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Document ofThe World Bank
Report No: 18339-BD
PROJECT APPRAISAL DOCUMENT
ONA
PROPOSED CREDIT
IN THE AMOUNT OF SDR 129.3 MILLION (US$177 MILLION
EQUIVALENT)
TO THE
GOVERNMENT OF THE PEOPLE'S REPUBLIC OF BANGLADESH
FOR
DHAKA URBAN TRANSPORT PROJECT
DECEMBER 17, 1998
Infrastructure Sector UnitBangladesh Country UnitSouth Asia
Region
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CURRENCY EQUIVALENTS
(Exchange Rate Effective October 31, 1998)Currency Unit =
Taka
US$1 = Taka 48.5
FISCAL YEARJuly 1- June 30
ABBREVIATIONS AND ACRONYMS
ADB - Asian Development BankBRTA - Bangladesh Road Transport
AuthorityBRTC - Bangladesh Road Transport CorporationCAS - Country
Assistance StrategyDCC - Dhaka City CorporationDMA - Dhaka
Metropolitan AreaDMP - Dhaka Metropolitan PoliceDOE - Department of
Environment (of the MOEF)DUTP - Dhaka Urban Transport ProjectEIA -
Environmental Impact AssessmentEIRR - Economic Internal Rate of
ReturnGDTPCB - Greater Dhaka Transport Planning and Coordination
BoardGOB - Government of the People's Republic of BangladeshICB -
International Competitive BiddingIDA - International Development
AssociationLGD - Local Government Division (of the MLGRDC)LGED -
Local Government Engineering DepartmentMLGRDC - Ministry of Local
Government, Rural Development & CooperativesMOC - Ministry of
CommunicationsMOEF - Ministry of Environment and ForestMOF -
Ministry of FinanceMOHA - Ministry of Home AffairsNCB - National
Competitive BiddingO&M - Operation and maintenanceNMT -
Non-motorized transportPCC - Public Consultative CommitteePCU -
Project Coordination UnitPIU - Project Implementation UnitPD -
Project DirectorRAJUK - Rajadhani Unnayan Karthpakhya (Capital City
Development Authority)RAP - Resettlement Action PlanRHD - Roads and
Highways Department (of the MOC)RRD - Roads and Railways Division
(Ministry of Communications)VOC - Vehicle operating cost
Vice President: Mieko NishimizuCountry Director: Frederick
TempleSector Manager: Frannie Humplick
Team Leader/Task Leader: Thampil Pankaj
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BANGLADESHDhaka Urban Transport Project
CONTENTS
A: PROJECT DEVELOPMENT OBJECTIVE
................................
....................................... 2
1. PROJECT DEVELOPMENT OBJECTIVE AND KEY PERFORMANCE INDICATORS
............................................ 2
B: STRATEGIC CONTEXT
........................................................................
2
1. SECTOR-RELATED COUNTRY ASSISTANCE STRATEGY (CAS) GOAL
SUPPORTED BY THE PROJECT ........... 22. MAIN SECTOR ISSUES AND
GOVERNMENT STRA PEGY ........... ....... ............
2........................................... 23. SECTOR ISSUES TO
BE ADDRESSED BY THE PROJECT AND STRATEGIC CHOICES
....................................... 5
C: PROJECT DESCRIPTION SUMMARY
.......................................................................
5
1. PROJECT COMPONENTS
......................................................................
52. KEY POLICY AND INSTITUTIONAL REFORMS SUPPORTED BY THE PROJECT
........... 63. BENEFITS AND TARGET POPULATION
......................................................................
84. INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS
...............................
....................................... 8
D: PROJECT RATIONALE
......................................................................
I I
1. PROJECT ALTERNATIVES CONSIDERED AND REASONS FOR REJECTION:
.................................................. I 12. MAJOR
RELATED PROJECTS FINANCED BY THE BANK AND/OR OTHER DEVELOPMENT
AGENCIES .......... 123. LESSONS LEARNED AND REFLECTED IN THE
PROJECT DESIGN ........... .......
.......................................... 124. INDICATIONS OF
BORROWER COMMITMENT AND OWNERSHIP ..................
........................... 125. VALUE ADDED OF BANK SUPPORT IN
THIS PROJECT ............................................. 13
E: SUMMARY PROJECT ANALYSIS
.............................................. 13
1. ECONOMIC ............................................. 132.
FINANCIAL ............................................. 143.
TECHNICAL: .............................................. 144.
INSTITUTIONAL: .............................................. 155.
SOCIAL:
...................................................................
. . , . , . , . . 156. ENVIRONMENTAL ASSESSMENT
...................................................................
167. PARTICIPATORY APPROACH
..................................................................
1 7
F: SUSTAINABILITY AND RISKS
..................................................................
17
1. SUSTAINABILITY
..................................................................
172. CRITICAL RISKS
..................................................................
183. POSSIBLE CONTROVERSIAL ASPECTS
..................................................................
20
G: MAIN CREDIT CONDITIONS
..................................................................
21
1. EFFECTIVENESS CONDITIONS:
...................................................................................
212. OTHER [CLASSIFY ACCORDIN(; TO COVEINAN T IxYPS USED IN THE
LEGAL AGREEMENTS.]: .................. 21
H. READINESS FOR IMPLEMENTATION .....................
............................................. 22
1. COMPLIANCE WITH BANK POLICIES ......................
............................................. 22
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Annexes
Annex 1. Project Design SummaryAnnex 2. Detailed Project
DescriptionAnnex 3. Estimated Project CostsAnnex 4. Cost-Benefit
Analysis SummaryAnnex 5. Financial SummaryAnnex 6. Procurement and
Disbursement Arrangements
Table A. Project Costs by Procurement ArrangementsTable Al.
Consultant Selection ArrangementsTable B. Thresholds for
Procurement Methods and Prior ReviewTable C. Allocation of Credit
Proceeds
Annex 7. Project Processing Budget and ScheduleAnnex 8.
Documents in Project FileAnnex 9. Statement of Loans and
CreditsAnnex 10. Country at a GlanceMaps
IBRD 29771 - Bangladesh - Project AreaIBRD 29772 - Dhaka
Metropolitan Area (DMA)IBRD 29841 - Main Project Components
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BANGLADESHDhaka Urban Transport Project
Project Appraisal Document
South Asia Region
Date: December 17, 1998 Team Leader/Task Leader: Thampil
PankajCountry Director: Fredlerick Temple Sector Manager: Frannie
HumplickProject ID: BD-PA-9524 Sector: Transportation Program
Objective Category: ENLending Instrument: Specific Investment Loan
Program of Targeted Intervention: [] Yes [xl No
Project Financing Data [ Loan [x] Credit [ Guarantee [] Other
[Specify]
For Loans/Credits/01thers:
Amount (US$m/SDRm): SDR 129.3 million (US$177.0 million
equivalent)Proposed terms: [x] Multi-currency [ ] Single currency,
specify
Grace period (years): 10 [I Standard Variable [x] Fixed []
LIBOR-basedYears to maturity: 40Commitment fee: 0.5%
Service charge: 0.75%
Financing plan (US$m):Source Local Foreign Total
Government 44.1 44.1CofinanciersIBRDIDA 78.5 98.5 177.0Other
(specify)Dhaka City Corporation 13.1 13.1
Total 135.7 98.5 234.2
Borrower: Government of BangladeshGuarantor: NAResponsible
agency(ies): Ministry of Communications and Dhaka City
Corporation
Estimated disbursements (Bank FY/US$M): 1999 2000 2001 2002 2003
20 20Annual 8.0 30.5 47.5 55.0 36.0
Cumulative 8.0 38.5 88.0 141.0 177.0
Project implementation period: 1999-2004 Expected effectiveness
date: 03/1999 Expected closinig date: 06/2004
OSD PAD Form: July 30,1997
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A: Project Development Objective
1. Project development objective and key performance indicators
(see Annex l).
The project's overall objectives are: (a) To improve urban
transport infrastructure and services inthe Dhaka Metropolitan Area
(DMA) in an economically and environmentally sustainable manner,
and(b) To strengthen institutional and policy framework and address
long-term transport planning andcoordination issues in the Dhaka
Metropolitan Area. The transport problems in DMA are
multi-facetedand massive, and would need a phased program spread
over several years. This project would focus onthe first phase, to
deal with the most pressing constraints, including building up an
institutionalframework and a policy environment that envisages
active private sector and community involvemenit.
B: Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal
supported by the project (see Ann7ex I):
CAS document number: 17453-BD Date of latest CAS discussion:
March 31, 1998
The CAS states that the Bank Group's mission in Bangladesh is
reducing poverty by promotingrapid job-creating economic growth and
interventions that directly assist the poor. The strategic
prioritiesoutlined in the CAS include, among others: (a)
institutional development, (b) promoting a competitiveprivate
sector as the engine of growth, and (c) promoting better public
sector management and improvedpublic services for private sector
and civil society. In outlining the implementation of the
assistancestrategy, the CAS states that the Bank Group will assist
in providing better transport services and tacklingurbanization
problems, and identifies Dhaka Urban Transport Project (DUTP) as
one of the key vehiclesto achieve this.
The project supports these main priorities outlined in the CAS.
