Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry: The People's Republic of Bangladesh
Project: The Northern Bangladesh Integrated Development Project
Loan Agreement: March 10, 2013
Loan Amount: 20.556 Billion Yen
Borrower: The Government of the People's Republic of Bangladesh
2. Background and Necessity of the Project(1) Current State and Issues of the Local Development Sector in Bangladesh
Bangladesh has achieved rapid economic growth in recent years, with a declining
tendency of the national poverty rate as a whole. However, approximately 31.5%(about 470,000 people) of the total population in 2010 still remained under the poverty
line according to the Government’s standard. Especially in rural areas, where thepoverty rate is higher than urban areas by more than 10%, a commitment to poverty
reduction is one of the vital policy issues. Disadvantages in rural infrastructure
consolidation, such as roads, have been impeding not only economic opportunities
such as the activation of commodity distribution but also the improvement of access toadministrative services such as schools, hospitals and so forth. In addition,municipalities (Pourashava) of local cities, which are expected to play roles as acentral hub for promoting local economic development, are vulnerable in terms ofhuman resources and financial shortage. Local administration has been a bottle neckin realizing poverty reduction, due to lack of their mechanism and capabilities toformulate and implement development plan reflecting the needs from local residents.
Especially in small rural cities (average population of 50,000) neighboring to rural
areas, administrative capabilities outstandingly have been lacking, while few donororganizations have supported these areas. Delays in the consolidation ofinfrastructure both inside local cities and between neighboring areas are also issues.
(2) Development Policies for the Local Development Sector in Bangladesh and thePriority of the Project
The “Sixth Five Year Plan” (2011-2015) aims at activating local economy throughconsolidating infrastructure and strengthening local administration, etc, for thepurpose of solving regional disparities and realizing balanced development. In termsof rural infrastructure consolidation, “National Rural Development Policy” in 2001
focused on the consolidation of rural infrastructure for poverty reduction. “Rural Roads
Master Plan” in 2005, formulated following the aforementioned policy, set a goal tocomplete the consolidation of rural infrastructure before 2025. As for local city
development, the “National Urban Sector Policy (draft)” in 2011 raised as one of themain goals the formulation of development plans for local cities and the improvement

in administrative capacities in order to respond to rapid urbanization. The Project has
been highly prioritized by the country since it is in line with the aforementioned
development policies and is to contribute to achieving the goal.
(3) Japan and JICA’s Policy and Operations in the Local Development Sector“JICA Country Analysis Paper for Bangladesh” (February 2012) analyzed that‘overcoming social vulnerabilities’ was a focal issue. “Country Assistance Policy forBangladesh” (June 2012) articulated that, from perspectives of poverty reduction inrural areas as well as regional disparities adjustment, the Japanese assistance to thecountry would focus on the consolidation of roads, markets, irrigation facilities, waterfacilities, etc. This is considered in line with needs at local sites and based on theprevious assistance achievements and technical comparative advantages. In addition,
the Project is considered in accordance with these policies and analyses, taken into
account its commitment to the cooperation focusing on the assistance to thedissemination and scale-up of collaborative system of residents and the lowest
administration, which is an achievement of the previous assistance, and theimprovement of living conditions of residents utilizing its mechanism. Mainachievements in recent years are as follows.
・ Loan assistance: Greater Faridpur Rural Infrastructure Development Project (2001),
Eastern Bangladesh Rural Infrastructure Development Project (2004), South
Western Bangladesh Rural Development Project (2010)
・ Technical Cooperation: Participatory Rural Development Project (I: 2000~2004, II:2005~2010), Rural Development Engineering Center Setting-up Project inBangladesh (I: 2003~2006, II: 2007~2010)(4) Other Donors’ Activity
In the field of rural infrastructure such as roads, main donors working across thecountry include JICA, Asia Development Bank (ADB), and World Bank (WB). As forthe field of local city development, ADB and WB are the main donor organizations
supporting governance capacity development and infrastructure consolidation.
(5) Necessity of the Project1) The poverty of Northern Area
Approximately 25% of the total population in the country reside in the northernpart of Bangladesh (8 Districts of Rangpur Division, 6 Districts of Dhaka Division
Mymensingh District), where the ratio of rural infrastructure consolidation has been
far behind compared to other areas (28% in Union roads, while 40% of the national
pavement ratios), with a higher poverty ratio than the national average by around
10%. Especially in Rangpur Division, a target area of the Project, its poverty ration
is 42.3%, the highest figure among the 7 districts in the country. Therefore, theconsolidation of rural infrastructure in the northern area has been an urgent issue
for the purpose of poverty reduction.
2) Consolidating rural infrastructure and developing local cities

