Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00006271 IMPLEMENTATION COMPLETION AND RESULTS REPORT P123828 ON A LOAN/CREDIT/GRANT IN THE AMOUNT OF SDR 266.4 MILLION (US$401 MILLION EQUIVALENT) TO THE People's Republic of Bangladesh FOR A/THE Second Rural Transport Improvement Project {June 30, 2023} Transport Global Practice South Asia Region CURRENCY EQUIVALENTS (Exchange Rate Effective {May 25, 2023}) Bangladesh Taka Currency Unit = (BDT) BDT 107.23 = US$1 US$1.33 = SDR 1 FISCAL YEAR July 1 - June 30 Regional Vice President: Martin Raiser Country Director: Abdoulaye Seck Regional Director: Pankaj Gupta Practice Manager: Fei Deng Task Team Leader(s): B K M Ashraful Islam, Natalya Stankevich ICR Main Contributor: Md Mokaddesul Hoque ABBREVIATIONS AND ACRONYMS AF Additional Financing CAS Country Assistance Strategy CBA Cost Benefit Analysis CPF Country Partnership Framework DC Deputy Commissioner DID Difference-in-Difference EIA Environmental Impact Assessment EIRR Economic Internal Rate of Return EMF Environmental Management Framework EMIS Environmental Management Information System ePMS electronic Progress Monitoring System ESMP Environmental and Social Management Plan FYP Five Year Plan GAAP Governance and Accountability Action Plan GBV Gender Based Violence GIS Geographic Information Systems GRM Grievance Redress Mechanism ICR Implementation Completion and Results Report ICT Information and Communication Technology IDSS Integrated Decision Support System IPDP Indigenous People’s Development Plan IRI International Roughness Index IT Information Technology LCS Labor Contracting Society LGED Local Government Engineering Department M&E Monitoring and Evaluation MDG Millennium Development Goals MIP Management Improvement Plan MIS Management Information Systems MMS Maintenance Management System MTR Mid Term Review ORA Operational Risk Assessment PAD Project Appraisal Document PBMC Performance Based Maintenance Contracts PDO Project Development Objectives PIU Project Implementation Unit PMIS Personnel Management Information System RPM Rehabilitation and Periodic Maintenance RTIP Rural Transport Improvement Project RTIP-II Second Rural Transport Improvement Project SDR Special Drawing Rights SFYP Sixth Five Year Plan SIMF Social Impact Management Framework SIMP Social Impact Management Plan SRAP Social and Resettlement Action Plan SRSP Social and Resettlement Action Plan ToC Theory of Change UFMS Unified Financial Management System UNOPS United Nations Office for Project Management Services USD United States Dollar VKT Vehicle Kilometers Traveled WBG World Bank Group TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 6 A. CONTEXT AT APPRAISAL .........................................................................................................6 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) .......................................8 II. OUTCOME .................................................................................................................... 12 A. RELEVANCE OF PDOs ............................................................................................................ 12 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 12 C. EFFICIENCY ........................................................................................................................... 18 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 19 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 19 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 20 A. KEY FACTORS DURING PREPARATION ................................................................................... 20 B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 21 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 22 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 23 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 24 C. BANK PERFORMANCE ........................................................................................................... 26 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 26 V. LESSONS AND RECOMMENDATIONS ............................................................................. 27 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 29 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 41 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 43 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 44 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 48 ANNEX 6. LIST OF SUPPORTING SOCUMENTS ....................................................................... 59 ANNEX 7A. PROJECT MAP RTIP-II ......................................................................................... 60 ANNEX 7B. PROJECT MAP RTIP-II AF .................................................................................... 61 ANNEX 8. SUMMARY OF ROADSIDE INTERVIEWS ................................................................. 62 ANNEX 9A. SUMMARY OF IMPACT EVALUATION STUDY ...................................................... 64 ANNEX 9B. SUMMARY OF ROAD USER SATISFACTION SURVEY ............................................. 67 ANNEX 10. PROJECT PHOTOS (BEFORE/AFTER IN THE SAME LOCATION)............................... 69 The World Bank Second Rural Transport Improvement Project (P123828) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P123828 Second Rural Transport Improvement Project Country Financing Instrument Bangladesh Investment Project Financing Original EA Category Revised EA Category Full Assessment (A) Full Assessment (A) Organizations Borrower Implementing Agency People's Republic of Bangladesh Local Government Engineering Department (LGED) Project Development Objective (PDO) Original PDO The proposed Project Development Objective is: To improve rural accessibility in project areas (covering 26 districts) and strengthen institutional capacity for sustainable rural road maintenance. 1 The World Bank Second Rural Transport Improvement Project (P123828) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 302,000,000 301,031,084 274,739,846 IDA-51070 100,000,000 100,000,000 95,658,277 IDA-63270 Total 402,000,000 401,031,084 370,398,123 Non-World Bank Financing 0 0 0 Borrower/Recipient 115,000,000 0 0 Total 115,000,000 0 0 Total Project Cost 517,000,000 401,031,084 370,398,124 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 20-Sep-2012 28-Nov-2012 17-Dec-2015 30-Apr-2018 30-Dec-2022 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 06-Sep-2016 134.81 Change in Results Framework 17-Apr-2018 242.54 Change in Loan Closing Date(s) 05-Oct-2018 272.16 Additional Financing 17-Mar-2021 313.34 Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Modest 2 The World Bank Second Rural Transport Improvement Project (P123828) RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 16-Dec-2012 Satisfactory Satisfactory 0 02 01-Jun-2013 Satisfactory Satisfactory 15.32 03 07-Dec-2013 Satisfactory Satisfactory 19.97 04 14-Apr-2014 Satisfactory Satisfactory 22.29 05 02-Nov-2014 Moderately Satisfactory Moderately Satisfactory 37.13 06 01-Dec-2014 Moderately Satisfactory Moderately Satisfactory 40.70 07 15-Jun-2015 Moderately Satisfactory Moderately Satisfactory 62.37 08 16-Dec-2015 Moderately Satisfactory Moderately Satisfactory 78.82 09 30-Jun-2016 Moderately Satisfactory Moderately Satisfactory 122.39 10 13-Feb-2017 Moderately Satisfactory Moderately Satisfactory 159.75 11 19-Sep-2017 Moderately Satisfactory Moderately Satisfactory 210.07 12 05-Apr-2018 Moderately Satisfactory Moderately Satisfactory 242.54 13 15-Oct-2018 Moderately Satisfactory Moderately Satisfactory 272.16 14 09-Apr-2019 Satisfactory Satisfactory 272.16 15 08-Oct-2019 Satisfactory Satisfactory 276.41 16 24-Nov-2019 Satisfactory Moderately Satisfactory 284.25 17 28-Apr-2020 Satisfactory Moderately Satisfactory 292.51 18 13-Oct-2020 Satisfactory Moderately Satisfactory 306.47 19 23-Apr-2021 Satisfactory Moderately Satisfactory 324.52 20 27-Oct-2021 Satisfactory Moderately Satisfactory 338.20 21 28-Apr-2022 Satisfactory Moderately Satisfactory 358.69 22 31-Oct-2022 Satisfactory Moderately Satisfactory 370.40 23 05-Jan-2023 Satisfactory Moderately Satisfactory 370.40 3 The World Bank Second Rural Transport Improvement Project (P123828) SECTORS AND THEMES Sectors Major Sector/Sector (%) Transportation 87 Public Administration - Transportation 10 Rural and Inter-Urban Roads 70 Ports/Waterways 7 Industry, Trade and Services 13 Agricultural markets, commercialization and agri- 13 business Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Public Sector Management 1 Public Administration 1 E-Government, incl. e-services 1 Human Development and Gender 14 Gender 14 Urban and Rural Development 85 Rural Development 85 Rural Markets 15 Rural Infrastructure and service delivery 70 ADM STAFF Role At Approval At ICR Regional Vice President: Isabel M. Guerrero Martin Raiser Country Director: Ellen A. Goldstein Abdoulaye Seck Director: John Henry Stein Gisu Mohadjer Practice Manager: Binyam Reja Shomik Raj Mehndiratta 4 The World Bank Second Rural Transport Improvement Project (P123828) Manzoor Ur Rehman, Reefat B K M Ashraful Islam, Natalya Task Team Leader(s): Sultana Stankevich ICR Contributing Author: Md Mokaddesul Hoque 5 The World Bank Second Rural Transport Improvement Project (P123828) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. Bangladesh achieved significant economic progress and poverty reduction in the four decades since independence in 1971, but challenges remain. Per capita real income rose by 130 percent between the 1970s and 2010s, with significant progress towards the achievement of Millennium Development Goals (MDGs). At appraisal, 63 percent of the rural population remained without access to all season roads and most of the poor population lived in rural areas. The Local Government Engineering Department (LGED) conducted an Operational Risk Assessment (ORA) of rural roads, which identified gaps in terms of planning, systems and processes because of limitations in capacity, process, know-how, and tools. The Bangladesh Sixth Five Year Plan (SFYP, FY2011-FY2015) highlighted the importance of rural road development in reducing poverty and promoting socio-economic development. Key activities identified by the SFYP for rural development included rural road development, bridge/culvert construction, and maintenance. 2. The Bank had supported the Rural Transport Improvement Project (RTIP, P071435) with the objective of improving and maintaining rural infrastructure, including roads and bridges, and institutional strengthening through technical assistance and training. The main achievements of RTIP included: improved access to social services and economic opportunities through rural roads in good condition to reduce travel time/cost; and enhanced capacity of relevant public institutions to manage rural transport infrastructure through improved operating efficiency. The successor project, RTIP II, aimed to improve rural access and capacity enhancement of the LGED to address key challenges like the severe shortage of all-season roads in rural areas, existence of poor condition roads in villages, and unsustainable budgetary policy for rural road maintenance. 3. The project was aligned with the World Bank Group’s Bangladesh Country Assistance Strategy (CAS) for FY11-14 and was relevant to the following CAS objectives: increase transformative investments and enhance the business environment; reduce environmental degradation and vulnerability to climate change and natural disasters; enhance accountability and promote inclusion. It aimed to help achieve the following CAS outcomes: increased infrastructure provision; access and efficiency; enhanced disaster preparedness; and increased effectiveness and efficiency of public resource use. Theory of Change (Results Chain) 4. The Theory of Change (ToC) for the project was developed for the preparation of this ICR, based on information available in the Project Appraisal Document (PAD), including the Project Development Objective (PDO), the project components and the results framework. 6 The World Bank Second Rural Transport Improvement Project (P123828) Figure 1. Theory of Change Project Development Objectives (PDOs) 5. The PDO as per the legal agreement was “to improve rural accessibility in Project areas (twenty-six Project districts) and strengthen institutional capacity for sustainable rural road maintenance”. The PDO stated in the PAD was worded slightly differently as “to improve rural accessibility in project areas (covering 26 districts) and strengthen institutional capacity for sustainable rural road maintenance”. Key Expected Outcomes and Outcome Indicators 6. Four outcome indicators were included in the PAD: • Population living within 2 kilometers of all season roads in 26 project districts (percentage) • Increase in roads in good condition (IRI below 7) in 26 project districts (19,678 kilometers of paved roads) (percentage) • Increase in the level of satisfaction from road users and communities in the project influence area (percentage) • Maintenance funding needs met for the rural roads (percentage). Components 7. The project comprised three components, as summarized below. 7 The World Bank Second Rural Transport Improvement Project (P123828) Component A: Accessibility Improvement (US$338.1 million at appraisal, US$363.19 million at completion) • Improve about 750 kilometers of Upazilla roads and about 500 kilometers of Union roads in 26 districts through upgrading earthen roads to paved road standard. • Rehabilitate and maintain about 3,550 kilometers of Upazilla and Union roads in 26 districts, with some of the maintenance to be done through Performance Based Maintenance Contracts (PBMC). • Pilot low impact dredging of two rural waterways and the construction of river jetties in 20 locations. • Improve and develop 50 rural markets (growth centers). Component B: Institutional Strengthening, Capacity Building and Governance Enhancement (US$11.90 million at appraisal, US$11.5 million at completion) • Support to the implementation of the LGED Management Improvement Plan, including strategic enhancements in LGED’s capacity, effectiveness, governance and accountability in: (a) maintenance management (policy, planning, and operations); (b) planning design and quality management; (c) environmental and social impact management; (d) performance management, including monitoring and evaluation; (e) information and communications technology-management-information systems technology, facilities and capacity building; and (f) training and human resource development capacity. • Strengthening of the capacity of LGED for Project performance monitoring and management, including performance audits and socio-economic and monitoring surveys. Component C: Rural Transport Safety (US$3.5 million at appraisal, US$2.85 million at completion) • Technical assistance and advisory services to: (a) strengthen road safety capacity of LGED and the central road safety unit within LGED; (b) upgrade LGED design, standards, codes, and practices in road safety engineering; (c) develop a comprehensive road safety training program for LGED, including road safety engineering, road safety auditing, monitoring and evaluation, safety during road works and other key aspects; (d) improve rural road accident data collection at the Upazilla and Union level in eight districts; (e) provide training for representatives of local government entities and communities, traffic police, school teachers, members of the rural rickshaw drivers’ associations and other local road transport operators and local-level works contractors, and associated advocacy, monitoring and survey activities in the concerned Project districts. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) 8. As indicated in the Data Sheet, the project was first restructured four times, including an Additional Financing (AF). 8 The World Bank Second Rural Transport Improvement Project (P123828) Revised PDOs and Outcome Targets 9. The PDO remained unchanged during project implementation, while the outcome targets were clarified during implementation. Revised PDO Indicators 10. The PDO indicators were revised three times: twice during restructurings and once during the AF. The revisions to PDO indicators are summarized in Table 1. Table 1: Changes in PDO indicators PDO Indicators before Revision(s) revision(s) 1 Population living ▪ This indicator was first replaced during the 2016 restructuring as within 2 km of all follows: season roads in 26 Increase in population living within 2 km of all season Upazilla and Union project districts roads improved under RTIP II in 26 project districts (percentage). [Baseline – 56.4%. Baseline – 0%; end target – 2.8%. Target – 64%.] ▪ The indicator end target date was extended to April 30, 2019, during the AF. 2 Increase in roads in ▪ This indicator was first replaced during the 2016 restructuring as good condition (IRI follows: below 7) in 26 project Increase of Upazilla and Union roads under RPM and PBMC sub- districts (19,678 km of components of RTIP II in good condition (IRI below 7) in 26 project paved roads) districts (4,428 km of paved roads). Baseline – 0%; end target – 80%. [baseline – 30%. ▪ The indicator was revised during the 2018 AF as follows: Target – 40%] Increase of Upazilla and Union roads under RPM and PBMC sub- components of RTIP II in good condition (IRI below 7) in 26 project districts (about 5861 km of paved roads). Baseline – 0%; end target – 75%. 