ASIAN DEVELOPMENT BANK PCR: BAN 29045

PROJECT COMPLETION REPORT

ON THE

JAMUNA BRIDGE ACCESS ROADS PROJECT (Loan 1478-BAN[SF])

IN

BANGLADESH

July 2004

CURRENCY EQUIVALENTS

Currency Unit – taka (Tk)

At Appraisal At Project Completion (May 1996) (June 2002)

Tk1.00 = $0.0237 $0.0173 $1.00 = Tk42.15 Tk57.65

ABBREVIATIONS ACC – accident cost ADB – Asian Development Bank CIF – cost, insurance, and freight EIRR – economic internal rate of return IRI – international roughness index JBIC – Japan Bank for International Cooperation JICA – Japan International Cooperation Agency NDF – Nordic Development Fund OECF – Overseas Economic Cooperation Fund PAP – project-affected personnel PCR – project completion report PIU – project implementation unit RHD – Roads and Highways Department RIP – Road Improvement Project RMP – Road Master Plan RRP – Report and Recommendation of the President SDR – special drawing rights TTC – travel time cost VOC – vehicle operating cost

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.

CONTENTS

Page BASIC DATA ii

MAP vi I. PROJECT DESCRIPTION 1

II. EVALUATION OF DESIGN AND IMPLEMENTATION 2

A. Relevance of Design and Formulation 2 B. Project Outputs 3 C. Project Costs 4 D. Disbursements 5 E. Project Schedule 5 F. Implementation Arrangements 6 G. Conditions and Covenants 6 H. Related Technical Assistance 7 I. Consultant Recruitment and Procurement 7 J. Performance of Consultants, Contractors, and Suppliers 9 K. Performance of the Borrower and the Executing Agency 9 L. Performance of the Asian Development Bank 10

III. EVALUATION OF PERFORMANCE 10

A. Relevance 10 B. Efficacy in Achievement of Purpose 11 C. Efficiency in Achievement of Outputs and Purpose 12 D. Preliminary Assessment of Sustainability 13 E. Environmental, Sociocultural, and Other Impacts 13

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13

A. Overall Assessment 13 B. Lessons Learned 14 C. Recommendations 14

APPENDIXES 1. Summary of Major Project Outputs 16 2. Summary of Project Cost 18 3. Annual Disbursements 19 4. Project Implementation Schedule 20 5. Status of Compliance with Major Loan Covenants 21 6. Details of Consulting Services 24 7. Economic Evaluation of the Project 25 8. Traffic Volume and Road Surface Condition on the Project Roads 32

ii

BASIC DATA A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan 7. Project Completion Report Number

Bangladesh 1478-BAN(SF) Jamuna Bridge Access Roads Project Bangladesh Roads and Highways Department SDR49.856 million BAN 29045

B. Loan Data 1. Appraisal – Date Started – Date Completed 2. Loan Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness – In Loan Agreement – Actual 6. Closing Date – In Loan Agreement – Actual – Number of Extensions 7. Terms of Loan – Interest Rate – Maturity (number of years) – Grace Period (number of years)

16 May 1996 27 May 1996 25 Sep 1996 26 Sep 1996 5 Nov 1996 9 Jan 1997 9 Apr 1997 1 Apr 1997 31 Dec 2001 7 Aug 2002 One 1% per annum 40 10

8. Disbursements a. Dates Initial Disbursement

21 Nov 1997

Final Disbursement

7 Aug 2002

Time Interval

56 months

Effective Date

1 Apr 1997

Original Closing Date

31 Dec 2001

Time Interval

57 Months

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b. Amount ($ million) Category or Subloan

Original

Allocation

Last Revised

Allocation

Amount

Canceled

Net Amount

Available

Amount

Disbursed

Undisbursed

Balance Civil Works 51,130,456 57,639,287 57,639,287 52,597,864 5,041,423 Consulting

Services 7,359,435 7,541,689 7,541,689 6,893,818a 647,871

Service Charge

1,240,533 1,255,503 1,255,503 1,124,593 130,910

Unallocated 12,269,576 0 0 0 0 Total 72,000,000 66,436,480 66,436,480 60,616,275 5,820,205b a Includes $208,507 for equipment procurement. b Canceled during loan closure.

9. Local Costs (Financed) - Amount ($) $18,651,895.00 - Percent of Local Costs 83.96 - Percent of Total Cost 30.77 C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost 89.30 73.76 Local Currency Cost 107.00 96.25 Total 196.30 170.01

2. Financing Plan ($ million) Cost Appraisal Estimate Actual Foreign Local Total Foreign Local Total Implementation Costs Borrower-Financed 0.00 52.05 52.05 0.00 49.72 49.72 ADB-Financed 48.20 23.80 72.00 41.96 18.65 60.61 ADB TA 2678-BAN 0.25 0.00 0.25 0.25 0.00 0.25 OECF/JBIC-Financed 34.35 25.65 60.00 24.82 22.49 47.31 JICA-Financed 5.00 5.00 10.00 5.42 4.56 9.98

NDF-Financed 1.50 0.50 2.00 1.31 0.83 2.14

Total 89.30 107.00 196.30 73.76 96.25 170.01 ADB = Asian Development Bank, JBIC = Japan Bank for International Cooperation, JICA = Japan International Cooperation Agency, NDF = Nordic Development Fund, OECF = Overseas Economic Cooperation Fund, TA = technical assistance.

iv

3. Cost Breakdown by Project Component ($ million) Component Appraisal Estimate Actual A. Base Cost 1. Land Acquisition and Resettlement 10.40 12.76 2. Civil Works a. Construction (143 km) 131.00 139.27 b. Road Safety Measures 5.00 1.08 3. Consulting Services a. Construction Supervisiona 10.31 11.35 b. Preparation of RIP IIIb 1.50 3.37 c. Road Safety 1.79 2.14 4. Project Administration 1.00 0.00 B. Contingencies 1. Physical 8.04 0.00a 2. Price Escalation 24.96 0.00a

Subtotal (A+B) 194.00 168.89 C. Interest During Construction 2.30 1.12

Total Project Cost 196.30 170.01 a Included in the total project costs.

b Third Road Improvement Project.

4. Project Schedule (Asian Development Bank-financed components) Item Appraisal Estimate Actual Date of Contract with Consultants Construction Supervision Consultants Dec 1996 Oct 1997 Preparation of RIP III Dec 1996 Mar 1998 Civil Works Contract Date of Award Mar 1997 Oct 1997 Completion of Work Jun 2001 Jun 2002 5. Project Performance Report Ratings

Ratings Implementation Period

Development Objectives

Implementation Progress

From Apr 1997 to Jun 1997 Satisfactory Satisfactory From Jul 1997 to Dec 1997 Satisfactory Satisfactory From Jan 1998 to Jun 1998 Satisfactory Satisfactory From Jul 1998 to Dec 1998 Satisfactory Satisfactory From Jan 1999 to Jun 1999 Satisfactory Satisfactory From Jul 1999 to Dec 1999 Satisfactory Satisfactory From Jan 2000 to Jun 2000 Satisfactory Satisfactory From Jul 2000 to Dec 2000 Satisfactory Satisfactory From Jan 2001 to Jun 2001 Satisfactory Satisfactory From Jul 2001 to Dec 2001 Satisfactory Satisfactory From Jan 2002 to Jun 2002 Satisfactory Satisfactory

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D. Data on Asian Development Bank Missions

Name of Mission

Date

No. of Persons

No. of Person-Days

Specialization of Membersa

Fact-Finding Mission 22 Nov–5 Dec 1995 4 52 a, b, e, d Appraisal Mission 16–27 May 1996 4 44 a, c, h, i Loan Appraisal/Resettlement 26–29 Aug 1996 4 12 a, b, h, i Inception Mission 27 Feb–9 Mar 1997 1 11 e Review Mission 22–28 Feb 1998 3 18 b, d, g Review Mission 24 Nov–8 Dec 1998 1 14 d Review Mission 1–7 Feb 1999 1 6 d Midterm Review Mission 11–19 Oct 1999 3 24 d Midterm Review Mission 25 Oct–3 Nov 1999 3 27 e, g Review Mission 10–16 May 2001 2 12 b, f Review Mission 22–24 Dec 2001 2 12 f, g Review Mission 29 May–7 Jun 2002 1 8 f Project Completion Reviewb 16 Mar–19 Apr 2004 4 16 d, f, h, i No. = number. a a - senior project economist, b - senior project implementation officer, c - senior program officer, d - senior project

specialist, e - project engineer, f - project implementation officer, g - project analyst, h - staff consultant/counsel, i - other categories.

b The project completion report was prepared by: A. Faruque, Project Implementation Officer, L. A. Khan, Project Analyst, Bangladesh Resident Mission; G. Mostofa, Staff Consultant and Road Engineer; and K. H. Zaglul, Staff Consultant and Transport Economist.

04-16498 HR

Map 2 ix

I. PROJECT DESCRIPTION

1. The Jamuna Bridge Access Roads Project was formulated to contribute to the Government’s goals of reducing total transport costs in strategic transport networks, with a focus on traffic volumes generated from the Project,1 and providing improved access to Jamuna Bridge from Dhaka and the country’s southeastern region. The Project was identified through the Road Master Plan (RMP),2 prepared in 1990–1992, and Asian Development Bank (ADB) technical assistance on the Second Road Improvement Project.3 2. The Project’s main objectives4 were to (i) optimize the use of Jamuna Bridge, by strengthening the eastern main access roads; (ii) contribute to the stabilization of peoples’ livelihoods through development of a road network that is less prone to failure during weather-related disturbances; (iii) assist sustainable economic development through the enhancement of transport links between agricultural centers and industrial areas; and (iv) enhance road safety measures. The Project provided for reconstruction of about 143 kilometers of national roads between Jamuna Bridge and 20 kilometers south of Feni, on the Dhaka-Chittagong Highway, via Dhaka, and low-cost accident-preventing improvements on selected national and regional roads. 3. The road sections taken up for improvement under the Project and the related civil works procurement contract packages are given in Table 1.

Table 1: Road Improvement Component

ADB = Asian Development Bank, JBIC = Japan Bank for International Cooperation, km = kilometer, No. = number. 4. The Roads and Highways Department (RHD), under the Government’s Ministry of Communications, was the Project’s Executing Agency. 5. Several project components were financed by different agencies (ADB; Government of Japan, through the Japan International Cooperation Agency [JICA]; Japan Bank for International

1 ADB. 1994. Jamuna Bridge. Manila. 2 ADB. 1988. Preparation of Road Master Plan. Manila. 3 ADB. 1989. Second Road Improvement. Manila. 4 ADB. 1996. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and

Technical Assistance Grant to Bangladesh for the Jamuna Bridge Access Roads Project. Manila.

Contract No.

Road Name

Length (km)

Highway Identification No.

