World Bank Document

Document of The World Bank

Public Disclosure Authorized Report No: ICR2482

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-31770 IDA-31771 IDA-47610)

ON A

Public Disclosure Authorized CREDIT

IN THE AMOUNT OF SDR 143.6 MILLION (US$ 205.6 MILLION EQUIVALENT)

TO THE

PEOPLES REPUBLIC OF BANGLADESH

FOR THE

Public Disclosure Authorized MUNICIPAL SERVICES PROJECT

December 27, 2012

Urban Sector Unit Bangladesh Country Unit South Asia Region Public Disclosure Authorized CURRENCY EQUIVALENTS

(Exchange Rate Effective November 30, 2012)

Currency Unit = Bangladeshi Taka 1.00 = US$ 0.01 US$ 1.00 = Tk. 81.3

FISCAL YEAR July 1 – June 30

ABBREVIATIONS AND ACRONYMS

ADB Asian Development Bank BMDF Bangladesh Municipal Development Fund CAS Country Assistance Strategy ERR Economic Rate of Return FOAP Financial and Operational Action Plan GOB Government of Bangladesh IDA International Development Association LGED Local Government Engineering Department MDF Municipal Development Fund MPRC Municipal Performance Review Committee MSU Municipal Support Unit NPV Net Present Value PMU Project Monitoring Unit PPA Participatory and Partnership Approach

Vice President: Isabel M. Guerrero Country Director: Ellen A. Goldstein Sector Manager: Ming Zhang Project Team Leader: Zahed H. Khan ICR Team Leader: Janis D. Bernstein

PEOPLES REPUBLIC OF BANGLADESH Municipal Services Project

CONTENTS

Page Data Sheet

A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

Main Document

1. Project Context, Development Objectives and Design ...... 1 2. Key Factors Affecting Implementation and Outcomes ...... 7 3. Assessment of Outcomes ...... 15 4. Assessment of Risk to Development Outcome ...... 24 5. Assessment of Bank and Borrower Performance ...... 24 6. Lessons Learned ...... 27 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ...... 29 Annex 1. Project Costs and Financing ...... 30 Annex 2. Outputs by Component ...... 31 Annex 3. Economic and Financial Analysis ...... 64 Annex 4. Bank Lending and Implementation Support/Supervision Processes ...... 72 Annex 5. Beneficiary Survey Results ...... 74 Annex 6. Summary of Borrower's ICR and/or Comments on Draft ICR ...... 80 Annex 7. List of Supporting Documents ...... 99

Map IBRD 33368

A. Basic Information Country: Bangladesh Project Name: Municipal Services IDA-31770,IDA- Project ID: P041887 L/C/TF Number(s): 31771,IDA-47610 ICR Date: 07/19/2012 ICR Type: Core ICR Lending Instrument: SIL Borrower: GOB Original Total XDR 100.00 M Disbursed Amount: XDR 141.86 M Commitment: Revised Amount: XDR 143.60 M Environmental Category: B Implementing Agencies: Local Government Engineering Department, Bangladesh Municipal Development Fund Cofinanciers and Other External Partners:

B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 08/31/1997 Effectiveness: 10/25/1999 10/25/1999 2/10/2005 Appraisal: 06/13/1998 Restructuring(s): 12/21/2007 08/23/2010 Approval: 03/16/1999 Mid-term Review: 03/02/2002 Closing: 06/30/2005 06/30/2012

C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Satisfactory Borrower Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Moderately Satisfactory Implementing Quality of Supervision: Moderately Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Satisfactory Performance: Performance:

C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments (if Indicators Rating Performance any) Potential Problem Project at Yes Quality at Entry (QEA): Highly Satisfactory any time (Yes/No): Problem Project at any time Quality of Supervision Yes Moderately Unsatisfactory (Yes/No): (QSA): DO rating before Moderately Satisfactory Closing/Inactive status:

D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) General water, sanitation and flood protection sector 20 20 Other social services 17 17 Sub-national government administration 58 58 Urban Transport 5 5

Theme Code (as % of total Bank financing) Municipal finance 22 22 Municipal governance and institution building 23 23 Participation and civic engagement 11 11 Pollution management and environmental health 22 22 Urban services and housing for the poor 22 22

E. Bank Staff Positions At ICR At Approval Vice President: Isabel M. Guerrero Mieko Nishimizu Country Director: Ellen A. Goldstein Frederick Thomas Temple Sector Manager: Ming Zhang Frannie F. Humplick Project Team Leader: Zahed H. Khan Jonathan S. Kamkwalala ICR Team Leader: Janis D. Bernstein ICR Primary Author: Janis D. Bernstein

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The Project Development Objective (PDO) is to improve environmental and infrastructure service delivery in urban areas. See section 1.2 for the entire PDO. ii

Revised Project Development Objectives (as approved by original approving authority)

The Project Development Objective did not change during the implementation of the original project or the Additional Financing.

(a) PDO Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised Target approval Completion or Target Values documents) Years Indicator 1.1 Municipalities able to plan, prioritize, and implement service improvement by end of project. Value Phase 1: 16 AF 2010 (Quantitative or 0 183 Qualitative) Phase 2: 40 183 Date achieved 03/16/1999 06/30/2001 06/30/2012 06/30/2012 By 2010, 92 cities had received MSU capacity building and support for community Comments mobilization. During the AF 2010, the MSU extended the capacity building to another 91 cities. Indicator 1.2 Management reform in municipalities completed.

Value Phase 1: 16 AF 2010 (Quantitative or 0 183 Qualitative) Phase 2: 40 183

Date achieved 03/16/1999 06/30/2001 06/30/2012 06/30/2012 By 2010, 133 cities achieved management reform. By June 30, 2012, another 50 completed Comments reforms in project planning, tax and water tariff collection, and managing municipal accounts. Indicator 1.3 Demand driven and cost recovery measures introduced for revenue generating sub-projects.

Value Phase 1: 16 AF 2010 (Quantitative or 0 168 Qualitative) Phase 2: 40 168

Date achieved 03/16/1999 06/30/2001 06/30/2012 06/30/2012 By 2010, 112 cities had introduced these measures; under the AF2010, another 56 cities were Comments required to involve participation in project selection and to initiate measures to improve cost recovery. Indicator 2.1 MDF created and operational for on-lending to municipalities. BMDF operations BMDF operations streamlined and Value streamlined and its BMDF created and coordination (Quantitative or MDF not established coordination with operational with LGED and Qualitative) LGED and other other relevant agencies strengthened agencies strengthened Date achieved 03/16/1999 09/1/2004 06/30/2012 06/30/2012 iii

Under the AF2010, a new indicator was introduced - to streamline its operations and to Comments strengthen coordination with LGED (for details on all of the measures taken, see Sec. 3.2 (b) of the ICR main text. Indicator 2.2 Municipal Performance Review Committee (MPRC) established and operational by end of Phase 1 Established on July 5, Value 1999 MPRC established and (Quantitative or MPRC does not exist operational Qualitative) Operational on March 16, 2002 Date achieved 03/16/1999 03/16/2002 The MPRB was established on July 5, 1999 and fully operational by March 16, 2002, when the Comments first meeting was held. Indicator 3.1 Physical investments targeting poverty and environmental improvements through community participation. No target established in PAD because of 595 works Value 0 the demand driven 595 works packages packages (Quantitative or nature; by the AF of completed with BMDF completed with Qualitative) 2010, 454 works funding in 154 towns BMDF funding packages had been financed. Date achieved 03/16/1999 06/30/2005 06/30/2012 06/30/2012 Phase II investments involved participation in planning and implementing sub-projects aimed Comments at poverty and environmental improvement. Specific targets for Phase 1 are described below.

(b) Intermediate Outcome Indicator(s)

Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised Target approval Completion or Target Values documents) Years Indicator 1.1 Municipal Development Fund established by July 1, 2000. BMDF established by BMDF established 0 July 1, 2000 Date achieved 03/16/1999 03/9/2002 03/9/2002 The delay was due mainly to the severe floods of 2000 which diverted project staff attention to Comments finance urgent repairs, and the transitional government putting final steps on hold until new government took over. Indicator 1.2 Municipal Performance Review Committee (MPRC) established by June 30, 1999. Established by June MPRC established 0 30, 1999 Date achieved 03/16/1999 07/5/1999 07/5/1999 Comments Indicator 1.3 Municipal Support Unit (MSU) fully staffed and working, as agreed with the Bank, by July 1, 1999. MSU fully staffed and MSU fully staffed and 0 working by July 1, working 1999

Date achieved 03/16/1999 10/25/1999 10/25/1999 Comments Indicator 1.4 Partnership and Participatory Approach (PPA) designed, in agreement with the Bank, by September 30, 1999. PPA designed in PPA designed in agreement with the agreement with Bank 0 Bank by September 30, 1999 Date achieved 03/16/1999 09/30/1999 09/30/1999 Comments Indicator 1.5 All Phase I participating city corporations and municipalities implement Financial and Operational Action Plan by June 30, 2000. All Phase I CCs and All Phase I CCs and municipalities municipalities 0 implement FOAP by implemented FOAPs June 30, 2000 Date achieved 03/16/1999 07/30/2000 07/30/2000 Comments Indicator 1.6 At least 40 other municipalities implement FOAP by June 30, 2004. 16 Phase I CCs and municipalities implemented 40 40 FOAPs Date achieved 07/30/2000 06/30/2004 06/30/2004 Comments Indicator 2.1 Roads constructed/rehabilitated.

50% Phase I road works completed by June 30, 2000 0 Works completed 100% Phase I road works completed by June 30, 2001

Date achieved 03/16/1999 12/31/2006 12/31/2006 By 2005, 95% of the works were completed. Due to the need to redirect LGED’s efforts to Comments urgent repair works related to the 2000 floods, the project did not meet original target dates. Indicator 2.2 Drainage facilities improved. 67% (25 km) completed by June 30, 2000 0 Works completed 100% (37 km) completed by June 30, 2001 Date achieved 03/16/1999 12/31/2006 12/31/2006 By 2005, 95% of the works were completed. Due to the need to redirect LGED’s efforts to Comments urgent repair works related to the 2000 floods, the project did not meet original target dates. Indicator 2.3 Construction of public toilets completed. v

68% (32 toilets) completed by June 30, 2000 Works completed 0 100% (47 toilets) completed by June 30, 2001 Date achieved 03/16/1999 12/31/2006 12/31/2006 By 2005, 95% of the works were completed. Due to the need to redirect LGED’s efforts to Comments urgent repair works related to the 2000 floods, the project did not meet original target dates. Indicator 2.4 Rehabilitation of water supply facilities completed. 75% (9 km) of water lines completed in Khulna by June 30, 2000 0 Works completed 100% (12 km) of water lines completed in Khulna by June 30, 2001 Date achieved 03/16/1999 12/31/2006 12/31/2006 By 2005, 95% of the works were completed. Due to the need to redirect LGED’s efforts to Comments urgent repair works related to the 2000 floods, the project did not meet original target dates. Indicator 2.5 Municipal markets upgraded. 50% (8) completed by June 30, 2000 0 Works completed 100% completed by June 30, 2001 Date achieved 03/16/1999 12/31/2006 12/31/2006 By 2005, 95% of the works were completed. Due to the need to redirect LGED’s efforts to Comments urgent repair works related to the 2000 floods, the project did not meet original target dates. Indicator 2.6 Bus/truck terminals constructed or rehabilitated in each city corporation and municipality. Two new bus terminals constructed by June 30, 2002

Seven new bus terminals constructed by June 30, 2001 Works completed 0 Three bus terminals rehabilitated by June 30, 2001

Two new truck terminals constructed by June 30, 2001 Date achieved 03/16/1999 12/31/2006 12/31/2006 By 2005, 95% of the works were completed. Due to the need to redirect LGED’s efforts to Comments urgent repair works related to the 2000 floods, the project did not meet original target dates. vi

Indicator 2. 7 Facilities for solid waste management put in place Disposal sites identified/improved in all 16 phase 1 participating cities and municipalities by June 30, 2001

All community bins 0 constructed and Works completed operated by June 30, 2001

All waste transport equipment procured and operational by June 30, 2001 Date achieved 03/16/1999 12/31/2006 12/31/2006 By 2005, 95% of the works were completed, and the original targets were not met due to the Comments 2000 floods. Disposal sites were not improved for all 16 Phase I cities due to land acquisition issues. New Indicator MDF-funded sub-projects in 56 more municipalities providing grant and loan funding for for AF 2010 schemes selected locally and implemented and loan repayments underway BMDF working with 112 BMDF working with BMDF worked with municipalities 168 municipalities 154 municipalities

826 km roads 1,156 km roads 1,128 km roads

8500 street lights 11,500 street lights 24,960 street lights Value (Quantitative or 175 km drains 265 km drains 260 km drains Qualitative) 75 public toilets 87 public toilets 87 public toilets

75 kitchen markets 90 kitchen markets 211 kitchen markets

137 km water supply 167 km water supply 173 km water supply pipelines pipelines pipelines Date achieved 06/1/2010 06/30/2012 06/30/2012 By 2010, BMDF had funded 454 packages that were completed. By 6/30/2012, 595 projects Comments had been completed in 154 ULBs. The loan recovery rate is 75%. New Indicator Capacity building inputs by MSU extended to 50 more municipalities with expected increase for AF 2010 in holding tax collection in the 48-70% range in 20 additional municipalities. Ongoing capacity building in Capacity building in Capacity building in 92 municipalities 142 municipalities 142 municipalities Value (Quantitative or 75 municipalities with tax 125 municipalities 142 municipalities tax Qualitative) billing computerized (total) tax billing billing computerized computerized

vii

7,405 municipal staff 8,400 municipal staff 8,400 municipal staff provided training (total) provided provided training training

20% increase in tax collection 25% increase in tax 17.5% increase in tax in 20 municipalities collection by collection by municipalities municipalities (average/range) (average/range) Date achieved 06/1/2010 06/30/2011 06/28/2012 The 17.5% increase in tax collection is based on a sample of 39 cities; 23 had tax collection Comments rates in the 48-95% range; another 7 had collection rates in the 40-47% range.

G. Ratings of Project Performance in ISRs

Date ISR Actual Disbursements No. DO IP Archived (USD millions) 1 04/22/1999 Satisfactory Satisfactory 0.00 2 07/02/1999 Satisfactory Satisfactory 0.00 3 01/06/2000 Satisfactory Satisfactory 6.29 4 03/22/2000 Satisfactory Satisfactory 6.29 5 08/28/2000 Satisfactory Satisfactory 6.29 6 03/01/2001 Satisfactory Satisfactory 10.55 7 04/24/2001 Satisfactory Satisfactory 12.82 8 10/29/2001 Satisfactory Satisfactory 20.65 9 12/12/2001 Satisfactory Satisfactory 27.70 10 06/06/2002 Satisfactory Satisfactory 30.76 11 12/24/2002 Satisfactory Satisfactory 44.37 12 06/24/2003 Satisfactory Satisfactory 47.51 13 12/22/2003 Satisfactory Satisfactory 47.51 14 06/08/2004 Unsatisfactory Unsatisfactory 59.24 15 12/23/2004 Unsatisfactory Unsatisfactory 59.50 16 04/25/2005 Satisfactory Satisfactory 63.22 17 12/07/2005 Satisfactory Satisfactory 74.37 18 06/29/2006 Satisfactory Moderately Satisfactory 92.26 19 12/01/2006 Moderately Satisfactory Satisfactory 99.41 20 06/08/2007 Satisfactory Satisfactory 113.23 21 12/30/2007 Satisfactory Satisfactory 124.53 22 06/27/2008 Satisfactory Satisfactory 129.20 23 12/30/2008 Satisfactory Satisfactory 135.53 24 05/26/2009 Satisfactory Satisfactory 147.57 25 11/29/2009 Satisfactory Satisfactory 159.65 26 05/25/2010 Satisfactory Satisfactory 161.91 27 12/12/2010 Satisfactory Satisfactory 161.91 28 11/10/2011 Satisfactory Moderately Satisfactory 170.27 29 06/25/2012 Moderately Satisfactory Moderately Satisfactory 200.19 30 07/10/2012 Moderately Satisfactory Moderately Satisfactory 200.19

viii

H. Restructuring (if any)

ISR Ratings at Amount Restructuring Board Approved Restructuring Disbursed at Reason for Restructuring & Key Date(s) PDO Change Restructuring in Changes Made DO IP USD millions Additional funding of US$11 million reallocated from another IDA project, and reallocation of $15 million from 2/10/2005 S S the BMDF component for infrastructure rehabilitation in response to a major flood in September 2004 Addition of US$25 million and extension of closing date in response 12/21/2007 S S 124.53 to a major flood for urgent repairs to flood damaged infrastructure, and to further operationalize BMDF. Additional financing of US$42 23/06/2010 S S million to scale up BMDF operations.

I. Disbursement Profile

1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

Country and Sector Background. At the time of project appraisal, the path of economic growth in Bangladesh was uncertain. As discussed in the Bangladesh Country Assistance Strategy (CAS) for the period 1998-2001, it could either remain a desperately poor country or become a nascent tiger economy, but it never managed to be either. Though better than in other developing countries at that time, the country’s growth was too slow to have a significant impact on poverty. Nearly 36 percent of the population remained below the poverty line for the very poor; 53 percent below the poverty line for the poor. The Government of Bangladesh (GOB) also was confronting severe challenges in overcoming the institutional constraints to pursuing sound development activities. Despite a slowdown of population growth since independence (1971), the population (70 million) was expected to rise over the next 30 years by 60 million. The urban population had been growing at a rate of about 4.2 percent per annum. Until the early 1990s, this rapid growth was occurring mainly in the country’s four metropolitan areas (Dhaka, Chittagong, Khulna, and Rajshahi). By the latter 1990s, smaller municipalities were experiencing rapid growth rates as well.

Regardless of their size, all of the municipalities in Bangladesh at the time of project appraisal were facing: (a) inadequate urban infrastructure services; (b) weak management and financial capacity; (c) fragmentation of urban sector responsibilities among numerous central government agencies; and (c) an increasing level of urban poverty and accompanying environmental degradation. To respond to these issues, as highlighted in the CAS, the Bank aimed to assist the country in improving the coverage and efficiency of basic urban services; support private sector growth and urban poverty reduction through the formulation and implementation of appropriate strategies for institutional and financial reforms in municipalities; and support fiscal decentralization. In this context, the GOB with World Bank assistance designed the Bangladesh Municipal Services Project (MSP) to address the weak institutional and financial capacities that were undermining sustainable service delivery, and to promote sound urban management.

Rationale for Bank Assistance. The World Bank’s involvement in the project was valuable for several reasons. First, the Bank had supported the development of an urban strategy which mapped the policy, institutional, and financial reforms necessary to underpin and sustain the investments to be made in this sector, and thus improve municipal service delivery. Guided by this strategy, the Bank also had experience supporting Bangladesh’s urban sector through one urban development project, five water supply projects, and its continuing dialogue on key urban development issues. Involvement in the MSP would offer the Bank the opportunity to lead and shape the urban development agenda, particularly on policy reforms, and use its leverage to help the GOB prepare and implement institutional and financial reforms likely to have maximum impact. Lastly, the World Bank’s participation in the project would afford the Bank the opportunity to apply its broad experience in the urban sector to help the GOB and donors coordinate appropriate responses to the urban challenges in Bangladesh.

1.2 Original Project Development Objectives (PDO) and Key Indicators

The original PDO was to improve environmental and infrastructure service delivery in urban areas. Specifically, the project would: (a) strengthen the institutional capacity of selected municipal corporations and secondary towns to plan, finance, implement, and operate urban infrastructure services in an efficient and sustainable manner, (b) improve resource mobilization and allocation, and fiscal discipline through the creation of an improved financing mechanism for urban infrastructure investment; and (c) support the GOB and municipalities to reduce urban poverty and improve environmental conditions of urban communities through the financing of critical urban infrastructure and services. The original indicators that would be used to measure progress in meeting these outcomes included:

(a) Number of municipalities able to plan, prioritize, and implement service improvements by the end of the project (Phase 1:16; Phase 2:40); (b) Number of municipalities that completed management reform (Phase 1: 16; Phase 2: 40); (c) Demand driven and cost recovery measures introduced for revenue generating sub-projects; (d) Municipal Development Fund (MDF) created and operational for on-lending to municipalities; (e) Municipal Performance Review Board established and operational by the end of Phase 1; (f) Physical investments targeting poverty and environmental improvements implemented through community participation.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification

The project was restructured three times to respond to two major floods in 2004 and 2007, and to scale up the demand-driven MDF operations. In 2005, US$11 million was added to the project, together with relocation of US$15 million from the BMDF component to the Flood Damage Rehabilitation (FDR) component, in response to a major flood in September 2004. After another severe flood in 2007, the Project was allocated an additional credit of SDR15.8 million (US$24.5 million) as part of the Bank’s Post Flood Recovery Assistance Program. In 2010, an Additional Financing of US$42 million was approved to continue and scale up the project’s successful program of infrastructure and capacity building support. Thus, overall, the project received reallocations and additional funding three times for a total of US$77.5 million.

The PDO was not revised. The indicators were revised to reflect the additional financing. The revised indicators are:

(a) Municipalities (183) able to plan, prioritize, and implement service improvements by end of project. (b) Management reform in municipalities completed in 183 municipalities. (c) Introduce demand driven and cost recovery measures; the target increased to 168 municipalities. (d) Streamline BMDF operations and strengthen coordination with LGED and other relevant agencies. This indicator was introduced under the AF of 2010 to replace the one requiring “MDF operational for on-lending to municipalities” and “Municipal Performance Review

Board established and operational” because these latter two targets had been achieved during the original investment. (e) Add 150 more works packages targeting poverty and environmental improvements through community participation funded by BMDF. This indicator was introduced in the AF or 2010. At that time, 454 works packages had been completed with BMDF funding; the new target became 595 works packages.

1.4 Main Beneficiaries

As described in the PAD, the main direct beneficiaries of the project would be: (a) the residents of participating municipalities who would receive improved infrastructure services; and (b) staff at both national and local levels, who would benefit from capacity building. The PAD also notes that long-term project sustainability through community participation in the operation and maintenance (O&M) of urban infrastructure would be achieved through the adoption of the Participatory and Partnership Approach (PPA). This approach would encourage greater involvement of women in planning and managing activities that would directly contribute to improving their living conditions.

The entire municipal population, including the poor and women, would benefit from the improved coverage of services as well as upgrades of the existing municipal infrastructure. The PAD also notes that any improvements in service coverage and quality would have a disproportionately positive impact on lower income groups because they were least likely to have these services at the time of project preparation.

1.5 Original Components (as approved)

The original project had seven components divided into two phases. The first phase included civil works, equipment, and technical assistance (TA) to be implemented through the Local Government Engineering Department (LGED). Physical investments would be financed according to the traditional method of selecting investments for specific municipalities meeting IDA requirements. The second phase would support a MDF that would finance civil works, equipment, goods, and TA.

First Phase

Component 1 – Civil Works (US$35.8 million). This would include the following:

(a) Water Supply - rehabilitation of existing systems and equipment for O&M in 2 municipalities as well as urgent works (e.g., rehabilitation of hydrants, valve chambers, and overhead tanks). Khulna, which had the most severe water supply problems, would receive rehabilitation of 12 km of the distribution system (the largest amount).

(b) Sanitation - construction of 47 public toilets (latrines and washing facilities for men and women) in 15 municipalities, and a pilot small-bore sewerage program in Khulna. Communities and/or the private sector would be involved in O&M of public toilets as well as the pilot sewerage in Khulna through the PPA.

(c) Roads and Drainage - upgrading and rehabilitation of existing road and drainage networks and systems. The road improvements would include renovation of deteriorated roads; conversion of earthen, gravel, or brick roads to bitumen roads; road widening; bridge renewal; and construction of footpaths and culverts. Drainage improvements would include drain reconstruction and conversion of earthen drains to brick-walled drains. This first phase would include about 220 km road improvements and about 37 km of drainage improvements. A PPA would be used in drain cleaning, and in carrying out a public awareness campaign about the need to keep drains clear from solid waste.

(d) Bus and Truck Terminals- construction and rehabilitation of bus and truck terminals in all participating city corporations and municipalities.

(e) Slum Improvement - pilots in Khulna and about five other municipalities. Physical investments would include improved water supply, on-site sanitation, footpaths, and street lighting. Slum communities would be organized with NGOs' assistance so they could identify their own needs and priority investments programs. Communities would be actively involved in planning, implementation, and O&M.

(f) Solid Waste Management - equipment for primary collection. A PPA would be used in selecting sites for communal bins. Existing disposal sites would be improved in Khulna and Rajshahi from open to controlled dumping. Municipalities without formal disposal sites would receive technical assistance for identifying a suitable disposal site.

(g) Markets - upgrading and/or rehabilitation of 16 existing municipal markets in the municipalities participating in this phase.

(h) Land Acquisition – to implement the bus/truck terminal and sanitation components.

Component 2 – Equipment (US$3.9 million). This component includes (a) solid waste equipment to improve primary collection, including waste transport vehicles (tipping trucks and trailers) in Khulnaand Rajshahi; and (b) motor vehicles and computers for personnel located in the field, and computer equipment and consumables for support personnel at each pourashava.

Component 3 – Technical Assistance (US$ 7.9 million). This would include:

Institutional Development – most of the TA would aim at (i) strengthening and institutionalizing the Pourashava Support Unit of LGED into a Municipal Support Unit (MSU) to support city corporations and pourashavas; and (ii) creating a municipality performance monitoring unit within the MSU to develop a municipality information data base and related applications systems. The MSU would consist of: (a) a Central Support Unit located at LGED; (b) a City Corporation Unit, located at the City Corporations; and (c) field advisors assigned to groups of 3 pourashavas. In addition, a central Monitoring Unit would be set up, and consultants would be recruited for the Central and City Corporation Support Units as well as for the Monitoring Unit to design and set up systems and procedures and train MSU personnel.

Municipal Data Base - TA would be provided to create and implement a municipal information data base and related applications systems. The project also would finance the development of the database/systems and related training and implementation.

Community Development and Participation - TA would be provided for (i) hiring NGOs to develop a community participation program; (ii) conducting a workshop; and (iii) conducting a micro-credit study. The project also would finance consultants in community participation consultants to work with the MSU at various levels.

Municipal Development Fund - TA for establishing the Municipal Development Fund (MDF) involving (i) preparation of the structure and incorporating the MDF as a legal entity; (ii) establishing the management structure of the MDF, including defining the initial organization structure, writing job descriptions, and assisting in recruiting suitable individuals to man key positions; and (iii) drafting policies and procedures both for operational areas and for financial management and accounting. Completion of all TA activities would be considered triggers for the implementation of Phase II.

Studies – Phase I studies included: (i) Environmental Management Action Plans in Khulna and Rajshahi for sanitation and solid waste management, and (ii) a hydrogeological investigation for Khulna.

Project Implementation - TA for project management unit for design and construction supervision for two years initially, to be extended as needed during the second phase.

Training - provided to MSU, LGED, and municipalities. Most training would be on-the-job in accounting, planning, and management.

Project Staffing and Incremental O&M - additional staff for MSU and MDF as well as incremental O&M costs for project assets and MSU operating costs.

Component 4 - Special Consideration (US$7.6 million). Also referred to as the Chittagong Hill Tracts, Component 4 would finance physical investments in three municipalities (Rangamati, Bandarban, and Khagrachari) which had lagged behind other municipalities in service provision and urban development.

Component 5 - Flood Damage Rehabilitation (US$16.2 million). This component would finance rehabilitation of municipalities affected by the 1998 floods. The rehabilitation work would be determined upon completion of a needs assessment.

