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ASIAN DEVELOPMENT BANK PCR: BAN 32501

PROJECT COMPLETION REPORT

ON THE

FLOOD DAMAGE REHABILITATION PROJECT (Loan 1666-BAN [SF])

IN

BANGLADESH

JUNE 2003

CURRENCY EQUIVALENTS

(as of June 2003)

Currency Unit – taka (Tk)

At Appraisal At Project Completion (October 1998) (January 2002)

Tk1.00 = $0.0206 $0.0175 $1.00 = Tk48.50 Tk56.95

ABBREVIATIONS ADB - Asian Development Bank BR - Bangladesh Railway BRM - Bangladesh Resident Mission BWDB - Bangladesh Water Development Board DCC - Dhaka City Corporation DPHE - Department of Public Health Engineering DSHE - Directorate of Secondary and Higher Education DWASA - Dhaka Water Supply and Sewerage Authority EA - Executing Agency EIRR - Economic Internal Rate of Return FDRP - Flood Damage Rehabilitation Project GDP - Gross Domestic Product IMF - International Monetary Fund LGED - Local Government Engineering Department PPAR - Project Performance Audit Report PCR - Project Completion Report PIU - Project Implementation Unit PSC - Project Steering Committee RHD - Roads and Highways Department SDR - Special Drawing Rights TA - Technical Assistance

NOTES

(i) The fiscal year in Bangladesh ends on 30 June. (ii) In this report, “$” refers to US dollars.

CONTENTS

Page

BASIC DATA ii MAP Extent of Damage and Impact of 1998 Flood in Bangladesh vi I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2

A. Relevance of Design and Formulation 2 B. Project Outputs 4 C. Project Costs 5 D. Disbursements 6 E. Project Schedule 6 F. Implementation Arrangements 7 G. Conditions and Covenants 7 H. Related Technical Assistance 8 I. Consultant Recruitment and Procurement 8 J. Performance of Consultants, Contractors, and Suppliers 9 K. Performance of the Borrower and the Executing Agencies 9 L. Performance of Asian Development Bank 10

III. EVALUATION OF PERFORMANCE 11

A. Relevance 11 B. Efficacy in Achievement of Purpose 11 C. Efficiency in Achievement of Outputs and Purpose 12 D. Preliminary Assessment of Sustainability 12 E. Environmental, Sociocultural, and Other Impacts 13

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13

A. Overall Assessment 13 B. Lessons Learned 14 C. Recommendations 14

APPENDIXES

1. Maps showing Locations and Project Area for Each Component 16 2. Project Costings 22 3. Annual Disbursements 24 4a. Overall Project Implementation Schedule 25 4b. Implementation Schedules by Component 26 5. Status of Compliance with Major Loan Covenants 28 6. Details of Consulting Services 30 7. Assessment of Project Impacts and Benefits 31 8. Economic Evaluation of Road Component 34

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BASIC DATA A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower

5. Executing Agencies - Part A (Roads and Bridges) - Part B (Flood Control & Irrigation) - Part C (Rural Infrastructure) - Part D (Railways) - Part E (Urban Infrastructure)

6. Amount of Loan 7. Project Completion Report Number

Bangladesh 1666-BAN (SF) Flood Damage Rehabilitation Project Government of Bangladesh Roads and Highways Department (RHD) Bangladesh Water Development Board (BWDB) Local Government Engineering Department (LGED) Bangladesh Railway (BR) (i) LGED, Ministry of Communication (ii) BWDB, Ministry of Water Resources, Flood Control and Irrigation (iii) Dhaka Water Supply and Sewerage Authority (DWASA), Ministry of Local Government, Rural Development and Cooperatives (iv) Dhaka City Corporation (DCC), Ministry of Local Government, Rural Development and Cooperatives (v) Department of Public Health Engineering (DPHE), Ministry of Local Government, Rural Development and Cooperatives SDR74,898 million ($104 million equivalent) PCR: BAN 744

B. Loan Data

1. Appraisal – Date Started – Date Completed 2. Loan Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness – In Loan Agreement – Actual – Number of Extensions 6. Closing Date – In Loan Agreement – Actual – Number of Extensions 7. Terms of Loan – Interest Rate – Maturity (number of years) – Grace Period (number of years)

5 Oct 1998 17 Oct 1998 18 Nov 1998 20 Nov 1998 18 Dec 1998 22 Dec 1998 22 Mar 1999 1 Feb 1999 Nil 30 Jun 2001 29 Jan 2002 Nil 1% per annum 40 10

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8. Terms of Relending (if any) – Interest Rate – Maturity (number of years) – Grace Period (number of years) – Second-Step Borrower

12.5% 20 5 DCC and DWASA

9. Disbursements a. Dates Initial Disbursement

23 February 1999

Final Disbursement

29 January 2002

Time Interval

2 years, 11 months

Effective Date

1 February 1999

Original Closing Date

30 June 2001

Time Interval

2 years, 5 months

b. Amount ($ million)

Category or Subloan

Original

Allocation

Last Revised

Allocation

Amount Canceled

Net Amount Available

Amount

Disbursed

Undisbursed

Balance 01A Part A (RHD): Civil Works 35,599,776 32,964,894 1,152,849 32,964,894 31,812,045 1,152,849 01B Part A (RHD): Consulting Services 4,400,331 5,309,247 713,114 5,309,247 4,596,133 713,114 02 Part B (BWDB): Civil Works 12,999,653 12,704,458 424,780 12,704,458 12,279,678 424,780 03 Part C (LGED): Civil Works 20,300,676 21,105,849 (31,874) 21,105,849 21,137,723 (31,874) 04A Part D (BR): Civil Works 13,001,041 6,111,745 450,301 6,111,745 5,661,444 450,301 04B Part D (BR): Equipment and Materials 1,299,688 7,615,983 1,212,045 7,615,983 6,403,938 1,212,045 04C Part D (BR): Consulting Services 699,832 795,373 (89,209) 795,373 884,582 (89,209) 05 Part E I (LGED): Civil Works 5,273,593 5,024,519 237,677 5,024,519 4,786,842 237,677 06 Part E II (BWDB): Civil Works 2,000,908 1,593,704 76,981 1,593,704 1,516,723 76,981 07 Part E III (DWASA): Civil Works 307,982 0 0 0 0 0 08 Part E IV (DCC): Civil Works 117,055 0 0 0 0 0 09A Part F (DSHE): Civil Works 6,359,582 4,659,541 (67,238) 4,659,541 4,726,779 (67,238) 09B Part F (DSHE): Furniture 620,684 479,241 (3,959) 479,241 483,200 (3,959) 09C Part F (DSHE): Consulting Services 19,440 191,324 17,659 191,324 173,665 17,659 10 Service Charges During Construction 999,760 956,621 15,574 956,621 941,047 15,574 Total 104,000,000 99,512,499 4,108,700 99,512,499 95,403,799 4,108,700 10. Local Costs (Financed) - Amount ($) $40,842,637 - Percent of Local Costs 64.17 - Percent of Total Cost 34.55

C. Project Data

1. Project Cost ($ million)

Cost Appraisal Estimate Actual

Foreign Exchange Cost 57.48 54.56 Local Currency Cost 72.27 63.65 Total 129.75 118.21

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2. Financing Plan ($ million)

Cost Appraisal Estimate Actual Foreign Local Total Foreign Local Total

Implementation Costs Borrower-Financed 0 25.75 25.75 0 22.81 22.81 ADB-Financed 57.48 46.52 104.00 54.56 40.84 95.40

Total 57.48 72.27 129.75 54.56 63.65 118.21

ADB = Asian Development Bank. 3. Cost Breakdown by Project Component ($ million)

Component Appraisal Estimate Actual

A. Civil Works 1. Roads and Bridges 45.24 40.78 2. Rural Infrastructure 25.40 26.42 3. Railways 17.50 7.26 4. Water Resources 16.05 15.35 5. Education 8.55 6.58 6. Urban Developmenta 8.42 7.88

Subtotal (A) 121.16 104.27

B. Equipment and Materials 1. Railways 1.70 6.40

Subtotal (B) 1.70 6.40

Subtotal (A + B) 122.86 110.67 C. Consulting Services

1. Roads and Bridges 4.37 4.60 2. Railways 0.70 0.89 3. Education 0.20 0.17 4. Urban Developmentb 0.42 0.00 Subtotal (C) 5.69 5.66

D. Land Acquisition and Resettlement/ Taxes and Duties

0.20 0.94

Subtotal (D) 0.20 0.94 Subtotal (A + B + C + D) 128.75 117.27 E. Services Charge 1.00 0.94

Total (A – E) 129.75 118.21 a Urban development comprises water supply/sanitation, urban infrastructure, and flood protection. b Consulting services for the urban development component were accommodated from savings under loans 1059-BAN, 1124-BAN, 1125-BAN, 1159-BAN, 1202-BAN, 1215-BAN, 1264-BAN, 1376-BAN, and 1381-BAN. 4. Project Schedule

Item Appraisal Estimate Actual

Date of Contract with Consultants (i) Roads and Bridges: Date of Contract Nov 1998 8 Mar 1999 Completion of Work Jun 2000 30 Sep 2001 (ii) Railways: Date of Contract Nov 1998 15 Nov 1998 Completion of Work Jun 2000 31 Oct 2000 (iii) Education:

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Date of Contract Nov 1998 14 Dec 1998 Completion of Work Jun 2000 30 Jun 2000 Completion of Engineering Designs 1 Oct 1998-31 May

1999 30 Jun 1999

Civil Works Contract Date of Award Nov 1998 to

Aug 1999 8 Mar 1999

10 Nov 1999 Completion of Work 30 Jun 2000 30 Jun 2001 Equipment and Supplies First Procurement 30 Jun 1999 23 Jul 1999 Last Procurement 31 Dec 2000 29 Nov 2001 5. Project Performance Report Ratings

Ratings Implementation Period

Development Objectives

Implementation Progress

From Feb 1999 to Jun 1999 Highly satisfactory Highly satisfactory From Jul 1999 to Dec 1999 Highly satisfactory Highly satisfactory From Jan 2000 to Jun 2000 Highly satisfactory Highly satisfactory From Jul 2000 to Dec 2000 Highly satisfactory Highly satisfactory D. Data on Asian Development Bank Missions

Name of Mission

Date

No. of Persons

No. of Person-Days

Specialization of Membersa

Consultation Mission 7 Dec–11 Dec 98 1 5 b Appraisal Mission 5–17 Oct 98 15 195 a, c, d, e, g, h Review Mission 22 Jun–22 Jul 99 9 27 a, c, g Review Mission 16 Jan–13 Feb 00 5 15 a, g, h Review Mission 14–22 May 01 2 8 a, g Project Completion Revi ewb 24 Nov–28 Dec 02 4 32 a, d, g, h

a a-engineer, b-financial analyst, c-counsel, d-economist, e-procurement or consultant specialist, f-control officer, g-programs officer, h-other categories. b Ahmed Faruque, Project Implementation Officer, Bangladesh Resident Mission; Gholam Mostofa, Staff Consultant; Mitali Chaudhury, Staff Consultant; Md. Liaquat Ali Khan, Project Analyst, Bangladesh Resident Mission.

