THE WORLD BANK OFFICIAL IBRD* IDA I WORLDBANKGROUP DOCUM ENTS June 21, 2019 Mr. Tom Jose Chief Secretary Government of Kerala Secretariat Thiruvananthapuram 695001 Kerala Re: Second Kerala State Transport Project - KSTP-II (Loan No.8254-IN) Amendment to Project Agreement and Performance Monitoring Indicators Dear Mr. Jose: We refer to: (i) the loan agreement between India ("Borrower") and the International Bank for Reconstruction and Development ("Bank") dated June 19, 2013 ("Loan Agreement"); and (ii) the project agreement, of the same date, between the Bank, and the State of Kerala ("Project Implementing Entity") ("Project Agreement"), both for the Second Kerala State Transport Project - KSTP-II ("Project"); as well as (iii) the letter of same date from the Project Implementing Entity to the Bank regarding the performance monitoring indicators for the Project, agreed further to Section II.A of Schedule 2 to the Loan Agreement, and Section II.A.1 of the Schedule to the Project Agreement ("PMI Letter"). We further refer to the letter dated January 15, 2019 from the Department of Economic Affairs, Ministry of Finance requesting a restructuring of the Project. We are pleased to inform you that the Bank concurs with the above-mentioned request, and proposes to amend the Project Agreement and the PMI Letter as follows: (A) Amendments to the Project Agreement 1. Section 2.01 is hereby amended to read as follows: "2.01. The Project Implementing Entity declares its commitment to the objectives of the Project. To this end, the Project Implementing Entity shall carry out Components A, B, C, D. 1 and D.3 of the Project through the PWD, and Component D.2 of the Project through the LSGD, in accordance with the provisions of Article V of the General Conditions, and shall provide promptly as needed, the funds, facilities, services and other resources required for the Project." 2. Section I of the Schedule, a new paragraph H is added to read as follows: India Country Office, 70 Lodi Estate, New Delhi 110 003, India P.O. Box 416, Phone: +911141479301 / +911149247601 Mr. Tom Jose -2- June 21, 2019 "H. Climate and Disaster Resilience Enhancement Activities 1. For purposes of implementing activities for the constructing, rehabilitating and/or improving of the PWD Roads, and the LSGI Roads set forth in Component D of the Project, the PWD and the LSGD shall identify the roads in accordance with prioritization/eligibility criteria, acceptable to the World Bank and further described in the Project Implementation Plan, which criteria shall include, inter alia: (a) completion of the notifications for any necessary land acquisition; (b) securing of all applicable environmental clearances (including any mandatory public hearings), forestry clearances, coastal regulatory zone clearances, and governmental permits for construction activities; (c) completion of the environmental and social screening and assessments of the proposed road construction activities, pursuant to the EMF, the ECoP, the RPF, the RPF-TDF, and the preparation, approval and disclosure of the respective EIA, EMP, RAP, and SMP-TDP, as the case may be; (d) payment, in full, of compensation and/or resettlement assistance to Displaced Persons as per the applicable RAP and implementation of SMP- TDP; (e) engagement of the respective Construction Supervision Consultant or Independent Engineer, as the case may be; and 2. The Project Implementing Entity shall, submit proposal for each PWD Road and LSGI Road selected following the prioritization/eligibility criteria, acceptable to the Bank and further described in the Project Implementation Plan, to the Bank for written concurrence prior to the award of the civil works contracts for such road to the respective contractor(s)." 3. In Section I.A.1 of the Schedule, a new sub-paragraph (e) is added to read as follows: "(e) a project management unit within the LSGD (the "LSGD-PMU"): (i) headed by a chief engineer and assisted by competent staff, all with experience and qualifications, in numbers and under terms of reference acceptable to the Bank, which team shall also comprise of executive and assistant engineers, procurement specialist, finance management specialist, social safeguards specialist, and an environmental specialist, as deemed necessary by the LSGD in consultation with the Bank, as well as divisional project implementation units, all with functions, composition, staffing and resources acceptable to the Bank; and (ii) provided with such powers, financial resources, functions and competencies, acceptable to the Bank, as shall be required for it to carry out the day-to-day implementation of its Mr. Tom Jose -3- June 21, 2019 respective part of the Project activities, including inter-institutional coordination, procurement, financial management and monitoring, external communications and reporting activities, as well as ensuring implementation of/compliance with the Safeguard Documents." 