Second City Region Development Project (RRP BAN 49329)

SUMMARY OF THE FIRST CITY REGION DEVELOPMENT PROJECT

I. BACKGROUND

1. Project Approval, Signing and Effectiveness. The first City Region Development Project (CRDP or the project) with an Asian Development Bank (ADB) loan amount of SDR76.89 million ($120.0 million equivalent) was approved on 10 November 2010, signed on 10 August 2011, and became effective on 23 September 2011. The project was co-financed by the German Financial Cooperation through KfW with a grant of EUR 10.5 million ($12.6 million equivalent) allocated for climate change adapted urban development in Khulna city. The financing agreement between the Economic Relations Division of the government and KfW was signed on 22 March 2012. The project was also co-financed by the Swedish International Development Authority (SIDA) with a grant of SEK 90.0 million ($13.0 million equivalent) administered by ADB for urban center infrastructure and governance improvement. The administrative agreement between ADB and SIDA was signed on 5 December 2012. The project was extended twice for a total period of one and a half years and closed on 31 December 2018.

2. Impact and Outcome. The impact of the project is enhanced growth potential and environmental sustainability of the two city regions. A city region is defined as an agglomeration of a large metropolitan city (city corporation), municipalities (pourashavas) clustered nearby and adjacent peri-urban areas (urban centers). The target city regions of the project, Dhaka and Khulna city region, comprise 5 city corporations, 12 pourashavas and 36 urban centers. The outcome is improved urban environment and infrastructure services based on effective regional and urban planning.

3. Project Outputs and Activities. The project was designed to produce 3 outputs: (i) enhanced capacity of urban infrastructure, (ii) improved urban planning, and (iii) strengthened municipal management and capacity. Activities under output 1 included infrastructure improvement for water supply and sanitation, solid waste management, urban transportation, and drainage system, to stimulate economic activities in the two selected city regions. Activities under output 2 included review and update of the Dhaka Metropolitan Development Plan and capacity building support to the project city corporations and pourashavas for urban planning. Activities under output 3 supported city corporations, pourashavas, and urban centers to improve tax collection, infrastructure maintenance and public participation (including women and vulnerable groups) in the development activities.

4. Cost Estimates. The project was initially estimated to cost $170 million, as shown in Table 1. Co-financing from KfW (parallel) and SIDA were later added to the project.

Table 1: Project Investment Plan ($ million) Original Revised Amount including co-financing Item Amount ADB KfW SIDA GOB Total (ADB + GOB) A. Base Cost 1 Civil Works 93.49 78.76 11.60 10.40 38.36 139.12 2 Equipment & Vehicles 28.97 15.33 - 0.70 4.19 20.22 3 Consultants 16.34 10.20 1.03 1.20 3.92 16.35 Land Acquisition & 4 5.64 - - - 0.16 0.16 Resettlement 5 Recurrent Cost 5.51 1.80 - - 3.37 5.17 Sub-total (A) 149.95 106.09 12.63 12.30 50.00 181.02 2

Original Revised Amount including co-financing Item Amount ADB KfW SIDA GOB Total (ADB + GOB) B. Contingencies 17.03 - - 0.70 - 0.70 C. Interest Charges during 3.03 3.00 - - - 3.00 Implementation Total (A+B+C+D) 170.00 109.09 12.63 3.00 50.00 184.72 ADB = Asian Development Bank, GOB = Government of Bangladesh, SIDA = Swedish International Development Authority Source: ADB.

5. Financing Plan. ADB financed SDR76.89 million (approximately $120 million equivalent) or 70.59% and the government provided $50 million (29.42%). Co-financing from KfW with a grant of EUR 10.5 million ($12.63 million) and SIDA with a grant of SEK 90.0 million ($13.0 million) was later added to the project financing. The financing plan for the project is given in Table 2.

Table 2: Financing Plan Original (ADB + GOB) Revised Amount including co-financing Amount Share of Total Amount Share of Total

($ million) (%) ($ million) (%) ADB 120.00 70.59 109.09 59.06 GOB 50.00 29.41 50.00 27.07 KfW - - 12.63 6.84 SIDA - - 13.00 7.04 Total 170.00 100.00 184.72 100.00 ADB = Asian Development Bank, GOB = Government of Bangladesh, SIDA = Swedish International Development Authority Source: ADB.

