Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry: The People's Republic of Bangladesh
Project: Dhaka Mass Rapid Transit Development Project (II)Loan Agreement: June 29, 2016
Loan Amount: 75,571 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 Urban Development Sector in Bangladesh
The population of Dhaka, the capital of People's Republic of Bangladesh, has been growing
rapidly and has increased from 6.62 million in 1990 to 14.64 million in 2010 (UN Population
Division). This has led to drastic expansion of transportation demand and has caused
problems such as chronic traffic congestion and the air pollution. This is hampering local
socioeconomic activities with an estimated annual economic loss of 2,600 million US dollars(Dhaka Chamber of Commerce and Industry).
(2) Development Policies for the Urban Development Sector in Bangladesh and the Priorityof the Project
In order to solve these problems, the Government of Bangladesh has set forth introductionof an urban Mass Rapid Transit (hereinafter referred to as “MRT”) system in its national plans
The Sixth Five Year Plan (FY 2011/12 - 2015/16) and following The Seventh Five Year Plan(FY 2015/16 - 2019/20). Also, Strategic Transport Plan for Dhaka (hereinafter referred to as“STP”), an urban transportation masterplan approved by the Government of Bangladesh in2005, proposed the development of three MRT lines and three additional lines for Bus RapidTransit (hereinafter referred to as “BRT”). Priority of the MRT and the BRT lines wasassessed and analyzed in Dhaka Urban Transport Network Development Study (2009 - 2011)
from the perspectives of transportation demand, project costs and the environmental andsocial consideration and MRT Line 6 was selected as the priority line. Dhaka Mass Rapid
Transit Development Project (hereinafter referred to as “the Project”) will construct MRTLine 6 that extends for approximately 20 km to connect northern Dhaka and the city center tocontribute to the alleviation of the traffic congestion and the air pollution in the Dhaka
Metropolitan Area.
(3) Japan and JICA’s Policy and Operations in the Urban Development Sector
Country Assistance Policy for Bangladesh (June 2012) positions “Acceleration of economic
growth from which all the citizens can benefit” as a priority subject and states that Japan willtake measures for development of the transportation and traffic infrastructure for facilitationof efficient travel of people and goods while considering diversification of transportation
mode. In addition, the JICA Country Analysis Paper for Bangladesh (April 2013) identifies
urban development as one of the priority issues. Thus, the Project is consistent with thosepolicies and analyses by the Government of Japan and JICA.
In addition to the aforementioned preparatory survey, JICA implemented Institutional
Building Assistance for Dhaka Urban Transport Network Development (FY 2010),
Institutional Building Assistance for Dhaka Urban Transport Network Development (II) (FY2011) by dispatched ODA loan experts and Preparation of Rules and Regulations under Urban
Mass Rapid Transit Act (Dhaka, Bangladesh) (Technical Assistance Related to ODA Loan)(FY 2013 - 2015) to assist establishment of urban transportation-related laws.
(4) Other Donors’ Activity
The World Bank supported formulation of the aforementioned STP and has been supporting
Clean Air and Sustainable Environment Project that includes detailed design of BRT Line 3(The airport‐Jhilmil) since 2009.
The Asian Development Bank has been supporting Greater Dhaka Sustainable Urban
Transport Corridor Project that aims at construction of BRT Line 3 (Gazipur‐The airport)
by co-financing with French Development Agency and Global Environment Facility since
2010.
(5) Necessity of the Project
The Project is consistent with the development subject and development policy of theGovernment of Bangladesh, and with the aid policy and analyses of the Government ofJapan and JICA. In addition, the MRT development may provide ample opportunities toutilize advanced technologies that Japan holds. As such, necessity for JICA to assist theProject is high.
3. Project Description(1) Project Objective
The objective of the Project is to meet the increasing transportation demand in the Dhaka
by constructing urban mass rapid transit system in Dhaka City, and thereby contribute toeconomic development of the entire Bangladesh through alleviating traffic congestion. It also
aims at reduction of the air pollution in the Dhaka by promoting a modal shift from individualvehicle transportation to the public transportation.
(2) Project Site/ Target Area
Dhaka
(3) Project Components
1） Construction of railway structures (total length of approx. 20 km, construction ofelevated railways, stations, tracks, etc.) (International competitive bidding)2） Construction of a depot (land development, construction of depot buildings, railway
sidings, etc.) (International competitive bidding)3） Procurement of rolling stocks (International competitive bidding)4） Installation of electric and signal systems (International competitive bidding)5） General consulting service (detailed design, tender assistance, construction
supervision, training on operation and maintenance, etc.) (Short List)

