Document of

The World Bank!FIt 00'PY

FOR OFFICIAL USE ONLY

Report No. P-377O-BI

REPORT AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED CREDIT

IN AN AMOUNT OF SDR 40.2 MILLION

TO THE PEOPLE'S REPUBLIC OF BANGLADESH

FOR A

BWDB SMALL SCHEMES PROJECT

April 12, 1984

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

US$ 1 = Taka 25.0Taka 1 = US$ 0.04

ABBREVIATIONS AND ACRONYMS USED

BADC - Bangladesh Agricultural Development CorporationBRDB - Bangladesh Rural Development BoardBWDB - Bangladesh Water Development BoardDAE - Directorate of Agriculture ExtensionDOF - Department of FisheriesGOB - Government of BangladeshICB - International Competitive BiddingIMP - Irrigation Management ProgramIWDFC - Irrigation, Water Development and Food Control Division

of Ministry of AgricultureLCB - Local Competitive BiddingO and M - Operation and MaintenancePPS III - Project Planning Schemes III DirectorateSDR - Special Drawing RightsUNDP - United Nations Development Programme

FISCAL YEAR (FY)

July 1 - June 30

FOR OFFICIAL USE ONLY

BANGLADESH

BWDB SMALL SCHEMES PROJECT

Credit and Project Summary

Borrower: People's Republic of Bangladesh

Amount: SDR 40.2 million (US$41.5 million equivalent)

Terms: Standard

Project Description: The project would: (a) increase agricultural productionby increasing the area under high-yielding rice andwheat cultivation through improved drainage and/orirrigation and by reducing crop losses from flooding;(b) strengthen the institutional capacity of theBangladesh Water Development Board (BWDB) to (i) imple-ment small schemes and (ii) carry out Operation andMaintenance (O and M) for large schemes; and (c)support the transfer of 0 and M responsibilitiesof small schemes to local bodies. The project wouldinclude about 30 quick yielding, low cost per acre,and high rate of return flood control, drainage andirrigation subprojects. The project would supportimprovements on about 225,000 acres. Over 80,000 farmfamilies, or nearly 480,000 people, would directlybenefit.

Risks: Implementation delays due to land acquisition problemsare a risk facing the project. To reduce this risk,the land needed for the subprojects beingimplemented during a construction season would beacquired before the beginning of thatseason. Another risk is that subprojects would notgain the full support of the population concerned. Tomininmize this risk, subproject selection guidelineswould require that beneficiaries had indicated strongsupport for and were prepared to participate inimplementation and subsequent 0 and M of thesubprojects.

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents rnay not otherwise be disclosed without World Bank authorization.

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Estimated ProiectCosts: 1/

Local Foreign Total(US$ million)

Flood Control and Drainage 15.8 4.6 20.4Irrigation 7.9 2.8 10.7Strengthening BWDB 8.2 2.7 10.9Base Costs 31.9 10.1 42.0Phys. Contingencies 3.2 1.0 4.2Price Contingencies 8.9 2.9 11.8

Total Project Costs 44.0 14.0 58.0

Financing Plan:Local Foreign Total

(US$ million)

GOB 11.0 - 11.0Farmers 3.2 - 3.2IDA 28.4 13.1 41.5UNDP 1.4 0.9 2.3Total 44.0 14.0 58.0

EstimatedDisbursements: Fiscal Year FY85 FY86 FY87 FY88 FY89 FY90

(US$ million)

Annual 4.3 9.7 10.4 9.6 6.2 1.3Cumulative 4.3 14.0 24.4 34.0 40.2 41.5

Economic Rateof Return: 30% (based on four appraised subprojects).

Staff AppraisalReport: Bangladesh: BWDB Small Schemes Project

Report No. 4815-BD, dat(ed April 10, 1984.

1/ Includes approximately US$2.7 million in taxes and duties.

REPORT AND RECOMMENDATION OF THE PRESIDENTTO THE EXECU'TIVE ])IRECTORS ON A PROPOSED CREDITTO THE PEOPLE'S REPUBLIC OF BANGLADESH FOR A

BWDB SMALL SCHEMES PROJECT

1. I submit the following report and recommendation for a proposeddevelopment credit to the People's Republic of Bangladesh for SDR 40.2 mil-lion (the equivalent of US$41.5 million), on standard IDA terms to helpfinance a Bangladesh Water Development Board (BWDB) Small Schemes Project.Parallel financing in the form of a grant of about US$2.3 million equivalentwould be made by the UNDP.

PART I - THE ECONOMY _/

Introduction

2. An economic report entitled "Bangladesh: Recent Economic Trends andMedium-Term Development Issues," (Report No. 4822-BD, dated February 27,1984) has been distributed to the Executive Directors.

3. Bangladesh, which became independent in 1972 under very difficultcircumstances, is a country witb very high population density and widespreadpoverty (annual income per head averages about US$140 at present). Theeconomy, dominated by agriculture, remains acutely vulnerable to disruptionby both natural and external factors. Considerable progress has been made inincreasing the availability of irrigation and other inputs, but foodgrainproduction remains heavily dependent on weather conditions and falls short oftotal needs. The uncertainties of foodgrain availability complicate fiscalmanagement due to the need to manage public foodgrain stocks and often imposean additional strain on the balance of payments.

4. The economy is also characterized by very low savings, reflecting thelow level of incomes, and by a very large structural external payments gap.Domestic savings account for only a small fraction of investment (which hasaveraged around 16% of GDP in recent years). Export earnings cover less than30% of the import bill, and over 60% of merchandise exports are accounted forby raw jute and jute goods. The resource gap of around 15% of GDP isfinanced by workers' remittances, which have risen rapidly to over 5% of GDPin recent years, and by foreign assistance of around 10% of GDP per year.The capacity for imports can be sharply affected by a combination of factorswhich are beyond the control of the Government and whose disruptive effect onthe economy is amplified by the heavy dependence of the Government's revenue

11 Parts I and II of the report are substantially the same as Parts I andII of the President's Report for the Second Agricultural Research Project(Report No. P-3749-BD) dated March 12, 1984.

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base on import duties and sales taxes (together accounting for 60% of taxrevenues).

5. In spite of these problems, the late 1970s were a period of politicalstability and economic consolidation and provided an opportunity to plan forlonger-term development. GDP growth of close to 6% p.a. from FY75 to FY80was accompanied by rising public investment, financed by a substantial realincrease in aid disbursements. A combination of adverse domestic and exter-nal events during FY81 and FY82 disrupted the momentum of development. Thecorrective actions taken in FY83 have, however, been reasonably successful instabilizing the short-term external and budgetary situation and, despite thesevere limits on available resources, there are prospects for renewed modesteconomic growth.

Recent Economic Developments

6. From FY80 to FY82, a sharp decline in export prices of raw jute andjute products and of major non-traditiornal exports, combined with risingimport prices (especially for petroleum) to cause a decline of over 30% inBangladesh's terms of trade. At the same time, external aid inflows, whichhad risen steadily until FY80, declined in FY81; they recovered in FY82, butonly to 4% above FY79 flows in real terms. Prolonged drought adverselyaffected the FY82 and FY83 crops. The shortfall in FY82 foodgrain production(0.4 million tons or 3% below FY81 levels) led to high food prices and asubstantial run-down of public sector foodgrain stocks to well below thelevel considered sufficient for food security. Substantial commercialfoodgrain imports were required, imposing furt:her strain on the balance ofpayments, while reduced agricultural production and incomes depressed demandand activity in other sectors.

7. During FY81, the Government attempted to cope with the intensifyingexternal resource constraint by resorting to short-term commercialborrowings, short-term deposits from and currency swaps with other centralbanks, some run-down of reserves, and assistance from the IMF under anExtended Financing Facility (EFF) arrangement concluded in December 1980.However, the EFF arrangement was suspended in July 1981, as the Governmentincurred a large bank-financed budget delicit and credit ceilings agreed withthe IMF could not be met. In FY82 the Government sought to contain importgrowth through a variety of measures, including a substantial depreciation ofthe Taka by 22% against the US dollar. Nevertheless, despite an increase inworkers' remittances, from $210 million in FY80 to over $400 million in FY82,and further short-term borrowing, foreign exchange reserves declined to aboutUS$120 million (equivalent to about two weeks' imports) by the end of FY82.

8. The deterioration in the trade and aid climate also had a majoradverse impact on public finances during FY81 and FY82. Government receiptsof local counterpart funds were reduced as a result of declining commodityaid flows, as were its receipts from import dut:ies and sales taxes. Theseproblems were exacerbated by inadequate financial planning and by poor finan-

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cial performance of public enterprises, due to low levels of efficiency anddelays in increasing sales prices. A budget deficit of Tk 5 billion (2.5% ofGNP) emerged in FY81 even though the Annual Development Program (ADP) wascut back by 12% in the second half of FY81. Despite a simnilar cutback in theFY82 ADP, recourse to substantial bank financing was avoided only because ofa run-down of public food stocks following poor harvests. Nevertheless, asharp rise in foodgrain prices in mid-FY82, combined with the inflationarypressures caused by exchange rate depreciation and a rapid expansion ofdomestic liquidity in late FY81, resulted in a 15% rise in the consumerprices during FY82.

9. The Government introduced a wide range of austerity measures with itsFY83 budget (in July 1982), designed to adjust the economy to the seriousresource constraints. Development expenditure plans for FY83 were reduced bynearly 20%, in line with expected resource availabilities, and the increasein recurrent expenditures was limited to 14%, only slightly above theforecast inflation level. The Government also introduced new tax measuresdesignied to yield about 0.5% of GDP in FY83. In addition, a number of sub-stantial subsidy and pricing adjustments were made to reduce consumption,protect investments and to improve the financial performance of public sectorenterprises and utilities. Taken together, the tax, pricing and subsidyreduction measures amounted to an impressive 2.5% of GDP, Measures were alsotaken to improve balance of payments management, including a further 11%depreciation of the exchange rate during FY83, higher import duty rates,financing the import of more commodities through the Wage Earners' Scheme,l/abolition of selected export duties and improvements in export financing.IM@ assistance to Bangladesh was resumed under a Stand-by Arrangement inMarch 1983 which covered the period until August 1983.

10. While these measures were effective in helping to restore short-termeconomic stability, their effect, combined with depressed private sectordemand following poor harvests during 1982, resulted in low GDP growth (2.4%)in FY82, following a 1.5% decline in FY82. The budgetary situation in FY83was satisfactory, due to resource mobilization efforts, the depreciation ofthe Taka which largely offset the negative budgetary impact of reduced importvolumes, further foodgrain sales, and increased commodity aid disbursements.The balance of payments was helped by a recovery in aid levels, better termsof trade resulting from lower petroleum and food import prices, depressedimport volumes, and a further growth of remittances to around US$600 million.Foreign exchange reserves increased to US$340 million, representing about sixweeks- import equivalent, by the end of FY83. Following good winter crops,foodgrain production for FY83 reached a record 15.1 million tons and infla-tionary pressures eased. Whiile the short-term outlook has improved, the

1/ Under the Wage Earners' Scheme (WES), foreign exchange earningsremitted bv Bangladeshi workers abroad are sold in auction to importersrequiring foreign exchange.