6. Implementation Period. The project was planned for 6 years and original loan closing was June 2017. The loan has been extended twice up to 31 December 2018.

7. Project Management. The Local Government Engineering Department (LGED) under Local Government Division (LGD) of the Ministry of Local Government, Rural Development and Cooperatives was the executing agency. City Corporations and pourashavas were the implementing agencies.

II. ACHIEVEMENTS

A. Outcome and Outputs Targets

8. Outcome: Improved urban environment and infrastructure services based on effective regional and urban planning. 10,320 households have been provided with improved water supply and the operation of waste management facility at Jessore has commenced. The Dhaka Structure Plan (2016–2035) has been finalized and the project pourashavas are complying with the key Urban Governance Improvement Action Plan (UGIAP) targets. Achievement of other outcome targets related to reduction of travel time, traffic accidents, and water logging and improvement of energy efficiency are being assessed and findings will be reported in the executing agencies’ project completion report to be submitted by 31 March 2019.

9. Outputs. Achievement of output targets is given in Table 3.

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Table 3: Achievement of Output Targets

Design Summary Performance Targets / Indicators Progress as of 31 December 2018 Output

1. Enhanced For all output indicators: (Targets are capacity of urban total or average of the target areas by infrastructure 2018, unless otherwise noted.)

Water Supply Additional production capacity Additional production capacity (40 MLD) (39.50 MLD)

Length of new pipe network built Length of new pipe network built (127 km) (127 km)

Length of existing pipe network Length of existing pipe network rehabilitated (3.5 km) rehabilitated (3.5 km)

Women’s representation in WATSAN Complied committees (30%)

Sanitation Number of new public toilet facilities Number of new public toilet facilities with fecal sludge management facilities with containment (7) (7)

Number of renovated public toilets with Number of renovated public toilets fecal sludge management facilities (8) with containment (8)

Solid Waste Management 1 No. solid waste management facility Solid waste management facility established established at Jessore pourashava

Urban Transport Length of roads upgraded (258 km) Length of roads upgraded (255 km)

Number of towns or areas with Banani area in Dhaka with improved improved traffic management (1) road and traffic management

Drainage Length of drains improvement Length of drains improved (215 km) (210 km)

Length of re-excavation of river/canal Length of re-excavation of river/canal (19 km) (25 km)

Energy Efficiency Program Energy-efficient pumps installed Energy-efficient pumps installed 4

Design Summary Performance Targets / Indicators Progress as of 31 December 2018 (6 pumps) (6 pumps)

Energy-efficient and/or solar-powered Energy-efficient and/or solar- lights installed (3000) powered lights installed (3063)

2. Improved urban DMDP (1995-2015) reviewed and Updated and finalized in 2016 as planning updated by 2014 Dhaka Structure Plan (2016 – 2035)

Consultation meetings for DMDP with at least 30% participation by women Complied.

Number of urban planners posted in Category A pourashava of the project Urban Planners posted in 6 by 2018 (8) pourashavas

Urban planners trained from the project by 2014 a. 3. Strengthened b. Capacity development programs 2 workshops have been carried out municipal carried out in all municipalities with 30% for capacity development of the management and of women trainees officials and staff of the project capacity c. pourashavas with 30% participation of women trainees. Apart from these, regular on-job training programs are held at the field levels. d. e. All municipalities achieving annual 5% Complied. Measured after completion improvement of property tax collection of financial year.

f. All municipalities achieving regular Complied citizen committee meetings with at least 30% participation by women

g. Capacity of peri-urban management Concept plans and institutional enhanced. framework of the project’s urban centers improvement have been prepared. DMDP = Dhaka Metropolitan Development Plan, km = kilometres, MLD = megalitres per day, WATSAN = water and sanitation. Source: CRDP Quarterly Progress Report Q4 2018.

10. Contract Award and Disbursement Status. Cumulative contract award and disbursement are $105.4 million and $ 103.5.3 million, against the ADB loan amount of $109.5 million. Around $4 million remain unused and project account closing is ongoing as per February 2019.

11. Equipment and Goods Contracts. The project had nine goods packages including six international competitive bidding packages to procure waste management equipment. The waste management equipment under the six contracts have delivered and payment was completed in December 2018. Procurement is complete for the remaining three packages.