Source of Finance

1. Joydebpur to Kaliakoir 24.0 N-4 (Dhaka-Tangail-Jamuna Bridge)

JBIC

2. Kaliakoir to Karotia 24.0 N-4 (Dhaka-Tangail-Jamuna Bridge)

JBIC

3. Karotia to Tangail 18.1 N-4 (Dhaka-Tangail-Jamuna Bridge)

JBIC

4. Nabinagar to Chandra 15.8 R505/217 (Linking N4 and N5)

ADB

5. Mirpur to Savar 14.0 N-5 (Dhaka-Aricha)

ADB

6. Demra (Katchpur) to Daudkandi

26.9 N-1 (Dhaka-Chittagong)

ADB

8. Baraierhat to Wahedpur 20.0 N-1 (Dhaka-Chittagong)

ADB

2

Cooperation [JBIC]; and Nordic Development Fund [NDF]). The components were administered independently by the cofinancing organizations, with their respective parallel loans, in accordance with the standard loan administration procedures of each cofinancing organization.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

6. The Project was designed in line with ADB’s sector strategy and 1993 country operational strategy, the overarching goal of which was poverty reduction through (i) encouraging faster economic growth; (ii) providing direct assistance to the poor, to improve their living conditions; and (iii) improving and protecting the environment. The Project aimed at minimizing transport constraints and reducing transport costs, thereby supporting the Government’s efforts to accelerate economic growth and generate employment. The feasibility study undertaken in 1990/91 took this into account and recommended improving and strengthening high-priority arterial roads. The road sections selected for improvement under the Project are part of the road sections identified and recommended under the feasibility study. The study successfully focused on the most economical means for providing a cost-effective transport network on the main road corridors, leading to optimum use of Jamuna Bridge. The feasibility study adequately identified the probable risk factors generally encountered in similar projects and provided for detailed engineering design finalization and a land acquisition and resettlement plan at appraisal. Overall, the Project was designed and formulated to reduce poverty, thereby promoting the country’s economic development. The Project was therefore fully in line with ADB’s country strategy and overall goal.

7. Under the Fourth Five-Year Plan (1990/91–1994/95), the Government accorded high priority to completing the geographically balanced strategic road network, developing financing and a planned maintenance program, and reducing total transport costs on strategic road corridors. In line with this strategy, the Project improved the strategic arterial road network on the selected sections of the Dhaka-Chittagong, Dhaka-Savar, and Dhaka-Jamuna Bridge corridors. The Project’s design emphasized a sustainable maintenance system. Accordingly, the need for increased maintenance expenditure for all national and regional roads was covenanted under the Project. In the longer run scenario, ADB and other external agencies are supporting the Government’s ongoing efforts to put in place a self-sustaining road fund. The Project was therefore highly relevant to the Government’s sector strategy.

8. The Project’s design took into consideration the lessons learned from previous ADB-financed projects5 and current ADB practices. These lessons are that (i) advance action is necessary for contractor prequalification and consultant recruitment; (ii) detailed engineering design must be undertaken prior to loan appraisal; (iii) preparatory works must be completed before awarding civil works contracts; (iv) contractor prequalification must be careful; (v) proper guidance must be given to contractors by consultants during early mobilization, to optimize the working season; and (vi) Executing Agency and ADB monitoring must be continuous. Following the Government’s request, ADB approved advance action for consultant recruitment and civil works construction component supervision and preparation of Third Road Improvement Project. Under the Jamuna Bridge Access Roads Project, all preparatory works were completed before awarding civil works contracts; project contractors were carefully prequalified, to ensure

5 ADB. 1996. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and

Technical Assistance Grant to Bangladesh for the Jamuna Bridge Access Roads Project. Manila.

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optimum short-listing; and project consultants provided satisfactory guidance to contractors for timely construction season mobilization and optimization. ADB and the Executing Agency undertook continued and timely project monitoring during implementation, primarily through construction supervision, consultants’ interim progress reports, and ADB’s project review missions. In addition, ADB periodically organized coordination meetings with the Executing Agency and construction supervision consultants, during which project progress was evaluated and implementation issues were discussed and, in most cases, resolved. B. Project Outputs 9. Implementation followed the arrangements envisaged at appraisal, except for (i) deleting three permanent weighbridges from Contract 6, under ADB’s component; (ii) deleting the 3-kilometer Kaliakoir bypass from Contract 1, funded by JBIC; and (iii) reducing the road safety component’s scope, due to time constraints caused by the Government’s protracted approval of addenda to consultants’ contracts. The three weighbridges were deleted, mainly due to the Executing Agency’s apparent lack of interest in axle load control initiatives and the complexities resulting from including the bridges in the consultants’ component. However, as an outcome of ADB’s follow-up dialogues with the Government, the scope of ADB’s ongoing Southwest Road Network Development Project6 included a permanent weighbridge under its road safety component. The Kaliakoir bypass was not implemented, due to budgetary constraints. The bypass, however, was included in ADB’s subsequent Road Network Improvement and Maintenance Project II,7 which was approved in November 2003 for $126 million. The Jamuna Bridge Access Roads Project improved about 77.47 kilometers of roads, compared to the 76.70 kilometers envisaged at appraisal. As planned at appraisal, the Project widened (i) roads to 7.30 meters in contracts 4, 6, and 8 and 7.30 meters x 2 in Contract 5, due to the need to make the road four lanes, and (ii) roads’ hard shoulders to 1.25 meters in Contract 4, 1.25 meters x 2 in Contract 5, 1.50 meters x 2 in Contract 6 (by reducing the soft shoulders from 1.20 meters to 0.95 meters), and 1.20 meters x 2 in Contract 8. In line with the appraisal design, the roads’ pavement composition comprised 30 millimeters of improved subgrade, 225–250 millimeters of aggregate subbase, 200 millimeters of aggregate lower base, 120–130 millimeters of aggregate upper base, 80 millimeters of binder course, and 40–50 millimeters of bituminous wearing course. The composition varied in some cases, depending on the traffic volume for each road section projected at appraisal. 10. Also in line with the appraisal design, the Project constructed 11 bridges (totaling 787 meters), including three bridges parallel to those constructed with JICA funding, and 70 culverts (totaling 230 meters). Moreover, the Project rehabilitated three bridges (totaling 91 meters) and 19 culverts (totaling 62 meters). Construction works quality for the roads, bridges, and culverts was generally satisfactory. The works quality for the three new bridges (totaling 426 meters) parallel to JICA’s bridges was commendable. 11. Of the four ADB-assisted road improvement contracts, contracts 4 and 5 were completed on schedule, while Contract 6 was delayed by about 14 months, to implement the additional works of (i) raising the embankment elevation to above the 1998 flood level; (ii)

6 Loan No. 1708-BAN(SF): Southwest Road Network Development Project, for $115.0 million, approved in

November 1999. 7 Loan No.2021-BAN(SF): Road Network Improvement and Maintenance Project II, for $126.0 million approved in

November 2003.

4

constructing three two-lane bridges,8 parallel to the bridges completed with JICA financing, and road medians in these sections; and (iii) improving an additional 1.5-kilometer road linking the improved road section at Daudkandi to Chittagong. All these additional works were awarded through variation orders during the later parts of project implementation. Completion of works under Contract 8 was delayed by about 14 months, due to (i) an initial contractual dispute involving quantities of materials and (ii) rectification works on undulation of road pavement, to ensure good riding quality. Under the ADB-assisted road safety component, civil works for the reengineering of eight identified accident black spots were implemented at a total cost of $1.08 million, compared to an appraisal estimate of $3.40 million. In terms of road improvement physical works, the expected outputs at appraisal and the actual outputs are listed in Appendix 1.

12. On completion, project output, especially for the ADB-assisted road improvement works component, substantially achieved the targets planned at appraisal. The completed road sections under the ADB-assisted component provided faster and cost-effective access from the eastern region of Chittagong, via Dhaka, to the Jamuna Bridge. Implementing eight low-cost road safety improvement subprojects helped minimize accidents on the Dhaka-Mymensingh and Dhaka-Aricha priority sections of national highways 3 and 5, respectively. The road safety subprojects, although small, compared to the total countrywide need, could serve as models and pilot cases for future comprehensive intervention to mitigate the safety hazards on roads. A part of the loan proceeds was used to procure consulting services for the preparation of future road projects for ADB financing, which will lead to the preparation of the Southwest Road Network Development Project and the Road Maintenance and Improvement Project. These projects are ongoing. The study’s quality and detailed engineering design were generally satisfactory. C. Project Costs 13. The estimated total project cost at appraisal was $196.30 million, comprising $72.00 million was to be financed by ADB; $60.00 million in cofinancing elements by JBIC; $10.00 million by the Government of Japan, through a JICA grant; $2.00 million by NDF; $0.25 million under ADB TA 2678-BAN; and $52.05 million in government counterpart funding support. Of this total, $89.30 million was to be the foreign currency cost, and $107.00 million was to be the local currency cost. The actual cost of the Project’s completed works was $170.01 million. The lower cost primarily resulted from bid prices being lower than initial estimates for civil works under ADB’s component. A summary of appraised and actual project costs is given in Appendix 2. ADB loan proceeds were used for road improvement works (77.47 kilometers), civil works for road safety improvements and reengineering, consulting services for construction supervision of the civil works under ADB’s road improvement component, and Third Road Improvement Project preparation. Of ADB’s total assistance, which was reduced to $66.44 million during reallocation in June 2002, due to Japanese yen, special drawing rights, and US dollar appreciation against the taka, $60.62 million was disbursed and $5.82 million remained unused. The unused amount was subsequently cancelled during the closing of loan accounts in August 2002. Low use of ADB’s fund was attributed mainly to (i) receiving lower than estimated initial bid prices for civil works contracts, (ii) deleting three permanent weighbridges and 18 portable weighbridges from the scope of works, and (iii) reducing the road safety component’s scope of civil works. Table 2 shows the actual and appraised use of ADB’s loan.

8 As agreed by ADB, the tender conditions specified that these bridge works should be commenced after the three

JICA bridges were completed.

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Table 2: Appraised and Actual Use of the Asian Development Bank’s Loan

No.

Category or Subloan

Original Allocation

Last Revised

Allocation

Net Amount

Available

Amount Disbursed

Undisbursed Balance

01 Civil Works 51,130,456 57,639,287 57,639,287 52,597,864 5,041,423 02 Consulting Services 7,359,435 7,541,689 7,541,689 6,893,818 a 647,871 03 Service Charge 1,240,533 1,255,503 1,255,503 1,124,593 130,910 04 Unallocated 12,269,576 0 0 0 0 Total 72,000,000 66,436,480 66,436,480 60,616,275 5,820,205 b

a Includes $208,507 for equipment procurement. b Cancelled on loan closing. D. Disbursements

14. Annual disbursements from ADB’s loan are shown in Appendix 3. Total disbursements under the loan amounted to $60.62 million, or 84.19% of the loan amount ($72.00 million). Of this, the foreign and local currency amounts disbursed were $41.96 million (69.22%) and $18.65 million (30.78%), respectively. The proportion of foreign and local currency disbursements was 69.22% and 30.78%, against appraisal estimates of 66.94% and 33.06%, respectively. The proportion of foreign currency disbursement increased from the Loan Agreement’s provision, with a corresponding decrease in the local currency component’s disbursement. This adjustment was required after changes were made to the scope of works implemented through several eligible variation orders to the civil works contracts, particularly in Contract 6, under the road improvement component. In addition, exchange rate fluctuation among special drawing rights, taka, and US dollars contributed to the changed proportion of foreign and local currency disbursements.

