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P000336
December 15, 2022

Sovereign-backed Financing

Project Document
of the Asian Infrastructure Investment Bank

P000336 Republic of India

Chennai Peripheral Ring Road Sections II & III Project
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Currency Equivalents

(As at date, December 15, 2022)

Currency Unit – Indian Rupee (INR)

INR1.00 = USD0.0121
USD1.00 = INR82.80

Borrower’s Fiscal year

April 1 – March 31

Abbreviations

AADT Annual Average Daily Traffic

AIIB (or the Bank) A
Asian Infrastructure Investment Bank
CAAA Controller of Aid Accounts and Audit
CMP Comprehensive Mobility Plan
CPRR Chennai Peripheral Ring Road
CSC Construction Supervision Consultant
DFIL Disbursement and Financial Information Letter
DPR Detailed Project Report
E&S Environmental and Social
EIA Environmental Impact Assessment
EIRR Economic Internal Rate of Return
EMP Environmental Management Plan
EPC Engineering-Procurement-Construction
ESP Environmental and Social Policy
ESSs Environmental and Social Standards
GAP Gender Action Plan
GBV Gender-based Violence
GESI Gender Equality and Social Inclusion
GDP Gross Domestic Product
GHG Greenhouse Gas
GoI Government of India
GoTN Government of Tamil Nadu
GRM Grievance Redress Mechanism
HMPD Highways and Minor Ports Department
INR Indian Rupee
IRC Indian Roads Congress
IUFRs Interim Unaudited Financial Reports
JICA Japan International Cooperation Agency
km Kilometer
km2 Square kilometer
LARR Land Acquisition, Rehabilitation & Resettlement
MDB Multilateral Development Bank
NH National Highway
OPEC Fund OPEC Fund for International Development
p.a. per annum
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PAP Project Affected People

PDS Project Delivery Strategy
PIR Procurement Instructions for Recipients
PIU Project Implementation Unit
PMC Project Management Consultant
PMU Project Management Unit
PPM Project-affected People’s Mechanism
RP Resettlement Plan
RPF Resettlement Planning Framework
SEA Sexual Exploitation and Abuse
SIA Social Impact Assessment
SOE Statement of Expenditures
TNHD Tamil Nadu Highways Department
TNRIDC Tamil Nadu Road Infrastructure Development Corporation
USD United States Dollar
VOC Vehicle Operating Cost
VOT Value of Travel Time

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CONTENTS
1. SUMMARY SHEET ............................................................................................... V
2. PROJECT DESCRIPTION ..................................................................................... 1
A. Project Overview ............................................................................................. 1
B. Rationale ......................................................................................................... 2
C. Components .................................................................................................... 3
D. Cost and Financing Plan ................................................................................. 5
E. Implementation Arrangements......................................................................... 6
3. PROJECT ASSESSMENT ..................................................................................... 9
A. Technical ......................................................................................................... 9
B. Economic and Financial Analysis .................................................................. 10
C. Fiduciary and Governance ............................................................................ 11
D. Environmental and Social .............................................................................. 13
E. Risks and Mitigation Measures ...................................................................... 17
Annex 1: Results Monitoring Framework .................................................................... 21
Annex 2: Detailed Project Description ........................................................................ 23
Annex 3: Economic and Financial Analysis ................................................................ 27
Annex 4: Member and Sector Context ........................................................................ 35
Annex 5: Sovereign Credit Fact Sheet ........................................................................ 37
Annex 6: Gender, Social Inclusion, Gender-Based Violence ...................................... 40

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1. SUMMARY SHEET

Project No. PD000336

Project Name Chennai Peripheral Ring Road Sections II & III
Project
AIIB Member India
Borrower Republic of India
Project Implementation Entity State of Tamil Nadu and Tamil Nadu Road
Infrastructure Development Corporation (TNRIDC)
Sector Transport
Subsector Road
Project Objective To improve connectivity and road safety in the
Chennai Metropolitan Area.
Implementation Period Start Date: January 2023
End Date: December 2028
Expected Loan Closing Date April 2029
Cost and Financing Plan Project Cost: USD1,003 million
Financing Plan:
AIIB Loan: USD378 million (38%)
OPEC Fund Loan: USD100 million (10%)
Government of Tamil Nadu: USD525 million (52%)
Size and Terms of AIIB Loan USD378 million
Terms: Final maturity of 19 years, including a
grace period of 5 years, at AIIB’s standard interest
rate for sovereign-backed loans.
Co-financing (Size and Terms) OPEC Fund: USD100 million
Environmental and Social A
Category
Risk (Low/Medium/High) High
Conditions of Effectiveness a. Execution of the Co-financing Agreement on
behalf of the Co-financier and the Borrower, and
all conditions precedent to its effectiveness or to
the right of the Borrower to make withdrawals
under it (other than the effectiveness of this Loan
Agreement) have been fulfilled; and
b. Execution of the project Co-financiers’
Agreement between the Bank and the Co-
financier, and all conditions precedent to its
effectiveness (except for the effectiveness of
this Loan Agreement) have been satisfied.
Key Covenants / Conditions Key covenant:
for Disbursement To retain and maintain the Project Management
Consultant, Construction Supervision Consultants,
Land Acquisition and Resettlement Monitoring
Consultant, Independent Third-Party Environmental
& Social Monitoring Consultant throughout the
project.
Conditions for disbursement: No conditions
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Policy Assurance The Vice President, Policy and Strategy, confirms

an overall assurance that AIIB is in compliance
with the policies applicable to the Project.
Economic Capital (Ecap) USD24.6 million (8.19%)
Consumption

President Jin Liqun

Vice President Urjit Patel, Infrastructure Investment Department,
Region 1
Director General Rajat Misra, Infrastructure Investment Department,
Region 1
Team Leader Farhad Ahmed, Sr. Investment Operation
Specialist – Transport
Team Members Siva Rama Krishna Sastry Jyosyula, Senior Social
Development Specialist
Gerardo Pio Parco, Senior Environment Specialist
Abhijit Sen Gupta, Senior Economist
Yogesh Malla, Financial Management Specialist
Liu Yang, Counsel
Chitambala John Sikazwe, Senior Procurement
Specialist
Giacomo Ottolini, Procurement Consultant
Venkatesan Sundaresan, Technical Consultant
Barsha Dharel, Gender, and Social Inclusion
Consultant

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2. PROJECT DESCRIPTION
A. Project Overview

1. Project Objective. The objective of the proposed project is to improve

connectivity and road safety in the Chennai Metropolitan Area.

2. Project Description. The project is a part of the broader Chennai Peripheral

Ring Road (CPRR). The CPRR is conceptualized to provide better connectivity in
Chennai catering to the growing traffic requirements. The project will also provide
connectivity to industrial areas and will enhance port connectivity for commercial
vehicles. The project consists of the construction of a 56.2km six-lane dual carriageway
with two-lane service roads on each side, as well as consulting services and capacity
development.

3. Expected Results. The Results Monitoring Framework is included in Annex 1.

Project Development Objective Indicators are:
a. Travel time. A reduction of approximately half (52 percent) of the travel time
between National Highway (NH)-16 and NH-48; and
b. Traffic accidents. Vehicular accident number is half of the accident number
on comparable roads in the vicinity of CPRR.
The proposed project’s Intermediate Results Indicators are:
(i) Road construction progress. Full construction completion of Sections II and
III in the 4th year of implementation;
(ii) Employment of local laborers. Proportion of local laborers working on different
contract packages reached 20 percent by the third year of implementation;
(iii) Skill training for women. 20 women receiving skill training on different
construction-related skills (e.g., engineering surveys, construction
supervision, heavy construction equipment operation);
(iv) Introduction of workers’ Code of Conduct. All contract packages introduce
a Code of conduct by the third year of implementation; and
(v) Gender safety and equitable access. Conducting audits and the
incorporation of audit recommendation(s) to ensure that project-
constructed infrastructure is gender-sensitive, with equitable, safe, and
accessible features.

4. Expected Beneficiaries. The primary beneficiaries of the project will be the

general population using private and public vehicles, as well as businesses and
commercial cargo traffic. The benefits will arise from a safer, more efficient, and reliable
road network. Indirect benefits will include improved access to economic, social, and
life-enriching facilities and services. Furthermore, the communities along the corridor
are expected to benefit from access to jobs created during the construction and
operation phases of the road. It is expected that the project will promote industrial and
economic growth along the road corridor.

5. Co-financing. The project will be jointly co-financed by the Asian Infrastructure

Investment Bank (AIIB) and the OPEC Fund, with the AIIB being the lead partner. AIIB’s
environmental and social, and procurement policies will be applicable to the project.

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There exists a formal framework agreement between the AIIB and the OPEC Fund. A
draft project-specific co-financing agreement has also been prepared and finalized.
B. Rationale

6. Strategic fit for AIIB. The proposed project aligns with the Bank’s corporate,
transport, and sustainable cities strategies. The project, as part of the overall CPRR
road system, will: (i) enhance the city and regional integration; (ii) facilitate more efficient
domestic and cross-border connectivity through Ennore/Kattupalli ports; and (iii)
facilitate national goods movement through Chennai Port by providing a modern road
network for passenger and goods movements. The project will enhance urban mobility
by reducing congestion, hence reducing Greenhouse Gas (GHG) emissions (Annex 3
provides details). The CPRR project will improve road transport conditions in Chennai
that have been inadequate from traffic demand and road safety perspectives. Apart from
constructing an access-controlled six-lane road, the road sections will contain two
separate service lanes on each side, as well as safe pedestrian and bus infrastructure.

7. Value addition by AIIB. Beyond providing financing, AIIB’s participation has and
will continue to improve project preparation and implementation by (i) leveraging the
project team’s experience in roads and highways design, procurement, and
implementation; and (ii) strengthening the implementing entity’s technical due diligence,
procurement document quality, Environmental and Social (E&S) performance. The AIIB
has been instrumental in mobilizing OPEC Fund’s investment in the project. AIIB’s
financing includes targeted activities for incorporating road safety into the design with
further capacity building through training. The AIIB has made substantive contributions
to the Engineering-Procurement-Construction (EPC) procurement documentation, E&S
practices, and requirements, and facilitated the implementation of further public
consultation and the Grievance Redress Mechanism (GRM) processes.

8. Value addition to AIIB. AIIB’s participation in the project will (i) enhance its
experience in financing complex urban road projects; (ii) support future opportunities to
finance high-demand urban, phased, highway projects in India and the region; (iii)
promote working with OPEC Fund to facilitate future co-financing opportunities; and (iv)
enhance AIIB’s experience as the lead financier. Also, the project plans to pilot the use
of a combination of traditional and non-traditional ICT-based approaches in project
monitoring (see 2 (E), Monitoring and Evaluation section for details), which is expected
to shape future monitoring approaches to AIIB projects.
9. Lessons learnt. In the course of the project design, the Bank team has identified
several lessons from on-going transport sector projects in India and South Asia, as well
as some relevant lessons from projects supported by other financiers (mainly the World
Bank). They were taken into consideration while designing the project. The lessons
include:
a. Optimal design and construction risk sharing with contractors. The public sector
faces design and construction risks in infrastructure projects, in general. To
mitigate against them, the best strategy is the optimal sharing of these risks with
the contractors/developers. The project effected this strategy by the use of EPC
contracting approach, which shifts that design and construction risks to the
contractors;

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b. Investment Sustainability. The physical and financial sustainability is the key for
deriving maximum investment benefits. Again, the use of EPC contract approach
with 7-year post-construction maintenance period, funded by the Government of
Tamil Nadu (GoTN), in the proposed project, will enhance the investment
sustainability;
c. Optimum loan approval timing. Several AIIB projects in the region have been
suffering due to the premature loan approval, especially due to the non-availability
of adequate land so that the contractors can be mobilized. Also, often the
procurement related preparedness is sub-optimal. These have also been major
factors for slow loan disbursements. In the proposed project, it has been agreed
with the Government of India (GoI) that the negotiations can only take place after
the acquisition of a half of the required land area and the procurement of three-
tenths of the number of contracts. The project negotiations were postponed until
these conditions are met;
d. E&S risk mitigation. Experience from the ongoing Chennai Metro Rail Phase 2 -
Corridor 4 (L03101A) shows that the Engement of an independent third-party E&S
monitoring consultants is helpful in mitigating E&S (especially land acquisition and
resettlement related risks). The proposed project is a high risk one. Therefore, a
provision has been made to engage such consultants during the full
implementation period. The GoTN will finance such consultants. The consultants
will assist PMU/PIU in the implementation of E&S management plans. Risks will
be further migitated with the engagement of a gender equality and social inclusion
(GESI) specialist by the AIIB, as part of its implementation support; and
e. SEA related risk mitigation and Gender. Road projects are characteristically risky
from sexual exploitation and abuse (SEA) perspective. This is due to the presence
of huge number of migrant laborers at construction sites. This has been observed
in projects all over the world implemented by different financiers. The proposed
project has assessed these risks and mitigation measures are incorporated in the
project design. Also, measures are included in the project design to have a positive
impact on advancing gender equality and empowerment of women.
C. Components
10. Scope. The AIIB and the OPEC Fund will fund Section II (26.1km) and Section
III (30.1km) of the CPRR among five sections (total length - approximately 133km) of
the CPRR. Each section is planned as a six-lane, access-controlled dual carriageway
with two-lane service roads on each side of the main carriageway. The carriageway
design allows for the future addition of another lane in each direction in the median.
Section III connects to the already operating Section IV (23.8km). Among the remainder
sections, while Section I (25.4km) is being financed by JICA, it is understood that the
GoTN has also secured JICA funding for Section V (approximately 27.5km). Going
forward, the GoTN plans to improve the whole length of the CPRR to a standard of the
proposed project. Although Section IV is already in operating condition, it will require
some upgrading to bring it to the full CPRR standards. The GoTN plans to toll the entire
CPRR corridor (Sections I to V). Therefore, the proposed project includes the
construction of toll plazas: the AIIB will finance one toll plaza in each section (Sections
II and III). However, the tolling systems and operations will be designed and
implemented separately. Therefore, they are not a part of this project financing. The

