The TA will address due diligence requirements for the MFF Program and support investment preparation to be financed through the Project 1 of the MFF, including the (i) physical modernization of the Muhuri Irrigation Project (MIP), and (ii) the establishment of a specialized management unit (SMU) in the MIP. The TA will prepare the following outputs. Their summary and activities are shown in Table A4.1.
The first component of the project preparatory TA (PPTA) will focus on due diligence of MFF processing requirements. The following outputs will be delivered: (i) a refined policy framework, (ii) a sector roadmap, (iii) a medium term investment program, (iv) a Program financing plan, (v) a Program design and monitoring framework, (vi) necessary safeguards frameworks (environment, resettlement and socials) and institutional and governance frameworks to guide future tranches of the MFF program, and (vii) the facility administration manual. Importantly, the TA will provide recommendations to establish the Program Management Unit (PMU), which will assist with the implementation of the investment program, and the activities under Project 1 (covering safeguards, institutional, technical, etc.) as well as the preparation of physical and non physical investments for inclusion under the subsequent tranches. The PPTA will also prepare the bidding documents for the PMU consultants and equipment procurement to ensure quick Program implementation start up.
The second component of the PPTA will be preparation of the investment project under the Project 1 and its due diligence requirements. The outputs will include (i) Project 1 investment plan, design and monitoring framework; (ii) detailed terms of reference of SMU and facilitating entity (FE), clarifying their roles and responsibilities, and contractual obligations to each other and BWDB; (iii) staffing requirements of SMU and initiating Government of Bangladesh procedures for staffing; (iv) engagement with private sector partners who would be interested in acting as FE; (v) procurement details and development of service contract to reflect BWDB, FE, and SMU contractual relationship; (vi) financial management capacity assessment of BWDB and governance requirements of FE and SMU; (vii) updated safeguards planning documents; (viii) updated social and poverty analysis and gender action plan; (ix) updated available feasibility studies and detailed designs of MIP primary system, and terms of reference for further engineering survey, design, drawings, and bid documents of MIP modernization works; (x) updated cost estimate, irrigation service charge rate to be established, and economic and financial analyses; and (xi) draft Development Project Proforma (DPP).
|Project Rationale and Linkage to Country/Regional Strategy
Bangladesh has 31.5% of the population living below income poverty line. Although agriculture's share of the gross domestic product has been declining, it is the primary economic sector in rural areas and provides 63% of rural employment. Bangladesh has a net cultivable area of about 8 million hectares (ha) with currently about 4.5 million ha irrigated, contributing 13 million metric tons of cereals. Enhancing land water and labor productivity is a high priority under the Government of Bangladesh's (the Government) Sixth Five-Year Plan, FY2011-FY2015. Robust and well managed irrigation systems are central to boosting productivity and contributing to food security. Increased use of groundwater for agriculture and its deteriorating quality (arsenic contaminates over 30% of groundwater resources) has serious implications for health and agricultural yields. There is a need to reduce reliance on groundwater by improving the management of surface water, and the reliability and efficiency of irrigation supplies. An additional 1 million ha could be irrigated with large-scale surface water schemes that would further contribute to maintaining a balance between food production and population growth. A weakness that continues to plague the productivity of large scale irrigation schemes is the lack of sustainable operation and maintenance (O&M). Because of this, most large irrigation schemes infrastructure is degraded and need rehabilitation. This is due to inadequate financing ; lack of beneficiary empowerment and engagement in irrigation system management; and weak service delivery, and has direct impact on food security, rural incomes, and poverty. The low performance of large irrigation schemes may be further aggravated by the likely impact of climate change. Possible changes in temperature and rainfall patterns due to global warming may modify crops irrigation requirements and river hydrologic regime and related supply capacity of the irrigation schemes. Such risk need to be assessed and adaptation strategies factored in when modernizing the infrastructure and the system operation.
The Government has a comprehensive water policy framework. The adoption of the National Water Policy in 1999 specifically stated that larger schemes will be placed under private management or joint management by the implementing agency along with local government and community organizations. Despite a supportive policy framework and significant experience in the irrigation subsector, the outcomes of investments to date have been mediocre. In 2005, a technical assistance (TA) prepared the Second Command Area Development Project (CAD-II) to enhance rural incomes by improving productivity of selected major irrigation systems. It was found that the main constraint to efficient performance of the irrigation systems was limited capacity of public agencies in effective management and O&M (MOM) of major irrigation schemes and lack of involvement of water users. Specifically, (i) inadequacy of budget to support system O&M; (ii) lack of distinction between annual, periodic or emergency maintenance of a system; and (iii) poor cost recovery from the water management groups. A subsequent capacity development TA was undertaken in 2009 to investigate potential for alternative service delivery agreements and management arrangements, including independent entities that would better manage and operate the systems.