013 PCR PDF

Completion Report
Project Number: 36297-013

Loan Numbers: 2265 and Cofin 8225
September 2016
Bangladesh: Secondary Towns Water Supply and

Sanitation Sector Project
This document is being disclosed to the public in accordance with ADB’s Public Communications
Policy 2011.
CURRENCY EQUIVALENTS
Currency Unit – taka (Tk)
At Appraisal At Project Completion

(21 May 2006) 30 June 2014
Tk1.00 = $0.0144 $0.0129
$1.00 = Tk69.685 Tk77.590
ABBREVIATIONS
ADB – Asian Development Bank

AIRP/IRP – arsenic and iron removal plant/iron removal plant
CBO – community-based organization
DEAS – double-entry accounting system
DMF – design and monitoring framework
DPHE – Department of Public Health Engineering
EIRR – economic internal rate of return
EMP – environmental management plan
FAPAD – Foreign Aided Projects Audit Directorate
FIRR – financial internal rate of return
GAP – gender action plan
IEC – information, education, and communication
LGD – local government division
MDS – management, design, and supervision
NGO – nongovernment organization
OFID – OPEC Fund for International Development
OHT – overhead tank
O&M – operation and maintenance
OPEC – Organization of Petroleum Exporting Countries
PCR – project completion report
PIU – project implementation unit
PMU – project management unit
PPME – project performance monitoring and evaluation
PSC – project steering committee
PTW – production tube well
PWSS – pourashava water supply section
SDP-WSSB – Sector Development Programme–Water and Sanitation Sector
in Bangladesh
SPAR – subproject appraisal report
SWP – safe-water point
SWTP – surface water treatment plant
TLCC – town-level coordination committee
TNA – training need assessment
WACC – weighted average cost of capital
WEIGHTS AND MEASURES
km (kilometer) – unit measurement for length

m3 (cubic meter) – unit of volumetric measurement
l (liter) – unit of volumetric measurement
NOTES
(i) The fiscal year (FY) of the government ends on 30 June. FY before a calendar
year denotes the year in which the fiscal year ends, e.g., FY2016 ends on 30
June 2016.
(ii) In this report, "$" refers to US dollars.
Vice-President W. Zhang, Vice President, Operations 1

Director General H. Kim, South Asia Department, (SARD)
Director K. Higuchi, Bangladesh Resident Mission, SARD
Team leader M. S. Alam, Senior Project Officer (Urban Infrastructure), SARD

Team members M. S. Haque, Project Analyst, SARD
In preparing any country program or strategy, financing any project, or by making any
designation of or reference to a particular territory or geographic area in this document, the
Asian Development Bank does not intend to make any judgments as to the legal or other status
of any territory or area.
CONTENTS
Page
BASIC DATA i
I. PROJECT DESCRIPTION 1
II. EVALUATION OF DESIGN AND IMPLEMENTATION 2
A. Relevance of Design and Formulation 2
B. Project Outputs 3
C. Project Costs 5
D. Disbursements 6
E. Project Schedule 6
F. Implementation Arrangements 6
G. Conditions and Covenants 7
H. Consultant Recruitment and Procurement 7
I. Performance of Consultants, Contractors, and Suppliers 8
J. Performance of the Borrower and the Executing Agency 9
K. Performance of the Asian Development Bank 9
III. EVALUATION OF PERFORMANCE 10
A. Relevance 10
B. Effectiveness in Achieving Outcome 10
C. Efficiency in Achieving Outcome and Outputs 11
D. Preliminary Assessment of Sustainability 11
E. Impacts 12
IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13
A. Overall Assessment 13
B. Lessons 14
C. Recommendations 14
APPENDIXES
1. Design and Monitoring Framework 16
2. Performance Criteria 26
3. Works Accomplished in Phase 1 27
4. Works Accomplished in Phase 2 28
5. Institutional Strengthening of DPHE and Pourashavas 29
6. Major Works - 100% Financed by Government 31
7. Cost Comparison 32
8. Annual Disbursement 33
9. Implementation Schedule 34
10. Status of Compliance with Loan Covenants 35
11. Consultants Actual Inputs 42
12. List of Nongovernment Organizations 43
13. List of Office Equipment and Civil Works 44
14. Status of Gender Action Plan 51
15. Economic and Financial Analyses 56
BASIC DATA
A. Loan Identification
1. Country Bangladesh
2. Loan Number 2265 and Cofin 8225
3. Project Title Secondary Towns Water Supply and
Sanitation Sector Project
4. Borrower People’s Republic of Bangladesh
5. Executing Agency Department of Public Health Engineering
6. Amount of Loan SDR27,588,000
7. Project Completion Report Number 1593
B. Loan Data
1. Appraisal
– Date Started 15 May 2006
– Date Completed 21 May 2006
2. Loan Negotiations
– Date Started 7 September 2006
– Date Completed 9 September 2006
3. Date of Board Approval 16 October 2006
4. Date of Loan Agreement 8 November 2006
5. Date of Loan Effectiveness

– In Loan Agreement 8 February 2007
– Actual 31 January 2007
– Number of Extensions 0
6. Closing Date
– In Loan Agreement 30 June 2013
– Actual 13 July 2016
– Number of Extensions 2
7. Terms of Loan
– Interest Rate 1% during grace period and 1.5% per annum
thereafter
– Maturity (number of years) 32
– Grace Period (number of years) 8
8. Terms of Relending (if any)

– Interest Rate 7%
– Maturity (number of years) 20
– Grace Period (number of years) 5
– Second-Step Borrower None
ii
9. Disbursements
a. Dates
Initial Disbursement Final Disbursement Time Interval
15 November 2007 9 December 2014 85 months
Effective Date Original Closing Date Time Interval

31 January 2007 30 June 2013 77
b. Amount (SDR’000)
Category Last Net
or Original Revised Amount Amount Amount Undisbursed
Subloan Allocation Allocation Canceled Available Disbursed Balance
01 – CW, water supply 14,971 18,229 3,131a 18,229 17,026 1,203
02A – CW, sanitation 1,756 1,576 1,576 1,361 215
02B – Equipment 471 469 469 284 185
02C – Nongovernment 834 584 584 534 50
organizations
03A – Consulting services 4,038 2,131 2,131 2,238 -106
03B – Vehicles and 212 211 211 196 15
office equipment
03C – Recurrent cost 137 136 136 160 -24
04 – Interest charges 974 968 968 700 268
05 – Unallocated 4,195 152 152 0 152
Total 27,588 24,457 3,131 24,457 22,499 1,958b
Equivalent $ 41,000 37,465 5,000 37,465 34,738 2,727
CW = civil works; SDR = special drawing right.
a
SDR3,130,968 canceled on 29 November 2007.
b
Canceled on 5 April 2015.
10. Local Costs (Financed)

- Amount ($) 40,424,645
- Percent of Local Costs 68.9
- Percent of Total Cost 66.6
C. Project Data
1. Project Cost ($ million)
Cost Appraisal Estimate Actual
Foreign Exchange Cost 21.30 2.02
Local Currency Cost 49.77 58.61
Total 71.07 60.63
2. Financing Plan ($ million)

Cost Appraisal Estimate Actual
Implementation Costs
Borrower-Financed 20.49 16.55
ADB-Financed 39.54 33.67
Other External Financing (OFID) 8.99 7.71
Community 0.59 1.63
Total 69.61 59.56
IDC Costs
Borrower-Financed 0 0
ADB-Financed 1.45 1.07
Other External Financing 0 0
Total 1.45 1.07
ADB = Asian Development Bank; IDC = interest during construction; and OFID = OPEC Fund for International Development.
iii
3. Cost Breakdown by Project Component ($ million)

Component Appraisal Estimate Actual
A. Base cost
1. Water supply improvements 36.07 47.26
2. Sanitation improvements 5.71 5.78
3. Institutional development 8.11 4.40
B. Taxes and duties 9.64 2.11
C. Contingencies 9.52 0.00
D. Interest charges 2.02 1.07
Total 71.07 60.62
4. Project Schedule
Item Appraisal Estimate Actual
Date of Contract with Consultants
a. MDS consultants July 2007 29 June 2008
b. Capacity building consultants July 2007 10 July 2008
c. Information, education, and communication July 2007 2 July 2009
campaign
d. Community mobilization through NGOs September 2007 Various in 2009 and 2011
Completion of Engineering Designs June 2009 September 2010
Civil Works Contract
Date of award December 2008 19 February 2009
Completion of work June 2013 30 June 2013
Equipment and Supplies
Dates
First procurement February 2007 29 June 2008
Last procurement September 2009 24 April 2012
Completion of equipment installation June 2013 30 June 2014
Start of Operations
Completion of tests and commissioning Various dates Various dates
Beginning of start-up Various dates Various dates
MDS = management, design, and supervision; NGO = nongovernment organization.
5. Project Performance Report Ratings

Ratings
Development Implementation
Implementation Period Objectives Progress
From 26 October 2006 to 31 December 2006 Satisfactory Satisfactory
From 1 January 2007 to 31 December 2007 Satisfactory Satisfactory
From 1 January 2014 to 30 June 2014 Satisfactory Satisfactory
iv
D. Data on Asian Development Bank Missions

No. of No. of Specialization
Name of Mission Date Persons Person-Days of Members a
Fact-finding 23 January–7 February 2006 3 48 d,d,i
Appraisal 15–21 May 2006 4 28 c,d,d,i
Review 1 20–31 August 2008 3 36 a,a,d
Review 2 22 February–8 March 2009 3 45 a,3,h
Review 3 13–28 October 2009 2 30 a,e
Review 4 7–22 April 2010 2 32 a,e
Review 5 8–20 December 2011 2 23 a,e
Review 6 (MTR) 10–24 April 2011 3 42 a,e,h
Review 7 1–12 March 2012 3 29 e,h
Review 8 13–25 September 2012 2 26 b,e
Review 9 3–18 March 2013 3 48 b,e,h
Review 10 15–24 September 2013 3 25 b,e,h
Review 11 2–18 March 2014 2 32 e,h
Review 12 3–18 August 2014 4 20 b,e,h
Project completion review 30 January–3 March 2016 2 16 e,f
a
a = engineer, b = project analyst, c = counsel, d = economist, e = project officer, f = consultant, h = gender
specialist, i = urban development specialist, MTR = midterm review.
I. PROJECT DESCRIPTION
1. The Asian Development Bank (ADB) approved the Secondary Towns Water Supply and
Sanitation Sector Project on 26 October 2006 with cofinancing from the OPEC Fund for
International Development (OFID). The project was planned to be implemented over 6 years,
from 2007 to 2012, in 2 phases, with a loan closing date of 30 June 2013. Phase 1 was to last 2
years and Phase 2 to last 4 years. The project was extended twice, by six months each time,
with a revised loan closing date of 30 June 2014. The project was designed to use a demand-
and performance-driven approach to extend water supply and sanitation to approximately
853,000 people in 16 selected secondary towns (pourashavas). The Department of Public
Health Engineering (DPHE) was the executing agency and the 16 pourashavas were the
implementing agencies.
2. The expected impact of the project was to improve the living conditions and health
standards in participating pourashavas and the sustainability of their water utilities. The
expected outcomes of the project were: (i) increased quantity and improved quality of the water
supply in project towns; (ii) improved community awareness of the link between proper hygiene,
sanitation, and health, particularly among women and children; (iii) increased sanitation
coverage; (iv) improved capacity of secondary towns to implement, operate, manage, and
maintain water supply and sanitation investments; (v) improved capacity of DPHE to plan,
design, supervise, monitor, and provide technical assistance to local water utilities; and (vi)
management options consistent with the water and sanitation sector development program in
Bangladesh. The outcome of the project was sustainable access to improved and safe water
and sanitation services in the project areas.1 The project had three outputs: (i) water supply
improvements (part A); (ii) sanitation improvements (part B); and (iii) institutional development
(part C). The project components through which the outputs were delivered are discussed in
paras. 10–20. The project’s design and monitoring framework (DMF) is in Appendix 1.
3. The water and sanitation sector is an extremely high priority for the Government of
Bangladesh. According to government statistics, urban centers contribute more than 40% to the
country’s gross domestic product. Inadequacy of urban services, including water and sanitation,
are severe hindrances to the continued development of urban areas, as well as efforts to reduce
severe poverty. In recognition of this, the government included the improvement of water supply
and sanitation as part of its seven-point strategic agenda for reducing poverty in its 2005
poverty reduction strategy (PRS).2 The PRS aims, among other things, to reduce poverty by
30% and child mortality to 31 per 1,000 live births by 2015. The government was committed to
achieving the Millennium Development Goals, including reducing by half the proportion of
people without sustainable access to a safe water supply and sanitation by 2015, and by two-
thirds the under-5 mortality rate, which in Bangladesh was significantly affected by waterborne
diseases.
4. Government goals and the priority given to providing access to safe drinking water and
appropriate sanitation were reflected in the Sector Development Programme–Water and
Sanitation Sector in Bangladesh (SDP-WSSB). 3 This project aimed to help the government
achieve its PRS targets and the Millennium Development Goals through assistance that
supports the clearly defined SDP-WSSB for the water sector.
1
ADB. 2006. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to People’s Republic of
Bangladesh for the Secondary Towns Water Supply and Sanitation Sector Project. Manila.
2
Government of Bangladesh. 2005. Poverty Reduction Strategy. Dhaka.
3
The SDP-WSSB was developed with support from Danish International Development Assistance and approved in 2006.
2
II. EVALUATION OF DESIGN AND IMPLEMENTATION
A. Relevance of Design and Formulation
5. ADB’s country strategy for Bangladesh recommends that ADB play a major role in
supporting policy and institutional reforms to improve governance and efficiency in the urban
water supply and sanitation sector, and build the capacity of key agencies and local government
institutions. 4 The strategy stated that future investments would be performance-based, and
designed to reward secondary towns that demonstrated the greatest progress in implementing
governance, participatory development, and other reforms. ADB aims to improve management
efficiency and institutional strengthening so that local utilities can become economically viable,
attract the investment required to serve the poor, and meet growing urban demand. The project
was designed, under a project preparatory technical assistance (PPTA), to strengthen municipal
management and local resource mobilization, foster clean urban environments, and improve
basic living conditions in secondary towns and cities.5
6. The project was relevant to the government’s decentralization policy and beneficiary
participation as seen in the Local Government (Pourashava) Act 2009 and recent Urban Policy
(draft). As per the National Policy for Safe Water Supply and Sanitation (1998), the pourashavas
have been gradually taking over the development and management of urban water supply and
sanitation facilities from DPHE. The project’s design was based on the lessons learned through
past investments that community involvement, health education, and community motivation
were essential for sustainable water supply and sanitation system development.6 The project did
not require any change in scope or major changes in DMF targets to maintain relevance.
7. The project followed a sector-lending approach and was formulated in line with the
government’s SDP-WSSB, which set forth clear and well-formulated development objectives,
investment plans, institutional arrangements, and transition plans for the water supply and
sanitation sector. To support the government’s strong priority in the water and sanitation sector,
the project’s financing structure was based on ADB’s sector-lending modality. The government
met the three requirements for sector lending: (i) a sector development plan, (ii) appropriate
sector policies, and (iii) institutional capacity to implement the plan.
8. The project had several special features, including addressing the needs of women and
vulnerable groups, to closely follow and reinforce ADB’s overall strategy for Bangladesh. The
special features are: (i) a performance-based approach: the pourashavas which could
implement rehabilitation works under Phase 1 and fulfill a set of performance requirements
(Appendix 2) received funds for Phase 2; (ii) emphasis on tariffs and financial sustainability; (iii)
supporting institutional change in pourashavas: building capacity of the technical staff through
training programs; (iv) nongovernment organization (NGO) and community participation:
developing and implementing the sanitation improvement component, and forming and training
of water-user groups by NGOs; (v) efficient contract packaging: packaging of all civil work
contracts to a limited number to minimize administrative burden and transaction costs; and (iv)
meter-based billing: outsourcing local services to read water meters, prepare and distribute bills,
and maintain customer ledgers.
9. The project was categorized as Effective Gender Mainstreaming, and has helped
women gain practical gender benefits by improving the quality and quantity of water supply and
4
ADB. 2005. Country Strategy and Program (2006–2010): Bangladesh. Manila.
5
ADB. 2004. Technical Assistance to the People's Republic of Bangladesh for the Secondary Towns Water Supply and Sanitation
Project. Manila (TAR: BAN 36297, TA 4535-BAN, approved on 24 December 2004).
6
Community involvement included town-level coordination committees, ward-level coordination committees, and water-user groups.
3
sanitation systems in their communities. The original gender action plan (GAP) was revised to
ensure women’s participation in the project activities for better results.
B. Project Outputs7
1. Part A: Water Supply Improvements
10. Works under Phase 1 rehabilitated about 185 kilometers (km) of transmission and
distribution pipelines; repaired 6 arsenic-iron removal plants (AIRP/IRP) with a capacity of 900
cubic meters (m3) per hour, 22 overhead tanks (OHTs), and one surface water treatment plant
(SWTP) with a capacity of 100 m3 per hour; regenerated 48 production tube wells (PTW); and
rehabilitated 15,354 house connections (Appendix 3). Due to regeneration of PTWs, production
capacity increased from 5,895 m3/hour to 6,053 m3/hour and the available water supply
increased from 8–10 hours/day to 12–18 hours/day. After rehabilitation, household connections
increased to 49,930 from 45,567 and 36,811 new meters were installed in 16 pourashavas. All
DMF targets and revised performance targets based on a detailed survey under Phase 1 were
surpassed.
11. Works under Phase 2: Pipeline. The project aimed to improve

