Japanese ODA Loan

Ex-Ante Evaluation
1. Name of the ProjectCountry: People’s Republic of Bangladesh
Project: Upazila Governance and Development Project
Loan Agreement: December 13, 2015
Loan Amount: 14,725 million YenBorrower: The Government of the People’s Republic of Bangladesh
2. Background and Necessity of the Project(1) Current State and Issues of the Rural Development Sector in Bangladesh
In Bangladesh, despite the rapid economic development in recent years, 32% of thepopulation, or approximately 47 million people live below the poverty line (2010). Theproblem was worse in rural areas, where 71% of the population, or approximately 105 million
people resided, as these areas had a poverty rate of 35%, which was more than 10% higher
than that of the urban areas. In order to facilitate development in rural areas with a higher
poverty rate, it is urgent to strengthen the capacity of local government institutions to promote
development projects and deliver public services that can meet the needs of residents.
The local government system in Bangladesh consists of four tiers in the following orderfrom top to bottom: division, district, upazila, and union. Upazila parishads, which areapproximately 500 in number nationwide, are expected to coordinate and incorporate theopinions of union parishads (closest local government institutions to residents); coordinate thelocal offices of ministries to provide public services, such as education, public health, andagricultural extension services; deliver other public services to meet the needs of residents;
and carry out development projects. However, they have difficulties in providing these
services to all residents because of the lack of financial resources for development, the lack of
capacity of service providers and local government officials, and the dysfunction of themechanism to understand and coordinate the needs of residents. Moreover, the poor
collaboration between upazila parishads and union parishads or local offices of ministries /departments, as well as the inefficient use of limited public resources, has slowed down thedevelopment of basic infrastructure, such as rural roads, educational and health facilities, andthe improvement of access to public services.
(2) Development Policies for the Rural Development Sector in Bangladesh and the Priorityof the Project
As the most important national development strategy, the Sixth Five Year Plan (fromFY2011-2012 to FY2015-2016) aims to improve public services and promote decentralization
as well as emphasizes the importance of strengthening the institutional and financial capacityof local government institutions including upazila parishads. The National Rural Development
Policy 2001 also emphasizes the importance of the role of upazila parishads in coordinatingthe local offices of ministries to provide public services to residents and promoting theparticipation of residents in the development processes undertaken by local government
institutions. The Upazila Governance and Development Project (hereinafter referred to as“this Project”) is in line with these policies and objectives since it is designed to develop
infrastructure and enhance the administrative capacity of local governments to meet the needsof residents.
(3) Japan and JICA’s Policy and Operations in the Rural Development Sector
The JICA Country Analysis Paper for Bangladesh (issued in April 2013) sets “overcomingsocial vulnerability” as a priority area and indicates that it is important to support thedevelopment of administrative capacity of local government institutions so that they canenhance their efficiency and improve their project performance. It is also stated that JICA will
focus its support on the dissemination and deployment of the public-civic collaboration
system developed through the past projects so as to improve the quality of public services andpromote the participation of citizens in governance processes. The Participatory Rural
Development Project Phase 2 (a technical cooperation project completed in 2010) utilized“Link Model”, a collaboration system between residents and local government institutions, tocreate a framework to reflect the opinions of villagers in development projects. This hasenhanced the capacity of local government institutions, improving the efficiency andeffectiveness of public services and strengthening the transparency of infrastructuredevelopment projects. The high efficiency and effectiveness of public services in the areas
where Link Model had been introduced was proven quantitatively in a comparative study ofvaccination programs conducted by the Department of Livestock Services in areas with andwithout the model. According to the study results, the vaccination coverage wasapproximately 20% higher in the area with Link Model than in the area without Link Model,
and the average time required for immunization was approximately 30% shorter in the former
area than in the latter area. Moreover, a resident survey regarding infrastructure development
projects conducted by local government institutions implied that the ownership of residents
and the recognition of the projects were approximately 15% and 12% higher, respectively, inthe area with Link Model than in the area without Link Model. Furthermore, Link Model was
highly recognized by the Ministry of Local Government, Rural Development andCooperatives, and the system was partially adopted as Union Development Coordination
Committee Meeting (UDCCM). This Project is designed to train local government officials on
how to use UDCCM effectively in order to enhance the capacity of upazila parishads tocoordinate the needs of residents.
The Country Assistance Program for Bangladesh (June 2012) also indicates that Japan willassist Bangladesh in strengthening governmental functions and improving public services inorder to improve governance. Thus, this Project is consistent with the policy and analysis of
the Japanese Government and JICA. Recent major cooperation projects are listed below.
- Loan assistance: South-Western Bangladesh Rural Development Project (2009) andNorthern Bangladesh Integrated Development Project (2012)- Technical cooperation: Participatory Rural Development Project (2000), Participatory
Rural Development Project Phase 2 (2005), Rural Development Adviser (2010), andAdvisor for Local Governance (2012)(4) Other Donor’s Activity
The United Nations Development Programme (UNDP) is implementing the Upazila
Governance Project to assist 14 upazila parishads in enhancing their financial andadministrative capacity and establishing legal systems. The UNDP is also carrying out theUnion Parishad Governance Project. Meanwhile, the World Bank launched the Local
Governance Support Project (LGSP) in 2006 to support the development of the financial andadministrative capacity of union parishads. The LGSP is now in its second phase (2011 2016).
(5) Necessity of the Project
Aiming to improve the delivery of public services and enhance the administrative capacityof local government institutions, this Project is in line with the development policies of theGovernment of Bangladesh, the assistance policies of the Government of Japan and JICA, andthe above-mentioned development issues; therefore, it is highly necessary and relevant toimplement this Project.
3. Project Description(1) Project Objective
The objective of the Project is to enhance the capacity of Upazila Parishad to deliver
effective public services to citizens by supporting development works (rural roads, watersupply, medical facilities, etc.) which better reflects demands of citizens and by providing
capacity development trainings to public servants, thereby contributing to improving the livesof residents and reinforcing local government structure of Bangladesh.
(2) Project Site/Target Area
Throughout Bangladesh (64 districts, 489 upazilas)(3) Project Components
1) Development and repair of basic infrastructure (e.g., rural roads, water supply andsewerage facilities, health facilities, and educational facilities)2) Support for improvement in governance and implementing systems (e.g., training forcapacity development of local government officials (district, upazila, and union parishad
officials), external auditing, and a baseline surveys)
3) Consulting services (e.g., support for project management, support for development ofbasic infrastructure, monitoring, evaluation)