Second Phase

Component 6 - Municipal Development Fund (US$78.0 million). A Municipal Development Fund (MDF) would be established at the beginning of Phase II to start operating at the beginning of the third year of project execution. The Fund would finance municipal subprojects consisting of civil works, equipment, goods, and technical assistance. It would be established as an

5 autonomous agency, with resources provided through a US$70 million line of credit from IDA and GOB contributions.

Component 7 – Technical Assistance (US$4.6 million). This includes (a) support to the MDF specialists in sub-project appraisal, including technical review of proposals for compliance with environmental, social, economic, and financial feasibility; (b) technical support to municipalities to help them prepare sub-project proposals and FOAPs to make them eligible for MDF financing; and (c) incremental O&M costs for the MDF and MSU during the first three years.

1.6 Revised Components

The components were not revised.

1.7 Other Significant Changes

Although the components did not change, there were changes in funding and the project schedule (see table below). As a result of severe flooding in 2004, and in view of LGED’s demonstrated success in implementing the first phase of investment, US$15 million of the original credit was reallocated from the BMDF component, along with US$11 million from another project, to the Flood Damage Rehabilitation component to be used to restore critical communication and transportation networks in the affected municipalities. At that time, the original closing date of June 30, 2005 was extended to June 30, 2008. After another severe flood in 2007 and in recognition of the good implementation performance under the original project, an AF of SDR 15.8 million (US$25 million equivalent) was approved in 2008 to help rehabilitate damaged urban infrastructure as part of the Emergency 2007 Flood Restoration and Recovery Assistance Program. The funds were allocated to the MSP to be used to rehabilitate urban roads, bridges, culverts, and drainage channels in flood-affected municipalities. Also at that time, the credit closing date was extended from June 30, 2008 to June 30, 2011 because activities were to be scaled up and targets enhanced.

In 2010, there was another AF of SDR 27.8 million (US$42 million equivalent) to scale up BMDF-financed improvements in urban infrastructure as well as to continue the municipal financial and management capacity building under LGED. This new credit extended financing for urban infrastructure improvements to an additional 170 towns and extended the municipal capacity strengthening program to about 142 out of the 315 urban ULBs in the country. The AF also tightened fiduciary controls and supported the development of a program of improvement in urban infrastructure and institutional development over the medium term that would become the basis of projects to be funded by the Bank or other agencies. In addition, the BMDF would provide follow-up financing to 16 municipalities that made particularly good use of the first financing and could carry out further investments, and MSU would continue its trouble shooting for the 133 municipalities that had received support for capacity building. The AF also resulted in another extension of the closing date to June 30, 2012.

Changes in World Bank Financing for MSP – 1999-2012

Component Appraisal Reallocation of Additional Additional Total Estimate $15 m from Financing Financing (1999-2012) BMDF to FR (US$25 m) for (US$42m) and US$11 m FR (Cr 3177- (Cr 4761- added from 1-BD) BD) other project Year 1999 2004 2008 2010 2012 Phase I- Physical 32.5 32.5 Investments (15 m of orig. Phase II- MDF 70 credit reallocated 36.84 91.84 to FDR) Chittagong Hills Tracts 7.6 7.6

TA and Project 10.8 4.41 15.21 Staffing Flood Damage Rehabilitation 16.2 26 25 67.2 (FDR) (US$15m +$11m ) Incremental O&M Costs 1.5 .75 2.25

Total 138.6 26 25 42 216.6

Note: The US$11million allocated to the MSP from another project does not appear in overall project financing in the World Bank project data sheets. The total reported by the Bank system is US$205.6 million. Also note that the overall total takes into account the reallocation of US$15 million from the Phase II-MDF in 2004 to the FDR component.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

QAG rating – Highly Satisfactory

QAG provided the highly satisfactory rating on QAE on the basis of the following main points. First, the team made a serious effort to analyze the difficult institutional issues and came up with the means for addressing them. QAG also noted that the project had benefited from an earlier decision to delay project preparation in order to undertake urban sector work that provided the core of the analysis and the proposed solutions as well as the time to build up support within the country. QAG further acknowledged the serious effort made by the team to incorporate social development issues in a sensitive, focused way that would help navigate the institutional and

bureaucratic difficulties, clear team commitment and support in LGED, and an understanding of the risks taken and the appropriateness of the measures contained in the project to address them. The ICR agrees with the points raised by QAG, but not the rating. The following are additional factors that would support a satisfactory rating.

The design was appropriate to meet the project’s objectives. The project’s development objectives were clear and the components were well designed to address them. The project would address the (i) urgent need for basic urban services, particularly in small ULBs with low- income areas, (ii) weak local government institutions through the provision of technical assistance to improve the institutional and financial capacity of participating municipalities; (iii) poor local resource mobilization and cost recovery through the establishment of a municipal development fund and capacity building; (iv) prior neglect of the O&M aspects of infrastructure by focusing on rehabilitation, and provision of technical assistance towards maintenance activities; and (v) need to improve sustainability of services through a participatory and partnership approach (PPA) in the planning, implementation, and O&M of these services.

The design took into account the Bank's experience with earlier urban projects worldwide and in Bangladesh. The team responsible for project design was aware that many of the earlier multi- sectoral urban projects that focused on poverty alleviation through investments in basic infrastructure and housing included poorly integrated and ill-prepared components were too complex to be properly implemented. The design took into account the need to simplify the design, be realistic in determining small municipalities’ financial capacities, and emphasize strengthening of their financial and institutional frameworks to help ensure sustainability.

Prior to the MSP, the Bank’s involvement with the urban sector in Bangladesh included the Urban Development Project (approved in FY88), which focused on slum upgrading in Dhaka and drainage improvements in Dhaka and Chittagong, and five IDA-financed urban water supply projects. Although physical progress on the completed projects was satisfactory, the institutional and financial performance was not adequate and the projects confronted problems related to land acquisition, counterpart financing, and procurement. Based on the lessons from these earlier projects, the design emphasized the need for: (a) generating broad stakeholder commitment and interest; (b) establishing the willingness of the municipal authorities to borrow for the improvements before funding would be committed, and (c) directing attention to such issues as land acquisition, sub-project design, and procurement arrangements during project preparation.

Based on the lessons from the completed projects, the design also responded to the need to: (a) achieve sustainable institutional and policy improvements by emphasizing underlying institutional problems rather than on achieving specific institutional and financial targets; and (b) establish a clear link between underlying problems, project objectives, and the project components. These issues were addressed in the project mainly through the demand-driven approach inherent in the BMDF.

Because the introduction of the BMDF represented the first time that such a fund would be established in Bangladesh, an important lesson learned from experience in other countries was that the sustainability of such a funding mechanism would depend on the creditworthiness of its borrowers, and the need for a strong commercial orientation of the fund, which would operate without political interference. Taking into account the weak capacity of the ULBs in Bangladesh, 8

however, the design incorporated a realistic approach to assessing eligibility by requiring a participating ULB to prepare a Financial and Operational Action Plan (FOAP), which included an assessment of capacity and a plan for improving the ULB’s financial standing so it could sustain an investment in urban infrastructure. The design also took into account the need to establish the BMDF as a commercially oriented, autonomous agency that would introduce transparency and equity into resource allocation for urban infrastructure nationwide.

Project design took into account alternative approaches, the trade-offs between them, and the rationale for the final decisions. The three alternative approaches included: traditional urban lending versus the MDF approach, traditional grant financing versus loan grant financing mix, and single project versus phased approach. Unlike the traditional approach with pre-selected municipalities and components, introducing the MDF was considered optimal because the ULBs applied for demand driven financing (and differed from the supply driven approach) for providing long term and sustainable infrastructure financing and capacity building. The loan- grant financing mix was considered preferable to traditional grant financing because it had the potential for leveraging funds for greater cost recovery.

Project design benefitted from public participation and consideration of social issues. The project took into account the results of a social assessment, and the possibility of causing resentment on the part of the municipalities that are lagging in reforms to receive funding that had traditionally come from the central government. To mitigate this risk, the BMDF would be set up as an autonomous agency under the Ministry of Finance, with financing decisions made by a Steering Committee/Board of Directors from different spectra of society. The design also incorporated a PPA to help ensure ownership and the social sustainability of the project. The design could have been improved if it included funds for carrying out beneficiary assessments during project implementation to determine the extent to which the ultimate beneficiaries were satisfied with the project-related processes and improvements.

Notwithstanding the above, the ICR team noted QAE issues that were not adequately addressed during the design of the investment.

The main project outcome indicators were not clearly defined. Although the main PDO objectives were well articulated, there could have been clearer definitions of the PDO indicators such as “municipality is able to plan, prioritize, and implement service improvements by end of project” and “management reform was completed.” With regard to the outcome relating to support for reducing poverty and improving environmental conditions in urban communities through community participation, it would be difficult to establish targets for these in the PAD when a large part of the project’s physical investments would be demand driven and determined only after the project was under implementation.

The design underestimated the time needed to establish and operationalize the BMDF. Based on the original design, the BMDF was expected to be established as a legal entity with a clear ownership and management structure, registered with all concerned agencies, and ready to administer $78.0 million of project funds after two years of project implementation. The team greatly underestimated the amount of time it would take to obtain all the necessary approvals and financial flow arrangements for the MDF to be registered and operational.

The design could have included mechanisms to better coordinate local capacity building with BMDF investments throughout the entire project period. Better planned and programmed technical assistance could have been available throughout the project to help ensure that the ULBs that received funding would have the necessary capacity to adequately maintain them.

2.2 Implementation

The MSP had a 12-year implementation period. The project became effective on October 25, 1999 and closed on June 30, 2012, seven years after the original closing date. The total project financing increased by $77.5 million during the 12-year period with three reallocations and additional funding. Several factors influenced project performance and justified the need for multiple project extensions. The three most important factors were: (a) the implementation competence of LGED and successful implementation of Phase I investments; (b) the delay in establishing and operationalizing the BMDF, and its subsequent success leading to an AF in 2010; and (c) massive floods in Bangladesh during the years 2000, 2004, and 2007 which led to additional allocations of funds in 2004 and 2008 in order to respond to the urgent need to repair damaged infrastructure. These and other factors are discussed below.

Phase I Performance. Despite initial start up delays, the implementation of Phase 1 investments was carried out successfully. More than 95% of the original MSP components (LGED portion) were completed by June 30, 2005, the original closing date. Capacity building through the Municipal Support Unit (MSU) was set up within LGED and continued throughout the life of the project to build institutional and financial capacities in the ULBs, and to assist municipalities in meeting the eligibility criteria for project support. The good performance under Phase 1 reflected LGED’s strong leadership which continued throughout project implementation. The strong performance under Phase 1 and the need to address urgent repairs caused by the floods of 2000, 2004, and 2007 also led to additional project funding, which greatly increased the number of activities to be led by LGED. Thus some of the original target dates could not be met.

BMDF Delay and Subsequent Performance. Although the Borrower was fully supportive of the concept of BMDF during project preparation and appraisal, the Fund was not formally registered until 2002, and not fully operational until 2004, three years behind the original schedule. The main reasons for the delay related primarily to: (a) the fact that the government was in transition in 2001 when the BMDF was expected to become operational, and the transitional government put the decision to formally register the BMDF on hold until the new government took over; and (b) the severe floods of 2000, which diverted the attention of the project staff to finance urgent works to repair critical transportation and communications networks. Despite the start up delays and its difficulties in securing good quality technical staff and consistent leadership, the BMDF ultimately became an effective instrument for allocating funds to ULBs for critically needed infrastructure improvements. This assistance would not have been available to many ULBs, especially the small municipalities, if they continued to depend solely on the block grants administered from the national governments.

As a result of BMDF’s successful operation, in 2010, US$42 million was added to the project to help finance the scaling up of improvements in urban infrastructure as well as municipal

financial and management capacity. At that time, the project was performing well. There were significant benefits achieved in the participating municipalities as well as a strong demand for additional support. The AF would help to extend the financing of urban infrastructure improvements to some 170 towns, and extend the municipal capacity strengthening program to about 183 municipalities (out of 315 urban local bodies in Bangladesh). The AF of 2010 also would support development of the next generation of urban improvement programs and require tightening of fiduciary controls.

By May 2010, practices adopted under the project for municipal institutional and infrastructure development represented significant improvements, including: (a) greater authority and responsibility of the municipalities in selecting and implementing the investments with matching operational and financial plans, (b) substantial self and loan financing requirements, (c) improved project evaluation and management, (d) improved municipal management and revenue systems, and (e) improved procurement practices.

Demand for BMDF Financing. Throughout project implementation and after closing, there has been a continuous demand for BMDF support for infrastructure projects, and sense of ownership on the part of the participating ULBs and project communities. By the time of project closing, there was a backlog of over 200 project proposals seeking funding.

Floods and Related Changes in Project Financing, Activities, and Schedule. Following the serious flood and heavy rainfall during the 2004 monsoon, a joint decision was made by the GOB and World Bank that urgent rehabilitation works in 67 flood-affected municipalities would be undertaken with IDA support through a credit reallocation of US$15 million from BMDF to LGED. The project also received a reallocation of US$11 million from the Private Sector Infrastructure Development Project (Cr. 2995-BD). Accordingly, the DCA was amended and the credit closing date was extended to June 30, 2008. In response to another flood crisis in 2007, through the Emergency 2007 Flood Restoration and Recovery Assistance Program, the MSP received additional financing of US$25 million to support rehabilitation of urban roads, bridges, culverts, and drainage channels in municipalities damaged by the floods. This AF was allocated to MSP on the basis of LGED’s strong performance under Phase I. Through this, LGED again demonstrated its effectiveness in expediting the urgent works needed to address critical flood damage in numerous municipalities. The change also meant an extension of the closing date to June 30, 2011. Finally, the AF of 2010 (US$42 million) was allocated to the MSP to allow the BMDF and LGED to further strengthen their investment and capacity building programs. The AF also supported the preparation of a follow up investment.

Mid-Term Review. The MTR (2002) provided a comprehensive assessment of progress toward development objectives and implementation performance. While the review recognized that the overall implementation of the project’s first phase was satisfactory, it raised serious concerns that the project encountered what was then a two year delay in establishing the BMDF. The Bank also noted in its review that it may have been overly optimistic given the country context, the weak institutional capacity of municipalities, and inherent governance problems to expect completion of all first phase investments, involving over 1,000 contracts within two years. Thus, the main recommendations of the MTR were to revise some of the project outcomes and target

dates to take into account the delays. Also at that time, the procurement rating dropped from satisfactory to moderately unsatisfactory due to mis-procurement affecting six contracts.

Managing Project Risks. In June 2004, the IP rating for the project was downgraded to unsatisfactory; progress toward achieving the PDO also was made unsatisfactory because the BMDF was still not operational. By the end of 2004, however, progress in establishing the BMDF was underway with the initial institutional arrangements in place. It had a core team of staff headed by a Managing Director, and had advertised its program, inviting interested ULBs to apply. It also had appointed two sets of consultants, one group to work with ULBs in proposing investments for BMDF financing, and a second group to manage and supervise the BMDF- funded works. By March 2005, MDF had set up lending operations with construction work underway in 20 ULBs with adequate engineering supervision and quality control and fiduciary safeguards in place. In addition, the MSU and BMDF agreed on a plan to cooperate in developing ULB capacities, and set up the means to coordinate activities and update the plan. With these results, project performance rating was upgraded to satisfactory in April 2005, and the Bank approved a two year extension of the closing date.

During project implementation, there were only about 15 instances of mis-procurement out of a total of approximately 2000. In Bangladesh, where there have been severe governance issues, this relatively small number was not considered to be significant and reflected overall acceptable performance. It is also noted that procurement under the BMDF component was implemented by small municipalities with weak capacities and had no prior experiences with World Bank or other IFI-financed projects. However, two new arrangements were put in place in the AF 2010 to improve governance in procurement and prevent or mitigate associated risks. These were: (a) implementation of a procurement risk mitigation framework that would include preparing quarterly reports on 45 procurement performance indicators, including fraud and corruption; and (b) hiring a full time procurement officer under BMDF with good knowledge of national and international procurement. Before the first procurement started, BMDF would ensure that each participating municipality had a procurement focal person with appropriate training on national procurement. BMDF also would retain a consultant team that included at least one procurement specialist who would participate as a member in each bid evaluation committee.

Participatory Approach. Another factor contributing to the success of project implementation was the Participatory and Partnership Approach (PPA) developed under the project and implemented through four Partner Organizations (POs) initially in four regions. The POs worked with the municipalities and local NGOs to establish ownership and participation in the delivery of the sub-projects. Municipalities later developed their own capacity for PPA under phase two. The strong ownership for the sub-projects on the part of the mayors and the local community involved in selecting them can be expected to be a significant factor to ensure their sustainability. Further, LGED supported community mobilization programs in municipalities to motivate all actors (for example, ULB personnel, local elites, community leaders, urban dwellers) to organize and mobilize resources for improving provision of municipal services and to have community members participate in O&M for the urban infrastructure.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

Design. The PAD included a results framework with outcome indicators that could not all be used for measuring how the project would achieve its PDO. For example, if the PDO aims at improving urban environmental service delivery, the results framework would need to specify at least one indicator with specific targets for some level of environmental improvement, or this part of the PDO should have been omitted. The results table also could have been improved if it contained indicators relating to project sustainability. Nonetheless, almost all of the intermediate outcome indicators were measurable and the targets were generally realistic. Due to their efficacy, many of these indicators were retained to monitor progress under the AF or 2010. In fact, the results framework remained essentially the same for the AF of 2010 with two outcome indicators replaced because they had been achieved under the original credit. However, the remaining indicators, particularly those relating to municipal reform, could have been more clearly articulated for the AF.

Implementation. LGED set up a national urban database to incorporate ULB-related data collected from the field through 11 specific formats encompassing infrastructure, urban facilities, and pertinent elements of revenue collection. The MSU also prepared progress reports on the status of implementation of the FOAPs. The monitoring system set up at the national level produced regular reports on investments linked to disbursement and the financial management systems in ULBs. In addition, BMDF hired consultants to report on a monthly basis the status of sub-projects. However, the system did not provide data relating to sub-project sustainability so it would be clear where MSU capacity building for improved cost recovery and other aspects of municipal management could be targeted.

Utilization. The PMU, BMDF, and Bank teams used project monitoring information as the basis of their discussions during each implementation support mission. Specifically, they used the information to identify areas of particular challenge and to identify measures to address them. For example, the teams observed slow procurement of several major contracts and agreed on actions (such as hiring more procurement officers under Bank-finance) to speed up the process. The relevant institutions maintained detailed monitoring systems to ensure that all were aware of any diversions from the schedule early on, and could take mitigating action as soon as possible. In addition, the regularly collected data from different ULBs on municipal tax arrears owed by different GOB and semi-government offices were aggregated at different points in time and transmitted to the Ministry of Finance for allocation of appropriate funds for their settlement.

2.4 Safeguard and Fiduciary Compliance

Safeguard Compliance. All of the project’s safeguard requirements were fully met prior to project approval, and prior to the implementation of the phase 2 investments. During project implementation, however, both the social and environmental consultants hired by the project were not monitoring safeguard compliance in a consistent manner.

OP 4.01 - Environmental Assessment. The performance of the implementing agencies could have been improved with regard to OP 4.01. Although the types of investments under the project (that is, primarily rehabilitation of existing infrastructure) normally do not have significant negative

environmental impacts, there was inconsistent monitoring of these sub-projects. For example, BMDF’s consultants were asked to send environmental specialists to carry out random sample of sub-projects to ensure that they had received the Department of Environment certification. However, the Bank’s environmental safeguard specialist noted that the consultants did not carry out a sufficient number of field trips, and the monitoring reports did not correspond to the planned number of field visits. Nonetheless, there were no significant negative impacts reported, and the environmental safeguard compliance has been rated satisfactory throughout the project.

OP 4.12 - Involuntary Resettlement. Most municipalities implemented small scale infrastructure sub-projects development with funding through the BMDF largely on the municipalities’ own land. According to national laws, none of the subprojects were implemented on private land. Nonetheless, both the World Bank’s specialist in social safeguards, and BMDF’s Social Safeguard Specialist (Consultant) visited project sites periodically to ensure that the project was in compliance. When issues were identified, they were resolved later by BMDF.

Procurement. Overall, procurement under the project has been satisfactory. All of the procurements under the project were subject to compliance with the World Bank Procurement Guidelines, which were unfamiliar to the municipal authorities. Thus, at the beginning of the project, in some cases, there were deviations leading to cancellation of bids and re-bids. The Bank team helped the borrower overcome this issue through orientation workshops and training on World Bank Procurement Guidelines. The BMDF also provided training to ULBs in procurement to meet World Bank rules.

Out of approximately 2,000 procurements, there were about 15 cases of mis-procurement. In Bangladesh, where there are severe governance issues, this relatively small number of mis- procurements reflects overall acceptable performance. Nonetheless, the performance was further improved with the introduction of a Procurement Risk Framework (PRF) under the AF of 2010. The PRF, which included 45 indicators, was relevant to the Bangladesh context and was applied throughout the project period.

Audit. From time to time, project activities were audited by the Foreign Aided Project Audit Directorate (FAPAD) under the Office of the Comptroller and Auditor General (OCAG), the Supreme Audit Institution (SAI) of Bangladesh. The project was also subject to audit by private firms. During implementation of the project, the World Bank’s appointed external audit firms (independent of LGED) two times to carry out a technical audit along with procurement and financial management audits on a sample basis. In all cases, the findings were satisfactory.

Financial Management. Both the LGED and BMDF met their financial management obligations. The required audit reports were sent to the Bank; where there were any objections or issues, these entities were fully responsive. The Bank team’s FMS did not report any major problems since the start of project implementation.

2.4 Post-completion Operation/Next Phase

Due to the success of MSP, the Borrower is planning a follow up project to be implemented in the country’s secondary cities, and the BMDF already has a list of more than 200 proposals for

projects that need funding. A World Bank investment, currently under preparation, will continue supporting subprojects aimed at improving urban services for the poor and providing more targeted institutional capacity building to address sub-project sustainability and broader governance issues. The investment also would assist the BMDF in planning for its longer term sustainability after the project closes.

The MSU continues to provide technical assistance to municipalities through the Asian Development Bank (ADB) financed support for capacity building under its Urban Governance and Infrastructure Improvement (Sector) Project (UGIIP). In addition, the Japanese International Cooperation Agency (JICA) and the Government intend to implement other municipal capacity building support through the MSU. In addition, the Municipal Performance Review Committee (MPRC) continues to review the performance of municipalities. After the MSP closed, other development institutions are using the MPRC for performance reviews of the municipalities included in the projects they support.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

The PDO, design, and implementation of the MSP remain highly relevant to the current country and global priorities as well as the Bank’s country assistance strategy at the time of project appraisal (1998) and the most recent strategy covering the period 2011-2014. Cities in Bangladesh continue to grow at a rapid rate and the ULBs throughout the country continue to need support for planning, financing, implementing, and sustaining critically needed municipal infrastructure and improvements in urban services. The reforms established under the project, particularly with regard to the improved resource allocation for infrastructure investment in municipalities through the BMDF, allowed ULBs that met certain criteria to obtain funds to finance critically needed improvements that would not otherwise be available if they had to continue to rely only on the block grants allocated to them by the national government. This issue continues to be a priority for most ULBs around the country. The implementation arrangements also continue to be highly relevant. LGED’s institutional and technical capacities continue to be essential for supporting ULBs in planning and implementing urban infrastructure services. BMDF is the most appropriate vehicle for allocating resources to eligible ULBS for infrastructure investments around the country.

3.2 Achievement of Project Development Objectives

The MSP achieved its objective of improving environmental and infrastructure service delivery in urban areas. Through the financing of infrastructure and urban service improvements, and introduction of dedicated capacity building to selected municipalities, the participating ULBs are now more capable of selecting and preparing priority investments, delivering urban services, and contributing to an improved quality of life for the affected populations. They also have achieved greater financial discipline and taken steps to improve cost recovery and other measures of good governance, for example, through the participatory approach to identifying priority projects. Most of the PDO and Intermediate outcomes were achieved as described below.

PDO Indicators

(a) Strengthen the institutional capacity of selected municipal corporations and secondary towns to plan, finance, implement, and operate urban infrastructure services in an efficient and sustainable manner.

 By the end of the project, 183 ULBs had developed the capacity to plan, prioritize, and implement service improvements. This was achieved through the technical assistance provided to them in preparing the FOAPs (a requirement for project funding); the MSU Municipal Capacity Building Program support which was designed to help them prepare the plans and improve their institutional and financial capacity to ensure the sustainability of the project investments; and BMDF’s ongoing technical support during project implementation. The Indeed, the MSU program continues to deliver capacity building as part of the Government’s ongoing activities.

 Participating ULB officials are now able to carry out their municipal functions in a more efficient and sustainable manner. Through the capacity building and training programs provided by the MSU Municipal Capacity Building Program provided to 183 ULBs, authorities and personnel, including ULB engineers and accountants, in the municipal corporations and secondary towns improved their capacities for carrying out procurement procedures, quality control of civil works, and accounts management. The capacity building encompassed: computerization and improved management of holding tax bills and records, municipal accounts, water supply bills and records, and trade license records; development of infrastructure inventories and preparation of base maps; and support for community mobilization activities as well as requisite hardware, equipment, and logistics. These inputs resulted in significant improvement in municipal services delivery, tax management, infrastructure planning, and O&M. For example, based on a 2012 survey of 102 mayors, 98 percent reported an increase in revenue income, development of staff capacity and skills, improved service delivery standards, and an increase in accountability and transparency. Among 57 water utility staff interviewed, moreover, 93 to 95 percent reported that they were able to deliver water bills on time, transparency increased due to collecting water bills through banks, and collection efficiency increased (see annex 5).

 Participating ULB officials obtained skills for project implementation. Through BMDF’s capacity building support, the mayors and ULB officials directly involved in sub-project preparation and implementation obtained skills needed for preparing tender documents, tender evaluation reports, and contracts; carrying out project implementation procedures; ensuring quality control; instituting new billing systems; implementing a social impact management framework; preparing an environmental impact monitoring format; and applying the procurement risk mitigation framework.

 Reform of tax collection systems was carried out in 142 ULBs. Computer software developed under the project, such as those designed for holding tax, water billing, trade licensing, and non-motorized vehicle management was transferred to city corporations and municipalities. A limited survey of municipal employees and residents confirm the benefit of the improvements in billing and tax collection (see annex 5). For example, 16

among 102 mayors surveyed, almost all recognized an increase in revenue, development of their staff’s capacity and skill, improved service delivery standards, and an increase in accountability and transparency. In addition, nearly all respondents (the paurashava authority, paurashava staff, and citizens) consider the MSU’s Municipal Capacity Building Program to be well-timed with beneficial effects. The paurashava holding tax revenue collection efficiency figures show that positive changes occurred in 80 paurashavas out of 100 paurashavas after computerization. Water billing revenue collection efficiency also improved in 34 out of a total of 48 pourashavas. Before computerization, there was no infrastructure database or base maps in any of the paurashavas. Now there are 105 complete databases and 79 complete base maps out of 133 paurashavas. Before the MSP, there was very little community-related support for paurashavas. Citizens’ awareness campaigns, formation of Town Level Coordination Committee, Ward Level Coordination Committee, and Community Based Organizations were started for the firm time under the MCBP.