15. The initial and final disbursements under the loan were made in November 1997 and August 2002, respectively. This was equivalent to a disbursement period of 56 months and 17 days, compared to the 57-month disbursement period envisaged under the Loan Agreement. Although the loan was closed on the extended loan closing date of 30 June 2002, the loan account was kept open until 7 August 2002, to accommodate the processing of eligible payments in the field and the preparing and submitting of withdrawal applications to ADB by the Executing Agency. The submission of withdrawal applications by the Executing Agency was generally prompt and up to date.

E. Project Schedule

16. The appraised and actual project implementation schedules are presented in Appendix 4. Civil works implementation under the ADB-financed road improvement component was delayed by about 14 months, despite taking advance action on consultant recruitment and civil works procurement. However, the delay was justified, considering that project site access and works progress were seriously disrupted during the countrywide flood in 1998, which inundated about 68% of the country’s land for about 11 weeks.9 After the flood, the embankment design level had to be raised above the highest flood level, to ensure the works’ sustainability against future calamities. Notably, despite this hostile natural phenomenon, civil works for two of four 9 ADB. 1998. Flood Damage Rehabilitation Project. Manila. Under this project, ADB assisted the government in

rehabilitation after the flood.

6

subprojects (contracts 4 and 5) under the ADB-assisted road improvement component were completed on schedule. In addition, the scope of works in all subprojects, particularly in Contract 6, was substantially expanded through variations of contracts at a later stage of project implementation, in 2001 (para. 11). These additional works necessitated extended time for implementation and delayed civil works completion by 14 months.

17. Completion of Contract 8 was also delayed by 14 months, due to an initial contractual dispute and rectification works undertaken by the contractor on undulating road pavement (para. 11). However, despite these unavoidable and/or justified delays associated with a number of substantial variations of civil works contracts, the total implementation schedule and cost for the ADB-financed component remained within the appraisal estimate. This might have resulted from substantial loan funds savings (about $14 million), due to bid prices being lower than the initial estimate for civil works; two bridges being deleted from the scope (about $4.0 million); and scope reduction for the ADB-assisted road safety component (about $4.0 million). The delayed completion of the major civil works could not destabilize the projected implementation schedule under the loan, as the most time-consuming preparatory works (e.g., consultant recruitment and preparation of a land acquisition and resettlement plan) were completed as part of the advance action activities taken prior to commencing physical works, as approved by ADB. As a result, the Project was completed with a delay of only 6 months from the original loan closing date of 31 December 2001, despite the expanded civil works scope. The Third Road Improvement Project’s preparation was delayed by about 32 months, due to the Borrower’s protracted consultant recruitment procedures, additional tasks assigned under variations of consultants’ contracts, and delayed government approval of these variations.

18. Consultant recruitment and government approval of subsequent addenda to consultants’ contracts under the NDF-financed road safety study were inordinately delayed. This adversely affected the timely implementation of ADB-funded road safety civil works and resulted in the deletion of a major part of such works from the Project’s scope, due to time constraints.

19. Despite taking advance action on civil works procurement and consulting services before loan approval and having significant preconstruction activities already set in motion, delays still occurred in awarding procurement contracts. This was mainly due to the protracted and complex procurement procedures generally embedded in the long-standing administrative systems of government agencies and ministries.

F. Implementation Arrangements

20. The implementation arrangements envisaged at appraisal were generally followed. RHD, under the Government’s Ministry of Communications, was the Project’s Executing Agency. A special project implementation unit (PIU) was established in RHD, to ensure proper project implementation and timely project completion. The PIU was headed by a project director at the level of additional chief engineer, RHD. The project director was assisted by an assistant project director and four project managers, each at the executive engineer level. Each project manager supervised at least one deputy project manager. Given the importance of ensuring timely project completion, considering the Project’s strategic interrelation with the country’s core road network, these arrangements worked well.

G. Conditions and Covenants

21. Loan effectiveness conditions were met expeditiously, as scheduled, and the loan was declared effective on 1 April 1997. The covenants in the report and recommendation of the

7

President and Loan Agreement are generally relevant, and the major covenants were complied with, although a few remained partly complied with. Timely allocation of adequate funds for development projects and maintenance works remained a chronic problem in Bangladesh, emanating from the Government’s overall budgetary constraints, and the covenants that were partly complied with are also mostly related to these constraints. Compliance with the condition of proper and timely maintenance of the completed project facilities was erratic in a few cases, especially on the Nabinagar-Chandra (Contract 4) and Mirpur-Savar (Contract 5) road sections, where the completed works at several locations showed signs of deterioration, although within manageable limits, due to lack of regular maintenance. The Government, in 2001, partly complied with the covenant related to apprehension procedures and fines for axle load enforcement, by partially amending the relevant provisions of the Highways Act, 1925 and the Motor Vehicle Ordinance, 1983, as part of the loan effectiveness conditions of the ADB-assisted Road Maintenance and Improvement Project,10 which is ongoing. The status of compliance with major loan covenants is presented in Appendix 5.

22. Loan reporting requirements by the Borrower were substantially met. The Borrower’s project completion report for the ADB-financed road improvement component was received on time but without adequate focus on the road safety component. The lack of focus was due to the NDF-financed component’s consultants being unavailable at project completion to provide input to the Executing Agency, due to the earlier expiration of their contracts.

23. Project accounts, duly audited by the Foreign Aided Projects Auditing Directorate, were generally submitted on time. The audit reports confirmed that the Executing Agency maintained separate accounts for the Project, in accordance with an acceptable accounting system. The reports, however, at times noted a number of issues regarding payments to contractors. Those issues were eventually addressed by the Executing Agency, in some cases through bilateral discussions with the Foreign Aided Projects Auditing Directorate. H. Related Technical Assistance 24. A technical assistance grant (TA 2678-BAN) of $250,000, in addition to loan financing for feasibility studies, was provided for the preparation of a future road project for financing by ADB. The technical assistance funds were used to meet part of the foreign exchange cost of the feasibility study of the Third Road Improvement Project. During technical assistance implementation, the consultants’ input was substantially increased to cover additional tasks assigned to them (para. 23). The technical assistance was rated generally successful, as it provided the targeted output in preparing the Southwest Road Network Development Project and the Road Maintenance and Improvement Project in a timely manner.

I. Consultant Recruitment and Procurement

25. The scope of consulting services for the ADB-financed components included construction supervision of civil works and preparation of the Third Road Improvement Project. For design review and construction supervision of the ADB-financed contracts, international experts were recruited to provide about 110 person-months of consulting services, and domestic experts were recruited to provide 450 person-months of consulting services in related fields. Experts were recruited following ADB’s Guidelines on the Use of Consulting Services. To avoid delays, ADB approved advance action for consultant recruitment. The consultants were

10 Loan 1789-BAN[SF]/1790-BAN, for $94.0 million, approved in November 2000.

8

fielded in October 1997, before civil works commenced. Subsequently, during implementation, the consultants’ contracts were amended to provide the additional input required to cover the 14-month extended period of civil works contracts under the road improvement component. On project completion, construction supervision consultants’ actual input was 130.64 person-months of international consultant services and 609.63 person-months of domestic consultant services. The consultants’ contracts also included the procurement of three permanent weighbridges and 24 weigh-in-motion pads. The decision to include the procurement of axle weighing equipment under the consultants’ contracts was complicated and not prudent. As a result, all three permanent weighbridges were deleted from the consultants’ component, and only eight of 24 portable axle weighing pads planned at appraisal were procured following ADB’s international shopping procedures. For the preparation of the ADB-assisted Third Road Improvement Project, about 25 person-months of international expert services and 180 person-months of local expert services were initially procured by the Executing Agency, as envisaged at appraisal. During implementation, international and domestic consultants’ inputs increased to 53.57 person-months and 394.84 person-months, respectively, to cover additional tasks related to the (i) feasibility study for the Chittagong port bypass road; (ii) detailed engineering of contracts 7, 9, and 10 and remaining project contracts;11 (iii) detailed design of and procurement document preparation, bidder prequalification, and bid evaluation for the Southwest Road Network Development Project; and (iv) detailed engineering design of the Corridor Improvement Component of the Road Maintenance and Improvement Project. The total of loan funds used for consulting services was $6.89 million, compared to an appraisal estimate of $7.35 million. A summary of consulting services under the Project’s ADB-assisted component is given in Appendix 6.

26. Under the NDF-financed road safety component, the inputs of 55 person-months of international consultant inputs and 120 person-months of domestic consultant inputs were procured following NDF’s guidelines. The total cost of consulting services at completion was $1.87 million, compared to an appraisal estimate of $2.00 million.

27. Under the JBIC-funded road improvement component, the planned total input at appraisal was 37 person-months of international consultant services and 419 person-months of domestic consultant services, at an estimated cost of $3.69 million. The total actual consultant input was 96 person-months of international consulting services and 695 person-months of domestic consulting services, at a total cost of $7.55 million. The consultants’ input was substantially increased to cover the extended implementation period of the civil works contracts under this component.

28. Civil works for the ADB-financed road improvement component (four contracts) were procured through international competitive bidding procedures, following the Guidelines for Procurement Under Asian Development Bank Loans and ADB’s standard bidding documents for the procurement of civil works. The procurement process was protracted, which delayed the implementation of physical works. Civil works for ADB-financed accident black spot improvement works (eight contracts) were procured through local competitive bidding, generally following the Government’s standard bid form12 and ADB’s Guidelines for Procurement Under Asian Development Bank Loans.

11 These contracts were finally dropped from the loan due to budgetary constraints. 12 BD Form No. 2991.

9

29. Civil works procurement for JBIC- and JICA-financed components was undertaken as per JBIC and JICA guidelines. While the procurement of contractors’ services for five JICA-funded bridges was conducted efficiently and with prudence, procurement of three road improvement civil works contracts under the Overseas Economic Cooperation Fund (now known as JBIC) component was delayed, due to the Government’s protracted approval procedures.

J. Performance of Consultants, Contractors, and Suppliers

30. The two consultant teams’ overall performance under the ADB-financed component was satisfactory. The construction supervision consultants managed the Project well and provided adequate guidance to the civil works contractors, which resulted in timely completion of works under contracts 4 and 5. Contracts 6 and 8 were completed with reasonable and justifiable delays. Also, quality assurance by the consultants was satisfactory, which was demonstrated by the improved riding quality of completed roads. However, the rutting of the wearing course in Contract 8, as detected by the Executing Agency and ADB’s Project Review Mission in May 2001, could have been avoided or minimized through closer monitoring and preemptive intervention by the consultants. The defects were, however, rectified by the contractor to acceptable standards during the contract’s defects liability period.

31. The detailed engineering works for the Third Road Improvement Project prepared by the design consultants under the Project are being implemented under the ongoing ADB-assisted Road Maintenance and Improvement Project and Southwest Road Network Development Project. Reports from the field indicate that while the consultants’ design and bidding documents for the future project were generally satisfactory, a few inadequacies were identified, notably with respect to the presence of cracks in the existing pavement of the Road Maintenance and Improvement Project’s contracts 1, 2, and 3. This could, however, be attributed to the long gap of about 5 years between the preparation of design and commencement of physical works.

