small-scale water resources development sector project

8/2/2019 Small-Scale Water Resources Development Sector Project

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ASIAN DEVELOPMENT BANKOperations Evaluation Department

PROJECT PERFORMANCE EVALUATION REPORT

IN

BANGLADESH

In this electronic file, the report is followed by Managements response.


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erformance Evaluation ReP port

Operations Evaluation Department

Project Number: 25312Loan Number: 1381-BAN(SF)December 2007

BAN: Small-Scale Water Resources DevelopmentSector Project


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CURRENCY EQUIVALENTS(as of 31 May 2007)

Currency Unit Taka (Tk)Tk1.00 = $0.0145

$1.00 = Tk69.01

ABBREVIATIONS

ADB Asian Development BankBME benefit monitoring and evaluationDOC Department of CooperativesDR drainageEA executing agencyEME effect monitoring and evaluationEIRR economic internal rate of return

FCD flood control and drainageFFYP Fourth Five-Year Development PlanGOB Government of BangladeshGON Government of the Netherlandsha hectareIFAD International Fund for Agricultural DevelopmentIWRMU Integrated Water Resources Management UnitJFPR Japan Fund for Poverty Reductionkm kilometerLGED Local Government Engineering DepartmentLLT Livelihood Trust FundMOU memorandum of understanding

NGO nongovernment organizationNWP National Water PlanO&M operation and maintenanceOED Operations Evaluation DepartmentOEM operations evaluation missionPCR project completion reportPMO project management officeSSWRDP-2 Second Small-Scale Water Resources Development Sector ProjectSSWRDSP Small-Scale Water Resources Development Sector ProjectTA technical assistanceWC water conservationWMCA water management cooperative association

NOTES

(i) The fiscal year (FY) of the Government of Bangladesh and its agencies ends on30 June. FY before a calendar year denotes the year in which the fiscal yearends, e.g., FY2000 ends on 30 June 2000.

(ii) In this report, "$" refers to US dollars.


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Key Words

bangladesh water resources, water resources development, beneficiary participation, small-scale water resources, water management cooperative associations, development evaluation,development effectiveness


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Officer-in-ChargeDirector R.K. Leonard, Division 1, OED

Team leader A. Anabo, Senior Evaluation Officer, Division 1, OED

Team member O. Badiola, Senior Operations Evaluation Assistant, Division 1, OED

Operations Evaluation Department,PE-709


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CONTENTS

Page

BASIC DATA iiiEXECUTIVE SUMMARY vMAP ixI. INTRODUCTION 1

A. Evaluation Purpose and Process 1B. Expected Results 3

II. DESIGN AND IMPLEMENTATION 3A. Formulation 3B. Rationale 4C. Cost, Financing, and Executing Arrangements 4D. Procurement, Construction, and Scheduling 6E. Design Changes 6F. Outputs 7G. Consultants 12H. Loan Covenants 12I. Policy Framework 12

III. PERFORMANCE ASSESSMENT 13IV. OTHER ASSESSMENTS 18

A. Impact on Institutions and Policy 18B. Socioeconomic Impact 18C. Environmental Impact 19D. Asian Development Bank Performance 19E. Borrower and Executing Agency Performance 20F. Technical Assistance 20

V. ISSUES, LESSONS, AND FOLLOW-UP ACTIONS 20A. Issues 20B. Lessons 22C. Follow-Up Actions 23

The guidelines formally adopted by the Operations Evaluation Department (OED) on avoidingconflict of interest in its independent evaluations were observed in the preparation of this report.Peter Mawson and M.A. Quassem were engaged as consultants to assist in the preparation ofthis report. To the knowledge of the management of OED, there were no conflicts of interest ofthe persons preparing, reviewing, or approving this report.


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APPENDIXES1. Project Cost by Type of Expenditure 252. Summary of Infrastructure Completed 263. Households, Beneficiaries, and WMCA Membership of Sample Subprojects 274. Members Financial Position (Own Capital) from Sample WMCAs 285. Status of Microcredit: Sample Subprojects 296. Checklist of Sample Subprojects 307. Selected Sample Case Studies 318. Impact on Fisheries 379. Economic and Financial Reevaluation 38

Attachment: Managements Response


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BASIC DATA

Small-Scale Water Resources Development Sector Project (Loan 1381-BAN[SF])

Project Preparation/Institution BuildingTA

No.

Grant/Technical

Assistance Name

Type1 Person-

Months

Amount Approval

Date1817 Small-Scale Water

Resources DevelopmentPPTA 37 $500,000 23 Dec 1992

2564 Beneficiary Participationand Project Management

ADTA(grant)

675 $6,800,000 2 May 1996

2564 Beneficiary Participationand Project Management(Supplementary)

ADTA(grant)

$200,000 14 Feb 2001

Key Project Data ($ million)Per ADB Loan

Documents ActualTotal Project Cost 66.0 51.2

Foreign Exchange Cost 16.5 23.3ADB Loan Amount/Utilization 32.02 27.33

ADB Loan Amount/Cancellation 0.74

Amount of CofinancingIFAD 10.4 8.8Netherlands 6.8 5.9

Key Dates Expected ActualAppraisal 220 Apr 1995Loan Negotiations 1517 Aug 1995Board Approval 26 Sep 1995Loan Agreement 17 Oct 1995

Loan Effectivity 15 Jan 1996 8 Apr 1996Completion 30 Jun 2002 30 Jun 2002Loan Closing 31 Dec 2002 15 Jan 2003Months (Effectiveness to Completion) 78 74

Borrower Government of Bangladesh

Executing Agency Local Government Engineering Department

Mission DataType of Mission No. of Missions Person-DaysFact-Finding 1 110

Appraisal 1 94Inception 1 20Project Administration

Special Project Administration (SPA) 3 42Review 2 29

1ADTA = advisory technical assistance, PPTA = project preparatory technical assistance.

2Equivalent to SDR21,085,000 at the time of loan approval.

3Equivalent to SDR20,593,841 at the time of loan closing.

4Equivalent to SDR491,159 at the time of loan cancellation.


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Midterm Review 1 42Disbursement 1 8Joint SPA 1 7Joint Review 4 66

Project Completion Review 1 72Operations Evaluation5 1 48

5The Operations Evaluation Mission comprised Agnes Anabo, Senior Evaluation Officer (Mission Leader), PeterMawson (international consultant), and M.A. Quassem (domestic consultant).


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EXECUTIVE SUMMARY

In December 1992, the Asian Development Bank (ADB) approved project preparatorytechnical assistance (TA) to the Government of Bangladesh for the formulation of the Small-Scale Water Resources Development Sector Project. A loan amounting to $32.0 million wasapproved in September 1995 to finance the Project, whose expected outcome was a

sustainable increase in agricultural production and income for smallholder farms in thesubproject areas, which in turn was expected to have an impact on poverty reduction. Theseareas are located in western Bangladesh (where the standard of living was much lower thanthat in the eastern half). This outcome was to be achieved through the projects three outputs: (i)Part A: Beneficiary Participation and Water Management Association Development, (ii) Part B:Development of Small-Scale Water Control Systems, and (iii) Part C: Institutional Support forSmall-Scale Water Resources Development. Advisory TA1 provided by the Government of theNetherlands (GON) was administered by ADB. The TA was expected to help the LocalGovernment Engineering Department (LGED), the executing agency, implement the Projectwith beneficiary participation in the subprojects and to build the capacity of LGED staff andwater management cooperative associations (WMCAs). In addition to the GON, theInternational Fund for Agricultural Development was also to cofinance the Project.

Almost 5 years after the projects completion (June 2002), the Operations EvaluationDepartment fielded an operations evaluation mission (OEM) to Bangladesh from 20 May to 4June 2007 to evaluate the Project in terms of its relevance, effectiveness, efficiency,sustainability, and other impacts. The OEM visited 22 of 267 subprojects that had been handedover to WMCAs, selected in consultation with LGED.

The Project was completed on 30 June 2002 as expected at appraisal. At that time, atotal of 280 subprojects had been carried out, 273 of which were completed and operating.These subprojects were mainly a combination of flood control and drainage (FCD) (58%),drainage (17%), and water conservation (WC) (16%). The other subprojects were either (i) acombination of drainage and WC, (ii) a combination of drainage and irrigation structures, or (iii)

command area development. At the time of project completion, seven subprojects had not beencompleted due to various reasons including objections from stakeholders, legal complications,and faulty design. At the time of evaluation, 267 subprojects had been handed over to WMCAs,with the remaining 13 subprojects being fine-tuned. Total actual project cost amounted to $51.2million, 29% lower than anticipated at the time of appraisal. The lower than expected aggregateactual project cost can be traced to the lower than anticipated expenditures for training, servicevehicles, and equipment (which did not have a significant impact on the Projects outcomes).

