Document of The World Bank

FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No. 15823

PERFORMANCE AUDIT REPORT

Public Disclosure Authorized BANGLADESH

DRAINAGE AND FLOOD CONTROL II PROJECT (CREDIT 1184-BD)

June 27, 1996 Public Disclosure Authorized Public Disclosure Authorized

Operations Evaluation Department

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 Name of Currency: Taka (Tk)

Rate of Exchange: End of Year Appraisal (1980): USDI.00= Tk 16.3 Average (1981-88): USDI.00 = Tk 27.5 Completion (1989): USD1.00 = Tk 32.3

Abbreviations and Acronyms

Bank World Bank BWDB Bangladesh Water Development Board ERR Economic Rate of Return FAP Flood Action Plan FCD Flood Control and Drainage FCD/I Flood Control and Drainage, and Irrigation FDR Flood Damage Restoration Programme FFW Food-for-Work Programme HYV High Yielding Varieties I Irrigation IDA International Development Association ICR Implementation Completion Report I/O&M Improved Operations and Maintenance IRRI International Rice Research Institute O&M Operations and Maintenance OED Operations Evaluation Department PAR Performance Audit Report PCR Project Completion Report PIE Project Impact Evaluation PPAR Project Performance Audit Report PRA Participatory Rural Appraisal RRA Rapid Rural Appraisal SAR Staff Appraisal Report SDR Special Drawing Rights SRP Systems Rehabilitation Project STW Shallow Tubewell TA Technical Assistance

Fiscal Year Government of Bangladesh: July I to June 30

Weights And Measures Metric System

Borrower Government of Bangladesh FOR OFFICIAL USE ONLY The World Bank Washington, D.C. 20433 U.S.A.

Office of the Director-General Operations Evaluation

June 27, 1996

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Performance Audit Report on Bangladesh Drainage and Flood Control H Project (Credit 1184-BD)

Attached is the Performance Audit Report on Bangladesh, Drainage and Flood Control II project (DFC II), prepared by the Operations Evaluation Department. DFC 11 was supported by a credit for US$27 million equivalent approved in FY82. The credit was closed in FY 89, fully disbursed after two extensions of the closing date.

The objective of DFC II was to promote an increase in rice and other crop production by providing flood control and drainage at three widely dispersed sites, Chalan Beel, Satla Bagda and Hail Haor. At the first two, embankments would be built to eliminate flooding from the surrounding rivers, accompanied by improvements in gravity drainage through and out of the polders. At the third, several straight dikes would be built to direct floods away from dry and wet season crops. Other changes would include shifts to transplanted, high yielding rice varieties, less tolerant of deep flooding. Small gated inlets through the embankments would be provided at the first two sites to support dry season irrigation. Some damage to fisheries was anticipated at all sites, and for Hail Haor the project supported studies and subsequent investments to help maintain the fish populations.

Works at the Chalan Beel and Satla Bagda polders were completed behind schedule but generally in accordance with appraisal proposals. The completed embankments were challenged almost immediately by the exceptional floods of 1987 and 1988, which caused substantial damage to all structures and called for project and postproject repairs. The embankments at Chalan Beel were also subject to natural and deliberate breaches during lesser floods, a consequence of unexpected hydrologic pressures on the western margin. Works at Hail Haor were delayed and finally redesigned, again in response to changes in local hydrologic forces.

Agricultural impacts at the two polders were less than envisaged at appraisal but positive nonetheless. Falling rice prices depressed rate of return re-estimates everywhere, and these were further undermined at Chalan Beel by indirect costs imposed on inadequately protected nearby areas and to riverine fisheries. These costs exceeded expectations and offset the economic gains from crops. The cropping benefits may also be reversed if standards are not substantially improved to safeguard the new flood control assets. Cropping gains and fishery losses at Hail Haor were minimal, since the principal

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. 2 flood control structures were abandoned and the project financed by the credit resulted mostly in improved roads.

The outcome of DFC II is unsatisfactory, with negligible institutional development. Indirect costs have undermined the otherwise satisfactory outcome in agricultural production on the two major polders, without eliciting any significant remedial measures. Hail Haor further depresses the ratings. Sustainability is rated uncertain: dependent on very uncertain improvements in O&M. These ratings are in line with those in the Project Completion Report.

Lessons that can be drawn from this project include: (i) well designed flood control investments can have significant positive impacts on flood-sensitive crops in the wet season and, depending on the location, in protecting maturing dry season crops as well; (ii) in unstable water regimes such as those in Bangladesh, regional hydrological forces must be carefully taken into account when designing polders and dikes; (iii) fishery losses to polder emplacement can be substantial in relation to agricultural benefits, and remedial measures must enter the project design and be enforced; and (iv) the tendency to ignore fanner organizations in flood control operations, as distinct from irrigation operations, must be reversed. The project demonstrates how the absence of participatory O&M threatens the sustainability of all project works.

Attachment FOR OFFICIAL USE ONLY Contents

Preface ...... 3 Basic Data Sheets ...... 5 Evaluation Summary...... 7

1. Introduction and Background A . Introduction ...... 13 B. Flood Control and Drainage ...... 13 C . A udit of D FC I ...... 15

2. Project Objectives and Preparation A . Objectives ...... 16 B. Preparation ...... 16

3. Project Im plem entation ...... 19

4. Operation and Maintenance ...... 23

5. Outcome A . General Rem arks...... 27 B. Chalan Bee ...... 28 C. Satla Bagda...... 30 D. Hail Haor...... 33 E. Overall Rate of Return ...... 34

6. Findings and Lessons A. Findings 1. Im pact on Cropping...... 36 2. Regional Hydrology ...... 37 3. Fisheries...... 42 4. Embankments ...... 43 5. Influence of O&M on Project Impact...... 43 B. Lessons ...... 44

This report was prepared by Edward B. Rice (Task Manager), with support from S.A.M. Rafiquzzaman (Bank), Azharul Haq (IIMI), Jayantha Perera and Annemarie Brolsma (consultants), who audited the project in October 1994 and July 1995. Afi Zormelo and Megan Kimball provided administrative support. The report was issued by the Agriculture and Human Development Division (Roger Slade, Chief) of the Operations Evaluation Department (Francisco Aguirre-Sacasa, Director).

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. Annees

1. DFC II Infr tructr W orks ...... 47 2. Field Report on Chalan Beel and Satla Bagda...... 49 3. Governments Comments on the Draft PAR A. M inistry of W ater Resources...... 53 B. Ministry of Planning ...... 57 Maps

I. Bangladesh: Subproject Sites (IBRD 27713)...... end 2. Chalan Beel Subproject (IBRD 27604)...... end 3. Satla Bagda Subproject (IBRD 27605)...... end 4. Hail Haor Subproject (IBRD 27606)...... end 5. Hail Haor Subproject, Regional Perspectives...... 35 6. Chalan Beel, the Green River...... 39 3

Preface

This is a Performance Audit Report (PAR) on the Drainage and Flood Control II Project, involving an IDA Credit in the amount of SDR 24 million. The credit was approved on October 27, 1981. It was closed, fully disbursed, on June 30, 1989 after two extensions of the Closing Date.

The PAR is based on the Project Completion Report (PCR) prepared by the Agriculture Operations Division of the then Asia Regional Office and submitted to the Board on September 23, 1991, Government's final evaluation reports, the Staff Appraisal Report (SAR), the President's Report, the Credit documents, a study of project files, and discussion with Bank staff. OED missions visited Bangladesh in October 1994 and July 1995 in connection with the audit of this project, and discussed the effectiveness of the Bank's assistance and project execution with the Bangladesh Water Development Board (BWDB) and other relevant agencies. BWDB's kind cooperation and valuable assistance in the preparation of this report is gratefully acknowledged.

The PCR provides an adequate account of the operation of the project and the performance of the Bank and project executing authorities. The economic analysis has been updated, and the subject of regional hydrologic regimes has been introduced based on subsequent work by consultant teams under the auspices of the government's Flood Action Plan.

Government's comments on the draft PAR are reflected in the text and also attached as Annex 3.

5

Basic Data Sheet

DRAINAGE AND FLOOD CONTROL II (CREDIT 11 84-BD)

Key Project Data Appraisal Actual or Actual as % of estimate current estimate appraisalestimate Total project costs(US$ m) 41.4 40.0 97 Loan amount(US$ m) 27.0 29.2 108 Cancellation 0.1 Economic rate of return (%) 23 Close to 10 43 Institutional performance Modest Follow-on Operation Several Two (FYs85,87)

Cumulative Estimated and Actual Disbursements 81/82 82/83 83/84 84/85 85/86 86/87 87/88 88/89 89/90 Total Appraisal estimate (US$M) 1.0 5.0 13.0 20.5 25.5 27.0 27.0 Actual (US$M) 1.4 2.1 3.9 6.9 16.8 19.8 27.7 29.2 29.2 Actual as% of appraisal 28 16 19 27 62 73 102 108 108

Date of final disbursement: December 29, 1989

Project Dates Planned Actual Preparation 6/80 Appraisal (1) 6/80 (2) 2/81 Negotiations 1/81 8/81 Board Date 3/81 10/27/81 Signing Date 01/08/82 Effectiveness 02/08/82 07/14/82 Completion 06/30/86 06/30/89 Closing date 06/30/87 06/30/89 6

Staff Inputs Task FY79 FY80 FY81 F782 F783 FY84 FY85 FY86 FY87 F788 FY89 FY90 Total LENP Preparation .4 4.4 2.8 .1 7.7 LENA Appraisal 3.7 50.9 6.4 61.0 LENN Negotiations 2.0 2.0 LOP Loan Preparation .1 1.6 6.1 7.8 SPN Supervision 4.0 16.3 19.2 17.5 10.7 12.5 1.4 1.1 .1 82.8 PCR PCR .7 .1 .8 PAD Project Admin. .1 .1 .4 .1 .2 .9

TOTAL .4 8.2 55.3 18.7 16.3 19.3 17.9 10.8 12.7 1.4 1.8 .2 163.0

Mission Data Mission Month/Year No. of Days in Specialization Performance Type of persons field Represented' Statusb problems'

Preparation 1979/80 BWDB assisted by foreign consultants

Appraisal - I Jun. 80 3 EC, IE, AG Appraisal - 2 Feb. 81 3 EC, IE, IE Appraisal -3 Apr. 81 3 EC, F Supervision - 1 Aug. 82 4 8 IE, IE, IE, AEC 2 F Supervision - 2 Jan. 83 2 RMBd IE, CTE 2 F Supervision - 3 June 83 1 6 AEC 1 Supervision - 4 Feb. 84 2 RMBd IE, IE 2 M,T Supervision - 5 May 84 2 7 AEC, AEC 3 M,T Interim Supervision Oct. 84 1 n.a AEC n.a n.a Supervision - 6 Jan. 85 5 11 IE, IE, IE, AEC, EC 2 M,T Supervision - 7 Oct. 85 3 6 AEC, AG, ACT 2 n.a Review Jan. 86 1 10 IE n.a n.a Supervision - 8 July 86 3 RMBd IE, IE, AG 2 n.a Supervision - 9 Oct. 86 n.a n.a n.a 2 n.a Supervision - 10 May 87 3 RMBd IE, AG, DSB 2 n.a Supervision - 11 July 88 n.a n.a n.a 2 n.a Supervision -12 Jan. 89 2 RMBd IE, DSB e Completion' May 90 3 10 IE, AG, EC

a. Specialization: Ec = Economist; IE = Irrigation Engineer; AG = Agriculturist; AEC Agricultural Economist; CTE = Contract Engineered; ATC = Accountant; DSB = Disbursement Officer; F = Fisheries Specialist b. Performance rating: I = Problem.... or minor problem; 2 = Moderate Problems; 3 = Major Problems c. Type of problems: F = Financial; M = Managerial; T = Technical. Types of problems were not recorded in supervision reports after January 1986 because of change in reporting format. d. Supervision by Resident Staff, number of days spent not recorded. e. No report available. f. FAO/CP. 7

Evaluation Summary

Introduction

1. OED audited this project in association with a regional impact study of irrigation and drainage projects in South and South East Asia. The other projects selected for the regional study were for gravity irrigation operations in Thailand, Myanmar and Vietnam. The Bangladesh project was included to provide a rough comparison of operation and maintenance (O&M) performance on flood control works with the more detailed assessment of O&M performance on irrigation works. The regional impact study reports have been prepared in tandem with this audit report.

2. The concern for flood control and drainage (FCD) operations in Bangladesh, vis A vis irrigation (I) operations, is dictated by the geographic conditions of this largely deltaic country. About 90 percent of the schemes built and managed by the Bangladesh Water Development Board (BWDB) are labeled FCD. The Bank has supported seven projects dedicated to FCD, all of them designed with low capital costs per protected hectare. The project under audit is the second in a series of four, out of the seven, aimed at one or a few medium-scale schemes.

3. In the aftermath of devastating floods in both 1987 and 1988, the world's aid donor community proposed that a plan for developing a better strategy to control and manage floods in Bangladesh be prepared. This became the Government of Bangladesh's Flood Action Plan (FAP), which commenced its work in 1990. It comprises twenty-six separate studies, five of which have particular relevance to this audit. FAP-2, 4 and 6 are regional studies dealing respectively with the Northwest, Southwest and Northeast regions of the country, where the three subproject sites are located. FAP- 12 and FAP- 13 deal with agricultural and O&M issues respectively, from the national perspective. For FAP- 12 the consultants selected 17 operating FCD and FCD/I schemes for field survey, from all regions of the country, including one of the three under audit (Chalan Beel). FAP-13 concentrated on the same schemes. All five reports (FAP-2, 4, 6, 12, and 13) provided useful background information for the audit, in addition to the detailed work on Chalan Beel.

Project Objectives and Preparation

4. The primary objective was to promote an increase in rice and other crop production. The objective was to be met by providing flood control and drainage to three subproject areas. These were Chalan Beel Polder D in the northwest (38,000 ha), Satla Bagda Polders 1, 2 and 3 in the southwest (21,000 ha), and an area referred to as Hail Haor (19,000 ha) surrounding the haor (a depression with permanent standing water) by that name in the northeast (Map 1). The areas would be empoldered by building embankments to eliminate or at least reduce flooding from the surrounding rivers, accompanied by improvements in gravity drainage through and out of the polders. The embankments were expected to (1) reduce direct flood damage to standing crops, (2) increase cropping intensities due to more land becoming available for double cropping during the wet (monsoon) and dry (winter) seasons, and (3) increase crop yields due to the introduction of improved varieties (with associated chemical inputs) that were less tolerant of floods and required better control of water levels. The emphasis everywhere was on the rice (paddy) crops: 8

Aus in the early wet (kharij) season, Aman in the main wet (kharij) season, and Boro in the dry (rabi) season. Varietal changes would include a shift from broadcast to transplanted Aus and Aman, and from local to high-yielding (HYV) Aus, Aman and Boro.

5. Although the investments were aimed mostly at FCD, small, gated irrigation inlets penetrating the embankments were included in the design for Satla Bagda, and added later for Chalan Beel. These works along with the improved control over early flooding were expected to accelerate the expansion of Boro and other rabi cropping. A fisheries study, and infrastructure investments for fisheries development, were also approved for Hail Haor. The Bank was concerned about the potential adverse effects of project embankments on fish populations and fishermen at all sites, but considered the threat at Hail Haor to be exceptional.

