KSHIP-III (ADB 2nd Loan)

Under ADB TA 7324-IND, Technical Assistance for Karnataka State Highway Network Improvement, consultant M/S Scott Wilson Pvt. India Ltd., completed a study for identifying a ‘Core Road Network’ (CRN) in the state. This was updated in 2012, to reflect some changes in connectivity criteria. M/S Deloitte Touche Tohmatsu India Pvt. Ltd. has prepared a pre-feasibility report on rehabilitation and upgrading of CRN identified by the previous study, on a Public Private Partnership (PPP) basis. This preliminary study, based on broad financial assumptions, attempted to categorize projects from the CRN that could be taken up on some form of PPP, as distinct from regular construction contracts.

Based on the CRN study and the pre-feasibility assessment for PPP, KSHIP identified 9 key road corridors, sections which are proposed to be taken up for upgrading through various schemes. KSHIP then commissioned a feasibility of the identified 9 road corridors based on 7-day traffic counts and preliminary cost estimates.

The Feasibility Study initially taken up covering 4403 kms across nine corridors is further curtailed to 3400 kms excluding the following two Corridors no. CNS3 & CEW 30 owing to upgrading of a length of 1003 km of SHs to National Highway.

  • CNS 3: Kerala Border (Ooti) - Gundlupet - Nanjangud - Mysore - SR Patna - Pandavapura - Nagamangala - Turuvekere - Chikkanayakanahalli - Hiriyur - Challakere - Molakalmuru - Bellary - Siraguppa - Sindhanur - Lingasguru - Shorapur - Shahapur - Jevargi - Gulbarga - Humnabad - Bidar - MH Border and
  • CEW 30: Bantwal - Madikeri - Mysore - Mandya – Bangalore
Accordingly, the Financial Feasibility Study has been carried out for the remaining Seven Corridors listed below:
Sl No Corridor No Corridor Name Length in Km
1 CNS 5 Bagalkot - Gadag - Shirahatti - Ranebennur - Honnali - Shimoga - Bhadrvathi - Chickmagalur - Belur - Hassan - Holenarasipura - K.R.Nagar - Bilikere - Mysore - T.N.Pura - Kollegala - M.M.Hills - Palaar - T.N. Border (Selam) 683.30
2 CNS 7 Kerala border - Virajpet - Madikeri - Somwarpet - Sakaleshpura - Mudigere - Aldur- Balehonnur- NR Pura- Umblebailu- Lakkinakoppa- Shimoga - Koppa - Shikaripura - Hangal - Mundgod - Kushtagi - Dharwad - Bylahongala - Gokak - Raibagh - MH Border (Miraj). 673.10
3 CNS 13 A.P. Border (Medak) Aurad - Bhalki - Basavakalyana - Aland - Afzalpur - Indi - Bijapur - Jamakhandi - Mudhol - Ramdurga - Savadathi - Dharwad - Haliyal - Supa – Karwar 672.60
4 CEW 14 (Guti) Kumta- Sirsi- Yekkumbi-Haveri- Harappanahalli- Kottur- Kudligi - Molakalmuru - A.P. Border 296.00
5 CEW 16 Kumta - Siddapura- Soraba - Shikaripura- Honnali - Chitradurga - Challakere - Pavagada - A.P. Border (Kadamadgi) 407.40
6 CEW 18 Byndoor- Halkal - Kollur - Hosnagar - Aayanur - Shimoga - Lakkavalli - Tarikere - Ajjampura - Hosadurga - Hiriyur - A.P. Border (Madakasira) 343.40
7 CEW 28 Kerala border (jalsoor) - Sulya - Bisleghat - Somwarpet - KR Pet - Nagamangala - Magadi – Bangalore 323.70
Total length 3399.5
KSHIP-III FS map

Map depicting 3400 kms of roads taken in Feasibility Study

On the basis of this feasibility study, a set of roads aggregating to about 1200km was identified for preparation of detailed project reports (DPRs) for posing these projects to ADB. Two consultant consortia were engaged by KSHIP during July-2015 to prepare the detailed project reports (DPRs).