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resource constraints remain severe, calling for a continuation of cautiousmacro-economic policies and consistent efforts to strengthen the productivesectors, and further resource mobilization.

11. The FY84 budget reflects the need to consolidate the gains made lastyear and to set the stage for a broadened domestic revenue mobilizationeffort in the future. The total tax effort is expected to increase fromabout 8.3% of GDP in FY83 to 9.0% in FY84. Domestic taxes, which accountedfor 3.6% of GDP in FY83, will generate only 3.4% of GDP in FY84 (mainly dueto the rapid growth in the lightly taxed agricultural sector in FY84), butnew tax measures have been introduced whose full revenue impact will be feltonly in FY85 and thereafter. Recurrent expenditures will again be tightlycontrolled, and the current budget surplus should increase substantially.The ADP is budgeted at over Tk 34.8 billion (5% higher in real terms thanthe actual FY83 ADP). Resources not generatec by external aid inflows willfinance 19.2% of the ADP: this represents only 2.2% of GDP and highlightsthe urgency of mobilizing more domiestic resources for development financing.A Core Program of 435 projects has been specif'ied, accounting for 73% of theADP and providing ample room for adjusting expenditures to actual resourceavailabilities.

Development Planning and Policy Issues

12. The Second Five-Year Plan for FY81-85 accords highest priority toto (i) reducing population growth Jrom the present rate 2.6% p.a.,(ii) achieving foodgrain self-sufficiency, (iii) eliminating mass illiteracy,and (iv) accelerating domestic energy development. IDA has assisted theGovernment in preparing the Medium--Term Foodgrain Production Plan (MTFPP)which aims at increasing foodgrain production to 20 million tons. Foodgrainself-sufficiency could be achieved by the end of the decade with appropriateproducer incentives, resources to provide needed inputs to farmers, and anexpanded role for the private sector in the provision and servicing of modernagricultural implements and inputs. Given Bangladesh's high illiteracy rate(74%), the Plan's emphasis on primary education is well founded, but the goalof achieving universal primary education by 1985 is unattainable in view ofresource and managerial constraints. Prospects for achieving the objectivesof educational expansion and improved foodgrain availability would beimproved by success in reducing the population growth rate; this will requiriemore determined efforts than have been made thus far, especially with regardto birth control efforts which have suffered from poor implementation andhave had only limited success. The Government has recently taken steps tocoordinate its birth control activities and to strengthen training programsfor field staff. A medium-term implementation plan for the population sectoris currently being prepared with Bank assistance.

13. There is an urgent need to develop the country's energy resources_particularly natural gas, since imported petroLeum at present pre-empts about:three quarters of merchandise export earnings. Ongoing and planned invest-ments in the energy sector are designed to increase the production, distribu--

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tion and utilization of natural gas as a substitute for imported fuel,including studies aimed at determining the potential for future investmentsin gas-based export industries. The recently approved Petroleum ExplorationPromotion Project will assist the Government to appraise more fully thecountry's gas reserves, determine the optimal pace of exploitation, and helprenew the interest of foreign. oil companies to resume the search for oil.Since the required investments are likely to be capital-intensive and lumpy,they would need to be properly planned under a phased priority program. TheGovernment has been slow to recognize this need, but is now endeavoring (withIDA and ADB assistance) to formulate an appropriate energy sector investmentprogram. The implementation of appropriate energy conservation measures andthe setting of energy prices at economically efficient levels will also becritical.

14. There is also an urgent need to address directly the growing problemsof rural poverty and unemployment.. Fifty percent of the rural population isfunctionally landless, and the employment situation has deteriorated sig-nificantly since the 1970s with only 70% of new entrants to the labor forcefinding gainful employment. Increased foodgrain production alone will notsuffice to resolve the unemployment and income problems, in view of the largeprojected growth of the work force. Measures must be taken simultaneously,therefore, to develop other sectors, such as fisheries, livestock, forestryand non-foodgrain crops, and to strengthen the industrial sector -- espe-cially small-scale and cottage industries -- so that incomes generated in onesub-sector will generate effective demand for the output of others.

15. Studies of the industrial sector have highiighted the distortingeffects of existing trade and industrial policies on resource allocation inthe sector. An ongoing program of studies is expected to lead to a medium-term program of actions to be implemented -- including modifications in theexisting tariff structure, domestic indirect taxation, investment incentives,export policies, and the mechanisms for industrial promotion and planning.The Government's New Industrial Policy, announced in 1982, provides for agreater role of the private sector in economic development. Many of the keyelements of this policy are already being implemented, including the divest-ment of major segments of the jute and textile industries to the privatesector.

16. The Government has revised the Second Five-Year Plan in the light ofthe sharp deterioration of the external environment, and its recent AnnualDevelopment Programs (ADPs) have reflected more realistic assessments oflikely resource availability. A "core program" of projects amounting toaround 75% of the ADP has been identified to ensure that high-priorityactivities are not disrupted by possible further adjustments to changingcircumstances. This approach has already helped project implementationduring FY83, but it should be recognized that the investment program isextremely small in relation to the total needs of the economy. As externalassistance will continue to be constrained, there is an urgent need for asustained and intensive domestic resource mobilization effort, consistent

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with the initiative taken in the FY83 budget to raise tax revenues, reducesubsidies and improve the financial performance of public enterprises. Inthe medium term, the tax base will have to be broadened to reduce its presentdependence on import duties, thereby improving the elasticity of the taxsystem. In addition, private savings should be stimulated throughappropriate interest rate policies and improvements in the banking and creditsystem.

17. Realization of the Government's objectives will also require improve-ments in development administration. There i.s a critical need to strengthenthe capacity for policy formulation and project implementation, streamlineadministrative procedures, and improve decision making processes.Recognizing that local government bodies can play an effective role in thedevelopment effort, the Government has decided to decentralize a number ofplanning and administrative functions to the up-graded Thana (Sub-District)level. Accordingly, sub-district administrations are being reorganized andstrengthened to enable them to talce on most development activities at thelocal level. The implementation and impact of this policy will need to beclosely monitored.

External Debt

18. Since most of Bangladesh's borrowings have been on highly conces-sional terms, servicing external medium-- and long-term (M&LT) debts has notbeen a major problem in the past, but will become a heavier burden in thenext few years as debts incurred in the first years after independence areincreasingly falling due for repayment. Total service payments on externalpublic M&LT debt are expected to rise from 6.8% of export earnings (goods andservices, including workers' remittances) in FY82 to 11.8% in FY84 and 13.7%in FY86. The Bank Group's share of Bangladesh's debt servicing obligationswill remain modest over this period, rising slowly from 9.7% of the total inFY83 to 10.9% in FY86. The Bank Group's sharfe of total debt outstanding andundisbursed is projected to increase from 30.4% in FY82 to 36.3% in FY86.

PART II - BANK GROUP OPERATIONS IN BANGLADESH

19. Bangladesh became a member of the Bank and IDA in 1972. Initially,Bank Group operations in Bangladesh concentrated on the reactivation ofeleven credits, amounting to US$146.2 million,, made originally to Pakistanbefore 1971; in addition, a consolidation loan (US$54.9 million) and credit(US$31.04 million) to cover liabilities arising from projects located inBangladesh and completed prior to independence were approved in 1974. As ofSeptember 30, 1983, 72 new credits have been approved, totaling US$2,400.64million; of these, US$862.03 million have been for import credits (elevenimports program credits and two fertilizer imports credits). Annex II con-tains a summary statement of IDA credits and disbursements as ofSeptember 30, 1983. On June 18, 1976, Bangladesh became a member. of the IFC,

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and two investments (for a shipbuilding company and an investment promotioncompany) have been approved.

20. The focus of IDA assistance in recent years has been on agriculture(22 of the projects approved as of September 30, 1983, and two fertilizerimport credits). This is consistent with the country's needs and theGovernment's priorities. Particular emphasis continues to be placed onprojects that provide agricultural inputs, including fertilizer, fertilizertransport, irrigation, improved seeds, extension, and credit and storagefacilities3 In addition to agricultural projects, emphasis is also beingplaced upon complementary infrastructural projects in sectors whichfacilitate agricultural development or which reduce bottlenecks constrainingthe economy's overall performance. In the power sector, for example, IDA isassisting in rural electrification and elimination of shortages of generationcapacity and distribution facilities which have been a major impediment toutilization of existing industrial capacity. Assistance for developingtelecommunications is designed to improve the efficiency of a wide-range ofeconomic and social activities.

21. Industry has been the main beneficiary of the eleven imports programcredits approved to date. Given the need for substantial net transfers ofresources and the persistent structural imbalance and weakness of theeconomy, program lending will continue to be an important component of IDAoperations in Bangladesh. The industrial sector has also benefited from twofertilizer production projects, a jute industry rehabilitation project,several DFC and small-scale industry projects and two IFC investments.

22, The enormity of Bangladesh's population problem makes this anextremely high priority sector as well, limited only by its absorptivecapacity. IDA has made two credits available in support of GOB's populationprogram, which is now making somne progress. Improved education andavailability of trained manpower are also crucial, and lending in this fieldhas emphasized agricultural, technical and vocational training, and primaryeducation.

23. Disbursement of the imports program credits has proceededsatisfactorily. Project disbursements have lagged behind expectations, owinglargely to delays in the release of local funds, approval of contracts,employment of consultants, and appointment of staff. Underlying these delayswere serious constraints t;hat included a shortage of qualified staff, over-centralized bureaucratic procedures and organizational deficiencies. IDAand GOB have given increased attention to regular monitoring and supervisionin order to identify and resolve potential problems. IDA is providing assis-tance both under specific projects and under technical assistance credits toimprove planning, project preparation and implementation capabilities.

24, In view of Bangladesh's difficult foreign exchange position andsavings/investment gap, IDA credits should continue to cover all foreignexchange costs and a portion of local currency expenditures.

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PART III - FLOOD CONTROL, DRAINAGE AND IRRIGATION

25. Agriculture dominates the economy of Bangladesh, accounting for about52% of GDP, 75% of all employment and over 80% of the country's exports.More than 95 million people live in the delta of three of the world's largestrivers, on an area of 14.3 million. hectares, a third of which is floodedevery year. About 9 million hectares are cultivated with a cropping inten-sity of about 150% per year. Fragmentation of landholdings has resultec inalmost half of the farms being less than 1 hectare, mostly divided intoseveral scattered plots. Agriculture is therefore predominantly subsistenceoriented. The population continues to grow al: about 2.6% per annum, and theintense pressure on the 'Limited land resources continues to increase.Bangladesh suffers from a chronic shortage of food both for humans andlivestock. Annual food production varies greatly, largely depending uponthe vagaries of the weather, particularly the onset and termination of mon-soon rains and the intensity of thie dry season. It is a major objective orthe Government's development program to achieve self sufficiency in foodproduction through expanded use of appropriate technology (high yieldingvarieties of seeds, fertilizer, and irrigation.) supported by appropriateextension, research and credit services.