4. Section I.B of the Schedule, a new sub-paragraph (c) is added to read as follows: "(c) by no later than July 31, 2019, update the Project Implementation Plan, with the prior concurrence of the Bank, and adopt the Project Implementation Plan as updated for carrying out the Project." 5. Section I.E.1(a) of the Schedule is hereby amended to read as follows: "(a) carry out the Project in accordance/compliance with the Environmental Management Framework ("EMF"), the Environmental Impact Assessments ("EIAs"), the Environmental Management Plans ("EMPs"), the Environmental Codes of Practice ("ECoP"), the Resettlement Policy Framework ("RPF"), the Resettlement Policy Framework cum Tribal Development Framework ("RPF- TDF"), the Resettlement Action Plans ("RAPs"), the Social Management Plan cum Tribal Development Plans ("SMP-TDPs"), and the instruments (to be) prepared pursuant to paragraphs 2 of this Sub-Section (the "Safeguard Documents"), and pursuant to the objectives, policies, procedures, time schedules, compensation arrangements and other provisions set forth therein, in a manner and substance satisfactory to the Bank; and" 6. Section I.E.2 of the Schedule, a new paragraph (c) is added to read as follows: "(c) PWD Roads and LSGI Roads, and/or any other sections thereof, agreed in writing between the Project Implementing Entity and the Bank, for which detailed environmental assessments and management plans, or social impact assessments have not been completed, updated and/or finalized as of June 30, 2019, until and unless: (A) the Project Implementing Entity submits to the Bank the relevant updated/finalized environmental assessment reports and environmental management plans prepared pursuant to the EMF and the ECoP, and social impact assessment reports and action plans prepared pursuant to the RPF and the RPF- TDF; and (B) the Bank has reviewed said documents and notified in writing the Project Implementing Entity of its satisfaction therewith." 7. Section I.E.4 of the Schedule is hereby amended to read as follows: "4. The Project Implementing Entity shall ensure that: (a) each contract for civil works under the Project includes the obligation of the relevant contractor to comply with the relevant Safeguard Documents, including: (i) measures to assess and manage the risks and impacts of labor influx; and (ii) Mr. Tom Jose -4- June 21, 2019 codes of conduct that should be provided to and signed by all workers, detailing measures on environmental, social, health and safety, gender-based violence and violence against children, all as applicable to such civil works commissioned/awarded pursuant to said contract; and (b) all consultancies related to technical assistance, design and capacity building under the Project, the application of whose results could have environmental, social and health and safety implications, shall only be undertaken pursuant to terms of reference reviewed and found satisfactory by the Bank; and such terms of reference shall require the technical assistance, design and capacity building activities to take into account the requirements of the applicable Bank Safeguard Policies." 8. Section I.E.5(b)(ii) of the Schedule is hereby amended to read as follows: "(ii) quarterly reports prepared by: (A) the Construction Supervision Consultant in respect of Sub-components A.1, D.1 and D.2 of the Project; and (B) the Independent Engineers, in respect of Component A.2 of the Project, said reports to assess the respective contractors' general compliance with the Safeguard Documents, the social and environmental impact of Project activities, and the results of the mitigation or benefit-enhancing measures applied thereto, with particular emphasis on the implementation and results of resettlement activities, during the period preceding the date of each such report." 