Document ofThe World Bank

FOR OFFICIAL USE ONLY

Report Number: 19354

IMPLEMENTATION COMPLETION REPORT

BANGLADESH

URBAN DEVELOPMENT PROJECT(Cr. 1930-BD)

May 26, 1999

Infrastructure Sector UnitSouth Asia Region

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.

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CURRENCY EQUIVALENT(as of June 1998 )

Currency Unit = Taka (Tk.)Tk. 1.0 = US$ 46.5US$ 1.0 = Tk.0.0215

WEIGHTS AND MEASURES

ha - hectares (1 ha = 2.469 acres)km = kilometers (1 km = 0.621 miles)m = meter ( m = 39.37 inches)km2 = square kilometer (1 km2 = 0.386 sq. miles)

FISCAL YEAR OF BORROWERJuly 1 - June 30

ABBREVIATIONS AND ACRONYMS

CCC - Chittagong City CorporationCWASA - Chittagong Water and Sewerage AuthorityDCC - Dhaka City CorporationDWASA - Dhaka Water and Sewerage AuthorityGOB - Government of BangladeshHSD - Housing and Settlements DirectorateICR - Implementation Completion ReportIDA - International Development AssociationLGED - Local Government Engineering DepartmentMHPW - Ministry of Housing and Public WorksMLGRDC - Ministry of Local Government, Rural Dev. and CooperativesNGO - Non-Governmental OrganizationO&M - Operations and MaintenanceOP - Operational PlanPAP - Project Affected PeoplePIU - Project Implementation UnitSAR - Staff Appraisal ReportUDP - Urban Development ProjectUNCHS - United Nations Center for Human SettlementsUNDP - United Nations Development ProgramUSM - Urban Sector Memorandum

Vice President: Mieko NishimizuCountry Director: Frederick TempleSector Manager: Frannie HumplickTask Leader: Toshiald Keicho

FOR OFFICLAL USE ONLYIMPLEMENTATION COMPLETION REPORT

BANGLADESHURBAN DEVELOPMENT PROJECT

(Cr. 1930-BD)

Contents

Page No.Preface .............................................................................. i

Evaluation Summary .............................................................................. iiBorrower's Evaluation Summary ............................................................................. vi

PART I - PROJECT IMPLEMENTATION ASSESSMENT

Background .............................................................................. 1A. Statement/Evaluation of Objectives .............................................................................. 1B. Achievement of Objectives ............. 3................................................................ 3C. Major Factors Affecting the Project ............................................................................. 7D. Project Sustainability ............................................................................. 8E. IDA Performance .......... ................................................................... 9F. Borrower's Performance ............................................................................. 10G. Assessment of Outcome ............................................................................. 11H. Future Operation ............................................................................. 11I. Key Lessons Learned ............................................................................. 12J. Evaluation of Program Objective Categories ............................. ................................................ 13

PART II - STATISTICAL TABLES

Table 1 Summary of Assessments ............................................................................. 14Table 2 Related Bank Loans/Credits ............................................................................. 15Table 3 Project Timetable ...................... : 17Table 4 Loan/Credit Disbursements: Cumulative, Estimated and Actual ................................................... 17Tables 5 and 6 Key Indicators for Project Implementation and Operation ............................................................. 18Table 7 Studies Included in Project .18T able 8A Project Costs.19Table 8B Project Financing .19Table 9 Economic Costs and Benefits .19Table 10 Status of Legal Covenants .20Table 11 Compliance with Operational Manual Statements .22Table 12 Bank Resources: Staff Inputs .22Table 13 Bank Resources: Missions .23

APENDICES

A: ICR Mission's Aide-Memoire .24B: Borrower's Evaluation.33C: Operational Plans.54

MAP: IBRD 19645.61

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.

IMPLEMENTATION COMPLETION REPORT

BANGLADESH

URBAN DEVELOPMENT PROJECT(Cr. 1930-BD)

Preface

1. This is the Implementation Completion Report (ICR) for the Urban Development Project inBangladesh, for which Cr. 1930-BD in the amount of SDR 34.4 million equivalent was approved on June21, 1988, and made effective on January 25, 1989.

2. The credit was closed on June 30, 1998, one year after the originally scheduled closing date. Finaldisbursement took place on November 3, 1998, at which time a balance of SDR 484.18 equivalent wascanceled. In addition, the amount of SDR 6,352,000 and SDR 5,900,000 was canceled on July 25, 1993and on October 15, 1996 respectively. Co-financing for the project was provided by the United NationsDevelopment Program (UNDP).

3. The ICR was prepared by a team consisting of Toshiaki Keicho, Zahed Khan (SASIN), andDipasis Bhadra (Consultant). Gladys Stevens, Razia Sultana (SASIN), and Reza Khan (ResearchAssistant) assisted in data collection, preparation of various tables, and editing. The ICR was reviewed byFrannie Humplick, Sector Manager (SASIN) and cleared by Frederick Thomas Temple, Country Director(SACBD). Borrower's implementing agencies provided their own evaluations that are included asappendices.

4. Preparation of this ICR was begun during the IDA's supervision mission in May, 1997. The ICRwork resumed in early 1998, and the ICR mission took place during October/November, 1998. The ICR isbased on materials in the project file, discussions with officials of the implementing agencies, andfindings of the ICR mission. The Borrower contributed to preparation of the ICR by providing IDA withthe necessary data and by cooperating with the IDA's ICR team.

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IMPLEMENTATION COMPLETION REPORT

BANGLADESHURBAN DEVELOPMENT PROJECT

(Cr. 1930-BD)

EVALUATION SUMMARY

Evaluation of Objectives

1. The Urban Development Project (UDP) is IDA's first comprehensive urban project in Bangladesh,designed to assist the Government of Bangladesh (GOB) in improving urban environmental services andhousing in Dhaka and Chittagong. The objectives of the project were to assist GOB in improving themanagement and financing of urban development through: (a) effective planning, management, andoperation of municipal services; (b) identifying replicable, cost-effective and affordable approaches tourban land development and shelter for middle- and low-income families; and (c) strengthening theplanning, management and financial capacity of key local and national sector agencies.

2 These objectives were to be attained through a variety of specific initiatives. The entire project wasoriginally divided into three major components: (i) the environmental improvements component; (ii) thearea development and basic shelter component; and (iii) the project support technical assistance. Theenvironmental improvements component under the Ministry of Local Government, Rural Developmentand Cooperatives (MLGRDC) involved storm water drainage/flood control and solid waste managementin both Dhaka and Chittagong, low-cost individual/community sanitation in Chittagong, and small-scaleinfrastructure improvements in low-income areas of Dhaka. The area development and basic sheltercomponent under the Ministry of Housing and Public Works (MHPW) included area development formostly residential plots and building loans for basic shelter in Chittagong.

3. The project objectives appear to be broadly consistent with the policy emphasis at the time. Thefirst Bangladesh urban sector strategy paper of IDA (Urban Sector Memorandum of 1981) brought outmultiple and growing needs of the sector and their magnitude together with the importance of properpolicy sequencing. It recognized the need for some well thought-out project initiatives to narrow down theglaring gap between demand and supply of various urban services as well as the ultimate importance ofinstitutional strengthening to accomplish these goals. Inception of the project perhaps lay in this strategypaper.

Implementation Experience and Results

4. The overall achievement of project objectives was poor. For example, allocation on the originalproject items could only utilize 48 percent of the total credit by the end of the original credit closing dateof June 30, 1997. In May of the same year, the southern districts of the country were severely hit bycyclone. Observing low utilization of the credit and feeling the need for external support, GOB made aformal request in June, 1997 to extend the credit closing by one year and to use the unutilized funds torepair some of the infrastructure damaged by the cyclone, primarily roads. IDA agreed to this proposaland thus the cyclone-damaged infrastructure rehabilitation component, implemented by the LocalGovernment Engineering Department (LGED), was added to the project. With this component, theutilization record climbed up to 62 percent at the end of the project, June 30, 1998.

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5. Given that a large part of the project (i.e., the Dholai Khal environmental improvement component,some parts of the sanitation component, and the building loan component) had not been implemented, itappears that the project has been able to achieve its physical objectives only partially at best. The physicalimplementation of many components suffered enormously right from the beginning. For example, someof the crucial works under the Dholai Khal environmental improvement component in Dhaka, primarilydrainage improvements and construction of roads, were dropped in July, 1993 mainly due to GOB'sfailure to implement the agreed resettlement plan. Also, delay in land acquisition, delay in approval oftender, error in design, and delays in other administrative decisions by the concerned ministries -- allcharacterized the construction of the Sheikh Mujib culvert in Chittagong.

6. Most of the work under the area development component in Chittagong was completed at theKaiballyadham site by May, 1997, but this component also had some serious problems. It is important tonote that this site of about 102 acres had been developed by cutting and leveling hills. Though this oftenresults in soil erosion causing drainage problems particularly during monsoon months, no environmentalassessment was undertaken because this project was questionably classified as "Environmental CategoryC." Actually, IDA had to request the Housing and Settlements Directorate (HSD) to carry out the cleaningwork, as early as December, 1992, to remove eroded soils. In addition, a housing loan in the tune of US$1.0 million had to be canceled due to lack of coordination between HSD and the Agrani Bank, assignedto provide housing loan and collect mortgage repayment. In addition, it is surprising to note that the paceof settlement is extremely slow. Out of the total 4144 plots actually developed, some 3585 units havebeen so far allotted. Of this, only 2880 have been taken into possession. While these numbers appear to belarge, actual number of households living in the Kaiballyadham area is very low. Only 350-400households appear to be living there as of November, 1998. There are quite a few reasons behind thisslow pace of settlement: (i) Kaiballyadham lacks basic services. Except electricity, no other services arepresently available; (ii) since the house building loan component now has been dropped, the plot-ownershave to arrange their own loan to build their houses; (iii) the location of the Kaiballyadham housingscheme is 14 km from the city center, and neither affordable transportation to the center nor economnicopportunities in the area are available; and finally (iv) mixing of different income classes in the developedarea, due to the need for cross-subsidization, may be a deterrent for settlement by any particular class.

7. The cyclone rehabilitation component, undertaken by LGED, also experienced a delay of severalmonths before the actual works started in early 1998. However, the project staff of LGED, its consultantsand the contractors were able to complete 227 roads in six districts by the credit closing date (June 30,1998) and could successfully utilize most of the remaining funds of the project.

8. Achievement of the project's institutional development objectives is negligible. It is evident thatthe project implementation had disproportionate emphasis on numerous construction works whileinstitutional aspects lacked direction, orientation and adequate following-up. The institutional support toproject implementation work was most adversely affected by the delay in creation of ProjectImplementation Units (PIUs) and in recruitment of personnel for those units. Though retention ofinstitutional memory is a crucial aspect for institutional strengthening and smooth implementation underany project, frequent changes in staff at PIUs caused loss of institutional memory leading to slowdown ofwork at times.

9. Although the project called for a substantial change in financial management of the localgovernments, the Dhaka City Corporation (DCC) and the Chittagong City Corporation (CCC) inparticular, financial objectives were largely unattained. UDP was carried out, by and large, without muchattention to the improvement of the financial management even though SAR stipulated detailed financialaction plans for both the city corporations as well as HSD. For example, reduction of arrears in taxrevenues together with maximization of property value through regular assessments were suggested as

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two key instruments for improved financial management at the city corporations. However, the presenttax structure and collection pattern do not reflect any of the suggested changes.

10. Overall, project sustainability is unlikely. The project had achieved very little in terms of makingthe implementing agencies attain their institutional and financial goals. Consequently, the project hadvery little or no impact on reducing the financial dependency of the implementing agencies, DCC andCCC in particular, on external grants and aid. Also, regarding the Kaiballyadham area developmentscheme, the sustainability would require integration of essential services and economic aspects to the poorpopulation's need for housing. Without essential services, economic opportunities and communityparticipation, it is not expected that this scheme is sustainable.

11. Though IDA's performance in project identification was generally satisfactory, its preparationassistance, appraisal, and supervision were all deficient. IDA's preparation assistance was not just enoughto fully complete the necessary preparation activities. IDA's appraisal failed to identify a great riskconcerning land acquisition and resettlement, and IDA did not commit enough supervision efforts for thisproject. As a result, the project was rated as a "problem project" from 1990 to 1993 and again in 1996 and1998.

12. Borrower's overall performance was also deficient. GOB's failure to implement the agreedresettlement plan for Project Affected People (PAP) in the Dholai Khal site was mainly due to GOB'slack of political commitment and lack of institutional capacity on the part of DCC which was responsiblefor implementing the plan. Focus was more on preparing the plan rather than implementing the plan, andDCC's limited institutional capacity to implement the plan or its lack of experience in resettlement wasnot given adequate attention initially.

Summary of Findings, Future Operations, and Key Lessons Learned

13. Most of the completed works were transferred to the agencies responsible for operations andmaintenance (O&M) except for the Kaiballyadham area development component. At IDA's request, HSDsubmitted in December 1998 an action plan to solve the problems of lack of basic services atKaiballyadham, but implementation of the plan needs to be monitored closely. Another operational issueis related to the pumping station created under the project as part of the Dholai Khal drainage componentin Dhaka. The pumping station is in a good condition and demonstrated benefits during the severe floodsof mid-1998, saving the adjacent areas from being flooded. Though this component was implemented byDCC, the station was handed over to the Dhaka Water and Sewerage Authority (DWASA) on March,1998, as DWASA is now officially responsible for managing storm-water drainage systems in Dhaka.DWASA's institutional and financial capacity to assume this responsibility is now being reviewed underthe Fourth Dhaka Water Supply Project (also financed by IDA).

14. The key lessons learned from this project relevant for other urban projects in Bangladesh and othercountries are discussed below. These lessons have been incorporated into designs of the IDA-financednew urban project in Bangladesh, the Municipal Services Project.

(a) Adequate resources should be made available for supervision. This project was rated as a"problem project" from 1990 to 1993 and again in 1996 and 1998. Most of this period,IDA's supervision mission consisted of only one or two members, visiting the projectsites less frequently than necessary. In such a case, where a project suffers a long historyof non-performing status, a sector manager or higher level should intervene to ensure thatthe composition of a supervision team and/or frequency of a field visit is adequate, thatsupervision team is well prepared to address all the problems, and that action plansagreed during supervision mission is followed up in a timely manner.

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(b) Institutional strengthening should receive more and explicit attention than what wasgiven in this project. This is very critical, especially in Bangladesh, where institutions arein dire need of reforms. In addition, PITUs should be integrated more into thesystem/within the implementing agencies. They should not hang loose and let go as soonas the projects have been completed. This will ensure valuable institutional memories tobe available within the institutions.

(c) The major problem facing the project was GOB's inability to implement the agreedresettlement plan. IDA should have put more emphasis on implementing the plan ratherthan preparing the plan by building local capacity to deal with resettlement issues. Inpreparing a resettlement plan where such resettlement is unavoidable, more attentionshould be given to institutional capacity of a local agency responsible for resettlement,and the plan should be formulated based on full participation of all the PAP.

(d) Although the cyclone rehabilitation component was added to the project in May, 1997,after the devastating cyclone, implementation of the component only started in early 1998despite the emergency nature of the component. Before emergency operations could beincluded in the project, exchange of necessary information between GOB and IDA had totake place and certain other processing requirements had to be fulfilled, as a result ofwhich the new emergency component could not be started as quickly as it would havebeen desirable. In a country like Bangladesh which is prone to frequent natural disasters,there should be projects that are flexible enough to reallocate project funds for emergencyassistance without having to go through the time-consuming paper work.

(e) Conducting ex-post economic analysis was not possible due to lack of adequate data. Inaddition, concrete performnance indicators were not set up for this project. In order tomake ex-post economic analysis easier and to avoid cumbersome data collection atproject completion, all the data necessary for the analysis should be part of the project'sperformance indicators which need to be monitored and recorded properly during projectimplementation and operation. It is also very important to help build institutionalcapacities of implementing agencies for effective monitoring and evaluation.

(f) Most of the components of this project was engineering work, and designed andimplemented with little consideration to local involvement and participation.Consequently, some of the completed works are underutilized (e.g., community latrines)and/or far from meeting the targeted local needs (e.g., area development). Not to mentionthe need for beneficiary participation in every stage of development projects, governmentofficials should be trained to improve their skills in community participation, in additionto technical and managerial skills.

(g) The design of the project included multi-sector investments in two cities, thereforeinvolving many implementing agencies. Without focus, the project became difficult forthe Borrower to manage and for IDA to supervise. Therefore, the siie and complexity ofprojects should be reduced, focusing on specific sub-sectors, with a limited number ofcomponents that can be implemented by one or a few agencies.

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Borrower Agencies' Evaluation Summary (See Appendix B)

1. DCC: DCC's evaluation says that the project achieved satisfactory development results.However, there were some problems that seriously affected the timely implementation of the project,which include: (i) land acquisition; (ii) inadequate administrative authority of the Project Director; (iii)frequent staff rotation; (iv) delays in procurement; (v) delays in various approval processes; and (vi)financial reporting and audits.

2. CCC: CCC's evaluation of its project component is very positive. It says that, despite the delaysimplementation due mainly to problems related to land acquisition and design changes, rehabilitation ofcanals and construction of the Sk. Mujib Culvert contributed to reduction of flooding and inundation ofcanals in Chittagong and, therefore, living standard of city dwellers improved. It also notes theimportance of timely repair and maintenance of the infrastructure created under the project in order tosustain the project benefit.

3. HSD: HSD's evaluation of its area development component says that performances of the Bankand the Borrower are both satisfactory and the project is sustainable. However, it identifies some factorsthat negatively affected project implementation, which include: (i) land acquisition; (ii) design changes ofworks; (iii) frequent changes of PIU staff; (iv) erosion and drainage problems associated with landdevelopment; and (v) lack of coordination between GOB agencies and the Bank. It also notes that some ofthe basic services like water supply are not available on the developed land which contributes the currentslow settlement.

4. LGED: LGED's evaluation of its cyclone rehabilitation component says that the project has beencompleted satisfactorily within the stipulated time. It notes various implementation experiences such as:(i) smaller size of contract packaging to ensure quicker completion of works; (ii) participation ofbeneficiaries in selection of schemes; and (iii) choice of technical specifications by considering maximumuse of indigenous materials, withstanding ability against cyclone and flood, etc.