① The establishment of local integrated infrastructure network
In Bangladesh, the consolidation work of rural infrastructure by the Central
Government has been valued, while their connectivity with infrastructure
consolidated by local municipalities such as roads has been underestimated as atendency. This has been impeding economic development in rural areas, causing
delays in infrastructure development managed by local municipalities.
Following these conditions, it has become an urgent task to establish the local
infrastructure network through a collaborative work between the Central
Government and local municipalities including Pourashava. In addition, theimprovement of quite vulnerable administrative and financial governance isinevitable for the infrastructure consolidation by the local municipalities.
② Delays in Pourashava Development
Pourashavas under Category B among local municipalities are supposedly
equipped with proper number of personnel according to the law. However, as
shown in the Table 3 (the number of personnel of Pourshava and the average
ratio of adequacy in the target areas), the ratio of personnel adequacy has beenquite low, together with limited financial sources, resulting in their inability inproviding sufficient social services. As such, delays in development of Pourshava
have faced serious situations and have caused a bottleneck of local development
including villages.
③ Pourashava as a promoter of local development
Along with the proceeding urbanization, not only rural areas, but alsoPourshava has started to collect more attentions for the rural development, wheredeveloping Pourshava has become more important as a promoter of localdevelopment and a central hub for peripheral economic zones.
3) Dissemination use of Link Model
The Government of Bangladesh highly evaluated the collaborative system
between residents and the lowest administration in local municipalities (“LinkModel”) which was developed in “Participatory Rural Development Project”(Technical Cooperation Project completed in 2010) targeting Union. Furthermore,
the Government strongly requested that its results could be disseminated andutilized in developing local cities with lower than Category B which keenly sharesimilarities with Union.
4) Necessity of the Project
The Project aims at consolidating rural infrastructure and improving theinfrastructure consolidation of local cities and capacity development of local
municipalities in the 14 Districts of the northern area of Bangladesh where thepoverty rate is the highest in the country. As aforementioned, the Project is in
response to important issues in local development, and is in line with assistancepolicies of the Government of Japan and JICA. In this regard, the necessity andrelevance to assisting the Project is considered to be high.
3.

Project Description(1) Project Objective(s)The Project intends to contribute to activating economic activities, reducing poverty,
and alleviating regional disparities in the northern 14 Districts of Bangladesh with highpoverty rates, through the improvement of access to basic infrastructure and publicservices by consolidating the infrastructure both in rural areas and local cities as well
as by enhancing administrative and financial capacities of local municipalities in thetarget Districts.
(2) Project Site/Target Area: 14 Districts (8 Districts of Rangpur Division, 6 Districts ofMymensingh Division under Dhaka Division) of Bangladesh northern area
(3) Project Components (Including the Procurement Method)
1) Rural infrastructure consolidation (Upazila roads, Union road, bridges, etc)
(international competitive bidding)2) The assistance to local city infrastructure consolidation and administrative andfinancial enhancement (improving city roads, drainage facilities and city plans,enhancing tax collection capabilities, etc) (international competitive bidding)3) Strengthening implementation structure (vehicle procurement, strengthening
accounting management) (international competitive bidding)4) Consulting services (assisting detailed design, bidding assistance, construction
management, administrative and financial enhancement, monitoring andevaluation, etc) (short list method)(4) Estimated Project Cost (Loan Amount): 26,696 million Yen, including Loan
Amount 20,556 million Yen(5) Schedule
From March 2013 to March 2020 (85 months in total). The completion of the Projectis to be considered the time of starting operation of all the facilities (March 2019).
(6) Project Implementing Structure1) Borrower: The Government of the People’s Republic of Bangladesh
2) Executing Agency: Local Government Engineering Department (LGED)
3) Operation and Maintenance System: LGED, a municipality of a local city
(Pourashava)(7) Environmental and Social Consideration/Poverty Reduction/Social Development
1) Environmental and Social Consideration① Category: F1
Reason for Categorization: Taking into account the “JICA Guidelines forEnvironmental and Social Considerations” issued in April 2010, the Project is
not able to finance to financial agencies, etc, or to identify sub-projects before
financing approval from JICA. In addition, those sub-projects are assumed toimpact on environment.
② Other / Monitoring: In the Project, the executing agency is to be supported byconsultants to classify the categories as to each sub-project based on “JICA
Guidelines for Environmental and Social Considerations”, and to takenecessary measures for given categories. Meanwhile, the implementation ofsub-projects for Category A is not assumed.
2) Promotion of Poverty Reduction: The Project includes plantation activities along roadshoulders by poor women and assistance to slum development in local cities.
3) Promotion of Social Development (e.g. Gender Perspective, Measure for Infectious
Diseases Including HIV/AIDS, Participatory Development, Consideration for theHandicapped etc.) : Employment promotion of poor women in road management,
formulation of gender assistance plans, formulation of city development plans byresidents participatory approach, implementation of infrastructure consolidation.
(8) Collaboration with Other Schemes and Donors
Local city support is to be implemented within a similar framework with ADB
assistance projects. In addition, achievements and knowledge of the collaborativesystem between residents and the lowest administration in local municipalities (LinkModel), established in the “Participatory Rural Development Project” (TechnicalCooperation Project completed in 2010), are to be utilized in the formulation of local
city development plans.
(9) Other Important Issues
Revising various manuals and guidelines regarding administrative and financial
enhancement in local cities is planned, together with dispatches of experts of loan
assistance cooperation for the purpose of capacity development of target local cities.
In addition, it is planned to implement a technical cooperation project with ODA loan
assistance targeting the Ministry of Local Autonomy Rural Development Cooperativeand Local Administration Department, based on the experiences in the Project, inorder to strengthen legal system aspects of local administration.
4.