I. PROJECT DESCRIPTION

1. The Flood Damage Rehabilitation Project was formulated in response to the Government’s request to the As ian Development Bank (ADB) for rehabilitation assistance following floods of unprecedented nature, extent, and intensity, which inundated 68% of the land in Bangladesh for an 11-week period from 20 July to 30 September 1998. The main objective of the Project1 was to assist the Government in rehabilitation of key infrastructure damaged by the 1998 floods in the project area, thereby enabling restoration of normal levels of economic and social activity. The Project provided for rehabilitation of facilities in six key sectors to preflood level. Within each sector, priority was established as follows: (i) to repair damage to ongoing ADB-assisted projects; (ii) to repair damage to completed ADB-funded projects; and (iii) to repair damage to non-ADB-funded projects in the relevant sectors. The Project comprised six parts:

(i) Part A—Roads and Bridges. Rehabilitation of flood-damaged national, regional, feeder (Type A) roads, and bridges and culverts essentially to their preflood condition, within three of the country’s seven road zones: Dhaka, Comilla, and Chittagong (except for the Chittagong Hill Tracts Circle).

(ii) Part B—Flood Control and Irrigation. Rehabilitation of flood control and irrigation facilities in seven subprojects, including repair of embankment breaches, and repair or replacement of water-control structures and canals. The subprojects were located in Bhola, Comilla, Chandpur, Pabna, Panchagar, Netrakona, Kishoreganj, Gopalganj, Patuakhali, Kustia, Sirajganj, Nilphamari, and Narsingdi districts.

(iii) Part C—Rural Infrastructure. Rehabilitation of rural infrastructure, including rural roads, bridges/culverts, and growth center markets in the 23 districts covered by the ADB-financed Second Rural Infrastructure Development Project (RIDP-II)2 and the Third Rural Infrastructure Development Project (RIDP-III).3

(iv) Part D—Railways. The component includes (a) civil works to restore embankment, track, bridges, essential buildings, station and colony roads, and signaling and telecommunications facilities; and (b) restoration of capacity for handling future emergencies by provision of emergency stocks of equipment and materials.

(v) Part E—Urban Development. This includes (a) rehabilitation of flood-damaged drains, culverts, and other infrastructure damaged in 41 ADB-assisted municipalities (pourashavas) and 62 other municipalities; (b) restoration of flood protection facilities in Dhaka city and six other towns (Khulna, Dinajpur, Panchagar, Moulvibazar, Hobigonj, and Kurigram); (c) restoration of drainage facilities in Dhaka; (d) restoration of slum facilities in Dhaka; and (e) rehabilitation of water supply in 26 towns.

1 ADB. 1998. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to

Bangladesh for the Flood Dam age Rehabilitation Project and on a Proposal to Use Loan Savings. Manila. 2 Loan 1215-BAN(SF), for $83.4 million, approved on 21 December 1992. 3 Loan 1581-BAN(SF), for $70 million, approved on 20 November 1997.

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(vi) Part F—Secondary and Higher Secondary Education: Rehabilitation of 1,500 government and government-recognized secondary and higher secondary schools damaged by flood, especially the damaged facilities under two ongoing ADB loans.4

2. The total Project cost was estimated at $130 million, comprising $104 million financed by ADB and $26 million equivalent of the Government’s counterpart funds. Of this, $57 million was the foreign currency cost and $73 million the local currency cost. In addition, considering the severity of flood and high cost of rehabilitation, and commensurate with ADB’s current policy on rehabilitation assistance for disasters,5 an amount of about $33 million was identified as savings from nine ongoing loans and were allocated for use under the umbrella of this Project following a request from the Government. Such allocation was matched by additional government counterpart funds of $8.2 million equivalent. Thus the total funds available for the Project amounted to $171 million, comprising $104 million from the loan, about $33 million from the savings of nine ongoing loans, and $34 million equivalent from the Government as counterpart funds. The Project was appraised in October 1998, and the loan was approved by ADB in December 1998. The loan closed on the original closing date of 30 June 2001. 3. The executing agencies (EAs) for the Project components were Roads and Highways Department (RHD) for Part A; Bangladesh Water Development Board (BWDB) for Part B; Local Government Engineering Department (LGED) for Part C; Bangladesh Railway (BR) for Part D; LGED, BWDB, Dhaka Water Supply and Sewerage Authority (DWASA), Dhaka City Corporation (DCC), and Department of Public Health Engineering (DPHE)6 for Part E; and Directorate of Secondary and Higher Education (DSHE) for Part F. 4. The Project followed a sector approach, with subprojects selected during Project implementation. The Project was coordinated by a project steering committee (PSC) chaired by Member, Infrastructure Division, Planning Commission of the Government.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

5. The Project was designed while ADB’s 1993 country operational strategy was in force, the overarching goal of which was reduction of poverty through (i) faster economic growth, (ii) providing direct assistance to the poor to improve their living conditions, and (iii) improving and protecting the environment. As envisaged at appraisal, the Project was principally limited to restoring damaged facilities to their preflood levels to ensure restoration of income and economic development. The infrastructure completed under the Project facilitated resumption of economic activity by relinking the farmland with the market places at upazilla (subdistrict) and district levels, reducing the travel time for movement of freight and passenger traffic on roads and railways, and thereby reducing transport cost in financial and economic terms. The Project also helped to reestablish the cross-country intermodal transport network removing bottlenecks for country-wide distribution of food, fuel, and other essentials. In addition, the civil works undertaken for the rehabilitation works created employment opportunities for local skilled and unskilled labor, which generated income at the rural level. This increased the purchasing

4 Loan 1268-BAN(SF): Secondary Education Development Project, for $72 million, approved in November 1993 and

Loan 1123-BAN(SF): Higher Secondary Education Project, for $49.2 million, approved in November 1991. 5 Operations Manual, Section 25: Rehabilitation Assistance After Disasters, and Operations Manual, Section 14: Use

of Surplus Loan Funds. 6 Funds allocated from savings of Loan 1264-BAN(SF), for $31.0 million, approved in November 1993.

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capacity of the people in the Project area and led to increased expenditure and consumption resulting in higher productivity and increased gross domestic product. The Project was designed and formulated to contribute to reducing the poverty of affected people in the Project area and so promote the economic development of the country as a whole. The Project was therefore fully in line with ADB’s country strategy and overall goal. 6. Out of the six ADB loans providing emergency assistance to Bangladesh so far, two have been postevaluated.7 The lessons learned from these project performance audit reports (PPARs) and ADB-wide experience with rehabilitation assistance8 are: (i) emergency assistance should be provided very quickly; (ii) the projects should aim at restoring damaged facilities to preflood level only; (iii) the implementation period should be short; (iv) there should be greater involvement of the consultants to support the EAs; and (v) matching response to disaster both from the ADB and the Government should be ensured. The Project aimed at providing assistance very quickly. Immediately after the disaster in September 1998, ADB appraised the Project (in October 1998) and approved it in December 1998. Also, advance procurement action, including sole sourcing of consultants, and retroactive financing were approved for eligible expenditures after the date of appraisal. These provisions significantly reduced the time required for making the assistance available to the affected people. The Project provided for restoration of the flood-damaged infrastructure to preflood level with subprojects selected by applying strict preset criteria and avoided deferred maintenance. The Project also involved strong consulting support. About 130 person-months of international and 974 person-months of domestic consultants were used for the Project. The design of the Project took into account the lessons learned from similar emergency assistance projects in Bangladesh funded by ADB in the past. 7. The components of the Project were designed and implemented in keeping with the Government’s policy for the relevant sectors. The design of Part A: Roads and Bridges was consistent with the recommendations of the Road Master Plan (RMP),9 which envisaged sustaining the improved riding quality on the roads and reducing vehicle operating costs (VOCs). Part B: Flood Control and Irrigation was designed and implemented with relevance to the Government’s National Water Policy,10 which aimed at “taking appropriate measures to provide desired levels of protection for life, property, vital infrastructure, agriculture and wetlands”. The design of this component is also consistent with the Government’s Flood Action Plan (FAP), which was formulated after the floods of 1987 and 1988. The FAP helped to determine the most appropriate action for coping with floods, including selection of subprojects. Similarly, the design of Part C: Rural Infrastructure was in line with the Government’s fifth five-year plan which, among others, aimed at improving basic physical infrastructure in rural areas for economic development. The design for Part D: Railways was in line with the Government’s policy to foster the railway subsector as the pro-poor mode of transport, providing for cheap transportation of long-haul freight in an environment-friendly manner. Part E: Urban Development and Part F: Secondary and Higher Secondary Education were designed in conformity with the objectives of the Government’s fifth five-year plan to improve urban infrastructure, including sanitation, and to ensure optimum use of primary and secondary education facilities at all levels.