Implementation Experience

6. Chalan Beel and Satla Bagda were completed generally in accordance with appraisal proposals, after substantial delays. With the exception of peaty soils used for construction of part of the embankment at Satla Bagda, Bank supervision staff generally reported reasonably good quality for all works and structures, especially the main regulators. The fact that the western embankment at Chalan Beel held against the 1987 and 1988 floods, with only two natural breaches, is cited in evidence. At both sites the number of drainage structures in the embankments proved inadequate and had to be increased.

7. The major obstacle to timely completion and operation at Chalan Beel, apart from delays in land acquisition, was the practice of unauthorized cuts of the new embankment. The pattern that developed soon after the embankments were finished in 1986 was for "outsiders" to break through the wall on the western side of Polder D, in order to reduce flood levels in the Sib River, and for "insiders" to cut roadways inside the polder one after the other until finally breaking through the dike on the eastern side of Polder D. This action allowed the flood waters to sweep across the polder along an west-east corridor from the Sib to exit into the Fakirni River. These hydrological pressures were not anticipated in any of the feasibility reports.

8. The Hail Haor subproject was changed appreciably from appraisal proposals, and suffered even longer delays. The major factor interrupting work, and leading eventually to substantial redesign, downgrading of project works, and reallocation of funds, was the removal of the "North Flood Embankment" from the flood control plans and the elimination of the one, large regulator. These had been the premier components of the Hail Haor plan from the time it was first drafted. What the Bank ultimately helped finance in the original project area is best described as a roads project. It included the North Flood Embankment, but this is now redundant as a flood control structure and serves simply as a highway.

9. The fisheries study at Hail Haor was completed four years later than planned and did not influence public expenditures on fisheries in that area. The subproject had a minimal impact on flood control, and no effect on fisheries.

10. In short, implementation achieved the project's major targets with varying levels of success, viz: (1) nearly full protection of the three Satla Bagda Polders from river flooding, apart from the two exceptional years; (2) partial protection of Chalan Beel Polder D, except where natural breaches and unauthorized cuts occurred in response to unanticipated water pressure; (3) flood control works of different alignment and substantially smaller import than planned within 9 the Hail Haor area, reinforced by a more effective dike that had not been contemplated at appraisal, outside the project area at the immediate source of the floods; (4) shortfalls in drainage work everywhere; (5) good roads leading to the project sites and along and within the embankments; (6) a profusion of minor irrigation structures so far of modest use; and (7) an ineffectual fisheries study.

11. In 1985, in anticipation of savings from the Bank's Credit due mostly to changes in the rate of exchange of the Taka, the Bank agreed to reallocate SDR 4 million to support relief work on other schemes damaged by flooding in 1984. Subsequent reallocations against damage from floods in each of the next four years, and a cyclone in 1985, brought total reallocations to US$12.1 million, or 30 percent of the Credit.

Operation and Maintenance

12. For over a decade the Bank has pressed government and BWDB to adjust its priorities and expand its budget for operation and maintenance on all FCD/I schemes. The ongoing BWDB Systems Rehabilitation Project (SRP), approved in 1990, is a response to the Bank's concern. But it has not performed as expected. FCD projects are at a disadvantage to irrigation projects in O&M in two respects. First, BWDB budget allocations to O&M for FCD schemes are significantly smaller than to irrigation schemes, both by international standards and in proportion to BWDB's own assessments of requirements. The low budgets are reflected in the deterioration of structures and equipment almost as soon as they are installed. Second, whereas BWDB in the last decade has promoted farmer organization for participation in O&M on irrigation schemes, this activity has never been extended to FCD. Bangladesh distinguishes itself, in the set of countries selected by OED for the regional review of irrigation projects, by its relatively weak institutional framework for participatory action by benefiting farmers.

13. With a growing number of its own senior staff convinced that O&M must be upgraded, BWDB has substantially increased its commitments to O&M in recent years. Nevertheless, the response has been inadequate, and the Bank's confidence in BWDB's endorsement of SRP has been shaken. The three schemes of DFC II are not yet listed for rehabilitation. But unless there is a change in revealed preference at BWDB, and in the finance and planning ministries where overall budget priorities are set, maintenance practices are unlikely to improve sufficiently and the DFC II works will continue to deteriorate.

Outcome

14. Impacts of FCD projects are measured in the first instance by favorable changes in the onset, depth and duration of flooding and, as a consequence, changes in cropping systems and yields.

15. ChalanBeel. FAP-12 found that over most of the project area the objectives of delaying the onset and reducing normal depths of the flood had been achieved, though to a smaller extent than expected. It explained the shortfall from the quantitative targets established at appraisal partly by the unanticipated hydrological forces which kept a significant fraction of the cultivable area out of production in the monsoon season. The expectation of similar flash floods explained why farmers in that perilous corridor appeared to have voluntarily reducedcropped area and, hence, intensities at the time of FAP's field investigations in 1991. Nevertheless, because of 10 relatively low per-hectare investment costs, FAP calculated an ERR based exclusively on agricultural benefits within the polder of 26 percent. However, the overall rate of return to the Polder D investments is lower due to indirect costs to other interested parties. First, the FAP report discusses in detail the injury caused by the embankments to the capture riverine fisheries sector, losses in excess of those anticipated at appraisal and estimated at 40-60 percent of the traditional catch. Second, the report notes that the Project had major negative impacts outside the Project area, on conditions in adjacent areas which subsequently suffered higher flood levels. FAP did not attempt to calculate those indirect costs; neither has OED. For a global ERR that incorporates all gains and losses, OED settles on the rough statement "a maximum of 10 percent."

16. Satla Bagda. This audit supports the view that the most impressive increases have been in the Boro crop harvested in lower-lying fields that were formerly flooded and out of production all year. The impact of the embankment on Boro cropping appears to be partly attributable to project investments in irrigation inlets, despite the fact the majority of those installed are currently out of use. The functioning inlets provide control over twice-daily tidal flows into the lower lying areas suited to Boro. Control of river flooding has had a positive impact on wet season cropping as well, and encouraged the shift from broadcast to transplanted Aus and Aman predicted in the SAR. OED was unable to re-estimate an ERR for Satla Bagda from field data, as there is no survey study comparable to FAP's in Chalan Beel. Thus, the audit calculates the returns to a model of paddy cropping comparable to a conservative assessment of the Satla Bagda investment, yielding an ERR of 11 percent. This does not reflect indirect costs internal or external to the polder, and can also be considered a maximum.

17. There is no dispute that the embankment at Satla Bagda has provided better control over inundation levels. There is dispute about who exercises control and who receives the benefits. One of the problems at Satla Bagda, common throughout the delta, is that due to the flat topography small variations in surface water levels have a large effect throughout the polder, and the resulting positive and negative benefits of any change to an individual farm are very sensitive to its elevations. What farmers on the lower lands call a flood, or congested drainage, is what their neighbors on slightly higher ground need to adequately serve their crops. This problem is one of the reasons group action in what is ostensibly a single, small hydrological unit is so difficult to organize.

18. At Satla Bagda an outspoken advocate of social justice, a bishop resident in Dhaka who supervises a community of Protestant schools and a convent just inside the northern embankment, has frequently protested the indifference of officials and donors to the indirect costs brought by better flood control. Among his complaints are some unique to his part of the delta and some common to other parts of Bangladesh: (1) reduction in river transport; (2) loss of fertility; (3) polluting of the soil by chemicals; (4) increase in the height of the river beds; and (5) loss of river and flood fisheries. The validity of these claims notwithstanding, the position of government and the Bank, supported by the conclusions of FAP-4 (the study of the southwest region), is that the benefits of poldering in this part of the region offset the negative effects.

19. Hail Haor. The North Flood Embankment was never brought to completion as a dike providing full flood protection. The original project design was substituted by reconstruction and extension of embankments along three other rivers north of Hail Haor. These embankments provide protection for both Hail Haor and the plains between it and the three rivers. Internal dikes in the haor do delay the onset of floods to ensure a safe Boro harvest, but the area affected 11 is much less than projected for the original scheme. OED has not recomputed an ERR for Hail Haor. The fact that large landowners and laborers alike in the area (Moulvi Bazaar) have alternative sources of income and are disinclined to rabi cropping made the original assumptions about cropping impacts even more precarious.

20. Overall Rate ofReturn. Given the rough character of the data base described above, and the lack of information on many of the indirect costs, the audit does not provide a point re- estimate for the project's ERR. In any case it would only include 70 percent of project costs, because the audit did not review the uses and results of the US$12 million that were reallocated to flood damage repair throughout the country. With a weighting that reflects proportional representation in actual project costs (Chalan Beel - 47%, Satla Bagda - 45%, Hail Haor - 8%), an overall rate of return in the range of 5-10 percent seems defensible. Defensible, provided the assets can themselves be defended against inadequate O&M. The audit agrees with the PCR's rating for overall outcome of "unsatisfactory."

Sustainability

21. The improved cropping systems will be sustained as long as the embankments serve their purpose. Those works are threatened by the inadequate O&M budget and lack of organization of the farmers for self-help for maintaining FCD structures. Thus sustainability must be rated "uncertain," as it was by the PCR.

Findings and Lessons

* The growth in national food production will continue to depend on expansion of dry season farming based on shallow tube wells and low lift pumps. However the potential contributions of the Boro and monsoon crop-in response to FCD investments-are also important considering both the ample scope for increasing HYV coverage through reduction of flood depth, and the low cost of the investments. The project under review is not a good platform from which to make that case. Results at two of the three sites were well below expectations and probably unrepresentative. A full audit of the two other FCD projects now completed through the ICR stages is desirable. They offer a stronger base on which to propose a sustainable, low-cost FCD strategy for the Bank.

* The Bank should adjust FCD design to regional hydrological patterns. The project included two schemes, out of a total of three, whose designs were seriously compromised by hydrological forces outside the range of normal concerns at preparation and appraisal.

* In future FCD operations the Bank must insist on remedial action to help offset losses to the fisheries subsector. Site-specific studies may be necessary to identify appropriate responses. To the extent FAP achieves a shift in FCD strategy toward reducing and "living with," rather than deflecting, the flood, the pressure on riverine fisheries will diminish. But the breeding grounds inside the embankments will remain at risk. 12

* Government and BWDB's stubborn and slow response to the urgent need to radically improve O&M must be accelerated. They as well as the Bank should be alarmed at the continuing erosion of FCD assets as a result of poor maintenance. The decline in the prospects of accomplishing the primary objectives of SRP is particularly distressing. The O&M shortfall applies to irrigation as well as FCD, two lines of investment that the Bank should refuse to support until O&M (and particularly maintenance) is given the attention everyone agrees it requires. This means not only securing BWDB's commitment but also changing the culture and skill mix at BWDB so that the reforms can proceed. BWDB's professional staff needs a better balance of water management experts and civil engineers. The recent trial organizational reform establishing a separate field authority and staff for operations and routine maintenance on one sub-project is a step forward and must be consolidated. Introducing the necessary cultural and organizational reforms are among the main objectives of SRP, but BWDB must absorb them as its own.

* The effects of the failure to organize farmers to help plan, manage and maintain the FCD structures are self-evident. Farmers in the polders have no tradition of association at the community level on polder problems. Consequently, the introduction of participatory water management cannot appeal to traditional processes of problem solving. The "tragedy of the lowlands" is that FCD schemes contain both winners and losers, and constructing organizations that bring them together calls for skills in social engineering that BWDB does not possess. Those skills must be created, a lesson for both the Bank and BWDB. The TA team considers its pilot activities in local participation to be among its most important contributions. However, BWDB should not be expected to handle this job alone: other government departments, specialized rural development consultants, and NGOs with appropriate skills and concerns for polder communities should be brought on board. 13

1. Introduction and Background

A. Introduction

1.1 OED audited this project and its three subproject schemes in association with a regional impact study of irrigation and drainage projects in South and Southeast Asia. The emphasis of the regional study is on irrigation, on the performance of operation and maintenance (O&M) services in irrigation schemes, and on the influence of O&M on the sustainability of agro- economic impacts of irrigation projects. The other projects selected for the regional study were for gravity irrigation operations in Thailand, Myanmar and Vietnam. The Bangladesh project under audit was included to provide a rough comparison of O&M performance on flood control works with the more detailed assessment of O&M performance on irrigation works. The regional impact study has been prepared in tandem with this audit report.

B. Flood Control and Drainage

1.2 Bangladesh's 1971 war of independence from Pakistan gave the Bank a pause to reexamine its strategy for rural development in the future Bangladesh. The result was a nine volume Land and Water Resources Sector Study-Bangladesh, prepared by the then Special Projects Department and issued in 1972. 1 It was and remains a basic document influencing nearly all subsequent Bank operations. The Sector Study recommended that development attention shift from large-scale works for irrigation and full flood control to small-scale irrigation and lower cost flood measures. It recognized that the effectiveness of the existing portfolio either in controlling rivers or on crop production had been overstated, and that the urgency of the food crisis demanded direct interventions for quick responses in crop production. The fact that Bangladesh rests on one of the world's greatest, though untapped, rechargeable aquifers prompted the Sector Study to give highest priority to investments in "minor" irrigation works that would exploit that resource as well as surface waters. The Sector Study called for continued investments in flood control and drainage, but recommended these be limited to labor intensive operations in shallow flooded areas without large scale pumping devices, with low costs per hectare and with quick impact on cropping. Thus the profile of Bank investments in Bangladesh's rural sector in the 1970s shifted. Tubewell and low lift pumping projects in the pipeline were brought forward, large scale irrigation schemes were postponed indefinitely, and flood control and drainage operations were selected according to the low-cost/high-impact criteria.