Targeted Outcomes(1) Quantitative Effects
1) Performance Indicators (Operation and Effect Indicator)
Types of sub-project

Rural roads

Indicator (unit)

Baseline

Target (2021【Expected value 2years after projectcompletion】

Annual average traffic volume perday (vehicle/day)-increase

Average hours required-

decrease

Average transportation costs(TK/time)-decreaseRural markets

Local city roads
related facilities

Local city markets/meat processing plant

Number of shops and sellers(shop/person)
Amount of fresh food disposed(kg/day)
Annual average transportation
volume (vehicle/day)Average hours required
Average transportation costs(TK/time)
Number of shops and sellers(shop/person)
Amount of fresh foods disposed(kg/day)-

increase-decrease-increase-decrease-decrease-increase-decrease

Water supply/sanitary
related facilities

Population accessible to water-

increase

Bus terminals

Number of users (person/day)-increase-decrease-increase

Drainage channelsWaste treatment sites

Number of days when roads areinundated (day/year)
Waste accumulated amount(day/ton)

Indicators and standard values are to be set at a time of baseline survey for each
sub-project at a sample basis.
2) Internal Rate of Return: Since all the target sub-projects cannot be selected
before the implementation of the Project, the rate for the Project as a whole is
not estimated. Sub-projects with more than 12% of EIRR are to be selected.
(2) Qualitative Effects: The improvement in access to basic infrastructure andadministrative services
5.

External Factors and Risk Control
Delays in civil engineering construction due to natural disasters such as floods, etc

6. Evaluation Results and Lessons Learned from Past Projects(1) Evaluation results of similar projects
Ex-post evaluation of “Greater Faridpur Rural Infrastructure Development Project”
in Bangladesh suggests a lesson that, due to financial limitations for maintenancemanagement, it is desirable to implement efficient road maintenance management
through the clarification of priorities based on traffic volume and road conditions.
(2) Lessons for the Project
Since the Project also embraces financial limitations for the maintenancemanagement, taken into account the aforementioned lesson, it is to establish themaintenance management with assistance from consultants through the prioritization
based on traffic volumes and road conditions.

7.

Plan for Future Evaluation(1) Indicators to be Used
1) Rural road: Annual average traffic volumes per day (vehicle/day), average hours
required, average transportation costs (TK/time)2) Rural markets: Number of shops and number of sellers (shop/person), amount offresh foods disposed (kg/day)
3) Local city roads related facilities: Annual average traffic volumes per day(vehicle/day), average transportation costs (TK/time)4) Local city market/meat processing plants: Number of shops and number ofsellers (shop/person), amount of fresh foods disposed (kg/day)
5) Water supply/sanitary related facilities: Population accessible to water
6) Bus terminal: Number of users (person/day)
7) Drainage channel use: Days for road inundation (day/year)
8) Water treatment sites: Amount of wastes accumulated (day/ton)(2) Timing of Next Evaluation: 2 years after the completion of the ProjectEND