A WMCA was established for each of the subprojects. In general, the beneficiaries ofsubprojects were moderately to highly motivated and interested in the WMCAs, except in twosample subprojects (Kumarer Beel FCD and Dighapatia FCD subprojects). Such interest couldbe traced partly to their sense of ownership, which in turn was to some extent a result of the

beneficiaries involvement in planning, implementation, and operation and maintenance (O&M).

The Project is rated successful. The Project was (i) highly relevant to the Governmentsand ADBs objectives and strategies at the time of appraisal and operations evaluation, (ii)effective in achieving its outcome of increasing agricultural production in the subproject areas,

1TA 2564-BAN: Beneficiary Participation and Project Management. This TA was attached to Loan 1381-BAN(SF):Small-Scale Water Resources Development Sector Project. On 2 May 1996, the Government of the Netherlands(GON) provided $6.8 million. A supplementary amount of $0.2 million was given by the GON on 14 February 2001.


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and (iii) efficient in terms of resource utilization. In the sample subprojects, the intensification ofagricultural production has increased the demand for farm laborgenerating more employmentfor the poor and landless. Better household incomes make it easier for poor households to takeadvantage of education, health, and other social services in their villages. In addition, theProject has helped improve the access of the rural poor to credit through the microcreditprogram of the WMCAs. Another important result of the Project is the institutionalization of

beneficiary participation in small-scale water projects. The Project has had no significantadverse environmental impacts. The TA was successful, as it was able to assist LGED incompleting 273 subprojects, 267 of which have been turned over to their respective WMCAs.More importantly, the TA developed a process for beneficiary participation, which LGED hasadopted as an integral part of the subproject cycle.

At this point, sustainability is the key issue facing the subprojects. Long-termsustainability is contingent on a number of factors:

(i) no severe flooding disasters; based on the estimates prepared by LGED, thedamage caused by the August 2007 floods to 73 of the 280 subprojects valued ataround $880,000 was relatively small compared with the entire project cost; the

Government (through LGEDs Integrated Water Resources Management Unit[IWRMU]) has a system in place to support subprojects that are damaged bymajor floods.

(ii) a more sustainable arrangement for training and O&M purposes, such as arevolving fund, instead of utilizing funds from the Second Small-Scale WaterResources Development Sector Project;

(iii) long-term monitoring by LGED to ensure that infrastructure is being properlymaintained and that beneficiaries have the skills required to maintain it;

(iv) long-term government support for the rehabilitation of subprojects after abnormaldamage due to flooding, etc.;

(v) long-term support from associated agencies and departments responsible forproviding technical services and support;

(vi) greater participation of beneficiaries in the funding of local, small-scaleinfrastructure maintenance; and

(vii) continued prevalence of a common goal among the various stakeholders.

This Project has demonstrated that, in general, the best WMCAs have the followingcharacteristics: (i) subprojects having direct and tangible benefits, (ii) good and strong WMCAleadership, and (iii) support from proactive LGED and project staff. The OEM also noted that theWMCAs with good income-generating activities are better positioned to conduct O&M activities.However, some WMCAs have the tendency to focus more on income-generating activities thanO&M activities.

Sustainability is likely, but to help ensure the sustainability of the Projects benefits, a

number of follow-up actions are suggested:

(i) Throughout the OEMs subproject visits, the need for training was apparent fromdiscussions with members of the WMCAs. WMCA members can be trainedinitially by utilizing funds from the Second Small-Scale Water ResourcesDevelopment Sector Project. However, a more sustainable training programneeds to be put in place by the IWRMU as soon as possible.

(ii) By 2008, training specifically for the WMCAs of handed-over subprojects shouldbe included in regular training programs of the Department of Agricultural


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Extension, Department of Fisheries, Department of Environment, andDepartment of Cooperatives.

(iii) LGED needs to continue undertaking long-term monitoring of and support for themaintenance of the physical infrastructure of completed subprojects. To ensurethis, the IWRMU should be provided with adequate support and training.

R. Keith LeonardOfficer-in-ChargeOperations Evaluation Department


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B a y o f B e n g a l

GangesR.

PadmaR.

MeghnaR.

JamunaR.

Pussur

R.

KushiyaraR.

BrahmaputraR

.

Dhaka Metropolitan Area

Project Area

National Capital

Subproject Visited

River

District Boundary

Division Boundary

International Boundary

Boundaries are not necessarily authoritative.

B A N G L A D E S H

SMALL-SCALE WATER RESOURCES

DEVELOPMENT SECTOR PROJECT

(as implemented)

Kilometers

0 25 50 75

N

07-3684 RM

89 00'Eo

89 00'Eo

91 45'Eo

91 45'Eo

22 00'No 22 00'No

25 30'No 25 30'No

DHAKA

R A J S H A H I

S Y L H E T

D H A K A

K H U L N A

CHI TTAGONG

B A R I S A L

INDIA

INDIA

M Y A N M A R

Bhola

Noakhali

Feni

Narail

Bandarban

Rangamati

Khagrachari

Patuakhali

Barguna

BagerhatSatkhira

Lakshmipur

ChandpurShariatpur

Madaripur

Gopalganj

Meherpur

Chuadanga

Jhenaidah

Magura

Manikganj

Dhaka

ComillaFaridpur

Rajbari

Pabna

Kushtia

AshuganjNarshingdi

Moulvibazar

Habiganj

Sunamganj

Kishoreganj

Narayanganj

Natore

Mymensingh

Tangail

Sirajganj

Netrokona

Nawabganj

Joypurhat

BograJamalpur

Sherpur

Naogaon

Dinajpur

Gaibandha

Panchagarh

ThakurgaonNilphamari

Rangpur

Lalmonirhat

Kurigram

Jessore

Pirojpur

Munshiganj

Gazipur

Chittagong

Cox's Bazar

Barisal

Khulna

Sylhet

Rajshahi


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I. INTRODUCTION

A. Evaluation Purpose and Process

1. The Asian Development Banks (ADB) Small-Scale Water Resources DevelopmentSector Project1 was approved in September 1995 to assist the Government of Bangladesh

(GOB) in increasing productivity in the agriculture sector. Almost 5 years after the Projectscompletion (June 2002), the Operations Evaluation Department (OED) fielded an operationsevaluation mission (OEM) to Bangladesh from 19 May to 4 June 2007 to evaluate the Project interms of its relevance, effectiveness, efficiency, sustainability, and other impacts. The OEMvisited 222 of 2673 subprojects that had been handed over to water management cooperativeassociations (WMCAs).

2. The sample subprojects were selected by the OEM, in consultation with the executingagency (EA), the Local Government Engineering Department (LGED). The selection was basedon the following criteria:

(i) All types of subprojects (command area development, drainage [DR], flood

control and drainage [FCD], and water conservation [WC]) were represented.(ii) As much as possible, the sample subprojectsselected from the performance

distribution of all subprojectsrepresented each of the four categories of theexisting grading system of the Integrated Water Resources Management Unit(IWRMU) of LGED (Table 1). This system is based on a combination of (a) theamount of capital raised by the subproject, and (b) the amount of funds raisedand used for operation and maintenance (O&M) purposes. 4 There are fourcategories: A = well functioning, B = moderately functioning, C = poorlyfunctioning, and D = very poorly functioning.

(iii) Given the limited time of the OEM in the field, the location of the subprojects wasanother criterion. Nevertheless, the OEM opted to visit subprojects in districtsacross most of the project area in order to have a more rounded picture of the

Projects impact (instead of concentrating on only a few districts and therebysaving on travel time).

1ADB. 1995. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to thePeoples Republic of Bangladesh for the Small-Scale Water Resources Development Sector Project. Manila.

2These subprojects were located in the following districts in western Bangladesh: (i) Chuadanga, (ii) Jessore,

(iii) Khulna, (iv) Gopalgonj, (v) Rajbari, (vi) Faridpur, (vii) Bogra, (viii) Rangpur, (ix) Nilphamari, (x) Dinajpur, (xi)Chapai Nawabganj, and (xii) Rajshahi.

3Based on ADBs project completion report, 280 subprojects had been carried out at the time of project completion.Of the 280, 273 had been completed and were operating while 7 had not completed due to various reasonsincluding objections from stakeholders, legal complications, and faulty design. At the time of evaluation, 267subprojects had been handed over to WMCAs. The remaining 13 subprojects were being fine tuned.

4The grading system is based on the ability of the WMCAs to raise financial resources, on the assumption thatbeing able to raise sufficient financial resources implies that O&M is being implemented and the system istherefore providing the intended benefits through improved water management and control. However, this fails totake account of significant labor contributions from WMCA members or of any other nonfinancial factors that alsooften contribute significantly to WMCA and subproject success.


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Table 1: Grading System of the Integrated Water Resources Management UnitCategory DescriptionA = Capital increased by Tk50,000 or above A = Fund raised at least 50% of contribution

and utilization at least 50% of collectionB = Capital increased by Tk10,000 or abovebut below Tk50,000

B = Fund raised at least 50% of contributionand utilization below 50% but at least 30% of

collectionC = Capital increased by Tk1,000 or above butbelow Tk10,000

C = Fund raised below 50% of contributionand utilization less then 50% but at least 20%of collection

D = Capital increased by below Tk1,000 D = Fund raised below 50% of contributionand utilization below 20% of collection

Source: Integrated Water Resources Management Unit of the Local Government Engineering Department.