9. Section II.A. 1 of the Schedule is hereby amended to read as follows: "A. Project Reports 1. The Project Implementing Entity shall monitor and evaluate the progress of the Project and prepare Project Reports for the Project in accordance with the provisions of Section 5.08(b) of the General Conditions and on the basis of indicators agreed with the Bank as set forth in the Project Implementation Plan. Each such Project Report shall cover the period of one calendar quarter and shall be furnished to the Borrower and the Bank not later forty- five (45) days after the end of the period covered by such report." (B) Amendments to the Performance Monitoring Indicators Letter As a result of the modifications to the Project's components, the attachment to the PMI Letter is updated to read as set forth in the Attachment hereto. The updated indicators will now be comprised in the Project Implementation Plan. Except as specifically provided in this amendment letter, all other provisions of the Project Agreement shall remain in full force and effect. The Loan Agreement is also being amended as reflected in an amendment letter to the Loan Agreement of even date herewith. Mr. Tom Jose -5- June 21, 2019 Please confirm the Project Implementing Entity's agreement with the foregoing amendment by countersigning and duly dating the confirmation form set forth herein below, and returning one fully signed original of this letter of amendment to us. This amendment letter shall become effective as of the date of the last countersignature of the two amendment letters (including this one) prepared further to the above-mentioned request, upon receipt by the Bank of: (i) a duly countersigned original of this letter by the authorized representative of the Project Implementing Entity; and (ii) a duly countersigned original of the amendment letter to the Loan Agreement by the authorized representative of the Borrower, except for the provision related to the extension of the Closing Date under paragraph (A) therein, which becomes effective upon dispatch of the amendment letter to the Loan Agreement. Sincerely, Shanker Lal Acting Country Director, India AGREED: STATE OF KERAL By: Name: * ANAND SINOH. IAS ...tewiMy toG0rt Public Works Depariment Title: Govt. Secretariat, Tvpm-695001. Date: o7 - 0( - cQO\9 Mr. Tom Jose -6- June 21, 2019 Cc Ms. S. Aparna, Executive Director (India), World Bank Mr. Santosh Dattatraya Vaidya, Sr. Advisor to the Executive Director, World Bank Mr. Suresh Yadav, Advisor to the Executive Director, World Bank Ms. Bandana Preyashi, Director (WB), Department of Economic Affairs, Ministry of Finance Mr. Sukhbir Singh, Controller of Aid Accounts & Audit, Department of Economic Affairs, Ministry of Finance Mr. Sanjeev Kaushik, Principal Secretary (Finance), GoK Mr. Kamala Vardhana Rao, Principal Secretary, Public Works Department, GoK Mr. Anand Singh, Project Director, Kerala State Transport Project II, GoK Mr. Tom Jose -7- June 21, 2019 Attachment Revised Results Framework and Monitoring India: Kerala State Transport Project II Project Development Objective PDO Statement The project's development objective is to improve condition, traffic flow and road safety with a focus on Vulnerable Road Users on selected roads in Kerala, and to enhance resilience to climate change and disaster risk. Project Development Objective Indicators Cumulative Target Values Data Responsi Source/ bility for End End Target Methodo Data Indicator Cor Unit of Target - - YR7 Freque logy Collectio Name e Measure Baseline YR1 YR2 YR3 YR4 TRe (revised n (original) figures n red) Direct project X 13.4 14.8 14.8 beneficiar X 3.i million million End of Census Number million' KSTP ies, of (7 million) (7.7 (7.7 project data which million) million) female A reduction Kasaragod Kasarago Kasaragod of travel Minutes to d to to End of Consulta time on Kanjanghad Kanjangh Kanjangh r nt PWD the : 29 ad: 25 ad: 25 proj reports improved Assumes direct beneficiaries are all those living in the eight districts covered by project. Mr. Tom Jose -8- June 21, 2019 project Pilathara to Pilathara Pilathara roads (3 Pappinisser to to priority y: 21 Pappiniss Pappinisse corridors) ery: 19 ry: 19 Thalassery to Thalasser Thalasser Valavupara: y to y to 58 Valavupa Valavupar ra: 50 a: 50 Improved Number ndingof Km quality of m O 0 120 250 363 363 Annual RMMS PWD qualiy of with IRI0 project <4 roads A Number reduction of in annual fatalities/ 802 56 65 First fatality year Annual Incident RSA count of Number 493 34 404 Reports total and of Vulnerabl vulnerabl 2 The baseline estimates for fatality count on the demonstration corridor has been drawn from the 