Document of The World Bank Public Disclosure Authorized Report No: 25310-BD
PROJECT APPRAISAL DOCUMENT
Public Disclosure Authorized ONA
PROPOSED CREDIT
IN THE AMOUNT OF SI)R 13.5 MILLION (US$18.24 MILLION EQUIVALENT)
TO
THE PEOPLE'S REPUBLIC OF BANGLADESH
FOR A Public Disclosure Authorized SOCLAL INVESTMENT PROGRAM PROJECT
February 16, 2003
Rural Development Sector Bangladesh Country Unit South Asia Regional Office Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective December 2002) Currency Unit = Bangladesh Taka (Tk.) Tk. 1.00 = US$0.0172 US$1.00 = Tk. 58.15
FISCAL YEAR July 1 - June 30
ABBREVIATIONS AND ACRONYMS
ARCS Audit Report Compliance System CAP Community Action Plan CAS Country Assistance Strategy CBO Community-Based Organization CG Community Group CONTASA Convertible Taka Special Account CPAR Country Procurement Assessment Report CQ Consultant Qualification CSO Community Support Organization DC Direct Contracting EA Environmental Assessment EMP Environmental Management Plan FMR Financial Monitoring Report GB Goveming Body GnB General Body GOB Govemment Of Bangladesh HPI Human Poverty Index IC Information and Communication ICR Implementation Completion Report IDA International Development Association IPI Income Poverty Index LIL Learning and Innovation Loan MAA Memorandum And Articles Of Association MD Managing Director M&L Monitoring and Learning MIS Management Information System MOF Ministry of Finance MOU Memorandum of Understanding NGO Non-Government Organization NCB National Competitive Bidding NS National Shopping OM Operational Manual PAST Project Appraisal And Supervision Team PCT Procurement Core Team PKSF Palli Karma Sahayak Foundation PMC Project Management Committee PO Participating Organization PPRP Public Procurement Reform Project PROCMOR Procurement Monitoring Report QCBS Quality And Cost Based Selection RFP Request for Proposal SA Social Assessment SAP Social Assistance Program SDF Social Development Foundation SFA Sub-Project Financing Agreement SGA Subsidiary Grant Agreement TOR Terms of Reference SSS Single Source Selection UP Union Parishad VDC Village Development Committee VI Vulnerability Index
Vice President: Mieko Nishimizu Country Director: Frederick T. Temple Sector Director: Constance A. Bemard Task Team Leader: Wahida Huq
BANGLADESH SOCLAL INVESTMENT PROGRAM PROJECT
CONTENTS
A. Project Development Objective Page
1. Project development objective 2 2. Key performance indicators 2
B. Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 2 2. Main sector issues and Government strategy 3 3. Sector issues to be addressed by the project and strategic choices 5
C. Project Description Summary
1. Project components 5 2. Key policy and institutional reforms supported by the project 6 3. Benefits and target population 7 4. Institutional and implementation arrangements 7
D. Project Rationale
1. Project alternatives considered and reasons for rejection I1 2. Major related projects financed by the Bank and/or other development agencies 12 3. Lessons learned and reflected in the project design 13 4. Indications of borrower commitment and ownership 14 5. Value added of Bank support in this project: 14
E. Summary Project Analysis
1. Economic 14 2. Financial 15 3. Technical 16 4. Institutional 16 5. Environmental 17 6. Social 19 7. Safeguard Policies 21
F. Sustainability and Risks
1. Sustainability 22 2. Critical risks 22 3. Possible controversial aspects 23
G. Main Conditions
1. Effectiveness Condition 24 2. Other 24
H. Readiness forlmplementation 26
I. Compliance with Bank Policies 26
Annexes
Annex 1: Project Design Summary 27 Attachment 1: Relationship between Project Components and Implementation 32 Arrangements Annex 2: Detailed Project Description 33 Attachment 1: Target Strategy 37 Attachment 2: Information & Communication Strategy & Implementation 39 Attachment 3: Monitoring and Learning 40 Attachment 4: Institutional Development at the Community-Level 43 Attachment 5: Implementation of Community Infrastructure Sub-Projects 46 Attachment 6: Community Infrastructure Works 48 Attachment 7: Sample Sub-Project Financing Agreement 50 Attachment 8: Social Assistance Program 56 Attachment 9: Pilot Private Financing of Community Utilities 62 Attachment 10: Environmental Supervision 65 Attachment I 1: Measurement of Poverty Indices and Findings of the Social 69 Assessment Study Attachment 12: Summary of the Tribal Development Plan 72
Annex 3: Estimated Project Costs 77 Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 78 Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 81 Annex 6: Procurement and Disbursement Arrangements 82 Annex 7: Project Processing Schedule 98 Annex 8: Documents in the Project File 100 Annex 9: Statement of Loans and Credits 101 Annex 10: Country at a Glance 103
Figure 1: Relationship between Project Components and Implementation Arrangement 32 Figure 2: Implementation of Community Infrastructure Sub-projects 47
MAP(S) IBRD No. 32249 BANGLADESH Social Investment Program Project Project Appraisal Document South Asia Regional Office SASRD Date: February 16, 2003 Team Leader: Wahida Huq Sector Director: Constance A. Bernard Sector(s): Other social services (50%), General Country Director: Frederick T. Temple transportation sector (40%), Media (5%), General Project ID: P053578 education sector (5%) Lending Instrument: Specific Investment Loan (SIL) Theme(s): Rural services and infrastructure (P), Other rural development (P), Gender (S), Poverty strategy, analysis and monitoring (S), Rural policies and institutions (S) 1 dPrdjctFihiarcini Data, .- b * - ',4-i t t 4 [ Loan [X] Credit [ Grant [ Guarantee [ Other: For Loans/Credits/Others: Amount (US$m): SDR 13.5 million (US$18.24 million equivalent) Proposed Terms (IDA): Standard Credit Grace period (years): 10 Years to maturity: 40 Service charge: 0.75%
BORROWER 1.61 0.00 1.61 IDA 17.89 0.35 18.24 LOCAL COMMUNITIES 2.69 0.00 2.69 Total: 22.19 0.35 22.54 Borrower: PEOPLE'S REPUBLIC OF BANGLADESH Responsible agency: SOCIAL DEVELOPMENT FOUNDATION Address: House 3, Road 2A, Banani, Dhaka-1213, Bangladesh Contact Person: Mr. M. Hafizuddin Khan, Managing Director Tel: (880)-2-9894622, 9894611 Fax: (880)-2-9873095 Email: [email protected] Estimated Disbursements (_Bank FY/US$m):
r ' ;r.*^ .R-. :-0,0 -' :, 200, f - 1,- 20ns6.5 '. .0i6 207 Annual 1.00 5.00 6.00 :5.00 1.24 Cumulative 1.00 6.00 12.00 17.00 18.24 Project implementation period: 4 years Expected effectiveness date: 06/16/2003 Expected closing date: 06/30/2007 A. Project Development Objective
1. Project development objective: (see Annex 1) The objective of the project is to develop effective and efficient financing and institutional arrangements for improving access to local infrastructure and basic services through the implementation of community-driven small-scale infrastructure works and social assistance programs.
The project area will be Jamalpur and Gaibandha districts, which rank among the highest in poverty incidence both in terms of income and human development (Annex 2, Attachment 1). The pilot private financing of community utilities will be anywhere in the country where opportunities exist.
2. Key performance indicators: (see Annex I) The project will measure the success of reaching its development objective through the following key indicators:
* About 1,800 community sub-projects successfully completed, in terms of participation of the poor and women, beneficiary satisfaction, technical quality, cost-effectiveness and operation and maintenance. * About 50 percent of the poor and vulnerable groups in the project area benefit from small-scale rural infrastructure and social assistance programs. * At least 50 percent of the beneficiary communities continue to prioritize needs using participatory processes. * At least 10 percent of the community groups in the project area able to leverage external resources to support their additional needs. * Increased awareness and opportunities for reducing vulnerability.
B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: IDA/R2000-204[IFC/R2000-216] Date of latest CAS discussion: December 12, 2000 The overarching objective of the CAS is to help realize Bangladesh's aspirations of reducing poverty within one generation. The Government of Bangladesh (GOB) visualizes a 50 percent decline in the number of people below the poverty line by 2010. To achieve this, the CAS focuses on three critical areas: (a) consolidating gains in human development; (b) implementing an integrated approach to rural development; and (c) accelerating and broadening private sector-led growth. Critical cross cutting issues identified by the CAS are institutional capacity-building, governance, macroeconomic stability, social concerns (e.g., gender equity and empowerment) and environmental protection. For those sectors where a comparative advantage can be demonstrated (e.g., rural water supply and sanitation infrastructure and micro-credit and human development), the CAS identifies the scaling up of NGOs and community-driven approaches as a priority.
The proposed project is in line with the CAS objectives. By focussing on a process-oriented community driven approach, the project aims to explore new ways of delivering critical social assistance and infrastructure services to the poor. In so doing, it will address governance, institutional capacity-building, and social objectives of the CAS. Empowering local communities of the poor will ensure that they obtain services from local government and other providers in a transparent manner. The process of social mobilization will also ensure that community groups include the most vulnerable and that gender equity considerations are taken into account. Finally, by fostering partnerships among
-2 - communities, NGOs, the private sector, and local-level institutions, the project approach is consistent with the key lesson of partnership articulated in the CAS.
2. Main sector issues and Government strategy: Main Sector Issues
Participatory poverty assessments, as well as GOB's draft Interim Poverty Reduction Strategy Paper (I-PRSP), have established that poverty in Bangladesh is not only about lack of income. Poor people have provided accounts of their state of poverty in terms of gender inequalities, powerlessness, and exclusion from basic services such as health and education, participation in the development process and material wealth. The two project districts, Jamalpur and Gaibandha, reflect the deprived conditions of the poorest in the country. The main factors contributing to chronic poverty continue to be the following:
Limited access of the poor to key infrastructureand basic services. Access to tubewells for drinking water is good (about 90 percent), but the incidence of arsenic contamination poses a major threat in many parts of the country. In addition, nearly 80 percent of all illnesses in Bangladesh are related to water borne diseases. In the rural areas, only about 40 percent of the people have access to sanitation facilities. Access by road is constrained due to poor conditions, particularly in the villages. Bangladesh has one of the lowest levels of per capita consumption of electricity compared to other South Asian countries. Less than 30 percent of the population have access to power. In rural Bangladesh, the figure is about 10 percent, and in coastal and remote areas, it is as low as three percent.
Limited human capitaldevelopment: The literacy rate of the poor is 32.6 percent compared to 42.3 percent of the non-poor. (The poor are defined as households with a monthly income of less than Tk. 1,000 (US$17) and the non-poor with monthly income of Tk. 3,000 or US$52 equivalent). GOB estimates that there are about 40 million illiterate people in the age cohort of 5-35 years. About 20 percent of the poor children (0-4 years) in the rural areas suffer from diseases compared to 11 percent of the non-poor. The infant mortality rate has declined, but deaths of children under five still account for half of all the deaths in Bangladesh. The levels of malnutrition are also among the highest in the world. An estimated 700 children die every day in Bangladesh due to malnutrition. Among those surviving, 60 percent of those under five years of age are underweight, and more than half are stunted. Matemal mortality is six for 1,000 live births, one of the highest in the world. Anemia and umderweight during pregnancy contributes to about 25 percent of the matemal deaths. Over 80 percent of births in Bangladesh take place at home, and only 22 percent of the deliveries are assisted by trained attendants, 14 percent by doctors or paramedical workers and the remaining by untrained traditional birth attendants or family members.
Limited success of existing poverty programs. Poverty and social assessment studies indicate that existing poverty reduction programs (e.g., micro-credit and safety net programs such as food for works and vulnerable group development programs) have not helped to significantly reduce poverty of the poorest and vulnerable groups in a sustained manner. Existing micro-credit programs do not target the poorest, and safety net programs focus only on the survival of the vulnerable groups during economic or natural shocks. Various studies have shown that the poorest, totalling- 12 million individuals or 2.5 million households in Bangladesh, are not reached by the micro-credit programs. The reasons can be grouped broadly under two categories: (a) those relating to the socioeconomic conditions of the poorest, which have bearings on their capacity and skills to use loans for financially viable activities; and (b) those relating specifically to regular micro-credit, which include lack of multiple income earning sources, seasonal shortfalls in income, lack of grace periods, lack of flexibility in the use of the weekly savings and unwillingness of peer groups to accept a perceived "higher risk" member.
- 3- Poor local governance. There is little accountability of the government agencies and local govermment, as well as NGOs, to the people, particularly the poor. Local bureaucracy lacks motivation to promote participatory planning and implementation. Lack of peoples' institutions at the village level makes it difficult for the citizens at the grassroots to ensure that their development priorities are reflected in the national policies and plans. The nearest local govermment for the people at the grassroots is the Union Parishad (UP) but this institution is not yet able to fully address local development needs due to resource and capacity constraints. Lack of coordination amnong the various organizations in rural areas also contribute to inefficiencies.
Government Strategy
The govemment strategy for reducing poverty, as reflected in the I-PRSP, focuses on four areas: (a) expanding the scope for pro-poor economic growth through expanding income and employment opportunities for the poor; (b) fostering human development for the poor; (c) providing social safety nets for the poor against various anticipated or unanticipated income (consumption) shocks; and (d) favorably influencing participatory governance by enhancing the voice of the poor and strengthening women's empowerment. The main operational challenge for the GOB is to improve efficiency and outreach of basic services through greater participation of community-based organizations (CBOs), local government, NGOs and the private sector. In response to this challenge the Govemment is exploring possibilities of partnerships with these organizations and seeking altemative institutional mechanisms to deliver basic services. Examples of successful partnerships exist in the delivery of primary education, health and nutrition services, water supply, and micro-credit. The Government has successfully engaged with NGOs in non-formal education, health and nutrition programs. Rural electricity cooperatives have functioned effectively, as the legal framework allows members to choose managers and hold them accountable.
The Government is experimenting with other institutional models to improve access and quality of basic services. One model is based on the use of autonomous, not-for-profit foundations registered under the Companies Act (1994). These foundations provide a variety of services, such as wholesaling of micro-finance; leveraging private equity in transport infrastructure investments, promotion of horticulture exports, and extension and technical support for development of silk production. Of these, the Palli Karma Sahayak Foundation (PKSF), which is responsible for wholesaling micro-credit through NGOs, has been successful because of transparent rules of business and a strong govemance structure. PKSF has recently initiated a "Financial Services for the Poorest" project to find out whether micro-credit can be used profitably by the poorest and if it can be made more effective by combining other support services, such as safety nets, training and marketing services, and awareness raising.
In June 2001, the GOB established the Social Development Foundation (SDF) as a not-for-profit company to promote community-driven initiatives through decentralized planning and management of' development programs. SDF will encourage formation and strengthening of informnal institutions at the village and community levels and also strengthen existing community organizations for addressing the needs of the poor.
Some of the current social assistance programs of NGOs target the poorest and socially-excluded groups through social mobilization and increased access to basic education, health services, and information; empowerment through creating a voice in decision-making and monitoring; awareness of legal rights; skill training with linkages to micro-credit; and employment. The coverage of these programs is limited, and there is a large unmet demand.
-4 - 3. Sector issues to be addressed by the project and strategic choices: The project would attempt to address the issues of lack of organizations to promote participatory governance, access to infrastructure and basic services, and development of human resources.
Strengthening SDF to promote participatorygovernance. The SDF is expected to play an important role in participatory governance, fostering social capital formation and advocating for appropriate pro-poor policies. The project will support capacity-building of SDF in these areas and help it develop the ability to spread, scale-up, and institutionalize the successful principles and practices emerging from the project implementation.
Introducing community-driven approaches. The project will promote the adoption of community-driven approaches in two districts to replace more traditional, top-down interventions currently employed in the country. SDF will contract competent organizations, referred to in this project as participating organizations (POs) to work closely with conununity groups, devolving key decisions regarding small investments to these groups, thereby promoting greater community ownership of poverty reduction interventions.
Introducing a results-orientedsocial assistanceprogram for the poorest and vulnerable groups. To meet the demand for social assistance, the project will complement existing programs in the two selected districts and where there are gaps in coverage. The project will provide results-oriented grant funding to competent POs which have demonstrated efficiency and effectiveness in the delivery of this type of program.
Pilotingpartnerships with the private sector: Output-based incentives will be tested to encourage the private sector to provide community utility services. Effective mechanisms for regulation, targeting, cost recovery, and public- private partnerships will be tested. Some models exist in the country, and the project will provide a further impetus.
C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The project aims to develop institutions, promote community-driven principles, pioneer performance-based social assistance programs for the poorest, and leverage private financing for basic utilities. The project is piloting novel approaches to develop procedures, test different products and approaches, and demonstrate impact. At mid-term review (December 2005), the project's implementation arrangements and performance would be assessed in terms of achievement of the expected outcomes and outputs and successful mechanisms identified for scaling up.
The project will have the following four components: (a) Strengthening SDF: There are four sub-components to this component: (i) information and communication (IC); (ii) capacity building of SDF; (iii) monitoring and learning (M&L); and (iv) project management support (including environmental assessment and tribal development). The project will finance technical assistance, monitoring and evaluation studies, establishment and incremental staff, and operating costs of SDF;
-5- (b) Institutional development at the community-level: This component will provide support to the community in terms of raising awareness, motivating and engaging the rural poor to participate in community-driven initiatives, changing attitudes and behaviors among local stakeholders, development of organizations at the village-level, and preparation of Community Action Plan (CAP). This component will have two sub-components: (i) information and communication campaign; (ii) formation and strengthening of Village Development Committees (VDCs), Community Groups (CGs), and the project management committees of CGs, and developing a demand-led CAP. The project will finance the cost of services related to information dissemination at the local-level, institutional development, preparation of the CAP, and environmental assessment and screening; (c) Implementation of Community Action Plans: The CAP will prioritize community's needs for small-scale infrastructure and social assistance based on informed choice and eligibility criteria indicated in the menu of options in the Operational Manual (OM) of the project. The project will finance: (i) 85 percent of the costs of the expenditures of the approved community infrastructure sub-projects; (ii) costs of NGO services to implement the social assistance programs, including one-time seed capital and cost of legal assistance for the very poorest and vulnerable groups, and the implementation of the tribal development plan; and (iii) costs of services for appraisal and supervision of sub-projects, including environmental supervision; and (d) Pilot Private Financing in Community Utilities: Under this component, the project will finance technical assistance and a maximum of 70 percent of the approved costs of sub-projects. The technical assistance will help SDF to identify, develop, appraise, and supervise pilot sub-projects in piped water supply and off-grid electricity.
; P :-:>:'1 i:, . ' 4 *. Indicative' T, . .0BinIy %Iof S, ,,, > 'Comphnefitt ,, ,;q. ,,- -. ttsX . inacin - *~~~i... ~~~.p, US$M)~~~~~ .'Tta .I-n'j( U.S$.K!). !finaiifcing- 1. Strengthening of SDF 1.91 8.5 1.39 7.6 2. Institutional Development at the Community-Level 0.38 1.7 0.30 1.6 3. Implementation of Community Action Plans 19.35 85.8 15.84 86.8 4. Pilot Private Financing of Community Utilities 0.90 4.0 0.71 3.9 0.0 0.0 Total Project Costs 22.54 100.0 18.24 100.0 Total Financing Required 22.54 100.0 18.24 100.0
2. Key policy and institutional reforms supported by the project: Promotion of cost recovery and testing of alternativefinancing modalities: The project proposes to introduce community contribution for financing small-scale rural infrastructure. Communities will be expected to make a contribution towards the sub-project costs in cash, labor, or materials. In addition, for those activities that have the potential to generate user fees, private financing options will be explored. Local private entrepreneurs will be encouraged and supported to invest, operate, and maintain public services in local communities. In this way, the project will introduce, develop, and test different modalities to finance demand-driven sub-projects at the community level, promoting cost recovery wherever possible. These approaches mark a shift from the current practice in the country. After two years of implementation, the alternate approaches will be the subject of evaluation to determine if and how each model should be expanded on a larger scale.
- 6 - Expansion of social assistanceservices using performance based contracts: The focus of the social assistance program will be on advocacy and capacity building of the poor and vulnerable groups to equip them to participate in social and economic activities. Social assistance will be targeted to areas in the project districts where there are gaps in coverage of other social assistance programs. Performance based contracts will be introduced to assess the quality of services by POs where payments would be linked explicitly to the achievement of results pre-specified in the contract.
Promotion of decentralizedmanagement of services and improvement of local governance: The,project will help strengthen community organizations and more open local planning practices. These initiatives, along with direct funding to communities, will ensure decentralized management of development programs at the village level. These activities would enable the poor people to increase their role in local governance. UPs will be involved in community planning and review and supervision of sub-projects. Such involvement would enhance local capacity for improved service delivery, transparency, and accountability.
3. Benefits and target population: The targeting for community infrastructure works would be broad-based but includes specific conditions for inclusion of the poor and women in the eligibility criteria for financing of sub-projects. The social assistance services will be targeted at the very poor and other vulnerable groups. Hence, in the formation of groups, assessing community demand, and implementation, the priority of the poor and their participation are key criteria. The guide to targeting social assistance program is the Vulnerability Index (VI) developed by SDF. (See Annex 2, Attachment 1.) The project aims to cover approximately 1,400 (about 54 percent) villages in the two districts.
The main benefits of the project are:
* About 250,000 people (of whom at least 30 percent will be poor and women) will benefit through access to safe water, sanitation facilities, and other essential social, transport and trade infrastructure services through the implementation of about 1,800 community infrastructure sub-projects. An additional 300,000 poor and socially excluded (female-headed household, disabled, tribal people, street children, etc.) will benefit from the social assistance program. Impacts will include improved welfare, enhanced productivity, increased family income, and reduced vulnerability of the poorest in the subprogram areas. * Better social inclusion through addressing specific priorities of vulnerable groups, including women, children, disabled, and tribal people. * Strengthened local governance by empowering community organizations to hold local governments accountable for services; promoting and demonstrating participatory local planning processes that involve the community at large; and creating functional spaces for participatory local governance. * Increase availability of resources for, and local level supply of, basic services by testing innovative delivery arrangements, improving efficiency of public investment, promoting cost recovery in service delivery, and building capacity of organizations at the local level.
4. Institutional and implementation arrangements: The duration of the project will be four years. The institutional and implementation arrangements for the project are described below. (See also Annex 1, Attachment 1.)
- 7 - Social Development Foundation would be the executing agency for the project. The chief executive officer of SDF is the Managing Director (MD), who will be responsible for overall project management. SDF is an autonomous organization, which is guided by the rules and framework of its MAA comprising a General Body (GnB) and Governing Body (GB). The GnB comprises 20 members representing the Government (7), NGOs (8), civil society and academia (4), and the MD of SDF (ex-officio). The GnB is responsible for approving the annual budget and the work program of SDF. From the GnB, a GB comprising nine members has been formed. The GB comprises Government officials (2); NGO officials (3); one senior researcher from a leading research organization-Bangladesh Institute of Development Studies (BIDS); the chief executive of the apex micro-finance organization-PKSF; the Chairperson and the MD of SDF. Except for the MD, all members of the GB serve for two years but are eligible for re-election for an additional term. The GB appoints the MD.
SDF will be responsible for the overall project coordination, as well as promotion, appraisal, financing, and supervision of sub-projects. Broad administrative and financial powers for the implementation of the project have been delegated to the MD.
SDF initially will have about 17 professional staff. There are three sections under the MD headed by General Managers (GM). These sections are: Program, M&L, and Finance and Administration (F&A). GM Programs will be responsible for the IC campaign, institutional development at the local level, and preparation and implementation of CAPs. GM M&L will be responsible for the establishment and operation of a Management Information System (MIS), process monitoring, and impact evaluation. GM F&A will be responsible for financial and administrative matters, including procurement. Each of the GMs will have Managers for each of the areas of activity mentioned above. The organizational structure of SDF and the roles and responsibilities are described in the OM.
The rules and procedures which will guide the implementation of this project are described in the project's OM. The SDF will contract support organization to assist with field level implementation.
Support Organizations: SDF will contract two competent POs, referred to in this project as Community Support Organizations (CSOs), one for each project district, to assist with the following activities: (a) information and communication; (b) institutional development of community groups; (c) preparation of participatory Community Action Plans; (d) supporting interested community groups with the preparation of community infrastructure sub-project proposals for submission to SDF for financing; and (e) supporting the community groups with the implementation of the sub-projects, including financial management. The SDF will contract two organizations to assist with the appraisal and supervision of the infrastructure sub-projects. These organizations are referred to in this project as Project Appraisal and Supervision Team (PAST). The implementation of the Social Assistance Program (SAP) will be carried out by four POs who will be selected based on their track records.
Together with the CSOs, the project will engage with local stakeholders at different levels in the project areas to create awareness about the principles of the project and its operating mechanisms. Based on the responses, the CSO will mobilize informal inclusive VDCs in the target villages. VDCs would comprise local government members of the UPs, school/college teachers, and representatives of the poor and women to oversee the community planning exercise, prioritization, implementation, and maintenance of the sub-projects. CSOs will collaborate with these committees in the identification of needs and priorities in terms of small-scale infrastructure and social assistance for the very poor and vulnerable groups, to be agreed on in a CAP. VDCs will be responsible for the review of the CAP and coordinate project activities.
-8 - Role of Community Groups: As a result of the prioritization process, the interested persons (including poor and women) in the villages will be supported in forraing interest-based Community Groups (CGs). Each CG will elect a Project Management Committee (PMC) which would be responsible for sub-project preparation, implementation and operation, and maintenance of small-scale infrastructure sub-projects. CG and PMC members will be trained in project preparation and supervision. CGs will be responsible for the implementation of community infrastructure works. A fundamental principle that the project will be testing is the extent to which communities will raise their own matching fund, in cash and kind for sub-projects, to build ownership and longer term commitment to success. It is also expected that the community-driven development process will help to establish a voice of the poor in a wider local governance context, either through representation or increased support and partnerships.
CGs interested in sponsoring sub-projects with matching contributions will prepare proposals with assistance from CSO and submit these to SDF for possible funding, provided these are in the initial menu of options selected under this project and complies with the eligibility criteria established in the project (Annex 2, Attachment 6). PAST would carry out appraisal and supervision of the sub-projects based on the check-list provided in the OM. PAST would also support the communities with technical and financial management. The PAST would recommend SDF to grant approval of eligible sub-projects and certify the release of funds for eligible activities.
Procurement: IDA financed procurement of goods and works (community sub-projects) will follow the Bank's Procurement Guidelines. Consultants and NGO services including training will be procured in accordance with the Bank's Consultants' Guidelines.
Infrastructure sub-projects would account for about 65 percent of the project costs followed by consultants and NGO services, and small quantity of goods. It is expected that approximately 1,800 small-scale community infrastructure sub-projects will be financed under the project in about 1,400 villages in the two districts. There will be a few pilot community utilities sub-projects.