3. The OEM prepared this report in accordance with OED guidelines.5 This evaluationdraws upon a review of project documents as well as the follow-on project 6 documents; otherrelevant studies; and discussions with ADB staff, concerned officials of government agencies,and WMCAs. It incorporates the results of the OEM's field visits to sample subprojects, which

involved visual inspections of subproject facilities and discussions with officers7

and members ofWMCAs as well as upazila8 and district officers9 of LGED. A copy of the draft evaluation reportwas shared with the South Asia Regional Department and the GOB through the Ministry ofFinance, and the EA. Their views were incorporated where relevant.

4. The project completion report (PCR), which was circulated to the Board of Directors inJuly 2004, assessed the Project as highly relevant, efficacious (i.e., effective), efficient, likelysustainable, and with significant institutional and other development impacts. Overall, the PCRrated the Project as successful. The PCR assessed the project design as highly relevant to theGOBs and ADBs objective of reducing poverty. The Project was also relevant to ADBsoperational strategy for the agriculture sector. It was efficacious (i.e., effective), as it achieved itslong-term objective of increasing productivity in agriculture through a combination of reduced

waterlogging during the monsoon season and improved irrigation during the dry season. Thefinancial internal rates of return that the PCR calculated for 15 selected subprojects ranged from23.2% to 38.6%. This compared favorably with the appraisal estimates, which ranged from 9.8%to 30.7%. The sustainability of the Project was believed to be further strengthened when thesubprojects would be fully developed.

5. Advisory technical assistance (TA)10 provided by the Government of the Netherlands(GON) was administered by ADB. The TA was expected to help LGED implement the Projectwith beneficiary participation in the subprojects and to build the capacity of LGED staff and ofWMCAs. The PCR rated the TA satisfactory (i.e., successful). Paragraph 36 of the PCRstates, Although the TA was instrumental in the successful implementation of the Project,

5ADB. 2006. Guidelines for Preparing Performance Evaluation Reports for Public Sector Operations. Manila.

6ADB. 2001. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to thePeoples Republic of Bangladesh for the Second Small-Scale Water Resources Development Sector Project.Manila.

7Chairman, vice-chairman, secretary, and treasurer.

8Subdistrict.

9Engineers, community organizers, socioeconomists, sociologists, and agricultural facilitators.

10TA 2564-BAN: Beneficiary Participation and Project Management. This TA was attached to Loan 1381-BAN(SF):Small-Scale Water Resources Development Sector Project. On 2 May 1996, the GON provided $6.8 million. Asupplementary amount of $0.2 million was given on 14 February 2001.


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strengthening of LGED was less than expected as manifested from the provision of a similar TAunder the Second Small-Scale Water Resources Sector Improvement Project.

B. Expected Results

6. The Projects expected outcome was a sustainable increase in agricultural production

and income for smallholder farms in the subproject areas, which are located in westernBangladesh11 (where the standard of living was much lower than that in the eastern half). Thiswas to be achieved through the Projects three outputs: (i) Part A: Beneficiary Participation andWater Management Association Development, (ii) Part B: Development of Small-Scale WaterControl Systems, and (iii) Part C: Institutional Support for Small-Scale Water ResourcesDevelopment. The subprojects were to be selected based on the number of poor farmers to bebenefited (more than 50% of the beneficiary farmers should be small or marginal farmers 12).The Project was to support the establishment of sustainable O&M systems through beneficiaryparticipation. Water management associations were to be formed in each of the subprojects andwere to be involved in the identification, design, implementation, and O&M of their respectivesubprojects. Cropping intensity was expected to increase from 164% to 175%, with anincremental cropped area of 15,000 hectares (ha). Higher crop productivity was to be achieved

through the Projects removal of the constraints imposed by inadequate flood protection,waterlogging, and limited irrigation. The Project was expected to generate employmentopportunities equivalent to 3.7 million person-days per annum as a result of the implementationphase and the increase in agricultural production. In the long term, the Project was expected tocontribute to sustained agricultural growth and poverty reduction.

II. DESIGN AND IMPLEMENTATION

A. Formulation

7. In December 1992, ADB approved preparatory TA,13 which prepared detailed feasibilitystudies of 11 sample subprojects scattered throughout the western region of Bangladesh.

Based on the results, a fact-finding mission visited the country in October/November 1994. Thiswas followed by a joint appraisal mission (ADB, the International Fund for AgriculturalDevelopment [IFAD], and the GON) in April 1995. These missions examined the technical andeconomic viability of the Project, assessed its environmental and social implications, anddiscussed relevant policy issues with concerned Bangladesh government agencies. Althoughthe GOB initially requested nationwide coverage for the Project, this request was eventuallyreduced to half, i.e., the western half, which was covered by the feasibility study.

8. The policy environment within the water resources sector was conducive to rapidexpansion of minor irrigation and sustainability of projects through beneficiary participation. Areview of the technical capacity of LGED at the national, district, and upazila levels showed thatthe subprojects could be formulated, appraised, and implemented in a timely fashion at

acceptable technical standards. These, plus capacity-building TA

(footnote 10) together with theloan supported a sector-type approach. At the time of appraisal, LGED had been successfully

11This was stated in para. 32 of the report and recommendation of the President. The project framework (now calledthe design and monitoring framework) was less specific in its outcome (purpose).

12Small-scale and marginal farmers are classified by their cultivable landholdings. Small-scale farmers hold less than1.0 ha of cultivable land, and marginal farmers, less than 0.25 ha.

13ADB. 1992. Technical Assistance to the Peoples Republic of Bangladesh for the Small-Scale Water ResourcesDevelopment Project. Manila.


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implementing many rural development projects, including in small-scale water resourcesdevelopment. The foregoing considerations justified the sector lending modality of the Project.

9. Development partners, specifically IFAD and the GON, participated from the formulationstage. IFAD participated during the loan fact-finding and appraisal missions, and the GON 14during the appraisal mission.15

B. Rationale

10. Bangladesh has one of the lowest per capita incomes 16 in Asia. Although animprovement from 1991,17 around 49.8% of the population lived below the poverty line in 2000.The country is still largely rural, with more than 50% of its labor force employed in theagriculture sector, which has historically accounted for the largest share of the countrys grossdomestic product. Nonetheless, as the country develops, the relative contribution of theagriculture sector to the economy is gradually declining as other sectors such as manufacturing,trade, and services gain more importance. From 28.7% in 1990, the agriculture sectors share ofgross domestic product declined to 21.1% in 2005.

11. The productivity of land and labor is constrained by droughts during the dry season andfloods during the monsoon season. The GOB, aware of these constraints and the potential forincreasing agricultural production, highlighted in the Fourth Five-Year Development Plan (FFYP,FY 19911995) the need for improving and upgrading minor irrigation schemes, with small-scale flood control and drainage schemes as necessary components. The FFYP alsoemphasized the creation of an appropriate institutional framework for planning, investment, andO&M of water resources development schemes on a self-sustained basis. Priority was given tocost-effective and quick gestation investments to rehabilitate and upgrade existing waterresources infrastructure.

12. The Project is in the western half of the country, with the western area defined as thearea west of the Jamuna, Padma, and Lower Meghna rivers. Until the completion of the Jamuna

Bridge, communications between these areas and the major centers of Dhaka and Chittagongwere inhibited by the rivers.

13. At the time of evaluation, the rationale for this Project remained sound, given the stillrelatively high dependence of the Bangladesh economy on agriculture, and the incidence ofpoverty particularly in the rural areas.

C. Cost, Financing, and Executing Arrangements

14. At the time of appraisal, total project cost was expected to reach $66.0 million, of which$16.5 million was in foreign currency. ADB was to finance around 49% of the entire project costthrough a $32.0 million loan from its Special Funds resources. IFAD was expected to jointly

cofinance the Project by contributing $10.4 million, while the GON was to provide a TA grant of$6.8 million for beneficiary participation and project management (which was to be administered

14The GON was contacted for possible joint financing only during the loan fact-finding mission.

15Given the cofinancing, OED approached both IFAD and the GON regarding the conduct of a joint evaluation.However, neither was willing/able to consider this.

16In 1995, the per capita gross national product of Bangladesh was around $325, compared with Indias $391.In 2004, the per capita gross national income of Bangladesh was $440 compared with Indias $620.

17In 1991, 51.6% of the population had income of less than US$1 per day. Source: ADB. 2006. Key Indicators 2006:Measuring Policy Effectiveness in Health and Education. Manila.


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by ADB). IFAD was to finance 25% of the same components as ADB, while the GOB was tocontribute $13.3 million equivalent in local currency, and the beneficiaries around $3.5 millionequivalent in the form of land and cash contributions.

