Ex-ante Evaluation
1. Name of the ProjectCountry: People’s Republic of Bangladesh
Project: Telecommunication Network Development Project
Loan Agreement: June 29, 2006; Loan Amount: 8,040 million yen; Borrower: The Government ofthe People’s Republic of Bangladesh
2. Necessity and Relevance of JBIC’s Assistance
The Bangladesh Telegraph and Telephone Board (BTTB) is the main provider of fixed-line
telephone services within Bangladesh, and possesses equipment such as backbone infrastructure,interconnection and international exchange facilities. However, due to delays in the infrastructuredevelopment, the current facilities do not possess sufficient capacity to meet demand, and there is anenormous backlog of customers waiting for service. As a result, the telephone density for fixed-linetelephones in Bangladesh is 0.66%, remaining in a low position relative to the country’sneighboring low income countries. Furthermore, there are also significant problems in the quality oftelecommunications services, such as the low call completion rate, due to the increasing
deterioration of facilities. Moreover, due to insufficient capacity of international lines, the situation
for communicating with foreign countries is remarkably poor in terms of both quality and quantity.
Though the telephone density for fixed-line telephones remains in an extremely low position, thetelephone density rate for mobile telephones on the other hand is advancing rapidly (mobiletelephone density: 4.79%), including in rural areas, through private operators. However,interconnection facilities for the mobile telephone network with the fixed-line telephone network arelacking. Because of this, the number of mobile telephones able to connect to the fixed-line telephone
network is limited, and this serves to restrict increases in the telephone density of mobile telephones.
In addition, mobile telephones which cannot connect to the BTTB’s fixed-line telephone network
are unable to communicate with the fixed-line telephones in such places as administrative
organizations and businesses, as well as with international telephones. This is not only inconvenient,but also has the effect of hampering the smooth exchange of information.
These delays in the development of backbone telecommunications infrastructure and the low degreeof convenience for users hinders the development of the private sector and the luring of foreign
investment, as well as the elimination of disparities between urban and rural areas. They serve as
major obstacles to Bangladesh in terms of further accelerating its economic growth.
In 1998, the Government of Bangladesh released the National Telecommunication Policy, whose
objectives include universal access of telecommunication. In October 2002 the National ICT Policy
was formulated, which confirmed that promotion of ICT (information communications technology)
sector was an important policy of the government as a driving force for the nation’s economy.
Reform of the telecommunications sector is being assisted by the consulting services of the WorldBank (approved in June 2003). In particular, following the corporatization of the BTTB, further
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assistance will be required for the BTTB’s organizational enhancement and capacity building of its
employees.
At the 2000 Kyushu-Okinawa Summit the Government of Japan announced Japan’sComprehensive Co-operation Package to Address the International Digital Divide, which included
the development of information and telecommunications infrastructure. Assistance for thedevelopment of IT infrastructure in developing countries constitutes a part of “infrastructuredevelopment for sustainable growth,” which is one of the priority areas in the Japan Bank forInternational Cooperation (JBIC)’s Medium-Term Strategy for Overseas Economic Cooperation
Operations (FY2005-FY2007).
Based on the above, JBIC’s assistance in this project is highly necessary and relevant.
3. Project Objectives
This project will increase the interconnection capacity among the fixed and mobile networks andconstruct an international exchange network and backbone transmission infrastructure in major
cities of Bangladesh and their surrounding areas, in order to improve existing telecommunication
services in terms of quantity as well as quality, thereby contributing to the development of theprivate sector and the country’s economy
4. Project Description(1) Target Area
Sites for laying telecommunications lines in major cities like Dhaka, Chittagong, Khulna and theirsurrounding areas(2) Project Outline
The project will carry out the procurement of the following necessary materials and equipment,construction work, and the procurement of services in the target area mentioned above.
(a) Development of the telecommunications network and interconnection facilities (installationof additional facilities for interconnecting the mobile and fixed-line telephone networks,installation of additional international switchboard equipment, and expansion of backbone
infrastructure, etc.)(b) Consulting services for engineering services (detailed design, tendering support, andconstruction management for 1. listed above)(c) Consulting services for institutional development (assistance for initiatives such as themodernization of financial and accounting systems in particular based on an administrative
improvement plan which is being formulated with the assistance of the World Bank for theBTTB, following the BTTB’s corporatization)(3) Total Project Cost/Loan Amount
11,411 million yen (ODA Loan Amount: 8,040 million yen)
(4) Schedule
Planned for June 2006-September 2009 (40 months in total)2(5) Implementation Structure(a) Borrower: The Government of the People’s Republic of Bangladesh(b) Executing Agency: The Bangladesh Telegraph and Telephone Board (BTTB) or its
successor corporation following its conversion to a public corporation(c) Operation and Maintenance System: Same as (b)(6) Environmental and Social Considerations(a) Environmental Effects/Land Acquisition and Resident Relocation(i) Category: B(ii) Reason for Categorization
This project does not fall under the category for sector or attribute prone to produce effects
and areas which are easily affected as listed in the JBIC Guidelines for Confirmation ofEnvironmental and Social Considerations (established April 2002). For this reason, andbecause it has been judged that undesirable effects on the environment will not besignificant, this project falls into Category B.
(iii) Environmental Permit
Bangladesh’s national legislation does not require the preparation of an environmental
impact assessment (EIA) report for this project(iv) Anti-Pollution Measures
For operations such as construction work for laying cables measures will be taken such as
spraying water to prevent the scattering of soil, sand, and other materials.
(v) Natural Environment
Since the project target areas and the surrounding areas do not fall under the heading oflocations earmarked for conservation (such as national parks), nor being habitats forvaluable species or similar designations, it is not foreseen that the project will have any
particularly negative impacts.
(vi) Social Environment
It is not anticipated that this project will require the acquisition of land or the relocation ofresidents.
(vii) Others/Monitoring
The executing agency will monitor air quality during the construction work.
(b) Promotion of Poverty Reduction
None in particular.
(c) Promotion of Social Development (e.g. Gender Perspective)
None in particular.
(7) Other Important Issues
Consideration is underway for training on the new technology (IP technology) to be introduced, tobe implemented in cooperation with Japan International Cooperation Agency (JICA).
5. Outcome Targets

