Document of The World Bank
FILE COPY FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. P-2100-BD
REPORT AND RECOMMENDATION
OF THE PRESIDENT
TO THE Public Disclosure Authorized EXECUTIVE DIRECTORS
ON
PROPOSED CREDITS
TO THE
PEOPLE'S REPUBLIC OF BANGLADESH
FOR THE
Public Disclosure Authorized MUHURI IRRIGATION PROJECT
June 2, 1977 Public Disclosure Authorized
This document has a restricted distribution and may be used by recipients only In the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS
The value of the Bangladesh Taka (Tk.) is officially set relative to the Pound Sterling. From May 17, 1975 through April 25, 1976, the official value was 30.0 to the Pound Sterling. Since the latter date the value has been changed on three occasions, the most recent being on November 3, 1976, when it was set at 25.45 to the Pound Sterling. The Pound is floating relative to the U.S. dollar and consequently the Taka-U.S. dollar rate is subject to change. The exchange rate used in preparing the data for this report is Tk. 15 = U.S.$1 (except where stated to the contrary).
WEIGHTS AND MEASURES EQUIVALENT
1 acre = 0.405 hectare (ha) 1 mile = 1.609 kilometers 1 sq. mile = 640 acres = 259 ha 1 foot = 30.5 centimeters 1 maund (md) = 82.3 lbs. = 37.3 kg 1 long ton = 1.016 metric tons = 27.2 md 1 cu. ft. per second 0.028 m3 /second
PRINCIPAL ABBREVIATIONS USED
BADC = Bangladesh Agricultural Development Corporation BWDB = Bangladesh Water Development Board CEC = Central Evaluation Committee HYV = High Yielding Varieties (of rice) IRDP = Integrated Rural Development Program PIC = Project Implementation Committee TCCA = Thana Central Cooperatives Association TTDC = Thana Training and Development Center
GLOSSARY
Aman - Rice planted before or during monson and harvested in November or December. Aus - Rice planted during March and April and harvested during July and August. Boro - Rice planted in winter and harvested during the period April to June. Thana - Smallest administrative unit of Bangladesh Government of which there are 413. Six or seven thanas form a district, and there are 19 districts in the country.
FISCAL YEAR
Ends June 30 FOR OFFICIAL USE ONLY
BANGLADESH
MUHURI IRRIGATION PROJECT
Credit and Project Summary
Borrower: People's Republic of Bangladesh
Amount: (a) IDA Credit of US$21 million (b) IDA Administered Credit of Can$9.0 million, US$8.6 million equivalent
Terms: (a) Standard IDA terms (b) Standard IDA terms
Project Description: The project includes:
(a) construction of about 5 miles of coastal earthfill embankments and a dam of about 1.5 miles across the Feni River Channel;
(b) Construction of a reinforced-concrete regulator structure equipped with radial gates, and flap gates;
(c) construction of one major and 30 minor drainage structures equipped with flap gates, and the improvement of an existing drainage outlet;
(d) improvement of 110 miles of natural channels and the excavation of 6 miles of new channels;
(e) improvement of 9 miles of existing roads and the construction of 9 miles of new roads for access to the main project works;
(f) installation of about 1,100 low-lift pumps to raise water from the channels to adjacent farmlands;
(g) provision of workshops, equipment, and vehicles for maintenance of civil works and pumps;
(h) construction of offices and housing for project staff;
This document has a restricted distribution and may be used by recipients only in the performance of their omcial duties. Its contents may not otherwise be disclosed without World Bank authorization. - ii -
(i) transportation (field vehicles, motorcycles and bicycles), and agricultural equipment (hand sprayers) grain dryers) to facilitate agricultural extension, supporting services; and
(j) consultant services to assist the Government in project planning, design, supervision of con- struction, and evaluation of the impact of the project.
Estimated Cost: US$52.0 million equivalent of which US$18.4 million is expected to be in foreign exchange and US$33.6 million in local currency.
Local Foreign Total /a (US$ million)
Land Acquisition 0.50 - 0.50 Civil Works Regulator and related works 13.13 7.87 21.00 Cross Darn and Embankments 3.71 1.74 5.45 Channels and Control Structures 2.07 0.29 2.36 0 + N Facilities 0.20 0.07 0.27 Sub-Total 19.61 9.97 29.58
Vehicles and Agric. Equipment 0.22 0.18 0.40 Low-Lift Pumps 0.87 1.33 2.20 0 + M Facilities 0.04 0.09 0.13 Sub-total 1.13 1.61 2.73
Consulting Services 2.00 1.67 3.67 Management and Administration 1.56 - 1.56 Base Cost Estimate 24.29 13.25 37.54
Contingencies Physical 2.70 1.53 4.23 Price 6.60 3.63 10.23 Sub-Total 9.30 5.16 14.46
TOTAL 33.60 /b 18.40 52.0 /b
/a Discrepancies in currency conversion due to rounding. /b Includes US$9.8 million equivalent taxes and duty. Estimated Disbursements:
US$ (million) Annual Cumulative
Fiscal Year IDA IDA Administered Total IDA IDA Administered Total
1978 1.42 0.58 2.00 1.42 0.58 2.00 1979 3.55 1.45 5.00 4.97 2.03 7.00 1980 4.96 2.04 7.00 9.93 4.07 14.00 1981 5.32 2.18 7.50 15.25 6.25 21.50 1982 4.25 1.75 6.00 19.50 8.00 27.50 1983 1.50 0.60 2.10 21.00 8.60 29.60
Procurement: (a) Vehicles, equipment and materials would be procured after international competitive bidding. A 15% preference margin, or prevailing customs duty if lower, would be extended to local manufacturers in evaluation of bids. Procurement of off-the-shelf items costing less than US$10,000 each whose aggre- gate would not exceed US$200,000, would be through normal Government procurement procedures which are acceptable.
(b) Bids for the major civil works contract for construc- tion of the main gated regulator have been obtained after international competitive bidding in accordance with Bank-Group Guidelines.
(c) Other civil works, (channel excavation, drainage structures, embankments) which are relatively small, would be awarded on the basis of competitive bidding advertised locally and in accordance with local pro- cedures acceptable to IDA.
Consultants: Consultants would be retained to advise and assist with the preparation of work programs, designs, and contract documents, and the supervision of construction. About 600 man-months of consultant services would be provided about 250 of which would be expatriate.
Rate of Return: 16 percent
Appraisal Report: Report No. 725-a-BD dated May 31, 1977.
South Asia Region
Map: IBRD Map No. 11532
INTERNATIONAL DEVELOPMENT ASSOCIATION
REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON PROPOSED CREDITS TO THE PEOPLE'S REPUBLIC OF BANGLADESH FOR THE MUHURI IRRIGATION PROJECT
1. I submit the following report and recommendation on two proposed credits to the People's Republic of Bangladesh totalling the equivalent of US$29.6 million on standard IDA terms to help finance an irrigation de- velopment project around the confluence of the Muhuri and Feni Rivers in Southeastern Bangladesh. One credit of US$21.0 million would be made from IDA resources; a second credit of Can$9.0 million (US$8.6 million equivalent) would be made from Canadian funds administered by IDA in accordance with the terms of the recently approved Agreement between the Government of Canada and the Association.
PART I - THE ECONOMY
2. An Economic Mission was in the field in November 1976 and its report entitled "Bangladesh: Current Economic Performance and Development Policy Issues" (Report No. 1469-BD, dated May 19, 1977) was distributed on May 23, 1977.
Introduction
3. The Basic Economic Report described the obstacles to development in Bangladesh and outlined a course of action to maximize the development of the country's resources. The high ratio of population to natural re- sources, the slow development of the productive and infrastructural base and the weaknesses of the administrative and institutional framework led the Report to project a growth rate of GDP of between 2% and 3.5% per year in real terms over the five years 1973-78, the variations within that range depending on the appropriateness of the policy framework and on levels of aid.
4. Encouraging progress was made in the period immediately following Bangladesh's independence as an enthusiastic Government, supported by mas- sive external assistance, strove to overcome the devastation of the cyclone of 1970 and the struggle for independence in 1971. Large amounts of food aid were distributed, refugees were resettled, and vital port, road and rail facilities were brought back into operation. A new constitution was adopted, and the first national elections, held in March 1973, brought Sheik Mujibur Rahman's Awami League party into power with an overwhelming parliamentary majority. - 2 -
5. Overall economic progress since independence, however, has been inadequate. Agricultural output remains insufficient for a population growing at close to 3% a year. Industrial output, heavily dependent on imports, has been affected badly by scarcity of foreign exchange. State enterprises have been hampered by management deficiencies, excessive govern- ment controls, shortages and price regulation. Exports have been stagnant and finance less than half of import needs. Bangladesh also has been severely affected by an adverse shift in its terms of trade since 1973. Trade pro- blems are compounded by dependence on annual food imports of 1-2 million tons, even in years of favorable weather, and by heavy reliance on imported industrial raw materials. Government revenue has been insufficient to meet current and development expenditure needs. Bangladesh has had to depend on large flows of external assistance to support its development effort.
6. The present Government, in power since November, 1975, rules by martial law. General Zia Rahman, the Army Chief of Staff, serves both as President and Chief Martial Law Administrator. The two chiefs of the other defense services serve as Deputy Chief Martial Law Administrators. The three service heads and eleven civilians form a President's Advisory Council. Each of the members has responsibility for one or more ministries. General Rahman's political program was endorsed by an overwhelming majority in a referendum held in May 1977. This program called for national elections in 1978 and local elections, at municipal and district level, later this year. (Union Councils were elected in January 1977). The current Government has intro- duced economic reforms such as a reduction of producer and consumer subsidies, agricultural taxation and import liberalization and has indicated that it intends further reforms in these areas. It has also pursued prudent monetary and fiscal policies. However, the fundamental problems of the country, namely overpopulation, weak administration, inadequate infrastructure, insufficient foodgrain output and inadequate resources for development continue to confront Bangladesh.
The Current Economic Situation
7. On July 1, 1975, Bangladesh initiated a stabilization program in conjunction with a standby arrangement with the IMF. Its principal elements consisted of a credit restraint program and elimination of deficit financing, combined with some import liberalization. This was preceded by a devaluation of 58% in May 1975, which subsequently, as a result of a link with the Pound Sterling, has led to a cumulative de facto depreciation of 90%. The record so far is that the credit restraint program has been a success: after an estimated rate of inflation of about 80% in 1974, prices declined by 10% in 1975, and price stability continued throughout 1976. The Government not only avoided deficit financing; it retired some of its debts to the banking system in 1975. The import licensing program was relaxed during 1975/76; besides increasing allocations to an average of 95% of entitlements, licenses were renewed on expiry and there is greater fungibility in the use of exchange allocations for selected categories of imports. Improvements in this area continued in 1976/77: import requirements of all public corporations and high priority private sector industries were fully met, the role of the Trading Corporation of Bangladesh was further reduced, and the list of items permitted under the Wage Earner's Scheme for imports by the private sector was enlarged. - 3 -
8. At the beginning of 1975/76 the credit restrictions may have been too pervasive and insufficiently selective; jute purchases by trading cor- porations were hampered, production credit was scarce, and import allocations could not be utilized. Measures were taken to rectify this situation. Over- all, however, the credit restraint program has been salutary because of its favorable impact on the rate of inflation. It has been reinforced by other factors:
(a) The output of rice in 1975/76 is estimated to have been about 12.8 million tons, representing an increase of about 14% over 1974/75. This record harvest is not expected to be equalled in 1976/77; output may decline (3%) to 12.4 million tons, as a result of less favorable weather. Rice prices which remained stable for most of 1976/77 have begun to rise in the last quarter.
