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Urban Sector and Water Supply and Sanitation in Bangladesh: an Exploratory Evaluation of the Programs of Adb and Other Aid Agencies

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Urban Sector and Water Supply and Sanitation in Bangladesh: an Exploratory Evaluation of the Programs of Adb and Other Aid Agencies ASIAN DEVELOPMENT BANK Independent Evaluation Department SECTOR ASSISTANCE PROGRAM EVALUATION FOR THE URBAN SECTOR AND WATER SUPPLY AND SANITATION IN BANGLADESH: AN EXPLORATORY EVALUATION OF THE PROGRAMS OF ADB AND OTHER AID AGENCIES In this electronic file, the report is followed by Management’s response, and the Board of Directors’ Development Effectiveness Committee (DEC) Chair’s summary of a discussion of the report by DEC. Evaluation Study Reference Number: SAP: BAN 2009-02 Sector Assistance Program Evaluation July 2009 Urban Sector and Water Supply and Sanitation in Bangladesh An Exploratory Evaluation of the Programs of ADB and Other Aid Agencies Independent Evaluation Department CURRENCY EQUIVALENTS (in averages by fiscal year [July to June]) Currency Unit – Taka (Tk) average 2000–2001 2001–2002 2002–2003 2003–2004 2004–2005 2005–2006 2006–2007 2007–2008 Tk 1.00 = $0.0185 $0.0174 $0.0173 $0.0169 $0.0163 $0.0149 $0.0145 $0.0145 $ 1.00 = Tk53.93 Tk57.45 Tk57.90 Tk59.01 Tk61.39 Tk67.08 Tk68.87 Tk68.80 ABBREVIATIONS ADB – Asian Development Bank ADP – annual development program BMDF – Bangladesh Municipal Development Fund BRM – Bangladesh Resident Mission DANIDA – Danish Agency for International Development Aid DFID – Department for International Development DPHE – Department of Public Health Engineering EA – executing agency FY – fiscal year HYSAWA – Hygiene, Sanitation and Water Services IED – Independent Evaluation Department IEG – Independent Evaluation Group IMED – Implementation Monitoring and Evaluation Division IUDP – Integrated Urban Development Project JBIC – Japan Bank for International Cooperation JICA – Japan International Cooperation Agency LCG – Local Consultative Group LGD – local government division LGED – Local Government Engineering Department MDG – Millennium Development Goal MSP – Municipal Services Project NGO – nongovernment organization O&M – operation and maintenance PBA – performance-based allocation PCR – project completion report PIU – project implementation unit PRSP – poverty reduction strategy paper PSU – policy support unit RAJUK – Rajdhani Unnayon Kartripakhya (Capital Development Authority) SDP – sector development program STIFP – Secondary Towns Infrastructure Flood Protection Project SWAp – sectorwide approach TA – technical assistance UDD – Urban Development Department UGIIP – Urban Governance and Infrastructure Improvement Sector Project UNDP – United Nations Development Programme UPPR – Urban Partnerships for Poverty Reduction USAID – United States Agency for International Development WASA – Water and Sewerage Authority WSS – water supply and sanitation NOTE In this report, "$" refers to US dollars. Key Words adb, asian development bank, bangladesh, department for international development, dfid, flood protection, ied, independent evaluation department, integrated urban development project, japan bank for international cooperation, japan international cooperation agency, jbic, jica, oed, sanitation, social housing, urban transport, water supply, world bank, wss evaluation Director General H. Satish Rao, Independent Evaluation Department (IED) Director R. Adhikari, Independent Evaluation Division 1, IED Team leader W. Kolkma, Senior Evaluation Specialist, Independent Evaluation Division 1, IED (until 5 January 2009) Team members A. Anabo, Senior Evaluation Officer, Independent Evaluation Division 1, IED V. Melo, Operations Evaluation Assistant, Independent Evaluation Division 1, IED Independent Evaluation Department, SE-15 In preparing any evaluation report, or by making any designation of or reference to a particular territory or geographic area in this document, the Independent Evaluation Department does not intend to make any judgments as to the legal or other status of any territory or area. CONTENTS Page EXECUTIVE SUMMARY i MAPS I. INTRODUCTION 1 A. Purpose of the Evaluation 1 B. Scope 2 C. Limitations 2 D. Organization of the Report 3 II. URBAN SECTOR AND WATER SUPPLY AND SANITATION IN BANGLADESH 4 A. Context 4 B. The State of Urban Development 5 C. The State of Water Supply and Sanitation 6 D. Government Institutions and Policy in the Urban Sector 7 E. Government Institutions and Policy in Water Supply and Sanitation 9 III. INVESTMENT IN THE URBAN SECTOR AND IN WATER SUPPLY AND SANITATION 10 A. Government and External Investments in the Urban Sector 10 B. Government and External Investments in Water Supply and Sanitation 11 C. Externally Supported Projects Ongoing in 2001–2008 12 D. Government-Sponsored Projects Ongoing in 2007–2008 13 IV. COVERAGE AND PERFORMANCE OF THE PROGRAMS OF AID AGENCIES 15 A. Integrated