Completion Report. Project Number: 38625 Loan Number: 2156 June 2008. Bangladesh: Emergency Flood Damage Rehabilitation Project

Completion Report Project Number: 38625 Loan Number: 2156 June 2008 Bangladesh: Emergency Flood Damage Rehabilitation Project

CURRENCY EQUIVALENTS Currency Unit taka (Tk) At Appraisal At Project Completion (30 November 2004) (13 December 2007) Tk1.00 = $0.016949 $0.015 $1.00 = Tk59.00 Tk68.61 SDR1.00 = $1.358 $1.5831 ADB BR BRM BWDB EA EIRR HDM-4 IDC IRI LGED PCR PD PSC RHD SDR Sida TA VOC ABBREVIATIONS Asian Development Bank Bangladesh Railways Bangladesh Resident Mission Bangladesh Water Development Board executing agency economic internal rate of return Highway Development and Management Model interest during construction International Roughness Index Local Government Engineering Department project completion review project director project steering committee Roads and Highways Department special drawing rights Swedish International Development Cooperation Agency technical assistance vehicle operating cost (i) (ii) NOTES The fiscal year (FY) of the Government ends on 30 June. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2000 ends on 30 June 2000. In this report, $ refers to US dollars. Vice President L. Jin, Operations 1 Director General K. Senga, South Asia Department (SARD) Director H. Du, Bangladesh Resident Mission (BRM), SARD Team leader Team members A. Faruque, Senior Project Implementation Officer, BRM, SARD M. N. Islam, Assistant Project Analyst, BRM, (SARD)

CONTENTS Page BASIC DATA MAP i vi I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2 A. Relevance of Design and Formulation 2 B. Project Outputs 4 C. Project Costs 5 D. Disbursements 6 E. Project Schedule 7 F. Implementation Arrangements 7 G. Conditions and Covenants 8 H. Related Technical Assistance 9 I. Consultant Recruitment and Procurement 9 J. Performance of Consultants, Contractors, and Suppliers 10 K. Performance of the Borrower and the Executing Agency 11 L. Performance of ADB 12 III. Evaluation of Performance 12 A. Relevance 12 B. Effectiveness in Achieving Outcome 12 C. Efficiency in Achieving Outcome and Outputs 13 D. Preliminary Assessment of Sustainability 13 E. Other Impact 14 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 15 A. Overall Assessment 15 B. Lessons 15 C. Recommendations 16 APPENDIXES 1. Project Framework 157 2. Maps of Project Components as Completed 21 3. Appraisal and Actual Project Costs 23 4. Currency Equivalents 26 5. Projected and Actual Disbursements 27 6. Project Implementation Schedule 28 7. Status of Compliance with Major Loan Covenants 30 8. Technical Assistance Completion Report 37 9. Details of Consulting Services 39 10. Assessment of Project Impact and Benefits 40 11. Economic Reevaluation 43

BASIC DATA A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agencies Part A: Rural Infrastructure Part B: Roads and Bridges Part C: Railways Part D: Water Resources Part E: Municipal Infrastructure 6. Amount of Loan 7. Project Completion Report Number B. Loan Data 1. Appraisal Date Started Date Completed 2. Loan Negotiations Date Started Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness In Loan Agreement Actual Number of Extensions 6. Closing Date In Loan Agreement Actual Number of Extensions 7. Terms of Loan Interest Rate Maturity (number of years) Grace Period (number of years) Bangladesh 2156 Emergency Flood Damage Rehabilitation Project People s Republic of Bangladesh Local Government Engineering Department Roads and Highways Department Bangladesh Railways Bangladesh Water Development Board Local Government Engineering Department SDR117,195,000 ($180 million) PCR: BAN 1039 12 September 2004 27 September 2004 13 December 2004 14 December 2004 20 January 2005 2 February 2005 20 April 2005 2 May 2005-31 July 2007 13 December 2007-1% per year 40 10 8. Disbursements a. Dates Initial Disbursement 20 May 2005 Final Disbursement 13 December 2007 Time Interval 31.2 months

ii Effective Date 02 May 2005 Original Closing Date 31 July 2007 Time Interval 27.3 months b. Amount ($) Category a Original Allocation b Last Revised Allocation Net Amount Available Amount Disbursed Undisbursed Balance c 01A 51,920,010 39,498,709 39,498,709 37,190,348 2,308,361 01B 48,230,009 40,269,436 40,269,436 37,916,032 2,353,404 01C 12,970,002 5,539,274 5,539,274 5,215,551 323,723 01D 27,660,005 13,912,667 13,912,667 13,099,591 813,076 01E 22,850,004 23,132,254 23,132,254 21,780,372 1,351,882 02 800,000 9,327,135 9,327,135 8,782,044 545,091 03A 2,060,000 1,899,566 1,899,566 1,788,553 111,013 03B 4,800,000 4,492,004 4,492,004 4,229,485 262,519 03C 1,400,000 1,478,190 1,478,190 1,391,803 86,387 03D 2,900,001 2,833,519 2,833,519 2,667,925 165,594 03E 2,120,000 1,941,952 1,941,952 1,828,462 113,490 04 2,000,000 1,015,961 1,015,961 956,587 59,374 05 289,969 a b c Total 180,000,000 145,340,672 145,340,672 136,846,754 8,493,918 01A - Civil Works Part A: Rural Infrastructure; 01B - Civil Works Part B: Roads and Bridges; 01C - Civil Works Part C: Railways; 01D - Civil Works Part D: Water Resources; 01E - Civil Works Part E: Municipal Infrastructure; 02 - Equipment and Materials; 03A - Consulting Services Part A; 03B - Consulting Services Part B; 03C - Consulting Services Part C; 03D - Consulting Services Part D; 03E - Consulting Services Part E; 04 - Interest Charge; 05 - Unallocated. Variation in the SDR:$ exchange rate accounts for the difference between the original amount and the revised total amount. An undisbursed loan amount of SDR5,365,540.21 ($8,493,918.43) was canceled when the loan was closed on 13 December 2007. Previously SDR19,433,823.00 (about $27,700,000) had been canceled on 15 November 2005. 9. Local Costs (Financed) Item Appraisal Actual Amount ($ million) 106.20 73.22 Percentage of Local Cost 63.90 53.80 Percentage of Total Cost 44.25 35.84 C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimates Actual Foreign Exchange Cost 73.80 68.17 Local Currency Cost 166.20 136.11 Total 240.00 204.28

