Completion Report
Project Number: 38625
Loan Number: 2156
June 2008
Bangladesh: Emergency Flood Damage
Rehabilitation Project
CURRENCY EQUIVALENTS
Currency Unit
Tk1.00
$1.00
SDR1.00
=
=
=
–
taka (Tk)
At Appraisal
(30 November 2004)
$0.016949
Tk59.00
$1.358
At Project Completion
(13 December 2007)
$0.015
Tk68.61
$1.5831
ABBREVIATIONS
ADB
BR
BRM
BWDB
EA
EIRR
HDM-4
IDC
IRI
LGED
PCR
PD
PSC
RHD
SDR
Sida
TA
VOC
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Asian Development Bank
Bangladesh Railways
Bangladesh Resident Mission
Bangladesh Water Development Board
executing agency
economic internal rate of return
Highway Development and Management Model
interest during construction
International Roughness Index
Local Government Engineering Department
project completion review
project director
project steering committee
Roads and Highways Department
special drawing rights
Swedish International Development Cooperation Agency
technical assistance
vehicle operating cost
NOTES
(i)
The fiscal year (FY) of the Government ends on 30 June. “FY” before a calendar
year denotes the year in which the fiscal year ends, e.g., FY2000 ends on
30 June 2000.
(ii)
In this report, “$” refers to US dollars.
Vice President
Director General
Director
L. Jin, Operations 1
K. Senga, South Asia Department (SARD)
H. Du, Bangladesh Resident Mission (BRM), SARD
Team leader
Team members
A. Faruque, Senior Project Implementation Officer, BRM, SARD
M. N. Islam, Assistant Project Analyst, BRM, (SARD)
CONTENTS
Page
BASIC DATA
MAP
i
vi
I.
PROJECT DESCRIPTION
II.
EVALUATION OF DESIGN AND IMPLEMENTATION
A.
Relevance of Design and Formulation
B.
Project Outputs
C.
Project Costs
D.
Disbursements
E.
Project Schedule
F.
Implementation Arrangements
G.
Conditions and Covenants
H.
Related Technical Assistance
I.
Consultant Recruitment and Procurement
J.
Performance of Consultants, Contractors, and Suppliers
K.
Performance of the Borrower and the Executing Agency
L.
Performance of ADB
2
2
4
5
6
7
7
8
9
9
10
11
12
III.
Evaluation of Performance
A.
Relevance
B.
Effectiveness in Achieving Outcome
C.
Efficiency in Achieving Outcome and Outputs
D.
Preliminary Assessment of Sustainability
E.
Other Impact
12
12
12
13
13
14
IV.
OVERALL ASSESSMENT AND RECOMMENDATIONS
A.
Overall Assessment
B.
Lessons
C.
Recommendations
15
15
15
16
APPENDIXES
1.
Project Framework
2.
Maps of Project Components as Completed
3.
Appraisal and Actual Project Costs
4.
Currency Equivalents
5.
Projected and Actual Disbursements
6.
Project Implementation Schedule
7.
Status of Compliance with Major Loan Covenants
8.
Technical Assistance Completion Report
9.
Details of Consulting Services
10.
Assessment of Project Impact and Benefits
11.
Economic Reevaluation
1
157
21
23
26
27
28
30
37
39
40
43
BASIC DATA
A.
Loan Identification
1.
2.
3.
4.
5.
6.
7.
B.
Country
Loan Number
Project Title
Borrower
Executing Agencies
Part A: Rural Infrastructure
Part B: Roads and Bridges
Part C: Railways
Part D: Water Resources
Part E: Municipal Infrastructure
Amount of Loan
Project Completion Report Number
Loan Data
1.
Appraisal
– Date Started
– Date Completed
2.
Bangladesh
2156
Emergency Flood Damage Rehabilitation Project
People’s Republic of Bangladesh
Local Government Engineering Department
Roads and Highways Department
Bangladesh Railways
Bangladesh Water Development Board
Local Government Engineering Department
SDR117,195,000 ($180 million)
PCR: BAN 1039
12 September 2004
27 September 2004
Loan Negotiations
– Date Started
– Date Completed
13 December 2004
14 December 2004
3.
Date of Board Approval
20 January 2005
4.
Date of Loan Agreement
2 February 2005
5.
Date of Loan Effectiveness
– In Loan Agreement
– Actual
– Number of Extensions
20 April 2005
2 May 2005
-
Closing Date
– In Loan Agreement
– Actual
– Number of Extensions
31 July 2007
13 December 2007
-
Terms of Loan
– Interest Rate
– Maturity (number of years)
– Grace Period (number of years)
1% per year
40
10
6.
7.
8.
Disbursements
a.
Dates
Initial Disbursement
20 May 2005
Final Disbursement
Time Interval
13 December 2007
31.2 months
ii
b.
Effective Date
Original Closing Date
Time Interval
02 May 2005
31 July 2007
27.3 months
Amount ($)
Categorya
01A
01B
01C
01D
01E
02
03A
03B
03C
03D
03E
04
05
Original
Allocationb
51,920,010
48,230,009
12,970,002
27,660,005
22,850,004
800,000
2,060,000
4,800,000
1,400,000
2,900,001
2,120,000
2,000,000
289,969
Last Revised
Allocation
39,498,709
40,269,436
5,539,274
13,912,667
23,132,254
9,327,135
1,899,566
4,492,004
1,478,190
2,833,519
1,941,952
1,015,961
Net Amount
Available
39,498,709
40,269,436
5,539,274
13,912,667
23,132,254
9,327,135
1,899,566
4,492,004
1,478,190
2,833,519
1,941,952
1,015,961
Amount
Disbursed
37,190,348
37,916,032
5,215,551
13,099,591
21,780,372
8,782,044
1,788,553
4,229,485
1,391,803
2,667,925
1,828,462
956,587
Undisbursed
Balancec
2,308,361
2,353,404
323,723
813,076
1,351,882
545,091
111,013
262,519
86,387
165,594
113,490
59,374
Total
180,000,000
145,340,672
145,340,672
136,846,754
8,493,918
a
b
c
01A - Civil Works Part A: Rural Infrastructure; 01B - Civil Works Part B: Roads and Bridges; 01C - Civil Works Part C:
Railways; 01D - Civil Works Part D: Water Resources; 01E - Civil Works Part E: Municipal Infrastructure;
02 - Equipment and Materials; 03A - Consulting Services Part A; 03B - Consulting Services Part B; 03C - Consulting
Services Part C; 03D - Consulting Services Part D; 03E - Consulting Services Part E; 04 - Interest Charge;
05 - Unallocated.
Variation in the SDR:$ exchange rate accounts for the difference between the original amount and the revised total
amount .
An undisbursed loan amount of SDR5,365,540.21 ($8,493,918.43) was canceled when the loan was closed on
13 December 2007. Previously SDR19,433,823.00 (about $27,700,000) had been canceled on 15 November 2005.
9.
Local Costs (Financed)
Item
Amount ($ million)
Percentage of Local Cost
Percentage of Total Cost
C.
Appraisal
106.20
63.90
44.25
Actual
73.22
53.80
35.84
Project Data
1.
Project Cost ($ million)
Cost
Foreign Exchange Cost
Local Currency Cost
Total
Appraisal Estimates
Actual
73.80
166.20
68.17
136.11
240.00
204.28
iii
2.
Cost
Financing Plan ($ million)
Appraisal Estimates
Foreign
Local
Total
Implementation Costs
Borrower-Financed
ADB-Financed
Cofinanced
Sida
Gov’t of the Netherlands
Total
IDC Costs
Borrower-Financed
ADB-Financed
Cofinanced
Grand Total
Actual
Local
Foreign
Total
0.00
71.80
60.00
106.20
60.00
180.00
0.00
62.67
41.98
73.22
41.98
135.89
71.80
0.00
0.00
166.20
0.00
0.00
238.00
2.45
2.09
67.21
12.25
8.66
136.11
14.70
10.75
203.32
0.00
2.00
0.00
73.80
0.00
0.00
0.00
166.20
0.00
2.00
0.00
240.00a
0.96
0.00
0.96
68.17
136.11
204.28
ADB = Asian Development Bank, IDC = interest during construction, RRP = report and recommendation of the President,
Sida = Swedish International Development Cooperation Agency.
a
Financing was estimated at $240.00 million and the project cost at $239.97 million during appraisal and thus reflected in the
RRP. This project completion report uses the approved figures from the RRP.
3.
Cost Breakdown, by Project Component ($ million)
Project Component
A. Civil Works
Rural Infrastructure
Roads and Bridges
Railways
Water Resources
Municipal Infrastructure
Subtotal (A)
B. Equipment and Materials
Railways Emergency Stock
Subtotal (B)
Appraisal Estimate
Foreign Local
Total
Actuala
Foreign
Local
Total
8.90
37.00
10.20
5.53
3.62
65.25
62.98
25.70
6.60
32.40
28.16
155.84
71.88
62.70
16.80
37.93
31.78
221.09
9.90
29.97
4.23
4.64
4.49
53.22
56.45
19.92
2.54
24.31
26.19
129.41
66.35
49.89
6.77
28.95
30.68
182.63
0.80
0.80
0.80
0.80
1.60
1.60
8.78
8.78
0.00
0.00
8.78
8.78
C. Consulting Services
Rural Infrastructure
Roads and Bridges
Railways
Water Resources
Municipal Infrastructure
Subtotal (C)
0.96
2.05
0.80
1.60
0.34
5.75
1.10
2.75
0.60
1.30
1.78
7.53
2.06
4.80
1.40
2.90
2.12
13.28
0.84
1.81
0.80
1.47
0.29
5.21
0.95
2.42
0.59
1.20
1.54
6.70
1.79
4.23
1.39
2.67
1.83
11.91
D.
0.00
2.00
2.00
0.00
0.00
0.00
71.80
166.17
237.97
67.21
136.11
203.32
2.00
0.00
2.00
0.96
0.00
0.96
73.80
166.17
68.17
136.11
204.28
Land Acquisition and Resettlement
Subtotal (A+B+C+D)
E. Service Charge during Construction
Total
239.97a
RRP = report and recommendation of the President.
Note: Because of rounding the figures may not add up to the totals given.
a
Financing was estimated at $240.00 million and project cost at $239.97 million during appraisal and thus reflected in the
RRP. This project completion report uses the approved figures from the RRP.
iv
4.
Project Schedule
Item
Consultants’ Contracts
Part A: Rural Infrastructure
Contract Date
Completion
of
Consultant
Supervision
Part B: Roads and Bridges
Contract Date
Completion
of
Consultant
Supervision
Part C: Railways
Contract Date
Completion
of
Consultant
Supervision
Part D: Water Resources
Contract Date
Completion
of
Consultant
Supervision
Part E: Municipal Infrastructure
Contract Date
Completion
of
Consultant
Supervision
Completion of Engineering Designs
Civil Works Contracts
Date of Award
Completion of Construction
Appraisal Estimate
Actual
November 2004
January 2007
June 2005
July 2007
November 2004
January 2007
September 2005
July 2007
November 2004
January 2007
October 2005
July 2007
November 2004
January 2007
October 2005
July 2007
November 2004
January 2007
June 2005
July 2007
November 2004–February 2006
June 2005–September 2005
February 2005–September
2005
January 2007
June 2005
Equipment and Supplies
First Procurement
May 2005
Last Procurement
June 2006
Other Milestones:
1. 15 November 2005: Approval of partial cancellation of SDR19,433,823.00
2. 13 December 2007: Closing of loan accounts
5.
July 2007
12 June 2005
2 May 2006
Project Performance Report Ratings
Rating
Implementation Period
1 Jan 2005 to 31 Dec 2005
1 Jan 2006 to 31 Dec 2006
1 Jan 2007 to 31 Dec 2007
Development
Objectives
Implementation
Progress
Satisfactory
Satisfactory
Highly Satisfactory
Satisfactory
Satisfactory
Highly Satisfactory
v
D.
Data on Asian Development Bank Missions
Name of Mission
Appraisal
Inception Mission
Review 1
Special Loan Administration
Review 2
Special Loan Administration
Review 3
Special Loan Administration
Review 4
Review 5
Project Completion Reviewb
a
b
Date
12–27
September
2004
12–18 March 2005
11–22 December 2005
10–20 March 2006
3–15 May 2006
3–14 September 2006
11–29 November 2006
8–9 February 2007
4–15 April 2007
23 July–6 August 2007
6–18 March 2008
No. of
Persons
Specialization of
Membersa
11
No. of
PersonDays
44
3
2
2
2
2
2
2
2
2
3
21
16
10
10
8
10
4
12
22
12
a, b, g
a, g
a, g
a, g
a, g
a, g
a, g
a, g
a, g
a, g, h
a, b, c, d, e, f, i
a = mission leader/senior project specialist/engineer, transport engineer, b = project implementation officer, c = senior
project implementation officer, d = social development specialist, e = environment specialist, f = senior counsel, g =
assistant project analyst, h = staff consultant, i = environment analyst.
This project completion report was prepared by Ahmed Faruque, senior project implementation officer/mission leader;
Md. Nazrul Islam, Assistant Project Analyst; and a transport economist (staff consultant).
vi
MAP
I.
PROJECT DESCRIPTION
1.
The Emergency Flood Damage Rehabilitation Project (the Project) was formulated in
response to a request for emergency assistance made by the Government of Bangladesh to the
Asian Development Bank (ADB) after severe flooding in the north of the country in late June to
early July 2004 that affected 39 districts, including Dhaka and other central districts. The floods
were the country’s worst ever in geographic extent and economic damage caused. Serious
damages to infrastructure and other assets and economic disruption inflicted heavy losses on
agricultural and industrial output and slowed down the growth in services.
2.
