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Public Disclosure Authorized 1 SECOND RURAL TRANSPORT IMPROVEMENT PROJECT (IDA Credit 5107-BD) Mid-term Review and Implementaion Support Mission December 17-27, 2015 AIDE-MEMOIRE Public Disclosure Authorized 1. Introduction A World Bank team1 carried out the mid-term review (MTR) of the Second Rural Transport Improvement Project (RTIP II) during December 17 - 27, 2015. The review had the following objectives: (i) to review the project’s progress; (ii) to reassess the relevance of the project's development objectives (PDO) and the likelihood of achieving them, identify key constraints, and agree on necessary remedial actions or adjustments in project scope; (iii) to monitor the results framework in order to update project’s progress toward the achievement of the PDO and identify any revisions to the results framework that could improve measurability, attribution and realism; (iv) to identify expenditure projections of different components/sub- components and the requirements for cost re-allocation/readjustments; and (v) to assess any project restructuring requirements. 2. The Team would like to thank the Government of Bangladesh (GoB) for the hospitality extended to it, especially by counterpart agencies and officials (see Annex 1 for a list of persons met). This Aide-Memoire summarizes the main review findings, meeting decisions, agreements reached, and recommendations made. It Public Disclosure Authorized also reflects discussions that took place at the wrap-up meeting held on December 27, 2015 at the Local Government Division (LGD) of the Ministry of Local Government, Rural Development and Cooperatives (LGRD&C), which was chaired by Mr. Abdul Malek, Secretary, LGD. Considering the many diverse components and consequent complexity of the project, an in-depth analysis of achievability of targets and future restructuring options was done. The government has agreed with the analysis and options through an iterative process and concurrence took until the end of March. As per the World Bank’s Access to Information Policy and the wrap up meeting decision, this Aide-Memoire will be classified for “public disclosure”. I. Key Project Data Project Data Project Performance Ratings Board Approval: 20-September-2012 Summary Ratings Last Now Trend Effectiveness Date: 28-November-2012 Achievement of PDO MS MS ◄► Original Closing Date: 30-April-2018 Implementation Progress MS MS ▲2 Public Disclosure Authorized Mid-term Review Date: December 2015 Project Management S S ◄► Original Loan/Credit SDR 195m (US$ Procurement MS MS ◄► Amount: 302m) Financial Management MS MS ◄► Available Loan/Credit SDR 195m Social Safeguard MS S ▲ Amount (end-March, 2016): (US$272.122 m) Amount Disbursed (as of SDR 76.542m Environmental Safeguard S S ▲ end-March, 2016, (US$106.815 m) expected): 39.25% M&E S S ◄► Counterpart Funding S S ▲ Notes: HS- Highly Satisfactory; S- Satisfactory; MS- Moderately Satisfactory; MU- Moderately Unsatisfactory; U- Unsatisfactory; HU- Highly Unsatisfactory; NA- Not Applicable; ▲ Improving trends; ▼ Deteriorating trends; ◄► Static Public Disclosure Authorized 1 Hereinafter referred as “the Team”. The Team comprised: Farhad Ahmed (Sr. Transport Specialist and Task Team Leader), Marghoob Bin Hussein (Sr. Procurement Specialist, Co-Task Team Leader); Ashis Bhadra (Sr. Transport Specialist), Mohammad Reaz Uddin Chowdhury (Financial Management Specialist), Iqbal Ahmed (Environment Specialist), Md. Akhtar Zaman (Social Development Specialist), Serge Cartier van Dissel (PBMC Specialist), Javed Bari (Technical Specialist), Md. Shehab Uddin (Technical Specialist), Kazi Shahazada Shahanewaz Hossain (Technical Specialist), Nasreen Begum (Program Assistant) and Sajjad Bin Siddique (Project Associate). 2 Same before and after ratings may have an improving trend if it is concluded that the trend is positive but the progress is not sufficient to elevate the rating to the next level. 1 II. Achievement of Development Objectives Status & Restructuring Requirements 3. Analyses suggest that due to resource constraints and ambitious target setting during the preparation, RTIP II is highly unlikely to achieve three out of four of its PDO indicator targets. Table 1 shows the analysis results. MTR assessment, however, suggests adjustments to the indicators. Table 1: Achievements of PDO Indicators Indicator 3rd year target (end- 3rd year actual of project target) achievements3 Population living within 2km of all season roads in project 61% (64%) 57% districts (%) Increased in road in good condition (International 36% (40%) 34% Roughness Index (IRI) below 7) (%) Increase in the level of satisfaction from users and No value assigned 22% communities (%) Maintenance budget needs met for the rural roads (%) 33% (40%) 22% 4. The MTR assessments show that the PDO