3 Increase in level of The indicator baseline and target were revised during 2016 restructuring satisfaction from road as follows: baseline – 0%; target – 15%. users in the project influence area (Percentage) 9 The World Bank Second Rural Transport Improvement Project (P123828) [baseline – 18.86%. target – no target] 4 Maintenance budget ▪ The indicator baseline and target were revised during 2016 needs met for the restructuring as follows: baseline – 0%; target – 12%. rural roads ▪ The indicator baseline and target were further revised during 2021 restructuring as follows: baseline – 0%; target – 10%. [baseline – 23%. target – 40%] 5 - A new indicator which was added during 2018 AF: Benefitting population living within 2 km of all season Upazilla and Union roads improved under RTIP-II in 26 project districts (Number in millions) (Number, Custom), with baseline – 0; and target – 9.10. Revised Components 11. The project components remained the same, but the scope was changed through the restructurings and AF, as described below. Component A: Accessibility improvement a. Scope was reduced from improvement of 750 kilometers of Upazilla roads and about 500 kilometers of Union Parishad roads to improvement of 450 kilometers of Upazilla roads and about 370 kilometers of Union Parishad roads during the 2016 restructuring. b. The scope of rehabilitation and periodic maintenance was increased from 3,350 kilometers of Upazilla and Union Parishad roads to 4,000 kilometers of Upazilla and Union Parishad roads during the 2016. restructuring. Maintenance through performance-based maintenance contracts of 450 kilometers was reduced to 428 kilometers during the restructuring. c. New scope was added during the AF for climate resilient rehabilitation of 1,433 kilometers of Upazilla and Union Parishad roads that were heavily damaged in floods and heavy rains in eighteen project districts. The scope of this rehabilitation was reduced to 1,300 kilometers of Upazilla and Union Parishad roads during the 2021 restructuring. d. The scope for the construction of river jetties was reduced from the 20 locations to 10 locations during the 2016 restructuring. e. The scope for the improvement and development of about 50 growth center markets was reduced to 33 growth center markets during the 2016 restructuring. Component B: Institutional Strengthening, Capacity Building and Governance Enhancement f. The scope for strengthening the capacity of LGED was revised during the AF to add Project performance monitoring and management, including through support to the Project Management Unit, study tours, capacity building of the central road safety unit and the GIS section of the ICT unit within LGED; support for the preparation of guidelines and other documents on socio-economic and climate change issues; training on sustainable road asset management; and implementation of a 10 The World Bank Second Rural Transport Improvement Project (P123828) program to prevent, mitigate and respond to Project-related instances of gender-based violence, sexual exploitation and abuse, and violence. Only the following scope was retained during the 2021 restructuring: strengthening the capacity of LGED for project performance monitoring and management, including through support to the Project Management Unit, study tours, capacity building of the central road safety unit and the GIS section of ICT unit within LGED on sustainable road asset management. Component C: Rural road safety g. The scope was modified during the AF to include expanding local accident data collection to eighteen districts; strengthening of road safety audit practices; development of a road safety campaign; and development and promotion of an integrated rural transport safety program. Other Changes 12. No other changes were made. Rationale for Changes and Their Implication on the Original Theory of Change PDO indicators 13. Changes to the indicators described in Table 1 were made for the following reasons: a. The indicator on population living within 2 km of all season roads was revised following the Mid Term Review (MTR), as the baseline could not be justified based on available data and methodologies. b. The indicator regarding increase in roads in good condition was revised to capture the impact of only the two types of roads that were being improved through the project, as the original indicator did not specify the type of road. c. The indicator on the level of satisfaction was revised, as the baseline could not be substantiated during the MTR. d. The indicator related to maintenance budget need was revised for the following reasons as (i) the original baseline could not be validated, (ii) the MTR determined that a zero baseline with observation of the trend of change would be more meaningful, and (iii) the “yearly” need fixed by LGED had been fluctuating significantly over the years, which justifies measurement of the change in budget needs met instead of the amount of budget needs met. e. The indicator targets were revised to make them consistent with the revision of the components during the restructurings and the AF. Components 14. Sub-components were reduced during the 2016 restructuring due to the increase in unit costs of the major components (Upazilla road unit cost sincreased by 49 percent, Union Road unit costs increased by 75 percent, and river jetty unit costs increased by 250 percent1). The only sub-component to be increased during the restructuring was the Rehabilitation and Periodic Maintenance (RPM) of rural roads due to 1 Second Rural Transport Improvement Project (RTIP-II) Restructuring paper 2016. Report number: RES24771 11 The World Bank Second Rural Transport Improvement Project (P123828) increased need and the availability of adequate stock. AF components were added mainly as an emergency response to the 2017 floods, which affected the project area. The floods affected 31 of 64 districts in Bangladesh, claimed 121 lives, and damaged nearly 5,000 km roads2. Implication on the Original Theory of Change 15. These changes did not affect the theory of change significantly, except for the changes to the targeted output quantities due to the revision of the components. II. OUTCOME A. RELEVANCE OF PDOs Assessment of Relevance of PDOs and Rating 16. The objectives of RTIP II are aligned with the recently approved Bangladesh CPF FY23-273 under Objective 5: Enhanced economic opportunities for women and vulnerable groups, Objective 6: Strengthened spatial and digital connectivity for inclusive growth, and Objective 7: Strengthened spatial and digital connectivity for inclusive growth. 17. The project relates closely to Bangladesh’s Eighth Five Year Plan (FYP)4, which spans the period July 2020 to June 2025. It is also aligned with the country’s Perspective Plan 20415. The FYP highlights specific elements in the transport sector vision and road transport strategy, including the importance of road network expansion, upgrading of rural roads, improving road maintenance, and the strategy for the operation and maintenance of rural roads. The upgrading of rural roads targets rural road connectivity for reducing poverty, improving human development, and promoting rural investments in micro and small-scale non-farm enterprises. The rural road maintenance and operations strategy targets effective and technology driven road maintenance, post-disaster rehabilitation of rural roads through the use of the ‘Build Back Better method’, and improvement of road maintenance capacity of the implementing agency by adopting various tools and techniques. 18. For reasons described above, relevance of the PDO is rated High. B. ACHIEVEMENT OF PDOs (EFFICACY) 19. The project sought to solve two main problems: inadequate rural accessibility and lack of institutional capacity to sustainably maintain rural roads. The first problem was partly solved by the precursor project RTIP, but there remained additional demand to substantially improve accessibility in the project districts. 2 https://cpd.org.bd/wp-content/uploads/2017/10/Flood-2017-Assessing-Damage-and-Post-flood-Management.pdf 3 World Bank. Bangladesh - Country Partnership Framework for the Period FY2023 - FY2027 (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/099040523102036987/BOSIB037c73db00920ae960a4e78fa47587 4 8th Five Year Plan Promoting Prosperity and Fostering Inclusiveness. Dhaka, Bangladesh. General Economic Division (GED), Bangladesh Planning Commission, Government of the People’s Republic of Bangladesh. December 2022. 5http://plancomm.gov.bd/sites/default/files/files/plancomm.portal.gov.bd/files/10509d1f_aa05_4f93_9215_f81fcd233167/20 20-08-31-16-08-8f1650eb12f9c273466583c165a315a4.pdf 12 The World Bank Second Rural Transport Improvement Project (P123828) The second problem was identified during RTIP implementation and was taken up in RTIP-II. Assessment of Achievement of Each Objective/Outcome Objective 1: Improve rural road accessibility in the project areas 20. This objective was sought to be achieved through the completion of the following activities: improvement of unpaved rural roads to paved roads; maintenance needs being met at specific locations; a sustainable contracting method for road maintenance; provision of rural water transportation infrastructure; and strengthening LGED to improve road safety of rural roads. 21. The initial output targets for the accessibility objective were chosen at appraisal based on estimates under a framework approach. They were subsequently revised during the first restructuring based on current information on unit costs, see Paragraph 14. The main changes were: Upazilla roads were revised to 450 kilometers from 750 kilometers, Union Parishad roads were revised to 370 kilometers from 500 kilometers, and rural ghats/jetties were revised to 10 from 20. However, the project coverage remained the original 26 districts and the objective remained the same. The project delivered/exceeded the revised output targets, as summarized in Table 2. 22. Road Safety. Road safety audits were conducted for the project roads under the AF and the audit observations were incorporated in designs. LGED engineers were trained on road safety topics, including the road safety audit manual, and a multi-district road safety campaign was conducted. In total 38 training sessions were conducted for LGED engineers on Road Safety and Road Safety Audit. Accident data of 12 roads from 8 districts were collected. Road user education programs were conducted in two districts (Gazipur and Cox’sbazar) for 500 teachers, 51,657 students, 1,200 drivers and 30 community groups. A Road Safety Awareness campaign was conducted in 15 project districts, which included 360 educational institutes and 123,611 students. LGED has proposed to set up a central road safety unit at headquarters; the proposal is awaiting the Ministry’s approval. An interim committee has been set up to coordinate road safety initiatives. Accident data collection has been partially completed. Table 2: Accessibility Output Summary 13 The World Bank Second Rural Transport Improvement Project (P123828) Output description (unit) Target Achievement Target status Improvement of Upazilla Roads (kilometers) 450 459 Exceeded Improvement of Union Parishad Roads from earthen to 370 417 Exceeded paved standard (kilometers) Rehabilitation and periodic maintenance of Upazilla and 4,428 4,489 Exceeded Union Parishad Roads, including through Performance Based Maintenance Contracts (PBMCs) (kilometers) Climate resilient rehabilitation of Upazilla and Union 1,300 1,331 Exceeded Parishad Roads (kilometers) Construction of rural ghats/river jetties (number) 10 10 Achieved Rehabilitation of inland waterways (number) 46 47 Exceeded Integrate road safety measures in project roads and provide - - Mostly support to strengthen road safety capacity of LGED achieved6. (See Paragraph 22.) 23. Of the four PDO indicators relevant for this objective, the targets of three indicators were achieved, as shown in Table 3. The second PDO indicator could not be verified at completion as LGED did not have full information on road condition at completion. Roughness data collection stopped during the COVID-19 pandemic and was resumed for project roads in 2023. However, LGED has informed that it is currently collecting data and will complete data collection by December 2023. The collected data is expected to show that this indicator was achieved/exceeded. Table 3: PDO indicators and status of achievement PDO Indicator Target Achievement Status Benefitting population living within 2 km of 9.1 9.1 Achieved all season Upazilla and Union roads improved under RTI-II in 26 project districts (Number in millions) Increase of Upazilla and Union roads under 75 58 Likely to be RPM and PBMC sub-components of RTIP-II achieved/exceeded; in good condition (IRI below 7) in 26 project the data collection is districts (5, 861 km of paved roads) ongoing and will be (percent) completed by December 31, 2023. Increase in level of satisfaction from road 15 21 Exceeded users in the project influence area. (Percentage) 6 Status determined qualitatively from the outputs delivered and explained in the para above Table 2. 14 The World Bank Second Rural Transport Improvement Project (P123828) Increase in population living within 2 km of 2.8 16.4 Exceeded all season Upazilla and Union roads improved under RTIP-II in 26 project districts (Percentage) 24. The project has benefitted the surrounding communities in many ways, including reduced travel time to jobs and other destinations; lower cost of travel; and access to all-weather roads.7 The Impact Study report found that travel time decreased, in addition to other significant positive outcomes, which are at least partly attributable to the project interventions, such as the increase in total assets (six percent), increase in cropping intensity (three percent), positive crop diversity, significant increase in travel convenience and business expansion, significant increase in travel distance of rural motorized vehicles, reduced business- related travel time (by eight percent for enterprises), increase in rural employment, and reduction in food prices8. The Road User Satisfaction Survey9 indicates several positive outcomes, including: 40 percent overall satisfied users (compared to 23 percent for non-project roads); 37 percent satisfied users on the road surface (compared to 17 percent for non-project roads); and 22 percent satisfied users on road maintenance (compared to 14 percent for non-project roads). A handful of users of the improved roads were interviewed in two project districts for this ICR, and positive outcomes were reported, including ease of access, increase in land values, higher prices for farm produce, ability to send agricultural produce from the farm to cities to obtain higher prices than before, and increased income for transport service providers. A summary of these interviews is available in Annex 7. 25. Based on the above discussion, the first PDO objective (improve rural road accessibility) has been achieved. Objective 2: Strengthen institutional capacity for sustainable rural road maintenance 26. The following activities were originally envisaged under Component 2: (i) support to implement post-ORA (Operational Risk Assessment) Management Improvement Plan (MIP) to enhance maintenance management (policy, planning and operations), planning, design, performance management, IT-ICT-MIS technology provision, training, etc.; and (ii) project performance monitoring and management capacity enhancement. The first group included implementation of LGED’s maintenance policy and IT based maintenance management system. During AF, the project performance monitoring and management component was expanded with the addition of elements such as road safety capacity building, GIS unit strengthening, training on sustainable road asset management, and mitigation/response to gender based violence. 27. The project has helped deliver most of the targeted outputs through relevant consultancy packages under the institutional strengthening component. These may be divided into three major categories: (i) delivery of tools and software to improve LGED’s capacity to improve road maintenance planning, execution, and 7 LGED Zakiganj. (July 21, 2019). Documentary RTIP 2 LGED [Video]. YouTube. ttps://www.youtube.com/watch?v=g8Xxs5PYVHM 8 Impact of the Second Rural Transport Improvement Project (RTIP-II). (December 2022) Bangladesh Institute of Development Studies. 9 Road User Satisfaction Survey (Endline) Under Second Rural Transport Improvement Project (RTIP-II). March 2021. 15 The World Bank Second Rural Transport Improvement Project (P123828) monitoring; (ii) delivery of policies, standards, manuals, and guidelines to improve/standardize work process including maintenance delivery; and (iii) training on new tools and resources. Major outputs and impacts from the first two categories are described in Table 4 below. These two categories of outputs have implemented key MIP followed by the ORA. In the case of the third category of outputs, trainings and information sessions were conducted for LGED staff, including: Refresher Project Disbursement and Accounts with Uniform Financial Management System (UFMS); FIMS software;, rural road safety; RuBIMS/BMS; and Rural Road Maintenance & Maintenance Management and Quality Assurance. Finally, an additional important project output is a consistent increase of maintenance funds for rural roads from the government sources. A draft business plan was prepared to implement LGED’s maintenance policy. Table 4: Key Outputs and Impacts towards fulfilment of Objective 2 Output Impact Tools and software to strengthen LGED performance management and governance capacity • Record and analyze financial records of LGED operations, including the option to assess maintenance expenditure over Uniform Financial Management time or spatially. System (UFMS) • Facilitate financial instrument. store financial data. • Report generation like IUFR and reports required by GOB and for financial reports for foreign aided projects. Upgrade of the existing Project Monitoring & Evaluation software Electronic Project Management and processes in LGED to enable agency-wide networked System (ePMS) and Project access/operation and to support IDSS operations. This keeps track Management Information of maintenance and helps to identify issues and aids for the System (PMIS) effective implementation of maintenance initiatives. Personal Information Human Resource Database in accordance with the IT-ICT-MIS Management System (PIMS) Strategy of LGED. • Store and analyze bridge/culvert information to plan, Rural Bridge Information execute and assess bridge maintenance. Management System Pictorial database of each bridge element, with GPS co-ordinates as (RuBIMS)/Bridge Management well as condition data via web-application, that is integrated with System (BMS) the RSDMS web-based application that is currently being developed. • Pre- and post-maintenance information management system to aid planning and the measurement of effectiveness. FIMS: Mobile Application for • Real-time update of field inspection information allowing Field-Works Inspection inspection data to be uploaded and stored. Service (web-based) Site inspection visits at project locations involve collecting data, making evaluations and reporting on the findings to superiors and filing. • The geospatial database of LGED has been standardized and multiple users can now work individually with the GIS Capacity central geodatabase. • The GIS Portal has been updated, modified, and connected to e-PMS through API, to enable the existing project 16 The World Bank Second Rural Transport Improvement Project (P123828) activities to be visualized. This is useful for planning, monitoring, and reporting, as well as for the showcasing of LGED’s GIS information. Policies, standards, manuals, and guidelines Rural Road Maintenance • Standards definition and specification of routine and Design Standards periodic maintenance of rural roads to decide contract terms. • It defines the road condition performance specifications to be achieved and provides details of the design standards for pavement works and other maintenance works. Guideline for Implementation • Planning and contract design guide for bridge maintenance of Bridges and Culverts tool. Maintenance Program • These guidelines include material specifications as well as a detailed description of the technical implementation procedures for different maintenance activities. Road Condition Assessment Guidelines to assess road maintenance demand and prepare cost Guidelines estimates for the most optimum maintenance plan. Road Asset Management Guide Describes aspects of road asset management applicable to the Bangladesh context and provides relevant examples of best practices from other countries based on the maintenance planning procedures and the proposed pavement management system that is to be introduced. Road Design and Pavement Specifies the road condition performance standards to be achieved Standard of LGED and provides details of the design standards for pavement works and other maintenance works. 