Daw.uit of

The World BankFOR OFmFCIAL USE ONLY

Report No. P-4507-BD

REPORT AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED CREDIT

IN AN AMOUNT OF SDR 16.6 MILLION

TO THE PEOPLE'S REPUBLIC OF BANGLADESH

FOR A

FOURTH FLOOD CONTROL AND DRAINAGE PROJECT

April 9, 1987

This document has a restricted distribution and may be used by recipients only in the performanceof their ofiacil duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQOIVALENTS

The external value of the Bangladesh Taka (Tk) is fixed in relation to abasket of reference currencies, with the US dollar serving as interventioncurrency. On November 20, 1986 the official exchange rate was set atTk 30.77 buying and Tk 30.83 selling per US dollar.

Weights and Measures

Metric System

GLOSSARY

Aman - Rice planted before or during the monsoon and harvestedin November or December.

Aus - Rice planted during February or March and harve2ted duringJune or July.

Boro - Rice transplanted in December to January and harvested inApril to May.

Beel - Low-lying area subject to flooding by rain or river water.

Khal - Natural channel.

District - Administrative unit in the charge of a Deputy Commissionercomprising a number of upazilas.

Upazila - Smallest administrative unit of the Local Government.

ABBREVIATIONS USED

ADP - Annual Development ProgramBADC - Bangladesh Agricultural Development CorporationBARC - Bangladesh Agriculture Research CouncilBRDB - Bangladesh Rural Development BoardBWDB - Bangladesh Water Development BoardMOA - Ministry of Agriculture and ForestsMOF - Ministry of Fisheries and LivestockMOI - Ministry of Irrigation, Water Development and Flood ControlPMU - Project Management UnitUNV - United Nations Volunteer

FISCAL YEAR (FY)

July 1 - June 30

FOR OMCIL USE ONLY

B4N6LADB8H

FOURTH FLOOD CONTROL AND DRAINAGE PROJECT

Credit and Project Summary

: The Government of the People's Republic of Bangladesh

Amount : SDR 16.6 (US$20.0 million equivalent)

Termg : Standard

ProiectDescription : The main objectives of the project are: (a) to protect

against crop losses, loss of life and property damagedue to floods; (b) to enhance the physical environmentto allow farmers to adopt improved agriculturalpractices; and (c) to strengthen the Bangladesh WaterDevelopment Board (BWDB). The project would cover anarea of 63,100 ha under flood control and drainage.About 34,500 farm families or about 210,000 people wouldbenefit. The project would include: (i) theconstruction and rehabilitation of embankments, watercontrol structures, drainage channels, and theconstruction and upgrading of roads; (ii) institutionalsupport to BiDB and the Ministry of Irrigation, WaterDevelopment and Flood Control; and (iii) preparation ofprograms for further development of crops, livestock andfisheries within the project area and three adjacentpolders.

Risks : A possible risk facing the project would be delays inland acquisition and preparation of engineering designs.Arrangements have been incorporated into the projectdesign to minimize this risk through timely provision offunds for land acquisition and technical assistance andtraining for BiDB staff to strengthen theirimplementation capacity. A furthcr possible risk wouldbe the potential decrease in production in naturalfisheries within the project area. The project wouldprovide for appropriate design of engineering works tominimize this effect, and for preparation of a follow-updevelopment program aimed at increasing crop, livestock,and fish production in the project areas.

This document has a restricted distribution and may be used by recipients only in the perfomanceof their official duties. Its contents may not otherwise be disclosed without World Bank authoriztion.

URoL2ett EstiiatedCogt& I/ Local Foreign

Cost B agj bjll-VS$ Million Equivelent-

Land Acquisition 3.7 - 3.7

Civil Works 10.8 2.0 12.8

Equipment 0.4 0.4 0.8

Surveys & Investigations 0.1 - 0.1

Studies 0.3 0.2 0.5

Design & Implementation Monitoring 0.4 0.5 0.9

Engineering & Administration 2.1 - 2.1

Technical Assistance & Studies 0.4 0.5 0.9

Operation & Maintenance 0 A 0.6Total Base Costs 18.8 3.6 22.4

Physical Contingencies 1.1 0.2 1.3

Price Contingencies 30.8 3.8

Total Costs 22.9 27.5

LI Includes about VS$0.8 million in duties and taxes.

IiRmL PlanLocal ForeignCost la.^hanae I;#j

-US$ Million Eqnivalent-

0OB 6.4 - 6.4

IDA 16.0 4.0 20.0

BBC 0.5 0AL 1.1

Total 4.6 27.5

Xstimated Disbursemeut of IDA Credit:

FY87 PY88 ZY89 nY90 .1Y91 mn2 U23_

_--___--__- - U-S--- $ Million--

Annual 0.4 1.8 5.4 6.8 5.2 0.2 0.2

Cumulative 0.4 2.2 7.6 14.4 19.6 19.8 20.0

lAte of jutga: 182

INTERNATIONAL DEVELOPMENT ASSOCIATION

REPORT AND RECOMKENDATION OF THE PRESIDENTTO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT

TO TEE PEOPLE'S REPUBLIC OF BANGLADESH FOR AFOURTH FLOOD CONTROL AND DRAINAGE PROJdCT

1. I submit the folltwing report and recommendation for a proposeddevelopment credit to the People's Republic of Bangladesh for SDR 16.6 mil-lion (US$20.0 million equivalent) on standard IDA terms to help finance aFourth Flood Control and Drainage project. The EEC would provide parallelfinancing in the form of a grjqnt of US$1.1 million equivalent.

PART I - THE ECONOMY

Introduction

1. A Country Economic Report, "Bangladesh: Promoting Higher Growth andHuman Development' (6616-BD dated March 10, 1987) was distributed to theExecutive Directors on March 16, 1987. An Economic Indicators Table isattached.

Background

2. Bangladesh has a very high population density, limited naturalresources and widespread poverty. Annual per capita income is currently onlyabout $150; its continued high rate of population growth remains a majorconstraint on development.

3. Agriculture is the mainstay of the economy, accounting "or about halfof GDP and three quarters of empluy-:ent and exports. Despite good progressin agriculture, food production remains vulnerable to natural disasters, andthe country continues to require annual foodgrain imports of about one tenthof total consumption. In addition, agriculture has not been able to fullyabsorb the rapidly growing labor force, nor to generate adequate foreignexchange earnings. Therefore, growth in industry, which accounts for about10 percent of GDP, and expansion in labor-intensive exports have becomeimportant development objectives. However, Bangladesh's labor force islargely unskilled and lacks the education, health and nutrition necessaryfor this transition. The adult literacy rate is only about 26M, and percapita public expenditure on education is among the lowest in the world.Other constraints on industrial development include weak infrastructure(power, transportation), inefficient public enterprises, restrictive tradeand payments policies and a weak domestic financial system.