26.. In the late 1960's and earLy 1970's, the Government of Bangladesh(GOB) undertook a number of major irrigation schemes with IDA support. Largeirrigation schemes which have received IDA financing include the ChandpurIrrigation Project (Credit 340-BD) 1/, Barisal Irrigation Project (Cr.542-BD), Karnafuli Irrigation Project (Cr. 605-BD) and Muhuri IrrigationProject (Cr. 725-BD). In recent years, the Government has been giving highpriority to the expansion of minor irrigation to tap the large groundwatersupplies in Bangladesh and to the development of low capital cost, quick-yielding and high rate of return flood control and drainage schemes. IDA hasbeen supporting these efforts through a number of projects. IDA support forminor irrigation includes such projects as Hand Tubewells Project(Cr. 1140-BD), Agriculture Credit (Credit 1147-BD), and Deep TubewellsProject (Cr. 1287-BD). Based on the recommendations of a joint GOB/IDAreview of the minor irrigation sector in FY82, the Government is shiftingresponsibility for fielding and operating small-scale irrigation equipmentincreasingly to the private sector. The Bangladesh Agriculture DevelopmentCorporation (BADC) is mainly responsible for the minor irrigation system,i.e. low-lift pumps, shallow and deep tubewells. IDA has also been support-ing flood control and drainage through such projects as Drainage and FloodControl II (Cr. 1184-BD) and the Small Scale Drainage and Flood Control

1/ Project Performance Audit Report, Bangladesh Chandpur II IrrigationProject, (Credit 340-BD), March 25, 1981.

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(Cr. 955-BD). The Small Scale Drainage and Flood Control Project is similarto the proposed project but has no irrigation component and has smallersubprojects. Out of 40 subprojects under construction, 19 have been substan-tially completed. Slower than expected implementation has been due to delaysin design work, the tendering process, land acquisition and procurement.However, these problems have now been largely resolved and the pace ofproject implementation is i.mproving. The Bangladesh Water Development Board(BWDB) is the agency responsibility for planning, construction, operating andmaintaining all food control and drainage schemes, and major and mediumirrigation schemes.

Irrigation Management Program

27. An Irrigation Management Program (IMP) was introduced in theIDA-financed Rural Development Project (Cr. 631-BD) in 1979/80 to maximizeutilization of irrigation capacity and minimize operation cost of minorirrigation equipment. Under this program, field officers of the BangladeshRural Development Board (BIRDB), the Department of Agriculture Extension (DAE)and BADC are jointly responsible for supporting cooperatives to carry out thefollowing essential features: (a) preparation of plans for better watermanagement; (b) organizing cooperative meetings; (c) training; (d) layingof irrigation channels; (e) preparation of irrigation budgets; and(f) obtaining credit for production costs. During its first years ofimplementation, IMP increased the area serviced within the command areas,farmers participation, and yields. Because of the promising results, GOB hasdecided to replicate this program on a nationwide basis.

Sector Planning and Strengthening of BWDB

28. In 1979, there was a joint GOB/IDA review of BWDB which recommended:(a) improving water sector planning, (b) strengthening the implementationcapacity of BWDB; and (c) rehabilitating operating BWDB schemes. As aresult, UNDP financed, with the Bank serving as Executing Agency, twoprojects: Improving Water Sector Planning and Strengthening theImplementation Capacity of BWDB. Under the first project, revised proceduresfor planning water sector projects were adopted. The project also preparedterms of reference for a Water Sector Master Planning Program, which resultedin a third UNDP-financed and Bank-executed project, initiated in January1983, to prepare a water sector master plan and develop a permanent MasterPlanning Organization. The Strengthening of the Implementation Capacity ofBWDB project proposed programs to: (a) establish the position of Member,Operations and Maintenance (O and M) 1/ and a separate 0 and M unit at thedivisional level in BWDB; (b) provide greater delegated authority to ZonalChief Engineers and staffs; and (c) identify problems resulting from deferred

1/ A Member of the Bangladesh Water Development Board has the rank of aDeputy or Joint Secreltary and has administrative responsibilities.

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maintenance. The Government and BWDB have followed through on theserecommendations. A Member, 0 and M, has been appointed to BWDB, additionaldelegation of authority to field staff has been instituted, and an assessmentof needs for rehabilitating operating sclhemes is now being undertaken.

Operation and Maintenance of BWDB Schemes

29. BWDB has responsibility for 0 and M for all of its projects. Fundingfor 0 and M comes from the Government's revenue budget. The growing numberof irrigation projects which BWDB has completed over the past two decades hasresulted in increased 0 and M costs. To date, cost recovery from thebeneficiaries has been practically nil because of a reluctance to collectwater charges. Hence, implementation and 0 and M costs continue to burdenthe Government's budget. Cost recovery of water subsector projects has beena continuing subject of discussion between GOB and IDA. Recently, GOB hastaken steps to begin recovering costs from the farmers. The Irrigation WaterRate Ordinance 1983, which was promulgated in July 1983, and the IrrigationWater Rates Rules, 1984, which came into effect in January 1984, provide forthe imposition of water charges for irrigation schemes (see paragraph 52).Inadequate funding in the Government's revenue budget has been one of themain reasons for the extensive deferred maintenance of BWDB schemes, whichhas resulted in inefficient operation and reduction in benefits. In additionto a lack of funds, 0 and M has suffered because of neglect by field staffwho have concentrated their efforts on implementation. Under the proposedproject, BWDB, with the approval of' the Irrigation, Water Development andFlood Control Division (IWDFC) in the Ministry of Agriculture, plans toimprove 0 and M for large schemes by decentralizing the BWDB organizationin four pilot divisions under its Member, 0 and M (see paragraph 36). GOBis also planning to transfer the responsibility for 0 and M for smallschemes, including collection of water charges for irrigation schemes, to theUpazila Parishad (upgraded Thana) administration (see paragraphs 17 and 37).

PART IV - THE; PROJECT

30. The proposed project was prepared by BWDB, assisted by consultants,and was appraised by an IDA mission that visited Bangladesh in June 1983.A Staff Appraisal Report (Report No. 4815-BD, dated April 10, 1984) is beingdistributed separately. A timetable of key events relating to the projectand special conditions of the credit are listed in Annex III. Negotiationswere held in Washington in February, 1984. The Government of Bangladesh wasrepresented by a delegation led by Dr. S.H.K. Eusufzai, Member, PlanningCommission.

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Project Obiectives and Description

31. The objectives of the project are: (a) increased agriculturalproduction by expanding areas under high-yielding rice and wheat cultivationthrough improved drainage and irrigation, and by reducing crop losses throughthe provision of increasedl flood control; (b) the strengthening of BWDB'simplementation capacity for small schemes and 0 and M for large schemes; and(c) support of the transfer of 0 and M responsibilities for completed smallschemes to local bodies.

32. The project would include about 30 quick-yielding, low cost per acre,and high rate of return flood control, drainage, and irrigation subprojects.Among these subprojects would be a number that had been appraised by IDA forpossible inclusion in the Small. Scale Flood Control, Drainage and IrrigationProject financed by IFAD but which had to be omitted because they could notbe accommodated within the limits of IFAD's available resources. The totalnumber of subprojects to be completed would be flexible depending upon theirsize and type. With the flood protection measures envisaged, flooding cannotbe totally avoided since rainfall would cause flooding when sluice gates areclosed during high flood stage. However, the severity of such flooding wouldbe significantly reduced, compared to "without project" conditions. Drainageschemes would be undertaken on lands with no flooding problems or combinedwith flood protection measures.. Such schemes would permit adequate rainwaterstorage in depressions (beels) or drainage channels (khals) to meet plannedirrigation and fishery requirements. Irrigation schemes would be based onprimary pumping from adjacent rivers or khals to a system of irrigationchannels which would deliver water to farmers' fields by gravity. This wouldpermit a second crop in the dry season. Farm ditches for distribution ofwater beyond the outlets of the channel system and farm drainage channelswould be included under the scheme and detailed layouts would be prepared.

Proiect Components

33. Small Schemes Subprojects. There would be four major divisions ofsubprojects: (a) flood control and drainage; (b) drainage alone; (c) floodcontrol alone; and (d) irrigation. The subproject mix (eight flood controland drainage, about 64,000 acres; eight drainage, 78,000 acres; six floodcontrol, 59,000 acres; and five irrigation, 24,000 acres) used in the for-mulation of the project is based on a preliminary list of BWDB-identifiedschemes. To avoid delays in project implementation, the Government engaged aconsulting firm which has prepared feasibility studies for ten subprojects ofwhich six have been selecl:ed for the first year of implementation. Fourfeasibility studies were available at appraisal: the Kangsha River sub-project (flood control and drainage), the Kalaroa subproject (drainage), theBighai River subproject (flood control), and the Chenchuri subproject(irrigation). These four subprojects were used as typical examples toestimate overall costs and benefits of the project. Feasibility studies forthe remaining subprojects would be financed under the proposed project (seeparagraph 35).

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34. The criteria which would serve as broad guidelines for selectingsubprojects would include: (a) base costs of about US$2.4 million or less;(b) base costs of drainage and flood control subprojects of about US$150 peracre or less; (c) base costs of irrigation subprojects including fieldchannels of about US$400 per acre or less;, (d) size of benefited area fordrainage and flood control to range between 2,500 and 20,000 acres, and forirrigation between 1,000 and 10,000 acres; (e) flood depth in flood protec-tion schemes not to exceed 4.5 ft. over 80% of the area; (f) landholdingpatterns in the subproject areas which would permit a large number of farmersto benefit; at least 70% of the farm families would operate holdings of threeacres or less; (g) a maximum of two construction seasons for completion ofcivil works; (h) beneficiaries would. indicate strong general support for thesubproject and be prepared to participate actively in its implementation,including providing funds for on-farm deve!lopment in irrigation subprojectsand subsequent 0 and M; and (i) a subproject's economic rate of return wouldbe at least 20%. The Government would select the subprojects in accordancewith criteria satisfactory to IDA (Section 3.02 of the draft DevelopmentCredit Agreement). Subprojects which fully meet the guidelines could bestarted without prior IDA approval. GOB would, however, send the feasibiilityreport to IDA. In the case of subprojects with proposed works of improvementwhich may affect the flow of international streams, IDA would not be able tofinance such subprojects unless there was a pritDr agreement amongst thecountries concerned. When a subproject does not meet the guidelines fully,the feasibility report would need to justify its inclusion in the project andIDA concurrence would be obtained before work is started.