1.3 The need for flood control and drainage (FCD) operations in Bangladesh, vis &vis irrigation (I) operations, is dictated by the geographic conditions of this largely deltaic country, at the confluence of two of the world's mightiest rivers (and a third of nearly equal import) in one of the wettest sections of the monsoon belt in Asia. Eighty percent of the cultivable area of the country is subject to flooding and drainage congestion. While some projects invest in both types

1. Asia Projects Department, Report No. PS-13. December 1, 1972. Includes: Volume la Sector Overview; Volume I Detailed Sector Review; Volume VIII The Flood Problem. 14 of operations (FCD/I) or mostly irrigation (I), about 90 percent of the schemes built and managed by the Bangladesh Water Development Board (BWDB) are labeled FCD.2

1.4 The Bank has supported seven projects dedicated to FCD since the Sector Study was issued, all of them approved since 1977 and designed for low costs per protected hectare. The project under audit is the second in a series of four, out of the seven, aimed at one or a few medium-scale schemes. The first two of these four projects were named Drainage and Flood Control (DFC). The title was reversed for the next two projects to match the common acronym FCD. DFC I was audited in 1990;3 DFC II is the subject of this audit. FCD III and IV were completed in 1994 and draft Implementation Completion Reviews (ICR) have been submitted to the Bank by FAO/CP .4 Each of the three other FCD projects was aimed at construction or rehabilitation of all or parts of a large number of small-scale schemes. 5 In addition, the Bank approved three Flood Rehabilitation Projects in the period 1985-1989, a span of years covering three major floods and damage to most functioning schemes as well as those under construction. Finally, in 1990 the Bank approved a new-style project emphasizing improved O&M performance on all BWDB schemes, FCD, FCD/I and I alone.6

1.5 In the aftermath of devastating floods in 1987 and 1988, the world's aid donor community proposed that a plan for developing a better strategy to control and manage floods in Bangladesh be drawn. This became the Flood Action Plan (FAP), inaugurated in 1990. It comprises twenty six separate studies. By 1995 most of the reports had been issued. Five of them have particular relevance for this audit. FAP-2, 4 and 6 are regional studies dealing respectively with the Northwest, Southwest and Northeast regions of the country, where the three subproject sites are located. FAP- 12 and FAP- 13 deal with agricultural and O&M issues respectively, from the national perspective. The last two were carried out by the same consortium of British and Bangladesh consulting firms, financed by the United Kingdom Overseas Development Agency and the Japan International Cooperation Agency. For FAP-12 the consultants selected 17 operating FCD and FCD/I schemes for field survey, from all regions of the country and including one of the three under audit (Chalan Beel Polder D). FAP-13 concentrated on the same schemes. All five sets of reports (FAP-2, 4, 6, 12, and 13) provide useful background information for the audit, in addition to the detailed work on Chalan Beel.8

2. Which nevertheless might include some minor irrigation works. 3. PPAR: Bangladesh Drainage and Flood Control Project (Credit 864-BD), Report No. 8805, June 29, 1990. 4. Drainage and Flood Control Project (Credit 864), approved in FY79 for US$19.0 million. Third Flood Control and Drainage Project (Credit 1591), approved in FY85 for US$48.0 million. Fourth Flood Control and Drainage Project (Credit 1784), approved in FY87 for US$20.0 million. 5. Small Scale Drainage and Flood Control Project (Credit 955), approved in FY80 for US$25.0 million. Water Development Board Small Schemes (Credit 1467), approved in FY84 for US$41.5 million. Small Scale Flood Control, Drainage and Irrigation II (Credit 1870), approved in FY88 for US$81.5 million. 6. BWDB System Rehabilitation Project (Credit 2099), approved in FY90 for US$53.9 million. 7. FAP-2 Mott MacDonald International, and associates. North West Regional Study. In particular: Draft Final Report Volume 2, Regional Data & Planning Units, October 1992 The Regional Plan Final Report, January 1993 Final Report Annexes: General Comments by FPCO Supplementary Study Second Draft, December 1993. FAP-4 Sir Willian Halcrow & Partners Ltd., and associates. Southwest Area Water Resources Management Project. In particular: 15

1.6 The word flood has different meanings. Flooding in Bangladesh is normal and widespread, a consequence of the spring melt in the Himalayas and the annual monsoon. Depending upon the location, it is attributable to varying mixes of river spillover and local rainfall ("inundation" also refers to a mix of the two). In the delta, where one of the subproject sites is located (Satla Bagda), the annual flood leaves only human habitation, roadways and scattered other high ground above water for months. Social behavior and cropping patterns are adjusted to the flood. But in some years exceptional floods occur, due to either or both abnormal river stages or heavier than normal rainfall. When farmers talk of the "floods," they usually refer to these exceptional events. Most of the project works in DFC II were completed in 1986, just before two of the three subprojects sites were swamped by the two historic floods of the late 1980s.

C. Audit of DFC I

1.7 The Project Performance Audit Report (PAR) on the Drainage and Flood Control Project was issued in June 1990. The massive library of material from the FAP study program was not then available. Nevertheless, the 1990 PAR provided a full review of Government, Bank and other donor strategy for the water sector, leading up to and after approval and implementation of DFC I in 1985. The PAR is exceptionally rich in insights about the developing conceptual context for FCD interventions, and the strengths and weaknesses of alternative proposals. The importance of the 1972 Sector Study in the progression of ideas is emphasized. The PAR assesses the resurgence of interest in large-scale solutions to prevent flooding, in response to the 1987 and 1988 floods, and that led to FAP, against the enduring logic of the Sector Study, with its emphasis on food production rather than flood control (the devastation of the 1987 and 1988 floods notwithstanding). The PAR also challenges one of the basic assumptions of the DFC I Project Completion Report (PCR)9 -that increases in dry season crop production are attributable to FCD works and can be included in benefit streams for the analysis of rates of return. These and other issues highlighted in the 1990 PAR serve as useful reference points for this audit.

Final Report Executive Summary, August 1993 Final Report Volume I Main Report, August 1993. FAP-6 North West Hydraulics Consultants, and associates. Northeast Regional Water Management Plan. In particular: Final Report Main Report, June 1994. FAP-12 Hunting Technical Services Ltd., and associates. FCD/1 Agricultural Study. In particular: Methodology Report Main Volume, September 1991 Final Report Volume I Main Report, February 1992 Final Report Volume 2 RRA and PIE Results, February 1992 Final Report Volume 3 Appendices E-J, February 1992. FAP- 13 Hunting Technical Services Ltd., and associates. Operation and Maintenance Study. In particular: Final Report Volume I Main Report, March 1992 Final Report Volume 2 Case Studies, March 1992. 8. FAP-12 Hunting Technical Services Ltd., and associates. FCD/IAgricultural Study. Project Impact Evaluation of Chalan Beel Polder-D, February 1992. 9. The PCR is packaged in the same volume with the 1990 PAR. 16

2. Project Objectives and Preparation

A. Objectives

2.1 The primary objective was to promote an increase in rice and other crop production, consistent with food self-sufficiency and other goals of the Second Five Year Plan FY 198 1- 85.10 The objective was to be met by providing flood control and drainage to three subproject areas. These were Chalan Beel Polder D in the northwest, Satla Bagda Polders 1, 2 and 3 in the southwest, and an area referred to as Hail Haor surrounding the haor (a depression with permanent standing water) by that name in the northeast (Map 1). The areas were to be empoldered by building embankments to eliminate or reduce flooding from the surrounding rivers, accompanied by improvements in gravity drainage through and out of the polders. The embankments were expected to (1) reduce direct flood damage to standing crops, (2) increase cropping intensities due to more land becoming available for double cropping during the wet (monsoon) and dry (winter) seasons, and (3) increase crop yields due to the introduction of improved varieties (with associated chemical inputs) that were less tolerant of floods and required better control of water levels. These benefits to better water management were enhanced by improvements to transportation on the dike roadways and village tracks. The emphasis everywhere was on the rice crops: Aus in the early wet (kharij) season, Aman in the main wet (kharij) season, and Boro in the dry (rabi) season. Varietal changes would include a shift from broadcast to transplanted Aus and Aman, and from local to high-yielding (HYV) Aus, Aman and Boro.

2.2 The main aim was protection from monsoon flood and drainage congestion. But small, gated irrigationinlets penetrating the embankments were planned for Satla Bagda, and added later for Chalan Beel. These works, along with improved control over early flooding, were expected to aceJerate the expansion of Boro and other rabi crops. No inlets were planned for Hail Haor, though groundwater investigations were included in the project to determine the potential for irrigation around the haor by shallow tubewells.

B. Preparation

2.3 The project was prepared through the feasibility stage during the period 1978-80 by a Dutch consultant firm in collaboration with the Directorate of Planning of BWDB. Preliminary studies had been carried out at all three sites during the late 1960s, and updated prior to the Dutch consultancy. Preparation for each site required new engineering studies and field investigations, although the technology was conventional and full engineering design was not called for. The same firm had been recruited in 1976 to prepare the three subprojects covered by DFC I, and was to continue with the preparation of FCD III and IV. The consultant's feasibility reports for each of the DFC 11 sites included options for large scale pumping of drainage waters. These would have significaitly increased the effectiveness of drainage but at substantially higher costs. The consultants (and presumably BWDB's) preference for the pumping option is obvious from the text.

10. Published in May 1980 by the Planning Commission. 17

2.4 In each case the reports also provided for a substantial irrigation component. This was to support supplementary irrigation if required in the wet season, but was mainly intended for dry season cropping. For Chalan Beel, the consultant recommended the project finance 1,600 shallow tube wells (STW), but that installation be deferred for a second phase operation five years after start-up of the FCD work, arguing that groundwater resources had not yet been adequately mapped. For Satla Bagda, the consultant recommended that 450 inlets and other minor irrigation works to support gravity flow and lowlift pumping from rivers and drains be incorporated in the original schedule of works. For Hail Haor, the consultant proposed a single gravity irrigation scheme diverting water from a river where it entered at the southern head of the haor, to be constructed along with the FCD works. In fact, the first 1976 project proposal for the haor had been labeled an irrigation project.

2.5 The Bank considered the pumping and large scale irrigation options inconsistent with the new strategy for low cost interventions. A checklist of conditions applying to all FCD proposals had been agreed in the 1980s. Among others was the benchmark that FCD schemes costing more than US$500 per hectare protected should be rejected (and irrigation schemes above US$620 per hectare irrigated). Pumps for drainage were eliminated at all three sites, though the Bank allowed that the economics of pumping might improve in the future as farmer practices improved and/or rice prices rose, and the pumps could then be added. For Hail Haor the irrigation scheme was dropped, and the groundwater study substituted. For Chalan Beel the Bank did not agree to a second phase based on STW. Nor did it include in project plans irrigation inlets similar to those planned for Sata Bagda, though during project implementation it accepted government's proposal to add inlets to the program.

2.6 The project as approved had the following major components:

ChalanBeel. For an area of 38,000 ha, with a rural population of 307,000: construction of 134 km of embankment, drains and nine water control structures, and construction and improvement of 145 km of roads (Map 2).

Satla Bagda. For an area of 21,000 ha, with a rural population of 200,000: construction and improvement of 121 km of embankment (including rehabilitation of Polder 3, already developed under the Dutch-financed Early Implementation Project that started in 1976), drains and 450 irrigation inlets and construction of 72 km of new roads (Map 3).

Hail Haor For an area of 19,000 ha, with a rural population of 84,000: construction of 13 km of embankment, drains and one major water control structure (regulator), and improvement of 64 km of roads (Map 4). A fisheries study, and infrastructure investments for fisheries development, were also approved for Hail Haor. The Bank was concerned about potential adverse effects of project embankments on fish populations and fishermen at all sites, but considered the threat at Hail Haor to be exceptional.

2.7 In all cases the appraisal report emphasized the importance of strengthening agricultural extension work and expanding access to agricultural inputs, in order for the farmers to take full advantage of enhanced water control and irrigation facilities. The economic analysis is based on assumptions about varieties, yields and cropping systems that reflect improved performance of these services, as well as the provision of credit. Section 3.08 of the Development Credit Agreement required government to ensure that adequate credit and extension coverage would be provided. However, corresponding components were not financed by the project. The project 18 was to be implemented over five years, except for the fisheries study which was to report in the second year. 19

3. Project Implementation

3.1 Chalan Beel and Satla Bagda were completed generally in accordance with appraisal proposals, but after substantial delays. At both sites the numbers of drainage and/or irrigation structures in the embankment proved inadequate and had to be increased. Irrigation inlets were added at Chalan Beel. The absence of participation by farmers in project design, for example in siting the inlets, helps explain the underestimates and other revisions to design. The Hail Haor subproject was changed appreciably from appraisal proposals, and suffered even longer delays. These summary statements are elaborated below. Annex I compares original estimates with actual data on construction of major works.

3.2 Delays at the first two sites were largely attributed to (1) initial cuts in government funding during a government-wide budget-cutting ("pruning") exercise in 1982 and 1983, that interrupted the start-up years on project works,II and (2) the slow pace of land acquisition to clear the right of way for the embankments. Farmer resistance to involuntary loss of part of their holdings seems to have been less important in explaining the delay in land acquisition than untimely budget allocations for land purchase and bureaucratic inefficiency. Affected farmers initially allowed works to proceed on their property, but undervaluation of property prices dampened their good will. Only a few major cases of concerted resistance to construction of sections of the embankments at Chalan Beel and Satla Bagda are reported in project files. At Chalan Beel the episodes were usually associated with a growing perception by persons inside and outside the polder that the waters blocked by the embankments posed threats that had not been anticipated. At Satla Bagda the most notorious of the episodes seems to have been politically inspired. At Hail Haor land acquisition turned out to be unnecessary.

3.3 The only technical problem facing construction at the first two sites was the use of peaty soils at Satla Bagda for construction and compaction of part of the embankment. The widespread presence of the peat had been recognized, but the Bank had not anticipated that local BWDB supervisors and contract staff would permit its use in construction. This prompted debate about readjusting heights of the embankments, about projections of subsidence subsequent to construction, and about methods and timing of compaction. The Satla Bagda embankments and sluices were completed before the 1987 flood, but that year and the next the flood waters overtopped the dikes and did substantial damage. According to BWDB the peat had indeed made certain sections of the embankment vulnerable to the extraordinary flows of 1987, giving way under pressure from the rising flood or after the crest had been overtopped. With that exception, Bank supervision staff generally reported reasonably good quality for all works, especially the main regulators. The fact that the western embankment at Chalan Beel held against the floods, with only two natural breaches, is cited in evidence in an Evaluation Study.12 Polder technology had to confront the complexities of drainage in enclosed areas due to varying topography, but BWDB had long experience in building dikes and full engineering designs had not been required.

11. It resulted also in Hail Haor being dropped altogether from government's plans for a period, before being restored. 12. Bangladesh Engineering & Technological Services Ltd., and Associates. Undated (about 1990). EvaluationStudy ofDrainageand Flood Control II Project, Final Report Chalan Beet Polder "D" Subproject. Para 3.05, p. 111-2. 20

3.4 In 1985, in anticipation of savings from the Bank's Credit due mostly to changes in the rate of exchange of the Taka, the Bank agreed to reallocate SDR 4 million to support relief work on other schemes damaged by flooding in 1984. Subsequent reallocations against damage from floods in each of the next four years, and a cyclone in 1985, brought the total sum redirected to US$12.1 million, or 30 percent of the Credit. The 1988 flood was particularly destructive of recently completed works at Chalan Beel and Satla Bagda. Breaks through the dikes included not only natural breaches but unauthorized "public" cuts, where farmers outside and inside the polders broke through to try to relieve the threat to their homes and fields.

3.5 At Satla Bagda there were 79 natural breaches and public cuts in 1988 alone. Altogether 45 km of the 121 km total length of embankments around Polders 1, 2 and 3 required major repair (resectioning). Nine of the 12 regulators were damaged, and all 216 km of drains had to be re-excavated.

3.6 The major obstacle to timely completion at Chalan Beel, apart from delays in land acquisition, was the frequency of public cuts in the new embankment. The pattern that developed soon after the embankments were finished in 1986 was for "outsiders" to break through the wall on the western side of Polder D, in order to reduce flood levels in the Sib River, and for "insiders" to cut roadways inside the polder one after the other until finally breaking through the dike on the eastern side of Polder D. This action allowed the flood waters to sweep across the polder along a west-east corridor from the Sib to exit into the Fakirni River. These hydrological pressures had not been anticipated in any of the feasibility reports produced after 1968. The implications of this situation are discussed in the Findings section of this report (paras. 6.9-6.16).

3.7 Repair of 1987 and 1988 flood damage at Chalan Beel and Satia Bagda was partly covered by project funds. But the majority of the 1988 flood repairs, which took place after the project was completed, were financed by the government's Flood Damage Restoration Programme (FDR), supported in part by the Bank's Second and Third Flood Rehabilitation Credits, and the Food-For-Work Programme (FFW).