7 PPAR: Loan 882-BAN(SF): Flood Rehabilitation, approved in August 1995; and Loan 892-BAN(SF): Flood

Damage Restoration, approved in October 1996. 8 Benson, Charlotte and Arriens, W.T. (draft paper). October 1998. Rehabilitation Assistance After Disasters: A

Preliminary Review of Lessons Learned and Emerging Issues. Focal Point, Operations Evaluation Department. 9 ADB. 1988. Technical Assistance to Bangladesh for Preparation of a Road Master Plan; and ADB. 1994. Technical

Assistance to Bangladesh for Preparation of a Road Master Plan (Supplementary). Manila. 10 Ministry of Water Resources, Government of Bangladesh. 1999. National Water Policy.

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B. Project Outputs

8. Project outputs after completion substantially conformed with the project design at appraisal. Expected outputs at appraisal and actual outputs on completion of the Project are listed in the following table.

Table 1: Project Components -- Targets and Achievements

Project Component As Targeted at Appraisal

As Achieved on Completion

Remarks

Part A: Roads and Bridges

Rehabilitation of about 1,953 km of flood-damaged embankment, 1,979 km of damaged pavement on major national, regional, and feeder type A roads including 746 damaged bridges in Dhaka, Comilla, and Chittagong zones of the Roads and Highways De-partment under 275 initial sub-projects in four lots.

All major flood-damaged roads , including bridges , were rehabilitated. Lots 5 and 6 were added, comprising 43 additional subprojects. A total of 328 subprojects were com -pleted.

To utilize the savings gen-erated from change of de-sign, exchange rate fluctua-tion, and low bid prices quoted by contractors, the completion period was ex-tended to 31 Dec 2000 com -pared to the original target date of 30 Jun 2000.

Part B: Flood Control and Irrigation

Rehabilitation of flood-damaged embankment, canals, groynes, sluice gates and bridges/ cul-verts under Command Area De-velopment Project, Small-Scale Irrigation Sector Project, Ganges -Kobadak Rehabilitation Project, Sirajgonj Integrated Ru-ral Development Project, Teesta Barrage, Madaripur Beel Route Embankment, and North Rup-ganj Water Conservatory.

Targets were achieved fully by the scheduled com pletion date of 30 Jun 2000.

Some riverbank protection works were undertaken without an adequate hydro-logical study. As a result, some of these works were not sustainable due to in-adequate design.

Part C: Rural Infrastruc-ture

- Rehabilitation of about 1,200 km of rural roads, 4,100 m of bridges/culverts, and 40 growth center markets; - Rehabilitation of 338 km of embankment, 85 km of canal, and 30 water-control structures .

- 1,252 km of roads, 4,156 m of bridges/ culverts and 20 growth centers/markets were rehabilitated; - 294 km of embankment, 25 km of canal, and nine related structures were rehabilitated.

Appraisal quantity of works had to be changed on the basis of actual field situa-tion. All works were com -pleted on schedule.

Part D: Railways - Rehabilitation works included civil works to restore embank-ments, tracks, bridges, essential buildings, stations, colony, roads, signaling and telecommu-nications facilities; - Procurement of equipment and materials for future emergencies .

- Most of the civil works were completed by 30 Jun 2001 with 12 months’ delay; a few subprojects had to be can-celled due to delayed pro-curement procedure; - Procurement of materials was also delayed by 12 months. A few subprojects had to be cancelled.

The delay in civil works and procurement of materials/ equipment is attributed to Bangladesh Railway's un-wieldy and lengthy pro-curement procedures. Due to delay, allocation from loan could not be utilized in full.

Part E: Urban Develop-ment

- Rehabilitation of 928 km of roads in 103 municipalities, 64 km drains/culverts and repair to slum infrastructure for 11,900 families; - Restoration of Flood Protection Works of Dhaka City and six

- 1,026 km urban roads and 62 km of drain/ culvert were rehabilitated, and slum infra-structure repaired for 4,996 families. - Targets were achieved in full with 6 months’ delay

- Appraisal quantity of works had to be changed on the basis of actual field situa-tion. All works completed on schedule; - Revetment works at Kuri-gram failed due to poor

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Project Component As Targeted at Appraisal

As Achieved on Completion

Remarks

towns namely, Khulna, Dinajpur, Panchagar, Moulvibazar, Hobi-gonj, and Kurigram. - Restoration of Drainage Facili-ties that include rehabilitation of 5 km of reinforced concrete (RCC) box culverts, 17.5 km of open earth canals, construction of 80m of RCC retaining walls at Dholai khal pumping station, re-construction of 50 m of retaining wall at Narinda pumping station, cleaning and repair of 75 km of storm water drains , all in Dhaka city. - Restoration of slum infrastruc-ture that includes cleaning and repair of 59 km local storm drains, 65.4 km of minor drains, 70.8 km of damaged surface drains, restoration of 216 public sanitary latrines, replacement of 130 public tubewells and repair of 37 km of footpaths within slum areas , all in Dhaka city. - Rehabilitation of water supply and sanitation. Works include restoration of 10 production tubewells, repair of 60 km of dis -tribution pipelines and repair/ replacement of 600 public hand pump tubewells in 27 towns.

- Works were completed sub-stantially by the scheduled completion date of 30 Jun 2000. - Works were completed sub-stantially in Jun 2000 with 11 months delay. DCC did not utilize allocated amount from this loan. Only allocated sav-ings from Loan 1264 were utilized. - Works were completed in Jun 2000 with about 11 months’ delay.

workmanship and had to be redone. This needed ex-tended time schedule to complete the works ; - Dhaka Water Supply and Sewerage Authority did not utilize the allocated amount from this loan. All works were completed using sav-ings from Loan 1124. - Delay occurred due to de-lay in tendering and award-ing of contracts by DCC. This has delayed expected benefits although there might not have been any adverse effect on cost. - Delay occurred due to the delay in tendering and awarding of contracts by Department of Public Health Engineering. This has de-layed expected benefits, al-though there might not have been any adverse effect on cost.

Part F: Secondary and Higher Secondary Education

Rehabilitation of flood-affected secondary schools , including provision of furniture; rehabilita-tion of flood-affected higher sec-ondary schools, intermediate colleges , and training institutes , including provision of furniture, all located in 53 districts.

Rehabilitation of about 1,500 flood-damaged schools, col-leges , and training institutes was completed in Mar 2000 with about nine months’ delay. Saving of about $0.94 million was reallocated to Part C.

Some schools not affected by floods were included. In-adequate input of consult-ants led to poor supervision of works that might have affected the quality.

C. Project Costs

9. The total Project cost at appraisal was $170.6 million including service charges during construction, and savings from other loans. Out of this, $104 million11 was to be financed from this loan associated with $26 million counterpart funding. In addition, savings from nine ongoing ADB-assisted projects (about $33 million) and associated counterpart funds ($8.0 million equivalent) were also made available for use under the umbrella of the Project. The actual cost of the completed works under the loan was $118.2 million, of which $95.4 was financed by ADB and the balance $22.8 million by the Government. About $29.4 million was utilized from savings

11 Due to fluctuation of the exchange rate between SDR and $, the actual revised allocation at loan closing stood at

$99.5 million.

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of other ongoing loans, compared to the allocated amount of $33.0 million. Government counterpart funds provided here was $6.8 million equivalent. A summary of Project costs as appraised and actual is shown in Appendix 2. The appraisal estimate was based on the Government's preliminary damage assessment. That the actual cost was lower than the cost at appraisal was mainly because the optimization0 of work volume during implementation was based on actual requirements in the field, and because the contractors’ bid prices were significantly lower than the EAs’ estimates at appraisal. Except for BR, utilization of funds by all EAs was satisfactory. Overall, an amount of $4.1 million was savings from the loan, which was cancelled on closure of the loan accounts on 29 January 2002. D. Disbursements

10. Total disbursements under the loan amounted to $95,403,799, or 91.7% of the loan amount ($104 million). Of this, the foreign and local currency amounts disbursed were $54.6 million (57.2%) and $40.8 million (42.8%), respectively. Disbursements under the savings of other loans amounted to $28.8 million, or 87% of the total amount available for use (i.e., $33.0 million). Out of this, the foreign and local currency shares were $14.2 million (49%) and $14.6 million (51%), respectively. The proportions of foreign and local currency disbursements were slightly changed from the provision of the Loan Agreement, with an increase in foreign currency costs of about 2%, and a commensurate reduction in local currency costs. 11. The initial and final disbursements under the loan were made in February 1999 and January 2002, respectively. This was equivalent to a period of 2 years 11 months as compared to a disbursement period of 2 years 8 months envisaged under the Loan Agreement. Although the loan was duly closed on 30 June 2001, the original loan closing date, the loan account was kept open until 29 January 2002 due to delayed submission of payment applications to ADB by BR. In the initial period ending January 2000, disbursement was less than projected (47% compared to 59%) due mainly to delayed start-up of physical works in some Project components, and delays in releasing government counterpart funds (not available until month five of FY1999/2000). The establishment of imprest accounts under the loan was envisaged for each EA except RHD. ADB’s statement of expenditure procedures were also followed. The imprest accounts of the EAs were well maintained and the statement of expenditure procedures facilitated timely payment to consultants, contractors, and suppliers. The Loan Agreement also provided for retroactive financing. Disbursement under retroactive financing remained within the prescribed ceiling of 10% of the loan amount allocated to each part of the Project. E. Project Schedule

12. All works under Part A (Roads and Bridges), Part B (Flood Control and Irrigation), and Part C (Rural Infrastructure) were implemented on schedule. The savings from initially selected subprojects were utilized in some additional subprojects undertaken from the left-over works in Part A, for which rescheduling of the implementation plan was necessary to complete all works by 31 December 2000. However, despite taking advance action on procurement of civil works and consulting services, start-up of civil works was delayed during the initial months of the Project in Part D (Railways) and Part E (Urban Development). Activities in Part D were delayed by about a year due to BR’s unwieldy and lengthy procurement procedures. The restoration of flood protection works under Part E was delayed by about six months due to failure of completed revetment works at Kurigram, which necessitated substantial reconstruction. Restoration of slum infrastructure under Part E was also delayed, by about 11 months, due to protracted procedures in procurement of civil works. The rehabilitation of water supply and sanitation component under Part E was also delayed due to delays in procurement of civil works

7

contracts. Although the above delay did not have any adverse impact on the cost structure of the Project, timely action by the EAs could have minimized such delays, and the Project benefit could have been made available to the affected people much earlier. Implementation schedules as envisaged at appraisal, and actual, are shown in Appendix 4. F. Implementation Arrangements