DEA communicated the Screening Committee’s approval by its letter of 22-Feb-2013, for a loan proposal of $350 million from ADB. KPWD would be the EA for the project, and KSHIP (the PIU in KPWD), would be the Implementing Agency. This arrangement is the same as for KSHIP 1 & 2. ADB’s concept approval for this project has been received in July-2014.

DPR consultants were recruited by KSHIP and mobilized in July-2015. ADB recruited a consortium of international and national consultant firms to carry out the project preparatory technical assistance (PPTA), and these mobilized in August 2015. Further, as per a limit placed by the Finance Department of the Government of Karnataka on the total cost of the project, it is proposed to carry out upgrading works for about 418 km of State Highways, under Hybrid Annuity mode in 3 packages as mentioned below. The projects entail 75% construction grant and 9 years of concession period which includes 2 years of Construction and 7 years of Operation and Maintenance.

Package Name Package Details Length in Km Construction Period Operation & Maintenance Estimated Project Cost (INR Crores) Concessionaire Independent Engineer
Kollegal to Hannur (SH-79), Chintamani to AP Border (SH-82) and Bengaluru to Magadi (SH-85) to NH-75 via Chikkamudigere and Iyandahalli (MDR) (a)Two Laning with Paved Shoulder of Kollegal to Hannur (km 0.000 to km 4.900 along Kollegal and Madhuvanhalli Bypass and from km 66.888 to km 85.770 of SH-79, length 23.8 kms);
(b)Two Laning with Paved Shoulder of Chintamani to AP Border (km 47.203 to km 86.977of SH-82, length 39.8 kms); and
(c) Four Laning of Bengaluru (NICE Road) to Magadi (km 15.325 to km 50.850 of SH-85) and Two Laning with Paved Shoulder of connector from Magadi to NH 75 via Chikkamudigere and Iyandahalli (km 50.850 to km 66.150 of MDR), length 50.8 kms; with total length of 114.4 km in the State of Karnataka, India on Hybrid Annuity basis.
114.4 2 Years 7 Years 895 Under Procurement Under Procurement
Magadi to Near Somwarpeth (SH-85) Two Laning with Paved Shoulder of Magadi to near Somwarpeth (Km 51.000 to Km 221.833 of SH 85, excluding the following common sections with Huliyudurga bypass km 76.520 to 78.410, common portion with SH 84 between km 88.700 to km 90.380 and common portion with NH 150 A in Nagmangala km 111.960 to km 113.260), 166 km in the State of Karnataka, India on Hybrid Annuity basis. 166 998
Gadag to Honnalli (SH-57 and SH-26) Two Laning with Paved Shoulder of Gadag to Honnali (Km 105.500 to Km 205.290 of SH 57 and Km 215.335 to Km 253.713 of SH 26), 138.2 km in the State of Karnataka, India on Hybrid Annuity basis. 138.2 805
Total 418.6 2698

Engineering Design: The engineering design for KSHIP III Project roads has been formulated as per latest IRC codes and also keeping in mind the best industry practices. The improvement proposal was based on capacity augmentation upon traffic study and forecast based on careful review of existing road network, future economic development in the region and safety of road users.
The improvement proposals and geometric design for the project road has been done generally following the latest manual IRC:SP:73 (2015) for sections proposed with 2-lane with paved shoulders with minimum Corridor of Impact (CoI) of 26 m & IRC:SP:84 (2014) for sections proposed with 4-lane divided carriageway with minimum CoI of 38 m.
The guiding principles for the improvement proposal formulated are summarized below,

  1. Flexible Pavement has been adopted for the project road and is designed for a minimum period of 20 years.
  2. Improved safety of Highway users, Pedestrians of the project road by provision of improved Junction designs, grade separated structures, pedestrian subway and other Road Safety Measures as per latest technology available in the market.
  3. Minimal Impact on existing settlers in congested settlements by provision of realignment and Bypasses.
  4. Improvement proposal is aimed at providing all weather access to public and social service facilities such as government agencies, health centers, and schools and tourist destinations
  5. Design of Bridge Structures for 100 year storm, to account for climate change
  6. Improved Storm water management system along the project road by provision of road side drains for both urban (covered lined drain) and rural sections (earthen drains) and also by provision of cross drainage structures.
  7. To minimize impact on settlers and R&R requirement, project road passing through settlements is proposed with customized cross-sections within 16 m CoI for 2-lane urban section with footpath, drain and utility space on both sides and 20 m CoI for 4-lane urban sections with footpath, drain and utility space on both sides.
  8. Improvement proposal also include road side facilities such as Bus Laybyes with bus shelters, Truck Laybyes, Street Lightings with solar power, land for Rest Areas & Toll Plazas, raised Pedestrian crossings & etc
  9. Adequate safety provisions like crash barriers, road signs, road markings, speed humps etc have been made.

