PCR: BAN 22237

ASIAN DEVELOPMENT BANK

PROJECT COMPLETION REPORT

ON THE

JAMUNA BRIDGE PROJECT

(Loan 1298-BAN[SF])

IN

BANGLADESH

December 2000
 CURRENCY EQUIVALENTS

Currency Unit – Taka (Tk)

At Appraisal
(31 January 1994)

Tk1.00 = $0.0249
$1.00 = Tk40.07

At Project Completion
(30 June 2000)

Tk1.00 = $0.0197
$1.00 = Tk50.85

ABBREVIATIONS

AADT – annual average daily traffic

ADB – Asian Development Bank
EFAP – erosion and flood action plan
EIRR – economic internal rate of return
EMAP – environmental management action plan
ICB – international competitive bidding
IRP – independent review panel
JMBA – Jamuna Multipurpose Bridge Authority
NGO – nongovernment organization
O&M – operation and maintenance
OECF – Overseas Economic Cooperation Fund
PAPs – project-affected persons
PCRM – Project Completion Review Mission
POE – panel of experts
RRAP – revised resettlement action plan
TA – technical assistance

NOTES

(i) The fiscal year (FY) of the Government ends on 30 June.

(ii) In this report, “$” refers to US dollars.
 CONTENTS

Page

BASIC DATA ii

MAP vi

I. PROJECT DESCRIPTION 1

II. EVALUATION OF IMPLEMENTATION 2

A. Project Components 2
8. Implementation Arrangements 3
C. Project Costs and Financing Plan 3
D. Project Schedule 4
E. Engagement of Consultants and Procurement of Goods
and ~ervlces 4
F. Performanceof Consultants,Contractors,and Suppliers 5
G. Conditionsand Covenants 5
H. Disbursements 5
I. Environmentaland Social Impacts 5
J. Performanceof the Borrowerand the Executing,A.gency 6
K. Performanceof the Asian DevelopmentBank 7

III. EVALUATION OF INITIAL PERFORMANCE AND BENEFITS 7

A. Financial Analysis 7
B. Economic Performance 7
C. Attainment of Benefits 8

IV. CONCLUSIONS AND RECOMMENDATIONS

A. Conclusions 8
B. Lessons Learned 9
C. Recommendations 9

APPENDIXES 11
 BASIC DATA

A. Loan Identification

1. Country - Bangladesh
2. Loan Number - 1298
3. Project Title Jamuna Bridge Project
4. Borrower - People's Republic of Bangladesh
5. Execuitng Agency - The equivalent in various currencies of SDR145.607
million ($200.0 million equivalent) from the Asian
Development Bank's (ADB's) Special Funds resources.
6. PCR Number - PCR: BAN 597

B. Loan Data

1. Appraisal
- Date Started - 06 September 1993
- Date Completed - 20 September 1993

2. Loan Negotiations
- Date Started - 12 January 1994
- Date Completed - 13 January 1994

3. Date of Board Approval - 08 March 1994

4. Date of Loan Agreement - 18 March 1994

5. Date of Loan Effectiveness

- In Loan Agreement
- Actual Number of
Extensions
6. Closing Date
- In Loan Agreement
- Actual
- Number of Extensions
7. Terms of Loan
- Maturity (no. of years)
- Grace Period (no. of years)
- 16 June 1994
- 12 August 1994
- 30 June 1999
- 30 June 2000
one
- 40
- 10 (service charge of one percent per annum)

8. Disbursements

a. Dates

Initial Disbursement Final Disbursement Time Interval

05 October 1994 30 September 2000 (est.) 6 years and 1 month

Effective Date Original Closing Date Time Interval

12 August 1994 30 June 1999 5 years and 9 months
 iii

b. Amount ($)

Original Latest Amount Undisbursed

Component Category Allocation Allocation Disbur$ed Loa" Bala"ce

Civil Works 0301 167,315,067 168,302,975 191,353,844 -23,050.869

Consulting 2101 9,193,703 10,367,758 10,366,021 -1,123,896
Services
Service Charge 6901 5,272,543 0 5,272,543 0
Unallocated 9301 27,621,610 0 0 26,390,105
Totala 209,402,922 209,207,747 206,992,408 2,215,339

a Disbursements as of 22 November 2000.

Local Costs (ADS-Financed)

Amount ($ million) = 17.11
Percentage of Local Costs - 9.9
Percentage of Total Costs 2.3

c. Project Data ($ million

1. Project Cost

Appraisal

Civil Works 517.35 555.07

Consulting Services 27.00 29.70
Others 52.50 60.49
Contingencies 99.15 108.47
Total Cost 696.00 753.73

2. Financing Plan

Appraisal
Actual

ADB 200.00 206.99

World Bank 200.00 199.11
OECF 200.00 200.00
The 96.00 147.63

ADS = Asian Development Bank, OECF = Overseas Economic Cooperation Fund.

 iv

3. Cost Breakdown by Project Component ($ million)

Appraisal Estimate Actual

FX LC Total FX LC Total

ADB
1. Civil Works 159.52 25.83 185.35 175.43 15.92 191.35
2. Consulting Services 8.15 1.27 9.42 9.15 1.19 10.34
3. Service Charge 5.23 5.23 5.30 5.30
Subtotal (A) 172.90 27.10 200.00 189.88 17.11 206.99
World Bank
1. Civil Works 190.30 189.10
2. Consulting Services 9.70 10.01
Subtotal (B) 200.00 199.11
OECF
1. Civil Works 190.30 190.30
2. Consulting Services 9.70 9.70

Subtotal (C) 200.00 200.00

. FX = foreign currency, LC = local currency.

4. Project Schedule

Appraisal
Estimate Actual

Civil Works Contracts

- Date of Award Feb 1994 14 May 1994
- Completion of Work June 1998 20 June 1998

D. Data on Bank Missions

No. of No. of Specialization
Name of Mission Date Persons Persondays of Membersa
Fact-Finding 14-26 June 1988 6 13 a,c,d,e
Inception 23-25 August 1988 2 3 a,c
Supplementary Study 21-25 October 1988 2 5 a,c .'

Follow-up Fact-Finding 27-31 March 1989 3 5 a,c,e

Review 9-16 November 1989 5 7 a,c,e
Review 10-12 December 1989 4 3 a,c,e
Review 14-17 May 1990 5 4 a,c,d,e
Fact-Finding and Pre- 30 July-1"7August 1990 6 19 a,b,c,d,e
Appraisal
Consultation 6-10 September 1990 2 5 a,e
Cofinanciers' Meeting 27-29 April 1992 1 3 a
Cofinanciers' Meeting 5-7 August 1992 2 3 a,e

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Cofinanciers' Meeting 18-19 August 1992 1 2 a

Appraisal 6-20 September 1993 7 14 a,b,c,d,f,h
Loan Negotiations (WB) 29 November 1993 1 1 a
Loan Negotiations (ADB) 12-13 January 1994 3 2 a,b,e
Project Launch Workshop 16-19 April 1994 3 4 a,b,d
First Milestone Meeting 24-26 January 1995 1 3 a
Review 08-14 March 1995 1 7 a
Cofinanciers' Meeting 11-14 March 1995 1 4 a
Second Milestone Meeting 27-29 April 1995 1 3 a
Third Milestone Meeting 20-22 June 1995 1 3 a
Cofinanciers' Meeting 28 June 1995 2 1 a
Cofinancers' Meeting 22 August 1995 2 1 a
Fourth Milestone Meeting
and Cofinanciers' Meeting 5-9 October 1995 1 5 a
Fifth Milestone Meeting
and Cofinancers' Meeting 24-25 March 1996 2 2 a, C
Sixth Milestone Meeting 10-12 July 1996 3 3 a,c
Seventh Milestone Meeting 8-10 December 1996 6 3 a,c,h
Review 30 Nov - 5 Dec 1996 1 6 a
Midterm Review 3-10 March 1997 3 7 a,c,h
Eighth Milestone Meeting 7-9 October 1997 4 3 a,h
Ninth Milestone Meeting 22-24 March 1998 1 3 a
Inauguration 28 June 1998 2 1 a,c
PCR Mission 3-11 May 2000 3 9 a,9

ADB = Asian Development Bank, PCR = Project Completion Report, WB = World Bank.

a a = engineer, b = counsel, c = economist, d = procurement specialist/consultant, e = programs officer, f = control officer,

9 = project assistant, h = social development specialist.
 .