15. Total actual project cost amounted to $51.2 million, 28.8% lower than anticipated at thetime of appraisal (Appendix 1). Foreign currency costs accounted for almost 46% of the entire

project cost, compared with the 25% expected share at the time of approval. The lower thanexpected aggregate actual project cost can be traced to the lower than anticipated expendituresfor training, service vehicles, and equipment. Training activities during the first few years ofproject implementation were minimal due to the late fielding18 of consultants (who were tosupport this activity), and the length of time needed to organize training activities (including thepreparation of training materials and other logistical requirements). A smaller quantity ofconstruction equipment than expected was procured, resulting in actual service vehicles andequipment cost lower than budgeted. At the time of appraisal, 7.2% of the entire project costwas allocated for benefit monitoring. However, at project completion, the actual cost incurred forbenefit monitoring amounted to only $175,000, less than 0.5% of the total project cost, despiteall benefit monitoring and evaluation (BME) activities being carried out generally as planned.Other expenses incurred for BME purposes (such as the annual effect monitoring and

evaluation [EME] reports, which were largely prepared by the TA consultants) were recordedunder the TA grant of the GON.

16. The substantially lower than expected costs of the above activities were partly offset bythe higher than expected outlay for civil works (including land acquisition), which accounted for70.3% of the total actual project cost. In spite of the smaller number of completed subprojects(280 versus 400 planned at appraisal), civil works expenditures went up by 10%. This can beattributed to the higher than estimated subproject unit costs.

17. Of the $32.0 million ADB loan, $27.3 million was disbursed (with $699,000 eventuallycancelled). IFADs contribution amounted to $8.8 million; the GONs, $5.9 million; the GOBs,$8.5 million; and the beneficiaries, $0.7 million.

18. The Project was implemented generally as planned, with LGED as the EA. A projectmanagement office (PMO) coordinated and directed the activities related to projectimplementation. The PMO, which was headed by a senior executive engineer of LGED, whofunctioned as the full-time project director, had the full authority to execute the Project and liaisewith ADB. The PMO was supported by consultants from the attached TA and a design cellstaffed with senior experts directly contracted by LGED. Although there were initial difficultieswith monitoring, coordination, and quality control, these were overcome, and the PMOperformed its role satisfactorily. In addition, at the request of the midterm review mission, LGEDagreed to avoid frequent transfer of project staff, which helped ensure relatively smoothimplementation. At the time of the OEM, some of the PMO staff were still with LGED. TheProject Steering Committee, which was composed of representatives from 13 government

agencies,19

provided policy guidelines (in addition to reviewing and monitoring the Project). ThisCommittee, although expected to meet regularly (para. 42), met only five times as needed,

18Signing of the TA (which was to finance the recruitment of consultants) letter of agreement was delayed, resultingin a corresponding delay in the recruitment of consultants.

19(i) Ministry of Water Resources, (ii) Bangladesh Water Development Board, (iii) Water Resources PlanningOrganization, (iv) Ministry of Agriculture, (v) Department of Agricultural Extension, (vi) NGO Affairs Bureau, (vii)Department of Womens Affairs, (viii) Bangladesh Rural Development Board, (ix) Department of Fisheries, (x)Department of Environment, (xi) Economic Relations Division, (xii) Implementation Monitoring and EvaluationDivision, and (xiii) Planning Commission.


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since most of the issues arising during implementation were already addressed at the PMOlevel. Coordination and cooperation among a number of government agencies, althoughattained, were not easy.

D. Procurement, Construction, and Scheduling

19. A large number of contractors (at least 400 contract packages20) had to be contracted,resulting in delays. Around 200 small, district-based contractors were initially shortlisted. Eachyear, these contractors had the opportunity to bid on new subprojects within their respectivedistricts. The average time elapsed from the invitation of bids to the awarding of contracts wasaround 2.5 months, mainly because of the large number of tenders that had to be processed atthe central level. After the 2001 elections, the change in government resulted in the cancellationor delay of some contracts due to the political affiliation of contractors. Some weaknesses werenoted in the engagement of some contractors, initially including the awarding of contracts toinexperienced contractors. This had an impact on the quality of some of the structures duringthe first part of the Project. Stronger oversight through the attached TA was put in place to bringconstruction quality to an acceptable level. The oversight consisted of four quality controlengineers, whose tasks included (i) visiting construction sites at critical times during the

construction phase, and (ii) signing off on final bills to certify that the construction quality wasacceptable. With a few exceptions, the performance of the contractors was generallysatisfactory. As assessed by the PCR, the performance of the suppliers, as well as the quality ofthe goods supplied, was satisfactory.

20. The Project was completed by 30 June 2002 as envisioned at appraisal. The loan wasclosed on 15 January 2003, only a few days after the expected closing date of 31 December2002. The original schedule was ambitious, considering the amount of work required to (i)develop the capacity and experience within LGED to implement this type of work, 21 (ii) developsystems that promoted beneficiary participation, and (iii) establish functional and sustainableWMCAs. Initial delays were also experienced with regard to training (para. 15). Nonetheless,the Project was completed as scheduled.

E. Design Changes

21. Originally, the use of participatory rural appraisals was not envisaged. However, duringproject inception, these were introduced to provide for a degree of independence in assessingselected social and environmental parameters. Staff were recruited from the fivenongovernment organizations (NGOs) originally contracted, and these personnel were trained

jointly by the advisory TA staff and a training institute in Comilla.

22. Under the original project concept, LGED executive engineers, who head each districtoffice, were expected to prepare subproject appraisal reports, including a socioeconomic studyand summary initial environment examination for review by the PMO. However, this was

impractical, considering the range of investment activities in different sectors being managed byexecutive engineers, which leave them with very little time for the preparation of the subprojectappraisal reports. The analysis required to determine subproject feasibility necessitated sometechnical skills. A formidable amount of training would have been required to equip the 37executive engineers and 220 upazila engineers for this task. Considering that each of these

20One subproject could have more than one contract package. However, under the follow-on project, there is onlyone contract package for each subproject.

21This was the first small-scale water resources development project to be implemented by LGED using theparticipatory approach and WMCAs.


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engineers was to handle only a relatively limited number of subprojects over more than 5 years,the impact of the proposed training was expected to be limited. Thus, the PMO contracted sixlocal consultants to prepare the subproject appraisal reports.

F. Outputs

23. The Project had three components: (i)Development of Small-Scale Water ControlSystems, (ii) Institutional Support for Small-Scale Water Resources Development, and (iii)Beneficiary Participation and WaterManagement Association Development.

1. Development of Small-ScaleWater Control Systems

a. Infrastructure Facilities

24. At appraisal, a total of 400 subprojectswere expected to be undertaken. At projectcompletion, 280 had been carried out, with a

total of 273 subprojects completed andoperating. 22 The original target of 400subprojects was on the high side, consideringthe magnitude of the work involved (i.e.,building the capability of LGED, developingsystems that promote beneficiary participation,establishing functional and sustainable localinstitutions, and ensuring the maintenance of a

poverty focus during implementation). Thecompleted subprojects were mainly acombination of FCD (58%), DR (17%), and WC(16%). The other subprojects were either (i) acombination of DR and WC, (ii) a combinationof DR and irrigation structures, or (iii) commandarea development. Actual civil works weredistributed over 37 districts in westernBangladesh, with Barisal accounting for the largest share of 6.8%, followed by Faridpur (4.6%)and Pirojpur (4.3%). Eighteen (or 95%) of the structures in Barisal were for FCD. On the whole,civil works involved largely the installation of regulators, which accounted for more than 60% ofthe total cost (Appendix 2).

Baranurpur Drainage and Water ConservationSub ro ect

Purba Mohanpur Flood Control and DrainageSub ro ect

25. The sample subprojects involved the construction of embankments, flushing sluices, andregulators, and the reexcavation of canals, among others. The quality of work was generallygood. Reexcavation and maintenance works carried out by the labor contracting societies wereoften of better quality than that seen in many cases done by general contractors.

22As of the time of the OEM, 13 more subprojects (out of 280) were being fine tuned prior to turnover to therespective WMCAs so that the latter could reap the anticipated benefits.


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26. The beneficiaries find the structures useful. Planning and design of the projects havegenerally been good except in a few cases (5%). For instance, the OEM observed in the PurbaMohanpur FCD subproject (Sadar Upazila in Dinajpur District) that an additional gate had beenadded to the regulator, 3 years after the initial construction. At the time of subproject planning,the beneficiaries pointed out the need for a bigger regulator than the planners opted for,resulting in the need for fine tuning the subproject.23

27. The subprojects have generated both direct and indirect benefits. Direct benefitsincluded improvements in small-scale water resources management such as flood control andrelief from drainage congestion resulting in increased crop production and opportunities for fishculture. Indirect benefits were derived mainly from microcredit activities, which included fruit treeplantations, poultry raising, kitchen gardening, and livestock rearing and fattening. Thesubprojects also generated employment opportunities for the poor, and in some cases, watertransportation. Through better control of flooding, drainage, and other aspects of watermanagement in the subproject areas, the Project has established safe conditions for increasedinvestment by households in both agricultural and nonagricultural activities. Beneficiaries aregenerally convinced and sometimes enthusiastic about subproject benefits. Even where theWMCAs are weak or not functioning properly, local people still manage to derive benefits from

the infrastructure.24

b. Operation and Maintenance

28. Nineteen of the 22 sample subprojects visited by the OEM have active O&Msubcommittees that are responsible for organizing O&M according to the decisions of theWMCA management committees.