Environmental Safeguard: Environmental Screening of the project roads were carried out by the DPR Consultants as per ADB’s Safeguard Policy and Guidelines of Government of India for Project Categorization, requirement of Statutory Clearances as well as identification of critical environmental issues, which is summarized below.

Project Roads Project Categorization Requirement of Statutory Clearances Critical Issues identified
MoEFCC ADB’s Safeguard Policy Environment Wildlife Forest Archaeological
Kollegal to Hannur (SH-79) - B No No No No
  • Diversion of Forest Land
  • Tree felling
  • Impact of traffic noise on Sensitive Receptors
Chintamani to AP Border (SH-82) - B No No Yes No
Bengaluru to Magadi (SH-85) to NH-75 via Chikkamudigere and Iyandahalli (MDR) - B No No No No
Magadi to Near Somwarpeth (SH-85) - B No No Yes Yes
Gadag to Honnalli (SH-57 and SH-26) - B No No Yes No

As per ADB Safeguard Policy Statement 2009, proposed project roads are “Category B”. Road specific Initial Environmental Examination (IEE) Report has been prepared to identify significant potential environmental impacts associated with the construction and operational phases of the proposed development. Most of the adverse impacts of road project during construction period are temporary in nature. These impacts have been minimized through specific engineering solutions. Environment friendly construction methodology has been incorporated into the project design and Environmental Management Plan has been prepared incorporating various modern technologies and guidelines to reduce the environmental impacts of highway construction to make it a Green Highway. Environmental safeguard measures proposed to minimize the impact includes:

  • Eccentric Geometric adjustments to minimize tree felling
  • Plantation of native indigenous trees species with large canopy cover under avenue plantation
  • Avoid cutting the giant trees to the extent possible
  • Construction of noise barrier at sensitive receptors to minimize impact of traffic noise
  • Slope stabilization using Coir Geotextile and Vetiver Grass (Bio-engineering)
  • Preservation of fertile top soil
  • Enhancement of road side water bodies and Phyco-Remediation of surface water using NUALGI
  • Adequate number to cross drainage structures proposed to maintain natural flows of streams without changing the gorge of flow at highway site
  • Rainwater Harvesting Structures to improve ground water level
  • Provision of LPG in construction camp as fuel source

Social Safeguard: The proposed improvement proposals under KSHIP III project require acquisition of about 544 hectares of land. The social safeguards including the Entitlement Matrix for the projects have been devised as per the Government of India Act “The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013”( RFCTLARR Act, 2013), and the ADB Safeguard Policy Statement 2009,

The preferred approach for land acquisition for the project will be direct purchase of private land and structures based on the provisions of Section 46 of RFCTLARR Act, 2013, relevant policies of Government of Karnataka and ADB’s SPS (para. 25, Involuntary Resettlement Requirement 2, Appendix 2, p. 48). As per SPS requirements, a third party monitor will be recruited by ADB to monitor the fairness and transparency of the direct purchase process. The land parcels which cannot be purchased through Direct Purchase, will be acquired through the process laid out in the RFCTLARR Act 2013 and the Involuntary Resettlement Standard Requirement of the ADB’s Safeguards Policy Statement, 2009. Social Safe guard measures being a key component for implementation of the improvement proposal following measures have been adopted,