35. Strengthening BWDB Implementation Capacitv. The project wouldprovide assistance to BWDB in the areas of planning, design and construction.To strengthen BWDB's capability to implement the proposed project and futureprojects of a similar nature, the project would provide: (a) technical assis-tance for preparation of feasibility studies, designs and monitoring andevaluation; (b) technical assistance for construction supervision;(c) training of BWDB's project personnel; and, (d) transport and officeequipment. Field staff associated with the Zonal Chief Engineers generallyhave the capacity to implement the simple subprojects envisioned for theproposed project. Experience in Bangladesh with similar projects indicatesthat one of the main constraints to timely implementation has been completionof feasibility plans and final designs for construction. The estimatedtechnical assistance requirement for completing required feasibility studiesis about 24 man-months of expatriate and about 168 man-months of localexperts. To overcome the design constraint, BW.DB has established a DesignCell in its Project Planning Schemes III Directorate (PPS III). Detaileddesign of subprojects would be the responsibility of this cell, which wouldbe assisted by about 36 man-months of expatriate and 800 man-months localexperts. Technical assistance for construction planning and constructionsupervision is estimated at about 90 man-months of local experts. For theevaluation of the proiect's impact, separate lozal consultants would beemployed. The Government would, by January 1, 1985, employ consultants whose

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qualifications, experience and terms and conditions of employment would besatisfactory to IDA (Section 3.03 of the draft Development Credit Agreement).Training of BWDB staff would include workshops, seminars, and visits tosimilar projects. The program would include centralized workshops at Dhakafor senior staff, regional seminars for the field staff on the pattern of theon-going program under the Small Scale Drainage and Flood Control Project(Credit 955-BD), and overseas training in specialized areas.

36. Strengthening BWDB 0 and M Capacity. The project would providefunding for a Pilot Decentralized 0 and M Program in four divisions in linewith the program envisaged in the Strengthening of the ImplementationCapacity of BWDB Project (see paragraph 28). This program would assign fullO and M responsibility of all large scale BWDB operational projects within adivision to specific staff and would provide this staff with adequate fundsto carry out their responsibilities. The staff of these divisions woulddevote themselves almost exclusively to improvement of system performancethrough routine and protective maintenance. Their planning and constructionresponsibilities would be limited generally to rehabilitation of operatingschemes. This divisional staff would include an Executive Engineer,Subdivisional officers, and support staff, including pump and gate operatorsat the Subdivisional level. The project would provide required transport,equipment materials, and labor. Also, the project would provide a limitedamount of technical assistance (about four man-months expatriate experts) tohelp the staff in planning and carrying out their assigned responsibilities.It is envisaged that implementation of this program would begin with one"pilot" division becoming operational during FY85 and the remaining threebecoming operational in FY86. BWDB would submit a detailed program of workand staff requirements for each "pilot" area, for comment by IDA, byJanuary 1, 1985 for the first division and by July 1, 1985 for the remainingthree divisions (Section 3.08 of the draft Development Credit Agreement).Experience from the pilot areas would be reviewed and would be used as inputinto a wider program of BWDB systems rehabilitation which may be assisted byIDA.

37. The Government intends to make 0 and M of small subprojects (asincluded in the proposed project) the responsibility of beneficiaries to beadministered through the responsible Upazila,l/ but details have yet to beworked out. Such transfer of 0 and M responsibility would, however, taketime and until it is completed, BWDB would continue to be responsible. TheGovernment would furnish to IDA, by January 1, 1986, for comment, detailedproposals for the gradual transfer of responsibility for 0 and M of thefacilities included in the Project to the Upazilas (Section 4.02 (b) of thedraft Development Credit Agreement). The Government would also ensure that

1/ The Upazila (an up-graded thana) is a unit of local government with anelected council comprised of 6-15 unions. (A union is made up of 6-12villages).

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adequate funds will be allocated out of its budget for the 0 and M of thesubprojects (Section 3.01 (b) of the draft Deve:Lopment Credit Agreement).Also, in view of the Governiment's current financial constraints, IDA wouldinclude reimbursement of 0 and M expenditures for the subprojects on adeclining basis under the proposed project (see paragraph 48).

Proiect. IMlementation

38. BWDB would be the principal implementing agency, responsible for thedesign, construction, operiation and maintenance of all the project works.For the construction of on-farm irrigation, and drainage ditches, the cost ofwhich is .o be borne by the farmers, IMP would 'provide the necessary techni-cal assistance (see paragraph 27). BWDB would be responsible for the designand layouit of the farm irrigation ditches and farm drainage channels inirrigation subprojects and, upon agreement by the beneficiaries to bear thecost of on-farm development and the 0 and M costs, supervise the constructionand synchronize the completion of the ditches and channels with the comple-tion of the main system (Section 3.07(a) of the draft Development CreditAgreeraent). Under the Chief Engineer, Planning I in BWDB, the PPB III wouldbe re,ponsible for the coordination of planning and implementation. A designcell which has been created within PPS III' has begun the preparation ofdetailed desig-.s (see paragraphs 35 and 41). The implementation of the PilotYlecertralized 0 and M Program would be the responsibility of the Member, 0

39. Coordination at the National Level The existing Departmental ProjectEvaluation Committee in the Division of Irrigation, Water Development andFlood Control (IWDFC) in the Ministry of Agriculture would coordinate projectimplementation, This committee is chaired by the Secretary IWDFC, and itsmembers include Joint Secretary IWDFC, Chairman BWDB, and representatives ofthe National Planning Commission, External Resources Committee, FinanceDivision, and Establishment Division. For the project, the committee'smeeti,.gs would include representatives of concerned GOB agencies such asBRDB, BADC, DAE, Department of Fisheries (DOF), and Ministry of LocalGovernment (Section 3.09 of the draft Development Credit Agreement). Thecommittee would give final. approval for the selection of subprojects, assureadequate assistance/participation from all agencies, and resolve problemsinvolving policy issues that may arise during implementation.

40. Coordination at the Field Level. To encourage active participationof the farmers at all stages of project plannintg and implementation, a PolderCommittee would be established for each subproject before finalization offeasibility studies or before commencement of construction where feasibilitystudies have already been completed. Such a Committee would consist of the

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Chairmen of the Union Parishads 11 where the polder is located, at least twocooperative managers, the Upazila based support staff of DAE, DOF, BRDB,BADC, etc., and BWDB's Engineer responsible for the polder area, and severalfarmers. The Committee would be used as a forum to: disseminate informationon planning, implementation, 0 and M of the subproject and seek farmers'reactions and consent; seek the active participation of farmers in 0 and M ofsubprojects; discuss and oversee agricultural field demonstrations; and takeother necessary actions in support of the subproject's objectives.

41. Implementation Schedule The project implementation period would befive years. Construction would start on six subprojects in the first yearand about eight in the second year, nine in the third year, and four in thefourth year. In order to ensure the timely acquisition of the land requiredfor the construction of the embankments and other structures included in theProject, the Government would take all action necessary to acquire, as andwhen needed, all such lands as may be required for carrying out the project(Section 3.06 of the draft Development Credit Agreement). A condition ofcredit effectiveness would be that land required for construction during thefirst year of the project had been acquired by the Government (Section 6.01(d) of the draft Development Credit Agreement). Completion of the detaileddesigns for the six subprojects for the first year, satisfactory to IDA,would also be a condition of credit effectiveness (Section 6.01 (c) of thedraft Development Credit Agreement).

Monitorin and Evaluation

42. Monitoring of physical progress and related costs would be theresponsibility of BWDB. However, the evaluation of the project's impactwould be done by a consultant. The Government would, not later than April 1,1985, furnish to IDA for its co'mments a detailed plan for monitoring thebeneLits to be derived from the project and to evaluate the impact of theproject on the agricultural development in the project area (Section 3.05 (c)of the draft Development Credit Agreement).

Proiect Costs

43. Total project cost is estimated to be US$58.0 million, with a foreignexchange component of US$14.0 million or 24%. Estimates were formulated onthe basis of the costs of the four appraised subprojects and are based onmid-1983 prices (adjusted to the expected time of credit negotiations), andinclude US$2.7 million in taxes and duties. Physical contingencies amount to10% of base costs. Price contingencies are estimated as follows: years oneto three, 8%; and years four and five, 7.5% for domestic price increases; andyear one, 9.5%; year two, 8.7%; year three, 7%; and years four and five, 6%

11 The Union Parishad is the smallest unit of local government, with anelected council, comprising about 6-12 villages.

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for international price increases. The domestic price increases used for theproposed credit are lower than for other projects in Bangladesh because theproposed project has a large component of local labor for earth works.

Financing

44. The proposed IDA credit of SDR 40.2 million (US$41.5 millionequivalent) would finance 75% of total project cost net of taxes and duties.The credit would finance 94% (US$13.1 mi'llion) of foreign exchange costs andabout 69% (US$28.4 million) of local cosi:s excluding taxes and duties. UNDPis expected to finance the technical assistance and training (US$2.3 million)on a grant basis. The Government and farmers would cover remaining projectcosts (US$14.2 million), including taxes and duties and land acquisition,with farmers bearing the cost of on-farm development comprising irrigationditches and field drains. IDA would finance the local costs of preparatorywork consisting of investigations and surveys for the first year's sub-projects incurred after June, 1983. Such retroactive financing would notamount to more than about US$0.3 million

Procurement

45. Civil Works (US$27.0 million including contingencies) are relativelysimple, mostly small and scattered and would b;e unsuitable for internationalcompetitive bidding (ICB). Contractors f'or civil works construction would beselected on the basis of competitive bidding advertised locally under proce-dures acceptable to IDA. For works costing the equivalent of US$150,000 ormore, tender documents would be sent to IDA for review before bids areinvited, and bid evaluations before the contract is awarded. Investigationsand Surveys (US$0.4 million) work would be impLemented through force account,or procured through contracts awarded under local competitive bidding (LCB)procedures acceptable to IDA.

46. Equipment (US$3.6 million) is of two types: (i) primary pumpingequipment for irrigation; and (ii) other (e.g. transport and officeequipment). Spares amounting to about 10% of the equipment value would beprocured with the equipment. Generally, all equipment would be procuredfollowing ICB procedures in accordance with IDA guidelines. For procurementunder ICB, a preference limited to 15% of the CIF price or the prevailingcustoms duty, whichever is lower, would be exte!nded to local manufacturers inthe evaluation of bids. Small off-the-shelf items costing less thanUS$10,000 for each contract, which are needed urgently, may be procured aftercomparing prices from not less than three independent suppliers in accordancewith procedures acceptable to IDA. Such ?rocurement would not exceed acumulative total of US$50,000.

47. Operation of completed subproject works would be the responsibilityof BWDB personnel (until the Upazila administration takes over) while main-tenance of works would be carried otit under petty contracts awarded followingprocedures acceptable by IDA. Consultants would be engaged for:

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(i) preparing feasibility studies of the remaining subprojects: (ii) detaileddesign of works and construction supervision; as well as (iii) examining theimpact of the project on production and social conditions. There would betwo consultancy contracts: one for the remaining feasibility studies,detailed designs and construction supervision, and one for evaluating theimpact of selected subprojects. Estimated technical assistance base costswould average US$9,200 and US$750 per staff month for expatriate and localspecialist services respectively, inclusive of salary, fee, overhead, inter-national travel, and subsistence.

Procurement Procedures (US$ million)

Procurement MethodProject Element ICB LCB Other Total Cost

Investigations & Surveys - 0.2 0.2 0.4(0.2) (0.2) (0.4)

Land Acquisition - 7.3 7.3Civil Works - 27.0 - 27.0

(23.8) (23.8)Equipment 3.6 - - 3.6

(2.9) (2.9)Technical Assistance - 2.3 2.3Engineering & Administration - - 3.5 3.5

(3.5) (3.5)0 & M - - 13.9 13.9

_=__ (10.9) (10.9)

Total 3.6 27.2 27.2 58.0(2.9) (24.0) (14.6) (41.5)

Note: Figures in parentheses are the amounts to be financed by IDA.

