Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
South Asia Division, South Asia Department 4
Japan International Cooperation Agency
1. Name of the ProjectCountry：The People’s Republic of Bangladesh
Project：Dhaka Mass Rapid Transit Development Project (V)Loan Agreement：March 29, 2022
2. Background and Necessity of the Project(1) Current State and Issues of the Urban Development Sector and the Priority of theProject in Bangladesh
The population of Dhaka increased from 6.62 million to 19.8 million (estimated value)
between 1990 and 2018 (United Nations Population Division, 2018). This population
increase and economic growth have caused a rapid increase in transportation
demand, which in turn has led to chronic traffic congestion and air pollution. As aresult, the average vehicle travel speed in Dhaka was 6.4 km/h, which is less than halfthat of central Tokyo (14.7 km/h) (Ministry of Land, Infrastructure, Transport andTourism, 2015). Economic loss due to traffic congestion are estimated to be billions ofdollars per year (World Bank 2018). In terms of air pollution, the annual average PM10
concentration is 146 μg/m3, which is much higher than the environmental standard
set by the World Health Organization (hereinafter referred to as “WHO”) (20μg/m3 70μg/m3). WHO points out that emissions from vehicles are responsible for roughly
40% of air pollution in Dhaka, and is concerned that emissions from such traffic
congestion could harm the health of residents in the Dhaka metropolitan area. These
factors have worsened the country’s economic activities and urban environment,
creating a major bottleneck for economic and social development.
The Eighth Five Year Plan (FY2021-FY2025) sets a major goal of comprehensive
economic growth, which benefits all people including the poor. In addition, it aims atreducing the traffic congestion and improving the environment, improving transport
and traffic infrastructure so as to meet existing and potential demands, anddeveloping an integrated and balanced system in which all modes can perform
efficiently and each mode can fulfil its appropriate role in the system, in the“Transportation and Communication” sector.
In regard to these goals, the Government of Bangladesh has established theRevised Strategic Transport Plan (hereinafter referred to as “RSTP”) with theassistance of JICA in August 2016, which aims to develop five mass rapid transit(hereinafter referred to as “MRT”) routes and two bus rapid transit (hereinafterreferred to as “BRT”) routes.
The Dhaka Mass Rapid Transit Development Project (hereinafter referred to as “theProject”) will alleviate traffic congestion in Dhaka city by constructing the MRT Line 6

connecting the northern and central parts of the capital city of Dhaka. MRT Line 6 will
also be connected with MRT Line 1 and Line 5 Northern Route, which are alsofinanced by Japanese ODA loan. The Project is positioned as the highest prioritizedroute in RSTP.
(2) Japan and JICA’s Policy and Operations in the Urban Development Sector
Country Development Cooperation Policy for the People's Republic of Bangladesh(February 2018) has set forth the priority area of “accelerating economic growth forthe benefit of all citizens toward a middle-income country,” trying to contribute to theimprovement of regional connectivity by promoting the efficient move of people andgoods through the development of high quality transportation and traffic infrastructurein accordance with international standards, while paying attention to the diversificationof transportation systems. In addition, the JICA Country Analysis Paper for
Bangladesh (March 2019) identifies urban development including urban transport as aprioritized issue. The Project is consistent with this analysis and policy. Additionally,since it will help alleviate traffic congestion in the Dhaka metropolitan area, andreduce the negative environmental impact of air pollution, the Project will also
contribute to the achievement of SDGs Goal 9 (Industry, Innovation andInfrastructure), 11 (Sustainable Cities and Communities), and 13 (Climate Action).
In addition to the JICA’s recent major assistance activities in the urban development
sector specified in 3. (7) 1), JICA implemented the technical cooperation, “Project on
the Revision and Updating of the Strategic Transport Plan for Dhaka (FY 2014-2016),to establish RSTP.
(3) Other Donors’ Activity
The World Bank (hereinafter referred to as “WB”) assisted the preparation of theStrategic Transport Plan. WB also implemented the Clean Air and Sustainable
Environment Project, which supports detailed design of the BRT Route 3 southsection (between Airport Station and Jhilmil), from 2009 to 2016. The AsianDevelopment Bank (hereinafter referred to as “ADB”) has been implementing theGreater Dhaka Sustainable Urban Transport Corridor Project to develop the BRT
Route 3 north section (between Gazipur and Airport Station) since 2010. ADB also
provides assistance for the MRT Line 5 Southern Route (between Gabtoli andAftabnagar stations).
3. Project Description(1) Project Objective
The objectives of the Project are to alleviate traffic congestion and mitigate air
pollution in Dhaka City by constructing the MRT Line 6, thereby contributing toeconomic development and improvement of urban environment.
(2) Project Site/Target Area
Dhaka North City, Dhaka South City (population in Dhaka district: 12 million