Part - I

Project Implementation Assessment

IMPLEMENTATION COMPLETION REPORT

BANGLADESHURBAN DEVELOPMENT PROJECT

(Cr. 1930-BD)

Part I: Project Implementation Assessment

Project Identity

Name: Urban Development ProjectCredit: Cr. 1930-BDRVP Unit: South AsiaCountry: BangladeshSector: InfrastructureSub-sector: Urban Development

Background

1. The Urban Development Project (UDP) is IDA' s first comprehensive urban project inBangladesh, designed to assist the Government of Bangladesh (GOB) in improving urban environmentalservices and housing in Dhaka and Chittagong. In the past, IDA's involvement in the urban sector hadtaken place through financing the water supply and sanitation projects only, having financed five watersupply projects in the cities of Dhaka and Chittagong since 1963 before UDP was approved. UDP wasinitially discussed during a mission reviewing the Urban Sector Memorandum (USM) of 1981, IDA'sfirst urban sector strategy paper for Bangladesh. Consultancy services were provided in 1984 and 1985 toprepare various components with the support of the United Nations Development Program (UNDP) andthe United Nations Center for Human Settlements (UNCHS). The project was apprais6d in March 1986,approved in June 1988, and made effective in January, 1989.

A. StatementlEvaluation of Obiectives

2. The objectives of the project were to assist the Government in improving the management andfinancing of urban development through:

(a) effective planning, management, and operation of municipal services, with particularemphasis on those having immediate environmental impact in the more denselypopulated and low-income areas of Dhaka and Chittagong;

(b) identifying replicable, cost-effective and affordable approaches to urban landdevelopment and shelter for middle- and low-income families by more efficient land usewith significant reduction in the cost of plots, and through full cost recovery with positiveinterest rates; and

(c) strengthening the planning, management and financial capacity of key local and nationalsector agencies; the Ministry of Housing and Public Works (MHPW) and the Housingand Settlements Directorate (HSD) for urban land development and the Ministry of LocalGovernment, Rural Development and Cooperatives (MLGRDC), the Dhaka City

Corporation (DCC) and the Chittagong City Corporation (CCC) for the provision andmanagement of municipal services.

3. These objectives were to be attained through a variety of specific initiatives. The entire projectwas originally divided into three major components: (i) the environmental improvements component; (ii)the area development and basic shelter component; and (iii) the project support technical assistance. Theenvironmental improvements component under DCC and CCC comprised about 80 percent of the originalproject cost. It involved storm water drainage/flood control and solid waste management in both Dhakaand Chittagong, low-cost individual/community sanitation in Chittagong, and small-scale infrastructureimprovements in low-income areas of Dhaka. The area development and basic shelter component underMHPW comprised about 10 percent of the original project cost and included area development for mostlyresidential plots and building loans for basic shelter in Chittagong. The remaining 10 percent of theproject cost was allocated to support institutional development of both agencies under MLGRDC andMHPW and at the ministry levels through technical assistance and some studies. Each implementingagency's original component and its cost were as follows:

* HSD under MHPW (total US $5.6 million):- Kaiballyadham area development in Chittagong (US $4.9 million)- Technical assistance within MHIIPW (US $0.7 million)

L DCC (total US $22.5 million):- Dholai Khal stormwater drainage improvements (US $11.9 million)- Solid waste management (US $5.7 million)- Low-income area improvements (US $3.8 million)- Technical assistance (US $1.1 million)

* CCC (total US $12.7 million):- Sheikh Mujib stormwater drainage improvements (US $7.0 million)- Solid waste management (US $3.5 million)- Sanitation (US $2.0 million)- Technical assistance (US $0.2 million)

* MLGRDC (total US $3.3 million)- Technical assistance (US $3.3 million)

4. The project objectives appear to be broadly consistent with the policy emphasis at the time. Thefirst Bangladesh urban sector strategy paper of IDA (USM of 1981), the only existing policy paper for thecountry at the time, brought out multiple and growing needs of the sector and their magnitude togetherwith the importance of proper policy sequencing. It recognized the need for some well thought-out projectinitiatives to narrow down the glaring gap between demand and supply of various urban services as wellas the ultimate importance of institutional strengthening to accomplish these goals. USM also emphasizesthat initial projects should not be overly ambitious. They should work to build local capacities in theurban sector as part of a long-term step-by-step programmatic approach. Both short- and medium-termprojects should be designed to improve the efficiency of the urban economy including the delivery ofbasic urban services, the ultimate goal of urban development. To that end, "projects which provide goodopportunities for both institutional development and sub-sector strategy reorientation as well for meetingimmediate needs should include area development schemes, transport projects, and environmentalsanitation projects," USM says. Inception of the project perhaps lay in these statements.

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B. Achievement of Obiectives

5. The overall implementation record or achievement of objectives, as reflected in the utilization ofthe credit, is poor. For example, allocation on the original project items could only utilize 48 percent ofthe total credit (or, US $21.12 million) by the end of the original credit closing date of June 30, 1997. InMay of the same year, the southern districts of the country were severely hit by cyclone. Observing lowutilization of the UDP credit and feeling the need for external support, GOB made a formal request inJune, 1997 to extend the credit closing by one year and to use the unutilized funds to repair some of thedamaged infrastructure, primarily roads, hit by the cyclone. IDA agreed to this proposal and thus thecyclone-damaged infrastructure rehabilitation component, implemented by the Local GovernmentEngineering Department (LGED), became the formal part of UDP. With this added component, theutilization record climbed up to 62 percent at the end of the project, June 30, 1998.

6. Physical Objectives: Given that a large part of the project (i.e., the Dholai Khal environmentalimprovement component under DCC implementation, some parts of the sanitation component underCCC, and the building loan component under HSD) had not been implemented, it appears that the projecthas been able to achieve its physical objectives only partially at best. A look at the record reveals that thephysical implementation of many components suffered enormously right from the beginning. Valuabletime was lost due to delays of different kinds leading to significant compromises in physical magnitude,and therefore, in utilization of funds. For example, only 6 percent of the total credit was utilized by theend of January, 1991 - two years after the project became effective - as opposed to targeted 18.5 percentby the first quarter of 1991, as outlined in the Staff Appraisal Report (SAR). Attempts were made, fromtime to time, to accelerate this slow pace of utilization of funds and to generally improve the status of thedelayed works. The mid-term review mission, which took place in June, 1993, found both the pace of theimplementation and utilization of funds falling far short of the project target schedules. The missionrecommended to drop some of the major items from the original package.

7. Dholai Khal Drainage: For example, some of the crucial works under the Dholai Khalenvironmental improvement component in Dhaka, primarily drainage improvements and construction ofroads, were dropped (amounting to US $8.8 million) in July, 1993 mainly due to GOB's failure toimplement the agreed resettlement plan. Funds for construction of pump station and some other items(totaling US 3.1 million), however, was retained, and the pump station was completed in 1997. It isimportant to note, despite concrete assurances, GOB failed to carry out the resettlement according to theplan agreed upon before the project approval. Subsequently, this cancellation reduced the total creditamount from its original value of US $47.6 million to US $38.8 mnillion, 18.5 percent reduction in theoriginal credit, by the middle of 1993.

8. Sheikh Mujib Culvert: Delays in project implementation and institutional weaknesses ofimplementing agencies characterized the project right from the beginning. Construction of the SheikhMujib culvert in Chittagong is another example. Delay in land acquisition (estimated two years), delay inapproval of tender (estimated two years and two months), error in design (estimated 100 meters short) andconsequent wrong estimation of sheet piles to construct required bays for the culvert (resulting inestimated one year and four months of delay), and delays in other administrative decisions by theconcerned ministries - all characterized the construction of the culvert. While work under this componentwent ahead eventually, speedier later than at the initial stages, and was completed in 1997, these delaystranslated to significant cost escalation. For example, the contract cost of US $7.0 million was increasedby approximately US $3.4 million, a whopping 50 percent, at implementation completion. A significantamount of this increased cost (estimated to be 41 percent) represents the delays in implementation (i.e.,price escalation) alone. As a result, the culvert had become more expensive than originally anticipated,and accordingly, the benefit is expected to be far reduced as well.

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9. Kaiballyadham Area Development: Most of the work under the area development component inChittagong was completed at the Kaiballyadham site by May, 1997, but this component also had someserious problems. It is important to note that this site of about 102 acres had been developed by cuttingand leveling hills. Though this often results in soil erosion causing drainage problems particularly duringmonsoon months, no environmental assessment was undertaken to identify these problems and torecommend mitigation measures because this project was classified as "Environmental Category C."Considering the relatively wide area of the development scheme requiring hill cutting, this categorizationis very questionable and some environmental analysis should have been done. Actually, IDA had torequest HSD to carry out the cleaning work, as early as December, 1992, to remove eroded soils. Inaddition, a housing loan in the tune of US $1.0 million had to be canceled due to lack of coordinationbetween HSD and the Agrani Bank, assigned to provide housing loan and collect mortgage repayment.This had delayed, as expected, the occupation of plots and the formation of revolving fund based on thecollection of mortgage repayment. Likewise in resettlement of project affected people in the Dholai Khalcomponent, solid assurance was also given by GOB before the project approval with regard to thecoordination between HSD and the Agrani Bank.

10. Given the fact that HSD started advertising for the Kaiballyadham plots in as early as 1992, it issurprising to note that the pace of settlement is extremely slow. Although the average price of land wasfound to be 30 percent lower than the current market rate,' it seems that the poor's response had beenrather lukewarm at best despite numerous attempts by HSD over the past few years. Out of the total 4144plots actually developed, some 3585 units have been so far allotted. Of this, only 2880 have been takeninto possession. While these numbers appear to be large, actual number of households living in theKaiballyadham area is very low. Only 350-400 households appear to be living there as of November,1998. Adding the on-going construction to this, total number of active plots (i.e., living plus those underconstruction) will not exceed 500 (slightly over only 10 percent of the total).

11. There are quite a few reasons behind this slow pace of settlement: (i) Kaiballyadham lacks basicservices. Except electricity, no other services are presently available. It is surprising to note that many ofthe infrastructure facilities (e.g., water reservoirs, schools, markets, community centers, communalgarbage bins, sanitation facilities, drainage, etc.) are physically present at the site. But operationalizingthese facilities requires inter-agency coordination2 which is completely absent at present. Furthermore,providing these services may not be cost-feasible if much of the area remains unoccupied; (ii) since thehouse building loan component was never implemented, the plot-owners have to arrange their own loan tobuild their houses. Many of them surely face severe fund constraint. The plot-allottees cannot apply tocommercial loans by using the allotment as a collateral as HSD does not give ownership of the land inorder to prevent land transfer. They have to wait 10 years to receive formal registration of the property.Consequently, it is not possible for many poor people to receive any loan without the ownership of thisland. This excludes targeted poor households from the housing loan market altogether and has indeed

The cost of land per katha (approximately, 68 sq. mts.), calculated on the basis of the price of lowest category land atKaiballyadham site (i.e., 30 sq. mt.), turns out to be Tk. 35,300. This appears to be lower, 30 percent or more, than the on-going market price spot checked during the May, 1997 mission. Such low price, and therefore, its apparent cost-effectiveness, may have been possible due to low real estate value of hills and other embedded subsidies in the project.Consequently, replicability of this component is questionable on financial consideration, in similar or other areas in thefuture. Furthermore, the govemment has very little public holding of land on which similar schemes can be replicated.

2 Prior to credit negotiation, HSD proposed, and subsequently IDA accepted, that the site will be maintained through amultitude of coordination among the local govemment service agencies. While roads, drains, markets and street lighting willbe managed by CCC, power distribution systems will be managed by the Power Development Board. CWASA will managewater supply while natural gas supply will be maintained by the Bakhrabad Gas Systems Limited. Health clinic will bemanaged and run by the Ministry of Health and schools will be run by the Ministry of Education. The overall managementwill remain in the hand of HSD. It is important to note here that on-site infrastructure facilities did not cost local serviceagencies any fixed investment since most of the on-site facilities have been built under the project.

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slowed down the pace of settlement; (iii) the location of the Kaiballyadham housing scheme is 14 kmfrom the city center. Given the lack of affordable transportation in the area, living at Kaiballyadham coststhe poor a substantial sum (Tk. 10 a day for traveling by tempo). Lack of economic opportunities in andaround the settlement area does exacerbate the situation further; and finally (iv) mixing of differentincome classes in the developed area, due to the need for cross-subsidization, may be a deterrent forsettlement by any particular class.

12. At this rate of settlement and in absence of the basic service provision in Kaiballyadham, qualityof the physical infrastructure will deteriorate very rapidly. As a matter of fact, many of the completedinfrastructure show signs of severe wear and tear. For example, the two water reservoirs together areexpected to hold 272,000 gallons of water if supply is ensured once. Since the Chittagong Water andSewerage Authority (CWASA) has not taken the responsibility of the water supply yet, the reservoirs arenot in use at present. Long gestation period between construction and their uses together with nomaintenance may lead to an eventual breakdown of the physical investments. An investigation of thereservoirs during the ICR mission of October, 1998, reveal that the relatively bigger reservoir placed onthe upper ground, with a capacity of 185,000 gallons, may just fall apart due to severe soil erosion on theeastern side. Similarly, lack of maintenance of the drainage has led to severe silting, making overflow aregular phenomenon. Although these problems may not pose any serious threat now since the settlementis low, they will become a serious burden to both the residents as well as the service agency. Marketcenters and community facilities show similar severe wear and tear due to absence of their proper uses.

13. Sanitation Component: The work under the sanitation component in Chittagong (US $2.0 million)was also much slower than expected. For example, only 16 private latrines had been completed by theoriginal credit closing date. As a result, the allocation for remaining 39 latrines awaited cancellation inMay, 1997. Similarly, out of planned 40 public toilets under the original project design, only 23 had beenconstructed by May, 1997. The ICR mission found that the completed public toilets seem to befunctioning relatively well. However, the mission noticed that the use of some of the public toilets is verylow. The reasons for the low use may be attributed to such factors as affordability (charging one Taka peruse), inconvenient location, or inadequate designs (men and women share the same entrance). Also, thelong-term maintenance remains an important issue and needs to be addressed.

14. Solid Waste Management: Under the solid waste management component, DCC purchased 44trucks and 220 de-mountable containers, and CCC purchased 48 trucks, one front-end loader, and fourtractors. In addition, workshop tools and equipment were provided for both cities. This componentfocused on purchase of machines and equipment only, and management aspects of solid wastecollection/disposal were not given adequate attention. As a result, solid waste management in the citieshave not significantly been improved according to some city officials.

15. Low-income Area Improvement: Three slums in Dhaka (Shaheednagar, Rasulpur, and Islambagh)benefited from improved basic infrastructure under this component. Main achievements includeconstruction of 17 km of roads and footpaths, three community centers, 482 latrines, etc. A quick surveyin the three improved slums during the ICR mission shows that, despite about 60 percent rent increaseduring the project period, approximately 80 percent of slum dwellers continue to live in the areas andenjoy the project benefits. More than 90 percent of the dwellers interviewed believe the project improvedtheir living conditions.

16. Cyclone Rehabilitation: This component, undertaken by LGED, was an 'add-on' to the project, andwas approved one month prior to the original credit closing date. It was necessitated following a requestfor assistance by GOB for the repair and rehabilitation of rural roads and small structures in the wake ofthe May 1997 cyclone which severely affected the south-eastern districts of the country. This componentrequired an extension of the project by one year and the tasks were to utilize unspent funds of the credit.

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Although there was a delay of several months before the actual works started in early 1998, the projectstaff of LGED, its consultants and the contractors were able to complete the 227 roads in six-districts bythe credit closing date (June 30, 1998).

17. Institutional Development Objectives: Achievement of the project's institutional developmentobjectives is negligible. It is evident that the project implementation had disproportionate emphasis onnumerous construction works while institutional aspects lacked direction, orientation and adequatefollowing-up. Institutional development components were incorporated in the project, through directsupport to the ministries via technical assistance; and, implementation support through ProjectImplementation Units (PIUs) attached to the three original implementing agencies (DCC, CCC, andHSD). These were designed primarily to improve planning, management and operational aspects of thisproject, of the agencies and the concerned ministries. However, an investigation of the implementationrecord together with the communications between all concerned ministries and agencies reveal that lackof planning and coordination, and failures to meet deadlines were two most important factors affecting theinstitutional strengthening components adversely, right from the beginning. These problems wereobserved in setting up the PIUs and in subsequent coordination with the co-financier, UNDP. Forexample, when a UNDP-funded technical assistance team arrived in Chittagong to work with CCC, thePIU was not established yet. The team focused on operational aspects only to find that initial tenders werenot completed. Unfortunately, operations under the project began only after the consultants left. The samewas true, with varying degrees, at HSD and DCC sites as well. Thus, much of the project work went onwith very little training and technical assistance due to lack of coordination between GOB, implementingagencies, UNDP, and IDA. Due to this problem, IDA had to channel some of the funds from othersources to provide technical assistance with regard to municipal finance for CCC at some later stage ofproject implementation.

18. The institutional support to project implementation work was most adversely affected, in DCCand CCC sites in particular, by the delay in creation of PIUs and in recruitment of personnel for thoseunits. Though retention of institutional memory is a crucial aspect for institutional strengthening andsmooth implementation under any project, frequent changes in staff at PIUs caused loss of institutionalmemory leading to slowdown of work at times. It is rather surprising to note that neither the project northe GOB had any long-term plan for retention of whatever institutional capabilities that the project couldeventually attain. For example, it seemed logical to incorporate the PIU staff from the implementationcycle into a maintenance squad of city corporations, as project components nears their completion. Thiswould be particularly necessary since the PIU staff, wherever continuity was maintained, would have theknowledge regarding the maintenance requirements of the particular civil works. Thus, when the projectdrew to an end, more PrU staff could have been released to meet the increasing maintenancerequirements. Since such a plan did not exist, implementing agencies lost valuable institutionalcapabilities through losing the PIU staff after the project implementation was completed. For example,many of the PIU staff in different sites have been transferred to unrelated departments or far away places.In case of CCC, the entire PTU staff were fired upon the credit closing. Thus, the entire institutionalmemory, acquired and retained over this project cycle, was lost.