13. Considering the emergency nature of the works, relatively short implementation period, scope of works covering six sectors in 13 areas of intervention, involvement of as many as eight EAs, and the use of proceeds from 10 different loans, the necessity of special measures for an appropriate institutional arrangement was foreseen during appraisal, for proper administration of the Project and its timely completion. These included establishment of a project implementation unit (PIU) in each EA and the creation of a Project Steering Committee (PSC) chaired by the member of the Physical Infrastructure Division of the Government’s Planning Commission. The PSC was made responsible for overall coordination and resolution of interagency issues as well as for monitoring overall project implementation. Coordination among the EAs, concerned government agencies, consultants, and contractors, and ADB was adequately maintained through regular meetings of the PSC on a quarterly basis and frequent coordination meetings with the project directors and consultants hosted by the Bangladesh Resident Mission (BRM). During these meetings, physical progress of each component was reviewed, problems discussed, and solutions agreed. These two separate forums have been quite effective in identifying problems and taking remedial actions in a timely manner. Despite the fact that delay occurred in some of the components and that the loan proceeds could not be utilized in full, considering the complex nature of the Project, the implementation arrangements were generally satisfactory and worked effectively, as envisaged at appraisal. 14. There were no major changes in Project scope during implementation and, therefore, no changes in the implementation arrangements were required. G. Conditions and Covenants

15. All conditions of loan effectiveness were met expeditiously and the loan was declared effective on 1 February 1999. The nine loan covenants are generally relevant except one [Section 4.05(a) in the Loan Agreement] that required arrangement of insurance of the Project facilities. This covenant was not practical and could not be fulfilled in a project like this with a multitude of small-sized subprojects, implemented by small upazilla-based contractors in a short span of time. All other major loan covenants were generally met. The status of compliance with major loan covenants is presented in Appendix 5. 16. Reporting requirements under the Project have substantially been met. However, as different EAs were involved in Project implementation, each EA submitted its own project completion report (PCR) separately. DPHE, DWASA, DCC, and DSHE did not submit a PCR, despite a formal request by ADB. The PCRs received from different EAs lack uniformity in formats, and data and information provided were inadequate in most cases. This was largely caused by the EAs’ lack of familiarity with ADB’s requirements relating to PCRs. 17. Audited project accounts were generally submitted by the EAs on time, except by BR. In March 2001, ADB suspended disbursement to BR for delayed submission of its audited project accounts, but resumed disbursement upon submission of the audit report in the same month. The audit reports made a number of observations on payments to contractors. Those were duly

8

resolved by the EAs, in some cases through bilateral discussions with the Foreign Aided Project Audit Directorate (FAPAD), facilitated by ADB. H. Related Technical Assistance

18. Due to the emergency nature of the Project, no technical assistance (TA), including project preparatory TA, was provided under it. I. Consultant Recruitment and Procurement

19. For reasons of expediency and efficiency as stipulated in the Loan Agreement, direct engagement of consultants was undertaken by extending the scope of the consultants’ ongoing contracts with the EAs under the related ADB-assisted projects. This allowed immediate deployment of the consultants. At appraisal, it was estimated that the Project would require a total of 130 person-months (p-m) of international and 974 p-m of domestic consulting services. In terms of actual contracts, eight contracts for consulting services were awarded, comprising 120.4 p-m of international and 1,109.5 p-m of domestic consulting services, at a total cost of $6.47 million. In addition, further inputs of 22 p-m of international and 158 p-m of domestic consultants at a cost of $820,000 were provided out of the proceeds of the original loans whose savings were used for flood rehabilitation under the umbrella of the Project (not charged to the Project). A summary of consulting services under the Project is given in Appendix 6. 20. Civil works were procured through local competitive bidding, generally following ADB’s Guidelines for Procurement. A total of 3,358 civil works contract packages were procured for the Project, comprising 341 contracts for Part A, 243 contracts for Part B, 505 contracts for Part C, 107 contracts for Part D, 2,004 contracts for Part E, and 158 contracts for Part F. Equipment and materials for Part D (Railways) were procured through international competitive bidding. Most of the EAs, excluding RHD and LGED, followed their own standard bidding documents, including the Government’s standard bid form (BD Form No. 2991), which dates back to the 1930s, and is grossly inadequate and outdated. As a result, complete transparency and equitability could not be ensured in the procurement of more than 3,000 civil works contracts. Although ADB initially objected to packaging of contracts in small sizes and in large numbers, it subsequently approved the contract packages proposed by the EAs, both because of the shortage of time for retendering and the lower than estimated bid prices received. Procurement of civil works contracts were, however, completed smoothly in general, except in Part D where significant delays were experienced both in procurement of civil works contracts and in purchase of equipment and materials. The delays were attributed mainly to BR’s poor scheduling, unwieldy procurement procedures, and difficult and time-consuming systems. As a result, six subprojects, including five for civil works and one for procurement of equipment and materials, were cancelled, and BR could not utilize the allocated funds in full. 21. In Part F (Secondary and Higher Secondary Education), a number of schools in Comilla, Chandpur, Feni, Chittagong, Cox’s Bazar, Magura, and Kustia districts, which were selected for rehabilitation, were in fact not damaged by 1998’s flooding and did not meet the subproject selection criteria. It was evident that in a large number of subprojects under this component, actual rehabilitation works carried out were mostly different from the scope of works prepared by the consultants. Funds were used mostly for deferred maintenance works including repair of old roofs, plastering of walls, and painting of doors and windows. While about 15 such subprojects (valued at about $57,000) were cancelled after a formal request from ADB to the Government in September 1999, works on 50 of these were allowed to continue, considering that substantial work had already been done.

9

J. Performance of Consultants, Contractors, and Suppliers

22. The performance of the consultants was satisfactory given the multitude of small contracts and wide dispersion of subproject sites. However, these characteristics are thought to have impinged on the performance of some consultants, particularly for Part F (Secondary and Higher Secondary Education) of the Project. A number of subprojects recommended by the consultants failed to meet the subproject selection criteria. ADB identified the anomaly and requested the Government for a critical review of the consultants’ performance in the selection and design of flood restoration works. In this regard, ADB’s review mission in January–February 2000 observed that there was a striking disparity between RHD (894 p-m) and DSHE (68 p-m) in the use of consulting services. While these figures reflected more intense use of consulting services in Part A (RHD), there is little doubt that the problems encountered in Part F were attributed to the inadequate consultant input made available for this purpose. 23. Most of the contractors in all the Project components performed satisfactorily and the quality of works completed under the Project compared favorably with the average standards of similar civil works in Bangladesh. However, due to the multitude and small size of contracts, only small local contractors were engaged, and some of them lacked adequate experience and financial strength to mobilize the required human resources and equipment in time. This undoubtedly had an adverse impact on some contracts, particularly in the RHD and BWDB components. In the restoration of flood protective works under BWDB in Kurigram, Dinajpur, Habiganj, and Panchagar, the quality of revetment and pavement works in several subprojects was very poor. However, the contractors were compelled to redo the works to the satisfaction of the EA and the consultant. 24. Supply of equipment and materials was involved only in Part D (Railways). The suppliers performed satisfactorily, although some supply contracts for wooden sleepers and ballast had to be cancelled due to BR’s delayed and outdated bid evaluation and award procedures. K. Performance of the Borrower and the Executing Agencies

25. Given its urgent nature, short implementation period, involvement of six sectors, eight EAs, and using proceeds from 10 different loans, it was an uphill task for the Government to fully achieve successful implementation of the Project. The Borrower has performed satisfactorily, notwithstanding the complexity of the Project. All major conditions and covenants of loan effectiveness were fulfilled in an expeditious manner and the loan became effective in the shortest possible time.12 The PSC was established quickly within the Planning Commission after loan appraisal. It handled and resolved all Project implementation issues in a timely manner. The PSC performed well and fulfilled most of its obligations in monitoring Project implementation by different EAs and arranging the Government’s counterpart funds on time. However, during the early stages of the Project, delay in releasing government counterpart funds caused commensurate delays in the progress of works. 26. Out of eight EAs, the performance of RHD (Part A) and LGED (Part C) are ranked highly satisfactory. RHD effectively utilized a major part of the loan and proceeds of savings from other loans. It undertook new subprojects for utilizing savings of the loan proceeds allocated to it resulting from low initial bid prices. This made it necessary to stretch RHD’s actual implementation period by an additional six months over the time planned at appraisal. LGED

12 The loan was declared effective on 1 February 1999, within about two months of the date of the Loan Agreement.

10

completed all subprojects within the original time frame. The quality of works completed by LGED was satisfactory. However, a number of bridges rehabilitated by LGED (for example, one in Sherpur visited by the Project Completion Review Mission) were found to be narrower (3.66m) than the width of road pavement (5.5m). This was impractical and the bridge design seemed to have ignored any long-term traffic projection, which was required considering the long average life span of the bridges (about 50 years). Due to the large number and wide dispersion of the subprojects, RHD was overdependent on the consultants for Project administration and quality control. Generally, routine quality control and monitoring procedures in most of the components could have been more systematic and effective had the project administration memorandum (PAM), which ADB provided to the EAs on 16 February 1999, been followed by them in implementing the Project. 27. The performance of BWDB (Part B), DPHE (component under Part E) and DSHE (Part F) are considered generally satisfactory, albeit with some implementation delays. DPHE’s progress suffered due to delays in bidding and award of civil works contracts and subsequent delays in the release of government counterpart funds. DSHE did not comply fully with the subproject selection criteria and included rehabilitation works for some schools not affected by flooding. ADB’s suggestion to the concerned EA to undertake a critical review of the consultants’ performance remained unheeded. Delays in award of contracts and resolving the above anomalies in subproject selection pushed back the completion schedule of the DSHE component by about nine months. DPHE and DSHE did not submit any completion report for their components. 28. The performance of the other EAs, namely BR (Part D), and DWASA and DCC (components under Part E) are rated partly satisfactory. Works under the BR component suffered due to poor planning and lengthy procurement procedures inherent with BR’s stale system. As a result, some procurement contracts had to be cancelled leading to underutilization of the funds allocated to this component. DWASA failed to enter into a subsidiary loan agreement with the Government for utilizing the allocation from this loan and, therefore, could only utilize $2.1 million allocated from savings of Loan 1124-BAN(SF). DCC also failed to utilize the funds allocated to them from the loan for similar reasons stated above, and could utilize only $1.33 million allocated out of the savings from Loan 1264-BAN(SF). 29. Considering the emergency nature of the works and short implementation period, no institutional development measures were envisaged at project appraisal. However, the financial authority of the Government was substantially delegated to the EAs, which speeded up the overall procurement process. As expected, RHD and LGED again demonstrated that they were the most capable organizations among all the EAs. BWDB, DPHE, and DSHE were expected to perform better than in the past—but did not, probably because they were unable to overcome their outmoded system of project management. Similar is the case with BR, which was unable to adopt a time-effective procedure for administration and project management. Despite having institutional capacity to implement projects effectively, DWASA, for reasons not known, failed to utilize the full loan proceeds allocated to it. DCC’s failure to utilize the funds allocated to it indicates a lack of administrative and technical capacities in handling external agency-assisted projects. L. Performance of Asian Development Bank