28. The PDO indicator related to the second objective - increase in maintenance budget needs met for the rural roads - was exceeded through the provision of additional budget to maintain roads. Project outputs linked to this objective have contributed to strengthening LGED in three ways: LGED’s operational efficiency has improved in the relevant areas, including maintenance planning and execution through higher fiduciary due diligence, better contract management capacity, communications, and information management; LGED is equipped with several modern tools to efficiently plan, implement and manage large scale infrastructure projects; and LGED now has more maintenance funds to maintain roads and other assets, as opposed to the perennial funding crisis in the years prior to project appraisal. Based on the above discussion, the second PDO objective (strengthen institutional capacity for sustainable rural road maintenance) has been partially achieved. Overall efficacy combining both objectives 29. Based on the achievement of Objective 1 and the partial achievement of Objective 2, Efficacy is rated Substantial. 17 The World Bank Second Rural Transport Improvement Project (P123828) C. EFFICIENCY Assessment of Efficiency and Rating 30. Economic evaluation of the civil works was undertaken at the time of project appraisal and presented in the PAD and in the 2018 AF Project Paper. The initial economic evaluation of RTIP II was based on the ‘production surplus’ approach, in which increases in rural household incomes were considered as project benefits. The economic analysis for the AF adopted a ‘consumer surplus’ approach. The ICR followed ‘consumer surplus’ approach to remain conservative in terms of benefit calculation. 31. Economic analysis for the road improvement component was carried out for the ICR based on new traffic count data, completion costs, and the final project lengths. Due to the lack of data on road condition measurements (IRI), the economic model was built based on vehicle kilometers traveled (VKT), calculation of Vehicle Operation and Travel Time costs, and assumption of IRI reduction due to the improvement in road conditions. The results are summarized in Table 4, while Annex 4 contains more details of the economic analysis. Table 4 below shows that the EIRRs at completion compare favorably with the EIRRs estimated at appraisal. Table 5. Summary of Economic Evaluation Results Project Stage Analysis Stage and Assumption EIRR (%) NPV @ 9% ($, Million) At Appraisal 21.0 - (Without household income) RTIP-II At Completion 28.2 155.68 (Without household income) At Appraisal 20.5 168.57 AF At Completion 30.2 127.60 32. Design Efficiency. The design of RTIP II benefitted from the RTIP experience, particularly in keeping land acquisition to a minimum and focusing on road safety alongside road quality. The design was flexible in addressing the needs in the context of the 2017 flood through the AF. Keeping the geographic focus within twenty-six adjacent districts contributed to keeping the project design compact. Further, the AF focused on eighteen districts of the original twenty-six districts, which were selected based on the extent of flood damage. The design of the institutional component was ambitious, but was partly informed by the analytical work, e.g., ORA. 33. Implementation Efficiency. Project implementation was affected and delayed by the political unrest in 2013, 2014 and 2015; the 2017 floods; and by the global COVID-19 pandemic since early 2020. Land acquisition required for the Upazilla road improvement component slowed implementation. Component 1 quantities were overestimated at appraisal, and the quantities were revised downwards based on the findings of the MTR. Because of the depreciation of the BDT against the US dollar due to the impact of the COVID-19 pandemic and the Russia’s invasion of Ukraine, about ten percent of the IDA Credit could not 18 The World Bank Second Rural Transport Improvement Project (P123828) be utilized. The closing date of the original Credit had to be extended by 12 months and the AF by 18 months to enable completion of on-going project activities. 34. Based on the above discussion, the overall efficiency of the project is rated Substantial. D. JUSTIFICATION OF OVERALL OUTCOME RATING 35. Based on the rating of relevance, efficacy, and efficiency as High, Substantial, and Substantial, respectively, and keeping in mind that PDO Objective 2 was only partially achieved, the overall Outcome of the project is rated Moderately Satisfactory. E. OTHER OUTCOMES AND IMPACTS (IF ANY) Gender 36. The project was designed and implemented in line with LGED’s Gender Strategy for investment programs. Women laborers were hired to carry out road maintenance work through the Labor Contracting Society (LCS). Specific spaces in the Women’s Market Section were provided to disadvantaged women in the growth centers developed under the project. The project design included efforts through the safeguards framework to prevent Gender Based Violence (GBV) and the grievance redress mechanism. In compliance with the Social Impact Management Framework (SIMF), LGED managed labor influx aspects and GBV during implementation, and the bid documents for works reflected the World Bank guideline to ensure GBV prevention. 37. Improvements in rural accessibility benefitted rural women in various ways, including employment, wage increases, reduction in travel time, and better access to education and health10. The impact survey shows that female employment overall did not change significantly in the project districts. However, female self- employment in the farm sector increased significantly in the project districts compared to districts where there were no project interventions. Female laborer wages also increased (between 39 percent and 44 percent in different sectors and seasons) in the project districts in 2022 compared to 201611. Institutional Strengthening 38. Strengthening institutional capacity for sustainable rural road maintenance was one of the objectives of the project and is discussed in the Efficacy section. As discussed in the efficacy section, the project has helped LGED improve operational efficiency by implementing MIP actions and strengthened infrastructure project management capacity by introducing various tools and resource materials for staff. 10 LGED Zakiganj. (July 21, 2019). Documentary RTIP 2 LGED [Video]. YouTube. ttps://www.youtube.com/watch?v=g8Xxs5PYVHM 11 Impact of the Second Rural Transport Improvement Project (RTIP-II). (December 2022) Bangladesh Institute of Development Studies. 19 The World Bank Second Rural Transport Improvement Project (P123828) Mobilizing Private Sector Financing 39. The PDO and the project components provided limited opportunities for mobilizing Private Sector Financing. Private contractors were engaged for the works contracts and the PBMCs; the latter increase the role of the private sector to some extent. Poverty Reduction and Shared Prosperity 40. The impact survey results12 analyzed using the Difference-in-Difference (DID) method show that poverty trends in the project areas are relatively positive compared to the control areas. Similarly, poverty gap has decreased more in the project locations relative to the control locations. However, the DID regression model indicates that the effect of the interventions on poverty reduction in the project areas is not evident. Measurement of the Gini index shows that the project had a minor to insignificant impact in reducing inequality. However, the endline survey was conducted in 2022, right after the COVID-19 pandemic, and the results may have been impacted by the pandemic. The Project’s impact on poverty and shared prosperity will potentially be visible in the years ahead. Road users interviewed during the site visit for the ICR reported that the project has helped to reduce poverty in the project areas. Other Unintended Outcomes and Impacts 41. The project helped set Road Safety as a priority for LGED. The Global Road Safety Facility (GRSF) supported TF Bangladesh Speed Management Research and Institutional Capacity Building for Rural Road Safety helped deliver the following: an assessment of the road safety capacity of LGED; development of LGED’s Road Safety Action Plan; and identification of speed management measures for rural roads. The TF findings helped LGED establish a road safety unit in the headquarters as suggested by the Action Plan. Relevant trainings and dissemination activities have created an awareness of road safety among LGED engineers. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 42. Realistic Objectives. The PDO Objective 1 to improve rural accessibility in the project areas is clearly articulated in the country and sector context. The second objective to strengthen institutional capacity for sustainable rural road maintenance also has sectoral relevance: the jointly conducted ORA findings, the draft rural road maintenance policy, and the perennial shortfall of road network maintenance fund. However, the second objective was very broad. 43. Simple Design. The design reflects the level of ambition of the objectives. The first objective is clearly 12Impact of the Second Rural Transport Improvement Project (RTIP-II). (December 2022) Bangladesh Institute of Development Studies. 20 The World Bank Second Rural Transport Improvement Project (P123828) backed by inputs and outputs to help reach the goal. Component 2, which focused on the second objective, lacked a clear pathway to mainstream and later amplify the tools and manuals developed through the project. The specific regulatory, fiduciary, technical and administrative steps potentially needed from LGED were not well developed. 44. Adequacy of risk assessment and inclusion of mitigation measures in the design. The PAD identified risks relating to stakeholders, fiduciary, governance, technical, environmental and social, and delivery monitoring and sustainability, along with measures to manage these risks. These turned out to be realistic; however, project implementation was affected by the COVID-19 pandemic. B. KEY FACTORS DURING IMPLEMENTATION (a) Factors subject to the control of Government/Implementing agency 45. Coordination and engagement. Within the first year, LGED appointed an additional Chief Engineer and a Superintending Engineer to provide oversight and coordination of project implementation. Eight working groups were formed by LGED to ensure internal coordination and discussion relevant to the second PDO objective of institutional strengthening of LGED. This helped LGED propose permanent units in its organogram to manage relevant topics, including asset management, environmental management, and road safety. 46. Human resources. Full-time deployment of staff from the government contributed to project implementation. Consultancy firms and advisors were also hired by the PIU to provide the additional support and expertise needed for the capacity components, rural waterways, PBMC and road safety. In some cases, the PIU had to request the consultancy firms to provide replacements for their staff who did not have sufficient expertise. Towards the end, LGED managed a significant amount of procurement tasks without help from the consultants. Better performance by the supervision consultant would have facilitated implementation. 47. Land acquisition. The delays in acquiring the land, especially during the first three years of implementation, impacted implementation of the Upazilla road improvement sub-component. The legal covenant to acquire land before awarding work at a particular road stretch was not always met. 48. Procurement innovation. LGED’s internal coordination and staff training was useful to introduce and mainstream electronic procurement (e-GP). This initiative was supported by the establishment of a core team of e-GP trainers (e-GP Cell) for the roll-out of e-GP under RTIP II, which was the first project in Bangladesh to introduce e-GP. The project also successfully piloted PBMC contracts in eight project districts, which simplified maintenance procurement and reduced supervision needs of the maintenance work. (b) Factors subject to World Bank control 49. Supervision missions. The Bank conducted regular missions and provided guidance to the project agencies to help implement the project efficiently and resolve implementation issues. Missions during the COVID-19 pandemic were virtual due to travel restrictions. Bank guidance included work plans, reviews and advice on the quality of consultants’ deliverables, the quality of contractors’ work, and compliance with safeguards. 21 The World Bank Second Rural Transport Improvement Project (P123828) 50. Mid-Term Review followed by Restructuring. The MTR assessed project status, including achievements, remaining targets, and the results framework. Based on the MTR findings, and in agreement with Government, project activities under the two main components were aligned with available resources and the remaining implementation period, the RF was revised, and a restructuring was carried out. 51. AF and other restructurings. As mentioned earlier, the project underwent three other restructurings including the AF in 2018. These were based on issues identified during implementation, while the AF responded to the Government’s request for support to address the impact of the 2017 floods. The Bank was proactive in working closely with LGED and the Government in processing these restructurings and the AF efficiently 52. Bank Missions. Bank missions were conducted at regular intervals with the appropriate expertise, including on fiduciary and safeguards. In addition, there were frequent technical visits and discussions, as required, between missions. The mission aide memoires were informative and of good quality. Field visit notes and photo evidence captured during the December 2015 mission demonstrated where and to what extent work quality needed improvement. The Bank also conducted virtual missions during the lockdown due to the COVID-19 pandemic. (c) Factors outside the control of government and/or implementing entities 53. There was a significant depreciation of the local currency against the United States Dollar (and the SDR) during project implementation. The price of construction materials also increased during the early years of project implementation. The combination of these two factors led to the revision of the output targets related to the accessibility objective during the 2016 restructuring. 54. Major floods hit Bangladesh during 2017 and 2020. There were two incidents of prolonged floods in July and August in 2017, affecting 31 districts, which included one third of the project districts. Prolonged rain and floods in 2017 delayed project progress and damaged the road network, which eventually led to the GoB’s request for AF. The major flood in 2020 in the northern districts, compounded by the non- availability of construction materials due to frequent and prolonged lockdowns during the COVID-19 pandemic hampered project progress, which prompted the GoB’s request for the extension of the credit closing date to June 2023. 55. The COVID-19 pandemic impacted project progress severely. The COVID-19 lockdowns started in March 2020 and lasted till September 2020. The second wave was between March and May 2021, with localized spikes in between. The third wave was from May to August 2021, while the final wave was from January to March 2021. As a result, there was very limited progress in work during 2020 - 2021. 56. Political unrest affected project activities twice. There were countrywide strikes between October 2013 and January 2014, which hampered the project’s physical and financial progress. Political unrest and instability again delayed project activities during early 2015. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME 22 The World Bank Second Rural Transport Improvement Project (P123828) A. QUALITY OF MONITORING AND EVALUATION (M&E) M&E Design 57. The results framework was not well-developed during appraisal and was substantially revised during the 2016 restructuring. At appraisal, the project had four PDO indicators, three to measure the first objective, and one to measure the second objective. After the revision in 2016, one more indicator was added to capture the first objective. The PDO indicator texts, baselines and target values were modified, as the version in the PAD was not adequate for capturing results. The modified indicators were adequate to capture and measure the achievement of the first objective on rural accessibility. The revised PDO indicator to capture the second objective (strengthen institutional capacity for sustainable rural road maintenance), was useful but was not sufficient. Additional indicator(s) could have been included to fully capture and monitor progress towards achieving this objective. 