32. The civil works contractors’ performance was generally satisfactory. This resulted in timely works completion, despite the late issuance of certain major variation orders for additional works under Contract 6. The quality of works in these contracts was also satisfactory. K. Performance of the Borrower and the Executing Agency 33. Given the Project’s national priority and critical features, which were designed to provide the much-needed improved access to Jamuna Bridge and beyond, through improving key national and regional highways, including National Highway 1 (Dhaka-Chittagong corridor), the Government’s ensuring successful project implementation was an uphill task. Considering this, the Borrower’s performance was reasonably satisfactory. All major conditions of loan effectiveness were complied with in an expeditious manner, and the loan became effective in the shortest possible time.13 However, the Borrower could have capitalized on the advance action approved by ADB for the preparation of a land acquisition and resettlement plan and procurement of consultants’ services, which ensured completion of major preparatory works prior to physical works commencement, as foreseen at appraisal. The Borrower was prompt in establishing a PIU within RHD, with all required authorities, logistics, and personnel support to handle a project of this magnitude. The Borrower was also reasonably prompt in allocating

13 The loan was declared effective on 1 April 1997, less than 3 months after signing the Loan Agreement.

10

adequate counterpart funds for project financing, except a few stray incidents of delays, which were, however, promptly resolved through timely intervention by ADB, in some cases. 34. The Borrower complied with most Loan Agreement conditions and major covenants, a few of those were partially complied with even during the Project’s implementation. Most covenants were related to maintenance of completed project facilities, to ensure sustainability. Another loan covenant required the Government to promulgate legislation related to apprehension procedures and fines prior to FY1997/98. This was substantially complied with in 2001, by revising the Highways Act, 1925 and the Motor Vehicle Ordinance, 1983, as conditions of effectiveness of ADB’s ongoing Road Maintenance and Improvement Project.

35. RHD’s performance as the Executing Agency was rated satisfactory. The PIU was staffed by adequately qualified and experienced personnel, who could reasonably contribute to the Project’s timely implementation. L. Performance of Asian Development Bank 36. ADB was the Project’s lead cofinancing organization and assisted the road improvement works of about 77.47 kilometers out of a total of 137.96 kilometers of national roads affected by the Project. ADB’s road improvement works component was completed successfully by June 2002, compared to the scheduled target of December 2001, which was the original loan closing date. ADB’s approval on advance action for procurement of consultants and civil works contractors was highly prudent and prevented the Project from being inordinately delayed. Project formulation, design, and implementation arrangements were generally satisfactory. ADB’s timely approval of contract awards and disbursements; close monitoring of the progress of works, particularly by the Bangladesh Resident Mission (BRM), after delegating the loan; and timely intervention in resolving all implementation issues contributed significantly to the successful completion of ADB’s components. Delegating project administration to BRM on 1 February 2000 enabled BRM’s up-front and continued involvement in project monitoring and supervision. This resulted in good interaction among ADB and Executing Agency representatives and consultants and contractors. ADB fielded six regular project review missions. In addition, the Midterm Review Mission was fielded in October and November 1999. The findings of these missions were translated into time bound action plans, to achieve the targeted progress and benefits. Overall, ADB’s performance in the implementing the Project was highly satisfactory.

III. EVALUATION OF PERFORMANCE

A. Relevance

37. With the construction of the Jamuna Bridge, which connects northwest Bangladesh to Dhaka and the country’s eastern and southeastern regions, the need for improving the bridge’s access roads became indispensable, if the increased transport demand of 18%, which was purely attributed to the bridge’s commissioning, was to be met.14 The Project therefore aimed at improving deteriorated road sections between the port city of Chittagong and the Jamuna Bridge, via Dhaka, to optimize bridge use. The Project’s design and formulation were in conformity with the Government’s development strategy of promoting economic development through improving infrastructure. The Government’s strategy was also in line with ADB’s 1993

14 ADB. 2001. Jamuna Bridge Impact Study. Manila.

11

country operational strategy for Bangladesh, which aimed at poverty reduction through economic development. The objectives planned at appraisal were fully achieved at completion, and no major change of the Project’s scope occurred during implementation. The Project is therefore considered highly relevant.

B. Efficacy in Achievement of Purpose

38. The Project is rated efficacious, as the completed subprojects achieved the principal objectives of providing an all-weather arterial road network from Chittagong, via Dhaka, to the Jamuna Bridge and removing transport bottlenecks for optimum bridge use. The completed sections improved riding quality and road safety; reduced traffic congestion; increased vehicle occupancy and use; and helped reduce travel time from 20–48 hours to 5–12 hours) (footnote 15) on road sections leading to the Jamuna Bridge, thereby reducing average vehicle operating costs. This triggered increased economic activities in the regions east and northwest of the bridge. Farmers in the northwestern region of Bangladesh are now receiving better prices for their agricultural products, and new industrial enterprises are being established in the region. Traffic data collected by the Project Completion Report Mission, as presented in Appendix 8, confirm that annual average daily traffic on the Project’s road sections and on the Jamuna Bridge increased substantially from 43,015 in 2001, which was projected at appraisal, to 61,392 in 2004, and on some sections the increased traffic volume exceeded the projection at appraisal (Appendix 8, Table A8.10).

39. In general, the completed project road sections have a direct or indirect incremental effect on income, which affects poverty reduction. The Project facilitated better marketing of agricultural products, particularly perishables, as new markets developed in the project area and more people used the improved infrastructure (Appendix 7, para. 11). Farmlands in the northwest region were integrated with the higher income consumers markets in the eastern and southeastern regions, leading to increased market prices accrued to farmers. The construction activities undertaken for the subprojects involved localized civil works using semiskilled and unskilled labor, leading to income generation. A sample survey conducted by the Project Completion Report Mission on the rural population living in the project area and its vicinity indicated that at least 80% of respondents felt that the completed project road sections substantially contributed to their increased income and provided improved access to social amenities. The findings of the ADB-funded Jamuna Bridge Impact Study15 (conducted in 2001/02, just after project completion) confirmed that the increase in wage rate alone in the project vicinity and the northwest region was about 30%, due to the Jamuna Bridge and its improved accessibility, compared to a national average of less than 10% during the corresponding period. Overall, all project components made direct contributions to poverty reduction in the immediate vicinity and indirect contributions in a wider area, from Chittagong in the east to Panchagarh in the northwest.

40. Accident data obtained by the Project Completion Report Mission (Appendix 7) indicate that the number of accidents on completed project road sections, including reengineered sections of accident black spots, was appreciably reduced and is now well below the average country level.

15 ADB. 2001. Jamuna Bridge Impact Study. (TA 3681-BAN for $150,000, approved on 3 July 2001, Section 5.2.1. of

Final Report). Manila

12

C. Efficiency in Achievement of Outputs and Purpose

41. The investment’s efficiency is highly visible, as evidenced by the substantial traffic growth generated by the improved access to the Jamuna Bridge, which the Project provided. More specifically, project implementation increased transport demand, reduced transport cost, and generated increased income through increased employment and corresponding increased consumer demand. The investment created efficient and economical access to market places, resulting in improved marketability of agricultural products, which increased income at the rural and semirural levels.

42. All buses and trucks have saved time, ranging from 21 to 40% and 16 to 23%, respectively. About 50% of bus operators participating in sample surveys in the field indicated that the frequency of their operation increased to accommodate increased transport demand. About 80% of bus operators confirmed enjoying decreased operating costs in terms of time savings and vehicle operating costs. Vehicle use increased up to 85% for buses and 69% for trucks. The other performance, as measured by the economic internal rate of return (EIRR), was assessed by project components and found reasonably efficient.

43. The economic performance, as measured by the EIRR, was assessed for all ADB-financed road improvement works. The same general assumptions made during appraisal were followed, based on the streams of project costs and benefits. The result showed that in terms of EIRR, the increase in economic benefit was more than that envisaged at appraisal in Contract 4 and Contract 8, whereas the same was lower in Contract 5 and Contract 6. In Contract 4, construction cost was reduced by 17%, compared to the appraisal estimate, while traffic volume increased by 100%, due to the shortened access from Dhaka to the Jamuna Bridge and beyond and diverted traffic from the dismantled road section under Contract 1, funded by JBIC, which is ongoing. In Contract 8, while construction costs remained as expected, annual daily traffic growth was 16%, which was due to industrial activity and township growth along the Project’s road sections. The projected traffic increase in Contract 5 was divested in Contract 4, due to shortened access to the bridge. In Contract 6, construction cost increased by about 100%, due to eligible additional works and partial obstruction of traffic, due to ongoing works related to creating a four-lane road section, under government financing. The Project was therefore efficient in achieving the purpose with the planned inputs. The results of an economic analysis are presented in Table 3.

Table 3: Results of Economic Reevaluation of Project Road Sections

IRI (%) EIRR (%) Zone Round/

Link Road Section Length

(km) ADT At

Appraisal Present At

Appraisal Present

Dhaka R505/217 Nabinagar-Chandra

15.85 11,097 5.40 2.22 26.30 54.52

Dhaka

N5/32 Mirpur-Savar 14.44 19,986 4.80 2.13 34.00 22.15

Dhaka N1/2 Katchpur-Daudkandi

28.08 18,485 4.80 3.27 38.40 18.99

Comilla N1/5 Feni-Wahedpur 19.16 12,393 0.00 2.85 28.40 60.13

ADT = annual daily traffic, EIRR = economic internal rate of return, IRI = international roughness index, km = kilometer.

13

D. Preliminary Assessment of Sustainability

44. Project sustainability is determined by the ability of the Executing Agency to preserve, through proper maintenance, the assets created or restored to good condition. The improved road conditions generated more traffic than was projected during project formulation. This indicates that the road surface is being subjected to more stress than envisaged. Moreover, the rampant movement of trucks carrying more than the permissible axel load puts completed road section sustainability at risk. The Government’s up-front action to enforce the axle load control regulation by construction and use of permanent weighbridges on the completed road stretches is indispensable to removing this impediment. As an outcome of ADB’s follow-up dialogue with the Government, one permanent weighbridge was included under ADB’s ongoing Southwest Road Network Development Project. Overall, the Government’s response in recent years to the need for axle load control, to ensure sustainability of roads, is showing signs of improvement.

45. Project roads are still in reasonably good condition, except in a few locations, under contracts 4 and 5, where the soft shoulders, hard shoulders, slope protection revetment, and pedestrian paths on bridges needed early maintenance, which the Project Completion Report Mission found was lacking. Complying with a loan covenant, the Government recently increased its road maintenance budget for FY2003/04 to Tk5,200 million, which is four times the FY1998/99 allocation. In addition, the Government is actively deliberating on a permanent and sustainable solution to the chronic constraint of maintenance funds by creating from user charges an independent and self-supportive road fund. This part of the National Land Transport Policy was approved by the Government in April 2004. Overall, project benefits are likely to be sustainable.