4. The economy is also characterized by very low savings, which in partreflects the low level of incomes, and by a large structural payments gap.National savings, which have averaged about 13X of GDP in recent years,

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finance less than half of total investment. Export earnings cover only onethird of the import bill, with raw jute and jute goods still accounting forover half of total merchandise exports. The capacity to finance imports canbe severely affected by external factors (e.g., falling jute prices, declin-ing remittances) largely beyond the Government's control. Inadequate growthin domestic resources also seriously constrains the financing of key publicinvestments as well as the operation and maintenance of existing assets.

5. Despite these constraints and repeated disruptions caused by naturaldisasters, Bangladesh has made significant progress in the 1980s. Notably,policies designed to strengthen the agricultural, industrial, and exportsectors have been adopted, permitting the economy to grow by about 4% peryear during the Second Five-Year Plan (FY81-FY85).1/ Foodgrain productiongrowth averaged 3.5% per year during the same period despite adverse weatherconditions; this was faster than in the 1970s and significantly above therate of population growth. Industrial output, which stagnated in the early1980s, has rebounded, led by efficient import substitution and exportoriented, labor-intensive activities. Non-traditional exports have grown onaverage by over 20% per year in the 1980s, and development of domestic com-mercial energy supplies, especially natural gas, has increased rapidly,enabling relatively high growth in the power and fertilizer sectors andsignificant import substitution of petroleum products.

Recent Economic Developments

6. The Government has continued to make progress during FY86 and FY87towards creating a stable and undistorted economic environment. Monetaryexpansion has been brought under control, and in response to prudent demandmanagement, the balance of payments and budget deficits have been broughtdown to manageable levels and the rate of inflation has fallen to about 10%.The official exchange rate has been adjusted frequently in small steps toimprove and maintain competitiveness; the real effective exchange ratedepreciated by 12% in FY86, although a small appreciation of 4% occurred inthe first six months of FY87. In addition, the authorities have expanded theshare of the transactions conducted at the (free) secondary market rate, andthe gap between the official and secondary exchange rate has narrowed from15% in FY85 to an expected 7% in FY87.

7. Interest rates continue to be maintained at positive real levels,and while there is a need to increase the flexibility of the interest ratestructure, their general levels are sufficient to encourage savings and theappropriate allocation of loanable funds. Agricultural pricing policies arealso more efficient than in many other countries. For the most part, domes-tic farmgate prices reflect international prices, providing appropriate

1/ Almost all data in Bangladesh refer to the financial year (PY) whichruns from July 1 to June 30.

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signaLs to farmers. Finally, trade and industrial policies (tariffs, quotas,restrictions and licenses) have been improved markedly since 1982, but espe-cially in FY86 and FY87. However, these improvements are only the first stepin a phased program, and distortions in the trade system, especially thosebrought about by high and variable tariffs, are still excessive.

8. The last two years have also witnessed some disappointments. OverallGDP growth in FY86 was 3.91, lower than the previous two years and well belowthe Third Five-Year Plan (July 1985-June 1990) goal of 5.41. Industrialexpansion of only 1X in FY86 was well below the 9% annual rate of the pre-vious two years, and the agricultural sector appears to be losing its growthmomentum; foodgrain produccion, fertilizer consumption, agriculture creditand investment in irrigation equipment all fell in FY86 for the first time inmany years. In addition, the deterioration in credit recovery rates for bothagricultural and iv*ustrial loans permitted serious resource misallocationand harsh inequities. Aware of the seriousness of this situation, theGovernment has recently taken strong steps to restore financial discipline,and data for the July 1986-February 1987 period show an encouragingimprovement.

Development Stratel!

9. The alleviation of poverty remains the cornerstone of theGovc-nment's development strategy. In the first ten years of Independence(1972-i081), the proportion of the population in extreme poverty (thoseunable to afford enough food to live a reasonably active life) rose from 431to 501. Real wages fell, and the quality of the diet worsened. Since 1982,this deterioration appears to have been arrested. More food has been madeavailable to lower income groups, partly through the rapid expansion ofFood-for-Work and Vulnerable Group Feeding programs, and real agriculturalwages have risen, recovering to their pre-Liberation levels in 1986 for thefirst time. The incidence of poverty appears to have declined slightly,although the absolute number of poor has continued to increase and the mag-nitude of poverty remains overwhelming.

10. The Government has recognized that sustaining and extending thesemodest gains in poverty alleviation will require progress on two fronts.First, overall economic growth must be raised, and second, increased emphasismust be given to human development programs and special interventions to aidthose who tend to be by-passed by overall economic growth.

11. The Government's Third Five-Year Plan seeks to raise the GDP growthrate to over 5% per year. This will require raising both investment andsavings as a proportion of CDP by about 2 percentage points each year overthe five-year period and increasing the efficiency of investment. TheGovernment's policy priorities were described in its Policy Framework Paper,

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discussed by the Committee of the Whole on January 29, 1987.1/ Six areas ofparticular emphasis were described:

- restoring the momentum of growth to the agricultural sectorthrough improved service delivery;

- extending the process of industrial reform initiated underthe New Industrial Policy through deregulation, tradeliberalization, privatization and promotion of non-traditionalexports;

- ensuring international competitiveness and balance ofpayments stability through flexible exchange rate managementand prudent borrowing policies;

- strengthening the domestic financial system throughrehabilitation of the Development Finance Institutions, sternaction against defaulters and the gradual establishment ofa more autonomous, accountable banking system;

- mobilizing additional public revenue through an enhancedtax effort, subsidy reductions and public pricing policies; and

- improving the efficiency of public expenditure through expandedoperation and maintenance allocations, stricter evaluation ofinvestment projects and improved project implementationcapacity to use available external assistance more effectively.

12. Overall economic growth, even if over 5% per year, will be insuffi-cient to ensure adequate alleviation of poverty. Special interventions toprovide economic opportunities to the most vulnerable, including the landlessand women, are a necessary complement to sound economic management. A numberof innovative approaches involving the provision of credit, functional train-ing and market information to groups of poor men and women have recentlyyielded encouraging results. Non-Governmental Organizations are playing anespecially important role in this regard, and the Government is currentlyexploring the scope for improved partnership with the NGOs in the expansionof these programs.

13. The Third Plan also gives a higher priority to human developmentprograms than in the past. Health and education indicators remain unaccep-tably low, and performance in Bangladesh continues to compare unfavorablywith other countries at a similar stage of development. Child and infantmortality rates, for example, are twice the average rates in low-incomecountries, literacy rates are among the lowest in the world, the populationper nurse is still over three times the average in low-income countries in

1/ See "Bangladesh: Policy Framework Paper for the Period July 1986- June1989" dated January 15, 1987 (IDA/SecM87-12).

Asia and the Pacific, and easily avoidable diseases still account for asubstantial proportion of deaths.

14. Assisted by IDA and other donors, the Government is giving a highpriority to both expanding the coverage and improving the quality of humandevelopment programs. In health and family planning, emphasis needs to begiven to improving internal efficiency and program management, strengtheningmother and child health care, improving coverage in urban areas and harness-ing the unique strengths of the IGOs. In education, further efforts must bemade to reduce wastage and expand non-formal education opportunities.