pourashava infrastructure in water supply and sanitation through a performance-based strategy.
After meeting a set of performance and reform criteria (Appendix 2), all pourashavas qualified
for Phase 2. Physical works that have been accomplished under Phase 2 are summarized in
Appendix 4. A total of 811.1 km of new transmission (127.4 km) and distribution (683.7 km)
pipelines were laid, with unplasticised polyvinyl chloride, mild steel, and galvanized iron pipes.
12. Production Wells. Eighty-five new production wells were installed, exceeding the target
by 29%. Production capacity reached 13,604 m3/hour from the pre-project production level of
5,895 m3/hour. The project completion review (PCR) mission observed that while a limited
number of tube wells are operating satisfactorily for 18–20 hours a day, some are running for
only 8–10 hours a day to keep the electricity bills low. The amount of water pumped can easily
be increased further just by increasing the number of hours that pumps operate. The DMF
targets for pipelines and production wells under Phase 2 were also surpassed.
13. Water Treatment Plants. Given the presence of iron in the groundwater, the project
established 8 new IRPs, with a total capacity of 2,400 m3/hour. The project constructed four new
SWTPs at Moulvibazar, Narsingdi, Madaripur, and Pirojpur, with a total capacity of 1,500
m3/hour. The establishment of the new SWTPs was a response to the increasing demand for
safe water for the growing population and the increased concentration of minerals in the
groundwater. The treated water quality was satisfactory as monitored regularly by DPHE.
14. Overhead Tanks. The project established 16 new OHTs, with a total capacity of 10,880
m3, against the DMF target of 18. Based on the subproject appraisal reports prepared during
project implementation, the target was revised to 16 OHTs, which was fully achieved. The
pourashavas generally prefer to install more production wells than OHTs to intermittently supply
water directly to the households without having to store water, thereby reducing operating costs
for lifting water.
7
In terms of ADB Results Framework, the project contributed to the following indicators: (i) 48,200 households with new or improved
water supply compared with revised target of 49,856 households; (ii) 916 households with new or improved sanitation compared
with revised target of 914 households; and (iii) 995.7 km of water supply pipes installed or upgraded compared with the revised
target of 997 km.
4
15. Service Connections and Water Meters. A total of 36,811 meters were installed in
Phase 1, representing 100% achievement. This included rehabilitation of 15,354 existing house
connections. To increase accountability and reduce misuse of treated water, as many as 64,954
water meters were procured in Phase 2. Among them, 49,856 meters had been installed by the
end of the project; the installation of the remaining meters continues. After rehabilitation, the
number of beneficiary households increased from 45,587 to 49,930 and after expansion it
reached 93,787, an increase of 48,200. But not all households are connected to the system.
Many are using hand tube wells of their own. A total of 293 standpipes and 1,178 arsenic-free
safe-water points (SWPs) were also installed to provide services for the community and low-
income groups in areas which could not be reached by the piped network. The revised target for
SWPs (1,091) was surpassed, but for standpipes the target (618) could not be met due to
reduced demand from the community and parallel intervention from other agencies.8
2. Part B: Sanitation Improvements
16. The basic approach of the sanitation component was to increase the knowledge,
attitudes, and practices of the beneficiary population, generate an increased demand for
improved sanitation, and reduce the incidence of waterborne diseases. Besides raising
awareness, the project provided technical advice and guidance to individual households on how
to build sanitary latrines. Also with the assistance of information, education, and communication
(IEC) consultants and NGOs as well as community-based organizations (CBOs) the project
constructed community, school, and public latrines. A total of 313 community latrines, 160
school latrines, 59 public latrines, and 916 household latrines were constructed, reaching 100%
achievement (Appendix 4). In addition, 11 pilot sludge treatment plants, as agreed with ADB,
were constructed.
3. Part C: Institutional Development
17. Institutional Strengthening at DPHE. The project enhanced DPHE’s ability to manage
sector-wide investments and institutionalized its role as a technical support agency to the
pourashava water supply sections (PWSSs). The capacity building program arranged eight
types of training programs for 210 DPHE officials, covering technical, accounting, and
software/database-related aspects. A training course was also conducted for 24 participants,
including 14 from DPHE, who in turn trained the project pourashava officials.
18. Institutional Strengthening of Pourashavas. The capacity building consultants

prepared proposals for reorganizing and strengthening PWSS, which were considered by the
project steering committee (PSC) of the local government division (LGD) under the Ministry of
Local Government, Rural Development, and Cooperatives. Necessary decisions were taken for
staffing PWSSs, such as creating new positions, filling vacant positions, and upgrading the
position of water superintendent (water super) to assistant engineer. As many as 15 training
programs, covering 50 courses, were organized for 1,155 pourashava officials.
19. With support from the capacity building consultants, a double-entry accounting system
(DEAS) was introduced and final accounts of all PWSSs were prepared for FY2009 onward.
With introduction of the DEAS, fixed assets were inventoried from FY2009 and fixed-asset
registers were opened and updated. However, a few pourashavas are not maintaining updated
registers due to a shortage of trained staff. Records show that water tariffs had increased for all
types of connections. Pourashavas had been gradually shifting from the existing billing system to a
8
The DMF target was 583, which was revised during the subproject appraisal.
5
meter-based billing system, with technical support from the DPHE. Details of the institutional support
given to DPHE and pourashavas are in Appendix 5.
4. Part D: Special Features
20. In addition to the special features mentioned in para. 8, an extensive public awareness
campaign on the need for metering and tariff changes was carried out in each pourashava.
Pourashavas completely separated their water supply accounts from their accounts. A meter-
billing system and DEAS were emphasized and introduced in all project pourashavas. Sixteen
NGOs were engaged to help the project implementation units (PIUs) develop and implement the
sanitation improvement component, and to form and train water-user groups that were able to
collect user fees and operate and manage the community water supply facilities effectively.
Women played key roles in managing common facilities. Public latrines were leased out and the
lessees are managing the latrines in their respective areas, while school administrations
manage school latrines. There were five major groups of contracts for all civil works in each
pourashava, with a total of only 85 contracts in Phase 2. The process of introducing meter-
based billing system was slow as it involved replacing an age-old system. Emphasis was given
to outsourcing local services to read water meters, prepare and distribute bills, and maintain
customer ledgers. The pourashava of Natore engaged a local NGO and that of Mymensingh
used a NGO to some degree. Other pourashavas are in the process of adopting a new system
of billing and outsourcing. In the meantime, the government has approved guidelines for
outsourcing services. Based on the discussions in para. 10 to 20, and supporting appendixes 3
and 4, the expected outputs were sufficiently implemented to achieve the project outcomes.
C. Project Costs
21. The total cost of the project at appraisal was estimated at $71.1 million equivalent, which
was shared by ADB ($41.0 million, equivalent to SDR27.588 million), OFID ($9.0 million), the
Government of Bangladesh and pourashavas ($20.5 million), and the community ($0.6 million).
The total project cost at loan closing stood at $60.6 million, of which ADB shared $34.7 million,
OFID $7.7 million, and the government, along with the community, $18.2 million. The
government share included 100% financing of some items shown in Appendix 6. As the project
did not require any land acquisition and resettlement or paying taxes against import of
equipment, about $10 million of the government counterpart fund was saved. During revision of
the development project pro-forma, the government decided to finance 100% of the cost of
certain items utilizing government savings. The actual project cost is below the appraisal
estimate because ADB canceled a total of $7.7 million; $5.0 million in 2007 and $2.7 million at
loan closing as unutilized loan balance.9 OFID also canceled about $1.3 million as unutilized
loan balance. For the abovementioned reasons the project cost was less than the estimate.
Even though actual project cost is lower than that of appraisal, the implementation of designed
targets did not suffer because SDR appreciated by about 3% against the USD and USD
appreciated against the taka by about 12% between loan negotiation and closing. A comparison
of the project cost estimated at appraisal and that actually incurred is in Appendix 7 and in the
Basic Data.
9
In agreement with the government during Country Portfolio Review Mission 2007 due to slow progress and the net gain of the
dollar compared to SDR.
6
D. Disbursements
22. An imprest account was established at Bangladesh Bank into which $3.5 million was
deposited on 25 July 2007. As there was no provision for an imprest account in the OFID loan
agreement, OFID took some time to agree on a government proposal for an imprest account
with an amendment to the loan agreement. An initial advance of $0.6 million was finally
released on 16 March 2010. Works for the water-supply component of four pourashavas,
financed by OFID, faced a funding crisis because of delays in replenishing the imprest account.
A total of $7.9 million was finally disbursed to meet the expenditure under the OFID-financed
pourashavas. An amount of $0.2 million was left in the imprest account as unutilized. DPHE
returned the taka equivalent of the leftover amount to the Bangladesh Bank in two installments
(Tk11,320,292 on 8 September 2014, and Tk4,058,394 on 26 October 2015). The government
returned $196,156.x (equivalent to Tk15,378,686) to the OFID account in two installments on 12
April 2016 and 19 July 2016. Counterpart funds from the government were available on time.
ADB disbursed about $0.7 million in 2008 and continued disbursing an increasing amount,
ultimately reaching peak disbursement of $11.1 million in 2012. The OFID fund was utilized from
2010 to 2014. Its highest disbursement was $2.9 million in 2012 (Appendix 8). ADB disbursed a
total of $34.7million, which is 84.7% of the original loan amount ($41 million) and 92.7% of the
available loan amount after cancellation of $5 million. As the project started 1 year behind
schedule, limited investments were allowed in the first 2 years for the rehabilitation activities
under Phase 1.
E. Project Schedule
23. The project was to be implemented over a period of 6 years, in 2 phases, from 2007 to
2012, with a loan closing date on 30 June 2013. Rehabilitation of the existing water supply
system (Phase 1) was planned to be completed in the first 2 years and the expansion of the
water supply system and improvement of sanitation system (Phase 2) in the following 4 years.
Although the loan was made effective on 31 January 2007, within 90 days of signing of the loan
agreement, physical works could not begin until the management, design, and supervision
(MDS) consultants had been fielded in July 2008. Appendix 9 shows the actual implementation
schedule compared with the appraisal estimates. Physical progress was slow during the first 2
years due to delayed fielding of consultants and the consequently delayed preparation of
subproject appraisal reports (SPARs) for which the first contract was awarded in February 2009.
However, implementation was accelerated from the third year (FY2010) onward and all works
under Phase 1 were completed by June 2010. All works under Phase 2, including the additional
works taken up during implementation of the project, were completed within the extended loan
closing date (4 years: FY2011 to FY2014). The loan closing date was extended twice by six
months, with the physical closing date set on 30 June 2014. A number of audit observations (23)
still need to be resolved.10 Since the remaining observations were not related to any refund to
ADB, the loan was financially closed on 13 July 2016.
F. Implementation Arrangements
24. The project was implemented following the arrangements outlined at appraisal and no
changes in the implementation arrangement were required. An interministerial PSC, chaired by
the secretary of the LGD, under the Ministry of Local Government, Rural Development, and
Cooperatives, was established to provide policy guidance and overall coordination in the
implementation of the project.
10
In December 2015, there was total 81 audit observations, of which 44 was unresolved. Total 58 audit observations have been
settled so far, and 23 are in process of quick settlement. Of these, only two are under Part A.
7
25. Project Management Unit. DPHE was the executing agency and was responsible for
overall technical supervision and execution of the project. DPHE established a project
management unit (PMU) headed by a full-time project director with the rank of superintending
engineer and with the necessary technical, administrative, and accounting staff to provide
technical support, manage day-to-day operations, and maintain coordination with the field-level
PIUs.
26. Project Implementation Units. Pourashavas were the implementation agencies and
were responsible for implementing subprojects in their respective pourashavas. In each
participating pourashava, a PIU was established, headed by the mayor with a pourashava
executive engineer as the member-secretary for Phase 1. A DPHE executive engineer of the
respective district was the member-secretary for Phase 2. The PIU coordinated with the district-
level bodies to select and implement subprojects and ensure transparency through extensive
citizen participation. PIUs were also responsible for supervising NGOs and CBOs in
implementing the health and hygiene education programs.
27. Subproject Selection, Formulation, Approval, and Subproject Agreements. The

PIUs, with the help of the consultants, prepared the SPARs, in consultation with stakeholders.
DPHE and ADB thoroughly reviewed and approved each subproject in accordance with the
selection criteria for subprojects.
G. Conditions and Covenants
28. All loan covenants were complied with on time or within a reasonable time (Appendix 10)
without any modification or suspension except for the construction of a government-financed
national human resources development (HRD) center. Construction of the HRD center is
ongoing (about 50% completed): it has been delayed due to the government’s funding
constraint. Appointment of key staff is pending due to the government’s procedural
complications, indicating that compliance is partial and delayed. ADB may continue to pursue
with the government to complete the construction and appointment of key staff for the HRD
center. Subproject agreements and subsidiary loan agreements with the pourashavas were
signed for both phases on time. Timely signing of these agreements was very relevant as the
pourashavas needed to know their responsibilities and when to pay back the loan money they
had received. The tariff and financial action plan was instrumental in raising water tariffs and
following international accounting procedures. Necessary clauses had been incorporated into
the tender documents in respect of ADB’s anticorruption policy and transparency measures.
Accounts and financial statements were audited annually by the government’s Foreign Aided
Projects Audit Directorate (FAPAD). Arrangements for the transfer of funds from ADB to the
PMU and PIUs through the imprest account were satisfactory.
H. Consultant Recruitment and Procurement
29. Three sets of consultants provided support to the PMU and PIUs in the areas of project
management, feasibility study and design, institutional strengthening, and benefit monitoring
and evaluation. The procurement of consultants followed Guidelines on the Use of Consultants
by ADB and its Borrowers (2007, as amended from time to time. No problem was encountered
selecting consultants, packaging contracts, preparing the bid document, and evaluating the bid.
A summary of actual utilization of consulting services is in Appendix 11.
30. Management, Design, and Supervision (MDS) Consultants. MDS consultants

consisted of 66 person-months of international and 1,439 person-months of national consultants.
The contract, signed on 29 June 2008, had provision for 52 person-months of international and
8
1,353 person-months of domestic input, which was slightly less than envisaged at appraisal due
to the delayed start-up. Actual utilizations within the contract amount were 53.4, and 1,366.2
person-months of international and national consultants, respectively. The water supply
engineer – operations (international) was not recruited but the terms of reference were covered
by two national water supply engineers through increasing consultancy inputs.
31. Capacity Building Consultants. At appraisal, capacity building consultants comprised

60 person-months of international and 302 person-months of national consultants. The contract,
signed on 10 July 2008, had a provision for 28 person-months of international and 228 person-
months of national consultants. Actual utilization was 27.8 and 269.8 person-months of
international and national consultants, respectively. The contract, concluded on 30 June 2013,
was also implemented within the contract amount. Extended inputs for a few positions, including
that of deputy team leader, were required to support preparation of the terminal report on NGO
service and the PCR and to monitor the project’s GAP, utilizing local currency savings under the
contract.
32. Tariff and Awareness Campaign. Three IEC consultants for a total of 36 person-
months were engaged to conduct consumer and sanitation awareness programs. In order to
raise awareness, the IEC consultants produced posters, leaflets, stickers, digital banners, a
television scroll, short documentaries, development songs suitable for the local situation, etc.,
and sent the printed materials to the NGOs.
33. NGO Involvement. The general scope of activities of each NGO included a
socioeconomic survey to identify the needs of the priority beneficiaries in the community. Fifteen
NGOs (2 headed by women) were recruited for 18 months under Phase 1. An NGO for the
Choumohani pourashava could not be recruited due to a court case. This affected formation of
user groups and CBOs for Choumohani. The services of 15 NGOs were extended for Phase 2
along with a newly recruited NGO for the Choumohani pourashava. Each NGO conducted a
community survey and site assessment, conducted an information campaign, selected
beneficiaries, formed groups and organizations, offered training, and participated in planning.
The list of NGOs working in different pourashavas is in Appendix 12.
34. Procurement of Goods and Works. The PMU procured various types of office
equipment, furniture, motorcycles, and transport vehicles through 16 contract packages
between November 2007 and June 2008 (except for 3 packages that were concluded in April
and July 2012 and in January 2013). All civil works contracts (85 in all) were floated, evaluated,
and awarded by the respective pourashavas. Contracts were awarded following the procedures
of national competitive bidding acceptable to ADB. Appendix 13 shows a list of procurement of
goods and works. ADB declined to finance the construction cost for an IRP at Sherpur because
it could not agree to the tendering and evaluation process. The government financed the
construction of the IRP to complete the water supply network.
I. Performance of Consultants, Contractors, and Suppliers
35. Overall, the performance of MDS consultants was generally satisfactory. They could not
reach the desired level of performance, which affected project implementation. As DPHE
observed, this was mainly due to (i) a change of team leader twice and a few other experts for
their poor performance; (ii) the absence of the team leader at the critical moment of winding up
the project; (iii) the continuous input of the deputy team leader, which was undermined by the
fact that only 43% of the contract provisions was utilized due to some personal problems, which
affected project implementation (Appendix 11); (iv) a lack of ideas on the assigned works and
9
the work schedule; and (v) limited experience in water supply- and sanitation-related structural
works. The shortcomings were minimized through additional technical support from DPHE.
36. During Phase 1, the performance of the capacity building consultants was satisfactory.
Their formation of user groups, coordination with NGOs, preparation of training modules, and
organization of training programs were noteworthy. However, their performance in generating
the meter-billing system and developing customized software was not adequate to make the
system fully operational. These were eventually taken over by a set of DPHE engineers. Some
international experts, whose responsibilities were also covered by the national experts, lacked
practical experience. On the other hand, the IEC consultants met the project expectations.
37. The performance of the civil works contractors in eight pourashavas was satisfactory for
the simpler works. The contractors who constructed complicated water structures like AIRP/IRP
and SWTP could not perform well as most of them lacked adequate experience in this type of
construction. Some of the contractors were awarded more than one contract at different
pourashavas, hence were unable to adhere to their schedule. A few contractors faced financial
hardship and some suffered from an inadequate technical and experienced work force. Despite
the shortcomings, the contracts were completed before the loan closing date. As all structures
were adequately designed, they are now functioning properly and are being operated smoothly
by the pourashava engineers.
J. Performance of the Borrower and the Executing Agency
38. Overall, the performance of the borrower and the executing agency has been
satisfactory. The borrower ensured timely approval and adequate yearly allocations to cover the
counterpart funding requirement. The borrower was very supportive in adopting necessary
policy changes in local government resource mobilization. The government allowed
pourashavas to outsource water-meter reading and billing services to NGOs or private firms.
DPHE’s experiences in implementing two similar ADB-assisted projects helped overcome the
difficulties. 11 Learning from another ongoing ADB-assisted Dhaka Water Supply Sector
Development Project, the executing agency introduced an innovative idea to train local
plumbers to properly fix water connections. It acted promptly on the requests and
recommendations of the ADB review missions. DPHE ensured the availability of key PMU staff
throughout the project period. It also provided additional human resources to help offset
consultants’ shortcomings and the time lost. 12 Close cooperation between ADB and the
executing agency resulted in successful completion of the project.
K. Performance of the Asian Development Bank
39. At the request of the government, ADB prepared the project with assistance from a
PPTA. 13 ADB’s performance is rated as satisfactory in its timely response and providing
assistance in completing all requirements on time. An initial advance to the imprest account was
released for the project to take off. In addition to loan fact-finding and loan appraisal missions,
ADB fielded 12 review missions, including a midterm review, at regular intervals as needed to
closely review and assess the progress and identify problems and constraints. ADB closely
11
ADB. 1995. District Towns Water Supply Projects; Manila; and ADB. 2004. Second Water Supply and Sanitation Project, Manila
(Loans 571-BAN, 1264-BAN).
12
Relating to engineering, information technology, and social development.
13
See footnote 5. The PPTA team was selected through Quality and Cost Based Selection using a simplified technical proposal.
The team included 20 person-months of international and 40 person-months of national consultants, and 12 NGOs for awareness
raising, hygiene education, social mobilization, and baseline surveys. The performance of the individual PPTA consultants was
rated above satisfactory.
10
monitored and promptly acted on requests for approvals, disbursements, changes, and
modifications as needed from time to time. The executing agency highly appreciated the support
and assistance provided by ADB and OFID. ADB coordinated and resolved implementation
matters through discussion with the cofinancier and the borrower. ADB attended most of the
PSC meetings as an observer and helped make decisions on policy and implementation
matters. It also actively coordinated with OFID to expedite the disbursement process. During
implementation, ADB paid special attention to anticorruption measures and did not agree to
award a contract to any contractor under sanction. There was no significant problem with ADB
procedures.
III. EVALUATION OF PERFORMANCE
A. Relevance
40. The project is rated relevant. It was aligned with ADB’s country strategy for
Bangladesh,14 aimed at expanding access to improved water supply and sanitation, and building
the capacity of key agencies and local government institutions. The project was also aligned
with ADB’s strategy, targeting increasing access of the poor to urban facilities and
environmental improvement and protections. Considering the high demand for safe water, and
given the poor sanitation facilities contrasting with the fast urbanization rate, the project’s design
was timely and justified. The project’s design for institutional strengthening was critical for
improving the pourashavas’ technical, financial, and management capabilities and for meeting
the challenges of future urban service needs. Considering the increasing trend of rapid
urbanization, the design was relevant up to the end of the project.
41. The project design addressed the critical safe-water shortfall and environmental
sanitation conditions in the project areas. The groundwater in eight project towns contains high
iron and arsenic concentrations, which are harmful to humans. AIRP/IRP was thus chosen as a
suitable technology to treat groundwater and keep harmful elements at the allowable limit as per
Bangladesh’s standards. At the same time, accessibility of safe water from groundwater
aquifers was limited for four pourashavas due to an adequate yield or high iron and chloride
concentrations. Adequately designed SWTPs were constructed for those pourashavas. The
decision to switch from groundwater to a surface water source, to maximize water quality and
minimize the treatment cost, was a good one for the project. People living in the fringe areas of
the towns lacked access to safe water and sanitation and were therefore susceptible to serious
health and hygiene hazards. Provision of various treatment plants, safe water points, and
improved sanitation to mitigate environmental hazards was a boon for the urban population,
especially for the inhabitants of the slum and fringe areas that were generally deprived of the
benefits of the development programs. The involvement of NGOs in organizing CBOs,
implementing household water supplies, and making slum-dwellers aware of environmental
sanitation were very relevant and the outreach capability of and community development by the
NGOs were well recognized. Dissemination of an awareness campaign through leaflets, posters,
banners, etc., holding meetings, and screening short films were very relevant and useful.
B. Effectiveness in Achieving Outcome
42. Overall, the project is rated as effective. As this was a sector project, the DMF targets
were generally indicative. Achievements have been shown against the revised targets in
Appendix 1. The project either achieved or surpassed most of the outcome targets. The first
outcome of increased quantity and improved quality of the water supply in project towns was
14
See footnote 5.
11
achieved as follows: (i) the number of beneficiary households increased from 45,587 (December
2008) to 93,787 (June 2014); and (ii) the volume of safe water produced increased substantially
from 5,895 m3/hour in 2008 to 13,605 m3/hour in 2014. Similarly, the achievements of other
outcomes mentioned in para. 2 are summarized as follows: (i) 91% of school children and 47%
of adults participated in the hygiene education and sanitation campaign against the target of
40%; (ii) more than 90% of households are now using sanitary latrines; (iii) water tariff demand
and collection has increased from an aggregate collection rate of 57.48% in FY2009 to 67.86%
in FY2014; in a few pourashavas the collection rate is close to 80%; and (iv) overall collection
increased from Tk74.3 million in FY2009 to Tk169.2 million in FY2014. Some of the
overachieved outputs are as follows: (i) 1,305 DPHE and pourashava staff compared to the
target of 500 were trained in various aspects of water supply and sanitation; (ii) 185 km of
pipelines were rehabilitated against the target of 172 km; and (iii) 85 PTWs and 1,178 SWPs
were constructed against the targets of 80 PTWs and 1,091 SWPs. Details of the achievements
are given in paras. 10–20 above. Of the 33 output indicators, 29 were fully achieved; for the
remaining four the level of achievement varied from 50% to 77%. With improved and higher
volume water supply and sanitation services, more than 853,000 of those targeted, mostly
women, benefited from better living conditions and health standards, as revealed by the
project’s benefit monitoring survey of 2014. The project constructed four major SWTPs, of which
three were not planned during appraisal. These significantly reduced groundwater extraction in
the project area. The performance-based approach ensured the capacity of the pourashavas to
properly implement the activities of Phase 2, which had a positive impact on effectiveness and
efficiency in achieving outcome and output. There was no serious issue related to involuntary
resettlement and environmental safeguards as no physical or economic displacement was
triggered due to any project intervention, and the nominal construction hazards were mitigated
through implementation of subproject-level environmental management plans (EMPs). The GAP
was implemented with the help of NGOs of the project. The GAP was effective in achieving the
outcome in respect of participation by women. Sex-disaggregated results are in Appendix 14.
C. Efficiency in Achieving Outcome and Outputs
43. The project is efficient in achieving its outcome and outputs. The financial and economic
analyses are in Appendix 15. Table A15.1 shows economic internal rates of return (EIRRs)
varying from 12.65% to 21.89%, indicating that the project exceeded ADB’s EIRR benchmark of
12%. Sensitivity analyses on EIRR were also conducted, showing a reasonable range of 8.98%
to 21.7% under different scenarios (Table A15.1). The above indicators suggest that the project
is economically and financially viable. The level of efficiency in implementing each subproject
was satisfactory. As there was no weighted average EIRR documented at appraisal, the
efficiency of each pourashava was separately assessed by calculating its EIRR. Despite a year
of start-up delay, the project achieved its intended outputs fully within the stipulated
implementation period of 6 years without any cost overrun (para. 21).15
D. Preliminary Assessment of Sustainability