19. According to SAR, three studies were supposed to be conducted under the project: (i) trafficmanagement; (ii) area-wide drainage in Chittagong; and (iii) manpower development and organizationaland managerial reforms in local government. However, it is very disappointing to note that noimplementing agency was aware of any of these studies, and that no study report was available for theICR mission. The mission had to conclude that these studies were not carried out.

20. Financial Objectives: Although the project called for a substantial change in financialmanagement of the local governments, DCC and CCC in particular, financial objectives were largelyunattained. UDP was carried out, by and large, without much attention to the improvement of the

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financial management even though SAR stipulated detailed financial action plans for both the citycorporations as well as HSD. For example, reduction of arrears in tax revenues together withmaximization of property value through regular assessments were suggested as two key instruments inSAR for improved financial management at the city corporations. However, the present tax structure andcollection pattern do not reflect any of the suggested changes. Similarly, much of the suggested revolvingfund, arising out of selling plots at Kaiballyadham, had not evolved yet due to slow possession at theHSD site. As a matter of fact, it appears that the implementing agencies as well as IDA's projectsupervision had paid very little attention to the financial aspects of the project. Consequently, thefinancial objectives of the project had not been achieved well.

21. Sector Policies: UDP was the IDA's first comprehensive lending in the urban sector inBangladesh. Drawing on the past experience in assisting GOB in water supply and sanitation in urbanareas, IDA tried to broaden the base in other essential urban services in the two largest cities of thecountry. Given the growing need of the urban sector, therefore, the project had potential to be a model forsimilar investments in other cities of Bangladesh. However, as the experience from this project suggests,physical investments in the urban sector should be preceded or entailed by comprehensive institutional,financial, and policy reforms. Piecemeal physical investments without paying much attention toinstitutional, financial and policy issues may not be enough to meet the growing needs of this sector inBangladesh. Thus, the project had only a partial impact on the sector policies.

C. Maior Factors Affecting the Proiect

22. Implementation of UDP was severely affected by many factors. The most important factor thatnegatively affected project implementation, among all, was the delay in land acquisition. One of the majorfactors for late start in many of the components was GOB' s inability to acquire land in time.Underestimation of cost of land, subsequent underestimation of required counterpart funds, and resultantshortage of counterpart funds also contributed to the slow land acquisition, especially in the beginning.On average, the delay in land acquisition slowed work by two years. This delay had virtually upset manycomponents of the project.

23. Following this, GOB was also unable to appoint key personnel at different PIUs. Delay inrecruitment and periodic transfer of staff showed very little GOB's commitment to the project. Theoverall progress of the project (such as construction of the Sheikh Mujib culvert and procurement ofgarbage trucks) was seriously hurt by the slow and cumbersome procurement processing by GOB. Themovement of proposals and counter-approvals often took up a lot of time. For example, the approval of acontractor for the construction of Sheikh Mujib culvert took almost 26 months. The existing institutionalbottlenecks (e.g., usual bureaucratic delays in administrative procedures) seriously affected the progressof the project. Consequently, the performance of the project was affected substantially.

24. Much of the work under the project took place during the second half of the project cycle, i.e.,1993 to 1997. A significant portion of this period was characterized by severe political disturbances in thecountry. Starting from June, 1994 until March, 1996, hartals (general political strike) caused loss ofworking days ranging between 167-274 days. Loss of working days in the tune of 25 percent or moreaffected the performance of the project adversely which was essentially beyond any implementingagency's control.

25. In addition, there was a gap of almost 7-8 years between design of the various physical works andtheir implementation due to implementation delays. This had implication on the cost as well as onrelevance. For example, the length of the Sheikh Mujib road culvert was 2250 meters, as opposed to 2150meters originally designed by the contractor, which was only discovered at the time of implementation.

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This caused serious delays in construction of bays (16.5 meters) within the allowed time and createdtroubles regarding materials available for construction.

26. Furthermore, throughout the project, and most likely afterwards, the PIUs remain outside therealm of the implementing agencies. This is because the implementing agencies created the PIUs insomewhat distance from the mainstream of the work of the agencies. As a result, the implementation hadto face even internal resistance. Lack of support for the PIUs from the implementing agencies themselveshad often caused ineffectiveness of management, implementation delays and lack of adequate monitoringand evaluation.

27. Finally, technical assistance acted very little to benefit the implementing agencies. It had beennoted earlier that there was serious lack of coordination between GOB, implementing agencies, co-financier, and IDA in implementation of the technical assistance component which was originallydesigned to improve the institutional capabilities at different stages of project implementation. Themanagement, supervision and training of the project staff was virtually void of any technical assistancedue to lack of coordination and inappropriate timing. Consequently, these factors affected the projectquite adversely, and quite substantially.

D. Proiect Sustainability

28. Overall, project sustainability is unlikely. The project had achieved very little in terms of makingthe implementing agencies attain their financial goals as laid out in the financial action plans in SAR. Asa matter of fact, there was very little attention paid to this aspect during the implementation of the project.Consequently, the project had very little or no impact on reducing the financial dependency of theimplementing agencies, DCC and CCC in particular, on external grants and aid. The economics of theproject thus changed significantly due to the lack of improvement in financial management of theimplementing agencies and cancellation of many components under the project. Also, for theKaiballyadham area development component, there is a general apprehension that payment for thedeveloped plots may not be recovered due to lack of institutional capabilities. Failure to establisheffective housing loan arrangements and subsequent irrelevance of the Agrani Bank assigned to managethe revolving fund make this apprehension a real possibility in the future. Therefore, it is unlikely that theproject is financially sustainable.

29. Another important factor for sustaining the project benefits is to ensure proper operations andperiodic maintenance of the completed physical works. For example, the sustainability of the SheikhMujib culvert and any other similar components depends squarely on how these works will be maintainedas physical works such as the culvert require regular maintenance for its long-term sustainability. Whilethe culvert seems to have worked effectively in channeling a large amount of water into the Karnaphuliriver, connecting canals (the Nasir Khal in particular) had also brought heavy silt deposits, unabated bysilt guards or any other obstacles, into the completed box culvert in the past heavy monsoon season. Inabsence of the box culvert, the silt used to be deposited on the surface of the canals causing periodic floodduring the rainy season. A preliminary testing inside the box culvert during the ICR mission of October,1998 showed that silt deposits ranged between 2 inches to 2 feet. This raises an immediate concern aboutthe long-term effectiveness of the culvert. Since the height of the box culvert is about 10 feet in mostplaces, silt deposits ranging 2 inches to 2 feet in just one season may have serious consequences in thelong run, if went unchecked and not properly cleaned. In addition, given the nature and quality of thewater flow through the canals carrying a large amount of plastic bags, at least one to two thorough clean-up is required at the beginning of the dry season followed by a regular clean-up of the silt guards at themouth of the culvert. The ICR mission brought these points to the attention of CCC executives, and it isencouraging to note that CCC shared these concerns and agreed that a detailed operational plan will beworked out to address these issues.

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30. The sanitation and solid waste management components, such as building public- toilets andpurchasing equipment for garbage collection, require viable and self-sustaining institutions to run them.However, the project failed to effectively strengthen the institutions in charge of these environmentalservices. In addition, one of the reasons that the pace of settlement is very low in the area developmentcomponent in Chittagong is that such basic services as water supply, health and education are notavailable in the site due to lack of coordination between HSD and service providers. Also, the developedsite is away from the place of economic opportunities. Since most of the poor, the majority of theintended beneficiaries, cannot afford a long distance travel to the city center where most of the economicopportunities are presently available, quick possession of the plots by the poor would require makingeconomic opportunities available in and around the housing sites. Credit assistance, skill-developmentthrough training and other initiatives to develop the economic opportunities is essential. NGOs could beinvolved in developing these aspects. The project sustainability would thus require integration of essentialservices and economic aspects to the poor's need for housing. Without essential services, economicopportunities and community participation possibly through NGO assistance, it is not expected that thisscheme is sustainable.

E. IDA Performance

31. Identification: IDA's performance in project identification was generally satisfactory with theproject scope being consistent with the government's priorities and IDA's sector strategy at the time(USM of 1981).

32. Preparation Assistance: IDA' s preparation assistance was not just enough to fully complete thenecessary preparation activities. For example, preparation of detailed engineering designs and biddocuments for such major works as the Dholai Khal drainage and the Sheikh Mujib Culvert was notcompleted even at the time of credit negotiations. Although it seems this was an accepted practice whenthis project was being prepared, the low quality at entry significantly delayed and negatively affectedproject implementation at a later stage.

33. Appraisal: Project appraisal by IDA was somewhat deficient. IDA's appraisal failed to identifya great risk concerning land acquisition and resettlement. These are the two main factors that adverselyaffected project implementation. GOB's inability to acquire land in a timely manner seriously delayedmany components. In fact, locations and areas of required land for some components were not evenidentified before or at appraisal. Also, implementation of the Dholai Khal drainage improvementcomponent required resettlement of 418 families, and the component was eventually cancelled due toGOB' s failure to implement the agreed resettlement plan.

34. Three risk factors of the project identified at appraisal were: (a) lack of sustained commitment onthe part of DCC and CCC to raise sufficient revenues to cover project investments and debt services; (b)difficulties in attracting and maintaining qualified personnel for timely implementation; and (c)inadequate coordination at the national level. However, it appears that all three guidelines to minimizethese risks have very minimally or not attained their desired goals at all. For example, the proceduralreform in local property tax administration and gradual introduction of reassessments to make thecorporations financially self-sustainable have not been attained. As a matter of fact, there has been verylittle emphasis on the improvement of the financial structure of the city corporations under the project.While the manpower development through technical assistance and studies for MLGRDC and MHPWhave been incorporated into the project, it failed to attain the desired goal. Furthermore, contractualarrangement of personnel under the PlUs and/or periodic transfer of personnel under the PIUs do notallow for long-term retention of qualified personnel during and after the project. Finally, the observedlong delays in approval, for even a minimal change in proposed work under the project, indicate that

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strengthening the planning cells of the two sector ministries had not yielded the desired results, either.Consequently, factors which were termed risky at appraisal remained risky towards the end of-the project.

35. Supervision: Project supervision by IDA was also inadequate. IDA did not commnit enoughsupervision efforts for this project. Most of the time, IDA's supervision team consisted of only twomembers (one financial analyst and one sanitary engineer in early years, and one financial analyst and oneprogram officer in late years). Even though the project was long suffering from problems related toresettlement and land acquisition in early years of project implementation, a resettlement specialist joinedIDA' s regular supervision mission only once. It is important to note here that the supervision efforts weresometimes not commritted full time. As a result, the supervision visits were severely stretched out betweenvisiting numerous components of the project with very little impact on the quality of the project. Thedemand of Dhaka, as a project site as well as the location of the GOB Secretariat, made it difficult forIDA mission to visit other sites in Chittagong often. A lack in follow-up actions was also observed inalmost all stages of project implementation. Furthermore, a serious lack of coordination betweenheadquarters, resident mission and government agencies was observed in different stages of projectimplementation. For example, routine agreements were reached at the end of supervision visits, to bedisregarded or discarded altogether later. Follow-up actions were not communicated well by theheadquarters and/or not carried out effectively in the field by the resident mission.

F. Borrower Performance

36. Preparation: Project preparation by the Borrower was deficient. Preparation activities such asdetailed engineering designs for major works or identifying and acquiring the necessary land were notcompleted and, therefore, these activities occupied significant portion of initial years of implementation.Though GOB prepared operational action plans which detail the measures to be taken regarding landacquisition, engineering designs for the various sub-components, and institutional arrangements, andagreed with IDA on the schedule to implement the plans, GOB failed to implement the plans according tothe agreed schedule.

37. Implementation: Given that project implementation was significantly delayed and that the majorcomponent (the Dholai Khal drainage improvement) was cancelled due to resettlement problems, projectimplementation by the Borrower was also deficient. In addition, institutional and policy issues were notgiven adequate attention by the Borrower, throughout the implementation period, due to its lack ofcommnitment to these issues.

38. Resettlement: GOB's failure to implement the agreed resettlement plan for Project AffectedPeople (PAP) in the Dholai Khal site was mainly due to GOB's lack of political commitment and lack ofinstitutional capacity on the part of DCC which was responsible for implementing the plan. According tothe resettlement plan (prepared in 1988), 418 families were supposed to be relocated to a DCC-ownedsite located about 2.5 km away from the Dholai Khal area. The plan says that public transport is readilyavailable adjacent to the new site, as are employment opportunities. The plan provides for each family toreceive a plot of land (average 40 square meters) and a semi-pucca house (brick walls and GI sheetroofing) in the resettlement site with basic facilities such as a water stand-post (one per 10 households)and a pour flush latrine. Compensation was also to be paid to the PAP to assist with the move. It is feltthat both GOB and IDA focused more on preparing the plan rather than implementing the plan, and thatDCC's limited institutional capacity to implement the plan or its lack of experience in resettlement wasnot given adequate attention initially. Some DCC officials informed the ICR mission that part of thereasons for the resettlement failure was IDA's lack of flexibility as IDA insisted on implementing theresettlement plan strictly in the way agreed, i.e., relocating all the 418 families to the resettlement site,which was proved very difficult. It is interesting to note that in 1998 DCC started rehabilitation of theDhlai Khal drainage works with its own funds by just paying financial compensation to the PAP.

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39. Cyclone Rehabilitation: Implementation of this component, which was added to the project in1997 to rehabilitate the infrastructure damaged by the cyclone of May 1997, was successful. However,start-up of this component was delayed, despite its emergency nature, due to the slow pace of processingthe necessary administrative work both by IDA and GOB. As a result, implementation of the componentonly commenced in early 1998, leaving less than six months for implementation. Implementation itself byLGED was very successful, rehabilitating 227 roads in the short period of time and utilizing most of theremaining credit of the project. The timely completion of this component indicates the relatively efficientorganization and delivery mechanism that LGED has built up in the rural areas of Bangladesh, but thesustainability of the sub-components would depend to a large extent on regular maintenance and periodicupgrading of infrastructure. LGED does maintain a large network of field-based as well as project staff,but the crucial element would be the timely identification of any future damage (such as during the severefloods in mid-1998) followed by the allocation of resources for repair and rehabilitation.

40. Covenant Compliance: Despite the implementation problems, IDA's record show that most ofthe covenants were complied with. As of February 1999, there is still one overdue audit report.

41. Operation: Operational aspects of the project was unsatisfactory. One of the major operationalproblems is related to poor coordination between HSD and service agencies at the Kaiballyadham areadevelopment site in Chittagong. As a result, people who have actually started living in the area suffergreatly from lack of basic services such as water supply. This serious problem needs to be addressedurgently through improved coordination among the agencies and full community participation (please seethe section B above for more details).

G. Assessment of Outcome

42. Overall Outcome: Overall outcome of the project was unsatisfactory in view of the limitedachievements of the project's development objectives. In fact, IDA's supervision record shows that thisproject was rated as a "problem project" from 1990 to 1993 and again in 1996 and 1998.

43. Ex-post Economic Analysis: Conducting project's ex-post economic analysis was not possibledue to lack of adequate data. In June 1998, IDA initially provided GOB with the list of data required toconduct the analysis for three original components: (i) the Dholai Khal drainage improvement; (ii) theslum improvements in Dhaka; and (iii) the Kaiballyadham area development, and followed up on datacollection with implementing agencies during the ICR mission of October, 1998. Unfortunately, however,the data collection by the agencies was never completed. The severe floods in the middle of 1998, whichparalyzed the country for several months, were the major reason that prevented the speedier datacollection, together with agencies' inadequate capacity for data collection and record keeping.

H. Future Operation

44. Most of the completed works were transferred to the agencies responsible for operations andmaintenance (O&M) except for the Kaiballyadham area development component (see the sections B andF above for operational problems related to this component). At IDA's request, HSD submitted inDecember 1998 an action plan to solve the problems at Kaiballyadham (see Appendix C), butimplementation of the plan needs to be monitored closely.

45. Another operational issue is related to the pumping station created under the project as part of theDholai Khal drainage component in Dhaka. The pumping station is in a good condition and demonstratedbenefits during the severe floods of mid-1998, saving the adjacent areas from being flooded. Though thiscomponent was implemented by DCC, the station was handed over to the Dhaka Water and Sewerage

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Authority (DWASA) in March, 1998, as DWASA is now officially responsible for managing storm-waterdrainage systems in Dhaka. DWASA's institutional and financial capacity to assume this responsibility isnow being reviewed under the Fourth Dhaka Water Supply Project (also financed by IDA). Please see thesection D above for an operational issue of another major component of the Sheikh Mujib Culvert inChittagong.

46. As part of the Borrower's contribution to the ICR, IDA requested each implementing agency toprepare an Operational Plan (OP) to ensure continued operations of the assets created or rehabilitatedunder the project. Most of the agencies submitted OP with a various degree of quality (attached asAppendix C). JDA's record show that this project did not set up any concrete performance indicator,which is now required, to monitor physical, operational, and financial progress of the project.

I. Key Lessons Learned

47. The key lessons learned from this project relevant for other urban projects in Bangladesh andother countries are discussed below. These lessons have been incorporated into designs of the IDA-financed new urban project in Bangladesh, the Municipal Services Project.

48. More Resources for Supervision: Adequate resources should be made available forsupervision. This project was rated as a "problem project" from 1990 to 1993 and again in 1996 and 1998.Most of this period, IDA' s supervision mission consisted of only one or two members, visiting the projectsites less frequently than necessary. In such a case where a project suffers a long history of non-perforrning status, a sector manager or higher level should intervene to ensure that the composition of asupervision team and/or frequency of a field visit is adequate, that supervision team is well prepared toaddress all the problems, and that action plans agreed during supervision mission is followed up in atimely manner.

49. More Emphasis on Institutional Issues: Institutional strengthening should receive more andexplicit attention than what was given in this project. This is very critical, especially in Bangladesh,where institutions are in dire need of reforms. This project is a prime example of how institutionalweaknesses can seriously damage the quality of relatively simple physical works. In addition, PIUsshould be integrated more into the system within the implementing agencies. They should not hang looseand let go as soon as the projects have been completed. This will ensure valuable institutional memoriesto be available within the institutions.