.
 I. PROJECT DESCRIPTION

1. The Jamuna River, which is one of the world's largest rivers, physically divides
Bangladesh into two halves, the east and the west. The eastern half of the country is more
developed than the western half, partly because of its access to the capital Dhaka and to
international markets through Chittagong port. The western half, which has fertile agricultural
land with higher average yields for major crops than the rest of the country, is dependent on
agriculture as the dominant sector of the economy. A higher proportion of poor people live in
the western half; particularly in northwestern of Bangladesh, which has a population of about
30 million.

2. Until the project bridge was constructed,the Jamuna River was crossab/emainly by
ferries and to a lesser extent by launchesand manuallyoperatedboats. The ferries for road
and railwaytransportwere both grossly inadequatein terms of capacityand service levels.
The use of outdated, costly, and unreliableferry serviceshad led to frequent and extensive
delays at ferry crossings, resulting in high transport costs for passenger and freight
movements.1These problems were compoundedby increased risk during the monsoon
periodfrom May to October.Becauseof these limitationsand prevailingtransportconstraints,
the economic potential of the areas on both sides of the Jamuna River had not been fully
utilized.The absenceof a permanentJamunaRivercrossinghad constrainedeconomicand
social development in Bangladesh,particularlyon the western side, and had exacerbated
regional disparities.Although the Governmenthad for sometimeaccordeda high priority to
establishinga permanentcrossing,it had not built a bridge, mainly becauseof its high cost,
related to the width of the river, its flow volume,depth, uncertaintyof its course, and other
technicalissues.

3. The main objective of the Project was to connect the eastern and western halves of
the country, separated by the Jamuna River, and thus help stimulate economic growth by
facilitating the transport of passengers and freight and the transmission of electricity, natural
gas, and telecommunications across the Jamuna River more economically and efficiently. In
addition, the Project was to establish a railway connection between the east and the west in a
cost-effective manner.

4. Because of its expected major developmentimpact, the Project was accorded high
priority by the Governmentof Bangladesh.The Projectwas also consistentwith the Asian
DevelopmentBank's (ADB's) Country OperationalStrategyand transport sector strategy. It
providedessentialinfrastructureand emphasizedthe strong links betweenpoverty reduction,
good governance,and privatesectordevelopment.Due to the large size, complexity,and the
large funding requirementsfor the Project,the Governmentsought assistancefrom ADB,
OverseasEconomicCooperationFund (OECF)2,and World Bank.

5. The Project envisaged the construction of a bridge over the Jamuna River, about 7
kilometers (km) south of Sirajganj, with provision for road lanes, and capable of supporting an
electric power interconnector, telecommunications cables, a gas pipeline, and a meter gauge
railway. The Project comprised

(i) construction of a bridge 4.8 km long and 18.5 meter (m) wide to carry initially
four road lanes with sidewalks and capable of supporting an electric
interconnector, a gas pipeline, telecommunication facilities, and a meter gauge
railway;

1 At times, 600 freight wagons waited up to 30 days at the railway ferry crossing.
2 OECF assistance has since been replaced by that from the Japan Bank for International Cooperation (JBIC).
 2
(ii) construction of two viaducts,3 each about 128 m in length, connecting the
bridge to the approach roads;
(iii) construction of two guide bunds, each about 2.2 km long, and a flood
protection bund on the east bank to regulate the river at the selected site;
(iv) construction of two approach roads, one 16 km long to the east and the other
14 km to the west, with two-lane single carriageways with paved shoulders
and provision for widening to dual carriageway;
(v) measures to mitigate adverse project impacts on the environment;
(vi) implementation of the resettlement action plan for project-affected persons
(PAPs); and
(vii) consulting services for project management, construction supervision and
training of Government staff in the operation and maintenance (O&M) of the
bridge.

6. The Jamuna bridge is the most expensive and technically one of the most challenging
transport infrastructure projects ever attempted in Bangladesh. To implement the Project, the
Government created the Jamuna Bridge Multipurpose Authority (JMBA) in 1985 and
assigned it the responsibility of preparing and implementing the Project (para. 10). As an
integral part of the Project, ADS also financed complementary follow-on investment projects4
to expand the road network on the east side of the Jamuna River and connect the separate
rail networks on either side of the river.

II. EVALUATION OF IMPLEMENTATION

A. Project Components
7. The physical project components were generally implemented as envisaged at
appraisal. The 4.8 km long bridge was constructed with four lanes for vehicles and included a
dual gauge rail track.5 Dual gauge track was selected instead of the envisaged meter gauge
track following indepth analysis under technical assistance (TA)6 provided by ADB. It was
found to be the optimal solution for rail network development, thereby integrating the railway
network in Bangladesh with the dominant broad gauge7 network in India. To protect the
bridge, two guide bunds were constructed as envisaged at appraisal. The two constructed
approach roads were connected with viaducts to the bridge. The bridge was also provided
with an electric power transmission interconnector, a gas pipeline (separately funded), and
telecommunications facilities.

8. The Project required the acquisition of almost 3,000 hectares of land in a country
where land is scarce, affecting about 100,000 people. Due to the large scale and complexity
of the Project, comprehensive social and environmental studies were carried out to mitigate
its adverse environmental and social impacts, leading to the preparation of an environment
management action plan (EMAP) and a revised resettlement action plan (RRAP). This was
the first time that such plans were prepared for a large infrastructure project in Bangladesh.

3 Viaducts, guide bunds, and long approach roads were required because of the braided nature of the Jamuna
River. It has a width of about 4 km in winter and as much as 30 km in summer and a depth difference of as
much as 8 m between low and high water. While continuous shifting of channels takes place in the Jamuna
River, its width and location will change unless forced to stay in channels established through river training
works.
4 Loan 1478-BAN(SF): Jamuna BridgeAccessRoadsProject, for SDR49,856,OOO($72 million), approved on 5
November 1996; and Loan 1561-BAN(SF): Jamuna BridgeRailwayUnk Project,for SDR80,670,OOO($110
million), approved on 2 October 1997.
5 Dual gauge involves the installation of a third rail, allowing both broad and meter gauge operations over the
same set of tracks.
8 TA 2235: FourthRailways,for $594,000, approved on 13 December 1994.
7 Broad gauge has a 1,676 milimeter distance between the rails.
 3
Despite these efforts, a local nongovernment organization (NGO) submitted a complaint to
the World Bank's inspection panel for alleged violations of the World Bank's operational
procedures in the resettlement of PAPs living downstream and on upstream chars (temporary
islands that are formed and submerged by changes in river direction and flow). Subsequent
investigations showed that char PAPs had not been fully provided for in the RRAP. The
Govemment then decided to compensate all those affected by erosion in the project impact
area. In addition, a comprehensive char-specific erosion and flood action plan (EFAP) was
prepared under the Project to supplement the existing EMAP and RRAP (paras. 23-24).