44. The project benefits are likely to be sustainable, as all of the project activities are
ongoing, with increased operational capacity in all pourashavas, and all infrastructures is in
good condition. Sustainability of this type of project depends mainly on regular and proper
maintenance of the facilities to ensure longer life and generate revenue by enforcing enhanced
tariffs at regular intervals. The project helped improve (i) operational staff performance through
hands-on training; (ii) water supply production capacity by rehabilitating old facilities and those
15
The project was designed for 6 years, in 2 phases: Phase 1 from July 2008 to June 2010 (2 years), and Phase 2
from July 2010 to June 2014 (4 years).
12
in poor condition and constructing new ones; (iii) revenue collection by adjusting tariffs and
installing a meter-based billing system; (iv) water supply accounts, by keeping them separate;
and, most importantly, (v) participation by women by at least 30% in monitoring pourashava
development activities. The construction of latrines, especially separate ones for female,
ensured better living conditions and environment. The low-cost septic tank sludge treatment
plants were a successful initiative in managing overflowing septic tanks. Operation and
maintenance (O&M) of the newly constructed facilities are ensured through enhanced water
tariff collections, staff training, meter-based billing and its efficient collection, community
participation, and engaging private sector/NGOs to read meters and collect bills. The
pourashavas have the technical and institutional capacity and financial resources to continue
the O&M of the subprojects. DPHE has agreed to continue monitoring overall performance and
providing technical support to the pourashavas. The water-user groups were active and the
participation of women contributes to sustainability.
45. The weighted average FIRR of the project at base cost was 9.1%. The highest weighted
average cost of capital (WACC) of 5.90%, at the PCR stage, was in Natore, and the lowest
WACC of 2.20% was in Jessore. A WACC of 3.35% was computed for the project in real terms.
In each subproject, the FIRR is higher compared to WACC at the PCR stage. The consolidated
FIRR for the overall project of 9.07% (see para. 28 and 30 of appendix 15) is also higher than
the WACC for the full project, i.e. 3.35%, meaning that the subprojects are financially
sustainable (Table A15.2). The FIRR at project completion varies from 7.44% to 10.51% against
2.2% to 3.6% at appraisal for the four pilot pourashavas. 16 The FIRR of the remaining 12
pourashavas varies from 6.97% to 12.03% (Table A15.4). While these figures could not be
compared with any base values as those were not measured at appraisal, the FIRRs for all 12
pourashavas were considerably higher compared to the FIRR of the four pilot pourashavas at
appraisal. The FIRRs increased due to various steps taken during project implementation, which
are outlined in para. 25 of Appendix 15. The FIRR results discussed above indicate that the
project is likely to be sustainable. The benefit-cost ratios vary from 1.47 to 2.84 (Table A15.5),
also indicating the project’s viability.
E. Impacts
46. The delivery of project outputs has generated sustainable access to improved and safe
water and sanitation thereby improving the quality of life. The average annual household income
increased from Tk73,031 in 2009 to Tk221,665 at project completion, indicating improvement of
the project beneficiaries’ socioeconomic condition. The mortality and morbidity rates from
diarrhea, dysentery, and other waterborne diseases were significantly reduced in the project
area. Tariffs and institutional and financial reforms were adopted as part of the project’s design,
which improved the financial performance of PWSSs in all 16 pourashavas.
47. The potential environmental impacts due to expansion of the water supply and sanitation
components were mainly associated with dust and noise during construction, exhaust emissions
from construction equipment, and improper waste handling, including sludge disposal in some
locations. A considerable positive impact was due to implementation of 11 fecal sludge
treatment plants, which prevents dumping of septic tank waste in open drains or fields. The
project did not have any significant negative environmental impacts and the minor impacts were
largely avoided through proper subproject design. Adverse environmental impacts were
minimized by adopting an appropriate EMP17 to meet the ADB’s Environment Policy (2002) and
16
The four pilot pourashavas were Brahmanbaria, Jessore, Pirojpur, and Serajganj.
17
The inclusion of appropriate clauses in the tender document as per government and ADB regulatory requirements
obligated the contractor to implement environmental mitigation and monitoring measures during construction.
13
Environment Assessment Guideline (2003). The groundwater extraction through the 85 PTWs
did not result in any adverse impact on the groundwater table, as the surrounding hand tube
wells were found to be working at full capacity.
48. During construction, no people were identified as adversely impacted or needing

involuntary resettlement. After the final design, there was no requirement for land acquisition
and resettlement; hence, the resettlement plan prepared by the PPTA team was not
implemented. All construction was done on land owned by pourashavas or other government
agencies. No indigenous people were adversely affected by the project. Safeguards due
diligence was conducted for all subprojects during implementation and relevant documents were
duly prepared and included in SPARs. There have been no complaints so far for any safeguards
and no safeguards issues are outstanding at this stage.
49. The project successfully linked the financial and institutional performance of the
pourashavas to their investment as is done for other pourashava governance and infrastructure
improvement projects in the country. The government has also been supportive of performance-
based investments to all urban local government bodies. The project pourashavas had to
perform well to meet the minimum performance criteria set for the project to qualify for Phase 2
investment.
50. About a million people in the sixteen pourashavas are now getting safe drinking water
and a hygienic sanitation system. Rehabilitation works substantially reduced leakage in
pipelines and house connections, resulting in increased water supply without increasing the
water source. The expansion phase strengthened the pourashavas to meet citizen demands for
a safe water supply, broaden the revenue base, and provide better living conditions. A post-
project household survey indicated that more than 73% of the sampled households were
connected, with extended hours of water supply that were 33.5% at baseline. DPHE gained
experience in implementing a sector project and is expected to have further responsibilities.
Institutional development and other impacts are assessed as moderate.
IV. OVERALL ASSESSMENT AND RECOMMENDATIONS
A. Overall Assessment
51. Overall, project implementation is rated successful. The project was relevant to ADB’s
country strategy for Bangladesh for improved water supply and sanitation, and for building the
capacity of local government institutions. The project’s implementation was effective in
achieving its outcome and efficient in achieving outcome and outputs. The project benefits are
likely to be sustainable, with increased operational capacity in all pourashavas. The project was
implemented as conceived, consistent with its design, and almost all targets were completed
within the project period.18 No significant changes were made in the implementation approach.
DPHE’s own post-project household survey reported that the project had attained the focused
outcome of supplying increased quantity and quality of water to the project households.
52. The overall assessment was based on the following key achievements: (i) increasing the
volume of safe water produced and extended coverage in the towns; (ii) meeting, or even
exceeding, physical work targets; (iii) keeping the project cost much below the appraised cost;
(iv) introducing DEAS and improving record-keeping procedures; (v) improving water tariff
collection by computerizing the billing system; (vi) reducing system loss in the water production
18
As this is a sector project, the DMF targets were generally indicative. Achievements have been made against the
revised target set by the baseline survey.
14
and supply; (vii) improving overall community-level environmental household sanitation; (viii)
adopting septic tank sludge treatment facilities; (ix) complying fully with the environmental
safeguards in the EMP; and (x) encouraging citizen participation, at least one-third of them
women, in pourashava decision-making for development activities. Considering the overall
achievements, the project is rated as successful.
B. Lessons
53. Lack of local capacity. Local capacity in construction of complex infrastructures such
as treatment plants is still developing. Contractors could be selected through more appropriate
screening procedures.
54. Meter-based Water Billing. Meter-based water billing will provide a basis for
sustainable cost recovery for water service providers and an incentive to consumers to reduce
their water use. Some pourashavas that were hesitant to implement the system should now
adopt it in order to raise their income and attain solvency quickly. Outsourcing the meter-based
water billing system demonstrated high collection efficiency and may be continued and
replicated in other pourashavas in similar situations if there is a staff shortage.
55. Public latrines and community participation. Public latrines constructed under the
project have two sections, one for males and another for females. The female sections at some
sites are not fully utilized because the locations are inconvenient and for safety reasons.
Appropriate site selection and adequate consultation with local people are key to making such
facilities more user- and gender-friendly. However, active community participation helped
smooth implementation of the sanitation component.
56. House connections. The motivational roles of mayors’ teams to discourage private
hand tube wells could lead to an increase both in the number of house connections and in
revenue. This aspect was missing in the awareness campaign and follow-up actions.
57. Minimizing resettlement impact. The existing road alignment was used for laying
pipelines; the pourashava-owned lands, pre-identified as encumbrance free, were used for other
structures, which minimized the resettlement impact.
58. Better linkage between health outcomes and WSS outputs. Linkage was promoted
by including several sanitation, hygiene, and health promotion activities.
C. Recommendations
1. Project Related
59. Future Monitoring. SWTPs in four pourashavas and AIRPs in eight pourashavas have
been in operation since their completion. A few pourashavas are not following the operational
instructions. Special attention should be given to proper maintenance of such costly plants to
ensure their longer life. Pourashavas using AIRP/IRPs/SWTPs should regularly check water
quality at delivery points and also at the most distant households to monitor the expected results
for safe water.
60. Some pourashavas were not properly updating their inventory of accessories and other
assets. Maintaining inventories of all assets is strongly recommended and should be periodically
15
checked by pourashava authorities. Regular training for pourashavas is to be provided to

ensure proper maintenance of updated inventory of accessories and other assets.
61. Special attention should be given to the newly introduced sludge treatment plants. As
many of them are extremely underutilized, the pourashavas should provide an awareness
campaign on a regular basis on properly de-sludging the septic tanks, to be treated in the
sludge treatment plants.
62. Covenants. All covenants were maintained as envisaged except one for the HRD center,
which could not be fully complied with during implementation of the project. DPHE is to update
ADB on the progress of compliance of this covenant by 31 December 2016.
63. Further Actions or Follow-Up. The installed capacity for water supply should be
gradually harnessed by increasing operating hours and connecting more houses through an
action plan.
64. The pourashavas should exert all-out efforts to improve their financial performance,
including reconciling the water volume of the production and distribution system. To fully cover
the O&M costs, water tariffs should be increased through motivational campaigns and
community participation. Local NGOs may also be outsourced to increase tariff collection
efficiency.
65. All pending issues need to be resolved by the borrower as soon as possible. DPHE, in
consultation with LGD and FAPAD, needs to settle the pending audit observations.
66. Timing of the project performance evaluation report. As the project was completed
in June 2014, a project performance evaluation may be undertaken, if deemed necessary by
ADB management, in 2018.
2. General
67. To establish a sustainable 24-hour water supply, pourashavas should have a sound
operational and financial plan. A cost-recovery program needs to be practiced by ensuring good
governance, accountability of pourashava officials, and overall management of the system.
68. DPHE should have a monitoring cell to monitor the indicators of efficiency and
sustainability of the subprojects at pourashava levels and to handle the unresolved issues after
project completion.
69. Due attention should be paid to practical work experience while short-listing the
consultants for any development project. Qualifications and/or experience requirements should
be carefully drafted at the Expression of Interest stage to ensure that qualified firms are short-
listed.
70. A centralized audit entry and exit meeting with all pourashava staff and FAPAD auditors
under the chairmanship of the project director is recommended to minimize the number of audit
objections.
16
DESIGN AND MONITORING FRAMEWORK
Appendix 1
Revised
Performance
DMF Performance Baseline
Design Summary Targets after Cumulative Achievements c Progress/Status
Targets/ Indicators Value a
Baseline
Survey b
Impact  People perceive an Average – Delivery of outputs has –
 Improve living conditions and health improved quality of life Annual generated sustainable access to
standards in participating secondary male- improved and safe water and
towns (pourashavas). headed HH sanitation. More than 73% of
income is sampled HHs is connected with
 Improve sustainability and efficiency Tk73,031 a water supply, compared with
of 16 pourashava water utilities. 33.5% at baseline. Post-project
survey: Annual income
Overall Tk220,265
Male Tk221,665
Female Tk205,326
 Mortality and morbidity HH suffering _ Post-project survey: HH suffering –
rates from diarrhea, from from
dysentery, and other diarrhea – diarrhea – 6.4%
waterborne diseases 16.8% and and from dysentery – 6.5%
reduced from
dysentery –
15.3%
 Tariff and institutional 44% of Water tariff Tariff, institutional, and financial Tariff and institutional
reforms adopted and customers increased by reforms adopted. Collection reform process is
financial performance of ready to pay 50% increased from Tk74.3 million in continuous
PWSSs improved in 16 increased FY2009 to Tk169.2 million in
pourashavas water tariff FY2014 (128%)
Revised
Performance
Baseline
Survey b
Outcomed
 Increased quantity and improved  158,800 households 43,761 HH 49,856 new Post-project survey; HH connections –
quality of water supply in project with access to safe connections, HH HH new connections – 48,200, 96.6%
towns (contributing to achievement water through piped HH 967 SP and connections, SP – 293
of the targets of Millennium connections or public 17,760 SWP 618 new SP SP – 47.41%
Development Goal 7) water points existing and 1091 new Not all SPs were
SWP provided installed due to
 Improved community awareness of several incidents of
the link between proper hygiene, pilferage of bib cocks
sanitation, and health, particularly and to avoid
among women and children subsequent wastage
of water.
 Increased sanitation coverage
SWP – 1,178 SWP – 107.97%
 Improved capacity of secondary
towns to implement, operate,  Volume of safe water – 49,856 77,326 existing and new HH 155.09%
manage, and maintain water supply produced and billed to existing customers billed (in 2014)
and sanitation investments. existing and new and new Production capacity
Improved capacity of DPHE to plan, customers increased HH of safe water
design, supervise, monitor, and customers increased from
provide technical assistance to local billed 5,895m3/ hour at pre-
water utilities project level to
13,604m3 /hour at
 Management options consistent completion
with the SDP-WSSB (PLC entity,  All school children and School 36,000 33,000 school children; 53,500 Schoolchildren –
outsourcing billing and collection) over 40% of adults in children school adults participated in HE and 91.6%
pushed forward and piloted each pourashava from 4.3% children HPP
participated in the HH and and 86,590 Adults – 61.8%
hygiene education and adults from adults
sanitation promotion 14% HH participated Adults were busy with
programs participated in HE and other prioritized
Appendix 1
in HE and HPP activates and were
SPP less interested in
receiving awareness
training, leading to
lower achievement.
17
18
Revised
Performance
Appendix 1
Baseline
Survey b
 Number of households 18% HH  PTs – 62  PTs – 59  PTs – 95.16%
using sanitary latrines using non-  CLs – 315  CLs – 313  CLs – 99.36%
increased by 25% sanitary  SLs –160  SLs – 160  SLs – 100%
latrines  HHLs –
 HHLs – 914 –  HHLs – 916 constructed 100.20%
constructed
 Financial performance – 5 guidelines/  Prepared – 5 100%
of PWSSs significantly simplified  Adopted – 5
improved manuals/action
plans prepared
and adopted
 More than 500 DPHE – 500 DPHE and 1,305 DPHE/ pourashava staff 261%
and pourashava staff pourashava trained
trained in various staff trained 15 women councilors, 15 men
aspects of water supply councilors, 14 water supers, and
and sanitation 16 community mobilization
specialists received training.
A workshop on gender was
participated in by 15 men
councilors and 15 women
councilors of project
pourashavas, 14 water supers,
and 16 community mobilization
specialists (13 men and 3
women) from 16 project
pourashavas
 About 5 pourashavas – None opted The Gazette of the Government –
opt to pursue new of Bangladesh dated 6 October
(PLC) institutional 2009 introduced Public Private
models Partnership model for
infrastructure services. The
concept of PLC was also not
finally included in the
government’s approved Sector
Development Plan for Water
Supply and Sanitation 2011- 25.
Revised
Performance
Baseline
Survey b
Outputs d
Part A. Water Supply Improvements Phase 1: Rehabilitation
 Rehabilitation, expansion, and
completion of metering of existing  172 km of water mains 122 km 172 km water 184.69 km water mains 107%
piped water supply systems rehabilitated mains rehabilitated
rehabilitated.
This includes
 Number of metered household distribution
connections maximized mains
 8 iron removal surface  10 IRPs 6 IRPs/SWTPs 7 IRPs/SWTPs rehabilitated 116.67%
 Shared standpipes and other SWPs water treatment plant  1 SWTPs rehabilitated
provided to areas that could not be plants with 300 m3/hour
provided with HH connections (hr) capacity
efficiently rehabilitated
 29 OHTs with 680 m3 35 OHTs 14 OHTs 22 OHTs 157%
capacity rehabilitated rehabilitated rehabilitated
 53 production tube wells 123 PTWs 43 PTWs 48 PTWs regenerated 111.62%