Disbursement

48. Disbursements from the proposed IDA credit would cover: (a) Civilworks, 94%; (b) Equipment and spares, 100% of foreign expenditures, 100% oflocal expenditures (ex-factory cost) and 65% of local expenditures for otheritems procured locally; (c) Investigations and surveys, 100%; (d) BWDBadministration and engineering, 100%; (e) 0 and M, (i) Subprojects, 100% inthe first year after completion of each subproject, 60% in the second yearand 30% in the third year; and (ii) Pilot Decentralized Program, 80%; and (f)Initial Deposit in the Special Account to refinance items under (a) above.

49. Full documentation would be sent to IDA in support of withdrawalapplications except for items (d), (e) and the portion of item (c) carriedout by force account. For these three items, applications would be supported

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by certified statements of expenditure. The actual documentation would beretained by BWDB at a central location and made available to IDA on request.

Project Special Account

50. Project works are to be carried cut by a large number of small con-tractors whose efficiency often depends upon the speed at which they receivepayment for completed work. Payments are frequently delayed on BWDB projectsbecause of delays in transferring funds from the Government to BWDB. Toremove this impediment, a Special Account (in Taka) would be establishedunder the proposed project. Opening the Account would be a condition ofcredit effectiveness; the Government would thereafter maintain the account ina commercial bank on terms and conditions satisfactory to IDA (Sections6.01 (b) and 2.02 (b) of the draft Developmenit Credit Agreement). Themaximum available balance in the Special Account would not exceed US$3.0million, which amounts to three month's requirements on the basis of theagreed construction program.

Accounts and Audit

51. The Government would maintain records adequate to identify physicalprogress and financial transactions relating to the project. Separateaccounts would be kept for all expenditures for which credit withdrawalswould be made on the basis of statements of expenditure. Independentauditors acceptable to IDA would audit the project accounts each year. Theauditors' report would be sent to IDA within nine months of the close of eachfiscal year, and would include an opinion as to whether the credit fundsdisbursed against statements of expenditure had been used for the purposesfor which they were provided (Section 4.01 of t:he draft Development CreditAgreement).

Cost Recovery

52. Prior to the promulgation of the Irrigation Water Rate Ordinance 1983(July, 1983) and the Irrigation Water Rates Ru:Les, 1984 (January, 1984),farmers were required to pay water charges amounting to 3% of the gross valueof production from the irrigated lands (see paragraph 29); however, actualcollection was insignificant. Under the 1983 O)rdinance, Government would aimat recovering the full 0 and M costs of irrigation projects. The Governmentproposes to charge the beneficiaries on the basis of crop areas irrigated byproject and would revise the applicable rate season by season. BWDB wouldcontinue to be responsible for assessing payment obligations. The rates forthe first year are expected to cover about 35% of 0 and M. A condition ofcredit effectiveness would be that water rates had been set and come intoeffect at levels satisfactory to IDA (Section 6.01(e) of the draftDevelopment Credit Agreement). The Government would (i) gradually set waterrates at levels sufficient to enable BWDB to recover from the beneficiariesof its gravity irrigation schemes increasing portions of the cost of 0 and Mand (ii) cause BWDB to improve its collection procedures, all in accordance

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with a program satisfactory to IDA, with the view to recover the cost of0 and M by July 1, 1990 (Section 4.03 of the draft Development CreditAgreement). A condition of effectiveness would be that such a program hadbeen furnished to IDA (Section 6.01(f) of the draft Development CreditAgreement).

53. With regard to flood control and drainage subprojects, theGovernment's current view, which is accepted by IDA, is that cost recovery isnot feasible at this stage. While it is possible to determine aggregatebenefits derived from such subprojects or average per acre benefits, it wouldbe difficult to design and enforce a cost recovery scheme geared to farmersability to pay in a situation where they experience widely varying cultiva-tion risks, depending on the location and quality of their land. On theother hand, imposing charges based on average conditions would not beequitable. Since land values are likely to reflect differences inproductivity, a land improvement tax would be a more feasible means ofachieving cost recovery in this type of subproject. However, due to theabsence of an effective land taxation system in Bangladesh, this alternativeis not practicable at present.

Project Benefits and Justification

54. The project would raise crop production and farm incomes throughimprovements in the water regime on about 225,000 acres. The proposedproduction levels would be achieved without additional minor irrigationequipment and without major changes in the availability of extension advice.Over 80,000 farm families, or nearly 480,000 people, would directly benefitfrom the project. Incremental farm employment would reach about 5.9 millionman-days at full development -- an increase of about 30% over the presentsituation. Demand for hired farm labor would more than double in floodcontrol and drainage subprojects and increase almost tenfold in irrigationsubprojects, providing employment opportunities for the 39,000 landlessfamilies who live in the project area. Based on the assumption that onaverage the unappraised subprojects would produce the same results as thefour appraised subprojects the economic rate of return for the project as awhole would be about 30%.

55. The project is expected to have a limited net effect on theenvironment. Flood control subprojects would have some minor adverse impacton: soil fertility due to the elimination of soil nutrients brought byfloods; beel fishing due to lacking replenishment of fry and fingerlings; andboat transport on khals due to construction of sluice structures at theconfluence with rivers. Additional use of manure, periodic fingerlingseedings, and load transfer from khal boats to river boats would be necessaryactions to offset these effects, which will involve only limited expense.The Department of Fisheries will be represented on the Project EvaluationCommittee which will review each subproject to ensure that any adverse impacton fisheries will be minimized. The environment would improve from thereduced duration of flooding, improved access and reduced damage to property.

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Drainage subprojects would have a beneficial effect by reducing areas withhigh moisture, thus lessening the adverse impact on human and animal health.Irrigation subprojects would replenish groundwater, decreasing the pos-sibility of wells running dry.

Risks

56. Implementation delays, particularly due to land acquisition, are arisk facing the project. Therefore, land acquisition for the first year'sconstruction program (six subprcjects) would be a condition of crediteffectiveness, and the Government would in the following years acquire thenecessary land ahead of the respective construction seasons (see paragraph41). Another risk is that subprojects would not gain the full support of thepopulation concerned. To minimize this riskl, the subproject selectionguidelines require that beneficiaries indicate strong general support for andbe prepared to participate in implementation and subsequent 0 and M ofsubprojects; Polder Committees would be formed for each subproject to ensurethe active participation of the farmers (see paragraphs 34 and 40).

PART V - LEGAL INSTRUMENTS AND AUTHORITY

57. The draft Development Credit Agreement between the People's Republicof Bangladesh and the Association and the Recommendation of the Committeeprovided for in Article V, Section l(d) of t:he Articles of Agreement arebeing distributed to the Executive Directors separately.

58. Special conditions of the project are listed in Section III ofAnnex III. Additional conditions of effectiveness of the proposed creditwould be: (a) UNDP Project Document has been executed and delivered (Section6.01 (a) of the draft Development Credit Agreement; (b) the Special Accounthas been opened (Section 6.01 (b) of the draft Development Credit Agreement);(c) detailed designs for the first year's suLbprojects had been completed(Section 6.01 (c) of the draft Development Credit Agreement); (d) BWDB hadacquired land for the first year of construction (Section 6.01 (d) of thedraft Development Credit Agreement); (e) water rates had been set at levelssatisfactory to IDA (Section 6.0L(e) o:E the draft Development CreditAgreement; (f) a program satisfactory to IDA for increasing water rates andimproving collection procedures had beean furnished to IDA (Section 6.01(f) ofthe draft Development Credit Agreement); and (g) the Project Proforma 1/ hasbeen approved (Section 6.01 (g) of the draft Development Credit Agreement).

1/ The Project Proforma is an internal document of the Government,approval of which is a prerequisite for the release of funds and thehiring of staff.

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59. I am satisfied that the proposed credit would comply with theArticles of Agreement of the Association.

PART VI - RECOMMENDATION

60. I recommend that the Executive Directors approve the proposed credit.

A. W. ClausenPresident

Washington, D.C.April 12, 1984

-22- Annex IPage 1

T A B L E 3A

BANGLADESH - SOCIAL INDICATORS DATA SHEETBANGLADESH REFERENCE GROUPS (WEIGHTED AVERAGES) Ia

MOST (MOST RECENT ESTIMATE) /bRECENT LOW INCOME MIDDLE INCOME

1960/ 1970/ ESTIMATE/b ASIA & PACIFIC ASIA 6 PACIFICAREA (T1OUSAND SQ. A)

TOTAL 144.0 144.0 144.0AGRICULTURAL 95.2 97.0 97.5

GNP PER CAPITA (US$) 40.0 60.0 140.0 276.7 1028.6

ENERGY CONSUMPTION PER CAPITA(KILOGRAMS OF COAL EQUIVALENT) .. 28.0 49.0 398.4 792.8

POPULATION AND VITAL STATISTICSPOPULATION,MID-YEAR (THOUSANDS) 53491.0 68117.0 90660.0URBAN POPULATION (% OF TOTAL) 5.1 7.6 11.6 21.5 32.9

POPULATION PROJECTIONSPOPULATION IN YEAR 2000 (MILL) 156.1STATIONARY POPULATION (MILL) 430.2YEAR STATIONARY POP. REACHED 2145

POPULATION DENSITYPER SQ. Rd. 371.5 473.0 614.7 161.7 260.7PER SQ. KM. AGRI. LAND 561.9 702.5 908.3 363.1 1696.5

POPULATION AGE STRUCTURE (X)0-14 YRS 44.3 46.3 42.8 36.6 39.4

15-64 YRS 52.5 51.1 54.6 59.2 57.265 AND ABOVE 3.2 2.7 2.6 4.2 3.3

POPULATION GROWTH RATE (I)TOTAL 1.9 2.4 2.6 1.9 2.3URBAN 3.6 6.3 6.5 4.0 3.9

CRUDE BIRTH RATE (PER THOUS) 53.5 49.2 47.0 29.3 31.3CRUDE DEATH RATE (PER THOUS) 28.1 22.7 17.5 10.9 9.6GROSS REPRODUCTION RATE 3.6 3.4 3.1 2.0 2.0

FAMILY PLANNINGACCEPTORS, ANNUAL (THOUS) .. 373.0 1607.0USERS (% OF MARRIED WOMEN) .. .. 12.0 48.1 46.6

FOOD AND NUTRITIONINDEX OF FOOD PROD. PER CAPITA(1969-71-100) 106.0 101.0 93.0 111.4 125.2

PER CAPITA SUPPLY OFCALORIES (X OF REQUIREMENTS) 87.0 85.0 84.0 98.1 114.2PROTEINS (GRAMS PER DAY) 44.0 43.0 42.0 56.7 57.9OF WHICH ANIMAL AND PULSE 9.0 9.0

7.0/c 13.9 14.1

CHILD (AGES 1-4) DEATH RATE 24.9 23.0 19.7 12.2 7.6

HEALTHLIFE EXPECT. AT BIRTH (YEARS) 37.3 41.6 47.8 59.6 60.2INFANT MORT. RATE (PER THOUS) 159.0 150.3 134.7 96.6 68.1

ACCESS TO SAFE WATER (XPOP)TOTAL .. 45.0 53.0/d 32.9 37.1URBAN .. 13.0 15.o71 70.8 54.8RURAL .. 47.0 55.07W 22.2 26.4

ACCESS TO EXCRETA DISPOSAL(X OF POPULATION)

TOTAL .. 6.0 5.O/e 18.1 41.4URBAN .. .. 40.0/e 72.7 47.5RURAL .. .. .. 4.7 33.4

POPULATION PER PHYSICIAN .. 8430.0 10940.0 3506.0 7771.9POP. PER NURSING PERSON .. 76810.0 24450.0 4797.9 2462.6POP. PER HOSPITAL BED

TOTAL .. 7020.0/f 4

500.0/c 1100.6 1047.2URBAN .. 820.07f 630.07? 298.4 651.1RURAL .. .. 23360.07? 5941.6 2591.9

ADMISSIONS PER HOSPITAL BED .. .. .. .. 27.0

aOUSINGAVERAGE SIZE OF HOUSEHOLD

TOTAL 5.9/ 5.BUREAN .. ~~~~~ ~ ~~~~ ~~6.17l 6. 1...URBANI

RURAL .. 5.9/g 5.8

AVERAGE NO. OF PERSONS/ROOMTOTAL .. ..URBAN .. ..RURAL .. ..