9. The consulting services for project management, construction supervision, and

training of Govemment staff in the O&M of the bridge were implemented as envisaged at
appraisal. Consultants were engaged to supervise the four civil works contracts and an
internationally experienced management consultant was selected to provide project
management support to JMBA in implementing all aspects of the Project. In addition, a panel
of experts (POE) was formed, comprising leading domestic and international experts, to
advise JMBA on all technical matters related to the Project. A chronology of the main events
of project implementation is in Appendix 1.

B. Implementation Arrangements
10. The implementation arrangements followed those envisaged at appraisal. JMBA was
designated as the Executing Agency headed by a secretary to the Government. It was
staffed with senior professionals who worked with the consultants engaged for construction
supervision and project management (para. 19). With the assistance of the consultants,
JMBA established a monitoring system acceptable to ADB. The POE provided expertise
and guidance on a range of technical matters to JMBA. In addition, a committee was
established with representatives from ADB, OECF, and World Bank, which held regular
meetings throughout the implementation of the Project. These implementation arrangements
worked well and the regular meetings facilitated critical discussions, exchange of information,
and decisions on key implementation matters. Appendix 2 shows the organization of JMBA.

11. The need for efficient day-to-day project administration called for the nomination of
one of the Project's three funding agencies as the lead agency. The World Bank was
assigned this role and it appointed one senior engineer who supervised the Project on a
regular basis. ADB was consulted on major issues during the implementation of the Project
and was actively involved in project administration (para. 28).

c. Project Costs and Financing Plan

12. The total project cost at appraisal was estimated at $696 million equivalent, which
was based on actual bid prices obtained under international competitive bidding (1GB). The
estimated foreign exchange cost was $509 million (73 percent) and the estimated local
currency cost was $187 million (27 percent). The estimate included 9.4 percent of the total
base cost of the Project for physical contingencies. It provided for an annual price escalation
of 3.1 percent for foreign exchange costs and 6 percent for local currency costs. The actual
costs estimated by the Project Completion Review Mission (PCRM) were $753.7 million, with
foreign exchange costs of $581.2 million (77 percent of total cost) and local currency costs of
$172.5 million (23 percent of total cost)8. A summary of the project costs estimated at
appraisal and the actual costs is shown in Table 1 (with further details in the Basic Data).
 -
4
Table 1: Summary of Project Cost Estimates at Appraisal and Actual Expenditures
($ million)

Foreign Local Total Local Total

Component Exchange Cost Exchange Cost

A. Base Cost
1. Contract1
Main Bridge 178.97 41.43 220.40 183.70 39.00 222.70
2. Contract 2
River Training 207.20 36.85 244.05 231.61 38.00 269.61
3. Contract 3 & 4
Approach Roads 26.18 26.72 52.90 28.90 33.86 62.76
4. Consulting Services 22.68 4.32 27.00 27.30 2.40 29.70
5. Others 52.50 52.50
25.00 a
35.49 60.49
Subtotal (A) 435.03 161.82 596.85 496.51 148.15 645.26
B. Contingencies
1. Physical 45.33 10.87 56.20
2. Price 28.64 14.31 42.95
Subtotal (B) 73.97 25.18 99.15 84.67 23.80 108.47

13. The actual project cost was close to the cost estimated at appraisal. This was largely
due to the extensive work carried out during the project preparation phase (paras. 37-38),
including advance procurement actions with bids received at appraisal. In addition, JMBA,
with the support of the consultants, POE, and three funding agencies, resolved a number of
complex technical issues, such as the final location of the bridge, the need for extensive river
training, and the risk of the guide bunds being washed away. The PCRM noted the
unresolved contractual claims for which a provision of $25 million was included.

14. The financing arrangements were as envisaged at appraisal. ADS, OECF, and World
Bank each provided a loan of about $200 million equivalent. The Govemment financed the
balance of $147.6 million equivalent, which includes $25 million as allocation for pending
contractual claims and $57.7 million more than expected at appraisal largely because of the
increased costs of the river training and the approach roads.

Project Schedule ~

15. Project implementation was completed in June 1998 as envisaged at appraisal. This
was a major achievement considering the large size and complex nature of the Project and
the difficult environment, including severe hydrological conditions and short working seasons.
A comparison of actual and appraisal implementation schedules is in Appendix 3.

E. Engagement of Consultants and Procurement of Goods and Services

16. The consultants for construction supervision and project management were recruited
in accordance with ADS's Guidelines on the Use of Consultants. For reasons of efficiency
and economy, the design consultants were retained for construction supervision, as provided
for in the ADS guidelines.

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17. The four civil works contracts (for the bridge, river training, and the two approach
roads) were awarded following Ice procedures in accordance with ADB's Guidelines for
Procurement. The thorough project preparation phase, which included extensive technical
and other studies, appropriate bid packaging, and preparation of high-quality bidding
documents, contributed to the timely award of all contracts.

18. JMBA also decided to contract out toll collection and O&M for the bridge, awarding a
five-year contract (1998 to 2002) in 1998. JMBA followed ICB procedures in awarding this
contract. The selection process was not funded under the Project.

F. Performance of Consultants, Contractors, and Suppliers

19. The consultants engaged for both construction supervision and project management
performed satisfactorily. The consultants to supervise construction played a critical role in
coordinating the three civil works contracts, and ensuring appropriate quality in accordance
with specifications and completion of works within the stipulated contractual time period. The
management consultants provided day-to-day support to JMBA in the management of
contractual matters and implementation of the RRAP, EMAP, and EFAP. The POE provided
the requireq technical guidance as well as specific expertise on critical and complex technical
matters.

20. The contractors performed satisfactorily. The bridge as constructed generally met
specified performance requirements. The overall construction quality of all the works was in
line with international standards and superior to similar projects in South Asia. The riding
quality of the approach roads is excellent although that of the bridge itself is not as good
because of the need to reduce the cost and the weight of the bridge. Construction problems
encountered during project implementation included (i) cracks on the bridge deck and its pre-
cast units, (ii) underwater subsoil problems that led to slope failures in the river training
works, (iii) a need to redesign the east guide bund, (iv) delayed handover of the east bridge
end area, and (v) slow progress in embankment construction. However, all these construction
problems were resolved in a cooperative manner with the contractors and the consultants.

G. Conditions and Loan Covenants

21. Loan conditions and covenants were fully complied with (Appendix 4). The PCRM
observed that more covenants targeting institutional development of JMBA would have been
justified to sustain the developmental impact of the Project and JMBA's capacity to handle
large infrastructure projects.

Disbursements

22. As a result of speedy project implementation, disbursements of the loan proceeds

were somewhat quicker than the projections made at appraisal. Details of the annual
disbursements of the loan are in Appendix 5. The original loan closing data was 30 June
1999, which was extended to 30 June 2000. While the Project was substantially completed in
June 1998, the extension was necessary to accommodate, to the extent possible, the
contractual claims for contract number 2 for river training works, which were settled through
arbitration.

