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Report and Recommendation of the President to the Board of Directors

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Report and Recommendation of the President to the Board of Directors Report and Recommendation of the President to the Board of Directors Bangladesh Project Number: 34418 October 2005 Proposed Loan Bangladesh: Southwest Area Integrated Water Resources Planning and Management Project CURRENCY EQUIVALENTS (as of 20 October 2005) Currency Unit – taka (Tk) Tk1.00 = $0.0153 $1.00 = Tk65.23 ABREVIATIONS ADB – Asian Development Bank AP – affected person BWDB – Bangladesh Water Development Board CAG – comptroller and auditor general CBO – community-based organizer CDP – capacity development plan CIDA – Canadian International Development Agency CSP – country strategy and program DAE – Department of Agriculture Extension DG – director general DOC – Department of Cooperatives DOF – Department of Fisheries EIA – environmental impact assessment EIRR – economic internal rate of return FAP – Flood Action Plan FCD/I – flood control and drainage/irrigation GAP – gender action plan GDP – gross domestic product GRC – grievance redress committee GPWM – Guidelines for Participatory Water Management ICB – international competitive bidding IEE – initial environmental examination ISPMS – institutional strengthening and project management support IWMP – integrated water management plan IWRM – integrated water resources management JMC – joint management committee LCB – local competitive bidding LCS – labor contracting society LGED – Local Government Engineering Department LGI – local government institution M&E – monitoring and evaluation MIS – management information system MOU – memorandum of understanding MOWR – Ministry of Water Resources MTR – midterm review NGO – nongovernment organization NWMP – National Water Management Plan NWP – National Water Policy O&M – operation and maintenance PBMS – performance-based budget management system PCO – project coordination office PD – project director PMO – project management office PPR – Public Procurement Regulation PPTA – project preparatory technical assistance PRSP – Poverty Reduction Strategy Paper PSC – project steering committee RF – resettlement framework RP – resettlement plan SASC – subproject appraisal subcommittee SIP – subunit implementation plan SMO – subproject management office SOE – statement of expenditure TL – team leader TM – twinning mission WARPO – Water Resources Planning Organization WMA – water management association WMG – water management group WMIP – Water Management Improvement Project NOTES (i) The fiscal year (FY) of the Government ends on 30 June. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2005 ends on 30 June 2005. (ii) In this report, "$" refers to US dollars. Vice President L. Jin, VPO1 Director General K. Senga, South Asia Department Director F. Roche, Agriculture, Environment and Natural Resources Division, South Asia Department Team Leader K. Yokoyama, Senior Water Resources Specialist, Agriculture, Enviroment and Natural Resources Division Team Members F. Sultana Begum, Social Development and Gender Officer, Bangladesh Resident Mission J. Francis, NGO/Civil Society Specialist, NGO and Civil Society Center, Regional and Sustainable Development Department S. Kawazu, Counsel, Office of the General Counsel S. Ranawana, Environment Specialist, SAAE A. Saha, Project Implementation Officer (Agriculture), Bangladesh Resident Mission J. Zhang, Project Economist, Agriculture, En vironment, and Natural Resources Division, South Asia Department CONTENTS Page LOAN AND PROJECT SUMMARY iii MAPs ix I. THE PROPOSAL 1 II. RATIONALE: SECTOR PERFORMANCE, PROBLEMS, AND OPPORTUNITIES 1 A. Performance Indicators and Analysis 1 B. Analysis of Key Problems and Opportunities 2 III. THE PROPOSED PROJECT 5 A. Impact and Outcome 5 B. Outputs 6 C. Special Features 9 D. Cost Estimates 10 E. Financing Plan 10 F. Implementation Arrangements 11 IV. PROJECT BENEFITS, IMPACTS, ASSUMPTIONS, AND RISKS 15 A. Economic Impacts 15 B. Household and Poverty Reduction Impacts 16 C. Social and Gender Development Strategy 16 D. Environmental Impacts 17 E. Resettlement 18 F. Risks 18 V. ASSURANCES 19 A. Specific Assurances 19 B. Conditions for Loan Effectiveness 20 C. Conditions for Withdrawal from the Loan Account 20 VI. RECOMMENDATION 20 APPENDIXES 1. Design and Monitoring Framework 21 2. Water Resources Sector Analysis 25 3. External Assistance to Water Resources Management 30 4. Incorporation of Lessons Learned 31 5. Policy and Institutional Actions 33 6. Cost Estimates and Financing Plan 35 7. Organizational Structure 37 8. Selection Criteria for Additional Subprojects, and Preparation and Implementation of Integrated Water Management Plans 38 9. Project Implementation Procedure 40 10. Implementation Schedule 42 11. Indicative Contract Packages 43 