The main objective of the Project was to help sustain economic growth by minimizing the
devastating impact of the floods and thus enabling the early restoration of economic and social
activities in the affected areas. Priority areas were identified in consultation with the Government
and the private sector, and with the participation of communities. The project framework at
appraisal, compared with the achievements of the Project, is shown in Appendix 1.1
3.
A sector approach was followed in the selection of the highest-priority subprojects. This
was most appropriate to the emergency situation, as it allowed a quick response and maximum
flexibility in both geographic coverage and components, within the agreed framework and
criteria.
4.
1
2
3
4
5
The Project comprised of five components:
(i)
Part A: Rural infrastructure. Rehabilitation and restoration of rural
infrastructure, including rural roads, bridges, and culverts in 9 districts2 under the
ADB-assisted Third Rural Infrastructure Development Project,3 and 15 other
districts4 in the worst-affected areas. In addition, flood and cyclone shelters were
to be rehabilitated and provided with latrines to help communities, especially the
poor.
(ii)
Part B: Roads. Rehabilitation of flood-damaged national, regional, and district
roads, bridges, and culverts in five of the country’s seven road zones5—Barisal,
Comilla, Dhaka, Rajshahi, and Rangpur.
(iii)
Part C: Railways. Rehabilitation of flood-damaged rail infrastructure and
facilities on the core rail network, including civil works to restore embankments,
tracks, bridges, essential buildings, station roads, and signaling and
telecommunications facilities. This component also included the provision of
emergency equipment and materials to speed up repair work in future
emergencies.
(iv)
Part D: Water resources. Rehabilitation of flood control, drainage, and irrigation
facilities; repair of embankment breaches; and repair or replacement of water
control structures, protective works, and canals in 39 districts to restore them to
their condition before the flood and to prevent or mitigate future disasters.
The project framework at appraisal has since been modified to conform to ADB’s revised design and monitoring
framework.
Gaibandha, Jamalpur, Kishoregonj, Kurigram, Lalmonirhat, Mymensingh, Netrakona, Nilphamary, and Sherpur.
ADB. 1997. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the
People’s Republic of Bangladesh for the Third Rural Infrastructure Development Project. Manila.
Bogra, Naogaon, Sirajganj, Tangail, Sunamganj, Sylhet, Habigonj, Moulavibazar, Brahmanbaria, Narshingdi,
Comilla, Chandpur, Feni, Laxmipur, and Noakhali.
The road network is divided into seven zones, namely: Barisal, Chitaggong, Comilla, Dhaka, Khulna, Rajshahi, and
Rangpur.
2
(v)
Part E: Municipal infrastructure. Rehabilitation of: (a) roads, drains, bridges,
and culverts; and (b) footpaths and drains in the slums of about 55 municipalities6
(pourashavas) in six divisions.
5.
The Project also included capacity building and training in flood-resistant infrastructure
design standards to strengthen the Government’s disaster preparedness, and analytical input
and capacity building to enhance early-warning systems. Two associated technical assistance
(TA)7 projects were financed with a grant from ADB’s TA funding program for this purpose.
6.
The Government of Bangladesh was the Borrower, and the Executing Agencies (EAs)
for the project components were the Local Government Engineering Department (LGED) for
parts A and E; the Roads and Highways Department (RHD) for part B; the Bangladesh Railways
(BR) for part C; and the Bangladesh Water Development Board (BWDB) for part D. An ADB
loan8 of $180 million equivalent from ADB’s Special Funds (SF) resources financed part of the
cost of the Project. It was approved as umbrella or standby financing on the understanding that
part of the loan would be canceled as soon as grant financing became available from the
Netherlands or Sweden. During project preparation both governments had expressed interest,
through the Swedish International Development Cooperation Agency (Sida), in providing
$27.7 million cofinancing for the Project. ADB also approved the associated TA 4562-BAN:
Early Warning Systems Study for $250,000 on the assumption that it would later be replaced by
a corresponding grant from the Government of the Netherlands.
II.
A.
EVALUATION OF DESIGN AND IMPLEMENTATION
Relevance of Design and Formulation
7.
The Project was designed while ADB’s 1999 country operational strategy9 was in force.
The overall strategic objective was poverty reduction through (i) faster private sector–led
economic growth, (ii) better development opportunities for the poor in rural and urban areas,
(iii) human development, and (iv) environmental protection. The poverty reduction objective was
reaffirmed in the partnership agreement on poverty reduction between ADB and the
Government of Bangladesh.10 To maximize the impact of the Project, the EAs adopted an area
approach, to focus assistance on areas with a high concentration of poverty.
8.
Under the Project, key physical and social infrastructure was to be rehabilitated to
pre-flood conditions to (i) restore normal economic and social activities, and (ii) create
opportunities for employment or income generation. Poverty, caused by massive income
6
Bagerhat, Bhairab, Bhanga, Boalmari, Bogra, Brahmanbaria, Chandpur, Chatkhil, Comilla, Dinajpur, Faridpur,
Feni, Gabtali, Gaibandha, Gazipur, Gopalgonj, Gournadi, Habigonj, Jamalpur, Jhalokathi, Joypurhat, Khoksa,
Kishoregonj, Kumarkhali, Kushtia, Lalmonirhat, Laxmipur, Madaripur, Manikgonj, Monohordi, Moulavibazar,
Munshigonj, Mymensingh, Nagarkanda, Narayangonj, Narsingdi, Natore, Netrakona, Noakhali, Pabna, Patuakhali,
Poshuram, Raipur, Rajbari, Ramganj, Rangpur, Satkhira, Savar, Shahjadpur, Shariatpur, Sherpur, Sirajganj,
Sunamganj, Tangail, and Tongi.
7
ADB. 2005. Technical Assistance to the People’s Republic of Bangladesh for Support for Financial Management
and Monitoring. Manila (TA 4561-BAN, for $150,000, approved on 20 January); and ADB. 2005. Technical
Assistance to the People’s Republic of Bangladesh for Early Warning Systems Study. Manila (TA 4562-BAN, for
$250,000, approved on 20 January).
8
ADB. 2005. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the
People’s Republic of Bangladesh for Emergency Flood Damage Rehabilitation. Manila (Loan 2156-BAN[SF]) was
approved for the amount of $180 million equivalent on 20 January 2005.
9
ADB. 1999. Bangladesh Country Operational Strategy: Responding to the Challenge of Poverty. Manila.
10
ADB and the Government of the People’s Republic of Bangladesh. 2000. Partnership Agreement on Poverty
Reduction. Manila.
3
erosion, loss of physical assets, and debt accumulation, which had intensified to an alarming
extent after the flood, would thus be reduced. The infrastructure and civil works completed
under the Project allowed economic activity to resume by (i) improving transportation links
between agricultural farms and marketplaces, and upazila11 and district headquarters; (ii)
shortening travel time for freight and passenger traffic on roads and railways, and thus reducing
transportation costs; and (iii) creating employment opportunities for local skilled and unskilled
labor, thereby increasing purchasing capacity, expenditure, and consumption. These resulted in
higher productivity, and improved gross domestic product. The Project was designed and
formulated to reduce poverty and contribute to Bangladesh’s economic recovery, according to
ADB’s country strategy and overall goal. It was relevant to ADB’s country strategy at the time of
design and remains relevant.
9.
Of the eight ADB loans providing disaster emergency assistance to Bangladesh so far,
two have undergone post-evaluation.12 ADB’s experience and the lessons of disaster
assistance13 indicate the need for (i) quick preparation of disaster assistance ; (ii) a focus on
restoring infrastructure facilities; (iii) completion of rehabilitation work within 2 years, to the
extent possible; (iv) strong consulting support and ADB supervision during subproject design
and implementation; (v) rapid government response and action; (vi) beneficiary participation in
project preparation and implementation; (vii) environment and social aspects incorporated in
project design and monitored during implementation; (viii) retroactive financing and imprest
accounts used to facilitate government access to funds; (ix) subproject selection criteria that
permit simple prioritization of subprojects and rapid implementation; and (x) upgrading, rather
than mere restoration, of infrastructure, to enhance flood resistance.
10.
The project components were designed and implemented according to government
policy in the relevant sector. The design of part A (rural infrastructure) was in line with the
Government’s sixth 5-year plan (2002–2007), which aimed at improving basic physical
infrastructure in rural areas for economic development. Part B (roads) was consistent with the
recommendations of the road master plan,14 whose objective was to sustain the improved riding
quality of roads and reduce vehicle operating costs (VOCs). The design for part C (railways)
supported the Government’s policy of promoting the railway subsector as the pro-poor mode of
transport, facilitating cheap yet environment-friendly transportation of long-haul freight. Part D
(water resources) was designed and implemented according to the Government’s National
Water Policy,15 which aimed at taking “appropriate measures to provide desired levels of
protection for life, property, vital infrastructure, agriculture and wetlands,” and the Flood Action
Plan,16 prepared after the floods of 1987 and 1988, which helped determine the most
appropriate action for coping with floods, including subproject selection. Part E (municipal
11
The divisions of Bangladesh are divided into 64 districts, or zila. The districts are further subdivided into 493
subdistricts, or upazila.
12
PEO466, October 1996, ADB. 1988. Report and Recommendation of the President to the Board of Directors on a
Proposed Loan to the People’s Republic of Bangladesh for the Flood Rehabilitation Project. Manila (Loan 882BAN[SF]); and PEO444, August 1995, ADB. 1988. Report and Recommendation of the President to the Board of
Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Flood Damage Restoration Project,
Manila (Loan 892-BAN[SF]).
13
ADB. 2007. ADB’s Disaster and Emergency Assistance Policy; and Positioning ADB’s Disaster and Emergency
Assistance: Policy in a Changing Regional Environment. Manila (drafts); Benson, C., and W. T. Linklaen-Ariens.
1999. Rehabilitation after Disasters. A Review of Lessons Learned and Emerging Issues. Manila: ADB (third draft).
14
ADB. 1988. Technical Assistance to the People’s Republic of Bangladesh for Preparation of a Road Master Plan.
Manila; and ADB. 1994. Technical Assistance to the People’s Republic of Bangladesh for Preparation of a Road
Master Plan (Supplementary). Manila.
15
Ministry of Water Resources, Government of Bangladesh. 1999. National Water Policy. Dhaka.
16
Flood Plan Coordination Organization, Ministry of Irrigation, Water Development and Flood Control. 1989. Flood
Action Plan. Dhaka, Bangladesh.
4
infrastructure) conformed with the objectives of the Government’s sixth 5-year plan to improve
municipal infrastructure, including roads, drains, bridges, and culverts.
B.
Project Outputs
11.
The major outputs achieved under each of the five components are described briefly in
the following sections. Full details of the appraisal and detailed assessment targets compared
with the actual outputs achieved are in Appendix 1. The project components as completed are
shown on the maps in Appendix 2.
1.
Part A: Rural Infrastructure
12.
At appraisal it was envisaged that 5,500 kilometers (km) of upazila and union roads
would be rehabilitated into bitumen-surfaced roads. Actual works totaled only 2,423.41 km. The
rehabilitation of 13,200 meters (m) of bridges/culverts was also anticipated at appraisal, but the
actual total was only 11,075.51 m. Tree plantation was estimated to cover 110 km at appraisal
but actually covered only 32.98 km. Of a projected 10 flood shelters, only 9 were replaced. On
the other hand, flood protection works totaling 45.62 km were rehabilitated, compared with 40
km at appraisal.
13.
The shortfall in the implementation of road and bridge works can be attributed to the
significant amount of time that elapsed between the preliminary damage assessment, right after
the 2004 flood receded, and the detailed damage assessment during design and planning.
Increased damage from continued use of these infrastructure during the long interval required
more extensive rehabilitation, at higher unit costs.17 The cost of construction materials had also
increased. Budget limitations dictated the cutbacks in rehabilitation.
2.
Part B: Roads
14.
At appraisal it was estimated that the floods had submerged 6,728 km of road and
damaged 2,968 km of road, 306 bridges and culverts, and 26 ferry landings. Roads rehabilitated
under the Project totaled 3,572 km,18 and bridges and culverts repaired totaled 2,115 m.
3.
Part C: Railways
15.
BR is divided into East and West zones. At appraisal it was estimated that 320 km of
track in 117 locations and 110 bridges in the East Zone and 96 km of track in 40 locations and
18 bridges in the West Zone had been damaged by the floods.19 This component comprised
(i) civil works to restore embankment track, bridges, stations, buildings, roads, and electrical,
signaling, and telecommunication facilities; and (ii) provision of emergency stock of equipment
and materials to increase preparedness and ability to handle future emergencies. The actual
work implemented involved (i) 90,116 m of embankment re-profiling; (ii) 39,383 m of ballast wall
restoration; (iii) 87,868 square meters of embankment protection; (iv) 19,834 m of embankment
protection wall restoration; and (v) 391 cubic meters of embankment natural ground
replacement.
17
The unit cost of road rehabilitation was Tk437,000 per km in the preliminary damage assessment report (lower
than the Tk740,000 per km calculated for the 1998 flood) and Tk1,212,000 per km during implementation (i.e.,
277% higher).
18
Consisting of 99 km of national roads, 1,236 km of regional roads, and 2,237 km of district roads.
19
The appraisal report did not give details of the locations or extent of the damage.
5
16.
On 5 March 2006, anticipating loan savings, BR requested the substitution of steel
sleepers for the wooden sleepers that were to be procured because it was having difficulty
sourcing wooden sleepers. ADB approved the request on 15 June 2006. Under two separate
contract packages20 28,000 meter gauge (MG) steel sleepers and 224,000 elastic rail clips21
were procured for the East Zone of BR. The equipment purchased included a rail sawing
machine, rail drilling machines, rubber seal (RS) joint, lifting jacks, switch expansion joints for
dual-gauge track, and trucks.
4.
Part D: Water Resources
17.
