Project Completion Report

PCR: BAN 34545

Southwest Flood Damage Rehabilitation Project (Loan 1825-BAN[SF]) in Bangladesh

September 2005

CURRENCY EQUIVALENTS

Currency Unit – taka (Tk)

At Appraisal At Project Completion (November 2000) (May 2004) Tk1.00 = $0.0184 $0.0168 $1.00 = Tk54.27 Tk59.20

ABBREVIATIONS

ADB – Asian Development Bank BADC – Bangladesh Agricultural Development Corporation BR – Bangladesh Railway BRM – Bangladesh Resident Mission BWDB – Bangladesh Water Development Board DPHE – Department of Public Health Engineering EA – executing agency EIRR – economic internal rate of return FDRP – Flood Damage Rehabilitation Project IMED – Implementation, Monitoring and Evaluation Division IRI – International Roughness Index LGED – Local Government Engineering Department MOA – Ministry of Agriculture PCR – project completion report O&M – operation & maintenance PKSF – Palli Karma-Sahayak Foundation PSC – project steering committee RHD – Roads and Highways Department SDR – special drawing rights SOE – statement of expenditures SRF – Socioeconomic Rehabilitation Fund VOC – vehicle operating cost

NOTES

(i) The fiscal year (FY) of the Government and its agencies ends on 30 June.

(ii) In this report, “$” refers to US dollars.

CONTENTS

Page BASIC DATA ii MAPS I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2 A. Relevance of Design and Formulation 2 B. Project Outputs 4 C. Project Costs 6 D. Disbursements 7 E. Project Schedule 8 F. Implementation Arrangements 8 G. Conditions and Covenants 9 H. Related Technical Assistance 10 I. Consultant Recruitment and Procurement 10 J. Performance of Consultants, Contractors, and Suppliers 10 K. Performance of the Borrower and the Executing Agency 11 L. Performance of Asian Development Bank 12 III. EVALUATION OF PERFORMANCE 12 A. Relevance 12 B. Efficacy in Achievement of Purpose 12 C. Efficiency in Achievement of Outputs and Purpose 13 D. Preliminary Assessment of Sustainability 13 E. Environmental, Sociocultural, and Other Impacts 14 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 14 A. Overall Assessment 14 B. Lessons Learned 14 C. Recommendations 15

APPENDIXES 1. Maps showing Location and Project Volume for Each Component 17 2. Summary of Project Costs 24 3. Annual Disbursements 25 4. Project Implementation Schedule 26 5. Status of Compliance with Major Loan Covenants 29 6. Details of Consulting Services 31 7. Assessment of Project Impacts and Benefits 32 8. Economic Evaluation of Road Component 34

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BASIC DATA

A. Loan Identification 1. Country Bangladesh 2. Loan Number 1825-BAN (SF) 3. Project Title Southwest Flood Damage Rehabilitation Project 4. Borrower People’s Republic of Bangladesh 5. Executing Agencies – Part A (National, Regional and Feeder Roads) Roads and Highways Department (RHD) – Part B (Rural Infrastructure) Part B1 Local Government Engineering Department (LGED) Part B2 Department of Public Health Engineering (DPHE) – Part C (Railways) Bangladesh Railway (BR) – Part D (Water Management, and Drainage Bangladesh Water Development Board (BWDB) Facilities) – Part E (Socioeconomic Rehabilitation Fund) Palli Karma-Sahayak Foundation (PKSF) – Part F (Agriculture) Ministry of Agriculture (MOA) 6. Amount of Loan SDR 42,747,000 ($54,800,000 equivalent) 7. Project Completion Report Number PCR: BAN 923

B. Loan Data

1. Appraisal – Date Started 30 October 2000 – Date Completed 16 November 2000

2. Loan Negotiations – Date Started 29 November 2000 – Date Completed 01 December 2000

3. Date of Board Approval 21 December 2000

4. Date of Loan Agreement 05 February 2001

5. Date of Loan Effectiveness – In Loan Agreement 06 May 2001 – Actual 31 May 2001 – Number of Extensions Nil

6. Closing Date – In Loan Agreement 31 December 2003 – Actual 17 May 2004 – Number of Extensions Nil

7. Terms of Loan – Interest Rate 1% per annum during grace period; 1.5% thereafter – Maturity (number of years) 32 – Grace Period (number of years) 8

8. Terms of Relending (if any) – Interest Rate 0% – Maturity (number of years) 32 – Grace Period (number of years) 8 – Second-Step Borrower PKSF

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9. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval

18 July 2001 17 May 2004 34 months

Effective Date Original Closing Date Time Interval

31 May 2001 31 December 2003 31 months

b. Amount ($) Last Category or Subloan Original Revised Amount Net Amount Amount Undisbursed Allocation Allocation Canceled a Available Disbursed Balance a 01 Part A (RHD): Civil Works 28,079,824 30,623,588 30,623,588 28,616,231 2,007,357 A 01 Part A (RHD): Consulting 3,699,997 3,903,438 3,903,438 3,202,556 700,882 B Services 02 Part B1 (LGED): Civil Works 8,060,845 12,781,248 12,781,248 12,930,990 (149,742) A 02 Part B1 (LGED): Consulting 739,820 753,192 753,192 738,550 14642 B Services 02 Part B2 (DPHE): Civil Works 499,965 548,955 548,955 1,133,455 (584,500) C 03 Part C (BR): Civil Works 1,599,887 1,702,303 1,702,303 1,179,183 523,120 A 04 Part D (BWDB): Civil Works 9,619,838 5,343,090 5,343,090 5,241,749 101,341 A 04 Part D (BWDB): Consulting 299,979 303,049 303,049 520,553 (217,504) B Services 05 Part E (PKSF): 499,965 529,928 529,928 522,151 7,777 Socioeconomic Rehabilitation Fund 06 Part F (MOA): Seed 499,965 528,965 528,965 518,158 10,807 Multiplication Farm 07 Service Charge 1,199,916 1,329,008 1,329,008 504,047 824,961 Total 54,800,000 58,346,762 3,239,139 58,346,764 55,107,623 3,239,139 BR = Bangladesh Railway, BWDB = Bangladesh Water Development Board, DPHE = Department of Public Health Engineering, LGED = Local Government Engineering Department, MOA = Ministry of Agriculture, PKSF = Palli Karma-Sahayak Foundation, RHD = Roads and Highways Department. a Undisbursed amount cancelled during closure of the loan account.

10. Local Costs (Financed) - Amount ($) $25,359,630 - Percent of Local Costs 96.01 - Percent of Total Cost 36.64

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C. Project Data

1. Project Cost ($ million)

Cost Appraisal Estimate Actual

Foreign Exchange Cost 29.90 31.43 Local Currency Cost 55.00 49.89 Total 84.90 81.32

2. Financing Plan ($ million) Cost Appraisal Estimate Actual Foreign Local Total Foreign Local Total Exchange Currency Exchange Currency Implementation Costs Borrower Financed 0 17.10 17.10 0 16.58 16.58 ADB Financed 29.90 37.90 67.80 31.43 33.31 64.74 Total 29.90 55.00 84.90 31.43 49.89 81.32 ADB = Asian Development Bank

3. Cost Breakdown by Project Component ($ million) Component Appraisal Estimatea Actual A. Civil works 1. Part A: National, regional and type-A feeder roads 36.50 37.16 2. Part B: Rural Infrastructurea 13.70 21.14 3. Part C: Railways 2.00 1.37 4. Part D: Water management and drainage facilitiesa 16.20 8.54 5. Part E: Socioeconomic rehabilitation funda 10.00 7.53 6. Part F: Agriculture 0.60 0.62 Subtotal (A) 79.00 76.35 B. Consulting services 1. Part A: National, regional and type-A feeder roads 3.70 3.20 2. Part B: Rural Infrastructure 0.70 0.74 3. Part D: Water management and drainage facilities 0.30 0.52 Subtotal (B) 4.70 4.46 C. Land acquisition and resettlement 0.00 0.00 Subtotal (C) 0.00 0.00 Subtotal (A + B + C) 83.70 80.82 D. Service charge 1.20 0.50 Subtotal (D) 1.20 0.50 Total (A–D) 84.90 81.32 a Loan savings of $13.00 million from other loans were allocated through Forestry Sector Project [Loan 1486- BAN(SF)] to finance part of this component. Sources: ADB. 2000. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Southwest Flood Damage Rehabilitation Project and on a Proposal to Use Loan Savings, Manila (Loan 1825-BAN[SF]); EA’s project completion reports for Part A, B, D, and E; and Project Completion Review Mission findings.

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4. Project Schedule Item Appraisal Estimate Actual Date of Contract with Consultants (i) Part A: National, Regional and Type-A Feeder Roads Date of Contract Dec 2000 10 Jun 2001 Completion of Work Jun 2003 Dec 2003 (ii) Part B1: Roads, Structures, and Growth Center Markets Date of Contract Dec 2000 May 2001 Completion of Work Jun 2003 Dec 2003 (iii) Part D: Water Management and Drainage Facilities Date of Contract Dec 2000 28 Jun 2001 Completion of Work Jul 2002 Dec 2003 Completion of Engineering Designs Dec 2000–Feb 2001 Jun 2001 Civil Works Contract Date of Award Dec 2000–Feb 2001 Jan 2001–Aug 2001 Completion of Work Jun 2003 Dec 2003 Equipment and Supplies First Procurement Last Procurement

5. Project Performance Report Ratings Ratings

Development Implementation Implementation Period Objectives Progress From Jan 2001 to Jun 2001 Satisfactory Satisfactory From Jul 2001 to Dec 2001 Satisfactory Satisfactory From Jan 2002 to Jun 2002 Satisfactory Satisfactory From Jul 2002 to Dec 2002 Satisfactory Highly satisfactory From Jan 2003 to Jun 2003 Satisfactory Highly satisfactory From Jul 2003 to Dec 2003 Satisfactory Highly satisfactory

D. Data on Asian Development Bank Missions No. of No. of Specialization Name of Mission Date Persons Person-Days of Membersa Appraisal Mission 30 Oct–16 Nov 00 7 126 a, b, c, d, e, f Inception Mission 24 Dec–29 Dec 01 2 10 g, h Review Mission 16 Apr–24 Apr 02 9 27 g, h Special Project Administration 23 Jun–27 Jun 02 3 10 i, j Mission Review Mission 21 Oct–06 Nov 02 1 16 g Review Mission 31 Mar–15 Apr 03 1 15 g Sp Project Administration Mission 20 Jul–06 Aug 03 2 34 g, j Review Mission 16 Nov–04 Dec 03 2 36 g,j Project Completion Review Missionb 22 May–26 May 05 4 14 g, j, k a a - senior transport specialist, b - social development specialist, c - senior economist, d - senior environment specialist, e - project engineer, f - counsel, g - project implementation officer, h - assistant project analyst, I - principal project implementation officer, j - project implementation specialist, k - staff consultant. b The project completion report was prepared by S. Ekelund, Project Implementation Specialist; A. Faruque, Project Implementation Officer; and staff consultants. Map 1

89o 00'E 91o 45'E Banglabandha B A N G L A D E S H

Panchagarh SOUTHWEST FLOOD DAMAGE REHABILITATION PROJECT Location (as completed)

Thakurgaon Nilphamari

Ranisankail Lalmonirhat Sayedpur Kurigram T N ee Rangpur st Parbatipur a Dinajpur R . 0 25 50 75 o Mithapukur o 25 30'N Madhyapara 25 30'N Kilometers Gaibandha

Dewanganj Tamabil Joypurhat Sunamganj Sherpur Chhatak

J Netrokona Mahadepur a Brahmaputra m Jamalpur u R. Raghurampur n Chechua SYLHET Sylhet Bogra a Naogaon R Mohanganj ara R. . Muktagacha Mymensingh Kushiy Nawabganj RAJSHAHI Gopalpur Pulbaria Porabari Madhupur Chamraghat Kulaura Sirajganj Nandail Moulvibazar Bhuapur Ganges Rajshahi Natore Nalka Hossainpur Kishoreganj Habiganj R. Tangail Bonpara Basail Abdulpur Bharkura DHAKA Brahmanbaria Ishurdi Karotia Pabna Shahji Bazar INDIA Kaliakoir Gazipur Ashuganj Chandra Kushtia Nagarbari Manikganj Nabinagar INDIA Akhaura Savar Narsingdi Meherpur DHAKA Rajbari Narayanganj Daulatdia Mirpur Chuadanga Faridpur Pad Daudkandi ma Jhenaidah R. Munshiganj Magura Chandina Comilla