3.8 The problems of implementation at Hail Haor started with the government's economy drive in 1982 (para. 3.2 and footnote 11) and were prolonged in the early years by what Bank supervision considered poor on-site management by the BWDB staff at the local headquarters at Mouivi Bazaar. But the major factor interrupting work on this subproject, and leading eventually to substantial redesign, downgrading of project works, and reallocation of funds, was the removal of the "North Flood Embankment" from the flood control plans and the elimination of the regulator. These had been premier components of the Hail Haor plan since it was first drafted in 1967. The reasons for remodeling of the scheme are given in the Findingssection (paras. 6.18-6.21). The actual structures and those currently planned to complete the Hail Haor project are very different from those approved by the Bank in 1981. What the Bank ultimately helped finance in the original project area is best described as a roads project.13 As such, it includes the North Flood Embankment, which is now redundant as a flood control structure and

13. In terms of credit funds allocated, the project was always dominated by roads. The main flood control work, the north flood embankment, was to be completed by topping off an existing village road. Projected and actual costs of that work, mostly carried out in 1981/82, were only US$700,000, three percent of total costs of civil works (other than O&M). The regulator was another 18 percent. The several roads planned for the project took 73 percent. Nevertheless, the north flood embankment was the anchor for all other project flood control activity, in the original design. 21 serves simply as a road, a "submersible" dike on the right margin of the haor, which is almost always above water and used for pedestrian traffic, the "village road" extending from Moulvi Bazaar toward the haor, and the "main" road running along the western shore of the haor. None of the planned drainage works were undertaken before the Bank's project was completed.

3.9 BWDB is currently rehabilitating an older surface dike north of the haor that will protect a section of the cropping zone within the project area, and rehabilitating and extending the submersible dike (Map 4 shows the completed and ongoing roads and dikes). By 1995 BWDB also had funds available to finally start clearing three major stream beds that serve as drains crossing the area, and straightening some sections of the Gopla River. These works all post-date the Bank's project.

3.10 Although BWDB construction of the embankments at Chalan Beel and Satla Bagda was delayed, this was the sort of work that BWDB does best and Bank supervision reports noted reasonably good performance. Progress on other components was less satisfactory. Roads were given lower priority at these two sites, and drainage works at all three. In fact government had already slashed the roads components during the pruning exercise in 1982. The irrigation inlets at Satla Bagda and Chalan Beel were also given low priority, and left till the end of the project implementation period. As late as 1987 Bank supervisions reported that none of the proposed 450 inlets at Satla Bagda had been installed. When the OED mission visited Satla Bagda in 1995, 372 inlets had been installed but 172 were inactive and most of those inoperative (a comparative study of the working and non-working inlets would of course provide valuable lessons for future project design).

3.11 The construction of drains (clearing and widening of natural channels) at Satla Bagda and Hail Haor was not only deferred. Some were shifted from the project to the Food-For-Work Program. At Hail Haor the choice of FFW for project drainage was particularly unfortunate. Whereas at appraisal it was assumed that a large supply of cheap labor was available at all three sites, workers did not come forward in the Moulvi Bazaar area to work for FFW food wages until the last years of the project. Moulvi Bazaar has the distinction in Bangladesh of being the source of the first major exodus of nationals to the United Kingdom. Repatriated earnings have created a landed aristocracy, that is noted for its London connections and interests outside agriculture. This, plus employment for local labor on nearby tea plantations, helped to keep wages well above the value of the FFW daily wheat allotment. The result was that FFW was largely inoperative at Hail Haor, which explains why no drains had been cleared or expanded by the time the Credit was closed.

3.12 The fisheries study at Hail Haor was finally completed, four years later than planned and without any influence on public expenditures in the fisheries sector. The funds allocated in project documents for fisheries investments were never used for that purpose. Since the project up to that time had had only minimum impact on flood control, and no effect on the fisheries of the haor, the futility of the component is easily explained. The groundwater investigations at Hail Haor were also aborted, soon after they were belatedly begun in 1987. It was quickly evident that the groundwater table was too deep for commercial drilling for shallow tubewells.

3.13 Government's commitment to support the project with "adequate" extension and credit services was not respected. The Project Coordinating Committee was largely non-functional, BWDB made no effort to promote the use of these ancillary staffs, and no steps were taken by 22 the Department of Agricultural Extension or public and private banks to provide the subproject areas with extra extension staff or credit supplies.

3.14 Finally, the plans for project evaluation were largely frustrated. The Bank had not allocated any Credit funds for this central activity, which left it to government to carry out the plans to design, contract and finance a baseline ("benchmark") study and two, sequential post- completion field surveys. Requests to government for terms of reference for the baseline contract begin to appear in Bank supervision files in 1983. The delays that followed are mostly explained by the project financing plan, since the project did not provide funding and the Bank was not prepared to help fund the surveys from other Bank projects. The deadline for any effective baseline measures came and went. The TOR were first drafted in 1987 for an impact survey, and the contract was finally signed with a consortium of local consulting firms in 1989. The Bank should have called for postponement of their field activities, scheduled for 1989, at the time, since farm interviews after two years of extraordinary floods were very unlikely to produce useful information. Nevertheless, the field surveys were carried out, the firms did a good job in reporting from the data then available, and their three reports were used as the basis of the analysis of outcome in the Bank's Project Completion Report. A later chapter of this report concludes that that analysis must be set aside, despite the thoroughness of the consultant's presentation (para. 5.1).

3.15 In short, implementation achieved the major targets with varying levels of success: (1) nearly full protection of the three Satla Bagda Polders from river flooding, apart from the two exceptional years; (2) partial protection of Chalan Beel Polder D, except where natural breaches and public cuts occurred in response to unanticipated water pressure; (3) flood control works of different alignment and substantially smaller import than planned within the Hail Haor area, reinforced by a more effective dike that had not been contemplated at appraisal, outside the project area at the source of the floods; (4) shortfalls in drainage work everywhere; (5) good roads leading to the project sites and along and within the embankments; (6) a profusion of minor irrigation structures so far of limited use; and (7) an ineffectual fisheries study.

3.16 This audit did not investigate the uses of project funds for rehabilitation works outside the three subproject sites. Thus the works associated with only 70 percent of Credit disbursements have been evaluated. Also, expenditures of FDR and FFW funds on flood damage at project sites are not included in the project rate of return cost estimates. 23

4. Operation and Maintenance

4.1 O&M The Bank has pressed government and BWDB for over a decade to adjust its priorities and expand its budget for operation and maintenance (O&M) on all FCD/I schemes. The ongoing BWDB Systems Rehabilitation Project (SRP), approved in 1990, is a response to the Bank's concern. But it has not performed as expected. Sluggish action with "improved O&M" (I/O&M) activities under that project, and its rating since 1993 as a problem project, reflect BWDB's continuing inability to bring these services to proper standards. The PAR for DFC I devotes its final paragraphs to this issue, asking "why is it that in an area where all are in verbal agreement, so little progress has been made" (page 35). One has to recognize that climatic conditions in Bangladesh are conducive to rapid deterioration of all masonry structures, saddling the government with an extraordinary expense it can ill afford.

4.2 FCD projects are at a disadvantage to irrigation projects in O&M in two respects. First, BWDB budget allocations to O&M for FCD schemes are significantly smaller than to irrigation schemes, by international standards and in proportion to BWDB's own assessments of requirements. Second, whereas in the last decade BWDB has promoted farmer organization for participation in O&M on irrigation schemes, this activity has never been extended to FCD schemes. The difference in approaches to participation is mostly explained by the larger size and character of most FCD structures, which BWDB argues should be controlled by engineers. There is no local component of FCD works comparable to tertiary canals and ditches, which comprise the majority of the grid in irrigation schemes and are the usual point of entry for farmer involvement in O&M. Also, the consequences of system failure in flood embankments are greater than in irrigation distribution canals. BWDB cannot fully transfer responsibility for surveillance and timely repair of FCD works. Nevertheless, even when simple structures are included in an FCD scheme, such as the irrigation inlets and smaller drainage sluices at Chalan Beel and Satla Bagda, BWDB has made no effort to involve farmers either in planning or in maintenance.

4.3 The low budgets are reflected in the deterioration of structures and equipment almost as soon as they are installed. FAP-13 was responsible for O&M issues within the FAP framework, although the FAP- 12 field survey staff investigated O&M conditions on the ground. For Chalan Beel the report was alarming. It claimed that 40 percent of the embankment was already compromised by erosion, burrowing by animals and damage by humans. It found that almost all regulators were leaking, and that wood drop gates at the inlets were everywhere failing or missing-three years after project completion. It concluded:

"The Project is relatively recent and ought to be in good shape without requiring repairs of regulators or major works on the embankment. Of course the early years of the Project have been marked by exceptional floods, but much of the damage appears to be recurrent and not a result of high floods."1 4

4.4 Discussions with five groups of farmers in scattered locations at Satla Bagda during the audit missions suggested that about half of the irrigation inlets were clogged or otherwise

14. FAP-13 Operation and Maintenance Study, Final Report, Volume 2, Case Studies. Op. cit., p. 1-8. 24 inoperative: some because they had been badly sited, some because farmers could not agree how to use them, and some simply for lack of attention.

4.5 These findings at project sites are echoed in every other evaluation report. Three examples show the extent of the problem:

"it is difficult to be confident that the flood control works will be in adequate condition to withstand future floods and storms" (PCR on DFC II (all sites), page 6 (1991));

"however most of the structures are now in poor condition, the network of drainage channels has almost disappeared, and some of the access roads are severely damaged" (FAP-12, Final Report (Kolabashukhali Polder), Volume 2, page B5-3 (1992)).

"if the no-maintenance situation is allowed to continue, the polder would eventually become a flood plain again and the investment would have been in vain; (draft ICR on FCD IV Barnai Polder), Appendix 1, page 4 (1995);

4.6 Under pressure from the Bank, and with a growing number of its own senior staff convinced that O&M must be upgraded, BWDB has substantially increased its commitments to O&M in recent years. It is ahead of its obligations under SRP to finance O&M at increasing annual levels. It is also piloting, again under SRP, a reorganization of O&M field staff at the level of one subproject that would put operation and routine/preventative maintenance functions in one division and periodic maintenance/rehabilitation in another division, giving the first a separate budget and staff. This reform if extended can be expected to establish and stabilize a cadre of staff experienced in O&M, and provide them some immunity from pressures to redirect funds from ongoing maintenance to large reconstruction works. Staff training programs for O&M have also been expanded. To that extent, BWDB can claim it has responded to the Bank's exhortations. Reacting to the criticism about poor O&M performance in the PAR for DFC 1, the Bank's operational staff noted in 1990 that significant progress in securing government commitment had been made, as reflected "in the agreements reached under the recently- approved BWDB Systems Rehabilitation Project" (PAR, page 35). A year later the same staff, in its PCR for DFC II, would claim "the Bank is addressing this problem under the BWDB's Systems Rehabilitation Project" (PCR, page 6).

4.7 But the response has been inadequate, and the Bank's confidence in BWDB's endorsement of SRP unjustified. The funding, while ahead of schedule, is reckoned by the SRP Technical assistance team (TA) to be only 40 percent of BWDB's declared O&M expenditure requirements. Moreover, the components of SRP are progressing at different rates, with O&M activities again falling behind rehabilitation works. Variable progress gives strong signals about relative priorities, even in a project ostensibly dedicated to O&M. The attempts of the TA team to promote "the improved O&M" components above the construction ("rehabilitation") components have not succeeded. BWDB still claims that investments in rehabilitation take priority, that that was always the intention, that the Bank had acknowledged that preference despite efforts later by the TA team and Bank supervision collaborating on SRP to turn the priorities around. Efforts to secure BWDB's commitment at least to put I/O&M into practice on the schemes already rehabilitated by project funds, and to phase subsequent rehabilitation according to progress at each stage with institutional reform, have not been successful. SRP has brought experiences from which valuable lessons may be learned with regard to approaching the 25 institutionalization of O&M in Bangladesh; nevertheless SRP's design is less than optimal for that purpose.

4.8 This SRP activity does not affect the three schemes of DFC II, since they are not yet ready for rehabilitation. But unless there is a change in behavior at BWDB, and in the finance and planning ministries where overall budget priorities are set, maintenance practices are unlikely to improve sufficiently and the DFC II projects works will continue to deteriorate. Again quoting from FAP- 13 on Chalan Beel: "it is uncertain whether the Project will in future be able to function with the low level of revenue budget funding or whether it will be perpetually dependent on rehabilitation funds" (page 1-8). The PCR on DCF II makes the same point, emphatically.

4.9 O&M performance must improve. The problem for BWDB as well as the Bank is to get the right answer to the question posed by the 1990 PAR quoted in para. 4.1: "why is it ... so little progress has been made." The 1990 PAR concluded that part of the answer was found in the incentives of the BWDB bureaucracy, that create "an implicit preference for frequent rehabilitation and reconstruction over periodic and routine maintenance" (page 35).

4.10 Water Management Groups. Among the countries selected by OED for the regional review of irrigation projects (para. 1.1), Bangladesh has a relatively weak institutional framework for participatory action by benefiting farmers. There are Water User Groups in irrigation schemes, although they lag behind the other countries in cohesion and performance. There are no such formal associations for FCD, except at SRP and other select donor- or NGO- assisted sites. Reasons mentioned in the audit interviews are: 1) BWDB's indifference; 2) the physical characteristics of most FCD structures; and 3) the Bangladesh farmers' expectations of government largesse, raised in part by years of foreign aid. A fourth explanation is equally plausible. There has never been any concerted effort to group farmers around the FCD structures where transfer of O&M responsibility makes sense: around the sluice gates that let water out of the lowlands, and, in Chalan Beel and Satla Bagda in particular, the small irrigation inlets that the project also built in the walls of the embankment.

4.11 The farmers do assemble for action when compelled, but these gatherings are usually organized by elite landowners who need help in creating or defending private assets, or public assets under their control. If it is to strengthen an embankment under threat of collapse, then community organization is informal. For operation or repair of sluice gates and irrigation inlets, however, those who act together are the farmers who stand to gain, at the expense of others who do not. These are not community associations, where all farmers expect to benefit as in irrigation schemes. In FCD projects in lowlands and deltas prone to waterlogging, where different farmers have competing requirements for drainage and irrigation water, there are winners and losers as the result of almost any local action. The farmers in these polders have no experience of organizing to take equitable advantage of FCD. And neither BWDB nor local governments have experience in helping them. Thus, at Chalan Beel:

"People within the project appear to have cooperated towards the protection and maintenance of the embankment. Especially in medium and deeply flooded areas along the

15. SRP TA staff argue that it is preferable to organize farmers around the khals, the natural streams that serve as drains and which are usually deliberately blocked during the dry season to form a standing body of water for irrigation and fishing (and to provide buffalo wallows). 26

Sib river, people fear breaches and cuts in the embankment. There is evidence that people did respond to BWDB's call and have participated voluntarily in watching the vulnerable sections of embankment, and drop sand bags to protect the embankment during peak floods. However, this is on an ad hoc basis, rather than a systematic cooperative venture between BWDB and local organizations" (FAP-13, op. cit., page 1-8).

While:

"The Project has not succeeded in involving local people in the routine operation and maintenance of regulators, irrigation inlets or drainage outlets. There are no local committees for these structures and they are operated or not operated at the will of local influential persons, some of whom were reported to have taken home some removable components of the control structures" (page 1-5).

4.12 An OED team member's field report on the anarchic conditions governing the uses of the structures is attached to this report as Annex 2.

