-~-------····-·· -·- - ---~-········---···-- 82706 INDIA COUNTRY PORTFOLIO PERFORMANCE REVIEW FY 2..003 Joint Report of Tbe Worlo Bank ana tbe Government of Inoia Februar~ 2004 INDIA COUNTRY PORTFOLIO PERFORMANCE REVIEW FY .2003 joint Report of The Wor{ll Ballk. Ann Government of Inma Iooia Count~ Department Department of Economic Affairs South .Mia Region Minist~ of Finance The Worla Bank Government of rnaia INDIA COUNTRY PORTFOLIO PERFORMANCE REVIEW FY 2003 Foreword The India Country Portfolio Performance Review (CPPR) is an annual report on the World Bank assistance program to India. It describes the composition and quality of the portfolio for the Bank fiscal year. The review is conducted jointly by the Department of Economic Affairs (DEA) and the World Bank. The CPPR process represents a continuing commitment by the Government oflndia and the World Bank to find ways to improve the quality, implementation and sustainable outcomes of Bank-assisted projects in India. The attached report presents the findings of the CPPR for the Bank fiscal year from July 1, 2002 to June 30, 2003, and recommendations for improving portfolio performance. Michael Carter Ranjit Bannerji Country Director, India Joint SecretarJ The World Bank Department of Economic Affairs Ministry of Finance Government of India Table of Contents Page No. Foreword A. Introduction 1 B. Overview ofFY03 Portfolio 1 C. Quality of the Portfolio 3 D. Portfolio Management 6 E. Portfolio Action Plan for FY04 7 Figures Figure 1. Annual Trends in Commitments and Disbursements, FY98-03 1 Figure 2. Age Profile ofFY03 Portfolio 2 Figure 3. Portfolio by sector in FY03 2 Figure 4. New Commitments by sector, FY00-03 2 Figure 5. Portfolio by location of activity in FY03 3 Figure 6. Portfolio by location of implementing agency in FY03 3 Figure 7: Status of Performance Indicators and Targets 3 Figure 8. Percentage of Projects at Risk in the Portfolio, FY98-03 4 Figure 9. Trends in Disbursement Ratio, FY98-03 4 Figure 10: Disbursement Trend for projects in FY03 portfolio 5 Figure 11. Satisfactory DO rated by OED and disconnect with last PSR 5 Statistical Appendix Table Al. Size ofPortfolio, FY96-03 10 Table A2. Age Profile ofFY03 Portfolio 10 Ta-ble A3. Projects at Risk and Disbursement Ratio, FY96-03 11 Table A4. Satisfactory Development Outcomes rated by OED and last PSR, FY95-03 11 Tabl~ AS. Composition ofPortfolio by Sector in FY03 11 Table A6. Composition of the Portfolio by State, FY97-03 12 Table A 7. Projects Approved in FY03 13 Table A8. Projects Extended in FY03 13 Table A9. Projects Closed in FY03 14 Table A10. Cancellations in FY03 (including cancellations at closing) 14 Table All. Forecast Disbursement Ratios for FY04, FY05, FY06 14 AIJmexes Annex 1. Status of agreed portfolio actions in FY02 CPPR 15 Annex 2. Problem Projects at the start ofFY04 and proposed proactive actions 19 Annex 3. Status of actions taken on problem projects at start ofFY03 20 Annex 4. Bank-wide Regional & Sectoral Portfolio Performance Indicators, FY02-03 21 Annex 5. Sector-wise analysis of India portfolio disbursement trends in FY02 and FY03 22 Annex 6. Trends in Commitments and Disbursements, FY95-03 23 Annex 7. FY04 action plan for slow disbursing projects 24 Annex 8. Preparation time and cost for projects approved between FY00-03 27 Annex 9. Sector-wise list ofiBRD Loans and IDA Credits as of June 30, 2003 28 Annex 10. Sample Project Implementation Readiness Checklist 31 Annex 11. Summary of CPPR Review Meeting with DEA, January 8, 2004 32 Annex 12. Detailed Portfolio Action Plan for FY04 33 Annex 13. Active Trust Funds in India, as of June 30, 2003 38 Annex 14. FY04 Portfolio Indicators by Sector (projected) 39 Annex 15. Sector-wise review of performance indicators 40 Annex 16. Selected Portfolio Definitions 48 COUNTRY PORTFOLIO PERFORMANCE REVIEW FY03 A. INTRODUCTION 1. The annual India Country Portfolio Performance Review (CPPR) is based on a continuous review of portfolio performance and implementation issues at the state and national levels. This report discusses the status of the portfolio at the end ofFY03\ proposes performance targets for FY04, and summarizes the main recommendations agreed with the Government of India for improving portfolio performance and quality, and attaining the proposed targets (Section E and Annexes 11, 12). The CPPR focuses on investment projects and excludes structural adjustment loans (SALs). The approach adopted in the CPPR involves a gradual shift in the focus from implementation issues to development objectives and outcomes. B. OVERVIEW OF FY03 PORTFOLI02 2. Size and Composition. The World Bank's India portfolio on June 30,2003, comprised 70 investment projects with a net commitment of$13 billion. Of this $6.1 billion was IDA credits, $6.8 billion was IBRD loans and $0.2 million was other funds (such as Global Environment Facility and Montreal Protocol). The undisbursed balance was $8.1 billion ($3.7 billion IDA and $4.3 billion IBRD). Annex 9 provides a complete list of active projects in the portfolio as of June 30, 2003. 3. Between 1998 and 2003, the overall portfolio size has slightly declined (see Table A1 in the Statistical Appendix). Net commitments have marginally declined from $13.3 billion to $13 billion in this period, while new commitments in FY03 were $1.5 billion (for eight projects), which is well below the past few years. Figure 1 shows the annual trends in commitments and disbursements. Figure 1. Annual Trends in Commitments and Disbursements3 (as of June 30, $billion) D Total Net Connnitments DNew Connnitments in FY l.1'l1 Total Undisbursed Balance DDisbursements in FY USSb 14 12 10 8 6 4 2 0 FY98 FY99 FYOO FY01 FY02 FY03 1 Bank fiscal year is July 1 to June 30 2 Portfolio Definitions given in Annex 15 3 Excluding four structural adjustments loans that have been granted to India for a total of$750m- $250m in FYOO (Uttar Pradesh), $150m in FYOl (Karnataka), and $350m in FY02 (Andhra Pradesh and Kamataka). India Country Portfolio Performance Review FY03 Pagel 4. The age profile of the FY03 portfolio is given in Figure 2 (and in Table A2). Currently there are nine projects which are seven-eight years old, and on average have disbursed about 75%. Another 17 projects are five-six years old and have disbursed an average of only 57%. All projects of five or more years have a combined undisbursed balance of about $1.3 bn, of which 45% is concentrated in seven health projects, 26% in 10 rural development projects, and 15% in one multi-sector PREM project. Figure 2 : Age profile of FY03 portfolio (as of June 30, $million) SM I D Net Commitment t:l Undisbursed Balance I 2500 2000 1500 r- .- .·.. r 1000 500 0 CL ~ I I · .. FY95 FY96 FY97 FY98 FY99 FYOO FY01 FY02 FY03 5. Analysis by Sector. Infrastructure and Energy, which includes transport, urban water and sanitation, urban development, and disaster management, was the largest sector in the portfolio in FY03, with 23 projects amounting to $6.4 billion or 48% of total net commitments (Figure 3, Table A5 and Annex 15). Rural Development accounted for 24% of total net commitments in FY03, human development for 21%, PREM for 5%, and environment and social development for 2%. Looking at new commitments over the previous four fiscal years (Figure 4), the distribution of new projects is heavily skewed towards the Infrastructure and Energy sector, which accounts for 60% of the $8.1 billion new commitments and 33% of the 42 new projects in the period FY00-03. Within this sector, transport projects account for $3.5 billion (43% of the total) and disaster operations for $443 m (5% of total). Figure 3: FY03 PortfoUo by §ector Figure 4: New commitments, FY00-03 (Commitment value as percent of total) (Percent of total new commitment) Human Rural Human Energy& Others Development Development Infra 2% 21 11% 5% PREM 10% & Rural Environment Infrastructure Development & Social 60% 24% 2% India Country Portfolio Performance Review FY03 Page2 6. Analysis by States Figure 5 (and Table A6) categorize each project according to the state (i.e. location) where the activities are actually being implemented. According to this classification, the largest state portfolios are in Uttar Pradesh (17% of total commitments), Andhra Pradesh (15%), Maharashtra (8%), Gujarat (7%), Tamil Nadu (7%) and Kamataka (7%). Five of the eight projects approved in FY03 were single state projects; the largest was UP State Roads ($488 million). Another way of looking at the portfolio is according to where the implementing agency is located i.e. either state or centrally implemented (Figure 6). As per this classification, central projects account for 33% of total commitments and the largest portfolio of single state projects are Andhra Pradesh (13% of total commitments), Uttar Pradesh (11 %), Maharashtra (7%), Gujarat (6%), Tamil Nadu (6%) and Kamataka (6%). Figure 5 : FY03 portfolio by location of activities Figure 6 : FY03 portfolio by location of Implementing Agency Andhra Andhra North East Central North East Central Pradesh 2% Uttar Uttar Pradesh 11% 17% Kamataka 6% 0 ther states Tamil Maharashtra Orissa 6% Tamil Nadu Gujarat Maharashtra Orissa 7% 11% Nadu 7% S% 7% 7% 8% 6% 6% C. QUALITY OF THE PORTFOLIO 7. After five years of sustained improvement in most quality indicators, several risk indicators in FY03 have returned to levels comparable to FYOO. India's portfolio performance for FY03 has declined as compared to FY02, with most indicators falling below FY03 targets (Figure 7). Overall portfolio risk remained at acceptable level, except for energy and infrastructure for which the risk indicator exceeds the Bank's sector average (see Annex 4). Figu:re 7: Status of Performance Indicators and! targets Indicator FY02 Actual FY03 Target FY03 Actual Problem Projects (3 of70) 4% < 10% (6 of70) 9% Projects at Risk (4 of70) 6% < 10% (8 of70) 11% Commitments at Risk 6% < 10% 9% Disbursement Ratio 20.0% 20% 17.7% ReaUsm (3 of4) 75% 80% (6 of8) 75% Pro activity (5 of6) 83% 100% (2 of3) 67% Net Disconnect 0% 0% (1 of9) 11% India Country Portfolio Performance Review FY03 Page3 8. Projects at Risk. Since the previous Country Assistance Strategy in FYO 1, portfolio performance has declined with projects at risk increasing from 8% in FYO 1 to 11.4% in FY03 (Table A3 and Figure 8), resulting in $1.1 billion in commitments at risk, an increase of about $355 million over FY02. At the end of FY03, there were eight projects at risk, compared with four in the previous year. Figure 8: Percentage of Projects at Risk in the Portfolio % 30 27.0 25 20 14.9 15 10 5 o+-~~~~~~~~~~~~~~~ FY98 FY99 FYOO FY01 FY02 FY03 9. Disbursements. After rising steadily since FY96, India's disbursement ratio declined marginally in FY02 (Figure 9), and has deteriorated further in FY03 to 17.7%. This is low compared to other large borrowers such as China (25.5%), Indonesia (22.1%) and Mexico (25.5%), and to the Bank's average of20.9%. The disbursement ratio is falling and the November 2003 ratio is lower than the ratio for the same last year, which was already much weaker than FY02. A disbursement shortfall of $348m in FY03, mostly from health (50%) and energy (26% ), was partially offset by a disbursement increase of $205 m from infrastructure (40%) and transport (35%); for details see Annex 5. Figure 9 : Trend in Disbursement Ratio % 25 20.9 20.0 20 15 10 5 0 FY98 FY99 FYOO FY01 FY02 FY03 10. At current implementation and disbursement rates, none of the ongoing projects can be completed within the standard 5-year implementation period (Figure 10). These rates suggest that 6 years will be required to complete projects in education, 7 years in transport, 8 years in health and infrastructure, and more than 8 years in rural development (see Annex 15). At these rates, the estimated disbursement ratio in FY04 for ongoing projects may at best be about 17%, and may fall to between 15-17%. Remedial actions (given in section E) must be taken immediately to reverse the declining trend and support the CAS strategy of scaling up Bank support to India. India Country Portfolio Performance Review FY03 Page4 Figure 10: Disbursement Trend for all the projects in FY03 portfolio I <> SASE! 0 SASES b. SASHD SASPR ~~ SASRD I 100 ~ 13 80 +-------------,{-------~A~~~~~~~----------~ f; !.;~ Ul Db. 3 :§ 60 ~ ~ 40 () l-; ~ 20 0 0 2 4Age (yrs) 6 8 10 Note : The red line represents a notional disbursement profile for a five year project. Slow disbursing projects will comprise: (i) projects having slow startup (below 3 years and less than 20% disbursement ratio); (ii) projects in mid- implementation period and stagnating at below 40% disbursement level; and (iii) project reaching end of implementation period and having a large undisbursed balance. 11. Outcomes. Outcomes as rated by the Operations Evaluation Department (OED), which had been improving from 50% satisfactory in FY95 to 88% in FY01 4 , have declined to 50% for two projects in FY03 (Figure 11 and Table A4). While it is not expected that all projects can have satisfactory outcomes, this is well below the target of 80% agreed to by the Bank and DBA for FY03. The decline in portfolio indicators is also reflected in the disconnect between the percentage of satisfactory project development outcomes reported in the last project supervision report and as reviewed by OED some time later. Figure 11 : Satisfactory Development Outcomes rated by OED and disconnect with last PSR liB OED 0 Disconnect % 100 100 80 60 40 20 0 FY98 FY99 FYOO FYOl FY02 FY03* *FY03: for two projects evaluated to date. 4 100% satisfactory outcome in FYOO was based on only 6 projects closing in that year compared to an average of about 10 to 12 projects in other years. India Country Portfolio Performance Review FY03 Page5 D. PORTFOLJ(O MANAGEMENT 12. Proactivity. There were eight projects at risk (six actual problem projects and two potential problem projects) in the portfolio at June 30, 2003. Proactivity in FY04 will be measured for the six actual problem projects, which are Orissa Power, Rajasthan District Primary Education I, Uttar Pradesh Power Sector Restructuring, Karnataka Watershed, Rajasthan District Poverty Initiatives, and Andhra Pradesh Emergency Cyclone. The proactive actions undertaken during FY03 are given in Annex 3 and actions planned for FY04 are given in Annex 2. Based on these actions, a target of 100% proactivity could be reached in FY04; however, for planning purposes, a lower target of 83% proactivity (equivalent to 5 out of the 6 projects) is proposed instead. As per Annex 2, two of the six actual problem projects at the start ofFY04 (Rajasthan DPEP and Rajasthan DPIP) are likely to continue in problem status till end FY04. 