(b) The private sector has a greater role in the retail and distributive trades, but stringent measures have been implemented to curtail hoarding and smuggling. The distribution controls over some consumer goods have also been liberalized.
(c) The supply position for raw materials has improved. Moreover, consumers have benefitted in real terms by substantial declines in the prices of key imports.
9. The devaluation in May 1975 made possible a reduction in the price of raw jute exports from the unrealistic level of i 200 per ton (late 1974 and early 1975) to i 150 per ton (from July 15, 1975), f.o.b. Chittagong. The reduction in price led to a significant increase in sales of raw jute but export volume in 1976/77 has been constrained by an inadequate crop. The volume of exports of jute manufactures also improved as a result of improved price competitiveness as well as a recovery in world markets. However their value showed no commensurate improvement because of a large fall in average price. Bangladesh's non-traditional exports have derived benefits from the devaluation and a wide array of export incentives; as a result, their value is projected to increase by 36% in 1976/77.
10. The agricultural sector did quite well in 1975/76 with overall pro- duction increasing more than 10%. Favorable weather was essentially responsi- ble for the good harvests, since the basic problems affecting the sector remain unresolved. The small-scale irrigation program (comprising low-lift pumps, and shallow and deep tubewells) has again fallen short of its target. Pro- cedures for the allocation of fertilizer, though much improved, continue to be in need of improvement. Credit is insufficient and inadequately distri- buted, though the Government in recognition of this need mounted a large credit program in 1976/77. Because of the steep fall in the free market price, government procurement of rice increased dramatically in 1975/76 and rose to an estimated 415 thousand tons. Nonetheless, the support price -4- was not maintained throughout the country because of limited purchasing facilities, stringent moisture content requirements, and unfamiliar payment procedures. This led farmers to sell their paddy at prices below the procure- ment price. In 1976/77 the Government is likely to procure about 100,000 tons less than in the previous year, but is relying more heavily on the private trade as an instrument for supporting farmgate prices. To achieve this it has relaxed its regulations governing stock accumulation and has expanded credit facilities. Efforts are under way to rehabilitate approximately 200,000 tons of derelict storage capacity and a study of further storage requirements is is progress.
11. In the industrial sector capacity utilization has improved in a number of industries, and the supply of raw materials and spares has improved. Measures have recently been taken to reorganize those public enterprises, which account for a major share of industrial output in order to improve management and labor productivity through, among other measures, providing them with operational autonomy in matters such as staffing.
Balance of Payments
12. The impact of the extremely good foodgrain harvests and the policies and measures instituted in 1975/76, were reflected in Bangladesh's 1976/77 balance of payments. The restrictive monetary and fiscal policies of 1975/76 were continued in 1976/77 and they continued to restrain demand. This, plus reduced requirements for food imports and lower import prices reduced the value of total imports by 27%. Export earnings showed an increase of 5%. Exports benefited from a favorable climate for non-traditional exports, which, in addition, were stimulated by a package of incentives. New items were added to the list of export products eligible for export performance licenses, the income tax rebate on earnings derived from non-traditional exports was doubled, exporters were qualified for preferential credit and interest rates, and priority was accorded them in the issuance of import licenses for the purchase of raw material and machinery. These incentives are expected to contribute substantially to a projected large expansion (36%) in the value of non-jute exports. Consequently the trade deficit is expected to decline from $909 million in 1975/76 to US$537 million. The current account deficit in the balance of payments is, therefore, expected to total US$512 million. However, since external aid disbursements in 1976/77 are expected to total US$572 mil- lion, inclusive of a cash grant of US$50 million, Bangladesh's international reserves are expected to rise by US$72 million to $285 million at the end of June 1977. This would be equivalent in value to about three months antici- pated imports in 1977/78. BALANCE OF PAYMENTS ESTIMATES (million US$)
1974/75 1975/76 1976/77 (Actual) (Actual) Estimate
Merchandise Imports (c.i.f.) -1,402 -1,290 /b -937 Merchandise Exports (f.o.b.) 358 381 400 Trade Balance -1,044 -909 -537 Other Current Account 7 1 25 Current Account Balance -1,037 -908 -512 Other Receipts and Payments (net) 272 /a 122 46 Amortization: Long-term debt -25 -78 -21 /c Short term capital movements (net) (including IMF) 62 -13 /d Changes in Reserves (-=increase) -196 50 -72 External Capital Disbursements 924 814 572 of which: Food 379 307 128 Commodity 386 378 220 Project 145 129 174 Cash 4 - 50
/a Includes US$260 million of outstanding letters of credit. /b Includes an estimated settlement of US$24 million of outstanding letters of credit carried over from 1974/55. /c Including repayment of US$6 million on USSR Wheat Account. /d Including refund of a deposit of US$21 million made by the Kuwait Central Bank. Source: Bangladesh Planning Commission and Bank estimates.
The M4edium Term Development Focus
13. In its memorandum for the May 1976 Bangladesh Aid Group ileeting the Government spelled out the focus of its development strategy for the medium- term. Agriculture continues to be the cornerstone of its program. Within agriculture the emphasis will be on an intensified Rural Development Strategy which seeks "growth with equity" in the distribution of benefits. Strong efforts are to be made to expand the acreage of high yielding varieties of seed (HYV), to intensify "Food for Work" programs, to step up agricultural input programs and to improve the efficiency and capability of agricultural support institu- tions. It is too early to say to what extent the Government's intentions will be translated into realistic programs of action, but they represent an essen- tial first step.
14. A determined effort is to be made to improve the efficiency of the industrial sector and its contribution to economic growth. One element of the new industrial strategy consists of measures to improve the climate for - 6 - payment of compensation for nationalized property, the encouragement of foreign private investment collaboration in selected fields, the provision of increased opportunities for private participation in domestic and foreign trade, and steps to activate the capital market. The second element in the strategy consists of a drive to improve the performance of public enter- prises, through such measures as the grant of autonomy in matters of staff management, pricing policies and inventory control, and creation of dis- tribution networks. Programs for improvement in the performance and effici- ency of the critical jute and cotton textiles industries, deriving from IDA's Fourth and Fifth Imports Program Credits, have commenced. The focus in in- dustry is on improvements in the quality of management, capacity utilization, marketing, and profitability.
15. The weak administrative framework, the frequent overlapping of functions, and insufficient decentralization of authority have been impor- tant reasons for delays in the execution of projects. The Government has indicated its intention to remedy these defects and has taken positive steps to reduce administrative bottlenecks impeding project execution. Discussions are underway with the Government concerning provision of technical assistance (with IDA funding) to the Planning Commission in the fields of overall plan- ning and project preparation. Project preparation and implementation cells are being set up in Ministries and Public Sector organizations, to identify, develop, and monitor projects. A study to determine what needs to be done to strengthen the capabilities of the Ministry of Agriculture and the Agricultural Development Corporation is underway, with assistance from IDA (paragraph 30).
16. Despite a substantial revenue effort in recent years, Bangladesh depends on foreign assistance, which finances about 80% of its development expenditures. The Government has indicated its intention to reduce this dependence and to improve its efforts to mobilize domestic resources. In 1976/77 total revenue is expected to increase by 11%, about twice the projected rate of growth of GDP. Some new taxes and reductions in subsidies have been introduced: (a) a tax on urban non-agricultural land has been introduced and a tax on agricultural land holdings in excess of 8.4 acres imposed; (b) a water charge has been levied at 3% of the gross increased benefit accruing to benefi- ciaries of the Ganges-Kobadak, North Bengal Deep Tubewell, and Dacca-Narayanganj- Demra Projects, and (c) the price of fertilizer has been increased by 20%.
17. Population planning is being given high priority and is an integral part of the Government's economic growth strategy. The Government, with the assistance of IDA and bilateral donors, has developed a program which em- phasizes a multi-sectoral approach including motivation, communication, and education. This involves a major effort in training medical and para- medical personnel, in co-ordinating several agencies and in devising pro- grams for research and evaluation.
18. The policies and measures initiated by the Government represent a good start. Yet they are no more than a beginning in tackling the major problems of expanding the output of foodgrains, increasing domestic resource mobilization, promoting exports and improving administration. Successful implementation of the measures already initiated and formulation of additional measures are necessary in 1977/78. - 7 -
PART II - BANK GROUP OPERATIONS IN BANGLADESH
19. Bangladesh became a member of the Bank and IDA in August 1972. Initially, Bank Group operations in Bangladesh concentrated on reactivation of IDA credits for uncompleted projects financed under credits to Pakistan before the independence of Bangladesh. Eleven such credits in an aggregate amount of US$148.55 million (including US$44.1 million for the repayment of amounts that had been disbursed under the corresponding previous credits to Pakistan, and net of cancellations) were made to Bangladesh. In addition, 17 new credits, excluding the consolidation credit of US$31 million referred to in paragraph 23, have been made totalling US$522.7 million. Of these US$325.0 million have been for five program credits. The project credits have emphasized agricul- tural development, but also included amounts for population, telecommunications, transport and industry. On June 18, 1976 Bangladesh became the 105th member of the IFC. Proposed credits for an Extension and Research Project and for an Inland Water Transport Project are expected to be presented to the Executive Directors shortly.
20. The debt service ratio in 1974/75 was 9.8%. For 1975/76, the ratio was estimated at 22.8%; it is expected to decline to about 11.8% in 1976/77. The large increase in debt service was due to the repayment of about US$50 million of short-term loans for foodgrain purchases made in the wake of the floods of 1974. Agreement has been reached between the Government of Bang- ladesh and most of the bilateral and multilateral donors concerning the assumption by Bangladesh of portions of the debt contracted by Pakistan be- fore Bangladesh become independent. This will lead to some increase in debt service from the levels prevailing through 1974/75. While the debt service ratio is not expected to exceed 20% over the next several years, it may do so by the mid 1980's unless careful debt management policies are pursued and aid provided on appropriately concessional terms. With respect to the Bank Group, Bangladesh has agreed to accept liability for certain debt for projects vis- ibly located in Bangladesh and completed before independence. A consolidation loan of about US$54.9 million and a consolidation credit of about US$31.0 million were signed on February 14, 1975. The Bank Group's share of Bangla- desh's outstanding external debt is not expected to rise significantly over the next few years from the present level of about 22%.