It will help remove transportbottlenecks, and improve transport
services, in the largest and the most important urban center
inBangladesh, which has also a large percentage or urban poor;
Dhaka has a population of 9 million andcontributes about 13% of the
country's Gross Domestic Product (GDP). The project will also help
todevelop institutional capacity for better coordination and
improve public sector management of DMA'stransport system, expand
private sector role and participation and assist the poor in better
meeting theirmobility needs . An important focus of the project is
building institutional capacities in a phased manner.The proposed
Greater Dhaka Transport Planning Coordination Board (GDTPCB), with
members fromkey private and public sector agencies, is expected to
serve as a model for metropolitan transportationplanning and
coordination in Bangladesh. The project will also strengthen the
institutional capacities ofmany local agencies which have important
roles in the metropolitan transport planning and management.The
project envisages good bus services provided by private sector to
be the main thrust of publictransportation in Dhaka city. Various
steps will be taken under the project to facilitate greater
privatesector participation in the provision of efficient bus
services, including improving infrastructure andtraffic management
which will reduce congestion, traffic delays and vehicle operating
costs, providingadequate bus terminals and depots, deregulating
fares, and facilitating credit from various sources forprivate bus
entrepreneurs; some of these measures have already been initiated.
The urban poor willparticularly benefit from improved bus services,
better pedestrian facilities and support for non-motorizedtransport
(NMT) which employs a large number of poor operators.
2. Main sector issues and Government strategy:
Sector Background: Urban population growth in Bangladesh in
recent decades, has beenphenomenal; total urban population which
was 2.6 million (or 4.8% of the total population) in 1961, roseto
22.5 million (around 20% of the total population) by 1991. The
urban population growth per decadehas averaged 6.7% during this
period. This has far outstripped the capacity of urban
infrastructure,leading to low level of efficiency and massive
shortages. The future expansion of the country's economy
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significantly depends on the competitiveness of urban areas
which are also the country's main industrialand commerciall
centers; therefore, enhancing the efficiency and reach of urban
infrastructure becomes ahigh priority. Main issues in the urban
sector of Bangladesh are: (a) rapid increase in urban
population;(b) extremely poor conditions of infrastructure and
services, with huge backlogs and low-level of O&Mof existing
services; (c) weak institutions at the local government level, with
inadequate capacity forplanning and implementing projects, for
managing municipal services and finances, and for
maintaininginfrastructure; (d) poor revenue base and inadequate
cost recovery; (e) overlapping responsibilities andpoor
coordination among different government ministries and municipal
agencies; and (f) lack ofstakeholder participation and adequate
consultative processes.
The Government has realized the magnitude and importance of the
problem and is now makingearnest efforts to tackle these issues,
with the support of IDA, ADB, UNDP and bilateral fundingagencies to
improve the efficiency of the urban sector, through strategic and
technical studies, capacitybuilding initiatives, and development
projects (ref. detailed discussion under para. on
GovernmentStrategy below).
Dhaka's critical role: The urban hierarchy of Bangladesh is
strongly dominated by metropolitanDhaka, whichl is the country's
largest and most industrialized city, and also its administrative,
commercialand cultural capital. The population of Dhaka is about 9
million presently and is projected to be about 16million by 2015,
making it the seventh largest megacity in the world. Between 1960
and 1990 theaverage annual growth rate of population in DMA was
eight percent. With a share of about 7% of thetotal population,
Dhaka contributes about 13% of the national GDP. In spite of its
relative importance inthe national economy, acute deficiencies
exist in the provision of infrastructure facilities, resulting in
awidening gap between supply and demand for services.
Transport Environment in Dhaka: The transport environment in
Dhaka is characterized bytraffic congestion and delays, inadequate
traffic management, conflict of jurisdictions and poorcoordination
among agencies, and increasing air pollution problems. Dhaka is
perhaps the only city of itssize without a well-organized,
scheduled bus system or any other mass transport system. Women
andurban poor are particularly disadvantaged in accessing the
existing bus facilities due to extremeovercrowding. The city's
traffic problems have recently reached crisis proportions; traffic
delays havetripled in the last three years and automobile-related
air pollution has become a major health problem.These shortcornings
seriously compromise the ability of the transport system in Dhaka
to sustaineconomic growth and reasonable quality of life.
Deteriorating traffic and environmental conditions haveprompted a
popular public "Save Dhaka" campaign to find urgent solutions.
Moreover, the expectedaddition of another seven million people over
the next 16-17 years will make conditions almostunbearable in the
future, unless urgent measures are taken to remedy the
situation.
In many respects, the distribution of modal choices in Dhaka is
unique among cities ofcomparable size in the Asia region. Walking
to work and non-motorized transport (NMT) trips are majorcomponents
of the travel pattern in Dhaka. In terms of number of trips, almost
60% of the 8.5 millionweekday person trips are walk trips; 19.2%
use the manually-pedaled cycle-rickshaw; 1.4% use auto-rickshaw
(motorized three-wheelers); 9.2% travel by bus; 3.1% by private
car; and the remaining, about7.7%, by various other modes. In terms
of passenger kms. traveled, the share of buses is 30.6%, and
thoseof cycle-rickshaw and walking are 21.7% and 17.7%,
respectively. The high dependence on walking andcycle rickshaw,
both slow and typically best suited for short trips on secondary
roads, and a lowdependence on buses (the main form of public
transport), in a city of nine million people with an urbanarea of
about 2,000 square kms., is a symptom of inefficient and
ineffective transport systems andoperations. Dominance of slow
human pedaled cycle rickshaws, which are non-polluting and employ
alarge number of poor, but adds to traffic congestion, particularly
on main arterial roads, constitutes a
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major social issue related to traffic management in Dhaka.
The principal problems/issues associated with transport services
in Dhaka are: (a) weakinstitutional arrangements for planning,
coordination and management of transport services, leading
tooverlapping jurisdictions, and inadequate inter-agency planning
and coordination; (b) absence of a goodscheduled bus system (or
other mass transport), most buses being old, overcrowded and
generallyinaccessible to women passengers; (c) poor road conditions
and inadequate intersection managementfacilities for smooth traffic
flow; (d) serious traffic congestion, which reduces speed and
restricts thenumber of daily bus trips possible, thus increasing
vehicle operating costs; (e) tariff regulations and
otherdisincentives that discouraged large investments by the
private sector (Currently most of the busoperations in the city -
about 95% of around 1600 buses - are managed by the private sector,
withregulated low tariff and traffic delays leading to substandard
services; the tariff restrictions have beenrecently relaxed as
condition of DUTP preparation, and the private sector has begun to
bring in betterbuses at higher tariffs); (f) inadequate traffic
management and inefficient road use because of poorenforcemenit of
traffic regulations, conflict between slow and fast moving modes,
encroachments bystreet vendors, and lack of coordination among
different utility agencies and the road maintenanceagency; (g) high
accident rates arising from inadequate traffic enforcement, poor
road conditions anddriving standards; (h) poor accessibility for
women to the existing bus services due to overcrowding,
andinadequate sidewalks and pedestrian facilities which constrain
poor women garment workers who walk towork in large numbers; and
(i) automobile-related air pollution which has become a major
hazard for theentire city population, due to the recent steep
increase in the highly polluting two-stroke engines (three-wheeler
auto-rickshaws), increased traffic congestion, use of old and badly
maintained buses, and poorquality fuel.
Government Strategy: To deal with this deteriorating urban
situation, the Government hasrecently conducted many studies and
initiated actions to evolve a rational strategy in urban planning
andhousing, inunicipal management and services, urban transport,
and urban institutions, and address the keyissues involved. Some of
these studies, such as the Urban and Shelter Sector Review, the
Dhaka andChittagong City Master Plans, the Dhaka Integrated
Transport study, Municipal Services FeasibilityStudy, and the Dhaka
Water Supply Project studies have been partly funded by the UNDP,
ADB, theWorld Bank and other key bilateral. There have been active
discussions and dialogue within theGovernment and the country, and
with the World Bank and other institutions in preparing a
cogentstrategy for tackling the urban issues. For example, the
National Program Document for Urban Sector(1994) prepared with UNDP
assistance, provides the analytical underpinning to urban sector
initiativesfor the next decade; Government also recently agreed
with IDA, on a strategy for managing municipalfinance issues, based
on the municipal finance sector study (1997) completed with IDA
assistance. TheGovernment has also prepared Master Plans for Dhaka
and Chittagong with UNDP assistance. More.specialized work in
specific areas are currently under way, in parallel with initiation
of projects forinfrastructure improvements and institutional
strengthening. There has been genuine interest andcommitment by the
Government in addressing urban issues. The Government's urban
strategyemphasizes decentralization of authority to the local
agencies, strengthening their capacity, and upgradinginfrastructure
with a major role for private sector in the delivery of municipal
services.