13. Realism. On June 30, 2003, only thirteen of the thirty-one projects identified as slow disbursing had a slow disbursements flag; of these, seven projects were more than five years old. The addition of a slow disbursement flag to the remaining 18 slow disbursing projects would result in two more projects (both in the health :sector) becoming at risk, and would lead to 10 projects at risk in the portfolio compared to eight at the end ofFY03. More generally, the large number of slow disbursing projects suggests that there may be some hidden unsatisfactory ratings that have to be brought forward at the time of the next supervision mission and Project Status Report (PSR). 14. Reasons for Slow Disbursements. Slow disbursements result from a weakening of project readiness for implementation, a weakening of supervision quality and oversight, a shift to a decentralized implementation structure for a dozen operations, and often a lack of decisive actions to re-allocate, restructure or cancel unused funds (especially IDA). Slow disbursements also suggest an inadequate mix of lending instruments in the current portfolio-the latter is skewed towards large infrastructure projects and multiplle innovative Community Driven Development (CDD) projects (India's net commitments are mostly investrnent lending as compared to about 50 per cent Bank-wide), and could benefit from increased sector/state-wide programmatic lending. Other generic implementation problems affecting disbursement perfonnance include slow project start-up, lack of procurement readiness, inadequate or high turnover of counterpart staff, weak institutional and implementation capacity, delays in flow of funds, and cost savings (resulting from poor cost estimates and higher IDA allocations than needed, which create a pressure for canceling IDA funds). Further details are available in Annexes 5, 9 and 15. 15. Delays in Fund Flow to the Implementing Agencies: Implementing agencies have reported instances where the funds have not reached them for 5 months after the Bank has released payments. This can be attributed to major delays at the state government level but there seems to be some occasional delays even at the level of the Controller of Aid Accounts and Audit (CAA&A). This has to be looked into and corrective actions initiated after discussing with the state governments. 16. Lack ofProject Readiness for Implementation. (Annex 8) A review of28 out of the 42 investment operations approved during FY00-03 (excluding emergency operations) indicates that projects in India take longer to process, and the lengthy preparation time is no guarantee for better quality or successful implementation and achievement of objectives. Specifically, average preparation time in India is about 22 months, with most projects being processed within 17 to 49 months, compared to the 12-month target, which is already met by close to half of the Bank's total investment operations. Cumulative disbursement during the first two years of project implementation was about 4% on average for both rural water and rural development, 5% for health, and as low as 2% for one project in education. Average preparation cost (excluding trust funds) is about $425,000. 17. Trust Funds There are several small grants and trust funds available to India, many of which are linked to the preparation of specific projects. Most of these programs are regional or global initiatives, with a variety of organizational and implementation arrangements. During FY03, India had 21 active grants for about $223 million. The annual grant disbursements declined to $18 million during FY03 compared to $24 India Country Portfolio Performance Review FY03 Page6 million in FY02 and $46 million in FYOl. India's grant utilization rate in FY03 was at about 50% of the approved amount, which improved compared to 43% in FY02. Details are provided in Annex 13. 18. The low utilization of trust funds in India is a matter of concern for both the Bank and DEA. For instance, in FY03, of the total Bank-wide Japanese Policy and Human Resources Development (PHRD) technical assistance grants of $65.5 million, India share was only $3.5 million, while in FY02 India did not access any funds at all from PHRD. The Bank will shortly share with DEA a fact sheet on some the larger trust funds that India could access, and ways to improve India's utilization of these trust funds will be jointly decided. E. PORTFOLIO ACTION PLAN FOR FY04 19. Improvements in Portfolio Performance. India's portfolio requires a major restructuring to address the issue of non-performing, slow disbursing projects and to re-align its path towards better achievement of development objectives. A major turnaround in portfolio performance is unlikely to occur in FY04 as most improvement actions will result in medium to long-term benefits with a marginal impact on FY04 indicators. These actions, which are described below, would involve a fundamental change to business processes and instruments, an improved integration of lessons learned from poor quality operations into the design and scale up of future operations, a strengthening of staff and management capacities, a push of the measurement frontier, and better monitoring and candid reporting of results. Efforts are also needed to strengthen the accountability of institutions (the Bank and clients) together with clearer incentives and wider, more informed, consultations to negotiate and align any divergent views. A clear and well directed communications strategy is also needed to address the public at large and important stakeholders of the development community. 20. Proposed Challenges for FY04. The estimated results for FY04, as described below, will bring India's portfolio performance first in line with the Bank's FY03 average, and if sustained, to levels comparable to the best performing countries (China, Indonesia and Mexico) for FY05 and thereafter: a. Lower the proportion of projects at risk to below 10% (maximum) and maintain the commitment at risk to below 10% (maximum) b. 80 % Realism (minimum) c. 80 % Proactivity (minimum) d. Disbursement Ratio of at least 17% for existing commitments and 2% for new commitments e. No overage projects (i.e. 8 years or more) 5 f. No backlog of audit reports 21. To achieve the above targets for FY04 minimum performance targets for each sector were set to levels equal to the Bank-wide FY03 average for that sector. Scorecards have been developed for each sector and are given in Annex 15. 22. Portfolio Improvement Actions proposed in FY04. The proposed improvement actions would involve a concerted effort from the central and state governments, line ministries, and the Bank. These actions will be reviewed and prioritized during a sectoral review with the line ministries and a joint CPPR review with DEA. The FY04 Portfolio Action Plan envisages that improvement in the India portfolio performance will require corrective actions on four fronts. High priority I impact actions are listed below and the detailed action plan Unless otherwise agreed, in the context of an extension of the project closing date. India Country Portfolio Performance Review FY03 Page 7 for FY04 is given in Annex 12. (i) At the Central I Bank Level, closer monitoring by both is required through: a. Joint preparing the annual CPPR to address systemic portfolio issues (such as flow offunds, audits, and procurement) and conducting semi-annual reviews to monitor progress in meeting the CPPR targets; the first semi-annual review to be held in April2004. b. Changing the preparation cycle of the CPPR to give sufficient time to implement action plans; it is proposed to start preparation of the FY04 CPPR in May 2004 and deliver it in July 2004. c. Continuing regular consultations, sharing portfolio performance ratings and "exceptions and outliers" reports on a monthly basis, and rigorous use of sector/ project performance indicators. d. Jointly reviewing projects at risk on a quarterly basis; if a project remains in risk status for more than one quarter, invite project authorities to the semi-annual portfolio review meeting. e. In addition to the regular six-monthly supervision missions, desk reviews to be carried out in the intervening quarter for all extended projects. f. Processing requests for closing date extensions in FY04 only after sector portfolio performance reviews have been completed and action plans for restructuring, reallocation and I or cancellation agreed upon. g. Strengthening in-country capacity (at DEA, line ministries and/or major borrowing states, as applicable) by initiating actions towards: (i) exchange views and best practices in a portfolio management function, performance monitoring and reporting; (ii) organizing workshops on operational, legal, and disbursement aspects; (iii) working with DEA's Project Management Unit and using DEA's own systems to monitor and evaluate results (possibly for all externally-funded projects) to help in reporting project outcomes and supporting request for future funding; and (iv) establishing mechanisms for knowledge sharing such as a website and I or help desks for line ministries, states, and project teams/ entities. Progress on these actions to be assessed during the semi-annual review in April 2004. h. Reviewing and analyzing the outcomes of active and recently closed projects (starting with projects in the Health and Rural Development), in view of developing a well-structured and targeted communications regarding the effectiveness of the Bank's assistance to India's development. (ii) At State Level: Following up the CPPR with annual multi-sectoral portfolio reviews for selected large borrowing states, including projects under implementation and preparation, by March 2004. (iii) At the Line Ministries/Sector/Project level: a. Bringing peer reviewers from within and outside the Bank to enhance supervision quality. b. Conducting quarterly informal reviews to develop supervision strategies for complex I risky projects. c. Conducting Sector Portfolio Performance Reviews (SPPR) for poorly disbursing projects, some of which are rated as problem or at risk, and which will close in FY04 with a large undisbursed balance; and implementing SPPR-recommended actions plans for restructuring, cancellation and re-allocation of unused funds. India Country Porifolio Peiformance Review FY03 Page8 - Rural Development: December 4-5, 2003 - Education: December 8, 2003 - Health: December 9, 2003 - PREM: January 2004 - Transport: February 2004 d. Updating procurement, commitment and disbursement schedules by March 2004 for all sectors, in particular Education, Health, Energy, Infrastructure, Transport and Rural Development. (iv) New projects will be more rigorously filtered for implementation readiness (including avoiding overly ambitious development objectives; up-front mobilization of project stakeholders; up-front institutional and capacity building actions that are critical for implementation; procurement readiness; simpler project designs in the context of weak implementation capacity; and if applicable, mandating piloting during preparation). India Country Portfolio Performance Review FY03 Page9 Statistical Appendix Table Al. Size of Portfolio (as of June 30, $million) FY No. of IDA IBRD Other* Total New Total Disbursements projects Commitments Commitments undisbursed inFY inFY balance FY96 77 7,285 6,858 0 14,143 2,078 8,955 1,309 FY97 77 7,354 6,114 0 13,469 1,530 9,064 1,563 FY98 74 7,556 5,724 0 13,280 2,141 7,923 1,374 FY99 70 7,163 5,103 0 12,266 1,055 8,291 1,437 FYOO 77 7,273 5,802 so 13,125 1,887 7,934 1,698 FY01 76 7,026 6,279 153 13,458 2,555 7,341 1,644 FY02 69 7,088 5,744 153 12,985 2,190 7,672 2,088 FY03 70 6,073 6,781 153 13,007 1,523 8,097 1,466 *Global Environment Facility, Montreal Protocol Treaty (Data is as of end-June. Disbursement ratio given in Table A3 is calculated as a ratio of amount disbursed in the year over the amount undisbursed at the beginning of that year). Table A2. Age profile of FY03 Portfolio, as of June 30, 2003 Number of Net Commitment Percent Year projects ($m) disbursed FY95 4 520 73.8% FY96 5 1,188 77.7% FY97 9 1,384 68.9% FY98 8 1,490 54.7% FY99 7 1,035 57.3% FYOO 11 1,635 32.5% FYOl 11 2,405 20.6% FY02 8 1,840 10.3% FY03 7 1,511 1.6% Total 70 13,007 37.7% India Country Portfolio Peiformance Review FY03 Page 10 Table A3. Projects at Risk and Disbursement Ratio FY96 FY97 FY98 FY99 FYOO FY01 FY02 FY03 Problem Projects (number) 16 9 9 5 10 6 3 6 Projects at Risk (number) 16 12 11 8 20 6 4 8 Commitments at risk as a % of total Portfolio 18.0% 14.7% 10.1% 15.4% 29.1% 8.0% 6.2% 8.6% Projects at Risk as a % of total Portfolio 20.8% 15.6% 14.9% 11.4% 27.0% 8.0% 5.8% 11.4% Disbursement ratio 13.9% 16.4% 16.4% 16.1% 17.9% 20.9% 20.0% 17.7% Note : Problem Projects have the Development Objective and/or the Implementation Progress rated as Unsatisfactory. Projects at risk include these plus other projects with three or more risk flags. Disbursement Ratio is the ratio of disbursements during the fiscal year to the undisbursed balance at the beginning of the fiscal year, excluding structural adjust1nent loans. Table A4. Satisfactory Development Outcomes rated by OED and in the last PSR FY95 FY96 FY97 FY98 FY99 FYOO FY01 FY02 FY03* No. ofprojects evaluated 12 12 10 14 11 6 13 16 2 Last PSR (% projects) 75% 83% 70% 9%3 91% 100% 85% 100% 100% OED (%projects) 50% 67% 60% 64% 73% 100% 77% 88% 50% Disconnect (%) 25% 17% 10% 29% 18% 0 8% 13% 50% *evaluated to date Table AS. Composition of Portfolio by Sector in FY03 (Commitments net of cancellations as of June 30, 2003, $ million) Sector No. of IDA IBRD Other* Total Percent of Projects total Energy & Infrastructure 23 720 5,676 0 6,396 49% Rural Development 22 2,286 742 18 3,046 23% Human Development 18 2,718 0 0 2,718 21% PREM 2 287 301 0 588 5% Environment & Social 4 62 0 135 197 2% Other 1 0 62 0 62 0% TOTAL 70 6,073 6,781 153 13,007 100% *Other: GEF and Montreal Protocol (MPT) projects India Country Portfolio Performance