  • Project Affected people (PAP) will be assisted in improving or at least regaining their pre-program standard of living;
  • Consultation on compensation, disclosure of resettlement information to PAPs,
  • Vulnerable and severely affected households will be provided special assistance;
  • Potential Opportunities for PAPs to get Developmental Benefits through existing governmental schemes, income generation activities and skill training programs;
  • Payment of compensation to PAPs including non-title holders (e.g., informal dwellers/squatters, and encroachers) for acquired assets at replacement rates;
  • Payment of compensation and resettlement assistance prior to the contractor taking physical acquisition of the land and prior to the commencement of any construction activities;
  • Provision of income restoration and rehabilitation;
  • Establishment of appropriate Grievance Redressed Mechanisms.
  • Capacity Building and Training

Budget: The project has a budgetary outlay of INR 5334.20 Crores (including contributions from US$ 350 million, ADB 2nd Loan)
ADB shall finance the upfront grant to be paid to the Concessionaire during the construction period, along with Road Safety Component, a portion of IE Services and other Institutional Developmental services amounting to INR 2102.20 Crores. This is about 40% of the total project cost of INR 5334.20 Crores.
GoK shall contribute towards the Annuity, O&M and Interest payments, Physical contingencies, utility shifting, EMP, LARR, the remaining portion for IE services and R&R consultants amounting to INR 3110 Crores. GoK shall also contribute towards the ADB Financing Charges which are estimated at INR 122 Crores. The total GoK contribution is INR 3232 Crores. This is about 60% of the total project cost of INR 5334.20 Crores.

The annual estimated expenditure profile under the above heads is as below, amounting to Total Project Cost of INR 5334.20 Crores:

Items (in Rs Crores) Nominal Year ending 31st March
FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27
Construction Grant (75%)* 1965 0 783 1182 0 0 0 0 0 0 0
Annuity Payment (as per CA) 922 0 0 9 34 59 89 127 181 257 166
O&M Payment (as per CA) 429 0 0 26 53 56 59 63 66 70 36
Interest Payment (as per CA) 533 0 0 51 102 97 90 79 64 41 9
Physical Contingencies – Authority 73 0 37 36 0 0 0 0 0 0 0
Utility Shifting Expenses 98 90 8 0 0 0 0 0 0 0 0
EMP - KSHIP Payment (Compensatory Afforestation) 14 10 4 0 0 0 0 0 0 0 0
LARR 1014 600 414 0 0 0 0 0 0 0 0
IE (50%)* 27 0 4 6 7 3 1 1 1 2 2
R&R Implementation Consultants 10 8 2 0 0 0 0 0 0 0 0
Road Safety Component and IDS services* 127.2 0 47.2 40 40 0 0 0 0 0 0
Total 5212.2 708 1299.2 1350 236 215 239 270 312 370 213
ADB Financing Charges (IDC & Commitment charges) 122
Grand Total 5334.2
Note: *Tentative amounts to be financed by ADB subject to Loan Negotiations and finalization