Bhanga Shariatpur Jessore Bhatiapara Chandpur Laksham Madaripur M Narail eg hn Lakshmipur Khagrachari Gopalganj a Mollarhat R . Feni

Noakhali Khulna Chulnagar Jhalakati Bagerhat Rangamati Barisal Bhola Town Noapara Satkhira Pirojpur . . R R CHITTAGONG r la u s Mongla ha s g n u Chittagong (Chalna Port) i P r a Patuakhali Dohazari H KHULNA Khepupara Barguna Bandarban 22o 00'N 22o 00'N

B a y o f B e n g a l Dhaka Metropolitan Area Regional Road Ramu

Project Area Railway Cox's Bazar

National Capital River

Divisional Headquarters District Boundary

District Capital Divisional Boundary MYANMAR

City/Town International Boundary

Airport Boundaries are not necessarily authoritative. Teknaf

National Highway 89o 00'E 91o 45'E

05-4276 RM Map 2

o o o 89 00'E 92 00'E 88 40'E 89 o 40'E

o 26 00'N 26 o 00'N

G

a n ge s Ri Bheramara ver Daulatpur 24o 00'N 24o 00'N RAJSHAHI SYLHET Mirpur

I Kumarkhali B A N G L A D E S H I I I I Kushtia I I DHAKA I I DHAKA INDIA Meherpur KUSHTIA Khoksa Gangni MEHERPUR INDIA Alamdanga Sailkupa CHUADANGA M ad Chuadanga Harinakundu hu m Damurhuda a t i

KHULNA K R CHITTAGONG o i b Sripur v a JHENAIDAH e

d r a k o o R Magura 22 00'N 22 00'N iv Ch Jhenaidah e r itra Ri ver Kaliganj MAGURA Bay of Bengal Jiban Nagar Kotchandpur Mohammadpur MYANMAR

o Maheshpur Salikha 89 00'E 92 o 00'E B h Chaugacha a ir a Bagherpara b R iv Narail Lohagara e Jessorer

Jhikargacha JESSORE Sarsa NARAIL Abhaynaga Kalia B A N G L A D E S H Manirampur Benapole Phultala SOUTHWEST FLOOD DAMAGE Keshabpur Terakhada Kalaroa Dighalia

REHABILITATION PROJECT B

e t n Khulna PROJECT AREA a R iv Dumuria (as completed) er Tala Rupsa Batiaghata Satkhira

Paikgacha SATKHIRA Dacope Debhata Assasuni

N KHULNA Kaliganj

0 10 20 30 40 50 Shyamnagar

Kilometers

Koyra National Capital Project Area District Headquarters Thana Headquarters

22o 00'N Project Road 22o 00'N National Highway Regional Highway Thana Connecting Road Broad Gauge Railway River District Boundary Division Boundary International Boundary Boundaries are not necessarily authoritative. B a y o f B e n g a l o 88o 40'E 89 40'E

05-4276d RM

I. PROJECT DESCRIPTION

1. The Southwest Flood Damage Rehabilitation Project was formulated in response to the Government’s request to the Asian Development Bank (ADB) for emergency assistance following floods from late September to early October 2000 in the southwest region of Bangladesh. The flood was concentrated in an area not prone to flooding and, though not as extensive as earlier inundations, its impact was more severe as the area was unprepared for such a disaster. The infrastructure network, which had been built up over the years without adequate attention to drainage patterns, significantly slowed receding floodwaters. The main objective of the Project1 was to assist the Government rehabilitate key infrastructure damaged in the project area, thereby enabling restoration of normal levels of economic and social activity. The Project provided for rehabilitation of facilities in seven key sectors to pre-flood level. Within each sector, priority was established as follows: (i) to repair damage to ongoing ADB-assisted projects, (ii) to repair damage to completed ADB-funded projects, and (iii) to repair damage to non-ADB-funded projects in the relevant sectors.

2. The Project followed a sectoral approach, which is the most appropriate response to an emergency situation. This allowed the loan to be processed at the same time as performing a detailed needs assessment. Each executing agency (EA) was responsible for identifying and implementing the subprojects in its sector. A project steering committee (PSC), chaired by the member of Physical Infrastructure Division of the Planning Commission, was responsible for overall project coordination—monitoring implementation, resolving interagency issues and procedural problems, and ensuring counterpart funding.

3. The Project comprised six components: (i) Part A: National, regional and type-A feeder roads. Rehabilitation of flood- damaged roads, bridges and culverts to full service levels in seven districts: Chuadanga, Kushtia, Jessore, Jhenaidah, Magura, Meherpur, and Satkhira. Type-A feeder road subprojects were limited to the most severely affected areas of Jessore, Jhenaidah, and Satkhira. The Roads and Highways Department (RHD) was the EA.

(ii) Part B: Rural Infrastructure

(a) Part B1: Roads, Structures, and Growth Center Markets. Rehabilitation of flood-damaged rural infrastructure, including type-B feeder roads, type-1 rural roads, structures on both types of roads, and growth center markets in the seven flood-affected districts. The Local Government Engineering Department (LGED) was the EA for this component.

(b) Part B2: Public health facilities. Restoration of damaged water supply (tube wells, upazila [subdistrict] and district water supply systems) and sanitation facilities (tube wells and latrines at market centers and primary schools). The Department of Public Health Engineering (DPHE) was the EA.

1 ADB. 2000. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Southwest Flood Damage Rehabilitation Project and on a Proposal to Use Loan Savings. Manila (Loan 1825-BAN[SF]). 2

(iii) Part C: Railways. Rehabilitation of railway infrastructure and facilities along flood-affected routes, including (a) civil works to restore embankments, tracks, essential buildings, station roads, and signaling and telecommunications facilities; and (b) construction and reconstruction of critical bridges and culverts where railway embankments were breached or where drainage is essential. All works included flood protection measures to minimize damage from future floods. The Bangladesh Railway (BR) was the EA.

(iv) Part D: Water management and drainage facilities. Reconstruction, repair, and selected upgrading (for disaster prevention) of flood-damaged water management infrastructure and related facilities, including embankments, flood control and drainage structures, drainage canals, and sluice gates. The Bangladesh Water Development Board (BWDB) was the EA for this component.

(v) Part E: Socioeconomic rehabilitation fund. Creation of a socioeconomic rehabilitation fund (SRF) to (a) mitigate the social and economic impact of the floods and improve the living conditions of the poor through prompt provision of loans for village reconstruction—rehabilitation of housing and livelihood restoration through on- and off-farm income-generating activities; and (b) strengthen the decentralized delivery mechanisms of local organizations, which are responsive to local needs and build local institutional capacity. The Palli Karma-Sahayak Foundation (PKSF) was the EA.

(vi) Part F: Agriculture. Rehabilitation of five flood-damaged seed multiplication farms to supply seeds to flood-affected farmers. The Bangladesh Agricultural Development Corporation (BADC) under the Ministry of Agriculture (MOA) was the EA for this component.

4. The total project cost was estimated at $84.9 million equivalent (including service charges during construction), comprising foreign exchange costs of $29.9 million and local currency costs of $55.0 million equivalent. The Project was appraised in November 2000 and the loan was approved by ADB in December 2000. The loan account closed on 17 May 2004.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

5. The Project was designed while ADB’s 1999 country operational strategy2 was in force, whose overall strategic objective is poverty reduction through (i) promotion of faster private sector-led economic growth, (ii) creation of better development opportunities for the poor in rural and urban areas, (iii) human development, and (iv) environmental protection. The poverty reduction objective was reiterated in the partnership agreement on poverty reduction between ADB and the Government.3 To maximize the impact of the Project the EAs adopted an area approach to focus assistance on areas with a high concentration of poverty.

6. The Project was intended to rehabilitate key physical and social infrastructure to pre- flood levels to (i) ensure restoration of normal levels of economic and social activities, and

2 ADB. 1999. Bangladesh Country Operational Strategy: Responding to the Challenge of Poverty. Manila. 3 ADB and the Government of the People’s Republic of Bangladesh. 2000. Partnership Agreement on Poverty Reduction. Manila. 3

(ii) create opportunities for employment or income-generation. This was expected to reduce poverty, which had reached alarming proportions in the post-flood period, due to massive income erosion, complete loss of physical assets, and debt accumulation. The infrastructure and civil works completed under the Project facilitated resumption of economic activity through (i) improved transportation links between agricultural farms and market places, and upazila and district headquarters, (ii) reduction in travel time for movement of freight and passenger traffic on roads and railways, which cut transportation costs, and (iii) creation of employment opportunities for local skilled and unskilled labor, which increased people’s purchasing capacity and led to increased expenditure and consumption—resulting in higher productivity and increased gross domestic product. Microcredit disbursed to flood-affected households increased women’s engagement in income-generating activities, thus achieving ADB’s gender development goal. The Project was designed and formulated to reduce poverty and contribute to Bangladesh’s economic recovery, in accordance with ADB’s country strategy and overall goal.

7. Two out of seven ADB loans4 providing emergency assistance to Bangladesh have been post-evaluated.5 The lessons learned from these project performance audit reports and organizational experience with rehabilitation assistance6 are (i) emergency assistance should be provided very quickly; (ii) projects should be limited to restoring damaged facilities to pre-flood levels; (iii) implementation periods should be short and, preferably, completed in one or two construction seasons; (iv) consultants and ADB supervision should be more involved to support the EAs; (v) the Government should act quickly to match ADB’s rapid response to disasters; (vi) beneficiary participation in project preparation and implementation should be increased, especially in facility maintenance; (vii) environmental and social aspects should be considered in project design; (viii) suitable arrangements should be made for quick and simple disbursement of funds to EAs; (ix) subprojects should have simple selection criteria and short implementation periods; and (x) a steering committee chaired by civil servants should facilitate coordination of components and faster decision-making.

8. The Project aimed to provide rapid assistance. ADB appraised the Project in November 2000, immediately after the disaster (October 2000), and approved it in December 2000. ADB approved advance procurement action, including sole sourcing of consultants and retroactive

4 ADB. 1988. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Flood Rehabilitation Project. Manila (Loan 882-BAN[SF]); ADB. 1988. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Flood Damage Restoration Project, Manila (Loan 892-BAN[SF]); ADB. 1988. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Flood Damage (Rural Infrastructure Project), Manila (Loan 941-BAN[SF]); ADB. 1989. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Second Flood Damage Restoration Project, Manila (Loan 967-BAN[SF]); ADB. 1991. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grant to the People’s Republic of Bangladesh for the Dhaka Integrated Flood Protection Project, Manila (Loan 1124-BAN[SF]); ADB. 1992. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Secondary Towns Integrated Flood Projection Project, Manila (Loan 1202-BAN[SF]); and ADB. 1998. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh and on a Proposal to use Loan Savings for the Flood Damage Rehabilitation Project, Manila (Loan 1666-BAN[SF]). 5 PEO466, October 1996, ADB. 1988. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Flood Rehabilitation Project. Manila (Loan 882- BAN[SF]); and PEO444, August 1995, ADB. 1988. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Flood Damage Restoration Project, Manila (Loan 892-BAN[SF]). 6 Benson, Charlotte and W.T. Arriens. (Draft Paper), October 1998. Rehabilitation Assistance After Disasters: A Preliminary Review of Lessons Learned and Emerging Issues. Focal Point, Operations Evaluation Department. 4 financing for eligible expenditures incurred after the appraisal date. Quick disbursement of funds was facilitated through imprest accounts established for each EA. These provisions significantly reduced the time required to make assistance available to the affected people. The Project provided for restoration of flood-damaged infrastructure through subprojects selected by applying strict preset criteria. The Project avoided deferred maintenance and involved strong consulting support. At appraisal, it was estimated that the Project would require a total of 105 person-months international and 560 person-months domestic consulting services. The actual input of consulting services increased to 113 person-months international and 635 person- months local consultants. The creation of the SRF and microcredit addressed urgent community needs for restoration of normal economic and social activities. The project design took into account lessons learned from previous ADB-funded emergency assistance projects in Bangladesh.