58. The intermediate indicators were useful to monitor progress after the major revision of the results framework. Most of the intermediate indicators (15 of the 17) were revised during the 2016 restructuring of the project, and additional components were added during the AF. The revised intermediate indicators were adequate for capturing outputs related to accessibility. However, the second objective on institutional strengthening could have included indicators to capture the outputs from the main activities of Component 2, including on the training of LGED staff on the new tools and techniques introduced to improve maintenance practice. M&E Implementation 59. The M&E was implemented as planned. Most of the information to monitor performance came from the progress reports and were collected through the implementing agency. Results were captured during the project to monitor status, review, rethink and at times change course. The project design included the collection of user satisfaction data and project impacts; these were useful for comparison and assessment. Roughness measurement methodology adopted at inception was inadequate for assessment and during the project implementation, the roughness data collection methodology was reassessed and modified. 60. Interim Unaudited Financial Reports were received quarterly on a regular basis. In addition to safeguard reports, Grievance Redress Mechanism (GRM) reports were also updated on a regular basis. As mentioned before, road roughness data was not collected during 2019 to 2021 due to the COVID-19 pandemic and also thereafter, including for the preparation of the ICR. Though LGED owns 12 IRI measurement systems, these could not be made functional after the pandemic as they needed maintenance and overhauls. As a result, the relevant indicator could not be reported at completion. M&E Utilization 61. Progress reports received were used for analysis and decision-making on a regular basis, especially after the MTR. Several Management Letters referred to intermediate indicators to communicate project status and suggest a course of actions for government and the implementing agency to ensure the timely 23 The World Bank Second Rural Transport Improvement Project (P123828) delivery of project outputs. Most Aide Memoires assessed the performance of each sub-component to demonstrate progress since the previous mission and added the key reasons that prompted the status rating. During the MTR, the M&E report revealed key findings, including overestimation of components at appraisal, issues behind slow progress, and specific proposals to improve the results framework. The processing of AF was also guided by the M&E report to determine that the deadline for completion of activities from the original project should be extended to April 2019. Justification of Overall Rating of Quality of M&E 62. The quality of M&E is rated Modest, based on the weaknesses in M&E design at appraisal. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE Environmental and Social compliance 63. The project triggered the Bank operational safeguard policy Environmental Assessment (OP/BP 4.01) and was classified as Category ‘A.’ It also triggered Bank social safeguards operational policies on Involuntary Resettlement (OP/BP 4.12) and on Indigenous Peoples (OP/BP 4.10). An Environmental Management Framework (EMF) and a Social Impact Management Framework (SIMF) were prepared, cleared by the Bank, and were disclosed to the public in the project areas and on the Bank’s website. 64. The PIU was responsible for managing environmental and social safeguards aspects of the project using site-specific environmental and social management plans (ESMPs). The ESMPs included social impact management plans (SIMPs) for sub-projects that involved the partial movement of non-land physical assets, loss of private trees, and temporary loss of income. Social and Resettlement Action Plans (SRSPs) were prepared for the involuntary acquisition of land and displacement of people. There was, however, no physical displacement of people in any of the sub-projects. An Environmental Specialist and a Senior Sociologist were part of the PIU and were supported by the district sociologist and the Assistant Engineers in each project district. Community organizers at the Upazilla level also provided support for safeguards management. In addition, Safeguards Specialists were also engaged under the Design and Supervision and the project management consultancies. Community representatives at the Upazilla and District levels were engaged in the GRM. The project was able to build institutional capacity for environmental and social management through the provision of training to relevant staff on multiple occasions. 65. Project performance on environmental safeguard management is rated Moderately satisfactory. Site- specific Environmental Impact Assessments (EIAs) were prepared and updated timely. The main environmental issues were air and water quality, waste disposal, the impacts on traffic, health, and safety. An Environmental Management Information System (EMIS) was established for monitoring and reporting on environmental activities/issues. The project also helped establish environmental laboratories in 22 districts. 66. Project performance on social safeguard management was Moderately Satisfactory. Involuntary resettlement was avoided to the extent feasible. However, five of the 67 Upazilla road sub-projects involved the acquisition of private land and 10 other sub-projects involved repossession of encroached land for geometric correction. Tribal peoples with some characteristics of indigenous peoples were 24 The World Bank Second Rural Transport Improvement Project (P123828) present in at least one sub-project area. As indicated earlier, LGED prepared and implemented SRAPs and SIMPs where required. An Indigenous People’s Development Plan (IPDP) was prepared, disclosed, and implemented, where tribal people were among the beneficiaries. Land compensation and resettlement assistance were provided by funds from the Government. 67. Land acquisition was avoided for all activities under the AF, while about 11 ha of land was acquired under the original credit. Compensation payments had almost been completed as of December 2022, with 96.8 percent of the estimated budget utilized. About 59 awards were not yet paid at the time of Credit closure due to (i) absentee owners, (ii) awardees unwilling to receive compensation, and (iii) incomplete ownership records. LGED is in touch with the affected landowners and the relevant Deputy Commissioners on the remaining payments and expects to complete payments for all responding awardees by the end of 2023. The Bank will continue its oversight till all payments are made. 68. The Project GRM was accessed by project area communities in cases of design glitches and issues on involuntary resettlement management. The GRM led to replacing a box culvert with an appropriately designed drainage structure, a causeway instead of a bridge on a canal across the road, including bank protection for managing flash floods, and compensation for affected private trees on unused land. Five affected households were missed in the sub-project SRAPs, and based on their complaints through the project GRM, they were included in the implementation of the SRAPs and provided resettlement assistance. Procurement 69. Procurement performance during the implementation fluctuated between Satisfactory and Moderately Satisfactory. It was initially rated Moderately Satisfactory; however, as the project gained momentum, the PIU was able to frame reasonable competitive qualification criteria in the bid documents to attract competition during the e-GP bidding process. During 2020 - 2021, procurement performance dropped to Moderately Satisfactory due to the delay in finalizing the design and commencing procurement. In the final year of the project, the PIU worked hard to finalize designs, drawings, and bid documents of the remaining works packages. As a result, these packages were awarded on time and some of the lost time during the pandemic was recovered. Procurement was therefore rated Satisfactory in 2022. 70. The introduction and use of the Field Inspection & Monitoring System (FIMS) was helpful in monitoring progress and in contract management. Contract completion times were extended for almost all works packages. Six contracts were terminated due to default of contractors (e.g., fraudulent document submission) and the PIU applied remedial measures under the contracts to prevent similar outcome in future. Financial Management 71. Financial management actions agreed at preparation were implemented well. LGED maintained a Moderately Satisfactory FM rating throughout the project; however, there were occasional delays in submitting financial reports and in the resolution of audit observations. In the absence of a digitized FM system, human errors and mistakes were observed while reviewing project financial reports, especially on the adherence to the agreed financing ratio. The project followed up promptly on the findings of the integrated fiduciary reviews carried out by the Bank. There were a few cases of declaration of ineligible 25 The World Bank Second Rural Transport Improvement Project (P123828) expenditures and declaration of mis-procurement in FY 14-15; the project refunded the ineligible amounts to the Bank promptly. Interim financial reports and annual audit reports were received on time and were of acceptable quality. The audit reports were unqualified. C. BANK PERFORMANCE Quality at Entry 72. At entry, as mentioned in Section I, the project relevance was established from the sectoral and development standpoints. The project design was driven by ORA and lessons learnt from the implementation of RTIP, as mentioned above. These factors contributed to consistent support from LGED leadership and the government for the project to succeed. A framework approach was adopted to determine and design the specific road sections, and the safeguards aspects were assessed during implementation. This could have been completed earlier with identification of each sub-project location and assessment through a feasibility study during the design stage. At appraisal, a financial management (FM) assessment was carried out to assess the financial management risks underlying the project, the capacity of the implementing entity (LGED), and the FM systems in place. This helped with risk management during implementation. The M&E design could have been better, as discussed in Section IV. Governance risks were identified through the Governance and Accountability Action Plan (GAAP), which was used for monitoring risks during implementation. Quality of Supervision 73. The task team monitored and proactively guided LGED to implement the project efficiently and achieve the PDO. There generally were two missions per year, focusing on identifying and addressing implementation issues collaboratively with the PIU. Project progress was regularly reported after missions through Aide Memoires and Implementation Status Reports. Key issues and agreed actions were also communicated to the government for information and action through management letters. The MTR led to the project restructuring in 2016. The task team identified institutional strengthening activities that could not be completed and rightly planned to add them to a future project with LGED. The initiative of the task team to adhere to health rules during the pandemic was commendable. As there was no scope for price adjustments in the works contracts, it was not possible to address contractors’ request for price escalation. Justification of Overall Rating of Bank Performance 74. Based on the above discussion, Bank performance is rated Moderately Satisfactory. D. RISK TO DEVELOPMENT OUTCOME 75. The project outcome remains at risk if the institutional elements initiated under RTIP 2 are not continued. LGED has proposed a new organogram to the government requesting additional staff in the various units to better manage the network. In addition to staffing, staff training needs to be expanded on the tools 26 The World Bank Second Rural Transport Improvement Project (P123828) introduced by the project. Maintenance/upgradation of these tools will be important for the project benefits to continue. Some important activities, e.g., asset management and software upgrades, are being considered for inclusion in a new project under discussion with the government. 76. Adequate maintenance of the project roads will need a timely flow of maintenance funds. Careful planning and focus on overall asset management remains important for the LGED to maintain the road network with limited resources. Initial discussions are underway with LGED on overall asset management through a future project. 77. Bangladesh is one of the most vulnerable countries facing natural disasters, which are exacerbated by climate change. Though the AF roads were rehabilitated with higher attention to resilience, additional analytical work is required on the nature of disaster risk for the rural infrastructure in Bangladesh, followed by holistic measures to improve planning, technical specification, and know-how to further enhance the resilience of rural roads. Some of the upstream activities are being carried out under the Bank financed Climate Adaptation and Resilience for South Asia Project (P171054), but more attention is needed on this issue. V. LESSONS AND RECOMMENDATIONS 78. Accessibility improvement and institutional strengthening for sustainable road maintenance are important objectives, but downstream focus should shift to asset management and resilience of rural infrastructure. RTIP 2 has helped LGED acquire the tools, resources, and expertise to deliver large-scale capital investment projects for road improvement and maintenance. Harmonizing and mainstreaming the institutional initiatives within a broader, comprehensive asset management strategy would address the remaining gaps towards sustainable maintenance. It is also important to ensure climate resilience of the rural infrastructure through a data-driven, context specific and flexible approach. Most of the outputs from RTIP II aimed at institutional capacity may be used as building blocks to implement a successful asset management strategy. Similarly, a long-term approach is needed to embed climate-proofing in the entire process of planning, data collection, data management, design, material selection, impact analysis, and revision of the approach based on changes in circumstances. 79. Feasibility studies should identify the needs for land acquisition, which shall be carried out and completed prior to the award of civil works contracts. RTIP 2 anticipated delays in Land Acquisition (LA), as the process is complex and lengthy, and minimized LA to the extent feasible. However, during implementation, LA was delayed despite the engagement of dedicated project staff. LA should be implemented ahead of civil works as soon as the road alignment and geometry are known. LA planning should be done based on real time survey and consultation with the communities by engaging local LGED officials early in the design stage. 80. Price adjustments should be incorporated from the beginning in the bid documents/contracts in future projects. Works contracts with less than 18 months did not include a provision for price adjustments. However, at times there were delays beyond the contractor’s control. During the COVID-19 pandemic, it was clear that delivery would be delayed, and contractors would not have any incentive to complete the 27 The World Bank Second Rural Transport Improvement Project (P123828) works afterwards. Price adjustment clauses therefore need to be in place from the beginning, regardless of the contract duration. 81. The sequencing of the project should be carefully planned in future to award the contract after the monsoon or just before the dry season. Some of the works contracts were awarded right before the monsoon season and the contractors could not mobilize or advance work during the rainy season. Such contracts generally took an additional year for the works to be completed. 82. There is scope to improve the design of new roads and their maintenance to prolong pavement life. In the case of new construction, LGED’s Road Standard did not consider vehicle axle load and type, which led to the designs not being customized. On the other hand, maintenance roads were designed without considering the remaining life of the pavement or the remaining strength of the existing road materials, which led to early damage of maintained roads. It would be better if the existing pavements are dismantled altogether, and new construction includes widening of embankments. Although LGED does not apply pavement preservation, this should be considered in areas where pavement damage is common due to environmental factors. In some cases, the protective works designed by the consultant were either not cost-effective or were insufficient, as in-depth hydro-morphological studies were not undertaken in the case of roads passing through low lying areas. Such studies can help make the designs context specific and ensure higher performance of new/rehabilitated structures for future roads. . 