Environmental and Social Impacts

23. The Project was expected to have significant environmental and social impacts (para.
8), but the Government successfully implemented major measures to mitigate all adverse
impacts. The EMAP was developed for implementation during the life of the Project. The
identified measures included (i) mitigation of impact during construction, (ii) agricultural
 6
development, (iii) mitigation of adverse impact on fisheries, (iv) wildlife protection, (v) social
afforestation, (vi) water resources management, and (vii) improvements in health and
sanitation. One major environmental issue that arose during construction of the bridge was
the closing of the upstream Dhaleswari river channel. However, another channel was
developed just south of the bridge to offset the impact of the Dhaleswari's closing.

24. To mitigate adverse social impacts of the Project, a comprehensive RRAP and an
EFAP were implemented under the Project. These addressed the social concerns identified
at the project formulation stage and the complaints raised by an NGO with respect to PAPs
on chars (para. 8). It was the first time in Bangladesh that such a broad-based and
comprehensive approach had been followed to mitigate adverse environmental and social
impacts and it became a benchmark for future projects.
:
25. In terms of social impact, the PCRM noted increased market and social activities on
both sides of the bridge. In addition, new commercial and residential developments were
identified along and beyond the approach roads to the bridge. The new bridge had also led to
the introduction of new direct bus services linking northwestern Bangladesh to Dhaka and the
Indian city of Calcutta. These bus links in turn contributed to new food services, local
markets, and the development of new establishments along the highway leading to the
northwestern side of the Jamuna River. The PCRM conducted a small survey (para. 36) on
the social profile of bus passengers and people living near the bridge on both sides of the
Jamuna River. The results from the survey indicate that (i) poor travelers appreciate the new
bus services, which are perceived as more convenient and faster than the old ones; and (ii)
local markets have developed on both sides of the bridge. More people and goods move
across the Jamuna River now than before the bridge was in place.

J. Performance of the Borrower and the Executing Agency

26. The performance of the Government was highly satisfactory. On-lending the loan
proceeds to JMBA and assigning JMBA the status of a Government department contributed
to the good performance of both the Government and JMBA. The Government adopted a
flexible approach, waiving some laws and regulations, and took a proactive approach in
raising funds for the Project. In 1986, the Government introduced the Jamuna Bridge
Surcharge and Levy Ordinance to fund project preparation and the subsequent construction.
As part of project preparation efforts, in 1986 JMBA conducted a feasibility study with
financing from the United Nations Development Programme (UNDP), followed by further
technical and economic feasibility studies and subsequent recommendations on appropriate
technical and engineering configurations. With the support of the three funding agencies, the
Government ensured full implementation readiness by the time the loan became effective
and supported advance actions for procurement and other preparatory work.

27. JMBA's performance was satisfactory. JMBA willingly accepted responsibility for ,
project implementation. JMBA played a key role in project preparation and implementation,
providing the necessary focus and continuity within the Government. As the focal point, it
also gave confidence to the three funding agencies to implement the Project. Staff turnover at
JMBA was reasonable considering the usual high turnover of staff in Government offices.
However, while JMBA was reasonably staffed, it had to rely on loan-financed TA to
implement the RRAP, EMAP, and EFAP, and to handle contractual issues and disputes.
Thus, the planned transfer of knowledge and skills did not occur fully because of the focus by
the consultants on project implementation rather than training. Although the Project was
completed largely on schedule in June 1998, there were still some contractual claims
pending. This is not unusual given the complexity of the Project and the Government has
taken actions to resolve these claims.

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Performance of the Asian Development Bank

28. ADB actively monitored the implementation of the Project. ADB staff followed a
proactive approach. From 1994 to 1998, ADB fielded 4 review, 13 special loan
administration, and 2 special consultation missions. ADB also took active part in a joint ADB-
World Bank midterm review mission in March 1997. ADB pursued several important project
issues, including the provision of dual gauge rail track on the bridge, and paid due attention
to social development issues.

III. EVALUATION OF INITIAL PERFORMANCE AND BENEFITS

Financial Analysis

29. At appraisal, it was agreed that the Government would pursue a policy of cost
recovery for the project, setting tolls that would not discourage bridge users.9 Based on a
study on the structure and level of tolls, completed in mid-June 1997, the Government set
tolls that were higher than envisaged at appraisal and more than sufficient to meet future
debt-service obligations.1OSo far the revenues being generated from the bridge are in line
with the toll study. The PCRM observed that the tolls had not had a negatively impact on
traffic, which was higher than estimated at appraisal and should be able to generate an
adequate level of revenue to cover operations and maintenance and debt servicing costs and
have a surplus to create a reserve fund for emergency repairs for the bridge. A summary of
the projected cash flow for the next 35 year-period is provided in Appendix 6.

B. Economic Performance

30. The PCRM recalculated the economic internal rate of return (EIRR) following the
same methodology that was used at appraisal.11The estimated EIRR was 16.8 percent,
which is higher than the appraisal estimate of 14.5 percent, confirming the positive effects of
the higher-than-estimated traffic on the bridge despite the higher tolls set by the Government.
While this confirms the economic viability of the Project, it is also an important achievement
in light of the controversy on this matter at the early stage of project formulation, which led
to extensive economic analysis. An additional $25 million has been added as the projected
cost increase based on an assessment of the outstanding claims. The economic benefits are
expected to increase further when ADB-financed road and rail links (footnote 4) to the bridge
are completed in 2002, and when impediments to cross-border road and rail traffic between
India and Bangladesh are reduced and eventually removed. A summary of the results of the
economic reevaluation is in Appendix 7.

31. The Project was generally implemented as envisaged at appraisal, achieving all its
major physical and non-physical objectives. Substantial development impact is expected with
the Project, providing improved connection is established to the Northwest of Bangladesh
with over 30 million people, most of whom are poor. The PCRM noted that the Project is
already generating increased economic development through reduced transport cost and
improved access. Market developments were observed both on the east side of the Jamuna
River toward Dhaka, and on the west side, near the bridge site and along the access road to

9 No financial internal rate of return was calculated at appraisal, reflecting the focus on economic benefits rather
than financial returns, and because toll rates were to be determined during project implementation.
10 During initial operations from July 1998 to March 2000, actual toll revenue was Tk1, 063 billion which is higher
than the Tk1,037 billion estimated at appraisal. The one-way total toll rates are: trucks, Tk1,OOO ($19.7); buses,
Tk800 ($15.7); light vehicles, Tk400 ($79). In comparison the ferry rates in 1998 were: truck, Tk700; buses,
Tk700; light vehicles, Tk270.
11 The recalculated EIRR followed the same methodology and led to the same results as in a similar
project completion report prepared by the World Bank.
 8
the bridge. The positive impact of the Project is evidenced in the higher-than-expected use of
the bridge during the initial operations from June 1998 to December 1999. As observed, the
bridge had 41 percent more traffic during the initial operations compared to the appraisal
estimate. This is despite the relatively high tolls adopted by the Government to maximize
financial return rather than economic benefits.

C. Attainment of Benefits

32. The Project achieved its objectives on time and largely within budget. The most
important objective met by the Project was to connect the eastern and western halves of
Bangladesh to foster economic development. Traffic on the project bridge is higher than
anticipated, indicating the attainment of benefits beyond the expectation at the time of project
appraisal. The Project was generally implemented as envisaged at appraisal.
:
33. The Project is having a substantial development impact by providing improved
connections to northwestern Bangladesh, with its more than 30 million people, most of them
poor. The PCRM noted that the Project is already promoting economic development by
reducing transport costs and improving market access. The positive impact of the Project is
evident from the higher-than-expected use of the bridge from June 1998 to December 1999.