9. The project components were designed and implemented in accordance with government policy. The design of Part A (national, regional and type-A feeder roads) was consistent with the recommendations of the road master plan (RMP),7 which aimed to sustain the improved riding quality of the roads and reduce vehicle operating costs (VOCs). Part B (rural infrastructure) was in line with the Government’s fifth five-year plan (1997–2002), which aimed to improve basic physical infrastructure in rural areas for economic development. The design for Part C (railways) supported the Government’s policy to foster the railway subsector as the pro- poor mode of transport, facilitating cheap transportation of long-haul freight in an environment- friendly manner. Part D (water management and drainage facilities) was designed and implemented in accordance with the Government’s National Water Policy, which aimed to take “appropriate measures to provide desired levels of protection for life, property, vital infrastructure, agriculture and wetlands”,8 and the Flood Action Plan9, formulated after the floods of 1987 and 1988, which helped determine the most appropriate action for coping with floods, including subproject selection. Part E (socioeconomic rehabilitation fund) and Part F (agriculture) were designed in accordance with the Government’s overall policy of poverty reduction. SRF helped promote income-generating activities among the rural poor, particularly women, and rehabilitation of the seed multiplication farms helped supply seeds to farmers who had lost their crops, indirectly generating employment for landless laborers who are dependent on agricultural employment during the harvesting season.

B. Project Outputs 10. Project outputs after completion substantially conformed to the project design at appraisal. Expected outputs at appraisal and actual outputs upon project completion are listed in Table 1.

7 ADB. 1988: Technical Assistance to Bangladesh for Preparing a of a Road Master Plan. Manila; and ADB. 1994. Technical Assistance to Bangladesh for Preparing a of a Road Master Plan (Supplementary). Manila. 8 Ministry of Water Resources, Government of Bangladesh. 1999. National Water Policy. Published by Ministry of Water Resources, Bangladesh. 9 Flood Plan Coordination Organization, Ministry of Irrigation, Water Development, and Flood Control, Dhaka, Bangladesh, 1989. 5

Table 1: Project Component - Targets and Achievements Project As Targeted As Achieved Remarks Component at Appraisal on Completion Part A: Rehabilitation of all flood- Rehabilitation of all All major works were National, regional damaged national, regional major flood-damaged completed on schedule and type-A feeder and type-A feeder roads in national, regional and (30 June 2003). roads Chuadanga, Kushtia, type-A feeder roads Additional subprojects Jessore, Jhenaidah, (1,115 km), 6 bridges were undertaken to use Magura, Meherpur, and (234 m), and 405 savings generated from Satkhira, including culverts (1,100 m). exchange rate fluctuation, rehabilitation/ low bid prices, and reconstruction/new savings from other project construction of bridges and components (completion culverts. date 31 December 2003). Part B1: (i) Rehabilitation of 327 (i) Rehabilitation of All major works were Roads, structures, km type-B feeder 731 km type-B completed on schedule and growth center roads; feeder roads; (30 June 2003). markets (ii) Rehabilitation of 200 (ii) Rehabilitation of Additional subprojects km type 1 rural roads; 534 km type 1 rural were undertaken to use (iii) Rehabilitation of 600 m roads; savings generated from structures; and (iii) Rehabilitation of exchange rate fluctuation, (iv) Rehabilitation of 35 882 m structures; low bid prices, and growth center markets. and savings from other project (iv) Rehabilitation of 58 components (completion growth center date 31 December 2003). markets. Part B2: Rehabilitation of sanitation Construction of Works completed by Public health and water supply facilities (i) 805 deep aquifers; December 2003 with facilities in flood-affected areas. (ii) 105 pond sand delay of about 18 months fillers; because of late award of (iii) 574 ring wells and contract and slow 5 production wells; progress during and implementation. (iv) 300 sanitary latrines. Rehabilitation of 48 village sanitary sheds. Part C: Repair and rehabilitation of (i) Rehabilitation of Major targets achieved. Railways railway embankment, track, 128 km of railway However, loan allocation bridges, and facilities. tracks; was not fully used (ii) Reconstruction of 6 because of lengthy bridges; and procurement procedures. (iii) Repair of 30 units Works completed by 31 of staff quarters, October 2003 instead of passenger scheduled target date of platform, approach 30 June 2003. roads, construction of retaining wall, drain, etc. Part D: Repair and reconstruction (i) Repair and Although substantial work Water of flood control and reconstruction of was carried out, the management and drainage facilities 187km original target could not drainage facilities (embankments, drainage embankment; be achieved and BWDB structures, and canals, (ii) Repair and could not use the total including protection works) reconstruction of allocation in this 6

Project As Targeted As Achieved Remarks Component at Appraisal on Completion in flood-affected Chua- 110 structures; component. This was due danga, Jessore, Jhenaidah, (iii) Repair and to a delay in procurement Kushtia, Magura, and Sat- reconstruction of of civil works contracts khira districts. 216 flap gates; caused by prolonged (iv) Re-excavation of BWDB procedures and its 171 km canal/river; failure to plan for (v) Protective work on optimum use of dry 9 km seasons. embankment/river bank; (vi) Removal of 210 cross-dams; and (vii) Repair of 2 km road on canal embankment. Part E: Socioeconomic SRF loan was provided Procedural delay by Socioeconomic rehabilitation of flood- to 137,000 beneficiaries PKSF in opening an rehabilitation fund affected people through through 21 PKSF operating account for the microcredit facility to partner organizations in Project delayed the start mitigate the social and the districts of Satkhira, of credit distribution. economic impact of floods Jessore, Chuadanga, PKSF could not use the and improve the living Meherpur, Magura, and total allocated fund. conditions of the poor Jhenaidah. through swift provision of loans for village reconstruction, settlement development, and on- and off-farm income-generating activities. Part F: (i) Repair and Targets achieved well Agriculture rehabilitation of flood- within the allocated affected infrastructure time. at Dattanagar (Jhenaidah) and Meherpur Seed Multiplication Farms. (ii) Assistance in seed production program at Dattanagar farm to help supply seeds to flood- affected farmers for the next cropping season. BWDB = Bangladesh Water Development Board, PKSF = Palli Karma-Sahayak Foundation, SRF = Socioeconomic Rehabilitation Fund. Sources: ADB. 2000. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Southwest Flood Damage Rehabilitation Project and on a Proposal to Use Loan Savings. Manila (Loan 1825-BAN[SF]); EA’s project completion reports for Part A, B, D, and E ; and Project Completion Review Mission findings

C. Project Costs

11. The total project cost at appraisal was $84.9 million equivalent (including service charges during construction) comprising foreign exchange costs of $29.9 million and local 7 currency costs of $55.0 million equivalent. Out of this, $54.8 million10 (SDR 43.747 million) was to be financed from Southwest Flood Damage Rehabilitation Project11. In addition, savings from four ongoing ADB-financed projects12 ($13.0 million) was made available for project use (according to ADB policy on disaster rehabilitation,13 which allows the use of surplus loan funds for rehabilitation works). Savings under three of the four ongoing loans14 were cancelled and transferred to the fourth, Forestry Sector Project15. The remaining $17.1 million equivalent was to be financed by the Government as counterpart funds.

12. The actual cost of the completed works under the loan was $81.32 million, of which $64.74 was financed by ADB and the balance $16.58 million by the Government (Appendix 2). The unused balance of Southwest Flood Damage Rehabilitation Project16was $3,239,139. Out of $13 million allocated from the loan savings of other projects, $9.63 million was utilized. The low utilization of funds is attributed mainly to the actual cost being lower than the appraisal cost—the optimization of work volume during implementation was based on actual requirements in the field and contractors’ bid prices were significantly lower than the EAs’ appraisal estimates. In addition, some EAs (e.g., BWDB and PKSF) failed to utilize funds in time because of awkward administrative arrangements. The unutilized balance was cancelled when the loan account was closed on 17 May 2004.

D. Disbursements

13. Annual loan disbursements are in Appendix 3. The initial (18 July 2001) and final disbursements (17 May 2004) were made over 34 months as compared to a disbursement period of 31 months envisaged under the Loan Agreement. Although all physical activities under the loan were completed on the original loan closing date (31 December 2003), the loan account was kept open until 17 May 2004 due to delayed submission of withdrawal applications

10 Due to fluctuation of the exchange rate between SDR and $, the actual revised allocation at loan closing stood at $58.35 million. 11 ADB, 2000, Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Southwest Flood Damage Rehabilitation Project and on a Proposal to use Loan Savings. Manila (Loan 1825-BAN[SF]). 12 Surplus funds utilized from other loans were $2.3 million from (ADB. 1995. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grant to the People’s Republic of Bangladesh for the Coastal Greenbelt Project. Manila (Loan 1353-BAN [SF])); $2.2 million from (ADB. 1994. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for Jamuna Bridge Project. Manila (Loan 1298-BAN [SF])); $5.0 million from (ADB. 1996. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Forestry Sector Project. Manila (Loan 1486-BAN [SF])); and $3.5 million from (ADB. 1993. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grant to the People’s Republic of Bangladesh for the Secondary Education Development Project. Manila (Loan 1268-BAN [SF])). 13 Operations Manual Section 25: Rehabilitation Assistance After Disasters, and Operations Manual, Section 14: Use of Surplus Loan Funds. 14 ADB. 1995. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grant to the People’s Republic of Bangladesh for the Coastal Greenbelt Project. Manila (Loan 1353-BAN [SF]); ADB. 1994. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for Jamuna Bridge Project. Manila (Loan 1298-BAN [SF]); and ADB. 1993. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grant to the People’s Republic of Bangladesh for the Secondary Education Development Project. Manila (Loan 1268-BAN [SF]). 15 ADB. 1996. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Forestry Sector Project. Manila (Loan 1486-BAN [SF]). 16 ADB, 2000, Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Southwest Flood Damage Rehabilitation Project and on a Proposal to use Loan Savings. Manila (Loan 1825-BAN[SF]). 8 to ADB by LGED, RHD, BWDB, and DPHE. In the initial period ending December 2001, disbursement was slow, mainly due to delays in EAs’ completion of preparatory arrangements and award of contracts to bidders, particularly by RHD. Other reasons include shortage of adequate government counterpart funds in the RHD component and procurement delays due to lengthy procedures. The disbursement backlog was cleared towards the end of the Project through accelerated progress and improved disbursement.

14. Imprest accounts were envisaged for each EA, except RHD and PKSF. Reimbursement procedures for current ADB-financed projects were followed for the RHD component (Part A), while the Government signed a subsidiary loan agreement with PKSF (Part E) for withdrawals through a special account established for this purpose. ADB’s statement of expenditures (SOE) procedure was followed to reimburse eligible expenditures and liquidate advances to the imprest accounts. The EAs’ imprest accounts were well-maintained and SOE procedures facilitated timely payment to consultants, contractors, and suppliers. The Loan Agreement provided for retroactive financing (considering the Project’s emergency nature), which remained within the prescribed ceiling of 10% of the loan amount allocated to each part of the project.

E. Project Schedule

15. Although considerable delay occurred in the tendering process and award of contracts in all components, implementation of RHD and LGED works proceeded smoothly and most of the works were completed on time by 30 June 2003 (Appendix 4). However, to utilize the savings that arose from low bid prices and savings from other EAs (especially BWDB), RHD and LGED undertook additional subprojects on other damaged roads and the works continued until December 2003. The appraisal projected that DPHE works (Part B2: public health facilities) would be completed by June 2002 but the delayed bidding and award of contracts meant that actual implementation started at the end of 2002, postponing the scheduled completion date by more than a year. BR’s component (Part C: railway) also suffered implementation delays and one bridge contract had to be cancelled due to time restrictions. BR’s failure to use funds allocated curtailed a lot of its originally planned works. Delays were mainly due to BR’s unwieldy procurement procedures. Significant delay also occurred in BWDB’s bidding process and award of contract (Part D: water management and drainage facilities). PKSF’s disbursement of funds to flood-affected people was delayed about a year (Part E: socioeconomic rehabilitation fund) due to procedural delays in opening an operating bank account. BADC’s works (Part F: seed multiplication farm) were completed successfully but were more than a year late. Although these delays did not adversely impact the overall cost structure and project implementation schedule (except in the case of BWDB), timely action by the EAs could have minimized such delays, and project benefits could have reached the affected people much earlier.

F. Implementation Arrangements

16. As the Project was designed to provide short-term rehabilitation, there was no need for new or elaborate institutional arrangements, or separate project implementation units within the EAs. The EAs or project implementation units in the flood-affected region were responsible for implementing the Project. However, a PSC17 was established within the Planning Commission to coordinate implementation, considering the emergency nature of the works, short implementation period, and scope of works covering six sectors and seven EAs. The PSC, chaired by the member of Physical Infrastructure Division of the Government’s Planning

17 A PSC was initiated for the first time in the 1998 Flood Damage Rehabilitation Project and found to be very effective. 9

Commission, was responsible for coordination and resolution of interagency issues, as well as monitoring overall project implementation. Coordination between ADB and EAs, government agencies, consultants, and contractors was adequately maintained through quarterly PSC meetings. The Bangladesh Resident Mission (BRM) hosted frequent coordination meetings with project directors and consultants. These meetings reviewed the physical progress of each component, discussed problems, and agreed solutions. PSC activities have proved very effective in early problem identification and remedial actions, thus minimizing implementation delays. The Government also approved simplified procedures for tendering, approval, and award of contracts. The Government’s local competitive bidding procedures—ADB-approved two-envelope system—were followed. ADB’s approval system for award of civil works contracts was also simplified. ADB reviewed and approved tender evaluation and contract documents for civil works for the first subproject selected by each EA, and for civil works exceeding $200,000 equivalent, before awarding contracts.