regenerated regenerated
 250 km of distribution 123 km Included in water The achievement of distribution –

mains replaced mains mains is included within
rehabilitation of 184.69 km water
mains
 68,000 existing HH 43,761 HH 36,811 existing 36,811 existing HH connections 100%
connections metered connections HH connections metered
metered metered
Phase 2: System Expansion
Appendix 1
 67 PTWs installed – 80 PTWs 85 PTWs in operation 106%
installed
19
20
Revised
Performance
Appendix 1
Baseline
Survey b
 9 new IRPs/SWTPs – 12 IRPs/SWTPs 8 IRPs in operation, 100%
with 300 m3 capacity operational 4 SWTPs in operation e
operational
 18 new OHTs with 680 – 16 OHTs 16 OHTs 100%

m3 capacity operational operational in operation
 600 km of distribution – 750 km of 684 km distribution mains 91.2%

mains of various distribution installed Due to final
diameters installed mains installed requirement at field
being less than
anticipated
 40 km of new – 75 km 127 km transmission mains 169.3%
transmission mains transmission installed
installed mains installed
 64,500 water meters – 64,954 water 49,856 water meters installed in 76.7%
installed meters installed new HH connections Meter connection is
in new HH ongoing
connections
 583 new SPs for poor 967 SPs 618 new SPs 293 new SPs operational 47.41%
households operational operational Lower achievement is
explained in outcome
section
 732 new SWPs 1,776 SWPs 1,091 new SWPs 1,178 new SWPs constructed 107.97%
constructed constructed
 1,315 community water 450 UGs  618 UGs  293 UGs of SPs formed Combined – 97.6%
supply user groups organized of SPs
organized and/trained formed  1,178 UGs of SWPs formed
 889 UGs  5,360 UGs members of SPs

of SWPs trained (male 1,410 and
formed female 3,950) Combined – 378.8%
 10,549  34,600 UGs members of

UGs of SWPs trained (male 17,000
Revised
Performance
Baseline
Survey b
SPs and and female 17,600)
SWPs
trained
Part B: Sanitation
Improvements
 Community, school, public  Number of community,  Communit- 315 CLs, 313 CLs, 160 SLs, 59 PTs, and  CLs – 99.36%
sanitation improvements school, and public y latrines: 160 SLs, 916 HH  SLs – 100%
 Sanitation awareness and sanitary latrines 262, 62 PTs, constructed  PTs – 95.16%
promotion, hygiene education, constructed school and 914  HHLs –
capacity building latrines: HH 100.20%
 Septic-tank sludge 1,071, and constructed
removal/management public
toilets: 104
 Number of community Sanitation group  313 UGs of  313 UGs of CLs formed  UG formation –
sanitation user groups formed: 170 CLs formed 100%
organized and/trained,  5,040 UGs of CLs trained
and their gender mix  2,191 EC (male 2,990 and female
members of 2,050)  UG members
CLs trained trained – 230%
 Number of adults and Adults from 36,000 Schoolchildren – 33,000 and  Schoolchildren –
children participating in 14% HH and school adults – 53,500 participated in 91.6 % and
sanitation awareness School children HE and HPP.  Adults – 61.82%
and promotion, and children and 86,590 A total of 975 girl students and
hygiene education from 4.3% adults 1,169 boy students received
program, disaggregated HH participated training.
Appendix 1
by gender participated in SPP and
in SPP and HEP
HEP
21
22
Revised
Performance
Appendix 1
Baseline
Survey b
 Increased demand for – 914 HHLs 916 HHLs constructed 100.2%
sanitary latrine constructed
hardware and
construction
 Sludge removal – On actual 26 sludge removal equipment 11 STPs are in
equipment and sludge demand from sent to 11 pourashavas for operation for treating
composting/ disposal pourashavas removing household septic tank household septic tank
facilities utilized in line sludge sludge, 100%
with project guidelines
– TNA report – 1 Prepared 100%

Part C: Institutional  DPHE training needs Training Prepared 100%
Development assessment completed, strategy – 1 Prepared 100%
 Strengthening of DPHE and 5-year training 5-year training 20 training materials prepared 100%
strategy and program program–1
established Training
materials – 20
– National HRD Government DPP has been 50%, construction in
 DPHE human resources Centre of DPHE revised, increasing cost and progress.
development /training established extending time. Construction
center established, and ongoing.
trainers trained
 Approximately 210 – 210 DPHE staff 210 DPHE staff trained 100%
DPHE staff trained in trained
various aspects of WSS
 PPME system – 5 reports 5 reports already prepared 100%

established and regular prepared
reports submitted
 DPHE acquired skills to – Not indicated DPHE recruited 150 new –

effectively manage graduate engineers (assistant
SDP-WSSB engineers) to strengthen the
investments and future skilled manpower capacity.
sector projects with
minimal support 16 DPHE executive engineers
Revised
Performance
Baseline
Survey b
developed full capacity of
managing donor-assisted sector
projects and SDP-WSSB
investments
 DPHE capacity to – Not indicated DPHE is now working as the –

effectively become a technical facilitator for all
facilitator and technical pourashavas regarding
support entity in the procurement, implementation,
sector improved and O&M of water supply and
sanitation facilities
 PWSS accounts – PWSS accounts PWSS accounts separated for all 100%
separated from those of separated pourashavas
pourashavas
 Double-entry – Double-entry Double-entry accounting of 100%
accounting accounting of PWSS introduced
 Strengthening of the pourashavas institutionalized, staff PWSS
trained and fully introduced
equipped with
computers/software
 PWSS asset inventory – PWSS asset PWSS asset inventory 100%
established inventory established
established
 Simplified technical – 11 procedures/ 11 procedures/ 100%
manuals, commercial manuals/guide- manuals/guidelines prepared
systems manuals lines prepared
completed
Appendix 1
 Number of pourashava – 160 pourashava 1,155 pourashava staff trained 721.88%
chairs, ward representatives
commissioners, and and staff trained
staff trained in water
supply and sanitation
(about 160 participants
total)
23
24
Revised
Performance
Appendix 1
Baseline
Survey b
– 80 local water 120 pourashava staff trained 150%
 Number of local water
utility staff
utility and sanitation
trained
staff trained in
accounting, tariff
setting, and other
aspects of water supply
and sanitation (about
480 participants)
 All project management – Support to Support provided 100%

and implementation 6 entities
assistance delivered provided
 Implementation assistance efficiently and
effectively, enabling
smooth implementation
Activities with Milestones
 PMU established and fully staffed, and PSC established immediately after loan signing Inputs (at appraisal)
 Subproject agreements with DPHE for four sample towns signed upon loan effectiveness
 Preparation of initial feasibility studies for additional towns completed by month 4, and additional ADB: $41.0 million
subproject agreements signed OFID: $9.0 million
 Project implementation units established immediately upon signing of the subproject agreements Government: $20.5 million
 Detailed design for rehabilitation works completed by end of month 6 Community: $0.6 million
 Subsidiary loan agreements for Phase 1 signed by month 7 Total: $71.1 million
 Completion of water supply system rehabilitation by end of month 24
 Detailed design work for all Phase 2 activities completed by end of month 24
Inputs (assessed by PCR mission)
 Phase 1 performance evaluated, and Phase 2 eligibility decided by month 24
 Subsidiary loan agreements for Phase 2 signed by month 26 ADB: $34.7 million
 Civil works for water supply improvements completed by month 60 OFID: $7.7 million
 Consumer awareness program completed by month 24 Government: $16.6 million
 Sanitation awareness program and sanitation improvements complete by month 36 Community: $1.6 million
Total: $60.6 million
ADB = Asian Development Bank; DPHE = Department of Public Health Engineering; CL = community latrine; DPP = development project pro-forma; EC = executive
committee ; HDP = human resources development; HE = hygiene education; HEP = hygiene education program; HH = household; HHL= household latrine; HPP =
3
hygiene promotion program; km = kilometer; m = cubic meter; IRP = iron removal plant; O&M = operation and maintenance; OHT = overhead tanks ; PCR = project
completion report; PLC = public limited company; PMU = project monitoring unit; PPME = project performance monitoring and evaluation; PSC = project steering
committee; PT = public latrine; PTW = production tube well; PWSS = Pourashava water supply section; SDP-WSSB = Sector Development Programme–Water and
Sanitation Sector of Bangladesh; SL = school latrine; SP = standpipes; SPP = sanitation promotion program; SWP = safe-water point; SWTP = surface water treatment
plant; TNA = training need assessment; UG = user group; and WSS = water supply and sanitation.
a
DPHE (MDS consultants). 2009. Final Report on Baseline Survey.
b
Since it is a sector project, some indicators were not fixed during appraisal. Some targets were finalized during project implementation.
c
The targets for PTW and SWTPs were slightly adjusted. They include construction of three additional SWTPs in three pourashavas due to the presence of increased
sodium chloride and non-availability of a suitable groundwater source and an increase in the number of PTWs from 80 to 85.
d
As this is a sector project, all numbers provided in the outcome and outputs sections of the framework are estimates based on the sample towns and may change
based on detailed design. The estimates assume that participation in Phase 2 will not be 100%.
e
Appendix 1
The targets for PTW and SWTPs were slightly adjusted which include construction of 3 additional SWTPs in three pourashavas due to presence of increased sodium
chloride and non-availability of suitable ground water source and increase in number of PTW from 80 to 85.
25
26 Appendix 2
PERFORMANCE CRITERIA
Fully Minimum
Satisfactory Requirements
A. Technical
1. Rehabilitation and other physical works under Phase 100% completed 80% completed
1 investment plan completed
2. Targeted service connections and sanitary latrine 100% completed 80% completed
construction under Phase 1 investment plan
completed
3. Water meters in all existing and planned service 100% metered 80% metered
connections under Phase 1 plan installed
B. Financial
1. A tariff and financial action plan for the water utility 100% completed 100% completed
prepared and approved by the pourashava council
2. First tariff increase in tariff and financial action plan 100% implemented 100% implemented
implemented
3. Double-entry accounting system established and Established and Established and
operational operational operational
4. Water utility assets fully inventoried and appraised; 100% completed 80% completed
asset registry completed
5. Tariff collection efficiency improved 100% collection 80% collection
efficiency efficiency
6. Water supply–related electricity arrears paid 80% paid (current 60% paid (current
bill), clearance of bill), clearance of
arrears (more than arrears (more than
60% over 2 years) 40% over 2 years)
C. Social
1. Town-level coordination committee established with 4 meetings 2 meetings
at least 10 women members conducted conducted
2. Town water and sanitation committee established 4 meetings 2 meetings
with at least 10% women members conducted conducted
D. Institutional
1. Pourashava and pourashava water supply section 100% completed 100% completed
personnel trained as scheduled
2. Staff positions in pourashava water supply section Full staffing as Key staff
filled required
Source: Asian Development Bank.

Appendix 3 27
WORKS ACCOMPLISHED IN PHASE 1
Repair Water HC
Name of Pipeline Repair of Repair Regen- Meter Rehabi-
Pourashava (km) of IRP SWTP of OHT eration of Installed litated Remarks
(Nr) (Nr) (Nr) PTWs (Nr) (Nr)
Brahmanbaria 15.26 0 0 1 4 1,600 2,150 Some other minor
repair works, such
Choumohani 5.38 0 0 1 3 1,429 520
as power
Jessore 23.07 0 0 6 4 6,008 2,100 connection–
Jhenaidah 9.64 0 0 1 2 1,585 890 related works,
access roads,
Joypurhat 8.41 1 0 1 2 1,650 517
boundary walls,
Kishorganj 8.00 0 0 0 4 1,957 1,200 repair of pump
Laksmipur 9.17 0 0 1 4 2,712 1,000 houses, paintings,
etc., were done.
Madaripur 9.02 0 0 2 0 2,138 600
Moulvibazar 5.04 0 0 1 3 1,785 400
Mymensingh 28.70 0 0 2 6 4,825 1,000
Narsingdi 12.58 1 0 3 2 2,195 750
Natore 10.70 1 0 1 2 2,653 850
Netrokona 9.72 0 0 0 3 1,480 520
Pirojpur 9.05 0 1 0 0 2,600 1,800
Serajganj 12.95 2 0 1 6 1,028 514
Sherpur 8.00 1 0 1 3 1,166 543
Total 184.69 6 1 22 48 36,811 15,354
HC = house connection, IRP = iron removal plant, km = kilometer, Nr = number, OHT = overhead tank, PTW = production
tube well, and SWTP = surface water treatment plant.
28 Appendix 4
WORKS ACCOMPLISHED IN PHASE 2
W ater Supply Component Sanitation Component
DL TL
PTW (km) (km) Stand
Name of AIRP SW TP OHT WM New HC SW P PL CL SL HHL STP
& PH Pipes
Pourashava (Nr) (Nr) (Nr) uPVC, uPVC, (Nr) (Nr) (Nr) (Nr) (Nr) (Nr) (Nr) (Nr)
(Nr) (Nr)
MS, GI MS, GI
Brahmanbaria 8 2 0 1 31.08 9.75 5,796 5,796 65 0 3 5 7 68 0
Choumohani 8 1 0 1 65.43 10.18 3,671 3149 70 34 1 15 5 32 1
Jessore 14 0 0 0 38.06 4.34 6,500 3,000 80 35 6 35 9 67 1
Jhenaidah 5 0 0 0 55.11 6.64 5,994 1,098 63 25 3 22 9 56 1
Joypurhat 4 1 0 1 32.12 7.07 2,838 2,602 88 0 5 0 10 127 0
Kishorganj 5 0 0 2 50.34 8.27 4,121 3,878 56 0 4 22 9 35 0
Laksmipur 5 1 0 1 32.31 7.16 2,608 1968 114 20 4 30 10 42 1
Madaripur 2 0 1 1 52.18 8.62 2,222 2061 110 35 6 25 9 45 1
Moulvibazar 0 0 1 1 35.12 6.69 1,000 500 52 0 4 18 8 52 1
Mymensingh 12 0 0 2 49.21 13.98 7,250 4,500 164 0 2 40 30 73 0
Narsingdi 0 0 1 0 26.00 7.02 5,500 5,500 65 0 4 13 9 98 1
Natore 5 1 0 1 56.70 13.64 3,153 2,506 62 30 3 8 8 34 1
Netrokona 5 0 0 2 33.20 7.16 3,085 3085 62 30 4 17 8 35 1
Pirojpur 0 0 1 2 41.58 4.64 2,000 1091 0 71 5 25 8 85 0
Serajganj 6 1 0 1 44.07 7.5 4,125 4,125 63 0 2 20 12 35 1
Sherpur 6 1 0 0 41.15 4.74 5,091 4997 64 13 3 18 9 32 1
Total 85 8 4 16 683.66 127.4 64,954 49,856 1,178 293 59 313 160 916 11
811.06
AIRP = arsenic-iron removal plant, CL = community latrine, DL = distribution line, GI = galvanized iron, HC = house connetion, HHL =
house-hold latrine, km = kilometer, MS = mild steel pipe, Nr = number, OHT = over-head tank, PH = pump house, PL = public latrine,
PTW = production tube well, uPVC = unplasticised poly vynil chloride pipe, SL = school latrine, STP = sludge treatment plant, SW P =
safe water point, SW TP = surface water treatment plant, TL = transmission line, and W M = water meter.
Appendix 5 29
INSTITUTIONAL STRENGTHENING OF DPHE AND POURASHAVAS
Status of
Performance Performance
Cumulative Achievements Progress
Indicators Targets
(%)
 DPHE training needs assessment TNA report – 1 100
(TNA) completed, and 5-year training Training strategy – 1 Prepared 100
strategy and program established 5-year training Prepared 100
program – 1 Prepared 100
Training materials – Prepared
20
 DPHE human resources development National HRD Centre Building construction in progress 50
/training center established, and of DPHE formally
trainers trained established
 Approximately 210 DPHE staff trained 210 DPHE staff trained Completed 100
in various aspects of WSS
 PPME system established and regular 5 reports prepared 5 reports prepared 100
reports submitted
 DPHE acquired skills to effectively Not indicated DPHE recruited 150 new graduate –
manage SDP-WSSB investments and engineers (assistant engineers) to
strengthen the skilled manpower
future sector projects with minimal
capacity.
support
16 DPHE engineers developed full
capacity of managing donor-
assisted sector project and SDP-
WSSB
 DPHE capacity to effectively become Not indicated DPHE is now working as the –
a facilitator and technical support technical facilitator for all
entity in the sector improved pourashavas regarding
procurement, implementation, and
O&M of water supply and sanitation
facilities
 PWSS accounts separated from those PWSS accounts PWSS accounts separated 100
of pourashavas separated
 Double-entry accounting Double-entry accounting Double-entry accounting of PWSS 100
institutionalized, staff trained and fully of PWSS introduced introduced in manual form
equipped with computers/ software
 PWSS asset inventory established PWSS asset inventory PWSS asset inventory established 100
established
 Simplified technical manuals, 11 manuals/guidelines 11 manuals/ 100
commercial systems manuals prepared guidelines prepared
completed
 Number of pourashava chairs, ward 160 pourashava 1,155 pourashava staff trained 721.88
commissioners, and staff trained in representatives and staff
water supply and sanitation trained
 Number of local water utility and 80 local water utility staff 120 pourashava staff trained 114
sanitation staff trained in accounting, trained
tariff setting, and other aspects of
water supply and sanitation
 All project management and Support to 6 entities Support provided 100
implementation assistance delivered provided
efficiently and effectively, enabling
smooth implementation
30 Appendix 5
Status of
Performance Performance
Cumulative Achievements Progress
Indicators Targets
(%)
 Support to user group members to User group members 11,494 100
strengthen their efficiency
DPHE = Department of Public Health Engineering; HRD = human resources development; O&M = operation and maintenance; PPME =
project performance monitoring and evaluation; PWSS = pourashava water supply section; SDP-WSSB = Sector Development
Programme-Water and Sanitation Sector in Bangladesh; and TNA = training need assessment.
Appendix 6 31
MAJOR WORKS - 100% FINANCED BY GOVERNMENT
Item of Works
Sludge Production Cost
Pourashava Pipeline AIRP/IRP Remarks
Treatment Tube Wells (taka million)
(km) (Nr)
Plant (Nr) (Nr)
Brahmanbaria 0 0 7.66 0 28.31 Pipeline
Choumohani 1 1 0.00 1 33.77 Construction of STP
and PTW and AIRP
repaired
Jessore 1 0 0.00 0 12.6 Construction of STP
Jhenaidah 1 1 8.10 0 91.26 Construction of STP,