34. With the completion of ongoing ADB-financed road and rail links (footnote 4) to the
bridge in 2002, and the expected improvement in border arrangements between Bangladesh
and India, the bridge will fulfill its role as a critical transport link on the still incomplete Trans-
Asian Highway and the Trans-Asian Railway. This will facilitate trade between Bangladesh,
Bhutan, India, and Nepal and promote Indian transit traffic through Bangladesh.

35. With continued economic growth in Bangladesh and growing subregional cooperation,
cross-Jamuna traffic is expected to increase further, bringing economic benefits and make
subregional cooperation easier and more attractive. The Project will strengthen trade
opportunities and support the development of improved transport networks for the efficient
flows of services and goods, including improved access to the northwestern region of
Bangladesh.

36. The small survey conducted by the PCRM confirmed increased travel and perceived
benefits for the poorer groups of people traveling by bus and living on both sides of the
bridge. Some of these perceived benefits are improved services, greater access, and
reduced travel times. The PCRM also noted increased commercial activities along and near
the access roads to the bridge on both sides of the river. These include new restaurants, food
stalls, shops, car service centers, and gas stations.

IV. CONCLU SIONS AND RECOMMENDATIONS

,

A. Conclusions

37. The Project has been satisfactorily implemented and is rated highly successful. The
main objective of the Project has been met, connecting the eastern and western parts of the
country, separated by the Jamuna River, through a fixed link. The Project will stimulate
economic growth by facilitating the transport of passengers and freight and the transmission
of electricity, natural gas, and telecommunications across the Jamuna River more
economically and efficiently. In addition, a dual gauge rail track has been provided on the
bridge in a cost-effective manner. Without the Project, Bangladesh would have continued its
ferry operations with high O&M costs and loss of lives due to frequent floods and overloaded
boats. In addition, 30 million people living in the northwestern part of Bangladesh would not
have enjoyed easy access to the eastern side of Bangladesh. There would also had been

~
 9
less passenger and freight traffic across the Jamuna River resulting in lower induced
benefits. Given the large size and complexity of the Project, involving three funding agencies,
the project performance demonstrates the importance of preparatory work. For the Project,
this included project planning, design, procurement, early attention to environmental and
social measures, detailed implementation arrangements, and a strong Government
commitment demonstrated by advance actions. The Project also shows the general capability
of the Government to implement large and complex projects with many stakeholders, given
the strong support of the three project financiers.

B. Lessons Learned

38. The good project implementation performance confirms that ADB, to the extent
possible, should insist on commitments, advance approvals, and actions by the Government
before loan negotiations. Project preparatory and advance actions were crucial for speedy
implementation of the Project. It is also critical to have a capable executing agency with
strong project management skills supported by good consultants for the successful
implementation of large and complex projects of this nature. Proactive ADB involvement with
frequent missions is necessary to resolve implementation issues, that may arise during
project implementation. To maximize and sustain development impact, more attention and
resources should be invested in the capacity building and institutional development of the
executing agency.

39. The major factors that contributed to the successful implementation of the Project
were
(i) good quality at entry with sufficient preparatory work (advance actions for
design, prequalification of contractors, procurement of civil works, recruitment
of consultants, and Government approvals);
(ii) clear development objectives with well-defined project components;
(iii) the Government's strong sense of ownership and commitment to the Project
and its provision of adequate counterpart funding and resources;
(iv) good partnerships and clear roles among the Project's three funding agencies;
(v) good implementation arrangements and an executing agency which was
strengthened with consultants' inputs;
(vi) strong supervision and project management with adequate resources (ADB,
OECF, World Bank, the Government, and consultants);
(vii) early identification of social and environmental measures, preparation of
suitable project components, albeit slightly delayed; and
(viii) engagement of NGOs in implementing the RRAP, EMAP, and EFAP.

C. Recommendations

1. Project-related

40. During project preparation, a participatory approach should be adopted involving all
stakeholders. Preparation of environmental and social mitigating measures should be given
high priority and be part of the project.

41. To expand the Project's development impact and ensure medium-term sustainability,
further ADB involvement in the transport sector is warranted, subject to a strong continued
commitment to reforms by the Government.

42. The preparation of a project performance audit report should await the completion
and the initial operation of ADB-financed road and railway links (footnote 4); it could be
prepared in 2003.
 10
2. General

43. To expedite the implementation of projects, ADS should insist that the Government
establish project implementation arrangements before loan negotiations. Projects should be
designed with sufficient attention and resources for project preparation to ensure the project
preparedness. A single project management and coordination unit and a monthly progress
monitoring system should be established.

44. Projects of a similar nature should be designed with a separate component for the
capacity building of the executing agency with sufficient training and institutional
development, including social and environmental aspects.
:
45. Project design should further address expected impacts on poverty and contain a
methodology and procedure for collecting and analyzing data required for the evaluation of
such impacts and benefits, particularly on the poor. As part of this work, interviews, surveys,
and other types of activities should be included.

~
 11

APPENDIXES

1 Chronologyof Main Events 12 3,9

2 JMBA Organization and Project Supervision

Arrangements 17 3,10

3 Implementation Schedules 18 4,15

4 Status of Compliance with Loan Covenants 19 5,21

5 Disbursement Schedule 21 5,22

6 Cash Flow Projection for the Jamuna Bridge 22 7,29

7 Economic Reevaluation 23 7,30

 12 Appendix 1, page 1

CHRONOLOGY OF MAIN EVENTS

Loan 1298-BAN(SF): Jamuna Bridge Project

DATE MAIN EVENTS

14-26 June 1988 Reconnaissance Mission.

23-25 August Inception Mission.
28 September Draft prequalification report received.
15 October General procurement notice published in Development
Business.
06 October Advance procurement action approved.
..
21 October Supplementary Mission fielded.
31 October Specific notice published in Development Business.

29 January 1989 Draft tender documents received by the Asian Development

Bank (ADB) for Contract 1 - bridge and approach viaduct;
contract 2 - river training works and reclamation; contract 3 -
east road approach and contract 4 - west road approach
received.
30 January Draft bidding documents for contract I submitted for review to
ADB.
15 February Draft design report for river training works - vol. II submitted for
review to ADB.
3 March Environmental impact assessment report and draft final
feasibility report, phase II study, received by ADB.
27-31 March Follow-up Fact Finding Mission fielded.
28 April Prequalification evaluation report for the four contracts received
and reviewed by ADB.
10May Procurement committee meeting approved the prequalification
of civil works contracts.
29 August The final feasibility study report recommended the construction
of a road-cum-rail bridge including a east-west power
interconnector.
9-16 November Review Mission fielded.
7 November Draft Letter of Invitation to Project Management and
Construction Supervision Consultant received.
10-12 December Review Mission fielded.

31 January 1990 Notice to proceed with the final design.

Draft terms of reference and letters of invitation for construction
.
1 March
supervision firm and management consultants received.
13 March List of prequalified contractors for Contracts 1, 2, 3, and 4
received by ADB. -
14-17 May Cofinanciers' meeting in Washington, DC to discuss costing and
implementation arrangements. It was also agreed that
RPT/Nedeco/BCL would be retained as consultants for technical
supervision of the Project.
14 May Submission of final design reports and tender documents for
Contract 3: East Road Approach.
18May Submission of final design reports and tender documents for
Contracts 1, 2, 3, and 4.