ACCESS TO ELECT. (X OF DWELLINGS)TOTAL .. .. 3.5URBAN .. ..RURAL .. ..

-23- Annex I

Page 2T A B L E 3A

BANGLADESH - SOCIAL INDICATORS DATA SHEETBANGLADESH REFERENCE GROUPS (WEIGHTED AVERAGES) /a

MOST (MOST RECENT ESTIMIATE) /bRECENT LOW INCOME MIDDLE lINCO'D

19 60 -1-b 1970- ESTIMATE- ASIA & PACIFIC ASIA & PACIFIC

lDUCATIONADJUSTED ENROLLtiENT RATIOS

PRIMARY: TOTAL 47.0 52.0 62.0 96.1 101.2:ALE 66.0 68.0 76.0 107.8 106.0FEMALE 26.0 34.0 47.0 8Z.9 97.5

SECONDARY: TOTAL 8.0 19.0 15.0 30.2 44.9MALE 14.0 29.0 24.0 37.3 50.0FEMALE 1.0 d.0 6.0 22.2 44.6

VOCATIONAL (X OF SECONDARY) 1.0 0.8 14.3 2.3 18.5

PUPIL-TEAClER RATIOPRIMARY .. 45.0 44.0 34.4 32.7SECONDARY ., 26.0 21.0 18.4 23.4

ADULT LITERACY RATE (7.) 21.6 23.0/h 26.01c 53.5 72.9

CONSUMPTIONPASSENGER CARS/THOUSAND POP .. 0.4 0.4 1.6 9.7RADIO RECEIVERS/THOUSAND POP .. 6.0 8.0 96.8 113.7TV RECEIVERS/THOUSAND POP .. .. 0.9 9.9 50.1NEWSPAPER ("DAILY GENERAL

INTEREST") CIRCULATIONPER THOUSAND POPULATION .. .. 4.7 16.4 54.0

CINEMA ANNUAL ATTENDANCE/CAPITA .. .. .. 3.6 3.4

LABOR FORCETOTAL LABOR FORCE (THOUS) 19252.0 23611.0 32341.0

FEMALE (PERCENT) 1.Z 16.6 17.7 33.3 33.6AGRICULTURE (PERCENT) 87.0 86.0 74.0 69.0 50.9INDUSTRY (PERCENT) 3.0 3.0 11.0 15.8 19.2

PARTICIPATION RATE (PERCENT)TOTAL 36.0 34.7 35.7 42.5 38.6MALE 58.7 55.9 57.0 54.4 50.7FEMALE 11.4 11.9 13.0 29.8 26.6

ECONOMIC DEPENDENCY RATIO 1.3 1.4 1.3 1.0 1.1

INCOME DISTRIBUTIONPERCENT OF PRIVArE INCOMERECEIVED BY

HIGHEST 5Z OF LiOUSEHOLDS 18.31h .. 14.6/j 16.5 22.2HIGHEST 20% OF HOUSEHOLDS 44.57W 44.1/i 42.272 43.5 48.0LOWEST 20% OF HOUSEHOLDS 6.97W 8.7i7 6.9/j 6.9 6.4LOWEST 407 OF HOUSEHOLDS 17.97b 19.67i 18.27t 17.5 15.5

POVERTY TARGET GROUPSESTIMATED ABSOLUTE POVERIY INCOMELEVEL (US$ PER CAPITA)

URBAN .. .. 13 9

.0/c 133.9 194.5RURAL .I. .. 1.07 111.6 155.0

ESTLMATE0 RELATIVE POVERTY INCOME-V- (v-, P;- wAPITA)

URBAN .. . .. .. 178.0

RURAL .. . .. .. 164.d

ESTIMATED POP. BELOW ABSOLUTEPOVERTY INCOME LEVEL (7)

URBAN .. .. 86

.0/c 43.8 24.4RURAL .. .. 86.07W 51.7 41.1

NOT AVAILABLENOT APPLICABLE

N 0 'C E S

/a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among theindicators depends on availability of data and is not uniform.

/b Unless otherwise noted, Data for 1960' refer to any year between 1959 and 1961; "Data for 1970 between 1969 and1971; and data for "Most Recent Estimate" between 1]979 and 1981.

/c 1977; /d 1976; /e 1975; /f 1972; /g 1973; /h 1963; /i 1967; /j 1974.

May 1983

-24-Annex IrPage 3

'oygII:,... cc cI:A. l'N1co ccA,~

totes altough he dta or crun feo ccuost icierlly cccedtio ic ccccrceet c iS cl cn~o ccdciI h.ictocIccrO.-cutcice'icc'cot h --itnc -tttalleo-pA`ohl becaus-e *cish Ill ocI of fceocoardle,o eafintelvIcc ccI cccccapa ccl c doioccc"Icc"I' "I oi In.)101c 10Ccd.- Thy cacc -r,ccehle ofltdeecteocr fcantd, nioceacc i c.rucce etl o_ c eccocilcc c ee..

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1977 sod 1980 dota. -d ttoLcoc urIg ar-d u,ustvn-;coo y ore a pa,se e

191 n 11 dc. oc,ato erIcelaltd ttl.uha,an url- outtanIdtt

lIble 1971, and 19 dots. ccclocc te-hy Bc y tcehlenorepiligplnlal asda

tOotONS"'tPTIll PER CAPITA - Actual appar..o. t_sseInatceccb Ielbt tore ct a con tfidb-a-ysta btb ai-1 tetedlcel

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pealer noohsao."roecn iaot by rho baod 00bOe .yholgrocl trsfrtatarcltur-j I-d -Lbo oretofrein,froey uto n

anPosp cl 1rat; 0Ih d-l, 190-nd1901an.Yo eltlry,deatr o gals orr p-gdo-tta tobr- f rro.Inot supply of ted per dey. no sayly otfod s1f4 e at. dhon...Ptelvl oa ,la tat Ivo -ot -ttl ae o eal atltateo

P.P 1aoivao of960 gaso oa rnl o t i 1 ot faoo n ecnoo of" total,f malee tid fonlo optoso fhtIe a geeret penonlirlyysm poP n,o btb00get hud1e970lprtt. ho 16, 90 ad111dn. hceoehae trI'.prlrptoeee

ISoal r 0c hotos ft rm fsttcont o 3aecm tto egtsoo csrtonuro o .thr., i-tpotaion.ndtn. noeredThr toldFodinii 11-6,190ad 90 aa.tcoov eeneca sla-Oci o opltInaoe I i t-O ' II oar0Perotyna rotlt utnr fos ttel al ytto- roren npp ifeto th toa aortrt

dreir tio osol ti tlos t6 gay per070 ddat70-19h-5 Itad11data.I.. Ill . roin liTl" oi r IYfOl .y.l.

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ooca,.tpreodtadrte fro life dale.96,17t ad18 dr.buchla

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has.. nrra.rasroofbe oos tlrtyytrrth ototooradraa Ofooo fpouuio abo odrrlloo00 hs0t

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fb1ooooor bto `and aIr-ardycsrbre yta rteoto i FroP ostc acolyoT aeedo Pro(ledtt.v .teprtroprlnrrond -IattII iossolloct-vns,t- 1.d,AOalt 1903-oi

-25- ANNEX 1Page 4

EANGLADESH

ECONOMIC INDICATORS

Population: 91.55 million (January 1982)GNP Per Capita: US$140 (1982)

Amount(million USS Average Annual Increase (Z) Share of GDP at Market Prices (Z)

in current prices) (in constant Prices) (in current Prices)Indicator FY82 FY60-70 FY70-75 FY75-80 FY8O-82 FY60 FY70 FY75 FY80 FY82

NATIONAL ACCOUNTSGross domestic product /a 10,947 4.0 -0.6 5.5 3.5 100.0 100.0 100.0 100.0 100.0Agriculture /a 5,107 3.1 -1.3 3.3 2.4 59.9 56.9 62.5 53.4 46.7Industry /a 1,506 7.9 -3.2 6.4 3.8 7.7 9.6 11.3 12.7 13.8Services /a 4,334 4.9 3.3 8.1 4.9 30.1 30.0 26.2 34.0 39.6

Consumption 11,373 4.4 -0.7 6.0 3.5 92.4 92.8 99.2 98.0 103.9Gross domestic investment 1,506 10.9 -10.9 2.0 -6.5 6.9 11.3 8.1 16.7 13.8Exports of goods & nfs 841 0.3 -11.7 3.4 9.3 10.0 8.3 3.0 7.8 7.7Imports of goods & nfs 2,774 8.8 -12.0 6.1 1.4 9.3 12.5 10.3 22.5 25.3

Gross national savings -111 26.5 -17.7 22.1 -38.8 0.9 6.1 1.0 4.0 -1.0

Amount(million US$ Composition of Merchandise Trade (%)

in current prices) (in current prices)FY82 FY73 FY75 FY8O FY82

MERCHANDISE TRADEMerchandise exports 627.0 100.0 100.0 100.0 100.0Primary a 193.9 40.4 31.5 29.6 30.9Manufactures 433.1 59.6 68.5 70.4 69.1

Merchandise imports 2,587.0 100.0 100.0 100.0 100.0Food 360.8 44.1 42.2 30.2 13.9Petroleum 560.6 3.2 11.1 16.2 21.7Machinery &lequipment 676.1 13.8 11.5 23.0 26.1Other 989.5 38.9 35.2 32.0 38.2

FY74 FY75 FY76 FY77 FY78 FY79 FY80 FY81 FY82

PRICE AND TERMS OF TRADE INDICES (1972/73=100)GDP Deflator 140.6 240.7 183.1 177.2 203.6 216.8 252.7 267.3 295.9Exchange rate (Tk/US$) 7.9661 8.8759 14.8521 15.4667 15.1215 15.2228 15.4777 16.3447 20.0400

Export price index 104.5 119.0 103.4 108.9 126.5 160.9 198.9 175.7 147.7Import price index 144.9 187.8 180.2 178.2 168.7 208.9 234.9 263.9 261.5Terms of trade index 72.1 63.4 57.4 61.1 75.0 77.0 84.7 66.6 56.5

As % of GDP(at current prices)

FY75 FY77 FY80 FY82

PUBLIC FINANCECurrent revenue 5.4 9.5 10.5 11.6Current expenditure 4.5 7.8 7.7 8.4Current surplus (+) or deficit (-) +0.9 +1.7 + 2.8 + 3.2Capital expenditure 3.1 9.5 13.3 12.4Foreign financing 2.4 6.0 8.2 8.0

FY60-70 FY70-75 FY75-80 FY80-82OTHER INDICATORSGNP growth rate (%) 4.2 -0.6 6.5 3.3GNP per capita growth rate (g) 1.5 -3.0 4.0 0.9

= not available= not applicable

/a At market prices./b Raw jute and tea.