50. Build Local Capacity for Resettlement: The major problem facing the project was GOB'sinability to implement the agreed resettlement plan. IDA should have put more emphasis onimplementing the plan rather than preparing the plan by building local capacity to deal with resettlementissues. Considering the weak capacity of DCC responsible for implementing the plan, more assistanceshould have been provided in this field in the beginning. In preparing a resettlement plan where suchresettlement is unavoidable, more attention should be given to institutional capacity of a local agencyresponsible for resettlement, and the plan should be formulated based on full participation of all the PAP.

51. More Flexibility for Emergency Assistance: Although the cyclone rehabilitation componentwas added to the project in May, 1997, after the devastating cyclone, implementation of the componentonly started in early 1998 despite the emergency nature of the component. Before emergency operationscould be included in the project, exchange of necessary information between GOB and IDA had to takeplace and certain other processing requirements had to be fulfilled, as a result of which the newemergency component could not be started as quickly as it would have been desirable. In a country likeBangladesh which is prone to frequent natural disasters, there should be projects that are flexible enough

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to reallocate project funds for emergency assistance without having to go through the time-consumingpaper work.

52. More Effective Monitoring and Evaluation: Conducting ex-post economic analysis was notpossible due to lack of adequate data. In addition, concrete performance indicators were not set up for thisproject to monitor progress and development impacts. In order to make ex-post economic analysis easierand to avoid cumbersome data collection at project completion, all the data necessary for the analysisshould be part of the project's performance indicators which need to be monitored and recorded properlyduring project implementation and operation. It is also very important to help build institutional capacitiesof implementing agencies for effective monitoring and evaluation.

53. More Beneficiary Participation: Most of the components of this project was engineering work,and designed and implemented with little consideration to local involvement and participation.Consequently, some of the completed works are underutilized (e.g., community latrines) and/or far frommeeting the targeted local needs (e.g., area development). Not to mention the need for beneficiaryparticipation in every stage of development projects, government officials should be trained to improvetheir skills in community participation, in addition to technical and managerial skills.

54. Simplify Project Design: The design of the project included multi-sector investments in twocities, therefore involving many implementing agencies. Without focus, the project became difficult forthe Borrower to manage and for IDA to supervise. Therefore, the size and complexity of projects shouldbe reduced, focusing on specific sub-sectors, with a limited number of components that can beimplemented by one or a few agencies.

J. Evaluation of Program Obiective Categories

55. Poverty Reduction and Other Social Objectives: Though poverty reduction was not the mainobjective of the project, the project did have a positive impact on the poor through improving livingconditions of the three slums in Dhaka. Impact of the Kaiballyadham area development scheme inChittagong on the targeted poor population is yet to be seen due to the slow pace of settlement in the area.

56. Environmental Objectives: The completed Sheikh Mujib culvert in Chittagong and the DholaiKhal pumping station in Dhaka were put to an immediate test by the severe floods of 1998. It appears thatthese new infrastructure worked fairly well even though the flood was one of the major in the country'shistory. Consequently, it is expected that these facilities will have substantial contributions, if maintainedproperly, towards environmental improvement of the two cities. The pumping station would have beeneven more effective if the construction of the associated culvert had not been dropped from the project.

Part- II

Statistical Tables

Table 1 : Summary of AssessmentsTable 2 Related Bank Loans/CreditsTable 3 : Project TimetableTable 4 : Loan/Credit Disbursements: Cumulative, Estimated and ActualTables 5 and 6 : Key Indicators for Project Implementation and OperationTable 7 : Studies Included in ProjectTable 8A : Project CostsTable 8B : Project FinancingTable 9 : Economic Costs and BenefitsTable 10 : Status of Legal CovenantsTable 11 : Compliance with Operational Manual StatementsTable 12 : Bank Resources: Staff InputsTable 13 : Bank Resources: Missions

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Part II - Statistical Tables

Table 1: Summary Assessments

A. Achievement of Objectives Substantial Partial Negligible Not Applicable

Macroeconomic Policies LI LI Li 0Sector Policies E] LI LiFinancial Objectives Li L LiInstitutional Development Li i L-iPhysical Objectives Li Eli LOPoverty Reduction ]z LI IGender Concerns Li 0l 0Other Social Objectives LI Li 0 LEnvironmental Objectives O El 0 0]Public Sector Management ] 0i [I 0Private Sector Development OL Li 0 LOther (specify) Li z

B. Project Sustainability Likely Unlikely UncertainFI 0

HighlyC. Bank Performance Satisfactory Satisfactory Deficient

Identification n ELPreparation Assistance i 0 zAppraisal O 0 3Supervision L i 3

HighlyD. Borrower Performance Satisfactorv Satisfactory Deficient

Preparation [ L1iImplementation i L zCovenant Compliance l z lOperation (if applicable) i L z

Highly Highl,vE. Assessment of Outcome Satisfactory Satisfactory Unsatisfactory Unsatisfactory

L i X L

- 15 -

Table 2: Related Bank Loans/Credits

LoanlCredit Title Purpose Year of Approval Status

1. First Dhaka Water To address poor institutional and 1973 CompletedSupply Project financial capacity of the Dhaka Water(Cr.368-BD) Supply Sector, and increase service

provision and efficiency in Dhaka.2. Second Dhaka Water To increase the capacity of water 1979 Completed

Supply Project supply to meet the immediate needs of(Cr.941-BD) the people in the Dhaka Metropolitan

area for potable water and to providesewage disposal facilities.

3. Third Dhaka Water To support Government of Bangladesh 1986 CompletedSupply Project in providing equitable and improved(Cr. 1734-BD access to basic water supply and

sanitation services. The objectivesincludes concern for the cost-effectiveness of both capitalinvestments and operations andmaintenance, and for the extension ofcoverage

4. Fourth Dhaka Water The basic objectives of the project are 1996 UnderwaySupply Project to: (i) commence a program of(Cr.2926-BD) - 1996 institutional reforms that would lead to

efficient operation of the water andsanitation sector in Dhaka on acommercial basis and prepare astrategy to enhance private operationsand mobilize private finance; (ii)increase the life of existing assets andreduce water losses through a waterloss reduction and rehabilitationprogram; (iii) strengthen waterresources management for the greaterDhaka area, by optimnizing use ofavailable water resources in the mosteconomic and environmentallyacceptable way; and (iv) increasepotable water supply in the Dhaka areaby effectively utilizing availablesurface and groundwater resources toexpand water supply in the Dhakametropolitan area.

5. First Chittagong To address problems of inadequate 1963 CompletedWater Supply Project water supply in Chittagong City.(Cr.367-BD)

- 16 -

6. Second Chittagong The project provided additional 1980 CompletedWater Supply Project supplies of water to meet the needs of(Cr.1001-BD) Chittagong's growing population and

industry up to 1990.Following Operat _i.o.n

1. Municipal Services The principal objective of the 1999 Just ApprovedProject proposed project is to improve

environmental and infrastructureservice delivery in urban areas.Specifically the project will: (a)strengthen the institutional capacity ofselected municipal corporations andsecondary towns to plan, finance,implement and operate urbaninfrastructure services in an efficientand sustainable manner; (b) improveresource allocation and fiscaldiscipline through the creation of animproved financing mechanism forurban infrastructure investment; and(c) support Government ofBangladesh (GOB) and municipalitiesto reduce urban poverty and improveenvironmental conditions of urbancommunities through the financing ofcritical urban infrastructure andservices.

- 17 -

Table 3: Proiect Timetable

Steps in Project Cycle Date Planned Date Actual/Latest Estimate

Identification 05/25/1981

Preparation 09/1981 10/26/1981

Appraisal 02/16/1986 02/16/1986

Negotiations 05/17/1988 05/17/1988

Board Presentation 06/21/1988 06/21/1988

Signing 07/29/1988 07/29/1988

Effectiveness 10/27/1988 01/25/1989

Midterm Review 06/20/1993

Loan/Credit Closing 06/30/1997 06/30/1998

ICR Preparation 12/31/1998 05/26/1999ICR Preparation

Table 4: Loan/Credit Disbursements: Cumulative, Estimated and Actual(US$ Million)

IDA Financial Year Appraisal Estimate Actual Actual as % of Estimate1989 1.44 2.01 139.581990 7.16 2.26 31.561991 14.26 2.45 17.181992 21.86 4.22 19.301993 29.49 7.08 24.001994 36.15 10.19 28.181995 41.37 13.70 33.111996 45.13 17.08 37.841997 47.52 22.50 47.341998 47.52 29.96 63.041999 47.52 31.03 65.29

Date of Final Disbursement November 3, 1998

- 18 -

Table 5 and 6: Key Indicators for Proiect Inplementation/Oneration

I. Key indicators in SAR Estimated Actual1. N.A. N.A.

3. lII. Modified indicatorsN...A

3 .m. Otherindicators1. N.A. N.A.2.3.

III. O ther indicators__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _

1. N.A. N.A.

3.

Note: Specific performance indicators were not set up for this project.

Table 7: Studies Included in Proiect

No. Study Status Impact of study

1. Traffic Management Study Unknown

2. Study of Area-wide Drainage in Unknown

l Chittagong3. Study of Manpower Development

and Organizational and Managerial UnknownReforn in Local Government

- 19 -

Table 8A: Proiect Costs

Appraisal Estimate ActuallLatest Estimate(US$ million) (US$ million)

Local ForeignItem Costs Costs Total Total

A. MHPW1. Kaiballyadham Area Development 4.5 0.4 | 4.9 | 4.32. Technical Assistance 0.2 0.5 0.7 0.6

B. MLGRDC1. Storm-water Drainage 15.9 3.2 19.1 26.62. Solid Waste Management 3.8 5.4 9.2 7.83. Sanitation 1.8 0.2 2.0 0.64. Slum Improvement 3.4 0.4 3.8 3.85. Project Implementation Support 1.0 0.1 1.16. Technical Assistance 0.6 2.7 3.3 3.77. Cyclone Rehabilitation - - - 5.3

C. Physical Contingencies 3.0 1.2 4.2D. Price Contingencies 12.6 4.6 17.2

TOTAL 46.9 18.7 65.6 52.7

Table 8B: Proiect Financing

Appraisal Estimate Actual/Latest Estimate(US$ million) (US$ million)

Local ForeignSource Costs Costs Total Total

IDA 32.7 14.9 47.6 31.1

UNDP 0.8 3.8 4.6 l

Domestic Contribution 13.4 - 13.4 21.6

TOTAL 46.9 18.7 65.6 52.7

Table 9: Econonic Return and Benefits

Component Appraisal Estimate Actual (at Final Development)1. Dholai Khal Drainage Improvement 48%2. Kaiballyadham Area Development 13%3. Slum Improvement in Dhaka 48%

Note: Conducting ex-post economnic analysis was not possible due to lack of reliable data.

- 20 -

Table 10: Status of Le2al Covenants

Covenant Original RevisedAgreement Section Type Present Fulfillment Fulfillment Description of Covenant Comments

Status Date DateDCA 3.01(a) 10 CP GOB to implement through HSD, Housing Loan

Parts E and F.1 of the Project as arrangements weredescribed in Schedule 2 of the DCA dropped.and provide promptly the funds,facilities and other resourcesrequired for the project.

3.01(b) 03 CD GOB to cause DCC and CCC to During FY91/92Implement the Project components availability of adequateand provide adequate funds, facilities funds was a constraint onservices and other resources required implementation of DCCfor the Project. component.

3.01(c) 10 CP GOB to cause HSD to implement E Housing Loanand F. 1 of the Project in accordance arrangements werewith Implementation Program set dropped.forth in Schedule 4 of DCA

3.02(a) 03 C GOB to re-lend part of proceeds of Complied with.Credit to DCC and CCC underseparate subsidiary loan agreementsat 12.5 percent repayment over 20years including a five-year graceperiod.

4.01(a) 01 C GOB to maintain or cause to be Complied with.maintained by GOB departments oragencies, records, and accounts toreflect operations resources andexpenditures in respect of Parts E andF of the Project

4.01(b) 01 C 03/31/1990 03/31/1990 GOB to have records and accounts Complied with.referred to in 4.01 (a), including thosefor the Special Accounts, for eachfiscal year audited by independentauditors acceptable to IDA and toprovide to IDA, no later than 9months after end of fiscal year,certified copies of financialstatements and audits reports

4.01(c) 01 C GOB to maintain or cause to be Complied with.(i)and maintained, in accordance with 4.01(iii) (a) separate records and accounts for

all expenditures for whichwithdrawals are requested on basis ofStatements of Expenditure (SOE) andretain evidence of such expendituresone year after IDA has received theaudited report for the fiscal year inwhich the last withdrawal from theCredit Account was made.

4.01(c) 01 C 03/31/1990 03/31/1990 GOB to ensure that SOE accounts are Comphed with.(i)and(ii) included in the annual audit referred

to in 4.01 (b) and that the reportincludes a separate opinion on theSOE audit.

PA 2.01(a) 10 CP DCC to carry out Parts A.1, B.1, D Part A.l of the project wasI_________ I_______ _________ and F.2 of the project as per the cancelled in July 1993._

- 21 -

Covenant Original RevisedAgreement Section Type Present Fulfillment Fulfillment Description of Covenant Coitments

Status Date DateImplementation Program set forth inSchedule 4 of the DCA, to the extentsuch obligations are applicable toDCC.

2.01(b) 01 C DCC to carry out obligation in Complied with.Selections 9.03 to 9.08 of GeneralConditions and shall not, withoutIDA agreement, take or concur to anyaction which would have the effect ofamending, abrogating assigning orwaiving the DCC subsidiary loan.

4.01(a) 01 C DCC to maintain its records andaccounts in accordance with soundaccounting practices to reflect.

4.01(b) 01 C 03/31/1990 03/31/1990 DCC to have its annual records, Project Report and Audits(i)and(ii) accounts and financial statements for of DCC financial

each fiscal year audited by independent statements are no longerauditors acceptable to provide IDA, no required.later than 9 months after the end ofeach fiscal year, certified copies of

l_______ _________ financial statements and audit reports2.01(b) 10 C CCC to carry out Parts A.2, B.2, C, F.3 Complied with.

of the Projects as described in Schedule2 of the DCA.

2.01(b) 10 C CCC to implement Parts A.2, B.2, C Complied with.and F.3 of the Project as per theImplementation Program set forth inSchedule 4 of the DCA, to the extentsuch obligations are applicable to CCC.

4.01(a) 01 C CCC to maintain its records and Complied with.accounts in accordance with soundaccounting practices to reflect itsoperations and financial conditions.

4.01(b) 01 CP 03/31/1990 CCC to have its annual records, Project Report and Audits(i)and(ii) accounts and financial statements for for CCC financial

each fiscal year audited by independent statements no longerauditors acceptable to IDA, and to required.provide IDA no later than 9 monthsafter the end of each fiscal year,certified copies of financial statementsand audit report.

Covenant types: Present status:

1 = Accounts/audits 8 = Indigenous people C = covenant complied with2 = Financial performance/revenue 9 = Monitoring, review, and reporting CD = complied with after

generation from beneficiaries delay3 = Flow and utilization of project funds 10 = Project implementation not covered by CP = complied with partially

categories 1-94 = Counterpart funding 11 = Sectoral or cross-sectoral budgetary or NC =not complied with

other resource allocation5 = Management aspects of the project or executing agency 12 = Sectoral or cross-sectoral policy/

regulatory/institutional action6 = Environmental covenants 13 = Other7 = Involuntary resettlement

- 22 -

Table 11: Compliance with Operational Manual Statements

Statement number and title Describe and comrnent on lack of complianceN.A. N.A.

N.A. N.A.3. N.A. N.A.

Table 12: Bank Resources: Staff Inputs

Planned ActualStage of Project Cycle Weeks US$ (000) Weeks US$ (000)

Preparation to Appraisal - 110.4 110.8Appraisal 33.0 64.1Negotiations throughBoard Approval _ 80.2 169.9Supervision - 340.0 428.7Completion _ 17.8 43.2TOTAL _581.4 816.7

- 23 -

Table 13: Bank Resources: Missions

Performance Rating

SpecializedStage of Month/ Number Days in Staff skills Implementation Development

Project Cycle Year of persons Field Represented Status Objectives05/81 5 11 US,FA, IA, SE, PS

Through Appraisal 10/81 4 11 US, FA, IA, US01/82 1 13 UE02/82 1 3 US06/82 1 6 US NA NA07/83 1 5 -

10/83 2 10 US03/84 3 10 PS, US08/84 4 11 FA, US, RS, EC02/85 5 15 FA, US, IA07/85 5 14 SE, FA, EC02/86 8 27 FA, SE,

Appraisal 04/86 4 4 -

Through 11/86 2 8 FA, SE NA NABoard Approval 09/87 1 4 FA, SE

11/87 1 7 -11/87 3 11 -

04/88 3 1211/88 - - HS HS

Supervision 04/89 - 25 HS HS10/89 3 16 SE, FA S HS03/90 3 21 SE, US, RS S S10/90 3 16 SE, FA, PS U S03/91 2 23 SE, FA U S10/91 2 20 SE, FA U S05/92- 1 14 FA U S09/92 2 20 SE, FA U S04/93 2 16 SE, FA U S11/93 2 19 SE, FA S S10/94 2 - IA, US S S04/95 2 12 FA, US S S10/95 2 10 FA, US S S05/96 2 22 FA, US U S09/96 3 15 FA, US S S03/97 3 14 FA, US S S05/98 1 5 US NA NA07/98 1 5 US NA NA

Completion 11/98 3 12 UE, US, EC S U

Key: FA: Financial Analyst HS: Highly SatisfactorySE: Sanitary Engineer S: SatisfactoryPS: Procurement Specialist U: UnsatisfactoryRS: Resettlement Specialist NA: Not ApplicableIA: Infrastructure Advisor -: No Record AvailableUE: Urban Environmental SpecialistUS: Urban SpecialistEC: Economist

APPENDIX - A

ICR MISSION'S AIDE MEMOIRE

THE WORLD BANKBangladesh Dhaka Office

24 3A Paribagh, Dhaka 1000, BangladeshPhone: (880-2) 861056-68/9669301-8

Fascimile: (880-2) 863220

Frederick T. TempleCountry Director

November 12, 1998

Mr. Jagannath DeySecretaryMinistry of Housing and Public WorksBhaban No. 5, Room No. 202Bangladesh SecretariatDhaka.