PART II - BANK GROUP OPERATIONS IN BANGLADESH

15. Cumulative Bank Group commitments to Bangladesh total US$3,689.89million. This figure includes reactivation of eleven credits (US$154.41million) made to Pakistan before 1971 as well as a consolidation loan(US$54.90 million) and a consolidation credit (US$37.45 million) approved in1975 to cover liabilities arising from projects completed prior toindependence. The Bank has approved 96 new credits since Bangladesh became amember in 1972. Of the total IDA commitments, approximately 201 have beenfor agriculture, irrigation and rural development, 91 for industry, 171 forpower and energy, 61 for transportation and telecommunications, 81 for educa-tion and technical assistance, 31 for population control, 31 for urbaninfrastructure, and 34X for imports program support. Since Bangladesh becamea member of IFC in 1976, five investments have been approved.

16. IDA chairs the annual Bangladesh Aid Group meeting which provides aforum for donor consultation, and IDA's Resident Representative chairsregularly scheduled donor meetings in Dhaka to exchange views on policyissues, project implementation and aid coordination. In November 1986, IDAchaired a special meeting of donors and Government representattives, hostedby the Federal Republic of Germany, to review programs to assist the ruralpoor in Bangladesh.

17. IDA's country assistance strategy is designed to support the ThirdPlan's priority development objectives (para. 11). IDA lending hasemphasized agriculture, with particular importance attached to increasingfood production by augmenting the supply of essential inputs such as irriga-tion equipment, fertilizer and improved seeds, the development of extensionservices, research programs and rural cooperatives, the provision of agricul-tural credit and the promotion of input and output pricing policies thatallow adequate incentives to farmers to increase production. IDA has alsosupported the Government's efforts to encourage greater private sector par-ticipation in the supply and distribution of agricultural inputs. Finally,IDA's lending program has promoted agricultural diversification throughincreased production of fish and forestry products.

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18. IDA assistance to Bangladesh's industrial sector is intended toenhance the sector's capacity to contribute to a higher, sustained level ofeconomic growth, provide productive employment for a rapidly growing workforce and improve the country's external trade and payments position on asustained basis. IDA has assisted Bangladesh's industrial sector throughprogram credits (para. 23) as well as specific projects to increase fer-tilizer production, rehabilitate the jute and textil a industries, strengthendevelopment finance institutions and promote small-scale industries. Aproposed Industrial Sector Credit, scheduled for Board presentation in lateFY87, would constitute the first of a series of policy-based credits intendedto support industrial and trade policy reforms, export promotion efforts,enhancement of public enterprises efficiency and financial sector reforms.This Credit would also provide a policy framework for future industrialcredits and specific industrial investment projects.

19. IDA's power and gas lending has been designed to expand the use ofnatural gas in substitution for imported oil, promote conservation and moreefficient energy use and encourage further gas and oil exploration. IDA isalso financing projects to expand the country's power generation and trans-mission capabilities and rural electrification system. Recognizing thecritical shortages in traditional fuels, IDA is financing investments inforestry to increase the supply of fuelwood.

20. IDA has supported projects to improve the inland water transportsystem as well as the road network. Bangladesh's road network is extensive,but the roads are in poor condition and inadequately maintained. IDA'sfuture transport lending will concentrate mainly on supporting theGovernment's programs to rehabilitate deteriorated roads and to improvemaintenance standards, techniques and expenditure levels.

21. In the education sector, IDA's lending strategy focuses on primaryeducation and skills development. Lending for primary education supports thenational goals of achieving universal primary education, reducing illiteracy,expanding access to education and upgrading quality. Projects for vocationaland technical education promote the training of craftsmen, technicians andengineers.

22. To help alleviate the severe economic and social pressures created bythe extremely high population density and the continuing population increase,IDA and other donors are assisting the Government in implementing acceleratedfamily planning and maternal and child health care programs. Bangladesh'surban population is expected to increase from about 16-18 million in 1985 tobetween 35-40 million by the year 2000. IDA is already financing water andsanitation improvements in Chittagong and Dhaka, and future projects areplanned to provide IDA support to help the Government address the problem ofproviding low-cost shelter and infrastructure services to the urban poor.

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23. Because of the urgent need for sustained transfer of substantialfinancial resources, a significant proportion of IDA's annual lending toBangladesh has been in the form of fast disbursing program credits. Inaddition to providing much-needed foreign exchange and local counterpartfinancial support, annual program credits have provided a useful vehicle foraddressing a wide range of sectoral and macro-economic policy issues.Bangladesh will continue to need substantial fast disbursing foreign exchangeresources, on highly concessional terms, because of the large structuralimbalances between the country's export earnings and import requirements, andits domestic savings rate and investment nteds. To assist Bangladesh inaddressing these structural problems, IDA plans to focus its future policydialogue on measures designed to improve the efficiency of the industrialsector (para. 18), strengthen the financial system, encourage development ofthe country's domestic energy resources, and address policy and institutionalissues in education. IDA's support in these areas would likely be throughfast disbursing sector adjustment credits. IDA will also continue to providesupport for adjustment policies designed to mobilize more domestic financialresources in the publ.c and private sectors and more efficient resourceutilization through m2asures to increase public sector revenues, enhance theefficiency of the public sector enterprises and improve the planning ofpublic expenditures and investment.

24. Project implementation is hampered not only by a shortage of domes-tic financial resources, but also by weak development institutions, limitedmanagerial capacity and cumbersome bureaucratic procedures. IDA, in consult-ation with other donors, is engaged in a continuing dialogue with theGovernment on ways to improve project implementation. In support of broaderinstitutional reform, IDA is: (a) providing technical assistance for projectpreparation and implementation, (b) financing proje ts to train civil ser-vants and other managerial and technical personnel, and (c) encouraging theGovernment to introduce administrative reforms and improve the structure andmanagement of the civil service.

PART III - FLOOD CONTROL, DRAINAGE, AND IRRIGATION

25. Agriculture plays a dominant role in Bangladesh's economy, generatingover half of the nation's GDP, employing about three-fourths of the laborforce, and contributing over 80% of export earrings. Agriculture isdominated by the crop subsector, which accounts for 701 of the agriculturalvalue-added, compared to about 151 from livestock, 10% from fisheries and 5%from forestry. In both its Second and Third Five-Year Plans, the Governmenthas given high priority to increasing foodgrain production as a means ofmeeting minimum nutritional standards for the country's growing population,and has emphasized the development of irrigation facilities and the construc-tion of flood control and drainage works.

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26. Production Environment. Bangladesh is situated on the deltas ofthree major rivers, the Ganges, Brahmaputra, and Neghna. The terrain iscrisscrossed by some 24,000 km of waterways. Alluvial floodplains occupyabout 80X of the total land area. During the monsoon season (Nay/June toOctober!November), approximately two-thirds of the cultivable land (9.1 M ha)is subject to flooding. Overbank flooding occurs along the rivers, andelsewhere heavy rains and the relatively flat terrain cause extensivedrainage congestion. Despite the apparent overall abundance of rainfall,serious droughts can occur in some areas, even during the rainy season.