 ULBs continue to improve in covering municipal service O&M. Although data were not collected to confirm the extent to which all the municipalities that received financing for their sub-projects are covering the O&M costs, available data indicate that as a result of the technical assistance provided to ULBs in demand driven and cost recovery measures in 162 municipalities, about half reported improvement in their post- computerization holding tax collection. Tax collection rates improved by 12.7% (pre- computerization was 45.68% compared to 58% post computerization efficiency), and water rates collection efficiency rose from 57% to 66% in 51 ULBs; the overall change was about 9%. After the project closed, the MSU has continued to provide capacity building under ADB’s UGIIP. Both JICA and the GOB also have plans to implement other municipal capacity building activities through the MSU, thus providing further support for municipalities in planning and implementing sustainable services.

“Through the support from BMDF, we constructed roads, drains, and extended 4.5 kilometers of water lines. We also installed energy saving bulbs for street lighting. As a result, we are able to extend services to more civic facilities. In return, people are paying taxes.” (Mayor, Tongi)

“With funds from BMDF, we were able to purchase energy saving bulbs that reduced our energy costs by 40 percent.” (Mayor, Singra Municipality)

(b) Improve resource mobilization and allocation, and fiscal discipline through the creation of an improved financing mechanism for urban infrastructure investment.

 The BMDF was established in 2002 and fully operational in 2004. As a result of the project, the BMDF (licensed under the Companies Act of 1994) was officially registered in 2002, became operational in 2004, and subsequently appraised and financed 584 works packages for urban infrastructure and environmental improvements in 154 ULBs. To be eligible for funding, ULBs were required to meet the following criteria: availability of skilled engineers and accountants; rate of collection of tax at least 65%, initiation of a master plan/detailed area plan, and surplus revenue to contribute its own share. The

recipient ULB is required to contribute 10% of the total cost of the non-revenue generating investment and BMDF bears 90% of the sub-project cost. Of this 90%, BMDF provides 85% as a grant and 15% as a loan to the participating ULB. The recipient ULB is committed to repay the loan in 37 installments with a 1 year grace period. According to BMDF, the project achieved a 75% repayment rate.

 BMDF improved resource mobilization and allocation as well as fiscal discipline in participating municipalities. As a government owned company, BMDF continues to provide financial support through grants and loans to municipalities that meet certain qualification criteria with an emphasis on revenue collection and sound financial management. Unless the municipalities fulfill these requirements, they will not be able to borrow from the BMDF. To help establish financial discipline, ULBs that do not repay the loan would lose a portion of its block grant allocation. The BMDF, now de-linked from the project, has created a competitive environment in the field of local resource mobilization and financial discipline. With the creation of BMDF, a new funding window was opened for eligible municipalities. Prior to the establishment of the BMDF, many small and medium sized municipalities had no other option for securing funding but to rely on the block grants provided by the central government.

 During implementation of the AF of 2010, BMDF streamlined its operations. These included: (i) development of a standard project implementation methodology and prototypical designs for urban infrastructure; (ii) contribution and use of the design and implementation of a social impact mitigation framework, environmental impact management framework, procurement risk mitigation framework, and city-specific financial and operational action plans during project implementation; (iii) restructuring of staff salaries so as to retain core BMDF officials; (iv) arranging for the monitoring and supervision consultants to occupy the same offices as the BMDF officials which facilitated activities to ensure the quality of project works; and (v) rationalizing and updating BMDF service rules and policies (for example, travel advance policy, transportation rules, advance repayment rules).

 During implementation of the AF of 2010, BMDF strengthened its coordination with LGED and other relevant agencies. BMDF officials: (i) followed LGED schedules of rates in preparing estimated bills of quantities for bidding documents prior to project implementation; (ii) formally requested that the Chief Engineer of LGED provide facilities of their laboratories for testing construction materials; (iii) tested materials and workmanship in LGED laboratories; (iv) used help from the local Universities of Engineering & Technology, Science and Research Laboratories, Public Health Engineering Department as well as Department of Environment for testing materials and exchanging views regarding technical issues as and when required; (v) provided input to LGED in preparing the training module on preparing FOAPs; (vi) took an active part as resource persons in the training organized by the MSU of LGED; and (vii) jointly worked with LGED officials as members of procurement-related committees, when required.

The Municipal Performance Review Committee (MPRC) was established in 2000 at the ministry level. Chaired by the Secretary of the Local Government Division, its main

purpose is to review the performance of the municipalities. As such, all development partners have and are continuing to use the MPRC for the performance review of the municipalities included in the projects they support.

(c) Support the GOB and municipalities to reduce urban poverty and improve environmental conditions of urban communities through the financing of critical urban infrastructure and services.

 The first phase of MSP investments financed critical urban infrastructure and services, all aimed at reducing urban poverty and improving environmental conditions. The project addressed an urgent need for basic services in the ULBs, particularly in low-income areas, and improvement in the quality of urban services by investing in the following under the first phase of MSP implementation under LGED:

o 10 water supply wells replaced, 10 abandoned wells regenerated, 20 pump houses rehabilitated. o Rehabilitation of nearly 16 km of water distribution system, along with installation of 2,500 domestic water flow meters. o Rehabilitation of 150 street hydrants and 54 hand pumps. o Rehabilitation of 1 overhead tank and construction of storage shade. o Rehabilitation of a water treatment plant and an iron removal plant. o Installation of 35 public toilets. o Construction of a 5 km small bore sewerage system o Upgrading and rehabilitation of about 250 km of urban roads o 40 km of drainage improvements (through drain reconstruction and/or conversion of earthen drains to brick-walled drains) o Construction and rehabilitation of 11 bus and truck terminals o Slum upgrading in Khulna that included 303 dug wells, construction of a 3,357 meter drain with footpath, roughly 7,300 meters of surface drain, a 16,852 meter footpath, and 540 meter landing approach o Provision of about 680 communal solid waste collection bins o Upgrading and/or rehabilitation of 19 kitchen markets o Acquisition of about 10.5 ha for implementing the bus/truck terminals and sanitation investments

 BMDF investments aimed at poverty alleviation and improved urban environmental conditions. They included:

o 1,128 km of road were built or rehabilitated in 141 ULBs. o 260 km of drain were built or rehabilitated in 103 ULBs. o 211 kitchen markets were developed in 59 ULBs. o 173 km of water supply pipelines were installed in 24 ULBs. o 36 deep tube wells were constructed in 15 ULBs. o Construction of water treatment plants in 2 ULBs. o 87 public toilets installed in a total of 36 ULBs. o 32 box culverts constructed in 13 ULBs.

o 24,960 sets of street lights added in 24 ULBs. o 9 bus/truck terminals established in 9 ULBs. o 15 community centers established in 14 ULBs. o 8 slaughterhouses built in 6 ULBs. o 7 office complex buildings built in 7 ULBs.

 Project beneficiaries and other stakeholders reported that the project-financed infrastructure improved their living environment and had benefits for their health and productivity. A qualitative evaluation carried out by Development Support Link (private company) in July 2007 showed that the project investments: (i) increased the value of trade and business (ii) increased prices of land (iii) generated employment (iv) increased enrollment of both boys and girls in the schools and colleges (v) supplied a large numbers of goods and commodities (vi) improved public health (vii) eliminated water logging in some areas (viii) decreased water-borne diseases, and (ix) improved the overall environment (see annex 5).

 Project implementation generated employment and prospects for further job creation. During implementation of the project, the adoption of labor intensive technology for construction works generated 13,500,000 days of short-term employment. In addition, the O&M of the assets created under the project is expected to create longer term jobs in O&M.

“With funds from the BMDF, we constructed kitchen markets, and vegetable growers are getting reasonable prices and side by side revenue collection is also increased.” (Mayor, Lalmonirhat Municipality)

 The physical investments targeting poverty and environmental improvements incorporated a participatory planning approach to promote greater involvement of the residents in selecting and implementing priority investments. The participatory approach adopted by the project created a “sense of ownership” among project beneficiaries for the BMDF-financed sub-projects. Although one component specifically targeted slum conditions, most of the project investments in urban infrastructure aimed at poverty and improvement of the urban environment. BMDF’s investments also emphasized not only the physical development of the ULBs, but the socio-economic improvement of its inhabitants. For example, the improved road network would help people to move quickly, easily, and safely from one place to another and helped the municipality’s local economy, trade, and business. In providing community mobilization support to the municipalities, MSU helped to establish 67 town-level coordination committees, and 254 CBOs at the grassroots level.

Intermediate Outcome Indicators

 The Municipal Development Fund was established on March 9, 2002 (Indicator 1.1).  The Municipal Performance Review Committee was established on June 30, 1999 ( Indicator 1.2)

 The Municipal Support Unit was fully staffed and working by October 25, 1999 (Indicator 1.3).  The Partnership and Participatory Approach was designed, in agreement with the Bank, on September 30, 1999 (Indicator 1.4)  All Phase I participating city corporations and municipalities implemented a Financial and Operational Action Plan (FOAP) by June 30, 2000 (Indicator 1.5)  At least 40 other municipalities implemented a FOAP by June 30, 2004 (Indicator 1.6).  Almost all planned physical investments (see Annex 2 for project outputs) were implemented under phase one by December 31, 2006 (Indicators 2.1 - 2.7).  Under the AF 2010, by the end of the project, BMDF had worked with 154 out of the planned 168 municipalities and financed 595 sub-projects with a loan recovery rate of 75 percent (New Indicator).  Under the AF2010, by the end of the project, the MSU extended capacity building to 50 additional municipalities, and of the 39 municipalities surveyed, the overall average increase in collection efficiency was 17.5 percent. Among these municipalities, 23 had holding tax collection rates in the 48 to 95 percent range (New Indicator); another 7 municipalities had collection efficiency in the 40-47 percent range.

3.3 Efficiency

As discussed above, the civil works undertaken under the project’s first and second phase included road construction, water supply, sanitation, drainage, bus and truck terminals, slum improvement, solid waste management improvements, and markets. The project also included technical and institutional support activities. In the case of civil works under phase 1, the ICR team was not able to assess the benefits because adequate data were not available on the outputs and associated economic and technical parameters. Because the benefits of the project-financed technical assistance and institutional support are not quantifiable, an economic analysis was not attempted for these investments. For the phase two investments in civil works, however, it was possible to carry out an economic analysis for selected investments in roads, roadside drainage, and bus terminals given the availability of data. Annex 3 summarizes the overall results of the economic analysis carried out for the ICR.

Measures of Economic Efficiency. The analysis relates the project costs to the economic value stream of benefits from the specific project investments. In the case of roads, the benefits included savings in vehicle operating costs, savings in travel time and travel costs, and the indirect benefits from the economy-wide multiplier impacts of wage incomes from construction- related expenditures for the civil works. In the case of roadside drainage, the analysis considered the revenues from user charges and the multiplier impacts of wage incomes for the civil works. As in the case of roads, the benefits of the bus terminals include savings in vehicle operating costs, savings in travel time and travel costs, and additional revenues from the improved bus terminals. The summary of estimated benefit-cost ratios and the Economic Rates of Returns (ERRs) on investments are presented in the table below.

Summary of Measures of Economic Efficiency of Investment

Investment Economic Rate of Return Benefit-Cost Ratio Roads 27 to 30.6 2.3 Roadside drainage 22 1.5 Bus terminals 23 1.65

The analysis shows that the project yielded modest returns measured in terms of benefit-cost ratios, ERRs, and Net Present Values of cost and benefit streams. In the case of roadside drains, there are also indirect benefits such as reduced damage to the roads and consequent savings in road repairs, improved road transport efficiency in monsoon seasons, and the environmental and health benefits of adequate drainage. Indirect economic benefits are not included in this analysis because we do not have data on these benefits. However, it may be noted that accounting for such benefits will significantly improve the measures of economic efficiency.

The benefits from the technical and institutional support provided under this project were not estimated because such benefits are not quantifiable. Further, there were multiple civil works and investments under the project in two phases, including the Additional Financing of 2008 and 2010. Because we did not have data to estimate the benefits from each of these investments, it was not possible to estimate measures of economic efficiency for the entire project. Nonetheless, the PAD provided estimates of expected rates of return on investments in roads, drainage, and bus terminals. Our results are in agreement with those estimates for the specific investments analyzed.

3.4 Justification of Overall Outcome Rating

Rating: Satisfactory

Achievement of the objectives of MSP is rated satisfactory. The project’s objectives, design, and implementation arrangement remain highly relevant. Rapid urbanization continues in Bangladesh, overwhelming the capacities of most cities to provide the infrastructure and services to ensure the health, safety, and productivity of their populations. The continuing demand for BMDF support and the overall success of the BMDF concept under the MSP demonstrate that the project continues to be relevant. Further, the project substantially achieved its original intended outcomes, and most of the intermediate indicators were met or exceeded with regard to institutional reform, establishing and operating the BMDF, and the physical investments. Although it was not possible to estimate measures of economic efficiency for the entire project, the results of an economic analysis carried out for a sample of investments in roads, drainage, and bus terminals were all positive. They show that these investments were efficient, and generated ERRS as high as 30 percent, which are in agreement with the estimates in the PAD. High relevance and satisfactory achievement of objectives justifies an overall outcome rating of satisfactory for the MSP.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

The project aimed to alleviate poverty through investments in sub-projects that improved environmental conditions, especially for the poor. The project also had positive impacts on

22 women. During the operation of various facilities financed by the project (for example, kitchen markets, bus/truck terminals, public toilets, solid waste management systems), there was scope for increasing women’s employment. Over the longer term, it is envisaged that women will be employed in facility maintenance works. In addition, the selection of sub-projects involved a participatory approach through which both women and men were afforded equal opportunity to express their views and preferences in determining investment priorities. The participatory process by which ULB selected sub-projects for BMDF financing also contributed to project ownership and the perception on the part of citizens that the local authorities cared about its constituency and considered their views in investment decision making.

(b) Institutional Change/Strengthening

The project initiated reforms in ULBs initially to make them eligible for BMDF financing and to help establish the financial discipline needed to sustain the investment. The institutional strengthening under the project resulted in among other areas of municipal management, significant improvements in tax collection, computerization of tax records and water records, management of accounting reports, mapping, and community mobilization to support project planning and implementation. Throughout the project and after it closed, the MSU continued its capacity building for establishing longer-term institutional development. According to the LGED, the project resulted in “a change in mindset” on the part of the municipal authorities. Prior to project implementation, the municipal authorities focused mainly on their investment needs. Mayors are now seeking capacity building for broader improvements in municipal governance.

The project demonstrated successful donor harmonization. Both ADB and the World Bank used the same MSU to deliver capacity building. The MSU continues its capacity building function through the implementation of the ADB-financed Urban Governance and Infrastructure Improvement (Sector) Project (UGIIP).

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

A full beneficiary survey and/or stakeholder workshop was not carried out. However, the MSU carried out a survey in 2012 to evaluate the effectiveness of its Municipal Capacity Building Program. Overall, the findings showed that the project had a highly positive effect on all stakeholders. Nearly all mayors and councilors recognized an increase in revenue income, development of their staff’s capacity and skill, improved service delivery standard, and increase in accountability and transparency. Annex 5 summarizes some of the most important findings.

In 2007, the BMDF contracted Development Support Link to carry out a qualitative impact evaluation of the MSP. The methodologies used for the evaluation included focus group discussions with target beneficiaries in six municipalities and key informant interviews with the local elite, members of civil society, and other stakeholders. The evaluation showed that the project investments: (i) increased the value of trade and business (ii) increased prices of land (iii) generated employment (iv) increased enrolment of both boys and girls in the schools and colleges (v) supplied a large numbers of goods and commodities (vi) improved public health (vii)

eliminated water logging in some areas (viii) decreased water-borne diseases, and (ix) improved the overall environment (see annex 5 for more detailed findings).

4. Assessment of Risk to Development Outcome

Rating: Moderate

The risk to development outcome is rated moderate. The BMDF demonstrated that its operations continue, and that it is committed to improving the commercial aspects of its operations. The MSU also continues to provide technical assistance and training to ULBs. The Bank’s continuing engagement will help ensure that the capacity building carried out under MSP can provide a foundation for continued support and strengthening so the municipalities can continue to effectively deliver and sustain the investments in urban infrastructure.

The benefits of the capacity building support of the project are likely to be sustained, although challenges remain. Staff in most ULBs will continue to need training and mentoring in financial management, procurement, contract management, urban and strategic planning, human resources management, communications, and information management.

Sustainability of the infrastructure and services financed by the project is likely to vary by city size and level of development. While some of the larger ULBs have reported good cost recovery and income through the income generating infrastructure (for example, kitchen markets and community centers), it is less certain that the non-income generating investments would have the same results (for example, maintenance of roads). Support to further improve operations and maintenance would need to be continued through the ADB project or a new World Bank project.

Another main concern relates to the sustainability of the operations of the BMDF. It will be important for the new investment to assist the BMDF in mobilizing increasing amounts of own source revenue and securing its longer term sustainability. At the time of this writing, however, a new World Bank investment under preparation will address this concern.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

Rating: Satisfactory

The Bank’s overall performance was satisfactory with regard to the basic design of the project. The team considered alternative approaches and lessons learned from investments worldwide and in Bangladesh, appropriately evaluated the risks, and ensured that there was an investment program well prepared to implement under the first phase as soon as the credit became effective. The team also was realistic in determining the eligibility criteria for project support. However, the rating is lower than the QAG rating because some of the outcome indicators were not

measurable, and the team significantly underestimated the amount of time it would take before the BMDF would be fully operational.

(b) Quality of Supervision (including of fiduciary and safeguards policies)

Rating: Moderately Satisfactory

The project was closely supervised throughout much of its history. The Bank averaged two full supervision missions per year and provided ongoing support by local staff, including an urban specialist (who later became the task team leader), as well as the financial, procurement, and environmental and social safeguard specialists who were able to provide hands on support from the country office. The task team also fielded specialists in municipal funds and institutional capacity building to address issues associated with the BMDF.

The implementing agencies reported general satisfaction with the Bank’s supervision; however, during the latter years, concerns were raised regarding the timeliness of the Bank’s responses to project financing issues. Regarding fiduciary matters during project implementation, close attention by the Bank’s procurement specialist helped to avoid mis-procurements through the introduction of a Procurement Risk Mitigation Framework which include 45 indicators that both the LGED and BMDF were required to monitor. The local team’s support was continuous and very strong. The specialist held monthly meetings to discuss and resolve any procurement issues.

Although the investments were not expected to have any significant environmental or social impacts, the teams could have provided closer supervision of safeguard issues, especially compliance with OP 4.12. During the long implementation period, the task teams also could have assigned greater priority to ensuring that adequate capacity building was made available to all participating ULBs to help establish effective cost recovery for the investment, improving the results frameworks and project monitoring, and requesting periodic beneficiary assessments.

Because the project implementation period extended over a period of 12 years, the project had several changes in task team leaders. However, this did not cause significant problems, mainly because the principal team members largely remained on the team. Project ISR ratings have been realistic and honest in reflecting situations on the ground. Supervision could have been improved if it modified the results framework to clarify the indicators.

Although a QAG review during the early years of project implementation rated the Bank’s supervision as being moderately unsatisfactory due largely to its handling of the borrower’s delay in establishing and operationalizing the BMDF, the ICR team’s view is that the Bank team has been championing and actively supporting the borrower in establishing and operationalizing the BMDF, even though various difficulties were confronted during the process Given the subsequent success of the project and BMDF, and based on a review of available ISR documents and aide memoires, as well as discussions with former and current team members, the ICR team does not view the MU rating as being highly relevant for this ICR.

Rating: Moderately Satisfactory

The rating of moderately satisfactory is based on the team’s good performance in supporting the design of and supervising a high risk, high reward project that would directly address the key issues confronting the urban sector in Bangladesh while introducing a new mechanism for promoting transparency in resource allocation to municipalities and encouraging greater discipline on the part of the country’s municipalities for identifying and sustaining priority infrastructure investments. However, the team was less effective in establishing a well designed results framework with outcomes and targets that could be measured, and ensuring that the project was establishing the necessary conditions at the municipal level for sub-project sustainability. During the extended period of project implementation, the Bank should have assigned greater attention to these issues and the need for beneficiary assessment. As noted by BMDF, moreover, the Bank team could have provided more timely responses to BMDF questions related to sub-project financing issues; its late responses caused delays during the latter part of project implementation.

5.2 Borrower Performance

(a) Government Performance

Rating: Moderately Satisfactory

The GOB remained committed to the objectives of the project. Although changes in government leadership stalled progress in operationalizing the BMDF by about three years, support for this new entity was never an issue. This was especially evident in June 2007, when the Government/BMDF Board appointed a full time managing director, despite having to deal with the civic unrest occurring in the country associated with the election process. This demonstrated the Government’s ongoing interest in the project, and the Board’s capacity to act in the Fund’s best interest. The GOB also provided counterpart funds as needed throughout most of the project implementation period.

(b) Implementing Agency or Agencies Performance

Rating: Satisfactory

LGED provided consistently strong leadership throughout the 12 years of project implementation. The implementation of phase one investments and technical assistance were implemented largely on schedule, and the department was able to redirect its attention as required to accommodate the various changes in project activities and financing to address the urgent need to repair infrastructure damaged by the floods of 2000, 2004, and 2007. In large part, the delays in project implementation occurred primarily as a result of the floods and the success of LGED in responding quickly and ably to direct the additional funds to the urgently needed investments. The relatively good performance with regard to procurement is also notable.

Despite the delays in operationalizing the BMDF, this new entity introduced in a country that was highly centralized, became an effective instrument for changing the way resources would be allocated to municipalities of all sizes around the country. As the project progressed, the BMDF added improvements in various aspects of project management with the recruitment of additional professional staff, and preparation of an adequate social impact assessment framework. The main concerns for BMDF was the need for more highly qualified staff to provide the necessary technical support to the ULBs in preparing good project proposals and supervising quality control. In this regard, its operations could have been better coordinated with those of LGED and made better use of LGED’s technical staff.

Rating: Satisfactory

The GOB demonstrated its overall support for the project throughout the implementation of the original credit and subsequent AFs, and LGED provided strong and effective management of the first phase of investment, subsequent investments to address the periodic floods, and the MSU. Moreover, the project was complex and involved introduction of a new entity that would change the manner in which resources would be allocated to cities for infrastructure improvements. Although there was a delay in establishing and operationalizing the BMDF, its ultimate performance demonstrated that it would possible to introduce reform in Bangladesh and implement a large number of contracts in many cities around the country. In many cases, the funding was made to small and medium sized cities that would not otherwise have access to the funding for infrastructure improvements.

6. Lessons Learned

Allow sufficient time for a new institution to be established, especially when it accompanies a major policy reform. Project design and implementation should take into account realistic time frames when a new institution will be created for financing municipal projects. In the case of MSP, setting up and operationalizing the MDF took about three years longer than originally planned. Project extension, together with the Bank’s continued intensive support, in the end allowed BMDF to be fully functional as originally envisaged. One lesson is that the Bank should be patient and persistent in supporting this type of policy reform.

The MDF model in supporting ULB infrastructure investments was effective and should be continued with stronger technical support. The model used in Bangladesh introduced a relative simple approach to supporting ULBs by giving them maximum flexibility in determining their own project priorities, calling the tender, selecting contractors, and maintaining quality during implementation. However, the model could be strengthened if higher quality technical support was more widely available for assisting the municipalities on preparing good project proposals and engineering designs, and monitoring the works. If there is a follow up project, the LGED, which has high quality technical staff and capacity to monitor sub-projects, should have a more active role in BMDF operations by supporting the ULBs in project design and supervision, and providing continued capacity building.

Introducing a municipal fund where there are small cities with weak financial systems requires realistic eligibility criteria for participating municipalities and ample institutional capacity building to allow them to participate and sustain their investments. None of the small municipalities that were able to benefit from the project could have met eligibility criteria often used in other countries where Bank projects have supported municipal development funds. The criteria established under this project required the municipalities to assess their financial situation, demonstrate a tax collection rate of at least 60 percent, prepare a financial and operational plan (FOAP), and demonstrate commitment to its implementation. The use of these criteria allowed many ULBs that would not otherwise have access to credit, obtain funds for priority infrastructure investments and improvements in governance and fiduciary management. The inclusion of the capacity building under LGED helped to ensure that the participating municipalities not only would qualify for funding but would start to build capacity for O&M. If there is a follow-up project, the capacity building should be broadened to provide technical assistance and training to the ULBs that are implementing project-financed infrastructure improvements to improve their governance structures and policies related to O&M.

Closer coordination between BMDF and LGED in providing institutional strengthening and technical support would strengthen BMDF operations. During the implementation of MSP, the MSU capacity building provided to ULBs was made available to all ULBs. While all could benefit from this support, a follow up investment should ensure closer coordination between MSU capacity building and BMDF sub-project financing to ensure that the municipalities receiving assistance for the investment projects are provided with the support needed to ensure quality control for the physical investments and to sustain the improvements.

The MSU was an effective vehicle for delivering and coordinating technical and institutional support to municipalities assisted by the World Bank and other donors. After the project closed, other donors continued to use or plan to use this entity to build on the capacity building provided under the MSP. To ensure consistency in the approach, which has been successful in the Bangladesh context, any new investments in the urban sector should aim at implementing its capacity building program through the MSU.

Including a disaster risk management (or contingent emergency response) component in projects where there is a high risk of flooding and other natural disasters facilitates an emergency response. For projects implemented in countries such as Bangladesh, where there is high risk of flooding, project designs should include a contingent emergency response component (0 cost) that can be put into operation immediately in case of an emergency, without the need for formal project restructuring. Following the floods of 2004 and 2007, the MSP was one of the instruments for the emergency assistance. Having the Flood Damage Rehabilitation component in place facilitated the implementation of the additional financing without the need for formal restructuring to allow LGED to respond quickly in addressing the damage to critical transportation and communication networks.

Using the Participatory and Partnership Approach (PPA) built project ownership. The participatory approach to identifying priority infrastructure investments proved to be successful because it encouraged greater community involvement and partnership in delivering services such as community water supply, solid waste management, and sanitation; and created a “sense

28 of ownership” among the stakeholders that will help to ensure project sustainability. This approach also helped to promote trust on the part of the population toward their local government. The participatory approach could be been more effective if there were periodic beneficiary assessments used to determine the extent to which the PPA was effective, whether the project was meeting stakeholder expectations, and what measures could be introduced to maximize project benefits.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies See annex 6.

(b) Cofinanciers: None

ADB representatives reviewed the draft ICR, the team revised various sections to take into account ADB reviewers’ comments.

Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent) Actual/Latest Appraisal Estimate Percentage of Components Estimate (USD (USD millions) Appraisal) millions

Phase I – Physical Investments 38.60 27.06 70.1 Phase I – Land Acquisition 1.10 .77 70.0 Phase I – Flood Rehabilitation 16.20 36.44 224.9 Phase I – Technical Assistance 6.80 14.94 219.7 Phase I - Project Staffing .10 2.35 235.0 Phase I – Incremental O&M Costs 1.00 2.14 214.0 Chittagong Hills Tracts 7.60 7.59 100.0 Phase II – BMDF Line of Credit 78.00 57.32 73.5 Phase II – Technical Assistance 4.00 1.66 41.5 Phase II - Incremental O&M Costs .60 .91 151.7

Original Total 154.00 151.18 98.2

AF 2008 – Flood Rehabilitation 25.00 25.47 102.0 Total

AF2010 - BMDF Physical Works 36.00 35.9 99.7

AF 2010 – LGED Municipal 1.84 1.24 67.4 Capacity Building

AF2010 – TA for Preparation of 63.3 Improved Urban Infrastructure and 3.41 2.16 Institutional Development .75 .44 58.7 AF2010- Incremental O&M Costs

AF2010 – Total 42.00 39.74 94.6

Total Financing Required 221.00 216.39 97.9

(b) Financing Appraisal Actual/Latest Type of Percentage of Source of Funds Estimate Estimate Cofinancing Appraisal (USD millions) (USD millions)

Borrower 15.4 29.8 194

International Development Association (IDA) 205.6 203.1 98.8

Annex 2. Outputs by Component

Phase I

Component I – Civil Works

(a) Water Supply – Rehabilitation of existing systems and equipment purchase for Operations and Maintenance.  10 wells replaced, 10 abandoned wells regenerated, 20 pump houses rehabilitated.  Rehabilitation of nearly 16 km of water distribution system, along with installation of 2,500 domestic water flow meters.  Rehabilitation of 150 street hydrants and 54 hand pumps.  Rehabilitation of 1 overhead tank and construction of storage shade.  Rehabilitation of a water treatment plant and an iron removal plant.