6） Consulting service for supporting resettlement of households (Short List)
7） Consulting service for supporting institutional development (Short List)(4) Estimated Project Cost (Loan Amount)
279,902 million Yen (Loan Amount 187,707 million Yen/ Loan Amount in this phase:
75,571 million Yen)
(5) Schedule
February 2013 - January 2023 (120 months in total). The Project will be completed when
the service commences in the entire route (July 2021).
(6) Project Implementation Structure1) Borrower
The Government of the People’s Republic of Bangladesh
2) Guarantor: None
3) Executing Agency
Dhaka Mass Transit Company Limited (DMTC)
4) Operation and Maintenance System
Operation and maintenance will be implemented by Operation and Maintenance Groupof DMTC (estimated number of employees before start of the operation is 1,616). The
general consultant will provide technical instruction, advice and trainings for a few years
before the service commencement and on-the-job training in the test run period. DMTC
employees will acquire necessary skills and knowledge in this training period. In thefinancial aspect, 40% will be financed by the Government of Bangladesh while 60% will besupplied as a subleasing loan from the said government in concessional conditions toreduce the burden of principal and interest repayment. The institutional development
consultants are currently in the process of establishing financial and managerial plans.
(7) Environmental and Social Consideration / Poverty Reduction / Social Development
1) Environmental and Social Consideration① Category: A② Reason for Categorization
The Project is categorized as a project in the railway sector and the one that has
sensitive characteristics stipulated in the JICA Guidelines for Environmental andSocial Considerations (April 2010).
③ Environmental Permit
The Environmental Impact Assessment (EIA) report for the Project was formulatedby the Dhaka Transport Coordination Authority and approved by the Department ofEnvironment of Bangladesh on July 11th, 2011. Then, a revised EIA report was issued
taking into account the factors in the detailed design, which is posted on the website ofDMTC as of December 2015.
④ Anti-Pollution Measures
Periodical water sprinkling will be performed to control dust anticipated in theconstruction process. As a measure to alleviate noise and vibration, noise reducers will beapplied to construction equipment and soundproof walls will be installed. Waste water fromthe stations and the depot while in use will be appropriately treated by waste water treatment
facilities.
⑤ Natural Environment
The site of the Project is not located in or around sensitive areas such as a national park,and no rare species exist because the site is located in a developed urban area. Trees will beplanted below the elevated railway structures as a compensation of logging for its
construction.
⑥ Social Environment
As most of the construction is performed utilizing the space of the existing roads,
the Project requires acquisition of 46.0 ha of land with 1,140 people subject to theimpact. Land acquisition and resettlement of households are implemented incompliance with the applicable domestic laws and the JICA Guidelines forEnvironmental and Social Considerations, as well as Resettlement Action Plan (RAP)
formulated by the executing agency. Briefing to residents concerning the EIA report
and the RAP has been performed in the stages of scoping, formulating the EIA reportand establishing the RAP. In the briefing, the project outline, planned routes,
countermeasures to issues which may impose impact on the natural and social
environment, outline of the RAP draft and contents of compensation were explained.
⑦ Other / Monitoring
In the Project, the contractor under the supervision of the executing agency during theconstruction period, and the executing agency after the service commencement, willmonitor the possible air pollution, noise and vibration, water quality as well as progress ofland acquisition and resettlement of households concerned.
2) Promotion of Poverty Reduction
N/A3) Promotion of Social Development
Safety of female passengers is not ensured in the public transportation in Bangladesh,which makes women feel reluctant to use the public transportation. In this context, agender action plan will be promoted including operation of women-only cars in rush hours
and installation of security cameras in the trains and stations, to ensure safety of women in
the trains and stations and to enhance understanding about gender issues. For this reason,
the Project is specified as a project that includes gender-related activities.
(8) Collaboration with Other Donors
N/A(9) Other Important Issues
The MRT development may provide ample opportunities to introduce advanced
technologies that Japan holds (superiority of measures for soft ground, construction in limited
space of land and automatic toll collecting system, etc.).

4. Targeted Outcomes(1) Quantitative Effects
1) Performance Indicators (Operation and Effect Indicator)
Indicator

Baseline(Actual value in 2009)

Target (in 2023)【Expected value two years
after project completion】
4,193

Numberofpassenger
NA(thousand persons・ km/day)
Running distance (km/day)NA
6,528
Travel time (minutes) *105
36
Operating rate of rolling stocks
NA80(%)* Time to travel in the Project area (between Uttara North station and Motijheel station)2) Internal Rate of Return
Based on the conditions indicated below, Economic Internal Rate of Return (EIRR) of
the Project is 25.7%, and Financial Internal Rate of Return (FIRR) is 3.1%.
EIRR: Cost: Project cost (excluding tax) and operating and maintenance costs
Benefit: Reduction in the running cost, reduction in travel time, etc.
Project life: 40 years
FIRR: Cost: Project cost and operating and maintenance costs
Benefit: fare yields
Project life: 40 years(2) Qualitative Effects
1) Fulfilment of transportation demand in the Dhaka
2) Reduction of air pollution through promotion of using the public transportation and alleviationof climate change by GHG reduction
5. External Factors and Risk Control
Acquisition of land and submission of RAP and EIA shall be completed before bidding.
6. Lessons Learned from Past Projects(1) Lessons Learned from Past Projects
Ex-post evaluation of Metro Manila Strategic Mass Rail Transit Development Project in thePhilippines indicates that fare yield alone may not be enough to cover the cost of an urban
railway project due to its large initial investment, and so input of capitals and subsidies fromthe national government is essential. It also points out that formulation of a detailed financial
plan and an action plan of support by the government is necessary from the early stage ofproject establishment in order to ensure financial soundness of the executing agency.
(2) Application of Lessons Learned to the Project
In implementing the Project, ensuring financial soundness is essential as the volume ofinitial investment is very large. In order to achieve this based on the aforementioned lessons
learned, appropriate fare will be set, and a part of the yen loan will not be a subleasing loan
but capital injection by the borrower government. Meanwhile, the institutional development
consulting service will support DMTC in setting up a financial plan and its implementation.
7. Plan for Future Evaluation(1)

Indicators to be Used1) Number of passenger (thousand persons・km/day), running distance (km/day), traveltime (minutes), operating rate of rolling stocks (%)2) Economic Internal Rate of Return (EIRR) (%), Financial Internal Rate of Return(FIRR) (%)(2) Timing: Two years after the completion of the Project.