27. Nearly all the arable land in Bangladesh is under cultivation.Average cropping intensity is about 150X, although effective irrigation couldraise cropping intensity to well over 2001. The most important crop is rice,which is cultivated on three-fourths of the cropped area. Jute, the prin-cipal export crop, is grown on about 6X of the cropped area. Other cropsinclude wheat, pulse, oilseeds, sugarcane, tea, spices, and vegetables.Nearly 251 of the cultivated area is irrigated, although an identified waterresource potential exi ts for irrigating about 50%. In the absence of floodcontrol and drainage f&cilities, most of this area has been unable to shiftfrom the long-stem low-yield rice varieties to the short-stem fertilizer-responsive high-yielding varieties.

28. Although the average landholding is about 1.4 ha, over 251 of farmfamilies own less than 0.4 ha, and one-third of rural households own no land.The proportion of rural households who are landless or functionally landless(owning less than 0.2 ha) is increasing. Because of this trend, combinedwith limited nonagricultural employment opportunities, the percentage of therural population living below the poverty line (defined as a daily intake of2,100 calories) rose from 651 in 1964 to an estimated 751 in 1982.

29. Policy Framework. Government development policies in the agriculturesector under the Third Five Year Plan are aimed primarily at: (i) achievingfoodgrain self-sufficiency ond reducing the need for food imports;(ii) expanding employment opportunities in agriculture by higher rates ofgrowth; (iii) improving land use and conservation; and (iv) better managementof the water regime and expansion of the irrigated areas. The strategy forrealizing these objectives includes: (a) input and output price policies topromote the efficient use of resources for accelerated output, including areduction in subsidies on fertilizer and irrigation equipment; (b) anincreased role for the private sector in making technology available to thefarmer, e.g. in the sale and distribution of minor irrigation equipment,fertilizer, and pesticides; (c) an expansion in the availability of agricul-ture credit; and (d) crop diversification through intensive cultivation.

30. The Government faces several major constraints in achieving a sus-tained growth rate in foodgrain production and in its effort to diversifyagriculture. In the area of foodgrain production, continued expansion ofirrigation facilities and maximization of benefits from existing investmentsare key areas which need further attention. This will require, in part,

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better coordination among agencies involved in providing agricultural supportservices to farmers. The diversification of agricultural production willrequire that the Government, through appropriate pricing and marketingpolicies and the provision of basic infrastructure, ensures an environment inwhich the private sector can assume a more effe-tive role, particularly inthe areas of fisheries and livestock.

31. Major Institutions. The Ministry of Agriculture and Forests (MOA),the Ministry of Fisheries and Livestock (MOF), and the Ministry ofIrrigation, Water Development, and Flood Control (MOI) are the policymakingbodies for all matters pertaining to agricultural development in Bangladesh.Two major semi-autonomous agencies are responsible for planning andimplementing water-related development programs. The Bangladesh AgriculturalDevelopment Corporation (BADC), which reports to the NOA, is responsible forthe development of minor irrigation systems, (low-lift pumps and hand,shallow, and deep tubewells). The Bangladesh Water Development Board (BWDB),which reports to MOI, is responsible for planning, implementation, and opera-tion and maintenance qf flood control and drainage schemes, and medium andmajor irrigation systdms.

32. IDA's Role in Water Resources Development. Reflecting the country'sneeds and its priorities, IDA lending to Bangladesh has emphasized theagricultural sector. Particular emphasis has been placed on developing -aterresources (irrigation, flood control and drainage), strengthening agricul-tural services (technology development and supply, credit and marketing), anddeveloping complementary infrast-uctural facilities in other sectors (roads,power, industry, etc.). Ongoing IDA-supported projects in the agriculturalsector that aim to expand irrigation and water control include: MuhuriIrrigation (Cr. 725-BD), Drainage and Flood Control I and II (Credits 864-BDand 1184-BD), Hand Tubewells (Cr. 1140-BD), Deep Tubewells II (Cr. 1287-BD),Agriculture Credit (Cr. 1147-BD), Rural Development I and II (Credits 631-BDand 1384-BD), Small-Scale Drainage and Flood Control (Cr. 955-BD), BWDB SmallSchemes (Cr. 1467-BD), and the Third Flood Control and Drainage Project(Cr. 1591-BD).

33. In addition, IDA has participated in a number of joint studies withthe Government. Of special significance was the Land and Water ResourcesSurvey (1972), which led to a change in water resources development strategyin favor of low-cost, quick-yielding, irrigation and water control schemes.More recent joint studies include assessments of BWDB (1979) and the NiuorIrrigation Sector (1982). Finally, IDA is the executing agency for theUNDP-financed National Water Plan Project. These studies have helped tosupport a series of Imports Program Credits and accompanying policy reformsin agriculture, including such important policy decisions as:(i) privatization of procurement and distribution of irrigation equipment andother farm inputs; (ii) rationalization of the Covernment's approaches tofoodgrain procurement and farm input pricing; and (iii) the creation offavorable conditions for improved access to institutional credit.

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34. Experience with Past Lending. The design of the proposed FourthFlood Control and Drainage Project reflects the experience gained from bothpast IDA-supported projects in the water sector and other BWDB water develop-ment schemes. 1/ Projects being implemented by BWDB have been hindered by:(a) a slow land acquisition process; (b) limited institutional capacitywithin BWDB, particularly in the area of design; and (c) delays in procure-ment of goods and services. Important lessons reflected in the design of theproposed project include: (i) recognition of water transport (country boats)and fish migration pattern requirements; (ii) provision for preparation of anagricultural development plan for intensification of crop, livestock and fishproduction following the completion of flood protection works;(iii) introduction of measures, including organized consultations withbeneficiaries and elected local officials, to address past difficultiesencountered in land acquisition; (iv) the design and construction of embank-ments which would minimize operation and maintenance costs; (v) the earlypreparation of tender documents to facilitate procurement; and (vi) provisionof technical assistance and training to strengthen BWDB's projectimplementation, design1 and construction monitoring capacity.

PART IV - THE PROJECT

35. The project was prepared by BWDB with the assistance of consultants.It was appraised in June/July 1985. A timetable of key events relating tothe project and special conditions of the credit are listed in Annex III.Negotiations were held in Washington in September 1986. The Government ofBangladesh was represented by a delegation led by Mr. Mohammed Ali,Secretary, Ministry of Irrigation, Water Development and Flood Control.

Project Objectives

36. The main objectives of the project are: (a) to protect against croplosses, loss of life and property damage due to floods; (b) to enhance thephysical environment to allow farmers to adopt improved agriculturalpractices; and (c) to strengthen the Bangladesh Water Development Board(BWDB). The project would include: (i) the construction and rehabilitationof embankments, water control structures, drainage channels, and the con-struction and upgrading of roads; (ii) institutional support to BWDB and theMinistry of Irrigation, Water Development and Flood Control; and(iii) preparation of programs for further development of crops, livestockand fisheries within the project area and three adjacent polders.

