Document o f The World Bank

FOR OFFICIAL USE ONLY

Report No: 45055-BD

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 42.2 MILLION (US$62.20MILLION EQUIVALENT)

TO THE

PEOPLE’S REPUBLIC OF BANGLADESH

FOR THE

CLEAN AIR AND SUSTAINABLE ENVIRONMENT PROJECT

April 21,2009

Social, Environment and Water Resources Management Unit Sustainable Development Department South Asia Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. I t s contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective February 28,2009) Currency Unit = Bangladesh Taka (BDT)

68.5BDT = US$1 1.47609US$ = SDRl

ADP A 0 AQC AQMP B A C BRTA CAG CAO CAS CASE

CEA CGA CNG CPTU DA DCA DCC DFID

DG DOE DTC DTCB DUTP EC ECA ECR ESMF

FAPAD FCK FM FMR FOB GOB GPN ICB

FISCAL YEAR July 1 - June 30

ABBREVIATIONS AND ACRONYMS

Annual Development Plan Accounts Officer Air Quality Cell Air Quality Management Project Brick Advisory Committee Bangladesh Road Transport Authority Comptroller & Auditor General Chief Accounts Officer Country Assistance Strategy Clean Air and Sustainable Environment Country Environmental Analysis Controller General o f Audit Compressed Natural Gas Central Procurement Training Unit Designated Account Development Credit Agreement Dhaka City Corporation Department for International Development (UK) Director General Depart o f Environment Departmental Technical Committee Dhaka Transport Coordination Board Dhaka Urban Transport Project European Commission Environmental Conservation Act Environmental Conservation Rules Environmental and Social Management Framework Foreign Aided Projects Audit Division Fixed Chimney Kilns Financial Management Financial Monitoring Report Foot Over-bridge Government o f Bangladesh General Procurement Notice International Competitive Bidding

IDA IFR IMG JICA

KPI LGD MDG M&E MIE MIS MNV MOC MOEF MOF M O M M O U M O L G RDC MRTC

MTBF MTR MV MVO NGO O M PD PDO PEM PIA PIC P I M PIN PIU P M PPR PRSP

International Development Association Interim Financial Report Implementation Monitoring Group Japanese International Cooperation Agency Key Performance Indicators Local Government Division Millennium Development Goal Monitoring and Evaluation Monitoring, Inspection and Evaluation Management Information System Non-motorized Vehicles Ministry o f Communications Ministry o f Environment and Forest Ministry of Finance Ministry o f Home Affairs Memorandum o f Understanding Ministry o f Local Government Rural Development and Cooperatives Metropolitan Road Transport Committee Medium-Term Budgetary Framework Mid-Term Review Motor Vehicles Motor Vehicles Ordinance Non-Governmental Organization Operational Manual Project Director Project Development Objective Public Expenditure Management Project Implementation Agency Project Implementation Cell Project Implementation Plan Project Idea Note (Carbon Finance) Project Implementation Unit Particulate Matter Public Procurement Rules Poverty Reduction Strategy Paper

FOR OFFICIAL USE ONLY

PSC RAJUK

RFP S I L SOE RP

Project Steering Committee RRD Roads and Railways Division Rajdhani Unnayan Katripakha (Capital STP Strategic Transport Plan Development Authority) Tg Terra Gram Request for Proposal SUT Sustainable Urban Transport Specific Investment Loan UNDP United Nations Development Program Statement o f Expenditures V S B K Vertical Shaft Br ick Kilns Resettlement Plan WB World Bank

Vice President: Isabel M. Guerrero

Sector Manager: Karin Erika Kemper Country Director: Xian Zhu

Task Team Leader: Maria Sarraf

This document has a restricted distribution and may be used by recipients only in the performance o f their off icial duties. I t s contents may not be otherwise disclosed without Wor ld Bank authorization.

3

BANGLADESH

CLEAN AIR AND SUSTAINABLE ENVIRONMENT PROJECT (CASE)

PROJECT APPFUISAL DOCUMENT

SOUTH ASIA

SASSD

Date: April 21,2009

Country Director: Xian Zhu Sector ManagerDirector: Karin Erika Kemper / John Henry Stein

Team Leader: Maria Sarraf (since 15 October, 2008)

Sectors: General transportation sector (60%); Other industry (30%); Central government administration (1 0%) Themes: Pollution management and environmental health (P); Environmental policies and institutions (S); Other urban development ( S ) Environmental screening category: Partial Assessment

Sameer Akbar (until 15 October 2008)

Project ID: PO98 15 1 Lending Instrument: SDecific Investment Loan v

For Loans/Credits/Others: None Total Bank financing (US$m.): 62.20 Proposed terms: Standard IDA terms,

Borrower: Government o f Bangladesh Responsible Agency: Ministry o f Environment and Forests, Department o f Environment, Paribesh Bhaban, E- 16 Agargaon, Sher-e-Bangla Nagar, Dhaka, Bangladesh 1207

Project implementation period: Start: November 30,2009 End: December 30,2014 Expected effectiveness date: November 30,2009 Expected closing date: December 31, 2014 Does the project depart from the CAS in content or other significant respects? ReJ PAD I A . Does the project require any exceptions from Bank policies? Have these been approved by Bank management? I s approval for any policy exception sought from the Board? Does the project include any critical risks rated “substantial” or “high”? ReJ PAD 1.1 F. Does the project meet the Regional criteria for readiness for implementation? Project development objective ReJ PAD I IB., Annex 3 To improve air quality andsafe mobility in Dhaka through the implementation of demonstration initiatives in urban transport and brick making.

[ ]Yes [XI N o [ ]Yes [XINO [ ]Yes [XINO [ ]Yes [XINO [XIYes [ ] N o [XIYes [ ] N o

4

Project description: Re$ PAD 11 C, Annex 4 Component 1: Environment aims at (i) strengthening the capacity o f the Ministry o f Environment and Forest and Department o f Environment in air quality monitoring and (ii) demonstrating the effectiveness o f new brick kiln technology to reduce air pollution emissions. I t s sub-components include: capacity building for air quality management; brick kilns em'issions management; and communication campaigns. Component 2: Transport will support demonstration environmental investments in urban transport in Dhaka. I t s sub-components include: physical improvement o f traffic f low and pedestrian mobility; preparation o f a bus route network rationalization and franchising; and institutional strengthening and regulatory review. Which safeguard policies are triggered, if any? Ref; PAD I V F., Annex 10 Environmental Assessment (OP/BP 4.0 1) and Involuntary Resettlement (OP/BP 4.12) Significant, non-standard conditions, if any, for: Board presentation: none Loadcredit effectiveness: none Covenants applicable to project implementation:

Institutional -The Government shall, until the completion o f the Project, maintain a Project Steering Committee (PSC). The role and functions o f the PSC are described in Annex 6.

-The Government shall maintain a Project Coordination Unit (PCU). The responsibility o f the PCU is described in Annex 6.

-The Government shall establish and maintain 3 Project Implementation Units (PIUs). One PIU will be established and maintained at the Department o f Environment and will be responsible for implementing Component 1 o f the Project. One PIU wil l be established and maintained at Dhaka City Corporation and will be responsible for implementing Component 2 A o f the Project. One PIU wil l be established and created at Dhaka Transport Coordination Board and will be responsible for implementing Component 2 B o f the Project. Each PIU will be headed by a Project Director. A detailed description o f the roles and responsibilities o f PIUs and Project Directors is provided in Annex 6.

Anti-Corruption - The Government shall implement the project in compliance with The Guidelines for Preventing and

Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants (dated October 15, 2006).

Safeguards - The Government shall implement the project in accordance with the objectives, policies, procedures, t ime

schedules and other provisions set forth in the Environment and Social Management Framework. Ref; Annex 10.

Project Reports - The Government shall, through the PIUs and the PCU, monitor and evaluate the progress o f the project

and prepare a Project Report that covers the period o f one calendar semester, and shall be furnished to the Bank 45 days after the end o f the period covered by such report.

Financial Reports and Audits - The Government shall prepare and furnish to the Bank (i) quarterly Interim Unaudited Financial Reports

for the Project not later than 45 days after the end o f each calendar quarter and (ii) an audit o f i t s Financial Statements that covers one fiscal year, no later than six months after the end o f each fiscal year. Ref Annex 7.

Procurement - The Government shall: (i) implement a Procurement Risk Mitigation Framework, in form and substance

acceptable to the Bank; (ii) by no later than M a y 30, 2009, appoint two procurement specialists, with qualifications, experience and terms o f reference satisfactory to the Bank; (iii) ensure that for a l l contracts procured under the Project and subject to prior review a procurement consultant participate in a l l bid

5

evaluation committee meetings, assist the bid evaluation committee and prepare report on the procurement process; and (iv) ensure that for procurement carried out through DCC, regardless o f the value o f the contracts, a representative o f the design and supervision consultant wi l l participate in the bid evaluation committee to facilitate the procurement process.

- The Government shall through the PCU ensure that the Implementing Agencies (i) collate an activity f low chart for all prior review contracts, (ii) report on progress with respective procurement risk mitigation action plan and procurement performance indicators, and forward the reports to the Association; and (iii) by April 2009, submit a tentative two year training plan for al l concerned procurement staff.

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BANGLADESH Clean Air and Sustainable Environment (CASE)

CONTENTS

Page

STRATEGIC CONTEXT AND RATIONALE ....................................................................... 9 Country and sector issues .......................................................................................................... 9

Rationale for Bank involvement ............................................................................................. 10

Higher level objectives to which the project contributes ........................................................ 11

I 1 . PROJECT DESCRIPTION ..................................................................................................... 12

1 . A . B . C .

A . B . C . D . E .

I11 . A . B . C . D . E . F .

I V . A . B . C . D . E . F . G .

Lending instrument ................................................................................................................. 12

Project development objective and key indicators .................................................................. 12

Project components ................................................................................................................. 13

Lessons learned and reflected in the project design ................................................................ 19

Alternatives considered and. reasons for rejection .................................................................. 20

IMPLEMENTATION .......................................................................................................... 22 Partnership arrangements ........................................................................................................ 22

Institutional and implementation arrangements ...................................................................... 22

Monitoring and evaluation o f outcomeshesults ...................................................................... 23

Sustainability ........................................................................................................................... 23

Critical risks and possible controversial aspects ..................................................................... 24

Loadcredit conditions and covenants ..................................................................................... 25

APPRAISAL SUMMARY ................................................................................................... 27 Economic and financial analyses ............................................................................................ 27

Technical ................................................................................................................................. 28

Fiduciary ..................................................................................................................... ..:.. ....... 28

Social ....................................................................................................................................... 30

Environment ............................................................................................................................ 31

Safeguard policies ................................................................................................................... 32

Policy Exceptions and Readiness ............................................................................................ 32

. . .

7

Annex 1: Country and Sector o r Program Background ............................................................... 33

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ....................... 37

Annex 3: Results Framework and Monitoring .............................................................................. 38

Annex 4: Detailed Project Description ............................................................................................ 43

Annex 5: Project Costs ..................................................................................................................... 59

Annex 6: Implementation Arrangements ....................................................................................... 60

Annex 7: Financial Management and Disbursement Arrangements ........................................... 64

Annex 8: Procurement Arrangements ............................................................................................ 76

Annex 10: Safeguard Policy Issues .................................................................................................. 90

Annex 11: Project Preparation and Supervision ........................................................................... 93

Annex 12: Documents in the Project Fi le ....................................................................................... 94

Annex 13: Letter of Development Policy ........................................................................................ 95

Annex 14: Statement o f Loans and Credits ................................................................................... 98

Annex 15: Country at a Glance ..................................................................................................... 100

Annex 16: Maps IBRD 33368R ...................................................................................................... 102

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I. STRATEGIC CONTEXT AND RATIONALE

A. Country and sector issues

Rapid urban population growth. More than one-third o f the population o f Bangladesh lives in cities. I t is projected that, by the middle o f the century, more than hal f o f the population o f Bangladesh will be urban-based. Most o f the population growth i s concentrated in and around Dhaka, the capital o f Bangladesh. Since 1970, it has seen an eightfold increase in population which stands at more than 12 million, making it the eighth largest city in the world. It is projected to become the third largest city by 2020 with a population o f approximately 20 million.

High level of airpollution. The concentration o f the key air pollutant o f concern (Particulate Matter or PM) in Dhaka and other major cities has been steadily increasing in recent years, with an annual average much higher than the World Health Organization (WHO) guidelines. If exposure to urban air pollution i s reduced by 20% to SO%, between 1,200 to 3,500 l ives can be saved and 80 to 230 mi l l ion cases o f respiratory diseases can be avoided per annum. In economic terms, this i s equivalent to an estimated US$170 to 500 mi l l ion in savings due to reduced health care costs and increased productivity per annum'. Polluting sectors, l i ke industries and transport, are likely to grow manifold over the coming years. This, in turn, will drive the growth o f air pollutants and greenhouse gas (GHG) emissions, unless efforts are initiated urgently to reduce these sources o f air pollution. On a per capita basis, GHG emissions in Bangladesh are among the lowest in the world and Bangladesh is not required to limit GHG emissions under the Kyoto protocol. I ts interest in reducing GHG emissions is driven primarily by the fact that carbon credits can be earned from the sale o f emissions reduction. In recent times, Bangladesh has taken the initiative to tap the carbon market through the Clean Development Mechanism (CDM).

Transport conditions in Dhaka. Rapid urban population growth has far outstripped the capacity o f urban infrastructure, leading to l o w level o f efficiency and massive shortages. The transport conditions in Dhaka are characterized by chronic traffic congestion and delays, l o w quality o f public transport service, lack o f comfort and safety for pedestrians and growing air pollution. Key factors affecting the urban transport sector are: (a) the very rapid percentage increase in urban population; (b) the generally poor condition or lack o f infrastructure with l o w level o f maintenance; (c) weak institutions at the local government level, with inadequate capacity for planning and implementing projects; (d) overlapping and poor coordination among different ministries and municipal agencies and for managing municipal agencies; and (e) inadequate public transport regulation.

Proposed interventions in the transport sector. The Strategic Transportation Plan for Dhaka (STP), prepared under the Bank financed Dhaka Urban Transport Project (DUTP), has recently been approved by the Government after a significant consultative process. It underscores the large size o f the transport investment needs in the metropolitan area and recommends a program that includes new roads, Bus Rapid Transit (BRT) systems and metro, clearly exceeds the financial capacity o f the Government and the scope o f the proposed project. In fact, the proposed project is seen as a bridge to prepare for a more substantive urban transport project for Dhaka. I t includes physical investments in traffic management, and preparatory studies and institutional reforms needed for a priority BRT line.

World Bank. 2006 Bangladesh Country Environmental Analysis. 1

9

Once sufficient progress i s achieved towards technical preparation and institutional and legal reforms, a more ambitious urban transport project could be prepared to address the needs o f the metropolitan area.

Adopting a co-benefit approach to address air pollution. The proposed project is designed to address the issue o f urban air pollution by undertaking demonstration interventions and providing technical assistance for capacity building and reform in key polluting sectors (mainly brick making and transport). It aims to encourage integration across environment and transport through the demonstration o f possible “co-benefits” o f addressing local air pollution, such as, P M and GHG emissions reduction. Two o f the primary sources o f urban air pollution in Bangladesh - vehicles and small industries - lend themselves well to the co-benefits approach. The proposed project design recognizes that addressing air pollutants not only reduces health impacts and costs but also generates other benefits including better mobility in the case o f transport and reduced energy consumption in the case o f small industries.

First step towards integrating environment and transport concerns. The urban environmental problems in Bangladesh are numerous and inter-related. Addressing these in a comprehensive manner would require coordination between a large number o f sector ministries and agencies, which i s a challenge in itself. The proposed project is a f i rs t step towards the integration o f environmental and transport concerns and priorities under one project. The engagement o f the environment and transport ministries and agencies under the proposed project will pave the way for a more fruitful collaboration in the future.

Challenges in the transport sector. Past Bank financed projects in the transport sector in Bangladesh have indicated weaknesses in terms o f internal control, governance and transparency. In order to safeguard against this environment, several measures have been introduced in the proposed project including a procurement risk mitigation framework, explicit bid evaluation procedures, special technical oversight, the system for handling complaints and disclosure o f information in a procurement website.

B. Rationale for Bank involvement

The Government o f Bangladesh (GOB) recognizes that a co-benefits approach would be the ideal way to approach the problem. However, this calls for demonstrating innovative approaches, rather than the regulatory approach that the GOB has traditionally undertaken through DOE.

Through its portfolio o f Global Environment Facility (GEF) projects and more recent projects under the CDM, the World Bank has r ich experience in designing and implementing projects that reduce local and GHG emissions by urban transport and small-scale industries. While driven by the primary objective o f reducing GHG emissions, these projects demonstrate how they can contribute to achieving better urban mobility and industrial energy efficiency, while also reducing local air pollution.

In the case o f urban transport i t i s wel l documented, mostly through projects in Latin America, that interventions which promote walk-ability, non-motorized transport, modal shift to public transport (e.g. Bus Rapid Transit or BRT), and integration o f environmental planning also deliver lower GHG

10

emissions in the long run. The Bank’s experience with improving industrial energy efficiency and reducing local and GHG emissions comes mostly from GEF and Carbon Finance projects undertaken in Eastern and Central Asia. In recent years, the number o f sustainable urban transport and industrial energy efficiency projects has grown also in both East and South Asia.

The CASE project builds on the experiences and lessons o f two past Bank-supported projects in Bangladesh, namely the Air Quality Management Project (AQMP), a learning and innovation loan and the Dhaka Urban Transport Project, a specific investment loan. GOB i s now keen to develop and implement actions that are multi-sectoral and that demonstrate how to comprehensively address air quality and urban transport issues.

Both the AQMP and DUTP projects were jointly able to have a major impact on Dhaka’s air quality mainly as a result o f the ban on baby-taxis (three wheelers) that was implemented under the projects. Levels o f PMlo and PM2.5 declined 30% and 40%, respectively, immediately after the ban. These projects demonstrated that, if the foundation o f a proposed intervention is technically sound, it i s possible to work with stakeholders and build the support necessary for implementation. However, sustaining the impact o f the interventions requires deeper and continuous engagement with the polluting sectors and better capacity to plan, monitor, regulate, and implement environmental interventions. The proposed project i s designed to assist the GOB in these endeavors.

C. Higher level objectives to which the project contributes

Since 2000, the Millennium Development Goals (MDGs) have become the most widely accepted measure o f development efforts and GOB i s committed to achieving the targets embodied in the Mil lennium Declaration by 2015. GOB’S strong commitment to the MDGs is reflected in its Poverty Reduction Strategy Paper (PRSP). The achievement o f two o f the MDGs, in particular, i s closely dependent on improvements in environmental management. Meeting MDG #4 relating to the reduction o f child mortality will require continued reductions in environmental health risks, particularly, those leading to respiratory infections and diarrhea, which together account for about a quarter o f under-five year old deaths. Attaining MDG #7 on ensuring environmental sustainability will require renewed efforts to strengthen environmental governance, reverse the loss o f natural resources and degradation o f urban environmental quality.

Whi le the Government has made major strides towards these targets, there are a number o f environmental issues which present important development challenges. Among them is the growing significance o f health risks posed by the pollution resulting from rapid urban and industrial growth which i s a major source o f environmental degradation. Ambient air pollution, in particular, merits greater emphasis. Pursuing initiatives to undertake the key actions summarized above will not only bring Bangladesh closer to achieving the MDG targets, but will also contribute to the removal o f environmental constraints to poverty-reducing growth.

GOB i s also committed to energy conservation and reducing GHG emissions from energy use and recently launched a national campaign on energy efficiency and renewable energy. There is a push to reduce GHG emissions and capitalize on the carbon market, as evidenced by a number o f World Bank c k b o n finance projects under discussion with GOB.

Given GOB’s commitment to the implementation o f sustainable environmental initiatives across sectors, the CASE project will help demonstrate GOB’s resolve to meet some o f i t s international and domestic obligations vis-a-vis environmental sustainability.

The project i s also consistent with the Bank’s Country Assistance Strategy2 (CAS) for 2006-2009. Urban air quality is identified as a major environmental health issue in the CAS and the improvement o f urban air quality i s among the CAS’S planned activities.

11. PROJECT DESCRIPTION

A. Lending instrument

The project envisages a combination o f technical assistance to key polluting sectors and investments in demonstration initiatives that have an impact in terms o f environmental sustainability, with a particular focus on emissions reduction. The lending instrument will be a specific investment loan (SIL) that includes a technical assistance component. The total project cost is approximately US$71.25 mi l l ion with a World Bank credit o f US$62.20.

B. Project development objective and key indicators

The project provides technical assistance and funding to implement demonstration environmental initiatives in the key air polluting sectors in Bangladesh (mainly brick making and transport). It also aims to improve the policies and regulations governing those sectors in order to improve air quality and the quality o f l i fe o f Bangladeshi citizens.

The project development objective is: to improve air quality and safe mobility in Dhaka through the implementation of demonstration initiatives in urban transport and brick making.

The interventions in urban transport will focus on reducing conflict between motorized and non- motorized transport, reducing congestion and providing safer and cleaner mobility for those who walk and use public transport, particularly working women, in the areas o f project intervention. In addition, the project will help lay the foundation for longer term improvements in urban transport. In the case o f small scale industries, the focus will be on improving energy efficiency and reducing emissions, starting with demonstration projects in the brick making industry.

Specific project outcome indicators include:

Decrease in particulate emissions by 20-30% per brick kiln adopting a cleaner technology by the end o f the project.

Reduction in GHG emissions by 15-20% per brick kiln adopting a cleaner technology by the end o f the project.

Improved traffic f low in project intervention locations leading to a 10% increase in vehicular traffic throughput by the end o f project.

World Bank, 2006.Country Assistance Strategy for the People’s Republic of Bangladesh, Report 3 5 193. 2

12

0 A 10% decrease in the number o f traffic accidents in the locations o f project interventions by the end o f project implementation, particularly, for those who use non-motorized vehicles, public transportation and women.

As i s evident from the indicators themselves, while some o f them will directly lead to a reduction in air emissions and/or improvement in ambient air quality3, others are likely to contribute to it indirectly. In order to support the achievement o f the PDO and ensure its sustainability, the project also aims to assist the GOB with a number o f regulatory actions, including:

Revision o f the Brick Burning Act

Revision o f emission standards for key polluting industries as part o f strengthening the legal and regulatory framework for emissions management

Revision o f the Motor Vehicle Act (MVA) that covers vehicular emissions and fuel quality standards

Revision o f the Dhaka Transport Coordination Board (DTCB) Act to enable bus route network restructuring and franchising

C. Project components

In keeping with the functional division o f the various sectors, the project is structured around two components: (i) environment, which includes addressing brick kiln emissions; and (ii) transport, which includes addressing traffic management and engineering issues. The details o f the components are provided below.

Component 1: Environment (US$16.23 million1 Implementing Agency: DOE

This project component i s aimed at strengthening the environmental agency’s capacity and capability to effectively address air pollution issues and demonstrate the effectiveness and efficacy o f new approaches for reducing air pollution emissions through application to the brick industry and the transport sector. It will be executed by the Department o f Environment (DOE) within MOEF, in consultation with stakeholders from the key polluting sub-sectors. W h i l e details o f this project component are provided in Annex 4, a summary i s provided below.

Sub-component IA: Capacity building for air quality management (US$8.55 million) This sub-component will: (i) support the newly established Air Quality Cell (AQC) at DOE; (ii) improve air quality monitoring, data analysis and reporting; and (iii) improve standards, enforcement and control for emissions reduction.

1A (0 Air Quality Cell This sub-component will provide support to the AQC at DOE. The newly established AQC has been envisaged as the vehicle to implement al l air pollution abatement activities in Bangladesh. D O E recognized the need for creating an AQC because air quality activities were dispersed among many

Whi le emissions refer to the air pollution coming out from a source or sources, ambient air pollution refers to the levels of air pollution in the environment, which could be from one or many sources.

13

units within the ministry and they needed to be consolidated. A detailed report which includes a proposal on the AQC’s administrative structure and staffing was completed during project preparation. GOB, through the Ministry o f Establishment and the Ministry o f Finance has approved the creation o f the AQC with 20 staff members initially. It envisaged that the number would increase in the context o f the ongoing reform o f D O E staff. The AQC is proposed to be responsible for programs in air quality monitoring, data analysis and reporting, program planning (including, standards, enforcement and controls for emissions reduction from vehicles and industrial facilities) as well as public information and administration.

In order to accommodate additional D O E / AQC staff that is l ikely to come on board, DOE requested funds to finance an additional infrastructure facility for setting-up the AQC. Therefore, the project includes an additional US$2 mi l l ion to finance the facility. However, the availability o f funds for this purpose is conditional on progress with project implementation and disbursements (such as progress on regulatory and institutional reforms and D O E staffing). The project mid-term review will evaluate the project progress and make the respective recommendations.

1A (ii) Air quality monitoring, data analysis and reporting

The previous Bank-supported AQMP project helped create an air quality network o f five Continuous Air Monitoring Stations (CAMS) and equipped D O E with nine Satellite Air Monitoring Stations (SAMs), and laboratory equipment. The CASE project will build on the progress made under AQMP and will support the provision o f appropriate hardware and software facilities, selected studies to strengthen DOE’S various functions, enhancements for reporting, use o f air quality information for planning, public awareness (via website and other media) and development o f public alert systems. Six new CAMS will be installed and industrial facility monitoring undertaken, in order to complement ambient air quality data with source-oriented emissions data. The strengthened air quality monitoring arrangements, combined with analysis and reporting, will help in identifying the sources o f emissions and developing targeted action plans for reducing air pollution.

1A (iii) Standards, enforcement and controls for emissions reduction

This subcomponent will focus on strengthening the regulatory framework for emissions reduction from vehicles and small-scale industrial sources. By law, D O E within MOEF has the legal authority and responsibility for air quality management. However, the Environmental Conservation Act (ECA) o f 1995 and Environmental Conservation Rules (ECR) o f 1997 do not have adequate enforcement mechanisms. Revisions o f the 1997 ECR are needed in order to introduce stricter standards and an amendment o f the 1995 E C A i s required in order to enforce “the polluter pays” principle for industrial emissions. These will be supported by the project. The enforcement o f current standards - a crucial part o f environmental regulation - remains weak. Under the proposed project, the vehicular emissions control program will also be further strengthened with a focus on addressing emissions from diesel commercial vehicles4, and on stronger enforcement. The emissions control program will be expanded to include control o f industrial air emissions through the introduction o f stricter standards, compliance monitoring and strengthened enforcement.

~ ~ ~~

I t i s worth noting that given the escalating price o f diesel, conversion from diesel to CNG has been accelerating. 4

Furthermore, the Government mandated the conversion o f all minibuses to CNG by October 2008. This in i tse l f w i l l lead to a substantial reduction in vehicular PM emissions.

14

Sub-component 1 B: Brick kilns emissions management (US$4.94 million) This sub-component aims to usher in a new era for brick manufacturing in Bangladesh. On the one hand, DOE will work towards changing the institutional, legal and regulatory framework. To that effect, the project wil l provide technical support to the newly established Brick Advisory Committee. DOE will ensure the representation o f concerned Government agencies, c iv i l society, brick industry and stakeholder institutions. The project also aims to develop a long-term strategic policy framework for the brick industry that will include strengthening o f laws and regulations. The latter will include the revision o f the Brick Burning Act and other related legislation. In addition, it i s expected that the capacity o f GOB’S personnel will be substantively built through awareness raising, competence building programs and exposure visits.

On the other hand, the adoption o f cleaner technologies and practices will be promoted among the brick enterprises through demonstration projects. The brick sector industry association proposed approximately 25 demonstration project? as the minimum number required for catalyzing widespread adoption. As these demonstration projects are under way, substantial technical support to these cleaner technologies and practices will be done in parallel as these are vital for replication across the industry sector. Such technical capacity development, an integral part o f this sub- component, will be provided to brick enterprises and stakeholder institutions.

The project will support a whole range o f activities aimed at reducing local air emissions from the brick sector. This will also lead to reduced energy consumption and therefore lower greenhouse gas emissions. Following the completion o f the demonstration projects, it i s estimated that some 400-500 brick manufacturers (i.e., 10% o f the total number o f ki lns or 42% o f the north Dhaka cluster) will switch to the newer and cleaner brick manufacturing practices. The latter would lead to a potential decrease o f local emissions by 20-30%, and energy savings and greenhouse gas emissions reduction o f 15-20%. Given the GHG emissions reduction potential, the project is facilitating the development o f two carbon finance projects that are l ikely to be implemented in parallel with the CASE project. It is envisaged that the revenue streams from carbon finance would provide additional incentives for the uptake o f cleaner technologies and practices. If need be, additional assessments to provide brick manufacturers with financial incentives to switch to cleaner technology will be undertaken during project implementation.