SDF will have overall responsibility of procurement management and ensuring compliance with the Bank's procedures. SDF has prepared a draft Procurement Plan. Goods, involving small contracts that are unlikely to attract foreign bidders, will be procured through National Competitive Bidding (NCB) or shopping. Consultants and NGO services will be procured following quality- and cost-based selection, selection under fixed-budget, consultants' qualification, individual consultants, single-source selection methods.
IDA will carry out prior review of the following contracts: all goods contracts estirnated to cost US$ 100,000 equivalent or more each irrespective of procedures and the first contract each for procurement under NCB and shopping, regardless of value. All other contracts will be subject to post review by IDA. IDA's prior review will be required for consultants' (firms) and NGOs' contracts estimated to cost US$100,000 equivalent or more for firms, and US$50,000 equivalent or more for individual consultants. All community sub-project contracts will be subject to post review. Annex 6 provides more detail.
FinancialManagement: At SDF professionally qualified accountants would be responsible for overall financial management of the project. F&A unit is headed by a GM and includes one Manager and an Accounts Officer. The GM and the Manager have been appointed and the Accounts Officer will be appointed before implementation begins. The GM is an experienced chartered accountant. SDF currently follows the Accounting Manual of the government, which provides a system for transactional control over expenditure, basic book keeping principles and reporting. The financial management system in SDF
-9- is adequate to cover all project related transactions. The sources of funds (Government, IDA and community contributions) and use of funds are accounted for and reflected in the financial statements of SDF. Books of accounts are maintained using double-entry bookkeeping principles and on accrual basis. Separate books/records (cash and cash book ledger, trial balance etc.) is maintained at the SDF using Microsoft Excel and will soon move to an integrated computerized accounting system. A Financial Management Manual, which outlines the control and accountability frameworks adequate to meet project's financial management requirements, has been prepared. The financial management system at SDF will be computerized within the four months of project implementation. Transaction-based disbursement procedures will be applicable for withdrawal of funds from the Credit. Financial management at the community level will be carried out by a book-keeper of each CG who will be trained by SDF and the CSO. CGs would maintain simple accounts for the sub-projects implemented by them. The selection of the CG book-keeper and completion of training will be conditions of disbursement of the first tranche of sub-project funds. This is reflected in the Sub-project Financing Agreement (SFA) between SDF and the CG. A sample SFA is provided in Annex 2, Attachment 7. The SFA also requires that the CG adequately protects and maintains the assets created and/or purchased by the CG.
Flow of Funds: IDA funds will be channeled through the Ministry of Finance (MOF) to SDF which will maintain a Convertible Taka Special Account (CONTASA) in a commercial bank under terms and conditions acceptable to IDA. In addition, SDF may also access the credit directly from IDA. SDF will maintain a separate account in a commercial bank for funds received as Government contribution to the project. The Finance Division (FD) of MOF would provide IDA Credit and Government funds to SDF under a Subsidiary Grant Agreement (SGA). The MD or a designated official of SDF will be the authorized person to withdraw funds from the Credit.
Funds will flow from SDF to the communities under a SFA which will specify the terms and conditions for payment. PMC of the CG will be required to open sub-project bank account in the name of the CG. Beneficiary cash contributions would be deposited in the same bank account of the CG.
Disbursements Method: Disbursements from IDA credit would be made following IDA's current transaction-based disbursement procedures (reimbursements with full documentation or against Statements of Expenditure (SOE), and direct payments). Payment to the CG for approved sub-projects would be in three tranche specified in the sample SAF (Annex 2, Attachment 7). Payment of funds to the CG will be closely monitored to ensure that processing time does not adversely affect the execution of the sub-project implementation. Service standards (benchmarks) have been developed to monitor the turn-around time for funds transfer from SDF to CG. Regular feedback will be obtained from the MIS reports and the process monitoring reports in order to take corrective measures, if needed.
Auditing Arrangement: SDF would hire private auditor for annual financial audit under terms and conditions acceptable to IDA. The scope of the annual audit would include project accounts, special account and statement of expenses (SOEs). The audit reports would be submitted to IDA within six months of the end of each fiscal year. The audit will be carried out in accordance with International Standards of Auditing and the cost of the audit would be eligible for financing from Credit. The auditors would be selected in accordance with the IDA's guidelines for selection of consultants.
- 10- Process of Action Learning: The project will have in place process monitoring which will help SDF establish a regular action-learning mechanism among all stakeholders to scale up or influence other agencies to adapt successful methods and principles. The process monitoring system will allow SDF, along with key stakeholders, to carefully analyze implementation experiences after completion of the rounds of community mobilization, institutional development, and community project implementation. This will help refine the process itself and update the OM accordingly, as well as assess the performance of implementing partners.
Reporting and Mid-term review (MTR): SDF would subrnit to IDA quarterly progress reports on implementation progress against the project's output/outcome indicators. A comprehensive review of the project will be undertaken at the end of first year of project implementation to learn from experience and make necessary adjustments to the project design. This report would cover: (a) physical progress and financial expenditure; (b) progress against performance indicators; (c) problems faced during implementation and remedial actions taken; (d) findings of the process monitoring; and (e) social and environmental aspects. The comprehensive review report would also include an implementation plan for the following year.
A MTR would be carried out in December 2005, which would be an in-depth assessment of the project's progress. This review will provide an opportunity to reformulate design and approaches as appropriate. SDF would commission specific studies which would fonn the analytical base for the MTR. The terms of references for the proposed studies would be submitted to IDA for review. The proposed studies would be completed and reports provided to IDA three months before the MTR. SDF would be responsible for contracting and managing the consultants engaged for the proposed studies.
D. Project Rationale 1. Project alternatives considered and reasons for rejection: A number of alternative design options were considered for this project. The rationale for rejection of the different options is outlined below: a. Project size and duration The traditional investment project providing a single large loan to finance a five-to-seven year investment was considered but deemed inappropriate because of several innovative features of this project which needed to be tested before scaling up. These include: (i) direct financing of community groups; (ii) leveraging private sector finance for investrnents in community utilities; and (iii) application of performance-based contracts. Although Bangladesh has a number of successful community-based programs, direct financing of community groups is yet to be tested.
Given the "learning by doing" nature of the project, a Learning and Innovation Loan (LIL) was considered as a possible financing instrument for the project. However, the US$5.0 million limit of a LEL was considered too small an amount to implement and test the investment activities proposed under the project. b. Implementation andfinancingarrangements. The possibility of subsuming project components under existing or proposed stand-alone projects in education, health, rural transport, water and sanitation, etc. was explored. However, this approach was not considered sufficiently flexible to allow the innovation proposed under the project. The option of using PKSF was also considered, but rejected for the following reasons: (i) activities envisaged under the project extend beyond the core mandate of PKSF, which focuses mainly on wholesaling of micro-credit through NGOs; (ii) PKSF's institutional capacity is likely to be stretched by the burden of implementing SIPP; and (iii) a dedicated SDF offers a more independent and participatory structure for community and NGO participation.
The option of transferring project funds to NGOs, as intermediaries, for the implementation of the community infrastructure projects was considered but was not accepted because of the possibility that such an approach may create a dependency amongst the poor and thus could retard the longer-term capacity for the community to carry out such investments themselves.
Channeling funds to local government for financing social investment purposes was considered and rejected for this initial project for the following two reasons. In the current situation where the poor are not organized and generally lack "voice", there is a risk of elite capture of the resource at the local government level. The management capacity at the UP level is also limited. However, SIPP design includes institutional development at the local-level to enable the local government to participate in the project in an enabling and coordinating role. If there is evidence of positive partnerships between poor community groups and the local government, a follow-on project could consider financing community-driven development through local government.
2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). Latest Supervision Sector Issue Project l (PSR) Ratings l ______.______I (Bank-flnanced projects only) Implementation Development Bank-financed Progress (IP) Objective (DO) Expand horizontal and vertical Micro-finance II (0) S S outreach of ongoing successful micro-finance programs to reach the poor and micro-entrepreneurs.
Improve the capacity of the Bangladesh Integrated U S communities to improve the nutritional Nutrition (0) status of pregnant/lactating women, and children.
Extend financial services to the ultra Financial Services for the hard-core poor. Poorest (LIL) (0)
Improve and expand Non-formal Post-Literacy and Continuing S S Education (NFE) programs. Education (0)
Alleviate arsenic water contamination Arsenic Mitigation Water U S as a factor in the reduction of Supply (0) arsenic-induced mortality and morbidity.
Improve the livelihood of poor people Fourth Fisheries (0) S S dependent on fisheries resources.
- 12 - Promote participation of local Second Rural Roads and S S communities in establishing an Markets Project (0) improved, sustainable rural transport and trading infrastructure.
Other development agencies Enhance the capacity of, and Human Right and Governance opportunities for, women, men, and Program (I{UGO) children to demand improved (DFID-financed) governance and recognition of their rights.
Reduce rural poverty through Targeting the Ultra Poor economic and social advancement of (DFID-financed) the poor, specially the ultra poor.
Strengthen local governance capacity Sirajganj Local Governance in Sirajganj district. Development Fund (ongoing) (UNDP/UNCDF-financed) IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)
-1J - 3. Lessons learned and reflected in the project design: The project is based on the global experiences with social funds, community-driven projects, and country experience with community-based programs.
Global Lessons
* Direct financing of community groups has been shown to improve the effectiveness and cost efficiency of small infrastructure works. This is because communities themselves have most to gain from the proper use of resources. Although this modality has been well tested in many countries, it is yet to be tried in a properly-designed manner in Bangladesh. The project aims to test this approach. * Fund flow directly to the community helps ensure more access to this needed input, generates more capacity for managing and controlling funds, builds community confidence, and provides empowerment for out-sourcing contracts, and above all, increases accountability of the service providers to the community. * Service providers, including NGOs, need to be made accountable for project outputs and outcomes. Correctly aligned incentives help to improve both quality and quantity of services delivered. For this reason, outputs-based contracts that make payments based on performance (and not just inputs) will be introduced in the project. * The role of facilitators or change agents should be to provide information and create awareness about the services around the communities that they can access and how to access them. It is then that the communities can plan in their own way. * Global experience suggests that given the right incentives - in the form of subsidy transfers and/or credit options - the private sector can play a significant role in reducing the cost and improving the efficiency of service delivery. This is particularly the case for services where user fees are readily charged and cost recovery is feasible. The project will explore modalities for promoting increased involvement of the private sector in provision of services. * There should be simple, clear rules of business. These need to be widely disseminated and then consistently and transparently enforced. * Flexibility of the program design allowed the institutional arrangements to evolve and adapt to local needs and demands. * There should be a simple OM, independent monitoring system, computerized MIS, standardized financial management procedures, regular and rigorous auditing and quantitative and qualitative monitoring and evaluation.
- 14 - Country Lessons
* Experiences with several not-for-profit Foundations set up by the Government have shown that operational autonomy and an appropriate management team are critical factors in the delivery of services for the purpose of which the organization has been set up. Bureaucratic and political interference impede performance.
4. Indications of borrower commitment and ownership: The Government has provided funds for the initial establishment of SDF. To get a head start with implementation, recruitment of MD and core staff (three GMs and five Managers) has been completed, procurement of essential office equipment, and consulting services have been initiated. Rules and procedures for project implementation and financial management are in place. There is an agreement in principle that the Government will provide SDF a portion of the Government's expected contribution to the project after negotiations of the credit for this project. The Government would also consider an endowment to SDF, provided satisfactory progress is reported at the MTR. The Government's I-PRSP has recognized SDF as one of the institutional mechanisms to promote poverty reduction programs.
5. Value added of Bank support in this project: IDA's global experience of social investment programs has been drawn upon proactively to assist with the design of SDF's activities, roles, and responsibilities. Ongoing Bank participation will ensure that international experience continues to be applied within the project, and that sound international quality standards of monitoring, evaluation, and impact assessment are employed. By supporting the Project, the Bank would play a critical role during implementation as a catalyst, using leverage generated by its significant lending volume in Bangladesh and its recognized advisory capability to forge effective partnerships among Government, NGOs, and communities for sustainable service delivery. The Bank would be able to facilitate the sharing of regional information and experience among this project and three District Poverty Initiatives Projects in India and the Poverty Alleviation Fund project in Pakistan, thereby enhancing the quality of this project.
E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): 0 Cost benefit NPV=US$ million; ERR = % (see Annex 4) o Cost effectiveness * Other (specify) The project aims to set in motion a process of social mobilization and participatory planning by which the rural poor community would be able to articulate their priorities for community infrastructure and social assistance services. Consequently, project investments are for information and communication campaign and institution building at the national and community-level to facilitate demand-driven needs prioritization. This investment would help to empower communities to build social capital and improve local governance. The project would finance community infrastructure sub-projects identified and prioritized by community groups, as well as social assistance programs. These investments would significantly increase the level of economic activity. Knowledge, motivation, and access to public infrastructure, services and markets commonly called "intangible assets," are crucial factors for the economic productivity of individuals, as well as enterprises. The benefits produced by these assets can be summarized below:
- 15 - * Maintenance and improvement of transport and trade infrastructure will help reduce spoilage of perishable commodities through access to markets. Access to health centers and schools would also be improved. Better access to markets will generate economic benefits from market transactions, whereas access to health facilities and schools increases productivity, which in turn contributes to increased income. * Investment in safe drinking and sanitation, by improving the health of rural populations as well as reducing time spent, especially by women, in transporting water, will contribute to poverty alleviation and increase the productive capacity of rural people, particularly women. The benefits of improved water supplies (quantity and quality) on health outcomes are well-documented. These health benefits in turn lead to labor productivity and income gains via a variety of direct and indirect pathways. * The project will also contribute to employment and income generation in rural areas both directly (through improvement of infrastructure to give efficient access, as well as involvement of local populations in the construction of basic infrastructure funded under the project). The indirect contribution would be through the new and/or additional economic opportunities generated by local physical infrastructure improvement and improved capacity for economic activity due to better health and water supply.
Given the problems of quantification of social benefits, the present economic analysis does not compute an overall economic rate of return of the project, but rather demonstrates the economic justification of undertaking the community-driven development actions described above by carrying out analysis of selective infrastructure such as water supply and sanitation and small markets.
Economic analysis for community-driven investments in water and sanitation systems indicate that the systems can be viable under reasonable assumptions on incremental time savings, as well as working days generated by their implementation. Based on the spoilage savings analysis, the economic IRR for rural markets have been estimated to be 30.6 percent.
2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR = % (see Annex 4)
Fiscal Impact: The estimated cost of the project over a four-year period is US$22.54 million. Of this amount, about 65 percent will be spent for community infrastructure sub-projects. The beneficiary community would be responsible for the maintenance of these sub-projects. It is estimated that community contribution in the financing of the infrastructure sub-projects will amount to about 12 percent of the total project cost. It is expected that the infrastructure sub-projects under the project would substantially improve the productivity of the existing rural infrastructure by bridging critical gaps and sharing of O&M cost by the community would have a beneficial impact on the budget. Similarly, if the community utilities pilot sub-projects are successful, there would be some budgetary impact, as less of scarce public funds would be needed for scaling up this model of private participation in infrastructure development. During project preparation special attention was given to keep the recurrent cost of SDF to a minimum of about 5 percent of the total project cost. If SDF performs satisfactorily and is prepared to scale up the community-driven development, it could be another mechanism for the Govemment to channel funds for effective poverty focused activities.
- 16 - 3. Technical: SDF will finance only technically feasible, simple, labor intensive community infrastructure sub-projects which can be easily maintained and operated by the conmmunities. Technical standards will conform to designs in existing Bank, NGO-assisted projects, and best GOB practices to ensure sectoral coherence and compatibility. All sub-projects will be screened by qualified staff in PAST and SDF, and communities can contract technical assistance to assist in design and implementation of sub-projects. Training programs are also offered under the project to develop community organizations capabilities to prepare, implement, operate, and maintain sub-projects. The social assistance prograrn will be implemented by competent NGOs selected by SDF.
4. Institutional:
4.1 Executing agencies: SDF will be the main executing agency of the project. (Details of its governance structure is provided in Section C4.) 4.2 Project management: SDF would have the overall coordination role for the project. The MD would be responsible for the day-to-day management of the project and be accountable to the GB of SDF. The operational autonomy of SDF would allow the management team of SDF to remain flexible and adapt, based on implementation experience. SDF would be responsible for project coordination. monitoring, financial management, procurement, disbursement, and audit. SDF will address any problems faced by any of the service providers in carrying out their responsibilities. The staff of SDF would be selected through open competition and be professionally competent. SDF will appoint competent organizations to assist communities to mobilize and prepare sub-project proposals; assist with the appraisal and supervision of the community sub-projects; and carry out the social assistance program. SDF will have independent organizations carry out process monitoring and impact evaluation. 4.3 Procurement issues: According to the Country Procurement Assessment Report (CPAR) of 2002, procurement is a generic problem in Bangladesh. Based on the CPAR recommendations, the Government has embarked upon a public procurement reform program through the Public Procurement Reform Project (PPRP), with technical assistance from IDA. The project provides for procurement training to officials from the public sector, as well as the private sector.
At the project level, the procurement issues involve appropriate utilization of funds by community groups and selection of consultants and NGOs by SDF. SDF will have overall responsibility for procurement management. However, community sub-projects, involving about 65 percent of the project costs to be used in about 1,400 villages in the project districts, will be implemented directly by the CG through their PMC. As mentioned before, the newly recruited staff of SDF has no previous experience with procedures for procurement of goods and services financed under IDA Credit. SDF has recruited a Procurement Manager. The SDF staff will be required to build expertise in procurement. Based on the review, there are substantial risks associated with procurement. To minimize procurement associated risks, the following arrangements have been made:
(a) in accordance with the sub-project financing agreement between SDF and CG (represented by PMC) for each sub-project with a ceiling of US$8,200 equivalent, SDF
- 17 - will disburse the funds to the community in three installments against certified progress/completion reports by PAST; (b) community groups will be provided with hands-on training by CSO to handle small procurements. The staff of SDF already took a short course on procurement. Specific training on community contracting will be provided once the CSOs and PAST are recruited; (c) SDF formed a Procurement Core Team (PCT) to deal with all procurement matters; (d) SDF identified a procurement consultant whose services will be procured for about six person-months spread throughout the project period; (e) the Bank would conduct sample ex-post reviews; and (f) the project provides for procurement audit by independent auditors. 4.4 Financial management issues: There are no significant country issues that may affect project implementation. The generic problem of lengthy procedures in releasing govemment counterpart funds is not expected to be an issue in this project because it has been agreed that GOB will provide its contribution to SDF in two installments. The first installment will be provided within 30 days after completion of negotiations for the Credit for this project and the second one by June 30, 2004.
The risks affecting financial management are assessed "moderate" on three considerations: (i) SDF's finance team does not have sufficient exposure to fiduciary safeguards required for CDD projects; (ii) CGs may fail to comply with the terms and conditions of the sub-project financing agreements (SFA); and (iii) the CSO, responsible for capacity building of CGs may fail to train CG groups in proper maintenance of sub-project book-keeping and maintenance of accounts. To mitigate these risks and build the financial management capacity at SDF and community levels, the following arrangement have been made/agreed:
* SDF has appointed qualified staff in finance and accounting who have had preliminary training on CDD Financial, Procurement and Disbursement arrangements, and more such training has been planned; * The appointment of former Controller and Auditor General as MD of SDF will provide additional guidance for ensuring appropriate fiduciary controls for the project; * The SFA includes several safeguards to address the risk of non compliance with the terms and conditions of the agreement: (a) eligibility criteria for payments, (b) remedial clauses in case of default with the contractual obligations, and (c) completion of pre-specified physical targets; * the FM Manual of the project includes simple accounting procedures for maintaining sub-project accounts at CG level. SDF has also prepared a separate simple manual outlining accounting policy and procedures for CGs. 5. Environmental: Environmental Category: B (Partial Assessment) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. The majority of the sub-projects in SIPP are not expected to lead to environmental impacts of any significance. There is the possibility that a small number of sub-projects may have environmental ramifications, or result in adverse impacts in case mitigation measures are not adequately implemented. An environmental assessment of SIPP was conducted and accordingly, all community infrastructure sub-project proposals submitted to SDF will be subject to a series of environmental evaluation exercises in order to:
- 18 - (a) screen projects with significant negative environmental impacts; (b) mitigate potential negative impacts through changes in sub-project design, location or execution; (c) prevent or mitigate negative cumulative impacts; (d) enhance the positive impacts of sub-projects; and (e) prevent additional stress on environmentally sensitive areas.
To meet these objectives, the project's Environmental Assessment (EA) Manual provides for: (a) a methodology and administrative structure for environmental management; (b) forms for environmental management of community infrastructure sub-projects; and (c) an environmental supervision and monitoring plan. These elements are included in the project's OM. 5.2 What are the main features of the EMP and are they adequate? The inputs to manage the environmental impacts of community infrastructure sub-projects constitute the EA Manual for the project. More information on the EA Manual and the proposed arrangements for management, including supervision and capacity-building, are given in Annex 2, Attachment 10. 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: May 1999; updated August 2002
5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted? Consultations were held with concemed departments of C;OB, NGOs and potential members of CGs, and tribal population in the project areas. The final updated EA Manual reflects findings of these consultations. During consultations, there were some suggestions on further simplification of the forms in the EA Manual. These have been revised. 5.5 What mechanisms have been established to monitor End evaluate the impact of the project on the environment? Do the indicators reflect the objectives ancl results of the EMP? The EA Manual sets out a series of steps for environmental assessment of sub projects. The environmental assessment procedure consists of a number of steps, specified in this nmanual: Step one: Filling out the Routing Slip (Fonn 1)by PMC Step two: Filling out the Environmental Sensitivity Form (Form II) by CSO Step three: Filling out the Environmental Screening Form (Fornm III) by CSO Step four: Filling out the Environmental Review Form by CSO, or Step five: Filling out the Limited Environmental Assessment Form by environmental specialist. Step six: Clearance of environmental screening, and review or assessment, by SDF.
The EA Manual contains-formats for ES, ER and LEA along with an Instruction Manual for EA of community infrastructure works sub-projects in SIPP. The Manual also contains guidelines on independent environmental auditing of SIPP sub projects and monitoring of cumulative impacts. The institutional arrangements suggested by the EA Report sets out appraisable indicators which will reflect the success or failure of environmental management of the sup projects. See Annex 2, Attachment 10 for a brief account of environmental supervision, monitoring and auditing.
19- 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes.
A Social Assessment (SA) study was carried out to gain operationally relevant understanding of the social underpinnings and incentives determining behavior and needs of various actors, especially the poor communities, vulnerable groups, indigenous population, local rural elites, local government agencies, line departments, NGOs, district administration, and the private sector. The study identified the following key social issues relevant to project objectives: (a) exclusion of poor women, female-headed household, physically handicapped people, and tribal groups from mainstream development; (b) problems of malnutrition of children and high female mortality; (c) overall lack of awareness about health, nutrition, education and human rights; (d) lack of employment opportunities; and (e) lack of an organized "voice" to demand accountability from service providers. The findings of the social assessment and consultations are reflected in the targeting strategies (Annex 2, Attachment 8) and project components.
Consultations in the two districts revealed that there is shortage of programs for the development of vulnerable populations. The existing micro-finance program is not targeted to the poorest and safety net programs focus only on short-term survival, rather than development of the vulnerable groups. NGOs are providing social assistance programs on a limited scale and do not cover the needs of vulnerable population.
According to the 1991 Census, tribal populations in Gaibandha and Jamalpur come to 8,600, which constitutes 0.2 percent of the total population of the two districts. In rural areas, the tribal population is 0.3 percent in Gaibandha and 0.1 percent in Jamalpur. The Tribal Development Plan (Annex 2, Attachment 12) provides more details.
Action Plan for Women's Empowerment
The project will undertake activities that meet the needs and priorities of poor women, such as, identifying formats and media that reach poor rural women; facilitating planning capacity and group formation of women; recruitment of women workers, as well as gender training, of all staff of SDF, CSO, and PO. Specifically, the following actions will be taken:
* incorporate gender mainstreaming strategy in IC * recruit women at all levels and provide gender training to all staff * ensure significant membership of women in VDC and CG, and their active participation in proposal preparation, implementation, and monitoring * collection of gender-disaggregated data, as well as development of indicators.
Social Development Outcome/Outputs
The project is not expected to produce significant social development outcomes in four years. However, a process would be initiated which would, over time, lead to improved quality of life of the poor and vulnerable groups through enhancing their access to social and economic opportunities. These outcome would be measured by the following: (a) capacity for collective decision-making and action; (b) ability to design and implement sub-projects; (c) ability to access social and economic infrastructure and services; (d) strengthening social capital as measured by community cohesion and inclusion in VDC and CG; and
- 20 - (e) enhanced empowerment of vulnerable groups (participation in community decisions and social and legal awareness). Details of expected outcomes are provided in Annex 1 and indicators in Annex 2, Attachment 8. 6.2 Participatory Approach: How are key stakeholders participating in the project? Social assessment for the project included household surveys, focus group discussions and workshops with stakeholders at six districts. Furthermore, nationwide consultations with NGO and civil society representatives were also organized. The project will be initiated with national and local level information and communication campaign, which will continue during implementation. NGOs also will be involved as CSOs for facilitating institutional development at the village level. CSOs will be responsible for facilitating VDC, which would consist of at least 50 percent from the target groups (women, poor, and vulnerable), and formulation of participatory CAP, which will map infrastructure and social assistance needs. CSOs and VDC will organize public meetings regularly so that CAP is developed and implemented in a transparent and inclusive process, which prioritizes the needs of vulnerable. These public meetings will also facilitate participatory monitoring of infrastructure and social assistance results.
6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? The project will be initiated with national and district, sub-district, union and community workshops. CSOs, POs, other NGOs, and civil society representatives will be key participants at these consultations. POs will facilitate implementation of the project at the local level. The roles and responsibilities of the CSO and PO are described in the OM of the project. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? The following institutional arrangements have been undertaken:
* VDC will include representatives from local government and at least 50 percent of the members from the target population, e.g. women, the vulnerable and tribal groups. This would develop capacity and mutual accountability between the local/government and vulnerable population. This would further increase ownership by the vulnerable groups and ensure outcomes that meet their needs. * VDC, together with CSO will develop the CAP and monitor the progress of infrastructure sub-projects and socialUassistance. These feedbacks would assist in redesigning SDF interventions. * There will be continuous IC, so that vulnerable groups are aware of the services and be able to access social and economic opportunities provided by the project. * SDF, PO, and CSO will pay considerable attention to staff selection, recruitment process, staff compensation packages, and terms of employment. These would ensure that staff have expertise and incentives to design and implement a community-driven project for sustainable development of vulnerable groups. 6.5 How will the project monitor performance in terms of social development outcomes? The project has identified process and outcome indicators which will be reviewed through a monitoring and evaluation learning exercise. Reputed extemal agencies will be contracted for carrying out process monitoring and impact evaluation through the life of the project. There will be a baseline and agreed indicators to monitor the social development outcomes. Performance-based contracts for service-providers will be introduced in the project. Project appraisal and supervision teams will be contracted to facilitate supervision of the implementation of CAP and social assistance programs.