E. Environmental, Sociocultural, and Other Impacts

46. At appraisal, the initial environmental examination report concluded that no substantial adverse environmental impacts arose from the Project. Therefore, a full environmental impact assessment was not required. Minor environmental issues were, however, addressed properly during the Project’s design and implementation. No unanticipated indigenous peoples’ issues were encountered during project implementation. The Project envisaged the preparation of a formal land acquisition and resettlement action plan, which was in place prior to civil works commencement. In total, 1,317 project affected persons (PAPs), comprising 11 direct and 1,306 indirect PAPs, were identified during implementation, compared to an appraisal estimate of 460 PAPs. Of the total, nine direct (82%) and 1,303 indirect PAPs (99%) were compensated by the Executing Agency, through its resettlement unit and the Christian Committee for Development, Bangladesh, which is a nongovernment organization appointed by the Executing Agency. The remaining few PAPs could not be compensated, due to a pending legal action. Overall, the environmental and social measures implemented under the Project were highly satisfactory.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

47. Construction of the Jamuna Bridge, linking the eastern and northwestern regions of Bangladesh, opened new dimensions in Bangladesh’s socioeconomic development. To optimize bridge use, the Project aimed at connecting the primary road network to the bridge, especially from the eastern region of Chittagong and Dhaka. At appraisal, economic benefits from improved connectivity to the Jamuna Bridge and the northwest were expected to stimulate agricultural production in the northwest region. The improved arterial road network provided by

14

the Project was also expected to result in quantifiably large reductions in transport costs and eased access to large markets in the east, particularly in Dhaka. As a result, farmers in the northwestern region would reap benefits in terms of better farm-gate prices for their produce, leading to potential incentives and additional employment opportunities and improved industrial production in the greater Dhaka area, which would be triggered by better marketing opportunities to the hinterland in the northwest region. With the completion of ADB-financed project components, all targets were largely achieved. The improved road conditions of the completed subprojects enhanced economic activities in the region and thereby ensured optimum bridge use, as targeted by the Project. Therefore, the Project was implemented as conceived, and the Project’s overall performance is rated successful, in accordance with the guidelines of ADB’s Operations Evaluation Department.16

B. Lessons Learned

48. For large multicomponent infrastructure projects involving cofinancing by multiple development agencies, regular monitoring by ADB resident missions is essential from inception, due to resident missions’ proximity to borrowers and rich country-specific knowledge. However, project design must include appropriate mechanisms to ensure effective coordination among cofinancing organizations, enabling them to address common implementation issues in a concerted and timely manner. Adequate services and inputs of a team of experienced international and domestic consultants are also indispensable in ensuring proper monitoring and management of large-scale projects. As the Project Completion Report Mission noted, one reason for the adequate and timely management of the Project’s high-value construction works, which were geographically stretched over wide and dispersed areas, was the provision of strong consultant support planned at appraisal and procured during implementation. Also noted was that the Project addressed road safety improvements comprehensively, instead of on an isolated and piecemeal basis, through countrywide road safety audits, to identify and prepare a comprehensive list of accident black spots. For effective axle load control that is designed to minimize the incidence of overloading on national and regional highways, adequate numbers of permanent weighbridges need to be installed up front, at strategic locations, to capture overloaded traffic. Including the procurement of axle weighing equipment in consultants’ contracts is, however, not prudent, as this is not practicable, due to procedural complications.

C. Recommendations

1. Project-Related

49. The Government should regularly provide adequate funds, through allocation in each fiscal year’s annual development program, for routine, periodic, and emergency maintenance of completed subprojects, particularly for road sections under Contract 4 (Nabinagar-Chandra) and Contract 8 (Baraierhat-Wahedpur), which experience the highest vehicle density.

50. RHD should, by 30 June 2005, conduct a benefit monitoring and evaluation study of the Project, analyzing the type of data and methodology. During appraisal, this was agreed between ADB and the Government to be in place on project completion.

16 This project completion report is part of a sample of about 50% of all project completion reports prepared this year

that were independently reviewed by the Operations Evaluation Department. The review has validated the methodology used and rating given.

15

51. The Government should undertake up-front access and direct legislative and administrative measures to control rampant unauthorized vehicle parking on completed national and regional highways. This will prevent damage to completed roads’ soft and hard shoulders and contribute to asset sustainability.

52. A project performance audit report should be prepared by mid-2005, to assess the Project’s long-term impacts. To gather the necessary data, ADB should require the Government to continue monitoring completed subprojects’ performance and reporting the Project’s benefits, until the Project Performance Audit Report Mission is fielded.

2. General

53. For successful implementation of future ADB-supported projects involving cofinancing, the need for an appropriate mechanism for effective coordination among cofinancing organizations should be identified and envisaged at appraisal. This could be addressed by establishing a steering committee at the ministerial level, and the committee could be chaired by a concerned ministry’s secretary. In addition, to replicate the success of the multiple development partner-funded Jamuna Bridge Access Roads Project, a task manager may be designated from among the lead cofinancing organization’s staff members, to coordinate project implementation as the focal point for all stakeholders.

54. To avoid implementation delays, the current requirement of all ADB-assisted projects, which is to allow advance action for consulting services procurement and land acquisition and resettlement action plan preparation, should be reemphasized, and ADB should monitor performance in this regard. Retroactive financing may be allowed, where appropriate.

55. To achieve much-needed long-term sustainability of road improvement works, the Government should undertake a regular maintenance program that is financed by mobilizing user charges to create an independent and self-supporting road fund. The need for a road fund was underscored in the National Land Transport Policy, which was approved in April 2004. The Ministry of Communications is now examining a draft document on the proposed road fund.

56. To prevent vehicle overloading and unauthorized parking of heavy vehicles on the country’s road network, the Government should undertake measures to enforce legislation related to apprehension procedures and penalties, by enacting appropriate amendments of the Highways Act, 1925 and the Motor Vehicles Ordinance, 1983.

57. To ensure ADB’s continuous and effective project activities monitoring, administration of ADB-assisted projects should be delegated to resident missions, wherever appropriate, immediately after a loan is declared effective.

58. The design for all future ADB-assisted projects should emphasize project performance evaluation and benefit monitoring, to be completed by executing agencies, with assistance from construction supervision consultants, no later than the Project’s completion date.

16 Appendix 1

SUMMARY OF MAJOR PROJECT OUTPUTS

Project Component As Targeted at Appraisal

As Achieved on Completion

Remarks

Road improvement works, civil works contracts 4, 5, 6, and 8, financed by the Asian Development Bank (ADB)

Improvement of Nabinagar-Chandra, Mirpur-Savar, Demra-Daudkandi, and Barierhat-Wahedpur road sections (total 76.70 kilometers), respectively

Targets were achieved fully. Total road length after completion was 77.47 kilometers.

Contracts 4 and 5 were completed on schedule; Contract 6 was delayed by 14 months, due to a substantial variation of works; and Contract 8 was delayed by 14 months, due to corrective works on the pavement, to ensure good riding quality.

Road improvement works, civil works contracts 1, 2, and 3, financed by the Overseas Economic Cooperation Fund (now Japan Bank for International Cooperation)

Improvement of Joydebpur-Kaliakoir, Kaliakoir-Karotia, and Karotia-Tangail road sections (total 66.10 kilometers), respectively

Implementation targets could not be achieved as planned. Kaliakoir bypass had to be deleted, due to poor subsoil. Civil works on Contract 1 (24 kilometers) are ongoing. The length of two completed subprojects is 37.03 kilometers.

Out of three contracts, contracts 1 and 2 were completed with delays of 21 months and 10 months, respectively. Contract 1 was inordinately delayed, due to contractual disputes that led to litigation and subsequent arbitration. A new contractor was recruited through rebidding. The work is expected to be completed by December 2004.

Bridge construction works financed by the Japan International Cooperation Agency (JICA).

Construction of five two-lane bridges on the Demra-Daudkandi section of the Dhaka-Chittagong Highway (total 646 meters)

Targets achieved fully on time.

Three ADB-funded bridges under Contract 6 were parallel to three bridges funded by JICA, to provide the impact of four lanes in a road section experiencing high traffic density.

Appendix 1 17

Project Component As Targeted at Appraisal

As Achieved on Completion

Remarks

Road safety study (financed under Nordic Development Fund Credit No. 193), and Road safety reengineering and civil works (ADB-financed)

Development of institutional capacity and skills of traffic police, Roads and Highways Department staff members, and Bangladesh Road Transport Authority staff members in accident prevention, road design measures, safety audits, economic evaluations, and detailed engineering, through in-house and on-the-job training Undertaking civil works for low-cost road safety improvements at selected locations known as accident black spots

Targets were partly achieved. The shortfall was due to the Executing Agency’s capacity constraints and lack of interest, leading to a reduced works scope. The road safety campaign was dropped. The preparation of a traffic signs manual was the major output of this component. Eight civil works contracts for the reengineering of accident black spots under ADB’s component were completed within the loan period.

The Executing Agency’s lack of interest and experience in undertaking road safety works and protracted procurement procedures and inadequate coordination between the cofinancing organizations are reasons for the reduced scope of consultants’ work.

Consulting services for preparation of future road projects

Preparation of Third Road Improvement Project for ADB financing

Targets achieved fully, leading to (i) Feasibility Study of Chittagong Port Access Road (Loan 1790-BAN); (ii) additional design and documentation works for procurement of civil works contracts for the corridor improvement component of Loan 1789-BAN(SF); (iii) detailed engineering of the Project’s proposed contracts 7, 9, and 10, which were later dropped, due to fund constraints; and (iv) detailed design, prequalification, and procurement of civil works contracts for Southwest Road Network Development Project (Loan 1708-BAN[SF]).

The scope of consultants’ contracts was expanded through variation orders to include some additional tasks relating to the preparation of the Third Road Improvement Project. The additional expenditure was met through reallocation of loan proceeds from the unallocated loan category.

18 Appendix 2

SUMMARY OF PROJECT COST ($ million)

Component Appraisal Estimate Actual A. Base Cost 1. Land Acquisition and Resettlement 10.40 12.76

2. Civil Works a. Construction (143 km) 131.00 139.27 b. Road Safety Measures 5.00 1.08

3. Consulting Services a. Construction Supervisiona 10.31 11.35 b. Preparation of RIP IIIb 1.50 3.37 c. Road Safety 1.79 2.14

4. Project Administration 1.00 0.00

B. Contingencies 1. Physical 8.04 0.00c

2. Price Escalation 24.96 0.00c Subtotal (A+B) 194.00 168.89

C. Interest During Construction 2.30 1.12 Total 196.30 170.01

km = kilometer, RIP III = Third Road Improvement Project,

a Includes $0.21 million for procurement of a weighing pad. b Includes $0.25 million in grants under TA 2678-BAN. c Included in the costs above.

Appendix 3 19

ANNUAL DISBURSEMENTS ($)

Item of

Expenditure 1997 1998 1999 2000 2001 2002 Total

Civil Works

5,169,413

10,062,175

14,728,835

11,399,007

7,525,890

3,712,543

52,597,864

Consulting Services

— 1,216,945 2,833,122 1,022,764 1,463,938 357,049 6,893,818

Service Charges

— 80,976 244,779 393,141 405,796 — 1,124,593

Total

5,169,413 11,359,995 17,806,736 12,814,913 9,395,624 4,069,593 60,616,275

20 Appendix 4

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

A. Civil Works Procurement

1. Prequalification

2. Procurement

B. Civil Works Implementation ExpectedCompletionDate: Dec '04

C. Supervision Consultant

1. Recruitment

2. Services ExpectedCompletionDate: Dec '04

D. Project Preparation RIPIII

1. Recruitment

2. Services

E. Road Safety Study

1. Recruitment

2. Services

3. Civil Works

As at appraisalAs actual (project)As actual (ADB financed)

Remarks

PROJECT IMPLEMENTATION SCHEDULE

1999 2000 2001 20021996 1997 1998

Appendix 5 21

STATUS OF COMPLIANCE WITH MAJOR LOAN COVENANTS Sl. No.