and intermediate results indicators require substantial adjustments in their description, baseline and/or targets. The relevancy of RTIP II’s all 21 result indicators (both PDO and intermediate result indicators), with respect to the PDO, has been assessed in a scale, ranging from “highly relevant” to “irrelevant”, during the MTR. The MTR reviewed the physical target indicators against the availability of project’s financial resources, time, and stocks. The review suggests that while nine intermediate results indicators could be dropped, ten result indicators need revision of targets and/or descriptions. Table 2 summarizes the outcome of the analysis (see Annex 3 for details). Table 2: Summary Outcome of the Results Framework Analysis Items Current Changes proposed number PDO indicator 4 Target revision: 4; Drop: nil Intermediate Results Indicator (Accessibility Improvement 9 Target revision: 3; Intact: 1; Component) Drop: 5 Intermediate Results Indicator (Institutional Strengthening, 5 Target revision: 3; Intact: 1; Capacity Building and Governance Component) Drop: 1 Intermediate Results Indicator (Rural Transport Safety 3 Target revision: nil; Drop: 3 Component) 5. Downward adjustments to the physical targets will be required for most sub-components barring two. These revisions are required given the following: (i) reduced resources are available given the depreciations of Special Drawing Rights (SDR) value against United States Dollar (US$); (ii) increase in unit costs of major components; (iii) some sub-components do not have enough stocks to work on; (iv) the remaining project period is not enough to complete the targets in the case of some of the components; (v) inclusion of extra bridges/culverts to make the roads accessible year-round (estimated additional requirements of over US$ 25m). Annex 13 provides the outcome of the analysis. The summary of the proposed changes, along with the justifications for such changes, are provided in Table 3. The Team reminded the government counterpart that any costs linked to incomplete physical works undertaken under RTIP II after the project closing date (30 April 2018) will be the responsibility of GoB. Annex 15 summarizes the Bank-approved sub-projects of the Accessibility Component based on the limits set by the revised physical targets suggested in the MTR. The consequences of the proposed adjustments in results indicators and physical sub-component targets will be assessed during the restructuring process. 3 Nominal cumulative values only; subjected to further verification and confirmation 2 Table 3: Proposed Revision of the Physical Targets Sub-component Original Proposed Main reasons for change Target Targets Component A1a: Improvement of UZR - 750 450 Resource scarcity; unit cost Upazila Roads (km) increase (49%); not enough stock; limited time available Component A1b: Improvement of UNR - 500 370 Resource scarcity; unit cost Union Roads (km) increase (75%); not enough stock. Sub-component of A1a and A1b: Bridge None 3,409 Needed to include in UZRs and in Separate Packages - 50m or longer (m) UNRs to make them accessible year-round Component A2a: Rehabilitation and 3,550 4,000 Increased need; enough stock Periodic Maintenance (RPM) of rural available roads (km) Component A2b: PBMC – Performance- 450 428 Resource scarcity; unit cost Based Maintenance Contract (km) increase (9%) Component A3: Rural Waterways 44 44 Not applicable (km) River Jetties (nos.) 20 10 Resource scarcity; unit cost increase; not enough stock Component A4: GCM - Growth Center 50 33 Resource scarcity; unit cost Market (nos.) increase (39%); not enough stock III. Current Implementation Status 6. RTIP II has been continuously showing improving trends in relation to the overall implementation progress. However, it did miss the end-third year target indicator values under the accessibility component in all cases but one. The Table 4 provides the assessment summary and ratings4 of different sub-components. A majority of the components/ sub-component have been showing improving trends. The overall implementation progress has been judged as “moderately satisfactory”. The performance of the project has been accelerated, which is also evident from the disbursement figures: it rose from 12.3% in June 2014 and 22.7% in June 2015 to 40.2% by March 2016. It is noteworthy that based on only the achievements in the current PDO indicators, the project may not qualify for a satisfactory rating. However, while rating the project, the Bank Task Team applied, from a rather strategic point of view, due considerations to not only the PDO and intermediate results indicators (most of which are planned for major revision during the restructuring exercise), but also to the accelerated implementation progress of the project actually
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