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tolling will be undertaken and managed by the Highways and Minor Ports Department
(HMPD). While Table 1 provides CPRR project intervention details, Annex 2 provides
detailed project descriptions.
Table 1: Project Physical Characteristics and Intervention Details
Alignment Characteristics Section II Section III Total
Land Acquisition (hectare) 186 234 420
(private/ government) (158/28) (156/78) (314/106)
Length (km) 26.1 30.1 56.2
Right of way width (m) 60
Main Carriageway Lanes 3 x 3.5m lanes in each direction + paved
shoulder
Central Median (m) 8.5m (allows for future widening)
Service Road 2 x 3.5m lanes on each side and bi-directional
Pedestrian Pathway / Utility One each side, 3m wide each
Corridor
Width of the carriageway at 14m in each direction
structures
Interchange (at NH-4 and NH-205) 0 2 2
Vehicular Underpass (VUP) 4 6 10
Light Vehicular Underpass (LVUP) 8 5 13
Railway Overpass Bridge 0 1 1
Major Bridge 2 2 4
Minor Bridge 7 7 14
Culverts 105 109 214
Combined Exit/ Entry Ramps 4 3 7
Bus Bays/ Shelters (service roads) 24 19 43
Toll Plaza 1 1 2
Rest Areas 1 1 2
Pavement Type Asphalt Concrete

11. Components financed by AIIB and OPEC Fund. The following provides the
details of the components. It is to be noted that the OPEC Fund will only co-finance
Component A.
a. Component A – Civil Works Construction: (AIIB and OPEC Fund co-financing)
a. Section II (26.1km) – Connects to Section I (JICA-funded; civil works ongoing) at
Thatchur on National Highway 16 (old NH-5), and Section III at the start of
Thiruvallur Bypass. The entire Section II is on a new greenfield alignment.
Section II comprises two tender packages: EPC-01 (13.3km) and EPC-02
(12.8km). EPC-01 and 02 have already been awarded and implementation
commenced. Both packages have a seven-year post-construction maintenance
period.
b. Section III (30.1km) – Connects to Section II at Thiruvallur Bypass and to Section
IV (Section IV is already operational) at Sriperumbudur on National Highway 48

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(Old NH-4). Approximately 9.6km of Section III consists of improving the existing
State Highway 57 (SH-57) to six lanes, with the balance of Section III on a
greenfield alignment. Section III is divided into three EPC packages: EPC-03
(10.4km), EPC-04 (10.0km), and EPC-05 (9.7km). EPC-03, -04 and -05 are
being procured. Each contract includes a seven-year post-construction
maintenance period.
b. Component B – Consulting Services and Capacity Development: (AIIB financing)
a. Project Management Consultant (PMC) – This consultancy comprises tasks
linked to overall project management, technical overview, and overall monitoring
(technical, progress, and financial), tracking, and reporting. It will also report on
overall project expenditures, including various consultancies. The PMC will also
have roles in training and capacity building, especially in areas of project
management, highway engineering, highway operations and maintenance,
environmental and social monitoring, and road safety areas. Additionally, the
consultant will have expertise in road safety and training to support the Tamil
Nadu Highways Department (TNHD). The PMC already commenced.
b. Construction Supervision Consultants (CSCs) – Each section (sections II and III)
will have a separate CSC. The CSC’s role will be to review contractor’s
submissions (as the project is using an EPC procurement method that requires
contractors to provide the designs), monitor construction progress, quality
assurance, and review progress reports during implementation and a one-year
post-construction period. Each CSC will have a road safety specialist to ensure
that the EPC designs submitted include road safety measures that adequately
mitigate road safety risks. The scope of work for this role includes E&S expertise.
While the CSC for Section II is already on-board, the CSC for Section III is being
procured. The AIIB has already reviewed the request for proposal (RfP) and
provided clearance to a consultant shortlist.
c. Land Acquisition, Rehabilitation & Resettlement Action Plan Monitoring
Consultant (LARRMC) – This consultancy has already been procured, which will
support the Project Management Unit (PMU) and the Project Implementation
Unit (PIU) in monitoring and evaluation of all stages of land acquisition,
rehabilitation & resettlement action plan Implementation process.
D. Cost and Financing Plan

12. The indicative project cost and financing plan are presented below (Table 2). It
is to be noted that, AIIB and OPEC Financing figures are exclusive of taxes, which will
be borne by the GoTN.
Table 2: Indicative Project Cost and Financing Plan
(Numbers and percentages are rounded to the extent possible)

Item Project Cost Financing (USD million )

(USD million) AIIB OPEC Fund GoTN
Component A: Civil 572.4 372.075 (65%) 100 (17.5%) 100.34 (17.5%)
Works
Component B: 5.0 5.0 (100%) 0 (0%) 0 (0%)
Consulting Services and
Capacity Development
Sub-Total 577.4 377.055 (64.7%) 100.0 (17.1%) 105.945 (18.2%)
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Item Project Cost Financing (USD million )

(USD million) AIIB OPEC Fund GoTN

Land Acquisition and 270.0 0 (0%) 0 (0%) 270.0 (100%)

Resettlement
Other Expenses (e.g. 155.0 0 (0%) 0 (0%) 155.0 (100%)
Taxes, Charges, etc.)
Front-end Fee 0.945 0.945 0 0
Total 1,003.3 378 (38%) 100 (10%) 525.3 (52%)
E. Implementation Arrangements

13. Implementation period. The land acquisition process is well underway. Almost
three-fourths (72 percent) of the land are already available. The land required for EPC-
01 is now fully available. The proportion of the land acquired to land required figures for
EPC-02 is roughly 81 percent. The land acquisition for EPC-01 and -02 is expected to
be fully completed by end-December 2022. The land acquisition progress for the
remaining contract packages, as of end-November, 2022, are: EPC-03 (72 percent),
EPC-04 (34 percent), and EPC-05 (60 percent). Construction is expected to take roughly
three years and the contract implementation period will be between early-2023 to end-
2025.
14. Implementation Management. The TNHD and the implementing agency are
experienced in CPRR implementation given that they have already undertaken and
completed CPRR Section IV and are presently implementing Section I with support from
JICA. Figure 1 provides the proposed project management and implementation
arrangement and roles.

Figure 1: Project Implementation Arrangement

15. In addition to the consultancies financed by the AIIB under Component B, the
following consultancies are to be financed by the TNRIDC.

a. Land Acquisition Implementation Consultants – A consultancy has been hired

and is working on the implementation of the acquisition process;

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b. Independent Third-Party Environmental and Social Monitoring Consultants –The

Bank requires that the client retains and finances suitably qualified and
experienced third-party consultants, funded by the client, for the implementation
period. This requirement is for projects with high E&S risks and impacts. The
consultancy will assist PMU/PIU in the implementation and monitoring of
environmental and social management plans, at all implementation stages.

16. Procurement. Procurement has commenced in accordance with Bank’s

Procurement Policy (January 2016), and Section II of Interim Operational Directives:
Procurement Instructions for Recipients (PIR), June 2016. The procurement of works
and services is following International Open Competitive Tender (IOCT) and National
Competitive Tender (NCT) as set out in paragraphs 10.1 and 10.4 of AIIB’s PIR, using
the Government of Tamil Nadu’s e-tendering platform
(www.tntenders.gov.in/nicgep/app).

17. Financial Management. The TNHD will be responsible for the overall project
financial management. A PMU has been established at the TNHD with adequate staff
for overall project coordination, monitoring, and reporting. The unit will be assisted by
the PMC. The project will be implemented by the TNRIDC (PIU) and staffed with
adequate technical, administrative, and finance/accounting staff. In the annual GoTN
budget, a separate budget head will be provided for this project. To the extent possible,
the project will align its planning, budgeting, accounting, funds flow, and audit
arrangements with the GoTN’s system. A Financial Management Manual has been
developed by the TNHD and reviewed by the AIIB. The manual outlines project’s
financial management arrangements including the roles and responsibilities of the PMU
and the PIU. The AIIB has assessed the financial management capacity of the THND
and the TNRIDC. The assessment has concluded that FM capacity of these two entities
is adequate and the related risks are manageable (see Section 3(C) - Fiduciary and
Governance).
18. The PMU will consolidate and submit Interim Unaudited Financial Reports
(IUFRs) within 45 days from the end of each fiscal quarter. The external audit report for
each year of project implementation will be submitted within nine months from the fiscal
year-end. The project financial statements will be audited by an independent auditor
based on terms of reference acceptable to the AIIB.
19. All payments related to the project are to be pre-financed by the GoTN. The
TNHD will release periodic funds based on the budget allocation to a specific bank
account of the PIU (TNRIDC) for government counterpart and co-financing portions. The
PMU will prepare a consolidated statement of expenditures (SOE) based on actual
eligible expenditures paid. The PMU will submit withdrawal claims through the Controller
of Aid Accounts and Audit (CAAA) to the AIIB. The AIIB and the OPEC Fund will review
and disburse respectively as reimbursements to the government treasury (Government
of India - GoI) for eligible expenditures under their co-financing arrangements. The
Disbursement and Financial Information Letter (DFIL) details the authorized signatories,
processes of submitting claims, and other terms and conditions of disbursements related
to the project.

20. Monitoring and Evaluation. The PMU and PIU are in place for project
implementation and monitoring. Furthermore, they will be assisted by the PMC and

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CSCs. The PMC’s and CSC’s Terms of Reference (ToR) collectively include, amongst
others: setting up a project and quality management system; reviewing and updating the
Resettlement Plans (RPs); conducting project social audits and assisting the TNRIDC
to implement the Gender Action Plan (GAP); monitoring the implementation of the
Environmental Management Plan (EMP); monitoring and reporting on the project
Results Monitoring Framework; conducting road safety audits; providing on-the-job and
subject-specific (such as road safety audits) training to TNHD staff; monitoring the
maintenance period for one year after completion of construction (subsequent
monitoring will be performed by TNHD staff), and providing monthly all-encompassing
project reports to the AIIB (and the OPEC Fund).

21. The project will also pilot a monitoring system that will use a combination of
traditional and non-traditional ICT monitoring tools The CSCs are expected to assist the
project in this endeavor. Currently projects progress monitoring typically involves site
visits by project personnel and regular reporting on the progress from project
implementation entity (ies). This project monitoring approach faces several challenges
including its limitations in an unprecedented situation (e.g., COVID-19), which limits the
physical visits by supervision consultants or borrower’s personnel. Furthermore, such
an approach is unsuitable for obtaining real-time information and comprehensive
analysis required for progress and disbursement forecasting. The non-traditional
approach, which aims at technology disruption, uses an entirely new way of getting
things done. The non-traditional methods include the use of geo-enabling construction
site monitoring systems using smartphones or tablets, remote monitoring approaches
(e.g., satellite imagery, drones), and CCTV cameras for real-time monitoring. Such a
non-traditional approach will help address challenges faced by the traditional approach
including facilitating project monitoring when faced with the unprecedented situation that
restricts physical presence at the construction activity sites.
22. The EPC contracts also include requirements regarding project monitoring and
reporting, including developing a quality assurance plan for CSC’s review; EPC designs
(to be vetted by the CSCs); AIIB reserves the right to review and audit the project
progress, procurement, and accounts; monthly and quarterly progress reports (to be
reviewed by CSCs and the PMC); and an environmental management system (also to
be reviewed by the CSCs, and the PMC).

23. AIIB’s Implementation Support. Under normal circumstances, the AIIB is

expected to conduct at least two site visits per year to monitor project progress. The
AIIB has retained a local consultant based in Chennai with extensive highway
engineering and construction experience – including working for other Multilateral
Development Banks (MDBs). This consultant has been working on the project since
Spring 2020 and is intimately familiar with the proposed and other highway projects in
Tamil Nadu. The consultant will continue his services during the implementation period.
AIIB’s implementation support will also include the services of a local environmental and
social specialist and a gender equality and social inclusion (GESI) specialist. These
specialists will help the client in the mitigation of E&S, and gender and sexual
exploitation, and abuse-related risks. The team members are also expected to visit
project sites once the COVID-19 related travel restrictions are eased. The AIIB also
plans to help the TNHD/TNRIDC in piloting a monitoring approach that will combine
traditional monitoring and non-traditional ICT-based tools. Lessons learned from the

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pilot exercise will help fine-tune future monitoring approaches, especially under
circumstances that restrict field travel and on how to make optimum use of the ICT.