17. Given the urgency of the Project and the need to initiate flood damage rehabilitation before the next monsoon season, ADB approved advance action for procuring essential equipment, materials and civil works, and recruiting consultants. ADB also agreed to provide retroactive financing of eligible expenditures subject to certain conditions18.

18. Considering the complex nature of the Project, the overall implementation arrangements were generally satisfactory and worked effectively, despite delays in certain components and some EAs’ inability to fully utilize the loan. There were no major changes in project scope during implementation and, therefore, no changes in implementation arrangements.

G. Conditions and Covenants

19. The status of compliance with major loan covenants is in Appendix 5. All loan effectiveness conditions were generally met in time and the loan was declared effective on 31 May 2001, 25 days after the scheduled date. Most covenants in the Loan Agreement are generally relevant except one (Section 4.05) that required the project facilities to be insured. This covenant was not practical and could not be fulfilled in a project with many subprojects, implemented by small contractors over a short period.

20. Project reporting requirements have not been met fully. RHD, LGED, BWDB, and PKSF submitted project completion reports (PCRs) substantially in compliance with the requirements. However, DPHE, BR, and BADC did not submit PCRs, except those submitted to the Planning Commission’s Implementation, Monitoring and Evaluation Division (IMED), which do not meet ADB requirements. PCRs submitted by different EAs lack uniformity in format and data, and the information provided is inadequate and sometimes incorrect—mainly due to EAs’ lack of familiarity with ADB PCR requirements.

18 ADB agreed to provide retroactive financing of eligible expenditures incurred not earlier than 15 November 2000 (date of appraisal), provided that the expenditures are certified by the EAs and consultants, and that such certification is acceptable to ADB. Retroactive financing will be approved under the following conditions: (i) the consultants are in the field and have prepared the subproject, (ii) contracts over $50,000 equivalent were approved by ADB, and (iii) works were tendered according to agreed upon procedures and certified by the consultants. Retroactive financing for consulting services has been requested and approved for any expenditures incurred not earlier than 15 November 2000. Such retroactive financing should not exceed 10 percent of the loan amount allocated to each project component (ADB, 2000, para. no. 76 of Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Southwest Flood Damage Rehabilitation Project and on a Proposal to use Loan Savings. Manila (Loan 1825-BAN[SF]).) 10

21. Each EA maintained separate records and accounts to identify the goods and services financed under this loan. The accounts have been audited annually by independent auditors. Audited project accounts were generally submitted to ADB on time and substantially met loan covenant requirements.

H. Related Technical Assistance

22. Due to the emergency nature of the Project, no technical assistance or project preparatory technical assistance was provided.

I. Consultant Recruitment and Procurement

23. ADB approved advance action in EAs’ recruitment of consultants to increase expediency and efficiency, as stipulated in the Loan Agreement. Direct engagement of consultants was undertaken by extending the scope of consultants’ ongoing contracts with the EAs under related ADB-assisted projects, in accordance with ADB’s Guidelines on the Use of Consultants. This allowed immediate deployment of consultants to assess damages and prepare bidding documents. At appraisal, it was estimated that the Project would require 105 person-months of international and 560 person-months of domestic consulting services for Part A (RHD), Part B (LGED), and Part D (BWDB). It was agreed that existing EA resources would be adequate for the other components (DPHE, BR, PKSF, and MOA). EAs received technical and financial proposals from existing consultants and signed contracts. A summary of the input of the consultants as envisaged during appraisal and as utilized at completion is in Appendix 6. The actual input of consulting services increased to 113 person-months of international and 711 person-months of local consultants. This increase is justified because the completion date of relevant components shifted from 30 June 2003 to 31 December 2003.

24. Civil works were procured though local competitive bidding, generally following ADB’s Guidelines for Procurement. As many as 828 civil works contract packages were procured, comprising 72 for Part A (RHD), 471 for Part B1 (LGED), 7 for Part B2 (DPHE), 17 for Part C (BR), 236 for Part D (BWDB), and 25 for Part F (MOA). Procurement of all contract packages went smoothly, except in the case of BR, BWDB, and DPHE, where delays were attributed mainly to time-consuming EA and government approval processes. ADB closely monitored the procurement process and intervened where lack of transparency and delays were observed. In the case of BWDB, 12 contract packages were cancelled due to bid bracketing and the EA’s negotiation with the bidders. One DPHE contract was not approved by ADB due to post-tender negotiation with the lowest bidder. In the case of RHD, some contractors submitted fraudulent experience certificates and were rejected by ADB, which declared them ineligible to bid for future ADB-financed projects.

J. Performance of Consultants, Contractors, and Suppliers

25. The performance of the consultants was generally satisfactory, given the multitude of small contractors and scattered subproject sites. However, these characteristics are thought to have affected the performance of some consultants, particularly for BWDB. Construction supervision under this component was less than satisfactory because insufficient staff were deployed on-site. The contribution of consultants in project preparation, monitoring, supervision, and quality control of works resulted in timely utilization of allocated funds and generation of additional subprojects using loan savings. This is adequately reflected in the good performance of RHD and LGED. Thus, a strong consultancy input is an essential prerequisite for proper management and success of an emergency assistance loan with multiple components. 11

26. Most project contractors performed satisfactorily and the quality of completed works compared favorably with the average standard of similar civil works in Bangladesh. However, due to the multitude and small size of contracts (except for some large RHD subprojects), only small local contractors were engaged. Some lacked the experience and financial strength to mobilize resources and equipment on time, adversely affecting the timely completion and quality of some contracts. In Part A (RHD), the relatively large size of some of the contract packages enabled contractors to procure road construction equipment, contributing to better quality and timely completion of works, in addition to contractors’ capacity building.

K. Performance of the Borrower and the Executing Agency

27. Notwithstanding the complexity of the Project—short implementation period, involvement of six sectors, and seven EAs—the Borrower performed satisfactorily to achieve successful project implementation. All major conditions and covenants of loan effectiveness were fulfilled expeditiously and the loan became effective in the shortest possible time.19 The PSC, established quickly within the Planning Commission, performed well and fulfilled most of its obligations in monitoring project implementation by different EAs. However, during the early stages of the Project, substantial delay in approving the award of contracts and releasing government counterpart funds delayed work progress.

28. Out of seven EAs, the performance of RHD (Part A) and LGED (Part B1) are ranked highly satisfactory. RHD effectively utilized a major part of the loan and the proceeds of savings from other loans, and managed to undertake additional subprojects. Its scope increased from 49 to 72 contract packages. Despite initial delays in award of contracts, RHD completed all works by the loan closing date of 31 December 2003. In the early stages, absence of clear demarcation of roads under RHD and LGED led to some overlap in selecting subprojects. Lack of transparency in RHD’s recommendations was noted for some additional contracts ineligible under this loan. LGED completed all subprojects within the original time frame. Missing links, initially omitted due to fund constraints, undermined the utility of LGED-constructed roads but additional contracts were funded from the savings of other components. The quality of works completed by LGED was satisfactory.

29. DPHE’s performance (Part B2) was generally satisfactory, despite some implementation delays and failure to use the initial allocated fund. Progress suffered because of delayed approval of the revised project concept paper, bidding and award of civil works contracts, and subsequent delays in releasing government counterpart funds. Post-tender negotiation with a bidder led ADB to cancel one of DPHE’s contract packages. DPHE did not submit a project completion report in the prescribed ADB format. The performance of MOA (Part F) was satisfactory, having fully utilized loan proceeds.

30. Considering the emergency nature of the works and short implementation period, no institutional development was envisaged at project appraisal. However, the financial authority of the Government was substantially delegated to the EAs, which speeded up the overall procurement process. As expected, RHD and LGED demonstrated that they were the most capable organizations among the EAs. BWDB and DPHE were expected to perform better than in the past but did not, probably because they were unable to overcome their outmoded project management system. Similarly, BR was unable to adopt a time-effective procedure for administration and project management.

19 The loan was declared effective on 31 May 2001, less than a month from the date as per the Loan Agreement. 12

L. Performance of the Asian Development Bank

31. ADB’s performance is considered satisfactory in its timely response to assist the Government undertake rehabilitation works and process the loan in the shortest possible time. The project design took into account lessons learned from seven previous loans provided to Bangladesh for post-disaster rehabilitation. Project formulation and implementation arrangements were generally satisfactory. Loan administration was delegated to BRM on 28 February 2001 and declared effective on 31 May 2001. Timely involvement of BRM facilitated commencement of project works on schedule. ADB agreed advance procurement action for equipment and materials, recruitment of consultants, and provision for retroactive financing, which was effective and saved time. ADB recommended simplified approval procedures20 of contract awards, which were realistic for the Project. ADB-BRM carried out effective coordination through quarterly PSC meetings and monthly meetings with EAs’ project directors. BRM played a pivotal role with respect to contract packaging, transparency, and timely approval in award of contracts; quick disbursement and reallocation of funds; approval of variation orders; and time extension of civil works contracts. ADB fielded four project review missions and two special administration missions during the implementation period, which have been very effective in identifying, discussing, and solving problems on-site.

III. EVALUATION OF PERFORMANCE

A. Relevance

32. The Project’s design and formulation conformed with the Government’s development strategy to promote economic development through improving infrastructure. This is in line with ADB’s 1999 country operational strategy, which aims to reduce poverty through economic development (para. 4). The Project was designed to restore flood-damaged infrastructure facilities essential to economic growth. Appraisal objectives were almost fully achieved upon completion. With the infrastructure restored, affected sectors were able to contribute to economic growth, at least at pre-flood levels. No major changes were made to project design during implementation. The Project is, therefore, considered highly relevant.

B. Efficacy in Achievement of Purpose

33. The Project is considered highly effective as the completed subprojects in all components achieved their principal objective of restoring damaged infrastructure to pre-flood levels. Social and economic activities, disrupted by the flood, were resumed when community infrastructure was rehabilitated. Farmers in low-lying, flood-prone areas benefited from reduced waterlogging of agricultural land. Restoration of community water and sanitation facilities reduced the risk of health-related problems and improved quality of life. Rehabilitation works in the railways ensured restoration of disrupted train services. Road and bridge works facilitated communication where floodwaters had washed away existing bridges or large sections of the road, isolating villages from nearby urban centers. Restoration of accessibility to markets and growth centers was particularly important with respect to perishable agro-based products. The socioeconomic rehabilitation fund provided microcredit for village reconstruction, rehabilitation of housing, and on- and off-farm income-generating activities. Rehabilitation of seed multiplication farms resumed supply of seeds to flood-affected farmers to enable cultivation in the coming cropping season.

20 Government of Bangladesh. Circular No. PD NEC-EC/NEC/Coordination-2/13/98/223. 16 October 2000. 13

34. In general, all project components made notable contributions to poverty reduction in the immediate vicinity. Subproject construction activity involved localized civil works using unskilled and semi-skilled labor. Those employed in the works benefited from increased income and purchasing power. However, numerical assessment of the Project’s impact on poverty reduction could not be made, as an adequate monitoring mechanism was not included in the project design due to time constraints. An assessment of project impacts and benefits on the basis of sample subprojects is in Appendix 7.

C. Efficiency in Achievement of Outputs and Purpose

35. Given the emergency nature of the Project, no formal economic analysis was undertaken at appraisal to justify the investment. The Project focused on the restoration of flood-damaged key infrastructure facilities and capital costs were considered sunk costs. The economic benefits of such restoration activities were, in fact, those that accrued at the time of initial construction, but were mostly lost due to flood damage. Project-financed restoration brought infrastructure back to original productivity and efficiency levels. These benefits are high, though not always quantifiable for all project components.

36. Without defined baseline or time series socioeconomic data for most components, and given the fact that the damaged facilities were restored only to their pre-flood status, no attempt was made to conduct economic evaluation for those components with little or no data.21 Economic efficiency, as measured by the economic internal rate of return (EIRR), was assessed for two sample road sections in Part A (national, regional and feeder roads type-A) because road projects are more amenable to benefit quantification. Results show that the investment has been highly efficient (Appendix 8).