- 21 - 7. Safeguard Policies: 7.1 Are any of the following safeguard policies triggered by the pro ecl?
Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) 0 Yes 9 No Natural Habitats (OP 4.04, BP 4.04, GP 4.04) C9 Yes * No Forestry (OP 4.36, GP 4.36) ( Yes * No Pest Management (OP 4.09) ( Yes * No Cultural Property (OPN 11.03) ( Yes * No Indigenous Peoples (OD 4.20) * Yes U No Involuntary Resettlement (OP/BP 4.12) ( Yes * No Safety of Dams (OP 4.37, BP 4.37) ( Yes * No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) U Yes * No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* () Yes * No
7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. The project has been designated as Category B, i.e. with moderately significant environmental impacts, which can be remedied or mitigated. It is recognized that the large number of sub-projects (approximately 1,800) will include many that have only positive or no environmental impacts, or have only minor impacts (Category C). For this reason, a simple screening process has been devised to filter out category. A sub-project, that may potentially cause significant irreparable environmental impacts. Such sub-projects will not be eligible for financing under the project. In addition, guidelines have been prepared to avoid cumulative effects of numerous small scale sub-projects, that when taken on an individual basis, are exempt from EA because of their low impact, but as a whole may have significant environmental impact. These guidelines are an integral part of the SIPP operational procedures and documented in the EA Manual.
No involuntary resettlement or impacts on cultural property are envisaged under the project, and the OM and EA Manuals clearly state that those sub-projects which may require land acquisition and involuntary resettlement would not be eligible for funding. Some investments may involve donated land. Some concrete measures are being taken in the project to ensure that land contributions are truly voluntary, that undue social pressure is not exerted on individual land owners or operators, and that all related transactions are conducted in a transparent manner. The project's OM includes simple guidelines for Land Donation, which includes the consultation process, detailing minutes of village consultation, agreements reached, names and addresses of the donors, details about location of land, whether the site is free of squatters, identified by the community; and certification of donation from each donor. The transfer of voluntary contribution of land will be formalized through a simple Memorandum of Understanding (MOU) between the designated member of the community group and each and every landholder contributing the land for the sub-project. Construction of the sub-project involving donated land will start only when the MOU has been signed. A sample MOU is included in the Operational Manual.
A Tribal Development Plan (TDP) has been developed and finalized in consultation with tribal population. Details of the TDP are in Annex 2, Attachment 12.
- 22 - F. Sustainability and Risks 1. Sustainability: Sustainability issues relate primarily to project outcomes and sustainability of SDF. SDF would be sustainable if key stakeholders (Government, NGOs, community organizations, and donor organizations) find that it has contributed to good practices in improved local governance, community financing of basic services, capacity building/knowledge transfer to communities, communication, and acting promptly on feedback. It will build partnerships with NGOs to assist in institutional development of community organizations. It will have a process monitoring system to receive feedback and respond. The operational system designed under the project will ensure community financing and sustained O&M of the investments. SDF's sustainability also depends on its continued autonomy which is ensured by an independent GB and transparent operating rules and procedures. If project outcomes are successful, the GOB is expected to provide an endowment for continued services of the organization.
The sustainability of the community infrastructure sub-projects and their benefits would be ensured through the demand driven approach, community contribution towards the cost of the project and community managed implementation. The sustainability of the impacts of the social assistance programs can be ensured through the building of social and legal awareness, literacy and occupation skills of the poor and vulnerable. The application of performance based contracts would help to ensure that the social assistance services eligible under the project will be properly delivered.
The VDC can be sustained through successfully establishing operational linkages with local government, line departments, NGOs, and the private sector and through exploiting the potential of this institution to build local leadership. The CG is likely to be sustained once the power of collective action is internalized by the group. The training of the community groups in identifying and prioritizing their needs would empower them to demand quality and timely services from the service providers. The skills obtained from the training would remain with the beneficiaries beyond the lifetime of the project.
2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1):
Risk Risk Rating Risk,Mitigation Measure From Outputs to Objective SDF operations and targeting are subject M SDF will have a competent MD and maintain to political interference. an independent GB.
Well-defined eligibility criteria for sub-project financing will been developed.
SDF will not have operational M . SDF will have a continuous process monitoring mechanisms to review feedback from the system and an MIS to ensure feedback and key stakeholders, take appropriate responses to it. actions. The project's OM will be continuously revised to reflect revisions to the operating guidelines based on feedback.
An efficient financial and disbursement mechanism will ensure quick flow of funds to the communities.
-23 - Elites in the community or other political S SDF will appoint experienced CSO for forces may disrupt the social information dissemination and social mobilization and organizational mobilization; these organizations would have processes. an excellent track record in these activities and experience in addressing such social risks.
Project intervention may not benefit the M Application of eligibility criteria to ensure poo poorest and other vulnerable groups. benefits; training in participatory approaches, process monitoring to ensure participation of the poor.
Commitment to the project at the level of M SDF to regularly and widely communicate and government and other key stakeholders inform stakeholders about the key lessons and wane. successes about the project. From Components to Outputs SDF will not be able to hire competent M SDF will advertise widely and have transparen staff and services to carry out project selection and well-defined selection criteria. activities. The GB of SDF will have delegated the hiring and firing powers to the MD.
Performance-based contracts for service- providers will be used.
SDF will not have adequate procurement S PCT have been formed; Procurement Manager management capacity. recruited; Procurement consultant selected; training of staff, CSOs, PAST and PMCs will be provided.
Communities cannot raise matching S Support organizations will assist communities contributions. in developing structures for decision-making.
Communities will not be able to use the S CSO, PAST along with SDF, will provide fuids effectively. training to the CG in fund management. In addition, PAST will supervise and provide advice as necessary on implementation.
Infrastructure built are not maintained S Sub-project approval checklist will include properly. appraisal of community's plans for operation and maintenance. Overall Risk Rating M Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk)
3. Possible Controversial Aspects: None
-24 - G. Main Credit Conditions 1. Effectiveness Condition
(a) the Development Credit Agreement has been duly signed, authorized or ratified by the Borrower; (b) the Project Agreement has been duly authorized or ratified by SDF; and (c) the Subsidiary Grant Agreement has been executed on behalf of the Borrower.
2. Other [classify according to covenant types used in the Legal Agreements.] Management and Operations of SDF
(a) SDF shall, at the end of each quarter of the fiscal year, furnish to the Association a progress report in form and substance satisfactory to the Association, showing implementation progress against the project's output and outcome indicators;
(b) SDF shall:
(i) no later than August 31, 2004, carry out, in accordance with the terms of reference satisfactory to the Association, a comprehensive project implementation review; aimed at: (A) documenting progress toward objectives; and (B) identifying obstacles to project implementation and formulating remedial steps; and (ii) promptly after completing such review, carry out recommendations arising out of said review, taking into account the Association's comments thereon.
Financial Covenants
(a) SDF shall maintain records and account, adequate to reflect in accordance with sound accounting practices its operations and financial condition and to register separately the operations, resources and expenditures related to the Project.
(b) SDF shall:
(i) have its records, accounts and financial statements in respect of the Project for each fiscal year audited, in accordance with auditing principles consistently applied by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of the financial statements in respect of the Project reflecting the records and accounts referred to in paragraph (a) of this Section, for such year as so audited; and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning such records, accounts and financial statements, as well as the audit thereof, as the Association may from time to time reasonably request.
(c) SDF shall prepare, in accordance with guidelines acceptable to the Association, and furnish to the Association not later than 45 days after the end of each calendar quarter, a Financial Monitoring Report for such period, which:
- 25 - (i) sets forth actual sources and applications of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and applications of funds for the Project for the six-month period following the period covered by said report; and (ii) shows separately expenditures financed out of the proceeds of the Credit during the period covered by said report and expenditures proposed to be financed out of the proceeds of the Credit during the six-month period following the period covered by said report; and (iii) sets forth the status of procurement under the Project and expenditures under contracts financed out of the proceeds of the Credit, as at the end of the period covered by said report;
(d) SDF shall furnish the first Financial Monitoring Report to IDA no later than February 15, 2004, covering the period from the incurrence of the first expenditure under the Project through the end of December 31, 2003; and thereafter each FMR shall be furnished to the Association not later than 45 days after each calendar quarter, and shall cover such calendar quarter.
H. Readiness for Implementation E 1.a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. 2 1. b) Not applicable.
2. The procurement documents for the first year's activities are complete and ready for the start of project implementation. 2 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. D 4. The following items are lacking and are discussed under loan conditions (Section G):
1. Compliance with Bank Policies N 1. This project complies with all applicable Bank policies. FI 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies.
Wahida Huq Constance A. Bernard Frederick T. Temple Team Leader Sector Director Country Director
- 26 - Annex 1: Project Design Summary BANGLADESH: Social Investment Program Project
-~ ~~ ~ ~- ~~~6.. KePr&or ance,. 'Clta'CollectIoni Strategy rierarchWysof Qb'jetit ' 1 J -4 -. . Collectio Strateg Critical Assumptions Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) Increase social and economic Increased provision of rural Survey reports; opportunities of poor and transport infrastructure and Annual economic update; vulnerable groups through water and sanitation facilities CAS Progress reports. greater community and private with mobilization of local sector participation. resources.
Increase in community implemented and maintained rural infrastructure and water and sanitation facilities.
Improved targeting and incidence of social safety net programs.
Greater coverage of rural areas with respect to energy access.
-27 - -~~~~~Y' ~ evPei-frt n4?', ~'Da JXC'6IIetidfJStrafg &X§Z@i*g4'3g1t Xi~!~A'. : I -2-- j i Critical Assumptio-ns Project Development Outcome I Impact Project reports: (from Objective to Goal) Objective: Indicators: Develop effective and Minimum 50 percent of SDF Progress Reports. No major macroeconomic efficient financing and community infrastructure shocks or natural disaster institutional arrangements for sub-projects effectively MIS Reports. occur to constrain or eliminat improving access to local managed and maintained by project achievements. infrastructure and basic conmmunity groups by EOP. Process monitoring reports. services through the implementation of At least 50 percent of Impact Evaluation Report. SDF operations and targeting community-driven communities continue to remains free of political infrastructure works and social prioritize needs using interference. assistance programs. participatory processes at least one year beyond sub-project completion.
At least 50 percent VDC Targeting strategy benefit the formed continue to manage poor and the vulnerable. activities in inclusive manner by EOP.
At least 10 percent of the Community mobilized into community groups mobilized effective and inclusive local under the project are able to institutions. leverage external resources to support additional needs by EOP.
Increased awareness and Participatory planning opportunities to reduce methods and appropriate vulnerability (such as, 50-60 eligibility criteria for percent of participants in the sub-project/program appraisa SAP are aware of their basic and resource allocation rights; use health services, procedures would be applied. such as immunization, pregnancy related care; access to wage/self employment).
Community-driven development principles adopted as a policy, local planning, and implementation of small scale infrastructure by EOP.
-28 - ~~. *~~- ~ jXy,P* drranc ~ Data%blIIecti0n4StFitRgy-. I A ~ ***r tjHierarchyjqf,QbJeWVk .- , '. . _AdarmI mptiions-' Output from each Output Indicators: Project reports: (from Outputs to Objective) Component: SDF strengthened and Compared to 2003 baseline, Mid-term review and impact SDF will appoint competent providing high quality SDF realizes at least 40% evaluation reports. staff, support organizations. participatory planning, improvement in ancd service providers to assist management, M&L and IC Organizational Capacity with the identification and services to support the Assessment ratings (based on prioritization of sub-projects. program. agreed measuring instrument) by MTR and 70 percent by SDF will have in place EOP. operational mechanisms to Beneficiary Assessment review and funds to respond in At least 50 percent of targeted Surveys. a timely manner to the communities have received MIS Reports. cornmunity's proposals. and understood project messages through IC by MTR SDF Quarterly Progress and 80 percent by EOP. Reports. IDA, Supervision Reports. SDF adopts a policy of disclosure of annual financial and performance audits.
Inclusive village and At least 50 percent of the Reports and surveys Elites in the community or community level institutions stakeholders are aware of the conducted by the independent other political forces do not formed, strengthened. main project principles: monitoring and evaluation disrupt the mobilizing and inclusiveness, demand-driven agency, using socio-economic organizing processes. through participatory indicators and beneficiary planning, and community assessments. CSOs can sustain effective contribution by EOP. assistance to communities Reports provided by the CSO, while increasing coverage. At least 500 VDC formed and PAST and participating functional by MTR and NGOs. Cooperation from the local another 1,400 by EOP. governments and local IDA supervision mission administration. 50 percent of VDC have active reports. participation of poor and Communities are interested in vulnerable groups throughout participating in the programs. the project.
At least 50 percent of the poor villagers actively participate in village meetings on needs identification and prioritization.
80 percent of community action plans are responsive to needs/priorities of poor and women.
At least 80 percent of the CG formed in the project are inclusive.
- 29 - Community action plans in Community-driven Comparison of standard cost Continued political suppor small-scale infrastructure and infrastructure investments and project cost data. local and national level for social services are successfully compare favorably against community-based and priv implemented. current approaches in terms of Quarterly and annual reports sector approaches. costs, benefits, and of SDF. sustainability by EOP. Communities able to Reports and studies of the implement and maintain gc Roughly 1,400 sub-projects in independent monitoring quality sub-projects. small-scale infrastructure agency. cornpleted by EOP. Local economy offers MIS reports. appropriate employment 80 percent of sub-projects opportunities. completed in one year satisfactorily operating and Contracted organizations maintained by EOP. provide quality services.
At least 80 percent of members of vulnerable groups in each project village benefit from social assistance programs.
Private Sector/NGO/ Regulatory framework and Consultant's reports SDF selects a competent T Communities collaborate in model contracts for private MIS team. building, operating, and provisioning for utilities maintaining basic utilities. developed.
- 30 - Project Components / Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) 1. Strengthening of SDF US$1.91 million SDF Quarterly Progress Reports. Communication strategy well designed. 1.1 Information and IDA supervision and Communication. disbursement reports. SDF has high calibre 1.2 Capacity-building management team. 1.3 Monitoring and Learning Financial Management Reports. 1.4 Project Management Support MIS reports.
2. Institutional Development at US$0.38 million SDF Quarterly Progress Reports. IC campaign has good outreach. Community Level IDA supervision and CSO teams are well-trained in 2.1 Awareness raising and disbursement reports. project rules and criteria. information sharing 2.2 Institutional development and Financial Management Reports. CSO able to motivate pianning communities to participate in MIS reports. needs assessment and planning activities. Stakeholder and beneficiary assessment.
3. Implementation of US$19.35 million SDF Quarterly Progress Reports. CSO able to mobilize interested Community Action Plans persons to form CG. IDA supervision and 3.1 Small-scale Commnunity disbursement reports. Communities develop capacity to Infrastructure Works decide on priorities and raise 3.2 Social Assistance Program Financial Management Reports. matching contributions.
MIS reports. Infrastructure implementation coincides with dry season. Stakeholder and beneficiary assessment. Timely flow of funds.
Specialized NGOs are effective in delivering services to vulnerable groups.
4. Pilot Private Financing in US$0.89 million Consultants Reports and MIS NGO/Community/Private sector Community Utiliffes reports have capacity and willingness to innovative financing, iimplementation, operation, and nmaintenance arrangements.
- 31 - Annex 1: Attachment 1
Relationship between Project Components and Implementation Arrangements
(a)Strengthening of SDF
Recruitnent of core SDF staff Appointment of CSO
Strengthening of SDF and support to implementation *Inforrnation and communication, institutional developmient\ . *~~~Output and Process Monitoring and Input Evaluation> : *> *~~Financial Mtanagement and Administration/ -Sub-project funding and sub-contracting of services/
ldeeopnta (c) Implementation of the community Pln level (by CSOs)
Implementation of Cl sub- Mobilization, identification ...... project by CG in Yr. I planning of Yr. I villages villages
Implementation of CI sub- Mobilization, identification ...... project by CG in Yr.2 planning of Yr.2 villages villages
------__ _ p I mplementation of SAP by PO in Yr. 1 villages
() Piot Prvate Parc4aion-_ in ------Implementation of SAP by Community Infrastructure PO in Yr 2 villages
- 32 - Annex 2: Detailed Project Description BANGLADESH: Social Investiment Program Project
The objective of the project would be achieved by: (a) setting in motion an inclusive demand identification and follow-up process for social development needs which will contribute to improved institutional development at the village level; (b) demonstrating cost effective and participatory means for provision of basic services; and (c) strengthening the SDF to identify emerging successful procedures for social development to influence and assist in scaling up. The project would be implemented over a period of four years at a total cost of US$22.54 million. T'his cost includes US$0.15 million for the implementation of the EA and TDP. The components are described below with base cost estimates.
By Component:
Project Component 1 - US$1.78 million Strengthening of SDF and Project Management Support
This component will ensure that SDF will be able to facilitate dissemination of project information, community mobilization and local level planning, provide timely and adequate financing for community-driven infrastructure and social assistance programs, and carry out monitoring and evaluation. The component will also build SDF's capacity to learn from project implementation, scale-up, and institutionalize successful approaches to community-driven development. These activities will be carried out through four sub-components described below.
(a) Information and Communication (IC): Specific objectives of the IC program at the national level are to:
* provide timely and well-targeted information about SDF's philosophy and mandate and the project to the primary stakeholders at the national level (NGOs, the private sector, and local and national government bodies); * promote a responsive and cooperative environment among national level organizations and the support and participating organizations of SDF, which would motivate them to sustain the new behavior; * enhance the quality of project design and implementation by collecting, documenting, and disseminating knowledge gained by communities regarding good practices and lessons learned; * contribute to creating and developing strategic partnerships through active recognition of the roles and contributions of various stakeholders in its media initiatives.
The project will finance the cost of: (a) technical assistance to refine the IC strategy and develop communication materials for the project; and (b) equipment, training, workshops, and preparation of appropriate posters, leaflets, radio spots, and videos for dissemination throughout the project areas. (See Attachment 2 for details.)
(b) Capacity-Building: Since SDF is a new organization, its staff would need training in developing a shared vision for the organization, building a cohesive team, learning about operational procedures, resource management, appraisal (including environmental screening of sub-projects), and supervision of project activities. There would be a technical assistance of three person-months to help with the overall management of the project in general, and development of SDF policies and modalities for good governance, management of human and financial resources, and monitoring of project performance in
- 33 - particular. The project would finance management training for SDF staff on procurement, service contracting, financial and administrative procedures, and environmental assessment.
(c) Monitoring and Learning (M&L): The M&L would support project coordination and supervision and help strengthen the effectiveness and quality of project operations. SDF would establish a computerized MIS for regular input and output monitoring. Together with the internal monitoring process, process monitoring and impact evaluation will also be carried out. SDF would contract reputed institutions for process monitoring and impact evaluation. A baseline survey will be carried out during the first year of the project by the impact evaluation institution. A comprehensive review of the project will be undertaken at the end of first year of project implementation. A mid-term review of the project will also be carried out at the end of second year of project implementation. The project will finance the establishment of MIS, consultant services for process monitoring, impact evaluation and special studies. SDF would finalize the selection of the institution to carry out process monitoring and impact evaluation by March 31, 2003. (See Attachment 3 for further details.)
(d) Project Management Support: The project would finance salaries and benefits of incremental staff of SDF, rental of office space, purchase of vehicles, office equipment, furniture, and fixtures, including computers and requisite software. Staff salaries and operating costs would be eligible for financing on a declining reimbursement percentage basis. The project will finance the cost of support services (such as, community support, appraisal and supervision of sub-projects and programs, and implementation of a social assistance program) which will be contracted by SDF. To provide results oriented incentives, performance-based contracts will be used.
Project Component 2 - US$0.36 million Institutional Development at Community Level
Two CSOs will be responsible for creating awareness of project principles and mechanisms at the district, sub-district, union, and village level, mobilization and institutional development, and planning at the village level. These activities will be carried out through the following two sub-components.
(a) Awareness raising and information sharing: The project will finance the cost of CSO services for raising awareness, motivating, and engaging the excluded poor to participate in development of sustainable social and economic capital assets, as well as changing attitudes and behaviors among local stakeholders. The information sharing and communication activities would contribute to: (a) improved information flow among and between stakeholders; (b) better informed community actively participating in project design and implementation; and (c) improved accountability and transparency regarding roles and responsibilities of stakeholders participating in the projects.
(b) Institutional development and planning: The project will finance the formation and strengthening of local-level organizations and preparation of local-level plans by CSO. The project will support the formation of VDC for coordination of local development and assisting with the preparation of the CAP. The CAP will prioritize infrastructure activities selected by communities on the basis of a given resource-base and social assistance needs for the poorest. The need for different types of social assistance services would be a priority area of community action planning. Each community infrastructure sub-project will be sponsored by CG and implemented by a PMC which will be selected from among the CG members. The project will also support the formation and strengthening of CG and its PMC in the preparation of sub-project proposals for submission to SDF for funding, implementation, and operation and maintenance of the facilities. (See Annex 2, Attachment 4 for details.)
- 34 - Project Component 3 - US$ 18.07 million Implementation of Community Action Plan (CAP)
The project will finance a range of small-scale community works (such as arsenic-free water supply and communal sanitation facilities, and transport and trade infrastructure) and social assistance programs, which are identified and prioritized in the CAP, based on informed choice as indicated in the menu of options in the OM. This menu of options is based on the preferences of the communities expressed during the social assessment study carried out for this project. The project will also finance social assistance services targeted at the very poor and vulnerable. The two sub-components are described below.
(a) Community Infrastructure Sub-project. The project will provide matching grants directly to communities for the implementation infrastructure sub-projects which satisfy the eligibility criteria established in the OM of the project. Initially, a number of sub-project options, such as rural connecting roads, culverts, foot-bridges, drainage, small markets and boat landing jetties, and different types of water and sanitation schemes will be eligible for financing. More could be added to the list as community needs are identified through participatory planning exercises. Proposals for all eligible types of investments would conform to the standard procedure, documentation, and technical, economic, environmental, and sustainability criteria as described in the OM. It is expected that about 1,800 sub-projects will be financed under this component. The project will provide an allocation of about Tk 550,000 (US$9458 equivalent) for small-scale community infrastructure works for each project village. However, the ceiling for the cost of each sub-project would be Tk 475,000 (US$8169 equivalent).. Communities will be required to contribute 15 percent of the total capital investments up-front both in cash and in-kind (labor, materials, and services), as well as bear the full operation and maintenance costs. SDF will finance the remaining balance through the execution of a SFA with CG. The SFA will describe the terms and conditions of the matching grant. This approach, complemented by institutional deyvelopment at the local-level, is expected to give control of decisions and resources, and build capacity of communities, who are the ones with most to gain from making efficient and effective use of resources. (See more details in Annex 2, Attachments 5 and 6.)
(b) Social Assistance Program (SAP): The objective of the social assistance component is to increase the capacity of the poorest, in need of social assistance and socially excluded groups to avail themselves of social and economic opportunities. The SA study identified those destitute women, female-headed poor households, youth-at-risk, out-of-school children, artisan community, physically handicapped, victims of natural disaster, and the indigenous population. These groups are the poorest and vulnerable to economic and social shocks. They are also not able to improve their quality of lives due to social, legal, and economic constraints.
Social assistance will be provided to all the enumerated poor and vulnerable groups identified in the CAP by the end of the project. Activities eligible for financing under this program will include five types: (a) advocacy programs; (b) occupation skills training; (c) support for pregnant women and risk pooling pilot initiatives; (d) legal aid support, and (e) one-time seed capital for the graduated trainees and most badly affected natural hazard victims to acquire productive assets. The menu of activities was developed from the needs articulated in the social assessment study. Special programs will be undertaken to provide support to female workers who have recently been retrenched from the ready-made garment factories. SAP will operate in the villages covered by CAP and irnplemented by competent POs. (See more details in Annex 2, Attachment 8.)
- 35 - Project Component 4 - US$0.81 million Pilot Private Financing of Community Utilities
Drawing upon the lessons from the successes within and outside the country, SDF would develop and test new approaches to leverage private/NGO/community participation in basic utilities, such as piped water supply and off-grid electricity. The project will finance technical advisory services and matching grants for about ten pilot sub-projects anywhere in Bangladesh where potential to recover costs through user fees exist. The technical advisory services will include identification, development, appraisal of the pilots, and overseeing the implementation. A systematic learning and adaptation to ensure financial sustainability and commercial operation of these infrastructures will be undertaken. Based on lessons from these pilots, decisions will be taken at the mid-term for further scaling up. The selected organization will operate under the overall guidance of the MD under terms of reference acceptable to the Association. (See more details in Annex 2, Attachment 9.)
- 36 - Annex 2: Attachment 1
Targeting Strategy
Targeting Districts
The challenge of the project is to target interventions in those areas where the productivity of the resources is maximized in order to increase the welfare gains of the poor. The "learming by doing" approach of the project predicates that the geographical area for interventions be not too large to stretch the limited capacity of SDF, and not too small or have unique characteristics which may not provide lessons for improvement in design and future scaling up. Another important consideration is that the project area should include the relatively poorer regions of the country. Based on these considerations, Gaibandha and Jamalpur districts have been identified as project areas for institutional development and implementation of CAP components.
According to the Bangladesh Human Development Report 2000 prepared by BIDS for GOB, these two districts score high Human Poverty Index (HPI) and Income Poverty Index (IPI) values. Jamalpur scored >50 in HPI and IPI, while Gaibandha ranks >50.1 in IP[ and HPI is between 40.5 and 50. Annex 12 provides the methodology for the calculation of poverty indices. The districts are located on each side of the Jamuna River. About 0.63% of population of the districts is tribal.
Table 1: Basic Data of Gaibandha and Jamalpur Districts
Literacy Rate (%) %of Population Areas Pop Living in With Having District (sq.km) (m) Upazila Union Village Mlale Female Overall thatchedl Electricity Proper
______houses Sanitation Gaibandha 2,179 1.9 7 82 1,230 26 16 24 64 4 4 Jamalpur 2,032 1.9 7 67 1,362 32 17 21 56 6 5
Targeting within Districts
Of the 2592 villages in the two districts, the project airns to cover approximately 1,400 (54 percent). These villages would be selected based on the criteria provided below. However, the CSO will have some leeway in the precise strategies for targeting within the project districts:
* areas with relatively less access to basic infrastructure and social assistance services; * unions and villages should have relatively greater proportions of poorer and more disadvantaged groups; * coverage should avoid saturation of project support to all or the majority of villages within the unions, but rather attempt to create a "demonstration" effect within a few villages which can spread more spontaneously.
Targeting within Villages
The project aims to address the needs of the poor. Hence, in the formation of any groups, community demand assessment, meetings and subsequent implementation, and involvement of the poor in all these activities will be guiding principles. However, it is also important strategically to involve the middle class and the elite. The involvement of the elite could influence pro-poor policies and intervention at higher administrative and political levels. The middle-class participants can be members of community groups, but should be in supportive rather than leading roles.
- 37 - Targeting the Very Poor and Vulnerable Groups
For the very poor, who may be less able or willing for social reasons to be fully active in all the institutional development activities, the program will target specific social assistance activities. The guide to targeting social assistance program is the VI developed by SDF. People will be eligible for social assistance if they score a minimum of seven.