30. The performance of ADB is considered satisfactory in its timely response to assist the Government in undertaking rehabilitation works, and in processing the loan in the shortest possible time. The project design took into account the lessons learned from the six loans that

11

ADB had provided earlier to Bangladesh for post-disaster rehabilitation. Project formulation and implementation arrangements were in general satisfactory. The administration of the Project was delegated to BRM on 3 February 1999, two days after the loan was declared effective. Timely involvement of BRM in Project supervision facilitated commencement of the Project works on schedule. Advance action agreed by ADB for procurement of equipment and materials, recruitment of consultants, and provision for retroactive financing, was quite effective and saved time. The simplified approval procedures13 of contract awards recommended by ADB was realistic for the Project as they involved emergency disaster rehabilitation works. Payment to contractors by the EAs through imprest accounts also ensured uninterrupted cash flow, which facilitated timely completion of most of the works. ADB carried out effective coordination under the Project through the PSC’s quarterly meetings and monthly meetings at BRM with the EAs’ project directors. BRM played a pivotal role with respect to contract packaging, timely approval on award of contracts, quick disbursement of funds, reallocation of funds, approval of variation orders, and time extension of civil works contracts as required. ADB fielded three project review missions during the implementation period. However, it appears that the missions did not emphasize to the EAs the need for benefit monitoring and evaluation. As a result, this crucial requirement was overlooked by the EAs . To compensate for this oversight on the part of ADB, the major EAs like RHD, LGED, and BWDB should conduct a sample survey on selected subprojects using the baseline data obtained from external sources and measure the post-rehabilitation benefits.

III. EVALUATION OF PERFORMANCE

A. Relevance

31. The design and formulation of the Project were in conformity with the development strategy of the Government to promote economic development through improvement of infrastructure. This is also in line with ADB’s 1993 country operational strategy for Bangladesh, which aimed at the reduction of poverty through economic development. The Project was designed to restore the infrastructure facilities essential to economic growth. The objectives planned at appraisal were almost fully achieved at completion. No major changes of project design were made during project implementation. So, the Project was relevant. B. Efficacy in Achievement of Purpose

32. The Project is considered efficacious as the completed subprojects in all components achieved their principal objective of restoring damaged infrastructure to preflood levels. The road and bridge works served the purpose of maintaining communication wherever floodwaters had washed away existing bridges or large sections of the road, isolating villages from nearby city centers. Restoration of accessibility to markets and growth centers was particularly important in respect of perishable agro-based products. The slope protection works on railway embankments, using geotextile technology, resulted in considerable savings of government expenditures in avoidance of recurring temporary repair works on these. 33. In general, all the Project components made notable contributions to poverty reduction in the immediate vicinity. The construction activity taken up for the many subprojects involved localized civil works using unskilled and semiskilled labor. Those employed in the works

13 Government of Bangladesh. Circular No. PD/Coordination-8/93 (Part II) 91. August 1998; and Circular No.

PD/NEC-ECNEC/Coordination 8/93 (Part II) 110. October 1998.

12

benefited from increased income and purchasing power. An assessment of Project impacts and benefits on the basis of sample subprojects is presented in Appendix 7. C. Efficiency in Achievement of Outputs and Purpose

34. Given the emergency nature of the Project, no formal economic analysis was undertaken at appraisal to justify the project investment. The Project focused on the restoration of flood-damaged key infrastructure facilities, the capital costs of which were considered sunk costs. The economic benefits arising out of such restoration activities were, in fact, those that accrued at the time of initial construction, but were mostly lost due to the damage caused by the floods. The Project-financed restoration works brought the infrastructure back to the original levels of productivity and efficiency. These benefits, though not always quantifiable for all project components, are thus implicitly high. 35. Without defined baseline or time series socioeconomic data for most of the components, and given the fact that the damaged facilities were restored only to their preflood status, no attempt was made to conduct an economic evaluation for those components with little or no data.14 Economic efficiency, as measured by the economic internal rate of return (EIRR), was assessed for representative stretches in Part A (Roads and Bridges) because it was more amenable to benefit quantification. The project road sections selected were those for which sufficient relevant data were available. Details of the economic analysis are given in Appendix 8. The results from representative sections in the different zones show that the investment has been reasonably efficient.

Table 2: Results of Economic Evaluation on Selected Road Sections

Contract No. ROAD NAME Zone Length under Contract (km)

Completion Cost (Tk million/km)

EIRR (%)

DH/JA/01 Digpait–Sharishabari– Jhalupara Dhaka 12 0.52 25.5

DH/MA/01 and DH/MA/02 Baniajuri–Harirampur Dhaka 19 0.82 53.4

CO/NO/01 Basurhat–Banglabazar– Chaprasirhat Comilla 12 0.46 17.9

CT/CX/01 Baraitala–Magnamaghat Chittagong 13 0.28 64.1 EIRR = economic internal rate of return. Source: Highway Design and Management Circle, RHD. D. Preliminary Assessment of Sustainability

36. Project sustainability is determined by the ability of the EAs to preserve the assets created or restored in good condition through proper maintenance. As most of the restoration works were of an emergency nature, they tended to be piecemeal, aimed at meeting immediate needs. It is noted by the PCR Mission with concern that roads catering to relatively high motorized traffic and restored with seal coat treatment were already in poor condition and in need of another surface treatment. On the other hand, the Mission found that the same treatment had lasted on roads with a greater volume of nonmotorized traffic. Seal coat works,

14 Section 25, Para. 11 and related footnote 1 of Section 25 of the ADB’s Operations Manual state that “the

rehabilitation loan may finance numerous subprojects that are small in size and prima facie economically viable. For such small subprojects, internal rate of return analysis may not be feasible or practical.”

13

being short-term low-cost measures and having a maximum life of one year in heavy traffic conditions, are thus not adequate for roads having high traffic density. Moreover, the sustainability of roadworks under Part A, Part C, and Part E is doubtful because of the Government’s failure to allocate adequate funds for routine, periodic, and emergency road maintenance. The creation of an independent and self-supporting “road fund” envisaged in the final draft of the National Land Transport Policy (NLTP)15 could be a permanent solution to this deterrent. 37. In terms of sustainability, BWDB’s works on riverbank protection in general, particularly in Kurigram,16 are at risk. Due to the emergency nature of the Project, no detailed hydrological survey was undertaken to determine the possible depth of the river bed and required length of the apron at different seasons. This is inconsistent with the provisions of the Government’s National Water Policy which envisages “undertaking survey and investigation of the problem of riverbank erosion and develop and implement master plans for river training and erosion control works.” However, for the more permanent works carried out, such as reconstruction of bridges (RHD), slope protection of railways using geotextile technology (BR), riverbank protection works through groynes, and installation of pump houses and water supply system (DPHE and DWASA), sustainability can be assured through quality maintenance of the works restored. Rural infrastructure works, such as roads and drains/culverts completed by LGED, are more likely to be sustainable, mainly due to the comparatively low traffic volumes. E. Environmental, Sociocultural, and Other Impacts

38. The interventions under the Project did not interfere with the existing ecosystems as almost all of the activities were restorative. In a few cases, where designs were slightly modified to relocate damaged infrastructure away from the flood-prone zone, no adverse environmental and sociocultural effects were allowed. The project works have generally improved the quality of life of the rural communities, which are the principal beneficiaries. The restoration works allowed normal activities to be resumed with more access to markets, hospitals, and schools. The flood-affected people returned to their homesteads with greater assurance that the physical infrastructure is now well placed to cope with the ravages of a repeat phenomenon in the future.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

39. The Project was a complex one. The Project followed a sector approach, which suited this type of emergency assistance. The sector approach permitted rapid processing of the loan proposal in parallel to detailed assessment of needs, and allowed a flexible response within the selection criteria agreed upon with the Government. With the original loan closing date of 30 June 2001, most of the subprojects, except a few under Part D (Railways) were completed by this date. Implementation of some components, however, required rescheduling to allow for additional subprojects. The quality of works has generally been as expected at appraisal. Most of the purposes and objectives envisaged at appraisal have been achieved through implementation of the Project. Therefore, it is concluded that the Project had been mostly implemented as conceived. The performance of the Project is rated highly successful, following the guidelines of ADB’s Operations Evaluation Department.

15 Government of Bangladesh. Ministry of Communications. Report on National Land Transport Policy. January 2003. 16 Contract No. 36/K/98-99 for bank revetment work of Dharla river at Mogalbasha, Gr. No. 1 with a contract price of

Tk7,563,000 ($156,000).