29. During the initial 2 years after handing over a subproject to a WMCA, a joint walkthrough the subproject was conducted by LGED field staff and the WMCA to identify routine andmajor maintenance works. An O&M cost estimate was made on this basis. While thebeneficiaries (WMCAs) are fully responsible for routine maintenance, the cost of major

maintenance is divided between the Government and the WMCA. Cost sharing by beneficiarieshas varied. For the cost of maintaining the embankment and other works less than or equal toTk100,000, a WMCA normally contributes 10%; for those more than Tk100,000, 5%. Forreexcavation of canals, the WMCA has to share 50% of the total cost. The WMCAs contributionfor the maintenance works come in the form of cash or community labor equivalent to therequired cash.25 Beneficiaries contribute by either working with the community or providing hiredlabor. LGED sets aside a fund for annual major maintenance works for subprojects that have

23According to subproject beneficiaries, 3 years of crops have been lost in the interim because of the regulatorsinsufficient capacity.

24The risk in these cases is that, if the infrastructure is not properly maintained by the WMCA, the benefits of thesubproject will decline over time.

25Under the follow-on project, the beneficiaries are required to deposit (in a bank account) a sum equivalent to thecost of 1 year of O&M prior to construction of the subproject infrastructure. This amount is intended to cover thesubprojects O&M cost for the first year. The contribution was set at 3% of the value of the earthworks, and 1.5% ofthe value of concrete structures. This requirement is an indicator of the beneficiaries interest in the subproject andtheir capability to address future O&M needs.


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been handed over. LGED provides these funds to different subprojects based on the fulfillmentof certain criteria.26

30. O&M of the sample subprojects was found to be satisfactory except in three cases: Inthe Charolkathi Beel FCD subproject, a section of the reexcavated canal was not maintainedproperly. In the Moranadi WC subproject, the outfall of the flushing sluice was not maintained

properly and is used for fishingwhich is detrimental to the structure. The O&M of the DighapatiFCD subproject is poor due to disputes among the households and the consequentnonfunctioning of the WMCA.

2. Institutional Support for Small-Scale Water Resources Development

31. The Project provided support to LGEDs project management capabilities in small-scalewater resources development at the national, district, and upazila levels. Various trainingprograms were conducted, including those related to subproject preparation, institutionaldevelopment, engineering training, and postsubproject activities (such as EME, genderawareness, and O&M). A list of the major training and institutional strengthening activitiescarried out under the Project can be found in Appendix 1 of the PCR. 27 Forty-six senior LGED

staff (for a total of 650 person-days) went on a study tour to learn more about participatoryplanning and participatory water resources development. A large number of the trained staff arestill with the organization. In addition to LGED staff at all levels, NGO staff, constructioncontractors, and selected members of local government agencies benefited from the extensivetraining provided under the Project. Apart from these training programs, consulting services,study tours, selected studies, and a review of the bylaws, LGED also provided institutionalsupport to WMCAs. Vehicles and equipment purchased under the Project are still useful.

3. Beneficiary Participation and Water Management Association Development

32. The WMCAs established for each subproject were formed under the CooperativeSociety Act of Bangladesh28 and follow the Cooperative Societys rules for institutional structure,

management, maintenance of accounts and records, and annual auditing of accounts.

33. Usually, the general members of the WMCAs include both subproject beneficiaries andnonbeneficiaries.29 WMCAs ranged from 53 to 1,804 members, with an average of 381. Of 22WMCAs30 visited by the OEM, 10 had membership above 100% of the beneficiary households(because nonbeneficiaries also join the WMCA, and some beneficiary households have morethan one member); 5 had between 80% and 100%; 5, between 60% and less than 80%; and 2,

26These criteria include the following: (i) the subproject must have been turned over to the WMCA, (ii) the WMCAmust mobilize at least 30% of its initial contribution (towards the investment cost of the subproject) for purposes ofO&M, and (iii) the WMCA is willing to pay 10% for the first Tk100,000 and 5% of the remaining cost of the total

repair/rehabilitation. If funds are not adequate to cover all requests from the qualified WMCAs, LGED prioritizes itsassistance based on the WMCAs good track record in terms of routine maintenance and sustainable institutionaladvancements.

27ADB. 2004. Project Completion Report on the Small-Scale Water Resources Development Sector Project inBangladesh. Manila.

28WMCAs are formed under the Co-operative Society Act and its rules and regulations. In particular, Rule 2(2) wasamended in 2001 to include a definition under which water management associations may be established ascooperative societies, the members of which are beneficiaries of water resources projects.

29As of March 2006, the total number of members of the 280 WMCAs had reached 106,653, around 75% of whomwere male.

30These subprojects had a total membership of 10,299, around 69% of whom were male.


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between 40% and less than 60%.31 The male to female ratio of the members of WMCAs variedwidely, ranging from 14% to 65% (Appendix 3).

34. Under the cooperative system in Bangladesh, microcredit programs are established inthe WMCAs. A microcredit system that is a hybrid of the original cooperative system, 32 togetherwith some changes considered essential by the Project Team, was established. Under the

Project, the capital base for each WMCA microcredit program is made up of the proceeds fromthe sale of shares and the accumulated savings of individual members with the WMCA. Ingeneral, the members of WMCAs must purchase at least one share in the cooperative. 33 Normally, the value of one share is Tk10, although this could also be as high as Tk100.34 Ontop of this, each member is required to contribute each month to a savings account, usuallyTk10 but up to Tk100, depending on the WMCA by-law. Collection rates of WMCAs visited bythe OEM are generally high, but not 100% in all subprojects. The funds generated from monthlysavings and purchase of shares are used to provide microcredit loans to members, with aninterest rate of up to 15%.

35. Some WMCAs also have access to the Japan Fund for Poverty Reduction (JFPR), fundsfrom which are also lent to members. In August 2001, ADB approved a JFPR grant 35

amounting to $900,000 for the GOB. LGED was the EA for this grant, while LGEDs district andupazila offices, together with the WMCAs, were the implementing agencies. The LivelihoodImprovement for the Poor Project(the Grant), which was implemented together with the follow-on project36 in the areas with completed subprojects under the Project, aimed at (i) reducingrural poverty in selected subproject areas through livelihood improvement activities by the poorfarmers of well-established and well-functioning WMCAs, and (ii) strengthening the capacities ofWMCAs, through self-governance, to manage the poverty-focused activities of the poor. TheGrant had two components: (i) livelihood improvement activities by the poor, and (ii)strengthening the capacity of the WMCAs for managing livelihood activities. The livelihoodimprovement component had three subcomponents: (i) productive microinfrastructure, (ii)livelihood support, and (iii) skills development. Based on the implementation completionmemorandum37 for this Grant, a total of 102 person-months of consulting inputs were required

by the Grant. The performance of the consultants was rated highly satisfactory. The Grant wasclosed on 30 June 2006. Overall, it is expected that the impact assessment will rate the Grantas generally satisfactory. The Grant has encouraged (i) the poor members, and (ii) competitionamong WMCAs to upgrade themselves in order to qualify for the JFPR funds. The number ofloan applications has increased, indicating a rising awareness among the members.

31One (Moranadi WC) of the two WMCAs with membership less than 60% of the benefited households has restrictedthe number of members by increasing the required amount of initial savings deposit. In effect, new members haveto contribute a savings amount equivalent to the existing savings of current members, rather than starting theirsavings accounts from zero. The other one (Kumarer Beel) is practically defunct.

32Based on the original cooperative system, the capital base for the microcredit program originated mainly as loansto a cooperative from the Cooperative Bank, which in turn received funds from the Bangladesh Bank.

33 In most WMCAs, the maximum number of shares one can buy is limited to between 10 and 100, although four ofthe subprojects visited allow shareholdings up to the legally allowed maximum of 20% of total share capital permember (Appendixes 4 and 5). In at least two cases, the provision for allowingup to 20% of capital to be held byany individual has been used by the WMCAs to expand their capital base and thus the funds available formicrocredit programs or WMCA commercial activities.

34In four WMCAs, savings per share is Tk20; in two, Tk50; and in one, Tk100.

35ADB. 2001. Reduce Rural Poverty Through Livelihood Improvement Activities by the Poor Members of WaterManagement Cooperative Associations. Manila.

36See footnote 6.