(b) Sanitation  Installation of 35 public toilets.  Construction of a 5 km small bore sewerage system.

(c) Roads and Drainage  Roughly 250 km of urban road were upgraded and rehabilitated.  40 km of drainage improvement –through drain reconstruction and/or conversion of earthen drains to brick-walled drains.

(d) Bus and Truck Terminals  Construction and rehabilitation of 11 bus and truck terminals.

(e) Slum Improvement  Physical investments included 303 dug wells, construction of a 3,357 meter drain with footpath, roughly 7,300 meters of surface drain, a 16,852 meter footpath as well as a 540 meter landing approach.

(f) Solid Waste Management  Phase I focused on improving primary collection through the provision of roughly 680 communal bins.

(g) Markets  Upgrading and/or rehabilitation of 19 markets.

(h) Land Acquisition  Roughly 10.5 ha acquired for the implementation of the bus/truck terminals and sanitation components.

Component 2 – Equipment

(a) Solid Waste Equipment 31

 158 handcarts, 122 rickshaw vans, 7 garbage trucks (2 5-ton garbage trucks and 5 3-ton garbage trucks), 1 demountable carrier and 28 demountable containers were purchased to improve primary collection.

(b) Motor Vehicles and Computers  23 computers and printers were purchased and distributed: 19 to the pourashavas and 4 to the Project Management Unit (PMU)  21 photocopiers purchased and distributed: 19 to pourashavas and 2 to PMU.  20 fax machines were purchased and distributed: 19 to pourashavas and 1 to PMU.  19 road rollers, 9 tractors/trailers, 1 vacuum tanker, 5 trunk mounted water browsers

Component 3 – Technical Assistance

(a) Institutional Development  The project provided technical support to strengthen institutional and financial capacity of municipalities. The capacity building support included computerization and improved management of Holding Tax bills and records, municipal accounts, water supply bills and records, Trade License records, development of Infrastructure Inventory and preparation of base maps, and support to community mobilization.  The project also provided the municipalities with equipment and logistical assistance.  Urban Local Body (ULB) post-computerization holding tax collection improved in 80 (out of 100) computerized ULBs. Tax collection efficiency improved by 12.7%.  Tax record reform in 100 ULBs.

(b) Municipal Data Base  A central urban data base was set up in LGED

(c) Community Development and Participation  TA was provided for hiring NGOs to develop a community development and participation program, conduct workshops, and conduct a micro-credit study.

(d) Municipal Development Fund  Technical assistance was provided for setting up the BMDF

(e) Studies  Environmental Action Plan  Hydrogeological investigation for Khulna

(f) Project Implementation  Technical assistance provided to finance design and construction supervision

(g) Training  Foreign project personnel: 15 people were trained in procurement; 3 people in financial management; 2 in environment; 1 in human resource management; 1 in urban

management; and 1 in poverty reduction. 3 people were involved in a workshop and 48 were involved in a study tour.  Local project personnel: 7 people trained in procurement; 80 in field testing of construction material; 10 in quality control; 77 in solid waste management; 8 in computer aided analysis and design; 2 in project management; 246 in finance, accounts and audit management; 1 took an office communication course; 1 took an advanced TOT course; 200 participated in foundation training; 80 participated in a workshop; 4 participated in a conference; and 2 participated in a symposium.

(h) Project Staffing  A total of 353 individuals were staffed as project personnel.

(i) Incremental O&M

Component 4 – Chittagong Hill Tracts Component

 This component focused on physical investments in three municipalities – Rangamati, Bandarban, and Khagrachari in the Chittagong Hills Tracts. These three ULBs have historically lagged behind other municipalities in service provision and urban development.  Construction of 152 meters of culvert and an all traffic bridge and 177 meters of a light traffic/foot bridge.  Investments made in a roughly 10 km drain, 6 km footpath and a 174-meter retaining wall.  Installment of 9 public toilets and construction of 1 community center.  Development of 9 markets (kitchens), establishment of a slaughterhouse and a mini super market.  Water supply improvements through installment of 225 sealed surface wells, rehabilitation of GL storage reservoir, and construction of 242 tube/dug wells.  Installation of over 14,000 twin pit latrines.  Purchase of 116 communal bins and three 3-ton garbage trucks to improve solid waste collection.

Component 5 – Flood Damage Rehabilitation

This component financed rehabilitation efforts of municipalities that were affected by the 1998, 2000, 2004 and 2007 floods.

 1998 flood damage rehabilitation included 750 km of road rehabilitation (with drain and bridge/culvert rehabilitation) and the rehabilitation of three kitchen markets.  2000 flood damage rehabilitation included 270 km of road rehabilitation, with drain and bridge/culvert rehabilitation.  2004 flood damage rehabilitation included roughly 1,200 km of road rehabilitation, 19 km of drain rehabilitation, 235 meters of bridge/culvert rehabilitation and rehabilitation of several other structures.

 2007 flood damage rehabilitation included rehabilitation of roughly 25 km of drains, 300 meters of bridge/culvert, and 2.4 km of a retaining wall. Only 680 km of road were rehabilitated (compared to the target value of 1,125 km) because rehabilitation required additional investment in 16 km of drain, 1.7 km of bridge/culverts and 4.4 km of the retaining wall to ensure sustainability of the rehabilitated road.

Project Locations for Phase I

 2 City Corporations: Khulna and Rajshahi  14 Pourashavas: Mongla, Satkhira, Narail, Chuadanga, Patuakhali, Perojpur, Gopalganj, Dinajpur, Saidpur, Nilphamari, Parbatipur, Kurigram, Joypurhat, and Anaogaon.  3 Hill Pourashavas: Rangamati, Khagrachari, and Bandarban.  Road improvements in the following upazilas (upazila, district, division):

o Gopalpur upazila, Natore district, Rajshahi city corp o Bera upazila, Pabhna district, Rajshahi city corp o Kaliakair upazila, Gazipur district, Dhaka division o Sonargaon upazila, Narayanganj district, Dhaka division o Sreemangal upazila, Maulvibazar district, Sylhet division o Golapgonj, Sylhet division

 Flood Damaged Rehabilitation Works

o 1998 Flood: 147 flood affected Pourashavas o 2000 Flood: 19 flood affected Pourashavas o 2004 Flood: 119 flood affected Pourashavas o 2007 Flood: 65 flood affected Pourashavas

Phase II

Component 6 – Municipal Development

The Bangladesh Municipal Development Fund (BMDF), a government owned company, was created under the project to provided financial support (on a lending basis) to qualified municipalities. It provides municipalities with an alternative to block grants from the central governments.

 The Fund allocated US $103 million to a total 595 municipal subprojects consisting of civil works, equipment, goods and technical assistance in 154 ULBs, including 7 City Corporations, 78 A class, 49 B class and 29 C class municipalities.  1,128 km of road were built or rehabilitated in 141 ULBs.  260 km of drain were built or rehabilitated in 103 ULBs.  211 kitchen markets were developed in 59 ULBs.  173 km of water supply pipelines were installed in 24 ULBs.  36 deep tube wells were constructed in 15 ULBs.  2 water treatment plants constructed in 2 ULBs.  87 public toilets installed in a total of 36 ULBs.  32 box culverts constructed in 13 ULBs.  24,960 sets of street lights added in 24 ULBs.  9 bus/truck terminals established in 9 ULBs.  15 community centers established in 14 ULBs.  8 slaughterhouses built in 6 ULBs.  7 office complex buildings built in 7 ULBs.  Study carried out on municipal solid waste management in four cities.

Component 7 – Technical Assistance

(a) Technical support provided to the MDF to provide specialist expertise in sub-project appraisal, including technical review of proposals for compliance with environmental, social, economic and financial feasibility of subprojects.

(b) Technical support provided to municipalities to help prepare acceptable sub-project proposals, and implement agreed Financial and Operational Action Plans to make them eligible for MDF financing.

(c) Incremental operational and maintenance costs for the MDF, and the MSU in the first three years were financed under the project.

Table 2: Phase I Outputs by Components

Item of work Unit Target Actual progress Reasons for (As per RDPP) deviation Financial Physical Financial Physical (in lakh (Qty) (in lakh (Qty) Tk.) Tk.) Project Component 1: Civil Works (2 City Corporations & 14 Pourashavas)

(a) Water Supply – Rehabilitation of Existing Systems, and Equipment Purchase for Operations and Maintenance Replacement of existing well no 318.00 10 318.00 10 Regeneration of abandoned well no 8.93 10 8.93 10 Rehabilitation of pump house no 52.80 20 52.80 20 Rehabilitation of distribution system km 39.56 15.827 39.56 15.827 Installation of domestic flow meter no 43.92 2500 43.92 2500 Rehabilitation of street hydrant no 5.35 150 5.35 150 Rehabilitation of hand pumps no 27.47 54 27.47 54 Rehabilitation of overhead tank no 6.42 1 6.42 1 Construction of storage shade no 7.89 1 7.89 1 Rehabilitation of water treatment plant no 8.08 1 8.08 1 Rehabilitation of iron removal plant no 6.15 1 6.15 1 (b) Sanitation – Construction of public toilets and a pilot small-bore sewerage program in Khulna.

Public Toilets no 192.48 35 192.48 35 Small Bore Sewerage System km 96.92 5.05 96.92 5.05 (c) Roads and Drainage – Upgrading and rehabilitation of existing network and systems.

Urban road (with bridge/culvert) km 5285.97 252.709 5250.05 252.709 Drain km 2167.11 39.157 2167.11 39.157 (d) Bus and Truck Terminals – Construction and rehabilitation of bus and truck terminals for all the participating city corporations and municipalities.

Bus / Truck Terminal no 1648.20 11 1634.69 11 (e) Slum Improvement – Physical investments in Khulna and about five municipalities.

Slum Improvement program no 186.39 8 139.55 6 Due to land issue the scope was reduced Slum / Community development

-Dug well no 224.38 303 224.38 303 -Drain with footpath m 180.83 3257 180.83 3257 -Surface drain m 119.73 7297 119.73 7297 -Footpath m 229.81 16852 229.81 16852 -Landing approach m 31.74 542 31.74 542 (f) Solid Waste Management: Focus on improving primary collection of solid waste by providing communal bins, handcarts and rickshaw vans.

Communal Bin no 32.05 684 32.05 684 (g) Markets: Upgrading and/or rehabilitation of 16 existing municipal markets in participating municipalities.

Market development (kitchen) no 631.75 19 631.75 19 (h) Land Acquisition: Land for the implementation of bus/truck terminal and sanitation components.

Land Acquisition Hac 387.65 10.535 387.65 10.535 Project Component 2 - Solid Waste Collection vehicle & equipment

Handcart no 6.91 158 6.91 158 Rickshaw van no 14.05 122 14.05 122 5 ton Garbage truck no 31.92 2 31.92 2 3 ton Garbage truck no 21.31 2 21.31 2 3 ton Garbage truck no 31.96 3 31.96 3 Demountable carrier no 12.75 1 12.75 1 Demountable container no 13.95 28 13.95 28 Acquisition of assets/ procurement I. Imported machinery, equipment & spares 8-10 tons Road roller no 383.27 19 383.27 19 Tractor & trailer no 93.83 9 93.83 9 Vacuum tanker no 12.19 1 12.19 1 Truck mounted water browser no 72.09 5 72.09 5 Flow meter no 33.23 2576 33.23 2576 UPVC pipes & fittings lot 93.53 10 93.53 10 Hydraulic elevating platform no 71.07 3 71.07 3 II. Locally procured machinery ,equipment & spares

Leveling Instrument no 12.01 19 12.01 19 Computer & Printer no 25.97 23 25.97 23 Photocopier no 15.31 21 15.31 21 Fax no 6.00 20 6.00 20 Office Furniture L.S 26.89 L.S 26.89 L.S III. Imported transport & vehicle

Jeep no 220.73 24 220.73 24 IV .Locally procured transport & vehicle

Motorcycle no 26.98 38 26.98 38 Pick-Up no 12.49 1 12.49 1 Project Component 3: Technical Assistance

(a) Institutional Development Institutional Development & Capacity - 4374.86 - 4370.55 - Building (b) Municipal Data Base (c) Community Development and Participation (d) Municipal Development Fund (e) Studies Studies - 1346.88 - 1251.94 - - do - (f) Project Implementation: Technical Assistance Provided to finance design and construction supervision for a period of two years initially. Design & Supervision Consultant - 1881.47 - 1881.47 - (g) Training Training cost - 350.00 - 328.67 - (h) Project Staffing Salary & allowances - 1947.05 - 1712.09 - Actual (i) Incremental O&M

Project Component 4: Chittagong Hill Tracts Component – Physical Investments in three municipalities of Rangamati, Bandarban and Khagrachari in the Chittagong Hills Tracts. 3 Chittagong Hill Tract Pourashavas Road km 2210.32 70.642 2185.28 70.642 Bridge/Culvert a).All traffic bridge / culvert m 185.38 152 185.38 152 b).Light traffic bridge / foot bridge m 47.60 177 47.60 177 Drain km 483.53 9.628 483.53 9.628 Stepped Footpath m 131.87 5963 131.87 5963 Retaining wall m 17.01 174 17.01 174 Lake Side landing ghat no 161.95 17 161.95 17 Market development (kitchen) no 65.80 7 65.80 7 Public toilet no 58.90 9 58.90 9 Community centre no 23.23 1 23.23 1 Slaughter house no 9.91 1 9.91 1 Mini super market no 73.09 1 73.09 1 Water Supply

-Sealed surface well no 144.07 225 144.07 225 -Rehabilitation of GL storage reservoir no 34.86 4 34.86 4 -Tube well/dug well no 123.32 242 123.32 242 Twin pit latrine no 993.14 14156 914.51 14156 Solid Waste Collection Facilities

-Communal Bin no 3.67 116 3.67 116 Project Component 5: Flood Damage Rehabilitation

(c).Flood Damaged Rehabilitation Flood'1998

-Road rehabilitation (with drain & bridge/culvert) km 9005.31 749.51 9005.31 749.51 -Kitchen Market rehabilitation no 1.48 3 1.48 3 Flood'2000

-Road rehabilitation (with drain & bridge/culvert) km 3482.66 268.97 3482.66 268.97 Flood'2004

-Road rehabilitation km 15634.29 1170 15633.32 1170 -Drain rehabilitation km 422.58 19 422.58 19 -Bridge / culvert rehabilitation m 125.66 235 125.66 235

-Other structure rehabilitation no 5.60 9 5.60 9 Flood'2007

-Road rehabilitation km 20257.95 1125.51 20388.08 682.61 Actual achievements, in physical terms, are less than the DPP provision. The main reason is:

1. For the sustainability of the rehabilitated roads further 16.14 km of drain, 1171 meter of bridge/culverts, 4454 meter of retaining wall (integrated with road contracts) were necessary to build as most of the municipal roads pass through ponds and ditches, did not have side

drains and had unstable side slopes.

The other reasons include:

2. During preparation of detail estimate extent of damages was found more than the assessment report; and

3. There have been changes in schedule of rates and price hike of construction materials between the period of assessment and estimate preparation.

-Drain rehabilitation km 1125.00 25 1123.00 24.70 -Bridge / culvert rehabilitation m 600.00 300 648.50 296 -Retaining wall m 366.30 2442 365.75 2440 -Other structure rehabilitation L/S 300.00 - 300.00 - Consultancy services for flood' 2004 - 714.55 - 714.55 - Consultancy services for flood' 2007 - 871.12 - 806.98 - As per contract agreement expenditure was made.

Table 3: Phase II Outputs (Components 6 and 7) by ULB

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. 3177 Road, Drain, Public 2005-2006 9,420,795.23 5,750 29,576 01 Akkelpur -BD Toilet Road, Drain 2007-2008 10,395,583.53 7,855 Road, Drain 2007-2008 7,203,806.23 6,575 Sub Total 27,020,184.99 20,180 Alamdang 3177 2005-2006 12,744,562.50 5,800 27,230 02 Road, Drain a -BD Road 2005-2006 13,806,333.22 5,785 Bus Terminal 2005-2006 7,515,729.74 34,000 Sub Total 34,066,625.46 34,000 3177 Road 2004-2005 3,148,576.50 2,250 25,190 03 Amtali -BD Road 2004-2005 2,356,039.80 2,755 Road 2004-2005 2,319,069.60 2,750 Road 2004-2005 2,124,044.10 2,750 Road 2006-2007 3,435,388.20 2,800

Road 2006-2007 3,820,234.50 2,250 K. Market, P. 2006-2007 576,804.58 4,850

Toilet, Slaughter H. ( Addl. 4761 12,000 Road, Drain 2011-2012 19,476,134.10 Funding) -BD Sub-Total 37,256,291.38 32,405 3177 Drain 2006-2007 7,800 146,305 04 Bagerhat 11,023,369.27 -BD Drain 2006-2007 3,462,474.12 16,800 Sub Total 14,485,843.39 24,600 Banskhali 3177 road 2008-2009 6,846,420.00 7,500 35,000 05 -BD Road 2008-2009 7,533,585.16 8,500 Sub Total 14,380,005.16 16,000 Brahmanb 3177 Road 2005-2006 14,277,004.20 11,250 1,85,000 06 aria -BD Road 2005-2006 11,312,377.20 15,650 Road 2005-2006 10,103,628.85 13,500 Road 2006-2007 11,777,681.65 12,500 3177 road 2008-2009 7,564,953.60 30,000 2nd Time -BD Sub Total 55,035,645.50 82,900 3177 Road 2006-2007 10,553,271.30 3,850 22,581 07 Bhuapur -BD Road 2006-2007 11,587,827.10 4,500

Road 2006-2007 8,881,859.84 5,640 Sub Total 31,022,958.24 13,990 3177 Road, Public Toilet 2005-2006 12,557,598.30 15,000 62,156 08 Barguna -BD Road 2005-2006 10,454,620.50 10,000

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Road, Drain 2005-2006 7,900,298.10 12,000 Road 2005-2006 7,626,383.10 8,000 Sub Total 38,538,900.00 45,000 Barisal Road 2004-2005 7,897,680.00 25,000 599,162 City 3177 09 Corporatio -BD n Road 2004-2005 4,518,670.50 15,000 Road 2004-2005 7,361,520.30 20,000 Road 2004-2005 7,273,926.00 13,000 Road 2004-2005 7,105,901.40 10,000 Drain 2004-2005 5,565,877.20 15,000 Drain 2004-2005 6,354,284.40 12,000 Drain 2004-2005 8,967,076.20 10,000 Drain, Kitchen 2006/-2007 3,874,096.80 30,000

Market Water Supply,pipe 2005-2006 5,034,967.20 10,000 line, Tubewell (Addl. 4761 25,000 Road 2011-2012 35,172,835.19 Funding) -BD Road, culvert 2011-2012 47,074,187.12 22,000 Road, Drain, Street 25,000 2011-2012 33,197,412.45 Light Road 2011-2012 20,198,828.00 15,000 Street Light 2011-2012 18,012,741.30 15,000 Street Light 2011-2012 17,728,423.65 20,000 Sub-Total 235,338,427.71 282,000 Barolekha- 4761 17,000 10 Road, Drain 2011-2012 9,241,131.40 38,925 B -BD Sub-Total 9,241,131.40 17,000 3177 Road 2005-2006 10,731,789.90 4,500 50,000 11 Bagha -BD Road, Drain 2005-2006 8,798,845.05 6,500 Road, Drain, 2005-2006 6,916,119.30 7,350

Culvert Water Supply 2005-2006 5,433,267.60 4,570 31,880,021.85 22,920 Sub Total 4761 18,500 12 Barura Road 2011-2012 14,124,461.00 38,608 -BD Sub-Total 14,124,461.00 18,500 4761 15,000 13 Bashurhat Road 2011-2012 12,465,242.83 45,000 -BD Sub-Total 12,465,242.83 15,000 4761 Road, Drain, 9,500 14 Bauphal 2011-2012 9,978,349.40 19,600 -BD Kitchen Market Sub-Total 9,978,349.40 9,500 3177 Road 2005-2006 9,325,404.00 5,600 15 Bera -BD 58,340 41

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Road 2005-2006 8,084,755.80 7,500 Road, Street Light 2006-2007 13,396,840.20 18,750

(2nd 3177 Road 2006-2007 8,769,737.41 15,000

Time) -BD Road 2006-2007 8,116,749.78 12,000

Road 2006-2007 8,989,576.28 10,000

Road 2006-2007 8,010,370.21 8,000

( Addl. 4761 15,000 Office Building 2011-2012 66,527,393.04 Funding) -BD Office Building 15,000 2011-2012 26,758,279.54 (extension)

Sub-Total 157,979,106.26 106,850 3177 Road 2006- 15,000 38,961 16 Bhanga -BD 20007 8,875,673.86 Kitchen Market Road 2005-2006 10,160,966.70 10,000

2006- 10,167,458.37 3,000 Office Building 20007 Sub Total 29,204,098.93 28,000 17 3177 Road 2006- 10,925,359.26 3,500 60,933 Bhola -BD 20007 Drain 2006- 7,867,833.34 4,850

20007 Road 2006- 6,463,783.04 4,500

20007 Road, Kitchen 2006- 5,683,624.74 4,800 Market 20007 Road 2008-2009 9,744,945.00 3,750

( Addl. 4761 10,000 Road, Drain 2011-2012 24,589,349.56 Funding) -BD Road, Drain, Street 12,000 Light, Water 2011-2012 24,672,332.70 Supply Office Building 2011-2012 51,520,435.63 13,000 Street Light 2011-2012 24,589,349.56 10,000

Sub-Total 166,057,012.83 66,400 3177 Road 2006-2007 8,423,784.66 6,000 39,157 18 Birampur -BD Road, Kitchen 2006-2007 9,687,638.80 5,800 Market Sub Total 18,111,423.46 11,800

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Bonpara 11,000 4761 19 (Addl. Road 2011-2012 11,362,512.48 23,059 -BD Funding) Sub-Total 11,362,512.48 11,000 Road, Drain, 2005-2006 11,514,482.10 6,500 18,506 Borhanudd 3177 20 Kitchen Market in -BD

Public Toilet, Truck 2006-2007 8,277,703.56 3,500

Stand Drain, Public Toilet 2006-2007 9,257,687.07 4,000 Sub Total 29,049,872.73 14,000 Road, Public Toilet 2005-2006 7,547,502.50 5,800 2,49,532 Chapai 3177 21 Nawabganj -BD

Street Light 2005-2006 3,381,936.30 4,800 Road 2005-2006 6,592,551.30 6,500 Road, Drain, Public 2005-2006 10,103,738.40 7,800

Toilet Road 2005-2006 6,888,034.80 6,700 Drain 2005-2006 7,820,323.90 7,500 3177 Road 2006-2007 9,594,654.63 20,000 ( 2nd time) -BD Road, Drain 2006-2007 11,072,249.10 15,000

Road, Drain 2006-2007 10,998,208.07 10,000 Road, Drain 2006-2007 4,728,092.40 15,000

Street Light 2006-2007 7,317,635.80 20,000

Road, Drain 2006-2007 4,214,499.30 10,000

Public 2006-2007 1,237,874.40 30,000 Toilet,Slaughter House Sub Total 91,497,300.90 159,100 3177 Road, Kitchen 2006-2007 11,814,802.25 20,000 68,250 22 Chattak -BD Market Road 2006-2007 6,659,048.90 10,000 Sub Total 18,473,851.15 30,000 3177 Road 2005-2006 9,103,541.40 1,000 60,000 23 Chatkhil -BD Drain 2007-2008 7,370,085.21 7,000 Road, Drain, Public 2005-2006 7,556,291.10 15,000

Toilet Kitchen Market, 2005-2006 7,852,951.80 20,000

Box Culvert Sub Total 31,882,869.51 43,000 3177 Drain, Kitchen 2004-2005 10,475,591.40 6,000 16,100 24 Chatmohar -BD Market Road 2006-2007 7,732,806.70 4,500

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Road 2006-2007 7,867,587.40 4,000 Sub Total 26,075,985.50 14,500 3177 Road 2006-2007 6,183,573.40 9,500 35,000 25 Charghat -BD Pipe Line, 2006-2007 10,460,130.20 14,000 Production Tubewell Road 2006-2007 9,474,296.40 7,500 Sub Total 26,118,000.00 21,500 Chandina Office Building, 14,000 4761 26 ( Addl. Drain, Kitchen 2011-2012 12,184,940.44 42,760 -BD Funding) Market, Culvert Sub-Total 12,184,940.44 14,000 3177 Road, Drain 2004-2005 8,611,630.00 30,000 27 Chandpur -BD 400,000 Road, Drain, 2005-2006 6,950,430.90 50,000

Kitchen Market Road, Drain 2005-2006 4,533,218.10 25,000 Road, Drain 2005-2006 5,346,692.10 20,000 ( Addl. 4761 25,000 Road, Culvert 2011-2012 23,309,937.57 Funding) -BD Drain 2011-2012 16,498,584.06 15,000 Road 2011-2012 14,274,943.09 20,000 Road 2011-2012 19,848,842.77 18,000 Street Light 2011-2012 16,910,952.30 25,000 Sub-Total 116,285,230.89 228,000 Chaumuha 3177 Road, Drain 2005-2006 11,720,596.50 12,000 120,000 28 ni -BD Road, Drain 2005-2006 9,353,529.00 7,800 Road, Drain 2005-2006 10,982,512.80 10,000 Road 2005-2006 3,108,329.60 3,500 (2nd 3177 2007-2008 12,333,600.00 10,000 Road time) -BD 20072008 4,043,789.81 12,000 Drain, Street Light

Production 2007-2008 12,925,800.00 10,000

Tubewell Water Treatment 2007-2008 13,455,899.65 8,000

plant, pipe line Pipe Line 2006-2007 10,677,600.35 10,000 Sub Total 88,601,657.71 83,300 Road, Drain, Public 2005-2006 10,463,077.80 8,700 29250 Charfassio 3177 29 Toilet n -BD

Road, Drain 2006-2007 11,109,402.00 9,000

Road, Drain 2006-2007 9,087,198.30 17,700 Sub Total 30,659,678.10 35,400

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Chandanai 3177 Road 2006-2007 5,895,351.63 3,500 28,700 30 sh -BD Kitchen Market 2006-2007 8,588,653.86 10,000 Sub Total 14,484,005.49 13,500 3177 Road, Drain 2005-2006 7,994,078.00 25,000 174,000 31 Chuadanga -BD Drain 2006-2007 4,809,087.70 15,000 Drain 2006-2007 7,118,602.70 10,000 Road 2005-2006 4,717,160.10 12,000 Water Tubewell, 2006-2007 5,819,546.40 8,000

pipe line (Addl. 4761 18,500 Drain 2011-2012 26,327,352.25 Funding) -BD Road, Drain 2011-2012 14,224,356.00 13,500 Sub-Total 71,010,183.15 102,000 Chittagong City 4761 32 Corporatio Road 2011-2012 39,993,902.50 25,000 5,000,000 -BD n (Addl. Funding) Road 2011-2012 38,245,339.80 20,000 Street Light 2011-2012 12,147,961.00 30,000 Sub-Total 90,387,203.30 75,000 Chowgach 15,000 4761 33 a (Addl. Road, Drain 2011-2012 17,525,820.80 40,000 -BD Funding) Sub-Total 17,525,820.80 15,000 3177 2007-2008 12,428,701.76 9,000 65,000 34 Chakaria Road -BD Bus Terminal 2007-2008 10,455,167.17 50,000 Road 2007-2008 11,906,197.38 8,500 (Addl. 4761 10,000 Road 2011-2012 16,573,651.57 Funding) -BD Kitchen Market 2011-2012 10,989,000.00 8,000 Sub-Total 62,352,717.88 85,500 Cox's 15,000 Bazar 4761 35 Kitchen Market 2011-2012 5,966,924.80 100,000 (Addl. -BD Funding) 2011-2012 21,278,303.19 12,000 Road