iii 2. Financing Plan ($ million) Appraisal Estimates Actual Cost Foreign Local Total Foreign Local Total Implementation Costs Borrower-Financed 0.00 60.00 60.00 0.00 41.98 41.98 ADB-Financed 71.80 106.20 180.00 62.67 73.22 135.89 Cofinanced Sida 0.00 0.00 2.45 12.25 14.70 Gov t of the Netherlands 0.00 0.00 2.09 8.66 10.75 Total 71.80 166.20 238.00 67.21 136.11 203.32 IDC Costs Borrower-Financed 0.00 0.00 0.00 ADB-Financed 2.00 0.00 2.00 0.96 0.00 0.96 Cofinanced 0.00 0.00 0.00 Grand Total 73.80 166.20 240.00 a 68.17 136.11 204.28 ADB = Asian Development Bank, IDC = interest during construction, RRP = report and recommendation of the President, Sida = Swedish International Development Cooperation Agency. a Financing was estimated at $240.00 million and the project cost at $239.97 million during appraisal and thus reflected in the RRP. This project completion report uses the approved figures from the RRP. 3. Cost Breakdown, by Project Component ($ million) Appraisal Estimate Actual a Project Component Foreign Local Total Foreign Local Total A. Civil Works Rural Infrastructure 8.90 62.98 71.88 9.90 56.45 66.35 Roads and Bridges 37.00 25.70 62.70 29.97 19.92 49.89 Railways 10.20 6.60 16.80 4.23 2.54 6.77 Water Resources 5.53 32.40 37.93 4.64 24.31 28.95 Municipal Infrastructure 3.62 28.16 31.78 4.49 26.19 30.68 Subtotal (A) 65.25 155.84 221.09 53.22 129.41 182.63 B. Equipment and Materials Railways Emergency Stock 0.80 0.80 1.60 8.78 0.00 8.78 Subtotal (B) 0.80 0.80 1.60 8.78 0.00 8.78 C. Consulting Services Rural Infrastructure 0.96 1.10 2.06 0.84 0.95 1.79 Roads and Bridges 2.05 2.75 4.80 1.81 2.42 4.23 Railways 0.80 0.60 1.40 0.80 0.59 1.39 Water Resources 1.60 1.30 2.90 1.47 1.20 2.67 Municipal Infrastructure 0.34 1.78 2.12 0.29 1.54 1.83 Subtotal (C) 5.75 7.53 13.28 5.21 6.70 11.91 D. Land Acquisition and Resettlement 0.00 2.00 2.00 0.00 0.00 0.00 Subtotal (A+B+C+D) 71.80 166.17 237.97 67.21 136.11 203.32 E. Service Charge during Construction 2.00 0.00 2.00 0.96 0.00 0.96 Total 73.80 166.17 239.97 a 68.17 136.11 204.28 RRP = report and recommendation of the President. Note: Because of rounding the figures may not add up to the totals given. a Financing was estimated at $240.00 million and project cost at $239.97 million during appraisal and thus reflected in the RRP. This project completion report uses the approved figures from the RRP.

iv 4. Project Schedule Item Appraisal Estimate Actual Consultants Contracts Part A: Rural Infrastructure Contract Date November 2004 June 2005 Completion of Consultant January 2007 July 2007 Supervision Part B: Roads and Bridges Contract Date November 2004 September 2005 Completion of Consultant January 2007 July 2007 Supervision Part C: Railways Contract Date November 2004 October 2005 Completion of Consultant January 2007 July 2007 Supervision Part D: Water Resources Contract Date November 2004 October 2005 Completion of Consultant January 2007 July 2007 Supervision Part E: Municipal Infrastructure Contract Date November 2004 June 2005 Completion of Consultant January 2007 July 2007 Supervision Completion of Engineering Designs November 2004 February 2006 June 2005 September 2005 Civil Works Contracts Date of Award February 2005 September June 2005 2005 Completion of Construction January 2007 July 2007 Equipment and Supplies First Procurement May 2005 12 June 2005 Last Procurement June 2006 2 May 2006 Other Milestones: 1. 15 November 2005: Approval of partial cancellation of SDR19,433,823.00 2. 13 December 2007: Closing of loan accounts 5. Project Performance Report Ratings Implementation Period Development Objectives Rating Implementation Progress 1 Jan 2005 to 31 Dec 2005 Satisfactory Satisfactory 1 Jan 2006 to 31 Dec 2006 Satisfactory Satisfactory 1 Jan 2007 to 31 Dec 2007 Highly Satisfactory Highly Satisfactory

v D. Data on Asian Development Bank Missions Name of Mission Date No. of Persons No. of Person- Days Specialization of Members a Appraisal 12 27 September 11 44 a, b, c, d, e, f, i 2004 Inception Mission 12 18 March 2005 3 21 a, b, g Review 1 11 22 December 2005 2 16 a, g Special Loan Administration 10 20 March 2006 2 10 a, g Review 2 3 15 May 2006 2 10 a, g Special Loan Administration 3 14 September 2006 2 8 a, g Review 3 11 29 November 2006 2 10 a, g Special Loan Administration 8 9 February 2007 2 4 a, g Review 4 4 15 April 2007 2 12 a, g Review 5 23 July 6 August 2007 2 22 a, g Project Completion Review b 6 18 March 2008 3 12 a, g, h a a = mission leader/senior project specialist/engineer, transport engineer, b = project implementation officer, c = senior project implementation officer, d = social development specialist, e = environment specialist, f = senior counsel, g = assistant project analyst, h = staff consultant, i = environment analyst. b This project completion report was prepared by Ahmed Faruque, senior project implementation officer/mission leader; Md. Nazrul Islam, Assistant Project Analyst; and a transport economist (staff consultant).