Sub-component 1 C: Communication campaigns and analytical studies (US$1.59 million) The communications campaign will be rolled out using al l available media channels in English and Bangla to highlight the impact o f local and global emissions from key transport and industrial sources, and the “co-benefits’ o f addressing the same. I t will contain targeted messages for different stakeholders and wil l also be linked with the national program for HIV/AIDS awareness to enhance the impact o f the messages among workers in the transport and brick industry. Social marketing tools will be used to address socio-cultural issues. The media campaign will also serve as the tool for GOB to reach out to different stakeholders and include them in the efforts to achieve the project’s development objectives. In doing so, it will work as a risk management tool for the project since there are likely to be some winners and losers during project implementation.

Demonstration projects may include (1) FCK retrofits w i th an integration o f cleaner practices such as internal fuel in green brick making, better feeding & firing practices, better kiln design and low cost mechanization, (2) cleaner technologies such as the VSBK and HabldZig-Zag kilns and (3) technology alternatives t o br ick such as micro concrete.

15

To strengthen the technical capacity o f DOE and AQC in air quality management the project will support the preparation o f various technical studies related to: emission inventory, dispersion modeling, source apportionment, ‘health impact study, clean air regulatory framework, dust management etc.

Sub-component 1D: Project management, coordination and unallocated (US$l.l6 million)

DOE (US$O. 88 million). Project implementation o f the DOE component will be carried out by AQC which will serve as the Project Implementation Unit (PIU). The director o f AQC will serve as the project director for the D O E component o f the project. There will be a budget for project management which will cover consultants, travel, office equipment, meeting costs, audits and other operating costs necessary for project implementation and reporting. The project director will set up a departmental working group to provide technical inputs as needed, and facilitate the operation of the Brick Project Advisory Committee.

MOEF (US$0.28 million). A Project Coordination Unit (PCU) will be created in MOEF under a Project Coordinator, who will have the rank o f Joint Secretary. While project implementation will be carried out by the three agencies through their respective PIUs, the overall project coordination will be carried out by the PCU, anchored in MOEF.

Component 2: Transport (US%45.97 million)

This component will support capacity building through technical assistance and demonstration initiatives in urban transport in Dhaka that will focus on reducing conflict between motorized and non-motorized transport (NMT) and congestion, as well as providing safe and better mobility for those who walk and use public transport, particularly, working women. It will also help strengthen the institutional, policy, and regulatory framework for public transport, and help mainstream environmental considerations into urban transport related decision making. As mentioned earlier, a number o f GEF supported projects have demonstrated that interventions which promote non- motorized transport and a shift to less polluting modes o f transport lead to lower GHG emissions and to more sustainable mobility patterns o f the population.

The initiatives will be consistent with the recommendations in the 2005 Strategic Transport Plan (STP) for Dhaka and will be designed to deliver and demonstrate tangible but modest results during the project duration, while helping plan and prepare for a larger urban transport intervention. The outcomes o f this component will consist o f improved traffic flow, reduced congestion, enhanced mobility and safety o f pedestrians and those who use public transport, in those areas o f Dhaka where the project will be undertaken.6 In addition, it will help lay the foundation for longer term improvements in urban transport through technical assistance and regulatory changes. The development and execution o f this component will involve a number o f key stakeholders including, the Roads and Railways Division (RRD) under Ministry o f Communications (MOC), Bangladesh Road Transport Authority (BRTA), Dhaka Transport Coordination Board (DTCB), Dhaka City Corporation (DCC), Dhaka Metropolitan Police (DMP) as well as public transport owners and

Some o f the more direct interventions for control o f emissions ii-om motor vehicles will be addressed through the 6

environment component o f the project. These will include enhanced enforcement of vehicle emission standards.

16

operators. The details o f this project component are provided in Annex 4 and a summary o f the sub- components i s provided below.

Sub-component 2A: Transport (US$39.30 million) Implementing agency: DCC

2A (i) Physical improvement of traffic flow andpedestrian mobility ( U S 3 7 . 2 7 million)

This sub-component will include investments in traffic engineering and management aimed at improved traffic f low and pedestrian movement, particularly where there i s significant conflict between traffic f low and pedestrian movement. Investments will comprise foot over bridges (FOBS), traffic signals, one-way streets, separation o f motorized and non-motorized traffic, and people-with- disability (PWD) friendly sidewalks. Investment in sidewalks i s expected to assist in the reduction o f re-suspension o f particulate matter, a known problem in Dhaka, and one o f the major contributors to local P M air pollution. This sub-component will also support the development o f a parking strategy, capacity building efforts and institutional strengthening related to the investments. It must be noted that most o f the interventions proposed in this sub-component have already proven to be instrumental in reducing GHG emissions from urban transport. Various similar interventions have already been supported though GEF financing in a number o f urban transport projects supported by the World Bank.

2 A (io Institutional strengthening and regulatory review (US$ 0.87 million)

This sub-component will support an institutional review o f DCC's Traffic Engineering Division (TED) with a view to updating and upgrading its role in the context o f the Strategic Transport Plan. The review will specifically explore the options for a Traffic Signal Cell and Road Safety Cell at DCC. An organogram as recommended in the STP may be followed for capacity building o f DCC under the project. Technical assistance and capacity building will also be provided to D C C in the following areas: (i) design o f traffic engineering; (ii) traffic signal systems operation and maintenance in coordination with DMP; (iii) mainstreaming environmental management in urban transport and (iv) traffic management in coordination with DMP.

2A (iii) Project Management ('US$ I. I 6 million)

Implementation o f subcomponent 2A will be carried out by a P I U within DCC. The PIU will be headed by a project director. There will be a budget for project management which will cover the costs o f consultants, travel, office equipment, meeting costs, audits and other operating costs necessary for project implementation and reporting. The project director will set up a departmental technical committee to provide technical inputs as needed.

Sub-component 2B: Transport (US$6.67 million) Implementing agency: DTCB

2B (i) Preparation of the bus route network rationalization andfianchising (US$4.22 million)

17

The overall objective o f this subcomponent is to encourage a modal shift from existing transport modes to cleaner and safer transport modes in Greater Dhaka in the long term.

This sub-component will finance the preparation o f technical studies, namely: (i) a feasibility study for a bus rapid transit (BRT) system in Greater Dhaka; (ii) the BRT detailed design and (iii) a public transport network study for Greater Dhaka.

It is envisaged that, once the basic elements for bus route network rationalization and franchising (i.e. institutional strengthening, legal and regulatory reform, and stakeholder consensus building) are in place and detailed designs available, the physical investments for implementation o f franchised operations on a priority corridor, including BRT on a pilot corridor, could commence as a follow-on project to be prepared on a fast track.

2B (ii) Institutional strengthening and regulatory review (US$l. 73 million)

A review o f the institutional and regulatory framework for public transport will be undertaken with a view to: (i) providing a pivotal role to DTCB in planning and coordination o f urban transport including BRT; (ii) enabling bus sector reform with a focus on route rationalization and franchising; and (iii) facilitating the implementation o f the action plan developed in the context o f STP (and AQMP) to reduce air pollution from diesel vehicles. This i s expected to lead, in the long term, to the establishment o f a unitary authority for urban transport that would plan and coordinate a multi-modal urban transit system.

Technical assistance and capacity building will also be provided to D T C B so as to: (i) strengthen i t s role as a public transport regulatory institution, (ii) mainstream environmental management in urban transport planning, and (iii) improve the management o f motor vehicle emissions in coordination with BRTA. The project would also support the creation o f a Traffic Management Committee (TMC) anchored at DTCB. The T M C would have representation from al l relevant stakeholders and would ensure information sharing and coordination on urban transport related initiatives and interventions among them.

2B (iii) Project Management (US$O. 72 million)

Project implementation o f subcomponent 2B will be carried out by the D T C B through a PIU. The P I U will be headed by a project director. There will be a budget for project management which will cover the costs o f consultants, travel, office equipment, meeting costs, audits and other operating costs necessary for project implementation and reporting. The project director will facilitate the operation o f the Traffic Management Committee (TMC).

A summary o f the project costs i s shown in Table 1 and the details are provided in Annex 5.

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Table 1: Approximate Project Costs by Component

S.No.

A. IDA 1.

2

Amount BDT lakh US$ million

taxes)* taxes) Budget Environment Component 11,118 16.23 Transport Component

DCC 26,920 39.30 DTCB 4,570 6.67

Sub-total: 42,610 62.20

Component Titles (including cont & (including cont &

Sub-total: 31,490 45.97

B. GOB Contribution In-Kind (US$5.83) & Cash (US$3.22)

D. Lessons learned and reflected in the project design

6,199 9.05

Two Bank supported projects provided lessons to the preparation o f the proposed CASE project. These are the Air Quality Management Project (AQMP) with DOE as the implementing agency and the Dhaka Urban Transport Project (DUTP) with DCC and DTCB as implementing agencies. Based on the implementation experience o f AQMP and DUTP and their respective implementation completion reports (ICRs), Table 2 below provides a summary o f the lessons learnt and how the latter were addressed in the design o f the project.

~~ ~~ ~

Grand Total: 48,809

Table 2: Lessons Learnt from Past Bank-Financed Projects and Reflected in the Proposed Project Design

~ ~~

71.25

S. No I Lesson Learnt I Reflected in Project Design Air Qui 1

2

3

ity Management Project AQMP demonstrated that air quality - - management i s a multi-sectoral problem and hence a strong multi-agency effort i s necessary to show impact. Strengthening the capacity o f GOB’S environmental institutions is necessary through external TA support since it raises the quality o f the technical analysis and diagnosis; however, such success can also give rise to over-dependence on external consultants. Weak government institutions are unable to attract and retain well qualified and competent technical staff, particularly those working in finance and accounting because employment

The proposed project i s designed to work with the regulating agency (DOE) as well as agencies and stakeholders in the polluting sectors (transport and brick making). The proposed project w i l l ensure that AQC within DOE and DTCB under M O C are fully integrated into the permanent GOB structure before providing any support.

Recognizing this constraint, the project will ensure that consultants with experience in the private sector are hired for the financial management and accounting functions.

19

S. N o

4

Dhaka 5

Lesson Learnt opportunities in the private sector are perceived to be more attractive. International suppliers are not inclined to make the best qualified personnel available for small technical projects.

8

Reflected in Project Design

The procurement packages wil l be bundled to achieve leverage with suppliers in the provision o f technical support.

9

10

Avoid complex project design and implementation arrangements in a weak implementation environment.

External TA is key to meeting the project development objectives; however it should be provided to the appropriate implementing agency The engineer’s role should be kept independent vis-a-vis the employer.

~

The incentives for the timely delivery o f construction outputs are reduced with the use o f time-based supervision contracts as delays can lead to higher remuneration for the consultants. Improve transparency and accountability in public procurement process.

The need for c iv i l society engagement, stakeholder analysis, and communications strategy based on high quality technical work i s essential.

ion and Maintenance Project Although three agencies are involved in the project, the funds f l ow and implementation arrangements are kept separate to minimize the need for day-to-day interaction among the agencies. External TA provided to the agencies will be accompanied by clear accountability on the part o f the consultants.

An international Design Monitoring and Supervision (DSM) consultant will be hired to oversee the implementation o f key contracts managed by DCC. One o f the proposed project legal covenants indicates that a representative from the D S M will participate in the bid evaluation committee. The project will build in appropriate penalty clauses into the bidding documents in consultation with procurement staff.

As detailed in Annex 8, the project has identified multiple measures to improve accountability and transparency in the procurement process. These include: a procurement risk mitigation framework, explicit bid evaluation procedures, special technical oversight with regard to traffic signals and public transport, complaint redress system and disclosure o f information on a procurement website. A political economy analysis o f the potentially sensitive components has been undertaken, in addition to the stakeholder analysis conducted as part o f the social safeguards work. A proactive communications program will be conducted throughout the l i fe o f the project.

E. Alternatives considered and reasons for rejection

T h e following alternative approaches and design elements were considered.

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Lending instrument. An adaptable program loan (APL) was explored following a recommendation made during the PCN review. However, given the early stage o f institutional reforms in both the environment and transport sectors, it was considered premature to develop a long-term APL at this stage. The alternative o f a technical assistance lending instrument was considered but, because the project aims to mainstream sustainable environmental impact into transport planning and implementation and into the development o f the brick industry, technical assistance needed to be accompanied by demonstration projects. The latter would facilitate the quick adoption o f initiatives and interventions toward broader replication and sustainability. Furthermore, the demonstration projects would help the relevant public sector agencies determine their readiness to implement a much needed full-scale urban transport project for Dhaka. Thus, a more appropriate lending instrument was considered to be a specific investment loan.

Conventional regulatory controls for vehicular emissions vis-&vis structural improvements in traffic management and engineering and the bus sub-sector. Studies under AQMP demonstrated that diesel commercial vehicles (mainly buses) are the major polluters in Bangladesh’s cities, pointing to the need for a long-term sustainable solution to address the structural issues o f traffic and public transportation especially in Dhaka. The alternative o f a conventional regulatory approach would not lend i t se l f to the required mainstreaming o f environmental improvements into the polluting sub-sector through the demonstration o f possible “co-benefits” such as, GHG emissions reduction accompanied by better mobility. At the same time, regulatory measures prompted by donor initiatives (e.g. ADB’s support to the BRTA through operationalizing vehicle inspection and maintenance centers) or by an ongoing government program (e.g. GOB’s mandated conversion o f al l diesel minibuses to CNG) could be reflected in the project design.

Limited demonstrations versus a large scale approach. The project’s transport component has been designed with a view toward a larger scale project provided the relevant agencies are successful in implementing the demonstration projects. In the case o f the brick industry, the project preparatory work undertaken in collaboration with the brick industry association identified a high demand by brick owners and manufacturers for technical assistance and demonstration initiatives. Furthermore, the current limited capacity o f the implementing agencies, especially MOEFDOE, justified limiting the scale o f the project.

Project implementation. It was considered that a project design with M O E F D O E as the sole counterpart - as was the case with AQMP - would be ineffective. AQMP focused solely on regulation which limited the project’s sustainability. Had an approach that linked regulation with an incentive (designed in partnership with the polluting sector) been applied the prospects for sustainability could have been strengthened. More importantly, the Bank’s and GOB’s unsuccessful and difficult experience with coordinated implementation within a single ministry does not bode well for anchoring the project with multi-sector components within MOEFDOE that would require arduous cross-agency and inter-ministerial coordination. Hence, the proposed implementation by the three agencies o f their particular components is considered to be the most pragmatic approach in responding to GOB’s request for support to the country’s priority o f tackling Dhaka’s environmental, transport and traffic challenges. Finally, the proposed implementation under the project could be a first step toward the: (i) integration o f environmental and transport concerns and priorities; and (ii) engagement o f the respective ministries and agencies with each other at the project

21

steering committee level - in order to pave the way for more fruitful and less cumbersome collaboration in the future.

111. IMPLEMENTATION

A. Partnership arrangements

The US$71.25 mi l l ion CASE project will be financed by IDA (US$62.20 million) and by GOB (US$9.05 mi l l i~n)~ o f counterpart funding.

The mwlti-donor funded ESMAP program provided US$250,000 o f support toward the introduction o f energy-efficient and cleaner technologies and practices in the brick-making industry in Bangladesh. The program wil l continue to be implemented during the first year o f implementation

' o f the CASE project.

The Clean Air Initiative for Asia (CAI Asia) communicated to the Bank team their interest in a possible partnership with the CASE project to strengthen air quality management in Bangladesh.

The Japanese International Cooperation Agency (JICA) expressed interest in the preparation o f the bus route network rationalization and franchising (component 2B) for possible follow- up investment financing.

The task team also had discussions with the Asian Development Bank (ADB), who intend to undertake a project on strengthening vehicle inspection and maintenance.

The proposed project will coordinate with the above activities to ensure complementarities among donors and partners.

B. Institutional and implementation arrangements

The project will be implemented by three implementing agencies: - Component 1 Environment will be implemented by D O E (within MOEF). The AQC

has been designated to be the P I U and will be headed by a Project Director

Component 2A Transport will be implemented by DCC (within MOLGRDC). A P I U will be appointed and headed by a Project Director.

Component 2B Transport will be implemented by D T C B (within RRD under MOC). A P I U will be appointed and headed by a Project Director..

-

-

MOEF will be responsible for the overall coordination o f the project. A Project Coordination Unit (PCU) will be created at MOEF and headed by a Joint Secretary. It will be responsible for project coordination and monitoring. Overall project oversight will be ensured by a Project Steering Committee (PSC). The PSC will be chaired by the Secretary o f MOEF and include members o f all implementing agencies as well as relevant stakeholders.

GOB contribution i s US$5.83 in kind and US$3.22 in cash. 7

22

The three implementing agencies will receive funds directly from three special accounts and will be responsible for managing their respective accounts. Funds for the PCURSC will be channeled through the DOE special account. The implementing agencies will provide reports on overall progress, including procurement and financial management, to the PCU on a regular basis.

The above mentioned implementation arrangement, whereby three separate PIUs and one PCUPSC- are to become operational for a single project, does increase the cost o f project management as well, as supervision. However, it also helps spread the risk o f non-performance and fosters healthy competition between the PIUs. For a multi-sectoral project in Bangladesh, this approach is better suited for implementation as compared to having al l the activities implemented through a single implementing agency. Most o f the project management cost is to be borne by GOB’S contribution.

C. Monitoring and evaluation of outcomes/results

, The project will have a comprehensive monitoring and evaluation framework based on qualitative and quantitative indicators for each sub-component. These include transport, social, environmental and capacity development indicators. These data would also be used, in turn, at the locations o f the project interventions to estimate improvement in air emissions/quality and pedestrian safety and mobility as wel l as vehicle speeds.

The monitoring o f the environment and transport outputs and outcomes will be conducted separately by the three agencies (DOE, DCC, and DTCB) annually. The monitoring and evaluation will be coordinated by the PCU at MOEF, which will be equipped with a monitoring and evaluation specialist. Several studies were conducted as part o f project preparation and some will be continued during project implementation to monitor the impact o f project investments. The specific outputs envisaged for the locations o f the project interventions are related to: (i) reducing the conflict between motorized and non-motorized transport, reducing congestion, increasing vehicle speeds, and providing safe mobility for those who walk and use public transport, particularly women; and (ii) improving energy efficiency and reducing emissions from the brick industry. In addition, the efficacy o f institutional strengthening and capacity building efforts across number o f agencies will be evaluated.

A good baseline for most o f the above mentioned parameters will be organized into a monitorable framework that will be available at the start o f the project. Baseline data on air emissions/quality and traffic management at al l proposed project locations for physical interventions are being collected and will be available before the interventions are undertaken to track the impact o f the project. In addition, baseline energy efficiency data for brick ki lns will also be collected and used as a monitoring indicator. Simple interactive models will be used to assess the impact o f interventions.

D. Sustainability

Sustainability will be an overarching aim o f the proposed project to ensure continuity o f the quality and reliability o f the institutional, regulatory and infrastructure improvements carried out under the project. While each project sub-component has been designed with a view to ensuring sustainability, the extent to which all the achievements under the project are sustained will depend on the fol lowing

23

factors at a broad level: (i) continued attention to environmental mainstreaming in sectoral agencies, in general, and addressing loca l air pollution and GHG emissions, in particular; (ii) the Government’s wi l l ingness to commi t suf f ic ient resources to the creat ion o f an incent ive f ramework that ensures adequate staf f ing and retent ion o f qual i f ied s taf f in concerned agencies; (iii) commitment to the development / rev is ion o f pol ic ies and regulations as agreed during the project period; (iv) consistent pub l i c awareness campaigns on air quality and safe mobility issues to support the promulgation and enforcement o f necessary laws, rules and regulations; (v) prov is ion o f a meaningfu l incent ive f ramework fo r the pr ivate sector to adopt cleaner and less polluting business processes and practices in the b r i c k sector, and for bus operators to adopt a route ne twork restructuring plan and agree on a franchis ing framework; (vi) abi l i ty o f implement ing agencies to prov ide the counterpart resources necessary for operation and maintenance (e.g. for continuous a i r monitoring stations (CAMS) and traf f ic signals); and (vii) the ability o f the Government t o implement activit ies in a collaborative manner with the b r i c k entrepreneurs and the bus operators us ing a “carrot and stick” approach.

E. Critical risks and possible controversial aspects

Risk Stafing: Dif f icul ty with hiring and retaining good staff to work on technical issues, financial management and procurement, as demonstrated under the AOMP. Institutional coordination and funds flow: Given that three different ministries and their agencies will be involved effective coordination for efficient f low o f funds i s necessary. Institutional capacity: DOE has limited experience in implementing large externally-aided projects. D T C B i s s t i l l in the process o f being fully staffed and empowered. Only D C C has the relevant experience and capacity.

Stakeholder and political support: GOB at various levels may need to announce some challenging measures, such as bus route franchising and closure o f polluting brick kilns. These will be successful only if there i s widespread stakeholder support.

Governance: past Bank financed projects in the transport sector in Bangladesh have indicated weaknesses in terms o f internal control, governance and transparency.

Rating H

S

S

M

H

Risk Mitigation Measure Project will use consultants for financial management and procurement functions. In addition, it will develop close links with technical institutions outside the Government.

T o simplify implementation, each implementing agency will be responsible for i t s own special account. However the PCU and PSC wil l ensure overall coordination o f project implementation.

Two third o f the project amount will be implemented by DCC, that has experience in managing large contracts under a previously Bank funded project (DUTP). Small portion o f the project funds will be implemented by DOE and DTCB. Adequate technical assistance and consulting services have been envisaged for both DOE and D T C B to improve implementing capacity. A stakeholder / political-economy analysis for the bus and brick sectors was undertaken during project preparation to develop a risk mitigation strategy. This is informing the development o f a public relations and communications campaign to be launched during project implementation. In addition, stakeholder analysis for specific interventions will be integral t o the feasibility studies. In order to safeguard against this environment, several measures have been introduced in the proposed project including a procurement risk mitigation framework, explicit bid evaluation procedures (such as requesting the presence o f either the D S M or the procurement

24

Risk

technical oversight with regard to traffic signals and public transport; installing a system for handling complaints in each implementing agency and the disclosure of information on a procurement website

Implementation of the anti corruption and procurement risk mitigation framework. During project implementation, there i s a risk that the agreed anti corruption measures and procurement risk mitigating framework (described above and in more detailed in Annex 8) may not be adequately or fully implemented due to lack of capacity and knowledge. Sustainability: Within the project, the Bank will support undertaking a multi- agency effort to tackle air pollution issues. However, after the project closes, the sustainability of this effort mav be challenged.

M

Rating I Risk Mitigation Measure

The focus of the project will be on demonstrating the impact of a multi-agency effort to tackle air pollution. It will attempt to institutionalize a stakeholder coordination mechanism to ensure the sustainability o f efforts, initiated under the project.

S I In order to ensure that the agreed anti corruption and procurement risk mitigation measures are carried out during the project implementation period, training towards a complaint redress system and website management will be provided. In addition, an independent transport specialist would be hired to enhance the technical monitoring o f the traffic signals and public transport sub components.

Overall Risk Risk Rating - H (High Risk), S (Substantial Risk), M (Moderate Risk), N (Negligible or Low Risk)

F. Loadcredi t conditions and covenants There are no credit conditions.

However, GOB has committed to undertake a few key regulatory actions during project implementation. These are provided in a separate Letter of Sector Policy signed by GOB and dated September 16,2008 (attached in Annex13).

Implementation covenants are summarized below:

Institutional - The Government shall, until the completion o f the Project, maintain a Project Steering Committee (PSC). The role and functions o f the PSC are described in Annex 6. The Government shall maintain a Project Coordination Unit (PCU). The responsibility o f the PCU i s described in Annex 6. The Government shall establish and maintain 3 Project Implementation Units (PIUs). One PIU wil l be established and maintained at the Department o f Environment and wi l l be responsible for implementing Component 1 o f the Project. One PIU wi l l be established and maintained at Dhaka City Corporation and wi l l be responsible for implementing Component 2A o f the Project. One PIU wi l l be established and created at Dhaka Transport Coordination Board and will be responsible for implementing Component 2B o f the Project. Each PIU will be headed by a Project Director. A detailed description o f the roles and responsibilities of PIUs and Project Directors i s provided in Annex 6.

-

-

25

Anti-Corruption - The Government shall implement the project in compliance with The Guidelines for

Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants (dated October 15, 2006).

Safeguards - The Government shall implement the project in accordance with the objectives, policies,

procedures, time schedules and other provisions set forth in the Environment and Social Management Framework (Ref Annex IO).

Project Reports - The Government shall, through the PIUs and the PCU, monitor and evaluate the progress o f

the project and prepare a Project Reports that covers the period o f one calendar semester, and shall be furnished to the Bank 45 days after the end o f the period covered by such report.

Financial Reports and Audits - The Government shall prepare and furnish to the Bank (i) quarterly Interim Unaudited

Financial Reports for the Project not later than 45 days after the end o f each calendar quarter and (ii) an audit o f i t s Financial Statements that covers one fiscal year, no later than six months after the end o f each fiscal year (RefAnnex 7).

Procurement - The Government shall: (i) implement a Procurement Risk Mitigation Framework, in form

and substance acceptable to the Bank; (ii) by no later than May 30, 2009, appoint two procurement specialists, with qualifications, experience and terms o f reference satisfactory to the Bank; (iii) ensure that for al l contracts procured under the Project and subject to prior review a procurement consultant participate in al l bid evaluation committee meetings, assist the bid evaluation committee and prepare report on the procurement process; and (iv) ensure that for procurement carried out through DCC, regardless o f the value o f the contracts, a representative o f the design and supervision consultant will participate in the bid evaluation committee to facilitate the procurement process.

- The Government shall through the PCU ensure that the Implementing Agencies (i) collate an activity f low chart for al l prior review contracts, (ii) report on progress with respective procurement risk mitigation action plan and procurement performance indicators, and forward the reports to the Association; and (iii) by April 2009, submit a tentative two year training plan for all concerned procurement staff.

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IV. APPRAISAL SUMMARY

A. Economic and financial analyses

The project is a combination o f technical assistance, capacity building activities and physical investments that will be carried out mainly in the city o f Dhaka, with some investments in the DOE components for other cities. The technical assistance and capacity building components are not amenable to an economic analysis. The analysis was, therefore, limited to those components where a meaningful estimate o f the costs and potential benefits and/or beneficiaries could be made. These include the brick sub-component under the Environment component as well as the traffic signaling and traffic engineering measures under the Transport component. The payback period has been calculated and used to demonstrate the feasibility o f investing in improved brick making practice and traffic signaling. In the case o f traffic engineering the least cost design option has been selected to demonstrate the feasibility o f various investments. Annex 9 provides a more detailed analysis.

Brick sub-component. Brick entrepreneurs will be interested in adopting cleaner technologies and practices only if they are financially viable in the short or medium-term. Hence, the project will support the "demonstration" o f cleaner technologies and practices in selected brick enterprises. Experience in neighboring countries and the techno-economic feasibility studies conducted during project preparation have indicated that the payback period ranges from less than one year to three years, depending on the nature o f the initiative. In addition, it is estimated that, as a result o f these demonstration projects, 400-500 brick manufacturers are expected to switch to the newer and cleaner brick manufacturing practices resulting in a potential decrease o f P M emissions by 20-30%, and energy savings and greenhouse gas reduction o f 15-20%.

Truffic signaling investments are related to the synchronization o f traffic signals. The tangible benefits o f the traffic signal synchronization are measured in terms o f savings in vehicle operating costs and in the value o f time for passengers. The intangible benefits include the reduction in air pollutants, accidents, cost o f deploying police personnel etc. Reduction in idle running fue l and in vehicle operating cost as a result o f better travel speeds have been estimated at US$0.54 million. Hence, the investment i s expected to be recovered within one year. In addition, and from the road user's point o f view, better traffic signal synchronization will also bring about increased time savings. As shown in Annex 9, a five minute reduction in journey time would lead to a savings o f $1.73 mi l l ion annually in terms o f the value o f time.

Truffic engineering measures. There are several basic small investments that are envisaged for the city o f Dhaka which will focus on improving pedestrian mobility and safety. In al l cases, the least cost design option has been selected to demonstrate the economic feasibility o f the investments. These include 25 foot over-bridges (FOBS) to be constructed at high pedestrian volume intersections (2,000 to 3,000 pedestrians at peak hour per day) at a cost o f approx US$225,000 per FOB; 70 k m s o f sidewalks in congested areas o f the city at a cost o f approx US$250,000 per kilometer; MV/NMV lane separators in two main corridors at a cost o f $16,000 per kilometer; and a one-way street system o f almost 80 kms. In addition, improving pedestrian mobility and safety wil l save time for pedestrian and reduce the number o f traffic accidents.