Covenant

Reference in RRP/Loan Agreement

Status

1. Except as the Asian Development Bank (ADB) may otherwise agree, ADB will not approve award of any ADB-financed civil works contract for national road construction until after (i) the ADB-financed consultant contract for design review and construction supervision is awarded and (ii) all land, buildings, and property rights related to the specific contract are acquired and paid for and the related resettlement plan is implemented by the Government.

Section VI.79(i)(a) of the report and recommendation of the President (RRP)

Complied with.

2. ADB will not approve award of any ADB-financed civil works contract for road safety improvements until after the Nordic Development Fund-financed consultant contract for assisting the Roads and Highways Department (RHD) in related design and construction supervision is awarded.

Section VI.79(i)(b) of RRP

Complied with.

3. RHD will, by 1 July each year during project construction, inform ADB of the following fiscal year’s project-related development budget and will ensure timely and adequate funding.

Section VI.79(i)(c) of RRP

Partly complied with.

4. The Government will include adequate provisions for the Project in the annual development budget allocations, starting from FY1996/97.

Section VI.79(i)(d) of RRP

Complied with.

5. The Government will ensure that people displaced by the Project will not bear any losses in income and employment opportunities or reduction in social and cultural well-being as a consequence of the physical construction of the Project. People who are to be displaced will be compensated for loss of land, housing, crops, and other forms of livelihood that occur as a consequence of the physical construction of the Project. The compensation will be paid prior to commencement of construction activities and in accordance with the Resettlement Action Plan, including ADB’s policy on involuntary resettlement, prepared for the Project as agreed upon by the Government and ADB. The compensation process will be implemented and monitored by RHD’s Resettlement Unit. RHD will, through monthly reports, provide information on the progress of this process to ADB through its Bangladesh Resident Mission, to enable the Bangladesh Resident Mission to verify the information in the field.

Section VI.79(ii)(a) of RRP

Complied with.

6. The Government will ensure that the cost of land acquisition and other resettlement compensation will be included in the annual development budget for RHD in FY1996/97 and FY1997/98.

Section VI.79(ii)(b) of RRP

Complied with.

7. The Government will ensure that upon project completion, RHD will be responsible for operation and maintenance of the Project’s roads and their facilities, through the allocation of adequate funds.

Section VI.79(iii)(a) of RRP

Partly complied with.

8. The Government will, starting from FY1996/97, ensure that maintenance expenditures are increased—taking into account related price increases from FY1995/96 and onward—for RHD-administered national and regional roads, for the purpose of eliminating current shortfalls, compared to the updated requirements described in the Road Master Plan.

Section VI.79(iii)(b) of RRP

Partly complied with.

22 Appendix 5

Sl. No.

Covenant

Reference in RRP/Loan Agreement

Status

9. The Government will ensure that RHD prepares, from FY1996/97, annual maintenance plans for RHD-administered national and regional roads, on the basis of physical measurements of needs, appropriate maintenance standards, economic maintenance intervention levels, and traffic volumes, to ensure the allocation of necessary resources, all in accordance with the system developed under the Road Master Plan and the ongoing official development assistance-financed institutional development component of the World Bank-assisted Second Road Rehabilitation and Maintenance Project. In this connection, appropriate funding, based on action plans to be agreed upon with the Government, will be made available on an annual basis, and ADB will be given an opportunity to comment on the actual annual budgetary allocations, prior to actual implementation of the maintenance program during the succeeding maintenance season.

Section VI.79(iii)(c) of RRP

Partly complied with.

10. The Government will ensure that periodic maintenance on RHD-administered national and regional roads will be carried out entirely by private contractors, starting from FY1997/98.

Section VI.79(iii)(d) of RRP

Complied with.

11. Except as the Government and ADB may otherwise agree, the Government will, starting from FY1998/99, adjust the annual road taxes, consistent with the inflation rate recorded in the Consumer Price Index of Bangladesh.

Section VI.79(iv)(a) of RRP

Complied with.

12. The Government will cause the Bangladesh Road Transport Authority to introduce, starting from FY1997/98, vehicle windscreen color-coded stickers with expiration dates, to indicate due payment of road tax and third-party insurance and passing of the vehicle road fitness and emission control tests.

Section VI.79(iv)(b) of RRP

Complied with.

13. The Government will promulgate, starting from FY1997/98, legislation relating to imposition of sanctions on vehicles without valid stickers.

Section VI.79(iv)(c) of RRP

Complied with.

14. The Government will ensure that the permanent weighbridges and the portable weigh-in-motion scales to be procured under the Project are, apart from pavement design purposes, used for axle load enforcement.

Section VI.79(vi)(a) of RRP

Complied with.

15. The Government will promulgate legislation related to apprehension procedures and fines, prior to FY1997/98.

Section VI.79(vi)(b) of RRP

Not complied with.

16. The Government will ensure that its future investments in the road subsector substantially follow the Road Master Plan’s recommendations.

Section VI.79(vii) of RRP

Complied with.

17. The Borrower shall make available, promptly as needed, the funds, facilities, services, land, and other resources that are required, in addition to the proceeds of the loan, for the carrying out of the Project and for the operation and maintenance of project facilities.

Section 4.02 of the Loan Agreement

Complied with.

18. The Borrower shall make arrangements satisfactory to ADB for insurance of the Project facilities, to such extent and against such risks and in such amounts as shall be consistent with sound practice.

Section 4.05 of the Loan Agreement

Complied with.

19. The Borrower shall (i) maintain separate accounts for the Project; (ii) have such accounts and related financial statements audited annually; (iii) furnish to ADB certified copies of such audited accounts and financial statements and reports of the auditors, in the English language, not later than 12 months after the end of each fiscal year.

Section 4.06(b) of the Loan Agreement

Complied with.

Appendix 5 23

Sl. No.

Covenant

Reference in RRP/Loan Agreement

Status

20. The Borrower shall ensure that project facilities are operated, maintained, and repaired in accordance with sound administrative, financial, engineering, environmental, and operation and maintenance practices.

Section 4.09 of the Loan Agreement

Partly complied with.

24 Appendix 6

DETAILS OF CONSULTING SERVICES

Sl. No.

Component

Appraisal Estimate (Person-Months)

Actual (Person-Months)

A. Construction Supervision Services 1. International Consultant 110 130.64 2. Domestic Consultant 450 609.63 B. Preparation of RIP III 1. International Consultant 25 53.57 2. Domestic Consultant 180 394.84 RIP III = Third Road Improvement Project. Source: Complied by PCR Mission.

Appendix 7 25

ECONOMIC EVALUATION OF THE PROJECT

A. Methodology 1. The Project’s road improvement component aimed at improving about 143 kilometers of national and regional roads stretching from the Jamuna Bridge to 20 kilometers east of Feni, on the Dhaka-Chittagong Highway. The improvement works mainly involved reconstruction with embankment raising. The improvement of ADB-financed road sections (77.47 kilometers) was completed in 2002. The sections improved were (i) Nabinagar-Chandra road (15.85 kilometers), under Contract 4; (ii) Mirpur-Savar section (14.44 kilometers) of National Highway 5, under Contract 5; (iii) Mukti Sarani (Katchpur)-Daudkandi section (28.08 kilometers) of National Highway 1, under Contract 6; and (iv) Feni (Baraierhat)-Wahedpur section (19.16 kilometers) of National Highway 1, under Contract 8. Economic evaluation was undertaken for these completed road sections. 2. Economic evaluation involves a comparison of with and without project situations, for the estimation of benefits and calculation of economic internal rate of return (EIRR), using a discounted cost-benefit analysis. The same methodology adopted during project appraisal was used for this economic evaluation. The parameters involved in the economic evaluation were the investment and maintenance costs, surface roughness (international roughness index [IRI]), vehicle operating cost (VOC), travel time cost (TTC), and accident cost (ACC). Although TTC and ACC were not considered during project appraisal, the subsequent existence of TTC and ACC information and required parameters made it possible to include these during this evaluation. The without project case is the road maintained in previous condition through routine maintenance works aimed at maintaining the surface roughness almost at its previous level. The with project case involves capital and maintenance investment that led to reduced IRI value with reduced VOC and TTC and reduced accidents on the roads. The road sections are parts of National Highway N1, National Highway N5, and Nabinagar-Chandra Regional Highway R505. At the time of appraisal, these roads were in highly deteriorated conditions, with IRI values of about five or more. These high IRI values were the main cause of high VOC, increased TTC, and increased ACC. The optimum use of Jamuna Bridge was not possible, due to these reasons. The implementation of the Project changed this scenario. The completed roads improved significantly vehicle operation, with reduced IRI values resulting in a reduction of VOC, TTC, and ACC on project road sections and optimum use of the Jamuna Bridge. The IRI values envisaged during appraisal for with and without project cases are presented in Table A7.1.

26 Appendix 7

Table A7.1: Pavement Roughness Deterioration

(m/km)

IRI on Road Section Without Project Scenario IRI on All Road Sections With Project Scenario

Year

Contracts 5 & 6 Contract 4 Contract 8 All Paved Sections 1995 4.6 5.0 1996 4.8 5.4 1997 5.1 5.7 1998 5.4 6.1 1999 5.7 6.5 2000 6.1 6.9 4.1 2.2 2001 6.5 7.3 4.3 2.4 2002 6.9 7.8 4.5 2.6 2003 7.3 8.3 4.7 2.8 2004 7.8 8.9 4.9 3.0 2005 8.3 9.5 5.2 2.2 2006 8.9 10.0 5.5 2.4 2007 9.5 10.0 5.8 2.6 2008 10.0 10.0 6.1 2.8 2009 10.0 10.0 6.5 3.0 2010 10.0 10.0 6.9 2.2 2011 10.0 10.0 7.4 2.4 2012 10.0 10.0 7.8 2.6 2013 10.0 10.0 8.4 2.8 2014 10.0 10.0 8.9 3.0 2015 10.0 10.0 9.5 2.2 2016 10.0 10.0 10.0 2.2 2017 10.0 10.0 10.0 2.4 2018 10.0 10.0 10.0 2.6 2019 10.0 10.0 10.0 2.8 2020 10.0 10.0 10.0 3.0

IRI = international roughness index, m/km = meters per kilometer. Source: Appraisal Study

1. Traffic Projection 3. For this project completion report’s preparation, traffic surveys were undertaken in March 2004 on all project road sections, to have the latest picture of vehicle movement on the roads. However, the available historic traffic data were also analyzed on the road sections, to get a clear idea of traffic growth. The recommended traffic growth rates for project road sections are presented in Appendix 8, Table A8.1.