21. Annex II contains a summary statement of IDA credits and the Bank loan made to Bangladesh as of April 30, 1977 and notes on the execution of ongoing projects. Present disbursement performance under the program credits is good, slightly ahead of estimates made during appraisal. In contrast, dis- bursements under project credits have lagged far behind expectations. Reasons for this include problems associated with release of local funds, clearance of contracts, employment of consultants and appointment of needed staff. The Government of Bangladesh has taken steps aimed at eliminating the most press- ing of the present bottlenecks, and it is hoped that this will lead to accelerated project implementation. The release of local funds for projects to semi-autonomous government agencies now requires one application per year instead of the previous requirement for quarterly applications. The approval of the President is no longer required for contracts; the ceiling for contracts - 8 - which can be approved directly by the project implementing agencies has been raised from Taka 700,000 to Taka 10 million. Similarly the requirement that the President approve all consultants' contracts has been waived. The respon- sibility now devolves upon the ministries responsible for the project agencies to approve the appointment of consulting firms for projects with National Economic Council approval, or for project preparation activities. Finally, the authorization of the appointment of staff is being made automatic in the case of approved projects.
22. The IDA project lending program increasingly has concentrated on the rural sector, and specifically on food production. The Ashuganj Fertilizer, Barisal Irrigation, Karnafuli Irrigation, Rural Development and Agricultural and Rural Training Projects, as well as the proposed project, all fit into this strategy. Other priority projects are at an advanced stage of prepara- tion - many of them in the rural sector. These include a jute development project. While development of the rural sector must have top priority, the growth of other sectors cannot be neglected. Particular emphasis should be placed upon projects which provide infrastructure for the rural sector, or which process or provide outlets for its products, or which reduce the strain on Bangladesh's foreign exchange resources. Finally emphasis must be placed upon improving Bangladesh's project preparation and implementation capability. Given its low per capita income, Bangladesh is heavily dependent on foreign assistance to help finance its investment requirements. In view of Bangladesh's difficult foreign exchange position, IDA credits should cover all foreign exchange costs. Taking into account the level of financing expected to be available from other external lenders, and in order to direct IDA lending to those sectors (such as agricultural and rural development) where the percentage of foreign exchange costs is relatively low, the financing of local currency expenditures is also justified.
PART III - THE AGRICULTURAL SECTOR
23. Agriculture, as Bangladesh's most important economic sector, accounts for more than 55% of the nation's GDP and 75% of employment. The rice crop, which covers approximately 75-80% of the cultivated area, provides most of the country's foodgrain requirements. Wheat acreage is still relatively small, though it could become a more significant part of foodgrain supply. Since independence jute cultivation has earned between 75 and 87% of Bangladesh's foreign exchange, either directly, through the export of raw jute, or indirectly through the export of jute goods. At the same time, jute manufacturing is Bangladesh's most important industry.
24. Bangladesh lies on a deltaic plain of over 33 million acres, of which approximately 22.5 million acres are cultivated. Most of the soils are fer- tile. It has a tropical monsoon climate with high rainfall (over 50 inches a year). About 80% of the rainfall is concentrated in the monsoon months of June to October, with the remainder occurring primarily during the period March to May. In areas with adequate moisture, many farmers plant two or more crops, resulting in a relatively high cropping intensity (about 135% -9- in recent years). There are, however, many problems in the agricultural sector: few opportunities exist for expanding the area under crops; as much as one-third of the country is threatened by severe annual floods; during the dry season much of the land remains fallow due to lack of fresh water; severe cyclones periodically afflict farms near the coast; with Bangladesh's extremely high population density, farms are generally small and fragmented, and agriculture is characterized largely by subsistence farming. As a result of these factors, while population has grown at about 3% per year during the last ten years, foodgrain production has increased less rapidly resulting in substantial deficits foodgrain supply and a consequent need for large-scale foodgrain imports.
25. Faced with these problems the Government's development strategy concentrates on increasing agricultural (particularly foodgrain) production through the rapid spread of new high-yielding rice varieties (HYV), with pro- vision, where possible, of irrigation by low-lift pumps and tubewells. Irri- gation has thus become of crucial importance to increase cropping intensity and yields, and to decrease uncertainties and wide fluctuations in the farmers' production. However, even with improved and expanded irrigation facilities and an increase in crop production, Bangladesh will continue to require substantial foodgrain imports for a number of years.
Irrigation in Bangladesh
26. The development of water resources in Bangladesh which involves irrigation, flood control, drainage, and protection from both saline intrusion and saline inundation has presented many difficulties. The need to maintain a minimum flow in the rivers during the dry season (both in order to prevent saline intrusion and harmful effects on navigation and fisheries), limits the potential for surface water irrigation. The flat terrain for the most part precludes the development of large storage reservoirs for either controlling the impact of the floods or releasing water for irrigation in the dry season. Poor transportation facilities cause problems in moving equipment and mater- ials to construction sites. In addition, a high degree of land fragmentation necessitates the formation of and cooperation among a large number of farmers for full utilization of even minor irrigation works.
27. Farmers in Bangladesh have for centuries used bucket-lift irri- gation methods for cultivating their land near the numerous rivers, man-made channels, and low-lying water bodies. In the 1960s, much of the development effort was focused on large scale gravity irrigation and flood control proj- ects such as the Ganges-Kobadak, Chandpur and Coastal Embankment Projects. Although these projects now provide irrigation to about 200,000 acres and flood protection to aboi- 1.5 million acres, their overall impact, particularly in view of the massive investment involved, has been disappointing. Most of these projects have suffered from large cost overruns and long implementation delays and benefits to-date have generally been much smaller than projected. Part of the reason for the disappointing results has been the all-pervasive weaknesses in implementation capacity. However, in retrospect, questionable technical and economic feasibilities were also partly reponsible for the results. Considerably more successful have been small pumps (low-lift, - 10 - diesel-driven pumps of one or two cubic feet per second capacity) which were introduced in the early 1960s. Their introduction was the key factor in expanding dry-season irrigation from 1 million acres in 1960 to over 2.7 mil- lion acres in 1977. The major item in irrigation development in Bangladesh is now the low-lift pump program of the Bangladesh Agricultural Development Corporation (BADC).
28. In view of the favorable response of farmers to low-lift pump irrigation, the Government is giving priority to projects that would create suitable conditions for this type of development. Low-lift pump irrigation is already practised in the Muhuri Project area but pump utilization is limited by water availability and sea-water intrusion. With the provision of water control, the area would become suitable for the expansion of low- lift pump irrigation. Flood levels do not inhibit the cultivation of HYV rice during the monsoon season, and existing channels provide a natural water distribution system.
29. Prior to the independence of Bangladesh, two IDA financed water control projects were completed, and some pumps and engines were finance under IDA agricultural credit projects. Currently, IDA is financing the Chandpur II Irrigation Project (Credit 340-BD, 1972), the Northwest Tube- wells Project (Credit 341-BD, 1972), the Barisal Irrigation Project (Credit 542-BD, 1975), and the Karnafuli Irrigation Project (Credit 605-BD, 1976). The implementation of all four irrigation projects currently in execution is behind schedule by one to two years. Reasons for the slippage of the implementation schedules are primarily administrative and include difficul- ties in: hiring of consultants; appointment of project staff; release of budgetary allocations; approval of contracts, and coordination among the various implementing agencies. The Association and the Government have been discussing specific measures to improve project execution over a long period. The Government has already taken a number of steps to relax the most serious bottlenecks. IDA and the Government have also given increased emphasis to regular monitoring and supervision of the various projects in order to identify and resolve potential problems at an early stage.
PART IV - THE PROJECT
30. The proposed Muhuri Irrigation Project was prepared by consultants financed under the Irrigation Engineering Credit (S-14) working with the Bangladesh Water Development Board (BWDB). An Association mission appraised the project in September/October 1974. A distinctive feature of the project was the construction of a large gated regulator near the mouth of the Feni River (see paragraph 32 below). In view of the structure's size and com- plexity the contract for the regulator was to be let after international competitive bidding. Given the difficulty in estimating the costs of the works, and since it would require a major construction effort in Bangladesh it was decided to postpone finalization of the amount of this credit until bids on the regulator had been received. However, in order to obtain agreement with the Government on the scope of the proposed project, negotiations were held in August 1975, before the bidding process was initiated. The Project Director was appointed in October 1975. Substantial delays occurred there- after in finalizing a contract with consultants who were to prepare the tender documents for the regulator and evaluate the bids for it. Agreement was reached in May 1976, on the basis that the consultants' services required until completion of the bid evaluation would be financed under the First Technical Assistance Credit (409-BD). After further delays in preparation of the tender documents, bids were received on September 21, 1976. In early May 1977 agree- ment in principle on the award of contract was reached with the Government (for details see also paragraph 33). The appraisal report (No. 725-a-BD dated May 31, 1977) on the project is being circulated separately. A supplementary project data sheet appears as Annex III to this report.
Description of the Project
31. The proposed project would provide reliable irrigation water supply in four Thanas which are situated around the confluence of the Muhuri and Feni Rivers in Southeastern Bangladesh. Improved flood control and drainage, and improved agricultural supporting services would be provided to farmers in a gross area of 99,000 acres and a net agricultural area of about 67,000 acres. The project would enable a major increase in crop yields through the construc- tion of facilities to create favorable conditions for growing HYV rice. Irri- gation facilities provided by the project would expand the boro rice area from the present 15,000 acres to about 50,000 acres. In the wet season, the project would reduce flooding and allow supplementary irrigation, resulting in a shift from local varieties to HYV on 10,000 acres. By preventing over- land sea water intrusion, 3,000 acres of presently marginal and largely uncropped land would be brought to high productivity. About 1,100 5-7 h.p. diesel-powered low-lift pumps, each serving an average area of 45 acres, would irrigate the area from an extensive network of natural and project-improved channels. These channels would serve, along with the principal rivers, both reservoir (storage) and canal (conveyance) functions with a minimum of water loss.
32. Low-lift pumping has already been adopted on large scale in Bangladesh in areas where the rivers and natural channels carry fresh water throughout the year. Within the Muhuri Project area a reservoir will be formed by the construction of a large gated regulator near the mouth of the Feni River. The reservoir would permit small pump irrigation to be extended to at least 35,000 acres, presently unsuited for irrigation, by providing a permanent source of fresh water. The regulator would eliminate sea-water intrusion and tidal fluctuations in the natural river channels along which the low-lift pumps will be located. Channel excavation would make small- vessel navigation possible throughout the area. The regulator would also improve flood drainage by freeing waterways from tidal surges. This would allow discharge from the project area when tidal levels in the Sandwip Chan- nel drop below reservoir level.
33. Bids for the construction of the regulator structure were sought through international competitive bidding in accordance with Bank-Group guide- lines. However, some bidders were not responsive. Moreover, none of those - 12 -
A local bidders that were responsive was adjudged fully qualified for the job. firm having some previous experience in executing similar (although smaller) in civil works had tendered the lowest bid. However, since the works involved the Mluhuri Project are substantially more complex than any previous regulator construction undertaken by any contractor in Bangladesh, it was decided to discuss with the lowest bidder the possibility of providing to the firm fi- nancial, managerial and technical assistance so as to enable it to execute the on the works in timely fashion. Discussions with the firm and with Government nature of scope of this assistance were substantially completed following a alia, mission to Bangladesh in February/March 1977. It has been agreed, inter that the lowest evaluated bidder will employ a four-man expatriate construc- tion management team to assist it during project implementation. Provision has been made in the credit amount for such assistance. Signing of a contract terms between BWDB and the contractor who will construct the Feni Regulator on the and conditions satisfactory to IDA will be a condition of effectiveness of proposed credit (see Section 6.01(c) of draft Development Credit Agreement (DCA)). In addition to pumps and civil works, the project would provide supporting facilities and equipment, including operation and maintenance facilities.