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B. Technical

Given the nature o f the problem, the technical design o f a development project aimed at addressing air pollution from the brick industry and urban transport would involve multiple sectors and agencies which are responsible both for contributing as well as resolving the problem. Analytical studies have shown that the major contributors to local air pollution and GHG emissions in the major urban and peri-urban areas o f Bangladesh are the transport and industry (primarily, brick) sectors. The project’s technical design reflects the important roles o f the implementing agencies and related stakeholders in the two sectors as well as o f the environmental agencies that will be responsible for mitigation measures.

The technical design takes into account the need to internalize or mainstream sustainable environmental initiatives within sector ministries and agencies and hence, in the long run, to facilitate the development o f programs o f investments within the implementing agencies that would have either a direct or indirect impact in terms o f reducing emissions and air pollution. At the same time, the project design provides for strengthening the key implementing agencies in terms o f further building its regulatory framework, enhancing monitoring and strengthening enforcement.

The technical design i s consistent with other international approaches that address the problem o f air pollution. An integrated approach i s widely recognized as a necessity in addressing air pollution. In the interest o f being economically efficient, the approach would address the key sources in a similar manner. The combination o f “push” and “pull” factors i s required to address the various constituencies contributing to and affected by the problem. Hence, it will not suffice to work only with the regulator (DOE) or only with the agencies in the problem contributing sectors (transport and industry). A combination is required and the technical design aims to address this issue.

GOB i s receptive to the integrated multi-sectoral and multi-organization approach for addressing the air pollution problem, since it also helps address mobility issues as well as contribute to improving energy efficiency in the brick sector. It recognizes fully the constraints it faces, not only because o f the lack o f capacity or resources, but also because o f the political economy o f the polluting sectors. Both the bus and brick sectors have strong vested interest groups who would prefer a continuation o f the status quo. The only way to address the problem i s to work with the interest groups toward the most appropriate solutions.

C. Fiduciary

Procurement: Bangladesh has undertaken reforms to improve the environment for public procurement. Although the key policy reform actions have already been completed, including enacting or introducing new procurement act and rules, associated procedures and documentation, the implementation o f the National Procurement Act is s t i l l a key challenge. In addition, other potential challenges related to governance, institutional, and implementation issues abound. The latter includes the inadequate enforcement o f regulations or adherence to the procurement approval process, delays in contract award, ineffective contract administration, allegations o f irregularities, and unnecessary interference. Considering all these factors, procurement under the proposed project i s a challenge that would require specific measures for addressing the associated r isks (see Annex 8 for more details).

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Procurement risks and measures: As mentioned in Annex 8, the project is considered a high risk operation from the procurement perspective. This assessment was based on the general environment for public procurement in the country as well as the previous experience with DOE, DCC and D T C B under IDA-financed projects. A number o f special measures are underway in the country, and as part o f the ongoing procurement reform, a second follow-on reform project under implementation is expected to make the reform efforts sustainable. Concurrently, a number o f measures including: the appointment o f procurement consultants, a system o f handling complaints, a procurement website, and the introduction o f a procurement risk mitigation plan (PRMP) with a set o f performance indicators will be specifically introduced during project implementation to minimize procurement risks. The detailed arrangements specific to this project are described in Annex 8.

Financial Management: The financial management assessment o f the three project implementing agencies concluded that they have varying degrees o f FM capacity.

- DOE. l ike most government departments, DOE does not have an appropriate financial management arrangement for the project. The financial management function o f D O E is limited to disbursements o f pay and allowances and other departmental expenditures. However, during the implementation o f the Bank-funded AQMP, project-specific FM staffs in the P M U were hired and the FM capacity has been build during project implementation. However the sustainability o f this capacity depends on whether the FM staff members remain in their positions.

- DTCB: the Dhaka Transport Co-ordination Board is a planning and coordinating body in the transport sector under the Ministry o f Communication. Currently there are no key financial management staff members in DTCB. The position o f finance and accounts officer (FAO) and other accounting staff under the Additional Executive Director, as provided in the newly approved organizational chart, are mandated to carry out the financial management functions. The recruitment for these positions has been delayed partly due to slow decision-making.

Development and Cooperatives. It has a reasonably well-staffed FM organization with defined roles and responsibilities. In addition to the routine accounting function o f DCC, the Accounts Department also performs the FM function for projects fimded by donors (e.g., DFID, JICA, etc.) but not by the Bank. DCC implemented the IDA-funded DUTP through a Project Management Cell (PMC). The P M C included four accounting staff members who have been retained by DCC.

- DCC is a local government body under the Ministry o f Local Government, Rural

The FM assessment undertaken by the Bank identified the strengths and weaknesses o f each agency and the actions required to address the specific issues toward establishing adequate FM arrangements during project implementation. The three different agencies will independently carry out the financial management responsibilities for their respective sub-components or components and they will be managing their own special accounts. The agencies have agreed to the recruitment o f FM consultants or project specific FM staff right from the start o f the project. Each agency will submit audited annual financial statements and interim unaudited financial reports for their specific project responsibilities to IDA with a copy to the MOEF, the overall executing ministry.

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In addition, the project implementation will need to be carried out in compliance with The Guidelines for Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants (dated October 15, 2006).

D. Social

The social analysis covers the lessons from the DUTP’s ICR and social and gender assessments, studies o f gender integration into urban transport projects and the 2008 Gender Analysis for Improving Mobil i ty in Dhaka’ conducted during the CASE project preparation. Additional studies were conducted to identify the social, gender, political economy and risks and constraints o f urban transport reforms. The studies also helped identify opportunities to enhance urban air quality and safe mobility (especially for women).

The 2008 Gender Analysis of Improving Mobility in Dhaka conducted interviews with 1 180 commuters in Dhaka city (669 female and 5 1 1 male), focus group discussions and in-depth interviews. The respondents included students, parents, office goers, shoppers etc. These commuters take, on average, 3 trips a day - walking, taking bus or rickshaw. There are differences in the proportion o f income spent on transport depending on the income level: poor and upper income women and men spend about 13-16% o f their income on transport while middle income women spend about 25% o f their income on transport.

Travel patterns indicate that commuting during the “peak hours o f 7-9 am” are the same for women and men. However, women, especially mothers, return home earlier than men do. More women than men travel between 1 1 am to 1 pm. Data indicate that 30% o f women (25% o f men) walked, 27% o f women (1 3% men) used rickshaws and 25% o f women (38% o f men) used buses to their respective destinations. About 93% stated that bus services have improved in Mirpur Road as a result o f the DUTP intervention. However, an overwhelming majority (85%) i s dissatisfied with the transport and traffic situation in Dhaka because o f overcrowding as well as lack o f accessibility and affordability .

About 12% women stated personal safety as a constraint on their mobility. At present, more than two mi l l ion women are working in the garment sector o f Bangladesh and research shows that most o f them (about 60%) commute on foot. Women’s participation in the informal j ob market is also increasing and working women are in great need o f transport services that would allow them to procure raw materials for their enterprises and sell their products. But public transport in Dhaka i s inadequate and o f poor quality. The urban transport systems that carry people to and from employment centers are inadequate, particularly for women. Hence, women walk a lot more than men. As a result, their exposure to air pollution and unsafe traffic i s much greater, making them more vulnerable. Furthermore, women commuters have to deal with the absence o f sidewalks, street lighting, toilet facilities, and safe and affordable transport services.

The transport component o f the CASE project (through the construction o f proper sidewalks and foot over bridges) i s expected to greatly benefit those who are most prone to road accidents, such as the elderly, women and children. Attempts will be made to ensure that sidewalks accommodate the needs o f people with disabilities. Also, the project will endeavor to enhance women’s participation

’ Bangladesh Institute o f Development Studies. 2008. Gender Analysis for Improving Mobility in Dhaka.

30

in decision making vis-a-vis the Dhaka transport system through their participation in key committees.

During the physical works, some adverse impacts may arise due (i) to the possible need for land acquisition and displacement o f unauthorized public land users; (ii) temporary displacement o f vendors that are using sidewalks and other public undeveloped space for their activities; and (iii) temporary inconvenience to shops and other establishments at the landings. Land acquisition for sidewalks, FOBS, etc., is expected to be quite modest and, most likely, would consist o f purchases o f small strips. Any adverse impacts that cannot be avoided completely will be mitigated in accordance with the guidelines and provisions adopted inthe ESMF'.

Under the proposed CASE project, the findings o f two political economy analyses for the bus and brick industry will be used to develop a communications and awareness campaign to improve safe mobility. In order to avoid possible adverse social impacts o f urban transport interventions (in particular restricting the movement o f cycle rickshaws on certain corridors), the project has reached agreement with the DMP to refrain from implementing any rickshaw ban in and around the project implementation areas. The project will endeavor to link with the HIV/AIDS awareness campaign o f NMT pullers undertaken by NGOs (e.g. PKSF) and others and expand the campaign to other workers o f the transport and brick industry, especially, migrant labor.

The social development outcomes that this project will contribute to include: (i) safe mobility for all, with a particular focus on women, as measured by commuter surveys; (ii) reduced travel time for al l commuters (in 2008 the average commuting time per day was 122 minutes for male and 83 minutes for female"); and (iii) civ i l society and women's participation in committees working towards improving Dhaka transport system.

E. Environment

The objective o f the project is to foster initiatives in the brick making and transport sectors that would abate air pollution, improve mobility, reduce energyhel use and contribute towards reducing local air pollution and GHG emissions. As such, the project i s expected to have overall substantial positive impact on the environment. However, during construction, some o f the physical investments will have temporarily environmental issues that will impact workers as well as pedestrians and neighborhoods. These impacts are minor, temporary in nature and can be mitigated through appropriate management measures. To address these impacts, an Environmental and Social Management Framework (ESMF)' has been developed. The ESMF contains policies, procedures and requirements that need to be adhered to during project implementation, and addresses the requirements o f Bank Operational Policy OP 4.01 Environmental Assessment, which i s the only environmental safeguard policy triggered by this project.

'Guidelines for using private & public lands and impact mitigation' section in ESMF (page 18). lo Bangladesh Institute of Development Study. 2008. Gender Analysisfor Improving Mobility in Dhaka City. " The ESMF has been disclosed in the info shop on July 16,2008.

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F. Safeguard policies

The project i s classified as Category B. Based on the experience o f the implementation o f the c iv i l works activities under DUTP and the Municipal Services Project and preliminary investigation o f the general 'situation on the ground; it i s assumed that the physical activities envisaged under the project are not likely to have significant environmental and social safeguard impacts. In accordance with Bank operational policies, an Environmental and Social Management Framework (ESMF) has been developed and will help deal with potential adverse impacts as and when they occur under the project .

Safeguard Policies Triggered by the Project Yes N o Environmental Assessment (OPBP 4 .O 1) [XI [I Natural Habitats (OPBP 4.04) [I [XI Pest Management (OP 4.09) [I [XI Physical Cultural Resources (OPBP 4.1 1) [I [XI Involuntary Resettlement (OPBP 4.12) [X I [I Indigenous Peoples (OPBP 4.10) [I [XI Forests (OP/BP 4.36) [I [XI Safety o f Dams (OPBP 4.37) [I [XI

[XI

[XI

Projects in Disputed Areas (OPBP 7.60)* Projects on International Waterways (OPBP 7.50)

[I [I

The nature and scale o f impacts will be known only when specific sub-projects are selected and impacts assessed. To deal with possible social safeguard impacts, the ESMF consists of: (i) a legal framework outlining the principles and guidelines which will be used to acquire lands and mitigate the adverse impacts; (ii) a mitigation policy matrix in terms o f impacts/loss categories; (iii) arrangements for preparation and implementation o f Resettlement Plans (RPs); (iv) a grievance redress procedure for project affected persons; and (v) a monitoring scheme, with key indicators, for land acquisition and RP implementation. The ESMF, which will apply to the entire project, will provide the basis for preparing and implementing RPs, as and when specific project components are found to cause adverse social safeguard impacts. The RP for each activity, or a batch o f activities, will contain the details o f the impacts on the affected persons, an implementation budget and a time schedule.

G. Policy Exceptions and Readiness None.

By supporting the proposedproject, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas

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Annex I: Country and Sector or Program Background

BANGLADESH: Clean Air and Sustainable Environment (CASE)

Bangladesh has grown steadily at an annual rate o f almost 5% annually over the last decade and, while ha l f o f the population s t i l l lives in poverty, the absolute poverty rate has decreased by almost a percentage point every year since 1990. Bangladesh has also demonstrated significant success in achieving the human development targets o f the Mi l lennium Development Goals (MDGs). While progress towards poverty reduction and human development goals i s being made, environmental challenges and their impact on human health have become increasingly significant concerns.

The recently completed Country Environmental Assessment (2006) conducted jo in t ly by GOB and the Wor ld Bank identified air pollution as the leading cause o f mortality and morbidity related to environmental issues. The health burden o f air pollution has been found to be comparable to that due to lack o f access to clean water and sanitation. It was estimated that, if the exposure to urban air pollution were reduced by 20% to 80%, it would save 1,200 to 3,500 lives and avoid 80 to 230 mil l ion cases o f ill health annually. I t i s estimated that this would result in savings o f $1 69-$492 mil l ion per year in health costs. Some other physical impacts o f air pollution include damages to crops and ecosystems, degraded visibility, soiling o f buildings, and damage to water quality through air deposition o f pollutants. These effects on the ecosystem impair people’s livelihoods as well as their health.

The Department o f Environment (DOE) i s continuing to carry out urban air quality management by focusing on particulate matter (referred to as PM12) -the primary pollutant and a leading health concern in Bangladesh. In 2000 it implemented the Air Quality Management Project (AQMP), a Bank supported learning and innovation loan (LIL). The LIL was a modest effort (US$ 5.93 mill ion) and resulted in establishing “building blocks” for air quality management, including: (i) an air quality monitoring system; (ii) new ambient air quality and vehicular emission standards; (iii) an Air Quality Index, which i s publicly available; and (iv) strengthened enforcement o f emission standards for public transport vehicles (mostly buses).

L e v e l s o f P M I O b e f o r e a n d a f t e r r e m o v a l o f B a b y T a x i s ( P h a s e - l l ) 1

I 6 0 0 5 0 0 E 4 0 0

E 3 0 0 m 2 0 0 1 0 0 E

0

.- D

Figure 1: Levels o f PMlO before and after the removal o f baby taxis

Under the Dhaka Urban Transport Project which was also supported by the World Bank, the investments included the installation o f traffic signals, improvements of road junctions, pavement improvements, new sidewalks, rehabilitation o f three inter-district bus terminals, making one of the main bus corridors free o f cycle rickshaws, and the construction o f a four-lane flyover in the city. Furthermore, both AQMP and DUTP helped phase out air polluting baby taxis and replaced the latter with CNG fuelled three-wheelers as o f January 2003, resulting in approximately 30% reduction in daily average PMlO levels (Figure 1).

’* The two commonly quoted fiactions o f PM are those less than 10 and 2.5 microns in diameter - referred to as PMlO and PM2.5. As a rule o f thumb, the smaller the size o f PM, the more dangerous it i s for an individual’s health.

33

After the above mentioned decrease in 2003, the level of particulate matter in Dhaka and other major cities has steadily increased in recent years, with the annual average much higher than WI-IO guidelines (see Figure 2). Population growth and econoinic activity are seen as drivers o f the r ise in energy use and emissions. The economy i s projected to rise by more than 5% annually, and ci ty dwellers are forecasted to account for 50% o f the total population by 2050. With Dhaka set to become one of the most populous cities in the world by that time, the demand for energy by the polluting sectors i s l ikely to grow manifold, which in turn w i l l lead to the rise o f local pollutants (such as PMlO and PM2.5) as wel l as global greenhouse gas (GHG) emissions, unless efforts are initiated urgently t o address these sources o f air pollution.

Particulate Matter (PM) Yearly Average, CAMS Sangsad Bhaban, Dhaka

Lo I E 200 c m e E L E $ 150

0 % $ 2 ; 100

f 0

50 x

0 2001 2002 2003 2004 2005 2006 2007

Year

Figure 2: Increasing trend in P M levels following the ban on baby taxis on 2003 (WHO guidelines are 10 and 20 udm3 annual average for PM2.5 and PMlO respectively)

The scientific source apportionment studies conducted as part o f the AQMP have demonstrated that the major sources o f air pollution - particularly fine particulate matter - in major cities o f Bangladesh consist of: (i) vehicles; (ii) small industries (brick kilns and other biomass incinerators); and (iii) re-suspended road dust (see Figure 3). These sources originate in different sectors and come under the regulatory control o f various parent ministries. Hence, the action needed to control air pollution i s necessarily multi-sectoral. The coordination dimension i s a further challenge for addressing urban air pollution in an integrated manner.

Ct hers

2% P

Figure 3: Source apportionment results for PM2.5 at two locations in Dhaka

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On a per capita basis, GWG emission in Bangladesh i s one o f the lowest in the world. It was about one fifth o f India and one tenth o f China in 1990. Emissions are expected to grow by about sevenfold (Figure 4) by 2020 to 122Tg o f CO2. However, Bangladesh i s not required to limit GHG emission under the Kyoto protocol, nor i s it expected to be required to do so under any future protocol anytime soon. However, GOB i s interested in reducing GHG emissions because carbon credits can be earned from the sale of emission reductions. There i s an active effort by Bangladesh to tap the carbon market. The proposed project design recognizes that addressing local pollutants in the key sectors through appropriate interventions can lead to the “co-benefits” o f reduction not only o f health costs but also GHG emissions from polluting sectors such as transport and industry, and ultimately t o more favorable prospects for environmental sustainability. However, this calls for demonstrating innovative approaches to addressing the problem, rather than the regulatory approach that the GOB has traditionally undertaken through the DOE.

T w o o f the three primary sources o f air pollution identified earlier - vehicles and small industries - lend themselves well t o the “co-benefits” approach mentioned above. Through i t s portfolio o f Global Environment Facility (GEF)I3 projects, and more recent projects under the Clean Development Mechanism (CDM), the Bank has r ich experience in designing and implementing projects that reduce local and GHG emissions from urban transport and small industries. Whi le driven by the primary objective o f reducing GHG emissions, these projects demonstrate how GHG emissions reduction can be achieved by improving urban mobility, while also reducing local air pollution.

In the case o f urban transport it i s wel l documented, mostly through projects in Lat in America, that interventions which promote walkability and non-motorized transport, modal shift to public transport (e.g. Bus Rapid Transit or BRT), and integration o f environmental planning into transport sector also deliver lower GHG emissions in the long run. The Bank’s experience with improving industrial energy efficiency and reducing local and GHG emissions comes mostly f rom GEF and Carbon Finance projects undertaken in Eastern and Central Asia. In recent years, the number of sustainable urban transport and industrial energy efficiency projects has grown in both East and South Asia.

Figure 4: Trends in GHG emission in Bangladesh during 1990-2020.

GEF operational policies (OPs) #5 and #11 cover energy conservation and energy efficiency and promoting 13

environmentally sustainable transport, respectively.

35

Integrated air quality management initiatives that target local air pollution and GHG emissions from key polluting sectors based on knowledge o f sources, appropriate air quality standards and data, appropriate policies and regulations, and effective incentives and enforcement policies will need to be adopted.

Capacity constraints and sustainability are major issues: DOE has been working on urban air quality management since 2000 through the Bank-supported AQMP. The completion o f AQMP presents a challenge for DOE’S efforts to address air pollution. The limited capacity in human resources and infrastructure created under AQMP wil l be passed on to the “Air Quality Cell” (AQC) at the end o f AQMP. The creation o f the AQC i s a positive step towards ensuring the institutional sustainability o f the air quality management efforts. The need for the cell arose because the air quality program activities in DOE involved several parts o f the department and required consolidation. A detailed report on AQC’s administrative structure and staffing was prepared by an international consultant during the CASE project preparation and it provides a blueprint for developing the AQC out o f AQMP and mainstreaming it in DOE during the CASE project implementation. Based on the report recommendations, GOB (Le., Ministry o f Establishment and MOF) has now approved the establishment o f a small AQC with 20 staff members. The AQC i s expected to grow in strength as part o f the proposed DOE staffing reform. However staffing o f the cell with technically qualified and competent people and retaining them within the GOB structure will remain a challenge since there are better opportunities in the private sector.

Inadequate laws, regulation and en forcement mechanism: Fol lowing the enactment o f the Environmental Conservation Ac t in1995, the Environmental Conservation Rules were passed in 1997. These two pieces of legislation are proving inadequate in some respects and enforcement mechanisms s t i l l remain extremely inadequate. Under the AQMP, ECR 97 was amended to introduce new national ambient air quality standards and vehicular emission standards (new and in-use vehicles). A further revision o f the ECR 97 rules will be needed for introducing progressively stricter standards and an amendment o f the E C A 95, which would incorporate the “polluter pays” principle and builds accountability on the part o f a l l polluters is required.

The enforcement o f current standards -- a crucial part o f regulation - i s weak. Under AQMP some street side vehicular emissions enforcement programs were conducted in cooperation with BRTA, police, and magistracy. Due to resource constraints (i.e., manpower, equipment etc) and lack o f adequate inter- institutional coordination, enforcement i s conducted infrequently. Diesel vehicle emissions control will form a major focus o f the program, and the project will work towards the development o f an auto-fuel policy in collaboration with agencies involved in the petroleum and gas sectors. The program wil l also include industrial air emission controls through the introduction o f stricter standards and their monitoring and enforcement. The introduction of industrial emission standards applicable to new sources (as wel l as existing facilities) i s especially important to Bangladesh because o f the rapid pace o f economic growth14. Therefore, DOE’S adoption o f new source emission standards will be supported under the project.

There are inadequate provisions for public discussions and transparency in DOE activities under existing laws and practices. In terms o f the specific institutional roles and mandates, the broad principles are in place but their operationalization will be strengthened.

l4 Coal fired power plants are a good example, since Bangladesh i s poised to embark on an ambitious program o f exploiting i t s coal reserves for power generation.

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Annex 2: Major Related Projects Financed by the Bank and/or other Agencies

BANGLADESH: Clean Air and Sustainable Environment (CASE)

Project

The table below shows the major related projects financed by the Bank and other agencies.

Funding GOB Agency counterpart

Agency

Air Quality Management Project ( A Q W

Department o f World Bank Environment

Wor ldBank Dhaka Urban Transport Project

DTCB, DCC, RHD

Period

Establishment o f Vehicle Inspection Centers

2000-2008

ADB BRTA

1995-2005

1998-99

ISR Rating

Moderately satisfactory in terms of meeting the project development objectives - as per the final ISR.

Satisfactory in terms o f meeting the project development objectives - as per the final ISR.

The project was unsuccessful since inspection centers could not be made operational.

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Annex 3: Results Framework and Monitoring

BANGLADESH: Clean Air and Sustainable Environment (CASE)

Table 1: Results Framework

mobility in Dhaka through the implementation of demonstration initiatives in urban transport and brick making.

Intermediate Outcomes k 1. Environment Component:

1A. Air Quality Cell at the DOE fully staffed and functional

1B. Brick kilns demonstration undertaken

20-30% per brick kiln adopting a cleaner technology by end o f project.

Reduction in GHG emissions by 15- 20% per brick kiln adopting a cleaner technology by end of project.

Improved traffic flow in project intervention locations leading to a 10% increase in vehicular traffic throughput by the end of project.

A 10% decrease in the number o f traffic accidents in the locations of project interventions by end of project, particularly for those who use non- motorized vehicles (NMVs) and public transport, especially women.

Intermediate Outcome Indicators

Undertake studies to update the source / emissions profile for at least two major cities

Establish an air quality monitoring system which provides data on the six most populated cities in the country

At least eight staff fiom DOE receive local or international training on project implementation

MOEFDOE to revise the Brick Burning Act and make it available to the Cabinet for approval.

MOEFDOE to revise emission standards for selected polluting industries and submit it to the Cabinet for approval

Approximately 25 demonstration projects implemented according to agreed schedule

Use of Project Outcome Information

Support to planning and implementation of initiatives in transport and brick making sectors that lead to fimher improvement in air quality and safe mobility.

Use o f Intermediate Outcome Monitoring

To strengthen capacity, and ability, to undertake "clean air" interventions.

To provide the basis for initiating emissions reduction from the brick industry

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1C: Media Campaigns implemented

2. Transport Component

2A (i). Physical improvement in traffic flow and pedestrian mobility and safety

2B(i) Strategy for bus route network rationalization and fianchising prepared

2B (ii) Institutional Strengthening DTCB

Intermediate Outcome Indicators

Communications strategy prepared and implemented through audio, visual and print media

25 foot Over bridges constructed

70 k m s o f new sidewalks with surface drainage constructed

80 k m s one way streets implemented

3 traffic safety campaigns

Separation of M V and NMV traffic on 2 corridors

30 new traffic signals installed

9 old signals fixed

4 1 intersections improved

At least two staff fiom DCC have received training on project implementation

Feasibility and detailed design studies completed for, (i) rationalization o f the bus route network in Dhaka; and (ii) introduction o f Bus Rapid Transit (BRT) in Dhaka

Revised DTCB Act empowering DTCB to fianchise presented to the Cabinet for approval

MOC to revise MV Act, for reduction o f emissions, including empowerment o f DTCB, and submit to the Cabinet for approval

Use of Intermediate Outcome Monitoring

To provide information and build jupport for the interventions supported by the project

To monitor the improvement in sfficacy and efficiency o f demonstration interventions in urban transport

To strengthen the institutional capacity and provide knowledge about sustainable urban transport interventions

To lay the foundation for reforming the operations of buses in Dhaka

To lay the foundation for introducing a mass transit.

39

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8 w a a n eB a x a 8 w > x

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3

d

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n n n n n n n n a m u E

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3

Annex 4: Detailed Project Description

BANGLADESH: Clean Air and Sustainable Environment (CASE)

Component 1: Environment (US$16.23 million) Implementing Agency: DOE

This component i s aimed at strengthening DOE’s capacity to effectively address air pollution. DOE will implement this component in consultation with the relevant stakeholders. The component comprises the following:

Sub-component 1A: Capacity building for air quality management (USS8.55 million)

This sub-component will: (i) support the newly established Air Quality Cell (AQC) at DOE; (ii) improve air quality monitoring, data analysis, and reporting; and (iii) improve standards, enforcement, and controls for emissions reduction.

1A (i) Air Quality Cell (AQC)

DOE recognized the need to create an AQC because air quality management activities are dispersed among many units within DOE and needed to be consolidated. To sustain the air quality management program following the completion o f the AQMP, the creation o f a dedicated AQC within DOE was proposed. A detailed report and proposal on AQC’s administrative structure and staffing was prepared by an international consultant during project preparation. The organizational chart in the report presents three scenarios: a base case o f 26 staff members, an interim case o f 62 s ta f f members, and an ideal case o f 77 s ta f f members. GOB, through the Ministry o f Establishment and the Ministry o f Finance, has approved the creation o f the AQC but with only 20 staff members initially, including one Director, two Deputy Directors (Research & Monitoring and Enforcement) and 17 technical and support staffs. The approval o f a final AQC i s in process as part o f DOE’S overall staffing reform. Until this happens, the resource support for additional staff will come from the project.

DOE’s AQC i s proposed to have major programs in air quality monitoring; program planning (including regulation and policy development); vehicle and industrial facility emission regulation; public information; and administration. Each program requires dedicated and trained staff members who are properly equipped to complete their responsibilities in a professional manner. I t requires that DOE staffs understand atmospheric science, air monitoring technology, regulatory policy and management as well as administrative practices. Because o f the current emphasis on air monitoring program development, training i s especially important to assuring adequate monitoring, data quality and uninterrupted monitoring network station operations. In the long run (and perhaps more importantly), regulatory, policy, program development and national legislation to achieve clean air will become o f paramount importance. In each o f these areas, the leaders within DOE would benefit from exposure to new ideas and experience on developing sound regulatory programs. In the interim, advancements need to be made under ongoing programs such as vehicle emissions and industrial facility regulation.

This project will support AQC as.the focal point for air pollution related activities in Bangladesh. The AQC will hire, train and strive to retain highly skilled technical personnel, who are required to effectively address air pollution issues. In order to empower the AQC staff technically, the project will support a strong capacity building program to address the capacity gaps in institutional knowledge through: (i) consultant support; (ii) addressing human resource gaps through training, exposure visits, conference participation etc; and (iii) building sound institutional knowledge through longer term academic training.

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Effort will be made to twin AQC with international agencies such as NILU-Norwegian Institute for Air Research, SEI- Stockholm Environment Institute, C A I (Clean Air Initiative)-Asia and CPCB (Central Pollution Control Board, India) specializing in air quality management so that they can benefit from regular interaction with international experts.

In order to accommodate the additional DOE/AQC staf f that i s l ikely to come on board, DOE requested funds to finance an additional infrastructure facility. The project includes an additional US$2.85 mi l l ion to finance the facility. However the availability o f the funds i s conditional on progress with project implementation and disbursements (such as progress on regulatory and institutional reforms and DOE staffing). The progress will be reviewed at the beginning o f the second year.