Sub-Total 27,245,227.99 27,000 3177 Road 2007-2008 9,461,225.90 6,500 16,923 36 Dhunat -BD Road, Drain, Box 2007-2008 8,369,208.64 6,000

culvert Sub Total 17,830,434.54 12,500 3177 Road, Slaughter 2007-2008 7,193,933.91 6,500 38,185 37 Darsana -BD House 45

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Drain 2007-2008 9,771,142.59 7,500 Sub Total 2008-2009 16,965,076.50 14,000 38 Debidwar 3177 9,011,161.27 9,500 Road 35,000 -BD 22,000 4761 (Addl. Community Centre 2011-2012 9,218,870.10 -BD Funding) Sub-Total 18,230,031.37 31,500 Dhaka 1,000,000 City 4761 39 Corporatio Street Light 2011-2012 20,145,735.00 12,000,000 -BD n (Addl. Funding) Street Light 2011-2012 34,845,060.64 1,200,000 Sub-Total 54,990,795.64 2,200,000 Dinajpur 18,000 4761 40 (Addl. Road 2011-2012 29,396,155.00 179,207 -BD Funding) Drain 2011-2012 8,438,125.00 11,000 Sub-Total 37,834,280.00 29,000 Dohar 13,500 4761 Road, Drain 41 (Addl. 2011-2012 22,125,178.50 61,790 -BD Kitchen Market Funding) Road, Drain 2011-2012 31,254,024.10 15,500 Strret Light 2011-2012 20,297,700.00 13,000 Sub-Total 73,676,902.60 42,000 Dupchanch 11,500 4761 42 ia (Addl. Drain 2011-2012 20,656,944.00 26,136 -BD Funding) Drain 2011-2012 28,343,136.00 12,000 Sub-Total 49,000,080.00 23,500 3177 Road 2004-2005 2,554,807.50 6,500 99,945 43 Faridpur -BD Road 204-2005 7,386,364.80 7,500 Drain 2004-2005 6,945,327.90 7,000 Pipe Line 2006-2007 8,342,362.15 8,500 Sub Total 25,228,862.35 29,500 Feni 15,000 4761 44 (Addl. Road 2011-2012 20,577,877.00 80,000 -BD Funding) Drain 2011-2012 16,914,374.00 12,000 Sub-Total 37,492,251.00 27,000 3177 Drain, Kitchen 25,000 45 Fulbaria 2008-2009 25,466,542.00 34,000 -BD Market Sub Total 25,466,542.00 25,000 3177 17,000 46 Gaibandha Road 2008-2009 2,475,344.89 80,000 -BD Sub 17,000 2,475,344.89 Toatal

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. 3177 Road 2004-2005 4,722,607.61 5,400 723,451 47 Gazipur -BD Road, Drain 2004-2005 4,213,674.90 4,500 Road 2004-2005 2,150,771.60 3,500 Road, Drain 2004-2005 3,144,458.60 4,000 Road 2004-2005 2,711,886.30 5,600 Road 2004-2005 2,918,658.40 6,000 Road 2004-2005 2,402,817.40 4,500 3177 2006-2007 31,675,316.50 350,000 ( 2nd time) Poura Bhobon -BD 2006- 37,287,703.50 50,000 Community Center 20007 cum Auditorium Sub Total 91,227,894.81 433,500 Galachipa 15,000 4761 Road, Drain, 48 (Addl. 2011-2012 7,497,516.60 40,000 -BD Kitchen Market Funding) Sub-Total 7,497,516.60 15,000 3177 Road 2004-2005 5,345,421.90 4,500 51,512 49 Ghorashal -BD Road 2004-2006 7,874,121.60 7,000 Road 2004-2007 7,076,983.50 6,500 Road 2004-2008 5,726,370.61 6,000 3177 Road 2007-2008 6,844,098.71 8,000 (2nd time) -BD Road 2007-2008 9,400,577.21 7,000 Road 2007-2008 7,865,998.03 9,000 Road 2007-2008 5,297,991.24 4,500 Sub Total 55,431,562.80 52,500 Gopalpur 3177 Road, Drain, 2006-2007 12,510,519.81 25,000 57,000 50 (T) -BD Kitchen Market Drain 2006-2007 8,819,021.63 15,000 Sub Total 21,329,541.44 40,000 Goalonda 12,000 4761 51 (Addl. Road 2011-2012 20,374,074.60 45,000 -BD Funding) Sub-Total 20,374,074.60 12,000 Gopalganj 15,000 4761 52 (Addl. Road 2011-2012 14,697,513.90 60,000 -BD Funding) Drain 2011-2012 10,562,342.45 10,000 Sub-Total 25,259,856.35 25,000 3177 Road, Drain 2006-2007 9,959,008.30 7,500 42,241 53 Godagari -BD Road 2006-2007 8,128,411.55 6,500

Road 2006-2007 6,856,226.30 5,500

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Road,Drain 2006-2007 7,737,979.45 6,000

21,000 4761 (Addl. Road 2011-2012 10,900,466.00 -BD Funding) Sub-Total 43,582,091.60 46,500.00 3177 Drain 2006-2007 12,755,835.41 8,500 20,538 54 Ghatail -BD Road 2006-2007 7,370,646.74 4,500

Road 2006-2007 7,637,354.30 5,500

Sub Total 27,763,836.45 18,500 Gobindago 3177 Road 2006-2007 10,259,912.50 15,000 55 31,242 nj -BD Sub Total 10,259,912.50 15,000 2006-2007 9,838,177.29 20,000 27,454 3177 Road, Box culvert, 56 Gabtali -BD Slaughter House

Sub Total 9,838,177.29 20,000 3177 Road, Kitchen 2005-2006 11,485,515.60 15,000 62,300 57 Hakimpur -BD Market Road 2006-2007 10,693,834.60 8,000 Drain 2006-2007 8,674,085.10 5,000 Sub Total 30,853,435.30 28,000 58 3177 Road 11,481,300.00 14000 50,000 Hajigonj -BD Road 9,622,799.17 9500 (Addl. 4761 25,000 Road, Drain 2011-2012 14,871,559.60 Funding) -BD Sub-Total 35,975,658.77 48,500 3177 Road,Kitchen 2006-2007 12,409,447.96 15,000 95,000 59 Hobiganj -BD Market Bus terminal 2006-2007 9,974,989.40 30,000

Road,Kitchen 2006-2007 3,760,902.68 20,000

Market Road, Public Toilet 2006-2007 3,399,294.43 25,000 (Addl. 4761 14,500 Road, Drain 2011-2012 12,152,513.37 Funding) -BD Sub-Total 41,697,147.84 104,500 Horinakun 3177 2006-2007 9,746,958.48 25,000 125,000 60 Road du -BD Road,Kitchen 2006-2007 7,789,793.50 35,000

Market 2006-2007 2,675,411.28 10,000 Road, Box culvert

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Sub Total 20,212,163.26 70,000 Ishwarganj 15,000 4761 61 (Addl. Drain 2011-2012 16,418,413.51 45,000 -BD Funding) 15,000 Sub-Total 16,418,413.51 3177 Road 2004-2005 8,210,537.70 7,500 103,293 62 Ishwardi -BD Road 20065- 7,474,515.30 7,000

2006 Drain 20065- 7,453,667.70 7,500

2006 Road 20065- 7,097,016.60 7,000

2006 Road 20065- 8,905,697.10 8,500

2006 3177 Road 2007-2008 12,837,993.06 9,500

(2ndtime) -BD Road 2007-2008 6,579,840.50 6,500 Pipe Line 2007-2008 6,124,464.40 6,000 Road 2007-2008 11,095,222.60 9,500

Sub Total 75,778,954.96 69,000

3177 2007-2008 10,142,772.62 7,800 35,427 63 Islampur Road -BD Drain 2007-2008 10,772,265.12 8,000 Road 2007-2008 5,601,095.31 4,500 Sub Total 26,516,133.05 20,300 3177 Road 2005-2006 8,950,855.50 8,500 120,455 64 Jamalpur -BD Road, Drain 2005-2006 9,366,958.80 9,000 Road, Drain 2005-2006 8,560,581.30 8,000 Road, Drain 2005-2006 8,614,409.40 8,500 Drain 2005-2006 5,251,596.30 4,000 Road 2005-2006 6,814,171.80 4,500 Road 2005-2006 6,439,972.50 4,000 Sub Total 53,998,545.60 46,500 3177 Road, Drain 2005-2006 5,983,344.90 15,000 400,000 65 Jessore -BD Road, Drain 2005-2006 8,045,459.10 20,000 Road, Drain 2005-2006 9,770,274.90 15,000 Road, Drain 2005-2006 9,995,013.00 10,000 Community Center 2006-2007 10,495,313.10 25,000 Kitchen Market, 2006-2007 4,794,771.60 20,000

Street Light Sub Total 49,084,176.60 105,000 Jibon 3177 Road,Kitchen 2006-2007 7,966,811.70 7,500 25,742 66 Nagar -BD Market Road, Drain, Public 2007-2008 6,105,204.42 7,000

Toilet

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Road, Drain, 2007-2008 8,113,939.25 7,500

Kitchen Market Sub Total 22,185,955.37 22,000 Jhikorgach 3177 Road 2005-2006 10,166,480.10 8,500 27,834 67 a -BD Road 2006-2007 10,464,120.40 8,500 Road, Drain 2006-207 4,326,661.08 4,500 Sub Total 24,957,261.58 21,500 3177 Road, Kitchen 2005-2006 13,801,202.10 9,500 96,729 68 Joypurhat -BD Market Road 2005-2006 10,214,951.30 8,500 Road 2005-2006 10,758,619.90 8,500 3177 Drain 2006-2007 8,650,308.65 8,000 (2nd time) -BD 2006-2007 11,150,099.56 9,500 Road 2006-2007 6,766,414.70 4,500 Drain 2006-2007 8,637,164.85 5,500 Road 2006-2007 4,682,404.00 4,000 Sub Total 74,661,165.06 58,000 Road, Water 2005-2006 12,567,918.60 9,500 102250 Supply 3177 69 Jhenidah -BD

Road, Public Toilet 2006-2007 8,795,797.20 8,000 Road, Drain 2006-2007 10,803,011.40 9,000 Road,Kitchen 2006-2007 8,444,153.70 7,500

Market Sub Total 40,610,880.90 34,000 3177 Road,Kitchen 2006-2007 11,687,321.78 9,500 30,000 70 Kabirhat -BD Market Road, Community 2006-2007 12,781,637.17 8,500

Center Sub Total 24,468,958.95 18,000 3177 Road 2005-2006 8,742,130.20 15,000 30,200 71 Kahaloo -BD Drain 2006-2007 9,545,824.83 5,000 Sub Total 18,287,955.03 20,000 3177 Road, Public Toilet 2005-2006 8,086,732.20 6,000 18,867 72 Kalai -BD Road, Drain 2006-2007 8,169,625.40 5,500 Drain, Kitchen 2006-2007 6,576,641.68 4,000 Market, Public Toilet Sub Total 22,832,999.28 15,500 73 3177 Road 2009-2010 9,542,782.16 8,500 35,000 Kalapara -BD Road 11,520,567.35 10,500 Sub total 21,063,349.51 19,000 Keshabpur 11,500 4761 74 (Addl. Road, Drain 2011-2012 11,382,681.00 24,331 -BD Funding)

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Sub-Total 11,382,681.00 11,500 3177 Road 2006-2007 8,570,878.20 4,500 75 Kushtia -BD 23,865 Road, Drain 2006-2007 10,365,688.80 5,000 Road 2006-2007 8,382,537.00 3,000 Community Center 2006-2007 11,323,794.27 10,000 Sub Total 38,642,898.27 22,500 3177 Road 206-2007 9,111,183.02 25,000 156,000 76 Kaliakair -BD Road 2006-2007 8,717,816.98 15,000 Sub Total 17,829,000.00 40,000 Kalia 25,000 4761 77 (Addl. Community Center 2011-2012 8,934,955.00 35,000 -BD Funding) Sub-Total 8,934,955.00 25,000 3177 Road 2006-2007 8,962,189.65 6,000 18,144 78 Kakonhat -BD Road 2006-2007 8,745,771.55 5,600

Drain, Kitchen 2006-2007 3,912,214.46 3,500

Market Sub Total 21,620,175.66 15,100 3177 Road 2007-2008 11,707,712.89 10,000 46,250 79 Kaligonj -BD Road 2007-2008 11,234,773.04 8,000

Drain 2007-2008 10,374,328.18 5,000 Sub Total 33,316,814.11 23,000 Khulna 25,000 City 4761 80 Corporatio Road 2011-2012 32,132,835.60 1,500,000 -BD n (Addl. Funding) Road, 30,000 Communicity 2011-2012 34,806,192.20 Center Road, Drain 2011-2012 35,616,999.50 25,000 Road 2011-2012 30,916,149.00 20,000 Sub-Total 133,472,176.30 100,000 3177 Road 2007-2008 8,437,312.11 8,000 35,424 81 Kalihati -BD Road 2007-2008 10,020,752.80 7,000

Road, Kitchen 2007-2008 6,307,781.10 15,000 Market Sub Total 24,765,846.01 30,000 Kishorega 30,000 4761 82 nj (Addl. Drain 2011-2012 13,033,482.10 109,536 -BD Funding) Bus terminal 2011-2012 30,734,694.70 80,000

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. 28,000 Kitchen Market 2011-2012 6,173,573.04 Sub-Total 49,941,749.84 138,000 Kotchandp 3177 15,000 83 Road 2008-2009 11,056,392.00 50,000 ur -BD (Addl. 4761 18,000 Road 2011-2012 17,694,187.00 Funding) -BD Sub-Total 28,750,579.00 33,000 Kumarkhal 15,000 4761 84 i (Addl. Road 2011-2012 18,670,683.40 50,000 -BD Funding) 15,000 Sub-Total 18,670,683.40 Kurigram 15,000 4761 85 (Addl. Road 2011-2012 18,262,968.30 66,392 -BD Funding) Road 2011-2012 16,497,728.10 16,500 Sub-Total 34,760,696.40 31,500 3177 Road, Drain, Public 2005-2006 7,704,402.70 3,500 21,215 86 Lama -BD Toilet Road, Drain 2005-2006 6,881,864.40 3,000 Road, Drain, Public 2005-2006 5,889,061.80 4,500

Toilet 3177 2007-2008 12,610,920.60 3,000 Water Supply (2nd time) -BD Road 2007-2008 6,668,772.67 4,500 Water Supply 2007-2008 3,122,642.35 2,500 Road 2007-2008 3,731,369.27 4,500 (Addl. 4761 Water Treatment 10,000 2011-2012 35,779,340.22 Funding) -BD Plant & Supply Water Treatment 8,000 2011-2012 14,519,827.20 Plant & Supply Sub-Total 96,908,201.21 43,500 3177 Road, Drain 2004-2005 5,663,052.50 4,500 81,348 87 Laksam -BD Road, Drain 2005-2006 5,947,767.90 5,000 Road 2005-2006 5,666,793.30 4,500 Road 2005-2006 4,493,251.10 4,000 Road 2005-2006 6,116,637.60 6,500 Public Toilet 2005-2006 1,291,903.20 2,500 (Addl. 4761 15,000 Road, Culvert 2011-2012 8,698,541.92 Funding) -BD Road 2011-2012 14,103,529.20 10,000 Street Light 2011-2012 9,053,094.00 15,000 Sub-Total 61,034,570.72 67,000 Lakshmipu 3177 Road, Drain, Public 2007-2008 9,803,046.60 15,000 70,000 88 r -BD Toilet Road,Drain, Box 2007-2008 11,807,106.75 12,000

Culvert Road 2007-2008 5,917,835.20 10,000 Sub Total 27,527,988.55 37,000

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. 3177 Road, Drain 2005-2006 10,994,005.80 9,500 26,820 89 Lalmohan -BD Road,Drain 2006-2007 8,970,503.40 7,500 Road,Drain 2006-2007 6,360,107.40 6,000 Road, Box Culvert 2006-2007 9,005,721.00 7,000 Water Supply, 2006-2007 2,919,662.40 3,500

Tubewell 3177 Road, Drain 2007-2008 12,605,969.70 7,500

(2nd time) -BD Road, Drain 2007-2008 10,914,026.96 6,000 Production 2007-2008 8,232,137.50 3,000

Tubewel, Pipeline Sub Total 70,002,134.16 50,000

Lalmonirh 3177 Road 2007-2008 12,642,251.98 15,000 55,200 90 at -BD Kitchen Market, 2007-2008 10,147,431.47 10,000 Slaughter House Kitchen Market, 2007-2008 7,680,563.52 12,000 Slaughter House

Sub Total 30,470,246.97 37,000 3177 Road 2005-2006 5,587,321.95 20,000 91 Magura -BD 125,000 Road 2005-2006 6,949,378.80 10,000 Road 2005-2006 6,349,038.80 7,500 Kitchen 2005-2006 5,351,181.30 12,000

Market ,Drain Sub Total 24,236,920.85 49,500 3177 Road 2006-2007 11,628,146.28 30,000 230,000 92 Manikgonj -BD Water Supply 2006-2007 14,484,735.00 5,000 Office Building 2006-2007 20,604,873.69 50,000 46,717,754.97 85,000 Sub Total 3177 Drain 2006-2007 7,588,074.50 6,500 89,543 93 Madhabdi -BD Road, Drain 2006-2007 5,661,456.30 5,500 Drain 2006-2007 5,379,881.10 5,500 Drain 2006-2007 7,101,482.50 7,500 Madhabdi 14,500 4761 (Addl. Road, Drain 2011-2012 27,464,020.00 -BD Funding) Road 2011-2012 22,807,906.00 13,500 Street Light 2011-2012 20,601,000.00 12,000 Sub-Total 96,603,820.40 65,000 3177 Road, Drain 2005-2006 10,034,401.79 5,000 64,000 94 Meherpur -BD Drain 2005-2006 8,870,669.10 3,000 Road 2005-2006 13,900,691.70 4,500 Road, Drain, 2005-2006 8,508,926.70 20,000

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Kitchen Market Kitchen Market 2005-2006 9,712,089.90 10,000 Pipe Line, 2005-2006 11,013,366.60 3,000 Production Tubewell (2nd Road, Drain 2007-2008 7,400,744.20 5,000 3177 time -BD funding) Road, Drain 2007-2008 8,714,632.80 4,500 Street Light 2007-2008 2,827,000.00 10,000 2007-2008 33,981,300.00 10,000 Community Center

Community Center 2007-2008 4,033,799.00 15,000

( extension) Sub Total 118,997,621.79 90,000 3177 Water Supply, 2006-2007 6,958,305.90 5,000 35,200 95 Moheshpur -BD Public Tubewell Road, Drain 2006-2007 11,469,430.80 3,500 Road, drain 2006-2007 10,224,070.20 4,500 Road, Kitchen 2006-2007 9,629,527.50 4,500

Market Road, Drain 2006-2007 12,194,265.60 4,000 50,475,600.00 21,500 Sub Total 3177 Road, Drain 2006-2007 13,613,997.10 15,000 50,000 96 Mathbaria -BD Drain 206-2007 1,713,935.70 10,000 Sub Total 15,327,932.80 25,000

Muktagach 3177 Road, Drain 2005-2006 6,731,074.80 6,500 37,043 97 a -BD Road 2005-2006 8,036,546.40 7,500 Road, 205-2006 11,077,685.90 8,500 DrainBusterminal,

Public Toilet, Water supply Drain 2005-2006 7,343,093.70 7,000 Sub Total 33,188,400.80 29,500 3177 Road, Cross Drain 2007-2008 11,760,522.92 15,000 25,200 98 Melandah -BD Sub Total 11,760,522.92 15,000

99 Mirsarai 3177 Road 2007-2008 10,872,191.15 10,500 32,000 -BD Road 2007-2008 2,966,757.43 5,700 Sub Total 13,838,948.58 16,200 Monohardi 15,000 4761 100 (Addl. Drain 2011-2012 6,226,018.20 35,000 -BD Funding) Sub-Total 6,226,018.20 15,000

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Monglapor 3177 8,500 101 Road 2009-2010 6,114,188.74 45,000 t -BD Road 2009-2010 8,451,882.78 8,500 Sub Total 14,566,071.52 17,000 Moulvibaz 60,000 4761 102 ar (Addl. Kitchen Market 2011-2012 23,378,119.80 125,000 -BD Funding) Community Center 2011-2012 24,414,047.10 30,000 Road, Drain 2011-2012 8,352,794.52 12,000 Street Light 2011-2012 15,226,049.70 19,500 Sub-Total 71,371,011.12 121,500 Mundumal 12,000 4761 103 a (Addl. Road, Public Toilet 2011-2012 20,628,000.00 36,239 -BD Funding) Sub-Total 20,628,000.00 12,000 Mymensin 3177 Road 2007-2008 12,807,709.16 9,500 375,312 104 gh -BD Busterminal 2007-2008 14,442,910.15 10,000 Road, Street Light 2007-2008 8,790,127.99 7,500 Road 2007-2008 4,016,750.96 3,500 Road 2007-2008 12,407,383.37 9,000 Sub Total 52,464,881.63 39,500 105 Nabigonj 3177 11,500 Drain, Street Light 2008-2009 8,895,781.00 25,000 -BD Sub Total 8,895,781.00 11,500 106 Nageswari 3177 12,000 Road 2008-2009 12,299,798.83 27,000 -BD Road 2008-2009 7,060,272.67 9,500 Sub Total 19,360,071.50 21,500 Narail 15,000 4761 107 (Addl. Road 2011-2012 11,857,802.00 70,000 -BD Funding) Sub-Total 11,857,802.00 15,000 3177 10,500 108 Naogaon Road 2006-2007 13,453,322.05 57,000 -BD Road, Drain 2006-2007 14,861,081.25 11,500 Road, drain 2006-2007 12,497,099.40 10,000 Road 2006-2007 1,026,000.00 3,500 Road 2006-2007 4,743,125.00 5,000 Sub Total 46,580,627.70 40,500 3177 13,500 109 Noakhali Road 2009-2010 16,694,817.00 200,000 -BD Road 2009-2010 10,061,968.00 10,000 Sub Total 26,756,785.00 23,500 3177 Road, Drain 2004-2005 8,228,997.00 15,000 121,780 110 Narsingdi -BD Road,Drain 2004-2005 5,722,315.20 13,000 Road, Drain 2004-2005 5,456,037.29 15,000

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Road, Drain 2004-2005 4,651,492.82 15,000 3177 Drain 2007-2008 7,920,730.45 10,000

(2nd time) -BD Drain 2007-2008 11,113,511.13 9,000 Drain 2007-2008 11,418,227.48 6,000 Drain 2007-2008 12,391,329.75 7,200 Drain 2007-2008 14,876,662.91 8,000 Drain 2007-2008 12,047,054.03 6,000 Drain 2007-2008 11,002,023.48 5,000 Drain 2007-2008 11,255,171.22 4,000 Drain 2007-2008 11,587,552.28 5,400 Drain 2007-2008 9,486,283.54 1,800

Sub Total 137,157,388.58 120,400

Narayanga 3177 Road 2004-2005 4,512,994.60 5,500 241,393 111 nj -BD Road 2004-2005 3,333,131.10 3,500 Road 2004-2005 6,446,683.80 5,000 Road 2004-2005 4,458,178.80 4,500 Drain 2004-2005 2,093,584.60 7,800 Truck Terminal 2004-2005 5,567,897.80 15,500 (Addl. 4761 24,000 Road, Drain 2011-2012 34,923,446.00 Funding) -BD Road, Drain 2011-2012 35,038,610.00 26,000 Road, Drain 2011-2012 22,286,323.80 20,000 Road, Drain 2011-2012 21,719,599.00 25,000 Sub-Total 140,380,449.50 136,800 Nilphamari 18,500 4761 112 (Addl. Road, Drain 2011-2012 37,173,040.20 105,200 -BD Funding) Community Center, 45,000 2011-2012 20,782,885.00 Road, Drain Street Light 2011-2012 10754100 13,500 Sub-Total 68,710,025.20 77,000 3177 Road 2004-2005 6,403,257.00 7,000 42,000 113 Nowapara -BD Road 2004-2005 6,312,662.10 12,000 Road 2004-2005 7,247,162.70 9,000 3177 Road, Drain 2007-2008 8,366,538.60 4,500

(2nd time ) -BD Road 2007-2008 7,763,396.40 3,000 Drain 2007-2008 6,790,374.00 3,500 Road 2007-2008 12,447,334.80 4,500 Road 2007-2008 8,487,057.60 2,500 Road 2007-2008 8,590,715.10 3,000

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Sub Total 72,408,498.30 49,000 3177 Road 2006-2007 15,279,390.16 11,500 25,000 114 Nowhata -BD Road 2006-2007 11,065,988.52 9,500 Pipe line 2006-2007 5,838,849.20 8,500 12,000 4761 Road, Water (Addl. 2011-2012 20,520,589.10 -BD Supply Pipeline Funding) Sub-Total 52,704,816.98 41,500 3177 Road, Drain 2005-2006 9,631,768.50 15,000 125,942 115 Pabna -BD Road 2005-2006 6,488,460.90 12,000 Road 2005-2006 8,868,781.80 10,000 Road, Drain 2005-2006 9,082,185.70 6,000 Drain, Kitchen 2005-2006 7,620,771.60 5,000

Market Drain 2005-2006 7,025,031.90 3,000 (Addl. 4761 20,000 Road 2011-2012 30,704,091.90 Funding) -BD Drain 2011-2012 14,924,532.90 15,000 Road 2011-2012 11,195,569.80 25,000 Sub-Total 105,541,195.00 111,000 3177 Road, Drain, Public 2006-2007 13,550,069.25 12,000 37,000 116 Panchbibi -BD Toilet Road, Kitchen 2006-2007 10,797,071.40 8,000

Market Drain, Public 22,000 (Addl. 4761 Toilet, Slaughter 2011-2012 11,317,067.00 Funding) -BD House Sub-Total 35,664,207.65 42,000 3177 15,000 117 Patgram Road 2009-2010 15,084,096.00 35,000 -BD Sub-Total 15,084,096.00 15,000 Patiya 17,500 4761 118 (Addl. Road 2011-2012 19,359,899.00 50,120 -BD Funding) Sub-Total 19,359,899.00 17,500 Patuakhali 14,500 4761 119 (Addl. Road 2011-2012 17,444,930.21 80,000 -BD Funding) Kitchen Market, 19,000 2011-2012 30,839,786.00 Street Light Road 2011-2012 46,107,017.88 22,000 Sub-Total 94,391,734.09 55,500 3177 Road, Public Toilet 2006-2007 9,589,912.20 4,500 20,000 120 Parbatipur -BD Road, Drain, 2006-2007 8,819,966.70 3,800

kitchen Market Road 2006-2007 5,604,989.30 3,500 Drain, Public Toilet 2006-2007 4,444,738.20 3,500

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Sub Total 28,459,606.40 15,300 Phulpur 9,500 4761 121 (Addl. Road, Drain 2011-2012 16,883,406.90 30,000 -BD Funding) Street Light 2011-2012 9,818,316.00 10,500 Sub-Total 26,701,722.90 20,000 3177 Road 2007-2008 12,630,075.30 15,000 60,000 122 Pirojpur -BD Drain 2007-2008 6,772,566.44 5,000

Road 2007-2008 6,794,880.05 12,000

Sub Total 26,197,521.79 32,000

Rajshahi Road 2006-2007 10,676,097.90 35,000 795,451 City 3177 123 Corporatio -BD n Road 2006-2007 9,021,598.86 25,000 Road 2006-2007 7,827,485.67 22,000

Road 2006-2007 9,835,645.22 25,000 Road 2006-2007 9,514,707.32 20,000 Road 2006-2007 8,728,942.74 15,000 Road 2006-2007 9,584,402.09 17,000 Road 2006-2007 6,403,797.23 21,000 Road 2006-2007 10,335,634.65 12,000 (Addl. 4761 25,000 Road, Drain 2011-2012 28,425,266.10 Funding) -BD Road, Drain 2011-2012 34,290,921.50 20,000 Road, Drain 2011-2012 19,773,392.60 17,000 Road, Drain 2011-2012 19,736,227.80 22,000 Road 2011-2012 34,826,020.60 15,000 Road, Drain 2011-2012 12,988,786.00 19,000 Road, Drain 2011-2012 12,979,976.90 15,000 Road, Drain 2011-2012 16,188,895.02 12,000 Road 2011-2012 22,852,194.00 10,000 Road, Drain 2011-2012 20,848,929.16 13,000

Sub-Total 304,838,921.36 360,000 3177 2006-2007 13,175,635.15 8,000 35,000 124 Raipur Road, Drain -BD 2006-2007 12,976,743.17 6,500 Road, Drain

Road, Public Toilet, 2006-2007 14,142,408.40 10,000

Kitchen Market

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Sub Total 40,294,786.72 24,500 3177 Road 2005-2006 4,272,209.95 8,500 55,000 125 Rajbari -BD Road 2005-2006 5,525,344.80 6,500 Drain, Kitchen 2005-2006 9,301,685.40 5,000

Market Drain 2005-2006 9,061,685.10 3,500 Pipe Line 2005-2006 1,444,923.90 2,500 Sub Total 29,605,849.15 26,000 Rangamati 4761 126 (Addl. Road 2011-2012 28,786,979.00 16,500 66,836 -BD Funding) Road 2011-2012 23,885,515.00 15,000 Street Light 2011-2012 20,465,416.00 14,500 Sub-Total 73,137,910.00 46,000 3177 Road, Public Toilet 2005-2006 12,356,831.70 25,000 127 Rangpur -BD Road 2005-2006 9,361,631.70 15,000 444,218 Road 2005-2006 10,111,655.70 12,000 Road 2005-2006 9,551,991.60 10,000 Road 2005-2006 8,610,545.70 10,000 PUblic Toilet, pipe 2005-2006 7,986,263.40 25,000 line (Addl. 4761 15,600 Road 2011-2012 26,808,262.20 Funding) -BD Drain 2011-2012 17,350,781.00 14,000 Production 13,000 2011-2012 11,790,079.00 Tubewel Road, Drain 2011-2012 29,755,141.00 17,500 Street Light 2011-2012 18,526,950.00 30,000 187,100 Sub-Total 162,210,133.00

Raozan 17,000 4761 128 ( addl. Road 2011-2012 15,961,338.00 50,123 -BD Funding) 17,000 Sub-Total 15,961,338.00

3177 Community Center 2004-2005 8,766,721.80 25,000 500,000 129 Savar -BD Road, Box culvert 2004-2005 3,696,430.50 6,500 Road 2004-2005 3,091,786.20 5,000 Road 2004-2005 3,549,194.10 4,500 Road 2004-2005 2,722,212.00 5,000 ( Addl. 4761 Drain 2011-2012 23,021,192.00 15,000 Funding) -BD Road 2011-2012 20,567,957.00 20,000

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No.