4.13 Other evidence of weak organizational structure at the farmers level is the failure of BWDB to consult with any of them at the design stage. The mis-siting of what some of the farmers interviewed called a "majority" of the irrigation inlets at both Chalan Beel (77 inlets built under the project) and Satla Bagda (347) could have been reduced had they been asked to describe in detail the local hydrological sub-systems. 27

5. Outcome

A. General Remarks

5.1 The success of FCD projects is measured in the first instance by favorable changes in the onset, depth and duration of flooding, and, as a consequence, changes in cropping systems and yields. The PCR provides inundation, agricultural and economic rate of return (ERR) data for the three sites. These are taken from the three EvaluationStudies carried out by consultants in 1989, financed by the project. The original objective was to produce a baseline early in the project period, against which future on-farm performance could be assessed. Delays in the contracting process, despite continued Bank pressure, resulted in a conversion of the study from an ex-ante to an ex-post analysis. The absence of a baseline is one reason to treat the study results with caution. The PCR makes that point. But the results should be set aside, because of two other methodological weaknesses which render all findings suspect. First, the measurements of flooding depth were recorded by the same consultant team not in 1989 but under another contract in 1985, before the embankments with their regulators had been completed to full 7 protection at either Chalan Beel or Satla Bagda.1 The fact that the Bank accepted the use of these premature records is not mentioned let alone explained in the PCR. Second, the field research was performed in mid-1989, and, because cropping systems in the two previous years had been compromised by exceptional floods, the consultants decided to ask farmers about practices and results in the 1986 season. This meant a three-year recall period, and information on a season which coincided with completion of project works.

5.2 The PCR data is not necessarily wrong, although footnotes in the PCR recognize inconsistencies in the tables as well as some of the methodological problems. It is unreliable. Nevertheless, the "results" show significant reductions in inundation levels and increases in cropping intensities at Chalan Beel and Satla Bagda, and practically no change in either indicator at Hail Haor. Reestimates of ERRs point in somewhat different directions, due to different cost and disbursement profiles, and questionable methodological practice. Thus, the ERRs recomputed for the PCR were 11 percent for Chalan Beel, 0 percent for Satla Bagda, 8 percent for Hail Haor and 7 percent for the project as a whole. The project was rated unsatisfactory at the time OED registered the PCR.

5.3 Neither BWDB nor any other agency reports on inundation data, so updates from the 1989 EvaluationStudy depend on farmer interviews. Cropping data is also almost impossible to collect from routine official reports, because in all cases the project areas spread over more than one primary administrative unit (thana)but do not encompass the whole of those units. Satisfactory data would have to be collected at the local "block" level (approximately the union), one step below the thana (approximately ten unions), a job the relevant agencies avoid.

16. See citation in Pars 12. The consultant, BETS, also produced Final Reports for the Satla Bagda and Hail Haor Subprojects. 17. The consultant states in the report that by 1985 full protection had been achieved at Chalan Beel (and Satla Bagda). Bank supervision mission reports show that was not so. See BETS, Final Report Chalan Beel Polder "D,". Op.cit., p.S-9. 28

5.4 The FAP-12 surveys in 1991 help fill the gap. They were divided into two groups: five schemes were studied with a statistically-valid sample survey, following a rapid rural (reconnaissance) survey; the other twelve schemes were studied only with a rapid survey (the FAP consultants distinguished "project impact evaluations" (PIE) and "rapid rural appraisals" (RRA)). The PIEs sought to measure and compare changes in (1) the area protected by the project embankments, (2) the adjoining areas impacted but not protected by those embankments, and (3) a nearby control area with similar characteristics but no embankments or impacts. They assessed flood characteristics as well as agro-economic and income trends. The five PIEs fortuitously (for this audit) included Chalan Beel. They included also Kolabashukhali, a polder in the southwest financed by the Bank under DFC I with cropping characteristics not unlike those at Satla Bagda and offering therefore corroborating evidence of probable impacts at the latter site. The OED field team followed up with "participatory rural appraisals" (PRA), of even shorter duration than the FAP RRAs, at both Chalan Beel and Satla Bagda, and the resulting information is used in the following paragraphs to complement that from the other sources. Special circumstances at Hail Haor render any ex-post measure of inundation levels, intensities and ERRs unnecessary, though an ERR should it be calculated would almost certainly be close to zero or negative, as explained below.

B. Chalan Beel

5.5 FAP-12 found that over most of the project area the objectives of delaying the onset and reducing normal depths of the flood had been achieved, though to a smaller extent than expected. FAP also identified a measurable though small increase in paddy production over the "without project" scenario, based on parameters from the control survey. It explained the shortfall from the quantitative targets established at appraisal partly by the unanticipated hydrological forces which keep a significant fraction of the cultivable area out of production in the monsoon season. This is explained by the breaches and cuts through the western embankment, and the consequent surge of waters eastward across a drainage corridor through the middle of the polder, causing severe damage to standing crops and homesteads in its path in the post-project period, especially in 1988 and 1989, as well as from the congested drainage further east. The expectation of similar flash floods explains why farmers in that perilous corridor appear to have voluntarily reduced cropped area and, hence, intensities at the time of FAP-12's field investigations in 1991. The addition of the experience of this unique and substantial group of losers, to the favorable or neutral experience of residents elsewhere in the polder, led FAP to claim modest agricultural impacts.

5.6 Nevertheless, because of relatively low per-hectare investment costs, FAP-12 calculated an ERR based exclusively on agricultural benefits within the polder of 26 percent. This was well above the PCR estimate (11 percent), but FAP disregarded that analysis, as OED does now, for the reasons mentioned in para. 5.1. OED's information on agricultural performance is consistent with FAP's, but it is based on informal interviews in 1994 and 1995 and cannot compare with the statistical integrity of the FAP RRA and PIE surveys, carried out in 1991 and reported in 1992. OED accepts the 26 percent estimate as a more reliable measure of agricultural impacts within the polder.

18. In addition to the reasons mentioned in para 5.1, the consultants Evaluation Study claimed some shifts in cropping patterns at Chalan Beel which are clearly incorrect (and which the PCR calls "inexplicable"-PCR page 26). 29

5.7 If the FAP-12 surveys had been rerun in 1995, they would have come under the influence of two offsetting factors that would push the 26 percent estimate both up and down. First, the impact within the polder would be better than that reported by FAP in 1992. The negative effects of the project on farmers living in the drainage corridor in the shadow of the public cuts on the western embankment have not been repeated every year. Most recently, 1993 and 1994 were years of relatively low rainfall and river levels, and cutting and natural breaching were not experienced (with the exception of one breach in 1993). When OED visited the polder in October 1994, these problems had receded in the memories of farmers and agency staff. The OED PRA surveys in July 1995 confirmed that the losses to this group of affected farmers were not repeated in the years immediately following the FAP-12 surveys. The implication is that the amount of lower land planted in the corridor in the monsoon season in more recent years would exceed the FAP estimate, yielding higher intensities and production.

5.8 Second, and working in the other direction, is a problem FAP-12 noted in 1991 that the agricultural situation in the control area at the time of its surveys was less favorable than normal, enhancing the apparent advantage of Polder D. In a "normal" year, FAP said it would have expected a lower advantage for Polder D, and consequently a lower ERR. In the face of these offsetting but unmeasured influences, OED sticks with the ERR as announced. The level is immaterial, because it has to be reduced by a substantial margin to incorporate negative external impacts. It should be recognized that estimating ERRs for FCD projects that limit flooding is much more difficult than for irrigation projects which supply water.

5.9 The overall rate of return to the Polder D investments is lowered due to indirect costs to other interested parties. First, the FAP-12 report discusses in detail the injury caused by the embankments to the riverine capture fisheries, losses in excess of those anticipated at appraisal and estimated at 40-60 percent of the traditional catch. Whereas FAP reckoned annual agricultural benefits per hectare at 2,402 Taka (US$68 in 1991 dollars), it reckoned annual indirect costs to fisheries at 1,488 Taka (US$43), canceling 62 percent of the former. FAP recalculated the ERR including the fisheries at two levels of estimated fisheries losses, resulting in net ERRs for Polder D investments of 14 percent (lower estimate of losses) and 9 percent (higher estimate).

5.10 Second, the report notes that: "outside the Project area the Project has had major negative impacts, on conditions in adjacent areas which suffer higher flood levels and downstream where the combination of the Chalan Beel D polder with other middle Atrai embankment systems leads to threats of catastrophic flooding....If any quantification of off-site impacts on non-Project areas could be made, these would further reduce the (ERR)."19 FAP-12 did not attempt to calculate those indirect costs; neither has OED. They do, however, further lower the ERR, perhaps appreciably. OED reckons the overall ERR does not exceed 10 percent.

5.11 That 10 percent figure is close to the PCR estimate of 11 percent. But the bases for those estimates are substantially different. The Evaluation Study and the PCR assign the major part of the benefits to an expansion of dry season cropping-in particular of HYV Boro, pulses, wheat and jute. These gains are attributed to the FCD project. In the PCR tables, the increase in the value of dry season production is 59 percent (over the "without project" level), while monsoon

19. FAP-12, Project Impact Evaluation of Chalan Beel-Polder D. Op. cit., p. S-6. 30 paddy production increases by only 21 percent. FAP (and OED) rejects the assumption of a significant causal relationship between the embankments and dry season cropping at Chalan Beel Polder D, as explained later (paras. 6.1ff). But FAP found and OED agrees that the increase in the value of wet season production attributable to the project is higher than stated in the PCR. The bulk of the estimated increment comes from increased yields of improved varieties, especially the switch from broadcast Aman to transplanted Aman. And, FAP indicates that incremental production of the by-products from paddy (straw and bran) is as important as the grain itself. OED accepts, as does FAP-12, that there has been a remarkable increase in dry season production, but largely independent of the project.

C. Satla Bagda

5.12 OED's conclusions about the changes in cropping patterns consequent to empoldering at Satla Bagda are closer to the PCR than they are for Chalan Beel. The SAR had anticipated a substantial increase (41 percent) in the incremental production of dry season crops related to the investments in irrigation inlets included in project design. In the SAR projections, the shift in the dry season was all registered in wheat and other non-rice rabi crops. No expansion of the Boro rice crop was expected. In fact, the SAR projected a slight decrease in total paddy cropped area, together with a more substantial increase in paddy yields and production. However, the EvaluationStudy concluded, the PCR accepted, and OED's PRA survey supports the view that the most impressive increases have been in the Boro21 crop harvested in lower-lying fields that were formerly flooded and out of production all year. Increases in land values confirm that finding. In two separate locations OED was told that the price of irrigable, arable land within the polder was about twice the value of unprotected land outside the polder, and that inside land suitable for Boro was four times higher. The impact of the embankment on Boro cropping is attributable to the control, brought by functioning inlets, over twice-daily tides that used to flow unimpeded over the lower lying areas suited to Boro. Better control of river flooding has had a positive impact on wet season cropping as well, and encouraged the shift from broadcast to transplanted Aus and Aman predicted in the SAR and observed by the Evaluation Study22 If all the inlets were brought into use, and if BWDB were successful in keeping the internal drains clear and relieving drainage congestion at the southern boundary (when outside river levels permit), the benefits would be commensurately higher.

5.13 OED was unable to reestimate an ERR for Satla Bagda from data available in the field, as there is no survey or other study comparable to FAP- 12's in Chalan Beel. The PCR estimate of 0 percent must be disregarded for the same reasons as for Chalan Beel. Another reason is that in Satla Bagda the Evaluation Study predated the expansion of area planted with the Boro crop. Instead of a direct measure, OED has calculated the returns to a model of paddy cropping comparable to the Satla Bagda investment. The per-hectare costs of the project, based on full costs reported by the PCR in 1991, were US$591. Assuming that it was invested over five years (the bulk of it was), and leads to increases in paddy yields of two tons per hectare over one

20. And declines by 37 percent vis a vis the SAR projections. The SAR did not anticipate any increase in Boro/rabi cropping independent of non-project investments in minor irrigation schemes. 21. Local terminology refers to the traditional Boro rices as Boro. and I lYV dry season as the IRRI" crop. 22. Early flooding prevents the young Aman seedlings from getting established. 23. Over two-thirds (71 percent) more than at Chalan Beel 31 quarter of the project area (and no increases in the rest), and that the new yield and production levels are maintained for 30 years (the SAR/PCR assumption), the ERR is 11 percent.24

5.14 That is a conservative model of actual experience. BWDB officials claim that the area now planted to Boro, that was not planted at all in the dry season prior to the embankment, already covers 3,000 ha (with only half the inlets operating)-that is about 15 percent of the 21,000 ha protected by the three polders. A new Boro HYV crop yields about four tons (the PCR estimates 4.2 tons), not two, and this can all be attributed to better water control where crops were not grown before. Further, area and yield increases of other paddy crops are not included. Nor are the non-paddy crops.

5.15 FAP-12's estimate of the ERR for the Kolabashukhali polder project northwest of Satla Bagda is 25 percent. The expansion of Boro cropping has been much less aggressive at this site, because of higher salinity levels in tidal flows as well as groundwater. The higher rate of return is attributable to the positive effects of the embankment on wet season cropping, an effect that farmers at Satla Bagda can expect over and above the dry season effect reflected in the model.

5.16 Cropping benefits, however, are not equally shared. At Satla Bagda (and throughout the delta) the flat topography causes small variations in surface water levels to have large effects. The average height above sea level at the northern boundary of the embankment is only 1.5 meters, and at the southern boundary seven miles away only 0.5 meters. With such a small gradient, the absence of effective drainage means water runs from higher fields and sits in lower ones that are usually nearby. This is one of the reasons why group action in what is ostensibly a single, small hydrological unit is so difficult to organize. What farmers on the lower lands call a flood, or congested drainage, is what their neighbors on slightly higher ground need to adequately serve their crops. One farmer told the OED mission that giving a farmer next to an inlet an inch of water meant the tailend farmers in that hydrologic unit would be flooded with seven undrainable inches. This is a reversal of the usual relationship between headenders and tailenders on irrigation canals, where the latter complain the former do not let enough water pass. The hydrology of the delta dictates another outcome. Disputes over when and how to control floods on these flat lands are compounded by fights in the depressions between farmers who want to retain deep water and those that do not, and between farmers, shrimp farmers and fishermen.

5.17 One possible explanation for the disuse of some of the project's irrigation inlets is that they are invariably subject to the control of the farmer elite at the inlet sites. BWDB staff are responsible for adjusting the gates, on the instructions, in theory, of the local community. Where the elite can control the choice absolutely, it is usually at the expense of others. Where they cannot so dictate, the outcome is most often to do nothing, which in the case of the inlets means they are left unattended with gates stuck open or missing. Winners and losers are determined by the position of their fields in relation to the gates. Some observers feel this outcome is the result of the lack of organization and collective action by the farmers, as well as the failure of BWDB to involve the farmers at the time the system was designed. Other observers see the outcome as the inevitable result of the delta's flat topography.

24. Based on PCR costs (page 14) and rice prices in 1990 (page 32). A farm gate economic price of US$167 was used, identical to the PCR price and related formally to the Bangkok rice price of US$250. The model is for one hectare, representing 21,000 ha at Satla Bagda. Investment costs are $118 per year for five years, and net returns of $84 per year thereafter for 30 years. The $84 figure results from: 2 tons X $167 (per ton) X .25 (of area). 32

5.18 At Satla Bagda an outspoken advocate of social justice, a bishop resident in Dhaka who supervises a model community of Protestant schools, service facilities and a convent just inside the northern embankment, has frequently protested the indifference of officials and donors to the negative benefits brought in along with better flood control. Among his complaints are some unique to his part of the delta and some common to other parts of Bangladesh:

* reduction in river transport,since the embankments obstruct traditional navigation passages to rivers outside the polder, and block also the annual flood that used to flush the natural channels of silt and water hyacinth inside the polder. Before the project roads were constructed, Satla Bagda was accessible only by boat, and it remains the only means to reach most communities. This is a rice exporting region, and the increase in transport and trans-shipment costs has had a substantial negative effect on the farmers' net profits;

* loss offertility provided by the sediments formerly deposited by the annual flood. FAP- 12 and other experts believe these losses have been exaggerated: that the nutrient value of the deposits was small. Farmers, and the bishop, insist otherwise;

* polluting ("poisoning") of the soil by agricultural chemicals: whose use has expanded along with the adoption of improved cropping systems, which formerly were flushed away by the flood, and which now have rendered many of the erstwhile pastures unavailable to goats and other livestock;

* increase in the level of the river beds adjoining the polders, due to the confinement of the rivers and the concentration of sediment deposits in these channels. The rising river bed levels imply the present embankments will eventually have to be raised, increasing costs as well as the potential damage from embankment collapse;

* loss of river and flood fisheries, common to all polders.