~
 13 Appendix 1, page 2

22 May Shortlistedfirms for the management consultants received by

ADB.
19 July Draft letter of invitation and terms of reference for construction
supervision and project management consultants received by
ADB.
19 July Strategy Report on the Resettlement Study completed.
30 July-17 August Fact-Finding/Pre-Appraisal Mission fielded.
31 July Advance action on the recruitment of consultants and
retroactive financing approved by ADB Management.
31 August Consultants' selection committee meeting approved the shortlist
and draft invitation documents for the construction supervision
and project management consultants.
6-10 September ADB held discussions with the World Bank on the rail link on the
bridge.
11 December ADB approved the list of prequalified contractors for Contracts
1, 2, 3, and 4.

06 February 1992 ADB and the World Bank approved a new re-prequalification for
contractors.
26 February Draft prequalification of contractors received by ADB.
16 March General Procurement Notice as well as the Specific Notice
published in the Development Business for the re-
prequalification of contractors.
27-29 April Cofinanciers' meeting in held in Washington, DC.
30 June Bid opening for Contracts 1 and 2.
26 July Executing Agency approved the prequalification shortlists and
evaluation prepared by consultants for the four civil works
contracts.
30 July ADB received the report on evaluation of renewed
prequalification for Contracts 1-4.
5-7 August Cofinanciers' Meeting in held in Washington DC.
18-19 August Cofinanciers' Meeting held in Tokyo.
28 August ADB Board Paper on Advance Procurement Action and
Flexibility in Tender Documents to Permit Joint Financing with
World Bank.
3 September Management review meeting.
6 -20 September Appraisal Mission fielded.
13 September ADB Management approved circulation of summary
environmental impact assessment (SEIA).
15 September ADB received tender documents for Contracts 1, 2, 3 and 4.
13-15 October Pre-bid conference for Contracts 1, 2, 3, and 4.
29 November Loan negotiations between the World Bank and the
Government.

7 January 1994 Loan and technical assistance coordination committee meeting.

12-13 January Loan negotiations held in Dhaka.
28 February Procurement committee meeting approved award of contracts 1
- Hyundai Engineering and Construction Co. JV Korea, 2 -
Ham-VOA Joint Venture The Netherlands, 3 - Samwhan Corp,
and 4 - Samwhan Corp.
8 March Loan approval.
 14 Appendix 1, page 3

18 March Loan signing.

16-19 April Project launch workshop held in Dhaka.
10May ADB approved direct negotiations with construction supervision
consultants, RPT-Nedeco-BCL.
10 August Appointment of management consultants, finalized and signed.
12 August Loan declared effective.
18-29 September Joint supervision mission held in Dhaka.
21 December Cofinanciers' monitoring committee meeting held in Dhaka.

24-26 January 1995 First Milestone Meeting held in San Francisco, USA.
7 March Retroactive financing from $20.0 million to $31.5 million
approved by ADB.
11-14 March Cofinanciers' monitoring committee meeting held in Dhaka.
15 April ADB received a copy of the position paper on the Fisheries
Mitigation Plan.
19 April Cofinancier's Monitoring Committee Meeting held in Dhaka.
24 April ADB received a copy of the terms of reference for Fisheries
Mitigation Plan - Fish Culture Development, from World Bank.
27-29 April Second Milestone Meeting held in Nijmegen, Netherlands.
5-25 May World Bank Resettlement Mission.
20-22 June Third Milestone Meeting held in Washington DC, USA.
21 June ADB received a copy of Jamuna Multipurpose Bridge Project
(Land Acquisition) Ordinance of 1995, which was approved by
the Government of Bangladesh.
31 July World Bank Environmental Management Action Plan (EMAP)
Mission.
22 August Cofinanciers' monitoring committee meeting held in Dhaka.
5-9 October Fourth Milestone Meeting and Cofinanciers Review Mission
meeting held in Dhaka.
30 December Signing of the contract for Plantation and Social Afforestation
(Group 1- Plantation along Flood Embankment, East Side), a
subcomponent of Environment Managemnt Action Plan.

03 January 1996 ADS had no objection to the constitution of an independent

review panel (IRP) and sharing the funding with Overseas
Economic Cooperation Fund (OECF).
15 January Polli Unnayon Andolon (ROM) was awarded contract as
nongovernment organization (NGO) for the implementation of
the Revised Resettlement Action Plan (RRAP).
.
16 January Signing of Minutes of Understanding (MOU) between Jamuna
Multipurpose Bridge Authority (JMBA) and Department of
Fisheries (DOF) for the fisheries survey and monitoring of
EMAP.
24-25 March Fifth Milestone Meeting held in Bangkok.
15May ADB approved processing of a small-scale technical assistance
(SSTA) project in the amount of $50,000 to finance a midterm
review to be carried out by an independent panel of experts
(more particularly on the EMAP and RRAP components), the
cost of which was to be equally shared by the cofinanciers of
the Project.

~
 15 Appendix 1, page 4

6 June Amended terms of reference of the IRP presented by the World

Bank to be funded by ADB, OECF, and World Bank.
10-23 June World Bank Resettlement Mission fielded to supervise the
implementation of the RRAP.
8-14 July Review Mission fielded.
10-12 July Sixth Milestone Meeting held at the bridge site.
16-26 August IRP for EMAP and RRAP's mission set up.
15 September ADB received a copy of Guidelines for Compensating Erosion
and Flood Affected Persons (EFAP).
20 September ADB received the final draft of Management Response to
Inspection Panel.
15 October ADB received the draft final report of the IRP on EMAP and
RRAP.
30 Nov-5 Dec Review Mission fielded.
8-10 December Seventh Milestone Meeting held at the Project Site.

24 February 1997 Final report of the IRP received by the ADB.

03-10 March Midterm Review fielded.
8 March Workshop for the implementation of RRAP and Erosion and
Flood Affected Persons Policy (EFAP).
13 March ADB received the procurement notice for the operation and
maintenance (O&M) and tolling contracts.
2 April ADB approved the extension of the management consultant's
environmental advisor from 30 June 1997 to the end of the
project.
8 April Specific Notice for publication in the Development Business and
ADB Business Opportunities (ADBBO) for O&M and tolling
contracts approved by ADB.
16 April ADB approved a change in the loan financing percentage for
the civil works contract from 30.10 to 26.21 percent (foreign
currency) and reduction of the local currency financing to zero
effective 30 April 1997.
15 July Draft final report on Jamuna Bridge Project, Meter Gauge and
Broad Gauge Loading received by ADB to determine whether
the bridge can accommodate broad gauge operations.
22 June OECF has no objection to the draft prequalification documents
for the O&M.
7-9 October Eighth Milestone Meeting held at Bhuapur Site, Dhaka.
23 October ADB received request for approval of revised contract amount
for contracts 1, 2, 3 and 4 (civil works).
12 November ADB received request for publication of a notice in the ADBBO
and United Nations Development Business for the
Bangabandhu Bridge Tourism Development Project.
19 December TA 2725-BAN: Jamuna Bridge Train Configurations, for
$100,000, approved by ADB.

22 February 1998 The toll rate was announced effective from the date of
inauguration of the Bangabandhu Bridge.
22-24 March Ninth and last Milestone Meeting was held at the project site.
6 April ADB received a request from the Government on the increase
of ADB financing percentage along with the other cofinanciers
 16 Appendix 1, page 5

from 26.21 to 36.50percentfor all the civil works contracts

effective from the work certified for March 1998.
29 May ADB approved the Borrower's request to increase the loan
financing percentage from 26.21 to 36.50 percent for all civil
works contracts effective from 1 March 1998 (foreign currency
36.50%, local currency cost zero percent).
08 June OECF advised JMBA of some unresolved claims by the
contractors.
23 June Inauguration of the Bangabandhu Bridge.
28 July JMBA advised that negotiated settlement of claims should be
discussed at a mini-milestone meeting.
World Bank advised that cofinanciers are willing to provide
,
4 August
funding for appointment of expert to reach a fair settlement of
claims.
4 August Samwhan Corporation was successful for Contracts 3 and 4 in
an arbitration award dated 10 July 1998 rendered by the Arbitral
Tribunal of International Chamber of Commerce.
12 August JMBA advised that it would not be possible for them to prepare
all position papers by end August 1998.
3 September ADB received Inspection Panel report on the progress of
implementation of EFAP.