37ADB. 2006. BAN: Livelihood Improvement for the Poor through Water Management Cooperative Associations.Manila.


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36. Each WMCA is managed by a management committee. As per cooperative society rules,WMCAs hold elections every 3 years and regular annual general meetings during which thecompleted annual audit is presented. The functions of the management committee include (i)organizing the beneficiaries of the subprojects, including their participation and sharing in theO&M activities of the infrastructure, (ii) helping their members in income-generation activitiesthrough microcredit programs, and (iii) facilitating training of their members. Nineteenof the 22

subprojects have an active management committee, which functions regularly.3837. The active WMCAs have various functional subcommittees such as the O&M,agricultural, microcredit/loan, and womens subcommittees. Some of the WMCAs have villagecommittees for closer connectivity with the beneficiaries. Eleven of the 19 active WMCAs havepaid employees. The rest of the WMCAs operate through voluntary service. A tablesummarizing the features of each of the sample subprojects is presented in Appendix 6.

38. The Project provided extensive training to the beneficiaries, which included training onsubproject implementation, relevant cooperative rules, making WMCAs work, basicmanagement training, various livelihood activities (such as seasonal vegetable and seedproduction, integrated farm management, and poultry development), and O&M. The

beneficiaries were also trained in fish production techniques, and pond fish culture andfingerling production. These training programs were highly appreciated by the beneficiaries.However since the end of project implementation, the availability of training programs forWMCAs has become limited.

39. The Midterm Review Mission of the Second Small-Scale Water Resources DevelopmentSector Project (SSWRDP-2) recommended support for training for the completed Project, sincesubstantial funds were available. However, at the time of OEM, this had not yet materialized dueto lack of coordination between the IWRMU and the management of SSWRDP-2. The issuewas thoroughly discussed with LGED staff and in the wrap-up meeting. IWRMU is expected toprepare a proposed training program for discussion with SSWRDP-2s management.

40. In general, the beneficiaries of the subprojects visited are moderately to highly motivatedand interested in WMCAs, except in two (Kumarer Beel FCD and Dighapatia FCD subprojects).Such interest can be partly traced to their sense of ownership, which in turn was to some extenta result of the beneficiaries involvement in their respective subprojects from planning toimplementation and to O&M.39 In most meetings of the OEM with the WMCAs, around 80%100% of the management committee members were present. In Haridhara WC subproject in aremote area of Domer Upazila in the Nilphamari district, all the WMCA members (104 male, 79female, and 19 children) were present. The beneficiaries believe that the subproject has broughtstability to production conditions and has increased food production and employment for thepoor. The Moranadi WC subproject, which is described in more detail in Appendix 7, hadappeared in LGEDs project records as virtually nonperforming and had been practicallyabandoned by project management. The OEM found this subproject, in fact, to have a WMCA

38One subproject (Ramkrishnapur DR Subproject) does not have a Management Committee; and, two (Kumarer BeelFCD and Dighapatia FCD subprojects) are practically defunct. The non-functioning WMCAs are discussed inAppendix 7.

39Para. 5 of the back-to-office report of the OEM for the Special Evaluation Study on Institutional Arrangements inRural Development Projects stated that among the various factors contributing to the positive result, the mostinteresting one was a policy of cash contribution from beneficiaries before physical construction as a pre-conditionfor subproject approval. This is a laudable innovation as so far many ADB-financed rural development projectsfailed to collect operation and maintenance (O&M) fees from beneficiaries, and failed to ensure funding sources forO&M after project completion


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that was operating quite strongly and effectively. In the Ramkrishnapur DR subproject(Appendix 7), the WMCA president was not available 40 along with the records, and themanagement committee was not functioning. Nevertheless, members of the WMCA had keptthe association alive and were trying to reorganize it with the support of the Department ofCooperatives (DOC) and LGED officials.

G. Consultants

41. The consultants for this Project were engaged under the attached TA (footnote 10). Therecruitment process followed ADBs Guidelines on the Use of Consultants. The number ofconsultants was increased as a result of the need to monitor the construction quality of theproject infrastructure, and to prepare subproject feasibility and design studies (the consultantsfor which were recruited through a regular tender process, without any major issues). Thisrequired an increase in the number of domestic consultants from 12 to 18. As a result, the TAfinanced a total of 841.5 person-months of consulting services, almost 35% more thananticipated. The performance of the consultants was satisfactory.

H. Loan Covenants

42. All of the loan covenants except two (which were partly met) were complied with. TheProject Steering Committee was to meet quarterly during the first year, semiannually from thesecond year to provide overall coordination, and whenever an issue requiring interministerialcoordination arises. However, the Committee met only every other year from 1995 up to 1999.These meetings were followed by another in late 2000 and one in 2002. Issues arising duringimplementation were normally resolved at the PMO level. The other covenant, which was partlymet, related to the funding of recurrent maintenance costs of each subproject. The practice ofWMCAs with regard to maintenance funding was not fully consistent with this covenant. WhileWMCAs finance the entire recurrent maintenance costs of structures, they cover only half of thecost of earthworks. The other half is shouldered by LGED. Nonetheless, this is a big stepforward, with beneficiaries responsible for O&M costs being a new concept in Bangladesh that

was introduced by the Project.

I. Policy Framework

43. The GOBs strategy, policies, and plans for developing the water resources sector weredocumented in the National Water Plan (NWP), the FFYP, and the Flood Action Plan. The NWP,prepared by the Water Resources Planning Organization in 19831987 and updated in 19881991, examined the long-term development perspectives for the countrys water resourcessector. The NWP set out sector goals and guidelines to effectively manage water resources,and adopted the principles of integrated water resources management with emphasis onstakeholder participation, strategic planning, decentralization, sound management of social andenvironmental issues, sustainable O&M through management transfer to WMCAs, and

improved governance of sector organizations. The FFYP, which was the GOBs nationaldevelopment plan, gave priority to cost-effective, quick-gestation investments to rehabilitate andupgrade existing water resources infrastructure. The Flood Action Plan was initiated after thesevere floods of 1987 and 1988 to form a long-term comprehensive flood management plan.These developments supported the Project and the participatory approach that was adoptedduring implementation.

40The president was in jail due to reasons unrelated to the WMCA.


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44. Guidelines for participatory water management were also finalizedstipulatingprocedures and arrangements to implement sector interventions with water managementassociation empowerment. The National Water Management Plan, which was also finalized in2004 by the Water Resources Planning Organization, provided for a framework for short-,medium-, and long-term strategies and programs. 41 The short-term focus is on institutionaldevelopment and an enabling environment, along with critically urgent investment programs.

III. PERFORMANCE ASSESSMENT

45. Overall Assessment. The Project is rated successful. It was (i) highly relevant at thetime of appraisal and evaluation to the Governments and ADBs objectives and strategies, (ii)effective in achieving its objective of increasing agricultural production in the subproject areas,(iii) efficient in terms of resource utilization, and (iv) likely sustainable in terms of subprojectbenefits.

46. Relevance. The Project is rated highly relevant. At the time of appraisal, the Projectwas consistent with the Governments national development plan (FFYP). The FFYPsinvestment plan for flood control and water resources was prepared based on the NWP, which

was in turn prepared during 19831987, and updated during 19881991. The project designwas sound, since the Government had given first priority to the expansion of minor irrigation inthe NWP, because minor irrigation was expected to (i) be technically feasible using localresources, (ii) generate benefits quickly, and (iii) contribute directly to equity. Rehabilitation andupgrading of water control systems also received high priority, because such investments wereexpected to have a short gestation period and produce high investment returns. The FFYPemphasized that the supplementary use of minor irrigation in combination with effective floodcontrol and drainage would enable farmers to crop high-yielding varieties and reduce the risk ofcrop failure from flooding or drought at the beginning and the end of the monsoon season. O&Mof water resources schemes had usually been a problem in the past. To overcome theseproblems, the Government increasingly emphasized the need for active participation of localgovernments and beneficiaries in the development of small-scale water control schemes at all

stages of the development process. This was well considered by the Project, as it introducedthe concept of beneficiary participation in small-scale water resources development. Farmers,through their respective WMCAs, participated in all stages from subproject identification,contributed to infrastructure costs, and were responsible for recurring maintenance costs of thestructures. The microcredit activities of the WMCAs generated income for the members andalso generated funds for maintenance purposes. The Project was also consistent with ADBsoperational strategy for Bangladesh, which then focused on poverty reduction. This was also inline with the Governments development objectives. The Project was also in line with ADBsstrategy for the agriculture sector, which placed greater focus on enhanced access of the poorto growth through a number of ways, including (i) increasing foodgrain production through theextension of irrigated dry season cultivation by minor irrigation, (ii) expanding and improvingagricultural support services, and (iii) improving the policy environment and upgrading

institutional capability. Thus, the Project was "highly relevant" at the time of appraisal.