vi MAP

I. PROJECT DESCRIPTION 1. The Emergency Flood Damage Rehabilitation Project (the Project) was formulated in response to a request for emergency assistance made by the Government of Bangladesh to the Asian Development Bank (ADB) after severe flooding in the north of the country in late June to early July 2004 that affected 39 districts, including Dhaka and other central districts. The floods were the country s worst ever in geographic extent and economic damage caused. Serious damages to infrastructure and other assets and economic disruption inflicted heavy losses on agricultural and industrial output and slowed down the growth in services. 2. The main objective of the Project was to help sustain economic growth by minimizing the devastating impact of the floods and thus enabling the early restoration of economic and social activities in the affected areas. Priority areas were identified in consultation with the Government and the private sector, and with the participation of communities. The project framework at appraisal, compared with the achievements of the Project, is shown in Appendix 1. 1 3. A sector approach was followed in the selection of the highest-priority subprojects. This was most appropriate to the emergency situation, as it allowed a quick response and maximum flexibility in both geographic coverage and components, within the agreed framework and criteria. 4. The Project comprised of five components: (i) Part A: Rural infrastructure. Rehabilitation and restoration of rural infrastructure, including rural roads, bridges, and culverts in 9 districts 2 under the ADB-assisted Third Rural Infrastructure Development Project, 3 and 15 other districts 4 in the worst-affected areas. In addition, flood and cyclone shelters were to be rehabilitated and provided with latrines to help communities, especially the poor. (ii) (iii) (iv) Part B: Roads. Rehabilitation of flood-damaged national, regional, and district roads, bridges, and culverts in five of the country s seven road zones 5 Barisal, Comilla, Dhaka, Rajshahi, and Rangpur. Part C: Railways. Rehabilitation of flood-damaged rail infrastructure and facilities on the core rail network, including civil works to restore embankments, tracks, bridges, essential buildings, station roads, and signaling and telecommunications facilities. This component also included the provision of emergency equipment and materials to speed up repair work in future emergencies. Part D: Water resources. Rehabilitation of flood control, drainage, and irrigation facilities; repair of embankment breaches; and repair or replacement of water control structures, protective works, and canals in 39 districts to restore them to their condition before the flood and to prevent or mitigate future disasters. 1 The project framework at appraisal has since been modified to conform to ADB s revised design and monitoring framework. 2 Gaibandha, Jamalpur, Kishoregonj, Kurigram, Lalmonirhat, Mymensingh, Netrakona, Nilphamary, and Sherpur. 3 ADB. 1997. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People s Republic of Bangladesh for the Third Rural Infrastructure Development Project. Manila. 4 Bogra, Naogaon, Sirajganj, Tangail, Sunamganj, Sylhet, Habigonj, Moulavibazar, Brahmanbaria, Narshingdi, Comilla, Chandpur, Feni, Laxmipur, and Noakhali. 5 The road network is divided into seven zones, namely: Barisal, Chitaggong, Comilla, Dhaka, Khulna, Rajshahi, and Rangpur.

2 (v) Part E: Municipal infrastructure. Rehabilitation of: (a) roads, drains, bridges, and culverts; and (b) footpaths and drains in the slums of about 55 municipalities 6 (pourashavas) in six divisions. 5. The Project also included capacity building and training in flood-resistant infrastructure design standards to strengthen the Government s disaster preparedness, and analytical input and capacity building to enhance early-warning systems. Two associated technical assistance (TA) 7 projects were financed with a grant from ADB s TA funding program for this purpose. 6. The Government of Bangladesh was the Borrower, and the Executing Agencies (EAs) for the project components were the Local Government Engineering Department (LGED) for parts A and E; the Roads and Highways Department (RHD) for part B; the Bangladesh Railways (BR) for part C; and the Bangladesh Water Development Board (BWDB) for part D. An ADB loan 8 of $180 million equivalent from ADB s Special Funds (SF) resources financed part of the cost of the Project. It was approved as umbrella or standby financing on the understanding that part of the loan would be canceled as soon as grant financing became available from the Netherlands or Sweden. During project preparation both governments had expressed interest, through the Swedish International Development Cooperation Agency (Sida), in providing $27.7 million cofinancing for the Project. ADB also approved the associated TA 4562-BAN: Early Warning Systems Study for $250,000 on the assumption that it would later be replaced by a corresponding grant from the Government of the Netherlands. II. EVALUATION OF DESIGN AND IMPLEMENTATION A. Relevance of Design and Formulation 7. The Project was designed while ADB s 1999 country operational strategy 9 was in force. The overall strategic objective was poverty reduction through (i) faster private sector led economic growth, (ii) better development opportunities for the poor in rural and urban areas, (iii) human development, and (iv) environmental protection. The poverty reduction objective was reaffirmed in the partnership agreement on poverty reduction between ADB and the Government of Bangladesh. 10 To maximize the impact of the Project, the EAs adopted an area approach, to focus assistance on areas with a high concentration of poverty. 8. Under the Project, key physical and social infrastructure was to be rehabilitated to pre-flood conditions to (i) restore normal economic and social activities, and (ii) create opportunities for employment or income generation. Poverty, caused by massive income 6 Bagerhat, Bhairab, Bhanga, Boalmari, Bogra, Brahmanbaria, Chandpur, Chatkhil, Comilla, Dinajpur, Faridpur, Feni, Gabtali, Gaibandha, Gazipur, Gopalgonj, Gournadi, Habigonj, Jamalpur, Jhalokathi, Joypurhat, Khoksa, Kishoregonj, Kumarkhali, Kushtia, Lalmonirhat, Laxmipur, Madaripur, Manikgonj, Monohordi, Moulavibazar, Munshigonj, Mymensingh, Nagarkanda, Narayangonj, Narsingdi, Natore, Netrakona, Noakhali, Pabna, Patuakhali, Poshuram, Raipur, Rajbari, Ramganj, Rangpur, Satkhira, Savar, Shahjadpur, Shariatpur, Sherpur, Sirajganj, Sunamganj, Tangail, and Tongi. 7 ADB. 2005. Technical Assistance to the People s Republic of Bangladesh for Support for Financial Management and Monitoring. Manila (TA 4561-BAN, for $150,000, approved on 20 January); and ADB. 2005. Technical Assistance to the People s Republic of Bangladesh for Early Warning Systems Study. Manila (TA 4562-BAN, for $250,000, approved on 20 January). 8 ADB. 2005. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People s Republic of Bangladesh for Emergency Flood Damage Rehabilitation. Manila (Loan 2156-BAN[SF]) was approved for the amount of $180 million equivalent on 20 January 2005. 9 ADB. 1999. Bangladesh Country Operational Strategy: Responding to the Challenge of Poverty. Manila. 10 ADB and the Government of the People s Republic of Bangladesh. 2000. Partnership Agreement on Poverty Reduction. Manila.