ASADDAugust 31, 1983

-2.6- Annex 1

BANGLADESH

BALANCE OF PAYMNTS, EXTERNAL CAPITAL AND DEBT

(million US$, in current prices)

BALANCE OF PAYMENTSActual Estim. Projected

FY75 FY76 FY77 FY78 FY79 FY80 FY81 FY82 FY83 FY84

Net exports of goods -1,059 -903 -470 -859 -946 -1,650 -1,822 -1,960 -1,685 -1,790Exports of goods 344 372 405 490 610 722 711 627 655 750Imports of goods -1,403 -1,275 -875 -1,349 -1,556 -2,372 -2,533 -2,587 -2,340 -2,540

Net exports of services 21 - 7 -29 -32 -28 4 15 -70 -90 -102Workers' remittances 35 29 60 113 143 210 379 412 600 650

Gurrent account balance -1003 -882 -439 -778 -831 -L436 -1.428 -1,618 -1,175 -1.242

Direct private investment .. . . .MLT loans (net) 498 498 238 :398 420 581 513 498 540 607Grants & grant-like flows 382 245 265 393 553 592 584 697 720 735Other capital flows (net) 274 87 17 -39 -16 145 307 295 -57 -100

Change in reserves (- - increase) -151 53 -81 25 -124 119 24 128 -28 -

International reserves (end of period) 266 213 294 269 393 274 250 122 150 150Reserves as months of imports of next year 2.4 2.6 2.4 1.9 1.8 1.2 1.1 0.5 0.7 0.6

ActualFY75 FY76 '?Y77 FAu78 FY79 FY80 FY81 FY82

GROSS DISBURSEMENTSOfficial grants 382 245 265 3 93 553 592 584 697Gross disbursements of MLT loans 519 564 268 435 477 631 562 539

Concessional 458 533 244 401 456 600 541 467Bilateral 343 390 144 262 213 273 255IDA 113 128 86 88 153 152 170 158Other multilateral 3 15 14 51 91 177 83

Non-concessional 60 31 24 35 20 30 21 72Official export credits 19 - - - - - - 4IBRDOther multilateral 27 18 6 2 3 17 3 26Private 15 13 18 32 17 13 19 42

EXTERNAL DEBTDebt outstanding & disbursed (end of period) 1,355 1,797 2,053 2,571 2,951 3,216 3,615 3,979

Official 1,233 1,689 1,940 2,436 2,808 3,067 3,491 3,835IBRD 55 55 55 55 55 55 55 55IDA 255 380 466 554 707 859 1,027 1,181Other 923 1,254 1,419 1,E27 2,047 2,154 2,379 2,599

Private 122 108 113 135 142 149 124 144Undisbursed Debt 1,019 948 1,016 1,335 1,659 1,718 2,103 2,666

DEBT SERVICETotal debt service payments 31 88 59 69 95 94 92 87

Interest 10 22 28 32 38 43 42 47Payments as Z of export earnings 7.3 20.3 12.7 12.1 13.1 10.6 10.0 10.3Payments as 2 of GNP 0.2 1.2 0.9 0.8 1.0 0.8 0.7 0.8

Average interest rate on new loans (%)Official 2.0 1.6 1.5 1.3 1.3 1.2 1.6 1.8Private 2.3 7.8 6.4 6.2 6.1 6.9 10.8 9.0

Average maturity of new loans (years)Official 36.2 42.2 40.6 38.6 36.3 34.2 35.0 35.6Private 15.3 11.3 11.0 9.5 14.8 19.3 7.6 11.5

BANK GROUP EXPOSURE (7)IBRD DOD/total DOD 4 3 2 2 1 1 1IBRD disbursements/total gross disbursements - - - - - - -

IBRD debt service/total debt service - 1 5 4 4 3 4IDA DOD/total DOD 18 21 22 21 24 26 28IDA disbursements/total gross disbursements 21 22 32 20 32 24 32IDA debt service/total debt service 3 2 5 5 4 6 7

IBRD/IDA Lending,Dec. 1982 (mill. US$)

As % of Debt OutstandingTERM STRUCTURE at End of June 1982 IBRD IDA

Maturity structure of debt outstanding (%) Outstanding & Disbursed 54.9 1,270.0Maturities due within 5 years 16.9 Undisbursed - 1,047.9Maturities due within 10 years 41.6 Outstanding, incl. Undisbursed' 54.9 2,317.9

Interest structure of debt outstanding (Z)Interest due within first year 1.7

= not availablex ASADDx August 31, 1983

-27- ANNEX II

Page 1 of 4

ANNEX II

THE STATUS OF BANK GROUP OPERATIONS IN BANGLADESH /a

A. STATEMENT OF BANK LOANS AND IDA CREDITS (as of September 30, 1983)

AmountsLoan or (less cancellations)Credit US$ Million /bNumber Year Borrower Purpose Bank IDA Undisbursed

One loan and 29 credits fully disbursed 54.90 876.48 -

341 1972 Bangladesh Tubewells (replaces CreditNo. 208-PAK of 1970) - 14.00 0.54

487 1974 Bangladesh Telecommunications II - 20.00 2.16527 1975 Bangladesh Ashuganj Fertilizer - 62.00 1.70542 1975 Bangladesh Barisal Irrigation - 27.00 10.46605 1976 Bangladesh Karnafuli Irrigation - 22.00 6.05621 1976 Bangladesh Agricultural & Rural Training - 12.00 2.02631 1976 Bangladesh Rural Development - 16.00 5.75632 1976 Bangladesh Bangladesh Shilpa Bank - 25.00 3.54724 1977 Bangladesh Shallow Tubewells - 16.00 1.84/c725 1977 Bangladesh Muhuri Irrigation - 21.00 10.88735 1977 Bangladesh Inland Water Transport II - 5.00 1.01765 1978 Bangladesh Jute - 21.00 13.03787 1978 Bangladesh Foodgrain Storage II - 25.00 13.74825 1978 Bangladesh Small-Scale Industry II - 7.00 3.00828 1978 Bangladesh Agricultural Research - 6.00 0.91864 1978 Bangladesh Drainage & Flood Control - 19.00 11.84890 1979 Bangladesh Oxbow Lakes Fisheries - 6.00 3.87912 1979 Bangladesh Vocational Training - 25.00 17.64921 1979 Bangladesh Population & Family Health II - 32.00 26.74934 1979 Bangladesh Greater Khulna Power

Distribution - 28.00 21.44

941 1979 Bangladesh Dacca Water Supply &Sewerage II - 22.00 4.83

955 1979 Bangladesh Small-Scale Drainage &Flood Control - 25.00 20.09

964 1979 Bangladesh Highways II - 10.00 7.88990 1980 Bangladesh Low-Lift Pumps - 37.00 20.74

/a The status of the projects listed in Part A is described in a separate report onall Bank/IDA financed projects in execution, which is updated twice yearly andcirculated to the Executive Directors on April 30 and October 31.

/b Prior to exchange adjustments./c Undisbursed balance cancelled in October (effective September 29).

-28- ANNEX II

Page 2 of 4

A. Bank Loans and IDA Credits to Bangladesh (continued)

AmountsLoan or (less cancellations)Credit US$ Million /bNumber Year Borrower Purpose Bank IDA Undisbursed

1001 1980 Bangladesh Chittagong Water Supply II - 20.00 17.851023 1980 Bangladesh Fertilizer :[ndustry

Rehabilitation - 29.00 23.071032 1980 Bangladesh Jute Industry

Rehabilitation - 20.00 13.801042 1980 Bangladesh Mangrove Afforestation - 11.00 7.551054 1980 Bangladesh Education IV (Primary

Education) - 40.00 33.091065/d 1980 Bangladesh Small-Scale Industry III - 35.00 25.391091/d 1981 Bangladesh Bakhrabad Gas Development - 85.00 16.471096/d 1981 Bangladesh Fertilizer Transport - 25.00 13.281117/d 1981 Bangladesh Bangladesh Shilpa Bank II - 50.00 27.641124/d 1981 Bangladesh Technical Assistance IV - 16.00 11.121140/d 1981 Bangladesh Hand Tubewells - 18.00 12.751147/d 1981 Bangladesh Agricultural Credit - 40.00 27.241184/d 1982 Bangladesh Drainage & Flood Control II - 27.00 24.011194/d 1982 Bangladesh Imports Program X - 100.00 10.621204/d 1982 Bangladesh Chittagong lJrea Fertilizer - 15.00 13.531205/d 1982 Bangladesh Textile Industry

Rehabilitation - 30.00 27.581215/d 1982 Bangladesh Extension & Research II - 27.00 23.231247/d 1982 Bangladesh Chittagong Port - 60.00 57.071254/d 1982 Bangladesh Ashuganj Thermal Power - 92.00 87.401262/d 1982 Bangladesh Rural Electrification - 40.00 38.041287/d 1982 Bangladesh Deep Tubewells II - 68.00 63.941300/d 1983 Bangladesh Imports Program Xi - 110.00 75.011301/d 1983 Bangladesh First Highway Project

(Supplemental) - 6.00 5.191318/d 1983 Bangladesh Business Management

Education & Training - 7.80 7.721321/d /e 1983 Bangladesh Telecommunications III - 35.00 34.351349/d /e 1983 Bangladesh Public Administration

(Training and PersonnelManagement) - 12.00 11.73

/d Credits funded out of IDA's 6th Replenishment denominated in SDRs. Amounts ofprincipal are calculated at the rate of exchange in effect at the time ofnegotiations; amounts undisbursed are calculated at the rate of exchange in effecton September 30, 1983, and the US$ equivalent for fully disbursed credits fundedout of IDA's 6th Replenishment is calculated at the rate of exchange in effect onthe dates of disbursement.

/e Not yet effective.