1A (io Air quality monitoring, data analysis and reporting

The AQMP helped create an air quality network o f f ive continuous air monitoring stations (CAMS), with two in Dhaka, and one each in Chittagong, Rajshahi, and Khulna. In addition, AQMP equipped the DOE with nine Satellite Air Monitoring Stations (SAMs), laboratory equipment to weigh and process air samples, and an instrument to measure black carbon from diesel exhaust. Furthermore, AQMP provided training to DOE’s air monitoring technicians to operate a l l sampling systems and funded international consultants to assist DOE with the development o f an Air Quality Index (AQI) for public information as well as new ambient air quality and vehicle emission standards for Bangladesh. These were important milestones in the development o f DOE’S air quality management program.

This project will build on the progress made under AQMP in terms o f strengthening the infrastructure and technical capacity for ambient air monitoring, data analysis and reporting. The data analysis and reporting will be required to: (i) determine the levels o f air quality at the locations proposed for interventions in the project so that they can provide the baseline and enable the measurement and monitoring o f the outcomes o f the interventions; (b) determine air quality trends that will be affected by changes in the economy and changes in population, and the effect o f initiatives taken by GOB; and (c) publish the Air Quality Index to inform the public about levels o f air pollution. The data will undergo rigorous quality assurance and quality control prior to their use. TQ ensure their effectiveness, this wil l include periodic audits o f the air monitoring system (equipment, data transfer and staff) to ensure that the monitoring program i s providing accurate data on an ongoing basis. The project will support appropriate hardware and software facilities, selected studies, training o f personnel to oversee the different functions, improvements to the reporting, use o f air quality information for planning, informing the public (via website and other media) and developing public alert systems.

The project will support the expansion o f the C A M S from 5 t o 11 stations by adding Sylhet, Bogra, Barishal as wel l as additional stations in Dhaka and Chittagong based on the assessment o f the existing monitoring capacity developed under AQMP. In view o f the health impact o f particulate matter (PM), the expansion o f the Satellite Air Monitoring Stations (SAMs) in several cities and the adoption o f the dichotomous (dichot) sampler as the standard measurement method at these sites have been recommended. The dichot i s a USEPA Federal reference method instrument that i s reliable and durable. N e w equipment to identify source affecting air pollution at these stations will also be added. This will greatly strengthen DOE’s knowledge o f the severity o f air pollution in Bangladesh as wel l as quantify sources contributions. Major improvements to DOE’S air monitoring data systems are also planned.

The project will also support the establishment o f a central instrument laboratory equipped with spare instruments for field deployment should in-place m’onitors fail. The instrument laboratory will have simple repair facilities and spare parts to hopefully enable rapid repairs to be done at DOE. T o ensure better data quality, a central filter weighing and processing laboratory wi l l be established to support all

44

field sampling activities. The balances w i l l also be located at CAMS stations being used for air quality improvement (AQI) purposes and can be used should the continuous PMIOPM2.5 monitors fail.

The data acquisition system used in the past i s no longer suitable for a network o f eleven CAMS stations. Changes to the expanded network include the following improvements:

- Shift from unreliable telephone modem lines for data transfer to much faster and more reliable internet TCP/IP methods at new stations and upgrading o f the older stations to this same protocol;

A total re-design o f the central data laboratory data acquisition system hardware and software to improve data management and data validation; automate AQI calculations and facilitate data reporting.

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1A (iii) Standards, Monitoring and Support for Emission Enforcement

By law, DOE within MOEF has the legal authority and responsibility for air quality management. However, the Environmental Conservation Act (ECA) o f 1995 and Environmental Conservation Rules (ECR) o f 1997 do not have adequate enforcement mechanisms. Revisions o f the ECR 1997 are needed in order to introduce stricter standards and an amendment o f the ECA 1995 i s required to enforce “the polluter pays” principle. Under the AQMP activities, ECR 1997 was amended to.introduce new national ambient air quality standards and vehicular emission standards (i.e., for new and in-use vehicles). Further revisions o f the ECR 1997 rules are needed to introduce progressively stricter standards and amendment o f the ECA 1995 which would incorporate the “polluter pays” principle. The enforcement o f current standards - a crucial part o f environmental regulation - remains weak.

Under AQMP, a number o f street side vehicular emissions enforcement programs were introduced in cooperation with BRTA, police, and magistracy. Due to resource constraints (Le., manpower, equipment etc) and lack o f adequate inter-institutional coordination, however, enforcement i s conducted infrequently. On the basis o f test emissions data collected, the revision o f standards for in-use vehicles was passed. Under the proposed project, the vehicular emissions control regulations will be further strengthened for addressing emissions from new and in-use vehicles. Diesel vehicle emissions control will form a major focus o f the program. It i s worth noting that as per a recent government order, all mini buses have been directed to convert to CNG by October 2008. This i s expected to have a significant impact on the vehicular contribution to PM in ambient air, if implemented. There i s also a need to revise f u e l specifications. The project will work toward the development o f an auto fuel policy in collaboration with agencies involved in the petroleum and gas sectors.

The goals o f the vehicle emission enforcement program in the project will be the following: - To monitor and collect emissions data from on-the-road vehicle fleet for purposes o f evaluating

current vehicle emission standards and for revision o f the standards.

To strengthen regulation and revision o f the Motor Vehicles Act and to implement the STP recommendations on addressing emissions in order to reduce vehicle emissions. This activity will need to be implemented with support from the metropolitan police and BRTA;

To focus enforcement o f vehicle emission standards on gross polluting vehicles;

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- The project will also support capacity building activities for the metropolitan police to enable to properly implement the above.

The program wil l also include industrial air emission controls through the introduction o f stricter standards and enforcement. Industrial emission standards applicable to new sources (as well as existing facilities) are especially important for Bangladesh because o f the rapid pace o f economic growth. New industrial facilities would need to incorporate air pollution control systems into their engineering plans

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during plant design when the control systems are least costly t o construct. Retrofit control systems are always more costly to install, operate and maintain than those incorporated into the original construction. Therefore, DOE’S adoption o f new source emission standards now i s especially important. Industrial facility emission monitoring i s new to DOE and wil l take some time to implement. . The objectives o f the program will be the following:

T o develop emission monitoring capabilities within DOE including staff capacity building, equipment procurement and laboratory capabilities.

T o conduct procurement o f equipment and staff training.

T o apply knowledge, methods and equipment on actual source tests o f government-owned gas and coal-fired power plants, gain field experience and determine current emission rates f rom these government facilities.

T o develop a voluntary emission testing program to gather current emission rate data from several o f the major industrial plant-types (e.g., steel ro l l ing mills) listed above. Such source tests would, by agreement, not subject the industry to any compliance or enforcement action.

T o fol low the adoption o f emission standards for specific industries and compliance/ enforcement policies and procedures,

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Sub-component 1B: Brick kilns emissions management (US$4.94 million)

This sub-component aims to usher in a new era for brick manufacturing in Bangladesh. On the one hand DOE wil l work towards changing the institutional, legal and regulatory framework. On the other hand, the adoption o f cleaner technologies and practices will be promoted among the brick enterprises with support f rom stakeholder institutions. This project will support a whole range o f activities aimed at reducing local air emission contributions f rom the brick sector. This will also result in reduced energy consumption and therefore greenhouse gas emissions. Given the GHG emissions reduction potential, the project i s facilitating the development o f two carbon finance projects that are l ikely to be implemented in parallel with the CASE project. It i s envisaged that the revenue streams from carbon finance would provide additional incentives for the uptake o f cleaner technologies and practices. Further assessment o f the requirements for continued financial incentives would be undertaken during the early stages o f the project implementation.

I B (9 Institutional, legal and regulatory aspects

The project will support the newly established Br ick Advisory Committee. The existing Technical Committee for Br ick Burning A c t will merge with this committee to form a single committee on brick issues. The committee wil l undertake the activities described in Annex-6. DOE wil l ensure representatives f rom MOEF, DOE, BBMOA, research and teaching institutions, industry experts and other stakeholders in the committee. This advisory committee will oversee the implementation o f a l l project activities in the brick sector.

With a view to building substantial capacity within GOB for addressing issues relevant to this sector, the project will support awareness and competence building programs and exposure visits by various GOB personnel.

Recognizing that any legal and regulatory framework should be prepared in the context o f a policy document, the project will support the development o f a long-term strategic framework for “Greening the Br ick Industry in Bangladesh”, which will be prepared through a consultative stakeholder approach. This strategic policy document wi l l define the new institutional framework for the brick sector.

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Strengthening the legal and regulatory framework in the brick sector i s imperative, taking into account both the Bangladesh context. and similar regulations from other developing countries. The legal and regulatory framework will be developed through a consultative process. The project will support the revision o f the Br ick Burning Ac t and other relevant legislation to be undertaken by 201 1 or project mid- term (which ever i s later), and will support initiatives to build the capacity within the MOEF and DOE for effective implementation. This may include hardware (infrastructure and equipment) and software (procedures and enhanced inspection and enforcement strategies) for stack emission monitoring to help determine compliance by industrial facilities.

1B (ii) Introducing cleaner technologies and practices through demonstration initiatives and technical services development

Prior to launching the demonstration program, the project will support two assessments: (i) the existing technologies and practices across the country vis-&vis soil quality, f u e l use and final product quality wil l need to be conducted; and (ii) the availability o f waste material that can be used as internal fuel in the brick making process and o f raw materials as alternative building materials i s required.

Based on the results o f the above assessments, the project will support 12-16 demonstration initiatives to improve existing technologies (such as, FCKs, z ig zag kilns) and practices through the introduction of: (i) internal fuel; (ii) better firing practices; (iii) low-cost mechanization; and (iv) gravity chambers and other emission-reducing investments. Each demonstration initiative will include a l l or a combination o f these cleaner practices as relevant. The project will also support 6-8 demonstration initiatives that introduce new technologies such as the V S B K or Hybrid Hoffman Kilns or zig-zag habla kilns. In addition, the project will also support 3-5 demonstration initiatives to determine the viabil ity o f alternative building materials. The project will bear the costs o f energy and environmental monitoring associated with al l demonstration initiatives. Following the completion o f the demonstration projects, it i s estimated that some 400-500 brick manufacturers (i.e., 10% o f the total number o f kilns or 42% o f the north Dhaka cluster) will switch to the newer and cleaner methods o f brick manufacturing. The latter would lead to a potential decrease o f local emissions by 20-30%, energy savings and greenhouse gas reduction o f 1520%

The development o f technical support services i s viewed to be necessary for ensuring the sustainability o f new, cleaner technologies and practices. Technical support to these cleaner technologies and practices wil l be done in parallel to the demonstration projects, as these are vital for replication across the industry sector. Entrepreneurs will require substantial training and capacity building to adopt and adapt cleaner technologies and practices across the brick sector throughout Bangladesh. Training materials will have to be developed, awareness workshops and competence-building sessions be organized. The project will support the various training and capacity-building initiatives that need to be done to make widespread the adoption o f cleaner technologies and practices.

The project will bear the costs o f the assessments, demonstration initiatives, technology supplier fees, technology absorption costs and various training and capacity-building initiatives.

Sub-component 1C: Communication campaign and analytical studies (US$1.59 million)

I C (i) Communication campaign (US0.38 million)

#Addressing air quality concerns i s as much about using “soft” skills and methods as about using the hardware for air quality monitoring or laboratory equipment for analyzing sample evidence. The dissemination o f information, education and communication about the sources o f air pollution, i t s impacts and costs, and remedies is important not only for creating awareness, but also for creating the demand for

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clean air from various public constituencies. Hence communication campaigns wil l need to be tailored to external stakeholder groups to enable them to ask the right questions and build demand for clean air. In addition, there i s a need for ensuring adequate communication among the internal stakeholders wherein the project authorities and implementing agencies are equipped to proactively manage the risks and reap the rewards o f sustainable environmental initiatives. Risk management is important in the CASE project since there are l ikely to be some winners and losers during project implementation.

The communications campaign will be rolled out using al l available media channels in English and Bangla to highlight the impact o f local and global emissions from key transport and industrial sources, and the “co-benefits’ o f addressing the same. It wi l l contain targeted messages for different stakeholders, and will be linked with the national program for HIV/AIDS awareness to enhance the impact o f the messages among workers in the transport and brick industry. Social marketing tools wi l l be used to address socio-cultural issues. The media campaign wil l also serve as the tool for GOB to reach out to different stakeholders and include them in the efforts to achieve the project’s development objectives. In doing so, it will work as a risk management tool for the project, since there are l ikely to be some winner and losers during project implementation.

The elements o f the program are as follows: - -

Development o f 2-4 radio and/or television spots for broadcast (air, brick, transport awareness); Organization and promotion o f “Clean Air Awards” to be given by DOE to selected industries that have demonstrated outstanding environmental stewardship. Design and construction o f a portable public information display for DOE use at public events. I t i s proposed to implement this program by doing the following: Organize round-tables on important air-quality issues; Development air quality messages and put air quality index on existing billboards; Use Wor ld Environment Day to highlight the air quality issues Updating the existing air quality website.

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I C (ii) Analytical Studies (US$1.21 million)

Given the l imited capacity o f DOE especially in highly technical issues, this component will finance various technical studies and training including:

- Emission inventory and dispersion Modeling: Studies to identify the sources o f pollution contributing to serious air pollution levels in the major cities are essential for understanding o f the causes o f air pollution. These studies would start with emission inventory that identifies all sources o f air pollution and their contribution to the problem. Then, the emission inventory can be used in air quality (i.e., dispersion) models to assess the effects o f different emission control strategies on local air quality. The receptor modeling: It i s also referred to as source apportionment results can then be used to assess strategies that will focus on the sources with the greatest contributions to the problem, and they can be prioritized in terms o f cost-effectiveness. These studies wil l be done through performing chemical analysis for many parameters o f the filter samples obtained in PM monitoring and multivariate statistical analysis o f the results f rom chemical analysis. Emission Permitting: Such studies will be essential for structuring and implementing new DOE programs to regulate industrial emissions through a permitting emission control program. This would require expertise in dispersion modeling, new policy and regulatory development conducted in partnership with industry and other stakeholders, international consultants and local legal expertise. Development o f Emission Inventories for Dhaka and Chittagong wil l be integral to such a program. These inventories form a basic requirement o f any regulatory program and are used to identify sources and track emission changes. The studies wil l result in customized area

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based models which can evaluate the impact o f planned industries which can contribute to local air pollution thus providing the capacity to evaluate air quality benefits from alternative action plans Emission controlpiZot studies are needed on the effectiveness o f air pollution control options in Bangladesh since current knowledge is largely bases on studies in other countries. Such research might include evaluations o f the cost and effectiveness o f controlling dust f rom roadways, construction sites, and industrial facilities following similar research done in Bangkok and elsewhere. Dust Management studies: A significant portion o f the particulate matter in Dhaka and Chittagong i s known to be derived from geologic soil dust. Dust is suspended in the atmosphere as a result o f many activities including construction, vehicle entrainment f rom paved and unpaved road surfaces, vehicle use on industrial properties, wind suspension from bare land surfaces, off- road vehicle use, farming activity and others. There are various measures o f mitigation controls which include vacuum sweeping, water flushing, and broom sweeping, banning o f keeping bare land areas among others. The actual control efficiencies for any o f these techniques can be highly variable, preventive controls are usually more cost effective than mitigation measures. Thus, studies are need to determine the local cost-effectiveness o f mitigation controls and the project will support such studies for identifying routine measures for dust mitigation. Health impact studies: Until now a l l health impact studies in Bangladesh have been based on known dose-response relationships derived from past studies that have been conducted worldwide. There are concerns that large uncertainties are involved in using such proxy coefficients because o f differences in nutrition levels, living conditions and other health related issues. Such concerns can only be addressed through city-specific researches based o n locally collected epidemiological and air quality data. The project wi l l support health studies to generate local dose-response coefficients which are more factual. Training of key stakehozders including municipal officials, community awareness-raising events and citizen's monitoring initiatives. Awareness generation and outreach to be provided to a l l local governments that explain the basic air pollution requirements and identifies ways and means o n ' how officials, stakeholders and general public can notify the AQC when problems are observed (see subsection on media campaign for clean air).

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Sub-component ID: Project Management and Coordination (USU.16 million)

Project implementation o f the DOE component will be carried out by the AQC which wil l serve as the Project Implementation Unit (PIU). The director o f the AQC will serve as the project director for the DOE component o f the project. The budget for project management will cover the costs o f consultants, travel, office equipment, meeting costs, audits and other operating costs necessary for project implementation and reporting. The project director will facilitate the operation o f the Br ick Project Advisory Committee.

A Project Coordination Unit (PCU) will be created at the MOEF and wil l be headed by a Project Coordinator, who wil l be the rank o f Joint Secretary. Whi le project implementation will be carried out by the three agencies through their respective Project Implementation Units (PIUS), the overall project coordination will be anchored at the MOEF.

Component 2: Transport (US$45.97 million)

Diesel buses are considered a major source o f PM pollution in cities. Following the removal o f approximately 35,000 two-stroke three-wheelers, approximately 10,000 CNG-fuelled three-wheelers came onto the streets. While this led to a dramatic improvement in air quality in the short term, it also led

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to a large number o f diesel buses coming onto the streets o f Dhaka in order to satisfy the need for public transport and quickly negate the gains made by removal o f two-stroke three-wheelers (details in Annex 1). Recently, the GOB has initiated a number o f actions against buses in order to address the worsening congestion and air pollution problem: (a) the issuance o f route permit in Dhaka to more than 15 year old buses has been disallowed; (b) a vehicles inspection and maintenance program supported by the ADB i s planned to be launched soon; and (c) a l l mini buses were directed to convert t o C N G by October 2008. If implemented, these actions can have a significant impact on the vehicular contribution to pollution in Dhaka. However, in order to sustain the gains envisaged, structural problems related to public transport planning, coordination, and operations need to be addressed.

This component will support technical assistance and demonstration initiatives in urban transport in Dhaka. It will also help strengthen the institutional, policy, and regulatory framework for public transport, and help mainstream environmental considerations into urban transport related decision making. A number o f GEF supported projects have demonstrated that interventions which promote non-motorized transport and a shift to less polluting modes o f transport lead to lower GHG emissions and to more sustainable mobil ity pattern o f the population

The outcomes o f this component will consist o f improved traffic flow, reduced congestion, enhanced mobil ity and safety o f pedestrians and those who use public transport, in those areas o f Dhaka where the project will be undertaken. In addition, it will help lay the foundation for longer term improvements in urban transport through technical assistance and regulatory changes. The development and execution o f this component will involve a number o f key stakeholders including, the Ministry o f Communications, Bangladesh Road Transport Authority (BRTA), Dhaka Transport Coordination Board, Dhaka City Corporation, Dhaka Metropolitan Police (DMP), as well as public transport owners and operators.

Sub-comuonent 2A: Transport (US$39.30 million) Implementing Agency: DCC

2A (9 Physical improvement of traffic j low and pedestrian mobility (US$3 7.27 million)

The objectives o f this sub-component are to: (i) reduce congestion and improve traffic flow, thus contributing to an overall improvement in local air quality and reduce GHG emissions; and (ii) enhance pedestrian safety and mobility. In Dhaka, nearly 50% o f the people are walking dependent, both for economic and efficiency reasons. Also, 77% o f traffic accident fatalities are pedestrians and 50% o f these fatalities involve buses. Hence, the focus i s on mobil ity and safety. This sub-component combines the improvements to traffic f low with various elements o f safety particularly for pedestrians. It also aims to assist the urban poor and women by judiciously targeting improvements to the areas with a high concentration o f ready made garment factories where many low-income women employees walk to work. The project proposes to undertake a comprehensive approach to traffic management on a neighborhood basis. The targeted neighborhoods are Mohamadpur, Khilgaon, Tejgaon and Old Dhaka. Mohamadpur was chosen because o f i t s historic character with a lot o f pedestrian traffic while Khilgaon and Tejgaon were selected because the pedestrians are primarily l ow wage earners (mostly women) in the garment industry. For example, at some intersections (proposed FOB at N a m Garden Crossing), 4,300 pedestrians cross the street during the morning peak hour, 4,100 o f whom are l ow income women employed in the garment industry.

T o achieve these objectives, the following measures wi l l be supported: (a) traffic safety campaigns; (b) new sidewalks with surface drainage, appropriate ancillary road improvements and removal o f obstructions to safe walking; (c) separation o f motor vehicles ( W s ) from non-motor vehicles ( N W s ) ; (d) defining new one-way streets; (e) foot over bridges (FOBS) (0 traffic signaling, improvement o f

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intersection and related activities; and (g) development of a framework for sustainable parking strategies and policies and their enforcement on the basis of a parking study.

2A (oa Campaigns for clean and safe mobility

Since traffic safety and exposure to air pollution, especially for pedestrians, i s a major challenge in Dhaka, the traffic management sub-component will include clean and safe mobility campaigns during the short and long term. The campaigns will be implemented collaboratively by DCC and DMP officials under the leadership of the Joint Commissioner Traffic, and will be conducted with the cooperation of the media, schools and colleges, private sector, and concerned NGOs. A DVD / film will be produced to illustrate the consequences of unsafe traffic habits and vehicles emissions and also present the benefits of a clean and safe mobility. The first campaign will be conducted in the first two years o f project implementation. After evaluating the experience of the first campaign and incorporating the lessons learned, another campaign will be launched during the third year of project implementation.

2A (9 b Sidewalks and ancillary road improvements: Mohamadpur, Khilgaon and Tejgaon

Sidewalks not only enhance safe pedestrian mobility, their presence also suppresses re-suspension o f road dust because of the lack of loose soil being churned by pedestrians or vehicles. Re-suspended road dust i s a major air pollutant in cities. Most low paid workers (urban poor and women) in the garment industry walk through Khilgaon and Tejgaon. Surveys carried out during project preparation on the use o f the sidewalks found that 60%-80% users are women during peak hours. Currently sidewalks are discontinuous, inadequate or simply non-existent on most of these streets. There are many obstructions to safe walking, such as utility poles, broken pavement, unauthorized structures, unauthorized businesses, hawkers and vendors. In addition, the existing surface drainage systems are inadequate and do not function well, especially during the rainy season. The situation i s similar in Mohamadpur. As a result, women walk on the main road, thus endangering their lives and slowing traffic movement. A study was carried out during project preparation to document the gender issues related to urban transport, so at to make the project gender responsive. A summary of the study findings can be found in the project file.

The construction of new sidewalks with proper surface drainage i s proposed for project support. Obstructions to safe walking may be removed and/or relocated and the rehabilitation o f pavements in need o f repair and/or repaving i s also proposed. The sidewalk designs will be People with disability (PWD) friendly. About 70 km of roads in Mohamadpur, Khilgaon and in Tejgaon are expected to be improved under this program. The program of new sidewalks and ancillary road improvements will be implemented in stages during the first three years of the project.

2A (Qc N W / W lane separation in two major corridors

Segregation of slow and fast moving traffic reduces conflict and increases speeds. As a result less time i s spent by vehicles idling at intersections and traffic jams, which in turn decreases vehicular emissions. Dedicated lanes for NMVs are proposed to be supported for two major corridors: i) from Bangla Motor Junction to Kamlapur Railway Station; and ii) from Kilgaon Flyover to Bango Bhaban. I t may not be possible to provide this separation continuously or without any interruptions on these two corridors. Two separate conceptual designs will be prepared and submitted for stakeholder consultations prior to implementation as a pilot project. Based on the lessons from the pilot and design changes as necessary, installation of permanent lane separators will be completed under the project.

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2A (i)d One way streets: Mohamadpur and Old Dhaka

In areas with narrow streets, congested mixed traffic leads to frequent traffic jams that disrupt mobil ity and result in enhanced exposure to air pollution, particularly for pedestrians and road side vendors. The Dhanmondi neighborhood has many streets with mixed MV traffic. A visual observation indicates that the one-way street. system, which was installed two years ago, appears to be working reasonably wel l during the peak hours. During the non-peak hours, the one way system is neither enforced nor obeyed by road users.

O ld Dhaka, which consists o f f ive thanas (police stations): Shyampur, Sutrapur, Kotwali, La1 Bagh and Hazaribag, has many narrow streets with an unruly mix o f M V s , N M V s and pedestrians that use the same unregulated road space. N e w one-way streets are proposed for project support for Mohamadpur and Old Dhaka. Works will include road signs and markings. The proposed c iv i l works in Mohamadpur would include, in addition to the s igns and markings. Based on a feasibility study to be completed before approval o f the project, the one-way street program wil l select a priority network o f 40 km o f roads in Mohamadpur to be proposed for one-way street system. For the Old Dhaka part o f the study, it is proposed to support prioritized 40 km o f roads for the proposed one-way street system (from a total network o f 100 km). The implementation o f the one-way street system i s scheduled for Mohamadpur in the second and third years o f the proposed CASE project in coordination with the implementation o f other improvements in the area, and in the third and fourth years for Old Dhaka, using the lessons learned from the proposed one way system in Mohamadpur.

2A (i)e Foot over bridges (FOBs)

Foot over bridges not only provide a safe mobil ity option, they also serve to reduce the conflict between pedestrians and other traffic and hence reduce congestion and increase the throughput o f vehicles. There are 52 FOBs in Dhaka now. D C C proposes to build another 25 FOBs in selected locations with high pedestrian volumes to improve safety and traffic flow, which in turn will reduce vehicular air emissions. The project will focus on better designs and innovative solutions, based on user feedback (a survey was undertaken at the end o f DUTP and also during CASE project preparation), rather than duplicating the existing FOBs. D C C already has some experience in getting the private sector involvement and they wil l also explore the possibility o f partnerships with the private sector for the construction and maintenance o f the proposed FOBS’’. In many countries, private sector corporations build and maintain transport related structures including FOBs in exchange for advertising and other revenues. It i s proposed that at least f ive o f these FOBs wil l be built during the f irst year o f project implementation and the remaining twenty during the remaining project period.

2A (i) f TrafJic signaling, intersection improvements and related initiatives

Dhaka now has 73 signalized intersections, o f which 68 were installed as part o f D U T P and 5 have been recently added to new corridors; the latter have been procured and will be soon handed over to DCC. Out o f 68 intersections installed under the DUTP 9 intersections need repair and replacement o f signals. In addition, the synchronization o f signals, done under DUTP in 2004, i s quite out o f date for current traffic conditions and needs to be updated. D C C proposes to add 30 new intersections for signalization, under the CASE project.

l5 DCC has made some progress in establishing partnerships wi th the private sector. One steel FOB has been constructed at Paribagh intersection (Elephant Road to Hatirpool) and i s funded entirely by the E x i m Bank o f Bangladesh. E x i m Bank i s responsible for maintenance and their officials have indicated that the construction o f FOBs is part o f i t s “community care program” and the contract entitles it to advertise on both sides o f the FOB.

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Trafic Signals Synchronization along Mirpur Corridor The projectwill include traffic signals synchronization along the Mirpur Road corridor and the east-west corridor from Science Laboratory on Mirpur Road to Gulistan via the Ramna Park. This will cover 21 junctions already equipped with traffic signals. Furthermore, at 9 o f these intersections along this double corridor, the traffic signal operations are currently defunct. The DCC has already initiated the process o f procuring these signals from their own funds and this contract i s expected to be awarded before project effectiveness. The implementation o f the synchronization scheme would be done by the Signal Maintenance Contractor as part o f their routine maintenance work.

Synchronization of Remaining Existing Trafic signals, installation of count down timers and solar panels for existing signals : In addition to the synchronization o f 2 1 junctions along the Mirpur corridor, the project will support synchronization o f the remaining 52 o f the 73 junctions equipped with traffic signals within Dhaka. This would be undertaken by the Traffic Engineering Department (TED) o f the DCC. Synchronization is required as the vehicular traffic volume and pattern has evolved since installation o f the system several years ago. The project w i l l finance procurement and installation o f count-down timers and solar panels for renewable power supply at 73 existing junctions as part o f this synchronization effort, and DCC would bear the cost o f maintenance o f the equipment. For the f i rs t three years this maintenance will be covered as part o f the signal maintenance contract to be signed by DCC utilizing i t s own funds as part o f counterpart funding.

Training for the Trajfk Police for Operation of Signals: As per agreement reached with the Joint Police Commissioner for Traffic o f DMP, there would be a two-fold operational plan for effectively utilizing the traffic signal infrastructure in Dhaka. During periods when the traffic signal needs to be overridden by the Traffic Police, the Police would operate the traffic signals manually while at other times, the signals would be allowed to operate automatically. To enable this, the Police will be trained on manually operating the traffic signal controller. DCC has already provided two training for approximately 100 traffic policemen (on January 1 1 and 18,2009). Training will need to continue to the rest o f the relevant traffic police force over the period o f the project. The cost o f th is activity would be met by DCC utilizing i t s own funds.