14

B. Lessons Learned

40. For multisector projects that involve a large number of EAs, monitoring of implementation through a central PSC of the Borrower is very important. Monitoring by ADB through establishment of a PIU at the Borrower’s country level is also essential. Disbursement of funds through establishment of a separate imprest account by each EA also works well for timely payment to the consultants, contractors, and suppliers, which is crucial for successful project implementation. The sector approach undertaken was also beneficial in identifying appropriate subprojects scattered over a wide area. Adequate services of consultants are also essential. It was noted that consultant input was inadequate in several components. Where a large number of small subprojects spread over a wide area are implemented, provision for strong consultant support should be envisaged. Besides, it is an uphill task for the EAs to manage a large number of widely dispersed small contracts with limited human resources. In order to ensure improved construction, supervision, and monitoring performance aimed at raising the quality of works, the number of contract packages should be restricted to a minimum, to the extent possible. 41. In Bangladesh, RHD and LGED are still the two agencies that are reasonably capable of implementing ADB-assisted projects. Other agencies including BWDB, BR, DPHE, DWASA, DCC, and DSHE suffer from acute capacity constraints. Implementation experience suggests that civil works restoration projects generally require adequate programs for capacity building in the EAs regarding contract administration and fostering familiarity with ADB procedures for procurement and disbursement. This will help ensure timely completion of contractual works, submission of withdrawal applications, and liquidation of imprest accounts. 42. Experience with this Project confirms that the existence of, and familiarity with, a national strategy for disaster management would have been helpful, especially if such a strategy also contained the method for early estimation of infrastructure damage and identification of subprojects. C. Recommendations

1. Project-Related

43. The Government should regularly provide adequate funds through allocation in the annual development program of each fiscal year, for routine, periodic, and emergency maintenance of completed subprojects, particularly for the national, regional, feeder, urban, and rural roads rehabilitated under Parts A, C, and E of the Project. 44. The completed subprojects related to erosion protection on road, railway, and flood control embankments should be closely monitored over the years, particularly during each monsoon season. The concerned EAs should undertake urgent remedial measures where necessary. 45. Due to the need for processing the loan urgently, a project framework comprising a detailed benefit monitoring mechanism and baseline data was not designed at appraisal. Also, undertaking a detailed evaluation of project benefits was not possible within the small scope of this report. It is therefore recommended that the EAs for the major Project components like Parts A, B, and C should, by 31 December 2003, conduct a sample survey on selected subprojects using baseline data obtained from external sources and measure the post-

15

rehabilitation benefits. EAs should share the evaluation report with all concerned, including ADB. 46. A project performance audit report (PPAR) should be prepared within the first half of 2004 to assess the long-term impacts of the Project. 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 PPAR mission is fielded.

2. General

47. For successful implementation of future ADB-supported emergency assistance projects, the need for establishing a central coordination and monitoring unit in a core government body as the steering committee should be identified and planned for in detail at appraisal. The funding and disbursement mechanism should include establishment of imprest accounts by EAs following ADB’s statement of expenditure procedures. These will help expedite implementation of the projects by adequate coordination and ensuring uninterrupted cash flow for the contractors and consultants. 48. The number of contract packages should be restricted to a reasonable limit by enlarging the contract sizes to the extent possible through contiguity. This should facilitate ease of contract administration and involvement of more resourceful contractors in the project works, and should ensure the high quality and sustainability of workmanship. 49. To achieve long-term sustainability of the road improvement and rehabilitation works, the Government should undertake a regular maintenance program financed by an independent and self-supporting road fund by mobilizing user charges. The need for a “road fund” has been identified in the draft NLTP and its formulation is being further studied by the Government. 50. All protective works against riverbank erosions in the flood control and irrigation sector should be implemented separately on a comprehensive scale and not on an ad hoc basis under an emergency assistance project like this. Ideally, for these riverbank protection works, adequate time should be allowed for undertaking comprehensive hydrological studies prior to the start of physical works. 51. Given the complex and protracted approval procedures of some EAs and the administrative and core ministries, advance action for procurement of equipment and materials, recruitment of consultants, and provision for retroactive financing, as approved for the Project, should be replicated in all future emergency assistance projects funded by ADB. 52. To overcome the capacity constraints of the government agencies identified during Project implementation, ADB may provide training to the PIU staff of the EAs on project implementation on a regular basis. The objective should be to educate and acquaint the PIU staff with ADB’s project cycle and familiarize them with the ADB procedures relating to procurement and loan disbursement.

Appendix 2 22

PROJECT COSTINGS

Table A2.1: Project Cost ($ million)

Item Appraisal

Estimate Cost at

Completion Remarks

A. Civil Works 1. Roads and Bridges 45.24 40.78 2. Rural Infrastructure 25.40 26.42 3. Railways 17.50 7.26 4. Water Resources 16.05 15.35 5. Education 8.55 6.58 6. Urban Development 8.42 7.88

Subtotal (A) 121.16 104.27

In the civil works item, the cost at completion was about $17 million lower than the appraisal estimate. Low bid prices by the bidders in the roads and bridges component, and failure of BR to utilize the allocated funds, were the main reasons.

B. Equipment and

Materials

1. Railways 1.70 6.40 Subtotal (B) 1.70 6.40

Considering the real needs of BR, allocation at appraisal was increased during implementation

C. Consulting Services 1. Roads and Bridges 4.37 4.60 2. Railways 0.70 0.89 3. Education 0.20 0.17 4. Urban Development 0.42 0.00

Subtotal (C) 5.69 5.66 D. Land Acquisition and

Resettlement/ Taxes and Duties

0.20 0.94

Subtotal (A+B+C+D) 128.75 117.27 E. Service Charge 1.00 0.94

Total (A-E) 129.75 118.21 BR = Bangladesh Railway

23 Appendix 2

Table A2.2: Project Cost From Loan Savings ($ million)

No. Source of Loan

Savings Allocated Savings

Proposed Utilization Amount Utilized

Gov’t. Fund

Total

1. Loan 1059: Secondary Towns Infrastructure Development Project

1.4 Rehabilitation of urban infrastructure (LGED)

1.39 0.35 1.74

2. Loan 1124:

Dhaka Integrated Flood Protection Project

2.3

2.7

(i) Rehabilitation of flood protection facilities (BWDB)

(ii) Rehabilitation of urban infrastructure facilities (DWASA)

2.04

2.05

0.54

0.55

2.58

2.60

3. Loan 1125:

Northeast Minor Irrigation Project

1.3 Rehabilitation of small-scale water resources facilities and control structures (LGED)

1.13 0.28 1.41

4. Loan 1159:

Second Bhola Irrigation Project

3.0 Rehabilitation of minor/ medium flood control and irrigation structures (BWDB)

2.87 0.72 3.59

5. Loan 1202:

Secondary Towns Integrated Flood Protection Project

2.0 Rehabilitation of flood protection facilities (BWDB)

1.96 0.46 2.42

6. Loan 1215:

Second Rural Infrastructure Development Project

1.3 Rehabilitation of rural infrastructure (LGED)

1.26 0.31 1.57

7. Loan 1264:

Second Water Supply and Sanitation Project

1.5

1.4

4.4

(i) Rehabilitation of water supply (DPHE)

(ii) Rehabilitation of flood protection facilities (DCC)

(iii) Rehabilitation of urban infrastructure facilities (LGED)

1.33

1.33

4.20

0.33

0.33

1.05

1.66

1.66

5.25

8. Loan 1293: Third

Natural Gas Project

6.0

4.0

(i) Rehabilitation of roads and bridges (RHD)

(ii) Rehabilitation of railway facilities (BR)

5.06

3.12

1.26

0.17

6.32

3.29

9. Loan 1376:

Secondary Towns Infrastructure Development Project II

1.7 Rehabilitation of urban infrastructure facilities (LGED)

1.64 0.40 2.04

Total

33.0

29.38

6.75

36.13

Appendix 3 24

Category Item of Expenditures 1999 2000 2001 2002 Total01A Part A (RHD): Civil Works 10,829,740.96 16,158,370.05 4,823,933.72 0.00 31,812,044.73 01B Part A (RHD): Consulting Services 2,632,526.50 1,247,351.76 716,255.20 0.00 4,596,133.46 02 Part B (BWDB): Civil Works 7,349,673.97 3,730,088.11 1,199,916.17 0.00 12,279,678.25 03 Part C (LGED): Civil Works 12,149,914.65 7,442,300.79 1,545,507.39 0.00 21,137,722.83

04A Part D (BR): Civil Works 4,564,663.85 0.00 1,096,780.02 0.00 5,661,443.87 04B Part D (BR): Equipment & Materials 2,909.00 1,185,209.37 5,195,339.58 20,480.00 6,403,937.95 04C Part D (BR): Consulting Services 151,852.97 122,362.26 610,366.99 0.00 884,582.22 05 Part EI (LGED): Civil Works 4,495,607.47 246,306.39 44,927.67 0.00 4,786,841.53 06 Part EII (BWDB): Civil Works 0.00 1,516,723.39 0.00 0.00 1,516,723.39 07 Part EIII (DWASA): Civil Works 0.00 0.00 0.00 0.00 0.0008 Part EIV (DCC): Civil Works 0.00 0.00 0.00 0.00 0.00

09A Part F (DSHE): Civil Works 4,014,270.68 0.00 712,508.77 0.00 4,726,779.45 09B Part F (DSHE): Furniture 407,740.80 0.00 75,458.89 0.00 483,199.69 09C Part F (DSHE): Consulting Services 173,664.98 0.00 0.00 0.00 173,664.98 10 Service Charge During Construction 103,880.08 574,983.57 262,182.84 0.00 941,046.49 All Total 46,876,445.91 32,223,695.69 16,283,177.24 20,480.00 95,403,798.84

ANNUAL DISBURSEMENTS ($)

BR = Bangladesh Railway, BWDB = Bangladesh Water Development Board, DCC = Dhaka City Corporation, DSHE = Directorate of Secondary and Higher Education, DWASA = Dhaka Waterand Sewerage Authority, LGED = Local Government Engineering Department, RHD = Roads and Highways Department.