PTW and pipeline
Joypurhat 0 0 6.76 0 14.99 Construction of
pipeline
Kishoreganj 0 0 11.02 0 37.28 Pipeline and others
Laksmipur 1 1 0.00 0 25.52 Construction of STP
and PTW
Madaripur 1 2 6.14 0 37.71 Cost of STP, PTW and
pipeline
Moulvibazar 1 0 3.18 0 13.22 Cost of STP and
pipeline
Mymensingh 0 0 0.00 0 13.26 Submersible pump
Narsingdi 1 0 0.00 0 94.35 Construction of STP
Natore 1 0 5.54 0 35.92 Construction of STP

and pipeline
Netrokona 1 0 3.84 0 25.47 Construction of STP
and pipeline
Pirojpur 0 0 0.00 0 31.5 Cost of generator
Serajganj 1 0 9.38 0 30.02 Cost of STP not

available
Sherpur 1 0 8.70 1 77.51 Construction of STP,
pipeline and AIRP.
ADB declined to
finance as tendering
process was not
acceptable.
All pourashavas 0 0 0.00 0 50 Electrification works
DPHE offices 0 0 0.00 0 49.75 Repair of offices and
inspection bunglows.
Total 11 5 70.32 2 702.44

AIRP = arsenic and iron removal plant, IRP = iron removal plant, km = kilometer, Nr = number, PTW = production tube well,
and STP = sludge treatment plant.
32 Appendix 7
COST COMPARISON
Appraisal Completion
Foreign Local Foreign Local
Total Total
Item Exchange Currency Exchange Currency
($ million) ($ million)
($ million) ($ million) ($ million) ($ million)
A. Base Cost
1. Water Supply Improvement
a. Civil works 1.700 15.303 17.003
0 47.256 47.256
b. Equipment 10.878 4.662 15.540
c. Resettlement 0.388 0.000 0.388 0 0 0
d. Land 0.000 3.142 3.142 0 0 0
Subtotal (A1) 12.966 23.107 36.073 0 47.256 47.256
2. Sanitation Improvement
a. Civil works 0.377 3.394 3.771 0 4.521 4.521
b. Equipment 0.490 0.210 0.700 0 0.431 0.431
c. Nongovernment organizations 0.000 1.240 1.240 0 0.830 0.830
Subtotal (A2) 0.867 4.844 5.711 0 5.782 5.782
3. Institutional Development
a. Consultancy 2.447 4.836 7.283 0.951 2.526 3.477
b. Vehicles/motor cycles/office equipment/computers 0.297 0.018 0.315 0 0.307 0.307
c. Incremental recurrent cost 0.000 0.509 0.509 0 0.617 0.617
Subtotal (A3) 2.744 5.363 8.107 0.951 3.450 4.401
Base costs before taxes and duties 16.577 33.314 49.891 0.951 56.488 57.439
Taxes and duties 0.000 9.641 9.641 2.114 2.114
Base costs after taxes and duties 16.577 42.955 59.532 0.951 58.602 59.553
B. Contingencies
1. Physical contigrncies 0.924 1.759 2.683 0 0 0
2. Price contingencies 1.778 5.059 6.837 0 0 0
C. Interest Charges 2.018 0.000 2.018 1.072 0 1.072
Total (A1+A2+A3+B+C) 21.297 49.773 71.070 2.023 58.602 60.625

Appendix 8 33
ANNUAL DISBURSEMENT
($ million)
A. ADB
Category 2008 2009 2010 2011 2012 2013 2014 2015 Total
1 Civil works (water supply) 0 2.054 2.110 5.731 8.659 4.297 3.305 0.135 26.291
02A Civil works (sanitation) 0 0 0 0 1.117 0.481 0.376 0.109 2.083
02B Equipment (sanitation) 0 0 0 0 0.336 0.070 0.025 0 0.431
02C NGOs (sanitation) 0 0 0.234 0.214 0.322 0.060 0 0 0.830

03A Consultants 0.400 0.776 0.675 0.701 0.456 0.298 0.171 0 3.477
03B Office equipment & vehicles 0.220 0.010 0.019 0 0.011 0.047 0 0 0.307
03C Recurrent costs 0.009 0.017 0.027 0.049 0.038 0.043 0.064 0 0.247
4 Interest charges 0.032 0.043 0.077 0.109 0.190 0.289 0.331 0 1.071
Total 0.661 2.900 3.142 6.804 11.129 5.585 4.272 0.244 34.737
ADB = As ian Developm ent Bank, and NGOs = nongovernm ent organizations .
CUMULATIVE DISBURSEMENTS
Cumulative
Disbursement
Year Disbursement
($ million)
($ million)
2008 0.661 0.661
2009 2.900 3.561
2010 3.142 6.703
2011 6.804 13.507
2012 11.129 24.636
2013 5.585 30.221
2014 4.272 34.493
2015 0.244 34.737
Total 34.737
B. OFID
CUMULATIVE DISBURSEMENTS
Cumulative
Disbursement
Year Disbursement
($ million)
($ million)
2008 0.000 0.000
2009 0.000 0.000
2010 1.168 1.168
2011 0.987 2.155
2012 2.944 5.099
2013 2.315 7.414
2014 0.502 7.916
Unused -0.205 7.711
Total 7.711
OFID = OPEC Fund for International Developm ent.

34 Appendix 9
IMPLEMENTATION SCHEDULE
Phase 1 Phase 2
Item 2006-7 2 0 0 7- 8 2008-9 2 0 0 9 - 10 2 0 10 - 11 2 0 11- 12 2 0 12 - 13 2 0 13 - 14
Each Y ear St ar t f r o m I st Jul y o f i ni t i al year and End s at 3 0 t h June o f p r o ceed i ng year
A General
P lanned
1 Loan Effectiveness
A ctual
2 Consulting Services
P lanned
a.Invitation for Bids
A ctual
P lanned
b. Evaluation
A ctual
P lanned
c. Notification and Aw ard
A ctual
P lanned
d. Mobilization
A ctual
B Water Supply Component
1. Phase 1: Rehabilitation
P lanned
a. Preparation of Rehabilitation Program of Works
A ctual
P lanned
b. Procurement of Equipment
A ctual
P lanned
c. Procurement of Civil Works
A ctual
P lanned
i. Prequalification
A ctual No t applicable
P lanned
ii. Tendering and Contract Aw ard
A ctual
P lanned
d. Construction
A ctual
P lanned
e. Commissioning and Testing
A ctual
P lanned
f. Tariff Aw areness Campaign
A ctual
2. Phase 2: Expansion
P lanned
a. Feasibility Study for New Tow ns
A ctual
b. Detailed Design
P lanned
i. Sample Tow ns (4)
A ctual
P lanned
i. New Tow ns (12)
A ctual
P lanned
c. Land Acquisition and Resettlement Activities
A ctual
P lanned
d. Procurement of Equpment
P lanned
e. Procurement of Civil Works
A ctual
P lanned
i. Prequalification
P lanned
ii. Tendering and Contract Aw ard
A ctual
P lanned
f. Construction
A ctual
P lanned
g. Commissioning and Testing
A ctual
``
h. Operation and Maintenance
A ctual
i. Water Points
P lanned
i. Community Mobilization/Training
A ctual
P lanned
ii. Construction of Deep Tubew ells
A ctual
C Sanitation Component
P lanned
1. Engagement of NGOs
A ctual
P lanned
2. Formation of CBO User Groups
A ctual
P lanned
3. Hygiene Aw areness Program
A ctual
P lanned
4. Community and Public Sanitation Improvement
A ctual
D Capacity Building
P lanned
1. Project Management Support
A ctual
2. Program of Training Strategy, Curriculum P lanned
Program, Course Design and Program A ctual
P lanned
3. Implementation of Training Program
A ctual
P lanned
4. Performance Evaluation for Phase-II Eligibity
A ctual
CBO=Community-based organization, NGO = nongovernmental organization
Source = Asian Development Bank and PCR Mission
Appendix 10 35
STATUS OF COMPLIANCE WITH LOAN COVENANTS
Reference Status
Covenant in Loan of
Agreement Compliance
In the carrying out of the Project and operation of the Project Section Complied with.
facilities, the Borrower shall perform, or cause to be 4.01
performed, all obligations set forth in Schedule 5 to this Loan
Agreement.
The Borrower shall

(i) maintain, or cause to be maintained, separate accounts for Section (i) and (ii) Complied with.
the Project; 4.02.(a)
(ii) have such accounts and related financial statements Project maintained separate
audited annually, in accordance with appropriate auditing accounts both at PMU and PIU
standards consistently applied, by independent auditors whose levels. Government’s audit
qualifications, experience and terms of reference are department (FAPAD) conducted
acceptable to ADB; annual audits for each year.
(iii) furnish to ADB, as soon as available but in any event not
later than 6 months after the end of each related fiscal year, (iii) Complied with.
certified copies of such audited accounts and financial
statements and the report of the auditors relating thereto Audit report up to FY2014 has been
(including the auditors’ opinion on the use of the loan proceeds submitted. Generally, audit
and compliance with the financial covenants of this loan observations are clarified and settled
Agreement as well as on the use of the Procedures for imprest at an exit meeting each year in
account/statement of expenditures), all in the English December or at a later date.
language; and However, 23 of 81 audit
(iv) furnish to ADB such other information concerning such observations of FAPAD remain to be
accounts and financial statements and the audit thereof as settled.
ADB shall from time to time reasonably request.
(iv) Complied with.
The Borrower shall enable ADB, upon ADB’s request, to Section Complied with.
discuss the Borrower’s financial statements for the Project and 4.02.(b)
its financial affairs related to the Project from time to time with Government’s audit department (FAPAD)
the auditors appointed by the Borrower pursuant to Section conducted the audit. ADB attended exit
4.02(a) here above, and shall authorize and require any meetings with audit department where
representative of such auditors to participate in any such resolutions to audit observations were
discussions requested by ADB, provided that any such discussed.
discussion shall be conducted only in the presence of an
authorized officer of the Borrower unless the Borrower shall
otherwise agree.
The Borrower shall enable ADB’s representatives to inspect Section Complied with.
the project, the Goods financed out of the proceeds of the 4.03
loan, and any relevant records and documents. ADB staff and consultants were allowed
to inspect all works and offices.
Project Executing Agency:
DPHE shall be the EA and shall be responsible for the overall Schedule 5, Complied with.
technical supervision and execution of the Project. Para 1
36 Appendix 10
Reference Status
Covenant in Loan of
Project Management Unit (PMU):
A PMU shall be established within DPHE and shall be headed Schedule 5, Complied with.
by a full-time project director (PD). The PMU shall be Para 2
responsible for: A PMU was formed and headed by a full-
(i) preparing project implementation plan; time PD on 5 December 2006. PMU, with
(ii) managing the selection of eligible pourashavas; the help of consultants attended and
(iii) supervising the preparation of feasibility studies, design, resolved implementation issues.
subproject, appraisal reports and construction
supervision, The PMU also worked to strengthen the
(iv) providing support to pourashavas in tendering and capacity of pourashavas and DPHE.
executing contracts;
(v) managing DPHE’s and pourashavas’ training and
capacity building program;
(vi) monitoring and supervising project management
activities;
(vii) organizing monitoring and evaluation activities;
(viii) preparing project progress reports and project
completion report; and
(ix) ensuring full compliance with ADB’s safeguards
policies.
Project Steering Committee (PSC):

A PSC shall be established and shall be responsible for Schedule 5, Complied with.
providing policy guidance and overall coordination in project Para 3
implementation. The PSC shall be chaired by the Secretary of A PSC was established on 25 January
LGD and shall consist of DPHE’s Chief Engineer; PMU’s PD; 2007. PSC meetings were held at least
representatives from the ERD and the Finance Division of once a year. A total of 10 such meetings
MOF; the Planning Commission; the Implementation, were held during the project period.
Monitoring and Evaluation Division (IMED); Ministry of Health
and Family Welfare; Ministry of Environment; LGED; the
Power Development Board; Bangladesh Telephone and
Telegraph Board (BTTB) and pourashava chairpersons. The
PSC shall meet at least twice a year to coordinate and resolve
issues in Project implementation.
Project Implementing Unit (PIU):

A PIU shall be established in each of the participating Schedule 5, Complied with.
pourashavas. The PIU shall be headed by the Pourashava Para 4
Chairperson and shall be staffed by PWSS and DPHE staff. PIUs were established in each of the
The PIU shall be responsible for coordinating all activities at participating pourashavas and were fully
the local and for engaging town-level committees. In particular, involved in project activities outlined in
the PIU shall be responsible for: the covenant.
(i) procuring and managing civil works at pourashava level; Fifteen NGOs for Phase 1 (except for
(ii) managing all local NGOs and CBOs in implementing the Choumohani Pourashava) and 16 NGOs
health and hygiene education programs, constructing for Phase 2 for all pourashavas were
community sanitation facilities, as well as community recruited for the assigned jobs. NGOs
water points; completed their assigned tasks.
(iii)coordinating with PMU and ensuring that all interventions
were in accordance with the pourashava’s needs;
(iv)maintaining and managing all pourashava level
contracts, accounts and other project management
matters to ensure full compliance with ADB’s and
Borrower’s guidelines; and
(v) ensuring effective engagement of the community on all
project related matters.
Appendix 10 37
Reference Status
Covenant in Loan of
The Borrower shall provide counterpart funds for the project Schedule 5, Complied with.
implementation on time. The Borrower shall make timely Para 5
submission of annual budgetary appropriation request and The necessary counterpart fund was
ensure prompt disbursement of appropriated funds during provided by the Borrower.
each year of project implementation.
Pourashava Performance Review Committee (PPRC)
A PPRC shall be established within LGD and shall be Schedule 5, Complied with.
responsible for evaluating each of the pourashavas’ Para 6
performance and eligibility for Phase 2, in accordance with the LGD formed PPRC on 22 July 2009 and
paragraph 8 of this Schedule 5 to the Loan Agreement. The meetings were held as required. The
PPRC shall be chaired by the Secretary of LGD and consists fourth meeting, held on 10 August 2010,
of Chief Engineer of DPHE, Joint Secretary of LGD (water reviewed Phase 1 performance of
supply), Director General of LGD, representatives from the pourashavas and assessed that all the
Planning Commission, ERD and IMED. The PD shall act as project pourashavas qualified for Phase
the member secretary to the PPRC. ADB may participate in 2.
PPRC meetings as observer.
Subproject Selection Criteria
The Borrower and DPHE shall ensure that Subprojects shall Schedule 5,
be selected in accordance with the following process: Para 7
Each of the pourashavas shall meet the following initial Complied with.
screening criteria:
(a) classified as secondary towns (Class A and B) and

important small commercial towns;
(b) have current population of over 50,000; and
(c) have not received any external assistance for water
supply improvements worth over Tk50 million since
1998.
Pourashavas meeting the initial screening criteria will be Complied with.

ranked based on:
(a) the need for piped water supply improvements;

(b) sanitary latrine coverage below 60%;
(c) quality of available water resources, and the need for
treatment;
(d) poverty incidence of 30% or higher;
(e) incidence of waterborne diseases, such as, diarrhea
and dysentery, of more than 5% of the population per
year; and
(f) demonstrated institutional commitment to improving
the sustainability of WSS operations.
Qualified pourashavas have to meet the following criteria to be Complied with.

eligible for Subproject under Phase 1:
(a) the rehabilitation cost is not more than $500 per