3 erosion, loss of physical assets, and debt accumulation, which had intensified to an alarming extent after the flood, would thus be reduced. The infrastructure and civil works completed under the Project allowed economic activity to resume by (i) improving transportation links between agricultural farms and marketplaces, and upazila 11 and district headquarters; (ii) shortening travel time for freight and passenger traffic on roads and railways, and thus reducing transportation costs; and (iii) creating employment opportunities for local skilled and unskilled labor, thereby increasing purchasing capacity, expenditure, and consumption. These resulted in higher productivity, and improved gross domestic product. The Project was designed and formulated to reduce poverty and contribute to Bangladesh s economic recovery, according to ADB s country strategy and overall goal. It was relevant to ADB s country strategy at the time of design and remains relevant. 9. Of the eight ADB loans providing disaster emergency assistance to Bangladesh so far, two have undergone post-evaluation. 12 ADB s experience and the lessons of disaster assistance 13 indicate the need for (i) quick preparation of disaster assistance ; (ii) a focus on restoring infrastructure facilities; (iii) completion of rehabilitation work within 2 years, to the extent possible; (iv) strong consulting support and ADB supervision during subproject design and implementation; (v) rapid government response and action; (vi) beneficiary participation in project preparation and implementation; (vii) environment and social aspects incorporated in project design and monitored during implementation; (viii) retroactive financing and imprest accounts used to facilitate government access to funds; (ix) subproject selection criteria that permit simple prioritization of subprojects and rapid implementation; and (x) upgrading, rather than mere restoration, of infrastructure, to enhance flood resistance. 10. The project components were designed and implemented according to government policy in the relevant sector. The design of part A (rural infrastructure) was in line with the Government s sixth 5-year plan (2002 2007), which aimed at improving basic physical infrastructure in rural areas for economic development. Part B (roads) was consistent with the recommendations of the road master plan, 14 whose objective was to sustain the improved riding quality of roads and reduce vehicle operating costs (VOCs). The design for part C (railways) supported the Government s policy of promoting the railway subsector as the pro-poor mode of transport, facilitating cheap yet environment-friendly transportation of long-haul freight. Part D (water resources) was designed and implemented according to the Government s National Water Policy, 15 which aimed at taking appropriate measures to provide desired levels of protection for life, property, vital infrastructure, agriculture and wetlands, and the Flood Action Plan, 16 prepared after the floods of 1987 and 1988, which helped determine the most appropriate action for coping with floods, including subproject selection. Part E (municipal 11 The divisions of Bangladesh are divided into 64 districts, or zila. The districts are further subdivided into 493 subdistricts, or upazila. 12 PEO466, October 1996, ADB. 1988. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People s Republic of Bangladesh for the Flood Rehabilitation Project. Manila (Loan 882- BAN[SF]); and PEO444, August 1995, ADB. 1988. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People s Republic of Bangladesh for the Flood Damage Restoration Project, Manila (Loan 892-BAN[SF]). 13 ADB. 2007. ADB s Disaster and Emergency Assistance Policy; and Positioning ADB s Disaster and Emergency Assistance: Policy in a Changing Regional Environment. Manila (drafts); Benson, C., and W. T. Linklaen-Ariens. 1999. Rehabilitation after Disasters. A Review of Lessons Learned and Emerging Issues. Manila: ADB (third draft). 14 ADB. 1988. Technical Assistance to the People s Republic of Bangladesh for Preparation of a Road Master Plan. Manila; and ADB. 1994. Technical Assistance to the People s Republic of Bangladesh for Preparation of a Road Master Plan (Supplementary). Manila. 15 Ministry of Water Resources, Government of Bangladesh. 1999. National Water Policy. Dhaka. 16 Flood Plan Coordination Organization, Ministry of Irrigation, Water Development and Flood Control. 1989. Flood Action Plan. Dhaka, Bangladesh.