3. PROJECT ASSESSMENT

A. Technical

24. Strategic Alignment. The proposed project aligns with the Comprehensive
Mobility Plan (CMP)1 strategies and plans (Annex 4 provides details). The CPRR is one
of the eight CMP identified freight corridors. Furthermore, AIIB is currently supporting or
plans to support another three projects, which are also a part of the CMP proposals.
25. Traffic demand projections. Site-specific traffic surveys were conducted
throughout the corridor based on location, type of traffic, peak hour, average daily traffic,
and then calibrated for annual average daily traffic (AADT). Growth patterns were
projected based on the above along with the application of other data and economic
parameters, which were updated in 2020. Annex 2 includes the traffic data. Traffic
projections indicate that Section II main carriageway could reach capacity with the three
lanes in each direction configuration in about 2041 if measured by a high benchmark
service level (“B”), and similarly Section III could reach capacity in 2029 or 2035 – again
depending on the road service level. The carriageway design allows for the addition of
one lane in each direction. This design feature will help mitigate these future congestion
risks. Other road improvements that are expected in the area, per the five-year plan, will
also help address the additional traffic volumes in the corridor.

26. Project Design. Project alignment is based on a larger study for the overall
CPRR (Sections I to V). The design is based on the Indian Road Congress (IRC)
“Manual of Specification and Standards for Six Laning of Highways Through Public
Private Partnership”, and other applicable specifications of the IRC and GoI’s Ministry
of Road Transport and Highways (MoRT&H). The design, such as for pavement and
laning arrangement, was further developed based on the forecasted type and volume of
traffic. Site geotechnical features are not complicated and do not require unusual
preparation. Except for approximately 9.6km in Section III, which is on an existing road
alignment, the remaining road sections are on a new (greenfield) alignment. The design
accommodates existing utility relocations, non-vehicular traffic, a utility corridor,
illumination, highway safety measures, bus and truck laybys, toll plazas, and
landscaping.
27. As indicated before, the project comprises five (5) EPC contracts (two for
Section II and three for Section III), each with seven-year post-construction
maintenance period. The EPC contract mechanism provides the contractor the
opportunity to implement its own designs, based on the parameters set by the TNHD.
The designs are reviewed and vetted by the TNRIDC and its consultants. This will
provide scope for creativity in design by the contractor. Other methods of procurement
have been explored by TNHD’s general consultants. However, EPC method was
deemed to be the most appropriate in cost and delivery schedule efficiency. This method,
also, shifts the design and construction risks to the contractors.

1 www.cmdachennai.gov.in/pdfs/ComprehensiveMobilityPlan-CMA.pdf
9
 *OFFICIAL USE ONLY

28. Construction. Construction for this project is not complicated and much of the
alignment (except for 9.6km in Section III) is greenfield alignment. Construction for
Sections II and III can progress in a phased manner as land becomes available and
resettlement takes place. TNRIDC has already procured Section II EPCs (EPC-01 and
-02). The EPC-03, -04, and -05 contract packages are being procured. They are
expected to be procured by early-2023. The Bank has already reviewed and concurred
on all three relevant tender documents. The projected three-year construction period is
feasible (including a six-month design period), which generally progresses concurrently
with mobilization and site preparation. The EPC contractors will furnish their own design
and stage the construction accordingly, with reviews by the TNRIDC using consultants.

29. Maintenance Period and Operations. Tamil Nadu state is experienced in

EPC contracts with a seven-year post-construction operation and maintenance period.
The AIIB financing is for the construction phase only. However, the Bank’s review of the
tender documents did consider the adequacy of the maintenance period requirements.
The TNHD is planning to implement tolling at some point of time in the future. This
operation will be separate from the EPC contracts.
30. Operational sustainability. The project will be built to modern highway
standards with adequate maintenance program for the first seven years. The project
team has discussed with the TNHD, the availability of an adequate budget for the
maintenance period and has been assured that it will be accommodated in its annual
budgets. Furthermore, the project is expected to collect tolls in the future, which would
help support the maintenance operations.

B. Economic and Financial Analysis

31. Economic Analysis. The economic viability of the full CPRR corridor (Section I
to V) has been evaluated and the corridor was deemed economically viable with the
Economic Internal Rate of Return (EIRR) and Net Present Value (NPV) are estimated
at 15.65 percent and INR28,695 million (roughly USD380 million), respectively.2 The
economic analysis covers a period of 20 years of operation and compares ‘Without
Project’ and ‘With Project’ scenarios. The economic analysis considered Section II, and
Section III separately, and then Sections II and III combined. The economic cost includes
construction cost, provisional sums, market value of land, resettlement and rehabilitation
(R&R) and utility shifting, and excludes taxes. A salvage value of 20 percent has been
estimated at the end of the benefit period and includes residual values for earthworks,
culverts, bridges, etc. which will have a longer life than the project. The quantifiable
benefits of the project will mainly accrue from vehicle operating cost (VOC) and value of
travel time (VOT) savings, reduction in GHG emissions and road accidents, and savings
in maintenance costs.
32. The EIRR for Section II and Section III are calculated at 19.27 percent and 18.79
percent, respectively. The corresponding NPV values are INR10,389 million (USD139
million) and INR16,215 million (USD216 million). Combining Sections II and III will result
in an EIRR of 18.96 percent and NPV of INR26,603 million (USD355 million). Sensitivity
analyses comprising following scenarios were conducted: (i) cost increase of 15 percent;

2
The EIRR values for different sections of CPRR are: 10.41 percent for Section I, 19.27 percent for Section
II, 18.79 percent for Section III, 32.40 percent for Section 4, and 10.01 percent for Section 5.
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(ii) reduction in benefits by 15 percent; and (iii) project delayed by a year. The analysis
results indicate that the project is economically robust. This means that the project yields
positive NPVs under the aforementioned scenarios, with a 12 percent discount rate.
33. Financial Analysis. A financial analysis notes that the project on its own would
not be financially viable. It is to be noted that the proposed project is a sovereign-backed
financed project.

C. Fiduciary and Governance

34. Procurement. The Bank has conducted a capacity assessment of the project
implementing agency and assessed that the TNRIDC is experienced in implementing
EPC contracts. Furthermore, the TNRIDC is implementing a project financed by the
Asian Development Bank (ADB) 3 utilizing the same procurement and contracting
strategy, as well as Section I of CPRR currently under implementation with funding from
JICA. The TNHD and the TNRIDC are designated as the PMU and PIU, respectively.
35. The AIIB has reviewed the draft Project Delivery Strategy (PDS), which outlines
the procurement arrangements covering tendering and contracting strategies,
procurement plan, capacity assessment, market conditions, potential procurement risks,
and proposed mitigation measures. The Bank has agreed to the draft PDS and has
concurred with its approach, in principle.
36. The project comprises five EPC contracts (two EPCs for Section II, and three
EPCs for Section III) each with a seven-year post-construction maintenance period
included under the contract. The AIIB and OPEC funds will not cover maintenance costs.
The EPC contracts are using a single-stage, two-envelope package using the e-tender
portal: www.tntenders.gov.in/nicgep/app. This e-tender portal is being used for MDB-
financed projects. The use of this portal is expected to enhance procurement efficiency,
economy, and transparency. Out of five EPC contract packages, the TNRIDC has
already procured two packages (EPC-01 and -02) and the remaining three are being
procured. All EPC packages have been, or are being procured following the International
Open Competitive Tender (IOCT) method and all are subject to Bank’s prior reviews.
37. The proposed project will finance three consultancy services. All consulting
services packages have used or have been using Bank’s Standard Request for Proposal
(SRFP) consultants’ selection. While items (a) and (b) below have followed an
International Open Competitive Selection Method, item (c) has followed Local
Competitive Selection. All of them were subjected to Bank’s prior reviews. The
consulting services procurement status is as follows:
a. Project Management Consultant (PMC) – The TNRIDC already hired the PMC.
b. Construction Supervision Consultants (CSC) – The Section II CSC (CSC 1)
has been hired and the hiring process for Section III (CSC 2) has already
started. The Bank has reviewed the Request for Proposal (RFP) and provided
clearance to a list of shortlisted consultants. It will approximately take two more
months to complete the procurement process.
c. Land Acquisition and Resettlement Monitoring Consultant – The TNRIDC has

3 Tamil Nadu Industrial Corridor Project

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already procured the consultants.

38. The Bank has carried out a capacity assessment through several discussions
with the PIU, and local inputs, as well as reviewing and commenting on the TNRIDC
submitted PDS. The project procurement risk is assessed as ‘Moderate’ by the TNRIDC
considering its experience in implementing highway projects using EPC contracts,
current market conditions in Tamil Nadu, and the stable political climate in the state. The
Bank staff has reviewed and concurred with the assessment.

39. Financial Management. The financial management capacity of the TNHD (PMU)
and the TNRIDC (PIU) was assessed focusing on institutional capacity, staffing,
planning/budgeting, funds flow, accounting, internal controls/audit, reporting, and
external oversight. Both organizations have prior experience implementing projects
funded by MDBs and are familiar with MDB financial management requirements. Based
on the financial management assessment, the capacity is considered adequate and the
financial management risk is ‘medium’, with some proposed mitigation measures,
40. The TNHD and the TNRIDC have adequate and experienced finance/accounts
staff. The project will follow GoTN’s planning and budgeting procedures. Based on the
expected project needs and procurement plan, the PIU will provide estimated budgetary
requirements on an annual basis to the PMU for review and consolidation. The approved
project budget will be included in the annual GoTN budget as a separate budget line
item. Once the budget is approved, funds will be released periodically to a separate
bank account of the PIU through the appropriate head of account. The PIU will be mainly
responsible for implementing the project and managing project-related payments. On a
periodic basis, the PIU will report to the PMU on funds utilization. All project payments
are to be pre-financed from GoTN’s sources. Once payments are made against eligible
expenditures, the PMU will prepare a consolidated statement of expenditures (SOEs)
based on co-financing arrangements. The PMU will submit through the CAAA
withdrawal claims along with SOEs to the AIIB. The AIIB and OPEC Fund will review
and reimburse the GoI treasury for eligible expenditures under the co-financing
arrangements.
41. The PMU and PIU will follow their respective applicable basis of accounting.
They will maintain a separate project account and have custody of the supporting
documents. The PIU will prepare a periodic financial report and submit to the PMU on a
timely basis. The PMU will consolidate and submit Interim Unaudited Financial Reports
(IUFRs) quarterly to the AIIB within 45 days from the end of each fiscal quarter. The
format and reporting content of IUFRs will be as agreed with the AIIB.
42. The existing internal control process and procedures of the TNHD (PMU) and
the TNRIDC (PIU) will be applicable to the project. The internal audit for the project will
be carried out following existing internal audit arrangements of the TNHD and the report
will be shared with the AIIB. The PIU internal audit will be conducted quarterly by a
chartered accountant firm hired by the PIU and the report will be shared with the AIIB
through the PMU.
43. The project financial statements including the SOE will be audited by an
independent auditor based on qualifications and terms of reference, acceptable to the
AIIB. The external audit report for each year of project implementation that includes an
audit opinion and management letter will be submitted to the AIIB within nine months

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from the end of each fiscal year.

44. Disbursements. The loan will adopt reimbursement method of disbursement.

GoTN will provide an adequate budget for its own counterpart and co-financiers share
as per the financing agreements. The GoTN will pre-finance payments of eligible
expenditures and then the PMU will prepare SOEs for co-financiers’ part of eligible
expenditures and submit withdrawal application(s) through the CAAA. Upon receipt of
the withdrawal claim, the AIIB will review and make disbursement to the GoI’s
appropriate account for AIIB’s share of eligible expenditure. Based on the AIIB’s review
of withdrawal claims, the AIIB will advise OPEC Fund to make disbursement for its share
to the GoI’s appropriate account. DFIL details the authorized signatories, process for
submitting claims, and other terms and conditions of disbursements.

45. Governance and Anti-corruption. The AIIB is committed to preventing fraud

and corruption in the projects it finances and will ensure compliance with AIIB’s Policy
on Prohibited Practices (2016). Implementation will be monitored regularly by the AIIB
staff. The AIIB reserves the right to investigate, directly or indirectly through its agents,
any alleged corrupt, fraudulent, collusive, coercive, or obstructive practices, misuse of
resources, and theft or coercive practices relating to the project and to take necessary
measures to prevent and redress any issues in a timely manner. Detailed requirements
will be specified in the Loan Agreement and the project tender documents. The AIIB has
and will continue monitoring the work related to tender document preparation and
tender/proposal evaluation under the AIIB financing.
46. Institutional Capacity. The TNHD has experience in implementing donor-
funded programs (including the World Bank, the ADB, and JICA). The TNHD has in
place a PMU, and the PIU has been operational at the TNRIDC. Along with the
institutional structure in place, assistance will also come from specialist consultants as
noted earlier. The scope and terms of reference for the consultants have been reviewed
by the AIIB. A PDS has been developed by the TNRIDC with AIIB staff input.

