Al Qathab
Senior Procurement Specialist
Senior Procurement Specialist
SARPS
SARPS
Gaurav D. Joshi Environmental Specialist SASDI
Vasile Olievschi Sr. Railway Specialist ECSS5
Gennady Pilch
David Freese
Krishnan Srinivasan
Sr. Counsel
Sr. Finance Officer
Consultant
LEGES
CTRFC
SASDT
Jitendra Sondhi Consultant SASDT
Ed Dotson Consultant SASDT
Alok Nath Bansal Consultant SASDT
Richard G. Bullock Consultant SASDT
Jorge M. Rebelo Lead Transport Spec./Peer Reviewer LCSTR
John Scales Lead Transport Spec./Peer Reviewer EASCS
Shomik Raj Mehndiratta Sr. Transport. Spec./Peer Reviewer EASCS
Radia Benamghar Operations Analyst SASDT
Natalya Stankevich Operations Analyst SASDT
Gizella Díaz Program Assistant SASDO
Ritu Sharma Program Assistant SASDO
Bogdan Filip Popescu E T Temporary SASDT
Bank funds expended to date on project preparation: The breakdown is as follows: (1) Bank
resources: US$407,900, (2) Trust funds: none, (3) Total: US$407,900.
Estimated Approval and Supervision costs: The breakdown is as follows: (1) Remaining costs to
approval: US$25,000, (2) Estimated annual supervision cost: US$200,000.
102

Annex 12: Documents in the Project File
INDIA: Mumbai Urban Transport Project-2A
Client’s documents
1. MoUD, “National Urban Transport Policy”, April 2006
2. MMRDA, “Comprehensive Transportation Study (CTS) for Mumbai Metropolitan Region”,
LEA International Ltd. in joint venture with LEA Associates South Asia Pvt. Ltd.,
Consultant Draft Final Report, April 2008
3. MRVC, “Social Management Framework for MUTP- 2A”, April 2010
4. MRVC, “Draft Environmental Assessment Report and Environmental Management Plan”,
Environmental Resources Management India (ERM), March 2010
World Bank’s documents
5. World Bank Policy Note: Towards A Discussion of Support to Urban Transport
Development in India, March, 2005
6. World Bank, Integrated Safeguard Data Sheet, April 2010
7. World Bank, Project Information Document (PID) Appraisal Stage, March 2010
103

Annex 13: Statement of Loans and Credits
INDIA: Mumbai Urban Transport Project-2A
Original Amount in US$ Millions
Difference between
expected and actual
disbursements
Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm.
Rev’d
P100735 2009 Orissa Community Tank
Management Project
56.00 56.00 0.00 0.00 0.00 104.96 -2.71 0.00
P102331 2009 MPDPIP-II 0.00 100.00 0.00 0.00 0.00 100.26 0.00 0.00
P100101 2009 Coal-Fired Generation
180.00 0.00 0.00 0.00 0.00 180.00 0.00 0.00
Rehabilitation
P093478 2009 Orissa Rural Livelihoods
0.00 82.40 0.00 0.00 0.00 75.06 -0.47 0.00
Project
P096023 2009 Orissa State Roads 250.00 0.00 0.00 0.00 0.00 249.38 0.00 0.00
P094360 2009 National VBD ControlandPolio 0.00 521.00 0.00 0.00 0.00 488.67 13.98 0.00
Eradication
P112033 2009 UP Sodic III 0.00 197.00 0.00 0.00 0.00 197.60 0.00 0.00
P095114 2008 Rampur Hydropower Project 400.00 0.00 0.00 0.00 0.00 318.30 9.30 0.00
P105124 2008 HP DPL I 135.00 65.00 0.00 0.00 0.00 99.75 0.00 0.00
P102737 2008 Bihar DPL 150.00 75.00 0.00 0.00 0.00 111.86 111.10 0.00
P102547 2008 Elementary Education (SSA II) 0.00 600.00 0.00 0.00 0.00 354.45 2.47 0.00
P101653 2008 Power System Development 1,000.00 0.00 0.00 0.00 0.00 602.32 -50.68 0.00
Project IV
P090585 2007 Punjab State Roads Project 250.00 0.00 0.00 0.00 0.00 143.81 -12.19 0.00
P090768 2007 TN IAM WARM 335.00 150.00 0.00 0.00 0.00 428.73 104.56 0.00
P090592 2007 Punjab Rural Water Supply and 0.00 154.00 0.00 0.00 0.00 142.37 81.77 0.00
Sanitation
P096019 2007 HP State Roads Project 220.00 0.00 0.00 0.00 0.00 195.63 24.58 0.00
P083187 2007 Uttaranchal RWSS 0.00 120.00 0.00 0.00 0.00 111.87 49.60 0.00
P090764 2007 Bihar Rural Livelihoods
0.00 63.00 0.00 0.00 0.00 59.64 3.06 0.00
Project
P102768 2007 Stren India's Rural Credit 300.00 300.00 0.00 0.00 0.00 286.88 135.25 0.00
Coops
P071160 2007 Karnataka Health Systems 0.00 141.83 0.00 0.00 0.00 81.60 -13.09 0.00
P100789 2007 AP Community Tank
94.50 94.50 0.00 0.00 0.00 178.37 22.55 0.00
Management Project
P075060 2007 RCH II 0.00 360.00 0.00 0.00 0.00 204.28 42.95 0.00
P075174 2007 AP DPL III 150.00 75.00 0.00 0.00 0.00 76.02 -77.33 0.00
P078538 2007 Third National HIV/AIDS
0.00 250.00 0.00 0.00 0.00 196.46 116.73 0.00
Control Project
P078539 2007 TB II 0.00 170.00 0.00 0.00 0.00 112.22 -13.22 0.00
P099047 2007 Vocational Training India 0.00 280.00 0.00 0.00 0.00 218.34 -0.31 0.00
P093720 2006 Mid-Himalayan (HP)
0.00 60.00 0.00 0.00 0.00 33.24 3.60 0.00
Watersheds
P079675 2006 Karn Municipal Reform 216.00 0.00 0.00 0.00 0.00 173.84 70.84 0.00
P092735 2006 NAIP 0.00 200.00 0.00 0.00 0.00 166.10 55.09 0.00
P079708 2006 TN Empwr and Pov Reduction 0.00 120.00 0.00 0.00 0.00 83.21 30.25 0.00
P078832 2006 Karnataka Panchayats
0.00 120.00 0.00 0.00 0.00 79.92 -33.18 0.00
Strengthening Proj
P083780 2006 TN Urban III 300.00 0.00 0.00 0.00 0.00 195.60 101.35 0.00
104