Table 2: Vulnerability Index - a Guide to Targeting
Indicators Score Scale Possession of asset No homestead/cultivable land=3; Only homestead=2; Cultivable land (less than 10 decimals=2; Cultivatable land less than .10+ cattle=l; Cultivable land >.10=0 Access to wage/self No wage employment for six months=3; unemployed for three months=2; employment employed for more than six months=0 Monthly income Equal to or less than Tk. 600=3; more than Tk 600 but less than Tk. 1,500= 2; more than Tk 1,500 but less than Tk. 3,000= 1; equal or more than Tk.3,000=0. Literacy level Cannot write or read =2; semi-literate=l; can read and write=0 Social and/or institutional Not associated with any local organization; not related to any member of the association local government body or the village leader; not a member of any factional group= 1; Close to local body or a factional leader=0 Gender Women victims of gender violence = 2; Female headed households with no adult ctive male member in the house and/or domestic help or some other low roductive activity=3; Male adult but inactive and female household member active low productivity job=2; Female better-off or inactive=0 Demographic group Tribal=3, Scheduled caste=3; People with disability-3; Child labor=3; children below five years not immunized=3; out of work garment industry worker=3; out of school children but not in regular employment=2; children in school=0
Indicative Phasing of the Activities in Project Districts:
Considering the preparatory work to be taken by a new SDF and the learning process, the activities in the villages in the project districts have been phased in the following manner:
Table 3: Indicative Phasing of Villages
Districts Year 1 Year 2 Year 3 Year 4 Total Gaibandha 60 190 225 225 700 Jamalpur 60 190 225 225 700 Total 120 380 450 450 1400
- 38 - Annex 2: Attachment 2
Information and Communicationt Strategy and Implementation
Objectives
One of the first tasks of SDF will be to develop an effective IC strategy, as this will provide the basis for building a common understanding of the principles and scope of the project. It will also identify measures at the local level to empower communities and at national level to create an on-going discussion on progress and key determinants of success. The IC strategy will assist project stakeholders to contribute to a behavior change from the role of passive beneficiary to active participant in sustainable social and economic development.
Implementation Mechanism
SDF will contract a media firm to develop the IC strategry and development of materials for dissemination. The IC strategy would be implemented at the national level by SDF and in the project areas by CSOs. The strategy will ensure that accurate and relevant project information is disseminated to all the stakeholders (CG, VDC, line departments, local government, NGOs, private sector, etc.). Appropriate feedback mechanisms would be established to make improvements to the strategy to ensure that the activities developed are strategically oriented and relevant to each target group. In particular, the communications strategy would include the following:
* disseminate information about SDF; * awareness raising activities on the roles and responsibilities of activities targeted at VDC, CG, CSO, PAST, and SDF as behavior change agents and the use of communication as a tool for this purpose; * opinion research, audience segmentation, message, and channel development. These are critical in establishing networks and developing targeted outreach, information and behavior change strategies to increase effective participation of the poor; * team building, mediation, conflict management, and trouble shooting activities would facilitate the formation of various groups and relationships and promote cooperative and responsive behavior; * material development and media program activities would reinforce participatory and behavior change processes, inform and educate the stakeholders on SIPP and improve the image of SDF and the project, as well as provide transparency and infornation sharing with other organizations working for poverty reduction; * building of a dynamic knowledge base on the communities' development experiences.
The IC Manager at SDF will play a key role in coordinating the implementation of the IC strategy. Specifically, the IC Manager will be responsible for: (a) information dissemination across SDF and to all external stakeholders at the national level; (b) training CSO on the IC strategy and their responsibilities; (c) developing operational linkages with the MIS; (d) ensuring that knowledge sharing takes place between the CSOs and PAST working in the project to ensure quality standards in communications and overseeing communications activities across the project area; and (e) supporting the CSO and other SDF staff by ensuing that consistent, accurate and timely information is disseminated across SDF and the external teams working with SDF at the national and local-levels.
- 39 - Annex 2: Attachment 3
Monitoring and Learning
This Annex provides a framework for project monitoring, evaluation and learning. There will be continuous assessment of project implementation, as well as periodic assessments of project performance and impacts relating to the project development objectives. Predetermined targets of selected performance indicators will be reviewed one year after implementation, at mid-term, and prior to implementation completion. Overall responsibility of project monitoring, evaluation and learning would rest with the M&L unit in SDF.
Monitoring of the project will be carried out through the conventional methods of monitoring physical, financial, and logistics aspects of the project. In order to capture the processes of community participation, satisfaction with project services, and institutional dynamics, there would also be process monitoring.
Management Information System (MIS)
The objective of the MIS would be to track the progress of the project in order to facilitate management and supervision. The MIS would consist of a customized database application including principal database, data input forms, and programmed macros and functions in order to generate the required outputs. The database would be maintained at SDF. There will be two distinct modules, one to monitor the progress of the participatory approach of the project and the other the implementation of the physical and financial aspects of the project.
Implementation of the project at the field level would be carried out by the CSO, PAST, POs, and the private sector. Using a number of paper-based forms, these service providers would collect data to be entered into the system. SDF's computerized system would allow for tracking of project progress during implementation. Reporting forms have been developed to help capture data for input into the MIS. These forms would be modified, if necessary, based upon the first year's implementation experience. The forms would be simple and user friendly to ensure that data accuracy is not compromised. The data for other sub-systems, such as the Accounting and Financial Management, will be provided and entered by users, and may include bank transfers, bank statements, modes of payment, budgets, procurement, and disbursement plans. The MIS would be functional by August 2003.
Process Monitoring
Process monitoring will be a fundamental part of the overall monitoring, evaluation, and learning system of the project. While many of the project monitoring activities will be concerned about tracking events and numerical targets, they would also play an essential role in identifying changes and the need for possible modifications. Process monitoring would provide SDF management a more direct and objective communication of the qualitative changes and processes taking place throughout the project. It would also be a valuable feedback mechanism from the communities on how to do things better, as well as to get a clear assessment of hard-to-measure shifts in community attitudes. SDP focus of process monitoring would be in the areas of institutional development at the village level, client satisfaction with the project services and mechanisms to ensure transparency, inclusiveness, equity and cost efficiency. This would SDP help to learn and provide a feedback to allow adaptation of the project design as necessary.
-40 - SIPP processes would be assessed through systematic qualitative analysis, for example, conducting focus group (FG) sessions on randomly selected community members. The FG discussion should ensure self assessment by the community members, i.e., the identification of the SIPP processes that the community members regard as important, their own analysis on the extent of which these processes are operating according to plan and their suggestions on improvement. Furthermore, FG discussions would also be held at the national and district levels with Government agencies, NGOs, the private sector, and other stakeholders. Appropriate participatory appraisal techniques would be used to supplement the FG discussions.
SDF would appoint independent organizations to carry out process monitoring. This would be reputable organization engaged in social science research and process monitoring. The contracted agencies would have access, and contribute, to the project data gathered by the project's MIS. Several times a year the agency would verify the quality of project implementation. It would do so by analyzing the data gathered by the MIS, in the light of direct information on client satisfaction obtained through the use of participatory methods, including client assessment. A list of process and impact indicators are provided in the OM. The contracted agency would be expected to provide an assessment report to the project and exchange information with selected groups every six months. The process monitoring would be conducted continuously throughout the life of the project. A draft terms of reference (TOR) for the process monitoring is provided in the OM.
Impact Evaluation
The objective of the impact evaluation is to independently examine the achievements of the project's development objectives, based on assessment of the pro ject's performance indicators. In addition, the study would also carry out beneficiary assessment on a sample basis. In view of the innovative features of the project, a baseline survey would be essential. Impact evaluation would be carried out in four stages: a baseline survey; assessment after the first year of project implementation; a mid-term impact assessment; and final impact evaluation at the end-of-project cycle. The first year and mid-term assessments would precede the mid-term review of the project. At this time, it would be possible to evaluate the project's success with the community infrastructure works and also the institution building activities. The third stage of impact assessment would focus on the project's development objectives and the extent to which has been achieved. Moreover, it would also focus on sustainability indicators. The evaluation would assess the sustainability of the institutions created by the project and sub-projects financed with project funds. The data from the four-stage evaluation process will provide useful information for future initiatives. SDF would appoint an independent organization to carry out impact evaluation studies, with the TOR acceptable to the IDA.
Action-learning system
Due to its pilot nature, the project and its stakeholders will be on a steep learning curve from the beginning. A culture of respect of new ideas and experimentation, including those suggested by the communities, have to be instilled with the rigor of performance-based contracting. This implies that the project focus has to, in broad terms:
* start with demonstrating effectiveness: this will test whether the ideas achieve the desired change, and will generate enthusiasm and a "demonstration" effect to other communities and agencies. This will be roughly equivalent to the first round of mobilization and community project implementation; * identify ways to improve about efficiency: how to effectively achieve the key outputs at lower cost and/or with better use of resources;
- 41 - * consider scaling-uW, after having demonstrated cost-effective mechanisms of translating, standardizing, adopting, and replicating the project elsewhere while not losing its original principles.
These objectives will require special management capabilities from project management and the participating organizations that are contracted. SDF will provide the appropriate support to this end through TA, training, and workshops.
Mid-term Reviews (MTRs)
There would be two MTRs of the project. One would be at the end of the first year of project activities and another at the end of the second year. These reviews would be based on the project's monitoring reports, as well as specific in-depth studies which would, include but not be limited to, the following: (a) effectiveness and efficiency of SDF and the institutional and implementation arrangements; (b) performance of the service providers; (c) performance of the pilot private financing component; and (d) assessment of the "before" and "after" situations in the project areas.
-42 - Annex 2: Attachment 4
Institutional Development at the Community Level
Institutional development at the community level will include the following activities: (a) awareness raising and information sharing; (b) formation of VDC; (c) preparing CAP; and (d) formation of CG and PMC.
Awareness-raising and information sharing at the local level
The project will support a process to actively involve poor and marginalized rural conmmunities through an effective information and communication program. The outcomes of this component would be increased access to information relevant to their development, increased competence to assess the credibility of information sources, increased ability to use the opportunities opened through this information, and the motivation to change and sustain new development-oriented behaviors.
Parallel to the national project level the IC strategy, through the CSO at the local level, will assist project stakeholders to actively participate in social and economic development. The awareness-raising and information-sharing activities would focus on the following:
* raise awareness of the poor and marginalized people to challenge existing practices and constraints and adopt participatory behaviors within the project frarnework; inform the residents of the project area, stakeholders, and others about the project - its objectives, rationale, scope, and operating principles (e.g., eligibility criteria for accessing funds, contracting procedures etc.); * provide timely and well targeted information about the project to the primary stakeholders, i.e, the communities and to other stakeholders, e.g., NGOs, the private sector, and government bodies, its philosophy and mandate, and the services being offered; * make special arrangements to motivate and engage the excluded poor, especially women, to participate in community-driven initiatives; * facilitate leaming opportunities for the poor to reduce the cost of participation through providing information on when, where, how, and what specific steps to be taken to exercise rights under the project; * promote a responsive and cooperative environment at the village/Union levels that would motivate the poor and women to sustain new behavior.
Implementation Arrangements: The CSO will be mainly responsible for the implementation of this component, with appropriate support from the SDF. The CSO contracts will include the milestone indicators, which would provide the basis for evaluating the performance of the CSO. A detailed TOR of the CSO is provided in the OM. The CSO will field appropriately-trained and supenrised community facilitators, who will be based in the villages. With matexials provided by SDF, the CSO will carry out an extensive information campaign in the project Districts, IJpazila, and Union and village levels. The team will explain the project, the operational modalities and rules, eligibility criteria, and community participation at all stages of the cycle. The information dissemination will be done through local newspapers, radio, posters, leaflets, meetings, and personal contacts with the community members, particularly the poor.
Meetings and different target audience responses will be noted and recorded, especially to note enthusiasms and concerns regarding the nature of the SIPP. The feedback will also be essential,
- 43 - particularly, in the first round of mobilizing to assess material and messages used. The CSO would receive feedback and work with the IC Manager in SDF to improve the strategy.
Selection of villages: The discussions and the feedback arising from the awareness-raising campaign will be carefully assessed and will be used to provide an indication of the enthusiasm and general characteristics of the area in response to new ideas. Within the overall number of unions where the IC campaign would be carried out, the CSO would identify the villages based on the expression of interest and demand for project services. In the targeted villages, CSO will undertake intensive mobilization. Selection of villages will depend on demand being created. A key performance indicator in the CSO contract would be selection of villages according to the criteria established under the project.
Formation and Strengthening of VDC: Situational Development and Planning
A participatory, demand-driven mechanism focusing on the poor population would involve rural communities and their institutions at the village level and their linkage to other institutions. Building and strengthening these institutions would be the comerstone of the institutional development component. Social mobilization and demand identification through a participatory planning process, local-level institution building, and training would be key activities to be financed under the project.
The village has been identified as the unit for social mobilization and institutional development. Social mobilization activities would include identification of poor and vulnerable people, inspiring to form social groups, explaining the need for social groups, setting up of an executive committee, group leadership training, facilitating group meetings, discussion of problem and issues, and taking measures to solve problems at individual and group-levels.
Through the CSO, the project would promote informal institutional structure at the village-level, the VDC. The VDC would have an overall coordination role in the social and economic development of the village. The CSO would ensure that the VDC represents the needs and priorities of the total village population, particularly the poor. The VDC would comprise not more than 11 directly elected persons, including a Convener. The committee would be inclusive and represent poor men and women (at least 30 percent). The VDC would establish links with line departments, POs, and the private sector for continuous support in the implementation of the development plans.
Preparation of CAP
CSO, in parallel to formation of the VDC, would carry out a needs assessment of the villages in terns of small-scale infrastructure and social assistance services. The assessment will be carried out through participatory methods for resource and social mapping techniques, wealth ranking and institutional Venn diagrams. This exercise would result in simple village profiles, which would be validated through discussion with the VDC. The village profiles would include:
* Identification of key community groups (by poverty status). * Identification of the needs and aspirations of different poverty groups. * Existing organizations and their functions. * Available infrastructure, social services, and their effectiveness. * Presence of support institutions and their functioning. * Main issues and opportunities.
Based on the village profiles, a CAP would be prepared by the CSO in close collaboration with the VDC and with the participation of the village population. The CAP would include the village profile, critical
- 44 - baseline socioeconomic data, and enumeration of social groups in need of social assistance support by type. Project priorities would emanate from the CAP and be based on the knowledge that Tk 550,000 would be provided for infrastructure sub-project purposes by the project per village. Discussion on project ideas would include a description of the activity, justification, identification of poor beneficiary households, implementation mechanisms and approximate estimates of project costs. Livelihood and economic activities are likely to be an important priority to the communities. While these would be directly financed by the proposed project, the CAP should reflect these needs and other sources of financing should be explored by the CSO.
Support to CG and Project Management Committee (PMC)
The CG is a group of individuals living.in close proximity to each other and/or other social groups, grassroots entrepreneurs or associations able to identify a need and come together to access project funds. Each CG will comprise of individuals who are interested in sponsoring sub-projects. Based on the CAP, the CSO would form CGs to carry out the prioritized projects. At least 30 percent of the CG members should be women and come from the poor and vulnerable groups. The CG will be responsible for the sponsored sub-projects, but the detailed tasks of preparation of proposals, and management of the implementation of the sub-projects will be devolved to a nine-member PMC, which will be elected by CG through a transparent process. At least 25 percent of the members of the PMC should be women and represent the poor. The chairperson of the PMC would be a locally-respected person and elected by the CG. CSO will assist with the election of the PMC and provide training on overall project management to CSO and specialized training to PMC on sub-project preparation, implementation, hiring of expertise, and financial management.
- 45 - Annex 2: Attachment 5
Implementation of Community Infrastructure Sub-projects
Preparation of Sub-project Proposals
After the CAP is finalized for each batch of project villages, the following actions in the sub-project cycle will be taken to implement the community infrastructure works prioritized in the plan:
* formation of CG, election of a PMC for the CG, and training to the CG and PMC provided by CSO; * preparation of sub-project proposal by PMC, with the assistance from the CSO; the proposal would include a description of the activity, justification, and identification of poor beneficiary households, implementation mechanisms and estimated costs; * review of the proposals would be carried out by the CG and VDC, with CSO facilitation; the review should focus on the following: (i) location, size, and components of the project; (ii) community contribution; (iii) long-term commitment to maintenance; (iv) environmental impact; and (v) gender roles.
Appraisal and Approval Process After community review, the CSO will help the PMC to submit the proposal to SDF for funding. The next stages in the project cycle are appraisal and approval of the sub-project.
Appraisal: SDF will appoint two consulting firms to form PAST to assist SDF conduct both desk and field appraisals of the sub-projects. The desk appraisal checklist will include the following: (i) inclusiveness of the beneficiary community; (ii) type of works to be undertaken; (iii) technical simplicity; (iv) environmental impact; (v) financial viability assessment against benchmarks for investment costs per unit (e.g., cost per benefiting households); (vi) economic viability; (vii) evidence of the community's commitment to the project; (viii) minutes of the meeting and the participant list; (ix) operation and maintenance plan; (x) cost of the sub-project within the financial limit; (xi) cost of the sub-project compared to public agencies; and (xii) geographical distribution of projects in the project districts.
Field appraisal will be carried out to cross check the information contained in the application and confirm the community's commitment to the activity. The CSO will facilitate the field appraisal meetings, which would be attended by all stakeholders. The checklist for the field appraisal are as follows: (a) level of community participation, including participation of the poor, and women; (b) governance of PMC; (c) banking arrangements; (d) understanding of the project's financing rules, implementation and operation, and maintenance arrangements; (e) technical feasibility; (f) cost effectiveness; and (g) operation and maintenance plan. The appraisal criteria is detailed in the OM, and SDF will review these annually, based on the feedback from the stakeholders.
Approval and Funding: Once project proposals are approved, SDF will inform the applicant CG to execute a SFA. CSO will assist the CG to open a bank account and CG will deposit the community contribution in that account. Attachment 7 of this annex includes a sample SFA.
-46 - Implementation and Supervision Sub-project implementation would be carried out either directly by the members of the CG with hired skilled labor or local contractors. The selection of local contractors will be done according to the World Bank's Guidelines on Community contracting. Community groups will use proven standard community procurement and fund management procedures. Funds will be provided in the tranches, according to predetermined level of progress. SDF will be assisted by PAST to supervise the implementation of the sub-projects.
Figure 1: Implementation of Community Infrastructure Sub-projects
......
Information and Conunnication
| Participatory \ | Evaluation |\
Community Needs Assessment Baseline Data Collection 4...... ' Problem identification and Analysis Prioritization Develop CAP .~ ~...... ,.,._.x Beneficiary Assessment
;. "......
Completion Hand Election of VDC, and formation of CG and PMC and Endorsement of Local Priorities
Technical Audit and Impact Assessment
\ ~~~~~~~~~~~~~~~~~~~~~~Developingdetailed sub- project Procurement, Implementation proposal, environmental review, Supervision Community Revjw
LaunchandDisbursement . . . Technical, Financial Rleview and Sub Project Criteria *plying for SDF ...... FundsandSuvoort SigningB of Agreemnent,A Tai Opening J of Bank Aorount Trafining . * E/
Approval
-47 - Annex 2: Attachment 6
Community Infrastructure Works
Menu of Sub-project Options
The project will focus on selected transport and trade infrastructure, and water supply and sanitation facilities for very poor groups. The menu of the different technological options will be disseminated to the community through the information and communication campaign enabling them to choose the most affordable and technically efficient option. It is possible that during the needs assessments exercise, other investment options will be requested. Ifjustified, these would be considered by SDF for financing after review of the various technological options.
In the transport and trade category of activities, the project will finance improvement of rural roads and culverts and primary markets based on technical, financial, and economic eligibility criteria which have been provided in the OM. A key criteria for financing will be connectivity. Project funds will be used to finance development of a small section of rural roads which connect with markets, schools, health clinics, or other key places of business. The project will also finance culverts needed to fill in the gaps in the existing road infrastructure. The communities will be responsible for identification and implementation of the sub-projects.
In order to raise the service level of the poor and vulnerable groups, the menu of sub-projects include water and sanitation. Furthermore, the project will finance arsenic-free water supply facilities in areas where water is contaminated by arsenic. The technical options include community tubewells, dug-wells, rainwater harvesting technology, and small surface water filters.
Sub-project threshold and community contribution
To keep the sub-projects simple and within the manageable limit of the community, the maximum cost per trade and transport sub-project will not exceed Tk 475,000 (US$8169 equivalent). To ensure community ownership of the proposed sub-project, a minimum contribution of 15 percent of the project cost will be required in a combination of cash and labor or services. The community will be responsible for operation and maintenance.
Sub-project Selection Criteria:
Selection will be based on the following criteria: (a) target beneficiaries; (b) community participation; (c) technical considerations; (d) cost effectiveness; (e) implementation arrangements; (f) environmental impact; and (h) sustainability. In order to qualify for funds, sub-projects would have to meet the following criteria:
* be community based; i.e., sub-projects are identified, prepared, and managed by the communities; demonstrate community involvement, ensuring ownership, and maintenance by the communities; * should have an elected PMC; * involve simple and user friendly technology that is manageable by the communities; * serve poverty reduction objectives, be gender sensitive, and meet environmental impact assessment criteria;
- 48 - * at least, 50 percent of the poor and vulnerable groups in the village should benefit either directly or indirectly from the project; * cost of each sub-project should not exceed T k 475,000; * community contribution should not be less than 15 percent of the total sub-project cost; * labor cost should be at least 30 percent of the total community contribution; * water and sanitation sub-projects should directly benefit only the poor and vulnerable groups; * only neighborhood latrines will be eligible for financing; * proposal should have an adequate provision for maintenance; at least 2 percent of the project cost should be mobilized by the community as maintenance fund; * sub-project site should preferably be in public or communal land, or land belonging to local authority; in the latter case, permission from local authorities would need to be obtained and evidence of the permission should be submitted with the proposal; in case of privately owned land, it should be officially donated to the beneficiary CG, according to guidelines on Land Donation provided in the OM; * sub-projects should be technically viable; sub-project should adequately conform to the technical norms and standards adopted by SDF; * sub-projects should not require any involuntary resettlement or have adverse impacts on cultural property; * sub-projects which are categorized as "A" in environmental screening will not be financed; * baseline survey should be conducted to compare before and after project situation; * communities should choose from the design options provided by SDF, unless a more technically suitable or cost-effective option is suggested by the community.
Expected Outcomes of the Community Infrastructure Works sub-prolects
The qualitative and quantitative change expected should be discussed with communities beforehand. The general outcome indicators, irrespective of the type of infrastructure would include: (a) beneficiary satisfaction with respect to technical quality, timeliness, and responsive to needs; (b) number of people with increased access to the infrastructure provided; (c) improvement in the lives of the poor and women; and (d) percentage of women and poor among the total beneficiaries of the project. Specific indicators for the trade and infrastructure sub-projects would include: (a) amount of time saved in travel; (b) increase in number of transport providers; (c) increase in attendance in schools/health centers; (d) increase in mobility of women and their activities in the markets; (e) increase in lease value of the improved market and jetty infrastructure; and (f) increased business turn-over. Indicators for water and sanitation sub-projects would include: (a) improvement in health; and (b) reduced hours for fetching water.
-49- Annex 2: Attachment 7
Sample Sub-Project Financing Agreement (SFA)
Between
...... Name of the Community Group ...... Village; ... Union; ... Upazila; .... District
and
Social Development Foundation Road 2/A, House 3, Banani 1213 Dhaka
Agreement Dated 200_ between the Community Group {Name of the Community Group, name of the village, union, upazila, district) (herein after represented by its Project Management Committee (PMC) President/Secretary {Name ------; Resident of Village---; P.0.------Union----; Upazila-----; District------}) as the First Party and Social Development Foundation (herein after represented by Mr./Ms. ; Designation Address ; as the Second Party.
Preamble
The two parties to this Sub-project Financing Agreement (SFA) being interested in efficient financing and institutional arrangement for improving access to basic infrastructure through the implementation of community-driven small scale infrastructure sub-projects in the village {Name of the village)-
The First Party to this SFA being a Community Group (CG) consisting of . members from [name the village] is interested in the implementation of [type of infrastructure to be specified]. For the purpose of implementation of the referenced sub-project, the CG (name of the CG} has formed a Project Management Committee (PMC) comprising President (name), Treasurer (name) and Secretary (name) and members (names).
The Second Party, being an autonomous organization interested in the reduction of poverty at the grassroots level and registered under the 1994 Companies Act, is interested in contributing to improved access of basic infrastructure, thereby improving the well-being of the First Party. The Second Party will use the services of Community Support Organizations (CSO) to assist the CG and the PMC with the preparation of the sub-project proposal and training in accounting and book keeping. The Second Party will also use the services of Project Appraisal and Supervision Team (PAST) to appraise the sub-projects and certify the implementation progress.
This SFA is, therefore, entered into between the representatives of the parties specified above.
- 50 - Object of the Agreement
The total cost of the sub-project (Tk.---) will be financed by First Party (15 percent of the cost) in cash and labor and the Second Party (85 percent of the sub-project cost in grant).
The object of the present agreement consist of paying the matching grant by the Second Party to the First Party. The grant amount is Tk..
The said grant amount provided by the Second Party shall be used by the First Party under the terms established under the present agreement.
The grant shall be administered by the PMC and the grant account will be jointly operated by the Treasurer and President or Secretary of the PMC.
The First Party is exercising through the PMC all its rights and fulfilling all its duties, resulting from this agreement.
The approved sub-project proposal is attached in Annex 2. Some details of the sub-project are provided below:
1. Name and type of the sub-project: - 2. Location of the sub-project: mouza [name] in the village [name] in [name of union], name of upazila], [name of district],: 3. Details of the number of beneficiaries and their economic status (Section I to this SFA) 4. Activities to be carried out: As per the sub-project proposal in Section 2. 5. Anticipated results of the sub-project: i...... ii ...... 111...... iv......
6. Detailed cost of the sub-project
Si. Activity Unit No. of Unit Cost Total Cost No. Description Unit (in Taka)
2. _ _ _ 3. _ - ___
6.To ______=
- 51 - 7. Financing Plan
Community Contribution by the First Party (in Taka) Grant by Name of CG members who contributed Cash In kind* Total CG Second Party (in
______T ak a) I 2 3 (1+2) 4
Total
* The contribution in laborshould not exceed 30 percent of the total community contribution
8. Fund Release by Second Party: The Second Party will release the approved grant amount in three installments against certification by PAST on the completion of the activities listed in the table below.