D. Environmental and Social

47. Environmental and Social Policy (including Standards) and

Categorization. AIIB’s Environmental and Social Policy (ESP), including the
Environment and Social Standards (ESSs) and the Environmental and Social Exclusion
List, will apply to this project. ESS 1 (Environmental and Social Assessment and
Management) and ESS 2 (Involuntary Resettlement) are applicable to the project. ESS
3 (Indigenous Peoples) is not applicable. The OPEC Fund will follow AIIB’s ESP. The
project has been screened and reviewed in accordance with the ESP and ESSs and is
assigned Category “A”.
48. Instruments. The Environmental Impact Assessment (EIA) accompanied by an
Environmental Management Plan (EMP) has been prepared to address project-related
environmental issues. The Social Impact Assessment/Resettlement Plan (SIA/RP) has
been prepared for Section II. A Resettlement Planning Framework (RPF) has been
prepared for all AIIB-financed components to address issues of compensation for any
physical and economic displacement. An Environmental and Social Due Diligence
accompanied by an Environmental and Social Corrective Action Plan has been prepared
to improve the environmental and social performance of the associated facilities, i.e.,

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Sections I, IV, and V.

49. Environmental Aspects. The project is expected to generate overall socio-
economic benefits in terms of serving the growing transportation demand and reducing
congestion. The anticipated environmental impacts include the removal of trees,
disturbance from construction-related noise, and pollution. Most impacts are expected
to be short-term and limited to the construction phase. Construction-related
environmental impacts can be largely mitigated through appropriate construction
practices accompanied by site-specific mitigation measures. It is estimated that nearly
2,351 trees will be felled and 414 trees will be transplanted. As noted in the EMP,
compensatory forestation will be undertaken at the ratio of 10:1 (ten new trees for every
one felled) – the exact number will be confirmed and recorded during the site clearance
stage. Other adverse impacts of the project will be temporary and reversible during the
construction phase. Such temporary impacts pertain to air pollution, noise, and disposal
of construction wastes, which have been addressed in the EIA. Apart from the
environmental mitigation measures, the EMP includes institutional arrangements and
budget for project implementation and monitoring.
50. Climate Change Risks and Opportunities. The project will take into
consideration the climate change effects of an anticipated continuous increase in
ambient temperature, the intensity of cyclones, storm surges, heavy precipitation events,
and sea-level rise. Adaption measures incorporated in the design include: (i) adoption
of suitable material in construction for temperature increase; (ii) upstream river training
to stabilize channels; (iii) drainage box culverts at required locations; (iv) bridge and
culvert design for peak flows; (v) drainage system strengthening on both sides of the
road; (vi) granular sub-base drainage layer for the full width of the right of way for
effective sub-surface drainage; (vii) bottom of subgrade designed to be 1m above the
existing ground level for greenfield alignment to avoid pavement failure by capillary
action; and (viii) construction of retaining walls on both sides of the road to retain the
embankment. Climate mitigation designs will be built into the technical design with
particular reference to solar lamps and rainwater harvesting along the road.
51. Social Aspects. The proposed project is expected to generate largely positive
social benefits for the local population, including improved travel conditions and road
safety. Additionally, the project will lead to the improvement in road connectivity, e.g., to
ports and the industries in the vicinity of the project. The improved connectivity between
the industries in the region and ports will facilitate more efficient movement of goods.
Furthermore, it will decongest the city due to traffic diversion and reduced travel time.
Improved connectivity to the ports and national highways will stimulate industrial growth
resulting in employment generation.
52. A Resettlement Planning Framework (RPF) consistent with the AIIB ESS 2 (Land
Acquisition and Involuntary Resettlement) has been prepared, and disclosed. The RPF
has been approved4 by Government of Tamil Nadu. The RPF requires that the land to
be acquired5 by adopting the procedures laid down in the Tamil Nadu Highways Act
(TNHA), 2001 and determination of compensation and provision of rehabilitation and

4 RPF and Entitlemsent Matrix approved vide G.O Ms. No.78 dated 19.05.2022
5 The amendment to RFCTLARR Act, by introducing Sec 105A through the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement (Tamil Nadu Amendment) Act, 2014,
ratified the use of procedure laid down in TNHA for land acquisition
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resettlement will be in accordance with the provisions of the Right to Fair Compensation
and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013
(RFCTLARR) and ESS 2 of the AIIB Environmental and Social Framework (ESF),
approved in February 2016 (Amended February 2019 and May 2021). Roughly 420
hectares (ha) - private land 314 ha and government land 106 ha - is required for the
entire project. As of December 2022, all Government land and roughly 279 ha (66
percent) of private land have been acquired, following the approved RPF provisions.
The land acquisition is expected to be completed by March 2023. The project involves
impact to - 963 titleholder affected families, 268 non-titleholder affected families, 1,838
landowners losing their agricultural land, 37 tenants and 570 employees. A total of 576
structures will be affected, out of which 393 are residential and 84 are commercial
structures and the remaining 99 structures are a mixture of residential and commercial
use. Besides structures, 74 common property resources (CPRs) will be impacted by the
land acquisition. In addition to the PMC, a Land Acquisition, Resettlement and
Rehabilitation (LARR) implementation consultant is assisting the implementation of
resettlement plans (RP). Furthermore, a LARR monitoring consultant (LARRMC) is
conducting concurrent monitoring and supervision. The analysis carried out and
reported through a monitoring report by monitoring consultant have indicated that the
process in compliance with RPF and RPs. Bank social specialist will closely review the
progress and monitoring outcomes and strengthen the process as needed.

53. Gender, Social Inclusion, and Gender-Based Violence. The aim of the Chennai
Metropolitan Area Comprehensive Mobility plan (CMP), 2019 is to attain people-centric
transport system that provides integrated, safe and convenient mobility to all transport
users, especially women, children, and other vulnerable groups. Tamil Nadu’s draft New
Policy for Women 2021 targets improving access of women to employment, reducing
discrimination, and eliminating violence against women6. The policy further reiterates its
commitment to making all forms of city transport systems gender and disabled-friendly.
Conducting regular third-party gender safety audits is one of the policy commitments.
The Prevention of Sexual Harassment of Women at Workplace Act 2013 requires setting
up of an Internal Complaints Committee at workplaces to hear and redress sexual
harassment related complaints. The Greater Chennai Corporation has set up a gender
and policy lab, under the Chennai City Partnership project, jointly financed by the World
Bank and the AIIB. The objective of the lab is to make Chennai safer and bring gender
inclusivity to projects. One of the core priorities of the gender lab is to conduct safety
audits, which is expected to help in addressing gender, as well as social inclusion, issues
under the proposed project.
54. In line with the government priorities, the proposed project aims to promote
gender-friendly infrastructure, promote women’s empowerment and enhance
accessibility to all transport service users, particularly the vulnerable groups. Gender-
based Violence (GBV)/Sexual Exploitation and Abuse (SEA) related risks have been
assessed to be significant in this project, especially for construction site workers.
Furthermore, there are GBV risks linked to infrastructure (being planned to be built under
the project) users. Thus, Gender Equality and Social Inclusion (GESI) dimensions have
been mainstreamed through the design, implementation, and monitoring of the project

6 https://cms.tn.gov.in/sites/default/files/documents/TN_Policy_Women_2021_draft.pdf

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interventions (see Annex 6 for details). The project will focus on: a) creating gender-
friendly, safe, equitable, and accessible infrastructure; b) expanding women’s access to
employment, and c) actively mitigating GBV/SEA risks. The project will take active steps
to ensure that project constructed infrastructure is inclusive and accessible to vulnerable
groups, including women, children, elderly, and persons with disabilities. Likewise,
women’s access to employment will be expanded through skills development training in
construction, operations, and maintenance work, as applicable. To address GBV/SEA
risks, the project will set up an internal complaints committee as required by the law to
ensure that sexual harassment-related grievances are handled timely and effectively.
Further, the project will introduce and operationalize the construction workers’ Code of
Conduct (CoC).
55. The Gender Action Plan (GAP) is being finalized in consultation with the
government. Identified GAP actions will be implemented with help from main
stakeholders, including the TNHD, the TNRIDC, gender lab, contractors, and others.
The GAP will contain timebound actions, along with the entities responsible for these
actions and budget requirements. It will also contain a monitoring plan for monitoring
planned activities.
56. Occupational Health and Safety, Labor and Employment Conditions. The
TNRIDC will ensure adequate health and safety measures for their workers, and the
bidding documents include clauses on how contractors shall address health and safety
requirements. The TNRIDC will also ensure that civil works contractors comply with
applicable labor laws and regulations and adopt and enforce workers’ Codes of Conduct
to mitigate sexual exploitation and abuse (SEA) related risks that may arise, mainly from
the influx of migrant workers and worksite-induced SEA. The contractors will be required
to prepare a COVID-19 Response and Management Plan in line with the World Health
Organization and GoI guidelines, ensuring appropriate health care for affected workers,
should the pandemic risks continue during construction.
57. Stakeholder Engagement, Consultation, and Information Disclosure.
Extensive consultations have been conducted during ongoing field surveys. The
consultations will continue on an ongoing basis during the project implementation. The
English versions of EIA and SIA/RP, and Tamil versions of the executive summaries of
the EIA and SIA/RP have been disclosed on TNHD’s7 and AIIB’s8 websites, and hard
copies will be made available at accessible locations in the project area.
58. Project Grievance Redress Mechanism. A two-tier project Grievance Redress
Mechanism (GRM) has been established, per AIIB’s ESP requirements. Communities
and individuals who believe that they are adversely affected by the project will be able
to submit complaints to the project-level GRM for resolution. In addition to the above,

7
https://www.ckicp.tn.gov.in/Reports/Environment_Impact_Assessment_(EIA)_Chennai_Peripheral_Ring_
Road_Project_section_2and3.pdf
https://www.ckicp.tn.gov.in/Reports/EIA%20Report%20in%20Tamil.pdf
https://ckicp.tn.gov.in/Reports/Resettlement%20Planning%20Framework%20Report.pdf
https://ckicp.tn.gov.in/Reports/Excecutive%20Summary%20of%20Resettlemet%20Planning%20Framewo
rk%20Report%20-%20Tamil.pdf
https://ckicp.tn.gov.in/Reports/Resettlement%20Plan%20Report%20for%20CPRR%20Section-2.pdf
https://ckicp.tn.gov.in/Reports/Resettlement%20Planning%20Framework%20Report.pdf
8
https://www.aiib.org/en/projects/details/2020/proposed/India-Chennai-Peripheral-Ring-Road.html

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GRM for addressing complaints from the local community will be made available at the
contractor level for workers’ grievances.
59. Project-Affected People’s Mechanism. AIIB’s Policy on the Project-affected
Peoples Mechanism (PPM) applies to this Project. The PPM has been established by
AIIB to provide an opportunity for an independent and impartial review of submissions
from Project-affected people who believe they have been or are likely to be adversely
affected by AIIB’s failure to implement the ESP in situations when their concerns cannot
be addressed satisfactorily through the GRM or the processes of AIIB’s Management.
Information on AIIB’s PPM is available at: https://www.aiib.org/en/about-aiib/who-we-
are/project-affected-peoples-mechanism/how-we-assist-you/index.html
60. Monitoring and Supervision Arrangements. The TNRIDC will be responsible
for overall coordination, supervision, and monitoring of the project’s E&S aspects, which
has established an E&S team to manage E&S aspects associated with the design,
implementation, and monitoring of the project. The TNRIDC will engage an independent
third-party monitoring agency to verify project environmental and social compliance and
report every six months. The monitoring reports will be based on field reviews and
internal E&S monitoring reports prepared by the TNRIDC with assistance from the PMC.
The AIIB plans to conduct the supervision mission twice a year. Depending on the
COVID-19 pandemic related travel restrictions, the AIIB team may conduct virtual
supervision missions in place of field visits. In such a case, local technical and E&S
consultants will be mobilized to monitor project implementation progress. The Bank also
plans to use non-traditional ICT-based tools to test their suitability in project monitoring
including progress monitoring of E&S activities.

E. Risks and Mitigation Measures

61. The Bank team has assessed the overall project risks as “High”. The table
below provides different risk elements, their risk ratings, and the potential mitigation
measures. Conditions for loan effectiveness will include the effectiveness of the
OPEC Fund Loan Agreement and execution of the AIIB and OPEC Fund Co-
financing Agreement. Loan disbursement conditions will include that the TNHD
would have retained the Project Management Consultant, Construction Supervision
Consultants, Land Acquisition and Resettlement Monitoring Consultant, and
Independent Third-Party Environmental & Social Monitoring Consultant to assist with
project implementation and monitoring.
Table 3: Summary of Risks and Mitigating Measures
Risk Description Assessment Mitigation Measures
(H/M/L)
Technical – Design Medium ▪ The design of road elements is not
complicated.
▪ A base design has been prepared by the
client, and the contractors’ EPC designs
will be reviewed by TNHD’s (TNRIDC’s)
consultants.
▪ Road safety specialists will be
incorporated into the contractor’s and
TNHD’s teams.