4 infrastructure) conformed with the objectives of the Government s sixth 5-year plan to improve municipal infrastructure, including roads, drains, bridges, and culverts. B. Project Outputs 11. The major outputs achieved under each of the five components are described briefly in the following sections. Full details of the appraisal and detailed assessment targets compared with the actual outputs achieved are in Appendix 1. The project components as completed are shown on the maps in Appendix 2. 1. Part A: Rural Infrastructure 12. At appraisal it was envisaged that 5,500 kilometers (km) of upazila and union roads would be rehabilitated into bitumen-surfaced roads. Actual works totaled only 2,423.41 km. The rehabilitation of 13,200 meters (m) of bridges/culverts was also anticipated at appraisal, but the actual total was only 11,075.51 m. Tree plantation was estimated to cover 110 km at appraisal but actually covered only 32.98 km. Of a projected 10 flood shelters, only 9 were replaced. On the other hand, flood protection works totaling 45.62 km were rehabilitated, compared with 40 km at appraisal. 13. The shortfall in the implementation of road and bridge works can be attributed to the significant amount of time that elapsed between the preliminary damage assessment, right after the 2004 flood receded, and the detailed damage assessment during design and planning. Increased damage from continued use of these infrastructure during the long interval required more extensive rehabilitation, at higher unit costs. 17 The cost of construction materials had also increased. Budget limitations dictated the cutbacks in rehabilitation. 2. Part B: Roads 14. At appraisal it was estimated that the floods had submerged 6,728 km of road and damaged 2,968 km of road, 306 bridges and culverts, and 26 ferry landings. Roads rehabilitated under the Project totaled 3,572 km, 18 and bridges and culverts repaired totaled 2,115 m. 3. Part C: Railways 15. BR is divided into East and West zones. At appraisal it was estimated that 320 km of track in 117 locations and 110 bridges in the East Zone and 96 km of track in 40 locations and 18 bridges in the West Zone had been damaged by the floods. 19 This component comprised (i) civil works to restore embankment track, bridges, stations, buildings, roads, and electrical, signaling, and telecommunication facilities; and (ii) provision of emergency stock of equipment and materials to increase preparedness and ability to handle future emergencies. The actual work implemented involved (i) 90,116 m of embankment re-profiling; (ii) 39,383 m of ballast wall restoration; (iii) 87,868 square meters of embankment protection; (iv) 19,834 m of embankment protection wall restoration; and (v) 391 cubic meters of embankment natural ground replacement. 17 The unit cost of road rehabilitation was Tk437,000 per km in the preliminary damage assessment report (lower than the Tk740,000 per km calculated for the 1998 flood) and Tk1,212,000 per km during implementation (i.e., 277% higher). 18 Consisting of 99 km of national roads, 1,236 km of regional roads, and 2,237 km of district roads. 19 The appraisal report did not give details of the locations or extent of the damage.

5 16. On 5 March 2006, anticipating loan savings, BR requested the substitution of steel sleepers for the wooden sleepers that were to be procured because it was having difficulty sourcing wooden sleepers. ADB approved the request on 15 June 2006. Under two separate contract packages 20 28,000 meter gauge (MG) steel sleepers and 224,000 elastic rail clips 21 were procured for the East Zone of BR. The equipment purchased included a rail sawing machine, rail drilling machines, rubber seal (RS) joint, lifting jacks, switch expansion joints for dual-gauge track, and trucks. 4. Part D: Water Resources 17. Financial constraints hampered the achievement of the targets set for embankments and protective works in the flood damage assessment report. Against a target of 1,056 km of embankment works, the actual works totaled only 1,029 km. 22 Protective work was estimated at 30 km at appraisal and ultimately amounted to 29 km. However, the work on irrigation and drainage channels (29 km) and water structures (459) matched the appraisal targets. 5. Part E: Municipal Infrastructure 18. In this component urban infrastructure, including municipal roads, drains, bridges and culverts, and footpaths in slums located in 55 pourashavas, was to be rehabilitated or improved. Actual achievements were 1,315 km of municipal roads (compared with 1,028 km at appraisal), 23 426 m of bridges/culverts (compared with 393 m), and 61.5 km of drains (compared with 47 km). Repair work on footpaths in slums and low-income areas 24 was found to have been taken on by the pourashavas themselves or by various nongovernment organizations and was therefore dropped from the scope of works. Loan savings and fluctuations of exchange rate between US$ and Taka financed the increase in actual works over the targets. C. Project Costs 19. At appraisal, the project cost was estimated at $240.00 million equivalent $73.80 million (31%) in foreign exchange cost (including $2.00 million for service charges and interest during construction [IDC]) and $166.20 million equivalent (69%) in local currency cost (including taxes and duties). The ADB loan of $180 million equivalent from Special Funds would finance 75.0% of the project cost. It would cover all of the foreign exchange cost and about 64% of local currency cost. 20. The project completion cost estimated by the Project Completion Review (PCR) Mission was $204.28 million equivalent, with a foreign exchange cost of $68.17 million equivalent ( 33%) and a local currency cost of $136.11 million equivalent (67%). ADB financed $136.85 million equivalent (67% of the total), the Government of the Netherlands $10.75 million equivalent 20 Subproject contract packages BR/EZ/PQ-06 and BR/EZ/PQ-09 were invited on 20 June 2006. The bids for these contract packages was later discovered to be nonresponsive as the bidders had failed to comply with the qualification criteria, and the packages were rebid on 5 September 2006. 21 Pandrol clips. 22 These figures represent both full and partial works on embankments. 23 The original appraisal target of 1,028 km of roads was revised to 1,121.46 km by an ADB review mission in April 2006 to fully achieve project objectives. This revised target was increased again to 1,181 km in August 2006 and further to 1,315 km in April 2007. 24 The 63 km of footpaths targeted at appraisal were only in the Siraganj and Chandpur pourashavas.