Sub-Total 65,415,493.60 81,000

Road 2004-2005 5,564,300.05 4,500 48523 3177 130 Singra -BD

Road, Drain, 2005-2006 11,159,528.40 9,000

kitchen Market Road 2005-2006 10,269,836.80 8,000 Community Center 2005-2006 12,246,334.75 15,000 ( Addl. 4761 25,000 Office Building 2011-2012 18,959,761.80 Funding) -BD 61,500 Sub-Total 58,199,761.80

Singair 14,500 4761 Production 131 (Addl. 2011-2012 30,158,752.68 30,000 -BD Tubewel. Pipe Line Funding) Sub-Total 30,158,752.68 14,500 Road, Drain 2005-2006 8,710,756.20 15,000 35,000 3177 132 Sarishabari -BD

Sub Total 8,710,756.20 15,000 3177 Road 2004-2005 4,274,190.00 3,500 160,000 133 Satkhira -BD Road 2005-2006 6,016,680.90 4,000 Road 2005-2006 5,861,328.20 4,200

Road 2005-2006 5,659,010.10 3,200 Road 2005-2006 4,839,768.10 2,500 Drain 2005-2006 10,496,855.70 2,500 Drain 2005-2006 5,283,859.50 2,700 Pipe line 2005-2006 5,950,035.90 3,000 Pipe line 2005-2006 5,618,271.60 2,500 Sub Total 54,000,000.00 28,100 Shibganj 3177 Road 2005-2006 10,258,154.10 4,500 40,000 134 (Bogra) -BD Road 2005-2006 5,996,073.60 5,000 Road, Drain 2005-2006 7,871,673.50 12,000 Sub Total 24,125,901.20 21,500 3177 Road 2007-2008 8,311,719.60 3,500 40,000 135 Senbag -BD Road 2007-2008 4,315,671.40 4,500 Road, Drain, Public 2007-2008 9,053,152.28 12,000

Toilet Sub Total 21,680,543.28 20,000 136 3177 2008-2009 15,000 30,000 Setabgonj 9,603,000.00 -BD Sub-Total 9,603,000.00 15,000

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. 3177 Road, Kitchen 2006-2007 10,831,015.25 4,500 155,000 137 Sirajganj -BD Market Road, Kitchen 2006-2007 10,291,784.80 5,500 Market, Slaughter House Road, Drain, 2006-2007 10,690,571.10 4,600

kitchen Market Kitchen Market, 2006-2007 10,747,693.44 12,000

PublicToilet Sub Total 42,561,064.59 26,600 3177 Road, Drain 2005-2006 8,263,473.30 4,500 42,412 138 Sitakunda -BD Road, Drain, 2005-2006 3,241,798.80 5,000

Culvert Road, Box culvert 2005-2006 7,565,165.90 4,500

Road, Box culvert 2005-2006 8,252,830.50 5,500 12,000 4761 (Addl. Road, Drain 2011-2012 9,438,367.00 -BD Funding) Sub-Total 36,761,635.50 31,500 Shibgonj 3177 Road , kitchen 2006-2007 11,450,337.10 4,500 35,000 139 (Chapai) -BD Market Road, Public Toilet 2006-2007 9,147,967.40 12,000

Sub Total 20,598,304.50 16,500 Shaistagon 3177 Road, Kitchen 2009-2010 25,000 35,000 140 12,271,905.37 j -BD Market Sub-Total 12,271,905.37 25,000 3177 Drain 1,975,614.00 3,500 25,000 141 Shailkupa -BD Road,Drain 2007-2008 11,895,221.47 550

Kitchen Market 2007-2008 10,465,164.53 7,500 Sub Total 24,336,000.00 11,550

3177 Road 2006-2007 8,549,337.29 7,500 25,000 142 Santhia -BD Road,Drain, 2006-2007 10,225,729.06 12,000

Kitchen Market Sub Total 18,775,066.35 19,500 3177 Road 2006-2007 12,078,895.70 8,000 45,000 143 Satkania -BD Road,Kitchen 2006-2007 9,010,076.81 11,000

Market Road 4,888,261.19 5,000 ( Addl. 4761 15,000 Road 2011-2012 20,542,130.00 Funding) -BD Road 2011-2012 8,248,991.00 12,000 Road 2011-2012 11,466,299.00 10,000 Sub-Total 66,234,653.70 61,000

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Shahzadpu 3177 Road 2006-2007 9,411,106.80 8,000 30,000 144 r -BD Road,Drian 2006-2007 11,701,880.56 7,500

Road, Kitchen 2006-2007 9,061,487.83 10,000 Market Sub Total 30,174,475.19 25,500 3177 Road 2006-2007 9,695,027.45 4,500 35,000 145 Sonagazi -BD 2006-2007 8,823,122.75 5,000 Road,Drain

Road,Drain 2006-2007 6,961,601.56 5,000 Sub Total 25,479,751.76 14,500 3177 Road 2006-2007 6,046,934.38 4,500 40,000 146 Shakhipur -BD Road 2006-2007 10,068,648.38 4,200 Road 2006-2007 9,646,123.73 5,500 Sub Total 25,761,706.49 14,200 Sreemonga 3177 Production 17,500 147 2011-2012 29,346,649.20 71,908 l-A -BD Tubewel. Pipe Line Sub-Total 29,346,649.20 17,500 Road, kitchen 2006-2007 8,596,728.50 15,000 45,000 3177 148 Sreepur Market, Public -BD Toilet Road 2006-2007 8,560,285.67 4,500 Road, Drain 2006-2007 9,757,164.70 5,500 Sub Total 26,914,178.87 25,000 Swarupkat 8,500 4761 149 hi (Addl. Road 2011-2012 10,757,492.00 35,000 -BD Funding) Sub-Total 10,757,492.00 8,500 Sylhet City 25,000 Corporatio 4761 150 Road 2011-2012 26,591,596.00 1,000,000 n ( Addl. -BD Funding) Road, Production 35,000 2011-2012 19,107,762.17 Tubewel Drain 2011-2012 13,024,018.00 20,000 Street Light 2011-2012 17,862,553.80 35,000 Sub-Total 76,585,929.97 115,000 3177 Road 2004-2005 10,487,422.38 35,000 400,000 151 Tangail -BD Road 2004-2005 7,956,365.20 25,000 Road 2004-2005 8,595,636.10 22,000 Drain 2004-2005 9,198,239.40 10,000 3177 Road, Drain 5,943,349.14 15,000 2006-2007 (2nd time ) -BD Office Building 2008-2009 31,066,932.75 50,000 (Addl. 4761 Office Building 2011-2012 17,858,662.15 50,000

IDA Sl Name of Cred Type of Year of Actual Total No. of Total No. ULB it Investment Investment Expenditure Beneficiaries Population No. Funding) -BD (extension) 207,000 Sub-Total 91,106,607.12 3177 Road, Drain, Public 2006-2007 9,917,369.10 12,000 64,280 152 Tanore -BD Toilet 9,917,369.10 12,000 Sub Total

3177 Road, Drain 2004-2005 8,539,228.80 7,800 153 Tongi -BD 281,928 Road, Drain 2006-2007 8,137,726.20 8,500

Road, Drain, 2006-2007 6,550,001.10 6,500

Kitchen Market Road, Drain, Public 2006-2007 9,265,488.30 9,500

Toilet Road, Drain 2006-2007 9,386,159.40 10,000 Road 2006-2007 8,889,001.96 9,000 ( Addl. 4761 Production 5,000 2011-2012 37,895,564.80 Funding) -BD Tubewel, Pipe Line Production 4,500 2011-2012 41,358,027.20 Tubewel, Pipe Line Road 2011-2012 12,372,796.60 15,000 Road, Drain 2011-2012 10,875,984.80 17,000 Street Light 2011-2012 21,758,894.00 15,000 Street Light 2011-2012 10,452,595.50 20,000 Sub-Total 185,481,468.66 127,800 9,514,838 Grand 6,824,395,543.8 32,233,717 Total 4

Annex 3. Economic and Financial Analysis

Background

The project was implemented in two phases and had seven components. Phase one had five components which were investments in civil works, equipment, technical assistance, physical investments, and flood damage rehabilitation. The civil works component included financing for water supply, sanitation, roads, drainage, bus and truck terminals, slum improvement, solid waste management, markets, and land acquisition. The investments under the second component included solid waste equipment in Khulnaa and Rajshahi, and motor vehicles and computers for support personnel in each Pourashava. The third component provided technical assistance for institutional development, municipal database development, community development and participation, municipal development fund, technical studies, project implementation, staffing, and training. The fourth component (also referred to as the Chittagong Hill Tracts Component) financed physical investments in three municipalities (Rangamati, Bandarban, and Khagrachari) which were lagging behind other municipalities in service provision and urban development. Component 5 supported rehabilitation of damaged infrastructure in municipalities affected by the 1998 floods.

Phase two of the project had two components. The first component was the Municipal Development Fund to finance civil works, equipments, goods, and technical assistance. The second component provided technical assistance by providing technical support to the MDF specialists and municipalities and incremental O&M support and MSU during the initial years.

Most of these technical assistance and institutional development investments are not amenable to economic analysis because the benefits could not be estimated in monetary units. However, it is possible to quantify the benefits of the civil works investments. Thus, economic analysis was conducted for a sample of investments in roads, water supply and sanitation, and bus terminals for which adequate data are available.

1. Economic Analysis of Investment in Road Development

The project consisted of more than 160 roads in the participating cities and pourashavas (municipalities), some of which were very small investments. The small road projects usually involved resurfacing of roads. The economic analysis however was conducted for two roads for which adequate data on vehicle traffic, vehicle operating costs, travel time, and other relevant data are available. The two roads analyzed are Kahn Bahadur Road in Pabna Pourashava and the Line Road in Rangamatti Pourashava.

The economic benefits from investment in roads are savings in vehicle operating costs, savings from decreased travel time due to improved road conditions for all types of motorized and non- motorized vehicles, and other indirect benefits including economy wide impacts from additional job creation and multiplier impacts. Direct benefits from the investment in roads include reduction in travel costs and other indirect economic benefits. The savings in travel costs include reduction in vehicle operating costs and savings from reduced travel times. The indirect economic benefits include economy wide multiplier impacts of spending in road development though employment generation and consumption of construction materials. 64

1.1 Methodology and Data

Methodology

In order to estimate the benefits from the investment in roads, we estimated the savings in vehicle operating costs, travel times and travel costs saved, and the indirect economic benefits of the project. For this analysis, let q1 be the traffic volume in the road before the project and q2 the traffic volume after the investment in the road, and let VOC1 and VOC2 be the Vehicle Operating Costs (VOC) before and after the project, respectively. Similarly, let TOT1 and TOT2 be the Travel Time Costs before and after the project and T1 and T2 the number of travelers using the road before and after the project. Thus, the savings in vehicle operating cost is:

VOCSav= q1*(VOC2-VOC1) + 0.5*(q2-q1)*(VOC2-VOC1) = (VOC2-VOC1)*0.5(q1+ q2).

In addition to the savings in VOC, the investment in roads reduces travel times and thus there is a savings in travel costs. Let r represent the average vehicle occupancy per vehicle, T1 the travel time before investment, T2 the travel time after road investment, and w the average wage rate. Thus, the reduced travel costs associated with reduction in travel time is:

TTSav= r*q1*w*(T1-T2)+0.5*r(q2-q1)( (T1-T2)) = (T1-T2)*0.5*r(q1+q2).

The net benefits from the investment in roads becomes

Net Benefit = VOCSav + TTSav + IB +Economy wide impacts,

where VOCSav is the savings in vehicle operating costs, TTSav is the savings in travel time, and IB is the economy wide benefits arising from spending in road development. In order to estimate the indirect economy-wide benefits, it is assumed that spending in road construction creates employment and generates demand of materials in the economy and hence will have multiplier impacts on the economy.

Data

Traffic volume: Traffic count data for 12 hours was collected on the roads, which was converted to 24 hour traffic using factors of 35% for market days and 20% for non-market days. Average annual vehicle traffic is obtained by assuming wet season to be 17 weeks in a year and traffic during dry season to be 20% higher than in the wet season. In order to conduct the field surveys, a set of questions was prepared and one person in each station along the road was stationed in each road to collect information on traffic flow for all vehicles in both directions. Data on traffic volumes was provided by the implementing agency.

Vehicle operating cost: Vehicle operating costs (VOC) were calculated for all class/types of vehicles motorized and non-motorized at different levels of road roughness ranging from good to bad and earthen roads. For motorized roads, data for calculating operating costs were derived from interviews with bus and truck operators, vehicle body builders and vehicle traders. Data on vehicle operating cost was provided by the implementing agency

Travel time costs: Travel time costs were estimated based on the average vehicle occupancy for each type of vehicle using available information from road surveys provided by the implementing agency, and are comparable to the available information from the Bank financed Rural Roads Project.

Indirect benefits: The indirect benefits are economy-wide impacts from employment and spending in road and other construction materials used. Such indirect benefits include the multiplier impacts of wage income of construction workers generated from the road construction/reconstruction program as well as from additional economic activities resulting from linked businesses including suppliers of construction goods and services and employment opportunities created in the services sector. In order to compute the multiplier impacts of wage income and construction expenditures and other impacts on the economy, a multiplier of 1.08 was used in this analysis1.

In order to convert financial costs to economic costs, the standard conversion of 0.9 is used. Annual operation and maintenance (O&M) costs are assumed to be 0.5 percent of the total capital costs. In addition to the annual O&M costs, it is assumed that additional road repairs may be required once every five years to keep the roads in good condition. Such repairs are assumed to cost about 3 percent of the capital cost every five years. The traffic volume in the road is assumed to grow at an annual rate of 2 percent for all modes of transport. The life of the road is assumed to be 20 years with adequate maintenance repairs. In order to account for the unemployment and under-employment, a shadow wage rate factor of 0.87 is used for skilled labor and 0.67 for unskilled labor.

1.2. Project Costs, Benefits, and Economic Efficiency

The initial investment in the roads was Taka 34.07 million for the Kahn Bahadur road in Pabna Pourashava and Takka 41.9 million for the Police Line Road in Rangamatti Pourashava. The base case scenario assumes that all kinds of traffic in the roads will increase at an annual rate of 2 percent. A 2 percent increase in traffic volume is reasonable because the economy is expected to grow by about 6 percent and population at 1.2 percent. Under the base case scenario, the results (Table A3.1) show that the investment in the Kahn Bahadur Road yields modest returns in terms of benefit-cost ratio (2.34) and Net Present Value of cost and benefit streams and Internal Rates of Return (30.6%). Investment in the Line Road in Rangamatti Pourashava also yielded similar results with a benefit-cost ratio at 2.2 and Economic Rate of Return (ERR) at 27 percent.

The above results could be affected by changes in traffic volume on the roads. Hence, sensitivity analysis was done under two alternative scenarios. The first scenario assumes a 3 percent annual increase in traffic volume for all modes of transport, a plausible scenario given the economic

1 The multiplier was arrived at as 1/(1-x*y*z) where x is the percentage of new income the consumer and business will spend; y is the percentage of consumer expenditures made in the state/region; and z is the percentage of business expenditure made in the state/region. We have assumed that the values of x, y and z to be 0.4, 0.5 and 0.4 respectively (Income multipliers in Economic Impact Analysis, Guide Z-108, New Mexico State University. www.aces.nmsu.edu)

growth and increase in disposable incomes. The second scenario assumes that the traffic volume stays the same throughout the project life because there could be some diversion of traffic when other parallel roads are constructed.

The results of the sensitivity analysis show that even under a conservative assumption of zero traffic growth, the measures of economic efficiency are modest. Because the traffic volume increases, the benefit-cost ratio and the Economic Rates of Return rose, as expected.

Table 1. Measures of economic efficiency for investments in roads: base case and sensitivity analysis Kahn Bahadur road in Pabna Pourashva Line road in Rangamatti Pourashava Base case Sensitivity analysis Base case Sensitivity analysis 3% increase No increase 3% increase No increase in traffic in traffic in traffic in traffic volume volume volume volume Net Present Value 2,608 2,711 2,245 77.5 80.6 67.2 of benefits (000 $) Benefit: Cost 2.34 2.4 2.1 2.2 2.5 2.09 ratios ERR (%) 30.6 31.1 29.0 27 29 25

The above results show that based on the economic analysis of the two roads for which data are available, the investment in roads yielded modest economic returns. These returns are comparable to the ex-ante estimates of rates of return on the roads in Nilphamari and Joypurhat, as presented in the PAD. It may be noted that under the Municipal Services Project numerous roads of different classes have been constructed. Because the ICR team has neither the relevant data on all of the different roads financed nor a representative sample of road investments, an aggregation of the measures of economic efficiency of road investments under the project is not attempted here. However, the results of the economic analysis for the two roads show high levels of economic efficiency in road investments under the project.

2. Economic Analysis of Investment in Drainage

The objectives of improved drainage facilities were to mitigate urban degradation and to improve health conditions. In addition to the above direct benefits, the drainage investments reduced flooding of the roads during the monsoon season and thus increased road capacities. Thus, these investments resulted in improved reliability of the roads in the monsoon season, and also reduced the road maintenance costs of the roads because proper drainage reduced deterioration and damage to the roads from stagnant water. In order to estimate the project benefits we have only data on direct benefits in the form of payments by households for drainage services. Because we do not have data on indirect benefits such as reduced maintenance costs and damages to the roads such benefits are not included in this analysis.

2.1 Data and Methods

In addition to the investment costs, we have assumed that the annual O&M costs are 5 percent of the investment costs. We have also assumed that the drainage systems may require repairs and some minor reconstruction works in every five years. The costs of such repairs and reconstruction are assumed to be about 15 percent of the investment costs.

On the benefit side, the direct benefits from the drainage investments are the charges paid by the beneficiaries and thus the revenues from the drainage services provided to the beneficiaries. In addition to these direct benefits, there are a number of indirect benefits such as reduced urban degradation and improved health outcomes, reduced flooding of roads and thus damages to the roads, and an increase in road capacity. We do not have data to estimate these indirect benefits and hence is not included in the economic analysis.

2.2. Project Costs, Benefits, and Economic Efficiency

Economic analysis of the investment in the Pabna roadside drain for which we have data is presented below2. The initial investment in the Pabna roadside drain was Taka 9.78 million. In addition to the investment costs, the O&M costs and costs of repairs are also considered (see section 2.1). Under the base case scenario, the user charges are assumed to increase at an annual rate of 4 percent and the life of the investment is assumed to be 20 years with necessary repairs in every five years.

Measures of economic efficiency under a base case scenario and two alternative (sensitivity analysis) scenarios are presented in table 2.

Table 2. Measures of economic efficiency for investments in roadside drains: base case and sensitivity analysis Pabna Roadside Drain Base case Sensitivity Analysis Scenario 1 Scenario 2 Net Present Value 91.76 135.8 62.62 of benefits (000 $) Benefit: Cost 1.52 1.77 1.36 ratios ERR (%) 22 26 21

The base case scenario assumes that the user charges increase at an annual rate of 4 percent. The results show modest returns to investment with an Internal Rate of Return of 23 percent and benefit-cost ratio of 1.52. Note that the above estimates do not include indirect economic benefits like reduced damage to the roads from drainage, improved urban environment, and health and environmental benefits from the drainage3. Including such indirect economic benefits

2 We do not have data on benefits and user charges received for other drainage investments under the Municipal Services Project.

3 We do not have data to estimate such benefits

68 in the benefit computations will significantly improve the measures of economic efficiency because flooding and improper drainage and the consequent economic impacts are major problems in Bangladesh.

The results of the sensitivity analysis support the above results. Scenario 1 considers the case when the number of beneficiaries and the user charges increase by 2 percent and 4 percent, respectively. An alternative scenario 2 considers the case when the user charges alone increase by 2 percent on annual basis. These results show that even under conservative assumption of 2 percent increase in user charges, the returns to investment are positive with a benefit-cost ratio above 1 and an Economic Rate of Return at 21 percent.

The rate of return on drainage investments estimated at the time of project development (as presented in the PAD) used the beneficiaries’ willingness to pay measures. These estimates yielded an Economic Rate of Return at 22 percent. This estimate also did not consider indirect economic benefits such as savings in road maintenance costs and the environmental and health benefits of improved drainage. Our estimates of the rates of return are very close the ex-ante results reported in the PAD, although the methods used are different.

3. Economic Analysis of Investment in Bus Terminals

Investments in bus terminals included redesign of the terminals to provide more bus bays, paving, drainage, sites for ticket kiosks, passenger waiting areas, and other facilities. The benefits from such investments in the bus terminals included improved traffic management, lower turnaround times, and reduced congestion in and around terminal facilities, improved passenger access, and better facilities for passengers.

3.1 Data and Methods

In order to compute the economic benefits from these investments, we estimated the savings in vehicle operating costs for the buses operating in these terminals, and the savings from reduced passenger travel time costs that result from reduced delays for the buses. In order to estimate the benefits from the bus terminals, we used the methodology similar to the one used in the case of investment in roads. Data on traffic volume at the terminals before and after investment, vehicle operating costs with and without the investment, savings in travel times with the investment, and other indirect savings are used to compute the benefits from the bus terminals. a. Costs, Benefits, and Economic efficiency

Economic analysis of the investment in the bus terminal in Mymensingh Pourashava was conducted4. The total capital investment in the Bus Terminal was Taka 13.93 million over a period of four years. In addition to the investment costs, the O&M costs and costs of repairs are also considered (see section 2.1). Under the base case scenario, the user charges are assumed to

4 We do not have data on benefits and user charges received for other drainage investments under the Municipal Services Project.

increase at an annual rate of 4 percent and the life of the investment is assumed to be 20 years with necessary repairs every five years.

Measures of economic efficiency under a base case scenario and two alternative (sensitivity analysis) scenarios are presented in the Table 3. The base case scenario assumes that the number of buses using the improved bus terminal increases at an annual rate of 2 percent and the vehicles and passengers will save their vehicle operating costs and travel expenses including reduced travel times. The Internal Economic Rate of Return and the benefit-cost ratio under the above base case scenario were 23 percent and 1.63, respectively. These results are comparable to the estimated rates of return at project initiation presented in the PAD.

Table 3. Measures of economic efficiency for investments in Bus terminals: base case and sensitivity analysis Bus Terminal Base Case Sensitivity Analysis Scenario 1 Scenario 2 Net Present Value 221.9 226.64 162 of benefits (000 $) Benefit: Cost 1.63 1.65 1.42 ratios ERR (%) 23 24 22

Sensitivity analysis was conducted under two alternative scenarios. The first scenario considers the case when the number of vehicles using the improved terminal goes up at annual rate of 4 percent and the second scenario considers a more conservative case of one percent increase in number of vehicles using the terminal.

The team only had sufficient data on one bus terminal constructed under Phase two of the project to conduct economic analysis. The results suggest positive returns to investment in the terminal.

4. Economic Analysis of Water Supply Investments

The project supported multiple investments in water supply sub-projects. The major water supply investments involved replacement of existing wells, improvement of distribution systems, replacement of pumps and motors, flow meters, steel hydrants, hand pumps, pipes and valves. These investments improved the efficiency of water distribution systems and reduced water losses and thus reduced non-revenue water. Thus, the benefits water supply investments are increased efficiency of water supply systems, reduction in water losses, and thus increased revenue from water distribution. Because the team did not have sufficient data to estimate the benefits of the investments in water supply, it was not possible to attempt the economic analysis for these investments.