Urban Development Projects 16 B. Urban Water Supply 18 C. Rural Water Supply 19 D. Flood Protection in Urban Areas and Emergency Damage Rehabilitation 20 E. Urban Drainage 21 F. Sanitation 21 G. Solid Waste Management 22 H. Urban Transport 22 I. Urban Housing 23 J. Urban Poverty Reduction 24 K. Capacity Development 24 L. Policy and Institutional Reform 26 M. Conclusion 27 V. PERFORMANCE IN TERMS OF HARMONIZATION AND ALIGNMENT 27 A. Aid Harmonization 27 B. Alignment with Government Systems 29 VI. ASSESSMENT OF PERFORMANCE 35 A. Bottom-Up Assessment 36 B. Top-Down Assessment 41 C. Overall Assessment 43 VII. CONCLUSIONS, LESSONS, AND RECOMMENDATIONS 44 A. Conclusions and Lessons 44 B. Recommendations for the Aid Community 46 C. Recommendations for ADB’s Operations Department 50 APPENDIXES 1. Comparison of Urban and Rural Development in Bangladesh 51 2. Survey Results of Questionnaire for Project Directors, 2008 54 3. Projects and TAs for the Urban Sector and Water Supply and Sanitation 64 4. Bangladesh Annual Development Program 2007–2008; All Foreign Assisted Projects in the Physical and Housing Sector 73 5. Detailed Assessment of External Assistance to the Two Sectors 75 6. Financial Accountability and Sustainability of Urban Governance Improvement Action Plans (UGIAPS) 117 7. Comments on Draft by Local Government Engineering Department 128 Attachment: Management Response DEC Chair Summary The guidelines adopted by the Independent Evaluation Department (IED) for avoiding conflict of interest in its independent evaluations were observed in the preparation of this report. Alex Jorgensen was the consultant on thematic aspects of the evaluation. Mujibur Rahman was the consultant on water supply and sanitation. Sarwar Jahan was the consultant on the urban sector. Mary Grace Alindogan did background research and administered a questionnaire survey. Mr. Rahman had prior involvement in government committees regarding the water supply and sanitation sector. Mr. Jahan was team leader of an ADB-funded TA on urban sector policy. IED holds that the potential conflicts of interest have been adequately managed. The team leader of the study and his director had no prior involvement in operations in Bangladesh. EXECUTIVE SUMMARY Bangladesh, a patchwork of villages regularly interspersed with towns (see Map 1), has a population of 159 million, the seventh largest in the world. The urban landscape is dominated by the megacity of Dhaka and the major city and port of Chittagong. All other towns in this densely populated country are below one million, although some will be passing that population soon. The Government of Bangladesh (the Government) has had limited resources to help the development of the many villages making the transition into small towns serving the surrounding agricultural areas as service centers and markets. Infrastructure investments are not keeping pace with the growth of the urban population, and the Government lacks funds and arrangements for operation and maintenance of facilities and services. There are now over 300 secondary towns (pourashavas) with populations of 15,000–500,000, and the number is growing. With their local governments languishing due to lack of budgets and decision-making powers, the economic conditions are not very buoyant and, in many cases, the environmental and social conditions are poor. Due to lack of planned growth, makeshift settlements lacking basic services have come up around many of the towns. For instance, only 100 or so secondary towns have a piped water supply network, usually covering only a small part of the town; the water is available at most a few hours per day and needs to be boiled for consumption. Lack of drainage infrastructure is a major problem, leading to long periods of waterlogging and putrid conditions. The floods and cyclones of the past years have also damaged many towns and cost human lives, and have exacerbated the unhygienic conditions caused by the total absence of sewerage systems and only partial coverage of household septic tanks. Government investments have been similarly lacking in Dhaka and Chittagong. Dhaka is a major growth center but is increasingly constrained by thousands of slum areas, traffic congestion, power outages, water shortages, accumulating garbage, and severely polluted rivers surrounding it due to indiscriminate dumping of industrial and residential waste. Conditions in Chittagong are the same, though on a smaller scale. International and bilateral organizations have supported a number of projects for the urban sector in Bangladesh; more projects have been dedicated to the far more populous rural sector—the latter was about 80% of the total population in 2000. Before this time, the World Bank focused its urban assistance on Dhaka and Chittagong, while the Asian Development Bank (ADB) catered more to a small selection of larger secondary towns, though it also financed one integrated
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