12. Civil Works Contracts. The project has 92 works contracts financed by ADB. Works are completed, and contracts are closed. 5

13. Regional Development Planning Consultants. Consultants engaged to support Rajdhani Unnayan Katripakkha (Dhaka City Development Authority, RAJUK) finalized the Dhaka Structure Plan which has been disclosed on RAJUK’s website. The government revised the Strategic Transport Plan for Dhaka based on the outputs of the Dhaka Structural Plan.

14. Management, Design, and Supervision Consultants. The management, design, and supervision consultants provided project management, subproject design, procurement and construction supervision support to the project management and coordination unit (PMCU) established under the executing agency. The consultants were engaged from July 2012 to December 2016. After that, project design and supervision consultants recruited under project design advance (PDA) for the Second CRDP, also supported the first CRDP.

15. Municipal Capacity Development Consultants. Consultants were engaged during the period spanning July 2012 to April 2015. The municipal capacity development (MCD) consultants supported the strengthening of municipal management and capacity and implementation of the UGIAP. The objective was to improve governance, accountability, strengthen their financial base, and ensure participation of citizens, including women and the poor. The MCD consultants prepared 12 reports, guidelines, and manuals related to capacity building of the pourashavas; provided training to 380 officials of local government and planning bodies; and assisted PMCU in developing parameters for subproject selection. The consultants also developed integrated urban plans (involving climate resilience, local governance improvement, gender equality and poverty reduction) for the 5 SIDA financed urban centers and an institutional framework in consultation with local stakeholders.

16. Social Safeguards Compliance. The project is category B for involuntary resettlement and category C for impacts on indigenous people according to ADB Safeguard Policy Statement (2009). Although five subproject level resettlement plans were prepared and disclosed to ADB website during processing, only one resettlement plan was finally implemented for the integrated traffic management subproject at Banani, Dhaka. Involuntary resettlement impacts for the remaining subprojects have been avoided through alternative design considerations and alternative site selections.

17. Environmental Safeguards Compliance. The project is category B for environmental safeguards and an environmental assessment and review framework was prepared to guide the selection, categorization, environmental assessment and impact mitigation of the interventions. The executing agency prepared initial environmental examinations and environmental management plans for all subprojects.

18. Gender and Social Development. The project is classified by ADB as effective gender mainstreaming with the objective of reducing gender inequality by ensuring women’s effective participation in pourashava management, consultation for urban planning, training activities and awareness raising programs, and ensure equal wage for male and female labors for the equal volume of works. Achievement of the project’s gender action plan’s targets is satisfactory.

19. Audit. The Foreign Aided Projects Audit Directorate conducted annual audit for financial years 2013 up to 2018 and reports were submitted to LGED and ADB up to FY2017/ 2018. As of February 2019, there are 12 outstanding audit observations and the executing agency is expected to resolve them by 31 March 2019.

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20. Compliance with Loan Covenants. Among the 28 covenants, all have been complied with. In order to comply with one of the covenants, a subsidiary loan agreement was signed between Gazipur City Corporation and Ministry of Finance for the water supply subproject in December 2018.

21. Cofinancing with SIDA. The SIDA financing is used to improve the connectivity and overall environment of 5 urban centers. With SIDA financing nine civil works contracts were awarded by July 2016. All works were completed by December 2018.

22. Cofinancing with KfW. The LGED completed all the works under KfW component, and it was closed in December 2017. KfW has conducted the final mission in March 2018. Under KfW financing 11 contracts were completed.