Table 2: Results of Economic Evaluation on Selected Project Road Sections

Length under Completion Cost EIRR Contract No. Road Name Contract (km) (Tk million/km) (%)

SWFDRP/JE/NR/1 Jessore – Benapole 38 2.59 47.76

SWFDRP/K/R/1 Kushtia - Meherpur 28 2.85 25.59

EIRR = economic internal rate of return, km = kilometer, Tk = taka.

Source: Project Completion Review Mission findings

D. Preliminary Assessment of Sustainability

37. Most restoration works were emergency, aimed at meeting immediate needs, but restoration of permanent structures improved the ability of the relevant sectors to withstand future floods. Technical design followed national standards to enhance sustainability. In order to further improve sustainability and reduce maintenance costs, strict quality control was applied through the project consultants and EAs. The PCR mission observed that most project roads visited are in satisfactory condition after 1–2 years, and likely to last their design life of 3–4 years.

21 Section 25, ADB’s Operations Manual states that “the rehabilitation loan may finance numerous subprojects that are small in size and prima facie economically viable. For such small subprojects, internal rate of return analysis may not be feasible or practical.” 14

38. Project sustainability is determined by the EAs’ ability to preserve assets created or restored in good condition through proper maintenance. To ensure sustainability and facilitate monitoring, covenants relating to the Project’s operation and maintenance (O&M) expenditures may need to be specific for each sector. Generic formulation leaves it open to the discretion of the EAs, which are faced with perennial funding shortfalls and must resort to deferred maintenance. To overcome shortfalls in O&M funds, involvement of beneficiary association in restoration activities may positively influence subproject sustainability. The creation of an independent and self-supporting “road fund”, under active consideration by the Government, could be a permanent solution to this problem in the road sector. Most of the permanent structures (bridges, culverts, protective works, sluice gates, embankments, and railway tracks) constructed or rehabilitated under the Project are still in good condition and likely to be sustainable in future floods. This should be continued by proper maintenance through allocation of adequate funds. Water supply and sanitation facilities provided under the Project are well maintained and likely to be sustainable. The overall rating is therefore that project outputs are likely to be sustained.

E. Environmental, Sociocultural, and Other Impacts

39. Project activities did not interfere with ecosystems, as almost all work was restorative. In a few cases, where designs were modified slightly to relocate damaged infrastructure, no adverse environmental or sociocultural effects were allowed. However, all work was undertaken in existing alignments or original sites, and no land acquisition or resettlement was undertaken. The project works have generally improved the quality of life of the rural communities, which are the principal beneficiaries. The restoration works allowed normal activities to be resumed with more access to markets, hospitals, and schools. People returned to their homes and normal activities with greater assurance that physical infrastructure is now well-placed to cope with future floods. The rating of the impacts is assessed as moderate.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

40. The Project followed a sectoral approach, which is the most appropriate for emergency assistance. This allowed the loan proposal to be processed rapidly at the same time as a detailed needs assessment. It also facilitated a flexible response within the selection criteria adopted. All the subprojects were completed by the original loan closing date of 31 December 2003. Implementation of some components, however, required rescheduling to accommodate additional subprojects. The quality of works has generally been as expected at appraisal. Most appraisal purposes and objectives have been achieved. The performance of the Project was rated highly satisfactory, following the guidelines of ADB’s Operations Evaluation Department.

B. Lessons Learned

41. A review of project performance and organizational experience with emergency rehabilitation assistance for Southwest Flood Damage Rehabilitation Project22 (SWFDRP) indicates the following lessons and, where relevant, ADB follow-up. The lessons learned have

22 ADB. 2000. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Southwest Flood Damage Rehabilitation Project and on a Proposal to use Loan Savings. Manila (Loan 1825-BAN[SF]). 15 also been used by ADB in the processing and ongoing implementation of Emergency Flood Damage Rehabilitation Project23: (i) Coordination and monitoring of project implementation through a central PSC of the Borrower is very important for multi-sector projects that involve a large number of EAs. Regular interaction between the Government and ADB through the PSC contributed greatly to the success of the Project. (ii) Delegation of authority to ADB mission in the Borrower’s country is essential for close monitoring and expediting decision-making processes. (iii) Provision for retroactive financing facilitates exploitation of first available working season to urgently rehabilitate damaged critical facilities. (iv) Disbursement of funds through establishment of an imprest account by each EA is vital for timely payment to consultants, contractors, and suppliers. (v) Procedural delay in recruitment of consultants and procurement of civil works contracts is the main reason for delayed project implementation. ADB followed this up during the country program review mission 2005 and agreed on a plan to mitigate such delays. (vi) Timely completion of works requires streamlining of EAs’ procurement and recruitment procedures, full implementation of newly-approved national public procurement guidelines, and further capacity building and training on contract administration and ADB procedures for procurement and disbursement. (vii) Adequate consulting support results in better EA performance in project preparation, monitoring, supervision, quality control of works, and timely utilization of loan funds. This is particularly relevant where a large number of small subprojects are implemented over a wide area. (viii) Larger contracts are more efficient in terms of monitoring, quality control, and timely completion of works, although they depend on the capacity of EAs concerned. Contractors must invest to purchase equipment and machinery, resulting in enhanced capacity and development of the construction industry. The issue has been reflected in several subsequent ADB loan agreements, with a minimum contract size included. (ix) Most EAs did not make adequate provision for maintenance funds, which are essential for long-term sustainability. ADB, together with other development partners, is seeking to assist the Government establish a road fund to ensure a sustainable flow of maintenance funds for road infrastructure. (x) Money from the SRF should be disbursed immediately after the flood to address the emergency needs of the poor and disadvantaged.

C. Recommendations

1. Project Related

42. The Government should regularly provide adequate funds for routine, periodic, and emergency maintenance of completed subprojects under this loan, through allocation in the annual development program of each fiscal year. This relates to all subcomponents and will require annual monitoring by the EAs. It is expected that the Government will enact a road fund during fiscal year 2005/06, which would ensure adequate funding of road infrastructure maintenance. ADB is monitoring this process. The completed subprojects related to riverbank

23 ADB. 2005. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grants to Bangladesh for the Emergency Flood Damage Rehabilitation Project, Manila Loan 2156-BAN[SF]). 16 protection and flood control embankments should be closely monitored annually by BWDB, particularly during each monsoon season. All EAs should undertake urgent remedial measures, where necessary. The Government should develop an administrative mechanism for using SRF funds that are idle with PKSF, which has fully recovered the loan disbursed to the beneficiaries.

2. General

43. For successful implementation of future ADB-supported emergency assistance projects, a central coordination and monitoring unit such as the PSC should be identified and planned for in detail at appraisal. The funding and disbursement mechanism should include establishment of imprest accounts by EAs. These will help expedite project implementation through adequate coordination and ensure uninterrupted cash flow for contractors and consultants.

44. It is not possible to providing commercial insurance for project facilities with numerous small short-term subprojects. Therefore, this covenant should be modified to clearly state that all forms of insurance, including self-insurance, are permitted under the loan agreement. The number of contract packages should be limited by introducing medium and large contracts. This will facilitate contract administration and involve more resourceful contractors in the project works, thereby ensuring the high quality and sustainability of workmanship. To achieve long- term sustainability of the road improvement and rehabilitation works, the Government should undertake a regular maintenance program financed by an independent and self-supporting road fund by mobilizing user charges. Adequate consulting support in all sectors should be ensured to assist the EAs in assessment, design, tendering, monitoring, supervision, and quality control of works. All EAs should submit PCRs to ADB in its prescribed format within 3 months of the loan closing date, as stated in the loan agreement. Appendix 1 17

o o o 89 00'E 92 00'E 88 40'E 89o 40'E

o 26 00'N 26 o 00'N

G

a n ge s Ri Bheramara ver Daulatpur 24o 00'N 24o 00'N RAJSHAHI SYLHET Mirpur

I Kumarkhali B A N G L A D E S H I I I I Kushtia I I DHAKA I I DHAKA INDIA Meherpur KUSHTIA Khoksa Gangni MEHERPUR INDIA Alamdanga Sailkupa CHUADANGA M ad Chuadanga Harinakundu hu m Damurhuda a t i

KHULNA K R CHITTAGONG o i b Sripur v a JHENAIDAH e

d r a k o o R Magura 22 00'N 22 00'N iv Ch Jhenaidah e r itra Ri ver Kaliganj MAGURA Bay of Bengal Jiban Nagar Kotchandpur Mohammadpur MYANMAR

o Maheshpur Salikha 89 00'E 92 o 00'E B h Chaugacha a ir a Bagherpara b R iv Narail Lohagara e B A N G L A D E S H Jessorer SOUTHWEST FLOOD DAMAGE Jhikargacha JESSORE Sarsa NARAIL REHABILITATION PROJECT Abhaynaga Kalia Manirampur Part A: National, Regional and Type A Feeder Roads Benapole Phultala (as completed) Keshabpur Terakhada Kalaroa Dighalia

B

e t n Khulna a National Regional Feeder Road Bridges Culverts R Highways Highways Roads iv Dumuria Division (m) (m) er Tala Rupsa (km) (km) (km) Batiaghata Satkhira Chuadanga 10.30 43.40 45.00 Paikgacha Jessore 51.00 29.30 383.50 80.00 SATKHIRA Dacope Jhenaidah 232.90 109.00 Debhata Assasuni Khulna 65.30 KHULNA Kushtia 91.50 21.00 Kaliganj

Magura 31.40 79.00

Satkhira 76.00 Shyamnagar

Total 51.00 162.50 901.10 234.00 1,100.00

Koyra

National Capital Project Area District Headquarters o o 22 00'N Thana Headquarters 22 00'N Project Road National Highway N Regional Highway Thana Connecting Road 0 10 20 30 40 50 Broad Gauge Railway River Kilometers District Boundary Division Boundary International Boundary B a y o f B e n g a l Boundaries are not necessarily authoritative. o 88o 40'E 89 40'E

05-4276i RM Appendix 1 18

o o o 89 00'E 92 00'E 88 40'E 89o 40'E

o 26 00'N 26 o 00'N

G

a n Bheramara ge s Ri ver Daulatpur 24o 00'N 24o 00'N RAJSHAHI SYLHET Mirpur

B A N G L A D E S H Kushtia Kumarkhali DHAKA DHAKA Gangni INDIA Meherpur KUSHTIA Khoksa

MEHERPUR INDIA Alamdanga CHUADANGA Sailkupa Naba M ad Chuadanga Harinakundu gang hu a Riv m Damurhuda a t er i

KHULNA K R CHITTAGONG o i b Sripur v a JHENAIDAH e

d r a k o o R Ch 22 00'N 22 00'N iv itra Jhenaidah Magura e Ri r ver Kotchandpur Kaliganj MAGURA Jiban Nagar Mohammadpur Bay of Bengal MYANMAR Salikha o Maheshpur 89 00'E 92 o 00'E B h a Chaugacha ir a Bagherpara b R K iv o e Lohagara b r a d a Jessore k Narail B A N G L A D E S H Jhikargacha R iv e JESSORE r NARAIL SOUTHWEST FLOOD DAMAGE Abhaynaga Sarsa Kalia REHABILITATION PROJECT Manirampur Benapole Part B1: Roads, Structures, and Growth Center Markets Terakhada Keshabpur Phultala (as completed) Kalaroa B Dighalia

e t n a Khulna R iv Rupsa e Dumuria r Tala

Name of Work Batiaghata Satkhira District FRB/RR Drainage Growth Roads (km) Structure Center SATKHIRA on FRB/RR Market (No.) Paikgacha Dacope Debhata Assasuni Chuadanga 129.90 15.75 5.00 Jessore 228.03 311.35 6.00 KHULNA Jhenaida 116.32 71.40 3.00 Kaliganj Khulna 108.12 13.65 12.00 Satkhira 263.05 297.17 12.00

Kushtia 188.04 128.2 28.00 Shyamnagar Magura 125.14 – 5.00 Meherpur 105.86 44.30 7.00 Total 1,264.46 881.84 58.00 Koyra – = not available, FRB = Feeder Road Type B, km = kilometer, no = number, RR = Rural Road

22o 00'N 22o 00'N National Capital Project Area District Headquarters N Thana Headquarters River District Boundary 0 10 20 30 40 50 Division Boundary International Boundary Kilometers Boundaries are not necessarily authoritative. B a y o f B e n g a l o 88o 40'E 89 40'E

05-4276b RM Appendix 1 19

o o o 89 00'E 92 00'E 88 40'E 89o 40'E

o 26 00'N 26 o 00'N

G

a n Bheramara ge s Ri ver Daulatpur 24o 00'N 24o 00'N RAJSHAHI SYLHET Mirpur B A N G L A D E S H Kumarkhali DHAKA Kushtia DHAKA INDIA Gangni Meherpur KUSHTIA Khoksha