28 The World Bank Second Rural Transport Improvement Project (P123828) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Improve rural accessibility and strengthen capacity for sustainable rural road maintenance Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Benefitting population living Number 0.00 9.10 9.10 within 2 km of all season upazila and union roads 31-Dec-2012 30-Dec-2022 21-Oct-2021 improved under RTIP2 in 26 project districts (Number in millions) Comments (achievements against targets): Target added during 2021 restructuring Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 29 The World Bank Second Rural Transport Improvement Project (P123828) Increase of upazila and union Percentage 0.00 80.00 58.80 roads under RPM and PBMC sub-components of RTIP II in 20-Sep-2012 30-Apr-2019 21-Oct-2021 good condition (IRI below 7) in 26 project districts (5, 861 km of paved roads) Comments (achievements against targets): IRI data was not available at completion as LGED could not collect data of all completed roads. In the previous years (2020 and 2021), data was not collected due to COVID-19 pandemic. LGED resumed data collection and PIU informed that the data collection will complete by December, 2023. It is likely that the full data will show achieved/exceeded status. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Increase in level of Percentage 0.00 15.00 21.00 satisfaction from road users in the project influence area. 12-Oct-2012 30-Apr-2019 10-Oct-2022 Comments (achievements against targets): User satisfaction information was verified by survey and achievement exceeds the target. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Increase in maintenance Percentage 0.00 12.00 10.00 24.53 30 The World Bank Second Rural Transport Improvement Project (P123828) budget needs met for the 20-Sep-2012 30-Apr-2019 30-Dec-2022 25-Oct-2022 rural roads Comments (achievements against targets): Achievement exceeded target though maintenance budget need also has increased due to expansion of asset network and damage of assets from several factors. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Increase in population living Percentage 0.00 2.80 16.41 within 2 km of all season upazila and union roads 20-Sep-2012 30-Dec-2022 21-Oct-2021 improved under RTIP II in 26 project districts Comments (achievements against targets): Achievement exceeds the target. A.2 Intermediate Results Indicators Component: A. Accessibility Improvement Component Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 31 The World Bank Second Rural Transport Improvement Project (P123828) Construction of ghats. Number 0.00 20.00 10.00 10.00 20-Sep-2012 20-Sep-2012 30-Jun-2021 30-Jun-2021 Comments (achievements against targets): Target was revised down from the original 20 to 10 ghats due to price increase during implementation. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Rehabilitation of inland Number 0.00 46.00 47.00 waterways (pilot). 20-Sep-2012 30-Jun-2021 30-Jun-2021 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Rehabilitation and periodic Kilometers 0.00 4,000.00 4,428.00 4,488.70 maintenance + Performance Based Maintenance Contract 20-Sep-2012 30-Apr-2018 30-Jun-2021 30-Jun-2021 (PBMC) roads. Comments (achievements against targets): 32 The World Bank Second Rural Transport Improvement Project (P123828) The project has successfully piloted PBMC contracts, which increased efficiency of maintenance, simplified maintenance procurement and reduced supervision needs of the maintenance work Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Upgrading of UZRs Kilometers 0.00 750.00 450.00 459.45 20-Sep-2012 30-Apr-2018 30-Jun-2021 30-Jun-2021 Comments (achievements against targets): Target was reduced during the first restructuring due to mainly increase in price. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Improvement of UNRs. Kilometers 0.00 500.00 370.00 417.18 20-Sep-2012 30-Apr-2018 30-Jun-2021 30-Jun-2021 Comments (achievements against targets): Target was reduced during the first restructuring due to price increase mainly. Achievement exceeded target. Indicator Name Unit of Measure Baseline Original Target Formally Revised Actual Achieved at 33 The World Bank Second Rural Transport Improvement Project (P123828) Target Completion Climate-Resilient Kilometers 0.00 1,433.00 1,300.00 1,331.00 Rehabilitation of Roads (UZRs and UNRs) (Kilometers) 31-Dec-2018 30-Jun-2021 30-Dec-2022 30-Dec-2022 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of civil works Percentage 0.00 0.00 60.00 60.00 contracts monitored in e- Project Management System 27-Jan-2021 27-Jan-2021 30-Dec-2022 21-Oct-2021 (ePMS) Comments (achievements against targets): Indicator added during 2021 restructuring. This is the first project pilot e-procurement for LGED in Bangladesh. Component: B. Institutional Development and Enhancement Component Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Business Plan developed on Text Draft Policy. Business Plan Business Plan Business Plan the Maintenance Policy. Operational Operational Implemented 34 The World Bank Second Rural Transport Improvement Project (P123828) 20-Sep-2012 30-Apr-2018 30-Jun-2021 30-Jun-2021 Comments (achievements against targets): Partially achieved through submission of a draft business plan. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Implementation of ORA- Percentage 20.00 100.00 80.00 80.00 linked Action Plan. 20-Sep-2012 30-Apr-2018 30-Jun-2021 30-Jun-2021 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion LGED implementation of Text Functionally limited MMS fully integrated IT-based MMS IT-based MMS comprehensive IT-based non-networked RIS in IDSS based functional functional maintenance management processes. system 20-Sep-2012 30-Apr-2018 30-Jun-2021 30-Jun-2021 Comments (achievements against targets): 35 The World Bank Second Rural Transport Improvement Project (P123828) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion LGED implementation of Text None MMS fully integrated Existing PMIS and Existing PMIS and Integrated Decision Support in IDSS based ePMS software ePMS software System (IDSS). processes upgraded upgraded 20-Sep-2012 30-Apr-2018 30-Jun-2021 30-Jun-2021 Comments (achievements against targets): Implemented through three software: Unified Financial Management System (UFMS), Project Management Information System (PMIS) and electronic Project Monitoring System (ePMS) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of women Percentage 13.00 15.00 15.10 employed in road works (relative to total labor force 12-Jul-2018 30-Jun-2021 10-Oct-2022 employed in road construction) (Percentage) Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 36 The World Bank Second Rural Transport Improvement Project (P123828) Contractor’s workforce Percentage 0.00 100.00 0.00 trained on ESHS, OHS and GBV Code of Conduct 12-Jul-2018 30-Jun-2021 30-Dec-2022 (Percentage) Comments (achievements against targets): Activity transferred to SuPRB project. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion GRM in place and active at all Percentage 0.00 100.00 100.00 time in all works contracts (Percentage) 12-Jul-2018 30-Jun-2021 30-Jun-2021 Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Road safety audit carried out Percentage 0.00 100.00 100.00 for all roads rehabilitated under AF, incorporating 12-Jul-2018 30-Jun-2021 10-Oct-2022 safety and security in transportation for women (Percentage) 37 The World Bank Second Rural Transport Improvement Project (P123828) Comments (achievements against targets): Trainings were also provided to LGED staff on road safety audit manual and steps of conducting audits. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Sub-projects with Percentage 0.00 80.00 50.00 participation of direct beneficiaries and project 12-Jul-2018 30-Jun-2021 30-Dec-2022 affected people in citizen engagement process (Percentage) Comments (achievements against targets): Activity dropped from RTIP-II and is included in SuPRB project. 38 The World Bank Second Rural Transport Improvement Project (P123828) B. KEY OUTPUTS BY COMPONENT Component Key Outcomes or Outputs Component A: Accessibility Improvement A1. Rural Roads Improvement 459 kilometers Upazilla roads and 417 kilometers Union Parishad roads improved • Rehabilitation and periodic maintenance completed for 4489 kilometers Upazilla and Union Parishad A2. Rural Road Rehabilitation and roads through PBMC Maintenance • Climate resilient rehabilitation completed for 1330 kilometers Upazilla and Union Parishad roads • 10 rural ghats/river jetties constructed. A3. Rural Waterways and Ghats • 47 kilometers inland waterways rehabilitated. Objective Component B: Institutional Strengthening, Capacity Building and Governance Enhancement • ORA implemented to improve LGED’s capacity in planning, monitoring, fiduciary due diligence, contract management, governance and accountability, IT assisted networking of systems, communications and information management. • The IDSS upgraded through existing PMIS and ePMS software for LGED to better manage personnel B1. Institutional Development and information and project progress. Governance • Web based FIMS introduced to monitor field work. • Fund allocation increased for maintenance of rural roads. • Rural Road Maintenance Design Standards, Road Condition Assessment Guidelines, Road Asset Management Guide, and Road Design and Pavement Standard of LGED developed. C. Rural Transport Safety • 38 training sessions conducted for LGED engineers on Road Safety and Road Safety Audit. • Accident data of 12 roads from 8 districts were collected. • Road Safety Education and awareness programme conducted in 2 districts (Gazipur and Cox’sbazar) which includes 500 teachers, 51,657 students, 1200 drivers and 30 community groups. 39 The World Bank Second Rural Transport Improvement Project (P123828) • Road Safety Awareness campaign has been conducted in 15 project districts which included 360 educational institutes and 123,611 students. • Rural Road Safety Manual, Road Safety Audit Guideline, and Road Safety Audit Manual developed. 40 The World Bank Second Rural Transport Improvement Project (P123828) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation A.K. Farhad Ahmed Task Team Leader(s) Marghoob Bin Hussein Procurement Specialist(s) Mohammad Reaz Uddin Chowdhury Financial Management Specialist Shakil Ahmed Ferdausi Social Specialist Fernanda Ruiz Nunez Team Member Md. Akhtaruzzaman Social Specialist Supervision/ICR B K M Ashraful Islam, Natalya Stankevich Task Team Leader(s) A.N.M. Mustafizur Rahman Procurement Specialist(s) Mohammad Reaz Uddin Chowdhury Financial Management Specialist Dilshad Sultan Dossani Team Member Richard Martin Humphreys Team Member Md. Tafazzal Hossain Procurement Team Md. Shehab Uddin Team Member Md. Akhtaruzzaman Social Specialist Iqbal Ahmed Environmental Specialist Shourov Kumar Sharma Procurement Team Michael James Tessitore Team Member Mir Mehbubur Rahman Procurement Team Tema Alawari Kio-Michael Team Member Habiba Jeba Team Member 41 The World Bank Second Rural Transport Improvement Project (P123828) Nishat Noman Procurement Team B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY11 6.251 37,548.66 FY12 70.572 432,897.84 FY13 11.391 35,351.61 FY22 0 17,357.01 FY23 0 33,869.87 Total 88.21 557,024.99 Supervision/ICR FY12 0 138.16 FY13 37.746 225,744.12 FY14 47.717 275,903.23 FY15 32.528 250,197.34 FY16 37.808 268,859.81 FY17 38.633 200,830.47 FY18 41.736 234,380.54 FY19 40.260 180,897.44 FY20 28.979 181,320.58 FY21 33.989 170,270.90 FY22 39.312 262,914.28 FY23 33.174 229,318.19 Total 411.88 2,480,775.06 42 The World Bank Second Rural Transport Improvement Project (P123828) ANNEX 3. PROJECT COST BY COMPONENT Amount at Approval Actual at Project Percentage of Approval Components (US$M) Closing (US$M) (US$M) A. Accessibility Improvement 389.09 355.08 91.26 Component B. Institutional Development and 12.33 10.24 83.05 Enhancement Component C. Rural Transport Safety 2.82 2.94 104.26 Component D. Contingent Emergency 0 0 0 Response Component Total 404.24 368.26 91.10 Note: Project costs at approval were taken from AF PAD and the actual costs are based on costs in BDT which were converted to varying rate of USD for reporting in ICR. 43 The World Bank Second Rural Transport Improvement Project (P123828) ANNEX 4. EFFICIENCY ANALYSIS Summary 1. An economic evaluation of the civil works was undertaken at the time of project appraisal and presented in the Project Appraisal Document August 23, 2012, Annex 8: Economic Analysis and Project Paper September 14, 2018 for the AF. Initial economic evaluation of RTIP-II is based on the ‘production surplus’ approach in which increase in rural household income was considered as project benefits while economic analysis for the additional financing deviated from the approach and is based on ‘consumer surplus’ approach. 2. Post-Project economic evaluation seeks to ascertain whether the investment is economically viable. It compares “with” and “without” scenarios, and calculates incremental changes to costs and benefits during the lifecycle of the project. Appraisal was carried out within the broad framework of cost-benefit analysis for a period of 20 year within 2013-2033 range for RTIP-II and 2019-2039 for RTIP-AF. CBA model considers the benefits accrued to the road users through reduction in vehicle operating costs and time savings. 3. Analysis assessed the total of 5,446km roads under RTIP-II and 1,436km roads under RTIP-AF with. The annual costs and benefits were discounted at an interest rate of 9%. The sensitivity of the results was tested with respect to changes of the major parameters, such as investment costs and traffic volume. The financial costs were converted to economic costs by using a conversion factor of 0.82. 4. Costs and benefits are subject to uncertainty and may vary from the base case assumptions. To account for such uncertainties, four sensitivity scenarios were considered including the most conservative case with increased 20% capital investment, 20% decreased benefits. Table 1 - Economic appraisal results for RTIP-II Economic indicators for RTIP-II EIRR % NPV, $ M Base Scenario 28.2 155.68 Capital Cost +20%, 21.5 126.14 Benefits -20% 20.2 95.00 Capital Cost +20%, Benefits -20% 15.4 65.56 Table 2 - Economic appraisal results for RTIP-II-AF Economic indicators for RTIP-II EIRR % NPV, $ M Base Scenario 30.2 127.60 Capital Cost +20%, 24.7 112.62 Benefits -20% 23.6 87.10 Capital Cost +20%, Benefits -20% 19.2 72.12 5. The economic viability of the program remained robust for tested uncertainties, with the EIRR above 9.0 percent in all scenarios. Methodology for the assessment, input data and cost benefit streams are provided in respective sections below. 44 The World Bank Second Rural Transport Improvement Project (P123828) Methodology 6. Due to data unavailability of road condition measurements (IRI), the economic model was built based on VKT (vehicle kilometers traveled) calculation and Vehicle Operation and Travel Time costs with the assumption that RTIPII project contributed to decreasing an average network IRI to 5.0 considering its capital works and routine maintenance component. RTIPII-AF included purely capital works therefore the average network IRI reduction value used is IRI-3.0 7. HDM-4 model was used to calculate unit values for VOC (vehicle operation cost), TTC (travel time cost) at various IRI values. HDM4 vehicle fleet data has been calibrated using with economic cost of fleet consumables. 8. Due to unavailability of data on traffic composition for study network the general assumption on composition has been determined for all sections according to the table below. Table 3 - Applied vehicle composition factors CATEGORY COMPOSITION 1.RIKSHAW 64.2% 2.CAR 17.1% 3.UTILITY 3.2% 4.BUS 2.1% 5.TRUCK 8.0% 6.TRACTOR TRAILER 5.3% TOTAL 100.0% 9. Baseline and By Project sections based on AADT values has been converted to VKT (vehicle kilometres travelled) for each section under the program to determine total annual mobility values on study network. A 5% of annual growth rate has been applied through analysis period. Input Data 10. Vehicle fleet for the study has been designed with the consideration of local conditions. Specifically due to high number of motorcycles and presence of tractor trailers in rural areas relevant categories have been included. 11. time have been valued based on average income at the full economic travel time rate and non-work travel time at a default value of 30% of the full rate. Table 4 - HDM4 Vehicle Fleet Data Item Unit Motorcycle Car Minibus Bus Truck T. Trailer Vehicle characteristics Axles No 2 2 2 2 3 4 PCSE 0.5 1 1.3 1.5 2 2.5 Km/year km 12,000 23,000 40,000 80,000 80,000 120,000 Working time/year Hours 500 550 750 1,750 1,200 2,050 Service life Years 10 10 8 12 12 14 No of passengers No 1 2.35 10 30 0 0 45 The World Bank Second Rural Transport Improvement Project (P123828) Operating weight tones 0.2 1.2 2.00 10.00 20.00 23.00 VEF ESAL 0 0.02 0.02 1.5 2.5 3.5 Economic costs (USD) Vehicle cost $ 1,500 6,000 8,000 17,000 15,000 18,000 Tire cost $ 20 50 70 130 150 150 Fuel Cost L 0.91 0.95 0.91 0.91 0.91 0.91 Lubricant Oil L 3.7 4.3 3.7 3.7 3.2 3.2 Maintenance labor $/h 1 1.5 1.8 1.8 2 2.1 Crew $/h 0 0 0 2.5 2.5 2.5 Passenger working time $/h 1.5 1.5 1.5 1.5 0 0 Passenger non-working $/h 0.5 0.5 0.5 0.5 0 0 time % Of work-related trips % 75% 75% 75% 20% 0% 0% Road user costs 12. RUC comprise of Vehicle Operating Costs (VOC) and Travel Time Cost (TTC) for the traffic using the road. Unit values of VOC and TTC for each vehicle type, road condition and operating speed has been calculated using HDM-4 model with the vehicle fleet parameters defined above. 