In the area of urban transport, the Government's strategy is to
initially focus on the problems ofDhaka which is the largest and
also one of the fastest-growing cities, and in the process, create
asuccessful model in urban transport that can be replicated in
other urban centers of the country. TheDhaka Integrated Transport
Study (DITS, 1994) and subsequent discussions with Government
havehighlighted the following elements that will constitute the
urban transport strategy for Dhaka (which willalso set the tone for
the other cities in the country): (a) institutional reforms to
ensure efficient urbantransport planning and management, and
coordination among different agencies, as well as with regionalland
use planning process; (b) strengthening of the Dhaka City
Corporation and other municipalities in
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the Dhaka area, and other relevant agencies, to better manage
transport services and projects; (c)improving maintenance systems
and cost-recovery; (d) removing physical constraints in the
transportsystem and reduce transport costs; (e) improving traffic
management and safety; (f) enhanced role for theprivate sector in
urban transport services, under competitive market conditions; (g)
key role for theGovernment in undertaking public investments in
critical common-user infrastructure facilities such asroads,
traffic management improvements etc. and in providing an efficient
regulatory system for safe,dependable services by the private
sector, under adequate emission and environmental standards;
(h)developing a multi-modal framework involving all relevant modes;
(i) developing an efficient bus-transport system by private sector
as the main mass-transport mode for the near future, while
studyingother mass transport options for the long-term; () allowing
multi-tier bus tariff systems, with free fare-setting for higher
quality services (such as sitting-only', 'limited-stops' etc.) and
with fare regulation forordinary services to ensure affordability
for the poor; (k) ensuring a continued significant role for
cycle-rickshaws (which is pollution-free and which provides
employment support for about 1.0 million urbanpoor), as feeder
services to bus transport, and as local services on non-main roads,
by providing specialfacilities, while reducing their use on main
arteries where they cause traffic congestion; (I)
enhancingpedestrian facilities by providing, for example, clear
sidewalks, and pedestrian bridges for safe crossings;(m) addressing
the transport needs of specific vulnerable groups such as women,
garment workers, andthe poor; and (n) addressing air pollution
related issues by restricting the growth of two-stroke
engines,setting and monlitoring emission standards.
IDA enclorses GOB's overall urban strategy and supports it
mainly in two ways: (a) working withGOB in tackling major urban
transport problems through the proposed DUTP, and (b)
concurrentlysupporting GOB's efforts in strengthening municipal
institutions, policy framework, decentralization andgeneral
infrastructure improvements, through ongoing and new projects. The
Dhaka Water SupplyProject funded by IDA in 1996, is ongoing, and a
new Municipal Services Project, focused on an numberof small and
medium size municipal towns, which also supports strengthening
municipal institutionsgenerally, has been recently appraised and
negotiated, and is expected to be presented to IDA
Boardshortly.
While some urban projects for housing, water supply and other
municipal services have beenfunded recently by various
international agencies in selected cities and towns, no
internationally fundedinvestment project has been undertaken so far
for urban transport, and the proposed DUTP would be thefirst
intervention in this sub-sector in Bangladesh. The strategic
orientation identified by GOB for theurban transport sub-sector is
fully reflected in the proposed DUTP.
3. Sector issues to be addressed by the project and strategic
choices:
The project will address the main sector issues relating to:
building institutional capacity andimproving policy environment,
strengthening planning and coordination capacity, infrastructure
servicesprovision, betteir maintenance, improved traffic
management, private sector participation,
environmentalsustainability and addressing transport needs of the
poor. The focus of this project is on the most urgent,institutional
and infrastructure issues requiring immediate attention, and
developing a phased approach toaddress the complex and multifaceted
problems facing Dhaka, transport system. It will also provide
amodel for dealing with transport issues in other urban centers in
the country.
C: Project Description Summary
1. Project components (see Annex 2for a detailed description and
Annex 3for a detailed costbreakdown):
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PROJECT COMPONENTS AND COST SUMMARY
Cost incl. % of IDA % of IDAComponent Category Contingencies
Total financing financing
(US$M) (US$M)Traffic System Improvements* Physical 50.1 21.4
37.6 21.2Road Improvements Physical 30.7 13.1 23.1 13.1Bus Route
Improvements Physical 2.7 1.1 2.0 1.1Rehabilitation of Existing Bus
Physical 17.2 7.3 12.8 7.2Terminals and Adjacent RoadsPedestrian
Facilities Improvement Physical 5.4 2.3 4.0 2.3NMT Network
Improvement Physical 5.4 2.3 4.0 2.3Grade Separated Interchange
Facilities Physical 46.8 20.0 35.1 19.8Flood Damage Rehabilitation
- Roads Physical 20.0 8.6 15.0 8.5& Drainage
Equipment and Vehicles Equipment 10.9 4.6 8.1 4.8Technical
Assistance & Implementation Institution 34.4 14.7 34.0
19.2Support, and preparation of follow-up Building &proj ects
Project
Management ___Resettlement Costs Physical 1.4 0.6 1.3 0.7Land
Acquisition and Compensation 9.3 4.0 0.0 0.0
Total 234.2 100.0 177.0 100.0
Note: Figures may not agree due to rounding*Excludes related
technical assistance
2. Key policy and institutional reforms supported by the
project:
The proposed project will address the existing gaps and
weaknesses in the policy and institutionalframework related to
metropolitan transport planning and management in DMA, as described
below. Theproposed arrangements are also expected to set a model
for the rest of the country.
Setting up of GDTPCB: As part of the project preparation
efforts, GOB has set up a GreaterDhaka Transport Planning and
Coordination Board (GDTPCB), an inter-agency unit for overall
transportplanning and coordination for DMA, to fill a major
existing gap in the institutional framework forcoordination of
urban transport. GDTPCB will be chaired by the Mayor of Dhaka and
represented byother smaller municipalities in the metropolitan
area, the private sector and all other important agenciesthat have
a stake in transport planning and coordination in of transport
related decisions in DMA. Sincetransport planning, policy and
regulations are functionally the responsibility of the Ministry
ofCommunications (MOC), GDTPCB will be administratively under the
Ministry of Communications; theExecutive Director (ED) of GDTPCB
will report to the Secretary of MOC. GDTPCB will play a lead rolein
carrying out transport planning for the metropolitan area, and also
assist in transport policy formulationand the coordination of major
operational, and investment decisions regarding urban transport in
DMA,with other agencies and stakeholders. In addition, it will play
a major role in coordinating DUTPimplementation.
The structure of GDTPCB, with important roles for the Mayor of
Dhaka City Corporation(DCC), MOC and other key players, is such as
to ensure better coordination among key agenciesinvolved in
transport operations in DMA. This organizational structure has been
evolved in the light ofstudies by local and international experts
after examining the mandates and capacities of
existinginstitutions, current coordination problems, and intensive
local-level consultations, and reflect consensusamong experienced
local intellectuals and practitioners. Establishment of GDTPCB is a
major
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institutional reform undertaken by GOB, and its setting-up and
appointment of key staff have beencompleted as part of DUTP
preparation. The project will provide technical assistance,
training andequipment to make this agency fully functional.
Other institutional reforms: The project will also devote
attention to strengthening otherimportant institutions, namely DCC,
Rajadhani Unnayan Karthpakhya (RAJUK), Bangladesh RoadTransport
Authority (BRTA), Department of Environment (DOE) and Dhaka
Metropolitan Police (DMP)so as to improve their capacity &
efficiency in dealing with urban transport and pollution related
issues,
Addressing O&M and Cost Recovery Issues: Project also seeks
to address the existing poorlevels of operation and maintenance
(O&M) in urban transport infrastructure in DMA, and to
promotebetter cost recovery. This will be through strengthening
DCC's maintenance department and theestablishment of a Road and
Traffic Maintenance Fund (RTMF) for Dhaka Metropolitan Area, which
willbe financed frorn road user charges collected by GOB and DCC.
RTMF, managed under stakeholderoversight, will help ensure GOB/DCC
in allocating adequate funds for efficient maintenance of
roadinfrastructure, in order to ensure sustainability. GOB and DCC
have agreed on the structure andoperational modalities of RTMF, and
also on the annual maintenance funding levels (this is reflected
inthe Action Plan agreed during Negotiations).
Currently, the estimated maintenance requirement for road and
traffic infrastructure is aboutTk.550 million annually; this is
expected to go up to Tk. 660 million after the completion of the
project.Against this, the current level of expenditure on O&M
is only aboutTk. 160 million. GOB collects mostof the road user
charges (vehicle fees, fuel taxes) from the Greater Dhaka area to
the tune of around Tk.740 million annually; some beneficiary
payments are also indirectly collected by DCC through housetaxes.
Since GOB collects the main user fees, it is proposed that GOB will
provide 60% of the Dhakaarea's annual road maintenance requirement
(i.e. Tk. 330 million out of total Tk. 550 million needed for1998).
This grant money amount will be transferred by GOB to a
separate/designated account for RTMF,mainitainied by DCC. The
remaining 40% will be provided by DCC from its own resources, into
thisaccount. RTMIF would be used only for periodic and routine
maintenance of DMA's road and othertraffic related infrastructure.
The initial allocation into the fund will be phased over two years
(1998-2000), and will increase as maintenance needs increase;
GOB/DCC and IDA have agreed on estimatedlevel of contributions
during project period. DCC's share will increase in the last year
of the project. TheRTMF will function under the monitoring and
supervision of a Committee, chaired by the Mayor andwith members
representing various stakeholder groups, namely, DCC Ward
Commissioners -representing 10 DCC zones (rotational basis), bus
& truck owners association, premium bus operatorsassociation,
Metropolitan Chamber of Commerce & Industry (MCCI), GDTPCB, and
the civil society (anappropriate representative will be nominated
by the Association of Development Agencies inBangladesh). It was
also agreed with GOB that based on the findings of the country-wide
study on Road-User Charges, being conducted by GOB's consultants
under the Second Rural Roads MaintenanceProject, vehicle
registration charges and other user charges in the country will be
suitably revised.