5.19 The bishop's criticism is directed not only at Satla Bagda but at two neighboring polders already built or proposed to be built on Satla Bagda's northern boundary. The Bank has sent missions to assess the extent of damage. There is no dispute about the reality of the indirect costs, especially the effects on river transport and fisheries. Remedial measures are planned, for example the provision of locks for boat passage at the embankment gates, and accelerated clearing of clogged natural streams and drains inside the polders.

5.20 The validity of these claims notwithstanding, the position of government and the Bank, supported by the conclusions of the FAP-4 team responsible for the study of the southwest region, was that the benefits of poldering at least in this part of the region offset the negative impacts. Thus, FAP-4 recommends construction of embankments for the second polder north of Satla Bagda as a priority investment, and for a large, proposed polder immediately south of Satla Bagda for the medium term. It should be noted that this northeasterly part of the southwest region lies in a zone of relatively high annual inundation, caused by overspilling from the Ganges, Padma and Lower Meghna rivers and heavy rainfall. Conclusions about favorable net benefits at and around Satla Bagda do not automatically apply to other polders outside the zone of high inundation. 33

D. Hail Haor

5.21 The North Flood Embankment was never brought to completion as a dike providing full flood protection. The original project design was substituted by reconstruction and extension of embankments along the Manu, Kushiara and Shaka Barok rivers north of Hail Haor (Map 5). These embankments provide protection for both Hail Haor and the plains between it and the three rivers. Some project funds were diverted to works along 11 kms of the Manu River, but it would be impossible to associate any part of the flood relief and improved cropping subsequently reported at Hail Haor uniquely to these diverted project funds. Moreover, the Evaluation Study found no significant increase in either average yields or double cropping in the project area up to 1989, a finding which it explains by noting that no significant flood control had yet been established and that "the farmers still do not consider their crops risk free at all." Not surprisingly, the consultants found none of the expected negative impacts on fisheries and fishermen, in fact they reported an increase in the number of fisherman households per village.

5.22 The major impact of subsequent works on the northern rivers has been to substantially reduce the threat of flash flooding in the early monsoon, and seasonal flooding as the monsoon progressed, to the farmlands, opening the way to an expansion of the area planted each year to broadcast and transplanted Aus and transplanted Aman rice. If the spring flooding from the north started as early as April, there could be damage to the standing Boro crop as well. The only zone within the Hail Haor project area to benefit directly and uniquely from project works is the approximately 750 hectares protected by the submersible dike built late in the project period along the east side of the haor. This shields the Boro land in the dike's shadow from early flooding from the haor itself, a movement of water independent of the main floods from the north. After project completion BWDB has extended the submersible dike to protect a total of 1,000 ha, compared with more than 19,000 hectares of cropland which were to have benefited directly from the original design. BWDB is currently reconstructing and extending another internal (not submersible) dike, north of the haor, which will protect Aus and Aman crops in between it and the North Flood Embankment from wave surges and other floods pushing north from the haor (and pushing water hyacinth along as well)-another pattern in the regional movement of surface water that is independent of the main direction of flooding from the north. Cropping will benefit from these works too, but they are not part of the Bank's project. All in all, very little improvement in flood control and cropping can be uniquely associated with the project, and the project works themselves have been overtaken by subsequent works (north of as well as in the basin) that make the main project-funded dike redundant.

5.23 OED has not recomputed an ERR for Hail Haor. The Evaluation Study estimate of 8 percent was generous: inexplicable, in view of that same study's findings about minimal agricultural progress. The consultants were unaware that the main source of project flood control as designed would be made redundant within three years. An evaluation of returns to recent investments along the Manu, Kushiara and Shaka Borak rivers might well have a favorable ERR. FAP- 12 conducted a PIE and an RRA on two other haors in the northeast, and calculated ERRs of 65 and 40 percent. The source of these positive benefits was control over the same combination of flash and seasonal flooding that prompted investments at Hail Haor. The other two projects were completed as planned; Hail Haor was misidentified and aborted. The fact that large landowners and laborers alike in the Moulvi Bazaar area have alternative sources of income and are disinclined to rabi cropping made the original assumptions about cropping gains very precarious. 34

E. Overall Rate of Return

5.24 Given the rough character of the data base described above, and the lack of information on many of the indirect costs, a point re-estimate for the project's ERR would not be very useful. In any case it would cover only 70 percent of project costs, because the audit has not reviewed the uses and results of the US$12 million that were reallocated to the repair of flood damage throughout the country

5.25 For Chalan Beel, a "maximum" of 10 percent was proposed, reflecting the major indirect costs. For Satla Bagda, a figure of 11 percent was given as a very conservative lower bound for agricultural effects without adjustment for the indirect costs. It is doubtful whether the costs to the fisheries, which were large enough at Chalan Beel to undermine the favorable agricultural results, were of the same importance at Satla Bagda. Nevertheless, the other costs listed in para. 5.18 have a substantial aggregate effect. For Hail Haor, no ERR for flood control was recomputed because the project was transformed into a roads project and had no appreciable impact on cropping. Given these weak assertions, and a weighting that proportional reflects representation in project costs (Chalan Beel-47%, Satla Bagda-45%, Hail Haor-8%), OED estimates that the overall rate of return is positive, and probably in the range between 5 and 10 percent. That range seems defensible, provided the assets can themselves be better defended against inadequate O&M.

5.26 The audit agrees with the PCR's ratings of "unsatisfactory" for the project outcome and "uncertain" for sustainability. The indirect costs discussed above have undermined the otherwise satisfactory outcome in agricultural production on the two major schemes, without eliciting any significant remedial measures. The fact that some of the Chalan Beel embankments will probably have to be remodeled, the failure of the Hail Haor scheme, and the poor performance on O&M contribute to these ratings. The PCR did not explicitly rate institutional development, which was "negligible". 35

Perspectives Map 5: Hail Haor Subproject, Regional

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6. Findings And Lessons

A. Findings

1. Impact on Cropping

6.1 The PAR on DFC I found no basis for appraisal expectations of a strong impact of flood control measures on dry season cropping. The audit of DFC II suggests the argument should be reformulated. For flood regimes atop the rechargeable aquifers in the northwest, such as at Chalan Beel and the main scheme financed by DFC 1, where early flooding does occasionally threaten the standing Boro crop, decisions about extending the area of Boro have been driven not by that menace but by the incentives provided by groundwater resources and tubewell technology. As long as that frontier is open, the spread of STW and Boro will go ahead with little regard for the early flood, the frequency of which is too low to materially affect farmer decisions to plant Boro. BWDB officers estimate the frequency of these recurring, prejudicial floods to be about one in five years. Average annual Boro yields of course would be commensurately reduced. Nevertheless FAP-2 and FAP-12 teams investigating the factors explaining expansion of dry season cropping at Chalan Beel both concluded that the effects of flood control were unimportant.

6.2 However, where the groundwater resource is fully exploited or inaccessible (Hail Haor), or where early flooding is periodic and predictable (Satla Bagda and Hail Haor), then flooding is the operative constraint on Boro production and flood control can induce an expansion of that crop. At Satla Bagda, for example, control over the tidal flows did allow farmers to plant more of the lower land to Boro, land that hitherto had not been planted in any season. That explains why many farmers told the OED team that the primary benefit of the embankment was the increase in Boro. At Hail Haor the same situation exists, though this progress postdates the project. Farmers with low lying land adjacent to the haor have been able to secure and expand their Boro crop now that the flood surges from the haor itself, and to a lesser extent from the northern rivers, have been blocked. In this respect the northeast presents a much different scenario than the northwest, since in the former flooding starts early enough to routinely threaten maturing Boro.

6.3 The PAR on DFC I was also unimpressed by the linkage between flood control measures and wet season cropping, implying that the stream of production benefits uniquely attributable to these measures was also unlikely to justify the cost of the works, at least at presentprices. The PAR allowed that these could change:

"Intensification of wet season agricultural production may eventually become critically important for food production in the future. This would be manifested by increasing farm gate prices for food production and increasing costs for dry season irrigated crop production. The incentives for wet season intensification would then be in place25 and the proponents of wet season expansion would then have something to work with."

25. PPAR, DFC 1, op.cit., page 34. 37

6.4 The audit of DFC II and other recent studies suggest that conclusion may also be overstated. At all three project sites one can identify increases in wet season production clearly attributable to water control, at Chalan Beel and Satla Bagda because of the project and at Hail Haor because of protection provided mostly by works started subsequent to the project. Increases in production have been due mostly to varietal changes, as farmers shifted from broadcast to transplanted rice and from local varieties to HYV. The SAR predicted an increase in wet season cropping intensities as well, but progress in this dimension has been unimpressive. To the extent farmers have shifted from broadcasting a mix of Aus and Aman, which is reported as double cropping, to a sequence of an early Aus followed by transplanted Aman, which is also double cropping, the yield increase is substantial even though the intensity remains the same (at 200 percent). The CPR estimates that at Chalan Beel the total yield had increased from 2.9 to 4.6 tons/ha.

6.5 Eleven of the 17 schemes reviewed by FAP-12 had overall ERRs above 10 percent, based mostly on wet season crop production, and another 4 fell short of that benchmark only because of adverse effects on fisheries. Chalan Beel is one of the four. Thus, considering only agricultural benefits, FAP- 12 found that all but two schemes could at least pass the 10 percent test, and over half gave economic returns above 20 percent. Those are impressive indicators of the positive impact of flood control works on wet season cropping, and reason enough to modify the conclusions of the previous PAR.

6.6 The PAR for DFC I correctly focuses on the expansion of minor irrigation for dry season cropping as the engine of Bangladesh's food drive in the recent past and near future. The Sector Study gave it priority too. But the Sector Study also called for expanded investments in low cost flood control for sites with favorable conditions. This audit supports that proposition. The economics of low cost flood control investments are promising. Provided costs can be kept close to or below $500 per protected hectare, the incremental production response required to justify the investment is easily available (para. 5.12).

6.7 A cluster audit of FCD III and IV would provide another opportunity to investigate the linkages between flood control and wet and dry season production. It would offer four case studies: two from the region around Chalan Beel Polder D and one each from the east and southwest.

2. Regional Hydrology

6.8 The extraordinary complexity and dynamics of Bangladesh's waterways, coupled with the absence in 1980 of adequate regional hydrological data, help explain the failure during preparation to design optimal schemes for Chalan Beel and Hail Haor. The problems that were to emerge at Chalan Beel are obvious only with hindsight; the problems at Hail Haor should have been anticipated. Satla Bagda was also designed without due regard for regional hydrological forces, but there the effects of inattention are less significant.

6.9 Chalan Beel. The hydraulic pressure exerted on the western embankment at Chalan Beel Polder D is attributable to the buildup of monsoon rains running eastward off the Barind Tract of hills into the Sib River. Whereas rainwater had previously been partly absorbed by gradual overspill eastward into the depressions within the D polder, the embankment forced it all onto the narrow band of unprotected lowlands to the west of the Sib that had previously never experienced flooding. The resulting pressure is relieved by public cuts by outsiders, particularly 38 on the middle reach of the western embankment near Tangrapara. Before the embankment was put in place, it would have been difficult to anticipate the points of maximum hydraulic pressure, the severity of the outsiders' reaction, or the chain effects by insiders along the drainage corridor across Polder D in response to the sudden and rapid inundation of supposedly protected areas. Senior BWDB staff who participated in the preparation of this subproject told OED that the extraordinary threat to the embankment itself was never considered.

6.10 The FAP-2 team concluded the best strategy was to abandon the struggle for "full flood control" along the section of the western embankment under maximum pressure. It recommended that BWDB accept the more modest benefits provided by "dwarf' dikes and "controlled flooding." The corridor would be open to flooding as the monsoon progressed. The rest of Polder D would be fully protected. The proposal would require construction of new internal dikes. But the events in Polder D are described as only a part of a larger pattern of extraordinary pressures and deliberate cutting of embankments along the whole of the Lower Atrai River basin. By 1995 BWDB has counted over 100 cuts into the four Chalan Beel polders 26 since the first of those embankments was completed in the mid 1980s. Similar behavior is common on the embankments north of the river. Aggressive activity by outsiders is uncommon in Bangladesh, and the consequence of the special regime of the Atrai River. Public cutting is common at Satla Bagda and other polders, but almost always it is by insiders and intended to relieve congested drainage inside, and usually at the foot .f, the polder.

6.11 FAP-2 insists it is essential to regard the Lower Atrai as an integrated system, and promotes the concept of a "green river"---referring to the corridor through Polder D and a much larger corridor downstream along the Atrai River. Map 6. taken from FAP-2's final report, shows the boundaries of the proposed green river. The strategy implies abandoning some of the high embankments already constructed and substituting submersible dikes and other structures to guide rather than divert the peak flood. Sections of the western and eastern embankments of Polder D would be remodeled, to provide control over the early phase of the flood and then to let the peak pass. It was beyond the reach of the preparation team in the period 1978-80, or the appraisal teams that followed, to have fully anticipated the hydraulics of the Atrai basin, and the lessons to be learned about the characteristics of the river system to be modified by Polder D. The fact that as late as 1992, the same year the FAP-2 Final Report was issued, another consultant team proposed full protection for all the Chalan Beel Polders, a design diametrically opposite to the "green river" concept, indicates that some persons remain unpersuaded of the green river concept.27

6.12 The flood situation within Polder D is a special case. But, apart from assuming leadership for the FAP consortium at the end of the 1980s, the Bank has been slow to take any action to offset or moderate the external impacts (on other polders and on unprotected areas) of the embankments constructed under its FCD projects. These externalities must be respected in all regions with flood control systems, but they are crucially important in the Atrai Basin.

26. Chalan Beel Polders A, B. C and D were designed as a unit in i 970. Government embanked the first three in the early 1980s, mostly using labor financed by FFW. IDA Credit 955 financed some of the control structures. Not all of those three polders have been fully protected, and the quality of some of the work is poor. 27. ACE and associates, June 1992. The Assessment and Hydrological Studies of Chalan Beet Polders A, B, C, and D-Main Report. 0 Mohadevpur NAOGAO

NAOGAON POLDER U)j

Jotebazar POLDER 2

Hingolkandi POLDER 3

LDE do9 3iKanpur 0 BhLiyangar* kug-POLDER

SI'0 BARNA1 SCHEME -- S ngrG arasSEAGN O N aru edaikona

RAJSHAHIr POLD

LDER A\ - - SIRlPapara

BAqAL BASIN Atnoih Sca/e PRO JEC-T ~Nka~ha

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ko. 2Ms.~.. ly SIruhu~ PÅR 40

6.13 The SAR for DFC II (dated 1981) considered and discounted the potential effects of Polder D on other areas:

"The effect of the construction of polders on flood levels outside the project areas is likely to be negligible since the flood discharges in the affected rivers are vast compared with the increased discharge volumes of the subproject areas as a consequence of the project" (SAR, page 22).