INDIA MEHERPUR Alamdanga CHUADANGA Sailkupa Naba M ad Chuadanga Harinakunda gang hu a Riv m a t er i KHULNA K CHITTAGONG o R Damurhuda i b Sripur v a JHENAIDAH e

d r a k 22 o 00'N 22 o 00'N R Magura iv Jhenaidah e r

Ch itr Kaliganj MAGURA a Jiban Nagar Ri Bay of Bengal Kotchandpur ve Mohammadpur MYANMAR r Salikha 89 o 00'E 92 o 00'E Maheshpur B h a Chougacha ir a Bagherpara b R

K iv o Lohagara b e a r d a Jessore Narail k B A N G L A D E S H Jhikargacha R iv e

r JESSORE SOUTHWEST FLOOD DAMAGE NARAIL Sarsa Abhaynaga Kalia REHABILITATION PROJECT Manirampur Part B2: Public Health Facilities Benapole Keshabpur Phultala (as completed) Terakhada Kalaroa Dighalia B

e t n Khulna a R Rupsa iv Dumuria Deep Hand Deep Hand Ring Well Pond Construction Repair Construction of Installation er Tala District Tube well Tara Sand of of Production Well of Satkhira Batiaghata No-6 Tube well Filter Latrine V.S. Shed Pump House etc. Pump Motor SATKHIRA Jessore 180 65 100 30 60 10 3 3 Paikgacha Dacope Jhenaida 125 0 165 15 65 10 2 2 Debhata Assasuni Kushtia 0 0 234 0 70 8 0 0 KHULNA Magura 110 65 0 0 20 3 0 0 Kaliganj Meherpur 0 0 75 0 20 3 0 0 Satkhira 260 0 0 60 65 14 0 0 Total 675 130 574 105 300 48 5 5

V.S.= village sanitary Shyamnagar

N Koyra

0 10 20 30 40 50 22o 00'N 22o 00'N Kilometers

National Capital Project Area District Headquarters Thana Headquarters River District Boundary Division Boundary International Boundary B a y o f B e n g a l Boundaries are not necessarily authoritative. o 88o 40'E 89 40'E

05-4276c RM Appendix 1 20

o o o 89 00'E 92 00'E 88 40'E 89o 40'E

o 26 00'N 26 o 00'N

G

a n ge s Ri Bheramara ver Daulatpur 24o 00'N 24o 00'N RAJSHAHI DHAKA SYLHET Mirpur

I Kumarkhali B A N G L A D E S H I I I I Kushtia I I I I DHAKA INDIA KUSHTIA Khoksa Gangni MEHERPUR INDIA Alamdanga Meherpur Sailkupa CHUADANGA M ad Chuadanga Harinakundu hu m Damurhuda a t i

KHULNA K R CHITTAGONG o i b Sripur v a JHENAIDAH e

d r a k o o R Ch Magura 22 00'N 22 00'N iv itra Jhenaidah e Ri r ver Kotchandpur Kaliganj MAGURA Bay of Bengal Jiban Nagar Mohammadpur MYANMAR

o Maheshpur Salikha 89 00'E 92 o 00'E B h Chaugacha a ir a Bagherpara b R

K iv Narail o Lohagara b e a r d a Jessore k Jhikargacha R iv e

r JESSORE Sarsa NARAIL B A N G L A D E S H Abhaynaga Kalia Manirampur SOUTHWEST FLOOD DAMAGE Benapole Phultala REHABILITATION PROJECT Keshabpur Terakhada Kalaroa Dighalia Part C: Railways B e t n Khulna a (as completed) R iv Dumuria er Tala Rupsa Batiaghata Satkhira

Paikgacha SATKHIRA Dacope Assasuni N Debhata KHULNA Kaliganj 0 10 20 30 40 50

Kilometers Shyamnagar

National Capital Koyra Project Area District Headquarters Thana Headquarters

22o 00'N National Highway 22o 00'N Regional Highway Thana Connecting Road Broad GaugeRailway Project Railway River District Boundary Division Boundary International Boundary B a y o f B e n g a l o 88o 40'E 89 40'E

05-4276e RM Appendix 1 21

o o o 89 00'E 92 00'E 88 40'E 89o 40'E

o 26 00'N 26 o 00'N

G

a n ge s Bheramara Ri ver Daulatpur 24o 00'N 24o 00'N RAJSHAHI SYLHET Mirpur

I Kumarkhali B A N G L A D E S H I I I I Kushtia I I I DHAKA I DHAKA INDIA KUSHTIA Khoksa Gangni MEHERPUR INDIA Alamdanga Meherpur Sailkupa CHUADANGA M ad Chuadanga Harinakundu hu m Damurhuda a t i KHULNA K CHITTAGONG o R i b Sripur v a JHENAIDAH e

d r a k o o R Ch Magura 22 00'N 22 00'N iv itra Jhenaidah e Ri r ver Kotchandpur Kaliganj MAGURA Bay of Bengal Jiban Nagar Mohammadpur MYANMAR

o Maheshpur Salikha 89 00'E 92o 00'E B h Chaugacha a ir a Bagherpara b R

K iv Narail o Lohagara b e a r d a Jessore k Jhikargacha R B A N G L A D E S H iv e

r JESSORE Sarsa NARAIL SOUTHWEST FLOOD DAMAGE Abhaynaga Kalia Manirampur REHABILITATION PROJECT Benapole Phultala Part D: Water Management and Drainage Facilities Keshabpur Terakhada (as completed) Kalaroa Dighalia B

e t n Khulna a R Rupsa iv Dumuria er Tala Item Satkhira Jhenaidah Jessore Magura Chuadanga Kushtia Total Batiaghata Satkhira Embankment (km.) 149 3 23.2 8.7 1.5 1.1 186.5 Paikgacha SATKHIRA Structure (no.) 61 2 3 – 42 2 110 Dacope Assasuni Gate (no.) 216 – – – – – 216 Debhata

Excavation of 146.1 – 24.8 – – – 170.9 KHULNA Khal/River (km.) Kaliganj Protective 8.4 – – – – 0.6 9.0 Work (km.) Shyamnagar Cross-Dam (no.) – – 210 – – – 210

Repair of Road (km.) – – – – 1.3 0.8 2.1

– = not available, km= kilometer, no.= number. Koyra National Capital Project Area District Headquarters Thana Headquarters 22o 00'N 22o 00'N National Highway Regional highway Thana Connecting Road Project Railway N Broad GaugeRailway River District Boundary 0 10 20 30 40 50 Division Boundary International Boundary Kilometers B a y o f B e n g a l

Boundaries are not necessarily authoritative. o 88o 40'E 89 40'E

05-4276f RM Appendix 1 22

o o o 89 00'E 92 00'E 88 40'E 89o 40'E

o 26 00'N 26 o 00'N

G

a n ge s Ri Bheramara ver Daulatpur 24o 00'N 24o 00'N RAJSHAHI SYLHET Mirpur

I Kumarkhali B A N G L A D E S H I I I I Kushtia I I DHAKA I I DHAKA INDIA Meherpur KUSHTIA Khoksa Gangni MEHERPUR INDIA Alamdanga Sailkupa CHUADANGA M ad Chuadanga Harinakundu hu m Damurhuda a t i

KHULNA K R CHITTAGONG o i b Sripur v a JHENAIDAH e

d r a k o o R Ch Magura 22 00'N 22 00'N iv itra Jhenaidah e Ri r ver Kotchandpur Kaliganj MAGURA Bay of Bengal Jiban Nagar Mohammadpur MYANMAR

o Maheshpur Salikha 89 00'E 92 o 00'E B h Chaugacha a ir a Bagherpara b R iv Narail Lohagara e Jessorer Jhikargacha B A N G L A D E S H JESSORE Sarsa NARAIL Abhaynaga SOUTHWEST FLOOD DAMAGE Kalia Manirampur REHABILITATION PROJECT Benapole Phultala Keshabpur Part E: Socioeconomic Rehabilitation Fund Terakhada Kalaroa Dighalia (as completed) B e t n Khulna a R iv Dumuria er Tala Rupsa Batiaghata Satkhira N SATKHIRAPaikgacha Dacope Debhata Assasuni

0 10 20 30 40 50 KHULNA Kaliganj Kilometers

National Capital Shyamnagar Project Area District Headquarters Thana Headquarters

Location of Socioeconomic Rehabilitation Fund Koyra Nongovernment Organizations National Highway

22o 00'N Regional Highway 22o 00'N Thana Connecting Road Broad Gauge Railway Project Railway River District Boundary Division Boundary International Boundary

Boundaries are not necessarily authoritative. B a y o f B e n g a l o 88o 40'E 89 40'E

05-4276g RM Appendix 1 23

o o o 89 00'E 92 00'E 88 40'E 89o 40'E

o 26 00'N 26 o 00'N

G

a n ge s Ri Bheramara ver Daulatpur 24o 00'N 24o 00'N RAJSHAHI SYLHET Mirpur

I Kumarkhali B A N G L A D E S H I I I I Kushtia I I DHAKA I I DHAKA INDIA Meherpur KUSHTIA Khoksa Gangni MEHERPUR INDIA Alamdanga Sailkupa CHUADANGA M ad Chuadanga Harinakundu hu m Damurhuda a t i

KHULNA K R CHITTAGONG o i b Sripur v a JHENAIDAH e

d r a k o o R Magura 22 00'N 22 00'N iv Ch Jhenaidah e r itra Ri ver Kaliganj MAGURA Bay of Bengal Jiban Nagar Kotchandpur Mohammadpur MYANMAR

o Maheshpur Salikha 89 00'E 92 o 00'E B h Chaugacha a ir a Bagherpara b R iv Narail Lohagara e Jessorer Jhikargacha JESSORE B A N G L A D E S H Sarsa NARAIL Abhaynaga Kalia SOUTHWEST FLOOD DAMAGE Manirampur Benapole REHABILITATION PROJECT Phultala Keshabpur Part F: Agriculture Terakhada Kalaroa Dighalia

B (as completed) e t n Khulna a R iv Dumuria er Tala Rupsa Batiaghata Satkhira

Paikgacha N SATKHIRA Dacope Debhata Assasuni 0 10 20 30 40 50 KHULNA Kaliganj Kilometers

Shyamnagar National Capital Project Area District Headquarters Koyra Thana Headquarters Project Seed Multiplication Farm National Highway Regional Highway 22o 00'N 22o 00'N Thana Connecting Road Broad Gauge Railway Project Railway River District Boundary Division Boundary International Boundary Boundaries are not necessarily authoritative. B a y o f B e n g a l o 88o 40'E 89 40'E

05-4276h RM Appendix 2 24

TABLE A2.1: SUMMARY OF PROJECT COSTS ($ million)

Item Appraisal Cost at Remarks Estimate Completion A. Civil works 1. Part A: National, regional 36.50 37.16 RHD and LGED could use additional and type-A feeder roads funds generated from savings from other 2. Part B: Rural Infrastructure 13.70 21.14 components to start additional works on 3. Part C: Railways 2.00 1.37 flood-damaged roads not initially included in the appraisal estimated due to fund constraints. 4. Part D: Water management 16.20 8.54 BWDB could not use the allocated fund and drainage facilities due to delay in procurement of contractors. 5. Part E: Socioeconomic 10.00 7.53 Procedural delay in PKSF opening bank rehabilitation fund account resulted in failure to use the allocated fund. 6. Part F: Agriculture 0.60 0.62 Subtotal (A) 79.00 76.35 B. Consulting services 1. Part A: National, regional 3.70 3.20 Appraisal estimated 105 (international) and type-A feeder roads and 560 person-months (domestic) 2. Part B: Rural Infrastructure 0.70 0.74 consulting services. The actual input was 3. Part D: Water 0.30 0.52 113 (international) and 635 person- management and drainage months (local). The actual cost was less facilities than the appraisal cost, despite Subtotal (B) 4.70 4.46 increased number of person-months. C. Land acquisition and 0.00 0.00 resettlement Subtotal (C) 0.00 0.00 Subtotal (A + B + C) 83.70 80.81 D. Service charge 1.20 0.50 Subtotal (D) 1.20 0.50 Total (A–D) 84.90 81.32 BWDB = Bangladesh Water Development Board, LGED = Local Government Engineering Department, PKSF = Palli Karma-Sahayak Foundation, and RHD = Roads and Highways Department. Sources: ADB. 2000. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Southwest Flood Damage Rehabilitation Project and on a Proposal to Use Loan Savings, Manila (Loan 1825-BAN[SF]); EA’s project completion reports for Part A, B, D, and E; and Project Completion Review Mission findings.

