Railway Sector Improvement Project

The project had several significant components in the reform program, as well as the investment subprojects. The reform program covered almost the gamut of railway performance, and the selected subprojects were along the busiest routes of the Indian Railways network. This complexity was bound to cause challenges. There were shortfalls in the readiness of some of the projects because of land acquisition and procurement delays. As a result, some projects had to be dropped. The purpose of the accounting reforms was to improve cost effectiveness, efficiency, and sustainability. Though progress in the accounting reforms was not commensurate with the intended target at appraisal, during the processing of the subsequent loan, ADB assessed the reform program as ambitious, and determined that substantial progress had been achieved. There were significant delays in the implementation of the investment subprojects, attributable to two factors: (i) initial delays on account of issues in land acquisition and procurement; and (ii) extensive delays in getting blocks for integrating the newly constructed lines with the operational lines, as the projects were on the busiest routes of Indian Railways with almost no lean periods. With the completion of the subprojects, the respective sections have seen a substantial boost in traffic throughput, which is also reflected in the significantly high EIRR and FIRR at completion despite delays. Details of reasons for the delays in implementation appear in section II.E.