Installment number and Activities to be completed by the First Party and certified by PAST percent of the approved before release of installment amount grant amount 1' installment: 40 percent a) Signing of the SFA, b) Opening of sub-project Bank Account by the First Party; c) Providing evidence (such as, deposit slip) of cash contribution of First Party deposited into the sub-project Bank Account, d) Availability of a trained village book keeper for recording sub-project fund and expenditures, 2 installment: 35 percent a) Submission of financial statement of first installment; b) Submission of a report on implementation progress on the activities as per the approved sub-project proposal (activities would include, e.g., in the case of culvert, completion of layout and trench cutting) 3'd installment: 10 percent a) Submission of financial statement of first and second installments and work completion reports
Obligations
The First Party agrees with the following:
i. execute all works, according to the approved sub-project proposal; any change will require prior concurrence of the Second Party; ii. facilitate training of its members, organized by the CSO for effective implementation of the sub-project; iii. complete the sub-project through a participatory process with due diligence and efficiency, as per specifications within the time agreed; iv. follow satisfactory financial management arrangements, as indicated in Section 2 to the SFA. v. ensure timely contribution of the CG members; vi. ensure that the goods and services to be financed under the sub-project are procured in a transparent and efficient manner, according to the community contracting procedures (Section 3);
- 52 - vii. monitor the work and report to the Second Party in the agreed formats and time frame; viii. carry out proper maintenance of the facility constructed; ix. ensure equitable use of the asset by all the prospective beneficiaries; x. display all information (including financial) about the sub-project and its progress in at least three public places; xi. provide any member of the CG information about the progress and disclose all financial statements; and xii. permit at all times, the Second Party or its representatives to inspect the accounts, records, and physical works under the project and comply with the recommendations/observations as a result of such inspection.
The Second Party agreed to the following:
i. release the agreed installments within seven working day of the receipt of complete documents; ii. ensure that the CSO and its staff provide all necessary assistance and training required by the First Party for the effective management of assets; and iii. ensure timely availability of the services of PAST
Remedies
The Second Party may resort to the following remedies:
i. In case of default or noncompliance with this SFA, the Second Party may suspend disbursement of any undisbursed funds for subsequent installments until satisfactory explanation/clarification is provided as to the noncompliance; ii. In case of willful negligence, the Second Party will have the authority to freeze the Bank Account of the First Party and take any other legal actions under the law of the country; and iii. If in the judgment of the Second Party, the First Party has engaged in corrupt or fraudulent practices in the implementation of the sub-project, the Second Party may suspend disbursement and take any legal action under the law of the country.
Signature of the Representative of the Signature of the Representative of the First Party I Second Party
- 53 - Section 1
List of persons (with socioeconomic status) benefiting from the sub-project agreed upon in this SFA
Section 2 Approved sub-project proposal
Section 3
Satisfactory financial management arrangements comprise the following:
(a) The First Party shall open a separate Sub-project Bank Account for sub-project funds. The First Party's cash contributions for project activities and the contributions received from the Second Party shall be deposited into the sub-project Bank Account. The sub-project Bank account would be used for sub-project-related receipts and payments only. No other resources should be deposited to this sub-project bank account. Operation and Maintenance contributions, any savings contributions, and related payments shall not be made into and from this sub-project Bank Account.
(b) The First Party shall have a trained simple accounts book keeper (who is trained during social mobilization).
(c) The First Party shall maintain the folloWing accounts registers/records, as per the simple formnats provided by the Second Party: (i) simple Cash/Bank book providing details of amounts received and details of payments along with classification of major heads; (ii) register of contributions received from members in cash, labor, and materials; and (iii) register of materials purchased using project funds and materials utilized. These book/registers shall be completed, at least on a monthly basis, and signed by authorized CG members.
(d) The First Party shall maintain vouchers/bills/supporting documents for the various receipts and payments (systematically numbered), and copies of the sub-project Bank account statement, including the pass book issued by the commercial bank.
(e) The First Party shall prepare a simple report each month as per the format provided by the Second Party. This summary report would indicate: (i) amount received from First Party and Second Party cash contributions, amount spent on the various items, and balance in the Bank account or cash; (ii) the details of the work being carried out (activity to be completed, cost, the work already completed, and the work to be done in the next month); and (iii) amounts of the First Party's contribution in labor and materials (the formats of the accounts registers/records would facilitate easy preparation of this report).
- 54 - (f) The First Party shall regularly (at least once in a month) present this report to its members and to the CSO. The First Party shall also display this report in the notice board in a public place or at the sub-project site. In addition, the books/registers, vouchers and bank statements shall be brought to the meetings of the First Party and CSO and PAST and be open for scrutiny by CG members.
(g) The First Party shall provide a copy of the report to the Second Party whenever any installment payment is requested.
(h) The First Party shall provide the accounts registers/records, supporting documents, and all other information to the Project Auditor appointed by the Second Party.
(i) The First Party shall maintain similar accounts for its Operation & Maintenance sub-project Bank Account; and present a summary statement for this account to its PAST and csO.
- 55 - Annex 2: Attachment 8
Social Assistance Program
The project will support social assistance services aimed at filling the existing gap in the ongoing programs. To provide services efficiently and effectively and maintain continuity, the social assistance priorities will be identified on a wider scale from a consolidation of CAPs (see above). The objectives of the social assistance program are to increase the capacity of the poor and socially excluded groups to participate in mainstream development activities through:
(a) increased access to information and knowledge about health and nutrition, including women's health, immunization services, personal hygiene, water and sanitation issues; literacy and leadership program; and human and legal rights, including child rights; (b) motivation towards increased participation, 'voice' and empowerment in working with local government bodies for local-level planning, decision-making, and monitoring, thereby decreasing social exclusion and improving local govemance; (c) increased economic opportunities for skill development and access to income-creating assets.
The social groups eligible for assistance under the component would include the hard core poor, female headed poor households, youths-at-risk, out-of-school children, ethnic communities and those affected by natural calamities (river erosion, floods, etc.) affected persons. Among these, priority will be given to those who are ranked 7 and above in the VI (Table 2, Attachment 1). The indices include indicators, such as (a) possession of productive assets; (b) access to employment; (c) level of literacy; (d) social inclusion; (e) social and/or institutional association; (f) gender; and (g) specific demographic group representing children. It is expected that approximately 300,000 poor and vulnerable people will benefit from sub-projects financed under this component.
Description of Social Assistance Program Packages
Social exclusion and vulnerability issues will be part of the IC campaign and one of the key areas of community plans. CAP will identify and enumerate the number of vulnerable people who are not covered under any social assistance program. SAP will be provided for these excluded groups by four POs selected by SDF through a competitive process. Each PO will operate in a designated number of villages in the project districts. The VDC will assist the POs to provide need-based services and monitor the progress of SAP. An integral part of the SAP program would be social mobilization of the poor and vulnerable members of the community to enhance their ability for group social action. Social mobilization activities would include awareness building and social cohesion through public village meetings, sensitization about rights, and focused group discussions on various socioeconomic issues affecting the livelihood of these groups.
Advocacy Programs
Extensive advocacy programs will be carried out in the villages. The advocacy programs on health and nutrition, and water and sanitation aspects, will raise general awareness but special attention will be given to highlight the need for child immunization, pregnancy-related risks, and the importance of health insurance. The advocacy programs will also focus on gender equality, women's and children's rights issues, such as violence against women, dowry, child marriage, trafficking, building awareness of legal
- 56 - entitlements, personal and family laws, employment and core labor standards, property and financial systems, environmental issues, and rights.
CreatingAwareness in Health and Nutrition Issues. Messages targeted especially for the very poor and vulnerable groups will be disseminated using inter personal techniques related to the project villages. The PO will discuss several health and nutrition-related issues, such as natural sources of vitamins and minerals in locally available food, appropriate nutrition during pregnancy and lactation, delayed marriage and pregnancy, child spacing, and contraception. This campaign will include hygiene, water and sanitation, arsenic contamination of ground water, easily available safe water sources, and other health issues.
Awareness about immunization will be a critical activity. Communities will be sensitized to ensure that at any one point of time, all children under one year of age in the catchment area, are covered fully by the routine immunization against the six diseases. The specific task of the PO service provider would be to ensure that all households with children under one year of age are aware of the need to immunize their children with the six vaccines; are aware where and when the outreach immunization sessions are held; and they access these sessions for services. The responsibility of the PO would be to follow-up those who failed to attend the immunization sessions and ensure that they are immunized with the required vaccine. The PO would also be responsible for identifying the bottlenecks in the systems which may be preventing accessibility and availability of the immunization services; bringing these to the notice of the Upazilla health authorities at the sub-district level, and working with them for a solution.
Advocacy for IncreasedEnrollment, Out-of-School Reduction, and Quality Education: The main objective of this program will be to involve the community people actively in campaign and advocacy activities in their own constituencies for increasing enrollment, reducing out-of-school children, and improving the quality of primary education, particularly in the areas of improving school environment, planning and management, and classroom culture. The issues of campaign and advocacy will vary in different constituencies according to specific needs and concerns. The advocacy process will also lead to provide a conceptual framework of what the community expects from the schools, quality of the education expected from the schools, accountability of the school management to the community, particularly to the parents of the poor students, and enhance the awareness of the people's representatives about their responsibilities with regard to ensuring quality of education.
Programfor people with disabilities: The major aim of this program will be to: (a) advocate the needs of people with disabilities and their inclusion in the development process. Such advocacy will be carried out in two ways: (a) one part will be done through the IC carmpaign by CSO; and (b) more detailed awareness on'disability at the village level will be done by the PO for creating a supportive environment so that people with disabilities are able to participate in mainstream development activities. POs will undertake social leadership training, skill development for building people's capacity to access social and economic opportunities.
Social Advocacy, Monitoring and improving accountabilitymechanisms. This program will provide knowledge and awareness on how to access public resources, on pooling local community initiatives for local development; participation in local development groups, and committees; understanding the roles and responsibilities of the local government; understanding who is accountable to whom; and formation of citizens' groups for civic action. It will also carry out a campaign on violence against women and children, based on, such as dowry, early marriage, trafficking of women and children. Communities will be trained on how to monitor public services using the report card methodology. Finally, the program will help form citizen's watch groups to access common property and public resources, to carry out participatory monitoring of public services and local government activities.
- 57 - Legal and human rights program. The program will include development of an understanding of (a) the family laws of all the religions practiced in the country; women's rights, laws regarding violence against women; children's rights, child abuse, child labor laws; rights of agricultural wage laborers and sharecroppers; and (b) local mediation (or shalish) and how to make the shalish more inclusive, pro-poor and pro-women; (c) conflict resolution in natural and common property resources; and (d) dissemination of Patients Charter of Rights and Information on rights to quality education and creating demand to achieve those rights.
Occupational Skills Program
Development of Livelihood Skills. Adults and adolescents (including out-of-school children, retrenched garment workers, disabled people) aged 11-35 should be provided with such literacy education that would help them to attain the following competencies/skills:
* communication skills such as reading, writing, arithmetic, accounting listening, speaking and understanding; * empowering skills such as decision-making in the family, group and community levels; in social and development issues, such as, negotiating in village councils, resolving feuds and conflicts, control over family income, expenditure, savings and investments, increasing mobility and having greater "voice"; * livelihood skills, such as skills training based on market demand for displaced artisans and people with disabilities, poor people, for gainful employment/self employment and increased productivity.
An estimated total of about 35,000 persons will be provided occupational skills training.
Seed Capitalfor GraduatedTrainees. The project will provide one-time seed capital of Tk. 4,000 for each graduate of the occupational skills porgram to acquire some productive assets. It is expected that this support will enable the recipient to undertake some income generating activities, make some savings and over time become eligible for micro-credit. It is estimated that about 80 percent of the total trainees will successfully graduate from the skill program.
Support for pregnant women and community-based, health-risk pooling initiatives
Support to Pregnant Women: The community will be sensitized to seek trained attendants for child delivery; facilitate development of linkages with facilities for referral care and EOC; increase awareness about the need for spacing, especially to those who have not yet completed their family size; build awareness of the need for accepting contraceptives; and arrange for transportation of poor women requiring emergency care.
POs would franchise safe-delivery services to existing private providers in the community by paying them to provide an agreed package of services, including a minimum number of ante-natal care, delivery services, including medicines and drugs, and subsequent handling of any emergency either at their own facility or through referral to a higher-level facility. The payment would also include funds for transporting the women to other facilities. This would also ensure that the service providers would be able to ensure the provision of quality care by the providers. The service provider would be responsible for providing the trained attendants support to set up their practice within the community and form referral linkages with the public or private facilities, as well as facilitate development of linkages with facilities for referral care and EOC. These providers will liaise with the existing network of TBAs to
- 58 - ensure that they refer patients to them and also do not consider them as a potential sources of competition within the community.
Risk pooling: Two pilots on risk-pooling or community-based health financing initiatives will be undertaken, which would be targeted at the vulnerable amd disabled populations to improve the access and equity of the disadvantaged groups. The PO will be expected to include in his proposal a detailed plan of implementation, strategies, activities, and indicators for monitoring, as well as the development of the capacity to implement and monitor this component.
Legal Aid
The program will include provision of legal aid to poor men and women, and other vulnerable groups. The project will provide financial support for legal assistance to about 140 persons to improve their access to justice, especially in areas of dowry-related violence, prevention of early/child marriage, polygamy, marital dispute, physical abuse, rape, violence against women and children, child abuse, and worst forms of labor.
Financial Support For Emergency Relief
This support will include provision of emergency relief to the victims of natural disasters. Tk 4,000 will be provided to 10 families 10 worst affected villages per year, according to agreed criteria descibed in the OM.
Performance Based Contracts for PO
To provide results-oriented incentives for service providers, SDF would pioneer the use of performance-based contracts for the delivery of social assistance services to its target groups. Under this approach, payments under the contract will be linked explicitly to the achievement of results specified in the contract. Implementing performance-based contracts will require the following: (a) specification of the performance indicators, and the relative weights for each indicator; (b) setting of targets for performance indicators; (c) amount of total paymnent to be linked to performance; and (d) measurement/audit of the performance measures. The following table provides exarnples of the types of results against which performance will be measured for the different interventions to be funded under the project. The performance standards specified are indicative, and the exact levels specified in contracts will be set, depending on individual circumstances. The monitoring of performance against these results targets will form an important part of the overall monitoring and evaluation undertaken by SDF management. This monitoring will also help to evaluate the development of measures of performance and standards set in contracts over time and adjust these for new contracts.
-59 - Program Performance Indicators Expected Outputs Advocacy Programs * At least 80% of the children wash hands. * Creating awareness on * Immunization: * At least 80% of the children immunized. immunization, health, Number of Children * Identified children have taken all the shots within the immunization period of 12 environment and under seven months. nutrition issues. immunized. * Support to pregnant * At least 50% of the identified women have received ANC. women: number of * At least 50% of the identified women have received PNC pregnant women received essential ante and post-natal care (*ANC and PNC**). Advocacy on increased * No. of school-going 0 At least 70% identified going to school. enrolment. children * Out-of-school children reduced to 40%. * No. of out-of-school children * Access of tribal children to pre-primar) school Advocacy on accountability * VDC formed with the * At least 20% of school and health management committee include members in public service. target population. from VDC. * VDC demanding * At least 50% of VDC have taken social action programs. accountability of * At least 30% of VDC have taken past in Local Government and govemment public services. planning exercise. * VDC participating in * Improvements in public services observed in 25% of implementation areas. planning and monitoring exercises of Local Govemment and Public Service. * Improvement of public services in project areas. Advocacy on legal, human, * No. of cases of rights * Poor and women comprise at least 50% of shalish committees. women's and children rights. violation. * At least 50% of target groups are able to recall 50% of key messages/content of * No. of cases of the training. violence against * No. of rights violation cases reduced by 25%. women and children. * No. of cases of violence against women reduced by 25%. * No. of shalish facilitated by VDC. * No. of successful mediation and conflict resolutions. Support to high risk * Referral system * At least 80% of identified women used referral system. pregnant mother. established. * At least 50% of identified women went to EOC. * No. of women taken to EOC. Livelihood skill. * No. of people trained. * At least 80% of successfully completed training. * No. of trained people * At least 50% of trained people able to get employment or credit. able to eam a living through employment or access to credit.
*ANC requires two dosage tetanus immunization, iron foliate tablets and other ante natal care package **PNC requires examination by health technician at least once during the 42 days after delivery to observe the health of the child and mother.
Implementation Arrangement
SDF will select four POs through a transparent process to ensure that competent organizations can participate. The draft TOR of the PO is provided in the OM. The selection will be based on well-defined criteria to ensure program quality and fairness. Since each of the packages will require services in several functional areas, it is very likely that one PO will be a partner of other specialized organizations
- 60 - and compete for the package. Implementation of the SAP will be in villages which are covered in the CAP. The OM provides detailed implementation modalities of SAP.
- 61 - Annex 2: Attachment 9
Pilot Private Financing of Community Utilities
Scope of the Pilot
The SDF is considering the use of matching grants to leverage private/PO/community participation in basic utilities. This pilot component will attempt to test and develop alternative financing and implementation modalities for delivery of basic utilities through the private sector/PO and community partnership. The sectors to be covered would be those which have good potential for generating substantial user revenues, i.e. rural piped water supply and off-grid electricity. Different approaches would be developed and tested in different localities in Bangladesh. After two years of implementation, these approaches would be the subject of independent evaluations to determine if and how each model should be expanded on a larger scale.
Background
The component will initially start with arsenic-free water supply. Bangladesh has had one of the largest programs in small-scale private provision for household water in the world. Almost 75 percent of the 10 million handpumps were privately financed. This thriving private sector participation is, however, limited to individual household systems, and recent experience has shown many of them to be drawing arsenic-contaminated water. The need for communities to access arsenic-free water may also necessitate the use of higher capital cost solutions than handpumps, and require the development of integrated systems rather than the self-supply system in use at present. There are several small scale, i.e., covering around 100-300 households private and quasi-private water-supply systems already operating in rural areas, with investment costs of around US$40,000 each. These community-based, piped water-supply systems reflect different institutional arrangements for development, financing, implementation and management. These programs have demonstrated initial successes, but key issues related to their sustainability, and the ability to scale up these approaches, such as institutional arrangements including group management, access to financing, cost sharing, and accountability need to be better understood. There is some interest among private entrepreneurs in forming partnerships with communities in the sale and distribution of water, but there is a lack of knowledge of the market and technology appropriate for rural areas and small towns. For other sectors, there are as yet no known initiatives to provide off-grid electricity supply in the country. However, the Government has recently selected four areas (Lalmonirhat, Kutubdia, Sandwip, and Debhata) for the promotion of private investments in renewable energy and off-grid electricity. Globally, there are successful programs for private sector-community partnerships in water supply and off-grid electricity.
Examples of several options are provided below to consider their applicability and pros and cons for small-scale water projects in Bangladesh.
One-time up-front contributions: An example of this type of scheme is the funding mechanism used for the Chilean rural electrification program. The scheme sees competitively awarded subsidies given to private companies bidding to provide services for both on-grid and off-grid subsidies. The subsidies are provided before construction of the scheme starts.
Payments against construction milestones: This approach has been proposed for the piloting of small-scale water systems in some towns in Paraguay, where the operator will be reimbursed with public
- 62 - funding a rate per connection achieved. It is also used in some rural electrification projects (e.g., in Guatemala). Some part of the funding may be provided upfront.
Payments against the achievement of operatingand performance targets: IDA funds were used to reimburse operating costs for the Guinea water lease, assuming that performance standards were met. Similar approaches have been seen in other infrastructure sectors. In the case of Peru, the Government funded the rollout of public telephones in rural areas, bidding them to the operator asking for the least subsidy. Of this subsidy, 60 percent was paid by installation, with the remainder paid in monthly installments over the next five years. assuming that the operating targets were met.
Subsidiesfor consumption to existing consumers: In Chile, the central government runs a subsidy scheme, which covers part of the water bill for households identified as being poor. TIhis has performance-based elements in that it pays for part of the cost of water actually delivered.
The type of scheme to be adopted depends upon a number of factors including:
* The nature of the scheme being financed. * The policy objectives, e.g., are they aimed at connecting people to a system, or provide support to those presently connected. * Ease of monitoring the performance of the facilities. * The extent to which the private service provider can obtain financing for construction of the facility. If local capital markets cannot support this, then it will be more difficult to structure a scheme where payments are made after the facility has been completed.
Likely structure of schemes in Bangladesh
The SDF is considering supporting relatively small schemes in villages in Bangladesh that would see piped supply from surface or ground water sources to household connections and/or stand-posts and some off-grid electricity supply. Mode of financing the different types of sub-projects would differ. It is expected that some projects would be developed by community groups, in particular the provision of water uncontaminated by arsenic. Electricity provision, however, might be more commercially viable and hence more likely to attract private entrepreneurs. SDF would use the following funding modalities when dealing with community groups and private entrepreneurs:
* Use a matching grant to mobilize community financing - SDF would provide a matching grant for not more than 70 percent of the capital cost to a consortium of a community entity and a credible PO to construct and operate the pilot project. These projects would have user fees paid for by members of the community and others using the facility.
* Use a grant to mobilize privatefinancing- SDF would provide a grant to either the community or the participating organization, which would disburse this on a performance-related basis to the private entrepreneur constructing and operating the project. These projects would have user fees paid by the members of the community and others using the facility. The grant would be no more than a fixed percentage of the total project cost. The remainder of the project cost would be funded by the private entrepreneur, who would recover this through the user fees.
The contractual arrangements governing these projects would have to be worked out initially on a case-by-case basis, but some the key considerations would be:
- 63 - * The need to encourage expansion of the networks through incentives for connections. * To what extent the service providers can obtain financing from commercial banks to bridge the gap between investments and payment. * The need to encourage efficient operation of the system, including ensuring it is providing sufficient quantities of water and also that water is being treated as necessary. * Providing a higher fraction of subsidies to facilities aimed at poorer users in the communities (e.g., stand posts).
The activities to be funded under the proposed credit would be:
Sub-component 1 -Technical Advisory Services
The Technical Advisory agency would undertake the following tasks: (a) assistance to interested communities, POs, and the private sector in the broad design of possible small piped-water supply and off-grid electricity, including technical design, assessment of commercial feasibility and requirements for subsidies and/or financing and hence possible role for SDF, options for structuring SDF support, and the proposed arrangements for the oversight and monitoring of service provision; (b) preparation of requests for proposals (RFPs) for small-scale private projects, including expected project scope, relevant technical details, form of assistance to be provided by SDF, e.g., structuring of any grant component, draft contracts between SDF and the service provider, and criteria for selection of service provider; (c) evaluation and appraisal of proposals from POs and the private sector, including assisting SDF in the awarding of projects on a competitive bid basis; (d) supervision of project implementation, including retaining auditors to evaluate progress and monitor achievement of performance targets by the service provider, which would relate to the support to be provided by SDF; and (e) recommending to SDF the release of payments to the service provider, based upon the results of this monitoring. Detailed draft TOR has been provided in the OM of the project.
Sub-component 2 - Pilot Projects in Community Utilities
The project will help pilot ten sub-projects in rural water supply in arsenic-affected areas and off-grid electricity anywhere in Bangladesh where potential for charging user fees exists. Support to these projects would follow the approaches outlined above, but the details will be decided on the basis of the feasibility work to be undertaken in sub-component 1. Eligibility criteria, financing mechanism, contracting procedures, and the Tripartite Financing Agreement will be acceptable to IDA.
- 64 - Annex 2: Attachment 10
Environmental Supervision
All sub-projects proposed for financing under the project would be subjected to an EA, with the following objectives:
* prevent execution of projects with significant negative environmental impacts * decrease potential negative impacts through adaptations in sub-project design or execution * enhance the positive impacts of sub-projects * prevent environmentally sensitive areas from additional stress caused by humans.
SDF has designated two of its staff - Community Development and Technical Managers - for environmental supervision. These staff members will require a certain level of environmental assessment capacity in order to insure that EA for the sub-projects are carried out in accordance with the EA manual, as well as to ensure that mitigation measures are adequately implemented by the proponents. Similarly, the PAST team members and CSOs will also need some environmental awareness and environmental assessment skills. SDF will arrange for environmental training for the Managers Cornmunity Development and Technical by February 28, 2003. SDF will contract an environmental agency with proven experience in these areas. The environmental agency will be responsible for holding a training workshop based on the project's OM requirements for environmental management of sub-projects. The training should focus on the enviromnental roles and responsibilities of the designated SDF Managers, as well as those of the PASTs and CSOs. The training should also highlight the environmental profile of the project areas, and any Environmentally Sensitive Areas, cumulative impacts, and the mitigation measures of negative impacts. After this training activity the Technical Officer should be able to train the CSOs and PAST members.
After this training activity the PAST members should be able to monitor and evaluate the environmental activities of the CSOs and Community Groups. The CSOs should be able to advise the PMC on how to fill out the Environmental Routing Slip using Form I of this manual. Most importantly, the CSOs should be able to undertake Environmental Screening and Environmental Review and be adept at using Forms II, mIand IV of this Manual.
The environmental assessment procedure consists of a number of steps, specified in this manual:
Step one: Filling out the Routing Slip (Form I) by PMC Step two: Filling out the Environmental Sensitivity (ES) Form (Form II) by CSO Step three: Filling out the Environmental Screening Form (Form IH) by CSO Step four: Filling out the Environmental Review (ER) Form by CSO, or Step five: Filling out the Limited Enviromnental Assessment (LEA) Form by environmental specialist Step six: Clearance of environmental screening, and review or assessment by SDF.
Step 1: Filling out the Routing Slip (Form I) by PMC
Each and every sub-project requires its own Routing Slip, as shown in Form I. All sub-project proposals require a Routing Slip, i.e., one is not valid without the other. The intention of the Routing Slip is to visualize the environmental history of a sub-project for purposes of Monitoring & Learning, or for Environmental Auditing. The Routing Slip has to be filled out as follows:
- 65 - * the first two components by the sub-project proponent during sub-project preparation; * the third, fourth and fifth component by the proponent (or a facilitating institution) during sub-project preparation.
In most cases this will be all that is required for the Routing Slip. Only for projects where moderate or serious environmental impacts are possible, the second page (sixth component) will have to be filled out by a responsible Environmental Officer appointed by the SDF. This Officer will also be responsible for the decision to implement or to stop the sub-project concerned. In case of a full Environmental hnpact Assessment (ELA) the Officer will also be responsible for provisions of the TOR.
Step 2: Fillingout the EnvironmentalSensitivity Form (Form II) by CSO
In order to determine the sensitivity of the area concerned, Form II is prepared. This Form. is self-explanatory. For various types of landscapes or resources it indicates the whereabouts and limits of the highly- and moderately-sensitive areas through the use of figures with the following meaning:
* 0 - low environmental sensitivity. * I - moderate environmental sensitivity. * 2 - high environmental sensitivity (areas with high biodiversity or important natural resources). * 3 - high population sensitivity (areas with high population pressure).
In the more sensitive areas some of the categories of sub-projects will not qualify for financial assistance, or only after submitting a full-fledged EIA.
No sub-project will be financed if it is found that the location of the said sub-project is rated 1, 2 or 3.
Step 3: Filling out the EnvironmentalScreening Form (Form III) by CSO
The purpose of environmental screening of sub-project proposals is to determine at an early stage:
* whether the sub-project is environmentally qualified for financing; * whether the sub-project is only qualified for financing if relocated in an environmentally less sensitive area; * whether the sub-project is only qualified for financing if some expected negative impacts are excluded or minimized through "mitigating measures", identified through a ER; * whether qualification for financing requires further environmental guidance through a LEA.