Financial constraints hampered the achievement of the targets set for embankments and
protective works in the flood damage assessment report. Against a target of 1,056 km of
embankment works, the actual works totaled only 1,029 km.22 Protective work was estimated at
30 km at appraisal and ultimately amounted to 29 km. However, the work on irrigation and
drainage channels (29 km) and water structures (459) matched the appraisal targets.
5.
Part E: Municipal Infrastructure
18.
In this component urban infrastructure, including municipal roads, drains, bridges and
culverts, and footpaths in slums located in 55 pourashavas, was to be rehabilitated or improved.
Actual achievements were 1,315 km of municipal roads (compared with 1,028 km at
appraisal),23 426 m of bridges/culverts (compared with 393 m), and 61.5 km of drains
(compared with 47 km). Repair work on footpaths in slums and low-income areas24 was found to
have been taken on by the pourashavas themselves or by various nongovernment
organizations and was therefore dropped from the scope of works. Loan savings and
fluctuations of exchange rate between US$ and Taka financed the increase in actual works
over the targets.
C.
Project Costs
19.
At appraisal, the project cost was estimated at $240.00 million equivalent—$73.80
million (31%) in foreign exchange cost (including $2.00 million for service charges and interest
during construction [IDC]) and $166.20 million equivalent (69%) in local currency cost (including
taxes and duties). The ADB loan of $180 million equivalent from Special Funds would finance
75.0% of the project cost. It would cover all of the foreign exchange cost and about 64% of local
currency cost.
20.
The project completion cost estimated by the Project Completion Review (PCR) Mission
was $204.28 million equivalent, with a foreign exchange cost of $68.17 million equivalent ( 33%)
and a local currency cost of $136.11 million equivalent (67%). ADB financed $136.85 million
equivalent (67% of the total), the Government of the Netherlands $10.75 million equivalent
20
Subproject contract packages BR/EZ/PQ-06 and BR/EZ/PQ-09 were invited on 20 June 2006. The bids for these
contract packages was later discovered to be nonresponsive as the bidders had failed to comply with the
qualification criteria, and the packages were rebid on 5 September 2006.
21
Pandrol clips.
22
These figures represent both full and partial works on embankments.
23
The original appraisal target of 1,028 km of roads was revised to 1,121.46 km by an ADB review mission in
April 2006 to fully achieve project objectives. This revised target was increased again to 1,181 km in August 2006
and further to 1,315 km in April 2007.
24
The 63 km of footpaths targeted at appraisal were only in the Siraganj and Chandpur pourashavas.
6
(5%), and Sida $14.70 million equivalent (7%).25 Cofinancing amounted to $25.45 million
equivalent (12%). The Government of Bangladesh financed the remaining $41.98 million
equivalent in local costs. The actual costs were lower than the appraisal estimates mainly
because of the loan savings generated under part B (roads)—$49.89 million compared with
$62.70 million estimated at appraisal. The contractors bid prices were significantly lower than
the appraisal estimates. The devaluation of Taka relative to US dollar was another factor. Loan
savings were also made under part E (municipal infrastructure), enabling an increase in outputs
achieved in this component. The unused balance of the loan was cancelled when the loan
account was closed on 13 December 2007.
21.
Details of the actual costs for each component compared with the estimates at appraisal
are shown in Appendix 3. For cost comparison, the local currency costs incurred by the EAs
were converted into dollars at the prevailing rate during each transaction. The average
exchange rates used are in Appendix 4.
D.
Disbursements
22.
No disbursement schedule was included in the appraisal. However, on the basis of the
implementation schedule prepared at the time of appraisal, the projected disbursements were
developed and are shown in Appendix 5 along with the actual disbursements during
implementation. The Loan Agreement was revised and part of the ADB loan was canceled on
15 November 2005 when cofinancing from the Government of the Netherlands and Sida was
confirmed. The Government of the Netherlands approved a grant for €10.79 million ($13 million)
for the water resources component (part D) and a further grant of $250,000 equivalent for TA
4562-BAN: Early Warning Systems Study. Sida approved a grant of SKr120 million ($14.7
million) for the rural infrastructure component (part A). These grants were administered by ADB.
The amount canceled from the ADB loan was SDR19,433,823 ($27.7 million). ADB canceled
the remaining balance of SDR5,365,540.21 ($8,493,918.43) after the last disbursement on
13 December 2007.26 The first (20 May 2005) and final disbursements (13 December 2007)
spanned 31.2 months, compared with the 27.3-month disbursement period envisaged at
appraisal. Although all physical activities under the loan were completed by the original loan
closing date (31 July 2007), the loan account was kept open until 13 December 2007 to
accommodate some late withdrawal applications to ADB.
23.
RHD (part B)27 and BR (part C) had a backlog of disbursements. RHD’s backlog was
due to (i) slow progress under several contract packages, particularly those involving bridges;
and (ii) delayed release of adequate counterpart funds by the Government. BR disbursements
under part C were slowed down by (i) procedural formalities involved in the processing of
interim payments and withdrawal applications, (ii) delayed delivery of materials and equipment
by suppliers, (iii) the practice of bunching withdrawal applications to ADB, and (iv) delayed
release of counterpart funds by the Government. Part D, administered by BWDB, also lagged
behind in disbursements. The delay was mainly due to the traditional BWDB requirement of
having its project monitoring team inspect the dumping of materials on-site before certifying
payment. BWDB later agreed to waive this requirement to speed up disbursement, and the
25
As envisaged at appraisal the ADB loan was approved as umbrella or standby financing on the understanding that
part of the $180 million loan would be canceled once grant financing became available from the Netherlands or
Sweden. The partial cancellation was made when cofinancing became available from the Government of the
Netherlands and Sida (para. 22).
26
The grants from the Government of the Netherlands (no. 0038) and the Government of Sweden (no. 0039) were
also closed on 13 December 2007.
27
As of 28 March 2006 only $3.99 million had been disbursed for part B, compared with contract awards of $34.79
million.
7
backlogs were cleared toward the end of the Project. Another cause of delay in disbursements
was the nationwide political unrest, which slowed down the movement of payment documents
from the field to the EA headquarters in Dhaka.
24.
Imprest accounts, as envisaged at appraisal, were set up for each component, except
part B (roads). For part B, the reimbursement procedures were the same as those for current
ADB-financed projects, with RHD as the EA. ADB’s statement of expenditures (SOE) procedure
was followed in reimbursing eligible expenditures and liquidating advances to the imprest
accounts. The EAs’ imprest accounts were well maintained and the SOE procedure facilitated
timely payment to consultants, contractors, and suppliers.
E.
Project Schedule
25.
The ADB Board approved the loan on 20 January 2005. The Loan Agreement was
signed on 2 February 2005 and became effective on 2 May 2005. The loan was closed on
31 July 2007, as envisaged at appraisal. Because of the emergency nature of the Project, it was
stipulated at appraisal that all subprojects under the five components had to be completed
within 25 months, i.e., by 31 January 2007. However, to use the savings28 from low bid prices
and from other EAs (especially RHD), LGED undertook additional subprojects.29 ADB extended
the completion deadline for all subprojects to 31 May 2007. By 31 March 2007 93% of the civil
works for part A, 87% for part B, 75% for part C, 88% for part D, and 95% for part E were
completed. Because of delays in procurement and the awarding of contracts (para. 35) it was
not until 31 July 2007 that all the subprojects were completed. Some subprojects that made
extremely slow progress had to be canceled. Although these delays did not adversely affect the
project implementation schedule, timely action by the EAs (especially BR) could have minimized
the delays and brought the project benefits earlier to the affected people. Appendix 6 compares
the actual and the appraisal implementation schedules for each component.
F.
Implementation Arrangements
26.
The implementation arrangements were as envisaged at appraisal. The Borrower was
the Government of Bangladesh and the EAs for the five components were LGED for parts A and
E, RHD for part B, BR for part C, and BWDB for part D. As in previous ADB-financed flood
damage rehabilitation projects, the already established project steering committee (PSC),30
chaired by the Member for Programming Division of the Planning Commission, Ministry of
Planning, was responsible for coordinating the overall project , overseeing governance matters,
resolving interagency issues and procedural matters, and ensuring counterpart funding, as well
as monitoring overall project implementation. Coordination among ADB and the EAs,
government agencies, consultants, and contractors was adequately maintained through regular
PSC meetings. Each EA established a project management unit (PMU) and appointed a fulltime project director (PD), who was responsible for project implementation and coordination. For
each of parts B and C, a project coordinator was appointed to coordinate among the multiple
PDs in different zones. In some components the PD changed several times. For part B (roads),
there were changes in the PD in some of the zones, and for part C (railways), there were three
28
In December 2005, the loan savings were estimated at $10.0 million.
LGED undertook an additional 42 subprojects for part A, and 40 for part E.
30
A PSC was created for the first time for the 1998 Flood Damage Rehabilitation Project and found to be very
effective. It comprised the member for physical infrastructure of the Planning Commission and representatives from
the Economic Relations and Finance divisions of the Ministry of Finance, the Cabinet Division, the Implementation
Monitoring and Evaluation Division of the Planning Commission, and the EAs involved in emergency rehabilitation
works under ADB, World Bank, and other aid agency projects.
29
8
PD changes in the East Zone and two in the West Zone. But for parts A (rural infrastructure), D
(water resources), and E (municipal infrastructure), the PDs were the same throughout the
Project. The PDs under some components changed because of promotion or transfer to other
departments of the same organization. The implementation of the Project, however, did not
suffer adversely from these changes. The Bangladesh Resident Mission (BRM) hosted frequent
coordination meetings with the PDs and consultants to review the physical progress of each
component, discuss problems, and agree on solutions. The activities of the PSC proved very
effective in identifying problems and taking remedial actions at an early stage, thus minimizing
implementation delays. The Government also approved simplified procedures for tendering,
approval, and awarding of contracts. The Government’s single-stage, one-envelope system of
local competitive bidding, approved by ADB, was followed. ADB also simplified its system for
approving the awarding of civil works contracts. Tender evaluation and contract documents for
civil works for the first subproject selected by each EA, and for civil works exceeding $200,000
equivalent, were reviewed and approved by ADB before the contracts were awarded. All other
subprojects were approved after they were awarded. Contracts could thus be awarded much
faster, consistent with the emergency nature of the Project. This simplified procedure of contract
awards did not detract from the successful implementation of the subprojects.
27.
Given the urgency of the Project and the need to commence the flood damage
rehabilitation before the next monsoon season, ADB approved advance action for the
procurement of goods, services, and works, and the recruitment of consultants, provided that
this took place on or after 12 September 2004 (date of appraisal). ADB also agreed to provide
retroactive financing for eligible expenditures subject to certain conditions.31 Considering the
complexity of the Project, the overall implementation arrangements were generally satisfactory
and effective. The provision of grant funding by the Government of the Netherlands and the
Government of Sweden, through Sida, constituted a major change in the scope of the Project.
G.
Conditions and Covenants
28.
Details of compliance with the loan covenants are given in Appendix 7. The Government
and the EAs generally complied with the covenants and substantially met the reporting
requirements. However, the EAs submitted their project completion reports separately. The
reports therefore lacked uniformity in format, and, largely because of the EAs’ unfamiliarity with
ADB’s reporting requirements, in the data and information they provided. Each EA also
maintained separate records and accounts to identify the goods and services financed under
the loan. The accounts were audited annually by independent auditors and the audited
accounts were generally submitted on time to ADB and substantially met the covenant
requirements.
31
ADB agreed to provide retroactive financing of $25 million for eligible expenditures for the immediate rehabilitation
of key infrastructure and facilities and for consulting services incurred not earlier than 12 September 2004 (date of
appraisal), provided that the expenditures conformed to agreed procedures and were certified by the EAs and
consultants, and that the certification was acceptable to ADB. Retroactive financing was to be approved under the
following conditions: (i) the consultants were in the field and had prepared the subproject, (ii) contracts over
$50,000 equivalent were approved by ADB, and (iii) works were procured according to tender procedures
acceptable to ADB and certified by the consultants (ADB. 2005. Report and Recommendation of the President to
the Board of Directors on a Proposed Loan and Technical Assistance Grants to the People’s Republic of
Bangladesh for the Emergency Flood Damage Rehabilitation Project. Manila [Loan 2156-BAN(SF)], para. 52).
9
H.
Related Technical Assistance
29.
ADB included two TA grants in the Project. These were (i) Support for Financial
Management and Monitoring,32 and (ii) Early Warning Systems Study.33
30.
The overall objective of the first TA was to assist the Government of Bangladesh in
monitoring the Emergency Flood Damage Rehabilitation Project. This entailed supporting the
PSC and its secretariat, the Implementation Monitoring and Evaluation Division (IMED) of the
Planning Commission, in the tasks mandated by the Government for the effective monitoring
and evaluation of the Project. The IMED was the EA for this TA. The Government did not have
to sign a TA agreement for this small-scale TA, which was implemented over 24 months. The
consultant’s contract was signed on 4 July 2005 and the consultant was fielded on 24 July 2005
and completed the work on 23 August 2007. Overall the TA was rated as success. No TA
completion report (TCR) was prepared.34
31.
The objective of the TA for the Early Warning Study was to assist the Government in
assessing the effectiveness of its flood forecasting system and in drawing up a strategy for
enhancing its usefulness and early-warning capability. This entailed assessing institutional,
technical, physical, and other constraints and developing a strategy for improving the system.
The Government of the Netherlands approved grant financing of $250,000 equivalent, leading to
the cancellation of the equivalent amount earmarked by ADB for the TA. ADB, however,
administered the TA, with BWDB as Executing Agency. As originally envisaged, the TA was to
be implemented over 6 months, from 15 February 2005 to 14 August 2005. The signing of the
TA Agreement by the Government was, however, significantly delayed—the agreement was not
signed until 23 April 2005—and so was the selection of the individual consultants. Eleven
individual consultants were short-listed only in February 2006 and their contracts were signed
only during 19 April–21 June 2006 for intermittent inputs from 1 May 2006 to 31 October 2006.