34. Pump groups would be formed in the project area under the direction of staff members of the Integrated Rural Development Program (IRDP), who would be assisted in pump location and distribution layout by BWDB and the project consultants. Pump groups would construct their own water distribution systems within areas served by each low-lift pump. IRDP would conduct training pro- grams in improved irrigaton practices for selected members of each pump group at the Thana Training and Development Centers (TTDCs).
35. The Directorate of Agriculture (Extension and Management) in the Ministry of Agriculture maintains extension agents at both the thana and union levels. The Union Agricultural Assistants (UAAs), an average of ten per thana, are the basic field extension workers. Their work is supervised by Thana Agri- culture Officers (TAO). As there is a vital need to strengthen agricultural extension, the Government plans to replace the TAOs who are mostly diploma holders, with college graduate Thana Extension Officers (TEOs) to ensure higher technical competence. It also plans to extend extension services to the village level by appointing a minimum of two Village Extension Agents (VEAs), to replace the present one UAA, in each Union. The IDA-financed Rural Train- ing Project (Credit 621-BD) would help to produce more trained personnel for posting as VEA. IDA also expects to present shortly to the Executive Directors a proposal for financing an Extension and Research Project (EARP) in the Northwest region of Bangladesh for strengthening these services to the farmers. It is expected that EARP would be a model for improvement of extension service on a country-wide basis including in particular the areas under the proposed Muhuri Project. The credit would provide funds for procurement of additional to jeeps, motorcycles and bicycles to improve training and extension services the farmers in the project area.
Project Execution
36. The BWDB under the Ministry of Flood Control, Water Resources and Power will have overall responsibility for management and execution of the - 13 - project works, and will be directly responsible for the design and for con- struction of all civil works. Responsibility for procurement and distribution of low-lift pumps would rest with BADC. IRDP would be responsible for the formation of farmers' pump groups and their integration into the Thana Central Cooperatives Association (TCCA) structure. The Mlinistry of Agriculture would be responsible for strengthening extension services to the farmers. A senior BWDB official has been appointed as Project Director to coordinate individual agency activities. He will report to the Member, Planning and Implementation, BWDB, and have the assistance of a Project Implementation Committee (PIC) comprising senior technical officers of the participating agencies. The Central Evaluation Committee (CEC), formed for the Barisal Project (Credit 542-BD) by a government order dated December 13, 1974 to periodically review progress and problems on IDA-financed irrigation projects, would also function for this project. Under the Chairmanship of a senior government official, the members of the committee are the Secretaries of the various Ministries concerned with project implementation and the Chief, Flood Control and Water Resources Division, Planning Commission. The Member, Planning and Implementation, BWDB, is secretary of the committee.
37. Proposals for project management and interagency coordination have been agreed upon, and the representatives of BWDB, BADC, IRDP and the Mlinistry of Agriculture on the PIC have been appointed. Annual programs to be prepared by the Project Director in consultation with the PIC before each contruction season, would be drawn up and would detail the activities and works to be implemented by each agency, including the cost estimates of the physical works. The programs would be sent to IDA, by August 31 of each year, for review and comment (See Section 3.04(b) of the draft DCA).
38. Preparatory work on land aquisition, the preparation of access roads for the project area and the setting up of the project implementation organization commenced after Credit negotiations. For all additional work under the project, the Government will retain a consulting firm to advise and assist BWDB, its Project Officer and the other agencies responsible for project implementation (see Section 3.03(a) of the draft DCA). The consultant would have responsibility for the preparation of work programs, designs, and contract documents and the supervision of construction. Terms and conditions for continuing with the consulting services which were provided to BWDB in obtaining and evaluating bids for the Feni Regulator have been agreed and the formal appointment of such consultants is a condition of effectiveness of the proposed credit (see Section 6.01(b) of the draft DCA). BWDB would be respon- sible for the operation and maintenance of the regulator, and for the main- tenance of the channels, the cross dam and all the embankments. The Government has undertaken to make sufficient funds available at all times to operate and maintain all facilities at acceptable standards. The Project Director would be responsible for preparation of detailed manuals specifying project opera- tion and maintenance procedures, and designating the responsible agencies and officers to implement them. These manuals would be submitted to the Asso- ciation for review and comment within 36 months of signing of the DCA (see Section 4.02 of the draft DCA). - 14 -
39. The Government's prevailing policies on irrigation water charges provide for gradual decreases in nationwide subsidies to farmers for low-lift pumps. The farmers now pay charges which approximately cover the operation and maintenance costs for the pumps. In addition, for projects involving civil works (e.g. the proposed Muhuri Project) the Government has recently imposed a charge equivalent to 3% of the value of the incremental gross production resulting from the works. This charge would recover approximately half of the operation and maintenance costs of the civil works. The Govern- ment intends that farmers benefitting from primary project installations will pay the full operating and maintenance costs and repay as much of the invest- ment costs as practicable. For the Muhuri Project, it has been agreed that the farmers would pay for the operation, maintenance and replacement of the low-lift pumps. They would also pay for the full costs for operation and maintenance of the civil works and for as large a portion of their capital costs as appears compatible with the maintenance of adequate incentives to participating farmers (see Section 4.03 of the draft DCA).
Project cost and Financing
40. The project is estimated to cost US$52 million equivalent, includ- ing US$9.8 million of taxes and duties, with a foreign exchange component of US$18.4 million. The proposed IDA credit of US$21 million together with the proposed IDA administered credit of Can$9.0 million (US$8.6 million equiva- lent) would finance 70% of project costs, net of taxes. The two credits would cover the foreign exchange cost and US$11.2 million of the local cost. The IDA administered credit would be in accordance with the terms of an agreement between the Government of Canada and the Association which was approved by the Board on April 12, 1977 and pursuant to a Development Credit Agreement beteen the People's Republic of Bangladesh and the Association acting as Administrator on behalf of the Government of Canada. The remaining US$22.4 million would be contributed by the Government through annual budget appropriations. It has been agreed that a project revolving fund would be established (see Section 3.02 of the DCA). At the beginning of each month it would be replenished so as to maintain a balance adequate to cover estimated expenditures for the following three months. Establishment of the fund, and the deposit therein of an initial amount of Tk. 3,000,000 is a condition of effectiveness of the proposed credit (see Section 6.01(a) of the draft DCA). Once the project is completed, the recurrent cost of operating and maintaining the facilities will be US$0.3 million equivalent per year.
Procurement
41. Vehicles, equipment and materials would be procured after inter- national competitive bidding in accordance with Bank Group Guidelines. A 15% preference margin, or the prevailing customs duty if lower, would be extended to local manufacturers in the evaluation of bids. Off-the-shelf items costing less than US$10,000 each, which are not practical for inter- national tendering, would be purchased through normal Government procurement procedures acceptable to IDA. The aggregate cost of such items would not exceed US$200,000. - 15 -
42. Bids have been received for the major civil works contract for con- struction of the main gated regulator (estimated to cost about US$11.2 million, net of taxes and contingencies) after international competitive bidding in accordance with Bank Group Guidelines. International competitive bidding would not be practical for the other civil works (channel excavation, drainage struc- ture, embankments) with estimated cost of US$8 million (net of taxes and contin- gencies). These works are relatively small, simple in nature, diverse in location, construction would be seasonal, and they lend themselves to labor- intensive construction. For these works, contracts would be awarded on the basis of competitive bidding advertised locally and in accordance with pro- cedures acceptable to IDA. Construction equipment and imported materials (estimated to cost US$4 million) for these works would however be procured after international competitive bidding in accordance with Bank Group guide- lines.
Disbursements
43. Disbursements from the proposed IDA and IDA administered credits would be made over a period of five years at the rate of 100% of the cif cost of directly imported vehicles, equipment and materials; at 100% of the ex- factory price if manufactured locally and at 50% of the off-the-shelf price if procured locally. For consultants' services, disbursement would cover 100% foreign exchange costs and 70% of local costs. Disbursement for civil works would be for 100% of foreign expenditures and 50% of local expenditures. Retroactive financing of up to US$250,000 is recommended for expenditures on staff housing and site preparation incurred after November 1, 1975 (see Sched- ule I, paragraph 4 of the draft DCA). The IDA and IDA administered credits would be disbursed pro rata in the ratio of approximately 21:8.6.
Benefits
44. The primary national benefit from the project would be increased rice production and the resultant foreign exchange savings. The population in the project area would benefit directly from increased farm incomes and an increase in employment opportunities in agriculture, transport and marketing. The project has an estimated economic rate of return of about 16%. Alternative rates of return have been calculated on various unfavor- able assumptions. Even with a combination of a two year delay in project completion and a 15% decrease in commodity prices, the estimated economic rate of return would still be 10%.
45. The project would increase the irrigated area by 35,000 acres and make irrigation more reliable on 15,000 acres of currently irrigated land. This would cause a major shift in the cropping pattern and increase the production of milled rice by some 35,000 tons. This represents annual gross foreign exchange savings of about US$9.8 million (in 1977 dollars) based on a projected rice price of US$280 per ton c.i.f. Chittagong. After deducting foreign exchange costs of spares and replacements, fuel, fertilizer pesti- cides, the net annual foreign exchange savings attributable to the project would be about US$8.0 million. The demand for hired labor would also increase substantially and thereby create additional employment opportunities for - 16 - landless laborers and submarginal farmers. Net farm incomes in the proj- ect area would typically increase by about 30-40% under the project. Present per capita income in the project area is estimated to be about two-thirds of the national average, with about 70% of families below to level required for minimum subsistence. While the project is not expected to change income dis- tribution, it will substantially reduce the level of absolute poverty in the area, with the proportion of the population below subsistence a level expected to decrease to under 50%. Surveys and evaluation studies will be undertaken to estimate the direct and indirect benefits resulting from the project and to assess the socio-economic characteristics of the project beneficiaries.
Risks
46. The project faces considerable risks. A regulator structure of the kind envisaged has not been constructed before in Bangladesh and local con- tractor capacity for executing large civil works is limited. Moreover the pace of project implementation, especially in the water resources sector in Bangladesh, has not been satisfactory, due in large measure to organizational shortcomings and a lack of the kind of interagency coordination required for successful project implementation in the sector. However measures--such as the provision of substantial assistance to the BWDB and to the contractor to be engaged to undertake the major civil works, and the setting up of an implementation organization that provides for interagency coordination--have been taken to mitigate possible difficulties and remove potential bottlenecks to successful implementation.
Environmental Impact
47. The overall environmental effects of the project are expected to be beneficial. Public health should improve because of the increased avail- ability of fresh water on a year-round basis. Irrigation-related diseases such as bilharzia are not present in Bangladesh. In reclaiming salt-blighted land along the coast, the project will enhance environmental conditions. Existing fisheries in the area are small and the project would have little adverse effect on them. Major carp can generally be expected to stay in the area even during floodwater discharge through the proposed regulator. The reservoir would have the potential to become an important area for fish pro- duction if the planned pilot fish culture facilities on the Halda River are developed and fingerlings of major carp become available. Provision has been made in the Karnafuli Irrigation Project (Credit 605-BD) for consultant ser- vices to assist in the formulation of a fisheries development program for the Muhuri Project. The program would include the construction of a carp spawning and rearing station on the Halda River.