The environmental screening is carried out with the help of Form Im. This table requires the following sub-steps:
Sub-step 3a: Determination of the type of Sub-project
The first column of Form Ell shows a list of sub-project categories, expected to be proposed under the SIPP. The proponent should check in which category the sub-project concerned belongs. If a sub-project cannot be classified at all, the CSO should ask assistance from the SDF.
- 66 - Sub-step 3b: Determination of the Environmental Screening Level
The remaining columns of Form mIserve to determine what level of environmental screening is required. The significance of the columns is as follows:
* C - relatively little impact is expected; an ER will suffice. * C+ - only an ER; the difference between C and C+ sub-projects is that the latter will be favored by SLPP because of their expected positive enviromnental eflects. * B - some moderate impacts might evolve; an LEA needs to be carried out; * A - severe negative environmental impacts might evolve; and this project will not be funded.
In these columns, figures are indicated that correspond with the figures in Form II. By looking at these figures, the CSOs can see immediately whether the proposed sub-project will qualify for financing, and which environmental follow-up has to be given. The CSO simply note in which column the sensitivity level of the sub-project is indicated, and whether this sub-project requires an ER or an LEA.
When a figure is not available in any of the columns, the sub-project-will not qualify at all. When only the figure "0" is shown for a sub-project, it will only qualify for financing under SIPP if it is located in an area with relatively low environmental sensitivity. Most of Bangladesh, in fact, is r ated as a low-sensitive area for these small-scale projects. When the figure "0" is shown, but the proposed project is located in an area qualified as "1" (moderate sensitivity), the project will have to be relocated in order to qualify.
Step 4: Filling out the Environmental Review Form (Form 11) by CSO
For sub-projects with minor negative or only-positive environmental impacts, the simplest level of environmental assessment would be sufficient to prepare an ER.
For the ER the checklist in Form IV is prepared. The checklist again shows the categories of sub-projects expected to be relevant for the project. The first section lists potential negative environmental impacts, whereas the second section lists the major mitigating measures to minimize or eliminate these negative effects. In both sections the relevant impacts and measures are to be checked.
All checked items are included in the Routing Slip (Form I); which is handed over or sent to the sub-project approving authority. All identified mitigating measures should be included in or added to the sub-project proposal; to which the Routing Slip is attached. In cases of substantial adaptations, a reformulated proposal may be added as well.
Step 5: Filling out the Limited Environmental Assessment Form (Form dK by Environmental Specialist (s)
LEAs will be required for all sub-projects that potentially have moderate environmental impacts, or for which impacts are likely to be complex.
LEA requires more environmental expertise than an ER, and will have to be carried out by an environmental specialist (national consultant or contractor) or a large national PO with relevant in-house capacity. This will need to be contracted out by the SDF. Form V presents general TOR. Because of the limited scope, an LEA should not take more than two week, including field work to be finalized. The
- 67.. results will be presented to the sub-project approving authorities in the form of a report (maximum 10 pages).
Appraisal andApproval by SDFs PAST and MOEF
Sub-project proposals, Routing Slips, ER reports, and LEAs will need to be reviewed by SDF. For this purpose, SDF has recruited Manager Community Development and a Technical Officer to be responsible for environmental screening and supervision. In addition, team composition of PAST will include an Environmental Specialist. The recruitment process for contracting PAST has been initiated by SDF.
Desk and field appraisals should involve assessing if impacts have been correctly gauged, and if the mitigation actions proposed are sufficient to alleviate the potential impacts. If shortcomings are detected during the appraisal, the environmental assessment (usually a Routing Slip with attached ER, or LEA) should be retumed to the sub-project formulators, along with recommendations for modifying the proposal. After modifications have been made, the proposal and Routing Slip (Appendix I) with revised ER, or the revised LEA, may be resubmitted. If the appraisal shows that sufficient mitigation measures have been incorporated in the project design, the environmental assessment of the proposal is to be approved by SDF.
As per GOB regulations, all sub-projects require MOEF approval, but in practice this blanket requirement of having to seek approval does not appear to be implemented for most public sector projects in Bangladesh. In this case, it is recommended that the SDF should have this environmental assessment report and manual approved by the MOEF.
Implementation and Supervision by CSOs and PAST
Environmental supervision will be carried out by SDF's PAST so that strong links with field-based activities are maintained by the Foundation. The PAST will play a pivotal role in project implementation and supervision, as they will be present on a daily basis, and will stand to benefit directly from successful project implementation.
In theory, sub-project supervision will require the preparation of a supervision plan (as required by OD 13.05 on Project Supervision), but for SIPP it would be more practical to group together various sub-projects (e.g., on a sub-district basis) under a joint supervision plan. The supervision plan can be prepared by the SDF's PAST, or its preparation contracted out to consultants, contractors, or national POs.
During the construction or implementation phase, it is possible that certain unforeseen impacts may occur due to the sub-project. If significant, these should be reported to the SDF's Technical Officer, along with proposed mitigation measures, if these are known, and a revised sub-project budget. In the event of noncompliance, the proponents of the sub-project run the risk that the environmental auditors will identify the problem and report this to SDF. In the case of gross negligence, this may result in punitive actions, such as nonpayment of further installments.
Monitoring, Learning and EnvironmentalAuditing by CSOs, PAST, and Independent Auditors Environmental monitoring is directed towards measuring and evaluating changes brought about by the sub-projects and assessing the effectiveness of the mitigation measures proposed in the sub-project design. SDF will not be involved in direct monitoring of the effects of sub-projects or aggregates of sub-projects (i.e., groups of sub-projects), but will carry out monitoring of the environment in general.
- 68 - Annex 2: Attachment 11
Measurement of Poverty Indices and Findings of the Social Assessment Study
Measurement of the Poverty Indices
The Bangladesh Human Development Report 2000 estimated the IPI and HPI values by districts based on the following methodology. Income-poverty measures attempts to capture three aspects of poverty: its incidence, depth and severity. IP measures include the head-count index, poverty-gap index, and squared poverty-gap index. HPI is composed of three indicators, one of which is a composite of three sub-indicators, capturing deprivation in health, in knowledge, and overall economic provisioning. Deprivation of overall economic provisioning comprise two parts, public and private. Deprivation in public provisioning is represented by three indicators: (a) percentage of population without access to health services (percentage of children not fully immunized and percentage of deliveries not in institutions, or non-trained health workers); (b) percentage of population without access to safe water; (c) percentage of population not having power supply in their homes. Deprivation in private provisioning is represented by the indicator "percentage children under 5 who are malnourished". The exact formulation is : HPI = [1/3 (P3 +P3 + P3,)]" P, represents deprivation in longevity, measured by probability of dying before age 40; P, represents deprivation in knowledge measured by percent of adult illiteracy (multiplied by 2/3) and percent of children aged 6-14 not attending school (multiplied by 1/3); P3represents deprivation in economic provisioning, which is an average of the values of the two indicators, deprivation in public and private provisioning.
Findings of the Social Assessment (SA) Study.
The SA study identified potential groups of beneficiaries of SIPP who are expected to benefit from this kind of program and their needs. These groups includes poor women, female headed poor households, youth-at-risk, child labor, out-of-school children, the physically handicapped, victims of natural disasters, and some groups of the indigenous population. These groups usually are excluded from mainstream development programs due to social, cultural, and structural factors, and they constitute about 22 percent of the tribe population. The following sections describes the potential beneficiaries and their constraints which make them vulnerable:
Women: Although good progress has been achieved in women's development, gender inequalities still persist with regard to access to, and control over, resources, human development, economic opportunities, legal status, power, and political voice. Among the women, the poor and girls bear the largest and most direct costs of these inequalities. These disparities have significant negative impact on economic growth, poverty reduction efforts, and the general well-being of the population. Discrimination against women with respect to nutrition, access to education, and health services still persists, as demonstrated in high female child mortality, maternal mortality, and lower life expectancy for women. Early marriage and early and frequent pregnancies make poor women and adolescent girls more vulnerable to physical and mental abuse, STD, and HIV/AIDS infections. Although women have entered the labor market in large numbers, national data indicate persistent discrimination against women in the labor narket. About 62 percent of women are economically active, but the female share in total earned income is less than one-quarter (Human Development Center, 1997). On average, the daily wage rate of women is about half that of men, mainly because female laborers have less bargaining power (Zohir S, 1999). Though the Constitution of Bangladesh grants equal rights to women and men in all spheres of
- 69 - public life, in family matters, such as marriage, divorce, custody of children, and inheritance, personal law is practiced. Most of the existing personal laws discriminate against women, and hamper their right to exercise their free choice. All kinds of violence against women is reported to have increased in the last decade. Furthermore, recent loss of jobs by women in export-oriented ready-made garment industries and the return of migrant workers due to the international economic crisis could create social and economic pressures in Bangladesh. These groups are not only poor, but are vulnerable 'to economic and social shocks, and they usually are unable to improve their quality of lives due to social, legal, economic, and political constraints.
Tribalpopulation: According to the 1991 census, tribal people constituted about I percent of the total population of Bangladesh. Among the tribal groups, the majority are Chakma (21 percent), Marma (13 percent), and Saontal (17 percent). The majority of the tribal population (42 percent) reside in Chittagong Hill Tracts in the southeast of Bangladesh. Others are scattered in the hilly areas of north-west (Dinajpur), north-east (Sylhet) and north-central (Mymensingh). Among the tribal population, 37 percent are of Buddhists, 21 percent are Hindus, 18 percent are Muslim, 1 I percent are Christians and 13 percent follow other religions. Some of the tribal populations, such as Chakma, Marma, Garo, Monipuri, and Tripura are educated. A large number have moved to urban areas and generally work in the service sector. The tribal population living in rural areas work in agricultural labor, and some of them are among the poorest. Some families earn their livelihoods from poultry and livestock rearing, rickshaw/van pulling, and other manual labor. Consultations with tribal groups living in hilly areas and plain lands reveal that they are increasingly marginalized and economically deprived and have limited access to resources, as common property resources are encroached by the mainstream population. Furthermore, they are not able to utilize resources from forests as most of these are declared as protected land. Their children usually attend missionary and NGO schools. Tribal groups living in the plains and working in agricultural labor usually migrate with families between neighboring districts for seasonal work. They usually live alongside the mainstream population, but still with separate identities.
Child labor: Most working children in Bangladesh cannot go to school because their families poverty compels them to earn a living. Children's work is often viewed by their families as valuable opportunities for learning employable skills. According to the Report on the National Survey of Child Labor (1996), in Bangladesh a total of 6.3 million children between the ages of five and 14 are economically active. This is 19 percent of the total number of children in that age group in the country and 12 percent of the total work force. Child work is more prevalent in rural areas, as 83 percent of the children work in the rural areas, mainly in agricultural activities. Only about 4 percent of children work in the formal sectors, while the majority are involved in informal sector jobs, such as waste collectors, domestic servants (mostly female), and workers in informal factories. Although enrollment in primary schools has increased, there is a substantial number of out-of-school children (40 percent), mostly from the poorest families.
Other vulnerable groups are the physically handicapped population, people living in disaster prone areas, and artisan groups. About 10 percent of the population of Bangladesh is physically handicapped (Statistical Year Book, Bangladesh Bureau of Statistics, 1998). Thousands of people lose their assets and livelihood every year due to land erosion, floods, and other forms of natural disasters. Artisan groups (e.g., weavers, blacksmiths, pottery workers) are losing their niche markets due to competition with other modem commodities.
Prioritiesof the vulnerable groups: Social assessment further found that the communities are aware of their needs and priorities, but are unable to avail themselves of services and infrastructure due to lack of information, access, and empowerment. In general, the needs identified by these people included employment opportunities, health care, sanitation, education, safe drinking water, legal assistance, basic
- 70 - infrastructure (e.g., roads, culverts), and skill training. The indigenous population identified the need for education, health, fish cultivation facilities, skill training in weaving and cane processing, facilitation of horticulture cultivation, water, sanitation, and roads. Slum dwellers identified the needs for employment opportunities, micro-credit, rights to ownership/tenure for urban settlement, education, health, sanitation, and a safe water supply. For the hard-core poor, the provision of income-earning opportunities was the top most priority, followed by infrastructure development in the form of roads, schools, and health services. In the land erosion areas, priority was given to the rights to land, employment, and basic health, education, and sanitation services.
- 71 - Annex 2: Attachment 12
Summary of the Tribal Development Plan
Background
According to the 1991 census, the population of Jamalpur is about 1,874,440, of which 88 percent live in rural areas. Around 0.25 percent of the population are tribal, mostly Garo. Population of Gaibandha is about 1,949,274, of which 93 percent live in rural areas. Around 0.38 percent of the population are tribal, mostly Santal.
Tables 1 and 2 give the proportion of the tribal population to the total population in the rural areas and their geographic location.
Table 1: Proportion of Rural Tribal Population
Area Total Urban Rural Tribal Tribal % of Population Pop Pop rural Urban Rural tribal Gaibandha 1,949,274 137,497 1,811,777 1380 6079 0.3 Jamalpur 1,874,440 212,226 1,662,214 1914 2521 0.1 Total 3,823,714 349,723 3,473,991 3294 8600 0.2
The geographical distribution of tribal population in the project districts is as follows:
Table 2: Geographical Distribution of Tribal Population 7 Years and above (1991)
Area Rural Urban Total Jamalpur district 1885 1479 3364 Bakshiganj upazila 620 19 639 Dewanganj upazila 114 6 120 Islampur upazila 124 41 165 Sadar upazila 740 835 1575 Madarganj upazila 72 207 279 Melandah upazila 89 76 165 Sarishabari upazila 126 295 421
Gaibandha district 4540 1037 5577 Fulchari upazila 70 23 93 Sadar upazila 457 423 880 Gobindganj upazila 3080 76 3156 Polashbari upazila 192 105 297 Sadullapur upazila 356 64 420 Saghatta upazila 112 221 333 Sundarganj upazila 273 125 398
- 72 - The Garo population are living both in urban and rural areas of Jamalpur. The Garo groups living in urban areas work in the service and trade sectors, while the rural population's livelihood is mainly agriculture. Members of the Garo conumunity are mostly Christians, a large number are literate, and its members usually access public sector services. In Gaibandha, about 0.30 of the rural population are tribal, mostly Santal, with a few Oraon and Malpheri families. Out of seven upazilas in Gaibandha district, Santals are concentrated in the Gobindganj upazila, and are an extension of their main concentration in the northwest districts. Santals are scattered in only six unions (Kanidia, Katabari, Razarhar, Shapahar, Shapmara, and Gumaliganj) out of a total of 16 unions in Gobindganj. Tribal groups migrate in-and-out of Gaibandha for seasonal work and usually live alongside the mainstream population, but with a separate identity. The literacy level, health status, and awareness-raising of the majority of Santal families are low. They usually receive health and education services from missionary agencies and NGOs. A very few families have been able to make goocd progress in terms of social and economic status with higher education and diverse employment. Santals aure mostly landless. Eighty percent of them work in agricultural labor. Some families earn their livelihood from poultry and livestock rearing, rickshaw/van pulling. Only one NGO, Bangladesh Northern Evangelical Lutheran Church Foundation (BNELCF) has been implementing special programs for the advancement of the Santal population in Gaibandha. Few NGOs are providing services to the Garo population in Jamalpur.
The literacy rate among the population of these districts is low, but that for rural tribal groups is still lower. The literacy rate among rural tribes in the Project area is 17 percent, compared to the literacy rate of 24 percent in the district and 36 percent of the national population, as per the 1991 Census. The female and male tribal literacy rates is nine percent and 26 percent, respectively.
The most common health problems in the tribal areas are tuberculosis., acute respiratory infections, goiter, diarrhea and gastroenteritis. The common malmntrition problems found among the tribals are anemia, Vitamin A deficiency, and iodine deficiency diseases. The poor nutritional status among the tribals makes them more susceptible to infection, resulting in high mortality and morbidity. Lack of good personal hygiene, environmental sanitation, awareness of health, and health-seeking behavior among tribals constitute the major factors resulting ion their low health status.
Agriculture and agriculture labor constitute the mainstay of livelihoods for the majority of tribals living in rural areas. Land is the principal source of livelihood for the majority of the tribal population, due to lack of education and enterprise. With the depletion of products from the forest, the dependence of tribals on land for sustenance has increased even more. The tribal households possess relatively small pieces of land compared to other social groups, and they are mostly in agricultural labor. A few of the households keep livestock and poultry, which are important sources of income and nutrition.
2. Methodology for the preparationof TDP The methodology used included (a) desk review, (b) social assessment, and (c) consultations with the tribal population in the project districts. A detailed social assessment study of six districts was carried out to collect primnary data on livelihood strategies, risk-response and impact, access to formal institutions, programmers and projects, informal institutions, common property resources, and sustainable livelihood indicators of the poorest and vulnerable groups. The sample districts were selected by a team of experts in consultation with SDF and the World Bank, with experience in survey, PRA techniques, Focus Group Discussions (FGD) and interviewing key informants. In the field they were assisted by the NGOs, local government organizations, and the beneficiaries themselves. Consultations with tribal population were conducted in the two districts with tribal concentrations, Bandarban and Dinajpur, and the two project districts, Gaibandha and Jamalpur. Finally, national level consultations were also conducted with NGOs and representatives of the tribal population in Dhaka for finalizing the TDP.
- 73 - 3. Implementation Strategy The overall responsibility for the implementation of the TDP will be with the SDF's General Manager (Programs), who will be assisted by the two Managers (Social Assistance). These staff will be further supported by the CSOs, who will carry out the needs assessment surveys and prepare the community action plan, and NGOs, who will be contracted by SDF to implement the social assistance program. SDF has planned for a training session on in-depth understanding of the socio-cultural, economic, political, and religious lives of the tribal groups for all the SDF staff and its support organizations. The CSO and participating POs would be encouraged to recruit local tribal-educated youth as community facilitators, trainers etc., as appropriate.
Baseline Survey: The baseline survey would be conducted by SDF to provide data for subsequent impact evaluation.
Institution-building processes: There are villages exclusively inhabited by tribal groups and villages in which both tribal and non-tribal inhabit. Therefore, to address the needs of tribal in these different situations distinct strategies would be adopted. Likely processes are described below, and the actual implementation will be participatory and situation-specific.
(i) Exclusive tribal villages: The CSO would consult both men and women tribal leaders, on the kind of groups that would be formed from among the tribal families. VDC will include representatives from all tribal groups. It is likely that CG would be formed separately for each tribal sub-group.
(ii) Mixed Villages: Mixed villages would be of two types, tribal majority villages and non-tribal majority villages. In both cases, tribal CGs and the non-tribal CGs would perhaps be formed separately and representatives from each CG will form an inclusive VDC.
Community Infrastructure Works: The tribal groups through their institutions, would not only develop CAP, but would be responsible for implementation and monitoring of the plans thus prepared. In order to bridge their knowledge gap, tribal youth would be trained as volunteers and provided necessary inputs in managing that sector interventions. The tribal institutions would receive capacity-building inputs from the project staff and functionaries for the evolution and management of sub-projects. The capacity-building inputs for the tribal communities would include visits to successful interventions. The VDC would discuss the CAP and sub-projects in a meeting before submission to the SDF to ensure that the entire community is informed and gets a chance to give their advice and suggestions. The sub-project proposals would be submitted by the CG to SDF for funding.
Social Assistance Program: The objectives of the social assistance program are to increase the capacity of tribal groups to participate in mainstream development activities through: (a) advocacy programs; (b) occupation skills training; (c) support for pregnant women and risk-pooling pilot initiatives; (d) legal aid support; and (e) grants for the graduated trainees and worst affected natural hazard victims.
4. Linkages with various ongoing programs of line departments and POs In order to ensure effective services in the tribal areas, SDF, CSOs and POs, will ensure convergence and synergy with important line departments, such as health, education, child welfare and nutrition, agriculture, horticulture and fisheries development. SDF, CSO, and PO will facilitate linkages with other poverty reduction programs, such as micro-finance, vulnerable groups development, legal literacy, and human rights programs.
- 74 - 5. Monitoring and Learning
Monitoring formns are an integral part of the Project Management System, as it provides a continuous appraisal of performance of the Project and enables the Project Management to take up corrective measures, if any, required in implementation. The existing M&L System adopted in the ongoing SIPP, i.e., (a) input and output monitoring; (b) process monitoring; and (c) impact evaluation would ensure effective implementation of TDP, which forms part of SIPP.
For the purpose of monitoring and learning of TDP, basic data relating to village wise infornation on tribal population, infrastructure facilities, land utilization, cropping pattern, livelihood etc. would be recorded by CSO in the baseline. The project interventions planned in the village as part of the CAP and the project interventions actually implemented will also be captured in the M.I.S. The data collection would be the responsibility of the CSO, in association with the VDC. There will also be a third part monitoring, which will be recorded in MIS
The suggested monitoring indicators for different components for TDP would include: Monitoring Indicators Components Indicators Source Frequency Agency Economic Food Security Local Annual External conditions From own production assisted by the government Agency Project Registers & 1. Income generating activities assisted by Reports from the Project CSO/PAST/ 2. Mechanisms adopted to manage foocl beneficiary insecurity assessment, SDF 3. Increased income 4. Changes in livelihood (No.) 5. Improvement in skills (No.) Economic activities established (No.) Social 1. Representation and voice in VDC, CG Local Annual External conditions 2. Representation and voice in local government Agency government - Registers & 3. Participation in SIPP activities Reports from 4. Increased Enrollment in Schools CSO/PAST/ 5. Reduced Dropouts from schools beneficiary 6. Accessibility to education related assessment, SDF infrastructure 7. Infrastructure relating to school, access to villages 8. Mortality and Morbidity Process 1. No. of Tribal led VDC and CG formed Reports from Annul External followed 2. No. of Tribal VDC and CG able to Local Agency access funds from SDF for successful government, completion of CIW CSO/PAST/ 3. O&M of CIW satisfactory beneficiary assessment, SDF
- 75 - 6. Impact Evaluation: The important areas for conducting impact evaluation to assess the benefits which the tribal population would receive as a result of the project include:
(a) food security; (b) increase in enrollment and completion of primary education; (c) improved health status, reduced morbidity and mortality; (d) employment including income through off-farm and non-farm activities; (e) Improvement in living standards; (f) Improved status of women; (g) Improvement in the access to marketing, formal institutions, etc.; (h) Sustainable village institutions; and (i) Increased participation and voice in development.
- 76 - Annex 3: Estimated Project Costs BANGLADESH: Social Investment Program Project
, : : :s . <;-:' 2' _ .7-: . ta i%flS A. Strengthening of SDF 1.47 0.31 1.78
B. Institutional Development at Community-Level 0.36 0.00 0.36
C. Implementation of Community Action Plans 18.06 0.01 18.07
D. Pilot Private Financing of Community Utilities 0.81 0.00 0.81 0.00 0.00 Total Baseline Cost 20.70 0.32 21.02 Physical Contingencies 0.32 0.02 0.34 Price Contingencies 1.17 0.01 1.18 Total Project Costs' 22.19 0.35 22.54 Total Financing Required 22.19 0.35 22.54
Identifiable taxes and duties are 1.4 (USSm) and the total project cost, net of taxes, is 21.14 (US$m). Therefore, the project cost sharing ratio is 86.28 %of total project cost net of taxes.
- 7, - Annex 4 Economic Analysis BANGLADESH: Social Investment Program Project
Rationale for Community Driven Investment
The main justifications for community-driven investment include (a) complementing public sector programs; (b) correcting for market failures; (c) increasing effectiveness and sustainability of social investments; (d) scaling up poverty-reduction initiatives; and (e) making development inclusive.
(a) Complementing public sector activities. Experience has shown that policies aimed at promoting national economic competitiveness and state-run public investment programs are insufficient for poverty-reduction. These policies and programs often do not benefit the poor, and benefits often take years to trickle down. Community-driven investment offers the opportunity to fill this critical gap by achieving immediate and lasting results at the grassroots.
(b) Correcting Market failures. The market alone cannot provide all essential services and goods for poverty reduction. It often under provides public goods (e.g., roads, water supply, sanitation, quality education, and health care for poor people), and over-harvests common pool goods (e.g., forests, watersheds, and fishery resources). Although national state-run programs focused on investing in human and physical capital have the potential to redress some of these imbalances, experience has shown that central government programs are often slow to deliver basic services and are often ineffective in reaching poor people. Market and state-run activities can be effectively complemented by community-driven solutions that engage CBOs, local governments, NGOs, and the private sector. By using community-driven approaches and local actors to provide key goods and services, governments can support immediate poverty reduction by efficiently building human and physical assets at the local level.
(c) Increased effectiveness and sustainability. Community management of development investments usually results in lower costs and in more productively-employed assets. Studies of community-organized irrigation systems in Asia, for example, have repeatedly found that infrastructure constructed and operated by the farmers themselves, often without much external assistance, generate a higher level of agricultural productivity than more modem systems constructed by government agencies with substantial external assistance (Lam, 1998 and Tang, 1992). A recent study in Zambia compares CBO-managed and contractor-managed approaches to developing school infrastructure programs. Unit costs under the contractor approach were more than twice as high as under the CBO approach. Similarly, a recent study in South Africa shows that when CBOs are responsible for all aspects of the project (design, management, and monitoring), costs per beneficiary are less than half than when the CBOs are not decision-makers (Adato, Besley, Haddad, and Hoddinott, 1999). As consumers, community members are the most legitimate, informed, and reliable source of information about their own priorities. Community-developed facilities, such as health centers, schools, and water-supply systems, tend to have higher utilization rates and are better maintained than when investment decisions are made by actors outside of the community. Experience also demonstrates that demand is better articulated when communities contribute to investment costs and control investment choices. A water supply study of 1,875 households in rural communities in six countries (Benin, Bolivia, Honduras, Indonesia, Pakistan, and Uganda) suggests that water system sustainability is significantly higher when communities control key investment decisions and when they pay part of the investment costs, ensuring that they get what they want and are willing to pay for (Sara and Katz, 1997).
- 78 - (d) Scaling up poverty-reduction efforts. Because community-driven development devolves responsibilities and resources to the local level, activities can occur simultaneously in a large number of communities without being constrained by a central bureaucracy. When poor communities are entrusted to drive development, and are provided with appropriate information, support, and clear rules of the game, a system can be put in place not to provide for poor people, but to facilitate their active and ongoing role in rolling out poverty-reduction efforts.
(e) Inclusive Development. Representative CBOs can provide voice and empowerment to groups that are typically excluded from the development process. The interests of women, indigenous groups, ethnic minorities, and the disabled might not be effectively expressed through standard political and economic structures. If these minority groups are actively involved in CBOs, they will help make development processes more inclusive.
Economic Analysis
The economic analysis for infrastructure sub-projects demonstrates the economic justification of undertaking the community-driven development actions described earlier through a "least return," cost-benefit analysis which would ask by how much the productivity of people would need to be increased to make the investment viable. This type of analysis has been done on water and sanitation sub-projects. (Ideally, a cost effectiveness analysis of community infrastructure irmplementation by line agencies and NGOs should have been performed, but this was not possible because of lack of reliable data.) For rural markets, a standard EIRR was calculated based on the spoilage saving method.