Internal reallocation of the person-months of the international and national consultants also
contributed to some delay. Although this was a 7-month study, it took two more months for the
final report to be completed. The recommendations prompted the national steering committee to
approach the development partners for the high-priority investments needed to improve the
flood forecasting and warning system. Overall, the TA was rated as success. Full details of the
TA and its outputs are given in the TCR in Appendix 8.
I.
Consultant Recruitment and Procurement
1.
Consultant Recruitment
32.
Consultant recruitment was as envisaged at appraisal and conformed to ADB’s
Guidelines on the Use of Consultants (2007, as amended from time to time). Because the
Project had a short implementation period and issues needed to be addressed as quickly as
possible, the consultants had to be recruited without delay. ADB therefore agreed to the direct
engagement of consultants and approved advance action in that regard. At the request of the
Government, made through the Economic Relations Division in December 2004, ADB agreed to
engage the consultants directly on behalf of the Borrower. The consultants were recruited from
32
ADB. 2005. Technical Assistance to the People’s Republic of Bangladesh for Support for Financial Management
and Monitoring. Manila (TA 4561-BAN, for $150,000, approved on 20 January).
33
ADB. 2005. Technical Assistance to the People’s Republic of Bangladesh for Early Warning Systems Study. Manila
(TA 4562-BAN, for $250,000, approved on 20 January).
34
According to Project Administration Instruction 6.08, a TCR is not required for small-scale technical assistance,
which is currently defined as TA with an approved value of no more than $150,000.
10
ADB’s various ongoing loan projects and were fielded from 20 December 2004. By 1 January
2005 all the consultants were in the field.
33.
ADB selected five consulting firms, one for each of the five components. The selection
was based on (i) current or prior substantial and satisfactory experience in ADB-financed flood
damage rehabilitation projects in Bangladesh, (ii) capacity to deploy needed expertise of the
specified relevance and quality at short notice, and (iii) previous selection for ongoing projects
following ADB’s Guidelines on the Use of Consultants and satisfactory performance in those
prior engagements. ADB on 15 December 2004 invited the five consulting firms to submit their
technical and financial proposals, and by the end of that month had received proposals from all
five consultants. All the consultants’ contracts were signed by 12 October 2005. The
consultants’ inputs procured under the five components totaled 236 person-months of
international consultants (compared with 25035 at appraisal) and 2,237 person-months of
national consultants (compared with 2,200 at appraisal). The consulting inputs as envisaged at
appraisal and as used by project completion are summarized in Appendix 9.
2.
Procurement
34.
Project goods and services financed by ADB were procured through local competitive
bidding (for civil works) and through international competitive bidding and international shopping
(for equipment and materials), according to ADB’s Procurement Guidelines (2007, as amended
from time to time), as envisaged at appraisal. A total of 1,684 civil works contract packages
were procured for the Project, comprising 709 contracts36 for part A; 120 contracts37 for part B;
75 contracts for part C; 278 contracts for part D; and 502 contracts for part E.38 Equipment and
materials for part C (railways) were procured through international competitive bidding.
35.
The procurement of all contract packages went reasonably smoothly, with some
exceptions. In part A there were allegations that LGED did not follow due diligence in
procurement and contract implementation, and strong indications of corruption by LGED’s field
staff in quality assurance. Through review missions, coordination meetings, and PSC meetings,
ADB closely monitored these incidents, and in some cases advised rebidding or cancellation of
contracts. Procurement for Part B was protracted, with an average lead time of 10 months.
Several contract packages had to be rebid or canceled because of inadequate integrity in the
bidding process, the submission of forged bid securities by the bidder, and incidents of coercion.
In part B there were six contract packages in Comilla zone. Out of the 120 firms that purchased
bidding documents for these contracts, only 5 submitted bids. Investigation by ADB’s
Anticorruption Unit strongly indicated that other contractors had been barred through coercive
and restrictive practices from submitting bids. The six contract packages were canceled. This
isolated incident, however, does not detract from the performance of LGED (see para. 40).
J.
Performance of Consultants, Contractors, and Suppliers
1.
Consultants
36.
The performance of the consultants under all five components was generally
satisfactory, considering the multitude of small contracts and the wide dispersion of the project
35
The appraisal report quoted 250 person-months of international input. But the appendixes to the report indicated a
total of 246 person-months for the five components.
36
Including additional contract packages made possible by loan savings.
37
Comprising 101 road packages and 19 bridge packages.
38
Including additional contract packages made possible by loan savings.
11
sites. However, the consultants’ monitoring systems and practices could have been
strengthened further through (i) greater vigilance by their ground-level staff, (ii) closer
coordination between the consultants’ Dhaka base and the field through more frequent
meetings, (iii) the presence of the team leader in the country during key or peak project
activities, and (iv) the enhanced integrity of the consulting staff in supervising contractors’ work.
2.
Contractors
37.
The performance of all contractors was generally satisfactory and the quality of the
completed works was good. Several components, however, suffered delays due to the
following: (i) contractors’ reluctance (or inability) to prepare adequate work plans, (ii) the
occurrence of three rainy seasons during the project period, (iii) contractors’ lack of proper
management capacity, (iv) delay in getting some material testing reports, and (v) political
disturbances in the country. In some components, because of the inadequate financial
capabilities of many contractors, interim payment certificates had to be resubmitted several
times, holding up the implementation of works. Some small contractors mobilized late; thus,
some subcomponents were not completed on time. Additionally, some contracts that were
making little or no progress were canceled.39
3.
Suppliers
38.
The only component that involved the supply of equipment and materials was part C
(railways). The provision of steel sleepers was delayed, as a supplier had difficulty obtaining
supply from its principal in India. The supplier eventually subcontracted the package for steel
sleepers. Political unrest also delayed the production of steel sleepers. Overall, however, the
performance of the suppliers of equipment and materials was satisfactory.
K.
Performance of the Borrower and the Executing Agency
39.
The performance of the Borrower and the EAs was satisfactory. Despite the complexity
of the Project—the short implementation period, and the involvement of five sectors and four
EAs—the Borrower performed satisfactorily and achieved successful project implementation.
The PSC, established quickly within the Planning Commission, performed well and fulfilled most
of its obligations in monitoring project implementation by the different EAs. However, during the
early stages of the Project, substantial delay in approving the award of contracts and release of
government counterpart funds delayed the progress of work.
40.
Among the four EAs, the performance of LGED (parts A and E), RHD (part B), and
BWDB (part D) was highly satisfactory. LGED effectively used the loan savings from other
components to undertake 42 additional subprojects. Allegations of procurement corruption
(para. 35) do not undermine its performance. Although RHD disbursements were slow at times,
mainly because of slower than expected progress under several bridge projects,40 on the whole,
RHD did well and, despite the initial delays in the awarding of contracts, completed all works by
the loan closing date of 31 July 2007. The performance of BWDB (part D) was also highly
satisfactory, particularly in managing the highly technical and time-based river-borne structures,
although there were minor start-up delays. On the other hand, the performance of BR (part C)
39
40
Slow progress led LGED to cancel 17 subprojects.
Some bridge projects were canceled as they could not be completed within the loan period.
12
was only partly satisfactory. The implementation of works under the BR component suffered
from poor planning and lengthy procurement procedures41 inherent in BR’s outdated system.
L.
Performance of ADB
41.
The Project was processed and administered by ADB’s Bangladesh Resident Mission
(BRM). BRM conducted an inception mission, five review missions, and three special loan
administration missions. The mission teams visited the project sites and also the EAs’
headquarters in Dhaka, where coordination meetings were held. Two ADB project officers were
involved in the implementation of the Project.42 The role carried out by the ADB missions in
giving advice on technical issues, preparing and evaluating bid documents, and assisting with
loan administration was recognized by the EAs. ADB authorized advance procurement action
for equipment and materials, and the recruitment of consultants, and agreed to provide
retroactive financing, which was effective and saved time. ADB also recommended simplified
approval procedures43 for contract awards, which were realistic for the Project. ADB-BRM
carried out effective coordination through quarterly PSC meetings and monthly meetings with
the EAs’ project directors. Overall, the performance of ADB was satisfactory.
III.
A.
EVALUATION OF PERFORMANCE
Relevance
42.
The Project’s design and formulation conformed to the Government’s development
strategy of promoting economic development by improving infrastructure, and was in line with
ADB’s 1999 country operational strategy, which was aimed at reducing poverty through
economic development. The Project was designed to restore flood-damaged infrastructure
facilities essential to economic growth. All of the objectives envisaged at appraisal were
achieved during the Project. With the infrastructure restored, affected sectors were able to
contribute to economic growth, at least at pre-flood levels. No major changes were made in the
project design during implementation. The Project is therefore considered highly relevant to
ADB’s present country operational strategy and the Government’s latest development strategy,
and remains relevant.
B.
Effectiveness in Achieving Outcome
43.
The Project was highly effective, as the completed subprojects in all components
achieved their principal objective of restoring damaged infrastructure to pre-flood levels, thus
enabling the country to return to the normal economic and social activities that had been
disrupted by the floods. Farmers in low-lying, flood-prone areas benefited from reduced water
logging of agricultural land. Rehabilitation works on the railways enabled train services to and
from the affected areas to return to normal.44 The restoration and rehabilitation of road and
bridge subprojects gave isolated villages access to markets and social services in nearby urban
centers. This was particularly important for agro-based industries, which are the main economic
activity in the majority of the areas affected by the floods.
41
Some of this delay can, however, be attributed to the suppliers of equipment and materials.
The two project officers were based in BRM.
43
Government of Bangladesh. Circular No. PD NEC-EC/NEC/Coordination-2/13/98/223. 16 October 2000.
44
The slope protection works on railway embankments, using geo-textile technology, avoided the recurrence of
temporary repair works and thus resulted in considerable savings in government expenditures.
42
13
44.
In general, all project components made notable contributions to poverty reduction in the
immediate vicinity of the subprojects. Subproject construction activities generated employment
opportunities for local labor. Those employed in the works benefited from increased income and
purchasing power. An assessment of the project impact and benefits, based on a sample of
subprojects that were visited by the PCR Mission, is in Appendix 10.
C.
Efficiency in Achieving Outcome and Outputs
1.
45.
Financial Performance
The Project did not undergo financial evaluation because it was not revenue-generating.
2.
Economic Performance
46.
As the Project was of an emergency nature, no economic analysis was undertaken to
justify the investments at appraisal. The Project focused on the restoration of flood-damaged
key infrastructure facilities, and capital costs were considered sunk costs. The economic
benefits of such restoration activities were, in fact, those that accrued at the time of initial
construction but were mostly lost because of flood damage. Project-financed restoration brought
infrastructure back to its original productivity and efficiency levels. These benefits are high,
though not always quantifiable for all project components. At appraisal the economic internal
rate of return (EIRR) on past flood damage rehabilitation projects was in the range of 18% to
55%.
47.
Without defined baseline or time-series socioeconomic data for most components, and
given the fact that the damaged facilities were restored only to their pre-flood status, no attempt
was made to conduct economic evaluation for those components with little or no data.45
Economic efficiency, as measured by the EIRR, was assessed for two sample road sections in
part B (a regional road and a ‘district’ road) because road projects are more amenable to benefit
quantification. The results show that the investment has been highly efficient.46 The calculated
EIRRs were 39.9% for the regional road, and 23.9% for the ‘district’ road. These EIRRs
compare favorably with the 12% economic opportunity cost of capital. Appendix 11 shows the
calculated EIRRs as well as the supporting assumptions.
D.
Preliminary Assessment of Sustainability
48.
The rehabilitation and restoration works under the Project were of an emergency nature,
aimed at meeting immediate needs, and enabling a return to normal economic and social
activities in the affected areas. These rehabilitated components have shown their ability to
withstand future floods. Immediately after the completion of the Project, floods occurred during
45
ADB.1995. Operations Manual. Section 25/BP: Rehabilitation Assistance after Disasters. Manila (page 4, footnote
1) states that “the rehabilitation loan may finance numerous subprojects that are small in size and prima facie
economically viable. For such small projects, internal rate of return analysis may not be feasible or practical.” Also
OM Section D&/BP states that although rigorous rate-of-return analysis may not be feasible, estimates in an order
of magnitude should be provided and justified with as much detail as possible.
46
According to the guidelines of ADB’s Operations Evaluation Department, if the estimated EIRR exceeds 18% a
project is normally rated highly efficient. An EIRR less than or equal to 18% but greater than or equal to 12%
indicates an efficient project; an EIRR less than 12% but greater than or equal to 6%, a less-efficient project; and
an EIRR of less than 6%, an inefficient project.
14
two short periods over 3 months in July–September 2007.47 A large part of the 2007 floods
affected the project area. The embankment protection works, rehabilitated road projects, and
rail works undertaken during the Project did not suffer any damage. This was verified by the
PCR Mission during visits to several completed civil works subcomponents under the Project.
49.
The sustainability of the project components depends on the EAs’ ability to preserve the
rehabilitated assets through proper maintenance. To ensure sustainability and facilitate
monitoring, covenants relating to the Project’s operation and maintenance expenditures may
need to be specific to each sector. The EAs, however, are faced with funding shortfalls each
year. On average, the road routine maintenance budget is about $2.0 million.48 Periodic
maintenance is allocated about $42.0 million yearly, or around $2,000 per km. This current
allocation is insufficient. The absence of regular maintenance due to budgetary shortages has
resulted in a considerable backlog of maintenance work. A recent study49 has estimated that the
maintenance requirement may be double the present allocation. For the road subcomponents
(parts A and B) the Government is seriously considering establishing a road maintenance fund
(RMF). A draft bill50 for consideration by the Ministry of Finance and the Ministry of
Communications (MOC) has been prepared. An 11-member committee set up by MOC
reviewed the bill on 20 March 2007. A second meeting to finalize the bill is expected before it is
presented to the Cabinet. The Government is committed to establishing the RMF and has been
receiving assistance from the Road Fund Establishment Office,51 which was established to draft
the legislation. The subprojects under parts A and B have an economic life of about 5 years, as
they were rehabilitated to meet immediate needs. They will need further periodic maintenance in
2010 or 2011 (most of the road rehabilitation was completed in 2005 or 2006).52 The
establishment of the RMF before then (expected in 2008) will ensure funding for road
maintenance. The other components rehabilitated and restored under parts C, D, and E consist
mainly of permanent structures (e.g., bridges, culverts, protective works, sluice gates,
embankments, and railway tracks) that are still in good condition and proved their sustainability
during the 2007 floods. As confirmed by the PCR Mission, these structures are still intact and
have not been damaged. The structures should, however, continue to be maintained by the
EAs. Overall, therefore, the project outputs are rated likely to be sustainable.