12. Outline Terms of Reference for Consultants 44 13. Summary Economic and Financial Analysis 48 14. Summary Poverty Reduction and Social Strategy 53 15. Gender Action Plan 56 16. Summary Resettlement Framework and Resettlement Plans 57 SUPPLEMENTARY APPENDIXES (available on request) A. Chronology of Project Development and Processing B. Detailed Project Cost Estimate and Financing Plan C. List of Candidate Schemes D. Implementation Procedures and Arrangements E. Terms of Reference of Consulting Services F. Terms of Reference of NGO Services G. Economic and Financial Analyses H. Financial Management Questionnaire I. Environmental Impact Assessment J. Summary Environmental Impact Assessment K. Environmental Impact Assessment L. Resettlement Framework M. Resettlement Plans (Two Sample Projects) {Please read and delete: (i) Provide this template to all involved in preparing the report. (ii) Use this format for all project loans. (iii) Limit the overall length of the RRP to 60 pages or less, single-spaced—20 pages maximum for the main text and 40 pages for appendixes. (iv) Where possible limit each appendix to about 5 pages. Appendix subjects may include (a) Design and Monitoring Framework (mandatory) (b) Chronology (maximum 1 page) (c) Problem and Constraints Analysis (d) Sector/ Analysis (mandatory) (e) External Assistance (mandatory) (f) Cost Estimates and Financing Plan (mandatory) (g) Contract Packages (mandatory) (h) Implementation Schedule (mandatory) (i) Financial Performance and Projections (of public incorporated companies and other entities) (j) Financial Analysis (k) Economic Analysis (l) Environmental Analysis (m) Summary Poverty Reduction and Social Strategy (mandatory, include completed form from Handbook on Poverty and Social Analysis, p. 27.) ADF IX LOAN AND PROJECT SUMMARY Borrower The People’s Republic of Bangladesh Classification Targeting classification: Targeted intervention Sector: Agriculture and natural resources Subsector: Water resources management Themes: Sustainable economic growth, governance, gender and development Subthemes: Developing rural areas, public governance, gender equity in opportunities Environment Category A: An environmental impact assessment was Assessment undertaken and was submitted by the Government with its summary, which was circulated to the Board on 14 July 2005. Project Description The Project will enhance the livelihood of the rural population by improving the productivity and sustainability of existing under- performing flood control and drainage/irrigation (FCD/I) schemes through holistic and participatory planning, development, and management of water, and delivery of support services to address locally identified constraints on agriculture, fishery, and livelihood development. During the process, the Project will set up and strengthen, up-front at the preconstruction stage, viable water management associations (WMAs), which will take on key roles in all program delivery decisions and sustainable operation and maintenance (O&M) of local water infrastructure, while installing institutional capacities within the supporting agencies to manage the overall process, including O&M of main water infrastructure. The Project will cover 100,000 hectares (ha) of FCD/I schemes in the southwest areas and benefit about 0.8 million rural population, the majority of whom are poor. The project process and management will demonstrate the way to substantially enhance and sustain the performance of existing FCD/I schemes by developing WMAs with representation from diverse stakeholders, particularly the poor, and providing them with agriculture and fishery support services. The Project will also support ongoing sector-wide institutional reforms toward good governance, in harmony with other sector interventions assisted by external funding agencies. Rationale Water fundamentally affects rural livelihood activities in Bangladesh, with the country’s major regional river systems bringing about massive annual floods, severe dry-season water scarcity, and periodic natural disasters. Effective management of water is critical to address pervasive rural poverty problems. The task is complicated due to fairly diverse and complex stakeholder interests and vulnerable natural ecosystems. It is thus paramount to plan, develop, and manage water resources in a strategic and integrated manner while mobilizing and empowering diverse stakeholders. While the country has established a large number of iv FCD/I infrastructures, their performance remains suboptimal due to lack of effective management systems that can meet the needs of diverse stakeholders particularly the vulnerable poor, and most critically, provide sufficient O&M. Within the country, the southwest areas face the most acute problems due to reduced dry-season inflow and associated social and environmental hardships,
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