1/ There have not as yet been any Project Performance Audit Reportsprepared for FCD type projects in Bangladesh.

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ProLect Description

37. The project would provide for: (i) constructing facilities for floodcontrol and improving drainage to arrest further deterioration in the culti¢-able areas in the Baranai area of the Rajshahi and Natore Districts in thenorthwestern region of Bangladesh; (ii) improving BWDB's institutionalcapability; (iii) strengthening MOI's existing capability for managing inde-pendent monitoring and evaluation of the impact of investment programs in thewater sector, and strengthening uonitoring capabilities within BWDB; and(iv) studies and surveys.

38. The project is based on the "simple polder" concept, which consistsof an embankment constructed around an area with water control structures topermit the discharge of internal runoff by gravity flow when the river waterlevel is low and to prevent overbank flooding when the river water level ishigh. This technique is suitable in areas that experience shallow to mediumflooding and do not require high embankments or pump drainage. The projectwould cover a gross area of 63,100 ha of which about 48,300 ha arecultivable. The project area is prone to annual flooding as a result ofoverbank spillage from the Baranai river and local rainfall runoff thataccumulates in low areas owing to poor drainage. During the pre-monsoonseason (April-May), floods damage the aus crop at the tillering stage andthe maturing boro crop. Floods also reduce yields of broadcast aman (themost flood-tolerant crop) and can lower the sugar content of sugarcane.

39. The criteria used in selecting the subprojects included: (a) thetotal irrigation investment per net ha was not to exceed US$620 (at 1980prices) and the per ha drainage and flood control investment was not toexceed US$500 (at 1980 prices) including cost of land acquisition; (b) eachsubproject was to be at least 8,000 ha net; (c) the project area was to belocated primarily in shallow flooded areas; (d) beneficiaries should haveindicated support for the project; (e) embankments would provide protectionagainst 20-year flood#, depending on the location, and against 100-yearfloods if significant loss of life might occur; (f) due consideration wasgiven to the potential effect of proposed improvements on flood conditions inadjacent areas, on navigation, and on fisheries; and (g) the project workswould, where possible, be constructed by labor-intensive methods, utilizingas far as possible, indigenous materials. Although the Baranai River is atributary of the Atrai River, which is an international waterway, the worksproposed under this project would not adversely affect any ripariancountries.

40. Flood Control, Drainage and Related Improvements. Under the project,approximately 45 km of new flood control embankments would be constructedalong the Baranai River and an additional 10 km would be improved orresectioned. Drainage systems within the project area would be improved tcallow the runoff water from the project area to be evacuated before floodsoccur in order to create a storage capacity for the period when drainage ishampered by high river water levels. These improvements would also make it

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possible to conserve water during the pre- and post-monsoon periods to allowmaintenance of a high groundwater level for supplementary irrigation. About30 km of new canals would be excavated. Most drainage canals (about 435 km)would follow existing channels (khals) which would be excavated. The projectwould also provide for the construction of 25 road bridges, 60 foot bridges,60 culverts, 4 railway bridges, one highway bridge, and for the improvementof 2 existing road bridges. Regulators-cum-inlet sluices would be located atthe outfall of drainage channels in the Baranai River. These structureswould be designed to drain runoff into the river, to retain water in Rhalsduring pre- and post-monsoon periods, to allow intake of water from the riverby gravity for supplementary irrigation, and to allow fish to migrate intoareas permanently submerged. The project would provide for about 26 drainageregulators, 25 water control structures, 2 water control structures-cum-bridges, 50 irrigation inlets and 200 cross-regulators. Road improvement (60km) and new road construction (7 km) would be undertaken to facilitate con-struction and subsequent operation and maintenance of project facilities.Provision would also be made for the construction of field offices and divi-sional staff housing and for the improvement of the regional BWDB workshop.

41. Since previous flood control efforts experienced considerable dif-ficulty in enforcing adequate compaction during the construction of earthfillembankments, construction supervision would be improved and appropriateequipment supplied to ensure controlled compaction for the embankment filland proper backfilling behind structures. BWDB will appoint additional staffas necessary to enable its field Division to carry out adequate supervisionof construction activities. Moreover, when contractors apply for reimburse-ment against construction of embankments, the Executive Engineer would berequired to certify in writing that compaction was properly executed andthat embankments constructed meet required safety standards. Experience hasalso shown that it is difficult to control unplanned use of embankments byfarmers for the construction of dwellings, grazing, or the cultivation ofcrops, all of which hamper maintenance activities. Planting of the propertree species on flood embankments has been proven to be an effective preven-tive maintenance measure and a source of valuable fuelvood, fodder, and fruitfor rural communities. BHDB would therefore, under an embankment preventivemaintenance pilot program to be financed under the project, provide funds tothe Forestry Department to supply seedlings of appropriate species.Interested local families, including landless families, would be entrustedwith planting the trees and caring for them on a defined length of embankmentand would be given the right to the benefits from the plantings for aspecified number of years. BWDB would submit a special report on thisembankment preventive maintenance pilot program at the end of each construc-tion season, starting with the fourth year of the project.

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42. Technical Assistance and Studies. Ongoing IDA financed projects J/provide for initiating actions aimed at strengthening BiDB's projectimplementation and design and construction monitoring capabilities. Theproposed project would continue these efforts and would include efforts toupgrade monitoring and evaluation functions A Project Management Unit(P1U), which was established under the Third Flood Control and DrainageProject to plan, coordinate, and monitor project isplementation, would assumeresponsibility for the same functions under the proposed project (seeparagraph 46) PNU would be assisted by a local consulting firm with limitedinternational consultancy input in undertaking detailed engineering designs,construction monitoring, and preparation of Operation and MaintenanceMauals. The consultants will be appointed by July 31, 1987 to assist P1Uwith design and implementation monitoring. The project would also providefor strengthening BVDB's Monitoring & Evaluation (M&E) Unit and the PlanningCell in the Ministry of Irrigation. Technical assistance to the two cellswould consist of two internationally recruited M&E specialists vho, over aperiod of 18 months, would assist BWDB in establishing an operational manage-met information system and would assist the Planning Cell of MOI in develop-ing procedures for evaluating the impact of investments in the water sectorand in developing a capability for administering and managing this evaluationprogram.

43. Studies and surveys to be financed under the project would include:(i) benchmark surveys that would be undertaken through a contract with alocal university or local consultants and that would provide information toserve as the basis for subsequent evaluations of project facilities andbenefits; (ii) a techeical evaluation of flood control and drainage programsin polder areas adjacent to the project area and preparation of a rehabilita-tion program to improve the use of existing flood control and drainagefacilities and to realise the full production potential, both to be under-taken by B1DB with consultant input and in cooperation with field divisions;(iii) preparation by KOI, which will coordinate inputs fTom the variousconcerned agencies, of crops, livestock and fisheries development programs tobe implemented following the completion of flood control and drainage works;and (iv) preparation of a project completion report by a localuniversity/institute or local consultants under the supervision of MlI'sPlanning Cell. Consultants to prepare the benchmark survey would beappointed no later than July 31, 1987 and no later than June 30, 1988 toprepare a rehabilitation program for adjacent polder areas. Consultants toprepare programs for intensification of crop, livestock and fish productionwould be appointed no later than June 30, 1989.

