Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the Project(1)
Country: The People’s Republic of Bangladesh(2)
Project Site / Target Area: Cox’s Bazar District, Chattogram Division(2.82 million (Census, 2022))(3)
Project:(Japanese ODA Loan) Matarbari Port Development Project (II)(Technical Assistance Project related to Japanese ODA Loan) Project for
Capacity Development on Operation, Maintenance and management inMatarbari Port
(4) Loan Agreement: March 29, 2023
2. Background and Necessity of the Project(1) Current State and Issues of the Port/Harbor Sector and the Priority of the
Project in Bangladesh
In Bangladesh, with GDP having grown at an average annual rate of more than
6% during the past ten years, the value of cargo trade has risen at an averageannual rate of approximately 8% during the same period (International Monetary
Fund, 2022). Furthermore, container cargo handling volume in Bangladesh,which stood at 2.35 million TEU (Twenty-foot Equivalent Units) in 2016, isexpected to reach 10.3 million TEU in 2041 (Japan International Cooperation
Agency (JICA) Preparatory Survey on the Matarbari Port Development, 2019).
In Chattogram Port which handles 98 % of container cargo and 89 % of generalcargo in Bangladesh, the cargo handling volume has increased from 1.34 million
TEU (2010) to 2.59 million TEU (2020) for container cargo, from 41.18 million ton(2010) to 94.88 million ton (2020) for general cargo, in response to the increase incargo demand. This indicates that the container cargo handling capacity in
Chattogram Port has already exceeded the designed capacity (1.75 million TEU).
The current water depth of Chattogram Port (the lowest water level (Chart Datum
Level) is adopted as the tidal datum) is between 7.5 m and 9.5 m. In light of therecent worldwide trend of growth in the size of vessels and the future increase incargo demand, the existing ports are unable to accept medium and large vessels
exceeding 2,700 TEU which will be indispensable in the near future. In order tomeet future cargo demand, it is urgent to develop a new port and harbors with
sufficient depth to accept medium and large vessels.
Based on the situation above, the Matarbari Port Development Project(hereinafter referred to as the “Project”) is planned to be implemented. The

Project aims to increase the overall cargo handling capacity of Bangladesh, help
to meet the expected rapid increase in cargo demand, and allow the port toaccept increasingly large vessels by constructing a new commercial port with adepth of 16 m in the Matarbari area as well as the access roads that will be
indispensable to promoting use of the new port.
Matarbari port to be developed with the Project will be the first deep-sea port of
Bangladesh, and it will huge impact on enhancing Bangladeshi port sector’scargo handling capacity. On the other hand, Matarbari Port has some issues to be
tackled in terms of promoting its usage. Matarbari port, unlike exiting port at
Chattogram, is located further from Dhaka and Chattogram, Bangladesh’s
biggest consumption centers, and at the same time road/railway access is notdeveloped yet. Also since Matarbari Port is newly opening port, it is necessary tocollect cargoes and customers from the scratch. In addition, it is the firstexperience for Chittagong Port Authority (hereinafter referred to as “CPA”. In
2018, the government of Bangladesh changed the name of the city from
“Chittagong” to “Chattogram”, but the name of Project implementation
organization is still “Chittagong Port Authority”) to manage multiple ports inremote locations at the same time, so cannot be optimistic about the smooth
operation of the new port. Based on this background, it is essential to build asystem to realize smooth terminal operation and strengthening operation of thenavigation management capacity of the port, examine cargo collection policy at
the port, and strengthen the CPA’s capacity on promoting usage of the new port.
From this point of view, “Project for Capacity Development on Operation,
Maintenance and Management in Matarbari Port” (hereinafter referred to as“Technical Assistance Project related to Japanese ODA Loan”) was requested.
The Project (including Technical Assistance Project related to Japanese ODA
Loan) is positioned as one of the highest-priority projects for improving theinternational competitiveness in economy and supporting domestic demand, in
the Eighth Five-Year Plan (FY2020/21–FY2024/25) and Vision 2041 which setsout long-term development challenges to be achieved by 2041. The Project will
also contribute to the realization of the Bay of Bengal Industrial Growth Belt
(hereinafter referred to as the “BIG-B”) initiative, which is advocated by theGovernments of Japan and Bangladesh, and the Government of Bangladesh has
decided to prioritize the development of industrial complexes, etc. with MatarbariPort as their core.
(2) Japan and JICA’s Cooperation Policy and Operations in the Port/Harbor
SectorJapan’s Country Assistance Program for Bangladesh (February 2018)