PART V - LEGAL INSTRUMENTS AND AUTHORITY
48. The draft Development Credit Agreement between the People's Repub- lic of Bangladesh and the Association, the draft Development Credit Agreement - 17 - between the People's Republic of Bangladesh and the Association as administra- tor on behalf of the Government of Canada, the Recommendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement of the Association and the text of the Resolution approving the proposed Credit are being distributed separately to the Executive Directors.
49. Special conditions of the Project are listed in Section III of Annex III. Additional conditions precedent to the effectiveness of the IDA credit include: (a) fulfillment of all conditions precedent to the effective- ness of the IDA administered credit (other than the effectiveness of the IDA credit agreement); (b) the appointment of Consultants; (c) the establishment of a Project Fund with an initial deposit of Taka 3,000,000; and (d) the signing of a contract satisfactory to IDA with the contractor who will construct the Feni Regulator (see Section 6.01 of draft DCA). An additional condition of effectiveness of the IDA administered credit would be the fulfillment of all conditions precedent to the effectiveness of the IDA Credit (other than the effectiveness of the IDA administered credit).
50. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association.
PART VI - RECOMMENDATION
51. I recommend that the Executive Directors approve the proposed credit.
Robert S. McNamara President By J. Burke Knapp
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Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961, for 1970 betawen 1968 and 1970, end for Moat Recen.t Eatiteat between 1973 end 1975.
*The 1970-75 population growth rate is abnormIly low duo to the effecto of the war of independence. and -flt population novonets across the borders during that period. Presently, the -serage population growth is earineted at 3% per esnu.
eSelection, of Malaysia as an objective coutry is based on Malaysia's suc.ess in naintaining a high rate of econonic growth and adequate 1eve of .Idefore concrrently with diversifying its ecoonnic otructure
BASfGLAIIESH 1960 / Ratio of population under .15 sod 60 end over to total labor force; lb 1963-64; /c Registered, not all practicing in the coutry; 1d Goveroesnt hospital sstsblishoants only; Is Approinioate enrollpent sa. percentage of population in 6-10 and 11-15 age groups reapectivelyi If Age group 13-59 and 60 and over respectively.
1970 j 1966-67; 1b 1967-68; /. Registered, not all practicing in the country; Id Govesannt hospital estsblisbh-ets only; /a Average for 1969-71; /f Appriniaste enrollent as percentage of populstion in 6-10 and 11-15 age groups respectively.
MOOT RECENT ESTDMATE: Is Ratio of population under 15 sod 60 end over to total labor force; /b Mainly onetployed worker seeking their first job; /c Including nidwive; Id 1972: /e Age group 15-39 sod 60 nd over respectively. -BOM4A 1970 Is Ratio of population under 15 and 65 sod over to total labor force; /b Personel in goveresnent srie only; Zc1964-66.
lm. 1970 Is 1964-66; /b Public schools which include technical educa.tion at the post-secondary level.
MALAYSIA 1970 /a West Maleysia; 1b Registared applicants for work; /. 1964-66; /d Piped water insids.
RIO, May 24, 1977
SUINflIlONS O? SOCIAL DhOIGATORiS
2 Land Area (thou kO ) Psoplation Par nursing p-ro - Populatibo, divided by nusbr of praticing Total Totalsuf1 e rsac onprisiag land area end island wstsra sale sad f-1al graduate nuse,trained or coc.tiftad' nure, sa..d Agric.. Most rec..i as riserst of arclua res cued tampoc-ily or peac- atailiary psrsams with training oreprin. ses tly for crops, peatures, sacker &bitches gardenm or to lie fallow. POsulatien per hoapital bed - Population divided by mocker of hospiia1 bode avilable is pablic aed privars general and apecialised hospito1 and GIMP mrc cesita (U5$) - GMP per capita estimates ac-rsat market prices, rehabiliratien ceter; secludes nursing hoses sad ssrablihlesstr for 1 calculted by sen converion etbod as World Sank Atlas (1973-75 basis); custodial end preventive care. 1960; 1970 and 1975 data. Per canito eucpl, of calories (%, of resoir-ttet) - Computed fano energy sqolv-lsot of net feud supplies aveilablo in coencry par c.pita per day; Ppelatieno sod viral atacetic, available suPplies comprise domestic production, imports I... np-rte, and Populatien (aid-year nillion) -As of Jely first: if not available, overge changes in stock; set suppis. seclde animal feed, seeds, quatities used of two end-yea eutieart-; 11?60, 1970 end 1975 data. in fond processing and lenses is distrihotlen; requirenesware.-r estitord by FAO based on physiological seeds for coral activity end health conaid- Population, denaity -per square he - Mid-year population per square kii tentr acing envircoonenta1 tenperature, body weights, oge and see distribotions of (100 hertares) tf total arsa. poplation, and allowing 10X for wast.eat household level. Ponuletion densit, -par auar ho of saris, laud - Computed as shows for Per capita suset, of protais forse par deal - protein content of per tapits agriroltoral lend only, net supply of food pear day; sat supply of food is defined as above; require- senra for all coutries established by USDA toonomic Researsh Service Vital traritics provide for a niioso al1owasc of 60 gron of rural protein par day, sad Crude birth rare sea thousad, average - Annual live birtho per thousand of 20 gra- of .- animlsd pulse protein, of which 10 grn should he asinuI nid-year population; tee-yesr arit nti avgrsge ending in 1960 and 1970, protein; thus standards are lowr than those of 75 grow of total p-otnin Cend five-yesr avsrage ending in 1971 for ear -oost estimtate sod 23 gcan of an-Ima protein sa avorugo for the -nId, proposed by FAO Crud death rats car thousend. oese- Annual deatho per thousad of nid-y.sr in the Third world Food Survy. population; ten-year erith-otic averages ending in 1960 sad 1970 sod five- Per capita proteis scenlc from anIma and oulse - Proteis supply of food year average ending in 1975 for ocet retet estima te, derived fne ranials and pulses in gr-n per day. Infant certality rate C/thou) A-..Iua deorho of infants onder one year of age Death rate f/thou) asee 1-4 - Annual deaths per thousand in age group 1-4 per thousand liva hirth.. years, to children in this age group; suggested as an indicator of Life enseotascy at birth (ors) A-Avrage nmber of year of life remaining at malntrition. birth; usualy flu-yea -regags ending in 1960, 1970 and 1975 for develop- ing coutries . Educatio Gross reeroduction rate - Averaga sombr of live daughters a oa ill hear Adiusted enrollment ratio_ eepmac school - Enrolleent of all sgee ae Pr- is her sornl reproduction period if she seperisoces present age-specific entnag. of primary schoo-sepoulation ; includes children aged 6-11 yeors fertility rates; ousully fiv-yea avereges ending in 1960, 1970 and 1975 hut adjusted for di ff. Met lengtho of primary educa.tion; for coutries with for davlpngcucra.uivreral education, -nolisentmay excee d 100% since eas pupils are below Ponat rowth rats (%) - totnl Coopousd .n.-I growth rates of mid-year or shov the officis1 school age. populstian foc 1950-60, 1960-70 and 1970-75. Adiuscad enrlmet ratio - secondary -chul - Compurod as bhv; o-rnd-ry Posulation armwth rate II) - urban - Computed like growth rtst of total education requires at least four years of approved primary imatructien; population; different definition of urhan area sy affect cop-raility of provides genral., vonaional or reac.her training ins trutions for pupils daa nngc tmries of 12 to 17 year of age orepnenecure r g erally secluded. Erhas =uultion (I of tot.1) - aRlo. of urban to total Ppoplation; different easof schooling eroidd (first an scod levels) -Total1 years of definitions, of urban areas say sffcct conprarbility of data onoug coutrins. anhooli.g; at secondary level, -ntina instrution may he partislly or campletely seclded. Axe structure (sercet) - Children (0-14 years), woking-age (15-64 years), Vonetisnal Enrollment Cl of secondary) - Vocationa i-tcitoriona inclode sdrtired (65 yearn n over) as percentages of mid-year peltmjton. technical, industris1 or other progrn which operate independently ora A,. depndenr cartic - cir of poPulation under 11 sod 65 and ovr to those deparosstar of secondary i-stitotiona. of ages 15 through 6.Adul.ttliteracy rate CT)t Literate adults (able to read ond wits) as per- tEonoic depradaccy ratio - Ratio of population onder 15 aod 65 and over to ctaeof coral adult popultion aged 15 years and over. the 1ahor force in age group of 15-64 Year. rscily elning. -sccptor (-1sultive. thou) - C-ulti-c oubor of acceptors H Looig of birth-nontroI dvcsuder suapican of national fenily planning progron, Person par coo (urban) - Average onber of persons per roo i occupied sic lcPtin convetioce dwellings in erban areas; dwellings -cclde non-peenannt coolly PlnIno-users Cl of married wmn -Percentages of maried -ean of structures ad unoccpied parts. chid-hearing age (11-44 years) oho use birth-oont-1 devicas to all maried Occuniad dwslli.o wi;thont absed water MT - OccPied conentional dwellings wenin nm age group. in urba and rurs areas without inside or outside piped water facilities as Pprcen.tage of all ocuid delings Ebploocent ftcees tc elactriniry CT of all dweIllings _ Convetional dwellings with Total lahor (urns (thouased) - tE-noni-lly active persons *icluding -od electricity in living quarters as percent of total dwell1ings in urban and fcress and usaplayed but excluding hueivs tudents etc.; definitions rurl areas. in various oustries are not conparble. foca dueSino connected to el1ctrinity (T) - Computed as above for rural Labor forei oiclueC) -tAgricultural labor force (in faning, forestry, dwellings ony. huntig sdfhig) se percntge of total lbor foc.- Snenload CX of ishor force) -Sonployed are osua1y defined as perons who Cors,mption arel abl an d wlIgto takeajob, out of a Job on a give day, renamd our RadIo rcivers (ser thou sop) - All typos of receivers for radio broadcat ofajb !adsein.gwrk for a specified ninmo peiod sot ...c.eding onet geneal public per thousan d of populetion; -ecldes unlicensed recever wek-a not be comparable betwee coutries due to different definitions in coutrie an nyaswe agarto frdo aswsI fet of usaplayed end source of data, e.g. * seploysent office statistics, .-npie dnts for recen.t yere say not he comparable sinc anal.. countries bholiabad -ovys, compulsory uneploymet insuance, licensing. Passenger cr orto pop) - Passenger cars comprina notro cars easting Isnom distribution - Pe-cntega of private iucnne, (both in cash and kind) leste ight pesn xludes onbolauce, hearses and ailitry ra-iv-d by richoet 5T, richest 20%, poorest 20%, and poores t 40% of hoe-.vhila holds. Ele,ctricity (bkh/yr par espl - Anmual consumption of industrial, cnesreial, phlfc and private electricity in kilowtt hence Per capita, genaraly Diorribution of land owesip - Perc.e.ltgea of land ownd by wealthiest 10% base.d on predution data, withut allowance for looses In grids hut allo-- and pocret10ofla owners. itag f or iaperta and esparta of electricity. Neweerint (ke/yr oer sap) - per cspits s-sa 1onsumption in, kilogres Hes1th and Notrition estimated from dometic pradocrion plu-smet imports sf seapriat. Population se era~hinisa - Population divided by mate.r of practicing physicians quaitfied icon a medical school at niv-rsity leve... ANNEX I