connection;
(b) the proposed Subproject is not classified as Category A
for involuntary resettlement according to ADB
resettlement policy;
(c) the proposed Subproject is not classified as Category A
for environmental impacts according ADB requirements;
and
38 Appendix 10
Reference Status
Covenant in Loan of
(d) the proposed Subproject satisfies the environmental
subproject selection criteria in the Project’s EARP.
Conditions for Phase 2
The Borrower shall ensure that only eligible pourashavas shall Schedule 5, Complied with.
be included in and receive funding for Phase 2. To be eligible, Para 8
a pourashava shall demonstrate that it has successfully As mentioned in the foregoing
managed Phase 1 and meet the performance criteria that has paragraphs, all 16 pourashavas were
been prepared and agreed between the Borrower and ADB. A declared qualified for Phase 2 works as
pourashava that fails to meet all criteria by the end of Phase 1 they met the required 13 performance
shall be given 6-month period to improve its performance. A conditions.
pourashava that fails to demonstrate its commitment to
reforming and the sustainability of its water supply systems
shall not receive funding for Phase 2.
On-lending
Part of the Loan proceeds shall be provided to each of the Schedule 5, Complied with.
participating pourashavas in a blend of grant and loan. The Para 9
Borrower shall ensure that for piped water schemes, 50% of Subsidiary loan agreements (SLAs) for
construction cost shall be provided as a loan at an interest of Phase 1 and Phase 2 were signed by all
7% for 20 years, including a 5-year grace period and 50% pourashavas. The SLAs included details
shall be provided as a grant. For the community water supply on percentages of loans, grants, and
and sanitation component, 100% of construction cost shall be repayment terms.
a grant.
Subproject Agreement and Subsidiary Loan Agreement
The Borrower shall enter into a Subproject Agreement and a Schedule 5, Complied with.
Subsidiary Loan Agreement with each participating Para 10
pourashavas, on terms and conditions satisfactory to ADB. Subproject agreements were signed on
Pourashavas that are eligible to receive funding under Phase 19 April 2007 and 26 April 2007 for
2, shall enter into a second Subsidiary Loan Agreement with Phase 1 and on 6 October 2010 for
the Borrower. Phase 2. SLAs were signed on 1 March
2009 for Phase 1 and on 19 May 2011
for Phase 2.
Human Resources Development Center
Not later than 18 months after the loan Effective Date, the Schedule 5, The government approved construction
Borrower shall have established and institutionalized a human Para 11 of a HRD Centre in DPHE in July 2007; it
resource development center and/or a training center at DPHE is under construction with funding from
and shall have appointed all of the key staff. the government’s own fund, exclusive of
the project fund. No staff has so far been
appointed as formalities have not yet
been completed. Partially complied with.
Tariff Reform Plan
The Borrower shall cause each of the participating Schedule 5, Complied substantially.
Pourashavas to adopt a tariff reform plan. The first major tariff Para 12
revision shall be implemented before the end of Phase 1.
Fulfillment of this requirement shall be a condition to receive The Tariff and Financial Reform Plan
funding under Phase 2. Each Pourashava shall have fully (TFRP), as cleared by LGD on 7
metered piped water supply systems in the project towns and February 2010, was sent to the project
shall carry out a public awareness campaign on the need for pourashavas’ council for implementation
metering and tariff changes. and approval. Regarding metering, all
the existing house connections have
Appendix 10 39
Reference Status
Covenant in Loan of
been metered under the rehabilitation
phase and most of the new connections
were also metered in the expansion
phase.
Anticorruption Policy and Transparence Measures
The Borrower shall institute, maintain, and comply with internal Schedule 5, Complied with.
procedures and controls following international best practice Para 13
standards for the purpose of preventing corruption or money Necessary updated clauses on anti-
laundering activities or the financing of terrorism and shall corruption were incorporated in the
refrain from engaging in such activities. The Borrower shall tender documents.
allow ADB to investigate any violation or potential violation of
these undertakings. All contracts financed by ADB in
connection with the project shall include provisions specifying
the right of ADB to audit and examine the records and
accounts of the EA and all contractors, suppliers, consultants,
and other service providers as they relate to the Project.
The Borrower shall create a Project website to disclose Schedule 5, Complied with.
information about various matters on the Project. The website Para 14
shall include, among others, information on procurement, DPHE has its own website where a slot
including, the list of participating bidders, name of the winning has been allocated for the project. In
bidder, basic details on bidding procedures adopted, amount addition, another website exclusively for
of contract awarded, and the list of goods/services procured this project has been launched
. (www.stwssp.gov.bd).
Project Performance Monitoring and Evaluation (PPME)
The Borrower shall cause each participating Pourashava to Schedule 5, Complied with.
carry out PPME program with guidance from the PMU. Each of Para 15
the PIUs shall be responsible for ensuring that a Final report on PPME submitted to ADB
comprehensive program for PPME, acceptable to ADB, is in 2014.
carried out to (i) examine the Project’s technical performance;
(ii) evaluate the delivery of the planned facilities; (iii) assess
the achievement of the Project’s objectives; and (iv) measure
the Project’s social and economic benefits.
Not later than six months after the loan Effective Date the Schedule 5, Complied with.
PMU shall conduct initial baseline physical and socioeconomic Para 16
surveys and submit a detailed implementation plan for Baseline survey report, interim report,
monitoring performance and for preparing benchmark and final report submitted.
information to ADB, for its review and concurrence. Annually
PPME reports shall be prepared by each PIU, consolidated by Socioeconomic benchmark surveys
the PMU and submitted to ADB. completed.
Project Review
A joint review shall be conducted by ADB and the Borrower at Schedule 5, Complied with.
least twice a year. ADB and the Borrower shall undertake a Para 17
comprehensive review at the end of the rehabilitation phase. A A midterm review was conducted 10–24
midterm review shall be carried out within thirty six months April 2011, 51 months after effective date
from Effective Date. The reviews shall include a detailed as the project start-up was delayed.
evaluation of the Project scope, implementation arrangements,
and achievement of scheduled targets. It shall also assess Joint reviews were conducted regularly.
progress on Pourashava reform criteria compliance, The last joint review was conducted 2–18
institutional development, Subproject implementation, and the March 2014.
performance of consultants and the EA.
Gender
40 Appendix 10
Reference Status
Covenant in Loan of
To ensure that women benefit equally from the Project and Schedule 5, Complied with.
interventions avoid gender bias, the Borrower and DPHE shall Para 18
ensure that the Project is carried out in accordance with ADB’s Necessary attention had been paid to
Policy on Gender and Development (1998) and the gender gender issues. Appropriate actions were
strategy contained in the Gender Action plan that has been taken to implement the Gender Action
prepared and agreed between the Borrower and ADB. Plan.
Environment
The Borrower shall ensure that it shall not approve any Schedule 5, Complied with.
Subproject that involves significant environmental impacts Para 19
according to ADB’s Environmental Policy (2002) and 1. The selected subproject did not
Environmental Assessment Guidelines (2003). The design, involve significant environmental impacts
construction, operation and implementation of all Subproject during any phase of the project. Any
facilities shall be carried out in accordance with the adverse environmental impacts arising
environmental assessment and review procedures and IEEs from the construction, operation, and
for sample Subprojects agreed between the Borrower and implementation of the subproject facilities
ADB, and complies with the Borrower’s environmental Laws were minimized by adopting an
and regulations and ADB’s Environment Policy (2002). Any appropriate Environmental Management
adverse environmental impacts arising from the construction, Plan (EMP) to meet ADB guidelines.
operation and implementation of Subproject facilities shall be
minimized by implementing the environmental mitigation and 2. Appropriate steps to manage asbestos
management measures, and other recommendations specified pipes (where necessary) were taken.
in environmental assessment reports, The Borrower shall
ensure the satisfactory preparation and implementation of the 3. Necessary environmental require-
asbestos management plan and other safety plans, and that ments and occupational health and
qualified and competent personnel shall be recruited to carry safety of workers and communities
out the work. The Borrower shall ensure environmental (broad aspects) were incorporated in the
requirements shall be incorporated in bidding documents and bidding documents of civil works
civil works contracts. contracts.
4. Withdrawal of groundwater has been

minimized by adding 3 surface water
treatment plants in the project.
Involuntary Resettlement
The Borrower and DPHE shall ensure that it shall not approve Schedule 5, Complied with.
any subproject that involves significant involuntary Para 20
resettlement according to ADB’s Policy on Involuntary The issue of resettlement was not
Resettlement (1995). The Borrower shall further ensure that all significant in this project. The lands
land and right-of-way required for the Project shall be made which were needed for the construction
available in a timely manner and adequate compensations of production tube wells, treatment
shall be paid to affected people prior to any civil works plants, and overhead tanks are provided
contract’s award. Any involuntary resettlement shall be carried by pourashavas from their own land. In
out in accordance with the Resettlement Framework (RF) this regard, detailed guidance was given
agreed upon between the Borrower and ADB, and ADB’s to the pourashavas.
Policy on Involuntary Resettlement (1995). A Resettlement
Plan (RP) shall be prepared for each Subproject involving land
acquisition or resettlement and shall be submitted to ADB for
review and approval prior to any related civil works contract’s
award. The RP’s that have been prepared and agreed by the
Borrower and ADB, for the 4 sample subprojects, shall be
updated and provided to ADB for review and approval
following detailed design and prior to civil work contracts
award. Draft RPs and draft updated RPs shall be disclosed to
affected people prior to submission to ADB for review and
approval.
Appendix 10 41
Reference Status
Covenant in Loan of
Indigenous Peoples
Although the Project does not envisage any adverse impact on Schedule 5, Complied with.
indigenous peoples, the Borrower and DPHE shall ensure that Para 21
Subprojects shall be prepared and implemented in accordance The Project did not have any impact on
with ADB’s Policy on Indigenous Peoples (1998), in order to indigenous people. Piped water for the
increase the quality and access of water supply and sanitation poor area, including safe-water points,
received by indigenous peoples. household latrines, and community-
based latrines for the fringe areas were
provided, giving priority to indigenous
people.
OFID Loan
It is envisaged that OFID will provide a loan of $9,000,000 to Schedule 5, Complied with.
the Borrower, with a term of 20 years, including a grace period Para 22
of 5 years, an interest of 1% and a service charge of 1% per An OFID loan agreement was signed on
annum. In the event OFID loan materializes, the Borrower 20 March 2007. The OFID loan was used
shall ensure that the Proceeds of the OFID loan shall be used for the water supply component of 4
primarily for civil works in 3 to 4 Pourashava. In the event selected pourashavas (Joypurhat,
OFID Loan does not materialize, the number of the Kishoreganj, Moulvibazar, and
participating Pourashavas shall be reduced. Netrokona). The Project received $7.92
million for 4 pourashavas. The
government has returned the unused
amount of about $0.2 million.
42 Appendix 11
CONSULTANT S ACT UAL INPUT S
Provisions a t Provisions in Provisions in Utiliza tion up to

Appra isa l Contra ct a t la st amende d e nd of Contra ct
Position (p-m) Signing (p-m) Contra ct (p-m) (p-m)
Int'l National Int'l National Int'l National Int'l National
A. Ma na ge me nt, De sign
a nd Supe rvision Consulta nts
Team Leader 42.00 36.00 44.00 43.47

Resettlement Specialist 9.00 7.00 7.94 7.94
Environmental Specialist 9.00 7.00 0.00 0.00
Monitoring & Evaluation Specialist 2.00 2.00 2.03 2.03
W ater Supply Engineer - Operations 4.00 0.00 0.00 0.00
Deputy Team Leader 72.00 72.00 31.27 31.27
Resettlement Specialist 22.00 15.00 15.50 15.50
Environmental Specialist 36.00 24.00 33.46 33.46
Community Development Specialist 24.00 18.00 44.50 44.50
Monitoring & Evaluation Specialist 6.00 6.00 7.30 7.30
Hydrogeologist 16.00 12.00 13.63 13.63
W ater Supply Experts (2) 72.00 72.00 113.36 113.36
W ater Quality Specialist 6.00 5.00 2.97 2.97
Structural Engineer 24.00 16.00 27.75 27.75
Electrical Engineer 15.00 11.00 16.00 16.00
Mechanical Engineer 18.00 11.00 11.63 11.63
Sanitation Engineer 24.00 11.00 8.43 8.43
Resident Engineer (4) 240.00 216.00 220.86 218.86
Assistant Resident Engineer (16) 864.00 864.00 821.47 821.47
Tota l (A) 66.00 1,439.00 52.00 1,353.00 53.97 1,368.13 53.44 1,366.13
B. Ca pa city Building
Consulta nts
Institutional Specialist - Team Leader 11.00 10.00 10.00 10.00
Human Resources Dev Specialist 11.00 6.00 6.00 6.00
Financial Management Expert 24.00 6.00 5.77 5.77
Management Information
14.00 6.00 6.00 6.00
System Specialist
Institutional Specialist
42.00 24.00 53.00 53.00
- DeputyTeam Leader
Human Resources Dev Specialist 24.00 18.00 17.03 17.03
Trainer (3) 98.00 72.00 88.49 88.49
Facilitators (3) 72.00 54.00 51.83 48.83
Financial Management Expert 36.00 36.00 18.64 18.64
Management Information
30.00 24.00 43.83 43.83
System Specialist
Tota l (B) 60.00 302.00 28.00 228.00 27.77 272.82 27.77 269.82
Tota l (A + B) 126.00 1,741.00 80.00 1,581.00 81.74 1,640.95 81.21 1,635.95
Int'l = International, and p-m = per month.
Appendix 12 43
LIST OF NONGOVERNMENT ORGANIZATIONS

(Phase 1 and Phase 2)
Contract Date of Date of

Sl.
Pourashava Name of NGO Amount Commencement Completion
No.
(Tk million) (dd.mm.yyyy) (dd.mm.yyyy)
1 Brahmanbaria Gano Unnayan
4.58 13.12.2009 13.12.2012
Sangstha
Welfare Association for
Social Development &
2 Choumohani 2.28 1.11.2011 30.4.2013
Poverty Alleviation
(WASDPA)
Rural Reconstruction
3 Jessore 4.58 13.12.2009 13.12.2012
Foundation (RRF)
4 Jhenaidah RHECO Consortium 4.58 13.12.2009 13.12.2012
Aushgara Unnayan
5 Joypurhat 4.58 13.12.2009 13.6.2012
Sangstha (AUS)
Promotion Research
6 Kishoreganj Advocacy Training 4.59 1.2.2010 31.1.2013
Action Yard (PRATAY)
7 Laksmipur Zagorani–Dras 4.58 13.12.2009 13.12.2012
Integrated Village
8 Madaripur Development Society 4.57 13.12.2009 12.6.2011
(IVDS)
Association for Rural
9 Moulvibazar 4.58 13.12.2009 13.12.2012
Development (ARD)
Grameen Manobic
10 Mymensingh Unnayan Sangstha 6.87 13.12.2009 13.12.2012
(GRAMAUS)
Integrated Village
11 Narsingdi Development Society 4.57 13.12.2009 13.12.2012
(IVDS)
Samaj Unnayan
12 Natore 5.54 13.12.2009 13.12.2012
Kendra (SUK)
Women’s Environment
13 Netrokona and Development 4.57 13.12.2009 13.12.2012
Organization (WEDO)
Sokoler Jannya Kalyan
14 Pirojpur 4.58 1.2.2010 31.1.2013
(SJK)
Manab Unnayan
15 Serajganj 4.57 13.12.2009 13.12.2012
Sangstha (MUS)
Grameen Manobic
16 Sherpur Unnayan Sangstha 4.57 13.12.2009 13.12.2012
(GRAMAUS
Total 74.20
44 Appendix 13
LIST OF OFFICE EQUIPMENT AND CIVIL WORKS
A. OFFICE EQUIPMENT
Amount
Date of Date of
Item Quantity paid
Contract Completion
(Tk million)
Computers with laser printers 36 sets 23-Jan-08 10-Apr-08 3.08

and UPS
Computers with printers 16 sets 11-Mar-12 10-Apr-12 1.15
Photocopier and fax machine 2 sets 25-Nov-07 23-Dec-07 0.27

for PMU
Photocopier and fax machine 16 sets 14-Dec-12 15-Jan-13 4.60
for PIUs
Air conditioners 4 25-Nov-07 23-Dec-07 0.23
for PMU
Air conditioners for MDS 3 30-Apr-08 09-May-08 0.14
consultants
Air conditioners for 2 09-Jun-08 26-Jun-08 0.14
CB consultants
Furniture for PMU Lump
25-Nov-07 28-Mar-08 0.98
and PIUs sum
Lump
05-May-08 22-May-08 0.65
Furniture for MDS consultants sum
Furniture for Lump
16-Jun-08 29-Jun-08 0.93
CB consultants sum
1 13-Apr-08 13-Apr-08 1.75

Double cabin pickup for PMU
Motorcycles for PIUs 32 07-May-08 30-Jun-08 3.14
Four-wheel vehicle 1 30-Jun-08 30-Jun-08 3.26

for PMU
1 27-May-08 27-May-08 1.79

Double cabin pickup for PMU
1 02-Apr-08 0.45
Work station for PMU and PIU
Vaccu tug (sludge removal 26
08-Mar-12 12-Jul-12 35.89
equipment) for pourashavas (11+15)
Total 58.42
CB = capacity building; MDS = management, design, and supervision; PIU = project implementation unit; PMU
= project management unit; UPS = uninterrupted power supply.
Appendix 13 45
B. CIVIL WORKS
Contract
Amount Phase
Package No Description of Works Unit Quantity
(Tk Million)
Brahmanbaria
Rehabilitation /
BRA-R-01 replacement of pipelines, LS LS 43.42 1
OHTs, TPs, HC, and PTW
Installation of PTWs,
including pump house, all
BRA-E-PTW-02 Nos. 8 28.76 2
electrical equipment, etc.,
and water point
Construction of pipelines,
BRA-E-PL-03 km 38 87.38 2
new HC, and water meter
Construction of OHTs and
BRA-E-OHT/IRP-04 Nos. 1+2 87.70 2
TPs
Construction of different
BRA-S-01 Nos. 65 1.37 2
latrines
Jessore
Rehabilitation /
JES-R-01 replacement of pipelines, LS LS 53.67 1
JES-E-PTW-02 electrical equipment, Nos. 14 59.33 2
accessories, and water
point
JES-E-PL-03 new HC, and water meter km 33 99.95 2
JES-S-01 latrines Nos. 90 1.68 2
Pirojpur
Rehabilitation /
replacement of pipelines,
PER-R-01 LS LS 26.36 1
OHTs, TPs, HC, and
PTW
PER-E-PL-02 Construction of pipelines km 42 61.85 2
Construction of surface
PER-E-SWTP-03 water treatment plant and Nos. 1+2 124.38 2
OHT
46 Appendix 13
Contract
Amount Phase
(Tk Million)
PER-S-01 latrines Nos. 83 1.78 2
Serajganj
Rehabilitation /
SER-R-01 LS LS 26.38 1
OHTs, TPs, HC, and
PTW
SER-E-PTW-02 electrical equipment, Nos. 6 17.48 2
point
SER-E-PL-03 km 35 72.65 2
SER-E-OHT/TP-04 Nos. 1+1 66.93 2
TPs
SER-S-01 latrines Nos. 69 1.46 2
Natore
Rehabilitation /
NAT-R-01 LS LS 30.17 1
OHTs, TPs, HC, and
PTW
NAT-E-PTW-02 electrical equipment, Nos. 5 17.71 2
point
NAT-E-PL-03 km 42 82.88 2
NAT-E-OHT/TP-04 Nos. 1+1 51.95 2
TPs
NAT-S-01 latrines Nos. 53 1.09 2
Jhenaidah
Rehabilitation /
JHE-R-01 LS LS 20.39 1
OHTs, TPs, HC, and
PTW
JHE-E-PTW-02 including pump house, all Nos. 4 17.69 2
electrical equipment,
Appendix 13 47
Contract
Amount Phase
(Tk Million)
point
JHE-E-PL-03 km 35 68.51 2
JHE-S-01 latrines Nos. 71 1.51 2
Madaripur
Rehabilitation /
MAD-R-01 replacement of pipelines, LS LS 35.71 1
MAD-E-PL-03 km 38 50.00 2

MAD-E-OHT/TP-04 Nos. 1+1 87.29 2
surface water TP
MAD-S-01 latrines Nos. 85 1.92 2
Kishoreganj
Rehabilitation /
KIS-R-01 replacement of pipelines, LS LS 13.95 1
KIS-E-PTW-02 electrical equipment, Nos. 5 29.08 2
point
KIS-E-PL-03 km 35 88.54 2
KIS-E-OHT/TP-04 Nos. 2 36.14 2
TPs
KIS-S-01 latrines Nos. 70 1.57 2
Mymensingh
Rehabilitation /
MYM-R-01 replacement of pipelines, LS LS 51.12 1
MYM-E-PTW-02 including pump house, all Nos. 12 47.48 2
electrical equipment,
48 Appendix 13
Contract
Amount Phase
(Tk Million)
point
MYM-E-PL-03 km 50 139.67 2
MYM-E-OHT/TP-04 Nos. 2 38.34 2
TPs
MYM-S-01 latrines Nos. 96 2.54 2
Netrokona
Rehabilitation /
NET-R-01 replacement of pipelines, LS LS 17.43 1
NET-E-PTW-02 electrical equipment, Nos. 5 23.55 2
point
NET-E-PL-03 km 28 50.36 2
NET-E-OHT/TP-04 Nos. 2 31.76 2
TPs
NET-S-01 latrines Nos. 62 1.39 2
Moulvibazar
Rehabilitation /
MOU-R-01 replacement of pipelines, LS LS 15.72 1
MOU-E-PL-03 km 28 62.85 2