Dear Mr. Dey:

BANGLADESH: Urban Development Project (Cr. 1930-BD)

The completion mission for the Urban Development Project, which visited Dhakaand Chittagong from October 25 to November 5, 1998, has reported its findings. Onbehalf of the mission. I would like to thank the officials of the Ministry of Housing andPublic Works (MHPW) and the Housing and Settlements Directorate (HSD) for theassistance and cooperation provided to the mission. We endorse the mission's findingsand recommendations contained in the attached Aide-Memoire. In this letter, I would liketo highligh-t some of the issues raised by the mission in its discussions with your staff.

First of all, we are very concerned about the poor management of theKaiballyadham Urban Area Development Scheme in Chittagong. Though the physicalworks for the scheme were completed a few years ago, the pace of settlement is veryslow with only about 350 houses built so far out of the total 4144 plots. More seriously,there are no basic services such as water and gas supply available on the site due to lackof coordination between HSD and service/utility agencies. In addition, the completedinfrastructure in the area has started deteriorating because of lack of proper maintenance.We would urge you to take up these problems seriously and take an immediate action.We welcome MHPW's suggestion to hold an inter-ministerial meeting to help improvethe coordination among the different agencies, and would like you to keep us informed ofthe result of the meeting.

The mission agreed on a schedule to finalizing the project's ImplementationCompletion Report (ICR) and the operational plan for the assets created under theproject. HSD has already provided its draft ICR, but we would like you to revise it based

RCA 248423. ..: WUI 64145 . FAX (202) 477-6391

Mr. Jagannath Dey November 12, 199825

on the discussions with the mission, emphasizing lessons learned from the project. Also,your operational plan should focus on management aspects of the Kaiballyadhamscheme. It is critical that this plan confirms the full acceptance of operation andmaintenance functions by each agency responsible for various service provision.

If you have any question to the issues raised in this letter, please do not hesitate tocontact us.

Sincerely,

cc: - Mr. Azizul Islam, Joint Secretary, Ministry of Housing & Public Works- Mr. G. D. M. Mohidul Islam, Chief Engineer, Housing & Settlement Directorate

bcc: Messrs./Mmes. Frannie Humplick, Jonathan Kamkwalala, Toshiaki Keicho, PaulaReed (SASIN). Arun Banerjee, Zahed H. Khan (SACBF).

26 THE WORLD BANKBangladesh Dhaka Office

3A Paribagh, Dhaka 1000, BangladeshPhone: (880-2) 861056-68/9669301-8

Fascimile: (880-2) 863220

Frederick T. TempleCountry Director

November 12, 1998

Mr. A. H. M. Abdul HyeSecretaryMinistry of Local Govt., Rural Development

& CooperativesBhaban No. 7, Room No. 640Bangladesh SecretariatDhaka

Dear Mr. Hye:

BANGLADESH: Urban Development Project (Cr. 1930-BD)

The completion mission for the Urban Development Project, which visited Dhaka andChittagong from October 25 to November 5, 1998, has reported its findings. On behalf of themission. I would like to thank the officials of the Ministry of Local Government, RuralDevelopment and Cooperatives (MLGRDC), the Local Government Engineering Department(LGED). the Dhaka City Corporation (DCC) and the Chittagong City Corporation (CCC) forthe assistance and cooperation provided to the mission. We endorse the mission's findings andrecommendations contained in the attached Aide-Memoire.

First of all, we would like to congratulate you and your staff on the completion of theabove mentioned project. The mission reported that the completed major works (the DholaiKhal Pumping Station in Dhaka and the Sheikh Mujib Road Culvert in Chittagong) aredemonstrating benefits. We are particularly pleased that they were effective in protecting theadjacent areas from being flooded during the recent severe floods. Also, we note that LGEDhas recently completed rehabilitation of 227 roads which were damaged by the Cyclone ofMay. 1997.

The mission agreed on a schedule for finalizing the project's ImplementationCompletion Report (ICR) and the operational plan for the assets created under the project. Wewould like to stress the importance of this operational plan in order to sustain the project'sbenefits. It is critical that this plan confirms the full acceptance of operation and maintenancefiunctions by each responsible agency, and demonstrates that the arrangements for Operations& Maintenance are financially, institutionally, and technically sustainable.

Mr. A. H. M. Abdul Hye 27 November 12. 1998

I t vou have any question, please do not hesitate to contact us.

Sincerel

cc: - Mr. Q. 1. Siddiqui, Chief Engineer, LGED- Mr. Shamsul Haq Bhuiyan, Chief Engineer, Dhaka City Corporation- Mr. Rezaul Amin Khan. Chief Engineer, Chittagong Citv Corporation

hcc: Messrs./Mmes. Frannie Humplick, Jonathan Kamkwalala. Toshiaki Keicho. PaulaReed (SASIN). Arun Banerjee, Zahed H. Khan (SACBF).

- 28 -

BANGLADESHURBAN DEVELOPMENT PROJECT

(Cr. 1930-BD)

IDA COMPLETION MISSION(October 25 - November 5, 1998)

A. INTRODUCTION

1. An IDA mission consisting of Messrs. Toshiaki Keicho, Zahed Khan (SASIN), Dipasis Bhadra(Consultant), and Reza Khan (Research Assistant) visited Dhaka and Chittagong from October 25 toNovember 5, 1998 to review the status of the completed Urban Development Project (Cr. 1930-BD) andto facilitate the preparation of the Implementation Completion Report (ICR). The mission helddiscussions with officials of the Ministry of Housing and Public Works (MHPW), the Ministry of LocalGovernment, Rural Development and Cooperatives (MLGRDC), the Housing and Settlements Directorate(HSD), the Local Government Engineering Department (LGED), the Dhaka City Corporation (DCC), andthe Chittagong City Corporation (CCC). The mission also met with local residents of the KaiballyadhamArea Development Component in Chittagong.

2. The mission wishes to thank the Government of Bangladesh (GOB), the implementing agenciesand their officials for the courtesy and cooperation received during the mission. The views expressed inthis Aide-Memoire are subject to review and confirmation by IDA management.

B. STATUS OF PROJECT COMPONENTS

3. Originally, the credit was scheduled to close on June 30, 1997. Though the original componentswere completed by this date, one year extension was granted to undertake emergency rehabilitation ofroads in the southern districts of Bangladesh which were severely hit by the cyclone in May, 1997. Thestatus of each component is described below.

Dholai Khal Drainage Improvement (DCC)

4. This component originally included mainly construction of the Dholai Khal culvert and apumping station. As the culvert was dropped due to the problem related to resettlement of 418households, only the pumping station was constructed under the project. However, the mission wasinformed that DCC had started constructing the Dholai Khal culvert from its own funds by applying itsown resettlement policy. The pumping station, completed in 1997, is in a good condition anddemonstrated benefits during the recent severe floods, saving the adjacent area from being flooded. Thewhole drainage scheme would have been far more effective if the construction of culvert had not beendropped.

5. The mission was also informed that now the DWASA is responsible for managing storm-waterdrainage in Dhaka and that the pumping station was handed over to DWASA on March 1, 1998.However, the pump station is now jointly operated by DCC and DWASA as it is still in a transitionalperiod. The mission discussed O&M issues, such as need for clean-up of the canal leading up to thestation, and requested DCC to work with DWASA to prepare an operational plan to ensure continuedO&M (see Section F below).

- 29 -

Slum Upgrading in Dhaka (DCC)

6. Three slums in Dhaka (Shaheednagar, Rasulpur, and Islambagh) were upgraded by improvingbasic infrastructure. Main achievements include 17 km roads and foot paths, 3 community centers, 482latrines, land filling, etc. According to DCC officials, most of the slum dwellers continue to live in theupgraded areas and enjoy the project benefits. Replicability of this kind of slum upgrading programs wasdiscussed.

Sheikh Mujib Culvert (CCC)

7. Sheikh Mujib Culvert of about 2.25 km in Chittagong was completed in June, 1997. The culvertis in a very good condition, and demonstrated benefits during the recent severe floods. The mission andCCC jointly inspected how deep the culvert was silted up in some selected points, and found that siltdeposits ranged from 2 inches to 2 feet (the average was about 6 inches). Since the height of the boxculvert is about 10 feet in most places, silting of this range in just one year may have seriousconsequences in the long run if went unchecked and not properly and regularly cleaned. The missionemphasized the importance of periodical check-ups and cleaning/de-silting especially before monsoonseasons. CCC is aware of this issue and agreed to prepare an operational and maintenance plan for theculvert (see Section F below).

Public Toilets (CCC)

8. Twenty-three public toilets were constructed under the project in Chittagong. The mission visiteda couple of the public toilets and found they are in a good condition. These toilets are leased outto private operators, who charge one taka per use. The mission noticed that the use of some ofthese toilets is very low. The reasons for the low use may be attributed to such factors asaffordability, location, or designs (men and women share the same entrance, fewer latrines forwomen, etc.). CCC needs to continue to review and monitor community practices.

Solid Waste Management (DCC and CCC)

9. Under the solid waste management component, 44 trucks, 220 de-mountable containers werepurchased for DCC, and 48 trucks, one front-end loader, four tractors were purchased for CCC. Inaddition, workshop tools and equipment were provided for both cities. However, according to cityofficials, solid waste management in the cities have not been improved significantly. This componentfocused on purchase of machines and equipment only, and management aspects were not given adequateattention.

Kaiballyadham Area Development (HSD)

10. About 100 acres of land and associated infrastructure were developed in Chittagong to provide4144 residential plots and some industrial and commercial plots. Although the work was completed, themission found that management of this area development scheme is so poor, creating serious problems.According to HSD, 3585 plots have already been allotted, out of the total 4144 plots. 2800 plots havealready been handed over to people, but only about 350 houses have been built so far. More seriously,there are no basic services available in the area such as water and gas supply or social services like aclinic. In addition, the completed infrastructure has started deteriorating because of lack of propermaintenance. As a result, people who have actually started living in the area suffer greatly. The mainreasons for non-availability of these services seem to be lack of coordination between HSD and service

- 30 -

agencies such as CWASA, reluctance of these service agencies to operate in the area, and lack of HSD' scapacity to manage the area.

11. The mission asked HSD to take these problems very seriously and take an immediate action. HSDagreed to discuss the problems with the service agencies urgently and to inform IDA of the results of thediscussions. The Joint Secretary of MHPW also promised to hold an inter-ministerial meeting to helpsolve the problems and to inform IDA of the results of the meeting. The mission also advised HSD toexplore any possibilities to facilitate provision of these services and to improve coordination among theservice agencies. For example, HSD should consider involving NGOs in provision of social services orsetting up an Area Management Committee consisting of CCC, utility agencies/companies,representatives of local residents, NGOs, etc. HSD agreed to prepare a management action plan toimprove the management aspects of the Kaiballyadham scheme as part of the required operational plan(see Section F below).

Cyclone Rehabilitation (LGED)

12. The project closing was extended by one year to enable rehabilitation of the roads damaged bythe cyclone of May, 1997. Though this component was emergency in nature, actual implementationstarted in February, 1998. The delays were mainly due to the slow pace of processing the required paperwork, such as amendments to the Development Credit Agreement, both by IDA and the Borrower. LGEDrehabilitated/reconstructed 227 roads in five months in the southern districts of the country.Implementation by LGED was quick and successful.

13. Unfortunately, however, the mission found that some of the recently rehabilitated roads(especially brick roads) have been damaged again by the recent severe floods. The mission raised an issueof technical specifications and materials used for various types of roads in cyclone/flood-prone areas.LGED informed that the choice of specifications/materials was made by considering such factors asavailability of materials, maintenance requirements, speed of construction, availability of constructionequipment, etc. Some repair and rehabilitation of these roads, affected by 1998 floods, were beingundertaken by LGED with finance from other sources.

Technical Assistance and Studies

14. The mission also discussed, with each implementing agency, institutional and financialcomponents of the project. This project focused heavily on physical works only, and the institutional andfinancial components were given inadequate attention or ignored. For example, the original project designincluded TA for property tax administration or a study for traffic management (according to SAR). But noagency is aware of these.

C. PROJECT COST

15. The project's total cost, according to the data provided by each implementing agency, is given inthe table below. Despite the fact that construction of the Dholai Khal culvert was dropped from theproject due to the resettlement problem, the cost of the drainage component was escalated probablybecause of the implementation delays and the floods/heavy rains which sometimes damaged alreadycompleted works.

- 31 -

Component Latest Estimate SAR Estimate(million US$) (million US$)

Area Development 4.3 4.9Storm-water Drainage 26.6 19.1Solid Waste Management 7.8 9.2Sanitation 0.6 2.0Slum Upgrading 3.8 3.8Cyclone Rehabilitation 5.3TA and Project Staffing 4.3 5.1Contingencies - 21.5Total 52.7 65.6

D. STATUS OF DISBURSEMENTS

16. The credit closed on June 30, 1998, after one year extension, which was necessary to enablerehabilitation of the roads in the coastal areas damaged by the Cyclone of May, 1997. Now that thedeadline for withdrawal applications also expired on October 31, 1998, the final amount of IDA'sdisbursements will be about US $31.0 million, which is equivalent to 65.1 percent of the original Creditbut almost 100 percent of the formally revised Credit amount (after two cancellations: US $8.9 million in1993 and US $ 8.5 million in 1996). The undisbursed amount of about US $700 will be canceled.

E. IMPLEMENTATION COMPLETION REPORT

17. The preparation of the ICR is already underway both by IDA and the Borrower, and the missionagain explained to all the implementing agencies their responsibilities to prepare the ICR and theobjectives and requirements of the ICR. All the agencies already submitted their draft evaluation reports,which were reviewed by the mission. The mission asked the agencies to update/revise the reports,focusing on lessons learned from the project.

18. To enable the ICR to be completed within six months of the credit closing date (December 31,1998), the mission and the agencies agreed on the following schedule to finalize the ICR:

* Each Agency to submit its evaluation to IDA: by November 15, 98* IDA to submit a draft ICR to the Borrower for comment: by November 15, 98* Borrower to submit its comment on IDA's draft ICR: by December 10, 98* IDA to finalize the ICR, attaching Borrower's evaluation: by December 31, 98

F. OPERATIONAL PHASE OF THE PROJECT

19. The mission discussed with each agency the operational phase of the project and emphasized theimportance of continued O&M to sustain the project's benefits. As part of the ICR preparation, theBorrower is required to develop and present an acceptable action plan for the operational phase of theproject (Operational Plan) which ensures continued operations of assets created under the project. Eachagency agreed to submit its draft Operational Plan to IDA by November 15, 1998. The plan should set outat least:

(a) required institutional arrangements and staffing needs for continued O&M of the assets createdunder the project;

- 32 -

(b) estimates of the additional O&M costs resulting from the operation of such assets, and source ofsuch funding; and

(c) key physical, operational, and financial indicators to monitor the performance of these assets andto assess their development impacts.

G. EX-POST ECONOMIC ANALYSIS

20. In June 1998, IDA initially asked the Borrower to collect the data required to conduct ex-posteconomic analysis for the three components: a) Dholai Khal Drainage; b) Dhaka's Slum Upgrading; andc) Kaiballyadham Area Development. The mission reviewed the status of the data collection, but thecollection was significantly delayed mainly due to the recent floods in Bangladesh. It was agreed thateach agency will complete the data collection and submit the data to IDA by November 15, 1998, in orderto enable the economic analysis to be included in the ICR. The Bank's Dhaka Office will help facilitatethe data collection.

APPENDIX - B

BORROWER'S EVALUATION

- 33 -

APPENDIX - B

BANGLADESHURBAN DEVELOPMENT PROJECT

BORROWER'S EVALUATION

DHAKA CITY CORPORATION

Introduction

Bangladesh has one of the highest urban population growth rates in the world about 7percent per year. About a fifth of the national population is urban, and over the next 20 years,some two-thirds of the total population increase is expected in urban areas. This growth impliesalmost a tripling of present urban population of about 36 million within one decade. The maincontributing factors to this large population movement are high population densities,landlessness, and low incomes in rural areas due to crop failure and flooding. Rapid urbangrowth has resulted in severe shortage of basic infrastructure, developed services, and shelterparticularly in Dhaka and Chittagong. To face this critical situation, i.e., for development ofroads, drainage solid waste collection and others, the Urban Development Project as 1930 BDCredit was signed in July 1988 between GOB and IDA. Considering the above situation the saidproject was the first urban project supported by IDA in Bangladesh. Consultancy services wereprovided in 1985 with UNDP/UNCHS support, to prepare the DCC components. The projectwas appraised in March 1986. The final Engineering designs and cost estimates were preparedin 1987. Constructional activities were started in 1988 and the project was completed in June1997.

Project Objectives

The objectives of the project are to:

(a) develop the capacity to plan, manage and deliver municipal services in Dhaka,emphasizing those having environmental impact: low cost sanitation, solid wastecollection and disposal, storm water drainage, and improvements in low-incomeareas;

(b) strengthen the institutional capabilities of sector agencies emphasizing moreefficient and effective use of resources, improved cost recovery, Local resourcesmobilization and financial management at the local level and improvement sectorplanning and monitoring at the national level. The primary benefits are: improvedlevel and coverage of municipal services, savings in the health care and publichealth and environmental Improvement.

The benefits are expected to accrue to the more densely populated, low income areas of central Dhaka.

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The Project consists of the following parts:

Part A: Storm Water DrainageImprovement of about 4.25 km of channels in the lower Dholaikhal catchmentarea in Dhaka, including the construction of a barrier and a pumping station atthe outlet to prevent river backflooding during the monsoon period.

Part B: Solid Waste Collection and DisposalAcquisition of vehicles and equipment and construction of maintenance workshops forthe collection and disposal of waste in Dhaka.

Part C: Low-Income Area ImprovementsCarrying out small-scale works in the three areas in old Dhaka, including:(i) construction of and improvements to roads and foot paths(ii) surface drainage(iii) solid waste collection(iv) Low cost sanitation(v) Construction of community centres, and(vi) selected land filling.

Part D: Institutional DevelopmentProvision of technical assistance, equipment and training for the strengthening of DCC.