* Regarding the component 1), target upazilas will be selected according to the evaluation
and ranking of their financial and administrative capacity based on the performanceindicators specified by the Upazila Parishad Act to assess the delivery of essentialservices. The Project will cover the top 100 upazilas in the first year and expand target
upazilas by 100 every year from the second year onwards.
(4) Estimated Project Cost (Loan Amount)
17,217 million Yen (Loan Amount: 14,725 million Yen)
(5) ScheduleThis Project is planned to run from December 2015 to February 2023 (87 months in total).
Project completion is defined as when all the facilities start to operate (in February 2022).
(6) Project Implementation Structure1) Borrower: The Government of the People’s Republic of Bangladesh
2) Guarantor: N/A
3) Executing Agency: Local Government Division, Ministry of Local Government, RuralDevelopment and Cooperatives (LGD)4) Operation and Maintenance System: LGD has extensive experience in ODA loan
projects and has established a national system for operation and maintenance; therefore,
it does not seem to have any problem. This Project will provide consulting services tolocal authorities involved in this Project to support their proper operation andmaintenance including budget planning.
(7) Environmental and Social Consideration/Poverty Reduction/Social Development
1) Environmental and Social Consideration① Category: FI② Reason for Categorization:
This Project is classified as Category FI, according to the JICA Guidelines forEnvironmental and Social Considerations (April 2010), because its sub-projects
cannot be specified prior to JICA’s approval of funding and because those sub-projects
are expected to have a potential impact on the environment.
③ Others/Monitoring:
In this Project, the executing agency is to classify each sub-project according to thelaws and regulations of Bangladesh and the JICA Guidelines for Environmental andSocial Considerations (April 2010) and take necessary measures depending on thecategory while receiving support from consultants hired through this Project. None ofthe sub-projects will fall under the Category A.
2) Promotion of Poverty Reduction
This Project is expected to offer direct benefits such as the creation of job

opportunities during the construction works and an increase in the economic
opportunities after the development of basic infrastructure. This Project is also expected
to improve the access to social services, contributing to poverty reduction.
3) Promotion of Social Development
This Project is planned to use the participation of women in decision-making process
as a governance performance indicator in order to promote the involvement of women.
The Project is also to use the frequency of UDCCs, development coordination meetings
with the participation of residents, as an indicator in order to encourage residents toparticipate in the implementation and evaluation of this Project.
(8) Collaboration with Other Donors
This Project will be coordinated by LGD, particularly in terms of the implementation
approach, performance indicators, and external auditing systems, with other initiatives taken
by development partners supporting the enhancement of local government institutions, suchas the World Bank and the United Nations Development Programme. Moreover, this Projectwill coordinate with the LGSP and others to strengthen the functions of Director, Local
Government (DLG) and Deputy Director, Local Government (DDLG) assigned across thecountry.
(9) Other Important issues
JICA is planning to conduct a technical cooperation project to assist LGD in improving thelegal framework for upazila parishads.
4. Targeted Outcomes(1) Quantitative Effects
1) Performance Indicators (Operation and Effect Indicator)
Since this Project consists of sub-projects to develop small-scale infrastructure to beselected by upazila parishads across the country, it is difficult to set individual numericaltargets. Therefore, this Project is to be evaluated by the increase or decrease in theindicators listed below from the baseline values to be determined from the data collected
on a sample basis.
Target (in 2024)
TypeIndicator