DCC will also prepare and implement a plan in consultation with
IDA, for improvingmanagement and ensuring adequate cost recovery
from the inter-district bus terminals improved underthe project.
This plan will be agreed with IDA by December 1999, before the
start of the civil works toimprove the terminals. Since the present
fee collection method is not producing adequate returns,possibly
due to problems in the current auctioning system for bus terminal
operations, other options, suchas long-term leasing of the
operations and maintenance of the terminals to the private sector
(throughtransparent bidding), will also be considered for cost
recovery.
Other policy reforms agreed relate to measures for ensuring
competitive market entry andoperations for bus and other transport
operators, in particular allowing market-based tariff-setting by
bus
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operators in DMA who bring better quality "premium" services
(sitting only, limited-stop etc.); this tariffreform, recently
announced as part of DUTP preparation, has already attracted new,
improved busservices, and has been greatly welcomed by the public
and media. A larger scale entry of private busoperating companies
is expected when the project is underway and begins to reduce
traffic congestionand vehicle operating costs. GOB has agreed to
provide further incentives for entry of more private busservices.
Tariff control is continuing (though not strictly enforced) only
for "ordinary services" which aremostly used by the poor; the
quality of these ordinary bus services will also improve with the
removal oftraffic bottlenecks and delays through DUTP.
Participatory processes for improving bus services for thepoor and
women have also been agreed. A further review of the regulatory
systems and functioning ofDhaka's transport services will be
undertaken by GOB by the project's mid-term review in
consultationwith IDA with a view to consider and institute any
necessary changes. Another major area of reforn is inrestricting
the use of highly polluting vehicles and encouraging less polluting
vehicle types; the ActionPlan agreed with GOB includes many
measures for this purpose.
3. Benefits and target population:
The main expected benefits and the major beneficiaries are:
(i) Enhanced institutional capacities and better policy (i) GOB,
the relevant institutions involved and theenvironment in the urban
transport sector in DMA. general population of Dhaka Metropolitan
Area, and
also the country at large, since DMA is a main economiccenter in
the country.
(ii) Reduced congestion/travel time and vehicle (ii) Commuters,
vehicle operators of Dhakaoperating costs. Metropolitan Area, and
other private sector enterprises.
(iii) Improved travel environment, more efficient road (iii) Bus
operators, who are mostly in the private sector;use, enhanced
traffic management and improved bus users of public transport,
including women and low-system. income groups.
(iv) Network improvements for cycle rickshaws (NMT (iv) Cycle
rickshaw operators, who are very poor; andnetwork), to improve
their role as feeder services on many categories of commuters,
especially women andsecondary roads. children.
(v) Improved side walks, pedestrian facilities and (v) All
pedestrians, particularly women garmentmanagement. workers and
low-income groups, who walk to work.
(vi) Better road maintenance standards. (vi) All road users,
particularly users of motorizedvehicles and non-motorized
vehicles.
(vii) Enhanced road safety. (vii) All road users.
(viii) Reduced vehicular pollution and improved (viii) All
residents of Dhaka Metropolitan Area.environmental conditions.
4. Institutional and implementation arrangements:
The total implementation period is expected to be five
years.
Executing Agencies (ref. Annex 2 for a detailed description of
institutional arrangements):
The project will be designed and implemented with active
participation of all key stakeholders,including, private sector,
various citizen groups and representatives of the civil society of
Dhaka. Theresponsibilities for various aspects of project design,
execution and implementation will be shared bydifferent Government
agencies with adequate coordination among them. In view of the
multiplicity of
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organizations involved in the Dhaka transport sector, it was
agreed early that a preparation andcoordination body, to manage
project preparation and implementation, would be set up under
theMinistry of Communications (MOC) for overall project
preparation, coordination and management.Project Preparation Unit
(PPU) with a full-time Director, and representatives from Roads and
HighwaysDepartment (RHD), Metropolitan and Regional Planning
Authority (RAJUK), Dhaka City Corporation(DCC), Bangladesh Road
Transport Authority (BRTA) and Dhaka Metropolitan Police (DMP), has
beencoordinating the various aspects of project preparation, and
this coordination effort has worked well.This PPU has since been
converted to a Project Coordination Unit (PCU). The overall project
oversightand coordination will be done by the PCU and its new
parent agency, GDTPCB, which reports to MOC.In addition,
considering the strategic importance of the project, a high-level
Secretaries Committee ofconcerned Minist:ries has been set up to
expedite various critical decisions related to the project;
thiscommittee which was very effective in resolving issues during
project preparation will continue duringimplementation.
The Ministry of Communications through PCU/GDTPCB, will bear the
main responsibility tooversee project coordination and overall
project management. DCC, RHD, BRTA, DMP, RAJUK andDOE will look
after components in their own jurisdiction through specially
instituted ProjectImplementation Units (PlUs) or project
coordinators within their organizations. The above project
unitswill have key trained staff partly funded through DUTP, to
ensure proper accounting and financialmanagement of their
respective components. Procurement of civil works and equipment
allocated toDCC and RHD will be done by them in coordination with
PCU/GDTPCB; all other procurement,including technical assistance,
will be managed by PCU.
DCC will be a major important implementing agency, as about 60%
of the project investmentswill be oni facilities and activities
under its jurisdiction. DCC and RHD, with the two largest number
ofcomponents, will have Project Implementation Units (PIUs), each
under a Project Director to implementtheir respective components.
In order to avoid delays, it has been agreed with DCC that the
PIU/DCCwill work as an independent unit in DCC, reporting directly
to the Mayor or the Chief Executive of DCC.
Project Coordination:
The PCU/GDTPCB will liaise witlh the individual PIUs and various
other stakeholders to ensurecoordination and speedy implementation.
A project-level operations committee has been establishedunder
Executive Director (ED) of GDTPCB, with all PDs and Project
Coordinators as members, to meetregularly and assess project
progress on a periodic basis. To facilitate public consultation in
projectpreparation and implementation, the Government has set up a
Public Consultation Committee (PCC),under the chairmanship of DCC
Mayor and with representatives from key project agencies, NGOs
andthe private sector. This participatory process has worked well
during project preparation. In addition,zonal-level consultative
committees will be established, to ensure adequate public
involvement andfeedback at a more localized level; NGOs will
facilitate the working of these committees.
The Design Supervision and Monitoring (DSM) consultants to be
funded under the project (andrecently appointed) will carry out
important functions in project supervision, coordination and
monitoringof the project. DSM consultants will report to GDTPCB,
and will function as the "Engineer'sRepresentatives". Other experts
in traffic management, road safety, financial management and
otheraspects, provided under the project, will provide training in
their respective areas, and also assist inproject
implementation.
It is important to ensure that minimum disruptions/dislocations
occur due to the civil worksduring implementation. The project will
take every care to minimize dislocations due to civil worksduring
implementation. It would commence with relatively smaller civil
works components along with
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institutional, training and TA components, to provide maximum
early impact on traffic managementimprovements; construction of the
flyovers (which are the largest civil works component) have
beenscheduled to start only towards the third year of the project.
In addition, for intersection improvements,several alternatives
have been prepared and the one that will cause minimum disruptions
have beenchosen. Appropriate traffic diversion plans have already
been drawn up by the preparation consultants,and these will be
further revised by DSM consultants before the commencement of major
civil works.GOB has agreed to provide at least 200 additional
traffic policemen to DMP; DMP staff will also receiveadequate
training and the services of an Enforcement Specialist during the
implementation phase. Allthese are expected to ensure that
disruptions during the construction period would be minimal.
Project Oversight (policy guidance, etc.):
PCU/GDTPCB will be the agency responsible for overall project
oversight. It will coordinateclosely with other agencies involved
in project implementation. GDTPCB will also bear the
responsibilityfor policy guidance and advice on strategic issues to
the various agencies and stakeholders involved inproject design and
execution. (see also above para on Project Coordination for
details)
Accounting, financial reporting and auditing arrangements:
PCU/GDTPCB and PIU of DCC and RHD will have accounting units
with qualified accountants.These units will maintain their
respective accounts. PCU will gather required information from
otherimplementing agencies/organizations to prepare consolidated
financial statements for the project and willalso maintain
consolidated accounts for all project expenditures. A computerized
financial reportingsystem will be established in the PCU/GDTPCB and
the PIUs of DCC and RHD before March 31, 2000.Until then project
accounts will be maintained employing traditional book-keeping
methods. Astandardized financial reporting format acceptable to IDA
will be included in the Government's ProjectImplementation Plan
(PIP).
For statutory purposes, the Comptroller and Auditor General
(C&AG), through the Directorate ofAudit - Foreign Aided
Projects, carries out audits of foreign aided projects. In
addition, GOB has agreedto appoint accredited private auditors
acceptable to IDA for timely audit of all project accounts,
projectfinancial statements and SOE's relating to all project units
(PCU and PIUs). The audit report will besubmitted to IDA no later
than six months after the end of each fiscal year.