E.
Other Impact
1.
Environmental Impact
50.
An initial environmental examination (IEE) of the entire project area indicated that no
significant adverse environmental impact was associated with the Project. All subprojects
recommended by the EAs were also subjected to environmental screening. Subprojects that
were perceived to have a harmful impact on the environment were to be excluded. The
subprojects were checked by BRM to ensure that they satisfied environmental requirements
47
The first flood was from the end of July until mid-August and inundated about 30% of the country’s land mass. The
second flood occurred after prolonged and heavy rainfall from the end of August to mid-September, flooding about
42% of Bangladesh.
48
This is to cover routine maintenance on about 21,000 km of road, for a budget of about $126 per km.
49
World Bank. 2006. Road User Charges Study for Sustainable Road Maintenance Financing. Washington, DC
(undertaken as part of the Road Sector Reform Project, March).
50
The bill sets out the purpose of the fund, the source of its revenues, the composition and general duties of the road
fund board, and the preparation and review of the annual road maintenance program of the road agencies.
51
Set up under the Consolidated Institutional Component project financed by the Department for International
Development of the United Kingdom.
52
The PCR Mission observed that most project roads visited were in satisfactory condition after 2 years of service
and were likely to last their design life of 5 years.
15
before they were approved. All the subprojects nominated by the EAs met the required
environmental standards and incorporated environmental mitigation measures where
necessary. As the subprojects were already existing, no additional environmental impact
assessment was considered necessary. The environmental mitigation measures recommended
in the IEE were incorporated into the design and civil works contracts. The consultants’ field
investigations formed the basis for the environmental analysis. Environmental concerns that
were uncovered during these site visits were communicated to contractors so that they could
undertake environmental mitigation measures. Compliance with the recommendations was
subsequently checked by the EA and the consultants. The project activities did not interfere with
ecosystems, as almost all work was restorative. In a few cases where designs were modified
slightly for the relocation of damaged infrastructure, no adverse environmental effects were
allowed. The PCR Mission observed in some urban areas (part E: municipal infrastructure) that
drains were blocked by waste materials from local residents. The PCR Mission suggested to the
EA that a public awareness campaign and discussions with local residents might enable the
latter to understand the need to protect their environment as these rehabilitated roads, drains,
and other assets were improving their way of life. No other environmental problems were
observed.
2.
Socioeconomic Impact
51.
The Project has had significant direct and indirect socioeconomic impact. The project
works have generally improved the quality of life of the rural communities, the principal
beneficiaries. The restoration works have allowed normal activities to resume, with easier
access to markets, hospitals, and schools. People have returned to their homes and normal
activities with greater assurance that the physical infrastructure can now cope with future floods.
3.
Resettlement Impact
52.
Although no land acquisition or involuntary resettlement was anticipated, a resettlement
framework was prepared at appraisal as required under ADB’s safeguard policy for sector
loans. All work was undertaken in existing alignments or original sites, and no land acquisition
or resettlement was undertaken.
IV.
A.
OVERALL ASSESSMENT AND RECOMMENDATIONS
Overall Assessment
53.
The Project is considered highly successful, on the basis of a review of its relevance,
effectiveness, efficiency, and sustainability. Appendix 12 presents a quantitative assessment of
project performance to determine the project rating.
B.
Lessons
54.
Projects that involve several sectors, and therefore several EAs, must be monitored
through a central PSC of the Borrower. Regular interaction between the Government and ADB
through the PSC contributed greatly to the success of the Project. The use of a sector approach
was extremely beneficial in identifying appropriate subprojects scattered over a wide area and
enabling funds to be reallocated from one sector to another as the need arose.
16
55.
The three EAs that have done well in implementing ADB-funded emergency flood
damage rehabilitation projects are LGED, RHD, and BWDB. The fourth EA, BR, has significant
capacity constraints. It needs capacity building to improve its contract administration and
knowledge of the procurement and disbursement procedures of ADB so that it can implement
civil works contracts without delay.
56.
The use of simplified approval procedures has proved effective and enabled quick
implementation of the Project, and early restoration of people’s livelihoods in the areas affected
by the Project. The use of this type of procedure did not detract from the successful
implementation of the Project.
56.
As other ADB emergency flood projects have shown, the delegation of authority to the
ADB mission in the borrower’s country is essential for close monitoring and speedy decision
making.
C.
Recommendations
1.
Project-Related
57.
The Government should regularly provide adequate funds for routine, periodic, and
emergency maintenance of completed subprojects under the Project, through allocations in the
annual development program for each fiscal year. This relates to all subcomponents and will
require annual monitoring by the EAs. The creation of the RMF in the near future will ensure
adequate funding for road infrastructure maintenance. ADB is monitoring the creation of the
RMF. The completed subprojects related to riverbank protection and flood control embankments
should be closely monitored annually by BWDB, particularly during each monsoon season.
Similarly, the restoration work undertaken by BR on embankments, ballast walls, and bridges
should also be closely monitored. All EAs should undertake urgent remedial measures where
necessary.
58.
It is recommended that a project performance evaluation report (PPER) is undertaken in
another 2 years to determine if the Project is still meeting its objectives. To gather the necessary
data, ADB should require the Government to continue monitoring the performance of the
completed subprojects and reporting the project benefits until the PPER mission is fielded.
2.
General
59.
For the successful implementation of future ADB-supported emergency assistance
projects, a central coordination and monitoring unit such as the PSC should be identified and
planned in detail at appraisal. The funding and disbursement mechanism should include the
establishment of imprest accounts by EAs, if possible with a higher ceiling of 20% of the
allocated fund. These accounts will help expedite project implementation through adequate
coordination and ensure uninterrupted cash flow for contractors and consultants.
60.
To overcome the capacity constraints of EAs identified during the implementation of the
Project, ADB may provide regular training to the staff of the EAs implementing the subprojects.
The objective should be to educate and acquaint the staff with ADB’s project cycle and ADB
procedures relating to procurement and loan disbursement.
PROJECT FRAMEWORK
Impact
Contribute to sustainability of economic
growth by minimizing the devastating impact
of severe floods
Outcome
1. Restore economic and social activities in
flood-affected areas
Appraisal Performance
Indicators/Targets
• Economic recovery and
increase in economic activity
in flood-affected areas
• Recovery leading to
restoration of pre-flood
conditions in affected areas
Economic recovery and increased economic
activity have been achieved as evidenced by the
increased volume of traffic in the project areas.
Rehabilitated infrastructure,
adopting appropriate floodresistant design standards
During the 2007 floods the embankment protection
and other works undertaken in the water resource
sector preserved the assets that were rehabilitated
under the Project.
See paras. 43–44
and Appendix 10.
Access to health and education facilities has
improved as the rehabilitated roads have shown a
considerable increase in traffic.
The floods of 2007 did not
damage the assets
rehabilitated during the
Project.
Increases in traffic volumes
on selected roads are
described in Appendix 11.
Economic development has been stimulated in the
project areas, and incomes and employment have
increased. Labor from local villages gained
employment directly from the Project during the
construction period.
See para. 44 and Appendix
10.
2. Reduce vulnerability to future floods
Reduced damage to
infrastructure in the
event of
future floods
Improved access to health
and education facilities
and
markets
Improved incomes and selfreliance
Component/Outputs
1. Rural Infrastructure
• Rehabilitated rural infrastructure including
feeder roads (upazila roads), rural roads
(union roads), bridges, and culverts
Project Achievements
Rehabilitation completed by
31 January 2007
Rehabilitation of upazila and
union roads = 5,500 km
All pre-flood assets, i.e., road, bridge, rail, water
protection facilities (including embankments), etc.,
have been restored and improved.
Rehabilitation completed by 31 July 2007
Upazila and union roads = 2,423.41 km
Bridges/Culverts on upazila and union roads =
11,075.51 m
Increases in traffic volumes
on selected roads are
described in Appendix 11.
The restored assets
prevented damage in the
2007 flood.
See paras. 12–18.
17 Appendix 1
Design Summary
Key Issues
and
Recommendations
Design Summary
• Rehabilitated flood and cyclone shelters
provided with latrines
2. Roads
• Rehabilitated national, regional, and district
roads and bridges
3. Railways
• Rehabilitated railway infrastructure and
facilities including restoration of
embankments, track, bridges, essential
buildings, station roads, and signaling and
telecommunications, using flood-resistant
design standards
4. Water Resources
• Rehabilitated flood control, drainage, and
irrigation facilities, including repair of
embankment breaches, water control
structures, protective works, and canals; and
provision of pump stations
5. Municipal Infrastructure
• Rehabilitated municipal roads, drains,
bridges, and culverts
• Rehabilitated municipal footpaths, and
drains in slums
Appraisal Performance
Indicators/Targets
Bridges/Culverts on upazila
and union roads = 13,200 m
Tree plantations = 110 m
Flood refuge shelters = 20
Flood protection works = 40
km
Rehabilitation completed by
31 January 2007
Roads = 2,968 km
Bridges = 306
Rehabilitation completed by
31 January 2007
Embankment re-profiling =
103,501 m
Ballast walls = 32,224 m
Embankment protection (geotextile) = 78,599 sq m
Embankment protection walls
= 24,668 m
Embankment natural ground
replacement = 571 cu m
Repair and modernization of
bridges = 156
Rehabilitation completed by 31 July 2007
Roads = 3,572 km
Bridges = 2,115 m
Rehabilitation completed by 31 July 2007
Embankment re-profiling = 90,116 m
Ballast walls = 39,383 m
Embankment protection (geo-textile) = 87,868 sq
m
Embankment protection walls = 19,834 m
Embankment natural ground replacement = 391
cu m
Repair and modernization of bridges = 146
Rehabilitation completed by 31 July 2007
Embankment: full = 105.099 km, part = 923.698
km
Irrigation/Drainage: full = 3.855 km, part = 25.287
km
Water control structures: full = 33, part = 426
Protective work: full = 15.5 km, part = 13.753 km
Footpath rehabilitation was
not undertaken as this was
done by the municipalities
themselves (see para. 18).
Rehabilitation completed by 31 July 2007
Municipal roads = 1,315 km
Bridges/Culverts = 426 m
Drains = 61.5 km
Footpaths in slum areas = 0 km
18
Rehabilitation completed by
Tree plantations = 32.98 m
Flood refuge shelters = 9
Flood protection works = 45 km
Appendix 1
Rehabilitation completed by
31 January 2007
Embankment: full = 128.932
km, part = 926.908 km
Irrigation/Drainage: full =
3.855 km, part = 25.362
km
Water control structures: full =
33, part = 426
Protective work: full = 15.5
km, part = 14.087 km
Project Achievements
Key Issues
and
Recommendations
Activities
1. Preparation of tender documents
2. Procurement (civil works)
3. Construction supervision and project
management
Appraisal Performance
Indicators/Targets
31 January 2007
Municipal roads = 1,028 km
Bridges/Culverts = 393 m
Drains = 47 km
Footpaths in slum areas = 63
km
ADB loan approved by 13
January 2005 and effective by
1 February 2005
Government
budgets
for
2005–2007 provide adequate
annual counterpart funding
Project Achievements
Inputs
1. Asian Development Bank financing: $180 million
2. Cofinancing from the Gov’t of the Netherlands: $13 million
3. Cofinancing from Sida: $14.7 million
4. Counterpart financing from Gov’t of Bangladesh: $60 million
6. Technical assistance: $400,000
ADB = Asian Development Bank, cu m = cubic meter, km = kilometer, m = meter, Sida = Swedish International Development Cooperation Agency, sq m = square meter.
19 Appendix 1
Design Summary
Key Issues
and
Recommendations
Appendix 2
MAPS OF PROJECT COMPONENTS AS COMPLETED
20
21
Appendix 2
Appendix 2
22
23
Appendix 2
Appendix 2
24
25
Appendix 3
APPRAISAL AND ACTUAL COSTS
($ million)
Appraisal Estimate
Project Component
Foreign
Local
8.90
37.00
10.20
5.53
3.62
62.98
25.70
6.60
32.40
28.16
71.88
62.70
16.80
37.93
31.78
9.90
29.97
4.23
4.64
4.49
56.45
19.92
2.54
24.31
26.19
66.35
49.89
6.77
28.95
30.68
Subtotal (A)
65.25
155.84
221.09
53.22
129.41
182.63
B. Equipment and Materials
1. Railways Emergency Stock
Subtotal (B)
0.80
0.80
1.60
8.78
0.00
8.78
0.80
0.80
1.60
8.78
0.00
8.78
C. Consulting Services
1. Rural Infrastructure
2. Roads and Bridges
3. Railways
4. Water Resources
5. Municipal Infrastructure
0.96
2.05
0.80
1.60
0.34
1.10
2.75
0.60
1.30
1.78
2.06
4.80
1.40
2.90
2.12
0.84
1.81
0.80
1.47
0.29
0.95
2.42
0.59
1.20
1.54
1.79
4.23
1.39
2.67
1.83
Subtotal (C)
5.75
7.53
13.28
5.21
6.70
11.91
D. Land Acquisition and Resettlement
Subtotal (A+B+C+D)
0.00
71.80
2.00
166.17
2.00
237.97
0.00
67.21
0.00
136.11
0.00
203.32
2.00
0.00
2.00
0.96
0.00
0.96
73.80
166.17
239.97a
68.17
136.11
204.28
A. Civil Works
1. Rural Infrastructure
2. Roads and Bridges
3. Railways
4. Water Resources
5. Municipal Infrastructure
E. Interest during Construction
Total
a
Total
Actual
Foreign
Local
Total
Financing estimated at $240.00 million while project cost was estimated at $239.97 million during appraisal and
reflected accordingly in the report and recommendation of the President. This PCR uses the approved figures from
the RRP.