6 (5%), and Sida $14.70 million equivalent (7%). 25 Cofinancing amounted to $25.45 million equivalent (12%). The Government of Bangladesh financed the remaining $41.98 million equivalent in local costs. The actual costs were lower than the appraisal estimates mainly because of the loan savings generated under part B (roads) $49.89 million compared with $62.70 million estimated at appraisal. The contractors bid prices were significantly lower than the appraisal estimates. The devaluation of Taka relative to US dollar was another factor. Loan savings were also made under part E (municipal infrastructure), enabling an increase in outputs achieved in this component. The unused balance of the loan was cancelled when the loan account was closed on 13 December 2007. 21. Details of the actual costs for each component compared with the estimates at appraisal are shown in Appendix 3. For cost comparison, the local currency costs incurred by the EAs were converted into dollars at the prevailing rate during each transaction. The average exchange rates used are in Appendix 4. D. Disbursements 22. No disbursement schedule was included in the appraisal. However, on the basis of the implementation schedule prepared at the time of appraisal, the projected disbursements were developed and are shown in Appendix 5 along with the actual disbursements during implementation. The Loan Agreement was revised and part of the ADB loan was canceled on 15 November 2005 when cofinancing from the Government of the Netherlands and Sida was confirmed. The Government of the Netherlands approved a grant for 10.79 million ($13 million) for the water resources component (part D) and a further grant of $250,000 equivalent for TA 4562-BAN: Early Warning Systems Study. Sida approved a grant of SKr120 million ($14.7 million) for the rural infrastructure component (part A). These grants were administered by ADB. The amount canceled from the ADB loan was SDR19,433,823 ($27.7 million). ADB canceled the remaining balance of SDR5,365,540.21 ($8,493,918.43) after the last disbursement on 13 December 2007. 26 The first (20 May 2005) and final disbursements (13 December 2007) spanned 31.2 months, compared with the 27.3-month disbursement period envisaged at appraisal. Although all physical activities under the loan were completed by the original loan closing date (31 July 2007), the loan account was kept open until 13 December 2007 to accommodate some late withdrawal applications to ADB. 23. RHD (part B) 27 and BR (part C) had a backlog of disbursements. RHD s backlog was due to (i) slow progress under several contract packages, particularly those involving bridges; and (ii) delayed release of adequate counterpart funds by the Government. BR disbursements under part C were slowed down by (i) procedural formalities involved in the processing of interim payments and withdrawal applications, (ii) delayed delivery of materials and equipment by suppliers, (iii) the practice of bunching withdrawal applications to ADB, and (iv) delayed release of counterpart funds by the Government. Part D, administered by BWDB, also lagged behind in disbursements. The delay was mainly due to the traditional BWDB requirement of having its project monitoring team inspect the dumping of materials on-site before certifying payment. BWDB later agreed to waive this requirement to speed up disbursement, and the 25 As envisaged at appraisal the ADB loan was approved as umbrella or standby financing on the understanding that part of the $180 million loan would be canceled once grant financing became available from the Netherlands or Sweden. The partial cancellation was made when cofinancing became available from the Government of the Netherlands and Sida (para. 22). 26 The grants from the Government of the Netherlands (no. 0038) and the Government of Sweden (no. 0039) were also closed on 13 December 2007. 27 As of 28 March 2006 only $3.99 million had been disbursed for part B, compared with contract awards of $34.79 million.

7 backlogs were cleared toward the end of the Project. Another cause of delay in disbursements was the nationwide political unrest, which slowed down the movement of payment documents from the field to the EA headquarters in Dhaka. 24. Imprest accounts, as envisaged at appraisal, were set up for each component, except part B (roads). For part B, the reimbursement procedures were the same as those for current ADB-financed projects, with RHD as the EA. ADB s statement of expenditures (SOE) procedure was followed in reimbursing eligible expenditures and liquidating advances to the imprest accounts. The EAs imprest accounts were well maintained and the SOE procedure facilitated timely payment to consultants, contractors, and suppliers. E. Project Schedule 25. The ADB Board approved the loan on 20 January 2005. The Loan Agreement was signed on 2 February 2005 and became effective on 2 May 2005. The loan was closed on 31 July 2007, as envisaged at appraisal. Because of the emergency nature of the Project, it was stipulated at appraisal that all subprojects under the five components had to be completed within 25 months, i.e., by 31 January 2007. However, to use the savings 28 from low bid prices and from other EAs (especially RHD), LGED undertook additional subprojects. 29 ADB extended the completion deadline for all subprojects to 31 May 2007. By 31 March 2007 93% of the civil works for part A, 87% for part B, 75% for part C, 88% for part D, and 95% for part E were completed. Because of delays in procurement and the awarding of contracts (para. 35) it was not until 31 July 2007 that all the subprojects were completed. Some subprojects that made extremely slow progress had to be canceled. Although these delays did not adversely affect the project implementation schedule, timely action by the EAs (especially BR) could have minimized the delays and brought the project benefits earlier to the affected people. Appendix 6 compares the actual and the appraisal implementation schedules for each component. F. Implementation Arrangements 26. The implementation arrangements were as envisaged at appraisal. The Borrower was the Government of Bangladesh and the EAs for the five components were LGED for parts A and E, RHD for part B, BR for part C, and BWDB for part D. As in previous ADB-financed flood damage rehabilitation projects, the already established project steering committee (PSC), 30 chaired by the Member for Programming Division of the Planning Commission, Ministry of Planning, was responsible for coordinating the overall project, overseeing governance matters, resolving interagency issues and procedural matters, and ensuring counterpart funding, as well as monitoring overall project implementation. Coordination among ADB and the EAs, government agencies, consultants, and contractors was adequately maintained through regular PSC meetings. Each EA established a project management unit (PMU) and appointed a fulltime project director (PD), who was responsible for project implementation and coordination. For each of parts B and C, a project coordinator was appointed to coordinate among the multiple PDs in different zones. In some components the PD changed several times. For part B (roads), there were changes in the PD in some of the zones, and for part C (railways), there were three 28 In December 2005, the loan savings were estimated at $10.0 million. 29 LGED undertook an additional 42 subprojects for part A, and 40 for part E. 30 A PSC was created for the first time for the 1998 Flood Damage Rehabilitation Project and found to be very effective. It comprised the member for physical infrastructure of the Planning Commission and representatives from the Economic Relations and Finance divisions of the Ministry of Finance, the Cabinet Division, the Implementation Monitoring and Evaluation Division of the Planning Commission, and the EAs involved in emergency rehabilitation works under ADB, World Bank, and other aid agency projects.