MOU-E-OHT/TP-04 Nos. 1+1 97.64 2
surface water TP
MOU-S-01 latrines Nos. 67 1.55 2
Choumohani
Rehabilitation /
CHO-R-01 replacement of pipelines, LS LS 12.95 1
Appendix 13 49
Contract
Amount Phase
(Tk Million)
CHO-E-PTW-02 electrical equipment, Nos. 6 27.62 2
point
CHO-E-PL-03 km 35 50.22 2
CHO-E-OHT/TP-04 Nos. 1+1 67.68 2
TPs
CHO-S-01 latrines Nos. 52 1.08 2
Narsingdi
Rehabilitation /
NAR-R-01 replacement of pipelines, LS LS 25.51 1
NAR-E-PL-03 km 38 91.41 2
NAR-E-OHT/IRP-04 Nos. 1 113.65 2
surface water TP
NAR-S-01 latrines Nos. 86 1.90 2
Joypurhat
Rehabilitation /
JOY-R-01 replacement of pipelines, LS LS 17.77 1
JOY-E-PTW-02 electrical equipment, Nos. 4 12.68 2
point
JOY-E-PL-03 km 25 55.33 2
JOY-E-OHT/IRP04 Nos. 1+1 53.06 2
TPs
JOY-S-01 latrines Nos. 90 2.06 2
Sherpur
Rehabilitation /
SHE-R-01 replacement of pipelines, LS LS 20.34 1
50 Appendix 13
Contract
Amount Phase
(Tk Million)
pump house, all electrical
SHE-E-PTW-02 Nos. 4 21.92 2
equipment, and water
point
SHE-E-PL-03 km 36 78.38 2
SHE-E-OHT/IRP-04 Nos. 1 - 2
TPs
SHE-S-01 latrines Nos. 60 1.33 2
Laksmipur
Rehabilitation /
LAK-R-01 replacement of pipelines, LS LS 19.10 1
LAK-E-PTW-02 electrical equipment, Nos. 5 17.61 2
point
LAK-E-PL-03 km 26 39.56 2
LAK-E-OHT-04 Nos. 1+1 66.53 2
TPs
LAK-S-01 latrines Nos. 86 1.89 2
HC = house connection; km = kilometer; LS = lump-sum ; no = number; OHT = overhead tank; PTW = production
tube well; TP = treatment plant.
Appendix 14 51
STATUS OF GENDER ACTION PLAN
1. All activities related to the Gender Action Plan contributed to achieving the overall
objective of improving the quality of the water supply and sanitation in intervention areas. The
project belonged to the Effective Gender Mainstreaming (EGM) category and the Gender Action
Plan (GAP) had the following four major features:
 Piped water and shared standpipe water supply improvement: integrate

gender perspective into the design and delivery of water supply intervention; and
empower women through participation in the development planning and
implementation of water supply intervention.
 Sanitation part of community latrine and school latrine: empower women

through participation in the development, planning, and implementation of
sanitation improvement.
 Institutional development and capacity building area: promote gender

awareness in the project’s institutional capacity development component, and
ensure women’s awareness of their roles in the project and involvement in
implementation.
 Project implementation and monitoring: ensure mainstreaming of gender in

the project through ensuring women’s full involvement and participation, and
ensure that women equitably benefit from the project.
2. In the original report and recommendation to the President (RRP), there was no
provision for a gender specialist to implement report on, and monitor the GAP. Furthermore, the
original GAP did not have sufficiently clear indicators. Considering the time constraints, and the
limited staff capacity and resources, the GAP (ref Appendix 12 of RRP) was revised during the
midterm review to ensure that maximum results were achieved. Following the recommendation
of the midterm review, a community development specialist (CDS) of the management, design,
and supervision (MDS) consultants was assigned as a gender focal point, with active support
from the project’s deputy team leader, to implement and monitor the GAP.
Benefits from Gender Perspectives:
3. Women’s participation in decision making: A total of 2,544 community-based

organizations (CBOs) and/or water user groups were formed, comprising 37,450 men and
40,525 women. Women were also members of the executive committees and involved in site
selection and maintenance of different facilities. Furthermore, a group consisting of 1,519 men
and 1,932 women was actively involved in the standpipe management committee. Women’s
mobility increased through attending different meetings and workshops organized by
pourashavas and local partner NGOs. NGOs formed 2,544 water and sanitation user groups
having at least one-third representation of local women, designated women as community
motivators, and represented the community in town-level committees. Further, the project
management unit (PMU) and ADB gender team trained the NGOs in their responsibilities toward
promoting women’s participation in the planning, implementation, and results phases. The
women who received safe drinking water and proper sanitation facilities were satisfied because
their workload was reduced as they no longer had to collect water, their children faced fewer
52 Appendix 14
waterborne diseases and their health improved, and their families were better able to save
money.
4. Women’s participation in employment and operation and maintenance (O&M): A

total of 66,683 men and 45,559 women directly benefited from the construction of water supply
and sanitation facilities; and 3,135 men and 2,754 women were employed during construction.19
A total of 140 men and 75 women were employed as laborers during construction of standpipes;
1,067 women were employed as laborers for safe-water points, which enabled them to get
access to mainstream economic activity. Some additional benefits were also noticed. The
contractor employed a group of local low-income women not as construction workers, but as
cooks and babysitters for workers with children. They were paid competitive wages, which
enabled them to improve their living standards.
5. Benefit from the project: At the end of the project, a total of 4,716 men and 4,200
women got access to water through standpipes, and 9,742 men and 11,318 women benefited
from safe-water points. A total of 15,307 boys and 26,415 girls received access to better
sanitation through school latrines.
6. Women’s participation in training: A total of 216 men and 1,263 women received
training in cleanliness, proper sanitation, and personal hygiene. The project produced 136,000
posters, 160,000 leaflets, and 177,200 stickers for the awareness campaign. NGOs used both
electronic and printed information, education, and communication (IEC) materials as part of the
campaign.
7. NGOs recruited 57.25% women staff members to broaden easy access to community
women. The NGOs produced gender-sensitive IEC materials and conducted several
awareness-raising courtyard meetings for water and sanitation user groups. Sex-disaggregated
data were collected during a socioeconomic survey for resettlement planning for households
headed by women and other disadvantaged groups. The project developed a reporting format
for collecting sex-disaggregated information on implementation of the GAP, and circulated it to
implementing NGOs. Quarterly reports were prepared and submitted to ADB regularly.
8. DPHE assigned a female assistant engineer as the gender focal point and its social wing
was also linked with GAP implementation and monitoring. Two initiatives were carried out
before the project ended: (i) a consultation meeting with the mayors of project pourashavas to
explore ways to maintain the momentum of the project outcome; and (ii) a refresher training
course for male and female councilors and assistant engineers/water supers of nine
pourashavas to discuss ways to take the project forward after completion. A link with some
pourashavas was included in the recently approved Third Urban Governance and Infrastructure
Improvement Project.
19
DPHE. 2014. Project Completion Report.
Appendix 14 53
STATUS OF GENDER ACTION PLAN
GAP GAP End of Progress Status

Activities Tasks Project Target up to 2014
Water Supply
Improvements:
Piped Water  Involve women in selection of  Ensure at least one-third 293 ECs/MCs formed, with 946
Supply locations for piped water supply. representation of women from women and 1,105 men. These women
Integrate gender UGs. members of EC/MC were consulted
perspective into  Integrate gender perspective into the on integrating gender perspectives in
the design and design of WS interventions, e.g.,  Provide 10% of employment the design and location selection
delivery of WS location, household responsibility, opportunities to women in phase of water supply.
intervention. security, and privacy. construction/installation of WS
facilities 3,941 women of a total of 5,369
 Impart orientation and training to UG/EC/MC members received
women laborers from UGs/CBOs and orientation/training before construction
other women laborers in of WS facilities.
construction/installation of WS
facilities. 356 women from UGs (of a total of
774 members) were employed during
construction of WS facilities (45.99%)
Shared
Standpipes and
Shared Safe-
Water Points
 Identify beneficiaries, including  Form UGs that ensure at least 293 UGs formed, with 4,930 women
Empower women at various sites. one-third representation of and 5,325 men members. (More than
women through women. one-third women members)
participation in  Form UGs that ensure at least one-
the third representation of women.  Provide 20% of employment 1,932 women and 1,519 men
development, opportunities to women CBO members were involved in the
planning, and  Integrate gender perspective into the members in construction/ standpipe management committee
implementation design and construction of WS installation works in WS and participated in the decision-
of WS interventions, e.g., location, intervention. making process.
intervention household responsibility, security,
and privacy. Gender perspectives (location,
security, and privacy issues) were
 Train women EC members of CBO integrated, in consultation with
on community motivation and tariff community women members.
collection.
A total of 1,178 safe-water points
were constructed, benefitting 22,370
men and 21,216 women.
3,470 UG members (1,934 men and

1,536 women ) were employed during
construction.
Sanitation
Improvements:
Community  Identify women’s convenience in site  Provide 20% employment 313 ECs/MCs formed, with 1,315
Latrine selection of community latrines. opportunities to women CBO women and 1,103 men. They selected
members in construction/ sites for latrines, taking into account
Empower  Integrate gender perspective into the installation of sanitation facilities women’s convenience.
women through design of community latrines, e.g.,
site selection, distance, privacy, and 1,186 women members of UG/EC/MC
54 Appendix 14

participation in security, etc. received training, out of a total of
the 1,800 trainees.
development,
planning, and  Provide 20% employment 328 women and 410 men were
opportunities to women CBO employed during
implementation construction/installation of sanitation
members in construction/installation
of sanitation of sanitation facilities. facilities (80%)
improvement.
School Latrine
and Public
Latrine
Empower  Identify girl students’ and women  Form committee for 160 ECs/MCs formed, with 491
women through teachers’ convenience in school construction/installation and women and 662 men for
participation in latrine installation/construction. maintenance of school construction/installation and
the latrines/public latrines and maintenance of school latrines/public
development,  Identify women’s needs in public ensure that one-third of latrines. Target of one-third women
planning, and latrine construction, e.g., location, members are women has been met.
implementation security, privacy, etc.
of sanitation A total of 975 girl students and 1,169
improvement.  Form committee for construction/ boy students received training.
installation and maintenance of
school latrines/public latrines and 201 laborers (118 men and 83
ensure that one-third of members are women) were employed.
women.
A total of 160 school latrines were
 Provide employment opportunities to constructed, benefitting 23,895 boys
women in construction/installation of and 14,996 girls.
sanitation facilities.
Institutional
Development
and Capacity
Building
Promote gender  Impart orientation and training to  Train all mayors, councilors All targeted members were trained.
awareness in pourashava women councilors, TLCC (men and women), and TLCC Gender-perspective training in WS
the institutional/ women members and town WATSAN members and sanitation issues was received by
capacity women members in WS and 15 women councilors, 15 men
development sanitation improvement activities councilors, 14 water supers, and 16
component of community mobilization specialists.
the project  Impart training to UG/CBO women
members in institutional development In order to equip and strengthen the
Ensure women’s and O&M of water supply and UGs formed under different WS and
awareness of sanitation improvement facilities. sanitation facilities, a bylaw was
their role in the developed and distributed to all project
project and  Impart orientation and training to pourashavas. The partner NGOs
involvement in pourashava mayors, male and female provided support to the UGs to follow
implementation councilors, male and female ward the provisions of the bylaw in their
committee members, male and functioning and institutional
female TLCC members on the role of development.
pourashavas in women’s
involvement, participation, and With assistance from the BRM gender
empowerment issues. team, a workshop on addressing gender
in water and sanitation projects was
organized in February 2012. The
workshop was attended by 15 men
councilors and 15 women councilors of
Appendix 14 55

project pourashavas, 14 water supers,
and 16 community mobilization
specialists (13 men and 3 women) from
16 project pourashavas.
Project
Implementation
and Monitoring
Ensure  Conduct gender-awareness  All PMU and PIU staff officials Each year from 2011 the deputy
mainstreaming consultation/orientation with the project director (as the gender focal
of gender in the PMU and PIU officials point) and project director participated
project in the gender-related training and
 Introduce the GAP to the project’s workshop organized by ADB’s gender
Ensure women’s officials and staff members. team of its Bangladesh Resident
full involvement Mission.
and participation
 Develop women-focused IEC  IEC materials developed to A good number of women-focused
Ensure that raise awareness of the IEC materials, including posters,
materials and conduct awareness
women equitably community. stickers, leaflets, and short dramas,
campaign on IEC and tariffs.
benefit from the were developed and sent to all
project pourashavas for display in public
places and use in motivational
sessions. The short dramas
highlighted the roles of the
community, including women, in the
use of safe water, timely payment of
bills, and use of clean latrines for
proper sanitation.
 Include a clause in the contract and
motivate the contractor to ensure  Clauses related to gender Clauses related to gender perspective
provision included in all included in contractors’ contract
equal wages to women laborers for
construction contract deeds. documents.
the same type of work as men.
 Motivate civil works contractors to  Motivate civil works contractors Women engaged as more than 20%
to employ at least 10% women of laborers in project-generated
employ at least 10% women and construction, installation, and
ensure equal wages for the same and ensure equal wages for the
same type of work as men. maintenance activities related to WS
type of work as men. and sanitation.
 Collect sex-disaggregated data from DPHE assigned an assistant engineer

each activity carried out and compile as a gender focal point to the PMU in
them in a report with gender-sensitive February 2014 to monitor and
indicators. coordinate the GAP.
 Periodical report of GAP with
Prepare quarterly/annual sex-disaggregated information The project developed a reporting
implementation report of the GAP. submitted. format with sex-disaggregated
information and distributed it among
the partner NGOs.
The project regularly submitted

quarterly GAP progress reports to
ADB.
ADB = Asian Development Bank; BRM = Bangladesh Resident Mission ; CBO = community-based organization; DPHE = Department
of Public Health Engineering; EC = executive committee; GAP = gender action plan; IEC = information, education, and
communication; MC = management committee; NGO = nongovernment organization; O&M = operation and maintenance; PMU =
project management unit; PIU = project implementation unit; TLCC = town-level coordination committee; UG = user group; WS =
water supply; and WATSAN = water and sanitation committee.
56 Appendix 15
ECONOMIC AND FINANCIAL ANALYSES

A. Introduction
1. The consultants visited project pourashavas and spoke with officials there and with the
Department of Public Health Engineering (DPHE). The project completion review (PCR) mission
inspected the rehabilitated and newly constructed infrastructures to check the implementation
and operating performance, quality of the construction, and maintenance status. The
rehabilitated and newly constructed infrastructures enhanced the capacity of the pourashavas to
increase safe water production, lay additional pipelines, establish new house connections, and
improve sanitation facilities. The mission also visited different environmental sanitation facilities
to observe how these were established, operated, and maintained, and if these helped improve
the environmental conditions in the fringe areas where low-income people generally live.
Additionally, the PCR mission collected quantitative and qualitative data about the project’s
impact on health and the environment by supplying safe water and improving sanitation
components. The project benefits and initial impact, as assessed, are briefly stated below.
B. Survey Findings
2. The PCR mission reviewed the household survey report prepared by DPHE at the end of
the project. 20 The survey findings, supplemented by observations of the PCR mission, are
presented here under the project components and household-level impacts (see below).
C. Project Components
1. Water Supply Improvements
3. Water supply improvements were implemented in two phases. In Phase 1, about 185 km
of pipelines, 6 arsenic and iron removal plants (IRPs/AIRPs), 22 overhead tanks (OHTs), one
surface water treatment plant (SWTP), 48 production tube wells (PTWs), and 15,354 house
connections were rehabilitated. A total of 36,811 water meters were installed with the existing
connections. In Phase 2, 85 PTWs were installed and commissioned; 8 IRPs/AIRPs, 4 SWTPs,
and 16 OHTs were constructed. As many as 49,856 household and commercial connections
were made. A total of 293 standpipes and 1,178 safe-water points were provided in the water
supply network.
2. Sanitation Improvements
4. In accordance with the government’s national sanitation policy, the sanitation

improvement component was incorporated to support the government’s aim to achieve 100%
sanitation coverage by 2015 (revised). The project supported the construction of 916 household
latrines, 313 community latrines, 59 public latrines, and 160 school latrines. Gender-sensitive
and user-friendly approaches were incorporated into an awareness campaign and management
activities for the community latrines. All activities related to the sanitation program were carried
out by nongovernment organizations (NGOs) and community-based organizations (CBOs). The
implementation of water supply and sanitation systems has improved the quality of life in the
towns.
20
DPHE. 2014. Post-project Conditions Evaluation and Household Survey Report. Dhaka
Appendix 15 57
3. Support for Institutional Capacity Building
5. The project aimed to enable DPHE to take on the new responsibilities of managing
sector investments and implementing the sector project, to assist in institutionalizing DPHE’s
role as a technical support agency, and to support its sector monitoring and planning capability.
6. The project aimed to support computerization of the pourashava water supply sections
(PWSSs); institutionalization of double-entry accounting in the PWSSs; training of pourashava
staff in accounting and financial management, operation and management (O&M) of their water
supply systems; establishment of town water and sanitation coordination committees that
ensure full representation from socioeconomic groups and women; and institutionalization of the
processes for effective community engagement.
4. Institutionalization of Pourashavas
7. Most of the institutional capacity building activities were achieved during implementation
with the assistance of the capacity building consultants. Some pourashavas seemed to lack the
initiative to maintain the systems after withdrawal of project support. Preparation of periodical
financial statements, cash-flow statements, and an updated inventory of fixed assets are not
meticulously maintained, most likely due to a shortage and transfer of trained manpower.
Computerization of most pourashavas’ accounting and financial management systems was
introduced but technical support for O&M of the system was reportedly inadequate. The mission
drew the attention of the pourashava authorities, DPHE, and local government division (LGD) to
the issues to ensure long-term sustainability.
8. The disclosure of transparent financial information to the citizens of pourashavas is the