Source: Asian Development Bank estimates.
Appendix 4
CURRENCY EQUIVALENTS
a
Year
Tk:$ Rate
2004
2005
2006
2007
2008a
60.88
64.65
70.29
70.46
69.76
2008 exchange rate is based on 1 January–11 March 2008.
Source: Asian Development Bank estimates.
26
27
Appendix 5
PROJECTED AND ACTUAL DISBURSEMENTS
($ million)
Year
Appraisal
Actual53
2005
2006
2007
55.26
76.67
48.07
26.44
78.54
31.87
Total
180.00
136.85
Source: Asian Development Bank Loans Financial Information System.
53
ADB cancelled $27.4 million of loan funds following cofinancing by the Government of Netherlands and Sida for the
equivalent amount.
PROJECT IMPLEMENTATION SCHEDULE
28 Appendix 6
29 Appendix 6
Source: Asian Development Bank estimates.
Appendix 7
30
STATUS OF COMPLIANCE WITH MAJOR LOAN COVENANTS
Covenant
Sector Covenants
1. In the carrying out of the Project and
operation of the Project facilities, the Borrower
shall perform, or cause to be performed, all
obligations set forth.
Reference in
Loan Agreement
Status of Compliance
Schedule 6
(Section 4.01)
Complied with.
2. The Borrower shall (i) maintain, or cause to
be maintained, separate accounts for the
Project; (ii) have such accounts and related
financial statements audited annually, in
accordance with appropriate auditing
standards consistently applied, by Comptroller
& Auditor General of the Borrower; (iii) furnish
to ADB, as soon as available but in any event
not later than the sixth month after the end of
each related fiscal year, certified copies of
such audited accounts and financial
statements and the report of the auditors
relating thereto (including the auditor’s opinion
on the use of the Loan proceeds and
compliance with the financial covenants of this
Loan Agreement as well as on the use of the
procedures for imprest account/statement of
expenditures, all in the English language; and
(iv) furnish to ADB such other information
concerning such accounts and financial
statements and the audit thereof as ADB shall
from time to time reasonably request.
Section 4.02 (a)
Complied with.
3. Without limiting the generality of Section
6.05(A) of the Loan regulations, the Borrower
shall furnish, or cause to be furnished, to ADB
quarterly reports on the carrying out of the
Project and on the operation and management
of the Project facilities.
Section 4.03
Complied with.
4. The Borrower shall enable ADB’s
representatives to inspect the Project, the
goods financed out of the proceeds of the
Loan, and any relevant records and
documents.
Section 4.04
Complied with.
5. Project Executing Agency: LGED shall be
the Project Executing Agency for Part A and E
of the Project; RHD shall be the Project
Executing Agency for Part B of the Project; BR
shall be the Project Executing Agency for
Part C of the Project; and BWDB shall be the
Project Executing Agency for Part D of the
Project.
Schedule 6,
Para. 1
Complied with.
(i) Separate Project accounts
were maintained; (ii) periodical
audits were completed; (iii)
certified copies of audit reports
were submitted to ADB; (iv)
completed as requested.
31
Appendix 7
Covenant
Project Implementation-Project Steering
Committee (PSC): The PSC, chaired by the
Member of Programming of the Planning
Commission of the Ministry of Planning of the
Borrower. Shall be responsible for monitoring
implementation of the Project and overseeing
all Project governance-related matters,
including any issues that may arise relating to
mismanagement and breach of quality
standards in design or execution of the Project.
It will meet at regular intervals but at last once
every 60 days to review progress of the
Project. Prior to each such meeting, IMED shall
provide to the Chairman and each member of
the PSC with a copy to ADB a written report on
their findings with respect to monitoring of the
Project activities over the relevant prior period.
Reference in
Loan Agreement
Schedule 6,
Para. 2
Status of Compliance
Complied with.
PSC was formed and regular
meetings held with EAs and
ADB.
The PSC may, from time to time, invite
independent experts drawn from reputable
national institutions to assist it in the discharge
of its responsibilities. The Chairman or any
member of the PSC may request for enlistment
of such an expert. The cost of enlisting such
expert participation, if any, shall be borne out
of the unallocated funds in the Project budget.
7. Project Management Unit: Each of LGED,
RHD, BWDB and BR shall be responsible for
implementing its designated Part or Parts of
the Project through their respective Project
Management Units (PMUs), each of the PMUs
shall report on the progress of their respective
Parts) of the Project at least once every 60
days to the PSC.
Schedule 6,
Para. 3
Complied with.
8. Subproject Selection Criteria and approval
Process: The Borrower shall ensure that all
subprojects carried out under the Project meet,
to the satisfaction of ADB, the agreed general
and sector-specific selection criteria and
implementation arrangements and that all
subprojects are properly controlled and
monitored to the satisfaction of ADB.
Subprojects to be carried out under the Project
will be identified and selected in accordance
with sector-specific criteria agreed between the
Borrower and ADB as set forth in Appendixes
three to seven in the RRP. In addition,
irrespective of the sector, each subproject
proposal will be subject to evaluation on the
basis of the following general criteria as
agreed.
Schedule 6,
Para. 4
Complied with.
Appendix 7
Covenant
9. Borrower’s Commitment to Operation and
Maintenance of Facilities: The Borrower shall
ensure that all facilities rehabilitated under the
Project are properly operated and maintained
by the relevant Project Executing Agency
concerned in accordance with sound practices.
To this end, within six months of the date of
Loan Effectiveness, each relevant Project
Executing Agency shall prepare an action plan
that will include financial requirements and
management/monitoring procedures and other
pertinent elements for year-round effective
maintenance of rehabilitated facilities. A copy
of each of the action plans shall be submitted.
Reference in
Loan Agreement
Schedule 6,
Para. 5
32
Status of Compliance
Complied with.
A time-bound action plan was
prepared and submitted to
ADB.
10. Enhanced Beneficiary Participation: The
Borrower shall ensure that active beneficiary
participation occurs in the selection, design,
and implementation of all rehabilitation works
carried out under the Project.
Schedule 6,
Para. 8
Complied with.
11. Project Monitoring and Review: The
Borrower shall ensure that each Project
Executing Agency shall conduct annual and
random performance audits during project
implementation to determine the degree to
which project funds have been effectively and
efficiently utilized to implement the Project and
achieve its objectives, outputs and
performance indicators.
Schedule 6,
Para. 15.
Complied with.
12. Achieving Good Governance: Consistent
with its commitment to good governance,
accountability and transparency, ADB reserves
the right to investigate directly, or through its
agents, any possible financial or management
impropriety in conducting the Project. The
Borrower and the relevant Project Executing
Agency agree to cooperate with any such
investigation and extend all necessary
assistance, including access to all relevant
books and records as well as engagement of
independent experts that may be needed for
satisfactory completion of such investigations.
All external cost related to such investigations
shall be borne by the Project.
Schedule 6,
Para. 16.
Complied with.
13. The Borrower shall submit all project
activities, including all procurement matters
under the Project, to independent performance
audits by the private sector auditors referred to
in paragraph 18 above to ensure transparency
and objective and independent assessment of
Schedule 6,
Para. 19.
Complied with.
Monitored through Ministerial
review meetings periodically.
33
Appendix 7
Covenant
such activities. Such performance audit shall
be conducted once every quarter in
accordance with terms of reference for the
audit prepared by ADB.
Reference in
Loan Agreement
Status of Compliance
14. Reports: Without limiting the generality of
Section 4.03 of this Loan Agreement, the
Borrower shall cause the supervision
consultant to be engaged under the Project to
submit monthly progress statements and
quarterly progress reports to each of the
Project Executing Agency, the PSC and the
Bank throughout the Project implementation
period.
Schedule 6,
Para. 20
Complied with.
15. Establishing a Baseline: Each of the
Project Executing Agencies shall conduct a
sample survey to establish a baseline
(Baseline) for subsequent Project performance
monitoring unless accurate and reliable
Baseline is already available in documented
form and is made available to the Project
consultants who are satisfied with their
contents. The Borrower shall ensure that the
relevant Project Executing Agency carries out
Project performance monitoring upon
completion of civil works carried out under the
Project and the monitoring results are reviewed
against the Baseline; and
Schedule 6,
Para. 21.
Complied with.
16. Review of ADB Project Portfolio: The
Borrower and the ADB shall complete within
six months of the signing of the Loan
Agreement a review of the prior approved
projects currently active on ABD’s portfolio of
projects in Bangladesh financed by ADB to
assess how their design and operational
methods could be improved to better mitigate
possible recurrence of flooding and other
natural disasters and, where necessary,
identify specific changes in the design and
operational practices of the relevant project.
The Borrower shall promptly adopt the
amendments in the project design or
operations, if any, that are recommended at
the conclusion of the review process.
Schedule 6,
Para. 22.
Complied with.
Appendix 7
Covenant
Environmental Covenants
1. Resettlement, Environment and Other Social
Matters: The Borrower shall ensure that
adequate environmental mitigation measures
in accordance with (a) the Borrower’s
environmental regulations and (b) ADB’s
Environment Policy (2002) and ADB’s
Environmental Assessment Guidelines (2003)
are incorporated into all subproject design and
implementation. The Borrower will ensure that
the agreed environmental assessment
framework is implemented; that all subprojects
for which an IEE is required include such as
IEE in the subproject proposals; and that all
subprojects for which government
environmental clearance is required receives
such clearance prior to the award of any
contracts for the subject subproject.
2. The Borrower will ensure that all ADBfinanced contracts under the Project include
contractual clauses during design and
construction requiring that all necessary steps
be taken to avoid adverse consequences to the
natural environmental, prevent noise pollution,
environmental hygiene related issues.
Social Covenants
1. The Borrower shall ensure that, to the extent
possible, subprojects will not require land
acquisition or involuntary resettlement. In the
event that land acquisition or involuntary
resettlement is required for any subproject,
then the Borrower will prepare a resettlement
plan in accordance with the Borrower’s
applicable laws and regulations, ADB’s Policy
on Involuntary Resettlement (1995) and the
resettlement framework agreed between the
Borrower and ADB and submit to ADB for
review and approval before any land
acquisition is initiated.
2. The Borrower shall ensure that, in
accordance with ADB’s Policy on Gender and
Development (1998), (a) project interventions
take into account the different impacts and
needs of women and men, (b) special features
are built into subprojects to facilitate and
encourage women’s involvement and to ensure
tangible benefits to women; (c) specific
women-related interventions include activities
that uplift women from situations of
vulnerability to position of stability and
(d) project reporting reflects how genderrelated needs are being addressed under the
Reference in
Loan Agreement
34
Status of Compliance
Schedule 6,
Para. 10
Complied with.
Schedule 6,
Para. 14
Complied with.
Schedule 6,
Para. 11.
Complied with.
Schedule 6,
Para. 12.
Complied with.
35
Appendix 7
Covenant
Project, and details the successes
encountered, constraints met, and measures
adopted to overcome them.
3. The Borrower shall ensure that no
subproject shall adversely affect vulnerable
population groups, such as indigenous
peoples. In the event of involvement of
indigenous people in any of the subprojects,
the Borrower will take necessary actions
required under ADB’s Policy on Indigenous
Peoples (1998).
Financial Covenants
1. The Borrower shall enable ADB, upon ADB’s
request, to discuss the Borrower’s financial
statements for the Project and its financial
affairs related to the Project from time to time
with the Borrower’s auditors, and shall
authorize and require any representative of
such auditors to participate in any such
discussions requested by ABD, provided that
any such discussion shall be conducted only in
the presence of an authorized officer of the
Borrower unless the Borrower shall otherwise
agree.
Reference in
Loan Agreement
Schedule 6,
Para. 13.
Status of Compliance
Complied with.
All subprojects had a positive
impact and no adverse impact
on any vulnerable population
group.
Section 4.02 (b)
Complied with.
2. Counterpart Funds: The Borrower will
allocate on a timely basis, adequate
counterpart funds from its budget for each
fiscal year during project implementation.
Schedule 6,
Para. 6
Complied with.
3. Delegated Financial Powers Shall Apply:
The Borrower shall ensure that delegated
financial powers, as approved by the Ministry
of Finance of the Borrower on 1 July 2004 and
4 July 2004, respectively, are followed for this
Project.
4. Audits: Without limiting the generality of
Section 4.0-2(b) of this Loan Agreement, the
Borrower shall have the consolidated Project
accounts and related financial statements
audited annually (in addition to the Office of the
Comptroller and Auditor General of the
Borrower) by recognized local private sector
auditors acceptable to ADB, that shall be
appointed by the Office of the Comptroller and
Auditor General of the Borrower. The Office of
the Director of Accounts (or an office with
equivalent functions) in each of the Project
Executing Agencies shall be responsible for
coordinating all account activities and ensuring
compliance with the Bank’s audit and
accounting requirements, which shall be
followed up in regular reviews by the Bank.
Schedule 6,
Para. 7
Complied with.
Schedule 6,
Para. 18
Complied with.