Economic Analysis for water and sanitation investments: In order to verify whether the level of benefit required to produce an economic rate of return above 12 percent is reasonable, iterations of the ERR have been produced for water supply systems and sanitation. If the level of the key parameters that ensures economic returns above 12 percent is unrealistic (i.e., greater than a realistic threshold), the project will be considered unviable. The key parameters on which the analysis is carried out are: (i) the incremental time savings generated by reduced time for fetching water due to the proximity water supply; and (ii) the incremental working days due to better health conditions associated with improved sanitation. The assumptions of the analysis are presented below.
Average household size 6 Incremental time savings due to reduced water fetching (hours/hh/day) 1-3 Incremental working days due to improved health conditions (days/hh/year) 1-12 Opportunity cost of unskilled labor (Tk/day) Assumed at 80 percent of ongoing 40 unskilled rural wage rate. Number of working hours in one working day 8 Time allocated for income generation (percent) 10 Time allocated for leisure (percent) 90 Value of leisure (percent of opportunity cost of unskilled labor) 20 O & M cost (percent of investment cost) 10 Useful life of investments (years) 20
Only 10 percent of time saved is assumed to translate into income generation while the remaining 90 percent, valued at 20 percent of the opportunity cost of labor, would be spent for leisure. Assumptions on the range of time savings and additional working days are from a similar project in Pakistan (ASK Community Infrastructure and Services Project - ICR). The costs of the water supply and sanitation actions are based on detailed costing of ongoing projects by NGO Forum, an umbrella organization for
- 79 - water supply and sanitation projects in Bangladesh. Water supply and sanitation have been considered as a package jointly implemented at community level. They include both the software cost of community awareness raising, mobilization, and investment planning, as well as the hardware cost of water supply and sanitation construction and establishment. A standard conversion factor of 0.9 was applied to convert to economic prices. The duration of the analysis is 20 years, based on the average useful life of water supply and sanitation projects.
ERR of community water supply and sanitation systems according to incremental time savings and incremental working days
ERR sensitivity to: Incremental time savings due to reduced water .______Ifetching Incremental working days due to improved health I hour/day/hh2 hours/day/hh3 hours/day/hh I day peryear per household -1%, 24%, 51% 2 days peryear per household 2%, 25%, 54% 6 days per year per householk 10%, 33%, 66% 1 day per month per household 20%, 47%, 87%
These results indicate that the viability of community-driven investments in water supply and sanitation systems can be viable under reasonable assumptions of incremental time savings, as well as working days generated by their implementation. The thresholds of incremental time savings and working days that ensure the economic viability of the investments are 2 hours/day/household of time savings and 1 incremental working day/month/household, respectively. Both these assumptions seem reasonable, realistic and fall within the initially-defined range of value for these parameters. Based on these considerations, these water supply and sanitation investments can be considered as economically viable.
Economic Analysis for Rural Markets: The benefits of rural market development were estimated on the basis of increase in spoilage savings of the sellers of selected perishable items in developed markets compared to underdeveloped status. Seven commonly-marketed, perishable items namely, fish, meat, eggs, fruits, vegetables, rice, and milk were included in estimating the spoilage savings of the sellers. The economic life of the markets has been considered to be 20 years.
For annualizing, spoilage savings in percentage was first applied to the tumover of the perishable items per market day to arrive at spoilage savings in value terms per market day. Annual spoilage saving has been estimated by multiplying the spoilage savings per market day by the total frequency of assembling of the particular markets, assumed to be 104 days for those that assembled twice a week and 52 for once a week. This has been assumed to be the annual benchmark estimate of spoilage savings due to market development. To arrive at benefit streams for the entire life of the market in real terms, the benchmark spoilage savings was projected at the stipulated annual growth rate (of the turnover of the selected perishable items) of five percent. Based on these assumptions, the ERR is estimated to be 30.6 percent.
Community Financial Contribution (US$ Total Project Community Government | IDA Cost I II (US$ M) Project Costs 22.54 2.69 1.61 18.24 Share of Total Project Cost (%) 100 12 7 81
- 80 - Annex 5: Financial Summary BANGLADESH: Social Investment Program Project Years Ending In US$ Milion
I Year1 I Year 2 | Year 3 I Year 4 | Year 5 i Year 6 T Year 7 Total Financing Required Project Costs Investment Costs 1.9 5.8 6.7 6.5 0.0 0.0 Recurrent Costs 0.2 0.4 0.5 0.5 0.0 0.0 Total Project Costs 2.1 6.2 7.2 7.0 0.0 0.0 0.0 Total Financing 2.1 6.2 7.2 7.0 0.0 0.0 0.0 Financing IBRD/IDA 1.7 5.1 5.8 5.6 0.0 0.0 0.0 Govemment 0.2 0.5 0.4 0.5 0.0 0.0 0.0 Central 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Co-financiers 0.0 0.0 0.0 0.0 0.0 Communities 0.2 0.7 0.9 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 2.1 6.3 7.1 7.1 0.0 0.0 0.0 Main assumptions: The implementation period is four years which would be spread over five fiscal years.
-81- Annex 6: Procurement and Disbursement Arrangements BANGLADESH: Social Investment Program Project
Procurement
The total value of the project is US$22.54 million, of which IDA Credit will finance US$18.24 million. Procurement under the project will largely involve community sub-projects, followed by consultants' and PO services, and small quantities of goods.
The SDF will have responsibility for overall procurement management and ensure that procurement procedures, criteria, and documentation agreed with IDA are in compliance. This will include procurement under sub-projects implemented by community groups. These responsibilities are described in Annex 2, Attachment 6 and the OM.
Procurement arrangements will utilize the procedures established and the lessons learned from other community-driven and social investment projects financed by the Bank. All IDA-financed procurement of goods and works will follow procedures outlined in the Bank's Guidelinesfor Procurement under IBRD Loans and IDA Credits, published in January 1995, and revised in January and August 1996, September 1997, and January 1999. Consultants' and PO services, including training, will be procured in accordance with the Bank's Guidelines: Selection and Employment of Consultants by World Bank Borrowers, published in January 1997, and revised in September 1997, January 1999, and May 2002. Procurement of goods, works, and services will follow the Bank's approved/standard documents.
Demand-Driven Community Sub-projects (US$14.75 million)
Small-Scale Community Infrastructure Sub-projects (US$13.99 million): The nature and composition of community infrastructure sub-projects financed under the project is described in Annex 2, Attachment 6 and the OM. In the interest of certain specific social objectives of the project, it is desirable to call for the participation of local communities and POs, increase the utilization of local know-how and employ labor-intensive and other appropriate technologies. It is expected that approximately 1,800 sub-projects would be financed under the project in about 1,400 villages in two districts. Rural communities from the project villages in these two districts are expected to submit project proposals for matching-grant funding, using resources provided under the project. Sub-projects would consist of proposals for small-scale community infrastructure works, implemented directly by the CG, represented through its PMC. The menu of sub-project options includes rural connecting roads, culverts, foot-bridges, drainage, small markets, boat landing jetties, and different types of water and sanitation schemes which will be eligible for financing. The total cost of each community-managed sub-project will not exceed US$8,200 equivalent. Communities will be required to contribute 15 percent of the total capital investment upfront both in cash and in-kind (labor, materials, and service), as well as bear the full operation and maintenance costs (about three percent of sub-projects' costs).
The PMC will take primary responsibility for hiring skilled workers and procuring materials. In certain situations, hiring of local contractors or of technical services may be necessary. The community will hire the contractor, based on receiving three quotations, with the proviso of direct contracting where receipt of three quotations is not feasible. In the case of quotations, works shall be on the basis of lump-sum/fixed price/unit rate contracts to qualified contractors awarded in response to a written invitation. The written invitation shall include a detailed description of the works, including basic specification, the required completion date, a basic form of agreement acceptable to the Association, and relevant drawings, where applicable. The award shall be made to the contractor who offers the lowest
- 82 - price quotation for the required work, and who has the experience and resources to complete the contract successfully. A draft sample invitation for quotations with form of contract is included in the OM.
The CG would be supported by the CSO appointed by SDF. Standard price lists for materials will be maintained by SDF and provided to the CSO. SDF would update the price lists every year. These estimates would-be used by communities as price ceilings to guide their procurement. The specific procurement responsibilities of the PMCs and the procurement guidelines will be clearly explained by CSO during the orientation and training that would precede each sub-project implementation. In addition, PAST of SDF will ensure quality control. SDF will disburse funds to the community-managed sub-projects directly in tranche against certified progress/completion by PAST. A draft sample financing agreement between SDF and the community, specifying the mode and triggers for payment, is included in Annex 2, Attachment 7.
Pilot Private Financing in Community Utilities (US$0.76 million): In addition to the community infrastructure sub-projects, drawing upon the lessons from successes within and outside the country, under this sub-component, SDF would develop and test new approaches by using matching grants to pilot private/PO/community participation in basic utilities, such as, arsenic-free water supply, off-grid electricity supply. Depending on the type of community utilities, SDF would provide grant financing for not more than 70 percent of the capital cost to either a community or a credible PO, or a combination of the two, which would disburse this on a performance-related basis to the private entrepreneur constructing and operating the project. The pilot sub-project cost will not exceed US$70,000. The contracting procedure .will be similar to those for community infrastructures and be on the basis of competition through open advertisement. SDF will appoint a Technical Advisory agency to assist with, inter alia, contracting arrangements acceptable to IDA, and provide oversight during implementation.
Goods (US$0.40 million)
Goods to be financed under the Credit include computers, audio-visual equipment, photocopiers, air conditioners, four vehicles, and office equipment. All procurement under the project is expected to involve small contracts, with estimated cost less than US$200,000. (Most contracts have a value of less than US$40,000, excepting vehicle contracts that exceed US$ 100,000.) The nature of these small contracts is unlikely to attract the interest of foreign bidders, as such procurement will not involve intemational competitive bidding.
National Competitive Bidding (NCB): Goods and equipment contracts estimated to cost less than the equivalent of US$200,000 per contract may be procured using NCB, up to an aggregate amount of US$200,000.
International/NationalShopping (IS/NS): Up to an aggregate limit of US$300,000, goods of very small contracts or individual purchases of off-the-shelf items with an estimated value less than the equivalent of US$20,000 per contract may be procured through prudent shopping procedures by soliciting price quotations from at least three suppliers, with the exception of vehicles which may be procured following shopping procedure with an estimated value less than the equivalent of US$65,000 per contract.
Direct Contracting(DC!: Goods with individual contract costs less than the equivalent of US$2,000, up to an aggregate limit of US$20,000, may be procured following DC.
- 83 - Services and Training (US$5.77 million)
Consultants' Services: Major consulting services include community support, process monitoring, impact evaluation, information strategy development, project appraisal and supervision, technical assistance for private financing community utilities, capacity-building, and MIS.
Oualitv and Cost-Based Selection (QCBS): Consulting services through firms estimated to cost US$100,000 equivalent or more per contract will be procured following QCBS. Major contracts include impact evaluation, project appraisal and supervision.
Selection under Fixed-Budget (SFB)lConsultants' Qualifications (CQ): Services through firms estimated to cost less than the equivalent of US$ 100,000 per contract may be procured following either SFB or CQ. Major contracts for SFB include MIS design, infornation and communication strategy, and procurement audit. Contracts fro CQ includes preparation of documentary films and audit service.
Single-Source Selection (SSS): Consultants' services through firms, satisfying Consultants' Guidelines (paragraphs 3.8 to 3.11) and with estimated cost less than US$100,000 equivalent per contract, will be procured following SSS. Major contracts include: process monitoring and technical assistance for private financing in community utilities.
Selection of Individual Consultants C): Services for assignments for which teams of personnel are not required and the experience and qualifications of the individual are important, will be procured in accordance with Section V of the Consultants' Guidelines. Individuals will be selected on the basis of their qualifications for the assignment. Contracts for specialists include evaluation, MIS, procurement, and capacity building.
POs' Services: Two sets of POs will be contracted under the project for providing: (i) community support services and (ii) social assistance. POs providing community support are referred as CSO in the project. Two CSOs operating in two districts will undertake the following major activities: conduct extensive informnation and communication campaign, undertake community mobilization, identify local needs, carry out participatory planning, and training, and assist the community with sub-project preparation. Four POs in two districts will provide social assistance services targeted at the poorest and vulnerable group through the following activities: advocacy programs on social and environment aspects, education, women's health, immunization, nutrition, human and legal rights, legal aid training and occupational skills.
The services of the CSOs will be selected following QCBS, with selection criteria described in the OM. Contract payments will be on the basis of performance triggers. The selection process of CSO has been initiated and SDF has already received proposals. POs for social-assistance programs will be selected following a fixed-budget method (i.e., as per the budget disclosed in the request for proposals). However, under this method the budget shall remain fixed along with the line items. POs will submit only technical proposals and need not submit any financial proposals.
Incremental Operating Costs (US$1.14 million)
Incremental operating costs will be financed by IDA on a declining basis. This includes salaries of project staff, office utilities, office rent, supplies, fuel, maintenance of equipment, and vehicles.
- 84 - Procurement and Selection Planning A draft Procurement Plan for goods and Selection Plan for services have been prepared and attached in the Project Implementation Plan (PIP). Prior to issuance of any invitation for bids for procurement of goods and selection of consultants/POs for services, the proposed Plan shall be furnished to IDA for its review and approval, in accordance with the provisions of paragraph 1 of Appendix I of the respective Guidelines. Procurement of goods and selection of consultants/POs will be undertaken in accordance with Plans approved by IDA and with the provisions of said paragraph I of Appendi. 1 of the respective Guidelines.
Use of Standard Documents
For NCB procurement, SDF will use the Standard Bidding Documents for Goods approved by IDA. For selection of consulting firms, the Bank's Standard Request for Proposals (RFP), including standard contract form, will be used. For selection of POs, SDF will use the RFP-approved by IDA. The Bank's Standard Bid Evaluation Form for goods and Sample Form of Evaluation for consultants' services will be used for submission of evaluation reports to IDA.
Prior Review Thresholds
Goods: IDA will carry out a prior review of the following contracts: all contracts estimated to cost US$ 100,000 equivalent or more irrespective of procedures, and the first two contracts each for procurement under NCB and shopping regardless of value. For shopping, the review will include request for quotations, evaluation of quotations, and the purchase order.
Consultants'/POs' Services: IDA's prior review will be required for consultants'/POs' services contracts estimated to cost US$ 100,000 equivalent or more for firms, and US$50,000 equivalent or more for individuals. IDA's prior agreement will be required for contracts under single-source selection, regardless of value.
Post Review
For community sub-projects, all contracts are below the prior review threshold of IDA. For compliance with the Bank's procurement procedures, post review will be carried out for community sub-projects and other contracts that are below the prior review threshold. The project also includes finds for carrying out procurement audit of below-threshold contracts by an independent auditor. Such review (ex-post and audit) of contracts below the threshold will constitute a sample of about 30 percent of the contracts.
Review of Procurement Performance
IDA will monitor the compliance with the requirements cif the Bank's different procurement methods and performance standards on a continuous basis. As part of the project's planned mid-term review, a comprehensive assessment of procurement performance will also be carried out. Based on the review, in consultation with the government, IDA may revise the prior review threshold, including the procurement and selection methods.
Acceptability of NCB
In order to ensure economy, efficiency, transparency and broad consistency with the provisions of Section I of the Procurement Guidelines these measures should be followed:
- 85 - (i) standard bidding documents approved by the Association shall be used;
(ii) invitations to bids shall be advertised in at least one widely circulated national daily newspaper, and bidding documents shall be made available to prospective bidders, at least 28 days prior to the deadline for the submission of bids;
(iii) bids shall not be invited on the basis of percentage premium or discount over the estimated cost;
(iv) bidding documents shall be made available, by mail or in person, to all who are willing to pay the required fee;
(v) foreign bidders shall not be precluded from bidding, and no preference of any kind shall be given to national bidders;
(vi) qualification criteria (in case pre-qualifications were not carried out) shall be stated in the bidding documents, and if a registration process is required, a foreign firm determined to be the lowest evaluated bidder shall be given reasonable opportunity of registering, without any let or hindrance;
(vii) bidders may deliver bids, at their option, either in person, by courier service, or by mail;
(viii) all bidders shall provide bid security, as indicated in the bidding documents. A bidder's bid security shall apply only to a specific bid;
(ix) bids shall be opened in public in one place immediately, but no later than one hour after the deadline for submission of bids;
(x) evaluation of bids shall be made in strict adherence to the criteria disclosed in the bidding documents, in a format and specified period agreed with the Association;
(xi) bid shall not be rejected merely on the basis of a comparison with an official estimate, without the prior concurrence of the Association;
(xii) split award or lottery in award of contracts shall not be carried out. When two or more bidders quote the same lowest price, an investigation shall be made to determine any evidence of collusion, following which (a) if collusion is determined, the parties involved shall be disqualified and the award shall then be made to the next lowest evaluated and qualified bidder; and (b) if no evidence of collusion can be confirmed, then new bids shall be invited after receiving the concurrence of the Association;
(xiii) contracts shall be awarded to the lowest evaluated bidders within the initial period of bid validity so that extensions are not necessary. Extension of bid validity may be sought only under exceptional circumstances;
(xiv) extension of bid validity shall not be allowed without the prior concurrence of the Association (a) for the first request for an extension if it is longer than eight weeks; and (b) for all subsequent requests for an extensions, irrespective of the period;
- 86 - (xv) negotiations shall not be allowed with the lowest evaluated or any other bidders;
(xvi) re-bidding shall not be carried out without the Association's prior concurrence; and
(xvii) all contractors or suppliers shall provide performance security, as indicated in the contract documents. A contractor's or a supplier's performance security shall apply to a specific contract under which it was furnished.
Reporting
The project will prepare quarterly Procurement Monitoring Report (PROCMOR), as per specific formats agreed with SDF and GOB.
Procurement Management Capacity
Capacity Review and Risk Assessment: The Country Procurement Assessment Report (CPAR), broadly accepted by the Government in February 2001, stated procurement as a generic problem in Bangladesh. The CPAR recommended for procurement reform with a.series of actions. The Government has embarked upon public procurement reform with IDA technical assistance (Public ProcurementReform Project- PPRP). The project has provisions for providing extensive procurement training to public sector staff, including private participants.
At the agency level, SDF will carry out small procurement of goods, followed by selection of consultants and POs. Community sub-projects will be handled directly by the community groups, represented by PMC. However, SDF will have overall responsibility of procurement management and ensure compliance with procurement procedures, criteria, and documentation agreed with IDA. Keeping this in mind, the team reviewed the procurement management capacity of SDF with a view to: evaluate the capability of the implementing agency and of the adequacy of procurement systems in place to administer Bank-financed procurement, assess the risks that may negatively affect ability of the agency to carry out the procurement process, and develop an action plan to be implemented as part of the project to address the deficiencies. The assessment included organizational aspects, skills of staff, and suitability of rules and regulations applicable to the agency.
SDF, being a new organization, has no previous experience with IDA-financed procuLrement. The MD of SDF is a former Controller and Auditor General of the Government. His extensive experience in accounts and audit provides some comfort relating to the internal control and procurement activities under this organization. SDF has recruited a Procurement Manager, who is exclusively responsible for handling all procurement matters, including community contracting. Although SDF will have overall responsibility for procurement management, community sub-projects, involving about 65 percent of the project costs to be used in about 1,400 villages of two districts, will be implemented directly by CG. Each CG will be represented by a PMC comprising about nine members and headed by a president. Both at SDF and at the community-level specific expertise in procurement will be required. Based on the review, there are substantial risks associated with procurement.
Strengthening Procurement Capacity: To mitigate the procurement-associated riskcs, strengthen procurement management capacity, and ensure advance procurement actions as part of the project preparation, the following arrangements have been made/agreed:
- 87 - (i) in accordance with the SFA between SDF and PMC, for each sub-project with a ceiling of US$8,200, SDF will disburse funds to the community in three tranches against certified progress/completion by SDF-appointed PAST;
(ii) CSOs will provide hands-on training to the community to handle small procurements in accordance with the community-contracting procedures included in OM. A short procurement training has already been provided to SDF staff by the Bank's resource persons. This will be followed by a specific training on community-contracting procedures, once the CSOs and PAST are selected;
(iii) SDF will appoint a procurement consultant for about six person-months spreading over the project period to assist in procurement matters. SDF has already identified this consultant;
(iv) SDF has formed a Procurement Core Team (PCT), headed by a General Manager and staff with procurement, commercial, financial, community development, and technical expertise. The TOR of the PCT includes: preparation of procurement plan, community contracting documents, request for proposals for selection of consultants and POs, bidding documents for goods, inviting bids, short-listing of consultants/POs, evaluation of bids/proposals, awarding contracts, and monitoring contracts' implementation; and
(v) post reviews and procurement audit of a sample of about 30 percent contracts will be carried out.
- 88 - Procurement methods (Table A)
Table A: Project Costs by Procurement Arrangements (US$ million equivalent)
%'q ,bk. N I h~~~~~~~~~~~~Nt'.O f, t W 1. Works 0.00 0.00 14.75 0.00 14.75 (0.00) (0.00) (12.51). (0.00) (12.51) 2. Goods 0.00 0.13 0.31 0.00 0.44 (0.00) (0.07) (0.25) (0.00) (0.32) 3. Services 0.00 0.00 5.77 0.00 5.77 (0.00) (0.00) (4.61) (0.00) (4.61) 4. Staff Salaries and Operating 0.00 0.00 1.14 0.00 1.14 Cost (0.00) (0.00) (0.80) (0.00) (0.80) Operations and Maintenance 3/ 0.00 0.00 0.44 0.44 (0.00) (0.00) (0.00) (0.00) (0.00) Total 0.00 0.13 21.97 0.44 22.54 (0.00) (0.07) (18.17) (0.00) (18.24) "Figures in parenthesis are the amounts to be financed by the IDA Credit. All costs include contingencies. 2'Includes (i) community sub-projects implemented by the communities and private pilot financing for community utilities; (ii) goods to be procured through shopping and direct contracting; (iii) consulting and PO services to be procured following: quality- and cost-based selection, selection under fixed-budget, consultants' qualification, single-source selection, and individual consultants' methods; and (iv) incremental operating costs. Also includes community contribution of (i) US$2.30 million for investment costs (about 15 percent of sub-project costs). 3/ Includes community contribution of US$0.44 million for operation and maintenance of community sub-projects (about three percent of sub-project costs).
-89 - Table Al: Consultant Selection Arrangements (optional) (US$ million equivalent)
* 44 ;X.,,,s s. ^.J-Selectloni,f Method o>0 nIofsu taint Se&iceS - F4 - z Eipenditu e ,Catego ¢QCBS ;-- e. QBS , ; ~SFB i^e LCSrI ""CQ -Other . NIB.F- Total, ost A. Firms 1.54 0.00 3.80 0.00 0.18 0.18 0.00 5.70 (1.23) (0.00) (3.04) (0.00) (0.14) (0.14) (0.00) (4.55) B. Individuals 0.00 0.00 0.00 0.00 0.00 0.07 0.00 0.07 (0.00) (0.00) (0.00) (0.00) (0.00) (0.06) (0.00) (0.06) Total 1.54 0.00 3.80 0.00 0.18 0.25 0.00 5.77
_ (1.23) (0.00) (3.04) (0.00) (0.14) (0.20) (0.00) (4.61) 1\ Including contingencies
Note: QCBS = Quality- and Cost-Based Selection QBS = Quality-based Selection SFB Selection under a Fixed Budget LCS = Least-Cost Selection CQ = Selection Based on Consultants' Qualifications Other = Selection of individual consultants (per Section V of Consultants' Guidelines), Commerc Practices, etc. N.B.F. = Not Bank-financed Figures in parenthesis are the amounts to be financed by the Bank Credit.