02 February 1999 JMBA requested ADB's approval of payments of fees and other
related expenses of the Facilitators and Queen's Counsel
proposed to be appointed to settle the disputed claims under
different contracts of the Project.
09 March ADB received copy of the Agreement for Facilitation Services
for the forthcoming negotiations on settlement of outstanding
financial claims of Contract 1.
27 April ADB approved funding for the facilitator and Queen's Counsel
out of the undisbursed portion of the loan.
Ministry of Finance requested for an extension of loan closing
31 May
dated from 30 June 1999 to 30 June 2000.
ADB approved the request for extension of loan closing date
23 July
from 30 June 1999 to 30 June 2000.

3-11 May 2000 Project Completion Review Mission

~
 Appendix 2
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 19 Appendix 4, page 1

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Covenant Status of Compliance

Covenant related to effectiveness

of the Loan Agreement:

1. The Governmentwill ensure the effectivenessof IDA and Complied with. The loan became
OECF loan agreements. To accomplishthese (i) a subsidiary effective on 12 August 1994.
agreementfor relendingmust be finalized;(ii) contractsrelating
to construction supervision, project management, and
monitoring of implementationof the RRAP and EAP must be
signed; (iii) substantialprogressmust be made in the purchase
of replacement land for resettlement; and (iv) all necessary
government action required to implementthe RAP and EAP
must be taken.

2. The Government's approval of Project Proformasfor the

Projectas a whole, includingthe RAP and EAP.

Covenants related to Project

Administration:
3. The Government will ensure that the Project is carried out Complied with.
with due diligence and in conformity with sound administrative,
financial, engineering, environmental, and road construction
practices.

4. Make available funds, facilities, services, land, and other Complied with.
resources required in addition to loan proceeds.

5. Maintain records and accounts adequate to identify the Complied with.

goods and services and other items of expenditure financed
from the loan proceeds.

6. JMBA will maintain separate accounts for the Project that Complied with. Audited Financial
will have to be audited annually in accordance with sound Statement for FY99 submitted
auditing standards by independent auditors acceptable to ADB on 11 May 2000.
and should be furnished to ADB six months after the close of
the fiscal year all in the English language.

7. Within one year of loan effectiveness, the Government will Complied with. Bridge Manage-
take necessary action for the enactment of legislation to ment contractor appointed.
empower JMBA to operate and maintain the bridge, implement
the Bridge End Facilities Land Use Plan and collect tolls.

8. The Borrower will provide adequate initial working capital to Complied with.
enable JMBA effectively to assume the operation and
maintenance of the Jamuna Bridge upon its completion.
 ~

20 Appendix 4, page 2

9. Within one year of loan effectiveness, JMBA will control Complied with.
and monitor construction activities and other land uses in the
vicinity of the Bridge that might interfere with its construction,
operation and maintenance and ensure safety of persons
employed in the Project or using the project facilities.

10. Open and maintain in a commercial bank a bridge Complied with. Fund established
emergency fund of at least $10 million equivalent and in in 1995.
consultation with ADB replenish the said fund as and when
required to meet the required expenditures.

11. Carry out midterm review of the Project. Complied with. Midterm Review
Mission carried out on 3-9 March
1997.

12. Implement and monitor resettlement rehabilitation in Complied with.

accordance with the Resettlement Action Plan including
establishment and operation of a management information
system.

13. Implement and monitor the Environmental Action Plan Complied with.
Jncluding implementation of mitigation measures for the effects
and closure of the northern intake of the Dhalashwari river.

14. Maintain with responsible insurers for insurance of the Instead of insuring the facilities
project facilities to such extent and against such risks and in an an emergency fund has been
amount consistent with sound practice. created out of the tolls collected
from the bridge.

15. Take all necessary action required for preparing the Complied with.
project proformas including the implementation of the RRAP
and EMAP.

~
 21 Appendix 5

DISBURSEMENT SCHEDULE
(Projected and Actual)

~ Projected Actual

1994 10.580 25.643

1995 58.700 78.905
1996 110.500 132.533
1997 155.680 179.373
1998 178.890 198.850
1999 200.000 201.870
2000 206.992
 22

Appendix 6

CASH FLOW PROJECTION FOR THE JAM UNA BRIDGE

(Tk million)

Total Return
Year Total Costs Revenue Net Income (%) Cost Cover
1998 535.5 539 3.7 0.7 1.01
1999 389.8 632 242.0 38.3 1.62
2000 395.3 768 372.7 48.5 1.94
2001 481.7 836 354.4 42.4 1.74
2002 607.9 906 297.9 32.9 1.49 I

2003 731.6 1,069 337.8 31.6 1.46

2004 1,103.1 1,153 50.3 4.4 1.05
2005 1,333.8 1,244 (90.3) (7.3) 0.93
2006 1,368.0 1,314 (54.2) (4.1) 0.96
2007 1,463.9 1,390 (73.5) (5.3) 0.95
2008 1,348.4 1,611 262.4 16.3 1.19
2009 1,306.1 1,707 400.6 23.5 1.31
2010 1,323.3 1,807 484.0 26.8 1.37
2011 1,427.2 1,914 487.1 25.4 1.34
2012 1,574.0 2,029 454.9 22.4 1.29
2013 1,558.5 2,356 797.7 33.9 1.51
2014 1,701.8 2,498 796.0 31.9 1.47
2015 1,913.7 2,647 733.3 27.7 1.38
2016 2,020.2 2,807 786.9 28.0 1.39
2017 2,131.8 2,977 845.1 28.4 1.40
2018 2,058.8 3,464 1,404.7 40.6 1.68
2019 1,979.3 3,674 1,694.2 46.1 1.86
2020 2,006.5 3,897 1,890.1 48.5 1.94
2021 2,127.4 4,133 2,006.0 48.5 1.94
2022 2,294.9 4,384 2,089.2 47.4 1.91
2023 2,231.2 5,109 2,877.4 56.3 2.29
2024 1,893.9 5,420 3,526.6 65.1 2.86
2025 1,606.9 5,749 4,142.4 72.1 3.58
2026 1,650.9 6,046 4,395.3 72.7 3.66
2027 1,767.0 6,356 4,589.1 72.2 3.60
2028 1,682.7 7,346 5,662.9 77.1 4.37
2029 1,591.3 7,720 6,128.6 79.4 4.85
2030 1,615.8 8,118 6,502.0 80.1 5.02
2031 1,742.3 8,476 6,733.8 79.4 4.86
2032 1,920.0 8,974 7,053.7 78.6 4.67
2033 1,645.7 9.436 7,789.8 82.6 5.73

Additional details:

Total Costs: Operation & maintenance plus debt service (principal plus interest).
Total Revenue: Road tolls plus other revenue streams.
Net Income: Total revenue minus total costs.
Return: Net income over total revenue.
Cost Cover: Total revenue over total costs.
Assumptions: Taka depreciates by about 2 percent a year against the US dollar; toll revenues are increased
by about 10 percent every 5 years; and nontoll rates are as per negotiated rates.