25 Appendix 3

TABLE A3.1: ANNUAL DISBURSEMENTS (Loan 1825-BAN [SF]) ($)

Category Item of Expenditure 2001 2002 2003 2004 Total

01A Part A (RHD): Civil works 0 4,948,580 21,243,985 2,423,666 28,616,231

01B Part A (RHD): Consulting services 848,140 1,230,438 1,007,550 116,428 3,202,556

02A Part B1 (LGED): Civil works 3,745,000 3,625,253 5,560,737 0 12,930,990

02B Part B1 (LGED): Consulting services 299,166 266,256 167,663 5,465 738,550

02C Part B2 (DPHE): Civil works 0 100,000 680,970 352,485 1,133,455

03A Part C (BR): Civil works 377,772 396,793 404,618 0 1,179,183

04A Part D (BWDB): Civil works 1,932,455 2,718,094 306,014 285,186 5,241,749

04B Part D (BWDB): Consulting services 188,296 36,302 0 295,955 520,553

05 Part E (PKSF): Rehabilitation fund 0 353,778 168,373 0 522,151

06A Part F (MOA): Seed multiplication 100,000 199,951 218,207 0 518,158 farm 07 Service charge during construction 15,101 122,234 366,712 0 504,047

Total 7,505,932 13,997,679 30,124,829 3,479,185 55,107,623a BR = Bangladesh Railway, BWDB = Bangladesh Water Development Board, DPHE = Department of Public Health Engineer, LGED = Local Government Engineering Department, MOA = Ministry of Agriculture, PKSF = Palli Karma- Sahayak Foundation, and RHD = Roads and Highways Department. a In addition to funds provided under the loan, an additional $9.63 million was provided from loan savings under other projects (para. 11 of main text). Sources: EA’s project completion reports for Part A, B, D, and E; and Project Completion Review Mission findings. Appendix 4 26

OVERALL PROJECT IMPLEMENTATION SCHEDULE

Figure A4.1: Implementation Schedule of all components

2000 2001 2002 2003 Activity N D J F M A M J J A S O N D J F M A M JJASOND J F M A M JJASOND Consulting services selection Detailed damage assessment, design and contract preparation

Supervision

Civil works bidding, approval and contract award

Construction

As at appraisal As actual

IMPLEMENTATION SCHEDULE BY COMPONENTS

Figure A4.2: National, Regional and Type-A Feeder Roads

2000 2001 2002 2003 Activity N D J F M A M J J A S O NDJFM A M JJA S ONDJ F M A M JJA S OND Consulting services selection Detailed damage assessment, design and contract preparation

Supervision

Civil works bidding, approval and contract award

Construction

As at appraisal As actual

27 Appendix 4

Figure A4.3: Type-B Feeder and Rural Roads, Structures and Growth Center Markets

2000 2001 2002 2003 Activity ND J F M A M J J A S O ND J F M A M JJASO ND J F MA M JJA S O ND Consulting services selection Detailed damage assessment design and contract preparation

Supervision

Civil works bidding, approval and contract award

Construction

As at appraisal As actual

Figure A4.4: Public Health Facilities

2000 2001 2002 2003 Activity N D J F M A M J J A S O NDJ FM A M JJASONDJ F M A M JJASOND

Detailed damage assessment Civil works bidding, approval and contract award

Construction

As at appraisal As actual

Appendix 4 28

Figure A4.5: Railways

2000 2001 2002 2003 Activity N D J F M A M J J A S O NDJ FM A M JJA S O NDJ F M A M JJASO ND Detailed damage assessment Bidding, approval and contract award

Construction

As at appraisal As actual

Figure A4.6: Water Management and Drainage Facilities

2000 2001 2002 2003 Activity N D J F M A M J J A S O NDJ FMAM JJASO NDJ F M A M JJASO ND Consulting

services selection Design and contract preparation

Supervision

Civil works

bidding, approval and

contract award

Construction

As at appraisal As actual Figure A4.7: Agriculture

2000 2001 2002 2003 Activity ND J F M A M J J A S O ND J FMA M JJASOND J F M A M JJASOND

Detailed damage assessment Bidding,

approval and contract

award

Construction

As at appraisal As actual 29 Appendix 5

TABLE A5.1: STATUS OF COMPLIANCE WITH MAJOR LOAN COVENANTS

Reference in Sl. Covenant Loan Status No. Agreement 1. (a) The Borrower shall cause the Project to be carried out with due diligence Section 4.01 Complied with. and efficiency and in conformity with sound administrative, financial, engineering, environmental, flood protection, drainage, roads and highways, railways, public health engineering, agricultural, and microcredit practices. (b) In the carrying out of the Project and operation of the Project facilities, the Complied with. Borrower shall perform, or cause to be performed, all obligations set forth in Schedule 5 to this Loan Agreement. 2. The Borrower shall make available, promptly as needed, the funds, facilities, Section 4.02 Complied with. services, land and other resources, which are required, in addition to the proceeds of the Loan, for the carrying out of the Project and for the operation and maintenance of the Project facilities. 3. (a) In the carrying out of the Project, the Borrower shall cause competent and Section 4.03 Complied with. qualified consultant and contractors, acceptable to the Borrower and ADB, to be employed to an extent and upon terms and conditions satisfactory to the Borrower and the Asian Development Bank (ADB). (b) The Borrower shall cause the Project to be carried out in accordance with Complied with. plans, design standards, specifications, work schedules and construction methods acceptable to the Borrower and ADB. The Borrower shall furnish, or cause to be furnished, to ADB, promptly after their preparation, such plans, design standards, specifications and work schedules, and any material modifications subsequently made therein, in such detail as ADB shall reasonably request. 4. The Borrower shall ensure that the activities of its departments and agencies Section 4.04 Complied with. with respect to the carrying out of the Project and operation of the Project facilities are conducted and coordinated in accordance with sound administrative policies and procedures. 5. (a) The Borrower shall make arrangements satisfactory to ADB for insurance Section 4.05 Not complied with of the Project facilities to such extent and against such risks and in such (see para. 44). amounts as shall be consistent with sound practice. (b) Without limiting the generality of the foregoing, the Borrower undertakes to insure, or cause to be insured, the goods to be imported for the Project Complied with. and to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable to replace or repair such goods. 6. (a) The Borrower shall maintain or cause to be maintained, records and Section 4.06 Complied with. accounts adequate to identify the goods and services and other items of expenditure financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect, in accordance with consistently maintained sound accounting principles, the operations and financial condition of the agencies of the Borrower responsible for the carrying out of the Project and operation of the Project facilities, or any part thereof. (b) The Borrower shall (i) maintain, or cause to be maintained, separate Complied with. accounts for the Project; (ii) have such accounts and related financial statements audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB; (iii) furnish to ADB as soon as available but in any event not later than 12 months after the end of each related fiscal year, certified copies of such Appendix 5 30

Reference in Sl. Covenant Loan Status No. Agreement audited accounts and financial statements and the report of the auditors relating thereto (including the auditor’s opinion on the use of the Loan proceeds and compliance with the covenants of this Loan Agreement as well as on the use of the procedures for the imprest accounts/statements of expenditures), all in the English language; and (iv) furnish to ADB such other information concerning such accounts and financial statements and the audit thereof as ADB shall from time to time reasonably request. (c) The Borrower shall enable ADB, upon ADB’s request, to discuss the Complied with. Borrower’s financial statements for the Project and its financial affairs related to the Project from time to time with the Borrower’s auditors, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB, provided that any such discussion shall be conducted only in the presence of an authorized officer of the Borrower unless the Borrower shall otherwise agree. 7. (a) The Borrower shall furnish, or cause to be furnished, to ADB all such Section 4.07 Complied with. reports and information as ADB shall reasonably request concerning (i) the Loan and the expenditure of the proceeds and maintenance of the service thereof; (ii) the goods and services and other items of expenditure financed out of the proceeds of the Loan; (iii) the Project; (iv) the administration, operations and financial condition of the agencies of the Borrower responsible for the carrying out of the Project and operation of the Project facilities, or any part thereof; (v) financial and economic conditions in the territory of the Borrower and the international balance-of- payments position of the Borrower; and (vi) any other matters relating to the purposes of the Loan.

(b) Without limiting the generality of the foregoing, the Borrower shall furnish, Complied with. or cause to be furnished, to ADB quarterly reports on the carrying out of the Project and on the operation and management of the Project facilities. Such reports shall be submitted in such form and in such detail and within such a period as ADB shall reasonably request, and shall indicate, among other things, progress made and problems encountered during the quarter under review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and expected progress during the following quarter. (c) Promptly after physical completion of the Project, but in any event not later Partially complied than 3 months thereafter or such later date as may be agreed for this with. (Only RHD, purpose between the Borrower and ADB, the Borrower shall prepare and LGED, PKSF and furnish to ADB a report on the execution and initial operation of the BWDB submitted Project, including its cost, the performance by the Borrower of its reports.) obligations under this Loan Agreement and the accomplishment of the purposes of the Loan. 8. The Borrower shall enable ADB’s representatives to inspect the Project, the Section 4.08 Complied with. goods financed out of the proceeds of the Loan, and any relevant records and documents. 9. The Borrower shall ensure that the Project facilities are operated, maintained Section 4.09 Complied with. and repaired in accordance with sound administrative, financial, engineering, environmental, and maintenance and operational practices. Sl. No.= Serial Number

Sources: ADB. 2000. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Southwest Flood Damage Rehabilitation Project and on a Proposal to Use Loan Savings, Manila (Loan 1825-BAN[SF]); EA’s project completion reports for Part A, B, D, and E; and Project Completion Review Mission findings. 31 Appendix 6

TABLE A6.1: DETAILS OF CONSULTING SERVICES

Sl. Component Appraisal Estimate Actual No. (person-month) (person-month)

1. Part A: National, regional and type-A feeder roads (i) International consultant 75 87 (ii) Domestic consultant 487 530

2. Part B: Rural Infrastructure (i) International consultant 30 26 (ii) Domestic consultant 57 105

3. Part D: Water management and drainage facilities (i) International consultant 0 0 (ii) Domestic consultant 16 76

4. TOTAL (i) International consultant 105 113 (ii) Domestic consultant 560 711

Sl. No.= Serial Number.

Sources: ADB. 2000. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Southwest Flood Damage Rehabilitation Project and on a Proposal to Use Loan Savings, Manila (Loan 1825-BAN[SF]); EA’s project completion reports for Part A, B, D, and E; and Project Completion Review Mission findings. Appendix 7 32

ASSESSMENT OF PROJECT IMPACTS AND BENEFITS

1. The socioeconomic analysis is based on a review of documents related to the Project, such as the report and recommendation of the President, and project completion reports of the different components, prepared by the executing agencies (EAs). Discussions were also held with EA officials. In addition, the project completion review mission made a field visit to appraise selected subprojects and, where possible, obtain the views of direct beneficiaries through informal discussions. The overall assessment was limited to post-project physical conditions and performance at the time of the field visit. The assessment, nevertheless, provides reasonable feedback on the project impacts, benefits, and effectiveness of the components in general.

2. The project completion review mission visited selected subprojects in seven districts: Jessore, Kushtia, Meherpur, Chuadanga, Satkhira, Jhenaidah, and Magura. Subprojects included national and regional roads, feeder roads, bridges/culverts, tube wells, railway embankment, railway station platform, riverbank protection, seed multiplication farm, and microcredit beneficiaries from a Palli Karma-Sahayak Foundation (PKSF) partner organization.