6.14 The SAR for FCD III (dated 1985), which included the Naogaon Polder immediately north of Polder D (Map 6), is also largely silent on external impacts and remedial actions. It provided for aerial photography and hydrological investigations, but its concern was limited to unprotected areas and not other polders. Moreover, the Bank accepted BWDB's proposal, after FCD III became effective, to raise the height of the embankments at Naogaon to afford better protection within that polder, despite the certainty that such action would commensurately reduce the level of protection of already existing neighboring polders.28

6.15 The SAR for FCD IV (dated 1987), pays more attention to externalities. FCD IV supports only one polder, the Barnai Polder immediately south and west of Chalan Beel Polders D, C and B (Map 6). The SAR is concerned with the potential impact of the project embankment to be constructed on the northern border of the Barnai Polder on the whole of the Chalan Beel. It suggests that government be prepared to fund additional works on the Chalan Beel embankments, to compensate for the project embankments. But FCD IV did not help finance those works. It did include funds for a hydrological study of Chalan Beel polders A, B and C.29 This was the study which ended with a recommendation for full protection for all four polders, a proposal that has subsequently been rejected by government (see para. 6.11).

6.16 These Bank responses to the threat of external diseconomies now appear inadequate, given the attention brought to the Atrai Basin by FAP and particularly by the North West Regional Study. The final report of FAP-2 warns about the potential negative effects of both the Naogaon and Barnai embankments on Chalan Beel and other neighboring and downstream polders. It predicts an increase in the level of the Sib River during the monsoon of one meter, enough to prejudice existing design parameters of Polder D. The report calls for close observation of those impacts as the new embankments take effect. There is no reference to this issue in the Bank's supervision reports. It is mentioned in the draft ICRs. The dissonance between the complacency projected by the DFC II SAR in the passage quoted above ("negligible"-para. 6.13) and the alarm sounded for the whole Lower Atrai by FAP-12 ("catastrophic"-para. 5.10) is a measure of the sea-change in perceptions about the efficacy of embankments (see also para. 6.25).

6.17 Satla Bagda. The plans for Satla Bagda did not refer to effects on neighboring areas. Nor did they discuss adjustments to design to anticipate the impact on Satla Bagda of likely construction of embankments around neighboring polders, although in the master plan developed in the 1970s for polder construction in this part of the delta it was clear that Satla Bagda was the first of several expected to be built. Subsequently, embankments have been constructed on half

28. The draft ICR on FCD III does a good job in exposing this aggressive behavior. 29. Polder D was not included in the original proposal, because its embankments were higher than those of the other three polders. It was added to the terms of reference later. 41 the bank opposite the northern boundary of Satla Bagda (the Paisharhat-Ramsil Polder), and FAP-4 has given priority to construction of another embankment along the rest of that northern boundary (the Ramsil-Kafulabari Polder).30 BWDB intends to build it. The bishop has objected: to further construction and the additional negative impacts it will bring (para. 5.18). Plans for the first embankment at Satla Bagda should have anticipated later works-assuming these were justified-so that the desired minimum levels of protection could be maintained. In technical jargon, Satla Bagda was planned as an "unconfined" rather than a "confined" embankment, even though BWDB and the Bank were at that time anticipating partial confinement. Nevertheless, unlike Chalan Bee!, the hydrological forces controlling water movement along the interlocked rivers and streams of this heavily inundated part of the southwest delta are more forgiving than in the northwest, and the consequences of inattention to externalities is less worrisome.

6.18 Hail Haor. That is not the case for Hail Haor, where the consultants, government and the Bank can be faulted for taking too narrow a view of the haor and its regional setting. This initial myopia was later corrected, which explains the discontinuity in implementation halfway through the project period. Government asked for a delay in execution to re-study the requirement for the one large regulator on the Gopla River. The Project Completion Report for this project, issued in 1991, says that the subsequent elimination of the regulator and other adjustments to design are evidence of poor preparation. But the PCR can also be faulted for taking too narrow a view.

6.19 The major structure in the design presented in 1980 was the North Flood Embankment, terminated at its western end by the regulator on the Gopla River. Together these structures were to prevent flood waters from the Kushiara River to the north inundating the project area, as they had been doing each monsoon. The flood came across the plains north of the project area. It also pushed up the Gopla River, in a reverse flow created whenever the Kushiara rose above a certain height. In 1985 BWDB officers called attention to the fact that the reverse flows had stopped, for several reasons including siltation of the Gopla. That removed the justification for building the regulator. BWDB also called the Bank's attention to the possible superior effects of closing off the flood at and near the Kushiara River, 13 miles north of the North Flood Embankment. A few years later, the Bank helped finance a small-scale FCD subproject along the Shaka Barok River, a tributary of the Kushiara, under the Second Small Scale Flood Control, Drainage and Irrigation Project (Cr. 1870-BD). These new works, started in 1991 and completed the next year, seal off the entire area north and south of the North Flood Embankment and make that ridge redundant for flood protection. There is no regulator at the end, the bridges have not been fitted with gates, and, as mentioned above, the structure serves only as a roadway.

6.20 The scheme, in short, is very different from the appraised design, and some of the constructed works in the original project area serve other purposes. The main objective, preventing the flood from the north, has been accomplished by the Shaka-Borak subproject. Completed three years after DFC II was completed, these new works protect an area half again as large as the original Hail Haor scheme and were built for half the proposed cost of the North Flood Embankment and regulator combined. The superior benefits and lower costs of construction on the Shaka Borak should have been identified in 1978, and put forward as the preferred alternative. Additional works, mostly reconstruction, would have been required on the

30. Both of these polders to the north of Satla Bagda were to be financed under another Bank project (Water Development Board Small Schemes Project (see para 1.4 and para 5.19). Because of delays in constructing the first one, the Bank canceled plans for the second. 42

Manu and Kushiara River embankments to complete the protective wall. Some of that was financed under the project, but not as part of a grand design to protect Hail Haor. The change in the flows of the Gopla River should also have been noted, though, as the SAR admits, there was hardly any flow data available on the Gopla when the project was prepared. The PCR criticizes faulty planning for the Gopla; it does not consider the Shaka Borak option.

6.21 It should also be noted that the external impacts of the Shaka Borak embankment, on embankments and unconfined areas on the Kushiara and Shaka Borak rivers, are not mentioned in its feasibility report. Nor, strangely, are the benefits finally brought to the Hail Haor area. The Shaka Borak feasibility report refers only to benefits from flood protection in the area between the Kushiara and the North Flood Embankment. 31 Thus, both these subprojects can be faulted for taking a narrow view of regional hydrology. Like Chalan Beel, but unlike Satla Bagda, this narrow view in the Hail Haor area puts project and downstream assets at risk, because of the rapid flows of the northeastern rivers before their waters reach the delta. BWDB is concerned about the rise in siltation of the lower Kushiara, before it enters the Meghna River, and the impact of the backup from that congestion on tributary rivers and embankments upstream. The final effects of all these structures cannot yet be anticipated.

3. Fisheries

6.22 The failure of the government and the Bank to take remedial action to protect the floodplain fisheries and fishermen incomes from polderization, or to offset the consequential losses, is unacceptable. The dikes prevent the free movement of different species from the river system to the interior beels, khals and other depressions which are the natural spawning grounds, jeopardizing the very existence of some species. Bangladesh's fisheries provide 80 percent of the country's protein-the very poorest families depend on common access to the flood plain fishing resource-and these economic and environmental losses must be taken seriously. The first PAR, dated 1981, to report on a Bangladesh flood control project-the Chandpur Irrigation Project (the project as implemented was converted to flood controlY-identified these losses as the only important indirect costs of the scheme but thought them to be substantial enough to warrant corrective action in subsequent operations. That message has been repeated in all subsequent evaluation reports on FCD projects. Nevertheless, the successor projects have not been able to deal adequately with the problem. The government is more at fault than the Bank, which has vigorously pushed during appraisal and throughout supervision for better monitoring of fisheries impacts as well as remedial action. The influence of this indirect cost on the analysis of project results is seen in the FAP-12 reports already cited. There the indirect fishery costs are rated "substantial" in 11 of the 17 schemes surveyed, and significantly reduced scheme-wise ERRs on six of them.

6.23 FAP-12 calls Chalan Beel the "loss leader" among the six. This indirect cost was underestimated at appraisal of that subproject. The SAR predicted that negative fisheries impacts at Hail Haor are likely to be greater than at the other two sites, and thus provided a fisheries component to that subproject. The component included a study of fisheries and likely negative impacts in the project area, proposals for corrective action, and funds earmarked for whatever infrastructure investments were recommended. The study was eventually completed in 1986, three years later than planned, and after successive attempts by government to delete the

31. Northwest Hydraulic Consultants, Ltd. 1988. Feasibility Report Subproject No. 13. Annex C. Economic Analysis 43 component after the Credit became effective. The study found that full flood control at Hail Haor up to that time was ineffective and the fisheries had not been disturbed. Funds were never approved by government for infrastructure or any remedial steps.

6.24 To date, there has been no action to ameliorate the damage caused by FCD to the capture-fisheries subsector, even though the losses have been recognized for over fifteen years and are not disputed. They are particularly distressing in the context of poverty reduction because the impact on incomes is concentrated on an already disadvantaged minority group: landless Hindu communities which provide the majority of the fishermen and are among the poorest groups in the country. It is not clear how much of the trend toward smaller fish populations and species in the rivers and beels can be attributed to enclosure, and how much to a secular trend reflecting overfishing, pollution and other factors.32 It is also unclear how the fishermen should be compensated. It is the lack of any corrective action that invites criticism.

4. Embankments

6.25 Questions have been raised about the long term efficacy of embankments for full flood protection, given the indirect costs to neighboring shorelines and other upstream and downstream impacts. DFC II shows that those negative impacts can be real and substantial, though the evidence is impressive in only one of the three project sites. But DFC II also confirms that the positive impacts of the embankments on water control and crop production are also appreciable. The ERRs presented earlier in this report do not incorporate the largely negative external impacts, and are thus an incomplete measure of overall results. And, to a lesser extent in these polders but of central importance to some other embankments, the analysis does not pick up the benefits of saving lives from sudden flood. A complete measure at this stage is impossible, given that the longer term effects of embankments on other embankments and polders are unknown.

5. Influence of O&M on ProjectImpact

6.26 What is certain is that the deterioration of embankments and other structures due to inadequate maintenance makes the ERR calculus in Chapter 5 suspect. All of the SAR and PCR ERR cost/benefit streams include provisions for O&M expenditures at a certain, acceptable level, and carry out the benefit streams for 30 years without factoring in either a decline in production attributable to gradual degradation of works (clogging of drains, inoperable gates), or sudden collapse (embankment breakdown). A maintenance program which defers action until major corrective work is necessary will undermine the validity of the original calculations, unless periodic, substantial expenditures on rehabilitation are also included. At present the polders get neither treatment: preventative and routine maintenance to avoid larger expenditures later, or cyclical rehabilitation that is "just in time" to maintain the structures close to design specifications to give the expected results. The structures are being allowed to degrade beyond that point: gates missing, drains blocked, and embankments compromised to the point where breaks are likely under severe stress.

32. At one of OED's group interviews, village leaders insisted that the common perception of embankment damage to fisheries was wrong. They said that the culture fisheries industry inside the polders was expanding, and that the capture fisheries business was on its way out anyway, due to developments elsewhere in the river basins. It was the only expression of this position the team encountered, but the depth of conviction of these informants was impressive. 44

6.27 It is this factor that underlies the concern about embankments. The long term negative externalities of embankments are potentially sufficiently serious to offset expected benefits within the polders to the point where a very unsatisfactory rating will result. Poor maintenance and, as a consequence, the degradation of flood control services provided by embankments and drainage, make that outcome almost inevitable.

B. Lessons

6.28 The list of lessons is shaped by the issues brought up in the preceding paragraphs.

* The growth in national food production will continue to depend on expansion of dry season farming based on shallow tube wells and low lift pumps. However the potential contributions of the Boro and monsoon crop-in response to FCD investments-are also important considering both the ample scope for increasing HYV coverage through reduction of flood depth, and the low cost of the investments. The project under review is not a good platform from which to make that case. Results at two of the three sites were well below expectations and probably unrepresentative. A full audit of the two other FCD projects now completed through the ICR stages is desirable. They offer a stronger base on which to propose a sustainable, low-cost FCD strategy for the Bank.

* The Bank should adjust FCD design to regional hydrological patterns. The project included two schemes, out of a total of three, whose designs were seriously compromised by hydrological forces outside the range of normal concerns at preparation and appraisal.

* In future FCD operations the Bank must insist on remedial action to help offset losses to the fisheries subsector. Site-specific studies may be necessary to identify appropriate responses. To the extent FAP achieves a shift in FCD strategy toward reducing and "living with," rather than deflecting, the flood, the pressure on riverine fisheries will diminish. But the breeding grounds inside the embankments will remain at risk.

* Government and BWDB's stubborn and slow response to the urgent need to radically improve O&M must be accelerated. They as well as the Bank should be alarmed at the continuing erosion of FCD assets as a result of poor maintenance. The decline in the prospects of accomplishing the primary objectives of SRP is particularly distressing. The O&M shortfall applies to irrigation as well as FCD, two lines of investment that the Bank should refuse to support until O&M (and particularly maintenance) is given the attention everyone agrees it requires. This means not only securing BWDB's commitment but also changing the culture and skill mix at BWDB so that the reforms can proceed. BWDB's professional staff needs a better balance of water management experts and civil engineers. The recent trial organizational reform establishing a separate field authority and staff for operations and routine maintenance on one subproject is a step forward and must be consolidated. Introducing the necessary cultural and organizational reforms are among the main objectives of SRP, but BWDB must absorb them as its own. 45

* The effects of the failure to organize farmers to help plan, manage and maintain the FCD structures are self-evident. Farmers in the polders have no tradition of association at the community level on polder problems. Consequently, the introduction of participatory water management cannot appeal to traditional processes of problem solving. The "tragedy of the lowlands" is that FCD schemes contain both winners and losers, and constructing organizations that bring them together calls for skills in social engineering that BWDB does not possess. Those skills must be created, a lesson for both the Bank and BWDB. The TA team considers its pilot activities in local participation to be among its most important contributions. However, BWDB should not be expected to handle this job alone: other government departments, specialized rural development consultants, and NGOs with appropriate skills and concerns for polder communities have to be brought on board.

47 Annex 1

DFC II INFRASTRUCTURE WORKS

Chalan Beel Satla Bagda Hail Haor SAR Actual SAR Actual SAR Actual Embankment (Km) Construction 134 132 89 120 - 14 Upgrade 32 28 13 12 Dikes, submersible (Km) - 3 ControlStructures Regulators 4 13 9 12 1 - Closures - 29 Outlets (Flush/Drain) - 8

Dual Inlets/Outlets - 77 Irrigation Inlets - 22 450 372 DrainageChannels (Km) 193 134 216 (ha) 12,150 8,800 - Roads Main 48 76 41 34 31 19 Village 97 26 31 31 32 11

Source: SAR; Evaluation Studies for CB, SB, and HH, Chapter III in each volume. (See citation in Footnote 12.)

49 Annex 2

OED Impact Study

Salta Bagda Polders and Chalan Beel Polder D Drainage and Flood Control Project II Bangladesh

Farmer Behavior (Excerpts from a Field Report by Jayantha Perera, November 1995)

ChalanBeel

* Farmers cannot operate the sluice to get irrigation water or control floods. They do not know who is responsible for the operation of the sluice. There is no Sluice Committee to supervise the operations. A Kalasin (guard) is officially responsible for operating a sluice. According to farmers at several sluices Kalasins do not operate sluices and live away from the sluice sites. Farmers reported this to their Union Councils. The Councils do no have any authority over sluices or the Kalasins. Many sluice gates do not have handles.