Appendix 7
Covenant
Others
1. Established, Staffed, and Operating
PMU/PIU
Review and Revision of the Standing Orders
for Disasters: On or prior to 30 April 2005, the
Borrower shall undertake a review of the
Borrower’s Standing Orders for Disasters with
the aim to strengthen coordination,
effectiveness of relief and rescue operations
and medical support and strengthen disaster
preparedness and mitigation. The review shall
be completed by 30 June 2005 and a draft
revised Staffing Orders for Disaster released
for review by ADB and for general public
comment on or before 30 September 2005.
Reference in
Loan Agreement
Schedule 6,
Para. 17
36
Status of Compliance
Being complied with.
Standing
Orders
Disaster
reviewed/updated and Strategic
Plan 2005–2006 approved by
the Cabinet in 2006. Draft
Disaster Management Act is
being reviewed by the Ministry
of Law.
IEE = initial environmental examination, LGED = Local Government Engineering Department.
37
Appendix 8
TECHNICAL ASSISTANCE COMPLETION REPORT
Division: BRM
TA No., Country and Name
TA 4562-BAN: Early Warning Systems Study (EWSS)
Amount Approved: $250,000
Revised Amount: Not revised
Executing Agency: Bangladesh
Water Development Board
(BWDB) under Ministry of Water
Resources (MoWR)
Date
Approval
Signing
20 January 2005
23 April 2005
Source of Funding:
Dutch grant
Amount Undisbursed:
$65,773.19
Consultant(s) Contract
(Intermittent) Duration:
01 May 2006–31 October
2006
TA Completion Date
Original:
Actual:
14 August 2005
30 September 2007
Account Closing Date
Original:
Actual:
14 August 2005
17 August 2007
Amount Utilized:
$184,226.81
Background
In the year 2004, Bangladesh witnessed unprecedented flood. Majority of the country went under water for at least one
month. Disruptions and damages to economy and livelihood caused by the flood have been quite significant. The
workshop “Options for Flood Risk and Damage Reduction in Bangladesh” held during 7-9 September 2004 indicated a
set of recommendations in pursuit of short-medium-long term actions for reducing risk and damages of flood. The
available lead time was considered to be inadequate and forecasts could still be meaningful if operational guidelines
could be made available. It was felt important that all the Policies, Strategies and Plans relevant to existing flood
forecasting system (FFS) were reviewed and the gaps are identified for future action. ADB launched a major two year
long (2005-06) Emergency Flood Damage Rehabilitation Project (EFDRP) (L2156-BAN). This TA was attached to that
loan as a piggy-backed TA.
Description
Bangladesh has several institutions involved in flood forecasting risk monitoring, and mapping. These include (i) the
Flood Forecasting and Warning Center (FFWC), (ii) Bangladesh Meteorological Department (BMD), (iii) the Space
Research and Remote Sensing Organization (SPARRSO), (iv) the Institute of Water Modeling (IWM), and (v) the Center
for Environment and Geographic Information Services (CEGIS). Among these, FFWC and BMD are responsible for
issuing warnings and transmit them to GOB administrative functionaries and NGO communities in flood-prone areas. In
view of the increased frequency of disasters including severe floods, several improvements were felt to be necessary.
These included, (i) transfer of new technology (ii) streamline organizational responsibilities, (iii) increase institutional
capacities, (iv) enhance flood mapping and forecasting systems, (v) provision of new equipment, such as radars, and (vi)
access to regional meteorological and hydrological data. During conceptualization of the TA, one critical issue was to
enhance early warning capability by improving flood forecasting and make more accurate predictions, adapted to the
various needs at different levels, sectors and, organizations, providing the different stakeholders including the poor and
vulnerable groups, with early and easily understandable information. The objective of the EWSS TA was to assist the
Government of Bangladesh in assessing the effectiveness of existing flood forecasting system and in preparing a
strategy to enhance the Flood Forecasting Strategy (FFS) to improve its usefulness and early warning capability. This
entailed assessing the existing system with respect to institutional, technical, and other constraints; in developing an
enhanced FFS, and prepare project profiles and pre-feasibility studies including capacity building and training.
Expected Impact, Outcome and Outputs
Impact: Improved Flood Forecasting and Warning System with sufficient lead time and improved dissemination
mechanism.
Outcome: A clear understanding about the earlier gaps in flood forecasting and warning system along with specific
recommendations for possible interventions (investment proposals at pre-feasibility level) in order to redress those.
Outputs: Reports on National FFS and EWS fully owned by the Ministry of Water Resources (MoWR) and FFWC of
BWDB which includes proposal for 22 possible interventions (investment proposals at pre-feasibility level) covering
following types of activities, i) Increasing accuracy and timeliness of input data, ii) Improving flood forecasts to meet
demands of end users, iii) Improving the extent of coverage and the penetration of the flood early warning system and iv)
Improving / expanding coordination between key institutions involved in flood early warning system. The total cost of the
proposed interventions is approximately $35 million to be implemented in about 5 years duration.
Delivery of Inputs and Conduct of Activities
Although, the activities under the TA was supposed to commence much earlier, there had been a significant delay in
signing the TA letter by the Government and selection procedure of the competent individual consultants for the study.
The man-months of the international and the national consultants needed to be reallocated through an internal
Appendix 8
38
procedure which also contributed to some delay. The short-listing of 11 consultants was complete only in February 2006.
Contracts were awarded in March 2006 for intermittent inputs during May to October 2006. Although the duration of the
study was seven months, it entailed two more months for completion of the final report.
Nine domestic consultants involving 29 person-months of consultancy and two international consultants involving 4
person-months services worked in a team. The whole exercise was divided into two themes; i) flood forecasting and ii)
improved dissemination of flood information. The consultants were recruited individually, but representing the centre of
excellences like IWM, CEGIS, Bangladesh Disaster Preparedness Centre (BDPC), Danish Hydraulic Institute (DHI) and
River Technology Incorporated (RTI). The recruitment of the consultants was done cost-effectively (instead of firm based
selection, consultants were recruited individually on their merits on a competitive basis) and the consultants’ inputs were
of high quality. This is the reason why there is cost saving. The performance evaluation reports (PER) for eleven
consultants were accomplished and their performance was satisfactory. Two national workshops were held to share the
work-in-progress and the draft reports. Government officials and policy makers, water sector experts, and civil society
and local government representatives participated in the workshops. The performance of ADB and the EA was
satisfactory and there was high degree of ownership by GoB on the Final Document.
The FFWC of BWDB the Implementing Agency (IA) provided full support to the consultants. The IA also provided
required counterpart manpower. The TA received strong support from senior IA staff. The National Steering Committee
(NSC) headed by the Secretary of the MoWR was fully involved in the process from the very beginning and finally
approved the draft final report in a NSC meeting held on 19 Feb 2007, which endorsed the recommendations of the TA.
Evaluation of Outputs and Achievement of Outcome
The reports were generated through sound team-work and efficient planning and at reasonable costs. The reports were
of good quality and the Government, other agencies and stakeholders were satisfied with the reports. The reports were
consistent with the TORs. Recommendations, to prioritize the interventions, received at the workshops were
incorporated in the reports. Some recommendations also included further research on systematic assessment of flood
damages to communities and infrastructure both inside and outside FCD projects, and review and update hydraulic
design guidelines for infrastructures etc. Accuracy of short-term (1-2 days) forecast was found to be adequate. Medium
term forecast (3-7 days) needs improvement involving new technologies. Introduction of long-term climate based
forecasts for both flood and drought was considered to be of high importance. Delivery of outputs was slightly delayed
due to country’s political context and there was also delay in submission of reports. On the basis of the
recommendations the NSC decided to approach the development partners to support the highly priority investments to
improve the flood forecasting and warning system.
Overall Assessment and Rating
The TA can be rated as successful. The ownership by the GoB on the final document is very high as they formally
approved it in their NSC meeting on 19 Feb 2007. For sustaining the work done, it will be essential for the Government
to implement the recommendations with appropriate adoption of rules and regulations. Government showed commitment
to carry forward the process of both implementation of the recommendations of the TA and inter-ministerial coordination
as required. BWDB is expected to implement, on its own, recommendations of operational nature (not requiring legal or
policy coverage) for strengthening the institutional capacity of the FFWC. MoWR will take care of the legal and policy
matters, such as the role of BMD and local government institutions in the dissemination of flood information.
Major Lessons
The achievements under the TA depended on the excellent team-work under the committed leadership of the teamleader from IWM and the good working environment provided by the IA. The existing work-culture and the available
general institutional capacity of the IA also allowed it to provide the needed support to the TA. One on the major lesson
of the TA is that the government owned the process from the very beginning as NSC was formed at an early stage,
although it was facilitated / supported by the consultants. Finally, twenty two high priority investment portfolios have been
identified in order to improve the flood forecasting and warning system under the purview of an enhanced FFS. In
addition, it has also identified the capacity development aspects of FFWC, which is crucial.
Recommendations and Follow-Up Actions
ADB should follow-up with the EA to ensure that the significant work done under the TA leads to early adoption of the
national flood forecasting strategy and improvement of early warning system. As the owner of the findings and
recommendations of the TA, MoWR should immediately prepare for implementation of the twenty two proposed high
priority interventions. Based on this, the EA should start implementing the ones which are required on short-term basis
and which does not involve high investment. EA may approach the development partners for financial assistance, if
needed. The Government’s strategy on this issue will be presented in the Local Consultative Group (LCG) – (subgroup
water management) meeting. The meeting will be facilitated by BRM.
Prepared by
Zahir U. Ahmad
Designation
Project Implementation Officer
39
Appendix 9
DETAILS OF CONSULTING SERVICES
Component
Actual
(person-months)
Part A: Rural Infrastructure
1. International consultant
2. National consultant
26
588
30
564
Part B: Roads
1. International consultant
2. National consultant
110
800
110
680
Part C: Railways
1. International consultant
2. National consultant
30
50
28
108
Part D: Water Resources
1. International consultant
2. National consultant
64
342
48
471
Part E: Municipal Infrastructure
1. International consultant
2. National consultant
16
420
20
414
Total
1. International consultant
2. National consultant
a
Appraisal Estimate
(person-months)
246a
2,200
236
2,237
The appraisal report quoted a total international input of 250 person-months. But the appendixes to the
report indicate only 246 person-months of international input for the five components.
Source: ADB. 2005. Report and Recommendations of the President to the Board of Directors on a
Proposed Loan to the People’s Republic of Bangladesh for the Emergency Flood Damage
Rehabilitation Project. Manila (Loan 2156-BAN[SF]); EAs’ project completion reports for parts A,
B, C, D, and E; and findings of the Project Completion Review Mission.
Appendix 10
40
ASSESSMENT OF PROJECT IMPACT AND BENEFITS
1.
The socioeconomic analysis is based on a review of documents related to the Project,
such as the report and recommendation of the President, and project completion reports on the
different components, prepared by the executing agencies (EAs) or consulting firms.
Discussions were also held with officials of the various EAs. In addition, the Project Completion
Review (PCR) Mission made field visits to appraise selected subprojects and, wherever
possible, to obtain the views of the direct beneficiaries through informal discussions. The overall
assessment was limited to the post-project physical conditions and performance of the
interventions at the time of the field visits. The assessment, nevertheless, provides reasonable
feedback on the impact, benefits, and effectiveness of the project components in general.
2.
The PCR Mission visited selected subprojects in 13 districts, namely, Gaibandha,
Kurigram, Lalmonirhat, Bogra, Sirajganj, Tangail, Sylhet, Moulavibazar, Brahmanbaria, Comilla,
Bhairab, Gazipur, and Rangpur. The subprojects included rural roads, national and regional
roads, urban (pourashava) roads, bridges/culverts, drainage and irrigation facilities, water
control structures, slope and embankment protection works for rail tracks, and retaining walls of
bridges.
3.
54
The benefits for each project component are discussed below.
(i)
Part A: Rural infrastructure. The PCR Mission visited projects in the districts of
Brahmanbaria, Moulavibazar Gaibandha, Bogra, Kurigram, and Sirajganj
including the upazilas of Sadar, Sundarganj, and Raiganj.54 In all of the
subprojects visited, the works were found to be in good order. The restoration of
flood-damaged roads (upazila and union roads), bridges, and culverts assisted in
restoring the activities of rural people back to their original pre-flood level. The
road subprojects restored accessibility to trade centers, educational, and health
facilities. The improved surface condition and riding quality of the roads restored
from their flood-damaged condition led to savings in vehicle operating costs for
motorized traffic and reduced the travel time between important centers on the
network covered by these roads. Construction activity during implementation
generated employment for the local population. Incomes increased as a result of
enhanced commercial activity along the improved roads, helping alleviate rural
poverty. The reconstruction or repair of bridges and culverts, which were washed
away or severely damaged, saved local villagers from long detours, allowing
them to benefit from reduced travel time and lower transport costs.
(ii)
Part B: Roads. The PCR Mission visited Comilla, Sylhet, Rangpur, and Rajshahi
zones to examine subprojects that had been completed under this component.55
The benefits in this component are similar to those in part A. Rehabilitation of
flood-damaged roads (including national, regional, and zila roads), bridges, and
culverts helped restore traffic to its pre-flood level and allowed passenger
movement and transportation of agricultural produce. Dislocation of the road
Road and bridge subprojects on the following contracts were visited: 200504/FDR/BBAR, 200528/FDR/BBAR,
200503/FDR/GAI,
200501/FDR/MOUL,
200501/FDR/BOG,
200501/FDR/BOG,
200505/FDR/KURI,
200505/FDR/KURI, 200505/FDR/KURI, and 200505/FDR/SIRA.