In addition, two operational audits will be carried out by a
private audit firm acceptable to IDA,one prior to mid-term review
and the other, an year prior to credit closing. The terms of
reference ofthese operational audits would cover: (a) assessment of
adequacy of financial and operational controls;(b) that the project
maintenance cost will be sufficiently met in future by recurring
revenue earnings;(c)identification of weaknesses in the financial
management system and give recommendation forimprovements etc. The
cost for conducting such audits will be included in the project
costs and beeligible for financing under the project.
Monitoring and evaluation arrangements:
The project has set forth benchmarks and performance indicators
(Annex 1) to evaluate progresson individual components. These have
been agreed during negotiations. These will be periodicallyreviewed
to see their effectiveness against performance standards and
implementation schedules. Besides,the PCU/GDTPCB will submit
quarterly progress reports to IDA. A mid-term review will be
conductedjointly by IDA and GOB-GDTPCB, after two-and-a-half years
to assess progress and improve on projectimplementation
performance. Implementation of the Resettlement Action Plan (see
section E. 5) will bemonitored internally by the project
authorities on an ongoing basis, and supervised regularly by
IDA.Independent external evaluations of impacts will also be
undertaken, funded through the project.
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D: Project Ratiornale
1. Project alternatives considered and reasons for
rejection.
Capital Intensive versus Management Intensive: The option of
infrastructure investments incapital intensive projects, such as
light rail and new roads, was examined. However, in the light
ofprevious UNDP-funded studies, it has been agreed with the
Government that the project will adopt aphased approach to address
the transport problems in DMA, with greater thrust on improving
trafficplanning, management and coordination arrangements,
enhancing institutional capacities, and withimmediate focus on
improved scheduled bus services provided by the private sector.
Examining otheroptions will be part of the long-term transport plan
for DMA, and this will be prepared under DUTP.
Creating GDTPCB instead of retro-fitting existing institutions
with planning and coordinationfunctions: The project examined the
option of equipping and strengthenilng some of the
existinginstitutions with the task of planning and coordinating
transport planning and investments for the GreaterDhaka region.
H[owever, the existing institutions lacked the necessary coverage,
mandates andinstitutional capacities to deal with this issue
effectively. None of the existing institutions is in a positionto
ensure effective coordination of transport-related activities and
investments for the entire GreaterDhaka region. Therefore, in the
light of detailed studies, and based on the recommendations
ofinstitutional experts, local consultants and GOB, it was decided
that a separate organization, GDTPCB,dedicated to planning and
coordinating transport-related investments was a better alternative
to deal withthe existing and future transport issues in this
area.
Selection of intersection improvements: The intersections
selected for improvement, a keyproject component, were selected in
the light of detailed studies showing with and without
projectalternatives and with different technical alternatives. This
approach also applies to other maincomponents.
NMT versus Motorized Vehicles: The option of banning slow moving
cycle-rickshaw trafficfrom city roads was examined. In view of the
considerable environmental, employment, and socialbenefits of
cycle-rickshaws, it was agreed to develop approaches to better
manage cycle-rickshaw trafficon the streets of Dhaka. Much as these
vehicles create traffic conflict and congestion, they are also
ameans of livelihood for about a million people poor presently
(including dependent families). It was feltthat the development of
other less expensive and faster mass transit modes like good bus
services was abetter market based alternative for limiting the
proliferation of rickshaws than an outright ban. The
cycle-rickshaws will be given a positive role as feeder services to
bus systems and as localized transport onnon-arterial roads that
form about 90% of the DMA's road network. This will be through
identificationof NMT routes, construction of small missing road
links to form an NMT network, better parkingfacilities for NMT on
secondary roads, and through provision of some underpasses to
facilitate easyNMT movement and reduce conflict between various
slow and fast modes.
Dedicated busways versus other options: The feasibility of
providing dedicated busways alongkey bus routes was examined.
However, considering the road space available, and the present
volume ofbus traffic and other modes, it was decided that dedicated
bus routes will not be immediately feasible.Instead the buses will
be provided with priority lanes at critical locations in the
network, such as approachto intersections, ramps of interchanges
and etc.
Construction of grade-separated interchanges: The project
examined the option of buildingflyovers at five key intersections
to ease traffic flow and bring network-wide improvements.
However,after considering the magnitude of investments required,
resettlement and other social impacts andpotential of introducing
effective traffic management measures, it was decided that the
project willinclude only'two interchanges, at Mohakhali and
Jatrabari.
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2. Major related projects financed by the Bank and/or other
development agencies (completed, ongoingand planned):
None so far in urban transport.
3. Lessons learned and reflected in the project design:
The proposed project would be the first Bank financed urban
transport project in Bangladesh.However, the Bank has been involved
in a number of projects involving roads improvements
andinfrastructure services upgrading in Bangladesh. Recently, IDA's
Urban Development Project 1, withcomponents for environmental
improvements for Dhaka and Chittagong cities, was completed in
June1998. While the project has been satisfactory overall, the
performance of DCC in procurement and landacquisition was assessed
as weak. In general, many of the projects have suffered from: (a)
poor quality atentry; (b) weak institutional capacity in project
management and monitoring;(c) procurement delays; and(d) lack of
sustainability in maintaining the capital investments made under
the project. More recent andongoing projects are generally free
from these short-comings. The key lessons learnt and incorporated
inthe project, are:
Policy and Institutional Design: (a) required policy and
institutional changes have been obtainedupfront and strengthening
institutional capacity and effective coordination have been given
considerablefocus from the beginning of project preparation; (b)
borrower ownership is crucial, as also participationof key project
beneficiaries and stakeholders. This has been ensured through
borrower undertakings tospecific actions at various stages of
project preparation and implementation (whose compliance has
beenconfirmed), and extensive general and focused public
consultation and participation; (c) private sectorprovision of
transport (bus) services shall be complemented by provision of
adequate infrastructure andamenities, thus defining the roles of
the private and public sectors and encouraging
private-publicpartnership in the provision and maintenance of
transport services; and (d) project managementarrangements have
been made strong to ensure accountability, transparency and avoid
delays, and keyactions (such as setting up GDTPCB, PCU/PIUs and DSM
consultants) have been completed before IDABoard consideration of
DUTP credit.
Economic and Financial: (a) sustainability is ensured through
appropriate cost recoveryfacilitated through the formation of a
Road and Traffic Maintenance Fund (RTMF), by ensuring
fundingarrangements for regular maintenance and by strengthening
the maintenance department of DCC; and(b)careful monitoring and
evaluation criteria have been incorporated in project design, to
ensuresustainability of investments; and
Technical design: (a) careful economic and technical analysis of
various project sub-componentshave been effected to ensure their
feasibility and quality at entry; (b) project design has been kept
simpleand flexible; (c) when trying something new, pilots were
tried first, such as in the case of introduction ofpremium bus
services.
4. Indications of borrower commitment and ownership:
The borrower has been fully committed to the project from its
inception; it had made persistentrequests to IDA for including DUTP
under the CAS, and has actively participated in defining
projectobjectives and in preparing a framework for implementation.
A structured consultation process hasincorporated views of
different stakeholders into the project design, and contributed to
broad support forthe project. The specific actions taken by the
borrower during project preparation include: (a)deregulation of
fares on premium bus services and other incentives, encouraging
private sector greaterparticipation in the provision of improved
bus services; (b) introduction of special bus routes on a
pilotbasis which have become a great success with the public
subsequently. The Government has also
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committed to extending special bus lanes to other major
corridors in the city; (c) setting up a PublicConsultative Group
(PCG) with the Mayor of Dhaka city as the Chairman, and members
from the privatesector, media, beneficiary groups and other
stakeholders, to discuss project-design and issues; whichassisted
project design considerably; (d) major advance implementation
actions completed such as settingup the new coordination body
GDTPCB, appointing project supervision and monitoring consultants
andsetting up project implementation units, all before IDA Board
date; and (e) overall enthusiastic supportfrom various levels of
Government, including Ministers, higher level officials of main
agencies and theMayor and officials of the Dhaka City Corporation,
as also from public, transport operators, women'sgroups, NGOs and
media, for the project.
5. Value added of Bank support in this project:
The role of IDA in addressing urban transport problems in Dhaka
is three fold. First, drawingupon its international and regional
experience, IDA is in a strong position to support the Government
informulating the strategies necessary to ensure that an adequate,
efficient, and sustainable level oftransport services is available
to the city residents. IDA has considerable experience in
undertakingurban transport projects in several countries, in the
process, bringing about infrastructure investments andinstitutional
and policy changes and adequate sustainability. The fact that
Government made persistentrequests for IDA assistance and
leadership for sorting out Dhaka's complex transport problems
isrecognition of IDA's preeminent role in this sector. Second, IDA
can assist the Government inimplementing these strategies through
both the financing of technical advice, training and investmentsand
direct analytical support to the Government during preparation and
implementation. Assistance fromIDA during preparation has
contributed to a more holistic and integrated approach, whiclh
includesaddressing social and environmental issues along with the
technical dimensions of the project. Third, thispioneering project
will help prepare future strategy for dealing with Dhaka's
transport problems and helpattract co-financing.