Evaluation of Project Objectives

The purpose of the proposed project is to assist Government in improving the management andfinancing of Urban Development through improved resource utilization and mobilization. Morespecifically, the project would:

(a) improve the efficiency and effectiveness of planning, managing and operationmunicipal services, with particular emphasis on those having immediateenvironmental impact in the more densely populated and low-income areas ofDhaka and Chittagong;

(b) demonstrate more cost-effective and affordable approaches to urban land development andshelter for middle-low income families through more efficient land use with significantreduction in the cost of plots, and through full cost recovery with positive interest rates, and

(c) strengthen the planning, management and financial capacity of key local and national sectoragencies : MOW and HSD for urban land development and MLG, DCC and CCC for theprovision and management of municipal services.

Implementation Experience and Results

The project achieved most of its major activities and has achieved satisfactorydevelopment results. The project was completed in due time. The problems faced by DCC duringimplementation was the acquisition of land. The key factors that affected achievement of themajor objectives were:

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(i) inadequate administrative authority of project Director's and frequent staff rotation;(ii) delays in procurement process;(iii) delays in TAPP / PP approved processing; and(iv) lack of compliance with financial reporting and audit requirements.

The above problems were the great obstacle for proper and timely implementation of project.

Future Project Operation

The pump station which have already been handed over to DWASA, will be operated andmaintained by themselves. The operation and maintenance of all other components will be controlled byDCC revenue hand.

Key Lessons Learned

Through implementation of such urban project, the concerned project personnel gathered lots ofknowledge in physical implementation, contract management and administration. So DCC authority shouldhave to take initiative to absorb such experience project personnel in revenue head for institutionaldevelopment. Moreover such personnel may be engaged in similar ongoing IDA project.

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CHITTAGONG CITY CORPORATION

A. INTRODUCTION

In Bangladesh the environmental improvement aspects of the urban areas have not been givenadequate attention in the past. There are serious lack in urban drainage. Solid waste disposal. sanitationand health care education in almost all the urban towns and cities of the country. As a result unhealthyatmospheres, health hazards and environmental pollution are the common scenario in these areas.

Chittagong is the gate way to Bangladesh as the main port city of the country. It is also thelargest industrial city of Bangladesh with a population of about 30 lakhs. The population in this city isestimated to be about 35 lakhs by 2000 due to its situation as a port and industrial city.

For many years, the people of Chittagong City were suffering due to congestion of storm drainageand tidal inundation. Lack of proper drainage system subjected large areas of the city to regular floodevery year.

The sanitation system in the city is deplorable due to prevalence of large scale service latrines.No storm sewer system was introduced in Chittagong City though the Water and Sewerage Authority(WASA)was created in 1963. On consideration of such factors the First Urban Development Project i.e.Environmental Improvement has been adopted.

B. OBJECTIVES

The objective of the Environmental Improvement Project under Chittagong CityCorporation area:-

(a) improvement of environmental sanitation within the CCC area covering:(i) storm drainage; (ii) solid waste disposal; and (iii) sanitation;

(b) establishment of modern workshop facilities for repair and maintenance of CityCorporation vehicles;

(c) establishing a radio communication system within CCC area by procuring"walkie-talkie" for increasing efficiency of City Corporation services;

(d) establishing a computer system by procuring computer for improvement financial,management practices and recording system of CCC;

(e) in-service training facilities for technical, health and sanitation personnel.

C. FEASIBILITY STUDY AND DESIGN

Feasibility Study and Design Report was prepared by Mls. LBII in 1986-87, with the financialassistance of the World Bank. Further, the major component "Construction of Sk. Mujib Road Culvert"2.2 km was redesigned by Consultant BKH in 1990-91, with financial assistance of UNDP as proposedby LBII in their final Engineering report.

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D. PROJECT COMPONENTS

Project components with estimated cost are shown below:

SiNo Item of Works Local F. E. Total

I. Storm Water Drainage:(i) Land 1179.00 - 1179.00(ii) Equipment, vehicles, tools 123.19 266.47 389.66(iii)Civil work (Drainage implt. /canal rehab.

(a) Canal rehabilitation 735.50 - 735.50(b) Diversion channel 89.32 89.32(c) Diversion weir 21.36 - 21.36

(d) Sk. Mujib Rd. Culvert 3130.00 50.00 3180.00(e) Pilot watershed erosion central

structural silt traps) 53.17 - 53.17(f) Priority tertiary canal upgrading 20.60 - 20.60

5352.14 316.47 5668.612. Solid Waste Collection/Disposal:

(i) Land 106.00 - 106.00(ii) Workshop building 59.26 - 59.26(iii) Vehicles 364.52 408.04 772.56(iv) Dustbin 36.54 - 36.54

566.32 408.04 974.363. Sanitation:

(i) Land 46.60 - 46.60(ii) Upgrading of septic tank/pits on loan 332.10 - 332.10(iii) New Septic Tank 145.00 15.00 160.00(iv) Community Latrine 00.00 - 300.00

678.70 15.00 678.704. Radio communication network (walkie-talkie) 50.17 - 50.175. Computer 10.00 - 10.006. Project linplementation Unit (PIU) 269.99 - 269.997. Vehicle for PIU 37.22 - 37.228. Local Engg. Consultancy Services 6.00 - 6.009. Training 5.00 - 5.00

Sub-Total 6975.54 724.51 7700.0510. Technical 58.60 282.40 341.00

Total Base Cost 7034.14 1006.91 8041.05Physical Contingency 41.90 109.20 151.10Price Contingency 84.50 848.19 932.69Grand Total 7160.54 1964.30 9124.84

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E. RESPONSIBILITIES

(a) Sponsoring : Local Govt. Division of the Ministry of LGRD andCo-operatives

(b) Execution : Project Implementation Unit, Chittagong CityCorporation, Ctg.

(c) Design : M/s LBII with Local Associates ACE and Mls. BKHwith local Associates EPC.

(d) Operation and Maintenance Chittagong City Corporation, Ctg.

(e) Technical Assistance duringimplementation : M/s. Mott MacDonald Ltd.

(f) Financial Assistance IDA Loan, UNDP Grant for Technical Assistanceduring implementation and GOB grant.

F. ACHIEVEMENT OF OBJECTIVES

(a) Land Acquisition:

According to original estimate, the project total land area to be acquired was 7.61 hector. Actualland acquisition was done as follows:

Acquisition Component Quantity of Land Cost in Lac Taka(in Hector)

(i) Chaktai khal 2 567.98(ii) Chaktai Diversion khal (S.W.) 2 200.61(iii) Mirza khal 1.01 178.06(iv) Mirza Noa-connector khal 0.632 144.32(v) Dustbin and Solid Waste Disposal 2.42 200.00Area (on-going)(vi) Silt traps 0.22 30.16(viii) Community Latrine ___

8.31 Hector 1321.13

Achievement of target has been fulfilled 100 percent.

(b) Procurement of Vehicles. Equipment and Workshop Tools:

There was a provision for procurement of trucks - 84 nos.; Front End Loader - 1 no.; Tractors - 4nos.; Wagons - 8 nos.; Sewage Pump - 3 nos.; Generator - 1 no.; and workshop Tools and Equipment.

Procurement has been completed 100 percent as per schedule and total cost involvement was Tk. 1,157.80lacs.

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(c) Canal Rehabilitation:

(i) Chaktai Primary khal (4935 M): According to program of works in PP, this componentwas scheduled to complete in four phases, but it was completed in two phases. The first phasewas done in the financial year 1988-89 by excavation of original canal (without any widening byLand Acquisition) only. After acquisition of required land for widening the work of second phasewas taken up in the year 1991-92 and completed in all respect successfully. Total cost incurredagainst this item was 332.62 lacs.

(ii) Chaktai Secondary khal (6596 M): There were 5(five) number secondary khals inprogram to be rehabilitated. Among those Hizra khal was completed in 1988-89 financial yearand cost involvement was 12.82 lac. Other works two secondaries (Chatteswary khal and Jamalkhan khal) are going on in present financial year which were expected to be completed byJune,'97 and the total cost involvement against this two secondaries khal will be 10.61 lacs.Other two khal(Mirza chaktai connector khal and Mirza by pass khal) were rehabilitated byChittagong City Corporation from its own fund.

(iii) Nasir khal (5363 M): Rehabilitation work of Nasir khal was taken in hand in the month ofMay 1990. But after doing some works. The work were suspended due to heavy rain fall. Theseworks again taken in hand in present year (1996-97). Now the works are going successfully andexpected to be completed by June,1997. Total cost involvement (including the cost of partialworks in '90) will be 61.03 lacs.

(iv) Sadarghat khal (1780 M): Rehabilitation work of this khal has taken in hand in thispresent year (1996-97). Now the work is going on and expected to be completed by June, 1997.Total cost involvement against this work will be of Tk.5.20 lacs.

(v) Mirza khal (6767 M) and Mirza Noa connector khal (1380 M): Rehabilitation works ofthe two khals were executed in the year 1994-95 after acquisition of lands for widening. Totalcost involvement against this two khals were Taka 293.25 lacs.

(vi) Removal of Utilities Pipes: Utilities Pipes were removed as where necessary during theproject period and cost involvement against this item was Tk. 8.7 lacs.

(vii) Construction and Widening of Diversion Canal(2832 M and 5 nos. Bridge): The workwere successfully completed in 1990 after acquisition of requisite lands. Five numbers bridgewere constructed over this canal. Total cost involvement including bridge was Tk. 89.32 lacs.

(d) Diversion Weir and Bridge:

One number weir and bridge was constructed in the year 1991-92 as per program in PP. Theseweir and bridge was executed over the diversion canal just in the junction point of Chaktai khal andDiversion khal. Total cost incurred for this component was Taka 16.55 lacs. Achievement of thiscomponent is 100 percent.

(e) Priority Tertiary Canal Upgrading (16.2 km):

There are two types of tertiaries according to their connection with the main canals. One istertiaries connected with Mirza- Chaktai khal another is connected with Nasir Moheskhali canals.Rehabilitation works of tertiaries related with Mirza Chaktai khals was executed in the year 1988-89 andcost involvement was Tk.10.28 lacs. Rehabilitation works of tertiaries connected with Nasir khal are

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taken in hand in this present year and expected to be completed by June, 1997. Total cost required for thiscomponent is Tk. 4.09 lacs.

(f) Sk. Mujib Road culvert (2250 M):

Constn. of Sk. Mujib Road Culvert was started in October 1994 and expected to be completed byJune,1997. original contract amount during work order was Tk. 20.96 lacs but due to different reasonsconstruction cost increased and expected to be the amount of Tk. 3180.00 lacs.

(g) Construction of Workshop Building:

One number workshop building was constructed in the year 1990-91 at Sagarica, Chittagong.These workshop building was constructed to set up a mechanical workshop for repair and maintenance ofvehicles, machineries, etc. of City Corpn. Cost involvement for constructing this building was Tk. 59.25lacs. Achievement of this component is 100 percent.

(h) Silt Trap Constructions:

14 (fourteen) numbers Silt Trap were constructed at different points of Chaktai, Mirza, Nasir, andHizra khal as suggested by Design Consultant LBII to trap the silts coming from up stream. Total costrequired for this component was Tk. 49.91 lacs, and achievement of this component is 100 percent.

(i) There are 40 (forty) numbers Community Latrine in the program of project. Out of which 17numbers were constructed at different places during the last 8 years of the project period. Another 6numbers community latrine are being constructed in the present financial year which are expected to becompleted by June,1997. Total cost involvement for 17 number was Tk. 113.90 lacs and amount will berequired for another 6(six) number is Tk. 45.00 lacs, if these 6 numbers are completed successfully thentotal achievement for these component will be 58 percent.

(j) Constn. of Dustbin (300 nos.):

Three hundred (300) number dustbins were constructed in the year 1992-93 and 1993-94 atdifferent places of City Corporation area as suggested by conservancy department of CCC. Total costincurred against these component was Tk. 36.49 lacs, and achievement of this component is 100 percent.

(k) Radio Communication Network (Walkie-Talkie):

22 Numbers of Walkie-Talkie were procured for increasing efficiency of City Corporationservices in the year 1992-93. Total cost incurred against this component was Tk. 50.11 lacs andachievement is 100 percent.

(1) Procurement of Inspection Vehicle for PIU:

Jeep-3 nos.; Car-I no; Micro-bus-I no and Motor Cycle-10 nos. were procured for PIUOfficial. Cost involvement was Tk. 30.9 lacs.

(m) Constn. of Latrine with Septic Tank/Pit on Loan:

In the original project program, there is provision to construct 900 new Septic Tanks and 3000upgrading of septic tanks. But people are not interested to construct only septic tanks. They areinterested to build latrine with septic tank on loan. That is way the name of the component has been

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changed to "Latrine with Septic Tank/Pit on Loan". Constn. of these component is going on in thisfinancial year.

(n) Local Engg. Consultancy Services:

Project design and drawing was done by the Louis Burger International Ltd. in 1986. But somecomponents were not designed by them as these were not included in TOR. These were some silt traps.Diversion weir and Bridge, Traffic and Foot bridges over diversion khal. These were designed byengaging Associate Consulting Engineers in 1990 and cost involvement there of was Tk. 2.64 lacs.

(o) Technical Assistance:

Consultant M/s. Mott MacDonald Ltd. Was engaged to assist PIU Engineers in implementing thevarious components of the project from 1990 to December 1994 as an implementation support consultantwith the financial assistance of UNDP as provision in the project. Total cost incurred against thesecomponent was Tk.441.00 lacs.

G. PROJECT SUSTAINABILITY

(a) Canals: The rehabilitation works of canals Chaktai khal, Chaktai diversion khal, Mirza khal,Mirza Noa-connector khal, Nasir khal, Hizra khal, Chatteshari khal, Jamal khan khal, Sadarghat khal anddifferent ternaries were completed satisfactorily and these are functioning well. It may be mentioned thatChittagong City area is full of hills with different elevations in scattered position. As such thecharacteristics of land contour is completely different than the other parts of the country. Due to rapiddevelopment works within lower land are being developed by filling with hills carted earth. Due to abovereasons huge quantity of hilly sands are coming down to the khals and drains from the hilly are of duringthe rainy season causing heavy siltation. Therefore in order to sustain the proper function ability of thecomponents proper maintenance and desalting works must be done regularly.

(b) Vehicles, machines and workshop Tools: Under this component 48 Nos. garbage trucks, no frontend loader, 4 nos. tractors, 8 nos. wagons, 3 nos. sewage pump, 1 no. generator and workshop tools wereprocured and these are now being used by CCC conservancy department and mechanical department.These garbage trucks are giving very good service in collection and disposal of garbage. So it has nowbecome possible to keep most of the areas of the city neat and clean. To sustain the services of thevehicles for long term or up to expectation period, proper maintenance and operational schedule must bemaintained as a routine work of CCC.

(c) Silt Traps: 14 (fourteen) Nos. Silt traps were constructed under this component and they arefunctioning well. But the purpose of the Silt traps hampers when arrested silts are not removed timely.As such maintenance of Silt traps and timely removal of silts must be maintained to sustain its mainobjectives.

(d) Dustbin: 300 nos. dustbins were constructed at different places of the city which are being usedproperly by city dwellers to dispose their household waste and garbage. These garbage are beingcollected under the management of conservancy department of CCC. These dustbins are required torepair and maintain properly as and when necessary to sustain its longibility for long time.

(e) Sk-Muiib Road Culvert: It is a big component of the project. The length of this drainage culvertis 2. 25 km. which runs underneath the Sk. Mujib Road (Western carriage) and CPA area. Culvert startsfrom Fire-Brigade Area and discharged Karnafully river. Total cost involved in this component is Tk.3180.oo lacs. The main objectives of the component is to keep the areas(Agrabad Commercial area and

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Residential Area, Patantooly, Dewanhat) free from flooding in rainy season. In order to hold itssustainability for long time or up to the expected period it requires permanent maintenance squared totimely repair and maintain the culvert.

H. MAJOR FACTORS AFFECTING THE PROJECT

Land Acquisition: Allocation for this component in original PP was 404.3 lacs taka foracquisition of 7.61 hector of land as estimated by LBII in 1986. But when actual land acquisition wasstarted in 1990, it was seen that the price of land had been increased. Again the consultant did notconsider the cost of existing structures over the land to be acquired. On the basis of the estimate fromacquisition department in 1991 it was found that actual money would be required 1331.6 lacs taka foracquisition of 7.61 hector land. For this reason PP had to be revised in 1992. Due to this short of fundland acquisition work had been hampered initially which caused delay in implementing the component.

Sk. Muiib Road Culvert: Constn. of Sk. Mujib Road Culvert is one of the most importantcomponent of this project. In original PP 977 lacs taka was allotted for this item. But consultant Messrs.LBII proposed in their final Engineering report to redesign the culvert. As such Consultant M/s. BKHwas engaged for this purpose and completed the design of the culvert in 1990 under UNDP financialassistance. During the design period BKH found that for solving the flooding problem in Agrabad and itssurrounded area the culvert should start from Fire Bridged point instead of Jack point. Hence the lengthof the culvert had been increased. Accordingly the estimated cost has been increased to 1875 lacs taka.But after international tendering, contractor MWs. Consortium of ABC Ltd. (the Engineers Ltd.) wasselected with a contract amount of 2100 lacs. But due to following different reasons the construction costof the culvert has been increased again to Tk. 3180.00 lacs:

(i) As per design, drawing of the Consultant the length of the culvert is 2150m. But duringconstruction actual alignment of the culvert was found 2250m. Thus cost increases for 100 m.

(ii) Due to restriction of 100 m opening of trench by 100 m Sheet Piles at a time work could notbe progressed more than 3.57 bays per month (each bay 16 meter) instead of 6.17 bays per monthas per schedule in the contract. If work is continued at the rate 3.57 bays per month the work willnot be completed till September, 1998. That is why additional 150 meters Sheet Piles wereallowed in a view to complete the work within the project period June, 1997 for which theconstruction cost increases.

(iii) There is a provision in the contract to pay the contractor the price escalation of differentconstruction materials, labours, etc., used in the culvert. But in the work order the required costamount in this respect was not included. That is why construction cost increases.

(iv) Final design and estimate was prepared by Foreign Consultant BKH Consulting Engineers in1990. On that basis International tender was invited on July,1992. At that time there was noprovision for VAT, as such no allowance for VAT was included in these estimates. The ContractAgreement between CCC and Contractor was signed on 20-09-94. As per circular Nol(25)Mu ShaKa-2/93 (Part) dated 07-08-95 of National Revenue Board(NRB) VAT amount must be depositedto NRB. So, VAT amount is needed.