III. LESSON LEARNED

23. The first CRDP has achieved significant local infrastructure improvements in a range of city corporations, pourashavas, and urban centres surrounding in Dhaka and Khulna city region. The subprojects were focused predominantly on road improvements, drainage within markets and surrounding areas, and a range of environmental improvements components involving water supply, sanitation, and waste management subprojects. Some important lessons from the first CRDP are: (i) Consultation and support of community. There was significant community consultation throughout the preparation and design phase of the subprojects which provided an essential input to the final design and implementation. This was essential to ensure community ownership and sustainability of the improved infrastructure. The top-down approach was replaced with a more consensus building bottom up approach. (ii) Understanding the characteristics of urban areas. All team members (planners, engineers, consultation experts, environmentalist etc.) regularly visited the project settlements to gain full understanding of the issues and opportunities and determine where infrastructure improvements will be most beneficial. (iii) Quality topographical survey. Quality digital topographical surveys was undertaken at the end of the feasibility study and prior to detailed design. This ensured reliable engineering design minimizing confusion and potential disputes during the construction stage. (iv) Size of subprojects. Many selected subprojects while satisfying the requirements of the local community, were too small to solve municipality-wide challenges and improve the infrastructure of a wider area and for a bigger community. More comprehensive municipality- or city region-wide interventions are more likely to have significant impacts than a series of small-scale infrastructure improvements. Any subsequent project to the first CRDP therefore should consider opportunities to provide larger scale and more dominant infrastructure subprojects. (v) Procurement. The construction in Bangladesh is characterized by many small contractors with limited resources and constrained with the number of contracts they can undertake at any specific time. It is essential during procurement and contract award to scrutinize if a bidder has the necessary resources to undertake multiple contracts without causing implementation delays. During the life of the project the government progressed with electronic procurement. This system was introduced to avoid instances of human interference particularly in the tender submission process, resulting in bona fide tenderers being prevented from submitting their tender by actual or the threat of physical violence. Electronic tendering is intended to preclude such practices. 7

(vi) Long term support for management and maintenance of infrastructure. The effective long term maintenance and management of all completed infrastructure subprojects is of high importance. Poor maintenance of public facilities is particularly acute in the rapidly growing urban areas.The project facilitated the involvement of local government institutions in future maintenance and management of the completed infrastructure. Although there has been some improved awareness within the local institutions, it is unlikely that there will be a significant improvement in infrastructure maintenance and management at local level. In any future programs it will be essential that management and maintenance activities and their responsibilities are clearly defined and become a priority in the program preparation. (vii) Important role of Executive Engineers. The LGED’s executive engineers played an important role in infrastructure development outside city corporations and pourashavas. Their local knowledge and general expertise should be utilized during the planning, design and implementation stages of any urban project. They are also able to act as a local representative of LGED and can provide an valuable channel to local institutions and the local community. Their support is essential throughout the project design and implementation.

IV. PROJECT INNOVATIONS

24. The project introduced several innovations. These include technical and design innovations and the use of climate resilient construction materials. One of the guiding principles of the project has been the inclusion of green infrastructure and spaces where possible with the following benefits: (i) improved the environment and reduced the carbon footprint, (ii) newly created green areas for relaxation and physical exercise, and (iii) improved surface water drainage and flood control. The soft surfaced areas encourage percolation of rainwater into the ground, reducing water logging and adding to the recharge of the water table.

25. Use of Uni-blocks. Uni-block (paving bricks) have been used for construction of lightly trafficked roads and walkways. This material consists of approximately brick sized blocks, which are shaped to fit closely together when laid horizontally. These blocks have a number of advantages over other surfacing materials: (i) The blocks are made in the factory using mechanical pressure rather than traditional bricks which are burnt in a kiln requiring fossil fuel to bake them which adds significantly to carbon dioxide emissions to environment. (ii) The blocks are laid on a bed of sand and are not jointed, no mortar being used between the vertical joints of adjacent blocks. Therefore the space between the blocks and the soft layer underneath allow for rainwater to drain between the blocks and enter the sub-soil, allowing increased aquifer re-charge and reducing the incidence of water logging. (iii) Uni-blocks are being offered in a variety of colours and patterns. When laid they provide a pleasing surface finish and alternative to the use of cement concrete or asphaltic concrete surfacing material for pedestrian walkways and lightly trafficked roads.

26. Regional Integrated Landfill with Resource Recovery Facility at Jessore. The facility is designed to treat waste from Jessore and Jikorgacha pourashava. The primary objectives of the landfill including a resource recovery facility are (i) to provide effective control measures to prevent (or reduce as far as possible) negative effects on the environment, in particular the pollution of surface water, groundwater, soil and air, as well as the resulting risks to human health 8 arising from land filling of waste; and (ii) to enhance sustainability and promote the 3R concept to reduce, reuse and recycle waste. The design considered the diversion and conversion of bulk part of the waste into resources (compost, biogas, energy, inorganic waste recycling).

27. Dhaka Structure Plan (2016–2035). Under the project the Dhaka Metropolitan Development Plan (1995–2015) was reviewed and updated as strategic plan for the city region. The Dhaka Structure Plan considers the spatial planning, current situation and future vision for the city regions and provides development direction for the next 20 years (2016–2035) and is a policy document that sets the ground as guideline for subsequent local-level plans.