13. Vehicle operating costs are calculated from the sum of the resource components such as fuel and lubricating oil consumption, tires and spare parts, vehicle maintenance labor costs, vehicle depreciation, and interest. VOC varies for each vehicle type influenced by road geometry, roughness and operation speed. Table 5 - Vehicle Operation Cost at various road condition and vehicle speed (USD/km) 50km/h 60km/h IRI=3.0 IRI=5.0 IRI=7.0 IRI=9.0 IRI=3.0 IRI=5.0 IRI=7.0 IRI=9.0 1.Motorcycles 0.040 0.042 0.047 0.048 0.044 0.046 0.049 0.050 2.Car 0.131 0.135 0.142 0.145 0.131 0.135 0.140 0.144 3.Mini Bus 0.211 0.218 0.232 0.237 0.205 0.212 0.221 0.231 4.Bus 0.255 0.270 0.293 0.301 0.258 0.273 0.287 0.300 5.Truck 0.303 0.320 0.346 0.354 0.305 0.322 0.338 0.353 6.T. Trailer 0.625 0.657 0.701 0.717 0.638 0.670 0.693 0.716 14. TTC is calculated from the average trip time, average occupancy rate, the value of time per occupant and the Annual Average Daily Traffic (AADT). TTC is not applicable for heavy vehicles as the passenger occupancy rate and cargo delay cost for Truck and Tractor Trailer has been set to 0. Table 6 - Travel Time Cost at various road condition and vehicle speed (USD/km) 50km/h 60km/h IRI=3.0 IRI=5.0 IRI=7.0 IRI=9.0 IRI=3.0 IRI=5.0 IRI=7.0 IRI=9.0 1.Motorcycles 0.023 0.023 0.024 0.024 0.019 0.020 0.020 0.021 2.Car 0.054 0.054 0.055 0.056 0.045 0.046 0.046 0.049 46 The World Bank Second Rural Transport Improvement Project (P123828) 3.Minibus 0.232 0.232 0.236 0.238 0.194 0.194 0.197 0.210 4.Bus 0.700 0.702 0.723 0.736 0.590 0.594 0.611 0.656 For RTIP II, average VOC and TTC values of IRI 7 and IRI 9 has been applied to without project scenario and respectively values at IRI 5 has been applied for by project alternative. For RTIPII-AF, VOC and TTC values of IRI 9 has been applied to without project scenario and respectively values at IRI 3 has been applied for by project alternative. Cost Benefit Streams 15. Cost benefit streams represent a combination of monetized values for Vehicle Operation Cost, Travel Time Cost and Emissions Costs. Capital investments and relevant impact on RUC has been incorporated gradually during each program implementation period. The table below summarizes the NPV and IRR for the various cost benefit streams, including the results of sensitivity analysis. Project stage Scenario NPV ($) IRR (%) Base $155,681,557 28.2% Base cost +20% $126,137,159 21.5% RTIP-II Base cost -20% $95,000,847 20.2% Cost +20%, Benefits - $65,456,449 15.4% 20% Base $127,607,446 30.2% Base cost +20% $112,625,426 24.7% AF Base cost -20% $87,103,936 23.6% Cost +20%, Benefits - $72,121,916 19.2% 20% 47 The World Bank Second Rural Transport Improvement Project (P123828) ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS The project objectives remain highly relevant to the development priorities of Bangladesh. The PDO “to provide rural communities with improved access to social services and economic opportunities, and to enhance the capacity of relevant Government institutions to better manage rural transport infrastructure” remained relevant throughout the life of the project and is as relevant now as it was at the time of project appraisal of parent project. The project was in line with the Country Assistance strategy & also CPF of WB which reflected development priorities of the government. The importance and relevance of the objectives are also reflected in the RTIP-II AF which aims to carry forward the achievements of the current project by further sustainable rural connectivity with districts and strengthen institutional capacity for sustainable rural road maintenance and is fully aligned with the Country 7th & 8th five-year plan of GOB. The project design comprising components for improvement and maintenance and rehabilitation of rural road infrastructure and institutional development rightly placed emphasis not only on the improvement of roads but also on their maintenance as well as capacity development activities to facilitate in efficient and effective management of the rural road network by the LGED, and was thus consistent with the overall objectives of improving access to markets and social services for the rural population. Achievement of Project Development Objectives Achievement of the PDO was measured through the key outcome indicators of the project, which included: reduction in average travel time and cost, percentage increase of roads in good and fair condition, increase in maintenance funding, improvement of operating efficiency, increase in revenue mobilization and employment created. Effectiveness Most of the project targets were achieved and surpassed. The SEME is not conducted in this project, the Impact study consultant of RTIP-II is in process to submit their final Report. The draft report of Road User’s Satisfaction survey conducted by independent Consultant is performed which states positive responses of beneficiaries in the access to social services- health, education, agriculture etc. It should be noted that project paid special attention to the employment of women through Labor Contracting Societies in off pavement maintenance work. Targets related to UZR and UNR flood damage roads were achieved & established sustained accessibility to rural areas which revitalized the stagnant socio-economic activities that occurs due flood 2017. Institutional reforms at LGED transformed it into the agency with vision and strategy and a focus on continued modernization. The maintenance policy developed under the project and adopted by LGED is a significant milestone which is now in operation. Environmental strengthening facilitated by the project led to mainstreaming environmental management into regular operations of LGED. 48 The World Bank Second Rural Transport Improvement Project (P123828) However, several challenges remain and would require consistent effort in the short-to-medium term. Introduction of Unified Financial Management System in LGED was not fully achieved as initially intended in large extent in all the Project. It is applied only in RTIP-II; internal audit commences frequently by the Audit Cell of LGED. While during project life there were a number of confirmations by LGED of establishment of a separate Road Safety Cell, currently its functions are embedded with the Maintenance Unit. RTIP-II Development of ICT strategy and action plan experienced significant delays and was only completed by the end of the project period and its implementation will have to be supported by the ongoing projects of LGED. Efficiency It was assumed the Economic Rate of Return (ERR) at appraisal 52 percent for the road maintenance/rehabilitation component as appraisal of Parent project. The ex-post economic evaluation also shows that the periodic maintenance/rehabilitation component has a positive Net Present Value (NPV); thus, all project components yield a satisfactory economic return considering the actual investment costs. Sustainability The sustainability assessment focuses on the likelihood that project outcomes and outputs will be maintained over the economic life of the project or over a meaningful timeframe, demonstrating the persistence of results. The assessment refers to the sustainability of outcomes and outputs that were fully or partially achieved at the time of evaluation, and the intended outcomes that might be achieved in future. Since no evaluation is carried out during the first few years of the project's operational life, evaluators make assumptions about the likely sustainability of operational arrangements, probable future O&M arrangements and environmental effects of projects. The major factors considered when assessing sustainability are described below. Sustainability and managing risks. Assessments of sustainability is considered risks such as political, economic, institutional, technical, social, environmental, and financial events. The assessment also considered the adequacy of risk mitigation measures. The success of environmental and social risk mitigation is assessed as part of the effectiveness assessment, The social or environmental consequences may not be expected to affect the sustainability of output & outcomes. Financial sustainability. This is assessed on a qualitative or a quantitative basis depending on assessing the project's income/ benefit and expenditure flows. The FIRR is the discount rate that equates the net present value of the income and expenditure flows. Conceptually this is similar to the EIRR calculated for efficiency, The FIRR is compared with the weighted average cost of capital (WACC), which represents the opportunity cost of using the funds for the project. 49 The World Bank Second Rural Transport Improvement Project (P123828) Key aspects of the financial sustainability of both revenue and non-revenue generating projects are: the financial capacity of the agency involved, the availability of resources for O&M of the project outputs. The risk of there being inadequate financial resources for O&M which is significantly lower for projects that may generate sufficient benefit/ opportunity cost for users, for projects that rely on the government's budget allocations and subsidies that can be subject to political influence. Recurrent costs include O&M expenditures and periodic maintenance costs, including attendant expenses for refurbishment required to ensure the sustainability of project benefits. In this context LGED and GoB has approved the Rural Road Maintenance Policy that evolve to allocate fund from GoB (revenue) on yearly incremental basis. In addition to this as guided by the policy, there is a provision in each development project to keep fund for rehabilitation, & periodic maintenance. LGED has introduced Performance Base (PBMC) method of maintenance contract for continuous maintenance of rural roads. This is a paradigm shift from traditional method (Routine & periodic) of maintenance contract. These are clear evidence to take attempt by LGED & GoB for sustainability of Road infrastructures. Institutional sustainability. The assessment of institutional sustainability was done considering factors such as the ability to ensure adequate levels of qualified human resources, finance, equipment and other inputs, and the suitability of organizational arrangements and processes, governance structures, and institutional incentives. The institutional assessment includes an analysis of how the ownership, functions, structures, and capacity of project-related agencies affected project-related inputs, output and service delivery, including the institution's capacity. It is noticed that the LGED organizational structure has been reshuffled with provision of significant number of senior level supervisory (SE, Additional Chief Engineer) & junior level implementation staff (Senior Assistant Engineer, Upazila engineer & Sub assistant Engineer). For Capacity building Training programs are continuing that would yield fruitful result for sustainability of the project. Environmental and social sustainability. The project's likely medium- to long- term effects on natural resource management, pollution, biodiversity, and greenhouse gas emissions should form part of the sustainability assessment. A project that is not environmentally sustainable is very unlikely to generate long-term positive development impacts. This enhanced emphasis on environmental sustainability and climate change mitigation or adaptation is a relatively new requirement in evaluating projects. Close attention also paid to the effects of the project on social sustainability, for instance how the project is accepted by the local communities and stakeholders. Further, in specific cases the evaluation assess: (i) the potential for affected people to have continuous access to project benefits; (ii) for projects involving involuntary resettlement, the likelihood that resettled persons continue to have access to services in the new sites; and (iii) opportunities for participation, particularly of vulnerable stakeholders, in the O&M of projects. These are the sustainability modality of the project to be rated moderately satisfactory. Justification of Overall Outcome Rating 50 The World Bank Second Rural Transport Improvement Project (P123828) Rating: Moderately Satisfactory. The project remained very relevant to the development priorities of Bangladesh and achieved significant results in improving & sustained rural road infrastructure in 26 districts of Bangladesh and providing better connectivity. However, some of the project targets could not be fully reached, and despite very good record of implementation of key steps of institutional reform of LGED, a number of areas of institutional strengthening proved to be challenging for implementation. Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development It is reported by PMU that the SEME was not conducted under this project. The consultancy for Impact study under this project has submitted their report that has reflected the impact in different services, changes in socio-economic condition of the beneficiary. The project has benefitted the surrounding communities in many ways including reduced travel time to jobs and other destinations, lower cost of travel, access to all-weather road etc.13 The Impact Study report found that the general-purpose travel time increased in addition to many other significant positive outcomes due to the project interventions. This includes total assets increase by 6%, cropping intensity increase by 3%, positive crop diversity, significant increase in travel convenience and business expansion, significant increase in travel distance of rural motorized vehicle, reduced business-related travel time by 8% by enterprises, increase in rural employment and reduction of food prices14. Road User Satisfaction Survey15 reveals positive outcomes including 40% overall satisfied users (23% for non-project roads), 37% satisfied users about the road surface (17% for non-project roads), and 22% satisfied users about the maintenance of roads (14% for non-project roads). A handful of users of the improved roads were interviewed in two project districts for the purpose assessing the outcomes, benefit & found positive outcomes like ease of access, increase in land value, higher price of farm produce, ability to send agricultural produce from the farm to cities at much higher price than before, income increase of transport service providers etc. were reported. (b) Institutional Change/Strengthening The project’s impact on institutional development has been mainly in areas of: (i) definition of LGED role, core functions and resources for strategic planning; (ii) network ownership and management; (iii)) LGED organizational structure, staffing profile and skills mix; (v) governance and performance accountability; (vi) enhancement of ICT assets, IT strategic planning, GIS and MIS capabilities; (vii) Human Resources development and training to support LGED functions and priorities; (viii) road network maintenance, and (ix) Environmental Management. (c) Other Unintended Outcomes and Impacts (positive or negative) Road Safety work was to scale up to all districts under the RTIP-II project with extensive awareness building. 13 LGED Zakiganj. (July 21, 2019). Documentary RTIP 2 LGED [Video]. YouTube. ttps://www.youtube.com/watch?v=g8Xxs5PYVHM 14 Impact of the Second Rural Transport Improvement Project (RTIP-II). (December 2022) Bangladesh Institute of Development Studies. 15 Road User Satisfaction Survey (Endline) Under Second Rural Transport Improvement Project (RTIP-II). March 2021. 51 The World Bank Second Rural Transport Improvement Project (P123828) Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops The Road user’s Satisfaction Survey conducted under the project confirmed positive impacts of the project on improved access to social services and economic opportunities with user’s satisfaction. Assessment of Risk to Development Outcome Rating: Moderate The risk to development outcome of this operation is rated as Moderate. The main sustainability risk relates to a lack of maintenance finance and its efficient use. The commitment of GoB to increase maintenance funding was in part demonstrated by increased amounts allocated during project life and as supported by approval of the National Rural Roads Maintenance Policy which has made provision to utilize a portion of development budget to utilize in maintenance. The quality of completed works was considered acceptable; however, the big challenge for sustaining roads in good condition represents the increase of traffic on rehabilitated roads, particularly overloaded truck & also annual flooding due climate change. Overloading is recognized as one of the major maintenance and safety challenges for Bangladesh road network. The National Road Safety Council is working on the proposed legislation to address overloading. Assessment of Bank and Borrower Performance Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory Preparation of the project was thorough and built heavily on the analytical and TA work done under the previous WB-funded projects - (RRMIMP-I and RRMIMP –II, RTIPI). Some important steps were agreed during project preparation, the project was designed well to include key elements needed for achieving PDO and piloting new concepts and approaches. The Bank team spent considerable time discussing maintenance needs, defining selection criteria and moved to increase funding for the maintenance- related component & scale up PBMC. The team was adequately composed with good mix of technical skills. However, a number of weaknesses in the results framework were overlooked, including errors in indicator definition and missing baselines. The team was probably too optimistic in estimating the implementation period for such a complex project. Thus, the overall Bank performance in ensuring Quality at Entry is rated as Moderately Satisfactory. (b) Quality of Supervision Rating: Moderately Satisfactory This has been a difficult project for Bank staff to supervise and monitor effectively just because of the sheer volume of sub-projects. Considerable efforts were made to diligently monitor implementation of the contracts as and when significant delays in contract implementation is noticed in widely spread areas of project . As reported by LGED, in 2015, the team spent considerable time to address contract management issues and followed-up with LGED on proactive actions. This eventually led to improvements in contract management and project implementation picked up. The project had two Task Team Leaders during project implementation and benefitted greatly from Dhaka-based Co-TTL. 52 The World Bank Second Rural Transport Improvement Project (P123828) The frequency of full supervision missions was twice a year and these were supplemented by interim missions. Bank mission documents were clear in admitting issues and problems early on and were well prepared. While the bulk of supervision efforts were done with high quality, the team missed to address issues related to the indicators and their monitoring. The restructuring at the time of Additional Financing have been used the same results framework. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory The project was well prepared and executed with significant supervision efforts by the Bank team, however, some shortcomings during project preparation and implementation should have been addressed, particularly relating to monitoring results. The task team actively addressed client requests in a timely manner and adapted accordingly as major issues emerged. Proactive engagement with the LGED on contract management enabled implementation to improve and pick up. Borrower Performance (a) Government Performance Rating: Satisfactory The government had a strong commitment to the project and facilitated its timely completion. The provisions of the legal covenant on increased maintenance funding were complied with and there were no issues with counterpart funding. The government supported the important steps of the institutional strengthening of LGED by approving the codes of practices and new organizational structure of LGED made compliance of the covenants. (b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory LGED is one of the best performing agencies in Bangladesh and had considerable experience with implementation of donor funded projects, including three Bank-funded projects. The PMU’s capacity to implement the project improved over the life of the project and contributed towards completion of the project with huge volume of contracts and activities. There were 2 Project Directors for the Project(AF) and about 47 positions involved in project implementation including staff in the districts. Three staff in LGED HQ were engaged under the previous Bank-funded project (FM, social and environmental specialist- which developed institutional memory of PMU and ensured consistency with earlier initiatives. Overall, the LGED performed well in implementation of this large project and managed to achieve intended results. However, the project suffered from procurement irregularities identified in post- reviews, delayed contract management issues and weak financial management. Thus, the implementing agency performance is rated as Moderately Satisfactory. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory 53 The World Bank Second Rural Transport Improvement Project (P123828) Given that Government performance on the project is rated as Satisfactory and Implementing Agency performance is rated as Moderately Satisfactory, overall Borrower performance on the project is rated as Moderately Satisfactory as a high-level empowered Project Steering Committee (PSC) regularly also provide oversight and undertake periodic review of project implementation and mitigate the issues hampering the progress. Project Steering Committee, was chaired by the Secretary, Local Government Division, Ministry of Local Government, Rural Development and Cooperatives, and also includes other members of relevant departments etc. Lessons Learned The lessons learned during implementation of RTIP-II includes: Land Acquisition and Resettlement aspects. The implementation of road works was often delayed due to the resolution of the LA&R actions but the road sections which did not involve any LA&R actions, were implemented as planned. The land acquisition therefore was tried to minimize to the extent possible; all actions including compensation to the affected persons were completed prior to awarding civil work contracts in parent project, But In case of Additional Financing there were no land acquisition & hence no resettlement. Price Escalation Provision. Similar to RTIP II , in case of AF civil works contracts did not include the price escalation clause (construction period was less than 18 months). However, construction material prices did rise during the implementation period especially during the COVID 19 period & worldwide economic meltdown because of Russia’s invasion of Ukraine. Many contractors were forced to abandon the works due to rise of price of construction materials and also inflation. The civil work contracts should include such a provision of price adjustment. Inclusion of EMP in Bill of Quantities (BoQ). The contractors quoted lower price for the items of environmental management plan (EMP) in BOQs, mainly due to their lack of awareness and experience. As a result, the contractors were unwilling to perform this obligation. To ensure contractors should not neglect on their contractual obligations, the executing LGED should make aware about the important safeguard component & motivate the contractor not to underprice this BOQ items. Importance of time sequencing of Implementation. On many occasions LGED awarded civil works contracts at the beginning of rainy season or late in the dry season, resulting in non-activity of contractors due to this half of the year pass without work that delays in contract implementation. All contracts which were awarded in this pattern took one-year extra time for completion. This did not impact maintenance contracts but only improvement works. On the other hand, contracts awarded by the end of rainy season need two full dry seasons to be complete. This issue should be adhered to in future. Mobilization and Procurement. Early procurement of contract Packages is absolutely essential if the project is to meet its implementation schedule. Most of the contract packages in year one was prepared by LGED before the Consultants were mobilized .To achieve this end Advance recruitment of the Consultant services should 54 The World Bank Second Rural Transport Improvement Project (P123828) be implemented or the project preparation consultants should prepare the tender documents for the first-year activities of the work. Consultant Recruitment The early recruitment of the Consultants would have improved the performance of the project in the early stages. Recruitment took over one year to complete. The steps in this process should be reduced by Government and by Donors to achieve early mobilization of the Consultants. In this case, upfront action for recruitment of consultant services could be considered as a loan covenant before place the project for Board approval by WB. Price Escalation The project has been fortunate that most of the works were awarded to contractors before the recent severe price escalation occurred. However, price escalation occurred at the last two year due to influx of Covid 19 & severe worldwide economic meltdown for Russia’s invasion of Ukraine. This situation severely affected the progress of works. Some contract is abounded by the contractor remain unfinished. Taking it an example, an allowance for price escalation should be made in the financial arrangements for implementation of contracts. A ten percent provisional sum should be provided for escalation of cost of civil works contracts. Presently price escalation is not permissible as per PPR if the sub project execution period less than 18 months. But in the context of Bangladesh, none of the contract size as in LGED can be completed without having two working seasons i.e., two years a time, so there should be provision of price escalation, it would not be permitted if the contractor don’t work as per schedule work plan, or spending time idly or willingly. Staff Rotation The training programs included the staff who were mostly directly related to the infrastructure being improved and/or constructed under the project (field supervision, quality control, contract administration, financial management, maintenance management). Frequent transfers of trained Upazila and District Staff, however, prevented the project from reaping the full benefit from this comprehensive training program, although the respective staff would continue to work within LGED. Therefore, trained staff should not be transferred from the project unless there is serious allegation against him. Drawback in Design Geometry of road cross section, i.e., width of pavement, hard shoulder, etc., should have been based on accurate traffic data, projected for the whole design life of the road. Performance base contracts: Performance base contracts was a pilot component in RTIP-II. 450 km RR were implemented & maintained in RTIP-II. The experience is excellent for the sustainability of Roads. Repair & maintenance of roads initially continued for a period of five years. There were mixed results, we have found, where the Engineers & the contractors were well motivated it has yielded excellent results, in other place failed. After initial repair operations, the contractor didn't have major work to do other than only minor works but got a monthly fixed payment based on compliance with the define indicators/ surface condition . The roads remain updated for smooth vehicle movement. It removed the burden of maintenance from the head of the road agency (LGED) other than monitoring for a period of five years. 55 The World Bank Second Rural Transport Improvement Project (P123828) In addition to this, as the road was in good condition, people benefited continuously in sustained accessibility, mobility - getting services from agriculture, education, health sectors etc. with satisfaction, those enhances the socio-economic development. But in traditional way, the road Agency (LGED) has to start maintain the road managing fund from GOB after 2nd year, which is not so easy due to insufficient fund or the road remain unattended. - becomes destroyed & people don’t get benefit in steady way. In LGED context, when piloting period is over, it again became unattended, continuous routine maintenance was not resumed by LGED, so the effort of piloting went in vain. PBMC was not continued or PBMC was not replicated in other RRs. We make an overview on one of PBMC road in Tangail districts under RTIP11 which shows that PBMC involves 50% less cost than traditional Periodic maintenance. As PBMC costs incurred BDT: 3,100,000/km, Periodic maintenance cost is BDT: 7,500,000/Km. this is only Civil works cost not the opportunity cost & other social or operating cost. It should be explored by in depth analysis. In this situation, for sustainability point, we think there should be a covenant for mainstreaming the PBMC in LGED GOB maintenance, in future lending. Selection of Contractors: Past experience and their technical & financial capability and performance should be considered in contract awards. Default contractors should be black-listed and prevented from participating in future works. Rating of contractors should be done based on performance and a data base should be maintained for future use. Minimum criteria should be established. Contractors, who failed to complete the work, should be black-listed at least for some year’s/project period. They should be penalized as per contract Rules if spent time without any reason or not follow the time schedule. Some contractor sale/sublet/ lend the contract to some unskilled, inefficient sub-contractor at the cost of some percentages of money by giving power of attorney without getting permission from the client, they - the main / prime contractor remained absent for doing the job where as they acquired the contract showing their manpower, financial capacity, & experiences. As they remained absent which hampered the work and cannot be executed in time. This practice should be identified & debarred from the future contracts. Contractors who have previous history of litigation without valid ground should be prevented from participating in bidding process. Contactor’s payment The invoice of the contractor should be disposed of as quickly as possible to make a smooth cash flow otherwise work may delay or would not be completed in time. Such system should be included. There should a defined time limit in the contract document so that the contractor can get payment at earliest possible time. The provision of bonus should be introduced if the contractor completes the work earlier than schedule. Specifications Marshal Mix design method and test procedure to be included in bituminous works. LA value for stone aggregate to be maximum 35% in bituminous & concrete works. Currently this is specified to 40%, which is excessive. 56 The World Bank Second Rural Transport Improvement Project (P123828) Equipment for Testing Bituminous work testing equipment need to be provided for district laboratories urgently such as extraction equipment for bitumen content test and core cutting machinery for density test. At least equipment for bitumen content testing should be available at each district laboratory. Consider to provide some basic testing equipment such as set of sieves, field density testing equipment, etc., to Upazila engineers or to contractors for speeding up of field tests. One central laboratory at XEN's office for the whole district is not enough, in particular for large districts, for proper quality control work. Program & Progress Program should be given with Microsoft Projects indicating the critical path so that the progress could be monitored effectively. Standardized forms for Recording Quantities of work done. Currently the Measurement Book is the sole record for quantities of work performed. The Measurement Book has strong legal ground, but is not very user-friendly for recordings nor easy to read. Excellent complement to the Measurement Book would be standardized forms for different activities, which should be used during the implementation of the Contracts and safely kept by an assigned person. Benefit Monitoring and Economic Analysis There should be provision of Benefit Monitoring and Financial Analyst within Design and Supervision Consultant so that benefit can be measured, and economic analysis can be done for input versus output. This can also be done by separate package such as Integrated Performance Audit, but Terms of Reference should be made properly & separately. Rural Transport Safety The study carried out but by BUET under RTIP-II LGED was very exclusive. Road Safety Manual prepared by BUET is very unique having international standard. Both LGED and World Bank should promote it. Action against Defaulter Contractor One factor against achieving less success in project is incompetence and reluctance of contractor in performing work professionally. GOB &World Bank should introduce appropriate action against defaulter contractor in future projects. Integration of Work There were different partners working under same project. For example, Management Support Consultant (MSC) and Integrated Performance Audit Consultant (IPAC) worked for project besides D&S Consultant. Lack of coordination and integration could affect the project progress. Environmental management for Future Field Engineers and AREs were involved in routine Environmental Monitoring and Supervision of contractors’ work. However, in most cases as there was no direct pressure from XEN to the contractors for implementing EMP and ECP, the contractors did not take instruction and recommendation from the Field Engineers and as well as from AREs. Therefore, there was a gap in integrating EMP with civil work in the field level due to lack of cooperation of contractors. Environmental Specialist from HQ visited selected subprojects during different stages of construction. Environmental Specialist even after trying 57 The World Bank Second Rural Transport Improvement Project (P123828) to stop payment to contractor was unsuccessful to improve environmental performance of most contractors. Environmental Management of different subprojects was as important as civil works and without implementation of EMP, engineering construction was considered incomplete. Upazila Engineer and XEN stopped the contractor work after site visit when they found the contractors were not following the Environmental Specification stated in the Tender Documents. In order to implement EMP in the subprojects, ECP, Manual for Environmental Supervision and Monitoring and Environmental Safeguard Policy of the World Bank should be followed by all concerned parties, including Upazila Engineer and XEN. Institutional arrangement for Environmental Management of rural infrastructures development and operation by LGED need to be improved where the Environmental Management capacity both at field level of LGED and at HQ level need to be strengthened. Institutional arrangement for Environmental Management of LGED project should be uniform for all the projects and environmental standard remarkable change noticed presently. The perception that too much environmental works has been incorporated in RTIP lead many district level LGED staffs to show less concern in implementing the ECP and EMP in these subprojects. Ensue of environmental standard should be considered as important as ensure standard of civil works. However, this may require a long-term planning. A short-term solution will be to encourage XENs to be more involved in Environmental Management of subprojects before they approve payment to contractors. XEN in district level and EMU at LGED HQ should ensure that the “Manual for Environmental Monitoring and Supervision” is strictly followed to ensure proper implementation of EMP, ECP and Environmental Specification of Tender Documents. Turfing is also an essential component of slope protection and proper care should be ensured for its maintenance. Social Management: Social management plan should be prepared in each and every subproject. Social safeguard issues- such as LA, RAP, GRV, GRM - GRC, SSC should be followed in filed during execution. All the humanitarian issues such as gender equity i.e., man & women would have equal wages and opportunity from the project. The implementing Agency should set up their mind that “we would not Build Roads those would create social hazard rather than benefit”. Covenant: The Covenant of the project are compiled and satisfied. Conclusion: RTIP-II, LGED has achieved objectives, output and goal through planned interventions. Future project may be designed based on lessons learned from RTIP-II LGED & AF as well. 58 The World Bank Second Rural Transport Improvement Project (P123828) ANNEX 6. LIST OF SUPPORTING SOCUMENTS Bangladesh - Country partnership framework for the period FY16-20 (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/362231468185032193/Bangladesh-Country- partnership-framework-for-the-period-FY16-20 Bangladesh - Country assistance strategy for the period FY11-14 (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/441491468200680406/Bangladesh-Country- assistance-strategy-for-the-period-FY11-14 Impact of the Second Rural Transport Improvement Project (RTIP-II). (December 2022) Bangladesh Institute of Development Studies. Implementation Completion and Results Report (IDA-37910 IDA-37911). Report No: ICR2480. Rural Transport Improvement Project. 