E: Summary Project Analysis (Detailed assessments are in the
project file, see Annex 8)
1. Economic (supported by Annex 4):
[x] Cost-Benefit Analysis: NPV=US$ 124 million; ERR=23% [x] Cost
Effectiveness Analysis: [ Other
Economic analysis is conducted at two levels: for the overall
project, and for major individualcomponents. At the first level,
total project benefits are evaluated against the costs of all
physicalcomponents, equipment, and technical assistance (excludipg
follow-up studies and including physicalcontingencies), which
constitute 87% of total project cost. The result from this analysis
is treated as thebase case in the sensitivity tests. The major
direct economic benefits of the project are expected to
bereductions of vehicle operating costs (VOC) and travel time
through network-wide mitigation of trafficcongestion and delays,
rehabilitation of deteriorated roads, and improved bus terminals.
There will alsobe additional benefits from improved traffic safety
and reduced auto pollution. However, due to shortageof reliable
data, the expected traffic safety and environmental benefits have
not been quantified. Theroad network traffic benefits, which are
the major part of the total project benefits, are evaluated using
anetwork-based travel demand model. The model is calibrated with
data from a city-wide travel origin anddestination survey and
traffic counts at various locations; it is capable of simulating
network trafficperformance under scenarios with and without the
project. The ERR for all physical componentscontributing to the
network-wide traffic improvement (including equipment and related
technicalassistance) is estimated 23%. Sensitivity tests are
performed by assuming alternative scenarios withalternative traffic
growth rate, cost overruns, benefit reductions, or a combination of
all, against the basecase described above. The test results suggest
that the project economic viability is robust. The analysisalso
tests the impact of traffic enforcement on the project performance.
The results suggest that theeffective traffic enforcement is very
important in the realization of expected benefits.
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At the second level, detailed economic analysis has been made
for each of the following majorphysical components: intersection
improvements, flyovers, inter-district bus terminal rehabilitation,
roadrehabilitation, and NMT underpasses. These analyses are
conducted for assessing the economic viabilityof the above
individual components even treated as stand-alone projects. These
components altogetherrepresent 63% of the total project baseline
cost. Their estimated ERRs range from 16% to 38%, with aweighted
ERR of 27%.
2. Financial Assessment
Project costs: See section C and Annex 3 and for detailed
project costs.
Financing plan: Cover sheet and Annex 3 show details of the
financing plan. The proposed creditof US$ 177.0 million would
finance about 75% of the total costs (US$ 234.2, incliding taxes
and duties).The remaining portion would be financed by GOB (US$
44.1 m) and DCC (US$ 13.1 In).
Fiscal impact: About 60% of the project investments would be for
items directly unider thejurisdiction of DCC. Clear understanding
on the share of DCC and GOB in providing counterpart fundshave been
agreed in advance (see Annex 3). DCC generally depends on grant
funds from GOB for majortransport related development and
rehabilitation investments, such as covered by DUTP. since
(i)Dhaka's transport constraints are perceived as a national
problem, (ii) GOB receives most of the user feesfrom transport
users in the form of fuel taxes and vehicle fees, and (iii) DCC's
financial position ispresently weak. GOB proposes to transfer
project funds, both IDA and GOB share, to DCC on a grantbasis. DCC
will contribute 10% of project costs on all items excluding
flyovers, resettlemenit andtechnical assistance. An analysis of
DCC's financial profile and projections indicate that DCC will
beable to provide adequate counterpart project funds, as agreed,
and 40% of the expected maintenianice costs(increasing later), as
reflected in the project agreements.
For regular maintenance of its facilities, DCC generally
provides funding from its own sources,but this funding is
inadequate. Therefore, special measures have been designed to
ensure that the trafficand road facilities under DCC, including
those created under the project are satisfactorily
maintainedthrough adequate availability of funds,
beneficiary/private sector oversight and an efficient
maintenancedepartment. The decision to establish a Road and Traffic
Maintenance Fund (RTMF) that will bemanaged by DCC, with
involvement of user representatives and private sector transport
operators, is astep in this direction (also ref. section C. 2 -
Addressing O&M and Cost Recovery Issues).
3. Technical:
Two key agencies involved in implementation of the projects,
particularly civil workcomponents, are the DCC and RHD. DCC's
technical capacities are presently weak in areas liketransportation
planning or road and traffic engineering; these aspects will be
strengthened through theproject. DCC has established a Road
Maintenance Unit (RMU) and a Traffic Engineering and RoadSafety
Unit (TERSU). DCC has already taken steps to recruit additional
technical staff who will betrained in the above mentioned skills
through project activities and specialized training courses,
providedunder the project. RHD possesses considerable experience in
execution of bridge and highway projects;this experience will be
invaluable during the implementation of the flyover components in
the project.
The project will emphasize the introduction of international
"best practice" to the urban transportsector in Bangladesh; for
e.g., in modem traffic management techniques, such as design of
complextraffic signalization, and introduction of "bus-only" lanes
or busways along existing major roads in DMA.International
consultants, assisted by local consultants, have been involved in
the project preparation. Onthe procurement side, bid packages will
be sized, and pre-qualification criteria prescribed to
sufficientlyinterest well-qualified contractors. Construction
supervision will be the responsibility of international
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consultants, in joint venture with local engineering firms.
Additional operational audits will be conductedduring project
implementation to ensure adherence to technical quality and
standards.
Road maintenance works presently carried out in DMA need
introduction of new techniques. Theproject will introduce rational
road maintenance planning, strengthened work methods and high
degree ofquality control. To ensure long-term sustainability of
improvements in the technical quality of roadworks, the project
will include quality management methods, technical audits, modern
financial and costaccounting systems and a mechanism for annual
O&M built into the system..
4. Institutional:
a. Executing agencies
Multiplicity of central government ministries and departments,
departments of DCC, and otheragencies involved in
planning/implementation of infrastructure projects in DMA, create a
difficultenvironment in coordinating policies and other decisions
related to urban transport and regional land usein the Dhaka area.
To resolve this problem, special coordination arrangements were
successfully triedout during project preparation, and have been
agreed for in the implementing phase, as described insection C-4.
Essentially, the project will be implemented by beneficiary
agencies through projectimplementation units, coordinated through
the PCU under GDTPCB.
The newly created GDTPCB fills the long felt need for an apex
body to coordinate metropolitantransport planning and decision
making on transport policy and regulations, on a continuing basis.
Thefunctions of GDTPCB will also be coordinated with structure
planning and land-use planninig for themetropolitan region, so that
transport planning by GDTPCB goes hand in hand with the
regionaldevelopment vision. Following a recent UNDP-assisted Dhaka
Structure Plan exercise, and a widelyattended workshop on the
Structure Plan conducted in December 1995, the Government of
Bangladeshhas set up a Capital Area Development Coordination
Committee for the metropolitan structuredevelopment, under the
Chairmanship of the Minister of Local Government, and with the
Mayor ofDhaka as Joint-Convenor. This is a good start towards
setting up a coordination body to resolvemetropolitan development
and regional planning issues, which involve Dhaka and other
smallMunicipalities as well; the Structure Plan Committee is
working on a future form of organization formore sustainable
metropolitan coordination in land use planning and other regional
planning decisions.GDTPCB will coordinate its work with this larger
and more important regional planning and coordinationbody.
b. Project Management
The Ministry of Communications through PCU/GDTPCB, will bear the
main responsibility tooversee project coordination and overall
project management. The supervision consultants funded underthe
project will be attached to GDTPCB. DCC, RHD, BRTA, DMP, RAJUK and
DOE will look aftercomponents in their own jurisdiction through
specially instituted Project Implementation Units (PlUs) orother
dedicated units within their organizations. Efforts will be made to
strengthen the projectmanagement capacities of these institutions.
The above project units will also oversee procurement, andwill have
key trained staff to ensure proper accounting and financial
management of their respectivecomponents. A Secretary-level
inter-ministerial committee has been established for
inter-ministerialcoordination of preparation and implementation,
and this arrangement is working well presently.
5. Social:
All key stakeholders were consulted extensively during project
preparation. The project hadtaken considerable efforts to
mainstream social issues and concerns within the overall context of
projectpreparation from very early stage on in the project
preparation. To ensure that the interests and concerns
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Page 16
of the most vulnerable groups, eight Public Consultative
Committee (PCC) meetings and a series ofworkshops &
consultative meetings were held with various stakeholder groups,
such as the lower-incomegroups, pedestrians, users of
tariff-regulated ordinary buses, users of tariff-deregulated
Premium BusService (PBS), cycle rickshaw owner and operator
associations, three-wheeler owner and operatorassociations,
bus-truck owner and operator associations, hawker associations,
women's groups andgarment workers. The project team has extensively
studied issues related to these groups. It has alsointeracted with
NGOs, including women's NGOs, environmental NGOs, and other
community-basedorganizations (CBOs) during project preparation.
NGOs representing or working with these interestgroups were
actively associated with project preparation, and will be consulted
during projectimplementation.
Potential impacts have been studied as a part of the overall
social assessment. The project willnecessitate some resettlement at
sites of new flyovers, road intersections and sidewalk
improvemetnts. Inthe preparation of detailed designs for civil work
components, an important consideration has been theneed to minimize
private land acquisition and impact on existing business and
residential establishments.Through this integrated approach, design
alternatives have been selected whicih have minimized
negativesocial impacts.