identifies one of Bangladesh’s priority areas as being to accelerate economic
growth so that everyone can benefit as Bangladesh strives to become a
middle-income country. It mentions that the Government of Japan will cooperatechiefly in the BIG-B initiative and contribute to better connections throughout theregion by developing high-quality transportation networks and promoting theefficient movement of people and goods. Moreover, the JICA Country Analysis
Paper for Bangladesh (March 2019) identifies “development of nationaltransportation networks” as prioritized issue, in response to the fact that the cargotransport delays caused by the cargo handling volume of Chattogram Port
exceeding its design capacity. The JICA Country Analysis Paper also explainsthat it is necessary to improve and streamline the transportation and traffic
network (roads, bridges, railroads, airports, ports, etc.) with an awareness ofrealizing BIG-B initiative, improving regional connectivity and rationalizing
transportation modes. The Project is, therefore, consistent with the analysis andpolicy.
The Project will also contribute to “the pursuit of economic prosperity” under theJapanese government’s vision of “Free and Open Indo-Pacific”. Moreover, theProject also contribute to “building global network”, one of the approaches intransportation area under the JICA Global Agenda (June 2022).
These effects brough by the Project will be reinforced by strengthening CPA’s
capacity for port management, operation, promotion and ship navigation safety
through Technical Assistance Project related to Japanese ODA Loan.
(3) Other Donors’ Activities
The Asian Development Bank (ADB) has supported for developing a masterplan for Chattogram Port in “Strategic Master Plan for Chittagong Port”(2011-2019). ADB also conducted the detailed design for developing accessrailway between national road 1 and Matarbari area. Furthermore, the WorldBank is supporting the strengthening of the inland water transportation
capabilities between Chattogram, Dhaka and Ashuganj.
3. Project Description(1) Project Description① Project Objective
The objective of the Project is to strengthen the port’s cargo handling capacity
and to facilitate logistics operations with neighboring countries. It will do so byconstructing a multipurpose deep-sea port for containers and general cargo inthe Matarbari area of Cox’s Bazar, Chattogram Division, thereby contributing
to economic development of Bangladesh.
②

Project Components(Japanese ODA Loan)
1) Civil work (construction of container terminal, multipurpose terminal,basin dredging, access roads, etc.)
2) Procurement and installation of cargo handling equipment
3) Development of port-related facilities and equipment
4) Consulting services(Technical Assistance Project related to Japanese ODA Loan)
1) Input
Japanese sideA) Dispatch of short-term experts（148P/M in total）（Chief Advisor, Port
Management Strategy, Port Operation, Port Promotion, Logistics
Planning, Public Private Partnership（PPP）Legal System, Project
Coordination）B) Training in Japan（Training on port operation and management
Bangladesh sideA) Assignment of necessary personnel
B) Provide service, facility and cost necessary for the Project.
2) Project Purpose
Efficient operation, maintenance and management structure for MatarbariPort will be established.
3) Output
Output 1. The capacity of terminal operation in Matarbari Port is enhanced.
Output 2. The capacity of safe navigation management in Matarbari Port isenhanced.
Output 3. The capacity for planning/executing measures to attract port
users and increase cargo demand of Matarbari Port is enhanced.
Output 4. The capacity for formulating mid- and long- term management
strategy in Matarbari Port is enhanced.

4) Activities
1-1. Technical guidance on monitoring terminal operation
1-2. Technical guidance on container planning
1-3. Technical guidance on overall efficiency of terminal operation
1-4. Technical guidance on the development of a terminal operation manual
1-5. Technical guidance on drafting TOR on the consignment contract for
terminal operation
1-6. Technical guidance on maintenance of cargo handling equipment
1-7. Technical guidance on port security
2-1. Technical guidance on the operation of navigation aids and VTMS
2-2. Technical guidance on the formulation of water area use rules in the port
2-3. Technical guidance on ship entry / departure management for large
ships and ships carrying dangerous goods
2-4. Technical guidance on efficient maintenance dredging and maintenanceof breakwater
2-5. Technical guidance on simplifying ship entry / departure procedures andon port EDI system
3-1. Technical guidance on practical realization of multi-modal hinterland
logistics
3-2. Technical guidance on strategic tariff setting of ports
3-3. Technical guidance on enhancing collaboration with stakeholders forport promotion
3-4. Technical guidance on the marketing related to mid- and long-term
industrial development in the hinterland
4-1. Technical guidance on reviewing PPP-related laws and regulations on aport terminal
4-2. Technical guidance on examining business conditions on the PPP of aport terminal
4-3. Technical guidance on preparing a roadmap for the introduction of PPP
into a port terminal③

