Contacts: In Delhi: Sumir Lal, (91 11) 2461-7241 slal@worldbank.org In Washington: Dale Lautenbach, (202) 473-3405 dlautenbach@worldbank.org NEW DELHI, March 2, 2006 – The World Bank has temporarily suspended financial support to the roads and resettlement components of the Mumbai Urban Transport Project (MUTP) until concerns around the equitable treatment of people affected by the works are resolved. MUTP is an ambitious road and rail renewal plan which involves the involuntary resettlement of more than 17,000 households, and about 2,500 shops and small industrial units. About 14,000 households have already been moved to secure dwellings. These people were among the city’s poorest, most living along railway tracks in squalid and dangerous conditions. They are now settled in high-rise buildings, where they will be given security of tenure, and surveys have shown that many of them are largely content with their improved circumstances. In addition, the efficiency of the rail system has improved, easing the commute for millions of Mumbai residents. However, there have also been difficulties with aspects of the implementation of this complex project, all taking place in a city of 13 million people and one of the most crowded metropolitan areas in the world. Serious problems have arisen with the resettlement of some households which has not been carried out in compliance with agreements between the Bank and the state Government of Maharashtra. A number of the resettled households are faced with a set of post-resettlement problems such as the predictable delivery of services like water and waste removal. Some householders face increased commuting times and there have been delays in transferring maintenance funds for the upkeep of buildings. In addition, a grievance system for those seeking redress is not working properly. “Suspension is a serious move, reflecting how serious we are about a successful outcome for these issues,” said Michael Carter, World Bank Country Director for India in New Delhi. “The Government of Maharashtra has a pragmatic action plan both to address the existing problems and to ensure that the resettlement yet to be done proceeds in accordance with our agreements. The key now is implementation. We will be working closely with the government to support its efforts to ensure satisfactory outcomes for the affected people. Once progress has been made, we will review the suspension.” He said the Bank was confident the issues could be addressed: “We will not disengage for a moment in the process of helping the government to fix this, consistent with our agreements and in a manner in which civil works can continue without undue delay. No one should be left behind, neither shopkeepers nor householders.” Carter said the urban challenge facing India was tremendous: “By around 2025 nearly half a billion people will be resident in the country’s cities, posing both significant growth opportunities and poverty challenges. The Government of India has recognized this in its National Urban Renewal Mission. Unfortunately some resettlement is unavoidable for city development, and the challenge is to make this a process that improves the prospects and living standards of those affected – to see it as a development opportunity.” “The World Bank is proud of its internationally recognized policies to deal equitably with just these sorts of challenges,” said Carter. “Complex and difficult? Absolutely, yes. But we will not walk away.” The US$940 million MUTP is supported by an IBRD loan of US$463 million for the road and rail components of the project and an IDA credit of US$79 million for resettlement. Disbursements to the IDA credit and the road component of the loan (US$150 million) have been suspended pending a resolution of issues outlined above. IDA is the International Development Association, the concessional lending arm of the World Bank Group, and IBRD is the International Bank for Reconstruction and Development, the Bank’s low-interest lending window. ### For more information about World Bank activities in India, visit: www.worldbank.org/in |
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