5. Fiscal Impact Analysis

The sustainability of the project depends on municipalities’ capacities to efficiently manage, operate, and maintain the assets created under the project, to continue to deliver urban services, and to mobilize local resources to finance these services. The project’s design required

municipalities to prepare Financial and Operational Action Plans (FOAPs) as pre-requisites to obtain project support for urban infrastructure. It is envisaged that the project and investments will be sustainable with the firm commitment and ownership of the government and municipalities in following the agreed FOAPs. Moreover, technical assistance related to institutional and financial capacity improvement was also provided to the participating municipalities to help ensure project sustainability. Finally, the participatory approach was used to create a sense of “ownership” among stakeholders to help ensure project sustainability.

6. Conclusion

The objectives of the project were to strengthen the institutional capacity of selected city corporations and secondary towns to plan, finance, implement, operate, and maintain urban infrastructure services in an efficient and sustainable manner; improve resource allocation and financial discipline through the creation of an improved financing mechanism for urban infrastructure; and reduce urban poverty and improve environmental conditions of urban communities through financing of the critical urban infrastructure and services.

The civil works undertaken as part of the project related to water supply, drainage, small bore sewerage systems, urban roads, sanitation, solid waste management, bus/ truck terminals, markets, slum upgrading, landing ghats, twin pit latrines; water supply components, and flood rehabilitation works of the urban infrastructures damaged in 1998, 2000, 2004 and 2007. As such, the project helped improve deficient urban services by investing in physical infrastructure and by strengthening the institutional and financial capacity of the participating municipalities.

The project also provided technical support to strengthen the institutional and financial capacity of municipalities. The capacity building support included: (i) computerization and improved management of Holding Tax bills and records, municipal accounts, water supply bills and records, Trade License records; (iii) the development of an Infrastructure Inventory and preparation of base maps; and (iii) support to community mobilization. In addition, the project supported training (both classroom and hands-on) to municipal mayors, officers and staff on procurement, engineering, accounting, and planning. The project also provided municipalities with requisite hardware and equipment. All of these inputs resulted in significant improvement in municipal service delivery, tax management, infrastructure planning, O&M, and computerized records. As a result, the municipalities are now more efficient, effective, and sustainable.

Economic analysis of selected investments in roads, bus terminals, and roadside drainage systems show that these investments were efficient with internal rates of return as high as around 30 percent. As the municipalities in Bangladesh were facing inadequate urban infrastructure services, weak management and financial capacity of municipalities, fragmentation of urban sector responsibilities and an increasing level of urban poverty and accompanying environmental degradation Bank’s investment in this project is fully justified in the light of positive results of the economic analysis of selected investments.

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members Responsibility/ Names Title Unit Specialty Lending Jonathan Kamkwalala Sector Manager AFTN2 Task Team Leader Municipal Toshiaki Keicho Sr. Urban Environment Specialist ECSS3 Development Environmental P. Illangovan Manager, Operations SACAF Engineer Social Assessment Santhadevi Meenakshy Consultant and Resettlement Procurement and Paula Reed Procurement Specialist SARPS Project Support Ajay Kumar Lead Transport Economist EASIN Economic Analysis Municipal Pinki Chaudhuri Consultant Development Fund Municipal Rick Tilghman Consultant Development Fund WB Disbursement and Saibul Huda Program Officer/Disbursement Officer Dhaka Project Preparation Financial and Ali Omer Golam Morshed Consultant institutional analysis Kwabena Amankwah-Ayeh Sr. Urban Specialist AFTU2 Project Preparation Consultant (former Unit Chief, Energy Financial and Arun Banerjee and Infrastructure Unit) Operational Issues

Supervision/ICR Anthony Graeme Lee Senior Municipal Finance Specialist SASDU Task Team Leader Songsu Choi Lead Urban Specialist SASDU Task Team Leader Financial Burhanuddin Ahmed Sr. Financial Management Specialist SARFM management Teen Kari Barua Consultant SASHN Social Development Civil Jaswant S. Channe Consultant SASDT engineering/procurement Md. Tafazzal Hossain Program Assistant SASDO Program assistance Olasumbo Adeyemo Program Assistant SASDO Program assistance Tanvir Hossain Sr. Procurement Specialist SARPS Procurement Marghoob Bin Hussein Senior Procurement Specialist SARPS Procurement Abdur Rahman Khan Consultant SASSD Civil engineering Zahed H. Khan Sr. Urban Specialist SASDU Task Team Leader Resource Pratima Kochar Resource Management Officer ECACA management Rajivan Krishnaswamy Consultant FEUCA Municipal finance

Elizabeth Mary Madan Information Assistant SASDO Information systems Financial and Ali Omer Golam Morshed Consultant SASFP institutional analysis Zibun Nessa Pinu Program Assistant SARPS Program assistance Mohammed Sayeed Consultant SASSP Disbursement Toshiaki Keicho Senior Urban Environmental Specialist ECSS3 Task Team Leader Financial Suraiya Zannath Sr. Financial Management Specialist SARFM management Zhiyu Jerry Chen Urban Specialist SASDU Project supervision Janis Bernstein Sr. Urban Development Specialist SASDU ICR Principal Author Viju Ipe Consultant (Economist) SASDU ICR Economist Yasmin Bijani Consultant (Urban Development) SASDU ICR Team Member

(b) Staff Time and Cost

Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY96 19.27 FY97 21.27 FY98 203.44 FY99 146.76 FY00 5 5.44

Total: 5 396.18 Supervision/ICR FY96 0.00 FY97 0.00 FY98 0.00 FY99 99.08 FY00 80.00 175.42 FY01 57.00 82.73 FY02 42.00 63.97 FY03 54.00 111.28 FY04 36.00 104.21 FY05 48.00 140.35 FY06 48.00 161.95 FY07 50.00 182.86 FY08 21.00 130.65 FY09 32.40 97.20 FY10 23.19 77.70 FY11 28.13 78.20 FY12 42.92 125.00

Total: 562.64 1630.60

Annex 5. Beneficiary Survey Results

The following summarizes the findings from two evaluations involving qualitative analysis of beneficiary and other stakeholder inputs.

In May 2012, the Municipal Support Unit (MSU) of the Municipal Services Project (MSP) carried out a limited survey to determine the efficacy of the Municipal Capacity Building Program (MCBP). The survey involved a set of questionnaires administered to mayors, councilors, and paurashava staff (tax, water, trade license, accounting, and engineering sections) and citizens that were involved in the MSU program. The rationale for the MCBP was to improve the paurashavas’ revenue-collection capacities by automating their taxes, water supply bills, trade licenses, and other relevant sections. The components of the MCBP included:

 Computerization and improved management of tax records;  Computerization and improved management of accounting reports;  Infrastructure database development and base map preparation; and  Community mobilization support to municipalities.  Computerization and improved management of water records; and  Computerization and improved management of trade license records.  Computerization of non-motorized vehicle.

Survey Highlights

2.1 Mayors (102) and Councilors (103): Nearly all mayors and councilors recognized an increase in revenue income, development of their staff’s capacity and skill, improved service delivery standard and increase in accountability and transparency. Only 2 mayors and 1 councilor said that they wanted to revert to the previous (manual) system.

Paurashava Staff

Tax Section (96 tax section staff interviewed): The majority of tax section staff indicated the following:

 Tax demand-collection procedures have become easier (96%);  Preparing tax billing is less time consuming (97%);  Possible to deliver tax bills to taxpayers on time (92%);  Transparency has increased due to collecting tax through banks (91%);  Collection efficiency has increased (93%);  Reports on tax demand-collection are easily available (94%); and  Taxpayers are happy with computerized tax billing (91%).  Efficiency has increased after using the tax billing software (99%).

Almost 40% of respondents reported that they were facing problems in using the new tax billing software; 99% said that they would not want to revert to the old system.

Water Section (57 water section staff interviewed): The majority of water section staff indicated the following:

 Water demand-collection procedures have become easier (93%);  It has been possible to prepare water billing in less time (93%);  It has been possible to deliver water bills to customers on time (93%);  Transparency has increased due to collecting water bills through banks (95%);  Collection efficiency has increased (90%);  Reports on water demand-collection are easily available (81%) and  Customers are happy with computerized water billing (90%).

Although over 60% of respondents reported that they were facing problems in using the water billing software, almost 100% (99%) said that they would not want to revert to the old systems of water billing.

Trade License Section (69 trade license staff interviewed): The majority of trade license staff indicated the following:

 Trade demand-collection procedures have become easier (74%);  It has been possible to prepare license billing in less time (74%);  It has been possible to deliver license bills to license holders on time (67%);  Transparency has increased due to collecting license bill through banks (70%);  License holders are happy with computerized trade licensing billing (67%).

According to the survey, 50% of respondents reported that they were facing problems using the trade licensing software, but 96% said that they would not want to revert to old systems of trade license billing.

Account Section (96 accounting staff interviewed): The majority of accounting staff indicated the following:

 Transparency has increased or will increase in accounting (96%);  Efficiency has increased after using the accounting software (97%);

Based on the survey, 93% of respondents said that they use the Municipal Accounting Software (MAS); roughly the same percentage said that they did not want to revert to old systems of accounts keeping.

2.3 Pourashava Citizens (93 citizens interviewed): The majority (95%) of the citizens surveyed reported that they knew that LGED was helping their paurashava perform collection activities by providing computers. The majority (90%) did receive computerized tax/water/trade license bills from their pourashava and of these, all felt that this was convenient. The majority felt that:  Bill payment through the banks is a good venture (99%);  Banking transactions will bring transparency (100%);

 Quick service delivery will be possible if all paurashava functions are performed through computers (99%).

Summary of Findings

The survey demonstrated that nearly all respondents – the paurashava authority, paurashava staff and citizens – consider the MCRP to be a well-timed program with beneficial effects. Participating paurashavas do not want to return to manual systems and now additional paurashavas want to be included in the program. The paurashavas also indicated that they would want to the program to continue (through LGED).

The paurashava holding tax revenue collection efficiency figures show that positive changes occurred in 80 paurashavas, negative changes in 18 paurashavas, and no change in only 2 out of 100 paurashavas after post computerization.

Water billing revenue collection efficiency figures have also improved in 34 pourashavas (out of a total of 48 pourashavas).

Before computerization, there was no infrastructure database or base maps in any of the paurashavas. Now there are 105 complete databases and 79 complete base maps; 12 partially complete databases and 22 partially complete base maps in 133 paurashavas.

Before the MSP, there was very little community-related support for paurashavas. Citizens’ awareness campaigns, formation of Town Level Coordination Committee, Ward Level Coordination Committee, and Community Based Organizations started first under the MCBP.

Finally, the majority of respondents believed that they had no opportunity for training before the program. The MSU initiated comprehensive professional improvement training programs for paurashava employees in addition to core trainings (e.g. basic computer training, software operation and maintenance training, field survey training, etc.). Through the program, the MSU provided:

 4,472 days of core training (e.g. basic computer training on tax, accounts, water, trade license; software operation training; four-day initial survey training, etc.) for 864 employees in 50 new paurashavas.  2,169 days of refresher training for 225 employees in 130 old paurashavas.  3,810 days of additional training (e.g. quality control and supervision, double entry accounting, orientation on software, etc.) for 876 employees.

If there had been more time, a more comprehensive survey would have ensured a higher pool of respondents. However, the trends suggest that mayors, councilors, pourashava staff and citizens all perceive the MCBP to have significantly enhanced their municipality’s ability to collect taxes, water bills and trade licenses; improved transparency; and increased overall efficiency.

Impact Evaluation

The following is a short summary of the findings and lessons from a qualitative evaluation study entitled ‘Impact Evaluation of Six Project Municipalities”. The study was financed and commissioned by the Bangladesh Municipal Development Fund and conducted by the Development Support Link (DSL) from June 1-30, 2007.

At the time, BMDF had financed 100 Urban Local Bodies (ULBs) and, upon successful completion of the first phase of the project, 13 ULBs were approved to implement the second phase development activities. The objective of the evaluation was to assess the impacts of specific phase I project components in six municipalities (Narsingdi, Noapara, Chapai Nawabganj, Gazipur, Meherpur, Choumuhani).

Methodology

The six municipalities were selected by BMDF to ensure geographic variation. All major stakeholders, including project beneficiaries, local elite, NGO officials, ward commissioners, retailers, and buyers were represented. The methodologies used for collecting data and information included:

 Literature Review – reviewing secondary sources of information such as project documents, sub-project appraisal report, MIS/performance data, etc.;  Focus Group Discussions;  Key Informant Interviews – with local elite and members of civil society;  SWOT Analysis; and  Observation – key service facilities created, developed or renovated.

The Field Research Officers (FROs) and Field Coordinator (FC) participated in a two-day training on the questionnaires and methodology of the evaluation study. There were three separate questionnaires targeting three separate groups: (a) civil society doctor, teacher, NGO official, ward commissioner, deed writer; (b) market wholesalers, retailers, and buyers; and (c) beneficiaries. The FROs and FC were also provided an observation checklist for the impact evaluation study.

Findings

The following summarizes the main findings of the study. The municipalities included in the evaluation of each of the key findings are indicated next to each project component.

Roads – (all six select municipalities)  ‘Good’ – no water logging, no mud;  Road widened with footpath – pedestrian mobility increased, more transport on road;  Increase in employment;  Increase in enrollment in schools and colleges;  Increase in land value, with the highest values along the road;

o Narsingdi: Increase to Taka 30,000 to 60,000, depending on the distance to the road. o Noapara: Increase to Taka 15,000 to 30,000. Several respondents indicated that the increase in land value might not have been attributable to road improvements only since land values had been increasing on their own. o Chapai Nawabganj: Increase to Taka 5,000 to 20,000. The majority of respondents said that the percent increase in land values had increased once roads were improved. o Gazipur: Increase to Taka 20,000 to 70,000. All respondents reported that land values increased on both sides of improved roads. o Meherpur: Increase to Taka 30,000 to 50,000. o Choumuhani: Increase to Taka 70,000 to 100,000.

 Easy movement of patients;  Decrease in transportation cost of both people and goods in some places and increased cost in other places;  Increase in volume of trade and business; and  No one was displaced and no adverse ecological/environmental impact.

Drains – (Narsingdi, Chapai Nawabganj, Gazipur, Meherpur, Choumuhani)

 Water does not clog, water logging has declined;  Generally, bad odor does not spread;  In some places, mosquitos have increased but they have decreased overall. Incidences of malaria and dengue have also decreased;  Water flows away easily – garbage is often piled up to hinder the flow of water;  Improved environmental conditions; and  No loss of land by individuals – increase in land value.

Public Toilet – (Chapai Nawabganj)

 Many knew about the public toilets in the municipality;  Decrease in indiscriminate defecation and urination;  Decrease in odor from roadside open latrines and urinals;  Decrease in air pollution;  Decrease in incidence of intestinal diseases;  Overall improvement in environment; and  Quality of toilet ranges between ‘good’ and ‘moderately good’ – water supply in toilet is through a piped supply system.

Kitchen Market: (Meherpur)

 Permanent shops have been built;  No risk of being soaked in the rain or of losing any goods;  Increase in supply of goods and commodities;

 Buying and selling continue until late at night – volume of trade has increased;  Increase in employment opportunities;  Decline in bad odor;  Improved kitchen market drainage and environmental conditions;  Market is not large enough, resulting in congestion of buyer and sellers and leaving inadequate space for farmers to stockpile goods; and  Mosquitos breed in the market drains.

Water Supply (pipeline and production tube well): (Meherpur)

 The majority of people drink from the water supply;  Water quality is “moderately good” to “very good”;  No reported arsenic content;  Source of supply water is production tube well; and  Decrease in incidences of water-borne diseases.

Key Recommendations

Based on the findings of this limited evaluation, the main recommendations included the following:

 Roads and drains should be improved before all other improvements (water supply, public toilets, kitchen market, etc.) are made to maximize benefits.  The development work, especially the work on the drains, should have been supported by an awareness campaign on proper solid waste disposal to avoid blocking drains.  In addition to the awareness campaigns, local level committees should be formed to help raise awareness about the importance of the project components to development goals and to improving environmental conditions.  Release of funds should be expedited to ensure a timely start to the work.

Annex 6. Summary of Borrower's ICR and/or Comments on Draft ICR

Summaries of Project Completion Reports Prepared by LGED and BMDF

LGED: Phase I of Municipal Services Project

1.1 Background

Bangladesh experienced the highest growth rate in Asia, a growth rate of about 4.2% per annum, during the last decade of 20th century. At that time, the urban population was estimated to be about 25 million, or roughly 20% of the total national population of about 120 million. Although this rapid urbanization was mainly limited to the four metropolitan cities of Dhaka, Chittagong, Khulna, Rajshahi, the smaller municipalities also started experiencing high growth rates. As a result, the GOB’s interventions had sought to both prevent the deterioration of service delivery in larger cities and forestall service deterioration in rapidly growing secondary cities. The main issues facing the urban sector in Bangladesh were (i) inadequate urban infrastructure services, fueled by rapid urban growth; (ii) weak financial and management capacity of municipalities; and (iii) an increasing level of urban poverty and environmental degradation. In the above circumstances, the GOB requested the World Bank to provide financing for a feasibility study in support of the Municipal Services Project (hereafter referred to as “MSP”).

Accordingly, in 1993, the GOB approved a Project Preparatory Technical Assistance (TA credit No. 2393 BD) for a Municipal Services Project (MSP). Under the TA, Mott Macdonald Ltd., Louis Burger International Inc., Engineering and Planning Consultants LTD, AQUA Consultant & Associates Ltd. Consultant & Associates Ltd. undertook a detailed feasibility study for preparing the MSP. The Local Government Engineering Department (LGED) of the Local Government Division under M/O LGRD & Co-operatives, acted as the Executing Agency (EA) for the TA project.

Two City Corporations (Khulna & Rajshahi) and 14 Pourashavas (Mongla, Satkhira, Narail, Chuadanga, Patuakhali, Pirojepur, Gopalgonj, Dinajpur, Sayedpur, Nilphamari, Parbattipur, Kurigram, Joypurhat, Naogaon) were selected based on pre-specified criteria for inclusion in the MSP.

IDA fielded the Pre-appraisal Mission and the Appraisal Mission on the MSP in March and in June-July of 1998, respectively. During the negotiation of the project it was agreed that three Chittagong Hill Tracts Pourashavas (Rangamati, Khagrachari and Bandarban) would be included in the project. These three pourashavas were selected because they had so far lagged behind other municipalities in service provision and urban development.

In September and October of 1998, the country was severely affected by a devastating flood, resulting in heavy damage to urban infrastructure. During project negotiation, IDA agreed to include a “Flood Damage Rehabilitation” component in the MSP to finance the rehabilitation efforts of all the municipalities that had been affected by the 1998 flood.

Negotiation for the credit of the project was held at the World Bank, in Washington D.C. from December 14, 1998 to December 18, 1998. The credit agreement was signed on April 26, 1999 with the date of effectiveness for the credit set for October 25, 1999. The Project Concept Paper (PCP) was discussed in an Inter-ministerial Meeting (Pre-ECNEC) on December 03, 1998. Subsequently, the PCP was approved in the ECNEC meeting held on March 03, 1999. The 1st and the 2nd revised PPs were approved by ECNEC on May 29, 2002 and December 12, 2005 respectively and the 3rd one was approved in ECNEC meeting on January 30, 2008.

During the execution of the project, a second devastating flood resulted in acute damage in the southwestern part of the country in 2000. Upon the consent of the World Bank the Flood Disaster Relief (FDR) component was expanded to incorporate the FDR 2000 to restore communication and transportation networks in the affected pourashavas. After a third flood, in 2004, the World Bank allocated an additional US $26 million, which was also incorporated in this project. After a fourth flood, in 2007, the World Bank provided an additional US $25 million.

1.2 Justification/Adequacy

Urban services improved substantially through the MSP due to investment in physical infrastructure, institutional strengthening, investment in improving the financial capacity of municipalities, and provision of technical support to municipalities. Sector issues addressed by the project include: (i) urgent need for basic services, particularly in low-income areas, addressed through implementation of the physical investment program in the project; (ii) weak local government institutions, addressed through the provision of technical assistance to improve the institutional and financial capacity of municipalities; (iii) improved sustainability to service provision through the involvement of the community and other stakeholders, addressed through a participatory and partnership approach.

In 1999, an Urban Management Policy Statement was issued by the Local Government Division, which stated the GOB’s policy and principles towards urban management. A Municipal Performance Review Committee (MPRC) was established at the ministry level, chaired by the Secretary of the Local Government Division, to support institutional development efforts. The project also supported institutional development through the creation and operation of Municipal Support Unit (MSU). It provided technical assistance and training for the development of management information systems and revenue enhancement measures in municipalities and city- corporations. The capacity building support included (i) computerization and improved management of Holding Tax bills and records, municipal accounts, water supply bills and records, and Trade License records; (ii) development of Infrastructure Inventory and preparation of base maps; and (iii) community mobilization support.

The establishment of the Bangladesh Municipal Development Fund (BMDF) was one of the most important components of MSP. BMDF was established as an independent entity under the Company Act 1994, administered by the Finance Division of the Ministry of Finance.

The project’s coverage of basic service provision, institutional strengthening, establishment of new financing mechanism, and policy reform make it a unique and justified project.

1.3 Objectives

The principal objective of the project was to improve environmental conditions, physical infrastructure and municipal service delivery. The specific objectives of the project were to:

 Strengthen the institutional capacity of selected city corporations and secondary towns to plan, finance, implement, operate, and maintain urban infrastructure services in an efficient and sustainable manner;  Improve resource allocation and financial discipline through the creation of an improved financing mechanism for urban infrastructure; and  Reduce urban poverty and improve environmental conditions of urban communities through financing of the critical urban infrastructure and services.

1.4 Project Revisions

Reasons for First Revision

1. The original Project Concept Paper (PCP) and Project Paper (PP) were prepared on the basis of Draft Project Appraisal Document (PAD). During the Credit Negotiation some changes were made that include mainly (i) increased scope of physical works, and (ii) increased amount of IDA credit.

2. The project did not become effective until October 1999, despite the fact that the feasibility study was completed in 1995. Due to this long gap, during field verification, the consultants found that many of the originally recommended schemes had either already been implemented by the City Corporations/Pourashavas with alternative source of financing, or the scope of works had changed considerably. In view of this, there was a need for re-selection of some new schemes.

3. During Credit Negotiation, upon a request from the GOB, a flood (1998) rehabilitation component with an IDA credit allocation of $16.2 million USD was included in the project for which, at that point of time, no assessment was in place. After the commencement of the project, a substantial amount of time was required by the consultant to carry out the country-wide flood- damage assessment task.

4. During Credit Negotiation, upon a request from the GOB, three pourashavas of the Chittagong Hill Tracts region were included in the project. At that time, the scope of work was not defined. Afterwards, the feasibility study and identification of schemes in these pourashavas were carried out through a participatory and partnership approach (PPA).

5. There had been some modifications as regards to the structure, tires, and positions in the MSU through amendment of the DCA.

6. To address the above issues, the first revision of the project was made and subsequently approved by the ECNEC on May 29, 2002. During this revision the benefit due to variation in the exchange-rate was also taken into account.

Reasons for Second Revision

1. One of the most important components of the MSP was the establishment of the Bangladesh Municipal Development Fund (BMDF). The BMDF was incorporated as an independent entity, under the Companies Act 1994. In the original DCA, the allocation of IDA portion of the credit to “BMDF” and “Other than BMDF portion (i.e. LGED portion)” was not shown separately. The DCA was later amended to separate out the allocation for these two components. This was the prime reason of second revision.

2. The south-western region of the country was seriously affected by flood in 2000. To rehabilitate the damaged structures, following consent from the World Bank, the US$4.5 million was reallocated within the MSP budget. This Rehabilitation works had also been included in the 2nd revision.

3. Following the decision of the Local Government Division and subsequent consent from the World Bank towards the government’s “Total Sanitation Program,” three pourashavas of Chittagong Hill Tracts region were incorporated in this project.

4. A portion of flood (2004) damage rehabilitation works for the affected pourashavas was included in this project. The World Bank allocated US$26 million for this rehabilitation works.

5. Some adjustments of physical and financial targets had been made on the basis of actual requirement and also in light of the agreements reached with the World Bank supervision missions from time to time.

6. The advantage out of variation in exchange-rate was taken into account.

Reasons for Third Revision

1. The World Bank agreed to provide US$27 million for rehabilitation of a portion of the municipal infrastructures damaged by the 2007 flood. Following a number of meetings between the World Bank and GOB (ERD), it was decided to channel this assistance through the ongoing MSP so that the rehabilitation work could start quickly. This was the prime reason for the third revision.

2. Out of the total World Bank assistance of US$27 million for the Flood Damage Rehabilitation (FDR) 2007 component, US$25 million of additional financing was added to the MSP and US$2 million was reallocated within the MSP (as per decision between ERD and World Bank). Some internal adjustment was necessary in order to make US$2 million available from within MSP, another major reason for this proposed revision. In addition, some adjustments to the physical and financial targets were made on the basis of actual requirements. The variation in exchange rate was not taken into account.

2.1 Project Rationale

The Physical Planning, Water Supply and Housing (PPWS&H) Sector of the Planning Commission of Bangladesh covers a broad range of activities, which include:

 Delivery of basic services to the Pourashavas, including slum dwellers;  Provision of safe drinking water, sewerage, and sanitation facilities;  Development of basic infrastructure and services;  Combating environmental degradation.

Therefore, the civil work activities undertaken within the Municipal Services Project – related to water supply; drainage; small bore sewerage system; urban roads; sanitation; solid waste management; bus/ truck terminals; markets; slum upgrading; landing ghats; twin pit latrine; water supply components; and flood rehabilitation works of the urban infrastructures damaged in 1998, 2000, 2004, and 2007 – were very much in line with Sector activities.

The project also helped improve deficient urban services by investing in physical infrastructure and by strengthening institutional and financial capacity of municipalities. Sector issues addressed by the project include:

 Urgent need for basic services, particularly in low-income areas, through the implementation of the physical investment program in the project;  Weak local government institutions through provision of technical assistance to improve the institutional and financial capacity of municipalities;  Improved service provision sustainability by engaging community and stakeholder involvement through a participatory and partnership approach.

Moreover, the rehabilitation program mainly covered the smaller pourashavas, which typically have a greater majority of poor or low income residents. Restoration of transport networks and commercial facilities had a great impact on employment and was crucial to restoring their livelihood. In addition, the improvements in the drainage system and water supply had a considerable impact on improving general environmental conditions and pourashava residents’ health and well-being.

The project also provided technical support to strengthen the institutional and financial capacity of municipalities. The capacity building support included: (i) computerization and improved management of Holding Tax bills and records, municipal accounts, water supply bills and records, Trade License records; (iii) the development of an Infrastructure Inventory and preparation of base maps; and (iii) support to community mobilization. In addition, the project supported training (both classroom and hands-on) to municipal mayors, officers and staff on procurement, engineering, accounting, planning etc. The project also provided municipalities with requisite hardware and equipment. All these inputs resulted in significant improvement in municipal service delivery, tax management, infrastructure planning, O&M, and computerized records. As a result, the municipalities are now more efficient, effective and sustainable.

3. Project Identification

A detailed feasibility study was carried out and supported through the Project Preparatory Technical Assistance. The locations of the project were identified based on specific criteria, including population growth rate, economic growth potential, present deficiencies, local institutional and financial capacity, and potential for growth in local revenues.