Review FY03 Page 11 Table A6. Composition of the Portfolio by State (by location of activity) (Percent of total net commitments as of June 30) State 1997 1998 1999 2000 2001 2002 2003 1 Andhra Pradesh 10.7 14.3 17.2 16.8 15.3 14.4 15.1 2 Assam 1.9 1.9 2.1 1.8 1.8 1.5 1.1 3 Bihar 2.7 4.2 4.3 4.9 5.9 4.4 3.9 4 Chhattisgarh -na- -na- -na- -na- -na- 0.2 1.0 5 Gujarat 2.7 1.1 0.9 0.9 4.1 7.7 7.4 6 I-Iaryan a 4.0 4.5 4.9 4.3 3.2 1.2 0.3 7 J=-rimachal Pradesh 3.6 3.9 4.3 3.8 3.1 0.7 0.5 8 Jharkhand -na- -na- -na- -na- -na- 1.7 1.6 9 Karnataka 3.2 3.2 3.3 3.2 6.8 7.6 6.8 10 Kerala 1.5 2.3 2.2 2.1 1.8 3.9 3.5 11 Madhya Pradesh 4.6 5.9 5.8 4.9 3.6 3.2 1.8 12 Maharashtra 13.6 9.9 7.2 5.9 5.2 9.5 8.3 13 l'vfizoram 0.1 0.1 0 0 0.1 0.5 0.5 14 Orissa 7.2 8.8 9.1 8.3 7.5 7.1 5.9 15 Punjab 3.2 3.4 2.5 2.1 1.5 1.6 1.3 16 Rajasthan 3.2 3.2 3.8 4.1 4.5 5.4 5.3 17 TamiJNadu 7.5 5.6 6.0 5.4 5.1 4.8 7.0 18 Uttar Pradesh 4.3 6.6 8.7 13.8 14.0 14.1 16.9 19 U ttaranchal -na- -na- -na- -na- -na- 1.2 1.0 20 \'Vest Bengal 2.4 2.1 2.4 2.1 2.4 2.4 2.1 21 Other States 3.4 3.6 3.7 3.1 2.9 2.3 2.3 Subtotal: States 79.8 84.6 88.4 87.5 88.9 95.2 93.6 :Private Sector 11.9 9.5 7.9 8.3 7.0 2.6 2.0 Government of India 8.3 5.9 3.7 4.2 4.1 2.2 4.4 Total 100 100 100 100 100 100 100 India Country Portfolio Pelformance Review FY03 Page 12 Table A 7. Projects Approved in FY03 Net Commitment ($ m) SMU Project N arne Board Closing IDA IBRD Total Approval Date 1 SASEI Tamil N adu Roads 17~Jun~03 31~Mar~09 0 348 348 2 SASE I Uttar Pradesh Roads 19-Dec-02 31-Dec-08 0 488 488 3 SASHD Food & Drug Capacity 5-Jun-03 30-Jun-08 54 0 54 4 SASHD Reproductive & Child Health 5-Sep-02 12 0 12 (Supplemental Credit) 5 SASHD Tech/Engg Quality Improvement 14-Nov-02 30-Jun-08 250 0 250 6 SASRD AP Comm. Forest Management 16-Jul-02 31-Mar-08 108 0 108 7 SASRD AP Rural Poverty Reduction 20-Feb-03 30-Sep-08 150 0 150 8 SASRD Chhattisgarh District Rural Poverty 24-Apr-03 31-Mar-09 113 0 113 Total 687 836 1,523 Table A8. Projects Extended in FY03 Project N arne DO IP Approval Original Closing Revised No. of Date Date Closing Date Extensions 1 AP Emergency Cyclone u s 6-May-97 31-Jul-00 31~ul-03 3 2 AP Irrigation III s s 20-May-97 31-Jan-03 31-Jul-04 1 3 AP State Highways s s 17-Jun-97 31-Jan-03 31-Jan-04 1 4 Bombay Sewage Disposal s s 6-Jul-95 31-Dec-02 31-Dec-03 1 5 Ecodevelopmen t s s 5-Sep-96 30-Jun-03 30~un-04 2 6 Env Capacity Bldg T A s s 23-Dec-96 30-Jun-03 30-Jun-04 1 7 Hydrology Project s s 22-Aug-95 31-Mar-02 31-Dec-03 2 8 Kerala Forestry s s 24-Mar-98 31-Dec-02 31-Dec-03 1 9 Malaria Control s s 12-Jun-97 31-Mar-03 31-Mar-04 1 10 Orissa Power Sector u s 14-May-96 31-Dec-02 31~an-04 1 11 Orissa Water Resources s s 19-Dec-95 30-Sep-02 31-Mar-04 1 12 Reproductive Health 1 s s 5/28/1997 31~Mar-03 31-Mar-04 1 13 Tamil Nadu Water Resources s s 20-Jun-95 31-Mar-02 31-Mar-04 2 Six projects amounting to $1.3 billion closed in FY03 (Table A9). On average, at closing these projects had disbursed 93% of their net commitments. However, of their original commitments, these projects only disbursed 84%, resulting in an unutilized amount of $226 million. Five of these projects have had an extension during their life. India Country Portfolio Performance Review FY03 Page 13 Table A9. Projects Closed in FY03 Project Approval Original Revised Original Total %disbursed of Date Closing Closing Commitment Cancell commitment Date Date ($m) ($m) Original Net 1 National Highways II 12-May-92 30-Jun-01 31-Dec-02 306 24 96% 104% 2 ICDS II 9-Mar-93 30-Sep-00 30-Sep-02 194 0 97% 97% 3 Industrial Pollution 26-Jul-94 31-Mar-02 30-Nov-02 168 86 48% 98% 4 DPEP 22-Nov-94 31-Mar-02 30-Jun-03 260 0 84% 84% 5 UP/ U tt Rural Water 25-Jun-96 31-May-02 31-May-03 60 19 68% 99% 6 DPEP II 9-Jun-96 30-Jun-03 30-Jun-03 425 0 87% 87% TOTAL 1,413 129 84% 93% Table AlO. Cancellations in FY03 (including cancellations at closing) l?roject N arne Original Net Commitments Cancellations ($m) %total Commitment ($m) ($m) cancelled IDA IBRD Total In FY03 Total 1 Ecodevelopment 28 0 22 2 6 21% 2 Orissa Power 0 350 255 35 95 27% 3 Malaria 165 0 118 47 47 28% 4 AP Irrigation III 150 175 280 45 45 14% 5 Rural Women 20 0 13 7 7 34% 6 APPowerAPL 0 210 190 20 20 10% 7 Bombay Sewage 25 167 170 12 22 11% 8 National Highways II 153 153 283 21 24 8% 9 Industrial Pollution 143 25 82 18 86 51% 10 UP & Utt Rural Water 0 60 41 12 19 32% TOTAL 683 1140 1453 219 370 20% Table All: Forecast Disbursement Ratios as of June 30, $ billion FY NetComm. at NewComm. Undisbursed at Projected Projected Dish beginning of FY inFY beginning of FY Dish. in FY Ratio for FY (%) FY04 13 2.3 8.1 1.5 19% FYOS 11 2.9 7.7 1.5 19% FY06 12 2.2 8.7 1.8 21% India Country Portfolio Performance Review FY03 Page 14 Annex 1. Status of agreed actions in FY02 CPPR Issue and its effect on Action Plan Status as of June 30, 2003 project performance Portfolio Quality to be DBA and Bank to work together to ensure that in FY03 projects Projects at risk are 11% of total portfolio and disbursement sustained and improved at risk are less than 10% of total portfolio, and the disbursement ratio are 17.7%. ratio is above 20% Low disbursements in Clean up existing projects by timely resttucturing and I or Not much progress.' 14 projects were restructured and $219 some projects, especially cancellation of amounts that are clearly not going to be utilized million cancelled during the year. in early years and slow disbursing projects Thoroughly review readiness of new projects and spend more Some progress, but implementation readiness filter has to be time and money on up front preparation more rigorously applied. Hold joint Bank- DBA review of slow disbursing projects and Information was shared with DEA in February 2003, and projects more than 6 years old. informally discussed. No formal meeting was held. Flow of funds Further discussion on streamlining special account advances from A discussion paper on alternative methods of funds flow was Project implementation is Goi to the states. shared with DEA and in a few projects (Kerala State slowed down and funds Transport, Rajasthan Water Sector Restructuring) special often end up unused. account advances in equivalent INR were made available to the implementing agencies through banking channels mirroring a second generation special account. ! I The project's I accountability for funds Utilize PMRs to assist better monitoring of transfer of funds from No PMR based disbursements were initiated, although every flow and management of the state government to the project. project negotiated provides for shifting to this method of resources is diminished. disbursement at a later date, subject to agreement of DEA/State and the Bank. This is primarily because the current mechanism of fund flows does not provide any special benefits of having a requirement based size of the Special Account. Coordination between Bank and CAA&A, including monthly Regular meetings were held with CAA&A to discuss & meetings, use ofCAA&A's new disbursement monitoring resolve disbursement and audit issues related to the portfolio. systems and CAA&A to generate exception report for claims that Although CAA&A agreed to provide exception report, none are submitted late. were received India Country Portfolio Performance Review FY03 Page 15 Issue and its effect on Action Plan Status as of June 30, 2003 . project performance Audit Reports Delay in the receipt of Coordination with C&AG, DEA and CAA&A for a generic terms Specific TORs for (i) external audit (including opinion on audit reports led to of reference for the audit of new projects and work towards financial statements) were agreed with C&AG for a few suspension of generic ToRs for all projects, including government audited projects and (ii) internal audit was agreed with CGA in one disbursements against annual financial statements. project. With the new audit policy coming in effect from July Statements of 1, 2003, the Bank is organizing a workshop with the DEA, Expenditures in 5 projects C&AG, CAA&A and CGA to discuss and agree on the way in FY02. forward to roll out the new audit policy. Ineligible expenditures Normal Bank practice is to request refunds in cases of large A refund ofRs 153 crores was sought from the DEA in respect identified in audit reports umesolved audit disallowances. It was agreed to arrange a of audit disallowances for closed projects (upto 1999), which led to audit disallowances meeting ofDEA, CAA&A, C&AG and the Bank to review is under discussion with the DEA. DEA is open to a that resulted in subsequent current cases and discuss remedial actions. discussion to find a better mechanism for settlement and recovery by the Bank. recovery of audit disallowances by the Bank than the present system of adjustment against subsequent claims. Format and content of Accounts to be prepared on time by the implementing agency, As part of the implementation of the new reporting and audit annual financial statements which could hire someone to assist them. policy the Bank will look at the format of accounts and audit I audit reports do not reports together with CGA and C&AG. In the Elementary provide sufficient comfort Education project currently under preparation, The Bank has on use of project funds or proposed updating the format of utilization certificates to adequacy of financial provide information more suitable for good financial management. management of the program. Financial Management Develop working financial management systems in implementing As a part of project preparation, task teams including Financial Delays in claiming. agencies. Management Specialists have been working with clients to reimbursements for project develop adequate financial management systems before loan/ expenditure leads to under- credit negotiations. utilization of amount, especially under centrally Initiate dialogue at State level to ensure that project codes As part of new project preparation in some states, budget sponsored projects. provided in the state budget are in line with information needs of codes are now adapted to meet the information requirements the projects of the projects. State Financial Accountability Assessments are being undertaken Completed in all three states as well as Orissa. As part of in Karnataka, Andhra Pradesh and Uttar Pradesh. SFAA follow-up, budget codes (schemes) are being simplified in Karnataka. India Country Portfolio Performance Review FY03 Page 16 Issue and its effect on Action Plan Status as of June 30, 2003 _I!roject performance Training in Bank Review projects to ensure development objectives are being fully Discussed, but no action in FY03. projects met. Consider restructuring or reduction of scope where reduced Goi limiting approval for training opportunities impact project outcomes. Consider foreign training already increased visits of international experts to India as a possible identified in projects. In alternative. some cases, this diminishes planned outcomes. Training in fiduciary and Bank to continue holding state level workshops for project staff The Bank and CAA&A conducted state level Financial safeguard procedures on audits, disbursements, procurement, financial management, Management and Disbursement workshops in Andhra Pradesh, Limited capacity of environment and social safeguards etc. Gujarat, Orissa, Uttar Pradesh and Karnataka, focusing mainly implementing agencies for on audit and disbursement related issues. A similar workshop dealing with Bank for the District Primary Education projects I & II was held for business procedures field officers in April2003 to acquaint them with Bank procedures. Bank to assist in developing training capacity in India. For With the assistance of the Administrative Staff College of example, establishing FM training facilities for project staff (one India (ASCI), Hyderabad, and National Institute for Financial pilot batch to be done this year) at the National Institute of Management (NIFM), Faridabad, two pilot workshop relating Financial Management (NIFM) and the Administrative Staff to financial management and disbursement were conducted in College of India (ASCI). January and February 2003 respectively. Monitoring indicators not Review performance indicators and targets to ensure that project Not much progress. always used effectively reporting is strongly linked to effective use of monitoring indicators. Trust funds not always Medium term planning so that India can make greater use of No progress in FY03 utilized to their full Trust Funds. potential Minimize delays in clearance of TF proposals and increase Discussed with DEA, but further action required. utilization of approved TFs. Greater monitoring by Bank; sharing quarterly disbursement Monitoring has increased, and reports are periodically shared reports with Goi withDEA. India Country Portfolio Performance Review FY03 Page 17 Issue and its effect on Action Plan Status as of June 30, 2003 pro_ject performance Procurement efficiency, Follov; up the recorr.u~endations of the Country Procurement The combined executive summarj report of the transparency and Assessment Review (CPAR) at the central level and with recommendations of the CP AR has been submitted to Go I in economy interested states, and respond to other states interested in June 2003. procurement assessments. 1) Phase I: Central Government and its agencies. Report submitted to Gol in February 2001. Gol has undertaken a policy review of its procurement nonns. The recommendations of the Bank form one of the reference points for Gol's Task Force formed to review the procurement norms. 2) Phase II: Three representative states. Reports were submitted to Government in October 2001. a) Karnataka : Recommendations have been accepted by and large, and are under implementation. b) Tamil Nadu: Has agreed with the recommendations by and large, and financial assistance has been agreed for implementation under the TA for Economic Reforms Project. c) Uttar Pradesh: The recommendations were forwarded to the Government of Uttar Pradesh in 2001; no progress has been reported so far. d) Maharashtra: requested for a separate study, which was recently completed and recommendations have been forwarded to Government of Maharashtra in early 2003. e) Implementation of CP AR recommendations is being pursued in Andhra Pradesh, Orissa and Punjab. 