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Risk Description Assessment Mitigation Measures

(H/M/L)
Technical – Medium ▪ Construction is considered
Construction straightforward.
▪ Access, land availability, and staging of
construction will be reviewed by
consultants.
▪ The tender documents have indicated
land availability status so that contractors
can plan and bid accordingly.
▪ EPC-01 and EPC-02 (Section II) have
been awarded. Section I (JICA funded) is
expected to be completed concurrently
with Sections II and III.
Technical – Medium ▪ The latest design accommodates future
Highway Capacity widening in the median (in both
directions).
Implementation High ▪ Land availability could become an issue if
Schedule the land is not made available to the
contractors on time. However, the land
acquisition process progress is
satisfactory (roughly 72 percent of
required land is already available). The
GoTN has been expediting the acquisition
of the remaining land so that there is no
land issue when the contractors mobilize
to the sites.
▪ Both TNHD and TNRIDC are experienced
in EPC contract implementation and they
will engage adequate number of staff for
project management.
▪ The PMC and CSCs will help the TNRIDC
in the project management and
implementation respectively. The project
preparedness is good and it is expected
that the project will be completed as
planned.
Cost Medium ▪ Updated Detailed Project Reports (DPRs)
for Sections II and III have been submitted
with recent cost data. There is
approximately a 15% cost reduction since
the previous DPR, as was noted earlier.
This is based on estimated current market
conditions and a more thorough
estimation.
▪ It is also noted that generally EPC
contracts for well-defined projects, such
as this, are less costly than traditional
contracts. Early indication supports such a
notion. Bid prices of EPC-01 and EPC-02
are well within the estimated prices.
Maintenance and Medium ▪ Procurement documents specify the
Operations (seven qualifications of bidders with respect to
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Risk Description Assessment Mitigation Measures

(H/M/L)
years by the EPC highway maintenance and operation, and
contractors) the documents include performance-
based standards.
▪ Furthermore, the EPC contract is
formulated in such a way that the
maintenance period costs are set by the
TNHD as a percentage of the bid for
construction costs and therefore the
TNHD will be aware of the maintenance
costs at bid submission. This will help in
budgeting such costs accordingly. The
AIIB will not finance highway maintenance
and operations. Nonetheless, such an
approach provides predictability in project
budgeting and financial and technical
sustainability of the proposed operation.
Environment, High ▪ The PMC will have adequate E&S experts
Social & Gender to conduct the internal E&S monitoring.
▪ Implementation of the RP will be aided by
Land acquisition & an RP monitoring consultancy,
resettlement responsible for concurrent monitoring and
reporting.
GBV/SEA ▪ Third-party monitoring will be in place to
ensure regular feedback on a semi-annual
basis on the implementation of EMP and
RP.
▪ GAP will be implemented. GESI indicators
will be regularly monitored and reported.
▪ The AIIB will conduct regular supervision
of E&S performances.
▪ The progress of the LA process is already
substantial. Although the inherent E&S
risks have been judged as “High”, there is
a specific plan to mitigate them and the
residual risks will not be substantial.
Implementation Medium ▪ The TNHD and the TNRIDC are
Capacity experienced in project implementation.
▪ Furthermore, consultants (PMC, CSCs,
and other E&S consultancies) will support
the TNHD in project implementation.
▪ The Bank has already engaged a
Chennai-based technical consultant.
Additionally, more consultants will be
hired based on the technical, E&S, and
other implementation requirements.
Procurement Medium ▪ Both Section II contracts (EPC-01 and
EPC-02) have already been procured. All
three EPC contracts of Section III are in
the procurement stage and their
procurement is expected to be concluded
by early-2023.

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Risk Description Assessment Mitigation Measures

(H/M/L)
▪ All consultancy contracts have already
been procured, barring the CSC for
Section III, the procurement process of
which has already started and is to be
completed by Q1 of 2023.
▪ The PDS and the Procurement Plan have
been updated, reviewed, and cleared by
the Bank.
Financial Medium ▪ The detailed project financial
Management Delay management arrangements including
or inadequate annual plan/budgets, funds flow, roles,
release of budget and responsibilities of the PMU and the
funds PIU, audit timelines, etc. have been
specified in the project financial
Delay in submission management manual and reviewed by the
of financial reports Bank team.
including project
audit reports.
Overall rating High ▪ The inherent rating is judged as “High”
considering overall project risks.
However, with the mitigation measures in
place or planned, many of the risks could
be mitigated substantially.

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Annex 1: Results Monitoring Framework

The following table provides indicative Results Monitoring Framework. The indicators are discussed and agreed upon with the TNHD and the TNRIDC.
Project Objective To improve connectivity and road safety in the Chennai Metropolitan Area.
Indicator Name Unit of Baseline Target Values End Frequency Responsible
Measure Year Year Party
(2022)
2023 2024 2025 2026 2027 2028
Project Objective Indicators
1. Travel time (Sections II and III of Minutes 125 [a] N/A N/A N/A N/A 60 60 2028 Baseline & TNHD
CPRR) between NH-16 and NH-48 Project-end
surveys
2. Vehicular accidents (on CPRR Number 103 [a] N/A N/A N/A N/A 52 52 2028 Baseline and TNHD
compared with comparable roads in project-end
the vicinity of the project) surveys
Intermediate Results Indicators
1. Construction physical progress, % 0 5 20 60 100 100 100 2028 Annual TNHD/
cumulative (physical progress of TNRIDC
Sections II and III)
2. Employment of local laborers % N/A 10 15 20 20 20 20 2028 Annual TNHD/
cumulative (Sections II and III; as TNRIDC
a % of the total laborers employed
by the project)
3. Skill training for women cumulative Number [of 0 5 10 15 20 25 30 2028 Annual TNRIDC/
(including engineering surveys, women Contractors
quality management, construction trained]
supervision, and heavy construction
equipment operation)
4. Workers’ Code of Conduct Proportion 0 50 75 100 100 100 100 2028 Annual TNRIDC/
(mandatory introduction of workers’ [of contracts] Contractors
Code of Conduct by contractors)
5. Gender safety and equitable access Proportion 0 25 50 75 100 100 100 2028 Design/ TNHD/
(conducting audits and the Implementation/

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Project Objective To improve connectivity and road safety in the Chennai Metropolitan Area.
Indicator Name Unit of Baseline Target Values End Frequency Responsible
Measure Year Year Party
(2022)
2023 2024 2025 2026 2027 2028
incorporation of audit [of contracts] Completion TNRIDC
recommendation(s) ensuring that
project-constructed infrastructure is
gender-sensitive, with equitable,
safe, and accessible features)
Notes: [a] Baseline figures are based on existing surveys. They will be updated before CPRR opens.

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Annex 2: Detailed Project Description

2
A. Project Context. The Chennai Metropolitan Area (CMA) has an area of 1189 km spread
2
over three districts that include the whole of Chennai District (176km ), part of Tiruvallur District
(637km ), and part of Kanchipuram District (376km ). Chennai’s location on the coast of the Bay
2 2

of Bengal has resulted generally in radial arterial road patterns in its metropolitan area. The primary
radial arterials are National Highway 16 (old NH-5), National Highway 716 (old NH-205), National
Highway 48 (old NH-4), and National Highway 32 (old NH-45). Additionally, there are three
secondary radial arterial roads: (i) Thiruvotriyur High Road, (ii) Arcot Road between NH-48 and
NH-32, and (iii) East Coast Road SH-49. Chennai has three circumferential roads: Inner Ring
Road; Chennai Bypass; and Outer Ring Road which connect the radial roads. As Chennai has
developed beyond the capacity of the existing road network, a new circumferential road is required.
The broader CPRR (Sections I through V) will provide an important transport corridor to improve
connectivity around Chennai, connect four National Highways, and connect Ennore and Kattupalli
Ports to facilitate the industrial and economic growth of Chennai and Tamil Nadu. The CPRR will
reduce travel time/ distance for traffic that does not need to access local roads and hence improve
port connectivity and reduce unnecessary congestion on local roads.
B. Technical. The project contracts are being procured using the Engineering-Procurement-
Construction (EPC) contract model. The preliminary design developed by TNHD’s consultants
confirms that the project is technically and economically viable.
1. Alignment

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2. Roadway Cross Section (Sections II and III)

3. Traffic Projection: in PCU (AADT)9

Year Section II Section III
Main Carriageway Service Road Total Main Carriageway Service Road Total
2018 23,984 3,402 27,386 38,666 9,749 48,416
2019 25,216 3,646 28,862 40,695 10,434 51,129
2020 26,512 3,908 30,420 42,832 11,171 54,003
2021 27,875 4,191 32,066 45,082 11,963 57,045
2022 29,308 4,496 33,804 47,451 12,816 60,267
2023 30,816 4,824 35,641 49,947 13,734 63,681
2024 32,402 5,179 37,580 52,575 14,722 67,297
2025 35,761 5,715 41,476 58,024 16,248 74,273
2026 37,602 6,137 43,738 61,080 17,423 78,502
2027 39,538 6,591 46,129 64,297 18,688 82,985
2028 41,575 7,081 48,656 67,687 20,051 87,737
2029 43,504 7,556 51,060 70,901 21,372 92,273
2030 45,522 8,066 53,588 74,269 22,786 97,055
2031 47,636 8,612 56,247 77,799 24,299 102,098
2032 49,848 9,196 59,044 81,499 25,918 107,417
2033 52,163 9,823 61,986 85,377 27,652 113,029
2034 54,345 10,427 64,772 89,036 29,322 118,359
2035 56,619 11,070 67,689 92,854 31,099 123,953
2036 58,989 11,755 70,744 96,838 32,989 129,827
2037 61,458 12,485 73,943 1,00,994 35,000 135,994
2038 64,032 13,261 77,294 1,05,331 37,140 142,472
2039 66,449 14,006 80,455 109,408 39,190 148,598
2040 68,965 14,803 83,768 113,664 41,390 155,054
2041 71,577 15,646 87,224 118,087 43,719 161,806
2042 74,289 16,540 90,829 122,685 46,183 168,868
2043 77,105 17,486 94,591 127,463 48,792 176,255
2044 80,028 18,488 98,516 132,431 51,552 183,983

9 From STUP Consultants DPR for Sections II and III, dated Oct 5, 2020, Table 6.34

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C. Land Acquisition
Section Stretch Length (km) Row Land Acquisition Area (ha)
Existing New Total (m) Private Govt Total
II NH16 to Start of Thiruvallur Bypass 0 26.1 26.10 60 158.04 28.00 186.04
III NH48 to Start of Thiruvallur Bypass 9.60 20.5 30.10 60 155.89 78.39 234.28
Total 9.60 46.60 56.20 313.93 106.39 420.32

D. Operations & Maintenance. Seven-year post-construction operation and maintenance

contracts, to be fully financed by the GoTN.
E. Implementation Arrangement. Tamil Nadu Department of Highways and Minor Ports
(HMPD)10 includes the Tamil Nadu Highways Department (TNHD), a state departmental agency,
which is the overall responsible state entity for the project on behalf of the HMPD. Another agency
under HMPD is the Tamil Nadu Road Infrastructure Development Corporation (TNRIDC), an entity
wholly owned by the State of Tamil Nadu, which is the implementing agency for the project and
will house the Project Implementing Unit (PIU). The TNRIDC is headed by the HMPD Principal
Secretary, with the Director General of Highways (TNHD) on its board of directors. The diagram
below provides the project implementation and management institutional structure.