page 3 of 4 pages
Ks. 1967-691974/75 1972/73 1960-- 1965~ ~~~~~~~~~~~~-17- j1q6.7-69 1974/75 19 76/77 RATIONALACCO~~~~Th ______~~Actual... 1976 771965 1970 jj7 v NATIONALACCOMtMI Constantt 1972- 1973 Pr-ices& Exchange -Ratis Average AnnrualGrovth Rates As Percent of GOY Gross Domestic Product 6,012 5,833 6,514 7,295 7614.7 3.3 6.? 98.~ 101.8 10. Gains from Terms of Trade (4 89 - -117 14 ~ -148 1.5 -1.8 -2.0 Gross Domestic Income 6CIUT CV JIb 7,1..6 25 . 5! -,fT 100.0
Import (cine. N178) 879 747 703 646 ~ 00 20.6 6.8 -7.4 14.4 11.0 6.7 Exports " (import capacity) 598 369 197 200 210 12.3 -14.6 -12.6 9.8 3.1 2.8 Resource Gap 281 *7 13IT46 7.9 39 Consumption Expenditures 5,668 5,817 6,493 ~ 7,062 7,230 5.7 3.6 5.6 92.9 100.1 97.6 Investment " (mncl. stocks) 714 394 4s9954 731. 88 67 12.9 7.8 7.4
Domestic Savings 433 16 -6 88 1.83 4.3 10.0 81.0 6.8 -0.1 2.4 National Savings 416 32 10 110 200 8.7 20.5 57.0 7.1 0.2 2.6
MERCHAIDISE TRADE Annual Data at Current Prices ka Percent of Total
Tmports 21I 6 Capital goods .. 100 135 213 26825.7 .. 16,-8 28.6 Intermediate goods f6sLfuel.s) 176 386 386 250... 12.6 30.4 26.7 Fuels and related materials of which: Fetroleuw . 23 155 126 144... 49.8 . 10.0 15.4 Cons tion noods - -A3 __ 541 275 ... -6.6 ~ &- - - aota reho Deports (cif) 57 727 1,402 1,26 937 86100.0 100.0
Exports Primary produictsbrnl. fuels) .. 145 119 156 .. .. 2.9 40.9 42.0 Fuels and reaUted materials of which: Petroleum SManfatrsed goods 195 239 225 242 5...4 59.1 58.0 Total Heroc. Exports (fob) 481 -340 358 381 .-Ti 3.-8 - 100.0 100.0 Tourism and Border' TradLe
Merchandise Trade Indices Average_1972- 73 -100 Export Price Index 61 100 133' 109 Ill. . 2.4 Import Price Index 52 100 215: 195 189... 16.3 Terms of Trade Index 118 100 62: 56 59 .... 11.7 Exports Volume Index 148 100 80 ~ 106 123... 3.9 VALUEADDED BY SECTOR Annual Data at 1972- 73Prices and Exchange Rates Average Annual Growth Rates As Percent of Total
Agriculture 3,542 3,403 3,712 4,078 4,140 .594.87 59 Industr-yand Mining 420 412 466 527 567 4. .8 7 7 8 Service 2.050 1.848 2.146 2.333 2.504 7...8. 34 34 35 Total 6,012 5,663 6,324 6.938 7,211 6.1 100 100 100
PUBLIC FINANCE As Percent of GOP (Central Governiment) Current Receipts 317 280 469 775 877 . 5.3 7.2 11.2 Currenxenditures 365 364 419 600 686 . 32 6.1 6.4 8.7 3sgtr avings -4-8 --84 3-j j. 16.8 -. . . Other Public Sector Public Sector Investment 421 239 248 29'5 350 -O .. 0. . 3.8 4.9'
U$million-' CURRENTEXPENDITURE DETAILS Actual Estimated DETAIL ON At Av. 1972/73 P and ER As % Total Current Expend.) 1969/70 192/273 1947i97/6 1767 hhLCSCO First Plan %o oa Education .. 14.8 15.5 13.6 13.3 INVESTMENT PROGRAM (17/4 -197/78 Other Social Services . 4.0 4.2 4.4 4.2 Social Sectors 758 15.3 Agriculture and - - Agriculture 1,302 26.4 Other Economic Services . 11.2 7.2 6.8 6.7 Industry and Mining 1,024 Z0.7 Administration and Defense * 67.4 68.1 68.8 68.9 Power 529 10.7 other 2.7 5.0 6.4 6.9 Transport and communications 802 16.3 Toa Current Expenditures 1000 100.0 1006.0 100. 0 Other 524 _AQ6 ______TotTotal pExpeditures44,940 100.
SELECTED INDICATORS I 16- 95- 97-FINANCING (Calculated from 3-year averaged.data) 1965jj 1970 1976 _ Domestic fcorrowing- 784 15.9 Average ICON 3.74 0.89 , Public Sector Savings 2,022 40.9 Import Elasticity 1.29 1.11 Program aid counterpsrt 1,00-9 20.4 mirginal Domestic Savings Rate 0.22 0.05 Foreign Project Aid 1.125 22.8 Marginal National Savings Rate 83sT 0.05 Total Financing 4,940 100.0
IAmOR FORCE AND Total Labor Force Value Added Per Worker (19 72 -73 Prices & Exc. Rates) OUTPUT PER WOREER In Miflions % of Total 1961- 73 In U.S.Dollars Percent of Average 1970 - 73 1960/61 19 72/ 73 1960/61 1972/73 Growth Rate 1969/70 19 72/73 19-69/70 1972/73 Growth Rate
Agriculture 16.1 20.5 85 78 2.0 .. 166 .. 76 Industry 1.0 1.8 5 7 5.0 .. 229 .. 105 Service 1.8 3.9 10 15 6.7 -. A.. 222 -- Total 189 2. 10 10 28 248 217 , 100 100 -4.9
* not applicable -nil or negligible not available - -less than half the smallest unit shown Noet: Figures are on fiscal year basie (July 1-June 30). Data prior to 1972/73 pertain to erstwhile East Pakistan fl These are original plan targets. IANNEXI Page 4 of 4 pages
BAIAC OY PAX0S. Si~NAL A0BI9ThZl AD OT (amounts 95 .ilitoa of L.S. dollar, at ctareent pricas)
Astu.l torimaced Proi-ted A-eema Annoal G.owth Rate 1969170 1972/73 1973/74 1974/75 1975/56 d6/77 19/7 1974 - 1978
SUHl9ROYBALANCE OF PAYIMENTS 5.a (intl. 9FS) 515 369 339 358 381 400 423 Espo-te _7.4 i99S nL. AS-639 -747 -958 -1.402 -1.290 -937 -1.274 917 -849 8.2 Reaurce (RlaC1 NPS() -124 -379 -619 _1,044 -90
Intere.t (net) Investmlent InCOme I 1 Direct - Worker,' Remitttnce I 45 10 7 1 25 15 Current Tran_fer, (_et) I _ _ 6-.2 Balance. en Current AccountS .. -T33 -41___098371 _-934
Private Di-ect Investment 236 258 340 13.6 Offictul Cepit.l Grant, , 482 204 397
Public 05LT Lo.ns 476 16.0 Di.burs-.ent. 76 297 527 578 314 -78 -31 -Re.p.ymet. _. -10 -25 -2} 500 293 445 13.3 Net Diabhreene- t , 76 287 502
Other 9< Loans Dieburenent -Depsyleenta . NOt Dishbrneesute 122 33 91 C.pital Trn-actions n. i -205 78 334 -72 -32 Actu.l Estimated Chbsne to Net Reserves ( -- increase) , -20 40 -196 50 213 285 317 1971/72 1972/73 1974/75 1975/76 1976/77 Gres, Reserves (end period)- : 107 67 263
GRANTAND LOAN CM0MITMENTS DEBT AND DEBT SERVICE Official Gr-nts 6 Gra-t-Likb 514 150 368 390 2,245 Public Debt Out. 6 Dibur.ed 36 187 999 1,909
Internet on Public Dtbt - - 10 20 26 Public M6LT L-o _ 25 67 21 - - - - onpym t cc Public Debt IBND 47 187 Tutnl Public Debt Service - - 35 87 1DA 69 74 130 22 Other Debt Seroice (set) ,, Other Multilateral 11 17 87 Total Debt Service (net) Gover-eents 204 329 678 332 - Suppliers 55 47 17 Burden on Erport eningn (I) Pin ncial Institotios.. - - - 9 Burds Public Debt Service 9.8 22.9 11.8 Public Lt-u ne. i -_ Debt Servtce_. Tct.1 Public M4LT Lo.cs , 339 467 932 550 Ttal TDS4-Di-et Iuve.t.In.. Antu4i D nbt GiuM .andina s Jen. 30, 1976 of Public Debt EXTERNALDEST iLsburned Only Percent Avera-e Tereu World B-nk - sR ._. - 3.0 2.3 2.0 1.4 380 21.0 Iint. e X Prior Yet W6DO IDA 6.7 1.2 1.4 A=ort. on I Prio Y-nr DO6D ,, 5.7 Otbhr Mcltiluter-l 25 69.1 Goorne nts 1,250 90 5.0 1BRD Debt Out. &Diebresed Supplier, 5.5 3.0 2.4 0.5 " ,5 2 Public Debt 04D - - Pinesciul Inetitotions 9 a 2 Public Debt S-rvice - - - 1.8 7.4 Bonds _ - Public Debts -ni. IDA Debt Ot. 6 DStbu.rud Total Public MIT Debt 1,809 100.0 ,of Public Debt 060 - 9.6 25.5 21.0 27.7 s 2 Public De1bt Seric - - 3.1 2.5 6.4 Othor MSLT Debtu Sh-ot-Ter= Debt (diub. only)
, not upplicoble e ntaft estioate not ovailuble - nil or cegligible not available sep.r.tely bht -- Ieee thnn half the smallest included in totul unlt eho-D
May 1977 ANNEX II Page 1 of 10
BANGLADESH
STATUS OF BANK GROUP OPERATIONS
As of April 30, 1977
A. IDA Credits to Bangladesh
US$ Million net of Credit Exchange Adjustment Number Year Purpose Amount Undisbursed (net of cancellations)
Five Credits Fully Disbursed 206.4 -
339 1972 Cyclone Area Reconstruction (replaces Credit No. 228-PAK of 1971) 25.0 9.4 340 1972 Chandpur Irrigation II (replaces Credit No. 184 of 1970) 13.0 5.8 341 1972 Tubewells (replaces Credit No. 208-PAK of 1970) 14.0 3.0 343 1972 Telecommunications (replaces part of Credit No. 145-PAK of 1969) 7.3 1.8 353 1973 Small-Scale Industry (replaces Credit No. 192-PAK of 1970) 3.0 0.3 367 1973 Chittagong Water Supply (replaces Credit No. 42-PAK of 1963) 7.0 1.1 368 1973 Dacca Water Supply and Sewage (replaces Credit No. 41-PAK of 1963) 13.2 1.2 381 1973 Foodgrain Storage (replaces Credit No. 83-PAK of 1966) 19.7 0.3 407 1973 Education (replaces Credit Nos. 49-PAK and 87-PAK of 1964 and 1966) 21.0 8.2 408 1973 Highways (replaces Credit No. 53-PAK of 1964) 25.0 14.2 409 1973 Technical Assistance 4.0 2.2 410 1973 Cereal Seeds 7.5 6.5 424 1973 Inland Water Transport Rehabilitation 8.7 2.8 487 1974 Second Telecommunications 20.0 19.2 527 1975 Ashuganj Fertilizer 33.0 26.9 533 1975 Population 15.0 13.8 542 1975 Barisal Irrigation 27.0 26.3 591 1975 Imports Program IV 100.0 6.4 605 1976 Karnafuli Irrigation 22.0 19.0 ANNEX II Page 2 of 10
BANGLADESH
STATUS OF BANK GROUP OPERATIONS
As of April 30, 1977
A. IDA Credits to Bangladesh (CONT'D) US$ Million Net of Credit Exchange Adjustment Number Year Purpose Amount Undisbursed
621 1976 Agricultural and Rural Training 12.0 11.9 622 1976 Technical Assistance II 7.5 7.4 631 1976 Rural Development 16.0 16.0 632 1976 Bangladesh Shilpa Bank 25.0 25.0 676 1977 Imports Program V 50.0 49.5 SUBTOTAL 702.3 278.2 Principal Repayment 0.4 Effective Credits held by Association 701.9
B. IBRD Loans to Bangladesh
1087 1975 Consolidation Loan 54.9 0
TOTAL 756.8 278.7 ANNEX II Page 3 of 10
C. PROJECTS IN EXECUTION"
Cr. No. 339 Cyclone Area Reconstruction Project: US$25.0 Million Credit of October 18, 1972; Effective Date: January 17, 1973; Closing Date: June 30, 1978
Project performance has improved and although the project is still 2-1/2 years behind schedule, it is no longer falling further behind. After a pause while the shelter design was reevaluated, construction of cyclone shelters is moving ahead. Arrangements for supervision of shelter construc- tion still need to be strengthened. Four of the five primary roads are now finished withi the fifth road, scheduled for completion in 1978. The IDA fi- nanced portion of the feeder road program is nearing completion. Construc- tion of towers for the telecommunications subproject is behind schedule but this subproject should be completed by December 1977. The fisheries sub- project, including distribution of boats to groups of local fishermen has been completed. All work on the repair or new construction of inland water transport terminals is expected to be completed by within a few months.