3) Phase III: covers the 250 Public Sector Enterprises under the Central Government; report submitted to Gol in August 20Q2. I India Country Portfolio Performance Review FY03 Page 18 Annex 2: Proposed proactive actions for Problem Projects at the start ofFY04 (July 1, 2003) Project Action Plan Status: Likely status: Sept 2003 June 30, 2004 1 Orissa Power (Disb: 79%; 7.3 yrs) (i) Suspension if interest deduction from Bank funds Problem Closed Development Objective: U; Implementation meant for investments is not remedied; (ii) Preparation Progress: S of a satisfactory sector business plan with commitment Flags : Safeguards, Financial Performance, from all stakeholders. Financial Management 2 Rajasthan Distt Primary Education I A mission in October to discuss cancellation of about Problem Partial (Disb: 41%; 4.2 yrs) $20-25 million, and/or restructuring likely in January Cancellation/ Development Objective: U Implementation 2004 to coincide with SSA. GOI/GOR may ask for Upgrade Progress: U extension - team not likely to recommend this. Or Flags: Slow Disbursement Restructure 3 UP Power (Disb: 70%; 3.4 yrs) The financial restructuring plan that was recently Upgraded Upgraded Development Objective: U Implementation approved is being implemented under close monitoring. Progress: S The DO rating has been upgraded to satisfactory after the Flags: Safeguards, Financial Performance lifting of suspension on August 18. 4 Karnataka Watershed The implementation schedule has been revised at the Problem Upgraded (Disb: 3.7%; 2.2 yrs) request of the borrower, and implementation appears to Development Objective: S Implementation be improving. The next supervision mission in November Progress: U will review the ratings. Upgrading likely by June 2004. Fla~s : Management Problem 5 Rajasthan District Poverty Initiatives Following the mid term review in July 2003, the action Problem Restructured (Disb: 9%; 3.4 yrs) plan agreed earlier has been revised to include a series of Development Objective: U Implementation benchmarks to be achieved by December 31, 2003. A Progress: U workshop in November will review progress and agree Flags : Management Problems, Slow on government proposals to improve project focus, Disbursement performance and disbursements. 6. Andhra Pradesh Emergency Cyclone Closed Closed Closed Development Objective: U Implementation Progress: U Flags : Safeguards, Management Problem, Critical Risk Proactive actions: upgraded, restructured, closed, suspended, or partially canceled (20% or more of the original amount) India Country Portfolio Performance Review FY03 Page 19 Annex 3. Status of actions taken on Problem Projects at start of FY03 (June 30, 2002) Name ofPro.iect and Status as on June 30,2002 Status as on June 30, 2003 1 Orissa Power ($290 m) Continues to be a problem project. (i) Suspension Problem Project for 14 months. likely if interest deduction from Bank funds meant Development Objective: Unsatisfactory for investments is not remedied; (ii) Preparation of Implementation Progress: Unsatisfactory a satisfactory sector business plan with commitment Flags : 1 (Slow Disbursement) from all stakeholders awaited. Scheduled to close in January 2004. 2 Malaria Control Project ($164.8 m) Upgraded. Problem Project for 14 months. Development Objective: Unsatisfactory Implementation Progress: Unsatisfactory Flags: 6 (Financial Performance, Safeguards, Monitoring & Evaluation, Management, Slow Disbursements, Procurement) 3 UI' Sodic Reclamation II ($194.1 m) Upgraded. Problem Project for 2 months. Development Objective: Satisfactory; Implementation Progress: Unsatisfactory Flags: 1 (Management Problems) 4 Di:strict Primary Education Project III (Bihar Not at risk. and Jharkhand) ($152m) Project at risk. Development Objective: Satisfactory; Implementation Progress: Satisfactory Flags: 3 (Legal covenants, Management Problems, Slow Disbursements). India Country Portfolio Performance Review FY03 Page 20 Annex 4: Bank-wide Regional and Sectoral Portfolio Performance Indicators (as of June 30) Net Commit. Portfolio Size Portfolio Size Proj. at Risk at Risk Realism Proactivity Disb ratio Proj No. US$B (%) (%) (%) (%) (%) Region FY02 FY03 FY02 FY03 Jul '02 Jul '03 Jul '02 Jul '03 Jul '02 Jul '03 Jul '02 Jul '03 FY02 FY03 BANK 1,542 1,512 102 97 19 15 17 15 59 77 84 88 21 21 AFR 367 353 15 16 25 18 27 19 62 71 78 86 20 21 EAP 267 251 26 23 13 10 9 4 66 80 95 87 22 23 ECA 314 318 16 15 19 8 21 9 52 79 83 94 20 20 LCR 320 313 22 20 17 23 22 30 51 81 86 89 19 21 MNA 137 127 5 5 23 17 24 17 61 77 81 84 14 18 SAR 136 149 17 18 10 16 9 14 79 75 93 91 23 20 SECTOR-WISE INDICATORS FOR INDIA Environment 4 3 0.3 0.2 0 0 0 0 na na 100 na 33 14 Social Development 1 1 0.02 0.01 0 0 0 0 na na na na 38 11 Total India ES 5 4 0.3 0.2 0 0 0 0 na na 100 na 34 24 !Bank-wide Env 150 144 5 5 17 10 24 11 80 93 71 80 21 28 Education 7 6 1.2 0.8 14 17 12 11 0 100 100 100 22 29 HNP 12 12 2.1 1.9 8 8 8 8 100 0 100 100 27 21 Total India HD 19 18 3.3 2.7 11 11 10 8 50 50 100 100 25 23 Bank-wide HD 400 402 23 23 21 17 19 20 45 71 89 86 23 27 Energy 6 6 1.4 1.4 17 50 21 44 100 67 0 0 22 22 Infrastructure 5 7 0.9 1.2 0 20 0 11 na 100 100 na 27 18 Transport 9 10 3.4 3.9 0 0 0 0 na na na na 11 11 Total India EI 20 23 5.7 6.4 5 20 5 11 100 75 50 0 16 15 !Bank-wide EI 448 432 41 39 17 15 14 12 67 77 88 88 20 21 Total India RD 22 22 2.9 3.0 5 9 7 7 100 100 na 100 19 20 !Bank-wide RD 220 218 15 15 15 11 13 12 65 92 84 100 22 21 Total India PREM 2 2 0.6 0.6 0 0 0 0 na na na na 24 19 !Bank-wide PREM 156 150 9 7 24 22 35 23 57 70 85 86 na na India Others 1 1 0.1 0.1 0 0 0 0 na na na na 17 2 India (total) 69 70 13 13 6 11 6 9 75 75 83 67 20 18 India Country Portfolio Performance Review FY03 Page 21 Annex 5. Sector-wise analysis of India portfolio disbursement trends in FY02 and FY03 FY02 FY03 Variance in Disbursements Sector No. of Opening Disb in Cancel Share in Disb Share in No. of Opening Disb in Cancel Share Disb Share of Increase Decrease Increase Decrease projects Undisb. FY inFY total Ratio total disb projects Undisb. FY in FY in total Ratio sector in inFY03 inFY03 inFY03 inFY03 ($m) ($m) ($m) cancell inFY ($m) ($m) ($m) cancell total disb over over as as inFY inFY inFY FY02 FY02 percent percent ($m) ($m) of total of total ToWindiaHD 23 2166 548 0 0% 25% 34% 21 1652 388 47 21% 23% 26% Education 7 672 150 0 0% 22% 9% 8 547 157 0 0% 29% 11% 6 3% Health 16 1494 397 0 0% 27% 25% 13 1104 231 47 21% 21% 16% -166 48% Total India El 27 3636 580 ll2 73% 16% 36% 25 4439 646 100 46% 15% 44~11 Energy 8 1289 288 60 39% 22% 18% 6 902 199 55 25% 22% 14% -89 26% Infrastructure 8 274 73 10 7% 27% 5% 8 855 156 24 11% 18% 11% 82 40% Transport 11 2073 219 42 27% 11% 14% 11 2682 291 21 9% 11% 20% 72 35% Total India Rural 23 1555 299 38 25~'0 19~'0 19% 23 1687 343 47 22% 20% 23% 44 22% Tollal India PREM: 2 376 92 0 0% 24% 6% 2 291 54 0 0% 19% 4% -37 H% Tollal India ES 6 226 78 3 2o/o 34% 5% 5 138 33 25 H% 24% 2% Environment 4 185 62 3 2% 33% 4% 4 123 32 18 8% 26% 2% -30 9% Social 2 40 15 0 0% 38% 1% 1 15 2 7 3% 11% 0% -14 4% Total India Other 3 74 12 0 01!-il 17% 1% l 58 l 0 0% 2% 0% -H 3% ToW India 84 8033 1609 153 lOOo/o 20% 100% 77 8265 1466 218 100% 18% 100% 205 -348 100% HJO% Note: Includes all active projects, including those approved and closed during the year. India Country Portfolio Performance Review FY03 Page22 Annex 6. Annual Trends in Commitments and Disbursements, FY95-03 IBRD IDA Total New Commitments ($ million) FY95 1,119 945 2,064 FY96 777 1,301 2,078 FY97 627 903 1,530 FY98 1,068 1,074 2,142 FY99 400 655 1,055 FYOO 934 866 1,800 FY01 2,035 520 2,555 FY02 893 1,297 2,190 FY03 836 687 1,523 TOTAL FY95 TO FY03 8,689 8,248 16,937 Disbursements($ million) FY95 793 990 1,783 FY96 567 742 1,309 FY97 671 892 1,563 FY98 574 800 1,374 FY99 537 900 1,437 FYOO 749 949 1,698 FY01 613 1,031 1,644 FY02 870 1,218 2,088 FY03 743 595 1,348 TOTAL FY95 TO FY03 6,117 8,117 14,244 Repayments ($ million) IBRD IDA Total Interest Total Principal & Fees FY95 862 201 1,063 FY96 920 229 1,149 884 2,033 FY97 833 237 1,070 790 1,860 FY98 893 254 1,147 706 1,855 FY99 856 301 1,157 671 1,828 FYOO 1,165 336 1,501 646 2,147 FY01 724 385 1,109 539 1,648 FY02 1,040 427 1,467 504 1,971 FY03 2,713* 483 3,196 469 3,665 Total FY95 to FY03 10,006 2,853 12,859 5,209 17,007 *Pre payment made by GOI - IBRD Currency Pool loans India Country Portfolio Performance Review FY03 Page 23 Annex 7. FY04 action plan for slow disbursing projects (Based on feedback received from Task Teams in September 2003) Sector Project Name Board Closing Age Net Total Total % Proposed Actions Approval Date (yrs) Comm Undisb. Dis b. Disb ($m) ($m) ($m) 1 CITPO Telecom Sector Refonn TA 6/6/2000 12/31/2004 3.1 62 56.4 5.6 9 Cancellation of $5 M and fonnal revision of disbursement profile and possible extension. 2 SASEI National Highways III 6/8/2000 6/30/2006 3.1 516 398.4 117.6 22.8 Nov 2003: cancellation (30M)/ fonnal revision of disbursement profile, subject to agreement with Go I 3 SASEI Gujarat Highways 9/5/2000 12/31/2005 2.8 381 295.4 85.6 22.5 Dec 2003: all remaining civil works contracts should be awarded and their implementation should start. Cancellation to be detennined shortly. 4 SASEI Renewable Energy II 6/27/2000 3/31/2006 3 130 112.7 18.4 14.1 (i) October 2003: mission will review progress of obtaining land clearances in hilly states, (ii) March 2004: mission will comprehensively review the success of the nascent energy efficiency lending initiative and assess chances of success, otherwise recommend action as required. 5 SASEI Kerala Rural Water 11/7/2000 12/31/2006 2.6 65.5 62.6 7.1 10.9 MTR in end-September: (i) Increase in sizes of schemes to improve expenditures; (ii) Janumy 2004: restructuring 1 1 including partial cancellation, and increasing physical targets by about 20%. 6 SASEI Kamataka Highways 5/24/2001 12/31/2006 2.1 360 319.4 40.6 11.3 MTR in Jan/Feb 2004: (i) Likely reallocation to works due to cost increases, (ii) limited restructuring to drop some maintenance and remaining small upgrading works. This is to keep project within loan size and ensure GOK is able to provide adequate maintenance funding. 7 SASE I Grand Trunk Road 6/21/2001 12/31/2006 2 589 505.5 83.5 14.2 Cancellation (of 30M) subject to agreement with GoI, after Improvement MTR mission in November 2003 8 SASES Environment Capacity 12/23/1996 6/30/2004 6.5 49.1 8.3 36.1 73.6 October 2003: next supervision mission will decide upon BuildingTA final Action Plan and cancellations ($3 M?). 9 SASES Rural Women's Development 3/27/1997 6/30/2004 6.3 12.8 6.5 5 39.3 Cancellation of $4 M likely by December 2003. 10 SASHD Tuberculosis Control 1130/1997 9/30/2004 6.4 142.4 78.1 56.5 39.7 May 2004: cancellation of $12 M likely; disbursement profile to be revised thereafter. 11 SASHD Orissa Health Sys 6/29/1998 3/31/2004 5 76.4 58.5 20 26.2 Extension requested 12 SASHD Malaria Control 6/12/1997 3/3112004 6.1 118.3 56 60.9 51.5 Nov-Dec, 2003 mission to assess the progress, finalize future direction of project, and need for extension. 13 SASHD Reproductive Health 5/28/1997 3/31/2004 6.1 260.3 79.7 172.8 66.4 Extension requested 14 SASHD State Health Systems II 3/21/1996 2/29/2004 7.3 350 40.3 273.3 78.1 Project expected to fully disburse. India Country Portfolio Performance Review FY03 Page 24 Sector Project Name Board Closing Age Net Total Total % Proposed Actions Approval Date (yrs) Comm Undisb. Dis b. Disb ($m) ($m) ($m) 15 SASHD Women & Child Development 6/29/1998 9/30/2004 5 300 170.4 131.6 43.9 (i) Complete restructuring- September 30, 2003; (ii) Extension/Partial cancellation ($27 M)- March 31, 2004 16 SASHD Dist Primary Education III 12/4/1997 9/30/2003 5.6 152 110.1 44.2 29.1 Project extended; $10M expected to be cancelled. (Bihar and Jharkhand) 17 SASHD Rajasthan District Primary 6/8/1999 12/31/2004 4.1 85.7 50.7 35.2 41.1 Cancellation (of about $20-25 million) to be discussed with Education I DEA and restructuring likely in in January 2004 to coincide with SSA. It is likely the GOI/GOR will ask for an extension - team not likely to recommend this. 18 SASHD 2nd National HIV/AIDS 6115/1999 7/31/2004 4 191 89.2 100.2 52.4 $40 million likely to be undisbursed at project closing. The Control PMU is preparing utilization of funds plan for the remainder of the project. This plan, and efforts made to address issues raised in the MTR mission, will be reviewed during the next mission (before end of calendar year) and will decide on project extension. 19 SASHD Maharashtra Health Systems 12/8/1998 3/31/2005 4.6 134 99.7 35.5 26.5 I. Detailed implementation plan along with details of all procurement actions and project interventions developed for use both by the Bank and the project team. 2. Secretary, Public Health, GOM is conducting detailed f01inightly review with project team and the Department of Public Health as of June 2003. 3. $17 M cancelled. 20 SASHD UP Health Systems 4/25/2000 12/31/2005 3.2 110 99.5 14.9 13.5 Oct 2003: MTR (i) expansion of the scope (new locations Development and /or new components/ duration) in both states based on lessons learnt, (ii) reallocation across categories to accommodate (iii) possible patiial cancellation. 21 SASHD Technician Education III 91712000 613012006 2.8 64.9 55 13 20 (a) Jan 2004- review of proposals from states on project restructuring and reallocation has commenced and will be finalized at MTR; (b) The National Project Implementation Unit is holding frequent meetings with the project states. The Bank team is also meeting the National Project Director once every month for a review since January 2003. 22 SASHD Rajasthan Dist. Primary 6/21/2001 12/31/2006 2 74.4 61.6 19.6 26.3 Procurement of the first round of workbooks being finalized; Education II library books and second round of workbooks in the pipeline. Civil works proceeding as planned. Ceiling could be raised by the end of the current fiscal year. 23 SASHD Immunization Strengthening 4/25/2000 6/30/2004 3.2 142.6 56.1 86.2 60.5 Infonnation not provided. 24 SASPR T A for Economic Refonns 5112/2000 12/31/2005 3.1 45 41.2 5.5 12.2 Infonnation not provided 25 SASRD Rajasthan District Poverty 4/25/2000 12/31/2005 3.2 100.5 95.6 9 9 Following the mid tenn review, a workshop in November Initiatives will review progress and agree on government proposals to improve project focus, perfonnance and disbursements. India Country Portfolio Peiformance Review FY03 Page25 Sector Project Name Board Closing Age Net Total Total % Proposed Actions Approval Date (yrs) Comm Undish. Dish. Dish I ! ($m) ($m) ($m) 26 SASRD AP Irrigation III 5/20/1997 7/31/2004 6.1 280 72.9 199.7 71.3 Project expected to disburse fully. Slow start-up due to poor contract management and land acquisition problems. 