47. The Projects relevance was sustained until the time of evaluation. Fully consistent withthe Millennium Development Goals, Bangladesh's national poverty reduction strategy aimed to

41Short-term refers to 5 years, medium-term to 10 years, and long-term to 25 years.


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reduce the number of poor people to half by 2015, 42 and to achieve substantial improvement inmost aspects of human development. ADBs overarching objective, which is poverty reduction,is also in line with the Governments strategy. In spite of the shortfall in the number of completedsubprojects (280 versus 400), total beneficiary households were estimated at 142,541 (763,600people) compared with the 140,000 farm families (750,000) expected at the time of appraisal tobenefit from the Project. Thus, this Projectthe expected outcome and impact of which has

been to contribute to sustained agricultural growth and poverty reduction, respectivelyis stillhighly relevant to both the Governments and ADBs present strategies.

48. Effectiveness. The Project is rated effective. It achieved its outcome of increasingagricultural production in the subproject areas. In 2004, aggregating for all subprojects, cerealproduction was 242,371 tons above the combined preproject level, 43 about the same level ofproduction as in the previous year (Table 2). This figure compares favorably with the appraisalestimate of a 50,000-ton increase in foodcrop production. This is equivalent to an increase inoutput of about 1.5 tons per ha per year for every hectare cultivated in the subproject areas,44compared with a per hectare incremental production of 0.33 ton at the time of appraisal. Thedata also show significant increases in noncereal production compared with the preprojectsituation, and observations from the subprojects visited by the OEM support this conclusion.

However, because of the diverse nature of these crops, direct year-to-year comparisons are notpossible without a detailed analysis of crop patterns, for which data are not available. 45 Overall,the Project has produced a significant increase in rice production in major crop seasons and anincrease in noncereal production (although the exact amount of this increase is unclear). Whileagricultural production in Bangladesh is sensitive to annual seasonal variations in cropproduction, the Project has led to increased rice output, because it has helped farmers withtimely plantation and switching to high-yielding varietieswhich require greater watermanagement and control and more inputs than other lower yielding varietiesby making themsafer and reducing risks for farmers. The Project supported beneficiary farmers in maintainingand improving soil productivity, crop diversification, and integrated pest management forsustainable crop production.46

42With regard to the eradication of extreme poverty and hunger, there are two global targets: to halve, between 1990and 2015, the (i) proportion of people whose income is less than one dollar a day; and (ii) proportion of people whosuffer from hunger. The targets for Bangladesh are to reduce the proportion of people (i) below one dollar a day(purchasing power parity) from 58.8% in 1991 to 29.4% by 2015, and (ii) in extreme poverty from 28% in 1991 to14% by 2015.

43See Annual Effect Monitoring and Evaluation Report for 20042005, IWRMU.

44Not all cultivated land is planted to rice, although a high proportion is at least for one season of the year.

45By summing production of all noncereal crops together, the data are mixing the output of crops such as sugarcanewith yields around 40 tons/ha or more with the output of crops such as pulses with yields of around 1 ton/ha. Aswitch from one to the other causes a fall in noncereal output.

46 The analysis compares the with subproject situation and the situation in the subproject area if the subproject hadnot been implemented, which in general means a continuation of the preproject situation. It may be observed thatthe present crop yields reported in the subproject areas are generally similar to or higher than the nationalaverages. More importantly, because of the nature of the terrain and the seasonal pattern of flooding inBangladesh, the ability to control the level of flooding (either by retaining water in higher areas prone to earlydrainage or by excluding water in low-lying areas subject to excessive flood levels) almost always result inimprovements in average crop yields and production. Conversely, these same areas have difficulty producingconsistent crops from year to year if they have no means of controlling water. Thus, if there are areas nearSSWRDSP subprojects where agriculture is performing similarly, it likely implies that these are not withoutsubproject areas but rather areas that have benefited from other, similar projects. Unfortunately, time did notpermit the OEM to investigate this observation more fully and in greater detail.


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Season Cereals

Non-

cerealsb

Cereals

Non-

cerealsb

Cereals

Non-

cerealsb

Winter 22,217 114,143 102,131 140,573 158,674 107,413

Premonsoon 14,865 28,825 35,697 43,651 35,730 30,593

Monsoon 49,576 18,516 104,976 33,903 47,967 20,891

Total 86,658 161,484 242,804 218,127 242,371 158,897

Table 2: Increase in Production,a20022004

2002 20042003

(amount in tons)

a

From preproject levels.b

Noncereals are a diverse group of crops, and amounts should therefore be treated asindicative only.

Source: Integrated Water Resources Management Unit, Local Government EngineeringDepartment.

49. By reducing flooded areas and flood depth in many areas, the Project was expected toreduce the natural migration of fish during the breeding season and to lead to some loss of

production from the floodplain fishery. At the same time, an increase in fish culture productionwas expected as a consequence of the improved control of water during the flood season.Compared with production before the Project, the total output of fish increased, by 1,572 tons in2003 and 2,072 tons in 2004 (Appendix 8). In fact, there was a small reported net increase infloodplain fish production together with a much larger increase in culture fisheries. 47 A smallnumber of subprojects have had relatively large increases in culture fish productionoffsettinglosses in other areas. For the whole Project, there was an increase of about 5,600 in thenumber of those cultivating fish, and a small overall increase in those depending on floodplainfisheries. The impact of the Project on the livelihood of fish producers is difficult to assessbecause of the lack of reliable baseline data. For those successfully cultivating fishe.g., thefarmers in Bagchar-Badurgacha, who have successfully adopted shrimp production into theircropping patternthere have been significant income benefits. The situation is much less clear

for traditional fisher families, where gains have been experienced by some and losses by others.It is likely that traditional fisher families (who are almost always among the poor in anycommunity) have benefited most where they have been able to participate in fish cultureactivities.

50. In addition to increased crop production, these subprojects have generated tangiblebenefits for the WMCAs such as opportunities for tree plantation, poultry raising, kitchengardening, livestock rearing and fattening, and employment opportunities for the poor. Anindirect benefit is the availability of microcredit. By securing management of flooding, drainage,and other aspects of water management in the subproject areas, the Project has establishedsafe conditions for increased investment by households in both agricultural and nonagriculturalactivities. As a result, WMCA management committees and members attest to an improvement

in their income and standard of living. This could be further supported by the increase in the netincome for average cropping pattern per ha of land for 2003 and 2004 (compared to thepreProject levels) as estimated by the OEM for the sample subprojects (Appendix 9).

47Because of the lack of reliable preproject baseline data on fish production, these figures should be treated asindicative only.


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51. Overall, the beneficiaries areconvinced and enthusiastic about the subproject benefits.Thus, the Project is rated effective.48

52. Efficiency. The OEMs findings confirmed the PCRs assessment that the Project wasefficient in terms of resource utilization. 49 Relatively small amounts of investment wererequired by each of the subprojects. Subproject costs50 ranged from a low of Tk123,223 for the

Parkulihar Paikpara DR subproject to a high of Tk23,964,604 for the Kabai FCD subproject.These investments have generated significant benefits for the subproject areas. Subprojectimplementation has resulted in increased cropping intensityof over 100% in some instancesand greater production of higher yielding crop varieties. The resulting increases in productionhave been translated into increased incomes and higher standards of living for the beneficiaries.

53. The economic internal rates of return (EIRRs) of the 22 sample subprojects visited bythe OEM were recalculated.51 The EIRRs estimated in the subproject feasibility studies wererecalculated with costs and benefits updated to 2006 prices. PostProject EIRRs were based oncrop area, production, and yield data sets for 2003 and 2004 from the EME reports of 2004 and2005,52 respectively. The 2004 data from the 2005 report were the most recent comprehensivedata available for the Project, as this was the last year when an EME report was produced.

Recalculated EIRRs based on the 2005 EME ranged from negative (Baranurpur) to 182%(Ershalmari), compared with the recalculated feasibility study EIRRs ranging from a low of12.8% to a high of 135.4%. A comparison of the subproject EIRRs at the time of the feasibilitystudy and after the Project is made in Appendix 9.

54. In all but four53 of the subprojects visited by the OEM, the postProject EIRR is higherthan the recalculated preProject EIRR for at least one of the two data sets. Benefits reported in2003 and 2004 for these subprojects were higher than those anticipated for the with-projectscenarios in the feasibility studies. For the 22 sample subprojects, the median investment perhectare estimated in the feasibility studies was Tk9,900 ($247 at the time the Project wasprepared), and the average investment was Tk12,500 ($313) per ha. Investment per hectareranged from a low of Tk1,724 ($29) for the Mitain-Naldanga FCD subproject to Tk32,675 ($556)

for the Agrani Command Area Development subproject.54

55. All of the sample WMCAs are operating, albeit in varying degrees. The OEM visited 22of the 273 operating subprojects and found most to be sound technically and relatively wellmaintained. The quality of work was generally good. Reexcavation and maintenance work

48Although, overall, the Project was rated effective, there was significant variation among the subprojects andbetween subsectors. The Project would have been rated highly effective if outcomes had been high moreconsistently across subprojects and subsectors.