P086414 2006 Power System Development 400.00 0.00 0.00 0.00 0.00 23.86 -126.14 0.00
Project III
P094513 2005 India Tsunami ERC 0.00 465.00 0.00 0.00 0.00 391.28 387.96 0.00
P073370 2005 Madhya Pradesh Water Sector 394.02 0.00 0.00 0.00 0.00 304.11 224.36 0.00
Restructurin
P073651 2005 DISEASE SURVEILLANCE 0.00 68.00 0.00 0.00 0.00 52.43 44.49 0.00
P075058 2005 TN HEALTH SYSTEMS 0.00 110.83 0.00 0.00 20.06 38.88 48.13 22.23
P077856 2005 Lucknow-Muzaffarpur National 620.00 0.00 0.00 0.00 0.00 237.18 87.18 0.00
Highway
P077977 2005 Rural Roads Project 99.50 300.00 0.00 0.00 0.00 107.69 69.21 0.00
P086518 2005 SME Financing and
520.00 0.00 0.00 0.00 0.00 400.00 0.00 0.00
Development
P084792 2005 Assam Agric Competitiveness 0.00 154.00 0.00 0.00 0.00 91.83 68.88 -0.00
P084790 2005 MAHAR WSIP 325.00 0.00 0.00 0.00 0.00 228.41 129.41 0.00
P084632 2005 Hydrology II 104.98 0.00 0.00 0.00 0.00 84.26 71.71 42.45
P078550 2004 Uttar Wtrshed 0.00 69.62 0.00 0.00 0.00 34.95 2.47 0.00
P050655 2004 RAJASTHAN HEALTH
0.00 89.00 0.00 0.00 0.00 40.26 32.58 0.00
SYSTEMS DEVELOPMENT
P076467 2003 Chatt DRPP 0.00 112.56 0.00 0.00 20.06 50.28 57.05 0.00
P073094 2003 AP Comm Forest Mgmt 0.00 108.00 0.00 0.00 0.00 20.62 0.16 0.00
P071272 2003 AP RURAL POV
0.00 215.03 0.00 0.00 0.00 26.19 -58.48 0.00
REDUCTION
P050649 2003 TN ROADS 348.00 0.00 0.00 0.00 0.00 61.97 61.97 0.00
P067606 2003 UP ROADS 488.00 0.00 0.00 0.00 0.00 93.47 93.47 0.00
P050647 2002 UP WSRP 0.00 149.20 0.00 0.00 40.11 73.38 85.16 0.00
P050653 2002 KARNATAKA RWSS II 0.00 151.60 0.00 0.00 15.04 16.33 3.95 0.00
P050668 2002 MUMBAI URBAN
463.00 79.00 0.00 0.00 0.00 255.19 243.09 112.09
TRANSPORT PROJECT
P040610 2002 RAJ WSRP 0.00 140.00 0.00 0.00 25.84 41.20 28.74 0.00
P069889 2002 MIZORAM ROADS 0.00 78.00 0.00 0.00 0.00 16.43 -13.12 0.00
P071033 2002 KARN Tank Mgmt 32.00 130.90 0.00 0.00 25.07 110.97 51.19 -5.69
P072539 2002 KERALA STATE
255.00 0.00 0.00 0.00 0.00 93.42 93.42 0.00
TRANSPORT
Total: 8,086.00 6,775.47 0.00 0.00 146.18 8,945.33 2,462.69 171.08
INDIA
STATEMENT OF IFC’s
Held and Disbursed Portfolio
In Millions of US Dollars
Committed
Disbursed
IFC
IFC
FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.
2005 ADPCL 39.50 7.00 0.00 0.00 0.00 0.00 0.00 0.00
2006 AHEL 0.00 5.08 0.00 0.00 0.00 5.08 0.00 0.00
2005 AP Paper Mills 35.00 5.00 0.00 0.00 25.00 5.00 0.00 0.00
2005 APIDC Biotech 0.00 4.00 0.00 0.00 0.00 2.01 0.00 0.00
2002 ATL 13.81 0.00 0.00 9.36 13.81 0.00 0.00 9.36
2003 ATL 1.00 0.00 0.00 0.00 0.68 0.00 0.00 0.00
2005 ATL 9.39 0.00 0.00 0.00 0.00 0.00 0.00 0.00
105