27 SASRD Ecodevelopment 9/5/1996 6/30/2004 6.8 22.1 4.5 15.6 70.5 Infonnation not provided I 28 SASRD Andhra Pradesh District 411112000 12/3112005 3.2 111 88.1 26.8 24.1 Project picking up momentum after a slow start up. The Mid Poverty Initiatives Tenn Review is underway will review the progress and assess the need for project restructuring and recommend an action plan. 29 SASRD UP Sodic Lands II 12/15/1998 9/30/2005 4.5 194.1 101.7 90.9 46.8 Infonnation not provided 30 SASRD Madhya Pradesh District 11/7/2000 6/30/2006 2.6 110.1 106.2 11.3 10.3 Infonnation not provided Poverty Initiatives 31 SASRD Kamataka Watershed 6/2112001 3/31/2007 2 10D.4 107 3.4 3.4 Initial low disbursements due to management issues and lack Development of capacity building. Based on a mid-tenn review in May 2003, the project has been restructured and the implementation schedule has revised and implementation appears to be improving. The next supervision mission in November 2003 will review the ratings and disbursement progress against targets. Disbursements are forecast to increase significantly in FY04/05 as civil works are accelerated for existing Phase I and new Phase II sub- watersheds. Decision to be taken on further restructuring/ partial cancellation in May 2004. Upgrading of the management flag is likely by June 2004. D Projects with large undisbursed balance, closing in FY04 India Country Portfolio Performance Review FY03 Page 26 A -------- --- -- 8.P ---- ----- tion f------ ---- d t t fl d bet FY00-03 Average Range Sector Number Total loan amount Preparation BB Cost % disbursed Preparation Time %disbursed in of ($m) Time (mthsi ($'000i in first two (mths) first two years projects years IDA IBRD Min Max Min Max Energy 3 50 710 49 431 17% 29 63 7% 21% Rural Water 2 217 0 18 369 4% 16 19 3% 5% Transport 7 139 2564 24 416 12% 11 37 7% 16% Education 4 572 0 21 238 12% 9 39 2% 26% Health3 1 110 0 13 527 5% na na na na 4 Health 2 173 0 14 348 43% 9 19 39% 62% Rural Development 9 1068 0 17 526 4% 11 24 3% 7% -----·-- Note: 42 projects were approved between FY00-03. The above excludes the four SAL operations and one emergency operation, as well as nine other projects for which complete information was not available. Standard Disbursement Profile for Infrastructure projects is 18% in year 2 for a 6-year project 1: In his email of Sept. 16, 2003, Shengman Zhang has asked "Staff to strive for 12 months as the average processing time for investment project preparation." Today, close to half of the Bank's total investment operations already meet the 12-month standard. "Our goal is to streamline and accelerate our procedures and decision-making. Nor does this suggest any compromises on project quality:QAG and OED results show that the quality and success rate of operations that are completed within 12 months (including emergency operations) is similar to, and often better than, operations that take longer to process." 2: Excluding Trust Funds (if applicable) 3: Uttar Pradesh Health Systems Project 4: Immunization Strengthening project and Leprosy II project India Country Porffolio Performance Review FY03 Page 27 Annex 9. List of IBRD Loans and IDA Credits in the Portfolio, June 30, 2003 I L_, _ _ .L~- lo...~--"i- ~-~4---- 11--~,: __ .._ ..._,____ 11---_:-~.L T.----~ ••--·=--~ ~ -- ..!..-'!! l':;.T_..:.. ..... ~"'!""'_..!.._! '! •• l""!r1~.eL-~'! ~~-~'!~ T"6_.t..,!_ ~! .... J.,. I ~ecror ~uo-sec1or rroJeCT rroJeCll"'ame uoaro Keviseo Age tmail"'el IOlal ~-..!.. toTal tOtal UISU. KaHO UISD. ID Approval Closing (yrs) Commitments Undisb Dish. Percent in FY03 Lag fiHfP {~MI (~m) (~m) Oish (mths) 1 CITPO P055456 Telecom Sector Reform TA 6/6/2000 12/3112004 3.1 62.0 56.4 5.6 9.0 2.5 29.0 3.1 2 SASEl Energy P049537 AP Power APL I 2/18/1999 8/3112003 4.4 189.7 17.7 172.0 90.7 42.8 - 3 SASEI Energy P035170 Orissa Power Sector 5/14/1996 1/3112004 7.1 255.0 53.8 201.2 78.9 30.0 8.0 1 4 SASEI Energy P03 5173 Powergrid II 5/3/2001 6/30/2006 2.2 450.0 297.4 152.6 33.9 16.3 9.o 5 SASEI Energy P038334 Rajasthan Power I 1118/2001 6/30/2005 2.5 180.0 120.8 59.2 32.9 21.7 10.0: 6 SASEI Energy P049770 Renewable Energy II 6/27/2000 3/31/2006 3.0 130.0 112.7 18.4 14.1 7.6 24.0 7 SASEI Energy P035172 UP Power Sector 4/25/2000 12/31/2004 3.2 150.0 45.5 104.5 69.7 41,4 17.0 Subtotal (Enen!v) 3.7 1355 648 708 52 22 8 SASE! Infra P049301 AP Emergency Cyclone 5/6/1997 7/31/2003 6.2 131.0 10.1 116.2 88.7 43.6 1.0 9 SASEI Infra P010480 Bombay Sewage Disposal 7/6/1995 12/3112003 8.0 170.0 15.7 152.2 89.5 43.1 3.0 10 SASEI Infra P074018 Gujarat Emergency 5/2/2002 10/31/2005 1.2 442.8 389.9 105.2 23.7 21.2 5.0 11 SASEI Infra P050653 Kamataka RWSS II 12118/200 12/3112007 1.5 151.6 161.9 4.5 3.0 0.3 9.0 12 SASEI Infra P055454 Kerala RWSS 11/7/2000 12/3112006 2.6 65.5 62.6 7.1 10.9 5.4 5.0 13 SASEI Infra P010461 Madras Water Supply II 6/20/1995 3/31/2004 8.0 86.5 6.6 79.9 92.3 48.2 17.0 14 SASEI Infra P050637 Tamil Nadu Urban Dev II 5/27/1999 11/30/2004 4.1 105.0 28.6 76.4 72.7 4.9 10.0 Subtotal (Infrastructure) 4.5 1152 675 541 47 18 15 SASEI Transport P009995 AP State Highways I 6/17/1997 1131/2004 6.0 350.0 59.5 290.5 83.0 54.7 17.0 16 SASEI Transport P071244 Grand Trunk Roads 6/2112001 12/3112006 2.0 589.0 505.5 83.5 14.2 10.1 14.0 17 SASEI Transport P010566 Gujarat Highways 9/5/2000 12/3112005 2.8 381.0 295.4 85.6 22.5 10.9 18.0 18 SASEI Transport P070421 Kamataka Highways 5/24/2001 12/3112006 2.1 360.0 319.4 40.6 11.3 4.8 - 19 SASEI Transport P072539 Kerala State Transport 3/14/2002 12/3112007 1.3 255.0 236.1 18.9 7.4 3.6 (2.0) 20 SASEI Transport P069889 Mizoram Roads 3/14/2002 12/3112007 1.3 60.0 60.6 5.7 9.6 5.8 2.0 21 SASEI Transport P050668 Mumbai Urban Transport 6118/2002 6/30/2008 1.0 542.0 509.2 40.8 7.5 7.4 3.0 22 SASEI Transport P009972 National Highways III 6/8/2000 6/30/2006 3.1 516.0 398.4 117.6 22.8 10.0 10.0 23 SASEI Transport P050649 Tamil Nadu Roads 6117/2003 3/31/2009 0.0 348.0 348.0 - - 12.0 24 SASEI Transport P067606 UP Roads 12/19/200 12/3112008 0.5 488.0 473.1 14.9 3.0 - Subtotal (Transport) 2.0 3,889 3,205 698 18 11 Total SASEI (India) 3.4 6,396 4.529 1,947 30 15 India Country Portfolio Performance Review FY03 Page 28 Sector Sub-sector Project Project Name Board Revised Age Total Net Total Total Total Dish. Ratio Dis b. ID Approval Closing (yrs) Commitments Undisb Disb. Percent in FY03 Lag** nlltP f$M) ($m) ($m) Dish (mths) 25 SASES Environm P043728 Env Capacity Bldg TA 12/23/199 6/30/2004 6.5 49.1 8.3 36.1 73.6 34.1 - 26 SASES Environm P031829 ODS II - Consp Phaseout 3/211995 6/30/2010 8.3 50.0 19.8 30.2 60.3 20.5 24.0 27 SASES Environm P069376 ODS III- CFC Prodn Closure 6/9/2000 6/30/2011 3.1 85.3 45.3 40.1 46.9 5.5 - 28 SASES Social P044449 Rural Women's Development 3/27/1997 6/30/2004 6.3 12.8 6.5 5.0 39.3 10.6 1.0 Total SASES (India) 6.0 197 80 111 56 24 29 SASHD Education P038021 DPEP III (Bihar and 12/4/1997 9/30/2003 5.6 152.0 110.1 44.2 29.1 5.5 45.0 30 SASH Educatio P045050 Rajasthan DPEP I 6/8/1999 12/31/2004 4.1 85.7 50.7 35.2 41.1 22.1 26.0 31 SASHD Education P055455 Rajasthan DPEP II 6/2112001 12/3112006 2.0 74.4 61.6 19.6 26.3 19.7 12.0 32 SASHD Education P072123 Technical Quality 11114/200 6/30/2008 0.6 250.0 258.8 6.0 2.4 11.0 33 SASHD Education P050658 Teclmician Education III 91712000 6/30/2006 2.8 64.9 55.0 13.0 20.0 13.4 1.0 34 SASHD Education P050667 UP DPEP III 12/16/199 9/30/2005 3.5 182.4 73.7 103.2 56.6 26.2 (4.0) Subtotal (Education) 3.1 809 610 221 27 29 35 SASHD Health P045051 2nd National HIV 6/15/1999 7/3112004 4.0 191.0 89.2 100.2 52.4 19.1 46.0 36 SASHD Health P075056 Food & Drugs Capacity Bldg 6/5/2003 6/30/2008 0.1 54.0 55.7 - - 35.0 37 SASHD Health P067330 Immunization Strengthening 4/25/2000 6/30/2004 3.2 142.6 56.1 86.2 60.5 35.2 41.0 38 SASHD Health P067543 Leprosy II 3/27/2001 12/3112004 2.3 30.0 13.1 18.5 61.5 52.0 16.0 39 SASHD Health P050651 Maharashtra Health Sys 12/8/1998 3/3112005 4.6 134.0 99.7 35.5 26.5 16.1 29.0 40 SASHD Health PO 10511 Malaria Control 6/12/1997 3/3112004 6.1 118.3 56.0 60.9 51.5 10.1 15.0 41 SASHD Health PO 10496 Orissa Health Systems 6/29/1998 3/3112004 5.0 76.4 58.5 20.0 26.2 10.6 8.0 42 SASHD Health PO 10531 Reproductive Health 5/28/1997 3/3112004 6.1 260.3 79.7 172.8 66.4 15.4 25.0 43 SASHD Health P035825 State Health Systems II 3/2111996 2/29/2004 7.3 350.0 40.3 273.3 78.1 50.9 16.0 44 SASH Health P010473 Tuberculosis Control 1/30/1997 9/30/2004 6.4 142.4 78.1 56.5 39.7 19.9 2.0 45 SASHD Health P050657 UP Health Systems 4/25/2000 12/3112005 3.2 110.0 99.5 14.9 13.5 9.0 (2.0) 46 SASHD Health P035827 Women & Child Devpt 6/2911998 9/30/2004 5.0 300.0 170.4 131.6 43.9 17.1 - Subtotal (Health) 4.4 1,909 896 970 51 21 Total SASHD (India) 3.8 2,718 1,506 1,191 44 23 India Country Portfolio Performance Review FY03 Page29 Sector Sub-sector Project Project Name Board Revised Age Total Net Total Total Total Dish. Ratio Dis b. ID Approval Closing (yrs) Commitments Undisb Dish. Percent in FY03 Lag** Date ($M) ($m) ($m) Dish (mths) 47 SASPR P049385 AP Econ Restructuring 6/25/1998 3/3112004 5.0 543.2 195.7 346.4 63.8 21.3 24.0 48 SASPR P059501 TA for Econ Reforms 5/12/2000 12/3112005 3.1 45.0 41.2 5.5 12.2 3.5 17.0 Total SASPR (India) 4.1 588 237 352 60 19 49 SASRD P073094 AP Community Forestry 7/16/2002 3/3112008 1.0 108.0 116.9 2.9 2.7 8.0 50 SASRD P045049 AP DPIP 4/11/2000 12/31/2005 3.2 111.0 88.1 26.8 24.1 17.9 13.0 51SASRD P035158 AP Irrigation III 5/20/1997 7/31/2004 6.1 280.0 72.9 199.7 71.3 29.6 24.0 52 SASRD P071272 AP Rural Pov Reduction 2/20/2003 9/30/2008 0.4 150.0 159.1 - - 1.0 53 SASRD PO 10522 Assam Rural Infrastructure 5/25/1995 12/31/2003 8.1 126.0 22.3 85.4 67.8 32.8 2.0 54 SASRD P076467 Chattisgrah District Rural Pov 4/24/2003 3/31/2009 0.2 112.6 115.2 - - 1.0 55 SASRD P035824 Div Agricultural Support 6/30/1998 3/31/2004 5.0 129.9 33.9 94.3 72.6 59.3 1.0 56 SASRD P036062 Ecodevelopment 9/5/1996 6/30/2004 6.8 22.1 4.5 15.6 70.5 38.3 20.0 57 SASRD P010485 Hydrology 8/22/1995 12/31/2003 7.9 122.4 12.7 88.2 72.1 50.9 4.0 58 SASRD P071033 Kamataka Tanks 4/25/2002 1/31/2009 1.2 98.9 108.0 4.0 4.0 3.6 5.0 59 SASR P067216 Karnataka Watershed 6/2112001 3/3112007 2.0 100.4 107.0 3.4 3.4 0.4 6.0 60 SASRD P049477 Kerala Forestry 3/24/1998 12/31/2003 5.3 39.0 13.1 26.0 66.6 37.3 11.0 61SASRD P059242 MP DPIP 1117/2000 6/30/2006 2.6 110.1 106.2 11.3 10.3 6.1 8.0 62 SASRD P010561 National Agri Technology 3/17/1998 12/3112003 5.3 196.8 81.3 110.5 56.1 28.2 15.0 63 SASRD P010529 Orissa WRCP 12119/199 3/3112004 7.5 290.9 56.9 208.4 71.6 29.2 18.0 64 SASR P010505 Rajasthan DPIP 4/25/2000 12/3112005 3.2 100.5 95.6 9.0 9.0 4.5 9.0 65 SASRD P040610 Rajasthan WSRP 2/19/2002 3/3112008 1.4 140.0 147.9 5.7 4.0 0.4 18.0 ! 66 SASRD P010476 Tamil Nadu WRCP 6/20/1995 3/3112004 8.0 257.9 29.1 188.6 73.1 51.2 15.0 67 SASRD P035169 UP Forestry 12/9/1997 7/31/2003 5.6 52.9 9.2 42.7 80.7 49.7 6.0 68 SASRD P050646 UP Sodic Lands II 12/15/199 9/30/2005 4.5 194.1 101.7 90.9 46.8 28.2 4.0 69 SASRD P050647 UP WSRP 2/19/2002 10/31/2007 1.4 149.2 157.9 5.5 3.7 0.3 - 70 SASRD P041264 Watershed Hills II 6/15/1999 3/31/2005 4.0 135.0 49.4 83.0 61.5 40.2 - Total SASRD (India) 4.1 3,028 1,689 1,302 43 20 INDIA TOTAL 4.1 12,990 8,097 4,909 38 18 D Projects with large undisbursed balance, closing in FY04 D Slow disbursing projects Projects at risk are given in red. India Country Portfolio Performance Review FY03 Page 30 Annex 10. Sample Project Implementation Readiness Checklist (To assist task teams in assessing the readiness of their projects~ this is not a mandatory filter) I. Project concept ./ Use of SMART objectives: S (Specific), M (Measurable), A (Adaptable to Project Specifics), R (Reasonable) and T (Timebound) ./ Measurable performance indicators (baseline and target), which are set before negotiations ./ Limited number of project components ./ Lessons from past/ongoing projects adequately reflected in the design, cost estimates, and selection of the implementation period of new projects. II. Procurement readiness ./ Clear description and detailed breakdown of what is to be financed in all years ./ Clear indication of likely size of packages ./ Clear status of first year program o Funding allocated in budget, or firm arrangement in place for financing before approval o Land acquisition and resettlement (LA&R) plans are ready, and satisfactory arrangements in place for financing LA&R for the first year of civil works before Board approval o Projects with Pills with core units established and staffed by negotiations o RFP for consultancies, bidding documents for goods/ civil works for first year ready before negotiations o For large infrastructure projects, contract award finalized prior to Board presentation for at least (25%) of the proposed loan amount ./ Identify key consultancies o over $100,000 o critical to reform or institutional development o clearly explain procurement status III. Key policy & institutional reforms ./ List of key reform issues ./ Outcomes expected against each (matrix used in SALs could be a good format) ./ Clear identification of up-front actions taken IV. Safeguards Readiness ./ Environment ./ Social V. Institutional arrangements ./ All clearances identified and obtained ./ Implementing agency in place and capable ./ Community participation/user groups started before appraisal; mandatory piloting during preparation ./ Funds flow issues fully identified VI. Conditionality ./ Zero project conditions for effectiveness ./ Country requirements for project approval adequately factored in the Bank approval schedule ./ Number of legal covenants should be limited VII. Overall Rating for Implementation Readiness ./ Provide a rating for project readiness ("Exemplary", "HS", "S", "U" or "HU") ./ Highlight three strengths and three weakness for moving ahead with or delaying project approval India Country Porifolio Peiformance Review FY03 Page 31 Annex 11. CPPR Review Meeting with DEA Summary of Discussions, Recommendations and Agreements New Delhi, January 8, 2003 1. Mr. Benmessaoud made a short presentation on the portfolio action plan for FY04. 