10 https://www.tn.gov.in/department/13

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Annex 3: Economic and Financial Analysis

A. Introduction
Economic Rationale. The construction of 133.38 Kms of Chennai Peripheral Ring Road (CPRR)
with provision of service roads on both sides focuses on enhancing connectivity around the city,
balanced development, efficient freight movement and decongestion within the city, and reducing
pollution and travel time. The economic viability of the entire CPRR has been evaluated,
considering the quantifiable benefits arising from savings in vehicle operating costs (VOC),
savings in travel time costs of passengers and goods (VOT), reduction in greenhouse gas (GHG)
emissions, and improved road safety. The corridor was deemed economically viable with the
economic internal rate of return (EIRR) and net present value (NPV) estimated at 15.65 percent
and INR28,695 million (USD382 million) respectively for the entire CPRR length.11 Under the
present project, a 73 Km stretch of existing roads along Section II and Section III, are being mostly
realigned (except 9.6 Km in Section III) with the provision of a six-lane main carriageway and two-
lane service road on either side. The realigned length is 56.20 Km.
B. Approach and Framework of Analysis
Methodology. The economic analysis is conducted using a Highway Design and Management
(HDM-4) model, which compares the transport cost for road agencies and road users under
‘without project’ and ‘with project’ scenarios. The analysis considered 20 years after the
implementation period. The EIRR derived from undiscounted net benefit streams has been used
to determine the economic viability. Under the ‘Without Project’ scenario existing road stretch is
kept with minimum routine and periodic maintenance while the ‘With Project’ scenario considers
new alignments for six-lane dual carriageway and provides two lane service road on either side
with rehabilitation and upgrades to specified standards along with routine and periodic
maintenance.12 The calibration of the model and its sub-models have been done following the
local conditions, engineering inputs, and data collected from various concerned departments of
the Government of Tamil Nadu as far as feasible.
C. Demand Analysis
Base Year AADT. The traffic assignment on the proposed road sections was carried out based
on the traffic volume count survey conducted in 2013 at various locations on and around CPRR
alignment along with origin-destination surveys.13 Based on the analysis with due considerations
for future development, the traffic assignment was worked out. It is planned that two-wheelers,
auto-rickshaws, and a part of buses (mainly local buses) will move on service roads. The rest of
the traffic with long distance regional buses will move along the main carriageway. It is assumed
that in the ‘With Project’ situation, the traffic on the existing road will reduce by 70 percent (only

11 The EIRR values for different sections of CPRR are; 10.41 percent for Section I, 19.27 percent for Section II, 18.79
percent for Section III, 32.40 percent for Section 4 and 10.01 percent for Section 5.
12 Though the alignment for Section III follows the existing road for 9.6km, for simplicity, the full section is considered

as new alignment. In the analysis the main carriage way and service road have been considered as new sections, while
the existing road will continue to function as link for the local areas.
13 Survey conducted by STUP Consultants Pvt Ltd for TNRIDC in December 2013 – Refer Table 6.1 of Detailed Project

Report-CPRR Section II-Vol 1 and Detailed Project Report-CPRR Section III-Vol 1

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30 percent will be moving on the existing road). This 70 percent diverted traffic will move along
the proposed main carriageway and service road.14 In 2020, AADT for Section II is estimated at
10,594 vehicles on the main carriageway and 5,927 vehicles on the service road. For Section III
the figures are 19,800 and 15,864 vehicles respectively.15 The share of goods vehicles comprising
multi-axle vehicles (MAVs), 2-axle and 3- axle trucks, and light commercial vehicles (LCVs) is 46
percent and 32 percent in the traffic stream for Section II and Section III, respectively. The
presence of two-wheelers in both the sections is quite significant, to the tune of 33 percent and
40 percent respectively (Table A1).
Table A1: Section-wise Composition of Vehicles
CPRR Main Carriageway Service Road Total
Section LCV 2-Axle 3-Axle MAV Cars/ Jeep/ Regional Local Two- Passenger Auto
Truck Truck Vans Bus Bus Wheeler Rickshaw
Section II 8.0 16.7 13.6 8.1 16.0 1.7 2.0 32.6 1.3 100.0
Section III 6.2 12.5 8.5 4.4 21.9 2.0 3.5 40.2 0.8 100.0

Traffic Forecast. Traffic growth rates for all categories of vehicles have been estimated based
on the past trends of registered motor vehicles and the econometric models as per IRC 108-2015.
The econometric models have been developed with respect to relevant economic indicators like
Gross State Value Added (GVA), Net State Value Added (NSVA), population of Tamil Nadu, and
per capita income (PCI) which influence the growth of the different vehicle categories. The time-
series data were collected from RBI 16 and State Government Departments and the elasticity
coefficients were derived from empirical models evaluating the relationship between traffic growth
and suitable economic indicators.17 The elasticity values and growth rates calculated have been
suitably modified to suit the future traffic scenario for CPRR.
Traffic Growth Rate. It is forecasted that GVA, NSVA, and PCI at constant prices will grow at
6.5 percent per annum, 6 percent per annum, and 5 percent per annum respectively on average.
Further, the population of Tamil Nadu which is growing at 1.65 percent per annum (2001 and
2011 Census) is likely to grow at 1.5 percent per annum in the future. The growth rate of vehicles
is assumed to decline by 10 percent every 5 years after 2028, due to government policies and
technological development. For trucks and MAVs the actual growth is less than 3 percent per
annum (p.a.) As this is quite low, a value of 5 percent p.a. in the base year is assumed. 18 A
generated traffic of 5 percent of each category of vehicles has been assumed from 2024 due to
the improvements. The forecast growth rates19 are shown in Table A2.
Table A2: Adopted Traffic Growth Rates
Vehicle Type 2018-2023 2023-2028 2028-2033 2033-2038 2038- Actual Growth Rate
onwards p.a. (2012-2018)
Two-Wheeler 8.51% 8.51% 7.66% 6.89% 6.20% 9.30%
Three Wh./Auto 3.29% 3.29% 2.96% 2.67% 2.40% 3.75%

14 Based on stakeholder consultations/ expert discussions and IRC 108-2015: Guidelines for Traffic Forecast on
Highways
15 Detailed Project Report-CPRR Section II-Vol 1 and Detailed Project Report-CPRR Section III-Vol 1-Table 6.34
16 Handbook of Statistics on Indian Economy, RBI-2019-20
17 State Transport Authority, Govt. of Tamil Nadu
18 IRC: 37-2012-Tentative Guidelines for the Design of Flexible Pavements
19 Detailed Project Report-CPRR Section II-Vol 1 – Table 6.33

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Vehicle Type 2018-2023 2023-2028 2028-2033 2033-2038 2038- Actual Growth Rate
onwards p.a. (2012-2018)
Car/Jeep 6.44% 6.44% 5.80% 5.22% 4.70% 7.18%
Bus 4.65% 4.65% 4.18% 3.77% 3.39% 4.67%
LCV 5.11% 5.11% 4.60% 4.14% 3.72% 4.90%
2 & 3 Axle Truck 5.00% 5.00% 4.50% 4.05% 3.65% 2.33%
MAV 5.00% 5.00% 4.50% 4.05% 3.65% 2.68%

D. Project Cost
Cost Basis. For carrying out the economic analysis, the preliminary cost estimate of different
sections of the road has been prepared based on cost updating made at 2020-2021 prices by
DPR consultants. The financial cost for Section II and Section III has been taken from the Main
Reports for those sections.20 21The costs for Sections I, IV and V have been estimated by DPR
consultants and submitted to the TNRIDC. The construction period for Section II and Section III
has been estimated as 3 years starting from 2021. The distribution of cost has been taken as 25
percent in the first year, 45 percent in the second year and 30 percent in the third year.22 For
accurately assessing the value of land acquired for the project, discussions were held with project
officials and officials from the GoTN. In Tamil Nadu, land acquisition compensation includes an
additional 100 percent solatium on the market rate and cost of rehabilitation. As per estimates
given by the TNRIDC, the overall compensation paid is around 250 percent of market value. To
capture the opportunity cost, the market value is considered as the land acquisition cost.
Financial Cost. The financial cost for Section II and Section III considering the market value of
land acquisition and excluding taxes works out to be INR661.609 m/per km (USD8.8m/per km)
and INR1,056.545 m/per km (USD14.1 m/per km) respectively. Through discussions and working
out broad costing, it has been estimated that the cost of the main carriageway will be 67 percent
of the total cost and the rest will be for service road. The total financial cost of the improvement
is presented in Table A3.
Table A3: Financial Cost for CPRR Section II and Section III
Sl. No. Description Cost in Million INR
CPRR-Section II CPRR-Section III
1 Civil Construction Cost 14,240 22,490
2 Goods and Services Tax (12%) 1,710 2,700
3 Lump sum provisions 1,280 2,020
4 Land Acquisition 3,020 15,530
5 Resettlement & Rehabilitation Cost 70 410
6 Utility Shifting 470 670
Grand Total 20,790 43,820
Cost for Economic Analysis - considering market 17,268 31,802
value of LA (40% estimated) & excluding taxes
Length-Km 26.10 30.00
Fin Cost / Km in INR 661.609 1,056.545
Eco Cost / Km in INR 562.368 898.063

20 Detailed Project Report-CPRR Section II-Vol 1 – Table 8.1

21 Detailed Project Report-CPRR Section III-Vol 1 – Table 8.1
22
Based on discussions with TNHD and TNRSP II officials and information from Design Office

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Sl. No. Description Cost in Million INR

CPRR-Section II CPRR-Section III
6 Lane Main Carriageway – 67%
Financial Cost in INR 443.278 707.885
Economic Cost in INR 376.786 601.702
4 Lane Service Road – 33%
Financial Cost in INR 218.331 348.660
Economic Cost in INR 185.581 296.361
Conversion Factor. The economic cost for all the items has been assumed as 85 percent of the
financial cost, as advised during the World Bank assisted Tamil Nadu Road Sector Project
(TNRSP) in Tamil Nadu.
Salvage Value. Salvage value is considered as 20 percent23 of the economic cost at the end of
analysis period. This would include residual values for earthworks, culverts, bridges, etc. which
will have a much longer life than the project.
E. Project Benefits
Components. The quantifiable benefits of the project will mainly accrue from vehicle operating
cost (VOC) savings, value of travel time (VOT) saving, and saving in maintenance costs. While
VOC and VOT have been analyzed through HDM 4, cost reduction due to GHG emissions and
accidents have been added externally in the results.
Average Speed and Roughness. It is observed that the reduction of travel time for Section II
along the main carriageway will be 0.70 hrs. compared with the existing alignment (from 1.06 hrs.
to 0.36 hrs.). The average speed on main carriageway will increase from 38.63 kmph in ‘without
project’ scenario to 72.94 kmph in ‘with project’ scenario. The reduction of time for Section III
worked out as 0.61 hrs. with the increase of speed from 31.39 kmph to 72.81 kmph. The average
roughness (IRI) for Section II decreases significantly on main carriageway in ‘with project’
scenario. The average roughness of 4.53 mm/km in ‘without project’ scenario, will reduce to 1.71
mm/km in ‘with project’ scenario. Similar results have been observed for Section III.
Passenger and Cargo Time Saving Values. The per capita income of Tamil Nadu is
approximately INR218,599, nearly 50 percent higher than the national average.24 Assuming that
45 percent of the population is engaged in the workforce and they work for 23 days a month, the
average wage of a worker is roughly INR220 per hour. However, as a conservative estimate, the
analysis assumes an average wage of INR190 per hour with variations for different modes. The
working time saving values, per hour per person, assumed were: INR 228 for cars, INR114 for
two-wheelers and INR59 for buses/auto-rickshaws. Factors used for deriving these values were:
1.20, 0.60 and 0.31 for cars, two-wheelers and buses/auto-rickshaws respectively of the average
wage value. Factors for two-wheelers and buses/auto-rickshaws have been estimated from
results of two ADB assisted studies: Jaipur Metro Rail Line 1-Phase B Project and Mumbai Metro

23
Detailed Project Report (DPR) for various road improvement works under Tamil Nadu Road Sector Project II (PPC-
04)- Final Detailed Project Report- 2018-STUP Consultants p Ltd.
24
Handbook of Statistics on Indian Economy, RBI-2019-20

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Rail Systems Project.25 The figures are geometric average figures from these projects. The Jaipur
study quoted figures for two-wheelers and buses/auto-rickshaws were 75 and 35 percent of time
saving values of car passengers, repectively. Corresponding figures of the Mumbai study were
45 percent and 27 percent. Non-working time saving values of passengers were valued at 40
percent of the above working time saving values. These financial costs have been converted to
economic costs for HDM model inputs. For cargo, the economic time saving values ranged from
INR20 per hour for LCVs to INR113 per hour for MAVs. They were estimated from the values
used in World Bank’s Tamil Nadu Road Sector Projects (TNRSP) studies, using factors to convert
them to present levels.
Avoided cost of Accidents. Given the lack of accident records on the existing corridor, an effort
has been made to estimate the same from average accident rates in Chennai. As per the data
from the Ministry of Road Transport and Highways26 and city authorities, the number of accidents
has been estimated at 1.41 per Km per year. The rates for fatality and injury work out to be 0.23
per Km and 1.34 per Km per year, respectively. The number of serious injuries is assumed as 50
percent of the total number of injuries. Moreover, it is further assumed that due to improvements
there will be a 50 percent27 reduction in annual deaths and serious injuries. The value of a fatality
and an injury was estimated based on the values indicated in IRC: SP: 30-2009 and factoring it
to the year 2020. The estimated economic cost for a fatal accident has been worked out as
INR1,642,265 while the same for serious injury as INR744,420. Based on the above facts and
other assumptions, the savings in accident cost has been worked out as roughly INR18.0 million
and INR14.0 million per year for Section II and Section III, respectively.28
Reduction in Green House Gases. The project will cause significant reduction in the Green
House Gas (GHG) emissions as well as other pollutants, which is largely due to reduced
congestion, increased operating speed, and better road conditions in ‘With Project’ scenario. The
reduction for CO2 for Section II is 73.8 percent and for Section III it is 53.1 percent. The costing
for CO2 worked out based on World Bank guidelines 29 and the net benefits have been
incorporated into the economic analysis.
Reduction in Maintenance Costs. The maintenance costs for different sections have been
obtained from the HDM analysis. The analysis indicates that the maintenance cost in ‘With Project’
situation will reduce significantly. The reduction in the economic cost of maintenance is 69.1
percent for Section II and 57.4 percent for Section III.30
Other Unquantifiable Benefits The improved road transport infrastructure will trigger economic
growth in the nearby districts through additional investment, improved access to markets,
employment generation, and enhancement of social, health, and educational opportunities.
Though quantification of these benefits will be difficult, the economic gain is expected to be