Source: Mission estimates.

~
 23 Appendix 7 page 1
f

ECONOMIC REEVALUATION

General

1. The methodology of the economic reevaluation was similar to that used at

appraisal. The Project Completion Review Mission (PCRM) used the latest project data
available.1The actual project implementation period followed the estimated one at
appraisal.

B. Economic Costs

2. The capital costs were expressed in 1993 prices. All transfer items, such as local
taxes and import duties, have been excluded. Price contingency provisions and interest
and other charges during construction have also been excluded.

3. There is still some uncertainty regarding the final capital cost of the Project
becauseof the large amountof outstandingclaimsfrom the four major civil works
contractors. To determine a reasonable estimate of the final cost of the Project, the
reevaluation assumed an additional amount of $25 million equivalent for additional
contractual claims. With this assumption, the financial cost of the Project reaches $754
million.

4. The local currency cost was converted to economic cost by applying a standard
conversion factor of 0.89, as at appraisal, and the foreign exchange financial costs were
converted to economic costs by using border prices. After adjusting the financial costs
into economic costs, the final economic cost of the Project was estimated at $660
million, a 5.3 percent increase over the $627 million estimated at appraisal.

5. To reflect the increase in capital costs, the operation and maintenance (O&M)
costs of the bridge and river training works were adjusted proportionally to the increase
in capital costs and the expected increase in O&M requirements from the O&M contract.
Thus, the resulting annual average O&M costs have been increased by 41 percent to
$3.8 million, compared with the figures used at appraisal.

c. Economic Benefits

6. Actual traffic data was obtained from the JMBA as well as from the Aricha-
Nagabari Ferry crossing from the Bangladesh Inland Water Transport Corporation for
the period June 1998 to December 1999. From the actual bridge-crossing traffic data,
actual annualized average daily traffic (AADT) volumes were calculated using the same
methodology applied at appraisal. The traffic data was also related to traffic growth rates
from 1993 to 1997. These results are summarized in Table A7.1.

1 The data used by the PCRM was the same as used by World Bank staff when preparing a similar project
completion report.
 24 Appendix 7 page 2
I

Table A7o1: Summary- of Traffic Development

°Li9ht Total-

Appraisal Estimates Trucks Buses Vehicles Vehicles

--000_'_-
AADT in openingyear (1998) 1,093 340 196 1,629
Annual Growth rate (1993-1997) 6.6 % 6.6 % 8.2 % 7.5 %
Actual at Project Completion
AADT in openingyear (1998) 920 799 575 2,294
AnnualGrowthrate (1993-1997) 3.6 % 24.1 % 32.7 % 18.1 %
Change in AADT (16 %) 135 % 193 % 41 %
.. - - - .. ~. 'v

AADT = annual average daily traffic.

Source: World Bank estimates

7. The PCRM confirmed that the actual traffic volume at project completion was
substantially higher than the estimate at appraisal despite somewhat lower truck traffic.
In addition, the actual growth rate of truck traffic during 1993 to 1998 was lower than the
appraisal estimates. The higher-than-expected traffic volumes of light traffic may be
explained by (i) conservative estimates at appraisal of induced traffic, (ii) the relatively
low toll for buses compared with the ferry tariff, (iii) more recreational visits to the bridge
during the first year, (iv) time savings for passengers, and (v) reduced rates for
crossings. The lower-than-expected truck traffic could be explained by (i) the relatively
high toll level on trucks (Tk1,OOOper truck [one-way]) per bridge crossing as compared
to Tk700 per ferry crossing), (ii) various incentive schemes to attract drivers to the ferry
crossing, (iii) the reduced waiting time for truck traffic at the ferry crossing as a result of
the large traffic diversion to the Jamuna Bridge, and (iv) the ongoing improvement of the
Tangail-Dhaka road which is scheduled for completion in 2002.

8. The actual growth rates between 1993 and 1998 have been adopted as the
growth rates up to mid-1998 in the revised economic analysis. Keeping in mind the
conservative assumptions made at appraisal, the traffic forecast for 1998-2025 has
remained the same as at appraisal at 5 percent. After 2025, traffic benefits were
assumed constant, as was done at appraisal. As a result of the revised traffic volumes,
the Project's economic internal rate of return (EIRR) was affected. The higher volume of
passenger traffic was offset by the reduction in freight benefits because of lower truck
traffic volumes.

9. At appraisal, benefits were also expected from the power transmission pylons on
the bridge (for about $6 million) compared with a stand-alone power connector (for about
$114 million). The saving was taken at appraisal for the net difference in economic costs
for the power transmission across the river with and without the bridge scenario. This
saving remained unchanged at project completion.

10. A gas pipeline was also fitted to the bridge to convey natural gas from the west to
the east and for potential export. This followed the Government's decision to bring gas
across the Jamuna River using the Jamuna Bridge for producing power on the western
side in Siranganj until gas in commercial quantities is discovered and developed on the
west side. As such, this energy benefit was quantified in terms of savings of consuming
gas at the power plants instead of more costly imported oil as the alternative and
 25 Appendix7 page 3
I

savings in power transmission lines from the power plant in the east to the Siranganj
power plant in the west. The net economic cost savings were estimated at about $20
million from 1998 to 2000. However, since this component was not included in the
original economic analysis, the economic reevaluation of the EIRR was also made
without this benefit.

11. Following a similar methodology adopted at appraisal and using the revised data
discussed above, it was estimated that the EIRR has improved to 16.8 percent (Table
A 7 .2) compared with 14.5 percent estimated at appraisal. The PCRM analyzed changes
in costs and estimated benefits. If the final cost increase (based on an increase of the
final costs resulting from increased acceptance of claims to 50 percent instead of 33
percent), then the EIRR would be reduced from 16.8 to 16.2 percent. Without the gas
pipeline benefit, the EIRR would be 15.3 percent. In the worst case scenario, where
project costs increase by 20 percent and traffic benefits decrease by 20 percent, the
EIRR would fall to 13 percent, but the Project would still remain viable.

D. Nonquantifiable Benefits
12. At appraisal, many substantial potential benefits to Bangladesh were not included
because of the difficulties in quantifying those benefits. The high cost of freight traffic
crossing the Jamuna River had created a physical barrier to trade across the river
incurring heavy losses on both sides of the river. The elimination of this barrier by the
bridge will lead to more efficient flow of services and goods within the country and
stimulate economic development in the northwest of the country, which is relatively
undeveloped and has 30 million people, many of whom are poor. Another benefit will
come from expected increases in subregional traffic (road and railway), including transit
from India through Bangladesh to eastern Indian states, which may reach 2-3 million
tons per year. It is, however, uncertain when transit traffic may materialize and its
benefits have not been included in the EIRR, following the methodology adopted at
appraisal.

13. The multipurpose bridge with road and rail links and facilities for
telecommunications, and power and gas transmission, will assist in bringing about a
structural change in the economy, but this will take time. To address these development
issues and maximize the impact of the bridge, there are a number of ongoing and
planned initiatives supported by the Asian Development Bank. These include (i)
preparing an area development plan for the northwest, (ii) developing an agricultural
development master plan, (iii) financing key investments aimed at agricultural
development, (iv) constructing the east access road to the Jamuna Bridge for traffic to
and beyond Dhaka, and (v) constructing railway links to connect the country's two
separate rail networks. The Japan Bank for International Cooperation and the World
Bank are also supporting various initiatives and financing a number of projects in the
transport sector on both sides of the Jamuna River.
 Appendix 7, page 4
26

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