(Bangladesh national census 2011))(3) Project Components
1) Construction of a depot (land development, construction of depot buildings,railway sidings, etc.)
2) Construction of railway structures (total length of 21 km including the extension
from Motijheel to Kamalapur; construction of elevated railways, stations, tracks,etc.)
3) Installation of electric and signal systems
4) Procurement of rolling stock (144 cars: 6 cars × 24 sets)5) Enterprise Resource Planning System
6) General consulting services (feasibility study review, detailed design, tenderassistance, construction supervision, training for operation and maintenance, etc.)
7) Consulting services for involuntary resettlement support
8) Consulting services for institutional development support(4) Estimated Project Cost
435,204 million Yen（Japanese ODA Loan: 18,285 million Yen）
(5) ScheduleFebruary 2013 ～ August 2027 (175 months in total). The project will be completed
upon the opening of all sections (December 2025).
(6) Project Implementation Structure1) Borrower: The Government of the People's Republic of Bangladesh
2) Guarantor: N/A
3) Executing Agency: Dhaka Mass Transit Company Limited (hereinafter referredto as “DMTCL”)
4) Operation and Maintenance System: DMTCL(7) Collaboration and Sharing of Roles with Other Donors
1) Japan’s Activity: MRT Line 1 and 5 Northern Route, to be constructed withJICA’s loan assistance under “Dhaka Mass Rapid Transit Development Project(Line 1)” and “Dhaka Mass Rapid Transit Development Project (Line 5 NorthernRoute)” respectively, will be connected with MRT Line-6 being constructedunder the Project. In addition, based on the outcomes of the technicalcooperation, “Project for Establishment of Clearing House for Integrating
Transport Ticketing System in Dhaka City Area (Phase 1),” the technicalcooperation, “Project for Establishment of Clearing House for Integrating
Transport Ticketing System in Dhaka City Area (Phase 2)” aims to establish aframework for making smart cards more widespread as well as to fully
introduce and institutionalize the smart card payment system. Furthermore, thetechnical cooperation, “Technical Assistance for Mass Rapid Transit Safety
Management System of Line 6”, supports for capacity development to establish
and implement DMTCL’s operational safety management system. Additionally,

the technical cooperation, “Project for Development of Policy and Guidelines forTransit Oriented Development along Mass Transit Corridors”, supports forplanning of strategic urban development around MRT stations for officials ofRajdhani Unnayan Kartipakkha (RAJUK: public agency responsible for urban
planning in Dhaka).
2) Other Donors’ Activity: N/A(8) Environmental and Social Consideration/Cross-Sectoral Issues/Gender Category
1) Environmental and Social Consideration① Category: A② Reason for Categorization: The project falls into the railway sector, and is likely
to have significant adverse impact due to its characteristic under the JICA
guidelines for environmental and social considerations (April 2010).
③ Environmental Permit: The Environmental Impact Assessment (hereinafterreferred to as “EIA”) report for the Project between Uttra North and Motijheel
was prepared by the Dhaka Transport Coordination Authority and approved bythe Department of Environment in July 2011. In addition, EIA report for theProject between Motijheel and Kamalapur was prepared by DMTCL andapproved by the Department of Environment in July 2021. In Bangladesh, theEnvironmental Clearance Certificate must be renewed annually, and thecertificate for the Project was renewed in July 2021.
④ Anti-Pollution Measures: Water is sprinkled periodically to suppress the dust
which is expected to be generated during the construction work. Sound
absorbers and soundproof walls is installed to reduce noise and vibration during
construction work. Surplus soil and waste generated by the construction arecollected, sorted and disposed appropriately based on the Bangladesh national act
and guideline by the contractors. Additionally, wastewater, which is discharged fromthe station and the depot when the facilities are in service, will be appropriately
treated at wastewater treatment facilities.
⑤ Natural Environment: The target area for the Project is not in a vulnerable areasuch as a national park, nor in the surrounding area of such; therefore, any
adverse impact on the natural environment is expected to be minimal.
⑥ Social Environment: 57.3 ha of land has been acquired and the number ofaffected persons is 1,499 around stations between Uttra North to Motijheel anddepot area (No involuntary resettlement is occurred in the area), and noparticular problem is occurred in compensation payment. In the extension areafrom Motijheel to Kamalapur, additional land acquisition will be 2.4ha andadditional project affected households will be 734 (including 204 households to
be involuntary resettled). Based on the resettlement action plan prepared inline with the relevant act in Bangladesh and JICA guidelines, compensation
payments to the affected persons have been implemented. In consultation with