25
ADB-Jaipur Metro Rail Line 1-Phase B Project (RRP IND 46417), Oct 2013 and ADB-Mumbai Metro Rail Systems
Project (RRP IND 49469), Jan 2019
26 Road Accidents in India 2018, Ministry of Road Transport and Highways
27 Case Studies of Implementation: Saving Lives through Safer Roads, IndiaRAP, March 2020
28 Detailed Project Report-CPRR Section II-Vol 1 and Detailed Project Report-CPRR Section III-Vol 1-Table 9.7
29 World Bank, 2017, Guidance Note on Shadow Price of Carbon in Economic Analysis
30 Detailed Project Report-CPRR Section II-Vol 1 and Detailed Project Report-CPRR Section III-Vol 1-Table 9.6

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significant.
F. Economic Analysis
Undiscounted Cost Stream. The HDM analysis has been carried out with a discount rate of 12
percent. The undiscounted cost streams for Section II and Section III31 are shown in Table A4
and Table A5. The negative values in Capex and Opex indicate the salvage value in the former
and avoided operation and maintenance costs for the latter in ‘With Project’ situation (compared
to ‘Without Project’ situation), which adds up as benefits.
Table A4: Undiscounted Comparison of Cost Streams for Section II
All costs are expressed in INR (million)
Year Cost Benefits Net Benefits
Increase in Road Agency Costs Reduction in Road User Costs
Capex Opex Total VOC VOT GHG Cost Accident Cost Total
2020 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2021 3,669.44 0.00 3,669.44 0.00 0.00 0.00 0.00 0.00 -3,669.44
2022 6,605.00 0.00 6,605.00 0.00 0.00 0.00 0.00 0.00 -6,605.00
2023 4,403.33 0.00 4,403.33 0.00 0.00 0.00 0.00 0.00 -4,403.33
2024 0.00 0.00 0.00 1,322.66 851.43 22.06 0.00 2,196.15 2,196.15
2025 0.00 0.00 0.00 1,397.51 904.72 25.08 17.97 2,345.28 2,345.28
2026 0.00 0.00 0.00 1,483.78 962.30 28.52 17.97 2,492.57 2,492.57
2027 0.00 0.00 0.00 1,589.11 1,024.24 32.66 17.97 2,663.99 2,663.99
2028 0.00 0.00 0.00 1,723.66 1,090.80 37.14 17.97 2,869.57 2,869.57
2029 0.00 451.95 451.95 1,871.40 1,162.55 42.24 17.97 3,094.16 2,642.21
2030 0.00 0.00 0.00 2,085.22 1,241.31 48.19 17.97 3,392.70 3,392.70
2031 0.00 0.00 0.00 2,294.50 1,331.23 54.94 17.97 3,698.64 3,698.64
2032 0.00 268.63 268.63 2,558.69 1,432.03 63.19 17.97 4,071.88 3,803.25
2033 0.00 0.00 0.00 3,028.82 1,559.31 72.84 17.97 4,678.94 4,678.94
2034 0.00 -1,463.70 -1,463.70 4,836.43 1,909.24 90.60 17.97 6,854.23 8,317.93
2035 0.00 451.95 451.95 2,661.30 1,905.07 91.44 17.97 4,675.78 4,223.83
2036 0.00 0.00 0.00 2,999.95 2,158.47 105.75 17.97 5,282.14 5,282.14
2037 0.00 0.00 0.00 3,399.45 2,470.43 123.14 17.97 6,010.99 6,010.99
2038 0.00 0.00 0.00 3,883.50 2,803.20 144.30 17.97 6,848.98 6,848.98
2039 0.00 0.00 0.00 4,491.89 3,175.98 166.64 17.97 7,852.48 7,852.48
2040 0.00 0.00 0.00 4,934.17 3,348.75 191.31 17.97 8,492.19 8,492.19
2041 0.00 451.95 451.95 5,570.10 3,526.61 216.87 17.97 9,331.55 8,879.60
2042 0.00 -1,195.07 -1,195.07 8,298.38 4,094.50 263.84 17.97 12,674.69 13,869.76
2043 0.00 0.00 0.00 5,446.13 4,307.21 269.84 17.97 10,041.15 10,041.15
2044 -2,935.56 0.00 -2,935.56 6,211.05 4,969.93 313.31 17.97 11,512.26 14,447.82

Table A5: Undiscounted Comparison of Cost Streams for Section III

All costs are expressed in INR (million)
Cost Benefits Net Benefits
Increase in Road Agency Costs Reduction in Road User Costs
Year Capex Opex Total VOC VOT GHG Cost Accident Cost Total
2020 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2021 6,757.92 0.00 6,757.92 0.00 0.00 0.00 0.00 0.00 -6,757.92
2022 12,164.26 0.00 12,164.26 0.00 0.00 0.00 0.00 0.00 -12,164.26
2023 8,109.51 0.00 8,109.51 0.00 0.00 0.00 0.00 0.00 -8,109.51
2024 0.00 0.00 0.00 941.18 2,095.01 44.13 0.00 3,080.33 3,080.33
2025 0.00 0.00 0.00 1,174.59 2,430.51 51.89 14.02 3,671.01 3,671.01
2026 0.00 0.00 0.00 1,414.28 2,748.12 60.25 14.02 4,236.66 4,236.66

31 Detailed Project Report-CPRR Section II & III -Vol 1 – Table 9.9

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Cost Benefits Net Benefits

Increase in Road Agency Costs Reduction in Road User Costs
Year Capex Opex Total VOC VOT GHG Cost Accident Cost Total
2027 0.00 0.00 0.00 1,556.96 2,891.98 69.14 14.02 4,532.11 4,532.11
2028 0.00 5.66 5.66 1,726.03 3,037.22 77.83 14.02 4,855.10 4,849.44
2029 0.00 521.21 521.21 2,085.85 3,391.27 89.11 14.02 5,580.25 5,059.03
2030 0.00 0.00 0.00 2,830.63 3,935.40 104.56 14.02 6,884.61 6,884.61
2031 0.00 -1,224.00 -1,224.00 5,242.74 4,952.63 132.87 14.02 10,342.26 11,566.26
2032 0.00 224.64 224.64 3,290.46 5,739.29 142.00 14.02 9,185.76 8,961.12
2033 0.00 0.00 0.00 4,278.89 6,913.94 171.18 14.02 11,378.03 11,378.03
2034 0.00 0.00 0.00 4,500.05 7,236.06 192.88 14.02 11,943.02 11,943.02
2035 0.00 513.94 513.94 4,827.42 7,539.37 211.31 14.02 12,592.12 12,078.19
2036 0.00 0.00 0.00 5,263.03 7,860.67 231.19 14.02 13,368.91 13,368.91
2037 0.00 0.00 0.00 5,382.39 7,863.42 238.52 14.02 13,498.35 13,498.35
2038 0.00 0.00 0.00 5,227.24 7,445.41 230.92 14.02 12,917.59 12,917.59
2039 0.00 -1,224.00 -1,224.00 6,688.69 7,414.23 237.97 14.02 14,354.91 15,578.91
2040 0.00 0.00 0.00 2,105.72 6,557.05 195.16 14.02 8,871.94 8,871.94
2041 0.00 521.21 521.21 1,256.15 6,053.16 180.80 14.02 7,504.12 6,982.91
2042 0.00 217.36 217.36 435.08 5,475.68 164.08 14.02 6,088.86 5,871.49
2043 0.00 0.00 0.00 -253.14 4,833.36 144.72 14.02 4,738.96 4,738.96
2044 -5,406.34 0.00 -5,406.34 -1,084.65 4,071.71 118.88 14.02 3,119.96 8,526.30

EIRR and NPV. Considering the costs and the benefits associated with VOC and VOT savings,
along with cost savings for GHG emissions and avoided accidents, the EIRR for Section II and
Section III work out to be 19.27 percent and 18.79 percent respectively. The corresponding NPV
values are INR10,389 million (USD139 million) and INR16,215 million (USD216million). The
combined stretch of Section II and Section III gives an EIRR of 18.96 percent with NPV as
INR26,603 million (USD355 million). The discount rate in both cases was 12 percent.
Sensitivity Analysis Sensitivity analysis is conducted to test the robustness of EIRR to different
variations in market and project-specific parameters. The four scenarios are,
Case – I: Cost increased by 15 percent
Case – II: Benefit/ traffic decreased by 15 percent
Case – III: Cost increased by 15% and Benefit decreased by 15 percent
Case – IV: Project delayed by one year
The sensitivity analysis and switching values are presented in Table A632. It is observed that the
EIRR values are more sensitive to reduction of benefits than increase in cost, while project delay
by one year does not have any significant impact. Across all the scenarios the project yields a
return that is higher than the discount rate and hence can be deemed as economically viable.
Table A6: Sensitivity Analysis

32 Detailed Project Report-CPRR Section II & III -Vol 1 – Table 9.10

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Annex 4: Member and Sector Context

1. Country Priority. India’s transport infrastructure has not been able to keep pace with its
economic growth and India’s urban areas are facing considerable traffic congestion, pollution,
and road safety concerns. Continuous improvements to India’s transport sector are therefore
necessary to facilitate and sustain economic growth and enable urban development. Information
about the Republic of India is provided in Annex 5, Sovereign Credit Fact Sheet.

2. State of Tamil Nadu.33 Tamil Nadu is the second largest contributor to India’s economy
after Maharashtra. It is one of the more developed states in India with a per capita income of
INR218,599 (USD2,973) in 2019-20; nearly 50 percent higher than the national average. From
2015-2020, the state’s economy grew at an average annual rate of 8.0 percent, which is higher
than India’s average growth. Manufacturing plays an important role in the state’s overall growth,
accounting for nearly 20 percent of the output in 2019-2020, slightly lower than the other
industrialized states of Gujarat and Maharashtra, but well above the national average of 15.0
percent. Tamil Nadu is the most urbanized state in India with 48.5 percent of the population living
in urban areas in 2011 and that is expected to increase to 67 percent by 2030. To meet urban
population growth, one of the major projects identified in the Government of Tamil Nadu’s VISION
2023 (Tamil Nadu’s strategy for infrastructure investment) is the Chennai Peripheral Ring Road
(CPRR) to meet projected traffic demand and provide efficient commercial transportation to
enhance ports are connectivity.

3. Chennai Context. Chennai is the capital of Tamil Nadu and the fourth largest city in
India. It is located on the coast of the Bay of Bengal and has grown as a base for the automobile,
information technology, hardware manufacturing, and health care industries. Chennai
Metropolitan Area (CMA) is 1,189 square kilometers and is part of the golden quadrilateral road
network connecting the metropolitan areas of Kolkata, Delhi, and Mumbai. As one of the world’s
fastest growing cities, Chennai is projected to grow by more than 8 percent annually from 2019
to 2035.

4. Chennai’s interlinked transportation system comprises air, sea, road, and rail
connections. Its airport has been the fourth busiest in India, after Delhi, Mumbai, and Bangalore.
Chennai is also served by two major ports, Chennai and Ennore/Kattupalli. Chennai Port handles
the second largest volume of containers in India. Chennai is served by more than five national
highway networks. Main road networks within Chennai include the Inner Ring Road, Chennai
Bypass Road, and Outer Ring Road (see Figure 1 in the body of this report).

5. Project’s Strategic Fit. Chennai is forecasted to have a population of over 12.5 million in
2026. With the increasing population, Chennai city is experiencing rapid motorization, leading to
increased congestion and pollution. Chennai Comprehensive Mobility Plan (CMP) has identified
several mobility and land-use related challenges and suggested eight (8) specific strategies to
address them. One of the strategies is the freight management strategy.

33 Information provided by AIIB’s Economics Department

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6. The proposed project aligns with the CMP strategies and plans. One of the freight policy
principles adopted for Chennai includes restricting heavy vehicles entering the city. The CMP has
identified eight fright corridors. The CPRR is one of the CMP freight corridors.
7. Apart from the proposed project, AIIB’s current and proposed support to Chennai include
three other projects: (i) Chennai City Partnership: Sustainable Urban Services Program,
PD000477 (under implementation; co-financed with the World Bank); (ii) Chennai Metro Rail
Phase 2 Project – Corridor 4, P000301 (under implementation); and (iii) Chennai Metro Rail
Phase 2—Balance Corridor 5 - P000368 (under preparation). All these projects are interlinked
and they are a part of CMP proposals, barring the Sustainable Urban Services Program, which
has cross-cutting transport components.
8. Sustainable Urban Services Program activities will benefit all these ongoing and potential
AIIB projects. The Program has one distinct transport indicator, which could potentially benefit the
proposed project. It is the operationalization of the Chennai Unified Metropolitan Transport
Authority (CUMTA) 34 with enhanced capacity and control over sector budget allocation. This
indicator will help in overseeing, coordinating, promoting, and monitoring the implementation of
various traffic and transportation measures by different agencies in Chennai, including the CPRR.

34CUMTA is established by the State Government in November 2010 (through ACT No. 44 OF 2010) as a coordinating
authority in the area of Transport. The overwhelming objective of the creation of the authority is to properly coordinate
and streamline activities among different agencies, responsible for the planning, operating and managing transportation
system in Chennai Metropolitan Planning Area.