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Evaluation Indicators (Operation and Effect Indicator)
Baseline(2005)

Indicator

Target（2010 [one year aftercompletion of project])
40.00
1.00
100,000
1.48
8.2
12 million

Call completion rate (%)
26.48
Fault Ratio (%)
1.50
Waitting Applicants
140,586
Telephone Density (Fixed: %)0.66
Telephone Density (Mobile: %)4.8
Number of Mobiles Connected to Fixed
1.57 million
lines
Number of internet users
400,000
1 million
6. External Risk Factors
A downturn in the number of private sector enterprises entering the market, considering the lack ofability on the part of independent regulatory bodies related to matters such as the setting ofinterconnections fees.
7. Lessons Learned from Findings of Similar Projects Undertaken in the Past
The lesson has been acquired from similar projects in the telecommunications sector from the pastthat quick decision-making on the part of the executing agency is important for the preparation andexecution of the project due to the rapid technological innovations in this sector. Based on thislesson, human resources at the general manager-level are scheduled to be appointed as officials
responsible for the Project Management Unit (PMU). Moreover, through the corporatization of theBTTB, the authority for matters such as procurement will be transferred away from the government,
which is expected to expedite decision-making. In addition, the lesson has been acquired that in thecase that the executing agency is scheduled to be converted to be corporatized, sufficient monitoringon the development will be important. Based on this lesson, for this project the plan is underway toascertain the development toward corporatization, and provide conversion assistance throughmanagement consulting services.
8. Plans for Future Evaluation(1) Indicators for Future Evaluation(a) Call completion rate (%), (b) Fault ration (%), (c) Waiting applicants, (d) Telephone density(fixed) (%), (e) Telephone density (mobile: (%), (f) Number of mobiles connected to fixed lines(people), (g) Number of internet users (people)(2) Timing of Next Evaluation
After completion of project4