55
The contracts visited by the PCR Mission were: (i) EFDRP/CZ/BB/Z-01 on the Sultanpur–Chinair–Akhaura road
(0.0 km to 8.3 km), Darkhar–Akhaura–Senarbadi road (0.0 km to 16.0 km) and Baria–Lalpur Road (0.0 km to
15.0 km); EFDRP/CZ/SYL/Z-02 on the Sari–Goainghat road (0.0 km to 16.0 km); EFDRP/RGZ/KR/N-01 on the
Rangpur–Barobari–Kurigram road (0.0 km to 11.0 km) and Saidpur–Nilphamari road (0.0 km to 16.0 km);
EFDRP/RZ/NT/N-01 on the Bogra–Natore road (0.0 km to 63.0 km); and EFDRP/RZ/SR/R-01 on the Sirajganj link
road (0.0 km to 10.0 km).
41
Appendix 10
network had caused immense economic loss to rural communities they served.
The road subprojects, particularly the zilla roads, restored market accessibility to
the local farmers. Transportation of perishable agricultural produce like
vegetables was made easier for villagers using nonmotorized transport, for
example, cycle-rickshaws. Improvement in the overall condition of the road
surface from their flood-damaged condition has led to savings in vehicle
operating costs for motorized traffic and also reduced the travel time between
villages and important market centers covered by these roads. The
reconstruction or repair of bridges and culverts, which were either damaged or
washed away by the floods, saved the local villagers from long detours, thus
allowing them to benefit from reduced travel time and from lowered transport
costs. The civil works contractors also employed local village labor, both men
and women, on several subprojects, thus generating employment and additional
income.
56
(iii)
Part C: Railways. Flood damage restoration works for railways included civil
works to restore embankments, tracks (including steel sleepers), ballast works,
bridges, and capacity restoration by provision of emergency stocks of equipment
and materials for handling future emergencies. Train services in the
flood-affected areas were disrupted by the sudden onrush of floodwaters, which
washed away the ballast and sleepers from the railway tracks, and heavily
damaged the embankments. The successful completion of civil works in the
affected sections ensured smooth and early operation of train services disrupted
by the floods. The track repairs have resulted in an increase in running speeds
compared with pre-flood levels. The embankment repairs are helping prevent
further flood damage. This was seen during the floods of 2007 from July to
mid-August, when the protection works on embankments under the Project
helped protect the restored assets. The PCR Mission visited rail subprojects in
both the East Zone and the West Zone of the rail network and the findings
confirmed the good quality of the construction works completed..
(iv)
Part D: Water resources. Under this component of the Project the PCR Mission
visited subprojects in Sylhet, Moulavibazar, Gaibandha, Rangpur, and Kurigram
districts.56 The rehabilitation works for the subprojects related to flood control
embankments, sluice gates, water control structures, and drainage canals
enabled a return to normal (i.e. pre-flood-level) economic activity in those areas
that were affected by the floods. The work undertaken has also served to prevent
further disasters from floods and thus assisted in preserving the installed facilities
under other components, i.e., roads, railways, etc. This was demonstrated during
the floods that took place between July and mid-August 2007. The flood
embankment works undertaken by the Project in the subprojects visited by the
PCR Mission were not damaged by the 2007 floods.
(v)
Part E: Municipal infrastructure. The PCR Mission visited several subprojects
under this component.57 Rehabilitation of municipal roads (resealing and repair of
Contracts visited were: SYL-09 in Sylhet; MVI-13, MVI-14, and MVI-15 in Moulavibazar; GAI-04 in Gaibandha;
RAN-06 in Rangpur; and KUR-08 in Kurigram district.
57
Subprojects visited were: (i) Moulvibazar, contract PR-31 (A) for the rehabilitation of Syed Mustafa Ali road and
contract PR-32 (A) for the rehabilitation of K. B. Alauddin road; (ii) Gaibandha, contract PR-32 for the rehabilitation
of Station road to Katchari; (iii) Rangpur, contract PR-1 for the rehabilitation of Station road starting from Shapla
Chattar up to Chorpair Mazar, contract MD-4 for the construction of a drain at Islambag Khalifatatari from
Shanticdhara Mosque to the Canal, and contract PR-69 for the rehabilitation of the Bus Terminal road starting from
Appendix 10
42
potholes, eroding sub-base, edges, and shoulders), bridges, and drains/culverts
in 55 project58 pourashavas resulted in improved drainage and living
environments for town residents, who benefited from the removal of unsanitary
conditions arising from blocked drains, and damaged roads. The PCR Mission
observed in some areas that the drains were blocked by debris that had been
thrown into them by local residents. The drains in some areas are covered and
are thus protected from such debris. The PCR Mission was informed by the EA
preventing local residents from throwing their waste into the drains was a
constant problem. The PCR Mission said that a publicity campaign and
discussions with local residents might enable the latter to understand that they
need to protect the environment in which they live, as these rehabilitated assets
are improving their way of life.
RK road (near the Central Bus Terminal) to Station road at Shapla Chattar; and (iv) Bogra for the rehabilitation of
Shahid Abdul Jabber road.
58
Flood damage affected about 159 pourashavas throughout Bangladesh.
43
Appendix 11
ECONOMIC REEVALUATION
A.
General
1.
Economic evaluation was not carried out at appraisal as the Project was of an
emergency nature. However, to assess the effectiveness/efficiency of any investment, it is
desirable to conduct economic evaluation and estimate the economic internal rate of return
(EIRR). As road projects are the easiest to measure in terms of their economic benefits, a
post-construction evaluation was undertaken for a representative sample of project road
sections. Two roads were selected, namely, a regional road and a zila road. The selection of the
roads was based on the availability of sufficient relevant data, e.g., traffic, road characteristics.
The selected project roads were as follows: (i) the regional road section Tongi–Kaliganj–
Gorashal–Pachdona (R301), and (ii) the zila road section Gaibandha–Sadullahpur (Z5553).
2.
The methodology used in the economic evaluation involved a comparison of “with” and
“without” Project situations to determine the effects of rehabilitating the project roads and to
estimate the benefits and calculate the EIRR. The main economic benefit of the road repair and
restoration work is a reduction in vehicle operating costs (VOCs). The economic evaluation
considered the economic costs and benefits over the construction period plus 5 years of
operation.59 All costs and benefits were expressed in 2007 constant prices. The methodology for
calculating the EIRR used the Highway Development and Management Model (HDM-4).60 In the
absence of any baseline data or any earlier economic evaluation, it was necessary to make
reasonable assumptions for carrying out the analysis. These are discussed below.
B.
Economic Costs
1.
Construction Costs
3.
The economic construction costs were derived from the financial costs of civil works,
physical contingencies, and construction supervision, excluding price escalation, price
contingencies, and interest during construction. All financial costs were converted to economic
costs by deducting taxes and duties and by differentiating local currency costs into indirect
foreign exchange and local currency costs. A standard conversion factor (SCF) of 0.8061 was
applied to the local currency costs of those items that were non-tradable.
2.
Maintenance Costs
4.
Maintenance costs, in 2007 prices, were obtained by the Project Completion Review
(PCR) Mission from the Roads and Highways Department (RHD). In the “with Project” case only
annual regular routine maintenance costs were considered. This is because periodic
maintenance (i.e., overlay) would be required after 5 years of operation and the economic
evaluations only considered the useful life of the rehabilitated road sections (about 5 years).
Routine maintenance costs were calculated per kilometer (km) per year. The cost of annual
routine maintenance, according to RHD, is about Tk63,600 per km per year.
59
The economic life of the roads is assumed to be 5 years of operation as most of the flood-damage restoration
works comprised repairs and a seal coat. After this time further periodic maintenance or overlay would be required.
60
The model, developed by the World Bank, has been adopted as best practice worldwide.
61
The SCF of 0.80 is consistent with that of other recent projects in Bangladesh.
Appendix 11
C.
44
Economic Benefits
1.
General
5.
The estimated economic benefits were based on a comparison of the with-Project and
without-Project cases. Without the Project, the roads would generally have been in extremely
poor condition after the 2004 floods, and would accommodate only low vehicle speeds, and
therefore would have caused high VOCs. With the Project, the roads would be in good
condition. With the improved surface condition, higher vehicle speeds would then be possible,
and these would, in turn, reduce VOCs.
2.
Traffic Forecasts
6.
The PCR Mission obtained traffic count data for the selected project roads from RHD.
The data obtained were for traffic along the selected roads before the 2004 flood and traffic data
along the roads after the roads were completely restored. The traffic data were annual average
daily traffic (AADT), taking into account daily and monthly variation factors, for nine different
vehicle categories, namely, car/utility, light truck, medium truck, heavy truck, micro bus, medium
bus, large bus, auto rickshaws, and motorcycles. The total traffic volumes along the selected
roads for 2004 and 2007 are shown in Table A11.1. Traffic composition by vehicle type is shown
for traffic in 2007 in Table A11.2.
Table A11.1: Traffic Volume Comparison, 2004 and 2007
(total motorized traffic AADT)
Road Section
2004
R301: Tongi–Kaliganj–Gorashal–Pachdona Road
Z5553: Gaibandha–Sadullahpur Road
Annual Average Growth
Rate
(% per year)
2007
4,079
555
7,468
733
22.3
9.7
AADT = annual average daily traffic.
Source: Roads and Highways Department.
Table A11.2: Traffic by Vehicle Type, 2007
(AADT)
Road
Regional
(R301)
Zilla
(Z5553)
Car/
Utility
Light
Truck
Medium
Truck
Heavy
Truck
Micro
Bus
Medium
Bus
Large
Bus
Auto
Rickshaw
1,401
588
1,039
56
1,433
688
185
1,602
476
7,468
17
29
80
0
13
12
8
169
405
733
M/C
Total
AADT = annual average daily traffic, M/C = motorcycles.
Source: Roads and Highways Department.
7.
Actual annual traffic growth from 2004 to 2007 on the selected project roads varied by
road section and by vehicle type and ranged on average from 9.7% to 25.6% per year. This
growth may be attributed to the release of suppressed demand with the completion of
large-scale road improvement works, complemented by a shift away from rail transport on
account of the poor quality of service. Obviously such high growth is not sustainable in the long
term. Besides, as much of the suppressed demand is likely to have been already catered to by
45
Appendix 11
the investments in the road sector, future traffic growth may not be as high as in the past. Thus
projections are based on more realistic traffic growth rates. The number of registered motor
vehicles in the country has grown at 7.5% over the last decade. The long-term traffic growth rate
by RHD is 7.8% per year. For the economic evaluation the rate of 7.5% per year has been used
for traffic growth during the 5-year benefit period from 2007 to 2011. This traffic growth rate is
conservative and is in line with other recent road economic evaluations that have been
undertaken in Bangladesh.
3.
Vehicle Operating Cost Savings
8.
The economic VOCs were updated by the PCR Mission on the basis of data obtained
from RHD. The data were used in the HDM-4 model to calculate the VOCs. The costs were
updated to 2007 economic prices by excluding taxes and duties and were calculated for the
nine representative vehicle types (see para. 6). The rate of road deterioration used in the
economic analysis is based on the levels of surface roughness that existed after the 2004 flood
before the Project was implemented, i.e., the without-Project case, compared with the
roughness values in the with-Project case, and the VOC savings due to the road improvement
were calculated. The road roughness level, as measured by the International Roughness Index
(IRI),62 after the improvement of the project road was set to IRI 4.0 m/km at the year of opening.
This IRI value was verified by the PCR Mission in visits to the selected project roads.
9.
Typical VOCs for various vehicle types, based on opening-year surface roughness levels
in accordance with the IRI, are shown in Table A11.3 along with the VOCs for the average
surface roughness of the without-Project case, which averages between IRI 6.0 m/km and IRI
10.0 m/km depending on the road. The rate of road deterioration used in the economic analysis
is based on the levels of surface roughness that existed before the Project was implemented,
i.e., the without-Project case, compared with the roughness values in the with-Project case, and
the VOC savings due to the road improvement were calculated.
Table A11.3: Typical Vehicle Operating Cost,
with and without Road Improvements
(Tk per km)
Vehicle Type
With
(IRI = 4)
Without
(IRI = 6)
Without
(IRI = 10)
Car
Micro Bus
Medium Bus
Large Bus
Small Truck
Medium Truck
Auto Rickshaw
Motorcycle
5.09
12.39
14.71
24.94
14.91
21.62
3.40
2.32
5.70
13.45
14.98
26.62
15.20
21.76
3.48
2.46
5.97
14.04
15.72
27.81
16.05
22.78
3.51
2.51
IRI = International Roughness Index, in meters per kilometer.
Source: Asian Development Bank estimates.
D.
Results of Economic Evaluation
10.
The EIRR for the project roads was calculated on the basis of the stream of estimated
costs and benefits over the construction period, plus 5 years of economic life. The results are
62
The IRI is measured in meters per kilometer.
Appendix 11
46
shown in Table A11.4. The EIRR was 39.9% for the regional road, and 23.9% for the zila road.
These EIRRs compare favorably with the opportunity cost of capital of 12% for the acceptance
of economic feasibility and therefore indicate that the economic performance of the selected
project roads is highly satisfactory; so it may be concluded that the investment was efficient.
Table 11.4: Economic Evaluation of Selected Project Roads
(Tk million)
Year
Capital
Cost
Incremental
Maintenance
Cost
Total
Cost
R301: Tongi–Kaliganj–Gorashal–Pachdona
2006
67.45
67.45
0.58
0.58
2007
0.58
0.58
2008
0.58
0.58
2009
0.58
0.58
2010
0.58
0.58
2011
Z5553: Gaibandha–Sadullahpur
2006
7.58
7.58
0.60
2007
0.60
2008
0.60
2009
0.60
2010
0.60
2011
7.58
0.60
0.60
0.60
0.60
0.60
VOC
Savings
Net
Benefit
15.61
17.90
34.57
73.75
88.75
−67.45
15.03
17.32
33.99
73.17
88.17
EIRR
39.9%
2.17
2.64
3.58
4.76
5.41
−7.58
1.57
2.04
2.98
4.16
4.81
EIRR
23.9%
EIRR = economic internal rate of return, VOC = vehicle operating cost.
Source: Asian Development Bank estimates.