KSHIP III (ADB 2nd Loan) Calendar of Events

17th January, 2012: The Government of Karnataka submitted a concept note to the Department of Economic Affairs, Government of India for developing 2000-3000 km of Core Road Network (CRN) with proposed 2nd loan of US$ 500 million from ADB
26th May, 2012: ADB 2nd Loan Finance Plus proposal was submitted to Secretary, DEA
21st December, 2012: Department of Economic Affairs (DEA), GOI has given concurrence for a 2nd ADB loan of US$ 350 Million for KSHIP III in the 27th Meeting of the Screening Committee
22nd February, 2013: Department of Economic Affairs vide its letter dated 22nd February, 2013 has given approval for ADB IInd loan of US$ 350 Million for KSHIP III
7th March, 2013: 1st Tripartite Review Meeting of Asian Development Bank for KSHIP-III Project was held on 7th March 2013
April, 2013: 1st Reconnaissance Mission of Asian Development Bank for KSHIP-III Project was held in April 2013
2nd to 3rd September, 2013: 2nd Reconnaissance Mission of Asian Development Bank for KSHIP-III Project was held on 2nd and 3rd September 2013
11th November, 2013: 2nd Tripartite Review Meeting of Asian Development Bank for KSHIP-III Project was held on 11th November 2013
23rd November, 2013: Feasibility Study for a road length of 4403 kms of State Highways selected out of the Class 'A' category roads of 9078 kms of the approved CRN was taken up. This was further curtailed to 3400 kms excluding the two Corridors no. CNS3 & CEW 30 owing to upgradation of a length of 1003 km of SHs to National Highway. The Feasibility Study has been carried out for Seven Corridors. M/s Infrastructure Development Corporation (Karnataka) Ltd (iDeCK) engaged vide Government order GO No PWD 41 EAP 2013 dated 23rd November, 2013 have carried out the Feasibility Study of the roads posed under KSHIP III. On the basis of the Feasibility Study, under Priority I, 1362 kms have been shortlisted for Detailed Project Report & development with the ADB- financial assistance of USD 350 million USD under KSHIP III on DBFOT (Annuity) basis
24th to 25th February, 2014: 3rd Reconnaissance Mission of Asian Development Bank for KSHIP-III Project was held on 24th and 25th February 2014
19th July, 2014: 4th Reconnaissance Mission of Asian Development Bank for KSHIP-III Project was held on 19th July 2014. ADB’s Concept Approval for this project has been received in July, 2014
30th October, 2014: Hon. Minister, KPWD has given approval to proposal for preparation of DPR for 1362 kms identified in the Feasibility Study submitted by IDeCK on 30th October, 2014
14th November 2014: Consequently, the list of roads proposed for KSHIP III has received the approval of the competent authority of the Project, the Steering Committee under the Chairmanship of the Principal Secretary to Govt., PWP&IWTD. The Steering Committee of KSHIP in the 65th meeting held on 14th November, 2014
10th December 2014: The Project Governing Board in the 29th meeting held on 10th December, 2014 has approved the Priority I list of roads finalized above for DPR and implementation under KSHIP III
March 2015: Approval for award of DPR-TA consultants is provided by 68th Meeting of PSC after following two stage process of EoI and RFP evaluation.
July, 2015: Consultants were mobilised in July, 2015, namely, M/s CDM Smith-Crisil JV (Group-I Projects) & M/s ICT-PwC JV (Group-II Projects) at a cost of around 31 Crores (US$ 5 Mn) approximately. Out of total length of project roads of 1362 Kms, Group-I covered 696 Kms and Group-II covered 666 Kms. The Detailed Project Reports are in final stages of preparation
20th July, 2015: The ADB has approved Project Preparatory Technical Assistance (PPTA) as grant under TA no.8691-IND for KSHIP III with an amount not exceeding Rs 3.72 Crore (600,000 USD) with the objective to build on the DPRs prepared and to make the necessary checks and changes suitable for meeting ADB's requirements. The ADB has appointed Ecorys-Feedback Joint Venture as the PPTA consultants and the services have commenced from 20th July, 2015
July, 2015: The ADB team visited for initial discussions with KSHIP and consultants appointed
August, 2015: DPR Review Committee Meeting to review the project implementation procedures and highlighted in the Inception report submitted by the DPR-TA consultants
September, 2015: DPR Review Committee Meeting with PPTA and DPR-TA consultants in order to finalize the assumptions feeding into the Financial Model for the Project
21st to 22nd September, 2015: ADB Reconnaissance Mission visited on 21st and 22nd September, 2015 to monitor progress of the projects.
21st October, 2015 DPR Review Committee meeting with PPTA and DPR-TA consultants in order to finalize the Economic and Social sector assessment study
November, 2015: DPR Review Committee Meeting with PPTA and DPR-TA consultants in order to prepare the Model Bidding Documents for KSHIP-III projects
December, 2015: DPR Review Committee Meeting to review project preparation and progress achieved by the DPR-TA consultants
14th to 21st December, 2015: ADB Reconnaissance Mission visited between 14th to 21st December to track progress of the projects.
21st December, 2015: Wrap-up meeting of ADB Reconnaissance Mission with the DEA was held on 21st December, 2015
December, 2015: ADB International Business Opportunity Seminar at Delhi used to showcase upcoming KSHIP-III projects
January, 2016: DPR Review Committee Meeting with PPTA and DPR-TA consultants in order to finalize the modalities for procurement of the Independent Engineer
January, 2016: Legal review of modalities for Land Acquisition for KSHIP-III projects
February, 2016: Invest Karnataka 2016 Summit at Bangalore used to showcase upcoming KSHIP-III projects
February, 2016: Legal review of KSHIP-III contract documents by DPR-TA consultants
15th to 23rd February, 2016: ADB Reconnaissance Mission visited between 15th to 23rd February to review Social and Economic Impact Assessments prepared by the DPR-TA consultants for KSHIP-III Projects.
23rd February, 2016: Meetings with Principal Secretary, PWD and Principal Secretary, Finance Department, ADB on budgetary provision on 23rd February 2016
24th February, 2016: Wrap-up meeting of ADB Reconnaissance Mission with the DEA was held on 24th February, 2016
March, 2016: DPR Review Committee Meeting with the Finance Department on KSHIP-III Projects as part of KSHIP enquiry on budget availability for KSHIP-III
23rd March, 2016: 77th Project Steering Committee meeting for the recommendation of the KSHIP-III project aspects including all agendas
April, 2016: ADB International Business Opportunity Seminar at Hyderabad used to showcase upcoming KSHIP-III projects
28th to 29th April 2016: ADB Staff Consultant-Climate Change Expert had visited KSHIP on 28th and 29th April, 2016 to discuss addressal of climate change issues of the project
May 2016: Land Acquisition through Direct Purchase process has been initiated
25th May 2016, Interim review was conducted by Asian Development Bank on 25th on KSHIP III Projects
31st May 2016: Cabinet Approval has been accorded for Direct Purchase of land for public purpose projects, including for road construction projects
6th June, 2016: 33rd Project Governing Board meeting for the recommendation of the KSHIP-III project aspects including all agendas
21st to 30th June, 2016: ADB fact finding mission for final review of KSHIP-III Project
November, 2016: ADB Reconnaissance mission for review of KSHIP-III Project
16th November, 2016: Approval for Budget from Finance Department, Government of Karnataka
January, 2017: Approval received from ADB on Bid Documents
10th February, 2017: Bids launched through Karnataka e-procurement portal
March, 2017: ADB Reconnaissance mission for review of KSHIP-III Project
10th March, 2017: First Pre-Bid meeting held
31st March, 2017: Approval for Entitlement Matrix from Finance Department, Government of Karnataka
19th April, 2017: Issue of RFP for Independent Engineer services for all 3 packages scheduled
April, 2017: NGO were mobilized
9th May, 2017: Responses to Pre-Bid queries from bidders uploaded on e-procurement portal
14th August, 2017: Bids for 3 civil works packages received
23rd October, 2017: Loan negotiation with ADB for KSHIP-III completed
8th December, 2017: ADB Board Meeting has approved KSHIP-III projects loan.
28th December, 2017: Cabinet approval has been accorded for KSHIP-III ADB 2nd Loan projects