2. The meeting discussed the FY04 portfolio action plan and the following were agreed to: Implementation of the CPPR recommendations will be reviewed semi-annually, with a focus on projects at risk and slow-disbursing projects. 11 The Bank and DEA will jointly review projects at risk on a quarterly basis. If a project remains in risk status for more than one quarter, DEA will follow up with the project authorities, and if necessary, will invite the project authorities to the semi-annual meetings. m In addition to the regular six-monthly Bank supervision missions, desk reviews will need to be carried out in the intervening quarter for all projects for which the closing date have been extended. IV Where applicable, the frequency of centralized Bank -DEA reviews would be coordinated with the existing review cycles of the central line ministries (such as Agriculture, Rural Development). v Remedial actions (including restructuring in the early stage of implementation) should be taken for those projects at risk. v1 In light of the above, all efforts should be made to ensure that by end ofFY04: (a) the proportion of projects at risk is below 10% and the commitment at risk is below 10%, and (b) to the extent possible, the number of overage projects (i.e., 8 years or more) is reduced to zero. 3. DEA requested the Bank's assistance with developing a monitoring system for CAA&A to track audit reports. The Bank agreed to this and will shortly discuss the modalities to take this further with DEA and CAA&A. 4. On the proposed action for strengthening in-country capacity, DEA suggested that the Bank should closely coordinate with DEA's Project Management Unit. 5. It was agreed that the remaining Sector Portfolio Performance Reviews would be held as per schedule- PREM in January and Transport in February. 6. DEA suggested some specific revisions in the CPPR. The Bank will incorporate these changes and finalize CPPR document. List of Participants Minis1ry of Finance, Government of India Ranjit Bannerji, Joint Secretary, Department of Economic Affairs (DEA) Ajay Seth, Director, DEA Dharamendra Sharma, Director, DEA Sunil Bhargava, Director, DEA T Raghavendran, Joint Controller of Aid Accounts and Audit The World Bank Michael Carter, Country Director, India Rachid Benmessaoud, Operations Advisor Mandakini Kaul, Operations Officer Suneeta Singh, Senior Public Health Specialist India Country Portfolio Performance Review FY03 Page 32 Annex 12. Detailed Portfolio Action Plan for FY04 Portfolio actions with immediate benefit. (i) At the Central (DEA) I Bank Level, closer monitoring by both is required through: a. Joint-preparation of the annual CPPR to address the decline in portfolio performance, agree on a set of corrective actions and performance targets for FY04, and address systemic portfolio issues (such as flow of funds, auditing, and audit disallowances); b. Continuing regular consultations, sharing of portfolio performance ratings and "exceptions and outliers" reports on a monthly basis, and rigorous use of indicators; c. Increasing focus on quality and results rather than implementation issues; d. Streamlining portfolio management by: o Applying implementation readiness filters and enforcing selectivity through better alignment with the Country Assistance Strategy, and realistic assessment of client ownership and implementation capacity.; o Establishing standards for supervision and reporting; o Enforcing more proactive and stringent management of: (i) problem projects through restructuring, cancellation and re-allocation, and (ii) closing dates by applying criteria for extensions such as "project contribution to current strategy," "track records of good project performance," "possibility of scale up of a successful pilot," and following the "do not try or continue what has not yet worked" principle; e. Changing the preparation cycle of the CPPR, so that the exercise is completed in July instead of November (as currently being the practice) to give sufficient time to implement action plans. It is proposed to start the CPPR for FY04 in May 2004 and deliver it in July 2004; f. Conducting semi-annual reviews to monitor progress in meeting the above CPPR targets; the first such review to be held in April 2004; g. Strengthening in-country capacity (at DEA, line ministries, and major borrowing states) by initiating actions towards: (i) establishing a portfolio management function and using own monitoring and reporting systems; (ii) providing operational training; and (iii) establishing a statistical database to monitor and evaluate results (possibly, for externally-funded projects and programs) to support achievement of outcomes and request for future support; progress will be assessed during the first semi-annual review in April2004; h. Establishing mechanisms for knowledge sharing such as a website and I or help desk for line ministries, states, and project teams/ entities; 1. DEA to hold all extension requests for FY04 until sectoral portfolio reviews (for health, education, rural development, transport and PREM in particular) have been completed and action plans agreed upon. India Country Portfolio Performance Review FY03 Page 33 (ii) At State Level. This would involve following up the CPPR with annual multisectoral portfolio reviews for selected large borrowing state, covering all Bank support to that state, including projects under implementation and preparation. (iii) At the Line Ministries/Sector/Project level. Supervision quality at this level should be strengthened to enable early identification of problems and take corrective actions, including clear guidance on benchmarks for project upgrading, close monitoring of agreed deadlines for key actions, and/or timely restructuring, reallocation I cancellation of unused funds. Line Ministries and Sector units at the Bank should continue to strengthen their portfolio management resources and systems, to address portfolio management issues on a weekly/monthly basis. Actions to improve supervision quality would include: a. Bringing peer reviewers from within and outside the Bank to enhance supervision quality of a project or a sector portfolio- informal/formal quality at supervision review at the request of the Gol (through DEA), the Sector Director, or the Country Director; b. Conducting: (i) informal reviews of all projects at risk or complex projects, once every quarter, and developing supervision strategies for these projects; and (ii) conducting Sector Portfolio Performance Reviews (SPPR) twice a year; c. Conducting Sector Portfolio Performance Reviews (SPPR) for poorly disbursing projects, some of which are rated as problem or at risk, and which will close in FY04 with a large undisbursed balance; and implementing SPPR-recommended actions plans for restructuring, cancellation and re-allocation of unused funds. Rural Development: December 4-5, 2003 Education: December 8, 2003 Health: December 9, 2003 PREM: January 2004 Transport: February 2004 d. By no later than March 2004: o Updating procurement, commitment and disbursement schedules by March 2004 for all sector, in particular Education, Health, Energy, Infrastructure, Transport and Rural Development. o Organizing Legal and Disbursement Workshops in the New Delhi Office, in particular for both staff and clients in the human development and rural development sectors, on how to deal with the operational, legal, disbursement and other fiduciary aspects of restructuring, cancellation and re-allocation of unused funds; e. Ensuring that, as part of the supervision mission activities, task teams report on procurement activities, update annual procurement plans and schedules, revise disbursement schedules, monitor expenditures and commitments, and report on pending payments under Statements of Expenditures; f. Making better use of the mid-term reviews and formal project restructuring to simplify projects in the existing portfolio. (iv) At the Bank Level: a. Strengthening capacity through: India Country Portfolio Performance Review FY03 Page 34 o mobilizing experienced senior staff to strengthen frontline leadership, help provide and facilitate guidance to task teams and junior task leaders, and relieve the heavy workload of sector managers. In addition, such senior staff should be made accountable for business development and delivery; o upgrading operational skills through intensive training and mentoring, as many new frontline staff have limited experience. This would include arranging for (and possibly, mandating) an Advanced Operations Training for all field staff. Such a training could be customized for the India program, and be held in New Delhi Office; representatives of the Borrowers could be invited to attend; b. Better use of Project Status Reports (PSRs) by Sector and Country Management to: (i) convey critical messages to the project teams on how to deal with the issues faced; (ii) monitor more frequently implementation of agreed supervision actions; (iii) identify warning signs and cost savings; (iv) allow timely restructuring, re-allocation or cancellation; and (v) reinforce the use of performance indicators. Random reviews of PSRs for slow disbursing projects that are rated satisfactory. Updating ofPSRs is clearly within the Bank's control, and should be routine by now; c. Closer monitoring ofPSR ratings by management is also needed, as a number of poorly disbursing projects are not rated as problem projects, suggesting a possible realism issue. Sector units is to be held accountable for ensuring realism of project rating and making PSRs a more effective management tool; d. Addressing cross-cutting issues through, for example, "thematic supervision" or assessment and discussion with relevant sector or authorities; e. Ensuring adherence by the task team to business standards for timely reporting of supervision results and providing feedback to the clients. o In the matrix management environment, an improvement in portfolio performance will require sector units to be held accountable for the realism of ratings, proactivity and increased decentralization of task management, while the country management unit is held accountable for overall portfolio performance, selectivity, closing date management and cross-cutting issues. o 0% Net Disconnect between last PSR and Implementation Completion Report (ICR) o Increased share of post-review of procurement and Statement of Expenditures o No stale PSRs by May 30, 2004 (v) New projects will be more rigorously filtered for implementation readiness (including avoiding overly ambitious statements of development objectives; up-front mobilization of project stakeholders; up-front institutional and capacity building actions that are critical for implementation; procurement readiness; simpler project designs in the context of weak implementation capacity; and if applicable, mandating piloting during preparation). Mandatory checklist for project implementation readiness will be introduced at PAD review (see sample checklist in Annex 10). Quality enhancement reviews will be conducted on demand-basis, and sector and country management units may wish to begin identifying selected "high-risk" operations for such reviews. Preparation time for investment projects should be closely monitored and justification for preparation time in excess of 12 months should be explained. India Country Portfolio Pe~formance Review FYOJ Page 35 Actiollls for a better future portfolio (i) Financial Management. Financial management (FM) actions are needed at central/state level as well as at project level. State Financial Accountability Assessments (SFAAs), which have been completed in four states -Karnataka, Uttar Pradesh, Orissa and Andhra Pradesh- are designed to enhance the knowledge ofFM and accountability arrangements governing the use of public funds, and to support a process of institutional reform, capacity building and financial accountability at central, state and local governments levels as well as in public sector undertakings. There is also considerable scope to improve project performance by building financial management strengthening components into the design of individual investment loans. Borrower performance within existing projects can be strengthened directly through training in Bank procedures. A variety of training events were organized through local educational institutions in 2003 and more are planned for 2004. One of the objectives is to enable local educational institutions to provide good quality training through training the trainers. The new Bank policy on financial reporting and auditing offers considerable scope for simplifying accounting, audit and funds flow arrangements for Bank projects. The Bank will seek opportunities to simplify procedures wherever possible, working with the relevant ministries, departments and agencies responsible and with other donors. Working with DEA, the Bank will also try to put in place better procedures for dealing with poorly performing projects, delays in flow of funds, backlog of SOEs, and ineligible expenditures. All of the FM actions can be expected to have a long term beneficial impact on portfolio performance. (ii) Procurement. A Country Procurement Assessment Review (CPAR) was completed for India in three phases, focusing on the central government and its agencies, three sample states (Karnataka, Tamil Nadu, and Uttar Pradesh), and about 250 Central Public Sector Enterprises. The CPAR recommendations have been included as one of the inputs to the Committee appointed by the Government of India for reviewing procurement norms indicated in the General Financial Rules [GFR] and suggesting modifications thereof. The CP AR recommendations are also being implemented in Karnataka and Tamil Nadu, and are being pursued in Andhra Pradesh, Orissa and Punjab. (iii) Social Safeguards. The Bank will assist national/state authorities and project entities to identify the implementation mechanisms best suited to improve social development outcomes of Bank- financed operations, such as security and risk management, inclusion, social cohesion, and accountability. While avoiding or mitigating negative impacts must remain a primary concern for some Bank-operations, the Bank will follow a new approach-not imposing requirements that are