J The Second Flood Control and Drainage Project (Credit 1184-3D). MB3DSmall Schemes Project (Credit 1467-3D) and the Third Flood Control andDrainage Project (Credit 1591-3D).

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44. Operation and Maintenance. The project would provide funds for theOperation and Maintenance (06M) of completed facilities during the construc-tion period as well as during two additione' years while necessary measuresare taken for insuring that any deficiencies in design or construction ofproject facilities are identified and corrected. Operation of completedfacilities would involve: (i) regular inspections of embankments and majordrainage khals; and (ii) operation of regulating gates and water controlstructures. Provision would also be made annually for repairs resulting fromflood damage and the erosion of embankments. OM duties would be the respon-sibility of BUDB's field division. Preventive and annual maintenance workscould be executed through small contracts under the supervision of fielddivisions. The Government would allocate the necessary funds to ensureproper operation and maintenance of project facilities. IDA would providereimbursement for O& expenditures on a declining basis under the proposedproject.

45. Land Acquisition. Land acquisition would involve about 560 ha. TheDeputy Commissioners have already accepted land acquisition plans submittedby BWDB for land needed during the first-year construction program and infuture years, BWDB would submit the land acquisition plans at least ninemonths before the land is needed for construction. Actual possession by BWDBof the land for the first year would be a condition of credit effectiveness.The project would provide the necessary resources (funds, equipment, andtransport) to further facilitate land acquisition, and BWDB would make theresources available to Deputy Commissioners and would ensure that they wouldbe used exclusively for undertaking project-related land-acquisitionactivities. The Government would provide funds for the purchase of landunder the proposed project.

Project Management

46. BWDB would implement the project through the Project Management Unit(PMU). PMU's responsibilities would include: (i) assisting field divisionswith planning the implementation of the project, overseeing the preparationand processing of tender documents, and award of civil works contracts;(ii) monitoring progress in project implementation; and (iii) seeking par-ticipation by local government and farmers' representatives to identifymutually acceptable solutions to local problems hindering projectimplementation. P W would be supported by a local consulting firm (assistedby two internationally recruited specialists in the fields of design,hydrologyt and construction), which would be responsible for: (i) assistingPMU in planning the implementation of the project; (£i) supervising thenecessary surveys and engineering investigations, and preparing detaileddesigns; (iii) assisting in the preparation and processing of tender docu-ments for equipment and overseeing the award of contracts for civil works*studies, and equipment; (iv) monitoring progress in the construction program;(v) quality control; and (vi) the preparation of an 06M manual. At the fieldlevel, project implementation would be the responsibility of an Executive

-1S-

Engineer, under the supervision of the zonal Chief Engineer and theSuperintending Engineer. ,

47. In order to fulfill its project management responsibilities, PMUwould require timely information. Npnthly, quarterly, and annual progressreports would be submitted to the Project Manager, who would forward them toBWDB's Chairman and Board Members. These reports would serve as a basis formonitoring progress in project implementation and undertaking correctiveactions. PMU would submit a work program to IDA no later than September 30of each year to allow discussions prior to the start of the constructionseason.

Project Costs

48. Total project costs are estimated at US$27.5 million with a foreignexchange component of US$4.6 million or 17 of total costs. Estimates arebased on actual mid-1986 contract prices. The average cost of land in 1986is estimated at US$6,600 per ha. Project costs include US$0.8 million intaxes and duties and the cost of land. Physical contingencies (101 of thebase cost of civil works) amount to US$1.3 million, or about 5.81 of projectbase costs. Price contingencies amounting to US$3.8 million (171 of projectbase costs) are estimated on the basis of expected rates for local and inter-national inflation over a period of seven years as projected by IDA. Localinflation rates are estimated at 91 per annum for FY88, and 8Z per annumthereafter. International rates of inflation are estimated at 6.81 for FY88,7.0X for FY89, 7.11 for FY90, and 4.01 thereafter.

Project Financing

49. An IDA credit of SDR 16.6 million (US$20.0 million equivalent) wouldcover 751 of total project costs, excluding taxes and duties. EEC wouldcofinance with IDA the technical assistance and studies component. EEC'scontribution would amount to US$1.1 million, or 41 of project costs, net oftaxes and duties. The effectiveness of the EEC grant agreement would be acondition of credit effectiveness. The Government would finance the balanceof project costs of US$6.4 million, including taxes and duties and landpurchase, through annual budget appropriations in conformity with the projectimplementation schedule. In order to allow for timely project startup,preconstruction activities had to be undertaken after July 31, 1985, prior tocredit signing; the IDA credit would, therefore, include approximatelySDR 300,000 equivalent for retroactive financing. Approval of the ProjectProforma 11 by the Government would be an additional condition of crediteffectiveness.

1/ An internal Government document, the approval of which is a prerequisitefor the release nf funds and the hiring of staff.

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Procurement

50. Civil Works would not be suitable for international bidding becausethe major portion of the works are relatively small, labor-intensive,geographically scattered in areas with difficult access, and spread over aperiod of six years. The works would, therefore, be carried out under con-tracts let through local competitive bidding procedures (LCB) acceptable toIDA. Tender documents and bid evaluation would be sent to IDA for reviewbefore contracts are awarded for civil works estimated to cost more thanUS$150,000. Force account work in respect of earthwork would be permitted,but is expected to be limited to O&N activities and would be restricted toamounts under US$5,000 equivalent for each individual case. Force accountwork in respect of fabrication and installation of gates would be limited toUS$5S,000 for each structure. The use of force account in civil works wouldbe limited to an aggregate amount of US$600,000. Surveys and Investigations.would be undertaken by contract under LCB or by BWDB via force account. R5DBand the Deputy Commissioner would be responsible for processing land acquisi-tion. Equipment and Vehicles would be procured through ICB. A preferencelimited to 15Z of the cif price or the prevailing customs duty, whichever islower, would be extended to local manufacturers in the evaluation of bids.Small off-the-shelf items costing less than US$10,000 for each contract,which are needed urgently, could be procured by prudent shopping after com-paring bids from at least three independent suppliers. Such procurementwould not exceed a cumulative total of US$150,000. Consultants serviceswould be procured in accordance with the principles and procedures describedin the "Guidelines for the Use of Consultants by World Bank Borrowers andby the World Bank as Executing Agency' as published by the Bank in August1981. Technical Assistance and Studies would be financed by EEC.Consultants to assist in detailed design and implementation monitoring wouldbe recruited in accordance with Bank Guidelines.