KSHIP-III Packages Road Map

KSHIP-III packages map

* - To be uploaded
Sl No Package Name Package Documents
01 Package-1 - (a) Two Laning with Paved Shoulder of Kollegal to Hannur (length 23.8 kms); (b)Two Laning with Paved Shoulder of Chintamani to AP Border (length 39.8 kms); and (c) Four Laning of Bengaluru (NICE Road) to Magadi and Two Laning with Paved Shoulder of connector from Magadi to NH 75 via Chikkamudigere and Iyandahalli (length 50.7 kms), 114.3 km in the State of Karnataka, India on Hybrid Annuity (DBFOMT) basis
02 Package-2- Two Laning with Paved Shoulder of Magadi to near Somwarpeth (Km 51.000 to Km 221.833 of SH 85, excluding the following common sections with Huliyudurga bypass km 76.520 to 78.410, common portion with SH 84 between km 88.700 to km 90.380 and common portion with NH 150 A in Nagmangala km 111.960 to km 113.260), 166 km in the State of Karnataka, India on Hybrid Annuity (DBFOMT) basis
03 Package-3 - Two Laning with Paved Shoulder of Gadag to Honnali (Km 105.500 to Km 205.290 of SH 57 and Km 215.335 to Km 253.713 of SH 26), 138.2 km in the State of Karnataka, India on Hybrid Annuity (DBFOMT) basis.