(v) The culvert (2250 m length) seems under the main Sk. Mujib Road (west side). Re-instatement of road pavement within the width of working space was not included in the workschedule except only over culvert width. The part of the road used for the contractors workingspace has deteriorated and deformed despite the best efforts of the contractor to protect the

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existing pavement. So, the Bill of Quantities requires that the new base courses with pavement beprovided and leveled to fit the existing road.

(vi) There are different claims from the contractor against which no cost was included in thecontract work order. That is why construction cost increases.

For the above reason initial delay occurred in starting the construction work of this componentwhich affected the ultimate completion of this component.

Canal Rehabilitation: Almost all the canals under this component have been completedsatisfactorily. But delay in acquisition of land effected the timely completion of this components.

Constn. of Silt Trap: There were 14 (fourteen) number silt traps in different khals to beconstructed. Out of 14 numbers only 6 number was designed by the consultant M/s. LBII. So fordesigning remaining 8 numbers a local consultant was needed and engaged. For this, initial delayoccurred in completing the construction of silt traps.

Community Latrine: There are 40 number of community latrines to be constructed under thisproject. Out of which 23 numbers were completed. Remaining latrines could not be completed asbecause non-availability of suitable places which affected the complete completion of the component.

Latrine-with Septic Tank on Tank on Loan: In the original PP there is a provision to construct900 New Septic Tank and 3000 Up-grading of Septic Tanks. But people are not interested on this. Theyare interested to build latrine with Septic Tank on loan. This was informed to the Ministry accordinglyletter No-PIU/110/89 dt. 27-03-96 and ministry gave the approval through the letter vide No-Poura-1/3.M-1/93/(Part-l)/213 dt. 15-05-96. So the name of this component "Latrine with Septic Tank/Pit onLoan" is needed to include in the PP in place of the components of "Up-grading of Septic Tanks and NewSeptic Tank". This affected the completion of the component.

I. BORROWER PERFORMANCE

As per proposal of CCC and subsequently by the Bangladesh Govt. This project named"Environmental Improvement Project (EIP)" was prepared by the foreign Consultant LBII in 1986 withthe financial assistance of the World Bank. The Consultant prepared the Project on the basis ofinformation received/discussions with CCC and different local organizations and details survey andfeasibility study report made by themselves. The cost of the project was financed by the BangladeshGovt.(Grant) and International Development Authority(IDA) as credit and UNDP for TechnicalAssistance as Grant. Chittagong City Corporation is the development beneficiary and ImplementingAgency of this Project. The main objective of this project was to improve the environment of ChittagongCity. Both Bangladesh Government and IDA provided necessary financial allocation yearly as per annualdevelopment program. CCC as an implementing agency implemented the project by its PDIU TechnicalStaff satisfactorily.

Consultant Mott Macdonald Ltd. provided technical support to the PDIU of CCC. All thetechnical and other staff of PDIU appointed by CCC were qualified and experienced. So it was possiblefor the PDIU staff to implement the project works smoothly from the inception up to the completionperiod. Besides the PDIU staff during the project period got necessary field training and technicalassistance from the Consultant Mott MacDonald Ltd. Consultant Mott MacDonald Ltd. provided theirtechnical assistance very satisfactorily.

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J. BANK PERFORMANCE

The "Environmental Improvement Project, Chittagong" is financed by IDA under UrbanDevelopment Project, Credit No-1930-BD. World Bank Officials and World Bank Mission used to visitthis project 2-3 times a year during the Project period (1988-89 FY to 1996-97 FY). The purpose oftheir visit was to see the physical progress of works, quality of works, over all management activities ofPDIU technical staff, follow up actions of yearly program and also advise the executing agency(CCC) tofollow the procurement as per World Bank guideline and to submit the claims timely for reimbursementof money. If any defect/problem of the project was identified during the visit of the World BankMission, they used to give necessary suggestions/advice from time to time to rectify/solve the samethrough their aide-memoir report on visiting Bangladesh. The World Bank officials also gave necessaryapproval/consent very promptly for any unscheduled matter considering the necessity/urgency of theProject works. A number of Workshops/Seminar on Sanitation Program/Sanitation Unit was held atCtg. with assistance of the World Bank officials. Sometimes, they used to give advise to the PDIU stafffor necessary training for increasing the efficiency of knowledge/field experience. Following theiradvise PDfU staff of CCC also got necessary training accordingly. The over all Bank performance washighly satisfactory.

K. ASSESSMENT OF OUTCOME

Rehabilitation of canal (khals): The nature of all the original canals were narrow with zigzagsand sharp bends. Besides, almost all the canals had some or no depth as they were already filled up bysand/earth/suspended garbage. For these, the city used to suffer flooding, overflowing the canals inadjacent areas during rainy season every year. Rehabilitation works of canals includes dipping andwidening by excavation earth, retaining walls on both sides of canals in many parts of all the canals,raising the height of existing side walls of the canals, silt traps, new Culverts/Bridges, protection walls,etc. As such, after rehabilitation of all the canals: Chaktai khal, Chaktai Diversion khals, Hizra khals,Mirza khals, Mirza Noa connector Ichals, Jamal khan khals, Lalmia Chara, etc., the water flowingcapacity of all the khals had increased and thus flooding and inundation of canals in city areas have nowgreatly reduced. With the rehabilitation of the canals the rate of development work at low lying areas inmany parts of the city has increased rapidly. Living standard of city dwellers has improved.Environment of the city is now better than before. Loss of people lives and property during flooding inthe monsoon period have reduced.

Procurement of Garbage Trucks: Before the procurement of 49 garbage trucks under the project,CCC had to manage collection and disposal of garbages by only 8-10 hired trucks. With these fewnumber of trucks it was possible to carry only 50-70 tonnes of garbages daily from some parts of the city.But the city produces about 250 tonnes of garbages per day. For this reason, many parts of the city werefound with huge quantity of garbages spreading hither and thither causing serious unhygienic conditionfor the city dwellers. But, now, the conservancy deptt. of CCC is quite able to keep the whole city clean.Earlier CCC had to incurred a big amount of money for hiring trucks for little or insufficient services. Abig workshop building was set up with equipment and tools under the project for maintenance of vehicles.Now CCC can operate and maintain the procured trucks with a little cost giving great services.

Bridges and Culvert: Eighteen bridges and one RCC box culvert (length 2.25 km size, 3.5m x2.7m) underneath the main city road named Sk. Mujib Road were constructed under this project. Bridgeswere set up on different canals and they now allow easy flow of water through the canals and providessmooth traffic flow as well. Earlier, there was serious disruption of communication to those places forwant of bridges.

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The purpose of Sk. Mujib Road (Culvert (2.25 kin) was to connect the Nasir khal and dischargethe flow in a short way to Karnafuli River. The total length of Nasir khal is about 5.5 km up to thedischarge point of Maheshkhali canal. It would take much time to carry all water coming from theupstream during heavy down pour and rainy season. Besides the flow capacity of Nasir khal wasinadequate causing heavy flooding and inundation of water on both sides of the canal and surroundingareas of Dewanhat, Patantoli, Agrabad C/A and Agrabad R/A. By connecting this culvert the length offlow of Nasir khal has been shortened to 3.0 km. Now, it has become possible to carry all the waterthrough the culvert and discharge to Karnafuli River within short possible time. Earlier, the abovementioned areas would go under water during heavy down pour and water logging would not removeeven for 5-7 days every time. People of those areas had to suffer a lot in monsoon period.

Dustbins: A total of 300 dustbin were set up at different points of the city. Earlier, only 50-60dustbins were in the important places of the city. City dwellers had to use the drain and canals as dustbins.They also had to through their household wastes, garbages in the roadside or anywhere around theirhouses causing serious unhygienic situation. Now this worst situation has much improved. Theconservancy deptt. of CCC is now carrying all the wastes/garbages regularly from the selected point ofdustbin by trucks and dispose then in the tensing ground. Thus, the city is now found clean.

Sanitation: Earlier there was no community latrines in the city for the floating people. Under theproject 23 community latrines were set up and some private latrines were constructed. These are now inoperation and giving good result. But it requires more attention to have good mechanism for effectiveoperation and maintenance to achieve full benefit out of these latrines.

L. FUTURE OPERATION

Chittagong City Corporation (CCC) is the executing agency of project. Besides, CCC is mainlyresponsible to keep the city clean. For this 49 garbage trucks, equipment and workshop tools, 5 tractors,8 wagons, 3 sewage pump and generator were procured and for its maintenance one vehicle workshopwas also constructed. Besides 300 dustbins were constructed. For smooth drainage facilities the flowcapacity almost all the channels were increased by widening and depthing by excavating earth/sand and inmany portions side drainage walls were raised by 3'-4' high. Besides, 20 bridges/culverts (2.25 km) wereconstructed to facilitate smooth flow of the channel and easy traffic movement. Twenty-three communitylatrines were set up for the floating people. These are all in operation and working well.

CCC have already put their conservancy staff to respective points for its operation andmaintenance.

For Vehicles: CCC have prepared operation and maintenance schedule immediately after theprocurement of vehicles and they are now being followed accordingly and will also continue in future.

For Canals: CCC have arranged a separate fund in its annual financial budget to the expense forregular desalting all the canals and silt traps to ensure smooth flow of the canals.

For Community Latrine: All the Latrines for their operation and maintenance have been given toselected persons on lease system through tender (annually). CCC is monitoring its activities regularly.This process will also continue in future.

Bridges/culverts: Engineering deptt. of CCC will maintain and repair all the bridges/culverts as aroutine work in future.

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M. KEY LESSONS LEARNED

PDIU Staff of CCC were given necessary training on computer, engineering survey, fieldsupervision by UNDP. Besides, CCC Staff already attended a number of Workshops/ Seminars onSanitation Program. Healthy City Project, Procurement procedures, etc. From time to time Engg. andprocurement guides books were also provided by World Bank. The World Bank official and the WorldBank Mission during their visit at site had given advise to the PDIU staff about the management ofproject activities and how to maintain the action plans for smooth running and timely completion of theproject. From the above, the PDTU staff of CCC have learned a lot about management and supervision ofproject works. Besides PDIU staff during these 9 years project period learned a lot about engineeringknowledge and practical field work. Staff of CCC were not so much alert about the importance ofsanitation program. After having necessary training/assistance through Workshop/Seminars and advise ofthe World Bank personnel staff of CCC have now realized and learned how to improve the environment.

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HOUSING AND SETTLEMENTS DIRECTORATE

Introduction

By an agreement between People's Republic of Bangladesh and International DevelopmentAssociation (IDA) dated July 29, 1988 the IDA provided loan for "URBAN DEVELOPMENTPROJECT" (IDA CREIT NO. 1930 BD). The closing date of this Agreement was June 30, 1997.

Project Objectives

The objectives of the Urban Area development Project for Low Income Area at KaiballyadhamChittagong were:

(a) To create a replicable mechanism to deliver affordable and livable shelter (plots) to theurban low income population without subsidies;

(b) to test housing loan arrangement to low income groups;

(c) to demonstrate low cost latrine systems for low income groups in urban areas;

(d) to develop 41.30 hectors of land into 4144 nos. residential and 31 small scale industrialplots with provision for 97 market stall, 2 nos. schools and 1 nos. health clinic and otherinfrastructure facilities.

Responsibilities

(i) Sponsoring Ministry of Housing and Public works(ii) Execution Housing and Settlement Directorate(iii) Design Foreign a) Louis Burger International Inc.

b) B.K.H.Local a) Engineering Consultant and Assocs.b) SARMS Associates

c) AQUA

(iv) Operation and Maintenancea) Management . HSDb) Road, Drains, Markets and Street Lighting: CCCc) Power distribution System : PDBd) Water Supply System CWASAe) Natural Gas System . BGSLf) Health Clinic . MOHg) School's . MOE

(v) Technical Assistance during implementation:Foreign : BKHLocal : AQUA

(vi) Financial Assistance:Loan : IDAGrant . UNDP

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Standard Steps

1. To develop serviced plots for low income beneficiaries at a price that is affordable andwithout any subsidy;

2. To Strengthen the Housing and Settlement Directorate (HSD) and improve capability of theHSD to implement similar projects in future;

3. To form comnimittees like steering, technical management, policy planning for monitoring,evaluation, and solving the problems during the implementation;

4. To develop new cost recovery system for easy access of land for the poor.

Statement /Evaluation of Objectives

About 41.3 hectors of land has been developed in Chittagong to provide nearly 4144 residentialplots and about 97 small scale commercial and 31 Industrial plots.

The site is located on the northwestern edge of Chittagong, adjacent to the main industrial area ata distance of about 14 km. from the city center and .5 km. west of the Chittagong-Dhaka Highway (TrunkRoad).

The project includes the acquisition of land, preparation of the site, construction of road'sfootpaths, storm-drains, street lighting, water, sanitation gas and also the provision of communityfacilities such as schools, clinics, and an open space for mosque.

Achievement of Objectives

About 24,000 people with income between Tk.1400 and Tk.9000 per month will benefit fromimproved housing, municipal services, improved health and environment, and access to employmentopportunities.

Major Factors Affecting the Project

1. Land Acquisition: Out of 103 Acres of land 4.47 acres are harsh land. That land has notyet achieved from the respective authority and affects the project a little.

2. Development Works: Various components of the project have re-designed in accordancewith the satisfaction of concerned authority those who have taken over the installation forfuture maintenance. As a result the cost of the development works.

3. Change in PIU members: A frequent change of PIU members like Project Director,Executive engineer, Sub divisional engineer and others affects the project. Always, newcomers differs with the others in different respect.

4. Erosion Protection/Measures: As the land area is not plain at the time of rainy season, thestorm water comes over the land with the tremendous gravitational forces. It causederosion and scouring of the Project area. At this stage, it had protected by constructingdrains, embankments and palisiding works. The problem was not identified earlier andthe same work was not included either in the feasibility study or Staff Appraisal Report.

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5. Decision both of the GOB and IDA: To some extent, due to lack of co-ordination amongthe GOB agencies and IDA's perception has affected the project.

Project Sustainability

The project consists of different component of works such as site preparation, roads, storm drains,power distribution line, water supply, Gas supply, Dustbin, Health Clinic, School, Market andcommercial centers, etc. Most of the components will be handed over to the concerned authority such asChittagong City Corporation, Power Development Board, Bakhrabad Gas System Limited, Ministry ofEducation, Ministry of Health, the rest of the components will remain under the Housing and Settlementdirectorate. After completion of the project, HSD will bear the maintenance cost and will be allocatedthrough the ADP. As the Project cost are covering through the monthly installment in 20 years and willmaintain the concerned organization/ agencies; the project will be sustainable.

Bank Performance

The "Urban Area development and Shelter Project, Chittagong" is financed by IDA under UrbanDevelopment Project, Credit No.1930-BD. The IDA official and world Bank Mission have visited/inspected the project several times for ensuring the physical progress and to meet the PIUJ members forexchanging of views regarding problem, if any. The Bank personnel and the mission members also meetthe concerned higher authority of the Govt. to exchange views and advise the authority for solvingdifferent problems. Moreover, the Bank officials assist the PIU members in different ways as and whennecessary. To some extents IDA officials differ with the Govt. decisions and as a Borrower Govt. has toabide by the IDA' s decision that seems embarrassing for the Govt. Moreover the bank has not maintainedher original committed amount. However, the overall Bank performance is satisfactory.

Borrower Performance

The "Development Credit Agreement" between GOB and IDA was signed on July 29, 1988.Later when the PP was prepared with an amount of Tk.2467.41 lakh and submitted to competent authorityfor approval. The PP was approved by ECNEC on 15.11.1988. the provision was Tk. 430 lakh for landcompensation, Tk. 434 lakh for building loan, Tk. 266.91 lakh for Technical Assistance, Tk. 105.89 lakhfor establishment and Tk. 1230.61 lakh for development works. The contribution of GOB was Tk. 597.42lakh (US $ 1.93 Million) as grant, Tk. 434 lakh (US $ 1.2 M) from IDA as loan, Tk. 266.91lakh (US $ 86M) from UNDP as Grant and Tk. 1169.08 lakh (US $ 3.77 M) from IDA as loan. At that time the US ratewas considered at the rate of Tk. 31/Dollar. Further, the PP has been revised and approved with anamount of Tk. 2753.87 in the year 1994 in accordance with the necessities. Among which the Govt. has toprovide Tk. 785.82 lakh (US $ 2.06 M), the IDA has to provide Tk. 1026.15 lakh (US $ 2.7 M) to work,the IDA has to provide Tk. 525.65 lakh (US $ 1.38 M) for building loan, the UNDP has to provide Tk.416.25 lakh (US $ 1.1 M) for T.A. Here the conversion rate was US $=Tk. 38 up to June/94 and Tk. 39from July/94 and onward.

HSD has claimed an amount of SDR 300,000 by a withdrawal application no. 1 on 09.04.89 andthat has disbursed on 31.07.91. Till to date IDA has disbursed an amount of Tk. 850.01 lakh(US $ 2.07 M) against an amount of Tk. 1026.15 lakh. HSD is expecting to claim all the amountspecially to work within June/97 (which by now supposed to be finished). To some extents, HSD hasdelayed to claim for re-imbursement for various reasons. However, the borrowers performance issatisfactory.

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Achievement of Outcome

There are 4144 nos. of residential, 97 nos. of commercial, 31 nos. of industrial and 10 nos. ofinstitutional plots have been developed with the provision of infrastructure and community facilities suchas schools and clinic. Among the 4144 nos. there are different graded plots and 3400 plots have beenallotted so far and the rests are on processing for allotment. About 24000 people will be benefited withthe improved housing, municipal services, improved health, and environment and access to employmentopportunities. The physical progress of the project is 92.94 percent up to March and the rest is expected tobe completed by June/97. (The project presently finished without the basic facilities of Water, Gas,Sanitation and that's why lagged behind the actual probable dwellers.)

Future Operation

HSD will operate the project until handed over the various components of work to the concernedauthority. According to the PP HSD will operate the management, Chittagong City Corporation, willoperate the roads and drains, Markets and street lighting, Power Development Board (PDB) will operatethe power distribution system, WASA will operate the water supply system, Bakhrabad Gas SystemLimited (BGSL) will operate the natural gas system, Ministry of Health (MOH) will operate the healthclinic and Ministry of Education (MOE) will operate the schools. In the mean time, all theorganization/agencies are requested to take over the respective / concerned installation.