Feasibility Study for improvement of 41 Intersections: The project would require a feasibility study to assess the need for installing new signals together with attendant physical improvements to the junctions at 41 priority locations. The feasibility study to be undertaken by the DSM Consultants after project effectiveness, would not only establish the necessity o f traffic signals but would also identify the physical and operational improvements needed for enhancing the efficiency and safety o f pedestrian and vehicle movement at 30 locations and ensuring adequate functioning o f the traffic signals system in a sustainable manner. At remaining 11 junctions where signals are not warranted, only physical improvements shall be undertaken subject to feasibility satisfactory to DCC and to the Bank

Physical Improvement of 41 intersections and signalization of 30 of them The project intends to support the implementation o f physical improvements for 4 1 intersections.

In addition, the project will also support the installation o f traffic signals at 30 o f them subject to appraisal satisfactory to the Bank and evidence o f sustainable maintenance and operation o f the existing signals.

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The benefits o f the operation o f the 68 signalized intersections equipped under the DUTP could not be sustained due to: the absence o f regular update o f the timings, insufficient maintenance and improper enforcement o f the system. The improper enforcement o f signal operation (including also occasional actuation o f signals) has various reasons such as: high vehicular volumes, mixed traffic, and frequent overruling o f the signals by the traffic police for V I P movements. At present during peak periods, the majority o f existing signals are not used and the traffic i s directed manually. Therefore sustainable maintenance and operation o f the existing signals wi l l need to be demonstrated before the Bank considers financing the procurement o f additional traffic signals for the proposed 30 new intersections. The sustainable maintenance and operation can be demonstrated as follows: (i) periodic updating (once every six months) o f signal timings at existing signal installations to be undertaken for at least two successive periods; (ii) periodic training o f the police for operation o f the signals, (iii) maintenance o f the hardware and updating o f the signal software by the maintenance contractor and, (iv) adoption, and implementation for at least one year, o f a signal action plan to improve the effectiveness and reduce the improper enforcement o f signals by the traffic police. The signal action plan definition and implementation wi l l be done by D C C in association with D M P and DTCB. The above activities are to be financed by D C C uti l izing its own funds, except for additional, non routine, technical assistance which could be financed by the credit.

For the proposed new signalized intersections, it i s envisaged that there will be two separate investment contracts - one for c iv i l works and the other for supply, installation and three year maintenance o f signals, t o be financed by the credit. Design and supervision o f the new intersection improvements and installation o f new signals, timers and solar panels will be included in the D S M contract; design and bidding documents wil l be prepared ahead o f the decision regarding financing the signals under the credit.

2A (i)g Parking strategy study

Parking, both legal and illegal, i s a major challenge in Dhaka. There i s a severe shortage o f parking spaces and rampant illegal parking on the streets. There i s an urgent need to develop parking policies and strategies that will contribute to better traffic f l ow and higher safety. The project would support the development o f a parking strategy based on lessons learnt during DUTP. The proposed parking strategy study is l ikely to include:

- A review o f existing on-street and off-street parking supply and demand, pricing o f parking, suitability o f streets for parking, enforcement o f parking laws and regulations, collection o f parking fees and fines, and suggest improvements which can be implemented quickly A review o f off-street parking supply and potential for immediate consideration with and without private sector participation A review o f parking requirements and rules in both residential and non-residential areas and effective enforcement systems; A review o f the forecast o f parking needs until year 2024 in Dhaka segregated by various areas and delineation o f off-street and on-street requirements Recommendations on policies and programs to maintain appropriate parking supply and appropriate pricing polices Recommendations on parking regulations and enforcement

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2A (ii) Institutional strengthening and regulatory review (USSO. 8 7 million)

This includes various advisory services and training to be provided in the fol lowing areas and the respective implementing agencies: (i) design o f traffic engineering; (ii) traffic signal systems management in coordination with DMP; (iii) mainstreaming environment in urban transport management; and (iv) traffic management in coordination with DMP.

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Given the important role of the Traffic Engineering Division (TED) of the DCC in implementation of key initiatives, the project will support a review of i t s institutional framework with a view to update and upgrade its role in the context o f the STP. The review wil l specifically explore the options for a Traffic Signal Cell and Road Safety Cell at DCC. An organogram as recommended in the STP may be followed for capacity building of DCC under the project.

2A (iii) Project Management (US$l. 06 million)

Project implementation of th is project subcomponent wil l be carried out by the DCC through a Project Implementation Unit (PIUS). The PIU wil l be headed by a project director. There wil l be a budget for project management which wil l cover the costs of consultants, travel, office equipment, audits and other operating costs necessary for project implementation and reporting. The project director wi l l be assisted by technical experts as needed.

Sub-component 2B: Transport (US%6.67 million) Implementing Agency: DTCB

2B (9 Preparation of Bus route network rationalization and franchising (US$4.22 million)

There are currently about 6500 buses operating in Dhaka carrying 1.9 million passengers on a daily basis.16 Out o f these, approximately 450 are diesel and 1 170 are low-polluting CNG-fuelled standard size buses; and the remaining 5400 are primarily mini-buses, majority o f which are highly polluting and diesel-operated. Standard size CNG buses are being operated through companies whereas the mini-buses are mostly operated on an individual basis.

Currently, bus routes are assigned by the Road Transport Committee (RTC). However, the RTC does not have the tools nor the capacity to assess the requirement o f buses on city routes and optimize their operation. The result i s competition among the various bus operators “in the market” rather than “for the market”, leading to congestion, accidents, and air pollution. With rational route planning and management, leading to the introduction of more big buses on franchised” routes (corridors), it would be possible to meet the twin objectives of: phasing-out highly polluting and inefficient mini-buses and improving the fluidity o f traffic. In the long term, it i s envisaged that bus route franchising wil l be done on a competitive basis for specified routes, which make use o f priority measures. The qualifying operating company wi l l enter into an operating performance-based agreement (termed as a “franchise”), which wil l specify the rights and obligations of the Bangladesh Road Transport Authority (BRTA) as well as the company.

This subcomponent, to be implemented by DTCB, aims to lay the foundation for addressing these problems by encouraging the introduction o f better quality bus operations. The latter could be made possible by offering exclusive access to bus routes/corridors to selected operating companies. Specifically, it will: (i) assist with the rationalization of the bus route network in Dhaka and facilitate the introduction of competitive route contracting on a set o f bus routes in the medium to long-term; and (ii) facilitate the introduction o f bus rapid transit (BRT) system on a pilot corridor in Dhaka. To this end, the project wi l l support necessary studies, including a feasibility and detailed design study for BRT, for operating low-polluting (i.e. CNG fuelled) and commuter-friendly (particularly for women) buses on a pilot corridor. Furthermore, the project wi l l support consensus building and institutional strengthening to

By contrast, in Mumbai, 3700 big buses including double deckers, carry about 3.4 million passengers per day. 16

l7 Bus franchising also offers the opportunity for renewing the old and polluting fleet o f buses in Dhaka.

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facilitate the introduction o f BRT operations. All o f these initiatives will be consistent with the recommendations o f the Dhaka STP.

It i s envisaged that BRT operations would encourage a modal shift from existing transport modes to cleaner and safer transport modes on the corridor, and have a demonstration effect for the city in the long- term. Once the basic elements for bus route network rationalization and franchising - institutional strengthening, legal and regulatory reform, and stakeholder consensus building are in place and detailed designs available, the physical investments for implementation o f franchised operations on a priority corridor could commence as a follow-on project to be prepared on a fast track.

Three corridors are being considered by the government to select one as BRT priority corridor in line with the STP. These are: (a) from Uttra to Saidabad Bus Terminal v ia Pragoti Road, (b) from Gabtoli to Saidabad Bus Terminal v ia Mirpur Road and (c) f rom International Airport t o Ramna area via Airport Road. The government wi l l provide the Bank with i t s recommendation for BRT priority corridor with adequate justification.

2B (i)a BRT Feasibility Study

The objectives o f the study will be to assess the feasibility o f implementing a BRT corridor. The scope o f the study will be to assess engineering, financial and economic feasibility, as wel l as environmental and social impacts. Operational characteristics o f the system wil l be specified including open or closed system, median or lateral alignment, vehicle recovery, pedestrian facilities, fare collection, junction priority and integration with intersecting bus routes. Institutional and regulatory framework will be proposed including franchise terms, selection o f operator, ownership o f system, regulation including fares, performance and service obligations. A plan to restructure the existing bus services along the priority corridor wi l l be developed to ensure good feeder access and limit competition to the system. Forecast demand will be carried out for the bus priority or BRT system and existing bus routes. The study will be procured and managed by D T C B with the assistance o f the Public Transport Adviser. The study i s expected to last 9 months.

2B (i)b BRT Design Study

Subject to feasibility being confirmed, the objective o f the study will be to prepare a detailed design o f the bus rapid transit system, and consequential changes to facilitate implementation and operation.

The Scope o f the study will be to: - Prepare a detailed design for the priority corridor including stations and terminals, traffic

management and pedestrian facilities, intersections, adjustments to the bus network, relocation 'of utilities and provision for building accesses and trees. Propose arrangements to manage the BRT, including the operating franchise structure and terms Develop a programme to restructure existing bus routes Propose specifications o f buses to be used on the system Arrange al l works into packages for bidding and prepare draft bidding documents. Advise on the procedure for award o f operating rights

Prepare and assist development o f the franchise structure and regulatory framework,

-

- - -

- Develop an implementation programme -

The study i s expected to last 12 months.

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2B (i)c Public Transport Network Study

The objective of the study i s to design an improved urban bus network that wi l l more efficiently meet existing and future demand, and to develop a scheme for franchising bus services (other than those on the bus priority or system) to improve service performance.

The study will: - -

Review the 2007 bus network database and collect additional survey data as necessary Specify objectives and evaluation criteria for the network design process including economic, environmental and social criteria to comply with World Bank safeguards Propose and evaluate strategic options for network restructuring; recommend a preferred option; develop route packages for franchising and a progressive programme to extend franchising to the whole network. Propose an institutional and regulatory framework for awarding and administering bus franchises.

-

- The study i s expected to last 12 months.

These transport studies are to be carried out during the project implementation period and require careful preparation and management by DTCB, therefore TORS for the studies wil l be prepared with the assistance o f the Public Transport Adviser. Thus the Public Transport Adviser wi l l be engaged as a f i rs t priority before any o f the public transport studies described above commences.

2B (io Institutional strengthening and regulatory review (US$l. 73 million)

The DTCB was created as a transport planning and coordination organization under DUTP. I t has been revived by GOB and made a part o f the revenue budget stream, signaling GOB’S intent o f having DTCB play a major role in public transport planning and coordination. This component wi l l include a review of the institutional and regulatory framework for public transport with the aim of: (i) providing a pivotal role to the DTCB in planning and coordination o f urban transport; and (ii) enabling bus sector reform, with a focus on route rationalization and franchising. In the long term, this component i s expected to lead to the establishment of a unitary authority for urban transport that can plan, implement, and coordinate a multi- modal urban transit system.

Furthermore, this project wi l l aim to resolve the institutional and regulatory impediments related to the proposed bus-related activities. There is a need to clarify the role and responsibilities of the DTCB in th i s respect vis-&vis the BRTA and the Metropolitan Road Transport Committee (MRTC).

Revision of the Motor Vehicle Ordinance (MVO) 1983, as amended 1988, i s urgently required to introduce modern vehicle safety and environmental standards and to overhaul the public transport licensing provisions including making legal provision for bus franchising. I t i s understood that a draft revision of the MVO in Bangla has been completed which contains new powers to introduce more stringent vehicle emission standards, to designate exclusive lanes for buses and to award bus route franchises. Detailed provisions on these matters wil l be drafted later and issued as Rules under the Act.

Through the revision of the MVO this project wi l l also support the reform measures necessary to implement the action plan developed as part of the STP (and in AQMP) for reducing air pollution from gross polluting diesel vehicles, and to achieve that wi l l include review and revision o f policies, regulations, legislation and roles of institutions. It wi l l assist in the review and revisions o f the MVO, in terms of vehicle technology, fuel, safety, emissions control and modern management approaches. This wil l also help establish a legal and regulatory framework that i s conducive to introduce the proposed bus- related activities.

DTCB i s characterized by i t s Act as a planning and coordinating body for transport. The strategy to improve the operation and organization of urban bus services involves reform o f the licensing system so that buses are operated under route franchises held by companies large enough to manage at least one

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route. D T C B Ac t will be revised in order to empower D T C B to franchise bus routes. Revised bills wi l l be enacted prior t o starting the bus franchise process.

In Dhaka, the Dhaka Metropolitan Police (DMP) i s responsible for traffic control and traffic management. The Dhaka City Corporation (DCC) owns and builds roads, sidewalks and traffic signals while the Road Transport Association (RTA) i s responsible for M V s , and other utility agencies (telephone and power) are responsible for utility structures (poles etc). The CASE project i s proposing traffic management investments in some corridors and they will not be effective if other actions were carried out that could diminish or nullify the benefits o f the proposed project investments. For example, it was agreed with DMP that rickshaws would not be banned along the corridors where CASE project investments are planned. D M P also agreed not to take any major actions along such corridors without prior consultations with other stakeholders. Recognizing the need for coordination and cooperation between the various actors the project would support institutional cooperation and coordination for traffic management.

2B (ioa Public Transport Adviser for DTCB

The appointment o f a long-term Public Transport Adviser to D T C B i s the highest priority. The Adviser wil l draft DTCB’s first 5-year business plan and assist with i t s implementation (including for specific public transport studies). He/she would also assist with drafting the TOR for the bus related studies mentioned above.

2B (iqb TraJEc Management Coordination and Capacity Building

This includes various consulting services, technical assistance and trainings to assist D T C B in discharging i t s responsibility as mandated by the STP, and to prepare the legal and regulatory reviews included in the project. It i s also meant to facilitate the functioning o f the TMC.

One o f the initiatives to be supported i s the creation o f a Traffic Management Committee (TMC) anchored at the DTCB. The T M C would have representatives f rom a l l relevant stakeholders including the DMP. Technical assistance and capacity building will be provided in the following areas and to the respective implementing agencies: (i) public transport regulatory institutions; (ii); mainstreaming environment management in urban transport planning; and (iii) management o f motor vehicle emissions (BRTA and DTCB).

This activity could include also additional studies, such as for instance a Pedestrian Mobi l i ty Master Plan, revision o f the MVO and other required consulting services.

2B (iii) Project Management (US$O. 72 million DTCB)

Project implementation o f this project subcomponent will be carried out by the D T C B through a PIU. The PIU wil l be headed by a project director. There will be a budget for project management which will cover the costs o f consultants, travel, office equipment, audits and other operating costs necessary for project implementation and reporting. The project director will facilitate the operation o f the Traffic Management Committee (TMC).

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Annex 5: Project Costs BANGLADESH: Clean Air and Sustainable Environment (CASE)

1A Capacity Building for Air Quality Management 1A (i) Air Quality Cell (AQC) 1A (ii) Air quality monitoring, data analysis and reporting 1A (iii) Standards, Enforcement and Control for Emission Reduction

Total (incl cont.) Total (incl. cont.) (in USD ‘OOO)* (BDT lakh)** Component 1: Environment - DOE

8,549 5,856 4,3 15 2,956 3,659 2,506

575 394 1B Brick Kilns Emissions Management 4,938 I 3,383 1B (i) Institutional, legal and regulatory aspects 392 1 269

I DOE I 875 I 599 I

1B (ii) Introducing cleaner technologies and practices through demonstration

1C Communication Campaign and Analytical Studies 1C (i) Communication campaign

initiatives and technical services development 4,546 3,114

1,590 1,089 375 257

Sub-total 1 16,232 I 11,119 I

I C (ii) Analytical Studies (emission inventory, source apportionment,

1D Proiect Management, Coordination and Unallocated dispersion modeling, etc.) 1,212 830

1.155 791

2A (i) Physical intervention of traffic flow and pedestrian mobility

2A(i) b Sidewalks & ancillary road improvement 2A(i) c N M V M lane separation 2A(i) d one way streets 2A(i) e Foot over bridges 2A (i) f Traffic signals, intersection immovements and related initiatives

2A(i) a Campaigns for clean and safe mobility

1 2A(iii) Proiect Management I 1.155 1 791 1

37,272 25,531 110 75

36,980 25,331

1 sub- total I 39,299 I 26,920 ]

2A(i) g Parking strategy study 182 I 125 2A(ii) Institutional strengthening and regulatory review

sub- total 1 6,673 I 4,571 TOTAL I 62,200 I 42,610

872 I 597

Source of Funding World Bank / IDA (US$) Government of Bangladesh (In-Kind & Cash) (US$)***

* based on an exchange rate (I USDIBDT) =

** one lakh unit = 100 000 ‘**GOB in-kind and cash contribution include duties on importedgoods, salaries ofDOE, DCC and DTC regular s ta8 maintenance of air quality stations, vehicle, ofice space, maintenance of traf/ic signals, etc

62,200 9,050

Total Project Cost: 71,250 68 5

2B(i) Preparation o f Bus route network rationalization and franchising 2B(i) a BRT Feasibility Study 2B(i) b BRT Design Study 2B(i) c Public Transport Study

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4,225 2,894 1,175 805 2,054 1,407

996 682 2B(ii) Institutional strengthening and regulatory review 2b(ii) a Public Transport Adviser 2b( ii) b Traffic management coordination & capacity building 2B(iii) Proiect Management

1,729 1,184 769 527 960 658 719 493

Annex 6: Implementation Arrangements

BANGLADESH: Clean Air and Sustainable Environment Project (CASE)

The following institutional arrangements are agreed for the purpose o f project implementation:

- Project Oversight and Policy Direction - Project Coordination and Management - Project Implementation

To carry out the above functions the foIIowing Committees/Teams wi l l be set up:

- - - -

A Project Steering Committee (PSC) A Project Coordination Unit (PCU) Three Project Implementing Agencies (DOE, DCC, and DTCB) A Traffic Management Committee (TMC) and a Brick Advisory Committee (BAC)

The figure below shows the proposed project implementation arrangements.

EN VIKONMENI’ COMPONENT TRANSPORT COMPONENT

k i c k Advisory Committee

Implementation will be undertaken by three Project Implementing Agencies: two for the Transport Component as shown above (DCC and DTCB), and one for the Environment Component (DOE). Each would create a Project Implementing Unit (PIU) that wi l l be headed by a Project Director.

Given that MOEF i s the nodal ministry for the project, it will create Project Steering Committee (PSC) responsible for overall project oversight. The PSC wil l be chaired by the Secretary o f Ministry o f Environment and Forest (MOEF) and will include members from all three implementing agencies. For more regular project monitoring, MOEF will create a Project Coordination Unit (PCU) headed by a Project Coordinator who will be a Joint Secretary level staff of the MOEF. The PCU wil l have support staff and a monitoring and evaluation specialist. I t s office will serve as the secretariat to the PSC.

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At the more technical level, a Traffic Management Committee i s anchored at DTCB and a Brick Project Advisory Committee i s anchored at DOE and wil l be consulted as required by the project.

Project Steering Committee (PSC): The PSC wil l be chaired by the Secretary of MOEF. Secretariat support wi l l provided by the Project Coordination Unit (PCU) office at MOEF. The main responsibilities of the PSC are as follows:

- To meet once every quarter (unless exceptional circumstances demand otherwise) to review project implementation To provide oversight, policy guidance and approve the project’s annual work planand budget To facilitate inter-agency coordination so as to ensure compliance and adherence to the project development objectives To resolve disputes or conflicts related to the project, if any To endorse a l l changes in the project implementation arrangements To endorse any policy, regulatory, and institutional recommendations from the project

- -

- - -

The other members o f this committee wil l be senior officials from the RRD of MOC, LGD, MOHA, ERD, Finance Division, Planning Commission, IMED, BRTC, BRTA, DCC, DOE, DMP and DTCB. The Project Coordinator from MOEF (Joint Secretary) wi l l act as the member secretary o f the committee. Additional members wil l be co-opted as needed. Non-governmental organizations may also be invited as members.

Project Coordination Unit (PCU)

The PCU wil l be led by a Joint Secretary from the MOEF, and wil l operate under the overall guidance of the PSC. The main responsibilities o f the PCU wil l be as follows:

- To review the implementation of the project in a timely manner and in accordance with GOB and Bank requirements and agreed implementation plan To liase with Project Directors and report on funds flow and physical progress Undertake regular monitoring and evaluation and ensure overall quality o f the project Preparing standardized progress reports to monitor all technical, financial and administrative aspects of the project b

To ensure regular coordination and information sharing among the relevant ministries and agencies that wi l l have a role in project and implementation To proactively manage overall project r isks Keep the Bank informed o f implementation progress

- - -

-

- -

The Project Directors (PD) wil l have the following responsibilities: - The PDs wil l have full freedom to make decisions related to the project as well as financial

management decisions independently within the financial powers delegated to the PD under the “Delegation o f Financial Powers for Development Projects “ issued by GOB The PDs wil l have responsibility for ensuring compliance with the fiduciary requirements of GOB and Bank Approving the work plans and budgets to be submitted to the PCU and subsequent submission to higher authorities for approval Executing the activities approved by the PSC To ensure the provision of adequate and appropriate staffing for project execution at the implementing agency level To oversee the work o f the various consultants Approval o f the tender and proposal dossiers and calls for proposal dossiers and tender

-

-

- -

- -

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- Executing payments from the project account, ensuring that project activities are wel l coordinated and that necessary preconditions are met concerning post-project ownership, operation, maintenance and sustainability T o review the implementation o f project activities on a monthly basis and report to the PCU Informing the Project Coordinator o f any event which might jeopardize the success o f the project Setting up the necessary departmental technical committees (DTC) and overseeing their functioning

- - -

Project Implementation Units (DOE/AQC, DCC, and DTCB)

The project has three implementing agencies: (i) DOE, ii) DCC; and (iii) DTCB. Each would create a project implementation unit (PIU). The Project Director o f each agency will be appointed by the parent government body. The directors o f the PIUs wil l each have officers and staff appointed by the parent department to work in the PIU. Each P I U will hire full time support staff and contractual support staff for project implementation. The three implementing agencies will arrange for independent reviews o f implementation progress, coordinate monitoring, evaluation as wel l as impact assessment.

Additional responsibilities o f PIUs:

- - - - -

Implementation o f respective project components Reporting to the Project Coordinator periodically on implementation progress Accounting and financial management controls related to their respective project components Overseeing and managing the contracting o f consultants P I U at D T C B will be responsible for convening the Traffic Management Committee meeting and providing the secretariat services to the T M C P I U at D C C will be responsible for setting up a Departmental Technical Committee (DTC) in consultation with D T C B AQC at DOE will be responsible for convening the Br ick Project Advisory Committee meeting and providing the secretariat services to the B A C

-

-

Traffic Management Committee (TMC)

T M C wil l comprise o f a l l stakeholder related to urban transport. Other than government agencies, it may comprise o f academics / researchers, NGOs, women’s groups, transporters, and trade unions. It wil l be anchored at D T C B and will serve as the mechanism for information sharing and coordination o f activities between various agencies working on urban transport. Given the wide range o f activities under urban transport, need based sub-committees may be formed. The suggested scope o f work for T M C i s given below:

The T M C wil l not consider a l l minor traffic management schemes. D C C will be the main initiator o f traffic management proposals, while D T C B will present matters relating to public transport improvement. . T M C will be charged with preparing: (i) a “policy statement on road use”. This will determine the relative priority for the allocation

and occupation o f road space between motor vehicles, non-motorised vehicles (especially rickshaws), pedestrians, public transport vehicles and other users (utilities and other non- transport users). It wi l l provide a basis for T M C to determine proposals.

each o f the ensuing three years. This program will be drafted by D C C by June 30 o f each year and circulated to the agencies listed in s.6 o f the D T C B Act. In case o f a failure by T M C

(ii) an annual prioritized program for traffic management schemes, with estimated budget, for

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members to reach agreement by October 1, the program will be referred to the DTCB board for a ruling.

Any agency listed in Schedule. 6 of the DTCB Act may make a submission to TMC on a matter which it considers sufficiently important by drafting a paper. Agencies will be rewired to refer any proposal to TMC that: - - - -

-

- affects any street carrying any mode of fixed-route public transport; affects any street carrying rickshaws; involves a large-scale project which affects a wide area; affects any junction or street that i s the subject of a scheme proposed by STP, the CASE project or any other scheme supported by a donor agency; this includes any route that i s a candidate for BRT, bus priority or mass transit.

The Executive-Director DTCB ma3 determine from time to time, any other criteria that require a proposal to be referred to TMC.

Brick Advisory Committee (BAC)

The project will provide technical assistance to the newly established Brick Advisory Committee, and the existing Technical Committee for Brick Burning Act will be merged with this advisory committee. DOE will include required members from concerned government agencies, brick industry, and academics / researchers knowledgeable about the brick industry. This committee will oversee the revision of the Brick Burning Act, development and implementation of the long-term policy framework for the brick industry. The suggested specific responsibilities for BAC will include the following:

Provide technical review of the different technologies, emission standard, energy requirement etc. Review the technical reports o f the consultants and provide guidance to the consultants on brick sector assignments of CASE project Initiate the updating o f air quality standards and propose new standards Facilitate in developing a long-term framework for brick sector development in Bangladesh Review tax law, incensing procedure and Brick Burning Act and initiate their updates through consultations with stakeholders Facilitate the regional level consultation meetings with the local administration and brick entrepreneurs Support in implementing communications strategy for promotion of energy efficient clean brick making technology

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Annex 7: Financial Management and Disbursement Arrangements

BANGLADESH: Clean Air and Sustainable Environment (CASE)

1. A financial management (FM) assessment was carried out to evaluate the overall FM environment prevailing in the country and within the entities that will implement the project. More specifically, it aimed at assessing the financial management risks underlying the project, the capacities o f the implementing entities, the FM systems in place and at identifying the financial management arrangements under the proposed project that would need to be in place to meet the Bank’s fiduciary requirements in accordance with OP/BP 10.02

Country Financial Management Environment: GOB has been addressing key FM weaknesses in identified in the Country Financial Accountability Assessment (CFAA) conducted during 2000-0 1 through a series of reform programs supported by DFID, the Bank, and a few other development partners. However, due to the fragmented approach to Public Financial Management (PFM) reforms, improvement o f the P F M systems across the government agencies and institutions has been uneven. A jo in t Bank, DFID, and GOB Review of Institutional Arrangements for Public Expenditure, Financial Management, and Procurement completed in June 2005 concluded that Bangladesh’s public spending institutions would need to be significantly strengthened. The review that was carried out under the Public Expenditure and Financial Accountability (PEFA) Performance Measurement Framework also confirmed that the links in the public financial accountability chain in Bangladesh continue to be weak as reflected in the lack o f accounting information in line ministries, delays in the publication o f audit reports, unsatisfactory quality o f the external audit function and ineffective Parliamentary oversight o f the whole budgetary process.

2. PFM Reforms: GOB has taken several steps to improve i t s public FM and procurement systems and, while the overall direction o f change has been positive, the pace o f progress has been slower than anticipated. The recently approved GOB document on PFM Vision 8 Medium Term Rolling Action Plan that developed time-bound reform actions and remedial measures are designed to improve FM and accountability. Development partners have recently agreed with the Government to provide implementation support t o the P F M reforms through a multi donor trust fund to be administered by the Bank.

3. Efforts are also underway to tailor and apply the P F M measurement framework at the sector level and this would be an opportunity to undertake a diagnostic study o f the overall environment in the line ministries. The secretaries o f the l ine ministries are responsible for budget preparation and execution. They are accountable for propriety, compliance with the stipulated financial rules and regulations, and conformance with best practice guidance periodically provided by the Ministry o f Finance, such as, the Manual for Internal Control. MOF’s Controller General o f Accounts (CGA) i s responsible for providing Parliament with the annual accounts o f a l l government expenditures against budgetary appropriations. The line ministries do not prepare their entity financial statements nor do they have in-house FM capacity to facilitate budget executions and to exercise the requisite controls and oversight. The principle o f devolution o f financial accountability to line departments has been accepted and an action plan to further strengthen this area i s being prepared. A variety o f other measures including guidance for improving internal controls and audits has been issued for application across GOB. Taking a policy decision on the FM modality for the line ministries, including FM organization, has been identified as one o f the priority areas in the government-owned second generation reform that enjoys the donors’ support. This would provide an opportunity to look into the FM issues in MOEF and MOC systematically and to identify the strengthening measures as part o f the mainstream reforms that would be applicable to the implementing agencies - DOE and DTCB. The enhancement o f FM capacity in LGD is expected to be attained through the reforms that would enable it to strengthen i t s oversight o f DCC. Since D C C i s an urban local

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government institute, improvement in its FM environment would depend a lot on the pace o f local government fiscal reforms which i s very much in the cards albeit moving slowly.