- 90 - Prior review thresholds (Table B)
Table B: Thresholds for Procurement Methods and Prior Review
SS:421'''';t.-6 '. ;.l 1. Works < US$ 10,000; (a) Community Post-review (a) Small scale participation community infrastructure sub-projects Total value of contracts subject to prior review: Overall Procurement Risk Assessment High Frequency of procurement supervision missions proposed: One every six months (includes special procurement supervision for post-review/audits). Besides, as part of the fiduciary control, Bank's staff will carry out post review of contracts, in addition to procurement audits by independent auditors. months (includes special procurement supervision for post-review/audits) *SFB-Selection under fixed budget in accordance with a budget disclosed in the request for POs. POs do not submit any financial proposals. *SFB-Selection under fixed budget in accordance with a budget disclosed in the request for POs. POs do not submit any financial proposals. Thresholds generally differ by country and project. Consult OD 11.04 "Review of Procurement Documentation" and contact the Regional Procurement Adviser for guidance. - 91 - Disbursement Allocation of credit proceeds (Table C) Table C: Allocation of Credit Proceeds {2gf xtenBdi~re+gaw,' . nou,inU6mil116n ;' 9R^;,,E+'i'd'i,ieretg..:-,.,, Community Infrastructure Sub-Project 10.94 85 percent of total eligible expenditure (small-scale) Community Utilities with PO/Private 0.56 70 percent of total eligible expenditure sector/coinmunity partnership)* Goods including Vehicles and 0.29 100 percent of foreign expenditure, 100 Equipment percent of local expenditure (ex-factory), 70 percent of local expenditure for the items procured locally Services including POs; private audit 4.38 80 percent and training Incremental Staff Salaries and 0.74 80 percent in FY03 and FY04 and 60 Operating Costs percent thereafter Unallocated 1.33 Total Project Costs 18.24 Total 18.24 *The project would provide matching grant maximum of 70 percent of the capital cost of the sub-project. Use of statements of expenditures (SOEs): Transaction based or traditional disbursement procedures will be applicable for withdrawal of funds from IDA Credit. IDA will require full documentation for all prior review cases where contracts exceed the equivalent of: (a) US$100,000 for goods; (b) US$100,000 for service contracts with firms; and (c) US$50,000 for individuals. Expenditures below the above threshold and all expenditures under community infrastructure sub-projects, community utilities, incremental staff salaries and operating costs, and training expenses would be claimed on SOEs. During the initial supervision by IDA, the mission will closely review the community infrastructure and community utilities sub-projects' expenditures to ensure that the fund is utilized for the intended purposes and in accordance with eligibility criteria described in the OM of this project. Any deviations noticed during such reviews would be noted for remedy and improvement. - 92 - Special account: For utilization of IDA's share of project expenditures, SDF may open and maintain in a commercial bank, on terms and conditions acceptable to IDA, a Special Account in Convertible Taka (CONTASA) under the Credit in accordance with MOF circular of September 02, 1991, revised on May 4, 1992 and December 24, 1992. SDF will be responsible for managing the Special Account, including submission of withdrawal of applications to IDA. The authorized allocation of the Special Account will be equivalent to three to four months of estimated expenditures, estimated to be US$1.80 million equivalent. At the start of the project, the initial deposit to the Special Account will be limited to US$ 1.00 million equivalent. The remaining amount of the authorized allocation (US$0.80 million equivalent) may be requested only after cumulative disbursements reach the equivalent of SDR 3.00 million. It has been agreed that a comprehensive training on withdrawal of funds shall be provided to SDF staff before Credit Effectiveness. In addition, there will be regular hands-on training on disbursement to the SDF staff. Retroactive Financing In order to expedite project implementation, MOF has provided start-up funds for the establishment of SDF and procurement of essential goods and services. Govermment of Bangladesh (GOB) has requested retroactive financing, i.e., Bank's reimbursement from the proceeds of the IDA Credit, not exceeding US$0.30 million equivalent in respect of (a) procurement of goods (US$0.05 million), (b) consultants services (US$0.07 million), and (c) staff salaries and operating costs (US$0. 18 million). In order to be eligible for retroactive financing, procedures for procurement, the use of consultants, and processing and clearance are subject to the Bank's Procurement and Consultant Guidelines. In addition, documentation requirements for expenditures claimed under retroactive financing are the same as those for disbursement against payments made after the Credit Agreement is signed and effective. Financial Management Assessment There are no significant country issues that may affect project implementation. The generic problem of lengthy procedures in releasing government counterpart funds is not expected to be an issue in this project because agreement has been reached that GOB will provide its contribution to SDF in two installments. The first installment will be provided within 30 days after completion of negotiations for the Credit for this project and the second one by June 30, 2004. Strengths: SDF has prepared an FM Manual to govern all financial management aspects of the project, including financial management at the community level. The Manual is a part of the project's OM and would be revised and improved periodically, based on implementation experience. The FM manual includes, inter alia, the following aspects: (a) organization and staffing of the financial functions, including the qualifications, experience, and TOR of the key financial staff (General Manager, Finance, Manager Finance, and Accountant); (b) flow of funds from IDA to Government to SDF and from SDF to the CGs; (c) simple accounting system to be followed by the CG for accounting of project funds and for transparency to its members; (d) project accounting system (including the information flow between the various units and entities, Charts of Accounts, books, records, accounting and financial procedures, and policies); (e) budgeting and financial forecasting system; (f) formats for Annual Financial Statement; (g) auditing arrangements, including TOR and selection method of the auditors; and (i) procurement and contract administration monitoring system. A legal covenant is included that SDF shall maintain - 93 - throughout the project implementation period a satisfactory financial management system for the project, including a computerized system, in accordance with the FM agreed with IDA. Weaknesses: There are three potential weakness: (a) absence of a computerized financial management; (b) lack of familiarity with financial fiduciary safeguards required in IDA-assisted projects; and (c) weak financial management capacity at the CG level. SDF at this time lacks a simple and effective MIS to ensure adequate coordination among various units of SDF and facilitate monitoring of funding status of a large number of CGs, including disbursement of funds. The following mitigation measures have been or will be taken. SDF plans to computerize financial management system to gather, store, and analyze financial information for timely decision. SDF will appoint a consulting firm to set up the MIS, and the system is expected to be operational within four months of project implementation. While the newly appointed staff in SDF are qualified in finance and accounting, they would need training to deal with community-driven type of operations. A brief training session has already been held. More are planned throughout the project period to address implementation issues. The PMC of CG will have a village book-keeper to maintain accounts. The PMC and the book keeper will be trained by the CSO and SDF staff. This training is mandatory, without which PAST will not certify payment of the first installment of the matching grant. The financial management arrangements are included in the SFA. PAST will also review the books of accounts of the CG. Implementing Entity: SDF will operate under the legal framework of its MAA and have the overall responsibility for implementation of the project. Its F&A unit will be responsible for overall financial management functions of the project. Flow of Fundsfrom IDA and Government to SDF: * The FD of MOF would provide IDA credit and Government contribution to SDF under a Grant Financing Agreement (GFA) between the Government and SDF. * IDA funds will be channeled to a special account in a commercial Bank and operated by SDF under terms and conditions acceptable to IDA. * SDF will receive the Government contribution in two installments, and a separate account will be maintained in a commercial bank to receive the Government contribution. * The MD or a designated official of SDF will be the authorized person to withdraw IDA Credit proceeds and the Government contribution. Flow of Fundsfrom SDF to CGs: * The project's OM includes eligibility criteria for sub-projects and PAST will appraise and recommend the sub-projects, based on compliance with these criteria. * Upon approval of a sub-project proposal from CG, two actions will be initiated: (a) CG will open a bank account and deposit the community's cash contribution, and provide the bank statement and the account number to SDF; and (b) an SFA would be executed between SDF and CG for the approved cost of the sub-project. The SFA would inter alia specify: (i) the total cost of the work; (ii) work completion milestones for payment of funds by SDF; (iii) payment terms and conditions; (iv) amount of beneficiary contribution; and (v) financial management arrangements. * Upon signature of the SFA and certification by PAST on the compliance with the conditions for payment, SDF would provide a check for the first tranche to the authorized representative of the CG in open meetings in the villages. * Payment of funds would be monitored closely so that the processing time taken at the SDF does not adversely affect the execution of the sub-project by the CGs. * Service standards (benchmarks) have been developed to specifically monitor the turn-around - 94 - time for fund transfers from SDF to CGs. Accounting policies andprocedures: The overall accounting framework would be as follows: * SDF registered as a nonprofit company under the Company's Act follows the statutory accounting policies and procedures. In addition, an FM manual for the project, incorporating applicable accounting policies and procedures for the community-driven development projects, has been developed. This manual would serve as a reference document for SDF staff. * The financial management system in SDF is adequate to cover all project-related transactions, i.e., all sources (Government, IDA, and community contributions) and the use of funds are accounted for and reflected in the financial statements of SDF. * The FM manual includes detaifed Chart of Accounts for SDF. This Chart of Accounts is designed to allow expenditure data to be captured and classified by project activities, components, and disbursement categories. * Books of accounts are maintained using double-entry bookkeeping principles and on accrual basis. Separate books/records (cash and cash book ledger, trial balance, etc.) is maintained at the SDF, using Microsoft Excel, and will move to an integrated computerized accounting system. * The computerized accounting system at SDF would have control features and will process eligible transactions, based on controls developed in the system as per legal and operational requirements. The system would be able to provide financial data to measure performance that are linked to the outputs of the project. * In SDF book of accounts, payment of first installment to CGs would be treated as actual expenditures, and payment of subsequent installments would be recorded as actual expenditures only when physical milestones as per the SFA are reported by CGs and certified by PAST. Accounting at CGs: In accordance with the SFA, the CG would maintain accounts of funds received from all sources and spent in simple accounting records. The formats have been developed. Each CG would maintain the following books, for which formats have been developed: * Simple cash/bank book providing details of amounts received into the project account and details of payments. * Register of contributions received from members in cash or labor and materials. * Register of material purchased using project funds. Internal Controls: To prevent unauthorized transactions and use of assets, controls have been developed and documented in the FM manual. Jobs are segregated and reporting functions are done as per job descriptions. Financial transactions at various levels are carried out, as per delegation of financial power and approval authority indicated in the OM. Procurement policies for below prior review thresholds have been developed, which is adequate for ensuring that funds are utilized for intended purposes. Asset management system in SDF includes depreciation and disposal policy, procedures, for use and inventory of assets. The FM manual also includes control functions to be followed by the CGs and the SFA includes clauses for remedial measures in case of noncompliance with any provisiorL of the SFA. The CG will maintain separate books and register for financial transactions and assets. Staffing * The organizational structure of SDF adequately provides staff positions in the finance unit with job descriptions of key positions and clear reporting mechanisms. There is adequate - 95 - segregation of duties within and outside the Finance Unit. * The F&A Unit of SDF is headed by a GM, who is an accounting professional with extensive experience. The GM has overall responsibilities for financial management and administrative functions of the project. The unit has a Finance Manager with experience in the banking sector. * SDF has recruited key finance staff (GM and Manager) through open competition. The position of Accountant will be filled by February 15, 2003. * The Finance Manager is responsible for developing, updating, and operationalizing the computerized financial management system and financial planning, as well as forecasting. * Training on the operation of computerized financial management system to the finance and accounting staff to be given by the same consultants who would be appointed for developing the computerized financial management system in the project. Internal Audit: Staff responsible for reporting and monitoring would carry out periodic internal audit functions under specific audit plan and submit reports to the MD. Under the audit plan, the activities of the CG and the service providers, such as POs and the private sector and their contractual obligations under SDF, would be reviewed and reported. The findings of the internal audit will be acted upon within a month of the report after consultation with the relevant units and with the GB of SDF, if required. External Audit: Since SDF is governed by the Companies Act, it is mandatory for its accounts to be audited by a private audit firm. SDF will hire a Chartered Accountants firm to conduct the annual audit under the terms of reference acceptable to IDA. The audit report would be submitted to IDA within six months of the end of each fiscal year. The audit report will include a separate opinion on Project Financial Statements and Special Account. The following audit reports would be monitored in the Audit Report Compliance system (ARCS): Implementing Agency Audit [Auditors SDF Project Account, SOE Private auditor DF Special Account Private Auditor FinancialReporting and Monitoring: The mechanism for reporting and monitoring would be as follows: * An adequate financial management system is in place. * The F&A Unit will be responsible for consolidating of financial transactions at SDF and CG levels, maintaining supporting papers, and preparing timely consolidated Financial Statements on a monthly basis. * The F&A Unit would also be responsible for preparing quarterly Financial Monitoring Reports (FMRs) after scrutiny of financial information received within and outside SDF, monitoring actual expenditure against forecast, and coordinating with other units of SDF to reconcile timely financial information. A set of customized formats of FMRs are included in the FM Manual. * Quarterly FMR showing IDA, Government, community expenditure would be submitted to IDA. In particular, the FMR would include: (a) sources of funds and application of funds (classified by components, sub-components, and summarized expenditure categories); (b) output monitoring reports comparing budgeted and actual expenditures or analysis of major variances on key physical parameters and unit rates for selected key items; and (c) information on procurement management for major contracts. - 96 - Information System: At the SDF level: PAST will send financial and physical progress reports to the Program Unit and the M&L unit after verification. The Program Unit will instruct F&A Unit for payment of funds to the CG, based on the certified reports of PAST, review of the funding status of the CGs, and physical progress against agreed milestones. The integrated computerized MIS and financial management system will provide timely and reliable financial management information to IDA and SDF for raonitoring progress of the project and making appropriate decisions. At the CG level, PAST would prepare and submit a simple monthly report to SDF. This would indicate (a) amount of funds received from SDF and community contributions in cash and monetized kind contributions, amounts spent on various items, balance in the bank or cash book; and (b) details of the work being carried out and cost incurred. Supervision Plan: The project will need intensive supervision, including field visits which will be conducted three to four times a year for the first two years of project implementation. The initial supervision focus will be on the implementation progress of agreed actions and the operation of the computerized financial management system in SDF. - 97 - Annex 7: Project Processing Schedule BANGLADESH: Social Investment Program Project ..~ 8s~~ ~ ~~~~igoJt Scedi!;>S X ;/i;2ant1 'O.3-2 i -1fX,.,' Time taken to prepare the project (months) 18 60 First Bank mission (identification) 11/01/1997 11/15/1997 Appraisal mission departure 09/15/1999 11/12/2002 Negotiations 01/07/2003 01/15/2003 Planned Date of Effectiveness 06/30/2003 Prepared by: IDA and Government of Bangladesh Preparation assistance: A PHRD grant (TF025337) of US$475,000 was received for project preparation by the Bank. Of this, US$190,360 was used to contract consulting services and finance workshops and training for the following preparation activities: (a) social assessment study; (b) formulation of project design strategy; (c) identification of monitoring indicators and project evaluation methodology; (d) design of MIS; information communication strategy; technical components of the project; and (e) support for project management including training for procurement, financial management, and preparation of project operation manual. Grant implementation results: The Grant was successfully executed. All planned outputs were completed and consultants' performance was generally satisfactory. The training programs and consultative workshops benefited the client. Bank staff who worked on the project included: Name Speciality Andrea Ryan Economist Clive G. Harris Senior Private Sector Development Specialist Deborah Lee Ricks Program Assistant (Washington) Habibur Rahman Education Specialist Jacques G. Toureille Task Team Leader (1998-2000) Jeeva A. Perumalpillai-Essex Task Manager (April-November 2002) Khwaja M. Minnatullah Senior Water & Sanitation Specialist Mohammad Sayeed Disbursement Officer Mohi Uz Zaman Quazi Senior Transport Engineer Nilufar Ahmad Senior Social Scientist Owaise Saadat Task Team Leader (1997-1998) Paul Jonathan Martin Senior Environmental Specialist Philippe Dongier Task Team Leader (2000-March 2002) Prasad C. Mohan Senior Communication Specialist Sadia Afroze Chowdhury Senior Public Health Specialist Shahpar Selim Research Analyst - 98 - Shakila Parveen Khan Program Assistant (Dhaka) Subrata Dhar Senior Communications Officer Suraiya Zannath Senior Financial Management Specialist Wahida Huq Current Task Team Leader & Senior Operations Officer Yasmin Tayyab Program Officer Zafrul Islam Senior Procurement Specialist Zahed H. Khan Senior Urban Specialist Others who worked on the project included: Peer Reviewers Name Speciality Bank Staff Dinah McLeod HDNSP Jeff Ruster PSAPP Julie Van Domelen HDNSP Keith W. McLean SDV Steen Lau Jorgensen Director, SDV Other Abdul Muyeed Chowdhury Executive Director, BRAC (a large national NGO) Donal Brown Senior Rural Livelihood Advisor, Department for International Development (DFID), The British High Commission 99 - Annex 8: Documents in the Project File* BANGLADESH: Social Investment Program Project A. Project Implementation Plan 1. Project Operational Manual (including Financial Management Manual and Environmental Assessment Manual). B. Bank Staff Assessments 1. Quality Enhancement Review - Quality Assurance Group, World Bank, May 30, 2002. 2. Aide Memoires, Management Letters, and BTORs of Preparation Missions for the project. 3. Tribal Development Plan. C. Other 1. Operationalizing the Social Development Foundation - Design Challenges (July 2002). 2. Social Assessment Report of SIPP (May 1999). 3. A Preliminary Assessment of Kishoreganj Sadar Thana (KST) Project (February 2000). 4. Social Development Foundation's (SDF's) Organization Structure and Management Policies (February 2002). 5. SDF's Information Communication Program (February 2002). 6. SIPP - Review of Design Issues and Performance Indicators (November 2001). 7. SIPP's Water Supply and Environmental Sanitation Components (January 2002). 8. Design of MIS (January 2002). 9. Design of Community Infrastructure (January 2002). *Including electronic files - 100 - Annex 9: Statement of Loans and Credits BANGLADESH: Social Investrnent Program Project 02-Jan-2003 Difference between expected and actual Odginal Amount in Us$ Millions disbursements Project ID FY Purpose IBRD IDA GEF Cancel. Undisb. Orig Frm RevJd P071794 2002 Rural Elect Renewable Energy Dev 0.00 190.98 0.00 0.00 201.40 27.04 0.00 P074040 2002 Renewable Energy Development 0.00 0.00 8 20 0.00 0.05 0 29 0.00 P074731 2002 Finandal Services for the Poorest 0.00 5.00 0.00 0.00 4.69 -0.42 0.00 P075016 2002 Public Procurement Reform Project 0.00 4.50 0.00 0.00 3.99 0.24 0.00 P044876 2002 Female Secondary Srhool Assis. II 0.00 120 90 0.00 0.00 101.92 -0 89 0.00 P057833 2001 Air Quallty Management Project 0.00 4 71 0.00 000 391 3.03 0 00 P059143 2001 Microfinance 11 0.00 151.00 0.00 0.00 74.48 7.46 0.00 P044810 2001 Legal &Judioal Capadty Building 0.00 30.60 0.00 0.04 28 29 6.32 0.00 P050752 2001 Post-Literacy &Contnuing Education 0.00 53 30 0.00 0.00 50.81 1.38 0.00 P069933 2001 HIV/AIDS Prevention 0 00 40.00 0.00 0.00 38.49 14.75 0.00 P009468 2000 Fourth Fisheries 0.00 28.00 5.00 0.00 21.68 19.20 0.00 P044811 2000 Financial Insttubons Development 0.00 46.90 0.00 0.00 15 52 17.13 0.00 P050751 2000 National Nutribon Program 0.00 92.00 0.00 0 00 86.78 35 63 0.00 P058468 2000 Agricultural Serv. lnnovaton &Reform 0.00 500 0.00 0.00 1.08 1.01 0.00 P049587 2000 Aquatic Biodiversity Conservabon 0.00 0.00 5.00 0.00 4.04 3.54 0.00 P009524 1999 Dhaka Urban Transport 0.00 17700 0.00 0.03 127.35 113.09 -2,21 P037294 1999 Third Road Rehabilitabon &Maintenance 0.00 273.00 0.00 0.00 150.12 151.80 3.75 P041887 1999 Municipal Services 0.00 138 60 0.00 0.00 87.76 2.96 0.00 P049790 1999 Export Dlversification 0.00 32.00 0.00 0.00 9.69 10.82 0.00 P050745 1999 Arsenic Mitgation Water Supply 0.00 32.40 0.00 4.35 20.98 25.30 0.00 P040713 1998 Silk Development Pilot Project 000 11 40 0.00 3.53 2.64 6.63 5.14 P009550 1998 Primary Education Development 0.00 150.00 0.00 25.63 43.34 53.57 14.91 P037857 1998 Health and Populabon Program 0.00 250.00 0.00 0.78 57.40 37.21 0.00 P044789 1998 Pnvate Sector Infrastructure Dev 000 235.00 000 0.00 14907 15626 0.00 P009518 1997 Second Rural Roads &Markets Improvement 0.00 133.00 0.00 0.00 090 -7.69 1364 Total: 0.00 2205.29 18.20 34.35 1286.39 685.68 35.23 - 1 01 - BANGLADESH STATEMENT OF IFC's Held and Disbursed Portfolio Jun 30 - 2002 In Millions US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1997 DBH 0.00 0.65 0.00 0.00 0.00 0.65 0.00 0.00 1991 Dynamic Textile 1.86 0.00 0.00 1.48 1.86 0.00 0.00 1.48 1998 Grameen Phone 13.33 1.58 0.00 0.00 13.33 1.58 0.00 0.00 1985/95 IDLC 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1980/98 IPDC 8.13 0.00 0.00 0.00 8.13 0.00 0.00 0.00 1998 Khulna 17.34 0.00 0.00 0.00 17.34 0.00 0.00 0.00 1998 Lafarge/Surma 35.00 10.00 0.00 0.00 0.00 0.00 0.00 0.00 2000 Scancem 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.00 Total Portfolio: 85.66 12.23 0.00 1.48 50.66 2.23 0.00 1.48 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic 1998 Khulna 0.00 0.00 3.30 0.00 1999 Khulna Swap 1.30 0.00 0.00 0.00 2000 USPCL 0.00 4.00 3.00 0.00 2000 ULC - Bangladesh 5.00 0.00 0.00 0.00 2001 Dhaka Westin 8.75 0.00 0.00 0.00 2001 BRAC Bank 0.00 0.00 3.00 0.00 Total Pending Commitment: 15.05 4.00 9.30 0.00 -102 - Annex 10: Country at a-dIance BANGLADESH: Social Investment Program Project POVERTY and SOCIAL South Low- Bangladesh Asia Income Development dlamorid- 2001 Population, mid-year (n illons) 133.4 1,380 2,511 LIfe expectancy GNI per capita (Atlas method, USS) 370 450 430 GNI (Atlas method, US$ billions) 48.6 616 1,069 Average annual growth, 1995-01 Population (%) 1.7 1.9 1.9 GNI Gr Labor force (%) 2.9 2.4 2.3 GNI . Gro per . primary Most recent estimate (latest yesw available, 1995-01) capita . enrollment Poverty (%ofpopulation below national poverty iine) 36 Urban population (%oftotalpopulatIn) 25 28 31 Life expectancy at birth (years) 61 62 59 Infant mortality (par 1,000 livebirths) 60 73 76 Child malnutrition (%of children under 5) 61 49 Access to improved water source Access to an Improved water source (%of populatfon) 97 87 76 Illiteracy (%of population age 15+) 58 44 37 Gross prmaryenrollment (%of school-age population) 122 101 96 -Bangladesh Male 125 109 103 Low-income group Female 120 93 88 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1981 1991 2000 2001 Economic ratios' GDP (US$ billions) 19.5 31.0 47.1 46.7 Gross domestic Investment/GDP 15.9 16.9 23.0 23.1 Trd Exports of goods and servIces/GDP 6.5 6.8 14.0 15.4 rade Gross domestic savings/GDP 9.7 11.4 17.8 16.2 Gross national savings/GDP 14.5 13.7 23.0 20.5 Current account balance/GDP -4.3 -3.1 0.0 -1.7 Domestic i n Interest payments/GOP 0.3 0.5 0.4 0.5 . Investment Total debt/GDP 23.9 42.6 33.1 32.7 savings Total debt service/exports 16.8 20.9 9 1 7.3 Present value of debtGDP 20.3 Present value of debtexports 110.6 Indebtedness 1981-91 199141 2000 2001 200145 (average annual growth) GDP 4.1 5.0 5.9 5.3 5.3 -Bangladesh GDP per capita 1.6 3.3 4.2 3.4 3.4 Low-income grup Exports of goods and services 8.4 13.2 8.6 22.8 5.5 STRUCTURE of the ECONOMY 19s1 1991 2000 2001 Growth of Investment end GDP I%) (%of GDP) Agricufture 30.4 25.5 241 16 Industry . 21.7 25.3 25.9 i Manufacturing 13.4 15.2 15.6 _ Services .. 47.9 49.2 50.0 Private consumption 89.9 84.5 77.6 79.3 9a 97 9S 99 00 01 General govemment consumption 6.7 4.1 4.6 4.5 -GO 0..GDP Imports of goods and services 19.0 12.4 19.2 22.3 - (vh1981-91199141 2000 2001 Growth of exports and Imports (%) (average annual growth) Agricuitume 2.5 3.3 7.4 3.1 G0 Industry 5.2 7.3 6.2 7.2 40 Manufacturing 3.3 6.9 4.8 6.7 20 Services 3.9 4.7 5.5 5.5 Private consumptlon 4.0 3.9 5.3 6.2 o 9G- - 991 0 01 General govemment consumption 4.6 4.4 0.9 4.5 .20 Gross domestic Investment 2.1 9.6 7.3 5.8 Exports -lmports Imports of goods and services 6.6 10.8 5.7 23.5 Note: 2001 data are preliminary esfmaltes. The diamonds show four key indicators in the country (in bold) compared with Its incomergroup average. If detaare mrissing,the diamond wil be Incomnplete. -103- Bangladesh PRICES and GOVERNMENT FINANCE 1981 1991 2000 2001 Inflation (%) DomestSc prices (%change) 10 Consumer prices .. 8.3 3.4 1.6 Implicit GDP deflator 6.0 6.6 1.9 1.6 4 \X Government flnance 2 (%of GDP, includes current grants) 0 Current revenue .. 7.2 8.5 9.2 96 97 9a 99 00 0 Current budget balance .. 0.7 0.7 1.0 -G DP deflator * CP Overall surplus/deficIt -17.9 5.4 -6.2 -5.9 TRADE 1981 1991 2000 2001 Export and Import levels (USS mill.) (US$ rmlilons) Total exports (fob) ,, 1,698 5,752 6,467 10.ODO Raw jute .. 120 72 67 Leather and leather products .. 138 195 254 7.500 Manufactures .. 1,278 5,123 5,761 * * Total Imports (cit) .. 3,510 8,403 9383 56000 Food .. 297 381 349 2s,_00 Fuel and energy .. 204 684 905 Capial goods .. 1,231 2,133 2,515 0 95 96 97 96 99 00 01 Export prce Index (1995=100) 71 103 95 Import price Index (1995=100) .. 85 99 98 * Exports * Imlports Terms of trade (1995=100) .. 83 103 97 BALANCE of PAYMENTS 1981 1991 2000 2001 Current account balance to GDP (%) (US$ rm/llons) Exportsofgoodsandservices 933 2,113 6,611 7,248 1 Imports of goods and services 2,718 3,829 9,060 10.084 Resource balance -1,785 -1,717 -2,449 -2,836 o Net Income -23 -102 -221 -266 -. Net current transfers 963 846 2,672 2,296 * I I E f Current account balance -844 -973 2 -806 Financing items (net) 445 1,354 77 504 Changes in net reserves 399 -381 -79 302 .4 Memo: Reserves including gold (USS millions) .. 880 1,599 1,307 Conversion rate (DEC, hocal/USS) 16.3 35.7 50.3 54.3 EXTERNAL DEBT and RESOURCE FLOWS 1981 1991 2000 2001 (USS millions) ComposItton of 2001 debt (USS mill.) Total debt outstanding and disbursed 4,663 13,193 15,613 15,294 IBRD 55 65 24 17 G'294 IDA 1,085 4,360 6,431 6,439 F:446 A: 17 Total debt service 227 614 789 678 E: 3,546 IBRD 4 5 7 7 IDA 7 47 129 143 b:6,439 Compositon of net resource flows Oflklal grants 0 832 283 177 Offidal credItors 500 487 355 401 Pfivate creditors 15 34 16 270 _ Foreign direct investment 0 2 194 166 D04,403 Portfolio equity 0 52 0 3 C 149 World Bank program Commitments 212 451 198 235 A -IBRD E -Bilatera Disbursements 158 253 356 312 B-IDA D-Othermultiateral F-Private Prncipal repayments 0 18 87 99 C -IMF G -Short-temm Net flows 158 236 268 213 Interest payments 11 34 49 50 Net transfers 147 201 220 163 ueveiopment Eoonomics wi3inu -104 - 9; v 9;- ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~IBRD32249i >.<'<. ~~~~~~~~~~~~~~BAN GL AD ES H ( 3d~~~~~\>tP ~~~~SOCIAL INVESTMENT PROGRAM PROJECT . sx< e b~ ~~~~~~~~~D15TRICTHEADQUARTERS < libmsoon1\, >? ) fJi e; % 0~~~(EDIVISION HEADQUARTERS J/ . s0bomo hClY>? g _* NATIONALCAPITAL 2M-L_PROJECTDISTRICTS(Comp<>nentsl-3) -UPAZILABOUNTRICTSDACpR-tIE1S3 ) >g \-. 930 gi ~~~~~~~~DISTRICT BOLUNDARIES ~~ ---- UPAZILAICBOUNDARIES 1 0l DD- pR 9 < _ _ _ ~~~~~~~~~~~NTERNATIONALBOUNDARIES * INTLERDUATES-A-YSONALBOUNDARIES S <_ 1 R kDdhalG \ -r 1 e ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~DISTRICT HEADQUARTERS Z ~~~~~~~~ H?I !~E A S t - /v ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~M. 0 i 15..67 X,.:ty~~~~~~~~~~~~~~~~