2. Vehicle Operating Cost 4. The economic VOC per kilometer obtained through HDM-4 (Highway Design Model-4) run at different roughness levels are published by the Economics Circle of the Roads and Highways Department, under the institutional development component financed by the Department for International Development, under the Road Rehabilitation and Maintenance Project. A sample of 2002–2003 VOC values used in the analysis is shown in Table A7.2. Results of interviews with bus and truck operators indicate that VOC decreased after road improvement (Table A7.3). The World Bank’s HDM-4 model was calibrated to reflect local conditions, including purchase cost, crew cost, maintenance labor cost, overhead cost, fuel and

Appendix 7 27

lubricant cost, and other parameters. Duties and taxes are charged as the assessable value of the import, which means that the cost, insurance, and freight value is the foreign currency cost converted to taka at the prevailing exchange rate set by the Bangladesh Bank. A number of duties and taxes are charged on the cost, insurance, and freight value. These are set out in the Bangladesh Operative Tariff Schedule issued by the National Board of Revenue. The tariffs on different categories of vehicles are given in Table A7.4. For commodities that are not tradable, a standard conversion factor of 0.8 was used for conversion into economic value.

Table A7.2: Economic Vehicle Operating Costs in Bangladesh by Vehicle Category

(taka per kilometer)

Vehicle Category IRI Medium

Truck Small Truck

Large Bus Minibus Microbus Utility Car

2 10.82 7.94 10.00 5.79 6.09 7.22 5.23 3 10.91 7.98 10.10 5.84 6.12 7.28 5.26 4 11.37 8.24 10.79 6.14 6.35 7.67 5.46 5 11.83 8.60 11.50 6.45 6.61 8.13 5.69 6 12.23 9.10 12.17 6.76 6.89 8.66 5.95 7 12.55 9.65 12.82 7.06 7.20 9.21 6.25 8 12.95 10.23 13.53 7.37 7.55 9.80 6.58 9 13.44 10.81 14.31 7.70 7.93 9.80 6.58

10 14.00 11.39 15.13 8.05 8.32 11.04 7.29 IRI = international roughness index. Source: Roads and Highways Department Road User Cost Annual Report for 2002–2003.

Table A7.3: Decrease in Operating Costs after Project Implementation (Results of Interviews with Bus and Truck Operators)

Bus Truck Responded Positively 79.6% 15.4% Amount of Decrease 7.2% 7.5%

Source: PCR Mission’s interview survey.

Table A7.4: Tariffs Applicable to Representative Vehicles and Tires (%)

Category DS AIT LPF CD SD VAT Medium Truck 2.5 3.0 2.5 5.0 - 15.0 Small Truck 3.7 3.0 2.5 17.0 - 15.0 Large Bus 3.5 3.0 2.5 7.5 - 15.0 Minibus 2.5 3.0 2.5 5.0 - 15.0 Microbus 2.7 3.0 2.5 40.0 - 16.0 Utility Vehicle (jeep) 2.4 3.0 2.5 35.5 26.0 26.0 Car 3.7 3.0 2.5 34.0 - 16.0

AIT = advance income tax, CD = customs duties, DS = development surcharge, SD = supplementary duties, VAT = value-added tax. Source: Roads and Highways Department Road User Cost Annual Report, 2002–2003.

28 Appendix 7

3. Travel Time Cost

5. Passenger time costs and crew costs are inversely proportional to travel speed. The benefit therefore can be simply calculated given estimates of speed in the with and without project cases. The Economics Circle of the Roads and Highways Department publishes travel time cost (TTC) data every year. TTC is an important component of road user costs. The concept of TTC is based on the premise that time spent traveling has an opportunity cost and could be used in an alternative activity that also produces or may produce some significant utility. This report valued 100% for work time and 30% for nonwork time as part of the average wage approach. The TTC data is shown in Table A7.5. Moreover, an operator interview survey was carried out to find timesavings, if any, that resulted from project implementation. The survey’s results indicate that a large amount of time is being saved after road improvement. Survey results are presented in Table A7.6. The survey results also indicate that about 41% of operators surveyed changed their operation by adding more trips after road improvement.

Table A7.5: Recommended Financial and Economic Travel Time Cost (National Average) for 2002–2003

(taka per hour)

Financial Economic Vehicle Category

Occupancy Number TTC per

Passenger TTC per Vehicle

TTC per Passenger

TTC per Vehicle

All Buses

40.7

18.3

745.3

14.7

596.2

Microbus

8.0

29.1

245.0

23.3

196.0

Car or Utility

4.0

32.9

118.6

29.0

116.0

Motor Cycle

1.0

36.6

38.3

29.3

30.7

TTC = travel time cost. Source: Roads and Highways Department Road User Cost Annual Report for 2002–2003.

Table A7.6: Percent of Time Saved from Road Improvement (Results of Interviews with Bus and Truck Operators)

Road Section

Bus Truck

Nabinagar-Chandra (Contract 4)

39.8

22.8

Mirpur-Savar (Contract 5)

37.6

23.3

Mukti Sarani-Daudkandi (Contract 6)

22.3

17.1

Baraierhat-Wahedpur (Contract 8)

20.6

16.3

Source: PCR Mission’s interview survey.

Appendix 7 29

4. Accident Costs 6. Although a considerable volume of research worldwide has been carried out to prepare a methodology for costing road accidents, no consensus has yet been reached. Based on the methodology developed by the United Kingdom’s Department for International Cooperation, the Economics Circle of the Roads and Highways Department developed a set of accident costs that could be used in a highway economic evaluation. The accident costs are shown in Table A7.7. The data received by the Project Completion Report Mission during interviews with bus and truck operators indicate that in 2003 only eight accidents, resulting in six deaths, occurred on project road sections, and this is 23% less than the national average of 44 deaths per 10,000 vehicles.

Table A7.7: Accident Costs by Severity Type and Cost Component (Taka ‘000)

Component

Fatal Grievous Simple PDO

Lost Output

911.2

10.8

0.7

0.0

Medical

9.1

10.2

1.1

0.0

Human Cost

546.7

6.5

0.4

0.0

Vehicle Damage

122.3

91.7

61.1

3.1

Administrative

1.2

1.2

1.2

1.2

Total

1,590.5

120.4

64.5

4.3

Source: Roads and Highways Department Road User Cost Annual Report for 2002–2003. 5. Project Capital Costs

7. The contract-related construction costs of project road sections are presented in Table A7.8. These are financial costs in current prices in the year of expenditure. However, the economic price reflects the true value (i.e., the real worth) as well as the scarcity premium of the resource to the economy. To arrive at the economic cost, a standard conversion factor of 0.8 was used.

Table A7.8: Actual Construction Cost (taka)

Project Road Section Construction

Cost Nabinagar-Chandra (Contract 4) 421,520,204 Mirpur-Savar (Contract 5)

1,011,428,470

Katchpur-Daudkandi (Contract 6)

1,369,119,226

Barierhat-Wahedpur (Contract 8)

625,858,085

30 Appendix 7

6. Maintenance Costs

8. In the with project case, costs of routine and periodic maintenance were estimated on the basis of the real situation of Bangladesh. Periodic maintenance was considered for a 5-year duration for all cases. The maintenance cost was collected from the Roads and Highways Department maintenance plan. The annual routine maintenance (including pothole, crack, side works, and drainage repair) cost is Tk50,000 per kilometer and the periodic maintenance (overlay) cost is Tk550 per square meter.

7. Discount Rate 9. For calculation of the EIRR, the discount rate used is 12%. Financial Internal Rate of Return (FIRR) was not calculated, as this is inappropriate for this type of road project. 8. Economic Evaluation

10. Economic evaluation for the four project road sections was undertaken using the parameters mentioned. The EIRR was calculated for 20 years, which is assumed to be the useful economic life of the improved roads. EIRR was calculated for all ADB-financed project road sections and is presented in the Table A7.9.

Table A7.9: Results of Economic Reevaluation of Project Road Sections

Zone

Round/

Road

Length

ADT

IRI EIRR (%)

Link Section At Appraisal

Present At Appraisal

Present

Dhaka R505/217 Nabinagar-Chandra

15.85 11,097 5.40 2.22 26.30 54.52

Dhaka N5/32 Mirpur-Savar

14.44 19,986 4.80 2.13 34.00 22.15

Dhaka N1/2 Katchpur-Daudkandi

28.08 18,485 4.80 3.27 38.40 18.99

Comilla N1/5 Feni-Wahedpur

19.16 12,393 0.00 2.85 28.40 60.13

ADT = annual daily traffic, EIRR = economic internal rate of return, IRI = international roughness index. Source: PCR Mission’s findings. 11. EIRR values for the Nabinagar-Chandra and Feni-Wahedpur sections are quite high. This is justified because the capital investment for the Nabinagar-Chandra section appears to be low, and the road after completion attracted huge traffic to and from Dhaka, heading toward and coming from the Jamuna Bridge. This is because the Joydebpur-Kaliakoir section of the JBIC-financed component is still under construction, and all vehicles are using Dhaka-Ashulia-Chandra route. The capital investment of Feni-Wahedpur section also is comparatively low, and VOC, TTC, and ACC savings of a large fleet of vehicles using Chittagong port resulted in high EIRR value. The EIRR values of the Mirpur-Savar and Katchpur-Daudkandi sections dropped, due to an increase of capital investment in these sections. The cost-benefit stream for the Mirpur-Savar project road section is presented in Table A7.10 as an example.

Appendix 7 31

Table A7.10: Economic Cost-Benefit Stream of Mirpur-Savar Road Section (Taka ‘000)

Year

Capital Investment

Maintenance Cost

Total

VOC Savings

TTC Savings

Net Discounted

Benefits 1998 42,803 42,803 (42,803) 1999 369,350 369,350 (369,350) 2000 399,599 399,599 (399,599) 2001 14,444 14,444 142,810 381 141,747 2002 14,444 14,444 164,994 406 146,235 2003 14,444 14,444 190,625 433 150,867 2004 14,444 14,444 370,828 486 262,850 2005 116,271 116,271 423,756 518 153,363 2006 14,444 14,444 484,239 549 273,638 2007 14,444 14,444 553,355 582 279,197 2008 14,444 14,444 632,337 617 284,872 2009 14,444 14,444 722,594 653 290,663 2010 116,271 116,271 825,735 693 181,747 2011 14,444 14,444 943,599 732 302,605 2012 14,444 14,444 1,078,287 773 308,760 2013 14,444 14,444 1,232,203 815 315,041 2014 14,444 14,444 1,408,091 860 321,451 2015 116,271 116,271 1,609,087 907 213,166 2016 14,444 14,444 1,838,777 957 334,668 2017 14,444 14,444 2,101,256 1,008 341,481 2018 14,444 14,444 2,401,205 1,062 348,433 2019 14,444 14,444 2,743,973 1,119 355,527 2020 116,271 116,271 3,135,675 1,179 247,939

Economic Internal Rate of Return 22.15% TTC = travel time cost, VOC = vehicle operating cost. Source: PCR Mission findings.

