Part 3: Appendix I Project Costs and Benefits Analysis Banladesh Delta Plan 2100 297 298 General Economics Division Appendix I : Project Cost and Benefit Analysis161 I.1 Introduction The Government of Bangladesh has initiated the Bangladesh Delta Plan 2100 (Delta Plan or BDP2100) to define a long-term vision for Bangladesh’s development. The Delta Plan links Bangladesh’s medium-term goal to become an upper middle income country with its long-term goals to manage water, ecology, environment, and land resources sustainably. Given its deep experience with managing delta issues, the Government of the Netherlands is providing technical assistance to the Government of Bangladesh for the formulation of the Delta Plan. The General Economics Division (GED) of the Planning Commission is coordinating consultant inputs from BanDuDeltAS (Team A) and Policy Research Institute (Team B) to develop the Delta Plan. Both teams have now submitted Zero Draft Delta Plans, which are being reviewed by GED. To support implementation of the Delta Plan, the World Bank Group (WBG)162 is assisting GED with the formulation of a BDP2100 Investment Plan. The Investment Plan will include relevant projects for implementation through 2030. Because Bangladesh is one of the most economically dynamic and climate change vulnerable countries in the world, any proposed investments must be planned in a fully adaptive way to ensure successful implementation and sustainability. The Investment Plan does this by applying the principles of adaptive delta management (ADM) to develop a credible, implementable, and sustainable Investment Plan to support the Delta Plan. The purpose of this report is to assess BDP2100 priority projects for eventual inclusion in the Investment Plan. Team A has prepared Project Concept Notes (PCNs) for over 100 projects for consideration for the Investment Plan. These PCNs have varying levels of detail, from detailed project concepts to initial project ideas. GED has provided 34 of these PCNs to the WBG Investment Plan team to consider for the Investment Plan. Of these 34 projects (detailed in Section I.7), the Team was able to obtain enough detailed information for 26 projects for a full project assessment to determine suitability for inclusion in the Investment Plan. The other eight projects do not yet have sufficient information to be properly assessed. GED rejected a further two projects for inclusion because they are already in advanced stages of consideration for implementation, and the Investment Plan team identified another three projects that had already secured funding. GED also combined two pairs of related projects. This resulted in a total of 19 projects to be considered for detailed assessment. The results of this project assessment will be used to develop the Investment Plan. The report is structured as follows: • Section I.2: describes the assessment process and criteria. The Investment Plan team considered various aspects of each project, including costs and benefits and feasibility study results. • Section I.3: summarizes the project cost benefit analyses and describes the methodological issues. 161 This Project Costs and Benefits Analysis report was developed as one of the early stages of the Investment Plan formulation pro- cess. It only covers projects for which there was sufficient information available. 162 In collaboration with the 2030 Water Resources Group Banladesh Delta Plan 2100 299 • Section I.4: presents the Investment Plan team’s overall observations of the group of projects. The full list of projects received (Batches 1-3) is given in I.7. We have since received a fourth batch of initial project ideas on 24 September 2016 for consideration in the Investment Plan. These additional preliminary project ideas are given in I.8. The Batch 4 concepts will be analyzed as part of the Investment Plan. • Section I.4: suggests how projects could be prioritized in the Investment Plan and demonstrates how the prioritization approach works with the current batch of projects. • Section I.6: presents the detailed assessments for each project. Although these assessments are based to a significant extent on information in the BDP2100 PCNs, the Investment Plan team has conducted considerable additional research and consultations where feasible to supplement the information in the PCNs. A record of the additional research and consultations is provided in I.10. 300 General Economics Division I.2 Project Assessment Process The projects were screened in two phases. Here we describe the analytical process for the initial assessment, detailed assessment, and the project prioritization framework. Overall observations from the analysis are given in Section I.3 and Section I.4. Detailed project assessments are included in Section I.6. I.2.1 Initial Assessment For each project, we compiled as much background information as possible to supplement the information in the PCN. We also consulted with relevant stakeholders within each Ministry and Department. Based on this information, we conducted an initial assessment of each project’s state of readiness, development history, consistency with Government plans, linkages to climate change adaptation, and suitability for private sector participation. First, we examined the information available, such as feasibility studies, environmental and social impact assessments, cost benefit studies, and development project proformas (DPPs) or preliminary development project proformas (PDPPs). The amount of information available, and when studies were completed or updated, is an indication of the project’s state of readiness. Where information is outdated or studies have not yet been carried out, we have noted these needs. Next, we did a high-level check of whether each project is consistent with the Government of Bangladesh’s stated objectives. These objectives were derived from laws, policies, and plans such as the Seventh Five-Year Plan (FYP). I.7 lists all the documents that we reviewed as part of this assessment. We also assessed whether each project is in line with BDP2100 goals. We noted the history of the project’s development, such as which agency first proposed the project, and any delays with the project proposal. Finally, we conducted an initial assessment of whether the project is linked to climate change adaptation measures, and whether this type of project has a track record of private sector participation internationally. I.2.2 Detailed Assessment From 130 project proposals received, 26 have sufficient information to be considered “detailed” PCNs. Detailed project assessments were conducted for each of these projects. In addition to the information from the initial assessment, the detailed assessment includes: • A brief description of the project history • Problems and challenges that the project aims to address • An assessment of the project costs and benefits • A technical assessment • Linkages to existing policies and initiatives • Linkages to other projects, ongoing or planned • An assessment of the application of ADM principles • Linkages to climate change adaptation issues • Assessment of private sector financing potential • Assessment of the policy and institutional reforms required for successful implementation. Banladesh Delta Plan 2100 301 We analyzed each of the above areas by reviewing the PCNs, reading all supporting documents wherever available, and having conversations with line agencies responsible for developing and implementing these projects and with other experts as appropriate. I.10 details the research and consultations we conducted. Below, we explain what we analyzed in each of the areas identified above. Brief description of the project history For each project, we describe how the project idea was first conceived, and which agency or agencies first proposed the project. We describe how the project was developed, including any feasibility or environmental and social impact assessments conducted. Problems and challenges the project aims to address This describes the specific issues that each project is designed to address. We draw linkages to any relevant BDP2100 goals and issues. Economic costs and benefits We summarize the available information on capital costs and operating and maintenance costs. We assess whether these cost estimates seem reasonable. We also assess the benefits assumed for these projects and identify areas for improvement. We note where information is outdated, and where additional studies are needed to provide more accurate cost and benefit information. This section also considers potential environmental and social costs and benefits drawn from environmental and social impact assessments and cost-benefit analyses. Where applicable, we note if studies need to be carried out or updated, and suggest methods to address methodological flaws. Linkages to existing policies and initiatives Government ownership and alignment with Government policies and initiatives is an important requirement for any project to be included in the Investment Plant. We evaluated each project’s linkages to the Seventh Five-Year Plan and other sectoral plans, policies, and regulations, including ones related to climate change. We also analyzed alignment with BDP2100 goals and objectives. Technical assessment This section describes the technical layout of the project as far as information is available. It assesses the technical feasibility of the project. Where possible, the analysis is based on completed feasibility studies. The analysis also draws on established technical