2006 Atul Ltd 16.77 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2003 BHF 10.30 0.00 10.30 0.00 10.30 0.00 10.30 0.00
2004 BILT 0.00 0.00 15.00 0.00 0.00 0.00 15.00 0.00
2001 BTVL 0.43 3.98 0.00 0.00 0.43 3.98 0.00 0.00
2003 Balrampur 10.52 0.00 0.00 0.00 10.52 0.00 0.00 0.00
2001 Basix Ltd. 0.00 0.98 0.00 0.00 0.00 0.98 0.00 0.00
2005 Bharat Biotech 0.00 0.00 4.50 0.00 0.00 0.00 3.30 0.00
1984 Bihar Sponge 5.70 0.00 0.00 0.00 5.70 0.00 0.00 0.00
2003 CCIL 1.50 0.00 0.00 0.00 0.59 0.00 0.00 0.00
2006 CCIL 7.00 2.00 0.00 12.40 7.00 2.00 0.00 12.40
1990 CESC 4.61 0.00 0.00 0.00 4.61 0.00 0.00 0.00
1992 CESC 6.55 0.00 0.00 14.59 6.55 0.00 0.00 14.59
2004 CGL 14.38 0.00 0.00 0.00 7.38 0.00 0.00 0.00
2004 CMScomputers 0.00 10.00 2.50 0.00 0.00 0.00 0.00 0.00
2002 COSMO 2.50 0.00 0.00 0.00 2.50 0.00 0.00 0.00
2005 COSMO 0.00 3.73 0.00 0.00 0.00 3.73 0.00 0.00
2006 Chennai Water 24.78 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2003 DQEL 0.00 1.50 1.50 0.00 0.00 1.50 1.50 0.00
2005 DSCL 30.00 0.00 0.00 0.00 30.00 0.00 0.00 0.00
2006 DSCL 15.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2005 Dabur 0.00 14.09 0.00 0.00 0.00 14.09 0.00 0.00
2003 Dewan 8.68 0.00 0.00 0.00 8.68 0.00 0.00 0.00
2006 Federal Bank 0.00 28.06 0.00 0.00 0.00 23.99 0.00 0.00
2001 GTF Fact 0.00 1.20 0.00 0.00 0.00 1.20 0.00 0.00
2006 GTF Fact 0.00 0.00 0.99 0.00 0.00 0.00 0.99 0.00
1994 GVK 0.00 4.83 0.00 0.00 0.00 4.83 0.00 0.00
2003 HDFC 100.00 0.00 0.00 100.00 100.00 0.00 0.00 100.00
1998 IAAF 0.00 0.47 0.00 0.00 0.00 0.30 0.00 0.00
2006 IAL 0.00 9.79 0.00 0.00 0.00 7.70 0.00 0.00
1998 IDFC 0.00 10.82 0.00 0.00 0.00 10.82 0.00 0.00
2005 IDFC 50.00 0.00 0.00 100.00 50.00 0.00 0.00 100.00
IHDC 6.94 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2006 IHDC 7.90 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2006 Indecomm 0.00 2.57 0.00 0.00 0.00 2.57 0.00 0.00
1996 India Direct Fnd 0.00 1.10 0.00 0.00 0.00 0.66 0.00 0.00
2001 Indian Seamless 6.00 0.00 0.00 0.00 6.00 0.00 0.00 0.00
2006 JK Paper 15.00 7.62 0.00 0.00 0.00 7.38 0.00 0.00
2005 K Mahindra INDIA 22.00 0.00 0.00 0.00 22.00 0.00 0.00 0.00
2005 KPIT 11.00 2.50 0.00 0.00 8.00 2.50 0.00 0.00
2003 LandT 50.00 0.00 0.00 0.00 50.00 0.00 0.00 0.00
2006 LGB 14.21 4.82 0.00 0.00 0.00 4.82 0.00 0.00
2006 Lok Fund 0.00 2.00 0.00 0.00 0.00 0.00 0.00 0.00
2002 MMFSL 7.89 0.00 7.51 0.00 7.89 0.00 7.51 0.00
2003 MSSL 0.00 2.29 0.00 0.00 0.00 2.20 0.00 0.00
2001 MahInfra 0.00 10.00 0.00 0.00 0.00 0.79 0.00 0.00
Montalvo 0.00 3.00 0.00 0.00 0.00 1.08 0.00 0.00
1996 Moser Baer 0.00 0.82 0.00 0.00 0.00 0.82 0.00 0.00
1999 Moser Baer 0.00 8.74 0.00 0.00 0.00 8.74 0.00 0.00
2000 Moser Baer 12.75 10.54 0.00 0.00 12.75 10.54 0.00 0.00
106