Key Lesson Learned

1. The Planning Principle for more intensive and economic land use.

2. The principles and mechanisms for ensuring affordability and cost recovery.

3. The project will assist in improving national capabilities in regard to the planning andimplementation of similar programmes in the future.

4. The project will also serve to demonstrate government's willingness and ability to meet thehousing needs of the income group in the country.

5. A pricing system for the pricing of plots has been devised, taking into account the differentsizes of plots, the different standards of in infrastructure sand servicing and also thedifferences in locational advantages of the various plots.

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LOCAL GOVERNMENT ENGINEERING DEPARTMENT

Introduction

By an agreement between People's Republic of Bangladesh and International DevelopmentAssociation (IDA) dated July 29, 1988 the IDA provided loan for "URBAN DEVELOPMENTPROJECT" (IDA CREIT NO. 1930 BD). The closing date of this Agreement was June 30, 1997.

Later, through negotiation, the IDA has agreed to transfer part of the unutilized fund equivalent toUS$ 5.07 million for the Rehabilitation and Reconstruction of road and other infrastructure damaged by1997 Cyclone {Cyclone Damaged Roads Rehabilitation Project(CDRRP); Entire Coastal Areal underLGED in and around Chittagong area and rural areas in South-East of Bangladesh and the aboveagreement has accordingly been amended in the month of 28.12.1997. Its was stipulated that all the worksfor the utilisation of the allocated fund shall have to be completed by June 30, 1998. Brisk activities werenecessary to start the execution process and it was possible to start the implementation from October,1997. All the schemes taken up for execution have been successfully completed within 8 months, i.e.,June 30, 1998.

Project Objectives

The recurrence of cyclone and flood in Bangladesh seriously damages the infrastructure affectingthe economy of the whole country. A precept is there for the improvement of post cyclone/flood situationutilizing the available resources. Since the available resources are meager with respect to the inflicteddamages, the fixation of preference to derive the optimum benefit become necessary. The schemes forthe utilisation of this fund have been selected with this precept. While selecting the schemes the emphasishas been given for the rehabilitation and reconstruction of maximum length of road network and otherinfrastructure mainly in rural areas. The Bangladesh economy mainly being agro-based, the rehabilitationof road network in rural areas will facilitate the quicker and easier transfer of the produces and will helpin even distribution of products. The main objectives of the Project were to:

(i) establish improved road network, facilitate agricultural production and enhance ruralsocio-economic activities through rehabilitation/reconstruction of rural infrastructures;

(ii) create direct short term and long term employment opportunities for the rural poorthrough rehabilitation/reconstruction of rural infrastructures;

(iii) create indirect employment in agricultural and non-agricultural sector as a result ofdevelopment activities.

A total number of 227 schemes have been taken up for execution. Besides the rehabilitation andreconstruction of about 141 km of roads and other infrastructure, viz., Bridge/Culverts, Ghat, Jetties havealso been rehabilitated and reconstructed.

Implementation Experience and Results

The implementation process started from October 1997. About 8 months time was available tocomplete the implementation by June 1998. The pre-execution process, viz., selection of schemes,formulation of policy regarding the type and size of contract packages, preparation of contract documentscomprising of:

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1) Conditions of Contract2) Specifications and3) Bill of quantities etc.

required some time. In fact, October to May is the ideal working period in Bangladesh, hence it waspossible to implement the Project conveniently. The Project area covered 6 districts, viz., Chittagong,Coxs Bazar, Feni, Noakhali, Laxmipur and Bhola. Total 227 Nos. Contract packages of contract amountmore than BDT 260 million had been taken up and the work were scattered over 49 Thanas. The conceptof smaller size of contract packages are for ensuring participation of more number of contractors and tocomplete the works quicker which really worked. During selection of schemes the opinion of the Districtand Thana level Engineers including the local people's representative had been given due consideration toensure participation of beneficiaries. The technical specifications had been prepared ensuring maximumuse of indigenous materials and withstanding ability against susceptibility towards cyclone and flood.Consideration was also given to minimise low maintenance cost, quicker construction, re-use of materialsetc. Standard check list for ensuring the quality works was also developed suitable for the project.Progress was monitored at regular intervals and any lacuna or deficiency quickly attended. There wereproblems too on few occasions. Some of the schemes were in remote areas where transportation ofmaterials and equipment were very difficult. Attention for individual situations was necessary. SinceLGED doing has been similar development work in rural area for long time, the experience and skill ofthe people in rural areas helped appreciably towards implementation of schemes.

The Project has been completed within the stipulated time and satisfactory.

Summary of Findings, Future operations and Key Lessons Learned

Future Operation: The rehabilitation and reconstruction of rural infrastructure provideboth tangible and intangible benefit to the rural people and the national economy.

The more active participation of the people helps in identifying the appropriate type of schemesand to derive optimum benefit. The technical specification should be compatible with the workingsituation. Since Bangladesh is prone to frequent cyclone and flood, the reasonable withstand abilityagainst such natural calamities required to be taken into consideration. Motivation of people is moreimportant than the policing in maintaining the quality of workmanship. Immediate maintenance andrepair of damage inflicted due to such calamities are important to prevent more deterioration.

Regular observations and study towards improvement of adaptable specifications to restrain thesusceptibility of damage caused by such natural calamities need to be kept in consideration.

APPENDIX C

OPERATIONAL PLANS

53

CHITTAGONG CITY CORPORATION

CHITTAGONGMemo No. 97/C.E/CCC Date.26/11/98

Zahid H. KhanUrban specialistEnergy & ifrastrcetre TeamThe World Bank3/A, Paribagh, Dhaka.

Sub: Maintenance of drainage network of Chtagong.

After completion of Sheikh Mujib road culvert the major component ofEnvironment Inprovement Project, Chittagong did not experience any flooding inAgrabad area, which used to go under almost knee deep water (before theconstruction of the culvert) on quite a number of occasions during rainy season.However, a littleless than a metre deep deposit of silt was seen, during inspection,in presence of a world Bank mission, which recently visited Chittagong.

Another component, ie construction of 14 nos. of silt trap at different key pointsof vanous khals yielded satisfactory results, when they are cleaned regularly.

In fact if all the main & tertiary khals are desilted, as required, magnitude ofsufferings due to flooding caused by heavy showers would be reduced to amninmurn-

Keeping this in mend City Corporation allocated an amount of taka 10 (ten) crorein 1997-'98, for annual maintenance of its infirastucture giving due emphasis onremoving the deposited silt from various khals to allow free flow of water. Majordesilting is done by preparing schemes & by engaging contractors. Emergencydesilting of vanous khals are done by engaging professional labourers under thedirect supervision of elected ward commissioners. Also labourers of conservancydepartment and Engineering department are engaged to remove silt on emergencybasis.

As an usual practice the early maintenance works are taken care of by therespective executive engineers of the three divisions of the city corporation.Incidentally, city corporation area is divided into three divisions headed byexecutive engineers, who in their turn take suggestions and advice from thesuperintending engineer & finally from the Chief Engineer.

(Rez Amuhan)Chief Engineer

Chittagong City Corporation.

54

OPERATION AND MAINTENANCE

LGED has it's own arrangements to maintain the rural roads throughout the year aswell as periodically. There are two categories of maintenance being operated byLGED which are as follows:

i) Regular maintenance (Routine and Periodic)ii) Rural Maintenance Programme (RMC & RMA)

Regular Maintenance Programme

The detail objectives and operational procedures are stated below:

The primary objectives relating to the maintenance of roads in general are follows:

* To reduce rates of deterioration and thereby extend their durability in order to achieve thedesign life that was originally envisaged.

* To reduce operating costs and accident rates by maintaining good riding surface* To provide safe. regular punctual and convenient transport facilities for private and

commercial road-users.Two other important objectives specifically related to the maintenance of Feeder Roads Type B.Rural Roads, Bridges and Culverts by the LGED are as follows:

* To develop the interest awareness and participation of local people and members of localGovernment bodies by encouraging their involvement in the planing process and otlher stagesof implemnentation

* To provide employment opportunities and alleviate the poverty of the poor people in ruralareas.

Maintenance Categories.

The two main commonly accepted maintenance categories are* Routine Maintenance* Periodic Maintenance

tJnder special circumstances two more categories may also be included, namely* Emergency Maintenance* Rehabilitation

Allocation of FundsAllotment of fuinds must be made against the maintenance schemes approved by the appropriateauthority in the order of priorities from the list of district schemes. Every effort must be made tomaintain the important road network of the district within the allocated fund for each respectivedistrict by HQ, and maintenance funds shall never distributed evenly among the Thanas of thedistrict. Routine maintenance will receive top priority in maintenance fund allocation over othercategories of maintenance.

All Feeder Roads Type B of each district, whether paved in full or partial length and includingthe structures on these roads, shall be brought under the maintenance programme on a prioritybasis. Alter- satisfying the maintenance requirements of all FRB's, if there is any outstandingbalance with the district fund, other types of roads may be included according to the priority

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order fixed earlier. The Executive Engineer must certify that no FRB's in his district have beenleft from the maintenance programme before attending to any rural Roads.

Routine maintenance of shoulders and side slopes must be given due attentioll by engaginglength men in the form of LCS on a regular basis, for which necessary fund allocation must beprovided.

To cover possible emergencies. a maximum amount of Tk. 2.0 (Two) lakh can be set aside ineach district, wlhich can only be used to mitigate instant suffering of the people due to damageto the infrastructure by cyclones, flooding, tidal surge and similar natural disasters. also meetemergency riequirements in the interest of public works.

RESPONSIBILITIES AT DIFEFRENT LEVEL

Activity I ResponsibilityMaintenance Need Assessment through Thana Engineer in consultation with localField Inspections and Condition Surveys people, UP Chairman, Member.Preliminary selection of maintenance Thana Engineer, based on specifiedscheme proposals using inventories maps criteria.plan books and other relevant documents.Approval of preliminary scheme list at Thana Development CoordinationThania level Commitee (TTDC).Preparation of Quantities and Cost Thana EngineerEstimatesSubmissioni of Thana recommendations to Thana Engineer.district Executive Engineer with Quantitiesand Cost Estimates.Review of submitted schemes to determine Executive Engineer and Districtpriorities witlin District fund allocation maintenance Committee (DMC)I imitsSubmission of annual maintenance Executive Engineer.proposals for whole district to LGED HQApprovals issued after review of district LGED-HQproposals and further consultation withXENs if necessaryTenders invited, bids received and Executive Engineercontracts awarded.Implementationi of maintenance contracts Executive Engineer and Thana Engineerwith supervission and quality control.Monitoring and reporting to LGED-HQ Executive Engineer and District

maintenance Committee (DMC)Expenditure of allocated funds completed. Executive Engineer and Thana Engineer

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56

LGED HQ

District Annual APPROVALApprovalsMaintenance

DMC ~~~DISTRICT OFFICE 0-TENDERS, BIDS= | ~~~~~~~~~AND AWARDS

ESTIMATES

THANA OFFICE X SUPERVISION.,MONITORING ANDREPORTING.

tJP AND COMPLETION BYLOCAL END OF MAY

FLOW CHART OF ANNUAL ESTIMATINGAND IMPLEMENTATION PROCESS

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Rural Maintenance Programme(Road Maintenance Component)

PROJECT OBJECTIVES:

RMP has defined two objectives in relation to the RMC

A) "To assist in the development of sustainable, cost effective maintenance of essentialrural earthen feeder "B" roads through the employment of destitute women"

i) Improve Road Maintenance

Improve the quality of rural earthen roads maintenance in a cost-effective and efficientmanner in apprx 3,600RMP unions;

ii) Rationalize the Management Structure

introduce a management structure that increase the participation of the UPs, increasethe responsibility and accountability of both the UPs and RMAs and clarifies themanagement, supervision, and monitoring roles, responsibilities and accountabilitybetween all RMP parties concerned.

B) " to transfer the Road Maintenance (RMC) component from CARE to the LocalGovernment Engineering Department (LGED) of the Ministry of Local Government,Rural Development and Cooperatives (MLGRD&C)"

Responsibility of the Local Government Engineering Department (LGED)

The LGED will:

a. develop and implement, in collaboration with CARE, a project transition plan for RMC,for taking over the RMC operation and management from CARE in a gradual andeffective manner.

b. establish a RMC Unit with a project Director and staff who will work closely with the RMCUnit of CARE RMP for the purpose of eventual adoption of the Road MaintenanceComponent of the project;

c. gradually assume the responsibility for RMC in accordance with the transition plan forRMC:

d. issue, in consultation with CARE keeping conformity with the Agreement, Programmeguidelines and instructions to the participating Districts, Thanas, Unions and local Banksregarding the purpose, operating procedures, rules and regulations regarding the RMC;

e. monitor and review the achievement of the road maintenance objectives andperformance and take necessary follow up actions on CARE/LGED reports anddiscussions held with CARE staff and local officials;

f. organize with the assistance of CARE local staff training, seminars and evaluations andwhen necessary.

g. ensure timely release and transfer of funds for CARE's operational costs ;and releaseand transfer in one installment GOB's and CIDA's contribution to crew wages for Unionswhere CARE is responsible for RMC from the special bank account of the LGED toCARE as per the terms of the agreement between CARE and GOB;

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58

h. ensure timely transfer in one installment of the full yearGOB's and CIDA's contributionsto crew wages by demand drafts to the maintenance crew accounts with local banks forunions taken over by LGED;

i. ensure that agreed upon contributions by Union Parishads are deposited in themaintenance crew accounts by the 3 0 th day of September of each year;

assist CIDA's external evaluations/monitoring missions reviewing RMP progress as andwhen required;

Responsibilities of the Executive Engineer (LGED):

The Executive Engineer will:

a. have an overall coordination and supervisory role within his/her jurisdiction with theLGED Thana Engineers;

b. encourage the unions to deposit the RMC contribution before the annual deadline;

c. provide to the LGED project reports and information pertaining to unions performance inRMC;

d. assist in the resolution of any outstan,ding problem with respect to RMC activities;

e. review in meeting held at the district level the overall achievements and status of theRMC and initiate appropriate steps for removing bottlenecks, if any;

Responsibilities of the Thana Engineer (LGED):

The Thana Engineer will:

a. ensuring that the participating Union Parishads timely deposit their contribution to crewwages and provide the necessary equipment and logistic support to the RMAs in theexecution of their work;

b. arranging Thana Review Sessions on RMC at least once a year;

c. participating in the road assessment and selection process;

d. assisting in the resolution of any outstanding problems with respect to RMC activities;

e. providing technical support and guidance to the Union Parishad and the RMAs on roadmaintenance;

f. ensuring that Union Parishads submit monthly progress reports and that from thosereports consolidated monthly monitoring report is submitted to the Executive Engineerwith copy to the TNO and CARE;

g. monitoring Union Parishads performance and taking appropriate measures as and whenrequired;

h. ensuring that the Union Parishads and Banks understand and comply to the programmeregulations.

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59

Flood Rehabilitation:

Repair & damage due to the 1998 flood has already been taken up under emergencymaintenance programme.

The countrywide flood damage assessment of infrastructures has been made by LGEDand are estimated to BDT 2840 million (US $ 60.48 million). On priority basis already 19flood affected schemes so far been taken up under emergency maintenanceprogramme of LGED amounting Tk. 10 million (US$. 0.22 million). The repair &damages of these infrastructures shall be taken phase-wise and on availability of fundfrom the Donor and GOB

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OPERATIONAL PLAN FOR THE FINANCIAL YEAR 1998-99FOR COMPLETION OF ENGINEERING WORKS OF KUAD PROJECT

Si. Name of Activities Unit Total July Aug. Sept. Oct. Nov. Dec. Jan. Feb. March April May June RemarksNo. works 1998 1998 1998 1998 1998 1998 1999 1999 1999 1999 1998 1999

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

1. High-level Reservoir % 0.43 _ Subject to allocation of fundfrom the Government

2. Pour Flush Latrine % 0.31____ ____________________ _____ - do -

3. Composting Site Shelter % 0.05 _ d_ _ -~~~~~~~~~~~~P do -

4. Composting Site % 0.07Preparation * - do -

5. Internal Road % 0.12 - do -6. G. I. Overhead Bank % 0.03 * -do -

7. Internal Drain % 0.05 -do -8. Hand over of water line to -

Chittagong WASA Depends on WASA9. Hand over of Gas Line to G

B.G.S.L. Chittagong _ _ . Depends on BGSL10. Hand Over of Health

Complex Depends on Mi. of Health11. Hand over to Roads, etc.,

to CCC _ q Depends on CCC0 B f 0 r v :77777__~ = 777 _ 7777g77

1. Allotment of Remaining Plot Delayed due to availability ofResidential Plots 194 some plots afterward.

2. Allotment of Industrial Plot Subject to receiving ofPlots 31 approval for the procedure of

allotment from the HH & PW_______________ for which proposal was sent.

3. Allotment of Market Shop Shop97 ___ . - do-

4. Price Recovery On oin rocess runnin since 1994. ~ ~~~~~ I lg I I1

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MAP: EIBRD 19645

, X ,89 902 ~~ ~ ~ ~~~~~~~~~~~~~~~~~~91° 92°

\ %, 5& imS <- , ~~~~~~BANGLADESHt4<.i4.6-Eaio.^A<\t ' va URBAN DEVELOPMENT PROJECT

X} ~~~~~~~~~~~~~PROJECT MUNICIPALITIES

26 svrs iJt L n i ~~~~~~~~~~~~ ^ X < X -~~~~~~Prinnary Roads Under Construction26< \$ ffi S 0 ~~~~~~~~~~~~~~~~~~~~~Othecr Roads

0 ! ,- ; \\.) | 3 \ ' .j ~~~~~~~~~~~~~~~~~District Headquarters District Boundaries. ,1 < ;+\ S < iy ~~~~~~~~~~~~~~~~~~~Division Headquarters -- =Dvision Boundaries

25°' A' MOAKI~~<' ','t 5

WX~~~~~~~~~~~~~~~ A0 -U P. ; i; X 7 % 7< , Af , Q/ /vC n_ * j X 5 >p-&<i-a /~~~~~~~~~~~~224' 2e u W SX

t X~~~~~~~I