Project Beneficiaries (Target Group)(Japanese ODA Loan)A) Direct beneficiary: User of Matarbari port and access road, logistics
companies which will benefit from reduced congestion at ChattogramPortB) Indirect Beneficiary: Bangladeshi citizens who are the consumers ofgoods and services delivered using Matarbari port and access road (165
million (Census, 2022))(Technical Assistance Project related to Japanese ODA Loan)A) Direct Beneficiary: CPA
B) Indirect Beneficiary: User of Matarbari Port
(2) Estimated Project Cost
(Japanese ODA Loan)
303,357 million Yen (Loan Amount: 105,362 million Yen)
(Technical Assistance Project related to Japanese ODA Loan)
640 million Yen(3) Schedule(Japanese ODA Loan)
June 2018 – January 2028 (116 months in total). The Project will complete
upon commencement of service at the facilities (January 2027).
(Technical Assistance Project related to Japanese ODA Loan)
January 2022 – June 2027 (66 months in total).
(4) Project Implementation Structure1) Borrower: The Government of the People’s Republic of Bangladesh
2) Guarantor: N/A
3) Executing Agency: Chittagong Port Authority (CPA) and the Roads andHighways Department (RHD) of the Ministry of Road Transport andBridges4) Operation and Maintenance System: CPA and RHD(5) Collaboration and Sharing of Roles with Other Donors
1) Japan’s Activity
Under the Japanese ODA Loan “Matarbari Ultra Super Critical Coal-Fired
Power Project” (approved in FY 2014), a navigation channel, berth andbreakwaters will be constructed as part of constructing the coal delivery port.
The new commercial port to be constructed under the Project will jointly use
these port facilities (navigation channel, berth and breakwaters). In addition,
the Japanese ODA Loan “Chattogram-Cox’s Bazar Highway Improvement
Project” (approved in FY 2022) is providing support for the construction of a
flyover and outer roads at a major congested sections of National Highway 1.
By improving access from Cox's Bazar to Chattogram and further to Dhaka
under this project, and together with constructing access road (from Matarbari