49With the exception of one subproject for which EIRRs could not be calculated, the recalculated EIRRs were all

above 12% (Appendix 9, para. 7 and Table A9.1).50This is based on the costs of all the 280 subprojects.

51The calculation of the EIRRs was based only on the direct infrastructure costs and direct benefits for eachsubproject, as in the preProject feasibility studies. If TA costs were assigned to subprojects on a cost per hectarebasis, the impact on EIRRs would not affect the overall conclusion regarding the efficiency of the Project.

52These Reports were prepared annually by the IWRMU of LGED from 20022003 up to 20042005.

53Recalculation of the feasibility study EIRRs for the four subprojects was not possible, because the originalfeasibility studies for these subprojects are missing and therefore no preProject data were available.

54The Agrani CAD subproject was the only command area development subproject implemented under this Project.It was therefore more complex (and more expensive) than most of the other subprojects. US dollar equivalents arebased on the exchange rate prevailing at the time of project completion.


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carried out by the labor contracting societies55 were observed to be of better quality than that, insome cases, done by general contractors.

56. Sustainability. The subproject site visits suggested that the Project is likely to besustainable. The WMCAs are generally sustainable, taking into consideration the (i) transparentand tangible benefits of the subprojects, which are appreciated by the beneficiaries; (ii)

usefulness of the WMCAs for the beneficiaries; (iii) generally positive response of beneficiariesto the subprojects; (iv) commitment of the LGED management and WMCA leaders; (v)institutional arrangements of LGED for the management and maintenance of subprojects of thistype; and (vi) WMCAs survival for the past 5 years.

57. O&M of 19 of 22 subprojects has been found good. All the WMCAs participate in O&Mactivitiesthe minimum being to keep the subproject running. Beneficiary contributions to O&Mmay be in cash, kind, or labor. Labor contributions constitute a significant portion of WMCAcontributions to the cost of O&M, since much of the work required, especially for maintenance ofembankments and canals, is manual (such as greasing and painting of sluices, repairing raincuts and small damage to embankments, resetting protective blocks). Emergency works aredone with LGED funds.

58. In some cases, fine tuning of the subprojects is necessary. The Mission observed thatalthough the Midterm Review Mission for SSWRDP-2 recommended that funds available underSSWRDP-2 could be used for this workwhich was agreed upon among the fundingagenciesat the time of the OEM, the fine tuning works had still not been carried out.

59. At the time of OEM,56 LGED was in the process of establishing the Livelihood TrustFund (LLT), a successor of the JFPR project (see para. 35). Of the total JFPR budget ofUS$1.05 million, almost $500,000 was given as small loans to the Projects WMCAs. Asplanned under the JFPR project, the repayment of these small loans will form the seed moneyfor the LLT. The objective of the LLT is to extend JFPR support for WMCAs. The LLT isexpected to help ensure the WMCAs sustainability, which in turn is hoped to translate to the

sustainability of the subprojects. The anticipated availability of additional resources as a result ofthe LLT will hopefully increase the WMCAs ability to channel some of their funds for the O&M oftheir respective subprojects.

60. In August 2007, Bangladesh was once again hit by large floods (although relatively lessthan the floods in 1998 and 2004). Based on the draft estimate prepared by LGED, the damagecaused by the 2007 floods to 73 (out of 280) subprojects was valued at around $880,000. Thisrepresents around 1.7% of the total project cost. Aside from being relatively small in relation tothe entire Project, the Government (through LGEDs IWRMU) has a system in place to supportsubprojects that are damaged by major floods.

55Labor contracting parties are based on the concept of creating employment and income generating opportunitiesfor the landless/poor in the subproject area by developing the capability of these vulnerable persons throughtechnical and social training.

56As of October 2007, the IWRMU has drafted the Memorandum of Association and Rules and Regulations of theProposed Livelihood Trust Fund.


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IV. OTHER ASSESSMENTS

A. Impact on Institutions and Policy

61. The Project on the whole was responsible for the institutionalization of beneficiaryparticipation in small-scale water projects. As this was the first project to use this approach in

water resource schemes, the training, guidance provided by the consultants, and hands-onexperience collectively honed the skills of concerned LGED staff. These made the project staffbetter prepared for the implementation of the follow-on project. 57 Interagency cooperation wasalso promoted through workshops (such as those on reviewing WMCA activities) and interactionamong the staff of the involved government agencies. This Project highlights the importanceand benefits to be achieved from a successful bottom-up approach with extensive institutionalsupport. The latter helped build LGEDs present capacity at all levels to implement small-scalewater resources development activities with the participation of beneficiaries.

B. Socioeconomic Impact

62. Both landowners and the landless have benefited from the Project. In the sample

subprojects, the intensification of agricultural production increased the demand for farm laborand thereby generated more employment for the poor and landless. Better household incomesmake it easier for poor households to take advantage of education, health, and other socialservices in their villages. In addition, the Project helped improve the access of the rural poor tocredit through the microcredit program of the WMCAs, which supported income-generatingactivities.

63. The Project did not involve resettlement of people. A total of around 61 ha of land(compared with the estimate of 399 ha) in 24 subprojects was acquired for infrastructurepurposes. Land acquisition was reduced as much as possible by aligning the infrastructure onpublic land wherever possible. When this was not possible, people were persuaded to allowtheir land to be used. The Government acquired land as a last resort. Where land was not

acquired, embankment footprints were constrained, resulting in excessively steep side slopes.This also affected quality in some subprojects, since the embankment had to be constructedwithout sufficient setback.

64. Project implementation had a negative impact on floodplain fisheries, although this wasoften offset by positive impacts on culture fisheries. To help alleviate the plight of affectedpeople engaged in floodplain fisheries, LGED signed a memorandum of understanding (MOU)with the Ministry of Land in October 2002 to ensure user rights to water bodies within thesubproject area of the affected people. The MOU helps ensure that the beneficiaries havepriority access to these water bodies after paying standard fees to the Ministry of Land. Inaddition, training was provided to poor fisher folk to increase the possibility of accessingalternative income-generating activities. Fisheries-related training included, among others, pond

fish culture and fingerling production and improved fish production techniques.

65. Women accounted for around 31% of the total members of the WMCAs in the samplesubprojects. The participation of women in the WMCAs womens subcommittees and inincome-generating activities funded through the WMCA microcredit programs and theLivelihood Improvement for the Poor Project has resulted in higher self-esteem among these

57As of the time of the OEM, the follow-on project was under implementation. As of this writing, the projectpreparatory technical assistance for a possible third project was being processed.


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women, who are now able to contribute more to family incomes. In addition, women are morevisible in their respective communities, as they now contribute in terms of the WMCAs activities.The management committee of each WMCA had 34 women members as required by theProject. One of the subprojects visited was even chaired by a woman. This has enabled anumber of women to actively participate in the overall management of and decision-makingprocess in their respective WMCAs. Twelve of the 22 WMCAs visited by the OEM have

womens subcommittees mainly to focus on the participation of women in WMCA activities.Women take part substantially in income-generating activities through the microcredit program.Many women were trained in cooperatives, income-generating skills, and environmentalawareness.

C. Environmental Impact

66. Under the Project, an environmental monitoring program was established. Threeregional and eight greater district laboratories were set up in Bangladesh for monitoring anychanges in the water quality in 11 selected subprojects. Several parameters were monitored toassess water quality, including the pH, nitrate, and arsenic levels for groundwater, and pH,dissolved oxygen, and calcium chloride hardness for surface water. Laboratory technicians were

trained in the use of the laboratory equipment. Based on the last and most r ecent EME report(20042005), water quality improvement has so far been generally observed. 58 In addition, thesubprojects designed fish-friendly structures and adopted an improved system for sluice gateoperation to facilitate fish migration during critical periods. The Project assisted LGED in thepreparation of an initial environmental examination and an environmental management plan foreach subproject. The Project had no significant adverse environmental impacts.

D. Asian Development Bank Performance

67. Since appraisal, ADB conducted 14 missions,59 including the project completion reviewmission. ADB was able to give timely advice to the Government. Project administration wasdelegated to the Bangladesh Resident Mission effective 1 October 2001, with 1 year and 3

months left before project completion. Project implementation was consistently ratedsatisfactory from the start till completion. During the last 2 years of the Projectsimplementation,60 ADB fielded two missions a year to join IFAD and the GON in reviewingproject progress. A midterm review was undertaken as scheduled, 3 years after loaneffectiveness. This midterm review was very responsive to the needs of the Project, as itresulted in the introduction of steps that helped remedy the problems encountered duringimplementation. These include the establishment of a stronger oversight mechanism formonitoring construction quality, and observing a more realistic timeframe in terms of preparingand implementing the remaining subprojects. Overall, the performance of ADB was satisfactory.

58The 2004-2005 EME report showed that, of the 11 sampled subprojects, 4 recorded an increase in nitrate levels.T