* Sometimes farmers take initiative to establish Farmer Groups to deal with heavy siltation of drainage canals. For example, farmers of the Mansinhapur Thana of Chalan Beel met at a school to discuss the strategy. They invited officials from the BWDB and local Thana office to the meeting. Farmers described their difficulties to the officials and requested their assistance to desilt the canals. The BWDB officer and Thana officials told them that BWDB and Thana office were not 'mandated' to desilt the drainage canals. They directed farmers to the Local Government Engineering Department which too was unable to help farmers. Farmers do not want to clean the canals by themselves for various reasons. The main reason is the length of canals. Land along canals belong to farmers of different villages. As a result, their mobilization is difficult for this purpose. The average distance of a canal is about 6000 metres. At one village about 120 farmers cultivated land by a canal which is about 5000 metres long. If households are willing to do the cleaning, each household has to clean only 50 metres. When this is pointed out to a village leader, he said "such things can happen in other countries; not in Bangladesh as all villagers and officials are corrupt and selfish."

* In Chalan Beel, 'insiders' usually do their best to protect and maintain the embankment. In fact in 1989 and 1990, when floods threatened the embankment, they voluntarily protected the embankment by strengthening it with sand bags and patrolling vulnerable sections of the embankment. But such group activities are often charismatic leader-driven programmes without any institutional backing. In fact, there is no institutionalized link between farmers and BWDB over the polder operation and maintenance. Kalashis are responsible for irrigation regulator operations, not farmers or fanner groups. Unlike Myanmar and Thailand, Bangladesh is known for well-developed grass roots level farmer organizations. But in Drainage and Flood Control Projects, no beneficiary organizations have been Annex 2 50

encouraged or established by the BWDB. Perhaps this is due to the BWDB's continuing emphasis on civil works in these projects.

* An informal Sluice Committee comprised of farmers is expected to assist a Kalshi in sluice O&M. But as noted at several sluices, the Kalshis do not live in villages, and leave sluice operations to farmers. As a result, the operation of some sluices has been taken over by large landlords. This thwarts group formation among irrigators and lends to prolonged exploitation of poor farmers by big landlords. At some sluices, powerful landlords sell water from BWDB sluices without paying any taxes to the Government or doing any maintenance.

* At many locations, especially along the south-western boundary of the polder, farmers have their own associations to get water from the river or STWs sunken by the river bed during the dry season. For example, a group of farmers (60) in Mansinhapur pump water from a STW outside the polder using a 4" pump to their holdings inside the polder. They first pump water to an unlined canal. From the canal each farmer gets water to his holding. The canal is about 1.5 km long. It took 18 days for 60 people to dig it in 1986. A large zamindar organized the scheme. Satla Bagda

* At Satla Bagda as well as in Chalan Beel farmers believe that drainage and flood control structures are government property and therefore it is the government job to do their maintenance.

* There are informal cultivation groups and therefore it is difficult to say that there are no Farmers Organizations (FOs). Some form of local committees are present to control inlets and sluices. The Kalashis, as at Chalan Beel, take no interest in operating inlets and sluices. Many farmers pointed out that they do not want to take over the operation of sluices as there is no benefit for them from sluices.

* Routine maintenance of the embankment is non-existent at present. There is very little evidence of maintenance work on regulators and sluices. The desilting of Khals are also neglected. The BWDB has attempted to rehabilitate inlet sluices so that farmers could use them as irrigation inlets and drainage outlets depending on the water level of the river. But in many places, water does not come in during the dry season, when the water-level in the river is low. In several villages, farmers therefore have excavated deep canals to get more water from the river for their lands.

* If lowland farmers drain their lands, the highland farmers will have a water-stress situation. this conflict of interest often encourages the head-end farmers to gain control over inlet gates and sluices. Head-end farmers take water whenever necessary from the inlets as their lands naturally drain excess water to lowlands. They sometimes pump or use swing-buckets to get water from canals for rice cultivation. In fact they could cultivate two or three crops a year, if irrigation water is found. At the same time, the lowland farmers could not cultivate their lands even in the dry season due to excess drainage water that damages their crops. 51 Annex 2

In April 1995, when the head-end farmers opened the sluices to irrigate their lands the tail-enders blocked the canal with stones, etc. to stop water coming to their holdings. This led to a clash between the two groups. As inlets are located at higher positions to save lands from floods and tidals, it is difficult to use them as drainage canals for lowlands. Separate outlets canals are needed to drain water from lowlands. This is particularly urgent as the Khals were blocked by the inlet canals and other structures.

ぐ n 留 園 & ： 曹 1！ 重 玉 2 ‘ 原 ミ J

『り ；舞；( ：、 I Annex 3A 54

C010(ENT ODD 1m)2act study. m&y 1,996

BACXGROUVD

The study was conducted oh a cluster of six gravity Irrigation' scheinets -supp6rl-.3d by the t4orld Bank iWB) in three countries of S6 thedivt i siaC (Thaifand. Myanmar and Vietham). The main objective was to assess' agFo- economic impacts at least five years, after completion of the investment operations -and the influence of operation and maintenanc 'e (0 rX ;M) performance on the suatainabillt of ttiose impact3. For comparative purposes. the study also assessed impact andt 0 & M at three schemes coverea b a flood control project in Bangladiash4'-with irrigation as a minor component.

SPECIFIC ISSUES

Annex-D

Para 11 and 12 While recognizing the SRP and enhtnced 0 & i M as a positive response, the performance has een tarmed inadequate and below expectation. it sholild be noted that at the very start. up, initial mobillzaLion of a TA component (EU) was delayed by over a,- year by a Donor wMch led to subsequent poor performance. Furt ermo rd', it s ould be rea.Uzed that basic, policy changes i:iquire time to materialize.

Para 14.15 and 19 OED seem s to hav'a relied more an earlier,eval Iations by others to draw conclusions and less'on its owil invesiigations and lack of BWDB's participad6n i In the Mission is apparently conspic'Uoua: The contribution of dyke in delaying onset Of flo da on the plains io ensure sale Boro harvest ihould h ve been sharply highlighted.

.Para 1 The conflict between farmers of different ele atio'ns is not unique for Satla Bagda alone. it is trUe for all gravity drainage VCD pro3ects In the delta. 55 Annex 3A

Para 2C The need for adequate 0 & M and farmers' * -organization has been recognized and steps are . underwdy to address these issues.

Findings and Lessonss The reliance on winter rice alone for 'continued growth in national foodgrains production is no more tenable as Boro production has stagnated around 34/35% over last five years indicating scarcity in availability of water needed for bringing in new areas. The scope for vertical rise is also limited as about 90% of Boro is HYV alFeady whereas there is ample scope of increasing HYV coVerage from present 35% through reduction of flood depeh.

Apparently GED failed to recognize the fundamental principle of FAP which is reduction of. flood depth through controlled flooding rather than elimination of flood biiA not 'living with flood" as such. Some of the FAP pilot projects (FAP-G and FAP-20) have already taken some Innovative steps 'towards promotion of fisheries in FCD projects and involving stakeholders. The BWDB professionals have been exposed to and gaining experience In., 'social engineering'.

PERFORMANCE AUDIT RnPORT-rCD II

Para 1.2 a The assumption by proponents. of min#r irrigation that Bangladesh rests on one of the world's greatest, though untapped, rechargeable aqdilfers is yet to be proven and perhaps a myth now. Aecause, in many of the STW areas (all private now) embargo has been Imposed on new sinking and apoarently. sale of STW has also declined sharply. The IBRD sector study recommended low cost, quick ielding FC6 projects in 'shallow flooded areas which has not been mentioned.

Para 1.3 Geographical location of Bangladesh has been depicted to be- 'at the confluence of two of the world's mightiest rivers. It should be rephrased as 'at the confluence of three mighty rivers: of the world'. Annex 3A 56

Pars 2.1 . While describing the functions of embankment, the report should have highlighted the b6nefAis from use of dyke as road and also keeping the: village tracks unable throughout the year due tb flood reduction within the polder.

Para 3.3 * The Satla Bagda dykes were partly built with peat soils no doubt, but the annual shrinka4e was monitored carefully and free board allowance made. The 1987 flood was an unusual event, with higher return period than the design (1 in 2d yearb).

Polder technology is not simple in gravity drainage system as the hydrology becomes complex - in enclosed area due to varying topography.

Para 5.11 Some parts of Chalan Beel (Polders A,B,C) are prone to early flash floods that destroyed mature Boro before harvest. The dyke has ensured safe h.arvest. Thus there is a causal relationship.

GENERAL COMMENTS

Project planning of all aided scheme were performed by consultant engaged by aid-giving agencies. Consequently review and appraLs4 were. made before financing. BWDB only implemented as per plan and design. Participatory! planning, enivironmental concerns etc. are relstivel.. new concepts and are being addressed' gradually. Theiefore, lapses in the past should be equally attribUted to both Bark and BWDB.

The report appears heavily reliant on i other literature and the report admitted that platf6rm 'of audit is not strong. The ERRs presented seem to be computed without sound basis.

( A.K.M. Shirmiul Anque) chifr Rigineer, - Planning,I)tibil, Dhaka & 57 Annex 3B

Bangladesh Ministry of Planning

Mosr uzzarG

GjOVERNMENT OF THE PEOPLE'S REPUBUC OF BANGLADESH MINISTRY OF PLANNING

Th0.5MIAmN..M.bl&EBYA LAl ")TTONIMA.Im

No. MoniBi-14150194(Part-4) Date:26-6-96

Subject: Comments on PAR Drainge and Flood

Ref : World Hank Lerter datcd 3/6/96

Please refer to the above mentioned letter. In this connection the -iewsicommcnts of Lhe IMED is enclosed.

Thanking you .

Yours faithfuy,

.A.M. RhImquzzaman 4 , Projct oflkir (Md. Remxul Kaim) World Bank Deputy Dirctor Resident MiNsion of Dangladcah Tel. 329028 Fax: 863220 Ju Annex 3B 58

GOVERNMENT OF THE PEOPLES REPUBLIC OF 3ANGLADY-Ski IMNISTRY OF PLANNING IM L1XNTATION MONITORING & EVAJATION DIVISBYON

Subjcct : Comments on Performance Audit Reports (PAR) on )rainage and Flood Control 11 Projectof BWDB, Prepared by OED. world Bank

COMMENTS ON IMPLEMENTATION EXPERIENCE:

The project aiied at protection of Chalan Beel, Satin Bagda and Iail 1or area from monsoon flood and drainage congestion. The project component of (a) Chalan Bee[ IncludeA construction of 134 Km embaRnkment, drains and thirteen water control structure%and construction and Improvement of 101 Km of roads in 31,000 ha. area. The project component or (b) Satla Bagda Area Includes construction and improvement of 145.64 Km embanlunent, drains and 372 irrigation inlets,

construction of 84.52 Km of new road; covering an area of 21,000 ha; while the - component nf(c) flail Haor includes 24.60 Km of embalanerint, drains and imajor water control structure (regulator), Improvement of 30. 18 Km of roads and 34 Nos of 13ridges of CuIlverts. A flaheres study and infl*astructure Investniients for fiNherief development were also Included in the Hail Haor project Our CDnII/vIews on the Evaluation Summary of the above mentioned projects prepared by the Operations Evaluation Department (0. E. D.) is reflected below: Pake 2. Articl- (a) The Projcct under Chalan beel Polder-.) is surrounded by Atrai, Fakirni. Bamnai and Shib rivers. As a result of the inplemeitation of this project along with other projtcts impleMened tround, all flood walers aro flown to unproLected lowlands thaL had previously never experienced flooding. Morcover, Sib and Fakirni rivers are partly silted up. A VUL bed area and 3arind bszin are situated at the wet site of the embankment, for 59 Annex 3B

which the west part of the project specially the embankmnwts are threacend during monsoon cvery year . Tlhe disatisfled frmenrs of the affected area cut many places in the palders to ruduce water icvcl for their existence. In the mean time, in 1995 about 1.89 km embankment have been damaged partly and 30 suucmrcs have either been partly or rully damaged. 1hose ocrwTenues are still continuing. Perhaps, this needs a close look on the de-sign of the etbanknent relating to the local hydrological pattern and may nucassitate red esignino or the whole project. (b) Ebankrncns and structures of Satla 3agda project were heavily dsmaged by 1987 & 1988 Flood . In the Chalan beel polder - 1) and Satle Bagda project, 394 Noa of LLP inlet were constructed . ILwas proposed that part of the project area would be inigated by these LUY inleit but most of the inlets were not properly funedoning for inigatin. Ilis has also caused concern particularly in respect to the; planned output of the project. This fact has not been m-antioned in the OED's report. 2. Pagg-a- Irtidle. 7. Cornpletin of* thu project was delayed rol only Lfor land acquisition but delay in detailed deign of the components, finalisation of tender, award of work, contractors failures, re-fixation of alignment of the embankment made the implementation process dilliculh Bencliciaies of the project werc not informed about the consequences of the prqictl implementation and the probable changes in flood water courses. They were scared at initial water logging. So their co-operation wa nor achieved to solvc rhc problems quickly. (b) Sada Bagda. project was dclared completed without re-excavating 54% af the drainage channel . As a result some of the areas werc facing drainage problers. OED'n report is sflent on this issue.

Page-2- Article -8 (a) 54% of expendiLures was incurred against contructdon of roads, bridges and 4ulverts under Hail Iao projuQt which were not at all rchaed to F C D prqjecL objectives . Iter sectoral transf±r of fund and proper pioritization was not perhaps done and project selcction critena was also not followed properly during implementation of the project. Page-Z- Article-9, No comments Article -10 Annex 3B 60

No comments. Pauej- Article :11-12 Q!zr;ain and Maintenance: (a) in the (.halan bed polder-D project, 76.00 Km of IBB road and 30 Nos of BridgeS/culverm were constructed and in the Satlabagda project, 54.65 km Of HBB road and 1 Nos of Bridges/culvers worm constructed. The roada weru Mlly or partly damaged within 2-3 years of completion due to lack or operAtion & minatenance. Responsibility of rural comuunication developenM along with the 0 & M is ntusted to L Ga S ). Due to fund coDstraints ncither BWDD nor I .6OFD could uaintain these rnada. It is a factor that underfies our concern for the embankment. We however agree to the suggestions made in the OED's report on the Issue of operation and maintenance.

Page-3-Article-. (a) In the absence of the impact evaluation study by IMED we have no comments on the ERIL In gencral, the value of ERR is less in the FCD project compare to the irrigtion proj:c.L Therefort we agree the value of ERR in pimciple. (b) We fuly vgaeon the comments of the mensilivicy analysis as reflected in the report. . MAP SECTION

l,,.1 9?r BANGLADESH DRAINAGE AND FLOOD CONTROL Il PROJECT SUB - PROJECT SITES

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BANGLADESH DRAINAGE AND FLOOD CONTROL II PROJECT CHALAN BEEL SUBPROJECT

PROJECT WORKS EMBANKMENTS

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INDIA Theboundaries, colors,denominations F e and any other informoho shown on th'smap do not impky,on the port of TheWorld Bank Group, ony judgment PABA othe logo status of any territory, or THANA onye rn.. or cosPto,,c. of Bey ef boundones. ANMAR

JANUARY1996

BANGLADESH DRAINAGE AND FLOOD CONTROL Il PROJECT ForD e' 0 27n04 For Dero,, SATLA BAGDA SUBPROJECT 'RD 27 060 PROJECT WORKS D EMBANKMENTS

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