Baseline(in 2016)[Expected value
two years afterprojectcompletion]

Length of the roads constructed andRural road facilities‐

Increase‐

Increaserehabilitated (km)Length of the bridges constructed andrehabilitated (m)Annual average traffic per day (vehicles‐

Increase‐

Decrease‐

Increase‐

Decrease

per day)
Number of days during which roads are
impassable due to flooding (days per year)
Number of people who gained access to
Water supply andsafe water (persons)sanitation facilities

Number of patients with water-relateddisease (persons per year)

Agricultural

Planted area of major crops (ha)‐Increaseproduction facilities

Amount of fish caught (tons per year)‐

Increase

Number of outpatients (persons per year)‐

Increase

Number of beds (beds)‐

Increase

Number of students with access to‐

Increase‐

Increase‐

Increase‐

Decrease‐

Increase‐

Increase‐

Increase

Health facilities

Educational facilities

classroom facilities
Enrollment rates in primary andsecondary education

Disastermanagement
facilities
Capacity
development,training, and public
relations activities

Number of people who can beaccommodated in shelters (persons)
Number of people affected by floods(persons per flood event)
Number of upazila parishad officials who
received training (persons per year)
Number of residents who participated intraining and public relations activities(persons per year)

Improvement ofDegree of public recognition of the role ofpublic service

upazila parishads

delivery andPublic satisfaction with public services‐

Increase

Number of training opportunities for‐

Increaseadministrative
capacity
Promotion ofparticipation ofwomen

women and meetings in which a certain
amount of women participated (frequency
per year)(2) Qualitative Effects
Improvement in the quality of life of residents, improvement of administrative capacity,and enhancement of local governance(3) Internal Rate of Return

The Economic Internal Rate of Return (EIRR) and the Financial Internal Rate of Return(FIRR) were not calculated because sub-projects could not be identified prior to the start ofthis Project. However, traffic infrastructure facilities in some target upazilas will be selected
as samples in the implementation stage to tentatively estimate the EIRR after the terminationof this Project.
5. External Factors and Risk Control(1) Preconditions: None in particular.
(2) External Factors: None in particular.
6. Evaluation Results and Lessons Learned from Past Projects(1) Results of Evaluation of Similar Past Projects
The results of the ex-post evaluation of Rural Areas Infrastructure Development Project(III) in Indonesia identified the following lessons: when the project consists of multiple
sub-projects in different locations, it is essential to establish a well-structured management
system and operate it in a proper manner. In particular, it is extremely important to divide theresponsibilities in the hierarchical structure from local to central levels and ensure vertical andhorizontal coordination between relevant organizations.
(2) Lessons for the Project
The above-mentioned lessons are applicable to this Project because it also consists ofmultiple small sub-projects to be implemented in different places over a wide area. Therefore,
this Project is designed to provide consulting services and other necessary support to establish
a proper supervising/monitoring mechanism based on the existing local administrative
structure for the sub-projects, and create an implementation mechanism that can enable theexecuting agency to consolidate information.
7. Plan for Future Evaluation(1) Indicators to be Used
1) Length of the roads constructed and rehabilitated2) (km)3) Length of the bridges constructed and rehabilitated (m)4) Annual average traffic per day (vehicles per day)5) Number of days during which roads are impassable due to flooding (days per year)6) Number of people who gained access to safe water (persons)7) Number of patients with water-related disease (persons per year)
8) Planted area of major crops (ha)9) Amount of fish caught (tons per year)10) Number of outpatients (persons per year)11) Number of beds (beds)12) Number of students with access to classroom facilities13) Enrollment rates in primary and secondary education
14) Number of people who can be accommodated in shelters (persons)15) Number of people affected by floods (persons per flood event)16) Number of upazila parishad officials who received training (persons per year)17) Number of residents who participated in training and public relations activities(persons per year)18) Degree of public recognition of the role of upazila parishads
19) Public satisfaction with public services20) Number of training opportunities for women and meetings in which a certain amountof women participated (frequency per year)(2) Timing of Next Evaluation:
Two years after the completion of the Project (ex-post evaluation)