Nevis 0.00 4.00 0.00 0.00 0.00 4.00 0.00 0.00
2003 NewPath 0.00 9.31 0.00 0.00 0.00 8.31 0.00 0.00
2004 NewPath 0.00 2.79 0.00 0.00 0.00 2.49 0.00 0.00
2003 Niko Resources 24.44 0.00 0.00 0.00 24.44 0.00 0.00 0.00
2001 Orchid 0.00 0.73 0.00 0.00 0.00 0.73 0.00 0.00
1997 Owens Corning 5.92 0.00 0.00 0.00 5.92 0.00 0.00 0.00
2006 PSL Limited 15.00 4.74 0.00 0.00 0.00 4.54 0.00 0.00
2004 Powerlinks 72.98 0.00 0.00 0.00 64.16 0.00 0.00 0.00
2004 RAK India 20.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00
1995 Rain Calcining 0.00 2.29 0.00 0.00 0.00 2.29 0.00 0.00
2004 Rain Calcining 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.00
2005 Ramky 3.74 10.28 0.00 0.00 0.00 0.00 0.00 0.00
2005 Ruchi Soya 0.00 9.27 0.00 0.00 0.00 6.77 0.00 0.00
2001 SBI 50.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1997 SREI 3.21 0.00 0.00 0.00 3.21 0.00 0.00 0.00
2000 SREI 6.50 0.00 0.00 0.00 6.50 0.00 0.00 0.00
1995 Sara Fund 0.00 3.43 0.00 0.00 0.00 3.43 0.00 0.00
2004 SeaLion 4.40 0.00 0.00 0.00 4.40 0.00 0.00 0.00
2001 Spryance 0.00 1.86 0.00 0.00 0.00 1.86 0.00 0.00
2003 Spryance 0.00 0.93 0.00 0.00 0.00 0.93 0.00 0.00
2004 Sundaram Finance 42.93 0.00 0.00 0.00 42.93 0.00 0.00 0.00
2000 Sundaram Home 0.00 2.18 0.00 0.00 0.00 2.18 0.00 0.00
2002 Sundaram Home 6.71 0.00 0.00 0.00 6.71 0.00 0.00 0.00
1998 TCW/ICICI 0.00 0.80 0.00 0.00 0.00 0.80 0.00 0.00
2005 TISCO 100.00 0.00 0.00 300.00 0.00 0.00 0.00 0.00
2004 UPL 15.45 0.00 0.00 0.00 15.45 0.00 0.00 0.00
1996 United Riceland 5.63 0.00 0.00 0.00 5.63 0.00 0.00 0.00
2005 United Riceland 8.50 0.00 0.00 0.00 5.00 0.00 0.00 0.00
2002 Usha Martin 0.00 0.72 0.00 0.00 0.00 0.72 0.00 0.00
2001 Vysya Bank 0.00 3.66 0.00 0.00 0.00 3.66 0.00 0.00
2005 Vysya Bank 0.00 3.51 0.00 0.00 0.00 3.51 0.00 0.00
1997 WIV 0.00 0.37 0.00 0.00 0.00 0.37 0.00 0.00
1997 Walden-Mgt India 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00
2006 iLabs Fund II 0.00 20.00 0.00 0.00 0.00 0.00 0.00 0.00
Total portfolio: 956.52 249.41 42.30 536.35 604.74 175.91 38.60 236.35
Approvals Pending Commitment
FY Approval Company Loan Equity Quasi Partic.
2004 CGL 0.01 0.00 0.00 0.00
2000 APCL 0.01 0.00 0.00 0.00
2006 Atul Ltd 0.00 0.01 0.00 0.00
2001 Vysya Bank 0.00 0.00 0.00 0.00
2006 Federal Bank 0.01 0.00 0.00 0.00
2001 GI Wind Farms 0.01 0.00 0.00 0.00
2004 Ocean Sparkle 0.00 0.00 0.00 0.00
2005 Allain Duhangan 0.00 0.00 0.00 0.00
Total pending commitment: 0.04 0.01 0.00 0.00
107