4. Despite the weak overall country financial management environment, fiduciary risk in donor-funded projects has been greatly minimized due to the Government's policy o f stipulating additional and stricter arrangements for project implementation.

5. Implementing Agencies

The project will be implemented by three entities: Department o f Environment (DOE), Dhaka City Corporation (DCC), and Dhaka Transport Co-Ordination Board (DTCB). The FM assessment identified the strengths and weaknesses o f each agency and the actions required to address the weaknesses to establish adequate FM arrangements during project implementation. A br ief account o f the FM capacities o f the entities and assessment o f the underlying risks are presented below:

Department of Environment (DOE)

DOE, a department within the Ministry o f Environment and Forest (MOEF), has i t s head office in Dhaka and offices in al l divisional headquarters in Bangladesh. The FM function o f DOE i s mostly l imited to the disbursement o f pay and allowances and other departmental expenditures. An Accounts Officer (AO) in the Finance and Administration Department headed by a Deputy Director (Finance and Administration) performs routine accounting functions pertaining to the recurrent budget. Since, the A 0 does not have any experience or familiarity with Bank or Government-funded projects, the mainstreaming o f the project FM functions at the entity level i s a challenge. While DOE has been implementing the Bank funded AQMP through a Project Management Unit, which has an FM section headed by a Deputy Director, the latter i s unlikely to hold an FM position under the proposed project. Hence, the FM capacity attained through implementation o f AQMP will not be sustained. Given the capacity constraint, DOE has agreed to appoint an FM Specialist (FMS) with appropriate ski l ls and experience to effectively perform the disbursement and financial management functions pertaining to the project activities. The F M S services wil l be financed out o f the project funds and the process o f procuring the F M S is subject to prior review by the Bank. The Bank and DOE agreed on the TOR for the FMS and on the publication o f the EO1 by June 30,2008 so that a candidate would be selected by project negotiations.

Dhaka City Corporation (DCQ

D C C is a local government institution under the Local Government Div is ion (LGD) o f Ministry o f Local Government, Rural Development and Cooperatives (MLGRD&C). Headed by the Ci ty Mayor, D C C monitors and guides i t s work program through i t s eight standing and other committees. Within the administrative hierarchy, the Chief Executive Officer, who ranks next t o the Ci ty Mayor is assisted by the Secretary. The heads o f departments and executive officers for the ten zonal offices with nearly 1 1,000 employees assist the Mayor in conducting the day-to-day activities o f the Corporation.

The finance and accounts department is responsible for carrying out the FM functions o f the Corporation and i s headed by a Chief Accounts Officer with support f rom a Deputy Chief Accounts Officer. Fifty seven staff and officers in the head office and forty in the ten zonal offices comprise the entire department. The Chief Accounts Officer is a professionally qualified cost and management accountant. All finance and accounts staff, mostly commerce .graduates, are permanent employees o f the entity and are experienced in accounting and financial management. The duties and responsibilities, lines o f supervision and limits to the authority o f a l l personnel are written and clearly defined in the Accounts and Administrative Manual.

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In line with the Government Accounting Rules and Procedures, D C C follows cash based accounting i.e. revenues and expenditures are recognized when received and paid and not when earned or incurred. The accounting system o f a public entity that i s primarily designed to record i t s financial transactions on the basis o f GOB’S chart o f accounts would not readily capture project expenditures by project components. Proper controls in relation to the processing and approval o f transactions are in place. All accounting and supporting documents are retained for a minimum o f twenty years. Access to these documents i s strictly controlled. The entity has an accounting manual prepared by a team o f consultants in 1995. Accounts are s t i l l prepared manually and progress with computerizing the accounting system has been disjointed and slow. Currently, only payroll transactions are processed by computer. The lack o f a computerized accounting system affects the accuracy and timeliness o f financial information.

In addition to the routine accounting functions for DCC, the Accounts Department has also been discharging the FM functions for some projects funded by donors such as, DFID and JICA, but not the Bank. However, DCC i s implementing DUTP previously funded by IDA through a Project Management Cel l (PMC) that includes four accounting staff. The P M C i s s t i l l implementing the remaining activities o f DUTP that are funded entirely by GOB.

The preparation o f DCC’s annual budget entails the formulation o f physical and financial targets. The inputs provided by the department are scrutinized and consolidated into a draft budget. Af ter the Ci ty Mayor’s clearance, the budget i s placed before the Ci ty Council for i t s approval. Fol lowing the Council’s approval, a copy o f the budget i s sent t o the Government. Budget variances are captured and incorporated into the revised annual budget.

The internal audit department that directly reports to the Chief Executive Officer is responsible for checking and verifying financial transactions. The department i s not equipped to evaluate the adequacies o f organizational systems and internal controls o f the various aspects o f DCC’s operations. The external audit i s undertaken by the Local and Revenue Audit Directorate o f the Comptroller and Auditor General (C&AG). A donor-funded project o f the entity i s however subject to audit by the Foreign Aided Project Audit Directorate (FAPAD) o f the C&AG. The findings and recommendations o f the audit reports are discussed and finalized at an exit meeting. Responses o n any issues raised in the audit reports are required to be submitted to the Audit Directorates by the entity directly or through the ministry depending on the level o f irregularities identified by the auditors on the basis o f the seriousness o f the issues.

D C C has a manual assets recording system in operation. Subsidiary records o f f ixed assets and stock are maintained, updated and reconciled with control accounts. An inventory o f f ixed assets and stocks i s conducted annually. An adequate asset management system has yet to be put in place for ensuring that assets are used judiciously. Out o f the assets owned by DCC, only vehicles are insured.

D C C needs to improve i t s processes and systems for collection, deposit and accounting o f i t s revenue. Controls for revenues collected in cash are weak. Accounting for receivables i s also inefficient.

Dhaka Transport Co-Ordination Board (DTCB)

The Dhaka Transport Co-ordination Board (DTCB) was established under the Dhaka Transport Co- ordination Board Act o f 2001 with a mandate to perform the coordinating functions for the transport sector in Dhaka. An Executive Director heads the management o f D T C B under the overall guidance o f a 32 members Governing Board headed by the City Mayor. In recent years, this entity was downsized due to financial constraints. D T C B has been revitalized with the recent approval o f a new organizational structure that provides for adequate staff needed to carry out i t s mandate. Currently, D T C B does not have any key FM staff in place. The positions o f the Finance and Accounts Officer (FAO) and other accounting staff under the Additional Executive Director, as included in the newly approved organizational chart, are

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mandated to carry out DTCB’s FM functions. The recruitment for these positions has been delayed due to slow decision making. Since appropriate FM staff should be in place before project implementation begins, the appointment o f the FA0 should take place by project effectiveness. DTCB’s annual budget i s approved by the Ministry o f Finance at the recommendation o f the RRD o f MOC. Funds against the approved budget are released quarterly and transferred to DTCB’s bank account. The Executive Director and the FA0 would be the jo in t signatories for withdrawals o f funds to meet DTCB’s expenditures. D T C B does not prepare its own financial statements but it provides periodic reports to the line ministry, MOF and other Government agencies. D T C B does not have an internal audit unit and i t s external audit i s carried out by a directorate o f the office o f the C&AG. Although D T C B implemented a component of the Bank-funded DUTP, the financial management capacity that had been achieved has not been sustained because the already trained and qualified FM staff members were not retained.

Risk

Inherent Risk Country Level PFM institution and system lack capacity for detecting financial irregularities in a timely manner, including taking corrective actions. Entity IWel- DOE

6. Risk Analysis and Mitigation:

Initial Risk Mitigation FM Risk FM after Risk Mitigation

Rating

H H , Various reforms on country level PFM ongoing and more are planned under the donor supported PFM Improvement Program but those are unlikely to have any impact in short te rm

H H

The initial overall project FM risk i s rated as “Substantial”. This i s mainly due to the following:

weak FM capacities in DOE and DTCB; lack o f adequate capacity; organizational culture and arrangement in D C C that do not encourage the entity FM unit to undertake the responsibilities o f project FM; weaknesses in internal controls; lack o f computerized project accounting systems to ensure timeliness and accuracy o f financial reporting; slow decision-making in appointing or replacing FM staff; inability t o sustain FM capacity gained through implementing past Bank funded projects; in some cases practice o f using vehicles designated for project use by the l ine ministries for other purposes; practice o f allowing government officials to attend overseas training in courses that are irrelevant t o their responsibilities; the risk that audit reports do not capture the accountability and corruption issues adequately; arbitrary slashing by the Planning Commission o f a project’s budgetary allocations; delays in releasing GOB’S share o f project funds; and delays occurring in obtaining authorization for use o f Designated Accounts.

In view o f the implementing agencies’ commitment and the agreement reached on carrying out mitigating measures with a time-bound FM Action Plan, the residual r isks may be reduced for some risk elements as shown in the following table. The mitigation measures effectively have reduced the ratings o f four risk elements while, for others, the residual risks are unchanged because the efficacy o f some o f the mitigation measures can be assessed only during implementation. Hence the residual overall project FM risk is assessed to be “Substantial”.

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R i s k

- DTCB - DCC

Project level Inadequate FM capacities and multiple imdementing agencies Overa l l Inherent R i s k I H Con t ro l Risk Budget

I n i t i a l FM Risk

Ra t ing H S S

N o n Observance o f a structured and participatory budgeting process by the implementing agencies especially, DOE and DTCB, might not produce an adequate and realistic budget

In some case, slashing by planning commission/ ERD, without adequate proper consultation o f genuine budget requirement under Project Aid (PA) despite the IDA financing arrangements.

Delay in having appropriate FM staff in DOE and DTCB in place and absence o f Computerized Accounting System (CAS) in al l implementing agencies might affect the accuracy and timeliness o f project financial information.

Accounting

Lengthy approvals at various tiers in the government may lead to delay in project implementation

S

S

Mult iple tiers o f checks and counter- checks o f the payment processing and approval function l ikely to impact on project financial progress. Funds F l o w

opening o f a Designated Account with a bank without adequate capacity in

Implementation may suffer due to the S

In te rna l Con t ro l Absence o f adequate internal controls, segregation o f duties and dom'ination o f informal decision-making that break the chain o f authorities might affect financial governance o f the project.

S

R i s k M i t i ga t i on

The F M S for each component wil l prepare the project's budget with the assistance o f respective accounting staff and in consultation with the other sections o f the P I U under a structured budget preparation process.

The implementing agencies and the concerned ministries wil l explore ways to improve timeliness in scrutinizing and approving process by authorities beyond their respective boundaries

The P C U will approach EFWPlanning Commission t o agree that the project's proposed allocation in ADP/RADP under PA is not reduced since IDA fimding has no annual ceilings under the approved credit.

FMSs to be recruited for each component wi l l be required to assist early procurement and implementation o f the CAS. M S excel based system wil l be used until a computerized system i s functional. Technical Assistance for the PIUs wil l include their financial capacity bui lding focusing o n strengthening accounting and financial reporting.

The FM manual for the project that would be developed would lay down the segregation'of duties and define the responsibilities for and the steps required to process financial transactions

Payments processing and approval tiers for the project transactions wil l be simplif ied while ensuring segregation o f duties o f the project's FM function.

The Project Directors w i l l identify the banks with appropriate capacities and ensure that FM staff undertake due diligence during preparation o f

FM Risk af ter

Mi t igat ion

M

M

S

M

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Risk

With respect to the Designated Accounts, there may be a possible leakage o f funds to be handled by the implementing agencies

Financial Reporting Reporting project expenditures by project components as part o f IFRs may be constrained until an appropriately customized CAS i s functional.

Audit The audit reports might not capture accountability and governance issues adequately. The impact o f audits may be compromised due to the failure to disseminate audit reports and to address audit issues properly.

Overall control Risk Overall Initial Project FM Risk

Initial Risk Mitigation I E 1

Adequate payment controls wi l l be instituted before funds are disbursed. Implementation supervision missions wi l l undertake sample checks and desk reviews o f IFRs wi l l examine for inconsistencies in use o f project funds.

F M staff wi l l use spreadsheets to produce IFRs until a computerized system in place. F M staff wi l l be oriented with and trained in the IFRs.

The format and contents o f IFRs have been designed and harmonized with the Government’s accounting system.

A Statement o f Audit Needs (SAN) wi l l be agreed with the C&AG extending the audit focus on testing controls to prevent corruption and detect transactions with corrupt practices. Audit reports wi l l be posted in the project’s website to be established for the project and a project audit committee wi l l review the audit findings and follow up on the latter. C&AG wi l l carry out the financial audits o f the project. In addition, the project wi l l carry out operational audits throughout the project period to be conducted by a qualified private fm.

S

H

S

S Residual Risk

place, irregular submissions o f replenishment claims and delays in obtaining MoF’s authorization.

replenishment claims and authorization requests. The concerned ministries wil l make quick endorsement and follow up as required for MOF’s accelerated action.

FM Risk after

Mitigation

S

S

S S

7. Project Financial Management

The assessed project financial management arrangement, with the implementation o f the measures in the agreed action plan will be adequate to meet the project’s FM requirements on compliance with the Bank’s OPBP 10.02. Implementation o f longer term actions that will not be completed by appraisal will need to be fully resolved during the post-appraisal mission and before project negotiations. The agreed financial management arrangements are stated below.

8. Staffing

The borrower’s ability t o successfully implement a project and comply with fiduciary requirements depends on the adequacy and quality o f the financial management systems used during the project implementation and continuity o f adequate, qualified and experienced FM staff. The implementing agencies are committed to having the required arrangements in place throughout the duration o f the project. The following table provides the staffing requirements and the arrangements agreed to by the implementing agencies

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Implementing agency/ FM position DOE 1. Financial Management Specialist (FMS)

2. Accounts Officer

1. Financial Management Specialist - (FMS) for transport component to serve both DCC and DTCB

2. Accounts Officers (2)

DTCB 1. Accounts Officer

Status of staffing

TOR agreed. REO1 published on Dec 7,2008

TOR agreed

TOR agreed REO1 published on Sep 7,2008

TOR agreed

Action to be taken

Candidate appointed by project effectiveness.

To be appointed

Candidate appointed from project effectiveness.

To be appointed

To be appointed

By when?

One month after signing the FA

Three months after project effectiveness

One month after signing the FA

Three months after project effectiveness

Three months from project effectiveness

9. Budgeting

The project budgets wi l l be prepared by the Project Directors with the assistance o f the project FM staff on the basis o f approved procurement and implementation plans. DOE, D C C and D T C B will submit annual original and revised budget proposals to the planning wing o f their respective ministries to obtain the Planning Commission’s approval under the Annual Development Plan (ADP) and the Revised ADP for overall allocation in favor o f MOEF. The PDs will undertake due diligence in preparing realistic budgets to ensure that the project implementation is not hindered by budgetary constraints while taking care that only the resources needed for targeted progress i s budgeted. Budgets will be prepared using the M S Excel based accounting system that would be in place until a computerized accounting system i s adopted and operational. Actual expenditures for the project will be measured against budgets for each quarter; budget variances and their rationale will be reported and discussed in the Interim Financial Reports (IFRs).

10. Fund Flows and Designated Accounts

IDA funds for the project wi l l f low through segregated Designated Accounts (DA) in commercial bank(s) for DCC, DTCB and DOE to be opened as convertible taka accounts. The eligible expenditures for the - PCU would be met through the DA o f the DOE and the FM consultant for DOE would assist the P C U in FM related tasks. Project funds will also f low through direct payments and issuance o f special commitments as and when required. The authorized limit for each DA will be decided on the basis o f the projected disbursements breakdown provided in the project appraisal document (PAD). The minimum application size for direct payments will be set at 20% of outstanding amounts in the respective DAs. The FMS who wil l be appointed for each component will have to be experienced in or build up experience with Bank disbursement and financial management procedures and operation of designated accounts. The F M S and other accounting staff will receive training on Bank procedures.

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11. Disbursement

Category Amount o f the

For Component 1 of the project to be implemented by DOE

Tot! us: in Credit Allocated (in SDR)** million

(a) Goods( Net o f Import Duties), Works and Consultants’ Services including Training, Seminar and Studies 15.93 10,800,000

(b) Incremental Operating Costs (for DOE and PCU) 0.30 210,000

IDA’S share o f the project cost wi l l be disbursed in accordance with transaction-based Bank disbursement procedures initially. IDA wil l require full documentation where contracts for: (i) goods which exceed US$300,000 ; (ii) works which exceed US$500,000; (iii) consulting firms which exceed US$lOO,OOO; and (iv) individual consultants which exceed US$50,000. Expenditures below the above threshold levels will be claimed through Statement o f Expenditures (SOEs). After the mid-term review, disbursements may be made on the basis o f Interim Un-audited Financial Reports (IFRs) if the borrower so prefers and IDA determines that the project financial management system i s working satisfactorily and i s generating acceptable, timely, reliable and complete IFRs.

Yo o f Expenditures to

be financed 100%

The disbursement o f IDA funds will be made under the expenditure categories shown in the fol lowing table.

For Component 2 A of the project to be implemented by DCC

.Allocation o f IDA Credit Proceeds

16.23 I1,010, 000

100% (a) Goods( Net o f Import Duties), Works and Consultants’ Services

including Training, Seminar and Studies 39.03 26,460,000

(b) Incremental Operating Costs 0.27 190,000 1 39.30 I 26.650.000 I I

For Component 2 B of the project to be implemented by DTCB

(a) Goods, Works and Consultants’ Services including Training, Seminar and Studies

(b) Incremental Operating Costs

100%

6.60 4,490,000

0.07 50,000

Total

“Incremental Operating Costs” means: (a) expenditures incurred by DCC, DOE, D T C B and PCU on account o f the operation and maintenance o f facilities, equipment and vehicles used for Project implementation (including, without limitation, office rental, vehicle rental, fuel, routine repair and maintenance o f equipment, vehicles and office premises, communication costs, use o f internet costs, stationeries and other office supplies, and costs o f translation, printing, photocopying and advertising); (b) transportation costs and subsistence allowances for staff on field visit; (c) bank charges; and (d) salaries and allowances o f incremental staff assigned for Project implementation, but excluding salaries o f the Recipient’s c iv i l servants, and regular staff o f DCC, DOE, D T C B and PCU.

6.67 4,540,000 62.20 42,200,000

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A breakdown o f share o f project costs financing between IDA and the Government i s provided in the table below:

For Component 2 B the project to be implemented by DTCB Goods, Works and Consultants' Services including Training, Seminar and Studies Project Management Cost except expenditures defined in (i) below (i) salaries and related other expenditures o f DTCB regular staff

Percentage of Project Cost Financing and Allocation of I D A Credit Proceeds*

6.08 6.08 100%

0.59 0.59 100%

0.37 0.32 0.05

Serial Number

7.04 71.25

Sub Total for DTCB Total

1

l a

0.32 0.05 6.67 5.83 3.22 62.20

l b

I C

2

2a

2b

2c

2d

3

3a

3b

*

Description Total

million Financing

kind Million

Sub Total For DCC I 43.66 I 2.03 I 2.33 I 39.30 I

gures may not add up due to rounding

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12. Accounting and Reporting

The project wi l l follow GOB’S Project Accounting Manual in maintaining books o f accounts and in complying with monthly, quarterly and annual financial reporting requirements o f various government agencies as well as those o f the Bank. Until a computerized accounting system i s introduced, excel-based accounting tools will be used in the project, using GOB code o f accounts and project components. Manual registers will be used to adequately record acquisition and use o f all project fixed assets. Physical inventory at the end o f each financial year will provide updated status on the usable condition and safe custody o f the assets. The Government i s working on computerizing i ts Project Accounting Manual with the objective o f providing universal software to all development projects. This project’s accounting system will promptly adopt such a universal system when it i s ready. DCC, DTCB and DOE will provide interim un-audited financial reports (IUFRs) on a quarterly basis, within 45 days o f each quarter, showing project progress on all components in a user-friendly format. The contents and format o f IUFRs have been discussed during appraisal and will be finalized during negotiations.

13. Internal and Operational Audits

With the lack o f in-house capacity for conducting internal audits within DTCB and DOE and appropriate staffing o f DCC’s internal audit unit, the project wil l undertake an internal audit o f each component annually by outsourcing the function to accounting f i rms under TORS agreed with the Bank. The annual audit will examine the physical and financial aspects o f project implementation and provide continuous feedback to project management on any control weaknesses and issues requiring management’s attention.

The project wi l l also have two operational audits over the project l i f e -the f i r s t one as part o f the mid- term review and the other at the end o f the fourth year o f the project’s implementation - with coverage o f all project activities and transactions until the project’s closing date. The scope o f the operational audits would be comprehensive and would include a review o f financial transactions and o f the efficacy o f internal control arrangements as well as an evaluation o f project performance against the project objectives. Due to the wider scope o f the operational audit, there would be no separate internal audits conducted for those two years during which operational audits are undertaken.

14. External Audit

The annual external audit o f the project will be carried out by the Foreign Aided Project Audit Directorate (FAPAD), the designated unit o f the CAG with the mandate to audit all donor- financed projects in Bangladesh. The audit will be completed within six months o f the close o f the financial year and a report submitted to the Bank. The International Standards on Auditing (ISA) and INTOSAI standards on ethics w i l l be used in carrying out the audit. A Statement o f Audit Needs (SAN) will be agreed with the C&AG that the audit also covers testing anti-corruption controls and detecting transactions with corrupt practices. As the annual project financial statements should reflect the transactions and balances associated with the Designated Accounts and SOEs, the audit opinion on financial statements will not be required to make specific references to them. However, the SAN will specify the need for the audit to include test checks on SOEs.

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The following audit reports will be monitored in the Audit Report Compliance System:

Implementing Agency

DCC

DTCB

Audit Type Auditor Deadline

Project’s annual fmancial statements Foreign Aided Project December 3 1 Audit Directorate under C&AG

Project’s annual financial statements Foreign Aided Project December 3 1 Audit Directorate under C&AG

DOE

There are no overdue audit reports from the above agencies. There are a number o f outstanding audit objections on AQMP implemented by DOE and on DUTP implemented by D C C and DTCB. The agencies will submit action plans for resolving al l outstanding objections.

Project’s annual financial statements Foreign Aided Project December 3 1. Audit Directorate under C&AG General

15. Project Website and Financial Disclosure:

To ensure the transparency o f project management and use o f project funds, a project website will be developed in the f i rst year o f the project. The Project Coordinator and the Project Directors will ensure that al l relevant financial information covering the project components are posted on the website o n a regular basis. T o enhance the impact o f the audits, all audit reports and actions on audit issues should also be disclosed in the website.

16. Project Audit Committee

To ensure that the audit reports generated by the external, internal and operational audits o f the project have met the TORS, the reports are reviewed and audit recommendations are followed up, a Project Audit Committee (PAC) will be set up with the Project Coordinator as the Chair and al l three Project Directors as members. The concerned wings overseeing audit matters in the Road and Railway Division o f Ministry o f Communications and the Local Government Division would comprise the other members o f the PAC. The PAC will work as an extended arm o f the Project Steering Committee and it will meet at least twice a year.

17. Supervision Plan

FM supervision will be undertaken three times in the f i rs t year o f implementation and once every six months thereafter. The init ial supervision will focus on the compliance with al l agreed actions, terms, and conditions including the appointment o f the project FM staff, identification o f any FM or disbursement issues related to project implementation and agreement on redress measures. DCC, D T C B and DOE’S readiness to gain access to project funds, use o f appropriate accounting systems for project financial management, t imely production o f the initial IFRs and the application o f internal controls on the FM functions will be closely reviewed. In addition, supervision efforts wil l focus on sampling expenditures below prior-review thresholds, reviewing payment processes against the defined control framework, and monitoring the progress o f institutional preparedness and strengthening.

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Overall financial management arrangements for the project are considered to be adequate as long as the FM staffing and training requirements are complied with. With appropriate measures taken, as listed in the action plan below, the project will have a financial management system which will be adequate for all resources and expenditures. To ensure acceptable FM arrangement at project launch and to comply with the Bank’s prerequisites €or project negotiations, the following actions have been agreed with the implementing agencies in addition to action plan on staffing as included in paragraph 8 ofthis annex.

A c l i m Submission o f action plan to resolve outstanding audit objections on AQMP and DUTP

Taking measures to resolve outstanding audits objections

To appoint special committee to resolve outstanding audits objections

DOE/DCC/DTCB

DCC

~ o ~ ~ ~ e ~ i Q ~ Date For AQMP

For DUTP

ongoing

~ Q ~ d i E i Q ~ ~ Submitted on Feb 23,2009 Submitted on Feb 18,2009

A schematic diagram showing the fund flows as well as the (progress and financial) reporting arrangements for the project i s given below:

A schematic diagrams showing the funds flow and (progress and financial) reporting arrangements for the project are given below:

a

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Annex 8: Procurement Arrangements

BANGLADESH: Clean Air and Sustainable Environment (CASE)

A. GENERAL

1. Overview: The project i s US$71.25 mi l l ion o f which the IDA credit will finance US$62.20 mi l l ion and GOB wil l finance US$9.05 mi l l ion (in kind and cash). The total procurement o f US$59.21 mi l l ion under the project will largely involve works o f US$33.96 million, followed by consulting services o f US$17.92 and goods o f US$7.33

The procurement under the proposed project would be carried out in accordance with the Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated M a y 2004 revised October 2006 and "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" dated M a y 2004 revised October 2006, as wel l as the provisions stipulated in the Legal Agreement. Within the overall context o f Bank guidelines, the local procurement o f goods, works, and services (for which the shortlists are expected to be entirely comprised o f national consultants) will fo l low the Government's Public Procurement Ac t (PPA) 2006 (applicable to goods: < US$300,000 per contract, works: < US$4,000,000 per contract, and consulting services- f i r m s : < US$200,000 per contract and individual consultant- < US$50,000 per contract). In case o f any conflicts between the Bank and GOB procedures or ambiguous interpretations, the Bank guidelines will prevail.

All expected major procurement o f goods and consultants' services has announced in the General Procurement Notice (GPN), published in the dgMarket and United Nations Development Business (UNDB).

2. Procurement Components and Responsibility: The project will have two components: (i) environment and (ii) transport. Component (i) wil l be implemented by DOE and Component (ii) will be implemented by D C C and DTCB.

3. Procurement Environment Reform Actions: The Country Procurement Assessment Report (CPAR) broadly accepted by the Government in February 200 1 identified inadequate public procurement practices as major impediments to project implementation. The procurement deficiencies include: absence o f a sound legal framework; protracted bureaucratic procedures allowing multi-point rent seeking; lack o f critical mass o f professionals to manage public procurement; inordinate delays in completing the procurement process; ineffective contract administration; and absence o f mechanisms for ensuring transparency and accountability in public procurement.

T o carry out the procurement reform that followed the CPAR recommendations, the Government has implemented a Bank-supported Public Procurement Reform Project (PPAP) which closed in September 2007. A s part o f the reform under PPAP, the Government has established the Central Procurement Technical Unit (CPTU) within the Implementation Monitoring and Evaluation Div is ion (IMED) o f the Ministry o f Planning with staffing funded from own resources. The Government has approved and issued Public Procurement Act (PPA) 2006, and has also issued Public Procurement Rules (PPR) 2008 with associated implementation procedures, including streamlined procurement approval process, delegation of financial powers, and standard set o f documents for procurement o f goods, works and services. The PPA and the PPR have been made effective f rom January 3 1,2008. The PPA and the PPR contain most o f good international practices including: (i) non-discrimination o f bidders; (ii) effective and wide advertising o f procurement opportunities; (iii) public opening o f bids in one place; (iv) disclosure o f award o f a l l contracts above specified threshold in the CPTU's website; (v) clear accountability for delegation and decision making; (vi) annual post procurement audit (review); (vii) sanctions for fraudulent and corrupt practice; and (viii) review mechanism for handling bidders protests. In order to

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build procurement management capacity, CPTU, in collaboration with ILO and local institutes, has developed a critical mass o f 25 national trainers and provided training to about 1800 staff o f different public sector agencies up to September, 2007.

The procurement regulations are being implemented by a l l public sector entities with varying degrees and a l l the public sector entities are required to fo l low the new rules. Public procurement has been reshaped in the last several years due to the procurement reform that include harmonized procedures. The new rules have also increased awareness among the stakeholders (such as the procuring entities, bidding community) by building confidence. However, there are sti l l potential challenges concerning the implementation o f the Act/rules including: inadequate enforcement o f rules and delegated financial powers; inadequate adherence to the provision o f streamlined procurement approval process; delays in contract award for large value contracts; ineffective contract administration; allegations o f irregularities; and unnecessary interference. To sustain the reform, the Government launched a follow-on project, Public Procurement Reform Project I1 (PPRP 11) in September, 2007 that, among others, focuses largely on implementation and monitoring at key sectoral agencies, capacity development, monitoring, and management o f procurement reforms, introduction o f electronic government procurement (e-GP), and behavioral change and social accountability.