Cr. No. 340 Chandpur Irrigation II Project: US$13.0 Million Credit of October 18, 1972; Effective Date: January 17, 1973; Closing Date: December 31, 1977
The Project is about 30 months behind schedule due to major flooding, work stoppages caused by 100% increase in construction labor costs, shortages of cement, fuel, and inoperable construction equipment, ineffective management, delays in provision of local funds and general inflation. While problems re- main, substantial progress has been made recently both in physical construction and agricultural extension. One regulator is now operational with the second scheduled to be operating by the end of June. Utilization of the irrigation works will be delayed due to land acquisition problems (now resolved) which interferred with work on irrigation channels. Preparation of proposals from the Covernrment for recovery of irrigation water charges is seriously behind schedule.
1/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered, and the action being taken to remedy them. They should be read in this sense, and with the under- standing that they not purport to present a balanced evaluation of strengths and weaknesses in project execution. ANNEX II Page 4 of 10
Cr. No. 341 Tubewells Project; US$14.0 Million Credit of November 6, 1972; Effective Date: January 13, 1973; Closing Date: June 30, 1977
Because of a slow start, project implementation is about 18 months behind schedule. Completion of the Project is expected within a year. Ninety percent of the wells under contract have now been drilled, but it was found that at least a sixth did not meet standards of verticality. Contractors have accepted liability and are rectifying the situation. Meanwhile, BADC has decided to recontract for the 285 wells not yet drilled. Pumphouse construc- tion and engine/pump installation is now proceeding satisfactorily. The agricultural development component of the project, also behind schedule, is expected to be incorporated into a proposed Extension and Research Project under consideration for financing this calendar year, in order to avoid dup- lication or conflict between the two projects.
Cr. No. 343 Telecommunications Project; US$7.3 Million Credit of November 15, 1972; Effective Date: January 17, 1973; Closing Date: June 30, 1978
The Project was originally financed as part of Credit No. 145-PAK of 1970, and goods valued at US$2.2 million had been received prior to sus- pension of disbursements. Three of the four microwave systems are expected to be commissioned by June 1977, two years behind schedule. The contract for the fourth microwave system (which substitutes the coaxial cable system in the original project) has been awarded together with contract for similar systems under Credit 487-BD. This system is expected to be commissioned by June 1978. The Closing Date has been extended from December 31, 1975 to June 30, 1978.
Cr. No. 353 Small-Scale Industry Project; US$3.0 Million Credit of January 19, 1973: Effective Date: May 14, 1973; Closing Date: December 31, 1977
The Project is administered by the Bangladesh Small and Cottage Industries Corporation (BSCIC) and a consortium of commercial banks. Dis- bursements up to April 25, 1977 amount to approximately US$2.7 million. While the credit was fully committed by the end of 1974, agreements by suppliers to provide equipment were cancelled in a few cases and new sup- pliers had to be found. In early 1976, IDA therefore agreed to extend the closing date by nine months to allow for disbursements under outstanding letters of credit. To permit all credit funds to be disbursed, a further extension of the closing date, from March 31, 1977 to December 31, 1977 has just been made. An IDA mission visited Bangladesh in March 1977 to explore with Government ways and means for improving BSCIC activities, and to form a basis for a further operation involving BSCIC and commercial banks. ANNEX II Page 5 of 10
Cr. No. 367 Chittagong Water Supply Project; US$7.0 Million Credit of April 9, 1973; Effective Date: June 7, 1973 Closing Date: June 30, 1977
The Project was originally financed under IDA Credit No. 42-PAK of 1963. By December 1971, when disbursements were suspended, US$3.3 million had been disbursed. After two years of organizational and procurement dif- ficulties, progress in 1976 and 1977 to date has been satisfactory. The project is now expected to reach completion by September 1977, over 2 years behind the schedule established in 1973. Inspite of substantial rate increases and improvements in billings and collections, WASA's financial problems are still acute because of high operating costs and the large quantity of non- revenue water. Satisfactory progress has been made in most areas of an agreed action program to improve the financial situation, but no decision has yet been taken on how to deal with the Government agencies and municipali- ties arrears to Chittagong WASA or for payment for water supplied through public hydrants. Revenue requirements are expected to increase in FY78, because the project will be completed and the Authority must begin repaying the Government loans for the project. Therefore, a further increase in tariffs is expected to be required. IDA agreed in June 1976 to a second extension of the Closing Date to June 30, 1977 but informed the Government that consideration of a further extension beyond June 30, 1977 would be dependent upon further actions taken to make the Authority financially viable.
Cr. No. 368 Dacca Water and Sewerage Prolect; US$13.2 Million Credit of April 9, 1973; Effective Date: June 7, 1973, Closing Date: June 30, 1977
The Project was originally financed by IDA Credit No. 41-PAK of 1963. By December 1971, when disbursements were suspended, US$6.0 million had been disbursed. The work progressed slowly for two years due to orga- nizational and procurement difficulties but has been satisfactory in 1976 and 1977. The project is expected to be completed by December 1977, about 2-1/2 years behind the schedule established in 1973. However, the financial condition of the WASA remains very weak despite substantial rate increases and improvements in billings and collection. The situation is similar to that described for Chittagong under Credit 367-BD and IDA has informed the Govern- ment that consideration of a further-extension of the Closing Date beyond June 30, 1977 would be dependent upon further actions taken to make the Authority financially viable.
Cr. No. 381 Foodgrain Storage Project; US$19.7 Million Credit of May 18, 1973; Effective Date: July 17, 1973; Closing Date: September 30, 1977
The Project is also financed by credits from the Kingdom of Sweden totalling 30.0 million Kroner. The project was originally financed by US$19.2 million IDA Credit No. 83 of 1966 and a 25 million Kroner credit from the King- dom of Sweden. The project was almost completed at the time of Bangladesh's ANNEX II Page 6 of 10 independence, and 95% of the reactivated IDA and Swedish credits was to be used for repaying the previous credits. Substantial delays occurred in hiring consultants and in design and construction of ancilliary civil works. In addition there was serious deterioration in the silos mechanical equipment due to inadequate maintenance and management, under staffing in the Directorate of the Silos and delays in ordering spare parts. Since January 1976 however significant progress has been made in accordance with an action program agreed with IDA/SIDA, particularly in constructing ancillary civil works and staffing the project agency; one silo has been put back into operation, consulting serv- ices for a silo maintenance improvement program have been obtained and jetty rehabilitation started in February 1977. Therefore, the Association agreed to a third extension of the Closing Date to September 30, 1977, by which time the project is expected to be completed.
Cr. No. 407 Education Project; US$21.0 Million Credit of June 29, 1973; Effective Date: September 27, 1973; Closing Date: June 30, 1978
This project was originally financed by Credits 49-PAK and 98-PAK and by December 1971, when disbursements were suspended, US$7.7 million had been disbursed. Progress on the Agricultural University portion of the proj- ect is about 2 years behind schedule due to initial difficulties in reaching agreement with the consultant architects on a revised contract and shortages of building materials, and delays in the preparation of equipment lists and furniture designs. However, significant progress has been made beginning in late 1976. The academic buildings now under construction are expected to be completed by August 1977 and the remaining works by July 1979. The Uni- versity has taken steps to improve the relevance of its agricultural training and research programs to Bangladesh's practical problems in agricultural and rural development, but, further progress in this direction is needed. The technical education portion of the project is about 18 months behind schedule due to past delays, but is expected to be completed by December 1977. The graduates are facing severe problems of unemployment and a committee has been established to revise the curriculum needs revision to make it more relevant to job requirements.