Annex 14: Country at a Glance
INDIA: Mumbai Urban Transport Project-2A
108

109

Annex 15: Maps
INDIA: Mumbai Urban Transport Project-2A
110

To Palghar
VAITARNA
INDIA
MUMBAI URBAN TRANSPORT PROJECT IIA
Rail Components
Virar Northwest 3
6
Virar Northeast
MUTP IIA RAIL PROJECT COMPONENTS:
COMPONENT 1
PROCUREMENT OF 72 NEW TECHNOLOGY EMU TRAINS
COMPONENT 2
MUTP I RAIL PROJECT COMPONENTS:
TRACTION SUBSTATIONS
RAIL (5TH LINE)
RAIL (PAIR OF LINES)
16
Virar Cutting Yard
VIRAR
6
DC TO AC CONVERSION (INCLUDING
SIGNAL AND TELECOM IMPROVEMENTS)
NON-BANK FUNDED TRACTION SUBSTATIONS
BANK FUNDED TRACTION SUBSTATIONS
COMPONENT 3
EMU LOCATION AND NUMBER OF STABLING LINES
AT THE LOCATION
EXISTING:
RAILWAY STATIONS
MAIN ROADS
ROAD UNDER CONSTRUCTION
LOCAL ROADS
RAILROADS
METRO LINE 1
M
METRO STATIONS ON LINE 1
Vasai Road Southwest 2
VASAI ROAD
To Kasara Station,
3 stabling lines,
xx km from Mumbai CST
Mumbai
1
Titwala
Manori Creek
Borivali Northwest 4
Borivali Southwest
3
Malad Creek
M
M
M
MAHIM - BETWEEN LINE BORIVALI
5TH
GOREGAON
Oshiwara
JOGESHWARI
BORIVALI - PAIR VIRAR OF LINES
ADDITIONAL
WESTERN EXPRESSWAY
BORIVALI
MALAD
EAST
EASTERN EXPRESSWAY
LINES
- OF T KURLA HANE PAIR ADDITION A L
THANE
Thane
DIVA
12
Thakurli
KALYAN
1
Ambarnath
To Karjat Station,
2 stabling lines,
99 km from Mumbai CST
to Khopoli Station,
5 stabling lines,
xx km from Mumbai CST
ANDHERI
M
M
M
M
NAVI
MUMBAI
ARABIAN
SEA
SANTA CRUZ
SAKINAKA
M M
MM
M
M
M
Thane Creek
0 5
KILOMETERS
BANDRA
Bandra
Kurla
Sion
4
Sion
4
CHEMBUR
MANKHURD
HARBOUR LINE
MAHIM
Mahim
Bay
DADAR
SATIS
WESTERN RAILWAY
Wadala
Road
Belapur
4
Chinchpokli
Mahalaxmi
CENTRAL RAILWAY
Panvel Creek
3
Panvel
ATC
PILOT
PROJECT
CHURCHGATE
CST
MUMBAI
SHEVA
JANUARY 2010
URAN
This map was produced by the
Map Design Unit of The World Bank.
The boundaries, colors, denominations
and any other information shown on
this map do not imply, on the part of
The World Bank Group, any judgment
on the legal status of any territory, or
any endorsement or acceptance of
such boundaries.
To Karjat Station,
2 stabling lines,
99 km from Mumbai CST
IBRD 37317