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METHODS OF PROCKlMED13f(US$ Million)

Procurement Method /aProject Cmpoent ICB LCB PA/Other Total

Land Acquisition - - 4.00 4.00Civil Works - 15.64 0.90 16.54

- (14.34) (0.60) (14.94)Tecanical Assistance & Studies /b - - 1.10 1.10Surveys and Investigation - 0.04 0.12 0.16

(0.04) (0.12) (0.16)Polders A, B, C - 0.54 - 0.54

(0.54) - (0.54)Equipment 0.40 - 0.50 0.90

(0.40) - (0.10) (0.50)Engineering and Administration - - 2.46 2.46

- - (2.36) (2.36)Design & Implementation Monitoring - 1.01 - 1.01

- (1.01) - (1.01)Operation and Maintenance - - 0.79 0.79

- - (0.49) (0.49)

0.40 17.23 9.87 27.50(0.40) (15.93) (3.67) (20.00)

/a Figures in paren:heses are the amounts to be financed by IDA.rb Financed by BEC.

Disbursements

51. Disbursements from the IDA credit would cover: (a) 90X for civilworks and construction material; (b) 1OOZ of foreign expenditure and localexpenditures (ex-factory costs) and 70X of local expenditures for equipmentand vehicles; (c) 1001 for investigations, surveys and consultancy servicesfor design and implementation monitoring; (d) 100l for stuaies; (e) 951 forengineering and administration costs; and (f) 1OOZ of OEM costs during FY89and FY90, 80Z during FY91, 601 during PY92, and 401 during FY93 andthereafter. Full documentation would be sent to IDA in support of withdrawalapplications except for items (e) and (f) above, and for works executed underforce account and small civil works contracts costing less than the equiv-alent of US$20,000 each. For these items, applications would be supported bystatements of expenditures certified by the Chief Engineer and the ProjectAccountant. In order to facilitate disbursement of the IDA credit, a SpecialAccount would be established in the Bangladesh Bsank on terms and conditionssatisfactory to IDA. The initial deposit into the Special Account would beSDR 1.5 million equivalent.

L,

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Cost Recovery

52. As in many countries, protection against flooding in Bangladesh isconsidered to be Government's resporsibility, and the accepted view is thatbeneficiaries should not be directly charged. Moreover, benefits from floodcontrol and drainage work vary from one plot to another, depending upon thetopography. In the case of some high landowners, the benefits can actuallybe questionable. Unless cost recovery is done through a land productivity-based system, it appears very difficult to design an equitable system ofdirect cost recovery. GDB's current view, which is accepted by IDA, is thatcost recovery on drainage and flood control projects is not feasible at thisstage.

Project Benefits

53. The proposed project would promote increased agricultural productionand would help to alleviate rural poverty through increased income forowners-cultivators and the creation of employment opportunities for thelandless. About 34,500 farm families would directly benefit from theproject. About 50X of the project beneficiaries fall under the relativepoverty income threshold for the rural poor, estimated at 40X of per capitaCNP. Assuming equal returns to various income groups, the proportion oftotal net benefits accruing to those farmers currently below the relativepoverty income level would remain constant under the project, but the actualbenefits they would receive would increase by 26% in absolute terms.

54. The project's incremental output of paddy, wheat, and sugarcane wouldsubstitute for imports while inc4eased jute production would generate directforeign exchange earnings. The incremental output from the project areawould generate a net present value of direct and indirect foreign exchangeearnings/savings equivalent to about US$6.0 million, accounting for lossesforegone and assuming a discount rate of 12%. About 2.4 million man-days ofadditional on-farm employment would be generated. In addition, the projectwould provide employment opportunities equivalent to about 9.6 million man-days during the construction of project facilities and would require anestimated 2,200 laborers (for five months) per annum, for the operation andmaintenance of such facilities. The economic rate of return of the projectto the economy of Bangladesh is estimated at 18%. At full development, theannual net incremental benefit would be about US$4.7 million. The netpresent value of incremental benefits over the life of the project discountedat 12% (the opportunity cost of capital) is about US$6.0 million.

Project Risks

55. A possible risk facing the project would be delays in land acquisi-tion and preparation of engineering designs. Arrangements have been incor-porated into the project design to minimize this risk through early provisionof funds for timely land acquisition and technical assistance for design and

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implementation monitoring. A further possible risk is that production fromnatural fisheries within the project area might be reduced. The project'sengineering works would be designed to minimise this impact, and a follow-updevelopment program would be prepared with a view to increasing crop,livestock, and fish production in the project area.

PART V - REOOMNENiMATION

56. I am satisfied that the proposed credit would comply with theArticles of Agreement of the Association. I recommend that the ExecutiveDirectors approve the proposed credit.

Barber S. ConablePresident

Vashington, D.C.April 9, 1987

-20- AXMt IPage 1 of 4

T8B sTATUs oF BANK GROtP OPEnATIONS IN B_GMLAU= /a

A. STATEMENT OF BANK LOANS AND IDA CREDITS (as of Sentember 30. 1981)

AmountsLoan or (less cancellations)Credit _ 8$ Nillion /bNumber Year Borrower Purpose k Undisbursed

One loan and 46 credits fully disbursed 54.90 1,638.09 -

864 1978 Bangladesh Drainage & Flood Control - 19.00 2.13890 1979 Bangladesh Oxbow Lakes Fisberies - 6.00 0.70912 1979 Bangladesh Vocational Training - 25.00 9.53934 1979 Bangladesh Greater Rbulha Power

Distribution - 28.00 2.07955 1979 Bangladesh Sall-Scale Drainage &

Flood Control - 25.00 6.28964 1979 Bangladesh Highways II - 10.00 1.11

1001 1980 Bangladesh Chittagoug Water Supply 1I - 20.00 3.801023 1980 Bangladesh Fertilizer Industry

Rehabilitation - 29.00 5.881032 1980 Bangladesh Jute Induotry Rehabilitation - 20.00 6.391042 1980 Bangladesh Mangrove Afforestation - 11.00 4.551054 1980 Bangladesh Education IV (Primry Education) - 40.00 9.121065L/ 1980 Bangladesh Smll-Scale Industry III - 35.00 7.43l09 6 /L 1981 Bangladesh Fertilizer Transport - 25.00 10.331117/c 1981 Bangladesh Bangladesh Shilpa Bank II - 26.37 2.591140Lc 1981 Bangladesh Hand Tubevells - 18.00 8.611147L£ 1981 Bangladeshb gricultural Credit - 40.00 6.981184& 1982 Bangladesh Drainage & Flood Control II - 27.00 20.43i204/c 1982 Bangladesh Chittagong Urea Fertilizer - 15.00 2.821205/L 1982 Bangladesh Textile Industry Rehabilitation - 30.00 25.311215/c 1982 Bangladesh Extension & Research II - 27.00 16.3012471c 1982 Bangladesh Chittagong Port - 60.00 57.681254/c 1982 Bangladesh Asbhugan4 Thermal Power - 92.00 71.781262/c 1982 Bangladesh Rural Electrification - 40.00 14.571287/c 1982 Bangladesh Deep Tubevells It - 44.17 30e061301L£ 1983 Bangladesh First Highway Project