8 PD changes in the East Zone and two in the West Zone. But for parts A (rural infrastructure), D (water resources), and E (municipal infrastructure), the PDs were the same throughout the Project. The PDs under some components changed because of promotion or transfer to other departments of the same organization. The implementation of the Project, however, did not suffer adversely from these changes. The Bangladesh Resident Mission (BRM) hosted frequent coordination meetings with the PDs and consultants to review the physical progress of each component, discuss problems, and agree on solutions. The activities of the PSC proved very effective in identifying problems and taking remedial actions at an early stage, thus minimizing implementation delays. The Government also approved simplified procedures for tendering, approval, and awarding of contracts. The Government s single-stage, one-envelope system of local competitive bidding, approved by ADB, was followed. ADB also simplified its system for approving the awarding of civil works contracts. Tender evaluation and contract documents for civil works for the first subproject selected by each EA, and for civil works exceeding $200,000 equivalent, were reviewed and approved by ADB before the contracts were awarded. All other subprojects were approved after they were awarded. Contracts could thus be awarded much faster, consistent with the emergency nature of the Project. This simplified procedure of contract awards did not detract from the successful implementation of the subprojects. 27. Given the urgency of the Project and the need to commence the flood damage rehabilitation before the next monsoon season, ADB approved advance action for the procurement of goods, services, and works, and the recruitment of consultants, provided that this took place on or after 12 September 2004 (date of appraisal). ADB also agreed to provide retroactive financing for eligible expenditures subject to certain conditions. 31 Considering the complexity of the Project, the overall implementation arrangements were generally satisfactory and effective. The provision of grant funding by the Government of the Netherlands and the Government of Sweden, through Sida, constituted a major change in the scope of the Project. G. Conditions and Covenants 28. Details of compliance with the loan covenants are given in Appendix 7. The Government and the EAs generally complied with the covenants and substantially met the reporting requirements. However, the EAs submitted their project completion reports separately. The reports therefore lacked uniformity in format, and, largely because of the EAs unfamiliarity with ADB s reporting requirements, in the data and information they provided. Each EA also maintained separate records and accounts to identify the goods and services financed under the loan. The accounts were audited annually by independent auditors and the audited accounts were generally submitted on time to ADB and substantially met the covenant requirements. 31 ADB agreed to provide retroactive financing of $25 million for eligible expenditures for the immediate rehabilitation of key infrastructure and facilities and for consulting services incurred not earlier than 12 September 2004 (date of appraisal), provided that the expenditures conformed to agreed procedures and were certified by the EAs and consultants, and that the certification was acceptable to ADB. Retroactive financing was to be approved under the following conditions: (i) the consultants were in the field and had prepared the subproject, (ii) contracts over $50,000 equivalent were approved by ADB, and (iii) works were procured according to tender procedures acceptable to ADB and certified by the consultants (ADB. 2005. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grants to the People s Republic of Bangladesh for the Emergency Flood Damage Rehabilitation Project. Manila [Loan 2156-BAN(SF)], para. 52).

9 H. Related Technical Assistance 29. ADB included two TA grants in the Project. These were (i) Support for Financial Management and Monitoring, 32 and (ii) Early Warning Systems Study. 33 30. The overall objective of the first TA was to assist the Government of Bangladesh in monitoring the Emergency Flood Damage Rehabilitation Project. This entailed supporting the PSC and its secretariat, the Implementation Monitoring and Evaluation Division (IMED) of the Planning Commission, in the tasks mandated by the Government for the effective monitoring and evaluation of the Project. The IMED was the EA for this TA. The Government did not have to sign a TA agreement for this small-scale TA, which was implemented over 24 months. The consultant s contract was signed on 4 July 2005 and the consultant was fielded on 24 July 2005 and completed the work on 23 August 2007. Overall the TA was rated as success. No TA completion report (TCR) was prepared. 34 31. The objective of the TA for the Early Warning Study was to assist the Government in assessing the effectiveness of its flood forecasting system and in drawing up a strategy for enhancing its usefulness and early-warning capability. This entailed assessing institutional, technical, physical, and other constraints and developing a strategy for improving the system. The Government of the Netherlands approved grant financing of $250,000 equivalent, leading to the cancellation of the equivalent amount earmarked by ADB for the TA. ADB, however, administered the TA, with BWDB as Executing Agency. As originally envisaged, the TA was to be implemented over 6 months, from 15 February 2005 to 14 August 2005. The signing of the TA Agreement by the Government was, however, significantly delayed the agreement was not signed until 23 April 2005 and so was the selection of the individual consultants. Eleven individual consultants were short-listed only in February 2006 and their contracts were signed only during 19 April 21 June 2006 for intermittent inputs from 1 May 2006 to 31 October 2006. Internal reallocation of the person-months of the international and national consultants also contributed to some delay. Although this was a 7-month study, it took two more months for the final report to be completed. The recommendations prompted the national steering committee to approach the development partners for the high-priority investments needed to improve the flood forecasting and warning system. Overall, the TA was rated as success. Full details of the TA and its outputs are given in the TCR in Appendix 8. I. Consultant Recruitment and Procurement 1. Consultant Recruitment 32. Consultant recruitment was as envisaged at appraisal and conformed to ADB s Guidelines on the Use of Consultants (2007, as amended from time to time). Because the Project had a short implementation period and issues needed to be addressed as quickly as possible, the consultants had to be recruited without delay. ADB therefore agreed to the direct engagement of consultants and approved advance action in that regard. At the request of the Government, made through the Economic Relations Division in December 2004, ADB agreed to engage the consultants directly on behalf of the Borrower. The consultants were recruited from 32 ADB. 2005. Technical Assistance to the People s Republic of Bangladesh for Support for Financial Management and Monitoring. Manila (TA 4561-BAN, for $150,000, approved on 20 January). 33 ADB. 2005. Technical Assistance to the People s Republic of Bangladesh for Early Warning Systems Study. Manila (TA 4562-BAN, for $250,000, approved on 20 January). 34 According to Project Administration Instruction 6.08, a TCR is not required for small-scale technical assistance, which is currently defined as TA with an approved value of no more than $150,000.