local residents, information on the Project including a project description,planned routes, measures to mitigate the potential impact on the natural andsocial environment, an overview of the RAP proposal, and compensation
details was explained by DMTCL, and no particular objections were raised.
⑦ Other/Monitoring: During the construction period, the contractors supervised by
DMTCL have monitored the changing conditions of air quality, noise/vibration,water quality, and progress of land acquisition and resettlement, etc. Environmental
monitoring will be conducted by DMTCL once the facilities are placed in service.
Additionally, an external monitoring agency hired by the general consultant hasmonitored issues relating social considerations.
2) Cross-Cutting Issues: The Project is intended to reduce air pollution and mitigate
climate change through the promotion of public transportation, thereby contributing toreduce Green House Gas (hereinafter referred to as “GHG”) emissions. The
Project’s mitigation effect on climate change (estimated GHG emissions) is
expected to be approximately 0.18 million tons of CO2/year (estimate for 2025).
Based on the Bangladesh National Building Code and Barrier-free Maintenance
Guideline about facilities and vehicles of public transportation in Japan,
barrier-free facilities such as guiding blocks for persons with disabilities andslopes for wheelchairs are provided. Measures against COVID-19 infection areimplemented such as taking PCR test before entering the construction site,
preparing isolation buildings, assigning doctors, and reserving hospital beds forcontractors and consultants. Considering the impact of COVID-19, the cost,construction period, etc. have been revised with reference to Bangladesh
national laws and guidance.
3) Gender Category: [Gender Project] GI (S) (Gender Activities Integration Project)
Activity components/reason for classification: Gender action plans including theoperation of women-only cars at peak times, the installation of surveillancecameras in stations and cars, as well as the promotion of hiring women forconstruction sites and at managing entities will be implemented to promote
gender understanding and woman safety. Consequently, this is categorized as a
Gender Integrated Project.
(9) Other Important Issues
The Project incorporates advanced Japanese technologies such ascountermeasures for soft soil, rolling stocks, signaling systems, and automatic farecollection systems.
4. Targeted Outcomes(1) Quantitative Effects
Performance Indicators (Operation and Effect Indicator)

Indicator

Target (2027)
Baseline【Expected value 2 years（Actual Value in 2009）
after project completion】

1) Passen From Uttra North―
1,874gerto Agargaon
Kilomet From Agargaon―
1,524
erto Motijheel(1,000From Motijheel topeople/k Kamalapur―
78m/day)2) Train Kilometer (km/day)―
6,955
3) Average Travel Time (min)110*384) Operating rate of train (%)―
80
Note: The travel times indicated above are for the section between Uttara North
Station and Motijheel Station by bus.
As a reference value, air pollutant density (density of NO2 and total suspended
particulates [PM2.5/PM10] along the railway line) will be monitored.
(2) Qualitative Effects
Facilitation of transportation and physical distribution in the Dhaka Metropolitan Area,
development of Bangladesh’s economy through the reduction of economic losses byreducing traffic congestion, mitigation of climate change through the reduction of GHG
emissions by promoting a modal shift to public transportation and alleviation of air pollution.
(3) Internal Rate of Return
According to the following preconditions, the Project’s Economic Internal Rate of
Return (hereinafter referred to as “EIRR”) will be 16.8%. The Financial Internal Rate of
Return (hereinafter referred to as “FIRR”) will be 1.8%.
【EIRR】
Cost: Project costs and operation/maintenance costs (excluding tax)
Benefit: Reduction in vehicle operation costs, travel time, GHG emissions etc.
Project Life: 43 years【FIRR】
Cost: Project costs and operation/maintenance costs
Benefit: Fare revenues and non-rail revenue
Project Life: 43 years
5. External Factors and Risk Control(1) Preconditions: N/A(2) External Factors: N/A
6. Lessons Learned from Past Projects

The results of the ex-post evaluation of the Philippines’ Metro Manila Strategic
Mass Rail Transit Development Project (evaluated in 2008) revealed that it is difficult
to operate an urban transport business using fare revenues only. Providing equity
contribution and subsidies by the government are needed because of large initialinvestment. In addition, a detailed financial plan and an action plan for government
support should be developed in the project planning phase in order to ensure thefinancial health of the executing agency.
In addition, the results of the ex-post evaluation of India’s past urban railway
projects, including the Delhi Mass Rapid Transport System Project (I)-(VI) (evaluatedin 2010), indicated that it is necessary to ensure fulfilling the preconditions forprofitability, otherwise it is necessary to push for the satisfaction of thesepreconditions.
As the Project requires a large initial investment and, therefore, its financial
soundness needs to be secured, fare will be set appropriately based on the lessons
described above, and the Government of Bangladesh provides financial assistance toreduce DMTCL’s financial burden. Additionally, DMTCL’s financial plans have alreadybeen developed as part of the consulting services for institutional development.
Furthermore, in order to secure non-rail revenues in addition to fare revenues, thegeneral consultant will support to develop and implement the business plans forearning revenues from retail tenants in stations, advertising and public
transportation-oriented development (type of urban development which promotes thedevelopment of public transport hubs surrounded by a high-density and compact
urban area without depending on automobiles), etc.
7. Evaluation Results
The Project is consistent with the development issues and development policies ofBangladesh, as well as the assistance policies and analyses of the Government ofJapan and JICA. Through the development of MRT, the Project will help to alleviatetraffic congestion in Dhaka City and help to reduce the air pollution, thereby
contributing to the achievement of SDGs Goal 9 (Industry, Innovation andInfrastructure), 11 (Sustainable Cities and Communities), and 13 (Climate Action).
Therefore, 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. (1) to (3).
(2) Future Evaluation Schedule
Ex-post evaluation: Two years after the project completion
END