4. Procurement Capacity and Risk Assessment: A procurement capacity assessment o f DOE, D C C and D T C B was carried out with a view to: evaluate the capability o f the implementing agencies and o f the adequacy of systems in place to administer Bank-financed procurement and to assess the r isks that may negatively affect ability o f the agency to carry out the procurement process. DOE was the implementing agency o f the previous “AQMP” and it has adequate knowledge o f Bank guidelines and procedures related to project implementation. DCC and D T C B were the implementing agencies o f “DUTP”. However, a l l three agencies have considerable weaknesses in terms o f internal controls, award delays, transparency, management o f the procurement process, and handling complaints. In order to safeguard against this and that general conditions for public procurement in the country, the project i s rated “high r i sk ” from the procurement operation and contract administration viewpoint. In order to minimize the risk, several measures including a procurement risk mitigation framework have been introduced.

5. Measures for Improving Governance in Procurement: Several measures have been introduced and agreed with the Government toward improving governance in procurement and minimizing procurement risks under the project. The five main pillars o f the risk mitigation framework are: (i) appointment o f procurement consultants; (ii) appointment o f a design and supervision consultant t o assist the relevant bid evaluation committee (iii) system o f handling complaints; (iv) procurement website; (v) introducing a procurement risk mitigation plan (PRMP) with a set o f performance indicators as described in paragraph 10 below to monitor procurement performance through reports submitted to IDA on a quarterly basis.

6. Appointment o f Procurement Consultants: There wil l be two procurement consultants: one for DOE and project coordination unit at MOEF and another jo int ly for D C C and DTCB. The procurement consultants will help the respective implementing agencies with preparing procurement plans, bidding documents / proposals, bid / proposal evaluations and contract management. The procurement consultants o f the respective implementing agencies will assist the bid evaluation committees which wil l be formed in accordance with PPA.

7. Design and Supervision Consultant: To implement the transport component, D C C will appoint a firm as the design and supervision consultant. The consulting firm will assist the bid evaluation committee for al l c iv i l works contract o f DCC.

8. System for Handling Complaints: A credible system for handling complaints will be put in place in DOE, D C C and DTCB. The salient features o f the system will be an oversight o f a complaint database, a

77

standard protocol with appropriate triggers for carrying out investigations, and actions taken against involved parties. The system wil l be developed and managed by the implementing agencies. It wi l l be supported by a database containing information about al l procurement steps such as, official estimates (global unit prices), al l bidders (individuals, companies, joint ventures, owners information, etc.), and al l bids. In this regard, DOE, DCC and DTCB wil l explore the use o f the CPTU’s MIS database for procurement monitoring and linked to DOE, DCC and DTCB’s system, if possible. For ICB/international selection of consultants and all contracts above US$100,000, the Bank’s prescribed complaint redress mechanism wil l apply.

9. Disclosure o f Information and Procurement Website: Al l information relating to bidding and procurement above the specified thresholds, as per PPR wi l l be published in CPTU’s website in addition to the implementing agencies websites. The information, among others, wi l l include: invitation to bid, bid documents and RFPs( wherever applicable); latest information on procurement plan/contracts; status of evaluation once completed; contract award information including adequate details; and information covering the poor performance of contractors, suppliers and consultants, including l i s t o f debarred f i rms. The website would be accessible to al l bidders and interested persons equally and free o f charge.

In addition, the following additional steps wil l be followed as part o f procurement and implementation:

Alerting agencies’ officials/stafl: In accordance with the PPA and the Bank guidelines, the relevant agencies wil l issue an alert letter notifying staff about the possible consequences af corrupt procurement practices and similar behavior and the actions to be taken against the officialdstaff who are found to be involved in such practices.

Alert bidders: In pre-bid meetings, agencies wil l alert al l bidders on the consequences of corrupt practices (fraud and corruption, collusion, coercion, etc.) including the debarring of contractors.

Multiple dropping: The multiple dropping of bids (bids submitted in more than one location) wi l l not be permissible for a l l procurement under the Bank financed project.

Timeliness of bid evaluation and contract award: In accordance with the PPA, the implementing agencies wil l ensure the awarding of contracts within the initial bid validity period, and closely monitor the timing. The Bank may not finance contracts which are not awarded within the period of bid validity.

Action for corruptpractices (bidders and GOB staffi: In cases where collusion has been established, the agencies wil l initiate actions, including the debarring of contractors/suppliers and actions taken against responsible GOB staff (if applicable), as appropriate in accordance with PPA and Bank guidelines.

Filing and record-keeping: The agencies wil l preserve records and a l l documents regarding their public procurement, in accordance with the PPA provisions.

Publication of award of contract in websites: For ICB and large value consultancy contracts including direct contracting and sole source selection of consultants, the implementing agencies wil l publish contract award information in dgMarket/ UNDB online within two weeks o f contract award; this i s in addition to CPTU’s and agencies’ websites.

Late payments and liquidated damages: The implementing agencies wil l ensure the timely payment o f bills of the suppliers/contractors/consultants and the imposition o f liquidated damages for delayed completion specified in the relevant contracts.

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(ix) Oversight by Project Director: Each agency’s PD wi l l provide the oversight function for procurement and provide the Bank quarterly reports identifying any procurement deficiencies including measurement o f procurement performance using the indicators.

NCB conditions to be added: Bids should be submitted and opened in public in one location immediately after the deadline for submission.

(x)

Procurement steps I subjects Publication of invitation for bid

Receipt and evaluation of bid

Contract awarding

Delivery within the original schedule

10. Procurement Performance Indicators: procurement performance indicators.

The agencies will prepare reports on the following

Indicators Percentage of invitations for bid published in the CPTU website in accordance with the PPA.

0 Average number of bidders purchased bidding documents. Average number of bidders submitted bid. Average number of days between receiving bids and completion o f evaluation. Percentage of contracts required extension of bid validity.

Average number o f days taken between submission o f bid evaluation report and the approval of contract for different financial delegation as per PPA.

0 Percentage of contract awards information published in CPTU’s website as per PPA.

Percentage o f contracts completed within the original deadline as stated in contract. Percentage of contracts had liquidated damaged imposed.

SL 1 -

Procurement Training

2

Ratio of staff get procurement training and number of staffs planned for procurement training.

3

4

- 5

- 6

Payments Average number of days taken for release payment. 0 Percentage of contracts where payments were not made as per

contract. 0 Percentage of contracts where interest for delayed payment was

made.

11. Other Actions: Other actions are required during implementation to ensure procurement governance:

(a) A project coordination unit will be formed at the MOEF, headed by a project coordinator. The implementing agencies will prepare an activity f low chart for all prior review contracts, reports on progress with respective procurement risk mitigation action plans and procurement performance indicators and will forward the reports to IDA for information. There wi l l be quarterly follow-up meetings between the coordination unit and IDA. The agencies will provide quarterly updates o f the activity chart and procurement reports. IDA and coordination unit will closeIy monitor the reports, especially during follow-up meetings. By April 2009, DOE, DCC and DTCB will submit two year training plans for all concerned procurement staff. The PPRP I1 has adequate provisions for standard training programs.

(b)

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Compliance with the above arrangements will ensure that the procurement under the project i s likely to be effective and transparent and result in smooth implementation of the project. However, procurement process and implementation of the contracts would be reviewed every six months by the Bank, and adjustments or corrections wil l be made, as appropriate.

B. PROCUREMENT ARRANGEMENT

12. Procurement of Works: The procurement will be done using the Bank’s standard bidding documents (SBD) for al l ICB and followed by NCB using PPA.

(i) International Competitive Bidding (ICB). Civil works contracts estimated to cost more than US$4.0 million equivalent per contract may be procured using ICB. This method wil l cover contracts related to the construction o f one-way streets, sidewalks, foot over bridges and central lab for DOE.

(ii) National Competitive Bidding - NCB: Civil works contracts estimated to cost less than US$4.0 million equivalent per contract may be procured using NCB. This method wil l cover contracts related to the one-way streets, sidewalks, foot over bridges and others.

13. Procurement of Goods: The procurement of goods wil l be conducted using the Bank’s standard bidding document (SBD) for all ICB, followed by NCB and national shopping for small value contracts.

(i)

(ii)

(iii)

(W

ICB: Goods and equipment contracts estimated to cost US$300,000 equivalent or more per contract wi l l be procured using ICB. This method wil l cover contracts for CAMS, traffic signals, enforcement monitoring equipments and others. NCB: Goods and equipment contracts estimated to cost less than US$300,000 equivalent per contract may be procured using NCB. This method wil l cover the contracts for vehicles, computers, office equipments, air conditioners and others. National Shopping - NS: Goods with very small value contracts or individual purchases of off-the-shelf items may be procured through PPA shopping procedures (request for quotation method). Direct Contracting - DC: Computer software, books, journals and training materials with individual contract costing less than US$2,000 equivalent may be procured following DC with prior approval of the Bank.

14. Selection of Consultants:

(a) Quality- and Cost- Based Selection (QCBS)/ Quality Based Selection(QBS) : Consulting services provided by f i r m s that are estimated to cost US$200,000 equivalent or more per contract wi l l be procured following QCBS or QBS. Fixed Budget Selection (FBS): Services through f i r m s estimated to cost less than US$200,000 equivalent per contract may be procured following FBS in accordance with the PPA. Consultants’ Qualzpcations (CQ) / Least Cost Selection (LCS): Services provided by firms that are estimated to cost less than US$lOO,OOO equivalent per contract may be procured following CQ or LCS accordance with the PPA. Single-Source Selection (SSS): Specific consultant services provided by f i r m s satisfying Consultants’ Guidelines (paragraph 3.9 to 3.13) and with estimated cost less than US$lOO,OOO equivalent per contract, may be procured following SSS with the Bank’s prior agreement.

(b)

(c)

(d)

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(e) Individual Consultants (IC): Services for assignments, estimated to cost US$50,000 or more, for which teams o f personnel are not required and the experience and qualifications o f the individual are the paramount requirement, will be procured through individuals in accordance with Section V o f the Consultants Guidelines. All other individual consultants may be selected following PPA. Individual consultants wil l be selected on the basis o f their qualifications for the respective assignments.

Incremental Operating Costs: The incremental operating costs for operations and maintenance o f vehicles, office utilities, and office supplies and stationeries will be disbursed on the basis o f the annual budgets (later validated by actual expenditures) to be prepared by the implementing agencies and agreed with the Bank.

15. Procurement Arrangements: The overall procurement arrangements with tentative amounts are shown in Table A.

Table A: Procurement Arrangements (US$ Millions)”

2. Goods net of tax

1 (0.65) I 1 (0.65) Total 1 28.03 I 13.23 I 29.99 I I 71.25

I, I (28.03) I (13.23) I (20.94) I I (62.20) I Figures in parenthesis are the amounts to be financed by the IDA Credit. A l l costs include contingencies.

2/ Includes (i) goods to be procured through shopping and direct contracting (ii) consulting services to be procured following quality and cost based selection, selection under fixed-budget, least cost selection, consultants qualifications, single source selection, individual consultants methods, as well as training, study tours, seminars, workshops and other dissemination activities; and (iii) operating costs N.B.F. Not Bank-financed.

16. Prior Review Thresholds:

Goods and Works: During the init ial 18 months o f the project, the Bank wil l carry out prior reviews for the following contracts: (i) for goods - f irst contract using NCB, and thereafter contracts estimated t o cost US$300,000 equivalent or more, irrespective o f the procedures; and (ii) for works - f i rs t packagekontract using NCB, and thereafter contracts estimated to cost US$500,000 equivalent or more, irrespective o f the procedures. After 18 months, the above thresholds will be reviewed or defined or redefined in the revised procurement plan, if necessary but subject t o a prior review and “no objection” basis.

Consultants Services: The Bank’s prior review wil l be required for consultants’ services contracts estimated to cost US$lOO,OOO equivalent or more for f i r m s and US$50,000 equivalent or more for individuals. All single-source contracts will be subject t o prior agreement by the Bank. All TORS o f the consultants are subject to the Bank’s prior review.

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Table B: Thresholds for Procurement Methods and Prior Review a/

I C B

N C B

Expenditure Category

Works

All contracts.

First contract by each implementing agency regardless o f value in N C B and thereafter, a l l contracts valued US$300,000 or more.

Goods

D C QCBS / QBS

FBS

FBS/LCS/CQ IC- Qualifications, references. Section V o f the Consultant Guidelines IC - Qualifications, references. sss

Services All contracts. All contracts.

All contracts o f US$lOO,OOO or more. Post review. All contracts.

Post review.

Prior agreement.

- a/ Prior review

Contract Value (Threshold)

>= US$4,000,000

<US$4,000,000

>=US $3 00,000

<US$300,000

>=US$50,000

<US$5 0,000

Selective contracts <=us$100,000 and meeting the requirements o f 3.9 to 3.12 o f the Consultant Guidelines

reshold would be reviewc

Procurement I Contracts Subject to Prior

N C B First contract by each agency regardless o f value in N C B and thereafter, a l l contracts valued US$500.000 or more.

N S Post review.

I

after 18 months and adjusted, if necessary.

17. Post Review: T o ensure compliance with the Bank’s procurement procedures, IDA will carry out sample post reviews o f contracts that are below the prior review thresholds. Such reviews (ex-post and procurement audit) o f contracts below the thresholds wi l l be carried out for a total sample o f about 20 percent o f the contracts procured by each agency.

18. Review of Procurement Performance: The Bank wil l monitor compliance with Bank requirements under the different procurement methods and performance standards on a continuous basis. As part o f the project’s planned annual review and mid-term reviews, a comprehensive assessment o f procurement performance will also be carried out. Based on the review and in consultation with the Government, the Bank may revise the prior review thresholds, including the procurement and selection methods.

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19. Reporting: The project will prepare quarterly procurement monitoring reports (PROCMOR) that include procurement performance indicators in accordance with the specific formats agreed with GOB.

20. Procurement Plan: The Borrower developed a procurement plan for project implementation which provides the basis for the procurement methods. The plan covered the initial 18 months of the project and will be updated annually with coverage for the next 18 months of project implementation. I t will also be available in the project’s database and the Bank’s external website. Prior to the issuance of any invitation for bids for procurement of goods and works and the selection of services, the proposed plan shall be furnished to the Bank for its review and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the respective Guidelines. The procurement of goods and works and selection o f a l l consultants will be undertaken in accordance with Plans approved by the Bank.

21. Use o f Standard Bidding and Contract Documents: For ICB procurement of goods and works, the use of IDA’S standard bidding documents (SBD) i s mandatory. For NCB procurement, DOE, DCC and DTCB may use the Government’s SBDs in a form acceptable to the Bank. For the selection o f international consulting firms, the Bank’s standard request for proposals (RFP), including the standard contract form will be used; for local consultants, the Government’s procedure laid out in the national rules including its documentation will apply. Depending on the type o f procurement, the Bank’s or Government’s standard bidproposal evaluation form will be followed for the submission o f evaluation reports.

22. Frequency of procurement supervision missions proposed: Once every six months.

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c. DETAILS OF THE PROCUREMENT ARRANGEMENTS

1. Goods and Works (a) For DOE:

Mohamadpur (West) and old Dhaka (20+10+20

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2. Consulting Services

Ref. No.

DOE-SI

DOE-S2

Description of Assignment Estimated Selection Review Expected cost Method by Bank Proposals

(us$ooo) (Prior / Post) Submission Date Design and Supervision Consultant for DOE 92 QCBS Post October, 09 Air Quality Building [Component lA(i)] Air Quality Monitoring Technical 361 IC Prior August, 09 Consultants -International [Component

DOE43

DOE-S4

(b) For DCC

1 A( ii)] Air Quality Monitoring Technical 144 IC Prior August, 09 Consultants -national Veh. Enforcement Technical Consultants - 119 IC Prior December, 09

(c) For DTCB

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Annex 9: Economic and Financial Analysis

BANGLADESH: Clean Air and Sustainable Environment (CASE)

The project i s a combination o f technical assistance, capacity building activities and physical investments that will be carried out in the city o f Dhaka. Project costs are about equally divided between technical assistance and physical investments among two components: (i) environment (US$ 16.23 million); and (ii) transport (US$45.97 million); with each one including several sub-components. The technical assistance and capacity building components are not amenable to economic analysis. The analysis was, therefore, limited only to those components where some meaningful estimates o f the costs and potential benefits andor beneficiaries could be made.

Component 1 : Environment

This consists of: (la) capacity building for overall air quality management; (1 b) management o f brick kiln emissions (IC) undertaking communication campaigns in support o f air quality activities and for the establishment o f a Clean Air Initiatives Facility and (Id) project management and coordination. Only the brick kiln sub-component has been subjected to a financial analysis. The short payback period i s used to demonstrate the financial feasibility o f the investment.

Most o f the project expenditure on the brick kiln sub-component will be to: (i) provide technical assistance for updating and enforcing emission standards; (ii) create the infrastructure and improve capacity for stack emission monitoring; (iii) enhance inspection and license issuehenewal capacity; (iv) improve outreach to the brick industry; (v) facilitate access to finance, including carbon finance; (vi) establish a testing laboratory for soils, fuels and fired bricks; (vii) finance technology supplier fees and technology absorption costs for transferring expertise from international technical institutions; and (viii) train and build capacity for brick sector entrepreneurs to adopt cleaner technologies. A small amount (approx US$2 mill ion) will be spent to support about 20 demonstration initiatives that improve existing brick making practices (FCK and zig zag kilns) through the introduction o f internal fuel, better firing practices, low-cost mechanization, and gravity chambers and other emission-reducing investments. Support will also be provided for 6 demonstration initiatives to introduce new technologies such as VSBK, zig-zag habla kilns and alternative building materials. The project will bear the cost o f only some small equipment purchase, c iv i l works and energy and environmental monitoring for the demonstration initiatives. The brick kiln owners will finance al l other costs.

The demonstration initiatives will be implemented in a few brick enterprises. The br ick entrepreneurs will be interested only if it i s financially viable in the short and/or medium-term. Based on experience in neighboring countries and the techno-economic feasibility studies done during project preparation, the payback period i s expected to be less than 1 year for the low-cost demonstration initiatives and between 2-3 years €or the medium-cost initiatives. The payback periods are relatively short due to the substantial savings from the reduced use o f fuevenergy. Table I below gives the summary o f the payback analysis done for the medium-cost initiatives, including information on energy use and PM emissions.

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Technology

FCK (base) Modified FCK Zigzag Gas Hoffman

Initial Rated Annual Coal per PM emissions per IRR Payback Investment Production Capacity 100,000 100,000 bricks (%) (years) (Tk mil/LJS$ (Million bricwyear) bricks (m d m 3,

'000) (tonnes) 5.0173 4.0 20-22 1 ooo+ 38 2.6 5.5180 4.0 16-18 -300 34 2.8 5.2176 4.0 16-18 400-600 55 1.8

70.0/1000 12.0 16,000 m3 <IO0 22 4.0

Given the attractive payback period, the need for the project t o support the physical investments and technical assistance at the enterprise level arises only due to uncertainties related to the performance o f cleaner technologies and practices in the Bangladesh context. Once the demonstration initiatives have established the viability o f the various cleaner and f u e l saving technologies in the different regions o f Bangladesh, the entry barriers for new technologies and processes are expected to be removed and no further physical investments will need to be made out o f the project funds. A s mentioned before, the demonstration initiatives will entail physical investments including c iv i l works and equipment purchases. Whereas the c iv i l works wi l l remain with the participating brick enterprise, the equipment wil l be reused in subsequent demonstration initiatives in other regions. This cost reduction approach has been incorporated into the project design. After completing the demonstration initiatives, only technical assistance will be provided to the brick sector for the remainder o f the implementation period. It i s estimated that, as a result of these demonstration projects, some 400-500 brick manufacturers are l ikely to switch to the newer and cleaner methods o f brick manufacturing resulting in the potential decrease o f PM emissions by 20-30%, energy savings and greenhouse gas emissions reduction o f 1520%. The Bank i s actively considering the support for carbon finance projects to sell the carbon emission reductions which will further increase the financial and economic viability o f the conversions.

Chinese Hoffman VSBK (4-shaft)

Component 2: Transport

gas 50.01735 15.0 12-14 <400 36 2.7 11.5/170 4.5 10-12 200-400 35 2.7

This component will focus on reducing conflict between motorized and non-motorized transport, reducing congestion, and providing safe and clean mobil ity for those who walk and use public transport, particularly working women. The output o f this component i s envisaged as the improvement in the mobil ity o f people through pi lot interventions in Dhaka, along the directions recommended by the 2005 Strategic Transport Plan (STP). It i s designed to deliver tangible results in the short term and help plan for the medium to long term and comprise the following subcomponents: (2a) physical improvement o f traffic f low and pedestrian mobility; (2b) preparing a framework for bus route network rationalization and franchising; (2c) institutional strengthening and regulatory review and (2d) project management and coordination. The last three sub-components comprise technical assistance and capacity building and have not been subject to economic analysis.

The analysis is, therefore, l imited to the physical improvement o f traffic f l ow and pedestrian mobi l i ty sub-component which includes small and dispersed investments in traffic engineering and management measures spread in certain areas o f Dhaka. Investments wi l l focus on traffic signals, foot over bridges, improved sidewalks, one-way streets, and separation o f motorized and non-motorized traffic. The methodology used i s the least cost design option.

Source: Small Study on Air Quality o f Impacts o f the North Dhaka Brickfield Cluster by Modelling o f Emissions 18

and Suggestions for Mitigation Measures including Financing Models, December 2007.

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Traffic Siwzalina: The tangible benefits o f the traffic signal synchronization are measured in terms o f the savings in the operating costs o f vehicles and in the value o f t ime for passengers. The intangible benefits include the reduction in air pollutants, accidents, cost o f deploying police personnel etc. Using the most recently available traffic data along the proposed corridors and information f rom past studies and reports, the table below provides estimates o f the value o f passenger time and direct (out o f pocket) cost o f operating vehicles in Bangladesh.

Vehicle Type

Table 11: Key Parameters for Estimating the Benefits o f Investments in Traffic Signaling”

Hourly Average fuel Average Value of consumption operating

Passenger during idle cost o f Time running in vehicle in in Tk3 llhr4 TWkm’

Average Average Composition of Passenger

vehicle in traffic Occupancy stream’ per vehicle’

Truck Bus

Mini Bus

4% 1 9.7 2% 46.0 17.7 1 12.5 5% 25.0 17.7 0.7 7.2

Car, Micro Bus Auto Rick

Motor Cycle Cycle Rick

Reduction in idle running fuel and in vehicle operating costs: the cost o f reduction in idle running fuel consumption would amount to Tk. 55,000 per day, adding up to Tk. 16.3 mi l l ion (US$0.27 mill ion) per year and the reduction in vehicle operating cost as a result o f better travel speeds could amount to another Tk. 55,000 per day or 16.5 mi l l ion (US$0.27 million) per annum. Considering a total annual value of fuel savings of US$0.54 million which i s the direct monetary benefits accruing to the road users, the investment towards the design and implementation o f the synchronization scheme along the f i rs t corridor i s expected to be recovered within one year.

20% 2.0 39.8 0.5 7.0 30% 2.1 25.3 0.45 5.0 5% 1.3 32.3 0.35 3.0 34% 1.6 19.6 1 .o

I n addition, the corridor considered for the signal synchronization handles about 5,000 vehicles per hour during rush hours. Assuming the signal synchronization scheme would achieve an overall reduction o f 5 minutes o f journey time over the entire corridor, this would translate into a daily passenger time savings valued at Tk. 346,000 which adds up to Tk. 103 mi l l ion (US$1.73 million) annually.

Traffic Manapement: The proposed investments in traffic management are modest and focus primarily on pedestrian mobi l i ty and safety. This i s important since 50% o f the people in Dhaka are walk dependent and 77% o f accident fatalities are pedestrians. Proposed investments wil l improve the basic infrastructure for pedestrian mobil ity and safety in three o f the most congested neighborhoods o f Dhaka: Mohammadpur, Tejgaon and Khilgaon. The targeted populations are the urban poor and women, employed in the ready made garment industry. These investments focus on sidewalks and ancillary road improvements and removal o f obstructions to safe and convenient walking. The benefits are qualitative and fal l in the category o f fulfilling basic needs and improving the quality o f l i fe by making Dhaka more livable, particularly for the poor and low income women.

l 9 Sources: (1) Traffic counts conducted by Signal Maintenance Contractor, (2) and (3) Feasibility Study for Jatrabari Flyover in Dhaka 2004, (4) www.pcra.org/Englishtransport/CRRIstudy.htm ; (CRRI RUCS 1982 and Indian Institute o f Petroleum, 1996) and (5) ADB Project completion report on Road Overlay and Improvement Project (Loan 128-BAN[SF]), July 2002.

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The methodology used to demonstrate the economic feasibility of these investments is the least cost design option.

Twenty five foot over-bridges (FOBs) will be constructed at high pedestrian volume intersections identified from surveys carried out during project preparation. Existing FOBs are well used. At proposed FOB locations, peak hour counts in 2008 indicate that 4,320 pedestrians used the Nabisco Crossing FOB during the afternoon peak hour alone. At the NAM Garden Quarter crossing, the number of pedestrians during the afternoon peak hours amounts to 4,356. As the vehicular and NMV traffic volumes continue to increase along the main corridors o f Dhaka, FOBs appear to be the main instruments of protecting and enhancing pedestrian mobility and safety. The cost of the FOBS ranges from US$200,000 to US$300,000 and the designs were selected with cost and quality considerations in mind in order to meet the requirements of the pedestrians. The costs are inclusive of design, construction, and supervision. On average some 2,000 to 3,000 pedestrians are expected to use the FOBs during the peak hour period on a daily basis and the project will monitor the use of the FOBs as part o f i t s overall monitoring plan.

Most low paid workers in Dhaka (urban poor and women) walk through Mohammadpur, Khilgaon and Tejgaon. Sidewalks are discontinuous, inadequate or simply non-existent on many of these streets. There are many obstructions to safe walking and the existing surface drainage system i s inadequate and does not function well, especially during the rainy season. As a result the women walk on the main road, endangering their lives and slowing traffic movement. New sidewalks with proper surface drainage will be constructed. Obstructions to safe walking will be removed and/or relocated wherever feasible and pavements in need o f repair andor repaving will be fixed. About 30 km of sidewalks in Mohamadpur, 25 km in Khilgaon and 15 km in Tejgaon are expected to be improved under this program. These sidewalks were identified as the priority areas for improvement under the STP and reconfirmed in surveys carried out during the preparation o f this project. The designs were selected with cost and quality considerations in mind in order to meet the requirements of the pedestrians, and the cost o f improvements ranges from US$140,000 to US$180,000 per kilometer.

A modest investment i s proposed for NMV/MV lane separators on sections of two main corridors, primarily to reduce the current conflict between rickshaws and M V s . Again, these separators will not be continuous because of constraints to land availability. As a minimum, the benefits will be in reduced number (and cost) of accidents and increased traffic flow and at a minimum reducing the cost o f accidents. More particularly, it will provide a safer route for the rickshaws. The average cost of providing these separators i s US$14,000/km. The designs are least cost within the parameters of enhanced quality so as to ensure durability and traffic safety.

One-wav street svstems will be introduced over a length o f 40 Km in Old Dhaka and 40 Km in Mohammadpur, two of the most densely populated sections of Dhaka. Old Dhaka streets are narrow and current traffic i s a chaotic mix of M V s , NMVs and pedestrians, a l l sharing the same road space concurrently. The proposed one-way streets will, at a minimum, streamline the traffic flow and marginally increase its efficiency. However, any major gains in traffic volume and speed will depend upon other external factors such & connecting main arterials and their operating efficiency. The improvements being carried out under the project are pilot activities that will lead to important lessons for future scaling up or other interventions.

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Annex 10: Safeguard Policy Issues

BANGLADESH: Clean Air and Sustainable Environment (CASE)

Environment

The project will have positive environmental impacts, as i t s objective i s to abate air pollution, reduce the energy / fuel use and contribute towards mitigating greenhouse gases through interventions in the environment and transport sector. However, some o f the physical investments - under both the environment and transport components - wil l have construction-related environmental issues that will impact the workers as wel l as pedestrians and neighborhoods. These impacts are minor, temporary in nature and can be mitigated through appropriate management measures. T o address these impacts, an Environmental and Social Management Framework (ESMF) has been developed. The ESMF contains policies, procedures and requirements that will be adhered to during project implementation and it addresses the requirements o f Bank Operational Policy OP 4.0 1 Environmental Assessment, the only environmental safeguard policy applicable to this project.

For the purposes o f the ESMF, the project activities can be classified into analytical studies and physical investments. The analytical studies include sector analysis reports, surveys, implementation evaluation and audits. These studies will be done under both the environment and transport components. Wherever relevant, the environmental aspects will be integrated into the studies. This wil l be responsibility o f the respective implementing agencies.