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Annex 5: Sovereign Credit Fact Sheet

A. Recent Economic Development

1. India is a lower-middle-income country, with a GDP per capita at USD 2277.4 and a
population of 1.39 billion in 2021.1 India’s economy grew at an average annual rate of 7.4 percent
between FY2014 and FY2018 but slowed down in the years before the pandemic following
disruptions due to demonetization, rollout of goods and services tax, rural distress and stress in
the financial sector.23 India’s GDP contracted by 6.6 percent in FY2020 (year ending March 2021) on
account of stringent lockdown restrictions imposed during the first half of the year. Even though the
second wave (April-June 2021) of the pandemic was more severe than the first wave (April-June 2020),
the government opted for localized restrictions. With increased mobility and favorable base effect, the
Indian economy grew by 8.7 percent in FY2021 even with the Omicron wave happening in January
2021. GDP grew by 13.5 percent in the first quarter of FY2022 on account of pent up demand and a
favorable base effect but slowed down to 6.3 percent in the second quarter of FY2022. The economy
is expected to slowdown in subsequent quarters due to monetary tightening and weak global demand.

2. Inflation averaged 6.2 percent in FY2020, primarily driven by food inflation due to supply
side disruptions. As a response to the pandemic, the Reserve Bank of India (RBI) reduced key
policy rates and introduced measures to reduce the borrowing cost, bolster liquidity, and improve
credit flow to the productive sectors. Policy rates remained unchanged with the RBI maintaining
an accommodative stance between August 2020 and April 2022. With inflation rising since the
last quarter of FY2021, the RBI raised the repo rate by a cumulative 225 basis points since May
2022 which now stands at 6.25 percent. Inflation averaged 7.2 percent in the first half of FY2022
and is likely to gradually ease in the second half. In fact, inflation in November fell below the
central bank target of 6 percent, months after it breached the target in January 2022. The currency
depreciated by ~8 percent between January and November 2022, primarily due to capital outflows
as a response to monetary tightening in advanced economies.

3. A downturn in revenue due to economic slowdown and higher spending on the stimulus
package resulted in the fiscal deficit widening significantly to 12.8 percent of GDP in FY2020.
Overall deficit moderated to 9.9 percent in FY2021. Revenue collection grew at 32 percent in
FY2021, at a pace higher than expected pace due to buoyant tax revenues. This allowed capital
expenditure to increase by 39.3 percent in FY2021, well above the initial target of 30 percent.
Fiscal deficit during April to October 2022 accounted for 45.6 percent of the annual targeted deficit
with both revenue and expenditure being on course to reach targeted levels. High fiscal deficit
and a contracting economy resulted in the public debt rising to close to 90 percent of GDP in
FY2020. A moderation in the deficit and pickup in economic activity helped public debt to decline
to 84.2 percent of GDP in FY2021.

4. After posting a surplus in FY2020, the current account reverted to a deficit of 1.2 percent
of GDP in FY2021 as merchandise imports surged while services exports remained stagnant.
Private transfer, including remittances, remained strong with net inflow of USD 81.2 billion in
FY2021. Net FDI inflows remained robust at USD 38.5 billion. During Q1 of FY2022, the current
account deficit widened to 2.8 percent of GDP mainly due to the widening of trade deficit. Although

1 The income group classification for fiscal year 2020 is based on World Bank criteria.
2 Data are based on fiscal years. Fiscal year 2021 (FY2021) begins on 1 April 2021 and ends on 31 March 2022.
3 On Nov. 8, 2016, India’s government announced withdrawal of the legal tender of INR500 and INR1,000 notes, which

accounted for 86 percent of the value of currency in circulation, and introduction of new INR500 and INR2,000 notes.

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remittances and net FDI inflows remained robust, foreign portofolio investment recorded net
outflows. External debt stood at USD 617.1 billion in June 2022. India’s reserve holdings declined
by 17 percent between January and October 2022 as the central bank aimed to reduce currency
volatility. Since November 2022, reserves have increased and stands at USD 564.1 billion as of
Dec 09, 2022. Reserves remain adequate according to conventional measures.

5. In June 2022, Fitch revised India’s outlook to stable in line with Moody’s and S&P, while
retaining the BBB- rating. In June 2020, Moody’s downgraded India’s rating to Baa3 with a
negative outlook but revised the outlook to stable in October 2021 while retaining the Baa3 rating.
In July 2021, S&P retained India’s rating at BBB- with a stable outlook.

B. Economic Indicators
Selected Macroeconomic indicators (2019-2022)
Economic Indicators FY2019 FY2020 FY2021 FY2022* FY2023*
Real GDP growth 3.7 -6.6 8.7 6.8 6.1
CPI Inflation (average, % change) 4.8 6.2 5.5 6.9 5.1
Current account balance (% of GDP) -0.9 0.9 -1.2 -3.5 -2.9
General government overall balance (% of GDP) -7.5 -12.8 -9.9 -9.8 -9.0
General government gross debt (% of GDP) 75.1 89.2 84.2 83.4 83.8
Public gross financing needs (% of GDP) 11.6 17.2 16.5 15.2 14.4
External debt (% of GDP) 19.5 21.4 21.8 21.7
Gross international reserves (USD billions) 2/ 475.6 579.3 617.6 564.1
Exchange rate (INR/USD, EOP) 2/ 75.4 73.5 75.8 82.6
Note: FY 2021 ran from April 1, 2021 to March 31, 2022
* Denotes projected figures
1/Data for 2021-22 are AIIB Staff Projections based on IMF
2/Reserves and exchange rate are sourced from RBI and pertain to early-December 2022.
Source: IMF World Economic Outlook October 2022, Reserve Bank of India, and IMF Country Report
21/230.

C. Economic Outlook and Risks

6. The economy is expected to grow at 6.8 percent and 6.1 percent in FY2022 and FY2023
respectively, according to IMF. The severity of the COVID-19 pandemic is expected to subside with
a pickup in vaccination rate. However, an expected global recession and further monetary
tightening as a response to fighting domestic inflation would curb demand. Private consumption
will be affected as higher inflation erodes away purchasing power. The government’s subsidized
food, fertilizer and gas distribution will help offset some of the effects of high inflation. High policy
rates may constrain investment spending. Agriculture growth may be subdued due to uneven
monsoon and lower sown area while higher borrowing cost and commodity prices may impact
manufacturing sector.

7. Overall inflation is expected to remain elevated at around 6.7 percent in FY2022 before
moderating to ~5 percent from FY2023 onwards due to easing of commodity prices. In May 2022,
the RBI indicated withdrawal of its accommodative stance in response to sustained inflation.
Persistent domestic inflation and the fear of imported inflation through strengthening of the dollar
may push the RBI to further raise interest rates.

8. General government fiscal deficit in FY2022 is expected to moderate slightly to 9.8 percent
of GDP as tax revenues increase on the back of improved economic activity. Fiscal pressures

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could strengthen due to rising subsidy burden and as an hikes in policy rate increase the cost of
borrowing.

9. Public debt, is expected to further moderate to 83.4 percent of GDP in FY2022 and is
expected to remain stable in the medium term. Despite being high, India’s public debt remains
sustainable given favorable debt dynamics and the projected economic growth trend in the
medium term. Furthermore, with public debt having a long and medium maturity, being
denominated in domestic currency, and primarily held by residents, the debt profile is favorable.
India’s external debt is expected to remain stable.

10. The current account deficit is projected at 3.5 percent of GDP for FY2022 owing to a slower
than expected export growth due to the global slowdown and a higher import bill. Remittances
may remain strong as a depreciating rupee makes remittances more lucrative.
.

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Annex 6: Gender, Social Inclusion, Gender-Based Violence

1. In addition to the project’s main objective of improving transport connectivity, the proposed
project is designed to have a positive impact on advancing gender equality and empowerment of
women. The project will contribute to the vision of Comprehensive Mobility plan (CMP), 2019 for
Chennai Metropolitan Area to attain people-centric transport system that provides integrated, safe
and convenient mobility to all transport users, especially women, children, and other vulnerable
groups.
2. The Government of India has launched several initiatives to improve social, political, and
economic empowerment of women and girls 38 . However, gender gaps remain. The World
Economic Forum has ranked India 140th among 156 countries in the 2021 Global Gender Gap
Report, plummeting 28 positions from 2020. In South Asia, the country stands in 6th position.
Likewise, Gender Inequality Index (GII) which measures gender disparity in empowerment and
labor market, ranks India 123rd among 162 countries. The major attributing factor to the low
ranking of the country includes the low labor participation rate of women (20.5%) as compared to
men (76.1%).
3. The National Family Health Survey-5 (NFHS) (2019-2021) 39 demonstrates that Tamil
Nadu is one of the best performing states on different parameters related to gender equality,
including a higher female labor force participation rate (FLFPR).40 Nonetheless, gaps remain,
especially in the effective participation of women in formal employment and the prevalence of
gender-based violence.41 38.1 percent of ever-married women aged 18-49 experienced gender-
based violence (GBV), figure quoted by the NFHS. The figure is higher than the national average
of 29.3 percent. In the midst of growing incidents of harassment in public spaces, a reputable
Indian daily in March 202242 questioned the safety of women in Chennai. The paper reported that
an overwhelming proportion of women (over four-fifths) experienced sexual harassment on public
transport, per a 2019 survey.
4. In December 2021, the state government of Tamil Nadu presented a new draft policy for
women to enhance access of women to all services (e.g., health, education, employment, skills,
and training), reduce discrimination, and eliminate violence against women. 43 Core policy
objectives comprise increasing women's participation in the workforce leading to a 40% share of
Gross State Domestic Product and providing safe and women-friendly public spaces and
workspaces. The policy further reiterates its commitment to making all forms of transport systems
gender and disabled friendly. One of the activities proposed by the policy is to conduct regular
third-party gender safety audit(s) to ensure safe public workspaces for women. Additionally, the
state’s policy for women has envisioned the creation of 10,000 jobs for women. The Prevention

38 https://cms.tn.gov.in/sites/default/files/documents/TN_Policy_Women_2021_draft.pdfhttps://pib.gov.in/PressReleas
ePage.aspx?PRID=1707475#:~:text=Beti%20Bachao%20Beti%20Padhao%20(BBBP,and%20security%20for%20wo
rking%20women.
39 http://rchiips.org/nfhs/NFHS-5_FCTS/Tamil_Nadu.pdf
40 The rural FLFPR for Tamil Nadu is 35.1%, which is 15.4% higher than the national figure. Urban FLFPR in TN is

23.6%, 7.5% higher than all of India average.

41 https://wcd.nic.in/sites/default/files/draft%20national%20policy%20for%20women%202016_0.pdf
42 https://www.newindianexpress.com/cities/chennai/2022/mar/22/is-chennai-really-safe-for-women-question-arises-
amid-growing-incidents-of-harassment-at-public-spaces-2432765.html
43 https://cms.tn.gov.in/sites/default/files/documents/TN_Policy_Women_2021_draft.pdf

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of Sexual Harassment of Women at Workplace Act 2013 requires setting up of an Internal

Complaints Committee.
5. To complement the policy efforts, the government has also launched programs that target
gender equality and women’s empowerment. For example, the Greater Chennai Corporation has
set up a gender and policy lab, under the Chennai City Partnership project, which is jointly
financed by the World Bank and the AIIB. The objective of the lab is to make Chennai safer and
bring gender inclusivity to projects. One of the priorities of the gender lab is to conduct safety
audits, which will guide the CPRR Gender Action Plan (GAP).
6. Advancing gender equality, promoting women’s empowerment, and enhancing access to
all transport service users is an important and deliberate objective of the CPRR project; thus,
gender equality and inclusion dimensions have been mainstreamed through the design,
implementation, and monitoring of the project interventions. In particular, the project will focus on:
a) creating gender-friendly, equitable, and accessible infrastructure; b) expanding women’s
access to employment, and c) addressing gender-based violence. The project will take active
steps to ensure that project constructed infrastructure is inclusive and accessible to vulnerable
groups, including women, children, and persons with disabilities. Likewise, women’s access to
employment will be expanded through skills development training in construction, operations, and
maintenance work, as found feasible. To address GBV, the project will help set up an internal
complaints committee as required by the law to ensure that sexual harassment-related grievances
are handled timely and effectively. Further, the project will develop and implement Code of
Conduct on GBV/sexual exploitation and abuse (SEA) at the construction site for all construction
workers to reduce GBV/SEA risks. This measure is intended to address potential GBV/SEA risks
due to the presence of migrant workers on large construction sites like the planned construction
packages proposed under the project.
7. The following approaches will be used to mainstream the gender equality and inclusion
perspective in the project:
a) Incorporation of gender-specific performance indicators and targets in the project’s
monitoring framework, operations manual, and implementation plan; and
b) Development and implementation of the Gender Action Plan (GAP)
8. The following are the proposed indicators for the project:
Area 1. Gender-friendly and accessible infrastructure
Gender safety audits 44 and incorporation of audit recommendation(s) to ensure that project
constructed infrastructure incorporates gender-sensitive, equitable, safe, and accessible features
in the project’s design and implementation.
Area 2. Addressing GBV/SEA risks
Mandatory introduction of workers’ GBV Code of Conduct in project contracts.
Area 3. Enhancing women’s access to employment
Skill training for women (including engineering surveys, quality management, construction
supervision and heavy construction equipment operation).

44 With the help of Tamil Nadu Gender Lab and incorporate audit recommendation (s)

41