(Supplemental) - 6.00 0.53

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Page 2 of 4

A. lank Loans and IDA Credits to Banpladesh (continued)

* v~~~mountsLoas or (less cancellations)Credit Vs$ million lb Numb*X -TAU B9rrover Purpose _ank IDA Undisbursed

1318/c 1983 Bangladesh Business ManagementEducation & Training - 7.80 5.88

13211, 1983 Bangladesh Telecoumunications III - 35.00 22.9113491S. 1983 Bangladesh Public Administration

(Training asd PersonnelManagement) - 12.00 8.21

1 3 571, 1983 Bangladesh Energy Efficiency and' I Refinery Rehabilitation - 28.50 24.15

1384L/ 1983 Bangladest Rural Development II - 100.00 92.271396 S 1983 Bangladesh Agricultural T-aining II 8.10 6.561399k 1993 Bangladesh Sugar Rehabilitation and

Intensification - 20.00 16.811402/c 1983 Bangladesh Petroleum Exploration Promotion - 23.00 12.481440ILg 1984 Bangladesb Fifth Technical Assistance - 25.00 28.341455L/ 1984 Bangladesh Second Agricultural Research - 24.50 27.171467LS 1984 Bangladesb Water Development Board - 41.50 44.041477J-s 1984 Bangladesh Textile Industry Rehab. II - 23.00 26.21F0221j. 1984 Bangladesh Textile Industry Rehab. II - 22.00 25.121490L 1984 Bangladesh Teebnical Education - 36.00 35.341504-0 LI 1984 Bangladesh SAP 725 BD - 10.00 7.321504-1 LI 1984 Bangladesh SAP 1023 SD - 5.00 2.411504-2 L 1984 Bangladesh SAP 1247 SD - 7.00 1.521504-3 LI 1984 Bangladesh SAP 1262 BD - 8.00 3.2015741-. 1985 Bangladesh Second Primary Education - 78.00 87.751586Lk 1985 Bangladesh Second Gas Development - 110.00 130.691587kL 1985 Bangladesh Flood Rehabilitation - 30.00 18.0415911sC 1985 bangladesh Third Flood Control & Drainage - U.00 56.701633.Ls 1986 Bangladesh Rural Electrification II - 79.00 89.0716341 1986 Bangladesh Second Forestry Project - 28.00 30.46M648 ld 1986 Bangladesh Power Trans & Distribution - 56.00 63.46

I -22- .

ANUX"; IPage 3 of 4

A. Bank Loans a_d IDA Credits to BaElade,sh (continued)

AmountsLoan or (less cancellations)Credit US$ Nillion lbluber Yea-r Borrower .Pugse _Bak IDA Undisbursed

1649L1 .i_ 1986 Bangladesh Population & Family Healtb III - 78.00 91.491651lS le 1986 Bangladesh Shrimp Culture - 22.00 25.00I655/c 1986 Bangladesh Imports Program XIII - 200.00 125.231734Lg6 LI 30.00 32.03

Total 54.90 3,552.03 1,466.90of which baa been repaid 3.00 14.54 -

Total now outstandin' 51.90 3.537.49Amount sold 0.00 0.00

Total now held by Boak and IDA 51.90 3,537.49Totel undisbursed 1,466.90

La The status of the projects listed in Part A is described in a septirate report onall Bank/IDA financed projects in execution, which is updated twice yearly andcirculated to theEzecutive Directors on April 30 and October 31.

Lk The original principal of credits under replenishments 1 to 3 has been increasedby the amount of the translation adjustment as a result of the devaluation ofthe United States dollar in 1972 and 1973.

Li IDA Sixth and Seventh Replenishments Credits denominated in SDRs. The principalsmounts are shown in U.S. dollars equivalent at negotiations as showa in thePresident's Reports. The undisbursed amounts are calculated at the rate of exchangeon September 30, 1986.

.1g 8ffective October 14, 1986.L¢ Not yet effective.

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AMPage 4 of 4

B. 1TATEMENT OF IFC INVE8TMENTS (as of Snptember 30. 1986)

Fiscal - Amounts i U$ MillionX.ear, Oblizor Tvae of Bu in.es Ia Anit3E Total

1969 Karnaphuli Paper Mills Ltd. Pulp & Paper Products 5.60 0.63 6.23

1979 Highapeed Shipbuilding &Heavy Engineering Co., Ltd. Shipbuilding 1.20 0.36 1.56

1980 Industrial Promotion andDevelopment Company of DevelopmentBangladesh, Ltd. Finance Compasy - 1.05 1.05

1985186 Bata Shoe Co. Shoe Manufacturing(Bangladesh) Ltd. and Tannery 4.46 0.51 4.97

1985 Industrial DevelopmentLeasing Co. of Bangladesh(IDLC) Capital Market 2,59 Q.1 2.76

Total gAross comdtments 1385 216.57less cancellations, terminations, repayments and sales 7.21 0.63 7.84

Total now held by IYC 6.64.

Total undisbursed .34 0.08 3.42

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Page 1IAN%DADMUNM I

FOURTH FLOOD omm LD DLIRME PROJBCT

Suopleweitarv Proiect Data Sheet

Section I: Timetable of Key Events

(a) Tim taken to prepare project:

Twelve sonths.

(b) Agency preparing the project:

BiDE

(c) Date of first preparation mission by IDAt

NI/A

(d) Date of departure of apprasal mission:

June 1965.

(e) Date of coapletion of aeotiation.s

September 25, 1986.

(f) Planned date of effectiveness:

90 days following signatudv.

Section II: Special IDA Implementation Action:

None.

Section lIll Conditions of Effectiveness area

(a) Possession by bUl of the land nede for the firstyear construction progrm (paragraph 45)s

(b) Government approval of Project Proforma (paragraph 49);and

(c) Effectiveness of EBC grant agreement (paragraph 49).

-25-

AMEX IIPage 2

Other Condltions are:

(a) Consultants would be appointed no later than July 31.1987 fox assisting PMU with design and implementationmonitoring (paragraph 42);

(b) Consultanta would be appointed no later thanJuly 31. 1987 for undertaking the benchmark survey(paragraph 43); and

(c) Consultants would be appointed no later than June 30.1988 for preparing a rehabilitation program for poldersAs B, C (paragraph 43);

(d) Appointment of consultants to prepare programs forintensification of crop, livestock and fish productionno later than June 30. 1989 (paragraph 43).

A.k aA NGLDESH )

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IBRD 19282

BANGLADESH

FOURTH FLOOD CONTROL AND DRAINAGE PROJECTBARANJ PROJECT

Proposed Project Drolage Canols-~ ~.=Embcff rnents Project BoundaA strctues - - Compartnent Boundariesjg Rives or Esting Khats Roods

2*ww - to be Improved I Railroadscv Water Control Structures Tracks

Roads to be Imprved Built-Up AreasEmibanments to be

NOIE Gross protected area 6aX ha-it Bridges to be Lmproved Net cutffable area 4&300 ha

b O @rd khdo tude d slect CMAy to be fo4

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NOVEME 1f985