major mandate of governance. The pourashavas are preparing and presenting an annual
budget and financial report for open discussion in the town-level coordination committees
(TLCC), indicating community participation in running pourashava affairs.
D. Household-Level Impacts
9. Waterborne Disease: With the improvement of water supply and sanitation under the
project, the spread of the two major and common waterborne diseases, diarrhea and dysentery,
have been reduced significantly. Only 6.4% of the sampled households have been affected by
diarrhea and 6.5% by dysentery as against 16.8% of the households by diarrhea and 15.3% by
dysentery before the project was completed. The scenario with other waterborne diseases was
more or less similar.
10. Sanitation Awareness: The information collected from the sampled households
provided a clear indication that adult males from 13% of households, adult females from 20% of
households, and schoolchildren from 14% of households had participated in the sanitary
awareness program. In addition, adult males from 13% of households, adult females from 5% of
households, and schoolchildren from 5% of households participated in the hygiene education
program. These facts indicate that the project’s aim on sanitation awareness was achieved.
11. Source of Water at Household Level: About 73% of households were connected with
a potable water supply; 26.5% of households used tube well water; and only 0.5% of
households used water from other sources for drinking purposes. About 59.5% of the sampled
households depended on the water supply for cooking and washing; 37% of the sampled
households depended on tube wells, and the rest use other sources.
58 Appendix 15
12. Quality of Supplied Water: The following were the important findings relating to the
water supply. About 73.5% of the sampled households expressed their satisfaction with the
service of the water supply. Those at the tail end of the water supply system were getting less
water because of the loss of pressure. About 69.8% expressed their satisfaction with the quality
of the water supply, while 30.2% expressed their dissatisfaction. About 27.4% of the sampled
households treated water to make it safe to drink. In addition to establishing AIRPs, the project
installed arsenic-free safe-water points and the population has benefitted by obtaining arsenic-
free water from these sources.
13. Public/ Community Latrines: The survey revealed that only 5.3% of the sampled
households used public or community latrines; of these, 84.6% were satisfied with the services
while 15.5% were not for the following reasons: latrines were not maintained properly (45%),
there was no water supply (40%), user fees were excessive (7.5%), as well as for other reasons
(7.5%).
14. Water Tariff and Billing Systems: Reform of the water tariff system brought about
substantial changes in the billing system. The reform helped improve preparation and delivery of
bills to households connected with water the supply, as well as regular payment by consumers.
However, in a few pourashavas, the tariff recovery rate is lower than the rate needed to meet
the O&M cost. Pourashavas’ attention was drawn to the need to improve the recovery rate by
up to 90% for sustainability. The meter-billing system is not yet fully established, which is one of
the reasons why the expected rate of recovery has not yet been attained. The PCR mission
found that the trend of water tariff demand and collection has been increasing since FY2009,
from an aggregate collection rate of 57.5% to 67.9% in FY2014. Significant improvement was
observed in Joypurhat (89%), Jessore (85%), Sherpur (76%), Laksmipur (69%), Natore, and
Choumohani (67%).
E. Benefits from Sanitation Component
1. Latrines
15. Under the sanitation component there are four types of latrines: public, school,
community, and household. The school and household latrines will not generate any significant
revenue. In the case of public and community latrines there might be a scope of income, which
could be utilized to sustain the sanitation system at the community level and help manage the
O&M cost. Public latrines will generate revenue through annual leasing. As not all public latrines
have been leased out, the PCR mission could not evaluate the impact of leasing. The
pourashavas receive no direct income from the sanitation component, except for the leases of
public latrines, but there has been a huge impact in terms of the reduction of various water- and
airborne diseases, and of the attendant medical costs. In addition, fewer labor days will be lost
due to disease.
2. Sludge Management
16. A total of 26 pieces of septic tank sludge removal equipment (known as vaccu tug) have
been procured for sludge management under this project. This is a new idea for the
pourashavas. The fee for collection of sludge from any household is about Tk1,200 each time
(this varies from pourashava to pourashava). The vaccu tugs can be used 5 times in a day for
300 days in a year. If pourashavas can motivate their citizens to empty their septic tanks by
using vaccu tug, they could generate a considerable amount of income.
Appendix 15 59
17. Industrial and residential sludge are constituted of organic and inorganic substances.
Sewage sludge, referred as a biosolid, is being used in agriculture as a fertilizer and an organic
supplement to improve the physical, chemical, and biological properties of soil. Sewage sludge
has been used as an economic organic fertilizer in land reclamation for many years, initially by
some NGOs in different areas where its nitrogen, phosphorous, and organic matter content has
been found to be an effective means of overcoming the nutrient and physical soil deficiencies
common to a wide range of derelict land types. This is an indirect benefit from this component.
F. Economic Analysis
18. Economic analysis has been conducted for the pourashava water supply subprojects in
accordance with the ADB’s guidelines, including its Guidelines for the Economic Analysis of the
Projects21 and Guidelines for the Economic Analysis of Water Supply Projects.22 The subproject
life was assumed to be 20 years, with salvage values. The population growth in each town is
projected based on historical trends. Parameters assumed are drawn from socioeconomic
surveys, public statistics, questionnaires, focus group discussions, and discussions with
experts.
19. Twenty-percent (20%) water losses (system loss, street taps, etc.) were considered an
economic benefit. An additional 20% economic benefit was due to sanitation improvement,
reduction of medical costs, increase in labor working hours, etc. A total of 40% economic benefit
was added with the revenue cost as economic benefit.
20. Assumptions for the economic analysis are as follows:
i. The project is analyzed over a period of 20 years.
ii. All costs are included in capital expenditures, less price contingencies; capital
expenditures are recorded at the time they are incurred; finance charges are
included. The value of benefits arising from water sales was calculated by
multiplying the volume of water sold each year by the proposed tariffs used for
each year in constant prices.
iii. The capital cost was considered after reducing it by a total of 48%, comprising
residual value (30%), and VAT and other costs (18%).
iv. Annual incremental O&M cost was increased by 5% annually.
v. Revenue was increased every 5 years from FY2013.
vi. The interest rate on the ADB and OFID loan (50% of the construction cost of the
piped water-supply system) was considered to be 7%.
vii. Payment of principal and interest by the pourashavas was affected after a 5-year
grace period.
viii. Sensitivity analysis was considered for five different scenarios: (a) capital cost
increased by 10%; (b) O&M cost increased by 10%; (c) incremental revenue
21
ADB. 1997. Economics and Development Resource Centre. Guidelines for the Economic Analysis of Projects. Manila.
22
ADB. 1998. Economics and Development Resource Centre. Guidelines for the Economic Analysis of Water Supply Projects.
Manila
60 Appendix 15
decreased by 10%; (d) worst-case scenario (capital cost increased by 10% and
benefit decreased by 10%); and (e) 1-year delay.
ix. Water losses of 20% (system loss, street taps, free water supply to eligible
entities/citizens, etc.) were considered an economic benefit. Another 20%
economic benefit was considered due to sanitation improvement, reduction of
medical costs, increase in the number of labor working hours, etc. A total of 40%
economic benefit was added with the revenue cost as economic benefit during
the economic analysis.
21. A summary of the economic analysis is shown in the table below:
Table A15.1: EIRR and Sensitivity Results of Pourashavas
(Figures in percentages)
Base Capital O&M Benefit Worst One-
Pourashavas
Cost cost +10% cost +10% - 10% case year delay
Brahmanbaria 20.25 18.35 19.90 15.69 12.20 20.05
Choumohani 16.36 15.29 15.94 14.63 11.69 15.92
Jessore 13.95 12.77 13.48 12.06 8.98 13.64
Jhenaidah 19.30 17.63 19.00 10.80 12.16 19.10
Joypurhat 21.89 19.87 21.20 18.70 13.70 21.70
Kishoreganj 15.93 14.65 15.64 14.02 10.30 15.60
Laksmipur 17.60 15.94 16.76 14.65 11.27 17.35
Madaripur 17.84 16.21 17.60 15.57 10.75 17.57
Mymensingh 14.46 13.23 13.97 12.44 9.41 13.99
Moulvibazar 19.43 17.87 18.76 16.73 13.22 19.15
Narsingdi 14.59 13.35 14.28 12.76 9.70 14.22
Natore 17.40 15.94 17.20 10.83 10.86 17.14
Netrokona 21.55 19.30 20.50 17.52 13.26 21.30
Pirojpur 12.65 11.78 12.23 11.08 8.98 12.20
Serajganj 18.11 16.57 17.75 15.75 11.42 17.85
Sherpur 21.89 19.87 21.20 12.85 13.70 21.70
EIRR = economic internal rate of return; O&M = operation and maintenance; PCR = project completion
report.
Source: PCR consultants.
22. Table A15.1 shows that the economic internal rate of return (EIRR) varies from 12.65%
to 21.89% (base case), 11.78% to 19.87% (increased capital cost case), 12.23% to 21.20%
(increased O&M cost case), 10.80% to 18.70% (decreased revenue case), 8.98% to 13.70%
(worst case), and 12.20% to 21.70% (1-year delay case). The values of the EIRR showed that
the project is economically sustainable. The PCR mission could not compare the EIRR values
with those at appraisal as they were not available. As there was no weighted average EIRR
documented at appraisal, the efficiency of each pourashava was separately assessed by
calculating the EIRR and the financial internal rate of return (FIRR) for each pourashava.
G. Financial Analysis
23. The financial analysis is based on the results of the assessment conducted on water
supply subprojects of the Secondary Towns Water Supply and Sanitation Sector Project. The
financial cost of the project is the total cost of Phase 1 and Phase 2 for the rehabilitation and/or
replacement of water pipelines; OHTs; a treatment plant; house connections; installation of new
PTWs, including pump houses, electrical appliances, and water meters; laying of pipelines in
new areas with new house connections and water meters; and construction of OHTs and
Appendix 15 61
treatment plants, excluding the residual value, VAT, and taxes. The financial benefits from the
project were calculated on the basis of the information received from pourashava account
sections, water supply tariff reports, and the Tariff and Financial Action Plan (TFAP).
24. Under the water supply subprojects, the pourashavas are collecting water taxes and
tariffs, which are in some cases physically found partially satisfactory. The FIRR was calculated
considering the total cost against the capital cost, O&M cost, and financial cost. The incremental
revenue was calculated from the actual revenue collected from the pourashavas. A sensitivity
analysis was conducted, considering five different scenarios: (i) capital cost increased by 10%;
(ii) O&M cost increased by 10%; (iii) incremental revenue decreased by 10%; (iv) worst-case
scenario (capital cost increased by 10% and benefit decreased by 10%); and (v) 1-year delay.
The balance of the pourashavas was calculated deducting the principal amount from the net
cash flow. The benefit-cost ratio (BCR) was also calculated.
25. The following assumptions were used to calculate the FIRR:
i. The project’s financial projection is analyzed over a period of 20 years.

ii. All costs are included in capital expenditures, less price contingencies; capital
expenditures are recorded at the time they are incurred, also the finance charges
are included. The value of benefits arising from water tariffs was calculated by
multiplying the volume of water charges each year by the proposed tariff rate
used for each year in constant prices.
iii. The capital cost was considered after reducing it by a total of 48%, comprising
residual value (30%), VAT, and other costs (18%).
iv. Annual incremental O&M cost was increased by 5% annually.
v. Revenue was increased every 5 years from FY 2013.
vi. The interest rate on the ADB and OFID loan (50% of the construction cost of the
piped water-supply systems) was considered to be 7%.
vii. Principal and interest are paid after a 5-year grace period.
viii. A sensitivity analysis was considered for five different scenarios: (a) capital
cost increased by 10%; (b) O&M cost increased by 10%; (c) incremental
revenue decreased by 10%; (d) worst-case scenario (capital cost increased
by 10% and benefit decreased by 10%); and (e) 1-year delay.
ix. Water losses of 20% (system loss, street tap etc.) in the project town are
assumed during the analysis.
x. Minimum water tariff collection efficiency has been assumed as 80%.
xi. Capital cost, incremental revenue income, and expenditures, based on the
data provided by pourashavas.
62 Appendix 15
26. Summary of the financial analysis is shown in the table below:
Table A15.2: Summary of Financial Analysis (FIRR) – Water Supply

Capital O&M
Revenue
Base cost cost Worst One- WACC
Pourashavas decreased
cost increased increased case year delay %
by 10%
by 10% by10%
Brahmanbaria 10.07 7.78 8.74 6.90 0.82 8.38 4.90
Choumohani 6.97 6.13 6.34 5.21 2.87 5.93 2.57
Jessore 7.65 5.80 6.18 5.04 -0.27 6.04 2.20
Jhenaidah 11.27 9.33 10.24 10.50 1.74 9.97 3.17
Joypurhat 12.03 9.72 10.44 11.06 1.16 10.40 4.57
Kishoreganj 9.57 7.55 8.25 8.55 0.74 7.84 3.61
Laksmipur 8.25 6.05 6.23 7.13 -1.02 6.35 2.74
Madaripur 10.43 8.36 9.33 9.56 0.56 8.98 3.86
Moulvibazar 11.03 8.98 9.45 10.07 1.65 9.42 3.87
Mymensingh 8.02 5.65 6.05 6.57 -0.50 5.51 3.16
Narsingdi 8.63 6.47 7.15 7.48 -0.35 6.70 2.63
Natore 10.58 8.55 9.46 9.68 1.12 9.05 5.90
Netrokona 10.18 7.57 7.98 8.90 1.17 7.82 5.47
Pirojpur 7.44 5.42 5.68 6.16 0.04 5.24 2.31
Serajganj 10.51 8.46 9.29 9.64 0.63 9.06 3.79
Sherpur 8.47 6.26 6.83 7.13 0.19 6.20 3.66
FIRR = financial internal rate of return; O&M = operation and maintenance; PCR = project completion report;
WACC= weighted average cost of capital.
Source: PCR consultants.
27. Table A15.2 shows that the FIRR varies from 6.97% to 12.03% (base case), 5.42% to
9.72% (increased capital cost case), 6.05% to 10.44% (increased O&M cost case), 5.04% to
11.06% (decreased revenue case), -1.02% to 2.87% (worst case), and 5.24% to 10.4% (1-year
delay case). The values of the FIRR showed good financial results of the pourashavas. The
analysis shows that the remaining balance after 20 years of operation varies from Tk98.36
million in Netrokona to Tk649.80 million in Jessore.
28. The weighted average cost of capital (WACC) considers the cost of various modes of
financing (own resources, debt, etc.) and the scheme of assigning weights over the finance
items (debt, equity, etc.). The cost of loan financing, for revenue earning of each subproject, is
assumed to be 7%. In the case of the pourashavas, the cost of equity is usually assumed to be
0% because it is a government entity and mostly run by public-sector financing. The domestic
long-term inflation rate of 6% is assumed for converting nominal rates into real rates. In
Bangladesh, for all foreign currency funding, the US dollar inflation rate of 0.8% per annum is
assumed. The WACC of the different pourashavas is shown in Table A15.2. The highest WACC
of 5.90%, at the PCR stage, was in Natore and the lowest WACC of 2.20% was in Jessore. The
consolidated WACC of 3.35% was computed for the project in real terms. In each subproject the
FIRR is higher in comparison to the WACC at the PCR stage and the weighted average FIRR of
9.07% (see para. 30) is also higher than the WACC for the full project, i.e., 3.35%. The
subprojects are thus financially sustainable.
29. Of the 16 pourashavas, the FIRR of only four pilot pourashavas (Brahmanbaria, Jessore,
Serajganj and Pirojpur) was determined at appraisal, using the base cost. The FIRR of the
remaining 12 pourashavas was not calculated at the feasibility stage as these were selected at
Appendix 15 63
appraisal. A comparison of FIRRs between appraisal and the PCR is in Table A15.4. The FIRR
increased mainly due to follow-up of the TFAP, revision of the tariff schedule adopting the
volumetric method of water consumption, an increase in the volume of the water supply, an
increase in tariff collection rates, and other potential areas.
Table A15.3: Weighted average FIRR of all 16 Pourashavas

Sensitivity FIRR
Cases (in percentages)
a. Base Case 9.07
b. Capital Costs Increased by 10% 8.13
c. O&M Costs Increased by 10% 8.64
d. Incremental Revenue Decreased by 10% 7.37
e. Worst-Case Scenario (Combination of ‘c’ and ‘d’) 1.82
f. One-Year Delay 8.58
FIRR = financial internal rate of return; O&M = operation and maintenance.
30. In Table 15.3, the weighted average FIRR of 16 pourashavas was further recalculated
using the current data. It shows that the weighted average FIRR of the project at base case was
9.07%. When capital cost increased by 10%, the FIRR was 8.13%. When O&M cost increased
by 10%, this value appeared as 8.64%. When incremental revenue decreased by 10%, the
FIRR was 7.37%. In the worst-case scenario, the value was 1.82%. And finally, in case of a 1-
year delay, the FIRR value was 8.58%. Although there was no weighted average FIRR for the
project at appraisal, compared with the individual FIRRs of the four pilot pourashavas (2.2% to
3.6%), it can be concluded that the overall financial performance of the pourashavas improved,
and thus the project is likely to be sustainable.
Table A15.4: Comparison of FIRR between appraisal and PCR

FIRR at Base Cost
Pourashavas
Appraisal PCR
A. Pilot pourashavas
Brahmanbaria 3.6 10.07
Jessore 3.0 7.65
Pirojpur 2.2 7.44
Serajganj 2.3 10.51
B. Other pourashavas
Choumohani Not done 6.97
Jhenaidah Not done 11.27
Joypurhat Not done 12.03
Kishorganj Not done 9.57
Laksmipur Not done 8.25
Madaripur Not done 10.43
Moulvibazar Not done 11.03
Mymensingh Not done 8.02
Narsingdi Not done 8.63
Natore Not done 10.58
Netrokona Not done 10.18
Sherpur Not done 8.47
FIRR = financial internal rate of return; PCR = project completion report
64 Appendix 15
31. Using the information available in the TFAP, the BCR is calculated and the values are
shown in Table A15.5. The BCR varies from 1.47 in Laksmipur to 2.84 in Jhenaidah. The
average BCR of the project is 1.85, which indicates that the project will be financially viable and
sustainable in the long run.
Table A15.5: Benefit-Cost Ratio (BCR) of the Pourashavas
Pourashavas BCR
Brahmanbaria 1.77
Choumohani 1.71
Jessore 1.66
Jhenaidah 2.84
Joypurhat 1.81
Kishorganj 1.97
Laksmipur 1.47
Madaripur 1.98
Moulvibazar 1.81
Mymensingh 1.70
Narsingdi 1.86
Natore 2.11
Netrokona 1.52
Pirojpur 1.73
Serajganj 1.87
Sherpur 1.78
Average 1.85

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Completion Report

Project Number: 36297-013

Bangladesh: Secondary Towns Water Supply and

Currency Unit – taka (Tk)

At Appraisal At Project Completion

ADB – Asian Development Bank

km (kilometer) – unit measurement for length

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

Vice-President W. Zhang, Vice President, Operations 1

Team leader M. S. Alam, Senior Project Officer (Urban Infrastructure), SARD

3. Date of Board Approval 16 October 2006

4. Date of Loan Agreement 8 November 2006

5. Date of Loan Effectiveness

8. Terms of Relending (if any)

Effective Date Original Closing Date Time Interval

10. Local Costs (Financed)

2. Financing Plan ($ million)

3. Cost Breakdown by Project Component ($ million)

5. Project Performance Report Ratings

D. Data on Asian Development Bank Missions

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

1. Part A: Water Supply Improvements

11. Works under Phase 2: Pipeline. The project aimed to improve

2. Part B: Sanitation Improvements

3. Part C: Institutional Development

18. Institutional Strengthening of Pourashavas. The capacity building consultants

4. Part D: Special Features

27. Subproject Selection, Formulation, Approval, and Subproject Agreements. The

G. Conditions and Covenants

H. Consultant Recruitment and Procurement

30. Management, Design, and Supervision (MDS) Consultants. MDS consultants

31. Capacity Building Consultants. At appraisal, capacity building consultants comprised

I. Performance of Consultants, Contractors, and Suppliers

J. Performance of the Borrower and the Executing Agency

K. Performance of the Asian Development Bank

III. EVALUATION OF PERFORMANCE

B. Effectiveness in Achieving Outcome

C. Efficiency in Achieving Outcome and Outputs

D. Preliminary Assessment of Sustainability

48. During construction, no people were identified as adversely impacted or needing

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

checked by pourashava authorities. Regular training for pourashavas is to be provided to

 53 production tube wells 123 PTWs 43 PTWs 48 PTWs regenerated 111.62%

 250 km of distribution 123 km Included in water The achievement of distribution –

Phase 2: System Expansion

 18 new OHTs with 680 – 16 OHTs 16 OHTs 100%

 600 km of distribution – 750 km of 684 km distribution mains 91.2%

 889 UGs  5,360 UGs members of SPs

 10,549  34,600 UGs members of

– TNA report – 1 Prepared 100%

 PPME system – 5 reports 5 reports already prepared 100%

 DPHE acquired skills to – Not indicated DPHE recruited 150 new –

 DPHE capacity to – Not indicated DPHE is now working as the –

 All project management – Support to Support provided 100%

Source: Asian Development Bank.

WORKS ACCOMPLISHED IN PHASE 1

WORKS ACCOMPLISHED IN PHASE 2

W ater Supply Component Sanitation Component

INSTITUTIONAL STRENGTHENING OF DPHE AND POURASHAVAS

MAJOR WORKS - 100% FINANCED BY GOVERNMENT

Jhenaidah 1 1 8.10 0 91.26 Construction of STP,

Narsingdi 1 0 0.00 0 94.35 Construction of STP