9. Change in Source of Income and Stabilization of People’s Living 12. Transport provision and economic development have direct and indirect positive links, including multiplier effects. Improved under the Project, good roads offered low vehicle operating costs and fewer accidents. They also expanded local and regional markets through supporting improved transport services. The indirect effects stem from the employment created in road infrastructure construction and the jobs associated with operating transport services. As part of this, for instance, Zirani Bazaar was the only business place on the Nabinagar-Chandra road section, and an earth road connected the market with this road. The earth road was improved to a feeder road, and about 500 individuals are now pulling rickshas on it. At the same time, new bus operators opened their services. After the road section’s improvement, Local Government Engineering Department (LGED) constructed additional feeder B-type roads in the area, and, consequently, new bazaars, such as Dehara, Sreepur, Ganakbari, Bipila, Mamtaz Nagar, and Palash Bari, were developed.

10. Rural-Urban Links and Industrial Development 13. Improved conditions on project road sections initiated many business opportunities. For instance, gas stations, grocery shops, fish and agricultural markets, furniture shops, timber businesses, and others developed at many locations adjacent to improved roads. New feeder roads created more urban-rural commuters, and new factories and business enterprises were proposed, as can be seen from the nameplates of landowners on both sides of the road.

32 Appendix 8

TRAFFIC VOLUME AND ROAD SURFACE CONDITION ON THE PROJECT ROADS 1. After the completion of Jamuna Bridge, a large number of road reconstruction, improvement, widening, and overlay works were undertaken in the eastern part of the country. These road sections form part of the national, regional, and feeder road networks under the Roads and Highways Department (RHD) and Local Government Engineering Department. This resulted in high traffic volume on the roads, from diversion and new generation and growing economic activities in the entire region. However, the growth of nonmotorized traffic was found to be faster than motorized traffic in Bangladesh. The volume of motorized traffic and its axle loads, as opposed to that of nonmotorized traffic, is very crucial for road geometry, pavement design, and road maintenance. RHD is planning for the segregation of lanes for nonmotorized traffic and motorized traffic and also access control over the whole national road network, to reduce traffic congestion and road accidents.

2. For preparation of the project completion report, traffic data were collected for 1994–1995, 1998–1999, and 2001. Present traffic data on all Asian Development Bank-financed road sections were counted in March 2004. These traffic data were summarized and analyzed, to find trends for economic reevaluation. Results show that the traffic growth rate in the historic analysis were not uniform over the longer term, and suppressed demand over several years may have suddenly been released when road conditions were improved.

3. The ADT (average daily traffic) of motorized vehicles (excluding two- and three-wheeled vehicles) on Nabinagar-Chandra (Contract 4) in 1994–1995, 1998–1999, 2001, and 2004 was 1,916; 3,281; 8,934; and 11,761, respectively. Traffic growth was found to be 27.60% during 1999–2004. There may be two reasons behind the significant increase of traffic after 1999: (i) the addition of diversion traffic from Dhaka-Aricha, bound for northern Bangladesh, and (ii) the reconstruction of the Joydebpur-Kaliakoir section of Dhaka-Tangail road, which forced all northbound vehicles to use the Uttara-Ashulia-Chandra route. However, traffic growth was found to be only 7.49% during 2001–2004. This may be considered normal growth for the next few years.

4. The ADT of motorized vehicles on Mirpur-Savar (Contract 5) in 1994–1995, 1998–1999, 2001, and 2004 was 10,497; 9,103; 12,449; and 20,537, respectively. The decrease in 1998–1999 was due to the severe flood in 1998 and road improvement works that were being implemented at that time, which caused vehicles to divert toward Ashulia road. Although the traffic growth found during 1999–2004 was 17.03%, historic growth accounts for 6.90% on this section of road.

5. Mukti Sarani (Katchpur)-Daudkandi (Contract 6) is a part of the Dhaka-Chittagong Highway. The ADT for motorized vehicles in 1994–1995, 1998–1999, 2001, and 2004 were 8,590; 8,461; 13,444; and 16,701, respectively. Land use along project road sections is changing toward more industrial use, from the traditional agricultural use and swamps. This indicates that more traffic is catering the needs of industries. Therefore, after completion of the Asian Development Bank-financed improvement of an existing two-lane road in late 2001, the Government began to widen the road to four lanes, which will be completed in December 2004. Analysis shows that this section of the Dhaka-Chittagong Highway had stable traffic growth of 4.38% during 1999–2004.

6. The Feni (Baraierhat)-Wahedpur road section (Contract 8) is a new location of industries and warehouses. The traffic volumes in 1994–1995, 1998–1999, 2001, and 2004 were 4,736;

Appendix 8 33

8,100; 11,491; and 12,393, respectively. Traffic growth was faster during 1999–2004 (8.88%) and slowed during 2001–2004 (2.50%). This indicates that the road is going to be saturated in the near future.

7. Vehicle registration data collected from the Bangladesh Road Transport Authority showed that the annual average growth rates of registered cars and/or taxis, jeeps and/or microbuses, buses, minibuses, trucks, auto rickshas and/or tempos and motorcycles were 9.09%, 6.81%, 1.74%, 5.72%, 5.67%, 7.31%, and 7.20%, respectively, during 1995–2001, and overall growth was 7.34%.

8. Traffic growth rates on project road sections, as obtained from the analysis of traffic data, are presented in Table A8.1. A wide variation of traffic growth for different sections was found. However, RHD, on the basis of the traffic data collected every year, recommends a 7.8% average growth rate for Bangladesh.

Table A8.1: Traffic Growth Forecast (%)

Year

Road Section 1999 2005 2010 2015 Nabinagar-Chandra

7.5

6.6

5.8

5.5

Mirpur-Savar

6.5

5.8

5.2

5.0

Mukti Sarani (Katchpur)-Daudkandi

7.0

6.2

5.8

5.5

Feni-Wahedpur

6.6

5.5

4.7

4.5

Source: PCR Mission’s findings. Traffic and other related data collected and used during project completion report preparation are presented in the following tables.

Table A8.2: Adopted Average Daily Traffic on Project Road Sections Zone

Round/Link

From

To

Length (km)

ADT (no. of vehicles)

IRI

Dhaka

R505/217

Nabinagar

Chandra

15.85

11,097

2.22

Dhaka

N5/32

Mirpur

Savar

14.44

19,986

2.13

Dhaka

N1/2

Katchpur

Daudkandi

28.08

18,485

3.27

Comilla

N1/5

Feni

Wahedpur

18.88

12,393

2.85

ADT = average daily traffic, IRI = international roughness index, km = kilometer, no. = number. Source: Roads and Highways Department.

34 Appendix 8

Table A8.3: Daily Traffic at Jamuna Multipurpose Bridge

(February 2004)

Vehicle Category Location Name Heavy

Truck Medium Truck

Small Truck

Large Bus

Minibus

Light Vehicle

Motor-cycle

Total

East Plaza 20 784 106 871 43 360 71 2,255 West Plaza 35 867 115 949 52 474 79 2,561 Total 55 1,651 221 1,821 85 834 150 4,816

Note: Jamuna Bridge traffic increased faster than envisaged during project appraisal.

Source: Jamuna Multipurpose Bridge Authority, February 2004.

Table A8.4: 1994–1995 Traffic Count Data

Vehicle Category Location Name Truck Bus Light Vehicle

Total

Nabinagar-Chandra (Contract 4) 770 750 396 1,916 Mirpur-Savar (Contract 5) 5,991 3,032 1,474 10,497 Mukti Sarani-Daudkandi (Contract 6) 3,332 3,629 1,629 8,590 Baraierhat-Wahedpur (Contract 8) 2,696 1,578 462 4,736

Source: Highway Design Report, 1996.

Table A8.5: 1998–1999 Traffic Count Data

Vehicle Category Location Name Truck Bus Light Vehicle

Total

Nabinagar-Chandra (Contract 4)

1,107

1,355

819

3,281

Mirpur-Savar (Contract 5)

3,893

3,278

1,932

9,103

Mukti Sarani-Daudkandi (Contract 6)

3,767

3,350

1,344

8,461

Baraierhat-Wahedpur (Contract 8)

5,668

1,565

867

8,100

Source: Jamuna Bridge Access Road Project, 1998–1999.

Table A8.6: 2001 Traffic Count Data

Vehicle Category Location Name Truck Bus Light Vehicle

Total

Nabinagar-Chandra (Contract 4)

2,497

2,697

3,740

8,934

Mirpur-Savar (Contract 5)

5,186

4,143

3,120

12,449

Mukti Sarani-Daudkandi (Contract 6)

5,378

4,438

3,628

13,444

Baraierhat-Wahedpur (Contract 8)

7,554

2,581

1,356

11,491

Source: Jamuna Bridge Access Roads Project, 2001.

Appendix 8 35

Table A8.7: Traffic Volume at Jamuna Multipurpose Bridge in 2004 (number of vehicles)

Vehicle Category

Location Name Heavy Truck

Medium Truck

Small Truck

Large Bus

Minibus

Light Vehicle

Motor- cycle

Total

East Plaza 20 784 106 871 43 360 71 2,255 West Plaza 35 867 115 949 52 474 79 2,561

Total 55 1,651 221 1,821 85 834 150 4,816 Source: Jamuna Multipurpose Bridge Authority, February 2004.

Table A8.8: 2004 Traffic Count Data on Project Road Sections (number of vehicles)

Vehicle Category

Location Name Heavy Truck

Medium Truck

Small Truck

Large Bus

Minibus Light Vehicle

Motor-cycle

Total

Nabinagar-Chandra (Contract 4)

51 3,472 881 2,816 1,307 2,570 664 11,761

Mirpur-Savar (Contract 5)

105 6,007 2,298 3,293 2,782 5,501 551 20,537

Mukti Sarani-Daudkandi (Contract 6)

253 7,248 867 2,836 1,885 3,506 106 16,701

Baraierhat-Wahedpur (Contract 8)

309 5,685 374 1,467 762 3,073 723 12,393

Source: Project Completion Report Mission’s March 2004 count.

Table A8.9: Comparison of Traffic Projection Data

Annual Average Daily Traffic Location Name

Year At Appraisal At PCR

Nabinagar-Chandra (Contract 4)

1995 2000 2001 2004 2005 2010 2019

3,067 4,322

- - -

8,659 16,127

- -

8,934 11,761 12,443 17,258 28,342

Mirpur-Savar (Contract 5)

1995 2000 2001 2004 2005 2010 2019

11,725 15,430

- - -

29,163 39,749

- -

12,449 20,537 21,810 28,804 45,111

Mukti Sarani-Daudkandi (Contract 6)

1995 2000 2001 2004 2005 2010

10,336 15,051

- - -

29,925

- -

13,444 16,701 17,620 23,960

36 Appendix 8

2019 39,400 39,348 Baraierhat-Wahedpur (Contract 8)

1995 2000 2001 2004 2005 2010 2019

5,766 8,212

- - -

16,202 18,745

- -

11,491 12,393 13,211 17,088 27,014

— = no data available. PCR = project completion report. Source

Table A8.10: Vehicle Use

Vehicle Category

Usea

Bus

85%

Truck

69%

a Hours driven as a percentage of hours at work. Source: Project Completion Report Mission interview, 2004.

Table A8.11: Operation Change

Response

Bus (%)

Change Operation

40.9

More Trips

100.0

Source: Project Completion Report Mission interview, 2004.

Table A8.12: Accident Information on Project Roads in 2003

Response

Total

Number of Accidents

8

Deaths

6

Number of Vehicles Involved

1,771

Source: Project Completion Report Mission survey,