port to National Highway 1) under the Project, logistics in the country will bepromoted. In addition, the Government of Bangladesh is planningcomprehensive development in the hinterland of Matarbari port to attract
large-scale investment, and JICA has been supporting formulation of thedevelopment plan and improvement of the implementation structure throughdispatching "Advisor for Investment Climate Improvement" (FY 2019-2021)
and "MIDI Policy Advisor" (FY 2021-2023).
2) Other Donors’ Activity
N/A(6) Environmental and Social Consideration①
Category: A (Japanese ODA Loan), C (Technical Assistance Project
related to Japanese ODA Loan)②
Reason for Categorization: The Project falls into the port/harbor sector(likely to have significant adverse effects due to its characteristics) under the
JICA Guidelines for Environmental and Social Considerations (published in
April 2010). On the other hand, Technical Assistance Project related toJapanese ODA Loan can be considered to have minimum adverse impact on
the environment.
③
Environmental Permit: The Environmental Impact Assessment (EIA)
report on the Project was approved by the Department of Environment,
Ministry of Environment and Forests of Bangladesh on November 26, 2018
(port/harbor) and December 6, 2018 (road). The Project requires annual
renewal of environmental permits, and both CPA and RHD have been
updated with the latest version in December 2021.
④
Anti-Pollution Measures: During the construction work, measures for
air quality, water quality, and noise and vibration, etc., such as water
sprinkling, covering vehicle platform, installation of silt diffusion prevention
film, installation of wastewater treatment equipment, restrictions on nighttime
construction, use of low noise/vibration equipment, etc., will be taken in orderto satisfy the emission standards and environmental standards in
Bangladesh. In accordance with domestic laws, the waste from vessels after
opening will be appropriately treated in port facilities. Measures, such as
limiting the speed around residential areas, etc., will be taken against noiseand vibration generated on access road after opening.
⑤
Natural Environment: The port and access road construction sites do
not fall under protected areas, such as national parks, etc., or importanthabitats. The access road will be constructed in the vicinity of theMoheshkhali Forest and Hill Reserve and the Fasiakhali Wildlife Sanctuary,
but the impact on the precious ecosystem in the reserve and sanctuary will
be reduced by implementing awareness-raising programs for workers. In
addition, there is an important natural habitat called “Sonadia Ecological
Critical Area” located 15 km south of the Port. However, the area is far
enough from the Port and the shipping channel, and significant impact is notexpected. In case valuable species such as spoonbills and sea turtles arefound around the construction site for the Port, awareness-raising programs
for workers, appropriate monitoring and reduction of night-time construction
to limit the use of lighting equipment and noise are planned.
⑥
Social Environment: The Project involves land acquisition of
approximately 64 ha and 188 ha and involuntary resettlement of 176 and1380 residents by the construction of the Port, excluding the soil disposal site,
and the access road, respectively. For each component, land acquisition,compensation, etc. are being conducted in accordance with the national
procedures of Bangladesh and the resettlement plan. With the loss of manysalt fields and shrimp farms, there has been a growing demand among
affected residents for support for the recovery of their livelihoods. In responseto the demand, implementation of a livelihood recovery support program isplanned. Community consultations will be conducted continuously to confirm
the requests from affected residents, and a grievance mechanism will be
operated. Although no particular impact of the Project on coastal fisheries
and on the induction of flooding in the surrounding area is anticipated,monitoring will be conducted under the mechanism in ⑦ below, andexecuting agencies will provide livelihood recovery support as necessary.
⑦
Other / Monitoring: In the Project, the contractor will monitor
environmental and social impacts during construction, under the supervisionof the executing agencies. The executing agencies will monitor
environmental impacts after opening. NGOs contracted by the executing
agencies will monitor social impacts for both under construction and after
opening, under the supervision of the executing agencies.
(7) Cross-Sectoral Issues① Climate Change Measures: The Project will contribute to climate change
countermeasures (adaptation) (secondary objective), as the construction

of the Port and the access road will contribute to reducing the impact of
future climate change by taking into account long-term weather hazards.
② Infectious Disease Measure: Since this is a large-scale infrastructuredevelopment project in an area where the spread of HIV infection isconcerned and workers will be concentrated at one construction site for along period of time, education on preventing HIV infection will be provided
to related workers, including drivers, who enter and leave theconstruction site. With regard to COVID-19, infection preventing
measures will be implemented by paying attention to the local infection
situation and referring to the local laws/regulations and WHO guidanceon measures against COVID-19.
(8) Gender Category: [N/A] GI (Gender Mainstreaming Needs Assessment andAnalysis Project)
Reason for Categorization:
Although gender mainstreaming needs were investigated in the preparatory
survey, specific indicators were not established. On the other hand, theconstruction work under the Project plans to promote gender equality byensuring equal pay for equal work regardless of gender and providing facilities
for women workers.
(9) Other Important issues
The Project may be able to introduce advanced technologies (civil works,
cargo handling equipment, etc.).
4. Targeted Outcomes(1) Quantitative Effects
1) Outcomes (Operation and Effect Indicators)(Japanese ODA Loan)

Indicator
・Port Component
Container cargo throughput (million
TEU/year)*Baseline(Actual value
in 2018)

Target (2029)[Expected value 2 years
after project completion]-

0.45

General/bulk cargo throughput (million
ton/year)*
Number of container cargo ships
entering the port (ships/year)*
Number of general/bulk cargo ships
entering the port (ships/year)*Max capacity of container cargo ship
which is acceptable for the port
(TEU/ship)
Max capacity of bulk/general cargo
ship which is acceptable for the port
(DWT (note1) /ship)
・Access Road Component
Annual average daily traffic(vehicles/day)Travel time (minutes) (note2)

-

0.99

-

107

-

31

-

4,700

-

70,000

-

3,916

62

25

(note1) DWT means Deadweight Tonnage(note2) The time required to drive from the intersection of National Road No.1 and the accessroad which will be constructed in the Project, to Matarbari port. Baseline is set as using theexisting road, target is set as using the access road.