With regard to the physical investments, there will be: (i) consultancies involved with the preparation o f the designs, drawings, detailed project reports and bid documents, (ii) contractors who will execute the construction activities; and (iii) project management consultancies that will oversee the effective implementation o f these activities. In each o f these, the PD wil l ensure that the environmental requirements are adequately addressed in the relevant documents and effectively executed during implementation. The matrix below gives a br ief description o f the various physical investment activities and their environmental implications.

Physical investment activities and environmental implications

No. I Type I Description

A. Transport sub-component: Traffic engineering measures

AI I Project activity: I Construction o f Foot-Over-Bridges and Sidewalks

Environmental implications:

A2 1 Construction-related environmental issues wi l l impact the workers as well as pedestrians and neighborhoods. These include: (i) dust and noise; (ii) tree-cutting, if any; (iii) disposal o f debris; and (iv) worker and pedestrian safety.

B. Environment component: Brick sub-component

BI I Project activity: I Demonstration projects with cleaner technologies and practices

B2 1 Environmental implications: Construction-related environmental issues that wi l l impact the workers as well as pedestrians and neighborhoods. These include: (i) dust and noise; (ii) worker safety; (iii) worker health and hygiene (clean water and sanitation facilities); and (iv) waste handling and management practices.

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The ESMF includes relevant environmental laws and regulations, environmental screening and other procedural requirements. Screening will ensure that al l physical investments are done only in facilities that are in full compliance with the prevailing environmental laws. Other procedural requirements will ensure that environmentally responsible construction practices i s built into the project design and adhered to during implementation. Through the ESMF, it wi l l be ensured that the project is in full compliance to the environmental laws and environmentally responsible construction practices are adopted in al l the physical investments under this project.

Social Safeguards

With a focus on reducing urban air pollution, the project aims to catalyze the adoption o f sustainable environmental initiatives in urban transport and small-scale industries by promoting cleaner technologies and processes. Most o f the activities proposed under the two main components, environment and transport, concern institutional/regulatory reforms and capacity building in the organizations that are variously responsible for environmental protection and urban transportation planning and management. The project wi l l also finance some land-based physical activities under two o f the transport subcomponents, such as, improvement o f traffic f low and pedestrian mobi l i ty and bus route network rationalization. These will include the construction o f 25 foot-over-bridges (FOBS) at selected locations and the development/ improvement o f bus bays, road junctions, sidewalks, and other facilities to improve vehicular and pedestrian mobil ity in metropolitan Dhaka.

The physical works proposed to improve traffic mobil ity are expected to cause some adverse impacts due to a possible need for land acquisition and displacement of unauthorized public land users. Land acquisition f rom private ownerships, wherever required, i s however expected to be quite modest and most likely, will involve the purchases o f narrow strips at spots/locations that are technically required to achieve an acceptable level o f traffic efficiency and safety. The other l ikely adverse impacts are expected to be on encroachers o f lands owned by the city or other public agencies, and on vendorsjtraders who use the sidewalks and undeveloped spaces. As seen in a few instances under DUTP, the impacts on encroachers may entail the dismantling o f small portions o f storefronts that encroached into the city lands.

The impacts on the sidewalk vendors are expected to be temporary: they may have to make rooms for the c i v i l works without having to stop their operations. As seen with the existing ones, construction o f FOBS may somewhat constrict the movement o f pedestrians at the FOB landing areas who do not intend to cross the roads. Shops and other establishments at the landings may be obstructed they wil l not face business losses. The actual need for land acquisition and the nature and scale o f impacts will remain largely '

unknown until specific project activities are selected and associated impacts assessed. However, based o n the experience o f c i v i l works implemented under DUTP and the Municipal Services Project as wel l as a preliminary investigation o f the general situation on the ground, it is expected that the physical activities envisaged under the project are not l ikely to cause significant social safeguard impacts.

Yet, to mitigate any potential.adverse impacts, as and when they are caused by the selected subprojects, GOB has prepared an ESMF that i s consistent with the Bank's OP 4.12 on Involuntary Resettlement (and OP 4.01 on Environmental Assessment). As to land acquisition and resettlement, the ESMF consists o f (i) a legal framework outlining the principles and guidelines which will be used to acquire lands and resume public lands from private uses, and mitigate the adverse impacts; (ii) a mitigation policy matrix in terms o f impactsAoss categories; (iii) arrangements for preparation and implement Resettlement Plans (RPs); (iv) a grievance redress procedure for project affected persons; and (v) a monitoring scheme with key indicators for land acquisition and RP implementation. The ESMF, which applies to the entire project, provides the basis to prepare and implement R P s as and when specific activities are found to cause adverse social safeguard impacts. The RP for each activity or a batch o f activities wi l l be subject to

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IDA review and clearance and will contain details o f the impacts and affected persons, as wel l as an implementation budget and time schedule.

Stakeholder consultation

During the preparation phase, several analytical studies were done both under the transport and environment component: (i) a political and economic study for the bus operation and brick sector; (ii) techno-economic study o f the brick sector; (iii) surveys to identify suitable locations o f foot-over- bridges; and (iv) Gender assessment to identify gender based needs and develop strategies for improving the safe mobil ity o f women, children and elderly. All o f these studies involved stakeholder consultations. During the implementation phase, these consultations will be continued. The respective implementing agencies and the design / supervision consultants will ensure that stakeholder consultations are conducted as required. Any further analytical studies will include stakeholder consultations

Capacity-building

To ensure awareness o f ESMF issues among those involved with project design and implementation, the PC and implementing agencies wi l l organize orientation workshops for stakeholders on the ESMF on a semi-annual basis. The stakeholders wil l include Government officials, enterprise owners, planners, design consultants, supervision consultants and contractors.

Monitoring and evaluation

To ensure implementation effectiveness, the PC will monitor the status o f ESMF implementation for the quarterly meetings to be held to review overall project implementation. In addition, each PD will conduct an ESMF audit just prior to the mid-term o f project implementation. The PC will consider any gaps/ deficiencies identified and recommendations made to further streamline and strengthen the ESMF, and take appropriate actions.

Approval and disclosure

The ESMF was disclosed to the public in Bangladesh by the Government as wel l as by the Bank’s Public Information Centers in Dhaka and Washington D.C.

92

Annex 11: Project Preparation and Supervision

BANGLADESH: Clean Air and Sustainable Environment (CASE)

Planned Actual PCN review 07/10/2007 0711 Of2007 Initial PID to PIC 0911 212007 0911 712007 Initial ISDS to PIC 09/12/2007 0911 112007 Appraisal 03/24/200a 07/17/2008 Negotiations 03/02/2009 03/09/2009 BoardiRVP approval 0511 212009 Planned date o f effectiveness 07/01/2009 Planned date o f mid-term review 12/31/2011 Planned closing date 1213 1 120 14

Key institutions responsible for preparation o f the project are: Ministry o f Environment and Forest (M0EF)lDepartment o f Environment (DOE); Roads and Railways Division (RRD) o f Ministry o f Communications (MOC)/Dhaka Transport Coordination Board (DTCB); and Ministry o f Local Government Rural Development and Cooperatives /Dhaka City Corporation (DCC).

Bank staff and consultants who worked on the project included: Name Title Unit Maria Sarraf Team LeadedSr. Environmental Economist SASDI Sameer Akbar ENV Shakil Ahmed Ferdausi Environmental Specialist SASDI M. Khaliquzzaman Consultant SASDI Marinela Dado Operations Officer SASDI Hubert Nove-Josserand Sr. Urban Transport Specialist SASDT Mohi U z Zaman Quazi Sr. Transport Engineer SASDT Ishtiaque Ahmed Transport Specialist SASDT Tanvir Hossain Procurement Specialist SAWS Nilufar Ahmad Sr. Social Scientist SASDS Burhanuddin Ahmed Sr. Financial Management Specialist SARFM Poonam Rohatgi Program Assistant SASDO Razia Sultana Program Assistant SACBD Carla Vale de Holguin Operations Analyst SASDI Kumudini Choudhary Program Assistant SASDI

Program Assistant SACBD Janet Bably Halder Arun Banerjee Consultant SASDI Teen Kari Barua Consultant Arun Herur Consultant Syed Tanveer Hussain Consultant Gordon Neilson Consultant V. Setty Pendakur Consultant Richard Meakin Consultant Sankaran Vaideeswaran Consultant

Bank funds spent to date on project preparation i s US$422,500. The breakdown is as follows: (1) Bank resources: US$300,000, (2) Trust funds: US$lOO,OOO (DfID); US$22,500 (GENTF).

Estimated annual supervision cost: US$120,000.

ream Leader (up to Oct l5,2008)/Sr. Env. Specialist

93

Annex 12: Documents in the Project File BANGLADESH: Clean Air and Sustainable Environment (CASE)

1. 2. 3.

4.

5.

6.

7.

8.

9.

Bangladesh Environmental Conservation Act, 1995 (ECA95) Environmental Conservation Rules, 1997 (ECR97) Air Quality management for Chittagong, by S. Larsen o f Norwegian Institute o f Air Research on contract from AQMP(2006) Source Apportionment by Receptor Modeling and framing action plan for Chittagong Air Quality Monitoring, by BAEC on contract from AQMP(2007) Investigation o f sources o f Atmospheric Aerosol at a hotspot area in Dhaka, by BAECin Journal o f Air and Waste Management Association, 55 (2005)227-240. Action Plans for Air Quality Monitoring in Rajshahi and Khulna cities, by Prof. A. H. Khan on contract from AQMP(2007) Bangladesh: Urban Air Quality Management- An Institutional Assessment, by Richard Baldwin on contract from WB (2007) Air Quality Cell Administrative Structure and Staffing, by John Core on contract from CASE Project Preparation PHRD Grant (2008) Small study on Air Quality Impact o f North Dhaka Brickfield Cluster, by BUET on contract from AQMP(2007)

10. Political-Economy Analysis o f Brick Sector in Dhaka, by Abul Hossain and Mirza Hassan on

1 1. Policy Options for Controlling Emission from Gross Polluting Diesel Vehicles, by A. A.

12. Investigation o f the Economic Issues Relating to the maintenance and operation o f Diesel Buses

13. Study on Bus Operations in Dhaka City, byA. A. Bhuiyan on contract from AQMP (2007) 14. CNG Infrastructure Requirements in Dhaka city for Bus Sector, by A. S. M. B. Huq on contract

15. Technical, Environmental and Social survey o f Foot Over-bridges and sidewalks in Dhaka, by

16. Perceptions on Air Pollution by Diesel Vehicles in Dhaka City among Stakeholders, by AQMP

17. Political Economy Analysis o f the Bus Sector in Dhaka, by Abul Hossain and Mirza Hassan on

18. Gender Analysis for Improving Mobil ity in Dhaka, by Bangladesh Institute o f Development

19. Bus Route Franchising study for Dhaka Transport Coordination Board, by Richard Meakin on

20. Legal and Institutional Strategies to Implement the Transport Component o f the CASE project,

2 1. Women Pedestrians o f Dhaka, 2000, by NUK; Integrating Gender into World Bank Financed

contract from WB(2008)

Bhuiyan on contract from AQMP(2007)

and Trucks in Dhaka, by Development Design Consultants Ltd on contract from AQMP(2006)

from AQMP(2007)

Centre for Urban Studies on contract from WB (2008)

(2006).

contract from WB(2008)

Studies on contract from WB(2008)

contract from DTCB as part o f DUTP (2003)

by Richard Meakin (2007)

Transport Programs (2003).

94

Annex 13: Letter o f Development Policy

Mr. Xisn Zhu Caunrry Director World Bank Office, Dhaka

Dhaka 1207 Bangladesh Facsimile :( 880-2) 8159029

E-32, AgWgson:, Sh~-e-B&n;Engl& N s g t ,

Subject: Letter of Po Eavironment (CASE) sapported by the World Bank

iu t X t ~ context of Clean Air and Sustainable

Dear Mr. Zhu; A5 yDtl &re adesh has grown steadily over the last decade arid

has demonstrated success towards ahievhg the Millennium Development Goal hile progress towards poverty reduction and human developmat goals i s being made stcadi8y, environmentd s anif their impact on human health have become increasingly significant c articularty in tlic urban areas. At this b the Government of Bmg,ldesh I las uedmaken the CASE project with istance o f your acemed Bank.

ect builds d implement actions thal WE mutti-

the experiences and Iesso QMP and the DUTP. It and which demonstrate

how to comprehmsivdy address the main sources o ltution withia 8 c'co- benefits" framework. The project activities wii ination of pfiysied investments with institutional and regulatory r everal reform steps have already been taken as part of the preparato CASE project, such as the revival o f DTCB under nerPenue badge& the GQV intends to take tlie following additional actions as outlined m the Table for Pullcg Refurm Matrix attached during project implementation. The rationale for the reforms i s briefly cxplained below.

95

1. Revishvrr of ernisfjotr srandardy for wehicks rrnd key pdldag bdustria: In 2005, the Environnient Ctm n Rules, 1997 wcre ammded to revise vehicular emission standards In order Lo bring thrm in lint with international practices and technology. I t i s strongly felt that these standards need $0 be upgrded progressively as done dsewhm m the world to reduce population exposure to vehicular air pollutzon. Sunrlarly, air emission standards need to be revised to control both ernissioii from indwidual industries and to reduec their cumulative impacts on the population. The govt. therefore, would activcly consrder to revisdip the emission standards for vehicles and key pdluting industries, 2. Amendment on of Brick Buvningr A&: Sustained efforts are on to reduce the population expasure to air paflution from Brick Kilns especially for Dhalca city. Thc gavt. intrnds 20 support the praject tkwgh the development of a long-term p o l q framework for the brick indushy that will mclude strm@bening u f laws and regulations. The grrvt. would actively ~~nsider revision ofthe Brick Burning Act a d 0 t h related legislation. 3, Rmifkwt of t?ia DTt3 A d : The GQB has been working with the objectit'r of solving the urban tmnspclrt problms o f Dhaka and has recently approved thc Strategic Tr~mprf Plan ($1-P) for Dhab which usah pqarcd under the DUTP. W d e r the transport component of the CASE project, some of the recmmmded hrnmtions ~tl the STP will be supported. The STP has p w d e d some spmific *ccnmrnm:ndations for xnvtitutional strengthening of DTCB for effective strategic transport planning and coordination of wsport related activities t f i the Dhaka Me~cqmlit;m h e a . The MOC IS worhng tu revise &e DTCB Act based on the S'I'P to strengthen i ts institutional capacity as an authority fox wban msport plamng and cwrdinatlon in Ilhaka and to empower it to introduce bus franchimg and m s s tmwt optxons &e BRT.

4, Rur,isbn ufnrrolor Vahich Ordinance (MVO): The on-gomg work on the revision o f the MVO will be expedited in coordination with updated emissions control, and modern management approaches for public transport,

1 laok fomwd to Bank's conhnuing suppurt to oar Covmmt's d e a v o r thruugh the CASE project which %Vi11 help sustain the Iuny tern impacts ofthese refom mcasiEx-03.

Special Assistant IO Chief Adviser

96

Table: af Policy Reform Matrix related t@ CASE Project

Action tu bc tukeii

-"....--.....- -- Dtrft to be ready for stakeholder discusxian by

Juns 30,2010

Jmle 30.2010

97

Annex 14: Statement of Loans and Credits

BANGLADESH: Clean Air and Sustainable Environment (CASE)

Original Amount in US$ Millions

Difference between expected and actual

disbursements

Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. F r m Rev’d

PO98146 2008

PO40712 2008 P102305 2007

PO98273 2006 PO89382 2006 PO74841 2005 PO86791 2004 PO74966 2004

PO78707 2004 PO86661 2004 PO81969 2004

PO83890 2004

PO81849 2003

PO71435 2003 PO62916 2003 PO53578 2003

PO44876 2002 PO71794 2002

PO74040 2002 PO74731 2002 PO59143 2001 PO57833 2001 PO50752 2001 PO69933 2001 PO44810 2001 PO41887 1999

Public Procurement Reform Project 11

Water Management Improvement Project Avian Flu Preparedness Local Governance Support Project Investment Promotion Financing Facility HNP Sector Program Reaching Out o f School Children Project

Primary Education Development Program 11 Power Sector Development TA BD - Water Supply Program Project Enterprise Growth and Bank Modernization Economic Management TA Program (EMTAP)

BD: Telecommunications Technical Assist. Rural Transport Improvement Project Central Bank Strengthening Project Social Investment Program Project

Female Secondary School Assis. I1 Rural Elect. Renewable Energy Dev. Renewable Energy Development Financial Services for the Poorest Microfinance I1 Air Quality Management Project Post-Literacy and Continuing Education HIV/AIDS Prevention Legal and Judicial Capacity Building Municipal Services

0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00

0.00

0.00

0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

23.60 102.26 16.00

111.50

50.00 300.00

0.00 150.00

7.10 0.00

250.00

0 00

9.12

190.00

37.00 18.24

120.90 190.98

0.00 5.00

151.00 4.71

53.30 40.00 30.60

138.60

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0 00 0.00 0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00

000 000 000 000 000 000 000 000 000

000 000 31 12 000 000 000 000 820 000 000 000 000 000 000 000 000 000 091 000 000 000 000 000 21 98 000 000 004 000 000 068

23.58 104.64

15.97 111.54

48.51 322.70

38.52 94.99

13.76 40.32

145.91

19.37

6.92

108.61

37.57 12.55 15.40

69.24 1.52

1.45 15.16 1.44

23.73 0.73

14.87 22.64

0.00 0.00

0.00 0.00 0.00 0.00

-0.28 0.00 2.49 0.00

-19.71 0.00 3.49 0.00 9.94 0.00

10.93 3.89 2.64 0.00

80.42 0.00

10.69 0.00

5.16 2.35

55.66 0.00 33.00 0.00 2.50 -1.87

28.15 -4.23

26.53 -31.72 7.45 0.00 0.68 0.00

-9.48 0.00

1.79 -0.91 14.89 -8.11 18.30 -1.70 10.12 0.00 19.48 18.83

Total: 0.00 1,999.91 0 00 820 54.73 1,311.64 314.84 - 23.47

98

Annex 15: Country at a Glance

1.2% 578 749

2 2 2 7

32 57 85 29

81 94

100 89

ea

BANGLADESH: Clean Air and Sustainable Environment (CASE)

Gross GNI per --I primary capita enrollment

Access to improved watersource

-1- -&wmmme g q u

Bangladesh at a glance POVERTY and SOCIAL

Banslirdesh

158 % 47Q

75 0

1 8 2 1

27 e4 52 39 85 47

103 101 1%

19S7

42 3 2 0 7 12 0 147 2 2 4

-2 0 0 4

34 1 10 5

2006

U6 4 8

25 8

South Asla

1 5 B 880

1339

1B 21

29 e4 e2 41 87 Ea

I08 111 1W

2006

a1 9 24 7 190 I S c 33 7

1 3 0 3

332 41

228 84 5

2007

6.5 48

27.0

Low I Dedopmntdamnd' income

LYe expeotanoy

T

Trade E 0 17 4 361

2007-1 1 Indebtedness

1987-97

5 s 2 5

7 0 3 9

3 2 4 1 7 1 8 3

2997-07

3 4 7 9

5 1

3 9

8 4 B O

e 9

8 e

2006 a 0 7

4 9 3 2 97 9 5

108 112 64 6 7

4 6 5 6 8 0 6 4 8 3 7 2

1 8 1 23e

I G-ovkhof e v o r t s n d imports(%) I

99

1987

10 9

8 6 2 9

-3 9

1987

1.074 104 135 %as

2.C23 d l 3 230 8%

w 51 97

1987

13811 2,87C -1 576

-122 72 1

-we 1,leS -203

B e

1987

9 314 7Q

2 985

524 5

35

710 755

2 3 0

400 24 1

9 332 30

33 1

1997

25 3 1

92 2 3

- 4 3

1997

4.334 11& 222

3.e37 8,447

184 515

1,337

s? sr

1 02

1997

4.931 i.@B -Z.&%

-1 37 1,907

-am 693 lB3

1 e71 427

1997

14.424 35

5,731

8s 7

%:

579 2% -P 139 - 10

4a 301 b

242 44

197

2006

7 2 5 2

10.7 2 2

-2 3

2006

13.412 148 257

9,535 13,301 1,372 2,004 1.458

122 141 87

2506

11,752 lE,&%4 -3.912

-702 E , 4 B

824

-4% -338

2,295 BT2

2006

a5.521 0

9,297

C85 0

242

937 653 -24 637

21

2 w 3% 17; 22e 70

155

20217

7 2 5 e

10 8 1 5

-3 1

2007

12053 14: 2Pg

11,118 19511

1.918 2233 1,329

132 1 E3 86

2007

18537 182W -4,713

-883 a654

952

-w -1,312

3 638 m1

mo7

0 10 37;

Q 285

580 602 193 40 8 72

3%

lnf l t ion [%) I R

0

4 I Ewort md impat levels(US$ mill.)

z%m T

Current acmunt bdmoeto GDP[%]

1

(I

1

-2

-3

Cornpsition of a006debt ( U S ri l l .)

C 476

A. IBRO E . Bilateral B . IDA 0 . m e r mllRenl F . Priwte C . MF 0 . Shon-term

100

MAP SECTION

R A J S H A H IR A J S H A H I

D H A K AD H A K A

S Y L H E TS Y L H E T

K H U L N AK H U L N A

B A R I S A LB A R I S A L

C H I T T A G O N GC H I T T A G O N G

PANCHAGARPANCHAGAR

THAKURGAONTHAKURGAONNILPHAMARINILPHAMARI

LALMONIRHAT

LALMONIRHAT

DINAJPURDINAJPUR

RANGPURRANGPURKURIGRAMKURIGRAM

GAIBANDHAGAIBANDHA

JOYPURHATJOYPURHAT

NAOGAONNAOGAON

NOWABGANJNOWABGANJ

RAJSHAHIRAJSHAHI

NATORENATORE

BOGRABOGRA

JAMALPURJAMALPUR

SERPURSERPUR

NETROKONANETROKONA

MYMENSINGHMYMENSINGH

TANGAILTANGAILSERAJGANJSERAJGANJ

PABNAPABNA

KUSHTIAKUSHTIA

MEHERPURMEHERPUR

CHUADANGACHUADANGA

JHENAIDAHJHENAIDAH MAGURAMAGURA

RAJBARIRAJBARI

FARIDPURFARIDPUR

MANIKGANJMANIKGANJ

DHAKADHAKA

GAZIPURGAZIPUR

KISHORGANJKISHORGANJHABIGANJHABIGANJ

SUNAMGANJSUNAMGANJ

SYLHETSYLHET

MOULVI BAZARMOULVI BAZAR

BRAHMANBRAHMANBARIABARIA

NARSINGDINARSINGDI

NARAYNGANJNARAYNGANJ

MUNSHIGANJMUNSHIGANJ

SARIATPURSARIATPUR CHANDPURCHANDPUR

COMILLACOMILLA

MADARIPURMADARIPURGOPALGANJGOPALGANJ

NARAILNARAILJESSOREJESSORE

SATKHIRASATKHIRA

KHULNAKHULNA

BAGERHATBAGERHAT

PEROJPURPEROJPUR

BARISALBARISAL

JHALUKATHIJHALUKATHI

PATUAKHALIPATUAKHALIBHOLABHOLA

BARGUNABARGUNA

LUXMIPURLUXMIPUR

NOAKHALINOAKHALI FENIFENI

KHA

GRA

CH

HA

RI

KHA

GRA

CH

HA

RI

RANGAMATIRANGAMATI

CHITTAGONGCHITTAGONG

BANDARBANBANDARBAN

COX’SCOX’SBAZARBAZAR

RangpurRangpur

GaibandhaGaibandha

DinajpurDinajpur

BograBogra

SerajganjSerajganjNatoreNatore

JoypurhatJoypurhat

NaogaonNaogaon

NowabganjNowabganj

JamalpurJamalpurSerpurSerpur

NetrokonaNetrokona

SunamganjSunamganj

PabnaPabna

KushtiaKushtia

RajbariRajbariMeherpurMeherpur

ChuadangaChuadanga

JhenaidahJhenaidahMaguraMagura

NarailNarail

SatkhiraSatkhira

BagerhatBagerhat

PerojpurPerojpur

JhalukathiJhalukathi

GopalganjGopalganj

MadaripurMadaripurSariatpurSariatpur

FaridpurFaridpur

JessoreJessore

NoakhaliNoakhali

KhagrachhariKhagrachhari

PatuakhaliPatuakhali

BholaBhola

BargunaBarguna

ComillaComilla

Moulvi BazarMoulvi Bazar

MymensinghMymensingh

TangailTangail

ManikanjManikanj

RangamatiRangamati

BandarbanBandarban

Cox's BazarCox's Bazar

ThakurgaonThakurgaon

NilphamariNilphamari LalmonirhatLalmonirhat

KurigramKurigram

PanchagarPanchagar

FeniFeni

GazipurGazipurNarsingdiNarsingdi

NaraynganjNaraynganj

MunshiganjMunshiganj

ChandpurChandpur

LuxmipurLuxmipur

BrahmanbariaBrahmanbaria

HabiganjHabiganj

KishorganjKishorganj

RajshahiRajshahi

KhulnaKhulna

SylhetSylhet

BarisalBarisal

ChittagongChittagong

DHAKADHAKA

JJaammuunnaa

GGaannggeess

GGaannggeess

MMeegg

hhnnaa

Kaptai KaptaiLakeLake

GG aa nn gg ee ss DD ee ll tt aa

SS uu nn dd aa rr bb aa nn ss

R A J S H A H I

D H A K A

S Y L H E T

K H U L N A

B A R I S A L

C H I T T A G O N G

PANCHAGAR

THAKURGAONNILPHAMARI

LALMONIRHAT

DINAJPUR

RANGPURKURIGRAM

GAIBANDHA

JOYPURHAT

NAOGAON

NOWABGANJ

RAJSHAHI

NATORE

BOGRA

JAMALPUR

SERPUR

NETROKONA

MYMENSINGH

TANGAILSERAJGANJ

PABNA

KUSHTIA

MEHERPUR

CHUADANGA

JHENAIDAH MAGURA

RAJBARI

FARIDPUR

MANIKGANJ

DHAKA

GAZIPUR

KISHORGANJHABIGANJ

SUNAMGANJ

SYLHET

MOULVI BAZAR

BRAHMANBARIA

NARSINGDI

NARAYNGANJ

MUNSHIGANJ

SARIATPUR CHANDPUR

COMILLA

MADARIPURGOPALGANJ

NARAILJESSORE

SATKHIRA

KHULNA

BAGERHAT

PEROJPUR

BARISAL

JHALUKATHI

PATUAKHALIBHOLA

BARGUNA

LUXMIPUR

NOAKHALI FENI

KHA

GRA

CH

HA

RI

RANGAMATI

CHITTAGONG

BANDARBAN

COX’SBAZAR

Rangpur

Gaibandha

Dinajpur

Bogra

SerajganjNatore

Joypurhat

Naogaon

Nowabganj

JamalpurSerpur

Netrokona

Sunamganj

Pabna

Kushtia

RajbariMeherpur

Chuadanga

JhenaidahMagura

Narail

Satkhira

Bagerhat

Perojpur

Jhalukathi

Gopalganj

MadaripurSariatpur

Faridpur

Jessore

Noakhali

Khagrachhari

Patuakhali

Bhola

Barguna

Comilla

Moulvi Bazar

Mymensingh

Tangail

Manikanj

Rangamati

Bandarban

Cox's Bazar

Thakurgaon

Nilphamari Lalmonirhat

Kurigram

Panchagar

Feni

GazipurNarsingdi

Naraynganj

Munshiganj

Chandpur

Luxmipur

Brahmanbaria

Habiganj

Kishorganj

Rajshahi

Khulna

Sylhet

Barisal

Chittagong

DHAKA

I N D I A

I N D I A

I N D I A

MYANMAR

BHUTAN

Jamuna

Ganges

Ganges

Meg

hna

KaptaiLake

B a y o f B e n g a l

M o u t h s o f t h e G a n g e s

To Dispur

To Dispur

To Dispur

To Silchar

To Goalpara

To Patna

To Katihar

To Katihar

To Gangtok

To Sittwe

To Calcutta

To Calcutta

G a n g e s D e l t a

S u n d a r b a n s Mt. Mowdok(957 m)

26ºN

25ºN

24ºN

23ºN

22ºN

21ºN

25ºN

24ºN

23ºN

22ºN

21ºN

88ºE 89ºE 90ºE 91ºE

89ºE 90ºE 91ºE 92ºE

92ºE

BANGLADESH

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

0 10 20 30 40

0 10 20 30 40 50 Miles

50 Kilometers

IBRD 33368R

MARCH 2008

BANGLADESHDISTRICT CAPITALS

DIVISION CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

DISTRICT BOUNDARIES

DIVISION BOUNDARIES

INTERNATIONAL BOUNDARIES