irrelevant, but mutually agreed safeguard standards for successful poverty reduction, and ensuring transparency and accountability to civil society. With increased future lending, the Bank will move from ring-fenced operations towards building on fudia's own capacity and procedures. Therefore, the Bank will engage with GOI in a dialogue on differences between the Bank's and India's own resettlement, land acquisition and tribal development policies and practices and identify the potential net development gains from addressing any inconsistencies through, for example, better dispute-resolution, incentives, training, policies, or procedures. The Bank will also work with counterparts in India to set clear protocols to monitor performance on resettlement and related issues in each type of operation, and link achievements to incentives for improved outcomes. "Sectoral" social assessment will be conducted for multiple projects (such as rural roads, and national/state highways) in the CAS pipeline, to effectively address cross- cutting/generic issues. An accountability strategy will be developed to better communicate to the public the social development outcomes of Bank-financed projects. (iv) Enhanced Approach to Lending. Programmatic lending (including structural adjustment operations) should be used to address cross-cutting issues related to financial management, India Country Portfolio Performance Review FY03 Page36 auditing, accounting, transparency in procurement, governance, etc. all of which could improve portfolio performance. In particular, Sector-wide Approaches (SWAps) and reformed approaches to investments can contribute to a portfolio which is more strategic and driven by country needs, institutional capabilities, and development effectiveness, and not by preferences internal to the Bank. The Government of India is increasingly practicing an approach among lending partners that would ensure transparency, and a set of rules and practices in project design and implementation that is more consistent amongst donors and less burdensome. It is also seeking solutions aimed at simplifYing project-specific fiduciary and safeguard requirements while helping Goi strengthen national standards I capabilities, as well as pooling donor resources under a common harmonized implementation framework. (v) Audit compliance refers to timely submission of audit reports (Special Accounts, Project Accounts/ SOEs, and Organization I Entity Accounts). In FY03, a total of 531 audit reports were due for the fiscal year ending 2002; of these 14 were related to grants and the balance to Loans/ Credits. The bulk of these reports are received just after the due date of September 301h, due to the disparate nature of the projects and the usual audit cycle followed by the Office of the Comptroller and Auditor General of India (C&AG). Steps are being taken to reduce this time lag by building client's capacity in this area and agreeing on flexible FM arrangements. As a part of this activity, the Bank would also roll out a new audit policy for investment projects in close coordination with DEA, C&AG, the Controller General of Accounts (CGA) and project staff in the coming year. (vi) Public-private partnerships An increasing number of Bank projects in sectors ranging from physical infrastructure to the delivery of health and education now emphasize the importance of and need for Public-Private partnerships (PPP). The Bank's Private Sector Development unit (SASFP) could play an important role in working with project teams to identifY opportunities for PPPs within each project, design and implementation of the PPP in question and, if necessary, to support the project through identifYing sector specific reforms required for the success ofPPPs and developing sector-specific guidelines for the appraisal and negotiation of PPP contracts. SASFP could also participate in the supervision of existing projects to examine the scope for strengthening the corporate governance, organization, and financial sustainability of existing project management I implementation structures. India Country Portfolio Performance Review FY03 Page 37 Annex 13. Trust Funds, as of June 30, 2003 (also see paragraphs 17 ,18) Unit TFno. TFName Donor Effective Date Closing Date GrantAmt Funds Disb to % disb (USD) date Receipient executed SASHD TF020916 District Primary Education Program II Dutch 21-Aug-97 30-Jun-03 25,800,000 20,652,164 80% SASHD TF027772 Gujarat District Primary Education Project Dutch 1-Nov-00 30-Apr-06 26,470,000 4,793,744 18% SASEI TF020606 Integrated Agricultural Demand Side Management Norway 23-Jun-99 31-Dec-02 4,300,000 170,000 4% SASEI TF026724 Maharashtra Rural Water Supply and Sanitation II PHRD 28-Feb-01 31-Jul-03 720,000 404,249 56% SASHD TF026691 Karnataka Integrated Health PHRD 15-Apr-01 19-Mar-04 680,000 68,000 10% SASRD TF026327 Rural Water Supply & Sanitation (Kerala, Karnataka II) PHRD 5-Dec-00 31-Jan-02 292,203 292,203 100% SASRD TF026723 Andhra Pradesh Rural Poverty Reduction PHRD 28-Dec-01 30-Dec-02 500,000 420,280 84% SASEI TF020169 Second Renewable Energy GEF 11-Aug-00 31-Mar-06 5,303,318 1,232,009 23% SASRD TF028479 Ecodevelopment GEF 30-Sep-96 30-Jun-02 16,886,881 14,184,551 84% SASES TF021999 2nd Ods Phase-Out MPT 17-Sep-92 30-Jun-10 50,000,000 30,164,553 60% SASES TF023789 Cfc Production Sector Gradual Phase-Out MPT 30-Jun-00 30-Jun-11 85,343,000 40,051,534 47% SARFM TF050110 Modernization of the Office Of C&AG IDF 15-0ct-01 12-Nov-03 200,000 185,374 93% Sub-total 216,495,402 112,618,661 52% Bank executed SASEI TF021543 Andhra Pradesh State Highways AU SAID 21-Aug-97 30-May-03 1,213,303 881,334 73% SASRD TF021582 District Poverty Initiatives Project AU SAID 12-Aug-99 31-Dec-03 1,979,951 937,750 47% SASHD TF051158 State MDG Case Studies and Conference Dutch 1-Dec-02 31-Dec-03 517,560 32,752 6% SASEG TF020009 Integrated Agricultural Demand Side Management Norway 23-Jun-99 31-Dec-02 300,000 18,564 6% SASFP TF020034 Rural Finance Reform SDC 3-Mar-98 28-Feb-04 500,000 0 0% SASES TF052063 India National CDM Strategy Study SDC 1-Apr-03 30-Jun-04 445,304 0 0% SASRD TF051181 Revitalization of crafts I folk perf. in Rajasthan Italy 12-Sep-00 28-Feb-05 300,000 0 0% SASEI TF050139 Solar Thermal Power GEF 9-Jun-00 31-Dec-03 750,000 750,000 100% SASRD TF051771 Watershed Externalities and Local Institutions MISC 9-Jan-03 31-Dec-04 118,500 20,948 18% Sub-total 6,124,617 2,641,348 43% TOTAL FOR INDIA 222,620,019 115,260,009 52% India Country Portfolio Peiformance Review FY03 Page 38 Annex 14. FY04 performance indicators by sector (projected) FY04 Indicators %Problem %Projects Commitments Disbursement Realism Pro activity Net disconnect Projects at Risk at Risk Ratio between last PSR and ICR Education 17% 17% 10% 21% 80% 100% 0% Energy 0% 31% 80% 100% 0% Env and Social Devt 0% 29% 80% 0% Health 30% 45% 31% 80% 100% 0% Infrastructure 0% 15% 80% 100% 0% PREM 0% 15% 80% 0% Rural Development 12% 18% 14% 18% 80% 100% 0% lfransport 10% 14% 13% 80% 0% Overall FY04 India 5% 10% 10% 17% 80% 80% 0% !Actual FY03 Bank-wide 12% 15% 15% 21% 80% 88% L _ __ _ _ _ _ _ _ 16% - - L ___ India Country Portfolio Performance Review FY03 Page 39 Annex 15. Sector-wise review of performance indicators Education FY03 Bankwide Basic Data. FY03 Performance Indicators FY03 FY04 est Average Net commitments ($m) 809 No. of problem projects 1 1 23 No. ofprojects 6 Projects at risk(%) 17% 17% 20% Undisbursed Balance ($m) 610 Net commitments at risk(%) 11% 10% 19% Net comm. as % oflndia portfolio 6% Disbursement ratio 29% 21% 25% % commitments ;::::5 yrs 19% Proactivity 100% 100% 80% %commitments ;::::7 yrs 0% Average age of projects (yrs) 3.1 For projects approved during FY00-03 (4 projects) Average Min Max Preparation time (mths) 21 9 39 Total disbursement in first two yrs (%) 12% 2% 26% Notes: 1. n.a.: not available. 2. For detailed project-wise information, please refer to Annex 9. 3. Information on loan amount committed but not yet disbursed is not available. Key issues Draft Action Plan for FY04 (To Be Developed with Goi) • Three slow disbursing projects, with an undisbursed • Sector Portfolio Review and Action Plan by balance of $167 million December 2003 Ell One project more than 5 years old (19% of sector total) • Improve performance indicators (realism) with $110 undisbursed • Update procurement, commitments and • One problem project disbursements schedules by March 2004 Overview of Education Portfolio Trends in Disllmrsement Ratio and Commitments at risk g Total net commitments 0 New Connnitments in FY % -<>--Percent disbursed -o-- Percent Commitments at risk $m 0 Total mHlisbursed balance liJ Disbursements in FY 30,----------------------------, 1,500 1,200 +1''!1--- ~ 20 0 ~~ 900 '"===-===-=~ 7 600 10 300 ..., 0 ' FY99 FYOO FY01 FY02 FY03 FY99 FYOO FYOJ FY02 FY03 Percent disbursed as of June 30, 2003 Trend i.n JPiercent disbursed over life of project Education ---(>---Current Dish Trend ---o- Notional dish trend to ensure 100% dish 100 80 .pY~ -9" / "" " I ~ I ~ " .-£ 60 ;a "' " ll 40 )f ! <> <> "' 20 L' -~:-<> 20 0 I 0 2 3 4 5 6 Years Age (yrs) 0 2 3 4 5 6 India Country Portfolio Performance Review FY03 Page40 Health, Nutrition and Population (HNP) FY03 Bankwide Basic Data FY03 Performance Indicators FY03 FY04 est Avera2e Net commitments ($b) 1.9 No. of problem projects 0 3 17 No. ofprojects 12 Projects at risk(%) 8% 30% 16% Undisbursed Balance ($b) 0.9 Net commitments at risk(%) 7% 45% 21% Net comm. as% of India portfolio 15% Disbursement ratio 21% 31% 17% % commitments ;:::5 yrs 65% Pro activity 100% na 92% % commitments ;:::7 yrs 18% Average age of projects (yrs) 4.4 For pro.iects approved during FY00-03 r1 project) Average Min Max Preparation time (mths) 13 na na Total disbursement in first two yrs (%) 5% na na Notes: 1. n.a.: not available. 2. For detailed project-wise information, please refer to Annex 9. 3. Information on loan amount committed but not yet disbursed is not available. Key issues Draft Action Plan for FY04 _(To Be Devel-Percent disbursed --o- Percent Commitments at risk D Total undisbursed balance iil Disbursements in FY 40,-------------- 3,000 -' ~ r- 2,000 1- f---- 1- r-f---- --- [, .- " r- 1,000 f------- .. - - f------- 1- . r- 0 ~ :-- ~ ~ I lil 0+---0---,-------,------r-------,------~ FY99 FYOO FYOl FY02 FY03 FY99 FYOO FYOI FY02 FY03 Percent disbursed as of June 30, 2003 Trends in. percent disbursed over life of project HNP -v~ Current Disb Trend --a-- Notional Trend to ensure 100% disb 100 ----··--·-·-·--·--·--··-----····-·-~·-------·---- -··-·····-----1 ~I 100 .,; 80 .I/"' ~ M 3 l () 80 ~ 60 +-------<>---:J-<1> -o ;;; ~ 60 / <> " <> I " +----------/ • ;:! 40 il "' " !I ;;; 40 ~ 7 () () ;ft. 20 +-~---~-,--c,-f"'----¢'-----------jl 20 0 0 0 2 3 4 5 6 7 8 Age (yrs) 0 2 6 7 8 India Country Portfolio Performance Review FY03 Page 41 ENERGY FY03 Bankwide Basic Data FY03 Performance Indicators FY03 FY04 est Average Net commitments ($b) 1.4 No. of problem projects 2 0 9 No. ofprojects 6 Projects at risk(%) 50% 0% 13% Undisbursed Balance ($b) 0.6 Net commitments at risk(%) 44% 0% 16% Net comm. as% oflndia portfolio 10% Disbursement ratio 22% 31% 20% % commitments ;;:::5 yrs 19% Pro activity 100% 100% 85% %commitments ;;:::7 yrs 0% Average age of projects (yrs) 3.7 For projects approved during FY00-03 (3 pro.iects) Average Min Max Preparation time (mths) 49 29 . 63 Total disbursement in frrst two yrs (%) 17% 7% 21% Notes: 1. n.a.: not available. 2. For detailed project-wise information, please refer to Annex 9. 3. Information on loan amoutJLt committed but not yet disbursed is not available. Key issues Draft Action Plan for FY04 (To Be Developed with Goi) • One slow disbursing project closing in FY04, which is more • Improve performance indicators (proactivity) than 5 years old, with an undisbursed balance of $54 m. • Improve preparation time of projects • Two problem projects and one project at risk • Restructure the slow start-up project by end FY04 if • One slow start-up project (60%) of project funds not committed • Update procurement, commitments and disbursements schedules by March 2004 Overview of Energy Portfolio Trends in Disbursement Ratio and Commitments at risk Ia Total net commitments Cl New Commitments in FY % --<>--Percent disbursed ~Percent Commitments at risk US$ M 0 Total undisbursed balance llil Disbursements in FY 3,000 - , - - - - - - - - - - - - - - - - - - - - - - - - , 30,------------------------. 2,500 --- 2,000 1,500 1,000 500 0 FY99 FYOO FY01 FY02 FY03 FY99 FYOO FYOl FY02 FY03 J>ercent disbursed as of June 30, 2003 Trend in percent disbursed over life of project Energy --<>--Current Disb Trend 100 --------------~-----:] 100 80 • _I 80 ~ 60 40 ~ 40 J!. 20 20 ~ 0 0 Years 0 2 3 4 5 6 7 0 2 3 4 5 Age (yrs) India Country Portfolio Performance Review FY03 Page 42 INFRASTRUCTURE (includes rural water supply and sanitation, urban water, urban development and disaster management; several projects rely on community driven development initiatives.) FY03 Bankwide Basic Data FY03 Performance Indicators FY03 FY04 est Average Net commitments ($b) 1.2 No. ofproblemprojects 1 0 23 No. ofprojects 7 Projects at risk (%) 14% 0% 16% Undisbursed Balance ($b) 0.7 Net commitments at risk(%) 11% 0% 11% Net comm. as% of India portfolio 9% Disbursement ratio 18% 15% 15% % commitments 25 yrs 34% Pro activity na 100% 95% %commitments 27 yrs 22% Average age ofprojects (yrs) 4.5 For rural water projects approved during FY00-03 (2projects) Average Min Max Preparation time (mths) 18 16 19 Total disbursement in first two yrs (%) 4% 3% 5% Notes: 1. n.a.: not available. 2. For detailed project-wise information, please refer to Annex 9. 3. Information on loan amount committed but not yet disbursed is not available. Key issues Draft Action Plan for FY04 (To Be Developed with Gol) • One slow disbursing project with undisbursed balance of $63 • improve project readiness for implementation, m especially for CDD projects • Three projects are more than 5 years old, and have • action plan for slow starting projects: restructuring undisbursed balance of$32m (5% of sector total) I early mid term review -by end FY04 • New CDD projects have slow start-up • Update procurement, commitments and disbursements schedules by March 2004 Overview of Infrastructure Portfolio Trends in Disbursement Ratio and Commitments at risk 1111 Total net commitments lJ New Commitments in FY % --<>--Percent disbursed -lJ- Percent Commitments at risk US$M 0 Total undisbursed balance Iii Disbursements in FY 30 1,500 - , - - - - - - - - - - - - - - - - - - - - - - - - . -~ ~ 1,200 +--------------llmll---~~--~ 20 900+-.