2012 Kerala State Crime Records Bureau data as available. During the implementation of the project a detailed review and assessment of fatality estimates will be done which may revised the baseline values. In addition to the total fatality count, the assessment will also identify the fatality count for Vulnerable Road Users and female road users for the purposes of the results framework. The fatality count for Vulnerable Road Users was estimated using the fatal victim to crash ratio for all road users and then applying the same ration for Vulnerable Road User victims. The Vulnerable Road Users identified in the results framework includes pedestrians and passengers of two wheelers. 4 These revisions are necessitated by an increase in vulnerable fatality count on the selected corridor since the project baseline, with total fatalities remaining unchanged at a rate of 1/km/year, rather than decreasing. Current counts for number of fatalities/year and number of vulnerable fatalities/year on the demonstration corridor are 79 fatalities/year, of which 52 are vulnerable fatalities/year (2017), as against 80 and 49 as baselines respectively; source: NATPAC analysis. Mr. Tom Jose -9- June 21, 2019 e Road e Users on fatalities/ demonstra year tion corridor Climate Climate change change and and disaster resilience disaster resilience vulnerabili vulnerabil ty ity assessment Consulta assessmen Text None undertaken Annual nt KSTP t on all & reports incorporat new ed project in all corridors designs for the new taken up prjc underproject une corridors RKI taken up under RKI Intermediate Results Indicators Cumulative Target Values Data Responsi Source/ bility for Unit Methodo Data Indicator Cor of Basel YRI YR Y End Target Freque logy Collectio . Y1YR3 End Target (rvsd.c Name e Measu me 2 R4 (revised) ncy n re Mr. Tom Jose -10- June 21, 2019 Component A: Road Network Upgrading State Km 25 Consulta Highways X upgrad 0 120 0 363 363 rly nt KSTP Upgraded ed reports Financial Financial closure closure Indicator Consulta .Yes/N .Annua achieved on No achieved on proposed to nt KSTP PPP pilot selected be dropped I reports project pilot Component B: Road Safety Component: Pilot safety Km Consulta corridor impro 0 80 80 80 rly nt A developed ved reports Number of district level road safety improvement Quarte Consulta schemes 0 4 6 10 5y nt RSA implemented reports through challenge fund Component C: Institutional Strengthening Component: . . Review of Study on Study on Semi- Modermzatio YsN.. . .PWD fPWDNo existing IT institutional institutional annual PWD system and and reports Owing to change in mode of implementation of this sub-component from PPP to EPC. 6 The end target is proposed to be revised because the state is taking other initiatives such as Safe Kerala program. Also, since only 5 districts have evinced interest, it is proposed to do more in these districts with the same resources, rather than spreading resources thin. Mr. Tom Jose -11- June 21, 2019 undertaken financial financial and options for options for recommend managemen managemen ations t of road t of road adopted network network completed completed and and recommend recommend ations ations adopted adopted Strategic New RAM Functioning options software Annual Annual . Road Asset Yes/N study for implemente maintenanc maintenanc Semu- PWD Management o No maintenanc d on core e plans e plans annual reports System e of road road disclosed disclosed reports PWD network network completed Communicati Communic Website . At least two At least two At least two ons strategy ations ..and ondtaeyain consultation consultation cosutaiod and strategy s s consultation Semi- outreach PWD/ interfaces for Yes/N No developed s/ s/ annual materials KSTP/ public 0 and action stakeholder stakeholder stakeholder DIPR engagement plan forums forums forums implemented adopted held/year held/year held/year Survey Survey undertaken, data Regular road Yes/N Baseline and user Final Final Every user surveys o survey feedback survey survey two PWD conducted undertaken facilitated undertaken undertaken years through developmen Mr. Tom Jose -12- June 21, 2019 t of states mobile government platform Component D: Climate and Disaster Resilience Enhancement Component: Number of Consulta km of PWD Semi- nt PWD/KS roads re- Km 0 75 annual reports/ TP built/reconstr reports Survey ucted data Number of Consulta km of LSGI Semi- nt roads re- Km 0 300 annual reports/ LSGD built/reconstr reports Survey ucted data