25 Appendix 4a

ACTIVITY10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

As at appraisalAs actual

OVERALL PROJECT IMPLEMENTATION SCHEDULE

1998 1999 2000 2001

Bid Processing and Award of Contract

Procurement of Equipment and supplies

Implementation of civil works

Appointment of Consultants

Selection of subprojects, design and preparation of tender documents

Appendix 4b 26

ACTIVITY10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Consulting ServicesSelection

Supervision

Civil WorksBidding, Approval & Award

Construction (Road Works)

Construction (Bridge Works)

Activity10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Tendering & Contract Awards

Construction

Supervision & Monitoring

ACTIVITY10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Prequalification of Contracts

Selection of Sub-Projects

Survey & Detailed Design

Award of Contracts

Civil Works


IMPLEMENTATION SCHEDULES BY COMPONENT

Figure 1 : Roads and Bridges

1998 1999 2000 2001

Design & Contract Preparation

Survey, Design & Cost Estimates

Figure 2 : Water Resources

2000 2001

1998 1999 2000 2001

Engagement of Additional Consultants

Prequalification of Contractors

Engagement of Additional Consultants

Preparation of Tender Documents

Figure 3 : Rural Infrastructure

1998 1999

27 Appendix 4b

ACTIVITY10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

ACTIVITY10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

ACTIVITY10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12


Preparation of Designs, Cost Estimates & Bid Documents for Civil Works

Tendering & Award of Civil Works Contracts

Civil Woks Contracts Implementation

Mobilization of TA Support

Preparation of Detailed Designs

Preparing Bid Documents and cost estimates

Bidding and Contract Awards

1999 2000 2001

Review of Assessment Estimates

Figure 5 : Urban Development

2000 2001

Supervision & Monitoring

Implementation of Contracts

Supervision and Monitoring

Procurement of Furniture

Engagement of Consultants

Figure 6 : Education1998

Organization and Assessment

IMPLEMENTATION SCHEDULES BY COMPONENT

Tendering (ICB- Sleepers & Ballast; LCB - others)

Award of Civil Works LCB Contracts

2001

1998 1999

Construction Works Implementation

Track & Embankment

Bridges

2000

Detailed Damage Assessment & Verification

Preparation of Tender Documents

Figure 4 : Railways

1998 1999

Appendix 5 28

STATUS OF COMPLIANCE WITH MAJOR LOAN COVENANTS

Sl No

COVENANT Reference in Loan

Agreement

Status

1. (a) The Borrower shall cause the Project to be carried out with due diligence and efficiency and in conformity with sound administrative, financial, engineering, environmental, flood protection, drainage, road, highway, educational, and public utility services.

(b) 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 in Schedule 5 to this Loan Agreement.

Section 4.01 Complied with Complied with

2. The Borrower shall make available, or cause to be made available, promptly as needed, the funds, facilities, services, land and other resources which are required, in addition to the proceeds of the loan, for the carrying out of the Project and for the operation and maintenance of the project facilities.

Section 4.02 Complied with

3. (a) In the carrying out of the Project, the Borrower shall cause competent and qualified consultant and contractors, acceptable to the Borrower and the Asian Development Bank (ADB), to be employed to an extent and upon terms and conditions satisfactory to the Borrower and ADB.

(b) The Borrower shall cause the Project to be carried out in accordance with plans, design standards, specifications, works schedules and construction methods acceptable to the Borrower and ADB. The Borrower shall furnish, or cause to be furnished, to ADB, promptly after their preparation, such plans, design standards, specifications and schedules, and any material modifications subsequently made therein, in such detail as ADB shall reasonably request.

Section 4.03 Complied with Complied with

4. The Borrower shall ensure that the activities of its departments and agencies with respect to the carrying out of the Project and operation of the project facilities are conducted and coordinated in accordance with sound administrative policies and procedures.


5. (a) The Borrower shall make arrangements satisfactory to ADB for insurance of the project facilities to such extent and against such risks and in such amounts as shall be consistent with sound practice.

(b) Without limiting the generality of the foregoing, the Borrower undertakes to insure, or cause to be insured, the goods to be imported for the Project and to be financed out of the proceeds of the loan against hazards incident to the acquisition, transportation, and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable to replace or repair such goods.

Section 4.05 Not complied with (such covenant should not be there in projects with numerous small subprojects imple-mented through local competitive bidding)

Complied with

6. (a) The Borrower shall maintain or cause to be maintained, records and accounts adequate to identify the goods, services and other items of expenditure financed out of the proceeds of the loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect, in accordance with consistently maintained sound engineering principles, the operations and financial condition of the agencies of the Borrower responsible for the carrying out of the Project and operation of the Project facilities, or any part thereof.


(b) 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 independent auditors whose qualifications, experience and terms of reference are acceptable to ADB;

Complied with

29 Appendix 5

Sl No

COVENANT Reference in Loan

Agreement

Status

qualifications, experience and terms of reference are acceptable to ADB; (iii) furnish to ADB as soon as available but in any event not later than 12 months 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 covenants of this Loan Agreement as well as on the use of the procedures for the imprest accounts and statements of expenditures issued for the Project), 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.

(c) The Borrower shall enable ADB, upon ADB’s request, to discuss the Borrower’s financial statements 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 ADB, 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.

Complied with

7. (a) The Borrower shall furnish, or cause to be furnished, to ADB all such reports and information as ADB shall reasonably request concerning (i) the loan and the expenditure of the proceeds and maintenance of the service thereof; (ii) the goods, services and other items of expenditure financed out of the proceeds of the loan; (iii) the Project and the subprojects; (iv) the administration, operations and financial condition of the agencies of the Borrower responsible for the carrying out of the Project and operation of the Project facilities, or any part thereof; (v) financial and economic conditions in the territory of the Borrower and the international balance-of-payments position of the Borrower; and (vi) any other matters relating to the purposes of the loan.

(b) Without limiting the generality of the foregoing, 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. Such reports shall be submitted in such form and in such detail and within such a period as ADB shall reasonably request, and shall indicate, among other things, progress made and problems encountered during the period under review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and expected progress during the following period.

(c) Promptly after physical completion of the Project, but in any event not later than 3 months thereafter or such later date as may be agreed for this purpose between the Borrower and ADB, the Borrower shall prepare and furnish to ADB a report on the execution and initial operation of the Project, including its cost, the performance by the Borrower of its obligations under this Loan Agreement and the accomplishment of the purposes of the loan.

Section 4.07 Complied with Complied with Partly complied with

8. 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.


9. The Borrower shall ensure that the Project facilities are operated, maintained, and repaired in accordance with sound administrative, financial, engineering, environmental, and maintenance and operational practices.


Appendix 6 30

DETAILS OF CONSULTING SERVICES

Sl No

Component Appraisal Estimate (person-months)

Actual (person-months)

I. Financed from Loan 1666

1. Part A: Roads and Bridges (a) International Consultant 92 95 (b) Domestic Consultant 799 799

2. Part D: Railways (a) International Consultant 20 22.8 (b) Domestic Consultant 40 37

3. Part F: Education (a) International Consultant 0 0 (b) Domestic Consultant 70 67.5

II. Financed from Loan Savings

1. Part E: Urban Infrastructure—(i) Rehabilitation of roads drains, culverts etc. under 1376-BAN(SF)

(a) International Consultant 1 1 (b) Domestic Consultant 81 85

2. Part E: Urban Infrastructure—(iia) Restoration of flood protection works (DIFPP) under 1124-BAN(SF)


3. Part E: Urban Infrastructure—(iib) Restoration of flood protection works (STIFPP) under 1202-BAN(SF)


4. Part E: Urban Infrastructure—(v) Rehabilitation of water supply under 1264-BAN(SF)

(a) International Consultant 2 1.6 (b) Domestic Consultant 25 39

III. Financed from Other Sources

1. Part B: Flood Control and Irrigation—charged to CADP (a) International Consultant 16 10 (b) Domestic Consultant 19 12

2. Part C: Rural Infrastructure—(i) Rehabilitation of small scale water resources facilities charged to TA 2564-BAN


3. Part C: Rural Infrastructure—(iia) Rehabilitation of rural infrastructure financed from Loan 1215 charged to SRIDP


4. Part C: Rural Infrastructure—(iib) Rehabilitation of rural infrastructure financed from Loan 1666 charged to TRIDP

0 90

0 90

31 Appendix 7

ASSESSMENT OF PROJECT IMPACTS 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 of the different components, prepared by the executing agencies (EAs) or consulting firms. Discussions were also held with officials of the various EAs and the consulting firms. In addition, the Project Completion Review Mission made three 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 project impacts, benefits, and effectiveness of the project components in general. 2. The Project Completion Review Mission visited selected subprojects in 16 districts, namely Comilla, Noahkhali, Feni, Chittagong, Narayangonj, Narsingdi, Kishoreganj, Netrokona, Sherpur, Jamalpur, Tangail, Sirajganj, Rangpur, Kurigram, Lalmonirhat, and Nilphamari. Subprojects included schools, feeder roads, pourashava (urban) roads, bridges/culverts, drains, water supply pipeline, pump house, production tubewell, slope and embankment protection works of rail tracks, retaining walls of bridges, riverbank revetments, and groynes. 3. The benefits for each project component are discussed below.