2013. The World Bank Road User Satisfaction Survey (Endline) Under Second Rural Transport Improvement Project (RTIP-II). March 2021. “Sixth Five Year Plan Accelerating growth and Reducing Poverty”. 2011. General Economic Division, Planning Commission, Ministry of Planning, Government of the People’s Republic of Bangladesh. The World Bank. Project Appraisal Document. Additional Credit and Restructuring for Second Rural Transport Improvement Project. 2018. Report No. PAD2766 The World Bank. Project Appraisal Document. Second Rural Transport Improvement Project. 2013. Report No. 65543-BD. World Bank. Bangladesh - Country Partnership Framework for the Period FY2023 - FY2027 (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/099040523102036987/BOSIB037c73db00920ae960a4e78f a47587 8th Five Year Plan Promoting Prosperity and Fostering Inclusiveness. Dhaka, Bangladesh. General Economic Division (GED), Bangladesh Planning Commission, Government of the People’s Republic of Bangladesh. December 2022. 59 The World Bank Second Rural Transport Improvement Project (P123828) ANNEX 7A. PROJECT MAP RTIP-II 60 The World Bank Second Rural Transport Improvement Project (P123828) ANNEX 7B. PROJECT MAP RTIP-II AF 61 The World Bank Second Rural Transport Improvement Project (P123828) ANNEX 8. SUMMARY OF ROADSIDE INTERVIEWS Serial Interviewee location, profession* Main benefit of the project interventions 1 Roadside resident Road improvement led to reduced travel Ashutiapara, Kishorganj time, reduced poverty and contributed to huge increase in land price 2 Roadside resident Road improvement led to reduced travel Ashutiapara, Kishorganj time and contributed to increase in land price 3 Truck Labor Road improvement from unpaved to paved Gojadia, Kishorganj has allowed to sell agricultural products at higher value and exported to far away locations in the country. This has led to poverty reduction and income increase. 4 Resident Road improvement from unpaved to paved Shimultola, Karimganj, Kishorganj has immensely helped to access so many opportunities. Rainy season was a nightmare but now the road is accessible. 5 Resident Road improvement from unpaved to paved Shimultola, Karimganj, Kishorganj has immensely helped to access so many opportunities. Rainy season was a nightmare but now the road is accessible. 6 Autorickshaw driver Higher flow of users in the road observed Islampur, Karimganj, Kishorganj after improvement of road. 7 Autorickshaw driver Higher flow of users in the road observed Islampur, Karimganj, Kishorganj after improvement of road. 8 Grocer Road improvement allowed local vegetables Musapur, Raipura, Norshingdi to be sent to different districts including the capital at higher prices than before. 9 Union Parishad Chairman Road improvement has been great for local Raipura, Norshingdi residents to reach places easily. 10 Local resident Road improvement from unpaved to paved Raipura, Norshingdi is a welcome change, now the road may be used year-round and much easier to use for so many purposes. 11 Labor leader and resident More agricultural products can now be Raipura, Norshingdi exported to other districts, ease of construction materials transport through the road as this is now improved. 12 Roadside Grocer Higher wage is now being earned as the Borshangan, Sadar, Norshingdi road is better and more users who can travel faster 13 Autorickshaw driver Higher wage is now being earned as the Borshangan, Sadar, Norshingdi road is better and more users who can travel 62 The World Bank Second Rural Transport Improvement Project (P123828) faster 14 Autorickshaw driver Higher wage is now being earned as the Borshangan, Sadar, Norshingdi road is better and more users who can travel faster *Names not provided to ensure privacy of the interviewees. 63 The World Bank Second Rural Transport Improvement Project (P123828) ANNEX 9A. SUMMARY OF IMPACT EVALUATION STUDY The prime objective of the impact evaluation was to acquire the endline socioeconomic scenarios and compare them with the baseline data collected before the intervention of the RTIP-II. To pursue this objective, the Impact Evaluation: • Conducted impact studies of rural roads and waterways improved under the RTIP-II; • Assessed the contribution of rural roads towards poverty reduction, employment, income, health, education, and achieving Sustainable Development Goals (SDGs); • Collected the end line data, along with citizen engagement surveys, and prepared analytical and evaluation reports. The methodology of the Impact Evaluation is to correctly identify and measure the causal effects of an intervention and its outcomes. To isolate the effects, it was necessary to determine what would have happened in the absence of the program. For this program evaluation, two groups were considered: treatment and comparison groups. The treatment group is a representative sub-sample of the roads or waterways that received the intervention. In contrast, the control group is a representative sub-sample of the roads or waterways that were not intervened. The analytical technique used was the difference-in- difference (DID) method to identify the casual relationships of RTIP-II interventions. Key findings can be grouped in grouped in the following categories: Household, transport users and owners, enterprise, and community. i. Household As road infrastructure is a vital component of the agricultural transformation, this study found that the program intervention positively affects the cropping intensity. A significant 7% increase in farm households owning or operating plots of land of higher quality is observed under the program intervention. This implies a significant expansion of the total operating land by bringing seasonal fallow lands under cultivation. Operating crop acreage has also increased through the cultivation of different crops within the existing cropping pattern. The estimated effects of the program intervention on crop diversity are significant (3.5%), indicating that this program encourages farmers to increase crop diversification. The intervention was successful in diversifying farm households’ cultivation of different crops, including high-value crops rather than only rice. In addition, the program intervention led to a significantly higher market orientation as production plans followed market signals and helped to produce more marketable commodities. There is a good potential for smallholder farmers to transform from subsistence to commercial farming. The differences in educational outcomes in the project and control roads are generally small and also statistically insignificant. The years of schooling in both project and control areas have increased by about 0.9 years. Although poverty reduction is a key project objective, this study does not find significant project impacts. The table below shows the percentage of poverty increases for moderate and extreme poverty from the baseline to post-intervention period. 64 The World Bank Second Rural Transport Improvement Project (P123828) Poverty Percentage increased Moderate poverty in control areas 7.56% Moderate poverty in project areas 5.14% Extreme poverty in control areas 4.48% Extreme poverty in project areas 2.05% Wage and salary income is the largest source of income for both areas, and its contribution has increased in the post-intervention period for both treatment and control groups. Additionally, income from wages and salaries is found to be reducing inequality. The study finds that the two major motivations for migration due to road improvements by RTIP-II involve “better earning opportunities” and “seeking employment” comprising about 95% to 98% responses from migrated individuals in both rounds. Among other findings, the study observed that the incidence of migration is not significantly affected by the rural roads and waterways development under the RTIP-II, except for the case of overseas migration where the likelihood of migration increases by 2.2% in the project areas. This supports the view that improvement in rural road networks may reduce the incidence of migration in developing countries, although it can increase in the short-run. The overall distance traveled by motorized-transport has decreased across all mobility-related parameters due to the RTIP-II intervention. Distance traveled with motorized transport to accessing healthcare services reduced by 29.5% after transport infrastructure road improvements. For general-purpose mobility, the travel time/km has increased by 20% for motorized transport users, with the travel cost increasing by 44%. This this increase in travel time for motorized transport is also observed for market access and health-related mobility. The additional time requirement might be due to growing traffic congestion along the improved roads. An alternative explanation could be that the number of stoppages on the way and the speed of movement of the hired transport are beyond the control of the passengers. ii. Transport users and owners The findings provide evidence that the project roads offer multifaceted options for transport users to choose their preferred mode of transport. Improved roads increased daily or weekly frequency to the local markets. The impacts on travel convenience, transport convenience, and business expansion are positive and statistically significant (25%, 43%, and 94% respectively), indicating that the project roads increase the user's comfort and business activities. Project roads enhancing economic activities for transport owners in rural areas can be seen in the table below: Activity Percentage increased Project roads significantly increases the likelihood 106% of owning an electric rickshaw Part-time employment activities 31% Full-time employment activities 11% Mileage run by transport vehicles during the rainy 27% season 65 The World Bank Second Rural Transport Improvement Project (P123828) Mileage run by transport vehicles during the dry 48% season Movements for agricultural freight 17% Movements for non-agricultural freight 32% iii. Enterprise Findings revealed that the project roads helped enterprises reduce their business-related travel time by 8%. Inventories of raw materials and products of the enterprises increased significantly located along the project roads. For example, the product inventory of the enterprises located along the project roads increased by 38% compared to those in the control area. The findings indicate that the project roads offer multifaceted avenues for enterprises resulting in an increase of the number of customers or the number of months operated in a year. Overall, the RTIP-II projects have significantly increased business values and positively affected enterprises in rural areas across the country. iv. Community Rural road improvement has significant impacts on rural employment, food prices, and daily wages. The number of establishments and village connectivity has increased after the intervention. Road improvements attract new capital investments and encourage the entry of formal, manufacturing firms. This leads to an increase in local labor demand, and as a result, village people responded by increasing their employment in manufacturing and transitioning out of agriculture, sales, and services. The project intervention reduced the relative prices of major food items: sugar by 3.2%, vegetables by 8.3%, and cooking oil by 9.2%. With road connectivity, there is an integrated market for foods, which allows food commodities to move spatially from surplus to deficit areas. Key overall findings of the impact evaluation include: • The number of establishments and village connectivity has increased after the intervention. • Road improvements attract new capital investments and encourage the entry of formal, manufacturing firms. This leads to an increase in local labor demand, and as a result, village people respond by increasing their employment in manufacturing and transitioning out of agriculture, sales, and services. • Non-farm wage employment has risen more after the intervention. In addition, they can absorb the labor of lower-skilled, marginal workers, and these people could gain to a great extent. This employment scenario results in greater access to nonfarm earnings opportunities and reduced dependence on agricultural wage work. • Project intervention reduces the relative prices of major food items. • With road connectivity, there is an integrated market for foods, which allows food commodities to move quickly from surplus to deficit areas. • Low transport costs and good agricultural productivity trigger to reduction in food prices after project intervention. 66 The World Bank Second Rural Transport Improvement Project (P123828) ANNEX 9B. SUMMARY OF ROAD USER SATISFACTION SURVEY The Road User Satisfaction Survey shows that the Second Rural Transport Improvement Project (RTIP-II) implemented by LGED has improved the transportation system and facilitated the improvement and rehabilitation of roads, cross drainage structures, and road maintenance. The project shows that while having some limitations, it has had a significant impact on the socioeconomic status and behavioral changes of road users, including an impact on education, income, frequency of travel, purpose of traveling, road user’s safety while driving, increased accessibility for women, children, and people with disabilities. The study that was carried out was a survey to assess the increase in the level of satisfaction from road users of the project area through systematic data collection. It provided insights into the issues and concerns raised by the road users in the RTIP-II parent project area. The methodology for the study combined both quantitative and qualitative approaches. The process of the study was participatory and obtained maximum involvement of project stakeholders, including road users. Data was collected from both primary and secondary sources. Quantitative results of the study include gives evidence that the condition of the project and control roads have improved in the past five years. For the project roads, nearly half of the road user respondents (48%) claimed that the condition of the roads have improved marginally, and more than one-third (37.7%) claimed that that they have been improved substantially. The study gives evidence of overall satisfaction with improvements on the project and control roads. A good number of the road users in the project roads were satisfied (40.2%), whereas almost half (23%) of the users were satisfied in control roads. Respondents were satisfied with the quality of road surface, maintenance, traffic flow, and safety, condition of cross-drainage structure, road signs, and road side amenities. Less satisfaction has been observed in the control roads. During in-depth interviews, road users specially expressed their concern about the lack of routine maintenance, and the drainage issues in the case of Bazaars or small-town areas, etc. This study found that over past five years fuel consumption has substantially decreased in the project roads as a result of improved road conditions. A majority (42.1%) of the respondents who drive heavy vehicles (i.e. trucks, lorry) claimed that the fuel consumption has been decreased marginally. In contrast, 28.1% of them claimed that the fuel consumption has been increased. Respondents who drive light vehicles (i.e. car, motorcycle, auto-rikshaw) said that the fuel consumption has been increased over the time both in the project and control areas. Qualitative results of the study includes that the impact of road improvements on businesses and new employment opportunities has been positive, and many respondents expressed satisfaction over the role of the concerned authorities for road maintenance and monitoring activities. Most of the Focus Group Discussion (FGD) participants expressed their satisfaction about the road improvements of the project. The participants claimed that a lot of work has been done on the roads in 67 The World Bank Second Rural Transport Improvement Project (P123828) the last five years. It was clear from the FGDs, that adopted projects have improved the transportation system and facilitated the improvement of roads. As travel time and other costs have been decreased, profits from agricultural products have increased as market access has improved. It was also expressed that roads play a beneficial role in bringing crops from farm to house. Trade, transportation and marketing of agricultural products have been facilitated. With improved road access more products are available locally and the number of local businesses has increased. Other benefits of road improvements expressed by FGD participants includes that it has become easier for school going children to travel to school; the roads have played a positive role in getting medical services at district level or Upazilla hospital; more employment has been generated, and the net income of target beneficiaries has increased with new employment opportunities (especially through local business opportunities, agro-based employment opportunities and increased agricultural productivity). Improved road access has also led to an increase in traffic/travel volume and frequency. The last five years have seen a variety of changes and it varies in the respective districts. An example from the Mymensingh district is how construction of the road has created a market in the vicinity, expanding business and created new jobs. Road development has also impacted the livelihood of the people similarly in the Netrokona district. 68 The World Bank Second Rural Transport Improvement Project (P123828) ANNEX 10. PROJECT PHOTOS (before/after in the same location) Road rehabilitation – before project Road rehabilitation – after project Road rehabilitation – before project Road rehabilitation – after project Unpaved road – before project Paved road – after project 69 The World Bank Second Rural Transport Improvement Project (P123828) Unpaved road – before project Paved road – after project Road maintenance – before project Road maintenance – after project Unpaved road – before project Paved road – after project 70 The World Bank Second Rural Transport Improvement Project (P123828) Bridge approach maintenance – before project Bridge approach maintenance – after project Road rehabilitation – before project Road rehabilitation – after project 71