-29- ANNEX II

Page 3 of 4

A. Bank Loans and IDA Credits to Bangladesh (continued)

AmountsLoan or (less cancellations)Credit US$ Million /bNumber Year Borrower Purpose Bank IDA Undisbursed

1357/d /e 1983 Bangladesh Energy Efficiency andRefinery Rehabilitation - 28.50 28.00

1384/d /e 1983 Bangladesh Rural Development II - 100.00 98.0813961d /e 1983 Bangladesh Agricultural Training II - 8.10 8.031399/d /e 1983 Bangladesh Sugar Rehabilitation and

Intensification - 20.00 19.441402/d /e 1983 Bangladesh Petroleum Exploration

Promotion - 23.00 22.64

Total 54.90 2,577.88 1.096.54of which repaid - 1.63 -

Total now outstanding 54.90 2,576.25Amount sold 0.00 0.00

Total now held by Bank and IDA 54.90 2,576.25Total undisbursed 1,096.54

/d Credits funded out of IDA's 6th Replenishment denominated in SDRs. Amounts ofprincipal are calculated at the rate of exchange in effect at the time ofnegotiations; amounts undisbursed are calculated at the rate of exchange in effecton September 30, 1983, and the US$ equivalent for fully disbursed credits fundedout of IDA's 6th Replenishment is calculated at the rate of exchange in effect onthe dates of disbursement,

/e Not yet effective.

-30- ANNEX II

Page 4 of 4

B. STATEMENT OF IFC INVESTMENTS (as of September 30. 1983)

Fiscal Amounts in US$ MillionYear Obligor Type of Business Loan Equity Total

1979 Highspeed Shipbuilding &Heavy Engineering Co., Ltd. Shipbuilding 1.20 0.36 1.56

1980 Industrial Promotion andDevelopment Company of DevelopmentBangladesh, Ltd. Finance Company - 1.05 1.05

Total gross commitments 1.20 1.41 2.61less cancellations, terminations, repayments and sales - - -

Total now held by IFC 1.20 1.41 2.61

Total undisbursed 0.65 - 0.65

-31-

ANNEX IIIPage 1

BANGLADESH

BWDB SMALL SCHEMES PROJECT

Supplementary Proiect Data Sheet

Section I: Timetable of Key Events

(a) Time taken to prepare project:

1 year

(b) Agencies preparing the project:

BWDB

(c) Date of first preparation mission by IDA:

February 1983

(d) Date of appraisal mission:

June 1983

(e) Date of completion of negotiations:

February 24, 1984

(f) Planned date of effectiveness:

90 days after signature

Section II: Special IDA Implementation Action:

None

-32-

ANNEX IIIPage 2

Section III: Special Conditions of Effectiveness would be:

(a) acquisition of land for the first year of construction(paragraph 41);

(b) completion cf detailed design for the first year ssubprojects (parag;raph 41);

(c) execution and delivery of the UNDP Project Document(paragraph 44);

(d) opening of the Special Account (paragraph 50);

(e) setting of water rates satisfactory to IDA(paragraph 52); and

(f) furnishing to IDA a program for increasing water ratesand improving collection procedures (paragraph 52).

OtherConditions: The Government would:

(a) not later than January 1, 1985 employ consultants whosequalifications weres satisfactory to IDA to assist insubproject selection, planning and design and in thesupervision of construction and in the evaluation of theimpact of selected subprojects (paragraph 35); and

(b) gradually set: water rates at levels sufficient to enableBWDB to recover from the beneficiaries increasingportions of 0 and M costs and cause BWDB to improve itscollection procedures, all in accordance with a programsatisfactory to IDA, with a view of achieving 0 and Mcost recovery by July 1, 1990 (paragraph 52).

90°38' 90°40' 9042' 90-44' OCTOBER 1983

BAN GLADES H Proposed Bridge--- Proposed Stream Diversion

BWDB SMALL SCHEMES PROJECT _ Project BoundaryKANGSHA DRAINAGE AND FLOOD CONTROL SUBPROJECT Proposed Flood Embankment.

0 Proposed Sluices- Roads

-9 -.----.-- ~~~~~~~~~~~~~~~RailwaysX 8 > )5ze1 ".'-_ '',' j / '> ' -- ' Rivers

1 229~~~~~~~~~~~~~~~~~~~C:- Lakes

2> /= . -7z .-~ -- '2' ~-' Drainage Channels6, __ .- S S -3G--- Contours in feet

( ~~~~ <.25-' --- /,~~~~~~~~~~~~ .---- I~~~~~nternationol Boundaries

(C ~ (30/-t 0 .5 1.0 1,5 2.0

,< , S b'hobori U' '1 (R S ('MILES

I~~~ _GuzalS, 7', 25>9, ' j-i ''> ~ Sj,,-f f \X

/ ijiS 5 '' 'C),; k \\ ;

9-;3 0-

24-5 , COi ' 24'5'

> S Pro/ert~~~~~§9 Theo/dak/hr, ealuabt

< -\ChhonoA arc n ongrao oroBhobarrpur

'-<r.t4\<>> . G 5 boun ( \orkono

r~~~~~~~~~~~U

26'~~~~~~~~-

Th0 S-rdp h-ob pioredin9 by,i

avyi,vrno o- Iof th0 so

ssl 71 1f-..j-of ori fG.o or -N-y fo,eCdorn hoo rh. -oo,n 9-t901'

7 1 sud btund b-d.. s

09 v~~~~~~t, - .of4O 9042 90'54 VETAKAI

I

IBRD 17472

89'02' 89°04 89°06' OCTOBER 1983

BANGLADESH

BWDB SMALL SCHEMES PROJECTKALAROA DRAINAGE SUBPROJECT

- . -__Project Boundory

Proposed Bridge

. Proposed Sluice

-.-__.. Proposed Droinoge Chonnels

-22.5 Ri.v\ . . . . - Lokers 22°58'

Lokes

-20- Contours in feet

Internationol Boundaries

7 ~~~~~~~MILES0 .5 1\0 .. 5 2.0

22 ' = ' ' This map has b-en prepared byThe World Bank's staff exclusr-elyfor the convenience of the

A - ; -- s.1 -. , t X _ \\ !,i oo\. tX readers and is excbsivee for theinternal use of The World hankand the Intenational FinanceCorporatho. The denoirnationsused arid the boundarnes shownon this map do not inply, on thepart of The Word hank and theinterational Finance Corporation.any iudgment on the legal StatUof any territory or anyendorsement or acceptance ofsuh boundaries.

, 'f _1 24' 22-52'' 1 l'

$&I r 9i0 C2 i 6.jQ8'4 89-06'

I

IBRD 17473983w -9 IKi / OCTOBER 1983

4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

De7 0,

INDIAI DI

BANGLADESH /lo '>'nken 222; 2 n Y/

A-, ~ ~ ~ ~ ~ ~ ~ I

-22

\8_ 9t, 9 J,_

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22'18'22'18' _

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on rhejj ter st j<u or -n >eTmf or3 '-V eno5mXtwtF>f3C bn n

BA NGL ADES H

BWDB SMALL SCHEMES PROJECTBIGHAI FLOOD CONTROL SUBPROJECT '''j< (

-Project Boundary----cProposed Flood Eusbonkn,ent

01 Proposed SluicesExisting Flood Embonkment

I-Rivers and Streams

Roads

Contours in feet

22114'-22'14 '-- Internotional Boundaries

0 .5 .0 15 2.0 MILES Th npnrnb -r rRrr5uxxttrrerrrernrI I I I urn~~~~~~th red-r -nd -ern-ely fur tMe.rrrt nun .f Th. World B.W,*ed tIrehetmere

Pur-- Co.neeon The d-erenIr- -ed -nd Mre Irerdre utenere ff. err d. ourenk -n pet- Pd TIre Vord rdr Bnkd fte tIt-rehen Fk.-en Cenneete. -OVjrnr,rrt

ente "Inu uthn of eny tenhory en urn euouer-t or ecept-o Pr uuh bo-udenu..90"06' 90T8. 90-10- 01--

I

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;____________- * ____-- 9 2 - _____ IBRD 17474s~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~OCTOBER 1983

BANGLADESH6 ( . BWDB SMALL SCHEMES PROJECT

s> y__ /,\X\\CHENCHURI BEEL IRRIGATION SUBPROJECT&' t-lA.DES,4

24 .akh / 24-

INDIA

-22' 'Ianibarpur

8_8_ 9OG1 912;

o bkhGandh lba i , ,

W g p~~~~~~l / 15 ___)

15~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1f~~~~~~~~~~~~~~~~~~~~l l/gr ,t \n

teelgorden \

Project Boundary , molopurExisting Embankment

(V Proposed Pumping StationProposed Main CanalTypical Irrigotion Scheme:

2 CFS OUTLET - CHANNEL*S , 50 ACRES NET IRR/GA T-ON

'--MAINV CANAL GAoshour ' 0 M/dl° _- Proposed Drainage Channels

DrainsRiver Kuadango

Contours in feet /- Roads

International Boundories

// - _ _= T ~~~~~~~~~~Loha9t

NAA'A IL> <X/< Gorden Da7 / MILES

;~~~~~~~~~~~~~~~~0.51 01. 5,~w

1' ( -'--- -'-'' -7 ' ' i ' \1~~~~~~~~~~N

8'9\ L90- 92D

BANGLADESH

BWDB SMALL SCHEMES PROJECT_4;) ' f5,noGvuhz7t Subproject Locations

0 SUBPROJECT LOCATIONS-26 a \ '\ ¢ \ K \ F-NanCed by: 26-

Cl- . aakurgoon \ )< r -- ; ~~~~~~~~IFADIDA

^-. \ . t \ '. | RAILWAYS

t \ \ .~~~~~~~~~ -~~DISTRICT BOUNDARIES. . 0 __ . ., *-* ~~~~~~~~~INTERNATIONAL BOUNDARIES

-25- ' .~ y |r Chhotak 2 + 25°-Jngsha Draragen

O) -/cYod B O Ofi _ /ood Control

IDiA : - \ ' '/ F < ' -' ( RA t k / ) = L X % H~~~~~~~~~~~~~~~~~~Fabigoj1z

-5 < ~~~~~) . /3 ' VANGA~~~~~~~~IL /0t

-24- BNA Is h u Jaydpur 2 240I

L.A I ) hoanberiaX I I\I D I A

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2~~~~~~~~~~~~ 50 100. KIBO.ETERS

z~~~~~~~~~~~~~~~~~~~~~~~~~~z

MI )ANKA -9fi2 -I~ 9KHULA . . iH

t ,- X \> ~~~~~~~~~~~~~~RANGAMATI,

t Zbe convenb De ol thrr th : ' ' a ,gjpA,a~~~Bo, ~f/soa . onf.rol CHITTAGONc

Ga1-11 Tllr bi1aKslFac .i- 5

at t or The Wca'd t az1; d 1f/ t 25 50 7 MILS BU.RMAe: g. mism~ ~~~~~~~~~~~-1 21''9>Cvv to it, ., ,=J, .:

5R Ar NKA -<r

| SRI LANKA ~~~~~~~~~~ ~~ ~ ~~~~~~90t 9 92' P I i si~~~~~~~~1

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