10 ADB s various ongoing loan projects and were fielded from 20 December 2004. By 1 January 2005 all the consultants were in the field. 33. ADB selected five consulting firms, one for each of the five components. The selection was based on (i) current or prior substantial and satisfactory experience in ADB-financed flood damage rehabilitation projects in Bangladesh, (ii) capacity to deploy needed expertise of the specified relevance and quality at short notice, and (iii) previous selection for ongoing projects following ADB s Guidelines on the Use of Consultants and satisfactory performance in those prior engagements. ADB on 15 December 2004 invited the five consulting firms to submit their technical and financial proposals, and by the end of that month had received proposals from all five consultants. All the consultants contracts were signed by 12 October 2005. The consultants inputs procured under the five components totaled 236 person-months of international consultants (compared with 250 35 at appraisal) and 2,237 person-months of national consultants (compared with 2,200 at appraisal). The consulting inputs as envisaged at appraisal and as used by project completion are summarized in Appendix 9. 2. Procurement 34. Project goods and services financed by ADB were procured through local competitive bidding (for civil works) and through international competitive bidding and international shopping (for equipment and materials), according to ADB s Procurement Guidelines (2007, as amended from time to time), as envisaged at appraisal. A total of 1,684 civil works contract packages were procured for the Project, comprising 709 contracts 36 for part A; 120 contracts 37 for part B; 75 contracts for part C; 278 contracts for part D; and 502 contracts for part E. 38 Equipment and materials for part C (railways) were procured through international competitive bidding. 35. The procurement of all contract packages went reasonably smoothly, with some exceptions. In part A there were allegations that LGED did not follow due diligence in procurement and contract implementation, and strong indications of corruption by LGED s field staff in quality assurance. Through review missions, coordination meetings, and PSC meetings, ADB closely monitored these incidents, and in some cases advised rebidding or cancellation of contracts. Procurement for Part B was protracted, with an average lead time of 10 months. Several contract packages had to be rebid or canceled because of inadequate integrity in the bidding process, the submission of forged bid securities by the bidder, and incidents of coercion. In part B there were six contract packages in Comilla zone. Out of the 120 firms that purchased bidding documents for these contracts, only 5 submitted bids. Investigation by ADB s Anticorruption Unit strongly indicated that other contractors had been barred through coercive and restrictive practices from submitting bids. The six contract packages were canceled. This isolated incident, however, does not detract from the performance of LGED (see para. 40). J. Performance of Consultants, Contractors, and Suppliers 1. Consultants 36. The performance of the consultants under all five components was generally satisfactory, considering the multitude of small contracts and the wide dispersion of the project 35 The appraisal report quoted 250 person-months of international input. But the appendixes to the report indicated a total of 246 person-months for the five components. 36 Including additional contract packages made possible by loan savings. 37 Comprising 101 road packages and 19 bridge packages. 38 Including additional contract packages made possible by loan savings.

11 sites. However, the consultants monitoring systems and practices could have been strengthened further through (i) greater vigilance by their ground-level staff, (ii) closer coordination between the consultants Dhaka base and the field through more frequent meetings, (iii) the presence of the team leader in the country during key or peak project activities, and (iv) the enhanced integrity of the consulting staff in supervising contractors work. 2. Contractors 37. The performance of all contractors was generally satisfactory and the quality of the completed works was good. Several components, however, suffered delays due to the following: (i) contractors reluctance (or inability) to prepare adequate work plans, (ii) the occurrence of three rainy seasons during the project period, (iii) contractors lack of proper management capacity, (iv) delay in getting some material testing reports, and (v) political disturbances in the country. In some components, because of the inadequate financial capabilities of many contractors, interim payment certificates had to be resubmitted several times, holding up the implementation of works. Some small contractors mobilized late; thus, some subcomponents were not completed on time. Additionally, some contracts that were making little or no progress were canceled. 39 3. Suppliers 38. The only component that involved the supply of equipment and materials was part C (railways). The provision of steel sleepers was delayed, as a supplier had difficulty obtaining supply from its principal in India. The supplier eventually subcontracted the package for steel sleepers. Political unrest also delayed the production of steel sleepers. Overall, however, the performance of the suppliers of equipment and materials was satisfactory. K. Performance of the Borrower and the Executing Agency 39. The performance of the Borrower and the EAs was satisfactory. Despite the complexity of the Project the short implementation period, and the involvement of five sectors and four EAs the Borrower performed satisfactorily and achieved successful project implementation. The PSC, established quickly within the Planning Commission, performed well and fulfilled most of its obligations in monitoring project implementation by the different EAs. However, during the early stages of the Project, substantial delay in approving the award of contracts and release of government counterpart funds delayed the progress of work. 40. Among the four EAs, the performance of LGED (parts A and E), RHD (part B), and BWDB (part D) was highly satisfactory. LGED effectively used the loan savings from other components to undertake 42 additional subprojects. Allegations of procurement corruption (para. 35) do not undermine its performance. Although RHD disbursements were slow at times, mainly because of slower than expected progress under several bridge projects, 40 on the whole, RHD did well and, despite the initial delays in the awarding of contracts, completed all works by the loan closing date of 31 July 2007. The performance of BWDB (part D) was also highly satisfactory, particularly in managing the highly technical and time-based river-borne structures, although there were minor start-up delays. On the other hand, the performance of BR (part C) 39 Slow progress led LGED to cancel 17 subprojects. 40 Some bridge projects were canceled as they could not be completed within the loan period.