An IDA Project Preparation Mission visited Bangladesh in September and October of 1997. It was then decided that the schemes identified in the feasibility study would be included in the project, provided that the selected municipalities met the criteria for economic, financial, and administrative feasibility, and were committed to improving O&M and financial management capacity.  3.1 Project Preparation

In 1993, the GOB approved a Project Preparatory Technical Assistance under TA credit No.- 2393 BD for the Municipal Services Project (MSP). Under this TA, a detailed feasibility study was undertaken in preparation for the MSP. The study examined several indicators – including population growth rate, economic growth potential, present deficiencies, local institutional and financial capacity, and potential for growth in local revenues as well as to establish specific selection criteria for project locations. Two City Corporations (Khulna and Rajshahi) and fourteen pourashavas (Mongla, Satkhira, Narail, Chuadanga, Patuakhali, Pirojepur, Gopalgonj, Dinajpur, Sayedpur, Nilphamari, Parbattipur, Kurigram, Joypurhat, Naogaon) were selected based on the criteria. During the appraisal in June and July of 1998, three Chittagong Hill Tracts Pourashavas (Rangamati, Khagrachari and Bandarban) were also included in the project.

Credit negotiations took place during December 14-18, 1998 but a credit agreement was not reached until April 26, 1999. The credit became effective on October 25, 1999, with a loan disbursement of SDR 76.190 million. The conditions of the loan were:

 Commitment charge at a rate of 0.5% per annum on the principal amount of the Credit.  Service charge at a rate of 0.75% per annum on the principal amount of the Credit.  Commitment charges and Service charges are due on February 1 and August 1 of each year.  Grace period of 5 years.  Payment of the principal amount of the Credit will be through semiannual installments on February 1 and August 1 starting from August 1, 2009 and ending on February 1, 2039.  3.3 Project Approval

The Project Concept Paper (PCP) was prepared and discussed in an Inter-ministerial Meeting (Pre-ECNEC) on December 03, 1998. Subsequently, the PCP was approved in the ECNEC meeting held on March 03, 1999. The 1st and the 2nd revised Project Papers were approved by ECNEC on May 29, 2002 and December 12, 2005, respectively. The 3rd revision was approved in ECNEC meeting on January 30, 2008.

4. Project Evaluation

Understanding of Beneficiaries. The beneficiaries of the project do not have a detailed understanding of the overall objective of the project but do understand the benefits of reduced transportation cost, better marketing facilities, improved solid waste management, sanitation, and water supply. They also clearly experience the benefits of the municipalities’ computerized billing systems.

Direct and Indirect Impacts. The impacts of the project can be organized into direct and indirect impacts. Direct impacts include improvements in urban service delivery and institutional strengthening and capacity building of the City Corporations and Pourashavas. The indirect impacts of the project include an urban environment, better health and higher employment generation. In addition, given that the project was jointly implemented by LGED and participating municipalities/City-Corporations with assistance from high level consultants (both foreign and local), it has familiarized municipal staff with advanced methodology and techniques of civil works.

Technology Transfer: Computer software developed under the project regarding holding tax, water billing, trade license, non-motorized vehicle management etc. was transferred to participating City Corporations and Pourashavas.

Employment Generation. 1.35 million employment days were generated during project implementation. Maintenance and operation activities create additional long-term employment opportunities.

Possibility of self-employment: The project created the potential for self-employment through the improvement of kitchen markets, mini super market, bus/truck terminals, and landing ghats.

Employment opportunities for women: During the operation of various facilities created under the project (like kitchen market, bus/truck terminal, public toilets, and solid waste management), it is expected that there will be increased opportunity for women’s employment. Moreover, in the long run, women could be employed in the maintenance works.

Women’s participation in development: The selection of sub-projects adopted a participatory approach to ensure participation by both men and women.

Probable Impact on Socio-Economic activity : The project achieved several socioeconomic benefits. Construction of roads and culverts ensure better accessibility and a decrease in vehicle operating costs and incidence of road accidents. It also increases the opportunities of small business and auto rickshaw driving, health care and schooling facilities. Drains constructed through the project improved wastewater disposal and the environment. Public toilets and the solid waste components also contributed to improvement of the urban environment. Construction of bus/truck terminals increase the number of passengers and cargos in road transportation and create opportunities for increased income from driving, business and other related services. The slum development component improved living conditions and service delivery and increased employment potential in the slums. Furthermore, institutional strengthening measures increased

86 revenue generation and enabled the urban local bodies to better implement and maintain urban infrastructure facilities. Finally, the establishment of the Bangladesh Municipal Development Fund reduced the dependence of ULBs on Central Government.

Impact on environment: Avoidance and mitigation measures were incorporated in sub-project designing and bidding documents to reduce environmental impacts. Improved solid waste management and provision of public toilets have substantial improved environmental conditions and public health. Provision of cross- and storm-water drainage also reduced water-logging, which has also improved the environmental situation.

Sustainability of the project: The sustainability of the project depends on municipalities’ capacities to efficiently manage, operate and maintain the assets have been created under the project, to continue to deliver urban services, and to mobilize local resources to finance these services. The project’s design involved preparation of financial and operational action plans as pre-requisites to help ensure sustainability. Moreover, technical assistance, related to institutional and financial capacity improvement, was also provided to the participating municipalities to help ensure project sustainability. Finally, the participatory approach was used to create a sense of ‘ownership’ among stakeholders to help ensure project sustainability.

Contribution to poverty alleviation/reduction: Poverty alleviation has been partially addressed through investment in physical infrastructure, including: (a) water supply; (b) drainage; (c) urban roads; (d) sanitation; (e) solid waste management; (f) bus and truck terminals; (g) markets; (h) slum upgrading; (i) landing ghat; (j) twin pit latrine; (k) water supply components; and (l) rehabilitation works of the urban infrastructures damaged in the 1998, 2000, 2004, and 2007 floods. The productivity of the city population, particularly of the poor, has significantly increased as a consequence of better living environment and better public health. The civil works components of the project also created employment opportunities for the poor.

5. Problems Encountered During Implementation

Procurement: All procurement was subject to compliance with the World Bank Procurement Guidelines. The municipal authorities’ lack of familiarity with the Guidelines resulted in deviations in procurement that ultimately led to cancellation of bids and re-bids. The problem was overcome through orientation workshops and training on the Guidelines.

Natural calamity: During implementation, the project faced three severe floods (2000, 2004, and 2007) that damaged much of the infrastructure built under the project. These were rehabilitated through incorporation of additional financing for Flood Damage Rehabilitation Programs.

Design formulation/ approval: The project was approved in 1999, two years after it had been designed. As a result of the long time lapse, some of the road schemes proposed in the feasibility report were no longer valid because they had been built or rehabilitated with other sources of funding. The issue was resolved by revising the scheme list in consultation with municipal authorities. In addition, the scope of the FDR 1998 works and three CHT municipalities was not included in the feasibility report. These two major components were included during credit negotiation of the project. As a result, it was not possible to start these two components

immediately after the approval of the project. The schemes were adapted with the help of the D&S Consultant and by engaging the community through the Participatory and Partnership Approach (PPA) .

Time and Cost Over-run: There was a 150% increase in time and a 23% increase in overall cost compared to the original project cost and time due to inclusion of additional resources to rehabilitate the infrastructures damaged by Flood 2000, 2004, and 2007.

6. Remarks and Recommendations of the Project Director

The project has been completed successfully within the GOB approved time (June 2010) though the IDA credit is still alive (credit closing: June 2011). During implementation, the project received an excellent level of co-operation and support from both the World Bank and GOB entities like the Planning Commission, IMED, Finance Division, Local Government Division, and participating urban local governments.

Through the investment program, the municipalities received invaluable support to improve/rehabilitate their infrastructure, including services to the urban poor. Establishment of the BMDF introduced a new financing mechanism for municipal infrastructure. The technical assistance packages brought remarkable changes in municipal management in terms of computerization, skills enhancement, and logistical support. Many of the municipal staff, both engineering and non-engineering, received formal training from this project for the first time. The FDR programs were extremely helpful for the 204 municipalities (most of them are smaller and weaker) who could not rehabilitate the damage infrastructures without project support. The majority of the smaller municipalities received project support for the first time.

All of the above-mentioned activities were carried out well, and resulted in significant benefits as well as strong demand for additional support. Therefore, scaling up and replication of similar activities through new projects/programs are essential. To properly maintain the infrastructure developed through this project, it is critical for the municipalities to mobilize more local resources and for the central government to provide more support, particularly to the smaller and institutionally weaker municipalities.

7. Remarks and Comments of Agency Head

The MSP is one of the main World Bank-assisted projects in the urban sector that has been successfully completed within the approved time giving remarkable benefits to the selected municipalities and city-corporations as well as the city dwellers. In the context of continuing rapid urbanization, similar projects/programs need to be undertaken.

LGED: Additional Financing Cr. No. 4761 BD

1.1 Background

In view of the successes and significant benefits of the main MSP (Cr 3177, and 3177-1), and also considering the large unmet demands, there was a request from the GoB to the World Bank to provide financial support for another investment project MSP-II. In response to the request an additional financing (Cr. No. 4761) amounting to US$42.0 million was arranged by the World Bank to:

 Continue infrastructure building support through Bangladesh Municipal Development Fund (BMDF);  Continue capacity building support through Municipal Support Unit (MSU), created in LGED under MSP; and  Prepare a follow-on project.

Out of the total additional financing, US$37.9 million was allocated to BMDF to finance pre- apprised urban infrastructures. The remaining US$4.1 million was allocated to LGED to extend the ongoing municipal capacity strengthening program from 92 municipalities to 142 municipalities, and to prepare a follow-on project.

This report covers only the LGED part.

The government approved a separate Technical Assistance Project (TAP) for LGED portion (US$4.1 million) with a time period January 2011 to December 2012. Officially, the TAP is still ‘on-going’ as per the government’s Annual Development Program (ADP 2012-13), although the credit was closed on June 30, 2012. Because the TAP is on-going, the GOB’s official Project Completion Report (PCR) will be prepared after December 2012. However this report is to be considered as ‘final’ for the ICR Mission because there will not be any additional project activities after June 30, 2012.

1.2 Objectives

 Help the urban local governments in the field of institutional development and capacity building; and  Support the preparation of a follow-on project.

2. Expected Output

Capacity Building and Institutional Development  Computerization of tax records, accounts records and water billing in 50 more municipalities (in addition to present coverage – 92 municipalities);  Computerized inventory and mapping of municipal infrastructure in 50 more municipalities (in addition to present coverage – 92 municipalities);

 Improved institutional capacity and management reform in 50 more municipalities (in addition to present coverage – 92 municipalities) with expected increase in tax collections; and  Increased number of trained municipal staff (from 7,405 to 8,400)

3. Preparing a Follow-on Project

 Module A: An improved framework for selecting, designing, and implementing priority interventions for municipal development;  Module B: Infrastructure and institutional development programs for different types of urban development situations in a sample of about 20-25 municipalities; and  Module C: Detailed plans for infrastructure and institutional development subprojects in about 25 towns for initial implementation.

4. Progress

Capacity Building and Institutional Development activities (training + equipment + logistics) in 50 municipalities have been done as planned.

Allocation : $1.60 million USD Actual expenditure : $1.54 million USD

In preparing a follow-on project, it was initially planned that it will be carried out through three (3) separate modules. Later, in view of the limited time, ‘Module C’ was merged with ‘Module B’ in consultation with the World Bank. Accordingly, the scope of works of the new ‘Module B’ was revised.

Module A was delivered with three outputs: (a) ‘Analysis of Issues and Options’, (b) Advisory Notes to the Government, (c) Urban Development Program Guidelines. Module B was delivered with two outputs: (a) Municipal Development Plans for 25 towns, and (b) Sub-project Feasibility Reports of 25 towns for initial investment. The works of the two modules have been completed.

Module A:

Allocation : $0.30 million USD Actual expenditure : $0.29 million USD

Module B:

Allocation : $1.60 million USD Actual expenditure : $1.18 million USD

[Note: the expenditure was less than the allocation due to the reduced scope of work after merging Module B and C.]

Related to Incremental Operating Cost:

Allocation : $0.60 million USD Actual expenditure : $0.14 million USD

[The expenditure was less than the allocation because expenditures against some of the staff- positions in the MSU were borne by the Asian Development Bank.]

BMDF: Phase II Completion Report

1.1 Project Objectives

 Strengthen institutional and financial capacity of ULBs;  Improve resource allocation and fiscal discipline; and  Support government efforts to reduce urban poverty and conserve urban environment.

1.2 ULB Selection Criteria

 Availability of skilled engineers and accountants;  Rate of collection of tax is at least 65% at the minimum;  Initiative for preparation of Master Plan/ Detail Area Plan (DAP); and  Surplus revenue to be able to contribute its own share.

1.3 Eligible Sectors for Funding: roads, drains, sanitation, municipal solid waste management, office complexes, traffic management, water supply, bus and truck terminals, kitchen markets, children parks, community centers, and street lighting.

1.4 Project Development  The BMDF developed an assessment based on the demand for infrastructure improvements by the ULBs;  BMDF prepared the Preliminary Development Project Proforma (PDPP);  BMDF processed the PDPP through the World Bank and the Financial Institutions Division of the Ministry of Finance;  The World Bank and the Financial Institutions Division forwarded the PDPP to the Ministry of Planning for administrative approval;  Once the PDPP was approved by the Ministry of Planning, it was forwarded to the Economic Relations Division (ERD), which searched for donors;  ERD formally approved the PDPP and sought financial and technical assistance from development partners of the Government of Bangladesh (GOB);  Once the fund was assured, a formal agreement was signed between ERD (on behalf of GOB) and the respective development partner/donor;  A second formal agreement was signed between the World Bank, the Financial Institutions Division and BMDF;  The development partner/donor released fund according to the terms and conditions laid down in the agreement.

1.5 Sub-Project Development  The BMDF invited appraisal proposals from the ULBs for sub-projects. At the same time, it hired consultants through an open tender process;  BMDF reviewed and adjusted the appraisal reports;  Participating ULBs opened an escrow account with a scheduled bank and deposited 10% of the total sub-project costs as a matching contribution;

 The BMDF and each municipality made an agreement in a prescribed manner;  The ULB invited open tenders for a bid to work under Public Procurement Rules and World Bank guidelines;  The tender documents were examined and evaluated by ULB level committees;  If approved by the committee, the Bid Evaluation Report (BER) was forwarded to BMDF;  The World Bank and/or BMDF examined the BER to ensure compliance with all legal requirements;  If found acceptable, BMDF sent the bid documents back to the ULB to make a Contract Agreement with the Contractor performing the work;  Development work in the field was supervised by municipal engineers, with some assistance from hired consultants;  The contractors were paid on the recommendation of the consultants after satisfaction of the BMDF.

The Mayors of each ULB acted as Project Managers for all civil works in their area. They were responsible for maintaining all records of the project implementation process and anything related to financial matters. Supervision, quality control, bill checking, and recommendation for payment were carried out through outsourcing. BMDF officials visited the sites regularly to monitor the progress of work as per the schedule and specification.

1.6 Financing Policy: 85% of BMDF funding is grant-based whereas the remaining 15% is dispersed as loans. The financing policy of BMDF is unique in nature. The GOB receives loans from its development partners through a standard bilateral agreement in which the Economic Relations Division represents the GoB. Then BMDF goes for a subsequent agreement with the GoB, calling it Subsidiary Loan and Grant Agreement. BMDF reviews the appraisal reports of the ULBs and then allocates fund to the ULBs while taking into consideration the amount of grant and the demand of the ULB. The sub-project packages constitute a blend of grants (76.5%), loans (13.5%), and the municipality's own contribution (10.0%) for any infrastructural project.

In order to start a project, 10% of the project cost has to be deposited as a matching contribution with an escrow account, which is to be operated by the recipient ULB. BMDF bears the remaining 90% of the project cost. Of this 90%, 85% is given as a grant and 15% is given as a loan to the ULB. BMDF transfers money to the escrow account against the bill(s) of work submitted by the recipient ULB for payment to the contractors. The recipient ULB is committed to repaying the loan in 37 installments with a one-year grace period, thereby paying off the entire loan in 10 years. The repayment of ULBs to BMDF is satisfactory.

2.1 Implementation

BMDF successfully completed 454 and 141 sub-projects under IDA credit Nos. 3177-BD and 4761-BD, respectively, with allocations of US$63 million and US$40 million, respectively. The combined loan total of US$103 million covered 595 sub-projects in 154 ULBs, including seven City Corporations. The BMDF also completed a study on municipal solid waste management in four cities.

BMDF took advantage of an unexpected change in the conversion rate when the US$1 rose from BDT 69 (2010) to BDT (Bangladeshi Taka) 79.95 (2012), the year of receiving the allocation under Cr. No 4761-BD by immediately implementing 17 subprojects with the money saved.

100% works under Cr. No. 3177-BD were completed but a portion of the Lama Water Treatment Plant was carried over to, and completed under, Cr. No 4761-BD. Of the US$63 million allotted under Cr. No 3177-BD, only about US$61.25 million was disbursed. Of the US$38.5 million allotted under Cr. No 4761-BD, roughly US$38.25 million was disbursed.

Financial and Operational Action Plans (FOAPs) were prepared for 154 ULBs, for improving their financial and operational management.

The following table describes the output of the work carried out through the BMDF.

Component-wise volume of work: Sl. Component ULBs Unit Quantity 1 Roads 141 Km 1,128 2 Drains 103 Km 260 3 Kitchen Markets 59 Each 211 Water Supply 4 24 Km 173 Pipelines 5 Deep Tube Wells 16 Each 36 Water Treatment 6 2 Each 2 Plants 7 Public Toilets 36 Each 87 8 Box Culverts 13 Each 32 9 Street Lights 24 Set 24,960 10 Bus/Truck Terminals 9 Each 9 11 Community Centers 14 Each 15 12 Slaughter Houses 6 Each 8 Office Complex 13 7 Each 7 Buildings

2.2 Operational Experience

The ULBs required technical staff to help implement subprojects under the BMDF. Those with previous experience working on BMDF projects were very effective because they understood the standard required by BMDF for implementing projects under a World Bank credit. Unfortunately, not all ULBs had technical staff with previous experience with BMDF. Thus, BMDF tried to improve awareness of the BMDF standard by training field engineers during the initial stage of project implementation.

A training module was developed and supplemented by lectures by professionals in the respective fields, including World Bank experts. The training substantially improved the understanding of the field engineers.

The LGED also facilitated training for ULB accountants and finance officers to ensure that the fund dispersals were in accordance to financial guidelines. The training module was based on the requirements in the Financial and Operational Action Plan (FOAP), which was part of the agreement between the BMDF and ULBs. The LGED shared knowledge with the BDF to improve the design of the training module. The training helped the ULB account offices deal with financial matters as required by IDA.

The process of hiring consultants also resulted in setbacks to the project. In some cases, consulting firms paid consultants only half of what had been originally advertised, usually because the consultants were unqualified. Given the short project cycles of subprojects, it did not make sense to fire and hire new consultants so agencies dealt with inadequately qualified consultants. The problem was further exacerbated when several field level consultants left during the final phases, leaving no time to fill these vacant positions. The team leader’s lack of experience resulted in inadequate team management, ultimately leading to sub-par implementation of the project.

In most cases, the quality of work could not be checked in time due to dependency on other departments’ (e.g. LGED, university) quality control laboratories. A smaller quality control laboratory at the BMDF office and the City Corporation offices could have significantly streamlined this process.

Implementation Experience

BMDF provided training to ULB and municipal engineers. Appointment of Senior Municipal Engineers, Municipal Engineers and Junior Municipal Engineers was done in consultation with the Consulting Firm. The country was divided into two zones and different sub-zones for convenience of proper supervision. There were 2 zones and 10 sub-zones during the project under Cr. No. 4761-BD.

Senior structural engineers of the M&S Consultants were authorized to make changes to the design when deemed necessary. The changes were then to be approved by BMDF. World Bank funding disbursement was delayed due to a delay in the signing of the Subsidiary Grant and Loan Agreement between the World Bank and Financial Institutions Division.

The price of construction material was suddenly increased by an abnormal amount from August 2011 to January 2012. This increase in price delayed the completion of work.

2.3 Assessment of Outcomes

Improved institutional capacity. The Municipal Support Unit (MSU) of the LGED was responsible for building the institutional capacity of the ULBs. A substantial amount of IDA funds was allocated to MSU to conduct training programs for the municipal staff. MSU organized training programs on procurement procedures, civil works quality control, and accounts management for ULB engineers and accountants. In addition, BMDF organized training programs on preparation of tender documents, tender evaluation reports, contract agreements, implementation procedures, quality control, billing system, implementation of social impact management framework (SIMF), environmental impact monitoring format (EIMF), and 95 procurement risk mitigation framework (PRMF) for ULB officials and mayors directly involved in subproject preparation and implementation. These training programs improved the institutional capacity of the ULBs.

Improved resource allocation. BMDF allocated US$103 million to 154 ULBs under two credits. Seven City Corporations, 78 A-class, 49 B-class and 29 C-class municipalities participated in the program. Depending on its class and size, each municipality usually received BDT 0.80 million to 0.40 million from the government under the Annual Development Program (ADP) for infrastructure development. This was inadequate for necessary infrastructure improvement. The BMDF compensated for these gaps by providing additional financial and technical support. In a single fiscal year, the BMDF provided BDT 10 million to 20 million under the IDA credits.

Reduction of urban poverty. A study by the Development Support Link (DSL) found that, as a result of the infrastructural improvements, participating municipalities experienced increases in trade and business, employment, and land values; improved transportation; and improved public health due to safer drinking water, installation of sanitary public toilets, hygienic vegetable markets and slaughter houses and proper waste water drainage. The combination of the resulting economic growth and the improved municipal service delivery enabled the ULBs to successfully raise holding and property taxes, thereby increasing municipal income. This allowed ULBs to successfully make loan payments and helped to ensure their eventual financial independence.

3. Evaluation

Evaluation of ULB performance: Several ULBs were unable to meet the requirement of standard design and preparation of the Draft Bidding Document because they lacked the necessary technical capacity. As a result, BMDF had to modify many elements at the time of implementation. Had there been Appraisal Consultants these documents could have been prepared on time.

Evaluation of World Bank performance: The World Bank ensured timely execution of the subprojects. World Bank personnel met BMDF senior officials nearly every month to ensure that the sub-projects were being implemented on time. They also helped maintained consistent oversight to guarantee transparent implementation, free from corruption, and effectively dealt with any problems that arose.

We had some concern over slow-decision making from the World-Bank counterparts. At the start of the project, one visiting mission advised BMDF to drop 17 sub-projects on apprehension that they would not be completed on time. The BMDF reviewed the project plans and found that it would be possible to complete the sub-projects on time. Although it immediately submitted this finding to the World Bank, the Bank took roughly one month to re-approve these projects. Unfortunately, the sub-projects became costlier for the BMDF over the 30-day lag due to a number of reasons (e.g. change in conversion rates, increase in construction materials).

4. Lessons Learned

1. The window for procurement procedure and implementation of project was only 15 months. Twenty months would have been a more appropriate window for a project with so many sub- components. 2. Sudden price escalation of construction materials and man-power (e.g. bitumen, Mild Steel Rod, stone chips, sand, bricks and labor) hindered project implementation. Any logical enhancement of contract price against any abnormal rise of price of construction materials with no fault of the contractor could help ensure smooth completion of project. 3. The time required for sub-project preparation and procurement (i.e. signing the sub-project appraisal report, time for tendering, bid evaluation and award to contracts) was insufficient. Some ULBs failed to complete the total procurement process within this timeframe and the BMDF took extra time to correct some of the documents. Eight months for preparation and procurement, with an additional 12 months for project implementation, is required. 4. BMDF used money saved from the conversion rate to successfully implement 17 sub- projects within 90 days. BMDF could have 15% additional sub-projects ready at hand to quickly implement in similar situations in which sub-project funding suddenly becomes available. 5. The consultants managed and supervised the civil works whereas the ULBs oversaw the design. This system of splitting up the management, design and supervision often created communication gaps and ultimately slowed down project execution. Some sub-projects were undertaken without pre-work survey. Consultants could be appointed before receiving the Sub-project Appraisal Report (SPAR) so that they can examine sub-projects at the initial stages. 6. Implementation guidelines were not flexible and sometimes found to be irrelevant with time. Guidelines for implementation should be updated along with new project. 7. There was not enough technical support throughout the project. There were only 12 municipal engineers available for monitoring and supervising 141 sub-projects in 65 ULBs over a time span of 15 months. Sufficient technical staff should be appointed at the beginning. 8. Designing project components was challenging because many ULBs lacked engineers with design capacity. BMDF had to hire a design consultant, in addition to M&S Consultants, for proper implementation of the projects. This kind of requirement could be taken care of at the initial stage to save time and ensure better performance. 9. Appointment of consultants was delayed, thereby resulting in delays in management and supervision. Timely hiring of consultants could overcome this inconvenience. 10. Changes in the conversion rate from USD to BTD should be considered at project planning stage. 11. The price of construction materials was high during the implementation period, thereby increasing the cost of implementation. Many contractors faced complications due to price escalation.

5. Future Operation of the Project

The BMDF prepared a Preliminary Development Project Proforma (PDPP) for carrying out development activities of the ULBs in Bangladesh. The projects are designed to address a broad range of issues in development, such as municipal income generation, solid waste management, solar streetlight, infrastructure maintenance, and digitalization of ULBs, etc. The Government of Bangladesh approved the project proposals and donors are being searched for financial assistance. These projects are expected to improve to the overall living condition of the urban people and strengthen the capacity of ULBs for reducing urban poverty.

BMDF is planning to expand its operation to effectively deal with the challenge of urban poverty, climate change, environmental degradation, scarcity of electricity, and inadequate municipal solid waste management, among other issues. BMDF is developing project pro-forma in different fields such as physical infrastructure development, maintenance of existing infrastructure, urban solid waste management, solar energy, digitalization, capacity building of ULBs, environmental preservation, urban health care, and water supply and sanitation.

A shortage of municipal technical staff, performance of consultants, and depending on material tests on other agencies led us to recommend the following:  The Local Government Division of the GOB should hire an adequate number of ULB engineers so that they will not need to transfer any during implementation of work under IDA credit.  Borrower could be allowed to hire consultant on an individual basis following World Bank guidelines.  The ULBs located at the divisional headquarters could be provided with mini laboratory to facilitate carrying out basic tests of the civil works done within the jurisdiction.  The scope of monitoring of the IDA funded project through proper maintenance should be incorporated in the new project design.

Annex 7. List of Supporting Documents

1. Project Appraisal Document (February 3, 1999) 2. Development Credit Agreement between People’s Republic of Bangladesh and International Development Association, April 26, 1999 3. Bangladesh Municipal Development Fund (BMDF) Operational Manual, February 2001 4. Peterson, George. Bangladesh Municipal Development Fund, the Urban Institute, October 2002 5. Bangladesh Municipal Services Project (Cr. 3177-BD): Extension of Credit Closing Date (extension to June 30, 2008) 6. Municipal Services Project Credit 3177-BD: Amendment to the Development Credit Agreement, March 1, 2004. 7. Municipal Services Project (Credit 3177-BD): Amendments to the Development Credit Agreement to Finance Flood Emergency Rehabilitation Works, March 29, 2005. 8. Supervision Mission Reports (Aide Memoires, Implementation Status Reports) 9. World Bank. Bangladesh Country Assistance Strategy (1998) 10. Project Paper for an Emergency 2007 Flood Restoration and Recovery Assistance Program, December 21, 2007 11. Project Paper on a Proposed Additional Credit in the Amount of SDR 27.8 million (US$42 million equivalent) for a Municipal Services Project, May 26, 2010) 12. Additional Financing for Municipal Services Project Agreed Minutes of Negotiations, May 24, 2010) 13. Bangladesh Municipal Services – Quality at Entry (Draft Assessment, November 16, 1999) 14. LGED. Survey Findings on Municipal Capacity Building Program, May 2012 15. Development Support Link (DSL). Impact Evaluation of Six Project Municipalities Financed by Bangladesh Municipal Development Fund (BMDF), July 2007.

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MARCH 2008