~----~~-------~lr---~em~-r~-~ 10 0. 600 -1-~!111--fl--111!!1-1 300 0 ~ c FY99 FYOO FYOJ FY02 FY03 FY99 FYOO FYOI FY02 FY03 Percent disbursed as of June 30, 2003 Trends in percent disbursed over life of project In frastru ctu re -<>---Current Disb Trend ---{J-- Notional Trend to ensure 100% disb 100 80 / • t 100 '"d ~ I • 80 " il 60 I '"d ;;::; " 40 I I ~ " ~ 60 " e " 0.. 20 • _/ I J I #. 40 20 0 _/. • I 0 Years 0 2 3 4 5 6 7 9 0 2 3 4 5 6 7 8 Age (yrs) India Country Portfolio Performance Review FY03 Page43 TRANSPORT FY03 Bankwide Basic Data· FY03 Performance Indicators FY03 FY04 est Average Net commitments ($b) 3.9 No. of problem projects 0 0 16 No. ofprojec:ts 10 Projects at risk(%) 0% 10% 14% Undisbursed Balance ($b) 3.2 Net commitments at risk(%) 0% 14% 12% Net comm. as% oflndia portfolio 30% Disbursement ratio 11% 13% 21% % commitments ;:::5 yrs 9% Proactivity na na 81% % commitments "?::.7 yrs 0% Average age ofprojects (yrs) 2.0 For projects approved during FY00-03 (7 projects) Average Min Max Preparation time (mths) 24 11 37 Total disbursement in first two yrs (%) 12% 7% 16% Notes: 1. n.a.: not available. 2. For detailed project-wise information, please refer to Annex 9. 3. Information on loan amount committed but not yet disbursed is not available. Key issues Draft Action Plan for FY04 (To Be Developed with Gol) Four slow disbursing projects, with Update procurement, commitments and disbursements schedules by ® undisbursed balance of $1.5 billion "' March2004 <§I One project more than 5 years old with <§I Monitor contacts under implementation, and improve funds flow $60 m undisbursed (2% of sector total) 19 Portfolio reviews with focus on slow starting projects by February 2004 Overview of Transport Portfolio Trends in Disbursement Ratio and Commitments at risk 0 Total net connnitments 0 New Connnitments in FY % --0- Percent disbursed -a- Percent Commitments at risk US$ M 0 Total undisbursed balance E:l Disbursements in FY 30,----------------------------------, 4,000 ·-----------·--------·----------------------.- ------ -------· ::~0 3,000 2,000 r-,--- 1- - 1,000 - - ~ - In trL i[ •. 0 bE:! ........ 'iiii1 0+-----.-----~~J--,---J---,--Q-~ FY99 FYOO FYOl FY02 FY03 FY99 FYOO FYOl FY02 FY03 Pe1rcent disbursed as of June 30, 2003 Trends in percent disbursed over life of project Transport ~"---Current Disb Trend -e-- Notional Trend to ensure I 00% disb 100 ;;'~ 100 / " ., 80 .,7 80 r/ / z/ ~ il :a :;j 60 + - - - - - - - - - / 1 , _ · · - - - - - - - - - - - - j l /! ., 0) ... "' ;::! 60 / ./ "" " 40 +---------;r-·----------------~ -£l :a 40 ~ 5 ~ "':)-' ~ :oR 0 20 20 ~~ ~~ 0 0 ~ ' 0 2 3 4 5 6 7 Years Age (yrs) 0 2 3 4 5 6 7 India Count1y Portfolio Performance Review FY03 Page 44 RURAL DEVELOPMENT (Includes irrigation, agriculture, forestry, sustainable natural resources and poverty focused development of rural areas; several projects rely on community driven development initiatives.) FY03 Bankwide Basic Data FY03 Performance Indicators FY03 FY04 est Average Net commitments ($b) 3.0 No. of problem projects 2 2 26 No. ofprojects 22 Projects at risk(%) 9% 18% 13% Undisbursed Balance ($b) 1.7 Net commitments at risk(%) 7% 14% 13% Net comm. as% of India portfolio 23% Disbursement ratio 20% 18% 21% % commitments ~5 yrs 50% Pro activity 100% 100% 96% % commitments ~7 yrs 26% Average age of projects (yrs) 4.1 For projects approved during FY00-03 (9 projects) Average Min Max Preparation time (mths) 17 11 24 Total disbursement in first two yrs (%) 4% 3% 7% Notes: 1. n.a.: not available. 2. For detailed proJect-wise mformatwn, please refer to Annex 9. 3. Information on loan amount committed but not yet disbursed is not available. Key issues Draft Action Plan for FY04 (To Be Developed with Gol) @ 6 slow disbursing projects with $572 m undisbursed "' Improve readiness for implementation, including, where @ 7 projects closing in FY04 with $182 m undisbursed possible piloting during project preparation of CDD projects 10 projects more than 5 years old with $336m Sector portfolio review and Action Plan by Dec 2003 (J "' undisbursed e Update procurement, commitments and disbursements (J Two problem projects schedules by March 2004 0 Improve funds flow, especially for CDD projects Overview of Rural Development Portfolio Trends in Disbursement Ratio and Commitments at risk Iii! Total net commitments 0 New Commitments in FY % -<>-Percent disbursed -o- Percent Commitments at risk rn Total undisbursed balance .0 Disbursements in FY $m 40,------------------------------------. 3,000 '•- 30 " 2,000 " ':-: ''.i ':"' c 1,000 rr i.J; - - - - --- -~~ --- - ~t- ~~ ' <: ,~ "' ~ ,f- ..,h 0 t~" l f- n "f:c- I .. a~ I FY99 FYOO FYO! FY02 FY03 FY99 FYOO FYOl FY02 FY03 Percent disbursed as of June 30, 2003 Trends :in percent disbursed over life of project Rural Development -v..,_ Current Disb Trend - B - Notional Trend to ensure 100% disb 100,---------~------------. if~ 100 #? 80 + - - - - - - - - - - - / - - - - · < > - - - - - - - 1 ] I ¢ ~ ~ ¢ ¢~ 80 ., ~ "0 ;; 60 / ,,_'- - ' > ' - - - - - ; o - - - - - - - - - - l I • • " ~ 60 -~~ .// ------j ~40+---------.~/_ _ _ _ _ _ _ _ _ _ _ __, {;5 :a 40 ---~~~· ------~ ~-/~--------------~ d! / ;F. 20 +----/--/----'o'---------------1 20 i' 0~" ~ 0 0 2 4 Age (yrs) 5 6 7 0 2 3 4 Years 5 6 7 8 India Country Portfolio Performance Review FY03 Page 45 PREM Four quick disbursing structural adjustment loans worth $750 million have been granted in the period FY00-03. These are not included here. FY03 Bankwide Basic Data FY03 Performance Indicators FY03 FY04 est Average Net commitments ($m) 588 No. ofproblemprojects 0 0 21 No. ofprojec:ts 2 Projects at risk(%) 0 0 21% Undisbursed Balance ($111) 237 Net commitments at risk(%) 0 0 23% Net cornrn. as % oflndia portfolio 5% Disbursement ratio 19% 15% 15% % commitments ;;:::5 yrs 92% Proactivity na na 80% %commitments ;;:::7 yrs 0 Average age of projects (yrs) 4.1 For projects approved during FY00-03 1 project) Average Min Max Preparation time (mths) 11 na na Total disbursement in first two yrs (%) 9% na na Notes: 1. n.a.: not available. 2. For detailed project-wise information, please refer to Annex 9. 3. Information on loan amount committed but not yet disbursed is not available. Keyissues Draft Action Plan for FY04 E (To Be Developed with Goi) Both projects are slow disbursing. • Restructure projects by January 2004 One project will close this year and has an undisbursed balance of $196 million Overview of the PREM Portfolio Trends in Disbursement Ratio % Percent disbursed $m 1!3 Total Net Connnitments D New Connnitments in FY 30 ------· Cil Total Undisb balance DDisbinFY 600.--------~----~;-----~~--~~---. 20 10 ( ~~ "¢ 0 FY99 FYOO FYOl FY02 FY03 FY99 FYOO FYOI FY02 FY03 Perctmt disbursed as of June 30 2003 PREM 100 100 -·----·-------------------·----~~-----l Notional Disb Trend to achieve 100% disbursements / 80 ""' 80 {" I /if &l ~ 60 ""' ~ ;::l 60 ~ il ""' ~ 40 "" ,_ " " c... 40 ~ 20 20 0 Years 0 2 3 4 5 6 0 2 3 4 5 6 Age (yrs) India Country Portfolio Performance Review FY03 Page46 ENVIRONMENT AND SOCIAL DEVELOPMENT Two of the four projects are longer duration projects- one is for ten years and the second for fifteen years. FY03 Bankwide Basic Data FY03 Performance Indicators FY03 FY04 est Average Net commitments ($m) 197 No. ofproblemprojects 0 0 21 No. ofprojects 4 Projects at risk(%) 0 0% 11% Undisbursed Balance ($m) 80 !Net commitments at risk(%) 0 0% 15% Net cormn. as% of India portfolio 2% Disbursement ratio 24% 29% 22% % commitments :::::5 yrs 57% Proactivity na na 82% %commitments :::::7 yrs 25% Average age of projects (yrs) 6.0 For projects approved during FY00-03 11 project) Average Min Max Preparation time (mths) 16 na na Total disbursement in first two yrs (%) 35% na na Notes: 1. n.a.: not available. 2. For detailed proJect-wise mformatwn, please refer to Almex 9. 3. Informatlon on loan amount committed but not yet disbursed is not available. Key issues Draft Action Plan for FY04 (To Be Developed with Gol) • Two slow disbursing projects, which will close in FY04, • Restructuring I reallocation to improve with an undisbursed balance of about $15 million disbursements Overview of the ES Portfolio Trends in Disbursement Ratio and Commitments at risk $m !ill Total Net Commitments Cl New Commitments in FY [J Total Undisb balance D Disb in FY %-<>-Percent disbursed --e~- Percent Corrnnitments at risk 450 50,---------·--------------------------~ J 40+---~~----------------------------~ [' 300 ,, li 30+----------=-~~~~-----~~--------~ I~' t"",: 20+-----------------~~------~-----~ 150 F~ l~n 10+-------------~~------~------------4 FY99 h ""J ' .<' FYOO '--, FYOJ ,, FY02 l FY03 l 0+------.------.------.--~--,-~~~ FY99 FYOO FY01 FY02 FY03 Percent disbursed as of June 30, 2003 Trends in percent disbursed over life of project Social Development and Environment 100 100 Notional Disb Trend to achieve 100% disbursements/ 80 "" " ~ ;:; 80 60 +-----------~-----------------------·--! i ;>('/' / il :a / ;: 40 I " ... u "'" "' 20 /' 20 ~ 0 ~ Years 0 2 3 4 5 6 2 3 4 5 6 7 8 9 Age (yrs) India Country Portfolio Performance Review FY03 Page 47 Annex 16. Portfolio definitions Active Portfolio: All ongoing IBRD/IDA, Montreal Protocol, GEF (not including GEF medium-size), and Special Financing operations in the portfolio at the end of the fiscal year. Actual Problem Projects: Projects for which Implementation Progress is unsatisfactory and/or the Development Objectives are not likely to be achieved. Commitments at risk: Commitments at risk of not meeting their development objectives. Includes commitments associated with both actual and potential problem projects. Closed Projects: Projects that have exited the portfolio in the fiscal year. Development Objectives (DO): The rating of an operation's DO is based on the likelihood of attaining the development objectives set in the Project Appraisal Document or as formally revised during implementation. This rating may be satisfactory or unsatisfactory. The DO rating takes into account the implementation progress, and other factors such as inappropriate design, unforeseeable adverse economic and financial developments, price fluctuations of project outputs, and changes in government policy. Disbursement Ratio: The ratio of disbursements during the fiscal year to the undisbursed balance at the beginning of the fiscal year, investment loans only (Note: Structural adjustment loans not included). Implementation Progress (IP): The IP rating is based on an overall judgment of implementation performance in relation to the benchmarks in the Project Appraisal Document or as formally revised during implementation. Net Disconnect: The difference between the percentage of projects rated as unsatisfactory by OED and the percentage rated by the regions in the final PSR as unsatisfactory for achieving their development objectives. Potential Problem Projects: Projects which are rated satisfactory on IP and DO but have three or more risk flags. Proactivity Index: The proportion of projects rated as actual problem projects twelve months earlier that have been upgraded, restructured, suspended, closed, partially or fully canceled, or have a Board-approved transition strategy. Projects at Risk: Projects at risk of not meeting their development objectives. Includes both actual problem projects and potential problem projects Realism Index: The ratio of actual problem projects to total projects at risk. There are nine project-specific risk flags: I. Financial Management Appropriateness of arrangements for financial planning, budgeting, funds flow/ disbursement arrangements, internal control, accounting, financial reporting, and auditing. 2. Financial Performance Sufficient funding available to PIU on timely basis for successful implementation, meeting of acceptable financial performance targets by PIU, and for revenue-earning entities, compliance with fmancial covenants of the legal agreements. (Note: Bank's standard requirements on financial management and auditing covered under "other legal covenants.") 3. Project Management Availability of qualified management with the necessary authority to implement project. Includes management of physical construction or the PIU, implementation ofbroad policy or institutional changes, or the managerial environment. India Country Portfolio Performance Review FY03 Page48 4. Procurement Progress Performance ofborrowerlimplementing agency in carrying out efficient Bank-financed procurement, and how it affects speed of implementation. Includes compliance with agreed procurement schedules and quality I reliability of procurement administration. (Note: Compliance with procurement requirements of the loan agreement is covered under "other legal covenants.") 5. Monitoring and Evaluation (M&E) Measure of whether an appropriate M&E system is in place, is being used by the Bank and borrower, and the Bank is focusing on the development objective (outcomes) in PSR reporting, where possible. 6. Effectiveness Delays Elapsed time between Board approval and effectiveness of more than nine months for investment and more than three months for adjustment and emergency reconstruction operations (flag turned off three years after Board approval) 7. Disbursement Delays Disbursement delays of 24 months or more for investment operations or 6 months or more for adjustment and emergency operations. Delay is calculated based on the initial or formally revised disbursement schedule for the project. 8. Safeguard Management Performance Rating Implementation of the agreed safeguards mitigation I development plans. 9. Other Legal Covenants Compliance ofborrowerlimplementing agency with the legal covenants (excluding financial covenants which are rated separately), including supplemental letters, taking into account the understandings with the borrower as set out in the minutes of negotiations. India Country Portfolio Performance Review FY03 Page49 For further information cotttact; The Worlo Bank Estate 701 Looi New Delhi - rro 00)1 InDia Te( : +91 II .246194-91 :falX' : +9I II .24(}19)9) Internet.: www.worfobank.org.in