Ex-ante Evaluation (for Japanese ODA Loan)
1.
Name of the ProjectCountry:
The People’s Republic of Bangladesh
Project:
Khulna Water Supply Project
Loan Agreement: May 18, 2011
Loan Amount:
15,729 million 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 Water Supply Sector in Bangladesh
In Bangladesh, the safe and stable supply of water has not been fully achieved. Access to safe
water for the people of Bangladesh showed great improvement in the 1990s, however, the rateof achievement as of 2005 remains at approximately 70% as the effects of arsenic
contamination became obvious. Bangladesh relies for 90% of its drinking water ongroundwater, but the Government of Bangladesh has established a policy of promoting theimprovement of water supply through the development of surface water due to the serious
arsenic contamination of groundwater and lowered groundwater levels in large cities, inparticular in Dhaka. Therefore, the full-scale development of water supply systems using
surface water is becoming an issue to be resolved. The percentage of population covered by
the piped water supply system as of 2005 remains at 39% even in urban areas (major cities
and medium-sized cities).
(2) Development Policies for the Water Supply Sector in Bangladesh and the Priority of theProject
Safe water and sanitation are raised as one of the primary issues in the Poverty Reduction
Strategy Paper (PRSP), which is positioned as the top priority for the national development
strategy and the National Strategy for Accelerated Poverty Reduction II, which was recentlyrevised. With the achievement of the UN Millennium Development Goals in mind, theGovernment of Bangladesh has set a goal whereby all of the people in the nation can haveaccess to safe water by 2011. In the National Water Resource Management Plan (2004) andthe Sector Development Program (2005), etc., it is planned to promote the improvement ofaccess through improvements in water supply systems corresponding to the increase in thepopulation in urban areas and the securing of alternative water resources in areas where
access to safe water is difficult due to arsenic contamination, in rural areas in particular.
Especially in urban areas, the achievement of a coverage rate for piped water supply of 90%
by the year 2025 has been set for four major cities (Dhaka, Chittagong, Khulna and Rajshahi)
based on the need to secure sufficient water supplies to satisfy the demand that is expected tokeep growing in the future and to build systems to effectively provide water services.
(3) Japan and JICA’s Policy and Operations in the Water Supply Sector
In the light of Japan’s Country Assistance Program for Bangladesh (May 2006), JICA has
positioned the water supply sector in Bangladesh as one of the priority areas for the“environment” (including countermeasures against arsenic contamination) among thedevelopment issues pertaining to “social development and human security,” one of the priority
sectors for aid. JICA has been providing support for the improvement of the water supply inurban and rural areas with the priority placed on the improvement of the urban environmentand countermeasures against arsenic contamination. The following is a list of major aid
projects in the past within the water supply sector:
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••ODA Loan: Karnaphuli Water Supply ProjectTechnical cooperation: Project for Advancing NRW Reduction Initiative (PANI) ofChittagong WASA, Project for Strengthening Capacity for Water Quality Analysis andMonitoring System and Project for Sustainable Arsenic Mitigation, etc.

(4) Other Donors’ Activities
The World Bank has been providing support for water supply and sewage projects in Dhakaand Chittagong by positioning the improvement of access to safe water and sanitation as apriority issue pertaining to poverty reduction. The Asian Development Bank (ADB) has been
providing support for the improvement of water supply systems in Dhaka and theimprovement of water supply and sewage systems in local medium-sized cities by positioning
the improvement of water supply and sanitation in urban areas and urban development aspriority issues for social development. In addition, the ADB is planning to provide support for
the Project through cofinancing with JICA.
(5) Necessity of the Project
The objective of the Project is to supply stable amounts of quality water to Khulna, a central
city in the southwestern region of Bangladesh, and by doing so, to improve the living
environment of the residents of the target areas. Although Khulna City is the third largest city
in Bangladesh following Dhaka and Chittagong, unlike these two cities, no large-scale
improvement of the water supply and sewage facilities has been carried out there. It is anurgent task to improve the water facilities to satisfy the demand for water in the city. The
Project is also in line with the objectives of priority support areas and sectors specified inJapan’s Country Assistance Program for Bangladesh, and, therefore, the necessity andrelevance of JICA’s support for this Project is high.
3.

Project Description(1) Project Objectives
The objectives of the Project are expand reliable access to portable water and to adapt toclimate change by expanding the capacity of water supply system, thereby contributing to theimprovement of living environment in Khulna City.
(2) Project Site/Target Area: Khulna District and Bagerhat District, Bangladesh(3) Project Components
1) Water intake facilities, water treatment plant and impounding reservoir
2) Clear water transmission and distribution networks
3) Consulting services (detailed design, bidding assistance, construction supervision,
strengthening of institutional capabilities, etc.)* JICA and ADB are planning to provide support for 1) and 2) above, respectively. As for3), JICA is planning to provide support for the portion related to 1) and ADB is planning
to provide support for the portion related to 2) and the strengthening of institutional
capabilities.
(4) Estimated Project Cost (Loan Amount)
31,082 million yen (the amount of the yen loan is: 15,729 million yen)(5) Schedule
It is scheduled to be carried out between May 2011 and June 2016 (62 months in total). The2