For all components together, around 6,508 sq.m. of private land
will need to be acquired. About80% of this is associated with
construction of the two flyovers. The project's impact on
residentialproperties is quite small. Some 10 dwellings will be
affected, including 7 slum dwellings. On the otherhand, some 579
non-residential establishments (offices, personal services,
clinics, warehouses andworkshops) will be affected. The majority of
these businesses (295) are at the twoflyover sites whiie thenext
largest group (143) is at Gabtali Inter District Bus Terminal
(IDBT). In addition, permanenet, semi-permanent and mobile hawkers
operating on side-walks of the roads, on Government land will also
beaffected. The total for this group is 564 of which 410 (73%) are
transient vendors. About 75% of themare located at the 20
intersections to be improved. Over half of the semi-permanent
stalls (62 of 126) areassociated with the Gabtali IDBT and the
Jatrabari flyover. The 28 permanent stalls that will be affectedare
spread throughout the project area.
A policy framework for addressing unavoidable negative impacts
has been prepared inaccordance with OD 4.30. A Resettlement Action
Plan (RAP) detailing the implementation mechaniismsfor assisting
affected people with compensation, relocation, livelihood
assistance, and other supportmechanisms, consistent with IDA
guidelines have been agreed with GOB.
Agreement has been reached about organizational mechanisms for
implementing RAP, and staffare currently being mobilized. Since the
current institutional capacity to deal with social impacts is
weak,IDA will continue to supervise carefully the development of
the organizational setup for this component.
6. Environmental assessment: Environmental Category [IA [x] B []
C
In view of the significant positive environmental impact of the
project, the assignedEnvironmental Assessment Category is "B". A
detailed environmental impact study of various projectcomponents
has been completed. Based on this, necessary mitigation measures
have been incorporatedin project component design, in accordance
with relevant IDA guidelines. The project will havesubstantial
positive impact on improving the air quality, by reducing vehicular
emissions throughenforcement and new standards; in reducing
congestion, road accident rates, and commuting time; and ingeneral
improving the quality of urban life. The Department of Environment
(DOE) and the BRTA haveagreed to develop and implement reforms in a
number of areas that will bring substantial improvementsto the air
quality. Some of these are: (a) develop and enforce emission
standards for new and in-usevehicle imports of two-stroke engines,
and other vehicles; (b) restrict new registrations, leading to
the
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eventual phasing out of highly polluting two-stroke engine three
wheelers (baby-taxis); (c) provideincentives for increasing the
share of bus transport with newer/better (less polluting) buses;
(d) provideequipment for enforcement of standards; (e) evaluate and
promote ways to reduce emissions from twostroke and diesel
vehicles; (f) conduct awareness raising campaigns; (g) establish
vehicular safety andemissions monitoring capability at BRTA; (h)
collect and disseminate ambient air quality data (especiallyfor
critical traffic intersections) through DOE; and (i) promote other
related activities for control of airpollution within the Greater
Dhaka area. A separate IDA-supported, air quality management
project forDMA is also being developed in cooperation with DOE,
which is consistent with DUTP.
7. Participatory approach [key stakeholders, how involved, and
what they have influenced. ifparticipatory approach not used,
describe why not applicable]:
Consultation and Collaboration:
During project preparation, the urban community in Dhaka
metropolitan area was consultedextensively. These included
representatives of government agencies, the Chamber of
Commerce,NGOs,community groups, vehicle manufacturers and
assemblers, research institutes, women's groups, vehicle-owner and
drivers and operators associations (of buses, trucks, 2-stroke
engine three-wheelers andrickshaws), rickshaw-pullers' association,
and other stakeholders. A number of demand assessments ofaffected
people were carried out. A household survey was carried out by a
local NGO to assess thespecific transport constraints of poor women
in Dhaka city. The survey was followed by a participationworkshop
with university students, garment workers, and other working women,
who face majortransport constraints at present. A survey of
rickshaw pullers association and users of the pilot premiumbus
services were also carried out. Other detailed surveys of the key
stake-holders, relevant governmentagencies, banking institutes,
academic institutes, community groups, beneficiaries were also
carried out.The findings of consultations were utilized for the
project design. A workshop to discuss ways to reduceair pollution
was conducted in collaboration with all stakeholders and
recommendations are beingincorporated in this and other projects.
More workshops with user groups are planned. Similarly,support
mechanisms developed as part of the project's Resettlement Action
Plan have been developedthrough consultations with potentially
affected people.
During implementation of this project, extensive consultation
and collaboration with keystakeholders on an continued basis is
envisaged. Technical assistance is being provided under the
projectto facilitate such consultation and collaboration.
Government has set up Public Consultation Commilittee(PCC) for the
project under the Chairmanship of Dhaka Mayor with representation
for key user-interests;PCG meets frequently. Localized
participation groups facilitated by NGOs are also envisaged.
a. Primary beneficiaries and other affected groups:
Primary beneficiaries include pedestrian commuters, users of
public transport (buses), othermotorized and non-motorized vehicle
users, and private bus operators, and the large community of
DMAresidents, and business man establishments. Affected groups
include various categories of residential andbusiness
establishments affected by land acquisition and resettlement, and
operators of two-stroke auto-rickshaws.
b. Other key stakeholders: None
F: Sustainability and Risks
1. Sustainability:
The proposed project fosters a new approach to urban transport
planning in DMA, which placesmore emphasis and responsibility
directly on the community, and is geared to their priorities. A
major
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thrust of the proposed project is on the "software" components,
aimed at improving traffic managementand enforcement of traffic
regulations, bettering roads rehabilitation and establishing
maintenancestandards, and strengthening line agencies capability to
monitor and coordinate transport planning inDhaka, these efforts
would cumulatively improve sustainability. The proposed project is
also seen as thefirst major effort in providing a sustainable,
long-term solution to the mounting urban transport problemsin DMA,
to be followed by other potential projects (which will be studied
under DUTP).
A key action in ensuring sustainability of the proposed
investments is addressing cost recoveryand O&M issues. This
will be through the establishment of a Road and Traffic
Mailtelnalnce Fund(RTMF, see also section C. 2) for Dhaka
Metropolitan Area. Establishment of RTMF will ensureadequate
funding for periodic and routine maintenance of DCC's road
infrastructure network includingroads, footpaths, drains, etc.,
primarily from user charges. Annual budget requirement for thie
proposedRTMF, estimates based on requests of O&M for the new
facilities and all existing facilities will be sharedbetween GOB
and DCC at a ratio of 60:40 respectively, with DCC share increasing
in the last year, andbe managed as a separate, designated account.
This will be operationalized in 1999/2000. RTMF willhave
stakeholder supervision and proper auditing to ensure that funds
are used for maintenanice. Inaddition GOB/DCC will prepare and
implement two plans, one for improved management and the otherfor
adequate cost recovery, in consultation with IDA, to ensure better
managemenit of the Inter-DistrictBus Terminals and adequate cost
recovery from the investments made by the project. Sustainability
willalso be enhanced by creating an enabling environment for
private sector participation in the provision ofbuses (private
sector share being about 95%); through public participation in
project preparation andimplementation, including service users and
providers; organizing public awareness programs; enhancingtechnical
capacity of DCC for roads maintenance; and enhancing DMP capability
for traffic monitoringand enforcing regulations.
2. Critical Risks (reflecting assumptions in the fourth column
ofAnnex 1):
Risk Risk Risk Minimization MeasureRating
Annex 1, cell "from Outputs to Objective"
Institutional Risks: Inadequate coordination M Established a new
agency (GDTPCB) toamong different line agencies, weak project
address present problems in coordination inmanagement capacities.
urban transport planning and coordination.
Also, important role during DUTP forcoordination.
Central government support througlh theexecuting agency. Program
manlagementsupport to GDTPCB. Technical supportthrough TA
consultants. Capacity buildingsupport through TA in traffic
management,regulatory environment, safety andenvironment.
A higher Secretary-level Committee for inter-ministerial
coordination which has workedwell during project preparation.
Operational Risks: Failure to implement bus M Pilot program
initiated during project
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priority schemes, traffic management and preparation to test
viability of bus priorityimplementation schemes, road maintenance,
schemes was very successful; increased rolecontrolling growth of
2-stroke engines, and for private sector in bus operations; TA
forkeeping sidewallks clear of encroachments improved traffic
management; RTMF for
ensuring O&M; strengthening BRTA formonitoring vehicle
inspection; and supportfor DOE for setting up air quality
standardsand monitoring these.
Annex 1, cell "from Components to Outputs"
Procurement risks: Delays in necessary land M Executing agency
to identify resettlementacquisition where needed, and in needs,
procurement packaging and schedule.procurement of equipment, works,
and Use of standard bidding documents andconsultanms. procedures.
Workshop on Bank procurement
by consultants. Advance actions before IDABoard (in appointing
project supervisionconsultants and key project staff). Putting
allproject procedures and staff in place is acredit effectiveness
condition.
Implementation risks: Difficult traffic S Comprehensive
preparation, involving alldiversion management plans during
concerned agencies, sequencing of civil workimplementation of civil
works. components, coordination with DMP and
DCC in preparing the advance trafficdiversion, recruitment of an
enforcementspecialist and 200 additional policemen inDMP during
implementation.