(Technical Assistance Project related to Japanese ODA Loan)
Items mentioned with “*” in above chart can be applied to Technical Assistance
Project related to Japanese ODA Loan.
(2) Qualitative Effects(Japanese ODA Loan)
Port congestion in Chattogram Port is reduced. Logistics with neighboring
countries are promoted. Investment in the vicinity of Matarbari Port is promoted.
(Technical Assistance Project related to Japanese ODA Loan) Safe ship entry / exit of container vessels is realized after thecommencement of the port.
 Efficient dredging plan is formulated.
 Strategic tariff setting is realized.
 Transportation system consists of multi-mode is constructed.
 Operation manual, rules on safe navigation, mid-long term management
strategy are formulated.
(3) Internal Rate of Return

Based on the assumptions listed below, the economic internal rate of return(EIRR) for the Project is 10.5%, the financial internal rate of return (FIRR) is 3.3%.
[EIRR]
Cost: Project costs and maintenance/operation costs (excluding tax)
Benefit: Reduction in marine transportation costs, reduction in demurragecosts, reduction in travel time, reduction in travel costs and reduction in
inland transportation costs
Project Life: 43 years[FIRR]
Cost: Project costs and maintenance/operation costs for Port component
Benefit: Operating revenue of the port
Project Life: 43 years
5. External Factors and Risk Control
The construction of navigation channels, berths and breakwaters under theJapanese ODA Loan “Matarbari Ultra Super Critical Coal-Fired Power Project”
will be smoothly implemented.
6.Lessons Learned from Past Projects
The results of the ex-post evaluation of “Batangas Port Development Project”(evaluated in FY 1999) and “Subic Port Development Project” (evaluated in FY2014) by the Japanese ODA Loan for the Republic of the Philippines revealed
that, when the construction of a new port is planned, it is important to clarify thedivision of functions between the existing port and the new port, to develop apolicy or plan for operating each port organically, and to give incentives for using
the new port (improving access to metropolitan area, etc.) in an effort to stimulate
demand for its use. The Project has confirmed the division of functions with otherdomestic ports (current status, development plan and cargo demand sharing
based on geographical conditions for each port) through preparatory survey anddetailed design of the Project. The project will continue to follow up the discussion
in the Government of Bangladesh and development of hinterland of Matarbari
port. CPA will examine port operation strategies that will promote the use of the
new port, such as the division of functions with ports in neighboring countries andensuring the efficiency of the new port operated by CPA, etc. A part of thestrategies will be implemented through technical assistance by JICA.
The results of the ex-post evaluation of “La Union Port Development Project”

(evaluated in FY 2015) by the Japanese ODA Loan project for the Republic of El
Salvador revealed that it is important to consider ways of maintaining thesustainability of the project. This can be done by anticipating the risk ofdecreasing in cargo demand and fluctuation in maintenance and dredging
expenses, and by predicting the volume of soil accumulated with reliableaccuracy in the planning stage.
The cargo demand is expected to continue to increase because the amount ofcargo trade has increased by 12% per year with GDP growth averaging over 6%
per year for the past 10 years. In addition, the Government of Bangladesh isplanning to formulate a development plan for the hinterland of Matarbari port
which will attract large-scale direct investment. JICA has also been supporting
formulating the development plan and improving the implementation structure, by
dispatching experts named as “Advisor for Investment Climate Improvement” and“MIDI Policy Advisor”. The Project is expected to generate a large amount of soil
and this has also been estimated in the preparatory survey. The monitoring of theamount of soil and the estimation of maintenance dredging cost will be continued
by the executing agencies with the consultants for both “Matarbari Ultra Super
Critical Coal-Fired Power Project” and the Project. The cost effective measures
will be considered in the technical assistance project related to the Project.
7. Evaluation Results
The Project is consistent with Bangladesh’s development issues and policies
and with the assistance policies and analyses of the Government of Japan and
JICA. Through the development of multipurpose deep-sea port, the Project will
strengthen the port’s cargo handling capacity and facilitate logistics operations
with neighboring countries, thereby contributing to SDGs goal 8 (economic
growth) and goal 9 (Build resilient infrastructure). Thus, the necessity for JICA to
support the Project is substantial.
8. Plan for Future Evaluation(1) Indicators to be Used
As indicated in sections 4..
(2) Future Evaluation Schedule
Ex-post evaluation: Two years after the project completion