Completion Report Project Number: 40515-013 Loan Number: 2696 March 2020 Bangladesh: Sustainable Rural Infrastructure Improvement Project This document is being disclosed to the public in accordance with ADB's Access to Information Policy. Currency Equivalents Currency unit – taka (Tk) At Appraisal At Project Completion 8 October 2010 30 June 2017 Tk1.00 = $0.0142 $0.0124 $1.00 = Tk70.47 Tk80.83 ABBREVIATIONS ADB – Asian Development Bank BME – benefit monitoring and evaluation D&S – design and supervision DMF – Design and monitoring framework EIRR – economic internal rate of return GAP – gender action plan GCM – growth center market IEE – initial environmental examination ISM – institutional support and monitoring LCS – Labor Contracting Society LGED – Local Government Engineering Department PMO – project management office NOTE{S} (i) The fiscal year (FY) of the Government of Bangladesh and its agencies ends on 30 June. “FY” before a calendar year denotes the year in which the fiscal year ends, e.g., FY2018 ends on 30 June 2018. (ii) In this report, “$” refers to United States dollars. Vice-President Shixin Chen, Operation 1 Officer-in-Charge Diwesh Sharan, South Asia Department (SARD) Director Manmohan Parkash, Bangladesh Resident Mission (BRM), SARD Team leaders Soon Chan Hong, Senior Economist, BRM, SARD Md. Humayun Kabir, Procurement Officer, BRM, SARD Team members Kazi Akhmila, Associate Safeguards Officer (Resettlement), BRM, SARD Farhat Jahan Chowdhury, Senior Project Officer (Environment), BRM, SARD Nusrat Chowdhury, Associate Project Analyst, BRM, SARD Minhajur Rahman Khan, Associate Safeguards Analyst, BRM, SARD Nasheeba Selim, Senior Social Development Officer (Gender), BRM, SARD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. Contents Page BASIC DATA i I. PROJECT DESCRIPTION 1 II. DESIGN AND IMPLEMENTATION 1 A. Project Design and Formulation 1 B. Project Outputs 2 C. Project Costs and Financing 3 D. Disbursements 4 E. Project Schedule 4 F. Implementation Arrangements 4 G. Technical Assistance 5 H. Consultant Recruitment and Procurement 5 I. Gender Equity 6 J. Safeguards 6 K. Monitoring and Reporting 7 III. EVALUATION OF PERFORMANCE 8 A. Relevance 8 B. Effectiveness 8 C. Efficiency 9 D. Sustainability 10 E. Development Impact 11 F. Performance of the Borrower and the Executing Agency 12 G. Performance of Cofinanciers 12 H. Performance of the Asian Development Bank 13 I. Overall Assessment 13 IV. ISSUES, LESSONS, AND RECOMMENDATIONS 13 A. Issues 13 B. Lessons 14 C. Recommendations 14 APPENDIXES 1. Design and Monitoring Framework 16 2. Project Cost at Appraisal and Actual 18 3. Project Cost by Financier 19 4. Disbursement of ADB Loan and Grant Proceeds 21 5. Technical Assistance Completion Report 22 6. Contract Awards of ADB Loan and Grant Proceeds 31 7. Environmental Safeguards Measures 32 8. Land Acquisition and Resettlement Impact 34 9. Status of Compliance with Loan Covenants 35 10. Implementation of Gender Action Plan and Achievements 40 11. Economic Reevaluation 57 Basic Data A. Loan Identification 1. Country Bangladesh 2. Loan number and financing source 2696-BAN(SF) 3. Project title Sustainable Rural Infrastructure Improvement Project 4. Borrower People’s Republic of Bangladesh 5. Executing agency Local Government Engineering Department 6. Amount of loan SDR38,271,000 B. Loan Data 1. Appraisal – Date started 26 July 2010 – Date completed 10 August 2010 2. Loan negotiations – Date started 11 October 2010 – Date completed 12 October 2010 3. Date of Board approval 11 November 2010 4. Date of loan agreement 11 April 2011 5. Date of loan effectiveness – In loan agreement 10 May 2011 – Actual 10 May 2011 – Number of extensions 0 6. Project completion date – Appraisal 30 June 2016 – Actual 30 June 2017 7. Loan closing date – In loan agreement 31 December 2016 – Actual 31 December 2017 – Number of extensions 1 8. Financial closing date – Actual 24 September 2018 9. Terms of loan – Interest rate 1% per annum during the grace period, thereafter 1.5% per annum – Maturity (number of years) 32 – Grace period (number of years) 8 years ii 10. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 13 December 2011 23 February 2018 84.46 months Effective Date Actual Closing Date Time Interval 10 May 2011 31 December 2017 80.9 months b. Amount ($ million) Increased Canceled Last Original during during Revised Amount Undisbursed Allocation Implementation Implementation Allocation Disbursed Balance Category (1) (2) (3) (4=1+2–3) (5) (6 = 4–5) Civil Works 44.43 1.67 0.00 46.11 46.11 0.00 Equipment 0.55 0.00 0.12 0.43 0.43 0.00 Equipment 0.39 0.00 0.01 0.37 0.37 0.00 Maintenance Capacity 0.39 1.17 0.00 1.50 1.50 0.00 Development D&S 3.47 0.00 0.47 3.00 3.00 0.00 Consultants ISM 0.86 0.00 0.16 0.70 0.70 0.00 Consultants Interest 1.64 0.00 0.21 1.42 1.42 0.00 Charges Unallocated 8.28 0.00 8.28 0.00 0.00 0.00 Total 60.00 2.79 9.25 53.54 53.54 0.00 C. Project Data 1. Project cost ($ million) Cost Appraisal Estimate Actual Foreign exchange cost 6.94 2.96 Local currency cost 101.47 134.19 Total 108.41 137.15 2. Financing plan ($ million) Cost Appraisal Estimate Actual Implementation cost Borrower financed 32.51 66.62 ADB financed 60.00 52.12 Other external financing 15.90 16.99 Total implementation cost 108.41 135.73 Interest during construction costs Borrower financed ADB financed 1.63 1.42 Other external financing Total interest during construction cost 1.63 1.42 iii 3. Cost breakdown by project component ($ million) Component Appraisal Estimate Actual Civil Works 44.43 46.11 Mechanical and Equipment 0.55 0.44 Design Supervision Consultant 3.47 3.00 Institutional Support and Monitoring Consultant 0.86 0.71 Capacity Development 0.39 1.50 Salaries 0.00 0.00 Equipment Operation and Maintenance 0.39 0.37 Financial Charges 1.64 1.42 Unallocated 8.28 0.00 Total 60.00 53.54 4. Project schedule Item Appraisal Estimate Actual Date of contract with consultants Design and Supervision Consultant January 2011 26 June 2012 Institutional Support and Monitoring Consultant January 2011 26 June 2012 Civil works contract Date of award July 2011 July 2012-Dec 2016 Completion of work December 2015 Nov 2013-Dec 2017 Equipment and supplies Dates First procurement January 2011 June 2012 Last procurement June 2016 December 2015 5. Project performance report ratings Ratings Implementation Period {Development Objectives} {Implementation Progress} From 1 May 2011 to 31 December 2011 Satisfactory Satisfactory From 1 January 2012 to 31 December 2012 Satisfactory Satisfactory From 1 January 2013 to 31 December 2013 On Track From 1 January 2014 to 31 December 2014 On Track From 1 January 2015 to 31 December 2015 On Track From 1 January 2016 to 31 December 2016 On Track From 1 January 2017 to 31 December 2017 On Track D. Data on Asian Development Bank Missions No. of No. of Specialization Name of Mission Date Persons Person-Days of Members Fact-finding 26 July–10 August 2010 7 98 a,b,c,d,e,f Review 1 20 Feb-15 Mar 2013 4 100 d,e,g,h Review 2 26 Jan-10 Feb 2014 3 42 d,f,j Review 3 (MTR) 20 Nov-10 Dec 2014 3 60 d,e,i Review 4 6 -24 Aug 2017 4 72 d,k,l,m Note: a = natural resources economist, b = director’s advisor, c = counsel, d = sr. project/project implementation officer e = social development and gender officer, f = economist, g = consultant, h = project analyst, i = economic officer, j = gender specialist, k = associate project analyst, l = associate project officer (safeguards), m = operation assistant I. PROJECT DESCRIPTION 1. Better rural infrastructure fosters the balanced development of rural economies through mutually reinforcing growth in the farm and non-farm sectors. Enhancing the rural poor’s mobility, through rural road development, allows them to avail of health, education, and nongovernment services, as well as a wide range of economic opportunities. Rural road investments can cut poverty significantly through increased agricultural production, higher wages, lower input and transportation costs, better educational attainment, and higher output prices. Despite improvements in rural infrastructure in Bangladesh, the share of the rural population with access to all-weather roads, and paved rural roads was lower than that of other South Asian countries at the time of project appraisal. Only 37% of the rural population had access to all-weather roads, compared with 60% in India and 61% in Pakistan. In South Asia, 57% of road networks were paved, while only 25% were paved in Bangladesh. The main problems in fostering rural road connectivity were (i) rapidly growing demand for road transport; (ii) lack of funds to develop infrastructure; (iii) lack of enforcement of government policies and regulations on road safety; (iv) inadequate maintenance funding; and (v) lack of technical skills and capacity building of local government institutions.1 2. To help realize the full growth potential of rural areas, ADB approved a loan of $60 million to Bangladesh from Special Funds resources on 11 November 2010 for the Sustainable Rural Infrastructure Improvement Project (footnote 1). A project preparatory technical assistance (TA) for $500,000 prepared a detailed feasibility study of the project, based on the initial feasibility study prepared by the executing agency.2 In addition, KfW cofinanced the project through a grant of €13 million equivalent.