Cr. Nio. 408 Highways Project; US$25.0 Mfillion of June 29, 1973; Effective Date: September 27, 1973; Closing Date: December 31, 1977
The project was originally financed by IDA Credit N4o. 53-PAK. By December 1971, when disbursements were suspended, US$3.62 million had been disbursed. Shortage of spare parts, administrative delays and deficiencies in some contractors performance have delayed certain elements of the project. Progress on construction of the Sitalakhya Bridge is improving and it is ex- pected to be completed in early 1978. The paving of the Feni bypass road is not likely to start before January 1978 due to delays on the part of the two out of three contractors in completing the earth works. Disbursements, which in the past have been slow, show signs of improvements. ANNEX II Page 7 of 10
Cr. No. 409 Technical Assistance Project; US$4.0 Million Credit of June 29, 1973; Effective Date: August 20, 1973; Closing Date: December 31, 1977
Contracts have been signed with consultants for thirteen sub- projects with an allocation from this Credit of about $3.6 million. Approval is expected shortly for a contract negotiated with consultants for one addi- tional subproject of about $0.3 million. Completed studies have played a key role in the preparation of projects for IDA financing including the Ashuganj Fertilizer Project, the Rural Development Project, and two other projects which are under consideration for FY77. Due to delays in initial commitment of credit funds, disbursements are 2 to 3 years behind initial estimates. The Closing Date for this Credit was extended by two years to December 31, 1977.
Cr. No. 410 Cereal Seeds Project; US$7.5 Million Credit of June 29, 1973; Effective Date: January 30, 1974; Closing Date: December 31, 1977
Although the project is about 20 months behind schedule,implemen- tation has improved considerably in recent months. Because of severe price escalation the percentage of IDA financing of local construction costs has been reduced. Orders for farm machinery and laboratory equipment have recently been placed, but contract negotiations with the lowest bidder for the seed processing plants have broken down and a proposal for simplification of plant design is currently under consideration. After substantial initial delays work is now proceeding well on improvements at the seed multiplication farms, and production of seed, especially wheat, is increasing as a result.
Cr. No. 424 Inland Water Transport Rehabilitation Project; US$8.7 Mlillion Credit of August 10, 1973, as amended by Amending Agreement of October 17, 1975; Original Credit Effective Date: September 27, 1973; Supplementary Credit Effective Date: Mlarch 19, 1976; Closing Date: June 30, 1978
The Amending Agreement of October 17, 1975 increased the amount of the credit from US$4.1 million to US$8.7 million to finance tlle new oil transfer system at Chittagong. Procurement of spare parts and equipment was slow initially but almost all funds for these purposes have now been committed. Regarding the repair of the Chittagong off-shore oil terminal, detailed inves- tigations indicated that the damage was more severe than previously believed. Consultants were appointed late in 1973 to study alternative technical solu- tions. An Amending Agreement modifying the project description in line with the consultants' recommendations, and providing a supplementary credit of US$4.6 million, was approved by the Executive Directors on September 16, 1975 and signed on October 17, 1975. Two used tankers have been procured and re- paired, and are being equipped for lighterage service at Chittagong. They are expected to be put into operation during July 1977. ANNEX II Page 8 of 10
Cr. No. 487 Second Telecommunications Project; US$20.0 Million Credit of June 26, 1974; Effective Date: July 23, 1974; Closing Date: June 30, 1979
The project is 18 months behind schedule due to delays in procurement and civil works. Thirty percent of the original target for the first two years has been achieved on the local telephone network. Work on the long-distance telephone network has yet to commence. A Telegraph and Telephone Board has been established, a year behind schedule. Consultants financed under the Credit are assisting the T&T Board in establishing a commercial accounting system and valuation of assets.
Cr. Nlo. 527 Ashuganj Fertilizer Project; US$33 Million Credit of February 11, 1975; Effective Date: December 19, 1975; Closing Date: December 31, 1982
The project is being cofinanced by Asian Development Bank, KfW, and the Governments of Iran, Switzerland, UK and US, providing a total of US$109 million equivalent in addition to the IDA credit. Site preparation work in- cluding the necessary dredging and filling was completed on schedule. How- ever, based on the soils analyses undertaken by two specialist consulting firms, further preparation of the site will be carried out to protect the plant against earthquake risks. Currently the project is about eighteen months behind schedule due primarily to the additional site preparation and initial slow progress in (a) placing orders for time-critical items and (b) planning for construction. Revised cost estimates are being finalized allow- ing for the additional site work and the delays.
Cr. No. 533 Population Project: US$15 21illion Credit of February 11, 1975; Effective Date: September 25, 1975; Closing Date: December 31, 1982
The project is being cofinanced by six co-lenders providing a total of about US$25 million equivalent in addition to the IDA credit. Notwithstand- ing the delay in declaring the Credit effective, the Government has made sub- stantial progress in project implementation. The organizational structure of the Population Control and Family Planning Division (body responsible for the population program) has been defined and its headquarters staff has been placed in position; field staff is being recruited with special incentive payments offered for some crucial personnel. The Population Program Officers, who are responsible for the population programs of five non-health ministries, have been trained abroad and have initiated schemes of their respective ministries. The Building, Planning and Design Unit of the Ministry of Health, with the assistance of consultants, has completed a master plan for the project's con- struction program. The Government is proceeding with the selection of required consultants and advisors for other parts of the project. Hlowever, because of institutional and coordination problems, the implementation of a few proj- ect components is some months behind schedule. ANNEX II Page 9 of 10
Cr. No. 542 Barisal Irrigation Project; US$27 Million of April 29, 1975; Effective Date: February 24, 1976; Closing Date: Decem- ber 31, 1980
The project is behind schedule due to delays in hiring project consultants and in assignment of Water Development staff members to the project and delays in land acquisition. The staffing position improved in March 1976 and field survey and design activities are now progressing. Prin- cipal field activities have been survey work, procurement of materials and housing and office construction. Two pilot areas have been developed which have been useful in testing the project concept and in identifying potential problems. Construction of irrigation channels has been delayed by problems of land acquisition.
Cr. No. 591 Fourth Imports Program; US$100 Million of November 25, 1975; Effective Date: December 29, 1975; Closing Date: September 30, 1977
Disbursements amounted to US$93.6 million as of April 30, 1977, and in addition letters of credit guaranteed by IDA amount to US$4.0 million. The remaining US$2.5 million represents letters of credit below $20,000 for which IDA guarantee have not been requested. All orders are expected to be received by the Closing Date. The requirements under the action programs for the jute and textiles industries have been met.
Cr. No. 605 Karnafuli Irrigation Project; US$22 Million of January 28, 1976; Effective Date: February 24, 1976; Closing Date: December 31, 1980
The project is behind schedule due to initial delays in hiring proj- ect consultants. The consultants for the irrigation portion of the project began work in September 1976, but their effectiveness is limited by delays in procurement of vehicles and equipment. Work is now underway to prepare con- struction contract documents and to facilitate equipment procurement. The fisheries component of the project made virtually no progress until recently. Key staff have now been appointed and a contract with a fisheries consulting firm has been negotiated, and is awaiting Government approval.
Cr. No. 621 Agricultural and Rural Training Project; US$12.0 Million of March 25, 1976; Effective Date: June 30, 1976; Closing Date: June 30, 1981
Progress on preparation for construction is about five months ahead of schedule. Most sites, with the exception of only three thana substations, have been selected and acquired. Progress has also been achieved in the prep- aration of sketch plans for project buildings and the Government has been working on revised, more economical plans for the Bogra Rural Development Academy. The inservice training program supported under project has been delayed due to delays in allocation of local funds. Delays are being exper- ienced in hiring consultants for the project. ANNEX II Page 10 of 10
Cr. No. 622 Second Technical Assistance Project; US$7.5 Million of April 8, 1976; Effective Date: April 14, 1976; Closing Date: June 30, 1980
Consultants are working on the first subproject authorized under this credit, a water development study of the Southwest region. The Bangladesh Bank has invited consultant proposals for a second subproject, an agricultural credit study. Initial work is underway on a third project involving feasibility of using jute fiber as a cotton substitute.
Cr. No. 631 Rural Development Project; US$16.0 million of May 20, 1976; Effective Date: August 3, 1976; Closing Date: December 31, 1981
The reorganization of pump groups into cooperatives under the Integrated Rural Development Program is being completed, and adequate progress has been achieved in rescheduling loans. As part of a nationwide effort to revitalize the extension system, modifications are being introduced to the project's agricultural extension system. Procurement under various project components, benchmark and fish pond surveys, land and draft animal registration are in progress. After some initial delays, the construction of feeder roads and thana buildings is proceeding on schedule.
Cr. No. 632 Bangladesh Shilpa Bank Project; US$25.0 million of Nav 20, 1976. Effective Date: N4ovember 8, 1976; Closing Date: June 30, 1981
As of April 30, 1977, IDA had authorized withdrawals from the Credit totalling $0.8 million. It is anticipated that the Credit will be fully committed by December 1978, the final authorization date, and that disbursements will be completed by the Closing Date.
Cr. No. 676 Fifth Imports Program; USb50 million of January 25, 1977 Effective Date: February 24, 1977; Closing Date: December 31, 1973
As of April 30, 1977, disbursements were USSC.5 million. In addi- tion about US$33 million of letters of credit have been issued. ANNEX III Page I
BANGLADESH
MUHURI IRRIGATION PROJECT
SUPPLEMENTARY PROJECT DATA SHEET
Section I: Timetable of Key Events
(a) Time taken to prepare project:
About 18 months (excluding work started prior to Bangladesh independence)
(b) Preparation by:
Government with assistance of consultants financed under Credits S-10 PAK, and S-14 and 409-BD.
(c) Initial discussions between Bangladesh Government and IDA:
IDA mission to appraise Credit S-14, Mlay 1972
(d) First IDA mission:
Supervision Credit S-14, February, 1973
(e) Appraisal mission departure:
September, 1974
(f) Negotiations:
August, 1975 1/
(g) Follow-up mission:
February, 1977 1/
(h) Planned date of Effectiveness:
September, 1977
1/ Reasons for the hiatus between these activities are given in paragraph 30 of this report. ANNEX III Page 2
Section II: Special IDA Implementation Actions
This project is under the continuous supervision of the Resident Mission. The contract for the major civil works (the Feni Regulator) is being finalized with IDA assistance.
Section III: (a) Special Conditions of the IDA Credit
(1) Special conditions of credit effectiveness are:
(i) effectiveness of the IDA administered credit (paragraph 49);
(ii) appointment of the engineering consultants (paragraph 38);
(iii) the Water Board would have entered into a contract acceptable to IDA with a contractor who will construct the Feni Regulator (paragraph 33);
(iv) an initial contribution of Taka 3,000,000 to the project revolving fund would have been made (paragraph 40);
(2) The Project Director would prepare and submit to IDA on August 31 each year annual work programs and project cost estimates (paragraph 37);
(3) The Project Director would prepare detailed operation and maintenance procedure manuals within three years of credit signature (paragraph 38);
(4) Sufficient funds would be made available at all times to operate and maintain all project facilities at acceptable standards (paragraph 38);
(5) The Government would prepare plans to recover all costs for operation and maintenance and replacement of low- lift pumps and the operation and maitenance for civil works (paragraph 39);
(6) The Government would establish and, on the first of each month, replenish a project revolving fund to maintain a balance adequate to cover estimated expenditures for the following three months (paragraph 40);
(b) Special Conditions of the IDA Administered Credit
(1) A special condition of effectiveness of the IDA administered credit would be the effectiveness of the IDA credit (paragraph 49). 9 sb 912'01' 912-30' Rmcho d,.r BANGLADESH 'g-j W,od g., MUHURI IRRIGATION PROJECT
Debid.or PROJECT LOCATION
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91 Boy of Bengal (A (A 911,36 92-00' N