Project will be completed when the facilities begin operating (June 2016).
(6) Project Implementation Structure1) Borrower: The Government of the People’s Republic of Bangladesh
2) Executing Agency: Khulna Water Supply and Sewerage Authority
3) Operation / Maintenance: Khulna Water Supply and Sewerage Authority(7) Environmental and Social Consideration / Poverty Reduction / Social Development
1) Environmental and Social Consideration:a) Categorization: Bb) Reasons for the Categorization: This project is not considered to have any significant
negative impact on the environment, given the characteristics of the project and thecharacteristics of the project area, under the “Japan Bank for International
Cooperation Guidelines for the Confirmation of Environmental and Social
Considerations” (established in April 2002).
c) Environmental Permit: The Initial Environmental Examination (IEE) reportconcerning the Project was approved by the Department of Environment (DOE),
Ministry of Environment and Forestry in October 2010. The EIA report concerning
the Project was approved in February 2011.
d) Anti-Pollution Measures: Impacts from noise, vibration, fine dust and exhaust gases,etc., are expected during construction. After starting operations, negative impacts
from ground subsidence are not projected since the water will be taken from rivers.
As for the impact of exhaust gases, fine dust, noise and vibration, etc., during theconstruction, no significant impact is expected since a range of measures will be put
in place, including watering, covering the construction equipment and materials withan anti-scattering cover, and the appropriate management of delivery vehicles andheavy construction machinery.
e) Natural Environment: Since the Project area does not fall under the category of asusceptible area, such as a national park, the negative impact on the naturalenvironment is estimated to be minimal.
f) Social Environment: This project involves land acquisition (29.58 ha of which 25.15
ha are private land), which will be implemented in accordance with the procedures
stipulated in the domestic laws of Bangladesh, and it is confirmed that the residents
affected by the Project will be compensated by the replacement cost. The number ofthe residents affected by the Project due to land acquisition will be 125 and no local
residents are to be resettled. It is confirmed that the residents affected by the Projectwill be compensated by the replacement cost, and a Grievance Redress Committee
will be set up to handle grievances from the residents, if any.
g) Others / Monitoring: In the Project, the executing agency will monitor the air quality,noise, vibration, water quality, ecological systems of fish, land acquisition, etc.,
during the construction (quarterly).
2) Promotion of Poverty Reduction: In low income communities where the connection toeach household is difficult, a communal tap is planned to be installed, which is expected
to contribute to the improvement of access to safe water for the poor.
3) Promotion of Social Development: The Project is planned to be implemented by giving
consideration to gender, such as the securing of equal opportunities for participation inwater user groups and training, etc.
(8) Collaboration with Other Donors: The Project is expected to be implemented under aparallel financing arrangement in cooperation with the ADB.
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(9) Other Important Issues: The construction of impounding reservoir will contribute toadaptation to climate change by serving as facility that responds to the growing impact ofsalinity intrusion caused by the elevation of the sea level in the future.
4.

Targeted Outcomes(1) Quantitative effects
1) Performance Indicators (Operation and Effect Indicators)
Target (2018)[Expected level 2 years
after project completion]
Population served (thousand persons)*
237706
3
Amount of the water supply (m /day)*
30,100165,437
Rate of facility utilization (%)
NA51
Unaccounted for water rate (%)*
35.9
20.0
Percentage of population served (%)*
22.6
62.3
*Water supply through piped water supply system of KWASA2) Internal Rate of Return
Based on the conditions indicated below, the Economic Internal Rate of Return (EIRR)of the Project is 14.9%.
[EIRR]
Cost: Project costs (excluding taxes), operation and maintenance costs
Benefits: Water supply to new users and a reduction in water purchasing costs, etc.
Project Life: 30 years
Baseline(2010)

Indicator(2) Qualitative Effects
The improvement of the living environment of the residents of the target areas and adaptation
to climate change
5.
External Factors and Risk Control
Delay in the civil engineering works caused by flooding and other natural disasters,
maintenance of the optimum level of water tariff required for securing the financial strengthof the executing agency.
6.
Lessons Learned from Past ProjectEx-post evaluations of similar projects in the past have noted that it is important for the wholeprocess, including the intake, treatment, transmission and distribution, to be carried out asplanned as a unified project to generate the target outcomes to be expected. The Project isplanned to be implemented, through cofinancing with the ADB, as a single project for theimprovement of the intake, treatment, transmission and distribution networks. The entire
progress will be confirmed by the executing agency, ADB and JICA through periodical
monitoring meetings, etc. In addition, it is noted that the improvement and strengthening of
the management of the water supply entity is important in order to ensure the sustainability ofthe project. In the Project, the ADB plans to provide support for strengthening institutional
capabilities and improving the management of the executing agency. JICA will also follow theprogress as needed.

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7.

Plan for Future Evaluation(1) Indicators to be used
1) Population served (in units of one thousand people), the amount of water supply(m3/day), rate of facility utilization (%), unaccounted for water rate (%) and percentageof population served (%)2) EIRR (%)(2) Timing: 2 years after project completion5