A—Roads and Bridges. Rehabilitation of flood-damaged roads, bridges, and culverts helped restore preflood traffic and allowed for passenger movement and transportation of agricultural produce. Dislocation of the road network had caused immense economic loss to rural communities served by them. The road subprojects, particularly the feeder roads, restored market accessibility for the local farmers. Transportation of perishable agricultural produce like vegetables was made easier for villagers using nonmotorized modes like cycle-rickshaws. Improvement in the surface condition and riding quality of the roads from their flood-damaged condition led to savings in vehicle operating costs for motorized traffic and also brought down the travel time between important centers on the network covered by these roads. Reconstruction/repair of bridges and culverts, which were washed away or severely damaged, saved the local villagers from long detours, thus allowing them to benefit from reduced travel time and from lowered transport costs. B—Water Resources (Flood Control and Irrigation). Rehabilitation works for the subprojects related to flood control have saved the installed facilities, which prevent large areas from flooding, thereby protecting a major section of the population from disaster that might have followed from similar situations in future. Repairing damage to head works and embankment revetments of small-scale irrigation works ensured revival of economic activity through increased crop production. Riverbank revetment works that were visited by the PCR Mission in Kurigram, were found not to have lasted. Stone blocks, bricks, and sandbags had been washed away. The riverbank in certain portions had been completely washed away and the road was in danger of flooding. C—Rural Infrastructure. The restoration of feeder roads, rural roads, and growth center markets brought the activities of the rural people, who had been isolated for more than 2 months by inundation, back to their original level. Accessibility to utility services, trade centers, and educational and health services was regained at reduced transport cost. Easy marketing of perishable commodities, higher farmgate prices, increased labor and freight movement, and the

Appendix 7 32

consequent boost to trade, commerce, and industry led to increased incomes of the rural community. The rehabilitated infrastructure facilitated post-relief operations by quicker movement of foodgrains and other relief materials. D—Railways. Flood damage restoration works for railways included civil works to restore embankments, tracks, bridges, essential buildings, stations, signaling, telecommunications facilities, etc., and capacity restoration by provision of emergency stocks of equipment and materials for handling future emergencies. The successful completion of civil works in the affected sections ensured smooth and early operation of train services disrupted by the floods. With road connectivity also badly affected during floods, the railways played a very important role in maintaining communications at these times. The Project Completion Review Mission was impressed with the rail track slope protection works in Sirajganj district. Railway officials emphasized the huge savings of government funds in avoidance of recurring temporary repairs to the embankment, which used to be affected by the wave action of flood waters in the region. Permanent slope protection works using modern geotextile technology were undertaken in the Natore-Santahar and Ishardi-Sirajganj sections in the Chalan Bil area. In the past, these sections used to be affected by the local wave action of floodwaters in almost every flood, and Bangladesh Railway had been spending Tk5 million to Tk10 million annually for temporary restoration works. With the completion of permanent restoration works, one of the major direct benefits was the total elimination of recurring expenditure on temporary repairs, thereby saving about Tk10 million of government funds annually. Other benefits included maintenance of normal train operations even during flood periods, resulting in lower train turnaround times, increased wagon utilization, and consequent time and cost savings. Major imports from India, namely foodgrain, cement, poultry feed, etc., come into Bangladesh via Ullahpara on this section. It is also the main rail connection for foodgrain movement between Dhaka and the western part of the country (Rajshahi). As the major movements of imports and foodgrains to markets in Dhaka are mainly along this route, prolonged disruption of this section would have resulted in a crisis in foodgrain availability and prices throughout the nation. With this section carrying increasingly heavier traffic for international trade, the stability of the constructed embankment assumes even greater importance. E—Urban Development. Rehabilitation of roads (resealing and repairs to potholes, eroding sub-base, edges, and shoulders), drains/culverts, slum improvement works (construction/repair of footpaths, tertiary drains, latrines, and hand tubewells) and solid waste management in the 103 project pourashavas resulted in improved drainage and living environments for town residents, who benefited from the removal of unsanitary conditions arising from blocked drains, tainted water supply sources, and damaged roads. Replacement of the water supply pipeline in one town, which had previously not been getting any water, provided a direct water supply, thus benefiting about one hundred thousand people. The ADB-financed flood protection works (embankment repair and riverbank protection through revetments/groynes/spurs), being implemented in six district towns under the Secondary Towns Integrated Flood Protection Project (STIFPP), were also severely damaged in the 1998 floods. The projected benefits included protecting the towns from riverbank erosion and embankment failures, thereby covering the risk of flood damage and erosion to property and infrastructure. Completion of embankment and improvement of drainage system under STIFPP resulted in a substantial increase in land prices in all the towns. Restoration of these works under the Flood Damage Rehabilitation Project (FDRP) ensured that the benefits anticipated under STIFPP, which would have been lost due to the floods, would still accrue.

33 Appendix 7

F—Secondary and Higher Secondary Education. Restoration of educational institutions, taken up under this component, comprised repairs to school buildings that were damaged while being used as flood shelters. In most of the schools, works done included flooring, brick soling, plastering, repairs to leaking roofs, painting of doors and windows, construction of boundary walls and latrines, and replacement of furniture. Reconstruction of severely damaged buildings prevented them from crumbling and made them more serviceable, thereby making it possible for the school authorities to take extra classes and provide library facilities. These works allowed the children, who were unable to attend school for 2–3 months, to resume their studies in safety. Boundary walls imparted a sense of security and privacy, especially to female students and teachers.

Appendix 8 34

ECONOMIC EVALUATION OF ROAD COMPONENT 1. Economic evaluation was not carried out at appraisal as the Project was of an emergency nature. However, for assessing the effectiveness/efficiency of any investment, it is desirable to conduct economic evaluation and estimate the economic internal rate of return (EIRR). A post-construction evaluation was taken up for a representative sample of project road sections, with at least one section from each of the three RHD zones where the Project was implemented. Selection was made on the basis of availability of sufficient relevant data on traffic, road characteristics, and cost estimates. 2. The selected project road sections are as follows: (i) Dhaka Zone: Digpait–Sharishabari–Jhalupara and Baniajuri–Harirampur; (ii) Comilla Zone: Basurhat–Banglabazar–Chaprasirhat; and (iii) Chittagong Zone: Bariatala–Magnamaghat. 3. Road restoration work for the Project was taken up under 296 contract packages. Each package comprised a number of road sections with repair works being done along the full length or in part. Typically, the works included pothole repair, premix carpeting, and resealing with seal coat. 4. Economic evaluation involved a comparison of “with” and “without” project situations for estimation of benefits and calculation of EIRR using discounted cost-benefit analysis. 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. A. Traffic Projections

5. Past traffic volumes on the project road sections were taken from the zonal reports of the Roads and Highways Department (RHD) Road Network Database, prepared annually by RHD. Average daily traffic (ADT) counts by vehicle categories for 1999 and 2000 were the latest available published data. The growth in traffic in Bangladesh in the recent past has been very high, in the range of 10-12% on the major arterial roads. Cars, jeeps, microbuses, and trucks especially have shown high growth rates. 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 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 current annual rate of 10% is assumed to prevail in the immediate future, i.e., until 2003, followed by 8.5% between 2003 and 2008, and 7% beyond 2008, in keeping with the conventional pattern of growth in transport demand. The number of registered motor vehicles in the country has grown at 7.5% over the last decade. B. Vehicle Operating Costs

6. The unit vehicle operating costs (VOCs) for different categories of motorized vehicles and for varying road roughness values, calculated by RHD for the year 2000, were used in the analysis. A few sample VOC values for the year 2000 are shown in Table A8.1.

35 Appendix 8

Table A8.1: Vehicle Operating Costs in Bangladesh by Vehicle Category (January 2000, Tk/km)

IRI Heavy/ Medium Truck

Small Truck

Large Bus Minibus Microbus Utility/

Jeep Car

2 8.69 7.14 12.05 6.97 4.08 7.98 6.36 3 9.21 7.42 12.26 7.08 4.24 8.39 6.66 4 9.73 7.70 12.48 7.20 4.44 8.82 7.01

10 13.05 9.65 12.73 8.25 7.46 11.46 10.93 IRI = International Roughness Index. Source: ADB Project Completion Report on Road Overlay and Improvement Project (Loan 1287-BAN[SF]), July 2002.

7. The floods had left the road surface in a highly distressed condition. Had the flood damage restoration works not been taken up, the road surface in the “without project” condition would have undergone further deterioration with growth in traffic. Given the flood-damaged condition, the International Roughness Index (IRI) value was assumed as 8 in the “without project” condition with annual roughness progression of 0.9. The maximum roughness value attainable by the road was frozen at 10 IRI. Flood damage restoration works, comprising mainly pothole repair and seal coat, was meant to provide immediate relief and was not envisaged as an improvement work. Thus, roughness in the “with project” condition was assumed to drop to only 5 IRI, and the roughness progression as 0.45. Periodic maintenance works are triggered by the roughness value. For the purpose of the analysis, a responsive periodic maintenance in the form of 38 mm premix bituminous carpeting was applied in the “with project” situation when the IRI value reached 6 (as per road maintenance strategies of RHD). The roughness dropped to 4 IRI following the intervention. Based on these assumptions, the benefits of road restoration works, in terms of savings in VOC, were calculated. C. Construction and Maintenance Costs 8. Actual construction costs (final contract values) were used in the analysis. Construction in most of the cases was completed within 1 year (1999). The financial costs were converted to economic costs by a standard conversion factor of 0.8 to account for taxes and duties. All costs have been brought to the 2000 level using an average annual inflation rate of 6%. 9. In the “with project” case, regular annual maintenance cost at Tk45,000 per km and periodic maintenance cost at Tk300 per square meter, amounting to Tk2.1 million per km for a two-lane road (7 meters wide), has been considered as per the road maintenance strategy of RHD. The periodic maintenance was found to be necessary in the third year, i.e., in 2002. D. Economic Evaluation 10. The EIRR has been calculated for 5 years, which is assumed to be the useful economic life of the flood-damage restoration works. The cost-benefit streams for the project road sections are shown in Table A8.2. The results indicate that the economic performance in the representative cases is fairly satisfactory. It is concluded that the investment was efficient.

Appendix 8 36

Table A8.2: Cost and Benefit Streams for Selected Project Road Sections (taka million)

Digpait–Sharishabari–

Jhalupara Baniajuri–Harirampur Basurhat–Banglabazar–Chaprasirhat Bariatala–Magnamaghat

Year Cost VOC

Savings Net

Benefit Cost VOC

Savings Net

Benefit Cost VOC

Savings Net

Benefit Cost VOC

Savings Net

Benefit 1999 5.28 -5.28 13.22 -13.22 4.68 -4.68 3.08 -3.08 2000 0.43 4.40 3.97 0.68 10.71 10.03 0.43 4.02 3.59 0.47 4.72 4.25 2001 0.43 5.46 5.03 0.68 13.28 12.59 0.43 5.00 4.56 0.47 5.86 5.39 2002 20.16 5.70 -14.46 31.92 13.84 -18.08 20.16 5.20 -14.96 21.84 6.10 -15.74 2003 0.43 9.02 8.59 0.68 21.86 21.18 0.43 8.22 7.79 0.47 9.65 9.19 2004 0.43 9.10 8.67 0.68 22.04 21.36 0.43 8.28 7.85 0.47 9.73 9.26 EIRR 25.5 % 53.4% 17.9% 64.1% EIRR = economic internal rate of return, VOC = vehicle operating cost. Source: Highway Design and Maintenance Circle, RHD