3. The benefits for each project component are discussed below: (i) Part A: National, regional and type-A feeder roads. Rehabilitation of flood- damaged roads, bridges, and culverts helped restore pre-flood conditions and allowed resumption of passenger and freight traffic movement. Dislocation of the road network had caused considerable economic loss to rural communities. The road subprojects, particularly feeder roads, restored market accessibility for local farmers. Transportation of perishable agricultural produce like vegetables and fish was made easier and cheaper for villagers using non-motorized modes such as rickshaw vans. Improved surface condition and riding quality of the roads from their flood-damaged condition led to savings in vehicle operating costs for motorized traffic and reduced the travel time between important centers on the network covered by these roads. Reconstruction/repair of bridges and culverts, which were washed away or severely damaged, saved local villagers from long detours, allowing them to benefit from reduced travel time and lower transport costs. Improved road condition resulted in social benefits in some cases, such as increased enrolment of women in schools and greater social interaction between communities. Construction activity during implementation generated employment for the local population. Incomes increased as a result of enhanced commercial activity along the improved roads, helping alleviate rural poverty. (ii) Part B1: roads, structures, and growth center markets. The benefits in this component are similar to those in Part A. The restoration of feeder roads, rural roads, and growth center markets brought the activities of the rural people, who had been isolated by floods, back to their normal level. Access to schools and health services was recovered, and marketing of perishable commodities made easy. The rehabilitated infrastructure also facilitated post-relief operations through quicker movement of food grains and other relief materials. Civil works for small earthworks were awarded to labor contracting societies, providing employment to local villagers, especially women. (iii) Part B2: Public health facilities. The floods severely damaged water supply and sanitation systems throughout the southwest region, particularly in Satkhira and Jessore. Ponds were contaminated, tube wells submerged and rendered 33 Appendix 7

unserviceable, latrine production centers inundated and severely damaged. It was necessary to rehabilitate the water supply and sanitation infrastructure as quickly as possible to prevent the spread of waterborne diseases. Construction of deep aquifers and installation of pump sets helped restore safe water supply. Resumption of production at sanitary latrine production centers helped the supply of sanitary latrines, which led to reduced incidence of waterborne diseases, thereby creating a healthy environment in the flood-affected areas. (iv) Part C: Railways. Train services in the flood-affected areas were disrupted due to the sudden onrush of floodwaters, which washed away the ballast and sleepers from the railway tracks, and heavily damaged the embankments. Flood damage rehabilitation for railways included civil works for repairs to embankments, tracks, bridges, essential buildings, passenger and loading- unloading platforms, signaling and telecommunication facilities, etc. The successful completion of civil works in the affected sections ensured restoration of disrupted train services. Track repairs resulted in a considerable increase in running speeds, while embankment repair will facilitate future flood protection. With road connectivity badly affected during floods, railways played a vital role in maintaining communications. (v) Part D: Water management and drainage facilities. Rehabilitation works for flood control embankments, sluice gates, water control structures and drainage canals, restored life in the flood-affected areas to pre-flood levels, and served as future disaster prevention measures. Some works, like riverbank protection, will stop further erosion of the bank and prevent the river course from shifting. (vi) Part E: Socioeconomic rehabilitation fund (SRF). The 2000 floods adversely affected the lives of all sections of people, but the worst victims were the rural landless and asset-less peasants. The flood washed away their houses, severely damaged the sanitation system, and destroyed their crop and livestock. More importantly, the income-generating activities of these people were suspended and working capital lost. The SRF was established with a view to mitigate these losses and improve people’s socioeconomic condition through fast and flexible microcredit services. Loan proceeds were disbursed by PKSF to its partner organizations, which extended microcredit to the beneficiaries. The PCR mission visited Chachra village in Jessore and met and discussed with the members of Swarno Mohila Samity, who had availed of microcredit services from Jagoroni Chakra Foundation, a PKSF partner organization. Unfortunately, the credit became available one year after the flood and could not be used immediately for emergency purposes. The borrowers, however, used the loan for income- generating activities. The beneficiaries, mostly women, used the soft loans for shelter reconstruction, installation of tube wells/latrines, purchase of seeds and emergency medicines, and recovery of other household losses. The SRF thus provided assistance not only for flood damage, but also for ameliorating poverty in the project area. (vii) Part F: Agriculture. Benefits from the reconstruction and repair of flood damaged structures, seed warehouses, irrigation channels, production sites and internal roads in the seed multiplication farms at Dattanagar (Jhenaidah district) and Meherpur were unprecedented. Farmers who had lost their standing crops in the flood were supplied with seeds, pesticides, etc. to enable cultivation in the coming cropping season. This also benefited the landless laborers who were dependent on agricultural employment during the harvesting season. Appendix 8 34

ECONOMIC EVALUATION OF ROAD COMPONENT

1. Restoration work for the project road component (Part A) started under 72 contract packages. Each package comprised a number of road sections with repair works being carried out along the full length or in part. Typically, the works included pothole repair, premix carpeting, and resealing with seal coat. There was no economic evaluation done at appraisal as the Project was of an emergency nature. However, it is desirable to conduct economic evaluation and estimate the economic internal rate of return (EIRR) to assess the effectiveness/efficiency of any investment. A post-construction evaluation was performed for two sample road sections: a national road and a regional road.

2. The selected national road section, Jessore-Benapole Road (N-706), was part of contract package no. SWFDRP/JE/NR/124 for part A (national, regional and type-A feeder roads), which included a number of other road sections. This road was selected for evaluation as it is an important border road carrying heavy commercial traffic between Bangladesh and India. The total length of the sections of the road improved under the flood project was 38 kilometers (km). The regional road section selected, Kushtia–Meherpur Road (R-745), was part of contract package no. SWFDRP/KU/R/1.25 This road connects with Meherpur, a tourist attraction of historic interest, and has commercial importance, as it is located in a zone of mango orchards.

3. Economic evaluation involved a comparison of “with” and “without” project situations to estimate benefits and calculate EIRR using discounted cost-benefit analysis. Reduction in vehicle operating costs is considered the main benefit of the road repair and restoration works. In the absence of any baseline data or any earlier economic evaluation, it was necessary to make reasonable assumptions for carrying out the analysis. These are discussed below.

A. Traffic Projections 4. Historic traffic data from the Roads and Highways Department (RHD) was analyzed to estimate traffic growth trends. Traffic volume and growth on the two roads vary considerably (Table A8.1). Table A8.1: Average Annual Daily Traffic and Past Traffic Growth Rates

Jessore-Benapole Road Kushtia-Meherpur Road Motorized Non- Total Motorized Non- Total Year Traffic Motorized Traffic Traffic Motorized Traffic Traffic Traffic 1997 2,381 3,165 5,546 1,068 2,215 3,283 1998 2,988 2,674 5,662 1,230 1,376 2,606 1999 3,056 3,702 6,758 — — — 2000 8,026 5,313 13,339 1,750 1,949 3,699 2001 6,729 4,253 10,982 1,820 2,908 4,728 2002 — — — 2,094 1,371 3,465 2004 3,482 4,143 7,625 — — — AAGR (%) 8.00 5.78 6.93 14.34 -0.34 6.35 — = not available

24 Contract implemented by RHD on the National Road from Jessore to Benapole (N-706), starting from chainage km 0+000 to Km 38+000. Contract value Tk132.21 million upon completion. Source: RHD Project Completion Report, Volume 1 of 2, December 2003, RHD, Bangladesh. 25 Contract implemented by RHD on Kushtia–Meherpur Regional Road (R-745) starting from chainage 0+000 to 28+000. Contract value Tk79.80 million upon completion. Source: RHD Project Completion Report, Volume 1 of 2, December 2003, RHD, Bangladesh. 35 Appendix 8

Source: Road Network Database, RHD website; and Project Completion Review Mission findings.

5. Projected traffic growth rates for the analysis are based on the current annual rates observed for each road, and assumed to gradually taper down in future years as much of the transport demand is expected to have been provided (Table A8.2). These growth rates are comparable with the long-term traffic growth rate recommended by RHD (7.8% per annum) and the growth rate of registered vehicles in Bangladesh over the last decade (7.5 % per annum).

Table A8.2: Projected Annual Traffic Growth Rates (%) Jessore – Kushtia – Period Benapole Road Meherpur Road

2001–2005 8 14 2005–2010 7 10 Beyond 2010 6 7 Source: Project Completion Review Mission findings.

6. The base year traffic considered in the analysis is the latest available traffic data for the project road sections (Table A8.3).

Table A8.3: Base Year Traffic (AADT) on Project Road Sections

Road Section Year Heavy Truck Medium Truck Small Truck Large Bus Mini Bus Micro Bus Utility Car Auto Rickshaw/ Motor Cycle Total Motorized Non- Total Motorized Total Traffic Jessore - 2004a 9 1,289 189 549 246 216 177 451 989 4,115 5,766 9,881 Benapole Kushtia - 2002b 42 379 275 200 182 170 140 127 579 2,094 1,371 3,465 Meherpur AADT = Average Annual Daily Traffic. a Traffic Survey for Road Condition Assessment Works of RHD Road Network, RHD, 2004. b Road Network Database, RHD website.

B. Vehicle Operating Costs 7. Unit vehicle operating costs (VOCs) for different categories of motorized vehicles and varying road roughness values are calculated routinely by the HDM-4 Circle of RHD. The unit VOCs for 2002 is the latest published data available. Table A8.4 presents sample VOC values for varying International Roughness Index (IRI) values. Appendix 8 36

Table A8.4: Economic Vehicle Operating Costs in Bangladesh by Vehicle Category (2002, Tk/km)

Heavy/ Small Large Utility/ IRI Medium Minibus Microbus Car Truck Bus Jeep Truck 2 10.82 7.94 10.00 5.79 6.09 7.22 5.23 3 10.91 7.98 10.10 5.84 6.12 7.28 5.26 4 11.37 8.24 10.79 6.14 6.35 7.67 5.46 10 14.00 11.39 15.13 8.05 8.32 11.04 7.29 IRI = International Roughness Index, Tk = taka.

Source: Roads and Highways Department. Road User Cost Annual Report, 2002–03, Bangladesh

8. The floods left the road surface in a highly distressed condition. IRI values in the flood- damaged condition (2001) were 6.0 IRI Jessore-Benapole Road and 9.0 IRI for Kushtia- Meherpur Road26. These were assumed to be the roughness values in the “without project” condition. If flood damage restoration works had not been undertaken, the road surface in the “without project” condition would have deteriorated rapidly with growth in traffic. Annual roughness progression in the “without project” situation was thus assumed to be 0.9 IRI. The maximum roughness value attainable by the road was fixed at 10 IRI. Flood damage restoration works, mainly pothole repair and seal coat, were meant to provide immediate relief and were not envisaged as improvement works. Thus, roughness in the “with project” condition was assumed to drop to only 4.5 IRI, with subsequent roughness progression of 0.45. Based on these assumptions, the benefits of road restoration works, in terms of VOC savings, were calculated.

C. Construction and Maintenance Costs

9. Actual construction costs, as indicated by the final contract values in RHD’s project completion report, were used in the analysis. The contract value of the SWFDRP/JE/NR/1 package27, including variation, amounted to Tk132.21 million upon completion (December 2003). This translated to a unit rate of Tk2.59 million per km, considering the total length of roads in the package (51 km). The construction cost for Jessore–Benapole Road (38 km), estimated from this unit rate, was Tk98.51 million. The cost of Kushtia–Meherpur Road (28 km) was Tk79.80 million. Construction in most cases was completed within 1.5 years (2002–2003). The financial costs were converted to economic costs using a standard conversion factor of 0.9. All costs have been brought to the 2004 level using an average annual inflation rate of 6%. In the “with project” case, only regular annual maintenance has been considered. The cost of routine maintenance (Tk63,600 per km) is based on RHD’s current road maintenance strategy.

D. Economic Evaluation

10. Since the flood-damage restoration works comprised mainly repair and seal coat, the benefit period was taken as 3 years. This is assumed to be the useful economic life of such works, as another intervention in the form of periodic maintenance or overlay would be due after 3–4 years of such treatment. The cost-benefit stream and EIRR for the project road sections are in Table A8.5. The EIRR values of 47.76% and 25.59% indicate that the economic performance of both cases is highly satisfactory, so it may be concluded that the investment was efficient.

26 Source: RHD’s Road Network Database, RHD website. 27 Contract implemented by RHD on the National Road from Jessore to Benapole (N-706), starting from chainage km 0+000 to km 38+000. Contract value Tk132.21 million upon completion. Source: RHD Project Completion Report, Volume 1 of 2, December 2003, RHD, Bangladesh. 37 Appendix 8

Table A8.5: Cost and Benefit Streams for Project Road Sections (Tk million) Total Capital Maintenance VOC Year Cost Net Benefit Cost Cost Savings

A. Jessore–Benapole Road (N-706) 2002 49.81 49.81 (49.81) 2003 46.99 46.99 (46.99) 2004 2.27 2.27 75.96 73.69 2005 2.27 2.27 91.89 89.63 2006 2.27 2.27 97.95 95.69 EIRR 47.76% B. Kushtia–Meherpur Road (R-745) 2002 40.35 40.35 (40.35) 2003 38.07 38.07 (38.07) 2004 1.67 1.67 46.08 44.41 2005 1.67 1.67 48.41 46.74 2006 1.67 1.67 48.72 47.05 EIRR 25.59% EIRR = economic internal rate of return, VOC = Vehicle Operation Cost.

Source: Project Completion Review Mission findings.