Operational risks: (a) Insufficient experience M Sufficient TA
resources to procure equipmentwith traffic planning, management and
for BRTA for measurement of ambient airenforcement, implementation
of vehicle quality, mobile axle load checking andstandards,
emission controls. pollution monitoring; strengthening DCC
technical units for road maintenance andtraffic engineering
units; training of DMPtraffic police, and strengthening of
BRTAstaff. Training for related staff in key projectagencies.
(b) Problems with contractor or consultants N International
Supervision Consultantsperformance Workshops and training --
strengthening of
BRTA/DCC management skills.
(c) Problems with institutional capacities to H Considerable
attention paid to enhance theexecute their components in a timely
manner capacity of the various institutions involved,
through TA and training. Also special projectmanagement and
coordination arrangementsenvisaged within these institutions
tominimize such risks. Completing of all keyappointments of staff,
consultants and
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implementing modalities as conditions ofBoard.
Financing risks: Counterpart budget N Financing plans endorsed
by Government,shortages DCC share relatively small, and review
shows it is within its annual income.
Construction risks: Delays in construction N Specific attention
given in the design tophase of flyovers, causing congestion during
minimize construction delays andconstruction period development of
alternate routes during
construction phase, also Institutionalstrengthening in traffic
management of DCC,DMP, BRTA and RHD.
Delays or inadequacies in implementation of S Systematic
supervision by IDA to ensureResettlement Action Plan caused by lack
of overall coordination; technical assistance toinstitutional
capacity to address social selected project personnel to
enhanceimpacts capacity; partnerships with local NGOs and
other civil society organizations.
Inadequate private sector response/credit M Powerful market
incentives (such as vehicleavailability to invest in bus fleets, to
free-tariff setting, and reduced operative costscomplement DUTP's
public sector brought through DUTP) expected to work ininvestments.
favor of adequate private sector response, as
has already happened in other city bus routes.The pilot
initiative already brought above 100new buses. More being planned
by manyfirms. GOB/IDA assisted through busfinancing seminars and
bus depots.
Overall Risk Rating M
Risk Rating - H (High Risk), S (Substantial Risk), M (Modest
Risk), N (Negligible or Low Risk)
3. Possible Controversial Aspects:
Overall reception to the project from press and the public
alike, have been very positive. Therehave been very complimentary
media reports pointing to the importance of DUTP and praising
variouson-going and proposed initiatives (like the Premium Bus
Services) under the project;NGO's have alsobeen supportive of the
project's positive approach to vulnerable groups like, poor
cycle-rickshaw pullers(since project wants to give them positive
role, rather than ban them), garment workers and women.
Every care is being taken to involve affected persons/groups
through proactive participatorymeans, and to follow IDA Guidelines
on resettlement action planning. However, because of the
politicalpolarization and other sensitivities, some protests cannot
be ruled out from persons affected by the projectsuch as, those
affected by potential land acquisition, hawkers who may have to be
cleared from sidestreets in some cases to ensure pedestrians'
priority, and auto-rickshaw operators whose pollutingvehicles will
face new restrictions under the project. Auto-rickshaw owners'
association has alreadyestablished a co-operative for replacement
of the existing two-stroke engine three-wheelers by minibusesand
taxis, and in future, by less polluting 4-stroke engine three
wheelers. We are facilitating this process,particularly in terms of
providing guidance to access financing from banks and non-bank
financialinstitutions.
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G: Main Credit Conditions
There will be a Development Credit Agreement (DCA) with GOB and
a Project Agreement (PA) withDCC.1. Effectiveness C-onditions:
(a) Association to receive evidence that GOB and DCC have
established project managementarrangements and procedures
satisfactory to the Association;
(b) Signing of the Subsidiary Grant Agreement (SGA) between GOB
and DCC; and(c) Receipt of legal opinions regarding DCA, PA and
SGA.
2. Other [classify according to covenant types used in the Legal
Agreements]:
Other:During negotiations, in addition to standard covenants,
agreement was reached with GOB and DCC onthe following aspects:
(a) Project management arrangements: Establishment of the
Project Coordination Unit ( PCU) underGDTPCB, and PlUs under other
implementing agencies, staffing them with qualified staff,
andmaintaining these units during project implementation to
implement and monitor project; and to keepa high level Secretaries'
committee for inter-Ministerial consultation to expedite
projectimplementation;
(b) Financing arrangements: Two special accounts, one under DCC
and another under PCU; retroactivefinancing of early works,
rehabilitation of flood damaged roads and related technical
assistance,subject to these works/TA meeting all IDA
procedures;
(c) Auditing arrangements, including annual audits by private
auditors, and two operational audits beforemid-term review and
project closing;
(d) Completion of GDTPCB staffing plan and all appointments by
end-April 1999;(e) Phased plan for funding RTMF from July 1999,
with agreed annual funding levels from GOB and
DCC up to year 2004, and arrangements for overseeing the fund's
operation with the involvement ofprivate sector and other agencies,
and the fund's audit;
(f) Preparation by DCC of annual maintenance plan for roads and
traffic facilities, for IDA review, andits implementation;
(g) Preparation by DCC of a management improvement plan for the
bus terminals improved under theproject, and an adequate
cost-recovery plan from the terminals, satisfactory to IDA, before
award ofcontracts, for implementation under a time-phased
program;
(h) Implementing a national road user charge recovery plan to be
agreed with IDA in the light of theRoad User Charges Study being
completed under the on going RRMP 2 project;
(i) Keeping free market entry for private sector bus operators
in DMA subject to safety and qualitystandards, deregulated
fare-structure for premium bus operations and taking all actions to
ensure freeand fair competition among operators; review of the
changes needed in bus and other transportvehicle operations and
regulatory system at mid-term review of the project, based on a
study of thegrowth of bus transport services after the first two
years of the project, to be completed by GOB;
(j) Prior review by GDTPCB before the undertaking of any new
transport infrastructure investmentsexceeding US$ 5m per project in
DMA, and exchanging views with IDA to ensure that there is
noconflict with DUTP components;
(k) Project monitoring to be done as per agreed plan, with
impact studies before project completion;(I) Implementation of RAP
and EAP as per IDA guidelines, as agreed at negotiations; and(m)
Implement following actions to reduce transport related
air-pollution in Dhaka/Bangladesh:
(i) discontinue registration of additional two-stroke engine
three-wheelers in Dhaka after July 1,
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1999;(ii) phase out from Dhaka all existing two-stroke engine
three wheelers by January 1, 2003;
(iii) discontinue importation of two-stroke engine
three-wheelers and their engines, andreconditioned buses, into
Bangladesh by July, 2001; and
(iv) develop vehicle-specific emission standards for all types
of imported and locally assembledmotor vehicles by June 30,
2000.
H. Readiness for Implementation
[x] The engineering design documents for the first year's
activities are complete and ready for the startof project
implementation. [ I Not applicable.
[x] The procurement documents for the first year's activities
are complete and ready for the start ofproject implementation.[x]
The Project Implementation Plan has been appraised and found to be
realistic and of satisfactoryquality.[ I The following items are
lacking and are discussed under loan conditions (Section G):
I. Compliance with Bank Policies
[x] This project complies with all applicable Bank policies.
[l ] [The following exceptions to Bank policies are recommended
for approval:. The project complieswith all other applicable Bank
policies.]
Task Team Leader/Task Leader: Thamn a a SASIN)
Sector Manager: Frannie Humplick (SASIN)
Country Direr: Frederick Temple (SASBD)
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Annex 1Project Design Summary
Narrative Summary Performance Indicators Monitoring &
Assumptions/RiskEvaluation*
CAS Objectives: GOAL to Bank MissionAccelerate economicgrowth
and reduce povertyby among other measures:increasing both public
andprivate investments incritical infrastructureareas,
institutionalstrengthening, reformingregulatory framework
andfostering participation ofthe poor in the growthprocess
Project Development DO to GOAL:Objective (DO):
1. Improve urban transport 1.1 Living and vork environment in
greater Economic 1. I Future growth of the cityservices in an Dhaka
area improved; surveys; is in conformity vithenvironmentally 1.2
Road capacities increased through traffic Traffic surveys;
coordinated developmentsustainable manner for management and
improvements/rehabilitation of Air quality plans;Dhaka residents,
including road network; surveys: 1.2 Implementing agenciesvomen and
poor people. 1.3 Pedestrian safety enhanced; Bus transport have the
necessary resources
1.4 Bus services improved, providing better study by mid- and
competent staff toaccess to women and low-income groups: term
review. manage and enforce traffic1.5 Environmental pollution from
2-stroke auto- rules;rickshaws, poor quality buses and trucks
reduced. 1.3 Suitable measures are
put in place to controlgrowth of 2-stroke engines;1.4 Incentives
to allow theprivate sector to invest inurban buses are in
place.
2. Institutional and Policy 2.1 GDTPCB adequately staffed and
functional Records of 2.1 Relevant staff madeFramework
strengthenied. by July 31, 1999: implementing available for
training and
2.2 PCU and PlUs within key agencies fully agency stays on the
job for anstaffed and functional; extended period.2.3 Staff in
implementing agencies trained.
Project Outputs: Output to DO:
I. Reduction in I. I Average delay at most critical
intersections Transport 1.1 Traffic managementcongestion and delays
reduced by 50% by the end of project: surveys, plans are
implemented
1.2 Average speed by motorized vehicles Records of 1.2 Trained
police forceincreased from 15 km/hour to 30 km/hour by the
implementing available